EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS OF COTTON-TYPE BED LINEN FROM INDIA RECOURSE TO ARTICLE 21.5 OF THE DSU BY INDIA AB-2003-1
Document: Report of the Appellate Body
Date: 8 April 2003
Document codes: WT/DS141/AB/RW
Complainant: India
Respondent: EU
Third parties: Egypt, Japan, South Korea, U.S.
Dispute stage: Consultation
Agreements cited: Art. VI, I  GATT 1994Art. 2, 3, 4, 5, 15, 12  Anti-dumping

EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
RECOURSE TO ARTICLE 21.5 OF THE DSU BY INDIA
AB-2003-1
Report of the Appellate Body

APPELLATE BODY
European Communities – Anti-Dumping Duties
on Imports of Cotton-Type Bed Linen from India
Recourse to Article 21.5 of the DSU by India
India, Appellant
European Communities, Appellee
Japan, Third Participant
Korea, Third Participant
United States, Third Participant
AB-2003-1
Present:
Abi-Saab, Presiding Member
Bacchus, Member
Taniguchi, Member
I. Introduction
1. India appeals certain issues of law and legal interpretations in the Panel Report, European
Communities – Anti-Dumping Duties on Imports of Co tton-Type Bed Linen from India – Recourse to
Article 21.5 of the DSU by India (the "Panel Report"). 1 The Panel was established to consider a
complaint by India with respect to the consistency with the Agreement on Implementation of Article VI
of the General Agreement on Tariffs and Trade 1994 (the " Anti-Dumping Agreement ") and the
Understanding on Rules and Procedures Go verning the Settlement of Disputes (the "DSU") of the
measures taken by the European Communities to comply with the recommendations and rulings of the
Dispute Settlement Body (the "DSB") in EC – Bed Linen. 2
2. The original panel found that Council Regulation (EC) No 2398/97 of 28 November 1997 3,
imposing definitive anti-dumping duties on imports of cotton-type bed linen from India, is
inconsistent with Articles 2.4.2, 3.4, and 15 of the Anti-Dumping Agreement . 4 India and the
European Communities appealed certain issues of law and legal interpretations developed by the
original panel. The Appellate Body upheld the original panel's finding that "the practice of 'zeroing'
when establishing 'the existence of margins of dumping', as applied by the European Communities in
the anti-dumping investigation at issue" is inconsistent with Article 2.4.2 of the Anti-Dumping

1WT/DS141/RW, 29 November 2002.
2The recommendations and rulings of the DSB resulted from the adoption, by the DSB, of the
Appellate Body Report and the panel report, as modified by the Appellate Body Report, in EC – Bed Linen.
3Council Regulation (EC) No 2398/97, 28 November 1997, imposing a definitive anti-dumping duty on
imports of cotton-type bed linen originating in Egypt, India and Pakistan, published in the Official Journal of the
European Communities, 4 December 1997, L-series, No. 332 ("EC Regulation 2398/97").
4Original Panel Report, WT/DS141/R, adopted 12 March 2001, as modified by the Appellate Body
Report, WT/DS141/AB/R.

Agreement. 5 In addition, the Appellate Body found that "the European Communities, in calculating
amounts for administrative, selling and general costs and profits in the anti-dumping investigation at
issue", had acted inconsistently with its obligations under Article 2.2.2(ii) of the Anti-Dumping
Agreement and, therefore, reversed the findings of the original panel to the contrary in paragraphs
6.75 and 6.87 of the original panel report.
 6
3. On 12 March 2001, the DSB adopted the Appellate Body Report and the original panel report,
as modified by the Appellate Body Report. 7 The parties to the dispute mutually agreed that the
European Communities should have until 14 August 2001 to implement the recommendations and
rulings of the DSB.
 8 On 7 August 2001, the Council of the European Union adopted Council
Regulation (EC) No 1644/2001, amending the original definitive anti-dumping measure on cotton-
type bed linen from India.
 9 Subsequently, on 28 January 2002 and 22 April 2002, the Council of the
European Union adopted Council Regulations (EC) No 160/2002 and No 696/2002, respectively. 10
EC Regulation 160/2002 terminated the anti-dumping proceedings against cotton-type bed linen
imports from Pakistan and established that the an ti-dumping measures against Egypt would expire on
28 February 2002, if a review were not requested by that date. This review was not requested, and the
anti-dumping measures against Egypt expired. EC Regulation 696/2002 established that a
reassessment of the injury and causal link based on imports from India alone had revealed that there
was a causal link between the dumped imports from India and material injury to the European
Communities industry. Additional factual aspects of this dispute are set out in greater detail in the
Panel Report.
 11

5Appellate Body Report, EC – Bed Linen, adopted 12 March 2001, para. 86(1).
6Ibid., para. 86(2).
7WT/DS141/9, 22 March 2001.
8WT/DS141/10, 1 May 2001.
9Council Regulation (EC) No 1644/2001, 7 August 2001, amending Regulation (EC) No 2398/97
imposing a definitive anti-dumping duty on imports of cotton-type bed linen originating in Egypt, India and
Pakistan and suspending its application with regard to imports originating in India, published in
the Official Journal of the European Communities, 14 August 2001, L-series, No. 219 ("EC Regulation
1644/2001").
10Council Regulation (EC) No 160/2002, 28 January 2002, amending Council Regulation (EC)
No 2398/97 imposing a definitive anti-dumping duty on imports of cotton-type bed linen originating in Egypt,
India and Pakistan, and terminating the proceeding with re gard to imports originating in Pakistan, published in
the Official Journal of the European Communities, 30 January 2002, L-series, No. 26 ("EC Regulation
160/2002").
Council Regulation (EC) No 696/2002, 22 April 2002, confirming the definitive anti-dumping duty
imposed on imports of cotton-type bed linen originating in India by Regulation (EC) No 2398/97, as amended
and suspended by Council Regulation (EC) No 1644/2001, published in the Official Journal of the European
Communities, 25 April 2002, L-series, No. 109 ("EC Regulation 696/2002").
11Panel Report, paras. 2.1-2.11.

4. India was of the view that the European Communities had failed to comply with the
recommendations and rulings of the DSB, a nd that EC Regulations 1644/2001, 160/2002, and
696/2002 were inconsistent with several provisions of the Anti-Dumping Agreement and Article 21.2
of the DSU. India, therefore, requested that the matter be referred to a panel pursuant to Article 21.5
of the DSU. 12 On 22 May 2002, in accordance with Article 21.5 of the DSU, the DSB referred the
matter to the original panel. A member of the original panel was unable to participate in the
proceedings and the parties therefore agreed on a new panelist on 25 June 2002. 13 The Panel Report
was circulated to the Members of the World Trade Organization (the "WTO") on 29 November 2002.
5. Before making findings on India's claims, the Panel made the following rulings on four
preliminary matters raised by the European Communities. The Panel:
(i) ruled that EC Regulations 160/2002 and 696/2002 are not "measures taken to
comply" with the recommendation of the DSB, within the meaning of Article 21.5 of
the DSU.
 14 Thus, the Panel limited its examination to EC Regulation 1644/2001;
(ii) declined to assess whether the measures "taken to comply" were adopted within the
"reasonable period of time" agreed by the parties under Article 21.3 of the DSU 15;
(iii) found that India's "claim 6" was not properly before the Panel, to the extent that it
concerned the consistency of the European Communities' measure with the obligation
under Article 3.5 of the Anti-Dumping Agreement to ensure that injuries caused by
"other factors" not be attributed to the dumped imports, because it was disposed of by
the original panel and not appealed.
 16 The Panel, however, rejected the European
Communities' request to exclude India's "claim 5" because the Panel found that India
could not have presented that claim in the original dispute 17; and
(iv) rejected the European Communities' request that the Panel exclude India's claims
relating to Article 4.1(i) of the Anti-Dumping Agreement and Article 21.3 of the
DSU, given that India itself denied making such claims. 18

12WT/DS141/13/Rev.1, 8 May 2002.
13WT/DS141/14, 2 July 2002; WT/DS141/14/Corr.1, 10 July 2002.
14Panel Report, para. 6.22.
15Ibid., para. 6.27.
16Ibid., para. 6.53.
17Ibid., para. 6.57. India's "claim 5" related to the assessment of whether the European Communities'
reconsideration of injury was consistent with Article 3.4.
18Panel Report., para. 6.68.

6. The Panel then examined India's claims and found that:
(i) India had failed to demonstrate that the European Communities' calculation of a
weighted average for administrative, selling, and general costs on the basis of sales
value violates Article 2.2.2(ii) of the Anti-Dumping Agreement
 19;
(ii) even assuming EC Regulations 160/2002 and 696/2002 properly formed part of the
Panel's evaluation, the European Communities had not violated paragraphs 1 and 3 of
Article 3 or Article 5.7 of the Anti-Dumping Agreement in conducting a cumulative
assessment of the effects of dumped imports from India and Pakistan (and Egypt), in
subsequently re-examining whether imports from Pakistan were being dumped, and
subsequently in reassessing the effects of the dumped imports from India alone
 20;
(iii) the European Communities had not acted inconsistently with paragraphs 1 and 2 of
Article 3 of the Anti-Dumping Agreement in considering "dumped imports" 21;
(iv) the analysis and conclusions of the European Communities with respect to injury
are not inconsistent with paragraphs 1 and 4 of Article 3 of the Anti-Dumping
Agreement 22;
(v) the European Communities' finding of a causal link between the dumped imports and
the injury is not inconsistent with Article 3.5 of the Anti-Dumping Agreement 23;
(vi) the European Communities had not acted inconsistently with Article 15 of the
Anti-Dumping Agreement by failing to explore possibilities of constructive remedies
before applying anti-dumping duties 24; and
(vii) the European Communities had not violated Article 21.2 of the DSU. 25
7. Having excluded, as a preliminary matter, India's claim that the European Communities had
failed to ensure that injuries caused by "other factors" was not attributed to the dumped imports
pursuant to Article 3.5 of the Anti-Dumping Agreement, the Panel nevertheless made an alternative

19Panel Report, para. 6.94.
20Ibid., para. 6.116.
21Ibid., para. 6.144.
22Ibid., para. 6.217.
23Ibid., para. 6.233.
24Ibid., para. 6.260.
25Ibid., para. 6.271.

finding on this issue and determined that the European Communities had not acted inconsistently with
Article 3.5 in this regard. 26
8. For these reasons, the Panel concluded that EC Regulation 1644/2001 is not inconsistent with
the Anti-Dumping Agreement or the DSU. 27 Therefore, the Panel found that the European
Communities had implemented the recommendation of the DSB to bring its measure into conformity
with its obligations under the Anti-Dumping Agreement. 28 In the light of these conclusions, the Panel
did not make any recommendations under Article 19.1 of the DSU. 29
9. On 8 January 2003, India notified the DSB of its intention to appeal certain issues of law
covered in the Panel Report and legal interpretations developed by the Panel, pursuant to paragraph 4
of Article 16 of the DSU, and filed a Notice of Appeal pursuant to Rule 20 of the Working
Procedures for Appellate Review (the "Working Procedures").
 30 On 20 January 2003, India filed an
appellant's submission. 31 On 3 February 2003, the European Communities filed an appellee's
submission. 32 On the same day, Japan and the United States each filed a third participant's
submission. 33 Korea notified its intention to appear at the oral hearing as a third participant. 34
10. The oral hearing in this appeal was held on 20 February 2003. The participants and third
participants presented oral arguments and responded to questions put to them by the Members of the
Division hearing the appeal.
11. We recall that the Panel found, as a preliminary matter, that only EC Regulation 1644/2001
was a measure "taken to comply" within the meaning of Article 21.5 of the DSU, and thus the Panel
excluded EC Regulations 160/2002 and 696/2002 from the scope of its examination.
 35 India has not
appealed this finding. During the oral hearing, India and the European Communities agreed,
moreover, that the measure at issue in this appeal is EC Regulation 1644/2001. 36 Therefore, we will
confine our analysis in this appeal to EC Regulation 1644/2001.

26Panel Report, para. 6.246.
27Ibid., para. 7.1.
28Ibid., para. 7.2.
29Ibid., para. 7.3.
30WT/DS141/16, 9 January 2003.
31Pursuant to Rule 21(1) of the Working Procedures.
32Pursuant to Rule 22(1) of the Working Procedures.
33Pursuant to Rule 24(1) of the Working Procedures.
34Pursuant to Rule 24(2) of the Working Procedures.
35Panel Report, para. 6.22.
36India's and the European Communities' responses to questioning at the oral hearing.

II. Arguments of the Participants and the Third Participants
A. Claims of Error by India – Appellant
1. Article 21.5 of the DSU
12. India asserts that the Panel erred in finding, as a preliminary matter, that India's claim,
concerning the consistency of EC Regulation 1644/2001 with the obligation under Article 3.5 of the
Anti-Dumping Agreement to ensure that injuries caused by "other factors" are not attributed to the
dumped imports, was not properly before the Panel. India notes that the European Communities
based its request for a preliminary ruling on two ar guments: (i) that India should not be allowed to
raise claims before the Article 21.5 Panel that it could have raised before the original panel; and
(ii) that India was acting in bad faith. India submits that, although the Panel found that India's claim
was raised during the original proceedings, and also that India was pursuing the matter in good
faith, the Panel nevertheless granted the European Communities' request for a preliminary ruling.
13. According to India, instead of focusing on the facts of the case, the Panel based some of its
conclusions on overarching considerations of the appropriate functioning of Article 21.5 panels and
the dispute settlement system as a whole. For example, the Panel determined that defending Members
in Article 21.5 proceedings would always be prejudiced by a finding in Article 21.5 proceedings of
a violation made on the basis of a claim that could have been pursued in the original proceedings,
but was not, because the defending member woul d not have a reasonable period of time for
implementation. India submits that it had argued before the Panel that the European Communities
would not, in this particular case, suffer any prejudice from lack of a reasonable period for
implementation, since India's claim under Article 3.5 is not the only claim in these proceedings.
However, according to India, the Panel "declined to address [India's] argument".
 37
14. India contends that the Panel failed to take into account the Appellate Body Report in
US – FSC (Article 21.5 – EC) , where the European Communities raised a claim in the
Article 21.5 proceedings that it had not raised in the original proceedings. The Article 21.5 panel
and the Appellate Body, nevertheless, made findings with respect to that claim. In India's view,
EC Regulation 1644/2001, like the measure before the Appellate Body in US – FSC (Article 21.5 –
EC), is a new and different measure from the measure subject to the original dispute.
 38

38India's response to questioning at the oral hearing.

15. India argues that the Panel erred in considering the situation in US – Shrimp (Article 21.5 –
Malaysia) to be analogous to the situation in th e present case. India asserts that in US – Shrimp
(Article 21.5 – Malaysia), the complainant sought to challenge exactly the same measure that had been
found to be WTO-consistent in the original pro ceedings, whereas in the present case, the measure
challenged by India is a new measure that is separate and distinct from the original measure.
According to India, in US – Shrimp (Article 21.5 – Malaysia), the "measure" consisted of several sub-
measures, and the Appellate Body had found, in the or iginal dispute, that one of these sub-measures,
Section 609, was consistent with the General Agreement on Tariffs and Trade 1994 (the "GATT
1994"). 39 Therefore, in those Article 21.5 proceedings , the Appellate Body declined to re-examine
Section 609 because it had already found that it was consistent with the GATT 1994. In India's view,
the issue in this appeal is different from that in US – Shrimp (Article 21.5 – Malaysia) because the
"measure" cannot be divided into sub-measures. A ccording to India, all the aspects of the original
measure have been changed—there has been a redetermination of dumping and injury, as well as a
re-examination of causation. India notes that th e fact that the European Communities analyzed
causation anew, makes that analysis part of the ne w implementation measure. In India's view, the
European Communities should have similarly re-ensured that the injury caused by other factors was not
attributed to the dumped imports.
 40
16. India also submits that the Panel should ha ve followed the Appellate Body's conclusion in
Canada – Aircraft (Article 21.5 – Brazil) , that Article 21.5 panels are not confined to examining the
"measures taken to comply" from the perspective of the claims, arguments, and factual circumstances
related to the measure that was the subject of the original proceedings.
 41
2. Paragraphs 1 and 2 of Article 3 of the Anti-Dumping Agreement
17. India appeals the Panel's finding that the European Communities did not act inconsistently
with paragraphs 1 and 2 of Article 3 of the Anti-Dumping Agreement when determining the volume
of "dumped imports" for purposes of making a determination of injury. According to India, the
European Communities mistakenly concluded that 86 percent of the total volume of imports of bed
linen from India were dumped. India argues that the proportion of imports attributable to sampled
producers found to be dumping (47 percent) constitutes the only positive evidence that could have
been used to objectively examine and determine the volume of total imports from India that are
dumped. India contends that if the basis for determining dumped imports is the calculation of
dumping margins for sampled producers, and that calculation reveals no dumping for producers

39India's response to questioning at the oral hearing.
40Ibid.
41Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil), para. 41.

representing 53 percent of the imports attributable to sampled producers, one cannot objectively reach
the conclusion that 86 percent of the total volume of imports are positively dumped.
18. Second, India argues that the Panel erred in finding that Article 3 does not provide any
guidance on how to determine the volume of dumped imports for purposes of making a
determination of injury. In India's view, Article 3.1 provides that an injury determination, including a
determination of the volume of dumped imports, shall be based on positive evidence and involve an
objective examination . Thus, according to India, Article 3.1 casts an overarching obligation on
domestic authorities to make an objective examination of the volume of dumped imports based on
positive evidence. India refers to the Appellate Body Report in Thailand – H-Beams as supporting
this interpretation.
 42
19. India asserts that the Panel mistakenly found that the European Communities had resorted to
the second option provided for in the second sentence of Article 6.10 of the Anti-Dumping
Agreement, namely that the European Communities individually examined producers accounting for
the largest percentage of the volume of exports which could reasonably be investigated. This finding,
according to India, is at odds with the conclusion reached by the original panel in this dispute, which
correctly established that the European Communities had conducted its analysis of dumping based on
a statistically valid sample of Indian producers and exporters within the meaning of the first option
found in the second sentence of Article 6.10. Thus, India asserts that the Panel ignored its own factual
determinations in the original proceedings. India notes that the evidence it presented to the Panel
demonstrated that the European Communities sought to select a statistically valid sample. For
example, India points to the Notice of initiation of the investigation which provides for the use of
sampling techniques in this investigation. India refers also to an exchange of letters between the
association of Indian exporters and the European Commission which, in India's view, demonstrates
that the investigating authorities sought to select a sample representing Indian producers and
exporters.
 43 India concludes that the failure of the European Communities to objectively examine the
positive evidence resulting from the sample of investigated Indian producers or exporters runs directly
counter to the overarching obligation under Article 3.1 to base the determination of the volume of
dumped imports on positive evidence and an objective examination.

42Appellate Body Report, Thailand – H-Beams, para. 106.
43India's appellant submission, paras. 56 and 59.

20. Third, India argues that the Panel confused two distinct stages of the investigation—the stage
of determining dumping and the stage of duty collection. India notes that, instead of seeking guidance
in the text of Article 3, the Panel looked to Article 9.4 of the Anti-Dumping Agreement , which
concerns duty collection. India contends that it cannot be inferred that the Anti-Dumping Agreement
provides that all imports from producers or exporters that have not been individually examined may
be considered dumped for purposes of analyzing injury, from the fact that Article 9.4 permits the
collection of anti-dumping duties from non-examined producers after having completed a
determination of dumping, injury, and causality. In other words, India asserts that the Panel was
wrong in concluding, on the basis of the premise that a duty may be collected from non-examined
producers, that all non-examined producers have dum ped and caused injury. According to India, the
Panel's reasoning disregards the fact that the dumping and injury findings logically precede the
collection of duties. In addition, India contends that Article 9.4 expressly restricts the scope of its
application to the imposition of anti-dumping duties.
 Therefore, according to India, it would be
contrary to previous Appellate Body rulings regarding effective treaty interpretation to read into
Articles 2, 3, and 6 of the Anti-Dumping Agreement the method set forth in Article 9.4 for the
calculation of anti-dumping duties. Moreover, India argues that extending the application of the
method set forth in Article 9.4 to other provisions of the Anti-Dumping Agreement would upset the
delicate balance of rights and obligations agreed to by the Uruguay Round negotiators. Accordingly,
India asserts that this finding of the Panel is contrary not only to the Anti-Dumping Agreement, but
also to Articles 3.2 and 19.2 of the DSU, which provide that findings and recommendations cannot
add to or diminish the rights and obligations provided in the covered agreements.
21. Fourth, India argues that the Panel erred in concluding that India's proposed interpretation
would lead to bizarre and unacceptable results for which there are no remedial mechanisms. The
Panel determined that these results would be a consequence of the fact that only 47 percent of the total
imports from India would be considered dumped for purposes of making a determination of injury,
whereas pursuant to Article 9.4, anti-dumping duties would be applied to all imports from exporters
or producers not individually examined. India notes that the Panel recognized the possibility of
refunds and reviews as mechanisms for remedying the situation where a duty would be collected on
imports from an unexamined producer that might not have been dumped. In India's view, the
reference to Article 11.2 (review possibilities) and to Article 9.3 (refund possibilities) supports India's
interpretation rather than that of the Panel.
22. Finally, India asserts that, if the sample of European Communities producers was accepted in
this investigation to fully represent the European Communities producers, the sample of exporting
producers likewise should have been considered to fully represent the Indian exporters.

