UNITED STATES - COUNTERVAILING DUTY INVESTIGATION ON DYNAMIC RANDOM ACCESS MEMORY SEMICONDUCTORS (DRAMS) FROM KOREA
Document: Notification of an Appeal by the United States under Article 16.4 and Article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and under Rule 20(1) of the Working Procedures for Appellate Review
Date: 1 April 2005
Document codes: WT/DS296/5
Complainant: South Korea
Respondent: U.S.
Third parties: China, Taiwan, EU, Japan
Dispute stage: Appellate Body
Agreements cited: Art. 1, 2, 10, 12, 14, 15, 19, 22, 32  Subsidies and Countervailing Measures (SCM)Art. VI:3  GATT 1994

UNITED STATES - COUNTERVAILING DUTY INVESTIGATION ON
DYNAMIC RANDOM ACCESS MEMORY SEMICONDUCTORS
(DRAMS) FROM KOREA

Notification of an Appeal by the United States

under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 20(1) of the Working Procedures for Appellate Review

 The following notification, dated 29 March 200 5, from the Delegation of the United States, is
being circulated to Members.

 Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate Review, the
United States hereby notifies its decision to app eal to the Appellate Body certain issues of law
covered in the Report of the Panel on United States – Countervailing Duty Investigation on Dynamic
Random Access Memory Semiconductors (DRAMS) from Korea () ("Panel Report") and
certain legal interpretations developed by the Panel in this dispute.

1. The United States seeks review by the Appellate Body of the Panel's legal conclusion that the
determination by the U.S. Department of Commerce ("DOC") of Government of Korea ("GOK")
entrustment or direction of Hynix's Group B and C cr editors is inconsistent w ith Article 1.1(a)(1)(iv)
of the Agreement on Subsidies and Countervailing Measures ("SCM Agreement").
1 This conclusion
is in error and is based on erroneous findings on issu es of law and related legal interpretations. These
erroneous findings include, for example, the findings described below.

 (a) The Panel erroneously interprete d the phrase "entrusts or directs" in
Article 1.1(a)(1)(iv) of the SCM Agreem ent and then applied that erroneous
interpretation to the record evidence.2

 (b) The Panel applied an erroneous "probative and compelling" evidentiary standard that
is not found in Article 1.1(a)(1)(iv) or an y other provision of the SCM Agreement (or
any other covered agreement), and that, inter alia, effectively shifted the burden of
proving a WTO-inconsistent action from Korea to the United States, caused the Panel
to discount the circumstantial evidence relied upon by the DOC, and resulted in the
Panel disregarding certain evidence altogether.
3

1Panel Report, paragraphs 7.175-7.178.
2The Panel's erroneous interpretation is articulated in, inter alia , paragraphs 7.27-7.46 of the Panel
Report, and is applied in subsequent paragraphs, including, inter alia , paragraphs 7.51, 7.56, 7.62-7.63,
7.76-7.78, 7.82-7.91, 7.99-7.104, 7.129-7.130, 7.135, 7.141, 7.155, 7.163-7.168, 7.172-7.174, 7.175-7.178.
3The Panel's erroneous standard of proof is set forth in, inter alia , paragraphs 7.35 and 7.46 of the
Panel Report, and is applied in, inter alia, paragraphs 7.35, 7.45, 7.46, 7.51, 7.76-7.78, 7.99-7.103, 7.129-7.130,
7.141, 7.164, 7.168, 7.173.

 (c) The Panel relied upon evidence that was not on the record of the DOC and that was
contradicted by evidence that was on the DOC record. Such reliance was inconsistent
with the Panel's obligation under Article 11 of the DSU to conduct an objective
assessment of the matter before it.
4

 (d) The Panel failed to consider certain reco rd evidence cited by the United States based
on the Panel's erroneous findings that U.S. reliance on such record evidence
constituted ex post facto rationalizations. These findings are erroneous because
neither the SCM Agreement nor any ot her covered agreement requires an
investigating authority to cite in its pub lished determinations to every piece of
evidence on which the authority relies. In addition, in most instances the DOC, in
fact, had cited to the record evidence that the Panel disregarded. In those instances
where the DOC had not cited to the record evidence disregarded by the Panel, the
evidence was consistent with the record evidence that the DOC had cited. The
Panel's disregard of record evidence was inconsistent with the Panel's obligation
under Article 11 of the DSU to conduct an obj ective assessment of the matter before
it.5

 (e) The standard of review actually applied by the Panel amounted to an impermissible
de novo review of the DOC determination. As noted above in subparagraphs (c)
and (d), the Panel improperly considered non-record evidence and disregarded record
evidence. In addition, instead of looking at the totality of the record evidence, as had
the DOC, the Panel considered each piece of evidence in isolation, ignored and/or
mischaracterized ev idence upon which the DOC relied, and substituted its own
interpretation of the evidence for that of the DOC. The Panel's conduct of a de novo
review was inconsistent with the Panel' s obligation under Article 11 of the DSU to
conduct an objective assessment of the matter before it.6

 (f) The Panel made an erroneous legal finding that the DOC finding of entrustment or
direction under Article 1.1(a)(1)(iv) was not supported by sufficient evidence.7

2. The United States seeks review by the Appellate Body of the Panel's legal conclusion that the
DOC's benefit determination is inconsistent with Article 1.1(b) of the SCM Agreement. This
conclusion is in error and is based on the Panel's erroneous legal conclusion, described in paragraph 1,
above, that the DOC's determination of GOK entr ustment or direction of Hynix's Group B and C
creditors is inconsistent with Article 1.1(a)(1)(iv) of the SCM Agreement.8

3. The United States seeks review by the Appellate Body of the Panel's legal conclusion that the
DOC's finding of specificity is inconsistent with Ar ticle 2 of the SCM Agreement insofar as it relates
to subsidies by Group B and C creditors. This co nclusion is in error and is based on the Panel's
erroneous legal conclusion, described in paragra ph 1, above, that the DOC's determination of GOK

4These errors are contained in, inter alia , paragraphs 7.63, 7.82-7.89, 7.91, 7.152 and 7.155 of the
Panel Report.
5These errors are contained in, inter alia , paragraphs 7.76, 7.88, 7.90, 7.102, 7.105, 7.116, 7.121,
7.125-7.130 and 7.141 of the Panel Report.
6These errors permeate section VII.C. 1 of the Panel Report, but examples of such errors are contained
in, inter alia, paragraphs 7.45, 7.51, 7.56, 7.62-7.63, 7.77-7.7 8, 7.81-7.82, 7.85, 7.89, 7.91, 7.103-7.104, 7.130,
7.146-7.155, 7.164, 7.168, and 7.174 of the Panel Report.
7This finding is set forth in, inter alia, paragraphs 7.175-7.177 of the Panel Report.
8The Panel's findings are contained in paragraphs 7.190-7.191 of the Panel Report.

entrustment or direction of Hynix's Group B and C cred itors is inconsistent with Article 1.1(a)(1)(iv)
of the SCM Agreement.9

4. The United States seeks review by the Appellate Body of the Panel's legal conclusion that,
with respect to the DOC countervailing duty order, Korea's consultation request provides a sufficient
indication of the legal basis of the complaint within the meaning of Article 4.4 of the DSU. This
conclusion is in error and is based on erroneous findings on issues of law and related legal
interpretations.10

9Panel Report, paragraphs 7.204-7.208.
10Panel Report, paragraphs 7.414-7.415.