JAPAN – COUNTERVAILING DUTIES ON DYNAMIC RANDOM ACCESS MEMORIES FROM KOREA
Document: ARB-2008-1/22 Arbitration under Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes
Date: 5 May 2008
Document codes: WT/DS336/16
Complainant: South Korea
Respondent: Japan
Third parties: China, EU, Taiwan, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. 1, 2, 14, 10, 15, 19, 21, 11, 12, 32.1, 15.5, 1.1, 19.1, 19.4  Subsidies and Countervailing Measures (SCM)Art. VI:3, X:3  GATT 1994

JAPAN – COUNTERVAILING DUTIES ON
DYNAMIC RANDOM ACCESS MEMORIES FROM KOREA

ARB-2008-1/22

Arbitration
under Article 21.3(c) of the
Understanding on Rules and Procedures
Governing the Settlement of Disputes

Award of the Arbitrator
David Unterhalter

APPELLATE BODY

Parties:

Korea
Japan
 ARB-2008-1/22

 Arbitrator:

 David Unterhalter

I. Introduction
1. On 17 December 2007, the Dispute Settlement Body (the "DSB") adopted the Appellate Body
Report
1 and the Panel Report 2, as modified by the Appellate Body Report, in .3 At the meeting of the DSB held on
15 January 2008, Japan stated that it intended to co mply with the recommendations and rulings of the
DSB in this dispute, and that it would need a reasonable period of time in which to do so.4
2. On 25 February 2008, Korea informed the DSB th at consultations with Japan had not resulted
in agreement on the reasonable period of time for im plementation. Korea therefore requested that
such period be determined through binding arb itration, pursuant to Article 21.3(c) of the
Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU").5
3. By joint letter of 4 March 2008, Korea and Japan requested me to act as Arbitrator, pursuant
to Article 21.3(c) of the DSU, to determine the reasonable period of time for implementation of the
recommendations and rulings of the DSB in this dispute.6 As the 90-day period following adoption of
the Panel and Appellate Body Reports was to expi re on 17 March 2008, the parties, in their joint
letter, confirmed that an award of the arbitrator is sued no later than 60 days after the date of the
acceptance of the appointment by the arbitrator will be deemed to be an award of the arbitrator for the
purposes of Article 21.3(c).7 I accepted the appointment on 5 March 2008 8 and undertook to issue the

1Appellate Body Report, WT/DS336/AB/R.
2Panel Report, WT/DS336/R.
3WT/DS336/12.
4See WT/DSB/M/244, para. 15.
5WT/DS336/13.
6WT/DS336/14.
7WT/DS336/15.
8WT/DS336/14.

Award no later than 5 May 2008. Neither party obj ected to the proposed date for circulation of the
Award.
4. Japan filed its written submission on 17 March 2008. Korea filed its written submission on
25 March 2008. An oral hearing was held on 8 April 2008.
II. Arguments of the Parties
A. Japan
5. Japan requests that I determine the "reasonable period of time" for implementation of the
recommendations and rulings of the DSB in this dispute to be 15 months from the date of adoption by
the DSB of the Panel and Appellate Body Reports, that is, until 17 March 2009.

6. According to Japan, immediate compliance with the DSB's recommendations and rulings is
"impracticable".9 Japan explains that implementation in this case would require modification of the
original countervailing duty order at issue in th e underlying dispute through a new Cabinet Order
replacing the original Cabinet Order 10 authorizing the original countervailing duty. 11 The procedure
necessary under Japanese laws and regulations to replace a Cabinet Order includes a new
countervailing duty investigation, in which Japan's investigating authorities (the "JIA") must follow
certain "multiple, time-consuming and indispensable [procedural] steps" 12 designed to ensure the
accuracy and transparency of the investigation and th at the due process rights of interested parties are
respected.13 According to Japan, any failure to follo w these steps could impinge on the due process
rights of both domestic and Korean interested partie s and lead to additional problems of consistency
of Japan's domestic laws with its WTO obligations. Japan further contends that the 15-month period
requested represents the shortest period of time possi ble to ensure that these due process rights are not
jeopardized.
7. Japan recalls certain "key legal principles" 14 relevant to arbitration proceedings under
Article 21.3(c) of the DSU which should "guide this arbitration". 15 In particular, Japan highlights the

9Japan's submission, paras. 1 and 15.
10Cabinet Order Relating to Countervailing Duty Levied on Dynamic Random Access Memory, Etc. ,
(Cabinet Order No. 13), Official Gazette, Issue No. 4264, 27 January 2006 (Exhibit JPN-1 attached to Japan's
submission).
11See Japan's submission, para. 14.
12Ibid., para. 58.
13See ibid., para. 2.
14Ibid., para. 4; see also paras. 5-13.
15Ibid., para. 13; see also paras. 5-12.

discretion that an implementing Member enjoys in selecting its preferred means of implementation 16;
that implementation is usually achieved by means entirely within the "lawmaking" procedures of the
implementing Member 17; that the shortest period of time for implementation does not necessarily
entail recourse to extraordinary procedures 18; that the "particular circumstances" of a case have
included the legal form of implementation, the "techni cal complexity" of the measures to be drafted,
adopted and implemented, and the period of time in which the Member can achieve the proposed form
of implementation in the light of its system of government 19; that procedural steps include procedural
conventions or the standard practice of a Member , even if not explicitly mandated in laws and
regulations20; that the due process rights of interested parties should be respected in conducting
investigations to implement DSB recommendations and rulings 21; and that implementation should be
full and effective in the light of the "particular circumstances" of the case.22
8. Japan recalls that the countervailing duty measure at issue in the original proceedings was
imposed pursuant to a Cabinet Order 23, as required by Article 7(1) of Japan's Customs Tariff Law. 24
Japan contends that, in order to conform to th e recommendations and ruli ngs of the DSB, that
measure will need to be modified through a replacemen t Cabinet Order. Japan refers to Article 7(17)
of the Customs Tariff Law, which, according to Japan, "provides only one mechanism" for the

16See Japan's submission, para. 13 and para. 6 (referring to Award of the Arbitrator, EC – Chicken
Cuts, para. 49).
17Ibid., para. 13 (referring to Award of the Arbitrator, EC – Chicken Cuts, para. 51).
19Ibid., para. 13 (referring to Award of the Arbitrator, US – Oil Country Tubular Goods Sunset
Reviews, para. 30).
20Ibid., para. 13 and para. 10 (referring to, inter alia , Award of the Arbitrator, EC – Chicken Cuts,
para. 79).
21Ibid., para. 13 and footnote 16 to para. 11 (referring to Panel Report, US – Oil Country Tubular
Goods (Article 21.5 – Argentina) , para. 7.115; and Appellate Body Report, Mexico – Anti-Dumping Measures
on Rice, para. 292).
22Ibid., para. 13 and para. 12 (referring to Award of the Arbitrator, Chile – Alcoholic Beverages ,
paras. 39-40).
23See supra, footnote 10.
24See Japan's submission, paras. 2 and 14 (referring to Article 7(1) of Japan's Customs Tariff Law (Law
No. 54 of 1910, as amended) which provides as follows:
Where there is a fact that the importation of product to which subsidies are
granted, directly or indirectly, to production or export in any foreign country
causes or threatens to cause material injury to domestic industry …, as may
be prescribed by a Cabinet Order, … a duty may be imposed in addition to
customs duty chargeable at an applicable rate in the Annexed Tariff, in an
amount equal to or less than the amount of the subsidies … .)
Japan's Customs Tariff Law is reproduced in document G/ADP/N/1/JPN/2, G/SCM/N/1/JPN/2 (Exhibit JPN-2
attached to Japan's submission).