3. Article 17.6 of the Anti-Dumping Agreement and Article 11 of the DSU
23. India submits that the Panel did not properly discharge its duties under Article 17.6 of the
Anti-Dumping Agreement and Article 11 of the DSU in concluding that the European Communities
did have information before it on all relevant economic factors listed in Article 3.4 of the
Anti-Dumping Agreement when making its injury determination.
24. India contends that the Panel misapplied the rules on the allocation of the burden of proof
and, therefore, acted inconsistently with Article 11 of the DSU. India asserts that it had made a
prima facie case before the Panel, showing that information on a number of economic factors had
never been collected by the European Communities' in vestigating authorities. India argues that, as a
consequence, the Panel should have required the European Communities to present evidence to rebut
India's prima facie case. India submits that, by not shifting the burden of proof to the European
Communities, the Panel failed to make an objective assessment of the facts as required by Article 11
of the DSU.
25. India asserts, furthermore, that if the Appellate Body were to conclude that the Panel correctly
applied the rules on the allocation of the burden of proof, the Appellate Body should then find that the
Panel distorted the evidence by accepting, as constituting evidence of a fact, a mere assertion by the
European Communities that data was collected. Accordingly, India maintains that the Panel acted
inconsistently with Article 11 of the DSU, which requires panels to make an objective assessment of
the matter, including an objective assessment of the facts of the case.
26. Referring to the Appellate Body Report in US – Hot-Rolled Steel , India argues that
Article 17.6(i) of the Anti-Dumping Agreement requires panels to actively review or examine the
facts.
 44 India submits that despite the existence of this obligation, the Panel did not actively review
the assertions of the European Communities that it had collected data on all relevant economic factors
listed in Article 3.4, nor did the Panel use its investigative power under Article 13 of the DSU to
inquire about the missing information on stocks and capacity utilization. In India's view, the fact-
specific nature of this dispute required the Panel to use its right to seek information under Article 13
of the DSU in order to discharge its obligation, under Article 17.6(i), to actively review or examine
the facts. India argues, furthermore, that Article 17.6(i) requires the Panel to do more than to merely
state that it was clear to it that the European Communities had the data in its record. In India's view,
by failing to actively review the facts, the Panel acted contrary to the obligation contained in
Article 17.6(i) of the Anti-Dumping Agreement.

44Appellate Body Report, US – Hot-Rolled Steel, para. 55.

4. Article 3.5 of the Anti-Dumping Agreement
27. India submits that, if the Appellate Body were to conclude that the Panel erred in dismissing,
as not being properly before it, India's claim challenging EC Regulation 1644/2001 as inconsistent
with the obligation in Article 3.5 of the Anti-Dumping Agreement to ensure that injuries caused by
"other factors" are not attributed to the dumped imports, then the Appellate Body should examine the
Panel's finding, in the alternative, that the Euro pean Communities did not act inconsistently with that
provision. First, India challenges the Panel's finding that India could not rely upon recital (50) of
EC Regulation 1644/2001 as evidence of the fact that the European Communities was aware of other
factors simultaneously causing injury to the European Communities industry. In India's view, the
Panel was wrong to dismiss India's argument on the grounds that recital (50) of the redetermination is
included in the section entitled "Conclusion on injury", and not in the section on "Causation". India
contends that a factual finding does not cease to be a factual finding solely because it is contained in
the preamble, conclusion, or other section of the same document.
28. Second, India contends that the conclusions of the Panel are based on a misrepresentation of
the facts and an incorrect causation analysis. India argues that the Panel reviewed the findings of the
European Communities on the basis of ex post justifications, instead of analyzing whether the
European Communities (i) had properly examined the possible injurious effects of inflation and of the
increase in the cost of raw cotton and (ii) had separated and distinguished the injury caused by those
factors. Thus, India argues that the Panel erred in its analysis by relying upon explanations which are
not discernible from EC Regulation 1644/2001 and the record of the investigation.
29. In addition, India argues that the Panel's misrepresentation of the facts of the case is a
consequence of two other errors. First, India asserts that the Panel erred in reading into Article 3.5 an
arbitrary distinction between "independent" and "dependent" factors causing injury, and in mistakenly
assigning the authorship of this distinction to India. India submits that it never made such a
distinction. In India's view, the effect of the Panel's distinction between independent and dependent
causes of injury is to render redundant the requirement to demonstrate a causal relationship between the
dumped imports and the injury to the domestic industry. India explains that, if the Panel's theory were
followed, investigating authorities would be able to argue (i) that the injurious effects of every other
known factor could have been remedied through an increase in price and (ii) that this increase was not
possible due to price suppression. As a result, India argues, the injury in its entirety would automatically
be attributed to the dumped imports. According to India, this approach cannot be considered to be
consistent with the aim of Article 3.5, which is to establish that injury to the domestic industry is indeed
caused by the dumped imports.

30. Second, in India's view, the Panel also erred by disregarding the guidance provided by the
Appellate Body in US – Hot-Rolled Steel on the interpretation of Article 3.5. 45 India submits that,
in US – Hot-Rolled Steel, the Appellate Body made it clear that if an investigating authority has
come to the conclusion that a known factor, other th an the dumped imports, is causing injury to the
domestic industry, that authority must ensure that the injurious effects of this other factor are not
attributed to the dumped imports. India argues that, although the European Communities "tried" in
recital (103) of Commission Regulation (EC) No 1069/97
 46 to follow the Appellate Body's guidance,
it failed to do so. 47
31. India argues, finally, that the Panel misunderstood India's argument with respect to inflation
and again based its conclusions on a misrepresentation of facts. India disagrees with the Panel's
finding that the European Communities did not identify the inability of bed linen prices to keep pace
with inflation in prices of consumer goods as a cause of injury. India contends that, in recital (50) of
EC Regulation 1644/2001, the European Communities does identify inflation in consumer prices as a
cause of injury. India submits that, in spite of this, the European Communities failed to mention, let
alone examine and distinguish, in its causation analysis the injurious effects of the inability of
European Communities producers to keep pace with inflation. India notes that, although the Panel
interpreted the inability of bed linen prices to increase commensurate with inflation as an indicator
(instead of a cause) of injury, in India's view, the inability of bed linen prices to keep pace with
inflation is a factor partly responsible for declining profitability of the European Communities
industry.
B. Arguments of the European Communities – Appellee
1. Article 21.5 of the DSU
32. The European Communities submits that the Panel correctly dismissed India's claim that the
European Communities violated Article 3.5 of the Anti-Dumping Agreement by failing to ensure that
injuries caused by "other factors" not be attributed to the dumped imports, because that claim was not
properly before the Panel. According to the Eur opean Communities, the determination on the "other
factors" is an element of the original measure that was not modified and thus cannot be regarded as
part of the implementation measure. Consequently, that determination cannot be challenged before an
Article 21.5 panel.

45Appellate Body Report, US – Hot-Rolled Steel, paras. 221-223.
46Commission Regulation (EC) No 1069/97, 12 June 1997, imposing a provisional anti-dumping duty
on imports of cotton-type bed linen originating in Egypt, India and Pakistan, published in the Official Journal of
the European Communities, 13 June 1997, L-series, No. 156 ("EC Regulation 1069/97").

33. The European Communities contends that Article 21.5 of the DSU is not intended to provide
a "second service" to complainants which, by negligence or calculation, have omitted to raise or argue
certain claims during the original proceedings.
 48 In the European Communities' view, India's reading
of Article 21.5 would diminish the procedural righ ts of defending parties, altering the balance of
rights and obligations of Members that the DSU purports to maintain.
34. According to the European Communities, in US – FSC 49, Mexico – Corn Syrup (Article 21.5
– US) 50, and US – Offset Act (Byrd Amendment ) 51, the Appellate Body emphasized that procedural
actions under the DSU must be taken in a timely fashion. The European Communities submits that, in
a similar way, the right to make a claim must be exercised promptly. Consequently, Article 21.5 must
be interpreted as excluding the possibility of raising a claim for the first time before an Article 21.5
panel when such claim could have been pursued before the original panel.
35. Furthermore, the European Communities contends that the decision of the original panel
rejecting India's claim "has res judicata effects" between the parties.
 52 Therefore, in the view of the
European Communities, India is precluded from reasserting the same claim before another panel. The
European Communities asserts, in this regard, that the applicability of the principle of res judicata to
disputes under the DSU was confirmed in US – Shrimp (Article 21.5 – Malaysia) , where the
Appellate Body noted that Appellate Body Reports that are adopted by the DSB must be treated by
the parties to a particular dispute as a final resolution to that dispute. 53 The same principle applies,
according to the European Communities, to adopted panel reports.
36. The European Communities argues that India's allegation that the European Communities did
not suffer prejudice is irrelevant and wrong. According to the European Communities, the defendant
is not required to demonstrate prejudice. In addition, the European Communities submits that
prejudice to the defending party arises whenever a claim that could have been pursued in the original
proceedings is brought before an Article 21.5 panel, because, as a result, the defending party will be
deprived of the possibility of correcting the alleged violation within a reasonable period of time, if
indeed a violation is found.
37. The European Communities argues that whether or not India acted in good faith is also
irrelevant for the interpretation of Article 21.5 of the DSU. The European Communities contends

50Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US), para. 50.
51Appellate Body Report, US – Offset Act (Byrd Amendment), para. 314.
53Appellate body Report, US – Shrimp (Article 21.5 – Malaysia), para. 97.

that, as explained by the Panel, a decision on this issue does not turn on the facts of any particular
dispute. In the European Communities' view, even though India might not, in this specific case, have
acted in bad faith, India's proposed interpretation of Article 21.5 would allow the kind of litigation
techniques that are incompatible with the good faith requirement set out in Article 3.10 of the DSU.
38. According to the European Communities, the Panel's ruling is consistent with earlier
decisions of the Appellate Body. The European Communities submits that, contrary to India's
arguments, the facts of the present dispute are different from those in Canada – Aircraft
(Article 21.5 – Brazil), where Brazil raised claims against a new and different measure.
 54 In the present
case, in contrast, India's claim relates to an elemen t that is not part of the new measure, because the
findings on the "other factors" included in the or iginal determination were not affected by the
redetermination. Furthermore, the European Comm unities asserts that the present case differs from
US – FSC (Article 21.5 – EC) because, in the latter case, the United States did not object to the
claim raised by the European Communities under Article III:4 of the GATT 1994. 55 In that case,
moreover, the claim brought by the European Communities under Article III:4 against the measure
"taken to comply" was different from the claims that the European Communities could have brought
under the same provision before the original panel, because the United States had repealed the
measure at issue in the original dispute and replaced it with an entirely new measure. The European
Communities argues that, in the current appeal, India is challenging findings that were not modified in
the implementation measure and, therefore, cannot be considered as part of the measure "taken to
comply".
2. Paragraphs 1 and 2 of Article 3 of the Anti-Dumping Agreement
39. The European Communities asserts that the Pane l did not err in finding that the European
Communities did not act inconsistently with paragraphs 1 and 2 of Article 3 of the Anti-Dumping
Agreement when determining the volume of "dumped imports" for purposes of making a
determination of injury.
40. The European Communities first notes that the Panel's observation that the European
Communities' investigating authorities did not use a "statistically valid sample ", within the meaning
of the first option in the second sentence of Article 6.10 of the Anti-Dumping Agreement, is a factual
finding beyond the scope of appellate review. The European Communities submits that the group of
exporters selected for purposes of the dumping examination represents the largest percentage of the
volume of exports which could reasonably be investigated, within the meaning of the second option in

54Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil), paras. 8-14.
55Appellate Body Report, US – FSC (Article 21.5 – EC), paras. 40-44.

the second sentence of Article 6.10. Therefore, the Panel's factual observation that the European
Communities did not resort to a "statistically valid sample " is correct. According to the European
Communities, the selection of companies of different types was aimed at improving the
representativeness of the selection, but it cannot be considered sufficient to produce a "statistically
valid sample".
41. In addition, the European Communities explains that the fact that its investigating authorities,
on a few occasions, referred to the group of examined exporters as a "sample", does not mean that the
dumping examination was based on a "statistically valid sample" within the meaning of Article 6.10.
The European Communities notes that if all "samples" were by definition "statistically valid", it
would have been superfluous to add that precisi on into Article 6.10. According to the European
Communities, the investigating authorities used the term "sample" because, in European Communities
law and practice, the terms "sampling" and "sample" are used to designate indistinctly either of the
two options envisaged in Article 6.10 of the Anti-Dumping Agreement . Similarly, the references
made by the original panel and the Article 21.5 Panel to a "sample" merely reflect the European
Communities' use of that term.
42. The European Communities states that, in any event, the Panel did not attach any legal
consequences to the finding that the European Communities did not use a statistically valid sample.
The Panel's conclusion that the European Communities did not act inconsistently with paragraphs 1
and 2 of Article 3 would be equally valid were the Appellate Body not to agree with this finding of
fact. The European Communities contends that, even if the examined exporters selected by the
investigating authorities constituted a "statistically valid sample", there would still be no basis to
assume that the proportion of imports found to be dumped within the sample is positive evidence of
the proportion of imports outside the sample which would have been found to be dumped had all the
exporters been examined individually.
43. The European Communities asserts that "dumped imports" are those imports for which a
positive determination of dumping, whether individual or collective, has been made. The European
Communities contends that, following this reasoning, its investigating authorities determined that all
the imports from the unexamined exporters (cooperating and non-cooperating) were dumped. As
India has not challenged the dumping determination in these proceedings, it is illogical and
contradictory for India now to claim that some of those imports should be considered not dumped for
purposes of making a determination of injury. According to the European Communities, the
obligation to determine dumped imports objectively and on the basis of positive evidence is satisfied
where the imports have been found to be dumped in accordance with the relevant provisions of the
Anti-Dumping Agreement governing the determination of dumping.

44. The European Communities agrees with the Panel's conclusion that Article 3 of the
Anti-Dumping Agreement contains no guidance with respect to the determination of the volume of
dumped imports. In the European Communities' view, the general requirement to make an objective
examination of injury based on "positive evidence", set forth in Article 3.1, cannot be read as
imposing a new obligation with respect to the determination of dumping where none is provided in
the relevant provisions of the Anti-Dumping Agreement.
45. In addition, the European Communities argues that India's proposed interpretation would lead
to an absurd result—where the same imports could be simultaneously considered dumped and not
dumped under different provisions of the Anti-Dumping Agreement —because Article 9.4 would
allow the application of duties to imports which have been previously found not to be dumped for
purposes of injury determinations under Article 3.
46. The European Communities contends, furtherm ore, that India's proposed interpretation
assumes that no dumping margin needs to be assi gned to unexamined exporters. However, in the
European Communities' view, if the dumping margin of the unexamined exporters is not calculated, it
is impossible to establish whether the country-wide dumping margin is above de minimis, as required
by Article 5.8.
47. The European Communities states that, although the Anti-Dumping Agreement does not
prescribe any specific rules for calculating the dumpi ng margin of the unexamined exporters, it is
implicit in Article 6.10 that, where the investigating authorities limit the investigation of dumping to
some exporters, they may use the data collected for those examined exporters in order to calculate the
dumping margin of the unexamined exporters. In addition, the European Communities refers to
Article 9.3, which expressly states that there is a logical link between the level of the dumping margin
and that of the dumping duty. Therefore, it contends that if Article 9.4 allows the investigating
authorities to apply anti-dumping duties to all imports from the unexamined exporters, it is because
all such imports can be considered dumped, including for purposes of paragraphs 1 and 2 of
Article 3. In the light of this, the European Communities asserts that its investigating authorities were
entitled to regard all imports from the unexamined exporters as dumped.
48. Finally, the European Communities argues that its investigating authorities were entitled to
treat as "dumped" all imports from non-cooperating exporters, upon calculating the corresponding
dumping margin for the non-cooperating exporters in accordance with the methodology set out in
Article 6.8 and Annex II to the Anti-Dumping Agreement. In addition, the European Communities
contends that, even if India's interpretation were correct, the proportion of dumped imports from the
examined exporters within the sample could not be considered as representative of the proportion of

dumped imports from the non-cooperating exporters, because the non-cooperating exporters were not
included in the pool of exporters from which the sample was selected.
3. Article 17.6 of the Anti-Dumping Agreement and Article 11 of the DSU
49. The European Communities argues that the Pane l did not err in finding that the European
Communities had information before it on all relevant economic factors listed in Article 3.4 of the
Anti-Dumping Agreement, including stocks and capacity utilization, and thus acted consistently with
Article 3.4. According to the European Communities, the Panel correctly applied the rules regarding
the allocation of the burden of proof, did not distort the evidence before it, nor did it fail to actively
review the facts.
50. The European Communities submits that because India did not properly establish a prima
facie case that no data was collected by the European Communities' investigating authorities, the
Panel did not fail to apply the rules on the allocation of the burden of proof. Alternatively, the
European Communities argues that, even if India had established a prima facie case, this prima
facie case had been refuted by the European Communities. Furthermore, the European Communities
emphasizes that the weighing of evidence is within the discretion of the Panel as the trier of facts.
Consequently, the European Communities argues that the Panel was entitled to conclude that the
European Communities had the relevant information in its possession, and acted consistently with
Article 11 of the DSU.
51. In the European Communities' view, the Panel did not distort the evidence. The European
Communities argues that the information contained in EC Regulation 1644/2001 is not "a mere
assertion" as claimed by India. Rather, the regulation explains the basis of the European
Communities' conclusion that stocks and capacity utilization did not have a bearing on the state of the
domestic industry. The European Communities refers to the statement in the Appellate Body Report
in EC – Hormones to the effect that a claim of distortion implies that a panel committed an egregious
error that calls into question its good faith.
 56 The European Communities then underscores that India
has explicitly admitted that it is not alleging that the Panel in this case committed an egregious error
or acted in bad faith.
52. The European Communities submits that the Pane l did not fail to actively review the facts
as required by Article 17.6(i) of the Anti-Dumping Agreement . According to the European
Communities, India failed to demonstrate that the Panel's assessment of the evidence is inconsistent
with Article 11 of the DSU; therefore, its identical claim under Article 17.6(i) is equally unfounded.

