UKRAINE – DEFINITIVE SAFEGUARD MEASURES ON CERTAIN PASSENGER CARS
Document: REPORT OF THE PANEL
Date: 26 June 2015
Document codes: WT/DS468/R
Complainant: Japan
Respondent: Ukraine
Third parties: EU, India, South Korea, Russia, Turkey, Australia, U.S.
Dispute stage: Panel
Agreements cited: Art. 12.1, 12.2, 12.3, 12.5, 8.1, 3.1, 4.2(c), 2.1, 11.1(a), 5.1, 7.1, 7.4, 4.2(a), 4.2(b), 4.1(a), 4.1(b)  SafeguardsArt. X:3(a), XIX:1, II:1(b)  GATT 1994

UKRAINE – DEFINITIVE SAFEGUARD MEASURES ON
CERTAIN PASSENGER CARS

REPORT OF THE PANEL

LIST OF ANNEXES

ANNEX A
WORKING PROCEDURES OF THE PANEL
Contents Page
Annex A-1 Working Procedures of the Panel A-2
Annex A-2 Additional Working Procedures concerning business confidential information A-7
ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 Integrated executive summary of the arguments of Japan B-2
Annex B-2 Integrated executive summary of the arguments of Ukraine B-19
ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Integrated executive summary of the arguments of Australia C-2
Annex C-2 Integrated executive summary of the arguments of the European Union C-5
Annex C-3 Oral statement of Korea, Republic of C-10
Annex C-4 Integrated executive summary of the arguments of Turkey C-12
Annex C-5 Integrated executive summary of the arguments of the United States C-16

WTO AND GATT CASES CITED IN THIS REPORT

Short title Full case title and citation
Argentina – Footwear (EC) Appellate Body Report, Argentina – Safeguard Measures on Imports of
Footwear, , adopted 12 January 2000, DSR 2000:I, p. 515
Argentina – Footwear (EC) Panel Report, Argentina – Safeguard Measures on Imports of Footwear,
, adopted 12 January 2000, as modified by Appellate Body
Report , DSR 2000:II, p. 575
Argentina – Import Measures Appellate Body Reports, Argentina – Measures Affecting the Importation of
Goods, / / , adopted

Argentina – Preserved Peaches Panel Report, Argentina – Definitive Safeguard Measure on Imports of
Preserved Peaches, , adopted 15 April 2003, DSR 2003:III,
p. 1037
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of
Salmon, , adopted 6 November 1998, DSR 1998:VIII,
p. 3327
Canada – Wheat Exports and
Grain Imports
Appellate Body Report, Canada – Measures Relating to Exports of Wheat and
Treatment of Imported Grain, WT/DS276/AB/R, adopted
27 September 2004, DSR 2004:VI, p. 2739
Chile – Price Band System Panel Report, Chile – Price Band System and Safeguard Measures Relating to
Certain Agricultural Products, WT/DS207/R, adopted 23 October 2002, as
modified by Appellate Body Report WT/DS207AB/R, DSR 2002:VIII, p. 3127
Dominican Republic –
Safeguard Measures
Panel Report, Dominican Republic – Safeguard Measures on Imports of
Polypropylene Bags and Tubular Fabric, WT/DS415/R, WT/DS416/R,
WT/DS417/R, WT/DS418/R, and Add.1, adopted 22 February 2012,
DSR 2012:XIII, p. 6775
EC – Bananas III
(Article 21.5 – Ecuador II) /
EC – Bananas III
(Article 21.5 – US)
Appellate Body Reports, European Communities – Regime for the
Importation, Sale and Distribution of Bananas – Second Recourse to
Article 21.5 of the DSU by Ecuador, WT/DS27/AB/RW2/ECU, adopted
11 December 2008, and Corr.1 / European Communities – Regime for the
Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 of
the DSU by the United States, WT/DS27/AB/RW/USA and Corr.1, adopted
22 December 2008, DSR 2008:XVIII, p. 7165
EC – IT Products Panel Reports, European Communities and its member States – Tariff
Treatment of Certain Information Technology Products, WT/DS375/R /
WT/DS376/R / WT/DS377/R, adopted 21 September 2010, DSR 2010:III,
p. 933
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and
Agricultural Chemical Products, WT/DS50/AB/R, adopted 16 January 1998,
DSR 1998:I, p. 9
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of
Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000,
DSR 2000:I, p. 3
Korea – Dairy Panel Report, Korea – Definitive Safeguard Measure on Imports of Certain
Dairy Products, WT/DS98/R and Corr.1, adopted 12 January 2000, as
modified by Appellate Body Report WT/DS98/AB/R, DSR 2000:I, p. 49
Mexico – Anti-Dumping
Measures on Rice
Appellate Body Report, Mexico – Definitive Anti-Dumping Measures on Beef
and Rice, Complaint with Respect to Rice, WT/DS295/AB/R, adopted
20 December 2005, DSR 2005:XXII, p. 10853
Mexico – Taxes on Soft Drinks Panel Report, Mexico – Tax Measures on Soft Drinks and Other Beverages,
WT/DS308/R, adopted 24 March 2006, as modified by Appellate Body Report
WT/DS308/AB/R, DSR 2006:I, p. 43
US – Cotton Yarn Appellate Body Report, United States – Transitional Safeguard Measure on
Combed Cotton Yarn from Pakistan, WT/DS192/AB/R, adopted
5 November 2001, DSR 2001:XII, p. 6027
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia,
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX,
p. 4051

Short title Full case title and citation
US – Lamb Panel Report, United States – Safeguard Measures on Imports of Fresh,
Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177/R,
WT/DS178/R, adopted 16 May 2001, as modified by Appellate Body Report
WT/DS177/AB/R, WT/DS178/AB/R, DSR 2001:IX, p. 4107
US – Line Pipe Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Circular Welded Carbon Quality Line Pipe from Korea,
WT/DS202/AB/R, adopted 8 March 2002, DSR 2002:IV, p. 1403
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Certain Steel Products, WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003,
DSR 2003:VII, p. 3117
US – Steel Safeguards Panel Reports, United States – Definitive Safeguard Measures on Imports of
Certain Steel Products, WT/DS248/R / WT/DS249/R / WT/DS251/R /
WT/DS252/R / WT/DS253/R / WT/DS254/R / WT/DS258/R / WT/DS259/R /
and Corr.1, adopted 10 December 2003, as modified by Appellate Body
Report WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R,
WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R,
WT/DS259/AB/R, DSR 2003:VIII, p. 3273
US – Tuna II (Mexico) Appellate Body Report, United States – Measures Concerning the
Importation, Marketing and Sale of Tuna and Tuna Products,
WT/DS381/AB/R, adopted 13 June 2012, DSR 2012:IV, p. 1837
US – Tyres (China) Appellate Body Report, United States – Measures Affecting Imports of Certain
Passenger Vehicle and Light Truck Tyres from China, WT/DS399/AB/R,
adopted 5 October 2011, DSR 2011:IX, p. 4811
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton,
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, p. 3
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Wheat Gluten from the European Communities, WT/DS166/AB/R,
adopted 19 January 2001, DSR 2001:II, p. 717
US – Wheat Gluten Panel Report, United States – Definitive Safeguard Measures on Imports of
Wheat Gluten from the European Communities, WT/DS166/R, adopted
19 January 2001, as modified by Appellate Body Report WT/DS166/AB/R,
DSR 2001:III, p. 779
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven
Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997,
and Corr.1, DSR 1997:I, p. 323

ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
Anti-Dumping Agreement Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994
BCI Business Confidential Information
Commission The Interdepartmental Comm ission on Foreign Trade of Ukraine
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
GATT 1994 General Agreement on Tariffs and Trade 1994
Key Findings Key Findings of the Ministry of Economic Development and Trade of Ukraine
Based on Special investigation on Imports of Motors Cars to Ukraine Regardless
of the Country of Origin and Export
Ministry The Ministry of Economic Development and Trade of Ukraine
Notice of 14 March 2013 Notice of Imposition of Safeguard Measures on Imports of Motor Cars to Ukraine
Regardless of Country of Origin and Export, as published in the Uryadovyi
Kuryer No. 48 of 14 March 2013
SCM Agreement Agreement on Subsidies and Countervailing Measures
Safeguards Law Ukraine's Law on Application of Safeguard Measures Against Imports to Ukraine,
22 December 1998, No. 332-XIV
The Shorter Oxford
Dictionary (1993)
New Shorter Oxford English Dictionary, 1993 (4th edition), Volumes 1 and 2
The Shorter Oxford
Dictionary (2002)
New Shorter Oxford English Dictionary, 2002 (5th edition), Volumes 1 and 2
The Shorter Oxford
Dictionary (2007)
New Shorter Oxford English Dictionary, 2007 (6th edition), Volumes 1 and 2
WTO World Trade Organization
WTO Agreement Marrakesh Agreement Establishing the WTO

1 INTRODUCTION
1.1 Complaint by Japan
1.1. On 30 October 2013, Japan requested consultations with Ukraine pursuant to Article 4 of the
Understanding on Rules and Procedures Gove rning the Settlement of Dispute ("DSU"),
Article XXII:1 of the General Agreement on Tariffs and Trade 1994 ("the GATT 1994") and
Article 14 of the Agreement on Safeguards regarding the definitive safeguard measure
1 imposed
by Ukraine on imports of certain passenger cars and the investigation that led to the imposition of
this measure. 2 The European Union and the Russian Federation requested on 13 and
14 November 2013, respectively, to join the consultations pursuant to Article 4.11 of the DSU.3 On
29 November 2013, Ukraine informed the DSB th at it had accepted the requests of the
European Union and the Russian Federation to join the consultations.4
1.2. Consultations were held on 29 November 2013 and 21 January 2014, but failed to resolve the
dispute.
1.2 Panel establishment and composition
1.3. At its meeting on 26 March 2014, the DSB es tablished a panel pursuant to the request of
Japan in document WT/DS468/5, in accordance with Article 6 of the DSU.5
1.4. The Panel's terms of reference are the following:
To examine, in the light of the relevant pr ovisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by Japan in document
WT/DS468/5 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.
6
1.5. On 10 June 2014, Japan requested the Direct or-General to determine the composition of the
Panel, pursuant to Article 8.7 of the DSU. This paragraph provides:
If there is no agreement on the panelists within 20 days after the date of the
establishment of a panel, at the request of either party, the Director-General, in
consultation with the Chairman of the DSB and the Chairman of the relevant Council
or Committee, shall determine the composition of the panel by appointing the
panelists whom the Director-General considers most appropriate in accordance with
any relevant special or additional rules or procedures of the covered agreement or
covered agreements which are at issue in the dispute, after consulting with the parties
to the dispute. The Chairman of the DSB sh all inform the Members of the composition
of the panel thus formed no later than 10 days after the date the Chairman receives
such a request.

1 Japan submits that we should refer to "safeguard measures" in the plural. In Japan's view, there are
two measures at issue since Ukraine has imposed two different duty rates for passenger cars with different
engine volumes. We agree that Ukraine has imposed different rates for different categories of passenger cars,
and also note that the documents containing the relevant decisions refer to "safeguard measures" in the plural.
However, the different rates of duty were imposed on the same date through a single decision with otherwise
identical parameters, including the duration, the date of implementation, etc. and are also based on the same
finding of injury or threat thereof caused by increased imports and the same decision regarding the national
interest to impose additional duties. We also note that our findings in this dispute are the same for all
categories of passenger cars covered by the measure at issue. For simplicity, we therefore prefer to refer to
the "safeguard measure" at issue throughout this Report, mindful of the fact that it sets different duty rates for
different categories of passenger cars.
2 See WT/DS468/1.
3 See WT/DS468/2 and WT/DS468/3.
4 See WT/DS468/4.
5 See WT/DSB/M/343.
6 See WT/DS468/6.

1.6. On 20 June 2014, the Director-General accordingly composed the Panel as follows:
Chairperson: Mr William Davey

Members: Mr Felipe Hees
 Mr Chang-fa Lo
1.7. Australia, the European Union, India, Korea, the Russian Federation, Turkey and the
United States have reserved their rights to participate in the Panel proceedings as third parties.
1.3 Panel proceedings
1.3.1 General
1.8. After consultations with the parties, the Panel adopted its Working Procedures
7 and timetable
on 29 July 2014.
1.9. The Panel held a first substantive meeting with the parties on 29 and 30 September 2014. A
session with the third parties took place on 30 September 2014. The Panel held a second
substantive meeting with the parties on 17 and 18 November 2014. On 5 December 2014, the
Panel issued the descriptive part of its Report to the parties. The Panel issued its Interim Report to
the parties on 12 February 2015. The Panel issued its Final Report to the parties on
18 March 2015.
1.3.2 Working procedures on BCI
1.10. At Ukraine's request and after consultati ons with both parties, the Panel adopted, on
8 August 2014, additional procedures for the protection of BCI.
8
2 FACTUAL ASPECTS
2.1 The measure at issue
2.1. This dispute concerns the definitive safe guard measure imposed by Ukraine on imports of
certain passenger cars to Ukraine and the investigation that led to the imposition of this measure.
2.2 Other factual aspects
2.2. Further to a complaint lodged by the Association of Ukrainian Vehicle Manufacturers
"Ukravtoprom" on behalf of three Ukrainian automobile manufacturers (VO KrASZ LLC, ZAZ CJSC,
Eurocar CJSC), Ukraine's Interdepartmental Commission on Foreign Trade adopted, on
30 June 2011, Decision No. SP-259/2011/4402-27 on the initiation and conduct of the safeguard
investigation on imports of motor cars to Ukraine, regardless of country of origin and export.
2.3. The period of investigation covered three years, namely 2008-2010, with an additional
assessment of certain factors during the first half of 2011.
2.4. On 2 July 2011, the safeguard investigation was formally initiated following publication of the
Commission's decision of 30 June in the Uryadovyi Kuryer No. 118 of 2 July 2011. The
investigation was carried out by the Ministry pursuant to Ukraine's Safeguards Law.
2.5. On 13 July 2011, the initiation of the safeguard investigation was notified
9 to the WTO
pursuant to Article 12.1(a) of the Agreement on Safeguards.
2.6. On 6 March 2012, the Commission approved Decision No. SP-272/2012/4423-08 to extend
the safeguard investigation for an additional 60 days in accordance with Article 8 of the Safeguards

7 See the Panel's Working Procedures in Annex A-1.
8 See Additional Working Procedures on BCI in Annex A-2.
9 WTO document G/SG/N/6/UKR/9.

Law. The notice concerning this decision was pu blished in the official gazette of Ukraine, the
Uryadovyi Kuryer, on 7 March 2012.
2.7. On 11 April 2012, the Ministry circulated to Japan and several other exporting countries its
Key Findings based on the results of the safeguard investigation. The Ministry proposed to impose
safeguard measure in the form of a safeguard duty at a level of 6.46% for passenger cars with an
engine volume of 1000cm 3 - 1500cm 3 and 15.1 % for passenger cars with an engine vo lume of
1500cm3 - 2200cm3.
2.8. On 28 April 2012, the Commission took De cision No. SP-275/2012/4423-08 on Imposition of
Safeguard Measures on Imports of Motor Cars into Ukraine Regardless of the Country of Origin or
Export of 28 April 2012 (hereafter referred to as the "Decision"). A Notice of Imposition of
Safeguard Measures on Imports of Motor Cars into Ukraine Regardless of the Country of Origin
was published in the Uryadovyi Kuryer No. 48 on 14 March 2013. The safeguard measure in the
form of a safeguard duty was imposed with the following rates: 6.46% for passenger cars with an
engine volume of 1000cm
3 – 1500cm 3 and 12.95% for passenger cars with an engine volume of
1500cm3 – 2200 cm 3. The measure entered into force 30 days after its official publication for a
duration of three years.
2.9. According to Article 21 of the Safeguards Law, the above-mentioned safeguard measure was
not applied to imports into Ukraine of the product concerned originating from the following
countries – Members of the WTO: Angola, Bangla desh, Benin, Burkina Faso, Burundi, Cambodia,
Central African Republic, Chad, Congo, Djibouti, Gambia, Guinea, Guinea-Bissau, Haiti, Lesotho,
Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Senegal,
Sierra Leone, Solomon Islands, Tanzania, Togo, Uganda and Zambia.
2.10. On 21 March 2013, Ukraine submitted to the WTO a notification pursuant to Article 12.1(b)
of the Agreement on Safeguards on finding a serious injury or threat thereof caused by increased
imports, and pursuant to Article 12.1(c) and footnote 2 of Article 9 of the Agreement on
Safeguards.
10
2.11. By Decision No. SP-306/2014/4423-06 of 12 February 2014, the Commission decided to
progressively liberalize the safeguard measure in accordance with the following schedule:
a. For cars with a cylinder capacity exceeding 1000 cm 3 but not exceeding 1500 cm 3,
classified under UKTZED11 code of 8703 22 10 00:
i. In 12 months from the day of applying the measure: 4.31%
ii. In 24 months from the day of applying the measure: 2.15%.
b. For cars with a cylinder capacity exceeding 1500 cm 3 but not exceeding 2200 cm 3,
classified under UKTZED code of 8703 23 19 10:
i. In 12 months from the day of applying the measure: 8.63%
ii. In 24 months from the day of applying the measure: 4.32%.
2.12. A Notice concerning this decision was published in the Uryadovyi Kuryer , No. 57 of
28 March 2014. The decision on liberalization entered into force on the date of its publication.
2.13. This decision was notified to the Committee on Safeguards on 28 March 2014.12

10 WTO document G/SG/N/8/UKR/3-G/SG/N/10/UKR/3-G/SG/N/11/UKR/1.
11 Ukrainian Foreign Economic Activity Commodity Classification Code ("Customs Code of Ukraine").
12 WTO document G/SG/N/8/UKR/3/Suppl.1-G/SG/N/10/UKR/3/Suppl.2-G/SG/N/11/UKR/1/Suppl.1.

3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1. Japan requests that the Panel:
a. find that the safeguard measure adopted by Ukraine is inconsistent with its obligations
under the Agreement on Safeguards and the GATT 1994 and, in particular, with:
i. Articles 3.1 and 4.2(c) of the Agreement on Safeguards, because Ukraine failed to
publish a report setting forth its findings and reasoned conclusions reached on all
pertinent issues of fact and law and a detailed analysis of the case under
investigation as well as a demonstration of the relevance of the factors examined;
ii. Article 3.1 of the Agreement on Safeguar ds, because Ukraine failed to conduct a
proper investigation that includes reasonable public notice to all interested parties
and the opportunities for them to present evidence and their views;
iii. Article XIX:1(a) of the GATT 1994 and Articles 3.1, 4.2(c) and 11.1(a) of the
Agreement on Safeguards, because Ukraine failed to demonstrate the existence of
any "unforeseen developments"; failed to demonstrate a logical connection between
the increase in imports and an "unfores een development"; and failed to provide
reasoned and adequate findings and conclusions with regard to an "unforeseen
development";
iv. Article XIX:1(a) of the GATT 1994 and Articles 3.1, 4.2(c) and 11.1(a) of the
Agreement on Safeguards, because Ukraine failed to demonstrate and evaluate the
effect of the obligations incurred under the GATT 1994 and how that effect has
resulted in the increase in imports; and failed to provide reasoned and adequate
findings and conclusions with regard to the alleged effect of obligations incurred
under the GATT 1994;
v. Article XIX:1(a) of the GATT 1994 and Articles 2.1, 3.1, 4.2(a), 4.2(c) and 11.1(a) of
the Agreement on Safeguards, because Ukraine failed to demonstrate that the
increase in imports was the result of unfor eseen developments and of the effect of
obligations incurred under the GATT 1994; failed to establish an increase in imports
in a manner consistent with Article XIX:1(a) of the GATT 1994 and Articles 2.1 and
4.2(a) of the Agreement on Safeguards ; and failed to provide reasoned and
adequate findings and conclusions with regard to the increase in imports;
vi. Article XIX:1(a) of the GATT 1994 and Articles 2.1, 3.1, 4.1(a), 4.1(b), 4.2(a),
4.2(b), 4.2(c) and 11.1(a) of the Agreemen t on Safeguards, because Ukraine failed
to examine all relevant injury factors; and failed to provide reasoned and adequate
findings and conclusions of how the facts support its determination of serious injury
or threat of serious injury;
vii. Article XIX:1(a) of the GATT 1994 and Articles 2.1, 3.1, 4.1(a), 4.1(b), 4.2(a),
4.2(b), 4.2(c) and 11.1(a) of the Agreemen t on Safeguards, because Ukraine failed
to demonstrate the existence of a causal link between the alleged increased imports
and the alleged serious injury or threat thereof; failed to make a proper non-
attribution analysis; and failed to provide reasoned and adequate findings and
conclusions regarding the existence of a causal link between the increased imports
and the alleged serious injury or threat of injury and non-attribution of other factors;
viii. Article XIX:1(a) of the GATT 1994 and Articles 3.1, 4.2(c), 5.1, 7.1, 7.4 and 11.1(a)
of the Agreement on Safeguards, because Ukraine failed to apply the safeguard
measure "only to the extent necessary to prevent or remedy serious injury and to
facilitate adjustment"; failed to progressively liberalize the safeguard measure by
submitting a relevant timetable for progressi ve liberalization; and failed to provide
reasoned and adequate findings and conclusions as to why the measure is necessary
to prevent or remedy the alleged serious injury;

ix. Article II:1(b) of the GATT 1994, becaus e Ukraine imposes duties which are in
excess of those set forth in its schedule through the unlawful safeguard measure at
issue;
x. Articles 12.1 and 12.2 of the Agreement on Safeguards, because Ukraine did not
notify immediately the Committee on Safeguards upon initiating the safeguard
investigation, making a finding of serious injury and taking a decision to apply
safeguard measures and because the initial notification made by Ukraine did not
include "all pertinent information" as required by Article 12.2 of the Agreement on
Safeguards;
xi. Article 12.3 of the Agreement on Safegu ards, because Ukraine did not provide
adequate opportunities for prior consultations on the proposed safeguard measure
and because the consultations held in April 2012 did not fulfil the requirements laid
down in Article 12.3 of the Agreement on Safeguards;
xii. Article 12.5 of the Agreement on Safegu ards, because Ukraine did not notify
immediately to the Council for Trade in Goods the results of any consultations
referred to in Article 12 of the Agreement on Safeguards;
xiii. Article 8.1 of the Agreement on Safeguards, because Ukraine did not endeavour to
maintain a substantially equivalent level of concessions and other obligations to that
existing between Ukraine and Japan under the GATT 1994, in accordance with
Article 12.3 of the Agreement;
b. recommend that the DSB, pursuant to Article 19.1 of the DSU, requests Ukraine to bring
its measure into conformity with the relevant provisions of the Agreement on Safeguards
and the GATT 1994; and
c. suggest, pursuant to the second sentence of Article 19.1 of the DSU, that Ukraine revoke
its safeguard measure.
3.2. Ukraine requests that the Panel reject all of Japan's claims in this dispute in their entirety.
4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are reflecte d in their executive summaries, provided to the
Panel in accordance with paragraph 19 of the Working Procedures adopted by the Panel (see
Annexes B-1 and B-2).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of Korea are reflected in its oral statement, while the arguments of Australia,
the European Union, Turkey and the United Stat es are reflected in their executive summaries,
provided in accordance with paragraph 20 of th e Working Procedures adopted by the Panel (see
Annexes C-1, C-2, … ). India and the Russian Fede ration did not submit written or oral arguments
to the Panel.
6 INTERIM REVIEW
6.1. On 12 February 2015, the Panel submitte d its Interim Report to the parties. On
24 February 2015, Japan and Ukraine each submitte d written requests for the review of precise
aspects of the Interim Report and comments. Neit her party requested an interim review meeting.
On 3 March 2015, Japan submitted comments on Ukraine's requests for review and comments.
Ukraine submitted no comments on Japan's requests for review and comments.
6.2. In accordance with Article 15.3 of the DSU, this section of the Panel Report sets out the
Panel's response to the parties' requests made at the interim review stage. The Panel modified
aspects of its Report in the light of the parties' comments where it considered it appropriate, as
explained below. References in this section to other sections, paragraph numbers and footnotes
relate to the Interim Report.

6.3. In addition to the modifications specified below, the Panel also corrected a number of
typographical and other non-substantive errors throughout the Report, including those identified
by the parties.
6.4. In order to facilitate understanding of the interim review comments and changes made, the
following section is structured to follow the organization of the findings section of this Report
(Section 7), with the review requests of the pa rties, and their comments, addressed sequentially,
according to the paragraph numbers that attracted comments.
6.1 Preliminary matters
6.5. Regarding paragraph 3.1, Japan notes that the Panel decided to use the term "safeguard
measure" in singular form throughout the Inte rim Report. However, Japan argues that, for the
purpose of describing Japan's claim at paragraph 3.1, the term "safeguard measure" should
appear in the plural.
6.6. The Panel recalls that its preference to us e the term "safeguard measure" in the singular
form is discussed and explained in detail at footnote 18. For simplicity and consistency, we also
prefer to use one single form throughout our Report. Nevertheless, in response to Japan's
comment we moved footnote 18 to paragraph 1.1, where the term "safeguard measure" appears
for the first time in the Report.
6.7. Regarding paragraph 7.6, Japan requests th e Panel to make one change concerning the date
of the publication of Decision No. SP-259/2011/4402-27 and another concerning the use of one
word in the description of the product concerned.
6.8. The Panel made appropriate changes to the first sentence and bullet points (a) and (b) of
paragraph 7.6.
6.9. Regarding paragraph 7.15, numeral viii, Japan suggests using the same terms that are used
in paragraph 3.1, numeral viii, including the phrase "by submitting a relevant timetable for
progressive liberalization", which is missing from paragraph 7.15.
6.10. The Panel made the requested changes.
6.11. Regarding Section 7.1.5, and in particular paragraphs 7.29 to 7.37, Ukraine comments that
it "maintains" its position regarding whether the Ke y Findings are a part of the published report of
the Ministry. Ukraine submits that there is no reason to think that publication in the official
newspaper Uryadovyi Kuryer is the only legally accepted method of publication provided by
Ukraine's Safeguards Law. Ukraine adds that the Uryadovyi Kuryer is reserved only for notices
about the Commission decisions. Moreover, Ukraine contends that the Key Findings were provided
to all interested WTO Members and were therefore a part of the public record of the investigation
and could have been made available by the Mini stry upon a written request. Ukraine makes no
specific request for a change.
6.12. Japan responds that the Panel has alread y dismissed Ukraine's arguments with regard to
the Key Findings at paragraph 7.36. According to Japan, Ukraine's comments do not call for any
modification of the Panel's findings in Section 7.1.5.
6.13. The Panel notes that paragraph 7.36 addresses this issue in detail. Even if it were correct,
as Ukraine now suggests, that under the domestic law of Ukraine the Key Findings could not be
published in the Uryadovyi Kuryer, this does not demonstrate that Ukraine met its obligation under
the Agreement on Safeguards to publish them. Wh ile we therefore do not change our finding in
this regard, in view of Ukraine's argument about the Uryadovyi Kuryer we deleted the reference to
Ukraine's legal requirements in the fourth sentence of paragraph 7.36.
6.2 Claims relating to unforeseen develo pments and the effect of the obligations
incurred under the GATT 1994
6.14. Regarding Section 7.2, Ukraine comments that it maintains its position that the unforeseen
developments in the present case consisted of the global financial and economic crisis, and not the

different multiple factors cited by the Panel in this section. Ukraine makes no specific request for a
change.
6.15. Japan responds by stating that Ukraine' s comments should be dismissed since they are
essentially a repetition of the arguments alre ady presented by Ukraine throughout the panel
proceedings and were dismissed by the Panel.
6.16. The Panel made no change, since the "different multiple factors" referred to by Ukraine have
been identified by Ukraine itself during the course of the proceedings.
6.3 Claims relating to increased imports
6.17. Regarding paragraph 7.194, Japan suggests that the Panel insert in the second sentence of
the paragraph one of its arguments so as to fully reflect Japan's position.
6.18. The Panel made the requested change.
6.19. Regarding Section 7.3.1.1, and in particular paragraphs 7.145 and 7.147 concerning the
issue of the "significance" of the relative increase in imports, Ukraine comments that fully
addressing the requirement to establish the "significance" of the increase in imports could result in
a breach of the confidentiality obligations under Article 3.2 of the Agreement on Safeguards
referred to in Ukraine's submissions to the Panel. In particular, Ukraine considers that providing
the precise figures of the origin al ratio between domestic produc tion and imports could make the
confidential information concerning domestic production easily accessible. Ukraine makes no
specific request for a change.
6.20. Japan submits that Ukraine's comments shou ld be dismissed. According to Japan, Ukraine
does not challenge the numbers provided by the Pa nel in Section 7.3.1.1, but instead repeats its
arguments concerning confidentiality of the data on imports and domestic production. Japan
argues that the Panel has already taken into account these arguments, as reflected in
footnote 142.
6.21. The Panel recalls that at paragraphs 7.147-7.148 it determined that the competent
authorities have not demonstrated, through reasoned explanations, that the relative increase was
significant enough. Indeed, in the Notice of 14 March 2013, the competent authorities did not even
characterize the relative increase at issue as "significant". At paragraph 7.147 we further observed
that "[w]ithout additional information or relevant explanations" (emphasis added) the reference to
the 37.9% increase is not sufficient by itself to demonstrate the required "significance" and we
explained our view. Thus, we did not say, and do not wish to imply that Ukraine could only
establish the significance of the relative increase by revealing confidential information in the
determination. Nevertheless, in view of Ukraine's comment we added some clarification at the end
of paragraph 7.147.
6.4 Claims relating to threat of serious injury
6.22. Regarding Section 7.4.1.1, Ukraine raises a concern that "fully adhering to the Panel's
recommendations on the analysis of the increased imports may require violating the regulations of
Article 3.2 of the Agreement [on Safeguards]". A ccording to Ukraine, publication of information
regarding the level of the market share of incr eased imports or the rate and amount of the
increased imports risks revealing information claime d to be confidential by the domestic industry.
However, Ukraine makes no specific request for any change to this section.
6.23. Japan notes that Section 7.4.1.1 deals with a different issue. Furthermore, Japan notes that
the Panel has already taken Ukraine's arguments concerning confidentiality into consideration, in
particular at paragraph 7.251.
6.24. The Panel notes that Ukraine's concern relates to Section 7.4.1.3. In Section 7.4.1.3, we are
not suggesting that confidential information must be disclosed in order to make a finding of threat
of serious injury consistent with the Agreement on Safeguards. As provided for in Article 3.2 itself,
it is usually possible to provide a meaningful summary of confidential information that does not
conflict with the confidentiality requirement under Article 3.2. An analysis and determination based

on such a non-confidential summary may well be sufficient to demonstrate that the requirements
of the Agreement on Safeguards have been satisfied.13
6.25. As regards the amounts of the increase, Japan correctly points out that this issue is already
addressed at paragraph 7.251. As concerns the rate of the increased imports, we fail to see how
our findings would or could require a breach of the confidentiality obligation imposed by Article 3.2
on the part of the Ukrainian competent authorities. As we note at paragraph 7.251, the Notice
itself refers to the 71% absolute decrease in imports and the 38% relative increase in imports, so
Ukraine's competent authorities did not consider this information to be confidential.
6.26. Concerning the "share of the domestic market taken by the increased imports", we have
reviewed paragraph 7.249 in the light of Ukraine' s comment and found it appropriate, for greater
clarity and completeness, to provide some further elaboration in that paragraph and to insert two
additional paragraphs.
6.5 Claims relating to causation
6.27. Regarding paragraph 7.291, Japan requests that the word "only" be deleted from the first
sentence of the paragraph to avoid suggesting th at in Japan's view, the coincidence in time
between the increase of imports and the impairment of the domestic industry is not of importance
at all. Japan notes that this was not its position.
6.28. The Panel made the requested change to paragraph 7.291.
6.6 Claims relating to the application, duration, and liberalization of the safeguard
measure at issue
6.29. Regarding paragraphs 7.355 to 7.359, Japan submits that, contrary to what is stated in the
Panel's findings, it did not argue that the failure to "notify" a timetable for progressive
liberalization under Article 12.2 necessarily results in an inconsistency with Article 7.4.
14 Japan
maintains that it cannot be excluded that, although a Member does not notify the timetable for
progressive liberalization as required by Article 12.2, it nonetheless complies with Article 7.4.
Japan notes that what it argued is that Articl e 12.2 confirms that the requirement included in
Article 7.4 to provide for progressive liberalization has to be satisfied when the safeguard measure
is applied. For these reasons, Japan requests th at the Panel modify paragraphs 7.355 to 7.359 so
that they correctly reflect its arguments.
6.30. The Panel made appropriate changes to paragraphs 7.355 to 7.359 to reflect more clearly
that Japan's arguments relate to a failure to pr ovide a timetable for progressive liberalization
before the measure was applied rather than more narrowly only to a failure to notify such a
timetable before the measure was applied.
6.31. Regarding paragraph 7.372, Japan submit s that it did not argue that "failure to notify a
timetable as required by Articles 12.1 and 12.2 establishes, by itself, that a Member has acted
inconsistently with Articles 5.1 and 7.1"(emphasi s added). Japan thus suggests that this sentence
be corrected to accurately reflect its arguments.
6.32. The Panel made the requested change to more accurately reflect Japan's argument.
6.33. Regarding paragraphs 7.360 to 7.363, wh ere the Panel addresses "whether Ukraine has
acted inconsistently with Article 7.4 because, as of the date of establishment of this panel, it had
failed to liberalize the safeguard measures", Japan argues that the Panel does not discuss the
argument raised by Japan in paragraphs 56 and 57 of its comments on Ukraine's responses to the
questions from the Panel about whether the Panel can review a measure which did not exist at the
time of the establishment of the panel. Japan makes no specific request for a change.

13 Particularly if the existence and location of the supporting confidential information in the record of the
investigation is identified in the public report, even though the confidential information itself is not.
14 Japan's response to Panel question No. 22.

6.34. The Panel recalls that on 12 February 2014, the competent authorities adopted Decision No.
SP-306/2014/4423-06 that provided for the progressiv e liberalization of the safeguard measure at
issue. Although that decision was published an d entered into force on 28 March 2014, which was
two days after the date of establishment of this Panel, the decision was taken before the date of
establishment of this Panel. We further note that Japan at paragraphs 56 and 57 of its comments
on Ukraine's responses to questions from the Panel also argues that actions by a responding party
subsequent to the establishment of a panel can be taken into account as evidence to review the
WTO-consistency of the measure at issue. Nevertheless, in view of Japan's comment we deleted
the first sentence of paragraph 7.362.
6.35. Regarding Section 7.6.1, Ukraine recognizes the arguments of the Panel concerning the
application and liberalization of its safeguard measure under Articles 5.1, 7.1, and 7.4. Ukraine
strongly agrees that the obligations under Articles 7.4 and 12.2 are closely related but not similar.
Ukraine further comments, in relation to Section 7.6.2, that Article 7.4, which provides for the
obligation to progressively liberalize a safeguard measure, is dissimilar to and independent from
the obligations imposed by Articles 5.1 and 7. 1, which concern the extent of the safeguard
measure. Ukraine makes no specific request for a change.
6.36. Japan submits that it fails to see what Ukraine is requesting the Panel to review, since
Ukraine's comments express its agreement with the Panel's findings.
6.37. The Panel made no change in response to Ukraine's comment.
6.7 Claims under Article II:1(b) of the GATT 1994
6.38. Regarding paragraph 7.393, Japan considers that addressing its claim under Article II:1(b)
of the GATT 1994 is important since that Articl e constitutes the fundamental obligation that
Ukraine has violated by invoking Article XIX and the Agreement on Safeguards. Japan further
argues that any compliance action by Ukraine must be fully consistent with this fundamental
obligation. Japan makes no specific request for a change.
6.39. The Panel did not modify paragraph 7.393. We are not convinced that a finding on the
consistency of Ukraine's safeguard measure with Ar ticle II:1(b) is necessary to enable the DSB to
make sufficiently precise recommendations and rulings. In most panel reports dealing with
disputes concerning safeguard measures, the complaining party either did not make a claim under
Article II:1(b)
15 or made a claim under Article II:1(b) in the alternative to claims under Article XIX
and the Agreement on Safeguards .16 On one occasion, the complaining party made a claim under
Article II:1(b) and the panel exercised judicial ec onomy in respect of that claim, since a finding
was not considered necessary to enable the DS B to make sufficiently precise recommendations
and rulings.17
6.8 Claims relating to the conduct of the investigation and the investigation report
6.40. Regarding paragraph 7.410, Japan requests that the Panel delete the reference to the
absence of specific concerns raised by Japan in th e last sentence of that paragraph. Japan argues
that it did raise specific concerns in its submissions to the Panel. Japan notes that in the course of
the proceedings, it pointed out that the competen t authorities had provided to Japan only very
limited information including in the Notice of Initiation, which led Japan to submit only brief
general observations. Furthermore, Japan recalls its statement that neither the Notice of Initiation
nor any other document specifies the starting date of the period of investigation.
6.41. The Panel deleted the reference in question from the last sentence of paragraph 7.410.
After reviewing paragraphs 7.404 to 7.412 in response to Japan's comment, we also deleted the
third and fourth sentence of paragraph 7.411, si nce they addressed a broader argument than the
one advanced by Japan.

15 See, for example, the panel reports in US – Line Pipe, US – Steel Safeguards, Argentina – Peaches,
US – Wheat Gluten, Argentina – Footwear, and Korea – Dairy.
16 See Panel Report, Dominican Republic – Safeguard Measures, para.7.110.
17 See Panel Report, US – Lamb, para. 7.280.

6.42. Regarding paragraph 7.431, Japan requests that the Panel add a sentence after the
third sentence to refer to its response to a question from the Panel.
6.43. The Panel added the proposed sentence to paragraph 7.431, which summarizes Japan's
arguments.
6.44. Regarding Sections 7.8.1 and 7.8.2, Uk raine recognizes the conclusions of the Panel
regarding the procedural obligations under Articles 3.1 and 4.2. Ukraine maintains that its Ministry
provided all interested parties, including Japan, with the required information and therefore
adhered to the requirement concerning reasonable public notice. Ukraine fully agrees that no
information in addition to that provided during the investigation and in the relevant notices and
Key Findings needed to be made available to the interested parties. Furthermore, Ukraine
observes that the interested parties were given full access to all non-confidential information
available to the Ministry (including the argume nts and presentations of the other interested
parties).
6.45. Japan submits that, contrary to Ukrain e's comments, the Panel did not find that no
information in addition to that provided during the investigation and in the relevant notices and
Key Findings needed to be made available to the interested parties. Japan further comments that
the Panel did not find that the interested parties were given full access to all non-confidential
information available to the Ministry.
6.46. The Panel made no change in response to Ukraine's comment.
6.9 Claims relating to notifications, prior consultations, and the level of concessions
6.47. Regarding footnote 506, Japan requests that the Panel add a reference to Japan's response
to Panel question No. 106, as the arguments already referenced in footnote 506 were reiterated in
that response.
6.48. The Panel made the appropriate changes in footnote 506.
6.49. Regarding Section 7.9.1.1.1, Ukraine comments that it did not have all the relevant
documents available in one of the WTO official languages and that an additional effort was
therefore required of it to translate these docu ments when making notifications to the Committee
on Safeguards. Ukraine points out that this is especially true for a newly-acceded Member with
limited resources. Ukraine further comments that this factor has to be taken into proper
consideration in the Panel's conclusion regarding the immediacy of the notification under
Article 12.1(a). Ukraine makes no specific request for a change.
6.50. Japan notes that Ukraine merely reiterates the arguments it presented in its submissions.
Japan is of the view that there is no need to co nsider these arguments further, since the Panel has
already addressed them.
6.51. The Panel made no change in response to Ukraine's comment. Section 7.9.1.1.1 already
takes appropriate account of the need to translate relevant documents into an official language of
the WTO.
6.52. Regarding Section 7.9.1.1.2, Ukraine comment s that the decision on the actual application
of the safeguard measure and the finalization of the Commission's conclusions on the threat of
injury caused by increased imports occurred on 14 March 2013 and not on 28 April 2012. Ukraine
submits that no position could be considered offici al and could be publicly disseminated before the
Notice of Imposition was published on 14 March 2013. Ukraine states that it therefore agrees with
the position of the Panel concerning the notification under Article 12.1(c). At the same time,
Ukraine maintains its view that its joint notification under Articles 12.1(b) and 12.1(c) was made
immediately upon finding a threat of serious injury caused by increased imports and taking a
decision to apply the safeguard measure. Ukraine makes no specific request for a change.
6.53. Japan responds that the Panel has already dismissed the arguments that Ukraine reiterates
in its comments and that they should therefore not be taken into account.