Japanese government to "modify or abolish the countervailing duty"
25, namely, through a new
investigation. Japan also refers to the fact that the Japanese government may modify a countervailing
duty order if it is "found" 26 necessary to do so (which, accord ing to Japan, suggests that an
investigation must be conducted); that Article 7(19) of the Customs Tariff Law requires the
government to "initiate ... an investigation as to whether ... changes in circumstances exist" 27; and
further that Article 7(20) of the Customs Tariff La w requires the investigation to be concluded within
one year. According to Japan, these provisions illu strate that Japan's Customs Tariff Law does not
allow the modification of a countervailing duty Cabi net Order by "simply drafting" an amendment to
the current order for presentation to the Cabinet.28
9. Japan contends that, since an investigation is required, the government is also required to
comply with certain procedural steps under Japanes e laws and regulations re lating to investigations.29
Japan contends that, "in addition to these mandato ry procedural steps", there are "requirements
inherent to trade remedy investigations" designed to ensure that the due process rights of interested
parties are preserved and that "meaning" is given to investigative process 30, which the JIA does not
have any "discretion to omit". 31 For Japan, it is these aspects of the procedures that constitute the
"particular circumstances" of th e case and which must be taken into account in determining the
reasonable period of time for implementation. Japan highlights some of the procedural requirements,
namely: that interested parties be allowed "mean ingful and necessary opportunities" to participate in
the investigative process 32 (through opportunities to submit evidence and opinions, view information
submitted by other interested parties, review a nd comment on the "Essential Facts" determined as
such by the JIA); and that the JIA request evid ence and information, verify their accuracy, disclose

25Japan's submission, para. 14 and footnote 24 thereto. Article 7(17) of the Customs Tariff Law, supra,
footnote 24, provides, in relevant part:
Where there are some changes in circum stances with regard to the specified
product as enumerated below, the Government may, if it is found to be
necessary, as may be prescribed in a Cabinet Order, modify or abolish the
countervailing duty imposed under the provision of paragraph 1. (emphasis
added)
26Japan's submission, para. 15.
27Supra, footnote 24.
28See Japan's submission, para. 15.
29Ibid., para. 16. The relevant Japanese laws, notifications, and regulations are reproduced in
documents G/ADP/N/1/JPN/2, G/SCM/N/1/JPN/2; and Corr.1; Corr.2; Suppl.1; Suppl.2; Suppl.3; Suppl.4;
and Suppl.5 (Exhibit JPN-2 attached to Japan's submission).
30Ibid., para. 17 (referring to Award of the Arbitrator, US – Oil Country Tubular Goods Sunset
Reviews, para. 51).
31Ibid., para. 19.
32See ibid., para. 19 and footnote 27 thereto (referring to Article 10(1) of Cabinet Order Relating to
Countervailing Duty (Cabinet Order No. 416, December 1994), which Japan contends also requires the JIA to
accept information from any "industrial user of the products under the i nvestigation or any representative-
consumer organizations of such products" (reproduced in document G/ADP/N/1/JPN/2, G/SCM/N/1/JPN/2
(Exhibit JPN-2 attached to Japan's submission)). Japan argues that this means that the requirements of
Article 12.10 of the SCM Agreement are mandatory under Japanese domestic law.

the Essential Facts to the interested parties, and a llow commentary before issuing the final decision.
Japan also recalls that, in the or iginal investigation, there were more than 2000 pieces of evidence,
and a report spanning over 500 pages, and that certain items of evidence and findings were
interlinked; therefore, reconsideration of existing evidence and of new evidence submitted by
interested parties might require the JIA to examin e how the new evidence inte racts with the existing
factual record. Further, Japan highlights that, und er Japanese law, the JIA's determination must be
examined and reviewed by relevant bodies before a new countervailing duty Cabinet Order can be
issued.
10. Bearing these factors in mind, Japan provid es a detailed account of the three phases of
implementation it envisages: the first "preparato ry" stage for the initiation of the investigation—
which Japan notes has already been completed—(estim ated at 45 days); the investigation stage
(estimated at one year); and the third phase involving the preparation and promulgation of the new
countervailing duty Cabinet Order (estimated at 45 days).
11. Japan explains that, in the first stage—whic h it has already completed—Japan examined the
relevant procedures available for implementation under Japanese law (since this is the first trade
remedy case requiring Japan to implement the DSB' s recommendations and rulings). Pursuant to
Article 7(19) of the Customs Tariff Law, which aut horizes the initiation of investigations relating to
changed circumstances 33, the government "moved expeditiously" to initiate the investigation by 30
January 2008, but was first required to follow cer tain steps (including consultations between the
Minster of Finance and Ministry of Economy, Trad e and Industry; formation of the investigating
authorities; publication of the notice of initiation; provision of notice to interested parties and to
members of relevant Councils; and preparation of the notice of initiati on, summaries of matters
subject to investigation, time-limits for submis sion of evidence in writing, and other relevant
matters).
34 Japan submits that, due to the "best efforts" 35 of the Japanese government, it was able to
complete the preparatory process within 45 days.
12. Japan contends that, during the (second) investig atory stage, the JIA must comply with the
same due process and transparency procedures required in the original investigation and set out in the

33See Japan's submission, para. 24 (referring to Article 7(19) of the Customs Tariff Law, supra,
footnote 24).
34See ibid., paras. 24-26 and footnotes 29-37 thereto (referring to various provisions of the Cabinet
Order Relating to Countervailing Duty, supra, footnote 32); the Guidelines for Procedures Relating to
Countervailing and Anti-Dumping Duties (reproduced in documents G/ADP/N/1/JPN/2/Suppl.2,
G/SCM/N/1/JPN/2/Suppl.2; and G/ADP/N/1/JPN/2/Suppl.4, G/SCM/N/1/JPN/2/Suppl.4 (Exhibit JPN-2
attached to Japan's submission); and the Notification of the Ministry of Finance No. 26 (Exhibit JPN-6 attached
to Japan's submission).
35Japan's submission, para. 26.

Customs Tariff Law
36, the Cabinet Order Relating to Countervailing Duty 37, and the Guidelines for
Procedures Relating to Countervailing and Anti-Dumping Duties .38 Japan notes that, due to the
complexity and length of the original investig ation, 18 months would normally be required to
complete a new investigation, but that, for pur poses of implementation, the JIA would seek to
complete the entire process within one year. Sp ecifically, Japan contemplates the following time
periods:
(a) 43 days for the acceptance of voluntary submissions of evidence and comments by
interested parties (due by 13 March 2008);
(b) 30 days for the preparation and transmission of questionnaires to interested parties
(based in part on submissions received by 13 March 2008);
(c) 44-day response period for questionnaires;
(d) 70 days for "on-the-spot" investigations;
(e) 120 days for the issuance and communication of "on-the-spot" investigation reports
prepared for each investigated party; and an alysis and preparation of the disclosure of
the JIA's Essential Facts;
(f) 30 days for commentary on the JIA's Essential Facts;
(g) 30 days for preparation of the written determination by the JIA (taking due account of
arguments raised by interested parties).39
13. Japan contemplates a 45-day period for the final stage of the implementation process. Japan
highlights that this stage calls for "government-wide decision making" 40 involving various separate,
additional steps by independent entities. 41 For instance, the Minister of Finance must refer
determinations by the JIA to the Council on Cu stoms, Tariff, Foreign Exchange and other
Transactions42 (the "Council"), whose function is, inter alia , to examine JIA determinations and

36Supra, footnote 24.
37Supra, footnote 32.
38Supra, footnote 34.
39See Japan's submission, paras. 29-52.
40Ibid., para. 53.
41See ibid., para. 57.
42Article 16 of the Cabinet Order Relating to Countervailing Duty provides: "The Minister shall, when
it is deemed necessary as a result of an investigation, ... to vary or remove countervailing duty ... promptly refer
the matter to the Customs Tariff Council." ( supra, footnote 32) The function of this Council is to examine and
deliberate on important issues related to, inter alia, customs and tariffs, including determinations by JIA, and
provide an independent opinion to the Minister.

