JAPAN – COUNTERVAILING DUTIES ON DYNAMIC RANDOM ACCESS MEMORIES FROM KOREA
Document: Request for Consultations by Korea
Date: 20 March 2006
Document codes: WT/DS336/1; G/L/765; G/SCM/D65/1
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 Consultations by Korea

 The following communication, dated 14 March 2006, from the delegation of Korea to the
delegation of Japan and to the Chai rman of the Dispute Settlement Bo dy, is circulated in accordance
with Article 4.4 of the DSU.

 My authorities have instructed me to request consultations with the Government of Japan
("Japan") pursuant to Article 4 of the Unders tanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU"), Article 30 of the Agreement on Subsidies and Countervailing
Measures ("SCM Agreement"), and Article XXII of the General Agreement on Tariffs and
Trade 1994 ("GATT 1994"), with regard to th e imposition of countervailing duties by the
Government of Japan on imports of certai n Dynamic Random Access Memories ("DRAMs") from
Korea, notice of which was provided by Japan 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,and certain aspects of th e investigation and determinations that led to
the imposition of such duties.

 The Government of Korea considers these determ inations by the Government of Japan to be
inconsistent with its obligations under th e relevant provisions of the GATT 1994 and the
SCM Agreement, including, but not limited to:

 1. Article 1 of the SCM Agreement because, inter alia, Japan failed to demonstrate the
existence of a financial contribution by th e Government of Korea within the meaning
of Article 1 of the SCM Agreement.

 2. Articles 1 and 2 of the SCM Agreement because, inter alia , Japan imposed and
applied an improper burden of proof on res pondents and, in turn, Japan did not base
its decisions on affirmative, objective and verifiable evidence.

 3. Articles 1 and 14 of the SCM Agreement because, inter alia , Japan failed to
demonstrate that a benefit was conferre d on respondent Hynix Semiconductor Inc.
("Hynix").

 4. Articles 1 and 14 of the SCM Agreement because, inter alia , the analyses of the
"commercial rationality" of loans and othe r investments in Hynix, and the other
analyses related to the determination of the financial contribution and benefit to
respondent 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 failed to demonstrate that
the alleged subsidies were specific to respondent Hynix on the basis of positive
evidence.

 6. Article 12 of the SCM Agreement because, inter alia , Japan improperly treated
entities that had no interest in the inves tigation as "interested parties", improperly
applied "facts available" instead of cons idering the information on the record, and
improperly made adverse infere nces against the interests of respondent Hynix due to
allegedly inadequate cooperation by other in terested parties or by other entities that
were not under Hynix's control and that we re not obligated to participate in the
investigation.

 7. Article 14 of the SCM Agreement because, inter alia , Japan utilized methods for
calculating the benefit to the alleged recipi ent of the alleged financial contributions
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.

 8. Article 15 of the SCM Agreement because, inter alia , Japan improperly found
material injury caused by the alleged subs idized imports without proper evidentiary
or legal foundations.

 9. Article 15.5 and Article 19.1 of the SCM Agreement because, inter alia , Japan's
determination failed to demonstrate that the allegedly subsidized imports were,
through the effect of the alleged subsidies, causing injury within the meaning of the
SCM Agreement.

 10. Articles 10, 14, 19 and 21 of the SCM Agreement because, inter alia, Japan imposed
and maintained countervailing duties w ithout determining whether a benefit
continued to exist following changes in the ownership of respondent Hynix.

 11. Articles 19 and 21 of the SCM Agreement because, inter alia , Japan improperly
levied a countervailing duty on imports wh en there was no longer a benefit from the
alleged past subsidies, and the duty was not necessary to counteract alleged
subsidization.

 12. 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, inter alia , Japan failed to conduct a thorough and
complete investigation, and failed to conduct its investigation and make
determinations in accordance with funda mental substantive and procedural
requirements.

 13. Article 22 of the SCM Agreement because, inter alia , Japan failed to provide all
relevant information on the matters of fact and law and reasons for its determinations.

 The Government of Korea reserves its rights to raise additional factual and legal issues during
the course of the consultations and in any request for the establishment of a panel.

 We look forward to the response of the Governme nt of Japan to this request so that we can
schedule a mutually convenient date to begin consultations.