JAPAN – COUNTERVAILING DUTIES ON DYNAMIC RANDOM ACCESS MEMORIES FROM KOREA
Document: Request for the Establishment of a Panel by Korea
Date: 19 May 2006
Document codes: WT/DS336/5
Complainant: South Korea
Respondent: Japan
Third parties: China, EU, Taiwan, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. 1, 2, 14, 10, 15, 19, 21, 11, 12, 32.1, 15.5, 1.1, 19.1, 19.4  Subsidies and Countervailing Measures (SCM)Art. VI:3, X:3  GATT 1994

JAPAN – COUNTERVAILING DUTIES ON
DYNAMIC RANDOM ACCESS MEMORIES FROM KOREA

Request for the Establishment of a Panel by Korea

 The following communication, dated 18 May 2 006, from the delegation of Korea to the
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

On 27 January 2006, the Government of Japan ("Japan") imposed countervailing duties on
imports of Dynamic Random Access Memories ("DR AMS") from Korea, as announced in Cabinet
Order No. 13 and Ministry of Finance Notice No. 35, published respectively in Issue No. 4264 and
Special Issue No. 17 of the Official Gazette dated 27 January 2006.

The Government of Korea ("Ko rea") considers the countervailing duties imposed by Japan
against DRAMS from Korea to be inconsistent with Japan’s obligations under the relevant provisions
of the GATT 1994, and the Agreement on S ubsidies and Countervailing Measures ("SCM
Agreement"). As a result, Korea requested c onsultations with Japan regarding these measures
pursuant to Article 4 of the Understanding on Ru les and Procedures Governing the Settlement of
Disputes ("DSU"), Article 30 of the SCM Agre ement, and Article XXII of the GATT 1994.
Consultations were requested on 14 March 2006 concerning the c ountervailing measures of Japan.
The consultations were held with Japan in Geneva on 25 April 2006. These consultations failed to
resolve the dispute between the parties.

As a result of the failure to resolve the dis pute, Korea requests the establishment of a panel
pursuant to Article 6 of the DSU, Article XX III of the GATT 1994, and Article 30 of the SCM
Agreement regarding Japan’s countervailing measures against DRAMS from Korea. Korea requests
that the panel make findings that Japan has acted inconsistently with its obligations under Articles 1,
2, 10, 11, 12, 14, 15, 19, 21, 22 and 32 of the SCM Agreement, as well as Articles VI:3 and X:3 of the
GATT 1994. Specifically, Korea makes claims under the following:

1. Article 1.1 of the SCM Agreement because, inter alia, Japan failed to demonstrate the
existence of a financial contribution by Kor ea with respect to each distinct financial
transaction at issue in its anti-subsidy investigation.
2. Article 1.1 of the SCM Agreement because, inter alia, Japan failed to demonstrate that
every private financial institution involved in its subsidy investigation was under the
direction or entrustment of Korea.
3. Articles 1.1 and 14 of the SCM Agreement because, inter alia, Japan failed to demonstrate
that a benefit was conferred upon the responde nt Hynix Semiconductor, Inc., ("Hynix"),
given available market benchmarks and the circumstances of financial restructuring.

4. Articles 1.1 and 14 of the SCM Agreement because, inter alia , the analyses of the
"commercial rationality" of loans and other i nvestments in Hynix, and the other analyses
related to the determination of the financial contribution and benefit to Hynix, that were
undertaken by Japan are inconsistent with Japan’s obligations under the SCM Agreement.
5. Article 2 of the SCM Agreement because, inter alia, Japan did not properly establish that all
of the alleged subsidies were specific to Hynix on the basis of positive evidence.
6. Articles 1 and 2 of the SCM Agreement because, inter alia , Japan imposed an improper
burden of proof on Hynix and Korea; reached conclusions without adequate evidentiary
basis, and thereby failed to base its decisions on affirmative, objective, and verifiable
evidence.
7. Article 12 of the SCM Agreement because, inter alia, Japan improperly treated entities that
had no interest in the investigation as "int erested parties," improperly applied "facts
available" instead of considering the info rmation on the record, and improperly made
adverse inferences against the interests of Hy nix due to allegedly inadequate cooperation
by other interested parties or by other entities that were not under Hynix’s control and that
were not obligated to participate in the investigation.
8. Article 14 of the SCM Agreement because, inter alia, Japan utilized methods for calculating
the benefit to the alleged recipient of the a lleged financial contribu tions that were not
specified in Japan’s national legislation or implementing regulations and that were not
applied in a manner that was transparent and adequately explained.
9. Articles 14 and 19.4 of the SCM Agreement and Article VI:3 of the GATT 1994 because,
inter alia, Japan failed to properly measure the benefit in accordance with the principles of
the SCM Agreement, which resulted in countervailing duties levied in excess of the
amount allowed under the SCM Agreement and the GATT 1994.
10. Article 15 of the SCM Agreement because, inter alia , Japan improperly found material
injury caused by the allegedly subsidized imports without proper evidentiary or legal
foundations.
11. Article 15.5 and 19.1 of the SCM Agreement because, inter alia , Japan’s determination
failed to demonstrate that the allegedly subsid ized imports were, through the effect of the
alleged subsidies, causing injury within the meaning of the SCM Agreement.
12. Articles 10 and 32.1 of the SCM Agreement because, inter alia, the countervailing duties
imposed by Japan against DRAMS originating in Korea were not in accordance with the
relevant provisions of the SCM Agreement or the relevant provisions of GATT 1994.
13. Articles 10, 14, 19, and 21 of the SCM Agreement because, inter alia, Japan imposed and
maintained countervailing duties without determ ining whether a benefit continued to exist
following changes in the ownership of Hynix.
14. Articles 19 and 21 of the SCM Agreement because,
inter alia, Japan improperly levied a
countervailing duty on imports when there was no longer a benefit from the alleged
subsidies, and the duty was not necessary to counteract subsidization.
15. Articles 10, 11, 12, 14, 15, 22, and 32.1 of the SCM Agreement and Articles VI:3 and X:3
of the GATT 1994 because Japan, inter alia, failed to conduct a thorough and complete

investigation, and failed to conduct its i nvestigation and make determinations in
accordance with fundamental substantive and procedural requirements.
The Government of Korea requests that the pane l be established with the standard terms of
reference set forth in Article 7 of the DSU.

The Government of Korea further requests that this request be placed on the agenda for the
special meeting of the Dispute Settlement Body on 30 May 2006.