provide an independent determination to the Minist er, before the Minister can take further actions
necessary for the decision and promulgation by the Cabinet of a Cabinet Order. 43 Failing approval by
the Council, the Minister of Finance is not permitte d to take any further action, but if successfully
reviewed, a draft Cabinet Order, prepared by the Mi nistry of Finance, will be drawn up and reviewed
again by the Cabinet Legislation Bureau (the "Bureau") before it is presented to the Cabinet. 44 This
review by the Bureau, similar to those used in the normal law-making process, entails a preliminary
and final examination stage, is mandatory, and en sures that the proposed Cabinet Order is necessary
and consistent with all Japanese laws and regula tions. Japan explains that, to shorten the
implementation period, the JIA will, if possible, in itiate the Bureau's review of the proposed draft
Order in parallel with the Council review, but not es that these processes can take place only after the
investigative process has ended and the final determination actually made. 45 Once a Cabinet decision
is taken, following the Council's approval, the Cabinet Order will then be promulgated upon its
publication in the Official Gazette and become effective on the date designated in the Order.46
B. Korea
14. Korea considers that Japan should be awar ded five months to comply with the
recommendations and rulings of the DSB, but that if five months elapses before the Award in this
case is issued, an additional two weeks should be granted from the date of the Award. Korea
contends that this would be sufficient for Japan to exercise its available "executive discretion" 47 to
implement the Panel and Appellate Body findings, which require immediate revocation of the
measure.48
15. Korea recalls the relevant findings and conclu sions made by the Panel, as upheld by the
Appellate Body: in respect of the debt-restruct uring programme entered into by Hynix and its
creditors (the "Restructuring") in October 2001, that Japan acted inconsistently with Article 19.4 of
the Agreement on Subsidies and Countervailing Measures (the " SCM Agreement ") by levying

43See Japan's submission, para. 53. Japan explains that the Council is an independent body established
under Articles 6 and 8 of the Law to Establish the Ministry of Finance (Law No. 95 of 1999) (Exhibit JPN-5
attached to Japan's submission) and the Cabinet Order Relating to Council on Customs, Tariff, Foreign
Exchange and other Transactions (Cabinet Order No. 276, 7 June 2000, as amended) (Exhibit JPN-8 attached
to Japan's submission) and is composed of professors and experts from the private sector with expertise in
customs and tariffs and other relevant areas.
44See Japan's submission, para. 54 and footnote 63 thereto. Article 3(1) of the Law to Establish the
Cabinet Legislation Bureau (Law No. 252 of 1952, 31 July 1951, as amended) (Exhibit JPN-9 attached to
Japan's submission) provides that: "The Cabinet Legislatio n Bureau shall perform the following duties: (1) to
examine legislative bills, draft Cabinet orders, and draft trea ties, give their opinion thereof, and, report such to
the Cabinet after adding any necessary revisions thereto."
45See Japan's submission, para. 55.
46See ibid., para. 56.
47Korea's submission, para. 2.
48See ibid., para. 3.

countervailing duties in 2006 in excess of the amount of subsidy found to exist
49; and that the JIA
acted inconsistently with Articles 1.1(b) and 14 of the SCM Agreement by determining that the
December 2002 Restructuring programme confer red a "benefit" on the Korean manufacturing
company of dynamic random access memories, Hynix Semiconductor, Inc.50 According to Korea, the
first finding cannot be remedied since the subsidy no longer existed at the time Japan imposed the
countervailing duty measures in 2006; and, as regards the JIA's benefit determination, the programme
was not countervailable since no "reasonable and objec tive" authority could have made a finding that
a benefit had been conferred.
16. Korea recalls that the "promp t compliance" requirement under Article 21.1, as applied to
Article 21.3 of the DSU, requires, first and foremo st, immediate compliance, and that only where this
is not practicable should recourse to arbitration be had in order to determine the "shortest period
possible within the legal system of the Member". 51 Korea also recalls that it is Japan's burden to
prove that immediate compliance is not possible, and further to explain why 15 months is required for
implementation.
52 Korea also highlights previous arb itration awards where it was noted that
administrative changes, especially those involving administrative decision-making, generally take less
time than legislative changes.53
17. Korea submits that, in this case, Japan should implement through immediate withdrawal of
the countervailing duty measure 54 since the violations found by th e Panel and Appellate Body cannot
be "fixed or explained". 55 Korea contends that there is no need for new facts, new arguments, a new
determination, and a new elaborat e investigation, in the light of the "unambiguous and clear" 56
findings of inconsistency by the Panel and the A ppellate Body; rather, all that is needed is
administrative action to revoke the original counter vailing duty measure. For Korea, "[t]here is no
legal or equitable basis for Japan to leave the ille gal measure in place while a new investigation is
initiated and pursued."57 Korea also rejects Japan's reliance on dicta in the Award of the Arbitrator in

49See Korea's submission, paras. 17-21 (referring to Panel Report, para. 7.361; and Appellate Body
Report, paras. 210 and 212-215).
50See ibid., paras. 22-25 (referring to Panel Report, para. 7.282; and Appellate Body Report,
paras. 163-164).
51Ibid., para. 34 (referring to, inter alia, Award of the Arbitrator, EC – Hormones , paras. 26 and 28;
Award of the Arbitrator, Indonesia – Autos, para. 22; Award of the Arbitrator, Canada – Patent Term, para. 47;
and Award of the Arbitrator, US – 1916 Act, para. 32).
52See ibid., paras. 36-37 (referring to Award of the Arbitrator, EC – Export Subsidies on Sugar ,
para. 59).
53See ibid., paras. 38-40 (referring to Award of the Arbitrator, Canada – Pharmaceutical Patents ,
paras. 49-51; and Award of the Arbitrator, US – Gambling, para. 35).
54See ibid., paras. 26-28.
55Ibid., para. 3.
56Ibid., para. 59 (referring to Award of the Arbitrator, EC – Chicken Cuts, paras. 57-63).
57Ibid., para. 28.

EC – Chicken Cuts , which, as Japan contends, establishes that an arbitrator is merely required to
determine the time for implementation (as opposed to the type of implementation). In that case, the
European Communities was not awarded time for seeking advice of the World Customs Organization,
as this was outside the "unambiguous and clear" ruling of the panel and the Appellate Body.58
18. Failing immediate revocation, Korea argues that Japan is nonetheless required to implement
in the shortest period possible. Korea refers to Japan's admission that there are implementing
regulations in place, and argues that all that is required is for Japan to take administrative action. 59
Korea contends, therefore, that Japan simply needs to determine whether the exercise of discretion in
applying the relevant regulations would "requi re anything beyond a minimal period of time". 60
Further, the burden is on Japan to show that it h as used its discretion to ensure prompt compliance. 61
Korea submits that Japan has not demonstrated that it has exercised all of its available discretion to
shorten the period of implementation, nor has it explained why it exercised its discretion to "add
unnecessary, burdensome and delaying steps". 62 In response to Japan's re ference to procedural steps
that form part of Japan's "standard practice", Korea submits that this argument is misplaced, as Japan
has never before taken implementati on measures in a trade remedy case. Korea refers to the fact that
the Minister of Finance "may" (as opposed to "shall ") request the views and arguments of interested
parties63 in illustration that discretion exists and that due process requirements, referred to by Japan,
are not always necessary in conducting investiga tions. Japan has put the "cart before the horse" 64 by
justifying a de novo investigation and referring to the protection of due process rights associated with
it, instead of identifying the proper implementati on process and then choosing the appropriate due
process requirements.65
19. Korea refers to Japan's clai m that procedural conventions regarding the conduct of
investigations constitute "particular circumstances". 66 Korea argues that Japan fails to explain the

