TURKEY – MEASURES AFFECTING THE IMPORTATION OF RICE
Document: Report of the Panel
Date: 21 September 2007
Document codes: WT/DS334/R
Complainant: U.S.
Respondent: Turkey
Third parties: Argentina, Australia, China, Egypt, EU, South Korea, Pakistan, Thailand
Dispute stage: Panel
Agreements cited: Art. XI:1, X:1, X:2, III:4, X:3(a)  GATT 1994Art. 4.2  AgricultureArt. 1.4, 3.3, 3.5(e), 3.5(f), 3.5(b), 3.5(d), 3.5(g), 3.5(h), 1.2, 1.3, 1.5, 1.6, 3.2, 3.5(a), 5.1, 5.2, 5.3, 5.4  Import LicensingArt. 2.1, Annex 1  Trade-Related Investment Measures (TRIMs)

TURKEY – MEASURES AFFECTING THE
IMPORTATION OF RICE

Report of the Panel

I. INTRODUCTION
1.1 On 2 November 2005, the United States requested consultations with Turkey pursuant to
Articles 1 and 4 of the Understanding on Rules a nd Procedures Governing the Settlement of Disputes
(DSU), Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994), Article 6 of
the Agreement on Import Licensing Procedures (Im port Licensing Agreement), Article 8 of the
Agreement on Trade-Related Investment Measures (TRIMs Agreement), and Article 19 of the
Agreement on Agriculture with respect to Turkey's alleged import restrictions on rice from the United
States.1
1.2 On 16 November 2005, Australia and Thailand requested, pursuant to paragraph 11 of
Article 4 of the DSU, to be joined in the consultations requested by the United States with Turkey.2
1.3 On 6 February 2006, the United States request ed the establishment of a panel pursuant to
Article 6 of the DSU, Article 6 of the Im port Licensing Agreement, Article 8 of the
TRIMs Agreement, and Article 19 of the Agreemen t on Agriculture, concerning Turkey's alleged
import restrictions on rice.3
1.4 At its meeting on 17 March 2006, the Dispute Settlement Body (DSB) established a Panel
pursuant to the request of the United States in document , in accordance with Article 6 of
the DSU.4
1.5 On 20 July 2006, the United States requested the Director-General to determine the
composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU. Accordingly, on
31 July 2006, the Director-General composed the Panel as follows:
 Chairperson: Ms Marie-Gabrielle Ineichen-Fleisch

 Members: Mr Johann Frederick Kirsten
 Mr Yoichi Suzuki
5

1.6 The Panel's terms of reference are the following:
"To examine, in the light of the relevant provisions of the covered agreements cited
by the United States in document WT/DS334/4, the matter referred to the DSB by the
United States in that document, and to ma ke such findings as will assist the DSB in
making the recommendations or in giving the rulings provided for in those
agreements."
6

1 Request for Consultations by the United States,
(Turkey – Rice), 7 November 2005, WT/DS334/1.
2 Request to Join Consultations, Communication from Australia, Turkey – Rice , 17 November 2005,
WT/DS334/2 and Request to Join Consultations, Communication from Thailand, Turkey – Rice, 18 November
2005, WT/DS334/3.
3 Request for the Establishment of a Panel by the United States, Turkey – Rice , 7 February 2006,

4 Constitution of the Panel Established at the Reques t of the United States (Note by the Secretariat),
Turkey – Rice, 1 September 2006, WT/DS334/5/Rev.1, para. 1.
5 Ibid., para. 4.
6 Ibid., para. 2.

1.7 Argentina, Australia, China, Egypt, the European Communities, Korea, Pakistan and Thailand
reserved their rights to participate in the Panel proceedings as third parties.
7
1.8 In accordance with the timetable adopted after consultations with the parties, the Panel
received written submissions from the United States and Turkey on 20 September and on 11 October
2006, respectively. The Panel received written rebut tals from the parties on 14 December 2006. The
Panel also held two substantive meetings with the parties. The first meeting was held on
8 and 9 November 2006, and the second on 17 and 18 Ja nuary 2007. The Panel received third-party
written submissions from China, Egypt and the European Communities on 18 October 2006. It met
with the third parties during a session of the first substantive meeting held on 9 November 2006.
The Panel posed questions to the parties after each substantive meeting. Turkey also posed questions
to the United States after the second substantive meet ing. The Panel received replies from the parties
on 30 November 2006 and on 6 February 2007. Pa rties submitted comments on each other's replies
on 20 February 2007. The Panel also posed questi ons to third parties after the third party session.
It received replies from some third parties on 21 November 2006.
1.9 The descriptive sections of the draft report, incl uding facts and arguments, were circulated to
both parties on 13 March 2007. On the same date , third parties were sent the relevant descriptive
sections of the draft report, containing their respective arguments. The Panel received comments to
the descriptive sections of the draft report from th e United States and Turkey on 20 March. On the
same date, Korea presented editorial comments on the section containing its arguments.
1.10 The Panel submitted its interim report to the pa rties on 3 May 2007. On 18 May, the Panel
received written requests for review of precise aspect s of the interim report from both parties. On
1 June, the parties submitted written comments on each other's written requests for review.
II. FACTUAL ASPECTS
A. P
RODUCT DESCRIPTION
2.1 The current dispute concerns claims brought by the United States against Turkey's alleged
import restrictions on rice.
2.2 Rice can be generally defined as:
"The grain of the grass Oryza sativa, a major world cereal."8
2.3 As explained in a fact sheet published by the Food and Agriculture Organization of the United
Nations (FAO):
"Rice is the predominant staple food for 17 countries in Asia and the Pacific, nine
countries in North and South America and eight countries in Africa. Rice provides
20 per cent of the world's dietary energy supply, while wheat supplies 19 per cent and
maize 5 per cent."9
2.4 Under the Harmonized Commodity Description and Coding System (Harmonized System or
HS) developed by the World Customs Organization (WCO), rice is classified under tariff item 1006.

7 Constitution of the Panel Established at the Reques t of the United States (Note by the Secretariat),
Turkey – Rice, 1 September 2006, WT/DS334/5/Rev.1, para. 5.
8 Shorter Oxford English Dictionary, Fifth Edition, Oxford University Press, 2003, Volume 2, p. 2577.
9 Food and Agriculture Organization of the United Nations (FAO), "Rice and Human Nutrition", in:
http://www.fao.org/rice2004/en/f-sheet/factsheet3.pdf.

Within this item, rice is classified according to the three stages of its production process into the
following sub-items:10
 (i) HS 1006.10: Rice in the husk, also known as paddy or rough rice, is "rice grain still
tightly enveloped by the husk".

 (ii) HS 1006.20: Husked rice, also known as brown or cargo rice, has had the husk
"removed by mechanical huskers [but] is still enclosed in the pericarp. Husked rice
almost always contains a small quantity of paddy."

 (iii) HS 1006.30: Semi-milled or wholly-milled rice, whether or not polished or glazed,
corresponds to "whole rice grains from which the pericarp has been partly removed"
and "whole rice grains from which the pericarp has been removed through special
tapering cylinders", respectively. It is otherwise known as white rice.
11

B. T
URKEY'S RICE MARKET
1. Turkey's rice production
2.5 Turkish paddy rice is grown in various Turkish provinces 12 by farmers holding a permit to
plant paddy rice.13 The Turkish rice harvest period lasts for several months in the second half of each
calendar year. The United States alleges that the harvest period "begins in August and ends in
October"14; while in Turkey's opinion it "begins in mid-September and lasts until the end of
November".15 The marketing year runs from September to August.
2.6 According to data provided by the United St ates and not contested by Turkey, the Turkish
harvest area increased from 70,000 hectares in th e marketing years between September 2001 and
August 2004, to around 80,000 hectares in the marketing year between September 2004 and
August 2005, and further to 90,000 hectares by the marketing year that commenced in
September 2005.16
2.7 As maintained by both parties, Turkish ri ce production has shown a continuous increase over
recent years17, with a steeper increase in production after 2003. 18 This latter trend is underscored by
the paddy rice production figures provided by the parties.

10 Harmonised Commodity Description and Coding System , Volume 1, First Edition (1986), Customs
Cooperation Council, Brussels, Belgium, page 69. Tari ff heading 1006 also includes enriched rice, parboiled
rice and broken rice.
11 Parties also referred to milled rice in some of their submissions as "rice".
12 The United States mentions some of those rice producing provinces in its First Written Submission,
identifying "Edirne [as] Turkey's largest rice producing province". United States' first submission, paras. 49
and 51. Exhibit US-24.
13 Executive Summary of Turkey's first submission, para. 32. Turkey's response to question 40(c).
Exhibit TR-34.
15 Turkey's response to question 5.
16 Exhibit US-45.
17 United States' first submission, para. 11. Turkey's response to question 49(c).
18 Turkey's response to question 49(c) . United States' rebuttal, para. 78. United States' response to
question 72, para. 111 and footnote 44.

TURKISH PADDY RICE PRODUCTION FIGURES PROVIDED BY PARTIES (TONNES)19
Figures provided by the United States in
exhibit US-45
Figures provided by Turkey in exhibit TR-24
Sep 2001 – Aug 2002 360,000 360,000 2001
Sep 2002 – Aug 2003 360,000 360,000 2002
Sep 2003 – Aug 2004 415,000 372,000 2003
Sep 2004 – Aug 2005 500,000 490,000 2004
Sep 2005 – Aug 2006 600,000 550,000 2005
Sep 2006 – Aug 2007 600,000*
* estimate

2.8 A statement by the Turkish Ministry of Agricu lture mentions that "[a]n 87% increase in
[paddy rice] productions was recorded in 2006, compared to the year 2002."20
2.9 Milled rice production figures provided by the parties also show an increase.
TURKISH MILLED RICE PRODUCTION FIGURES PROVIDED BY THE PARTIES (TONNES)
Figures provided by the United States in exhibit US-45 F igures provided by Turkey in exhibit TR-24
Sep 2001 – Aug 2002 234,000 216,000 2001
Sep 2002 – Aug 2003 234,000 216,000 2002
Sep 2003 – Aug 2004 270,000 223,000 2003
Sep 2004 – Aug 2005 300,000 294,000 2004
Sep 2005 – Aug 2006 360,000 330,000 2005
Sep 2006 – Aug 2007 360,000* 390,000** 2006
* estimate ** Turkey's re sponse to question 49(c)

2.10 Despite the differences in the deta iled figures provided by the parties 21, Turkish milled rice
production has risen from around 40 per cent of Turkish rice consumption in the marketing year
between September 2002 and August 2003 to around 60 per cent of Turkish rice consumption for the
marketing year between September 2005 and August 2006.
2.11 As for the average price of paddy rice purch ased from producers in the Turkish market, the
United States provides wholesale prices for differe nt types and origins of rice between 2003 and
200622, while Turkey considers its own figures on the unit price of domestic paddy purchases made by
individual companies in 2005 "a more accurate and reliable source." 23 Despite those differences,
parties seem to agree that the average price of paddy rice purchased by individual companies from

19 Reference to "tonnes" is equivalent to "metric tons".
20 Exhibit US-77. United States' comments on Turkey's responses to question 148, para. 60.
21 Exhibit US-45 and exhibit TR-24.
22 Exhibit US-54.
23 Turkey's response to question 12 referring to exhibit TR-27.

producers in 2005 was YTL 640 per tonne 24, although they disagree whether the actual market price
might be influenced by the purchases made by the Turkish Grain Board (TMO).25
2.12 Domestic paddy rice is processed into brown and milled rice by millers, who purchase paddy
rice either directly from farmers or their cooperatives and unions, or through the TMO.
2. Rice consumption in Turkey
2.13 As shown in the following table, Turkish rice consumption increased in the past few years,
from 550,000 tonnes in 2003 to 570,000 in 2005.26
TURKISH MILLED RICE CONSUMPTION FIGURES PROVIDED BY PARTIES (TONNES)
Figures provided by the United States in exhibit US-45 F igures provided by Turkey in exhibit TR-24
Sep 2001 – Aug 2002 540,000 540,000 2001
Sep 2002 – Aug 2003 545,000 545,000 2002
Sep 2003 – Aug 2004 550,000 550,000 2003
Sep 2004 – Aug 2005 560,000 560,000 2004
Sep 2005 – Aug 2006 570,000 570,000 2005
Sep 2006 – Aug 2007 575,000*
* estimate

2.14 According to Turkey, "consumption levels do not change considerably on a monthly basis.
Therefore, average monthly consumption can be calculated by total consumption divided by 12."27
2.15 As regards consumer choices, the United States poi nts out that "[n]early all rice consumed in
Turkey is milled white rice" 28, as "[m]illed rice, and less frequently brown rice, is consumed at the
dinner table."29
2.16 Turkey asserts that "since rice is not a homogeneous product in taste and quality, certain types
of rice are preferred by consumers. Moreover, in the Turkish market [the] domestic types of rice are
sold at higher prices".30
3. Turkey's imports of rice
2.17 Since the establishment of Turkey's TRQ for rice in 2004, Turkey provided for the
importation of rice under the following three arrange ments: (i) MFN, or over-quota imports at
applied rates of duty of 34, 36 and 45 per cen t for paddy, brown and milled rice, respectively 31;
(ii) preferential rates within predetermined tariff rate quotas (TRQs), for some periods between April
2004 and July 2006; and (iii) preferential trade a rrangements, such as the fr ee trade agreements with

24 Turkey's response to questions 10 and 12. United States' response to question 11, para. 13, based on
exhibits TR-27 and US-52.
25 Turkey's response to question 110.
26 United States' first submission, para. 12. Exhibits US-45 and TR-24.
27 Turkey's response to question 6.
28 United States' response to question 6, para. 14.
29 United States' first submission, para. 10. Exhibit US-38.
30 Turkey's response to question 49 (c), fourth paragraph.

the European Communities and the Former Yugoslav Republic of Macedonia (FYROM)
32 for a total
of 28,00033 and 8,00034 tonnes of duty-free rice imports per annum, respectively.35
2.18 The parties concur that Turkey is a net rice importer 36, and their weight-based annual figures
on realized imports, i.e, the actual volume of rice imports, according to rice type are rather similar,
although not identical in all respects.
37
ANNUAL WEIGHT-BASED FIGURES ON REALIZED IMPORTS BY TYPE OF RICE (TONNES)
Period
Party
submitting
information
Paddy Rice Brown Rice Milled Rice Annual total
United States* 247,723 10,036 213,519 471,997 2003 Turkey** 247,723 10,934 213,528 472,186***
United States* 26,749 26,177 101,188 154,485 2004 Turkey** 35,432 26,176 103,887 165,496***
United States* 102,198 42,193 158,423 302,814 2005 Turkey** 102,197 42,193 158,422 302,813***
2006 Jan-Nov United States* 91,744 41,704 53,063 186,513
2006 Jan-Sep Turkey** 102,761 54,430 87,597 244,789***
* Exhibit US-81rev, source: Turkish Statistics Corporation (TUIK)
** Exhibit TR-23, source: UFT. See also exhibit TR-25.
*** Based on figures in exhibit TR-23

2.19 The parties agree that 2003 has seen "the highest level of importation over the last 10 years".38
They disagree, however, on the level of milled rice equivalent imports in 2003, as well as on the level
and trend of total annual milled ri ce equivalent imports since 2004. On the one hand, Turkey argues
that "together with the rise in domestic rice producti on, there has been a rise in [the figure of total
annual rice equivalent] imports of rice into Turk ey. For instance, in the period between 2004 and
2006, in which the TRQ regime was in force, rice equivalent imports have increased from 146,458
tonnes to 253,436 tonnes."39 The United States, on the other hand, states that:
"Turkey's argument that rice imports have increased from 2004 through 2006 is
misleading. First, imports of rice in 2004 fell from 2003 levels... As shown in
exhibit US-45, TY (trade, or calendar y ear) imports were 151,000 metric tons in
2004, as compared to 320,000 metric tons in 2003... [Subsequently, r]ice imports did
not rebound to previous levels. While TY imports in 2005 were 298,000 metric tons,

32 Turkey's response to question 123(c).
33 United States' comments on Turkey's response to question 22, para. 22. Exhibits TR-31 and US-58.
34 Exhibit US-72.
35 United States' comments on Turkey's response to question 102. See also United States' rebuttal,
footnote 20.
36 United States' first submission, para. 12. Turkey's response to questions 49(c) and 92(d).
37 As the United States points out, "[t]he annual totals for 2003, 2004, and 2005 in exhibit US-81[rev]
are comparable to the annual totals for the same years provided by Turkey in Annex TR-23. With respect to the
2006 data, the annual total of Turkish rice imports contained in exhibit US-81[rev] is approximately 58,000
metric tons less than the figure provided by Turkey in Annex TR-23." United States' response to question 99,
para. 3.
38 Turkey's response to question 49(c), sixth paragraph, and to question 114(a). Exhibit US-47.
39 Turkey's response to question 49 (c), fifth paragraph.

they fell again in 2006 to approximately 1 54,000 metric tons, which is virtually the
same quantity of imports as in 2004."40
These differences between the milled rice equivalent figures presented by each party could be due to
the different methods of converting import figures for paddy and brown rice into the milled rice
equivalent.41 In any event, despite the Panel' s questions pointing out the differences 42, the parties'
responses did not provide a completely satisfactory explanation for them.
2.20 The weight-based annual realized import figures, on which the parties seem to largely agree,
appear to confirm a significant fall between 2003 an d 2004 in annual total import volumes, as well as
in annual imports of milled rice and particularly of paddy rice. Further, the weight-based annual
realized import figures provided by the parties show that imported quantities of paddy and milled rice,
as well as total rice imports, have rebounded in 2005, although to lower levels than in 2003 –
especially as regards paddy rice. This was followed by a significant decrease in the relevant periods
of 2006 for total and milled rice imports. Whereas paddy rice imports in 2006 seem to be
significantly higher than in 2004, figures for 2006 pr ovided by the parties differ and do not cover the
whole year, which makes it difficult to establish wh ether the total and milled rice import figures for
2006 are significantly higher or lower, respectively, compared to the relevant data for 2004. Finally,
weight-based annual figures of realized brown rice imports seem to develop differently from other
figures throughout the entire period between 2003 and 2 006, in that weight-based realized brown rice
imports, while relatively low, tend to continuously increase.
2.21 Turkey has repeatedly argued that it has imported ri ce in the past years. In particular, Turkey
has stressed that milled rice equivalent imports between January 2004 and A ugust 2006 amounted to
939,013 tonnes.43 However, based on import data from the Turkish Statistics Corporation (TUIK), the
United States contends that, if imports under th e TRQ as well as duty-free imports realized under
Turkey's free trade agreements with the Europ ean Communities and the FYROM are disregarded,
"[m]onthly non-EU Turkish rice imports are zero or negligible when the TRQ is closed."44
2.22 Both parties have provided figures for total rice imports to Turkey by country of origin.
The figures they provided on a milled rice equivalent basis are not comparable. First, as mentioned
earlier, the parties use different conversion rates to convert paddy and brown rice imports into milled
rice equivalent figures. Second, Turkey provid es totals for the period between January 2004 and
August 200645, while the United States provides data on an annual basis. 46 As regards actual import
figures, a comparison of the figures and calculated to tals in the relevant exhibits of the parties
containing data on detailed actual imports 47 show that the total figures of annual imports per country
of origin according to rice type are very similar, with a few exceptions. 48 Based on the data that is
common to the exhibits submitted by both parties, the following observations can be made:

40 United States' comment on Turkey's response to question 151, para. 66. See also United States'
response to question 99, para. 5.
41 The United States, for instance, explained in its response to question 117, para. 18, that the US
Department of Agriculture used a conversion factor of 70 per cent for of paddy rice and 88 per cent for brown
rice. Turkey, on its part, clarified its conversion method in para. 4 of its comments to the descriptive part of the
report, as 60 per cent for paddy rice and 80 per cent for milled rice. See exhibits TR-9 and US-10.
42 See Panel's questions after the second substantive meeting, e.g., question 99(b).
43 Turkey's response to question 4(c), second paragraph. Exhibit TR-8.
44 Exhibit US-53.
45 Exhibit TR-8.
46 Exhibit US-47.
47 See exhibits US-81rev, TR-25 and TR-26.
48 In particular, as regards paddy rice imports, exhibit TR-25 shows 5,229.580 tonnes of paddy rice
imports from the United States in December 2004 versus 195 tonnes in exhibit US -81rev. Under brown rice

SIGNIFICANT REDUCTION OR LACK OF IMPORTS
2003
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
RICE
TYPE
 no imports paddy
no imports
 no imports brown
 significantly lower imports
 only EC
imports
mainly
EC
imports
only EC
imports
 milled

2004
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
parties
disagree
whether
any
imports
no imports
minimal
EC
imports
no imports
significantly
lower
imports
no
imports

paddy
no imports
significantly
lower
imports
 no imports

brown
minimal EC imports no imports milled

2005
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
 no imports
significantly
lower
imports

paddy

significantly
lower
imports

significantly
lower
imports
 no imports

brown
 significantly lower imports
 only EC imports milled

2006
Jan Feb Mar Apr May Jun Jul Aug Sep

 parties
disagree
whether any
imports

 parties
disagree
whether any
imports
 no imports paddy

parties
disagree
whether
any
imports
parties
disagree
whether any
imports
 brown
 parties disagree
whether any imports milled
Based on data in exhibits US-81rev, TR-25 and TR-26

imports, exhibit TR-25 show s imports from Argentina, Greece and Uruguay in 2005 and 2006, which are not
reflected in exhibit US-81rev. Moreover, exhibit TR-25 shows higher brown rice import figures for Bulgaria,
Egypt and Italy than exhibit US-81rev, which often show s nil or lower figures in the same period. Also,
exhibit TR-25 shows brown rice imports of 1,049.540 tonnes from Egypt in May 2003, while exhibit US-81rev
indicated 150 tonnes. As regards milled rice, exhibit TR-25 shows slightly higher figures for milled rice imports
from Italy and Egypt in December 2004 than exhibit US-81rev. Further, various figures for milled rice imports
in 2006, especially from summer 2006 onwards are higher in exhibit TR-25 than in exhibit US-81rev, partly
because the latter shows no imports from August 2006 onwards.

2.23 Indeed, in one of its questions to the parties, the Panel noted that:
"according to the information provided by Turkey in exhibit TR-25, there seems to
have been no imports of... paddy rice or brow n rice in the months of October in 2003,
2004 and 2005. In addition, the data in e xhibit TR-33 suggest that no rice imports
whatsoever (paddy, brown or milled) t ook place in February and March 2004.
Further, the data in exhibit TR-33 seem to suggest that there were no rice imports
other than EC/Former Yugoslav Republic of Macedonia out-quota rice imports in
October – December 2003 and in September – October 2005."
49
Parties did not contest these observations made by th e Panel. In addition, in response to another
question by the Panel 50, the parties pointed out that no imports of milled rice took place in
April 2004.51
2.24 Turkey has noted that "the major importers of rice into Turkey used to be the millers,
although their import share has recently decreased." 52 As regards imports of rice originating in the
United States, the United States specifies that "[t]he main importers... are Torunlar, Akel, and Goze,
but they may also import rice from other sources. All three of these companies have a large milling
capacity, so they prefer to import US paddy rice." 53 The United States adds that these three Turkish
importers, together with Mehmetoglu, which the "United States understands ... is the major importer
of Egyptian rice into Turkey" 54, "account for approximately 90 per cent of all imported rice into
Turkey."55 Turkey has submitted data on the quantities and value of rice imports made by Torunlar,
Mehmetoglu and ETM, another company referenced by the United States. The data show that
Torunlar had an average share of 17 per cent of imports of paddy rice from the United States between
2002 and 2006, and that the three companies had an overall share of general imports of paddy, brown
and milled rice, of 16, 1 and 10 per cent, respectively.56
2.25 The United States also points out that, overall "[t]he United States and Egypt are the two
largest exporters of rice to Turkey." 57 In particular, according to the United States in 2003 the most
important rice exporters to Turkey in terms of vol ume were Egypt, the United States, China, and the
European Communities, and in 2004 and 2005 Egypt, the United States and the European
Communities.58 According to figures provided by Turkey, in 2003 the largest exporters of paddy rice
to Turkey were the United States, Australia, Ukraine and Italy. The main exporters of milled rice to
Turkey in the same year were Eg ypt, China, Italy, the United States, and Vietnam. The only exporter
of brown rice was Egypt. 59 Figures provided by Turkey show that in 2004 the largest exporters of
paddy rice to Turkey were the United States, Ital y and Russia. The only exporter of brown rice was
Egypt. The main exporters of milled rice to Turk ey in the same year were Italy, Egypt, China,
Vietnam, Thailand, and the United States. 60 In 2005, the largest exporters of paddy rice to Turkey
were the United States, Russia and Bulgaria. The ma in exporters of brown rice were Egypt, Bulgaria

49 Panel's question 102(a).
50 Panel's question 108.
51 Parties' responses to question 108.
52 Turkey's response to question 102.
53 United States' response to question 17, para. 35.
54 United States' response to question 47, para. 72.
56 Exhibit TR-39.
57 United States' response to question 47, para. 70. United States' response to question 63, para. 100.
58 Exhibit US-47.
59 Exhibit TR-26.
60 Exhibit TR-25.

and Italy. The main exporters of milled rice to Tu rkey in 2005 were Egypt, Italy, the United States,
Vietnam, and China.
61
2.26 With regard to imports from the United States, the United States stated that, "[g]iven the
longer shipping distance, US exporters tend to ship rice less frequently and in larger allotments,
typically between 10,000 and 20,000 metric tons." 62 The Panel notes that, "according to the
information provided by Turkey in exhibit TR-25, there seem to have been no imports of... (b) milled
rice from the United States during: (i) January – May 2004; (ii) July 2004; (iii) September –
November 2004; (iv) July – December 2005; and, (v) January 2006 – onwards; (c) paddy rice from
the United States during: (i) October – December 2003; (ii) February – May 2004; and,
(iii) September – November 2005."
63 Further, the Panel noted in particular that, based on data
provided by Turkey, it seems that "no over quota imports of US rice ... have actually occurred
[between September 2003 and April 2005], with the exception of one shipment of 611 [metric] tons of
paddy rice (date of Certificate of Cont rol 15.09.2004; importation date 16.09.2004)." 64 I n i t s
response, Turkey did not appear to contest the substance of that data, although it noted that imports
from other sources have taken place in that period.
65 As regards 2006, the United States pointed out
that "Turkey's import data shows that 90,000 metr ic tons of rice from the United States entered
Turkey in 2006. US export statistics record 17,789 66 metric tons of US rice shipped to Turkey in
2006, and no future sales have been recorded in the USDA Export Sales Report. The United States
understands that any additional en tries would have come from US rice Turkey finally released from
bonded warehouse that had previously been refused entry." 67 Turkey, on its part, contended that,
assuming there was a late release of rice, the reasons behind it could be the importers' "business
calculations and decisions", such as keeping stocks until 'the appropriate moment to release it on the
Turkish market in order to maximize the economic returns.68
2.27 As regards the price of imported rice, the parti es generally dispute each other's figures. Their
total monthly average c.i.f. landed prices for different types of imported rice, however, are largely
similar
69, although some differences remain:70

61 Exhibit TR-25.
62 United States' rebuttal, para. 35.
63 Panel's questions 102(b) and (c).
64 Panel's question 114(b).
65 Turkey's response to question 114(b).
66 (footnote original) See exhibit US-74.
67 United States' response to question 116, para. 16.
68 Turkey's comments on United States' response to question 116.
69 As the Panel noted in its question 99(c), "some figures provided by the United States and Turkey
show a high degree of similarity: (c) Figures in exhibits US-55 and TR-28 for landed CIF. prices of paddy rice
throughout 2003, April to November 2004, throughout 2005 and June to August 2006; of brown rice
throughout 2003 (except for March), throughout 2005, and April to June 2006; and of milled rice throughout
2003, throughout 2004, throughout 2005 (except for December) and from January to July 2005."
70 As the Panel noted in its question 99(c), "[c]ertain data contained in some of the exhibits provided by
the Parties show significant discrepancies: … Figures in exhibits US-55 and TR-28 for landed CIF prices of
paddy rice in December 2004; of brown rice in March 2003, March to June 2004, September to December 2004
and June 2006; and of milled rice in December 2005."

MONTHLY AVERAGE LANDED CIF PRICES FOR PADDY RICE
(Unit Price per Tonne in US Dollars)
2003 2004 2005 2006
MONTH United
States* Turkey** United
States* Turkey** United
States* Turkey** United
States* Turkey**
January 222 218 n/a 897 255 262 279 257
February 155 154 n/a 0 967 964 n/a 229
March 241 241 n/a 0 275 273 576 537
April 179 179 721 726 252 254 273 268
May 182 177 n/a 0 230 231 n/a 265
June 461 457 190 191 240 243 266 265
July 156 159 272 273 236 237 257 258
August 211 214 266 268 264 260 263 260
September 181 175 307 305 n/a 0 n/a 0
October n/a 0 n/a 0 n/a 0
November n/a 0 888 885 201 200
December n/a 0 183 503 220 219
* based on exhibit US-55, source: Turkish Statistics Corporation (TUIK)
** based on exhibit TR-28

MONTHLY AVERAGE LANDED CIF PRICES FOR BROWN RICE
(Unit Price per Tonne in US Dollars)
2003 2004 2005 2006
MONTH United
States* Turkey** United
States* Turkey** United
States* Turkey** United
States* Turkey**
January n/a 0 n/a 0 239 244 286 289
February n/a 0 n/a 0 230 236 273 358
March 1,498 214 n/a 0 239 238 303 324
April 180 180 n/a 0 242 244 288 289
May 129 131 248 247 242 241 300 301
June 135 136 283 283 244 244 285 291
July 167 165 287 287 238 239 292 321
August 148 151 269 274 n/a 0 n/a 307
September n/a 0 n/a 0 n/a 0 n/a 342
October n/a 0 n/a 0 n/a 0
November n/a 0 n/a 0 270 268
December n/a 0 240 239 276 278
* based on exhibit US-55, source: Turkish Statistics Corporation (TUIK)
** based on exhibit TR-28

MONTHLY AVERAGE LANDED CIF PRICES FOR MILLED RICE
(Unit Price per Tonne in US Dollars)
2003 2004 2005 2006
MONTH United
States* Turkey** United
States* Turkey** United
States* Turkey** United
States* Turkey**
January 262.51 258 1,670.68 1,643 314.03 319 362.21 365
February 231.42 231 716.27 711 307.82 310 373.86 375
March 224.51 225 n/a 0 311.93 312 409.63 408
April 234.16 233 n/a 0 365.04 368 437.45 441
May 248.62 247 266.26 266 403.71 405 373.68 392
June 356.52 355 287.09 288 376.41 380 383.9 384
July 249.32 249 285.88 285 358.41 358 358.78 382
August 357.35 364 399.42 403 453.41 451 n/a 332
September 703.21 688 536.46 537 600.07 607 n/a 354
October 612.62 607 559.77 561 671.78 671
November 717.56 719 404.03 403 384.04 382
December 473.97 464 403.76 411 405.76 361
* based on exhibit US-55, source: Turkish Statistics Corporation (TUIK)
** based on exhibit TR-28

2.28 These latter three tables illustrate that aver age monthly landed c.i.f. prices increased
significantly at the beginning of 2004 for paddy and milled rice, and in the middle of 2004 for brown
rice. In 2005 and 2006, these prices returned to le vels slightly above the 2003 figures. Nevertheless,
significant fluctuations in landed c. i.f. prices have occurred from one month to another, at different
times of the year. As the Panel noted in one of its questions to the parties:
"[T]he Panel has considered the informa tion provided by Turkey on 'Monthly landed
c.i.f. values' in exhibit TR-28, and noted a sharp increase in paddy rice prices in June
2003, January and November 2004, February 2005 and March 2006. Likewise, it has
noted a sharp increase in milled rice prices in September 2003, January and August
2004 and September 2005. It has also noted a significant fall in the price for milled
rice in December 2003."71
Parties did not contest these observations made by the Panel.

4. Domestic rice producers
2.29 Turkey maintains a registration system for all domestic producers. 72 Applications to the
National Farmer Registration Syst em involve "controls of existence of agricultural production" 73 as
well as the submission, inter alia , of a farmer registration form, copy of the Turkish identity card,
proof of tax identification number, copy of a farmer document and one of the specified documents to
prove land ownership.74

71 Panel's question 100.
72 Regulation on National Farmer Registration System , published in Turkey's Official Gazette
No. 25,778 dated 16 April 2005, exhibit TR-34. See also Turkey's response to question 40(c).
73 Regulation on National Farmer Registration System, Article 6.
74 Ibid., Article 7.

C. GENERAL IMPORT REGIME
1. Tariff rates
2.30 Turkey's bound MFN rate for rice under heading HS 1006 is 45 per cent ad valorem .75
However, Turkey's current applied rates for imports of paddy, brown and milled rice are, respectively,
34 per cent ad valorem, 36 per cent ad valorem and 45 per cent ad valorem.76
2. Preferential agreements for the importation of rice
2.31 According to the evidence on record, Turkey has bilateral arrangements with the European
Communities and with FYROM, whereby preferential access into the Turkish market is granted for
rice imported from these two origins. Asked by the Panel, Turkey has stated that these are the only
preferential trade agreements signed by Turkey covering trade in rice.77
2.32 Under Decision No. 1/98 of the EC-Turkey Asso ciation Council of 25 February 1998 on the
Trade Regime for Agricultural Products 78, Turkey committed to open annually a zero per cent duty
tariff quota for 28,000 tonnes of semi-milled or wholly-milled rice that originated within the European
Communities.79
2.33 Under a bilateral free trade agreement between Turkey and FYROM, Turkey grants an annual
zero per cent quota for 8,000 tonnes of rice that originated in FYROM.80
3. General procedure for the importation of rice
2.34 From the evidence on record, an individual or company wishing to import rice into Turkey at
the MFN tariff rate would need to complete the following steps:81
(a) obtain a Certificate of Control from MARA. The legal basis and the requirements for
obtaining a Certificate of Control are explained below.82
(b) submit the Certificate of Control to the customs authorities at the port where the
importation is to take place and complete the required customs form. The customs
form requires information such as: (a) importer's identification information; (b) code
of imported items; (c) description of the product being imported; (d) quantity of the

75 Schedule XXXVII-Turkey, Part I Most-Favoured Nation Tariff, Section I – Agricultural Products,
Section I-A Tariffs, 15 April 1994. Uruguay Round of Multilateral Negotiations, Legal Instruments Embodying
the Results of the Uruguay Round of Multilateral Trade Negotiations Done at Marrakesh on 15 April 1994,
Schedules, Vol. 10, p. 9332. See also United States' first submission, para. 13 and exhibit US-15.
76 United States' first submission, para. 13 and Turkey's first submission, para. 14. See also,
exhibit US-17.
77 See Turkey's response to question 123(c).
78 Decision No. 1/98 of the EC-Turkey Association Council of 25 February 1998 on the Trade Regime
for Agricultural Products, Official Journal of the European Communities, 20.3.98, L 86/15, in exhibit TR-31.
79 Ibid. See also Turkey's response to question 13(a) and Decision Regarding Tariff Quota Imposition
on Import of Certain Agricultural Products of European Community Origin , published in Turkey's Official
Gazette No. 23,225, dated January 9, 1998, in exhibit US-58.
80 Exhibit US-72. See also Turk ey's response to question 123, and para. 8 of the United States
statement during the second meeting with the Panel.
81 See United States' response to question 14, paras. 22-33, and Turkey's response to questions 14, 31,
39, 55 and 129.
82 See paras. 2.35-2.49, below.

product being imported; (e) country of origin; (f) value of the product being
imported; (g) country in which the product was loaded; (h) port.
83
(c) submit the approved Certificate of Control with the required attachments, the customs
declaration and the phytosanitary certificate, to MARA.
(d) customs authorities conduct a documentation control as well as an identity check
between the product actually imported and the product in the declaration.
(e) MARA's and customs officials perform physical inspections.
D. CERTIFICATES OF CONTROL
1. Legal basis
(a) Situation at the time of the establishment of this Panel
2.35 At the time of the establishment of this Panel, the relevant legal basis for the regulation of the
Certificates of Control was to be found in Communiqué 2006/05 on Standardization in Foreign Trade,
issued by the Foreign Trade Undersecretariat (FTU).84
2.36 In turn, the legal authority for the FTU to issue such communiqués was found in Turkey's
Regime for Technical Regulations and Standardization for Foreign Trade , contained in Decree
No. 2005/9454.85 According to Article 4 of this Regime:
"In the framework of this Decree, the [FTU] is authorized:
d) To harmonize the technical le gislation, which is published in
the framework of the competencies given by the legislation to the
[FTU] and the Ministries and other institutions, with the foreign trade
and to lay down the application principles."
2.37 Pursuant to this authority
86, and to the similar provision contained in earlier decrees, the FTU
has issued a number of Communiqués on Standardization in Foreign Trade.
2.38 According to Article 1 of Communiqué 2006/05:
"Pursuant to subparagraph (d) of Article 4 of the Decree on Technical Regulations
and Standardization for Foreign Trade whic h came in force with the Council of
Ministers' Decree No. 2005/9454 on 7/9/20 05, the conformity of the substances
which are on the annex lists of this Comm uniqué and which are subject to the Entry
into the Free Circulation Regime, the Internal Process Regime, the Regime on the
Process under the Customs Control and the Te mporary Import Regime, in respect of

83 Exhibit US-62. See also United States' rebuttal, para. 19.
84 Communiqué 2006/05 on Standardization in Foreign Trade , published in Turkey's Official Gazette
No. 26,040, dated 31 December 2005, in exhibit TR-1. See Turkey's response to questions 15(a) and 30(b).
85 Regime for Technical Regulations and Standardization for Foreign Trade , Decree No. 2005/9454,
published in Turkey's Official Gazette No. 25,965, dated 13 October 2005, in exhibit TR-2. See also Regime for
Technical Regulations and Standardization for Foreign Trade , Decree No. 96/7794, published in Turkey's
Official Gazette No. 22,541bis, dated 1 February 1996, in exhibit US-1.
86 Turkey's response to questions 15(a), 125(b) and 125(c).

