UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY FOR CALCULATING DUMPING MARGINS ("ZEROING")
Document: RECOURSE TO ARTICLE 21.5 OF THE DSU BY THE EUROPEAN COMMUNITIES AB-2009-1
Date: 14 May 2009
Document codes: WT/DS294/AB/RW
Complainant: EU
Respondent: U.S.
Third parties: Argentina, Brazil, China, Taiwan, Hong Kong, India, Japan, South Korea, Mexico, Norway, Thailand, Turkey
Dispute stage: Implementation & Compliance
Agreements cited: Art. 1, 2.1, 2.4, 5.8, 9.1, 9.3, 9.5, 11  Anti-dumpingArt. VI  GATT 1994Art. 18.4  Anti-dumpingArt. XVI:4  Agreement Establishing the World Trade OrganizationArt. 3  Anti-dumping

UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY FOR
CALCULATING DUMPING MARGINS ("ZEROING")

RECOURSE TO ARTICLE 21.5 OF THE DSU BY
THE EUROPEAN COMMUNITIES

AB-2009-1

Report of the Appellate Body

APPELLATE BODY

Recourse to Article 21.5 of the DSU by the
European Communities

European Communities, Appellant/Appellee
United States, Other Appellant/Appellee

India, Third Participant
Japan, Third Participant
Korea, Third Participant
Mexico, Third Participant
Norway, Third Participant
Separate Customs Territory of Taiwan, Penghu,
 Kinmen and Matsu, Third Participant
Thailand, Third Participant
 AB-2009-1

 Present:

 Oshima, Presiding Member
 Bautista, Member
 Hillman, Member

I. Introduction
1. The European Communities and the United States each appeals certain issues of law and legal
interpretations developed in the Panel Report, – Recou rse to Article 21.5 of the DSU by the European
Communities
 1 (the "Panel Report"). The Panel was established pursuant to Article 21.5 of the
Understanding on Rules and Procedures Governing the Settlement of Disputes ( t h e " D S U " ) t o
consider a complaint by the European Communities concerning the existence and consistency with the
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
(the "Anti-Dumping Agreement") and the General Agreement on Tariffs and Trade 1994 (the "GATT
1994") of measures taken by the United States to comply with the recommendations and rulings of the
Dispute Settlement Body (the "DSB") in the original proceedings in US – Zeroing (EC).2
2. The original proceedings concerned the use of the so-called "zeroing" methodology by the
United States Department of Commerce (the "USD OC") when calculating margins of dumping in the
context of various anti-dumping proceedings. The original panel found that the United States' zeroing

1WT/DS294/RW, 17 December 2008.
2The recommendations and rulings of the DSB resulted from the adoption on 9 May 2006, by the DSB,
of the Appellate Body Report, WT/DS294/AB/R, and the Panel Report, WT/DS294/R, in US – Zeroing (EC).
In this Report, we refer to the panel that considered the original complaint brought by the European
Communities as the "original panel" and to its report as the "original panel report".

methodology, as it relates to original investigations
3, "is a norm which, as such, is inconsistent with
Article 2.4.2 of the [Anti-Dumping] Agreement."4 The original panel also found that the United States
acted inconsistently with Article 2.4.2 of the Anti-Dumping Agreement by applying "model zeroing" 5
in 15 specific original investigations. 6 The original panel also found that the use of "simple zeroing" 7
in 16 specific administrative reviews 8 was not inconsistent with Articles 1, 2.4, 2.4.2, 9.3, 11.1, 11.2,
and 18.4 of the Anti-Dumping Agreement , Articles VI:1 and VI:2 of the GATT 1994, and
Article XVI:4 of the Marrakesh Agreement Establishi ng the World Trade Organization (the " WTO
Agreement").9

3In this Report, we use the term "original investigations" to refer to investigations within the meaning
of Article 5 of the Anti-Dumping Agreement.
4Original Panel Report, paras. 7.106 and 8.1(c). The original panel also found that other measures
challenged by the European Commun ities, such as the "Standard Zeroing Procedures", Sections 731,
751(a)(2)(A)(i)-(ii), 771(35)(A)-(B), and 777(A)(d) of the United States Tariff Act of 1930 (Public Law
No. 1202-1527, 46 Stat. 741, United States Code , Title 19, Chapter 4, as amended) (the "Tariff Act"), and
Section 351.414(c)(2) of the USDOC Regulations, were not inconsistent, as such, with Articles 1, 2.4, 2.4.2, 5.8,
9.3, 11.1, 11.2, 11.3, and 18.4 of the Anti-Dumping Agreement, Articles VI:1 and VI:2 of the GATT 1994, and
Article XVI:4 of the WTO Agreement. (See ibid., paras. 7.69, 7.291, 7.294, and 8.1(b), (g), and (f))
5Before the original panel, the European Communities used the term "model zeroing" to describe a
methodology whereby an investigating authority compares the weighted average normal value and the weighted
average export price for each model of the product un der investigation, and treats as zero the results of
model-specific comparisons where the weighted averag e export price exceeds the weighted average normal
value when aggregating comparison results for the purposes of calculating a margin of dumping for the product
under investigation. (See Original Panel Report, paras. 2.3 and 2.10)
6See Original Panel Report, paras. 7.32 and 8.1(a). The original panel reasoned that, when a margin of
dumping is calculated on the basis of multiple averaging by model type, Article 2.4.2 requires that the margin of
dumping for the product in question reflect the results of all such comparisons, in cluding weighted average
export prices that are a bove the normal value for individual models. (See ibid ., para. 7.31) The original
investigations challenged by the European Communities before the original panel were listed in Panel
Exhibits EC-1 through EC-15. (See ibid., paras. 2.6 and footnote 119 to para. 7.9) The original panel exercised
judicial economy in relation to the Eu ropean Communities' claims under Articles 1, 2.4, 3.1, 3.2, 3.5, 5.8, 9.3,
and 18.4 of the Anti-Dumping Agreement, Articles VI:1 and VI:2 of the GAT T 1994, and Article XVI:4 of the
7Before the original panel, the European Communities used the term "simple zeroing" in administrative
reviews to describe a methodology whereby an investigating authority compares the prices of individual export
transactions against monthly weighted average normal values and treats as zero the results of comparisons
where the export price exceeds th e monthly weighted average normal value when aggregating comparison
results. (See Original Panel Report, paras. 2.5 and 2.12)
8In this Report, we use the term "administrative review" to describe the "periodic review of the amount
of anti-dumping duty" as required in Section 751(a) of the Tariff Act. That provision requires the USDOC to
review and determine the amount of any anti-dumping duty at least once during each 12-month period
beginning on the anniversary of the date of publication of an anti-dumping duty order if a request for such a
review has been received. The administrative review s challenged by the Europe an Communities before the
original panel were listed in Panel Exhibits EC-16 through EC-31. (See Original Panel Report, para. 2.6 and
footnote 202 to para. 7.110)
9See Original Panel Report, paras. 7.223, 7.284, 7.288, and 8.1(d), (e), and (f). The original panel
reasoned, inter alia , that Articles 2.4 and 2.4.2 did not expressly prohibit the use of zeroing in asymmetric
comparisons between weighted averag e normal value and export prices for individual transactions. (See ibid.,
paras. 7.223 and 7.284)

3. On appeal, the Appellate Body upheld, on the basis of modified reasoning, the original panel's
finding that the zeroing methodology, as it relates to original investigations in which the weighted
average-to-weighted average comparison methodology is used to calculate margins of dumping, is
inconsistent, as such, with Article 2.4.2 of the Anti-Dumping Agreement.10 However, the Appellate
Body reversed the original panel's finding that the United States did not act inconsistently with
Articles 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 in the
16 administrative reviews at issue, and found instead that the use of zeroing in those administrative
reviews was inconsistent with those provisions.
11 The Appellate Body stated that the terms
"dumping" and "margins of dumping" in Article VI of the GATT 1994 and the Anti-Dumping
Agreement apply to the product under investigation as a whole, and that, under Article 9.3 of the Anti-
Dumping Agreement and Article VI:2 of the GATT 1994, margins of dumping are established for
foreign producers or exporters. 12 The Appellate Body reasoned that Article 9.3 of the Anti-Dumping
Agreement and Article VI:2 of the GATT 1994 require investigating authorities to ensure that the total
amount of anti-dumping duties collected on entries of a product from a given exporter shall not
exceed the margin of dumping for that exporter or foreign producer as established under Article 2 of
the Anti-Dumping Agreement.
13 The Appellate Body held that, "i f a margin of dumping is calculated
on the basis of multiple comparisons made at an intermediate stage, it is only on the basis of
aggregating all these intermediate results that an investigating authority can establish margins of
dumping for the product as a whole" and, therefore, "the margins of dumping with which the assessed
anti-dumping duties have to be compared under Article 9.3 of the Anti-Dumping Agreement and
Article VI:2 of the GATT 1994 are foreign producers' or exporters' margins of dumping that reflect
the results of all of the multiple comparisons carried out at an intermediate stage of the calculation." 14
According to the Appellate Body, the USDOC acted in consistently with this requirement because, by
disregarding the results of comparisons for which the export price of specific transactions exceeded
the contemporaneous average normal value, it assessed anti-dumping duties in excess of the exporters'

10See Appellate Body Report, US – Zeroing (EC), paras. 222 and 263(b).
11See Appellate Body Report, US – Zeroing (EC) , paras. 135 and 263(a)(i). The Appellate Body also
declared "moot, and of no legal effect " the original panel's finding on Article VI:1 of the GATT 1994; declined
to rule on the European Communities' claim and declared "moot, and of no legal effect" the original panel's
findings under the first sentence of Article 2.4 of the Anti-Dumping Agreement ; upheld the original panel's
finding that zeroing is not an impermissible allowance or adjustment under Article 2.4, third to fifth sentences,
of the Anti-Dumping Agreement ; declined to rule on the European Communities' conditional appeal under
Article 2.4.2 of the Anti-Dumping Agreement; upheld the original panel's finding that the United States did not
act inconsistently with Articles 11.1 and 11.2 of the Anti-Dumping Agreement ; and considered it was not
necessary to rule on whether the zeroing methodology, as applied in the administrative reviews at issue, was
inconsistent with Articles 1 and 18.4 of the Anti-Dumping Agreement and Article XVI:4 of the WTO Agreement.
(See ibid., paras. 135, 147, 159, 164, 169, 172, and 263(a)(iii)-(vii))
12See Appellate Body Report, US – Zeroing (EC), paras. 126 and 129.
13See Appellate Body Report, US – Zeroing (EC), para. 130.
14Appellate Body Report, US – Zeroing (EC), para. 132.

margins of dumping.
15 However, the Appellate Body found that it could not complete the analysis to
determine whether the zeroing methodology, as it relat es to administrative reviews, is inconsistent, as
such, with Articles 1, 2.4, 2.4.2, 9.3, 11.1, 11.2, and 18.4 of the Anti-Dumping Agreement ,
Articles VI:1 and VI:2 of the GATT 1994, and Article XVI:4 of the WTO Agreement.16
4. On 9 May 2006, the DSB adopted the original panel and Appellate Body reports. The
reasonable period of time for the United States to implement the recommendations and rulings of the
DSB, mutually agreed by the parties pursuant to Article 21.3(b) of the DSU, was 11 months, expiring
on 9 April 2007.17
5. On 27 December 2006, the United States announced that it would terminate the use of "model
zeroing" in original investigations in which the margins of dumping are determined on the basis of
weighted average-to-weighted average comparisons of export prices and normal value. This
modification became effective on 22 February 2007. On 1 March 2007, the USDOC initiated
proceedings pursuant to Section 129 of the Uruguay Round Agreements Act18 (the "URAA") covering
12 of the 15 original investigations at issue in the original proceedings. 19 On 9 April 2007, the
USDOC issued Section 129 determinations in whic h it recalculated, without zeroing, the margins of
dumping for 11 of the original investigations at issue in the original proceedings. The results of those
Section 129 determinations became effective two weeks later, on 23 April 2007. The Section 129
determination in the remaining case was issued on 20 August 2007, effective 31 August 2007. The
recalculation without zeroing of the margins of dumping for the exporters concerned led to the
revocation of two of the rema ining 12 anti-dumping duty orders. 20 The remaining 10 original anti-
dumping duty orders were revoked for the exporters or producers for which the USDOC found zero or
de minimis margins, whereas, for other exporters or producers, duties were either reduced or increased
as a result of the recalculation. In addition, the US DOC issued, in the ordinary course, administrative
review determinations with respect to anti-dumping duty orders relating to the original investigations
at issue in the original proceedings. The US DOC continued to apply zeroing when calculating
margins of dumping in those administrative reviews.21

15See Appellate Body Report, US – Zeroing (EC), para. 133.
16See Appellate Body Report, US – Zeroing (EC), paras. 228 and 263(c)(ii).
17WT/DS294/19.
18Section 129 of the Uruguay Round Agreements Act, Public Law No. 103-465, 108 Stat. 4836, United
States Code, Title 19, Section 3538 (2000).
19Three of the 15 anti-dumping duty orders underlying the original investigations challenged by the
European Communities had been previously revoked.
21See Panel Report, para. 3.1(c).

6. With respect to the 16 administrative reviews at issue in the original proceedings, the United
States considered that the cash deposit rates calcul ated in those proceedings—with the exception of
one exporter—were no longer in effect because they had been superseded by subsequent
administrative reviews. Consequently, "no further action was taken by the United States in order to
implement the DSB recommendations and rulings in respect of these administrative review[s]."22
7. Sunset reviews 23 were also conducted with respect to some of the measures at issue in the
original proceedings. On 7 March 2007, following negative determinations by the United States
International Trade Commission (the "USITC") of the likelihood of continuation or recurrence of
injury, the USDOC revoked anti-dumping duty orders in four Cases where the original determinations
had been challenged in the original proceedings. Twelve sunset review determinations issued in
relation to the measures at issue in the original proceedings resulted in the continuation of the relevant
anti-dumping duty order.24
8. On 13 September 2007, the European Communities requested that the matter of compliance
with the recommendations and rulings of the DSB in US – Zeroing (EC) be referred to the original
panel pursuant to Article 21.5 of the DSU. 25 On 25 September 2007, the DSB established the
Article 21.5 panel. In an exchange of views rela ting to the composition of the compliance panel, the
Secretariat of the World Trade Organization (the "WTO") indicated to the parties that two members of
the original panel were not available to serve on the compliance panel.
26 In a letter to the WTO
Secretariat dated 1 October 2007, the European Communities expressed the view that, as the
remaining panelist was available, he should not be excluded from serving on the compliance panel. 27
On 28 November 2007, the European Communities re quested the Director-General of the WTO to
determine the composition of the panel. On 30 N ovember 2007, the Director-General established the
composition of the Panel by appointing three new panelists.
9. The European Communities made claims in relation to certain of the Section 129
determinations adopted by the United States to im plement the recommendations and rulings of the
DSB.28 In addition, the European Communities challenged in these Article 21.5 proceedings

22Panel Report, para. 3.1(d).
23In this Report, we use the term "sunset review" to describe the review of an anti-dumping duty order
at the end of five years, as required by Section 751(c) of the Tariff Act and Article 11.3 of the Anti-Dumping
Agreement. Article 11.3 requires the USDOC to conduct a revi ew to determine, five years after the date of
publication of an anti-dumping duty order, whether revocation of the anti-dumping duty order would likely lead
to continuation or recurrence of dumping and material injury.
24See Panel Report, para. 3.1(e).
25WT/DS294/25.
26Panel Report, para. 5.64.
27Panel Report, para. 5.64.
28See Panel Report, para. 3.2(a) (referring to Cases 2, 3, 4, 5, and 11).

subsequent administrative reviews, changed circumstances reviews
 29, and sunset reviews adopted in
relation to the 15 original investigations and the 16 administrative reviews at issue in the original
proceedings (the "subsequent reviews") 30, as well as liquidation and asse ssment instructions and final
liquidation of duties resulting from those subsequent reviews. 31 The European Communities further
challenged related omissions and deficiencies in the United States' implementation of the DSB's
recommendations and rulings.
32 The European Communities also claimed that the Panel composition
was not consistent with Articles 21.5 and 8.3 of the DSU.
10. Before the Panel in these Article 21.5 proceed ings, the European Communities claimed that
the United States failed to comply with the reco mmendations and rulings of the DSB, and acted
inconsistently with Articles 2.1, 2.4, 2.4.2, 9.3, and 11.3 of the Anti-Dumping Agreement and
Article VI:2 of the GATT 1994, when, after the en d of the reasonable period of time, the United
States:
(a) extended the measures at issue in the origin al proceedings pursuant to sunset review
determinations that relied on margins of dumping calculated with zeroing;
(b) continued to collect anti-dumping duties and established new cash deposit rates based
on zeroing with respect to the measures at issue in the original proceedings and
subsequent reviews;
(c) failed to revoke fully the anti-dumping duty orders underlying the original
investigations at issue in the original proceedings;
(d) continued to collect duties based on zeroing in relation to the 16 administrative
reviews at issue in the original proceedings and in subsequent administrative reviews,
and continued to rely on margins of dumping calculated with zeroing in sunset
reviews subsequent to those administrative reviews; and

29In this Report, we use the term "changed circumstances review" to describe the review of a final
affirmative dumping determination or su spension agreement, as required by Section 751(b) of the Tariff Act.
That provision requires the USDOC to review a final dumping determination or a suspension agreement based
upon a request by an interested party demonstrating th at changed circumstances warrant a review of such a
determination.
 30In the Annex to its request for the establishment of a panel under Article 21.5 of the DSU, the
European Communities identified 31 "Cases". In relatio n to each of these Cases, it also identified reviews
subsequent to the 15 original investigations (Cases 1 through 15) and the 16 administrative reviews (Cases 16
through 31) at issue in the original proceedings. For eas e of reference, we will use the same numbering system
in this Report to facilitate identification of the 31 Case s and the various proceedings at issue, as listed in the
panel request attached to the Panel Report as Annex A-1, pp. A-7 to A-16. (See Panel Report, footnote 34 to
para. 3.1)
31See Panel Report, para. 3.2(b) and (c).
32See Panel Report, para. 3.2(d).

(e) failed to take any measure to comply with the DSB's recommendations and rulings
between the end of the reasonable period of time (9 April 2007) and the date on
which the Section 129 determinations b ecame effective (23 April and 31 August
2007).33
11. The European Communities also claimed that the determination of the "all others" rate and an
arithmetical error in the Section 129 determinati ons adopted by the United States to implement the
recommendations and rulings of the DSB were inconsiste nt with Articles 2, 3.1, 3.2, 3.5, 5.8, 6.8 and
Annex II, 9.3, 9.4, 11.1, and 11.2 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994.34 The United States requested the Panel to reject these claims and to find that the United
States had fully complied with the DSB's recommendations and rulings in the original proceedings.
12. The Panel Report was circulated to WTO Me mbers on 17 December 2008. The Panel found,
inter alia, that:
(b) With respect to the EC general cl aims of failure, by the United States,
to fully implement the recommendations and rulings of the DSB in
the original dispute:
(i) The United States has failed to comply with the
recommendations and rulings of the DSB in the original
dispute and has acted inconsistently with Article 9.3 of the
Anti-Dumping Agreement and Article VI:2 of the GATT
1994 by determining, after the end of the reasonable period
of time, the amount of anti-dumping duty to be assessed
based on zeroing in the 2004-2005 administrative review in
case 1 ( Hot Rolled Steel from the Netherlands ) and issuing
assessment instructions pursuant to that determination and by
determining, after the end of the reasonable period of time,
the amount of anti-dumping duty to be assessed based on
zeroing in the 2004-2005 administrative review in case 6
(Stainless Steel Wire Rod from Sweden ) and issuing
assessment instructions pursuant to that determination.
(ii) The United States has failed to comply with the
recommendations and rulings of the DSB in the original
dispute by continuing to apply to imports of NSK cash
deposit rates established in the 2000-2001 administrative
review in case 31 ( Ball Bearings from the United Kingdom ),
a measure which was found to be inconsistent with
Articles 9.3 of the Anti-Dumping Agreement and VI:2 of the
GATT 1994 in the original dispute.

33Panel Report, para. 4.1(a)-(f).

(iii) The United States has not failed to comply with the
recommendations and rulings of the DSB in the original
dispute by taking actions to liquidate anti-dumping duties
calculated with zeroing pursuant to final duty assessment
determinations made before th e end of the reasonable period
of time (including pursuant to subsequent administrative
reviews listed in the Annex to the EC Article 21.5 panel
request).
(iv) The United States has not failed to comply with the
recommendations and rulings of the DSB in the original
dispute by determining, prior to the end of the reasonable
period of time, the amount of anti-dumping duty to be
assessed based on zeroing in the 2005-2006 administrative
review determination in case 1 ( Hot Rolled Steel from the
Netherlands).
(v) The United States has not failed to comply with the
recommendations and rulings of the DSB in the original
dispute and has not acted inconsistently with Articles 2.4.2
and 9.3 of the Anti-Dumping Agreement and Article VI:2 of
the GATT 1994 by establishing a new cash deposit rate
based on zeroing in the 2004-2005 administrative review
determination in case 6 ( Stainless Steel Wire Rod from
Sweden) because due to the revocation of the measure in
question, no cash deposit requirement was actually imposed.
(vi) Having found that none of the sunset reviews with respect to
which the European Communities makes claims and which
are within our terms of reference had, by the time of the
establishment of the Panel, resulted in the continuation of the
concerned anti-dumping orders, we make no findings in
respect of the claims of the European Communities that the
United States violated Articles 2.1, 2.4, 2.4.2 and 11.3 of the
Anti-Dumping Agreement as a result of having relied on
margins of dumping calculated with zeroing in the context of
sunset reviews involving measures challenged in the original
dispute.
(vii) We make no findings with respect to the EC claim that the
United States violated Articles 21.3 and 21.3(b) of the DSU
by failing to take any measure to comply between 9 April
and 23 April/31 August 2007.
(c) With respect to the EC claims that certain US measures taken to
comply are inconsistent with the US obligations under the covered
agreements:
(i) Having found that the claim of the European Communities
with respect to the Section 129 determination in case 11
(Stainless Steel Sheet and Strip in Coils from Italy )
concerning the calculation error is not properly before us, we
make no findings on the consiste ncy of that determination

with Articles 2, 5.8, 6.8, 9.3, 11.1 and 11.3 of the Anti-
Dumping Agreement and Article VI:2 of the GATT 1994.

(iii) With respect to cases 2, 4 and 5 (Stainless Steel Bar from
France, Italy and the United Kingdom), the United States did
not act inconsistently with Article 9.4 of the Anti-Dumping
Agreement in the establishment of "all others" rates in the
Section 129 determinations in these cases. We make no
findings regarding the EC claims under Article 6.8 and
Annex II of the Anti-Dumping Agreement in respect of these
same measures.
35
13. On 13 February 2009, the European Communiti es notified the DSB, pursuant to Articles 16.4
and 17 of the DSU, of its intention to appeal certa in issues of law and legal interpretations developed
in the Panel Report and filed a Notice of Appeal 36, pursuant to Rule 20 of the Working Procedures for
Appellate Review 37 (the " Working Procedures"). On 20 February 2009, the European Communities
filed an appellant's submission.38 On 25 February 2009, the United States notified the DSB, pursuant
to Article 16.4 of the DSU, of its intention to ap peal certain issues of law and legal interpretations
developed in the Panel Report and filed a Notice of Other Appeal 39, pursuant to Rule 23(1) and (2) of
the Working Procedures. On 2 March 2009, the United States filed an other appellant's submission.40
On 10 March 2009, the United States and the Eu ropean Communities each filed an appellee's
submission.41 On 26 February 2009, Japan file d a third participant's submission 42; on 10 March
2009, Korea and Norway each filed a third participant's submission 43 and India, Mexico, the Separate
Customs Territory of Taiwan, Penghu, Kinmen and Ma tsu, and Thailand each no tified its intention to
appear at the oral hearing and to make an opening statement.44
14. On 16 and 19 February 2009, respectively, the European Communities and the United States
requested the Appellate Body Division hearing this appeal to authorize public observation of the oral
hearing. Both participants relied on the r easoning of the Appellate Body in previous cases 45 to
authorize public observation of the oral hear ing, and expressed a preference for simultaneous

35Panel Report, para. 9.1.
36WT/DS294/28 (attached as Annex I to this Report).
37WT/AB/WP/5, 4 January 2005.
38Pursuant to Rule 21 of the Working Procedures.
39WT/DS294/29 (attached as Annex II to this Report).
40Pursuant to Rule 23(3) of the Working Procedures.
41Pursuant to Rules 22 and 23(4) of the Working Procedures.
42Pursuant to Rule 24(1) of the Working Procedures.
43Pursuant to Rule 24(1) of the Working Procedures.
44Pursuant to Rule 24(2) of the Working Procedures.
45US – Continued Suspension / Canada – Continued Suspension; EC – Bananas III (Article 21.5 –
Ecuador II) / EC – Bananas III (Article 21.5 – US); US – Continued Zeroing.

closed-circuit television broadcast to a separate ro om. On 20 February 2009, the Division invited the
third participants to comment in writing on the re quests of the European Communities and the United
States, as well as the specific logistical arrangeme nts proposed in the requests. Comments were
received on 2 March 2009 from India, Japan, Korea, Mexico, Norway, the Separate Customs Territory
of Taiwan, Penghu, Kinmen and Ma tsu, and Thailand. Japan, Norway, and the Separate Customs
Territory of Taiwan, Penghu, Kinmen and Mats u expressed support for the requests of the
participants. India, Mexico, and Thailand expressed the view that the provisions of the DSU do not
allow public hearings at the appellate stage. Kore a shared these concerns, but did not object to the
public observation of the oral hearing. On 4 March 2009, the Division issued a Procedural Ruling in
which it authorized the public observation of the oral hearing and adopted additional procedures on
logistical arrangements in accordance with Rule 16(1) of the Working Procedures .
46 Notice of the
opening of the hearing to public observation and regi stration instructions were provided on the WTO
website.
15. The oral hearing in this appeal was held on 23-24 March 2009. The participants and third
participants were given the opportunity to present oral arguments and respond to questions posed by
the Division hearing the appeal. Public observa tion took place via simultaneous closed-circuit
television broadcast to a separate room.47
II. Arguments of the Participants and the Third Participants
A. Claims of Error by the European Communities – Appellant
1. Panel Composition
16. The European Communities alleges that the Panel failed to comply with the "basic
requirements of due process" and failed to ensure the "proper exercise of its judicial function" by not
addressing the European Communities' claim that th e Panel was composed in a manner inconsistent
with Articles 8.3 and 21.5 of the DSU. 48 The European Communities submits that, because panels,
and ultimately the Appellate Body, have the aut hority and the obligation to rule on the correct
interpretation of the DSU, defects that could ari se during panel composition are subject to judicial
review. Therefore, the Panel could not have a voided the substance of the European Communities'

46The Procedural Ruling is attached as Annex III to this Report.
47Pursuant to the additional procedures adopted by the Division, India, Korea, Mexico, and Thailand
each requested that its oral statements and responses to questions remain confiden tial and not be subject to
public observation.
48European Communities' appellant's submission, para. 25. The European Communities believes that
the Panel also acted inconsistently with Articles 1.1, 3.2, 3.3, 7.2, 11, 12.7, 19.2, and 23.1 of the DSU.

claim under Articles 8.3 and 21.5 of the DSU by characterizing it as a question of "application" 49 of
the DSU by the Director-General.
17. According to the European Communities, th e United States unlawfully withdrew, in the
context of the compliance proceedings, the consent it provided pursuant to Article 8.3 of the DSU in
the original proceedings to the appointment of pa nelists that are nationals of the parties. The
European Communities maintains that the United St ates' erroneous interpretation of the DSU was
followed by the WTO Director-General, and ultimatel y by the Panel, because there would have been
no basis for the application of Article 8.7 of th e DSU in relation to the panelist for which an
agreement existed pursuant to Article 8.3. For th e European Communities, the Panel erred in finding
that Article 8.7 applies "whenever ther e is no agreement between the parties" 50, because the
disagreement between the parties related to the corr ect interpretation of Article 8.3. Instead of
presupposing the absence of an agreement under Ar ticle 8.3, the Panel should have addressed the
question of whether or not the United States could withdraw unilatera lly its agreement under
Article 8.3.
18. The European Communities requests the Appellate Body to find that the composition of the
Panel in this case was inconsistent with Ar ticles 8.3 and 21.5 of the DSU. The European
Communities maintains that its claim raises systemic implications that concern the integrity of the
dispute settlement system, because the Panel's approach would imply that panels can be composed in
a way that would allow losing parties to "unilate rally sack panellists that have found against them
half-way through the proceedings". 51 The European Communiti es observes that compliance
proceedings and original proceedings relate to a "continuum of events" 52, and that, under Article 21.5
of the DSU, it remained "possible" 53 for the original panel, consisting of the remaining panelist
together with two new appointees, to deal with th e matter. According to the European Communities,
once a panelist has engaged in the dispute, he or she must be protected throughout the proceedings
from pressure from either party. The European Communities finds contextual support for its position

51European Communities' appellant's submission, para. 39. (emphasis omitted)
52European Communities' appellant's submission, para. 40 (referring to Appellate Body Report, Mexico
– Corn Syrup (Article 21.5 – US) , para. 121; Appellate Body Report, US – Softwood Lumber IV (Article 21.5 –
Canada), para. 90; Appellate Body Report, Chile – Price Band System (Article 21.5 – Argentina) , para. 136;
Appellate Body Report, US – FSC (Article 21.5 – EC II), para. 87; Appellate Body Report, US – Upland Cotton
(Article 21.5 – Brazil), para. 397; Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / EC –
Bananas III (Article 21.5 – US) , para. 258; and Appellate Body Reports, US – Continued Suspension and
Canada – Continued Suspension, para. 342).
53European Communities' appellant's submission, para. 41. In the European Communities' view, one of
these new panelists could be a citizen of the United States , because the agreement under Article 8.3 refers to the
nationality of parties to a dispute, not to individuals.

in Article 8.6 of the DSU, pursu ant to which the parties shall not oppose panelists other than for
compelling reasons, and in Article 21.5 of the DSU, which provides that a panel shall circulate its
report within 90 days (which is a result easier to achieve with the same panelists). The European
Communities also considers that its position is cons istent with the object and purpose of the DSU,
which includes the prompt and effective settlement of disputes by independent panelists resulting in
binding panel reports.
19. The European Communities disagrees with the Pa nel's statement that, if it had come to the
conclusion that it was improperly constituted, it woul d necessarily have to decline its jurisdiction to
address the other claims in this dispute. In any event, the European Communities requests the
Appellate Body to refrain from making any conseque ntial finding that the Panel had no jurisdiction to
examine and rule on its other claims. The European Communities considers that it has the right in this
specific case, and with respect to this specific issu e of consequential findings, to "partially waive or
relinquish"
54 its rights under the DSU, and it exercises that ri ght in this appeal. In the event that the
Appellate Body should find that the Panel had no jurisdiction to examine and rule on any of the
European Communities' other claims in this dis pute, the European Communities would withdraw the
entirety of its appeal on the question of panel composition.
2. The Panel's Terms of Reference
20. The European Communities argues that the Panel er red in excluding, in response to a request
by the United States for a preliminar y ruling, from its terms of refere nce the subsequent reviews that
were issued before the adoption of the DSB's recommendations and rulings in the original
proceedings. The European Communities urges the A ppellate Body to reverse this finding, and to
find instead that all the subsequent reviews listed in the European Communities' panel request fell
within the Panel's terms of reference under Article 21.5 of the DSU, because they were:
(i) amendments to the original investigations a nd administrative reviews at issue in the original
proceedings; (ii) omissions or deficiencies in the United States' implementation of the DSB's
recommendations and rulings; and, in the alternative, those reviews (iii) had a "close nexus" to those
DSB rulings.
21. First, the European Communities maintains that th e Panel erred in finding that the subsequent
reviews did not fall under its terms of reference be cause they were "amendments" to the measures at
issue in the original proceedings. The Europ ean Communities argues that the Panel improperly
narrowed the context in which the term "any amendm ents" was used in the original proceedings by

focusing on the manner in which the European Commun ities framed its claims in its original panel
request. The European Communities maintains further that an examination of how the measures at
issue had been clarified in the course of the orig inal proceedings (including in its panel request,
submissions to the panel, descriptive part of the panel report, interim and final panel report, and
Appellate Body report) indicates that "any amendm ents" to the 15 original investigations and the
16 administrative reviews at issue in that dispute would be covered by the DSB's recommendations
and rulings. The European Communities adds that the use of the term "any" by the panel and the
Appellate Body indicates the "broad coverage" 55 of the measures at issue in the original proceedings.
Furthermore, the ordinary meaning of the te rm "amendment" indicates that any "changes or
modifications"56 to the measures at issue are included. In this respect, the European Communities
notes that the subsequent administrative and sunset reviews listed in its Article 21.5 panel request
modified the measures at issue either by assessing duties and imposing new cash deposit rates based
on zeroing, or by extending the life of anti-dumping measures on the basis of margins of dumping
calculated with zeroing.
22. Secondly, the European Communities argues that the Panel erred in failing to examine its
claim that subsequent administrative and sunset re views fell within the Panel's terms of reference as
"omissions" or "deficiencies"
57 in the United States' implementation of the DSB's recommendations
and rulings. In declining to address the European Communities' claim in this respect on the grounds
that "any 'omission' or 'deficiency' of the United St ates in the form of a subsequent review would be
captured in the ['close nexus'] analysis" 58, the Panel disregarded the "conditional order of the legal
claims"59 raised by the European Communities. This is because the European Communities' claim
that subsequent reviews fell within the Panel's term s of reference in the light of their "close nexus" to
the original measures at issue was made in the alternative, subject to the condition that the Panel reject
its main claims that subsequent reviews fell within the Panel's terms of reference either as
"amendments" to the original measures at issue, or as "omissions" or "deficiencies" in the United
States' implementations of the DSB's recommenda tions and rulings. The European Communities
contends that panels are "in principle bound by the sequencing order of the legal claims made by the
complaining party"60 because this forms part of their manda te. Therefore, the European Communities
submits that the Panel failed to comply with its mandate under Article 11 of the DSU in declining to

55European Communities' appellant's submission, para. 71. (emphasis omitted)
56European Communities' appellant's submission, para. 72. (emphasis omitted)
59European Communities' appellant's submission, para. 79. (emphasis omitted)

examine its claim that any omissions and deficien cies by the United States in connection with the
original measures at issue and subsequent reviews fell within the Panel's terms of reference.
23. Moreover, the European Communities argues that the Panel exercised false judicial economy
in finding that the United States' omissions would be "captured" in its analysis of whether the
subsequent reviews could fall within its terms of reference by virt ue of their close nexus to the
original measures at issue. According to the European Communities, the only "omission" by the
United States that the Panel addressed in its "clo se nexus" analysis was th e continued imposition of
cash deposits at rates calculated with zeroing after the end of the reasonable period of time. However,
the European Communities' challenge in this regard also encompassed other omissions by the United
States that were not addressed by the Panel's "close nexus" analysis. More specifically, the European
Communities challenged omissions by the United Stat es in the form of actions to assess and collect
duties after the end of the reasonable period of time with respect to unliquidated entries made before
that date, and the United States' failure to r ecalculate, without zeroing, margins of dumping upon
which United States authorities would rely in maki ng their likelihood-of-dumping determinations in
the subsequent sunset reviews at issue. Conseque ntly, the Panel's analysis only partially addressed
omissions and deficiencies in the United States ' implementation of the DSB's recommendations and
rulings. According to the European Communities, each of the omissions by the United States fell
within the Panel's terms of reference because "t he necessary 'measure taken to comply' [did] not
exist."
61
24. Finally, the European Communities submits that the Panel erred in excluding the subsequent
reviews that were issued before the adoption of the DSB's recommendations and rulings from its
terms of reference, for the reason that they did not have a sufficiently close nexus, in terms of timing,
with the original measures at issue and the DS B's recommendations and rulings. The European
Communities considers that the fact that a measure pre-dates the adoption of the DSB's
recommendations and rulings cannot be determinative of the question whether it falls within the scope
of compliance proceedings. The European Communities emphasizes that compliance does not
necessarily occur by virtue of actions that take place after the adoption of the DSB's
recommendations. Rather, a Member may withdraw a measure within the meaning of Article 3.7 of
the DSU, or bring it into conformity with its ob ligations under Article 19.1 of the DSU, at any time
after the establishment of the panel and before the a doption of the panel or Appellate Body reports.
The European Communities adds that the "inherent limits" 62 of the claims that may be submitted to an

61European Communities' appellant's submission, para. 81 (referring to Appellate Body Report, US –
Softwood Lumber IV (Article 21.5 – Canada), para. 67).

Article 21.5 panel should not allow circumvention of a WTO Member's implementation obligations,
and should not undermine the effective resolution of disputes. For this reason, the European
Communities suggests that the effects of a measure are the relevant factor in determining whether
such measure may be examined in proceedings under Article 21.5 of the DSU. 63 By contrast, factors
such as the timing, direction, or intention of a measure cannot limit the scope of compliance
proceedings, because they could be used by WTO Members to circumvent their compliance
obligations.
25. In the European Comm unities' view, the Panel's finding that the timing of subsequent
measures may undermine their close nexus with th e DSB's recommendations and rulings ignores the
fact that successive determinations of different ty pes are made in a single trade remedy proceeding.
In this sense, subsequent reviews form part of a "continuum of events"
64 that is largely determined by
the provisions of the Anti-Dumping Agreement . According to the European Communities, "giving
relevance to the timing of the subsequent measu res to break the close connection with the DSB
recommendations and rulings in the original dispute ignores the fact that those successive
determinations of different typ es are made in the context of a single trade remedy proceeding ,
involving the imposition, assessment and collection of anti-dumping duties on imports of a particular
subject product, from the same country." 65 Therefore, determinations made in subsequent reviews
under the same anti-dumping duty order are cl osely connected for th e purposes of assessing
compliance with the DSB's recommendations and rulings, regardless of their timing. According to the
European Communities, the United States confirmed th is link when it claimed before the Panel that
the existence of such subsequent reviews "imple mented" the DSB's recommendations and rulings or
constituted "withdrawal" of the measur es found to be WTO-inconsistent. 66 The European
Communities adds that, because the United States' actions to collect cash deposits and assess and
liquidate entries based on zeroing took place after the end of the reasonable period of time, and fell
within the Panel's terms of reference as omissions in the United States' implementation obligations, it
is immaterial whether those actions were based on determin ations that pre-date the adoption of the
DSB's recommendations and rulings.

63European Communities' appellant's submission, paras. 91 and 92 (referring to Appellate Body Report,
US – Softwood Lumber IV (Article 21.5 – Canada), paras. 65 and 66; and Appellate Body Report, US – Upland
Cotton (Article 21.5 – Brazil), para. 238).
65European Communities' appellant's submission, para. 93 (original emphasis) (referring to Appellate
Body Report, US – Continued Zeroing, para. 181).
66European Communities' appellant's submission, para. 94 (quoting United States' first written
submission to the Panel, paras. 96 and 102).

3. The Scope of the United States' Compliance Obligations

26. The European Communities argues th at the Panel erred in rejecting its claims that certain
actions or omissions by the United States based on zeroing after the end of the reasonable period of
time were inconsistent with the United States' obligations to comply immediately with the
recommendations and rulings of the DSB, and with Articles 9.3 and 11.3 of the Anti-Dumping
Agreement, Article VI:2 of the GATT 1994, and Article 21.5 of the DSU. The European
Communities requests the Appellate Body to modify or reverse these findings, and to find that the
United States acted inconsistently with these provi sions by continuing to assess and collect duties and
to impose cash deposit rates based on zeroing after the end of the reasonable period of time, on the
basis of determinations made before that date.
27. The European Communities explains that rulings contained in reports adopted by the DSB are
not treaty-making by the WTO Members but, rather, constitute judicial activity aimed at clarifying,
interpreting, and applying the cove red agreements, which are binding since their entry into force.
Accordingly, neither Article 28 of the Vienna Convention on the Law of Treaties 67 (the " Vienna
Convention"), nor specific provisions of the covered agreements that speak to inter-temporal law
issues or general considerations about inter-temporal law are releva nt to a consideration of the
temporal reach of DSB rulings. Article 28 provides that a new treaty does not apply to any act that
took place or any situation that ceased to exist befo re its entry into force. Article 28 is silent,
however, on continuing situations, which, in the European Communities' view, implies that a new
treaty applies immediately to a continuing situati on. For the European Communities, a ruling of
inconsistency contained in a report adopted by the DSB creates "a presumption of inconsistency going
forward", which applies " from the date on which the measure came into existence to the date on
which the measure is withdrawn or amende d so as to remove the inconsistency." 68 Thus, the
European Communities distinguishes the temporal effects of rulings by the DSB, which establish that
a measure is WTO-inconsistent from the date of its adoption, from the temporal scope of the DSB's
recommendations, which require Members to bring that measu re into conformity by the end of the
reasonable period of time. In this regard, the Eu ropean Communities adds that the reasonable period
of time is the time considered necessary for a Memb er to operate its legislative or administrative
procedures, rather than a "transitional period" 69, after which any implementing measure must be
effective.

67Done at Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679.
68European Communities' appellant's submission, para . 135 (original emphasis) (referring to European
Communities' response to Panel Question 32).

28. Turning to the administrative reviews concluded after the end of the reasonable period of time
(9 April 2007), and in particular the 2004-2005 administrative review concluded on 22 June 2007 in
Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands (Case 1), the European
Communities underscores that the temporal scope of th at administrative review is a factual element of
United States municipal law that is not in disput e between the parties. The European Communities
also asserts that a major flaw in the United States' position is "to construe the DSB rulings and
recommendations as if they were legislative activity on an equal footing with treaty making by the
WTO Members, whereas in fact th ey constitute judicial activity, clarifying, interpreting and applying
the covered agreements." 70 By applying an administrative review determination based on zeroing to
"continuing situations" 71 after the end of the reasonable period of time, the United States did not
immediately comply with its obligation not to use zeroing. Thus, whereas the European Communities
agrees with the Panel's ultimate finding that the United States failed to comply with the DSB's
recommendations and rulings by issuing assessment instructions based on zeroing following the
2004-2005 administrative review in Case 1, it cont ests the underlying reasoning. For the European
Communities, these assessment inst ructions are inconsistent, not because they are consequent upon
the results of the administrative review, but becau se no action may be taken after the end of the
reasonable period of time based on zeroing. Furthe rmore, the European Co mmunities argues that the
final liquidation of duties following the 2004-2005 admi nistrative review in Case 1 also constitutes a
failure to comply, because it was based on zeroing after the expiry of the reasonable period of time,
and the Panel erroneously omitted to make any finding in this respect.
72
29. Next, the European Communities addresses assessmen t instructions or final liquidations that
take place after the end of the reasonable period of time in relation to the measures found to be
WTO-inconsistent in the original panel proceed ings. The European Communities argues that any
assessment instructions or final liquidations rela ting to these measures issued or occurring after the
end of the reasonable period of time must not be based on zeroing. The European Communities
rejects the view that it is the municipal law in for ce at the date of entry that determines the amount to
be assessed, irrespective of whether or not such muni cipal law is WTO-consistent, and irrespective of
the obligations flowing from the DSU. For the Eu ropean Communities, if a measure found to be
WTO-inconsistent is to continue to be applied or have effects beyond the end of the reasonable period
of time, this may only be done in a WTO-consistent manner.

70European Communities' appellant's submission, para. 147. (emphasis omitted)
72The European Communities suggests that the same argument applies, mutatis mutandis , to the
2004-2005 administrative review in Stainless Steel Wire Rod from Sweden (Case 6). (See European

30. Moving to cases where subsequent administrative reviews take place before the end of the
reasonable period of time, but assessment instructions are issued or final liquidation occurs after that
date, the European Communities notes that its argume nts in this respect are not entirely dependent
upon the existence of municipal judicial proceedi ngs, because this situation may also result from a
lapse of time between the results of the admi nistrative review and the issuance of assessment
instructions. The European Communities' view is based on the principle that immediate compliance
by the end of the reasonable period of time precludes any action or omission involving zeroing after
that date, regardless of whether those actions are or relate to administrative reviews, assessment
instructions, or any other type of action. For th e European Communities, the Panel erred in assuming
that assessment instructions are entirely "consequent"
73 upon administrative reviews. In this respect,
the European Communities observes that, whereas the calculations in the administrative review are
expressed as exporter-specific calculations, assessme nt instructions are importer-specific.
Furthermore, zeroing might be reintroduced at the collection stage as customs authorities might
receive instructions to collect duties on a tran saction-by-transaction basis (disregarding those
transactions where export price exceeded normal value).
31. The European Communities subm its that several interpretative considerations provide
"overwhelming support"
74 for the principle that immediate compliance by the end of the reasonable
period of time precludes all actions or omissions base d on zeroing after that date. Thus, the European
Communities points to the requirements in Articles 19.1 and 21.3 of the DSU that "Members must
comply immediately following the end of the reasonable period of time." 75 The European
Communities also maintains that several provisions of the Anti-Dumping Agreement support its
approach to compliance, which seeks to preserve the rights of exporters and importers, at no detriment
to the domestic industry, and is opposed to a logic that would result in "using a 'transitional period' to
perpetuate an unlawful situation".76 Relying on the context provided by Articles 1, 5.9, and 18.1 of
the Anti-Dumping Agreement , the use of the term "applied" in Article 1 of the Anti-Dumping
Agreement , the reference in Articles 8.1, 9.1, 10.4, 11.2, 11.3, 12.2.1, 12.2.2, and 18.3 of the Anti-
Dumping Agreement to the terms "impose" and "imposition", the use of the term "levy" in
Article VI:2 of the GATT 1994 and the definiti on of this term in footnote 12 of the Anti-Dumping
Agreement, and the language of Article 9 of the Anti-Dumping Agreement that refers to the imposition
and collection of anti-dumping duties, the European Communities contends that the Anti-Dumping
Agreement disciplines all actions taken by WTO Members against dumping. Such actions include

75European Communities' appellant's submission, para. 169. (original emphasis)
76European Communities' appellant's submission, para. 170. (original emphasis)

both "the full range of actions by which anti-dum ping duties might be imposed, assessed and finally
collected", and "the moment when the anti-dumping duty is finally collected." 77 For the European
Communities, it follows that those actions for collec ting duties are, logically, relevant for assessing
compliance with the DSB's recommendations and rulings as well as the covered agreements. 78 The
European Communities contends that its views are al so supported by statements of the United States
in the panel proceedings in US – Section 129(c)(1) URAA , where the United States indicated that
United States municipal law does not preclude the WT O-consistent treatment of unliquidated entries
that occurred before the end of the reasonable period of time.79
32. For the European Communities, its analysis is not affected by the possibility that assessment
instructions (or final liquidations) might be delayed as a result of judicial proceedings. The European
Communities underscores that there is an obligation in Article 13 of the Anti-Dumping Agreement to
provide for adequate judicial review of de terminations, and that footnote 20 of the Anti-Dumping
Agreement recognizes the possibility that assessment pro ceedings be delayed as a result of judicial
proceedings. According to the European Communities, WTO Members are not allowed to circumvent
compliance with DSB recommendations and rulings by shielding the result of their domestic litigation
proceedings from their obligations under the WT O agreements. Thus, the European Communities
contends that, regardless of whether there is do mestic litigation, the anti-dumping duties that are
collected after the end of the reasonable period of time duties must not reflect the zeroing
methodology.
33. Applying the principles outlined above to the sp ecific Cases before the Panel, the European
Communities requests the Appellate Body to modi fy the Panel's reasoning in relation to the
2004-2005 administrative reviews in Certain Hot-Rolled Carbon Steel Flat Products from the
Netherlands (Case 1) and Stainless Steel Wire Rod from Sweden (Case 6). Specifically, the European
Communities seeks review of the Panel's findi ng that assessment instructions are entirely
"consequent" upon administrative reviews, and requ ests a specific finding with respect to final
liquidations occurring after the end of the reasonabl e period of time. With respect to the 2005-2006
administrative review in Case 1, the European Co mmunities contends that the Panel also erred in

78The European Communities finds additional contextual support in Article 7.2 of the Anti-Dumping
Agreement (which provides that withholding appraisement may constitute an appropriate provisional measure)
for its position because, when such a provisional measure is taken, the amount of the final liability is determined
at the moment of final liquidation and, therefore, this action is "necessarily regulated by the disciplines of the
Anti-Dumping Agreement". (European Communities' appellant's submission, para. 179)
79European Communities' appellant's submissi on, para. 180 (referring to Panel Report, US –
Section 129(c)(1) URAA, para. 6.42).

finding that the United States did not fail to bring its measures into conformity by issuing assessment
instructions on 16 April 2007, and by liquidating the relevant duties on 23 April 2007.
34. Furthermore, the European Communities argues th at the Panel erred in failing to address the
specific Cases for which anti-dumping duty orders remain in place, which permits the United States to
continue to apply duties or cash deposit rates based on zeroing after the end of the reasonable period
of time in relation to 12 of the 16 administrative re views at issue in the or iginal proceedings. The
European Communities observes that the Panel conducted a specific analysis of Case 31 and made
findings of inconsistency in relati on to cash deposits applied after th e expiry of the reasonable period
of time, and correctly observed that anti-dumping duty orders in four Cases had been revoked.
However, the Panel did not examine the remaining 11 Cases
80 for which anti-dumping duty orders
remain in place, on the grounds that it did not have before it any substantive arguments or supporting
materials in relation to these Cases that would ha ve allowed it to make an y additional substantive
findings. Relying on statements, arguments, and claims in the compliance panel request, its written
submissions and oral statements before the Pane l, and its replies to the Panel's questions, the
European Communities asserts that "the Panel had enough evidence to conclude that the United States
continued collecting duties and establishing or ma intaining cash deposits based on zeroing after the
expiry of the reasonable period of time." 81 On this basis, the Eur opean Communities requests the
Appellate Body to reverse these findings, complete th e analysis, and to find that, with respect to these
11 Cases and to Case 31, the United States has failed to comply with the DSB's recommendations and
rulings, and continues to act in a WTO-inconsistent manner, by continuing to maintain duties or cash
deposit rates based on zeroing after the expiry of the reasonable period of time. The European
Communities also requests the Appellate Body to fi nd that the Panel's failure to address these Cases
constitutes a violation of Article 11 of the DSU.
35. As a separate matter, the European Communities claims that the Panel erred in its treatment
of the "domino theory" 82 advanced by the European Communities that, once an anti-dumping duty
order was revoked pursuant to a Section 129 dete rmination (because in the absence of zeroing, no
dumping was found), the United States was not entitled, after the end of the reasonable period of time,
to conduct administrative reviews based on zeroing, or to take other actions based on zeroing, in
relation to that revoked order. For the Europ ean Communities, a measure cannot be understood to
have been withdrawn if its effects are still in place. The European Communities considers, as the
relevant Section 129 determinati ons imply, that once the legal basis of the anti-dumping measures

80These were Cases 18, 19, 20, 21, 22, 23, 24, 27, 28, 29, and 30.

disappeared the United States was no longer allowe d to take subsequent actions (including
administrative reviews) based on zeroing after the expiry of the reasonable period of time.
4. The Subsequent Sunset Reviews
36. The European Communities claims that the Panel erred in finding that the European
Communities did not demonstrate that the United States had failed to comply with the DSB's
recommendations and rulings in the subsequent sunset review proceedings at issue, because "the
results of those sunset reviews had not yet material ised at the time when the Panel was established
(i.e., 25 September 2007)."
83 The European Communities also clai ms that the Panel, in so doing,
failed to fulfil its duties pursuant to Article 11 of the DSU. The European Communities requests the
Appellate Body to reverse the Panel's findings and to find instead that, by relying in the sunset review
proceedings on margins calculated in prior proceed ings with the use of zeroing, the United States
failed to comply with the DSB's recommendations a nd rulings in the original proceedings and acted
inconsistently with Articles 2.1, 2.4, 2.4.2, and 11.3 of the Anti-Dumping Agreement.
37. The European Communities argues that "the fact that continuation orders had not yet been
published with respect to some subsequent sunset reviews at the time the Panel was established
does not mean that the USDOC's dumping determinations ma de in the context of those sunset review
proceedings are irrelevant for assessing the US compliance with the DSB recommendations and
rulings in the original dispute." 84 In this respect, the European Communities notes that, because of
those positive determinations of likelihood of r ecurrence of dumping by the USDOC relying on
dumping margins based on zeroing, the original me asures were extended beyond the expiry of the
reasonable period of time and some remained in place at the date of the establishment of the Panel,
contrary to the United States' obligations under the Anti-Dumping Agreement and the DSB's
recommendations and rulings in the original proceedings.
38. According to the European Communities, the relevant action that should serve to assess
compliance by the United States is the final determination by the USDOC of the likelihood of
dumping, rather than the publication of the continuation order. The European Communities notes that
even the Panel "took into account the date of the pu blication of the USDOC's final determinations as
the relevant action by the United States (rather than the pub lication of the continuation order) to bring
some subsequent sunset reviews within its terms of reference."
85 The European Communities

84European Communities' appellant's submission, para. 112. (original emphasis)
85European Communities' appellant's submission, pa ra. 113 (original emphasi s) (referring to Panel
Report, para. 8.124).

contends that, "if such action is considered a meas ure taken to comply falling within the scope of the
compliance proceeding, Articles 11 and 21.5 of the DSU require panels to examine its consistency
with the DSB recommendations and rulings and the covered agreements, and make the findings
provided for in the covered agreements."
86
39. The European Communities further submits that, pursuant to Article 11.3 of the Anti-
Dumping Agreement , the anti-dumping duty may remain in force pending the outcome of a sunset
review so that, during sunset review proceedings, imports are still subject to duties/cash deposits. The
European Communities contends that, when the Pane l was established, the original measures were
kept in effect and "the United States was requi ring cash deposits based on zeroing because the United
States had extended the duration of the sunset re view proceedings pursuant to [the] USDOC's
determinations which relied on dumping margins based on zeroing."87
40. The European Communities therefore concludes th at the failures by the United States in these
sunset review proceedings had already materialized at the date of the establishment of the Panel and
had allowed the United States to extend the life of th e original measures found to be in violation of
Articles 2.1, 2.4, 2.4.2 and 11.3 of the Anti-Dumping Agreement and the DSB's recommendations and
rulings. The European Communities further cont ends that, in Case 19, the USITC had already
confirmed on 7 September 2007, before the date of the establishment of the Panel, that the original
order would remain in place. Regarding Cases 2, 3, 4, and 5, the European Communities argues that,
the fact that the sunset review proceedings resulted in the revocation of the original anti-dumping duty
order with effect as of 7 March 2007, does not change the fact that imports occurring after the end of
the reasonable period of time were subject to cash deposit requirements based on zeroing until the
revocation of the original order.
41. Finally, the European Communities contends that the Panel acted inconsistently with
Article 11 of the DSU because it did not address the claim that, by keeping in place certain aspects of
the measures at issue in the original proceedings (that is, the dumping margins based on zeroing), the
United States failed to comply with the DSB's recommendations in the original proceedings.
42. In particular, regarding Case 19, the European Communities contends that, in carrying out its
determination of the likelihood of recurrence of dumping, the USDOC relied on the same dumping
margin based on zeroing calculated in the original investigation and in the administrative review, and
that such a determination could not constitu te a proper foundation for the continuation of

86European Communities' appellant's submission, para. 113. (italics removed)

anti-dumping duties under Article 11.3 of the Anti-Dumping Agreement. Therefore, contrary to the
Panel's conclusion, the European Communities cons iders that a finding on this separate claim is
necessary to solve the dispute.
5. The Non-Existence of Measures between 9 April and 23 April/31 August
2007
43. The European Communities submits that the Panel disregarded its mandate and erred in
failing to make findings regarding the non-existen ce of measures taken to comply between 9 April
and 23 April/31 August 2007. The European Commun ities requests the Appellate Body to find that
the Panel erred in this respect, and to complete th e analysis and find that the United States violated
Articles 19.1, 21.3, and 21.3(b) of the DSU in not putting into effect measures taken to comply
between 9 April and 23 April/31 August 2007.
44. For the European Communities, in rejecting its claim on the basis of judicial economy, the
Panel acted in a manner inconsistent with its obliga tions under Article 11 of the DSU. The fact that a
WTO Member did not act within a particular period of time following the expiry of the reasonable
period of time is an independent measure or, in th is case, omission subject to different claims that
must be examined separately from other claims concerning other measures taken to comply. The
European Communities argues that, in failing to rule on this omission, the Panel failed to examine a
matter that was part of its mandate, and "abused" 88 the concept of judicial economy, as the Panel
provided only a partial resolution to the matter at issue. The European Co mmunities considers that
measures that have expired before the request for panel establishment are measures at issue within the
meaning of Article 6.2 of the DSU and, thus, form part of the terms of reference of a compliance
panel. According to the European Communities, it was not for the Panel to examine the practical
implications of the requested finding as to the ob ligations of the United St ates, because the European
Communities was entitled to obtain the findings it co nsidered necessary to reso lve the dispute. The
European Communities adds that Article 21.3 of the DSU implies that WTO Members have the
obligation to bring their WTO-inconsistent meas ures into conformity with their obligations
immediately after the adoption of the recommendations and rulings of the DSB, or, should a
reasonable period be agreed between the parties to the dispute, at the end of such a period at the latest.
6. The Arithmetical Error in the Section 129 Determination in Case 11

45. The European Communities submits that the Pa nel erred in finding that the European
Communities' claims in respect of an alleged arith metical error in the Section 129 determination in

Case 11 were not properly before it. The Eur opean Communities requests the Appellate Body to
reverse this finding, complete the analysis, and fi nd that the United States, by failing to correct the
arithmetical error in the calculation of the margin of dumping in the Section 129 determination in
Case 11, failed to comply with the DSB's recommenda tions and rulings, and acted inconsistently with
Articles 2, 5.8, 6.8, 9.3, 11.1, and 11.2 of the Anti-Dumping Agreement and Article VI:2 of the GATT
1994, for the following reasons.
46. Initially, the European Communities contends that the arithmetical error was an " integral
part"
89 of the measure taken to comply by the United St ates, and thus falls within the scope of these
compliance proceedings. The European Communiti es notes that the United States consciously took
the decision to calculate TKAST's90 dumping margin without zeroing on the basis of the same data set
as the one used in the original investigation, whic h contained the arithmetical error. Moreover, "the
USDOC extended the duration of the Section 129 proceeding by four additional months precisely
because it was considering the allegations made by th e interested parties, including the clerical error
in question."91 Thus, for the European Communities, the fact that the United States explicitly dealt
with the issue of the clerical error and deci ded to keep it for the dumping calculation in the
Section 129 determination concerned, implied that the error became part of the "measure taken to
comply" in the present case. In this regard, th e European Communities argu es that the arithmetical
error "cannot be separated" from the re-determination of dumping without zeroing made by the
United States in the Section 129 determination concer ned, considering that "both the data set and the
comparison methodology operate together and are the bases underlying a single inquiry: the dumping
calculation."92 The European Communities recalls that, in US – Oil Country Tubular Goods Sunset
Reviews (Article 21.5 – Argentina) and in EC – Bed Linen (Article 21.5 – India) , the Appellate Body
considered relevant the fact that the particular aspect in question operated together with the other
aspects of the measure taken to comply with respect to the same subject matter to determine whether
they constituted an integral part of the measure taken to comply.93
47. Alternatively, the European Co mmunities claims that the arithmetical error fell within the
scope of this compliance proceeding because of its particularly close relationship to the
re-determination of dumping carried out in the Sect ion 129 determination concerned. The European

89European Communities' appellant's submission, para. 248. (original emphasis)
90ThyssenKrupp Acciai Speciali Terni S.p.A. and ThyssenKrupp AST USA (a manufacturer/exporter
of stainless steel sheet and strip in coils from Italy).
91European Communities' appellant's submission, para. 249. (original emphasis)
92European Communities' appellant's submission, para. 253. (original emphasis)
93European Communities' appellant's submission, para. 255 (referring to Appellate Body Report, US –
Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina) , paras. 146 and 148, in turn referring to
Appellate Body Report, EC – Bed Linen (Article 21.5 – India), para. 86).