58See Korea's submission, paras. 57-59 (referring to Award of the Arbitrator, EC – Chicken Cuts ,
paras. 57-63).
59See ibid., para. 48 (referring to Award of the Arbitrator, US – Oil Country Tubular Goods Sunset
Reviews, para. 27).
60Ibid., para. 48.
61See ibid., para. 49 (referring to Award of the Arbitrator, Canada – Autos, para. 47).
62Ibid., para. 51 (referring, for instance, to Japan's submission, para. 31). Korea contends there that
Japan itself admits that the Cabinet Order does not require a full new investigation with new evidence.
63See ibid., paras. 50 and 51 (referring to Articles 7(2) and 9(2) of the Cabinet Order Relating to
Countervailing Duty , supra, footnote 32), which provide respectively that the Minister of Finance "may", if
deemed necessary request interested parties to present evidence or testif y; and "may", if necessary, request
interested parties, industrial users and others to pr esent their views in writing that are relevant to the
investigation).
64Ibid., para. 54.
65See ibid. Further, Korea argues that even the interest ed parties, including Hynix, have stated that
there is no need for the Japanese government to follow the procedural steps referred to by Japan (referring to the
submission of Hynix Semiconductor, Inc. to the JIA, dated 13 March 2008, p. 20).
66See Korea's submission, paras. 44 and 65.

"particular circumstances" which hinder prompt compliance.
67 Korea rejects any argument that the
absence of regulations specifically addressing im plementation of adverse rulings constitutes a
"particular circumstance" justifying delay; conve rsely, such an absence of regulations favours
exercising maximum discretion to achieve prompt compliance. Korea submits that, since Japan, as a
respondent, has never faced an adverse trade remedy ruling before, it would be inappropriate to refer
to these as "procedural conventions"
68 regarding implementation. Further, Japan's claim of great
"technical complexity"69 in this case does not rise to the level of "particular circumstances", bearing in
mind the fact that the circumstances and fi ndings made in the present case call for quick
implementation70, and that far more constitutionally comp lex legislation was at issue in other
Article 21.3(c) arbitrations.71 For Korea, Japan's reference to "p articular circumstances" is an excuse
to "slow-walk"72 through the process of implementation, whilst maintaining an illegal measure.
20. Finally, Korea submits that Japan's proposed implementation steps for its de novo
investigation are "unjustified". 73 Japan fails to explain the reason for the delay of over six weeks
following the adoption of the Panel and Appellate Body Reports for initiating its de novo investigation
(that is, on 30 January 2008), and for taking additional evidentiary steps that are inconsistent with the
Panel and Appellate Body findings. Korea requests that these delays be taken into account to shorten
the time period of the Award. Korea also doubts that there could be any new relevant evidence
obtained from questionnaires submitted by 13 March 2008. It submits that Japan's request for time
for the distribution of new (and responses to) qu estionnaires and on-site verification should be
rejected as "totally unreasonable" 74, especially in the light of the findings in this case. 75 Korea also
contends that, instead of the 120 days requested for preparation of the verification report and a
further 30 days for the statement of Essential Facts 76, the preparation of the statement of Essential
Facts could be completed in one week, given th at "all essential facts are known", and since Japan
must have already studied the Panel and Appellate Body Reports. Korea submits that completion of
the JIA determination, which will be largely redu ndant with the Essential Facts, could also be
achieved in "less than a week". 77 Korea also considers "unacceptable" 78 the 45 days requested by

67See Korea's submission, para. 63.
68Ibid., para. 65.
70See ibid., para. 66.
71Ibid., paras. 68-69 (referring to, inter alia , Award of th e Arbitrator, US – Gambling , paras. 44
and 46-47, where the arb itrator referred to the overlapping federal and state jurisdictions, criminal and civil
laws, as well as sensitive issues of public morals and order).
72Ibid., para. 44.
73Ibid., heading VI.B.3, p. 15.
74Ibid., para. 76.
75See ibid., paras. 75-78 (referring to Japan's submission, paras. 31-39).
76Ibid., para. 79 (referring to Japan's submission, paras. 40-47).
77Ibid., para. 80 (referring to Japan's submission, paras. 50-52).
78Ibid., para. 81.

Japan for the Council Review and Cabinet Order pr ocess, and submits that less than 10 days is
sufficient since the Council can immediately revi ew the DSB's recommenda tions and rulings, and
since immediate final executive Cabinet action can thereafter be taken. 79 In the light of a 25-day
precedent established by Japan in a previous anti- dumping duty dispute, Korea contends that the
entire process could be completed by 7 April 2008.80
21. Korea argues that, through its request for a new investigation, Japan attempts to introduce
"ex post facto rationalizations" 81, and create an entirely new eviden tiary record for maintaining the
illegal countervailing duty measure in place. Korea s uggests that, just as the Appellate Body rejected
a similar attempt by Japan in the original proceedings 82, Japan should not be allowed to "circumvent"
the rules against allowing ex post facto rationalizations and the intr oduction of non-record new
evidence, because, otherwise, the JIA would go on a "fishing expedition" to try to develop "just the
sort of facts"83 previously rejected by the Panel and Appellate Body.
22. In sum, Korea contends that Japan is oblig ated to comply immediately; that Japan
fundamentally misunderstands its obligations; that Japan has already failed to exercise the necessary
discretion to accelerate its processes; that Japan is attempting to take advantag e of its alleged gap in
administrative provisions as an excuse for unwarranted delay; that there is no administrative practice
for Japan to rely on as an excuse; that Japan has failed to establish "particular circumstances"; that
Japan's proposal fails to exercise all available execu tive discretion; and, that Japan has no right to
continue to impose illegal duties while it initiates a wholly new investigation. 84 For these reasons,
Korea believes that five months from the date of adoption is a reasonable period of time for Japan's
implementation of the DSB's recommendations and rulings.

79See Korea's submission, para. 81 (referring to Japan's submission, paras. 53-57).
80Ibid., para. 82 (referring to an anti-dumping investigation of Certain Polyester Staple Fibre Yarn
from Korea and Chinese Taipei ). In that case, Japan took only 25 days from comments on Essential Facts to
final approval by the Japanese Cabinet.
81Ibid., para. 85.
82Ibid., paras. 84-86 (referring to Appellate Body Report, para. 159). See also Appellate Body Report,
US – Countervailing Duty Investigation on DRAMS, para. 175.
83Ibid., para. 87.
84See ibid., para. 8.

III. Reasonable Period of Time
A. Scope of the Arbitrator's Mandate under Article 21.3(c) of the DSU
23. The Panel and Appellate Body Reports
85 in this dispute were adopted by the DSB on
17 December 2007. On 15 January 2008, Japan inform ed the DSB of its intention to comply with the
DSB's recommendations and rulings, but stated that it would need a reasonable period of time in
which to do so. 86 As discussions between the parties failed to produce a mutually agreed period of
time, the parties asked me to act as Arbitrator to determine the "reasonable period of time" for Japan
to implement the recommendations and rulings of the DSB, pursuant to Article 21.3(c) of the DSU.
24. Article 21.3 of the DSU provides, in relevant part:
If it is impracticable to co mply immediately with the
recommendations and rulings [of the DSB], the Member concerned
shall have a reasonable period of time in which to do so. The
reasonable period of time shall be:

(c) a period of time determined through binding arbitration
within 90 days after the date of adoption of the
recommendations and rulings. In such arbitration, a guideline
for the arbitrator should be that the reasonable period of time
to implement panel or Appe llate Body recommendations
should not exceed 15 months from the date of adoption of a
panel or Appellate Body report. However, that time may be
shorter or longer, depe nding upon the particular
circumstances. (footnotes omitted)
25. It is well accepted that my remit as Arbitrator in these Article 21.3(c) proceedings is
limited
 87: it consists of determining what constitutes a "reasonable period of time" to implement the
recommendations and rulings made by the DSB in th e underlying WTO dispute. At the oral hearing
in this arbitration, both Japan and Korea accepted th at the principles articulated in the most recent
arbitration award, EC – Chicken Cuts , should guide me in executing my mandate. Those principles
include the following:

85Panel Report, WT/DS336/R; Appellate Body Report, WT/DS336/AB/R.
86See WT/DSB/M/244, para. 15.
87See, for instance, Award of the Arbitrator, EC – Chicken Cuts, para. 49; and Award of the Arbitrator,
Canada – Pharmaceutical Patents, para. 44.