human health and safety, animal and plant existence and health shall be determined
by the Ministry of Agriculture and Rural Affairs."87
2.39 Article 2 of Communiqué 2006/05 also states that:
"At import stage of the products, which ha ve been included in the annex lists
(Annex I, Annex II/A-B, Annex III, Annex IV, Annex V/A-B, Annex VI-A), control
certificate approved by the Ministry of Agri culture and Rural Affairs shall be asked
for by relevant customs administration. For getting control certificate, it is necessary
to apply to the mentioned Ministry or to provincial affiliates (bodies) authorized by
the Ministry with control certificate form (Annex VII), pro forma invoice or invoice
and other documents which may be asked for, depending on product, by the
Ministry ..."
88
2.40 Article 3 of Communiqué 2006/05 further adds that:
"In case that the compatibility of substances, which are to be imported on the basis of
control certificate, with human health a nd safety, animal and plant existence and
health is determined by the Ministry or its authorized units, the importation of these
substances is allowed."89
2.41 Rice (not including seeds) is listed in Annex VI-A of Communiqué 2006/05 and, therefore, a
Certificate of Control from the Ministry of Agricu lture and Rural Affairs (MARA) must be presented
by the importer to the Turkish customs authorities as a condition for importation.90
2.42 In turn, Communiqué No. 31 on the Issuance of Control Certification at the Importation of
Foodstuffs and Packaging Materials that come into Contact with Foodstuffs and on Control
Procedures at Importation Stage 91 contains additional rules regarding the "procedures and principles
to be complied with during the approval of control certification procedures at the importation of
foodstuffs and packaging materials that come in to contact with foodstuffs, and procedures at
importation stage".
92
2.43 As noted in Article 2 of Communiqué 2006/05, the form to be used in order to apply for a
Certificate of Control is contained in Annex VII of the communiqué. 93 This form required
information such as: tariff h eading applicable to the product being imported; description of the
product which would be in the cons ignment; list or annex in whic h the product was included (e.g., in
the case of rice, Annex VI-A to Communiqué No . 2006/05); information on the importer
(e.g., business title, address, telephone number); impor ter's tax registration number; information on

87 Communiqué 2006/05 on Standardization in Foreign Trade , published in Turkey's Official Gazette
No. 26,040, dated 31 December 2005 , in exhibit TR-1. See also Communiqué 2005/05 on Standardization in
Foreign Trade, published in Turkey's Official Gazette No. 25 ,687, dated 31 December 2004, in exhibit US-7.
Communiqué 2005/05 was repealed by Communiqué 2006/05. See Turkey's response to questions 15(a) and
30(b). See also Turkey's response to questions 36 and 37.
88 Communiqué 2006/05 on Standardization in Foreign Trade, in exhibit TR-1.
89 Ibid.
90 Exhibit TR-3. See also Turkey's first submission, para. 18. United States' first submission, para. 19.
91 Communiqué No. 31 on the Issuance of Control Certification at the Importation of Foodstuffs and
Packaging Materials that come into Contact with Foodstuffs and on Control Procedures at Importation Stage ,
published in Turkey's Official Gazette No. 25,216, dated 1 September 2003. (An amendment to the
communiqué was published in Turkey's Official Gazette No. 26,116, dated 22 March 2006.) See exhibit TR-21
and Turkey's response to question 14.
92 Ibid., Article 1. See exhibit TR-21 and Turkey's response to question 14.
93 Exhibit TR-4. See also Turkey's first submission, para. 20.

the exporter (e.g., business title, address, telephone number); intended use of the product; quantity of
the product being imported; country of origin of the product; country in which the product was to be
loaded for transportation into Turkey; customs point of entry of the product into Turkey; information
on the firm which would use the imported product (e.g., business title, addre ss, telephone number);
and applicable information indicating compliance of the imported product with the relevant Turkish
technical regulations or specifications implem enting international standards (i.e., European
Communities, World Health Organization or FAO Codex) for the specific imported product.
94
2.44 In addition to this information, MARA may require other documents and information, to grant
a Certificate of Control.95 According to Turkey, other documents are required, in general,
"[F]or processed agricultural products and agricultural products which are composed
of more than one component. As rice does not involve more than one component, no
other document such as 'the component list' is requested".96
Other information communiqués issued jointly by MARA and the Ministry of Health have approved
particular additional specifications for rice.97

2.45 According to Article 9(c) of Communiqué 2006/ 05, once issued, the Certificate of Control
from MARA is valid for 12 months.98
2.46 According to Article 6.B(a) of Communiqué 31, the application form for a Certificate of
Control is to be presented "pr operly typed or filled out in co mputer, containing no erasures or
abrasions, and... signed and sealed by the authori zed person/persons of the company under their
name/names and surname/surnames."99
2.47 As clarified by Turkey, even if an importer could demonstrate the fulfilment of the separate
requisites that are normally verified through a Cer tificate of Control, an importation would not be
allowed in the absence of a valid Certificate of Control approved by MARA.100
2.48 Furthermore, as Turkey has specified, the Cer tificate of Control does not guarantee that an
import will be allowed. In other words, although the Certificate of Control is a prerequisite for
importation, it does not guarantee it.
"Turkish customs authorities have the legal authority to reject the importation of a
shipment of goods, even if a Certificate of Control has been issued and approved by
MARA... If the imports fail to comply with th e specifications cited in the Certificate

94 Exhibit TR-4. See also Turkey's first submission, para. 21.
96 Turkey's response to question 128 (a).
97 Communiqué 2001/10 on Rice , Ministry of Agriculture and Rural Affairs and Ministry of Health,
published in Turkey's Official Gazette No. 24,378, dated 19 April 2001, in exhibit TR-5. Communiqué 2002/11
on Paddy Rice, Ministry of Agriculture and Rural Affairs and Ministry of Health, published in Turkey's Official
Gazette No. 24,672, dated 15 February 2002, in exhibit TR-6. Communiqué 2002/12 on Rice , Ministry of
Agriculture and Rural Affairs and Ministry of Health, pub lished in Turkey's Official Gazette No. 24,672, dated
15 February 2002, in exhibit TR-7. See also Turkey's first submission, para. 23.
98 Communiqué 2006/05 on Standardization in Foreign Trade , in exhibit TR-1. See also Turkey's first
submission, para. 25, and Turkey's response to questions 30(c) and 38(a).
99 Communiqué No. 31, Article 6.B(a).
100 See Turkey's response to question 32.

of Control, and if the inspections reveal that the imports are not consistent with SPS
requirements, these imports are rejected."101
(b) New legislation after the establishment of this Panel
2.49 In the course of this Panel's proceedings, in January 2007, a new Communiqué on
Standardization in Foreign Trade was published.102 In response to a question from the Panel, Turkey
has stated that, under the new Communiqué 2007/ 21, "there is no amendment affecting the
importation of rice into Turkey".103
2. Approved Certificates of Control
(a) Statement by Turkey
2.50 Turkey has stated that a number of Certificat es of Control have been authorized for the
importation of rice. In its first submission, Turkey stated that 2,223 Certificates of Control for the
importation of rice had been authorized betw een 2003 and September 2006, allowing the importation
of 2,264,857 tonnes of paddy, brown and milled rice. 104 That figure was subsequently updated by
Turkey to 9 November 2006, to a total of 2,242 Certificates of Control for the importation of rice.105
(b) Request for evidence from Turkey
2.51 After the first substantive meeting, the Panel asked Turkey to provide a photocopy of each of
the 2,223 Certificates of Control approved between 2003 and September 2006 for the importation of
rice.
106 In response, Turkey stated that "photocopies of Certificates of Control [were] available", but
that "[t]he relevant Ministries [were] not, howev er, authorized to provide all the copies to the
Panel".107
2.52 Turkey submitted that it would "be able to provide to the Panel in strict confidence copies of
any individual Certificate of Control listed in Annex TR-33 [containing the list of Certificates of
Control for the importation of rice authorized between 2003 and 9 November 2006] upon request
from the Panel".108
(c) New request for evidence from Turkey
2.53 After the second substantive meeting, the Panel re ferred to its earlier request to Turkey that it
provide a photocopy of each of the 2,223 Cer tificates of Control approved between 2003 and
September 2006. The Panel asked Turkey to elaborate on the legal reasons why, under its domestic
legislation, it would not be authorized to provide the copies requested by the Panel.
109 The Panel then
asked Turkey, if it could not provide a photocopy of each of the 2,223 Certificates of Control
approved between 2003 and September 2006, that it pr ovide at least a photocopy of each of the 56
approved Certificates of Control, which had been ch aracterized as "relevant" by the United States

101 Turkey's response to question 55.
102 Communiqué 2007/21 on Standardization in Foreign Trade , published in Turkey's Official Gazette
No. 26,406, dated 17 January 2007, in exhibit TR-44. See Turkey's response to question 125(a). See also
United States' comments on Turkey's response to question 125(a), in paras. 28-30.
103 Turkey's response to question 125(a).
104 Turkey's first submission, para. 26. Exhibit TR-20.
105 Turkey's response to question 44. Exhibit TR-33. See also Turkey's rebuttal, para. 20.
106 Panel's question 44(e) to Turkey.
107 Turkey's response to question 44 (e).
108 Ibid.
109 Panel's question 133(a) to Turkey.

during the second substantive meeting with the Panel.
110 The Panel also asked Turkey to indicate how
many of the 2,223 Certificates of Control, a pproved between 2003 and September 2006, were the
result of resubmitted applications that had been in itially rejected by the Turkish authorities, and to
provide a photocopy of each one of these Certificates of Control. 111 Finally, the Panel proposed that,
if Turkey could not provide the full photocopies re quested, with the purpose of protecting the privacy
of the companies involved, it at least provide those same photocopies after having blacked out the
names of the companies.112
2.54 In response, Turkey stated that its Statisti cal Law prevents confidential data acquired,
processed and kept for official statistics, to be p assed-on to any administrative, judicial or military
office, authority or person, to be used except for statistical purposes, or to be used as evidence.
According to Turkey's statement, the same la w provides that public officials violating these
prohibitions would be punished in accordance with the Turkish Criminal Code.113
2.55 With regard to the Panel's question asking fo r the number of the Certificates of Control
approved between 2003 and September 2006, which were the result of resubmitted applications that
had been initially rejected by the Turkish au thorities and requesting a photocopies of these
Certificates of Control 114, Turkey responded that "this information and documentation [was] not
available in the records kept by MARA".115
2.56 Finally, with respect to the Panel's new request for photocopies of the approved Certificates of
Control, Turkey stated that it had provided a consolidation of the relevant information in
exhibit TR-33. Regarding the actual Certificates of Control, Turkey stated that:
"Given the strict confidentiality requirements provided by Turkish law... and the well-
established communications and informati on-exchanges between the United States
and a number of Turkish rice traders... Tu rkish officials involved in this Panel
proceeding [did] not feel comfortable in risking information leaks and possible
criminal accusations of violation of Turkish law on confidentiality."
It added that, while it:

"[stood] firm in relation to the truthfuln ess, completeness and usefulness of the
information that it provided earlier by means of its... consolidation... [it was] not in a
position to provide copies of the actual Certificates of Control for circulation."
Turkey concluded that:

"Exceptionally [it] would be willing to provide 'blacked-out' copies of the 56
'relevant' Certificates of Control only to the Panel and after a clear understanding with
the Panel and between the parties to this dispute that these documents would not be

110 Panel's question 133(b) to Turkey. See also para. 7 of the United States statement during the second
meeting with the Panel and exhibit US-71. The United Stat es clarified its characteriza tion of 'relevant' in its
comments to Turkey’s response to question 115, as referring to the period during which it was alleging a breach
(i.e. from 10 September 2003 through 17 March 2006).
111 Panel's question 133(c) to Turkey.
112 Panel's question 133(f) to Turkey.
113 Turkey's response to question 133(a).
114 Panel's question 133(c) to Turkey.
115 Turkey's response to question 133(c).

made available to the United States nor to any other entity beside the Panel and the
WTO Secretariat".116
2.57 The Panel notes that the possibility of the Pa nel adopting special rules to protect the
confidentiality of information submitted by the parties was suggested by the complainant in the course
of the substantive meetings with the parties. Tu rkey did not ask, however, that the Panel adopt any
particular measures in order to grant special protect ion to the confidentiality of the Certificates of
Control requested as evidence by the Panel. After a request from the Panel, Turkey offered to submit
the Certificates of Control, but with "a clear unde rstanding with the Panel and between the parties...
that these documents would not be made available to the United States nor to any other entity beside
the Panel and the WTO Secretariat."117
3. Rejection of Certificates of Control
(a) Rejection of Certificates of Control
2.58 The complainant has submitted ev idence of the rejection of Certificates of Control for the
importation of rice requested by two companies (Torunlar and Mehmetoglu). According to the
record, requests filed by Torunlar were rejected in September 2003 and again in November 2003 for
reasons respectively cited as "missing items"
118 or "spelling errors". 119 Turkey did not contest the
authenticity of these rejections, but it noted that the application allegedly rejected for "spelling errors"
could not be found among the records of MARA. 120 In 2004, this company filed a motion in a
Turkish administrative court against the government 's refusal to authorize the importation of rice. 121
In September 2004, after the motion had been filed in the administrative court, MARA rejected a third
request for a Certificate of Control filed by the same company for the importation of rice.122
2.59 In the case of Mehmetoglu, a request made in April 2006 to obtain a Certificate of Control for
the importation of milled rice from the United States, was rejected in May 2006. The letter of
rejection from MARA states that "it is not possible to prepare a control certificate according to our
laws and regulations".
123
2.60 Documents related to procedures before Turkish administrative courts, which are on record in
this case, refer to additional instances of rejection of Certificates of Control for the importation of
rice.124 One such document contains a decision by an administrative court in Ankara to dismiss the
petition presented by the importing company Helin. As described in this document, Helin had its
application rejected on 15 August 2005, on the grounds that "no [Certificates of Control] for husked
rice would be approved until new guidelines are establis hed for such importation, as expressed in the
approval… dated July 29, 2005". 125
2.61 Also on record are three petitions before the ad ministrative courts, each filed by a different
importing company. In these petitions, the companies describe that, after an initial rejection, they

116 Turkey's response to questions 133(b) and 133(f) . See also Turkey's comments on United States'
response to question 116.
117 Turkey's response to question 133(b) and (f).
118 Letter dated 10 September 2003, in exhibit US-28.
119 Letter dated 23 October 2003, in exhibit US-29.
120 See Turkey's response to question 135.
121 Exhibit US-30. United States' first submission, para. 29.
122 Exhibit US-33. See also exhibit US-34 and United States' first submission, para. 31.
123 Exhibit US-22. See also exhibit US-40 and United States' first submission, paras. 35-36. See also
Turkey's response to question 29.
124 Exhibits US-63 to US-67.
125 Exhibit US-63.

resubmitted requests for Certificates of Control for the importation of rice on 18 October 2005.
These requests were rejected by MARA thr ough letters dated 28 Oct ober 2005, and numbered
112603, 112604 and 112605, respectively, with an id entical explanation that MARA was "unable to
prepare [Certificates of Control] for rice, until the new application rules are confirmed".
126
2.62 An additional petition, filed by another importi ng company before an administrative court,
describes that, after three successive applications, MARA rejected its requests for Certificates of
Control for the importation of rice through a le tter dated 12 December 2005, and numbered 114092,
with the explanation that MARA was "unable to pr epare [Certificates of Control] for rice, until the
new application rules are confirmed".127
(b) Request for evidence from Turkey
2.63 After the second substantive meeting, the Pa nel referred to exhibit TR-36 submitted by
Turkey, which contains a list prepared by Turkey of the applications for Certificates of Control for the
importation of rice which were rejected from 2003 to 21 September 2006, including the reasons for
denial. The Panel asked Turkey to provide a photocop y of each of the rejected applications, cited in
the list contained in exhibit TR-36, as well as of th e corresponding letters by which its authorities had
notified the requesting companies of the rejection of a requested Certificate of Control.128
2.64 The Panel proposed that, if Turkey could not provide the full photocopies requested, out of
concerns for the privacy of the companies involved, it at least provide those same photocopies after
having blacked out the names of the companies.
129
2.65 In response, Turkey stated that "this information and documentation [was] not available in the
records kept by MARA."130
(c) New request for evidence from Turkey
2.66 After the second substantive meeting, the Panel posed questions to Turkey regarding exhibit
US-29, submitted by the complainant as an annex to its first submission. 131 That exhibit contains a
photocopy of an application for a Certificate of Control for the importation of rice, filed on
23 October 2003 and which was rejected on 3 Nove mber 2003, allegedly "due to spelling errors".
132
The Panel noted that "spelling errors" had not be en listed by Turkey as reasons for denial of
Certificates of Control and asked Turkey to confir m whether such errors would be grounds for the
rejection of an application for a Certificate of Control. If so, it asked Turkey to identify the legal basis
for rejecting applications owing to "spelling errors".
2.67 In its reply, Turkey submitted that it could no t provide an answer to this question, as the
application cited by the United States coul d not be found among the records of MARA. 133 It argued,
however, that it is not MARA's general policy to sy stematically deny applications on the basis of
minor spelling mistakes. Nevertheless, it noted that , in certain instances, spelling errors may affect
crucial elements of the application and the pro cess of importation, which may lead to individual

126 Exhibits US-64, US-65 and US-66.
127 Exhibit US-67.
128 Panel's question 133(e) to Turkey.
129 Panel's question 133(f) to Turkey.
130 Turkey's response to question 133(e).
131 Panel's question 135 to Turkey.
132 Exhibit US-29. United States' first submission, para. 28.
133 Turkey's response to question 135.

rejections. In Turkey's opinion, this case cited by the complainant is an individual episode that does
not "imply or suggest a pattern of systematic rejection of applications for futile reasons".134
4. Procedures in Turkish administrative courts
(a) Arguments by MARA before an administrative court
2.68 As mentioned above, in 2004, Torunlar filed a motion in a Turkish administrative court
against the government's refusal to authorize the importation of rice. 135 In its response to this motion,
filed in November 2004, the counsel for MARA argued before the court that the rejection of the
Certificates of Control "was undertaken in ob servance of the common good and public service
keeping in mind the goals of protecting [Turkish] na tional producer[s], to redress their grievances and
to prevent unnecessary stock build up..."
136 In support of its argument, the counsel for MARA cited
letters from MARA's General Directorate of Protect ion and Control and from the TMO, by which the
authorization of Certificates of Control for the importation of rice was suspended over several periods.
The counsel for MARA specifically referred to the following letters:
(a) Letter No. 964 from MARA dated 10 Sept ember 2003, by which the period for
issuing Certificates of Control for the importation of rice would begin on
1 March 2004.137
(b) Letter by which the General Directorate of the TMO requested that no Certificates of
Control for the importation of rice be i ssued until 30 June 2004, because existing rice
and paddy rice stocks were estimated to be adequate for the nation's needs until the
end of June 2004.138
(c) Letter No. 107 from MARA dated 23 January 2004, by which the period for issuing
Certificates of Control for the importation of rice and paddy rice would begin in
July 2004.139
(d) Letter No. 689 dated 4 June 2004, from the General Directorate of the TMO, by
which "the instruction was given to extend the term for stopping the issuance of
[Certificates of Control], from July 01, 2004 to the beginning of January 2005, in
order to protect [Turkish] national produc tion, to redress the grievances of the
domestic grower, [and] to conserve nationa l currency reserves by avoiding excessive
imports".
140
(e) Letter No. 905 from MARA dated 28 June 200 4, by which the period for issuing
Certificates of Control for the importation of rice and paddy rice was to open on
1 January 2005, with a closing date of 1 August 2005 for rice and 1 September 2005
for paddy rice.
141

134 Turkey's response to question 135.
135 Exhibit US-30. United States' first submission, para. 29.
136 Exhibit US-31.
137 Ibid.
138 Ibid.
139 Ibid.
140 Ibid.
141 Ibid.

2.69 The lawsuit concluded with a decision in favour of MARA.
142 This decision was not
appealed by Torunlar143, nor by MARA.144
5. Decision by a Turkish administrative court
2.70 As mentioned above, also on record is a decisi on by an administrative court in the case of a
petition presented by another importing company, Helin , against MARA's rejection of its application
for a Certificate of Control for the importation of rice. 145 The court dismissed the petition on the
grounds that:
"[I]t is verified that the opening date fo r the issuance of the Inspection Document
[Certificate of Control] was indeed determined as August 1, 2005 by the
administration as is evident from the 'approva l' document issued by the Office dated
12.30.2004, number 1795; however, as stated by the 'approval' document issued on
7.29.2005, number 1304, the stocks of produced and imported husked rice in 2004
were deemed to be at a level that would meet the needs of the country handily;
therefore no Inspection Document [Certifi cate of Control] would be issued until
consumption volume and trade policies are reviewed, and a basis for the new
practices is established. Under these circum stances, the court finds no basis for the
claim of illegality in the decision not to grant an inspection document until the
establishment of new practices, or in the pr ocedure by which the plaintiff's request
was declined."
146
E. THE TARIFF RATE QUOTA SYSTEM
1. Situation at the time of the establishment of this Panel
(a) Decree No. 95/6814 of 30 April 1995
2.71 Decree No. 95/6814 of 30 April 1995 on Surveillance and Safeguard Measures for Imports
and Administration of Quotas and Tariff Quotas 147 contains procedures and principles related to, inter
alia, "[t]he use of quotas in case tariff quotas are applie d for imports in the framework of the bilateral
or multilateral preferential trade agreements or unilaterally according to the provisions of the
international agreements."148 Article 3 of this decree grants the FTU the authority:
"(b) To determine the quantities and/or values of quotas and the procedure and
principles of distribution... and to issue doc uments with this objective and to instruct
to the relevant institutions and organi zations concerning the implementation and
necessary permissions.
(c) To determine the procedures and prin ciples for use of the tariff quotas which
are opened unilaterally according to international agreements or based on the bilateral
or multilateral preferential trade agreements."149

142 Turkey's response to question 66. See also United States' rebuttal, para. 27.
143 Turkey's response to question 66.
144 Turkey's response to question 145.
145 Exhibit US-63.
146 Ibid.
147 Surveillance and Safeguard Measures for Imports and Administration of Quotas and Tariff Quotas ,
Decree No. 95/6814, published in Turkey's Official Gazette No. 22,300, dated 1 June 1995, in exhibit TR-14.
148 Ibid., Article 1.
149 Ibid., Article 3 (b) and (c).

(b) Decree No. 2004/7333 of 10 May 2004
2.72 Rules on the matter are also contained in Decree No. 2004/7333 of 10 May 2004 on the
Administration of Quotas and Tariff Quotas:150
"This Decree covers the procedures and principles related to the administration of
quotas and tariff quotas that can be applied in the framework of the measures adopted
based on the bilateral or multilateral preferen tial trade agreements or unilaterally by
taking the international obligations into consideration."151
2.73 According to Provisional Article 1 of Decree No. 2004/7333:
"[T]he procedures concerning the quotas and tariff quotas imposed under the Decree
on Surveillance and Safeguard Measures for Imports and Administration of Quotas
and Tariff Quotas, which was put into fo rce in accordance with the Council of
Ministers Decree No. 95/6814 of 30 April 1995 shall carry on under the provisions of
this Decree."
152
2.74 In turn, Provisional Article 2 of Decree No. 2004/7333 states that:
"References to the Decree on Surveillance and Safeguard Measures for Imports and
Administration of Quotas and Tariff Quotas, which was put into force in accordance
with the Council of Ministers Decree No. 95/6814 of 30 April 1995 concerning the
administration of quotas and tariff quotas, shall be understood as referring to this
Decree."
153
2.75 Article 3 of Decree No. 2004/7333 maintains the authority of the FTU:
"(a) to determine the procedures and principles of the application, distribution and
use of quotas and tariff quotas and to prepare documents in this purpose...
(d) to coordinate and give instructi ons to the relevant institutions and
organizations for the implementation of this Decree;
(e) to prepare Regulations and Communiqués concerning the implementation of
this Decree."154
(c) Decree 2005/9315 of September 2005
2.76 Pursuant to Decree No. 2004/7333155, a tariff quota regime for the importation of rice was put
in place by Decree 2005/9315 of 10 August 2005 on the Application of Tariff Quota for the

150 Administration of Quotas and Tariff Quotas , Decree No. 2004/7333, published in Turkey's Official
Gazette No. 25,473, dated 26 May 2004, in exhibits US-4 and TR-15.
151 Ibid., Article 1.
152 Ibid., Provisional Article 1.
153 Ibid., Provisional Article 2.
154 Ibid., Article 3(a), (d) and (e).

Importation of Some Species of Paddy Rice and Rice.
156 This tariff quota was in force at the time this
Panel was established.
2.77 Decree 2005/9315 opened a tariff quota for the im portation of rice from 1 November 2005 to
31 July 2006. 157 Importers who purchased paddy rice from domestic producers or purchased paddy
rice or milled rice from the TMO would be able to benefit from the tariff quotas. 158 These importers
could enjoy tariffs of 20 per cent ad valorem for paddy rice (1006.10) 159, 25 per cent ad valorem for
husked rice (1006.20), and 43 per cent ad valorem for semi-milled or milled rice (1006.30) 160, instead
of paying the rates otherwise set in Turkey's domes tic tariff schedule (respectively, 34, 36 and 45 per
cent ad valorem).
2.78 The maximum amount assigned under the quota w as equal to 300,000 tonnes of semi-milled
or milled rice equivalent (with a conversion factor of 60 per cent for paddy rice and 75 per cent for
brown rice). In other words, the quantity of the tariff quota was equal to 500,000 tonnes if wholly
allocated to paddy rice (1006.10), 400,000 tonnes if wholly allocated to husked rice (1006.20), and
300,000 tonnes if wholly allocated to semi-milled or milled rice (1006.30).
161 In order to import
under the tariff quota, importers would need to obtain an import licence from the FTU.162
2.79 An additional tariff quota of 50,000 tonnes of milled rice at a 43 per cent tariff rate, from
1 October 2005 to 31 July 2006, was assigned to the TMO "to be used in need".163
2.80 As noted above, Article 5 of Decree No . 2005/9315 established a domestic purchase
requirement, which conditioned the allocation of tariff quotas to the purchase of:
"[P]addy rice from [domestic] paddy producers having permission to plant paddy rice
or from their cooperatives and unions [with proof of] this purchase with the certificate
issued by Turkish Grain Board and ... [t o the] purchase of paddy rice or rice from
[the] Turkish Grain Board."164
(d) Communiqué No. 25,943 of the FTU
2.81 The rules for the implementation of the tariff rate quotas, including the conditions of
eligibility, the implementation methods, the applicat ion procedures and requirements, the periods for
application, the expiration dates, and other releva nt details, were provided by means of decrees and
FTU communiqués.

156 Application of Tariff Quota for the Importation of Some Species of Paddy Rice and Rice , Decree
No. 2005/9315, published in Turkey's Official Gazette No. 25,935, dated 13 September 2005, in exhibits TR-9
and US-10.
157 Ibid., Article 1.
158 Ibid., Article 5.
159 With the exception of item 1006.10.10 (rice planting seeds).
160 Decree No. 2005/9315, Article 1.
161 Ibid.
162 Ibid., Article 4.
163 Ibid., Article 2.
164 Ibid., Article 5.

2.82 Accordingly, Communiqué No. 25,943 of the FTU on the Application of Tariff Quota for the
Importation of Some Species of Paddy Rice and Rice 165 contained rules on the implementation of the
tariff rate quota in force at the time of the establishment of this Panel.
2.83 Communiqué No. 25,943 conditioned the alloca tion of tariff quotas under the TRQ opened
between November 2005 and July 2006 on the purch ase of domestic rice from domestic producers
and from the TMO from 1 September 2005 until 31 March 2006, according to the conversion
coefficients provided therein.166 In order to benefit from the tariff quotas, importers were required to
purchase the domestic rice from local producers or fr om the TMO and to submit their form to the
FTU, with all necessary documents, by 10 April 2006. 167 The FTU could allocate any portion of the
quota that remained unallocated by 11 April 2006. 168 Import licences granted by the FTU would be
valid from 1 November 2005 until 31 July 2006 and could not be transferred to third parties.169
2.84 The allocation of tariff quotas depended on the type of domestic rice which was purchased, its
source and its region of origin. According to Communiqué No. 25,943, the following ratios were
applied:
(a) The purchase of 1,000 kg of paddy rice from paddy producers permitted to plant
paddy rice or from their cooperatives and uni ons, from regions other than Balikesir,
Bursa, Çanakkale, Edirne, Istanbul, Kirkareli, Sakarya and Tekirda ğ, allowed for the
import of 800 kg of paddy rice, 640 kg of brown rice, or 480 kg of milled rice.
(b) The purchase of 1,000 kg of paddy rice from paddy producers permitted to plant
paddy rice or from their cooperatives and unions located in Balikesir, Bursa,
Çanakkale, Edirne, Istanbul, Kirk areli, Sakarya and Tekirda ğ, allowed for the import
of 600 kg of paddy rice, 480 kg of brown rice, or 360 kg of milled rice.
(c) The purchase of 1,000 kg of paddy rice from the TMO allowed for the import of
500 kg of paddy rice, 400 kg of brown rice, or 300 kg of milled rice.
(d) The purchase of 1,000 kg of milled rice from the TMO allowed for the import of
833 kg of paddy rice, 666 kg of brown rice, or 500 kg of milled rice.170
2. Earlier tariff quota regimes
(a) Decree 2004/7135 of 20 April 2004 (from 20 April 2004 to 31 August 2004)
2.85 A similar tariff quota regime had been in place the year before, under Decree 2004/7135 of
20 April 2004 on the Application of Tariff Quota for the Im portation of Some Species of Paddy Rice
and Rice.171 This decree was issued pursuant to the rules contained in Decree No. 95/6814 of 30 April

165 Communiqué of the FTU on the Application of Tariff Quota for the Importation of Some Species of
Paddy Rice and Rice , published in Turkey's Official Gazette No. 25,943, dated 21 September 2005, in exhibits
TR-13 and US-11. See also Turkey's first submission, para. 42.
166 Communiqué of the FTU on the Application of Tariff Quota for the Importation of Some Species of
Paddy Rice and Rice , published in Turkey's Official Gazette No. 25,943, dated 21 September 2005, in exhibits
TR-13 and US-11, Articles 1 and 2.
167 Ibid., Article 2.
168 Ibid.
169 Ibid., Articles 3 and 5.
170 Ibid., Article 1.
171 Application of Tariff Quota for the Importation of Some Species of Paddy Rice and Rice, Decree No.
2004/7135, published in Turkey's Official Gazette No. 25,439, dated 20 April 2004, in exhibits US-2 and
TR-11. See also Turkey's first submission, paras. 32-33 and 35.

1995 on Surveillance and Safeguard Measures for Imports and Administration of Quotas and Tariff
Quotas.
2.86 Decree 2004/7135 opened a tariff quota for the importation of rice from the date of the decree
(20 April 2004) until 31 August 2004.
172 Under this regime, importer s could enjoy tariffs of 32 per
cent ad valorem for paddy rice (1006.10) 173, 34 per cent ad valorem for husked rice (1006.20), and
43 per cent ad valorem for semi-milled or milled rice (1006.30) 174, instead of paying the rates
otherwise set in Turkey's domestic tariff schedule.
2.87 The maximum amount assigned under the quota was equal to 72,000 tonnes of semi-milled or
milled rice equivalent (with a conversion factor of 60 per cent for paddy rice and 75 per cent for
brown rice). In other words, the quantity of the tariff quota was equal to 120,000 tonnes if wholly
allocated to paddy rice (1006.10), 96,000 tonnes if wholly allocated to husked rice (1006.20), and
72,000 tonnes if wholly allocated to semi-milled or milled rice (1006.30). 175 In order to import under
the tariff quota, importers would need to obtain an import licence from the FTU.176
2.88 Communiqué No. 25,445 of the FTU on the Application of Tariff Quota for the Importation of
Some Species of Paddy Rice and Rice 177conditioned the allocation of tariff quotas under the TRQ
opened between 20 April 2004 and 31 August 2004 to the purchase of domestic rice from the
2003/2004 crop season from the TMO since 1 Sept ember 2003, according to the conversion
coefficients provided therein. 178 Import licences granted by the FTU would be valid until
31 August 2004 and could not be transferred to third parties.179
2.89 It does not appear that Communiqué No. 25,445 of the FTU specified the amounts of rice that
an importer who purchased 1,000 kg of paddy rice from the TMO would be allowed to import. The
communiqué only seems to have indicated that those amounts would be allocated "based on the
purchase from TMO". 180 Turkey has informed, however, that the allocation of tariff quotas for the
period from 20 April 2004 until 31 August 2004 was carried out according to the following ratios:
(a) The purchase of 1,000 kg of paddy rice from the TMO allowed for the import of
1,000 kg of paddy rice, 800 kg of brown rice, or 600 kg of milled rice.
(b) The purchase of 1,000 kg of milled rice from the TMO allowed for the import of
1,666 kg of paddy rice, 1,333 kg of brown rice, or 1,000 kg of milled rice.181

172 Decree No. 2004/7135, Article 1.
173 With the exception of item 1006.10.10 (rice planting seeds).
174 Decree No. 2004/7135, Article 1.
175 Ibid.
176 Ibid., Article 3.
177 Communiqué of the FTU on the Application of Tariff Quota for the Importation of Some Species of
Paddy Rice and Rice, published in Turkey's Official Gazette No. 25,445, dated 27 April 2004, in exhibits TR-12
and US-3. See also Turkey's first submission, para. 37.
178 Communiqué of the FTU on the Application of Tariff Quota for the Importation of Some Species of
Paddy Rice and Rice, published in Turkey's Official Gazette No. 25,445, dated 27 April 2004, in exhibits TR-12
and US-3, Article 1. See also United States' response to question 69, para. 105.
179 Communiqué of the FTU on the Application of Tariff Quota for the Importation of Some Species of
Paddy Rice and Rice, published in Turkey's Official Gazette No. 25,445, dated 27 April 2004, in exhibits TR-12
and US-3, Articles 3 and 5.
180 Ibid., Article 1. See also United States' first submission, para. 39, and United States' comments on
Turkey's response to question 146, in para. 56.
181 See exhibit TR-12 and Turkey's response to question 146.

(b) Decree 2004/7756 of August 2004 (from 1 November 2004 to 31 July 2005)
2.90 Another tariff quota regime was put in place under Decree 2004/7756 of August 2004 on the
Application of Tariff Quota for the Importation of Some Species of Paddy Rice and Rice.182
2.91 Decree 2004/7756 opened a tariff quota for the im portation of rice from 1 November 2004 to
31 July 2005. 183 Importers who purchased paddy rice from domestic producers or purchased paddy
rice or rice from the TMO would be ab le to benefit from the tariff quotas. 184 These importers could
enjoy tariffs of 32 per cent ad valorem for paddy rice (1006.10)185, 34 per cent ad valorem for husked
rice (1006.20), and 43 per cent ad valorem for semi-milled or milled rice (1006.30) 186, instead of
paying the rates otherwise set in Turkey's domestic tariff schedule.
2.92 The maximum amount assigned under the quota w as equal to 300,000 tonnes of semi-milled
or milled rice equivalent (with a conversion factor of 60 per cent for paddy rice and 75 per cent for
brown rice). In other words, the quantity of the tariff quota was equal to 500,000 tonnes if wholly
allocated to paddy rice (1006.10), 400,000 tonnes if wholly allocated to husked rice (1006.20), and
300,000 tonnes if wholly allocated to semi-milled or milled rice (1006.30).
187 In order to import
under the tariff quota, importers would need to obtain an import licence from the FTU.188
2.93 An additional tariff quota of 50,000 tonnes of milled rice at a 43 per cent tariff rate, from
1 October 2004 to 31 July 2005, was assigned to the TMO "to be used in need".189
2.94 Communiqué No. 25,577 of the FTU on the Application of Tariff Quota for the Importation of
Some Species of Paddy Rice and Rice 190 conditioned the allocation of tariff quotas under the TRQ
opened between November 2004 and July 2005 to the requirement of purchasing domestic rice from
domestic producers and from the TMO since 1 Se ptember 2004, according with the conversion
coefficients provided therein.191 In order to benefit from the tariff quotas, importers were required to
submit their form to the FTU, with all the documents necessary, by 31 January 2005. 192 The FTU
could extend this date, provided there rema ined an unallocated portion of the quota by
1 February 2005.193 Indeed, the date for filing the forms wa s twice extended, first to 29 April 2005

182 Application of Tariff Quota for the Importation of Some Species of Paddy Rice and Rice, Decree No.
2004/7756, published in Turkey's Official Gazette No. 25,566, dated 27 August 2004, in exhibit TR-16 and US-
 5. See also Turkey's first submission, para. 38.
183 Decree No. 2004/7135, Article 1.
184 Ibid., Article 5.
185 With the exception of item 1006.10.10 (rice planting seeds).
186 Decree No. 2004/7135, Article 1.
187 Ibid.
188 Ibid., Article 4.
189 Ibid., Article 2.
190 Communiqué of the FTU on the Application of Tariff Quota for the Importation of Some Species of
Paddy Rice and Rice , published in Turkey's Official Gazette No. 25,577, dated 8 September 2004, in
exhibit TR-17 and US-6. See also Turkey's first submission, para. 40.
191 Communiqué of the FTU on the Application of Tariff Quota for the Importation of Some Species of
Paddy Rice and Rice , published in Turkey's Official Gazette No. 25,577, dated 8 September 2004, in
exhibit TR-17 and US-6, Article 1.
192 Ibid., Article 2.
193 Ibid.

and then to 15 June 2005.
194 Import licences granted by the FTU would be valid from 1 November
2004 until 31 July 2005 and could not be transferred to third parties.195
2.95 The allocation of tariff quotas depended on the type of domestic rice which was purchased, its
source and its region of origin. According to Communiqué No. 25,577, the following ratios were
applied:
(a) The purchase of 1,000 kg of paddy rice from paddy producers permitted to plant
paddy rice or from their cooperatives and uni ons, from regions other than Balikesir,
Bursa, Çanakkale, Edirne, Kirkareli, Sakarya and Tekirda ğ, allowed for the import of
1,000 kg of paddy rice, 800 kg of brown rice, or 600 kg of milled rice.
(b) The purchase of 1,000 kg of paddy rice from paddy producers permitted to plant
paddy rice or from their cooperatives and unions located in Balikesir, Bursa,
Çanakkale, Edirne, Kirkareli, Sakarya and Tekirdağ, allowed for the import of 700 kg
of paddy rice, 560 kg of brown rice, or 420 kg of milled rice.
(c) The purchase of 1,000 kg of paddy rice from the TMO allowed for the import of
500 kg of paddy rice, 400 kg of brown rice, or 300 kg of milled rice.
(d) The purchase of 1,000 kg of milled rice from the TMO allowed for the import of
833 kg of paddy rice, 666 kg of brown rice, or 500 kg of milled rice.196
3. Import licences
2.96 Under the tariff quota regime for the importation of rice that was in place at the time when
this Panel was established, pursuant to Decree 2005/9315 of September 2005 197, importers who
wished to benefit from the reduced tariffs n eeded to obtain an import licence from the FTU.
The licence would then have to be presented to th e related customs administration on the date in
which the customs liability arises.198
2.97 Under Communiqué No. 25,943, applications for import licences could be submitted from the
day the in which the communiqué entered into for ce (i.e., 21 September 2005), until 10 April 2006.
Applications lacking the complete information or documents required and applications submitted after
the depletion of the tariff quota would not be considered.199

194 Exhibits US-8 and US-9. See also United States' first submission, para. 46, and Turkey's first
submission, para. 122.
195 Communiqué of the FTU on the Application of Tariff Quota for the Importation of Some Species of
Paddy Rice and Rice , published in Turkey's Official Gazette No. 25,577, dated 8 September 2004, in
exhibit TR-17 and US-6, Articles 3 and 5.
196 Ibid., Article 1.
197 Application of Tariff Quota for the Importation of Some Species of Paddy Rice and Rice, Decree No.
2005/9315, published in Turkey's Official Gazette No. 25,935, dated 13 September 2005, in exhibits TR-9 and
US-10.
198 Ibid., Article 4.
199 Communiqué of the FTU on the Application of Tariff Quota for the Importation of Some Species of
Paddy Rice and Rice , published in Turkey's Official Gazette No. 25,943, dated 21 September 2005, in exhibits
TR-13 and US-11, Article 2.