In addition, the European Communities argues that the Panel's decision not to use its power of
investigation under Article 13.2 of the DSU does not constitute a violation of Article 17.6(i), because
a panel's right to seek information under Article 13.2 is discretionary. In the European Communities'
view, the Appellate Body's ruling in EC – Sardines supports the conclusion that the Panel's decision
not to seek information does not imply that the Panel failed to make an objective assessment of the
facts.
 57
4. Article 3.5 of the Anti-Dumping Agreement
53. The European Communities argues that the Pane l did not err in finding that the European
Communities did not act inconsistently with Article 3.5 of the Anti-Dumping Agreement by failing to
ensure that injuries caused by "others factors" were not attributed to the dumped imports. In the
European Communities' view, the Panel's finding that the increase in the cost of raw cotton and
inflation were not causes of injury is a factual finding and thus beyond the scope of appellate review.
54. The European Communities submits that India's arguments misrepresent the findings of the
investigating authorities. According to the Eu ropean Communities, the passages of EC Regulation
1644/2001 referred to by India demonstrate that the investigating authorities did not consider the
increase in the cost of raw cotton as a separate cause of injury.
55. The European Communities notes that "price suppression" is one of the possible "effects" of
dumping set forth in Article 3.2 of the Anti-Dumping Agreement. Accordingly, price suppression
cannot be, at the same time, one of the "other causes" of injury to be examined under Article 3.5. The
European Communities asserts that the increase in the cost of raw cotton is not the cause of price
suppression, but rather the fact that renders necessary the price increase. According to the European
Communities, this is in accordance with Article 3.2, which provides that the "cause" of the "price
suppression" is the fact that "prevents" the price increase, and not the fact that renders necessary such
price increase. The European Communities contends, moreover, that India has not argued that any
other factor that was not examined by the investigating authorities prevented the European
Communities producers from increasing their prices to reflect the increase in the cost of raw cotton.
56. Furthermore, the European Communities argues that the injurious effects of the increase in
the cost of raw cotton cannot be separated and distinguished from the effects of the dumped imports.
In the European Communities' view, the existence of "price suppression" presupposes the existence of
two elements: (i) a factor that renders a price increase necessary; and (ii) a factor that "prevents"
such price increase. If either of these elements is absent, there can be no "price suppression" within

the meaning of Article 3.2 and, consequently, no injury. The European Communities contends that
the injurious effects of the two constituent elements of price suppression cannot, therefore, be
"separated and distinguished".
57. The European Communities argues that, contrary to India's allegation, the Panel's reasoning
does not render redundant Article 3.5, because a price increase cannot be said to remedy the injury
caused by the factors listed in that Article. As an example, the European Communities explains that a
price increase would not remedy the injurious effects of a contraction of demand, but rather would
aggravate them.
58. The European Communities submits that its investigating authorities did not find, as alleged
by India, that the failure of bed linen prices to keep pace with inflation in the prices of consumer
goods was a cause of injury. According to the European Communities, EC Regulation 1644/2001
mentioned the failure of bed linen prices to keep pace with inflation as a further indication of the
existence of price suppression. In any event, the European Communities contends that the failure of
bed linen prices to keep pace with inflation cannot be a cause of injury in the form of declining and
inadequate profitability. The European Communities notes that the profitability of bed linen is a
function of its cost of production and of its sales price. The inflation rate for other consumer goods
does not affect either of these two variables. Therefore, the European Communities argues, the
inflation rate cannot be the cause of the injury suffered by the European Communities industry.
Rather, it is an indication or symptom of injury, as indicated by the Panel.
C. Arguments of the Third Participants
1. Japan
59. Japan submits arguments relating only to the determination of the volume of dumped imports
for purposes of making a determination of injury under Article 3 of the Anti-Dumping Agreement.
Japan submits that an analysis of the text, the context, and the object and purpose of Article 9.4 of the
Anti-Dumping Agreement demonstrates that Article 9.4 does not apply to the determination of
dumping, injury, and causation under Articles 2 and 3 of the Anti-Dumping Agreement . Japan
contends that Article 9.4 provides rules applicable only to the stage where duties are collected, which
follows the investigating authorities' affirmative determination of dumping, injury, and causation.
60. Japan argues that the use of the term "duty" or "duties" in Article 9.4 confirms the
understanding that Article 9.4 applies only to the stage of imposition of anti-dumping duties. In
addition, Japan contends that the use of the present perfect tense in Article 9.4 indicates that
Article 9.4 becomes relevant only after the investigation phase has been completed and the

investigating authorities have found dumping, injury, and causation. In Japan's view, the title of
Article 9, as well as the principles set forth in Article 9.1, clarify that Article 9 sets forth rules
concerning imposition and collection of duties, and that it does not affect the determinations of
dumping, injury, and causation.
61. Japan also contends that Article 9.4 contains a very narrowly-focused set of rules that apply
only in exceptional cases where an examination of all responding parties is "impracticable," as set
forth in the second sentence of Article 6.10.
62. Japan finds support in the Appellate Body Report in US – Hot-Rolled Steel for its argument
that the European Communities' position would dilute the requirement established in Article 3.1 that a
determination of injury be based on "positive evidence" and an "objective examination."
 58 Japan
submits that the European Communities' methodology is inconsistent with the requirement that the
evidence "must be of an affirmative, objective and verifiable character, and that it must be credible." 59
In addition, Japan alleges that by using the data of the sampled producers in a biased and unfair
manner, the European Communities failed to comply with the requirement that a determination of
injury must involve an objective examination—that is, that the " 'examination' process must conform
to the dictates of the basic principles of good faith and fundamental fairness." 60
63. Japan contends, moreover, that its interpretation is supported by Article 17.6(i) of the
Anti-Dumping Agreement . Japan argues that although Article 17.6(i) is directed to panels, the
obligation of an unbiased and objective evaluation of facts applies equally to the investigating
authorities, because panels review the investigating authorities' evaluation of facts in accordance with
that standard.
2. United States
64. The United States agrees with the finding of the Panel that when a party's argument is rejected
in a report adopted by the DSB, that party cannot raise new arguments on the same claim in a
proceeding under Article 21.5 of the DSU. The United States disagrees with India's view that the
mere inclusion of a finding in the legislative or administrative vehicle that implements a DSB
recommendation makes it a measure taken to comply subject to Article 21.5 review. The text of that
provision premises a panel's jurisdiction over a claim under Article 21.5 on whether that claim
challenges measures that were taken to comply with DSB recommendations and rulings.

58Appellate Body Report, US – Hot-Rolled Steel, paras. 192-193.
59Ibid., para. 192.
60Ibid., para. 193.

65. The United States submits that the Panel corr ectly concluded that investigating authorities
may treat all imports from producers or exporters for which an affirmative dumping determination has
been made as "dumped imports" for purposes of making a determination of injury. The United States
submits that Article 2.1 of the Anti-Dumping Agreement defines dumped products "[f]or the purpose
of [the Anti-Dumping] Agreement", on a country-wide basis, and that, therefore, the references to
"dumped imports" in paragraphs 1 and 2 of Article 3 and throughout Article 3 refer to all imports of
the product from the countries subject to the investigation.
66. In the United States' view, the Anti-Dumping Agreement requires investigating authorities to
examine, on the one hand, the volume and price effects of the dumped imports, and, on the other
hand, all relevant economic factors having a bearing on the state of the domestic industry. The United
States argues that, through this examination of both the dumped imports and the injury factors, the
investigating authorities examine the "consequent impact" of those dumped imports on the domestic
industry, as set out in paragraphs 1 and 2 of Article 3 of the Anti-Dumping Agreement.
67. The United States contends that Article 9.4 confirms this conclusion, as that provision does
not provide for any separation of imports from each non-examined producer or exporter into two
categories—dumped and not dumped. Rather, the United States contends that the provision provides
for a calculated duty to apply to all of the imports from each non-examined producer.
68. The United States believes that the Panel correctly recognized that, under the Anti-Dumping
Agreement, an investigating authority may appropria tely draw a distinction between the economic
factors and indicia that indicate whether an industry's overall condition is declining, and "other
factors" that may be causing such decline. Only the latter are subject to the non-attribution provisions
of Article 3.5 of the Anti-Dumping Agreement.
69. The United States agrees with the Panel's finding that the European Communities properly
found that the industry's rising raw material costs and inflation were not "other factors" causing injury
subject to the non-attribution provision of Article 3.5. Even if the Appellate Body were to conclude
that these factors should have been considered "other factors", subject to the provisions of Article 3.5,
the United States believes that the European Communities' analysis of the effect of the factors on the
industry represents a reasoned and adequate discussion that does not attribute to imports the effects, if
any, of these two factors. The United States believes that the European Communities' analysis of the
effects of rising raw material costs and inflation would satisfy the European Communities' non-
attribution obligation under Article 3.5, as that obligation has been interpreted by the Appellate Body.

III. Issues Raised in this Appeal
70. The following issues are raised in this appeal:
(a) (i) whether the Article 21.5 Panel 61 erred in dismissing India's claim that the
European Communities had acted inconsistently with Article 3.5 of the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the
"Anti-Dumping Agreement ") —by failing to ensure that injuries caused by "other
factors" was not attributed to the dumped imports—because that claim was not
properly before the Panel; and, if so
(ii) whether the Panel erred in finding, in the alternative, that the European
Communities had ensured that injuries caused by "other factors" was not attributed to
the dumped imports and, therefore, had not acted inconsistently with Article 3.5 of
the Anti-Dumping Agreement;
(b) whether the Panel erred in concluding that the European Communities had acted
consistently with paragraphs 1 and 2 of Article 3 of the Anti-Dumping Agreement in
calculating the volume of dumped imports, for purposes of determining injury; and
(c) whether the Panel failed to discharge its duties properly under Article 17.6 of the
Anti-Dumping Agreement and Article 11 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes (the "DSU"), in finding that the
European Communities had information before it on all relevant economic factors
listed in Article 3.4 of the Anti-Dumping Agreement, including stocks and capacity
utilization.
IV. Article 21.5 of the DSU
A. Introduction
71. We turn first to the issue raised by India that the Panel erred in dismissing India's claim that
the European Communities had acted inconsistently with the requirement of Article 3.5 of the
Anti-Dumping Agreement by failing to ensure that injuries caused by "other factors" was not
attributed to the dumped imports. We recall that India claimed before the original panel that the
European Communities had acted inconsistently with Article 3.5 of the Anti-Dumping Agreement by

61Hereinafter "the Panel".

failing to determine to what extent injuries caused by "other factors" were responsible for the injury
allegedly suffered by the domestic industry. 62 The original panel ruled:
Finally, with respect to India's claim that the European Communities
failed to properly consider "other factors" which might have been
causing injury to the domestic industry, as required by Article 3.5 of
the AD Agreement, we note that, with the exception of the argument
concerning improper consideration of "dumped" imports, India has
made no other arguments in support of this claim. Having rejected
India's position in that regard, we consider that India has failed to
present a prima facie case in this regard.
 63
India did not appeal this panel finding in the original dispute. Thus, the panel report in the original
dispute was adopted by the Dispute Settlement Body (the "DSB") without modification of this
finding.
72. In order to comply with the recommendations an d rulings of the DSB in the original dispute,
the European Communities adopted Council Regulation (EC) No 1644/2001 64, reflecting the
investigating authorities' revised determinations of dumping and injury. In the light of these revised
determinations, the European Communities also re-examined whether a causal link existed between
the dumped imports and injury suffered by the domestic industry.
 65 The European Communities did
not, however, revise the analysis of "other factors" made in the original determination. 66 Rather, in
EC Regulation 1644/2001, the European Communities confirmed the findings of the original
determination in this respect, except for a minor change.
 67

62Original Panel Report, para. 6.123. India al so claimed under Article 3.5 that the European
Communities had failed to establish the existence of a causal link between dumped imports and injury suffered
by the domestic industry. According to India, by cumulating all imports from the countries under
investigation, the European Communities had included in its calculation of "dumped imports" what India
considered to be non-dumped import transactions. ( Ibid., paras. 6.121-6.122) The original panel found no
violation of Article 3.5 in relation to this particular claim. (Ibid., para. 6.142) India did not appeal this finding in
the original dispute.
63Ibid., para. 6.144.
64Council Regulation (EC) No 1644/2001, 7 August 2001, amending Council Regulation (EC)
No 2398/97, imposing a definitive anti-dumping duty on imports of cotton-type bed linen originating in Egypt,
India, and Pakistan and suspending its application with regard to imports originating in India, published in
the Official Journal of the European Communities, 14 August 2001, L-series, No. 219 ("EC Regulation
1644/2001").
65Ibid., recitals (52)-(53).
66Ibid., recitals (59)-(64).
67The Panel noted that the European Communities expanded its findings in the redetermination with
respect to the development of consumption of bed linen in order to take into account slightly different figures on
domestic industry sales. The Panel stated that India's claim in the Article 21.5 proceedings did not rely on this
minor change. (Panel Report, footnote 75 to para. 6.52)

73. Subsequently, before the Article 21.5 Panel, India claimed that the European Communities
had violated Article 3.5, inter alia, because it had disregarded the obligation to not attribute to the
dumped imports injuries caused by "other factors", and had failed to separate and distinguish injuries
caused by those "other factors" from the injury caused by the dumped imports.
 68 The European
Communities responded with a request for a preliminary ruling, asking the Panel to dismiss India's
claim under Article 3.5 insofar as it concerned aspects of the original determination which were the
subject of a claim before the original panel, which was not pursued before that panel.
 69 India asked
the Panel to reject the European Communities' request for a preliminary ruling. 70
74. The Panel stated that:
… a claim which, as a legal and practical matter, could have been
raised and pursued in the original dispute, but was not, cannot be
raised on the same facts and legal premises in an Article 21.5
proceeding to determine the existence or consistency of measures
taken to comply with the recommendation of the DSB in the original
dispute. 71
According to the Panel, neither Article 21.5 of the DSU nor any other provision entitles India to such
a "second chance". 72 The Panel concluded that:
… with respect to India's claim 6, insofar as it concerns the
consistency of the EC's measure with the obligation in Article 3.5 to
ensure that injuries caused by "other factors" not be attributed to the
dumped imports, the EC's request for preliminary ruling has merit. We
consider that this aspect of India's claim is not properly before us,
having been disposed of by the Panel in the original Report and not
appealed, and will not make any ruling on it.
 73

68In addition, India claimed before the Article 21.5 Panel that the European Communities had acted
inconsistently with Article 3.5 by failing to establish a causal link between dumped imports and the injury
allegedly suffered by the domestic industry. (Panel Report, para. 6.218)
69Ibid., para. 6.30.
70Ibid., para. 6.34.
71Ibid., para. 6.43. The Panel disagreed with India that the original panel's finding on India's claim
under Article 3.5 concerning "other factors" was an exercise of judicial economy. In the Panel's view, it was a
finding that India had failed to present a prima facie case of violation. (Ibid., para. 6.44)
72Ibid., para. 6.43.
73Ibid., para. 6.53. However, the Panel did rule on the merits of another aspect of India's claim under
Article 3.5, namely the existence of a causal link between dumped imports and injury. The Panel found that the
European Communities' finding of a causal link is not inconsistent with Article 3.5. ( Ibid., para. 6.233) India
has not appealed this finding.

75. In this appeal, India requests that we reverse the Panel's finding dismissing its claim under
Article 3.5 relating to "other factors", and complete the legal analysis. 74 India argues that its claim
under Article 3.5 forms part of the matter before the Article 21.5 Panel because India identified this
claim in its request for the establishment of that Pa nel. In India's view, the Panel was not precluded
from examining this claim, even though the original panel had dismissed it. Referring to our Report
in Canada – Aircraft (Article 21.5 – Brazil) , India submits that the measure at issue in this
implementation dispute is a new measure that is legally separate and distinct from the original
measure.
 75 India argues further that an implementati on dispute is not confined to examining the
measures taken to comply from the perspective of the claims, arguments, and factual circumstances
related to the measure that was the subject of the original proceedings.
 76 In support of this position,
India asserts that, in the US – FSC (Article 21.5 – EC) implementation dispute, a claim under
Article III of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994") was accepted on
appeal, even though the European Communities could have raised it during the original proceedings,
but did not. 77
76. India also contends that the Panel erred in finding the situation in these implementation
proceedings to be analogous to the situation in US – Shrimp (Article 21.5 – Malaysia). 78 In India's
view, the measure in US – Shrimp (Article 21.5 – Malaysia) was the same measure that had been
found to be consistent with obligations of the World Trade Organization (the "WTO") in the original
proceedings.
 79 In this dispute, India notes that the European Communities re-examined causation in
the redetermination as a consequence of revised dumping and injury findings. Therefore, in India's
view, the causation analysis is a new component of the measure taken to comply that was not part of
the measure before the original panel.
 80
77. The European Communities responds that we should uphold the Panel's ruling dismissing
India's claim under Article 3.5 relating to "other factors". 81 The European Communities argues that it
was under no obligation to correct, in the redetermination, its findings on "other factors", because the
original panel had not ruled that these findings were inconsistent with Article 3.5.
 82 The European

75Ibid., paras. 151-152, referring to Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) ,
paras. 36 and 41.
76Ibid., para. 136.
77Ibid., para. 146.
78Ibid., paras. 148 ff, referring to Panel Report, paras. 6.50 and 6.52.
79Ibid., para. 149, referring to Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia), para. 89.
80India's statement at the oral hearing.
82Ibid., para. 142.

Communities concludes, therefore, that the aspects of the redetermination relating to "other factors"
are not part of the measure "taken to comply" with the recommendations and rulings of the DSB in
the original dispute.
 83 According to the European Commun ities, claims challenging measures other
than those taken to comply cannot form part of Article 21.5 proceedings. The European Communities
agrees with the Panel's reliance on our findings in US – Shrimp (Article 21.5 – Malaysia) . 84 In the
European Communities' view, the implementation disputes in Canada – Aircraft (Article 21.5
– Brazil) and in US – FSC (Article 21.5 – EC) can be distinguished from the present Article 21.5
proceedings because those disputes concerned new claims challenging modified aspects of the
measure. 85 The European Communities emphasizes that the original panel's finding rejecting India's
claim relating to "other factors" represents the final resolution of the dispute between the parties,
because it forms part of a panel report adopted by the DSB. For this reason, the European
Communities maintains that India is precluded from reasserting this claim in these Article 21.5
proceedings.
B. Analysis
78. In examining whether India's claim under Article 3.5 relating to "other factors" was properly
before the Panel, we must first establish the appropriate subject-matter of Article 21.5 proceedings.
Article 21.5 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 wherever
possible resort to the original panel.
As in original dispute settlement proceedings, the "matter" in Article 21.5 proceedings consists of
two elements: the specific measures at issue and the legal basis of the complaint (that is, the
claims).
 86 If a claim challenges a measure which is not a "measure taken to comply", that claim
cannot properly be raised in Article 21.5 proceedings. We agree with the Panel that it is, ultimately,
for an Article 21.5 panel—and not for the complainant or the respondent—to determine which of the

84Ibid., para. 149.
85Ibid., paras. 136 and 160.
86Appellate Body Report, Guatemala – Cement I, paras. 72 and 76, interpreting Article 7 of the DSU.

measures listed in the request for its establishment are "measures taken to comply". 87 Although the
issue raised by India in this appeal relates primarily to the scope of claims that may be raised in
Article 21.5 proceedings, this issue is intertwined with the question of which measures may be
considered as "measures taken to comply" with the DSB rulings in an original dispute.
79. We addressed the function and scope of Article 21.5 proceedings for the first time in Canada
– Aircraft (Article 21.5 – Brazil). There, we found that Article 21.5 panels are not merely called upon
to assess whether "measures taken to comply" implement specific "recommendations and rulings"
adopted by the DSB in the original dispute.
 88 We explained there 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.
 89 This implies that an
Article 21.5 panel is not confined to examining the "measures taken to comply" from the perspective
of the claims, arguments, and factual circumstances relating to the measure that was the subject of the
original proceedings.
 90 Moreover, the relevant facts bearing upon the "measure taken to comply"
may be different from the facts relevant to the measure at issue in the original proceedings. It is to be
expected, therefore, that the claims, arguments, and factual circumstances relating to the "measure
taken to comply" will not, necessarily, be the same as those relating to the measure in the original
dispute.
 91 Indeed, a complainant in Article 21.5 proceedings may well raise new claims, arguments,
and factual circumstances different from those raised in the original proceedings, because a "measure
taken to comply" may be inconsistent with WTO obligations in ways different from the original
measure. In our view, therefore, an Article 21.5 panel could not properly carry out its mandate to

87The Panel stated in paragraph 6.17 of the Panel Report:
To the extent a party may have challenged, in a request for establishment of
an Article 21.5 panel, measures which were not "taken to comply" by the
implementing Member, it is our view that a Panel may decline to address
claims concerning such measures. (original boldface)
In paragraphs 6.13 ff of the Panel Report, the Panel re fers, in support of this interpretation, to the panel
reports in Australia – Salmon (Article 21.5 – Canada) (para. 7.10.22) and Australia – Automotive Leather II
(Article 21.5 – US) (para. 6.4).
88Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil), para. 40.
89Ibid., paras. 40-41. The panels in EC – Bananas III (Article 21.5 – Ecuador) (paras. 6.8-6.9) and
Australia – Salmon (Article 21.5 – Canada) (para. 7.10.9) reached essentially the same conclusion.
90Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil), para. 41.
91Ibid.

assess whether a "measure taken to comply" is fully consistent with WTO obligations if it were
precluded from examining claims additional to, and different from, the claims raised in the original
proceedings.
 92
80. This appeal, however, raises an issue different from the issue that was before us in Canada –
Aircraft (Article 21.5 – Brazil). Here, India did not raise a new claim before the Article 21.5 Panel;
rather, India reasserted in the Article 21.5 proceedings the same claim that it had raised before the
original panel in respect of a component of the implementation measure which was the same as in the
original measure. This same claim was dismissed by the original panel, and India did not appeal that
finding.
81. Despite this previous dismissal, and despite India's decision not to appeal it, India insists that
it should be entitled to reassert its claim under Article 3.5 relating to "other factors" in these
Article 21.5 proceedings. India argues that it should be entitled to do so because the "measure taken
to comply" in this dispute is "separate and distinct" from the measure subject to the original dispute.
 93
For support, India refers to our Report in Canada – Aircraft (Article 21.5 – Brazil), where we stated
that:
In principle, a measure which has been "taken to comply with the
recommendations and rulings" of the DSB will not be the same
measure as the measure which was the subject of the original dispute,
so that, in principle, there would be two separate and distinct
measures: the original measure which gave rise to the
recommendations and rulings of the DSB, and the "measures taken to
comply" which are – or should be – adopted to implement those
recommendations and rulings.
 94 (original italics; footnote omitted)