Communities maintains that, should the Appellate Body find that the arithmetical error was an
integral part of the "measure taken to comply ", the European Communities considers that the
Appellate Body would not need to examine this alternative claim.
48. The European Communities contends that the arithmetical error contained in the data set has a
particularly close relationship to the re-determi nation of dumping without zeroing, in view of its
nature, effects, and timing. The exclusion of such an error from the scope of this compliance
proceeding would lead to circumvention by the Unit ed States of its obligations in the light of the
covered agreements. According to the European Communities, both the arithmetical error and the
zeroing methodology affect the calculation of the dumping margin, and it is not possible to isolate one
of these elements from the rest of the dumping marg in calculation in the Section 129 determination.
The European Communities notes that, in order to comply with the DSB's recommendations and
rulings, the United States recalculated the margin of dumping without zeroing; however, because of
the arithmetical error, a positive margin of dumping was obtained and the United States kept in place
a measure inconsistent with the Anti-Dumping Agreement that would otherwise have been terminated.
49. Furthermore, the European Communities claims that the Panel erred in finding that the
European Communities was precluded from raising cl aims against the arithmetical error in these
compliance proceedings. The Eur opean Communities considers that a Member is not prevented from
raising new claims before a compliance panel ag ainst unchanged aspects of the original measure,
provided that such claims were not examined by the original panel. The European Communities
contends that allowing a Member to raise such new claims "does not provide the complaining
Member with a second ch ance to make its case" 94, because the finality of the report adopted by the
DSB in the original proceedings "was limited to the particular claims on zeroing and the specific
aspects of the measure dealing with the comparison methodology"95 and did not relate to the particular
arithmetical error in question. The European Co mmunities also dismisses concerns raised by the
Panel in relation to "the principles of fundamental fairness and due process" 96, because in the present
case the United States had sufficient notice of the European Communities' claim concerning the
arithmetical error, given that it was mentioned in the European Communities' compliance panel
request. Moreover, the United States could not assume that the aspect of the measure taken to comply
at issue was WTO-consistent, as there was no such finding in the original proceedings.

95European Communities' appellant's submission, para. 276. (original emphasis)
96European Communities' appellant's submission, para. 277. (italics removed)

50. For the European Communities, the Panel mis understood the Appellate Body's statement in
US – Upland Cotton (Article 21.5 – Brazil) that "[a] complaining Member ordinarily would not be
allowed to raise claims in an Article 21.5 proceed ing that it could have pu rsued in the original
proceedings, but did not."
97 According to the European Communitie s, this statement by the Appellate
Body should be read in the light of the statements made in the preceding paragraphs, which led to the
conclusion that, if one issue was not resolved on th e merits in the original proceedings, a new claim
against the same aspect of the measure could be brought in compliance proceedings.
51. The European Communities adds that allowing a Member to raise new claims against an
unchanged aspect of an original measure in the meas ure taken to comply would also be consistent
with the purpose of Article 21.5 of the DSU. In this respect, the European Communities notes that an
implementing measure should rectify the inconsis tencies found in the DSB's recommendations and
rulings, and not be otherwise inc onsistent with the covered agre ements. Preventing new claims
against unchanged aspects of original measures that are WTO-inconsistent would provide Members
with a mechanism allowing them to circumvent thei r obligations resulting from a particular dispute.
The European Communities further notes that the Panel's finding would require the European
Communities to bring the claim against the arithme tical error in the same measure (that is, the
Section 129 determination concerned) in separate di spute settlement proceedings, with the result that
the United States would benefit from an additi onal period of time to comply with its WTO
obligations. The European Communities suggests furthe r that the Panel's findings on this issue raise
significant systemic concerns, because they imply th at complaining Members would have to raise all
possible legal claims against a measure at the very beginning of dispute settlement proceedings, even
consequential claims, rather than choosing the main claims for a finding of WTO-inconsistency, as
the European Communities has done in the original proceedings in this case.
7. The "All Others" Rates Calculated in the Section 129 Determinations in
Cases 2, 4, and 5
52. The European Communities claims that the Pane l erred in finding that the United States did
not act inconsistently with Article 9.4 of the Anti-Dumping Agreement in the establishment of the

97European Communities' appellant's submission, para. 279 (quoting Appellate Body Report, US –
Upland Cotton (Article 21.5 – Brazil), para. 211). According to the European Communities, the Appellate Body
observed, in that case, that: (i) when a Member failed to make a prima facie case in the original proceeding, that
Member cannot bring the same claim against an element of the measure that remained unchanged since the
original proceedings in an Article 21 .5 proceeding; and (ii) when an as pect of a measure in the original
proceeding has been found to be WTO-consistent expressly, the same claim cannot be brought against an
unchanged aspect of that measure in an Article 21.5 proceeding; however, (iii) when a claim has not been
resolved in the original procedure (f or example, because the Appellate B ody could not complete the analysis—
or because of judicial economy), the same claim can be brought in an Article 21.5 proceeding. (Ibid., para. 281)

"all others" rates in the Section 12 9 determinations in Cases 2, 4, and 5 and in failing to examine its
claims under Article 6.8 and Annex II of the Anti-Dumping Agreement. The European Communities
requests the Appellate Body to reverse these findings, complete the analysis, and find that the United
States acted inconsistently with Articles 9.4 and 6.8 and Annex II of the Anti-Dumping Agreement in
calculating the "all others" rates in the Section 129 determinations in Cases 2, 4, and 5, for the
following reasons.
53. First, the European Communities ar gues that the Panel erred in finding that the existence of a
lacuna in Article 9.4 of the Anti-Dumping Agreement precludes a finding that Article 9.4 prohibits the
use of zero, de minimis, or "facts available" dumping margins in the calculation of the "all others" rate
in cases where all the margins of dumping for selected exporters and producers fall into one of these
categories. In the European Communities' view, the Panel misinterpreted the Appellate Body's
finding in US – Hot-Rolled Steel , where the Appellate Body did not address the lacuna in Article 9.4
but, rather, found that the United States acted inc onsistently with Article 9.4 by using a methodology
that included margins based on facts available in the calculation of the "all others" rate. The European
Communities submits that the facts in US – Hot-Rolled Steel are "identical"98 to those in the present
dispute, because all the margins of dumping calculate d for the selected exporters in that dispute were
partially based on facts available. Yet, the fact that the USDOC did not have other margins of
dumping from investigated exporters and producers fro m which to derive the ceiling provided for in
Article 9.4, did not preclude the Appellate Body fr om finding in that case that the United States acted
inconsistently with that provision by basing the "all others" rate on a methodology that included
margins established using facts available. 99 Although the Appellate Body did recognize the existence
of a lacuna in Article 9.4, it confirmed that "[ t]his appeal does not raise the issue of how that lacuna
might be overcome on the basis of the present text of the Anti-Dumping Agreement"100 and, therefore,
did not address that question. According to th e European Communities, the Panel should have
proceeded similarly in this dispute.
54. Secondly, the European Communities argues that, correctly interpreted, Article 9.4 of the
Anti-Dumping Agreement requires investigating authorities to disregard margins of dumping based on
facts available when calculating the "all others" rate , even in cases where a ll margins established for
the selected exporters/producers fall under the prohibition contained in that provision. This is because
the purpose of Article 9.4 is to prevent exporters w ho were not asked to cooperate in the investigation

98European Communities' appellant's submission, paras. 316 and 324.
99European Communities' appellant's submission, para. 319 (referring to Appellate Body Report, US –
Hot-Rolled Steel, para. 129).
100European Communities' appellant's submission, paras. 319 and 321 (quoting Appellate Body Report,

from being prejudiced by gaps or shortcomings in the information supplie d by the investigated
exporters.
101 Consequently, any methodology that includes margins based on facts available in the
calculation of the "all others" rate, alone or in comb ination with other margins, must be inconsistent
with Article 9.4.
55. In addition, the Panel's statement that the European Communities' interpretation would be
"internally inconsistent" ignores the context of Artic le 9.4. According to the European Communities,
Article 9.4 provides an exception to the general rule in Article 6.10 that a margin of dumping must be
established for each individual exporter. The inves tigating authority's discretion not to investigate
individually all exporters is lim ited by the ceiling provided for in Article 9.4, which mandates the
exclusion of zero, de minimis, and "facts available" margins from the calculation of the "all others"
rate. By contrast, the Panel's interpretation of Article 9.4 implies that there is no obligation
whatsoever when all margins for the selected exporters are either zero, de minimis, or based on facts
available. In the European Communities' view, th is interpretation could lead to abuses, as the
"all others" rate would be exclusively a function of the exporters that the investigating authority
chooses to investigate.
56. Thirdly, the European Communities submits th at "the fact that Article 9.4 of the Anti-
Dumping Agreement refers to a 'ceiling' and does not provide any specific methodology for the
calculation of a margin of dumping to be applied to non-investigated [exporters or producers] does not
exclude the possibility that the requirement to excl ude certain types of margins when calculating 'all
others' rates was intended to be included by implication." 102 In support of this contention, the
European Communities refers to the negotiating history of Article 9.4, which suggests that the drafters
intended to include the prohibition to use certain types of margins in the provision, at least by
implication.
103
57. Turning to the claims it raised under Article 6.8 and Annex II of the Anti-Dumping
Agreement, the European Communities submits that the Panel erred in rejecting these claims on the
basis that they were dependent on the European Communities' claim under Article 9.4. The European
Communities considers that Article 6.8 and Annex II provide an independent basis for a finding of

101European Communities' appellant's submission, para. 326 (referring to Appellate Body Report, US –
Hot-Rolled Steel, para. 123).
102European Communities' appellant's submission, para. 333. (original emphasis)
103The European Communities refers to the negotiating history of Article 9.4 of the Anti-Dumping
Agreement, and also draws an analogy between this case and US – Corrosion-Resistant Steel Sunset Review ,
where the Appellate Body found that the fact that Article 11.3 of the Anti-Dumping Agreement does not require
the use of any specific methodology in a sunset revi ew did not imply that investigating authorities could
disregard the disciplines of Article 2.4 of that Agreement. (European Communities' appellant's submission,
paras. 334 and 335)

inconsistency where the "all others" rate is not inconsistent with Article 9.4. According to the
European Communities, the Panel's finding is "contradictory" 104 because, on the one hand, the Panel
concluded that Article 9.4 contai ns no prohibition and therefore does not provide a legal basis for a
finding of inconsistency and, on the other hand, it concluded that a particular methodology is not
inconsistent with that provision. In the European Communities' view, if Article 9.4 does not regulate
an issue, it cannot be concluded that a particular situation is consistent with that provision.
58. Moreover, the European Communities submits that Article 6.8 and Annex II of the Anti-
Dumping Agreement provide an independent basis for a finding of inconsistency where the
establishment of the "all others" rate falls under the alleged lacuna in Article 9.4. The European
Communities submits that Article 6.8 and Annex II ar e the provisions that regulate the establishment
of the "all others" rate in these circumstances because these provisions limit the application of
margins of dumping based on facts available, wh ich are "less favourable" to the "exceptional
circumstance" where the interested party did not "cooperate". 105 Exporters or producers falling under
the "all others" category are "known" exporters or producers that "decided to 'cooperate'" 106, but from
which no further information was requested. Th erefore, in the Europ ean Communities' view,
Article 6.8 and Annex II prohibit the use of marg ins of dumping based on facts available in the
calculation of the "all others" rate.
8. The European Communities' Request for a Suggestion
59. The European Communities requests the Appellate Body to issue a suggestion to the United
States, pursuant to Article 19.1 of the DSU, on how to implement the DSB's recommendations and
rulings. The European Communities requests the A ppellate Body to suggest to the United States,
including the United States' administrative authoriti es and independent judicial authorities, "that they
forthwith take all necessary steps of a general or par ticular character to ensure the conformity of all
the measures at issue and all the measures taken to comply with the Anti-Dumping Agreement , the
GATT 1994, the DSU and the rulings and recommendations of the DSB in the original proceeding,
with full effect not later than the end of the reas onable period of time, such that any and all actions,
including administrative reviews, assessment instructions and final liquidations after that date are not
based on zeroing, and are revised as necessary to achieve that result".107

B. Arguments of the United States – Appellee
1. Panel Composition

60. The United States argues that the Panel correctly rejected the European Communities' claim
that it was improperly composed, in violation of Ar ticles 8.3 and 21.5 of the DSU. The United States
observes that the European Communities' appeal does not "fundamentally pertain" 108 to the
substantive dispute between the European Communiti es and the United States. Rather, it appears to
be grounded on "a concern about the func tioning of the WTO as an institution". 109 Nonetheless, the
concern raised by the European Communities does not necessarily bri ng that matter within the scope
of review by a panel or the Appellate Body. In this regard, the United States observes that, under
Article 11 of the DSU, "the function of panels is to assist the DSB in discharging its responsibilities
under the [DSU] and the covered agreements." Ho wever, during the panel composition process, the
European Communities had recourse to the Director-General of the WTO, rather than to the DSB.
61. In addition, the United States argues that th e European Communities' claim on the panel
composition did not fall within the Panel's jurisdiction. For the United States, it is difficult to see how
the composition of the Panel could fall within its te rms of reference, as panel composition invariably
follows panel establishment. This is particularly the case in proceedings under Article 21.5 of the
DSU, which are limited to resolving a "disagreem ent as to the existence or consistency with the
covered agreements of measures taken to comply with the recommendations and rulings" of the DSB.
62. Moreover, according to the United States, an im properly composed panel would not have the
authority to make findings on the merits of the European Communities' claims, including on claims
related to its own composition; it would have no authority to issue a report and there would be no
basis for an appeal. In any event, the United St ates argues that the European Communities failed to
demonstrate any violation of the DSU. The Unite d States observes that two of the three original
panelists were not availa ble, and therefore recourse to "the original panel" was not "possible" within
the meaning of Article 21.5 of the DSU. 110 Article 21.5 does not discipline the process of panel
composition when recourse to the original panel is not possible, and therefore the European
Communities requested—and the United States agreed—tha t the Director-General compose the panel.
63. With respect to the European Communities' waiver of its alleged DSU rights and its
conditional withdrawal of the appeal in the event of success, the United States asserts that it also has

110United States' appellee's submission, para. 157. (original emphasis)

due process rights in the composition of the panel, and that the European Communities is not in any
position to waive the rights of another WTO Member. The United States further disputes the
European Communities' allegation that the f acts underlying the panel composition process are
"uncontested".111 For the United States, the only truly uncontest ed fact is that the parties turned to the
Director-General to appoint the panelists. Th e United States emphasizes that the European
Communities "did not have the permission" 112 to disclose confidential communications about this
issue, and that the Panel took account of the United States' objections in this regard by deleting all
references to the alleged statements by the United States from the Panel's final report.
2. The Panel's Terms of Reference
64. The United States argues that the Panel was correct in making the preliminary finding that the
subsequent reviews that were completed before the adoption of the DSB's recommendations and
rulings did not fall within the Panel's terms of re ference under Article 21.5 of the DSU. The United
States requests the Appellate Body to uphold this finding, because these subsequent reviews were
not (i) "amendments" to the original investigations and administrative reviews at issue in the original
proceedings, or (ii) "omissions" or "deficiencies" in the United States' implementation of the DSB's
recommendations and rulings; nor were they ( iii) sufficiently connected to these compliance
proceedings.
65. First, the United States contends that the Pane l properly rejected the European Communities'
argument that the subsequent reviews were covere d by the DSB's recommendations and rulings as
"amendments" to the original measures at issue. The Panel correctly concluded that it would not be
"tenable" to describe assessment and other types of reviews as "merely clarifying" the terms of the
original investigations and administrative re views at issue in the original proceedings. 113 In
subsequent administrative reviews, the USDOC ex amines different imports, over a different time
period, than it did in the original investigation or in a prior administrative review. Similarly, sunset
reviews are distinct from original investigations and administrative reviews because they determine
whether the expiration of an anti-dumping duty would likely lead to the continuation or recurrence of
dumping. Therefore, the Panel correctly concl uded that subsequent determinations are not
amendments to, or modifications of, the original i nvestigations and administrative reviews at issue in
the original proceedings.

111United States' appellee's submission, para. 159 (quoting European Communities' appellant's
112United States' appellee's submission, para. 159 (q uoting United States' second written submission to
the Panel, para. 7 and footnote 5 thereto).

66. The United States underscores that the Panel w as correct in concluding that reference to
"amendments" in the European Communities' original panel request referred to "amendment[s] of the
specific measure listed to correct for ministerial errors"
114 and does not refer to any subsequent
review. The United States notes that the Europ ean Communities' original panel request treats
subsequent reviews as separate measures, rather th an amendments to the original measures. The
United States adds that the USDOC provides inter ested parties the opportunity to comment on alleged
ministerial errors in its determinations, and corr ects any such errors by publishing an "amended"
determination. Thus, because references to "ame ndments" in the European Communities' original
panel request have a very precise meaning in the context of this dispute, the recommendations and
rulings of the DSB could not have broadened the scope of the measures covered by those rulings.
67. Secondly, the United States submits that th e Panel correctly rejected the European
Communities' claim that the subsequent reviews fell within the Panel's terms of reference as
"omissions" or "deficiencies" in the United States' implementation of the DSB's recommendations and
rulings. The Panel was correct in noting that th e European Communities had not substantiated its
claim before the Panel, as the European Communiti es indicated in response to the Panel's questioning
that the subsequent reviews constituted "evide nce of the US omissions and deficiencies" 115 in
implementing the DSB's recommendations and rulings, rather than omissions and deficiencies which
themselves fell within the Panel's terms of referen ce. Having found that none of the subsequent
reviews constituted "amendments" to the original me asures at issue, the Panel was also correct in
concluding that none of the subsequent reviews "implicated"
116 the question of whether a measure
taken to comply "existed" within the meaning of Article 21.5 of the DSU, and properly decided to
move on to consider the question of whether the subsequent reviews themselves should be regarded as
"measures taken to comply". In any event, the United States undersco res that the Panel examined the
alleged "substantive 'omissions' or 'deficiencies'"117 in its substantive analysis.
68. The United States argues further that the Europ ean Communities is incorrect in arguing that
the Panel was bound by the "sequencing order of the legal claims" 118 raised by the European
Communities. According to the United States, the precedents cited by the European Communities do

115United States' appellee's submission, para. 33 (quo ting European Communities' responses to Panel
Questions, para. 33). (emphasis omitted)
118United States' appellee's submission, para. 36 (quoting European Communities' appellant's
submission, para. 79).

not support this proposition.119 The United States submits that, in any event, the Panel did address the
European Communities' claims in the order proposed . The United States further suggests that the
European Communities failed to substantiate its claim that the Panel failed to comply with its mandate
under Article 11 of the DSU in structuring its analysis.
69. Thirdly, the United States submits that the Panel correctly excluded from its terms of
reference the subsequent reviews that were concluded before the adoption of the DSB's
recommendations and rulings as not havi ng a sufficient nexus in terms of timing with these
compliance proceedings. Initially, the United States underscores that reviews pre-dating the DSB's
recommendations and rulings are not "measures taken to comply" with such rulings, but are rather
reviews undertaken and completed at the request of interested parties or as required by domestic law
pursuant to the provisions of the Anti-Dumping Agreement.
120 The United States acknowledges that
compliance can be achieved through events occurring prior to the adoption of the DSB's
recommendations and rulings, for example, where a challenged measure is withdrawn prior to
adoption. However, in this dispute, the United St ates is not relying on any of the measures identified
by the European Communities to assert compliance. Additionally, even though measures other than
those declared to be "taken to comply" may also be examined in an Article 21.5 proceeding where
such measures "potentially circumvent implementa tion or undermine measures officially taken to
comply"121, the United States observes that the European Communities failed to demonstrate that any
of the reviews completed prior to the adoption of the DSB's recommendations and rulings had the
effect of "circumventing" or "undermining" the co mpliance declared to have been achieved by the
United States. In this regard, the Panel appropria tely found that the subsequent reviews were so
remote in time that they could not have had the necessary effects to bring them within the scope of
these compliance proceedings. The United States also notes that, to the extent that the European
Communities is challenging "positive actions" 122 taken by the United States after the end of the
reasonable period of time, the European Commun ities has failed to demonstrate any connection
between the alleged "omissions" in the form of li quidation of duties and the relevant subsequent
review that would sufficiently demonstrate that those reviews circumvented or undermined
compliance.

119United States' appellee's submission, para. 36. The United States makes reference, in footnote 46, to
Appellate Body Report, US – Shrimp, para. 120; and Panel Report, EC – Sardines, paras. 7.14-7.19.
122United States' appellee's submission, para. 44 (r eferring to European Communities' appellant's
submission, para. 96).

70. Finally, in the event that the Appellate Body finds that the Panel wrongly excluded any
reviews from the scope of these proceedings, the Un ited States contends that the Appellate Body
should reject the European Communities' request to complete the analysis and find those reviews
inconsistent with the relevant provisions of the DSU, the Anti-Dumping Agreement , and the
GATT 1994. According to the United States, th e European Communities failed to provide any
argumentation relating to these allege d inconsistencies, and failed to point out the factual findings by
the Panel or undisputed facts in the Panel record that would enable the Appellate Body to do so.
3. The Scope of the United States' Compliance Obligations

71. The United States argues that the Panel correctly rejected the European Communities' claims
that the United States failed to comply with the DSB's recommendations and rulings, and acted
inconsistently with Articles 9.3 and 11.3 of the Anti-Dumping Agreement and Article VI:2 of the
GATT 1994, by taking "actions or omissions" based on zeroing after the end of the reasonable period
of time.
72. The United States submits that an anti-dumping duty is a border measure and that, in disputes
involving border measures, compliance is achieved when the measure is withdrawn or brought into
compliance with respect to entries of goods after the end of the reasonable period of time.
123 The
United States contends that it brought itself into compliance with the recommendations and rulings of
the DSB by withdrawing the border measures, or by implementing new WTO-consistent border
measures, to future entries subject to the 31 measures that were the subject of the DSB's
recommendations and rulings in the original proceed ings. Accordingly, the United States rejects the
European Communities' view that the DSB's reco mmendations and rulings encompass the liquidation
of entries after the end of the reasonable period of time, when the entries were made before or during
the reasonable period of time, if for any reason thos e entries remained unliquidated at the end of the
reasonable period of time.
73. For the United States, the fact that Article 21.3 of the DSU may provide a Member with a
reasonable period of time to bring itself into compliance with DSB recommendations and rulings does
not imply that the Member is not subject to the underlying obligation during that period. The United
States refers to a previous statement of the Appella te Body that "remedies in WTO law are generally
understood to be prospective in nature." 124 The United States agrees that Article 28 of the Vienna
Convention is inapplicable to the present dispute because DSB recommendations and rulings do not

123United States' appellee's submission, paras. 62 and 72.
124United States' appellee's submission, para. 66 (quoting Appellate Body Report, US – Upland Cotton

create new obligations. The United States considers that the reasonable period of time allows a
Member sufficient time to bring its measure in to compliance with its obligations without being
required to provide compensation or being subject to the suspension of concessions. The United
States reasons that recommendations and rulings by the DSB do not create an obligation to comply
with the covered agreements, as that obligation alread y exists in the covered agreements themselves.
Rather, it is the right to a remedy against a br each of the covered agreements (in the sense of
compensation or suspension described in Article 22. 1 of the DSU) that arises only after a Member
fails to comply with the DSB's recommendations a nd rulings within the reasonable period of time.
Thus, according to the United States, a Member is not "permitted"
125 to breach the covered
agreements during the reasonable period of time. In stead, that Member is merely not subject to the
remedies contemplated in Article 22 of the DSU for such breaches.
74. The United States argues that, in disputes involvi ng border measures, it has been consistently
recognized that compliance is achieved when the measure is withdrawn or brought into compliance
with the DSB's recommendations and rulings with r espect to entries of goods after the end of the
reasonable period of time. According to the United States, this is the approach that the European
Communities took to implementation of the recommendations and rulings of the DSB in the EC –
Chicken Cuts dispute, as the European Communities asserted compliance in that dispute by removing
the border measure for entries taking place after the end of the reasonable period of time. 126 A similar
conclusion was reached by the compliance panel in EC – Bananas III (Article 21.5 – Ecuador) , where
the panel found that, in order to comply with th e DSB's recommendations and rulings, the European
Communities did not have to correct its past breaches of the General Agreement on Trade in Services
with regard to licenses that were allocated before the end of the reasonable period of time. Rather, the
European Communities had to ensure that licenses al located after the end of the reasonable period of
time were allocated in a WTO-consistent way. 127 According to the United States, the practice of the
DSB and individual WTO Members is that complia nce with DSB recommendations and rulings with
respect to WTO-inconsistent border measures is a ccomplished by withdrawing the border measure, or
by applying a WTO-consistent border measure with respect to future entries of goods. 128 According
to the United States, nothing in the Anti-Dumping Agreement suggests that a different rule would
apply when the border measure in question is an anti-dumping duty. Moreover, this practice suggests

126United States' appellee's submission, para. 73 (referring to Appellate Body Report, EC – Chicken
Cuts, para. 347(c)).
127United States' appellee's submission, para. 74 (referring to Panel Report, EC – Bananas III
(Article 21.5 – Ecuador), para. 6.105).
128The United States submits that previous panel reports do not suggest otherwise. (United States'
appellee's submission, paras. 75-77 (referring to Panel Report, EC – Commercial Vessels , para. 8.4; and Panel
Report, India – Autos, paras. 7.204 and 7.253))

that actions to enforce or collect duties applied to imports occurring prior to the end of the reasonable
period of time do not undermine compliance achieved by the elimination of the border measure. In
the United States' view, withdrawal of WTO-incons istent border measures with respect to future
entries constitutes compliance with the DSB's re commendations and rulings, even if domestic
procedures with respect to final collection of duties on entries prior to the reasonable period of time
are not complete. The United States considers that the European Communities' approach to
implementation raises serious systemic concerns, be cause it would allow private parties to make use
of domestic procedures to delay liquidation of duti es, thereby obtaining retroactive application of
DSB recommendations and rulings to entries made prior to the end of the reasonable period of time.
75. According to the United States, the European Communities fails to recognize that the DSB's
recommendations and rulings, as applied to the 31 individual measures, are limited to the measures
that were found to be inconsistent in the original proceedings. Th e United States recalls that, in the
original proceedings, the European Communities sought—but did not obtain—a finding that zeroing
in administrative reviews was inconsistent, as such, with the covered agreements. The United States
emphasizes further that the European Communitie s presupposes the existence of the "unlawful
zeroing methodology"
129, when the Appellate Body in the original proceedings was unable to
complete the analysis as to whether such zeroing methodology in administrative reviews was
inconsistent, as such, with the covered agreements.
76. The United States argues further that its im plementation obligations do not extend to
administrative reviews completed after the end of the reasonable period of time, but cover entries
made prior to that date. For the United States, the Panel's approach to implementation disadvantages
Members using retrospective duty systems, because such Members would need to bring past entries
into compliance with the DSB's recommendations and rulings, whereas Members using prospective
duty assessment systems would not. Furthermore, the United States considers that the requirement to
bring into conformity with the DSB's recommenda tions and rulings any duty assessment proceeding
(in a retrospective system) or dut y refund proceeding (in a prospective system) for entries made prior
to the end of the reasonable period of time would imply a retroactive remedy.
77. Moreover, the United States contends that the Pa nel correctly held that the United States did
not fail to comply with the DSB's recommendations and rulings by finally liquidating duties on entries
made before the end of the reasonable period of time. The United States argues that nothing in the
Anti-Dumping Agreement or the DSU suggests that the status of past entries as "liquidated" or

129United States' appellee's submission, para. 83 (quoting European Communities' appellant's
submission, para. 148).

"unliquidated" is relevant to the scope of a Memb er's compliance obligations. For the United States,
the question of whether a Member has come into compliance with DSB recommendations and rulings
with respect to duties it imposes on a particular merchandise should be evaluated by examining the
Member's treatment of that merchandise on the date of entry, because that date is when liability
attaches to the imports in question.130 In this respect, the United States underscores the Panel's finding
that, if implementation obligations do not attach to final decisions made prior to the end of the
reasonable period of time, those obligations shoul d not further depend on when the actual collection
takes place. In addition, the Panel correctly c oncluded that implementation obligations should not
depend on the fact that the mere act of collecting du ties by the authorities is delayed due to actions of
private parties for reasons wholly unrelated to the dispute at hand. The United States adds that DSB
recommendations and rulings do not serve as a basis for the reimbursement of duties 131, and reiterates
that, to ensure a "level playing field" 132 among Members with retrospective systems, prospective
ad valorem systems, and prospective normal value system s, prospective implementation requires that
duties levied on imports occurring on or after the date of implementation be ma de consistently with
the DSB's recommendations and rulings.
78. The United States also suggests that the Panel correctly declined to make findings with
respect to 11 of the 16 administrative reviews at issue in the original proceedings for which
anti-dumping duty orders remain in place. The Un ited States argues that the European Communities
failed to identify any evidence or any particular measure in which a margin of dumping was
calculated using zeroing and which was being used by the United States as the basis for a cash deposit
rate for any anti-dumping duty order at the time of Panel establishment. However, the United States
objects to the Panel's inference that, if the United States were applying cash deposit rates calculated in
subsequent administrative reviews using zeroing, this would constitute a failure to comply with the
DSB's recommendations and rulings in this dispute. 133 The United States characterizes this statement
as purely "hypothetical" 134, given the European Communities' failu re to adduce any evidence in this
regard. Accordingly, the United States considers that the Panel's statement is "without legal effect".135

130United States' appellee's submission, paras. 92 and 95 (referring to Panel Reports, China – Auto
Parts, para. 7.184; Appellate Body Report, US – Line Pipe , para. 129; and Panel Report, US – Certain EC
Products, para. 6.106).
131The United States adds that even the European Co mmunities' municipal law recognizes the principle
that DSB recommendations and rulings do not serve as a basis for the reimbursement of duties. (United States'
appellee's submission, para. 97 (referring to Case C-351-04, Ikea Wholesale Ltd. v. Commissioners of Customs
and Excise , Judgment of the Court of Justice of 27 September 2007, Second Chamber [2007] ECR I-7723
(Panel Exhibit US-34)))

Nevertheless, should the A ppellate Body reverse the Panel's finding that the European Communities
failed to substantiate its claim in relation to cash deposit rates, the United States contends that the
recommendations and rulings of the DSB do not cover cash deposit rates, because a cash deposit is
not an anti-dumping duty but, rather, a security.
79. The United States also posits that the Panel corr ectly declined to make separate findings with
respect to the European Communities' "domino th eory" arguments, in particular, the European
Communities' assertion that the United States has not withdrawn the original measures at issue when
it takes any "positive act" after the end of the reasonable period of time on the basis of those
measures.
136 For the United States, the Panel acted corr ectly in refusing the European Communities'
request to issue an advisory opinion as to what types of acts, in gene ral, the United States may or may
not take in order to comply with the DSB's recommendations and rulings. The United States explains
that a panel acting under Article 21.5 of the DSU is not called upon to opine generally about the
recommendations and rulings of the DSB independently of the identification of specific instances in
which measures (including omissions) are relevant to the question of the existence or consistency of
measures taken to comply.
80. Finally, the United States argues that the Appellate Body should reject the European
Communities' request to complete the analysis w ith respect to a number of claims and measures,
including those relating to assessment instructions or liquidation after the end of the reasonable period
of time, because the European Communities failed to identify the factual findings by the Panel or
undisputed facts in the Panel record that would enable the Appellate Body to do so.
4. The Subsequent Sunset Reviews
81. The United States requests the Appellate Body to reject the European Communities' claim
that all subsequent sunset reviews listed in its panel request fell within the Panel's terms of reference.
The United States submits that none of the subseque nt sunset reviews—neither those that the Panel
found to be within its terms of reference, nor those excluded by the Panel from its terms of
reference—are in fact within the scope of these compliance proceedings. The United States argues
that the DSB's recommendations and rulings in the or iginal proceedings were limited to 15 original
investigations and 16 administrative reviews, and there were no recommendations and rulings
regarding determinations made in sunset reviews; therefore, there was no question as to the existence
of measures taken to comply with respect to sunset reviews.

136United States' appellee's submission, para. 111 (re ferring to European Communities' appellant's
submission, paras. 198-202).

82. The United States also contends that the sunset reviews "have no sufficient 'close connection'
or 'nexus' to either the measures at issue in the original dispute or to the DSB's recommendations and
rulings that would bring those determinations within the jurisdiction of the compliance Panel."137 The
United States points out that the analysis in sunset reviews is different from the analysis in original
investigations and administrative reviews, because sunset reviews determine whether the expiration of
an anti-dumping duty would be likely to lead to the continuation or recurrence of dumping and injury,
not duty existence or liability. The United States also argues that sunset reviews are required by
Article 11.3 of the Anti-Dumping Agreement ; they are not made in view of the DSB's
recommendations and rulings. Finally, the United St ates claims that 11 of the 16 sunset reviews
challenged by the European Communities cannot possi bly be regarded as closely connected to the
determinations originally challenged, or to the DSB's recommendations and rulings, because they
were completed prior to the adoption of the DSB's recommendations and rulings.
83. Regarding those sunset reviews that the Panel f ound to be within its terms of reference, the
United States requests the Appellate Body to uphold the Panel's finding that the European
Communities failed to demonstrate that the USDO C determinations it challenged had caused the
continuation of the orders at the time the Panel was established. The United States argues that, "[a]s a
matter of logic, measures that have not been take n at the time of panel establishment cannot form the
basis of a claim of inconsistency."
138 The United States notes that sunset reviews under its domestic
laws have several components, which include the final likelihood-of-dumping determination by the
USDOC and the determination by the USITC of whether the revocation of the anti-dumping duty
order would likely lead to a continuation or recurre nce of material injury. The United States points
out that sunset reviews are not based solely on the determination by the USDOC, and argues that a
determination by the USDOC of likelihood of dumping alone is insufficient to find a violation. The
United States further contends that this is illustrate d by the fact that, for five of the orders for which
the Panel found a sunset review to fall within its terms of reference, four were ultimately revoked.
84. The United States also contends that, if an initial sunset review results in the revocation of the
order, such revocation is effective on the fifth-year anniversary date of the anti-dumping duty order,
so that any security in the form of cash deposits that are provided for entries on or after that date,
pending the sunset review, is refunded with interest if the sunset review results in revocation.

85. Finally, the United States contends that the European Communities failed to demonstrate any
interest in pursuing this claim in respect of Cases 2, 3, 4, and 5, considering that, following the sunset
reviews in these Cases, the anti-dumping duty orders were revoked.
5. The Non-Existence of Measures between 9 April and 23 April/31 August

2007
86. According to the United States, the Panel co rrectly rejected the European Communities'
request for a finding that the United States has failed to comply with the recommendations and rulings
of the DSB in certain Cases by not taking any me asures between the end of the reasonable period of
time and the date on which the Sec tion 129 determinations entered in to force. The United States
considers that, as there was no disagreement within the meaning of Article 21.5 of the DSU that the
United States did not implement the Section 129 de terminations before 23 April/31 August 2007, the
European Communities' request was not within the scope of these compliance proceedings. The
United States further considers that the findings requested by the European Communities would have
been of little relevance to the effective resolution of the dispute. In any event, the United States
argues that the Panel was correct to find that the United States did not breach Article 21.3 of the DSU,
because Article 21.3 does not impose an obligation on the Member concerned; rather, Article 21.3
provides the implementing Member with the right to a reasonable period of time should immediate
compliance be impracticable. In any event, ther e being no "disagreement" within the meaning of
Article 21.5 as to the existence of the Section 129 de terminations at issue as of the date of Panel
establishment, there is no basis for the Appellate Body to disturb the Panel's stance on this issue.
6. The Alleged Arithmetical Error in the Section 129 Determination in Case 11
87. The United States considers that the Panel corr ectly found that the European Communities'
claim regarding the alleged arithmetical error in the Section 129 determination in Stainless Steel Sheet
and Strip in Coils from Italy (Case 11) was not properly before it. Contrary to the European
Communities' allegation, the USDOC never acknowledge d in either the original investigation or
during the Section 129 proceeding in this Case that an arithmetical error had been made. Moreover,
the United States does not acknowledge, as the Eur opean Communities claims it does, that the
dumping margin would have been negative if the USDOC had corrected the alleged calculation error
in the Section 129 proceeding, in addition to eliminating zeroing.
88. The United States argues further that the alleged error is "separable" 139 from the measure
taken to comply. In this respect, the United St ates submits that, in recalculating the margin of

dumping in the Section 129 determination, in accordance with the DSB's recommendations and
rulings, the USDOC changed only the language that caused the computer program to disregard non-
dumped comparisons. The USDOC then re-ran the program and calculated the revised margin of
dumping, while making no other changes to the comput er program. The United States is of the view
that, having recalculated the margin of dumping without zeroing, it complied with the DSB's
recommendations and rulings.
89. The United States also contends that the alleged arithmetical error is an aspect of the original
measure that is unchanged, and, even if it became an integral part of the measure taken to comply, as
the European Communities contends, the Panel prope rly found that the European Communities' claim
was not within the scope of these proceedings. The United States also agrees with the Panel that to
allow the claims by the European Communities against the alleged arithmetical error would "unfairly"
allow complaining Members a "second chance" to pursue claims they could have pursued in the
original proceeding, and would thus present "fundamental due process concerns".
140 According to the
United States, "[a] Member is provided a 'second chance'—that is, a second opportunity—if it is
permitted to raise a claim in a compliance proceeding that, as a legal and practical matter, it could
have raised before the original panel, but did not."141 The United States contends that, if the European
Communities was permitted to raise claims against the alleged arithmetical error in the Article 21.5
proceedings, it would be given another opportunity to raise a claim it should and could have raised in
the original proceedings. The United States also agrees with the Panel that the United States was
entitled to assume that this aspect of the original measures was WTO-consistent, "given the absence
of a finding of violation [in this respect] in the original [panel] report".142
90. The United States further suggests that to a llow the claims by the European Communities
against the alleged arithmetical error would be "at odds with the nature of Article 21.5 proceedings,
including the abbreviated time periods set out in Article 21.5" 143 and with the fact that no second
reasonable period of time is available if the Member concerned is found not to have complied with the
DSB's recommendations and rulings. In this r espect, the United States recalls that compliance
proceedings exist for a limited purpose, and not in or der to examine new claims that could have been
raised, but were not, in the initial dispute, as doi ng so could "raise unwarranted litigation difficulties
for the responding Member". 144 The United States believes that the Panel correctly declined to

140United States' appellee's submission, para. 134 (referring to Panel Report, paras. 8.240 and 8.241).
141United States' appellee's submission, para. 136. (original emphasis)
142United States' appellee's submission, para. 139 (referring to Panel Report, para. 8.240, in turn
referring to Panel Report, US – Countervailing Measures on Certain EC Products (Article 21.5 – EC) ,
paras. 7.75 and 7.76).

examine this claim, because the alleged error w as not a failure to implement DSB recommendations
and rulings, or a measure taken to comply; nor did it call into question or otherwise affect the
existence of a measure taken to comply.
91. Finally, the United States contends that the Panel's findings are supported by considerations
of orderly administration. The United States argue s that the alleged arithmetical error, like other
determinations by the USDOC, was subject to judicial review in the United States, and the responding
parties sought judicial review of precisely this alleged ministerial error and failed to succeed in
overturning the USDOC's determination. Acco rding to the United States, the Section 129
determination should not become an opportunity for one interested party to raise new claims of error
that would otherwise have been untimely, as this would undermine the orderly administration of
anti-dumping proceedings. In the view of the United States, these considerations support the
USDOC's decision not to reopen the Section 129 proceeding to consider new issues not relevant to the
implementation of the DSB's recommendations and rulings.
7. The "All Others" Rates Calculated in the Section 129 Determinations in
Cases 2, 4, and 5
92. The United States contends that the Panel was co rrect in finding that the United States did not
violate Articles 9.4 and 6.8 and Annex II of the Anti-Dumping Agreement in the calculation of the
"all others" rates in Cases 2, 4, and 5, and requests the Appellate Body to uphold this finding.
93. The United States first observes that the sunset reviews in Cases 2, 4, and 5 resulted in the
revocation of the underlying anti-dumping duty orders , effective 7 March 2007. As a result, the
United States refunded all cash deposits collected subsequent to 7 March 2007, including on imports
subject to the "all others" rates challenged by th e European Communities. Therefore, the United
States submits that the European Communities has no "articulable interest" in pursuing these claims
and is seeking no more than an "advisory opinion".145
94. The United States points out that Article 9.4 mere ly provides that the "all others" rate "shall
not exceed" the weighted average margin of dumping fo r the investigated exporters or producers, and
restricts the use of zero, de minimis, or margins based on facts availa ble in the calculation of that
ceiling. The United States disagrees with the Eu ropean Communities' assertion that Article 9.4
prohibits the use of margins based on facts available in the calculation of the "all others" rate in all
circumstances. Rather, the United States agrees with the Panel that this prohibition extends only to
the ceiling provided for in Article 9.4, and that Article 9.4 provides no methodological guidance on

the calculation of the "all others" rate. According to the United States, where all margins of dumping
are zero, de minimis, or based on facts available, a ceiling cannot be determined pursuant to
Article 9.4. Given that this situation is not addr essed in Article 9.4, the prohibition contained therein
does not apply. Nevertheless, a Member may still apply anti-dumping duties to the non-investigated
exporters or producers in an amount based on the r esults of investigated exporters or producers.
However, since Article 9.4 establishes no ceiling in this instance, there is no applicable prohibition.
95. The United States emphasizes that Article 9.4 is s ilent as to the situation that arises in this
dispute, and notes that, in US – Corrosion-Resistant Steel Sunset Review , the Appellate Body
"declined to read into the s ilence of the treaty text obligations that were not there". 146 Similarly, in
this case, the Appellate Body should not find an obligation where the WTO agreements do not
provide for one. In addition, the United States argu es that Article 9.4 establishes that the "all others"
rate cannot be arbitrary. The United States characterizes as "reasonable" 147 the methodology it
developed to establish the "all ot hers" rate in these Cases, because it was based on the results of
exporters and producers that had been investigated.
96. The United States also underscores that the Eu ropean Communities does not offer "plausible
alternatives"148 to the Panel's interpretation of Article 9.4. Although the European Communities
acknowledges that Article 9.4 does not discipline s ituations where all margins of dumping for the
investigated exporters or producers are zero, de minimis, or based on facts available, the European
Communities does not provide an answer to the qu estion of how the "all others" rate should be
calculated in those circumstances. The outcome of the European Communities' interpretation of
Article 9.4 is that Members do not have a basis fo r calculating the "all others" rate in cases where a
Member limits the investigation pursuant to Article 6.10, and all investigated exporters and producers
have zero, de minimis, or "facts available" margins of dumping.
8. The European Communities' Request for a Suggestion
97. Finally, the United States argues that the Appella te Body should reject entirely the European
Communities' request for a suggestion in this dispute. The United States considers that the suggestion
sought by the European Communities "merely restate[s] the findings or rulings that the EC is seeking
in this appeal", and therefore "would provide no 'useful guidance and assistance' in implementing such

146United States' appellee's submission, para. 149 (referring to Appellate Body Report, US – Corrosion-

rulings".
149 The United States also considers that the European Communities' request for a suggestion
would extend the Panel's findings to "an indeterminate set of future measures" 150, none of which
would fall within the Panel's terms of reference.
C. Claims of Error by the United States – Other Appellant
1. The Panel's Terms of Reference (Cases 1 and 6)
98. The United States argues that the Panel erred in finding that the 2004-2005 administrative
reviews in Certain Hot-Rolled Carbon Steel Fl at Products from the Netherlands (Case 1) and
Stainless Steel Wire Rod from Sweden (Case 6) fell within the Panel's terms of reference under
Article 21.5 of the DSU by virtue of their close nexus with the original measures at issue and the
DSB's recommendations and rulings. The United Stat es requests the Appellate Body to reverse this
finding and to declare without legal effect the Pane l's finding that the United States failed to comply
with the DSB's recommendations and rulings and act ed inconsistently with Article 9.3 of the Anti-
Dumping Agreement and Article VI:2 of the GATT 1994 in those two specific administrative reviews.
99. The United States distinguishes the fact s of this case from the facts in US – Softwood
Lumber IV (Article 21.5 – Canada), where the panel and Appellate Body found significant that (i) the
administrative review at issue resulted in a cash depo sit rate that superseded the revised cash deposit
rate established in the Section 12 9 determination and (ii) a particul ar aspect of the analysis in the
administrative review was made "in view of" 151 the DSB's recommendations and rulings in the
original proceedings in relation to that type of analysis. The United States emphasizes that, by
contrast, the DSB's recommendations and rulings w ith respect to Cases 1 and 6 in this dispute
concerned only the original investigations in t hose Cases, and that it has taken measures to comply
with those rulings by issuing Section 129 dete rminations in which the underlying anti-dumping duty
orders have been revoked.
100. Because the margins of dumping resulting from the recalculation in the Section 129
determinations in Cases 1 and 6 were zero or de minimis, the United States revoked the anti-dumping
duty orders in those Cases, effective 23 April 2007. As a result, no potential anti-dumping duty
liability arose, nor were any cash deposits required, on entries made on or after that date. By contrast,
the 2004-2005 administrative reviews in Cases 1 and 6 applied to entries that occurred prior to the end

149United States' appellee's submission, para. 161 (quoting Appellate Body Reports, EC – Bananas III
(Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US), para. 325).
151United States' other appellant's submission, para. 58 (quoting Appellate Body Report, US – Softwood

of the reasonable period of time, and indeed be fore the adoption of DSB's recommendations and
rulings; they were not measures the United Stat es took to comply with the DSB's recommendations
and rulings. Therefore, the United States stresse s that, because the 2004-2005 administrative reviews
in Cases 1 and 6 did not establish a new cash deposit rate that applied for future entries, given that the
underlying anti-dumping duty order had been revoked, they "had no effect whatsoever on the
continued validity and effect of the measure taken to comply" 152, in the form of the relevant
Section 129 determinations.
101. According to the United States, the purpose of th e "nexus-based test" is to determine whether
measures that are not declared to be "measures taken to comply" are nonetheless "closely connected"
to those measures so that they should be reviewed by the compliance panel in order to avoid
"circumvention" of a Member's implementation obligations.
153 Thus, according to the United States,
"[w]here the declared measure taken to comply achieves compliance, but that compliance is
'negat[ed]' by another measure, it is appropriate to consider the latter measure in an Article 21.5
proceeding in order to resolve the disagreemen t as to the 'existence ... of measures taken to
comply'"154 within the meaning of Article 21.5 of the DSU. In this dispute, however, the results of the
2004-2005 administrative reviews in Cases 1 and 6 did not have any effect on the United States'
declared measures taken to comply in the form of two Section 129 determinations, because no cash
deposit rates resulted from those determinations. A ccording to the United States, this is the case
irrespective of whether those determinations were themselves consistent with Articles 9.3 of the Anti-
Dumping Agreement and Article VI:2 of the GATT 1994.
102. In addition, the United States submits that, in terms of their nature, successive administrative
reviews under the same anti-dumping duty orders will "generally have ... some connection"
155 in terms
of their nature with the original anti-dumping i nvestigation, because they will usually involve the
same type of merchandise exported from the same country. Thus, a closer connection with the
declared measure taken to comply must exist in orde r for a subsequent review to fall within the scope
an Article 21.5 proceeding. In the United Stat es' view, the DSB's recommendations and rulings
related exclusively to the use of zeroing in specified original investigations, and none of the Appellate
Body's "as applied" findings in relation to the use of zeroing in administrative reviews related to the
two specific administrative reviews at issue in Cases 1 and 6; nor did the Appellate Body make an "as
such" finding regarding the use of zeroing in administrative reviews in the original proceedings.

152United States' other appellant's submission, para. 63. (original emphasis)
153United States' other appellant's submission, para. 66 (referring to Appellate Body Reports, EC –
Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US), para. 245).
154United States' other appellant's submission, para. 73.
155United States' other appellant's submission, para. 76.

103. Turning to the Panel's analysis of the nexus, in terms of effects, between the two specific
administrative reviews and the original measures at issue, the United States submits that the Panel
erred in finding that the use of zeroing in tho se reviews "allows for the assessment of anti-dumping
duties at a rate that is based on zeroing ... despite alleged implementing action to eliminate such
zeroing".
156 For the United States, the Panel incorrectly treated zeroing as "a unitary phenomenon"157,
despite the fact that the DSB's recommendations a nd rulings with respect to zeroing in original
investigations "are not identical" 158 to those made with respect to zeroing in assessment reviews, in
terms of coverage and legal conclusions.
104. Finally, the United States argues that the timing of the 2004-2005 administrative reviews in
Cases 1 and 6 was insufficient to justify their incl usion in the scope of the compliance proceedings,
because administrative reviews that modify measu res taken to comply with DSB recommendations
and rulings will always be issued after the adoption of those recommendations and rulings.
2. The United States' Compliance Obligations (Cases 1 and 6)
105. The United States claims that the Panel erred in finding that the United States failed to
comply with the DSB's recommendations and rulings, a nd acted inconsistently with Article 9.3 of the
Anti-Dumping Agreement and Article VI:2 of the GATT 1994, by making determinations and issuing
assessment instructions based on zeroing in the 2004-2005 administrative reviews in Certain Hot-
Rolled Carbon Steel Flat Products from the Netherlands (Case 1) and Stainless Steel Wire Rod from
Sweden (Case 6). The United States urges the Appellate Body to reverse this finding and to find
instead that the United States did not act inconsistently with Articles 9.3 of the Anti-Dumping
Agreement and Article VI:2 of the GATT 1994 in those two specific administrative reviews.
106. With respect to Case 1, the United States asser ts that it complied with the recommendations
and rulings of the DSB by providing "offsets" when it recalculated the margin of dumping in the
Section 129 determination and revoking the anti-dum ping duty order, effective 23 April 2007. The
United States also underscores that, as a result of a subsequent determination by the USDOC in a
sunset review, the revocation of the anti-dumpi ng duty order became effective 29 November 2006,
and cash deposits made on imports occurring on or afte r that date have been refunded with interest.
With respect to Case 6, the United States contends that it also complied with the recommendations
and rulings of the DSB by providing "offsets" for non-dumped sales in the recalculation of the margin
of dumping in the Section 129 determination. As a result of this Section 129 determination, the

157United States' other appellant's submission, para. 84.
158United States' other appellant's submission, para. 80.

anti-dumping duty order was revoked, effective 23 Apr il 2007, and any entries occurring on or after
that date were not subject to anti-dumping dutie s. Therefore, in the United States' view, the
termination of the anti-dumping duty orders in Cases 1 and 6 with respect to entries occurring on or
after 23 April 2007 constitutes "withdrawal" of those measures within the meaning of Article 3.7 of
the DSU, insofar as future imports of the produc ts concerned will no longer incur any anti-dumping
duty liability upon entry into the United States. For the United States, anti-dumping and
countervailing duty measures are border measures and, accordingly, eliminating a WTO-inconsistent
anti-dumping or countervailing duty measure at the bor der with respect to a ll future entries will
achieve compliance.
107. The United States submits that the DSB made "as applied" recommendations and rulings in
the original proceedings with resp ect to the use of weighted average-to-transaction comparisons in
certain individually identified assessm ent reviews that did not relate to Cases 1 and 6. The United
States considers that the Panel conflated original investigations and assessment reviews, which are
distinct proceedings that serve different purposes. Whereas, pursuant to Article 5.1 of the Anti-
Dumping Agreement, the purpose of the original investigation is "to determine the existence, degree
and effect of any alleged dumping" , the purpose of an assessment review is to determine the final
amount of the anti-dumping duties consistent with Article 9.3 of the Anti-Dumping Agreement .
According to the United States, the recommendati ons and rulings of the DSB concerning Cases 1
and 6 were limited to the use of zeroing in the origin al investigations at issue, and the United States
has complied with these recommendations and rulings by recalculating the margins challenged in the
original investigations at issue and withdrawing th e orders in accordance with the results of those
recalculations.
108. The United States observes that the 2004-2005 administrative reviews in Cases 1 and 6
covered entries made before the end of the reasonable period of time, even though they were
concluded after that date. Therefore, in finding that the United States failed to comply with the
recommendations and rulings of the DSB in the or iginal proceedings by using zeroing in these two
2004-2005 administrative reviews, the Panel provi ded an "impermissible, retroactive relief" 159 that
extended the implementation obligations to past entr ies. However, the Unite d States submits that the
date of entry , rather than the date of final determination and collection of dumping duties, is
determinative of whether relief is "retroactive" or "prospective" in the context of anti-dumping duties.
In the view of the United States, textual elements of Articles VI:2 and VI:6(a) of the GATT 1994, as
well as the interpretive Note to paragraphs 2 and 3 of Article VI of GATT 1994 (the " Ad Note"),

159United States' other appellant's submission, para. 42.

confirm that it is the legal regime in existence at the time of importation that determines whether the
importer is liable for payment of anti-dumping duties. The United States adds that Articles 8.6, 10.1,
10.6, and 10.8 of the Anti-Dumping Agreement show that "whenever the [ Anti-Dumping Agreement]
specifies an applicable date for an action, the scope of applicability is based on entries occurring on or
after that date."
160 The United States considers that it "has acted consistently with the principle of
prospective implementation, as understood in the antidumping duty context."161
109. In addition, the United States argues that a pplying implementation obligations to future
entries only is not unique to retrospective duty asse ssment systems. Such a principle would also
govern implementation in prospective duty assessment systems, as there is no obligation to refund
anti-dumping duties assessed on importations occurring pr ior to the end of the reasonable period of
time under such systems. Therefore, the United St ates posits that recognizing the date of entry as
determinative of a Member's implementation obligation would maintain neutrality between
retrospective and prospective duty assessment systems.
D. Arguments of the European Communities – Appellee
1. The Panel's Terms of Reference (Cases 1 and 6)
110. The European Communities requests the Appellate Body to uphold the Panel's findings that
the 2004-2005 administrative reviews in Cases 1 a nd 6 and respective assessment instructions fell
within the Panel's terms of reference under Article 21.5 of the DSU, for the following reasons.
111. First, the European Communities disputes th e United States' argument that the DSB's
recommendations and rulings applied exclusively to th e original investigations in Cases 1 and 6. The
European Communities emphasizes that, in the orig inal proceedings, it challenged the original
investigations in Cases 1 and 6, including "a ny amendments and their assessment instructions". 162
Thus, the 2004-2005 administrative reviews in Cas es 1 and 6 and respective assessment instructions
were covered by the DSB's recommendations and rulings and, as such, fell within the Panel's terms of
reference.
112. Secondly, the European Communities reiterates th at the 2004-2005 administrative reviews in
Cases 1 and 6 fell within the Panel's terms of re ference as "omissions" or "deficiencies" in the

160United States' other appellant's submission, para. 48; see also paras. 46 and 47. The United States
also refers to the reasoning of the panel in EC – Bananas III (Article 21.5 – Ecuador) in support of its argument.
(Ibid., para. 50)
161United States' other appellant's submission, para. 51.