2.98 Import licences were non-transferable and va lid from 1 November 2005 until 31 July 2006. 200
During this time, the items had to enter into circulation. 201 The import licences had to be returned to
the FTU's Directorate General for Imports within 10 days of their expiration.202
2.99 The Annex of Communiqué No. 25943 of the FTU contained the form that should be
completed by applicants and listed the informatio n and documents required. This form required
information such as: (a) importer's name, addres s, telephone and fax number, tax registration number
and e-mail address; (b) country of origin and co untry in which the product was to be loaded for
transportation into Turkey; (c) description of th e product being imported, item name, as indicated in
the HS code, and HS code in 12 digits; (d) qua ntity and unit of measurement of the product being
imported; (e) value of the product being imported; (f) original invoice or proforma invoice;
(g) identification of the Directorate of Custom s and Customs Enforcement from which importation
was to be made; (h) original certificate issued by TMO, which proved the purchase of domestic rice;
(i) original invoice of the purchase of domestic ri ce; and, (j) approved copies that proved the
signatory power of the applicant and Trade Records Gazette where the name of the company had been
published.203
F. THE TURKISH GRAIN BOARD
2.100 The Turkish Grain Board is described as a "S tate Economic Corporation organized under the
name Toprak Mahsulleri Ofisi (T.M.O.) A. Ş." by the Turkish Grain Board (Agricultural Products
Office, Inc.) Articles of Incorporation 204, which is the legal instrument with "all relevant information
regarding the nature, functions and composition of the TMO" provided by Turkey.205
2.101 A recent Trade Policy Review of Turkey conducted by the WTO Secretariat 206 only refers to
the TMO when describing the changes it was under going at the time as part of its restructuring
process:
"[O]n the basis of the EU system... [i.e.] limiting TMO's purchases to emergency and
supplementary purchases; transferring the existing storage facilities to the private
sector, and then leasing such facilities to pr oducers; maintaining TMO as a central
institution with a view to facilitating emer gency and intervention purchases in the
medium term; and guaranteeing that th e TMO's purchases are made only through the
commodity markets.207"208
No particular reference is made to its participation in the Turkish rice market.

2.102 The TMO Articles of Incorporation define a st ate economic corporation as a "state economic
enterprise the capital of which is fully held by th e state and which is founded to operate in the
economy according to commercial practices."
209 Article 3, paragraph 4, of the TMO Articles of

200 Communiqué of the FTU on the Application of Tariff Quota for the Importation of Some Species of
Paddy Rice and Rice , published in Turkey's Official Gazette No. 25,943, dated 21 September 2005, in exhibits
TR-13 and US-11, Articles 3 and 5.
201 Ibid., Article 4.
202 Ibid., Article 9.
203 Exhibit TR-13. See also exhibit TR-10.
204 Turkish Grain Board (Agricultural Products Office, Inc.) Articles of Incorporation , in
exhibit TR-40.
205 Turkey's response to questions 90 (a), (b) and (c).
206 Trade Policy Review of Turkey – Report by the Secretariat, WT/TPR/S/125, 19 November 2003.
207 (footnote original) Republic of Turkey (2002).
208 Trade Policy Review of Turkey, para. IV.29.
209 TMO Articles of Incorporation, Article 2, paragraph 3.

Incorporation provides that "the Corporation's capital is TL 50 (fifty) billion [Now, TL 330 trillion
(YPK resolution no. 985/66 of 8.12.1998)] which is fu lly held by the State. The Corporation's capital
may be changed by a Coordination Board decision upon a proposal by the competent Ministry."
210
Further, Articles 2 and 20 of the same legal text provide that the TMO's budget is controlled by the
state and supervised by the competent Ministry and State Planning Organization.211
2.103 The function of the TMO is that of preventing "the falling of grain prices below normal levels
in view of the producers and extraordinary incr ease thereof in view of the interests of the
consumers".212 One of the ways to achieve market stabilization, would be by buying and selling
grains, as well as creating and keeping necessary stocks. 213 In Turkey's words, "the TMO acts as an
intervention agency."214
2.104 The TMO neither buys nor sells any brown rice. 215 Both Decree No. 2004/7556 and Decree
No. 2005/9315 granted the TMO a tariff quota of 50,000 tonnes of milled rice "to be used in need", in
the context of the tariff rate quotas opened from November 2004 to July 2005 and from
November 2005 to July 2006.
216 However, purchases of rice by the TMO have been restricted to
paddy rice.217
2.105 Data provided by Turkey regarding the quantities purchased by the TMO between 2003 and
2006 is the following:218
TMO PADDY RICE PURCHASES (TONNES)
2003 130,632
2004 14,855
2005 11,899
2006* 12,464
* As of 15 October 2006

2.106 Based on these figures, Turkey asserts that:
"In the years 2005 and 2006, the Turkish Grain Board (TMO) was not determining
market prices, due to the fact that it ma de purchases of very little quantities of paddy
rice (i.e., approximately 14,000 tonnes)".219
2.107 The quantities of rice sold by the TMO from 2003 to 2006, as presented by Turkey,
correspond to:220

210 TMO Articles of Incorporation, Article 3, paragraph 4, and Article 20.
211 Ibid., Articles 2 and 20. But see Turkey's response to question 92 (b).
212 Article 4 of the Turkish Grain Board [Agricultural Products Office, Inc.] Articles of Incorporation.
213 Ibid, Article 4, paragraph 1. See also Turkey's response to question 91.
214 Turkey's response to question 111.
215 Exhibit TR-29.
216 Application of Tariff Quota for the Importation of Some Species of Paddy Rice and Rice, Decree No.
2004/7556, published in Turkey's Official Gazette No. 25,566, dated 23 August 2004, in exhibits TR-16 and
US-5, Article 2. See also Application of Tariff Quota for the Importation of Some Species of Paddy Rice and
Rice, Decree No. 2005/9315, published in Turkey's Official Gazette No. 25 ,935, dated 13 September 2005, in
exhibits TR-9 and US-10, Article 2.
217 Exhibit TR-30.
218 Ibid.
219 Turkey's response to question 110.

 TMO PADDY RICE
SALES (TONNES)
TMO MILLED RICE
SALES (TONNES)
2003 - 17,789
2004 119,880 14,122
2005 3,228 6,639
2006* 9,575 2,718
* As of 16 November 2006

2.108 Regarding the prices at which TMO purchases ri ce, both Turkey and the United States have
provided the Panel with the figures presented in the following tables: (a) the first table reflects the
information submitted by the United States on pad dy and milled rice, with periods corresponding to
the Turkish Marketing Years from 2003 to 2007; (b) the second table contains the information
submitted by Turkey on paddy rice, with periods corresponding to calendar years from 2004 to 2006;
(c) the third table contains the information subm itted by Turkey on milled rice, with periods
corresponding to calendar years from 2003 to 2006; (d) the fourth table reflects the comparison
between the first column of the first and the third tables. All the figures are expressed in new Turkish
lira by Tonnes (YTL/T).
221
Turkish Grain Board Announced Prices*:222

Turkish
Marketing Year
(Sept/Aug)
Paddy Procurement Prices
from Producers for
Osmancik
Milled Rice Sales Price for
Osmancik
2003/2004 700 1250
2004/2005 756 1500
2005/2006 720 1500
2006/2007 720 1500
*Sources: Turkish Grain Board website 2004/2005, 2005/2006 and 2006/2007.
Turkish Rice Millers Association 2003/2004 prices. Paddy prices are for rice with
average milling rate.

Paddy Rice Selling Prices Declared by the TMO (Yearly Averages)*:223

 BALDO OSMANCIK
2004* 840 743
2005 978 871
2006 970 772
* No data available for the period prior to January 2004

220 Exhibit TR-30.
221 Some of the tables below make reference to "Baldo" and "Osmancik". As explained by Turkey in
exhibit TR-29, "[i]n Turkish rice market, long grain rices are sub-grouped under these specific names."
222 Exhibit US-56.
223 Exhibit TR-29.

Rice Selling Prices (Wholesale) Declared by TMO (Yearly Averages):
224

 BALDO OSMANCIK
2003 1,352 1,209
2004 1,543 1,338
2005 1,741 1,469
2006 1,630 1,470

Selling Price by the TMO of Osmancik Milled Rice as Presented by the United States and Turkey:

 United States TURKEY
2003/2004 (2003) 1,250 1,209
2004/2005 (2004) 1,500 1,338
2005/2006 (2005) 1,500 1,469
2006/2007 (2006) 1,500 1,470

2.109 The TMO determines the price at which it purch ases rice, which Turkey has submitted as the
following:225
PURCHASING PRICES DECLARED BY TMO AND PRICES
RECEIVED BY GROWERS FOR LONG GRAIN PADDY RICE
(NEW TURKISH LIRAS BY TONNES)
 DECLARED PRICE RECEIVED PRICE*
2002 600 554
2003 700 628
2004 756 695
2005 720 612
2006 720 639
* The difference between the declared and the received prices is due to quality

G. LETTERS OF ACCEPTANCE
1. The so-called "letters of acceptance"
2.110 The record shows that, in a number of cases, MARA's General Directorate of Protection and
Control has recommended to the Minister of Agri culture and Rural Affairs that the granting of
Certificates of Control be temporarily suspended. These recommendations have been made through
documents that have been called "letters of Accepta nce" throughout the proceedings of this Panel.

224 Exhibit TR-29.
225 Ibid.

Letters of Acceptance were signed by MARA's Ge neral Director, and then by the Minister in
acceptance of the recommendation.226
2.111 As identified below, copies of several letters of acceptance of this type have been submitted
as exhibits by the complainant. Their ex istence has not been rebutted by Turkey. 227 The legal nature
of these documents, however, has been contested between the parties. Turkey has also argued that the
letters of acceptance "often contain confidential positions".228
2. Evidence of letters of acceptance
2.112 The record shows evidence of the following lette rs of acceptance: (a) letter No. 107, dated
23 January 2004 229; (b) letter No. 905, dated 28 June 2004 230; (c) letter No. 1,795, dated
30 December 2004231; and, (d) letter number unknown, dated 24 March 2006232.
2.113 Some of these letters, in turn, make reference to other letters of acceptance of which there is
no copy on file. Namely: (a) letter No. 964 of 10 September 2003; and, (b) letter No. 1,304 of
29 July 2005.
3. Content of letters of acceptance
2.114 Letter No. 107 of 23 January 2004 . Refers to a letter from th e ministerial office No. 964 of
10 September 2003, which determined the period of issuance of Certificates of Control for rice from
1 March 2004 and for paddy rice from 1 August 2004 , both ending on 1 September 2004. It then
notes that the General Directorate of the TMO has as ked that Certificates of Control for rice should
not be issued until 30 June 2004, "on the grounds that it became evident th rough the talks with rice
[and] paddy rice growers, as well as the importers, based on estimates, [that] rice stocks [would] be
adequate for [Turkey's] needs until ... June 30, 2004." The letter concludes by requesting a
rescheduling of the opening date for the period of issuance of Certificates of Control to 1 July 2004.
233
2.115 Letter No. 905 of 28 June 2004 . Refers to a letter from the ministerial office No. 107 of
23 January 2004, which determined the period of issuance of Certificates of Control from 1 July 2004
to 1 August 2004 for rice, and from 1 July 2004 to 1 September 2004 for paddy rice. It then notes that
the General Directorate of the TMO has stated that:
"[P]addy rice harvest season would begin as of September; and that even though it is
difficult to make an accurate estimate, it is expected to be at the level of the previous
year (370,000 tons); and that it would be appropriate to extend the period of
[Certificates of Control] issuance which w ould initially have begu n in July 01 2004,
until January 2005, in order to protect the national growers, to redress their
grievances and to avert building paddy rice and rice stocks needlessly".

226 See, for example, United States' first submission, paras. 22-34.
227 See Turkey's opening statement in the second meeting with the Panel, para. 12.
228 Turkey's first submission, paras. 78-79, and Turkey's response to question 27(b). Turkey did not
ask, however, that the Panel adopt any particular me asures in order to grant special protection to the
confidentiality of the content of the letters that were submitted as evidence by the United States.
229 Exhibit US-12.
230 Exhibit US-13.
231 Exhibit US-14.
232 Exhibit US-36.
233 Exhibit US-12.

The letter concludes by requesting a rescheduling of the opening date for the period of issuance of
Certificates of Control to 1 January 2005 for mille d rice and paddy rice, with a closing date of 1
August 2005 for milled rice and 1 September 2005 for paddy rice.
234

2.116 Letter No. 1,795 of 30 December 2004
. Refers to a letter from the ministerial office No. 905
of 28 June 2004, which determined the issuance period of Certificates of Control from
1 January 2005, with a closing date of 1 August 2005 for milled rice and 1 September 2005 for paddy
rice. It then notes that the General Directorate of the TMO has stated "that the practice of not issuing
[Certificates of Control] for the persons and cor porations who do not purchase paddy rice from the
growers controlled by TMO and directly from TM O is deemed appropriate to be extended until
07.30.2005". The letter concludes by requesting a rescheduling of the opening date for the period of
issuance of Certificates of Control to 1 August 2005.235
2.117 Letter number unknown of 24 March 2006 . Refers to a letter from the ministerial office
No. 1,304 of 29 July 2005, which de termined that Certificates of C ontrol would not be issued "until a
new policy [was] in place". It also refers to th e fact that the United States has taken action in the
WTO "about our implementations on rice imports". It goes on to note the letters received from the
General Directorate of the TMO numbered 531 a nd 603 of 3 March 2006 and 14 March 2006,
respectively.236 Those letters allegedly state that:
"The applicability of the Tariff Quota System will not be possible in the coming
years. Our producers should be supported through paying the price difference to
close the gap with world prices, and the system should be operated without leading to
international disputes. Meanwhile, the temporary ban of issuance of control
certificates during harvest season will be suitable to be kept in place".
The letter concludes by requesting that the dates to issue Certificates of Control to import milled rice
and paddy rice be rearranged to begin on 1 Ap ril 2006 and close on 1 August 2006. It also
recommends that Certificates of Control be issued one at a time, each limited to 10,000 tonnes for
milled rice and 15,000 tonnes for paddy rice. New Ce rtificates of Control for the importation of rice
would only be authorized after the quota of each previous certificate was fully used.
237

4. Nature of letters of acceptance
2.118 The nature of the letters of acceptance has been disputed by the parties. The United States
has argued that these letters provide a binding in struction which is relied upon by MARA authorities
to deny the issuance of Control Certificates for the importation of rice.238
2.119 In turn, Turkey has stated that these documents are:
"[M]ere instruments of internal communication among Turkish administrators and
public officials [that] often contain confid ential positions and/or political statements
which are aimed at developing unofficial policy recommendations."239
2.120 On the occasion of the second substantive meeti ng, the Panel referred to these statements.
It then asked Turkey whether the Minister of Agriculture and Rural Affairs could refuse the

234 Exhibit US-13.
235 Exhibit US-14.
236 See the latter in exhibit US-37.
237 Exhibit US-36.
238 United States' rebuttal, para. 29.
239 Turkey's first submission, para. 78. See also Turkey's rebuttal, para. 23 and Turkey's response to
question 23.

recommendation made by a Director General of MARA through a letter of acceptance. The Panel
asked Turkey to provide documentar y evidence in support of its response. 240 The Panel also asked
Turkey to provide evidence of letters of accep tance containing policy recommendations that the
Minister of Agriculture and Rural Affairs had not approved. 241 In response to these questions, Turkey
replied that "the Minister may refuse the reco mmendation made by a Director General of MARA". 242
It did not provide any specific documen tary evidence to support this response. 243 Turkey also stated
that, "given the privileged nature of the communi cations internal to the Administration and the
confidential nature of the information contained therein", "Turkey [was not] in the position to
circulate" any such documents.244
2.121 Also on the occasion of the second substantive meeting, and in response to a different
question from the Panel, Turkey stated that "[n]o Letters of Acceptance relevant to this proceeding
were ever circulated within the Administration prio r to the ones identified by the United States in its
submission".245
H. LETTER FROM THE MINISTER OF STATE OF TURKEY
2.122 On 24 March 2006, after this Panel was establishe d, the Minister of State of Turkey sent a
letter to the United States Trade Representative, e xpressing the belief that a mu tually agreed solution
could be found to the dispute concerning the measur es related to the importation of rice into Turkey.
In his letter, the Minister of State informed that "Control Certificate will be issued as of
April 1, 2006".246
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1 In this dispute, the United States has challenge d the restrictions allegedly maintained by
Turkey on the importation of rice. More specifi cally, the United States h as identified the following
measures:
(a) The alleged denial or failure to grant li cences to import rice at or below the bound
rate of duty;
(b) The alleged requirement that importers must purchase specified quantities of
domestic rice, in order to be allowed to import specified quantities of rice at reduced-
tariff levels;
(c) Turkey's administration of tariff-rate quotas for reduced tariff duty imports of rice;
and,
(d) Turkey's administration of its import regime for rice, more generally.
3.2 More specifically, in its submissions the Unite d States has articulated the following claims
with regard to the provisions of WTO covered agreements:

240 Panel's question 141(e) to Turkey.
241 Panel's question 142 to Turkey.
242 Turkey's response to question 141(e).
243 Ibid.
244 Turkey's response to question 142.
245 Turkey's response to question 143.
246 Exhibit US-35. See also United States' first submission, para. 32, and Turkey's response to
question 138.

(a) That Turkey's alleged denial or failure to grant licences to import rice at or below the
bound rate of duty is inconsistent with:
(i) Article XI:1 of the GATT 1994 , because it is a prohibition or restriction on
imports, other than in the form of a duty, tax or other charges;
(ii) Article 4.2 of the Agreement on Agriculture , because it is a measure of the
kind that have been required to be converted into ordinary customs duties and
which Members may not maintain or resort to;
(iii) Articles 1.4(a) and 1.4(b) of the Import Licensing Agreement and
Articles X:1 and X:2 of the GATT 1994 , because Turkey has not published
such measure and, thus, has neither provided an opportunity for governments
and traders to become acquainted with it, nor has it provided Members with
the opportunity to provide written comments and to discuss those comments
upon request; and
(iv) Articles 3.5(e) and 3.5(f) of the Import Licensing Agreement , because
Turkey does not specify a timeframe within which import licence
applications that are submitted will be approved or rejected and does not
provide applicants with the reasons for rejection.
(b) That Turkey's alleged requirement that importers must purchase domestic rice is
inconsistent with:
(i) Article III:4 of the GATT 1994 , because Turkey accords imported rice less
favourable treatment than that accorded to domestic rice, with respect to a
measure that affects its internal sale, offering for sale, purchase,
transportation, distribution or use;
(ii) Article XI:1 of the GATT 1994 , because it is a restriction on imports other
than in the form of duties, taxes, or other charges;
(iii) Article 2.1 and paragraph 1(a) of Annex 1 (sic) of the TRIMs Agreement;
and
(iv) Article 4.2 of the Agreement on Agriculture , because it is a measure of the
kind that have been required to be converted into ordinary customs duties and
which Members may not maintain or resort to.
(c) That Turkey's administration of tariff-rate quotas (TRQs) for reduced tariff duty
imports of rice is inconsistent with Article 3.5(h) of the Import Licensing
Agreement, because Turkey administers its TRQs in such a way as to discourage the
full utilization of quotas.
(d) That Turkey's alleged requirement that importers must purchase domestic rice, in
conjunction with its alleged denial or failure to grant licences to import rice at or
below the bound rate of duty, is inconsistent with:
(i) Article XI:1 of the GATT 1994 , because it is a restriction on imports other
than in the form of duties, taxes, or other charges;

(ii) Article 4.2 of the Agreement on Agriculture , because it is a measure of the
kind that have been required to be converted into ordinary customs duties and
which Members may not maintain or resort to; and
(iii) Article 1.6 of the Import Licensing Agreement , because applicants have to
approach more than one administra tive body in connection with their
applications.247
(e) That Turkey's administration of its import regime for rice is inconsistent with:
(i) Article 3.5(a) of the Import Licensing Agreement , because Turkey has
failed to provide, upon the request of the United States, all relevant
information concerning the administration of its import licensing regime and
the import licences which have been granted over a recent period; and
(ii) Articles 5.1, 5.2(a), (b), (c), (d), (e), (g) and (h), 5.3 and 5.4 of the Import
Licensing Agreement , because Turkey has failed to notify its import
licensing regime for rice.
3.3 Turkey has disputed the facts presented by th e United States. More specifically, Turkey has
argued that:
(a) Throughout the period covered by this dis pute, over-quota imports have taken place
and Certificates of Control have been issued;248
(b) Certificates of Control are not import licences;249
(c) The tariff-rate quotas (TRQs) regime for reduced-tariff duty imports of rice is no
longer in force and the Panel should theref ore refrain from making findings on those
measures or, if it decided to make these findings, it should abstain from making any
recommendation to the Dispute Settlement Body;250
(d) While it was in force, the TRQs regime fo r reduced-tariff duty imports of rice "was
administered on the basis of automatic import licensing procedures and certain legal
requirements which were applied in a non-di scriminatory, predictable and transparent
fashion"; and
251
(e) The United States has not made a prima faci e case to support its own claims and that
Turkey's relevant laws, regulations and pr ocedures, both in relation to MFN and to
TRQ rice imports, are not inconsistent with Articles III:4, X:1, X:2, and XI:1 of the
GATT 1994; Article 4.2 of the Agreement on Agriculture; Articles 1.4(a) and (b),
3.5(a), (e), (f), and (h), 5.1, 5.2(a), (b), (c), (d), (e), (g), and (h), 5.3, and 5.4 of the
Agreement on Import Licensing Procedures; nor with Article 2.1 and paragraph 1(a)
of Annex 1 of the Agreement on Trade-Related Investment Measures.
252

247 Comments of the United States concerning the draft descriptive part of the Panel's Report, 20 March
2007, page 4.
248 See, inter alia , Turkey's first submission, para. 26, Tu rkey's opening statement at the second
substantive meeting, para. 8, and Turkey's closing statement at the second substantive meeting, paras. 1 and 4.
249 See, inter alia, Turkey's first submission, paras. 27, 47 to 57, 71 and 87.
250 See, inter alia, Ibid., paras. 2, 6, and 136 to 139.

IV. ARGUMENTS OF THE PARTIES AND THIRD PARTIES
4.1 The arguments of the parties and third parties ar e set out in their written submissions and oral
statements to the Panel. Executive summaries of those submissions and statements are appended to
this report.
V. INTERIM REVIEW
A. R
EQUESTS FOR REVIEW OF PRECISE ASPECTS OF THE INTERIM REPORT
5.1 The Panel submitted its interim report to the pa rties on 3 May 2007. On 18 May, the Panel
received written requests for review of precise aspect s of the interim report from both parties. On
1 June, the parties submitted written comments on each other's written requests for review.
5.2 Pursuant to Article 15.3 of the DSU, this sec tion of the Panel Report contains the Panel's
response to the requests and comments made by the parties in relation to the interim report. The Panel
has modified aspects of its report in light of the parties' requests and comments where it considered it
appropriate. The Panel has also made certain revi sions and editorial corrections for the purposes of
clarity and accuracy, as explained below. Referenc es to paragraph numbers and footnotes in this
Section refer to those in the interim report, except as otherwise noted.
B. REQUEST FOR JUDICIAL ECONOMY
5.3 In paragraphs 7.109 to 7.118, the Panel had foun d that Turkey's denial or failure to grant
Certificates of Control to import rice outside of the tariff rate quota, from September 2003 and for
different periods of time, could be characterized as a quantitative import restriction and, therefore, as
a measure of the kind which have been required to be converted into ordinary customs duties under
Article 4.2 of the Agreement on Agriculture. Later, in paragraphs 7.119 to 7.131, the Panel found that
the same measure could also be characterized as a practice of discretionary import licensing and,
likewise, as a measure of the kind which have been required to be converted into ordinary customs
duties under Article 4.2 of the Agreement on Agriculture.
5.4 Turkey requested that the Panel remove para graphs 7.120 to 7.131 from the report. In
Turkey's view, once the Panel found that the ch allenged measure could be characterized as a
quantitative import restriction, it should then exercise judicial economy regarding its consideration of
the same measure as a practice of discretionary import licensing.
5.5 In its comments on Turkey's requests for revi ew, the United States asked the Panel not to
exercise judicial economy in the manner requested by Turkey. In the United States' view, this would
be a "false" exercise of judicial economy, as the "Panel’s analysis with regard to the U.S. argument on
discretionary import licensing is helpful to resolvi ng the dispute". The United States added that
nothing in the DSU requires a panel to exercise judicial economy. The United States recalled
Articles 3.4 and 3.7 of the DSU to the effect that:
"[A] panel's recommendations and rulings 's hall be aimed at achieving a satisfactory
settlement of the matter' [and that] 'the aim of the dispute settlement mechanism is to
secure a positive resolution to a dispute'."
5.6 The United States finally argued that:
"[I]n Chile – Price Bands , a dispute with a closely analogous situation involving the
same provision at issue (Article 4.2), the panel made findings that the measure at
issue constituted both a variable import levy and a system of minimum import prices

within the meaning of footnote 1 of Article 4.2 of the Agreement on Agriculture. The
Appellate Body agreed with this approach and upheld the panel's findings."
5.7 The Panel has reviewed the releva nt paragraphs in the light of Turkey's request. As noted by
the Appellate Body, a panel has the discretion to exercise judicial economy and, therefore:
"[T]he discretion to determine the claims it must address in order to resolve the
dispute between the parties -- provided that t hose claims are within that panel's terms
of reference."253
5.8 In our view, the consideration of Turkey's denial or failure to grant Certificates of Control to
import rice outside of the tariff rate quota as a quantitative import restric tion would be enough to
conclude that it is a measure of the kind which have been required to be converted into ordinary
customs duties and, therefore, a measure incons istent with Article 4.2 of the Agreement on
Agriculture. In any event, if this measure was not to be considered as a quantitative import
restriction, we believe that it can nevertheless be characterized as a practice of discretionary import
licensing. The Panel has therefore decided not to exercise judicial economy in the manner requested
by Turkey.254
C. BURDEN OF PROOF
5.9 The United States requested a change in the language of paragraph 7.57. In its original text,
the paragraph stated that:
"In order to assess whether the United Stat es has met its initial burden, the Panel will
accordingly consider if the evidence on the record, as submitted by both parties, is
sufficient to raise a preliminary presumption that Turkey has engaged in the denial, or
failure to grant, licences to import rice outsi de of the tariff rate quota. Only if the
evidence on the record supported such a presumption, would the burden then be
shifted unto Turkey to adequately rebut it. If the United States were successful in
raising that preliminary presumption, and Turkey failed to rebut it, the Panel would
then consider whether the facts so dem onstrated can be qualified as constituting a
border measure of the kind which has been required to be converted into ordinary
customs duties by the Agreement on Agriculture."
5.10 The United States proposed the following text for the paragraph 7.57:
"In order to assess whether the United Stat es has met its initial burden, the Panel will
accordingly consider if the United States has provided evidence and argumentation on
the record, sufficient to establis h that Turkey has engaged in the denial, or failure to
grant, licences to import rice outside of the tariff rate quota. Only if the United States
has provided evidence and argumentation on the record sufficient to make out a
prima facie case, would the burden then be shif ted onto Turkey to adequately rebut
the U.S. allegations. If the United States were successful in establishing its prima
facie case, and Turkey failed to rebut it, th e Panel would then consider whether the
United States has established that the facts so demonstrated can be qualified as

253 Appellate Body Report on India – Patents (US), para. 87.
254 We additionally note that, in Chile – Price Band System , the Panel and the Appellate Body
considered the same measure to be similar to both a variable import levy and a minimum import price and did
not exercise judicial economy in this regard. Panel Report on Chile – Price Band System , paras. 7.26-7.47.
Appellate Body Report on Chile – Price Band System, paras. 192-262.

constituting a border measure of the kind wh ich has been required to be converted
into ordinary customs duties by the Agreement on Agriculture."
5.11 In the United States' opinion, the proposed change in language would:
"[A]void any possible mis-interpretation of the current text as partially relieving the
complainant of its burden of making out a prima facie case by placing some of that
burden on the respondent. The burden of making out a prima facie case by making
argumentation and providing evidence on the r ecord lies solely with the complaining
party – in this case, the United States. Once the complainant has made out a prima
facie case, a burden which the United States has met, it falls to the responding party
to rebut that prima facie case with evidence and arguments of its own."
5.12 In our view, the duty that a panel has, under Article 11 of the DSU, to "make an objective
assessment of the matter before it, including an obj ective assessment of the facts of the case", implies
that the panel is bound to consider all the eviden ce on record, which incl udes the evidence submitted
by the parties and that procured by the panel it self under its broad authority "to seek information and
technical advice from any individual or body which it deems appropriate" in the terms of Article 13.1
of the DSU. As noted by the Appellate Body in US – Wheat Gluten, "under Article 11 of the DSU, a
panel must draw inferences on the basis of all of the facts of record relevant to the particular
determination to be made."
255 A panel's duty to consider all available evidence on record does not
relieve the complaining party of its burden to make a prima facie case that a challenged measure is
inconsistent with the WTO agreements by putting forward adequate legal arguments and evidence.
Indeed, in the lack of adequate legal arguments and evidence to sustain its claim, the panel would
have to conclude that the complaining party has failed to make a prima facie case. The
aforementioned rule regarding the allocation of the burden of proof was articul ated in paragraph 7.56
of the interim report:
"[W]e are of the view that, in this ca se, the initial burden of proof rests upon the
United States, as a complainant, to establish its prima facie case that the challenged
conduct, first, has existed, and then, that it is inconsistent with the invoked provision
of the WTO covered agreements, i.e., Artic le 4.2 of the Agreement on Agriculture.
If the United States meets this test, the burde n would then be on Turkey to rebut the
said claim."
5.13 Accordingly, the Panel has revised the langua ge of paragraph 7.57, so as to avoid any
possible misinterpretation regarding the proper allocation of the burden of proof.
D. P
ARTIES' DUTY TO COLLABORATE
5.14 The United States requested that the Panel remove the references made to the Panel Report on
Argentina – Textiles and Apparel in paragraphs 7.6 and 7.94, rega rding the existence of a "rule of
collaboration" by which "the adversary is obligated to provide the tribunal with relevant documents
which are in its sole possession". In the United States' opinion:
"[T]hese references to a 'rule of collaboration' [should] be deleted, as they are not
necessary to resolve the matter, and could be read as going beyond the requirements
of the DSU, which does not provide for such a rule."

255 Appellate Body Report on US – Wheat Gluten , para. 174. See also Appellate Body Report on
Canada – Aircraft, paras. 204-205.

5.15 As noted above, panels are under a duty, pursuant to Article 11 of the DSU, to "make an
objective assessment of the matter before it, includ ing an objective assessment of the facts of the
case". In order to exercise such duty, panels ha ve been given authority "to seek information and
technical advice from any individual or body which [they deem] appropriate" by Article 13.1 of the
DSU. Article 13.1 also refers explicitly to the Memb ers' obligation to collaborate with panels in the
exercise of their duty:
"A Member should respond promptly and fully to any request by a panel for such
information as the panel considers necessary and appropriate."
5.16 The parties' rule of collaboration, therefore, does not go beyond the requirements of the DSU
but rather flows explicitly from its text. In Canada – Aircraft , the Appellate Body referred to "the
duty of a Member to comply with the request of a panel to provide information", noting that under
Article 13.1 of the DSU "Members are [...] under a duty and an obligation to 'respond promptly and
fully' to requests made by panels for information".256
5.17 Despite these considerations, the Panel has revised the language of the first part of
section VII.A (on Burden of Proof) in order to avoid an y misinterpretation of the applicable rules. In
particular, the Panel has inserted an introductory paragraph to that section and made a small
adjustment to the language of paragraphs 7.1 and 7. 8 of the interim report. It also included two new
paragraphs at the end of that section. The Panel has made small adjustments into paragraphs 7.94 and
7.95, mainly to avoid repeating the reference to the Panel Report on Argentina – Textiles and Apparel.
E. APPROPRIATE INFERENCES
5.18 The United States requested the Panel to m odify the language in the second sentence of
paragraph 7.103, replacing the expression "necessary adverse infe rences" with "appropriate
inferences". In the United States' opinion:
"[W]hile paragraphs 7 and 8 of Anne x V of the Agreement on Subsidies and
Countervailing Measures specifically provide for 'adverse' inferences, no other
covered agreement contains such language. Nevertheless, the 'appropriate' inference
to be drawn from Turkey's failure to provi de evidence in support of its arguments,
either on its own or in response to repeated requests by the Panel, is that 'Turkey has
failed to rebut the presumption that, from September 2003 and for different periods of
time, it has adopted a decision to deny, or fail to grant, Certificates of Control to
import rice outside of the tariff rate quota.'"
5.19 The United States has also requested that the Pane l remove the last part of paragraph 7.103,
including the reference to the Appellate Body Report on Canada – Aircraft.
5.20 In the light of such request, the Panel has revised the language of the paragraph 7.103.
F. P
ANEL'S RECOMMENDATIONS
5.21 The United States requested the Panel to issue a specific recommendation to the DSB
regarding the domestic purchase requirement. In the United States' opinion, the Panel could
recommend:

256 Appellate Body Report on Canada – Aircraft, para. 187.

"[T]hat Turkey 'bring its domestic purchase requirement into conformity with its
obligations under Article III:4 of the GATT 1994, if and to the extent that, that
measure has not already ceased to exist.'"
5.22 The United States argued that such a recommenda tion would be required by Article 19.1 of
the DSU, which states that:
"Where a panel or the Appellate Body concl udes that a measure is inconsistent with a
covered agreement, it shall recommend that the Member concerned [footnote
omitted] bring the measure into conformity with that agreement."
5.23 As the United States pointed out, such a qualified recommendation would also be similar to
the recommendation made by the Panel in EC – Approval and Marketing of Biotech Products.
5.24 The United States added that "the question of the future behavior of a responding Member
whose measure is found to be inconsistent is not a ma tter for an original panel to consider, but is an
issue that could arise, if at all, in the compliance phase based on the actions of a responding party in
response to the DSB’s recommendations and rulings" and that it is not "necessary or appropriate for
panels to reach definitive judgments on alleged changes to measures which take place after panel
establishment". In its view, "[a] qualified recommendation in this dispute with respect to the domestic
purchase requirement would... safeguard and preserve the rights and interests of all parties".
5.25 In its comments on the United States' requests fo r review, Turkey noted that it agrees "with
the Panel's decision of not issuing any recomme ndation on Turkey's expired domestic purchase
requirement." In Turkey's view:
"[T]he Panel's decision is supported by the law and is in line with the practice and
interpretation of previous panels and of the Appellate Body when dealing with
measures that expired in the course of the proceedings."
5.26 Turkey argued that the Panel's decision is consis tent with the language of Article 19.1 of the
DSU which provides that:
"Where a panel or the Appellate Body concludes that a measure is inconsistent with a
covered agreement, it shall recommend that the Member concerned bring the measure
into conformity with that agreement." [Emphasis added, footnotes omitted.]
In Turkey's view, the wording and the use of the present tense in the provision indicate that
recommendations are due when a measure is inconsistent with a covered agreement and not when it
was inconsistent in the past.

5.27 Turkey added that the decisions of previous panels and the Appellate Body support its view
that:
"[T]here is no requirement for this Pane l to issue recommendations to bring into
conformity measures which have expired in the course of the proceedings. [I]t would
be more correct to state that recommendations are not required in those cases."
5.28 Turkey finally noted that the parties have not contended that the me asure has changed, but
rather that it has expired:
"In this context, Turkey does not believe that a qualified recommendation would be
appropriate for this case."