92As we put it in Canada – Aircraft (Article 21.5 – Brazil):
Indeed, the utility of the review envisaged under Article 21.5 of the DSU
would be seriously undermined if a panel were restricted to examining the
new measure from the perspective of the claims, arguments and factual
circumstances that related to the original measure, because an Article 21.5
panel would then be unable to examine fully the "consistency with a
covered agreement of the measures taken to comply", as required by
Article 21.5 of the DSU.
(Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) , para. 41) We defined the function
of Article 21.5 proceedings in the same vein in our Report in US – Shrimp (Article 21.5 – Malaysia) (para. 87).
94Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) , para. 36. In US – Shrimp
(Article 21.5 – Malaysia), we recalled our rulings on this issue, explicitly referring to our Report in Canada –
Aircraft (Article 21.5 – Brazil). (Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia), para. 86)

82. Relying on this, India contends that it is not, in fact, challenging the same measure that was
before the original panel. India maintains that, although some aspects of the measure remain the
same, the redetermination must be considered "as a whole new measure" because it is not capable of
being divided into separate elements.
 95
83. In contrast, the European Communities contends that there are limits to the scope of the
claims that may be raised in Article 21.5 proceedings, even where such claims challenge "measures
taken to comply" as inconsistent with WTO obligations , in contrast to measures that gave rise to the
original proceedings. The European Communities refers to our Report in US – Shrimp (Article 21.5
– Malaysia), on which the Panel also relied
 96, where we stated:
With respect to a claim that has been made when a matter is
referred by the DSB for an Article 21.5 proceeding, Malaysia seems
to suggest as well that a panel must re-examine, for WTO-
consistency, even those aspects of a new measure that were part of a
previous measure that was the subject of a dispute, and were found
by the Appellate Body to be WTO–consistent in that dispute, and
that remain unchanged as part of the new measure.
 97 (original italics)
We concluded in that appeal that:
… the [ US – Shrimp (Article 21.5 – Malaysia) ] Panel properly
examined Section 609 as part of its examination of the totality of the
new measure, correctly found that Section 609 had not been changed
since the original proceedings, and rightly concluded that our ruling
in United States – Shrimp with respect to the consistency of Section
609, therefore, still stands. 98
84. In the light of these considerations, we turn to an examination of the measure taken to comply
in this implementation dispute. In doing so, we look to the various aspects of the redetermination
carried out by the European Communities in order to comply with the DSB rulings in the original
dispute.
85. We agree with India that the investigating authorities of the European Communities were
required to revise the original determination of du mping and injury in order to comply with the DSB
recommendations and rulings. Towards this end, the European Communities recalculated the
dumping margins without applying the practice of "zeroing" that had been found to be inconsistent
with WTO obligations in the original dispute. According to the recalculation, two of the individually

95India's response to questioning at the oral hearing.
96Panel Report, para. 6.50.
97Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia), para. 89.
98Ibid., para. 96.

examined Indian producers were not dumping. 99 The investigating authorities deducted the imports
attributable to those two producers from the volume of dumped imports, and, accordingly, the
volume of dumped imports in the redetermination was lower than in the original determination.
According to EC Regulation 1644/2001, the investig ating authorities of the European Communities
also "re-examined" whether a causal link between the two revised elements—dumped imports and
the injury to the domestic industry—still existed, and the Panel reviewed that re-examination. 100
86. The amount of dumped imports will, of course, have an impact on the assessment of the
effects of the "dumped imports" for the purposes of determining injury. It is clear, therefore, that the
revised findings on dumping and injury could have a bearing on whether a causal link exists between
dumping and injury. But whilst a revised finding of dumping will, in all likelihood, have an impact
on the "effect of dumped imports", we see no reason to conclude as well that this revised finding
would have any impact on the "effects … of known factors other than the dumped imports" in this
dispute.
 101 Accordingly, we are of the view that the investigating authorities of the European
Communities were not required to change the determination as it related to the "effects of other
factors" in this particular dispute. Moreover, we do not see why that part of the redetermination that
merely incorporates elements of the original determination on "other factors" would constitute an
inseparable element of a measure taken to comply with the DSB rulings in the original dispute.
Indeed, the investigating authorities of the Europ ean Communities were able to treat this element
separately. Therefore, we do not agree with India that the redetermination can only be considered "as
a whole new measure".
 102
87. We conclude, therefore, that, in these Article 21.5 proceedings, India has raised the same
claim under Article 3.5 relating to "other factors" as it did in the original proceedings. In doing so,
India seeks to challenge an aspect of the original measure which has not changed, and which the
European Communities did not have to change, in order to comply with the DSB recommendations
and rulings to make that measure consistent with the European Communities' WTO obligations.

99In the original determination, the European Communities treated all imports from India as "dumped"
because it found, in applying the practice of "zeroing" , that all of the individually-examined producers were
dumping. The original panel ruled that all import transactions attributable to a producer found to be dumping
may be considered as "dumped" for purposes of making a determination of injury. (Original Panel Report,
para. 6.137)
100Panel Report, paras. 6.228 and 6.233.
101We do not see how a change in the volume of "dumped imports" would affect the relationship
between injury caused by "dumped imports" and injury caused by "other factors" in a situation where those
"other factors" alone do not cause injury. However, a change in the volume of "dumped imports" could affect
this relationship in a situation where "other factors" cause a certain amount of injury.
102India's response to questioning at the oral hearing.

88. For these reasons, we agree with the Panel's st atement distinguishing, in this respect, the
Canada – Aircraft (Article 21.5 – Brazil) dispute from these Article 21.5 proceedings:
In that case, Canada had implemented the recommendation of the
DSB by adopting a new and different measure. In the Article 21.5
proceeding, Brazil made claims regarding that measure that it had not
made in the original dispute. Canada objected to claims raised by
Brazil against the new measure on the grounds that no similar claims
had been raised against the original measure. Had Canada's objection
been upheld, Brazil would have been barred from making claims that
could not have been raised in the original proceedings. The issue
before us is whether India should be allowed to raise, in this
Article 21.5 proceeding, claims with respect to Article 3.5 which it
could and did raise before the original panel, but which it did not
pursue, and which the Panel dismissed for failure to present a prima
facie case of violation.
 103 (original boldface)
We agree with the Panel that the Canada – Aircraft (Article 21.5 – Brazil) dispute involved a new
claim challenging a new component of the measure taken to comply which was not part of the
original measure. The situation in Canada – Aircraft (Article 21.5 – Brazil) was thus different from
the situation in this appeal.
89. Nor does our finding in US – FSC (Article 21.5 – EC) support India's position in this
appeal. 104 In that implementation dispute, the Article 21.5 panel ruled on a new claim under
Article III of the GATT 1994 that the European Communities had not raised in the original
proceedings. We upheld that ruling on appeal. In that dispute, the European Communities challenged
a "foreign content limit" (which is similar to a local content requirement) imposed by the "FSC
Repeal and Extraterritorial Income Exclusion Act of 2000 (ETI)"
 105 on foreign trade property eligible
for special tax treatment. That provision established a different "foreign content limit" from the one
contained in the original "Foreign Sales Corporation (FSC) regime" 106, which the United States had
changed in order to comply with the DSB recommendations and rulings in the original dispute. In
other words, the US – FSC (Article 21.5 – EC) dispute involved a new claim challenging a
changed component of the measure taken to comply, while this dispute, by contrast, concerns the
same claim against an unchanged component of the implementation measure that was part of the

103Panel Report, para. 6.48.
105United States Public Law 106-519, 114 Stat. 2423 (2002).
106Sections 921-927 of the Internal Revenue Code and Related Measures Establishing Special Tax
Treatment for Foreign Sales Corporations.

original measure and that was not found to be inconsistent with WTO obligations. 107 Therefore, the
situation in US – FSC (Article 21.5 – EC) was different from the situation in this appeal.
90. Having distinguished the situations in these two previous implementation disputes from the
situation in this appeal, we turn next to the question of the effect of a ruling adopted by the DSB in
an original dispute for the parties to Article 21.5 proceedings. The European Communities argues
that a ruling adopted by the DSB provides a final resolution to the dispute between the parties as it
relates to the particular claim and the specific aspect of the measure.
 108 As we have noted, the
US – Shrimp (Article 21.5 – Malaysia) dispute involved a claim against an aspect of the
implementation measure that was the same as in the original measure, and that we had found to be
not inconsistent with WTO obligations in the original dispute. In that Article 21.5 dispute, we ruled:
We wish to recall that panel proceedings under Article 21.5 of the
DSU are, as the title of Article 21 states, part of the process of the
"Surveillance of Implementation of Recommendations and Rulings "
of the DSB. This includes Appellate Body Reports. To be sure, the
right of WTO Members to have recourse to the DSU, including under
Article 21.5, must be respected. Even so, it must also be kept in
mind that Article 17.14 of the DSU provides not only that Reports of
the Appellate Body "shall be" adopted by the DSB, by consensus, but
also that such Reports "shall be … unconditionally accepted by the
parties to the dispute. …" Thus, Appellate Body Reports that are
adopted by the DSB are, as Article 17.14 provides, "…
unconditionally accepted by the parties to the dispute", and,
therefore, must be treated by the parties to a particular dispute as a
final resolution to that dispute. In this regard, we recall, too, that
Article 3.3 of the DSU states that the "prompt settlement" of disputes
"is essential to the effective functioning of the WTO". 109 (underlining
added)
91. Thus, we concluded there that an adopted Appellate Body Report must be treated as a final
resolution to a dispute between the parties to that dispute. We based this conclusion on Article 17.14
of the DSU, which deals with the effect of adopted Appellate Body Reports (as opposed to panel
reports). Article 17.14 reads, in relevant part:

107We also agree with the Panel's statements, in paragraphs 6.46 and 6.49 of the Panel Report, that the
claims raised in EC – Bananas III (Article 21.5 – Ecuador) , as well as those raised in Australia – Salmon
(Article 21.5 – Canada) , concerned aspects of the "measures taken to comply" in those disputes which were
different from the measures subject to the respective original disputes.
108European Communities' appellee's submission, paras. 150-151.
109Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia), para. 97.

Adoption of Appellate Body Reports
An Appellate Body report shall be adopted by the DSB and
unconditionally accepted by the parties to the dispute unless the DSB
decides by consensus not to adopt the Appellate Body report within
30 days following its circulation to the Members. (footnote omitted)
92. The issue raised in this appeal is similar to the issue we resolved in US – Shrimp (Article 21.5
– Malaysia). In this appeal, however, the original panel's finding on India's claim under Article 3.5
relating to "other factors" was not appealed in the original dispute. Accordingly, the finding of the
original panel relating to that claim was adopted by the DSB as part of a panel report, and, therefore,
Article 17.14, which deals with the adoption of Appellate Body Reports, does not dispose of the issue
before us.
93. All the same, in our view, an unappealed finding included in a panel report that is adopted
by the DSB must be treated as a final resolution to a dispute between the parties in respect of the
particular claim and the specific component of a measure that is the subject of that claim. This
conclusion is supported by Articles 16.4 and 19.1, paragraphs 1 and 3 of Article 21, and Article 22.1
of the DSU. Where a panel concludes that a measure is inconsistent with a covered agreement, that
panel shall recommend, according to Article 19.1, that the Member concerned bring that measure
into conformity with that agreemen t. A panel report, including the recommendations contained
therein, shall be adopted by the DSB within the time period specified in Article 16.4—unless
appealed. Members are to comply with recommendations and rulings adopted by the DSB
promptly, or within a reasonable period of time, in accordance with paragraphs 1 and 3 of Article 21
of the DSU. A Member that does not comply with the recommendations and rulings adopted by the
DSB within these time periods must face the consequences set out in Article 22.1, relating to
compensation and suspension of concessions. Thus, a reading of Articles 16.4 and 19.1, paragraphs 1
and 3 of Article 21, and Article 22.1, taken together, makes it abundantly clear that a panel finding
which is not appealed, and which is included in a panel report adopted by the DSB, must be accepted
by the parties as a final resolution to the dispute between them, in the same way and with the same
finality as a finding included in an Appellate B ody Report adopted by the DSB—with respect to the
particular claim and the specific component of the measure that is the subject of the claim. Indeed,
the European Communities and India agreed at the oral hearing that both panel reports and Appellate
Body Reports would have the same effect, in this respect, once adopted by the DSB.
 110

110India's and the European Communities' responses to questioning at the oral hearing.

94. On this point, we recall that we resolved the question of the effect of findings adopted by the
DSB as part of a panel report in the same vein in Mexico – Corn Syrup (Article 21.5 – US). In that
implementation dispute, we relied on Article 3.2 of the DSU, which emphasizes the need for security
and predictability in the trading system, and on Article 3.3 of the DSU, which stresses the necessity
for the prompt settlement of disputes. There, we treated certain findings of the original panel that had
not been appealed in the original proceedings, and that had been adopted by the DSB, as a final
resolution to the dispute between the parties in respect of the particular claim and the specific
component of the measure that was the subject of the claim. We observed there that "Mexico seems
to seek to have us revisit the original panel report"
 111, and added that:
… the original panel report, regarding the initial measure (SECOFI's
original determination), has been adopted and that these Article 21.5
proceedings concern a subsequent measure (SECOFI's
redetermination). We also note that Mexico did not appeal the
original panel's report, and that Articles 3.2 and 3.3 of the DSU
reflect the importance to the multilateral trading system of security,
predictability and the prompt settlement of disputes. We see no basis
for us to examine the original panel's treatment of the alleged
restraint agreement.
 112 (original italics)
95. We, therefore, agree with the Panel in this dispute that:
… the same principle [as that expressed in Article 17.14] applies to
those aspects of the Panel's report that are not appealed and are thus
not addressed by the Appellate Body. Thus, the portions of the
original Report of the Panel that are not appealed, together with the
Appellate Body report resolving the issues appealed, must, in our
view, be considered as the final resolution of the dispute, and must be
treated as such by the parties, and by us, in this proceeding.
 113
(footnote omitted)

111Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US), para. 78.
112Ibid., para. 79.
113Panel Report, para. 6.51. The Panel found support for its view in our finding in Japan – Alcoholic
Beverages II that "[a]dopted panel reports are an important part of the GATT acquis. … They create legitimate
expectations among WTO Members, and, therefore, should be taken into account where they are relevant to any
dispute. However, they are not binding, except with respect to resolving th e particular dispute between the
parties to that dispute ". ( Ibid., footnote 73 to para. 6.51, quoting Appellate Body Report, Japan – Alcoholic
Beverages II, at 108) (emphasis added)

96. We consider next whether the fact that the Panel dismissed India's claim because India had
not established a prima facie case has any relevance for our decision on the effect of the adoption by
the DSB of a finding of a panel report that was not appealed. We recall that, when we ruled in
US – Shrimp (Article 21.5 – Malaysia) that a finding adopted by the DSB should be treated as a final
resolution to a dispute, we relied on the fact that, in our original Report in US – Shrimp, we had
found that the unchanged aspect of the measure, as such, was consistent with Article XX of the
GATT 1994. Here, however, the original panel ruled that India had failed to present a prima facie
case in respect of its claim under Article 3.5 relating to "other factors".
 114 In our view, the effect, for
the parties, of findings adopted by the DSB as part of a panel report is the same, regardless of whether
a panel found that the complainant failed to establish a prima facie case that the measure is
inconsistent with WTO obligations, that the Panel found that the measure is fully consistent with
WTO obligations, or that the Panel found that the measure is not consistent with WTO obligations. A
complainant that, in an original proceeding, fails to establish a prima facie case should not be given a
"second chance" in an Article 21.5 proceeding, and thus be treated more favourably than a
complainant that did establish a prima facie case but, ultimately, failed to prevail before the original
panel, with the result that the panel did not find the challenged measure to be inconsistent with WTO
obligations. Nor should a defending party be subject to a second challenge of the measure found not
to be inconsistent with WTO obligations, merely because the complainant failed to establish a prima
facie case, as opposed to failing ultimately to persuade the original panel. Once adopted by the DSB,
both findings amount to a final resolution to the issue between the parties with respect to the particular

114The Panel stated that:
Neither the Panel nor the Appellate Body in the original dispute had the
opportunity to consider arguments with respect to India's claim in the
original proceeding concerning the consistency of the EC's anti-dumping
duty with Article 3.5 of the AD Agreement concerning consideration of
"other factors" of injury, because India did not present arguments in support
of its claim. The Panel did, however, rule on India's claim, finding that
India had failed to present a prima facie case on this claim, and that aspect
of the Panel's report was adopted without modification.

claim and the specific aspects of the measure that are the subject of the claim. 115 Moreover, here,
India decided not to appeal the panel finding at issue in the original proceedings, even though it could
have done so, inasmuch as the issue was not of an exclusively factual nature. Hence, India itself
seems to have accepted the finding as final.
97. Therefore, we agree with the Panel's conclusion that:
When considering the status of adopted panel reports, the Appellate
Body has indicated that they are binding on the parties "with respect
to that particular dispute".
 In our view, the Panel's ruling in the
original dispute disposed of India's claim in this regard. Thus, we
consider that India is precluded from reasserting in this proceeding
and presenting arguments in support of a claim challenging the EC's
consideration of "other factors" of injury.
 116 (footnotes omitted)
98. The Panel's ruling that India's claim under Article 3.5 relating to "other factors" was not
properly before it is also consistent with the object and purpose of the DSU. Article 3.3 provides that
the prompt settlement of disputes is "essential to the effective functioning of the WTO". Article 21.5
advances the purpose of achieving a prompt settlement of disputes by providing an expeditious
procedure to establish whether a Member has fully complied with the recommendations and rulings of
the DSB.
 117 For that purpose, an Article 21.5 panel is to complete its work within 90 days, whereas a
panel in an original dispute is to complete its wo rk within 9 months of its establishment, or within

115We note that, at the oral hearing, the participants agreed that a finding adopted by the DSB,
expressed in terms of WTO-consistency or the failure to present a prima facie case, has the same effect in
terms of providing a final resolution to a dispute, in this respect, between the parties.
We also recall that the Panel noted, in paragraph 6.44 of the Panel Report, that the original panel's
dismissal of India's claim under Article 3.5 relating to "other factors" was not an exercise of "judicial
economy". The issue raised in this appeal is different from a situation where a panel, on its own initiative,
exercises "judicial economy" by not ruling on the substance of a claim. In this respect, we recall our statement
in Australia – Salmon that:
The principle of judicial economy has to be applied keeping in mind the aim
of the dispute settlement system. This aim is to resolve the matter at issue
and "to secure a positive solution to a dispute". To provide only a partial
resolution of the matter at issue would be false judicial economy. A panel
has to address those claims on which a finding is necessary in order to
enable the DSB to make sufficiently precise recommendations and rulings
so as to allow for prompt compliance by a Member with those
recommendations and rulings "in order to ensure effective resolution of
disputes to the benefit of all Members."
(Appellate Body Report, Australia – Salmon, para. 223) (footnotes omitted)
We believe that in a situation where a panel, in declin ing to rule on a certain claim, has provided only a
partial resolution of the matter at issue, a complainant should not be held responsible for the panel's false
exercise of judicial economy, such that a complainant would not be prevented from raising the claim in a
subsequent proceeding.
116Panel Report, para. 6.52.
117Ibid., para. 6.45.

6 months of its composition. It would be incomp atible with the function and purpose of the WTO
dispute settlement system if a claim could be reasserted in Article 21.5 proceedings after the original
panel or the Appellate Body has made a finding that the challenged aspect of the original measure is
not inconsistent with WTO obligations, and that report has been adopted by the DSB. At some point,
disputes must be viewed as definitely settled by the WTO dispute settlement system.
99. In the light of the foregoing, we conclude that the original panel's finding on India's claim
under Article 3.5 relating to "other factors" provides a "final resolution" to the dispute in this
respect
 118 between the parties, because it was not appealed, and forms part of a panel report adopted
by the DSB. Therefore, we uphold the Panel's finding, in paragraph 6.53 of the Panel Report, that
India's claim under Article 3.5 of the Anti-Dumping Agreement, as far as it relates to the European
Communities' consideration of "other factors", was not properly before the Panel.
100. As a result, we do not need to rule on the issue of whether the Panel erred, in its alternative
finding, in paragraph 6.246 of the Panel Report, that the European Communities had ensured that
injuries caused by "other factors" was not attributed to the dumped imports, and thus had not acted
inconsistently with Article 3.5 of the Anti-Dumping Agreement. We recall that, at the oral hearing,
India confirmed that its appeal against the Panel's alternative finding is conditional on our reversing
the Panel's finding that India's claim under Article 3.5 relating to "other factors" was not properly
before the Panel, and that, therefore, we need not reach this issue if we were to rule as we, in fact,
have ruled.
 119
V. Paragraphs 1 and 2 of Article 3 of the Anti-Dumping Agreement
A. Introduction
101. India appeals the Panel's finding that the European Communities did not act inconsistently
with paragraphs 1 and 2 of Article 3 of the Anti-Dumping Agreement. 120 India contends that the
European Communities did act inconsistently with those provisions, because the investigating
authorities of the European Communities found, fo r purposes of determining injury, that all imports
attributable to Indian producers or exporters for which no individual margin of dumping was
calculated were dumped. India argues that this "determination by the EC neither rested on positive
evidence, nor was objective, and, accordingly, was inconsistent with Articles 3.1 and 3.2 of the

118By this we mean this particular claim and the specific component of the measure that was the subject
of that claim.
119India's response to questioning at the oral hearing.