• that an implementing Member has a measure of discretion in selecting the means of
implementation that it deems most appropriate88;
• that an arbitrator should base his or her determination on the shortest period of time
permissible within the legal system of the implementing Member89;
• that an arbitrator should bear in mind that the implementing Member is expected to use
whatever flexibility is available within its le gal system in its efforts to fulfil its WTO
obligations.90 Such flexibility, however, need not necessarily include recourse to
"extraordinary" procedures91; and
• that the "particular circumstances" of a dispute may affect the calculation of the
reasonable period of time, making it "shorter or longer".92
26. Whilst my task is to determine by when an implementing Member must comply, to do so
requires that some consideration be given to the means of implementation chosen by the implementing
Member. As one arbitrator has explained: "[t]ur ning to the question of what would constitute the
'reasonable period of time' for implementation in this case, I need to look first at the type of measure
proposed to be used for implementation." 93 In other words, to determine when a Member must
comply, it may be necessary to consider how a Member proposes to do so.
27. An implementing Member has a discretion in choo sing the means of implementation, but this
discretion is not unlimited 94; the method chosen must be co nsistent with a Member's WTO
obligations.95 In that vein, even though Korea and Japan advance different arguments as to the means
of implementation that could be taken in this case, they accept as a general premise that "an

88See Award of the Arbitrator, EC – Chicken Cuts , para. 49 (referring to Award of the Arbitrator,
Canada – Pharmaceutical Patents, paras. 41-43; Award of the Arbitrator, Chile – Price Band System, para. 32;
Award of the Arbitrator, EC – Tariff Preferences , para. 30; Award of the Arbitrator, US – Oil Country Tubular
Goods Sunset Reviews , para. 26; Award of the Arbitrator, US – Gambling , para. 33; and Award of the
Arbitrator, EC – Export Subsidies on Sugar, para. 69).
89See Award of the Arbitrator, EC – Chicken Cuts , para. 49 (referring to Award of the Arbitrator,
Chile – Price Band System , para. 34; Award of the Arbitrator, Canada – Pharmaceutical Patents , para. 47;
Award of the Arbitrator, EC – Tariff Preferences, para. 26; Award of the Arbitrator, US – Oil Country Tubular
Goods Sunset Reviews, para. 25; and Award of the Arbitrator, EC – Export Subsidies on Sugar, para. 61).
90See Award of the Arbitrator, EC – Chicken Cuts , para. 49 (referring to Award of the Arbitrator,
Chile – Price Band System, para. 39; Award of the Arbitrator, EC – Tariff Preferences, para. 36; and Award of
the Arbitrator, US – Offset Act (Byrd Amendment), para. 64).
91Award of the Arbitrator, EC – Chicken Cuts , para. 49 (referring to Award of the Arbitrator, Korea –
Alcoholic Beverages, para. 42; Award of the Arbitrator, Chile – Price Band System, para. 51; and Award of the
Arbitrator, US – Offset Act (Byrd Amendment), para. 74).
92Award of the Arbitrator, EC – Chicken Cuts, para. 49.
93Award of the Arbitrator, US – 1916 Act, para. 34.
94See Award of the Arbitrator, EC – Export Subsidies on Sugar, para. 69; and Award of the Arbitrator,
EC – Chicken Cuts, para. 56.
95See Award of the Arbitrator, EC – Export Subsidies on Sugar, para. 69.

implementing Member ... has a measure of discretion in choosing the means of implementation, as
long as the means chosen are consistent with the recommendations and rulings of the DSB and with
the covered agreements".
96 In assessing whether the means chosen by the Member is consistent with
the recommendations and rulings of the DSB, I must consider whether the implementing action falls
within the range of permissible actions that can be taken in order to implement the DSB's
recommendations and rulings.97 This does not mean that I am pe rmitted to determine the consistency
with WTO law of the measure taken to comply. This can only be judged in Article 21.5 proceedings.
Article 21.3(c) arbitrations are distinct and concern by when implementation must take place. In
making this determination, the means of implemen tation available to the Member concerned is a
relevant consideration.
28. Finally, I am guided by previous arbitrators' awards which place the overall burden of proof
on the implementing Member to prove that, if it cont ends that immediate compliance is impracticable,
the period of time proposed constitutes a "reasonable period of time". 98 This burden was accepted by
Japan at the oral hearing in this case.
B. Factors Affecting the Determination of the Reasonable Period of Time
1. Choice of Means of Implementation in the Light of the DSB's
Recommendations and Rulings
29. The dispute in this case involves a challenge by Korea regarding a countervailing duty
investigation conducted by the JIA on dynamic random access memories manufactured by the Korean
company, Hynix Semiconductor, Inc. The critical issue in the case was whether the JIA properly
found that Hynix had received count ervailable subsidies, within the meaning of Part V of the SCM
Agreement, as a result of two debt-restructuring programmes entered into by Hynix and its creditors in
October 2001 and December 2002.
30. For the purposes of this Article 21.3(c) arbitra tion, I refer to the relevant findings of the
Appellate Body, namely, that it:

96Award of the Arbitrator, EC – Hormones , para. 38. (emphasis added) See also Award of the
97I find support for my interpretation in the wording of the provisions of Article 21 of the DSU.
According to Article 21.1, "prompt compliance with the recommendations and rulings of the DSB is essential"
(emphasis added); Article 21.3 provides that "[i]f it is impracticable to comply immediately with the
recommendations and rulings", the Member shall have a reasonable period of time to do so (emphasis added);
and Article 21.3(c) states that the "reasonable period of time to implement that panel and Appellate Body
recommendations should not exceed 15 months ... " (emphasis added).
98See Award of the Arbitration, Canada – Pharmaceutical Patents, para. 47; Award of the Arbitrator,
US – 1916 Act, para. 33.

• upheld the Panel's findings, in paragraphs 7.282 and 8.2(b) of the Panel Report, that the
JIA acted inconsistently with Articles 1.1(b) and 14 of the SCM Agreement by
determining that the December 2002 Restructuring conferred a "benefit" on Hynix;
• upheld, albeit for different reasons, the Panel' s findings, in paragraphs 7.316 and 8.2(c)
of the Panel Report, that the JIA calculate d the amount of benefit conferred on Hynix
by the October 2001 and December 2002 R estructurings inconsistently with
Articles 1.1(b) and 14 of the SCM Agreement; and
• upheld the Panel's finding, in paragraphs 7. 361 and 8.2(e) of the Panel Report, that
Japan acted inconsistently with Article 19.4 of the SCM Agreement by levying
countervailing duties on imports which the JIA itself had found were not subsidized at
the time of duty imposition [with respect to the October 2001 Restructuring].99
31. Based on these and other findings, the Appellate Body "recommend[ed] that the DSB request
Japan to bring its measure, found in [its] Report, a nd in the Panel Report as modified by [its] Report,
to be inconsistent with the SCM Agreement , into conformity with its obligations under that
Agreement."100
32. Japan requests a period of 15 months to bring its measure into conformity in this case. Korea,
on the other hand, argues that a period of only 5 m onths is required for pur poses of implementation,
and that if these arbitration proceedings extend beyond that period of time, I should grant Japan a
further two weeks from the date of the arbitration award to implement.
33. In its written submission, Korea argues that only two of the Appellate Body findings referred
to above are "relevant"101 for purposes of this arbitration. First, the finding that the JIA had allocated
the useful life of a non-recurring subsidy provided in October 2001 to the years 2001 to 2005, but had
inconsistently levied countervailing duties in 2006 (the "allocation finding") (referred to at
paragraph 8, third bullet, above) 102; and secondly, the finding that the JIA had determined that a
benefit had been conferred as a result of the Dece mber 2002 Restructuring in a manner inconsistent
with the requirements of Articles 1.1(b) and 14 of the SCM Agreement (referred to at paragraph 8,
first bullet, above). 103 Korea also contends that, given their "unambiguous and clear" nature 104, the