United States' compliance. The European Commun ities disagrees with the United States' claim to
have achieved "full and complete compliance" 163 in these Cases, and underscores that the fact that the
United States failed to stop making determinations, and continues to collect duties based on zeroing
with respect to the original measures at issue, indicates that the necessary "measures taken to comply"
do not exist.
113. Thirdly, the European Communities argues th at the 2004-2005 administrative reviews in
Cases 1 and 6 undermined the measures taken to comply by the United States and circumvented
compliance with the DSB's recommendations and ru lings. According to the European Communities,
a compliance panel may examine measures on the basi s of the close connection of those measures
either with the declared "measure taken to comply", the measure at issue in the original proceedings,
and/or the DSB's recommendations and rulings. Thus, the United States is incorrect in suggesting that
the "close-nexus test" applies exclusively to measur es that undermine the declared "measure taken to
comply". Rather, the Panel correctly held that the relevant inquiry is whether a closely connected
measure "undermines or circumvents compliance"
164 with the DSB's recommendations and rulings so
as to fall within the scope of compliance proceedin gs. The key issue for the European Communities
is whether the implementing Member complie d or undermined compliance with the DSB's
recommendations and rulings, and not whether th e implementing Member has undermined its own
declared "measure taken to comply". In these pro ceedings, the Panel correctly concluded that actions
taken by the United States in the context of the subsequent reviews at issue "negat[ed]" 165 the
measures taken to comply, and therefore circumvented compliance with the DSB's recommendations
and rulings.166
114. In addition, the European Communities submits that the administrative reviews in question
affected the measures taken to comply by the Unite d States, because they prov ided the basis for the
assessment of duties calculated w ith zeroing despite the fact that the underlying anti-dumping duty
orders had been previously revoked because the recalculation of the margins in the Section 129
determinations led to the conclusion that, in Cases 1 and 6, no dumping would have been found absent
zeroing. Thus, according to the European Communities, the 2004- 2005 administrative reviews in
Cases 1 and 6 and respective assessment instructions "negated the compliance asserted to have been

163European Communities' appellee's submission, para. 11 (quoting United States' other appellant's
submission, paras. 30, 31, and 62; and United States' first written submission to the Panel, para. 95).
166The European Communities believes that the Panel correctly relied on previous panel and Appellate
Body reports in Australia – Automotive Leather II (Article 21.5 – US) , Australia – Salmon (Article 21.5 –
Canada), and US – Softwood Lumber IV (Article 21.5 – Canada) in making these conclusions.

achieved by the withdrawal of the original measures".
167 The fact that the underlying anti-dumping
duty orders were revoked, and that cash deposits were no longer required for imports made on or after
23 April 2007, does not mean that the effects of those measures no longer exist. Rather, Cases 1
and 6 illustrate that determinations made in subsequent assessment reviews based on zeroing may
continue to nullify and impair the benefits of th e European Communities even after the revocation of
those anti-dumping duty orders.
115. Fourthly, the European Communities contends th at the Panel correctly applied the "nexus-
based test" with respect to the 2004-2005 administra tive reviews in Cases 1 and 6 by examining the
nature, effects, and timing. As regards the links, in terms of nature, between those reviews and the
DSB's recommendations and rulings, the Panel correctly identified the issue of zeroing as the element
closely connecting the subsequent administra tive reviews and the DSB's recommendations and
rulings. The European Communities agrees with the Pa nel that successive determinations of different
types are made in the context of a single trade remedy proceeding, form part of a continuum of events,
and are thus all measures inextricably linked. Where findings were made under different legal
provisions, they were premised on the same fundamental obligations under the Anti-Dumping
Agreement, flowing from the definition of the term "mar gin of dumping" under that Agreement. In
addition, the European Communities rejects the United States' assertion that the Panel erred in treating
zeroing as "a unitary phenomenon, allegedly exis ting in both original investigations and
administrative reviews".
168 The European Communities stress es that, according to the Appellate
Body, "'zeroing' under different comparison methodologies and in different stages of anti-dumping
proceedings simply reflect[s] different manifestations of a single rule or norm." 169 Referring to the
Appellate Body's statement in the original proceedings that "the central focus of this appeal is the
issue of zeroing, both as it relates to original investigations and administrative reviews" 170, the
European Communities emphasizes that the Appellat e Body made it clear that, in the original
proceedings, the use of zeroing in original inves tigations and administrative reviews amounted to a
single issue that led to the same WTO-inconsistent result, whether applied in original investigations or
subsequent administrative reviews.
116. With respect to the links, in terms of effects, between the 2004-2005 administrative reviews in
Cases 1 and 6 and the DSB's recommendations and rulings, the European Communities disputes the

168European Communities' appellee's submission, para. 27 (referring to United States' other appellant's
submission, paras. 78 and 84).
169European Communities' appellee's submission, para. 27 (referring to Appellate Body Report, US –
Zeroing (Japan), para. 88).
170European Communities' appellee's submission, para. 28 (quoting Appellate Body Report, US –
Zeroing (EC), para. 164). (emphasis added by the European Communities omitted)

United States' allegation that cash deposits were the only element that connected those measures.
Rather, the Panel correctly observed that assessmen t rates calculated in administrative reviews may
also affect a Member's implementation of the DS B's recommendations and rulings. For the European
Communities, the use of zeroing in subsequent de terminations would make implementation with
respect to original investigations meaningless, si nce this would inflate again the cash deposits and
duties to be collected, contrary to the Anti-Dumping Agreement . According to the European
Communities, the application of zeroing in the 2 004-2005 administrative reviews in Cases 1 and 6
"perpetuate[s] the WTO-inconsistent anti-dumpi ng measure[s] beyond the end of the reasonable
period of time" 171 and affects the United States' compliance with the DSB's recommendations and
rulings.
117. Moreover, the European Communities dis putes the United States' argument that timing alone
was insufficient to establish that the 2004-2005 administrative reviews in Cases 1 and 6 bore a
sufficiently close connection with the DSB's r ecommendations and rulings, because administrative
reviews following Section 129 determinations made in order to achieve compliance will always be
issued after the adoption of those recommendati ons and rulings of the DSB. The European
Communities reiterates that timing was one of the factors taken into account by the Panel in its "close-
nexus" analysis, but it was not decisive. The Eur opean Communities agrees with the Panel that the
fact that the USDOC "expressly declined" 172 to implement the DSB rulings with respect to
administrative reviews in the Section 129 determinations, "supports inclusion of these measures in the
scope of this [compliance] proceeding". 173 In addition, the European Communities emphasizes that
the 2004-2005 administrative reviews in Cases 1 and 6 were concluded after the adoption of the
DSB's recommendations and rulings and, indeed, a few months after the adoption of the Section 129
determinations. The European Communities furthe r argues that the USDOC's explicit refusal to
extend the Section 129 determinations to entries co vered by the subsequent administrative reviews
suggests that these reviews are interconnected.
2. The United States' Compliance Obligations (Cases 1 and 6)
118. The European Communities requests the Appellate Bo dy to reject the United States' appeal of
the Panel's findings that the 2004-2005 administrative reviews in Cases 1 and 6 are WTO-inconsistent
and constitute a failure to comply with the rulings and recommendations of the DSB. The European
Communities argues that the United States' submissi ons regarding the revocation of the original

171European Communities' appellee's submission, para. 34. (emphasis omitted)
172European Communities' appellee's submission, para. 35. (emphasis omitted)

orders are irrelevant to the question whether the two administrative reviews are WTO-consistent and
comply with the rulings and recommendations of th e DSB. Furthermore, the European Communities
emphasizes that it is not seeking a retroactive reme dy; rather, various United States actions and
omissions after the expiry of the reasonable peri od of time are WTO-inconsistent and constitute a
failure to comply with the DSB's recommendations and rulings. For the European Communities, the
provisions of the GATT 1994 and the Anti-Dumping Agreement to which the United States refers
confirm that it is the WTO legal regime in existen ce at the time a measure is adopted (and imports
occur) that determines the Memb ers' WTO rights and obligations.
174 The European Communities
submits that all these provisions set out obligations that bind all WTO Members; they are treaty
obligations and not "compliance obligations", a term that does not appear in Article 19.1 of the DSU.
The European Communities considers that the provisions of the GATT 1994 and the Anti-Dumping
Agreement to which the United States refers provide no support for the proposition that measures
relating to imports occurring before the expiry of the reasonable period of time need not be
WTO-consistent.
119. The European Communities also rejects the United States' argument that the Panel's approach
unfairly disadvantages retrospective duty assessment systems. The European Communities considers
that nothing in its submissions or in the Panel's fi ndings is inconsistent with the proposition that the
amount finally collected in response to a given dumping behaviour should not in principle vary
according to which type of collection system is u sed. The European Commun ities submits that it is a
well-established principle that, whilst there may be some minor technical or procedural differences,
the retrospective and prospective duty assessment systems are for all essential purposes the same.
According to the European Co mmunities, the United States omit s to address the "backward-looking
aspect"
175 of the prospective duty assessment system—that is, the refund proceedings under
Article 9.3.2 of the Anti-Dumping Agreement . The European Communities emphasizes that all the
pertinent WTO obligations must be complied with by the end of the reasonable period of time, even if
the goods in question entered before the end of this period. The European Communities is of the view
that prospective duty assessment systems do require a WTO-consistent remedy for certain goods that
enter before the end of the reasonable period of time, while the United States appears to be seeking
special protection from DSU remedies for such entr ies under its retrospective system. The European
Communities adds that it is merely seeking an effective process to enforce its rights under the covered
agreements, and that the United States should not be permitted to frustrate these efforts.

174European Communities' appellee's submission, para. 43 (referring to United States' other appellant's
submission, paras. 43-51, where the United States refers to Articles VI :2 and VI:6(a) and the Ad Note to
Article VI:2 and 3 of the GATT 1994, and Articles 8.6, 10.1, 10.6, and 10.8 of the Anti-Dumping Agreement).

E. Arguments of the Third Participants
1. India
120. Pursuant to Rule 24(2) of the Working Procedures , India chose not to submit a third
participant's submission. India's statement at the oral hearing focused on the decision by the
Appellate Body to allow the public observation of the oral hearing, on the scope of the Panel's
jurisdiction under Article 21.5 of the DSU, and on the establishment of the "all others" rate under
Article 9.4 of the Anti-Dumping Agreement.
2. Japan
121. Japan agrees with the European Communities that the Panel erre d in finding that the United
States did not fail to comply with the DSB's recommendations and rulings by applying zeroing in
subsequent reviews that were issued under the same anti-dumping duty order as the measures found to
be WTO-inconsistent in the original proceedings.
122. First, Japan argues that the Panel erred in excluding from its terms of reference the
subsequent reviews that were concluded before the adoption of the DSB's recommendations and
rulings. Japan submits that Article 21.5 of the DS U covers any measure that may result in achieving
or undermining compliance, irrespective of its timing. Properly interpreted in the context provided to
it by Articles 3.7 and 19.1 of the DSU, Article 21.5 requires actions that result in "the elimination of
the WTO-inconsistency in the original measure."
176 Whether a measure achieves this result does not
depend on the timing or purpose of such measure, because nothing precludes a WTO Member from
achieving compliance by a measure "taken in advance of, and without regard to"
177, the DSB's
recommendations and rulings. Therefore, an implem enting Member must be able to offer measures
pre-dating the adoption of the DSB's recommendations and rulings as a defence to a claim that no
compliance measures "exist". However, Article 21. 5 requires a panel to review those measures for
consistency with the covered agreements. In finding that timing is one the relevant factors in
assessing whether a measure is one "taken to comply", the Appellate Body did not indicate either that
this factor is determinative, or that measures pre-dating the adoption of the DSB's recommendations
and rulings cannot be "measures taken to comply". 178 According to Japan, Article 21 of the DSU
generally contemplates events post-dating the a doption of the DSB's recommendations and rulings
because the process of "sur veillance" can only begin after the adoption of those recommendations.

176Japan's third participant's submission, para. 107.
177Japan's third participant's submission, para. 108.
178Japan's third participant's submission, para. 113 (referring to Appellate Body Report, US – Softwood

Nevertheless, Article 21 "does not prescribe that 'measures taken to comply' must come into
existence after such recommendations and rulings are made."
179
123. Japan suggests further that the Panel's position that timing is determinative makes the
implementing Member's intent decisive. However, the Appellate Body found that compliance panels
are not limited to reviewing measures that " have the objective of achieving [] compliance." 180
Therefore, a measure may be "taken to comply" even if it was not adopted with the purpose of
achieving compliance. The Panel itself recognized this elsewhere in its reasoning, when it rejected
the United States' argument that subsequent re views issued after the adoption of the DSB's
recommendations and rulings were not "taken to comply" because they were not adopted "in view
of"181 those recommendations. Conversely, if a measure need not move " in the direction of "182
compliance to be considered a measure "taken to comply", a measure that "moves away from
compliance, or that reinforces non-compliance" 183, can also fall within the scope of Article 21.5
review, even though there was no intent to comply. Thus, Japan posits that measures that undermine
or circumvent compliance may fall within the scope of Article 21.5 proceedings even if taken before
the adoption of the DSB's recommendations and rulings.
124. Moreover, Japan underscores that the United Stat es itself asserted that it had brought its
WTO-inconsistent measures into conformity by vi rtue of compliance measures that pre-dated the
adoption of the DSB's recommendations and rulings. Before the Panel, the United States argued that
it had achieved compliance with the DSB's recomme ndations and rulings by revoking certain of the
original measures at issue and by issuing administrative reviews that "superseded" 184 the original
measures. Of the 18 revocation notices and subse quent administrative reviews identified by the
United States, 17 were issued before the adoption of the DSB's recommendations and rulings. Thus,
although the United States argued that subsequent administrative reviews were not measures "taken to
comply" with the DSB's recommendations and rulings by virtue of their timing, it simultaneously
claimed to have achieved compliance because the or iginal measures had been superseded by those
reviews. In Japan's view, in order to assert the "existence" of measures taken to comply, the United
States declared certain measures as "taken to comply", even though all but one of them were taken
prior to the adoption of the DSB's recommendations and rulings.

179Japan's third participant's submission, para. 115. (original emphasis)
180Japan's third participant's submission, para. 119 (quoting Appellate Body Report, US – Softwood
Lumber IV (Article 21.5 – Canada), para. 67 (original emphasis)).
181Japan's third participant's submission, para. 121 (referring to Panel Report, paras. 8.122 and 8.123).
182Japan's third participant's submission, para. 123 (quoting Appellate Body Report, US – Softwood
Lumber IV (Article 21.5 – Canada), para. 67 (original emphasis)).
183Japan's third participant's submission, para. 123.
184Japan's third participant's submission, para. 132 (referring to Panel Exhibit US-17).

125. In addition, Japan argues that the Panel erred in failing to assess the consistency with the
covered agreements of the subsequent review s that pre-dated the adoption of the DSB's
recommendations and rulings. Where subsequent ad ministrative reviews are offered as evidence of
the "existence" of "measures taken to comply", these measures necessarily fall within the scope of the
compliance proceedings, regardless of the date of th eir adoption. In these circumstances, Article 21.5
of the DSU required the Panel to review those meas ures for consistency with the covered agreements,
and its failure to do so constitutes legal error. Un der a harmonious interpretation of Articles 3.7, 19.1,
and 21.5 of the DSU, the United States was entitled to rely on measures taken before the adoption of
the DSB's recommendations and rulings to assert that it had achieved compliance. However, the same
harmonious interpretation of those pr ovisions required the Panel to c onsider the consistency of those
declared measures with the covered agreements. Even if those measures are not regarded as
"declared" measures taken to comply, they enjoy a particularly close relationship to the original
measures and the DSB's recommenda tions and rulings in terms of nature and effects, and can
"circumvent"185 the compliance obligations of the United St ates. Japan notes that subsequent reviews
concern the same anti-dumping duty order, the sam e products, exported from the same country, and
involve the same zeroing procedure. Therefore, irrespective of the date on which those circumventing
measures were adopted, they are "measures take n to comply" that must be examined under
Article 21.5 of the DSU for consistency with the covered agreements. In Japan's view, timing alone is
not of decisive importance, but is rather one factor to consider together with nature and effects. In
this dispute, weighing these factors together sugg ests that the subsequent reviews are "measures taken
to comply" within the meaning of Article 21.5 of the DSU.
126. Secondly, Japan supports the European Communiti es' claim that the Panel made serious legal
errors in finding that the United States was not obl iged to bring the assessmen t rates in the original
administrative reviews into conformity with its WT O obligations, with prospective effect from the
end of the reasonable period of time. Japan argues that these errors stem from the Panel's incorrect
interpretation and application of Ar ticle 19.1 of the DSU. More sp ecifically, Japan asserts that the
Panel erred in failing to identify the "measures" covered by the DSB's recommendations and rulings
as the original administrative reviews. Japan e xplains that both Articles 3.7 and 19.1 of the DSU
indicate that the subject of the DSB's recommendations and rulings is a "specific measure at issue"
that the panel and/or Appellate Body found to be inconsistent with the covered agreements. However,
in this dispute, the Panel failed to define the DS B's recommendations and rulings by reference to the
16 administrative reviews at issue in the original proceedings. Instead, the Panel stated that the DSB's

185Japan's third participant's submission, paras. 146 and 151 (quoting Panel Report, para. 8.109
(emphasis omitted)).

recommendations and rulings "concerned the calculation of margins of dumping "
186 in the original
reviews, and that the recommendations and rulings therefore required that the calculation of the
margins of dumping be WTO-consistent in new admi nistrative reviews adopted after the end of the
reasonable period of time. Although the Pane l had not stated it expressly, it "essentially" 187 treated
the calculation of the margins of dumping using zeroing as a "measure" that must be brought into
conformity by the end of the reasonable period of time, thereby failing to identify the 16 original
administrative reviews as the subject of the DSB' s recommendations and rulings. The Panel further
found that the use of zeroing had to "cease"
188 by the end of the reasonable period of time. By
incorrectly identifying the measure at issue, the Panel incorrectly assessed the actions required by the
United States during the implementation period. A ccording to Japan, the Panel should have focused
on the fact that the specific measures found to be WT O-inconsistent in the original proceedings were
the 16 original administrative reviews. Those were the measures within the meaning of Article 17.4
of the Anti-Dumping Agreement that the United States was required to bring into conformity by the
end of the reasonable period of time.
127. Japan further submits that the Panel erred in finding that the measures covered by the DSB's
recommendations and rulings were solely the administrative reviews adopted after the end of the
reasonable period of time. Japan explains that the Panel found that the date of determination in an
administrative review is the relevant date in deci ding whether an administrative review is covered by
the DSB's recommendations and rulings. According to Japan, this interpretation by the Panel reduces
Articles 3.7, 19.1, and 21.3 of the DSU to inutilit y, and eviscerates the object and purpose of the
dispute settlement system, since it implies that no implementation obligations ever apply to the
original measures covered by the DSB's rulings. As a consequence, the WTO-inconsistency in an
original measure is never removed and, after the end of the reasonable period of time, the
implementing Member remains free to enforce an or iginal measure already found to be inconsistent
with the covered agreements, by collecting excessi ve anti-dumping duties, without facing suspension
of concessions to offset the ongoing nullification or impairment. Japan asserts that, under the Panel's
approach, the reasonable period of time ceases to serve as a time for the adoption of measures to
comply with the DSB's recommendations and rulings, but instead is transformed into a time for the
implementing Member to adopt new WTO-inconsistent measures. Ja pan further contends that the
Panel's findings nullify the protection afforded by Article 9.3 of the Anti-Dumping Agreement and
Article VI:2 of the GATT 1994. By considering that the date of determination under Article 9.3.1 is

186Japan's third participant's submission, para. 256 (emphasis added) (quoting Panel Report,
paras. 8.175 and 8.180)
188Japan's third participant's submission, para. 259.

decisive, the Panel in essence reduced Article 9.3 to an obligation that imposes disciplines on one
single day—the date of the Article 9.3.1 determinati on. In Japan's view, the Panel overlooked that the
chapeau of Article 9.3 establishes an "overarching" 189 obligation limiting the amount of the duties
collected.
128. Additionally, Japan holds the view that the Panel erred in finding that the continuing legal
effects of the administrative reviews at issue in the original proceedings do not compel the United
States to bring these measures into conformity wi th its WTO obligations. Japan explains that,
although the Panel found that the date of determina tion is the relevant date, it also stated that an
original administrative review would have to be "amended" 190 if it continued to produce legal effects
after the end of the reasonable period of time. Japan concurs with the Panel's statement that a
Member must, in order to implement the DSB's r ecommendations and rulings, "ensure that actions it
undertakes after the end of the reasonable period of time are consistent with its obligations under the
DSB."
191 However, the Panel failed to apply this appr oach to the assessment rates established in the
original measures by finding that an original admini strative review need not be revised to ensure that
duty collection measures taken after the end of th e reasonable period of time are WTO-consistent.
The only supporting reason the Panel gave is that the continuing legal effects of administrative
reviews after the end of the reasonable period of ti me are "due to actions on the part of private
parties".192 Japan disagrees with these statements and cont ends that they are not actions by private
parties, but instead are acts of th e United States' courts, taken on the basis of United States law and
therefore attributable to the United States under WTO law. Further, Japan submits that a decision by
a United States court to issue an injunction is take n after determining "that there is a likelihood of
success on the merits" 193, a legal standard that forms part of th e United States' municipal law. Japan
further notes that, although the Panel found that the assessment rates need not be brought into
conformity, despite the fact that they have ongoing legal effects after the end of the reasonable period
of time, the Panel reached a different conclusion with respect to cash deposit rates, by stating that they
must be WTO-consistent after the end of the reasonable period of time, even if the rates were
established before that date. In Japan's view, the Panel' s distinction between assessment reviews and
cash deposit rates cannot be reconciled with its interpretation of the relevant provision.

189Japan's third participant's submission, para. 290 (quoting Appellate Body Report, US – Stainless
Steel (Mexico), para. 102).
191Japan's third participant's submission, para. 296 (quoting Panel Report, footnote 820 to para. 8.218).
(emphasis added by Japan omitted)
193Japan's third participant's submission, para. 305. (footnote deleted)

129. Furthermore, Japan argues that the Panel's fi nding that the original administrative reviews
need not to be brought into conformity when they have continuing legal effects is wrong, because it
allows the United States to adopt new WTO-incons istent measures after the end of the reasonable
period of time on the basis of the original administrative reviews. In Japan's view, these new
measures will give rise to a continued violation of Article 9.3 of the Anti-Dumping Agreement and
Article VI:2 of the GATT 1994 through the collecti on of anti-dumping duties in excess of the correct
margin of dumping; and violation of Articles II: 1(a) and II:1(b) of the GATT 1994, not justified by
Article II:2(b), through the collection of import duties in excess of the bound tariff. Japan asserts that,
where a measure found to be WTO-inconsistent will provide a basis for new measures after the end of
the reasonable period of time, implementation ac tion is necessary to eliminate the original
inconsistency in order to ensure that the new measures are themselves WTO-consistent, and thereby
to terminate the nullification or impairment.
130. Moreover, Japan contends that the Panel made cert ain legal errors in its analysis of Article 28
of the Vienna Convention. Japan observes that the Panel started its analysis with the proposition that
the DSU only provides for "prospective" and not "r etrospective" remedies, and then decided upon a
meaning for these terms "by analogy"
194 with Article 28 of the Vienna Convention . However, the
Panel admitted that the terms "retrospective" and "prospective" do not feature in the DSU as such. By
analogy to Article 28, the Panel held that a "ret rospective remedy" consists of applying the DSB's
rulings and recommendations to "an act or a fact 'which took place' or a 'situation which ceased to
exist' before the date of expiry of the reasonable period of time". 195 This analysis became the
foundation of the Panel's findings on the temporal scope of the implementation obligation. In Japan's
view, the Panel erred by giving effect to non-treaty labe ls instead of fulfilling its task to give effect to
the wording in the covered agreements. According to Japan, rules of treaty interpretation do not apply
to non-treaty labels; there is no text, context, a nd object and purpose by which to interpret non-treaty
language. Furthermore, Japan argues that the Pane l's conception of retrospective remedies, based
upon an improper analogy with Article 28 of the Vienna Convention, is at odds with the phrase "bring
the measure into conformity", which the Panel sh ould have interpreted. For Japan, this phrase
connotes "transformative action"196 by the implementing Member to change the original measure from
a state of non-conformity with WTO law into a state of conformity. In its Report, the Panel excluded
the measures at issue in the original proceedings from the scope of implementation, because they were
past acts adopted before the end of the reasona ble period of time. The Panel found that the

194Japan's third participant's submission, paras. 348, 352, and 358.
196Japan's third participant's submission, para. 366.

United States was not required "to revisit" 197 the original measures, or to "recalculate" 198 the
assessment rates in those measures. However, Japan asserts that the fact that an original measure is
"revised" during the implementation period does no t mean that WTO dispute settlement imposes a
retrospective remedy; the measure must be revi sed with prospective effect from the end of the
reasonable period of time. In Japan's view, the Unite d Stated is not required to repay inflated duties
that were collected before the end of the reasona ble period of time following original administrative
reviews, since these were completed in the past . However, where the United States had not yet
collected the duties by the end of the reasonable period of time, it must revise its original measure and
consequent actions, occurring after the end of the r easonable period of time, in order to make that
measure WTO-consistent. Japan refers to Artic les 13, 14, and 15 of the 2001 Draft Articles on
Responsibility of States for internationally wrongful acts 199 (the "ILC Draft Articles") in support of its
contention that Article 19.1 of the DSU requires the United States to bring the administrative reviews
at issue in the original proceedings into conformity with its WTO obligations when they continue to
produce legal effects after the end of the reasona ble period of time in order to prevent new or
continuing WTO-inconsistencies.
131. Lastly, Japan asserts that its interpretation of Article 19.1 of the DSU places retrospective and
prospective duty collection systems on an "equal footing" 200 in terms of implementation obligations,
and does not create inequalities as the United States suggests. Under Japan's interpretation, the
implementation of the DSB's recommendations and ru lings operates in exactly the same way in both
systems. Both systems allow for an administrativ e review to take place, pursuant to Articles 9.3.1
and 9.3.2 of the Anti-Dumping Agreement, and that review determines the definitive amount of duties
due. Similarly, both systems provide for a refund in the event that the duties co llected at the time of
importation exceed the margin of dumping. Japan expl ains further that, if a panel or the Appellate
Body finds that an administrative review is inconsis tent with Article 9.3, the review will have to be
brought into conformity with WTO law if it conti nues to produce legal effects after the end of the
reasonable period of time. Japan notes that this situation could arise under both systems.

199Draft Articles on Responsibility of States for internationally wrongful acts, adopted by the
International Law Commission at its fifty-third session (2001). The text of the ILC Draft Articles is annexed to
the United Nations General Assembly Resolution A/RES/56/83 (29 January 2002).

3. Korea

132. In Korea's view, the Panel adopted a fairly m echanistic approach and failed to capture the
"reality" and "particular context" 201 of this dispute by considering the timing of the subsequent
reviews to be critical, and determining th at only those subsequent reviews decided after the adoption
by the DSB of the original panel and Appellate Body reports fell within its terms of reference. Korea
submits that the Panel erred by placing too much emphasis on the temporal element of the subsequent
reviews. In addition, Korea contends that the Pa nel failed to provide any detailed explanation as to
why reviews subsequent to the original investiga tions and administrative reviews at issue in the
original proceedings that were rendered before the adoption of the reports by the DSB should be
treated differently from those that were decided afte r adoption by the DSB. According to Korea, the
Panel's rigid focus on timing constitutes a legal error that violates Article 21.5 of the DSU.
133. For Korea, timing is not the most critical element in addressing this particular issue: the
controlling element should be "substance" as opposed to "form".
202 Korea argues that effects of the
subsequent reviews that were decided before the adoption of the reports by the DSB could reasonably
continue to exist effectively (or exert influence) after adoption. Arguably, the impact of these
subsequent reviews continues to persist, as th e cash deposit rates calculated from these reviews
continue to affect future entries covered by the same anti-dumping duty order. Korea contends that
the Panel disregarded this continuing effect, and su bmits that the subsequent reviews with resulting
effects after the adoption of the original panel and Appellate Body reports by the DSB fell within the
Panel's terms of reference.203
134. Furthermore, according to Korea, the Panel shoul d have taken into consideration the context
of this particular dispute. Korea reiterates in par ticular that each of the subsequent reviews does not
exist as an insulated measure, but instead is a c ontinuing process that administers a particular anti-
dumping duty order established as a result of an anti-dumping investigation. Korea argues that the
Panel's decision is not entirely consistent with the Appellate Body's decision in US – Continued
Zeroing, where the Appellate Body endorsed the con cept of a single trade remedy proceeding,
involving the imposition, assessment, and collection of anti-dumping duties on imports of a particular

201Korea's third participant's submission, para. 17.
202Korea's third participant's submission, para. 20.
203Korea refers to situations where zeroing is used in an administrative review decided before the
adoption of the DSB rulings, and, as a result, cash deposits distorted by zeroing are applied to future entries, and
such entries remain unliquidated after the end of the re asonable period of time. (Korea's third participant's
submission, paras. 20-22)

product from the same country. 204 Korea asserts that, in this dispute, it can also be argued that the
subsequent reviews where decisions were taken before the adoption by the DSB of the original reports
form part of "a string of successive proceeding pertaining to the same antidumping duty order".205
135. As its second point, Korea holds the view that the Panel erred by failing to recognize that
subsequent reviews also constitute "omission or deficiencies" on the part of the implementing
Member and, therefore, fell within the Panel's terms of reference. According to Korea, the refusal of
the Panel to review the claim independently of its substantive analysis of whether compliance had
been achieved constitutes a legal error.
136. In Korea's view, after the end of the reasonabl e period of time, not only affirmative action by
the implementing Member to keep an WTO-inc onsistent measure in place, but also "simple
inaction"206 to take a necessary measure to rectify th e WTO-inconsistency, constitutes a failure to
comply with the DSB's recommendations and rulings. It is this failure, be it in the form of affirmative
action or inaction, that fell under the Panel's terms of reference. Korea refers to Article 2 of the ILC
Draft Articles 207, which illustrates that there is no differe nce as to the legal effect between an
affirmative action and an omission of a state when it comes to the determination of the existence of an
internationally wrongful act resulting in state responsibility.
137. Korea observes, as shown by evidence in the Panel record, that the United States continued to
apply zeroing in subsequent reviews after the end of the reasonable period of time. Therefore, in
Korea's view, the United States failed to implemen t the DSB's recommendations and rulings in due
course. According to Korea, if the omission is "obvious" 208, as the Panel acknowledged in its Report,
the subsequent reviews that provide evidence of "omissions" and "deficiencies" by the implementing
Member should be covered by the Panel's terms of reference.
138. With respect to establishment of the "all others" rate, Korea supports the European
Communities' claim that the increases in the "all ot hers" rates are unreasonable and inconsistent with
Articles 9.4 and 6.8 and Annex II of the Anti-Dumping Agreement. According to Korea, the Panel's
conclusion that Article 9.4 does not contain a specif ic rule to calculate an "all others" rate in a

204Korea's third participant's submission, para. 25 (referring to Appellate Body Report, US – Continued
Zeroing, paras. 181, 185, and 190).
205Korea's third participant's submission, para. 26 (quoting Appellate Body Report, US – Continued
Zeroing, para. 191).
206Korea's third participant's submission, para. 29.
207Supra, footnote 199.
208Korea's third participant's submission, para. 32.

particular anti-dumping proceeding "is almost tantamount to the statement that an investigating
authority of a Member retains almost unbridled discretion in applying an 'all others' rate."
209
139. In contrast to the Panel's finding, Korea contends that Article 9.4 of the Anti-Dumping
Agreement does provide for specific rules for the calculati on of the "all others" rate. In Korea's view,
Article 9.4 unequivocally states two things: first, an "all others" rate should be related to the rates
assigned to the exporters and producers individually investigated, and these rates set a ceiling for the
"all others" rate; sec ondly, the use of zero, de minimis, or "facts available" margins in the calculation
of an "all others" rate is prohibited. Therefore, even if Article 9.4 does not specify what to do in a
situation where there are no margins other than zero, de minimis, or based on facts available, what the
two guidelines in Article 9.4 collectively stand for is that any calculation of an "all others" rate should
be "reasonable".210
140. Furthermore, Korea argues that it is appropriate for a WTO panel to assess the
"reasonableness" of an allegedly WTO-inconsistent measure that involves a WTO provision that
contains a lacuna. Since the drafters of an ag reement could not possibly set out all the details
necessary to resolve a particular dispute, and since a panel enjoys certain discretion, Korea deems it
appropriate for a panel to apply a reasonable interp retation and render a reasonable decision to fill the
lacuna in the text of the provision. Korea argues th at this proposition is supported by the requirement
in Article 11 of the DSU that a panel make an obj ective assessment of the matter before it. Korea
asserts that the Panel, however, failed to analyze whether the "all others" rate is reasonable in the
present case, and instead found that no specific rules exis t in this area: this "should not be translated
into providing a carte blanche to an investigating authority."
211 Therefore, in Korea's view, the Panel
failed to fulfil its obligation under Article 11 of the DSU.
141. In addition, Korea contends that the Pane l's decision not to consider the European
Communities' claims of violation of Article 6.8 and Annex II of the Anti-Dumping Agreement ,
because they were dependent on the claim of viola tion of Article 9.4, was misplaced. In Korea's
view, the "facts available" standard cannot readily be resorted to by an investigating authority for the
purpose of merely facilitating the calculation process. Article 6.8 and paragraphs 3 and 6 of Annex II
of the Anti-Dumping Agreement clearly set out conditions that need to be fulfilled before an
investigating authority can apply the "facts availabl e" standard. These provisions make it clear that
the Anti-Dumping Agreement does not provide unrestricted liberty to an investigating authority

209Korea's third participant's submission, para. 36
210Korea's third participant's submission, para. 39.
211Korea's third participant's submission, para. 43.

whenever it encounters less than optimal informat ion from a foreign respondent. Korea contends,
however, that the Panel simply allowed an investig ating authority to use adverse facts available as
"data of convenience".212
4. Mexico
142. Pursuant to Rule 24(2) of the Working Procedures , Mexico chose not to submit a third
participant's submission. Mexico's statement at th e oral hearing focused on the "nexus-based test" to
determine whether subsequent reviews are within the scope of Article 21.5 proceedings, on the
temporal scope of the implementation obligations, and on the establishment of the "all others" rate
under Article 9.4 of the Anti-Dumping Agreement.
5. Norway
143. Regarding the issue of the jurisdiction of the Panel, Norway argues that the Panel should have
found that all subsequent reviews challenged by the European Communities in this dispute are
"measures taken to comply" that fell within the scope of its juri sdiction under Article 21.5 of the
DSU.
144. Norway submits that the Panel erred in finding that the timing of the subsequent reviews was
the decisive factor with regard to its jurisdiction, and not just one of the optional factors that "may" be
taken into consideration in the "nexus-based" analysis, listed on an equal footing with nature and
effects.
145. Norway agrees with the Europ ean Communities that subsequent reviews fell within the
Panel's jurisdiction as (i) "amendments" to the original measure, (ii) "omissions" or "deficiencies" in
the United States' implementation of the DSB's recommendations and rulings, or alternatively
(iii) "measures taken to comply", because they have a sufficiently close nexus with the measures at
issue and the DSB's recommendations and rulings in the original proceedings. According to Norway,
the fact that subsequent reviews are "amendme nts" to the original measure follows from the
description of the measures at issu e in the original proceedings, wh ich included "any amendments".
Each administrative review must be considered a continuum within one single anti-dumping duty
order. If this were not the case, then the Unite d States could circumvent its WTO obligations by
enacting successive measures.

212Korea's third participant's submission, para. 46.

146. Norway also agrees with previous panel and Appe llate Body reports that it is for the panel,
and not for the Member alone, to determine what constitutes a "measure taken to comply" within the
meaning of Article 21.5 of the DSU.
213 Norway contends that the United States cannot make the
argument that subsequent reviews are not "measur es taken to comply" while, at the same time,
presenting them as evidence of compliance.
147. Norway asserts that the focus of the complian ce process, in the context of the DSU, in
particular Articles 3.7 and 19.1, is the end resu lt of the measure at issue, namely, to achieve
consistency with a Member's WTO obligations. A ccording to Norway, the important point is not
when a subsequent review is decided, but whether or not it achieved compliance.
148. Norway notes that the Appellate Body has previously rejected the timing of a measure as a
factor justifying its exclusion from the scope of the proceeding 214, and that the United States has
recognized that "compliance need not necessarily occur subsequent to the DSB recommendation and
rulings, as a WTO Member might modify or remove measures at issue after establishment of a panel
but prior to adoption of the pa nel or Appellate Body report".
215 According to Norway, "[b]y making
timing the determinative element in respect of the scope of Article 21.5, the Panel in essence
designates the [M]ember's intent as the acid test."216 However, Norway emphasizes that the Appellate
Body has previously held that the scope of a pane l's jurisdiction is not confined to measures that
"move in the direction of, or have the objective of achieving, compliance". 217 Finally, Norway states
that requiring the European Communities to initia te new panel proceedings to challenge dumping
determinations in measures that supersede the orig inal ones would go against the aim of Article 21.5
of the DSU and result in the anticipatory circumvention of Members' compliance obligations.
149. With respect to the issue of the establishment of the "all others" rate, Norway submits that the
Panel erred in concluding that Article 9.4 of the Anti-Dumping Agreement imposes no obligations on
Members in a situation where all margins of inv estigated exporters or producers are either zero,
de minimis, or calculated using facts available. In pa rticular, Norway argues that the Panel erred

213Norway's third participant's submission, para. 23 (referring to Appellate Body Report, US –
Softwood Lumber IV (Article 21.5 – Canada), para. 73; Appellate Body Report, EC – Bed Linen (Article 21.5 –
India), para. 78; Panel Report, Australia – Automotive Leather II (Article 21.5 – US) , para. 6.4; and Panel
Report, Australia – Salmon (Article 21.5 – Canada), para. 7.10(22)).
214Norway's third participant's submission, para 27 (referring to Appellate Body Report, US – Softwood
215Norway's third participant's submission, para 27 (quoting Panel Report, US – Gambling (Article 21.5
– Antigua and Barbuda), para. 5.11).
216Norway's third participant's submission, para. 28. (original emphasis)
217Norway's third participant's submission, para. 29 (quoting Appellate Body Report, US – Softwood
Lumber IV (Article 21.5 – Canada), para. 67 (original emphasis omitted)).

because it did not interpret Article 9.4 in accordance with the Vienna Convention , but merely made
references to the difficulties of investigating authorities in such cases.
150. Norway emphasizes that trade restrictions cannot be imposed at will by a Member, but only in
accordance with the provisions of the WTO covered agreements. Referring to Articles 1 and 18.1 of
the Anti-Dumping Agreement, Norway argues that Members do not enjoy the discretion to fill lacunae
at will, and that doing so would be c ontrary to the object and purpose of the WTO Agreement to
provide a rules-based multilateral trading system. In Norway's opinion, any anti-dumping measure
must be in full conformity with Article VI of the GATT 1994 and the Anti-Dumping Agreement.
151. Turning to the text of Article 9.4 of the Anti-Dumping Agreement , Norway observes that
Article 9.4 is an exception to the general principle set forth in Article 6.10, first sentence, that each
exporter or producer has the right to its own indivi dual margin. The "all others" rate as provided for
by Article 9.4 applies to exporters or producers that were not asked by the investigating authorities to
participate in the investigation. Norway stresses that the decision no t to investigate these exporters or
producers, and to provide them with an individual ma rgin, was taken by the investigating authority.
Therefore, those exporters or producers are not at fault.
152. Norway further explains that Article 9.4 set s forth the weighted average of the dumping
margins calculated for investigated exporters or producers as the maximum ceiling for the "all others"
rate. Norway points out that Article 9.4 pr ovides that margins that are either zero, de minimis, or
calculated using facts available should be disregarde d in calculating the weighted average margin of
dumping. Thus, in a situation where all margins are either zero, de minimis, or calculated using facts
available, none of those margins can be used to calculate the average dumping margin for purposes of
setting the "all others" rate. According to Norway, th e Panel made a legal error in concluding that in
such a situation "it was a 'free for all' for the investigating authorities to impose the margin it saw
fit."
218 In Norway's view, this conclusion is contrary to Article 9.4 of the Anti-Dumping Agreement.
Norway maintains that duties can be imposed only where the Agreement specifically allows for it, and
where there is no legal basis to impose a measure, it cannot be imposed. Norway asserts that the
investigating authorities have no credible basis to draw conclusions as to the possible dumping
behaviour of non-investigated exporters or produ cers, since there are no margins available for the
calculation of the "all others" rate. According to Norway, two options are available to investigating
authorities in such cases: (i) to exempt all non-inv estigated exporters or producers from the measure;
or (ii) to extend the investigation by including more exporters or producers within the sample of
investigated exporters/producers such that it is representative.

218Norway's third participant's submission, para. 50.

153. Based on the above, Norway submits that, in a s ituation where all margins of the investigated
exporter or producers are either zero, de minimis, or calculated using facts available, Article 9.4 of the
Anti-Dumping Agreement requires Members not to apply anti-dumping measures against non-
investigated exporters or producers.
6. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu

154. Pursuant to Rule 24(2) of the Working Procedures, the Separate Customs Territory of Taiwan,
Penghu, Kinmen and Matsu chose not to submit a third participant's submission. At the oral hearing,
the opening statement of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
focused on the relationship between the United States' anti-dumping system and the scope of
Article 21.5 proceedings.
7. Thailand

155. Pursuant to Rule 24(2) of the Working Procedures , Thailand chose not to submit a third
participant's submission. Thailand's statement at th e oral hearing focused on the scope of the Panel's
jurisdiction under Article 21.5 of the DSU, and on the temporal scope of implementation obligations.
III. Issues Raised in This Appeal
156. The following issues are raised in this appeal.
(a) Whether the Panel erred in refraining from ruling on the European Communities'
claim that the Panel was improperly composed.
(b) Whether the Panel erred in finding that certain administrative and sunset reviews
issued under the same anti-dumping duty or ders as the measures at issue in the
original proceedings fell within the Panel's terms of reference under Article 21.5 of
the DSU. In particular, whether the Panel erred:
(i) in finding that certain subsequent revi ews did not fall within its terms of
reference as "amendments" to the measures at issue in the original
proceedings;
(ii) in finding that the subsequent reviews that pre-dated the adoption of the
recommendations and rulings of the DS B did not fall within its terms of
reference, because they did not have a sufficiently "close nexus" with the
original measures at issue and the recommendations and rulings of the DSB;

(iii) in finding that the 2004-2005 administrative reviews in Certain Hot-Rolled
Carbon Steel Flat Products from the Netherlands (Case 1) and Stainless Steel
Wire Rod from Sweden (Case 6) fell within its terms of reference, in the light
of their close nexus with the original measures at issue and the
recommendations and rulings of the DSB; and
(iv) in failing to address the European Comm unities' claim that the subsequent
reviews fell within its terms of reference as "omissions" or "deficiencies" in
the United States' implementation of th e recommendations and rulings of the
DSB, and in so doing, acted inconsistently with Article 11 of the DSU.
(c) Whether the Panel erred by not extending th e United States' compliance obligations
to actions consequent to the assessmen t of duties, including the collection or
liquidation of duties occurring after the end of the reasonable period of time related to
administrative review determinations completed before that date.
(d) Whether the Panel erred in its examination of specific subsequent administrative
reviews and consequent actions to coll ect anti-dumping duties when it evaluated
whether the results of these reviews or these actions establish failures to comply with
the recommendations and rulings of the DSB; in particular:
(i) regarding Certain Hot-Rolled Carbon Steel Flat Products from the
Netherlands (Case 1), whether the Panel erred in its analysis of the
2004-2005 administrative review, the rescission of the 2005-2006
administrative review, as well as consequent assessment instructions and
liquidation instructions;
(ii) regarding Stainless Steel Wire Rod from Sweden (Case 6), whether the Panel
erred in its analysis of the 2004-2005 administrative review, as well as
consequent assessment instructions and liquidation instructions;
(iii) regarding Ball Bearings and Parts Thereof from the United Kingdom
(Case 31), whether the Panel erred in refraining from making a specific
finding with respect to the assessment after the end of the reasonable period
of time of duty liability for imports of an exporter; and

(iv) with respect to Stainless Steel Plate in Coils from Belgium (Case 18), Certain
Pasta from Italy (Cases 19 and 20), Stainless Steel Sheet and Strip in Coils
from Italy (Cases 21 and 22), Granular Polytetrafluoroethylene Resin from
Italy (Cases 23 and 24), Stainless Steel Sheet and Strip in Coils from
Germany (Cases 27 and 28), Ball Bearings and Parts Thereof from France
(Case 29), and Ball Bearings and Parts Thereof from Italy (Case 30), whether
the Panel erred in refraining from maki ng additional substantive findings on
the grounds that the European Communities did not substantiate its claims.
(e) With respect to the subsequent sunset revi ews relating to the measures at issue in the
original proceedings:
(i) whether the Panel erred in finding th at the European Communities had not
demonstrated that the United States failed to comply with the
recommendations and rulings of the DSB in the subsequent sunset review
proceedings in Stainless Steel Bar from France, Germany, Italy, and the
United Kingdom (Cases 2, 3, 4, and 5) and Certain Pasta from Italy
(Case 19), because the results of those sunset reviews had not yet
materialized at the time the Panel was established;
(ii) whether the Panel acted inconsistently with Article 11 of the DSU in not
addressing the European Communities' claim that the United States failed to
comply with the recommendations and rulings of the DSB in the original
proceedings given that certain aspects of the measures at issue in the original
proceedings remained in place; and
(iii) in the event the Appellate Body reverses the Pane l's findings in
subparagraphs (i) and (ii) above and the Panel's findi ngs that certain sunset
reviews did not fall within its terms of re ference, whether, by relying, in all
the sunset review proceedings menti oned in the Annex to the European
Communities' request for the establishment of a panel under Article 21.5 of
the DSU, on margins calculated in prior proceedings using zeroing, the
United States acted inconsistently with Articles 2.1, 2.4, 2.4.2, and 11.3 of
the Anti-Dumping Agreement and Articles 19.1 and 21.3 of the DSU and
failed to comply with the recommendations and rulings of the DSB in the
original proceedings.

(f) Whether the Panel erred in declining to make findings with respect to the claims of
the European Communities regarding the non- existence of measures taken to comply
between 9 April 2007 and 23 April/31 August 2007.
(g) Whether the Panel erred in finding that th e European Communities' claim regarding
an alleged arithmetical error in the Section 129 determination in Stainless Steel Sheet
and Strip in Coils from Italy (Case 11) was not a claim that the European
Communities could properly make in the context of these Article 21.5 proceedings.
(h) Whether the Panel erred in finding that the United States did not act inconsistently
with Article 9.4 of the Anti-Dumping Agreement when calculating the "all others"
rates in the Section 129 determinations in Stainless Steel Bar from France, Italy, and
the United Kingdom (Cases 2, 4, and 5), and in failing to address the European
Communities' related claim under Article 6.8 and Annex II of the Anti-Dumping
Agreement.
IV. Introduction to the United States' System for the Imposition and Assessment of Anti-
Dumping Duties
157. Because this dispute concerns the use of zer oing by the United States when determining anti-
dumping duties, we consider it useful to provide a brief overview of the United States' retrospective
system for the imposition and assessment of anti-dumping duties. 219 This overview is based on the
description contained in the Panel Report and the origin al panel report, as clarified by the participants
during the course of these appellate proceedings.
158. The first stage of the system is the "original investigation" for the imposition of anti-dumping
duties. The United States Department of Commerc e (the "USDOC") conducts an investigation to
determine whether dumping by one or more exporters has occurred during a given period of time (the
"period of investigation") and, if so, what the initia l margin of dumping is for each exporter. This is
done by calculating an individual weighted average dumping margin for each known exporter and
producer.
220 The USDOC then issues a Notice of Final Determination of Sales at Less than Fair
Value, setting out its assessment of the existence and level of dumping. The United States
International Trade Commission (the "USITC") then determines whether the relevant United States
industry is materially injured or threatened with material injury by reason of the dumped imports. If

219See Panel Report, paras. 2.4-2.9. See also Original Panel Report, paras. 2.1-2.5.
220United States' other appellant's submission, para 11 (referring to Section 777A of the United States
Tariff Act of 1930 (Public Law No. 1202-1527, 46 Stat. 741, United States Code , Title 19, Chapter 4, as
amended (the "Tariff Act")) (Panel Exhibit US-3)).

the USDOC finds that dumping existed during the pe riod of investigation and the USITC finds that
the domestic industry was materially injured or thr eatened with material injury by reason of the
dumped imports, the USDOC issues a Notice of Antidumping Duty Order and imposes "a cash
deposit of the estimated amount of antidumping duties at the time of importation"
221, equivalent to the
individual weighted average dumping margin for eac h exporter individually examined. In addition,
the Notice of Antidumping Duty Order sets out an "all- others" rate applicable to exporters that were
not individually examined in those cases in whic h the number of exporters was too large to make
determining individual margins for each practicable.
159. In order to determine the existence of dump ing and the individual weighted average dumping
margin for each exporter investig ated, the USDOC normally groups the exports into specific models
or varieties of the product where each grouping or model contains only those varieties of the product
at issue that are virtually identical in physical characteristics. The weighted average-to-weighted
average comparison between the normal value and th e export price is then made within each such
averaging group. In the past, if the export price exceeded the normal value for one or more of the
models being compared, the dumped amount for that m odel was considered to be zero. This practice
has been referred to as "model zeroing". The Panel found, as a factual matter, that the United States
abandoned the practice of model zeroing in original investigations in which the weighted average-to-
weighted average comparison methodology is used as from 22 February 2007.
222 In other words, in
aggregating model-specific comparisons, the USDO C currently takes into account all the results
regardless of whether the weighted average export price is above or below the weighted average
normal value for each model. If the individual we ighted average dumping margin for a particular
exporter thus calculated is zero, or below de minimis levels, that exporter is not found to be dumping
and the investigation is terminated in relation to it. If, however, the weighted average dumping
margin is above de minimis levels, the exporter is found to be dumping and is liable for payment of
anti-dumping duties.
160. The second stage of the United States' system is the assessment of the final liability for anti-
dumping duties for specific entries of the subject product by individual importers. The United States'
system of duty assessment operates on a retrospectiv e basis under which liability attaches at the time
of entry, but duties are not actually assessed at that time. Instead, the United States collects at the
time of entry cash deposits in the amount dete rmined for each exporter during the original
investigation stage of the process. Subsequently , once a year during the anniversary month of the

221United States' other appellant's submission, para 10 (referring to United States Code , Section
1673e(a)(3) (Panel Exhibit US-1)).
222Panel Report, para. 3.1(a).

anti-dumping duty order, interested parties—including importers, domestic interested parties, foreign
producers and exporters—may request the USDOC to conduct a periodic review ("administrative
review") to determine the final amount of anti- dumping duties owed on entries that occurred during
the previous year, as well as to determine a new cash deposit rate for future entries. If no review is
requested, the cash deposits made on the entries dur ing the previous year are automatically assessed
as the final duties. The results of this "assessment review" are published in a Notice of Final Results
of Antidumping Duty Administrative Reviews.
161. When calculating the magnitude of any margin of dumping for the purpose of assessing an
importer's final liability for paying anti-dumping duti es and any future cash deposit rates, the United
States normally uses the average-to-transaction methodol ogy and applies what has been referred to as
"simple zeroing". Under this methodology, when comparing the monthly weighted average normal
value with the price of each individual export transaction, the USDOC considers the amount by which
the normal value exceeds the export price to be the "dumped amount" for that transaction. If the
export price exceeds the normal value, the dumped amount for that export transaction is considered to
be zero. The "duty assessment rate" for each importer is then determined by aggregating the results of
each comparison for which the average normal value exceeds the export price.
223 The same zeroing
methodology is also reflected in the going-forward cash deposit rate for all future entries of the
subject merchandise from the exporter concerned.
162. Once the Notice of Final Results of Antidumpi ng Duty Administrative Reviews is published,
the USDOC communicates the results of its determin ation to the United States Customs and Border
Protection ("Customs") by issuing "assessment instruc tions". The instructions inform Customs of the
"assessment rate", and thus the final amount of an ti-dumping duty to be paid by each importer on all
entries made during the relevant period. 224 Customs then instructs the United States ports of entry to
"liquidate" the relevant entries of subject imports at the established rates. 225 When Customs liquidates
an entry, the importer of record (or its authori zed customs broker) generally receives a notice of the
liquidation. For each entry made, the importer receiv es either: (i) only a notice, if the cash deposit
amount collected at entry is the same as the amount due at liquidation; (ii) a notice and an invoice, if
the cash deposit amount collected at entry is less than the amount due at liquidation; or (iii) a notice

223The USDOC includes the value of all import transactions in the denominator of the fraction used to
calculate the importer's liability, but the results of the comparisons for which export prices exceed the average
normal value are excluded from the numerator of that fraction. (See Panel Report, para. 2.6)
224United States Code of Federal Regulations, Title 19, Section 351.212(b).
225See Panel Report, para. 2.7.

and a refund cheque, if the cash deposit amount coll ected at entry is more than the amount due at
liquidation.
226
163. Five years after publication of an anti-dumping duty order, the USDOC and the USITC
conduct a "sunset review" to determine respectively whether revocation of the order would be likely
to lead to a continuation or recurrence of dumpi ng, and the continuation or recurrence of material
injury.227 The anti-dumping duty order is revoked unless both the USDOC and the USITC make
affirmative "likelihood" determinations.228
V. Panel Composition
164. We address first the issue of whether the Panel erred in refraining from ruling on the
European Communities' claim that the Panel was improperly composed.
165. In the original proceedings, the European Communities and the United States agreed, on
27 October 2004, that Mr. Crawford Falconer, Mr . Hans-Friedrich Beseler, and Mr. William Davey
would compose the panel. This panel was chaired by Mr. Falconer. Mr. Beseler is a national of a
country that is a member of the European Communities and Mr. Davey is a national of the United
States. Mr. Beseler and Mr. Davey were allowed to serve on the original panel as agreed by the
parties under Article 8.3 of the DSU.
229
166. On 13 September 2007, the European Communities requested the establishment of a panel
pursuant to Article 21.5 of the DSU concerning the alleged failure of the United States to implement
the recommendations and rulings of the DSB in th e original proceedings. At its meeting on
25 September 2007, the DSB decided, in accordance with Article 21.5, to refer this matter, if possible,
to the original panel. Article 21.5 provides that compliance disputes should be decided "through
recourse ... wherever possible ... to the original pane l". In an exchange of views relating to the
composition of the compliance panel, the WTO Secretariat indicated to the parties that two members
of the original panel, Mr. Falc oner and Mr. Davey, were not ava ilable to serve on the compliance
panel.
230 In a letter to the WTO Secretariat date d 1 October 2007, the European Communities
expressed the view that, as Mr. Beseler was available, he should not be excluded from serving on the
compliance panel. 231 On 28 November 2007, the European Communities requested the

227Panel Report, para. 2.8.
228Panel Report, para. 2.9.
229Original Panel Report, para. 1.5.
230Panel Report, para. 5.64.
231Panel Report, para. 5.64.