6.54. The Panel made no change in response to Ukraine's comment. Section 7.9.1.1.2 already
takes appropriate account of the arguments presented by Ukraine.
6.55. Regarding Section 7.9.2, Ukraine "maintains" that adequate opportunity for prior
consultations was provided to interested Members as the Ukrainian competent authorities provided
them with all necessary information. However, Ukraine makes no specific request for a change.
6.56. Japan notes that Ukraine's comments in this regard relate to Section 7.9.3, not 7.9.2.
Furthermore, Japan argues that Ukraine's comments should be dismissed because they are no
different from Ukraine's arguments made during th e panel proceedings and have been rejected by
the Panel.
6.57. The Panel agrees that Ukraine's comments relate to Section 7.9.3. In the absence of any
specific request from Ukraine, we made no change to this section.
6.58. Regarding paragraph 7.533, Japan submits that the Panel's argument summary does not
fully reflect its submissions. Japan requests the Panel to add an additional sentence after the
first sentence of this paragraph.
6.59. The Panel modified paragraph 7.533 to better reflect Japan's position.
6.60. Regarding Section 7.9.5, Ukraine "maintains" that since the consultations with WTO
Members, including Japan, were meaningful and an adequate opportunity for prior consultations
was provided to interested Members pursuant to Article 12.3, Ukraine did endeavour to maintain a
substantially equivalent level of concessions and other obligations to that existing under the
GATT 1994 between it and the exporting Members which would be affected by the safeguard
measure. Ukraine makes no specific request for a change to this section.
6.61. Japan requests the Panel to dismiss these arguments because the Panel has already fully
addressed Ukraine's arguments in Sections 7.9.3 and 7.9.4 of the Interim Report.
6.62. The Panel made no modifications to this se ction, since Ukraine merely reiterates a position
that was considered and rejected by the Panel, for the reasons set out in Section 7.9.5.
6.10 Conclusions
6.63. Ukraine in a concluding comment states that the Panel's Interim Report "denies the legal
right of Ukraine to apply safeguard measures as a developing country when the underlying
conditions are met".
18 Ukraine makes no specific request for a change in this respect.
6.64. The Panel notes that this was the first time in the context of these panel proceedings that
Ukraine referred to itself as a developing country. The comment in question relates to the right to
apply a safeguard measure. However, neither Article 9, which contains additional provisions
concerning developing country Members, nor any other provision of the Agreement on Safeguards
provides for special or differential treatment fo r developing country Members with regard to the
conditions and circumstances under which a safeguard measure can be applied – all WTO Members
are subject to the same requirements in this regard.
7 FINDINGS
7.1 Preliminary matters
7.1. Before examining Japan's claims in the present dispute, the Panel will describe in more detail
Ukraine's safeguard measure at issue and the underlying investigation. Next, we will go on to
provide an overview of Japan's claims and descr ibe the order in which we will carry out our
assessment. We will then recall some general principles governing the standard of review
applicable to disputes arising under the Agreemen t on Safeguards and the GATT 1994. Finally, we
will consider which is the relevant Ukrainian document setting out supporting findings and

18 Ukraine's comments on the Interim Report of the Panel, p. 6.

conclusions by the Ukrainian competent authorities on the basis of which we will conduct our
review.
7.1.1 The safeguard measure at issue
7.2. The present dispute concerns a safeguard measure that Ukraine's competent authorities
imposed in April 2013 for three years on imports of passenger cars from all sources, and the
investigation that led to the imposition of the measure. More specifically, Japan's claims concern
the following measures, and their amendments, re placements, implementing acts or any other
related measure in connection with them:
a. Decision No. SP–259/2011/4402-27 of the Interdepartmental Commission on Foreign
Trade of 30 June 2011 on the initiation and cond ucting of the investigation process as to
import into Ukraine of motor cars
19 irrespective of the country of origin and export, and
the Notice concerning it;20
b. Decision No. SP-272/2012/4423-08 of the Interdepartmental Commission on Foreign
Trade of 6 March 2012 whereby the duration of the investigation was extended by
60 days, and the Notice concerning it;21
c. Decision No. SP-275/2012/4423-08 of the Interdepartmental Commission on Foreign
Trade of 28 April 2012 on the imposition of safeguard measures on imports of motor
cars to Ukraine regardless of country of origin and export, and the Notice concerning
it;22
d. Decision No. SP-288/2013/4423-06 of the Interdepartmental Commission on Foreign
Trade of 11 April 2013 on the amendments to the Commission's decision No. SP-
275/2012/4423-08 of 28 April 2012 on the application of safeguard measures on imports
of cars in Ukraine regardless of their country of origin and export, and the Notice
concerning it;
23
e. Decision No. SP-306/2014/4423-06 of the Interdepartmental Commission on Foreign
Trade of 12 February 2014 that provides for progressive liberalization of the measure,
and the Notice concerning it.
24
7.3. The safeguard measure at issue applies to imports of the following products:
Motor cars and other motor vehicles principa lly designed for the transport of persons
(category M1 – vehicles with no less than 4 wheels and no more than 8 sitting places
except driver sitting place), with spark-igni tion internal combustion engine and crank
gear of a cylinder capacity exceeding 1000 c m
3 but not exceeding 2200 c m3, new,
classified under UKTZED25 codes 8703 22 10 00 and 8703 23 19 10.
7.4. It takes the form of special customs duties imposed at different rates differentiated by engine
volumes:
– for cars of a cylinder capacity exceeding 1000 c m3 but not exceeding
1500 cm3: 6.46%

19 We note that the English translation of the Ukrainian documents refers consistently to the term
"motor cars". For the purpose of this Report, we prefer to use the term "passenger cars" in view of the specific
category of product covered by the measure at issue. We note that the term "motor cars" may cover
potentially a wider category of cars.
20 A Notice concerning this decision was published in the Uryadovyi Kuryer No. 118 on 2 July 2011.
21 A Notice concerning this decision was published in the Uryadovyi Kuryer No. 44 on 7 March 2012.
22 A Notice concerning this decision was published in the Uryadovyi Kuryer No. 48 on 14 March 2013.
23 A Notice concerning this decision was published in the Uryadovyi Kuryer No. 75 on 20 April 2013.
24 A Notice concerning this decision was published in the Uryadovyi Kuryer No. 57 on 28 March 2013.
25 Ukrainian Foreign Economic Activity Commodity Classification Code ("Customs Code of Ukraine").

– for cars of a cylinder capacity exceeding 1500 c m3 but not exceeding
2200 cm3: 12.95%.
7.5. These special duty rates were subsequently liberalized in accordance with the following
schedule:
- for cars with a cylinder capacity exceeding 1000 cm 3 but not exceeding
1500 cm3, classified under UKTZED code of 8703 22 10 00:
i. In 12 months from the day of applying the measure (i.e.
14 March 2013): 4.31%
ii. In 24 months from the day of applying the measure (i.e.
14 March 2013): 2.15%.
- for cars with a cylinder capacity exceeding 1500 cm 3 but not exceeding
2200 cm3, classified under UKTZED code of 8703 23 19 10:
i. In 12 months from the day of applying the measure (i.e.
14 March 2013): 8.63%
ii. In 24 months from the day of applying the measure (i.e.
14 March 2013): 4.32%.
7.1.2 Procedure carried out by the competent authorities26
7.6. By Decision No. SP–259/2011/4402-27 of 30 June 2011 of the Interdepartmental
Commission on Foreign Trade of Ukraine 27, published in the official gazette Uryadovyi Kuryer on
2 July 2011, the Ministry of Economic Developm ent and Trade of Ukraine initiated a safeguard
investigation into:
a. Motor cars and other motor vehicles principally designed for the transport of persons
(other than those of heading 8702), including station wagons and racing cars with spark-
ignition internal combustion engine and crank gear of a cylinder capacity exceeding 1000
cm3 but not exceeding 1500 cm3, new, classified under UKTZED code 8703 22 10 00;
b. Motor cars and other motor vehicles principally designed for the transport of persons
(other than those of heading 8702), including station wagons and racing cars with spark-
ignition internal combustion engine and crank gear of a cylinder capacity exceeding 1500
cm3 but not exceeding 2200 cm3, new, classified under UKTZED code 8703 19 10 00.28

26 Throughout this Report, we use "the competent authorities" to refer to the Ukrainian competent
authorities responsible for the safeguard investigation and the adoption and imposition of the safeguard
measure pursuant to the Safeguard Law, namely the Ministry of Economic Development and Trade of Ukraine
(hereafter the "Ministry") and the Interdepartmental Commission on Foreign Trade of Ukraine (hereafter the
"Commission").
27 Decision No. SP–259/2011/4402-27 of the Interdepartmental Commission on Foreign Trade "On
initiation and conducting of the investigation process as to import into Ukraine of motor cars irrespective of the
country of origin and export". See also Notice on Initiation and Conducting of the Safeguard Investigation on
Import of Motor Cars to Ukraine Regardless of Country of Origin and Export, as published in the Uryadovyi
Kuryer No. 118 of 2 July 2011 (Exhibit JPN-3).
28 Ukraine clarified that the Notice of Initiation contained a clerical error regarding this particular
UKTZED code. According to Ukraine, the correct reference is UKTZED code 8703 23 19 10 as reflected in
Decision No. SP-275/2012/4423-08 of the Interdepartmental Commission on Foreign Trade of 28 April 2012 on
the imposition of safeguard measures on imports of motor cars to Ukraine regardless of the country of origin
and export, and the Notice of 14 March 2013 referring to it. Ukraine confirmed that despite this error, the
product concerned was the same throughout the investigation at issue. See Ukraine's response to Panel
question Nos. 58 and 109.

7.7. The investigation was initiated following an application lodged by the Association of the
Ukrainian Carmakers "UkrAvtoprom" on behalf of three Ukrainian automobile manufacturers. 29
Ukraine notified this decision to the WTO Co mmittee on Safeguards on 13 July 2011 and the
notification was circulated to WTO Members on 15 July 2011.30
7.8. The investigation period was established as of 1 January 2008 to 31 December 2010. During
the course of the investigation, the competent authorities extended the duration of the
investigation by 60 days by Decision No. SP-272/2012/4423-08 of 6 March 2012.
31
7.9. On 11 April 2012, Ukraine sent a letter to th e Embassy of Japan in Ukraine inviting Japan to
consultations.32 Attached to that letter was a document entitled "Key Findings of the Ministry of
Economic Development and Trade of Ukraine Based on Special Investigation on Import of Motor
Cars to Ukraine Regardless of Country of Origin and Export"
33, in which the Ministry of Economic
Development and Trade concluded that:
Given the foregoing and results of analysis of information obtained in the course of
the safeguard investigation, the Ministry concludes that there is sufficient evidence
and grounds for having the Commission to review the proposals concerning
application of safeguard measures regarding the import of motor cars to Ukraine
regardless of the country of origin and export, for a three-year period.
…
The safeguard measures shall be applied in the form of a special duty for the import of
the above-mentioned products into Ukraine depending on engine volume: for those
exceeding 1000 cm
3, but not exceeding 1500 cm3– at the rate of 6.46%, and for those
exceeding 1500 cm3, but not exceeding 2200 cm3 – at the rate of 15.1%.
Consultations between Ukraine and Japan took place in Kiev on 19 April 2012.

7.10. On 28 April 2012, by Decision No. SP -275/2012/4423-08 of the Interdepartmental
Commission on Foreign Trade, the competent authorities decided to impose a safeguard measure
on imports of motor cars to Ukraine regardless of the country of origin or export.
34
7.11. On 14 March 2013, the Notice of Imposition of a safeguard measure was published in the
official gazette.35 The Notice of Imposition provides in relevant part:
Taking all of this into account, the Commission has decided that:
- During the period of investigation, import of motor cars to Ukraine regardless of the
country of origin and export increased relative to domestic production by the domestic
industry, and that such increase took place under conditions and volume which
threatened to cause serious injury to the domestic industry;

29 Application of the Association of the Ukrainian Carmakers "UkrAvtoprom"(applied on behalf of Ltd. "PA
KrACZ", CJSC "Zaporizhia Automobile Building Plant" ("ZAZ"), CJSC "Eurocar") on the initiation and
conducting of the investigation process as to import into Ukraine of motor cars classified under UKTZED code
8703 22 10 00 and under UKTZED code 8703 23 19 10.
30 Notification under Article 12.1(a) of the Agreement on Safeguards on initiation of an investigation and
the reasons for it – Ukraine (Motor Cars), WTO document G/SG/N/6/UKR/9 (Exhibit JPN-4).
31 See footnote 21 above.
32 The letter dated 11 April 2012 from the competent authorities to the Embassy of Japan in Ukraine
specifically refers to the proposed consultations as consultations pursuant to Article 12.3 of the Agreement on
Safeguards. Japan contends that these consultations were not consultations pursuant to Article 12.3. See
para. 7.528 below.
33 Key Findings of the Ministry of Economic Development and Trade of Ukraine Based on Special
Investigation on Import of Motor Cars to Ukraine Regardless of Country of Origin and Export (Exhibit JPN–6
Revised Version).
34 Decision No. SP-275/2012/4423-08 of the Interdepartmental Commission on Foreign Trade, as
referred to in Exhibit JPN-7 and Exhibit JPN-2. The Decision itself has not been published.
35 The Notice of Imposition of Safeguard Measures on Imports of Motor Cars to Ukraine Regardless of
Country of Origin or Export, published in the Uryadovyi Kuryer No. 48 of 14 March 2013 (Exhibit JPN-2).

- The national interests of Ukraine require imposition of safeguard measures against
such imports.
Therefore, pursuant to Article 16 of the [Safeguards Law of Ukraine], the Commission
approved Decision No. SP-275/2012/4423-08 on 28 April 2012, according to which
safeguard measures were imposed against imports of the Product to Ukraine
regardless of the country of origin and export, which is defined as follows: Motor cars
and other motor vehicles principally desi gned for the transportation of persons
(category M1 – vehicles with no less than 4 wheels used to transport passengers and
with no more than 8 sitting places except driver sitting place), with spark-ignition
internal combustion engine and crank gear of a cylinder capacity exceeding 1000 c m
3
but not exceeding 2200 c m3, new, classified under UKTZED codes 8703 22 10 00 and
8703 23 19 10.
Safeguard measures shall be imposed for 3 years in the form of a special duty
applicable to imports into Ukraine of the above-mentioned commodities based on
engine volume:
- 1000 cm
3- 1500 cm3- 6.46%
- 1500 cm3- 2200 cm3- 12.95%.
According to Article 21 of the [Safeguard s Law of Ukraine], the above-mentioned
safeguard measures shall not apply to imports to Ukraine of the Product originating
from the following countries – members of the WTO: Angola, Bangladesh, Benin,
Burkina Faso, Burundi, Cambodia, Central African Republic, Chad, Congo, Djibouti,
Gambia, Guinea, Guinea-Bissau, Haiti, Lesotho, Madagascar, Malawi, Mali, Mauritania,
Mozambique, Myanmar, Nepal, Niger, Rw anda, Senegal, Sierra Leone, Solomon
Islands, Tanzania, Togo, Uganda and Zambia.
The Commission's Decision shall enter into force 30 days after the official publication
of this Notice.
36
The aforementioned safeguard measure thus became effective as of 14 April 2013 37 for a period of
3 years.

7.12. On 21 March 2013, Ukraine submitted to the WTO Committee on Safeguards a notification
pursuant to Articles 12.1(b) and (c) of the Agreem ent on Safeguards and footnote 2 of Article 9 of
the Agreement on Safeguards. The notification was circulated to WTO Members on
25 March 2013.
38
7.13. On 11 April 2013, the competent authorities, by Decision No. SP-288/2013/4423-06 "On
amendments to the decision of the Interdepartmental Commission on International Trade No. SP-
275/2012/4423-08 of 28 April 2012 on the application of safeguard measures on imports of cars in
Ukraine regardless of their country of origin and export"
39, suspended the safeguard measure from
20 April 2013 until 28 February 2014 for certain types of cars with hybrid propulsion, namely:
Motor cars and other motor vehicles principa lly designed for the transport of persons
(category M1 – vehicles with no less than 4 wheels and no more than 8 sitting places
except driver sitting place), with spark-igni tion internal combustion engine and crank

36 Notice of Imposition of 14 March 2013, pp. 3 and 4.
37 Since the Notice indicates that the safeguard measure was to go into force 30 days after its
publication, i.e. 14 March 2013, based on the calendar for 2013, it would appear that the date of entry into
force of the safeguard measure should have been Saturday, 13 April 2013. However, Ukraine, in its response
to Panel question No. 98, stated that the date of entry into force was actually Sunday, 14 April 2013.
38 Notification under Article 12.1(b) of the Agreement on Safeguards on finding a serious injury or threat
thereof caused by increased imports, Notification pursuant to Article 12.1(c) of the Agreement on Safeguards
and Notification pursuant to Article 9, footnote 2, of the Agreement on Safeguards, WTO document
G/SG/N/8/UKR/3-G/SG/N/10/UKR/3-G/SG/N/11/UKR/1, 25 March 2013 (Exhibit JPN-7).
39 WTO document G/SG/N/10/UKR/3/Suppl.1, 22 May 2013.

gear of a cylinder capacity exceeding 1000 c m3 but not exceeding 2200 c m3, new,
classified under UKTZED codes 8703 22 10 00 and 8703 23 19 10 with hybrid power
system (electric motor-driven wheels).
This decision was published on 20 April 2013 and notified to the WTO Committee on Safeguards on
20 May 2013.40

7.14. On 12 February 2014, the competent authorities adopted Decision No. SP-306/2014/4423-
06 that provides for progressive liberalization of the measure. 41 This decision became effective on
the date of its publication, i.e. on 28 March 2014, and was notified to the WTO Committee on
Safeguards on the same day.42
7.1.3 Overview of claims and order of the Panel's analysis
7.15. Japan set out the following claims in its request for the establishment of a panel:43
i. Ukraine acted inconsistently with Articles 3.1 and 4.2(c) of the Agreement on
Safeguards because it failed to publish a report setting forth its findings and
reasoned conclusions reached on all pertinent issues of fact and law and a detailed
analysis of the case under investigation as well as a demonstration of the relevance
of the factors examined;
ii. Ukraine acted inconsistently with Article 3.1 of the Agreement on Safeguards
because it failed to conduct a proper investigation that includes reasonable public
notice to all interested parties and the opportunities for them to present evidence
and their views;
iii. Ukraine acted inconsistently with Article XIX:1(a) of the GATT 1994 and Articles 3.1,
4.2(c) and 11.1(a) of the Agreement on Safe guards because it failed to demonstrate
the existence of any "unforeseen developments"; failed to demonstrate a logical
connection between the increase in imports and the alleged "unforeseen
developments"; and failed to provide reasoned and adequate findings and
conclusions with regard to such "unforeseen developments";
iv. Ukraine acted inconsistently with Article XIX:1(a) of the GATT 1994 and Articles 3.1,
4.2(c) and 11.1(a) of the Agreement on Safe guards because it failed to demonstrate
and evaluate the effect of the obligations incurred under the GATT 1994 and how
that effect has resulted in the increase in imports; and failed to provide reasoned
and adequate findings and conclusions with regard to the alleged effect of obligations
incurred under the GATT 1994;
v. Ukraine acted inconsistently with Article XIX:1(a) of the GATT 1994 and Articles 2.1,
3.1, 4.2(a), 4.2(c) and 11.1(a) of the Agreement on Safeguards because it failed to
demonstrate that the increase in imports was the result of unforeseen developments
and of the effect of obligations incurred und er the GATT 1994; failed to establish an
increase in imports in a manner consistent with Article XIX:1(a) of the GATT 1994
and Articles 2.1 and 4.2(a) of the Agreem ent on Safeguards; and failed to provide

40 Notification pursuant to Article 12.1(c) of the Agreement on Safeguards, WTO document
G/SG/N/10/UKR/3/Suppl.1, 22 May 2013.
41 Decision № SP-306/2014/4423-06, published in the Uryadovyi Kuryer, No. 57 of 28 March 2014
(Exhibit JPN-9).
42 Notification under Article 12.1(b) of the Agreement on Safeguards on finding a serious injury or threat
thereof caused by increased imports; Notification under Article 12.1(c) of the Agreement on Safeguards on
taking a decision to apply a safeguard measure; Notification pursuant to Article 9, footnote 2, of the
Agreement on Safeguards, WTO document G/SG/N/8/UKR/3/Suppl.1-G/SG/N/10/UKR/3/Suppl.2-
G/SG/N/11/UKR/1/Suppl.1, 31 March 2014 (Exhibit JPN-9).
43 Japan's first written submission, para. 377; second written submission, para. 298. We observe that
although Japan identified a claim under Article X:3(a) of the GATT 1994 in its request for the establishment of
a panel, it has not raised any such claim during the panel proceedings, let alone provided arguments to
support such a claim. Therefore, this Report is based on the premise that this claim was not pursued by Japan.

reasoned and adequate findings and conclusions with regard to the increase in
imports;
vi. Ukraine acted inconsistently with Article XIX:1(a) of the GATT 1994 and Articles 2.1,
3.1, 4.1(a), 4.1(b), 4.2(a), 4.2(b), 4.2(c) and 11.1(a) of the Agreement on
Safeguards because it failed to examine all relevant factors and failed to provide
reasoned and adequate findings and conclusions of how the facts support its
determination of serious injury or threat of serious injury;
vii. Ukraine acted inconsistently with Article XIX:1(a) of the GATT 1994 and Articles 2.1,
3.1, 4.1(a), 4.1(b), 4.2(a), 4.2(b), 4.2(c) and 11.1(a) of the Agreement on
Safeguards because it failed to demonstrat e the existence of a causal link between
the alleged increased imports and the alleged serious injury or threat thereof; failed
to make a proper non-attribution analysis and failed to provide reasoned and
adequate findings and conclusions regarding the existence of a causal link between
the increased imports and the alleged injury or threat of injury and non-attribution of
other factors;
viii. Ukraine acted inconsistently with Article XIX:1(a) of the GATT 1994 and Articles 3.1,
4.2(c), 5.1, 7.1, 7.4 and 11.1(a) of the Agreement on Safeguards because it has
failed to apply the safeguard measure "only to the extent necessary to prevent or
remedy serious injury and to facilitate adju stment"; failed to progressively liberalize
the safeguard measure by submitting a relevant timetable for progressive
liberalization; and failed to provide reasoned and adequate findings and conclusions
as to why the measure is necessary to prevent or remedy the alleged serious injury;
ix. Ukraine acted inconsistently with Article II:1(b) of the GATT 1994 because it
imposed duties which are in excess of those set forth in its schedule through the
unlawful safeguard measures at issue;
x. Ukraine acted inconsistently with Articles 12.1 and 12.2 of the Agreement on
Safeguards because it did not notify immediately the Committee on Safeguards upon
initiating the safeguard investigation, making a finding of serious injury and taking a
decision to apply safeguard measures and because the initial notification made by
Ukraine did not include "all pertinent inform ation" as required by Article 12.2 of the
Agreement on Safeguards;
xi. Ukraine acted inconsistently with Article 12.3 of the Agreement on Safeguards
because it did not provide adequate opportunities for prior consultations on the
proposed safeguard measures and because the consultations held in April 2012 did
not fulfil the requirements laid down in Article 12.3 of the Agreement on Safeguards;
xii. Ukraine acted inconsistently with Article 12.5 of the Agreement on Safeguards
because it did not notify immediately to the Council for Trade in Goods the results of
any consultations referred to in Article 12 of the Agreement on Safeguards; and
xiii. Ukraine acted inconsistently with Article 8.1 of the Agreement on Safeguards
because it did not endeavour to maintain a substantially equivalent level of
concessions and other obligations to that existing between Ukraine and Japan under
the GATT 1994, in accordance with Article 12.3 of the Agreement on Safeguards.
7.16. Japan also requests the Panel to exercise its authority under the second sentence of
Article 19.1 of the DSU to suggest ways in which Ukraine could implement the recommendations of
the Panel. In particular, Japan requests the Pane l to suggest that Ukraine revoke its definitive
safeguard measure.
44 Japan considers that in the present dispute, the size and number of errors
made by the competent authorities during the safeguard investigation resulted in multiple
inconsistencies with the Agreement on Safeguards and the GATT 1994, so that the only way that

44 Japan's first written submission, para. 374.

Ukraine could properly implement possible recommen dations of the Panel is the revocation of its
definitive safeguard measures.45
7.17. Ukraine requests that all of Japan's claims be rejected.
7.18. The Panel notes that under the Agreement on Safeguards and Article XIX of the GATT 1994,
a Member wishing to impose a safeguard measure must comply with two main sets of
requirements. The first comprises substantive requirements, including the circumstances and
conditions
46 that must be demonstrated to justify the application of a safeguard measure.
Specifically, a Member must demonstrate that, as a result of unforeseen developments and of the
effect of the obligations incurred under the GATT 1994, the product to be subjected to a safeguard
measure is being imported into the territory of that Member in such increased quantities and under
such conditions as to cause or threaten to cause serious injury to the domestic industry in that
territory producing like or directly competitive products. The second comprises procedural
requirements, including requirements to allow inte rested parties to present evidence and views,
transparency requirements such as notifications to the WTO Committee on Safeguards, and
procedural requirements to provide an opportunity for consultations to other Members.
7.19. We observe that Japan has advanced claims relating to both substantive and procedural
requirements. We will begin our assessment wi th the claims concerning the substantive
requirements. Specifically, we will first examine Japan's claims relating to unforeseen
developments and the effect of GATT 1994 obligatio ns. We will then continue with the claims
relating to the conditions, namely, increased imports, serious injury or threat thereof and the
causal link between these two conditions for imposing a safeguard measure. Next, we will turn to
the claims that concern, not the right to apply any safeguard measure, but the particulars of the
safeguard measure actually imposed. These are the claims relating to the necessity of the
safeguard measure at issue and its liberalization, as well as Article II:1(b) of the GATT 1994. After
that, we will address the claims concerning the procedural requirements. This analysis will begin
with the claims concerning the investigative process and the resulting investigation report. We will
end with the claims concerning, or linked to, the notification and consultation requirements.
7.20. In addressing these claims, we will make us e, as appropriate, of the principle of judicial
economy. According to the Appellate Body, this principle:
allows a panel to refrain from making multiple findings that the same measure is
inconsistent with various provisions when a single, or a certain number of findings of
inconsistency, would suffice to resolve the dispute." Thus, panels need address only
those claims "which must be addressed in order to resolve the matter in issue in the
dispute", and panels "may refrain from ruling on every claim as long as it does not
lead to a 'partial resolution of the matter'." Nonetheless, the Appellate Body has
cautioned that "[t]o provide only a partial re solution of the matter at issue would be
false judicial economy", and that "[a] panel has to address those claims on which a
finding is necessary in order to enable the DSB to make sufficiently precise
recommendations and rulings so as to allo w for prompt compliance by a Member with
those recommendations and rulings 'in order to ensure effective resolution of disputes
to the benefit of all Members.'
47
7.21. Accordingly, the Panel will not necessarily ma ke findings on all claims put forward by Japan
in this dispute.
7.1.4 Standard of review
7.22. The Agreement on Safeguards is silent as to the standard of review to be applied by panels
in reviewing the WTO-consistency of safeguard measures and the associated investigations.

45 Japan's first written submission, para. 376.
46 See section 7.2 below.
47 Appellate Body Report, Argentina – Import Measures, para. 5.190. (quoting Appellate Body Reports,
Canada – Wheat Exports and Grain Imports, para. 133; US – Wool Shirts and Blouses, p. 19, DSR 1997:I,
p. 340; US – Tuna II (Mexico), paras. 403-404; US – Upland Cotton, para. 732; Australia – Salmon,

Previous panel and Appellate Body reports have es tablished that the general standard of review
contained in Article 11 of the DSU is applicable to disputes involving claims of violation of the
Agreement on Safeguards and Article XIX of the GATT 1994.
48
7.23. Article 11 of the DSU requires a panel to make an objective assessment of the matter
before it, including an objective assessment of th e facts of the case and the applicability of and
conformity with the relevant agreements.49 In US – Cotton Yarn, the Appellate Body examined the
scope of this general rule regarding the standard of review applicable to disputes under the
Agreement on Safeguards and summarized its views as follows:
panels must examine whether the competent authority has evaluated all relevant
factors; they must assess whether the competent authority has examined all the
pertinent facts and assessed whether an adequate explanation has been provided as
to how those facts support the determination; and they must also consider whether
the competent authority's explanation addresses fully the nature and complexities of
the data and responds to other plausible interpretations of the data. However, panels
must not conduct a de novo review of the evidence nor substitute their judgement for
that of the competent authority.
50
7.24. As explained by the Appellate Body, th e standard of review applicable to panels'
examination of a competent authorities' determination involves neither a de novo review nor "total
deference" to the competent authorities' determinations. 51 Rather, a panel is required to assess
whether the competent authorities have examined all the relevant facts and have provided a
reasoned and adequate explanation as to how the facts support their determination.
52 In US –
Lamb, the Appellate Body stated that:
a panel can assess whether the competent authorities' explanation for its
determination is reasoned and adequate only if the panel critically examines that
explanation, in depth, and in the light of the facts before the panel. Panels must,
therefore, review whether the competent authorities' explanation fully addresses the
nature, and, especially, the complexities, of the data, and responds to other plausible
interpretations of that data. A panel must find, in particular, that an explanation is not
reasoned, or is not adequate, if some altern ative explanation of the facts is plausible,
and if the competent authorities' explanatio n does not seem adequate in the light of
that alternative explanation.
53
7.25. We note that this standard of review was articulated by the Appellate Body in the context of
a claim under Article 4.2(a) of the Agreement on Safeguards. However, the Appellate Body in US –
Steel Safeguards made it clear that the same standard should be applied to other obligations
under the Agreement on Safeguards as well as to the obligations in Article XIX of the GATT 1994.54

48 See, e.g. Appellate Body Reports, Argentina – Footwear (EC), para. 120; and US – Lamb, paras. 100-
102; and Panel Report, Dominican Republic – Safeguard Measures, para. 7.4.
49 Article 11 of the DSU provides in relevant part that "[t]he function of panels is to assist the DSB in
discharging its responsibilities under this Understanding and the covered agreements. Accordingly, a panel
should make an objective assessment of the matter before it, including an objective assessment of the facts of
the case and the applicability of and conformity with the relevant covered agreements, and make such other
findings as will assist the DSB in making the recommendations or in giving the rulings provided in the covered
agreements".
50 Appellate Body Report, US – Cotton Yarn, para. 74 (referring at paras. 71-73 to Appellate Body
note that while the dispute in US – Cotton Yarn concerned a safeguard measure imposed under the Agreement
on Textiles and Clothing, the quoted statement and the other disputes referred to all concerned safeguard
measures imposed under the Agreement on Safeguards. Thus, the statement in US – Cotton Yarn is relevant to
the dispute before us.
51 Appellate Body Reports, US – Lamb, para. 101; US – Tyres (China), para. 123; US – Cotton Yarn,
52 Appellate Body Reports, US – Lamb, para. 103; US – Line Pipe, para. 217; and US – Steel
Safeguards, paras. 296-297.
53 Appellate Body Report, US – Lamb, para. 106.
54 Appellate Body Report, US – Steel Safeguards, para. 276 (stating that "[O]ur finding in those cases
[such as US – Lamb] did not purport to address solely the standard of review that is appropriate for claims

7.26. A panel's assessment of whether the competent authorities have complied with their
obligations under the Agreement on Safeguards an d Article XIX:1(a) of the GATT 1994 should be
based on the relevant report published by the authorities. 55 Article 3.1, last sentence, requires the
competent authorities to publish a report setting forth their findings and reasoned conclusions
reached on all pertinent issues of fact and law. Moreover, Article 4.2(c) obliges the competent
authorities to publish promptly, in accordance with the provisions of Article 3, a detailed analysis
of the case under investigation as well as a demonstration of the relevance of the factors
examined. The Appellate Body in US – Steel Safeguards stated in this respect that:
[i]t is precisely by 'setting forth findings and reasoned conclusions on all pertinent
issues of fact and law', under Article 3.1, and by providing 'a detailed analysis of the
case under investigation as well as a demonstration of the relevance of the factors
examined', under Article 4.2(c), that comp etent authorities provide panels with the
basis to 'make an objective assessment of the matter before it' in accordance with
Article 11.
56
The Appellate Body went on to conclude that:

the "reasoned conclusions" and "detailed analysis" as well as "a demonstration of the
relevance of the factors examined" that ar e contained in the report of a competent
authority, are the only bases on which a panel may assess whether a competent
authority has complied with its obligations under the Agreement on Safeguards and
Article XIX:1(a) of the GATT 1994.
57
7.27. Accordingly, our examination of the competent authorities' determinations will be based on
the report published by the competent authorities. With respect to the published report, the
Appellate Body also observed that panels should not be "left to 'deduce for themselves' from the
report of the competent authority the 'rationale for the determinations from the facts and data
contained in the report of the competent authority'".
58 Thus, the explanations contained in the
report must be "explicit", "clear and unambiguous", and must not "merely imply or suggest an
explanation".59 In case there is no reasoned and adequa te explanation in the published report to
support the competent authorities' determinations, "the panel has no option but to find that the
competent authority has not performed the analysis correctly".
60 This notably implies that
reasoning, analysis and demonstrations provided after publication of the report – i.e. ex post
explanations – are irrelevant and cannot be re lied upon to remedy any deficiencies of the
competent authorities' determinations.
7.28. The Appellate Body further stated, in US – Tyres, that "a panel should examine whether the
conclusions reached by the investigating authority are reasoned and adequate in the light of the
evidence on the record and other plausible alternative explanations". 61 Thus, for purposes of
assessing whether the explanations provided in th e published report are adequate, we will also
take into account relevant evidence submitted to us from the record of the investigation and
plausible alternative explanations for the developments relied upon by the competent authorities in
making their determination.

arising under Article 4.2 of the Agreement on Safeguards. We see no reason not to apply the same standard
generally to the obligations under the Agreement on Safeguards as well as to the obligations in Article XIX of
the GATT 1994").
55 See, e.g. Appellate Body Reports, US – Steel Safeguards, para. 299; US – Lamb, para. 105; and
Panel Report, Dominican Republic – Safeguard Measures, para. 7.9.
56 Appellate Body Report, US – Steel Safeguards, para. 299.
57 Ibid.
58 Ibid. para. 288.
59 Ibid. paras. 296- 297; and US – Line Pipe, para. 217.
60 Appellate Body Report, US – Steel Safeguards, para. 303.
61 Appellate Body Report, US – Tyres (China), para. 123. We note that this was a dispute concerning a
transitional safeguard measure based on the provisions of China's Protocol of Accession. However, in support of
the quoted statement, the Appellate Body referred to a number of Appellate Body Reports, including those in
Argentina – Footwear (EC), US – Lamb, US – Steel Safeguards and US – Wheat Gluten, which concerned the
Agreement on Safeguards.

7.1.5 Relevant Ukrainian documents
7.29. The Panel now turns to the question of which documents comprise the competent
authorities' "published report" within the meaning of Articles 3.1, last sentence, and 4.2(c). The
last sentence of Article 3.1 provides:
The competent authorities shall publish a report setting forth their findings and
reasoned conclusions reached on all pertinent issues of fact and law.
Article 4.2(c) provides that:

The competent authorities shall publish promptly, in accordance with the provisions of
Article 3, a detailed analysis of the case under investigation as well as a
demonstration of the relevant of the factors examined.
7.30. The verb "publish" is defined as "make generally known; declare or report openly;
announce; disseminate (a creed or system)".
62 We further note that the panel in Chile – Price Band
System ascertained the meaning of the verb "publish" in Article 3.1, last sentence, by considering
it in context and determined that in this particular context it "must be interpreted as meaning 'to
make generally available through an appropriate medium', rather than simply 'making publicly
available'".63 We see no reason not to follow this interpretation also in the present dispute.
7.31. The parties to this dispute do not agree as to which of two principal documents, the Notice
of 14 March 2013 and the Key Findings, sent to certain interested parties on 11 April 2012, we
should, or may, take into account in our analysis of Ukraine's safeguard measure. In addition,
Ukraine also views as relevant its Notificati on to the WTO Committee on Safeguards under
Articles 12.1(b) and (c), dated 21 March 2013.
7.32. According to Japan, in this dispute, the "published report" within the meaning of Articles 3.1
and 4.2(c) is the Notice of 14 March 2013, and Japan submits that the Panel should limit its
examination to that document. Japan contends that Ukraine itself, in the letter dated 17 June 2013
sent to Japan by its competent authorities
64, confirmed that the Notice of 14 March 2013 is the
report containing the findings and reasoned conclusions. Japan argues that the "published report"
must be "made generally available through an appropriate medium" 65, and that the "Key Findings"
were not made "generally available" and consequently were not "published". Japan also notes that
this document was not explicitly referred to in the Notice of 14 March 2013.
66
7.33. Ukraine submits that the Key Findings, the Notice of 14 March 2013 and the Notification
contained a non-confidential summary of findings and reasoned conclusions reached on all
pertinent issues of fact and law, as required by Articles 3.1 and 4.2(c). In Ukraine's view, these
documents can serve as a basis for the Panel's analysis of Japan's claims. Ukraine argues that
while the Key Findings were not published in the newspaper Uryadovyi Kuryer in the same way
that the Notice of 14 March 2013 was, it is up to the competent authorities to decide the
appropriate medium of publication, as long as the information is made publicly available. According
to Ukraine, the Key Findings were sent directly to the representatives of the affected exporting
countries in April 2012 in order to comply with Articles 3, 4, and 12 and Article XIX:2. Moreover,
Ukraine argues that the Key Findings, as well as any other non-confidential information on the
investigation, were also available to the interested parties, as any of the interested parties could
access any relevant non-confidential information upon a written request under Article 9.6 of
Ukraine's Safeguards Law.
67

62 The Shorter Oxford Dictionary (2002), Vol. 2, p. 2394.
63 Panel Report, Chile – Price Band System, para. 7.128.
64 Letter of the Ministry of Foreign Affairs of Ukraine to the Embassy of Japan in Ukraine, 17 June 2013,
(Exhibit JPN-11).
65 Panel Report, Chile – Price Band System, para. 7.128.
66 Japan's first written submission, paras. 53- 54; opening statement at the first meeting of the Panel,
paras. 40 and 44- 45; second written submission, paras. 26-28 and 30; opening statement at the second
meeting of the Panel, paras. 9–11; and Response to Panel question No. 117.
67 Ukraine's response to Panel question Nos. 5, 6, 10, 17, 34 and 36.

7.34. The Panel agrees that the Notice of 14 March 2013 constitutes a "published report" within
the meaning of Article 3.1, last sentence, and al so an "analysis" and "demonstration" within the
meaning of Article 4.2(c). The Notice was published in Ukraine's official gazette on
14 March 2013
68, and it sets forth the Commission's findings and reasoned conclusions, as well as
detailed analysis and a demonstration of the relevance of the factors examined.
7.35. Ukraine's notification to the WTO Committee on Safeguards under Articles 12.1(b) and (c) is
dated 21 March 2013. Since it contains no analysis , findings or reasoning in addition to those
included in the Notice of 14 March 2013, we do not consider it necessary to decide whether this
document was published by Ukraine within the meaning of Articles 3.1 and 4.2(c). Generally
speaking, the parties in their submissions have no t referred to this document, but rather to the
Notice of 14 March 2013 or the Key Findings.
7.36. Turning, finally, to the Key Findings, we note that they contain analysis and recommended
findings and conclusions of the Ministry addressed to the Commission. However, the Key Findings
are not specifically referred to in the Commission's Notice of 14 March 2013, which was published
later, nor have they been appended thereto. As regards publication, the Key Findings were sent
out to certain interested parties on 11 April 2012. But they were not "published" by Ukraine, in the
way the Notice of 14 March 2013 was. Although Ukraine argues that the Key Findings were sent
directly to some affected exporting countries, and were available on request to the interested
parties under Article 9.6 of Ukraine's Safeguards Law, we cannot conclude that this constitutes
publication for purposes of Articles 3.1 and 4.2(c) . Nothing in either Article 3.1 or Article 4.2(c)
suggests that publication may be limited to certain, or even all, interested parties. Moreover, we
fail to see how the Key Findings could be consider ed as having been "published" when, except for
those interested parties sent a copy by the comp etent authorities, interested parties needed to
make a specific written request to see the document.
69 Finally, we question whether interested
parties could, in fact, have seen the document, given that the relevant provision of Ukraine's
Safeguards Law allows interested parties to see information submitted by other interested parties,
but not "official documents of the Ministry...".
70 Therefore, in our view, as the Key Findings were
not "made generally available through an appropriate medium", we consider that they were not
"published" within the meaning of Articles 3.1 and 4.2(c). In the light of the foregoing, we
conclude that the Key Findings do not constitute the kind of published report required by
Articles 3.1 and 4.2(c). Indeed, as noted by Japan, Ukraine itself in a letter to Japan referred to
the Notice of 14 March 2013, but not the Key Findings, as the report within the meaning of
Articles 3.1 and 4.2(c).
71
7.37. Therefore, as stated previously, ou r examination of the competent authorities'
determinations in this case will be based on the published report, that is to say, the Notice of
14 March 2013. Nevertheless, the Key Findings unquestionably form part of the record of the
safeguard investigation at issue. That being the case, we will take them into account, as
appropriate, for purposes of understanding th e explanations provided in the Notice of
14 March 2013 and assessing their adequacy.
7.2 Claims relating to unforeseen develo pments and the effect of the obligations
incurred under the GATT 1994
7.38. The Panel now turns to examine Japan's claim of violation of Article XIX:1(a) and
Articles 3.1, 4.2(c) and 11.1(a) concerning the competent authorities' determination regarding
unforeseen developments and the effect of the obligations incurred under the GATT 1994.
7.39. Japan claims that Ukraine has failed to demonstrate the existence of and evaluate
unforeseen developments as required by Article XI X:1(a), Articles 3.1, 4.2(c) and 11.1(a), and as

68 Exhibit JPN-7, p. 4.
69 The panel in Chile – Price Band System similarly noted that "the Minutes … have not been 'published'
through any official medium. Rather, they were transmitted to the interested parties and placed at the disposal
of 'whoever wishes to consult them at the library of the Central Bank of Chile". Panel Report, Chile – Price Band
System, para. 7.128.
70 Article 9.6 of the Safeguards Law.
71 Exhibit JPN-11. The letter in question was sent in response to a letter from Japan in which Japan
inquired whether Ukraine had published a report within the meaning of Articles 3.1 and 4.2(c). Exhibit JPN-10.

a consequence, has acted inconsistently with these provisions. 72 In particular, Japan claims that
Ukraine has (i) failed to demonstrate the existence of unforeseen developments; (ii) failed to
demonstrate the existence of a logical connectio n between the alleged unforeseen developments
and the increased imports; and (iii) as a consequence failed to give reasoned and adequate
explanations on these issues thus acting inconsistently with Articles 3.1 and 4.2(c).
73
7.40. Japan also claims that Ukraine has acted inconsistently with Article XIX:1(a) and
Article 11.1(a) because it failed to demonstrate in its published report that it incurred obligations
concerning the imported products involved in the dispute under the GATT 1994 and how the
increase in imports was an effect of these obligations. Japan further argues that since the
published report does not contain any findings and reasoned conclusion on this issue, Ukraine has
also acted inconsistently with Articles 3.1 and 4.2(c) of the Agreement on Safeguards.
74
7.41. Ukraine responds that all of Japan's claims under Article XIX:1(a) and Articles 3.1, 4.2(c)
and 11.1(a) must be rejected since Japan (i) di d not establish that the existence of unforeseen
developments and the effect of the obligat ions incurred under the GATT 1994 are each a
"prerequisite" for the imposition of a safeguard me asure; (ii) did not show that the circumstances
that Ukraine demonstrated to exist as a matter of fact were anything other than "unexpected" and
thus "unforeseen" in the sense of Article XIX:1(a); (iii) did not show that Ukraine failed to provide
in the Key Findings or the Notice of 14 March 2013 sufficiently reasoned and adequate
explanations regarding unforeseen developments; 75 and (iv) did not show that Ukraine had not
made tariff concessions applicable to the imported products involved in the dispute and that
Ukraine had not demonstrated the existence of such concessions as a matter of fact.
76
7.42. The Panel will begin its analysis with Japan's claim under Article XIX:1(a). We will first
consider Ukraine's argument regarding the legal nature of the two textual elements at issue –
"unforeseen developments" and the "effect of th e obligations incurred under [the GATT 1994]"
(hereafter "effect of GATT 1994 obligations"). Then, we will consider Ukraine's identification and
demonstration of unforeseen developments and the logical connection between the unforeseen
developments and the increased imports. Finally, we will consider Ukraine's identification of the
obligations incurred under the GATT 1994 and the logical connection with the increased imports.
After completing our analysis of the claims under Article XIX:1(a), we will proceed to consider the
claims under Articles 11.1(a), 3.1 and 4.2(c).
7.2.1 Claims under Article XIX:1(a) of the GATT 1994
7.43. Article XIX:1(a) provides as follows:
If, as a result of unforeseen developments and of the effect of the obligations incurred
by a contracting party under this Agreement, including tariff concessions, any product
is being imported into the territory of that contracting party in such increased
quantities and under such conditions as to cause or threaten serious injury to
domestic producers in that territory of like or directly competitive products, the
contracting party shall be free, in respect of such product, and to the extent and for
such time as may be necessary to prevent or remedy such injury, to suspend the
obligation in whole or in part or to withdraw or modify the concession.
7.44. As indicated, the Panel will begin its asse ssment of Japan's claim under Article XIX:1(a) by
considering the issue raised by Ukraine regarding the legal nature of "unforeseen developments"
and the effect of GATT 1994 obligations.