99Appellate Body Report, para. 280(b), (c), and (e), respectively.
100Ibid., para. 281.
101Korea's submission, para. 16.
102Ibid., paras. 17-21.
103Ibid., paras. 22-25.
104Ibid., para. 59 (referring to Award of the Arbitrator, EC – Chicken Cuts, paras. 57-63).

Appellate Body findings made with respect to th ese aspects of the JIA's determination require that
Japan implement by withdrawing the countervailing duties.
105
34. At the oral hearing, Korea explained that, with regard to the "allocation finding" made in
respect of the October 2001 Restructuring, Japan had made a determination that the useful life of the
non-recurring subsidy ended in 2005 and that Japan, therefore, could not legally impose a
countervailing duty measure with respect to the subsidies resulting from the October 2001
Restructuring. As regards the second finding, in Korea's view, the Appellate Body found that, "on
substance", the Panel had conducted an objective appraisal of the JIA's determination regarding the
Deutsche Bank Report (on which the JIA relied to make a finding that four of Hynix's financial
creditors did not enter into the December 2002 R estructuring with Hynix on commercially reasonable
terms), and confirmed the finding of the Panel that the JIA had acted inconsistently with
Articles 1.1(b) and 14 of the SCM Agreement by finding that a benefit had been conferred by the
December 2002 Restructuring. Korea explained that, since the existence of a benefit is indispensable
in proving that a subsidy has been granted under the SCM Agreement , Japan has no legal basis to
maintain the countervailing duty with regard to the December 2002 Restructuring.
35. Korea highlights that "prompt compliance" is required under Article 21.1 of the DSU; and
that this principle informs Article 21.3 of the DS U. Where compliance is not "immediate" because it
is judged impracticable106, it should nonetheless be achieved in the shortest period of time possible. 107
Korea contends that Japan bears the burden of prov ing that anything beyond "immediate" compliance
is required to implement the DSB's recommendations and rulings in this case.108
36. In addition to the two Appellate Body findings re ferred to by Korea, Japan considers relevant,
as well, the finding of the Appellate Body that the JIA calculated the amount of benefit conferred by
both Restructurings in a manner inconsiste nt with Articles 1.1(b) and 14 of the SCM Agreement
(referred to at paragra ph 8, second bullet, above). 109 According to Japan, all three findings are
capable of being remedied through the implemen ting action it proposes for complying with the DSB's

105Korea's submission, paras. 28, 45, and 62.
106At the oral hearing, Korea explained that a period of five months was selected out of deference to
these arbitration proceedings , as it represented the shortest possible time for revoking the countervailing duty
order, taking into account the time taken from adoption of the Appellate Body and Panel Reports, as well as
these proceedings.
107Korea's submission, para. 34 (referring to Award of the Arbitrator, EC – Hormones , paras. 26
and 38); see also para. 46.
108Ibid., para. 37.
109For Korea, this additional finding does not affect its argument that imme diate compliance through
revocation is the only way to implement in this case.

recommendations and rulings. In th is regard, as I explain below 110, Japan contends that replacement
of the Cabinet Order authorizing the imposition of the original countervailing duty order—which was
the subject of the underlying dispute—by a new Cabinet Order is requi red under its laws and
regulations to implement the DSB's recommendations and rulings. This new Cabinet Order may only
be issued following an "investigation" conducted in conformity with various procedural requirements
specified under Japan's laws and regula tions (comprising the Customs Tariff Law 111; the Cabinet
Order Relating to Countervailing Duty 112; and the Guidelines for Procedures Relating to
Countervailing and Anti-Dumping Duties 113). Japan further rejects Korea's argument that the nature
of the Appellate Body's findings precludes modifi cation of the countervailing duty order through an
investigation. Japan notes that the Appellate B ody's "allocation finding" was based on an "implicit"
finding that the benefit had expired after a period of five years, ending in 2005 114; and that both
findings made with regard to the issue of "benefit" suggest that the JIA erred in the grounds selected
and explanations provided in making these determinations. 115 Contrary to Korea's arguments, Japan
contends that the nature of the specific findings of the Appellate Body require a new investigation to
supplement the current factual record, as well as a re-exa mination of that factual record, in the light of
the DSB's recommendations and rulings.116
37. In considering the parties' arguments as rega rds the permissible means of implementation,
I recall that a Member whose measure has been found to be inconsistent with the covered agreements
may generally choose between two courses of action: withdrawal of the measure; or modification of
the measure by remedial action. 117 While withdrawal may be the preferred option to secure "prompt
compliance", a Member may, where withdrawal is deemed impracticable, choose to modify the
measure, provided that this is done in the short est time possible, and that such modification is
permissible under the DSB's recommendations and rulings.

110See infra, paras. 41 and 42.
111See supra, footnote 24.
112See supra, footnote 32.
113See supra, footnote 34.
114At the oral hearing, Japan referred to Appellate Body Report, para. 214.
115At the oral hearing, Japan referred to Appellate Body Report, para. 163, where the Appellate Body
recalled with approval the Panel's finding that "an objective and impartial investigating authority could not have
rejected the Deutsche Bank Report on the grounds selected by the JIA". Japan also referred to the Appellate
Body's statement regarding the calculation of the amount of benefit conferred, in which the Appellate Body
noted that "the JIA did not sufficiently explain, in its determination, how it reached the conclusion that the value
of [Hynix's shares] was zero from the perspective of Hynix, the recipient." (Ibid., para. 178)
116For instance, Japan explained at the oral hearing that, as regards the finding on the Deutsche Bank
Report, the JIA needed to conduct a review and reconsider the "grounds selected" by the JIA.
117See for instance, Award of the Arbitrator, US – Offset Act (Byrd Amendment), para. 50.

38. The Appellate Body has said, in US – Oil Country Tubular Goods Sunset Reviews
(Article 21.5 – Argentina) , that a Member's right to implement extends to conducting a re-
determination relating to the initial pe riod of investigation, and that this right does not exclude having
recourse to new facts.
118 However, as Japan accepted at the oral hearing, any investigation should not
amount to a de novo review by the JIA; and any new evidence must be confined to the period
examined in the original countervailing duty investigation. 119 Within these parameters, Japan may
choose to modify its determination based on the facts on record. It may also seek to gather additional
facts relating to the initial investigation period to the extent, and only to the extent, that this is
necessary to, and capable of, bringing the inconsiste nt elements of its original determination into
compliance.
39. There are very real concerns as to how far the findings by the Appellate Body, as adopted by
the DSB, lend themselves to remedial action through the new investigation proposed by Japan. In
particular, as regards the "allocation finding", the s ubsidy was found to have been exhausted by 2005,
and I find it difficult to conceive of new informati on that would allow the JIA to remedy this finding,
short of withdrawal of the counter vailing duty relating to the October 2001 Restructuring. Nor is this
less so because the "allocation finding" is "implicit". However, in this case, I cannot say that all the
recommendations and rulings of the DSB are not ca pable of implementation by modification; and
hence I must make a determination as to the reas onable period of time that would facilitate such
modifications. My questioning of Japan concerning the scope of the new evidence that it considered
necessary, and which the JIA could reasonably be expected to gather, did not yield clear or conclusive
answers. However, I am not re quired to be certain that Japan will actually be able to collect
information which it contends to be necessary; rath er, such considerations will inform my assessment
of what period of time is reasonable for Japan to modify its measure.
2. The Specific Steps of Implementation
40. I turn now to consider what, in the light of the specific steps proposed by Japan, would
constitute a "reasonable period of time" within wh ich Japan could bring into compliance, through
modification, its measure found to be inconsistent with the relevant provisions of the SCM Agreement.
As mentioned above, the burden rests on Japan to prove that the period of 15 months that it requests
constitutes such a "reasonable period of time".
41. Japan asserts that the only way under its law to modify a countervailing duty order that has
been found to be inconsistent with the SCM Agreement is through replacement of the Cabinet Order