Director-General of the WTO to determine the co mposition of the compliance panel under Article 8.7
of the DSU. On 30 November 2007, the Direct or-General appointed Mr. Felipe Jaramillo as
chairperson of the Panel, and Ms. Usha Dwarka-Ca nabady and Mr. Scott Gallacher as the two other
members of the Panel.232
167. The European Communities requested the Pane l to find that it was improperly composed
under Articles 8.3 and 21.5 of the DSU. According to the European Communities, the Panel had an
inherent jurisdiction to rule on the question of wh ether it was properly composed, as well as the duty
to examine this issue ex officio by providing a proper interpretation of the DSU.233
168. Addressing the European Communities' claim, the Panel underscored that Article 8.7 of the
DSU establishes that, whenever there is no agreem ent between the parties, the ultimate power to
compose the panel rests with the Director-General. 234 According to the Panel, there is no provision of
the DSU that would give it the authority to make a finding or ruling with respect to the application, by
the Director-General, of the provisions of th e DSU regarding panel composition contained in
Article 8.7.235 The Panel pointed out that, should it agree with the contentions of the European
Communities, it would have to conclude that it had no jurisdiction to examine and rule on the
European Communities' other claims in this dispute. 236 In the light of these considerations, the Panel
refrained from ruling on the substance of the claim of the European Communities with respect to its
composition.
169. On appeal, the European Commun ities alleges that the Panel acted inconsistently with the
basic requirements of due process and the full exerci se of the judicial function by failing to address
properly its claim that the Panel was composed in a manner inconsistent with Articles 8.3 and 21.5 of
the DSU. 237 The European Communities submits th at, because panels, and ultimately the

232Panel Report, para. 1.6. None of these panelists are nationals of any of the parties to the dispute.
233Panel Report, para. 8.9.
234Panel Report, para. 8.17.
235Panel Report, para. 8.16. Article 8.7 of the DSU stipulates:
If there is no agreement on the panelists within 20 days after the date of the
establishment of a panel, at the request of either party, the Director-General,
in consultation with the Chairman of the DSB and the Chairman of the
relevant Council or Committee, shall determine the composition of the panel
by appointing the panelists whom th e Director-General considers most
appropriate in accordance with any rele vant special or additional rules or
procedures of the covered agreement or covered agreements which are at
issue in the dispute, after consulting w ith the parties to the dispute. The
Chairman of the DSB shall inform th e Members of the composition of the
panel thus formed no later than 10 days after the date the Chairman receives
such a request.
236Panel Report, para. 8.13.

Appellate Body, have the authority and the obliga tion to rule on the correct interpretation of the
DSU
238, defects that could arise during panel compositi on are subject to judicial review by them. 239
The European Communities requests the Appellate Body to complete the analysis and to find that the
Panel's composition in this case was inconsistent with Articles 8.3 and 21.5 of the DSU.240
170. The United States responds that the European Communities' claim on the Panel's composition
did not fall within the Panel's jurisdiction. The United States argues that Article 21.5 does not
discipline the process of panel composition when rec ourse to the original panel is not possible.
Moreover, according to the United States, an im properly composed pane l would not have the
authority to make findings on the merits of the European Communities' claims, including on claims
related to its own composition.
171. Before examining the European Communities' appeal, we address first a preliminary matter
that was brought by the United States at the oral hearing concerning Exhibit EC-62, an exchange of
e-mails. Exhibit EC-62 was submitted to the Ap pellate Body as an attachment to a document
reflecting the opening statement made by the Europ ean Communities at the oral hearing. The United
States objected to the submission of Exhibit EC-62 and claimed that it is a new piece of evidence that
cannot be considered in the appellate proceed ings. The European Communities responded that
Exhibit EC-62 had already been transmitted to the A ppellate Body as part of the record of the Panel
proceedings because, under Rule 25(2) of the Working Procedures for Appellate Review , "[t]he
complete record of the panel proceeding includes ... the correspondence relating to the panel dispute
between the panel or the WTO Secretariat and the par ties to the dispute or the third parties". Having
examined the record of the Panel proceedings, tran smitted to the Appellate Body under Rule 25(1) of
the Working Procedures, we have found that it does not contain the exchange of e-mails referred to in
Exhibit EC-62. Accordingly, we conclude that E xhibit-62 is new evidence that cannot be considered
at the appellate stage.
172. On the substance of the European Communitie s' appeal, we note that, on 28 November 2007,
the Director-General was requested to determ ine the composition of the compliance panel under
Article 8.7 of the DSU. In our view, Article 8.7 confers on the Director-General the discretion to
compose panels, which was properly exercised in this case. We therefore find that the Panel did not
err in refraining, in paragraphs 8.17 and 9.1(a) of the Panel Report, from making a finding on whether

239European Communities' appellant's submission, paras. 31 and 32.

it was improperly composed. In the light of this conclusion, we do not consider it necessary to
address the other arguments made by the parties on this matter.
VI. The Panel's Terms of Reference
173. We turn next to the issues raised on appeal by the European Communities and by the United
States in its other appeal relating to the Panel's fi ndings on whether certain subsequent administrative,
changed circumstances, and sunset reviews (colle ctively, the "subsequent reviews") following the
15 original investigations and the 16 administrative reviews at issue in the original proceedings fell
within the Panel's terms of reference under Article 21.5 of the DSU.
174. Before the Panel, the United States made a re quest for a preliminary ruling on the grounds
that certain claims made by the European Comm unities in relation to the subsequent reviews (and
respective assessment instructions) were not within th e Panel's terms of reference. The United States
argued that the recommendations and rulings of th e DSB covered only the 15 original investigations
and the 16 administrative reviews that were at i ssue in the original proceedings. Therefore,
determinations made in the context of administrativ e, changed circumstances, and sunset reviews that
followed those specific measures were not "measures taken to comply" with the recommendations and
rulings of the DSB within the meaning of Article 21.5 of the DSU.241
175. The European Communities responded that all of the subsequent reviews listed in its request
for the establishment of a panel under Article 21.5 fell within the Panel's terms of reference either as
"amendments" to the original investigations and admini strative reviews at issue in the original
proceedings, or as " omissions" or " deficiencies" in the United States' implementation of the
recommendations and rulings of the DSB. Alternat ively, the European Co mmunities argued that the
subsequent reviews fell within the Panel's terms of reference in th e light of the close nexus that
existed between those subsequent reviews, the meas ures at issue in the original proceedings, and the
recommendations and rulings of the DSB.242
176. The Panel rejected the European Communities' claim that the s ubsequent reviews fell within
its terms of reference as "amendments" to the original measures at issue. 243 The Panel did not rule on
whether the subsequent reviews fell within its term s of reference as "omissions" or "deficiencies" in
the United States' implementation obligations 244, and found that only the subsequent reviews that
came into effect after the adoption of the DSB's recommendations and rulings had a sufficiently close

241Panel Report, paras. 8.18 and 8.33.
242Panel Report, para. 8.59.
243Panel Report, para. 8.80.
244Panel Report, para. 8.86.

nexus with the original measures at issue and th e recommendations and rulings of the DSB so as to
fall within its terms of reference under Article 21.5.
245 As a result of these findings, of the
56 subsequent reviews challenged by the Europ ean Communities, the Panel concluded that only
nine administrative reviews and five sunset reviews fell within its terms of reference.
177. On appeal, the European Communities claims that the Panel erred in so ruling. In particular,
the European Communities argues that the Panel erred: (i) in finding that the subsequent reviews did
not fall within its terms of reference as "amendments" to the original measures at issue; (ii) in finding
that the subsequent reviews that pre-dated the adoption of the recommendations and rulings of the
DSB did not fall within its terms of reference beca use they did not have a sufficiently close nexus
with the original measures at i ssue and the recommendations and ruli ngs of the DSB; and (iii) in
failing to address the European Communities' claim th at the subsequent reviews fell within the scope
of the compliance proceedings as "omissions" or "deficiencies" in the United States' implementation
of the recommendations and rulings of the DSB. The European Communities requests the Appellate
Body to reverse these findings and to find instead th at all the subsequent re views listed in its panel
request fell within the Panel's terms of reference under Article 21.5 of the DSU.
178. In its other appeal, the United States claims that the Panel erred in finding that the 2004-2005
administrative reviews in Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands
(Case 1) and Stainless Steel Wire Rod from Sweden (Case 6) (both issued after the end of the
reasonable period of time) had a sufficiently close ne xus with the original measures at issue and the
recommendations and rulings of the DSB so as to fa ll within the Panel's terms of reference. The
United States requests the Appellate Body to reverse this finding and to declare without legal effect
the Panel's finding that the United States failed to comply with the DSB's recommendations and
rulings and acted inconsistently with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of
the GATT 1994 in respect of those two specific administrative reviews.
179. We examine below the participants' allegations of error in turn. We begin in Section A with
the European Communities' appeal of the Panel's finding that the subsequent reviews did not fall
within its terms of reference under Article 21.5 of the DSU as "amendments" to the measures at issue
in the original proceedings. In Section B, we address the European Communities' and the United
States' challenges against different aspects of the Panel's findings that certain of the subsequent
reviews had a sufficiently close nexus with th e original measures at issue and with the
recommendations and rulings of the DSB so as to fall within its terms of reference under Article 21.5
of the DSU. Finally, in Section C, we turn to the European Communities' appeal of the Panel's

245Panel Report, paras. 8.115 and 8.121.

decision not to rule on the European Communities' cl aim that the subsequent reviews fell within the
Panel's terms of reference as "omissions" or "deficiencies" in the United States' implementation of the
recommendations and rulings of the DSB.
A. "Amendments" to the Original Measures at Issue
180. The European Communities' first ground of a ppeal raises the question of whether the
references in the original panel and Appellate Body reports and in the European Communities' panel
request in the original proceedings to "any amendm ents" to the original measures at issue encompass
any subsequent reviews enacted in the context of the anti-dumping duty orders covered in the original
proceedings. Before the Panel, the European Communities claimed that the recommendations and
rulings of the DSB in the original proceedings also covered amendments to the 15 original
investigations and the 16 administrative reviews at issue in those proceedings, and that the subsequent
reviews listed in its panel request under Article 21.5 fe ll within the Panel's terms of reference as such
"amendments".246
181. The Panel rejected the European Communities' argument and reas oned that references by the
original panel and the Appellate Body to "amendment s" could not be read so broadly as to encompass
any subsequent determinations issued under the re levant anti-dumping duty orders in the form of
subsequent reviews. 247 Rather, the Panel read the references to "amendments" to the original
measures at issue as referring to either corrections of clerical errors in the specific determinations
covered in the original proceedings, or to amendmen ts to those specific determinations as a result of
litigation in United States courts.248
182. In addition, the Panel noted that the manner in which the European Communities framed its
claims before the original panel indicated that its challenge focused on specific original investigations
and administrative reviews, including various "aspec ts" of those determinations, but did not include
any subsequent determinations issued by the US DOC in the context of the same anti-dumping duty
order.249 In this respect, the Panel noted that the Eu ropean Communities' panel request in the original
proceedings identified successive administrative re views issued under the same anti-dumping duty
order as separate and distinct measures, and not as "amendments" to other measures listed in the panel
request.250

246Panel Report, para. 8.61.
247Panel Report, para. 8.71.
248Panel Report, para. 8.72.
249Panel Report, para. 8.73.
250Panel Report, paras. 8.75 and 8.76.

183. On appeal, the European Communities claims that the Panel erred in finding that the
subsequent reviews did not fall under its terms of reference under Article 21.5 as "amendments" to the
measures at issue in the original proceedings. The European Communities argues that the Panel
improperly narrowed the context in which the term "any amendments" was used in the original
proceedings by focusing on the manner in which th e European Communities fram ed its claims in its
original panel request.
251 According to the European Comm unities, an examination of how the
measures at issue had been identified in the cour se of the original proceedings indicates that "any
amendments" to the 15 original investigations and the 16 administrative reviews would be covered by
the recommendations and rulings of the DSB.252
184. The United States responds that the Panel was correct in finding that the 56 subsequent
reviews identified in the European Communities' panel request were not "amendments" to the
15 original investigations and the 16 administrative re views at issue in the original proceedings. The
United States suggests that subsequent reviews ca nnot be properly characterized as "amendments" to
the original measure at issue, because they cove r different imports over a different period of time. 253
Therefore, a subsequent review cannot be considered to be th e same measure, unchanged in its
essence from the original investigation or a prio r assessment review, that "merely clarifies" the
original measure at issue. 254 The United States underscores furthe r that the European Communities'
original panel request did not refer to subsequent reviews as "amendments".
185. Initially, we observe that the European Commun ities is correct in noting that the original
panel and the Appellate Body described the measures at issue in the original proceedings as including
"any amendments" to those measures. The original panel described the 15 original investigations
challenged by the European Communities as "the 15 Notices of Final Determinations of Sales at Less
Than Fair Value, including any amendments
, and including all the Issues and Decision Memoranda to
which they refer, and all the Final Margin Program L ogs and Outputs to which they in turn refer, for
all the firms investigated; each of the 15 An ti-dumping Duty Orders; each of the assessment
instructions issued pursuant to any of the 15 Anti-dumping Duty Orders; and each of the USITC final
injury determinations." 255 Subsequently, in the "Findings" section of its report, the original panel
described the 15 original investigations at issue with reference to Panel Exhibits EC-1 through EC-15,

251European Communities' appellant's submission, paras. 62 and 71.
252European Communities' appellant's submission, paras. 64-70.
255Panel Report, para. 8.63 (quoting Original Panel Report, para. 2.6). (underlining added by the Panel)

and clarified that "[t]he measures at i ssue also include the anti-dumping duty order and any
amendments, including the assessment instructions, and the USITC injury determination".256
186. Similarly, the original panel described th e 16 administrative reviews challenged by the
European Communities as "the 16 Notices of Fina l Results of Antidumping Duty Administrative
Reviews, including any amendments, and including all the Issues and Decision Memoranda to which
they refer, and all the Final Margin Program Logs a nd Outputs to which they in turn refer, for all the
firms investigated; and each of the assessment instructions issued pursuant to any of the 16 Notices of
Final Results." 257 In the "Findings" section of its report, the original panel described the
16 administrative reviews challenged by the European Communities with reference to Panel Exhibits
EC-16 through EC-31, and noted that, "in addition to the Final Results of the administrative review,
the measures at issue include the amendments to these Final Results and that the Final Results of the
administrative review refers to the accompanying Issues and Decision Memorandum , which in turn
refers to the Margin Calculations, i.e., the Final Margin Program Log and Outputs for the firms
investigated, and to the assessment instructions."258
187. Having defined the specific measures challenge d by the European Communities in this
manner, the original panel consistently identif ied the 15 original investigations and the
16 administrative reviews at issue in the original proceedings by referring to the description outlined
above, including when making its findings a nd when issuing its final conclusions and
recommendations.259
188. The Appellate Body, in turn, also described the 15 original investigations and the
16 administrative reviews at issue with reference to Panel Exhibits EC-1 through EC-15 and EC-16
through EC-31, respectively.260
189. The European Communities' allegation of error on appeal raises the question of whether the
references in the original panel and Appellate Body reports to "any amendments" can be read so
broadly as to encompass subsequent reviews issu ed under the specific anti-dumping duty orders at
issue in the original proceedings.

(emphasis added)
257Panel Report, para. 8.63 (quoting Original Panel Report, para. 2.6). (emphasis added by Panel)
(underlining added by Panel)
259See Panel Report, paras. 8.66 and 8.67 (referring to Original Panel Report, paras. 7.32, 7.142 and
footnote 235 thereto, 7.223 and footnote 305 thereto, 7.224 and footnote 306 thereto, 7.248 and footnote 335
thereto, 7.284 and footnote 372 thereto, 7.286 and footnote 375 thereto, and 8.1(a), (d), and (f)).
260See Appellate Body Report, US – Zeroing (EC) , footnote 9 to para. 2(b) and footnote 11 to
para. 2(c).

190. In Chile – Price Band System , the Appellate Body sought to determine whether an
amendment to Chile's price band system was part of th e measure at issue in that dispute. First, the
Appellate Body observed that Argentina's panel requ est referred to the particular measures at issue
"and/or amendments".
261 The Appellate Body reasoned that th e "broad scope of the Panel request
suggests that Argentina intended the request to cover the measure even as amended."262 Secondly, the
Appellate Body observed that the amendment of the measure at issue "[did] not change the price band
system into a measure different from the price band system that was in force before the
[a]mendment."263 The Appellate Body reasoned that, despite subsequent modifications, Chile's price
band system "remain[ed] essentially the same" after the amendment, because the amendment
modified Chile's price band system "without changing its essence".
264
191. Like the Appellate Body in Chile – Price Band System , we read references by the European
Communities, the original panel, and the Appellate Bo dy in this dispute to "any amendments" to the
specific measures at issue in the or iginal proceedings as addressing s ituations where subsequent legal
instruments would modify these measures without changing their essence or effects. 265 In our view, if
a subsequent modification were to change the essence or substance of the measures challenged in the
original proceedings, this would transform those me asures into measures that were different from the
original measures.
192. In this respect, we consider that successive administrative, changed circumstances, and sunset
review determinations issued in connection with the measures at issue in the original proceedings
constitute separate and distinct measures, which th erefore cannot be properly characterized as mere
"amendments" to those measures. We note that the Appellate Body recently held in US – Continued
Zeroing that "[t]he successive determinations by which duties are mainta ined are connected stages ...
involving imposition, assessment, and collection of duties under the same anti-dumping order." 266
Although the Appellate Body recognized that s ubsequent reviews are "connected stages" under the

261Appellate Body Report, Chile – Price Band System , para. 135. (emphasis added by Appellate Body
removed)
262Appellate Body Report, Chile – Price Band System, para. 135.
263Appellate Body Report, Chile – Price Band System , para. 137. (original emphasis) The Appellate
Body also cited with approval the reasoning of the panel in Argentina – Footwear (EC) , which decided to
examine modifications made to the measure at issue in that dispute because they were " modifications of the
legal form of the original definitive measure, which remains in force in substance and which is the subject of the
complaint." (See ibid, para. 138 (quoting Panel Report, Argentina – Footwear (EC), para. 8.45) (emphasis added
by the Appellate Body))
264Appellate Body Report, Chile – Price Band System, para. 139. (original emphasis)
265In Chile – Price Band System, the Appellate Body addressed the question of whether amendments to
Chile's price band system that were issued during the course of the panel proceedings were part of the measure
at issue in that appeal.
266Appellate Body Report, US – Continued Zeroing, para. 181.

same anti-dumping duty order, it also made clea r that subsequent reviews involve "successive
determinations". Such successive determinations, in our view, do not constitute mere "amendments"
to the immediately preceding measure, because they constitute distinct determinations.
193. Moreover, as the Panel correctly observed, the European Communities itself seemed to
identify, before the original panel, determinations made in the subsequent reviews issued under the
same anti-dumping duty order as distinct measures. 267 Indeed, the European Communities' original
panel request identifies as separate "Cases" admini strative reviews that superseded the original
investigations at issue in three instances. 268 It also identified as separate "Cases" successive
administrative reviews under the same anti-dumping duty order in five instances. 269 The European
Communities argues that it decided to separate origin al investigations and administrative reviews into
different "Cases" in order to allow for a separat e examination of those measures and due to the
structure of its claims (separate "as such" and "as app lied" claims in relation to original investigations
and administrative reviews, respectively). We ar e not persuaded. If the European Communities'
references to "any amendments" also encompassed successive administrative reviews issued under the
same anti-dumping duty order, it would not have been necessary for the European Communities to list
successive reviews under the same anti-dumping duty order as separate "Cases", because the Panel's
findings in relation to the original measure woul d automatically cover subsequent administrative
reviews.
194. In view of the above considerations, we see no e rror in the Panel's conclusion that references
to "any amendments" to the specifi c measures at issue in the original proceedings "must be read as
referring to amendments ... to correct the orig inal investigation and administrative review

267Panel Report, paras. 8.74-8.76.
268The 2000-2001 administrative review in Certain Stainless Steel Plate in Coils from Belgium
(Case 18), the 1999-2000 and 2000-2001 administrative reviews in Stainless Steel Sheet and Strip in Coils from
France (Cases 25 and 26), and the 1999-2000 and 2000-2001 administrative reviews in Stainless Steel Sheet and
Strip in Coils from Italy (Cases 21 and 22) were all identified as separate "Cases", even though they had been
issued in connection with original investigations that were also challenged by the European Communities
(Cases 9, 10, and 11, respectively).
269Cases 19 and 20 concern the 1999-2000 and 2000-2001 administrative reviews in Certain Pasta
from Italy; Cases 21 and 22 concern the 1999-2000 and 2000-2001 administrative reviews in Stainless Steel
Sheet and Strip in Coils from Italy ; Cases 23 and 24 concern the 1999-2000 and 2000-2001 administrative
reviews in Granular Polytetrafluoroethylene Resin from Italy ; Cases 25 and 26 concern the 1999-2000 and
2000-2001 administrative reviews in Stainless Steel Sheet and Strip in Coils from France ; and Cases 27 and 28
concern the 1999-2000 and 2000-2001 administrative reviews in Stainless Steel Sheet and Strip in Coils from
Germany.

determinations specifically identified by the European Communities ... for ministerial or similar errors
or, in some cases, to amend the determination following US court rulings."
270
195. For these reasons, we uphold the Panel's finding, in paragraph 8.80 of the Panel Report, that
the subsequent reviews identified in the European Communities' panel request did not fall within the
Panel's terms of reference under Ar ticle 21.5 of the DSU as "amendment s" to the original measures at
issue.
B. Close Nexus Analysis
196. We turn next to the European Communities' and the United States' challenges to different
aspects of the Panel's finding as to which of the subsequent reviews identified in the European
Communities' panel request fell with in its terms of reference under Ar ticle 21.5 of the DSU by virtue
of their close nexus, in terms of nature, effects, and timing, with the original measures at issue and
with the recommendations and rulings of the DSB.
1. Scope of Compliance Proceedings under Article 21.5 of the DSU
197. Both the European Communities' appeal and the United States' other appeal raise the question
of whether and to what extent subsequent admini strative, changed circumstances, and sunset review
determinations that followed the specific 15 original investigations and the 16 administrative reviews
at issue in the original proceedings could have fallen within the Panel's terms of reference under
Article 21.5 of the DSU.
198. Article 21.5 of the DSU provides, in relevant part:
Where there is disagreement as to the existence or consistency with a
covered agreement of measures taken to comply with the
recommendations and rulings such dispute shall be decided through
recourse to these dispute settlement procedures, including whenever
possible resort to the original panel. (emphasis added)
199. The text of Article 21.5 indicates that proceedings under that provision concern a
disagreement as to the "existence" or "consiste ncy with a covered agreement" of measures "taken to
comply" with the recommendations and rulings of th e DSB in the original proceedings. Thus, the
mandate of panels acting pursuant to Article 21.5 of the DSU encompasses, in principle, the specific

270Panel Report, para. 8.72. (footnote omitted) This reading is confirmed by the ordinary meaning of
the word "amendment"—defined as "removal of fault or errors", "reformation", "correction", "emendation".
(See The New Shorter Oxford English Dictionary , 4th edn, L.
 Brown (ed.) (Clarendon Press, 1993), Vol. 1,
p. 65)

measures "taken to comply" with the recommendati ons and rulings of the DSB and measures that
should have been taken to achieve complian ce. As the Appellate Body explained in Canada –
Aircraft (Article 21.5 – Brazil):
Proceedings under Article 21.5 do not concern just any measure of a
Member of the WTO; rather, Article 21.5 proceedings are limited to
those "measures taken to comply with the recommendations and
rulings" of the DSB. In our vi ew, the phrase "measures taken to
comply" refers to measures whic h have been, or which should be,
adopted by a Member to bring about compliance with the
recommendations and rulings of the DSB.
271 (original emphasis)
200. The first sentence of Article 21.5 establishes an "express link" between the measures taken to
comply and the recommendations and rulings of the DSB. 272 For this reason, a panel's determination
of the scope of measures "taken to comply" under Article 21.5 "must also i nvolve examination of the
recommendations and rulings contained in the original report(s) adopted by the DSB." 273 These
recommendations and rulings, in turn, must be interp reted in the light of the particular factual and
legal circumstances in the original proceedings, incl uding the original measures at issue. As the
Appellate Body noted, "[b]ecause such recommendati ons and rulings are directed at the measures
found to be inconsistent in the original pr oceedings, such an examination necessarily involves
consideration of those original measures."274
201. Thus, on its face, Article 21.5 seems to suggest that the mandate of a compliance panel is
limited to reviewing the existence or consistenc y with the covered agreem ents of measures taken
"in the direction of , or for the purpose of achieving , compliance" 275 by the implementing Member.
The scope of the measures "taken to comply", in tu rn, should be determined with reference to the
recommendations and rulings of the DSB in the origin al proceedings and to the original measures at
issue.
202. However, the Appellate Body also expressed the view that a panel's mandate under
Article 21.5 of the DSU is not necessarily limited to measures that the implementing Member
maintains are taken "in the direction of" or "f or the purpose of achieving" compliance with the
recommendations and rulings of the DSB. Rather, the Appellate Body considered that a panel's
mandate under Article 21.5 may extend to measures that the implementing Member maintains are not

271Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil), para. 36.
272Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 68.
273Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 68.
274Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para. 68. (footnote
omitted)
275Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para. 66. (original
emphasis)

"taken to comply" with the recommendations and ru lings of the DSB. Indeed, the Appellate Body
explained in US – Softwood Lumber IV (Article 21.5 – Canada) that, under its interpretation of
Article 21.5:
The fact that Article 21.5 mandates a panel to assess "existence" and
"consistency" tends to weigh agains t an interpretation of Article 21.5
that would confine the scope of a panel's jurisdiction to measures that
move in the direction of , or have the objective of achieving ,
compliance. These words also sugg est that an examination of the
effects of a measure may also be relevant to the determination of
whether it constitutes, or forms part of, a "measure[] taken to
comply".
276 (original emphasis)
203. On the basis of this interpretation, the Appellate Body concluded that a panel's mandate under
Article 21.5 is not limited to the measures that an implementing Member maintains are "taken to
comply" with the recommendations and rulings of the DSB. Although a Member's designation of a
measure as one "taken to comply" will always be relevant, the Appellate Body explained that:
[s]ome measures with a particularly close relationship to the
declared "measure taken to comp ly", and to the recommendations
and rulings of the DSB , may also be susceptible to review by a panel
acting under Article 21.5. Determin ing whether this is the case
requires a panel to scrutinize these relationships, which may,
depending on the particular facts, call for an examination of the
timing, nature, and effects of the various measures. This also
requires an Article 21.5 panel to examine the factual and legal
background against which a declared "measure taken to comply" is
adopted. Only then is a panel in a position to take a view as to
whether there are sufficiently close links for it to characterize such an
other measure as one "taken to comply" and, consequently, to assess
its consistency with the covered agreements in an Article 21.5
proceeding.
277 (emphasis added)
204. Thus, the Appellate Body confirmed that a Me mber's designation of a measure as one "taken
to comply" with the recommendations and rulings of the DSB is not determinative of the panel's
mandate under Article 21.5 of the DSU. The Ap pellate Body also held that measures with a
"particularly close relationship" with the decl ared measure "taken to comply", and to the
recommendations and rulings of the DSB, may also fall within the purview of a compliance panel.
This is because Article 21.5 mandates a panel to examine the existence a nd consistency with the
covered agreements of measures taken to comply, wh ich suggests that the effects of another measure
may be relevant in determining whether it falls within the scope of Article 21.5 proceedings.
According to the Appellate Body, a panel's determination of whether such a "close relationship" exists

276Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 67.
277Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 77.

will depend upon the particular factua l and legal background, and may call for an examination of the
timing, nature, and effects of the various measures before the panel.
205. A panel's determination of whethe r a particular measure falls within the scope of Article 21.5
proceedings is an objective inquiry and must necessarily involve an examination of any measure
designated as one "taken to comply", and of the r ecommendations and rulings of the DSB, in the light
of the particular factual and legal background in whic h they are adopted. In determining the scope of
its jurisdiction, the compliance panel may also be called upon to determine whether no measure taken
to comply exists, as the word "existence" in Ar ticle 21.5 suggests "that measures falling within the
scope of Article 21.5 encompass not only positive acts, but also omissions."
278 Therefore, if measures
to comply with the DSB's recommendations and ruli ngs were not taken, that omission will also fall
within the scope of the compliance proceedings.
206. Where a compliance panel determines that measu res taken to comply do exist, it should then
seek to determine whether such measures fully im plement the recommendations and rulings of the
DSB. Pursuant to Article 19.1 of the DSU, th ese recommendations and rulings require the Member
concerned to bring the measures found to be inconsis tent with a covered agreement into conformity
with that agreement. Therefore, the compliance panel should seek to determine whether the measures
taken to comply achieve full or partial compliance "in situations where the measures taken to comply,
through omissions or otherwise, may achieve only partial compliance." 279 Article 21.5 also requires
the compliance panel to examine, in the light of the claims raised, whether the measures taken to
comply are consistent with the relevant covered ag reement, as the word "consistency" in Article 21.5
"implies that panels acting pursuant to Article 21.5 must objectively assess whether new measures are,
in fact, consistent with relevant obligations under the covered agreements."280
207. Furthermore, a party seeking recourse to Article 21.5 of the DSU may request the compliance
panel to examine measures that the implementing Member maintains are not measures "taken to
comply". In that event, the compliance panel should seek to determine whether such distinct
measures are particularly closely connected to the measures the implementing Members asserts are
"taken to comply", and to the recommendations a nd rulings of the DSB, so as to fall within the

278Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para. 67. (original
emphasis)
279Appellate Body Report, US – FSC (Article 21.5 – EC II), para. 60.
280Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para. 67. Similarly, the
Appellate Body held in EC – Bed Linen (Article 21.5 – India) that "the mandate of Article 21.5 panels is to
examine either the 'existence' of 'measures taken to comply' or, more frequently, the ' consistency with a covered
agreement' of implementing measures." (Appellate Body Report, EC – Bed Linen (Article 21.5 – India), para. 79
(original emphasis))

purview of the compliance panel.
281 Determining whether this is the case may call for an examination
of the timing, nature, and effects of the various measures.282 Once a compliance panel determines that
such closely connected measures fall within its terms of reference, Article 21.5 directs it to examine
these measures for consistency with the relevant provi sions of the covered agreements in the light of
the claims raised.
2. Application of Article 21.5 of the DSU by the Panel
208. In applying this analytical framework, we ex amine whether the Panel in this case erred in
determining the scope of measures that should fall within its terms of reference under Article 21.5 of
the DSU. We begin with an examination of th e recommendations and rulings of the DSB in the
original proceedings, as reflected in the original panel and Appellate Body reports. Those reports
contained, inter alia, the following findings, as relevant for the purposes of these proceedings.
− The zeroing methodology, as it relates to original investigations in which the weighted
average-to-weighted average comparison methodology ("model zeroing" 283) is used to
calculate margins of dumping, is inconsis tent "as such" with Article 2.4.2 of the Anti-
Dumping Agreement.284
− The United States acted inconsistently with Article 2.4.2 of the Anti-Dumping Agreement by
applying zeroing in the weighted average-to-weighted average comparison methodology
(model zeroing) in 15 specific original investigations.
285
− The United States acted inconsistently with Article 9.3 of the Anti-Dumping Agreement and
Article VI:2 of the GATT 1994 by applying zer oing in the weighted average-to-transaction
comparison methodology ("simple zeroing"286) in 16 specific administrative reviews.287
209. Following the adoption of the recommendations and rulings of the DSB on 9 May 2006, the
United States took the following actions, as relevant for the purposes of these proceedings.

281We observe that, in EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 –
US), the Appellate Body found that the fact that the "Understanding on Bananas" was itself a measure "taken to
comply" did not require the panel to determine whether it had a "particularly close relationship" to the declared
measure taken to comply and the DS B's recommendations and rulings. (See Appellate Body Reports, EC –
Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US), para. 252)
282Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 77.
283For a description of the "model zeroing" methodology, see supra, para. 159.
284Appellate Body Report, US – Zeroing (EC), paras. 222 and 263(b).
285Original Panel Report, paras. 7.32 and 8.1(a).
286For a description of the "simple zeroing" methodology, see supra, para. 161.
287Appellate Body Report, US – Zeroing (EC), paras. 135 and 263(a)(i).

− On 27 December 2006, the United States announced that it would terminate the use of "model
zeroing" in original investigations in whic h the weighted average-to-weighted average
comparison methodology is used. The modification became effective on 22 February 2007
and concerned all pending and future original investigations as of that date.288
− On 1 March 2007, the USDOC initiated proceedin gs pursuant to Section 129 of the Uruguay
Round Agreements Act289 (the "URAA") covering 12 of the 15 original investigations at issue
in the original proceedings (three anti-dumping duty orders had been pr eviously revoked).
On 9 April 2007, the USDOC issued Section 129 determinations in which it recalculated,
without zeroing, the margins of dumping for 11 of the original investigations at issue in the
original proceedings. The results of those S ection 129 determinations became effective on
23 April 2007. The remaining Section 129 de termination was issued on 20 August 2007,
effective on 31 August 2007. The recalculati on without zeroing of the margins of dumping
for the exporters concerned led to the revoca tion of two anti-dumping duty orders. For the
remaining 10 original anti-dumping duty orders , margins of dumping recalculated without
zeroing continued to be applied (as the new cash deposit rate) with respect to imports made
subsequent to the date the respective Section 129 determination came into effect.290
− With respect to the 16 administrative reviews at issue in the original proceedings, the United
States considered that the cash deposit rat es calculated in those proceedings—with one
exception—were no longer in effect because they had been superseded by subsequent
administrative reviews. Therefore, the United States considered that no further action was
required in order to implement the DSB's reco mmendations and rulings in relation to those
administrative reviews.
291
− The United States also issued sunset review de terminations with respect to some of the
measures at issue in the original proceed ings. On 7 March 2007, following negative
likelihood of continuation or recurrence of inju ry determinations by the USITC, the USDOC
revoked anti-dumping duty orders in four Cases.292

288Panel Report, para. 3.1(a).
289Section 129 of the Uruguay Round Agreements Act, Public Law No. 103-465, 108 Stat. 4836,
United States Code, Title 19, Section 3538 (2000).
290Panel Report. para. 3.1(b) (referring to European Communities' first written submission to the Panel,
para. 41).
291Panel Report, para. 3.1(d) (referring to United Stat es' first written submission to the Panel, para. 21;
and Panel Exhibit US-17).
292Panel Report, para. 3.1(e).

210. Given the above, the United States claimed befo re the Panel to have achieved full compliance
with the recommendations and rulings of the DSB in re lation to the 15 original investigations at issue
in the original proceedings by issuing Section 129 determinations in which it recalculated, without
zeroing, the margins of dumping for those original investigations for which, at that time, anti-dumping
duty orders had not been revoked for reasons other than zeroing. With respect to the
recommendations and rulings of the DSB as they relate to the 16 administrative reviews at issue in the
original proceedings, the United States asserted that the cash deposit rates established in those reviews
"were no longer in effect because they had been s uperseded by subsequent administrative reviews",
with the result that "no further action was taken by the United States in order to implement the DSB
recommendations and rulings in respect of these administrative review determinations."
293 In support
of this allegation, the United States provided the Pa nel with a list of the subsequent reviews that
superseded the reviews challenged in the original proceedings.294
211. However, the European Communities sought to include in the Panel's terms of reference
40 administrative review determinations and 16 su nset review determinations issued subsequent to
the 15 original investigations and 16 administra tive reviews covered in the original proceedings. 295
These are measures that the United States maintains were not "taken to comply" with the
recommendations and rulings of the DSB. 296 The European Communities argued that these
subsequent reviews should neverthel ess fall within the Panel's terms of reference by virtue of their
"close nexus" with the original measures at issue and the recommendations and rulings of the DSB.
The European Communities argues that these revi ews "perpetuate the WTO-inconsistent anti-
dumping measure[s] beyond the end of the reasonable period of time".297
212. The Panel found that the subsequent reviews id entified by the European Communities in its
panel request potentially fell within the scope of the compliance proceedings because of their close
nexus, in terms of nature and effects, with the original measures at issue and the recommendations

293Panel Report, para. 3.1(d) (referring to United St ates' first written submission to the Panel, para. 21;
and Panel Exhibit US-17).
294Panel Report, footnote 44 to para. 3.1(d) (referring to Panel Exhibit US-17).
295See Annex A to Request for the Establishment of a Panel by the European Communities,
WT/DS294/25, Panel Report, Annex A-1. See also Panel Report, para. 8.58. The European Communities also
challenged two changed circumstances review determinations issued subsequently to Cases 17 and 24 before the
original panel. Such changed circum stances reviews were not specifically addressed by the Panel, because the
Panel considered them to be of "limited relevance" in its assessment of the United States' implementation of the
recommendations and rulings of the DSB, to the extent that their only effect was to "change the company whose
exports are subject to the anti-dumping duties". (See Panel Report, footnote 660 to para. 8.107)
296Panel Report, para. 8.33.
297European Communities' appellee's submission, para. 34. (emphasis and footnote omitted)

and rulings of the DSB.298 The Panel noted that successive determinations of different types are made
in the context of a single trade remedy proceedi ng, involving the imposition and assessment of duties
on imports of a particular subject product, from the same country, and under a particular anti-dumping
duty order. These determinations form part of a continuum of events that are all "inextricably
linked".299 The Panel reasoned that zeroing was the only aspect of the subsequent reviews that was
challenged by the European Communities, which was al so the precise issue that was challenged in the
original proceedings and the subject of the recommendations and rulings by the DSB.300 According to
the Panel, while the original panel's and Appellate Body's findings of inc onsistency were made under
different legal provisions, they were premised on the same fundamental obligation under the Anti-
Dumping Agreement , following from the definition of the term "margin of dumping" under the
covered agreements, in particular, Article VI :1 of the GATT 1994 and Article 2.1 of the Anti-
Dumping Agreement.301 The Panel added that the subsequent reviews "potentially affect or undermine
the steps otherwise taken—or the steps that should have been taken—by the United States to comply
with the recommendations and rulings of the DSB, notably in the form of Section 129
determinations."
302
213. However, the Panel found that the subsequent reviews that took place before the adoption of
the DSB's recommendations and rulings in the origin al proceedings did not have a sufficiently close
nexus, in terms of timing, with the original measures at issue and with the recommendations and
rulings of the DSB, and therefore did not fall within its terms of reference.303 The Panel reasoned that,
"as a matter of logic ... a measure taken before the adoption of the DSB's recommendations and
rulings could rarely, if ever, be found to be a me asure taken 'to comply' with such recommendations
and rulings."304
214. On this basis, the Panel concluded that only th e subsequent reviews issued after the date of
the adoption of the recommendations and rulings of the DSB would have a sufficiently close nexus, in
terms of nature, effects, and timing, with the or iginal measures at issue and the recommendations and
rulings of the DSB. As a result, the Panel concl uded that, out of the 56 s ubsequent determinations

298Panel Report, para. 8.118. In its analysis, the Panel referred to the "nexus-based" analysis developed
by the panels in Australia – Salmon (Article 21.5 – Canada) , Australia – Leather II (Article 21.5 – US) , and
US – Upland Cotton (Article 21.5 – Brazil) , as well as by the Appellate Body in US – Softwood Lumber IV
299Panel Report, para. 8.103.
300Panel Report, para. 8.104.
301Panel Report, para. 8.106.
302Panel Report, para. 8.118(b).
303Panel Report, para. 8.119.
304Panel Report, para. 8.115. (footnote omitted)

challenged by the European Communities, only nine administrative reviews and five sunset reviews
fell within its terms of reference under Article 21.5 of the DSU.
305
215. On appeal, the European Communities submits th at the Panel erred in excluding from its
terms of reference the subsequent reviews that were issued before the adoption of the DSB's
recommendations and rulings. In its other appeal, the United States challenges the Panel's finding that
the 2004-2005 administrative reviews in Certain Hot-Rolled Carbon Steel Flat Products from the
Netherlands (Case 1) and Stainless Steel Wire Rod from Sweden (Case 6) (both issued after the end of
the reasonable period of time) fell with in its terms of reference by virt ue of their close nexus with the
original measures at issue and the recommendati ons and rulings of the DSB in the original
proceedings.
216. Both the European Communities and the United States claim that the Panel erred in its
application of the "nexus-based test" as outlined above to the facts of th is dispute. We address in turn
the allegations of error made by each party in relatio n to the Panel's analysis of the links, in terms of
nature, effects, and timing, between the subsequent reviews, th e declared measures taken to comply,
and the recommendations and rulings of the DSB. We begin by examining the European
Communities' claim that the Panel erred in finding that the subsequent reviews that pre-dated the
adoption of the DSB's recommendations and rulings did not fall within its terms of reference because
they did not have a sufficiently close nexus, in terms of timing, with the recommendations and rulings
of the DSB. Subsequently, we address the United Stat es' other appeal of the Panel's finding that the
2004-2005 administrative reviews in Cases 1 and 6 (bot h issued after the end of the reasonable period
of time) fell within its terms of refe rence based on the links, in terms of nature, effects, and timing,
between these two measures, the declared measure s taken to comply, and the recommendations and
rulings of the DSB.
3. The European Communities' Appeal of the Panel's "Close Nexus" Analysis
(a) Timing
217. We begin with the European Communities' clai m that the Panel erred in excluding certain
subsequent reviews from the scope of these compliance proceedings on the basis that they pre-dated
the adoption of the recommendations and rulings of the DSB made on 9 May 2006.

305Panel Report, para. 8.126.

218. Both the European Communities and the United St ates agree that the timing of a measure is
not determinative of whether there is a sufficiently close nexus between such measure, the declared
measure "taken to comply", and the recommendations and rulings of the DSB.306
219. However, the participants diverge as to the significance of the timing of the subsequent
reviews for the Panel's "close nexus" analysis. The European Communities suggests that the Panel
erred in mechanistically excluding from its terms of reference the subsequent reviews issued before
the adoption of the recommendations and rulings of the DSB, b ecause the challenged subsequent
reviews "perpetuate[d]" the WTO-inconsistent measures beyond the end of the reasonable period of
time.307
220. The United States responds that the Panel corr ectly excluded the subsequent reviews that
pre-dated the adoption of the recommendations and ru lings of the DSB from its terms of reference,
because these reviews were not "taken to comply" with recommendations and rulings that did not yet
exist.308 The United States adds that the Panel erred in including in its terms of reference the 2004-
2005 administrative reviews in Cases 1 a nd 6, simply because they were issued after the adoption of
the recommendations and rulings of the DSB. A ccording to the United States, timing alone cannot
justify the inclusion of the 2004-2005 administrati ve reviews in the Panel' s terms of reference,
because "it will always be the case that administrativ e reviews following modifications to original
investigations made in order to comply with DS B recommendations and rulings will be issued after
the adoption of the DSB recommendations and rulings."309
221. The Panel justified its decision to exclude from its terms of reference the subsequent reviews
challenged by the European Communities that we re issued before the adoption of the DSB's
recommendations and rulings as follows:
One would expect, as a matter of logic, that a measure taken before
the adoption of the DSB's recommenda tions and rulings could rarely,
if ever, be found to be a measure taken "to comply" with such
recommendations and rulings. As a result, it would normally follow
that only those subsequent review s that were decided after such
adoption could be taken into cons ideration as part of a compliance
panel's examination of the impl ementation of DSB recommendations
and rulings. The European Communities has not convinced us that a
different conclusion is warranted in the present dispute.

306European Communities' appellant's submission, para. 91; United States' other appellant's
submission, para. 83.
307European Communities' appellee's submission, para. 34. (original emphasis)
309United States' other appellant's submission, para. 83.

Conversely, measures adopted following the adoption of the DSB's
recommendations may have a close link with the DSB's
recommendations and rulings and with the steps, if any, taken by the
implementing Member to achieve compliance with the
recommendations and rulings, and ther efore warrant inclusion in the
scope of an Article 21.5 proceeding. In our view, the application of a
nexus-based test should primarily aim at bringing within the scope of
the compliance dispute measures that potentially circumvent
implementation or undermine measures officially taken to comply.
310
(footnotes omitted)
222. At the outset, we agree with the Panel that measures taken to comply with recommendations
and rulings of the DSB ordinarily post-date the adoption of the recommendations and rulings. 311 As
the Appellate Body noted in US – Softwood Lumber IV (Article 21.5 – Canada) , "[a]s a whole,
Article 21 deals with events subsequent to the DSB's adoption of recommendations and rulings in a
particular dispute."312
223. However, the Panel's finding that "a measu re taken before the adoption of the DSB's
recommendations and rulings could rarely, if ever, be found to be a measure taken 'to comply' with
such recommendations and rulings" 313 seems premised on the notion that a panel's mandate under
Article 21.5 is limited to those measures taken "in the direction of" or "for the purposes of achieving"
compliance with the recommendations and rulings of the DSB. As we have noted earlier, in the
Appellate Body's interpretation, "[t]he fact that Article 21.5 mandates a panel to assess 'existence' and
'consistency' tends to weigh against an interpretati on of Article 21.5 that would confine the scope of a
panel's jurisdiction to measures that move in the direction of , or have the objective of achieving ,
compliance."314 For this reason, measures with a "particul arly close relationship" with the declared
measures "taken to comply", and to the recommendations and rulings of the DSB, may also fall within
the scope of a panel proceeding under Article 21.5 of the DSU, even though such measures are not,
strictly speaking, measures taken with the purpose of achieving compliance with those
recommendations and rulings.
224. In this respect, we agree with the European Communities and the United States that the timing
of a measure cannot be determinative of whether it bears a sufficiently close nexus with a Member's
implementation of the recommendations and rulings of the DSB so as to fall within the scope of an

310Panel Report, paras. 8.115 and 8.116.
311Panel Report, para. 8.115.
312Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para. 70. (original
emphasis)
313Panel Report, para. 8.115. (footnote omitted)
314Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para. 67. (original
emphasis)

Article 21.5 proceeding.315 Since compliance with the recommendations and rulings of DSB can be
achieved before the recommendations and rulings of the DSB are adopted316, a compliance panel may
have to review events pre-dating the adoption of those recommendations and rulings in order to
resolve a disagreement as to the "existence" or "consistency with a covered agreement" of such
measures. Indeed, the United States argued before the Panel that it did not have to take further action
to implement the recommendations and rulings of the DSB in respect of the administrative reviews at
issue in the original proceedings, because they were superseded by subsequent administrative reviews
that pre-dated the adoption of the DSB's recommendations and rulings. 317 We also note the United
States' argument that, where a measure is withdraw n prior to the DSB's recommendations and rulings,
a Member may not need to take any further measures to comply with those recommendations and
rulings after they are adopted.
318 We do not see why a compliance panel should be unable to take
such prior withdrawal into account.
225. We consider that the timing of a measure rema ins a relevant factor in determining whether
they are sufficiently closely co nnected to a Member's implementation of the recommendations and
rulings of the DSB.319 Indeed, the fact that a measure is a dopted simultaneously with, shortly before,
or shortly after specific actions introduced by Members with a view to implementing the
recommendations and rulings of the DSB may provid e support for a finding that those measures are
closely connected. Conversely, there might be situ ations where the fact that the alleged "closely
connected" measure was taken a considerable time before the adoption of the recommendations and
rulings of the DSB will be sufficient to sever th e connection between that measure and a Member's
implementation obligations.
226. In our view, the Panel's formalistic reliance on th e date of issuance of the subsequent reviews
in ascertaining whether these reviews had a close nexus with the recommendations and rulings of the
DSB was in error. The relevant inquiry was not wh ether the subsequent reviews were taken with the
intention to comply with the recommendations and rulings of the DSB; rather, in our view, the
relevant inquiry was whether the subsequent reviews, despite the fact that they were issued before the

315European Communities' appellant's submission, para. 91; United States' other appellant's
submission, para. 83.
316In that vein, we note the stat ement by the United States in US – Gambling (Article 21.5 – Antigua
and Barbuda) that "compliance need not necessarily occur subsequent to the DSB recommendation and rulings,
as a WTO Member might modify or remove measures at issue after establishment of a panel but prior to
adoption of the panel or Appellate Body report." (Panel Report, US – Gambling (Article 21.5 – Antigua and
Barbuda), para. 5.11)
317See Panel Exhibit US-17.
319See Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para. 84; Panel
Report, Australia – Salmon (Article 21.5 – Canada) , para. 7.10(22); and Panel Report, Australia – Automotive

adoption of the recommendations and rulings of the DSB, still bore a sufficiently close nexus, in
terms of nature, effects, and timing, with those recommendations and rulings, and with the declared
measures "taken to comply", so as to fall within the scope of Article 21.5 proceedings.
227. Accordingly, we reverse the Panel's finding, in paragraph 8.119 of the Panel Report, that
"none of the subsequent reviews challenged by th e European Communities that were decided before
the adoption of the DSB's recommendations and rulings fall within our terms of reference".
320
228. Having reversed the Panel's finding that th e subsequent reviews that were issued before the
adoption of the DSB's recommendations and rulings did not have a sufficiently close nexus with those
recommendations and rulings, and with the declared me asures "taken to comply", so as to fall within
its terms of reference under Article 21.5 of the DSU, we examine next whether any of those reviews
fall within the scope of these compliance proceedings.
229. As we have noted earlier, in determini ng whether measures that are ostensibly not "taken to
comply" with the recommendations and rulings of the DSB have a particularly close connection to the
declared measure "taken to comply", and to the recommendations and rulings of the DSB, a panel is
required to scrutinize the links, in terms of nature, effects, and timing, between those measures, the
declared measures "taken to comply", and the recomme ndations and rulings of the DSB. Only then is
a panel in a position to determine whether there are sufficiently close links for it to characterize such
other measures as "taken to comply" and, conseque ntly, to assess their consis tency with the covered
agreements.
321 Accordingly, we examine the links, in terms of nature, effects, and timing, between the
subsequent reviews excluded by the Panel from its terms of reference ("the excluded subsequent
reviews"), the declared measures "taken to comp ly", and the recommendations and rulings of the
DSB.
230. In our view, the use of zeroing in the excluded subsequent reviews provides the necessary
link, in terms of nature or subject matter, between such meas ures, the declared measures "taken to
comply", and the recommendations and rulings of the DSB. All the excluded subsequent reviews
were issued under the sa me respective anti-dumping duty order as the measures challenged in the
original proceedings, and therefore constitute d "connected stages ... involving the imposition,
assessment and collection of duties under the same anti-dumping order". 322 Moreover, as the Panel
correctly noted, the issue of zeroing was the precise subject of the recommendations and rulings of the
DSB, the only aspect of the original measures th at was modified by the United States in its

320Underlining and footnote omitted.
321Appellate Body Report, US – Softwood Lumber IV (Article 21.5- Canada), para. 77.
322Appellate Body Report, US – Continued Zeroing, para. 181.

Section 129 determinations, and is the only aspect of the excluded subsequent reviews challenged by
the European Communitie s in these proceedings. 323 These pervasive links, in our view, weigh in
favour of a sufficiently close nexus, in terms of nature or subject matter, between the excluded
subsequent reviews, the declared measures "taken to comply", and the recommendations and rulings
of the DSB, insofar as the use of zeroing is concerned.
231. With respect to the links, in terms of effects, between the excluded subsequent reviews, the
declared measures "taken to comply", and the r ecommendations and rulings of the DSB, we have a
more mixed picture. Many of the excluded subs equent reviews are administrative reviews that
generated assessment rates calculated with zeroi ng, and replaced the cash deposit rates that were
found to be WTO-inconsistent in the original pr oceedings, either as a result of an original
investigation or an administrative review, with ca sh deposit rates calculated with zeroing in such
subsequent reviews. Therefore, to the extent th at these administrative reviews generated assessment
rates and cash deposit rates calculated with zeroing th at replaced those found to be WTO-inconsistent
in the original proceedings with the effects of assessment rates and cash deposit rates that continued to
reflect the zeroing methodology, this would provide a sufficient link, in terms of effects, between
those administrative reviews and the recommendati ons and rulings of the DSB, insofar as the
requirement to cease using the zeroing methodology is concerned.
232. However, with respect to the 15 original inv estigations subject to the recommendations and
rulings of the DSB, the United States issued Sect ion 129 determinations in which it recalculated
margins of dumping without zeroing that served as the basis for the going-forward cash deposit rates
for the relevant anti-dumping duty orders. This r ecalculation without zeroing replaced the effects of
the cash deposits calculated with zeroing in previous administrative reviews with the effects of cash
deposits calculated without zeroing. Consequently, to the extent that the effects of the administrative
and sunset reviews excluded from the Panel's terms of reference were replaced with those of a
subsequent Section 129 determination in which zeroing was not applied, those subsequent reviews
would generally not have the necessary link, in terms of effects, with the declared measures "taken to
comply", and with the recommendations and rulings of the DSB, so as to fall within the Panel's terms
of reference.
233. Likewise, with respect to the 16 administrative reviews covered in the original proceedings,
subsequent administrative reviews provided assessmen t rates calculated with zeroing, and generated
cash deposit rates based on zeroing that replaced the e ffects of the administrative reviews found to be
WTO-inconsistent in those proceedings. As we have noted earlier, such assessment rates and cash

323See Panel Report, para. 8.104.

deposit rates calculated with zeroing provided a sufficiently close link, in terms of effects, between
such subsequent reviews and the recommendations a nd rulings of the DSB, insofar as the requirement
to cease using the zeroing methodology is concerned. Administrative reviews could also have an
effect on the United States' implementation of the recommendations and rulings of the DSB after the
end of the reasonable period of time to the extent that the respective anti-dumping duty orders had
been continued as a result of a sunset review in each of those Cases. Accordingl y, to the extent that
sunset review determinations led to the continuation of the relevant anti-dumping duty orders, which
in turn provided the legal basis for the continue d imposition of assessment rates and cash deposits
calculated with zeroing in subsequent administrativ e reviews with continued effects after 9 April
2007, these sunset reviews had a sufficiently close link, in terms of effects, with the recommendations
and rulings of the DSB. These are the sunset reviews in Granular Polytetrafluoroethylene Resin from
Italy (Case 24), Stainless Steel Sheet and Strip in Coils from Germany (Case 28), Ball Bearings and
Parts Thereof from France (Case 29), Ball Bearings and Parts Thereof from Italy (Case 30), and Ball
Bearings and Parts Thereof from the United Kingdom (Case 31).
324
234. Finally, with respect to the links, in terms of timing, between the excluded subsequent
reviews, the declared measures "taken to comply", and the recommendations and rulings of the DSB,
we have articulated above the reasons for which we do not consider the fact that they were issued
before the adoption of the recommendations and ru lings of the DSB to be determinative. In
particular, the fact that the likelihood-of-dumping determinations in the sunset reviews listed above
pre-date the adoption of the recommendations and ru lings of the DSB is not sufficient to sever the
pervasive links that we have found to exist, in terms of nature and effects, between such sunset
reviews, the recommendations and rulings of the DSB, and the declared measures "taken to comply".
235. Accordingly, we find that the sunset reviews in Cases 24, 28, 29, 30, and 31 had a sufficiently
close nexus with the declared measures "taken to comply", and with the recommendations and rulings
of the DSB, so as to fall within the Panel's terms of reference under Article 21.5 of the DSU.
4. The United States' Other Appeal of the Panel's "Close Nexus" Analysis
(a) Nature
236. In its other appeal, the United States argues that the Panel erred in finding that there are
sufficiently close links, in terms of nature, between the original investiga tions at issue in the original

324These sunset reviews were excluded from the sc ope of these compliance proceedings because the
relevant likelihood-of-dumping determinations by the USDOC had been made before the adoption of the DSB's
recommendations and rulings in the original proceedings.

proceedings and the 2004-2005 administrative review s in Cases 1 and 6. We recall that these
administrative reviews were issued on 22 June 2007 and 9 May 2007 respectively, that is, after the
reasonable period of time had expired on 9 April 2007.
237. The United States argues that the Panel erred in finding that successive determinations of
different types made in the context of a single trade remedy proceeding "form part of a continuum of
events and measures that are all inextricably linked".
325 For the United States, a "closer connection
between the declared measure taken to co mply and the alleged additional measure" 326 must exist for
the latter to fall within the scope of Article 21. 5 proceedings, because by definition administrative
reviews will usually have the same product and countr y coverage as the original investigation. In
addition, the United States argues that the recommend ations and rulings of the DSB with regard to
zeroing in original investigations are different from the recommendations and rulings made by the
DSB in relation to zeroing in administrative revi ews. The United States contends that the Panel
ignored the fact that the recommendations and ru lings of the DSB concerning Cases 1 and 6 apply
exclusively to the use of zeroing in aggregating weighted average-to-weighted average comparisons
in original investigations. The United States emphasizes that there are no DSB recommendations and
rulings related to the use of zeroing in weighted average-to-transaction comparisons "as applied" in
the 2004-2005 administrative reviews in Cases 1 and 6.327
238. The European Communities responds that the Pa nel correctly limited its analysis "to the
question of whether the use of zeroing in the calcu lation of margins of dumping in the subsequent
reviews bears a sufficiently close nexus ... to the findings of the pa nel and Appellate Body in the
original dispute so as to warrant ... consideration of that precise aspect of the subsequent reviews". 328
Thus, according to the European Co mmunities, the use of zeroing is the element closely connecting
the subsequent reviews with the original measures and the recommendations and rulings of the DSB.
Moreover, the European Communities dispels con cerns raised by the United States that the
recommendations and rulings of the DSB in this dispute only applied to the use of weighted
average-to-weighted average zeroing in the original investigations in Cases 1 and 6. The European
Communities submits that zeroing under different co mparison methodologies and in different stages
of anti-dumping proceedings simply reflect "different manifestations of a single rule or norm." 329 The
European Communities underscores that the use of zeroing in subsequent administrative reviews

325Panel Report, para. 8.103.
326United States' other appellant's submission, para. 76.
327United States' other appellant's submission, para. 78.
329European Communities' appellee's submission, para. 27 (quoting Appellate Body Report, US –
Zeroing (Japan), para. 88).

would undermine the United States' implementation of the recommendations and rulings of the DSB
with respect to the original investigations in Cases 1 and 6.
239. At the outset, we agree with th e United States that identity in terms of product and country
coverage alone would be an insufficient basis for determining that the 2004-2005 administrative
reviews in Cases 1 and 6 have a sufficiently close nexus, in terms of nature, with the
recommendations and rulings of the DSB with respect to the original investigations in those Cases.
The Appellate Body recognized in US – Softwood Lumber IV (Article 21.5 – Canada) that not "every
assessment review will necessarily fall within th e jurisdiction of an Article 21.5 panel."
330 However,
in this particular case, we consider that the u se of zeroing in the 2004-2005 administrative reviews in
Cases 1 and 6 establishes a link in terms of nature or subject matter between those reviews, the
recommendations and rulings of the DSB, and the d eclared measures "taken to comply"—that is, the
Section 129 determinations in those Cases.
240. Both the original investigations and the 2004- 2005 administrative reviews in Cases 1 and 6
involve the same products from the same countries; they occurred under the same anti-dumping duty
orders, and thus form part of a contin uum of events under the provisions of the Anti-Dumping
Agreement and pursuant to the municipal law of the United States. Each of these proceedings
involved the calculation of a margin of dumping, e ither for the purposes of establishing the existence
of dumping and the initial cash deposit rate of the es timated dumping duty liability, or for the final
assessment of dumping duty liability on past entries. 331 In each instance, the use of the zeroing
methodology arose in the context of calculating estimated margins of dumping for particular
exporters, or assessment rates for particular importers.
241. We see no error in the Panel's finding that the use of zeroing in the calculation of margins of
dumping "is the only aspect of the subsequent re views that is challenged by the European
Communities; it is also the precise issue that was challenged in the original dispute, and which was
the subject of the DSB rulings and recommendations." 332 We also agree with the Panel's statement
that, where the Appellate Body made findings of inco nsistency under different legal provisions in the
original proceedings, they were premised on the same fundamental obligations under the Anti-
Dumping Agreement, following from the definition of the term "margin of dumping" in Article 2.1 of
the Anti-Dumping Agreement and Article VI:2 of the GATT 1994.333

330Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 93.
331The 2004-2005 administrative reviews in Cases 1 and 6 did not establish cash deposit rates because
the anti-dumping duty orders were revoked.
332Panel Report, para. 8.104.
333Panel Report, para. 8.106.