5.29 With regard to this request for review, the Pa nel starts by noting that the domestic purchase
requirement was part of the tariff quota regime fo r the importation of rice which was in force in
Turkey at the time when this Panel was established. As noted in section II of this report (on Factual
Aspects), such tariff quota regime was in force until 31 July 2006.257 In the course of the proceedings,
Turkey requested the Panel to refrain from making findings on the domestic purchase requirement,
since the tariff quota regime was no longer in force, or, if the Panel decided to make those findings,
not to make any recommendation to the DSB. In its report, the Panel has noted that the domestic
purchase requirement was properly brought before the Panel and was within its terms of reference, but
terminated after the Panel was established. 258 The Panel has also noted that tariff quotas for the
importation of rice had expired and then been re opened by Turkey over the last few years.
Furthermore, the legislative framework which has allowed for the establishment of the earlier TRQs
remains in force.259 The Panel has finally noted Turkey's statement that it has no intention to reinstate
tariff quotas for the importation of rice.260 In the light of such considerations, and in the absence of an
agreement by the parties to terminate the pro ceedings with regard to the domestic purchase
requirement, the Panel decided that it would be in appropriate to abstain from making findings with
respect to such measure. Indeed, the Panel has found that the domestic purchase requirement was
inconsistent with Article III:4 of the GATT 1994. It has considered, however, that there is no need to
recommend to the DSB that it make any request to Turkey with respect to the domestic purchase
requirement, in view of the fact that it has expired and that Turkey has declared its intention not to
reintroduce the measure at issue.
5.30 In our view, the Panel's decision can already be considered as a "qualified decision", to the
extent that the Panel decided not to make a recommendation regarding Turkey's domestic purchase
requirement, only after taking into account that the submitted evidence pointed to the expiry of the
measure, and Turkey's declared intention not to reintroduce it.
5.31 We do not see any reason to modify our earlier decision to abstain from making specific
recommendations to the DSB regarding Turkey's dom estic purchase requirement. In our view, such
decision does not jeopardise the rights and interests of the United States, inasmuch as it is already
qualified by the analysis which precedes it.
G. ADDITIONAL REVISIONS AND CORRECTIONS
5.32 The Panel made additional revisions and correcti ons to paragraphs 1.10, 2.102, 7.47, 7.127 of
the interim report. New paragra phs on the consideration of releva nt provisions on differential and
more-favourable treatment for Turkey, as a developi ng country Member, were inserted at the end of
Section VII. Minor editorial corrections were also made in paragraphs 2.19, 2.20, 2.26, 2.28, 2.44,
2.56, 2.60, 2.61, 2.62, 2.75, 2.80, 2.84, 2.95, 2.101, 2.106, 2.110, 2.115, 2.117, 2.119, 3.2(d), 7.47,
7.116, 7.127, 7.232, 7.270, and footnotes 91, 216 and 373.
VI. PRELIMINARY RULING BY THE PANEL ON THIRD PARTY RIGHTS
6.1 Argentina, Australia, China, Egypt, the Eur opean Communities, Korea and Thailand reserved
their rights to participate in the Panel proceedings as third parties, either by announcing their interest
in the course of the DSB meeting on 17 March 2006 when the Panel was established or within the ten

257 See para. 2.77 above.
258 See paras. 7.165 and 7.166 below.
259 See para. 7.170 below.
260 See para. 7.171 below.

subsequent days. On 15 August 2006, more than te n days after the establishment of the Panel, and
after the Panel had been composed, Pakistan notified its interest in participating as a third party.
261
6.2 The Panel raised this third party request by Pa kistan with the parties at the organizational
meeting, held on 16 August 2006. The complainant favoured Pakistan's request, while the respondent
opposed it. Taking into account parties' views on this matter, on 30 August 2006 the Panel informed
the parties and third parties in this case that:
"[It had] decided to accept as third parties all Members that have so far expressed that
interest, including Pakistan... [and f]urther details regarding the Panel's decision on
the matter [would] be included in full in the Panel's Report."262
6.3 We start by noting that paragraphs 1 and 2 of Article 10 of the DSU provide that:
"1. The interests of the parties to a dispute and those of other Members under a
covered agreement at issue in the dispute shall be fully taken into account during the
panel process.
2. Any Member having a substantial inte rest in a matter before a panel and
having notified its interest to the DSB (referred to in this Understanding as a
'third party') shall have an opportunity to be heard by the panel and to make written
submissions to the panel. These submissions shall also be given to the parties to the
dispute and shall be reflected in the panel report."
6.4 Article 10 of the DSU is silent on when Member s need to notify to the DSB their interest in
participating in any specific dispute as third par ties. The Panel is aware, however, of the GATT
Council Chairman's Statement of June 1994, which provided for a ten-day notification period:
"Delegations in a position to do so, should indicate their intention to participate as a
third party in a panel proceeding at the Council session which establishes the panel.
Others who wish to indicate a third party interest should do so within the next ten
days."
263
6.5 As noted by the Panel in EC – Export Subsidies on Sugar (Australia):
"[T]he status of that Chairman's Statem ent [has] been discussed on several occasions
at the DSB and the timing of third-party notifications [has been] the subject of
proposals in the context of the DSU negotiations."
264
6.6 In the same case, the Panel further noted that:
"[T]he Appellate Body's decision in EC – Hormones ... stated that 'the DSU leaves
panels a margin of discretion to deal, al ways in accordance with due process, with

261 Constitution of the Panel Established at the Request of the United States, Turkey – Rice, Note by the
Secretariat, Revision, 1 September 2006, WT/DS334/5/Rev.1, footnote. 1 on page 2.
262 Letter from the Panel to the parties, 30 August 2006, in Annex I.
263 Third Party Participation in Panels, Statement by the Chairman of the Council, C/COM/3 of
27 June 1994, page 1. At the request of Turkey, the st atement was read out at the organizational meeting in this
case.
264 Panel Report on EC – Export Subsidies on Sugar (Australia), para. 2.2.

specific situations that may arise in a particular case and that are not explicitly
regulated.'265"266
6.7 The Panel in EC – Export Subsidies on Sugar (Australia) additionally noted, with regard to
the requests to participate as third parties in that particular dispute, that:
"(a) the selection and composition of the Panel did not appear to have been
adversely affected; and
(b) the Panel process had not been hampered." 267
6.8 The relevant third party requests in EC – Export Subsidies on Sugar (Australia) were
submitted "before the Director-Gener al was asked by the parties to compose the Panel pursuant to
Article 8.7 of the DSU." 268 In the present case, Pakistan's thir d party request was made after this
Panel had been composed. Nevertheless, simila rly to the relevant third party requests in EC – Export
Subsidies on Sugar (Australia) , as a result of Pakistan's request , the Panel process has not been
hampered. In addition, although the Panel had alr eady been composed when Pakistan formulated its
third party request, we see no reason to believe th at accepting Pakistan's request would affect the
"independence of the members" of this Panel, as st ipulated by Article 8.2 of the DSU, nor does it
seem to prejudice in any way the manner in which this Panel fulfil its functions specified in Article 11
of the DSU:
"[T]o 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 objectiv e assessment of the facts of the case and
the applicability of and conformity with th e relevant covered agreements, and make
such other findings as will assist the DS B in making the recommendations or in
giving the rulings provided for in the covered agreements..."
6.9 In the light of the above, as communicated on 30 August 2006 to the parties and third parties
in these proceedings, we decided to accept as third parties all Members that had expressed a third-
party interest and saw no reason to treat them differently. Similar to the Panel in EC – Export
Subsidies on Sugar (Australia)269, we emphasize that this decision is specific to this dispute and is not
intended to offer a legal interpretation of the te n-day notification period referred to in the GATT
Council Chairman's Statement of June 1994.
VII. FINDINGS
A. BURDEN OF PROOF
7.1 Under Article 11 of the DSU, panels have th e duty to "make an objective assessment of the
matter before [them], including an objective assessment of the facts of the case". In order to exercise
such duty, panels have been granted the authorit y "to seek information and technical advice from any
individual or body which [they d eem] appropriate" by Article 13.1 of the DSU. Pursuant to
Article 13.1 of the DSU, Members have committed to collaborate with panels in the exercise of their
duties: "[a] Member should respond promptly and fully to any request by a panel for such
information as the panel considers necessary and appropriate."

265 (footnote original) Appellate Body Report on EC – Hormones, footnote 138.
266 Panel Report on EC – Export Subsidies on Sugar (Australia), para. 2.3.
267 Ibid.
268 Ibid., para. 2.1.
269 Ibid., para. 2.4.

7.2 As articulated by the Appellate Body, the genera l rule in dispute settlement procedures is that
the burden of proof rests upon the party, whethe r complaining or defending, who asserts the
affirmative of a particular claim or defence.
270 Following this principle, the Appellate Body has
explained that the complaining party in any given case should establish a prima facie case of
inconsistency of a measure with a provision of the WTO covered agreements, before the burden of
showing consistency with that provision or defending it under an exception is to be undertaken by the
defending party.271 According to the Appellate Body, a prima facie case is "one which, in the absence
of effective refutation by the defending party, requires a panel, as a matter of law, to rule in favour of
the complaining party presenting the prima facie case."272 To establish a prima facie case, the party
asserting a particular claim must adduce evidence su fficient to raise a presumption that what is
claimed is true.
7.3 Regarding the issue of the burden of proof, we recall the words of the Appellate Body:
"[W]e find it difficult... to see how any system of judicial settlement could work if it
incorporated the proposition that the mere assertion of a claim might amount to proof.
It is, thus, hardly surprising that vari ous international tribunals, including the
International Court of Justice, have gene rally and consistently accepted and applied
the rule that the party who asserts a fact, whether the claimant or the respondent, is
responsible for providing proof thereof. 273 Also, it is a generally-accepted canon of
evidence in civil law, common law and, in f act, most jurisdictions, that the burden of
proof rests upon the party, whether complaining or defending, who asserts the
affirmative of a particular claim or defen ce. If that party ad duces 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.
274"275
7.4 And, in the same case:
"[A] party claiming a violation of a provision of the WTO Agreement by another
Member must assert and prove its claim."276

270 Appellate Body Report on US – Wool Shirts and Blouses, p. 14, DSR 1997:I, p. 323 at p. 335. Panel
271 Appellate Body Report on EC – Hormones, para. 104.
272 Ibid.
273 (footnote original) M. Kazazi, Burden of Proof and Rela ted Issues: A Study on Evidence Before
International Tribunals (Kluwer Law International, 1996), p. 117.
274 (footnote original) See M.N. Howard, P. Crane and D.A. Hochberg, Phipson on Evidence, 14th ed.
(Sweet & Maxwell, 1990), p. 52: "The burden of proof rests upon the party, whether plaintiff or defendant, who
substantially asserts the affirmative of the issue." See also L. Rutherford and S. Bone (eds.), Osborne's Concise
Law Dictionary, 8th ed. (Sweet & Maxwell, 1993), p. 266; Earl Jowitt and C. Walsh, Jowitt's Dictionary of
English Law, 2nd ed. by J. Burke (Sweet & Maxwell, 1977), Vol. 1, p. 263; L.B. Curzon, A Directory of Law,
2nd ed. (Macdonald and Evans, 1983), p. 47; Art. 9, Nouveau Code de Procédure Civile; J. Carbonnier, Droit
Civil, Introduction, 20th ed. (Presses Universitaires de France, 1991), p. 320; J. Chevalier and L. Bach, Droit
Civil, 12th ed. (Sirey, 1995), Vol. 1, p. 101; R. Guillien and J. Vincent, Termes juridiques, 10th ed. (Dalloz,
1995), p. 384; O. Samyn, P. Simonetta and C. Sogno, Dictionnaire des Termes Juridiques (Editions de Vecchi,
1986), p. 250; J. González Pérez, Manual de Derecho Procesal Administrativo , 2nd ed. (Editorial Civitas,
1992), p. 311; C.M. Bianca, S. Patti and G. Patti, Lessico di Diritto Civile (Giuffré Editore, 1991), p. 550; F.
Galgano, Diritto Privato , 8th ed. (Casa Editrice Dott. Antonio Milani, 1994), p. 873; and A. Trabucchi,
Istituzioni di Diritto Civile (Casa Editrice Dott. Antonio Milani, 1991), p. 210.
275 Appellate Body Report on US – Wool Shirts and Blouses, p. 14.
276 Ibid., p. 16.

7.5 In another case, the Appellate Body stated further:
"[W]e have consistently held that, as a ge neral matter, the burden of proof rests upon
the complaining Member. That Member must make out a prima facie case by
presenting sufficient evidence to raise a presu mption in favour of its claim. If the
complaining Member succeeds, the respondi ng Member may then seek to rebut this
presumption. Therefore, under the usual allocation of the burden of proof, a
responding Member's measure will be treated as WTO- consistent, until sufficient
evidence is presented to prove the contrary. We will not readily find that the usual
rules on burden of proof do not apply, as they reflect a 'canon of evidence' accepted
and applied in international proceedings."
277
7.6 That said, as noted by the Appellate Body, these statements:
"[D]o not imply that the complaining party is responsible for providing proof of all
facts raised in relation to the issue of de termining whether a measure is consistent
with a given provision of a covered agre ement. In other words, although the
complaining party bears the burden of proving its case, the responding party must
prove the case it seeks to make in response."278
7.7 Regarding the responding party's role in the proceedings, the Panel on Argentina – Textiles
and Apparel stated that:
"Another incidental rule to the burden of pr oof is the requirement for collaboration of
the parties in the presentation of the facts and evidence to the panel and especially the
role of the respondent in that process. It is often said that the idea of peaceful
settlement of disputes before international tribunals is largely based on the premise of
co-operation of the litigating parties. In th is context the most important result of the
rule of collaboration appears to be that the adversary is obligated to provide the
tribunal with relevant documents which ar e in its sole possession. This obligation
does not arise until the claimant has done its best to secure evidence and has actually
produced some prima facie evidence in support of its case."279
7.8 With regard to evidence, the Appellate Body has stated that:
"[P]recisely how much and precisely what kind of evidence will be required to
establish such... [presumptions] will necessarily vary from measure to measure,
provision to provision, and case to case."
280
7.9 In the present case, the initial burden of proof rests upon the United States, as a complainant,
to establish its prima facie case that the challenged measures at issue are inconsistent with certain
provisions of the WTO covered agreements. Were the United States to establish such a case, the
burden would then shift to Turkey to rebut that claim.
7.10 As noted above, Members are under the obligati on to respond promptly and fully to requests
made by panels for information. In Canada – Aircraft, the Appellate Body referred to "the duty of a
Member to comply with the request of a panel to provide information", noting that under
Article 13.1 of the DSU "Members are [...] under a duty and an obligation to 'respond promptly and

277 Appellate Body Report on Canada – Dairy (Article 21.5 – New Zealand and US II), para. 66.
278 Appellate Body Report on Japan – Apples, para. 154.
279 Panel Report on Argentina – Textiles and Apparel, para. 6.40.
280 Appellate Body Report on US – Wool Shirts and Blouses, p. 14.

fully' to requests made by panels for information".
281 In the absence of such collaboration, and
pursuant to its duty to make an objective assessment of the facts of the case, a panel is entitled to draw
appropriate inferences. In this context, the Appellate Body has stated that:
"Where a party refuses to provide information requested by a panel under Article 13.1
of the DSU, that refusal will be one of th e relevant facts of record, and indeed an
important fact, to be taken into account in determining the appropriate inference to be
drawn."282
7.11 Such inferences would then have to be consid ered by the panel, with all other available
evidence on the record, to determin e whether the complainant has succeed ed in meeting its burden to
make its prima facie case and whether the respondent has successfully rebutted such a case.
B. THE DENIAL OR FAILURE TO GRANT LICENCES TO IMPORT RICE AT OR BELOW THE BOUND
RATE OF DUTY
1. The United States' claims
7.12 In its request for the establishment of a panel, th e United States stated that "Turkey denies or
fails to grant licenses to import rice at or below the bound rate of duty without domestic purchase,
including at the over-quota rate of duty." 283 This measure was referred to by the United States as the
"denial or failure to grant licenses to import rice at or below the bound rate of duty".
7.13 The United States has argued that, according to relevant Turkish legislation:
"[T]he importation of certain agricultural pr oducts is subject to [the] approval [of the
Turkish Ministry of Agriculture and Rura l Affairs (MARA)]... MARA determines
the 'fitness and compatibility' of certain pr oducts with respect to human health and
safety and other concerns. Rice is listed in [the legislation], which means that rice
importers must present a [so-called] Certificate of Control from MARA to Turkish
Customs as a condition upon importation."
284
7.14 The United States has stated that the Certificat e of Control issued by MARA "is an import
license within the definition in Article I of the Import Licensing Agreement."285
7.15 According to the United States, since Se ptember 2003, MARA has not been issuing
Certificates of Control at the bound tariff rates, thereby effectively preventing out-of-quota imports.286
7.16 The United States has made the claim that Turkey 's denial, or failure to grant, licences to
import rice at or below the bound rate of duty, thr ough MARA's denial of Certificates of Control to
importers of rice, is inconsistent with Article XI:1 of the GATT 1994; with Article 4.2 of the

281 Appellate Body Report on Canada – Aircraft, para. 187.
282 Appellate Body Report on US – Wheat Gluten , para. 174. See also Appellate Body Report on
Canada – Aircraft, paras. 202-203 and 205.
283 Request for the Establishment of a Panel by the United States, Turkey – Rice , 7 February 2006,
WT/DS334/4, p. 1.
284 United States' first submission, para. 19. See also United States' rebuttal, para. 1.
285 United States' opening statement at the first substantive meeting, pa ra. 10. See also United States'
rebuttal, para. 7.
286 United States' first submission, para. 22. See al so United States' rebuttal, para. 1, United States'
opening statement at the second substantive meeting, para. 6, United States' response to question 3 from Turkey,
para. 69, and United States' comments on Turkey's response to questions 102 and 114, paras. 3 and 17.

Agreement on Agriculture; with Articles 1.4(a) an d (b) and 3.5(e) and (f) of the Import Licensing
Agreement; and with Articles X:1 and X:2 of the GATT 1994.287
2. Turkey's response
7.17 Turkey has confirmed that, in order to import rice, importers must obtain a Certificate of
Control from MARA:
"In order to facilitate the process of customs clearance, traders must submit at
importation a document, known as Certificate of Control, which contains all the
information required for customs purposes. This document must be approved by the
Ministry of Agriculture and Rural Affairs."
288
7.18 Turkey has argued, however, that the Certificat es of Control are "administrative forms that
are required exclusively for ' customs purposes'"289 and "[are] not, nor should... be interpreted as, an
import license or an instrument of allocation of imports to origins or traders" 290 within the meaning of
Article 1.1 of the Import Licensing Agreement, 291 nor under Article XI:1 of the GATT 1994. 292
Turkey has stated that there is neither a de jure nor a de facto "prohibition" or "restriction" in relation
to the United States' allegation that Turkey denies or fails to grant licences to import rice at or below
the bound rate of duty, 293 nor a practice that would constitute "discretionary import licensing" or a
"quantitative import restriction" within the meaning of Article 4.2 of the Agreement on Agriculture.294
7.19 Turkey has also stated that:
"Contrary to what is erroneously claimed by the United States, Certificates of Control
have been systematically and regularly approved on a non-discriminatory basis since
the entering into force of ' The Regime for Technical Regulations and Standardization
for Foreign Trade' in 1996... This has been the ca se both for rice imports occurring
at the 'over-quota' MFN or applied rate le vel and... within the 'in-quota' volumes
established each year since 2004."295
7.20 In Turkey's opinion:
"Individual instances of administrative delay, rejection, or even domestic litigation in
relation to the approval (or non approval) of a particular application for a specific

287 Request for the Establishment of a Panel by the United States, Turkey – Rice , 7 February 2006,
WT/DS334/4, pp. 2-3.
289 Turkey's rebuttal, para. 3. See also Turkey's cl osing statement at the second substantive meeting,
para. 12.
290 Turkey's first submission, para. 18. See also Ibid., para. 3; Turkey's statement at the first substantive
meeting, paras. 4 and 47; and Turkey's opening statement at the second substantive meeting, para. 4.
291 Turkey's first submission, paras. 47-57 and 87. S ee also Turkey's statement at the first substantive
meeting, para. 11, and Turkey's response to question 59.
293 Ibid., paras. 63, 66 and 69. See also Turkey's st atement at the first substantive meeting, paras. 12-
294 Turkey's first submission, para. 71. See also Tu rkey's statement at the first substantive meeting,
para. 37.
295 Turkey's first submission, para. 26. See also Turkey's response to questions 15 (b) and 45; Turkey's
rebuttal, para. 19; and Turkey's opening statement at the second substantive meeting, para. 8.

Certificate of Control, cannot be used to claim or imply that Turkey adopted and/or
applied this instrument as an intentional barrier to trade."
296
7.21 Turkey has also indicated that the lack of pub lication of "certain internal unofficial working
documents and the information contained therein" woul d not amount to a violation of Article X of the
GATT 1994.297
3. The challenged measure
(a) The so-called "blanket prohibition"
7.22 At various moments during the proceedings, the United States stated that Turkey has
maintained a "blanket prohibition on the issuance of Control Certificates." 298 At times, the
United States argued that the "blanket pr ohibition [covered] all imports of rice", 299 that it applied to
the issuance "of Control Certificates outside the TRQ"300, or that it applied "to those importers who do
not purchase domestic paddy rice".301 In terms of the argument that Turkey has maintained a "blanket"
prohibition on the issuance of Certificates of Cont rol for the importation of rice, the United States
stated in its first submission that "Turkey fails to grant Certificates of Control 100 per cent of the
time"302 and that "Turkey never grants Certificates of Control".303
7.23 Turkey has argued in response that:
"[T]here is no clarity [regarding the 'measure contested' by the United States]: is it
the alleged 'blanket denial', is it the 'Lette rs of Acceptance', is it the Certificate of
Control as such, or is it something else?"304
7.24 Turkey has added that:
"The United States has merely claimed the existence of an alleged 'blanket denial', but
Turkey believes to have satisfactorily pr oved that no 'blanket denial' was ever in
place."305
7.25 It has also stated that:
"Individual instances of denial of approval in relation to specific applications made
by individual importers cannot be used to imply a 'blanket denial' ..."306

296 Turkey's statement at the first substantive meeting, para. 9. See also Turkey's first submission,
297 Turkey's first submission, para. 77. See also Turkey's response to question 61.
298 United States' response to question 56, para. 87. See also United States' first submission, para. 79,
and United States' response to question 61, para. 98.
299 United States' response to question 26(b), para. 57.
300 United States' rebuttal, para. 22. See also United States' response to question 60, para. 94.
303 Ibid. (emphasis in the original).
304 Turkey's rebuttal, para. 33.
305 Turkey's opening statement at the second substantive meeting, para. 9. See also Ibid., paras. 10, 11
and 14.
306 Turkey's response to question 60.

(b) The measure at issue
7.26 We agree with Turkey that the Panel shoul d begin by identifying the precise measure
challenged by the United States, i.e., the measure th at should be the object of the Panel's analysis.
Indeed, the jurisdiction of a panel with regard to the issues in a particular dispute is limited to the terms
of reference that have been approved by the DSB. In turn, those terms of reference are, in accordance
with Article 7.1 of the DSU, defined by the "matter" that has been referred to the DSB. 307 As stated
by the Appellate Body:
"'[T]he matter referred to the DSB' for the purposes of Article 7 of the DSU... must be
the 'matter' identified in the request for the establishment of a panel under Article 6.2
of the DSU. That provision requires the complaining Member, in a panel request, to
'identify the specific measures at issue and provide a brief summary of the legal basis
of the complaint sufficient to present the problem clearly'... The ' matter referred to
the DSB', therefore, consists of two elements: the specific measures at issue and the
legal basis of the complaint (or the claims)."308
7.27 In other words, the Panel need s to determine at the outset and with precision which are the
measures that constitute its terms of reference. In determining what measures are before the Panel,
we turn to the United States' request for establis hment of a panel, which is found in document
WT/DS334/4 of 7 February 2006.
7.28 As noted above, in its request for the establishment of a panel 309, the United States referred to
the measure under consideration as the "denial or fa ilure to grant licenses to import rice at or below
the bound rate of duty". 310 In that regard, the United States asserted that "Turkey denies or fails to
grant licenses to import rice at or below the bound rate of duty without domestic purchase, including
at the over-quota rate of duty."311
7.29 Regarding what can constitute a measure for WTO dispute settlement proceedings, we recall
the words of the Appellate Body:
"In principle, any act or omission attributable to a WTO Member can be a measure of
that Member for purposes of dispute settlement proceedings."312
7.30 Looking at the description of the measure cont ained in the United States' request for the
establishment of a panel, we conclude that the measure before us is Turkey's alleged denial, or failure
to grant, licences to import rice outside of the tariff rate quota, and not a so-called "blanket
prohibition".
(c) Conclusion
7.31 For the reasons stated above, and noting the term s of reference contained in the request for
establishment of this panel, we conclude that the measure before us is Turkey's alleged denial, or
failure to grant, from September 2003 and for periods of time, licences to import rice outside of the
tariff rate quota.

307 Appellate Body Report on US – Carbon Steel, para. 125.
308 Appellate Body Report on Guatemala – Cement I, para. 72 (emphasis in the original).
309 See para. 7.12 above.
310 Request for the Establishment of a Panel by the United States, Turkey – Rice , 7 February 2006,
WT/DS334/4, p. 1.
311 Ibid.
312 Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review, para. 81.

4. Order of analysis
7.32 Regarding the proper order of analysis to be undertaken by the Panel in considering the
different claims advanced by the United States in rega rd to the alleged denial of, or failure to grant,
import licences to import rice outside of the tariff ra te quota, the Panel will consider whether it should
start its analysis under Article XI:1 of the GATT 1994; Article 4.2 of the Agreement on Agriculture;
Articles 1.4(a), 1.4(b), 3.5(e) and 3.5(f) of the Import Licensing Agreement; or Articles X:1 and X:2
of the GATT 1994.
7.33 Article XI:1 of the GATT 1994 provides:
"No prohibitions or restrictions other than duties, taxes or other charges, whether
made effective through quotas, import or export licences or other measures, shall be
instituted or maintained by any contracting party on the importation of any product of
the territory of any other contracting party or on the exportation or sale for export of
any product destined for the territory of any other contracting party."
7.34 In turn, Article 4.2 of the Agreement on Agriculture states that:
"Members shall not maintain, resort to, or revert to any measures of the kind which
have been required to be converted into ordinary customs duties
1, except as otherwise
provided for in Article 5 and Annex 5.
WTO Agreement."
7.35 Articles 1.4(a) and (b) of the Import Licensing Agreement stipulate that:
"(a) The rules and all information con cerning procedures for the submission of
applications, including the eligibility of persons, firms and institutions to
make such applications, the administra tive body(ies) to be approached, and
the lists of products subject to the licensing requirement shall be published, in
the sources notified to the Committee on Import Licensing provided for in
Article 4 (referred to in this Agreem ent as "the Committee"), in such a
manner as to enable governments
313 and traders to become acquainted with
them. Such publication shall take place, whenever practicable, 21 days prior
to the effective date of the requirement but in all events not later than such
effective date. Any exception, derogati ons or changes in or from the rules
concerning licensing procedures or the list of products subject to import
licensing shall also be published in th e same manner and within the same
time periods as specified above. Copies of these publications shall also be
made available to the Secretariat.

313 (footnote original) For the purpose of this Agreement, the term "governments" is deemed to include
the competent authorities of the European Communities.

(b) Members which wish to make comme nts in writing shall be provided the
opportunity to discuss these comments upon request. The concerned Member
shall give due consideration to these comments and results of discussion."
7.36 In turn, Articles 3.5(e) and 3.5(f) of the Import Licensing Agreement provide that:
"(e) any person, firm or institution wh ich fulfils the legal and administrative
requirements of the importing Member sha ll be equally eligible to apply and
to be considered for a licence. If the licence application is not approved, the
applicant shall, on request, be given the reason therefor and shall have a right
of appeal or review in accordance with the domestic legislation or procedures
of the importing Member;
(f) the period for processing applications shall, except when not possible for
reasons outside the control of the Member, not be longer than 30 days if
applications are considered as and when received, i.e. on a first-come
first-served basis, and no longer than 60 days if all applications are
considered simultaneously. In the latter case, the period for processing
applications shall be considered to begin on the day following the closing
date of the announced application period".
7.37 Finally, Articles X:1 and X:2 of the GATT 1994 set out that:
"1. Laws, regulations, judicial decisions and administrative rulings of general
application, made effective by any contracting party, pertaining to the classification
or the valuation of products for customs purposes, or to rates of duty, taxes or other
charges, or to requirements, restrictions or prohibitions on imports or exports or on
the transfer of payments therefor, or affecting their sale, distribution, transportation,
insurance, warehousing inspection, exhibiti on, processing, mixing or other use, shall
be published promptly in such a manner as to enable governments and traders to
become acquainted with them. Agreements affecting international trade policy which
are in force between the government or a governmental agency of any contracting
party and the government or governmental agency of any other contracting party shall
also be published. The provisions of this paragraph shall not require any contracting
party to disclose confidential information which would impede law enforcement or
otherwise be contrary to the public inte rest or would prejudice the legitimate
commercial interests of particular enterprises, public or private.
2. No measure of general application take n by any contracting party effecting an
advance in a rate of duty or other charge on imports under an established and uniform
practice, or imposing a new or more burdensome requirement, restriction or
prohibition on imports, or on the transfer of payments therefor, shall be enforced
before such measure has been officially published."
7.38 In contrast to Article XI:1 of the GA TT 1994 and Article 4.2 of the Agreement on
Agriculture, the provisions of the Import Licensing Agreement invoked by the United States and
Articles X:1 and X:2 of the GATT 1994 deal with the administration or application of trade measures
rather than with the substan tive content of such measures per se. In this regard, the Appellate Body
found in EC – Poultry that "Article X relates to the publication and administration of 'laws,
regulations, judicial decisions and administrative ruli ngs of general application', rather than to the

substantive content of such measures."
314 Likewise, in EC – Bananas III the Appellate Body found
that:
"As a matter of fact, none of the provisions of the Licensing Agreement concerns
import licensing rules, per se . As is made clear by the title of the Licensing
Agreement, it concerns import licensing procedures. The preamble of the Licensing
Agreement indicates clearly that this agreement relates to import licensing procedures
and their administration, not to import licensing rules. Article 1.1 of the Licensing
Agreement defines its scope as the administrative procedures used for the operation
of import licensing regimes."315
7.39 The Panel notes, in this context, that the European Communities stated that:
"It is arguable that the Agreement on Import Licensing relates more specifically to the
matter before this Panel than the GATT and the Agreement on Agriculture. Therefore
in accordance with the Appellate Body report in EC – Bananas 316 the EC invites the
Panel to consider whether the alleged violations of the Agreement on Import
Licensing should be considered first before the alleged violations of Article 4.2. of the
Agreement on Agriculture and the GATT."317
7.40 The Panel notes, however, that the United States has consistently structured its claims
concerning Turkey's alleged denial, or failure to gr ant, licences to import rice outside of the tariff rate
quota by invoking first the provisions that deal with the substantive content of that measure.
7.41 If the Panel finds that the measure at issue is in breach of substantive obligations under either
Article XI:1 of the GATT 1994 or Article 4.2 of the Agreement on Agriculture, then the question of
how the measure has been administered by Turkey b ecomes irrelevant. On the contrary, if the Panel
finds that the measure in question is not in breach of substantive obligations under either Article XI:1
of the GATT 1994 or Article 4.2 of the Agreement on Agriculture, it would need to additionally
consider whether Turkey, by its alleged denial, or failure to grant, licences to import rice outside of
the tariff rate quota, has breached the provisions of the Import Licensing Agreement invoked by the
United States in this context, or Articles X:1 and X:2 of the GATT 1994.
7.42 Accordingly, the Panel will begin its analysis w ith the substantive content of that measure in
regard to Article XI:1 of the GATT 1994 or Article 4.2 of the Agreement on Agriculture.
7.43 In order to carry out its analysis of the subs tantive content of the measure in question, the
Panel turns to the issue of whether it should start its analysis with Article XI:1 of the GATT 1994 or
Article 4.2 of the Agreement on Agriculture.
7.44 The Panel notes that, in this respect, the United States has argued that:
"Other panels have found, in similar circumstances, that where a measure with
respect to agricultural products
318 is inconsistent with Article XI:1 of the GATT 1994,

314 Appellate Body Report on EC – Poultry , para. 115. See also Appellate Body Report on EC –
Bananas III, para. 200.
315 Appellate Body Report on EC – Bananas III, para. 197. See also Panel Report on Korea – Various
Measures on Beef, paras. 784-785.
316 (footnote original) Appellate Body Report, EC – Bananas, paras. 202-204.
317 European Communities' third party submission, para. 18.
318 (footnote original) As noted above, under the Harmonized System, rice is classified under tariff item
1006. Annex 1, paragraph 1, of the Agriculture Agre ement states that "[t]his Agreement shall cover the
following products": "(i) HS Chapters 1 to 24 less fish and fish products."

it is necessarily inconsistent with Article 4.2 of the Agriculture Agreement, which
provides in footnote 1 that, inter alia , 'quantitative import restrictions' and
'discretionary import licensing' are measur es that Members may not maintain, resort
to, or revert to.319"320
7.45 Similarly, Egypt has noted that:
"[P]anels have found that restrictions on agricultural products that were found to be
inconsistent with Article XI:1 of the GA TT 1994 constituted violati ons of Article 4.2
[of the Agreement on Agriculture]."321
7.46 In contrast to those arguments by the United States and Egypt, while "agree[ing] with the US
that there is a general systemic link between the two provisions" 322, the European Communities has
stated that:
"[A]part from the footnote in Article 4.2 of the Agreement on Agriculture in which
reference is made to quantitative import restrictions, no automatic link has been made
in the text of these provisions. The EC th erefore considers that caution should be
exercised in concluding that the violation of Article XI:1 of the GATT would
necessarily and in all circumstances lead to the violation of Article 4.2. of the
Agreement on Agriculture."323
7.47 Further, the European Communities has pointed out that:
"It is arguable that the Agreement on Agriculture should be considered more specific
in relation to the GATT in a situation where the import of a particular agricultural
product is at stake. Consequently, in a ccordance with the Appellate Body report in
EC – Bananas 324 it is arguable that the alleged violation of Article 4.2 of the
Agreement on Agriculture should be considered first befo re the alleged violations of
the GATT."325
7.48 Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture have similar
scopes of application as they bot h apply to border measures. Ar ticle XI:1 of the GATT 1994,
however, is generally applicable to import prohibiti ons or restrictions imposed on any product, while
Article 4.2 of the Agreement on Agriculture is li mited to measures imposed on products that fall
within the scope of the Agreement of Agriculture . In other words, the Agreement on Agriculture
deals more specifically than the GATT 1994 w ith the prohibition on maintaining quantitative
restrictions or quotas, inasmuch as the Agreement on Agriculture refers to these measures only when
applied to products falling within the scope of th e Agreement of Agricultu re, such as rice. In EC –
Bananas III, the Appellate Body indicated that a panel should start by examining the claims presented
under the agreement that "deals, specifically, and in detail" with the matter at issue. 326 Following this

319 (footnote original) See India QRs, paras. 5.238-5.242, and Korea Beef, para. 768 ("Since the panel
has already reached the conclusion that the above measures are inconsistent with Artic le XI and the Ad Note to
Articles XI, XII, XIII, XIV and XVIII relating to state-trading enterprises, the same measures are necessarily
inconsistent with Article 4.2 of the Agreement on Agriculture and its footnote referring to non-tariff measures
maintained through state-trading enterprises").
320 United States' first written submission, para. 75.
321 Egypt's third party submission, para. 22.
322 European Communities' third party submission, para. 20.
323 Ibid., para. 20.
324 (footnote original) Appellate Body Report, EC – Bananas, paras 202-204.
325 Third Party written submission by the European Communities, para. 21.
326 Appellate Body Report on EC – Bananas III, para. 204. See para 7.38 above.

approach, the Panel will commence by examining the claims presented by the United States under
Article 4.2 of the Agreement on Agriculture, since this Agreement may be considered more specific to
the border measures imposed on agricultural products. The Panel will turn to Article XI:1 of the
GATT 1994 only as a second step.
7.49 As regards the claims of the United States c oncerning the administration of the measure in
question, the Panel has already noted that it will onl y consider whether Turkey, by its alleged denial,
or failure to grant, licences to import rice outside of the tariff rate quota, has breached the provisions
of the Import Licensing Agreement invoked by the Un ited States in this context, or Articles X:1
and X:2 of the GATT 1994, if the Panel were to find that the measure at issue is not in breach of
substantive obligations under either Article 4.2 of the Agreement on Agriculture or Article XI:1 of the
GATT 1994.
327
7.50 In order to analyze, if required, the clai ms made by the United States concerning the
administration of the measure at issue, the Panel mu st determine whether to begin such analysis with
Articles X:1 and X:2 of the GATT 1994 or with th e provisions of the Import Licensing Agreement
invoked by the United States in regard to the measure in question. In order to do so, if needed, the
Panel would start by assessing whether the challenged measure falls within the coverage of the Import
Licensing Agreement. If the Panel were to find that this is the case, based on the finding of the
Appellate Body in EC – Bananas III referenced above328, it would start with assessing the claims of
the United States under the Import Licensing Agreement first, since that agreement deals specifically,
and in detail, with the administration of import licensing procedures. In this respect, depending on
any findings made under the Import Licensing Agreemen t, there may be no need for the Panel to
make any additional findings under Articles X:1 and X:2 of the GATT 1994.
5. Claim under Article 4.2 of the Agreement on Agriculture
(a) Arguments of the parties
7.51 The United States has articulated the claim that Turkey's denial, or failure to grant, licences to
import rice outside of the tariff rate quota, is a me asure of the kind which have been required to be
converted into ordinary customs duties, such as a "q uantitative import restriction" or a "discretionary
import licensing" practice, and is therefore incons istent with Article 4.2 of the Agreement on
Agriculture.
329
7.52 In its rebuttal submission, the United States added that:
"[F]or the United States to demonstrate succes sfully that Turkey is in breach of
Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture, the
United States is not required to show that no Control Certificates were granted at the
MFN rate. The United States has demonstrated that Turkey is restricting at least
some trade in rice, and that is sufficient to demonstrate a breach of Article XI:1...
Even if Turkey's data had demonstrated that the Letters of Acceptance were not
enforced at all, that would not change the conclusion that the Letters breach
Article XI:1... [E]ven were the Panel to c onclude that the Letters were not enforced
at all, the Panel should still find, in line with findings of past panels with respect to
non-enforced mandatory measures, that Turkey's restrictions on MFN trade in rice are
inconsistent with Article XI:1 ... Lastly, Tu rkey's failure to issue Control Certificates

327 See paras. 7.41 and 7.42 above.
328 See Appellate Body Report, EC – Bananas III, para. 204. See para. 7.38 above.
329 United States' first submission, paras. 76-78. See also United States' opening statement at the first
substantive meeting, para. 26.

for the import of rice at the over-quota rates of duty breaches both Article XI:1 of the
GATT 1994 and Article 4.2 of the Agreem ent on Agriculture because it constitutes
discretionary import licensing ... . [I]t is certainly clear that Turkey believes it has the
discretion not to grant Control Certificates if it wants to, and the United States has
provided documentary evidence highlighting instances where Turkey has denied or
failed to grant such Certificates."330
7.53 Turkey stated that:
"[As] the Certificates of Control are not import licenses within the meaning of the
Agreement on Import Licensing Procedures ... there is clearly no 'denial' of
Certificates of Control, and ... there is no de jure or de facto import prohibition or
restriction within the meaning of GATT Article XI:1 ... [, therefore] there cannot be
'discretionary import licensing ' and/or ' quantitative import restrictions ' within the
meaning of Article 4.2 of the Agreement on Agriculture and footnote 1 thereof."
331
(b) Article 4.2 of the Agreement on Agriculture
7.54 Article 4.2 of the Agreement on Agriculture states that:
"Members shall not maintain, resort to, or revert to any measures of the kind which
have been required to be converted into ordinary customs duties1, except as otherwise
provided for in Article 5 and Annex 5.
WTO Agreement."
(c) The Panel's analysis
(i) Importance of Article 4.2 of the Agreement on Agriculture
7.55 The Appellate Body has highlighted the impor tance of Article 4 of the Agreement on
Agriculture. The Appellate Body has called Ar ticle 4 "the main provision of Part III of
the Agreement on Agriculture", and has defined it as "the legal vehicle for requiring the conversion
into ordinary customs duties of certain market access barriers affecting imports of agricultural
products".
332 In the words of the Appellate Body:

330 United States' rebuttal, paras. 58, 60, 62, 63 and 64. See also United States' opening statement at the
second substantive meeting, paras. 12-14.
331 Turkey's first submission, para. 71 (emphasis in th e original). See also Tu rkey's statement at the
first substantive meeting, para. 37, and Turkey's response to question 19.
332 Appellate Body Report on Chile – Price Band System, para. 201.