72 Japan's first written submission, para. 168.
73 Japan's second written submission, para. 72.
74 Japan's first written submission, para. 189; and second written submission, para. 100.
75 Ukraine's first written submission, paras. 90-93.
76 Ukraine's first written submission paras. 102-105; opening statement at the first meeting of the
Panel, para. 54; and second written submission paras. 43-44.

7.2.1.1 Unforeseen developments and the effect of GATT 1994 obligations
7.45. Ukraine submits that the term "unfor eseen developments" is not a prerequisite or "prior
condition" for imposing a safeguard measure since it does not appear in the text of Article 2.
According to Ukraine, Article 2 establishes only three conditions for the imposition of a safeguard
measure, namely (i) that a product must be imported in increased quantities, (ii) so as to cause,
(iii) serious injury to the domestic industry. In Ukraine's view, a determination regarding
unforeseen developments is therefore not a "prerequis ite", that is to say, "a thing required as a
prior condition"77, for the adoption of a safeguard measure. As a consequence, Ukraine submits
that Japan's claim must fail since it has not established that the existence of unforeseen
developments is a condition that must be met before a safeguard measure may be adopted.
78
7.46. Ukraine recalls that in the context of Article XIX, the Appellate Body in Argentina – Footwear
(EC) determined with regard to unforeseen developments that they are not a "condition" for
imposing safeguard measures, but rather "a circumstance which must be demonstrated as a
matter of fact" and that an important distinctio n is to be drawn between a "condition" and a
"circumstance which must be demonstrated as a matter of fact".
79 As regards the effect of GATT
1994 obligations, Ukraine observes that according to the Appellate Body this element likewise is
not a "condition" listed in Article 2 and thus not a "prerequisite" but only a circumstance which
must be demonstrated as a matter of fact. 80 Ukraine therefore submits that Japan's claim in
respect of this element suffers from the sa me flaw as the claim concerning unforeseen
developments.81
7.47. Japan counters that the existence of unf oreseen developments and of the effect of
GATT 1994 obligations does constitute a "prerequisite" or "legal requirement" that must be
demonstrated to apply a safeguard measure consistently with Article XIX. 82 According to Japan,
Ukraine ignores that the Appellate Body has stated that the Agreement on Safeguards and
Article XIX are to be considered in conjunction and that any safeguard measure must be in
conformity with both agreements.83
7.48. Japan submits that regardless of the actual term used - a "circumstance" or a "prerequisite"
– unforeseen developments and the effect of GATT 1994 obligations constitute "legal
requirement[s]" that must be satisfied in order for a safeguard measure to be applied in
accordance with the WTO disciplines.
84 Japan argues that "unforeseen developments" and the
effect of GATT 1994 obligations are not simply circumstances that must "exist as a matter of fact"
given that the demonstration of the existence of these elements must be made before a safeguard
measure is applied.85
7.49. Japan also submits that, contrary to what Ukraine asserts regarding the effect of GATT 1994
obligations, the importing Member must not only have incurred obligations under the GATT 1994
as a matter of fact, the importing Member must also identify those obligations.86

77 Ukraine refers to the Shorter Oxford Dictionary (1993), Vol. 2, p. 2338.
78 Ukraine's first written submission, paras. 73 and 75; opening statement at the first meeting of the
79 Ukraine's first written submission, para. 74 (referring to Appellate Body Report, Argentina – Footwear
(EC), para. 92).
80 Ukraine's first written submission, para. 97 (referring to Appellate Body Report, Argentina – Footwear
(EC), para. 84).
81 Ukraine's first written submission, para. 98; opening statement at the first meeting of the Panel,
82 Japan's opening statement at the first meeting of the Panel, paras. 6, 52 and 61; second written
submission, paras. 76 and 103; and opening statement at the second meeting of the Panel, paras. 16 and 25.
83 Japan's second written submission, para. 75 (referring to Appellate Body Report, Argentina –
Footwear (EC), para. 84).
84 Japan's second written submission, para. 78 (referring to Panel Report, US – Lamb, para. 7.19).
85 Japan's second written submission, para. 79 (referring to Appellate Body Report, US – Lamb,
para. 72); opening statement at the first meeting of the Panel, para. 53; and opening statement at the second
86 Japan's opening statement at the first meeting of the Panel, para. 61; second written submission,
para. 103; and opening statement at the second meeting of the Panel, para. 25.

7.50. The Panel begins its analysis by noting that Ukraine's arguments raise three issues: first,
whether unforeseen developments and the effect of GATT 1994 obligations should be characterized
as circumstances, conditions or prerequisites; second, what legal consequences flow from this
characterization; and third, whether Japan misunderstood the nature of these two elements and
thus Japan's claims should fail for this reason.
7.51. Regarding the first issue, the Appellate Body has clarified in several reports the legal nature
of the elements contained in the first clause of Article XIX:1(a) and their relationship with the
conditions established in the second clause of Article XIX:1(a):
The first clause in Article XIX:1(a) – "as a result of unforeseen developments and of
the obligations incurred by a Member under the Agreement, including tariff
concessions … " – is a dependent clause whic h, in our view, is linked grammatically to
the verb phrase "is being imported" in the second clause of that paragraph. Although
we do not view the first clause in Article XIX:1(a) as establishing independent
conditions for the application of a safeguard measure, additional to the conditions set
forth in the second clause of that paragraph , we do believe that the first clause
describes certain circumstances which must be demonstrated as a matter of fact in
order for a safeguard measure to be applied consistently with the provisions of
Article XIX of the GATT 1994 . In this sense, we believe that there is a logical
connection between the circumstances described in the first clause – "as a result of
unforeseen developments and of the effect of the obligations incurred by a Member
under this Agreement, including tariff concessions … " – and the conditions set forth in
the second clause of Article XIX:1(a) for the imposition of a safeguard measure.
87
(Emphasis added; original emphasis omitted)
7.52. Thus, the two elements of the firs t clause of Article XIX:1(a) constitute circumstances that
must be demonstrated as a matter of fact, distinct from the conditions established under the
second clause. We also observe that on one occa sion, the Appellate Body also referred to the
existence of one of these two elements as a "pre requisite" to be demonstrated in order for a
safeguard measure to be applied.88 Therefore, to us it is clear that (i) the two elements in the first
clause of Article XIX:1(a) are circumstances that have to be demonstrated as a matter of fact,
(ii) that they are legally different from the conditions in the second clause of the same provision,
and (iii) that the Appellate Body has also used the term "prerequisite" to refer to them.
7.53. Regarding the second issue, the Appellate Body in US – Lamb elaborated on the legal
consequences of the interpretation given in Korea – Dairy and Argentina – Footwear (EC) and
discussed when and where the demonstration of these circumstances should occur. It stated that
the demonstration must occur before a safeguard measured is applied, and that this
demonstration must feature in the same report of the competent authorities in which the
conditions are demonstrated:
[A]s the existence of unforeseen developments is a prerequisite that must be
demonstrated, as we have stated, "in orde r for a safeguard measure to be applied"

consistently with Article XIX of the GATT 1994, it follows that this demonstration must
be made before the safeguard measure is applied. Otherwise, the legal basis for the
measure is flawed. We find instructive guidance for where and when the
"demonstration" should occur in the "logical connection" that we observed previously
between the two clauses of Article XIX:1(a). The first clause, as we noted, contains, in
part, the "circumstance" of "unforeseen developments". The second clause, as we
said, relates to the three "conditions" for the application of safeguard measures, which
are also reiterated in Article 2.1 of the Agreement on Safeguards. Clearly, the
fulfilment of these conditions must be the central element of the report of the
competent authorities, which must be published under Article 3.1 of the Agreement on
Safeguards.
 In our view, the logical connection between the "conditions" identified in
the second clause of Article XIX:1(a) and the "circumstances" outlined in the first
clause of that provision dictates that the demonstration of the existence of these

87 Appellate Body Report, Korea – Dairy, para. 85; and Appellate Body Report, Argentina – Footwear
(EC), para. 92.
88 See Appellate Body Report, US – Lamb, para. 72.

circumstances must also feature in the same report of the competent authorities . Any
other approach would sever the "logical connection" between these two clauses, and
would also leave vague and uncertain how compliance with the first clause of
Article XIX:1(a) would be fulfilled.
89 (Emphasis added; original emphasis omitted)
7.54. As mentioned by the Appellate Body, the demonstration of the existence of the
circumstances in question must be provided in the competent authorities' published report
required under Articles 3.1 and 4.2(c). Accordingly, to meet the Appellate Body's conclusion, as
quoted above at paragraph 7.51, that these circumstances must be demonstrated as a matter of
fact, we understand that this means that competent authorities must explain in their published
report how the factual evidence before them demonstrates the existence of these circumstances.
Therefore, it is not sufficient for competent authorities to satisfy themselves that these
circumstances exist as a factual matter; they must also provide a demonstration of their existence
in their published report.
7.55. Another element of the above statements of the Appellate Body is worth highlighting. The
Appellate Body concluded that the circumstances in question must be demonstrated before a
safeguard measure is imposed. In our view, this implies that any demonstration of the existence of
these circumstances that is provided after imposition of a safeguard measure will not be sufficient
to comply with the requirements of Article XIX:1(a). In this context, we observe that the Appellate
Body has already had occasion to address this issue and concluded that the analysis of the
pertinent issues of fact and law referred to in Article 3.1, and to be set out in the competent
authorities' published report, cannot be supplemented by the Member concerned during the course
of WTO dispute settlement procedures or in a document other than the competent authorities'
report (e.g. an unpublished report).
90 Therefore, it is clear to us that any ex post facto 91
explanation purporting to demonstrate the existe nce of the circumstances required by the first
clause of Article XIX:1(a) cannot cure the lack of such demonstration in the competent authorities'
published report.
7.56. With regard to the published report, it is us eful to clarify one additional point. The Appellate
Body has stated that since unforeseen developments are a "pertinent issue of fact and law" within
the meaning of Article 3.1, the competent auth orities must provide "reasoned and adequate
explanations" of how the facts support their de termination of "unforeseen developments" under
Article XIX:1(a).92 Although the Appellate Body did not refe r explicitly to the effect of GATT 1994
obligations in making this statement, we cons ider that the effect of GATT 1994 obligations is
similarly a "pertinent issue of fact and law" with in the meaning of Article 3.1, and the competent
authority must similarly provide reasoned and adequate explanations regarding it in their
published report. Accordingly, the Panel's task is to review whether Ukraine demonstrated in its
published report, through reasoned and adequate ex planations, the circumstances identified in the
first clause of Article XIX:1(a).
7.57. In sum, we consider that the two elements of the first clause of Article XIX:1(a),
"unforeseen developments" and the effect of GATT 1994 obligations, are circumstances that the
competent authorities are legally required under Article XIX:1(a) to demonstrate as a matter of
fact.
93 They are not conditions. The conditions for the application of a safeguard measure are
contained in the second clause of Article XIX:1(a) and Article 2. Although different in legal nature,
the relevant conditions and circumstances have in common that: (i) their satisfaction or existence

89 Appellate Body Report, US – Lamb, para. 72.
90 In US – Wheat Gluten, the Appellate Body reversed the panel's finding that the United States had
provided adequate explanations on one of the factors of Article 4.2(a) since it "relied heavily on supplementary
information" that was not contained in the competent authority's report (paras. 156-163). In US – Lamb, it
rejected the United States' argument that it was sufficient that the existence of unforeseen developments could
be inferred from the factual record, and that the existence of such developments could be demonstrated during
WTO dispute settlement proceedings. In that case, the Appellate Body concluded that the United States had
failed to demonstrate this element since the competent authorities' report did not discuss or offer any
91 Panel Report, Chile – Price Band System, para. 7.139.
92 Appellate Body Reports, US – Steel Safeguards, para. 279.
93 We agree with the panel in US – Lamb that the demonstration of unforeseen developments under
Article XIX:1(a) is a "legal requirement". Panel Report, US – Lamb, para. 7.19. We find that this conclusion is
also applicable to the effect of GATT 1994 obligations.

must be demonstrated by the competent authorities, through reasoned and adequate
explanations, (ii) in the published report, and (iii) before a safeguard measure is applied.
7.58. Regarding the third issue presented by Ukraine's arguments, we do not interpret Japan's
argument to be that unforeseen developmen ts and the effect of GATT 1994 obligations are
"conditions" similar to the ones contained in the second clause of Article XIX:1(a) or Article 2.
Throughout its submissions, Japan has used the terms "circumstances", "prerequisite" or "legal
requirement" to refer to these elements and not the term "condition".
94 Therefore, we disagree
with Ukraine's argument that Japan has erroneously referred to the elements of the first clause of
Article XIX:1(a) as "conditions". Regarding the te rms "prerequisite" or "legal requirement", we
recall that they were also used in previous A ppellate Body and panel reports when addressing the
same matter and therefore Japan has not erred by using them. We thus reject Ukraine's argument
that Japan erroneously characterized the two elements in the first clause of Article XIX:1(a) as
conditions.
7.59. Consequently, we proceed with our analysis of Japan's claims on the basis that "unforeseen
developments" and the effect of GATT 1994 obligations are "circumstances" that the competent
authorities are legally required to demonstrate as a matter of fact, and that such demonstration is
to be conducted (i) before a safeguard measure is applied, (ii) through reasoned and adequate
explanations, and (iii) in the competent authorities' published report.
7.2.1.2 Unforeseen developments
7.60. The Panel now turns to examine Japan's cl aim as it relates to unforeseen developments.
Japan's claim is based on two main arguments. Japan asserts that Ukraine's competent authorities
have not properly demonstrated the existence of unforeseen developments and that Ukraine has
not explained how the alleged unforeseen developments resulted in increased imports.
7.2.1.2.1 The unforeseen developments alleged in this case
7.61. The Panel begins by considering Japan's argument that Ukraine's competent authorities
have failed to properly demonstrate the existence of unforeseen developments. We recall in this
respect that the term "unforeseen developments" has been interpreted to mean developments that
are "unexpected".
95
7.62. Japan argues that the sole reference to unforeseen developments in either the Notice of
14 March 2013 or the Key Findings is the increase in imports and that it therefore appears that the
competent authorities identified the increase in imports as the unforeseen development. Japan
submits that this is improper because the increase in imports must be a result of unforeseen
developments and, therefore, the unforeseen deve lopments must necessarily be something other
than the increase in imports themselves. Referring to the panel report in Argentina – Preserved
Peaches, Japan contends that the text of Article XIX:1(a) does not permit an interpretation that
would equate increased imports with unforeseen developments.
96 Japan concludes that, to the
extent that Ukraine considered the increased import s as an unforeseen development, it failed to
demonstrate this circumstance and thus acted inconsistently with Articles XIX:1(a).97
7.63. Ukraine submits that the unforeseen developments in the present case are explained by the
"perfect storm" caused by the confluence of the serious contraction in demand and the dramatic
increase in imports in relative terms against the backdrop of the global financial and economic

94 Japan's first written submission, paras. 72, 75, 84, 87, 166, 187; second written submission,
paras. 76 and 103.
95 Appellate Body Report, Argentina – Footwear (EC), para. 91; Appellate Body Report, Korea – Dairy,
para. 84.
96 Japan's first written submission, para. 174 (referring to the Panel Report, Argentina – Preserved
Peaches, para. 7.18, where it is stated that "[t]he text of Article XIX:1(a) cannot support an interpretation that
would equate increased quantities of imports with unforeseen developments"); opening statement at the first
meeting of the Panel, para. 54; second written submission, para. 80; opening statement at the second meeting
of the Panel, para. 18.
97 Japan's first written submission, paras. 171-172 and 174; opening statement at the first meeting of
the Panel, para. 54; second written submission, para. 80; and opening statement at the second meeting of the
Panel, para. 17.

crisis in the second half of 2008 and Ukraine's si gnificant reduction of tariffs on passenger cars
pursuant to its accession to the WTO in May 2008. Ukraine further argues that although it
expected that some sectors in which it had made significant WTO tariff commitments could face
increased competition from imports, it was unexpected that as a result of the global financial and
economic crisis soon after its accession to the WTO, consumer demand would contract as much as
it did, and that this would coincide with such an increase in imports that displaced domestic
products. Ukraine submits that the Notice of 14 March 2013 and the Key Findings contained an
analysis of the impact of the global financial and economic crisis.
98
7.64. Ukraine argues that in the Notice of 14 March 2013 and the Key Findings, the Ministry
explained that it was unforeseen that imports in to Ukraine would increase by 37.9% relative to
domestic automobile production in 2010 compared to 2008, despite the decrease in import
volumes in absolute terms. Ukraine alleges that the significant increase in market share came on
the heels of the global financial and economic crisis, which had a significant impact on the
Ukrainian passenger car industry.
99
7.65. In Ukraine's view, the existence of the global financial and economic crisis is a matter of fact
that does not require much demonstration. Ukraine submits that since the 2008 global financial
and economic crisis is a widely accepted and probably even an uncontested fact, no additional
evidence is required to prove its existence. More over, Ukraine contends that as this circumstance
was not questioned by the interested parties, it was concluded by the Ministry that it existed and
did not need any confirmation. Ukraine considers that Japan cannot seriously claim not to be
aware of this global crisis during the period of investigation.
100
7.66. Japan responds that it is only in Ukraine's first written submission that the global financial
and economic crisis is identified as the unfores een development. According to Japan, nowhere in
the Notice of 14 March 2013 or the Key Findings was the crisis identified as the unforeseen
development, nor is there any discussion or expl anation as to why it constituted an unforeseen
development in the sense of Article XIX. 101 Japan recalls that according to the Appellate Body, the
demonstration of unforeseen developments must be made before the application of a safeguard
measure, in the published report. 102 Japan submits that any identification of the unforeseen
developments after the imposition of a safeguar d measure cannot, therefore, render a safeguard
measure consistent with Article XIX:1(a). Japan further argues that, as the panel found in Chile –
Price Band System , an ex post facto explanation cannot cure the importing Member's failure to
meet the requirement of demonstrating unforeseen developments in the published report.103
7.67. The Panel observes that the issue to be examined is whether Ukraine identified and
demonstrated the existence of unforeseen develo pments as required by Article XIX:1(a). As
explained above, this requires us to determine whether the competent authorities identified the
relevant unforeseen developments in their publishe d report. At the outset, we recall our view that
the Notice of 14 March 2013 constitutes the publishe d report within the meaning of Article 3.1, as
discussed in Section 7.1.5 above.

98 Ukraine's first written submission, para. 79; opening statement at the second meeting of the Panel,
para. 28; and responses to Panel question Nos. 39 and 40. In response to Panel question No. 116, Ukraine
stated that it considered the effects of the global financial and economic crisis in the section of the Key
Findings that deals with the issue of non-attribution.
99 Ukraine's first written submission, para 80; opening statement at the first meeting of the Panel,
para. 37; and opening statement at the second meeting of the Panel, para. 30. Ukraine further observes that
the panel in US – Steel Safeguards found that a financial crisis was a "plausible set of circumstances" that
could be considered as unforeseen (Ukraine's first written submission para. 82 (referring to Panel Report, US –
Steel Safeguards, paras. 10.110 and 10. 121)).
100 Ukraine's first written submission, paras. 80 and 86; second written submission, para. 30; and
opening statement at the second meeting of the Panel, para. 29.
101 Japan's opening statement at the first meeting of the Panel, para. 55; second written submission,
para. 81; and opening statement at the second meeting of the Panel, para. 18.
102 Japan's second written submission, para. 81 (citing the Appellate Body Report, US – Lamb,
para. 72).
103 Japan's opening statement at the second meeting of the Panel, para. 18 (citing the Panel report in
Chile – Price Band System, para. 7.139). See also Japan's opening statement at the second meeting of the
Panel, para. 55.

7.68. The Notice of 14 March 2013 contains th e following succinct passage on unforeseen
developments:
The occurrence of "unforeseen developments" is explained by a 37.9% increase of the
share of imported motor cars relative to domestic production during 2010 when
compared to 2008, despite decreased import volumes in absolute terms and an
overall contraction in consumption of motor cars within the domestic market of
Ukraine during this period.
104
7.69. Apart from this reference, we do not find any other mention of unforeseen developments in
the Notice of 14 March 2013.105
7.70. The Key Findings and Ukraine's notification to the WTO Committee on Safeguards under
Articles 12.1(b) and (c) also refer to unforeseen developments, using language almost identical to
that contained in the Notice of 14 March 2013. The relevant passages in the Key Findings and
notification to the WTO are the following:
The occurrence of "unforeseen developments" is explained by a 37.9% increase of the
share of imported products relative to domestic automobile production in Ukraine in
2010 compared to 2008, despite decreased import volumes in absolute terms and an
overall contraction in consumption of automobiles within the domestic market of
Ukraine during this period.
106 (emphasis added)
The fact of "unforeseen developments" is present in increase of import share by
37.9% relative to applicant's production of motor cars in 2010 compared with 2008
despite of the general decrease of import in quantitative equivalent and general
decrease of consumption of motor cars at the domestic market in this period.
107
(emphasis added)
7.71. Japan submits that these statements suggest that the increase in imports is the unforeseen
development. Ukraine did not respond directly to this argument. It argues instead that the
occurrence of unforeseen developments is expl ained by the "perfect storm" formed by a
confluence of several factors in the context of the 2008 global financial and economic crisis, and
that it was unforeseen that imports would increase by 37.9% relative to domestic automobile
production in Ukraine in 2010, compared to 2008.
7.72. In examining the passage provided in the Notice of 14 March 2013, we note the statement
that the occurrence of unforeseen developments "is explained by" the relative increase in imports.
For us, this means that the occurrence of unforeseen developments is "made clear or
intelligible"108, or "made plainly visible" 109 by the relative increase in imports. Thus, the most
natural reading of this translated phrase, in the context of the cited reference of the Notice of
14 March 2013, is that the competent authoritie s considered that the occurrence of unforeseen
developments was demonstrated by the relative increase in imports, in spite of an absolute
decrease in imports and an overall contraction in the consumption of automobiles. It is also
noteworthy that Ukraine itself has described the conclusions of the competent authorities in the
Notice of 14 March 2013 along very similar lines in its first written submission:
In its findings, the Ministry explained that it was unforeseen that imports would
increase by 37.9 percent relative to domestic automobile production in Ukraine in

104 Exhibit JPN-2, p. 1.
105 We note that our assessment is based on Exhibit JPN-2, which contains an English translation of the
Notice of 14 March 2013 that was prepared by Japan, which Ukraine did not contest. We understand this to be
the case based on a statement by Japan during the course of the first substantive meeting with the Panel and
Japan's response to Panel question No. 7. Ukraine in fact referred to exhibit JPN-2 throughout its submissions
to the Panel (e.g. Ukraine's first written submission, footnote 18; Ukraine's second written submission,
footnote 4).
106 Exhibit JPN-6 (Revised Version).
107 WTO document G/SG/N/8/UKR/3-G/SG/N/10/UKR/3-G/SG/N/11/UKR/1. Exhibit JPN-7.
108 The Shorter Oxford Dictionary (2007), Vol 2. p. 900.
109 Ibid.

2010 compared to 2008, despite the decrease in import volumes in absolute terms. 110
(emphasis added)
7.73. Therefore, we find that the Notice of 14 March 2013 identifies the relative increase in
imports as the unforeseen development. We re cognize that the Notice of 14 March 2013 also
refers to an absolute decrease in imports and a contraction in demand that occurred during the
same period. But nothing in the Notice of 14 March 2013 suggests that either of these was
considered an unforeseen development by the competent authorities. Consequently, it is clear to
us that the development that the Notice of 14 Ma rch 2013 identifies as unforeseen is the relative
increase in imports.
7.74. We consider, next, Ukraine's arguments re garding what were the unforeseen developments
in this case, as there is a difference between Ukraine's submissions to this Panel and the actual
content of the Notice of 14 March 2013.
7.75. In its first written submission, Ukraine no t only describes the content of the Notice of
14 March 2013 reproduced above, but also identi fied as the unforeseen development a "perfect
storm" involving a "confluence of factors" in th e context of the 2008 global financial and economic
crisis:
[I]t was unexpected that, as a result of the global crisis soon after its accession,
consumption demand would contract to the exte nt it did, and this would coincide with
such an increase in imports completely displacing domestic producers. That
unfortunate "perfect storm" is essentially what the Ministry highlighted in the section
on unforeseen development in the Key Findings.
111
…
The confluence of the serious contraction in demand and the dramatic increase in
imports in relative terms against the backdrop of the global financial crisis in the
second half of 2008, at the same time that Ukraine significantly lowered tariffs on
passenger cars pursuant to WTO obligations, was unexpected and thus unforeseen.112
7.76. In response to a request from the Panel, Ukraine elaborated as follows:
While it is obvious that the global financial crisis led both to the significant increase in
imports in relative terms and the decrease in consumption, the latter was a different
factor that cannot be associated with the increase in imports and was referred to in
the non-attribution section of the Key Findings.
113
7.77. In its second written submission, Ukraine stated:
[I]t was unexpected that, as a result of the global crisis immediately after its
accession, the increase in imports would be so significant as to completely displace
domestic production.114
…

110 Ukraine's first written submission, para. 80. In its third-party submission, the European Union argues
that the phrase "explained by" should not be understood as meaning that the unforeseen development is the
increase in imports. In the European Union's view, the occurrence of unforeseen developments is merely
evidenced by the increase, in the sense that unforeseen developments have resulted in increased imports. The
European Union provides no further arguments in support of this position, however. European Union's third-
party submission, para. 21.
111 Ukraine's first written submission, para. 79.
112 Ukraine's first written submission, para. 83.
113 Ukraine's response to Panel question No. 40.
114 Ukraine's second written submission, para. 26.

The facts confirm the unforeseen combination of a global economic crisis affecting in
particular this industry right at the time of tariff liberalization and major changes in
the Ukrainian economy as a result of the WTO accession.
115
7.78. Thus, it seems Ukraine has put forward multiple versions of what the unforeseen
developments were in the present case: (i) the simultaneous contraction in demand and increase
in imports; (ii) the confluence of a contraction in demand, tariff liberalization, and a relative
increase in imports; (iii) the global financial and economic crisis; (iv) the increase in imports; and
(v) the combination of a global financial and economic crisis and tariff liberalization. There is a
stark contrast between Ukraine's submissions to the Panel, which for the most part suggest that
the unforeseen developments were events either caused by, coinciding with, or including, the
global financial and economic crisis, and the actu al text of the Notice of 14 March 2013, which
identifies only the relative increase in imports as an unforeseen development.
7.79. The Panel asked Ukraine to clarify whether the Notice of 14 March 2013 contains any
reference to the global financial and economic cris is in the section of the Notice of 14 March 2013
dealing with unforeseen developments. In its response, Ukraine stated that the competent
authorities considered the effects of the global financial and economic crisis in the non-attribution
section of the Key Findings.
116 For our part, we see nothing in the Notice of 14 March 2013 that
could be understood to identify the global financial and economic crisis as being the unforeseen
development or an integral part thereof.
7.80. In this regard, we disagree with Ukraine's suggestion that explicit identification of the 2008
global financial and economic crisis was in any event not required, as its existence is a widely
known and accepted fact. Even if the events that are alleged to be unforeseen are widely known
and accepted, this does not relieve the competent authorities of their obligation to explicitly
identify in the published report the unforeseen developments that have been determined to exist.
7.81. As concerns the Key Findings, which are in any event not a published report within the
meaning of Article 3.1, it is of no avail that the effects of the global financial and economic crisis
are mentioned in the non-attribution section of the Key Findings. The issue of non-attribution
relates to one of the conditions to be demonstrated – causation – and not the circumstance here in
question. Also, the relevant passage in the Key Findings that deals with unforeseen developments
does not refer to the non-attribution section. Furthermore, we recall that according to the
Appellate Body, it is not for panels to read into the report of the competent authorities linkages
that they failed to make.
117 Consequently, even if the Panel were to accept the Key Findings as
part of the published report under Article 3.1, the general reference to the global financial and
economic crisis in a different section of the Key Findings is in our view not sufficient to clearly
identify it as an unforeseen development in this case.
7.82. In the light of the foregoing, we find that owing to the absence of any reference in the
Notice of 14 March 2013 to developments other than the relative increase in imports, the
additional developments, or combinations of deve lopments, identified by Ukraine before the Panel
constitute ex post facto explanations regarding what the unforeseen developments were. As such,
and for purposes of our review, they need not be taken into account.
7.83. Having found that Ukraine in its published report determined that the relative increase in
imports was the unforeseen development, it remains for us to determine whether this is sufficient
to satisfy the requirements of Article XIX:1(a). In relevant part, that Article refers to a product
being imported in increased quantities "as a resu lt of unforeseen developments". The phrase "as a
result of" implies a relationship of cause and e ffect, indicating that unforeseen developments and
increased imports cannot be one and the same thing. Furthermore, as elaborated above, there is a
clear distinction between the circumstances contained in the first clause of Article XIX:1(a) and the
conditions contained in the second clause. Increased imports are one of these conditions. Were we
to accept that increased imports may be at the same time a relevant circumstance and a

115 Ukraine's second written submission, para. 28.
116 Ukraine's response to Panel question No. 116.
117 Appellate Body Report, US – Steel Safeguard, para. 322.

condition, we would disregard the distinction between the two and conflate two distinct legal
requirements under Article XIX:1(a).118
7.84. Therefore, we find that Ukraine has failed to make a proper determination on unforeseen
developments, because the competent authorities in their published report identified the relative
increase in imports as the unforeseen developmen t rather than identifying and explaining any
unforeseen developments that resulted in that relative increase in imports. Having failed to make a
proper determination in respect of one of the relevant circumstances, we conclude that Ukraine
has, to that extent, acted inconsistently with Article XIX:1(a).
7.2.1.2.2 Logical connection between the unforeseen developments and the relative
increase in imports
7.85. The Panel will now address Japan's argume nts regarding the demonstration of the logical
connection between the unforeseen developments and the relative increase in imports. We recall
that Japan argues that according to the Appellate Body the competent authorities are required by
Article XIX:1(a) specifically to demonstrate that the identified unforeseen developments have
resulted in increased imports.
119
7.86. Japan argues that neither the Notice of 14 March 2013 nor the Key Findings provide any
explanation with regard to how the alleged unforeseen developments resulted in the increase in
imports.120 Referring to the Appellate Body report in US – Steel Safeguards, Japan observes that it
is for the competent authorities to demonstrate the logical connection between the alleged
unforeseen developments and the increase in imports, and that the Panel may not read into the
report linkages that the competent authorities failed to make.
121
7.87. Japan further argues that, even assuming th at the global financial and economic crisis had
been recognized by the competent authorities as the unforeseen development, Ukraine does not
provide any explanation as to how these unforeseen developments actually resulted in the
increase in imports. In Japan's view, it is not sufficient that the global financial and economic crisis
merely coincided in time with the increase in imports. According to Japan, it must also be
demonstrated that the unforeseen developments caused a change in the competitive relationship
between imported and domestic products to the detriment of the latter.
122
7.88. Ukraine disagrees with Japan's position that the unforeseen developments must cause a
change in the competitive relationship. In Ukra ine's view, the unforeseen developments and the
obligation incurred under GATT 1994 need not modify the competitive relationship between the
imports and domestic products, but cause the increase in imports directly. Ukraine further submits
that its analysis of the issue of unforeseen developments was conducted by the competent
authorities during the investigation, and that much of their analysis is confidential, such that only
the results have been included in the Key Findings.123
7.89. Japan counters that regardless of whether Ukraine properly treated the analysis as
confidential or not, the competent authorities were still required to provide a reasoned and
adequate explanation on how the facts support their determination.124
7.90. The Panel recalls its findings above that Uk raine failed to make a proper determination on
unforeseen developments under Article XIX:1(a). In the light of this, there is no need for us to

118 See also Panel Report, Argentina – Preserved Peaches, para. 7.18 (stating that "[t]he text of
Article XIX:1(a) cannot support an interpretation that would equate increased quantities of imports with
unforeseen developments").
119 Japan's first written submission, para. 177 (referring to the Appellate Body Report, US – Steel
120 Japan's first written submission, para. 176; opening statement at the first meeting of the Panel,
121 Japan second written submission, para 84 (referring to the Appellate Body Report, US – Steel
Safeguards, para. 322).
122 Japan second written submission, paras. 83-84; opening statement at the first meeting of the Panel,
para. 56; and opening statement at the second meeting of the Panel, paras. 19 and 21-22.
123 Ukraine's first written submission, para. 85; and response to Panel question No. 42.

make findings regarding whether the competent authorities examined the "logical connection"
between the unforeseen developments and the relati ve increase in imports. In the absence of a
sufficient determination of unforeseen developments , there is no occasion to consider whether
there is a sufficient connection between such developments and increased imports.
7.2.1.3 Effect of GATT 1994 obligations
7.91. The Panel now turns to Japan's claim regarding the effect of GATT 1994 obligations. As with
the parallel claim concerning unforeseen developmen t, this claim rests on two main arguments.
Japan argues first that Ukraine's competent authorities have failed to properly demonstrate the
effect of GATT 1994 obligations, and second, that Ukraine has not explained how the effect of any
such obligations resulted in increased imports.
7.2.1.3.1 Identification of the effect of relevant GATT 1994 obligations
7.92. The Panel begins by examining Japan's argu ment that Ukraine's competent authorities have
failed to properly demonstrate the existence of the effect of relevant GATT 1994 obligations.
7.93. Japan argues that a Member wishing to impose a safeguard measure must not only have
incurred obligations under the GATT 1994, but must identify those obligations and demonstrate
them in its published report. Japan submits that Ukraine failed to do so since neither the Notice of
14 March 2013 nor the Key Findings identify or anal yse the effect of the obligations incurred by
Ukraine under the GATT 1994. Japan therefore subm its that Ukraine failed to demonstrate as a
matter of fact that it incurred obligations under the GATT 1994, and that this is a violation of
Article XIX:1(a).
125
7.94. Ukraine argues that there can be no debate about the existence of the effect of the
obligations incurred under the GATT 1994. According to Ukraine, it is as an obvious fact that it
made tariff concessions on passenger cars when it joined the WTO in 2008 and reduced the import
duty on passenger cars from 25% to 10%. Ukrain e submits that Japan cannot deny this fact given
its active involvement in the negotiations on Ukraine's WTO accession. Ukraine further alleges that
the existence of WTO commitments is a fact mentioned in the Key Findings.
126
7.95. Japan responds that the fact that Ukraine made tariff commitments with regard to the
product concerned does not cure the competent authorities' failure to identify such commitments
in their published report.127
7.96. The Panel recalls that pursuant to Article XIX:1(a), a Member imposing a safeguard
measure must demonstrate that a product has been imported in increased quantities as a result of
the effect of GATT 1994 obligations of the Member concerned. In our view, given that there may
be several obligations that apply to the product in question, this demonstration necessitates
identification of the specific relevant obligation(s), as it is difficult to see how this demonstration
could otherwise be made. In addition, it should be remembered that pursuant to Article XIX:1(a) it
is not just the obligation per se that is to be identified, but also its effect. This suggests that in the
case of tariff concessions, the bound tariff rate applicable to the product is directly relevant,
including any different rates applicable to sub-groups of the product. Moreover, it may be unclear
which of several applicable obligations the competent authorities consider to be constraining their
freedom of action. It is therefore important for competent authorities to be clear as to which of the
applicable obligations they find to have resulted in imports in increased quantities. For these
reasons, we are unable to accept Ukraine's argument that just because it is a known or knowable
fact that Ukraine made tariff concessions on passenger cars when it joined the WTO, there was no

125 Japan's first written submission, para. 193; opening statement at the first meeting of the Panel,
para. 61; second written submission, para. 105; and opening statement at the second meeting of the Panel,
para. 26.
126 Ukraine's first written submission, para. 100; opening statement at the first meeting of the Panel,
para. 44; second written submission paras. 40-42; and opening statement at the second meeting of the Panel,
para. 37.
127 Japan's opening statement at the first meeting of the Panel, para. 61; second written submission,
para. 104; and opening statement at the second meeting of the Panel, para. 25.

need for the competent authorities to identify adequately the applicable GATT 1994 obligations and
their effect.
7.97. Turning to Ukraine's published report, the Notice of 14 March 2013, we note that it contains
no mention or analysis of the effect of the GA TT 1994 obligations. The only reference to Ukraine's
commitments under the GATT 1994 is contained in the Key Findings, which are not a published
report. However, that reference appears in the context of the causation analysis:
At the same time, WTO accession of Ukraine and its commitments to reduce the
import duty from 25% to 10% as well as the abolition of government support could
have negatively impacted the domestic car industry's financial condition, rather than
this being a consequence of growing import of cars to Ukraine.
128
7.98. To us, it is clear that Ukraine was analysing the tariff reduction as a possible factor causing
injury to the domestic industry and did not refer to it as one of the circumstances that must be
demonstrated under Article XIX:1(a). We also recall that as we mentioned in paragraph 7.81
above, the Appellate Body in US – Steel Safeguards has clarified that it is not for the Panel to read
into the report linkages that the competent authority failed to make.
129 Therefore, even if we were
to take into account the Key Findings, this reference in a section dealing with one of the conditions
– causation – is not sufficient to identify the circumstance here at issue, that is to say, the relevant
GATT 1994 obligations and their effect.
7.99. We therefore find that Ukraine has failed to make a proper determination on the effect of
GATT 1994 obligations, because it has not identified in its published report the effect of GATT 1994
obligations. Having failed to make a proper determination also in respect of this circumstance, we
conclude that Ukraine has, to that extent, acted inconsistently with Article XIX:1(a).
7.2.1.3.2 Logical connection between th e effect of GATT 1994 obligations and the
relative increase in imports
7.100. The Panel now addresses Japan's arguments regarding the demonstration of the logical
connection between the effect of GATT 1994 obligations and the relative increase in imports.
7.101. Japan argues that since the text of Article XIX:1(a) establishes that the increase in imports
must occur "as a result" of the effect of GATT 1994 obligations, it follows that a Member must not
only identify the specific obligations it incurre d under the GATT 1994, but must also explain how
the effect of these obligations resulted in the product being imported in such increased quantities
and under such conditions as to cause or threaten to cause serious injury to its domestic industry.
Japan further contends that it must be explained how these obligations had the effect of
preventing the Member concerned from taking WTO-consistent measures in order to prevent or
remedy the change generated by the unforeseen developments in the competitive relationship
between imports and the domestic product.
130
7.102. Japan notes that the Notice of 14 March 2013 and the Key Findings are silent on this issue
and that it is only in its first written submission that Ukraine makes a reference to this analysis by
stating that its market access commitments "pulled imports of passenger cars into the Ukraine
market". 131 Japan argues that in making this statement, Ukraine confuses unforeseen
developments with the effect of GATT 1994 obligations. The former must have resulted in the
increase in imports, while the latter must prevent the importing Member from taking appropriate
measures to limit the increased imports that resulted from unforeseen developments.
132

128 Exhibit JPN-6 (Revised Version), p. 6.
129 Appellate Body Report, US – Steel Safeguards, para. 322.
130 Japan's first written submission, para. 193; opening statement at the first meeting of the Panel,
para. 62; second written submission, paras. 106-107; and opening statement at the second meeting of the
Panel, para. 27.
131 Japan's second written submission, para. 108 (citing Ukraine's response to Panel question No. 43).
132 Japan's opening statement at the first meeting of the Panel, para. 62; second written submission,
para. 108; and opening statement at the second meeting of the Panel, para. 108.