242. We find significant that the use of zeroing w as the only aspect of the original measures at
issue that was corrected by the United States in response to the recommendations and rulings of the
DSB. Indeed, the Section 129 determinations in C ases 1 and 6, which are the United States' declared
measures "taken to comply", simply recalculated—without zeroing—the margins of dumping
calculated in the original proceedings. This, in our view, tends to confirm the close nexus, in terms of
subject matter and nature, between the declared measures "taken to comply", the recommendations
and rulings of the DSB in the original proceed ings, and the use of zeroing in the 2004-2005
administrative reviews in Cases 1 and 6.
243. The United States distinguishes the facts in US – Softwood Lumber IV (Article 21.5 –
Canada) from those in these proceedings, alleging that in that dispute the same "pass-through"
methodology was applied in the original measure at is sue, the Section 129 determination, and the first
assessment review. By contrast, in the present proceedings, the recommendations and rulings of the
DSB applied exclusively to the use of zeroing in weighted average-to-weighted average comparisons
in the original investigations in Cases 1 and 6, a nd did not contain "as applied" findings in relation to
the application of zeroing in weighted averag e-to-transaction comparisons in the 2004-2005
administrative reviews in Cases 1 and 6.
244. Whilst the distinctions between comparison methodologies are not insignificant, we do not
consider them to be decisive as to the links, in terms of nature or subject matter, between these
reviews, the declared measures "taken to comply", and the recommendations and rulings of the DSB.
In our view, the use of zeroing in the original investigations and in the 2004-2005 administrative
reviews in Cases 1 and 6 similarly involved treatin g as zero the results of comparisons for which the
export price(s) exceeded the normal value when th ese results were aggregated. We also note the
Appellate Body's statement in US – Softwood Lumber IV (Article 21.5 – Canada) that differences
between original investigations and administrative reviews in countervailing duty cases do not prevent
the latter from falling within the scope of compliance proceedings, and that municipal law
classifications and differences in legal bases for original investigations and assessment reviews are not
determinative in WTO dispute settlement.
334
245. We note, furthermore, the Appellate Body's finding in US – Continued Zeroing that the use of
zeroing in "successive determinations" under the sam e anti-dumping duty order constitutes a measure
that is challengeable in WTO dispute settleme nt. If the zeroing method ology in "successive
determinations" "involving the imposition, assessme nt and collection of duties under the same
anti-dumping duty order" in original investigations, administrative reviews, and sunset reviews is

334See Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 82.

challengeable as a measure in original proceedings, th is suggests that the subsequent reviews at issue
in this case, in which that zeroing methodology is a pplied, are sufficiently connected in nature or
subject matter so as to fall within the scope of these Article 21.5 proceedings.
335
246. These considerations, in our view, weigh in favo ur of a sufficiently close nexus, in terms of
nature, between the 2004-2005 admini strative review determinations in Cases 1 and 6, the declared
measures taken to comply, and the recommendations a nd rulings of the DSB, insofar as the use of
zeroing is concerned.
(b) Effects
247. The United States also argues that the Panel erred in finding that the 2004-2005
administrative reviews in Cases 1 and 6 had a sufficiently close nexus, in terms of effects, with the
original measures at issue and the recommendations and rulings of the DSB so as to fall within the
Panel's terms of reference under Artic le 21.5 of the DSU. The United States' challenge in this respect
focuses on the following statement by the Panel concerning the effect of the subsequent reviews:
[T]he use by the USDOC of zeroing in the calculation of margins of
dumping in the context of a "subsequent" administrative review
potentially negates action taken by the United States in the form of a
Section 129 determination recalculating the margin of dumping from
the original investigation in order to implement the DSB's
recommendations in respect of that original investigation, as it
(i) allows for the assessment of anti-dumping duties at a rate that is
based on zeroing, inconsistent with the provisions of the Anti-
Dumping Agreement , despite alleged implementing action to
eliminate such zeroing, and (ii) replaces the rate established in the
original investigation (and any new rate established as a result of the
implementation of the DSB recommendations and rulings) with a
new cash deposit rate calculated with zeroing.
336 (footnote omitted)
248. The United States argues that this finding is in error, for two reasons: first, because the Panel
treated zeroing as a "unitary phenomenon", despite th e fact that the recommendations and rulings of
the DSB did not apply to the 2004-2005 administra tive reviews in Cases 1 and 6; and, secondly,
because the results of the 2004-2005 administrative reviews in Cases 1 and 6 had no effect on the
"continued validity and effect"
337 of the United States' declared me asures "taken to comply". The
United States explains that the Section 129 determin ations in Cases 1 and 6 led to the revocation of
the underlying anti-dumping duty orders on 23 April 2007, with the result that the supervening
2004-2005 administrative reviews did not establish cash deposit rates applicable to entries occurring

335Appellate Body Report, US – Continued Zeroing, para. 181.
336Panel Report, para. 8.108.
337United States' other appellant's submission, paras. 63 and 64.

after that date. Therefore, the United States su bmits that the 2004-2005 administrative reviews in
Cases 1 and 6 did not undermine the "existence" of the measures taken to comply, within the meaning
of Article 21.5 of the DSU.
249. The European Communities responds that the calculation of assessment rates based on
zeroing after the end of the reasonable period of time in the 2004-2005 administrative reviews in
Cases 1 and 6 demonstrates that these reviews had an effect on the United States' implementation,
because they "perpetuate the WTO-inconsiste nt anti-dumping measure beyond the end of the
reasonable period of time."338
250. With respect to the first allegation of error advanced by the United States, we articulated
above the reasons why we do not attribute the same significance that the United States does to the fact
that the recommendations and rulings of the DSB did not extend to the 2004-2005 administrative
reviews in Cases 1 and 6. The 2004-2005 administ rative reviews in Cases 1 and 6, as well as the
original investigations in those two Cases, involve d zeroing, albeit in the context of a distinct anti-
dumping proceeding. In addition, the effects of the application of zeroing in those distinct
proceedings did not vary significantly: in disr egarding the results of comparisons for which the
export price(s) exceeded the normal value, the use of zeroing led to an inflation of the margins of
dumping calculated in those proceedings either to derive the estimated cash deposit rates for the
exporters, or the assessment rates for the importe rs. Thus, the use of zeroing in subsequent
determinations could unde rmine implementation in respect of or iginal investigations. Although the
Appellate Body noted in US – Softwood Lumber IV (Article 21.5 – Canada) that there are some limits
on the scope of compliance proceedings, "these limits should not allow circumvention by Members by
allowing them to comply through one measure, wh ile, at the same time, negating compliance through
another."339
251. In respect of the United States' arguments that original investigations and administrative
reviews are distinct proceedings and serve distinct purposes, we recall that the Appellate Body has
considered that successive determinations under a single anti-dumping duty order form part of a
continuum of events. 340 The Appellate Body has also clarified that "zeroing ... under different
comparison methodologies, and in different stages of anti-dumping proceedings ... simply reflect[s]

338European Communities' appellee's submission, para. 34. (emphasis and footnote omitted)
339Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 71.
340See Appellate Body Report, US – Zeroing (EC), paras. 132 and 133. We agree with the Panel that,
where the Appellate Body made findings in the original dispute under different legal provisions, they were
premised on the same fundamental obligations under the Anti-Dumping Agreement , following from the
definition of the term "margin of dumping" in Article 2.1 of that Agreement and Article VI:2 of the GATT
1994. (Panel Report, para. 8.106)

different manifestations of a single rule or norm."
341 Although weighted average-to-weighted
average, weighted average-to-transaction, and transaction-to-transaction comparison methodologies
are distinct and used in different contexts i nvolving different calculations, and may be used for
different finalities, they have in common that they lead to inflated amounts if negative comparison
results are disregarded or treated as zero when these comparison results are aggregated in the
calculation of margins of dumping, cash deposit rat es, and assessment rates. What the DSB found to
be inconsistent in the original proceedings was th e treatment of negative comparison results as zero;
the use of the weighted averag e-to-weighted average comparison methodology was not found to be
inconsistent. Indeed, the Anti-Dumping Agreement refers to various comparison methodologies (for
example, weighted average-to-weighted average, tr ansaction-to-transaction, and weighted average-to-
transaction) and their use was not found to be inconsis tent in the original proceedings. Therefore, the
analysis of compliance with the DSB's recommenda tions and rulings should focus on what was found
to be inconsistent (that is, zeroing) and not on what was not found to be inconsistent (that is, the use
of a particular comparison methodology in a particular stage of the proceedings). In any event, we
fail to see how a subsequent administrative review using zeroing could not be relevant for assessing,
in an Article 21.5 proceeding, whether an original investigation found to be inconsistent due to
zeroing has been brought into conformity. In our view, whether negative comparison results have
been disregarded in subsequent reviews may have an effect on determining whether the original
measure, which was found to be inconsistent becau se such comparison results were disregarded, has
been brought into conformity.
252. Neither are we persuaded by the United Stat es' argument that the 2004-2005 administrative
reviews in Cases 1 and 6 had no bearing on the compliance achieved by the United States in those two
Cases. Even though the United States is correct in pointing out that the Section 129 determinations in
Cases 1 and 6 led to the revocation of the unde rlying anti-dumping duty orders for entries after
23 April 2007, the fact remains that the 2004-2005 administrative reviews established assessment
rates calculated with zeroing, despite the fact that they were issued on 22 June 2007 and 9 May 2007,
respectively, that is, after the expiration of the reasonable period of time on 9 April 2007. In our
view, the use of zeroing to calculate assessment rates in administrative reviews issued after the end of
the reasonable period of time is an indication that these reviews could undermine the compliance
allegedly achieved by the United States. Indeed , the Section 129 determinations do not apply to
entries prior to the end of the reasonable period of time and thus do not relate to compliance with
respect to administrative reviews issued after the end of the reasonable period covering imports
occurring before that date.

341Appellate Body Report, US – Zeroing (Japan), para. 88.

253. We note that, in US – Stainless Steel (Mexico) , the Appellate Body noted that "permit[ting]
simple zeroing in periodic reviews would allow WTO Members to circumvent the prohibition of
zeroing in original investigations". 342 This was so because, in the first periodic review after an
original investigation, the duty assessment rate for each importer would take effect from the date of
the original imposition of anti-dumping duties. Thus, "[w]hen the initial cash deposit rate is
calculated in the original investigation without using zeroing, this means that the mere act of
conducting a periodic review would introduce zeroi ng following imposition of the anti-dumping duty
order."343 The Appellate Body, therefore, made it cl ear that the use of zeroing in subsequent
administrative reviews would allow Members to circ umvent the prohibition of zeroing in original
investigations.
254. In this respect, we observe that the United States' argument that the 2004-2005 administrative
reviews in Cases 1 and 6 had no effect on its impl ementation of the recommendations and rulings of
the DSB is predicated on the United States having achieved full compliance with the
recommendations and rulings of the DSB with the i ssuance of the Section 129 determinations in those
Cases, an allegation that the European Comm unities contests. According to the European
Communities, the United States' implementation oblig ations were not limited to imports taking place
after the end of the reasonable period of time, but also encompassed "any positive acts" after that date,
such as the final collection of duties on unliquidate d entries made before the end of the reasonable
period of time. Thus, following the United States' logic, the Panel would not have been in a position
to determine whether the 2004-2005 administrative re views in Cases 1 and 6 fell within its terms of
reference without determining, first, whether th e Section 129 determinati ons achieved substantive
compliance with the recommendations and rulings of the DSB.
255. The United States distinguishes the fact s of this case from the facts in US – Softwood
Lumber IV (Article 21.5 – Canada) , where the panel and Appellate Body found it significant that
(i) the administrative review resulted in a cash deposit rate that superseded the revised cash deposit
rate established in the Section 129 determination, a nd (ii) a particular aspect of the analysis in the
administrative review was made "in view of" th e recommendations and rulings of the DSB in the
original proceedings in relation to that type of analysis. The United States submits that neither of
those elements is present in this dispute.
344

342Appellate Body Report, US – Stainless Steel (Mexico), para. 109.
343Appellate Body Report, US – Stainless Steel (Mexico), para. 109.
344United States' other appellant's submission, para. 58.

256. In our view, the United States misinterpret s the findings of the Appellate Body in US –
Softwood Lumber IV (Article 21.5 – Canada) as requiring that the "closely connected" measures
actually undermine the compliance otherwise achieved by the implementing Member. We consider
that, at the time of the jurisdictional inquiry into its terms of reference, a panel might not be in a
position to determine whether this is the case, because it will not be possible to determine whether the
"connected" measures potentially undermine complia nce without determining first whether the
declared measures "taken to comply" fully achieved compliance with the recommendations and
rulings of the DSB. We note in this respect that the Section 129 determinations apply to entries
occurring after 23 April 2007; they do not cover entries occurring before that date. Therefore,
administrative review determinations issued afte r the end of the reasonable period of time covering
entries made prior to that date are relevant for assessing compliance with the DSB's recommendations
and rulings, even though they do not concern those entries to which the Section 129 determinations
will apply. To find otherwise would limit compliance proceeding to examining whether closely
connected measures affect compliance achieved by the declared measures "taken to comply";
situations where a Member has taken measures ach ieving only partial compliance, or has omitted to
take measures, would be excluded from scrutiny. As we have found earlier, the scope of Article 21.5
proceedings is not limited in such a way. Theref ore, our review under Artic le 21.5 of the 2004-2005
administrative reviews in Cases 1 and 6 is not constr ained by the fact that these reviews did not set
going-forward cash deposit rates
345, because this does not change the fact that the 2004-2005
administrative reviews assess final anti-dumping liabilit y with zeroing after the end of the reasonable
period of time.
257. We address in section VIII of this Re port the question of whether the 2004-2005
administrative reviews in Cases 1 and 6 constituted a failure by the United States to comply with the
recommendations and rulings of the DSB. At the ju risdictional level, however, we consider that the
fact that these reviews were issued after the end of the reasonable period of time and led to the
assessment of duties with zeroing indicates that these reviews had effects after the end of the
reasonable period of time, and that those eff ects could have undermined the United States'
implementation of the recommendations and rulings of the DSB with respect to Cases 1 and 6.
258. Given the above, we consider that the 2004-2 005 administrative reviews in Cases 1 and 6 had
a sufficiently close nexus, in terms of nature, effects, and timing, with the declared measures "taken to
comply", and with the recommendations and rulings of the DSB, so as to fall within the Panel's terms
of reference under Article 21.5 of the DSU. Accordingly, we uphold the Panel's findings, in

345As noted above, to the extent that the Section 129 determinations set cash deposit rates for certain
exporters, these apply only to entries after 23 April 2007.

paragraph 8.126(i) and (v) of the Panel Report, th at the 2004-2005 administrative reviews in Cases 1
and 6 fell within the Panel's terms of reference.
5. Separate Opinion
259. One Member of the Division wishes to set out a separate opinion concerning the United
States' appeal of the Panel's finding that the 2004- 2005 administrative reviews in Cases 1 and 6 fell
within its terms of reference under Article 21.5 of the DSU by virtue of their close nexus, in terms of
nature, effects, and timing, with the declared measures taken to comply, and the recommendations and
rulings of the DSB.
260. For Cases 1 and 6, the recommendations and rulin gs of the DSB relate to the use, in the
context of original investigations, of a methodol ogy referred to by the European Communities as
"model zeroing" which the panel and the Appellate Body found to be inconsistent with Article 2.4.2
of the Anti-Dumping Agreement. The European Communities' challe nge in the original proceedings
was limited to claims against the original inv estigations of dumping made in these two Cases.
Importantly, these DSB recommendations and rulings di d not extend to the use, in the context of
administrative reviews, of a different methodolog y, referred to by the European Communities as
"simple zeroing" that the Appellate Body found to be inconsistent with Article 9.3 of the Anti-
Dumping Agreement and Article VI:2 of the GATT 1994. As such, the compliance obligation of the
United States with respect to the recommendations and rulings of the DSB in relation to Cases 1 and 6
was to cease applying the "model zeroing" methodology whenever it conducts original investigations
to determine the existence of dumping and to establish initial cash deposit rates.
261. In order to implement the recommendations and rulings of the DSB in Cases 1 and 6, the
United States initiated proceedings under Sec tion 129 of the URAA in which the USDOC
recalculated the margin of dumping challenged in th e original investigation without using the "model
zeroing" methodology. As a result of the recalculation, the anti-dumping duty order in these two
cases was revoked. The recalculation of the margins of dumping made in the Section 129
determination and the consequent revocation of the anti-dumping duty order constitute the declared
measures "taken to comply" by the United States and, at least in appearance, these actions of the
United States respond to the recommendations and rulings of the DSB.
262. However, the analysis does not necessarily end at an examination of these "declared"
measures if, in certain circumstances, there ex ist other measures taken by the responding WTO
Member that share a particularly close nexus to these declared measures and which may undermine or

negate their impact on compliance with the reco mmendations and rulings of the DSB. As the
Appellate Body noted in US – Softwood Lumber IV (Article 21.5 – Canada):
Some measures with a particularly close relationship to the declared
"measure taken to comply," and to the recommendations and rulings
of the DSB, may also be susceptib le to review by a panel acting
under Article 21.5. Determining whether this is the case requires a
panel to scrutinize these relationships, which may, depending on the
particular facts, call for an examination of the timing, nature and
effects of the various measures. This also requires an Article 21.5
panel to examine the factual a nd legal background against which a
declared "measure taken to comply" is adopted.
In my view, the "close nexus test" needs to be applie d with some circumspection by panels, at the risk
of overly broadening the scope of proceedings under Article 21.5 of the DSU and the compliance
obligations related thereto to measures that sh are only a limited link to the recommendations and
rulings of the DSB, and to the measures that a Me mber takes to implement those rulings. This is
particularly so because Article 21.5 of the DSU requires panels to examine the measures taken to
comply for consistency with the covered agreements . The "close nexus" analysis also needs to be
applied in a holistic manner, so that a panel co mes to a conclusion based on a careful weighing and
balancing of all of the close nexus factors—nature , effects, and timing—so as to reach an overall
finding that these other measures do indeed have a sufficiently close link to the declared measures
"taken to comply", and to the recommendations and ru lings of the DSB, so as to justify their inclusion
within the scope of Article 21.5 proceedings.
263. Here, the issue is whether the 2004-2005 a nd the 2005-2006 administrative reviews and their
use of "simple zeroing" have a sufficiently close nexus, in terms of nature, effects, and timing, with
the Section 129 determinations recalculating or iginal dumping determinations without "model
zeroing" such that those administrative reviews ma y undermine or negate the compliance achieved by
the Section 129 determinations. The examination, as called for in US – Softwood Lumber IV
(Article 21.5 – Canada) of the "factual and legal background" of the Section 129 determinations,
begins with appraising the system in which these tw o types of determinations are made and the two
methodologies of zeroing are applied.
264. In examining the connection between the d eclared measures to comply (Section 129
determinations), the other measures (the admi nistrative reviews), and the recommendations and
rulings of the DSB regarding the methodology of zeroing, the central overlap is that both involve the
use of zeroing—that is the treatment of export pri ces that exceed normal values as zero rather than as
a negative number. However, because the "model zeroi ng" applied in original investigations involves
aggregating the results of weighted average no rmal value to weighted average export price

comparisons done across different models of th e product, while the "simple zeroing" involves
aggregating transaction specific comparisons across individual importers, the comparisons involve
different types of calculations. As such, while th ere are some similarities in the two methodologies,
there are also significant differences. "Model zeroing" and "simple zeroing" are also used in different
contexts (original investigations versus administra tive reviews) and are subject to different legal
obligations of the Anti-Dumping Agreement (Article 2.4.2 versus Article 9.3). Moreover, eliminating
"model zeroing" involves, as a remedy, a basic recal culation to establish new dumping margins, while
eliminating "simple zeroing" may involve redistri buting the effects of dumping calculations among
the importers found to be dumping from those found to have "negative" margins, suggesting that the
effect of the two methodologies is different as well.
265. In examining the two measures at issue—the or iginal investigation that the Section 129
determination mirrors and the administrative reviews, it appears that they are distinct proceedings that
serve different purposes. Whereas, pursuant to Article 5.1 of the Anti-Dumping Agreement , the
original investigation aims "to determine the existence, degree and effect of any alleged dumping", the
main purpose of an administrative review is to assess the final anti-dumping dut y liability, consistent
with Article 9.3 of the Anti-Dumping Agreement.
346 In the anti-dumping system of the United States,
no duty liability is assessed in the context of the origin al investigation and, in this respect, assessment
reviews and original investigations are fundamentally different.
266. Although "simple zeroing" and "model zeroing" ar e distinct methodologies used in different
contexts involving different calcu lations and pursuing different finalities, they have in common that
both inflate the margins of dumping by disregarding negative comparison results. In US – Stainless
Steel (Mexico) , the Appellate Body established a link be tween "simple zeroing" in administrative
reviews and "model zeroing" in original investigati ons through the calculation and the application of
cash deposits:
[A] reading of Article 9.3 of the Anti-Dumping Agreement that
permits simple zeroing in peri odic reviews would allow WTO
Members to circumvent the prohibition of zeroing in original
investigations that applies under the first sentence of Article 2.4.2 of
the Anti-Dumping Agreement . This is because, in the first periodic
review after an original investig ation, the duty assessment rate for
each importer will take effect from the date of the original imposition
of anti-dumping duties. Consequently, zeroing would be introduced
although it is not permissible in original investigations. We further
note that, if no periodic review is requested, the final anti-dumping
duty liability for all importers will be assessed at the cash deposit rate
applicable to the relevant exporter. When the initial cash deposit rate

346United States' other appellant's submission, paras. 35 and 36.

is calculated in the original inves tigation without using zeroing, this
means that the mere act of conducting a periodic review would
introduce zeroing following imposition of the anti-dumping duty
order.
347
Thus, the reasoning of the Appellate Body in US – Stainless Steel (Mexico) , notwithstanding the fact
that it was not an Article 21.5 compliance proceedi ng, suggests that the benefits for exporters and
importers of cash deposit rates calculated in an original investigation without zeroing could be
undermined or negated if zeroing were used in subsequent administrative reviews for establishing new
going-forward cash deposit rates.
267. This is not however the situation in Cases 1 and 6. In Case 1, the final duty liability for
entries in the period 2004-2005 was assessed in an admi nistrative review, the final results of which
were issued on 22 June 2007. The anti-dumping duty order, however, was revoked pursuant to a
Section 129 determination issued on 9 April 2007 a nd effective as of 23 April 2007. As a result, no
forward cash deposit rates were established in the 20 04-2005 administrative review. In addition, the
2005-2006 administrative review was rescinded on 30 March 2007, with the implication that it did not
result in the issuance of new going-forward cash deposit rates. With respect to Case 6, the final duty
liability for entries in the period 2004-2005 was assessed in an administra tive review that was
concluded on 9 May 2007 by the publication of am ended final results. The anti-dumping duty order
was, however, revoked pursuant to the Section 129 determination issued on 9 April 2007 and effective
as of 23 April 2007. Consequently, as the Panel found, cash deposits paid on imports of stainless steel
wire rod from Sweden made on or after 23 Ap ril 2007 were refunded, and no cash deposit was
imposed on imports of stainless steel wire rod fro m Sweden following the issuance of the amended
final results of the 2004-2005 administrative review . For both Cases 1 and 6, since no cash deposit
rates reflecting zeroing were set further to th e 2004-2005 administrative reviews (as well as the
rescission of the 2005-2006 administrative review in Case 1), their final results cannot, in my opinion,
undermine or negate the impact of the declared me asure taken to comply, that is, the Section 129
determination and the consequent revocation of the anti-dumping duty order.
268. In US – Softwood Lumber IV (Article 21.5 – Canada) , the Appellate Body focused on the
effects of the first assessment review in the cash deposit rate that was calculated in the
Section 129 determination taken by the United St ates to implement the DSB's recommendations and
rulings. The Appellate Body reasoned that:

347Appellate Body Report, US – Stainless Steel (Mexico), para. 109.

[t]he First Assessment Review also directly affected the Section 129
Determination because the cash deposit rate resulting from the
Section 129 Determination (which reflected a small reduction due to
pass-through analysis contained therein) was "updated", or
"superseded", by the cash deposit rate resulting from the First
Assessment Review (which reflected no reduction from the pass-
through analysis contained therein). Even if, as the United States
argues, modification of the cash deposit rate was not the purpose of
the First Assessment Review, it was undeniably an effect.
348 (original
emphasis)
Thus, to the extent that the Section 129 determin ations led to the revocation of the underlying anti-
dumping duty orders, the 2004-2005 administrative re views in Cases 1 and 6 had no bearing on the
cash deposit rates that they would have otherwise "u pdated" or "superseded" in those Cases. Rather,
the results of the 2004-2005 administrative reviews merely had a retrospective effect, which was the
establishment of final anti-dumping duty liability for importers on entries taking place long before the
end of the reasonable period of time.
269. In reasoning that "the fact remains that the 2004-2005 administrative reviews established
assessment rates calculated with zeroing d espite the fact that they were issued" 349 after the end of the
reasonable period of time, the majority overlooks the fact that the revocation of the anti-dumping duty
orders in Cases 1 and 6 demonstrates that those meas ures have been terminated, and that the results of
the 2004-2005 administrative reviews in those cases does not affect imports taking place subsequent
to their termination. The fact that assessment rates in Cases 1 and 6 will be issued after the end of the
reasonable period of time is merely a natural con sequence of the fact that, in the United States'
retrospective system for assessment of anti-du mping duties, the importers' final liability for
anti-dumping duties is established following a detailed review process that necessarily occurs
sometime after the date of importation. Moreover, I recall that, with respect to Cases 1 and 6, the
recommendations and rulings of the DSB concern orig inal investigations in which, contrary to
administrative reviews, no anti-dumping duties are assessed. Given that there are no cash deposits
linking the administrative reviews to the recommendati ons and rulings of the DSB, or the Section 129
determinations, I do not see how assessment rates applied to a set of past entries can establish a close
nexus between the administrative reviews and the recommendations and rulings of the DSB or the
declared measures "taken to comply".
270. Accordingly, I do not see how it can be concluded, in the light of the Appellate Body Reports
in US – Softwood Lumber IV (Article 21.5 – Canada) and US – Stainless Steel (Mexico) , that the

348Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 85.
349See supra, para. 252.

administrative reviews in Cases 1 and 6 (including the rescission of the 2005-2006 administrative
review in Case 1) have a close nexus with th e recommendations and rulings of the DSB or the
declared measures "taken to comply", and fall within the Panel's terms of reference. Since I do not
consider that the scope of these Article 21.5 pr oceedings can properly be expanded to include
compliance obligations with respect to measure s for which there were no recommendations and
rulings by the DSB, I do not consider it appropriate to make further findings with respect to Cases 1
and 6.
C. "Omissions" or "Deficiencies" in the United States' Implementation
271. The Division turns next to the European Commun ities' challenge against the Panel's exercise
of judicial economy in relation to its claim that the subsequent reviews fell within the Panel's terms of
reference as "omissions" or "deficiencies" in the United States' implementation of the
recommendations and rulings of the DSB.
272. Before the Panel, the European Communities argue d that the subsequent reviews identified in
its panel request fell within the Panel's terms of reference under Article 21.5 of the DSU as
"omissions" or "deficiencies" in the United States' implementation of the DSB's recommendations and
rulings.
273. The Panel did not consider it necessary to address the European Communities' argument
separately in the context of its jurisdictional analysis . The Panel reasoned that its analysis of whether
the subsequent reviews were measures taken to comp ly because they were closely connected with the
original measures at issue and the DSB's recommend ations and rulings was conducted "in view of the
fact that our authority extends not only to those acts which the United States has taken to comply,
including allegedly the subsequent reviews adopted af ter the expiry of the reasonable period of time,
but also to those acts which the United States allegedly should have taken to bring itself into
compliance."
350 Consequently, for the Panel, "any 'omission' or 'deficiency' of the United States in the
form of a subsequent review would be captured in the [close nexus] analysis". 351 The Panel did not
consider that the European Communities' characte rization of its claims as challenging omissions and
deficiencies in the United States' implementation could "broaden the scope of this proceeding to
measures which we otherwise determine not to fall w ithin our terms of reference" and emphasized
that it was addressing, at that stage, the "procedural question of whether the subsequent reviews fall
within the scope of this proceeding as measures that should be regarded as 'measures taken to

350Panel Report, para. 8.86. (original emphasis)
351Panel Report, para. 8.86. (original emphasis)

comply', and not the substantive question of whether the United States has omitted to comply" with
the DSB's recommendations and rulings.352
274. On appeal, the European Communities claims that this finding is in error for two reasons.
First, the European Communities argues th at the Panel "disregarded its mandate" 353 and acted
inconsistently with Article 11 of the DSU when it ignored the conditional order of the European
Communities' claims. The European Communities e xplains that its "close nexus" claim was made
in the alternative , subject to the condition that the Panel fi rst rejected its "main" claims that the
subsequent reviews fell within the Panel's terms of reference either as "amendments" to the original
measures, or as "omissions" in the United States' implementation of the recommendations and rulings
of the DSB. Therefore, the Panel erred in findi ng that it was not necessary to address the European
Communities' main "omissions" claim in the light of findings made with respect to its alternative
"close nexus" claim.354
275. The United States responds that the European Communities is incorrect in arguing that the
Panel was bound by the "sequenci ng order of the legal claims" 355 raised by the European
Communities. The United States submits that, in any event, the Panel did address the European
Communities' claims in the order proposed. The United States further suggests that the European
Communities failed to substantiate its claim that the Panel failed to comply with its mandate under
Article 11 of the DSU in structuring its analysis.
276. The European Communities' first allegation of e rror raises the question of whether panels are
"bound" by the "sequencing order" of legal claims made by the complaining party, whenever that
order does not pose particular interpretative problems. 356 In support of its allegation in this respect,
the European Communities points us to the report of the panel in EC – Sardines, where the panel held
that "it would not constitute an error of law" to observe the order of legal claims set in Peru's
submission because "such sequential examination woul d not affect the interpretation of the other
provisions."357 The European Communities also refers us to the Appellate Body's finding in US –
Shrimp, where the Appellate Body found that the sequence of the panel's analysis under Article XX of
the GATT 1994 (first chapeau then subparagraphs) posed particular interpretative problems.358

352Panel Report, para. 8.86. (original emphasis)
355United States' appellee's submission, para. 36 (quoting European Communities' appellant's
submission, para. 79).
357Panel Report, EC – Sardines, para. 7.18.

277. In our view, these decisions do not support the proposition that panels are "bound" by the
order of claims made by the complaining party. To the contrary, they confirm that, although panels
may decide to follow the particular order of legal claims suggested by the complaining party, they
may also follow a different order of analysis so as to apply the correct interpretation of the WTO law
at issue. Indeed, we consider that, in fulfilli ng its duties under Article 11 of the DSU, a panel may
depart from the sequential order suggested by the co mplaining party, in particular, when this is
required by the correct interpretation or application of the legal provisions at issue.
278. In the US – Continued Suspension / Canada – Continued Suspension disputes, the European
Communities similarly argued that the panel erroneous ly disregarded the conditional order of its legal
claims when it examined the Eur opean Communities' alternative clai m that the measure at issue was
consistent with the Agreement on the Application of Sanitary and Phytosanitary Measures (the " SPS
Agreement"), having found earlier, in response to one of the European Communities' main claims, that
the United States and Canada had acted inconsistently with Articles 23.1 and 23.2(a) of the DSU. The
Appellate Body rejected this argument, and reasone d that the fact that the European Communities
described its claims that the measures at issue achieved substantive compliance with the relevant
provisions of the SPS Agreement as "alternative claims" did not preclude the panel from evaluating
those claims, because this was required by the correct interpretation of Article 22.8 of the DSU.
359
279. Accordingly, we find that the Panel did not exceed its mandate, and act inconsistently with
Article 11 of the DSU, in addressing the European Communities' alternative "close nexus" claim
without first addressing the European Communities' "omissions" claim.
280. Secondly, the European Communities charges the Panel with exercising false judicial
economy, because the only "omission" addressed in th e Panel's "close nexus" analysis was the United
States' failure to stop collecting cash deposits calcu lated with zeroing after the end of the reasonable
period of time. The European Communities unde rscores that the scope of the "omissions" it
challenged in relation to the subsequent reviews included: (i) the United States' failure to stop
collecting duties calculated with zeroing on entries no t finally liquidated by the end of the reasonable
period of time; and (ii) the United States' failure to recalculate, without zeroing, margins of dumping
used in sunset reviews issued in connection with any of the original measures at issue.360

359Appellate Body Reports, US – Continued Suspension and Canada – Continued Suspension ,
para. 325.
360European Communities' appellant's submission, paras. 74 and 80. See also Panel Report,
footnote 629 to para. 8.85.

281. The United States responds that the Panel did not err in exercising judicial economy in
relation to the European Communities' claims that the subsequent reviews fell within the Panel's terms
of reference as "omissions" or "deficiencies" in the United States' implementation of the
recommendations and rulings of the DSB. The United States submits that the Panel's exercise of
judicial economy in this respect did not affect the Pa nel's ability to consider in its substantive analysis
all the alleged "omissions" or "deficiencies" cha llenged by the European Communities. The United
States argues further that the European Communities fa iled to substantiate its claims that the Panel
failed to comply with its functions as required by Article 11 of the DSU in reaching its findings.
361
282. At the outset, we observe that the Panel was correct in noting that its authority under
Article 21.5 of the DSU "extends not only to those acts which the United States has taken to comply
... but also to those acts which the United States allegedly should have taken to bring itself into
compliance."362 In resolving a disagreement as to the "e xistence" or "consistency with the covered
agreements" of measures taken to comply within the meaning of Article 21.5 of the DSU, panels
acting under that provision are re quired to determine whether measure s taken to comply exist, and
whether such measures achieve full compliance with the recommendations and rulings of the DSB.
As the Appellate Body noted in US – Softwood Lumber IV (Article 21.5 – Canada) , "[t]he word
'existence' suggests that measures falling within the scope of Article 21.5 encompass not only positive
acts, but also omissions."363 Therefore, "an Article 21.5 panel may be called upon to examine either
the 'existence' of 'measures taken to comply' w ith DSB recommendations and rulings, or, when such
measures exist, the 'consistency' of those measures with the covered agreements, or a combination of
both, in situations where the measures taken to co mply, through omissions or otherwise, may achieve
only partial compliance."364
283. Consistently with this reading of Article 21.5 of the DSU, the Panel did not disregard, in
ascertaining whether the United States has failed to comply with the DSB's recommendations and
rulings, the particular "omissions" challenged by th e European Communities, in the form of cash
deposits, final assessment and liqui dation of duties that remained unliquidated by the end of the
reasonable period of time 365, and the United States' failure to recalculate margins of dumping upon
which sunset reviews rely. 366 Rather, the Panel correctly noted that its jurisdictional findings "[did]

361United States' appellee's submission, paras. 35 and 37.
362Panel Report, para. 8.86. (original emphasis)
363Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para. 67. (original
emphasis)
364Appellate Body Report, US – FSC (Article 21.5 – EC II), para. 60.
365See Panel Report, para. 8.164-8.222.
366See Panel Report, para. 8.130-8.141.

not mean that we may not take into consideration omissions to implement on the part of the United
States as part of our substantive analysis of the EC claims".
367
284. Having said that, we have reservations about th e Panel's statement that any omissions or
deficiencies of the United States in the form of a subsequent review would be "captured" in the
Panel's "close nexus" analysis. 368 As the Panel's substantive anal ysis demonstrated, the Panel only
examined the specific "omissions" challenged by the European Communities with respect to the
specific subsequent reviews that the Panel later found to have fallen within its terms of reference, in
the light of their "close nexus" with the recommenda tions and rulings of the DSB. Indeed, the Panel
examined only whether the United States had failed to implement the recommendations and rulings of
the DSB by imposing cash deposits, assessing and li quidating duties, and by failing to recalculate
margins of dumping in the context of sunset re views, for the subsequent reviews which it later
determined to have a sufficiently close nexus w ith the recommendations and rulings of the DSB.
This, in our view, could have led to a partial resolu tion of the dispute, insofar as it could have resulted
in the Panel disregarding particular "omissions" in the United States' implementation with respect to
subsequent reviews that the Panel later determined not to fall within its terms of reference.
285. However, to the extent that the Panel's error in this regard would stem from its erroneous
application of the "close nexus" analysis to the subsequent reviews challenged by the European
Communities, which we have reversed above, we do not consider it necessary to make additional
findings in relation to the European Communities' clai m that the Panel erred in declining to rule on its
claim that the subsequent reviews fell within the Panel's terms of reference as "omissions" or
"deficiencies" in the United States' implementation of the recommendations and rulings of the DSB.

367Panel Report, para. 8.127. (original emphasis) The Panel also noted that:
... alleged omissions in the form of the continued imposition of cash deposit
requirements at rates calculated with zeroing, after the end of the reasonable
period of time, should be considered in order to make findings with respect
to whether the United States has complied with the recommendations and
rulings of the DSB. To conclude otherwise would allow the United States to
circumvent its obligation to implement those recommendations and rulings
by virtue of the fact that the cash deposit rate originally at issue and found to
be inconsistent with US obligations is replaced by a new, potentially
similarly-inconsistent, rate calculated in another review. In this sense, and
insofar as they continued to apply, we make no distinction between cash
deposits requirements established in subsequent administrative reviews
decided before and after the adoption of the DSB's recommendations and
rulings.
368Panel Report, para. 8.86.

VII. The Scope of the United States' Compliance Obligations
286. We now turn to the question of the scope of th e United States' obligation to comply with DSB
recommendations and rulings and recall that, in th is case, the recommendations and rulings of the
DSB concern the use by the United States in its retrospective anti-dumping system of "model zeroing"
in original investigations and "simple zeroing" in the assessment and collection of anti-dumping
duties.
287. In the recommendations and rulings of the DSB, the use of zeroing in original investigations,
when aggregating results of weighted average-to-w eighted average comparisons of export price and
normal value, was found to be inconsistent "as such" with Article 2.4.2 of the Anti-Dumping
Agreement.369 This methodology was also found to be WTO-inconsistent "as applied" in Cases 1
through 15.370 In addition, the DSB adopted findings that the United States acted inconsistently with
Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 when it used zeroing
in weighted average-to-transaction comparisons to assess duties and set cash deposit rates in Cases 16
through 31. These "as applied" findings were made in the context of the 16 administrative reviews at
issue in the original proceedings and related to th e operation of the retrospective system by which the
United States assesses anti-dumping duties and sets cash deposit rates.371
288. In this section, we address the United Stat es' compliance obligations resulting from these
recommendations and rulings of the DSB and the appeal by the European Communities, as well as the
United States' position, with respect to the Pa nel's findings on these issues. The European
Communities does not disagree with the Panel's in terpretation that any administrative review

369See notably, Original Panel Report, para. 8.1(c), which reads:
The United States' zeroing methodology, as it relates to original
investigations, is a norm which, as such, is inconsistent with Article 2.4.2 of
the [Anti-Dumping] Agreement. (footnote omitted)
370See notably, Original Panel Report, para. 8.1(a), which reads:
The United States acted inconsisten tly with Article 2.4.2 of the [ Anti-
Dumping] Agreement when in the anti-dumping investigations listed in
Exhibits EC-1 to EC-15 USDOC did not include in the numerator used to
calculate weighted average dumping margins any amounts by which
average export prices in individual averaging groups exceeded the average
normal value for such groups. (footnote omitted)
371See notably, Appellate Body Report, US – Zeroing (EC), para. 135, which reads in relevant part:
[W]e reverse the Panel's finding, in paragraphs 7.288 and 8.1(f) of the Panel
Report, that the United States did not act inconsistently with Article 9.3 of
the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 in the
administrative reviews at issue, and find, instead, that the United States
acted inconsistently with those provisions.

determination issued after the end of the r easonable period of time must not reflect zeroing.
372
However, the European Communities appeals the Pa nel's findings that the United States' compliance
obligations do not extend to assessment instructi ons and final liquidation of anti-dumping duties in
relation to administrative reviews made prior to the e nd of the reasonable period of time. In the next
section, we discuss the European Communities' and the United States' appeals of certain aspects of the
Panel's findings regarding Cases 1 and 6 and the Eu ropean Communities' appeal of a finding by the
Panel regarding Case 31, as well as the Panel's decision not to make specific findings with respect to
11 other Cases. 373 Before turning to the general issues regarding the United States' compliance
obligations, we observe that the European Communities, in its app eal, and the United States, in its
other appeal, have not appealed the findings the Pane l made in relation to the application after the end
of the reasonable period of time of cash deposits calculated with zeroing.374
A. The Panel's Findings
289. The Panel began its analysis by observing that the disagreement between the parties
concerned the prospective implementation of DSB recommendations and rulings in a retrospective
duty assessment system in which duties are calculate d, assessed, and collected after imports have
entered.375 The Panel noted that the parties disagreed on the nature of the relevant event to which the
Member's obligation to implement DSB recommendations and rulings attaches.376
290. The Panel recalled that the Anti-Dumping Agreement disciplines measures adopted by a
Member or actions taken by such Member, and that, in the case of a dispute under the Anti-Dumping
Agreement, those actions and measures necessarily concern the imposition of anti-dumping measures
against imports from another Member. For the Pane l, the relevant date for implementation of DSB
recommendations and rulings concerning anti-dumping duties by a Member operating a retrospective
duty assessment system, such as the one of the United St ates, is the date of the determination of final
liability for anti-dumping duties, that is, the date of the final determination in the administrative
review proceeding (the date of the issuance of the final results of the administrative review), or the
date on which the right to request such a review ha s lapsed. Accordingly, the Panel considered that
any definitive duty determination made after the end of the reasonable period of time must be

372The Panel clarified that it referred to the date of the final dete rmination in the administrative review
proceeding, as well as the date on which the right to request such a review has lapsed. (Panel Report,
para. 8.174)

373The relationship between the implementation obligations of the United States and subsequent sunset
reviews is addressed in section IX of this Report.
374Panel Report, para. 8.218.
375Panel Report, para. 8.167.
376Panel Report, para. 8.165.

consistent with the provisions of the Anti-Dumping Agreement and with the recommendations and
rulings of the DSB. The Panel maintained that to conclude otherwise would mean that a Member is
effectively allowed, after the end of the reasona ble period of time, to determine the amount of
anti-dumping duties with respect to certain imports in contravention of the provisions of the Anti-
Dumping Agreement .377 The Panel emphasized that this did not imply the imposition of a
retrospective remedy; on the contrary, the oblig ation to cease performing WTO-inconsistent acts as
of the end of the reasonable of time was "eminently prospective in nature".378
291. According to the Panel, to implement the recommendations and rulings of the DSB, the
United States was obligated, after 9 April 2007, to cease using the zeroing methodology in the
calculation of anti-dumping duties, not only with respect to imports entered after the end of the
reasonable period of time, but also in the context of decisions involving the calculation of margins of
dumping made after the end of the reasonable peri od of time with respect to imports entered before
that date. The Panel added that the fact that the imports concerned pre-date the expiry of the
reasonable period of time does not excuse the Unite d States from acting inconsistently with the
provisions of the Anti-Dumping Agreement after the end of the reasonable period of time.379
292. The Panel endorsed the view expressed by the panels and the Appellate Body in US – Shrimp
(Thailand) and US – Customs Bond Directive that, in a retrospective duty assessment system, the final
determination of the amount of anti-dumping duties due is made at the time of the assessment review
or, where no assessment review is requested, at the time when it is determined that duties will be
assessed on the basis of the cash deposits collected. 380 The Panel explained that, accordingly, where
the DSB makes recommendations and rulings concer ning the calculation of the margin of dumping,
the determinations in subsequent assessment reviews decided after the end of the reasonable period of
time, and involving the same products from the sa me countries, must be consistent with those
recommendations and rulings, regardless of whether the imports in question were made before or after
the end of the reasonable period of time.381
293. The Panel also discussed the Eu ropean Communities' contention that any action after the end
of the reasonable period of time must not be based on zeroing, including actions to collect or liquidate
duties resulting from administrative reviews conclude d before the end of the reasonable period of

377Panel Report, para. 8.174.
378Panel Report, para. 8.175.
379Panel Report, para. 8.175.
380Panel Report, para. 8.178 (referring to Appellate Body Report, US – Shrimp (Thailand) / US –
Customs Bond Directive, para. 222).
381Panel Report, para. 8.180.

time
382. The Panel rejected this contention and reiterate d that the date that is relevant for the United
States' implementation of the recommendations and ruli ngs of the DSB is that of the determination of
final duty liability in the administrative review procee ding (either the date of the issuance of the final
results of the administrative review or the date on which the right to request such a review has
lapsed).383 For the Panel, the obligation to implem ent should not, once the determination of the
amount of anti-dumping liability has been made, de pend on when the actual collection of the duty
takes place. The Panel observed that the issu e raised by the European Communities concerns
essentially delays in the actual collection of anti-dum ping duties that are the consequence of judicial
proceedings initiated by private parties and ch allenging the final duty liability determination. 384 I n
support of its position, the Panel e xplained that the European Commun ities' claims in the original
proceedings, as well as the findings of the original panel and the Appellate Body, concerned the
calculation of margins of dumping, and that under the United States' system, the final amount of
duties to be paid is determined on the basis of margins of dumping calculated at the time of the
assessment review. 385 For the Panel, it is the administrative review determination, not the actual
liquidation, that is the final ac tion undertaken by the United States ' authorities to determine the duty
liability applicable to particular imports. 386 Furthermore, the Panel reasoned that, where the
liquidation after the end of the reasonable period of time relates to an administrative review concluded
before that date, the European Communities' approach would lead to the "undesirable result" that the
United States' authorities would have to "revisit" the final assessment of duties performed in the
administrative review when the actual liquidation of entries has been suspended as a result of legal
challenges that are ultimately unsuccessful or unrelated to the issue of zeroing.387
294. The Panel addressed the European Communities' c ontentions that the United States failed to
comply with the DSB's recommendations and rulings in the original proceedings because it did not
fully revoke the original investig ation orders contested in the original proceedings and because the
administrative reviews at issue in the original pr oceedings have not been superseded. The Panel
considered that these contentions were subsumed in , or attached to, other claims analyzed by the

382These include USDOC assessment instructions and Customs liquidation instructions. Assessment
instructions can be delayed by challenges before United States courts and liquidation instructions can be delayed
by protests to Customs. (See Panel Report, para. 8.189 and footnote 724 to para. 8.149) According to Annex A
to the European Communities' response to Panel Question 5, there were unliquidated entries as of the end of the
reasonable period of time in seven Cases out of 31, namely, Cases 1, 5, 22, 28, 29, 30, and 31.
383Panel Report, para. 8.191.
384Panel Report, paras. 8.191 and 8.192.
385Panel Report, para. 8.191.
386Panel Report, para. 8.192.
387Panel Report, paras. 8.191-8.193.

Panel and on which it made findings . Accordingly, the Panel considered it was unnecessary to make
specific findings with respect to them.388
B. Claims and Arguments on Appeal
295. On appeal, the European Communities claims that the Panel erred in rejecting its claims that
certain actions or omissions by the United States based on zeroing after the expiry of the reasonable
period of time were inconsistent with the United St ates' obligation to comply with the rulings and
recommendations of the DSB, and w ith various provisions of the Anti-Dumping Agreement and the
DSU, and Article VI of the GATT 1994. 389 For the European Communities, a failure to comply with
the recommendations and rulings of the DSB by the end of the reasonable period of time can be found
with respect to any action taken or measure issued by the responding Member after the expiry of that
period of time, including the determination of fina l duty liability in an asse ssment review, assessment
instructions issued by the USDOC to Customs, liq uidation instructions issued by Customs to local
customs authorities ("port authorities") to liquidate th e import entries at the rate established by the
USDOC, and the collection of duties or the actual li quidation of entries. The European Communities
submits that several interpretative considerations in the Anti-Dumping Agreement and the DSU
provide support for the principle that immediate compliance by the end of the reasonable period of
time precludes all actions or omissions based on zer oing after the end of the reasonable period of
time.
390
296. In response, the United States argues that an anti-dumping duty is a border measure, and that,
in disputes involving border measures, compliance is achieved when the measure is withdrawn or
rendered WTO-consistent for goods entere d after the reasonable period of time. 391 The United States
contends that, by withdrawing the border measures or applying new WTO-consistent border measures
to entries occurring after the end of the reasonabl e period of time subject to the 31 measures covered
by the recommendations and rulings of the DSB, it brought itself into compliance with those
recommendations and rulings. 392 Accordingly, the United States rejects the European Communities'
view that the recommendations and rulings of the DSB encompass the liquidation after the end of the
reasonable period of time of entries that were made before or during the reas onable period of time, if
for any reason those entries remained unliquidate d at the end of the reasonable period of time. 393 The

388Panel Report, paras. 8.219-8.222.
389European Communities' appellant's submission, paras. 5 and 121.
390European Communities' appellant's submission, para. 168. The arguments advanced by the
European Communities in support of its appeal are summarized in Section II.A.3 of this Report.
391United States' appellee's submission, paras. 62 and 72.

United States considers that, to ensure a "level playing field" among Members with retrospective
systems, prospective ad valorem systems, and prospective normal value systems, prospective
implementation requires that duties levied on imports occurring on or after the date of implementation
be consistent with the recommendations and rulings of the DSB.
394
C. Analysis
297. We begin our analysis by recalling provisions of the DSU that are of relevance to the issues
we have to address on appeal. Under the DSU, panel and Appellate Body reports adopted by the DSB
have to be unconditio nally accepted by the parties to the dispute. 395 Article 19.1 of the DSU requires
the Member concerned to bring its measure found to be inconsistent with a covered agreement into
conformity with that agreement. Article 3.7 of the DSU provides that "the first objective of the
dispute settlement system is usually to secure the withdrawal" of the inconsistent measure. The
Appellate Body has recognized that the implemen ting Member may bring an inconsistent measure
into compliance also "by modifying or replacing it with a revised measure".
396 Article 21.1 of the
DSU provides that prompt compliance with the r ecommendations and rulings of the DSB is essential
to the effective resolution of disputes. Article 21. 3 implies that compliance should be immediate, but
also provides that the implementing Member may obtain in certain circumstances a reasonable period
of time in which to comply:
If it is impracticable to comply immediately with the [DSB]
recommendations and rulings, the Me mber concerned shall have a
reasonable period of time in which to do so. (emphasis added)
The implementing Member may obtain a reasonable pe riod of time in which to comply by: (i) DSB
approval; (ii) agreement among the parties; or (iii) arbitration under Article 21.3 of the DSU.
298. The parties agree that the fact that Article 21.3 may provide a Member with a reasonable
period of time to bring itself into compliance w ith DSB recommendations and rulings does not mean
that the Member is not subject to the underlying WTO obligation during that period.
397 They also

394United States' appellee's submission, para. 98. Th e arguments put forward by the United States in
support of its position are summarized in Section II.B.3 of this Report.
395Article 17.14 of the DSU.
396Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina),
footnote 367 to para. 173.
397European Communities' appellant's submission, paras. 134 and 143; United States' appellee's
submission, para. 68.

agree that Article 28 of the Vienna Convention 398 is inapplicable to the present dispute because DSB
recommendations and rulings do not create new WTO obligations. 399 The European Communities
states that DSB recommendations and rulings are not treaty-making by WTO Members but, rather,
constitute judicial activity involving the clarification, interpretation, and appli cation of provisions of
the covered agreements.400 The United States notes that recommendations and rulings by the DSB do
not create an obligation to comply with the covered agreements, as that obligation already exists in the
covered agreements themselves; rather, it is the right to a remedy against a breach of the covered
agreements (such as compensation or suspension of concessions or ot her obligations) that arises only
after a Member fails to comply with the DSB's recommendations and rulings within the reasonable
period of time.401 According to Article 22.1 of the DSU, compensation and suspension of concessions
are temporary measures available in the event that the DSB's recommendations and rulings are not
implemented within the reasonable period of time. Thus, as the United States puts it, a Member is not
"permitted"402 to breach the covered agreements during the reasonable period of time; instead, that
Member is merely not subject to the remedies contemplated in Article 22 of the DSU for such
breaches. Like the parties, we therefore disagree with the analogy drawn by the Panel between, on the
one hand, Article 28 of the Vienna Convention on the "non-retroactivity of treaties" and, on the other
hand, "non-retroactive" or "non-retrospective" re medies under the DSU, in its description of what
prospective compliance with DS B recommendations and rulings re quires the implementing Member
to do.
403
299. Thus, the reasonable period of time allows a Member sufficient time to bring itself into
conformity with its WTO obligations without being required to provide compensation or being subject
to the suspension of concessions or other obligations. 404 Given that the responding WTO Member is
required to bring the measure found to be inconsiste nt into conformity with the relevant covered
agreement within the reasonable period of time (w here immediate compliance is impracticable), a
failure to comply fully with, or an omission in the implementation of, the DSB's recommendations

398Article 28 of the Vienna Convention reads:
Non-retroactivity of treaties
Unless a different intention appears from the treaty or is otherwise
established, its provisions do not bind a party in relation to any act or fact
which took place or any situation which ceased to exist before the date of
the entry into force of the treaty with respect to that party.
399United States' appellee's submission, paras. 67-69; European Communities' appellant's submission,
paras. 134, 135, and 143.
400European Communities' appellant's submission, paras. 134 and 135.
403Panel Report, paras. 8.168 and 8.169.

and rulings cannot be found before th e end of the reasonable period of time.
405 When a reasonable
period of time for implementation has been determ ined, Article 21.3 of the DSU implies that the
obligation to comply with the recommendations and ru lings of the DSB has to be fulfilled by the end
of the reasonable period of time at the latest, and that the WTO-inconsistency has to cease by the end
of the reasonable period of time with prospective effect. 406 Thus, in this dispute, with respect to the
"as applied" findings of the panel and/or the Appe llate Body in the original proceedings, the United
States was required to ensure that the use of the " zeroing" methodology in the 31 Cases at issue in the
original proceedings ceased by the end of the reasonable period of time.
300. Whereas there is no debate between the par ties that a failure to comply with the
recommendations and rulings of the DSB cannot be found before the end of the reasonable period of
time for implementation (which is, in this dispute, 9 April 2007), there is a plurality of views on the
type of events that may trigger such a failure to comply in the United States' retrospective
anti-dumping system. The United States considers that the critical event is the importation ("entry")
of products subject to the duty, and that no failure to comply can be found in relation to imports made
before the expiry of the reasonable period of time. For its part, the European Communities maintains
that a failure to implement fully DSB recommendations and rulings can be found with respect to any
inconsistent action taken by the r esponding Member after the expiry of the reasonable period of time.
As we have explained above, the Panel developed a different approach. On the one hand, the Panel
was of the view that any definitive duty determina tion made after the end of the reasonable period of
time must be consistent with the provisions of the Anti-Dumping Agreement and with the
recommendations and rulings of the DSB. On the ot her hand, the Panel considered that a failure to
comply could not be found with respect to actions occurring after the expiry of the reasonable period
of time, such as assessment instructions by the USDOC to Customs, liquidation instructions by
Customs to local port authorities, or actions to coll ect or liquidate duties, to the extent that these
actions resulted from administrative reviews concluded before the end of the reasonable period of
time. The Panel also stated that the United St ates was required to implement the recommendations
and rulings of the DSB with respect to cash deposits applied after the end of the reasonable period of
time even though the rates of these cash deposits we re derived from margins of dumping calculated in
an administrative review or an original investigation that occurred before that date.