Anti-Dumping Agreement ." 121 According to India, the European Communities was required to
determine the volume of dumped imports attributable to producers that were not examined
individually on the basis of the proportion of imports found to be dumped from producers that were
examined individually. 122 In other words, India argues that, where a certain proportion of the
volume of the imports attributable to producers examined individually is found to be dumped,
paragraphs 1 and 2 of Article 3 require the investigating authorities to determine the volume of
dumped imports attributable to the producers that were not individually examined in the same
proportion.
102. We begin by recalling the findings of the original panel and the Article 21.5 Panel insofar as
they are relevant for resolving this issue. Before the original panel, India claimed that, by including
import transactions for which there was no evidence of dumping in the volume of dumped imports
when determining injury, the European Communities violated paragraphs 1 and 2 of Article 3. The
European Communities contended that the volume of dumped imports, for purposes of Article 3,
includes all imports originating in the investigated country found to be dumping. The original
panel disagreed with India, and concluded that dumping is a determination made with reference to
imports from a particular producer or exporter, and not with reference to individual
transactions.
 123 In the original panel's view, if a producer or exporter that is examined individually is
found to be dumping, all import transactions attributable to that producer or exporter may be
considered as dumped. The original panel found no violation of Article 3 in relation to the
determination of the volume of dumped imports.
 124 This latter finding of the original panel was not
appealed.
103. In the redetermination that gave rise to this appeal, the investigating authorities of the
European Communities recalculated dumping margins for the five Indian producers and exporters that
had been examined individually in the original determination that led to the original measure. They
did so without applying the practice of "zeroing", which had been found to be inconsistent with
Article 2.4.2 in the original proceedings.
 125 In this recalculation, the investigating authorities found
that three of the five Indian producers examin ed individually were dumping, and two were not. It is
undisputed between the parties that the two Indian producers found not to be dumping accounted for

122Ibid., para. 31.
123Original Panel Report, para. 6.136.
124Ibid., para. 6.142.
125The original panel found that the European Communities had acted inconsistently with Article 2.4.2
by establishing the margins of dumping based on a methodology which included zeroing negative price
differences calculated for some models of bed linen. ( Ibid., para. 6.119) We upheld this finding on appeal.
(Appellate Body Report, EC – Bed Linen, para. 66)

53 percent of all imports attributable to the five producers which were examined individually. Based
on this recalculation, the European Communities concluded that all imports attributable to all other
Indian producers or exporters—which were not examined individually— were dumped. For purposes
of determining injury, the investigating authorities excluded from the volume of dumped imports the
imports from the two producers that were examined individually and found not to be dumping 126,
but included all imports from Indian producers that had not been examined individually and for
which, therefore, there was no direct evidence from the investigation.
104. Before the Article 21.5 Panel , India claimed that the European Communities violated
paragraphs 1 and 2 of Article 3 by finding, in this redetermination, that all imports attributable to
Indian producers or exporters that were not individually examined were dumped. In reply, the
European Communities contended that nothing in the Anti-Dumping Agreement prohibits Members
from including in the volume of dumped imports, the volume of all imports from producers which
were examined individually and found to be dumping, as well as all imports from producers which
were not examined individually.
105. The Panel found that the European Communities "did not act inconsistently with Articles 3.1
and 3.2 of the [Anti-Dumping] Agreement in its consideration of 'dumped imports' in this case".
 127
The Panel's finding was premised essentially on the argument that paragraphs 1 and 2 of Article 3
"contain no guidance whatsoever regarding the determination of the volume of dumped imports".
 128
In the Panel's view, the fact that "Article 9.4 allows anti-dumping duties to be collected on imports
from producers for which an individual determination of dumping … was not made … necessarily
entails that [imports attributed to] such producers are properly considered … as 'dumped imports' for
the purposes of Articles 3.1 and 3.2".
 129 The Panel concluded "that the [Anti-Dumping] Agreement
does not require an investigating authority to determine the volume of imports from producers outside
the sample that is properly considered 'dumped imports' for purposes of injury analysis on the basis of
the proportion of imports from sampled producers that is found to be dumped."
 130
106. On appeal, India requests that we reverse this finding. In India's view, paragraphs 1 and 2 of
Article 3 do not permit a determination of injury to be based on imports from producers for which

126Panel Report, para. 6.117. The European Communities made alternative calculations of the volume
of dumped imports from India; one calculation included imports attributable to the producers that were found
 not to be dumping, while the other did not. Under both alternative calculations, the European Communities
found that the domestic industry was suffering injury. (EC Regulation 1644/2001, recital (22))
127Panel Report, para. 6.144.
128Ibid., para. 6.127.
129Ibid., para. 6.137. (original boldface)
130Ibid., para. 6.144. (original boldface)

there is "no evidence" of dumping. 131 India notes that the evidence from the sample of examined
producers indicated that only 47 percent of the imports attributed to those producers were dumped.
Therefore, according to India, the European Communities' determination, on the basis of this evidence
alone, that 86 percent of the total imports from India were dumped, and, therefore, that this was the
percentage of the "volume of the dumped imports", under paragraphs 1 and 2 of Article 3, did not
result from an "objective examination" on the basis of "positive evidence", as required by the first
paragraph of Article 3.
 132 In India's view, imports from producers for which an individual
determination of dumping is not made must be presumed not to have been dumped in the same
proportion as imports determined not to have been dumped from producers for which an individual
determination of dumping was made. 133
107. The European Communities requests that we uphold the Panel's finding. The European
Communities argues that it is entitled, for purposes of paragraphs 1 and 2 of Article 3, to treat as
dumped all imports attributable to producers for which it did not make an affirmative determination
of no dumping. According to the European Commun ities, this includes all imports attributable to
producers that were examined individually and found to be dumping, as well as all imports
attributable to producers that were not examined individually.
 134 According to the European
Communities, all imports attributable to producers that were not examined individually may be
treated as dumped, for purposes of determining injury under Article 3, because Article 9.4 permits
the imposition of the "all others" duty rate on imports attributable to non-examined producers. 135
B. Analysis
108. We recall at the outset that the Anti-Dumping Agreement permits importing Members to
counteract dumping by imposing anti-dumping measures on imports from companies of exporting

132Ibid., para. 47. The figure of 86 percent was derived from deducting from the total amount of
imports the volume of imports attributable to the two Indian companies that were examined individually and
found, in the redetermination, not to be dumping.
133India emphasizes that the results from the producers that were examined individually are
representative of all Indian producers exporting bed linen to the European Communities, because those
examined producers constituted a "sta tistically valid sample" within the meaning of the second sentence of
Article 6.10. We return to Article 6.10 later in this Report, infra, paras. 134 ff.
134The European Communities argues that the Indian exporters that were examined individually are
not necessarily representative of the non-examined exporters. In other words, the five Indian exporters
examined individually were not a statistically valid sa mple, as India has claimed. Rather, according to the
European Communities, the five exporters accounted for the largest percentage of the export volume that could
be reasonably investigated, within the meaning of the second sentence of Article 6.10.
135The "all others" duty rate refers to the duty applied to imports from producers or exporters for which
an individual margin of dumping is not established. (See Appellate Body Report, US – Hot-Rolled Steel ,
para. 115)

Members when an investigation demonstrates that all the requirements of that Agreement are fulfilled.
It is useful also to recall the specific standard of review under the Anti-Dumping Agreement that the
Panel was required to follow in this dispute. This standard of review is set out in Article 17.6 of the
Anti-Dumping Agreement. 136 As to the facts, under Article 17.6(i), a panel "shall" determine whether
the establishment of the facts by the investigating authorities was "proper" and whether the evaluation
of those facts was "unbiased and objective". If the establishment of the facts was proper and the
evaluation was unbiased and objective, then a panel "shall not" overturn that evaluation, even though
it might have reached a different conclusion. As to the law, under Article 17.6(ii), first sentence, a
panel "shall interpret the relevant provisions of the Agreement in accordance with customary rules of
interpretation of public international law." Under Article 17.6(ii), second sentence, where a panel
finds from such an interpretation that a relevant provision of the Anti-Dumping Agreement "admits
of more than one permissible interpretation", the panel "shall find the [investigating] authorities'
measure to be in conformity with the Agreement if it rests upon one of those permissible
interpretations." We examine the issues raised in this appeal with this standard of review in mind.
109. We begin our analysis with an examination of Article 3 of the Anti-Dumping Agreement,
which is entitled "Determination of Injury". Paragraphs 1 and 2 of Article 3 read as follows:
3.1 A determination of injury for purposes of Article VI of
GATT 1994 shall be based on positive evidence and involve an
objective examination of both (a) the volume of the dumped imports
and the effect of the dumped imports on prices in the domestic
market for like products, and (b) the consequent impact of these
imports on domestic producers of such products. (emphasis added)
3.2 With regard to the volu me of the dumped imports , the
investigating authorities shall consider whether there has been a
significant increase in dumped imports , either in absolute terms or
relative to production or consumption in the importing Member.
With regard to the effect of the dumped imports on prices, the
investigating authorities shall consider whether there has been a
significant price undercutting by the dumped imports as compared
with the price of a like product of the importing Member, or whether
the effect of such imports is otherwise to depress prices to a
significant degree or prevent price increases, which otherwise would
have occurred, to a significant degree. No one or several of these
factors can necessarily give decisive guidance. (emphasis added)

136Appellate Body Report, Thailand – H-Beams , para. 114. Article 11 of the DSU defines generally a
panel's mandate in reviewing the consistency with the covered agreements of measures taken by Members. In
our Report in US – Hot-Rolled Steel, we found that there is no "conflict" between Article 11 of the DSU and
Article 17.6 of the Anti-Dumping Agreement ; rather, the two provisions complement each other. (Appellate
Body Report, US – Hot-Rolled Steel, para. 55)

These obligations are absolute. They provide for no exceptions, and they include no qualifications.
They must be met by every investigating authority in every injury determination.
110. In Thailand – H-Beams , we emphasized the relevance of Article 3.1 as an "overarching
provision" that informs the more detailed obligations in the succeeding paragraphs of Article 3:
Article 3 as a whole deals with obligations of Members with respect
to the determination of injury. Article 3.1 is an overarching
provision that sets forth a Member's fundamental, substantive
obligation in this respect. Article 3.1 informs the more detailed
obligations in succeeding paragraphs. These obligations concern the
determination of the volume of dumped imports, and their effect on
prices (Article 3.2) … The focus of Article 3 is thus on substantive
obligations that a Member must fulfill in making an injury
determination. 137 (original italics; underlining added)
111. It is clear from the text of Article 3.1 that investigating authorities must ensure that a
"determination of injury" is made on the basis of "positive evidence" and an "objective examination"
of the volume and effect of imports that are dumped—and to the exclusion of the volume and effect
of imports that are not dumped. It is clear from the text of Article 3.2 that investigating authorities
must consider whether there has been a significant increase in dumped imports, and that they must
examine the effect of dumped imports on prices resulting from price undercutting, price depression,
or price suppression.
112. Article 3.5 continues in the same vein as the initial paragraphs of Article 3 by requiring a
demonstration that dumped imports are causing injury to the domestic industry "through the effects of
dumping", which, of course, depends upon there being imports from producers or exporters that are
dumped. In addition, Article 3.5 lists "volume and prices of imports not sold at dumping prices" as
an example of "known factors other than the dumped imports" that are injuring the domestic industry
at the same time as the dumped imports. Article 3.5 requires that this injury not be attributed to the
dumped imports. Thus, injury caused by "volume and prices of imports not sold at dumping prices"
must be separated and distinguished from injury caused by the "dumped imports". None of these
provisions of the Anti-Dumping Agreement can be construed to suggest that Members may include in
the volume of dumped imports the imports from producers that are not found to be dumping.

137Appellate Body Report, Thailand – H-Beams, para. 106.

113. Although paragraphs 1 and 2 of Article 3 do not set out a specific methodology that
investigating authorities are required to follow when calculating the volume of "dumped imports", this
does not mean that paragraphs 1 and 2 of Article 3 confer unfettered discretion on investigating
authorities to pick and choose whatever methodol ogy they see fit for determining the volume and
effects of the dumped imports. Paragraphs 1 and 2 of Article 3 require investigating authorities to
make a determination of injury on the basis of "positive evidence" and to ensure that the injury
determination results from an "objective examination" of the volume of dumped imports, the effects
of the dumped imports on prices, and, ultimately, the state of the domestic industry. Thus, whatever
methodology investigating authorities choose for determining the volume of dumped imports, if that
methodology fails to ensure that a determination of injury is made on the basis of "positive evidence"
and involves an "objective examination" of dumped imports—rather than imports that are found not
to be dumped—it is not consistent with paragraphs 1 and 2 of Article 3.
114. In US – Hot-Rolled Steel, we defined "positive evidence" as follows:
The term "positive evidence" relates, in our view, to the quality of
the evidence that authorities may rely upon in making a
determination. The word "positive" means, to us, that the evidence
must be of an affirmative, objective and verifiable character, and
that it must be credible.
 138 (emphasis added)
In that same appeal, we also defined an "objective examination":
The term "objective examination" aims at a different aspect of the
investigating authorities' determination. While the term "positive
evidence" focuses on the facts underpinning and justifying the injury
determination, the term "objective examination" is concerned with
the investigative process itself. The word "examination" relates, in
our view, to the way in which the evidence is gathered, inquired into
and, subsequently, evaluated; that is, it relates to the conduct of the
investigation generally. The word "objective", which qualifies the
word "examination", indicates essentially that the "examination"
process must conform to the dictates of the basic principles of good
faith and fundamental fairness.
 139 (footnote omitted)

138Appellate Body Report, US – Hot-Rolled Steel, para. 192.
139Ibid., para. 193.

We summed up in that appeal the requirement to conduct an "objective examination" as follows:
In short, an "objective examination" requires that the domestic
industry, and the effects of dumped imports, be investigated in an
unbiased manner, without favouring the interests of any interested
party, or group of interested parties, in the investigation. The duty of
the investigating authorities to conduct an "objective examination"
recognizes that the determination will be influenced by the
objectivity, or any lack thereof, of the investigative process.
 140
(footnote omitted, emphasis added)
We observe that, in response to our questions at the oral hearing, both participants in this appeal
confirmed that they agree with these interpretations of the terms "positive evidence" and an "objective
examination", as set out in US –Hot-Rolled Steel. 141
115. Moreover, at the oral hearing, none of the participants disagreed with the findings of the
original panel and the Article 21.5 Panel relating to the treatment, for purposes of determining injury,
of imports attributed to producers or exporters that were examined individually in an investigation.
Accordingly, if a producer or exporter is found to be dumping, all imports from that producer or
exporter may be included in the volume of dumped imports, but, if a producer or exporter is found
not to be dumping, all imports from that producer or exporter must be excluded from the volume of
dumped imports.
 142
116. The issue raised in this appeal, however, does not relate to imports from producers or
exporters that were examined individually in an investigation. Rather, it relates to the appropriate
treatment of imports from producers or exporters that were not examined individually in such an
investigation. The appeal before us involves an investigation in which individual margins of
dumping have not been determined for each Indian producer exporting to the European
Communities. It is, of course, not necessary under the Anti-Dumping Agreement for investigating
authorities to examine each producer and exporter. The second sentence of Article 6.10 authorizes
investigating authorities, when determining margins of dumping, to limit their examination where
the number of producers or exporters of the product under investigation is so large that the

140Appellate Body Report, US – Hot-Rolled Steel, para. 193.
141These requirements of paragraphs 1 and 2 of Article 3, as well as the requirements of Article 17.6(i),
that investigating authorities establish the facts of the matter properly and evaluate those facts in an unbiased
and objective manner, are mutually supportive and reinforcing. In US – Hot-Rolled Steel , we explained in
respect of Article 17.6(i) that:
… panels must assess if the establishment of the facts by the investigating
authorities was proper and if the evaluation of those facts by those
authorities was unbiased and objective. (original italics)
(Ibid., para. 56)
142Original Panel Report, paras. 6.138-6.140; Panel Report, paras. 6.121 and 6.131.

determination of an individual margin of dumping for each of them would be impracticable. This
limited examination may be conducted in one of two alternative ways identified in Article 6.10: the
authorities may limit their examination "either to a reasonable number of interested parties or products
by using samples which are statistically valid on the basis of information available to the authorities
at the time of the selection, or to the largest percentage of the volume of the exports from the country
in question which can reasonably be investigated."
117. Thus, there is a right to conduct a limited examination in the circumstances described in the
second sentence of Article 6.10. Paragraphs 1 and 2 of Article 3 must, accordingly, be interpreted in a
way that permits investigating authorities to satis fy the requirements of "positive evidence" and an
"objective examination" without having to investigate each producer or exporter individually. This
does not, however, in any way, absolve investigat ing authorities from the absolute requirements in
paragraphs 1 and 2 of Article 3 that the volume of dumped imports be determined on the basis of
"positive evidence" and an "objective examination".
118. We have noted that neither paragraph 1 nor paragraph 2 of Article 3—nor any other provision
of the Anti-Dumping Agreement —sets forth a specific methodology that must be followed by
investigating authorities when calculating the volume of dumped imports for purposes of determining
injury. Still, whatever methodology investigating authorities choose for calculating the volume of
"dumped imports", that calculation and, ultimately, the determination of injury under Article 3, clearly
must be made on the basis of "positive evidence" and involve an "objective examination". These
requirements are not ambiguous, and they do not "admit of more than one permissible interpretation"
within the meaning of the second sentence of Article 17.6(ii). Therefore, as in US – Hot-Rolled
Steel, our interpretation of these requirements is based on customary rules of interpretation of public
international law, as required by the first sentence of Article 17.6(ii).
 143 This leaves no room, in this
appeal, for recourse to the second sentence of Article 17.6(ii) in interpreting paragraphs 1 and 2 of
Article 3.
119. India argues that the European Communities failed to determine the volume of dumped
imports attributable to non-examined producers on the basis of "positive evidence" and an "objective
examination". Although the Indian producers that were examined individually and found to be
dumping accounted for only 47 percent of imports attributable to all examined producers, the
European Communities determined that all imports attributable to non-examined producers were
dumped. India submits that an "objective examination" of the "positive evidence" from examined
producers would lead to the conclusion that the same proportion, that is 47 percent, of imports

143Appellate Body Report, US – Hot-Rolled Steel, para. 130.

attributable to non-examined producers were dumped. The European Communities contends that its
conclusion, for purposes of determining injury, that all imports attributable to non-examined
producers are dumped, is based on "positive evidence" and an "objective examination", as required by
paragraphs 1 and 2 of Article 3, because it is justified by Article 9.4. Article 9.4 defines the
maximum anti-dumping duty that may be applied to imports from producers for which an individual
dumping margin has not been separately calculated—commonly referred to as the "all others" duty
rate.
 144 The European Communities argues that, inasmuch as Article 9.4 does not limit the volume
of imports from non-examined producers to which the "all others" duty rate may be applied, the
practice of the European Communities must be permissible because the volume of imports subject to
anti-dumping duties under Article 9 must be the same as the volume considered to be dumped for
purposes of determining injury under Article 3. 145
120. Regarding the requirement of "positive evid ence", the European Communities maintains that
it determined the volume of dumped imports on the basis of "positive evidence" under Article 3
because its investigating authorities calculated the "all others" duty rate under Article 9.4 on the basis
of the weighted average of the dumping margins established for the three producers that were
examined and found to be dumping. Regarding the requirement of an "objective examination", the
European Communities points to the fact that Article 9.4 permits the imposition of the "all others"
duty rate on all imports from all non-examined producers, and argues on this basis that the
European Communities is entitled to include all imports from non-examined producers in the

144Article 9.4 of the Anti-Dumping Agreement reads:
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 or,
(ii) where the liability for payment of anti-dumping duties is calculated
on the basis of a prospective normal value, the difference between
the weighted average normal value of the selected exporters or
producers and the export prices of exporters or producers not
individually examined,
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)
145European Communities' statement at the oral hearing.