118See Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 –
Argentina), para. 173.
119See for instance, Appellate Body Report, US – Cotton Yarn, paras. 76-79.

authorizing the original countervailing duty order, by a new Cabinet Order. To do so, Japan explains
that the Japanese government must conduct a new inv estigation pursuant to Article 7(17) of Japan's
Customs Tariff Law. According to that provision, "[w]here there are some changes in circumstances
with regard to the specified product ... the Governme nt may, if it is found to be necessary, as may be
prescribed in a Cabinet Order, modify or abolish" the original countervailing duty. 120 Japan contends
that this provision must be read in conjunction with Article 7(19) of the Customs Tariff Law, which
empowers the Japanese government to initiate, if it is found to be necessary, an investigation as to
whether these "changes in circumstances" exist.
42. Following questioning at the oral hearing, I accep t Japan's submission that an investigation,
conducted pursuant to the aforem entioned provisions of the Customs Tariff Law, constitutes the only
way to modify an original countervailing duty orde r found by the DSB to be inconsistent with the
SCM Agreement121, without having recourse to "extraordinary" means, which, in any event, Japan is
not expected to do for purposes of implementation. 122 Japan conceded, at the oral hearing, that the
existence of the "change in circumstances", as contem plated under Article 7(19), is evident on the
facts of this case, as it arises from the DSB's recommendations and rulings and does not require a
separate enquiry or investigation. However, Japan explained that a cumulative reading of
Articles 7(17) and 7(19) leads to the conclusion th at an investigation is required to ascertain the
manner in which the original countervailing duty order should be modified.
43. I therefore focus my attention on the step s proposed by Japan in conducting such an
investigation. Japan contends that I should allo cate a period of approximately 13 months and 15 days
(out of the 15-month period requested) for the JIA's inv estigation. This investigation, Japan alleges,
requires a preparatory phase of 45 days that has already been completed. 123 Japan contends that the
actual investigatory phase will take one year, and involves: the acceptance of submissions from
interested parties; the issuance and collection of questionnaires to interested parties based on these
submissions124; on-the-spot investigations conducted by th e JIA; the issuance of reports based on
these on-the-spot investigations; the writing up of the Essential Facts by the JIA and provision for

120Supra, footnote 24.
121At the oral hearing, I inquired into the releva nce of Article 98(2) of Japan's Constitution (which
provides that: "The treaties concluded by Japan and estab lished laws of nations shall be faithfully observed");
as well as Article 7(33) of the Customs Tariff Law which provides that: "In addition to the matters as provided
for in each preceding paragraph, any necessary matter s on the application of countervailing duty shall be
prescribed by a Cabinet Order". (See supra, footnote 24)
122See for instance, Awar d of the Arbitrator, EC – Chicken Cuts , para. 49; Award of the Arbitrator,
Korea – Alcoholic Beverages , para. 42; Award of the Arbitrator, Chile – Price Band System , para. 51; Award
of the Arbitrator, US – Offset Act (Byrd Amendment), para. 74.
123See supra, para. 11.
124At the oral hearing, Japan explained that it wa s in the process of pr eparing and transmitting
questionnaires based on comments it had received so far fr om interested parties that had voluntarily submitted
evidence and comments after having been informed of the initiation of an investigation.

commentary by interested parties; and the preparation of the final written determination by the JIA to
be reviewed by the Council and Bureau before presentation to, and decision-making by, the Cabinet in
the final phase of implementation.
125
44. Japan explains that it does not intend to conduct a de novo investigation in the sense of re-
doing all aspects of the investigation 126, but that I should give due consideration to the fact that the
predominant part of the evidence from the original investigation has to be reviewed127 and that there is
a chance that additional evidence co llected may interact in a new way with the existing evidence on
record.128 Having regard to the requirements of promptn ess stipulated in Article 21.3 and in previous
awards, Japan notes that the timeframes it has indicat ed for each of the various stages of the proposed
"change of circumstances" investigation have been shortened from the original investigation, which in
its entirety lasted 18 months.129
45. Finally, Japan contends that I should take into account as a "particular circumstance" of this
case the due process rights of interested parties. Japan submits that interested parties play an
important role in providing and verifying inform ation, and respect for their rights by Japan has
become a "standard practice" in Jap an's trade remedy investigations. 130 Out of deference to these
rights, the JIA must carry out all of the steps that are normally followed in original investigations, and
it has no discretion to omit such procedural steps.131
46. In response to these arguments, Korea stat es that, "even if it could go along with" 132 Japan's
contention that an investigation is in principle requi red, the time indicated by Japan in its submission
is unjustified 133 and should be expedited. For Korea, a period of no more than five months would
allow Japan to utilize fully its administrative di scretion and comply with the recommendations and
rulings of the DSB in this case. Korea further highlig hts that the procedural rules referred to by Japan
that govern the conduct of investigations do not establish mandatory timeframes for the preparatory or
investigatory steps requested by Japan 134, a point conceded by Japan at th e oral hearing. For Korea,

125See supra, paras. 12 and 13.
126Japan explained at the oral hearing that it did not intend to conduct a full investigation (for instance,
it would not engage in a causation and injury analysis). Japan contends that 80 per cent of the evidence on
record has to be reviewed.
127Japan's statement at the oral hearing.
128See Japan's submission, para. 21.
129See ibid., para. 28.
130See ibid., para. 17.
131See ibid., paras. 19 and 27.
132Korea's statement at the oral hearing.
133See Korea's submission, Section 3, p. 15.
134See ibid., paras. 70-83.

it is also far from clear that all the procedural steps proposed by Japan are mandatory under Japanese
law for the protection of due process rights of interested parties.135
47. I recall the requirement for promptness under Article 21.3, and the imperative to implement in
the shortest time possible in the light of a Member's legal system. Previous arbitrators have explained
that, compared to the other types of action generally taken to implement, such as legislative action or
administrative rule-making, administrative action should be less time-consuming, and may not require
the full 15-month guideline mentioned in Article 21.3(c).
136 Although Japan is hesitant to characterize
its proposed action as one involving a purely "adm inistrative action", I would be inclined to
characterize it as such since no change of laws or subordinate legislation is required. However,
nothing turns upon making a conclusive characteriza tion, since, on Japan's own account of the legal
process that is required to effect the modification of its measure, there is no legal impediment to using
a shorter period to consider the limited number of DSB rulings of inconsistency. Further, prior
awards have emphasized that an implementing Memb er is required to take full advantage of the
flexibility inherent in its legal system in order to ensure that implementation takes place in accordance
with the requirement for promptness in Article 21 of the DSU. The existence of this flexibility may
manifest itself in, for instance, th e absence of mandatory steps to be taken under that Member's laws
and regulations in carrying out the proposed implementation; or similarly, in the absence of
mandatory time periods within which such steps must be taken.
137
48. Not all of the investigatory steps, or the timeframes for these steps, appear to be mandatory.138
In my view, the flexibility in Japan's legal structur e speaks in favour of a shorter period of time than
that requested by Japan. Japan a ppears to justify the time-limits i ndicated in its submissions on its
practice and experience in original investigations. In my view, reliance on time periods used in
original investigations is inappr opriate, because Japan is only requir ed to conduct a re-determination