405We add that, ordinarily, the complaining WTO Member will avail itself of a remedy in the form of
compensation or suspension of concessions or other obligations only after the expiry of the reasonable period of
time, in the event that compliance measures have been found to be WTO-inconsistent, or omissions in
compliance with the DSB's recommendations or rulings have been established in Article 21.5 proceedings.
406As the Appellate Body indicated in US – Upland Cotton (Article 21.5 – Brazil) , the
recommendations and rulings of the DSB create implementation obligations with prospective effect. (Appellate
Body Report, US – Upland Cotton (Article 21.5 – Brazil), footnote 494 to para. 243)

301. The task of a panel under Article 21.5 of the DSU is to examine the questions of the existence
or consistency with the covered agreements of measures taken to comply with the recommendations
and rulings of the DSB. This examination will co ver the instruments or actions that the responding
Member has identified as measures "taken to comply". However, other closely connected measures or
omissions in compliance by the responding Member fall within the scope of compliance proceedings
and will be examined by the compliance panel in order to determine whether such actions or
omissions undermine or negate the compliance achieve d by the declared measures "taken to comply",
or establish inexistent or insufficient compliance.
302. Thus, it appears to us that the starting point of an analysis of whether the responding Member
has fulfilled its implementation obl igations should be the recommendations and rulings of the DSB,
with which that Member must comply. As not ed above, these recommendations and rulings of the
DSB concerned the use of zeroing "as such" and "as applied" in 15 original investigations (Cases 1
through 15) and "as applied" in 16 administrative re views (Cases 16 through 31). In order to comply
with the DSB's recommendations and rulings co ncerning the use of zeroing in the original
investigations (Cases 1 through 15), the United St ates took the following actions. On 1 March 2007,
the USDOC initiated proceedings pursuant to Se ction 129 of the URAA covering 12 original
investigations at issue in the original proceedi ngs. The remaining three anti-dumping duty orders had
been previously revoked (Cases 10, 12, and 13). In the Section 129 determinations, the USDOC
recalculated, without zeroing, the relevant margin s of dumping for each exporter or foreign producer
investigated. The USDOC issued 11 of the Sec tion 129 determinations on 9 April 2007. These
11 Section 129 determinations became effective on 23 April 2007. 407 The results in the remaining
Section 129 determination were issued on 20 August 2007 and became effective on 31 August

407See Panel Exhibit EC-2 (preliminary results of Section 129 determinations), USDOC, Antidumping
Proceedings: Calculation of the Weighted-Average Dumping Margins in Antidumping Investigations; Change in
Effective Date of Final Modification, United States Federal Register , Vol. 72, No. 17 (26 January 2007) 3783;
Panel Exhibit EC-5 (notice of final results of Sectio n 129 determinations), USDOC, Implementation of the
Findings of the WTO Panel in US-Zeroing (EC): Notice of Determinations Under Section 129 of the Uruguay
Round Agreements Act and Revocations and Partial Revocations of Certain Antidumping Duty Orders, United
States Federal Register , Vol. 72, No. 86 (4 May 2007) 25261; Panel Exhibit EC-7, USDOC Issues and
Decision Memorandum, Final Results for the Section 129 Determinations: Certain Hot-Rolled Carbon Steel
from the Netherlands, Stainless Steel Bar from France, Stainless Steel Bar from Ge rmany, Stainless Steel Bar
from Italy, Stainless Steel Bar from the United Kingdom, Stainless Steel Wire Rod from Sweden, Stainless Steel
Wire Rod from Spain, Stainless Steel Wire Rod from Italy, Certain Stainless Steel Plate in Coils from Belgium,
Stainless Steel Sheet and Strip in Coils from Italy, Ce rtain Cut-to-Length Carbon-Q uality Steel Plate Products
from Italy, Certain Pasta from Italy (9 April 2007); and United States' first written submission to the Panel,
para. 19.

2007.
408 As a result of these recalculations: two orig inal anti-dumping duty orders were revoked (the
recalculation resulting in zero or de minimis margins for all exporters or producers concerned);
10 original anti-dumping duty orders were partiall y revoked (with respect to certain companies for
which the USDOC found zero or de minimis margins in the Section 129 determination), whereas for
other companies, duties were either reduced or in creased as a result of the recalculation. The
recalculated margins of dumping established in the Section 129 determinations applied (as the new
cash deposit rate) with respect to unliquidated entries (imports) made on or after 23 April 2007
(31 August 2007 with respect to Case 11).
303. We note that the Section 129 determinations took effect on 23 April/31 August 2007, that is,
after the reasonable period of time expired on 9 April 2007. The European Communities has brought
a distinct claim with respect to this implementa tion delay, which we address in section X of this
Report. Leaving this issue aside, we note that, in response to the WTO-inconsistencies that were
covered by the recommendations and rulings of the DS B relating to the 15 original investigations, the
United States, in 12 Cases, recalculated the marg ins of dumping without zeroing in the Section 129
determinations, with the conseque nt revocation—full or partial—of the anti-dumping duty orders. In
the three remaining Cases, the anti-dumping duty or ders were revoked for reasons unrelated to the
zeroing issue. 409 The recalculations of margins of dumping without zeroing under the Section 129
determinations, the full or partia l revocation of orders, as well as the establishment for the concerned
exporters of new cash deposit rates set without zeroing are not WTO-inconsistent.410 On the face of it,
by issuing these Section 129 determinations, the Un ited States has responded to the recommendations
and rulings of the DSB relating to Cases 1 through 15. We recall, however, that, as the Appellate
Body noted in US – Softwood Lumber IV (Article 21.5 – Canada) 411, the examination under
Article 21.5 of the DSU extends beyond the analysis of the consistency of the declared measures
taken to comply, because the compliance panel may have to determine whether other closely
connected measures taken by the responding WT O Member undermine or negate the compliance
achieved by the declared measures taken to comply. We observe, in this respect, that the Section 129

408See Panel Exhibit EC-6 (notice of the Section 129 determinations), USDOC, Implementation of the
Findings of the WTO Panel in US-Zeroing (EC): Notice of Determination Under Section 129 of the Uruguay
Round Agreements Act: Antidumping Duty Order on Stainless Steel Sheet and Strip from Italy, United States
Federal Register, Vol. 72, No. 186 (26 September 2007) 54640; and Panel Exhibit EC-8, USDOC Issues and
Decision Memorandum, Final Results for the Section 129 Determinations: Stainless Steel Sheet and Strip from
Italy (Italy SSSS) (20 August 2007).
409In July 2004 for Cases 10 and 12, and in February 2005 for Case 13.
410We address the European Communities' claims regarding an alleged arithmetical error in Case 11
and the calculation of certain "all others" rates in sections XI and XII of this Report.
411Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), paras. 80-88.

determinations do not relate to administrative re views completed after the end of the reasonable
period of time but covering entries prior to that date.
304. The DSB also adopted recommendations and rulings that referred to "as applied" findings by
the Appellate Body in the original proceedings, according to which the determinations made in
16 specific administrative reviews, identified by the European Communities as Cases 16 through 31,
were inconsistent with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT
1994. We note that these recommendations and rulings of the DSB concern the use of zeroing in the
assessment of final duty liability as well as the settin g of cash deposit rates with respect to specific
products from specific countries that have been subject to anti-dumping duty orders. In relation to the
16 administrative reviews at issue in the original pr oceedings, the United States argued that they have
been superseded by subsequent administrative review s. Therefore, the United States considered that
no further action was required in order to impl ement the DSB's recommendations and rulings in
relation to those administrative reviews. We disagree. Although the "as applied" findings of the
Appellate Body were made in relation to 16 ad ministrative reviews identified by the European
Communities in the original proceedings, this does not mean, in our opinion, that compliance by the
United States with the recommendations and rulings of the DSB does not have to be prospective as of
the end of the reasonable period of time. Due to its prospective nature, compliance is not confined by
the limited duration of the original measures at is sue, especially when a subsequent measure replaces
or supersedes the measure at issue in the original proceedings.
412
305. Under the DSU, compliance has to be accomp lished at the latest from the end of the
reasonable period of time with prospective effect . In the instant case, we do not see how such
prospective compliance could be achieved and assessed in an Article 21.5 proceeding if such analysis
were constrained by the limited duration of the 16 administrative reviews at issue in the original
proceedings, given that, in principle, entries covered by these 16 administrative reviews will have
been liquidated before the end of the reasonable pe riod of time, and cash deposit rates established in
those reviews will have been supe rseded by the results of subsequent administrative reviews
concluded before the expiry of the reasonable period of time.

412We observe that the United States argues that the administrative re views at issue in the original
proceedings were superseded by subsequent administrative reviews. (See Panel Report, para. 3.1; and also
para. 5.105, which refers to Panel Exhibit US-17) As we understand it, once a definitive anti-dumping duty
order is imposed, the United States' retrospective asse ssment system contemplates a continuum of successive
administrative reviews during the lifetime of that order. If no such review is requested in a particular year,
entries occurring during that period are liquidated at the cash deposit rate and the margin calculated in a
previous review will continue to serve as the going-fo rward cash deposit rate until an administrative review is
requested. This may continue during the lifetime of the order or longer if a sunset review initiated at the fifth
anniversary of that order results in a continuation order.

306. Given the scope of the recommendations and rulings of the DSB, in order to achieve
compliance, the United States had to cease using zero ing in the assessment of duties with respect to
Cases 16 through 31 by the end of the reasonable peri od of time. Having said that, we consider that
these compliance obligations are not limited to the cessation of zeroing in the calculation of
assessment rates; rather, by imp lication, these obligations also ex tend to connected and consequent
measures that are simply "mechanically" derived from the results of an assessment review and applied
in the ordinary course of the imposition of anti-dumping duties.
307. In particular, the United States fails to achieve compliance if it assessed final duty liability
and applied cash deposits on the basis of zeroing after the end of the reasonable period of time. Given
that, in the United States, final duty liability is assessed and cash deposit rates are set in administrative
reviews
413, administrative review determinations that ar e issued after the end of the reasonable period
of time must not reflect zeroing. 414 The United States would not comply with the recommendations
and rulings of the DSB if the administrative revi ew determinations issued after the end of the
reasonable period of time were based on zeroing or, in the event that no administrative review is
requested, if the duties were assessed, after the end of the reasonable period of time, on the basis of
cash deposit rates that were calculated with zeroing. As the Panel stated, "[t]o conclude otherwise
would mean that a Member is effectively allowed, after the end of the reasonable period of time, to
determine the amount of anti-dumping duties with resp ect to certain imports in contravention of the
provisions of the Anti-Dumping Agreement."415
308. A subsequent administrative review determina tion issued after the end of the reasonable
period of time falls within the scope of the impl ementation obligations of the United States, even
though, in that review, duty liability has been assessed for entries that occurred before the end of the
reasonable period of time. The United States considers that no failure to comply can be found in
relation to such an administrative review determination because, under the DSU, implementation does
not have retroactive reach. The United States r easons that the anti-dumping duty liability attaches to
the entry, and arises at the time of importation. For the United States, the implementation obligations
would apply retroactively if it were required to assess anti-dumping duty liability in the light of the

413As the Appellate Body indicated in US – Shrimp (Thailand) / US – Customs Bond Directive , in the
retrospective duty liability assessment system used by the United States, the determination of the final liability
for payment of anti-dumping duties is made at the time of the assessment review or, when no administrative
review is requested, at the time when it is determined that duties will be assessed on the basis of the cash deposit
rate required upon entry. (See Appellate Body Report, US – Shrimp (Thailand) / US – Customs Bond Directive,
footnote 268 to para. 226)
414The effective date of the administrative review determination is the date of publication of the final
results of the administrative review in the United States Federal Register , or, where applicable, the date of
publication of the amended results of the administrative review.
415Panel Report, para. 8.174.

legal regime in place at the end of the reasonable period of time (which would incorporate the
prohibition of using zeroing in the assessment of duti es), as opposed to the legal regime in effect at
the time of importation, when the anti-dumping duty liability arose.
309. We disagree with the United States. We observe, first, that an administrative review
determination issued after the end of the reasonabl e period of time in which duty liability has been
assessed for entries that occurred before that date also has an impact on entries taking place after the
end of the reasonable period of time, because this determination sets going-forward cash deposit rates
that apply to future entries. Under the United States' approach, prospective implementation would
imply that cash deposit rates on entries after the e nd of the reasonable period of time do not reflect
zeroing. Moreover, because compliance with the recommendations and rulings of the DSB implies
cessation of zeroing in the assessment of final duty lia bility, and in the measure s that, in the ordinary
course of the imposition of anti-dumping duties, deri ve mechanically from the assessment of duties,
whether the implementation is prospective or retroact ive should not be determined by reference to the
date when liability arises, but rather by reference to the time when final dumping duty liabilities are
assessed or when measures that result mechanically from the assessment of duties occur. We consider
that the obligation to cease using zeroing in the assessment of anti-dumping duty liability at the latest
as of the end of the reasonable period of ti me "is eminently prospective in nature".416 By contrast, the
approach based on the date of entry advocated by the United States would allow a WTO Member
operating a retrospective duty assessment system to resort to a methodology for assessing duty
liability that has been found WTO-inconsistent be yond the end of the reasonable period of time.
Thus, the implementing Member would be able to extend the reasonable period of time and delay
compliance depending on when it chooses to undertak e final duty assessment. Such a result would
deprive of meaning the notion of "reasonable peri od of time" in which a Member shall comply, as
provided for in Article 21.3 of the DSU, and be contrary to the implementation mechanism of the
DSU.
310. We move to the European Communities' claim on appeal that the Panel erred in concluding
that the implementation obligations of the United States do not extend to the collection
(or liquidation) of duties, assessment instructions, or liquidation instructions issued after the end of
the reasonable period of time, when such actions result from determinations of final duty liability
made before that date.
417 As we have explained above, we are of the view that, by implication,
compliance with the recommendations and rulings of the DSB with respect to Cases 16 through 31
implies not only cessation of zeroing in the assessment of duties, but also in consequent measures

416Panel Report, para. 8.175. (footnote omitted)
417Panel Report, paras. 8.191-8.193 and 8.199-8.201.

that, in the ordinary course of the imposition of anti-dumping duties, derive mechanically from the
assessment of duties. Accordingly, to the extent that a measure of this kind would be based on
zeroing, the United States would fail to comply with the recommendations and rulings of the DSB
regarding Cases 16 through 31 if it were to apply that measure after the end of the reasonable period
of time.
311. In the light of the above considerations, we agree with the Panel that "any definitive duty
determination made after the end of the reasonabl e period of time must be consistent with the
provisions of the Anti-Dumping Agreement and with the DSB's recommendations and rulings."
418 We
also agree with the Panel's statement that "[t] o implement the DSB's recommendations and rulings,
the United States was at least oblig ated, after 9 April 2007, to cease using the 'zeroing' methodology
in the calculation of anti-dumping duties, not only with respect to imports entered after the end of the
reasonable period of time, but also in the context of decisions involving the calculation of dumping
margins made after the end of the reasonable period of time with respect to imports entered before
that date."419 In other words, in relation to the Cases at issue in the original proceedings, we consider
that a subsequent administrative review determinati on issued after the end of the reasonable period of
time in which zeroing is used, or, if no such review is requested, a determination issued after the end
of the reasonable period of time by which anti- dumping liability is assessed on the basis of cash
deposit rates calculated with zeroing, would establish a failure to comply with the recommendations
and rulings of the DSB. However, we disagree wi th the Panel's view regarding measures that are
consequent to assessment reviews in the Cases at issue in the original proceedings. We consider that
measures that, in the ordinary course of the imposition of anti-dumping duties, derive mechanically
from the assessment of duties would establish a fa ilure to comply with the recommendations and
rulings of the DSB to the extent that they are b ased on zeroing and that they are applied after the end
of the reasonable period of time. Accordingly, we reverse the Panel's interpretation, in
paragraph 8.199 of the Panel Report, that th e United States' obligation to implement the
recommendations and rulings of the DSB does not ex tend to the actual collection and liquidation of
duties, and to the issuance of assessment or liqui dation instructions, when these actions result from
administrative review determinations made before the end of the reasonable period of time.
312. We move to the European Communities' app eal concerning the Panel's finding that the
European Communities has not established that the United States failed to comply with the
recommendations and rulings of the DSB by liquida ting, after the end of the reasonable period of
time, duties that were assessed with zeroing pursuan t to administrative review determinations issued

418Panel Report, para. 8.174.
419Panel Report, para. 8.175.

before the end of the reasonable period of time. 420 We observe that this fi nding of the Panel is based
on its position that actions to liquidate entries are outside the scope of the implementation obligations
of the United States merely because they result from assessments made before the end of the
reasonable period of time.421 We have explained above why we reject this approach. Resting upon an
erroneous reasoning, this finding of the Panel, in pa ragraphs 8.200 and 9.1(b)(iii) of the Panel Report,
is moot and has no legal effect.
313. Having said that, we observe that the unliquidated entries as of the end of the reasonable
period of time to which the European Communities refers 422 are derived from administrative reviews
that are outside the Panel's terms of reference, with the exception of the unliquidated duties assessed
in the 2004-2005 administrative review in Case 1. 423 Accordingly, it is not necessary for us to make
findings with respect to those unliquidated entries.
314. We do not express any opinion on the question of whether actions to liquidate duties that are
based on administrative review determinations issued before the end of the reasonable period of time,
and that have been delayed as a result of judicial proceedings, fall within the scope of the
implementation obligations of the United States, as we do not need to do so in the context of our
analysis of this issue in this case.
VIII. Specific Cases Covered by the Appeal and the Other Appeal
315. We move to the claims raised in the Europ ean Communities' appeal and the United States'
other appeal with respect to subsequent administ rative reviews in specific Cases, as well as cash
deposits applied or duties liquidated after the end of the reasonable period of time in specific Cases.
We examine in turn Cases 1, 6, and 31 with resp ect to which the Panel made specific findings. We
then discuss the European Communities' appeal concerning Cases 18 through 24 and 27 through 30
with respect to which the Panel did not make s ubstantive findings, and we address the question of
whether we can complete the analysis.

420Panel Report, paras. 8.200 and 9.1(b)(iii).
421Panel Report, para. 8.191.
422European Communities' response to Panel Question 5, Annex A. According to the Annex, there
were unliquidated entries as of the end of the reasonable period of time in seven Cases out of 31, namely,
Cases 1, 5, 22, 28, 29, 30, and 31.
423The appeal and the other appeal relating to Case 1 are discussed in the next section of this Report. In
any event, we observe that, in Case 1, the 2004-2005 administrative review was concluded after the expiry of
the reasonable period of time. In our view, the analysis of whether the United States has complied or not with
the recommendations and rulings of the DSB should fo cus on the results of the 2004-2005 administrative
review. For purposes of proceedings under Article 21.5 of the DSU, we do not see what a separate review of
unliquidated entries relating to the 2004-2005 administrative review would add to the analysis of the results of
that review.

A. Case 1: Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands
316. Case 1 involved the use of zeroing by the USDOC when aggregating results of weighted
average-to-weighted average comparisons of nor mal value and export prices in the original
investigation of certain hot-rolled carbon steel flat products from the Netherlands.
424 In the original
proceedings with respect to Case 1, the original panel and the Appellate Body found that zeroing,
"as applied" in this original investigation, was inconsistent with Article 2.4.2 of the Anti-Dumping
Agreement.425 The original proceedings did not involve s ubsequent administrative reviews relating to
certain hot-rolled carbon steel flat products from the Netherlands where zeroing was used in weighted
average-to-transaction comparisons of normal value and export prices.
317. Before the Panel, the European Communities ma de two claims regarding Case 1. First, it
challenged the determination made in the 2004-2005 administrative review, as well as the consequent
instructions to Customs. In this administrative review, zeroing was used. 426 The final results of the
2004-2005 administrative review, as well as assessment instructions, were issued on 22 June 2007.
The second claim of the European Communities c oncerned the administrative review covering
imports from 1 November 2005 to 31 October 2006. This administrative review was rescinded on
30 March 2007. As a consequence, assessment in structions were issued on 16 April 2007. On
23 April 2007, Customs instructed the ports of entry to liquidate the relevant entries.427
318. In the Section 129 determination with resp ect to Case 1, the United States recalculated
without zeroing the margin of dumping on the b asis of weighted average-to-weighted average
comparisons. As a result of the recalculation, no dumping was found and the original anti-dumping
duty order was revoked. Issued on 9 April 2007, the Section 129 determination took effect on
23 April 2007.428
319. Regarding the first claim, the Panel observed that the results of the 2004-2005 administrative
review and the consequent assessment instructions were issued after the reasonable period of time for
implementation had expired on 9 Apr il 2007. Applying its interpretation of the temporal scope of the
United States' implementation obligations it had set out previously, the Panel found that the United
States acted inconsistently with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the
GATT 1994 because it used zeroing in its determina tion in the 2004-2005 administrative review and

424USDOC, Antidumping Duty Order: Certain Hot-Rolled Carbon Steel Flat Products from the
Netherlands, United States Federal Register, Vol. 66, No. 230 (29 November 2001) 59565.
425Original Panel Report, para. 8.1(a).
426Panel Report, para. 8.208.
427Panel Report, para. 8.205.
428Panel Report, para. 3.1.

in issuing the consequent assessment instructions. 429 The Panel thus concluded that the United States
had failed to comply with the recommendations and rulings of the DSB in relation to Case 1.430
320. Moving to the second claim, the Panel consid ered that the determination of final anti-
dumping duty liability with respect to the imports co vered by the assessment instructions challenged
by the European Communities was made on 30 March 2007, when the 2005-2006 administrative
review was rescinded.
431 Applying its interpretation of th e temporal scope of implementation
obligations, the Panel found that, as the determination of final anti-dumping duty liability with the use
of zeroing was made prior to the end of the reasonable period of time, the assessment instructions
issued on 16 April 2007, and the liquidation instructi ons issued on 23 April 2007, did not constitute
failures on the part of the United States to comp ly with the recommendations and rulings of the
DSB.
432
321. Although the European Communities agrees with the findings of the Panel regarding the
results of the 2004-2005 administrative review in Case 1, it considers that the Panel erred in its
approach to the temporal scope of the implementa tion obligations of the United States. The same
approach, the European Communities contends, also led the Panel to the erroneous conclusion that the
assessment instructions and the liquidation instruc tions issued further to the rescission of the
2005-2006 administrative review did not constitute failures on the part of the United States to comply
with the recommendations and rulings of the DSB.
433
322. In its other appeal, the United States claims that the Panel erred in its analysis of Case 1,
because it ignored the fact that th e DSB's recommendations and rulings in this Case relate to the use
of zeroing in the weighted average-to-weighted average comparison methodology and do not extend
to the use of zeroing in the weighted average-to-transaction comparison methodology in
administrative reviews.
434 According to the United States, it complied with the recommendations and
rulings of the DSB in Case 1 relating to the use of zeroing in the original investigation in which

429According to the Panel, the United States did no t contest that the USDOC had used zeroing in
calculating the margin of dumping for the sole respondent, Corus Engineering Steels Ltd., and the USDOC
Issues and Decision Memorandum confirms that zeroing was used in that Case. (Panel Report, para. 8.208
(referring to USDOC, Issues and Decision Memorandum for the 2004-2005 Administrative Review of Certain
Hot-Rolled Carbon Steel Flat Products from the Netherlands; Final Results of Antidumping Duty
Administrative Review, published together with Certain Hot-Rolled Carbon Steel Flat Products from the
Netherlands; Final Results of Antidumping Duty Administrative Review, at pp. 12-14 (published in United
States Federal Register, Vol. 72 (22 May 2007) 28676 (Panel Exhibit EC-12)))
430Panel Report, para. 8.208.
432Panel Report, para. 8.209.
434United States' other appellant's submission, para. 34.

weighted average-to-weighted average comparisons were made by recalculating these margins and
withdrawing the order in accordance with the results of this recalculation.
435 Furthermore, the United
States contends that, in finding that the United St ates failed to comply with the recommendations and
rulings of the DSB by using zeroing in the 2004-2005 and 2005-2006 administrative reviews, the
Panel applied a retroactive remedy that is not pe rmissible in the WTO system, because these reviews
covered entries occurring prior to the end of the reasonable period of time.
436 We addressed the
United States' other appeal earlier when we explained why we are of the view that these two
administrative reviews fell within the Panel's terms of reference 437, as well as in the previous section,
where we dealt with the scope of the United States' compliance obligations.
323. In section VI of this Report, we have found that the 2004-2005 administrative review in
Case 1 fell within the Panel's terms of referen ce because of its close nexus to the Section 129
determination and the DSB's recommendations and ruli ngs in the original pro ceedings. Accordingly,
we examine first whether the 2004-2005 admini strative review is inconsistent with the Anti-Dumping
Agreement or Article VI of the GATT 1994 and undermines the compliance achieved with the
recalculation of the margins of dumping in the Section 129 determination, and the consequent
revocation of the anti-dumping duty order.
324. According to the Appellate Body, whereas origin al investigations and administrative reviews
are distinct proceedings and serve distinct purposes, they form part of a continuum of events under a
single anti-dumping duty order. We recall that, in US – Stainless Steel (Mexico) , the Appellate Body
noted that "permit[ting] simple zeroing in pe riodic reviews would allow WTO Members to
circumvent the prohibition of zeroi ng in original investigations". 438 This was so because, in the first
periodic review after an original investigation, the duty assessment rate for each importer would take
effect from the date of the original imposition of anti-dumping duties. Thus, "[w]hen the initial cash
deposit rate is calculated in the original investiga tion without using zeroing, this means that the mere
act of conducting a periodic review would introduce zeroing following imposition of the anti-dumping
duty order." 439 In relation to the administrative revi ews at issue here, however, cash deposits
calculated with zeroing have been collected and final duty liability has been assessed with zeroing.
325. As we have noted earlier 440, in relation to the Cases at issu e in the original proceedings, a
subsequent administrative review de termination issued after the end of the reasonable period of time

435United States' other appellant's submission, paras. 38 and 39.
436United States' other appellant's submission, para. 42.
437Supra, paras. 236-258.
438Appellate Body Report, US – Stainless Steel (Mexico), para. 109.
439Appellate Body Report, US – Stainless Steel (Mexico), para. 109.
440Supra, para. 311.

in which zeroing is used, or, if no such review is requested, a determination after the end of the
reasonable period of time by which anti-dumping liability is assessed on the basis of cash deposit
rates calculated with zeroing, establishes a failure to comply with the recommendations and rulings of
the DSB. We have further noted above that measures that derive mechanically from the assessment of
duties, and that are taken in the ordinary course of the imposition of anti-dumping duties, establish a
failure to comply with the recommendations and rulings of the DSB to the extent that they are based
on zeroing and applied after the end of the reasona ble period of time, even if such a measure is
consequent to an administrative review determination issued before the end of that period.
326. In Case 1, the final duty liability for entri es in the period 2004-2005 was assessed in an
administrative review, the final results of which were issued on 22 June 2007, which is after the
expiration of the reasonable period of time on 9 April 2007. The anti-dumping duty order was
revoked pursuant to a Section 129 determination is sued on 9 April 2007 and effective as of 23 April
2007. The Panel noted that it is uncontested that the USDOC used zeroing in the calculation of the
margin of dumping for the sole respondent, Corus Engineering Steels Ltd. Indeed, "the Issues and
Decision Memorandum for that administrative review determination makes it clear that the USDOC
used zeroing in calculating Corus' margin of dumping."
441 As a result, the final duty liability was
assessed with the use of zeroing after the end of the reasonable period of time for the period 2004-
2005 when cash deposits set with zeroing had been co llected. The Appellate Body has found zeroing
to be inconsistent with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT
1994, regardless of whether zeroing was used only in the calculation of the final duty assessment rates
or also in the calculation of going-forward cash deposit rates. 442 The fact that no going-forward cash
deposit rate was set pursuant to the 2004-2005 admi nistrative review in Case 1 does not change the
fact that the final assessment of duty liability was done with zeroing. As a result, the United States
assessed and collected duties calculated using zer oing in violation of Article 9.3 of the Anti-Dumping
Agreement and Article VI:2 of the GATT 1994, and failed to comply with its obligations with respect
to the 2004-2005 administrative review determin ation issued on 22 June 2007, as well as the
assessment and liquidation instructions, related to the 2005-2006 administrative review that was
rescinded, issued on 16 and 23 April 2007 respectively. As we have noted earlier, these measures
derive mechanically from the assessment of duties, and were applied in the ordinary course of the

441USDOC, Issues and Decision Memorandum for the 2004-2005 Administrative Review of Certain
Hot-Rolled Carbon Steel Flat Products from the Netherlands; Final Results of Antidumping Duty
Administrative Review, published together with Certain Hot-Rolled Carbon Steel Flat Products from the
Netherlands; Final Results of Antidumping Duty Administrative Review, at pp. 12-14 (published in United
States Federal Register, Vol. 72 (22 May 2007) 28676 (Panel Exhibit EC-12). (Panel Report, para. 8.208)
442See Appellate Body Report, US – Zeroing (EC), para. 263(a)(i).

imposition of anti-dumping duties, with the implicati on that they are also covered by the compliance
obligations of the United States.
327. In the light of the above considerations, we uphold the Panel findings, in paragraphs 8.208
and 9.1(b)(i) of the Panel Report, that the United St ates acted inconsistently with Article 9.3 of the
Anti-Dumping Agreement and Article VI:2 of the GATT 1994 in its determination in the 2004-2005
administrative review and in issuing the consequent assessment instructions; and that, as a result of
the final results of this administrative review , the United States failed to comply with the
recommendations and rulings of the DSB to bring the original investigation in Certain Hot-Rolled
Carbon Steel Flat Products from the Netherlands (Case 1) into conformity.
328. As regards the rescission of the 2005-2006 admi nistrative review, as well as the consequent
assessment and liquidation instructions, we note that the USDOC issued a notice of rescission on
30 March 2007, and that the final liability for anti- dumping duties was assessed on the basis of cash
deposits previously calculated with zeroing.
443 Assessment instructions were issued on 16 April 2007,
and liquidation instructions on 23 Ap ril 2007, that is, after the end of the reasonable period of time.
Such assessment and liquidation instructions are measures "mechanically derived" from the final
assessment of anti-dumping duties, in the ordinary course of the imposition of such duties.
329. In the light of these considerations, we reverse the Panel's finding, in paragraphs 8.209
and 9.1(b)(iv) of the Panel Report, that the assessm ent instructions issued on 16 April 2007 and the
liquidation instructions issued on 23 April 2007 do not establish that the United States has failed to
comply with the recommendations and rulings of the DSB to bring the original investigation in
Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands (Case 1) into conformity with
its obligations under the covered agreements by virtue of those instructions. We find, instead, that
these instructions, derived mechanically from the assessment of final duty li ability in the ordinary
course of the imposition of anti-dumping duties, are me asures that were adopted after the end of the
reasonable period of time, and thus establish a failure to comply by the United States.
B. Case 6: Stainless Steel Wire Rod from Sweden
330. Case 6 concerned the use of zeroing in the USDOC's original investigation of stainless steel
wire rod from Sweden. 444 With respect to this Case, the USDOC published, on 9 May 2007, the
amended final results of the 2004-2005 administrative review covering entries from 1 September 2004

443European Communities' appellant's submission, para. 186 and footnote 269 thereto.
444USDOC, Notice of Antidumping Duty Order: Stainless Steel Wire Rod From Sweden, United States
Federal Register, Vol. 63, No. 178 (15 September 1998) 49329.

to 31 August 2005. In these results, the USDOC, on th e basis of a margin of dumping calculated with
zeroing, instructed Customs to collect anti-dumping duti es at a rate of 19.36 per cent. It also notified
Customs of the revised cash deposit rate for the exporter concerned, which was calculated on the basis
of zeroing. A Section 129 determination, effectiv e as of 23 April 2007, revoked the original order.
On 10 May 2007, the USDOC issued instructions to Customs informing it of the revocation resulting
from the Section 129 determination. These instructio ns also informed Customs that any cash deposits
paid on imports made on or after 23 April 2007 were to be refunded, and all imports made on or after
23 April 2007 would not be subject to the final assessment of anti-dumping duties.445
331. Given the evidence provided by the United St ates that no cash deposit was imposed on
imports covered by the anti-dumping duty order in this Case following the 2004-2005 administrative
review, and the absence of rebuttal of this eviden ce by the European Communities, the Panel found
that the European Communities failed to establish that the United States has not complied with the
recommendations and rulings of the DSB by virtue of having imposed new cash deposit requirements
with respect to Case 6.446
332. However, because zeroing was used in the ass essment of duties pursuant to the 2004-2005
administrative review, the Panel found that the United States acted inconsistently with Article 9.3 of
the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 in its determination in the
2004-2005 administrative review, and in issuing the consequent assessment instructions, and that, as a
result, the United States failed to comply with th e recommendations and rulings of the DSB to bring
the original investigation in Case 6 into conformity with the covered agreements.447
333. On appeal, the European Commun ities claims that the Panel erred in ignoring that: between
9 April and 23 April 2007, imports of stainless steel wire rod from Sweden were subject to cash
deposit requirements that reflected the methodology of zeroing; that these cash deposits were not
refunded; and that the imports that occurred during this period would be subject to a final assessment
of anti-dumping duties based on zeroing.
448
334. With respect to the results of the 2004-2005 administrative review and the assessment of
duties pursuant to that review, the European Communities agrees with the Panel's conclusions
regarding the results of the 2004-2005 administra tive review and the issuance of the assessment
instructions, but contests aspects of the reasoning th at led to these conclusions, more specially the

445Panel Report, paras. 8.210 and 8.211.
446Panel Report, para. 8.212.
447Panel Report, para. 8.213.

Panel's approach regarding the temporal scope of the implementation obligations of the United
States.
449 The European Communities also contends th at the Panel erred in failing to specifically
address its claims with respect to final liquidations.450
335. In its other appeal, the United States claims that the Panel erred in its analysis of Case 6,
because it ignored the fact that, as regards that Ca se, the recommendations and rulings of the DSB do
not extend to the use of the methodology of "simple zeroing" in administrative reviews.451 The United
States contends that it complied with the DSB' s recommendations and rulings by recalculating
without zeroing the margins challenged in the origin al investigation, and withdrawing the order in
accordance with the results of this recalculation. 452 Furthermore, the United States argues that, in
finding a failure on the part of the United States to comply with the DSB's recommendations and
rulings by using zeroing in the 2004-2005 administ rative review, the Panel applied a retroactive
remedy that is not permissible in the WTO system.
453 We addressed the United States' other appeal
earlier when we explained why we are of the view th at this review fell within the Panel's terms of
reference454, as well as in the previous section where we dealt with the scope of the United States'
compliance obligations.
336. The European Communities' claim on appeal relates to imports of stainless steel wire rod
from Sweden between 9 April 2007 (the expiry of the reasonable period of time) and 23 April 2007
(the date on which the revocation of the anti-dumping duty order became effective). This claim is a
specific application of the European Communities' appeal regarding the a lleged non-existence of
measures taken to comply between 9 April 2007 and 23 April/31 August 2007, which we address in
section X of this Report.
337. In Case 6, the final duty liability for entri es in the period 2004-2005 was assessed in an
administrative review that was concluded on 9 May 2007 by the publication of amended final results.
The anti-dumping duty order was revoked pursuant to a Section 129 determination issued on 9 April
2007 and effective 23 April 2007. Consequently, as th e Panel found, cash deposits paid on imports of
stainless steel wire rod from Sweden made on or after 23 April 2007 were refunded, and no cash
deposits were imposed on imports of stainless steel wire rod from Sweden following the issuance of
the amended final results of the 2004-2005 administ rative review. However, as the Panel noted with
respect to the assessment of duties pursuant to the 2004-2005 administrative review, the United States

451United States' other appellant's submission, para. 34.
452United States' other appellant's submission, paras. 38 and 39.
453United States' other appellant's submission, para. 42.
454Supra, paras. 236-258.

has not contested that it used zeroing in the calcula tion of the margin of dumping for Fagersta (the
sole exporter concerned by the review). 455 As a result, cash deposit rates established with the use of
zeroing were applied to entries between 9 April 2007 (the expiry of the reasonable period of time) and
23 April 2007 (the date on which the revocation of the anti-dumping duty order became effective).
338. Accordingly, we uphold the Panel's finding, in paragraphs 8.213 and 9.1(b)(i) of the Panel
Report, that the United States acted inconsistently with Article 9.3 of the Anti-Dumping Agreement
and Article VI:2 of the GATT 1994 in issuing the results of the 2004-2005 administrative review on
9 May 2007, as well as the consequential assessment and liquidation instructions. We also uphold the
Panel's finding, in paragraphs 8.213 and 9.1(b)(i) of the Panel Report, that the United States failed to
comply with the recommendations and rulings of the DSB to bring the original investigation in
Stainless Steel Wire Rod from Sweden (Case 6) into conformity with its WTO obligations.
339. We note that, apart from the alleged non-existe nce of measures taken to comply between
9 April 2007 and 23 April/31 August 2007, the Eu ropean Communities does not appeal the Panel's
finding, in paragraphs 8.212 and 9.1(b)(v) of the Pa nel Report, that the United States has not failed to
comply with the recommendations and rulings of th e DSB in the original proceedings and has not
acted inconsistently with Articles 2.4.2 and 9.3 of the Anti-Dumping Agreement and Article VI:2 of
the GATT 1994 by establishing a new cash depos it rate based on zeroing in the 2004-2005
administrative review determination in Stainless Steel Wire Rod from Sweden , because, due to the
revocation of the anti-dumping dut y order, no cash depos it requirement was actually imposed after
23 April 2007.
C. Case 31: Ball Bearings and Parts Thereof from the United Kingdom
340. This Case concerned the assessment of duties and the establishment of cash deposit rates on
ball bearings and parts thereof from the United Kingdom 456, produced and exported by NSK Bearings
Europe Ltd. ("NSK") and the Barden Corporation UK. In the original proceedings, the use of "simple
zeroing" was found to be inconsistent " as applied" with Article 9.3 of the Anti-Dumping Agreement
and Article VI:2 of the GATT 1994, in the context of an administrative review covering entries from
1 May 2000 through 30 April 2001.

455Panel Report, para. 8.213.
456USDOC, Ball Bearings and Parts Thereof from Fr ance, Germany, Italy, Japan, and the United
Kingdom; Final Results of Antidumping Duty Administrative Reviews, United States Federal Register, Vol. 67,
No. 169 (30 August 2002) 55780.

341. With respect to NSK, no administrative review has been requested after the 2000-2001
administrative review.
457 Consequently, the cash deposit rate applied after the expiry of the
reasonable period of time to imports from NSK re flected the margin of dumping calculated with
zeroing in the 2000-2001 administrative review. 458 The Panel noted that the "United States admits
that the cash deposit rate for NSK established in the administrative review challenged in the original
dispute, which concerned covere d imports entered from 1 May 20 00 through 30 April 2001, remains
in effect."459
342. The Panel found that the United States failed to comply with the recommendations and
rulings of the DSB to bring its measure into co nformity with the covered agreements, as it has
continued to apply to imports the cash deposit rate established in an administrative review
determination found to be WTO-in consistent as a result of the use of zeroing in the calculation of
margins of dumping.460 The Panel recalled that, to implement the recommendations and rulings of the
DSB, a Member must ensure that the actions it undertakes after the end of the reasonable period of
time are consistent with its obligations under the co vered agreements. For the Panel, the continuing
requirement to provide cash deposits constitutes such an action. 461 In response to an argument by the
United States, the Panel discussed the case of a cash deposit requirement based on zeroing and applied
as of the end of the reasonable period of time, but resulting from a determination that was not found to
be inconsistent in the original proceedings, su ch as a determination resulting from a subsequent
review. The Panel expressed the view that, in orde r to comply with the r ecommendations and rulings
of the DSB, the United States had to ensure that any cash deposit rate applie d after the end of the
reasonable period of time in relation to one of the measures at issue in the original proceedings was
not one that derived from a margin of dumping calcu lated with zeroing, even where the cash deposit
rate was established as a result of an administrativ e review conducted subsequently to a measure at
issue in the original proceedings. According to the Panel, concluding otherwise would mean that the
United States is allowed to circumvent its obligati on to comply with the recommendations and rulings
of the DSB by the mere replacement of the cash deposit rates established in the measures challenged
in the original proceedings by subsequent ones est ablished in administrative reviews in which zeroing
was again used.462 The Panel refrained from making a specifi c finding with respect to the assessment
after the end of the reasonable period of time of duty liability for imports from NSK, because it was of

457See Annex to Request for the Establishment of a Panel by the European Communities,
WT/DS294/25, Panel Report, Annex A-1.
458Panel Report, paras. 8.214 and 8.215.
460Panel Report, para. 8.216.
461Panel Report, footnote 820 to para. 8.218.
462Panel Report, para. 8.218.

the view that the European Communities did not identify any specific duty assessment determination
after the end of the reasonable period of time.463
343. In response to questioning at the oral heari ng, the European Communities confirmed that it
appeals the analysis of Case 31 made by the Panel. We understand, however, that the European
Communities does not appeal the Panel's findings re lating to the application of cash deposit rates
reflecting zeroing after the end of the reasonable period of time. 464 Rather, the European
Communities challenges on appeal the Panel's decisi on not to make a specific finding with respect to
the assessment after the end of the reasonable period of time of duty liability for imports from NSK.
344. We recall that, as far as Case 31 is concerned, the recommendations and rulings of the DSB
cover the use of zeroing in the assessment of anti- dumping duty liability and in the establishment of
cash deposit rates. In the United States, duty liability is assessed and going-forward cash deposit rates
are established in an administrative review or, if no administrative review is requested, at the time
when it is determined that duties will be assessed on the basis of the collected cash deposits.
345. In Case 31, no subsequent administrative re view was requested by NSK after the 2000-2001
administrative review. Thus, the cash deposit rates applied on imports from NSK after the end of the
reasonable period of time were derived from the latest determination in which duties were assessed on
the basis of the collected cash deposits, and reflect ed the margin of dumping calculated with zeroing
in the 2000-2001 administrative review. In C ase 31, the anti-dumping duty order was published on
15 May 1989.465 Under United States law, the right to request an administrative review lapses at the
end of the anniversary month of the publication of the order, that is, in this Case, 31 May 2007. 466
When the right to request an administrative review lapsed on that date, duties were finally assessed on
the basis of the collected cash deposits. We conc lude that the duty liability determination on 31 May
2007 made on the basis of cash deposits previously co llected constitutes a failure to comply with the
recommendations and rulings of the DSB in relati on to Case 31, as the assessed duties reflected a
margin of dumping calculated with zeroing and the assessment took place after the end of the
reasonable period of time.
346. On the basis of the above considerations, we find that the Panel erred in refraining, in
paragraph 8.217 of the Panel Report, to make a sp ecific finding with respect to the assessment after
the end of the reasonable period of time of duty liability for imports from NSK in Ball Bearings and

463Panel Report, para. 8.217.
464Panel Report, para. 8.218.
465United States Federal Register, Vol. 54 (15 May 1989) 20909.
466United States Code of Federal Regulations, Title 19, Section 353.53a.

Parts Thereof from the United Kingdom (Case 31), and that duties assessed after the end of the
reasonable period of time on the basis of cash depo sits reflecting zeroing establish a failure by the
United States to comply with the recommendations and rulings of the DSB.
D. Cases 18 through 24 and 27 through 30
347. Before the Panel, the European Communiti es claimed that, with respect to Cases 18
through 24 and 27 through 30
467 (as well as Case 31 that was discussed in the previous section), duties
or cash deposit rates based on zeroing remained in place on and after 9 April 2007.468
348. The Panel did not, however, examine these Cases on the grounds that it did not have before it
substantive arguments or supporting materials in rela tion to these Cases that would have allowed it to
make any additional substantive findings.469
349. The European Communities claims that the Pa nel erred in not reviewing these Cases and,
more specifically, that the Panel failed to comply with its functions as required by Article 11 of the
DSU. In the event that it prevails on this clai m, the European Communities requests the Appellate
Body to complete the analysis and find that, by c ontinuing to maintain in place duties or cash deposit
rates with respect to these Cases, the United St ates has acted inconsistently with the covered
agreements, and that this constitutes a failure to comply with the rulings and recommendations of the
DSB in the original proceedings. 470 The European Communities contends that the Panel had
sufficient evidence before it to make findings on these Cases.471
350. The United States contends that the Panel correctly declined to make findings with respect to
11 of the 16 administrative reviews at issue in th e original proceedings for which anti-dumping duty
orders remain in place. The United States disagrees with the Panel's statement that the application,
after the end of the reasonable period of time, of cash deposit rates calculated with zeroing would

467See Annex to Request for the Establishment of a Panel by the European Communities,
WT/DS294/25, Panel Report, Annex A-1.
469Panel Report, para. 8.202.
470European Communities' appellant's submission, paras. 194 and 197.
471The European Communities refers to a number of extracts of its request for the establishment of a
panel and various submissions it made to the Panel: Request for the Establishment of a Panel by the European
Communities, WT/DS294/25, paras. 2, 4, and 7, Panel Report, Annex A-1; European Communities' first written
submission to the Panel, paras. 69 and 76-83, including footnote 74 to para. 82; European Communities' second
written submission to the Panel, para. 62; European Communities' opening statement at the Panel meeting,
para. 44; European Communities' closing statement at the Panel meeting, para. 5; European Communities'
response to Panel Question 8, para. 34; and Annex B to European Communities' response to Panel Question 6.

constitute a failure to comply with the DSB's r ecommendations and rulings in this dispute, and
considers the Panel's statement without legal effect.472
351. The Panel considered that it did not have su fficient evidence before it and abstained from
making additional substantive findings on Cases 18 th rough 22, 24, and 27 through 30. Concerning
Case 24, the European Communities has adduced in Panel Exhibit EC-17 the USDOC Issues and
Decision Memorandum and United States Federal Register Notice that make explicit references to the
use of zeroing in the determination of margins of dumping. 473 Concerning Cases 18 through 22 and
27 through 30, the European Communities, in its request for the establishment of a panel, lists
references to Federal Register Notices pertaining to the s ubsequent reviews it challenged. 474 A s
regards Case 23, the only piece of evidence me ntioned by the European Communities was in
paragraphs 81 and 82 of its first written submission to the Panel. This piece of evidence relates to a
subsequent administrative review that was conclude d after the establishment of the Panel, and fell
outside the terms of reference of the Panel as it wa s not indicated in the Annex to the panel request,
although it may be relevant as evidence.
352. In any event, we observe that, with respect to Cases 18 through 24 and 27 through 30, the
results of the subsequent reviews listed in the Anne x to the European Communities' panel request that
fell within the Panel's terms of reference were issu ed before the expiry of the reasonable period of
time.

473USDOC, Issues and Decision Memorandum for the Final Results of the Administrative Review of
the Antidumping Duty Order on Granular Polytetrafluoroethylene Resin from Italy (26 November 2007),
at pp. 11-12 (published together with USDOC, Notice of Final Results of Antidumping Duty Administrative
Review: Granular Polytetraflu oroethylene Resin from Italy, United States Federal Register , Vol. 72
(26 November 2007) 65939 (Panel Exhibit EC-17)).
474Annex to Request for the Establishment of a Pa nel by the European Communities, WT/DS294/25,
Panel Report, Annex A-1. For Case 18 , Stainless Steel Plate in Coils from Belgium : two subsequent
administrative reviews ( United States Federal Register , Vol. 70 (19 January 2005) 2999; and Vol. 70
(7 December 2005) 72789); and one sunset review ( United States Federal Register , Vol. 70 (18 July 2005)
41202). For Cases 19 and 20, Certain Pasta from Italy: three subsequent administrative reviews (United States
Federal Register, Vol. 69 (10 February 2004) 6255; Vol. 69 (27 April 2004) 22761; and Vol. 70 (9 February
2005) 6832); and one sunset review ( United States Federal Register , Vol. 69 (27 April 2004) 22761). For
Cases 21 and 22 , Stainless Steel Sheet and Strip in Coils From Italy : two subsequent administrative reviews
(United States Federal Register , Vol. 68 (12 December 2003) 69382; and Vol. 70 (17 March 2005) 13009);
and one sunset review ( United States Federal Register, Vol. 70 (4 August 2005) 44886). For Cases 27 and 28 ,
Stainless Steel Sheet and Strip in Coils From Germany : four subsequent administrative reviews ( United States
Federal Register , Vol. 69 (10 February 2004 ) 6262; Vol. 69 (20 December 2004) 75930; Vol. 70
(13 December 2005) 73729; and Vo l. 71 (13 December 2006) 74897) ; and one sunset review ( United States
Federal Register, Vol. 70 (4 August 2005) 44886). For Cases 29 and 30 , Ball Bearings and Parts Thereof from
France and Italy : five subsequent administrative reviews ( United States Federal Register , Vol. 68 (16 June
2003) 35623; Vol. 68 (24 July 2003) 43712; Vol. 69 (15 September 2004) 55574; Vol. 70 (16 September
2005) 54711; and Vol. 71 (14 July 2006) 40064); and one sunset review ( United States Federal Register ,
Vol. 71 (15 September 2006) 54469). These Federal Register Notices were not themselves submitted as
exhibits during the Panel proceedings.

353. Given that there are insufficient undisputed f acts on record, we are not in a position to
complete the analysis and therefore decline to rule on whether the Panel did not comply with its
duties under Article 11 of the DSU.
354. Having said that, we note our earlier conclusions that subsequent administrative reviews in
which zeroing is used after the end of the reasonabl e period of time establish a failure by the United
States to comply with the recommendations and rulings of the DSB. Furthermore, we note the Panel's
statement that:
... in order to comply with the recommendations and rulings of the
DSB, the United States had to ensure that any cash deposit rate
applied after the end of the reasona ble period of time in relation to
one of the measures at issue in the original dispute was not one that
derived from a margin of dumping calculated with zeroing, even
where that cash deposit was established as a result of a subsequent
review, and not a measure at issue in the original dispute.
Concluding otherwise would mean that the United States is allowed
to circumvent its obligation to bring its measures and action into
conformity with those recommendations and rulings by the mere
replacement of the cash deposits established in the measures
challenged in the original dispute by subsequent ones established in
administrative reviews in which zeroing was again used.
475
355. We share the Panel's view that the United St ates fails to comply with the recommendations
and rulings of the DSB if it continues to apply cash deposits established on the basis of zeroing after
the end of the reasonable period of time in respect of the Cases at issue here.
IX. The Subsequent Sunset Reviews
356. We now turn to the European Communities' app eal of the Panel's finding that the European
Communities has not demonstrated that the Un ited States failed to comply with the DSB's
recommendations and rulings in the subsequent sunset reviews at issue.
A. The Panel's Findings
357. Before the Panel, the European Communities cl aimed that the United States had extended the
measures challenged in the original proceedings pu rsuant to sunset review proceedings concluded
before and after 9 April 2007, and which relied on dumping margins calculated with zeroing. The
European Communities argued that, by relying in the subsequent sunset review proceedings on

475Panel Report, para. 8.218. Footnote 820 to that paragraph reads: "... a Member must, to implement
the DSB's recommendations and rulings, ensure that actions it undertakes after the end of the reasonable period
of time are consistent with its obligations under the DS B. The continuing requirement to provide cash deposits
constitutes, in our view, such an action."

margins calculated in prior proceedings using zer oing, the United States did not comply with its
obligations pursuant to Articles 2.1, 2.4, and 2.4.2 of the Anti-Dumping Agreement , because these
margins were not based on a "fair comparison" and were not calculated for the product as a whole,
and as a result the United States acted in breach of Article 11.3 of the Anti-Dumping Agreement.476
358. The Panel found that only those subsequent sunset reviews in which the likelihood-of-
dumping determination by the USDOC had been made after the adoption of the DSB's
recommendations and rulings fell within its terms of reference, because they po tentially affected the
United States' implementation of the DSB's recommendations and rulings. 477 The Panel therefore
addressed the claims by the European Communities w ith respect to only the following sunset review
determinations:
(i) Preliminary likelihood-of-dumping determination by the USDOC in Stainless Steel
Bar from Germany (Case 3) (30 May 2007)478;
(ii) Final likelihood-of-dumping determinations by the USDOC in Stainless Steel Bar
from France (Case 2), Stainless Steel Bar from Italy (Case 4), and Stainless Steel Bar
from the United Kingdom (Case 5) (4 June 2007)479; and
(iii) Final likelihood-of-dumping determination by the USDOC in Certain Pasta from
Italy (Case 19) (5 February 2007).480
359. According to the Panel, "[i]t seems clear ... from the Issues and Decision Memoranda in these
cases that the findings that dumping had continued at above de minimis levels since the issuance of
the relevant [anti-dumping duty] order refer to dumping margins that had been calculated in
administrative reviews, using zeroing." 481 The Panel, however, ruled that, "[e]ven assuming that the
European Communities has made a prima facie case that the USDOC relied on dumping margins
calculated with zeroing in these sunset reviews" 482, it could not make the findings requested by the

476Panel Report, para. 8.130.
477See section VI of this Report.
478USDOC, Stainless Steel Ba r from Germany; Preliminary Resu lts of the Sunset Review of
Antidumping Duty Order, United States Federal Register , Vol. 72, No. 103 (30 May 2007) 29970. (See Panel
Exhibit EC-41)
479USDOC, Stainless Steel Bar from France, Italy, South Korea and the United Kingdom; Final Results
of the Expedited Sunset Reviews of the Antidumping Duty Orders, United States Federal Register , Vol. 72,
No. 106 (4 June 2007) 30772 (Panel Exhibit EC-40).
480USDOC, Notice of Final Results of Expedited Sunset Reviews of the Antidumping Duty Orders:
Certain Pasta from Italy and Turkey, United States Federal Register , Vol. 72, No. 23 (5 February 2007) 5266
(Panel Exhibit EC-52).
481Panel Report, para. 8.138.
482Panel Report, para. 8.139.

