UNITED STATES – CUSTOMS BOND DIRECTIVE FOR MERCHANDISE SUBJECT TO ANTI-DUMPING/COUNTERVAILING DUTIES
Document: Request for Consultations by India
Date: 12 June 2006
Document codes: WT/DS345/1; G/L/779; G/ADP/D68/1; G/SCM/D71/1
Complainant: India
Respondent: U.S.
Third parties: Brazil, China, EU, Japan, Thailand
Dispute stage: Appellate Body
Agreements cited: Art. 18.1, 1, 2.2, 2.3, 2.4, 7.1, 7.2, 7.4, 7.5, 9.1, 9.2, 9.3, 18.4, 18.5  Anti-dumpingArt. VI:2, VI:3, VI, X:1, X:2, I, II:1, XIII  GATT 1994Art. 32.1, 10, 1, 14, 32.5  Subsidies and Countervailing Measures (SCM)Art. XVI:4  Agreement Establishing the World Trade Organization

UNITED STATES – CUSTOMS BOND DIRECTIVE FOR MERCHANDISE
SUBJECT TO ANTI-DUMPING/COUNTERVAILING DUTIES

Request for Consultations by India

 The following communication, dated 6 June 2006, from the delegation of India to the
delegation of the United States and to the Chairman of the Dispute Settlement Body, is circulated in
accordance with Article 4.4 of the DSU.

 My authorities have instructed me to request consultations with the United States of America
(the "United States") pursuant to Article 4 of the Understanding on Rules and Procedures Governing
the Settlement of Disputes , Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (the
"GATT"), Article 17 of the Agreement on Implementation of Article VI of the General Agreement on
Tariffs and Trade 1994 (the "AD Agreement") and Article 30 of the Agreement on Subsidies and
Countervailing Measures (the "Subsidies Agreement") with r espect to the Customs Bond Directive
99-3510-004 on Monetary Guidelines for Setting Bond Amounts issued on 23 July 1991, as amended
by the Amendment to Bond Directive 99-3510- 004 for Certain Merchandise subject to
Antidumping/Countervailing Duties dated 9 July 2004
1, and any clarifications and amendments
thereof2 (together, the "Amended Bond Directive").

On 27 January 2004, pursuant to Section 732 of the Tariff Act of 1930, as amended (the
"Act"), the United States initiated an anti-dumping inv estigation (the "investigation") with respect to
imports of certain frozen and canned warmwater shrimp
3 from India and certain other countries. On
28 July 2004, pursuant to Section 733 of the Act, the United States preliminarily determined that

1 Posted on the Internet Website of the United States Customs and Border Protection Service at
http://www.cbp.gov/xp/cgov/import/add_cvd/bonds/07082004.xml, as accessed on 26 May 2006.
2 These include, for example, (i) the document entitled "Current Bond Formulas", posted on the
Internet Website of the United States Customs a nd Border Protection Service at http://www.cbp.gov
/linkhandler/cgov/import/communications_to_trade/pilot_program/current_bond.ctt/current_bond.doc, on
9 July 2004, as accessed on 26 May 2006; and (ii) the document entitled "Clarification to July 9, 2004 Amended
Monetary Guidelines for Setting Bond Amounts for Special Categories of Merchandise Subject to Antidumping
and/or Countervailing Duty Cases", posted on the Internet Website of the United States Customs and Border
Protection Service at http://www. cbp.gov/linkhandler/cgov/import/add_cvd/bonds/bond_clarification.ctt/
bond_clarification.doc, as accessed on 26 May 2006.
3 The investigation was initiated pursuant to the Initiation of Antidumping Duty Investigations: Certain
Frozen and Canned Warmwater Shrimp from Brazil, Ecuador, India, Thailand, the People's Republic of China
and the Socialist Republic of Vietnam, 69 Fed. Reg. 3876 (27 January 2004).
WT/DS345/1, G/L/779,
G/ADP/D68/1, G/SCM/D71/1

frozen and canned warmwater shrimp imported from India was being dumped
4 (the "Preliminary
Determination"). On 23 December 2004, the Un ited States published its final determination of
dumping5, which was subsequently amended 6 to include only frozen warmwater shrimp (the "subject
merchandise") and to exclude ca nned warmwater shrimp (the "F inal Determination"). On
1 February 2005, the United States imposed definitive anti-dumping measures and required importers-
of-record in the United States ("importers") to ma ke cash deposits equal to the estimated weighted-
average dumping margins on entries of the subject merchandise from India into the United States.7

 Prior to the Amended Bond Directive, importe rs including those of merchandise subject to
anti-dumping duties or countervailing duties were required to give continuous entry bonds
("continuous bonds") only as general security for compliance with customs regulations. Under the
Amended Bond Directive, however, the United States required importers of categories of merchandise
subject to anti-dumping or countervailing duties that are designated as "Special Categories" to replace
their existing continuous bonds with enhanced conti nuous bonds that would, in addition, cover the
total estimated anti-dumping duties or countervailing duties on the value of imports for the previous
12 months (the "enhanced bond requirement"). At th is time, agriculture and aquaculture merchandise
are the only categories of merchandise designate d as a Special Category under the Amended Bond
Directive. Within this Special Category, shrimp has been designated as a "Covered Case" in which a
different standard or formula for determining th e bond amount will be applied. The designation of
agriculture and aquaculture products as the only Special Category and shrimp as the only Covered
Case emphasizes the arbitrary and discriminatory character of the Amended Bond Directive.