7.103. Ukraine argues that after it had reduced its tariffs as a result of its accession to the WTO,
imports of passenger cars into Ukraine increased relatively to domestic production. Ukraine
recognizes that although other factors may have existed to drive imports of passenger cars into
Ukraine, the reduction of the tariff rate by ten pe rcentage points pulled imports of passenger cars
into its market, despite the decrease in demand as a result of the effect of the global financial
crisis on Ukraine consumers.
133
7.104. The Panel recalls its findings above that Uk raine failed to make a proper determination on
the effect of GATT 1994 obligations under Article XIX:1(a). In the light of this, there is no need for
us to make findings regarding whether the competent authorities examined the "logical
connection" between the effect of GATT 1994 obligatio ns and the relative increase in imports. In
the absence of a sufficient determination of the effect of GATT 1994 obligations, there is no
occasion to consider whether there is a sufficient connection between such element and increased
imports.
7.2.1.4 Overall conclusion
7.105. Having found that Ukraine in its published report has failed to make a proper
demonstration on unforeseen developments and the effect of GATT 1994 obligations, we conclude
that Ukraine has acted inconsistently with Article XIX:1(a).
7.2.2 Claim under Article 11.1(a)
7.106. The Panel now turns to Japan's claim regarding Article 11.1(a), which provides as follows:
A Member shall not take or seek any emer gency action on imports of particular
products as set forth in Article XIX of GATT 1994 unless such action conforms with the
provisions of that Article applied in accordance with this Agreement.

7.107. Japan submits that as a consequence of Ukraine's failure to demonstrate unforeseen
developments and in the effect of GATT 1994 obligations, Ukraine has acted inconsistently with
Article 11.1(a).134
7.108. Ukraine submits that Japan's claim under Article 11.1(a) must be rejected for the reasons
set out in paragraphs 7.41 and 7.94 above.
7.109. The Panel has concluded in Section 7.2.1.4 above that Ukraine has acted inconsistently
with Article XIX:1(a). In the light of this, we see no need, for the purposes of resolving this
dispute, to make additional findings regarding whether, as a consequence of that conclusion,
Ukraine has also acted inconsistently with Article 11.1(a). We therefore exercise judicial economy
and decline to make findings with respect to this claim.
7.2.3 Claims under Articles 3.1 and 4.2(c)
7.110. The Panel turns, finally, to Japan's claims under Articles 3.1, last sentence, and
Article 4.2(c). Article 3.1, last sentence, provides:
The competent authorities shall publish a report setting forth their findings and
reasoned conclusions reached on all pertinent issues of fact and law.
In turn, Article 4.2(c) provides:

133 Ukraine's first written submission, para. 100; opening statement at the first meeting of the Panel,
para. 44; second written submission paras. 40-41; and opening statement at the second meeting of the Panel,
para. 37.
134 Japan's first written submission, paras. 178 and 194; and second written submission, paras. 72
and 100.

The competent authorities shall publish promptly, in accordance with the provisions of
Article 3, a detailed analysis of the case under investigation as well as a
demonstration of the relevance of the factors examined.
7.111. Japan argues that the existence of unfor eseen developments and the effect of GATT 1994
obligations are a "pertinent issue … of fact an d law" within the meaning of Article 3.1 and,
consequently, the published report of the competent authorities must contain a "finding" or a
"reasoned conclusion" on these circumstances.
135 Japan further argues that the Appellate Body in
US – Steel Safeguards established that Article 4.2(c) also applies to the competent authorities'
demonstration of unforeseen developments under Article XIX:1(a). 136 Japan therefore contends
that, with respect to the circumstances identified in Article XIX:1(a), "the competent authorities
are required by Article 3.1, last sentence, to 'g ive an account of' a 'judgement [sic] or statement
which is reached in a connected or logical manner or expressed in a logical form'", on the
existence of these circumstances, "'distinctly', or in detail".
137
7.112. With regard to unforeseen developments, Japan submits that the Notice of 14 March 2013
only contains a brief reference and that such reference cannot be considered a "reasoned and
adequate explanation" since this statement does not "give an account of a judgment or
statement".
138 Japan also notes that both the Notice of 14 March 2013 and the Key Findings fail to
identify any unforeseen developments, apart from the increase in imports, and a fortiori fail to
provide any discussion or explanation as to why su ch events should be considered as unforeseen
and why they resulted in the increase in imports. With regard to the effect of GATT 1994
obligations, Japan argues that neither the Notice of 14 March 2013 nor the Key Findings contain
any analysis of the effect of the GATT 1994 oblig ations and, therefore, Ukraine has violated
Articles 3.1 and 4.2(c) of the Agreement on Safeguards.
139
7.113. Ukraine responds that, as far as unfore seen developments are concerned, Japan simply
takes issue with the competent authorities' conclusion and arguments on unforeseen
developments but cannot claim that it does not understand the reasoning supporting this
conclusion. Ukraine also argues that Japan's claim is not supported by the record.
140 With regard
to the effect of GATT 1994 obligations, Ukraine argu es that there is no need for any reasoned
conclusion and other explanation when, as a matter of fact, it is uncontested that Ukraine made
significant tariff commitments in respect of pa ssenger cars when it joined the WTO in 2008.
Ukraine submits that Japan cannot seriously deny that as a matter of fact this is the case given its
active involvement in Ukraine's accession negotiations.
141
7.114. The Panel has concluded in Section 7.2.1.4 above that Ukraine has failed to make a proper
determination on unforeseen developments and the effect of GATT 1994 obligations and,
consequently, acted inconsistently with Article XIX: 1(a). In the light of this, we see no need, for
the purposes of resolving this dispute, to make additional findings regarding whether Ukraine has
also acted inconsistently with Articles 3.1 and 4.2(c) in relation to the account it gave of the
aforementioned determination in its published repo rt. We therefore exercise judicial economy and
decline to make findings with respect to these claims.
7.3 Claims relating to increased imports
7.115. The Panel next addresses Japan's claims relating to Ukraine's determination of increased
imports based on Articles 2.1, 3.1, 4.2(a), 4.2(c) and 11.1(a) and Article XIX:1(a). Since

135 Japan's first written submission, para. 180 (referring to Appellate Body Report, US – Lamb,
136 Japan's first written submission, para. 180 (referring to Appellate Body Report, US – Steel
Safeguards, para. 290).
137 Japan first written submission, para 181 (referring to Appellate Body Report, US – Steel Safeguards,
para. 287).
138 Japan's first written submission, para. 183; and second written submission, para. 91.
139 Japan's first written submission, para. 196; second written submission, paras. 112-113; and opening
statement at the second meeting of the Panel, para. 31.
140 Ukraine's first written submission paras. 87-88 and 89; second written submission, para. 34; and
opening statement at the second meeting of the Panel, para. 34.
141 Ukraine's first written submission, para. 101.

Article 2.1 sets forth the fundamental legal requirements – i.e. the conditions – for application of a
safeguard measure, we will first address Japan's claims under Article 2.1.
7.3.1 Claims under Article 2.1
7.116. The Panel recalls that Article 2.1 provides as follows:
A Member may apply a safeguard measure to a product only if that Member has
determined, pursuant to the provisions set out below, that such product is being
imported into its territory in such increased quantities, absolute or relative to domestic
production, and under such conditions as to cause or threaten to cause serious injury
to the domestic industry that produces like or directly competitive products.
7.117. Japan claims that Ukraine acted inconsistently with Article 2.1 in making its determination
of increased imports. In particular, Japan contends that Ukraine failed to (i) demonstrate a
"recent" increase in imports; (ii) demonstrate th at the increase in imports was sudden, sharp and
significant enough; (iii) conduct a complete qualitative analysis, including an analysis of the
intervening trends and the amounts
142 of imports; and (iv) examin e the "conditions" under which
the imports occurred.143
7.118. Ukraine submits that Japan's claim under Article 2.1 regarding the determination of
increased imports is not well-founded. Ukraine argues that it met its obligations by examining all
aspects of the increase in imports. In Ukraine's view, the data used during the investigation and
presented to Japan in consultations demonstrates that the relative increase in imports was
sufficiently recent, sudden, sharp, and significant, both quantitatively and qualitatively.
144
7.119. The Panel recalls that an increase in imports is the defining prerequisite for the application
of a safeguard measure. Article 2.1 does not merely refer to an "increase" in imports, but requires
that "the product is being imported … in such increased quantities, absolute or relative to domestic
production" (emphasis added) as to cause or threaten to cause serious injury. Thus, not any
increase in imports is sufficient to satisfy this condition. As found by the Appellate Body in
Argentina – Footwear (EC) , Article 2.1 "requires that the increase in imports must have been
recent enough, sudden enough, sharp enough, and significant enough, both quantitatively and
qualitatively, to cause or threaten to cause 'serious injury'". 145 Furthermore, Article 2.1 refers to
increased quantities, "absolute or relative to domestic production". The word "or" indicates that a
safeguard measure may be applied, subject to ot her conditions and circumstances being met, in
either of these two factual scenarios. Finally, Arti cle 2.1 also stipulates that the product concerned
must be imported "under such conditions" as to cause or threaten to cause serious injury. As we
explain below
146 , in our view this is relevant to the requirement that there be a causal link
between increased imports and serious injury or threat thereof to the domestic industry, which is
itself another condition for applying a safeguard measure.
7.120. We thus consider based on the text of Article 2.1 as interpreted by the Appellate Body that
for Japan's claim to succeed, Japan must establish that Ukraine did not properly demonstrate that:
a. there was either an absolute increase in imports or an increase relative to domestic
production (hereafter, "relative increase");
b. the increase in imports was sudden enough , sharp enough, and significant enough,
quantitatively and qualitatively; and

142 We note that Japan uses "amounts" in the plural throughout its submissions.
143 Japan's first written submission, paras. 207, 224-228; opening statement at the first meeting of the
Panel, paras. 67-71; second written submission, paras. 115, 132 and 138; and opening statement at the
second meeting of the Panel, paras. 39–43.
144 Ukraine's first written submission, paras. 114 and 126; opening statement at the first meeting of the
Panel, paras. 48, 50 and 53; second written submission, paras. 49, 50 and 54; and opening statement at the
second meeting of the Panel, para. 54.
145 Appellate Body Report, Argentina – Footwear (EC), para. 131.
146 See para. 7.190 below.

c. the increase in imports was recent enough.
We will address these issues in the order listed.
7.3.1.1 Increased imports
7.121. The Panel turns first to the competent authorities' determination that there was a relative
increase in imports during the period of investigation, 2008-2010. Specifically, Ukraine's
competent authorities determined in the Notice of 14 March 2013 that during the period of
investigation, imports of passenger cars increased by 37.9% relative to domestic production.
Japan did not contest that there was a relative increase between 2008 and 2010, but questioned
other aspects of the competent authorities' determination of increased imports to which we turn
below.
7.122. We therefore do not need to address this aspect further, except to note that evidence
provided by Ukraine during the course of these proceedings suggests that there was an absolute
and relative decrease in imports from 2008 to 2009, followed by an absolute and relative increase
in imports from 2009 to 2010.
147 The impact of the relative increase by 37.9% on the respective
market shares of imports and domestic production is not ascertainable from the Notice of
14 March 2013, because it contains no data on import and domestic production volumes.148
7.3.1.2 "[I]n such increased quantities"
7.123. Turning to the requirement in Article 2.1 that a product must be imported "in such
increased quantities" (emphasis added), the Panel notes that the parties to this dispute disagree
over whether Ukraine's competent authorities demonstrated that the relative increase in imports
was sudden enough, sharp enough, and significant enough, and whet her they conducted a proper
qualitative analysis of the data on imports, specifically with regard to trends in imports and the
amounts of imports. Thus, we now proceed to consider, in turn, the following issues:
a. whether the competent authorities in this case provided an adequate explanation
concerning the trends in imports that occurred during the period of investigation;
b. whether the competent authorities demonstrated that the relative increase in imports
was sudden enough, sharp enough, and significant enough; and
c. whether the competent authorities should have provided the amounts of imports.
7.3.1.2.1 Analysis of intervening trends in imports
7.124. The Panel first examines whether the competent authorities have analysed intervening
trends in imports.
7.125. Japan, referring to the statement of the Appellate Body in Argentina – Footwear (EC),
submits that to make a proper qualitative anal ysis and evaluation of increased imports, the
competent authorities must not only examine the end-points of the data, but also intervening
trends. According to Japan, the panel report in Argentina – Preserved Peaches and the Appellate
Body report in US – Steel Safeguards indicate that the analysis under Articles XIX and 2.1 requires
an examination of the trends in imports over the entire period of investigation. Japan maintains
that it is the explanation concerning the trends in imports "that allows a competent authority to
demonstrate that 'a product is being imported in such increased quantities'".
149

147 Exhibit UKR–3.
148 Ukraine stated that it treated domestic production volumes as confidential in response to a request
from the domestic industry and that the Notice provided no actual import volumes because this, together with
the 37.9% figure, would have permitted inferences to be drawn concerning domestic production volumes. See
Ukraine's response to Panel question Nos. 64 and 100. Japan provided the volumes of imports. See Japan's
response to Panel question No. 14. See also Graphs 1 and 2 below at paras. 7.137 and 7.142.
149 Japan's first written submission, paras. 103 and 227 (referring to Appellate Body Reports,
Argentina – Footwear (EC), para.129; and US – Steel Safeguards, paras. 354–355); opening statement at the

7.126. Japan argues, in addition, that the use of the phrase "such increased quantities" makes it
clear that a comparison of end points will not suffice to demonstrate that a product "is being
imported in such increased quantities" within the meaning of Article 2.1, and that "in cases where
an examination does not demonstrate […] a clear and uninterrupted upward trend in imports
volumes, a simple end-point-to-end-point analysis could easily be manipulated to lead to different
results, depending on the choice of end points".
150 Japan thus submits that it is evident from the
text of Article 2.1 and the jurisprudence that the condition of "increased imports" is not simply that
imports have increased based on comparing data for the beginning and end of the period of
investigation. Rather, Article 2.1 requires an analysis of the intervening trends.151
7.127. Japan argues that in this case, Ukrain e's competent authorities failed to examine the
intervening trends with regard to imports, as they did not analyse what happened between 2008
and 2009 and between 2009 and 2010. According to Japan, in both the Notice of 14 March 2013
and the Key Findings, Ukraine provided only an end-to-end-point comparison when it found that
imports increased between 2008 and 2010 by 37.9% relative to domestic production and by
37.1% relative to domestic consumption, and did not provide data for, or analyse what occurred
in, 2009.
152 According to Japan, Ukraine's simple end-point-to-end-point analysis "could easily be
manipulated to lead to different results, depending on the choice of end points". 153 In Japan's
view, this is because the data does not demonstrate "a clear and uninterrupted upward trend". 154
Japan notes that not only did the absolute volume of imports decrease significantly over the entire
period of investigation, but imports also decreased relative to domestic production from 2008 to
2009. Japan considers that a clear upward trend in imports over an entire period of investigation
could not have existed, if during half of the pe riod of investigation the imports were actually
decreasing in both absolute and relative terms. Japan also notes that the data concerning
intervening trends and the ex post analysis of these data provided by Ukraine in its first written
submission cannot be found in the Notice of 14 March 2013 or the Key Findings and thus are not
relevant for the Panel's examination. Japan therefore considers that the competent authorities
failed to examine the trends over the period of in vestigation and to include their conclusions in the
published report, and they have consequently not satisfied the requirements of Article 2.1.
155
7.128. Ukraine responds that a qualitative analysis involving consideration of intervening trends is
not pertinent to the issue of increased imports, but rather concerns the question of causation.
Regarding the analysis of its competent authorities in the present case, Ukraine submits that
imports trended upward over the course of the period of investigation, as is evidenced by the fact,
stated in the Key Findings, that imports incr eased between 2008 and 2010 by 37.9% and 37.1%
relative to domestic production and domestic consumption, respectively. Ukraine further states
that in terms of domestic production, from 2008 to 2009, imports decreased by 8.9%, whereas
in 2010, imports increased by 37.9% over 2008 levels relative to domestic production. Regarding
Japan's argument about manipulation, Ukraine points out that its competent authorities were
strictly bound by Ukraine's domestic law in determining the years to be included in the period of
investigation, and that no manipulation was therefore possible. Finally, regarding its published
report, Ukraine contends that a more detailed anal ysis was conducted by its Ministry during the
investigation and that the results were presented to the Commission and formed the basis for the
imposition of the safeguard measure. According to Ukraine, that analysis is confidential, however,
and was therefore not disclosed to Japan.
156

first meeting of the Panel, para. 71 (referring to Appellate Body Report, US– Steel Safeguards, para. 355 and
Panel Report, Argentina – Preserved Peaches, para. 7.55); second written submission, para. 134 (referring to
Appellate Body Report, US – Steel Safeguards, para. 374); and response to Panel question No. 46.
150 Appellate Body Report, US – Steel Safeguards, paras. 354 and 355.
151 Japan's first written submission, paras. 104 and 225; second written submission, paras. 132
and 136; and opening statement at the second meeting of the Panel, para. 38.
152 Japan's first written submission, paras. 225 and 227; opening statement at the first meeting of the
Panel, para. 71; second written submission, para.133; opening statement at the second meeting of the Panel,
para. 42.
153 Appellate Body Report, US – Steel Safeguards, para. 354.
154 Ibid.
155 Japan's opening statement at the first meeting of the Panel, para. 71; second written submission,
paras. 133, 135, and 136; and response to Panel question No. 132.
156 Ukraine's first written submission, paras. 115-118, 121, 122, 124 and 125; opening statement at the
first meeting of the Panel, para. 52; second written submission, para. 53; and opening statement at the
second meeting of the Panel, para. 49.

7.129. The Panel begins by recalling the views of the Appellate Body in Argentina – Footwear
(EC), which are relevant to the issue raised by Japan. In that dispute, the Appellate Body observed
that:
[T]he determination of whether the requ irement of imports 'in such increased
quantities' is met is not a merely mathematical or technical determination. In other
words, it is not enough for an investigation to show simply that imports of the product
this year were more than last year – or five years ago.
157
7.130. The Appellate Body in the same dispute also identified an additional element that
competent authorities must consider when determining whether a product has been imported "in
such increased quantities". Agreeing with the panel in that dispute, it stated that "the competent
authorities are required to consider the trends in imports over the period of investigation (rather
than just comparing the end points) under Article 4.2(a)".
158 (emphasis original)
7.131. While this statement does not specifically refer to Article 2.1, in the immediately following
paragraph the Appellate Body referred to the phrase "is being imported" in Article 2.1 in support of
its view that the competent authorities must also examine recent imports, "and not simply trends
in imports" during a period of several years. 159 Moreover, in US – Steel Safeguards , the Appellate
Body reiterated its view that an examination of trends is required and stated that the importing
Member in that dispute could not properly have found that imports had "increased" as required by
Article 2.1, without having addressed an "interveni ng trend" showing a decrease in imports at the
end of the period of investigation.160 In the same dispute, the Appellate Body also stated that:
The use of the phrase "such increased quantities" in Articles XIX:1(a) and 2.1, and the
requirement in Article 4.2 to assess the "r ate and amount" of the increase, make it
abundantly clear, however, that such a comparison of end points will not suffice to
demonstrate that a product "is being imported in such increased quantities" within the
meaning of Article 2.1. Thus, a demonstrat ion of "any increase" in imports between
any two points in time is not sufficient to demonstrate "increased imports" for
purposes of Articles XIX and 2.1. Rather, as we have said, competent authorities are
required to examine the trends in imports over the entire period of investigation.
161
(emphasis original)
Finally, the Appellate Body emphasized that:

[W]hat is called for in every case is an explanation of how the trend in imports
supports the competent authority's finding that the requirement of "such increased
quantities" within the meaning of Articles XIX:1(a) and 2.1 has been fulfilled. It is this
explanation concerning the trend in imports—over the entire period of investigation—
that allows a competent authority to demonstrate that "a product is being imported in
such increased quantities".
162 (emphasis original)
7.132. To us, these statements make it clear th at, for an affirmative determination of increased
imports to be consistent with Article 2.1, it is not sufficient for the competent authorities to
establish an increase in imports through a simple mathematical comparison of data for the two end
points marking the beginning and end of the period of investigation. It is necessary, though still
not sufficient by itself
163, that the competent authorities also set out in their published report a
reasoned and adequate explanation concerning the development of imports between the end

157 Appellate Body Report, Argentina – Footwear (EC), para. 131.
158 Ibid. para. 129.
159 Ibid. para. 130.
160 Appellate Body Report, US – Steel Safeguards, para. 388. The Appellate Body also endorsed use of
the term "intervening trends in imports" in Argentina – Footwear (EC). See Appellate Body Report, Argentina –
Footwear (EC), para. 129.
161 Appellate Body Report, US – Steel Safeguards, para. 355.
162 Ibid. para. 374 .
163 As we have already mentioned, the competent authorities must also consider whether any increase
in imports has been sharp enough, sudden enough, and significant enough to cause or threaten to cause
serious injury.

points, i.e. concerning the intervening trends in imports that occurred during the period of
investigation.
7.133. We note that the Notice of 14 Marc h 2013 explains the competent authorities'
determination "[r]egarding increased imports to Ukraine and degree of such increase" in one short
sentence:
During the investigation period in 2010, compared to 2008, imports of motor cars to
Ukraine increased by 37.9% compared to domestic industry output and 37.1%
relative to domestic demand.164
7.134. The Key Findings make the same point and clarify that the percentage figures given in the
Notice of 14 March 2013 refer to import volumes in relative terms. 165 Both the Notice of
14 March 2013 and the Key Findings also indicate, albeit in sections not addressing the competent
authorities' determination of increased imports, that "the volume of imports of motor cars to
Ukraine in absolute terms in 2010 compared to 2008 decreased by 71%".166
7.135. We recall that we must base our review in this dispute on the published report, which we
have concluded is contained in the Notice of 14 March 2013. As is apparent from the above-quoted
statement, the Notice of 14 March 2013 compares imports relative to domestic production in 2010
– the end point of the period of investigation in this case – to imports relative to domestic
production in 2008 – the starting point of the peri od of investigation. The Notice of 14 March 2013
does not set out the import volume in relative terms for 2009, and neither do the Key Findings.
There is, accordingly, no corresponding data regarding the volume of imports relative to domestic
production during the two periods 2008-2009 and 2009-2010.
7.136. Thus, the published report of the competent authorities contains only an end-point-to-
end-point comparison and analysis, finding that the import volume relative to domestic production
was 37.9% higher in 2010 than in 2008. The published report provides neither data nor an
explanation concerning intervening trends in relative imports, and specifically, makes no reference
to import volume relative to domestic production in 2009.
7.137. Ukraine has provided relevant data and analysis of intervening trends in imports in relative
terms in its first written submission. However, as we have pointed out above
167, such an ex post
explanation cannot remedy the deficiency in the competent authorities' determination as set out in
the Notice of 14 March 2013. Nevertheless, it is instructive to consider briefly the data that
Ukraine has provided to us, but did not set out or examine in the Notice of 14 March 2013. We set
out this data in Table 1 and represent it graphically in Graph 1 below. The data suggests that there
was an overall relative increase in imports over the three-year period of investigation. The data
also appears to show that the relative increase in imports that was determined to have occurred,
based on the end-point-to-end-point comparison, is the result of an initial relative decrease from
2008 to 2009 that was followed by a more substant ial relative increase in imports from 2009 to
2010. More particularly, the data suggests that in the investigation at issue, a relative increase in
imports did not occur until the second half of the period of investigation. A brief look at intervening
trends thus reveals that the competent authorities' end-point-to-end-point analysis is not sufficient
on its own to explain adequately why and how the facts of this case supported the conclusion of
the competent authorities that passenger cars "[were] being imported in such increased
quantities" (emphasis added) relative to domestic production.
Table 1: Changes of imports in relative terms
Indicator 2008 2009 2010
Ratio of imports to domestic production,
%

Change since 2008, % - -8.9 +37.9
Source of data: Exhibit UKR–3.

164 Exhibit JPN-2, p. 1.
165 The Key Findings talk about "the share of the Product imports volume … relative to Products
produced by the domestic industry" (Exhibit JPN-6 (Revised Version)).
166 Exhibit JPN-2. See also Exhibit JPN-6 (Revised Version).
167 See para. 7.27 above.

Graph 1: Trends in imports of passenger cars into Ukraine in relative terms
(2008–2010)168

7.138. Ukraine has asserted that a more detailed analysis was performed regarding increased
imports and that its results were the basis for the imposition of the safeguard measure. Ukraine
further submits, however, that that analysis is confidential. Ukraine did not explain how or why an
analysis of intervening trends (as opposed to the actual import volumes) could be confidential. But
even assuming that Ukraine could justifiably withhold certain analysis or data, we note that the
competent authorities in this case published data concerning the relative increase for 2010
compared to 2008. In the light of this, we are no t persuaded that the competent authorities could
not similarly have published data concerning the relative increase or decrease for 2009 compared
to 2008, and for 2010 compared to 2009. In our view, such additional data would have permitted
the competent authorities to provide at least some explanation concerning intervening trends. We
recall that the Notice of 14 March 2013 contains no explanation at all regarding intervening trends.
7.139. For all the above reasons, the Panel finds that Ukraine has acted inconsistently with
Article 2.1 by failing to provide an explanation in its published report regarding how intervening
trends in imports relative to domestic prod uction supported the competent authorities'
determination that there was a relative increase for the period of investigation 2008-2010.
7.3.1.2.2 Sudden, sharp, and significant increase
7.140. The next issue the Panel turns to is whether, as Japan contends, Ukraine has failed to
demonstrate that the increase in imports wa s sudden enough, sharp enough, and significant
enough.
7.141. We recall at the outset that both parties have referred to the Appellate Body report in
Argentina – Footwear (EC) . According to the Appellate Body, the phrase "in such increased
quantities" in Article 2.1 indicates that an incr ease in imports must have been sudden enough,
sharp enough, and signific ant enough, both quantitatively and qualitatively, to cause or threaten

168 Prepared by the Panel; source of data: Exhibit UKR–3.

to cause "serious injury". 169 This view was followed by the panels in US – Wheat Gluten and
Argentina – Preserved Peaches and subsequently confirmed by the Appellate Body in US – Steel
Safeguards.170 The Appellate Body in US – Steel Safeguards upheld the panel's conclusion that
there are no absolute standards in judging how sudden and significant the increase must be in
order to qualify as an "increase" within the meaning of Article 2.1.171 Rather, this assessment is to
be made by the competent authorities on a case-by-case basis.172
7.142. Japan argues that the Notice of 14 March 2013 and the Key Findings do not contain any
determination by the competent authorities that the alleged increase in imports was sudden,
sharp, and significant enough. Japan contends that the increase in imports identified by Ukraine
was not "sudden" because the competent authorities focused mainly on an increase in imports
which took place between 2008 and 2010 and igno red the fact that in 2005, 2006 and 2007
imports of the product concerned were steadily increasing at a significant rate. According to Japan,
in reaching its conclusion regarding the increase in imports, Ukraine should also have taken into
account the data from 2005-2007.
173 In supporting its arguments, Japan provided the following
graph.
Graph 2: Trends in imports of passenger cars into Ukraine in absolute terms
(2005–2014)174

7.143. Ukraine contends that a closer examination of the data considered during the investigation
demonstrates that the relative increase in imports was sufficiently sudden, sharp, and significant.
Ukraine argues that although the volume of impo rts into Ukraine decreased by 71%, there was a
significant increase in imports in relative terms. According to Ukraine, relative to domestic
production, imports decreased modestly in 2009 over 2008 by 8.9%, whereas in 2010, imports
relative to domestic production increased sharply, significantly, and suddenly, by 37.9% compared
to 2008. Ukraine further submits that its Ministry undertook such an analysis during the

169 Japan's first written submission, para. 219; opening statement at the first meeting of the Panel,
para. 64; and Ukraine's first written submission, paras. 110-111.
170 Panel Reports, US – Wheat Gluten, para. 8.31; and Argentina – Preserved Peaches, para. 7.54; and
Appellate Body Report, US – Steel Safeguards, paras. 345 and 346.
171 Panel Reports, US – Steel Safeguards, para. 10.168; Appellate Body Report, US – Steel Safeguards,
paras. 358–361.
172 Appellate Body Report, US – Steel Safeguards, para. 360.
173 Japan's first written submission, paras. 219 and 221-222; opening statement at the first meeting of
the Panel, paras. 15, 16 and 70;
Second written submission, paras. 126, 128 and 129; and opening statement at the second meeting of
the Panel, para. 41; response to Panel question No. 14; and Panel Reports, US – Steel Safeguards,
para. 10.166.
174 Graph prepared by Japan; source of data: Japan obtained these data on its own initiative from the
Ukrainian Statistics Service, see Japan's response to Panel question No. 14.

investigation and that it is summarized in the Key Findings. According to Ukraine, the more
detailed analysis and its results, which were presented to the Commission, were the basis for the
imposition of the safeguard measure, but were co nfidential and were therefore not disclosed to
Japan.
175
7.144. Japan responds that the data and the analys is in Ukraine's written submission are entirely
ex post and are not included in the Notice of 14 March 2013 or in the Key Findings and are
therefore irrelevant. In Japan's view, such ex post analysis cannot cure the absence of any such
analysis in the published report of the compet ent authorities. Japan therefore considers that
Ukraine failed to provide a reasoned and adequate explanation as to why the alleged increase in
imports was sudden enough, sharp enough, and significant enough.
176
7.145. The Panel notes that in the Notice of 14 March 2013, and also in the Key Findings, it is
stated that in 2010 imports increased by 37.9% relative to domestic production, compared to
2008. Neither document characterizes this increase as "sudden", "sharp" or "significant" or uses
any similar language. Accordingly, the lack of analysis on this issue in the Notice of 14 March 2013
and Key Findings is similar to the lack of analys is with respect to the intervening trends discussed
above. Ukraine submits that its relevant analysis is confidential. However, Ukraine offered no
explanation as to why an analysis of the "suddenness", "sharpness" and "significance" of the
relative increase in imports (as opposed to the actual import volumes) should be confidential.
7.146. We first consider the requirement that the increase in imports be "sudden" and "sharp".
The dictionary meaning of "sharp" is "involving sudden change of direction; abrupt, steep"
177 while
"sudden" is defined as "happening or coming wi thout warning; unexpected", or "abrupt, sharp". 178
Without information about the intervening trends, the reference in the Notice of 14 March 2013 to
a relative increase by 37.9% in 2010 compared to 2008 is consistent with very different factual
scenarios, including, for example, (i) a relative increase in imports between 2008 and 2009
followed by a smaller relative decrease between 2009 and 2010; (ii) a relative decrease in imports
between 2008 and 2009 and then a larger relati ve increase between 2009 and 2010; and (iii) a
steady or gradual relative increa se over three years (2008-2010). It appears to us that certainly
under the third possible scenario, the relative incr ease in imports could not properly be described
as "sharp" or "sudden". Therefore, by itself, the reference to a relative increase of 37.9% in 2010
compared to 2008 does not demonstrate that the relative increase in imports was either "sharp" or
"sudden".
7.147. As regards the required "significance" of the increase, we note that the Notice of
14 March 2013 provides neither the volumes of impo rts and domestic production nor the ratios of
import volumes to domestic production volumes in any year of the period of investigation. Neither
do the Key Findings. However, if for example the ratio of import volume to domestic production
volume was quite large at the beginning of the period of investigation, a 37.9% relative increase in
imports at the end of the period might, in our view, not be sufficient to qualify as "significant".
Without additional information or relevant explan ations in the Notice of 14 March 2013, we are
therefore unable to accept that a reference to a 37.9% relative increase in imports alone is
sufficient to demonstrate that the increase was "significant".
179 The ex post explanations provided
by Ukraine in the context of the present proceedings cannot cure this defect. We must note here
that we do not wish to imply that Ukraine could only establish the significance of the relative
increase by revealing confidential information in the determination. If no additional information
could be provided for reasons of confidentiality, the competent authorities must nevertheless
provide, to the fullest extent possible, a reas oned and adequate explanation in support of a

175 Ukraine's first written submission, paras. 119–124; opening statement at the first meeting of the
Panel, paras. 50–53; second written submission, paras. 50–53; opening statement at the second meeting of
the Panel, para. 49.
176 Japan's opening statement at the first meeting of the Panel, para. 70; second written submission,
paras. 129–130.
177 The Shorter Oxford Dictionary (2007), Vol. 2, p. 2790.
178 Ibid. p. 3095.
179 Our situation is different from that of the panel in US – Steel Safeguards, which found that a 19.3%
relative increase in imports was "significant", as in that dispute, the competent authorities' report contained
information regarding the ratio of import volume to domestic production volume, on the basis of which the
issue of significance could be assessed. See Panel Reports, US – Steel Safeguards, para. 10.254.

determination that the increase was significant. 180 Moreover, there may be ways of presenting
sensitive data in the report itself, but in a form that avoids improper disclosure. For instance, with
regard to the ratio of import volume to domestic production volume, it may be possible, in the
case of confidential information, to specify a rang e of values that includes but does not reveal the
actual value, which would facilitate review of the competent authorities' evaluation.
7.148. Based on the foregoing considerations, we find that Ukraine has acted inconsistently with
Article 2.1 by failing to demonstrate in its publ ished report, through reasoned explanations, that
there was an increase in imports during the period of investigation 2008-2010 that was sudden
enough, sharp enough, and significant enough.
7.3.1.2.3 Amounts of imports
7.149. The Panel now turns to Japan's argument that Ukraine's competent authorities failed to
provide and examine the "amounts" of imports and thereby acted inconsistently with Article 2.1.
By "amounts" of imports, Japan means the quantities of imports.
7.150. Japan claims that Ukraine failed to provide and examine the amounts of imports
throughout the period of investigation, since both the Notice of 14 March 2013 and the Key
Findings only indicate a rate of decrease in the absolute volume of imports and a rate of increase
in the relative imports. Japan argues that the eval uation of the amount of the increase in imports,
expressly required under Article 4.2(a), is necessarily relevant to the competent authorities'
determination concerning increased imports. Relying on the panel's finding in Argentina –
Footwear (EC), which was affirmed by the Appellate Body, Japan argues that to determine whether
imports have entered in "such increased quantities", Articles 2.1 and 4.2(a) require an analysis of
the rate and amount of the increase in imports, in absolute terms and as a percentage of domestic
production. Japan contends that without provid ing the amounts of imports, a full qualitative
analysis would not be possible. Japan further argu es that the amounts of imports are particularly
relevant in the situation of this case, where imports decreased substantially in absolute terms.
According to Japan, the fact that imports decreased at a lower rate than did domestic production,
but were still decreasing in substantial amounts, is a factor that creates serious doubt as to
whether the products could be considered to be imported "in such increased quantities".
181
7.151. In response, Ukraine argues that the requirement of Article 4.2(a) to evaluate the rate and
amount of the increase in imports is relevant in the context of causation analysis. In Ukraine's
view, Japan is seeking to add to the obligations of Ukraine by requiring under Article 4.2(a) what
would amount to a breach of Article 3.2, which provides that information which is by nature
confidential or which is provided to the competent authorities on a confidential basis "shall not be
disclosed without permission of the party submi tting it". In Ukraine's view, by providing the
amounts of the imports, Ukraine would act inconsistently with Article 3.2 and invalidate all the
efforts it took to protect the domestic industry's confidential data, because a simple numerical
analysis of the indexed import data provided by the competent authorities would suffice to derive
the confidential information. Ukraine refers to the panel report in US – Steel Safeguards and
argues that the non-disclosure requirement prevai ls, provided the competent authorities are able
to resort to "ways of presenting data in a modified form (e.g. aggregation or indexing), which
protects confidentiality".
182 Ukraine further submits that its demonstration of the import increase
on the basis of relative data makes the need to analyse imports in absolute terms less important.
Finally, Ukraine asserts that the rates of the increase in imports it provided in the Notice of
14 March 2013 and Key Findings were in fact based on absolute amounts.
183

180 Panel Reports, US – Steel Safeguards, para. 10.274. For instance, a specific reference in the
published report indicating where in the record of the investigation confidential information in support of a
particular conclusion can be found might allow a panel to consider that information on review on a confidential
basis, even though the report itself does not disclose the confidential information.
181 Japan's first written submission, para. 228; second written submission, para. 137; response to Panel
question No. 120; Panel Report, Argentina – Footwear (EC), para. 8.141; Appellate Body Report, Argentina –
Footwear (EC), para. 144.
182 Panel Reports, US – Steel Safeguards, para. 10.274.
183 Ukraine's opening statement at the second meeting of the Panel, paras. 50–54; response to Panel
question No. 100; Panel Report, Argentina – Footwear (EC), para. 8.237.