"[W]e turn now to Article 4, which is the main provision of Part III of the Agreement
on Agriculture. As its title indicates, Article 4 deals with 'Market Access'.
333 During
the course of the Uruguay Round, negotiato rs identified certain border measures
which have in common that they restrict the volume or distort the price of imports of
agricultural products. The negotiators d ecided that these border measures should be
converted into ordinary customs duties, w ith a view to ensuring enhanced market
access for such imports. Thus, they envisioned that ordinary customs duties would,
in principle, become the only form of border protection. As ordinary customs duties
are more transparent and more easily quan tifiable than non-tariff barriers, they are
also more easily compared between trading partners, and thus the maximum amount
of such duties can be more easily reduced in future multilateral trade negotiations.
The Uruguay Round negotiators agreed that market access would be improved—both
in the short term and in the long term—thr ough bindings and reductions of tariffs and
minimum access requirements, which were to be recorded in Members' Schedules.
Thus, Article 4 of the Agreement on Agriculture is appropriately viewed as the legal
vehicle for requiring the conversion into or dinary customs duties of certain market
access barriers affecting imports of agricultural products …"
334
7.56 The objectives of the Agreement on Agriculture ar e described in its preamble: "to establish a
fair and market-oriented agricultural trading syst em", and to initiate a reform process "through the
negotiation of commitments on support and protectio n and through the establishment of strengthened
and more operationally effective GATT rules and disciplines". 335 To achieve this objective, the
preamble states that it is necessary to provide for reductions in protection, "resulting in correcting and
preventing restrictions and distortio ns in world agricultural markets" 336, through achieving "specific
binding commitments"337, inter alia, in the area of market access.338
7.57 As has been noted by the Appellate Body, during the course of the Uruguay Round,
negotiators decided that certain border measures, whic h restricted the volume of trade or distorted the
price of imports of agricultural products, had to be converted into ordinary customs duties, with a
view to ensuring enhanced market access for such im ports. This agreement is reflected in the text of
Article 4 of the Agreement on Agriculture which, as its title indicates, deals with "Market Access".339
(ii) Issues for the Panel's consideration
7.58 The issue to be decided by the Panel under this particular claim is whether Turkey's alleged
conduct, i.e., its alleged denial, or failure to gran t, licences to import rice outside of the tariff rate
quota, is inconsistent with Article 4.2 of the Ag reement on Agriculture. More specifically, whether
this alleged conduct, if proven to have occurred, can be considered to be a border measure "of the
kind which have been required to be converted into ordinary customs duties", such as a "quantitative
import restriction", a "discretionary import licensi ng" practice, or another border measure that is
sufficiently similar to either of the preceding two.

333 (footnote original) Part III contains only one other provision, namely, Article 5, which provides for
a special safeguard mechanism that may be used to der ogate from the requirements of Article 4 when certain
conditions are met. We will discuss Article 5 later in this section.
334 Appellate Body Report on Chile – Price Band System, paras. 200-201.
335 Preamble to the Agreement on Agriculture, recital 2.
336 Ibid., recital 3.
337 Ibid., recital 4.
338 Appellate Body Report on Chile – Price Band System, para. 196.
339 Ibid., para. 200.

7.59 We have already addressed the general rules regarding the burden of proof. 340 Considering
the above, we are of the view that, in this case, the initial burden of proof rests upon the United States,
as a complainant, to establish its prima facie case that the challenged conduc t, first, has existed, and
then, that it is inconsistent with the invoke d provision of the WTO c overed agreements, i.e.,
Article 4.2 of the Agreement on Agriculture. If th e United States meets this test, the burden would
then be on Turkey to rebut the said claim.
7.60 In order to assess whether the United States has met its initial burden, the Panel will
accordingly consider if the evidence on the record, as submitted by both parties, is sufficient to raise a
preliminary presumption that Turkey has engaged in the denial, or failure to grant, licences to import
rice outside of the tariff rate quota. Only if the evidence on the record is sufficient for the Panel to
conclude that the United States has made a prima facie case, would the burden then be shifted onto
Turkey to adequately rebut the United States' alle gations. If the United States were successful in
establishing its prima facie case, and Turkey failed to rebut it, the Panel would then consider whether
the facts so demonstrated can be qualified as constituting a border measure of the kind which has been
required to be converted into ordinary customs duties by the Agreement on Agriculture.
(iii) Has the United States produced evidence of the challenged measure?
7.61 As noted above, the first issue for the Panel to determine is whether there is enough evidence
on the record that Turkey has denied, or failed to grant, licences to import rice outside of the tariff rate
quota.
7.62 In order to prove this allegation, the United States has submitted the following evidence:
(a) photocopies of rejected applications for Cer tificates of Control for the importation of
rice filed by importing companies in Turkey
341;
(b) photocopies of motions presented in Turkish administrative courts against the
Government's rejection of the authorization to import rice342;
(c) photocopies of documents related to proce dures before Turkish administrative courts,
which refer to additional instances of rejec tion of applications for Certificates of
Control for the importation of rice343;
(d) photocopies of documents containing arguments presented by the counsel for MARA
before Turkish administrative courts, justifying the rejection of Certificates of Control
for the importation of rice344;
(e) photocopies of internal documents fr om MARA, in which MARA's General
Directorate of Protection and Control recommended temporary suspensions of the
granting of Certificates of Control for the importation of rice to the Minister of
Agriculture and Rural Affairs, which the Minister apparently approved345;

340 See paras. 7.1 to 7.11 above.
341 Exhibits US-22, US-28, US-29, US-33 and US-34.
342 Exhibit US-30.
343 Exhibits US-63 to US-67.
344 Exhibit US-31.
345 Exhibits US-12, US-13, US-14 and US-36.

(f) photocopy of a letter from the General Directorate of the TMO to MARA's General
Directorate of Protection and Control, recommending the temporary suspension of the
granting of Certificates of Control for the importation of rice
346;
(g) photocopy of a letter from the Minister of State of Turkey to the United States Trade
Representative, informing that Certificates of Control for the importation of rice
would be issued as of 1 April 2006.347
7.63 Turkey has not disputed the veracity of any of these documents. Turkey has admitted, for
instance, that the so-called "letters of acceptance" (i.e, letters in which MARA's General Directorate
of Protection and Control recommended to the Minist er of Agriculture and Rural Affairs temporary
suspensions of the granting of Certificates of Co ntrol for the importation of rice), such as those
provided to the Panel by the United States, "were written and were in circulation".348
7.64 Parties differ, however, as to the facts that these documents would prove. In the United
States' view, the documents are evidence that Turkey has maintained in place a legal prohibition and a
restriction on the importation of rice. 349 The evidence also shows, according to the United States,
"that the granting of Control Certificates is discretionary". 350 The United States has contended that it
has "presented a large amount of documentary evid ence demonstrating that Turkey does not issue
Certificates of Control, which are necessary to import rice outside the TRQ."351
7.65 Turkey has stated that these copies of "letters of acceptance":
"[M]ust be either considered as inadmissi ble evidence or considered as only partial
and unreliable evidence of the real intenti on and trade policies of Turkey in relation
to rice importation."352
7.66 While Turkey has admitted that "domestic courts appear to have given effect" to the "letters
of acceptance", it argues that these documents are only "policy recommendations, falling outside the
very competence of the Minister".353 In its view, the "letters of acceptance":
"[W]ere internal communications aimed at developing policies. These administrative
communications never resulted in the adopti on of laws or regulations. They were
never used to systematically deny the a pproval of applications for Certificates of
Control. And even if, hypothetically, they had been used to limit the approval of
Certificates of Control, which Turkey veheme ntly denies, this is not evidence that
there was a measure prohibiting or restricting imports … . The record shows that,
despite the 'Letters of Acceptance', Certificates of Control were approved."
354
7.67 As already noted, Turkey has not disputed th e veracity of the documents submitted by the
United States regarding rejected applications for Certificates of Control for the importation of rice and
related briefs presented before Turkish administrative courts. In Turkey's opinion, however:

346 Exhibit US-37.
347 Exhibit US-35.
348 Turkey's statement at the first substantive meeting, para. 50.
349 United States' opening statement at the second substantive meeting, para. 12. See also United States'
response to question 56, para. 87.
350 United States' opening statement at the second substantive meeting, para. 13.
353 Turkey's response to question 145.
354 Turkey's statement at the first substantive meeti ng, paras. 50 and 51. See also Turkey's first
submission, paras. 78 and 84, and Turkey's response to question 145.

"[I]ndividual instances of non-approval by MARA of particular rice importers'
applications must be seen as a natural component of the interaction between any
WTO Member's administration and its business community and cannot be
generalized into a ' denial of Certificates of Control to import rice ', particularly when
the trade statistics clearly indicate otherwise."
355
7.68 Turkey has referred to the rejections for Cer tificates of Control for the importation of rice
identified by the United States as "individual rejections , perfectly compatible with Turkish legislation
and with Turkey's obligations under the WTO". 356 With respect to these rejections, Turkey has added
that:
"The reasons for rejection of individual importers' applications have always been
provided and, in general terms, were most often due to missing or wrong information
supplied by the importers such as the introduction of the wrong customs code
classification, the lack of indication of the chosen customs points of entry, or the
wrong origin information."
357
7.69 The processes before Turkish administrative cour ts, identified by the United States, regarding
the denial of Certificates of Control for the importa tion of rice, have likewise been characterized by
Turkey as:
"[I]ndividual instances of domestic litigation [which] must be objectively seen as a
natural component of the interaction between any WTO Member's administration and
its business community and cannot be used to prove an instance of systematic trade
restriction, let alone a trade prohibition (i.e., the 'blanket denial')."
358
7.70 As noted, Turkey has admitted that "domestic courts appear to have given effect" to "letters of
acceptance". In Turkey's view, however, by doing so "the domestic courts appear to have given effect
to an ultra vires act of the Minister." 359 Consequently, Turkey has argued that "no value should be
given to the rulings issued by the Administrative C ourts of Ankara by this Panel and for purposes of
this proceeding."360
7.71 Regarding the letter sent by the Turkish Mi nister of State to the United States Trade
Representative, Turkey has stated that:
"The diplomatic Letter … was designed to reassure the United States that, with the
phasing-out of the TRQ, traders would likely resume trading on MFN terms. It was
not an implicit confirmation of any systematic denial of the approval of Certificates
of Control."
361
7.72 Turkey has concluded that:
"The United States has not shown that there was a systematic rejection of requests for
approval. They have given evidence in re lation to five individual cases which have

355 Turkey's first submission, para. 68 (emphasis in the original). See also Ibid., para. 29; Turkey's
statement at the first substantive meeting, paras. 9 and 18; and Turkey's rebuttal, para. 21.
356 Turkey's response to question 20. See also Turkey's rebuttal, para. 33.
357 Turkey's statement at the first substantive meeting, para. 14.
358 Turkey's opening statement at the second substantive meeting, para. 14.
359 Turkey's comment on United States' response to question 145. See also Turkey's closing statement
at the second substantive meeting, para. 9.
360 Turkey's response to question 145.
361 Turkey's closing statement at the second substantive meeting, para. 3.

resulted in domestic litigation. This represen ts 0.2% of the approved Certificates of
Control."
362
7.73 Turkey has argued that it has "systematically a nd regularly" approved Certificates of Control
allowing the importation of rice. Turkey has also i ndicated that "the only way to determine its actual
policy is to look at the evidence provided by trade statistics."363 In its words:
"Contrary to what is erroneously claimed by the United States, Certificates of Control
have been systematically and regularly approved on a non-discriminatory basis since
the entering into force of ' The Regime for Technical Regulations and Standardization
for Foreign Trade ' in 1996 (as promulgated in the Official Gazette dated
1 February 1996 and numbered 22541 bis). This has been the case both for rice
imports occurring at the 'over-quota' MFN or applied rate level and, most importantly
for purposes of the allegations by the Unite d States, within the 'in-quota' volumes
established each year since 2004. In particular, from 2003 to date, Turkey has
approved a total of 2,223 Certificates of Control, allowing a total importation of
2,264,857 tonnes of foreign rice (paddy, br own and milled). Of the aforementioned
quantity, 497.469 tonnes of rice equivale nt have been allocated under the TRQ
system since January 2004."
 364
7.74 In support of this assertion, Turkey has provided statistics on the importation of rice 365 and
lists of approved and rejected Certificates of Control for the importation of rice.366
7.75 As noted, Turkey has not contested that there have been cases in which, since
September 2003, Turkish authorities have rejected a pplications for Certificates of Control for the
importation of rice outside of the tariff-rate quota. In some cases on the record, the administration
notified the applicant, as reasons for the rejection, that the application presented "missing items" or
"spelling errors".
7.76 It is also an uncontested fact that the rejecti ons of Certificates of Control for the importation
of rice for which the United States has presented evid ence, coincided with a period in which Turkey's
Minister of Agriculture had received the reco mmendation, and allegedl y had approved it, to
temporarily suspend the granting of Certificates of Control for the importation of rice outside of the
tariff-rate quota by MARA's General Directorate of Protection and Control.
7.77 The Panel is aware that merely because th ese two facts coincide in time, it does not
automatically lead to the conclusion that the rejection of the Certificates of Control was a
consequence of the recommendation of MARA's Ge neral Directorate of Protection and Control
contained in the "letters of acceptance". Nor does such coincidence, in and of itself, necessarily imply
that the Turkish government had put in place a general policy, during that period, of suspending the
concession of Certificates of Control for the importation of rice outside of the tariff-rate quota.
7.78 Accordingly, the Panel turns to the other evid ence available on the record. We start by
noting, as a factual matter, that there are a number of statements and actions by different official
Turkish authorities on the record, each of which tend s to ascribe more importance to the instructions
contained in the "letters of acceptance" than Turkey has granted them during the current proceedings.
We refer in this regard to: (i) the explicit referenc e that some of these "letters of acceptance" make to

362 Turkey's closing statement at the second substantive meeting, para. 6.
365 Exhibit TR-8.
366 Exhibit TR-20.

previous "letters of acceptance"; (ii) the statem ents made in Turkish domestic courts by the
representatives of MARA when defending it against actions brought by rice importers; (iii) the
decisions of Turkish domestic courts; and (iv) the statement of Turkey's Minister of State to the
United States Trade Representative.
367
7.79 The Appellate Body has cautioned against ascr ibing too much importance to unilateral
statements of Member's domestic authorities when characterizing their measures. 368 Given the
particular circumstances of the present case, however , we do not feel that the concurrent actions
adopted by authorities in different branches of the Turkish government should be totally disregarded
and deprived of any value, inasmuch as they point to the existence of a conviction on the part of these
authorities that the Ministry of Agriculture had the discretion to suspend the concession of Certificates
of Control for the importation of rice.
7.80 There is evidence that, not only on a single occasion, but repeatedly and periodically,
MARA's General Directorate of Protection and Control issued written recommendations to the
Minister of Agriculture and Rural Affairs to temporarily suspend the granting of Certificates of
Control for the importation of rice. The recommend ations that are on the record cover the periods
from September 2003 to March 2004
369, from January to July 2004 370, from July 2004 to
January 2005371, from January to August 2005 372, from July 2005 "until a new policy [was] in place",
and from March 2006 to April 2006.373
7.81 Even assuming ad arguendo that, in themselves these lette rs were only recommendations and
did not produce legal effects, many of these letters make explicit refe rence in their text to preceding
suspensions of the concession of Certificates of C ontrol for the importation of rice, made pursuant to
recommendations contained in previous "letters of acceptance". For example, letter No. 107 of
January 2004 refers to previous letter No. 964 of September 2003, which had limited the period of
issuance of Certificates of Control for the im portation of rice from 1 March 2004 and for paddy rice
from 1 August 2004, both ending on 1 September 2004. In turn, letter No. 905 of June 2004 refers to
the preceding letter (letter No. 107 of January 2004), which apparently limited the period of issuance
of Certificates of Control for the importation of rice from 1 July 2004 to 1 August 2004 for rice, and
from 1 July 2004 to 1 September 2004 for paddy rice. Thus, in their text, the letters record the
existence of periodic suspensions of the issuance of Certificates of Control for the importation of rice.
7.82 Furthermore, we do not find convincing Turkey's argument that the Minister of Agriculture
and Rural Affairs had no authority to order a tempor ary suspension of the granting of Certificates of
Control for the importation of rice, because MARA's General Directorate of Protection and Control
and the TMO continued to periodically recommend in writing that the Minister adopt exactly such
action, and the Minister repeatedly noted such r ecommendation, by affixing his signature on the text
of the document containing the recommendation. Wh ile we can agree with Turkey's characterization
that these "letters of acceptance" contain "policy recommendations"
374, it remains unconvincing that
such recommendations would be repeatedly brought to the attention of the Minister if, as Turkey has

367 The United States has also produced copy of a newspaper article, dated 7 April 2006, reporting a
protest made by Turkish ri ce producers against MARA because of th e supposed decision to grant an import
permit to a company, "without procuring any paddy or milled rice domestically, which was required". The
article also reports that the importing company "denied this claim, stating they were informed that rice imports
would be possible after April 1, 2006." Exhibit US-21.
368 Appellate Body Report on Japan – Alcoholic Beverages II, pp. 27-28, DSR 1996:I, p. 97, at pp. 119.
369 Exhibits US-12 and US-31.
370 Exhibit US-12. See also Exhibit US-31.
371 Exhibit US-13.
372 Exhibit US-14.
373 Exhibit US-36.
374 Turkey's response to question 145.

argued, they fell "outside the very competence of the Minister".
375 We note, in this regard, that
Turkey was requested by the Panel to provide evid ence of recommendations contained in "letters of
acceptance" that the Minister of Agriculture and Ru ral Affairs had not approved. To this request,
Turkey replied that:
"There is no such document that Turkey is in the position to circulate given the
privileged nature of the communications internal to the Administration and the
confidential nature of the information contained therein."376
7.83 There is strong indication that, once the Minister had approved the letters, the
recommendation effectively became an instruction to temporarily suspend the granting of Certificates
of Control for the importation of rice, at least for imports falling outside of the tariff-rate quotas. This
indication is confirmed not only by the text of the "letters of acceptance" themselves, many of which,
as noted, refer to previous temporary suspensions of th e granting of Certificates of Control. It is also
confirmed by the statements of MARA's representati ves when defending the actions of MARA before
Turkish domestic courts 377 and by the decision of Turkish domest ic courts to uphold the actions of
MARA in denying specific requests for Certificates of Control for the importation of rice, based on
one of these temporary suspensions as reflected in letters of acceptance.378
7.84 Turkey has argued that the Panel should give no value to the rulings issued by Turkish
domestic courts upholding MARA's actions on the basis of the approved "letters of acceptance". 379 In
the course of these proceedings, Turkey has argued th at these court decisions would be contrary to
Turkish domestic legislation and "appe ar to have given effect to an ultra vires act of the Minister." 380
Turkey has added that "[t]his Panel has to decide whether, de jure , there is any provision in the
Turkish law on Certificates of Control which gives any administrative authority the discretion to deny
their approval."381
7.85 We disagree with this last statement. The Pane l does not need to decide whether there is any
provision in Turkish domestic legisl ation which would give the Minister of MARA the discretion to
deny the approval of Certificates of Control. Ind eed, it would be outside this Panel's jurisdiction to
determine whether the refusal to grant Certificat es of Control for the importation of rice, made
pursuant to recommendations contained in "letters of acceptance", is consiste nt or not with Turkish
domestic legislation. We should presume that th e actions of the authorities of a WTO Member are
consistent with that Member's domestic legislation, in the absence of proof to the contrary. In any
event, other than its statements made in the c ourse of these proceedings, Turkey has not adduced any
evidence that those rejections were illegal under Turkish legislation. It is also noteworthy that, before
domestic courts, the Turkish government has argued ex actly the opposite. In any event, even if the
Minister's actions and the court decisions were cont rary to Turkish domestic legislation and had given
effect to ultra vires acts, there is no reason for the Panel to disregard them, as they constitute an
additional indication that the Turkish government had put in place a policy of suspending the
concession of Certificates of Control for the importation of rice outside of the tariff-rate quota.
7.86 Considering all of these elements taken together, we find that the letter sent by the Minister of
State of Turkey to the United States Trade Representative on 24 March 2006, informing that

375 Turkey's response to question 145.
376 Turkey's response to question 142.
377 Exhibit US-31.
378 Exhibit US-63.
379 Turkey's response to question 145.
380 Turkey's comment on United States' response to question 145. See also Turkey's closing statement
at the second substantive meeting, para. 9.
381 Turkey's opening statement at the second substantive meeting, para. 13.

Certificates of Control for the importation of rice would be issued as of 1 April 2006 382, is additional
indication that those Certificates of Control were not being issued at the time.
7.87 In view of the above, we preliminarily conclude, as a factual matter, that there is sufficient
evidence on the record to substan tiate a prima facie case that, fro m September 2003, and for different
periods of time 383, Turkey has adopted a decision to deny, or fail to grant, Certificates of Control to
import rice outside of the tariff rate quota. In these circumstances, we feel that the burden has been
adequately shifted onto Turkey to rebut this presumption.
(iv) Has Turkey produced evidence to rebut the presumption?
7.88 Having preliminarily found that the United St ates was able, based on the evidence on the
record, to make a prima facie case that Turkey, from September 2003 and for different periods of
time, has adopted a decision to deny, or fail to grant, Certificates of Control to import rice outside of
the tariff rate quota, it is Turkey's burden to rebut such presumption.
7.89 As noted, Turkey has disputed the facts descr ibed by the United States. Turkey has argued
that it has "systematically and regularly" approved Certificates of Control allowing the importation of
rice. Turkey has also indicated that "the only wa y to determine its actual policy is to look at the
evidence provided by trade statistics." 384 In the course of the pro ceedings, Turkey stated that
2,242 Certificates of Control for the importation of rice had been authorized between 2003 and
November 2006.
385
7.90 Noting the statistics provided by Turkey, the Panel repeatedly asked Turkey for evidence
regarding approved and rejected Certificates of Cont rol for the importation of rice. After the first
substantive meeting, the Panel asked Turkey to pr ovide a photocopy of each of the 2,223 Certificates
of Control approved between 2003 and Sept ember 2006 for the importation of rice. 386 In response,
Turkey stated that photocopies of Certificates of Control were available, but that the relevant
Ministries were not authorized to pr ovide "all the copies to the Panel". 387 Turkey added that, upon
request from the Panel, it would "be able to provide to the Panel in strict confidence copies of any
individual Certificate of Control" authorized between 2003 and 9 November 2006.388
7.91 Again, after the second substantive meeting, th e Panel asked for evidence regarding approved
and rejected Certificates of Control for the impor tation of rice. Referring to Turkey's previous
statement, the Panel asked Turkey, if it could not provide a photocopy of each of the
2,223 Certificates of Control approved between 2003 and September 2006, that it provide at least a
photocopy of each of the 56 approved Certificates of Control, which had been identified by the United
States during the second substantive meeting with th e Panel (as presumably corresponding to imports
outside of the tariff rate quota and of preferential trade arrangements).
389 The Panel also asked Turkey
to provide a photocopy of each one of the Certificates of Control approved between 2003 and
September 2006 which were the result of resubmitted applications, initially rejected by the Turkish

382 Exhibit US-35. See also United States' first submission, para. 32, and Turkey's response to
question 138.
383 See, for example, paras. 7.80 and 7.81 above.
385 Turkey's response to question 44 and exhibit TR-33. See also Turkey's first submission, para. 26,
Turkey's rebuttal, para. 20, and Exhibit TR-20.
386 Panel's question 44(e) to Turkey.
387 Turkey's response to question 44(e).
388 Ibid.
389 Panel's question 133(b) to Turkey. See also United States' statement at the second substantive

authorities.
390 Finally, the Panel proposed that, if Turkey could not provide the full photocopies
requested, with the purpose of protecting the privacy of the companies involved, it at least provide
those same photocopies after having blacked out the names of the companies.391
7.92 Regarding the requested photocopies of the 56 approved Certificates of Control identified by
the United States during the second substantive meeting with the Panel, Turkey responded that:
"With respect to the actual Certificates of Control, Turkey understands that the
documents provided to the Panel would have to be made available also to the United
States. Given the strict confidentiality requirements provided by Turkish law … and
the well-established communications and in formation-exchanges between the United
States and a number of Turkish rice traders, the Turkish officials involved in this
Panel proceeding do not feel comfortable in risking information leaks and possible
criminal accusations of violation of Turkish law on confidentiality…
Turkey is not in a position to provide copies of the actual Certificates of Control for
circulation. Exceptionally, Turkey would be willing to provide 'blacked-out' copies
of the 56 'relevant' Certificates of C ontrol only to the Panel and after a clear
understanding with the Panel and between the parties to this dispute that these
documents would not be made available to the United States nor to any other entity
beside the Panel and the WTO Secretariat."
392
7.93 Turkey has asserted that Certificates of Control allowing the importation of rice were
"systematically and regularly" approved. It has al so stated that individual instances of non-approval
by MARA of particular rice importers' applicati ons should not be seen as evidence of a general
policy. We note, however, that as stated by the A ppellate Body, "the mere assertion of a claim [does
not] amount to proof". 393 Accordingly, we must determine whether there is enough evidence on the
record to allow us to conclude that Turkey has adequately discharged its burden to rebut the
presumption that, from September 2003 and for different periods of time, it has adopted a decision to
deny, or fail to grant, Certificates of Control to import rice outside of the tariff rate quota.
7.94 We must note, as a factual matter, that desp ite repeated requests addressed to Turkey, the
Panel was not able to obtain evidence that Turk ey had been, as it stated, "systematically and
regularly" approving Certificates of Control allowing the importation of rice outside of the tariff rate
quota.
7.95 Turkey has argued that it has provided "ample evidence showing that no de facto 'prohibition'
or ' restriction' is to be found in relation to the approval of Certificates of Control.
394 T u r k e y h a s
stated that "2,242 Certificates of Control were approved between 2003 and 9 November 2006" 395,
i.e., the period "during which the United States alle ge that a 'blanket denial' was being enforced". 396
In addition, Turkey has submitted that, "of tho se 2,242 approved Certificates of Control, 1,335
(i.e., 59.5%) were approved in relation to out-of-quota trade (i.e., MFN or FTA trade)". 397 The figure
of 2,242 represented an a pproval rate of over 95 per cent of all a pplications lodged by importers for
approval of Certificates of Control. According to Turkey:

390 Panel's question 133(c) to Turkey.
391 Panel's question 133(f) to Turkey.
392 Turkey's response to question 133(b) and (f).
393 Appellate Body Report on US – Wool Shirts and Blouses, p. 14.
394 Turkey's rebuttal, para. 19. See also, Turkey's first submission, para. 65.
395 Turkey's rebuttal, para. 20.
396 Ibid., para. 19.
397 Ibid., para. 20.

"[B]etween 2003 and September 2006, a total of 2,324 applications for approval were
put forward and resulted in the approval of 2,223 Certificates of Control. Only 102
applications (equal to a mere 4.38%) were rejected for 'non-compliance with the
requirements set forth in the relevant legislation'. 398 Turkey believes that a rejection
rate of less than 5% cannot be quantified or qualified into a de facto import
'restriction'."
7.96 The only evidence provided by Turkey to su pport these statements, however, have been
copies of Turkish rules and regulations 399, copies of forms used for Certificates on Control and for
import licences under the tariff rate quotas400, as well as estimates, tables and calculations prepared by
Turkey for purposes of the present case. 401 Such documents, including the estimates, tables and
calculations that Turkey has especially emphasize d in its submissions, cannot, in our opinion, be
regarded as sufficient evidence to rebut the prima facie case made by the United States in this context.
7.97 We cannot fail to note, in particular, that th e evidence requested by the Panel of Turkey,
regarding Certificates of Control approved for the importation of rice, is in Turkey's possession.
7.98 In this regard, we have already found that the evidence provided by the United States is
sufficient to substantiate a prima facie case that , from September 2003 and fo r different periods of
time, Turkey has adopted a decision to deny, or fail to grant, Certificates of Control to import rice
outside of the tariff rate quota.
7.99 In response to the Panel's requests for evidence regarding approved and re jected Certificates
of Control for the importation of rice, Turkey cited limitations under its domestic legislation. In the
light of the concerns expressed by Turkey, the Pane l asked Turkey to elaborate on the legal reasons,
under Turkish domestic legislation, which would deny authorization to the Turkish government to
provide the documents requested by the Panel.
402 Turkey replied that:
"According to Article 13 of the Turkish Statistical Law, the confidential data
acquired, processed and kept for official statistics cannot be passed-on to any
administrative, judicial or military office, authority or person, and cannot be utilized
except for statistical purposes or be utilized as a tool for proof. Public officials or
other authorities that gather the information have to abide by this rule. Article 53 of
the same law provides that public officials violating the prohibitions embodied in
Article 13 will be punished in accordance with Article 258 of the Turkish Criminal
Code No. 5237."
403
7.100 The Panel was explicit in the documents it re quested from Turkey, both after the first and
after the second substantive meeting with the parties. 404 As noted above, in response to the Panel's
requests, Turkey expressed that its "officials i nvolved in this Panel proceeding [did] not feel
comfortable in risking information leaks and possible criminal accusations of violation of Turkish law
on confidentiality". 405 Turkey offered to provide "'blacked-out' copies of [some] Certificates of
Control only to the Panel and after a clear unders tanding... that these documents would not be made

398 (footnote original) See Annex TR-35 of Turkey’s Replies to Questions posed by the Panel.
399 Exhibits TR-1, TR-2, TR-5, TR -6, TR-7, TR-9, TR-11, TR-12, TR-13, TR-14, TR-15, TR-16,
TR-17, TR-18, TR-19, TR-21, TR-22, TR-31, TR-34, TR-40 and TR-44.
400 Exhibits TR-4 and TR-10.
401 Exhibits TR-8, TR-20, TR-23, TR-24, TR-25, TR-26, TR-27, TR-28, TR-29, TR-30, TR-32, TR-33,
TR-35, TR-36, TR-37, TR-38, TR-39, TR-41, TR-42 and TR-43.
402 Panel's question 133(a) to Turkey.
403 Turkey's response to question 133(a).
404 Panel's questions 44(e) and 133 (b), (c), (d), (e) and (f).
405 Turkey's response to question 133(b) and (f).

available to the United States nor to any other en tity beside the Panel and the WTO Secretariat".
406
However, the Panel cannot accept such an offer fro m Turkey, which is one of the parties to this
dispute. Indeed, the evidence requested by the Panel, as well as all submissions under the proceedings
at issue, fall under the provision contained in Article 18.1 of the DSU:
"1. There shall be no ex parte communications with the panel or Appellate Body
concerning matters under consideration by the panel or Appellate Body."
7.101 In addition, rule 10 of this Panel's Working Pr ocedures, adopted after consulting the parties to
the dispute, provides that:
"In the interest of full transparency, th e presentations, rebuttals and statements
referred to in paragraphs 5 to 9 of these working procedures [i.e., oral statements
made by the parties and third parties during the substantive meetings with the Panel,
and parties' and third parties' responses to questions posed by the Panel and the
parties during the substantive meetings with the Panel] shall be made in the presence
of the parties. Moreover, each party's written submissions, including any comments
on the descriptive part of the report, res ponses to questions put by the Panel and
comments on responses made by other parties, shall be made available to the other
party."
7.102 Turkey has explicitly acknowledged that it "unde rstands that the documents provided to the
Panel would have to be made available also to the United States."407
7.103 At no point during the Panel's proceedings did Turkey request the adoption of special and
additional rules for handling confidential informa tion, nor was such a request made subsequently,
even though the complainant raised the possibility of introducing such rules. The issue was brought
up orally by the United States during the second substantive meeting with the Panel, and was reflected
in its response to Panel's question 116:
"[A]s the United States noted during that meeting, it is not uncommon for WTO
panels to adopt procedures for the protection of confidential information submitted by
a party. Such procedures, which ensure that only the panelists, the WTO Secretariat,
and designated representatives of the other party have access to such information,
have generally worked well in the past and could have been employed in this dispute
if Turkey had concerns."408
7.104 Turkey, for its part, commented on this response, reiterating its willingness to provide the
requested copies of Certificates of Control but "blacked out" and only to the Panel, expressly
excluding the United States. 409 This would suggest ex parte communication, which, as explained
above410, is in direct contravention of Article 18.1 of the DSU.
7.105 In addition to not being in a position to accept Turkey's offer to submit evidence through what
would effectively amount to an ex parte communication of the requested documents, the Panel is not
persuaded by Turkey's arguments regarding limitations on its ability to share this information under

406 Turkey's response to question 133(b) and (f).
407 Ibid.
408 United States' response to question 116.
409 Turkey's comments on the United States' response to question 116.
410 See para. 7.100 above.

domestic law. Without adequate knowledge of the full text of the legislation referred to by Turkey411,
the Panel fails to comprehend how, for example, its rules would prevent Turkey from sharing the
requested information with the United States, but yet allow it to share such information with the
Panel.
7.106 Even if the Panel were to assume as valid Turkey's arguments concerning its limitations under
domestic law, that alone would not suffice to dischar ge Turkey from its evidentiary burden in these
proceedings. In the absence of an y rebutting evidence provided by Turkey, it is appropriate for this
Panel to draw the appropriate inferences 412, as the United States has sugg ested on several occasions
during this dispute.413
7.107 Accordingly, in the absence of the information required by th e Panel and, more generally
lacking any evidence that would allow us to reach a different conclusion, we conclude that Turkey has
failed to rebut the presumption that, from Septembe r 2003 and for different periods of time, it has
adopted a decision to deny, or fail to grant, Certificates of Control to import rice outside of the tariff
rate quota.
(v) Is Turkey's decision to deny, or fail to grant, C ertificates of Control to import rice outside of
the tariff rate quota a "measure of the kind whic h have been required to be converted into
ordinary customs duties"?
The Panel's Analysis

7.108 The Panel will now turn to the issue of whet her Turkey's decision, from September 2003 and
for different periods of time, to deny, or fail to gran t, Certificates of Control to import rice outside of
the tariff rate quota, can be considered as a "measu re of the kind which have been required to be
converted into ordinary customs duties" under Article 4.2 of the Agreement on Agriculture.
7.109 As noted by the Appellate Body in Chile – Price Band System:
"Footnote 1 [to Article 4.2 of the Agreem ent on Agriculture] lists six categories of
border measures and a residual category of such measures that are included in
'measures of the kind which have been required to be converted into ordinary customs
duties' within the meaning of Article 4.2. [Footnote omitted] The list is illustrative,
and includes 'quantitative import restrictions, variable import levies, minimum import
prices, discretionary import licensing, non-tariff measures maintained through state-
trading enterprises, voluntary export rest raints, and similar border measures other
than ordinary customs duties'. These kinds of measures were identified by the
negotiators of the Agreement on Agriculture as measures that had to be converted into
ordinary customs duties in order to ensure enhanced market access for imports of
agricultural products."
414

411 Turkey did not provide a copy of the rules in its domestic legislation under which it would be would
prevented from providing the evidence requested by the Panel, namely the Turkish Statistical Law and the
Turkish Criminal Code No. 5237.
412 See para. 7.10 above. See also Appellate Body Report on US – Wheat Gluten, para. 174.
413 United States' closing statement at the second substantive meeting, para. 6. United States'
comments on Turkey's responses to question 102, para. 4.
414 Appellate Body Report on Chile – Price Band System, para. 219.

7.110 The United States has argued that Turkey's denial, or failure to grant, Certificates of Control
to import rice outside of the tariff rate quota c onstitutes a "quantitative import restriction" and a
practice of "discretionary import licensing".
415
7.111 As noted, footnote 1 to Article 4.2 of the Ag reement on Agriculture lists "quantitative import
restrictions" and "discretionary import licensi ng" among the kind of measures which have been
required to be converted into ordinary customs duties. In the words of the Appellate Body:
"The footnote imparts meaning to Article 4.2 by enumerating examples of 'measures
of the kind which have been required to be converted', and which Members must not
maintain, revert to, or resort to, from th e date of the entry into force of the WTO
Agreement."416
Quantitative import restrictions
7.112 As mentioned by a previous panel:
"The prohibition on the use of quantitative restrictions forms one of the cornerstones
of the GATT system. A basic principle of the GATT system is that tariffs are the
preferred and acceptable form of protecti on... The prohibition against quantitative
restrictions is a reflection that tariffs are GATT's border protection 'of choice'.
Quantitative restrictions impose absolute limits on imports, while tariffs do not. In
contrast to MFN tariffs which permit the mo st efficient competitor to supply imports,
quantitative restrictions usually have a trad e distorting effect, their allocation can be
problematic and their administration may not be transparent.
Notwithstanding this broad prohibition against quantitative restrictions, GATT
contracting parties over many years failed to respect completely this obligation.
From early in the GATT, in sectors such as agriculture, quantitative restrictions were
maintained and even increased to the extent that the need to rest rict their use became
central to the Uruguay Round negotiations. In the sector of textiles and clothing,
quantitative restrictions were maintained under the Multifibre Agreement... Certain
contracting parties were even of the view that quantitative restrictions had gradually
been tolerated and accepted as negotiable and that Article XI could not be and had
never been considered to be, a provision prohibiting such restrictions irrespective of the
circumstances specific to each case. This argument was, however, rejected in an
adopted panel report EEC – Imports from Hong Kong.
417
Participants in the Uruguay Round recogni zed the overall detrimental effects of non-
tariff border restrictions (whether applied to imports or exports) and the need to
favour more transparent price-based, i.e. tariff-based, measures; to this end they
devised mechanisms to phase-out quantitative r estrictions in the sectors of agriculture
and textiles and clothing. This re cognition is reflected in the GATT 1994
Understanding on Balance-of-Payments Provisions 418, the Agreement on

415 United States' first submission, paras. 76-77.
416 Appellate Body Report on Chile – Price Band System, para. 209.
417 ( footnote original ) Panel Report on EEC – Quantitative Restrictions Against Imports of Certain
Products from Hong Kong, adopted on 12 July 1983, BISD 30S/129, ("EEC – Imports from Hong Kong").
418 (footnote original) See for instance paras. 2 and 3 of the GATT 1994 Understanding on the Balance-
of-Payments Provisions which provide that Members shall seek to avoid the imposition of new quantitative
restrictions for balance-of-payments purposes .