volume of dumped imports, when determining injury under Article 3. 146 In the view of the European
Communities, this approach must necessarily const itute an "objective examination" for purposes of
Article 3 because, if this approach were not "objective and unbiased" 147, the drafters of the
Anti-Dumping Agreement would not have adopted it in Article 9.4. Accordingly, the European
Communities concludes that the approach applied in this investigation satisfies the requirements of
paragraphs 1 and 2 of Article 3 to base the determination of the volume of dumped imports and,
ultimately, the determination of injury, on "positive evidence" and an "objective examination".
121. India rejects the European Communities' interpretation of the "volume of dumped imports" in
Article 3 as including the volume of imports subject to the application of the "all others" duty rate
under Article 9.4. India submits that the determination of the dumping "margin" is separate and
distinct from the imposition and collection of anti-dumping "duties".
 148 In India's view, Article 9.4
comes into play only after the investigating authorities have determined that all the conditions for the
imposition of anti-dumping duties (namely, dumping, injury, and causation) have been fulfilled.
According to India, Article 9.4 cannot be read to permit a derogation from the explicit requirements of
paragraphs 1 and 2 of Article 3, namely that a determination of injury must be made on the basis of
"positive evidence" and an "objective examination" of the volume and the effect of the dumped
imports.
122. We turn now to an examination of Article 9, entitled "Imposition and Collection of Anti-
Dumping Duties". Article 9.1 confers on Members the discretion to decide whether to impose an anti-
dumping duty in cases where all the requirements for such imposition " have been fulfilled
 ". 149
Where these requirements " have been fulfilled " 150, Article 9.4 defines the maximum anti-dumping
duty that may be applied to exports from producers not individually examined when the investigating

146Consistent with Article 9.4, the investigating authorities excluded from the calculation of that
weighted average the negative or zero dumping margins established for the two examined producers that were
found not to be dumping.
147European Communities' statement at the oral hearing.
148India's appellant's submission, para. 32. India also argues that the European Communities and the
Panel confuse the imposition of dumping duties with the calculation of dumping margins. (See Panel Report,
paras. 6.137-6.138)
149Article 9.1 of the Anti-Dumping Agreement reads in relevant part:
The decision whether or not to impose an anti-dumping duty in cases where
all requirements for the imposition have been fulfilled , and the decision
whether the amount of the anti-dumping duty to be imposed shall be the full
margin of dumping or less, are decisions to be made by the authorities of the
importing Member. (emphasis added)
150Article 9.1 also entitles Members to decide whether to impose an anti-dumping duty in the full
amount of the margin of dumping, or a "lesser duty".

authorities " have limited " their examination in accordance with either alternative provided in the
second sentence of Article 6.10. 151
123. Japan contended in its third party submission, and also in its statement at the oral hearing, that
the use of the present perfect tense in paragraphs 1 and 4 of Article 9 ("have been fulfilled" and "have
limited") is significant. 152 In our view, too, the use by the drafters of the present perfect tense is
significant; it indicates that the imposition and collection of anti-dumping duties under Article 9 is a
separate and distinct phase of an anti-dumping action that necessarily occurs after the determination
of dumping, injury, and causation under Articles 2 and 3 has been made.
 153 Members have the right
to impose and collect anti-dumping duties only after the completion of an investigation in which it
has been established that the requirements of dumping, injury, and causation " have been fulfilled ".
In other words, the right to impose anti-dumping duties under Article 9 is a consequence of the prior
determination of the existence of dumping margins, injury, and a causal link. The determination, by
the investigating authorities of a Member, that there is injury caused by a certain volume of dumping
necessarily precedes and gives rise to the consequential right to impose and collect anti-dumping
duties.
 154
124. When examining the practice of "zeroing" in the original dispute, we noted that the
requirements of Article 9 do not have a bearing on Article 2.4.2, because the rules on the
determination of the margin of dumping are distinct and separate from the rules on the imposition
and collection of anti-dumping duties.
 155 Similarly, in this implementation dispute, we are of the
view that Article 9.4, which specifies what action may be taken only after certain prerequisites have

151Appellate Body Report, US – Hot-Rolled Steel, para. 116.
152Japan's third participant's submission, paras. 4 ff.
153According to Article 33.3 of the Vienna Convention on the Law of Treaties, where treaties have
been authenticated in two or more languages, "[t]he te rms of the treaty are presumed to have the same meaning
in each authentic text." The Spanish terms ("se han cumplido" and "hayan limitado"), in paragraphs 1 and 4 of
Articles 9, have the same temporal meaning as the English terms ("have been fulfilled" and "have limited").
The French terms ("sont remplies" and "auront limité") can also accommodate this temporal meaning.
154Korea too rejects the European Communities' inte rpretation that all imports from non-examined
producers subject to the "all others" duty rate under Article 9.4 may be treated as dumped imports for purposes
of Article 3. (Korea's statement at the oral hearing)
155In EC – Bed Linen, we noted that:
… Article 2.4.2 is not concerned with the collection of anti-dumping duties,
but rather with the determination of "the existence of margins of dumping".
Rules relating to the "prospective" and "retrospective" collection of anti-
dumping duties are set forth in Article 9 of the Anti-Dumping Agreement .
The European Communities has not shown how and to what extent these
rules on the "prospective" and "retrospective" collection of anti-dumping
duties bear on the issue of the establishment of "the existence of dumping
margins" under Article 2.4.2.
(Appellate Body Report, EC – Bed Linen, footnote 30 to para. 62)

been determined, is of little relevance for interpreting Article 3, which sets out those prerequisites.
We do not see how Article 9.4, which authorizes the imposition of a certain maximum anti-dumping
duty on imports from non-examined producers, is relevant for interpreting paragraphs 1 and 2 of
Article 3, which deal with the determination of injury based on the volume of "dumped imports".
Paragraphs 1 and 2 of Article 3 make no reference at all to Article 9.4, or to the specific methodology
set out in Article 9.4 for calculating the "all others" duty rate, which comes into play only when
imposing and collecting anti-dumping duties. Likewise, Article 9.4 does not mention the term
"dumped imports" or the "volume" of such imports. In our view, the right to impose a certain
maximum amount of anti-dumping duties on imports attributable to non-examined producers under
Article 9.4 cannot be read as permitting a derogation from the express and unambiguous requirements
of paragraphs 1 and 2 of Article 3 to determine the volume of dumped imports—including dumped
import volumes attributable to non-examined producers—on the basis of "positive evidence" and an
"objective examination". Thus, we see no basis for the European Communities' view that Article 9.4
establishes a methodology for calculating the volume of dumped imports from non-examined
producers for purposes of determining injury on the basis of "positive evidence" and an "objective
examination" under paragraphs 1 and 2 of Article 3.
125. Moreover, Article 9.4, which relates to the imposition of anti-dumping duties on imports from
non-examined producers, has, by its own terms, a limited purpose as an exception to the rule in
Article 9.3. Article 9.3 provides that "[t]he amount of the anti-dumping duty shall not exceed the
margin of dumping as established under Article 2."
 156 When individual dumping margins are
determined for each producer or exporter, the volume of imports attributable to producers that were
examined individually and found to be dumping will match the volume of imports attributable to
those producers for which anti-dumping duties are collected. However, as noted earlier, where the
determination of individual dumping margins for each producer is impracticable, the second
sentence of Article 6.10 permits investigating author ities—as an exception to the rule in the first
sentence of Article 6.10
 157—to limit their examination to some—and not all—producers. In such
cases, as an exception to the rule in Article 9.3, Article 9.4 permits the imposition of a certain
maximum amount of anti-dumping duties on imports attributable to producers that were not

156As a result, the amount of the anti-dumping duty collected from the individually-examined producer
will correspond to the individually-calculated dumping margin. Pursuant to Article 9.1, the investigating
authorities may decide, however, that it is sufficient to apply a duty of less than the dumping margin.
157The first sentence of Article 6.10 requires, "as a rule", that individual dumping margins be
established for each producer or exporter.

examined individually 158, irrespective of whether those producers would have been found to be
dumping had they been examined individually. It is likely, therefore, that this "all others" duty rate
will be imposed on imports attributable at least to some producers that, in reality, might not be
dumping. Hence, the reliance by the European Communities on Article 9.4, in interpreting
paragraphs 1 and 2 of Article 3, is misplaced.
126. In sum, Article 9.4 provides no guidance for determining the volume of dumped imports from
producers that were not individually examined on the basis of "positive evidence" and an "objective
examination" under Article 3. The exception in Article 9.4, which authorizes the imposition of anti-
dumping duties on imports from producers for which no individual dumping margin has been
calculated, cannot be assumed to extend to Article 3, and, in particular, in this dispute, to
paragraphs 1 and 2 of Article 3. For the same reasons, we do not see why the volume of imports that
has been found to be dumped by non-examined producers, for purposes of determining injury under
paragraphs 1 and 2 of Article 3, must be congruent with the volume of imports from those non-
examined producers that is subject to the imposition of anti-dumping duties under Article 9.4, as
contended by the European Communities and the Panel.
 159
127. Having concluded that Article 9.4 does not provide justification for considering all imports
from non-examined producers as dumped for purposes of Article 3, we turn now to consider
whether the European Communities' determination of the volume of dumped imports and, ultimately,
of injury, in this investigation, was in accordance with paragraphs 1 and 2 of Article 3. To do so, we
must examine whether this determination was made on the basis of "positive evidence" and involved
an "objective examination" of the volume of dumped imports and their effect on prices and on
domestic producers.
128. As we have already noted, it is not in dispute between the participants that the evidence from
the five examined Indian producers exporting to the European Communities shows that the
producers accounting for 47 percent of all imports attributable to all examined producers were found
to be dumping; nor is it in dispute that the evidence also shows that the producers accounting for 53
percent of those imports were found not to be dumping.
 160 The European Communities confirmed at

158According to Article 9.4(i), this so-called "all others" duty rate for non-examined producers may be
based on the weighted average of more than de minimis dumping margins of producers and exporters selected
for individual examination pursuant to the second sentence of Article 6.10. Margins established under the
circumstances referred to in Article 6.8 shall also be disregarded in calculating this weighted average.
Article 9.4(ii) provides for a different calculation method for cases where the liability for payment of anti-
dumping duties is calculated on the basis of a prospective normal value.
159European Communities' statement at the oral hearing; Panel Report, para. 6.141.
160However, the European Communities believes that Article 9.4 entitles it in any event to treat all
imports subject to the "all others" duty rate as "dumped imports" for purposes of Article 3.

the oral hearing that the evidence from the five examined producers is the entirety of the evidence on
which the determination by the European Communities of the volume of dumped imports (attributable
to examined and non-examined producers) was based
 161; thus, the participants agree that there is no
other evidence on the record of this investigation that could serve as "positive evidence" for
determining the volume of dumped imports. Therefore, it is undisputed that the only available
evidence for determining which import volumes can be attributed to non-examined producers that are
dumping is the evidence obtained from the five examined producers.
129. We observe that, in other anti-dumping investigations, there may be different and additional
types of evidence that properly could be considered as "positive evidence" and relied upon when
determining, on the basis of an "objective examination", the volume of dumped imports.
 162 T h a t ,
however, is not the case before us.
130. In this dispute, we agree with the participants that the evidence on dumping margins
established for the producers that were examined individually is "positive" in the sense that we
defined it in US – Hot-Rolled Steel , namely that it is "affirmative, objective, verifiable, and
credible". 163 We also agree with India that evidence on dumping margins of more than de minimis
for examined producers is relevant as "positive evid ence" in this investigation for determining which
import volumes may be attributed to non-examined producers that are dumping. 164 I n o u r v i e w ,
both these qualities of evidence are probative of the existence of dumping in the circumstances of this
investigation. Therefore, we conclude that th e European Communities met the first requirement of
paragraphs 1 and 2 of Article 3 by basing its determination on that "positive evidence".
131. Having established this, we must next assess whether the determination at issue of the
volume of dumped imports attributable to non-examined producers was based on an "objective
examination" of that positive evidence. India argues that, in the light of the facts of this dispute,
an "objective examination" could not have led the European Communities to conclude that all
imports attributable to non-examined producers were dumped; nor, India argues, could an "objective
examination" have led to the conclusion in the redetermination that 86 percent of total imports from

161European Communities' responses to questioning at the oral hearing.
162In response to questioning at the oral hearing, th e United States referred, for example, to evidence
such as witness testimony and different types of docum entary evidence about critical aspects of the market,
conditions of competition, production characteristics, and statistical data relating to the volume, prices, and
effects of imports. In the circumstances of a specific investigation, such categories of evidence may qualify as
affirmative, objective, and verifiable, and thus form part of the "positive evidence" that an investigating
authority may properly take into account when determining, on the basis of an "objective examination", whether
or not imports from non-examined producers are being dumped.
163India's and the European Communities' responses to questioning at the oral hearing; Appellate Body
Report, US – Hot-Rolled Steel, para. 192.

all examined and non -examined Indian producers were dumped. 165 The European Communities
contends that import volumes subject to the "all others" duty rate under Article 9.4 may be considered
as "dumped imports" under paragraphs 1 and 2 of Article 3. As explained earlier, the European
Communities is of the view that the approach authorized under Article 9.4 meets the "objective
examination" requirement of Article 3.1.
132. We disagree with the European Communities. We recall our statement in US – Hot-Rolled
Steel that:
… the investigating authorities' evaluation of the relevant factors
must respect the fundamental obligation, in Article 3.1, of those
authorities to conduct an "objective examination". If an examination
is to be "objective", the identification, investigation and evaluation of
the relevant factors must be even-handed. Thus, investigating
authorities are not entitled to conduct their investigation in such a
way that it becomes more likely that, as a result of the fact-finding
or evaluation process, they will determine that the domestic industry
is injured.
 166 (emphasis added)
The approach taken by the European Communities in determining the volume of dumped imports was
not based on an "objective examination". The examination was not "objective" because its result is
predetermined by the methodology itself. Under the approach used by the European Communities,
whenever the investigating authorities decide to limit the examination to some, but not all,
producers—as they are entitled to do under Article 6.10— all imports from all non -examined
producers will necessarily always be included in the volume of dumped imports under Article 3, as
long as any of the producers examined individually were found to be dumping. This is so because
Article 9.4 permits the imposition of the "all others" duty rate on imports from non-examined
producers, regardless of which alternative in the second sentence of Article 6.10 is applied. In other
words, under the European Communities' approach, imports attributable to non-examined producers
are simply presumed, in all circumstances, to be dumped, for purposes of Article 3, solely because
they are subject to the imposition of anti-dumping duties under Article 9.4. This approach makes it
"more likely [that the investigating authorities] will determine that the domestic industry is

165In their alternative calculation, the European Communities' investigating authorities deducted from
the volume of dumped imports the imports attributable to the two Indian producers that were examined
individually and found not to be dumping. (EC Regulation 1644/2001, recital (22)) According to India, the
result of this deduction was that 86 percent of total imports from India by examined and non-examined
producers and exporters were found to be dumped. The European Communities has not challenged this
calculation by India. It believes, however, that the calculation is irrelevant, because Article 9.4 entitles it to
subject all imports from non-examined producers to the "all others" duty rate and to treat the same import
volumes as dumped for purposes of determining injury under Article 3.
166Appellate Body Report, US – Hot-Rolled Steel, para. 196.

injured" 167, and, therefore, it cannot be "objective". Moreover, such an approach tends to favour
methodologies where small numbers of producers are examined individually. This is because the
smaller the number of individually-examined producers, the larger the amount of imports
attributable to non-examined producers, and, therefore, the larger the amount of imports presumed
to be dumped. Given that the Anti-Dumping Agreement generally requires examination of all
producers, and only exceptionally permits examination of only some of them, it seems to us that the
interpretation proposed by the European Communities cannot have been intended by the drafters of
the Agreement.
133. For these reasons, we conclude that the European Communities' determination that all
imports attributable to non-examined producers were dumped—even though the evidence from
examined producers showed that producers accounting for 53 percent of imports attributed to
examined producers were not dumping—did not lead to a result that was unbiased, even-handed, and
fair.
 168 Therefore, the European Communities did not satisfy the requirements of paragraphs 1 and 2
of Article 3 to determine the volume of dumped imports on the basis of an examination that is
"objective".
134. India also challenges the Panel's finding relating to Article 6.10. 169 As we have indicated, in
this investigation, the European Communities did not determine individual dumping margins for each
Indian producer exporting bed linen to the European Communities, as permitted by Article 6.10. The
Panel found that the European Communities chose the second alternative in Article 6.10, and limited
its examination to producers and exporters representin g the largest percentage of the volume of the
exports from India that could reasonably be investigated.
 170
135. On appeal, India asks us to find that the European Communities chose, instead, the first
option in Article 6.10, and selected for individual examination a "statistically valid sample"

167Appellate Body Report, US – Hot-Rolled Steel, para. 196.
168Ibid., paras. 193-194 and 196.
169Article 6.10 reads in relevant part:
The authorities shall, as a rule, determine an individual margin of dumping
for each known exporter or producer concerned of the product under
investigation. In cases where the number of exporters, producers,
importers or types of products involved is so large as to make such a
determination impracticable, the authorities may limit their examination
either to a reasonable number of interested parties or products by using
samples which are statistically valid on the basis of information available
to the authorities at the time of the selection, or to the largest percentage of
the volume of the exports from the country in question which can
reasonably be investigated. (emphasis added)
170Panel Report, para. 6.135.

representative of all Indian producers exporting to the European Communities. 171 In India's view,
the proportion of dumped imports attributable to examined producers is even more relevant for
determining, on the basis of "positive evidence" and an "objective examination", the volume of
dumped imports attributable to non-examined producers, when the examined producers are found to
constitute a statistically valid sample representative of all Indian producers. The European
Communities contends that the Panel's finding that the investigating authorities applied the second
alternative in Article 6.10 is a factual finding beyond appellate review. In the alternative, the
European Communities maintains that its investigat ing authorities relied upon the second alternative
and examined the largest percentage of the volume of exports which could reasonably be investigated.
136. Article 6 is entitled "Evidence", and there is no indication in Article 6—or elsewhere in the
Anti-Dumping Agreement—that Article 6 does not apply generally to matters relating to "evidence"
throughout that Agreement. Therefore, it seems to us that the subparagraphs of Article 6 set out
evidentiary rules that apply throughout the course of an anti-dumping investigation, and provide also
for due process rights that are enjoyed by "interested parties" throughout such an investigation.
137. Turning to that part of Article 6 referred to by India, we note that Article 6.10 deals
specifically with the determination of margins of dumping. Clearly, it does not stipulate that
investigating authorities must follow a specific methodology when determining the volume of
dumped imports under paragraphs 1 and 2 of Article 3. However, this does not mean that evidence
emerging from the determination of margins of dumping for individual producers or exporters
pursuant to Article 6.10 is irrelevant for the determination of the volume of dumped imports in
paragraphs 1 and 2 of Article 3. To the contrary, such evidence may well form part of the "positive
evidence" on which an "objective examination" of the volume of dumped imports for purposes of
determining injury may be based. Indeed, in cases where the examination has been limited to a select
number of producers under the authority of the second sentence of Article 6.10, it is difficult to
conceive of a determination based on "positive evidence" and an "objective examination" that is made
other than through some form of extrapolation of the evidence. This could be done, for example, by
extrapolating from the import volumes attributed to examined producers found to be dumping to the
import volumes attributed to non-examined producers. We recall that we considered that evidence on
dumping margins of more than de minimis for examined producers is relevant as "positive
evidence" in this investigation for determinin g which import volumes may be attributed to non-
examined producers that are dumping.

171India's appellant's submission, paras. 27-29.