7.152. Japan responds that an analysis of the absolute and relative amounts of imports would not
lead to a breach of Ukraine's obligation of confid ential treatment of information submitted to its
competent authorities. According to Japan, the amounts of imports cannot be considered
confidential, noting that the total annual amount of imports is publicly available information that
can be obtained, by product code, from the Ukrainia n Statistical Service. Japan also disagrees that
in a relative increase scenario, the rate and amount of the increase in imports need not be
evaluated in absolute terms. According to Japan, the need for analysis of the import increase in
absolute terms is not left to the discretion of the competent authorities, as Article 4.2(a) requires
such an analysis.
184
7.153. The Panel recalls its findings above that Ukraine has acted inconsistently with Article 2.1
by failing to provide an explanation in its publ ished report regarding how intervening trends in
imports relative to domestic production supported the competent authorities' determination that
there was a relative increase for the period of investigation 2008-2010. In the light of this, there is
no need for us to consider or make any addi tional finding regarding whether the competent
authorities should also have provided an analysis of the amounts of imports, as Japan contends.
We therefore exercise judicial economy and decline to make findings on this issue.
7.3.1.3 "[I]s being imported"
7.154. As noted above, Article 2.1 provides that a Member may apply a safeguard only if a
product "is being imported" in increased quantities. The Appellate Body has interpreted this
requirement to mean that the increase in imports must be "recent" enough to cause or threaten to
cause serious injury.
185 The Panel now turns to whether, as claimed by Japan, Ukraine failed to
demonstrate a "recent" increase in imports.
7.155. Japan submits that Ukraine must establish that the increase in imports is recent, current
and ongoing. Referring to the Appellate Body report in Argentina – Footwear (EC), Japan contends
that the period of investigation should be the recent past. 186 Japan further argues that the
determination regarding whether the conditions for the application of the safeguard measures are
fulfilled must be based on the "recent past".
187 In Japan's view, if the competent authorities fail to
seek out pertinent information about the recent past, they will be unable to determine whether
imports have increased in "such quantities" within the meaning of Article 2.1.188
7.156. Ukraine accepts the Appellate Body's appr oach to the determination of increased imports
as set out in Argentina – Footwear (EC).189 However, relying on the Appellate Body Report in US –
Steel Safeguards, Ukraine contends that there is no requirement that imports must be increasing
at the time of the determination or thereafter. 190 Furthermore, according to Ukraine, the relevant
point in time for determining whether the data is recent is the time when the investigation is
conducted.191
7.157. Japan responds that the use of the present tense in Article 2.1 indicates that it is
necessary to examine "recent imports". In Japan's view, whether imports are "recent" needs to be

184 Japan's comments on Ukraine's responses to Panel question Nos. 100 and 133.
185 Appellate Body Report, Argentina – Footwear (EC), para. 130.
186 Appellate Body Report, Argentina – Footwear (EC), fn. 130; Japan's response to Panel question
Nos. 8 and 47.
187 Japan's response to Panel question No. 47.
188 Japan's response to Panel question No. 8.
189 Appellate Body Report, Argentina – Footwear (EC), paras. 130-131; Ukraine's first written
submission, para. 110.
190 Ukraine cites the following statement of the Appellate Body:
We agree with the United States that Article 2.1 does not require that imports need to be
increasing at the time of the determination. Rather, the plain meaning of the phrase 'is being
imported in such increased quantities' suggests merely that imports must have increased, and
that the relevant products continue 'being imported' in (such) increased quantities. We also do
not believe that a decrease in imports at the end of the period of investigation would necessarily
prevent an investigating authority from finding that, nevertheless, products continue to be
imported "in such increased quantities. (emphasis original)
Appellate Body Report, US – Steel Safeguards, para. 367. Ukraine's first written submission, para. 111.
191 Ukraine's first written submission, para. 114.

assessed by reference to the time when a safeguard measure is applied.192 According to Japan, the
increase in imports should be recent enough at the time of the application of a safeguard measure
to cause or threaten to cause serious injury or threat thereof. Japan argues that, if at the time a
safeguard measure is applied the product is no long er being imported in such increased quantities
or the imports are not causing or threatening to cause serious injury, there is nothing that a
safeguard measure needs to prevent or remedy.
193 Japan further considers that Ukraine's position
would lead to absurd consequences because it would imply that WTO Members could take
emergency action even ten years after the end of an investigation period. 194 Japan submits that a
significant delay between the end of the period of investigation and the actual application of a
safeguard measure requires an update of the data. 195 According to Japan, if there is a significant
time gap, the presumption that the conditions for application of a safeguard measure are still
fulfilled is no longer reasonable.196
7.158. Ukraine counters that the Agreement on Safeguards does not require that the application
of the measure must follow the termination of the investigation immediately or within a certain
period of time. 197 In Ukraine's view, a delay between the end of the investigation and the
imposition of the safeguard measure is not de termined by the Agreement on Safeguards and
therefore it is for a Member to decide upon the time gap. 198 Furthermore, Ukraine contends that
there is no requirement under the Agreement on Safeguards to continue to update the information
following the end of the period of investigat ion and certainly not following the end of the
investigation.199
7.159. With regard to the present dispute, Japan argues that the increase in imports found by the
competent authorities over the period 2008–2010 can hardly be regarded as "recent" considering
that the safeguard measure was only applied as of April 2013. 200 In Japan's view, judging by
reference to the time when the safeguard measure was applied, the "period of investigation" was
certainly not the "recent past".201
7.160. Ukraine responds that the data its competent authorities used in their analysis was the
most recent data available at the time of investigation. Ukraine recalls that it initiated its
investigation in July 2011, covering the three most recent complete years before the initiation of
the investigation (2008-2010). Ukraine also points out that the investigation included import data
from the beginning of 2011, effectiv ely up to the date of initiation.
202 Ukraine further asserts that
the time gap after the completion of the investigation was not based on an arbitrary decision of
the competent authorities, but is explained by the need to exchange views with exporting
countries, particularly the European Union, Japa n, the Russian Federation, and the Republic of
Korea.203 Ukraine points out in this regard that Ukra inian officials and representatives of exporting
Members held a number of consultations and meetings to discuss the possible imposition of
safeguard measure before the application of the safeguard measure at issue.204
7.161. In Japan's view, the two-year gap in the present case between the end of the period of
investigation and the actual imposition of the safeguard measure is manifestly excessive. Japan

192 Japan's opening statement at the first meeting of the Panel, para. 68. However, Japan also stated
that, in principle, the relevant date by reference to which a panel should determine whether the period of
investigation is in the recent past is the date of determination made by the authorities, provided that the
conditions to apply a safeguard measure are met. Nevertheless, according to Japan, because of the emergency
nature and purpose of safeguard measures, a determination that the conditions are fulfilled to apply a
safeguard measure should lead to their immediate adoption and application. Japan's second written
submission, para. 123 and response to Panel question No. 47.
193 Japan's second written submission, paras. 122 and 124.
194 Japan's opening statement at the first meeting of the Panel, para. 69.
195 Japan's second written submission, para. 64; and response to Panel question No. 30.
196 Japan's second written submission, paras. 64 and 123.
197 Ukraine's second written submission, para. 13; and response to Panel question No. 3.
198 Ukraine's second written submission, para. 14.
199 Ukraine's first written submission, para. 58; and second written submission, para. 12.
200 Japan's first written submission, para. 218; second written submission, para. 121; and opening
statement at the second meeting of the Panel, para. 39.
201 Japan's first written submission, para. 216; and second written submission, para. 124.
202 Ukraine's first written submission, para. 114.
203 Ukraine's second written submission, para. 14; and response to Panel question No. 3.
204 Ukraine's opening statement at the second meeting of the Panel, paras. 44-45.

maintains that a one-year gap between the conclusion of the investigation and the actual
imposition of the safeguard measure is also too long. Japan submits that the increase in imports
relied upon by the competent authorit ies was therefore not recent enough.
205 According to Japan,
the measure at issue applied as of April 2013 can hardly be justified to be an "emergency action"
within the meaning of Article XIX:1(a) and Article 11.1(a) when the increase in imports which
must be demonstrated before such measures may be imposed relates to imports before 2011. 206
Furthermore, Japan contends that even if a significant delay could in principle be justified by good-
faith efforts on the part of a WTO Member to conduct negotiations subsequent to the investigation,
no such efforts were made in the present case. Japan argues that after providing the Key Findings
to certain interested parties, including Japan, the competent authorities did not contact them
again, nor did they make any other good faith efforts to settle the case before resorting to the
application of a safeguard measure.
207
7.162. The Panel begins by clarifying certain rele vant facts regarding the chronology of events in
this case. As will be explained in the section below concerning the requirement to notify the WTO
Committee on Safeguards 208, the evidence on record supports the conclusion that the competent
authorities in this case made their finding an d determination that imports in 2010 had increased
relative to domestic production compared to 2008 long before they decided to apply a safeguard
measure. Specifically, we explain below that in our view the competent authorities made a
determination of threat of serious injury caused by increased imports on 28 April 2012 (which was
not published), but only decided to apply a safeguard measure on 14 March 2013. 209 The measure
entered into force one month later. There was thus a time gap between the end of the period of
investigation in 2010 and the date of the substa ntive determination in April 2012, and an even
longer time gap between the end of the period of investigation and the decision to apply the
safeguard measure in March 2013. Japan questions the appropriateness of both time gaps under
Article 2.1.
7.163. Under Article 2.1, if a Member has determined that the relevant requirements, which
include increased imports, are satisfied, it may apply a safeguard measure. Neither Article 2.1 nor
any other provision of the Agreement on Safeguar ds specifies any maximum permissible time gap
between, on the one hand, the end of the period of investigation, and, on the other hand, (i) the
date on which the enabling substantive determination is made and (ii) the date of the decision to
apply a safeguard measure based on that determination. Nonetheless, Article 2.1 requires that the
product concerned "is being imported" in increased quantities. The Appellate Body made the
following observation regarding this phrase:
In our view, the use of the present tense of the verb phrase "is being imported" in
both Article 2.1 of the Agreement on Safeguards and Article XIX:1(a) of the
GATT 1994 indicates that it is necessary for the competent authorities to examine
recent imports, and not simply trends in imports during the past five years – or, for
that matter, during any other period of several years.
130 In our view, the phrase "is
being imported" implies that the increase in imports must have been sudden and
recent.
Footnote 130 reads:

The Panel ... recognizes that the present tense is being used, which it states "would
seem to indicate that, whatever the starting-point of an investigation period, it has to
end no later than the very recent past." (emphasis added) Here, we disagree with the
Panel. We believe that the relevant investigation period should not only end in the
very recent past, the investigation period should be the recent past.
210

205 Japan's second written submission, para. 124.
206 Japan's opening statement at the first meeting of the Panel, para. 68.
207 Japan's second written submission, para. 125.
208 See paras. 7.484-7.494 below.
209 The Panel record contains no evidence of any subsequent determination that would have
complemented or replaced the determination of 28 April 2012.
210 Appellate Body Report, Argentina – Footwear (EC), para. 130 (emphasis original).

7.164. The dispute before us presents the issue whether the increase in imports must have been
recent (i) in relation to the date on which the Member concerned determines that all requirements
for applying a safeguard measure are met (date of the determination); (ii) in relation to the date
on which that Member decides to apply a safeguar d measure (date of the decision on application);
or (iii) in relation to both these dates.
7.165. It is clear to us from the above-quoted statement by the Appellate Body that the increase
in imports must be recent in relation to the date of determination. The Appellate Body refers to the
competent authorities' "examination" and "investigation". The present continuous form in the
phrase "is being imported" indicates that at the time of determination the increase in imports must
have been recent. It is understood, however, th at the determination comes at the end of an
investigation
211 , which in itself requires time, and that this investigation must be based on
available import data. There thus will ordinarily be some time gap between the end of the period of
investigation and the date of determination. As no ted, that gap is explained by the time required
to conduct the investigation and the availability of necessary data. In our view, in assessing
whether an increase in imports was recent in relation to the date of determination, we must take
account of the time required to conduct and complete a proper investigation.
7.166. We now consider whether the increase in imports must also be recent in relation to the
date of the decision to apply a safeguard measure. As a contextual matter, we note that the
notification requirements in Article 12.1 indicate that the date of determination and the date of the
decision on application need not necessarily coincide. They may in the legal systems of some
Members, but not in others. Article 12.1 accordingly requires that the importing Member notify the
WTO Committee on Safeguards immedi ately upon (i) making a finding on serious injury or threat
thereof caused by increased imports – which is the date of the determination, as we use that term
here – and (ii) taking a decision to apply a sa feguard measure. To us, Article 12.1 suggests that,
depending on the institutional context of a partic ular Member, the decision to apply a safeguard
measure can come after the determination. In th ose cases, some delay between the date of the
determination and the decision on application may, therefore, be justified.
212
7.167. Ukraine referred to consultations with other Members as a reason for the time gap in this
case. According to Article 12.3, Members "propo sing to apply a ... safeguard measure" must
provide adequate opportunity for "prior consultati ons". The phrase "proposing to apply" suggests
that the requirement to give adequate opportunity for consultations arises once a Member has
taken a "decision to apply" a safeguard measure, which may in some Members, be after the date
of determination. 213 If a Member chooses to provide an additional opportunity for consultations
already after the date of determination, some limited delay may, in our view, be justifiable, if the
Member concerned engages in these consultations in good faith and they could still influence the
decision to apply a safeguard measure.
7.168. Ukraine's position, however, appears to be that if the relevant conditions and
circumstances are met on the date of determination, the relevant Member has the right pursuant
to Article 2.1 to apply an appropriate safeguard measure whenever it sees fit thereafter. In its
view, apparently, the only question that may arise from a delay in application is whether a
measure that is applied following some delay is be ing applied, as required by Articles 5 and 7 of
the Agreement on Safeguards, only to the extent necessary, and for such period as may be
necessary, to prevent or remedy serious injury and to facilitate adjustment.
214
7.169. Ukraine's interpretation of Article 2.1 rais es serious concerns, in our view. Under Ukraine's
interpretation, a Member could apply a safeguard measure based on data that is not the most
recent data available at the time of the application of the measure. Ukraine's interpretation thus
raises the possibility that a few years after the end of an investigation and the making of a
determination, a Member would proceed to apply a safeguard measure that would not be justified
if the Member's substantive determination had been based on more recent available data.

211 Article 3.1 of the Agreement on Safeguards provides that a Member may apply a safeguard measure
"only following an investigation by the competent authorities".
212 See para. 7.462 below.
213 See also para. 7.532 below.
214 For the texts of Articles 5 and 7, see paras. 7.367-7.368 below.

7.170. To us, this is a troubling prospect. The Agreement on Safeguards "permits Members to
impose measures against 'fair trade'" 215 and, to that end, gives Members the exceptional right,
subject to certain conditions, to withdraw or modify a tariff concession or suspend another
obligation under the GATT 1994 in order to take "e mergency action on imports" of a particular
product.216 However, the right to apply a safeguard measure, once established, cannot be saved
for future use. We therefore consider that the "extraordinary nature of safeguard measures" 217
militates against an interpretation of Article 2.1 under which a safeguard measure could be applied
in situations that are not (or are no longer) emergencies.
7.171. Ukraine suggests that the Panel should addr ess these concerns, if at all, under Articles 5
and 7. However, Japan has brought relevant claims under Article 2.1. 218 Even assuming that
Articles 5 and 7 could be invoked as bases for similar claims, we must address Japan's claims
under Article 2.1.
7.172. In view of the foregoing, an increase in imports must in our view not only be recent in
relation to the date of the determination, but also in relation to the date of the decision to apply a
safeguard measure. This minimizes the potential of "emergency action" being taken outside
emergency situations by ensuring that any time gap between the determination and the
application of a safeguard measure remains appropriately limited.
7.173. The question of precisely where the line is to be drawn between time gaps that pass
muster and those that do not can in our view be answered only in the context of a case-by-case
assessment.
219 We consider that in the absence of an explicit limitation in the text of the
Agreement on Safeguards, there is, and properly should be, some flexibility for the importing
Member to determine how soon after the date of determination a safeguard measure should be
applied. While there is no fixed maximum permissible time gap, it is clear to us that not all time
gaps would be acceptable. Indeed, while it may in certain circumstances be permissible to stretch
the elastic band that connects the decision to apply a safeguard measure to the facts underlying
the substantive determination, that band must not be stretched to a point where it snaps. A delay
may remove the date of application of a safeguard measure (and/or the date of the substantive
determination on which it is based) so far from the underlying facts that it is no longer possible to
maintain, when a Member finally decides to apply a safeguard measure (or makes its substantive
determination), that a product "is being imported" in increased quantities. In such circumstances,
the continued relevance of the associated determination can reasonably be questioned.
7.174. Turning to the dispute before us, we begin by summarizing the relevant facts. First, there
was a time gap of almost 16 months between the end of the period of investigation (2010) and the
date of the substantive determination of threat of serious injury caused by increased imports
(28 April 2012), and a time gap of more than two years between the end of the period of
investigation and the date of the decision to apply the safeguard measure (14 March 2013).
Second, the competent authorities initiated their investigation on 2 July 2011 and completed on
28 April 2012.
220 Thus, the investigation, which was extend ed once through a public notice, took
less than ten months, which, we note, is less than the 11-month maximum duration permitted
under Ukraine's Safeguards Law.
221 Finally, there was a time gap of ten and a half months

215 Appellate Body Report, US – Line Pipe, para. 109.
216 Article XIX is entitled "Emergency Action on Imports of Particular Products", and Article 11.1(a) uses
the same phrase.
217 Appellate Body Report, US – Line Pipe, para. 81.
218 Japan also brought a claim under Article 5.1, but has not laid particular emphasis on it. Japan's
second written submission, para. 237.
219 The Appellate Body in a dispute arising from the Anti-Dumping Agreement and concerning an injury
determination similarly indicated that "using a remote investigation period is not per se a violation of
Article 3.1" of the Anti-Dumping Agreement. The Appellate Body then went on to state, however, that subject
to an assessment of the particular circumstances surrounding a specific investigation, certain delays following
the end of the period of investigation "may raise real doubts about the existence of a sufficiently relevant
nexus between the data relating to the period of investigation and current injury". See Appellate Body Report,
Mexico – Anti-Dumping Measures on Rice, para. 167.
220 Ukraine's response to Panel question No. 124.
221 The investigation was extended on 7 March 2012, for a period of 60 days, based on Article 8.3 of
Ukraine's Safeguards Law. Article 8.3 provides that the duration of an investigation must not exceed 270 days,
unless the competent authorities decide to extend that duration by 60 days in extraordinary circumstances, in
which case they must issue a public notice to that effect. The relevant notice indicates that the extension in

between the substantive determination and the decision to apply the measure. Ukraine's
Safeguards Law does not appear to require such a delay between the date of determination and
the date of a decision to apply a safeguard measure. 222 Indeed, Ukraine does not argue that its
Safeguards Law mandated this particular delay. Rather, Ukraine argues that the delay resulted
from the need to complete consultations with certain Members exporting passenger cars to
Ukraine. We also note that no effort appears to have been made to update the data after the date
of the determination and revisit the determination in that light.223
7.175. We commence our analysis with the time gap between the end of the period of
investigation and the date of determination, which amounted to a little less than 16 months. The
initial six months of this time gap resulted from the fact that the competent authorities only
initiated the investigation in July 2011 with a peri od of investigation covering data for the three
most recent years for which such data was available at the time of initiation.
224 Japan has not
demonstrated that the competent authorities at that time or soon thereafter had access to, and
could have evaluated, more recent data, not just for imports, but also for relevant injury and
causal factors to be investigated at the same time. Nor has Japan established that using annual
data is in itself a questionable practice.
225 In the light of this, we see no reason to question the six-
month time gap.
7.176. The duration of the investigation was extended, but still remained below the maximum
permitted under the Safeguards Law. We note th at the Agreement on Safeguards establishes no
requirement or guideline concerning the duration of a safeguard investigation. Japan has not put
forward specific arguments to suggest that this investigation took longer than needed. We observe
in this respect that Ukraine published a notice specifically on the extension of the investigation.
That extension necessarily implied a concomitant delay in the substantive determination, and
consequently in the application of any safeguard measure that might be based on the results of
the investigation. Furthermore, the record indi cates that after, and possibly in response to,
consultations held with Japan on 19 April 2012, i.e. prior to the conclusion of the investigation, the
competent authorities lowered the proposed duty rate.
226 This suggests that the competent
authorities were actively engaged right up to the end of the investigation. In the absence of any
arguments from Japan in this respect, there is no basis to find that the investigation in this case
should have taken less time than it did.
227
7.177. For these reasons, we consider that in the particular circumstances of this case the 16-
month time gap following the end of the period of investigation did not remove the date of the
determination so far from the underlying facts as to call into question the conclusion that there
was a "recent" increase in imports as of that date. We therefore find that Japan has not
established that the relative increase in imports determined to have existed in this case on the
basis of data covering the period 2008-2010 was not recent enough in relation to the date of
determination, 28 April 2012.
7.178. We proceed to analyse the time gap of more than two years between the end of the period
of investigation in 2010 and the date of the decision to apply the safeguard measure,
14 March 2013. We have already considered the first 16 months of this time gap. All that remains
for us to examine, therefore, is whether the addi tional ten and a half months that followed the

this case occurred in order to allow a more thorough examination and evaluation of "a number of
circumstances, which are directly related to the establishment of the required facts". Notice of Extension of
Period of the Safeguard Investigation on Import of Motor Cars to Ukraine Regardless of Country of Origin and
Export, (Exhibit JPN-5).
222 The relevant provision appears to be Article 16.11, which indicates that, on request from the
Commission, the Ministry is to publish the Commission's decision on application of a safeguard measure.
223 Ukraine indicated that it updated the data relating to the 2008-2010 period of investigation with
some more recent information concerning import volumes in relative terms that was available before the
investigation was concluded. Ukraine's second written submission, paras. 11-12.
224 Ukraine's first written submission, para. 56. According to Article 8.2 of the Safeguards Law the period
of investigation normally covers between one and three years, exceptionally more than three years.
225 Japan merely pointed out that Ukraine collected additional data for the first half of 2011 that was
available, but did not discuss it in the Notice of 14 March 2013. Japan's response to Panel question No. 24.
226 Exhibits JPN-6 (Revised Version), p. 7, and JPN-2, p. 4.
227 We note in passing that in the anti-dumping and countervailing duty context, investigations must,
except in special circumstances, be concluded within one year, and in no case more than 18 months, after their
initiation. See Article 5.10 of the Anti-Dumping Agreement and Article 11.11 of the SCM Agreement.

substantive determination removed the date of th e decision to apply the safeguard measure too
far from the facts underlying that determination. In our view, an important consideration in this
respect is whether, if the competent authorities had proceeded differently, they could have taken
the decision to apply the safeguard measure on or around 14 March 2013 taking into account more
recent data, although this might have entailed a new investigation. Data for the full year 2012
would probably not have been available in time to allow its consideration in the context of a
decision taken in March 2013. But it is clear to us that data for the year 2011 would have been
available. Thus, the competent authorities could ha ve updated the data to take into account data
for the year 2011, whether by extending the period of investigation or some other mechanism,
and taken a decision to apply a safeguard measure on the basis of that more recent information in
March 2013. This alternative scenario suggests th at if the competent authorities had proceeded
differently after they made their determination in 2012, they could have made a decision on
whether to apply a safeguard measure on or around 14 March 2013, but based on more recent
data that would have included the year 2011.
228
7.179. It is reasonable to assume that a chan ge in the data being evaluated by the competent
authorities could possibly have resulted in a different substantive determination in this case. 229
Indeed, the jurisprudence indicates in this regard that particular importance attaches to
developments in the most recent portion of a period of investigation, especially in a threat of
serious injury case such as the present one.230
7.180. Ukraine contends that the time gap between the date of the determination and the date of
the decision to apply the safeguard measure was justified because it engaged in consultations on
the measure with various Members. The evidence on record does not permit us to confirm whether
various meetings identified by Ukraine with trade representatives of other countries concerned
exclusively, or even mainly, the proposed safegu ard measure, or whether meaningful efforts were
in fact undertaken towards adjusting the proposed measure in response to the representations of
other countries. However, Ukraine does not argue that these meetings led to any change in the
proposed measure.
231
7.181. In any event, as mentioned above, we accept that consultations undertaken in good faith
with other Members may, in principle, justify some delay in the application of a safeguard
measure. We have also explained, however, that a delay, even an otherwise legitimate one, may
remove the date of the decision to apply a safeguard measure so far from the facts underlying the
substantive determination that it is no longer possible to maintain, on that date, that a product "is
being imported" in increased quantities and that justifiable misgivings arise regarding the
continued relevance of the existing substantive determination. For the reasons we have just
explained, the dispute before us in our view fits within this latter category.
7.182. In our assessment, the time gap between the competent authorities' determination and
the decision to apply the safeguard measure was such that, on 14 March 2013, the competent
authorities could no longer maintain, based on data from 2008 to 2010 alone, that passenger cars
were "being imported" in increased quantities within the meaning of Article 2.1 and that the
determination of, inter alia, increased imports that they made on 28 April 2012 continued to rest
on a sufficient factual basis. We also note that Article 2.1 admits of no exception with regard to the
requirement to ensure that a safeguard measure be applied only if a product "is being imported ...
in such increased quantities". Thus, even ongoing, good faith consultations would not justify a
departure from the requirements of Article 2.1.

228 We note that it is not relevant for the purposes of these WTO panel proceedings whether these
alternatives were permissible under Ukraine's Safeguards Law.
229 As it is not for us as an adjudicating body, but the competent Ukrainian authorities, to determine
what substantive determination would be supported by data covering a different period of investigation, what
matters, in our view, is whether a change in the data that was evaluated could potentially have resulted in a
different determination. It is therefore not material whether or not we would have determined, looking at any
data before us for the period 2009-2011, that the determination would have been different. We note in this
respect that import data provided by Japan indicates that imports increased in 2011 in absolute terms. See
para. 7.142 above. However, the competent authorities would of course have to consider also the development
of all relevant injury and causal factors for 2011, for which we have not seen the data.
230 Appellate Body Reports, US – Steel Safeguards, para. 388; and US – Lamb, paras. 137 and 138.
231 As stated previously, the proposed measure had already been changed before the final
determination, following consultations with Japan.

7.183. This interpretation in our view does not hamper legitimate efforts that an importing
Member might undertake with a view to crafting a safeguard measure that takes into account the
concerns and interests of affected exporting countries. 232 We recall that before applying a
safeguard measure, the importing Member must, pu rsuant to Article 12.3, provide an opportunity
for consultations with Members having a substantial export interest. If an importing Member
wishes to engage in additional bilateral di scussions with exporting countries following its
substantive determination, there would appear to be ways to accomplish this. But we see no
provision in the Agreement on Safeguards under which the holding of such additional bilateral
discussions would excuse an inconsistency with an express obligation set out in the Agreement.
7.184. For these reasons, we consider that in the particular circumstances of this case the time
gap of more than two years following the end of the period of investigation removed the date of
the decision to apply the safeguard measure at issue too far from the underlying facts for the
competent authorities to be justified in concluding that there was a "recent" increase in imports as
of that date. We therefore find that the relative increase in imports, which the
competent authorities determined to have existed in this case on the basis of data covering the
period 2008-2010, was not recent enough in relation to the date of the decision to apply a
safeguard measure, 14 March 2013.
7.185. Having regard to all of the above, we th erefore conclude that Ukraine acted inconsistently
with Article 2.1, and specifically its requirement that a product "is being imported" in increased
quantities, by applying a safeguard measure that was not based on a "recent" increase in imports.
7.3.1.4 "[U]nder such conditions"
7.186. The Panel turns, finally, to Japan's addi tional contention that Ukraine did not make a
proper determination of "increased imports", beca use it failed to examine the "conditions" under
which the increase in imports occurred.
7.187. Japan argues that, pursuant to Article 2.1, the competent authorities must examine
the "conditions" under which the imports occur. Re lying on a statement of the Appellate Body in
US – Steel Safeguards, Japan contends that the question whether "increased quantities" of imports
will suffice to justify the application of a safeguard measure can be answered only in the light of
the "conditions" under which those imports occur. Japan further refers to the panel report in
Argentina – Footwear (EC) , arguing that the phrase "under such conditions" indicates the need to
analyse the conditions of competition between the imported product and the domestic like or
directly competitive products in the importing country's market. Thus, Japan considers that the
analysis of the conditions under which the imports occur is important in order to properly evaluate
whether the increased quantities of imports are su ch as to qualify as "increased imports" under
Article 2.1.
233
7.188. Regarding the dispute at hand, Japan submits that Ukraine failed to examine the
"conditions" under which the increased imports occurred. In Japan's view, it is highly relevant that
while imports increased in relative terms, the volume of imports in absolute terms decreased
substantially. Japan argues that without an analysis of the relevant "conditions", Ukraine was not
in a position to properly evaluate whether the imposition of a safeguard measure was warranted.
According to Japan, the Notice of 14 March 2013 id entifies the drop in domestic consumption and
the decrease of the market share of the domestic producers, but does not identify the "conditions"
under which the imports occurred. Japan argues th at even if one were to assume that these
developments are meant to be "conditions", the Notice of 14 March 2013 does not offer any

232 We recall that in the present case it is unclear what specific efforts were undertaken in that direction.
Moreover, we have not been made aware of any such efforts having resulted in a change to the proposed
safeguard measure.
233 Japan's first written submission, paras. 108–110 and 233; second written submission, paras. 139–
141; opening statement at the second meeting of the Panel, para. 43; Panel Report, Argentina – Footwear

"reasoned and adequate explanation" as to how these developments constituted "such conditions
as to cause or threaten serious injury to domestic producers".234
7.189. In response, Ukraine argues that the la ck of examination of th e "conditions" of the
increase in imports is not pertinent to the question whether increased imports were found to exist
and concerns the different question of causation.235
7.190. The Panel recalls that Article 2.1 contains the phrase "such product is being imported into
its territory in such increased quantities … and under such conditions as to cause or threaten to
cause serious injury to the domestic industry…". In our view, this phrase identifies two distinct
elements. The first element refers to increased quantities of imports, while the second refers to
the conditions under which they occur, which must be such as to make it possible for those
increased quantities to cause serious injury or threat thereof. The "conditions" under which
imports occur in our view have no bearing on whet her or not there have been increased quantities
of imports. Consequently, we do not consider that an analysis of the "conditions" under which
imports occur forms an integral part of the analysis of the quantities in which imports occur. This
view is consistent with the finding of the panel in Argentina – Footwear (EC) , which stated that
"the phrase 'under such conditions' in fact refers to the substance of the causation analysis that
must be performed under Article 4.2(a) and (b)".
236 The Appellate Body in US – Wheat Gluten
agreed with the panel's analysis and linked the phrase "under such conditions" to the analysis of
causation under Article 4.2(b). 237 We thus agree with Ukraine that the examination of the
conditions under which the imports occur is relevant to the question of causation. Accordingly, we
will consider whether Ukraine analysed the conditions under which the imports occurred when we
address Ukraine's determination of the causal link between increased imports and serious injury or
threat thereof to the domestic industry later in our report.
238
7.3.1.5 Overall conclusion
7.191. In sum, the Panel has found above that:
a. Ukraine has failed to provide an explanation in its published report regarding how
intervening trends in imports relative to domestic production supported the competent
authorities' determination that there was a relative increase for the period of
investigation 2008-2010;
b. Ukraine has failed to demonstrate that the increase in imports was sudden enough,
sharp enough, and significant enough;
c. there is no need to make findings regarding whether Ukraine should have provided the
amounts of imports;
d. Ukraine has failed to demonstrate that the increase in imports was recent enough; and
e. the issue whether Ukraine analysed the conditions under which the imports occurred is
to be addressed in the context of the Panel's analysis of causation.
7.192. Based on these findings, we therefore conclude that the competent authorities'
determination of increased imports in this case is inconsistent with Article 2.1.

234 Japan's first written submission, paras. 234-235; second written submission, para. 141; and opening
statement at the second meeting of the Panel, para. 43.
235 Ukraine's first written submission, para. 125.
236 Panel Report, Argentina – Footwear (EC), para. 8.250; see also Panel Report, US – Wheat Gluten,
para. 8.108.
237 Appellate Body Report, US – Wheat Gluten, paras. 76-78.
238 See para. 7.297 below.

7.3.2 Claims under Articles 3.1, 4.2(a), 4.2(c), and 11.1(a), and Article XIX:1(a)
7.193. The Panel now turns to address the remainde r of the group of claims relating to Ukraine's
determination of increased imports. We first address, jointly, Japan's claims under
Articles 4.2(a)
239, and 11.1(a)240, and Article XIX:1(a).241
7.3.2.1 Claims under Articles 4.2(a) and 11.1(a), and Article XIX:1(a)
7.194. Japan claims that in making its determination on increased imports, Ukraine acted
inconsistently also with Articles 4.2(a), and 11.1(a), and Article XIX:1(a). Specifically, Japan
argues that: (i) Ukraine failed to demonstrate th at the increase in imports was recent enough,
sudden enough, sharp enough, and significant enou gh; (ii) Ukraine failed to make a qualitative
analysis of the data on imports taking into account the intervening trends; (iii) Ukraine failed to
demonstrate that the increased imports were "unforeseen" or "unexpected"; and (iv) Ukraine
failed to examine the "conditions" under which the increase in imports occurred.
242
7.195. Ukraine considers that Japan's claims are without merit. Ukraine submits that it has clearly
established the sudden, recent, and sharp increase in imported products relative to domestic
production. Ukraine contends that it has met its obligations under the Agreement on Safeguards
by examining all elements related to the increase in imports.243
7.196. The Panel has concluded above that the co mpetent authorities' determination of increased
imports is inconsistent with Article 2.1. In the light of this, we do not consider it necessary, for the
purposes of resolving this dispute, to make additi onal findings on whether Ukraine, in respect of
the same determination, has also acted inconsistently with its obligations under Articles 4.2(a),
and 11.1(a), and Article XIX:1(a). We consequent ly exercise judicial economy and make no
findings with regard to these claims.
7.3.2.2 Claims under Article 3.1, last sentence, and Article 4.2(c)
7.197. We turn, finally, to Japan's claim that Ukraine acted inconsistently with Article 3.1, last
sentence, and Article 4.2(c) in respect of its determination of the increase in imports.
7.198. Japan submits that, contrary to what is re quired by Articles 3.1 and 4.2(c), Ukraine failed
to provide a "reasoned and adequate explanation" for the determination of "increased imports".
Japan, referring to the Appellate Body Report in US – Steel Safeguards , argues that both
Articles 3.1 and 4.2(c) apply to the determination of increased imports. Japan points out that
according to the Appellate Body the condition that there must be "increased imports" constitutes a
pertinent issue of fact and law within the meaning of Article 3.1.
244 Japan contends that the
published report in this case, i.e. the Notice of 14 March 2013, does not set forth any findings and
reasoned conclusions regarding the determination of "increased imports". According to Japan, the
Notice merely states that imports of the prod uct concerned increased in 2010 as compared to
2008 relative to domestic production by 37.9% wi thout giving further reasoned explanations and
conclusions. Japan notes that, in particular, the Notice does not give any explanation of how the
fact that imports decreased in absolute terms by 71% in 2010 compared to 2008, but increased by
38% relative to domestic production, supports the determination that a safeguard measure was
warranted.
245
7.199. In response, Ukraine insists that the Notice of 14 March 2013 and the Key Findings contain
a detailed analysis of the case under investigation as well as a demonstration of the relevance of

239 For the text of Article 4.2(a), see para. 7.202 below.
240 For the text of Article 11.1(a), see para. 7.106 above.
241 For the text of Article XIX:1(a), see para. 7.43 above.
242 Japan's first written submission, paras. 212-213.
243 Ukraine's first written submission, paras. 108 and 126; opening statement at the first meeting of the
Panel, para. 53; second written submission, paras. 48, 49 and 54; and opening statement at the second
meeting of the Panel, paras. 40, 42 and 54.
244 Appellate Body Report, US – Steel Safeguards, paras. 289 and 331.
245 Japan's first written submission, paras. 238-239 and 241-242; second written submission, para. 142;
and opening statement at the second meeting of the Panel, para. 38.

the factors examined. Ukraine further argues that a more detailed analysis and its results were
presented to the Commission and were the basis for the imposition of the safeguard measure.
Ukraine notes, however, that they were confidential and were therefore not disclosed to Japan.246
7.200. The Panel has concluded above that the co mpetent authorities' determination of increased
imports is inconsistent with Article 2.1. In the li ght of this, we see no need to make findings on
whether, in respect of the same determination, Ukraine has also acted inconsistently with
Articles 3.1 and 4.2(c). We consequently exercise judicial economy and make no findings with
regard to these claims.
7.4 Claims relating to threat of serious injury
7.201. The Panel now turns to Japan's claims related to the manner in which the competent
authorities made their findings regarding the serious injury or threat thereof, under Articles 2.1,
3.1, 4.1(a), 4.1(b), 4.2(a), 4.2 (b), 4.2(c) and 11.1(a), and Article XIX:1(a). We will begin our
consideration with the claim under Article 4.2(a), which in our view contains the most specific rules
on the injury determination Members must make in a safeguard investigation, that is to say, a
determination of whether increased imports cause or threaten to cause serious injury to the
domestic industry.
7.4.1 Claim under Article 4.2(a)
7.202. Article 4.2(a) provides as follows:
In the investigation to determine whether increased imports have caused or are
threatening to cause serious injury to a domestic industry under the terms of this
Agreement, the competent authorities shall evaluate all relevant factors of an
objective and quantifiable nature having a bearing on the situation of that industry, in
particular, the rate and amount of the increase in imports of the product concerned in
absolute and relative terms, the share of the domestic market taken by increased
imports, changes in the level of sales, production, productivity, capacity utilization,
profits and losses, and employment.
7.203. Japan claims that Ukraine acted inconsistently with, inter alia, Article 4.2(a) in making its
serious injury and/or threat of serious injury determination on a number of bases. Japan argues
that the competent authorities failed to evaluate all relevant factors. Japan notes that Article 4.2(a)
sets out a non-exhaustive list of injury factors that must be evaluated by the competent
authorities during a safeguard investigation. According to Japan, however, the Notice of
14 March 2013 does not even refer to one of thes e factors, the "share of the domestic market
taken by the increased imports". Japan further asserts that, while the competent authorities
referred to the rate of the increase in imports, they did not refer to, much less evaluate the
"amounts" of such increase.
247 In Japan's view, evaluation is a process of analysis which requires
an examination of the data pertaining to each factor individually and of each factor in relation to
the other factors examined.
248 Japan submits that, in the Notice, the competent authorities merely
listed the rate of increase or decrease for the injury factors without properly evaluating them.249
7.204. Japan contends that it is not clear from the Notice whether the competent authorities
made a finding of serious injury and/or threat of serious injury. 250 Japan considers that this failure
constitutes in itself a violation of the relevant provisions of the Agreement on Safeguards, because
Ukraine cannot have provided an adequate and reasoned explanation as to why the facts on the
record supported the conclusion it made.251

246 Ukraine's first written submission, para.124; opening statement at the first meeting of the Panel,
247 Japan's first written submission, para. 252.
248 Ibid. para. 258.
249 Ibid. para. 255.
250 Ibid. para. 251.
251 Japan's opening statement at the first meeting of the Panel, paras. 77 and 78; second written
submission, paras. 147 and 148.

7.205. With regard to the competent authorities' determination of threat of serious injury, Japan
argues that the determination failed to demonstrate a "significant overall impairment" that is
"clearly imminent". Japan argues that the very limited reasoning in the Notice does not show that
serious injury was on the very verge of occurring, nor that there was a high degree of likelihood
that the anticipated serious injury will materialize in the very near future.
252
7.206. Finally, Japan argues that the competent authorities failed to make a determination based
on the recent past by relying on data for th e period between 2008 and 2010 while adopting the
safeguard measure in 2012 and applying it in April 2013. 253 Japan refers to the Appellate Body's
statement in US – Lamb that in making a determination of a threat of serious injury the competent
authorities should pay particular attention to the data from the most recent past in this regard.
7.207. Ukraine submits that its competent authorities conducted a proper analysis of the relevant
injury factors in making the threat of injury determination. 254 Referring to a chart containing a
"public summary" of the injury factors analysed by its competent authorities, Ukraine maintains
that it did not exclusively rely on end-point-to-end-point comparisons, but analysed the trend over
the entire investigation period as well, including the data for the intervening year of 2009.
255
According to Ukraine, the deterioration of each of the factors from 2008 to 2010 shows a potential
for significant injury, with certain factors such as market share providing the factual basis for a
finding that serious injury is "clearly imminent". 256 Ukraine adds that, in addition to the worsening
condition of the domestic industry, its competent authorities also analysed the capacity for future
exports by exporting countries.
257
7.208. With regard to the amounts of the increase, Ukraine argues that further to a request from
the domestic industry, this information was trea ted as confidential under Article 3.2 of the
Agreement on Safeguards and Article 12 of its Safeguard Law.258
7.209. According to Ukraine, Japan also fails to give full consideration to the documentation
issued by Ukraine. Ukraine maintains that the co mpetent authorities clearly analysed the market
share data and stated in the Notice that "the share of domestic production in the domestic market
of Ukraine also decreased by 35%".
259
7.210. In response to Japan's argument that Ukra ine failed to make an injury determination on
the basis of data from the recent past by applyi ng the measure in 2013 on the basis of data from
2008 to 2010, Ukraine submits that Japan should have brought a claim under Articles 5 or 7 of the
Agreement on Safeguards dealing with the applic ation of the safeguard measure. According to
Ukraine, there can be no doubt that the right to apply a safeguard measure existed at the time the
determination was made.260
7.211. Ukraine also argues that there is no need to make a discrete finding of serious injury or
threat of serious injury under the Agreement on Safeguards.261 Ukraine clarifies in this respect that
its competent authorities considered that the standards of serious injury were not met
incontestably in the present case despite the fact that all relevant factors confirmed the worsening
condition of the domestic industry. However, th e competent authorities took the view that the
standards concerning the threat of serious injury ar e "remarkably" lower if such threat is shown to
be imminent
262, and concluded that the worsening of all the relevant injury factors combined with
the significant export potential of the notable ex porters of motor cars to Ukraine constituted a
threat of serious injury.263

252 Japan's first written submission, para. 262.
253 Ibid. para. 268.
255 Ukraine's first written submission, paras. 135 and 145. (Exhibit UKR-3)
256 Ibid. referring to Appellate Body Report, US – Lamb, paras. 136-138.
258 Ukraine's response to Panel question No. 2.
259 Ukraine's first written submission, para. 134.
260 Ibid. para. 149.
261 Ibid. para. 133, referring to Appellate Body Report, US – Line Pipe, paras. 169-172.
262 Ibid.
263 Ukraine's response to Panel question Nos. 4 and 20.

7.212. Japan responds that its claim is not that the competent authorities should have made a
finding of serious injury only or threat of serious injury only. Rather, Japan claims that the
requirement to give an adequate and reasoned explanation as to why the facts on the record
support a determination of serious injury and/or th reat thereof necessarily implies that the type of
determination made must be clearly identified in the published report.
264
7.4.1.1 The competent authorities' determination
7.213. The Panel will first examine Japan's contention that Ukraine failed to clearly identify in the
published report whether the determination was one of serious injury and/or threat of serious
injury.
7.214. As before, we base our evaluation on the Notice of 14 March 2013, which we consider is
the published report within the meaning of Articles 3.1 and 4.2(c). So far as the injury analysis is
concerned, that document contains two sections. Section 2 is headed "Research on existing or
likely future export potential of countries of origin or exporting countries, as well as the possibility
that such potential will be used for exports of the Product to Ukraine". As indicated by the heading
of this section, the competent authorities analysed in this section the existing or likely future
export potential of certain key exporting countri es of passenger cars, namely Turkey, Korea,
Romania, Germany, Japan, and Russia. The conclusion of that section reads as follows:
Given this, the noted trends in the development of the world automotive industry
within the sense of Article 13 § 3(2) of th e Law (on Safeguards of Ukraine) confirm
that existing or near-future export potential in countries of origin or export countries
may be used for exporting automobiles to Ukraine.
265
7.215. The other section on the injury analysis, Section 3, is headed "Examination of trends of
Product import to Ukraine affecting the domestic industry and existence of causal link between
increased imports of Products to Ukraine and thre at of serious injury to the domestic industry". 266
In this section, the competent authorities set out an analysis of the relevant injury factors during
the period of investigation, i.e. from 2008 to 2010, including the production volume of the
domestic industry, capacity utilisation, sales volumes within the domestic market, operating profit,
employment, productivity, the volume of imports, and the share of domestic production in the
domestic market. The conclusion of that section reads as follows:
In light of the increased import volume of the Product to Ukraine and conditions of
such import, the domestic industry was driven out of the domestic market within
Ukraine, resulting in a worsening of the poor state of the national industry and a
threat of serious injury to the domestic industry.
…
According to the findings of the investigation carried out by the Ministry, the increase
of motor cars imports into Ukraine regardless of country of origin and export, relative
to domestic production and demand, was occurring under such conditions and
volumes that the imports threatened to cause serious injury to the domestic industry,
which were not caused by other factors.
267
7.216. The heading and conclusion of Section 3 expl icitly refer to a finding of "threat of serious
injury". Similarly, the analysis of the future ex port potential of certain exporting countries under
Section 2 reflects a forward-looking perspective that is characteristic of a threat of injury analysis.
By contrast, nowhere in the injury analysis did the competent authorities make any finding of
actual serious injury. In the light of these elemen ts in the Notice, we consider that the competent
authorities made a determination of threat of serious injury only. There is no indication in the
Notice that they found serious injury, or serious injury and/or a threat of serious injury.