European Communities. The Panel found that the European Communities had not demonstrated that
"the USDOC determinations it challenges resulted in the continuation of the underlying [anti-dumping
duty] order as of the time this Panel was established."
483
360. The Panel noted that, in Cases 2, 3, 4, and 5, "the sunset review proceedings had not been
concluded as of that date, and eventually resulted in the revocation of the orders, following a negative
likelihood-of-injury determination by the USITC" and that, in Case 19, "the proceedings had not been
concluded, and thus, there was no continuation of the underlying order as of this Panel's
establishment."484 The Panel concluded that "any failures by the United States in these sunset reviews
had not yet materialized as at the date of the establis hment of this Panel, and thus had no effect on the
US implementation of the DSB's recommendations and rulings."485
361. The Panel, therefore, declined to make any findings "in respect of the EC claims of violation
under Articles 2.1, 2.4, 2.4.2 and 11.3 of the Anti-Dumping Agreement in subsequent sunset review
determinations" and "with respect to the EC claim that the United States failed to comply with the
DSB's recommendations and rulings because the United States relied on margins of dumping
calculated in subsequent administrative reviews in the context of sunset review determinations."
486
B. Claims and Arguments on Appeal
362. The European Communities claims that all the subsequent sunset reviews mentioned in the
Annex to the European Commun ities' Article 21.5 panel request 487 fell within the Panel's terms of
reference, including those sunset reviews wher e the USDOC's likelihood-of-dumping determination
was issued prior to the adoption of the DSB's recommendations and rulings.488
363. The European Communities further claims that th e Panel erred in finding that the European
Communities has not demonstrated that the Un ited States failed to comply with the DSB's

483Panel Report, para. 8.139. (footnote omitted)
484Panel Report, para. 8.139. (footnote omitted)
485Panel Report, para. 8.140.
486Panel Report, para. 8.141. (footnote omitted)
487A total of 16 sunset reviews were mentioned in the Annex to the European Communities' panel
request, in Cases 2, 3, 4, 5, 6, 7, 8, 14, 18, 19, 22, 24, 28, 29, 30, and 31. (See Annex to Request for the
Establishment of a Panel by the European Communities, WT/DS294/25, Panel Report, Annex A-1)
488The Panel found that 11 of the sunset reviews mentioned in the Annex to the European
Communities' panel request did not fall within its te rms of reference, becaus e the likelihood-of-dumping
determinations by the USDOC were made before the adoption of the recommendations and rulings by the DSB
in the original proceedings. These sunset reviews concern Cases 6, 7, 8, 14, 18, 22, 24, 28, 29, 30, and 31.
(European Communities' appellant's submission, para. 100 and footnote 144 thereto)

recommendations and rulings in the s ubsequent sunset review proceedings 489 it considered to fall
within its terms of reference. 490 According to the European Commun ities, "the fact that continuation
orders had not yet been published with respect to some subsequent sunset reviews at the time the
Panel was established does not mean that the USDOC's dumping determinations made in the context
of those sunset review proceedings are irrelevant for assessing the US compliance with the DSB
recommendations and rulings in the original dispute." 491 In the view of the European Communities,
the relevant action that should serve to assess compliance by the United States is the final
determination by the USDOC of likelihood of dumping, rather than the publication of the continuation
order.492
364. The European Communities argues that "the Pa nel disregarded its ma ndate and failed to
comply with its functions as required by Article 11 of the DSU when failing to address the EC claim
that the United States failed to comply with the DSB recommendations in the original dispute, since
certain aspects of the measures at issue in the original dispute ( i.e., the dumping margins based on
zeroing) remained in place", and that "the United States relied on those margins for the determination
of likelihood of recurrence of dum ping in subsequent sunset review proceedings concerning the same
anti-dumping 'measure'."493
365. The European Communities requests the Appellate Body to reverse the Panel's findings and
to complete the analysis and find that, by relying in the sunset review proceedings challenged by the
European Communities on margins calculated in prio r proceedings using zeroing, the United States
did not comply with its obligations pursuant to Articles 2.1, 2.4, 2.4.2, and 11.3 of the Anti-Dumping
Agreement and Articles 19.1 and 21.3 of the DSU, and failed to comply with the DSB's
recommendations and rulings in the original proceedings.494
366. The United States responds that none of the subse quent sunset reviews were within the terms
of reference of the Panel, because they we re not measures "taken to comply" with the
recommendations and rulings of the DSB. 495 The United States also argues that "the Appellate Body
should affirm the compliance Panel's finding that th e EC failed to demonstrate that the [USDOC's]

489The Panel found that five of the sunset reviews mentioned in the Annex to the European
Communities' panel request fell within its terms of reference, because the likelihood-of-dumping determinations
by the USDOC were made after the adoption of the recommendations and rulings by the DSB in the original
proceedings. These sunset reviews concern Cases 2, 3, 4, 5, and 19. (See Panel Report, para. 8.124)
491European Communities' appellant's submission, para. 112. (original emphasis)
495United States' appellee's submission, paras. 49 and 55.

determinations it challenged caused the continuation of the orders at the time the compliance Panel
was established."
496
367. The United States argues that "[t]he conclusion of the sunset review is not based solely on
[the USDOC's] determination", but requires also a determination by the USITC as to "whether the
revocation of the antidumping duty order would likely lead to a continuation or recurrence of material
injury".497 According to the United States, a prima facie showing that the USDOC's determination
caused the continuation of the order is impossible without a final, conclu sive determination to
continue the order. The United States adds that "[ t]his is illustrated by the fact that for five of the
orders for which the Panel found a sunset review to fa ll within its terms of refe rence, four ultimately
were revoked."498
368. The United States also argues that, should the Appellate Body find that the Panel wrongly
excluded any subsequent reviews, including any sunset reviews, from the scope of these proceedings,
the Appellate Body could not complete the anal ysis, because the European Communities provided no
arguments to show that these meas ures are inconsistent with the Anti-Dumping Agreement, nor did it
"identify the 'factual findings of the Panel [or] undis puted facts in the Panel r ecord' that would enable
the Appellate Body to complete the analysis with regard to any particular measure or claim".499
C. Analysis
369. We have reversed, in section VI of this Repor t, the Panel's findings that certain subsequent
reviews, which were concluded before the adoption of the recommendations and rulings of the DSB
in the original proceedings, did not fall w ithin the scope of these compliance proceedings. 500 T h e
European Communities claims that the United States failed to comply with the recommendations and
rulings of the DSB in all the sunset review pro ceedings mentioned in the Annex to the European
Communities' Article 21.5 panel request and requests the Appellate Body to complete the analysis
with respect to those sunset revi ews that the Panel had found to fall outside its terms of reference.
We, therefore, address the claims by the European Communities in respect of these sunset reviews

498United States' appellee's submission, para. 58. (footnote omitted)
499United States' appellee's submission, para. 46 (quoting Appellate Body Report, US – Softwood
Lumber IV, para. 118).
500The subsequent sunset reviews, which we consider al so to fall within the Panel's terms of reference,
are in Cases 24, 28, 29, 30, and 31. These sunset revi ews were excluded from the scope of these compliance
proceedings because the relevant likelihood-of-dumping determinations by the USDOC had been made before
the adoption of the DSB's recommendations and rulings in the original proceedings.

together with its claims in respect of the sunset reviews that the Panel considered to be within its
terms of reference.
370. We begin our analysis by addressing the appeal by the European Communities against the
Panel's findings regarding those sunset reviews that the Panel considered to fall within its terms of
reference (that is, in Cases 2, 3, 4, 5, and 19). We then consider whether we can complete the analysis
with respect to these sunset reviews and with respect to other sunset reviews that the Panel excluded
from its terms of reference, but which we have found to fall within the Panel's terms of reference (that
is, in Cases 24, 28, 29, 30, and 31).
1. Sunset Reviews in Cases 2, 3, 4, 5, and 19
371. We start by observing that, of the five sunset re view determinations th e Panel considered to
be within its terms of reference, four resulted in revocation orders 501 (Cases 2, 3, 4, and 5) and one
resulted in a continuation order502 (Case 19) after the Panel was established. These sunset reviews fall
into three subcategories in terms of the determinati ons that the authorities had made by the date of the
establishment of the Panel (25 September 2007). Th e first subcategory includes Case 3, in which the
USDOC had made an affirmative preliminary like lihood-of-dumping determination by the date of
establishment of the Panel; the second subcategory includes Cases 2, 4, and 5, in which the USDOC
had made affirmative final likeli hood-of-dumping determinations by th e date of establishment of the
Panel; and the third subcategory includes Case 19, in which the USDOC had made an affirmative
final likelihood-of-dumping determ ination and the USITC had made an affirmative injury
determination by the date of establishment of the Panel. In all sunset reviews considered by the Panel,
the USDOC had not yet issued a formal continuation order at the time the Pa nel was established. We
address below the Panel's findings with respect to each of the three subcategories of sunset review
determinations.
372. With respect to the first category of sunset revi ew determinations, we note that in Case 3, the
USDOC had made an affirmative preliminary likel ihood-of-dumping determination on 30 May 2007.
A final affirmative likelihood-of-dumping determin ation was made by the USDOC on 5 October

501The revocation orders were issued by the USDOC on 7 February 2008, following negative injury
determinations by the USITC. (USDOC, Revocation of Antidumping Duty Orders on Stainless Steel Bar from
France, Germany, Italy, South Korea and the United Kingdom and the Countervailing Duty Order on Stainless
Steel Bar from Italy, United States Federal Register , Vol. 73, No. 26 (7 February 2008) 7258 (Panel
Exhibit US-13)) These revocation orders were effective as from 7 March 2007.
502The continuation order was issued by the USDOC on 12 October 2007, following an affirmative
injury determination by the USITC. (USDOC, Certain Pasta from Turkey and Italy: Continuation of
Countervailing Duty and Antidumping Duty Orders, United States Federal Register , Vol. 72, No. 197
(12 October 2007) 58052)

2007, that is, 10 days after Panel establishment. The USITC then made a negative injury
determination on 31 January 2008 and the US DOC revoked the anti-dumping duty order on
7 February 2008, and effective as of 7 March 2007.
373. We observe that, in its preliminary likeli hood-of-dumping determination in Case 3, the
USDOC stated that it "preliminarily determines that revocation of the antidumping duty order on
[stainless steel bar] from Germany is likely to lead to continuation or recurrence of dumping" at
specified margins, and invited interested parties to submit comments on the preliminary results within
certain deadlines. The USDOC also explained that it would "issue a notice of final results of this
sunset review, which will include the results of its analysis of issues raised in any [comments
submitted by the interested parties], no later than September 29, 2007."
 503
374. In US – Continued Zeroing , the Appellate Body found that the European Communities'
challenge of a preliminary determin ation of likelihood of dumping in a sunset review was premature,
considering that such preliminary results could be modified by the final results. The Appellate Body
reasoned that, due to the preliminary nature of the USDOC's determination, it failed to see how the
European Communities could establish that "the US DOC would have relied on the margin calculated
with zeroing in deciding to continue the duty."504
375. In our view, the evidence before the Panel in these compliance proceedings regarding the
sunset review determination in Case 3 does not warrant a conclusion different from the one reached
by the Appellate Body in US – Continued Zeroing . In view of the preliminary nature of the
determination by the USDOC in Case 3, we consider that the European Communities' challenge of the
USDOC's preliminary determination was premature. Therefore, we find that the Panel did not err in
finding, in paragraph 8.140 of the Panel Report, th at the European Communities has not demonstrated
that the United States failed to comply with the recommendations and rulings of the DSB in respect of
the sunset review in Case 3.
376. Regarding the second subcategory of sunset re views in Cases 2, 4, and 5, the USDOC had
made final likelihood-of-dumping determinations on 4 June 2007, but when the Panel was established
on 25 September 2007, the sunset review proceedings were still pending before the USITC, which had
not yet determined whether the expiry of the anti-dumping duty order would be likely to lead to the
continuation or recurrence of injury. The USITC su bsequently made negative injury determinations

503Supra, footnote 478, at 29970.
504Appellate Body Report, US – Continued Zeroing, para. 210.

on 31 January 2008 and the USDOC revoked the an ti-dumping duty order on 7 February 2008 with
respect to all these Cases with an effective date of 7 March 2007.505
377. We observe that, while the USDOC's likeli hood-of-dumping determ inations should be
consistent with Article 11.3 of the Anti-Dumping Agreement, a sunset review is not completed in the
United States until both the USDOC and the USITC have made likelihood-of-dumping and
likelihood-of-injury determinations. We further note that these are compliance proceedings and that
whether or not the United States has ultimately fa iled to comply with the recommendations and
rulings of the DSB depends on whether any alle gedly WTO-inconsistent likelihood-of-dumping
determinations by the USDOC have actually resu lted in the continuation of the anti-dumping duty
orders.
378. In US – Continued Zeroing , the Appellate Body dealt w ith challenges by the European
Communities of two final likelihood- of-dumping determinations by the USDOC in sunset reviews.
The Appellate Body observed that both sunset re view proceedings were still pending before the
USITC at the time the panel was established and that "[t]hus, the USITC had not yet determined, for
either case, whether expiry of the anti-dumping duty order would be likely to lead to the continuation
or recurrence of injury."506 In such circumstances, the Appellate Body considered that completing the
analysis as to whether these measures were inconsis tent with the covered agreements would not be
appropriate.
379. In the present dispute, the anti-dumping duty or ders in Cases 2, 4, and 5 were revoked on
7 February 2008 by the USDOC following negative injury determinations by the USITC (these
revocations were effective as from 7 March 2007, prio r to the end of the reasonable period of time).
The Panel declined to assess the WTO-consistency of the USDOC's affirmative final likelihood-of-
dumping determinations in those sunset reviews that resulted in revocations orders after the Panel was
established.507
380. As we have noted above, these are compliance proceedings and the issue before the Panel was
whether the United States had failed to comply; th at is, the Panel was called on to establish whether
the USDOC's determinations in these sunset re views had any impact on compliance by the United
States. We consider that the USDOC's affirmative final likeli hood-of-dumping determinations in
these sunset reviews did not ultimately undermine compliance by the United States with the

505Supra, footnote 478, at 29970.
506Appellate Body Report, US – Continued Zeroing, para. 211. (footnote omitted)
507The anti-dumping duty order was also revoked in Case 3 on 7 February 2008, effective 7 March
2007. We observe, however, that for different reasons we have upheld the Panel's finding concerning Case 3.
Therefore, in the analysis that follows, we limit our examination to Cases 2, 4, and 5.

recommendations and rulings of the DSB, consid ering that the anti-dumping duty orders were
revoked at the end of the sunset reviews with an effe ctive date of 7 March 2007. We consider this to
be the case even assuming that the European Communities had demonstrated that these likelihood-of-
dumping determinations relied on ma rgins of dumping calculated using zeroing. We wish to
underline that we are not determining whether or not the USDOC's final likelihood-of-dumping
determinations in these sunset reviews were in compliance with the recommendations and rulings of
the DSB after the end of the reasonable period of time. However, we consider that these
determinations do not ultimately undermine compli ance by the United States, considering that the
sunset reviews resulted in revoca tion orders and that these revocati on orders became effective on a
date prior to the end of the reasonable period of time.
381. Under these circumstances, we do not consider it appropriate to conclude that the United
States failed to comply with the recommendations and rulings of the DSB in the original proceedings.
We therefore decline to make a finding on whether the Panel erred in not ruling, in paragraph 8.141 of
the Panel Report, on the European Communities' clai m that the United States failed to comply with
the recommendations and rulings of the DSB in the sunset reviews in Cases 2, 4, and 5.
382. Finally, we consider the Panel's findings with respect to the third subcategory of sunset
determinations, which includes Case 19. We reca ll that, in Case 19, both the USDOC and the USITC
had made their respective final likelihood-of-dumpi ng and likelihood-of-injury determinations by the
time the Panel was established. However, the USDOC issued a continuation order on 12 October
2007, after the Panel was established on 25 September 2007.
383. We recall that, in Chile – Price Band System , the Appellate Body found that a panel could
examine amendments to a measure that post-dated it s establishment, provided they did not change the
essence of the measure at issue.
508 In the present case, we observe that, even if the continuation order
post-dated the establishment of the Panel, it was is sued only a few days after this date and does not
change the essence of the determinations under this sunset review. We consider that the continuation
order is relevant in judging compliance by the Unit ed States with the recommendations and rulings of
the DSB. We also observe that, at the time the Panel was established, both determinations required by
Article 11.3 of the Anti-Dumping Agreement in a sunset review had been made and, therefore,

508Appellate Body Report, Chile – Price Band System, para. 139.

considering that both determina tions were affirmative, the sunset review would result in a
continuation order by operation of law509 in the United States' anti-dumping system.510
384. We are of the view that the Panel should have c onsidered that this sunset review resulted in a
continuation order in its evaluation of whether it af fected compliance by the United States with the
recommendations and rulings of the DSB in this partic ular sunset review. Thus, we disagree with the
Panel that the fact that the proceedings had not been formally concluded in Case 19 prevented it from
considering the effects of the sunset review on the implementation of the DSB's recommendations and
rulings by the United States.511
385. We therefore reverse the Panel's findings, in paragraph 8.140 the Panel Report, that any
failure by the United States in the sunset review in Case 19 had not yet materialized as of the date of
establishment of the Panel and thus had no effect on the United States' implementation of the DSB's
recommendations and rulings and that, as a con sequence, the European Communities has not
demonstrated that the United States failed to comply with the recommendations and rulings of the
DSB.
2. Completing the Analysis
386. This brings us to the question of whether we can complete the analysis, as requested by the
European Communities, and find that, by relying in the sunset review proceedings in Case 19 on
margins of dumping calculated in prior proceedings using zeroing, the United States failed to comply
with the recommendations and rulings of the DSB a nd with its obligations pursuant to Articles 2.1,
2.4, 2.4.2, and 11.3 of the Anti-Dumping Agreement.

509In response to questioning at the oral hearing, the United States confirmed that, if both the USDOC
and the USITC have made affirmative likelihood-of-d umping and likelihood-of-injury determinations, the
USDOC has no discretion not to issue a continuation order, as this is a "ministerial function".
510Section 351.218(f)(4) of Title 19 of the United States Code of Federal Regulations provides that:
... the [USDOC] normally will issue its de termination to continue an order
or suspended investigation, or to revoke an order or terminate a suspended
investigation, as applicable, not later than seven days after the date of
publication in the Federal Register of the [USITC's] determination
concluding the sunset review.
In its press release of 7 September 2007 relating to the likelihood-of-injury determination in Case 19,
the USITC stated that, "[a]s a result of the [USITC's] affirmative determin ation, the existing orders on imports
of pasta from Italy and Turkey will remain in place". (emphasis added) (See European Communities' appellant's
submission, footnote 163 to para. 117)
511Panel Report, paras. 8.139 and 8.140.

387. A similar question arises with respect to Cases 24, 28, 29, 30, and 31, which the Panel found
not to fall within its terms of reference. We have reversed this finding by the Panel, and the European
Communities is therefore requesting us to complete th e analysis and find that, by relying also in the
sunset review proceedings in Cases 24, 28, 29, 30, and 31 on margins of dumping calculated in prior
proceeding using zeroing, the United States failed to comply with the recommendations and rulings of
the DSB and with its obligations pursuant to Articles 2.1, 2.4, 2.4.2, and 11.3 of the Anti-Dumping
Agreement.
512
388. In previous disputes, the Appellate Body h as completed the analysis with a view to
facilitating the prompt settlement of the dispute. 513 However, the Appellate Body has held that it can
do so only if the factual findings of the panel and th e undisputed facts in the panel record provide it
with a sufficient basis for the completion of its own analysis.514
389. We start by considering whether we can complete the analysis in Case 19. The Panel found,
with respect to the USDOC's likelihood-of-dumping de termination in Case 19, that "[t]he Issues and
Decision Memorandum submitted to the Panel by the United States ... indicates that the USDOC
found that dumping was likely to continue or recu r if the order[] were revoked based on its finding
that dumping had continued at above de minimis levels since the issuance of the order".
515 Therefore,
it concluded that "[i]t seems clear ... from the Is sues and Decision Memorand[ um] in [Case 19] that
the finding[] that dumping had continued at above de minimis levels since the issuance of the relevant
[anti-dumping duty] order refer[s] to [a] dumping ma rgin[] that had been calculated in administrative
reviews, using zeroing."516
390. We recall that, in US – Corrosion-Resistant Steel Sunset Review , the Appellate Body
explained that, "should investigating authorities choose to rely upon dumping margins in making their
likelihood determination, the calculation of th ese margins must conform to the disciplines of

513See, for example, Appellate Body Report, Australia – Salmon, paras. 117 and 118; Appellate Body
Report, US – Wheat Gluten , paras. 80-92; and Appellate Body Report, Canada – Aircraft (Article 21.5 –
Brazil), paras. 43-52.
514See Appellate Body Report, Australia – Salmon, paras. 209, 241, and 255; Appellate Body Report,
Korea – Dairy, paras. 91 and 102; Appellate Body Report, Canada – Autos, paras. 133 and 144; Appellate Body
Report, Korea – Various Measures on Beef, para. 128; Appellate Body Report, EC – Asbestos, paras. 82 and 83;
and Appellate Body Report, Canada – Periodicals, p. 24, DSR 1997:I, 449, at 469.
515Panel Report, para. 8.138 (referring to USDOC Issues and Decision Memorandum from Notice of
Final Results of Expedited Sunset Reviews of the Antidumping Duty Orders: Certain Pasta from Italy and
Turkey (5 February 2007), at p. 5 (Panel Exhibit US-25)).
516Panel Report, para. 8.138.

Article 2.4."517 The Appellate Body added that, "[i]f th ese margins were legally flawed because they
were calculated in a manner inconsistent with Article 2.4, this could give rise to an inconsistency not
only with Article 2.4, but also with Article 11.3 of the Anti-Dumping Agreement ."518 In such
circumstances, the "likelihood determination could not constitute a proper foundation for the
continuation of anti-dumping duties under Article 11.3." 519 The Appellate Body made similar
findings in US – Anti-Dumping Measures on Oil Country Tubular Goods , US – Zeroing (Japan) , and
US – Continued Zeroing.520
391. We consider that the findings by the Panel in Case 19 constitute a sufficient factual basis to
allow us to complete the analysis and find that the sunset review in Case 19 is inconsistent with
Article 11.3 of the Anti-Dumping Agreement and results in failure by the United States to comply with
the recommendations and rulings of the DSB, which had established that the use of zeroing by the
United States in the original investigation and ad ministrative reviews relating to the same Case was
inconsistent with the Anti-Dumping Agreement.
392. We consider next whether we can complete the analysis in respect of the subsequent sunset
reviews in Cases 24, 28, 29, 30, and 31. These sunset reviews have all resulted in continuation orders
and the relevant anti-dumping duty orders have not been fully revoked following the adoption of the
DSB's recommendations and rulings in the original proceedings. The sunset reviews in these Cases
provided the legal basis for the continued imposition of anti-dumping duties after the expiry of the
reasonable period of time and still provide the lega l basis for their continued imposition as of that
date.
393. The Panel made no express factual findings on Cases 24, 28, 29, 30, and 31 521, as it had
excluded these sunset reviews from its terms of re ference. The European Communities submitted to
the Panel the USDOC's Issues and Decision Memoranda of the sunset reviews in Cases 28, 29, 30,
and 31. We observe that the Issues and Decision Memoranda in these Cases indicate that the USDOC
found that dumping was likely to continue or recur if the orders were revoked, based on margins of

517Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 127.
518Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 127.
519Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 130.
520Appellate Body Report, US – Anti-Dumping Measures on Oil Country Tubular Goods , para. 181;
Appellate Body Report, US – Zeroing (Japan) , para. 185; Appellate Body Report, US – Continued Zeroing ,
paras. 183-185.
521We note that the panel and the Appellate Body in US – Continued Zeroing had already found that the
sunset reviews in Cases 18, 22, 28, 29, 30, and 31 were inconsistent with Article 11.3 of the Anti-Dumping
Agreement. (See Appellate Body Report, US – Continued Zeroing, para. 383)

dumping calculated in original investigations a nd previous administrative reviews using zeroing.
522
The European Communities, however, did not submit to the Panel the USDOC's Issues and Decision
Memorandum relating to Case 24. 523 In the absence of express factual findings by the Panel and
undisputed evidence in the Panel record regarding C ase 24, we are unable to complete the analysis in
respect of this Case.
394. In contrast, the Issues and Decision Memoranda in Cases 28, 29, 30, and 31, which are in the
Panel record, indicate that, in making its likeli hood-of-dumping determinations in these Cases, the
USDOC relied on dumping margins that had been calc ulated in original investigations and previous
administrative reviews with the use of zeroing. We consider that this constitutes a sufficient factual
basis to allow us to complete the analysis and find that the sunset reviews in Cases 28, 29, 30, and 31
are inconsistent with Article 11.3 of the Anti-Dumping Agreement and result in failure by the United
States to comply with the recommendations and ru lings of the DSB, which had established that the
use of zeroing by the United States in the original investigation and in administrative reviews relating
to the same Cases was inconsistent with the Anti-Dumping Agreement.
395. In this respect, as we have already considered above 524 for Case 19, in previous cases, the
Appellate Body has found that, if an inves tigating authority relies upon a margin of dumping
calculated using a WTO-inconsistent methodol ogy to support its likelihood-of-dumping
determination, the use of such a methodology would render a sunset review determination
inconsistent with Article 11.3 of the Anti-Dumping Agreement. We consider that the failure to revise
the likelihood-of-dumping determination so as to eliminate reliance on margins of dumping calculated
using zeroing, effective as from the expiry of th e reasonable period of time, undermines compliance
by the United States with the recommendations and rulings of the DSB. We observe that, while
continuation orders in these cases were issued before the expiry of the reasonable period of time, such

522For Case 28, see USDOC Issues and Decision Memorandum for the Expedited Sunset Review of the
Antidumping Duty Order on Stainless Steel Sheet and Strip in Coils from Germany; Final Results, at p. 4
(published in United States Federal Register , Vol. 69 (22 November 2004) 67896 (Panel Exhibit EC-58). For
Case 29
, see USDOC Issues and Decision Memorandum for the Expedited Sunset Reviews of the Antidumping
Duty Orders on Antifriction Bearings and Parts Thereo f from France, Germany, Italy, and the United Kingdom;
Final Results, at p. 9 (published in United States Federal Register , Vol. 70 (5 October 2005) 58183 (Panel
Exhibit EC-37). For Case 30, see USDOC Issues and Decision Memorandum for the Expedited Sunset Reviews
of the Antidumping Duty Orders on Antifriction Bearings and Parts Thereof from Fr ance, Germany, Italy, and
the United Kingdom; Final Results, at p. 9 (published in United States Federal Register , Vol. 70 (5 October
2005) 58183 (Panel Exhibit EC-37). For Case 31 , see USDOC Issues and Decision Memorandum for the
Expedited Sunset Reviews of the Antidumping Duty Orders on Antifriction Bearings and Parts Thereof from
France, Germany, Italy, and the United Kingdom; Final Results, at p. 10 (published in United States Federal
Register, Vol. 70 (5 October 2005) 58183 (Panel Exhibit EC-37).
523In its reply to Panel Question 6, the European Communities indicated that to the best of its
knowledge there was no Issues and Decision Memorandum relating to the sunset review in Case 24.
524Supra, para. 390.

continuation orders resulted in the extension of th e anti-dumping duty orders for another five years,
thus beyond the expiry of the reasonable period of time. We further note that, based on the anti-
dumping duty orders that were continued by mean s of these sunset reviews, the United States
conducted administrative reviews after the expiry of the reasonable period of time that assessed duty
rates and established cash deposit rates based on zeroing.
396. Based on the Panel's findings and on undisputed evidence in the Panel record, we have
reached the conclusion that, in the likelihood-of-dum ping determinations in the sunset reviews in
Cases 19, 28, 29, 30, and 31, the USDOC relied on margins of dumping calculated using zeroing in
previous administrative reviews and original investigations. We, therefore, conclude that, because the
likelihood-of-dumping determina tions in these sunset reviews relied on margins of dumping
calculated inconsistently with the Anti-Dumping Agreement, they are inconsistent with Article 11.3 of
that Agreement and undermine compliance by the United States.
397. Having found that the sunset reviews in Cases 19, 28, 29, 30, and 31 are inconsistent with
Article 11.3 of the Anti-Dumping Agreement, we do not consider it necessary to rule on whether the
same sunset review determinations are also incons istent with Articles 2.1, 2.4, and 2.4.2 of the Anti-
Dumping Agreement . Furthermore, the European Communities has not explained why additional
findings under these provisions would be necessary to resolve the dispute.525
398. We turn finally to the claim by the European Communities that the Panel acted inconsistently
with Article 11 of the DSU because it did not address the claim by the European Communities that the
United States failed to comply with the DSB's re commendations in the original proceedings by
keeping in place certain aspects of the original measures—that is, margins of dumping based on
zeroing—and by relying on those margins for the determination of likelihood of recurrence of
dumping in subsequent sunset review proceedings concerning the same anti-dumping measures.526
399. We note that, in respect of the five sunset re views it considered to fall within its terms of
reference, the Panel initially dete rmined, based on the Issues and D ecision Memoranda in the sunset
reviews in Cases 2, 3, 4, 5, and 19, that the USDOC's likelihood-of-dumping determinations were
based on margins of dumping calculated in administrative reviews using zeroing. 527 However, the
Panel later concluded that, considering that none of the sunset reviews at issue had been concluded by
the time the Panel was established, it could not find that the United States had violated the provisions
of the Anti-Dumping Agreement because it had relied on margins of dumping calculated with zeroing.

527Panel Report, para. 8.138.

400. In our view, therefore, the Panel addressed th e claim by the European Communities that the
United States failed to comply with the DSB's r ecommendations and rulings by relying on certain
aspects of the measures at issue in the original proceedings (the margins of dumping based on
zeroing) in these sunset reviews. The Panel, how ever, found that the European Communities has not
demonstrated that the United States failed to comply with the DSB's recommendations and rulings,
because none of the sunset reviews had been conclu ded by the time the Panel was established. We
recall that we have reversed this finding by the Panel in respect of Case 19.
401. We further note that, in Chile – Price Band System (Article 21.5 – Argentina) , the Appellate
Body found that a Member cannot base its claims under Article 11 of the DSU "on the same grounds"
as its claims under substantive provisions in the c overed agreements. In particular, the Appellate
Body ruled that "a claim that a panel failed to comply with its duties under Article 11 of the DSU
must stand by itself and should not be made merely as a subsidiary argument or claim in support of a
claim that a panel failed to apply correctly a provision of the covered agreements."
528 In that case, the
Appellate Body also referred to its decision in US – Steel Safeguards, where it found that:
[a] challenge under Article 11 of the DSU must not be vague or
ambiguous. On the contrary, such a challenge must be clearly
articulated and substantiated with specific arguments. An Article 11
claim is not to be made lightly, or merely as a subsidiary argument or
claim in support of a claim of a panel's failure to construe or apply
correctly a particular provision of a covered agreement. A claim
under Article 11 of the DSU must stand by itself and be
substantiated, as such, and not as subsidiary to another alleged
violation.
529 (footnote omitted)
402. In the present case, we are not persuaded that the claims and arguments by the European
Communities under Article 11 of the DSU differ from its claims that the Panel failed to apply
correctly other provisions of the DSU and the Anti-Dumping Agreement. Therefore, we find that the
Panel did not act inconsistently with Article 11 of the DSU.
X. The Non-Existence of Measures between 9 April and 23 April/31 August 2007
403. We move to the issue of whether the Panel erred in declining to make findings with respect to
the contentions of the European Communities on th e non-existence of measures "taken to comply"
between 9 April 2007 and 23 April/31 August 2007.

528Appellate Body Report, Chile – Price Band System (Article 21.5 – Argentina), para. 238.
529Appellate Body Report, US – Steel Safeguards, para. 498.

404. On 27 December 2006, the USDOC announced that it would abandon zeroing in original
investigations in which the weighted average-to -weighted average comparison of normal value and
export prices is used. The modification became effective on 22 February 2007 and concerned all
pending and future original investigations as of that date.530
405. On 1 March 2007, the USDOC initiated proceedin gs pursuant to Section 129 of the URAA
covering 12 of the 15 original anti-dumping investiga tions at issue in the original proceedings. The
remaining three anti-dumping duty orders had b een previously revoked. In the Section 129
determinations, the USDOC recalculated, without zeroing, the relevant margins of dumping by
applying the modification published in the United States Federal Register in December 2006. Eleven
Section 129 determinations were issued by th e USDOC on 9 April 2007 and became effective on 23
April 2007. The results in the last Section 12 9 determination were issued on 20 August 2007 and
became effective on 31 August 2007. 531 Thus, the 12 determinations under Section 129 came into
effect after the reasonable period of time ended on 9 April 2007.
406. The European Communities requested the Panel to make the finding that, by failing to put
into effect measures "taken to comply" between 9 April and 23 April/31 August 2007, the United
States violated Articles 21.3 and 21.3(b) of the DSU, and failed to comply with the recommendations
and rulings of the DSB pursuant to Article 19.1 of the DSU.
407. The Panel considered it was not clear that Article 21.3 of the DSU, including
subparagraph (b) thereof, provides a legal basi s for the finding requested by the European
Communities. In any event, the Panel considered th at, even if it were assumed that Article 21.3(b)
provided such a basis, it was neither necessary, nor appropriate, as a matter of judicial economy, for it
to make the finding requested by the European Communities. The Panel noted that Article 21.5 of the
DSU does not specify with respect to what date a compliance panel should assess the "existence or
consistency ... of meas ures taken to comply".
532 In this respect, the Panel endorsed the positions of
the compliance panels in US – Upland Cotton (Article 21.5 – Brazil) and EC – Bed Linen
(Article 21.5 – India) , which determined that the relevant da te is that of the establishment of the

530USDOC, Antidumping Proceedings: Calculation of the Weighted-Average Dumping Margin During
an Antidumping Investigation; Final Modification, United States Federal Register , Vol. 71, No. 248
(27 December 2006) 77722 (Panel Exhibit EC-1); USDOC, Antidumping Proceeding s: Calculation of the
Weighted-Average Dumping Margin during an Antidumping Investigation; Preliminary Results of the
Section 129 Determinations (26 February 2007) (Panel Exhibit EC-4). See also European Communities' first
written submission to the Panel, para. 16; and United States' first written submission to the Panel, para. 17.
531See Panel Report, para. 3.1.
532Panel Report, para. 8.226.

compliance panel.
533 The Panel was of the opinion that making the finding requested by the European
Communities would be of little relevance to the effect ive resolution of the dispute between the parties
and without practical implications as to the oblig ations of the United States, because the factual
situation that forms the basis of the European Co mmunities' claim is the non- existence of measures
"taken to comply", and that factual situation had ceased to exist at the time of the establishment of this
Panel. On the basis of these considerations, the Pa nel declined to make the finding requested by the
European Communities.534
408. On appeal, the European Communities claims that the Panel erred in so doing, violating its
duties under Article 11 of the DSU. The European Communities requests the Appellate Body to find
that the Panel erred in this respect, and to comp lete the analysis and find that the United States
violated Articles 19.1, 21.3, and 21.3(b) of the DS U in not putting into effect measures "taken to
comply" between 9 April and 23 April/31 August 2007. The European Communities argues that, in
failing to rule on this omission, the Panel failed to examine a matter that was part of its mandate and
"abused" the concept of judicial economy 535, as the Panel provided only a partial resolution to the
matter at issue. The European Communities adds that Article 21.3 of the DSU implies that WTO
Members have the obligation to bring their WTO-in consistent measures into conformity with their
obligations immediately after the adoption of the recommendations and rulings of the DSB, or, should
a reasonable period be agreed between the parties to the dispute, at the end of such a period at the
latest.
409. According to the United States, the Panel co rrectly rejected the European Communities'
request for a finding that the United States failed to comply with the recommendations and rulings of
the DSB by not taking any measures between the end of the reasonable period of time and the date on
which the Section 129 determinations entered into fo rce. In any event, the United States argues that
the Panel was correct to find that the United Stat es did not breach Article 21.3 of the DSU, because
Article 21.3 does not impose an obligation on the Me mber concerned; rather, Article 21.3 provides
the implementing Member with the right to a r easonable period of time should immediate compliance
be impracticable. The United States notes that th ere was no "disagreement" between the parties that
the United States did not implement the Secti on 129 determinations before 23 April 2007 or

533Panel Report, US – Upland Cotton (Article 21.5 – Brazil), paras. 9.64-9.71; Panel Report, EC – Bed
Linen (Article 21.5 – India) , para. 6.28. The Panel also referred to Panel Report, US – Shrimp (Article 21.5 –
Malaysia), paras. 5.12 and 5.13. The requests for findings examined (and rejected) by the panels in EC – Bed
Linen (Article 21.5 – India) and US – Upland Cotton (Article 21.5 – Brazil) were made under Article 21.5 of the
DSU.
534Panel Report, paras. 8.225-8.227.

31 August 2007, respectively. 536 In any event, there being no "d isagreement" within the meaning of
Article 21.5 as to the existence of the Section 129 de terminations at issue as of the date of Panel
establishment, there is no basis for the Appellate Body to disturb the Panel's stance on this issue.
410. At the outset of our analysis, we underscore that, under Article 21.1 of the DSU, "[p]rompt
compliance with recommendations or rulings of the DSB is essential in order to ensure effective
resolution of disputes to the benefit of all Member s." Therefore, when it is impracticable for the
responding WTO Member to comply immediately w ith the recommendations and rulings of the DSB
and a reasonable period of time for implementation has been established pursuant to Article 21.3 of
the DSU, the responding WTO Member is expected to comply with the recommendations and rulings
of the DSB within this reasonable period of time, th at is to say, at the latest, as of the end of the
reasonable period of time.
411. In its assessment under Article 21.5 of the DSU, the Panel took into account events that
occurred between the end of the reasonable peri od of time and the establishment of the Panel
(25 September 2007), namely, the entry into force of 11 Section 129 determinations (issued by the
USDOC on 9 April 2007) on 23 April 2007, the issuance of another Section 129 determination on
20 August 2007, and its entry into force on 31 August 2007. The appeal of the European
Communities raises the question of whether the Pa nel was permitted to do so and to refrain from
making a finding that there was a failure to comply in the periods between 9 April 2007 (when the
reasonable period of time ended) and 23 April/31 Au gust 2007 (when the Section 129 determinations
entered into effect). In our view, these actions by the Panel have to be considered in the light of the
objective of the WTO dispute settlement system, which is to secure a positive and effective solution to
a dispute.
537 In this case, the Panel acted in a manner consistent with the objective of securing a
positive and effective solution to the dispute, and did not exceed the bounds of its discretion when, in
its analysis of whether the United States had comp lied with the recommendations and rulings of the
DSB, it took into account implementation actions take n subsequent to the expiry of the reasonable
period of time but before the Article 21.5 Panel was established.

537Article 3.7 of the DSU. See also Article 3.4 of the DSU, which provides that "[r]ecommendations or
rulings of the DSB shall be aimed at achieving a satisfactory settlement of the matter in accordance with the
rights and obligations under this Understanding and under the covered agreements."
In Australia – Salmon, the Appellate Body recalled, in the context of an analysis on judicial economy,
that a panel should perform its assessment of the matter in a way so as "to ensure effective resolution of disputes
to the benefits of all Members." (Appellate Body Report, Australia – Salmon, para. 223 (quoting Article 21.1 of
the DSU))

412. When an Article 21.5 panel makes a finding that a WTO Member has not complied with the
recommendations and rulings of the DSB in the original proceedings, the implication of that finding is
that the WTO Member remains subject to obliga tions flowing from the recommendations and rulings
issued by the DSB in the origin al proceedings. However, if the compliance panel finds that
compliance has been achieved at the time of its es tablishment, but not at the end of the reasonable
period of time, the responding WTO Member will not need to take additional remedial action.
413. In the light of these considerations, we find that the Panel did not act inconsistently with
Article 11 of the DSU in declining, in paragraphs 8.227 and 9.1(b)(vii) of the Panel Report, to make
findings on the European Communities' claim that, by not taking measures to comply between 9 April
and 23 April/31 August 2007, the United States violated Article 21.3 of the DSU.
414. Having said that, we emphasize that, in principle, a measure found to be inconsistent is to be
brought into conformity immediately, and that a reasonable period to do so can be agreed to or
awarded only in circumstances where immediate compliance is impractical. In particular, Article 21.3
of the DSU provides that the Member concerned shall have a reasonable period of time " in which" to
comply with recommendations and rulings of the DSB. The reference to a reasonable period in which
to comply suggests that a Member should bring its measure into conformity within the reasonable
period of time, so that compliance is in effect by the end of that period.
XI. The Alleged Arithmetical Error in the Section 129 Determination in Case 11
415. We now turn to the European Communities' app eal of the Panel's finding that the European
Communities was precluded from raising claims against an arithmetical error relating to Stainless
Steel Sheet and Strip in Coils from Italy (Case 11) allegedly committed by the USDOC in the
recalculation of the margin of dumping in its Section 129 determination.
A. The Panel's Findings
416. Before the Panel, the Europ ean Communities argued that the USDOC committed, and then
failed to remove, an obvious arith metical error in its Section 129 determination in Case 11. The
European Communities submitted that, in the orig inal investigation, the USDOC incorrectly
calculated the average unit value of 84 individual sales by TKAST
538 to the United States, to which

538ThyssenKrupp Acciai Speciali Terni S.p.A. and ThyssenKrupp AST USA—a manufacturer/exporter
of stainless steel sheet and strip in coils from Italy.

the USDOC applied a "facts available" rate. 539 This error artificially inflated the unit value and,
therefore, the amount of dumping found. The Eu ropean Communities argued that, despite realizing
this obvious error, the USDOC fail ed to correct it in the Section 129 determination but, rather,
considered that any alleged clerical or comput ational error unrelated to the implementation of
instructions from the United States Trade Represen tative was outside the scope of the Section 129
proceeding.540
417. The Panel considered that "the EC claim with respect to the alleged calculation error
constitute[d] a new claim with respect to an unchanged aspect of the original measure, the
determination in the original investig ation, which the European Communities could have made , but
did not make , in the original dispute ."541 For this reason, the Panel concluded that the European
Communities was precluded from raising this claim in these Article 21.5 proceedings.542
418. The Panel reasoned that "the scope of Article 21.5 of the DSU is not so broad as to allow a
complaining party to make claims that it could have made, but did not make, in the original
proceeding, with respect to aspects of the original measure at issue that were incorporated, but
remained unchanged, in the measure taken to comply."543 The Panel also found that "the claims of the
European Communities relate to a part of the Section 129 Determination that has remained unchanged
from the original measure, and that that part can be 'separated' from the remainder of the Section 129
Determination for the purpose of this proceeding." 544 The Panel concluded that the European
Communities' claims in respect of the alleged ar ithmetical error in the Section 129 determination
relating to Case 11 were not properly before it, and therefore made no findings on the substance of the
European Communities' claims in this respect.545
B. Claims and Arguments on Appeal
419. The European Communities submits that the Pa nel erred in the legal interpretation of
Article 21.5 of the DSU when finding that the Eu ropean Communities' claims in respect of the
Section 129 determination in Case 11 were not properly before it.546

539The European Communities submits that the USDOC, in its calculation, erroneously inverted the
fraction: it divided the total volume of the sales by their total value, instead of dividing the total value by the
total volume.
540Panel Report, para. 8.229.
541Panel Report, para. 8.239. (original emphasis)
542Panel Report, para. 8.239.
543Panel Report, para. 8.242.
544Panel Report, para. 8.243. (footnote omitted)
545Panel Report, para. 8.244.

420. The European Communities contends th at "the arithmetical error was an integral part of the
'measure taken to comply' by the United States and, thus, fell under the scope of this compliance
proceeding."
547 Alternatively, the European Communities claims that "the arithmetical error fell
under the scope of this compliance proceeding because of its particularly close relationship to the
re-determination of dumping carried out in the Section 129 Determination concerned." 548 T h e
European Communities also claims that the Panel erred in finding that the European Communities
was precluded from raising its claims against the arithmetical error in these compliance
proceedings.549 According to the Europ ean Communities, "in compliance proceedings a Member is
not prevented from raising new claims against unchanged aspects of the original measure which
remained in the measure taken to comply" 550, and allowing such new claims "does not provide the
complaining Member with a second chance to make its case; nor does it call into question the
principles of fundamental fairness and due process." 551 The European Communities requests the
Appellate Body to reverse this finding and to comple te the analysis and find that, by failing to remove
the arithmetical error, the United States violated Articles 2, 5.8, 6.8, 9.3, 11.1, and 11.2 of the Anti-
Dumping Agreement , Article VI:2 of the GATT 1994, and Articles 19.1 and 21.3 of the DSU, and
failed to comply with the DSB's recommendations and rulings in the original proceedings.552
421. The United States responds that it never acknowledge d that an arithmetical error was made in
the original investigation in Case 11. The Un ited States also argues that, during the Section 129
proceeding, the USDOC neither realized nor agreed that an error had been made.553 The United States
claims that "[t]he compliance Panel correctly rejected the EC's claim that an alleged clerical error in
one of the original investigations at issue in the original proceeding should have been corrected when
the United States recalculated the margin of dumping without zeroing." 554 According to the United
States, the alleged arithmetical error "is 'separable ' from the measure taken to comply", because, in
recalculating the margin of dumping without zeroi ng, the USDOC "changed only the language that
caused the computer program to disregard non-dum ped comparisons" and "t hen re-ran the program
and calculated the revised margin of dumping", but "made no other changes to the computer
program".555 The United States argues that the Panel properly found that the new claim was not

547European Communities' appellant's submission, para. 248. (original emphasis)
548European Communities' appellant's submission, para. 259. (footnote omitted)
552European Communities' appellant's submission, paras. 291 and 296.

within the scope of these compliance proceedings. 556 The United States contends that "[t]he alleged
error ... is an aspect of the original measure that is unchanged", even if the arithmetical error became
an integral part of the "measure taken to comply" as the European Communities contends. 557
According to the United States, the European Communities' argument would allow complaining
Members a "second chance" to pursue claims they could have pursued in the original proceedings, but
did not, and thus presents "fundamental due process concerns".558
C. Analysis
422. We begin our analysis by examining, first, whether the Panel erred in finding that the
European Communities could not properly raise cl aims against the arithmetical error allegedly
committed by the USDOC in the Section 129 proceedi ng in Case 11. We shall then consider the
claim on appeal by the European Communities that the Panel erred in finding that its claims relate to a
part of the Section 129 determination that remained unchanged from the original measure and that can
be separated from the rest of the Section 129 determination.
423. The Panel relied on the panel report in US – Countervailing Measures on Certain EC
Products (Article 21.5 – EC) to find that the European Communi ties was precluded from raising in
these Article 21.5 proceedings claims against an unchanged aspect of the original measure (the
alleged arithmetical error), which the European Co mmunities could have made, but did not make, in
the original proceedings. The panel in US – Countervailing Measures on Certain EC Products
(Article 21.5 – EC) found that allowing a complaining Member to make "a new claim on an aspect of
the original measure that was neve r challenged and remained unchanged" 559 would jeopardize the
principles of fundamental fairness and due process, and that it would be unfair to expose a responding
Member to the possibility of a finding of violation on an aspect of the origin al measure that it "was
entitled to assume was consistent with its obliga tions under the relevant agreement given the absence
of a finding of violation in the original report."560
424. We disagree with the notion that a Member may be entitled to assume in Article 21.5
proceedings that an aspect of a measure that wa s not challenged in the original proceedings is
consistent with that Member's obligati ons under the covered agreements. In US – Oil Country

556United States' appellee's submission, paras. 132 and 133.
559Panel Report, US – Countervailing Measures on Certain EC Products (Article 21.5 – EC) ,
para. 7.76.
560Panel Report, US – Countervailing Measures on Certai n EC Products (Article 21.5 – EC) ,
para. 7.75. (footnote omitted)

Tubular Goods Sunset Reviews (Article 21.5 – Argentina) , the Appellate Body held that, "[o]n the
basis of the original panel's conclusions [rega rding the likelihood-of-dumping determination], the
USDOC could not assume that its findings regardi ng the alleged decline in the volume of imports
were WTO-consistent"
561, as these concerned a different aspect of the original measure. If certain
claims against aspects of a measure were not decide d on the merits in the original proceedings, they
are not covered by the recommendations and rulings of the DSB and, therefore, a Member should not
be entitled to assume that those aspects of the measure are consistent with the covered agreements.
425. We recall that, in EC – Bed Linen (Article 21.5 – India) , the Appellate Body found that a
complaining Member that has failed to make a prima facie case in the original proceedings regarding
an element of the measure that remained unchange d after implementation may not re-litigate the same
claim with respect to the unchanged element of the measure in the Article 21.5 proceedings where this
unchanged element is separable from the cha nged part of the implementation measure. 562 In US –
Shrimp (Article 21.5 – Malaysia) , the Appellate Body found that a complaining Member may not
reassert the same claim against an unchanged asp ect of the measure that has been found to be
WTO-consistent in the original proceedings.563
426. Referring to these two cases in US – Upland Cotton (Article 21.5 – Brazil) , the Appellate
Body observed that, "[b]ecause adopted panel and A ppellate Body reports must be accepted by the
parties to a dispute, allowing a party in an Article 21.5 proceeding to re-argue a claim that has been
decided in adopted reports would indeed provide an unfair 'second chance' to that party."564 However,
in US – Upland Cotton (Article 21.5 – Brazil) , the Appellate Body distinguished the claims in
EC – Bed Linen (Article 21.5 – India) and US – Shrimp (Article 21.5 – Malaysia) from those at issue
in that dispute, and found that allowing a complain ing Member to make a case that it did not establish
in the original proceedings would not provide it with an unfair "second chance", nor would it
compromise the finality of the DSB's recommendations and rulings.565
427. While claims in Article 21.5 proceedings cannot be used to re-open issues that were decided
on substance in the original proceedings, the unconditional acceptance of the recommendations and
rulings of the DSB by the parties to a dispute do es not preclude raising new claims against measures
taken to comply that incorporate unchanged aspects of original measures that could have been made,
but were not made, in the original proceedings . We do not see how allowing such claims in

561Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina),
para. 150.
562See Appellate Body Report, EC – Bed Linen (Article 21.5 – India), paras. 86 and 93.
563See Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia), para. 96.
564Appellate Body Report, US – Upland Cotton (Article 21.5 – Brazil), para. 210. (footnote omitted)
565See Appellate Body Report, US – Upland Cotton (Article 21.5 – Brazil), para. 210.

Article 21.5 proceedings would "jeopardize the principles of fundamental fairness and due
process"566, or how it would unfairly provide a "second chance" 567 to the complaining Member,
provided these new claims relate to a measure "taken to comply" and do not re-argue claims that were
decided in the original proceedings.
428. We observe that, in the present case, the European Communities did not raise a claim
regarding the alleged arithmetical error in the orig inal proceedings. As such, this issue was not
decided in the original recommendations and ruli ngs of the DSB, which concerned only the zeroing
methodology. Therefore, allowing the European Comm unities to raise claims ag ainst such an alleged
error in these Article 21.5 proceedings would not ra ise due process concerns, because it would not in
itself provide another chance to the European Comm unities to make a case it failed to make in the
original proceedings, such that the finality of the DSB's recommendations and rulings would be
compromised.
429. We therefore disagree with the Panel, to the extent it relied on the principles of fundamental
fairness and due process as applied by the panel in US – Countervailing Measures on Certain EC
Products (Article 21.5 – EC) , to support its finding that the European Communities was precluded
from raising claims against the arithmetical error in these Article 21.5 proceedings.568
430. In finding that "the scope of Article 21.5 of the DSU is not so broad as to allow a complaining
party to make claims that it could have made, but did not make, in the original proceeding, with
respect to aspects of the original measure at issue that were incorporated, but remained unchanged, in
the measure taken to comply", the Panel also re lied on the statement by the Appellate Body in US –
Upland Cotton (Article 21.5 – Brazil) that "[a] complaining Member ordinarily would not be allowed
to raise claims in an Article 21.5 proceeding that it could have pursued in the original proceedings, but
did not."569
431. We note that the Appellate Body offered this statement after having made its main finding
that a Member should be allowed to raise in Article 21.5 proceedings claims that were raised but not
resolved on the merits in the original proceedings. The Appellate Body said that such claims could
ordinarily not be raised in Article 21.5 proceedings; it did not say that such claims can never be
raised, as the Panel suggests. Moreover, in the sa me paragraph, the Appellate Body referred to its

566Panel Report, US – Countervailing Measures on Certain EC Products (Article 21.5 – EC) ,
para. 7.75.
567See also Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 –
Argentina), para. 150.
568Panel Report, para. 8.239.
569Appellate Body Report, US – Upland Cotton (Article 21.5 – Brazil), para. 211.

earlier decision in Canada – Aircraft (Article 21.5 – Brazil) , where it had found that "Article 21.5
proceedings involve, in principle, not the original measure, but rather a new and different measure
which was not before the original panel", and that "the claims, arguments and factual circumstances
which are pertinent to the 'measure taken to co mply' will not, necessarily, be the same as those which
were pertinent in the original dispute".
570 We consider that the findings by the Appellate Body in
US – Upland Cotton (Article 21.5 – Brazil) should be interpreted consis tently with the findings in
Canada – Aircraft (Article 21.5 – Brazil).
432. Thus, if we read the Appellate Body's statement in US – Upland Cotton (Article 21.5 – Brazil)
together with its statement in Canada – Aircraft (Article 21.5 – Brazil) , it excludes, in principle,
("ordinarily") from Article 21.5 proceedings new claims that could have been pursued in the original
proceedings, but not new claims against a measure taken to comply—that is, in principle, a new and
different measure. This is so even where such a measure taken to comply incorporates components of
the original measure that are unchanged, but are not separable from other aspects of the measure taken
to comply.
433. We recall that the Panel found that "the scope of Article 21.5 of the DSU is not so broad as to
allow a complaining party to make claims that it c ould have made, but did not make, in the original
proceeding, with respect to aspects of the original measure at issue that were incorporated, but
remained unchanged, in the measure taken to comply". 571 We disagree with this finding by the Panel,
insofar as it precludes new claims against inseparable aspects of a measure taken to comply, which are
unchanged from the original measure. We, therefore, find that the Panel erred in finding, in
paragraph 8.244 of the Panel Report, that the Eu ropean Communities could not properly raise claims
with respect to the alleged error in the calcula tion of TKAST's dumping margin in these Article 21.5
proceedings because it could have raised them in the original proceedings but failed to do so.
434. We consider that, in the present dispute, the critical question before the Panel was whether the
alleged arithmetical error was an integral part of the measure taken to comply. If it was, as the
European Communities alleges, then the Panel shoul d have addressed the claims against the alleged

570Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil), para. 41; Appellate Body Report,
EC – Bed Linen (Article 21.5 – India) , para. 89 (referring to Appellate Body Report, US – FSC (Article 21.5 –
EC), allowing the new GATT Article III claim although the original proceedings involved only claims under the
Agreement on Subsidies and Countervailing Measures).
In US – Upland Cotton (Article 21.5 – Brazil), the Appellate Body further explained that the finding in
Canada – Aircraft (Article 21.5 – Brazil) "refers to the situation in which the responding Member is seeking to
circumvent its compliance obligations by replacing the WTO-inconsistent measure with a new measure that is
also WTO-inconsistent, albeit with a provision not at issue in the original proceedings ." (Appellate Body
Report, US – Upland Cotton (Article 21.5 – Brazil), para. 211 (emphasis added))
571Panel Report, para. 8.242.

arithmetical error as new claims against the measure taken to comply; if it was not, as the United
States alleges, then the Panel was correct in declining to rule on these claims.
435. The Panel relied, in its finding that excluded the claims against the alleged arithmetical error,
on the fact that the relevant aspect of the complia nce measure is "unchanged" and is "separable" from
other parts of that Section 129 determination. Having reached the conclusion that the alleged
arithmetical error concerns an unchanged aspect of the measure, the Panel, however, did not further
address the parties' arguments as to whether the allege d error is an integral part of the measure taken
to comply or whether it is separable from the re st of the measure taken to comply, that is, the
Section 129 determination.572 The Panel simply stated that the alleged error "is distinct from any of
the claims made by the European Communities in the original dispute"573, which relate to zeroing, and
that the recalculation of the dumping margin without zeroing did not affect the alleged error.
436. We consider that a determination of whether the alleged error is part of the measure taken to
comply can only be done based on undisputed facts and factual findings concerning the existence and
nature of such an alleged error. The European Communities argues that "the error consisted of
inverting a fraction in the calculation of the aver age unit value of 84 TKAST US sales: instead of
dividing total value by total volume, the USDOC divide d total volume by total value" and that "[t]his
error artificially inflated the unit value and, therefore, the amount of dumping found." 574 T h e
European Communities further contends that the Un ited States "acknowledges that such an error in
the dumping margin calculation had been made by the USDOC in the original investigation" 575 and
that "[i]n the Section 129 Determination concer ned, the USDOC realised that there was an
arithmetical error". 576 In particular, the European Commun ities relies on the fact that the USDOC
extended the duration of the Section 129 proceedings to consider the allegations made by the parties
concerning the alleged arithmetical error as eviden ce that the USDOC accepted that an error was
made.577

572The Panel stated:
As a consequence of our analysis th at the alleged error concerns an
unchanged aspect of the original measure, we do not consid er that we need
to examine further the parties' argumen t as to whether the calculation error
is part of the measure taken to comply ; we also need not decide whether the
alleged calculation error should be found to be part of that measure on the
basis of the close nexus argument put forward by the European
Communities.
(Panel Report, footnote 864 to para. 8.243 (original emphasis))
573Panel Report, para. 8.243.

