EUROPEAN COMMUNITIES – CUSTOMS CLASSIFICATION OF FROZEN BONELESS CHICKEN CUTS
Document: Notification of an Appeal by the European Communities 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: 13 June 2005
Document codes: WT/DS269/6; WT/DS286/8
Complainant: Thailand
Respondent: EU
Third parties: Brazil, China, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. II, XXII  GATT 1994

EUROPEAN COMMUNITIES – CUSTOMS CLASSIFICATION OF
FROZEN BONELESS CHICKEN CUTS

Notification of an Appeal by the European Communities
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 13 June 2005, from the Delegation of the European
Commission, is being circulated to Members.

Pursuant to Article 16 of the Understanding on Rules and Procedu res Governing the Settlement of
Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate Review , the European
Communities ("EC") hereby notifies its decision to a ppeal to the Appellate Body certain issues of law
covered in the reports of the Pa nel established in response to the requests from Brazil and Thailand in
the disputes European Communities – Customs Classifica tion of Frozen Boneless Chicken Cuts
(, ) and certain legal inte rpretations developed by the Panel in these
reports.

The European Communities seeks review of:

1) The Panel’s conclusion that “Frozen boneless ch icken cuts that have been impregnated with
salt, with a salt content of 1.2% - 3% (the pr oduct at issue) are covered by the concession
contained in heading 02.10 of the EC Schedule” (para. 8.1(a) of the Panel Reports) and that,
as a consequence, EC Regulation No. 1223/2002 and EC Decision 2003/97/EC result in the
EC imposing customs duties in excess of those pr ovided for in the EC’s Schedule in respect
of products falling under heading 02.10 (para. 8. 1(b) of the Panel Reports) such that the EC
has acted inconsistently with the requirements of Articles II:1(a) and II:1(b) of the GATT
1994 (para. 8.1(c) of the Panel Reports).

2) The Panel’s conclusion is based on several elements of erroneous legal reasoning. Its
ultimate erroneous conclusion is that the term “salted” in heading 02.10 is not based on the
notion of preservation (para. 7.424). It reaches this erroneous conclusion by failing properly
to examine the term “salted” in heading 02.10 in light of the applicable rules of treaty
interpretation. The EC seeks review of all elements of this incorrect examination.

The Panel erroneously applies Article 31 of the Vienna Convention of the Law of Treaties . In
particular, but not necessarily exclusively, the Panel fails properly to apply the notions of:

a) Ordinary meaning (paras. 7.105; 7.114-7.115; 7.117; 7.140-7.151), in particular, by
taking into consideration what the Panel re ferred to as “the factual context for the
consideration of the ordinary meaning”;
b) Context (paras. 7.161-7.163; 7.171-7.173; 7.179-7.180; 7.189; 7.199-7.202; 7.205;
7.241; 7.245 ), in particular by failing to properly examine the immediate context of
the term “salted” in heading 02.10 a nd the relevant aspects of the Harmonised
System;

c) Subsequent practice (paras. 7.251; 7. 253-7.256; 7.265-7.276; 7.284; 7.288-7.290;
7.298-7.299; 7.302-7.303), in particular, by misinterpreting the notion of “subsequent
practice” and by considering that the unilateral “practice”
1 of one party could have a
bearing on a multilaterally agreed text and by wrongly analysing the existence of
“practice” at the EC and multilateral level.

d) Object and purpose of the treaty (paras. 7.316 to 7.328), in particular, the Panel’s
reliance on “security and predictability”.

e) To the extent that the Panel's conclusions are premised on an erroneous assessment of
the facts, the EC seeks review of that assessment pursuant to Article 11 of the DSU.

3) The Panel erroneously applies Article 32 of the Vienna Convention (paras. 7.336 - 7.423). In
particular, but not necessarily exclusively, the Panel fails to examine properly the
circumstances of conclusion (paras. 7.340 et seq.) with a view to establishing the common
intention of the parties to the treaty in the sense that it:

a) wrongly limits its analysis to “the prevai ling situation in the European Communities”
ignoring the prevailing situati on internationally (that is the multilateral context) and
the practice of other Members (para. 7.340; 7.421);

b) develops and applies an erroneous notio n of constructive knowledge (para. 7.346);

c) wrongly analyses prior practice of the Community, relying exclusively on or giving
undue probative value to and misinterpre ting, EC Commission Regulation 535/94,
classification between 1996-2002 and other i rrelevant post-1994 acts as part of the
circumstances of conclusion (paras. 7.359-7.364 7.365-7.370), thereby failing to give
proper consideration to prevailing EC law and practice throughout the Uruguay
Round, in particular in respect of case- law of the European Court of Justice
interpreting heading 02.10 of the Council Regulation establishing the Combined
Nomenclature (paras. 7.390-7.405), EC Explanatory Notes (7.411-7.413) and
ignoring the legal relationship between the different elements of EC law and practice;

d) To the extent that the Panel's conclusions are premised on an erroneous assessment of
the facts, the EC seeks review of that assessment pursuant to Article 11 of the DSU.

The provisions of the covered agreements which th e European Communities consider to have been
erroneously interpreted or applied by the Panel include:

• Heading 02.10 of the EC’s Schedule read in conjunction with Article II :1(a) and II:1(b)
of the GATT 1994;

1 For the avoidance of doubt, the EC does not consider that the actions examined by the Panel can be qualified
as “practice”.

The EC also considers that the Panel erroneously in terpreted and applied Article 3.2 of the DSU read
in conjunction with the customary rules of interpre tation of public international law, in particular
Article 31 (3)(b) and Article 32 of the Vienna Convention and misapplied Article 11 of the DSU.