264 Japan's second written submission, para. 149.
265 Notice of Imposition of 14 March 2013, (Exhibit JPN-2), p. 2. (emphasis added)
266 Ibid. p. 3.
267 Ibid. p. 3. (emphasis added)

7.217. This is further confirmed by the unpublished Key Findings. 268 Section 3 of the Key Findings
is headed "Determination of serious injury or threat thereof". In this section, the competent
authorities first analyse the development of the injury factors from 2008 to 2010. The Key Findings
then state that:
Taking into account the unique position of the interested parties to the investigation,
namely that the worsening financial and economic condition of the domestic producer
in 2010 compared to 2008 was connected with the decrease of consumption level of
the Product in the Ukrainian mark et, the Ministry has estimated the possibility of
injury caused to the domestic industry in the future , in particular the existing or
potential future export potential of the countries of origin or export countries, as well
as the possibility of the said potential being used for the export of this product to
Ukraine.
In the context of the threat of serious injury in the future , it must be noted that data
furnished by the International Organization of Motor Vehicle Manufacturers (OICA)
show that in 2008 and in 2010 no vehicle producing country reduced its production of
motor cars to the extent that Ukraine did (by 79%). Taking into account that certain
countries decreased their production, they consequently have considerable spare
capacities which can be re-directed to export markets including that of Ukraine.
269
7.218. This is followed by further detailed analysis of the export potential of certain key exporting
countries including Turkey, Korea, Romania, Germ any, Japan, and Russia. On this basis, the
competent authorities concluded that:
An analysis of trends in the global develo pment of the automobile industry within the
meaning of clause Article 13 § 3(2) of th e Law, conducted by the Ministry, showed
that the existing or likely future export potential of the countries of origin and export
countries, may be possibly utilized for the export of motor cars subject to
investigation to Ukraine.
Research results led to the conclusions that the factors defined in Article 13 § 3 of the
Law and Article 4 § 1 of the Agreement with regard to the threat of serious injury to
the domestic industry, were present."270
7.219. In our view, such references as "the possibility of injury caused to the domestic industry in
the future", and "in the context of the threat of serious injury in the future" indicate that the
competent authorities sought to establish a finding of threat of serious injury. Moreover, we note
that the last sentence of the Key Findings cited above states that "[r]esearch results led to the
conclusions that the factors … with regard to the threat of serious injury to the domestic industry,
were present". It is thus clear to us that the conclusion reached is one of threat of serious injury.
7.220. In the light of the above, and in spite of the fact that there might have been some initial
ambiguities in this respect resulting from the Notice of Initiation, we find that in the Notice of
14 March 2013 the competent authorities identified sufficiently clearly that they made an
affirmative determination of a threat of serious injury. Consequently, we reject Japan's argument
that Ukraine acted inconsistently with its obligations under the Agreement on Safeguards because
it failed to clearly identify in the published report whether the determination made was one of
serious injury and/or threat of serious injury.
7.221. We note that Japan makes arguments concerning both the competent authorities' analysis
of serious injury and their analysis of threat of serious injury. As we have found above that the
competent authorities made only a finding of a threat of serious injury in the Notice of
14 March 2013, we will address Japan's claim only insofar as it concerns the threat of serious
injury determination.

268 Exhibit JPN-6 (Revised Version).
269 Exhibit JPN-6 (Revised Version), p. 3.
270 Ibid. p. 5. (emphasis added)

7.4.1.2 Analysis of threat of serious injury
7.222. Article 4.1(b), which defines "threat of serious injury" and sets out certain requirements
for a determination of such threat, reads:
"threat of serious injury" shall be understood to mean serious injury that is clearly
imminent, in accordance with the provisions of [Article 4.2]. A determination of the
existence of a threat of serious injury shall be based on facts and not merely on
allegation, conjecture or remote possibility.
This definition refers to "serious injury" which is defined, in turn, in Article 4.1(a) as follows:

"serious injury" shall be understood to mean a significant overall impairment in the
position of a domestic industry.
Thus, a competent authority making a determination of threat of injury must establish (i) the clear
imminence of (ii) significant overall impairment in the position of a domestic industry.

7.4.1.2.1 "Significant overall impairment"
7.223. We begin our examination with the second element, "significant overall impairment". The
parties disagree on whether the standard of injury fo r a finding of threat of serious injury is lower
than or the same as for a finding of actual serious injury. Ukraine considers that it is widely
recognized that the standard for a finding of threat of serious injury" is remarkably lower than for
a finding of "serious injury", provided that such threat is shown to be imminent.
271 Japan argues
that the Appellate Body in US – Lamb when addressing the concept of "serious injury" referred to a
"very high standard of injury". According to Japan, this very high standard applies equally to
serious injury and the threat thereof.272
7.224. As an initial matter, we note that Article 4.1(b) defines "threat of serious injury" as
"serious injury" that is clearly imminent. It is thus apparent that, definitionally and conceptually
speaking, the "serious injury" to be established in a determination of a "threat of serious injury" is
not different from the "serious injury" to be established in a determination of "serious injury". In
other words, we perceive no difference between the two types of situations in terms of the level or
extent of injury that must be shown – in either case it has to be "serious" injury. The difference
between the two situations relates to whether "serious injury" has already materialized – "yes" in
the case of a finding of serious injury, "not yet" in the case of a finding of threat of serious injury.
7.225. Regarding the concept of "serious injury", the Appellate Body has on several
occasions underscored the very high standard of in jury embodied by the concept of serious injury.
In US – Wheat Gluten, the Appellate Body referred to that standard as "exacting".
273 In US – Lamb,
the Appellate Body reaffirmed this high standard in the context of "threat of serious injury",
observing that:
[T]he word "injury" is qualified by the adjective "serious", which, in our view,
underscores the extent and degree of "significant overall impairment" that the
domestic industry must be suffering, or must be about to suffer, for the standard to
be met.
We are fortified in our view that the standard of "serious injury" in the Agreement on
Safeguards is a very high one when we cont rast this standard with the standard of
"material injury" envisaged under the Anti -Dumping Agreement, the Agreement on
Subsidies and Countervailing Measures (the "SCM Agreement") and the GATT 1994.
We believe that the word "serious" connotes a much higher standard of injury than
the word "material". Moreover, we submit that it accords with the object and purpose
of the Agreement on Safeguards that the injury standard for the application of a

271 Ukraine's response to Panel question Nos. 4 and 20; first written submission, para. 133.
272 Japan's first written submission, para. 126 (referring to Appellate Body Report, US – Lamb,
273 Appellate Body Report, US – Wheat Gluten, para. 149.

safeguard measure should be higher than the injury standard for anti-dumping or
countervailing measures …. 274
The Appellate Body in the same dispute further stated that:

[I]n making a determination on either the existence of "serious injury" or on a
"threat" thereof, panels must always be mindful of the very high standard of injury
implied by these terms.
275
7.226. Having clarified that in common with the co ncept of "serious injury" the concept of "threat
of serious injury" reflects a very high level of injury to be established, it is necessary to look in
more detail at the difference between these two concepts. In US – Line Pipe , the Appellate Body
underscored that the respective definitions of "serious injury" and "threat of serious injury" must
be given independent meaning and stated that:
[T]hese two definitions reflect the reality of how injury occurs to a domestic industry.
In the sequence of events facing a domestic industry, it is fair to assume that, often,
there is a continuous progression of injurious effects eventually rising and culminating
in what can be determined to be "serious injury". Serious injury does not generally
occur suddenly. Present serious injury is of ten preceded in time by an injury that
threatens clearly and imminently to become serious injury, as we indicated in US –
Lamb. Serious injury is, in other words, often the realization of a threat of serious
injury. Although, in each case, the investigating authority will come to the conclusion
that follows from the investigation carried out in compliance with Article 3 of the
Agreement on Safeguards, the precise po int where a "threat of serious injury"
becomes "serious injury" may sometimes be difficult to discern. But, clearly, "serious
injury" is something beyond a "threat of serious injury".
In our view, defining "threat of serious injury" separately from "serious injury" serves
the purpose of setting a lower threshold for establishing the right to apply a safeguard
measure. Our reading of the balance struck in the Agreement on Safeguards leads us
to conclude that this was done by the Members in concluding the Agreement so that
an importing Member may act sooner to take preventive action when increased
imports pose a "threat" of "serious injury" to a domestic industry, but have not yet
caused "serious injury". And, since a "threat" of "serious injury" is defined as "serious
injury" that is "clearly imminent", it logically follows, to us, that "serious injury" is a
condition that is above that lower threshold of a "threat". A "serious injury" is beyond
a "threat", and, therefore, is above the thre shold of a "threat" that is required to
establish a right to apply a safeguard measure.
276 (Emphasis added; original
emphasis omitted)
7.227. In our view, the Appellate Body's reference to a "lower threshold for establishing the right
to apply a safeguard measure" is in respect of the fa ct that, by definition, a finding of a "threat" of
serious injury allows a Member to apply a safeguard measure even though there is not yet any
observable serious injury, although such serious injury is clearly imminent, or "just around the
corner", as it were. The Agreement on Safeguards reserves this right to Members so that they may
take protective action to prevent imminent serious injury rather than wait for serious injury to
materialize and then remedy it afterwards. It is in this sense of enabling such preventative action
even though there is no actual serious injury that we understand the Appellate Body to have
referred to the Agreement setting a lower threshold.
7.228. Significantly, however, neither the Agreement nor logic suggests that merely because the
Agreement allows application of a safeguard meas ure even before serious injury has actually
occurred, the relevant degree of injury should be easier to demonstrate in such cases. Indeed, this
would have the perverse consequence of making it more difficult for a Member whose domestic
industry is already suffering actual serious injury to apply a safeguard measure than it would be
for the same Member in a case where the same domestic industry is facing a threat of serious

274 Appellate Body Report, US – Lamb, para. 124.
275 Ibid. para. 126.
276 Appellate Body Report, US – Line Pipe, paras. 168 and 169.

injury, but not yet experiencing such injury. We also find relevant Article 4.1(b), which states that
a "determination of the existence of a threat of serious injury shall be based on facts and not
merely on allegation, conjecture or remote possibility". In our view, this requirement confirms that
a threat of serious injury determination must be gr ounded in facts, just like a finding of serious
injury.
7.229. Moreover, we note that Articles 3.8 of the Anti-Dumping Agreement and 15.8 of the SCM
Agreement specifically indicate that "special care" should be taken when deciding to apply anti-
dumping or countervailing measures in threat of material injury cases.
277 In our view, "special
care" is warranted because a determination of a threat of material injury requires no
demonstration of actual, or present, material injury, and there always remains the possibility that
the threatened injury would not actually materialize for reasons that were not foreseen at the time
of the determination. The same possibility logically exists in the context of a determination of a
threat of serious injury in a safeguard investigation. We recognize that neither Article 4.2(a) nor
any other provision of the Safeguard Agreement contains the phrase "special care". Nonetheless,
the similarities between the definitions and analysis of material injury and threat thereof in the
Anti-Dumping Agreement and the SC M Agreement, and those of serious injury and threat thereof
in the Agreement on Safeguards underscore and su pport our concern about Ukraine's view that it
should be easier to establish a threat of serious injury than actual serious injury.
7.230. In sum, we agree that the concept of "threat of serious injury" implies a lower threshold
for establishing the right to apply a safeguard measure, in the sense that it allows a Member to
apply a safeguard measure even in the absence of demonstrated serious injury. But, for the
reasons explained above, we are unable to agree that the Agreement on Safeguards makes threat
of serious injury easier to establish than actual serious injury, such that it would be easier to
justify the application of a measure in situations where no actual serious injury has arisen, but a
threat thereof exists. In our view, the nature and extent of "serious injury" is the same in both
cases – only the timing of that injury is different in the two contexts. Thus, we consider that in
both contexts a Member must be able to demonstrate the same elements regarding serious injury.
In the threat context, it must be demonstrated in addition that such injury is "clearly imminent".
And, like a determination of present serious inju ry, a determination of threat must be based on
facts. In that regard, of course, it must be kept in mind that by its nature, a finding of a threat of
serious injury is a forward-looking predictive finding based on facts concerning the present state of
the domestic industry.
7.4.1.2.2 "Clearly imminent"
7.231. Regarding the other element of the definition of the concept of "threat of serious injury",
which is that serious injury must be "clearly imminent", we recall that the Appellate Body found in
US – Lamb that:
The word 'imminent' relates to the moment in time when the 'threat' is likely to
materialize. The use of this word implies th at the anticipated "serious injury" must be
on the very verge of occurring. Moreover, we see the word 'clearly', which qualifies
the word 'imminent', as an indication that there must be a high degree of likelihood
that the anticipated serious injury will materialize in the very near future. We also
note that Article 4.1(b) provides that any determination of a threat of serious injury
'shall be based on facts and not merely on allegation, conjecture or remote
possibility.' To us, the word 'clearly' relates also to the factual demonstration of the
existence of the 'threat'. Thus, the phrase 'clearly imminent' indicates that, as a
matter of fact, it must be manifest that the domestic industry is on the brink of
suffering serious injury.
278
7.232. Thus, in making a determ ination of a threat of serious injury the competent authorities
need to demonstrate, on the basis of facts rather than conjecture, that serious injury is highly
likely to occur in the very near future, unless protec tive action is taken. In our view, this specific

277 Article 3.8 of the Anti-Dumping Agreement provides that "[w]ith respect to cases where injury is
threatened by dumped imports, the application of anti-dumping measures shall be considered and decided with
special care".
278 Appellate Body Report, US – Lamb, para. 125.

inquiry involves not only an assessment of historical and existing facts but also involves making
fact-based projections concerning future developments in the domestic industry's condition.
7.4.1.2.3 Evaluation of relevant factors in a threat of serious injury determination
7.233. Before examining the competent authorities' determination of threat of serious injury in
the investigation at issue, we wish to highlight one further element. Article 4.2(a) provides as
follows:
In the investigation to determine whether increased imports have caused or are
threatening to cause serious injury to a domestic industry under the terms of this
Agreement, the competent authorities shall evaluate all relevant factors of an
objective and quantifiable nature having a bearing on the situation of that industry, in
particular, the rate and amount of the increase in imports of the product concerned in
absolute and relative terms, the share of the domestic market taken by increased
imports, changes in the level of sales, production, productivity, capacity utilization,
profits and losses, and employment.
279
7.234. Thus, in making a determination of a thre at of serious injury, the competent authorities
must evaluate all relevant injury factors. These include the same mandatory factors identified in
Article 4.2(a) that the competent authorities must evaluate when making a determination of
serious injury. In the specific case of an analysis of threat of serious injury, the competent
authorities must evaluate all relevant factors with a view to determining whether as a whole, they
support a finding that "serious injury" is "clearly imminent". This notably requires a fact-based
assessment of likely developments in the very near future with respect to all the relevant
factors.
280
7.235. In this context, we consider that data pertaining to the latter part of the period of
investigation are of particular relevance to assessing the likely immediate future developments in
the injury factors for an analysis of a threat of serious injury.281
7.4.1.3 The competent authorities' analysis of threat of serious injury
7.236. With the above considerations in mind, we now go on to examine whether the competent
authorities' determination of a threat of serious injury in the present case satisfies the
requirements of Article 4.2(a).
7.237. Japan argues that the competent authorities failed to examine all relevant factors, in
particular the "amounts" of the increase in imports and the "share of the domestic market taken
by increased imports". 282 Regarding the amounts of the increase, Japan submits that both the
amounts and rate of increase are relevant factors to be evaluated. Japan submits that, depending
on the amounts, the relative increase in the present case may not be significant.
283
7.238. Furthermore, Japan submits that Ukraine fail ed to evaluate the injury factors, especially
the intervening trends over the period of in vestigation. Japan asserts that the competent
authorities' injury analysis in the Notice of 14 March 2013 consists of merely reporting the rate of
change between 2008 and 2010, which in Japan's view does not amount to an "evaluation". In
Japan's view, an "evaluation" implies (i) an assessment of the role, relevance and relative weight
of each factor, and (ii) an analysis of data through placing it in context in terms of the particular

279 Emphasis added.
280 For instance, since one of the relevant factors expressly identified in Article 4.2(a) is "the rate and
amount of increase in imports of the product concerned", the competent authorities would need to make a
projection on the basis of available facts as to the likely rate and amount of increase in imports in the very
near future.
281 We note the view expressed by the Appellate Body in US – Lamb that a focus on available recent
data pertaining to the end of an investigation period is appropriate in view of the future-oriented nature of an
analysis of threat of serious injury. See Appellate Body Report, US – Lamb, para. 137.
282 Japan's second written submission, para. 152.
283 Ibid.

evolution of the data pertaining to each factor individually, as well as in relation to other factors.284
Japan argues in particular that an examination of the intervening trend during the period of
investigation is indispensable in making a determination of serious injury or threat of serious
injury.
285
7.239. Japan also argues that Ukraine failed to demonstrate, on the basis of data from the recent
past, that a significant overall impairment was clearly imminent. In this connection, Japan
observes that neither the Notice nor the Key Find ings contain any analysis of the data for 2010 in
comparison to 2009.
286 According to Japan, an analysis of that information was particularly
important in view of the positive trend in certain of the injury factors at the end of the period of
investigation. Furthermore, Japan argues that the Notice and the Key Findings do not contain a
prospective analysis as to why the future evolution of injury factors indicates a high degree of
likelihood that serious injury is on the verge of occurring.
287 Japan notes that the Notice contains a
section on the export potential of certain export ing countries, but provides no explanation as to
why that potential would be used for exports to Ukraine, and how the domestic industry would be
affected by such future exports, as reflected in the injury factors, so as to justify the conclusion
that serious injury was clearly imminent. 288 Finally, Japan argues that Ukraine failed to base its
measure on a finding of a threat of serious injury based on data from the recent past, since it
applied the measure from 2013 on the basis of data relating to the period 2008-2010.289
7.240. Ukraine responds that its competent authorities made a proper determination of threat of
serious injury and that all relevant factors were examined, based on the facts on the record, in
making this determination. With regard to the amounts of the increase in imports, Ukraine
contends that it treated this information as confidential, based on the request of the domestic
industry, but provided an inde xed, non-confidential summary.
290 Concerning the "share of the
domestic market taken by the increased imports", Ukraine argues that Japan fails to give full
consideration to the documentation issued by Ukraine, in which it clearly analysed the market
share indicator and stated that "the share of domestic production in the domestic market of
Ukraine also decreased by 35%".
291
7.241. Ukraine further argues that its competent authorities did not exclusively rely on end-point-
to-end-point comparisons.292 Ukraine maintains that its competent authorities conducted a proper
analysis of the data trend, as evidenced by its public summary of the evolution of all injury factors,
which it provided to Japan during the course of the consultations preceding the establishment of
the Panel. 293 Ukraine considers that the deterioration of each of the factors from 2008 to 2010
shows a potential for significant injury. 294 In particular, Ukraine points out that the smallest
decrease from 2008 to 2010 was the decrease in market share of 35.45%. According to Ukraine,
certain factors in particular (including market share) provide the factual basis justifying the finding
that serious injury was 'clearly imminent'. 295 Finally, Ukraine argues that, in addition to the
worsening condition of the domestic industry, its competent authorities also analysed the export
capacity in the exporting countries.296
7.242. In response, Japan notes that the public summary referred to by Ukraine and the related
explanation in Ukraine's first written submission were not included in the Notice or the Key
Findings, and are consequently irrelevant for the Panel's assessment.
297

285 Japan's second written submission, para. 157 (referring to Panel Report, Argentina – Footwear,
para. 8.217).
286 Japan's second written submission, paras. 162 and 163.
287 Japan's second written submission, paras. 164 and 165.
288 Japan's second written submission, para. 167.
289 Japan's second written submission, para. 170.
290 Ukraine's response to Panel question No. 2.
291 Ukraine's first written submission, para. 134.
292 Ibid. para. 145.
293 Ibid. para. 135. (Exhibit UKR-3)
294 Ibid. para. 136.
295 Ibid. referring to Appellate Body Report, US – Lamb, paras. 136-138.
296 Ukraine's first written submission, para. 141.
297 Japan's second written submission, para. 154.

7.243. The Panel will start by ex amining the relevant sections of the Notice of 14 March 2013. As
mentioned above in paragraph 7.214, the competent authorities' injury analysis is contained in
two separate sections of the Notice. Section 2 analyses the existing or likely future export potential
of certain key countries exporting passenger cars to Ukraine, namely Turkey, Korea, Romania,
Germany, Japan and Russia.
298 The competent authorities started from the premise that these
countries had reduced their production during th e period of investigation and consequently had
considerable spare capacity that could be re-dir ected to export markets, including Ukraine. For
each of these exporting countries, the Notice then analyses the production and export
development from 2008 to 2010. In addition, for Turk ey and Korea, the Notice infers from their
increased share in total imports into Ukraine that the Ukrainian market was attractive to them. For
Romania, the Notice infers from the increased share of exports in its total production that
Romania's car industry was export-oriented. Fu rther details regarding the analysis of the
competent authorities are summarized in the table below.
Exporting Country299 Analysis in the Notice of Imposition of 14 March 2013
Turkey - Production dropped from 622,000 in 2008 to 603,000 cars in
2010;
- In the meantime, exports dropped from 526,000 (85% of total
production) to 440,000 cars (73% of total production);
- Share of Turkish cars in the total imports into Ukraine
increased by 17% from 2008 to 2010, showing the
attractiveness of the Ukrainian market for Turkish exporters.
Korea, Republic of - Production increased from 3,450,000 in 2008 to 3,866,000 cars
in 2010;
- In the meantime, exports increased from 2,509,000 (73% of
total production) to 2,611,000 cars (68% of total production).
- Share of Korean cars in the total imports into Ukraine increased
by 79% from 2008 to 2010, showing the attractiveness of the
Ukrainian market for Korean exporters.
Romania - Production increased from 231,000 in 2008 to 324,000 in 2010;
- In the meantime, exports increased from 154,000 cars (67% of
total production) to 290,000 cars (90% of total production).
- The increase of the share of ex ports shows the export-oriented
nature of the Romanian industry.
- The share of Romanian cars in the total imports into Ukraine
increased by 33% from 2008 to 2010.
Germany - Production increased from 5,532,000 cars in 2008 to
5,552,000 cars in 2010;
- In the meantime, exports increased from 4,132,000 cars
(75% of total production) to 4,239,000 cars (76% of total
production);
- The share of German cars in the total imports into Ukraine
increased by 197%, reaching 12%.
Japan - Production decreased from 9,916,000 cars in 2008 to
8,307,000 cars in 2010;
- In the meantime, exports decreased from 5,915,000 cars
(60% of total production) to 4,272,000 cars (51% of total
production).
- The share of Japanese cars in the total imports into Ukraine
was 15% in 2010. The numbers show that Japanese producers
are able to increase production and, possibly, use existing
capacity to export to foreign markets, including Ukraine.

298 Section 2 is headed "Research on existing or likely future export potential of countries of origin or
exporting countries, as well as the possibility that such potential will be used for exports of the Product to
Ukraine".
299 The exporting countries are listed here as they appear in the Notice of 14 March 2013.

Exporting Country299 Analysis in the Notice of Imposition of 14 March 2013
Russian Federation - Production decreased from 1,470,000 cars in 2008 to
1,210,000 cars in 2010.
- Exports to Ukraine were 17,000 cars in 2010.
- Production capacity was 1,979,600 in 2009 and is planned to
increase to 3,150,000 in 2020 according to the "Development
Strategy for the Automotive Indu stry in the Russian Federation
by 2020". Approximately 8% of the total production
(252,000 cars) is planned for export, mainly to CIS countries.

- Existing trends in the development of the Russian automotive
industry suggest that Russia's prod uction capacity will likely be
used for export of automobiles, inter alia, to Ukraine.
7.244. In Section 3 of the Notice 300, the competent authorities analysed the development of the
relevant injury factors during the period of investigation, i.e. 2008-2010. That analysis reads as
follows:
The following indicators in 2010 as compared to 2008 provide evidence of the
negative impact of imports of the Product to Ukraine on the domestic industry:
- Production volume of the domestic industry decreased by 78.9%;
- Capacity utilization decreased by 74.86%;
- Sales volumes within the domestic market decreased by 86.33%;
- Operating profit decreased by 89.9%;
- Employment decreased by 51.56%;
- Productivity numbers fell by 46.3%.
At the same time, the volume of imports of motor cars to Ukraine in absolute terms in
2010 compared to 2008 decreased by 71%, but increased by 38% in relation to
domestic production within Ukraine. The demand for the Product within Ukraine's
domestic market fell by 78.8% between 2008 and 2010, while the share of domestic
production in the domestic market of Ukraine also decreased by 35%.
In light of the increased import volume of the Product to Ukraine and conditions of
such import, the domestic industry was driven out of the domestic market within
Ukraine, resulting in a worsening of the poor state of the national industry and a
threat of serious injury to the domestic industry.
301
7.245. In considering the above analysis, it is impo rtant to note that it compares the situation of
the domestic industry in 2010 to its situation in 2008, but does not contain any data or analysis
regarding the intervening period, nor any trends.
7.246. Examining Sections 2 and 3 of the Notice together, we note that the competent authorities'
determination of a threat of serious injury in the present case rests on two findings: one regarding
the situation of the domestic industry, which had seen a deterioration in all relevant injury factors
from 2008 to 2010; and the other regarding the expo rt potential of certain exporting countries,
primarily on the basis of the development of their production and exports between 2008 and 2010.
The Notice concludes from these two findings that the worsening of the situation of the domestic
industry coupled with the export potential of certain exporting countries supports a finding of a
threat of serious injury.

300 Notice of 14 March 2013 (Exhibit JPN-2), p. 3. Section 3 is headed "Examination of trends of Product
import to Ukraine affecting the domestic industry and existence of causal link between increased imports of
Products to Ukraine and threat of serious injury to the domestic industry.
301 Notice of Imposition of 14 March 2013 (Exhibit JPN-2).

7.247. As the parties have also made reference to the Key Findings, we observe that they follow
essentially the same structure and have essentially the same content as the Notice with regard to
the injury analysis.
302
7.248. We now turn to examine whether the determ ination of a threat of injury in the Notice
meets the requirements of Article 4.2(a). 303 In US – Lamb , the Appellate Body articulated the
standard of review to be applied by panels in reviewing the competent authorities' determination
of serious injury or threat thereof under Article 4.2(a):
[A]n "objective assessment" of a claim und er Article 4.2(a) of the Agreement on
Safeguards has, in principle, two elements. First, a panel must review whether
competent authorities have evaluated all relevant factors , and, second, a panel must
review whether the authorities have provided a reasoned and adequate explanation of
how the facts support their determination. Thus, the panel's objective assessment
involves a formal aspect and a substantive aspect. The formal aspect is whether the
competent authorities have evaluated "all relevant factors". The substantive aspect is
whether the competent authorities have given a reasoned and adequate explanation
for their determination.
304
7.4.1.3.1 The share of the domestic market taken by increased imports
7.249. Among the mandatory injury factors that competent authorities must evaluate are the
share of the domestic market taken by increased imports, and the rate and amount of the increase
in imports of the product concerned in absolute and relative terms. Regarding the share of the
domestic market taken by increased imports, the Notice states only that "the share of domestic
production in the domestic market of Ukraine al so decreased by 35%". However, this does not
describe "the share of the domestic market taken by increased imports" as contemplated by
Article 4.2(a). The text requires consideration of the market share of increased imports, not the
percentage change in the domestic industry's mark et share. In any event, the fact that domestic
market share was 35% lower in 2010 than in 2008 does not necessarily mean that imports picked
up the market share that the domestic industry lost. Where, as in the present case, not all
domestic producers (or production) are part of th e domestic industry as defined by the competent
authorities
305, it is possible that the domestic industry as defined lost market share to other
domestic producers (or domestic production) not part of the domestic industry, in addition to
losing market share to imports Finally and significantly, the Notice provides no analysis or
projection as to the likely development of the import market share in the very near future.
7.250. Ukraine states that its domestic industry requested confidential treatment of "the domestic
industry's production and sales in Ukraine, as well as other [sensitive] information concerning the
domestic industry".
306 However, this statement about information relating to the domestic industry
does not suggest to us that the share of the domestic market taken by increased imports was
covered by the domestic industry's request. Ukra ine further asserts that "the specific market
shares are confidential pursuant to Article 3.2 of the Agreement [on Safeguards] and Article 12 of
the [Safeguards] Law".
307 In the absence of any explanation by Ukraine, we also fail to see how
the import market share in this case could be considered to be "by nature confidential" within the

302 Apart from the fact that in the Key Findings, the analysis of the injury factors precedes the analysis
regarding the export potential of the key exporting countries.
303 Japan's claims under Articles 2.1 and 4.2(a) and under Articles 3.1 and 4.2(c) are similar, in that
Japan argues in support of all these claims that Ukraine failed to provide a reasoned and adequate explanation
of how the facts support its determination of a threat of serious injury. Japan clarified that these claims are
linked, with the former claims focusing on the substantive aspects of the competent authorities' investigation
and the latter concerning the deficiencies of the published report. See Japan's response to Panel question
No. 102.
304 Appellate Body Report, US - Lamb, para. 103. (emphasis original; original footnote omitted)
305 The Notice of 14 March 2013 indicates that three companies were determined to constitute a proper
"domestic industry" for purposes of the investigation at issue: "Public Joint-Stock Company with Foreign
Investments 'Zaporizhia Automobile Building Plant', Private Joint-Stock Company 'Eurocar', [and] Subsidiary
Company 'Avtoskladalny Zavod [Autoassembly Plant]' No. 2 of Public Joint-Stock Company 'Bogdan Motors'
Automotive Company'". Exhibit JPN-2, p. 6. Moreover, Exhibit UKR-1 suggests, at pages 12 and 13, that those
companies do not account for the entire domestic production of passenger cars.

306 Ukraine's response to Panel question No. 2.
307 Ukraine's response to Panel question No. 133.

meaning of Article 3.2. And even if it could be co nsidered confidential in some cases, the import
market share is one of the injury factors that is identified in Article 4.2(a) and that must be
evaluated by the competent authorities, whether on the basis of confidential or public information.
That evaluation must then be published under Article 4.2(c), which may be constrained by the
need to protect confidential information, but must nonetheless be complied with. In any event, we
note that Ukraine itself submitted a private-sector publication from 2012 that contains market
share data of individual producers of passenger cars for 2010 and 2011, including for imported
brands, and even gives the production volumes in units of domestic producers.
308
7.251. Ukraine also argues that if its competent authorities had provided the absolute figures of
any "relevant factors having a bearing on the situation of [the domestic] industry", confidential
data of the domestic industry would be "vulnerable to a simple numerical analysis".
309 However, it
is not apparent to us how the disclosure of the import market share in the present dispute could
reveal the market share of the domestic industry, since the domestic market in the present dispute
comprises (i) the domestic industry as defined in the Notice of Imposition (composed of three
producers, namely ZAZ CJSC, Eurocar CJSC, and a subsidiary of Bogdan Motors
310), (ii) domestic
producers or production not forming part of the domestic industry as defined in the Notice of
Imposition
311, and (iii) imports. In such a situation, to derive the market share of the domestic
industry that requested confidential treatment of its data, one would need to know both the import
market share and the market share of the dome stic producers (or domestic production) not
forming part of the domestic industry as defined in the Notice of Imposition.
7.252. For all these reasons, we find that the competent authorities have failed to properly
evaluate, and give a reasoned explanation of, the likely development of the import market share
and its likely effect on the situation of the domestic industry in the very near future.
7.4.1.3.2 The rate and amount of the increase in imports
7.253. Regarding the rate and amount of the increase in imports, our analysis will focus on the
rate of the increase, because Ukraine provided no information on the amount of the increase,
following a request from the domestic industry to treat such information as confidential. 312
Concerning the rate of the increase in imports, we note that the only reference in the Notice to this
factor is that imports decreased by 71% in absolute terms in 2010 compared to 2008, but
increased by 38% relative to the production of the domestic industry. The Notice contains no
analysis or projections of the likely imminent future development of imports, either in absolute
terms, or relative to domestic production.
7.254. In our view, the rate and amount of an increase in imports during the period of
investigation may indicate a likelihood of increased importation into the domestic market in the
very near future. We therefore consider that the rate and amount of an increase in imports are
relevant also to an analysis of threat of serious injury.
313 Thus, in a situation where imports have
increased relative to domestic production during the period of investigation, there may be a basis
for concluding that the trend will continue in the very near future. As we have noted, however,
there is no such conclusion in the Notice. We express no opinion as to whether a conclusion that
imports were likely to continue to increase relative to domestic production (or in absolute terms)

308 Exhibit UKR-1, pp. 10 and 11.
309 Ukraine's response to Panel question No. 100.
310 Exhibit JPN-2, p. 6.
311 Exhibit UKR-1, pp. 12 and 13.
312 See para. 7.128 above.
313 Although the Agreement on Safeguards does not contain any analogous provision, it is relevant in
this context to call attention to Article 3.7 of the Anti-Dumping Agreement, which provides that:
In making a determination regarding the existence of a threat of material injury, the authorities
should consider, inter alia, such factors as:
(i) a significant rate of increase of dumped imports into the domestic market indicating the
likelihood of substantially increased importation.
We also note that Article 3.7 of the Anti-Dumping Agreement provides that:
[n]o one of these factors [including the factor identified in subparagraph (i)] by itself can
necessarily give decisive guidance but the totality of the factors considered must lead to the
conclusion that further dumped exports are imminent and that, unless protective action is taken,
material injury would occur.
Article 15.7(ii) of the SCM Agreement contains similarly worded provisions.

could have been made in the present case. Even if such a conclusion could have been drawn, it is
not sufficient for the competent authorities to have merely noted the percentage of the relative
increase without explaining what inferences were drawn from it with regard to the likely
development of imports in the imminent future. As the Appellate Body has pointed out, "[a] panel
must not be left to wonder why a safeguard measure has been applied".
314
7.255. Therefore, we find that the competent authorities have failed to properly evaluate and give
a reasoned explanation of, the likely development of imports, either in absolute terms or relative
to domestic production, and their likely effect on the situation of the domestic industry in the very
near future.
7.4.1.3.3 Capacity of key exporting countries to generate exports
7.256. The Notice discusses the capacity of key ex porting countries to generate exports. In our
view, this information is relevant to consideration of the likelihood of further increased imports in
the future, and thus is a "relevant factor" within the meaning of Article 4.2(a) that has a bearing
on the likely future situation of the domestic indust ry. Clearly, the current or imminent capacity of
exporting countries to export will affect the like lihood of substantially increased exports to the
importing Member's market, and thus is relevant to the question of threat of serious injury. As
Article 4.2(a) requires competent authorities to co nsider "all" relevant factors, it does not matter
that this is not a factor explicitly identified in Article 4.2(a).
315
7.257. Nonetheless, there is an important caveat . A demonstration that exporting countries have
or soon will have capacity to produce and/or export is not sufficient by itself to show that imports
to the Member considering whether to impose a safeguard measure are likely to continue at an
increased level or to increase further. This is because the export potential of exporting countries
will not necessarily give rise to an increase in imports to the importing Member considering
imposing a safeguard measure, since there may be other markets which together or alone can
absorb all additional exports. In our view, this is a consideration that would also be relevant in the
context of a safeguard investigation such as is at issue in this dispute.
7.258. Turning to the dispute before us, the Noti ce provides information on the development of
the production and exports of certain exporting co untries. Japan and Russia showed a decrease in
production and exports during the period of investigation, and the Notice implies that existing
spare capacity in these two countries could be re -directed to export markets, including that of
Ukraine. There is no analysis of spare or future additional export capacity of the other exporting
countries considered, i.e. Turkey, Korea, Romania and Germany.
316
7.259. The Notice refers to the attractiveness of Ukraine as an export market in addressing
Turkey's and Korea's export potential, referring to the increase of Turkey's and Korea's shares in
total imports into Ukraine as evidence of the attractiveness of the Ukrainian market to producers in
these two countries. However, changes in their share of total imports into Ukraine do not
necessarily indicate the attractiveness of Ukraine as an export market for Turkish or Korean

314 Appellate Body Report, US – Steel Safeguards, para. 298 (original emphasis).
315 In this regard, we recall Article 3.7 of the Anti-Dumping Agreement, which reflects a similar
approach, and reinforces our view concerning the relevance of this factor in the context of an analysis of a
threat of serious injury. Article 3.7 provides that:
In making a determination regarding the existence of a threat of material injury, the authorities
should consider, inter alia, such factors as:
…
(ii) sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter
indicating the likelihood of substantially increased dumped exports to the importing Member's
market, taking into account the availability of other export markets to absorb any additional
exports.
We recall that, as quoted above (footnote 299) the last clause of this provision indicates that this factor
by itself does not necessarily give decisive guidance regarding the existence of a threat of serious injury. We
also note that Article 15.7(ii) of the SCM Agreement identifies the same factor as Article 3.7(ii).
316 Exhibit JPN-2, p. 4.

producers. Their increased shares might merely reflect a redistribution of import shares among the
key exporting countries.317
7.260. In any event, even if Ukraine's market were particularly attractive to Turkey and Korea, it
does not follow that the same would be true for Japan and Russia. Yet it was those countries that
the competent authorities determined to have the capacity to increase exports, which could, of
course, be directed to any export markets, an d not only to Ukraine. However, there is no
discussion in the Notice of the availability or a ttractiveness of other export markets as compared
to the Ukrainian market. Other markets could be as attractive as Ukraine's (or more so), such that
additional exports from Japan and/or Russia might be directed to those markets.
7.261. Finally, in the overall conclusion, the Notice refers to existing or near-future export
potential of exporting countries that "may be" used for exporting passenger cars to Ukraine. 318
Thus, the Notice concluded that there was a possibility, or a potential, to export, but does not
reach a conclusion on the likelihood of a future increase in exports to Ukraine's market arising
from that export potential.
319 Thus this section of the Notice does not demonstrate, in terms of the
Appellate Body's decision in US – Lamb, that there is "a high degree of likelihood" that an increase
in exports of passenger cars to Ukraine "will materialize in the very near future".320
7.262. In sum, the Notice determines that there was capacity in certain exporting countries
(namely Japan and Russia) to export more, but fails to consider whether any increased exports
were likely to enter Ukraine's market, for instance by addressing the availability of other export
markets to absorb additional exports from these countries. With respect to other exporting
countries, the Notice does not address, at all, whether they might have the capacity to export
increased quantities to Ukraine, noting only that Ukraine's market was "attractive" to Korean and
Turkish producers – a conclusion that is open to question, as discussed above. The Notice
therefore fails to properly assess the likelihood of a future increase in exports to Ukraine's market,
and in fact reaches no conclusion in this respect.
7.263. In our view, the failure of the competent authorities to assess (i) whether the facts before
them indicated a current, and/or projected, increase in capacity to export on the part of relevant
exporting countries; and (ii) whether other expo rt markets are available that could absorb
additional exports from these countries, rather than or in addition to the Ukrainian market, leaves
unclear how the information on export capacity in exporting countries was considered in the
determination of threat of serious injury.
7.264. For all these reasons, we find that the competent authorities have failed to properly
evaluate, and give a reasoned explanation of, the in crease in the very near future in exports to
Ukraine's market, anticipated to arise from current or imminent capacity of exporting countries to
export.
7.4.1.3.4 Injury factors pertaining directly to the situation of the domestic industry
7.265. We will now consider the competent author ities' evaluation of the factors that relate
directly to the situation of the domestic industry, specifically, production volume, capacity
utilization, domestic unit sales, operating profit, employment, and labour productivity. The analysis
of these injury factors in the Notice consists of a simple end-point-to-end-point comparison of the
data for 2008 and 2010, and the implication that th e direction and extent of the change in these
factors are evidence of a negative impact of imports on the domestic industry. The Notice notably
provides no projections as to likely developments in these factors in the very near future. Thus,
the Notice fails to evaluate and give a reasoned explanation of the likely developments in these
factors and their likely effect on the situation of the domestic industry in the very near future.

317 Without any information on the amount of the increase in imports, the significance of the increased
shares is difficult to understand.
318 Exhibit JPN-2, p. 3.
319 We note that Ukraine's Safeguards Law, in Article 13.3(2), indicates that there is a conceptual
difference between "export potential" and "probability of utilization of such potential for the export … to
Ukraine".
320 Appellate Body Report, US – Lamb, para. 125.