 Pursuant to the Amended Bond Directive, th e United States has imposed the enhanced bond
requirement on importers of the subject merchandise from India.

 The Government of India considers that the Am ended Bond Directive is inconsistent as such
with the provisions of:

(a) Article 18.1 of the AD Agreement together w ith Articles VI:2 of the GATT and Article 1 of
the AD Agreement insofar as th e enhanced bond requirement is a specific action against
dumping not in accordance with the provisions of the AD Agreement and with Article 32.1 of
the Subsidies Agreement together with Artic les VI:3 of the GATT and Article 10 of the
Subsidies Agreement insofar as it is a specifi c action against subsidization not in accordance
with the Subsidies Agreement;

(b) Articles VI:2 and VI:3 of the GATT insofar as it results in charges to importers in excess of
the margin of dumping or in excess of the amount of the subsidy determined to have been
granted, as the case may be;

(c) Note 1 Ad paragraphs 2 and 3 of Article VI of the GATT insofar as the enhanced bond
requirement is unreasonable as security for the payment of anti-dumping duty or
countervailing duty;

4 Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final
Determination, and Negative Critical Circumstances De termination: Certain Frozen and Canned Warmwater
Shrimp from India, 69 Fed. Reg. 47111 (4 August 2004).
5 Notice of Final Determination of Sales at Less Than Fair Value and Negative Final Determination of
Critical Circumstances: Certain Frozen and Canned Warmwater Shrimp from India , 69 Fed. Reg. 76916
(23 December 2004).
6 Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty
Order: Certain Frozen Warmwater Shrimp from India, 70 Fed. Reg. 5145 (1 February 2005).
7 Id.
WT/DS345/1, G/L/779,
 G/ADP/D68/1, G/SCM/D71/1

(d) Articles 7.1, 7.2, 7.4 and 7.5 of the AD Agr eement and Articles 17.1, 17.2, 17.4 and 17.5 of
the Subsidies Agreement to the extent th at the enhanced bond requirement may be
characterized as a provisional measure or is a pplied prior to the imposition of definitive anti-
dumping duties;

(e) Articles 9.2 and 9.3 (including Article 9.3.1) of the AD Agreement and Articles 19.3 and 19.4
of the Subsidies Agreement insofar as the only permissible measure that may be taken after
the imposition of anti-dumping duties pursuant to Article 9.1 or the imposition of
countervailing duties pursuant to Article 19.2, as the case may be, is the collection of duties in
appropriate amounts not exceeding the margin of dumping or the amount of the subsidy found
to exist;

(f) Article 18.4 of the AD Agreement, Artic le 32.5 of the Subsidies Agreement and
Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization
insofar as the United States has failed to comply with its obligation to ensure conformity of its
laws, regulations and administrative procedures with the provisions of each of these
agreements;

(g) Article X of the GATT insofar as the Amended Bond Directive (including any clarifications
and amendments), has not been published in the Federal Register or the Customs Bulletin of
the United States and Article 18.5 of the AD Agreement and Article 32.5 of the Subsidies
Agreement insofar as the Amended Bond Direc tive has made changes in its laws and
regulations and in the administration of its laws and regulations that are relevant to these
agreements and about which the United States has not informed the relevant Committees;

(h) Article II of the GATT insofar as the enhan ced bond requirement results in imposition of
charges in excess of those imposed on the date of the entry into force of the GATT or
mandatorily required by legislation in force on th at date and Article I of the GATT insofar as
the enhanced bond requirement will be applied to imports of agriculture and aquaculture
products designated as Special Ca tegory merchandise from those Members that are subjected
to antidumping or countervailing duties; and

(i) Article XI of the GATT to the extent that the enhanced bond requirement may be
characterized as a restriction other than a duty, tax or other charge and Article XIII of the
GATT to the extent that it is applied in a discriminatory manner.

 For the reasons stated above, the Government of India also considers that the enhanced bond
requirement under the Amended Bond Directive as a pplied to importers of the subject merchandise
from India is inconsistent with Articles I, II, VI:2 (including Note 1 Ad Paragraphs 2 and 3 of
Article VI), XI and XIII of the GATT and Articles 1, 7. 1, 7.2, 7.4, 7.5, 9.2, 9.3, 9.3.1 and 18.1 of the
AD Agreement.

The Government of India reserves its right to ra ise additional factual claims and legal matters
during the course of the consultations.

 We look forward to receiving your reply to the present request and to fixing a mutually
convenient date and venue for consultations.