437. The United States, however, denies that it ever acknowledged that an arithmetical error was
made in the original investigation and argues that, during the Section 129 proceeding, the USDOC
neither realized nor agreed that an error had been made.
578 The European Communities also
submitted to the Panel calculations made by TKAST, which showed that, by eliminating zeroing and
by correcting the alleged error, the margin of dumping would have been negative. At the oral hearing,
the United States did not comment on the calculations by TKAST. The United States, however,
denies that it ever acknowledged that if it had corr ected the alleged error the dumping margin would
have been negative. The Panel made no factual finding as to whether an arithmetical error was made
and the exact nature of such an error.
438. Having reviewed the Panel record, we are of th e view that there are insufficient undisputed
facts and evidence in the record that would allow us to reach any conclusion as to the precise nature
and consequences of such an alleged error, in te rms of whether it is separable from the compliance
measure or is an integral part thereof. Even assuming arguendo that the USDOC extended the
duration of the Section 129 proceeding for the sole purpose of considering the allegations concerning
the alleged arithmetical error, this does not amount to an admission by the USDOC that an error was
committed, nor does it shed light on the nature and content of the alleged error made in the calculation
of the margin of dumping. Nor do we consider that the arguments of th e European Communities and
the calculations made by TKAST of the dumping marg in without the alleged arithmetical error are in
themselves sufficient to show whether the nature an d the effects of the alleged arithmetical error are
such that the alleged error is separable from or incorporated into the re-determination.
439. Given the lack of factual findings by the Panel and of undisputed evidence in the Panel
record, we do not have a sufficient factual basi s to complete the analysis of the European
Communities' claim on this issue. For these reasons are unable to rule on whether the United States
failed to comply with the recommendations and ru lings of the DSB by failing to correct such an
alleged error.
XII. The "All Others" Rates Calculated in the Section 129 Determinations in Cases 2, 4,
and 5
440. We turn to the European Communities' claims th at the Panel erred in finding that the United
States did not act inconsistently with Article 9.4 of the Anti-Dumping Agreement in the establishment
of the "all others" rates in the Section 129 determinations in Stainless Steel Bar from France (Case 2),
Stainless Steel Bar from Italy (Case 4), and Stainless Steel Bar from the United Kingdom (Case 5),
and in failing to examine the European Communitie s' claims under Article 6.8 and Annex II of the

Anti-Dumping Agreement. The European Communities requests th e Appellate Body to reverse these
findings, and to find instead that the United States ac ted inconsistently with Articles 9.4 and 6.8 and
Annex II of the Anti-Dumping Agreement by using margins of dumping based on facts available in the
calculation of the "all others" rates in the Section 129 determinations in Cases 2, 4, and 5.
441. We recall that, in order to implement the r ecommendations and rulings of the DSB, the
United States issued Section 129 determinations in which it recalculated, without using zeroing, the
margins of dumping for the exporters investigated individually. 579 In Cases 2, 4, and 5, the
recalculation of margins of dumping without zeroing resulted in either zero or de minimis margins of
dumping for all the cooperating exporters. The margins of dumping for the non-cooperating
exporters, entirely based on "facts available", pursuant to Article 6.8 and Annex II of the Anti-
Dumping Agreement, remained unchanged. As a result, all company-specific margins of dumping in
Cases 2, 4, and 5 were either zero or de minimis , or based on facts available. The USDOC then
calculated the margins of dumping applicable to th e exporters not individually investigated (the
"all others" rates) based on a simple average of the zero, de minimis, and "facts available" margins of
dumping. This led to an increase in the "all others " rate from 3.9 per cent to 35.92 per cent in Case 2;
from 3.81 per cent to 6.6 per cent in Case 4; and from 4.48 per cent to 83.95 per cent in Case 5.
580
442. Before the Panel, the European Commun ities argued that the United States acted
inconsistently with Articles 9. 4 and 6.8 and Annex II of the Anti-Dumping Agreement in the
Section 129 determinations in Cases 2, 4, and 5, because these provisions expressly prohibit the use of
zero, de minimis , and "facts available" margins of dumping in the calculation of the "all others"
rate.581
443. The Panel found that the United States did not act inconsistently with Article 9.4 of the Anti-
Dumping Agreement, because Article 9.4 merely "establish[es] a methodology for the calculation of a
'ceiling' which the 'all others' rate may not exceed ", but does not "specify a method for or imposes
disciplines on the calculation of the 'all others' rate itself." 582 According to the Panel, in cases where
all the margins of dumping for the investigated exporters are zero, de minimis , or based on facts
available, "there are simply no margins of dum ping from which the investigating authority ... may
calculate the maximum allowable 'all others' rate" and therefore, in those circumstances, "Article 9.4
simply imposes no prohibition, as no ceiling can be calculated."583

579See supra, para. 5.
580Panel Report, para. 8.273.
581Panel Report, paras. 8.273 and 8.275.
582Panel Report, para. 8.281.
583Panel Report, para. 8.283. (original emphasis)

444. The Panel also found that the European Comm unities' claims under Article 6.8 and Annex II
of the Anti-Dumping Agreement were dependent on its claims of vi olation under Article 9.4 of that
Agreement, and that Articles 6.8 and Annex II do no t "provide an independent basis for a finding of
inconsistency where the 'all others' rate at issu e is not inconsistent with the provisions of
Article 9.4."
584 On this basis, the Panel made no findings with respect to the European Communities'
claims under Article 6.8 and Annex II of the Anti-Dumping Agreement.
445. On appeal, the European Comm unities argues that the Panel er red in its interpretation of
Article 9.4 of the Anti-Dumping Agreement. According to the European Communities, Article 9.4
expressly prohibits the inclusion of margins of dum ping based on facts available in the calculation of
the "all others" rate. The European Communities also argues that the Panel erred in exercising
judicial economy in relation to its claims under Article 6.8 and Annex II of the Anti-Dumping
Agreement, because these provisions provide an "independent basis" 585 for the prohibition of the
inclusion of "facts available" margins in the calculation of the "all others" rate.
446. The United States responds that the Panel correct ly held that the prohibition of the use of
zero, de minimis, and "facts available" margins of dumping contained in Article 9.4 applies only to the
ceiling of the "all others" rate, and that Artic le 9.4 provides no methodological guidance on the
calculation of that rate. According to the United States, where all margins of dumping for the
investigated exporters are zero, de minimis, or based on facts available, a ceiling cannot be determined
pursuant to Article 9.4 and, therefore, the prohibition contained therein does not apply.
586
447. Article 6.10 of the Anti-Dumping Agreement requires investigating authorities to determine an
individual margin of dumping for each "know n" exporter or producer of the product under
investigation. However, in cases where the number of exporters is so large as to make such a
determination impracticable, Article 6.10 permits investigating authorities to limit their examination
to a statistically valid sample of exporters, or to exporters representing the largest possible volume of
exports that can be reasonably investigated.
448. When investigating authorities have limited their examination to a selected number of
exporters pursuant to Article 6.10, the margin of dumping applicable to exporters that were not
selected for individual examination (the "all others" rate) is subject to the requirements of Article 9.4
of the Anti-Dumping Agreement, which provides, in relevant part:

584Panel Report, para. 8.284.
586United States' appellee's submission, paras. 148 and 152.

When the authorities have limited their examination in accordance
with the second sentence of paragraph 10 of Article 6, any
anti-dumping duty applied to imports from exporters or producers not
included in the examination shall not exceed:
(i) the weighted average margin of dumping established with
respect to the selected exporters or producers ...

provided that the authorities shall disregard for the purpose of this
paragraph any zero and de minimis margins and margins established
under the circumstances referred to in paragraph 8 of Article 6. The
authorities shall apply individual duties or normal values to imports
from any exporter or producer not included in the examination who
has provided the necessary information during the course of the
investigation, as provided for in subparagraph 10.2 of Article 6.
(emphasis added)
449. Hence, Article 9.4 provides for two distinct, but cl osely related, obligations. First, Article 9.4
establishes that, in cases where investigating authorit ies have limited their examination to a sample of
selected exporters or producers, any anti-dumping duty applied to exporters that were not individually
investigated "shall not exceed" the weighted average margin of dumping established for exporters that
have been individually investigated. Secondly, Article 9.4 directs investigating authorities to
disregard, "for the purposes of this paragraph", any zero and de minimis margins of dumping, and
margins of dumping established on the basis of facts available pursuant to Article 6.8.
450. The Appellate Body addressed the oblig ations provided under Article 9.4 in US – Hot-Rolled
Steel, where it explained that:
Article 9.4 does not prescribe any method that WTO Members must
use to establish the "all others" rate that is actually applied to
exporters or producers that are not investigated. Rather, Article 9.4
simply identifies a maximum limit, or ceiling, which investigating
authorities "shall not exceed" in establishing an "all others" rate.
... in determining the amount of the ceiling for the "all others" rate,
Article 9.4 establishes two prohibitions. The first prevents
investigating authorities from calcu lating the "all others" ceiling
using zero or de minimis margins; while the second precludes
investigating authorities from calculating that ceiling using "margins
established under the circumstances referred to" in Article 6.8.
587
(original emphasis)

587Appellate Body Report, US – Hot-Rolled Steel, para. 116.

451. Thus, the Panel's interpretation that Article 9.4 "establish[es] a methodology for the
calculation of a 'ceiling' which the 'all others' rate may not exceed" but does not "specify a method for
or impose disciplines on the calculation of the 'all others' rate itself"
588 seems a priori not to depart
from the Appellate Body's interpretation of that provision. The Appellate Body expressly recognized
that Article 9.4 does not prescribe any particular me thodology that must be used in the calculation of
the "all others" rate. The Appellate Body also emph asized that Article 9.4(i) constrains the discretion
of investigating authorities in two important ways: first, by imposing a ceiling that the "all others"
rate "shall not exceed". This ceiling ordinarily will correspond to the weighted average margin of
dumping for the exporters that were investigated. Secondly, the subsequent paragraph of Article 9.4
requires investigating authorities to disregard, for the purposes of that paragraph, any zero,
de minimis, and "facts available" margins. We observe, in this respect, that the Appellate Body in
US – Hot-Rolled Steel upheld the panel's finding that the "all ot hers" rate at issue in that appeal
exceeded the ceiling provided for in Article 9.4(i). In addition, the Appellate Body upheld the panel's
finding that "the United States' application of the method set forth in section 735(c)(5)(A) of the
Tariff Act of 1930, as amended, to determine the 'all others' rate in this case was inconsistent with
United States' obligations under the Anti-Dumping Agreement because it was based on a method that
included, in the calculation of the 'all others' rate, margins established, in part, using facts
available."
589
452. The circumstances of this appeal raise the ques tion of what obligations, if any, Article 9.4
provides in situations where all margins of dumping for the investigated exporters fall into the three
categories that Article 9.4 expressly requires investiga ting authorities to disregard for purposes of that
paragraph. In US – Hot-Rolled Steel , the Appellate Body recognized th e existence of a lacuna in this
respect in Article 9.4. 590 The Appellate Body recognized that Article 9.4 does not expressly address
the issue of how the ceiling for the "all others" ra te should be calculated in circumstances where all
margins of dumping for the investigated exporters are to be excluded from the calculation because
they are either zero, de minimis, or based on facts available. The Appellate Body also explained that
"Article 9.4 seeks to prevent the exporters, who were not asked to cooperate in the investigation, from

588Panel Report, para. 8.281.
589Appellate Body Report, US – Hot-Rolled Steel, para. 129. (original emphasis)
590In US – Hot-Rolled Steel, the Appellate Body stated:
This lacuna arises because, while Article 9.4 prohibits the use of certain
margins in the calculation of the ceiling for the "all others" rate, it does not
expressly address the issue of how that ceiling should be calculated in the
event that all margins are to be excluded from the calculation, under the
prohibitions. This appeal does not raise the issue of how that lacuna might
be overcome on the basis of the present text of the Anti-Dumping
Agreement. Accordingly, it is not necessary for us to address that question.
(Appellate Body Report, US – Hot-Rolled Steel, para. 126) (original emphasis; footnote omitted))

being prejudiced by gaps or shortcomings in the information supplied by the investigated
exporters."591
453. In this regard, we do not agree with the Panel's statement that, in situations where all margins
of dumping are either zero, de minimis, or based on facts available, Article 9.4 "simply imposes no
prohibition, as no ceiling can be calculated." 592 In our view, the fact that all margins of dumping for
the investigated exporters fall within one of the categories that Article 9.4 directs investigating
authorities to disregard, for purposes of that pa ragraph, does not imply that the investigating
authorities' discretion to apply duties on non-investigated exporters is unbounded. The lacuna that the
Appellate Body recognized to exist in Article 9.4 is one of a specific method. Thus, the absence of
guidance in Article 9.4 on what particular methodol ogy to follow does not imply an absence of any
obligation with respect to the "all others" rate a pplicable to non-investigated exporters where all
margins of dumping for the investig ated exporters are either zero, de minimis , or based on facts
available. In any event, the participants have not suggested specific alternative methodologies to
calculate the maximum allowable "all others" rate in situations where all margins of dumping
calculated for the investigated exporters fall into th e three categories to be disregarded, and we do not
need to resolve this issue to dispose of this appeal.
454. Turning to the appeal before us, we note th at, on 7 February 2008, the USDOC revoked the
anti-dumping duty orders in Cases 2, 4, and 5, foll owing negative likelihood-of-injury determinations
made by the USITC in the context of sunset reviews. These revocation orders took effect as of
7 March 2007. As a result, any cash deposits imposed on imports of non-investigated exporters
between 7 March 2007 and 7 February 2008, includ ing those resulting from the recalculated "all
others" rate, have been refunded. Consequently, no anti-dumping duties were imposed on imports of
non-investigated exporters as a result of the Section 129 determinations in Cases 2, 4, and 5.
455. Accordingly, we do not consider it necessary to make findings in relation to the European
Communities' claim that the United States acted inconsistently with Article 9.4 of the Anti-Dumping
Agreement in the establishment of the "all others" rate in the Section 129 determinations in Cases 2, 4,
and 5.
456. Finally, we turn to the European Communities' claim that the Panel erred in exercising
judicial economy in relation to its claims under Article 6.8 and Annex II of the Anti-Dumping
Agreement. The European Communities basically ar gues that those provisions establish an

591Appellate Body Report, US – Hot-Rolled Steel, para. 123. (original emphasis; footnote omitted)
592Panel Report, para. 8.283. (original emphasis)

"independent basis" for a prohibition of the use of "facts available" margins in the calculation of the
"all others" rate, even in cases where the calculati on of the "all others" rate is consistent with
Article 9.4.
457. Article 6.8 and Annex II of the Anti-Dumping Agreement establish, in relevant parts, that:
6.8 In cases in which any interested party refuses access to, or
otherwise does not provide, necessary information within a
reasonable period or significantly impedes the investigation,
preliminary and final determinations, affirmative or negative, may be
made on the basis of the facts available. The provisions of Annex II
shall be observed in the application of this paragraph.
ANNEX II
BEST INFORMATION AVAILABLE IN TERMS OF
PARAGRAPH 8 OF ARTICLE 6

7. ... It is clear, however, that if an interested party does not
cooperate and thus relevant inform ation is being withheld from the
authorities, this situation could lead to a result which is less
favourable to the party than if the party did cooperate.
458. In our view, the European Communities' allegation of error is predicated on the
non-investigated exporters being covered by th e disciplines of Article 6.8 and Annex II as
"cooperating" exporters. According to the European Communities, Article 6.8 and Annex II limit the
application of "facts available" to "non-coopera ting" exporters, whereas non- investigated exporters
are, by definition, "known" exporters that have "decided to 'cooperate'", but from which further
information was not requested.
593
459. We note, however, that by its express terms Article 6.8 permits the application of "facts
available" to an "interested party" who "refuses access to, or otherwise does not provide, necessary
information within a reasonable period, or significantly impedes the investigation". This, in our view,
confirms that Article 6.8 applies exclusively to those "interested parties" from which information was
required, rather than to those parties from which in formation was not requested. Thus, the disciplines
in relation to the application of "facts availabl e" under Article 6.8 and Annex II do not apply to
non-investigated exporters that eventually will be s ubject to the "all others" rate. As noted above, the
investigating authorities' discretion to impose duties on non-investigated exporters is subject to the

disciplines provided in Article 9.4, including the exclusion of any "facts available" margins of
dumping in the calculation of the maximum permissible duty applied to those exporters.
460. For this reason, we find that the Panel did not err in not making findings, in paragraphs 8.284,
and 9.1(c)(iii) of the Panel Report, in respect of the European Communities' claims under Article 6.8
and Annex II of the Anti-Dumping Agreement in the Section 129 determinations in Stainless Steel Bar
from France (Case 2), Stainless Steel Bar from Italy (Case 4), and Stainless Steel Bar from the United
Kingdom (Case 5).
XIII. The European Communities' Request for a Suggestion
461. We now consider the European Communities' arguments relating to its request for a
suggestion under the second sentence of Article 19.1 of the DSU.
462. The European Communities had asked the Panel to make suggestions as to how the United
States should bring its measures into conformity with its obligations under th e covered agreement.
The Panel declined the request by the European Communities, noting that it had provided in the
Report its "views with respect to US actions take n, or not taken, to implement the rulings and
recommendations in the original dispute, as well as on the scope of the US obligation to
implement".
594
463. On appeal, the European Communities requests th e Appellate Body to issue a suggestion to
the United States, pursuant to Article 19.1 of the DSU, on how to implement the DSB's
recommendations and rulings. The European Commun ities requests the Appellate Body to suggest to
the United States, including the United States' admi nistrative authorities and independent judicial
authorities, "that they forthwith take all necessary step s of a general or particular character to ensure
the conformity of all the measures at issue a nd all the measures taken to comply with the Anti-
Dumping Agreement, the GATT 1994, the DSU and the rulings and recommendations of the DSB in
the original proceeding, with full effect not later than the end of the reasona ble period of time, such
that any and all actions, including administrati ve reviews, assessment instructions and final
liquidations after that date are not based on zer oing, and are revised as necessary to achieve that
result".595
464. The United States responds that the Appellate Body should reject entirely the European
Communities' request for a suggestion in this disput e, because it would "merely restate the findings or

594Panel Report, para. 9.3.

rulings that the EC is seeking in this appeal", and would therefore "provide no 'useful guidance and
assistance' in implementing such rulings".
596 The United States also considers that the European
Communities' request for a suggestion would extend the Panel's findings to "an indeterminate set of
future measures"597, none of which would fall within the Panel's terms of reference.
465. We observe that the text of Article 19.1 of the DSU provides, in relevant part:
In addition to its recommendations, the panel or Appellate Body may
suggest ways in which the Member concerned could implement the
recommendations. (footnotes deleted; emphasis added)
466. The second sentence of Article 19.1 of the DSU confers a discretionary right, authorizing
panels and the Appellate Body to suggest ways in which the recommendations and rulings could be
implemented. The Appellate Body observed in EC – Bananas III (Article 21.5 – Ecuador II) , that
"[s]uggestions made by panels or the Appellate Body may provide useful guidance and assistance to
Members and facilitate implementation of DSB recommendations and rulings, particularly in complex
cases."
598 In the present case, the European Communiti es appears to request that the Appellate Body
suggest that the United States cease using zeroing in any action that is taken after the expiry of the
reasonable period of time.
467. We have expressed the view that subsequent ad ministrative review determinations in which
zeroing is used after the end of the reasonable peri od of time establish a failure to comply with the
recommendations and rulings of the DSB and that, if no such review is requested, a determination
after the end of the reasonable period of time by which anti-dumping liability is assessed on the basis
of cash deposit rates calculated with zeroing also establishes such a failure.
599 With respect to
measures that derive mechanically from the assessment of duties, we have indicated that they would
establish a failure to comply with the recommendations and rulings of the DSB to the extent that they
reflect zeroing and that they are applied after the e nd of the reasonable period of time even if such a
measure is consequent to an administrative review is sued before the end of that period. We have also
found that subsequent sunset reviews, in which zer oing was used and that provide the legal basis for
the continued imposition of anti-dumping duties afte r the end of the reasonable period of time,
establish a failure to comply with the recommendations and rulings of the DSB.

596United States' appellee's submission, para. 161 (quoting Appellate Body Reports, EC – Bananas III
(Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US), para. 325).
598Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III
(Article 21.5 – US), para. 325.
599We share the Panel's view that the United States fails to comply with the recommendations and
rulings of the DSB if it continues to apply cash deposit rates established on the basis of zeroing after the end of
the reasonable period of time in respect of the Cases at issue here.

468. In the light of these findings, we do not consider that the suggestion the European
Communities is requesting us to make would provid e useful guidance or facilitate the implementation
of the recommendations and rulings of the DSB. Therefore, we decline the European Communities'
request for a suggestion under Article 19.1 of the DSU.
XIV. Findings and Conclusions
469. For the reasons set out in this Report, the Appellate Body:
(a) finds that the Panel did not err in refraining, in paragraphs 8.17 and 9.1(a) of the
Panel Report, from making a finding on whether it was improperly composed;
(b) in respect of the Panel's terms of reference:
(i) upholds the Panel's finding, in paragraph 8.80 of the Panel Report, that the
subsequent reviews identified in th e European Communities' panel request
did not fall within the Panel's terms of reference under Article 21.5 of the
DSU as "amendments" to the original measures at issue;
(ii) reverses the Panel's finding, in paragraph 8.119 of the Panel Report, that none
of the subsequent reviews challenged by the European Communities that
were decided before the adoption of the recommendations and rulings of the
DSB fell within the Panel's te rms of reference, and finds
, instead, that the
sunset reviews in Granular Polytetrafluoroethylene Resin from Italy
(Case 24), Stainless Steel Sheet and Strip in Coils from Germany (Case 28),
Ball Bearings and Parts Thereof from France (Case 29), Ball Bearings and
Parts Thereof from Italy (Case 30), and Ball Bearings and Parts Thereof
from the United Kingdom (Case 31), had a sufficiently close nexus with the
declared measures "taken to comply", and with the recommendations and
rulings of the DSB, so as to fall within the Panel's terms of reference under
Article 21.5 of the DSU;
(iii) upholds
 the Panel's findings, in paragra ph 8.126(i) and (v) of the Panel
Report, that the 2004-2005 administrative reviews in Cases 1 and 6 fell
within the Panel's terms of reference under Article 21.5 of the DSU; and

(iv) finds
 that the Panel did not act inconsiste ntly with Article 11 of the DSU in
addressing the European Communities' alternative "close nexus" claim
without first addressing the European Communities' "omissions" claim; and
does not consider it necessary to make additional findings in relation to the
European Communities' claim that the Pa nel erred in declining to rule on its
claim that the subsequent reviews fell within the Panel's terms of reference as
"omissions" or "deficiencies" in the United States' implementation of the
recommendations and rulings of the DSB;
(c) with respect to the United States' complian ce obligations in relation to the Cases at
issue in the original proceedings:
(i) considers that a subsequent administrati ve review determin ation issued after
the end of the reasonable period of time in which zeroing is used, or, if no
such review is requested, a determination issued after the end of the
reasonable period of time by which anti-dumping liability is assessed on the
basis of cash deposit rates calculated w ith zeroing, would establish a failure
to comply with the recommendations and rulings of the DSB;
(ii) finds
, with respect to measures that ar e consequent to assessment reviews
that, in the ordinary course of the imposition of anti-dumping duties, derive
mechanically from the assessment of duties would establish a failure by the
United States to comply with the reco mmendations and rulings of the DSB to
the extent that they are based on zeroi ng and that they are applied after the
end of the reasonable period of tim e; and, accordingly, reverses
 the Panel's
interpretation, in paragraph 8.199 of th e Panel Report, that the United States'
obligation to implement the recommendations and rulings of the DSB does
not extend to the actual collection and liquidation of duties, and to the
issuance of assessment or liquidation instructions, when these actions result
from administrative review determina tions made before the end of the
reasonable period of time; and
(iii) declares
 the Panel's finding, in paragraphs 8.200 and 9.1(b)(iii) of the Panel
Report, that the European Communitie s has not established that the United
States failed to comply with the recommendations and rulings of the DSB by
liquidating, after the end of the reasonable period of time, duties that were
assessed with zeroing pursuant to administrative review determinations

issued before the end of the reasonable period of time, moot and of no legal
effect, as it was based on an erroneous reasoning;
(d) with respect to Certain Hot-Rolled Carbon Steel Fl at Products from the Netherlands
(Case 1):
(i) upholds the Panel's findings, in paragraphs 8.208 and 9.1(b)(i) of the Panel
Report, that the United States acted inc onsistently with Article 9.3 of the
Anti-Dumping Agreement and Article VI:2 of the GATT 1994 in its
determination in the 2004-2005 administrative review and in issuing the
consequent assessment instructions; and that, as a result of the final results of
this administrative review, the United St ates has failed to comply with the
recommendations and rulings of the DSB to bring the original investigation
in Case 1 into conformity; and
(ii) reverses
 the Panel's finding, in paragraphs 8.209 and 9.1(b)(iv) of the Panel
Report, that the assessment instruc tions issued on 16 April 2007 and the
liquidation instructions issued on 23 April 2007 do not establish that the
United States failed to comply with th e recommendations and rulings of the
DSB to bring the original investigation in Case 1 into conformity with its
obligations under the covered agreements by virtue of those instructions; and
finds
, instead, that these instructions, derived mechanically from the
assessment of final duty liability in the ordinary course of the imposition of
anti-dumping duties, are measures that were adopted after the end of the
reasonable period of time, and thus establish a failure by the United States to
comply with the recommendations and rulings of the DSB;
(e) with respect to Stainless Steel Wire Rod from Sweden (Case 6):
upholds
 the Panel's findings, in paragraphs 8. 213 and 9.1(b)(i) of the Panel Report,
that the United States acted inconsistently with Article 9.3 of the Anti-Dumping
Agreement and Article VI:2 of the GATT 1994 in issuing the results of the 2004-2005
administrative review determination on 9 May 2007, as well as the consequential
assessment and liquidation instructions; and also upholds the Panel's finding, in
paragraphs 8.213 and 9.1(b)(i) of the Panel Report, that the United States failed to
comply with the recommendations and rulin gs of the DSB to bring the original
investigation in Case 6 into conformity;

(f) with respect to Ball Bearings and Parts Thereof from the United Kingdom (Case 31):
finds
 that the Panel erred in refraining, in paragraph 8.217 of the Panel Report, to
make a specific finding with respect to the assessment after the end of the reasonable
period of time of duty liability for imports from NSK Bearings Europe Ltd. in
Case 31; and finds
 further that duties assessed after the end of the reasonable period
of time on the basis of cash deposits reflecting zeroing establish a failure by the
United States to comply with the recommendations and rulings of the DSB;
(g) with specific respect to Cases 18 through 24 and 27 through 30, is not in a position to
complete the analysis in relation to these Cases and declines to rule on whether the
Panel did not comply with its duties under Article 11 of the DSU;
(h) with respect to the subsequent sunset reviews:
(i) finds that the Panel did not err in concl uding, in paragraph 8.140 of the Panel
Report, that the European Communities has not demonstrated that the United
States failed to comply with the recommendations and rulings of the DSB in
respect of the sunset review in Stainless Steel Bar from Germany (Case 3);
(ii) declines
 to make a finding on whether the Panel erred in not ruling, in
paragraph 8.141 of the Panel Report, on the European Communities' claim
that the United States failed to comply with the recommendations and rulings
of the DSB in the sunset reviews in Stainless Steel Bar from France (Case 2),
Stainless Steel Bar from Italy (Case 4) , and Stainless Steel Bar from the
United Kingdom (Case 5);
(iii) reverses
 the Panel's findings, in paragraph 8.140 the Panel Report, that any
failure to comply by the United St ates in the sunset review in Certain Pasta
from Italy (Case 19) had not yet materialized as of the date of establishment
of the Panel and thus had no effect on the United States' implementation of
the recommendations and rulings of the DSB and that, as a consequence, the
European Communities has not demonstrated that the United States failed to
comply with the recommendations and rulings of the DSB;

(iv) finds that the sunset review in Certain Pasta from Italy (Case 19) is
inconsistent with Article 11.3 of the Anti-Dumping Agreement and results in
failure by the United States to comply with the recommendations and rulings
of the DSB;
(v) is unable to complete the analysis in respect of the sunset review in Granular
Polytetrafluoroethylene Resin from Italy (Case 24) in the absence of express
factual findings by the Panel and undisputed facts in the Panel record;
(vi) finds that the sunset reviews in Stainless Steel Sheet and Strip in Coils from
Germany (Case 28), Ball Bearings and Parts Thereof from France (Case 29),
Ball Bearings and Parts Thereof from Italy (Case 30), and Ball Bearings and
Parts Thereof from the United Kingdom (Case 31) are inconsistent with
Article 11.3 of the Anti-Dumping Agreement and result in failure by the
United States to comply with the recommendations and rulings of the DSB;
and
(vii) finds
 that the Panel did not act inconsistently with Article 11 of the DSU in
addressing the claims by the European Communities that the United States
failed to comply with the recommendations and rulings of the DSB in
subsequent sunset review proceedings;
(i) finds
 that the Panel did not act inconsistently with Article 11 of the DSU in declining,
in paragraphs 8.227 and 9.1(b)(vii) of the Panel Report, to make findings on the
European Communities' claim that, by not taking measures to comply between
9 April and 23 April/31 August 2007, the United States violated Article 21.3 of the
DSU;
(j) in relation to the alleged arithmetical e rror in the Section 129 determination in
Stainless Steel Sheet and Strip in Coils from Italy (Case 11):
(i) finds
 that the Panel erred in finding, in paragraph 8.244 of the Panel Report,
that the European Communities could no t properly raise claims with respect
to the alleged error in the calculation of TKAST's dumping margin in these
Article 21.5 proceedings, because it could have raised them in the original
proceedings, but failed to do so;

(ii) however, is unable to complete the analysis on whether the European
Communities could raise such claims, nor therefore to rule on whether the
United States failed to comply with th e recommendations and rulings of the
DSB by failing to correct such an alleged error;
(k) with respect to the establishment of th e "all others" rates in the Section 129
determinations in Stainless Steel Bar from France (Case 2), Stainless Steel Bar from
Italy (Case 4), and Stainless Steel Bar from the United Kingdom (Case 5):
(i) does not consider it necessary to make findings in relation to the European
Communities' claim that the United States acted inconsistently with
Article 9.4 of the Anti-Dumping Agreement in the establishment of the
"all others" rate; and
(ii) finds
 that the Panel did not err in not making findings, in paragraphs 8.284
and 9.1(c)(iii) of the Panel Report, in respect of the European Communities'
claims under Article 6.8 and Annex II of the Anti-Dumping Agreement; and
(l) declines the request by the European Commun ities to make a suggestion on how the
United States could implement the recommenda tions and rulings of the DSB in this
case.
470. To the extent that the United States has failed to comply with recommendations and rulings of
the DSB in the original proceedings, they remain operative. The Appellate Body recommends that the
DSB request the United States to implement fully the recommendations and rulings of the DSB.

Signed in the original in Geneva this 26th day of April 2009 by:

Shotaro Oshima
Presiding Member

 _________________________ _________________________
 Lilia R. Bautista Jennifer Hillman
 Member Member

ANNEX I

17 February 2009

(09-0804)
 Original: English

Recourse to Article 21.5 of the DSU by the European Communities

Notification of an 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 20(1) of the Working Procedures for Appellate Review

 The following notification, dated 13 February 2009, from the Delegation of the European
Commission, is being circulated to Members.

 Pursuant to Article 16.4 and Article 17 of the DSU the European Communities hereby notifies
to the Dispute Settlement Body its decision to app eal to the Appellate Body certain issues of law
covered in the Panel report and cer tain legal interpretations devel oped by the Panel in the dispute

Recourse to Article 21.5 of th e DSU by the European Communities (WT/DS294/RW). Pursuant to
Rule 20(1) of the Working Procedures for Appellate Review , the European Communities
simultaneously files this Notice of Appeal with the Appellate Body Secretariat.

 For the reasons set out in its submissions to the Panel, and for the reasons to be further
elaborated in its submissions to the Appellate B ody, the European Communities appeals, and requests
the Appellate Body to modify or reverse the lega l findings and conclusions of the Panel and with
respect to all matters to complete the analysis (whe ther or not this is specifically re-iterated in the
following paragraphs), with respect to the following errors of law and legal interpretations contained
in the Panel Report:

(a) The Panel erred in failing to rule on the substance of the EC claim that the Panel was
composed in a manner inconsistent with Articles 8.3 and 21.5 of the DSU, on the grounds
that it did not have the "authority" to rule on a matter with respect to which, according to the
Panel, the "ultimate power" rests with the Director General of the WTO .1 The Panel thus
failed to comply with basic requirements of due process and failed to ensure the full and
proper exercise of its judicial function. The Panel also acted inconsistently with the following
provisions of the DSU: Article 1.1 (failure to apply the DSU to a dispute concerning the
DSU); Article 3.2, first sentence (failure to clarify the provisions of the DSU in accordance
with customary rules of interpretation of pub lic international law); Articles 3.2 and 19.2

1Panel Report, paras. 8.13–8.17 and 9.1(a).

(failure to ensure that the European Communities' DSU rights were not diminished);
Articles 3.3 and 23.1 (failure to allow for the settlement of the dispute by recourse to the
DSU); Article 7.2 (failure to properly a ddress the relevant provisions of the DSU cited by the
European Communities); Article 11 (failure to make such other findings as would assist the
DSB); and Article 12.7 (failure to set out th e basic rationale behind its findings). The
European Communities requests the Appellate Body to modify or reverse the Panel's findings
and complete the analysis by finding that the Panel was composed inconsistently with
Articles 8.3 and 21.5 of the DSU. One panellist remained in office at the stage of the
compliance panel and was not lawfully removed by the United States or by the Director
General of the WTO. The European Communities also requests the Appellate Body to
reverse the Panel's finding that, if it would ha ve agreed with the European Communities, it
would have been compelled to rule that it had no jurisdiction to rule on any of the EC
claims.
2

(b) The Panel made errors relating to the legal in terpretation of Articles 19.1, 21.3 and 21.5 of the
DSU,
3 and failed to comply with its functions as required by Articles 7 and 11 of the DSU
when excluding certain subsequent reviews listed in the Annex to the EC Compliance Panel
Request from its terms of reference.4 In particular, the European Communities claims that:

• the Panel erred in rejecting the EC claim that the subsequent reviews listed in the Annex
to the EC Compliance Panel Request fell unde r its terms of reference because they were
"amendments" to the measures at issue in the original dispute;5

• the Panel erred in failing to examine or properly examine whether the US omissions and
deficiencies in the US implementation of the DSB recommendations and rulings fell
under its terms of reference;6 and

• the Panel erred in excluding certain subsequent reviews from its terms of reference on the
basis that they did not have a close nexus with the measures at issue in the original
dispute and the DSB recommendations and rulings in view of their timing.7

 The European Communities requests the Appellate Body to modify or reverse the Panel's
findings, and to complete the analysis by find ing that, in relation to these matters, the United
States failed to comply with the relevant provi sions of the covered agreements cited in the
pleadings before the Panel and with the rulin gs and recommendations of the DSB in the
original proceedings.

2Panel Report, para. 8.13.
3All EC claims and arguments referring to Articles 19.1, 21.3 or 21.5 of the DSU are to be considered
in the context of Article 3.7 of the DSU.
only referring to certain subsequent reviews) and para. 9.1(b) (by omission and by implication, only referring to
certain subsequent reviews).
5Panel Report, paras. 8.61–8.84 and para. 9.1(b) (by omission and by implication).
6Panel Report, paras. 8.85–8.86, para. 8.127 (by omission and by implication) and para. 9.1(b) (by
omission and by implication).
7Panel Report, paras. 8.111–8.116, 8.119–8.124, 8.126 (by omission and by implication) and 9.1(b) (by
omission and by implication).

(c) The Panel erred in finding that the Europ ean Communities had not demonstrated that the
United States failed to comply with the DSB r ecommendations and rulings in the subsequent
sunset reviews at issue. 8 This conclusion was based on erroneous findings on issues of law
and related legal interpretations of Articles 19.1, 21.3 and 21.5 of the DSU. Furthermore, the
Panel disregarded its mandate and failed to comply with its functions as required by
Article 11 of the DSU when failing to address the EC claim that the United States failed to
comply with the DSB recommendations in the orig inal dispute, since certain aspects of the
measures at issue in the original dispute ( i.e., the dumping margins based on zeroing)
remained in place ( i.e., the United States relied on those margins for the determination of
likelihood of recurrence of dumpi ng in subsequent sunset review proceedings concerning the
same anti-dumping "measure").9 The European Communities re quests the Appellate Body to
complete the analysis and find that the United St ates acted inconsistently with Articles 2.1,
2.4, 2.4.2 and 11.3 of the Anti-Dumping Agreement and Articles 19.1 and 21.3 of the DSU,
and failed to comply with the DSB rulings and recommendations in the original proceedings.

(d) The Panel erred in rejecting the EC claims that certain US actions or omissions based on
zeroing after the expiry of the reasonable period of time were inconsistent with the US
obligation and public commitment to im mediately comply with the rulings and
recommendations of the DSB, and with vari ous provisions of Article VI of the GATT 1994,
the Anti-Dumping Agreement and the DSU.10 In particular, the European Communities
requests the Appellate Body:

• with respect to all cases, to modify or reverse the Panel's finding that assessment
instructions and final liquidations after th e end of the reasonable period of time and
within the scope of the compliance panel, b ased on zeroing, are not inconsistent with
Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement (with
respect to administrative reviews), Articles 2.1, 2.4, 2.4.2 and 11.3 of the Anti-Dumping
Agreement (with respect to sunset reviews) and Articles 2.4 and 2.4.2 of the Anti-
Dumping Agreement (with respect to original investigations) and do not constitute a
failure to comply with the rulings and recommendations of the DSB in the original case.
11
The European Communities requests the Appe llate Body to complete the analysis,
finding that assessment instructions or final liquidations after the end of the reasonable
period of time and within th e scope of the compliance panel, based on zeroing, are
inconsistent with the above provisions and with Articles 19.1 and 21.3 of the DSU, and
constitute a failure to comply with the ru lings and recommendations of the DSB in the
original proceedings;

• with respect to Case 1 ( Hot Rolled Carbon Steel from the Netherlands ), to uphold the
Panel's finding that the 2004-2005 administrativ e review and assessment instructions (by
action or omission) were inconsistent with Article VI:2 of the GATT 1994 and Article 9.3
of the Anti-Dumping Agreement and a failure to comply with the DSB rulings and
recommendations,12 albeit on the basis of the differe nt and more developed reasoning to
be set out in the appeal; and to find that th e Panel erred in failing to specifically address

8Panel Report, paras. 8.135–8.141 and 9.1(b)(vi).
9Panel Report, para. 8.222.
10Panel Report, paras. 8.164–8.222 and 9.1(b)(i)-(v).
11Panel Report, paras. 8.191–8.193, particularly (but not only) para. 8.191, first sentence, referring to
paras. 8.170–8.185, particularly (but not only) para. 8.174, first sentence (including footnote 769); re-iterated at
paras. 8.199–8.200 (including footnote 803); and Panel Report, para. 9.1(b)(iii) and (iv) and 9.1 (by omission
and by implication).
12Panel Report, paras. 8.208 and 9.1(b)(i).

the same issue with respect to the final liquidations (by action or omission)
13 and erred in
its other findings on this issue, 14 and to complete the analysis by making the same
findings as for the administrative review and assessment instructions;

• also with respect to Case 1 ( Hot Rolled Carbon Steel from the Netherlands ), to modify or
reverse the Panel's findings and conclusions 15 concerning the assessment instructions on
16 April 2007 and the liquidation instructions on 23 April 2007, instructing liquidation
for the period 1 November 2005 to 31 October 2006, on the basis of the cash deposit rate
originally in force at the time of importa tion, and based on zeroing. The European
Communities requests the Appellate Body to co mplete the analysis and find that these
actions by the United States after the end of the reasonable period of time were
inconsistent with Article VI:2 of the GATT 1994 , Article 9.3 of the Anti-Dumping
Agreement and Articles 19.1 and 21.3 of the DSU, and constitute a failure to comply with
the rulings and recommendations of the DSB in the original case;

• with respect to Case 6 ( Stainless Steel Wire Rod from Sweden ), to uphold the Panel's
finding that the 2004-2005 administrative review and assessment instructions (by action
or omission) were inconsistent with Article VI:2 of the GATT 1994 and Article 9.3 of the
Anti-Dumping Agreement ,16 albeit on the basis of the different and more developed
reasoning to be set out in the appeal; and to find that the Panel erred in failing to
specifically address the same issue with resp ect to the final liquidations (by action or
omission)17 and erred in its other findings on this issue, 18 and to complete the analysis by
making the same findings as for the administrative review and assessment instructions;

• with respect to 12 Cases,19 to modify or reverse the erroneous findings in paragraph 8.202
of the Panel Report; to uphold the correct findi ngs in the final two sentences of paragraph
8.218 of the Panel Report; to find that the Pane l has acted inconsistently with Article 11
of the DSU; and to the extent necessary, to complete the analysis, also with respect to the
appropriate conclusions and recommendations, by finding that, by continuing to maintain
in place duty or cash deposit rates with resp ect to these 12 Cases, the United States acted
inconsistently with Article VI:2 of the GATT 1994 , Article 9.3 of the Anti-Dumping
Agreement (or in the case of sunset reviews with Articles 2.1, 2.4, 2.4.2 and 11.3 of the
Anti-Dumping Agreement ) and Articles 19.1 and 21.3 of the DSU, and that this
constitutes a failure to comply with the ru lings and recommendations of the DSB in the
original case; and

• to modify or reverse the Panel's findings reje cting the EC claim according to which, once
an anti-dumping order is revoked pursuant to the Section 129 Determination (because
absent zeroing no dumping was found) the United States was not entitled to continue
adopting administrative reviews and other acti ons (including collection of duties) based
on zeroing in relation to that revoked order afte r the end of the reasonable period of time;
and to complete the analysis accordingly by finding that the United States violated
Articles 19.1 and 21.3 of the DSU and the DSB rulings and recommendations in the
original proceedings.
20

13Panel Report, paras. 8.208 and 9.1(b)(i) (by omission and by implication).
14Panel Report, para. 9.1(b)(iii) and (iv).
15Panel Report, paras. 8.205, 8.209 and 9.1(b)(iii) and (iv).
16Panel Report, paras. 8.213 and 9.1(b)(i).
17Panel Report, paras. 8.213 and 9.1(b)(i) (by omission and by implication).
18Panel Report, para. 9.1(b)(iii).
19Cases 18-24, 27-30 and 31.
20Panel Report, paras. 8.219–8.222, particularly (but not only) para. 8.222, final sentence.

(e) The Panel erred with respect to the correct lega l interpretations of Articles 19.1, 21.3 and 21.5
of the DSU, disregarded its mandate, exercised false judicial economy, and failed to comply
with its functions as requi red by Article 11 of the DSU when failing to make any findings
with respect to the EC claims regarding the non-existence of measures taken to comply
between 9 April and 23 April/31 August 2007 .21 The European Communities requests the
Appellate Body to complete the analysis by fi nding that the United States acted inconsistently
with Articles 19.1 and 21.3 of the DSU and failed to comply with the DSB rulings and
recommendations in the original proceedings.

(f) The Panel made errors relating to the le gal interpretation of Article 21.5 of the DSU when
finding that the EC claims (particularly regarding the arithmetical error ) in respect of the
Section 129 Determination concerning Stainless Steel Sheet and Strip in Coils from Italy
(listed as Case 11 in the Annex to the EC Panel Request) were not properly before the Panel.22
The European Communities requests the Appellate Body to complete the analysis by finding
that the EC claims could properly be made in these compliance proceedings and that the
United States acted inconsistently with Articles 2, 5.8, 6.8, 9.3, 11.1 and 11.2 of the Anti-
Dumping Agreement, Article VI:2 of the GATT 1994, Articles 19.1 and 21.3 of the DSU and
failed to comply with the DSB rulings and recommendations in the original proceedings.

(g) The Panel erred in finding that the United Stat es did not act inconsistently with Article 9.4 of
the Anti-Dumping Agreement in the establishment of "all others" rates
 in the Section 129
Determinations concerning Stainless Steel Bar from France, Italy and the United Kingdom
(listed as Cases 2, 4 and 5 in the Anne x to the EC Compliance Panel Request); 23 moreover,
the Panel erred in failing to examine the EC claim based on Article 6.8 and Annex II of the
Anti-Dumping Agreement .
24 The European Communities requests the Appellate Body to
complete the analysis by finding that the United States acted inconsistently with Article 9.4 of
the Anti-Dumping Agreement , Article 6.8 and Annex II of the Anti-Dumping Agreement ,
Articles 19.1 and 21.3 of the DSU and failed to comply with the DSB rulings and
recommendations in the original proceedings.

(h) The Panel erred in rejecting the EC request for a suggestion
 pursuant to Article 19.1 of the
DSU,25 and the European Communities requests th e Appellate Body to make appropriate
suggestions in this case.

21Panel Report, paras. 8.226–8.227 and 9.1(b)(vii).
22Panel Report, paras. 8.237–8.244 and 9.1(c)(i).
23Panel Report, paras. 8.278–8.284 and 9.1(c)(iii).
24Panel Report, paras. 8.284 and 9.1 (by omission and by implication).
25Panel Report, para. 9.3.

ANNEX II

26 February 2009

(09-1001)
 Original: English

Recourse to Article 21.5 of the DSU by the European Communities

Notification of an Other Appeal by the United States
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 25 February 2009, from the Delegation of the United States,
is being circulated to Members.

Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and Rule 23(1) of the Worki ng Procedures for Appellate Review, the
United States hereby notifies its decision to appeal to the Appellate Body certain issues of law
covered in the report of the panel in : Recourse to Article 21.5 of the DSU by the European
Communities (WT/DS294/RW) and certain legal interpreta tions developed by the Panel in this
dispute.

1. The United States seeks review by the Appella te Body of the Panel's conclusion that the
United States failed to comply with the recommenda tions and rulings of the Dispute Settlement Body
("DSB") in the original dispute and has acted inconsistently with Article 9.3 of the Agreement on
Implementation of Article VI of the Ge neral Agreement on Tariffs and Trade 1994 ("AD Agreement")
and Article VI:2 of the General Agreement on Tariffs and Trade 1994 ("GATT 1994") by publishing
determinations, after the end of the reasonable period of time, of the amount of antidumping duty to
be assessed based on zeroing in the 2004-2005 administrative reviews in Hot-Rolled Steel from the
Netherlands and Stainless Steel Wire Rod from Sweden and issuing assessment instructions pursuant
to the results of those administrative reviews. This conclusion is in error and based on erroneous
findings on issues of law and related legal interpretations of DSU Articles 21 and 22.

2. Specifically, the United States request s the Appellate Body to reverse:

(a) the Panel's finding in paragraph 8.126 of its report
1 that these two administrative
reviews of entries that were made in 2004 and 2005 fell within its terms of reference;

1The paragraphs on which the Panel's finding in paragraph 8.126 is based include, for example,
paragraphs 8.87-8.125 of the Panel's report.

(b) (i) the Panel's finding in paragraph 8.208 of its report 2 that, in issuing the final
results of the 2004-2005 administrative review in Hot-Rolled Steel from the
Netherlands and assessment instructions pursu ant to those results, the United
States acted inconsistently with Article 9.3 of the AD Agreement and
Article VI:2 of the GATT 1994, because this review did not fall within the
Panel's terms of reference; and

(ii) the Panel's further finding in paragraph 8.208 of its report that, in issuing the
final results of the 2004-2005 administrative review in Hot-Rolled Steel from
the Netherlands and assessment instructions pursuant to those results, the
United States failed to comply with the DSB's recommendations and rulings
to bring the original investigation in Hot-Rolled Steel from the Netherlands
into conformity with the covered agreements, because those assessment
reviews were of entries that were made prior to the end of the reasonable
period of time, and indeed prior to the DSB's recommendations and rulings in
the original dispute;

(c) (i) the Panel's finding in paragraph 8.213 of its report 3 that, in issuing the final
results of the 2004-2005 administrative review in Stainless Steel Wire Rod
from Sweden and assessment instructions pursuant to those results, the United
States acted inconsistently with Article 9.3 of the AD Agreement and
Article VI:2 of the GATT 1994, because this review did not fall within the
Panel's terms of reference; and

(ii) the Panel's further finding in paragraph 8.213 of its report that, in issuing the
final results of the 2004-2005 administrative review in Stainless Steel Wire
Rod from Sweden and assessment instructions pu rsuant to those results, the
United States failed to comply with the DSB's recommendations and rulings
to bring the original investigation in Stainless Steel Wire Rod from Sweden
into conformity with the covered agreements, because those assessment
reviews were of entries that were made prior to the end of the reasonable
period of time, and indeed prior to the DSB's recommendations and rulings in
the original dispute; and

(d) the Panel's conclusions in paragraph 9.1(b)(i) of its report, which are based on the
erroneous findings referenced above.

2The paragraphs on which the Panel's findings in paragraph 8.208 are based include, for example,
paragraphs 8.87-8.125 and 8.203-8.208 of the Panel's report.
3The paragraphs on which the Panel's findings in paragraph 8.213 are based include, for example,
paragraphs 8.87-8.125 and 8.210-8.213 of the Panel's report.

ANNEX III

O
RGANISATION MONDIALE ORGANIZACIÓN MUNDIAL
 DU COMMERCE DEL COMERCIO

APPELLATE BODY

Recourse to Article 21.5 of the DSU by the European Communities

AB-2009-1

Procedural Ruling

1. On 16 February 2009, the Appellate Body Divisi on hearing this appeal received a request
from the European Communiti es to allow observation by the public of the oral hearing in the above
appellate proceedings. On 19 February 2009, the United States also requested the Division to
authorize public observation of the oral hearing. The participants argued that nothing in the
Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU") or the
Working Procedures for Appellate Review (the "Working Procedures") precludes the Appellate Body
from authorizing public observation of the oral hearing.
1

2. On 20 February 2009, we invited the third par ticipants to comment in writing on the requests
of the participants. In particular, we asked th e third participants to provide their views on the
permissibility of opening the hearing under the DSU and the Working Procedures , and, if they so
wished, on the specific logistical arrangements pr oposed in the requests. We received comments on
2 March 2009 from India, Japan, Korea, Mexico, Norway, the Separate Customs Territory of Taiwan,
Penghu, Kinmen and Matsu, and Thailand. Japan, Norway, and the Separate Customs Territory of
Taiwan, Penghu, Kinmen and Matsu expressed their support for the requests of the participants. India,
Mexico, and Thailand expressed the view that the pr ovisions of the DSU do not allow public hearings
at the appellate stage. According to these third participants, the oral hearing forms part of the
proceedings of the Appellate Body and, therefore, is subject to the requirement of Article 17.10 of the
DSU that "[t]he proceedings of the Appellate Bo dy shall be confidential. " Korea shared these
concerns but did not object to the opening of the oral hearing to the public in these proceedings;
at the same time, Korea requested the Appellate Body to treat its written and oral statements as
confidential. Mexico and Thailand expressly requ ested the Appellate Body to treat their written
statements and oral submissions as confidential sh ould it decide to allow public observation of the
oral hearing.

1Similar requests were made in the appeals in United States – Continued Suspension of Obligations in
the EC – Hormones Dispute and Canada – Continued Suspension of Obligations in the EC – Hormones
Dispute; European Communities – Regime for the Importation, Sale and Distribution of Bananas – Second
Recourse to Article 21.5 of the DSU by Ecuador and European Communities – Regime for the Importation, Sale
and Distribution of Bananas – Recourse to Article 21.5 of the DSU by the United States ; and United States –
Continued Existence and Application of Zeroing Methodology.

3. We are making the following ruling on the requests of the participants, having carefully
considered the comments of the third participants. Ar ticle 17.10 must be read in context, particularly
in relation to Article 18.2 of the DSU. The sec ond sentence of Article 18.2 expressly provides that
"[n]othing in this Understanding shall preclude a part y to a dispute from disclosing statements of its
own positions to the public". Thus, under Article 18.2, the parties may decide to forego
confidentiality protection in respect of their statemen ts of position. The third sentence of Article 18.2
states that "Members shall treat as confidential information submitted by another Member to the panel
or the Appellate Body which that Member has desi gnated as confidential." This provision would be
redundant if Article 17.10 were interpreted to re quire absolute confidentiality in respect of all
elements of appellate proceedings. There would be no need to require, pursuant to Article 18.2, that a
Member designate certain information as confidential. The last sentence of Article 18.2 ensures that
even such designation by a Member does not put an end to the right of another Member to make
disclosure to the public. Upon request, a Member must provide a non-confidential summary of the
information contained in its written submissions that it designated as confidential, which can then be
disclosed to the public. Thus, Article 18.2 provi des contextual support for the view that the
confidentiality rule in Article 17.10 is not absolute . Otherwise, no disclosure of written submissions
or other statements would be permitted during any stage of the proceedings.

4. In practice, the confidentiality requirement in Article 17.10 has its limits. Notices of Appeal
and Appellate Body reports are discl osed to the public. Appellate Bo dy reports contain summaries of
the participants' and third participants' written and oral submissions and frequently quote directly from
them. Public disclosure of Appellate Body reports is an inherent and necessary feature of our rules-
based system of adjudication. Consequently, u nder the DSU, confidentiality is relative and time-
bound.

5. In our view, the confidentiality requirement in Article 17.10 is more properly understood as
operating in a relational manner.
2 There are different sets of relationships that are implicated in
appellate proceedings. Among them are the following relationships. First, a relationship between the
participants and the Appellate Body. Secondly, a relationship between the third participants and the
Appellate Body. The requirement that the proceedi ngs of the Appellate Body are confidential affords
protection to these separate relationships and is intend ed to safeguard the inter ests of the participants
and third participants and the adj udicative function of the Appellate Body, so as to foster the system
of dispute settlement under conditions of fairness, im partiality, independence and integrity. In this
case, the participants have requested authoriza tion to forego confidentiality protection for their
communications with the Appellate Body at the oral hearing. The requests of the participants do not
extend to any communications, nor touch upon the relati onship, between the third participants and the
Appellate Body. The right to confidentiality of thir d participants vis-à-vis the Appellate Body is not
implicated by these requests. The question is thus whether the participants' requests to forego
confidentiality protection satisfy the requirements of fairness and integrity that are the essential
attributes of the appellate process and define th e relationship between the Appellate Body and the
participants. If the requests meet these standard s, then the Appellate Body would incline towards
authorizing them.

6. We note that the DSU does not specifically provide for an oral hearing at the appellate stage.
The oral hearing was instituted by the Appellate Body in its Working Procedures, which were drawn
up pursuant to Article 17.9 of the DSU. The conduct and organization of the oral hearing falls within
the authority of the Appellate Body ( compétence de la compétence ) pursuant to Rule 27 of the
Working Procedures. Thus, the Appellate Body has the power to exercise control over the conduct of
the oral hearing, including authorizing the lifting of c onfidentiality at the request of the participants as
long as this does not adversely affect the rights and interests of the third participants or the integrity of

2This relational view of rights and obligations of confidentiality is consistent with the approach
followed in domestic jurisdictions with respect to similar issues, such as privilege.

the appellate process. As we observed earlier, Artic le 17.10 also applies to the relationship between
third participants and the Appellate Body. Nevert heless, in our view, the third participants cannot
invoke Article 17.10, as it applies to their relationship with the Appellate Body, so as to bar the lifting
of confidentiality protection in the relationship be tween the participants and the Appellate Body.
Likewise, authorizing the participants' requests to forego confidentiality does not affect the rights of
third participants to preserve the confidentiality of their communications with the Appellate Body.

7. The powers of the Appellate Body are themselv es circumscribed in that certain aspects of
confidentiality are incapable of derogation—even by the Appellate Body—where derogation may
undermine the exercise and integrity of the Appellate Body's adjudicative function. This includes the
situation contemplated in the second sentence of Artic le 17.10, which provides that "[t]he reports of
the Appellate Body shall be drafted without the presen ce of the parties to the dispute and in the light
of the information provided and the statements ma de." Confidentiality of the deliberations is
necessary to protect the integrity, impartiality, and independence of the appellate process. In our
view, such concerns do not arise in a situation wh ere, following requests from the participants, the
Appellate Body authorizes the lifting of the confidentia lity of the participants' statements at the oral
hearing.

8. The Appellate Body has fostered the active par ticipation of third parties in the appellate
process in drawing up the Working Procedures and in appeal practice. Article 17.4 provides that third
participants "may make written submissions to, a nd be given an opportunity to be heard by, the
Appellate Body." In its Working Procedures, the Appellate Body has given full effect to this right by
providing for participation of third participants during the entirety of the oral hearing, while third
parties meet with panels only in a separate session at the first substantive meeting. The rights of third
participants are distinct from those of the main pa rticipants to a dispute. They have a systemic
interest in the interpretation of the provisions of the covered agreements that may be at issue in an
appeal. Although their views on the questions of lega l interpretation that come before the Appellate
Body are always valuable and thoroughly consid ered, these issues of legal interpretation are not
inherently confidential. However, it is not for th e third participants to determine how the protection
of confidentiality in the relationship between the pa rticipants and the Appellate Body is best dealt
with. We do not consider that the third particip ants have identified a specific interest in their
relationship with the Appellate Body that would be adversely affected if we were to authorize the
participants' requests.

9. The requests for public observation of the oral hearing in this dispute have been made by the
European Communities and the United States. As we explained earlier, the Appellate Body has the
power to authorize the requests by the participants to lift confidentiality, provided that this does not
affect the confidentiality of the relationship between third participants and the Appellate Body, or
impair the integrity of the appellate process. The participants have suggested that the Appellate Body
allow observation by the public of the oral hearing in this dispute by means of simultaneous closed-
circuit television broadcasting with the transmission being switched off when those third participants
who do not wish to make their statements public ta ke the floor. We do not see the public observation
of the oral hearing, using the means described a bove, as having an adverse impact on the integrity of
the adjudicative functions performed by the Appellate Body.

10. For these reasons, the Division authorizes the public observation of the oral hearing in these
proceedings on the terms set out below. Accordingly, pursuant to Rule 16(1) of the Working
Procedures, we adopt the following additional procedures for the purposes of this appeal:

(a) The oral hearing will be open to public ob servation by means of simultaneous closed-
circuit television. The closed-circuit tele vision signal will be shown in a separate
room to which duly registered delegat es of WTO Members and members of the
general public will have access.

(b) Oral statements and responses to questions by third participants wishing to maintain
the confidentiality of their submissions will not be subject to public observation.

(c) Any third participant that has not already done so may request that its oral statements
and responses to questions remain conf idential and not be subject to public
observation. Such requests must be recei ved by the Appellate Body Secretariat
no later than 5:00 p.m. Geneva time on Wednesday, 18 March 2009

(d) An appropriate number of seats will be reserved for delegates of WTO Members in
the room where the closed-circuit broadcast will be shown.

(e) Notice of the oral hearing will be provid ed to the general public through the WTO
website. WTO delegates and members of the general public wishing to observe the
oral hearing will be required to register in advance with the WTO Secretariat.

(f) Should practical considerations not allow si multaneous broadcast of the oral hearing,
deferred showing of the video recording will be used in the alternative.

4 March 2009