138. India's suggestion that the investigating authorities should consider the same proportion of
import volumes attributable to non-examined producers as dumped, as the proportion of import
volumes attributed to examined producers that were found to be dumping, may be one way of
adducing "positive evidence" from the record of an investigation and of conducting an "objective
examination", especially if producers selected for individual examination constitute a statistically
valid sample representative of all producers. Even if the producers selected for individual
examination account, instead, for the largest percentage of exports that could reasonably be
investigated, we do not exclude the possibility that the evidence from those examined producers
could, nonetheless, qualify as part of the "positive evidence" that might serve as a basis for an
"objective examination" of import volumes th at can be attributed to the remaining non-examined
producers. There may, indeed, be other ways of making these calculations that satisfy the
requirements of paragraphs 1 and 2 of Article 3.
139. Although Article 6.10 is relevant from an eviden tiary point of view, it is, nevertheless, as we
explain below, not necessary here for us to decide whether the Indian producers and exporters
selected for individual examination in this investigation constitute a "statistically valid sample" or "the
largest percentage of the volume of exports" within the meaning of the second sentence of
Article 6.10. In this respect, we recall the European Communities' argument that import volumes
subject to the "all others" duty rate under Article 9.4 may be considered as dumped imports when
determining injury under Article 3. As we have explained, Article 9.4 permits the imposition of the
"all others" duty rate on imports from non-examined producers, regardless of whether those producers
were excluded from individual examination on the basis of the first, or the second, alternative in
Article 6.10. We have already concluded that imports attributable to non-examined producers that
are subject to the "all others" duty rate under Article 9.4 cannot simply be presumed to be dumped for
purposes of determining injury under Article 3. Our conclusion was not premised on whether
producers were excluded from individual examination on the basis of the first, or the second,
alternative in Article 6.10. Therefore, our ruling that the European Communities failed to determine
the volume of dumped imports with respect to non-examined producers on the basis of "positive
evidence" and an "objective examination", as required by paragraphs 1 and 2 of Article 3, is not
premised on which of the alternatives in Article 6.10 for limiting the examination was chosen by the
European Communities in this investigation. For this reason, we decline to reverse, as requested by
India, the finding of the Panel, in paragraph 6.135 of the Panel Report, that the European
Communities chose here the second alternative under the second sentence of Article 6.10, because it
is not necessary to make such a finding to resolve the issue in dispute here. Accordingly, it is not
necessary for us to decide whether that finding was exclusively a factual one and is, therefore, beyond
the scope of appellate review.

140. Finally, we turn to the arguments of the third participants in this dispute. Japan and Korea
agree with India that the European Communities' determination of the volume of dumped imports in
this investigation is not consistent with paragraphs 1 and 2 of Article 3. Our earlier discussion, in
particular of Article 9, addresses in detail the arguments of Japan and Korea.
 172 In contrast to Japan
and Korea, the United States maintains, for its pa rt, that the European Communities' determination of
the volume of "dumped imports" is consistent with paragraphs 1 and 2 of Article 3. According to the
United States, in addition to Article 9, Articles 2.1 and 3.3 are also significant for interpreting the
volume of "dumped imports" in paragraphs 1 and 2 of Article 3.
141. The United States asserts that "Article 2.1 … defines dumped products '[f]or the purpose of
[the AD] Agreement', on a countrywide basis."
 173 In the view of the United States, "that phrase from
the beginning to the end refers only to countries and products. It does not refer to producers." 174
Therefore, according to the United States, "the re ferences to 'dumped imports' in Articles 3.1 and 3.2
and throughout Article 3 refer to all imports of the product from the countries subject to the
investigation." 175 In other words, when determining injury, "the concept of whether or not there are
dumped imports is country-specific." 176
142. We do not agree. Article 2.1 reads:
Determination of Dumping
For the purpose of this Agreement, a product is to be considered as
being dumped, i.e. introduced into the commerce of another country
at less than its normal value, if the export price of the product
exported from one country to another is less than the comparable
price, in the ordinary course of trade, for the like product when
destined for consumption in the exporting country.
Nowhere in the text of Article 2.1 is there authority for treating all imports from non-examined
producers as dumped for purposes of determining injury under Article 3. The subsequent paragraphs
of Article 2 set out in detail how the export price, normal value and, thus, the margins of dumping, are
to be established for specific producers or exporters. Nowhere in those paragraphs is there authority
for treating imports from non-examined producers as dumped for purposes of determining injury
under Article 3.

172See supra, paras. 123 ff.
173United States' third participant's submission, para. 2. (original italics; underlining added)
174United States' response to questioning at the oral hearing.
175United States' third participant's submission, para. 2.
176United States' response to questioning at the oral hearing.

143. As we have explained, under Article 6.10, dumping margins are to be established for each
producer and exporter or, if impracticable, for some of them. We have explained that Article 9
permits the imposition and collection of anti-dumping duties on imports from specific producers or
exporters, or groups thereof. We also recall that the original panel confirmed that "dumping is a
determination made with reference to a product from a particular producer [or] exporter, and not with
reference to individual transactions".
 177 We see no conflict between the provisions requiring
producer-specific determinations and the need to ca lculate, for purposes of determining injury, the
total volume of dumped imports from producers or exporters originating in a particular exporting
country as a whole. This can be done, and has to be done, by adding up the volume of imports
attributable to producers or exporters that ar e dumping, whether on the basis of an individual
examination or on the basis of an extrapolation. Further, we see nothing in the text of Article 2.1 that
permits a derogation from the express requirements in paragraphs 1 and 2 of Article 3 to determine
the volume of dumped imports on the basis of "positive evidence" and an "objective examination".
144. The United States also argues that the interpretation that all imports attributable to non-
examined producers may be considered as "dumped" is necessary to give meaning and effect to
Article 3.3.
 178 This provision concerns situations where an importing country conducts an anti-
dumping investigation with respect to imports of a product from more than one exporting country. 179
Article 3.3 defines the circumstances where the investigating authorities may cumulatively assess the
volume and price effects of imports from different exporting countries. The United States argues
that it would create an anomaly if, in multi-country investigations, authorities are entitled to assess the
effects of all imports from the subject country, "as long as each countrywide margin was more than
de minimis", while, under India's theory, in single-country investigations, authorities, finding no

177Original Panel Report, para. 6.136. Thus, we agree with the United States' argument that import
transactions attributable to a particular producer or exporter need not be separated into two categories—dumped
and non-dumped transactions. (United States' third participant's submission, para. 3)
178United States' third participant's submission, para. 17.
179Article 3.3 of the Anti-Dumping Agreement reads:
Where imports of a product from more than one country are simultaneously
subject to anti-dumping investigations, the investigating authorities may
cumulatively assess the effects of such imports only if they determine that
(a) the margin of dumping established in relation to the imports from each
country is more than de minimis as defined in paragraph 8 of Article 5 and
the volume of imports from each country is not negligible and
(b) a cumulative assessment of the effects of the imports is appropriate in
light of the conditions of competition between the imported products and the
conditions of competition between the imported products and the like
domestic product.

dumping for an individual company, "would be requ ired to disregard some of the imports covered by
the countrywide margin". 180
145. India's appeal does not extend to the requiremen ts of Article 3.3. We do not see, however,
how the cumulative assessment of the effects of imports from different exporting countries under
Article 3.3 implies that all imports attributable to non-examined producers must be considered as
dumped for purposes of determining injury. The investigation and the cumulation of dumped
imports from different countries for purposes of determining injury can be carried out in conformity
with the producer-specific provisions of the Anti-Dumping Agreement, even when several countries
are involved.
 181 The provisions regarding the cumulative assessment of imports pursuant to
Article 3.3 must be interpreted consistently with the provisions of the Anti-Dumping Agreement that
deal with the determinations of dumping margins or the application of anti-dumping duties with
respect to specific producers or groups thereof. Similarly, the right under Article 3.3 to conduct anti-
dumping investigations with respect to imports from different exporting countries does not absolve
investigating authorities from the requirements of paragraphs 1 and 2 of Article 3 to determine the
volume of dumped imports on the basis of "positive evidence" and an "objective examination".
146. For these reasons, we are of the view that the Panel has not properly interpreted paragraphs 1
and 2 of Article 3 in applying those provisions in this implementation dispute. Therefore, we
conclude that, with respect to import volumes attributable to producers or exporters that were not
examined individually in this investigation, the European Communities has failed to determine the
"volume of dumped imports" on the basis of "positive evidence" and an "objective examination" as
explicitly required by the text of paragraphs 1 and 2 of Article 3 of the Anti-Dumping Agreement.
However, we agree with the Panel "that the [Anti-Dumping] Agreement does not require an
investigating authority to determine the volume of imports from producers outside the sample that is
properly considered 'dumped imports' for purposes of injury analysis on the basis of the proportion of
imports from sampled producers that is found to be dumped"
 182 according to the specific
methodology suggested by India in this appeal. For these reasons, we reverse the Panel's finding, in
paragraph 6.144 of the Panel Report, and find that the European Communities has acted inconsistently
with the requirements of paragraphs 1 and 2 of Article 3 of the Anti-Dumping Agreement.

180United States' third participant's submission, para. 18.
181Accordingly, as explained earlier, imports attributable to producers or exporters who were
individually examined and for which, consistently with the Anti-Dumping Agreement , a positive dumping
margin (more than de minimis) was found, may be included in the calculation of the volume of dumped
imports; imports attributable to individually-examined producers or exporters for which no such dumping
margin was found must be excluded from that calculation.
182Panel Report, para. 6.144. (original boldface)

VI. Article 17.6 of the Anti-Dumping Agreement and Article 11 of the DSU
A. Introduction
147. India claims on appeal that the Panel failed to comply with the requirements of Article 17.6 of
the Anti-Dumping Agreement and of Article 11 of the DSU in concluding that the European
Communities did have information before it on all relevant economic factors listed in Article 3.4 of
the Anti-Dumping Agreement when making its determination of injury. 183 India alleges, in
particular, that the European Communities did not have such information, because the European
Communities failed to collect data on stocks and capacity utilization. India requests us to conclude
that the Panel did not comply with the requirements of Article 17.6 of the Anti-Dumping Agreement
and of Article 11 of the DSU, and, consequently, to reverse the Panel's finding that the European
Communities acted consistently with paragraphs 1 and 4 of Article 3 of the Anti-Dumping
Agreement. 184
148. Before examining India's arguments on appeal, we will recall briefly the findings of the
original panel and of the Article 21.5 Panel on this issue, as far as they are relevant to the issue raised
on appeal.
149. India claimed before the original panel that the European Communities did not examine all
relevant economic factors having a bearing on the state of the industry and, therefore, failed to act
consistently with its obligations under Article 3.4 of the Anti-Dumping Agreement.
 185 The original
panel stated that it appeared from the European Communities' regulation imposing provisional anti-
dumping measures that data had not been collected for all relevant economic factors listed in
Article 3.4, and that, "[w]hile some of the data collected … may have included data for the factors not
mentioned, we cannot be expected to assume that this was the case without some indication to that
effect in the determination."
 186 The original panel then found that:

184Ibid.
185Original Panel Report, para. 6.145.
186Ibid., para. 6.167. The Regulation which imposed provisional anti-dumping duties is Commission
Regulation (EC) No 1069/97, 12 June 1997, imposing a provisional anti-dumping duty on imports of cotton-
type bed linen originating in Egypt, India and Pakistan, published in the Official Journal of the European
Communities, 13 June 1997, L-series, No. 156 ("EC Regulation 1069/97"). Council Regulation (EC) No
2398/97, 28 November 1997, imposing a definitive anti-dumping duty on imports of cotton-type bed linen
originating in Egypt, India and Pakistan, published in the Official Journal of the European Communities, 4
December 1997, L-series, No. 332 ("EC Regulation 2398/97"), refers, in part, to the findings contained in
EC Regulation 1069/97.

… where factors set forth in Article 3.4 are not even referred to in the
determination being reviewed, if there is nothing in the determination
to indicate that the authorities considered them not to be relevant, the
requirements of Article 3.4 were not satisfied. 187
150. The European Communities did not appeal this finding of the original panel. In the
redetermination—EC Regulation 1644/2001—the European Communities addressed the relevant
economic factors listed in Article 3.4, including stocks and capacity utilization, on the basis of
information that it had collected during the orig inal investigation. It is undisputed between the
participants that the European Communities did not collect additional data for purposes of the
redetermination.
 188
151. Before the Article 21.5 Panel, India alleged that the European Communities had "never"
collected data on stocks and capacity utilization, and also that the European Communities had not
properly carried out an overall re-evaluation of those factors. 189 The Panel rejected both arguments.
India has not appealed the Panel's finding with respect to the adequacy of the evaluation.
152. In rejecting India's claim that the European Communities had not collected information on all
relevant economic factors listed in Article 3.4, the Panel found that:
It is thus apparent to us, on the face of the redetermination, that the
EC did, in fact, have information on the Article 3.4 factors, which is
specifically addressed. Thus, we find this no basis as a matter of fact
for this aspect of India's claim. 190

187Original Panel Report, para. 6.168.
188Panel Report, para. 6.165.
189Ibid., paras. 6.146-6.150.
190Ibid., para. 6.169.

153. In reaching this conclusion, the Panel first stated that India had misunderstood the "import"
and "context" of the statement of the original panel that, in India's view, suggested that data had not
been collected. 191 The Panel then went on to clarify the meaning of that statement as follows:
Contrary to India's understanding, the original Panel did not find, as
a matter of fact or law, that no information had been collected on
certain of the Article 3.4 factors. Rather, as alluded to by the EC, the
Panel was making an observation as to the lack of any basis, on the
face of the provisional and definitive Regulations, for a conclusion
that certain of the factors had actually been considered by the EC
authorities in making their determination. Indeed, the Panel
specifically went on to note that, in the absence of any reference to
the relevant information in the Regulations, it was not willing to
assume that such data had been considered.
 192 (original boldface;
footnote omitted)
154. The Panel concluded that it was clear that the European Communities had "in its record"
information on stocks and capacity utilization—the two factors India had focused on—and that
"unlike the original determination, the EC's consideration of these factors is clearly set out on the face
of the redetermination."
 193
155. India appeals from this finding of the Panel, arguing, first, that the Panel failed to meet its
obligations under Article 11 of the DSU by incorrectly applying the rules on burden of proof that we
set out in US – Wool Shirts and Blouses . 194 India argues that it had presented a prima facie case

191Panel Report, para. 6.164. The full paragraph containing the original panel's statement at issue is
reproduced below. India relies on the sentence in italics:
It appears from this listing that dat a was not even collected for all the
factors listed in Article 3.4, let alone evaluated by the EC investigating
authorities. Surely a factor cannot be evaluated without the collection of
relevant data. While some of the data collected for the factors that are
mentioned in the Provisional Regulation by the EC authorities may have
included data for the factors not me ntioned, we cannot be expected to
assume that this was the case without some indication to that effect in the
determination. Nor is the relevance or lack thereof, as assessed by the EC
authorities, of the factors not mentioned under the heading "Situation of the
Community industry" at all apparent from the determination.
(Original Panel Report, para. 6.167) (emphasis added)
192Panel Report, para. 6.164.
193Ibid., para. 6.167.
194Appellate Body Report, US – Wool Shirts and Blouses, at 335.

that data on a number of injury factors had never been collected and that, therefore, the Panel should
have shifted the burden of proof to the European Communities to rebut that prima facie case. 195
156. In the alternative, India submits that the Panel distorted the evidence by accepting for a fact
the "mere" assertion by the European Communities, in EC Regulation 1644/2001, that it had collected
data on all relevant economic factors, including stocks and capacity utilization. 196 India argues that
this constitutes a failure by the Panel to make an objective assessment of the matter, including an
objective assessment of the facts of the case, as required by Article 11 of the DSU.
 197
157. Regarding Article 17.6 of the Anti-Dumping Agreement, India argues that the Panel failed to
"actively" review the facts, pursuant to subparagraph (i) of that provision, as we interpreted it in
US – Hot-Rolled Steel .
 198 India asserts that, by refusing India's request for the Panel to use its
investigative powers under Article 13 of the DSU, and by concluding that the European Communities
had the data in the record of the investigation without offering any real proof or reasoning to support
such a conclusion, the Panel failed to comply with Article 17.6(i) of the Anti-Dumping Agreement.
 199
158. In reply, the European Communities contends that the Panel properly discharged its duties
under Article 11 of the DSU and Article 17.6 of the Anti-Dumping Agreement in concluding that the
European Communities did have information before it on all the relevant economic factors listed in
Article 3.4 of the Anti-Dumping Agreement, including stocks and capacity utilization, when making
its injury determination. The European Communities asserts that the Panel correctly applied the rules
on the burden of proof. 200 The European Communities denies that EC Regulation 1644/2001 contains
"mere" assertions and notes that, although India alleges that the Panel distorted the evidence, India
concedes that the Panel has not committed an egregious error calling into question its good faith.
 201
The European Communities also contends that th e Panel could not have failed to comply with

195India alleges that it had established a prima facie case by: (i) pointing to the statement made by the
original panel to the effect that the panel could not as sume that data on certain injury factors was collected
where it was not mentioned in the final determination; (ii) showing that the non-confidential replies to the
questionnaires sent by the European Communities to its domestic producers did not contain such
data; (iii) indicating that EC Regulation 1644/2001 does not contain facts or data concerning stocks and
capacity utilization; and (iv) requesting that the European Communities provide this information during the
Article 21.5 proceedings and by the European Communities' failure to do so. (India's appellant's submission,
paras. 112-113)
197Ibid.
198Appellate Body Report, US – Hot-Rolled Steel, para. 55.
199India's appellant's submission, paras. 128-129.
201Ibid., para. 108.

Article 17.6 of the Anti-Dumping Agreement by exercising its discretion pursuant to Article 13.2 of
the DSU. 202
B. Analysis
159. India does not challenge directly the Panel's finding on Article 3.4 of the Anti-Dumping
Agreement. Rather, India argues on appeal that the Panel did not discharge its duties under Article 11
of the DSU and Article 17.6 of the Anti-Dumping Agreement in its examination of India's claim that
the European Communities did not have information before it on stocks and capacity utilization when
making its injury determination. India requests that, in the event that we agree with India regarding
Article 17.6 and Article 11, we reverse the Panel's finding that the European Communities acted
consistently with paragraphs 1 and 4 of Article 3 of the Anti-Dumping Agreement.
160. Article 11 of the DSU defines generally a panel's mandate in reviewing the consistency with
the covered agreements of measures taken by Members. The provision reads, in relevant part:
The function of panels is to assist the DSB in discharging its
responsibilities under this Understanding and the covered
agreements. Accordingly, a panel should make an objective
assessment of the matter before it, including an objective assessment
of the facts of the case and the applicability of and conformity with
the relevant covered agreements, and make such other findings as
will assist the DSB in making the recommendations or in giving the
rulings provided for in the covered agreements. (emphasis added)
161. We recently explained that Article 11 of the DSU:
… requires panels to take account of the evidence put before them
and forbids them to wilfully disregard or distort such evidence. Nor
may panels make affirmative findings that lack a basis in the
evidence contained in the panel record. Provided that panels' actions
remain within these parameters, however, we have said that "it is
generally within the discretion of the Panel to decide which evidence it
chooses to utilize in making findings" , and, on appeal, we "w ill not
interfere lightly with a panel's exercise of its discretion".
 203
(footnotes omitted)
162. Article 17.6 of the Anti-Dumping Agreement, for its part, "clarif[ies] the powers of review of
a panel established under the Anti-Dumping Agreement ." 204 Subparagraph (i) of Article 17.6

203Appellate Body Report, US – Carbon Steel, para. 142.
204Appellate Body Report, Thailand – H-Beams, para. 114.