Safeguards419, the Agreement on Agriculture where quantitative restrictions were
eliminated420 and the Agreement on Textiles and Clothing... where MFA derived
restrictions are to be completely eliminated by 2005."421
7.113 We have already determined that, from Septem ber 2003 and for different periods of time,
Turkey adopted a decision to deny, or fail to grant, Certificates of Control to import rice outside of the
tariff rate quota. We note as an additional factual matter that the decision to temporarily suspend the
granting of Certificates of Control for the importation of rice was justified, on several occasions
during the period observed, as an instrument to ensure the absorption of local rice production. This is
clear in the reasons provided by MARA's General Directorate of Pr otection and Control, in several
letters of acceptance, when recommending to the Minister of Agriculture and Rural Affairs the
temporary suspension of the granting of Certificates of Control.
422 The justification of the decision to
temporarily suspend the granting of Certificates of Control is also present in several letters from the
TMO to MARA.423
7.114 As noted, in response to the United States' cl aim that the denial, or failure to grant,
Certificates of Control to import rice outside of the tariff rate quota is a "quantitative import
restriction", Turkey has argued that Certificat es of Control should not be considered as import
licences within the meaning of Article 1.1 of the Import Licensing Agreement 424, nor under
Article XI:1 of the GATT 1994.425
7.115 Turkey has also stated that there is neither a de jure nor a de facto "prohibition" or
"restriction" under Article XI:1 of the GATT 1994 426, nor a practice that would constitute a
"quantitative import restriction" within the meaning of Article 4.2 of the Agreement on Agriculture.427
Turkey has added that:
"Certificates of Control have been syst ematically and regularly approved on a non-
discriminatory basis... both for rice imports occurring at the 'over-quota' MFN or
applied rate level and... within the 'in- quota' volumes established each year since
2004."
428

419 (footnote original) The Agreement on Safeguards also evidence s a preference for the use of tariffs.
Article 6 provides that provisional safeguard measures "s hould take the form of tariff increases" and Article 11
prohibits the use of voluntary export restraints .
420 (footnote original) Under the Agreement on Agriculture, notw ithstanding the fact that contracting
parties, for over 48 years, had been relying a great deal on import restrictions and other non-tariff measures, the
use of quantitative restrictions and ot her non-tariff measures was prohibited and Members had to proceed to a
"tariffication" exercise to transform quantitative restrictions into tariff based measures.
421 Panel Report on Turkey – Textiles, paras. 9.63-9.65.
422 See, inter alia, Exhibit US-12 and US-13.
423 See, inter alia, Exhibit US-13. See also Exhibit US-31.
424 Turkey's first submission, paras. 45-57. See also Ibid., paras. 3 and 18, Turkey's statement at the
first substantive meeting, paras. 4, 11 and 47, Turkey's response to question 59, Turkey's rebuttal, para. 3,
Turkey's opening statement at the seco nd substantive meeting, para. 4, an d Turkey's closing statement at the
second substantive meeting, para. 12.
426 Ibid., paras. 63, 66 and 69. See also Turkey's statement at the first substantive meeting, paras.
12-14, Turkey's response to question 19 and Turkey's rebuttal, para. 16.
427 Turkey's first submission, para. 71. See also Tu rkey's statement at the first substantive meeting,
para. 37.
428 Turkey's first submission, para. 26. See also Turkey's response to questions 15 (b) and 45; Turkey's
rebuttal, para. 19; and Turkey's opening statement at the second substantive meeting, para. 8.

7.116 In Turkey' view, since:
"[T]he Certificates of Control are not import licenses within the meaning of the
Agreement on Import Licensing Procedures... there is clearly no 'denial' of
Certificates of Control, and... there is no de jure or de facto import prohibition or
restriction within the meaning of GATT Article XI:1... [t]herefore... there cannot be
'discretionary import licensing ' and/or ' quantitative import restrictions ' within the
meaning of Article 4.2 of the Agreement on Agriculture and footnote 1 thereof".
429
7.117 We have already noted that Turkey has not provided evidence of its assertion that a certain
number of Certificates of Contro l were approved between 2003 and 2006 for the importation of rice.
Nor has Turkey provided evidence of the alleged high rate of approval of applications for Certificates
of Control for the importation of rice. However, even if a number of Certificates of Control had been
approved, that would not nullify the fact that a decision was adopted to suspend at times the
concession of Certificates of Control to import rice outside of the tariff rate quota. From the
statements contained in the different documents from the Turkish authorities related to the adoption of
such decision, it is clear to the Panel that the su spension of the concession of Certificates of Control
was adopted to limit the amount of rice imports, in order to ensure the absorption of local production.
7.118 In our view, the factual determination that, from September 2003 and for different periods of
time, Turkey has decided to deny, or fail to grant, Certificates of Control to import rice outside of the
tariff rate quota in order to ensure the absorption of local production, is enough in itself to conclude
that this conduct constitutes a quantitative import rest riction, within the meaning of footnote 1 to
Article 4.2 of the Agreement on Agriculture.
7.119 The Panel recalls that in Chile – Price Band System , when referring to "variable import
levies" within the meaning of footnote 1 to Article 4.2, the Appellate Body noted some features that
are present in such measures:
"These additional features include a lack of transparency and a lack of predictability
in the level of duties that will result from su ch measures. This lack of transparency
and this lack of predictability are liable to restrict the volume of imports... [A]n
exporter is less likely to ship to a market if that exporter does not know and cannot
reasonably predict what the amount of duties will be.[Footnote omitted] This lack of
transparency and predictability will also cont ribute to distorting the prices of imports
by impeding the transmission of international prices to the domestic market."
430
7.120 In the present dispute, the challenged measure doe s not affect the level of duties, but rather
the quantities of product that can enter the Turkish market. We find, however, that the features of
"lack of transparency and lack of predictability" th at result from Turkey's decision to deny or fail to
grant Certificates of Control to import rice outside of the tariff rate quota are similar to those observed
by the Appellate Body Report in Chile – Price Band System . Even without any systematic intention
to restrict the importation of rice at a certain level, the lack of transparency and of predictability of
Turkey's issuance of Certificates of Control to import rice is similarly liable to restrict the volume of
imports.
7.121 In conclusion, we consider that there is su fficient evidence regarding the manner in which,
from September 2003 and for different periods of time, Turkey has denied or failed to grant
Certificates of Control to import rice outside of th e tariff rate quota, to characterize this measure as a
quantitative import restriction. Through this prac tice, the Turkish authorities have restricted the

430 Appellate Body Report on Chile – Price Band System, para. 234.

importation of rice for periods of time. This conduct can, therefore, be considered as a measure of the
kind which have been required to be converted into ordinary customs duties under Article 4.2 of the
Agreement on Agriculture.
Discretionary import licensing
7.122 Once found that Turkey's decision to deny or fail to grant Certificates of Control to import
rice outside of the tariff rate quota may be charact erized as a quantitative import restriction, in
principle the Panel need not proceed to consider further whether it may also be considered as a
practice of discretionary import licensing. We will nevertheless analyze this issue since, throughout
the Panel's proceedings, the United States articulated its claim against Turkey's decision to deny or
fail to grant Certificates of Control to import rice out side of the tariff rate quota, under Article 4.2 of
the Agreement on Agriculture, both as a quantit ative import restriction and as a practice of
discretionary import licensing.431
7.123 In examining the ordinary meaning of the term "discretionary import licensing" as it appears
in footnote 1 to Article 4.2, we note that a "licence" can be defined as a:
"Formal, usu[ally] printed or written, permission from an authority to do something...
or to own something ...; a document giving such permission; a permit".432
7.124 Parties have engaged in an extensive discussion regarding the appropriate interpretation of the
terms "import licences" and "import licensing". In particular, they have discussed at length whether
Certificates of Control may be characterized as "im port licences". Turkey has stated that the purpose
of the Certificates of Control is "to facilitate the process of customs clearance, [through the
submission] at importation [of a single] document... which contains all the information required for
customs purposes".
433
7.125 We do not feel that, for the resolution of the pr esent dispute, we need to articulate a general
definition of what constitutes an "import licence". Neither the Agreement on Agriculture, nor any of
the other WTO covered agreements, contain a general definition of "import licence".
7.126 Article 1.1 of the Import Licensing Agreement, however, contains a particular definition of
"import licensing," provided for the purpose of that agreement:
"For the purpose of this Agreement, import licensing is defined as administrative
procedures434 used for the operation of import licensing regimes requiring the
submission of an application or other doc umentation (other than that required for
customs purposes) to the relevant admi nistrative body as a prior condition for
importation into the customs territory of the importing Member."
7.127 Having referred to the ordinary meaning of the term "licence", we note that not all documents
giving the permission to import may be necessarily c onsidered to be "import licences". As noted by
the parties, the importation process is often a complex procedure during which a number of steps must
be completed in order to obtain the permission to import certain products. Throughout this process,
governments may require that written documents be obtained and then produced to certify the
completion of certain steps and thus the compliance w ith certain legal requirements, in order to allow

431 United States' first submission, paras. 3, 75-78, United States' opening statement at the first
432 The New Shorter Oxford English Dictionary (Clarendon Press, 1993), Vol. I, p. 1578.
434 ( footnote original) Those procedures referred to as "licensing" as well as other similar
administrative procedures.

the importation of goods and their final entry into the importing market. Each of these steps and
documents may serve particular objectives. Strictly speaking, these special documents, when used for
purposes such as sanitary and phytosanitary control, customs clearance, payment of taxes or duties,
are not to be considered as "import licences".
7.128 In turn, not all practices of "import licensing" would be "discretionary import licensing".
"Discretionary" is defined as "pertaining to discretion [or] left to discretion".
435 "Discretion" can be
characterized in turn as the "[f]reed om to decide or act as one thinks fit, absolutely or within limits;
having one's own judgement as the sole arbiter".436
7.129 In considering whether a measure may be characterized as an "import licence" or a conduct as
an "import licensing" practice, the proclaimed objec tives of a particular document or requirement are
not the main issue to consider in this dispute. Based on our earlier analysis, we have concluded that
there is sufficient evidence on the record to demons trate that, regardless of the purported objectives of
the Certificates of Control, the decision to stop granting such documents fo r periods of time has
served as an instrument for administering trade.
7.130 Considering the immediate context of the term "discretionary import licensing", we note that
it appears as one of the measures in the indicativ e list of "measures of the kind which have been
required to be converted into ordinary customs du ties". The object and purpose of Article 4 of the
Agreement on Agriculture, "to achieve improved mark et access conditions for imports of agricultural
products by permitting only the applic ation of ordinary customs duties" 437, would be undermined if
Members could decide, at their discretion, whether or not to grant permission for the importation of a
good, or if they could decide, at their discretion, whether or not to grant a document that is
indispensable for such importation.
7.131 This interpretation is consistent with the definition agreed by WTO Members in the context of
the Import Licensing Agreement. Article 1.1 of the Import Licensing Agreement and its footnote,
when defining import licensing, refer to licensing a nd "other similar administrative procedures". We
note in this regard that the footnote to the Annual Questionnaire on import licensing procedures,
adopted by the WTO Committee on Import Licensing,438 indicates that "similar procedures":
"[A]re understood to include technical visas, surveillance systems, minimum price
arrangements, and other administrative reviews effected as a prior condition for entry
of imports."439
7.132 When considering the decision to deny or fail to grant Certificates of Control to import rice as
a "quantitative import restriction", we noted that th e challenged measure does not affect the level of
duties, but rather whether or not the product can en ter the Turkish market. We also noted that the
features of "lack of transparency and lack of pred ictability" that result from Turkey's decision to deny
or fail to grant Certificates of Control to import rice outside of the tariff rate quota are similar to those

435 The New Shorter Oxford English Dictionary (Clarendon Press, 1993), Vol. I, p. 689.
436 Ibid.
437 Appellate Body Report on Chile – Price Band System, para. 234.
438 Annex, Questionnaire on Import Licensing Procedures, Notifications under Article 7.3 of the
Agreement, Note by the Secretariat, 20 October 1995, G/LIC/2. See also , Annex, Procedures for Notification
and Review under the Agreement on Import Licensing Pro cedures, Note by the Secretariat, 7 November 1995,

439 Annex, Questionnaire on Import Licensing Procedures, Notifications under Article 7.3 of the
Agreement, Note by the Secretariat, 20 October 1995, G/LIC/2 (emphasis added). Under this definition, a main
element considered by Members to determine whether a measure is to be characterized as an import licensing
procedure is whether the measure has been established as a prior condition to the entry of imports into the
territory.

observed by the Appellate Body Report in the Chile – Price Band System case. Such lack of
transparency and of predictability of Turkey's i ssuance of Certificates of Control to import rice is
similarly liable to restrict the volume of imports.
7.133 In the light of the above, without necessarily having to articulate a general definition of what
constitutes an "import licence" or a practice of "imp ort licensing", we find that the discretionary use
by authorities in an importing country of the concessi on, or refusal to grant, a particular document
which is necessary for the importation of a good, as an instrument to administer trade, in this case can
be safely characterized as a practice of "discretionary import licensing" under footnote 1 to Article 4.2
of the Agreement on Agriculture.
7.134 In conclusion, we consider that there is su fficient evidence regarding the manner in which,
from September 2003 and for different periods of time, Turkey has denied or failed to grant
Certificates of Control to import rice outside of th e tariff rate quota, to characterize this measure as a
discretionary practice by the Turkish authorities to decide whether or not to grant permission to
import a particular good. Through this discretionary practice, the Turkish authorities have suspended
the concession of Certificates of Control in regard to rice imports for periods of time. Given the fact
that importers must produce a Certificate of Control in order to be able to import rice even if they
fulfil the criteria required to be cer tified therein (as confirmed by Turkey 440), this practice effectively
has served as a way to administer trade. This conduct can be considered as a practice of
"discretionary import licensing" and, therefore, as a measure of the kind which have been required to
be converted into ordinary customs duties under Article 4.2 of the Agreement on Agriculture.
Final considerations

7.135 We have concluded that, from September 2003 a nd for different periods of time, Turkey has
denied or failed to grant Certificates of Control to import rice outside of the tariff rate quota, which
can be characterized as a "quantitative import restri ction" and as a practice of "discretionary import
licensing". In any event, we note that, as clarifie d by the Appellate Body, the "list of measures [in
footnote 1 to Article 4.2 of the Agreement on Agriculture] is illustrative, not exhaustive".441 Indeed:
"Footnote 1 also refers to a residual category of 'similar border measures other than
ordinary customs duties', which indicates that the drafters of the Agreement did not
seek to identify all 'measures which have been required to be converted' during the
Uruguay Round negotiations."
442
7.136 Even if it were not to be considered as a "quantitative import restriction" or as a practice of
"discretionary import licensing", we consider that, due to its recognized impact on the administration
of rice imports, Turkey's decision to deny or fail to grant Certificates of Control to import rice outside
of the tariff rate quota would at least qualify as a m easure that has sufficient likeness or resemblance,
so as to be similar to quantitative import restricti ons or to practices of discretionary import licensing
and, therefore, as a measure of the kind which have been required to be converted into ordinary
customs duties under Article 4.2 of the Agreement on Agriculture.
7.137 We are aware that a measure enumerated in the list provided in footnote 1 to Article 4.2 of the
Agreement on Agriculture may nevertheless not be considered to be a measure "of the kind which
have been required to be converted into ordina ry customs duties" if it falls under the exceptions
contained in the same footnote (i.e., if it is a measure maintained under balance-of-payments
provisions or under any other general, non-agricu lture-specific, provision of GATT 1994 or of the

440 See para. 2.47 above.
441 Appellate Body Report on Chile – Price Band System, para. 209.
442 Ibid., para. 210.

other Multilateral Trade Agreements in Annex 1A to the WTO Agreement) or if it falls under the
exceptions contained in Article 5 a nd Annex 5 of the Agreement on Agri culture. None of the parties,
however, has argued that Turkey's decision to deny or fail to grant Certificates of Control to import
rice outside of the tariff rate quota was adopted or maintained under any general, non-agriculture-
specific, provision of any of the WTO Multilateral Tr ade Agreements on Trade in Goods, nor that it
was adopted or maintained through the Special Safeguard Provisions in Article 5 of the Agreement on
Agriculture or under the provisions on Special Treatm ent contained in Annex 5 of the Agreement on
Agriculture.
(vi) Conclusion
7.138 For the reasons indicated above, the Panel concludes that Turkey's decision, from
September 2003 and for different periods of time, to deny, or fail to grant, Certificates of Control to
import rice outside of the tariff rate quota, constitu tes a quantitative import restriction, as well as a
practice of discretionary import licensing, within the meaning of footnote 1 to Article 4.2 of the
Agreement on Agriculture. Accordingly, it is a meas ure of the kind which have been required to be
converted into ordinary customs duties and is therefore inconsistent with Article 4.2 of the Agreement
on Agriculture.
6. Claim under Article XI:1 of the GATT 1994
(a) Arguments of the parties
7.139 The United States has raised the claim that Turk ey's denial, or failure to grant, licences to
import rice outside of the tariff rate quota, "is inconsistent with Article XI:1 of the GATT 1994
because it prohibits or restricts imports at the over-quota rate".
443 In the United States' view:
"Turkey's denial of import licenses outside the TRQ is in breach of Article XI of the
GATT 1994 because Turkey prohibits or rest ricts imports at the over-quota rate
through the use of import licenses or other measures."444
7.140 Turkey has responded that Certificates of Control are not import licences, but rather
"administrative forms that are required exclusively for ' customs purposes'".445 Turkey has added that
"no ' restriction' or ' prohibition' of rice importation... was instituted or maintained... by means of a
measure (i.e., the alleged ' denial of Certificates of Control to import rice ') which would amount to an
'other measure' within the meaning of GATT Article XI:1".446
(b) The Panel's analysis
7.141 The Panel has already found that Turkey's decision, from September 2003 and for different
periods of time, to deny or fail to grant Certificat es of Control to import rice outside of the tariff rate
quota is inconsistent with Article 4.2 of the Ag reement on Agriculture. We do not believe that,
having found that this measure is inconsistent w ith Article 4.2 of the Agreement on Agriculture, an
additional finding regarding the same measure under Article XI:1 of the GATT 1994 would be
necessary to resolve the matter at issue.
7.142 Accordingly, under the guidance of the principle of judicial economy, the Panel considers it
unnecessary for the resolution of this dispute to address the United States' claim that Turkey's

443 United States' first submission, paras. 3, 58-73.
444 United States' opening statement at the first substantive meeting, para. 11.
445 Turkey's first submission, para. 52 (emphasis in the original).
446 Ibid., para. 69 (emphasis in the original).

decision, from September 2003 and for different periods of time, to deny or fail to grant Certificates
of Control to import rice outside of the tariff rate quota is inconsistent with Article XI:1 of the GATT
1994. Therefore, the Panel refrains from making any findings with respect to this particular claim.
7. Claims concerning the administration of Turk ey's decision to deny or fail to grant
Certificates of Control to import rice
(a) Arguments of the parties
7.143 The United States has raised the claim that Turkey 's failure to publish its decision to deny or
fail to grant Certificates of Control to import rice out side of the tariff rate quota is inconsistent with
Articles X:1 and X:2 of the GATT 1994. In its view:
"The Letters of Acceptance, which apply to all importers seeking a Certificate of
Control from MARA in order to import rice, are Ministerial Decisions taken by the
Turkish Minister of Agriculture and are binding under Turkish law ... Turkey does
not publish the Letters of Acceptance in th e Official Gazette. This obscures from
importers and other WTO Members that MARA is not issuing Certificates of Control,
thereby blocking all imports of rice outside the TRQ regime. Turkey's failure to issue
Certificates of Control is inconsistent with Articles X:1 and X:2 of the GATT
1994."447
7.144 The United States has further made the claim th at, for the same reason, this measure is
likewise inconsistent with Articles 1.4(a) and 1.4(b) of the Import Licensing Agreement. In its words:
"Because Turkey does not publish the Lette rs of Acceptance, it also necessarily
breaches Articles 1.4(a) and 1.4(b) of the Import Licensing Agreement."448
7.145 The United States has finally claimed that:
"Turkey also has acted inconsistently with Articles 3.5(e) and (f) of the Import
Licensing Agreement [because ] Turkey has decided not to process Certificate of
Control applications within the periods specified in subparagraph (f) [i.e., no more
than 30 days, except when not possible for reasons outside the control of the Member,
and no longer than 60 days if all applica tions are considered simultaneously]... Nor
has Turkey ever asserted that it is 'not possi ble for reasons outside [its] control' to
process applications within the periods set out in Article 3.5(f)... Further, although
Turkey does not approve any license applications, it does not provide the applicant
'the reason therefor' – that is ... that Turkey has decided not to approve any license
applications."
449
7.146 Turkey has rejected these claims as, in its opinion, Articles 1.4 and 3.5 of the Import
Licensing Agreement do not apply to this dispute. In Turkey's view:
"[T]he United States bases its allegati ons and legal conclusions on the wrong
assumption that Certificates of Control are (or function as) import licenses. On the
basis of the legal arguments and factual ev idence provided, Turkey reaffirms that the
Certificates of Control are not import licen ses within the meaning of the Agreement
on Import Licensing Procedures. Therefore, the claim by the United States that

448 Ibid., para. 81.
449 Ibid., paras. 83-85.

Turkey has acted inconsistently with th ese obligations of transparency and due-
process must be rejected for the inapplicabilit y, in the case at issu e, of the Agreement
on Import Licensing Procedures."
450
(b) The Panel's analysis
7.147 The Panel has already found that Turkey's decision, from September 2003 and for different
periods of time, to deny or fail to grant Certificat es of Control to import rice outside of the tariff rate
quota is a border measure inconsistent with Article 4.2 of the Agreement on Agriculture. In the light
of this finding, the question of how this measure ha s been administered by Turkey becomes irrelevant
for the resolution of this dispute.
7.148 Accordingly, the Panel refrains from making an y findings with respect to these particular
claims.
C. THE DOMESTIC PURCHASE REQUIREMENT
1. The United States' claims
7.149 In its request for the establishment of a panel, the United States stated that:
"Turkey operate[d] tariff-rate quotas ('TRQs') fo r rice imports requiring that, in order
to import specified quantities of rice at reduced tariff levels, importers... purchase
specified quantities of domestic rice, including from the Turkish Grain Board
('TMO'), Turkish producers, or producer associations."
451
7.150 The United States referred to this particular measure as the "domestic purchase requirement".
In its view, the domestic purchase requirement is inc onsistent with Article 2. 1 and paragraph 1(a) of
the Annex to the TRIMs Agreement; with Article I II:4 of the GATT 1994; with Article XI:1 of the
GATT 1994; and with Article 4.2 of the Agreement on Agriculture. 452 Initially, the United States
presented each of these as an independent claim. Later in the proceedings, however, the United States
suggested that, "if the Panel [found] that Turkey [had] breached Article III:4 of the GATT 1994 by
instituting a domestic purchase requirement, it need not make a finding under Article 2.1 and
paragraph 1(a) of Annex 1 of the TRIMs Agreement".
453
2. Turkey's response
7.151 Turkey has confirmed that the importation of rice under the tariff rate quota (TRQ) system
was subject to a domestic purchase requirement. 454 Turkey has argued, however, that its domestic
purchase requirement was not a measure which affected the internal sale, o ffering for sale, purchase
or use of imported rice, and that it did not accord less favourable treatment to rice imported from the
United States by adversely affecting the conditi ons of competition in favour of domestic rice. 455
Turkey added that the TRQ regime, and its dome stic purchase requirement "never resulted in a

450 Turkey's first submission, para. 87. See also Tu rkey's statement at the first substantive meeting,
para. 38.
451 Request for the Establishment of a Panel by the United States, Turkey – Rice , 7 February 2006,
WT/DS334/4, p. 1.
452 Ibid., p. 3.
453 United States' comments on Turkey's responses to question 151, para. 63.
454 See, for example, Turkey's firs t submission, para. 33. The domestic purchase requirement in force
at the time when this Panel was established was regulated in Decree 2005/9315 of 10 August 2005 on the
Application of Tariff Quota for the Importation of Some Species of Paddy Rice and Rice. See para. 2.76 above.
455 Turkey's first submission, paras. 91-99.

substantial restriction on imports of rice".456 Turkey also stated that its TRQ regime was administered
through "an automatic import licensing system" 457 and could not be considered as a "non-tariff
measure maintained through state trading enterprises".458
7.152 Turkey has further added that "the legisl ative framework providing for the TRQ regime,
including the domestic purchase requirement, is no longer in force". 459 Therefore, it has requested the
Panel "to either refrain from making findings on th e measures related to Turkey's TRQ regime as [it
is] no longer in force, or, should the Panel cons ider making these findings necessary for purposes of
securing a positive solution to the dispute, not to make any recommendation to the Dispute Settlement
Body".460
3. Findings on an expired measure
7.153 Before the Panel can consider the United Stat es' claims regarding the so-called domestic
purchase requirement, we believe that the Panel must first address Turkey's request that it should
refrain from making findings on the measures related to Turkey's TRQ regime, including the domestic
purchase requirement, because such measures have expired. In other words, we believe that the Panel
must start by verifying at the outset whether it should issue findings on the claims advanced by the
United States regarding the domestic purchase requirement.
(a) Arguments of the parties
7.154 As noted above, Turkey has stated that "the legislative framework providing for the TRQ
regime, including the domestic purchase requirement, is no longer in force". 461 It has therefore
requested the Panel "to either refrain from making findings on the measures related to Turkey's TRQ
regime as [it is] no longer in force, or, should the Panel consider making these findings necessary for
purposes of securing a positive solution to the dis pute, not to make any recommendation to the
Dispute Settlement Body". 462 Turkey has added that "it has no intention to renew these measures,
neither extending them nor adopting new legislative instruments".463
7.155 In support of its request, Turkey reca lled the Appellate Body's finding in US – Certain EC
Products that:
"[T]here is an obvious inc onsistency between the finding of the Panel that '[a
specific] Measure is no longer in existenc e' and the subsequent recommendation of
the Panel that the DSB request that the United States bring [that] Measure into
conformity with its WTO obligations. Th e Panel erred in recommending that the

456 Turkey's first submission, para. 105. See also Tu rkey's statement at the first substantive meeting,
para. 22.
458 Ibid., para. 116.
459 Ibid., para. 136.
460 Ibid., para. 139. See also Turkey's statement at the first substantive meeting, para. 39 and Turkey's
rebuttal, para. 37.
462 Ibid., para. 139. See also Turkey's statement at the first substantive meeting, para. 39 and Turkey's
rebuttal, para. 37.
463 Turkey's rebuttal, para. 44. See also the European Communities' statement at the third party session,
para. 4.

DSB request the United States to bring into conformity with its WTO obligations a
measure which the Panel has found no longer exists."
464
7.156 Turkey has also cited cases in which, based on the Appellate Body's reasoning, subsequent
panels issued findings on specific measures that had expired, but abstained from recommending to the
DSB that it ask the Member concerned to brin g its measure into conformity with the WTO
agreements.
465 Additionally, Turkey quoted the statement of the Panel on EC – Approval and
Marketing of Biotech Products to the effect that:
"[A] panel is not necessarily required to make use of its authority to make findings in
respect of measures which were no longer in existence on the date of establishment of
[the] panel [and] that in determining wh ether to make findings on a measure no
longer in existence on the date of establishment of a panel, panels should notably take
account of the object and purpose of the dispute settlement system [which is,
p]ursuant to Article 3.7 of the DSU ... 'to secure a positive solution to a dispute'."
466
7.157 Turkey has further quoted a statement by the same Panel on EC – Approval and Marketing of
Biotech Products regarding the issue of whether it should recommend, as requested by one of the
parties, that the Member concerned bring its measure into conformity with the WTO agreements. In
that case, one of the complainants had argued th at, when a panel finds that a measure is WTO-
inconsistent, it must recommend pursuant to Article 19.1 of the DSU that the responding party bring
that measure into conformity with its WTO obligatio ns, regardless of whether the measure has ceased
to exist after the panel was established. The comp lainant had gone on to note the Appellate Body's
statement in US – Certain EC Products quoted above and emphasized that the measure in that case
had been terminated shortly before th e Panel was established. The Panel on EC – Approval and
Marketing of Biotech Products , found that this reasoning was correct , but added that "the Appellate
Body nowhere suggested that the situation could be different in a case where a measure ceased to
exist in the course of panel proceedings
467".468
7.158 Turkey has also quoted the EC – Approval and Marketing of Biotech Products Panel as citing
another panel report, that of Dominican Republic – Import and Sale of Cigarettes , "in support of the
view that panels are to avoid making recommenda tions which would apply to measures that are no
longer in existence 469 both in relation to measures expired be fore or after the commencement of the
panel proceedings".470

464 Appellate Body Report on US – Certain EC Products , para. 81, cited in Turkey's first submission,
465 See references to Panel Report on Chile – Price Band System , para. 7.112, and Panel Report on
Dominican Republic – Import and Sale of Cigarettes , para. 7.363, in Turkey's first submission, para. 138, and
Turkey's rebuttal, para. 38.
466 Panel Report on EC – Approval and Marketing of Biotech Products , para. 7.1651-7.1652, cited in
Turkey's rebuttal, para. 41.
467 (footnote original) The Appellate Body stated that "[a]s we have upheld the Panel's finding that [...]
the measure at issue in this dispute [...] is no longer in existence, we do not make any recommendation to the
DSB pursuant to Article 19.1 of the DSU. Appellate Body Report, US – Certain EC Products , para. 129
(emphasis added). In our view, if the Appellate Body had intended to distinguish between measures which
ceased to exist before a panel was established and meas ures which ceased to exist in the course of panel
proceedings, it would have used a phrase like "the measure at issue in this dispute was no longer in existence
when the panel was established".
468 Panel Report on EC – Approval and Marketing of Biotech Products , para. 7.1313, cited in Turkey's
rebuttal, para. 42.
469 (footnote original) See European Communities – Measures Affecting the Approval and Marketing of
Biotech Products, paras. 7.1313-7.1316. See also para. 7.1670.
470 Turkey's rebuttal, para. 42.

7.159 The United States has rejected these arguments. It has stated that the "TRQ regime allegedly
'expired' on July 31, 2006", after consultations had taken place and the Panel had been established. 471
It pointed out that the legislativ e framework that has provided for the establishment of tariff quotas,
namely, Decree No. 95/6814 of 30 April 1995 on Surveillance and Safeguard Measures for Imports
and Administration of Quotas and Tariff Quotas and Decree No. 2004/7333 of 10 May 2004 on the
Administration of Quotas and Tariff Quotas , is still in force. 472 The United States added that, "given
the number of unpublished documents that the Governme nt of Turkey issues with respect to the rice
trade"473 and the fact that the TRQs have expired before and then been reopened on previous
occasions474, in its view it is "critical for achieving a definitive resolution of this matter", not only that
the Panel make findings with regard to the measur e, but "that it also issue recommendations that
Turkey bring its measures into conformity with its WTO obligations".475
7.160 The United States has argued that "the TRQ regime had not 'expired' at the time of
consultations and panel establishment, and [therefore] the Panel is char ged by [its] terms of reference
and Article 3.3 of the DSU to issue findings with respect to the consistency of the measures
comprising Turkey's TRQ regime with the relevant provisions of the covered agreements and [to]
make recommendations in order to resolve the dispute".476
7.161 The United States has further argued that "[t]he reports cited by Turkey respect the distinction
between measures that expire prior to consultations and panel establishment and measures that expire
after panel establishment". 477 In its opinion, the Panel on US – Certain EC Products and the Chile –
Price Band System was faced with measures that had expired prior to the establishment of that
Panel.478 As for the Panel on Dominican Republic – Import and Sale of Cigarettes , the United States
has argued that:
"[T]he Appellate Body later disagreed with [that] panel and, contrary to what the
panel did [i.e., not consider it necessary to issue findings with respect to a measure
that had expired during the course of pa nel proceedings], recommended that the
Dominican Republic bring its measure into conformity with its WTO obligations to
the extent that it [had] not already done so".
479
7.162 The United States has also noted that:
"[T]he reports cited by Turkey support the U.S. position that the Panel should make
findings on the measures at issue, and if the panel finds the TRQ regime to be
inconsistent with provisions of the covere d agreement, [that it should] make the
recommendations required under the DSU".480
7.163 The United States has also pointed out that the Panel on EC – Approval and Marketing of
Biotech Products recalled:

471 United States' opening statement at the first substantive meeting, paras. 43-44.
472 United States' response to question 22, para. 46.
473 Ibid., para. 47.
474 United States' response to question 18, para. 37.
475 Ibid., para. 47. See also Thailand's statement at the third party session, para. 8. But see Egpyt's
statement at the third party session, para. 13.
476 United States' opening statement at the first substantive meeting, para. 44.
477 Ibid., para. 45.
478 Ibid.
479 Ibid. (emphasis in the original).
480 Ibid., para. 46 (emphasis in the original).

"[T]he informal, de facto nature of [the challenged me asure] which means that it can
be re-imposed just as soon as it can be e nded. In these circumstances, [the Panel
agreed] that even if the [m easure] ceased to exist after August 2003 [date of the
establishment of the panel], if [the Panel was] to find that the European Communities
acted inconsistently with its WTO obligati ons by applying a general moratorium in
August 2003 [at that same date], this coul d help prevent a WTO-inconsistent general
moratorium from being reintroduced and, in this way, secure a positive solution to
this dispute".
481
7.164 The United States added that the same Panel pointed out in a footnote to the paragraph quoted
above that:
"[I]f we were not to make findings on th e [measure], there would effectively be a
possibility of shielding it from scrutiny by a panel because this type of de facto
measure could be ended shortl y before or during panel pr oceedings and promptly re-
imposed thereafter."482
(b) The Panel's analysis
7.165 This Panel was established by the DS B in its meeting of 17 March 2006. 483 I t i s a n
uncontested fact that the most recent TRQ for th e importation of rice was opened by Turkey from
1 November 2005 to 31 July 2006. This TR Q was regulated through Decree 2005/9315 of
10 August 2005 on the Application of Tariff Quota for the Importation of Some Species of Paddy Rice
and Rice and was therefore in force at the time this Panel was established.484
7.166 The challenged measure was properly brought befo re the Panel and is within its terms of
reference. Indeed, Turkey has not disputed this: it has only requested that the Panel, based on the
subsequent expiration of the most recent tariff quot a for the importation of rice, refrain from making
findings on the measures related to Turkey's tariff quota regime or otherwise abstain from making
recommendations to the DSB.
7.167 The initial issue is thus whether the Panel should refrain from making findings on a measure
that has been properly brought to the Panel's atten tion by the complainant and that is within the
Panel's terms of reference, but terminated after the Panel was esta blished. This is not a novel issue.
Previous panels and the Appellate Body have been faced with similar situations. Only if the Panel
decides to make such findings, and if they consist in the determination of one or more violations of
the covered agreements, does the issue arise of wh ether the Panel should proceed to make specific
recommendations to the DSB with respect to that measure.
7.168 As pointed out by Turkey, previous panels have refrained from making findings on measures
that had terminated before those panels had been established.
485 In Argentina – Textiles and Apparel ,
the Panel declined to rule on a measure that was "revoked before the Panel was established and its
term of reference set, i.e. before th e Panel started its adjudication process" 486, even though the
measure was included in that Panel's terms of reference. In arriving at its decision, the Argentina –

481 Panel Report on EC – Approval and Marketing of Biotech Products , para. 7.1311, cited in United
482 Ibid., footnote 1194 to para. 7.1311, cited in United States' response to question 152, para. 60.
483 Constitution of the Panel Established at the Request of the United States (Note by the Secretariat),
Turkey – Rice, 1 September 2006, WT/DS334/5/Rev.1, para. 1.
484 See para. 2.76 above.
485 See, for example, Panel Report on US – Gasoline , and Panel Report on Argentina – Textiles and
Apparel.
486 Panel Report on Argentina – Textiles and Apparel, para. 6.13.

Textiles and Apparel Panel cited the statement of the Appellate Body in an earlier case that the aim of
dispute settlement:
"[Is not] to encourage either panels or th e Appellate Body to 'make law' by clarifying
existing provisions of the WTO Agreement outside the context of resolving a
particular dispute. A panel need only address those claims which must be addressed
in order to resolve the matter in issue in the dispute."
487
7.169 However, in the dispute before us, the term ination of the TRQ, and of the corresponding
domestic purchase requirement, occurred on 31 July 2006 . That date is more than four months after
the establishment of the Panel and the approval of its terms of reference by the DSB.
7.170 The Panel notes the United States' argument that, given the fact that the TRQs have expired
before and then been reopened on previous occasi ons, a finding on this matter is "critical for
achieving a definitive resolution". 488 The Panel also notes that the legislative framework which has
allowed for the establishment of the earlier TRQs (Decree No. 2004/7333 of 10 May 2004 on the
Administration of Quotas and Tariff Quotas) is still in force.
489
7.171 There is no reason, however, for the Panel to doubt Turkey's statement that "it has no
intention to renew these measures, neither extending them nor adopting new legislative
instruments".490 This is notwithstanding the fact that , when asked by the Panel after the first
substantive meeting about its statement that the TR Q would not be reintroduced in the future, Turkey
linked such commitment to the assumption of an un certain factor, i.e., that current domestic and
international economic conditions would not change. In Turkey's words:
"The domestic and international economic indicators also lead Turkey to the
assumption that there will not be, at least for the foreseeable futu re, needs for market
intervention and stabilization of the types that the TRQ helped address. In particular,
the Turkish Lira is no longer weak and unstable, plenty of rice is available
internationally, and domestic rice remain s competitive with predictable production
forecasts."491
7.172 Turkey has nevertheless added that:
"In any event... it will no longer have r ecourse to the TRQ system, if anything to
lower its administrative costs and to avoi d misunderstandings of the type that may
have triggered this dispute settlement pro ceeding. The only real market stabilization
instruments will remain the action of the TMO coupled with the use of appropriate
MFN actual rates of duty."492
7.173 Turkey's earlier statement led the Panel, afte r the second substantive meeting, to ask Turkey
whether it would re-evaluate the convenience of re introducing a TRQ regime for the importation of
rice, if any of the domestic and international econo mic indicators that it had originally considered
were to change. In response to this question, Turkey declared that:
"[D]espite the theoretical possibility th at 'domestic and international economic
indicators' may change in the future, the TR Q system is an instrument that Turkey

487 Appellate Body Report on US – Wool Shirts and Blouses, p. 19.
488 United States' response to question 18, paras. 37 and 47.
489 Turkey's response to question 148(e).
490 Turkey's rebuttal, para. 44.
491 Turkey's response to question 82.
492 Ibid.

considers too costly and administrativ e burdensome to achieve the intended
objectives of market intervention and stabili zation. Other less complicated trade
policies (i.e., the action of the TMO as an intervention agency, the appropriate and
legitimate use of MFN and applied rates of duty) stand-out as sufficient mechanisms
to manage the market in a WTO consistent fashion."
493
7.174 Accordingly, and despite the United Stat es' arguments on the likelihood of Turkey
reintroducing a TRQ regime for the importation of rice, and with it a domestic purchase requirement,
the Panel must not lightly assume that Turkey will not abide by its stated intentions and its WTO
commitments. Indeed, as stated by the Panel on Argentina – Textiles and Apparel , panels "must
assume that WTO Members will perform their treaty ob ligations in good faith, as they are required to
do by the WTO Agreement and by international law."
494
7.175 Notwithstanding these considerations, and re gardless of whether Turkey reintroduces a
domestic purchase requirement in the future in the context of a new TRQ, the Panel notes that it is
confined to the mandate it has received from the WTO Members, through the DSB and in accordance
with the DSU. That mandate consists of performing the tasks defined in Article 11 of the DSU:
"[T]o assist the DSB in discharging its responsibilities under this Understanding and
the covered agreements. Accordingly, [t o] make an objective assessment of the
matter before it, including an objective ass essment of the facts of the case and the
applicability of and conformity with the re levant 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..."
7.176 More specifically, in the present case, the Pa nel has been given the following terms of
reference by the DSB:
"To examine, in the light of the relevant provisions of the covered agreements cited
by the United States in document WT/DS334/4, the matter referred to the DSB by the
United States in that document, and to ma ke such findings as will assist the DSB in
making the recommendations or in giving the rulings provided for in those
agreements."495
7.177 The "matter before the Panel", i.e., "the matter referred to the DSB by the United States in"
document WT/DS334/4, consists "of two elements: the specific measures at issue and the legal basis
of the complaint (or the claims)".496
7.178 The mandate of the Panel is therefore to undertake a careful and objective consideration of the
matter that has been referred to it by the DSB. This mandate does not necessarily require examination
of each and every legal claim made by the complaini ng party. Indeed, panels may exercise judicial
economy as long as they consider "those claims on whic h a finding is necessary in order to enable the
DSB to make sufficiently precise recommendations a nd 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'."497

493 Turkey's response to question 148(c).
494 Panel Report on Argentina – Textiles and Apparel, para. 6.14.
495 Constitution of the Panel Established at the Request of the United States (Note by the Secretariat),
Turkey – Rice, 1 September 2006, WT/DS334/5/Rev.1, para. 2.
496 See, for example, Appellate Body Report on Guatemala – Cement I, para. 72.
497 Appellate Body Report on Australia – Salmon, para. 223.