7.266. The absence of such an evaluation assume s particular significance in view of information
that Ukraine has submitted to the Panel in the pr esent proceedings. That information shows that,
from 2009-2010 - towards the end of the period of investigation - the condition of the Ukrainian
industry was improving with regard to several of the relevant factors identified, namely production,
capacity utilization, labour productivity, and operating profit (income from operational activity), as
shown in the following table:321
Indicator 2008 2009 2010
Production, units [ ] [ ] [ ]
Change compared to 2008, % - -81.3 -78.9
Capacity utilization, % [ ] [ ] [ ]
Change compared to 2008, % - -79.30 -74.86
Domestic sales, units [ ] [ ] [ ]
Change compared to 2008, % - -83.76 -86.33
Employment [ ] [ ] [ ]
Change compared to 2008, % - -37.63 -51.56
Labour productivity, units per employed [ ] [ ] [ ]
Change compared to 2008, % - -71.1 -46.3
Income from operational activity, USD [ ] [ ] [ ]
Change compared to 2008, % - -116.2 -89.9
Market share, % [ ] [ ] [ ]
Change compared to 2008, % - -2.16 -35.45
7.267. However, there is no recognition or discu ssion of these improvements in the Notice. As we
discussed above, the more recent data from the peri od of investigation are of particular relevance
to an analysis of a threat of serious injury. In these circumstances, the competent authorities
should have provided some explanation in the published report as to why, despite positive
developments in respect of several injury factors towards the end of the period of investigation,
they concluded that it was likely that the situation of the domestic industry would deteriorate in
the imminent future to a condition of serious injury.
7.268. In this context, we find relevant the following observation by the Appellate Body in US –
Lamb:
[D]ata relating to the most recent past will provide competent authorities with an
essential, and, usually, the most reliable, basis for a determination of a threat of
serious injury. The likely state of the domestic industry in the very near future can
best be gauged from data from the most recent past. Thus, we agree with the Panel
that, in principle, within the period of investigation as a whole, evidence from the
most recent past will provide the strongest indication of the likely future state of the
domestic industry.
However, we believe that, although data from the most recent past has special
importance, competent authorities should not consider such data in isolation from the
data pertaining to the entire period of investigation. The real significance of the short-
term trends in the most recent data, evident at the end of the period of investigation,
may only emerge when those short-term trends are assessed in the light of the
longer-term trends in the data for the whole period of investigation. If the most recent
data is evaluated in isolation, the resulting picture of the domestic industry may be
quite misleading.
322
7.269. Applying this observation to the dispute at hand, we note that without any analysis of the
intervening trends in the Notice, it is not clear whether the position of the domestic industry was
improving or deteriorating towards the end of the period of investigation. As confirmed by the
Appellate Body, data from the most recent past has special importance in the context of the
future-oriented analysis that is required to establish a threat of serious injury.
7.270. For these reasons, we find that the compet ent authorities have failed to properly evaluate,
and give a reasoned explanation of, the likely deve lopments in the injury factors relating directly

321 Ukraine's first written submission, para. 135. (Exhibit UKR-3)
322 Appellate Body Report, US – Lamb, paras. 137 and 138.

to the situation of the domestic industry and the likely effect of these developments on the
situation of the domestic industry in the very near future.
7.4.1.3.5 Overall conclusion
7.271. Overall, we thus find that the competent authorities have failed to properly evaluate and
give a reasoned explanation of their conclusions regarding: the likely future development of
imports relative to domestic production; the import market share; the examined injury factors that
relate directly to the position of the domestic in dustry; and their bearing on the likely situation of
the domestic industry in the very near future . Consequently, we agree with Japan that the
competent authorities did not properly evaluate all relevant factors; did not evaluate the
intervening trends for relevant injury factors in circumstances where it was appropriate to do so;
and did not properly demonstrate a significant over all impairment in the position of the domestic
industry that was clearly imminent. We therefore conclude that Ukraine has acted inconsistently
with Article 4.2(a).
7.272. Having concluded that the competent authorities have acted inconsistently with
Article 4.2(a), we see no need to make additional findings regarding whether the competent
authorities have also acted inconsistently with Article 4.2(a) by failing to base their finding of a
threat of serious injury on data from the recent past.
7.4.2 Claims under Articles 2.1, 3.1, 4.1(a), 4.1(b), 4.2(b), 4.2(c), 11.1(a) and
Article XIX:1(a)
7.273. The Panel now turns to the remainder of the claims relating to Ukraine's determination of a
threat of serious injury. We first address, jointly, Japan's claims under Articles 2.1, 3.1, 4.1(a),
4.1(b), 4.2(b), 4.2(c) and 11.1(a), and Article XIX:1(a).
7.4.2.1 Articles 2.1, 4.1(a), 4.1(b), 4.2(b), 11.1(a) and Article XIX:1(a)
7.274. Japan also argues that Ukraine acted inconsistently with Articles 2.1, 4.1(a), 4.1(b), 4.2(b),
and 11.1(a) and Article XIX:1(a) in its determination of serious injury or threat thereof.
323
7.275. Ukraine responds that it acted in confor mity with the requirements of each of those
provisions.324
7.276. The Panel notes that it found that Ukraine has acted inconsistently with its obligations
under Article 4.2(a) because, inter alia, it has not demonstrated a significant overall impairment in
the position of the domestic industry that is clea rly imminent. In the light of this, we see no need,
for the purposes of resolving this dispute, to offer additional findings regarding whether Ukraine
has also acted inconsistently with Articles 2.1, 4.1(a), 4.1(b), 4.2(b), 11.1(a) and Article XIX:1(a)
in relation to its threat of serious injury determination. We therefore exercise judicial economy and
decline to make findings with respect to these claims.
7.4.2.2 Articles 3.1 and 4.2(c)
7.277. The Panel turns, finally, to Japan's claims under Article 3.1, last sentence, and
Article 4.2(c).
7.278. Japan claims that Ukraine acted inconsistently with Articles 3.1 and 4.2 (c) by failing to
provide a reasoned and adequate explanation as to how the facts support a determination of a
threat of serious injury in its published report.
325 Japan puts forward three arguments in support of
this claim. The first is that the published report contained only the changes in indicators by
reference to the changes in percentages between 2008 and 2010, and that no data were provided
for 2009. Japan's second argument is that data provided by Ukraine in its first written submission
regarding 2009 reveal that this data could and should have been provided in the published

323 Japan's first written submission, section 6.5; second written submission, section 3.5.
325 Japan's second written submission, para. 172.

report.326 Japan's final argument is that Ukraine faile d to provide any absolute figures even in
aggregate form.
7.279. Ukraine argues that the information stated above was treated as confidential information
under the Agreement on Safeguards and the Ukrain ian Safeguards Law, following a request from
the domestic industry. Ukraine submits that such information could not have been disclosed
without the permission from the domestic industry. 327 According to Ukraine, the non-confidential
figures regarding the domestic production of passenger cars published by the State Statistics
Service of Ukraine and the association of car manufacturers represent the aggregate data.328
7.280. In response, Japan argues that protection of confidential information cannot be a
justification not to comply with the requirements laid down in Articles 3.1 and 4.2(c).329
7.281. The Panel recalls that it found above that Ukraine has not demonstrated, through reasoned
and adequate explanations, a significant overall impairment in the position of the domestic
industry that is clearly imminent. In the light of this, we see no need, for the purposes of resolving
this dispute, to make additional findings regarding whether Ukraine also acted inconsistently with
Articles 3.1 and 4.2(c) in relation to the account it gave of the aforementioned determination in its
published report. We therefore exercise judicial economy and decline to make findings with respect
to these claims.
7.5 Claims relating to causation
7.282. The Panel now turns to Japan's claims rela ting to the competent authorities' determination
of the causal link between increased imports and the threat of serious injury to the domestic
industry. While it is true that, as the Appellate Body noted in Argentina – Footwear (EC) , "[i]t
would be difficult, indeed, to demonstrate a 'causa l link' between 'increased imports' that did not
occur and 'serious injury' that did not exist" 330, unlike the panel in that case, here, we have not
determined that there were no increased imports of passenger cars into Ukraine. Nor have we
determined that there was no threat of serious injury to the Ukrainian industry. What we have
concluded, inter alia , is that Ukraine's competent authorities failed to fully examine the facts and
provide adequate explanations in support of their determinations of increased imports and threat
of serious injury. In these circumstances, we co n s i d e r i t u s e f u l t o g o o n t o c o n s i d e r t h e
determination of causation, in the interest of effective dispute resolution, for the benefit of
eventual implementation of any DSB recommendatio ns and rulings in this case by the competent
authorities. We therefore proceed to an analysis of Japan's claims relating to causation.
7.283. Japan claims that Ukraine acted inconsistently with its obligations under Articles 2.1,
4.1(a), 4.1(b), 4.2(a), 4.2(b), 11.1(a) and Article XIX:1(a) regarding the determination of the
causal link between the increased imports and the threat of serious injury because (i) it failed to
demonstrate the existence of a causal link between the increased imports and the threat of serious
injury, in particular, by not examining the conditions of competition between the domestic and
imported products; and (ii) it failed to ensure th at injury caused, or threatened to be caused, by
factors other than the increased imports was not attributed to the increased imports. Japan also
claims that Ukraine acted inconsistently with Articl es 3.1 and 4.2(c) by failing to provide reasoned
and adequate explanations in its published report.
331
7.284. Ukraine responds that, first, there was a clear correlation between the increase in imports
and the threat of serious injury to the domestic industry producing a directly competitive product
and, second, it ensured that any injury caused by other factors was not attributed to the increased
imports. Consequently, Ukraine requests the Panel to reject Japan's claims under Articles 2.1, 3.1,
4.1(a), 4.1(b), 4.2(a), 4.2(b), 4.2(c) and 11.1(a) and Article XIX:1(a).
332

326 Ibid. para. 176.
327 Ukraine's response to Panel question No. 64.
328 Ibid.
329 Japan's second written submission, para. 178.
330 Appellate Body Report, Argentina – Footwear (EC), para. 145.
331 Japan's second written submission, para. 180.
332 Ukraine's first written submission, para. 173.

7.285. The Panel will begin its analysis by examining Japan's claims under Article 4.2(b), since it
sets forth specific obligations relating to the required determination of causation.
7.5.1 Claims under Article 4.2(b)
7.286. Article 4.2(b) provides as follows:
The determination referred to in subparagraph (a) [of Article 4] shall not be made
unless this investigation demonstrates, on the basis of objective evidence, the
existence of the causal link between incr eased imports of the product concerned and
serious injury or threat thereof. When factors other than increased imports are
causing injury to the domestic industry at the same time, such injury shall not be
attributed to increased imports.
7.287. Thus, Article 4.2(b) establishes two distin ct legal requirements that competent authorities
must fulfil before deciding to apply a safeguard measure. First, they must demonstrate the
"existence of the causal link between increase d imports of the product concerned and serious
injury or threat thereof". Second, when factors other than increased imports are causing injury to
the domestic industry at the same time, the competent authorities must not attribute injury
caused by these other factors to increased imports.
333
7.288. We will first address Japan's claim regarding the existence of a causal link and will then
consider Japan's claim regarding Ukraine's failure to conduct a proper non-attribution analysis.
7.5.1.1 Demonstration of the existence of a causal link
7.289. Japan asserts that Ukraine has failed to demonstrate the existence of "a relationship of
cause and effect such that increased imports contribute to 'bringing about', 'producing' or
'inducing' the serious injury",
334 as required by Articles 2.1, 4.2(a) and 4.2(b). Japan identifies two
main bases for its claim. First, Japan submits that there was no analysis in the published report of
the conditions of competition in the domestic market for the product in question that explains the
interaction of the imports with the domestic product and that consequently, there is an incomplete
analysis of the causal link.
335 Second, Japan argues that the required coincidence in time between
the increase in imports and the deterioration of the domestic industry's performance was
absent.336 Japan maintains that the analysis set out in the Notice of 14 March 2013 is not sufficient
to comply with the requirements of Article 4. 2(b) because the statements in the Notice of
14 March 2013 constitute mere assertions that of fer no reasoned and adequate explanation to
support a finding that the increased imports caused or threatened to cause serious injury. Since
the Notice contains no reasoned or adequate explanations as to why the competent authorities
came to the conclusion that there was a causal link between increased imports and threat of
serious injury, Ukraine failed to demonstrate the existence of such causal link.337
7.290. Japan also argues that the threat of seriou s injury must be the result of an increase in
imports, which in turn must come as a result of unforeseen developments that change the
conditions of competition between the imported and domestic products. Japan submits that since
Ukraine failed to demonstrate the existence of unforeseen developments and a change in the
competitive relationship between the domestic and imported products, it could not correctly
perform the causation analysis.
338

333 Appellate Body Report, US – Line Pipe, para. 208; Appellate Body Reports, US – Steel Safeguard,
para. 485.
334 Japan's second written submission, para. 183 (referring to Appellate Body Report, US – Wheat
Gluten, para. 67); opening statement at the second meeting of the Panel, para. 48 (referring to Appellate Body
335 Japan's opening statement at the first meeting of the Panel, para. 93; second written submission,
para. 189; and opening statement at the second meeting of the Panel, para. 49.
336 Japan's first written submission, para. 282; second written submission, paras. 190-192; and opening
statement at the second meeting of the Panel, para. 51.
337 Japan's first written submission, paras. 283-284.
338 Japan's second written submission, para. 185.

7.291. Ukraine submits that imports of passenger cars increased in 2010 by 38% relative to
Ukrainian domestic passenger car production compared to 2008, although imports decreased by
71% in absolute terms.
339 Ukraine argues that this relative increase in imports coincided in time
with the significant overall impairment of the domestic industry. According to Ukraine, WTO
jurisprudence confirms that such coincidence amounts to a prima facie demonstration of causation.
Ukraine submits that it is for Japan to demonstrate that despite this correlation in time, Ukraine's
causation analysis was in any way "wanting".
340
7.292. As regards Japan's arguments regarding the analysis of the conditions of competition,
Ukraine responds that the conditions in this case were such that there cannot be any doubt about
the direct effect in terms of sales and prices between imported and domestic products. Ukraine
submits that there exists a relationship between the depth of detail and degree of specificity
required in a causation analysis and the breadth and heterogeneity of the like or directly
competitive product definition, such that if produc t s a r e n a r r o w l y d e f i n e d , a s t h e y w e r e i n t h i s
case, not much analysis of the conditions of competition is required.
341
7.293. Japan responds to Ukraine's arguments regarding the "clear coincidence" in time between
the increase in imports and the impairment of the domestic industry by stating that such a
coincidence by itself cannot prove causation, and that its absence may be of importance because it
creates "serious doubts as to the existence of a causal link".
342 Japan submits that Ukraine ignores
the fact that although there was an increase in imports in relation to domestic production and
consumption, there was at the same time a substantial decrease in imports in absolute terms.
Japan considers that the competent authorities did not make any analysis as to the relevance of
this decrease, either in the Notice of 14 March 2013 or the Key Findings.
343
7.294. Japan argues that this failure is comp ounded by the fact that between 2008 and 2009,
imports actually decreased even in relative term s. Japan also points out that while the injury
indicators deteriorated between 2008 and 2009, mo st of them actually improved between 2009
and 2010. Therefore Japan submits that there is no clear coincidence in time between the
movements in imports and the movements in the injury factors. For Japan, this "disconnect" would
have required a compelling explanation as to why a causal link existed in a situation where imports
increased relative to domestic production duri ng 2010, when most of the injury factors were
actually improving. Japan submits that Ukraine failed to give such a "compelling explanation".344
7.295. Japan responds, finally, that neither the Notice of 14 March 2013 nor the Key Findings
contain any analysis of the conditions of competition in the domestic market for the product in
question, in which the interaction of the imports with the domestic product is explained. Japan
argues that mere ex post assertion of an existence of a causal link cannot cure the lack of a proper
analysis of the conditions of competition in the published report of the competent authorities.
345
7.296. The Panel recalls that according to the Appellate Body, what the competent authorities are
required by Article 4.2(b), first sentence, to establish is a "genuine and substantial relationship of
cause and effect". 346 The Appellate Body further clarified that a causal link implies "a relationship
of cause and effect such that increased imports contribute to 'bringing about', 'producing' or

339 Ukraine's first written submission, paras. 167-168; opening statement at the first meeting of the
Panel, para. 63; second written submission, para. 65; and opening statement at the second meeting of the
Panel, paras. 68-69.
340 Ukraine's first written submission, para. 170; opening statement at the first meeting of the Panel,
para. 65; second written submission, para. 65; and opening statement at the second meeting of the Panel,
paras. 68-69 (referring to Appellate Body Report, Argentina– Footwear (EC), para. 67).
341 Ukraine's first written submission, paras. 160, 167 (referring to Appellate Body Report, Argentina –
Footwear (EC)); opening statement at the first meeting of the Panel, para. 65; second written submission,
para. 66; and opening statement at the second meeting of the Panel, paras. 66, 71-72.
342 Japan's second written submission, para. 190 (referring to Panel Report, Argentina – Footwear (EC),
para. 8.238); and opening statement at the second meeting of the Panel, para. 50.
343 Japan's second written submission, paras. 191-192; and opening statement at the second meeting of
the Panel, paras. 50-52.
344 Japan's second written submission, paras. 191-192; and opening statement at the second meeting of
the Panel, paras. 50-52.
345 Japan's second written submission, paras. 186-189.
346 Appellate Body Report, US – Lamb, para. 179; Appellate Body Report, US – Steel Safeguards,
para. 488.

'inducing' the serious injury".347 As noted in previous panel reports, neither Article 4.2(b) nor other
provisions of the Agreement on Safeguards establ ish how the existence of the causal link should
be demonstrated.348
7.297. Nonetheless, the Appellate Body has given some guidance in this respect, stating that the
relationship between the movements in imports and the movements in injury factors is central to a
causation analysis and determination.349 Previous panels have followed this guidance in evaluating
determinations of a causal link under Article 4.2(b), considering, among other things, whether
upward trends in imports coincided with downward (i.e. worsening) trends in the injury factors,
and if not, whether an adequate explanation was provided as to why the data nevertheless show
causation. Panels have also considered whether the analysis by the competent authorities of the
conditions of competition between the imported and domestic product supported the authorities'
conclusion regarding the existence of a causal link between the increased imports and injury to the
domestic industry.
350
7.298. Regarding the coincidence in movements, we agree with the panel in US – Steel
Safeguards that upward movements in imports should normally occur at the same time as
downward movements in injury factors in order for coincidence to be indicative of a causal link. 351
However, this coincidence, by itself and without explanation, is not sufficient to establish a causal
link between increased imports and serious injury or threat thereof.352 A worsening in the condition
of a domestic industry may be wholly unconne cted to increased imports and may instead be
caused by one or more other developments, occurring at the same time as increased imports, such
as declining consumption, inefficient production methodologies, increased costs, etc. Indeed,
Article 4.2(b), second sentence, confirms that factors other than increased imports may be causing
injury at the same time as increased imports. By requiring that injury caused by such factors not
be attributed to increased imports, this provis ion seeks to ensure that safeguard measures are
only applied in appropriate circumstances, that is, when increased imports are causing or
threatening to cause serious injury. We therefore reject Ukraine's view that a coincidence between
increased imports and the worsening in the injury factors is sufficient in itself to raise a
presumption that a causal link exists between th ese two developments. For completeness, we also
note that the absence of coincidence does not necessarily rule out the existence of a causal link.
353
In a finding upheld by the Appellate Body, the panel in Argentina – Footwear (EC) stated:
While such a coincidence by itself cannot prove causation (because, inter alia, Article 3
requires an explanation – i.e., "findings and reasoned conclusions"), its absence would
create serious doubts as to the existence of a causal link, and would require a very
compelling analysis of why causation still is present.354
7.299. Regarding the conditions of competition, we recall that we stated earlier in section 7.3.1.4
that the conditions under which increased imports occurred is an element to be considered as part
of the causation analysis. We also note that the panels in Argentina – Footwear (EC) and in US –
Wheat Gluten assessed the competent authorities' consideration of the conditions of competition
when assessing their determinations of the existence of a causal link
355 within the meaning of

347 Appellate Body Report, US – Wheat Gluten, para. 67. Appellate Body Report, US – Line Pipe,
para. 209.
348 Panel Reports, US – Steel Safeguards, paras. 10.294 and 10.296. Panel Report, Korea – Dairy,
para. 7.96.
349 Appellate Body Report, Argentina – Footwear (EC), para. 144.
350 See Panel Report, Argentina – Footwear (EC), para. 8.229; Appellate Body Report on Argentina –
Footwear (EC), para.145; Panel Report, US – Wheat Gluten, para. 8.91; Panel Report, US – Lamb,
para. 7.232; Panel Reports, US – Steel Safeguard, paras. 10.313-10.321.
351 Panel Reports, US – Steel Safeguards, para. 10.299.
352 Downward movements in injury factors may coincide with upward movements in imports, but the
downward movements may be caused by other factors.
353 An example where the absence of coincidence would not rule out causation would be a case where
there is a time lag between the increase in imports and the movement of injury factors due to the structure of
the market, the industry or the particularities of the case at hand. See Panel Reports, US – Steel Safeguards,
paras. 10.299, 10.309-10.312.
354 Panel Report, Argentina – Footwear (EC), para. 8.238 (Original emphasis); Appellate Body Report,
Argentina – Footwear (EC), para. 144.
355 Panel Report, Argentina – Footwear (EC), para. 8.250; Panel Report, US – Wheat Gluten,
para. 8.108.

Article 4.2(b). In this regard, we recall that the Appellate Body in the first case expressly approved
the panel's conclusion that the determination was not consistent with the requirements of
Article 4.2(b), in part because the conditions of competition had not been adequately analysed by
the competent authorities in that case.
356
7.300. Turning to the facts of this dispute, th e Notice of 14 March 2013 addresses the issue of
whether a causal link existed between increased imports and the threat of serious injury as
follows:
The following indicators in 2010 as compared to 2008 provide evidence of the
negative impact of imports of the Product to Ukraine on the domestic industry:
- Production volume of the domestic industry decreased by 78.9%;
- Capacity utilization decreased by 74.86%;
- Sales volumes within the domestic market decreased by 86.33%;
- Operating profit decreased by 89.9%;
- Employment decreased by 51.56%;
- Productivity numbers fell by 46.3%.

At the same time, the volume of imports of motor cars to Ukraine in absolute terms in
2010 compared to 2008 decreased by 71%, but increased by 38% in relation to
domestic production within Ukraine.
The demand for the Product within Ukraine' s domestic market fell by 78.8% between
2008 and 2010, while the share of domestic production in the domestic market of
Ukraine also decreased by 35%. In light of the increased import volume of the Product
to Ukraine and conditions of such import, th e domestic industry was driven out of the
domestic market within Ukraine, resulting in a worsening of the poor state of the
national industry and a threat of serious injury to the domestic industry.
357
7.301. This assessment of the causal link is divi ded into three parts. The first part states that
some indicators of the situation of the industry decreased in 2010 compared to 2008. The second
part states, inter alia, that the volume of imports of passenger cars increased in 2010 relative to
domestic production compared to 2008, despite an absolute decrease in imports. The third part
concludes from the previous two parts that the do mestic industry was driven out of the domestic
market in Ukraine and that this resulted in a worsening of its poor state and a threat of serious
injury. Thus, in the first two parts, the Notice of 14 March 2013 points to a coincidence ("at the
same time") between increased imports and the poor state of the domestic industry that is based
on an end-point-to-end-point comparison, comparing data for 2010 to data for 2008. In the third
part, the Notice of 14 March 2013 goes on to conclude from this coincidence that there is a causal
link ("resulting in") between increased imports an d a threat of serious injury to the domestic
industry.
7.302. In considering the explanation provided in the Notice of 14 March 2013, we recall as an
initial matter that coincidence between two developments does not necessarily imply a causal link
between the two. As mentioned above, although a coincidence between upward movements in
imports and downward movements in injury factor s might support a finding of the existence of a
causal link between increased imports and a threat of serious injury, it is not sufficient by itself
and without explanation to make such a finding. Moreover, we note in this regard that evidence
submitted to us by Ukraine shows that between 2008 and 2009, imports decreased in absolute
and relative terms and injury factors showed a deterioration, while between 2009 and 2010,
imports increased in relative terms as compared to 2008, but some injury factors actually
improved, as compared to 2008.
358 We are not concluding from these trends that no coincidence in
movements of imports and injury factors existed in this case. However, in view of the fact that

356 The Appellate Body stated that "we agree with the Panel's conclusions that 'the conditions of
competition between the imports and the domestic product were not analysed or adequately explained (in
particular price)'". Appellate Body Report, Argentina – Footwear (EC), para. 145.
357 Exhibit JPN-2, p. 8. (emphasis added)
358 The following factors showed improvement in 2010, as compared to 2008: production units, capacity
utilization, labour productivity and income from operational activities. Exhibit UKR-3.

injury factors worsened when there was a relative decrease in imports and began to improve even
as there was a relative increase in imports, the Notice of 14 March 2013 should have addressed
these movements, which seem counter to findings of coincidence and causation, and given
reasoned and adequate explanations as to why a causal link nevertheless existed.
7.303. The only explanation we find in the Notice of 14 March 2013 is the statement that the
relative increase in imports drove the domestic industry out of the Ukrainian market. However, the
Notice of 14 March 2013 provides no further elabor ation as to how this happened. We note that
the Key Findings also state that the domestic indu stry was driven out of the domestic market by
increased imports. The Key Findings further state as follows:
The rate of decrease of domestic prod uction and sale exceeded the rate of
decrease of import of the Product subject to investigation to Ukraine in terms of
absolute values. As a result of the disproportionate reduction in the import of
investigated Products to Ukraine and the domestic manufacturers' sale of the
Products on the internal market, the structure of domestic market share was
changed in favour of the imported prod ucts, which affected the position and
development of the domestic car industry.
359
7.304. While this paragraph states that the domestic industry lost market share to imports
because domestic production decreased more significantly than imports, which also decreased, it
contains no explanation as to how the lesser decrease in imports contributed to bringing about a
threat of serious injury. In particular, it fails to explain how imports could take market share from
the domestic industry in a contracting market. The domestic industry could have been losing
market share for reasons unrelated to the relative increase in imports. Thus, the Key Findings shed
no additional light on the content of the Notice of 14 March 2013. We therefore maintain our view
that the Notice of 14 March 2013 fails to adequately explain the determination in this regard.
7.305. We observe, finally, that the relevant se ction of the Notice of 14 March 2013 contains no
forward-looking analysis of the existence of a causal link.
360 We recall that the Notice of
14 March 2013 finds that the domestic industry fa ced a threat of serious injury. Article 4.1(b)
defines "threat of serious injury" as serious injury that is "clearly imminent". We have stated
earlier that the term "clearly imminent" indicates that the competent authorities not only have to
perform an assessment of historical facts, but mu st also make fact-based projections concerning
future developments affecting the domestic industry's position.
361 In our view, this reasoning must
logically also extend to the analysis of the causal link in threat of serious injury cases. We thus
consider that in such cases the competent author ities must likewise make fact-based projections
with a view to ascertaining whether there is a high degree of likelihood that a causal link will exist
in the very near future, when serious injury is expected to materialize. 362 Indeed, it is at least
conceivable that a current causal link established based on the data for the period of investigation
will no longer exist in the very near future. We consider that the competent authorities should
have considered this scenario and explained in the Notice of 14 March 2013 whether there was a
high degree of likelihood that a causal link would still exist in the very near future.
7.306. We thus conclude that the competent authorities did not undertake a proper analysis of
the relationship between movements in imports and movements in injury factors. Having reached
this conclusion, we see no need to go on to ex amine whether in the circumstances of the present
dispute the competent authorities were also required to and, if so, did examine the conditions of
competition between the imported and domestic pr oduct in order to meet the requirements of
Article 4.2(b), first sentence. We, accordingly, do not address this issue further.

359 Exhibit JPN-6 (Revised Version), p. 18.
360 We note that in the section on increased imports, the Notice of 14 March 2013 mentions, without
further analysis, that in the first half of 2011, compared to 2010, imports increased by 28% relative to
domestic production (Exhibit JPN-6 (Revised Version), p. 2).
361 See para. 7.232 above.
362 We recall that in US – Lamb, the Appellate Body indicated that for there to be a threat of serious
injury there must be "a high degree of likelihood that the anticipated serious injury will materialize in the very
near future". Appellate Body Report, US – Lamb, para. 125.

7.307. In the light of the foregoing, we fi nd that the competent authorities have not
demonstrated, through reasoned and adequate expl anations, how the developments identified in
the Notice of 14 March 2013 support their determin ation that a relative increase in imports
contributed to bringing about a threat of serious injury. We thus conclude that Ukraine has acted
inconsistently with its obligations under Article 4.2(b), first sentence.
7.5.1.2 Non-attribution analysis
7.308. According to Japan, it is an "uncontested fact" that the competent authorities
acknowledged that other factors were having injuri ous effects on the domestic industry, since the
Key Findings expressly stated that "special attention was given to the influence of other factors".
Japan considers that having identified that other factors were causing injury to the domestic
industry, the competent authorities were required to carry out a proper non-attribution analysis. In
Japan's view, Ukraine failed to do so.
363
7.309. Japan claims that while the competent authorities noted in the Notice of 14 March 2013
that some interested parties had claimed that the negative situation of the domestic industry "was
due to, among other things, other factors", Ukraine failed to identify those "other factors", and a
fortiori failed to identify and examine the nature and extent of the injurious effects of these other
factors. Japan argues that the competent authorities merely stated that serious injury to the
domestic industry had not been caused by other factors, without providing an analysis of what
those other factors are and what their effects we re. In Japan's view, this demonstrates that
Ukraine failed to carry out a non-attribution analysis as required by Article 4.2(b).364
7.310. Japan notes that only the Key Findings identify four other factors which had a bearing on
the domestic industry at the same time as the increased imports: (i) the global financial and
economic crisis, (ii) the non-competitiveness of the domestic products, (iii) the 13% percent
additional duty rate, and (iv) the end of the government support that was granted to the
automobile industry between 1997 and 2008. Ja pan argues that the Notice of 14 March 2013,
which is the relevant document for purposes of the Panel's examination, is silent on this issue
since it does not contain any analysis of these "other factors". Japan therefore considers that
Ukraine has failed to ensure non-attribution.
365
7.311. Ukraine submits that the Key Findings gave special attention to the influence of the four
other factors referred to by Japan. Regarding th e global financial and economic crisis, Ukraine
argues that although it influenced the position of the domestic manufacturers of passenger cars,
the competent authorities found that no company was immune from the effects of the global crisis,
including producers of passenger cars in foreign markets. In Ukraine's view, the global financial
and economic crisis could not, therefore, have caused the worsening of the domestic producers'
position, while at the same time allowing for an increase in imports of passenger cars relative to
domestic production. Ukraine infers from this that the global crisis was not a factor that could
break the causal link between increased imports and the threat of serious injury.
366
7.312. Ukraine states that the government support that the Ukrainian car industry enjoyed was
granted from 1997 to 2008. Ukraine explains th at, since the government support ended on
1 January 2008, no analysis of its effects was conducted because it was not appropriate to
consider the trends in the passenger car indust ry during the ten-year period preceding the
investigation period, 2008 to 2010.
367
7.313. As concerns the lack of competitiveness of the domestic products, Ukraine notes that, as
stated in the Key Findings, this factor could cause a deterioration in the situation of the domestic

363 Japan's first written submission, para. 291; and second written submission, para. 198.
364 Japan's first written submission, paras. 291-292; and second written submission, para. 200.
365 Japan's second written submission, paras. 199-201.
366 Ukraine's first written submission, para. 164; opening statement at the first meeting of the Panel,
para. 66; second written submission, para. 67; and opening statement at the second meeting of the Panel,
para. 74.
367 Ukraine's first written submission, para. 165; opening statement at the first meeting of the Panel,
para. 67; second written submission, para. 68; and opening statement at the second meeting of the Panel,
para. 75.

industry, but could not explain the coinciding incr ease in imports. Ukraine further argues that a
deterioration in the situation of the domestic industry could be attributed to the sudden lack of
competitiveness caused by the abolition of government support, if the investigation period had
included the year 2007. But, in Ukraine's view, the claim that it could influence the domestic
industry negatively 3 years later is "presumptuous".
368
7.314. Ukraine submits, finally, that the a dditional 13% surcharge imposed on imports of
passenger cars could have influenced the extent of injury caused to the domestic industry only in a
limited way, as it was in force for only a short period, from March until September 2009. According
to Ukraine, the trends in 2008 and 2010 could no t therefore be attributed to the temporary
surcharge.369
7.315. Japan responds that the Key Findings contain no assessment of the injurious effects of
these other factors, and that such an analysis ha s been provided only in Ukraine's submissions to
the Panel. Japan submits that such "ex post justifications" are irrelevant for the Panel's analysis.370
7.316. The Panel starts by recalling that, to satisfy the requirements of Article 4.2(b) the
competent authorities must separate and distinguish the injurious effects of the increased imports
from the injurious effects of other factors causing injury to the domestic industry at the same
time.
371 According to the Appellate Body, this notabl y means that the competent authorities must
"identify" the nature and extent of the injurious effects of the known factors other than increased
imports, as well as "explain" satisfactorily the nature and extent of the injurious effects of those
other factors as distinguished from the injurious effects of increased imports.
372
7.317. Regarding the required explanation, the Appellate Body has stated that the competent
authorities must establish explicitly, through a reasoned and adequate explanation, that injury
caused by factors other than increased imports is not attributed to increased imports. Such
"explanation must be clear and unambiguous. It must not merely imply or suggest an explanation.
It must be a straightforward explanation in express terms".
373
7.318. As recognized by the Appellate Body in US – Lamb, the "method and approach" Members
choose to carry out the process of separating the effects of increased imports and the effects of
other causal factors is not established in the Agreement on Safeguards. However, Members are
required to explain the particular method and proc ess they have used to separate and distinguish
other causal factors, and how they have ensured that injurious effects arising from other causal
factors were not included in the assessment of the injury ascribed to increased imports.
374
7.319. Regardless of the method used by the competent authorities when performing a non-
attribution analysis, cases involving a threat of serious injury to the domestic industry should, in
our view, include a forward-looking assessment of whether other factors currently causing injury
to the domestic industry will continue to do so in the very near future.
7.320. Turning now to the facts of the present disp ute, we note that the published report, i.e. the
Notice of 14 March 2013, provides the following statement regarding other causal factors:
Within the framework of the present investigation some interested parties claimed
that a significant deterioration of the production, trade and financial situation of the
domestic industry was due to, among other things, other factors , and serious injury
caused by these other factors should not be attributed to losses due to increased
imports.

368 Ukraine's opening statement at the second meeting of the Panel, para. 75.
369 Ukraine's opening statement at the second meeting of the Panel, para. 76.
370 Japan's second written submission, paras. 206, 208-219; and opening statement at the second
meeting of the Panel, paras. 55-58.
371 Appellate Body Report, US – Wheat Gluten, para. 68.
372 Appellate Body Report, US – Line Pipe, para. 215.
373 Ibid. para. 217.
374 Appellate Body Report, US – Lamb, paras. 181, 184-185.

According to the findings of the investigation carried out by the Ministry, the increase
of motor cars imports into Ukraine regardless of country of origin and export, relative
to domestic production and demand, was occurring under such conditions and
volumes that the imports threatened to cause serious injury to the domestic industry,
which were not caused by other factors. (emphasis added)
7.321. We note that the Notice of 14 March 2013 refers to, but does not identify, causal factors
other than increased imports that were causing injury to the domestic industry at the same time.
7.322. In addition to a reference to the views presented by interested parties on the subject,
there is only one other statement in the relevant section of the Notice of 14 March 2013 that refers
to "other factors". The Notice of 14 March 2013 states that "the increase of motor cars imports
into Ukraine regardless of country of origin and export, relative to domestic production and
demand, was occurring under such conditions and volumes that the imports threatened to cause
serious injury to the domestic industry, which were not caused by other factors."
375
7.323. This sentence is somewhat opaque. In the light of its structure and the use of the plural
"were", it could be understood to suggest that the increased imports were not caused by other
factors. At the same time, the clause referring to other factors immediately follows a reference to
the threat of serious injury, which could suggest that threat of serious injury is not caused by the
other factors referred to. Contextually, the st atement appears intended to respond to the
arguments of certain interested parties that other factors were causing injury. These two different
possible understandings to us suggest that the plural "were" may reflect a typographical or
translation error and should be read as "was", and the sentence should be understood as a
statement that the threat of serious injury was not caused by other factors. It strikes us as
implausible that the competent authorities, in the statement at issue, were referring to a
determination of the causes of the increased impo rts rather than the causes of the threat of
serious injury, which is the subject of this port ion of the Notice of 14 March 2013. However, this
still leaves open the question whether the compet ent authorities determined (i) that other factors
were not threatening serious injury to the domestic industry at the same time as increased imports
or (ii) that other factors were threatening serious injury at the same time, but that some of the
threat of serious injury was caused by increased imports alone. Ukraine's notification to the WTO
of its decision to apply a safeguard measure seven days after publishing the Notice of
14 March 2013 does not shed any useful light on this issue.
376
7.324. As regards the alternative interpretations, given the lack of clarity of the Notice of
14 March 2013, we find it appropriate to look to the record of the investigation, and specifically the
Key Findings, in order to see whether they assist in elucidating the relevant statement in the
Notice of 14 March 2013.
7.325. The Key Findings address the issue of other factors causing injury as follows:
Special attention was also given to the influence of other factors ; the injury caused by
these factors cannot be considered as injury caused as a result of the increase in and
the conditions of the import . In particular, the negative impact of the global financial
and economic crisis resulted in decreased consumption, non-competitiveness of the
domestic products, and the 13-percent additional duty rate that was valid in 2009.
The Ministry also considered the position of interested parties that the Ukrainian car
industry had enjoyed specific government support between 1997 and 2008 in the form
of Ukrainian car manufacturers' exemption from paying import duties, VAT and land
tax, and enjoyed a preferential rate on income taxes, under the Ukrainian Car
Manufacturer Stimulation Law. At the same time, WTO accession of Ukraine and its

375 Exhibit JPN-2, p. 8. (Emphasis added)
376 The relevant passage states as follows:
[T]he investigation conducted by the Ministry of Economic Development and Trade has proved
that exactly the increase of imports of motor cars (regardless of country of origin and export)
relative to production of domestic industry and domestic consumption has occurred under such
conditions and in volumes that threaten causing serious injury to domestic industry but has not
been caused by effect of other factors (Exhibit JPN-7, p. 3; emphasis added).

commitments to reduce the import duty from 25% to 10% as well as the abolition of
government support could have negatively impacted the domestic car industry's
financial condition, rather than this being a consequence of growing import of cars to
Ukraine. However, 2008 was the beginning of the period of the safeguard
investigation, and therefore it was not considered as appropriate to consider the
trends in the car industry in the preceding ten-year period.
The results of the global crisis are objective causes of their influence on the position of
any companies, including the manufacturers of the Product concerned.
As for the 13-percent additional duty rate that was valid in 2009, it is worth noting
that the said rate was valid in 2009 and di d not rule out the im port of the Product
subject to investigation to Ukraine. In addition, the 13-percent additional duty rate did
not apply to the import of the Product to Ukraine if they originated from countries that
were parties to free trade agreements.
Given the foregoing and results of analysis of information obtained in the course of
the safeguard investigation, the Ministry concludes that there is sufficient evidence
and grounds for having the Commission to review the proposals concerning
application of safeguard measures regarding the import of motor cars to Ukraine
regardless of the country of origin and export, for a three-year period.
377
7.326. Thus, the Key Findings identify three factors that might be causing or explaining the
observed worsening in the position of the domestic industry: (i) the global financial and economic
crisis with its negative impact on domestic consumption; (ii) the non-competitiveness of the
domestic products, which appears to be consider ed a possible result of, on the one hand, the
lifting of government support that the Ukrainian ca r industry received from 1997 to 2008, and, on
the other hand, the commitment undertaken by Ukraine to reduce import duties from 25% to 10%
upon accession to the WTO in May 2008; and (iii) the removal of the 13% additional duty, that
was in effect for six months beginning 7 March 2009.
378
7.327. In relation to these three factors, the Key Findings state that "the injury caused by these
factors cannot be considered as injury caused as a result of the increase in and the conditions of
the import".379 It is unclear to us whether this summarizes a conclusion reached by the competent
authorities or merely recalls the legal standard to be followed when establishing the causal link.
The Key Findings also do not explicitly state whether the three factors were causing or threatening
to cause serious injury at the same time as the increased imports.
7.328. Regarding non-competitiveness of the domestic product, the Key Findings indicate that
the reduction in the tariff rate following Ukraine's WTO accession and the lifting of government
support
380 "could" have negatively affected the domestic industry's financial condition, but then
note that the government support ended before the start of the investigation period and was
therefore not taken into account. Thus, non-competitiveness resulting from the lifting of
government support was not treated as a factor that was causing injury at the same time as
increased imports. The Key Findings do not state whether the reduction in the tariff rate following
Ukraine's WTO accession was considered in the investigation, or whether it had an impact on the
domestic industry. Regarding the 13% additional duty, the Key Findings merely state that it was in
effect in 2009 and note that it did not stop imports and also did not apply to imports from
countries with whom Ukraine had free trade agreements. This may imply that the removal of the
temporary duty would have had some impact on the domestic industry, but the Key Findings
suggest that any such impact should not be overestimated.
381

377 Exhibit JPN-6 (Revised Version), p. 18. (emphasis added)
378 Exhibit JPN-28. Ukraine's responses to Panel question Nos. 18 and 60. Japan's responses to Panel
question Nos. 18 and 60.
379 Exhibit JPN-6 (Revised Version), p. 18.
380 The government support ended on 31 of December 2007, as clarified by Ukraine in its response to
Panel question No. 19.
381 The Key Findings also state that prices of the imported product subject to the investigation were
lower than the prices of the domestic product of one of the enterprise that represented the domestic industry.