135See Korea's submission, paras. 50 and 51. Korea refers to Articles 7(2) and 9(2) of the Cabinet
Order, which states that the Minister of Finance " may, if deemed to be necessa ry in the course of the
investigation, request interested parties to present evidence or testify", and " may, if necessary, in the course of
investigation, request interested parties, industrial users of such products under investigation or representative
consumer-organizations of such product to present their view in writing which are relevant to the investigation".
(Supra, footnote 32 (emphasis added))
136See for instance, Award of the Arbitrator, Australia – Salmon, para. 38 (quoting Award of the
Arbitrator, EC – Hormones , para. 25: "when implementation can be effected by administrative means, the
reasonable period of time should be 'considerably shorter than 15 months'").
137See for instance, Award of the Arbitrator, US – 1916 Act , para. 39; Award of the Arbitrator, EC –
Tariff Preferences, para. 36; Award of the Arbitrator, EC – Export Subsidies on Sugar, paras. 76; and Award of
the Arbitrator, EC – Chicken Cuts, paras. 79-80.
138At the oral hearing, Japan explained that, although not all of the steps are mandatory, certain others
are, such as the initiation of an investigation and the pr eparatory phase. Further, once interested parties have
submitted information, it is necessary to issue questionna ires, conduct the necessary "on-the-spot" verifications,
and, finally, prepare the final written submission. I do not doubt, therefore, that certain steps taken by the JIA in
conducting an investigation, even if themselves not mandatory, nevertheless require follow-up action by the JIA
in order to ensure that information, albeit voluntarily submitted by interested parties, is verified.

to implement a limited number of DSB rulings of inc onsistency. Further, the exigency of promptness
requires that Japan utilize the flexibility in its lega l system when making a re-determination in order
to implement. Japan has not show n, for instance, that its current regulatory structure prevents it from
acting with greater expedition, especially in respect of the non-mandatory steps and timeframes.
Further, as explained above, given the limited range of findings to be implemen ted, the nature of the
Appellate Body's findings, as well as the comprehensive, existing factual record
139, it does not appear
to me that a replication of a complete investigation, with similar time periods for each stage of the
investigation, is justified. In fact, allowing Japan as much time as it requests could raise the risk that
an investigatory process might involve elements of de novo review, which is not the type of action
permitted in the process of making a re-determination.
49. I acknowledge Japan's reference to awards of arb itrators in which it was stated that, even if
some steps and time periods are not required by la w, they can nonetheless be utilized in order to
ensure that implementation is effected in a tran sparent and efficient manner, fully respecting due
process for all parties involved. 140 Here, Japan justifies its referenc e to numerous investigatory steps,
as well as time periods associated with these steps, on what it has termed its "standard practice" of
respecting the due process rights of interested parties. The arbitrator in EC – Chicken Cuts recognized
that, even if certain timeframes and procedures were not mandated, they were based on "standard
practice", which the European Communities in that case had substantiated with evidence.141
50. The case before me is somewhat different. Japan has not shown the existence of any
"standard practice" with respect to due process ri ghts in investigations conducted for implementation
purposes, since, by Japan's own admission, it h as never had to implement DSB recommendations and
rulings in a trade remedy dispute. As I have already explained above, Japan's reliance on "standard
practice" followed in original investigations is not comparable, nor appropriate, in the light of the
difference in the nature and scope of an inves tigation that may prove necessary in the process of
modifying a determination for implementation purposes.
51. Nor has Japan explained sufficiently the specific investigatory steps that require the input and
participation of interested parties to justify protracted time periods in order to ensure their due process
rights, as opposed to the steps the JIA itself is requir ed to take in the exer cise of its own duties.
Further, due process is a flexible concept to be applied to the specific requirements of the case—in
this case, the process of implementing DSB rulings. A balance must be struck between respecting due

139Japan itself admits that the underlying determination at issue resulted from the JIA's consideration of
over 2000 pieces of evidence and a report that spanned over 500 pages. (See Japan's submission, para. 21)
140See, for instance, Award of the Arbitrator, US – Oil Country Tubula r Goods Sunset Reviews ,
para. 51.
141Award of the Arbitrator, EC – Chicken Cuts, para. 79.

process rights of interested parties and the prompt ness required in implementation. In determining
that balance, I note that considerable opportunity was already afforded to interested parties to
participate in the original investigation conducted by the JIA. It seems then that it would be
appropriate to provide a shorter time to such interested parties in the context of an investigation that is
far more limited in scope, and which has been initiated to implement DSB recommendations and
rulings.
52. With regard to the final stage of implementa tion referred to by Japan—that is, the separate
reviews by the Council and the Bureau, followed by decision-making by the Cabinet 142—I recognize
that these stages are mandatory un der Japanese law in order for a countervailing duty order to take
effect and enter into force. 143 I note as well that there are no specified time-limits in Japan's
legislation for the steps in this process, and that Japan requests a period of 45 days for completion of
this final stage. Japan has not explained how ex actly it has allocated the time between the three
independent processes that must take place at this stage. Korea has argued that the timeframe for
review by the Council and Bureau should be shortened in the light of the "clear" 144 DSB
recommendations and rulings which were adopted in mid-December 2007. I also note Korea's
reference to a precedent involving an anti-dumping dut y original investigation, where the time taken
from commentary on the Essential Facts to final a pproval by the Japanese Cabinet took 25 days,
rather than the 75 days requested by Japan. 145 Even though that case might represent an
"extraordinary" instance of an accelerated procedure, and recourse to such extraordinary procedures is
not required for purposes of implementation 146, the existence of such precedent nevertheless
demonstrates that this process can be expedited.
IV. Award
53. Before concluding, I recall that Japan explained that, at the time of the oral hearing, the JIA
had received submissions from interested parties a nd was in the process of preparing and distributing
questionnaires to interested parties. Japan also noted that, as a result of these submissions from
interested parties, it had collected certain additi onal pieces of evidence. Based on my analysis above,
and in the light of the limited number of DSB rulings of inconsistency, the steps required to complete
the investigation need not entail extensive further investigation.

142See supra, para. 13.
143Japan's submission, paras. 53-56 (referring to, inter alia, Articles 13 and 16 of the Cabinet Order,
supra, footnote 32). See also Article 3(1) of the Law to Establish the Cabinet Legislation Bureau, supra,
footnote 44.
144See Korea's submission, paras. 5 and 59.
145See ibid., para. 82 (referring to the anti-dumping investigation of Certain Polyester Staple Fibre
Yarn from Korea and Chinese Taipei).
146See for instance, Award of the Arbitrator, EC – Chicken Cuts, para. 56.

54. As approximately four months and three week s will have elapsed from the adoption of the
Panel and Appellate Body Reports by the time of circulation of this Award, and considering the
further steps referred to by Japan—completion of its investigation, and review of the determination by
the Council and Bureau before final decision-making by the Cabinet—I consider that a further four
months is sufficient for Japan to complete implemen tation in this case, given the appropriate scope of
what requires consideration by the JIA.
55. I therefore determine that the "reasonable period of time" for Japan to implement the
recommendations and rulings of the DSB in this dispute is eight months and two weeks from
17 December 2007, which was the date on which th e DSB adopted the Panel and Appellate Body
Reports. The reasonable period of time will therefore expire on 1 September 2008.

Signed in the original at Geneva this 18th day of April 2008 by:

David Unterhalter
Arbitrator