7.179 The Panel does not believe that, given the circumstances of this dispute, it should refrain from
making any legal finding with regard to the domes tic purchase requirement, a measure that has been
properly brought before it, merely because the measur e expired after the establishment of the Panel.
To refrain from making such legal findings would, in the Panel's opinion, be inconsistent with the
duties assigned to it by the DSB.
(c) Conclusion
7.180 In the light of the above, and in particular of its terms of reference as approved by the DSB,
the requirements set out in Article 11 of the DSU, and in the absence of an agreement by the parties to
terminate the proceedings as regards this contested measure, the Panel concludes that, it would be
inappropriate to abstain from making findings with respect to the domestic purchase requirement, a
measure that has been properly brought before it. In addition, the Panel notes at this stage that it
would be appropriate for it to consider the subsidia ry request made by Turkey (i.e., that it abstain
from making any recommendation to the DSB regardi ng this measure), only if the Panel determines
that the domestic purchase requirement is inconsiste nt with any of the provisions cited by the United
States.
4. Order of analysis
7.181 Regarding the proper order of analysis to be undertaken by the Panel in considering the
different claims advanced by the United States, we begin by noting the first provisions cited by the
United States in its claims against the domestic purchase requirement, i.e., those contained in the
TRIMs Agreement.
7.182 Article 2.1 of the TRIMs Agreement states that:
"Without prejudice to other rights and obligations under GATT 1994, no Member
shall apply any TRIM that is inconsiste nt with the provisions of Article III or
Article XI of GATT 1994".
7.183 In turn, paragraph 1(a) of the Annex to the TRIMs Agreement provides that:
"TRIMs that are inconsistent with the oblig ation of national treatment provided for in
paragraph 4 of Article III of GATT 1994 include those which are mandatory or
enforceable under domestic law or under ad ministrative rulings, or compliance with
which is necessary to obtain an advantage, and which require:
the purchase or use by an enterprise of products of domestic origin or
from any domestic source, whether specified in terms of particular
products, in terms of volume or valu e of products, or in terms of a
proportion of volume or value of its local production".
7.184 Both provisions of the TRIMs Agreement, Article 2.1 and paragraph 1(a) of the Annex, refer
to the obligation of Members not to apply trade-re lated investment measures in a manner that is
inconsistent with specific rules contained in the GA TT 1994, notably in Article III and in Article XI.
Consequently, consideration of the United States' claims regarding the provisions of the GATT should
precede that of the cited provisions of the TRIMs Agre ement. This would also be consistent with the
United States' statement that, if the Panel found that the domestic purchase requirement is inconsistent

with Article III:4 of the GATT 1994, the Pane l need not make a finding under the TRIMs
Agreement.
498
7.185 The Panel thus needs to consider whether it shoul d start its analysis of the domestic purchase
requirement in relation to Article III:4 of th e GATT 1994, Article XI:1 of the GATT 1994, or
Article 4.2 of the Agreement on Agriculture.
7.186 In its relevant section, Article III:4 of the GATT 1994 states that:
"The products of the territory of any contr acting party imported into the territory of
any other contracting party shall be accord ed treatment no less favourable than that
accorded to like products of national origin in respect of all laws, regulations and
requirements affecting their internal sale, offering for sale, purchase, transportation,
distribution or use."
7.187 Article XI:1 of the GATT 1994 provides:
"No prohibitions or restrictions other than duties, taxes or other charges, whether
made effective through quotas, import or export licences or other measures, shall be
instituted or maintained by any contracting party on the importation of any product of
the territory of any other contracting party or on the exportation or sale for export of
any product destined for the territory of any other contracting party."
7.188 In turn, Article 4.2 of the Agreement on Agriculture states that:
"Members shall not maintain, resort to, or revert to any measures of the kind which
have been required to be converted into ordinary customs duties
1, except as otherwise
provided for in Article 5 and Annex 5.
Multilateral Trade Agreements in Annex 1A to the WTO Agreement."
7.189 The challenged measure is a specific requirement that was part of Turkey's TRQ system for
the importation of rice. The Panel notes that Article III:4 of the GATT 1994, on one hand, and, on the
other, Article XI:1 of the GATT 1994 and Article 4. 2 of the Agreement on Agriculture, have distinct
scopes of application. The former deals with me asures affecting imported products inside domestic
markets, whereas the latter two provisions deal with border measures that prohibit or restrict imports.
As stated by the GATT Panel on Canada – FIRA , in words that were quoted by the WTO Panel on
India - Autos:
"[T]he General Agreement distinguishes between measures affecting the 'importation'
of products, which are regulated in Artic le XI:1, and those affecting 'imported

498 United States' comments on Turkey's responses to question 151, para. 63. See also para 7.150
above.

products', which are dealt with in Article III. If Article XI:1 were interpreted broadly
to cover also internal requirements, Article III would be partly superfluous".499
7.190 Like Article XI:1 of the GATT 1994, Article 4.2 of the Agreement on Agriculture also deals
with border measures. Article 4.2 refers to "measu res of the kind which have been required to be
converted into ordinary customs duties" . As noted by the Appellate Body in Chile – Price Band
System, the footnote to Article 4.2 "imparts meaning to [this provision] by enumerating examples of
'measures of the kind which have been required to be converted', and which Members must not
maintain, revert to, or resort to, from th e date of the entry into force of the WTO Agreement ."500
These are generally referred to in the footnote as "border measures other than ordinary customs
duties".
7.191 Having said that, the Panel also bears in mind that, as noted by the Panel on India - Autos:
"[I]t... cannot be excluded a priori that different aspects of a measure may affect the
competitive opportunities of imports in different ways, making them fall within the
scope either of Article III (where compe titive opportunities on the domestic market
are affected) or of Article XI (where th e opportunities for importation itself, i.e.
entering the market, are affected), or even that there may be, in perhaps exceptional
circumstances, a potential for overlap between the two provisions ..."
501
7.192 In this particular dispute, the United Stat es' main claim against the domestic purchase
requirement is that it is a measure that "treats imported rice less favorably than domestic rice and
adversely affects the conditions of competiti on for imported rice in the Turkish market". 502 T h e
United States' other claims against that same meas ure – that it is a border measure that restricts
imports – have only been presented in the alternative. As argued by the United States: "To the extent
Turkey's domestic purchase requirement is not view ed as a 'law, regulation or requirement' within the
meaning of Article III, this requirement breach es Article XI:1 of the GATT 1994, because it is a
'restriction... on importation' within the meaning of Article XI:1".503
7.193 In other words, the United States made its claim against the domestic purchase requirement as
a violation of Article XI:1 of the GATT 1994 c ontingent on a finding by the Panel that such
requirement was not a "law, regulation or requirem ent" within the meaning of Article III:4 of the
GATT 1994. As the measure has been challenged first because of its alleged effects on the
competitive position between imported and domestic ri ce, the Panel finds it reasonable to begin its
analysis by focusing on the claim brought under Article III:4 of the GATT 1994.
7.194 Only after the Panel considers the consiste ncy of the domestic purchase requirement with
Article III:4 of the GATT 1994, will it turn to the i ssue of whether the same measure should also, or
alternatively, be viewed as a border measure and thus properly analysed under Article XI:1 of the
GATT 1994 or Article 4.2 of the Agreement on Agricultu re, or both. In this regard, the Panel has
already noted that Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture
have similar scopes of application as they both apply to border measures. 504 Article XI:1 of the
GATT 1994, however, is generally applicable to im port prohibitions or restrictions imposed on any

499 GATT Panel Report on Canada – FIRA, L/5504, adopted on 7 February 1984, para. 5.14, as quoted
in the Panel Report on India - Autos, para. 7.220.
500 Appellate Body Report on Chile – Price Band System, para. 209.
501 Panel Report on India - Autos, para. 7.224.
503 Ibid., para. 103.
504 See paras. 7.48 and 7.189 above.

product, while Article 4.2 of the Agreement on Ag riculture is limited to measures imposed on
products that fall within the scope of the Agreement of Agriculture.
7.195 In this particular case, and with regard to the domestic purchase requirement, the United
States' claims under both Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on
Agriculture may be considered to be equivale nt. Following the same approach used before
505, if the
Panel decides that it should also, or alternativel y, consider the domestic purchase requirement as a
border measure, it will start by examining the claims presented by the United States under Article 4.2
of the Agreement on Agriculture, since this Agreement may be considered more specific in respect of
border measures imposed on agricultural products.
7.196 In conclusion, the Panel will begin its analysis of the claims advanced by the United States
regarding the domestic purchase requirement, by considering first the claim brought under
Article III:4 of the GATT 1994. After the domestic purchase requirement has been considered under
Article III:4 of the GATT 1994, the Panel will then consider whether the same measure should also,
or alternatively, be viewed as a border measure and thus analysed under Article XI:1 of the GATT
1994 or Article 4.2 of the Agreement on Agriculture, or both. In this part of its analysis, should it be
necessary, the Panel would start by examining the claims presented by the United States under
Article 4.2 of the Agreement on Agriculture, since this Agreement may be considered more specific in
respect of border measures imposed on agricultura l products. If the Panel were to make findings
under Article 4.2 of the Agreement on Agriculture, it would then consider whether it should also
make findings under Article XI:1 of the GATT 1994. Fi nally, if the Panel were to determine that the
domestic purchase requirement was inconsistent with any or all of the above-cited GATT provisions,
it would then consider whether it is also necessary to issue findings under the TRIMs Agreement.
5. Claim under Article III:4 of the GATT 1994
(a) Arguments of the parties
7.197 The United States claims that:
"Turkey's imposition of a domestic purchase requirement under the TRQ regime on
potential importers of rice into Turkey is inconsistent with Article III:4 of the GATT
1994, because the measure treats imported rice less favorably than domestic rice and
adversely affects the conditions of competition for imported rice in the Turkish
market.
506
7.198 Recalling the Appellate Body's statement in Korea – Various Measures on Beef , the United
States has stated that:
"[T]here are three elements that must be satisfied to establish that a measure is in
breach of Article III:4: (1) the importe d and domestic products must be 'like'
products; (2) the measure is a law, regulati on, or requirement 'affecting their internal
sale, offering for sale, purchase, transporta tion, distribution or use'; and (3) the
imported products are treated less favorably than domestic products."507

505 See para. 7.48 above.
506 United States' first submission, para. 86. See also United States' rebuttal, para. 65. See also China's
third party submission, para. 9. See also Australia's statement at the third party session, para. 22, China's
statement at the third party session, para. 3, Korea's statement at the third party session, pp. 3-4, and Thailand's
statement at the third party session, para. 4.

7.199 The United States has argued that Turkish rice and United States rice are like products.
Firstly, because the difference in treatment between domestic and imported rice accorded by the
challenged measure is based exclusiv ely on the origin of the products.
508 Secondly, based on the
terms of their tariff classification; their properti es, nature and quality; their end uses; and the
consumer preferences.509
7.200 The United States has added that the domestic pur chase requirement can be characterized as a
"requirement", in terms of Article III:4 of the GATT 1994, inasmuch as the measure is tantamount to
an obligation which importers voluntarily accep t in order to obtain an advantage from the
government, i.e., the ability to pay a reduced rate of duty to import rice.
510 It would "affect the
internal sale, offering for sale, purchase, and use of the like products", becau se compliance with the
domestic purchase requirement provides the only way to import rice into Turkey 511 and, more
generally, because "[o]nly domestic rice satisfies the purchase requirement in order to import rice into
Turkey under the TRQ, whereas imported rice does not".
512
7.201 The United States has also stated that "Turke y's domestic purchase requirement accords less
favorable treatment to imported rice", because "impor ted rice cannot be sold in the domestic market
under any circumstance unless the importer first purchases, at inflated prices, domestic rice" and
because "the domestic purchase requirement creates a disincentive to purchase and import foreign
rice"
513:
"Consequently, by making the sourcing of imported rice less desirable, the domestic
purchase requirement alters the decision-ma king calculus of domestic entities when
making purchasing decisions regarding rice. And by making imported rice ineligible
to satisfy the purchase requirement, the conditions of competition are altered in favor
of domestic rice."514
7.202 The United States has also argued that:
"[D]omestic rice has an advantage in the marketplace that imported rice does not
have, and domestic rice is more attractive as a result. A purchaser considering a
purchase of domestic or imported rice knows that only the domestic rice can be used
to facilitate importation under the TRQ and so that advantage accrues only to the
domestic rice."
515
7.203 The United States has indicated that early GATT panels, as well as WTO panels and the
Appellate Body, have found that "a Member's requiring the sourcing of domestic goods as a condition
to receive a benefit [is] inconsistent with Article III:4 of the GATT".516 The United States specifically
referred to the GATT Panel report in Italy – Agricultural Machinery and to the WTO Panel report in
India – Autos.517

508 United States' first submission, paras. 89-90.
509 Ibid., paras. 91-92.
510 Ibid., paras. 93-94.
511 Ibid., paras. 95-96.
512 United States' opening statement at the first substantive meeting, pa ra. 29. See also United States'
opening statement at the second substantive meeting, para. 16.
513 United States' first submission, paras. 97-98.
514 Ibid., para. 98.
515 United States' opening statement at the first substantive meeting, para. 29.
516 Ibid., paras. 30-31.
517 Ibid.

7.204 Turkey has agreed with the United States regarding the thr ee elements that must be
determined in order to find a violation of Article III:4 of the GATT 1994.
518
7.205 Turkey has also agreed with the United States that "the imported and domestic products in the
case at stake [imported and domestic rice] are, in fact, 'like products'."519
7.206 Turkey has also agreed that its domestic purch ase requirement "can be considered as either a
'law, regulation or requirement ' within the meaning of [Article III:4 of the GATT 1994]." 520 Turkey,
however, has stated that this measure "does not ' affect the internal sale, offering for sale, purchase
(…) or use ' of imported rice".521 In this respect, Turkey has argued that:
"[I]t is wrong and misleading to state that the fulfilment of the [domestic purchase
requirement] by importers 'provides the only way to import rice into Turkey '. In fact,
as widely known and as effectively evidenced in the factual background, any importer
is free to import whatever quantity of rice into Turkey from whatever country at the
MFN or applied rate of duty."
 522
7.207 In Turkey's view, "[t]he regime of importati on which was applied within the TRQ was meant
to provide an advantage to importers of foreign rice to adequately supply the Turkish rice market."523
7.208 Turkey has argued that "the opening... of its TRQ... resulted in the modification of the
conditions of competition between domestic and im ported products in favour of imported products ",
by making imported rice "purchased through the TRQ regime" cheaper than like domestic rice.524
7.209 Turkey has finally argued that "the cond itions of competition [between imported and
domestic rice] have not been adversely affected by the [domestic purchase requirement] in favour of
domestic rice and no less favourable treatment [has been] accorded by Turkey to rice imported from
the United States".525
7.210 Therefore, Turkey has concluded that the Pane l should reject the claim by the United States
that the domestic purchase requirement is inconsistent with Article III:4 of the GATT 1994.526
(b) Article III:4 of the GATT 1994
7.211 Under Article III:4 of the GATT 1994:
"The products of the territory of any contr acting party imported into the territory of
any other contracting party shall be accord ed treatment no less favourable than that
accorded to like products of national origin in respect of all laws, regulations and
requirements affecting their internal sale, offering for sale, purchase, transportation,
distribution or use..."

519 Ibid, para. 90 (emphasis in the original).
520 Ibid., para. 91 (emphasis in the original).
521 Ibid. (emphasis in the original).
522 Ibid., para. 93 (emphasis in the original). See also Turkey's statement at the first substantive
meeting, paras. 25 and 30, and Turkey's rebuttal, para. 47.
523 Turkey's first submission, para. 93. See also Tu rkey's statement at the first substantive meeting,
paras. 22-23 and 25, and Turkey's rebuttal, paras. 46-47.
524 Turkey's first submission, paras. 94-97. See also Turkey's statement at the first substantive meeting,
paras. 26 and 30, and Turkey's rebuttal, para. 48.
526 Ibid., para. 99.

(c) The Panel's analysis
7.212 As recalled by both parties, the Appellate Body has said that:
"For a violation of Article III:4 to be estab lished, three elements must be satisfied:
that the imported and domestic products at is sue are 'like products'; that the measure
at issue is a 'law, regulation, or requirement affecting their internal sale, offering for
sale, purchase, transportation, distribution, or use'; and that the imported products are
accorded 'less favourable' treatment than that accorded to like domestic products."527
(i) Likeness of products
7.213 There is no disagreement between the parti es that the relevant imported and domestic
products (imported and domestic rice) are "like products".528
7.214 In any event, a number of panels have held the view that where a difference in treatment
between domestic and imported products is based ex clusively on the products' origin, it is correct to
treat products as "alike" within the meaning of Article III:4. In that case, there is no need to establish
the likeness between imported and domestic products in terms of the traditional criteria – that is, their
physical properties, end-uses and consumers' tastes and habits.529
7.215 The measure under consideration, the domestic purchase requirement, created a distinction
between different categories of rice, based solely on the criterion of their respective origin. Under the
rules contained in Decree 2005/9315 of 10 August 2005 on the Application of Tariff Quota for the
Importation of Some Species of Paddy Rice and Rice , the purchase of paddy rice from domestic
producers and the purchase of domestic paddy rice or milled rice from the TMO granted the purchaser
the benefit of access to the importation of rice at reduced tariff levels. In contrast, the purchase of
imported rice did not grant the same benefit. Turkey has not disputed this fact.530
7.216 Accordingly, imported and domestic rice can be considered as "like products", within the
meaning of Article III:4 of the GATT 1994, and fo r the purpose of considering the United States'
claims regarding the domestic purchase requirement.
(ii) Law, regulation or requirement affecting the internal sale, offering for sale, purchase,
transportation, distribution or use
7.217 There is no disagreement between the parties that the domestic purchase requirement can be
considered as a "law, regulation or requirement". 531 In any event, we recall that the Panel on India –
Autos, when considering the notion of "requirement" within the meaning of Article III:4 of the GATT
1994, first noted that:
"An ordinary meaning of the term 'require ment', as articulated in the New Shorter
Oxford Dictionary, is 'Something called fo r or demanded; a condition which must be
complied with'."532

527 Appellate Body Report on Korea – Various Measures on Beef, para. 133.
528 Turkey's first submission, para. 90. United States' first submission, paras. 89-92.
529 See, for example, Panel Report on India - Autos, para. 7.174, and Panel Report on Canada – Wheat
Exports and Grain Imports, para. 6.164 and footnote 246.
530 See, for example, Turkey's first submission, para. 33.
531 Ibid., para. 91. United States' first submission, paras. 93-94.
532 Panel Report on India - Autos, para. 7.181.

7.218 The same Panel then noted that GATT jurispr udence "suggests two distinct situations which
would satisfy the term 'requirement' in Article III:4: (i) obligations which an enterprise is 'legally
bound to carry out'; [and (ii)] those which an en terprise voluntarily accepts in order to obtain an
advantage from the government."
533
7.219 The domestic purchase requirement can clearly be considered as a "requirement", within the
meaning of Article III:4 of the GATT 1994, as it is a condition that importers may voluntarily accept
in order to obtain an advantage from the Turkish government, i.e., the ability to import rice at reduced
tariff rates.
7.220 Turkey argues, however, that this measure does not affect the internal sale, offering for sale,
purchase or use of imported rice. 534 In Turkey's view, the domestic purchase requirement was part of
a regime that provided an advantage to importers of foreign rice to adequately supply the Turkish rice
market, but did not prevent them from otherwise importing rice into Turkey from any origin at the
MFN or applied rate of duty.
535
7.221 We note that the term "affecting" in the expression "laws, regulations and requirements
affecting [the] internal sale, offering for sale, purchase, transportation, distribution or use" in
Article III:4 of the GATT 1994 has been found to have a broad scope. As articulated in WTO and
GATT jurisprudence, it "cover[s] not only laws a nd regulations which direc tly govern the conditions
of sale or purchase but also any laws or regulations which might adversely modify the conditions of
competition between domestic and imported products536."537
7.222 In US – FSC (Article 21.5 – EC) , the Appellate Body also di scussed the use of the word
"affecting" in Article III:4 of the GATT 1994, and noted that:
"The word 'affecting' serves a similar function in Article I:1 of the General
Agreement on Trade in Services (the 'GATS'), where it also defines the types of
measure that are subject to the disciplin es set forth elsewhere in the GATS but does
not, in itself, impose any obligation. 538 I n EC – Bananas III, we considered the
meaning of the word 'affecting' in that provision of GATS. We stated:
[t]he ordinary meaning of the word 'affecting' implies a measure that
has 'an effect on', which indicates a broad scope of application. This
interpretation is further reinforced by the conclusions of previous
panels that the term 'affecting' in the context of Article III of the
GATT is wider in scope than su ch terms as 'regulating' or
'governing'.
539 (emphasis added, footnote omitted)."540

533 Panel Report on India - Autos, para. 7.184.
535 Ibid., para. 93.
536 (footnote original) Panel Report on Italian Agricultural Machinery, supra note 390, para. 12.
537 Panel Report on Canada – Autos , para. 10.80. See also, for example, Panel Report on Mexico –
538 (footnote original) Article I:1 of the GATS provides that "[t]his Agreement applies to measures by
Members affecting trade in services." (emphasis added)
539 (footnote original) Appellate Body Report, supra, footnote 47, para. 220. We made the same
statement regarding the word "affecting" in Article I:1 of the GATS in our Report in Canada – Autos, supra,
footnote 56, para. 150.
540 Appellate Body Report on US – FSC (Article 21.5 – EC), para. 209.

7.223 Turkey has admitted that the domestic purchase requirement was established:
"To partially compensate against [a] shif t of competitive conditions solely towards
imported rice, while at the same time pursuing the objectives of greater market supply
(through the TRQ) and market stabilization (which also carried obvious consequences
in terms of the viability and affordabilit y, within the committed AMS levels, of
Turkey’s market intervention mechanisms)".541
7.224 As Turkey has stated in other words:
"[I]ts domestic purchase requirement was introduced within the TRQ in order to
partly moderate the advantageous effects of the preferential rates (i.e., advantages
which were totally in favour of imported products)."542
7.225 The Panel believes that, if the domestic purchase requirement had the effect of altering the
competitive relationship between imported and domest ic rice, even for the purpose of partially
compensating for the benefits granted through the TRQs, it is difficult to see how this requirement did
not affect the internal sale, offering for sale, purchase, and use of imported rice. The domestic
purchase requirement certainly "had an effect on" the competitive relationship between imported and
domestic rice, and thus affected the decisions of operators on the purchase of imported and domestic
rice.
7.226 Accordingly, we conclude that the domestic purchase requirement can be considered as a
requirement affecting the internal sale, offering fo r sale, purchase and use of imported rice, within the
meaning of Article III:4 of the GATT 1994.
(iii) Less favourable treatment
7.227 The United States has argued that the domes tic purchase requirement results in less
favourable treatment for imported rice than for like domestic rice. In its view:
"Under the applicable regulations, imported rice cannot be sold in the domestic
market under any circumstance unless the importer first purchases... domestic rice.
Domestic rice producers are not subject to the same requirement in order to bring
their product to market, which provides them a tremendous advantage in the market.
Further, because the domestic purchase requirement makes pr ocuring imported rice
more costly ... the domestic purchase requirement creates a disincentive to purchase
and import foreign rice. Consequently, by making the sourcing of imported rice less
desirable, the domestic purchase requirement alters the decision-making calculus of
domestic entities when making purchasing decisions regarding rice. And by making
imported rice ineligible to satisfy th e purchase requirement, the conditions of
competition are altered in favor of domestic rice."
543

542 Turkey's opening statement at the second substantive meeting, para. 32.

7.228 Turkey has rejected this argument. It has stated instead that:
"The [domestic purchase requirement], in substance, was altering the conditions of
competition between domestic and imported products in favour of imported
products."
544
7.229 Turkey has argued further that the domestic purchase requirement should not be seen in
isolation, but as a component of the TRQ:
"The domestic purchase requirement must be seen as a fundamental of the TRQ
system itself, just like the in-quota and the preferential rates of duty. Turkey
maintains that it was fully entitled to decide , in line with its economic policies, the
characteristics of the TRQ. For those importers that did not consider TRQ trade
advantageous, MFN always remained an option."545
7.230 In Turkey's view, "a TRQ system without the domestic purchase requirement would have
resulted in too great an advantage in favour of imported products".546
7.231 In order to determine whether the domestic pur chase requirement resulted in treatment for
imported rice that is less favourable than that acco rded to like domestic products, the Panel is guided
by the statement from the Appellate Body that such an assessment should focus on examining
"whether a measure modifies the conditions of compe tition in the relevant market to the detriment of
imported products".547
7.232 Indeed, when considering the issue of "less favourable treatment" under Article III:4 of the
GATT 1994, previous panels have highlighted the importance of ensuring the "equality of competitive
conditions between imported products and like domestic products". As noted by the Panel on Japan –
Film:
"Recalling the statement of the Appellate Body in Japan – Alcoholic Beverages that
'Article III obliges Members of the WTO to provide equality of competitive
conditions for imported products in relation to domestic products'
548, we consider
that this standard of effective equality of competitive conditions on the internal
market is the standard of national treatment that is required, not only with regard to
Article III generally, but also more particular ly with regard to the "no less favourable
treatment" standard in Article III:4. We note in this regard that the interpretation of
equal treatment in terms of effective equality of competitive opportunities, first
clearly enunciated by the panel on US – Section 337 549, has been followed
consistently in subsequent GATT and WTO panel reports.550"551

545 Turkey's statement at the first substantive meeting, para. 30.
546 Turkey's rebuttal, para. 50.
547 Appellate Body Report on Korea –Various Measures on Beef, para. 137.
548 (footnote original) Japan – Alcoholic Beverages , p. 16, citing US – Taxes on Petroleum Products
and Certain Imported Substances , BISD 34S/136, para. 5.1.9 and Japan – Liquor Taxes , BISD 34S/83,
para. 5.5(b).
549 (footnote original) US – Section 337, BISD 36S/345, 386-387, para. 5.11.
550 (footnote original) See e.g. Canada – Import, Distribution and Sale of Certain Alcoholic Drinks by
Provincial Marketing Agencies , adopted on 18 February 1992, BISD 39S/27, paras. 5.12-5.14 and 5.30-5.31;
US – Malt Beverages, BISD 39S/206, para. 5.30; US – Gasoline, WT/DS2/R, para. 6.10; Canada – Periodicals,
WT/DS31/R, adopted on 20 July 1997, p. 75; Bananas III, WT/DS27/R, paras. 7.179-7.180.
551 Panel Report on Japan – Film, para. 10.379.

7.233 There is no disagreement between the par ties that, pursuant to Decree 2005/9315 of
10 August 2005 on the Application of Tariff Quota for the Importation of Some Species of Paddy Rice
and Rice 552, which was in force at the time of establis hment of this Panel, only importers who
purchased domestic paddy rice from local producers or who purchased domestic paddy rice or milled
rice from the TMO were eligible to benefit from the tariff quotas for the importation of rice. In other
words, compliance with the domestic purchase re quirement was a necessary condition to benefit from
access to the TRQ. Purchase of like imported rice did not grant the same benefit.
7.234 In our view, as mentioned above, the domestic purchase requirement modified the conditions
of competition in the Turkish market to the detriment of imported rice. The purchase of domestic rice
accorded an advantage that the pur chase of the like imported product did not, i.e., the option to buy
imported rice at reduced tariff rates.
7.235 We note that its 1958 report on Italy – Agricultural Machinery, a GATT Panel found that the
provision by the Italian government of certain faciliti es (special and more favourable credit terms) to
the purchasers of Italian tractors and other agricultura l machinery, facilities that were not available to
the purchasers of imported agricultural machinery was inconsistent with Article III:4 of the GATT.
The Panel added that:
"The selection of the word 'affecting' [in Article III:4] would imply... that the drafters
of the Article intended to cover in para graph 4 not only the laws and regulations
which directly governed the conditions of sale or purchase but also any laws or
regulations which might adversely modify the conditions of competition between the
domestic and imported products on the internal market..."
553
7.236 The Panel notes that the parties hold contrasting views on the economic attractiveness for an
operator in Turkey to import rice under the TRQs. The United States has argued that, because of the
high prices of the domestic rice that had to be boug ht in order to opt for an import licence under the
TRQs, "the large cost associated with domestic pur chase more than offsets any alleged cost savings
resulting from the preferential rates of duty realized by importers under the TRQ". 554 In its opinion,
the only reason why Turkish operators opted for importing rice under the TRQs was because the
Turkish government was not allowing the importation of rice at MFN rates.
7.237 Turkey has rejected this argument and contended that "the [tariff quota] system was voluntary
and conferred an advantage to the importers meeting the requirements stipulated in the legislation...
[T]he high volumes of in-quota imports and the high numbers of licences which [were] issued are
testimony to the attractiveness and appeal that the tariff advantage has had in the business
determinations made by individua l rice importers. This in-quota advantage has always existed in
parallel to the ability to import at the less advantageous MFN rates of duty."
555
7.238 In our view, however, the most important consideration is that, through the contested measure
(the domestic purchase requirement), the purchase of Turkish domestic rice granted to operators in
Turkey an option that the purchase of like imported rice did not, i.e., the option to import rice at
reduced tariff rates. The fact that purchase of domes tic rice gave that option to operators in Turkey,
an option that would not accrue from the purchase of like imported rice, is in itself a benefit that

552 Application of Tariff Quota for the Importation of Some Species of Paddy Rice and Rice , Decree
No. 2005/9315, published in Turkey's Official Gazette No. 25,935, dated 13 September 2005, in exhibits TR-9
and US-10.
553 GATT Panel Report on Italy – Agricultural Machinery, para. 12.
554 United States' opening statement at the first substantive meeting, para. 32.
555 Turkey's statement at the first substantive meeti ng, paras. 22-23. See also Ibid., para. 30, and

modified the conditions of competition in the Turkish market to the detriment of imported rice. This
is irrespective of whether operators ultimately f ound it economically advantageous or not to import
rice under the TRQs.
7.239 Turkey's repeated argument that the TRQs pr ovided a significant advantage to operators, by
allowing them to purchase imported rice at lower cost s does not alter our conclusion. If anything, it
confirms that the domestic purchase requirement a ltered the competitive conditions between domestic
and imported rice by making this advantage conditional on the purchase of domestic rice.
7.240 Accordingly, we conclude that the domestic purchase requirement resulted in less favourable
treatment for imported rice than for like domestic rice, within the meaning of Article III:4 of the
GATT 1994.
(iv) Conclusion
7.241 For the reasons indicated, the Panel concludes that, through the requirement that importers
must purchase domestic rice, in order to be allowe d to import rice at reduced-tariff levels under the
tariff quotas, Turkey accorded less favourable treatme nt to imported rice than that accorded to like
domestic rice. This measure was therefore inconsistent with Article III:4 of the GATT 1994.
6. Claim under Articles XI:1 of the GATT 1994 and 4.2 of the Agreement on Agriculture
(a) Arguments of the parties
7.242 In addition to its claim that the domestic purch ase requirement was an internal measure that
accorded less favourable treatment to imported rice than to the like domestic product, the United
States has also made the claim that this measure was "an additional import restriction... inconsistent
with Article XI:1 of the GATT 1994 and Article 4.2 of the Agriculture Agreement".
556
7.243 With respect to Article XI:1 of the GATT 1994, the United States has argued that:
"To the extent Turkey's domestic purchase requirement is not viewed as a 'law,
regulation or requirement' within the m eaning of Article III, this requirement
breaches Article XI:1 of the GATT 1994, because it is a 'restriction... on importation'
within the meaning of Article XI:1."
557
7.244 In the United States' view:
"[T]he domestic purchase requirement, on its face, imposes a substantial restriction
on imports of rice. Importation under the TRQ regime cannot be realized unless an
importer purchases large quantities of domes tic rice and presents proof of such
purchases from TMO to FTU. The TRQ regime constitutes a discretionary import
licensing system, because receiving a license to import under the TRQ is non-
automatic; rather, importation under the TR Q is conditioned on domestic purchase.
Further, the Turkish regulations have not always specified the amount of rice that
would need to be procured in order to receive a portion of the quota, which has
rendered importers completely unable to ship at times, or at best, has left them in a
state of considerable uncertainty as to how much domestic rice they would need to
procure from TMO, Turkish producers, or Tu rkish producer associations in order to

556 United States' rebuttal, para. 4.

bring their shipments of foreign rice into the country. 558 All of these features of the
system make the importation process more burdensome and create serious
disincentives to importation."
559
7.245 Turkey has responded that:
"[T]he allegation that its domestic pur chase requirement imposes, on its face, a
substantial restriction on imports of rice is legally incorrect and not based on
convincing factual evidence. In fact, the TRQ regime, and its DPR system, only
restricted imports in relation to the TR Q trade volumes (i.e., those imported at
preferential rates) and in a strict non-discr iminatory fashion, but never altered or
removed the ability of importers to import unlimited quantities or rice from any origin
at the applied or MFN bound rate. Theref ore, it never resulted in a substantial
restriction on imports of rice."
560
7.246 In Turkey's opinion:
"[T]he allegation by the United States that Turkey's TRQ regime is based on non-
automatic import licensing conditioned upon domestic purchase is legally incorrect
[because] the import licensing regime used to administer the TRQ regime was an
automatic import licensing system and, therefore, not falling within the scope of
GATT Article XI."
561
7.247 The United States has also argued that Turkey's domestic purchase requirement is inconsistent
with Article 4.2 of the Agreement on Agriculture. In its opinion, the domestic purchase requirement
constitutes:
"[A] discretionary import licensing system and [a] non-tariff [measure] maintained
through [a] state-trading [enterprise]. FTU will only grant a license to import rice
under the TRQ to those importers who proc ure large quantities of domestic rice from
TMO, Turkish producers, or Turkish pr oducer associations and who present to FTU
proof of such purchase. As the issuance of licenses is not automatic but contingent
on domestic purchase, Turkey’s maintenance of a domestic purchase requirement to
import under the TRQ constitutes discretionary import licensing.
The domestic purchase requirement is also a non-tariff measure maintained through a
state-trading enterprise, because TMO administers the domestic purchase requirement
aspect of the TRQ. An importer may only import rice under the TRQ if it purchases
rice domestically, including from TMO, which sells rice at prices it announces. In
addition, the importer must obtain proof of such purchase from TMO, which must be
presented to FTU. If an importer does not present that documentation, FTU will not
grant a license to import under the TRQ. Lastly, under the regulations TMO is
permitted to import 50,000 metr ic tons of milled rice in order to help stabilize the
domestic market in the event that prices increase."
562

558 (footnote original) See the April 2004 Decree (Exhibit US-2) and the April 2004 Notification
(Exhibit US-3).
559 United States' first submission, para. 104. See also United States' rebuttal, para. 66.
560 Turkey's first submission, para. 105. See also Tu rkey's statement at the first substantive meeting,
562 United States' first submission, paras. 114-115.

7.248 Turkey has responded that these allegations "must be rejected in that its TRQ regime was not
based on discretionary import licensing and it is no t correct to state that non-tariff measures were
maintained through state trading enterprises".
563 In Turkey's view, its import licensing system for
purposes of allocating the TRQ to traders:
"has always been an automatic import li censing system where approval of import
licenses would be granted in all cases, provided that all application requirements were
met by importers, as provided by Articles 2.1 and 2.2(a)(i) of the Agreement on
Import Licensing Procedures. Since one of the Turkish legal requirements that ' any
person, firm or institution' had to fulfil in order to be issued a license for TRQ
importation was to be in compliance with the domestic purchase requirements..., the
United States has failed to demonstrate its claim that Turkey maintained or resorted to
discretionary import licensing".
564
7.249 In relation to the claim that the domestic pur chase requirement is also a non-tariff measure
maintained through a state-trading enterprise, Turkey has argued that:
"[T]he TMO was only one of the possible providers of domestic rice under the three
categories of the DPR (i.e., paddy producers having permission to plant paddy rice,
their cooperatives and unions or the TMO). Therefore, the United States fails to
prove how the TMO could be in a position to operate non-tariff measures on imports
of TRQ rice."
565
(b) Articles XI:1 of the GATT 1994 and 4.2 of the Agreement on Agriculture
7.250 Article XI:1 of the GATT 1994 provides that:
"No prohibitions or restrictions other than duties, taxes or other charges, whether
made effective through quotas, import or export licences or other measures, shall be
instituted or maintained by any contracting party on the importation of any product of
the territory of any other contracting party or on the exportation or sale for export of
any product destined for the territory of any other contracting party."
7.251 In turn, Article 4.2 of the Agreement on Agriculture states that:
"Members shall not maintain, resort to, or revert to any measures of the kind which
have been required to be converted into ordinary customs duties
1, except as otherwise
provided for in Article 5 and Annex 5.
Multilateral Trade Agreements in Annex 1A to the WTO Agreement."