"place[s] limiting obligations on a panel, with re spect to the review of the establishment and
evaluation of facts by the investigating authority." 205 The provision reads, in relevant part:
in its assessment of the facts of the matter, the panel shall determine
whether the authorities' establishment of the facts was proper and
whether their evaluation of those facts was unbiased and objective. If
the establishment of the facts was proper and the evaluation was
unbiased and objective, even though the panel might have reached a
different conclusion, the evaluation shall not be overturned.
163. In US – Hot-Rolled Steel, we stated that "[a]lthough the text of Article 17.6(i) is couched in
terms of an obligation on panels … the provision, at the same time, in effect defines when
investigating authorities can be considered to have acted inconsistently with the Anti-Dumping
Agreement".
 206 We further explained that the text of Article 17.6(i) of the Anti-Dumping Agreement,
as well as that of Article 11 of the DSU, "requires panels to 'assess' the facts and this … clearly
necessitates an active review or examination of the pertinent facts."
 207
164. Turning specifically to India's claim that the Panel did not discharge its duties under
Article 11 of the DSU and under Article 17.6(i) of the Anti-Dumping Agreement, we are mindful that
we have found previously that there is no "conflict" between Article 11 of the DSU and Article 17.6
of the Anti-Dumping Agreement; rather, the two provisions complement each other.
 208 W e b e g i n
our analysis here with India's argument relating to Article 17.6(i), because this provision, which sets
out the standard of review that panels must fo llow in reviewing the establishment of the facts

205Appellate Body Report, Thailand – H-Beams, para. 114.
206Appellate Body Report, US – Hot-Rolled Steel, para. 56. (original italics)
207Ibid., para. 55.
208In our Report in US – Hot-Rolled Steel, we stated:
… Article 17.6(i) requires panels to make an " assessment of the facts ".
The language of this phrase reflects closely the obligation imposed on
panels under Article 11 of the DSU to make an " objective assessment of the
facts
 ". Thus the text of both provisions requires panels to "assess" the facts
and this, in our view, clearly necessitates an active review or examination of
the pertinent facts. Article 17.6(i) of the Anti-Dumping Agreement does
not expressly state that panels are obliged to make an assessment of the facts
which is " objective". However, it is inconceivable that Article 17.6(i)
should require anything other than that panels make an objective
"assessment of the facts of the matter". In this respect, we see no "conflict"
between Article 17.6(i) of the Anti-Dumping Agreement and Article 11 of
the DSU.
(Appellate Body Report, US – Hot-Rolled Steel , para. 55) (original italics; underlining added) Both
the European Communities and India agree with this interpretation of the relationship between Article 17.6 of
the Anti-Dumping Agreement and Article 11 of the DSU. (India's and the European Communities' responses to
questioning at the oral hearing)

by investigating authorities in anti-dumping investigations, is particularly relevant to the appeal
before us. 209
165. India asserts that the Panel failed to review the facts actively, as we required in US – Hot-
Rolled Steel, because "[i]t neither used its powers under Article 13 [of the] DSU nor reviewed these
facts otherwise." 210 Although India recognizes that a pa nel's power to seek information under
Article 13 of the DSU is discretionary, India argues that the Panel was required to seek information
from the European Communities as part of the Panel's obligation to " actively review or examine the
facts" pursuant to Article 17.6 of the Anti-Dumping Agreement . 211 Consequently, we understand
India's claim to relate to the first part of the first sentence of Article 17.6(i), namely to the Panel's task
of determining "whether the authorities' establishment of the facts was proper". 212
166. We have previously stated that a panel's right to seek information pursuant to Article 13
of the DSU is discretionary and not mandatory, as India itself recognizes. 213 F u r t h e r m o r e , i n
EC – Sardines, where a claim was brought under Article 11 of the DSU, we concluded that:

209Appellate Body Report, US – Lead and Bismuth II, para. 47.
211Ibid., para. 127. (original italics)
212India's claim on appeal is limited to the Panel's finding that the European Communities did in fact
collect and have information before it on stocks and capacity utilization before making its injury determination.
India's appeal does not encompass the Panel's conclusion with respect to the European Communities'
evaluation of these factors. (Ibid., para. 130)
213Appellate Body Report, EC – Sardines, para. 302. Article 13 of the DSU reads:
Right to Seek Information
1. Each panel shall have the right to seek information and technical
advice from any individual or body which it deems appropriate. However,
before a panel seeks such information or advice from any individual or body
within the jurisdiction of a Member it shall inform the authorities of that
Member. A Member should respond promptly and fully to any request by a
panel for such information as the panel considers necessary and appropriate.
Confidential information which is provided shall not be revealed without
formal authorization from the individual, body, or authorities of the Member
providing the information.
2. Panels may seek information from any relevant source and may
consult experts to obtain their opinion on certain aspects of the matter. With
respect to a factual issue concerning a scientific or other technical matter
raised by a party to a dispute, a panel may request an advisory report in
writing from an expert review group. Rules for the establishment of such a
group and its procedures are set forth in Appendix 4.

[a] contravention of the duty under Article 11 of the DSU to make an
objective assessment of the facts of the case cannot result from the
due exercise of the discretion permitted by another provision of the
DSU, in this instance Article 13.2 of the DSU. 214 (emphasis added)
167. Similarly, a panel's duty to "actively review the pertinent facts" in order to comply with
Article 17.6(i) of the Anti-Dumping Agreement does not, in our view, imply that a panel must
exercise its right to seek information under Article 13 of the DSU, which explicitly states that the
exercise of that right is discretionary. Indeed, there is nothing in the texts of Article 17.6(i) of the
Anti-Dumping Agreement or Article 13 of the DSU to suggest that a reading of these provisions, in
combination, would render mandatory the exercise of a panel's discretionary power under
Article 13 of the DSU. At the oral hearing, India sought to draw a distinction between the case before
us and our ruling in EC – Sardines by arguing that, in the present case, the Panel's exercise of its
discretion was not "due" because "there was no exercise at all".
 215 We do not agree. In our view, it is
for panels to decide whether it is necessary to request information from any relevant source pursuant
to Article 13 of the DSU. The mere fact that the Panel did not consider it necessary to seek
information does not, by itself, imply that the Panel's exercise of its discretion was not "due". We,
therefore, reject India's allegation that the Panel failed to comply with the requirements of Article 17.6
of the Anti-Dumping Agreement by not seeking information from the European Communities
pursuant to Article 13 of the DSU.
168. In addition to its argument relating to the Panel's right to seek information under Article 13 of
the DSU, India argues that the Panel failed to "review[] these facts otherwise".
 216 In support of this
argument, India asserts that the "Panel merely stated that it was 'clear' to it that the EC had the data in
its record", without offering any proof or reason ing other than what was stated in EC Regulation
1644/2001 itself.
 217

215India's response to questioning at the oral hearing.
217Ibid. (footnotes omitted)

169. We have said previously that panels must not, under Article 17.6(i) of the Anti-Dumping
Agreement, "engage in a new and independent fact-finding exercise". 218 Furthermore, in our view,
the discretion that panels enjoy as triers of facts under Article 11 of the DSU 219 is equally relevant to
cases governed also by Article 17.6(i) of the Anti-Dumping Agreement. Thus, as under Article 11 of
the DSU, we "will not interfere lightly with [a] panel's exercise of its discretion" under Article 17.6(i)
of the Anti-Dumping Agreement. 220
170. An appellant must persuade us, with sufficiently compelling reasons, that we should disturb a
panel's assessment of the facts or interfere with a panel's discretion as the trier of facts. As India
points out, the Panel stated that it was apparent to the Panel from "the face of the redetermination"
that the investigating authority did have information on the relevant economic factors listed in
Article 3.4.
 221 The Panel, however, also noted that "it is clear that the EC had, in its record,
information on stocks and utilisation of capacity". 222 In the light of this statement, we conclude that,
contrary to India's contention, the Panel did not arrive at an affirmative conclusion that information on
these two factors was before the investigating au thorities based exclusively "on the face" of the
redetermination.
171. We observe, in this regard, that the Panel also had before it explanations as to how the
European Communities had collected information on stocks and capacity utilization. According to
the European Communities, it had collected information on both factors through the questionnaire
sent to the domestic industry and during the on-site verification visits.
 223 Moreover, the European

218Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US), para. 84. In the context of cases
brought under the Agreement on Safeguards , we have also said that, in making an objective assessment of the
facts pursuant to Article 11 of the DSU, panels may not conduct a de novo review of the evidence nor
substitute their judgement for that of the competent authorities. (Appellate Body Report, US – Lamb, para. 106;
Appellate Body Report, US – Cotton Yarn, para. 74)
219For example, in EC – Hormones, we stated that "it is generally within the discretion of the Panel to
decide which evidence it chooses to utilize in making findings." (Appellate Body Report, EC – Hormones ,
para. 135)
220Appellate Body Report, US – Wheat Gluten, para. 151.
221Panel Report, para. 6.169.
222Ibid., para. 6.167. (emphasis added)
223Section VI.A of the questionnaire sent by the investigating authorities of the European Communities
to its domestic industry reads:
Please describe the effects of the imports under consideration on your own
business of producing the types of bed linen covered by the investigation,
[e.g.] on market share, sales, prices, production, capacity utilisation, stocks ,
employment, profitability, ability to invest[,] etc. (emphasis added)
(European Communities' Anti-dumping Questionnaire, a ttached to India's oral statement to the Panel)
See also, European Communities' response to Question 18 posed by the Panel during the Panel proceedings;
Panel Report, Annex E-2, p. 37, para. 8.

Communities explained that it obtained additional information on stocks from audited accounts that
were either annexed to the questionnaire replies, or verified during the on-site visits. 224 The European
Communities added that data on stocks could also be derived by comparing verified data on
production and sales volume.
 225 As for capacity utilization, the European Communities stated that it
had received information on production capacity from Eurocoton—the complainant in the anti-
dumping investigation. 226 In the light of these observations, we are not persuaded that we should
interfere with the Panel's finding of fact on this matter. Therefore, we reject India's argument that the
Panel "otherwise" failed to review the facts actively under Article 17.6(i) of the Anti-Dumping
Agreement.
172. We turn next to the arguments submitted by India in support of its claim that the Panel failed
to meet its obligation under Article 11 of the DSU to examine the facts of the case objectively. India's
first argument is that the Panel misapplied the rules on the allocation of the burden of proof that we
set out in US – Wool Shirts and Blouses.
 227

224European Communities' response to Question 18 posed by the Panel during the Panel proceedings;
Panel Report, Annex E-2, p. 37, para. 8.
225Ibid., p. 38, para. 11.
226European Communities' appellee's submission, para. 100, quoting excerpts from the European
Communities' first written submission to the Panel.
227In that case, we stated that:
… it is a generally-accepted canon of evidence in civil law, common law
and, in fact, most jurisdictions, that the burden of proof rests upon the party,
whether complaining or defending, who asserts the affirmative of a
particular claim or defence. If that party adduces evidence sufficient to raise
a presumption that what is claimed is true, the burden then shifts to the other
party, who will fail unless it adduces sufficient evidence to rebut the
presumption.
(Appellate Body Report, US – Wool Shirts and Blouses, at 335) (footnote omitted)

173. The Panel discussed the principles regarding burden of proof at the outset of the Panel Report.
The Panel stated:
We recall that the general principles applicable to burden of proof in
WTO dispute settlement require that a party claiming a violation of a
provision of the WTO Agreement by another Member must assert
and prove its claim. In these Panel proceedings, we thus observe that
it is for India, which has challenged the consistency of the EC
measure, to bear the burden of demonstrating that the measure is not
consistent with the relevant provisions of the AD Agreement. We
also note, however, that it is generally for each party asserting a fact,
whether complainant or respondent, to provide proof thereof. In this
respect, therefore, it is also for the EC to provide evidence for the
facts which it asserts. We also recall that a prima facie case is one
which, in the absence of effective refutation by the other party,
requires a panel, as a matter of law, to rule in favour of the party
presenting the prima facie case. In addition, we consider that both
parties generally have a duty to cooperate in the proceedings in order
to assist us in fulfilling our mandate, through the provision of
relevant information.
 228 (footnotes omitted)
174. India is not alleging that, on this particular issue, the Panel should have allocated the burden
of proof differently. Instead, India asserts that the Panel should have shifted the burden to the
European Communities once India had established a prima facie case. 229 There is nothing in the
Panel's reasoning, however, to suggest that the Panel premised its ultimate conclusion on whether or
not India had presented a prima facie case. From our perspective, the Panel assessed and weighed
all the evidence before it—which was put forward by both India and the European Communities—
and, having done so, ultimately, was persuaded that the European Communities did, in fact, have
information before it on all relevant economic factors listed in Article 3.4 of the Anti-Dumping
Agreement.
175. We agree, therefore, with the European Communities' assertion that India's argument is, for
all practical purposes, one related to the Panel's weighing and appreciation of the evidence.
 230 As the
European Communities pointed out, we have previously stated that the "[d]etermination of the
credibility and weight properly to be ascribed to (that is, the appreciation of) a given piece of evidence is
part and parcel of the fact finding process and is, in principle, left to the discretion of a panel as the trier
of facts." 231

228Panel Report, para. 6.7.
229India's response to questioning at the oral hearing.

176. We have, furthermore, explained that:
In assessing the panel's appreciation of the evidence, we cannot base
a finding of inconsistency under Article 11 simply on the conclusion
that we might have reached a different factual finding from the one
the panel reached. Rather, we must be satisfied that the panel has
exceeded the bounds of its discretion, as the trier of facts, in its
appreciation of the evidence. As is clear from previous appeals, we
will not interfere lightly with the panel's exercise of its discretion.
 232
(footnote omitted)
177. India has not persuaded us that the Panel in this case exceeded its discretion as the trier of
facts. In our view, the Panel assessed and weighed the evidence submitted by both parties, and
ultimately concluded that the European Communities had information on all relevant economic
factors listed in Article 3.4. It is not "an error, let alone an egregious error"
 233, for the Panel to have
declined to accord to the evidence the weight that I ndia sought to have accorded to it. We, therefore,
reject India's argument that, by failing to shift the burden of proof, the Panel did not properly
discharge its duty to assess objectively the facts of the case as required by Article 11 of the DSU.
178. We reach now India's alternative argument on this issue, which is that, even if the Panel
properly applied the rules on the burden of proof, the Panel failed to meet its obligations under
Article 11 of the DSU because it "distorted the evid ence [b]y accepting for a fact a mere assertion
contained in the EC Regulation 1644/2001—while India had submitted prima facie evidence on the
absence of data collection". 234 India contends that, in doing so, "the Panel attached greater weight to
the mere assertion" of the European Communities, while failing to explain why the Panel considered
the assertion "sufficient to rebut the prima facie evidence of India that the EC had not collected such
data." 235

232Appellate Body Report, US – Wheat Gluten , para. 151. We note, moreover, that in Korea –
Alcoholic Beverages , we refused to "second-guess" the panel's appreciation of certain studies submitted into
evidence or "review the relative weight" ascrib ed to the evidence. (Appellate Body Report, Korea – Alcoholic
Beverages, para. 161) In Australia – Salmon , we concluded that "[p]anels … are not required to accord to
factual evidence of the parties the same meaning and weight as do the parties." (Appellate Body Report,
Australia – Salmon, para. 267)
233Appellate Body Report, Korea – Alcoholic Beverages, para. 164.
234India's appellant's submission, para. 124. (original italics)
235Ibid.

179. In EC – Hormones, we described how a panel could fail to make an objective assessment of
the facts by "distorting" the evidence:
The deliberate disregard of, or refusal to consider, the evidence
submitted to a panel is incompatible with a panel's duty to make an
objective assessment of the facts. The wilful distortion or
misrepresentation of the evidence put before a panel is similarly
inconsistent with an objective assessment of the facts. "Disregard"
and "distortion" and "misrepresentation" of the evidence, in their
ordinary signification in judicial and quasi-judicial processes, imply
not simply an error of judgment in the appreciation of evidence but
rather an egregious error that calls into question the good faith of a
panel. A claim that a panel disregarded or distorted the evidence
submitted to it is, in effect, a claim that the panel, to a greater or
lesser degree, denied the party submitting the evidence fundamental
fairness, or what in many jurisdictions is known as due process of
law or natural justice.
 236 (emphasis added; footnote omitted)
180. India expressly states that "it does not assert that the Panel committed an egregious error
calling into question its good faith." 237 At the oral hearing, India argued that, in disputes where we
have found a violation of Article 11 of the DSU, "i t has not always been the situation that the panel
had made an egregious error calling into question its good faith". 238 Indeed, we have found a
violation of Article 11 of the DSU when panels have failed to ensure that a competent authority
evaluated all relevant economic factors and that the authority's explanation of its determination is
reasoned and adequate.
 239 In those instances, the error related to the evaluation conducted by the
 competent authorities . We also found that a panel exceeded its mandate under Article 11 by
considering evidence that was not in existence at the time of a Member's determination imposing a
safeguard measure on imports of textiles.
 240 In another case, we determined that the panel had not
made an objective assessment of the matter before it because it examined a claim that had not been
raised by the complainant. 241

238India's response to questioning at oral hearing.
239Appellate Body Report, US – Wheat Gluten , paras. 161-162; Appellate Body Report, US – Lamb,
para. 149.
240Appellate Body Report, US – Cotton Yarn, para. 80.
241Appellate Body Report, Chile – Price Band System, para. 177.

181. In our view, none of these examples assists I ndia with the claim it raises on appeal. India
does not appeal the Panel's conclusion with respect to the evaluation by the investigating authorities
of the European Communities of the relevant economic factors listed in Article 3.4. 242 India directs
its arguments on appeal to the Panel's assessment of the facts of the case, and does not argue that the
Panel failed otherwise to make an objective assessment of the matter before it. Specifically, India
argues that the Panel did not make an objective assessment of the facts of the case because the Panel
distorted the evidence by placing greater weight on the statements made by the European
Communities than on those made by India.
 243 As we stated earlier, the weighing of the evidence is
within the discretion of the Panel as the trier of fact s, and there is no indication in this case that the
Panel exceeded the bounds of this discretion. 244 We thus reject India's argument that the Panel
distorted the evidence before it.
182. For all these reasons, we find that the Panel properly discharged its duties under Article 17.6
of the Anti-Dumping Agreement and Article 11 of the DSU. We, therefore, uphold the Panel's
finding, in paragraph 6.169 of the Panel Report, that the European Communities had information
before it on the relevant economic factors listed in Article 3.4 of the Anti-Dumping Agreement
when making its injury determination.

242See supra, footnote 212 to para.165.
243In response to questioning at the oral hearing, In dia explained that "[i]f there is a heavy balance on
one side and nothing on the other side, and the panel nevertheless finds it is the other way around, then we feel
[it] is a distortion of the evidence".
244See supra, para. 177.

VII. Findings and Conclusions
183. For the reasons set out in this Report, the Appellate Body:
(a) (i) upholds the Panel's finding, in paragraph 6.53 of the Panel Report, that
India's claim under Article 3.5 of the Anti-Dumping Agreement—that the European
Communities failed to ensure that injuries caused by other factors was not attributed
to the dumped imports—was not properly before the Panel; and, consequently,
(ii) declines to rule on the issue of whether the Panel erred, in its alternative
finding, in paragraph 6.246 of the Panel Report, that the European Communities acted
consistently with Article 3.5 of the Anti-Dumping Agreement;
(b) (i) reverses the Panel's finding, in paragraph 6.144 of the Panel Report, that the
European Communities did not act inconsistently with paragraphs 1 and 2 of Article 3
of the Anti-Dumping Agreement, and finds that the European Communities acted
inconsistently with paragraphs 1 and 2 of Article 3 of the Anti-Dumping Agreement
in determining the volume of dumped imports for purposes of making a
determination of injury; and
(ii) declines to rule on the Panel's finding, in paragraph 6.135 of the Panel
Report, that the European Communities applied the second alternative in the second
sentence of Article 6.10 for limiting its examination in this investigation; and
(c) finds that the Panel properly discharged its duties under Article 17.6 of the
Anti-Dumping Agreement and Article 11 of the DSU and, therefore, upholds the
Panel's finding, in paragraph 6.169 of the Panel Report, that the European
Communities had information before it on the relevant economic factors listed in
Article 3.4 of the Anti-Dumping Agreement when making its injury determination.
184. The Appellate Body recommends that the DSB request the European Communities to bring
its measure, found in this Report to be inconsistent with its obligations under the Anti-Dumping
Agreement, into conformity with that Agreement.

Signed in the original at Geneva this 24th day of March 2003 by:
Georges Abi-Saab
Presiding Member
_________________________ _________________________
James Bacchus Yasuhei Taniguchi
Member Member
ANNEX 1

9 January 2003
(03-0095)
Original: English
EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Recourse to Article 21.5 of the DSU by India
Notification of an Appeal by India
under paragraph 4 of Article 16 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes ("DSU")
The following notification, dated 8 January 2003, sent by India to the Dispute Settlement
Body ("DSB"), is circulated to Members. This notification also constitutes the Notice of Appeal, filed
on the same day with the Appellate Body, pursuant to the Working Procedures for Appellate Review.
Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate Review, India
hereby notifies its decision to appeal to the Appellate Body certain issues of law and legal
interpretations covered in the Panel Report on European Communities – Anti-Dumping Duties on
Imports of Cotton-Type Bed Linen from India: Recourse to Article 21.5 of the DSU by India
(WT/DS141/RW, dated 29 November 2002).
The appeal relates to the following issues of law and legal interpretations developed by the
Panel in its Report:
(a) The Panel erred in law in concluding that the EC did not act inconsistently with Articles 3.1
and 3.2 of the Agreement on Implementation of Article VI of the General Agreement on
Tariffs and Trade 1994 ("Anti-Dumping Agreement") in paragraph 6.144 of the Panel Report
and reasoning leading thereto;
(b) The Panel erred in law in finding that the EC did have information before it on the injury
factors under Article 3.4 of the Anti-Dumping Agreement in paragraph 6.169 of the Panel
Report and reasoning leading thereto. In reaching this conclusion the Panel failed in its
obligations under Article 17.6 of the Anti-Dumping Agreement and Article 11 of the DSU;
and
(c) (i) The Panel erred in law in finding that India's claim 6 under Article 3.5 of the Anti-
Dumping Agreement was not properly before it in paragraph 6.53 of the Panel Report
and reasoning leading thereto;
(ii) The Panel erred in law in finding that the EC's measure is not inconsistent with
Article 3.5 of the Anti-Dumping agreement for failure to ensure that injuries caused
by other factors are not attributed to dumped imports in paragraph 6.246 of the Panel
Report and reasoning leading thereto.
Accordingly, India requests the Appellate Body to reverse the conclusions reached by the
Panel in paragraphs 7.1-7.3 of the Report as it considers them to be error in law and based upon
erroneous findings on issues of law and related legal interpretations.