565 Ibid., para. 116.

(c) The Panel's analysis
7.252 The Panel has already determined that the domestic purchase requirement was inconsistent
with Article III:4 of the GATT 1994. In that regard , the Panel has considered the effect that the
measure had on the competitive opportunities between imported rice and the like domestic products.
7.253 Having said that, the Panel agrees that, as noted by the Panel on India – Autos, there may be
cases when a measure can affect both the conditions of competition between imported rice and
domestic products after importation, as well the opportunities for importation:
"[I]t ... cannot be excluded a priori that different aspects of a measure may affect the
competitive opportunities of imports in different ways, making them fall within the
scope either of Article III (where compe titive opportunities on the domestic market
are affected) or of Article XI (where th e opportunities for importation itself, i.e.
entering the market, are affected), or even that there may be, in perhaps exceptional
circumstances, a potential for overlap between the two provisions...
… [T]here may be circumstances in which specific measures may have a range of
effects. In appropriate circumstances they may have an impact both in relation to the
conditions of importation of a product and in respect of the competitive conditions of
imported products on the internal market within the meaning of Article III:4.
566 This
is also in keeping with the well established notion that different aspects of the same
measure may be covered by different provisions of the covered Agreements "567
7.254 In any event, the Panel does not believe that, having found that the domestic purchase
requirement was inconsistent with Article III:4 of the GATT 1994, an additional finding regarding the
same measure as a possible import restriction would be necessary to resolve the matter at issue with
regard to this particular measure.
7.255 Accordingly, under the guidance of the principle of judicial economy, the Panel considers it
unnecessary for the resolution of this dispute to a ddress the United States' claim that the domestic
purchase requirement is an import restriction inc onsistent with Article 4.2 of the Agreement on
Agriculture and Article XI:1 of the GATT 1994. Therefore, the Panel refrains from making any
findings with respect to these two provisions.
7. Claim under the TRIMs Agreement
(a) Arguments of the parties
7.256 In its request for the establishment of the Panel, the United States advanced the claim that the
domestic purchase requirement was also inconsistent with Article 2.1 and paragraph 1(a) of the Annex
to the TRIMs Agreement.568 Throughout the proceedings, the United States presented its claim under
the TRIMs Agreement independently from its cl aims against the same measure under other
agreements (most notably, under Articles III:4 and XI:1 of the GATT 1994).

566 (footnote original) The Panel notes that the TRIMS Agreement Illustrative List envisages measures
relating to export requirements both in the context of Artic le XI:1, as noted above in the context of our analysis
under Article XI:1, and in the context of Article III:4 of the GATT 1994, by listing as inconsistent with that
provision measures which require "that an enterprise's pu rchases or use of imported products be limited to an
amount related to the volume or value of local products that it exports" TRIMS Illustrative List, Item 1 (b).
567 Panel Report on India - Autos , paras. 7.224 and 7.296. See also the European Communities' third
party submission, para. 28, and the European Communities' statement at the third party session, para. 4.
568 Request for the Establishment of a Panel by the United States, Turkey – Rice , 7 February 2006,
WT/DS334/4, page 3.

7.257 Turkey has responded that, inasmuch as the Unite d States' claim under the TRIMs Agreement
was based on the assumption that the domestic purch ase requirement was in breach of Article III:4 of
the GATT 1994 and, since in Turkey's view that breach had not been dem onstrated, the claim under
the TRIMs Agreement should likewise be rejected.
569 Turkey added that "the correct methodology for
interpretation of the TRIMs Agreement should requ ire a preliminary assessment of the existence of
both the trade and the investment elements of an alleged TRIM". 570 In its view, its "domestic
purchase requirement is not ... a trade-related invest ment measure ... [since] nothing in its expired
TRQ legislation revealed or even implied 'i nvestment objectives' and it had no relation with
investment".571
7.258 At a late stage in the proceedings, when unde r the Panel's working procedures parties were
invited to comment on each other's responses to qu estions after the second substantive meeting, the
United States suggested that, "if the Panel [found] that Turkey has breached Article III:4 of the GATT
1994 by instituting a domestic purchase requirement, it need not make a finding under Article 2.1 and
paragraph 1(a) of Annex 1 of the TRIMs Agreement".572
(b) The Panel's analysis
7.259 The Panel has already determined that the domestic purchase requirement was inconsistent
with Article III:4 of the GATT 1994. Since the Unite d States suggested that, if the Panel were to
make such a finding, it need not make an additiona l finding under Article 2.1 and paragraph 1(a) of
Annex to the TRIMs Agreement, the Panel will not address this claim.
8. Recommendations
(a) Arguments of the parties
7.260 Turkey has stated that "the legislative framework providing for the TRQ regime, including the
domestic purchase requirement, is no longer in force". 573 Based on this statement, it has requested
that, "should this Panel consider [it] necessary fo r the positive solution of the dispute [to make any
finding on the TRQ regime and its domestic purch ase requirement, that it] refrain from making any
recommendations on this matter".574
7.261 In response, the United States has disagreed th at the measure is no longer in force and has
argued that, in any event, the Pa nel should not refrain from making recommendations. It has stated
that the legislative framework that provided for the establishment of tariff quotas, namely, Decree
No. 95/6814 of 30 April 1995 on Surveillance and Safeguard Me asures for Imports and
Administration of Quotas and Tariff Quotas and Decree No. 2004/7333 of 10 May 2004 on the
Administration of Quotas and Tariff Quotas , is still in force. 575 The United States added that, "given
the number of unpublished documents that the Governme nt of Turkey issues with respect to the rice
trade"576 and the fact that the TRQs have expired before and then been reopened on previous
occasions577, in its view it is "critical for achieving a definitive resolution of this matter", not only that

569 Turkey's first submission, paras. 112-113.
570 Turkey's response to question 75.
571 Turkey's response to question 75.
572 United States' comments on Turkey's responses to question 151, para. 63.
574 Turkey's rebuttal, para. 37. See also Turkey's first submission, paras. 6 and 139, Turkey's statement
at the first substantive meeting, para. 39, and Turkey's rebuttal, paras. 40, 44 and 45. See also European
575 United States' response to question 22, para. 46.
576 Ibid., para. 47.
577 United States' response to question 18, para. 37.

the Panel make findings with regard to the measur e, but "that it also issue recommendations that
Turkey bring its measures into conformity with its WTO obligations".578
7.262 The United States has argued that:
"If the Panel were to find that the domestic purchase requirement is inconsistent with
WTO rules but did not recommend that Turkey bring its measure into compliance
with such rules, Turkey could re-impo se a domestic purchase requirement and then
claim before a WTO compliance panel... that the panel would not have jurisdiction to
make findings on the consiste ncy of that measure with WTO rules because it was not
a 'measure taken to comply' under Article 21.3 ( sic) of the DSU... [W]ould such a
development be helpful for resolving the di spute between the parties? [T]he United
States... submits that the answer is 'no'."579
7.263 In the United States' view, the Panel's manda te is, not only to make findings, but also
recommendations "with respect to the measures as th ey existed when this Panel was established". 580
The United States argues that:
"This interpretation is borne out by the text of the DSU, past panel reports cited by
both Turkey and the United States, and the Appellate Body report in Dominican
Republic Cigarettes."581
7.264 Asked by the Panel, the United States subsequently stated that, in Dominican Republic –
Import and Sale of Cigarettes, the Appellate Body had disagreed with the Panel's determination to:
"[make] an adverse finding with respect to the Dominican Republic's Selective
Consumption Tax, which existed on the date of panel establishment, but which was
subsequently modified [but to decide] not to make a recommendation to the DSB that
the Dominican Republic bring the measure into conformity with WTO rules, on the
grounds that the measure was no longer in force".
582
(b) The Panel's analysis
7.265 Article 19.1 of the DSU states that:
"Where a panel or the Appellate Body concl udes that a measure is inconsistent with a
covered agreement, it shall recommend that the Member concerned 583 bring the
measure into conformity with that agreem ent.[Footnote omitted] In addition to its
recommendations, the panel or Appellate Body may suggest ways in which the
Member concerned could implement the recommendations."
7.266 This general rule may be inapplicable when a measure has ceased to exist by the time the
panel issues its recommendation to the DSB. The Panel recalls in this regard the words of the
Appellate Body in US – Certain EC Products:

578 Ibid., para. 47.
579 United States' opening statement at the second substantive meeting, para. 22. See also United
States' response to question 152(a), para. 55.
580 United States' opening statement at the second substantive meeting, para. 20.
581 Ibid.
582 United States' response to question 152(b), paras. 57-58.
583 (footnote original) The "Member concerned" is the party to the dispute to which the panel or
Appellate Body recommendations are directed.

"[T]here is an obvious inc onsistency between the finding of the Panel that 'the 3
March Measure is no longer in existence' and the subsequent recommendation of the
Panel that the DSB request that the Unite d States bring its 3 March Measure into
conformity with its WTO obligations. Th e Panel erred in recommending that the
DSB request the United States to bring into conformity with its WTO obligations a
measure which the Panel has found no longer exists."
584
7.267 The measure challenged by the United States is th e requirement, in force at the time of the
establishment of this Panel, contained in Decree 2005/9315 of 10 August 2005 on the Application of
Tariff Quota for the Importation of Some Species of Paddy Rice and Rice 585, by which, in order to
import specified quantities of rice at reduced tariff levels under the TRQs, importers had to purchase
specified quantities of domestic rice, from the TM O, from Turkish producers, or from producer
associations.
7.268 In accordance with the terms of Decree 2005/ 9315, the most recent tariff quota for the
importation of rice was in force from 1 November 2005 to 31 July 2006. The Panel has already noted
that, despite the United States' arguments about th e likelihood that Turkey may reintroduce a TRQ
regime for the importation of rice, and with it a domestic purchase requirement, the Panel must not
lightly assume that Turkey will not abide by its decl aration that "it will no longer have recourse to the
TRQ system".
586 Indeed, as stated by the Panel on Argentina – Textiles and Apparel , panels "must
assume that WTO Members will perform their treaty ob ligations in good faith, as they are required to
do by the WTO Agreement and by international law."587
7.269 We do not find, from the Appellate Body's report in Dominican Republic – Import and Sale of
Cigarettes, support for the United States' request that we make a specific recommendation regarding
an expired measure. In that case, the Panel noted that the amendments introduced by the Dominican
Republic to its Selective Consumption Tax, in the course of the panel's proc eedings, had changed the
essence of the measure. 588 The Panel had found that, in sever al aspects, the measures challenged in
that case, related to the Selective Consumption Tax, were inconsistent with obligations in the covered
agreements, but did "not find it a ppropriate to recommend to the WTO Dispute Settlement Body that
it make any request to the Dominican Republic regarding this [amended] measure".589
7.270 In its report, the Appellate Body did not reverse any of the Panel's conclusions. 590 W i t h
regard to a particular measure that had b een modified during the appellate review, and not in the
course of the panel's proceedings, th e Appellate Body noted that both participants had agreed that the
measure had been altered through a new decree in October 2004.591 The Appellate Body then went on
to note that both participants had nevertheless as ked for it "to rule on the WTO-consistency of the
original measure". In view of the above, in its report, the Appellate Body:
"[R]ecommend[ed] that the Dispute Settlement Body request the Dominican
Republic to bring the tax stamp requirement , found in [that] Report and in the Panel
Report as modified by [that] Report to be inconsistent with the GATT 1994, into

584 Appellate Body Report on US – Certain EC Products, para. 81.
585 Application of Tariff Quota for the Importation of Some Species of Paddy Rice and Rice , Decree
No. 2005/9315, published in Turkey's Official Gazette No. 25,935, dated 13 September 2005, in exhibits TR-9
and US-10.
586 Turkey's response to question 82.
587 Panel Report on Argentina – Textiles and Apparel, para. 6.14.
588 Panel Report on Dominican Republic – Import and Sale of Cigarettes , paras. 7.361 and 7.362. See
also Ibid., paras. 7.391 and 7.417.
589 Ibid., para. 7.363. See also Ibid., paras. 7.393 and 7.419.
590 Appellate Body Report on Dominican Republic – Import and Sale of Cigarettes, para. 128.
591 Ibid., para. 129.

conformity with its obligat ions under that Agreement if, and to the extent that, the
said modifications to the tax stamp regime have not already done so."592
7.271 In other words, and contrary to what the United States has argued, in its report, the Appellate
Body did not reverse the Panel's decision to refrain from making a recommendation to the DSB
regarding an expired measure. Rather, the Appella te Body modified a recommendation that the Panel
had made concerning a different measure, because this measure had been modified during the
appellate review. If anything, we find support in that case to the proposition that there is generally no
need for a panel to recommend that the DSB request the responding party to bring into conformity
with its WTO obligations a measure which the pane l has found no longer exists and which that party
has declared does not have the intention to reintroduce.
7.272 For the reasons cited above, we note that the domestic purchase requirement challenged by
the United States has expired and that Turkey h as declared its intention not to reintroduce the
measure. Accordingly, we do not believe that th ere is any need for the Panel to recommend to the
DSB that it make any request to Turkey in this regard.
D. CLAIMS AGAINST THE DOMESTIC PURCHASE REQUIREMENT IN CONJUNCTION WITH THE
DENIAL OR FAILURE TO GRANT LICENCES TO IMPORT RICE AT OR BELOW THE BOUND RATE OF
DUTY
1. The United States' claims
7.273 In addition to its claims against the domestic purchase requirement and against the denial or
failure to grant licences to import rice at or below th e bound rate of duty, considered individually, in
its request for the establishment of a Panel, the Un ited States also raised claims against both measures
considered jointly. The United States stated that these measures are inconsistent with:
"Article XI:1 of the GATT 1994 because Turkey's domestic purchase requirements,
in conjunction with its denial of, or failu re to grant, import licenses for rice at or
below the bound rate of duty, constitute restri ctions on imports other than in the form
of duties, taxes, or other charges;
Article 4.2 of the Agriculture Agreem ent because Turkey's domestic purchase
requirements, in conjunction with its denial of, or failure to grant, import licenses for
rice at or below the bound rate of duty, are 'measures of the kind which have been
required to be converted into ordinary customs duties,' such as quantitative import
restrictions, discretionary import licen sing, and non-tariff measures maintained
through a state-trading enterprise, which Members may not resort to or maintain
under that Agreement... [and]
Article 1.6 of the Import Licensing Agreemen t because applicants are not provided a
reasonable period of time for submitting appli cations and because applicants have to
approach more than one administrative body in connection with their applications".593
7.274 In the course of the proceedings, the United States stated that:
"Turkey's TRQ regime, under which it requires that importers purchase significant
quantities of domestic rice as a condition fo r receiving a license to import rice,

592 Ibid. (emphasis added).
593 Request for the Establishment of a Panel by the United States, Turkey – Rice , 7 February 2006,
WT/DS334/4, page 4.

coupled with Turkey's denial of Certificates of Control at the rates of duty set out in
Turkey's domestic schedule or in its WTO Schedule constitutes a prohibition or
restriction for purposes of Article XI:1. Each component of Turkey's import licensing
system – the TRQ regime and the denial of Certificates of Control outside that regime
– is inconsistent with Article XI:1 operati ng independently, as previously described.
In addition, the two components also give rise to a breach of Article XI:1 acting in
conjunction...
Turkey's import licensing regime, comprised of (1) the TRQ requiring domestic
purchase for under-quota imports and (2) the denial of import licenses for any imports
at the rates of duty set out in Turkey's domestic schedule or even in its WTO
Schedule, also constitutes a breach of Article 4.2 of the Agriculture Agreement. The
United States already has established that both aspects of Turkey's import licensing
regime are inconsistent with Article 4.2 of the Agriculture Agreement. The domestic
purchase requirements under the TRQ constitute discretionary import licensing and
non-tariff measures maintained through stat e-trading enterprises, which are measures
set out in footnote 1 to Article 4.2. And Turkey's denial of Certificates of Control
outside the TRQ constitutes a quantitative im port restriction and discretionary import
licensing, which also are measures set forth in footnote 1. Furthermore... Turkey's
import licensing regime as a whole is inconsistent with GATT Article XI:1's ban
regarding prohibitions or restrictions on importation. Because Article 4.2 of the
Agriculture Agreement prohibits Members from employing quantitative import
restrictions and discretionary import licensing in place of ordinary customs duties, the
two measures operating in conjunction are necessarily in breach of Article 4.2."
594
7.275 Throughout the Panel's proceedings, the United States made only one mention to its claim
under Article 1.6 of the Import Licensing Agreement. In response to a question from the Panel after
the second substantive meeting, the United States stated that:
"Article 1.6 of the Import Licensing Agreement requires that '[a]pplication
procedures ... shall be as simple as possible. ' It further provides that '[a]pplicants
shall have to approach only one administrative body in connection with an
application. Where it is strictly indi spensable to approach more than one
administrative body, applicants shall not need to approach more than three
administrative bodies.' As previously d escribed by the United States, the rice
importation process in Turkey is far from si mple. This highly cumbersome system
would certainly be less so if the domestic purchase and Control Certificate
requirements were eliminated. Further, the United States has demonstrated that
multiple Turkish agencies are collecting th e same customs-related information from
importers, and that MARA’s collection of this information serves neither a customs
nor an SPS purpose. Accordingly, it is not 'strictly indispensable' that applicants
approach more than one Turkish agency in order to import rice. Even if it were,
Turkey requires that importers approach four agencies, which is more than the Import
Licensing Agreement permits under the 'strictly indispensable' exception."
595

594 United States' first submission, paras. 120-125.
595 United States' response to question 131(b), para. 21.

2. Response from Turkey
7.276 In response to the United States' claim, Turkey has stated that:
"[T]here is no de jure or de facto 'denial' of approval of Certificates of Control in
breach of GATT Article XI... Certificates of Control are not 'import licenses' but
administrative forms relevant for ' customs purposes ', which are aimed at ensuring
compliance with legitimate objectives ... MF N trade in rice has effectively occurred
throughout the operation of the TRQ regime.
It does not correspond to the reality of facts to claim... that importers of rice were
forced to import through the TRQ regime. In addition, it is also misleading to
affirm... that the TRQ regime was less a dvantageous for importers and that 'no
economically rational importer' would have chosen it if given the option to import at
the MFN rates... [E]ven for an importer of rice coming from the United States, the
TRQ did provide a substantial advantag e, in spite of the domestic purchase
requirement...
Turkey rejects the claim by the United States that a legal or operational link between
the legislative framework that provides fo r the TRQ regime and the one regulating
MFN trade would aim at seriously restric ting market access. There is no prohibition
or restriction connected with either the Certificates of Control or Turkey’s TRQ
regime. There are no discretionary import licensing procedures. There are no
seasonal bans. Therefore, none of these instruments has ever acted, either
individually or in combination with one anot her, to deter full utilization of the quotas
opened within the TRQ regime or to prohibit or restrict MFN trade ...
[For the reasons above], there cannot be ' discretionary import licensing ' and/or
'quantitative import restrictions ' within the meaning of Article 4.2 of the Agreement
on Agriculture and footnote 1 thereof ...
Turkey rejects the claim by the United States that the 'TRQ requiring domestic
purchase for under-quota imports' and the 'denia l of import license for any imports' at
the applied or MFN rates of duty constitute a breach of Article 4.2 of the Agreement
on Agriculture. This never occurred both in relation to the individual instruments and
what the United States claim was their joint operation."
596
3. Provisions invoked by the United States
7.277 As noted above 597, in its claims raised jointly agai nst the domestic purchase requirement and
against the denial or failure to grant licences to im port rice at or below the bound rate of duty, the
United States has invoked the following three provisions of the WTO covered agreements:
Article XI:1 of the GATT 1994, Article 4.2 of the Agreement on Agriculture and Article 1.6 of the
Import Licensing Agreement. The first two provisi ons have been cited extensively throughout this
report.
598 In turn, Article 1.6 of the Import Licensing Agreement states that:
"Application procedures and, where applicable, renewal procedures shall be as simple
as possible. Applicants shall be allowe d a reasonable period for the submission of

596 Turkey's first written submission, paras. 125-127 and 130-131. See also Turkey's oral statement
during the first substantive meeting with the Panel, para. 37, and Turkey's response to question 19.
597 See para. 7.273 above.
598 See, for example, paras. 7.51 to 7.138, 7.139 to 7.142, and 7.242 to 7.255 above.

licence applications. Where there is a closi ng date, this period should be at least 21
days with provision for extension in circ umstances where insufficient applications
have been received within this period. A pplicants shall have to approach only one
administrative body in connection with an application. Where it is strictly
indispensable to approach more than one administrative body, applicants shall not
need to approach more than three administrative bodies."
4. Panel's analysis
7.278 As a preliminary matter, we note that in its request for the establishment of a Panel the United
States stated its claim under Article 1.6 of the Im port Licensing Agreement as one of its "Other
Claims Relating to Turkey's Import Regime".
599 The United States did not explicitly state, as it had
done with its claims under Article XI:1 of th e GATT 1994 and Article 4.2 of the Agreement on
Agriculture, that the claim under Article 1.6 of the Import Licensing Agreement was directed at
Turkey's domestic purchase requirements, considered in conjunction with its denial of, or failure to
grant, import licences for rice at or below the bound rate of duty. 600 In any event, the United States
articulated this claim in the course of the Panel' s proceedings as directed against both "the domestic
purchase and [the] Control Certificate requirements". 601 In its comments on the descriptive sections
of the draft report sent to the parties, the United States further confirmed th at this claim should be
considered by the Panel as one against Turkey 's domestic purchase requirements, considered in
conjunction with its denial of, or failure to grant, import licences for rice at or below the bound rate of
duty.602
7.279 The Panel is aware that, as stated by the Panel in Japan – Film:
"[I]t is not implausible that individual measures which do not impair benefits when
considered in isolation, could nonetheless have an adverse impact on conditions of
competition when considered collectively."603
7.280 The situation in the present case is different, how ever, from that analyzed by the Panel in
Japan – Film in the section quoted above. The United States has not argued that certain individual
measures, which when individuall y considered might not have c onstituted a breach of obligations
under the WTO agreements, yet give rise to such a breach when considered in conjunction. The claim
is rather that these measures are in violation of the covered agreements, both considered separately
and in conjunction.
7.281 The Panel has already found that the two meas ures challenged in conjunction by the United
States (namely, the denial or failure to grant licen ces to import rice at or below the bound rate of duty
and the domestic purchase requirement) are each indivi dually inconsistent with Turkey's obligations
under covered agreements.604 In the light of these findings, and u nder the guidance of the principle of
judicial economy, we do not see the need to reach a separate conclusion on these measures considered
jointly, for the resolution of this dispute.

599 Request for the Establishment of a Panel by the United States, Turkey – Rice , 7 February 2006,
WT/DS334/4, page 4.
600 Ibid.
601 United States' response to question 131(b), para. 21.
602 Comments of the United States concerning the draft descriptive part of the Panel's Report, 20 March
2007, page 4.
603 Panel Report on Japan – Film , para. 10.353. Cf. GATT Panel Report on US – Taxes on
Automobiles, para. 5.70.
604 See paras. 7.138 and 7.241 above.

E. THE UNITED STATES' CLAIMS CONCERNING ARTICLES 3.5(A) AND 5.1, 5.2, 5.3, AND 5.4 OF
THE IMPORT LICENSING AGREEMENT
1. The United States' claims
7.282 In its request for the establishment of a panel, under the heading "Other Claims Relating to
Turkey's Import Regime" 605, the United States made inter alia two separate claims concerning
Articles 3.5(a) and 5.1, 5.2, 5.3, and 5.4 of th e Import Licensing Agreement. In particular, the
United States claimed the inconsistency of Turkey's measures listed in the request for establishment of
a panel606 with:
(a) "Article 3.5(a) of the Import Licensi ng Agreement because Turkey has failed to
provide, upon the request of the United States, all relevant information concerning the
administration of Turkey's import licensing regime and the import licenses granted
over a recent period607; and
(b) Articles 5.1, 5.2, 5.3, and 5.4 of the Import Licensing Agreement because Turkey has
failed to notify its import licensing regime for rice"608.
7.283 In its first written submission, the United States linked these two claims, articulating them
jointly in the following way:
"During the consultations, the United St ates requested that Turkey provide
information concerning the issuance of Certif icates of Control at the over-quota rates
of duty and the number of Certificates that had been granted over the last year.
Turkey has not provided this information. Further, in July 2005, the United States
requested that Turkey notify its non-automa tic import licensing regime for rice to the
Import Licensing Committee. 609 Turkey has not done so. Accordingly, Turkey is in
breach of Articles 3.5(a), 5.1, 5.2(a), (b), (c), (d), (e), (g), and (h), 5.3, and 5.4 of the
Import Licensing Agreement."
610
2. Turkey's response
7.284 In response, Turkey addressed these two claims jointly under the same heading in its first
written submission. Turkey did not explicitly refu te the claims advanced by the United States
concerning non-compliance with the relevant re quirements of the Import Licensing Agreement;
rather, Turkey disputed the applicability of those requirements in the case at hand.
7.285 In regard to the claim by the United States c oncerning Article 3.5(a) of the Import Licensing
Agreement, Turkey argued that:
"Certificates of Control are not 'import licenses' within the meaning of the Agreement
on Import Licensing Procedures. Therefore, th e obligation under Article 3.5(a) of the

605 Request for the Establishment of a Panel by the United States, Turkey – Rice , 7 February 2006,
WT/DS334/4, page 4.
606 Request for the Establishment of a Panel by the United States, Turkey – Rice , 7 February 2006,
WT/DS334/4, pages 1-2.
607 Claim 20 in Ibid., page 4.
608 Claim 21 in Ibid., page 4.
609 (footnote original) G/LIC/Q/TUR/3 ( 25 July 2005).
610 United States' first submission, para. 127. See also Ibid., para. 5, and Turkey's rebuttal, paras. 5 and
82, and United States' response to question 139, para. 32.

Agreement on Import Licensing Procedures does not apply to its Certificates of
Control."
611
7.286 As to the claim by the United States concerni ng Article 5 of the Import Licensing Agreement,
Turkey maintained that:
"Similarly, ... the licensing procedures envi saged under the TRQ regime belong to an
automatic import licensing system within the meaning of the Agreement on Import
Licensing Procedures. Therefore, Turkey’s import licensing system within the TRQ
regime is not subject to the notifica tion requirements under Article 5 of the
Agreement on Import Licensing Procedures."612
3. The Panel's analysis
7.287 The Panel notes that the Panel on Canada – Dairy refrained from assessing the United States'
claims under Article 3 of the Import Licensing Agreement, stating that:
"Since we have found above that the two acce ss restrictions imposed by Canada with
respect to its tariff-rate quota for fluid milk are contrary to Canada's obligations under
Article II:1(b) of GATT 1994, we see no need to examine whether in so doing
Canada also violates Article 3 of the Licensing Agreement."613
7.288 The Panel notes the similarities of Canada – Dairy with the present case. The Panel in the
case at hand has already found that Turkey's denial or failure to grant Certificates of Control to import
rice outside of the tariff rate quota substantively viol ated Article 4.2 of the Agreement on Agriculture.
Further, in Canada – Dairy one of the arguments the United States made under the Import Licensing
Agreement related to a transparency obligation in Articl e 3.5(a)(iv) of that Agreement. In that regard,
in Canada – Dairy the United States argued, similar to the case at hand, that the respondent:
"[H]ad failed in its obligation under Article 3.5(iv) to provide information respecting
the value and volume of fluid milk within the tariff-rate quota. This data was
requested by the United States during c onsultations in November 1997, and
[the respondent] advised that such info rmation had not been developed despite
assurances in earlier consultations that the data would be made available.[Footnote
omitted]"614
7.289 The Panel notes, in this context, that the Panel on Canada – Dairy exercised judicial economy
through the above-cited passage in regard to a ll claims of the United States under the Import
Licensing Agreement, including the transparen cy claim of the United States pursuant to
Article 3.5(iv) of that Agreement. 615 Further, the Panel notes that both sets of relevant provisions
invoked jointly by the United States in the case at ha nd, namely Article 3.5(a) of the Import Licensing
Agreement, on the one hand, and Articles 5.1, 5.2(a), (b), (c), (d), (e), (g), and (h), 5.3, and 5.4 of the
same Agreement, on the other hand, set out transparen cy obligations, which – similar to Article 3.5(a)
of the Import Licensing Agreement – ultimately serve to provide information to other Members.
7.290 Indeed, Article 3.5(a) of the Import Licensing Agreement stipulates that:

613 Panel Report on Canada – Dairy, para. 7.157.
614 Ibid., para. 4.514.
615 See in particular the heading above para. 7.157. of the Panel Report on Canada – Dairy :
"The Licensing Agreement".

"(a) Members shall provide, upon the request of any Member having an interest in
the trade in the product concerned, all relevant information concerning:
(i) the administration of the restrictions;
(ii) the import licences granted over a recent period;
(iii) the distribution of such licences among supplying countries;
(iv) where practicable, import statistic s (i.e. value and/or volume) with
respect to the products subject to import licensing. Developing
country Members would not be expected to take additional
administrative or financial burdens on this account".
7.291 In turn, Articles 5.1, 5.2(a), (b), (c), (d), (e), (g), and (h), 5.3, and 5.4 of the Import Licensing
Agreement provide that:
"1. Members which institute licensing pro cedures or changes in these procedures
shall notify the Committee of such within 60 days of publication.
2. Notifications of the institution of import licensing procedures shall include
the following information:
(a) list of products subject to licensing procedures;
(b) contact point for information on eligibility;
(c) administrative body(ies) for submission of applications;
(d) date and name of publication where licensing procedures are
published;
(e) indication of whether the licensing procedure is automatic or non-
automatic according to definitions contained in Articles 2 and 3;

(g) in the case of non-automatic import licensing procedures, indication
of the measure being implemented through the licensing procedure;
and
(h) expected duration of the licensing procedure if this can be estimated
with some probability, and if not, reason why this information cannot
be provided.
3. Notifications of changes in import licensing procedures shall indicate the
elements mentioned above, if changes in such occur.
4. Members shall notify the Committee of the publication(s) in which the
information required in paragraph 4 of Article 1 will be published."
7.292 In the light of the above, like the Panel on Canada – Dairy , this Panel sees no need to
examine whether, through its decision, from Sept ember 2003 and for different periods of time, to

deny or fail to grant licences to import rice at or below the bound rate of duty, Turkey also violates
Article 3.5(a) of the Import Licensing Agreement and, following a similar and related logic, there is
no need to examine whether Turkey also violates Articles 5.1, 5.2(a), (b), (c), (d), (e), (g), and (h), 5.3,
and 5.4 of the Import Licensing Agreement.
F.
THE ADMINISTRATION OF TARIFF RATE QUOTAS
1. The United States' claim
7.293 In its request for the establishment of a Panel, in addition to other claims, the United States
stated that Turkey was acting inconsistently with:
"Article 3.5(h) of the Import Licensing Agreement because Turkey administers its
[tariff-rate quotas on rice] in such a wa y as to discourage the full utilization of
quotas".616
7.294 In its first submission, the United States articulated this claim in the following manner:
"Turkey ensures that the full amount of the quotas cannot be reached by setting the
domestic purchase requirement so high that the entire Turkish domestic production of
rice would be purchased by importers befo re the in-quota amount was reached. For
example, Turkish paddy rice production w as 415,000 metric tons in 2004 and
500,000 metric tons in 2005. 617 The maximum amount of paddy rice that could be
imported under the TRQ was 500,000 metric tons. 618 Yet, in almost every instance,
an importer seeking to import rice under the TRQ is required to purchase a larger
quantity of domestic rice than the amount of rice it wants to import. Put simply, even
if importers purchased every grain of rice in Turkey, they would not approach the
500,000 metric ton limit on paddy rice imports.
Further, the high cost of domestic purchase makes importing under the TRQ much
more expensive to the importer, who is likely a miller, than simply procuring rice
domestically, and hence discourages the full utilization of the TRQ."
619
2. Response from Turkey
7.295 In response to the United States' claim, Turkey has stated that:
"Article 3.5(h) of the Agreement on Import Licensing Procedures applies to ' non-
automatic import licensing'...
Turkey’s import licensing system for purposes of allocating the TRQ to traders has
always been, while it was in force, an automatic import licensing system...
[O]n the basis of these legal considerations and factual evidence, it appears clear that
Turkey's import licensing system for pur poses of allocating the TRQ to traders was
automatic and has never resulted in the disc ouragement of full utilization of quotas.

616 Request for the Establishment of a Panel by the United States, Turkey – Rice , 7 February 2006,
WT/DS334/4, page 3.
617 (footnote original) Exhibit US-45.
618 (footnote original) Exhibits US-5 and US-10.
619 United States' first submission, paras. 118-119. S ee also Ibid., para. 123, United States' response to
questions 72 and 77(a), paras. 110-112 and 121, United States' oral statement during the first substantive
meeting, paras. 32-37, and Exhibit US-52.

In any event, it should be noted that, ra ther than discouraging full utilization of
quotas, Turkey extended twice in 2005 the deadlines for application of import license
within the TRQ opened between 1 November 2004 and 31 July 2005. This appears to
be clear and convincing evidence that Turk ey did not intend to discourage full
utilization of the quotas.
For these reasons, the claim by the United States under Article 3.5(h) of the
Agreement on Import Licensing Procedures must be rejected."
620
7.296 In response to the United States ' assertion that Turkey allegedl y ensured that the full amount
of the quotas could not be reached by setting the domestic purchase requirement so high that the entire
Turkish domestic production of rice would have to be purchased by importers before the in-quota
amount was reached, Turkey submitted that:
"[T]he total amount of the tariff quota was determined on the basis of the production
projections of each year and the convers ion coefficients indicated in related
Communiqués."621
7.297 In addition, as a claim linked to the domestic purchase requirement imposed by Turkey with
respect to the tariff rate quotas for the importati on of rice, the United States' claim regarding the
alleged discouragement of the full utilization of qu otas falls under the request advanced by Turkey
that, since its "TRQ regime and its related import licensing procedures are no longer in force":622
"[T]he Panel [should] either refrain from making findings on the measures related to
Turkey's TRQ regime as no longer in for ce, or, should the Panel consider making
these findings necessary for purposes of secu ring a positive solution to the dispute,
not to make any recommendation to the Dispute Settlement Body."623
3. Article 3.5(h) of the Import Licensing Agreement
7.298 Article 3.5(h) of the Import Licensing Agreement reads:
"[W]hen administering quotas, Members shall not prevent importation from being
effected in accordance with the issued licences, and sh all not discourage the full
utilization of quotas".
4. Panel's analysis
7.299 The United States' claim under Article 3.5(h) of the Import Licensing Agreement is linked to
the operation of the domestic purchase requirement impos ed by Turkey with respect to the tariff rate
quotas for the importation of rice. As articulated by the United States, the alleged discouragement of
the full utilization of quotas would occur through the determination of the ra tio of the domestic rice
which had to be purchased and rice which c ould be imported, unde r the domestic purchase
requirement, depending on Turkey's estimated domestic production of rice.

620 Turkey's first written submission, paras. 119-123. See also Ibid., paras. 2, 106 and 108, Turkey's
oral statement during the first subs tantive meeting with the Panel, para. 38, and Turkey's response to
question 16.
621 Turkey's response to question 72.
622 Turkey's first written submission, para. 4.
623 Ibid., para. 139.

7.300 It follows that the domestic purchase requirement is a necessary element of the measure that
has been challenged by the United States under this specific claim. Without this requirement, the
alleged discouragement of the full utilization of quotas claimed by the United States would disappear.
7.301 The Panel recalls that the domestic purchase requirement has already been found to be
inconsistent with Article III:4 of the GATT 1994, because it resulted in less favourable treatment to
imported rice than that accorded to like domestic rice.
624 Therefore, under the guidance of the
principle of judicial economy, the Panel considers that addressing the claim under Article 3.5(h) of the
Import Licensing Agreement would be unnecessary for the resolution of this dispute.
G. SPECIAL AND DIFFERENTIAL TREATMENT
7.302 Pursuant to Article 12.11 of the DSU:
"[W]here one or more of the parties is a developing country Member, the panel's
report shall explicitly indicate the form in which account has been taken of relevant
provisions on differential and more-favour able treatment for developing country
Members that form part of the covered ag reements which have been raised by the
developing country Member in the course of the dispute settlement procedures."
7.303 In addition, the DSU provides in Article 12.10 that:
"[I]n examining a complaint against a de veloping country Member, the panel shall
accord sufficient time for the developing c ountry Member to prepare and present its
argumentation."
7.304 The Panel notes that, in the course of these Panel proceedings Turkey did not raise any
specific provisions on differential and more-favourab le treatment for developing country Members
that require particular consideration, nor do we find these specialized provisions relevant for the
resolution of the specific matter brought before this Panel.
7.305 In any event, during the Panel proceedings, the Panel took into account the respondent's status
as a developing country Member, a fact not contested by the complainant, when preparing and
revising the timetable for the process. The Panel attempted, inter alia, to accommodate, to the extent
possible, Turkey's requests for ex tensions of deadlines to submit responses to the questions posed by
the Panel both after the first and second substantive m eetings, as well as Turkey's request for time to
submit comments on the United States comments to the Panel's interim report.
VIII. CONCLUSIONS AND RECOMMENDATION
8.1 The Panel concludes that Turkey's decision, from September 2003 and for different periods of
time, to deny, or fail to grant, Certificates of Cont rol to import rice outside of the tariff rate quota,
constitutes a quantitative import restriction, as well as a practice of discretionary import licensing,
within the meaning of footnote 1 to Article 4.2 of the Agreement on Agriculture. Accordingly, it is a
measure of the kind which have been required to be converted into ordinary customs duties and is
therefore inconsistent with Article 4.2 of the Agreement on Agriculture.
8.2 The Panel recommends that the Dispute Settle ment Body request Turkey to bring the
inconsistent measures as listed above into conformity with its obligations under the WTO agreements.

624 See para. 7.241 above.

8.3 The Panel also concludes that Turkey's requirement that importers must purchase domestic
rice, in order to be allowed to import rice at redu ced-tariff levels under the tariff quotas, accorded less
favourable treatment to imported rice than that accorded to like domestic rice, in a manner
inconsistent with Article III:4 of the GATT 1994.
8.4 As we have noted that the requirement that impor ters must purchase domestic rice, in order to
be allowed to import rice at reduced-tariff levels under the tariff quotas has expired and that Turkey
has declared its intention not to reintroduce th e measure, we abstain from making any specific
recommendation to the DSB in this regard.
8.5 Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. The Panel concludes that , to the extent that the measures listed above are
inconsistent with the WTO agreements, they have nullified or impaired benefits accruing to the
United States under those agreements.