7.329. Finally, as concerns the global crisis, the Key Findings are less than clear. The relevant
sentence reads: "The results of the global crisis are objective causes of their influence on the
position of any companies, including the manufacturers of the Product concerned".
382 According to
Ukraine, this means that no company was immune from the effects of the global financial crisis
and that the global financial and economic crisis could not have caused the worsening of the
position of domestic producers of passenger cars, while at the same time allowing an increase in
imports of passenger cars relative to domestic production.
383 Subsequently, Ukraine also observed
that the decrease in consumption due to the global financial crisis "counts as 'other factor'". 384 We
consider that the point made in the Key Findings can be reasonably understood as meaning that
the global crisis had an impact on all sectors of the economy, including the manufacturers of
passenger cars. Hence, the Key Findings appear to acknowledge that the global crisis had some
negative impact on the domestic industry, though they do not use the term "injury".
7.330. Based on the above, it appears to us th at the Key Findings support the view that the
competent authorities agreed that there were at least two other factors – the global financial and
economic crisis and the 13% additional duty – that had a negative impact on the domestic industry
at the same time as increased imports. But the Key Findings are not explicit in this respect. What
seems reasonably clear, though, from the Key Find ings is that the competent authorities were of
the view that increased imports were an independen t cause of a threat of serious injury, and that
there was an imminent negative impact on the position of the domestic industry that could be
attributed only to increased imports.
7.331. Having reviewed the Key Findings, we are of the view that it is reasonable to understand
the Notice of 14 March 2013 as making a determination that increased imports were causing the
threat of serious injury, along with other factors. On that basis, we therefore find that:
a. the Notice of 14 March 2013 fails to identify any other factors causing injury at the same
time, even though (i) the Notice itself points out that such factors had been raised for
discussion by the registered interested parties and (ii) the Key Findings specifically
identify such factors;
b. the Notice of 14 March 2013 does not identify the nature and extent of the injurious
effects of any factors other than increased imports;
c. the Notice of 14 March 2013 does not explai n the nature and extent of the injurious
effects of those other factors as distinguished from the injurious effects of increased
imports; and
d. the Notice of 14 March 2013 does not explain the particular method and process that
was used by the competent authorities to separate and distinguish other causal factors.
7.332. It is clear, as discussed at paragraphs 7.316 to 7.319above, that the competent authorities
should have identified and explained in the published report, in clear and unambiguous terms, the
nature and extent of the injurious effects of those other factors as distinguished from injurious
effects of increased imports, as well as the particular method used to separate and distinguish
other causal factors. As the Notice of 14 March 2013 does not meet any of these requirements, we
conclude that Ukraine has acted inconsistently with its obligations under the second sentence of
Article 4.2(b).
7.333. Since the Key Findings address other factors in more detail than the Notice of
14 March 2013, we emphasize that our conclusion on this claim does not depend on an analysis of

Exhibit JPN-6 (Revised Version), p. 14. To us, this would appear to suggest that in relation to the products of
the other two enterprises that were identified in the Key Findings as making up the domestic industry,
imported products were more expensive. If so, this would imply that part of the domestic industry was losing
market share to higher-priced products, thus possibly indicating problems with the competitiveness of the
domestic product in the domestic market. At a minimum, this possibility should have been analysed in the
Notice of 14 March 2013.
382 Exhibit JPN-6(Revised Version), p. 18.
383 Ukraine's first written submission, para. 164.
384 Ukraine's response to Panel question No. 18.

the Key Findings. We referred to the Key Findings in order to better understand the Notice of
14 March 2013, which is the relevant document, and which we have found to be deficient. In any
event, while the Key Findings identify other fact ors, they do not address the "extent" of the
injurious effects of those other factors as distinguished from the injurious effects of increased
imports, and also do not describe the method us ed to separate and distinguish other causal
factors.
7.334. We further observe that pursuant to Article 4.2(b), second sentence, the competent
authorities need to conduct a non-attribution analysis "when" factors other than increased imports
are causing injury to the domestic industry at the same time. Thus if the competent authorities
determine that other factors are not causing injury at the same as increased imports, there is no
need to conduct a non-attribution analysis. As we have stated above, it is not entirely clear, even
after considering the Key Findings, whether the co mpetent authorities found that there were other
factors causing injury at the same time as increased imports, although in our view, that is the
most reasonable interpretation of the Notice of 14 March 2013. But even assuming that our
understanding of the Notice of 14 March 2013 was incorrect, this would not detract from our
ultimate conclusion that Ukraine has acted inconsistently with the second sentence of
Article 4.2(b). When the competent authorities de termine that there are no other factors causing
injury at the same time as increased imports, or that factors argued to be causing injury are not,
in fact, doing so, this, too, must be stated expl icitly in the published report, accompanied by a
clear, explicit, and adequate explanation.
385 Otherwise, it would be impossible to determine
whether the imposing Member has properly considered whether factors other than imports are
causing injury to the domestic industry, and if so, whether that Member has ensured that such
injury is not attributed to the increased imports.
7.5.2 Claims under Articles 2.1, 3.1, 4.1(a), 4.1(b), 4.2(a), 4.2(c), 11.1(a), and
Article XIX:1(a)
7.335. The Panel now turns to address the remainder of Japan's claims relating to Ukraine's
determination of the causal link.
7.5.2.1 Claims under Articles 2.1, 4.1(a), 4.1(b), 4.2(a), 11.1(a) and Article XIX:1(a)
7.336. The Panel first addresses, jointly, Japan's claims under Articles 2.1, 4.1(a), 4.1(b), 4.2(a),
11.1(a) and Article XIX:1(a).
7.337. Japan claims that as a consequence of the competent authorities' failure (i) to determine
the existence of the causal link between increased imports of the product concerned and the threat
of serious injury and (ii) to carry out a proper non-attribution analysis, Ukraine has also acted
inconsistently with Articles 2.1, 4.1(a), 4.1(b), 4.2(a), 11.1(a) and Article XIX:1(a).
386
7.338. Regarding the analysis of the conditions of competition in the domestic market, Japan
argues that as part of a causation analysis, the competent authorities must also carry out an
assessment of the conditions of competition between imported products and like or directly
competitive domestic products. Japan submits that among other elements, the evaluation of the
prices is an important factor as far as conditions of competitions are concerned. Japan claims there
was no such analysis and therefore there is an incomplete analysis of the causal link.
387
7.339. Ukraine responds to Japan's claim mainly with the same arguments already outlined in
sections 7.5.1.1 above. Regarding the analysis of the conditions of competition, Ukraine argues

385 See para. 7.315 above.
386 Japan's first written submission, paras. 288, 292-293; second written submission, para. 226; and
response to Panel question No. 105.
387 Japan's first written submission, paras. 286; opening statement at the first meeting of the Panel,
para. 93; second written submission, paras. 186-189; and opening statement at the second meeting of the
Panel, para. 49.

that the conditions in this case were such that there cannot be any doubt about the direct effect in
terms of sales and prices between the two types of products.388
7.340. The Panel notes that it found that Ukraine has acted inconsistently with its obligations
under Article 4.2(b) since it has failed to demonstrate the existence of the causal link between
increased imports and the injury or threat thereof suffered by the domestic industry and to
conduct a proper non-attribution analysis. In the li ght of this, we see no need, for the purposes of
resolving this dispute, to make additional findings regarding whether Ukraine has also acted
inconsistently with Articles 2.1, 4.1(a), 4.1(b) , 4.2(a), 11.1(a) and Article XIX:1(a), including
regarding whether the competent authorities have properly analysed as part of their causation
analysis whether imported products were being imports "under such conditions" as to cause or
threaten to cause serious injury, in relation to the account it gave of the aforementioned
determination in its published report. We therefor e exercise judicial economy and decline to make
findings with respect to these claims.
7.5.2.2 Claims under Articles 3.1 and 4.2(c)
7.341. The Panel turns, finally, to Japan's claims under Articles 3.1, last sentence, and
Article 4.2(c).
7.342. Japan asserts that since the Notice of 14 March 2013, i.e. the published report, does not
contain reasoned and adequate explanations regard ing the existence of a causal link between the
increased imports and the alleged serious injury or threat of serious injury, nor includes a proper
non-attribution analysis, and therefore Ukraine acted inconsistently with Articles 3.1 and 4.2(c).
389
7.343. Ukraine does not specifically address Japan's claims under Articles 3.1 and 4.2(c) in the
context of causation.
7.344. The Panel recalls that it found above that Ukraine has not demonstrated, through reasoned
and adequate explanations, the existence of a causal link between increased imports and the
threat of serious injury and has also not conducted a proper non-attribution analysis. In the light
of this, we see no need, for the purposes of resolving this dispute, to make additional findings
regarding whether Ukraine has also acted inconsistently with Articles 3.1 and 4.2(c) in relation to
the account it gave of the aforementioned dete rmination in its published report. We therefore
exercise judicial economy and decline to make findings with respect to these claims.
7.6 Claims relating to the application, duration, and liberalization of the safeguard
measure at issue
7.345. The Panel now turns to Japan's claims under Articles 3.1, 4.2(c), 5.1, 7.1, 7.4, and 11.1(a)
and Article XIX:1(a) relating to the application, duration, and liberalization of the safeguard
measure at issue.
7.346. Japan claims that Ukraine has acted inconsistently with Articles 3.1, 4.2(c), 5.1, 7.1, 7.4,
and 11.1(a) and Article XIX:1(a) because Ukraine failed to (i) apply the safeguard measure "only
to the extent necessary to prevent or remedy serious injury"; (ii) apply the safeguard measure
"only to the extent necessary to facilitate adjustment"; (iii) progressively liberalize the safeguard
measure; and (iv) provide reasoned and adequate explanations and conclusions in its published
report.
390
7.347. Ukraine submits that Japan's claim that it has acted inconsistently with Articles 3.1, 4.2(c),
5.1, 7.1, 7.4, and 11.1(a) and Article XIX:1(a) in relation to its imposition of the measure to the
extent necessary to prevent or remedy serious injury and to facilitate adjustment is without merit.
Ukraine contends that it has acted in accordance with Articles 5.1, 7.1, 7.4 and 11.1(a) and
Article XIX:1(a) by (i) applying the safeguard measure only to the extent necessary to prevent the

388 Ukraine's first written submission, paras. 160 and 167; opening statement at the first meeting of the
Panel, para. 65; second written submission, para. 66; and opening statement at the second meeting of the
Panel, paras. 66, 71-72.
389 Japan's first written submission, para. 294; and second written submission, para. 224.
390 Japan's first written submission, paras. 297 and 312; and second written submission, para. 227.

threat of serious injury since the duty level and the length of the application were appropriate; (ii)
applying the safeguard measure to facilitate adjustment; and (iii) implementing a plan of
progressive liberalization. Further, in Ukraine's view, by taking into account all of these factors, its
investigation and determination are in line with Articles 3.1 and 4.2(a).
391
7.348. The Panel begins its analysis with Japan's claim under Article 7.4, first sentence. This claim
concerns a substantive requirement – the requiremen t of progressive liberalization of a safeguard
measure at regular intervals – that is different in nature from those imposed by Articles 5.1 and
7.1, which concern the appropriateness of the particular safeguard measure chosen in terms of its
nature and duration.
7.6.1 Claim under Article 7.4, first sentence
7.349. Article 7.4, first sentence, provides as follows:
In order to facilitate adjustment in a situation where the expected duration of a
safeguard measure as notified under the provisions of paragraph 1 of Article 12 is
over one year, the Member applying the meas ure shall progressively liberalize it at
regular intervals during the period of application.
7.350. Article 12.2 sets forth a procedural requirement related to this substantive requirement.
Pursuant to Article 12.2, in making the mandatory notifications to the WTO Committee on
Safeguards under Article 12.1
392, the Member proposing to apply a safeguard measure must, inter
alia:
[P]rovide the Committee on Safeguards with all pertinent information, which shall
include ... [a] timetable for progressive liberalization.
7.351. Japan submits that Ukraine acted inconsis tently with Article 7.4 because it failed to
progressively liberalize the safeguard measure. According to Japan, Article 7.4, first sentence,
contemplates progressive liberalization as a means to achieve the purpose of facilitating
adjustment. In Japan's view, progressive liberalization is a mandatory requirement, which must be
provided for together with the safeguard measure during its application. Japan further contends
that the requirement to provide for progressive liberalization, by submitting a relevant timetable,
has to be satisfied before a safeguard measure is applied. According to Japan, the text of
Article 12.2 confirms this understanding. Japan maintains that the requirements of Articles 7.4 and
12.2 are intrinsically linked, and that Article 12.2 provides the necessary context for the correct
interpretation of the scope of the obligation in Article 7.4, in particular for the purpose of
determining "when" that obligation must be complied with.
393
7.352. As regards the safeguard measure at issu e, Japan asserts that Ukraine introduced the
measure for a period of three years, but did not pr ovide for its progressive liberalization when it
imposed the safeguard measure through the Notice of 14 March 2013. Japan acknowledges that
Ukraine's competent authorities provided for progressive liberalization of the safeguard measure
through the Commission decision of 12 February 2014.
394 In Japan's view, such an a posteriori
decision does not render the safeguard measure at issue consistent with Article 7.4. Thus, Japan

391 Ukraine's first written submission, paras. 198 and 199; opening statement at the first meeting of the
Panel, para. 75; second written submission, paras. 75 and 76.
392 For the text of Article 12.1, see para. 7.454 below.
393 Japan's first written submission, paras. 296 and 304-305; and second written submission,
paras. 239, 241 and 244.
394 Notice of Liberalization of Safeguard Measures on Import to Ukraine of Motor Cars Regardless of
Country of Origin and Export, (Exhibit JPN-8); WTO document G/SG/N/8/UKR/3/Suppl.1-
G/SG/N/10/UKR/3/Suppl.2-G/SG/N/11/UKR/3/Suppl.1, Notification under Article 12.1 (b) of the Agreement on
Safeguards on Finding a Serious Injury or Threat Thereof Caused by Increased Imports; Notification pursuant
to Article 12.1(c) of the Agreement on Safeguards on Taking a Decision to Apply a Safeguard Measure;
Notification pursuant to Article 9, Footnote 2 of the Agreement of Safeguards, (Exhibit JPN-9).

claims that Ukraine acted inconsistently with Article 7.4 by failing to progressively liberalize its
safeguard measure.395
7.353. Ukraine acknowledges that Article 7.4 requires the Member concerned to progressively
liberalize a safeguard measure imposed for more than one year. Ukraine considers Japan's
reference to Article 12 irrelevant to this particular claim, since Article 7.4 imposes a substantive
obligation to liberalize a measure at regular intervals, whereas Article 12 sets forth notification
requirements. According to Ukraine, the obligations under Articles 7.4 and 12.2, although related,
are different because the substantive obligation to liberalize a safeguard measure requires only
that a plan be put in place and then implemente d, whereas the timing for notification of the
timetable is an obligation that must be addressed separately under Article 12.2.
396
7.354. Ukraine contends that it satisfied the requ irement of Article 7.4 by implementing a plan of
progressive liberalization. According to Ukraine, its Decision on Liberalization was published and
immediately notified to the WTO Committee on Safeguards on 28 March 2014, and the notified
plan provided for a phased reduction in the duty level after 12 months of implementation and then
again after 24 months. Ukraine maintains that by devising, implementing and notifying this plan, it
has satisfied its obligation under Article 7.4.
397
7.355. The Panel recalls that, under Article 7.4, the requirement to progressively liberalize at
regular intervals extends to safeguard measures with an expected duration of more than a year. In
the case of the safeguard measure at issue, Uk raine notified an expected duration of three
years.398 Accordingly, it is clear that the progressive liberalization requirement applies to the
safeguard measure in question.
7.356. Japan claims that Ukraine was in breach of Article 7.4 when the DSB established this Panel
on 26 March 2014. The record indicates that Uk raine's competent authorities published and
notified a liberalization schedule for the first time two days later, on 28 March 2014. 399 The
liberalization schedule provides for a reduction in the applicable duty rates in two steps. The initial
reduction was to go into effect within 12 months from the date of introduction of the safeguard
measure (14 April 2013), i.e. in mid-April 2014;
400 a further reduction was to enter into force one
year later, i.e. in mid-April 2015. Thus, on the date of establishment of this panel, a liberalization
of the safeguard measure had neither occurred nor been publicly announced or notified to the
WTO, although these steps were taken shortly afterwards.
7.357. The first issue presented by Japan's claim is whether Ukraine has acted inconsistently with
Article 7.4 because it did not provide a timetable for its progressive liberalization before applying
its safeguard measure. Japan argues that the ob ligation to progressively liberalize a safeguard
measure can only be met if a timetable for progressive liberalization has been provided in advance
of the measure being applied. Ukraine, however, considers that the obligation to notify a timetable
for progressive liberalization is separate from the substantive obligation under Article 7.4 to
progressively liberalize a safeguard measure.
401

395 Japan's first written submission, para. 305; opening statement at the first meeting of the Panel,
para. 97; and second written submission, paras. 242, 243 and 244.
396 Ukraine's first written submission, paras. 188, 189; opening statement at the first meeting of the
Panel, para. 73; second written submission, para. 74; opening statement at the second meeting of the Panel,
para. 88.
397 Ukraine's first written submission, paras. 178, 179 and 194; opening statement at the first meeting
of the Panel, para. 73; second written submission, para. 74; and opening statement at the second meeting of
the Panel, para. 89.
398 WTO document G/SG/N/8/UKR/3-G/SG/N/10/UKR/3-G/SG/N/11/UKR/3, Notification under
Article 12.1(b) of the Agreement on Safeguards on Finding a Serious Injury or Threat Thereof Caused by
Increased Imports; Notification pursuant to Article 12.1(c) of the Agreement on Safeguards; Notification
pursuant to Article 9, Footnote 2 of the Agreement on Safeguards, (Exhibit JPN-7), p. 4.
399 The liberalization schedule entered into force on the date of publication. We also note that although
the schedule was adopted on 12 February 2014, it was not published until 28 March 2014, i.e. after the
establishment of this Panel.
400 Ukraine's response to Panel question No. 98.
401 The United States considers that Articles 7.4 and 12.2 contain distinct obligations, and that a breach
of Article 12.2 does not necessarily result in a consequential breach of Article 7.4. However, the
European Union considers that if the notification under Article 12.2 does not include a timetable for progressive

7.358. The first clause of Article 7.4, first sentence, refers to situations "where the expected
duration of a safeguard measure as notified under the provisions of paragraph 1 of Article 12 is
over one year". Thus, it contains a reference to the notification under Article 12.1. However, we
consider that the term "as notified" in this phrase relates to "the expected duration" of a safeguard
measure, and does not refer to the notification of a timetable for progressive liberalization. As we
have explained, the quoted phrase limits application of the liberalization obligation of Article 7.4 to
safeguard measures with an expected duration of over one year. It further clarifies, in our view,
that the "expected duration" to be used for determining whether Article 7.4 applies is the duration
that has been "notified" to the WTO Committee on Safeguards. Thus, we consider that the
reference to the notification under Article 12.1 must be seen in this context. Indeed, it is
noteworthy that the second clause of the first se ntence of Article 7.4 refers to the obligation of
progressive liberalization at regular intervals, and there is no similar reference to the notification
under Article 12.1 in that clause. The second clause of the first sentence does not say that a
safeguard measure must be progressively liberalized at regular intervals "as notified under the
provisions of paragraph 1 of Article 12". In our view, the conspicuous absence of a reference in the
second clause of the first sentence of Article 7.4 to a notification under Article 12.1, particularly in
the light of the reference in the first clause, suggests that failure to notify a timetable for
progressive liberalization in advance of the application of a safeguard measure does not
necessarily result in an inconsistency with Article 7.4. Nor do we see any reason to conclude that a
breach of Article 7.4 would necessarily occur if a timetable has not been made available otherwise
than through a notification under Article 12.1.
7.359. We certainly agree that a timetable made available in advance would greatly assist
exporting Members in monitoring compliance with Article 7.4 by the importing Member, since they
would know when they should expect to see pr ogressive liberalization occurring, and what that
progressive liberalization would consist of. It would also allow them to raise any concerns at an
early stage, and even give them the possib ility, in the consultations mandated under
Article 12.3
402, to seek a change to the timetable, wher e it has been duly notified pursuant to
Article 12.1. A timetable provided in advance woul d also provide security and predictability for
exporters regarding the future market access terms of the Member applying a safeguard measure.
7.360. Significantly, however, a Member can, in our view, comply with its obligation in Article 7.4
even if it has not previously provided a timetabl e for progressive liberalization. Article 7.4 is a
substantive provision that requires actual liberalization of the measure. The mere fact that a
Member has failed to provide a timetable for such liberalization does not preclude that Member
from taking the required liberalization steps regardless. We see nothing in Article 7.4 that prohibits
a Member from taking liberalization steps pursuant to a decision that post-dates the decision to
apply a safeguard measure. 403 Moreover, as we discuss below 404, our conclusion does not render
Article 7.4 inoperative, as it remains possible, even in the absence of a timetable provided in
advance, for a complaining party to demonstrate and a panel to determine whether a Member has
acted inconsistently with Article 7.4, by failing to actually progressively liberalize its safeguard
measure.
7.361. Based on the foregoing, we reject Japan's argument that failure to provide a timetable
before a safeguard measure is applied establishes, by itself, that a Member has acted
inconsistently with Article 7.4.
7.362. The second issue raised by Japan's claim is whether Ukraine has acted inconsistently with
Article 7.4 because, as of the date of establishmen t of this panel, it had failed to liberalize the

liberalization, and the safeguard measure at issue is silent, the evidence would support the view that no
progressive liberalisation is provided for, has occurred, or is occurring. See European Union's third-party
response to Panel question No. 24; and United States' third-party response to Panel question No. 24.
402 For the text of Article 12.3, see para. 7.524 below.
403 The European Union and the United States likewise appear to disagree with Japan's argument about
Ukraine's "a posteriori decision". Both the United States and the European Union agree that nothing in
Article 7.4 precludes liberalization through a decision post-dating the initial decision to impose a safeguard
measure. See European Union's third-party response to Panel question No. 24; and United States' third-party
response to Panel question No. 24.
404 See para. 7.362.

safeguard measure.405 We recall that the relevant requirement is to liberalize "at regular intervals
during the period of application". The word "regular " is defined as "recurring or repeated at fixed
times, recurring at short uniform intervals". 406 Applying this definition in the specific context of
Article 7.4, we consider that regular intervals of li beralization are uniform intervals, that is to say,
intervals that are equally separated in time. We find further support for this view from the
reference in Article 7.4 itself to the purpose of th e requirement in question, which is to "facilitate
adjustment". Progressive liberalization that pr oceeds at equal intervals over the period of
application facilitates the adjustment of the domestic industry by exposing it to greater foreign
competition following a pattern that allows – and forces – the industry to adjust to each stage of
that liberalization, and prepare itself for the next one, at equal time intervals. The requirement of
progressive liberalization also and notably prec ludes the importing Member from back-loading
liberalization, i.e. not taking any liberalization steps until a late stage in the period of application of
a safeguard measure. Delaying liberalization in this way could create a disincentive for the
domestic industry to undertake appropriate efforts at adjustment from the outset of the period of
application, thus providing increased protecti on and diminishing the impetus to adjust to
competition from imports.
7.363. Article 7.4 does not establish any requirements or guidelines as to how long the regular
intervals should be. The only constraint it imposes is that the intervals be such as will "facilitate
adjustment" of the domestic industry. In this case, Ukraine decided to progressively liberalize the
measure that was to apply for three years after 12 and 24 months, that is, at regular intervals of
12 months.
407 In our view, for a safeguard measure with an expected duration of 36 months,
liberalization at the 12- and 24-month marks does not seem unreasonable. 408 Such two-step
liberalization ensures liberalization that is not only regular as well as progressive, but also apt to
facilitate adjustment of the domestic industry by increasing its exposure to foreign competition.
7.364. Moreover, as there is nothing in the Agr eement on Safeguards that required Ukraine to
have begun the progressive liberalization of its safeguard measure at any given point in time, the
lack of any liberalization as of the date of establishment of this Panel does not of itself require the
conclusion that Ukraine failed to liberalize its safeguard measure at regular intervals.
7.365. For all the reasons cited above, we thus conclude that, as of the date of establishment of
this Panel, Ukraine had not acted inconsistently with Article 7.4, first sentence, by failing to
progressively liberalize the safeguard measure at issue.
7.6.2 Claims under Articles 3.1, 4.2(c), 5.1, 7.1, and 11.1(a), and Article XIX:1(a)
7.366. The Panel now turns to address the remainde r of this group of claims. We begin with the
claims under Articles 5.1 and 7.1, and then move to the claims under Article 11.1(a) and
Article XIX:1(a), before turning to Japan's claims under Articles 3.1 and 4.2(c).
7.6.2.1 Claims under Articles 5.1 and 7.1
7.367. The Panel notes that Japan makes two distinct claims under Articles 5.1 and 7.1. The first
claim is based on both provisions, and relates to whether Ukraine's safeguard measure is applied
to "the extent necessary to facilitate adjustment"; the second claim is based on Article 5.1 only
and relates to whether the safeguard measure is applied to "the extent necessary to prevent or
remedy serious injury". We will address these claims in turn.

405 Japan recognizes that Ukraine subsequently notified a liberalization timetable, which it submitted as
Exhibits JPN-8 and JPN-9. We recall that we must assess the situation as it existed on the date of
establishment of the panel. See, e.g. Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II)/
EC – Bananas III (Article 21.5 – US), para. 273; Panel Report, Mexico – Taxes on Soft Drinks, para. 8.144.
406 The Shorter Oxford Dictionary (2007), Vol. 2, p. 2514.
407 We do not understand Japan to argue, in relation to the safeguard measure at issue, that the
intervals chosen by Ukraine were unduly long. In any event, Japan has not explained why 12-month intervals
should be viewed as too long in this case.
408 In safeguard disputes to date, for safeguard measures with a similar duration progressive
liberalization at regular intervals of 12 months has not been challenged. See, e.g., Panel Reports, Argentina –
Preserved Peaches (concerning a safeguard measure with a duration of three years); and US – Steel
Safeguards (concerning safeguard measures with a duration of three years plus one day).

7.368. Before proceeding further, we note that in its second written submission, Japan appears to
state that to the extent that the duration of Uk raine's safeguard measure had been set taking into
account "the entirety of the serious injury", the duration of the measure exceeds what is permitted
under Article 7.1.
409 However, Japan did not make specific reference to Article 7.1, let alone claim
a violation of Article 7.1, in the conclusion of the relevant section of the second written submission
or any other submission. We therefore consider th at Japan has failed to properly state a claim
under Article 7.1 relating to "the extent necessary to prevent or remedy serious injury".
7.6.2.1.1 Claims under Arti cles 5.1 and 7.1 concerning "the extent necessary to
facilitate adjustment"
7.369. The Panel recalls that Article 5.1, first sentence, provides that:
A Member shall apply safeguard measures only to the extent necessary to prevent or
remedy serious injury and to facilitate adjustment.
7.370. Article 7.1, for its part, provides that:
A Member shall apply safeguard measures on l y f o r s u c h p e r i o d o f t i m e a s m a y b e
necessary to prevent or remedy serious injury and to facilitate adjustment. The period
shall not exceed four years, unless it is extended under paragraph 2.
7.371. Japan notes that Articles 5.1 and 7.1 expressly provide that a safeguard measure shall be
applied only "to the extent necessary to facilitate adjustment". Japan claims that Ukraine acted
inconsistently with these provisions because it failed to provide for a progressive liberalization of
the safeguard measure in the Notice of 14 Ma rch 2013, which is necessary "to facilitate
adjustment". According to Japan, Article 7.4 contem plates progressive liberalization as a means of
facilitating adjustment. In Japan's view, progressive liberalization is a mandatory requirement to
facilitate adjustment, which must be provided fo r together with the safeguard measures during
their application.
410
7.372. Ukraine submits that in its investigation and determination it acted consistently with
Articles 5.1 and 7.1 because it applied the safeguard measure to facilitate adjustment in every
relevant aspect: the level of the duty, the durati on of the measure, and the scheduled progressive
liberalization. Ukraine argues that the duty level, the duration of the measure, and the
liberalization of the measure are designed to facilitate adjustment of the domestic industry in that
the safeguard measure eases the process of economic adjustment to foreign competition.
411
7.373. The Panel notes that Japan bases its claims with respect to "the extent necessary to
facilitate adjustment" on its separate claim that Ukraine acted inconsistently with Article 7.4
because it failed to progressively liberalize the safeguard measure. We have found in the
immediately preceding section that when this Panel was established, Ukraine was not acting
inconsistently with Article 7.4, first sentence. We also note that Ukraine's competent authorities
published and notified a liberalization schedule on 28 March 2014.
7.374. In examining the claims under Articles 5.1 and 7.1, we note that the reasons we have
developed in the preceding section in support of our interpretation of Article 7.4 also apply,
mutatis mutandis, to Articles 5.1 and 7.1.
412 Accordingly, we do not accept Japan's argument that
failure to provide a timetable before a safeguard me asure is applied establishes, by itself, that a
Member has acted inconsistently with Articles 5.1 and 7.1. We also do not consider that Ukraine
has acted inconsistently with Articles 5.1 and 7. 1 because it had not yet progressively liberalized
the safeguard measure at issue as of the date of establishment of this Panel. As discussed above,
there is nothing that requires Ukraine to have begun that liberalization at any given point in

409 Japan's second written submission, para. 234.
410 Japan's first written submission, para. 309; opening statement at the first meeting of the Panel,
411 Ukraine's first written submission, paras. 195 and 196; opening statement at the first meeting of the
Panel, para. 74; second written submission, paras. 75 and 76; and opening statement at the second meeting
of the Panel, paras. 90 and 91.
412 See para. 7.356 above.

time.413 Finally, we observe that it is in any event unclear to us how a failure to provide for
progressive liberalization would give rise to a breach of Article 7.1. As we understand it, the
requirement in Article 7.4, first sentence, to progressively liberalize a safeguard measure only
applies to measures whose duration, as notified under Article 12.1, is over one year. Thus,
Article 7.4, first sentence, takes as a given that the duration of a safeguard measure has been
notified, and is over one year. The fact that a Memb er fails to provide for progressive liberalization
of a notified measure does not demonstrate that the duration of the measure is excessive and that
the Member concerned is therefore not complyin g with its obligation to apply its safeguard
measure only for such period of time as is necessary to facilitate adjustment.
7.375. Based on the above considerations, we conc lude that Japan has failed to establish that
Ukraine has acted inconsistently with Articles 5.1 and 7.1 because it failed to provide for
progressive liberalization of the safeguard measure.
7.6.2.1.2 Claim under Articl e 5.1 concerning necessity "t o prevent or remedy serious
injury"
7.376. The Panel now turns to examine Japan's claim under Article 5.1 that the safeguard
measures must only be applied to the extent necessary to prevent or remedy serious injury.
7.377. Japan claims that Ukraine has acted inconsistently with Article 5.1 because it failed to
apply the safeguard measure "only to the extent ne cessary to prevent or remedy serious injury".
First, Japan argues that Ukraine failed in its causation and non-attribution analysis by setting the
rate of duty and the duration of the safeguard measure in such a manner that it also addresses
injury attributed to factors other than increased imports. Relying on the findings of the Appellate
Body in US – Line Pipe , Japan argues that the "non-attribution" requirement of Article 4.2(b)
provides the necessary context for the applicat ion of Article 5.1 and establishes a benchmark
against which the competent authorities should determine the permissible extent of their
safeguard measures. Japan contends that the rate of duty applied by Ukraine must be found to
exceed the extent necessary to prevent or remedy serious injury to the domestic industry. In
Japan's view, to the extent that the applied rate of duty was "sufficient to remedy the entirety of
the serious injury", Ukraine has acted inconsistently with Article 5.1 because Ukraine itself
acknowledged in its Key Findings that at least part of the injury had been caused by other
factors.
414
7.378. Japan further submits that Ukraine did not clarify why and how its tariff concession
prevented it from taking measures to offset th e change generated by the unforeseen development
and therefore failed to establish that the safe guard measure was applied only to the extent
necessary to prevent or remedy such serious injury. Finally, Japan maintains that the safeguard
measure cannot be regarded as having been applie d "only to the extent necessary to prevent or
remedy serious injury" because Ukraine applied th e measure only in April 2013 on the basis of an
analysis of imports and of the situation of the industry concerning the period prior to 2011.415
7.379. Ukraine counters that it acted in accordance with Article 5.1 because its safeguard
measure was imposed strictly to the extent necessary to prevent the threat of serious injury. In
addition, as regards Japan's first argument, Ukraine submits that it took into account the level of
causal impact of the increase in imports on the serious injury to the domestic industry when it set
the level of the duty. Ukraine maintains that it was appropriate to apply a rate of duty sufficient to
remedy the entirety of the serious injury that was threatened to be caused by the increased
imports.
416

413 See paras. 7.361-7.363 above.
414 Japan's first written submission, paras.146-147 and 300; opening statement at the first meeting of
the Panel, para. 95; second written submission, paras. 229-233, and 235; opening statement at the second
meeting of the Panel, paras. 64 and 65; and Appellate Body Report, US – Line Pipe, paras. 253 and 260.
415 Japan's first written submission, paras. 148 and 301; opening statement at the first meeting of the
Panel, para. 96; second written submission, paras. 236-237; opening statement at the second meeting of the
Panel, para. 66.
416 Ukraine's first written submission, paras. 192 and 194; opening statement at the first meeting of the
Panel, paras. 71-72; second written submission, paras. 71-73; and opening statement at the second meeting
of the Panel, para. 80.

7.380. The Panel notes that Japan's claim under Article 5.1 relates to the particular nature and
level of the safeguard measure Ukraine chose to apply as well as to the timing of its application. In
the light of our findings above that Ukraine's safeguard measure is inconsistent with Articles 2 and
4, and that Ukraine therefore lacked a legal basi s for applying its safeguard measure, we do not
consider it necessary, for the purposes of resolving this dispute, to make additional findings on
whether, by applying the measure at issue, Ukraine has also acted inconsistently with its
obligations under Article 5.1. We consequently exercise judicial economy and make no findings
with regard to this claim.
7.6.2.2 Claims under Article 11.1(a) and Article XIX:1(a)
7.381. Japan also raised claims under Article 11.1(a)
417 and Article XIX:1(a) 418 relating to the
application and duration of the safeguard measure at issue. Japan submits that Ukraine failed to
apply its safeguard measure "only to the extent necessary to prevent or remedy serious injury"
and has thereby acted inconsistently with Article 11.1(a) and Article XIX:1(a).419
7.382. Ukraine responds that Japan's claims under Article 11.1(a) and Article XIX:1(a), insofar as
they relate to the application of its safeguard measure at the selected level and for the expected
duration must fail because Ukraine took into account the level of causal impact of the increase in
imports on the threat of serious injury to the domestic industry when it set the level of duty, the
duration of the measure, and the scheme for progressive liberalization of the measure.
Accordingly, Ukraine requests the Panel to reject these claims.
420
7.383. The Panel recalls its findings above that Ukraine's safeguard measure is inconsistent with
Articles 2 and 4, and that Ukraine therefore lacks a legal basis for applying its safeguard measure.
In the light of this, we do not consider it necessary, for the purposes of resolving this dispute, to
make additional findings on whether, by applying the safeguard measure at issue, Ukraine has also
acted inconsistently with its obligations under Article 11.1(a) and Article XIX:1(a). We
consequently exercise judicial economy and make no findings with regard to these claims.
7.6.2.3 Claims under Article 3.1, last sentence, and Article 4.2(c)
7.384. The Panel now turns to Japan's claims under Article 3.1, last sentence, and Article 4.2(c).
7.385. Japan submits that Ukraine acted inconsistently with Articles 3.1 and 4.2(c) as its Notice of
14 March 2013 failed to provide (i) a timetable for progressive liberalization and (ii) reasoned and
adequate explanations as to why its safeguard measure is "necessary to prevent or remedy
serious injury".
421 Regarding the failure to provide a timetable for progressive liberalization, Japan
submits that a timetable of progressive liberalization constitutes a "pertinent issue of fact and law"
within the meaning of Article 3.1 and therefore sh ould be part of the report published by the
competent authorities. Japan considers that, likewise, the lack of a timetable for progressive
liberalization also constitutes a breach of Article 4.2(c), which requires the publication of a detailed
analysis of the case and a demonstration of the relevance of the factors examined.422
7.386. Ukraine submits that it has not acted inconsistently with Articles 3.1 and 4.2(c) because
the Notice of 14 March 2013 took into account all of the relevant factors.423

417 See para. 7.106 for the text of Article 11.1(a).
418 To recall, Article XIX:1(a) provides in relevant part that "the [Member] shall be free, in respect of
such product, and to the extent and for such time as may be necessary to prevent or remedy such injury, to
suspend the obligation in whole or in part or to withdraw or modify the concession".
419 Japan's first written submission, para. 302; and second written submission, para. 238.
420 Ukraine's first written submission, paras. 191 and 199; opening statement at the first meeting of the
Panel, paras. 70 and 75; second written submission, paras. 71 and 76; and opening statement at the second
meeting of the Panel, paras. 79 and 91.
421 Japan's first written submission, para. 311; and second written submission, para. 245.
422 Japan's second written submission, para. 245.
423 Ukraine's first written submission, para. 198; opening statement at the first meeting of the Panel,
para. 75; second written submission, para. 76; and opening statement at the second meeting of the Panel,
para. 91.

7.387. The Panel notes that the first asserted basis for Japan's claim concerns Ukraine's
undisputed failure to provide a timetable for progressive liberalization in its Notice of
14 March 2013. Japan argues in this respect that a timetable for progressive liberalization
constitutes a "pertinent issue of fact and law" within the meaning of Ar ticle 3.1 and, as such,
should figure in the published report. In considering this issue, we recall at the outset that
Article 3.1 requires publication of a report "setting forth [the competent authorities'] findings and
reasoned conclusions reached on all pertinent issues of fact and law". Thus, the report must cover
pertinent issues in respect of which the competent authorities reach findings and reasoned
conclusions. We further observe that Article 3 is entitled "Investigation". Article 4.2(a) clarifies that
safeguard investigations serve "to determine whether increased imports have caused or are
threatening to cause serious injury to a domestic industry under the terms of [the] Agreement".
424
The word "determine" confirms that the competent authorities are required to make
determinations, or reach "findings" and "reasoned conclusions", on the issues to be investigated.
These issues – whether there has been an increase in imports, serious injury or threat thereof, and
causation– all go to whether there is a legal basis for applying a safeguard measure, and if so,
what kind of measure. In contrast, the establis hment of a timetable for progressive liberalization
at regular intervals is not an issue that by its nature requires an "investigation" that culminates in
"findings" and "reasoned conclusions". Also, the issue of liberalization is not directly linked to
whether there is a sufficient legal and factual basis for applying a particular safeguard measure.
Nor is the competent authorities' decision on this issue governed by the findings and conclusions
on the issues that must be investigated.
7.388. Consideration of Article 4.2(c) leads to similar misgivings about Japan's claim. It requires
publication of a "detailed analysis of the case under investigation" and a "demonstration" of the
relevance of the "factors examined". As we have explained, how and when to liberalize a safeguard
measure are not issues to be considered and decided in the investigation underlying the decision
to impose a safeguard measure, but rather co me afterwards, and are subject to different
governing provisions of the Agreement on Safeguards.
7.389. We recognize that Article 12.2 identifies the timetable for progressive liberalization as
"pertinent information" that must be notified under Article 12.1(c) upon taking a decision to apply
a safeguard measure. This confirms that the timetable is pertinent "information" for Members to
receive.
425 It does not demonstrate, however, that the timetable is a "pertinent issue of fact and
law" that must first be investigated by the co mpetent authorities and on which they must reach
"findings" and "reasoned conclusions" or provide a detailed analysis and demonstration.
7.390. In the light of the above, we see no basi s for interpreting Article 3.1, last sentence, or
Article 4.2(c), as requiring that the published report, or analysis and demonstration, contain a
timetable for the progressive liberalization of the measure at regular intervals. We consequently
conclude that Ukraine did not act inconsistently with Article 3.1, last sentence, or Article 4.2(c) by
failing to provide a timetable for progressive liberalization in its Notice of 14 March 2013.
7.391. Next, we turn to the second asserted basis for Japan's claim. According to Japan, Ukraine's
Notice of 14 March 2013, contrary to Articles 3.1 and 4.2(c), fails to provide reasoned and
adequate explanations as to why the safeguard measure at issue is "necessary to prevent or
remedy serious injury". We understand this quotat ion to refer to Japan's claim under Article 5.1.
Since we have found above that Ukraine's safeguard measure is inconsistent with Articles 2 and 4
and that Ukraine therefore lacked a legal basis fo r applying its safeguard measure, and since we
made no findings on Japan's substantive claims under Article 5.1, we do not consider it necessary,
for the purposes of resolving this dispute, to make findings on Japan's claims under Articles 3.1
and 4.2(c). In the light of this, we also exercise judicial economy with respect to these claims and
make no findings regarding them, insofar as they concern the explanations provided in the Notice
of 14 March 2013 as to why the safeguard measure is necessary to prevent or remedy serious
injury.

424 For the full text of Article 4.2(a), see para. 7.202 above.
425 As we have explained above, providing the timetable inter alia gives Members the possibility to seek
a change to the pace of liberalization in the context of consultations under Article 12.3 and also assists with
monitoring of compliance with Article 7.4, first sentence.

7.7 Claims under Article II:1(b) of the GATT 1994
7.392. The Panel now turns to Japan's claims under Article II:1(b) of the GATT 1994, which
provides:
The products described in Part I of the Schedule relating to any contracting party,
which are the products of territories of other contracting parties, shall, on their
importation into the territory to which the Sc hedule relates, and subject to the terms,
conditions or qualifications set forth in that Schedule, be exempt from ordinary
customs duties in excess of those set forth and provided therein. Such products shall
also be exempt from all other duties or charges of any kind imposed on or in
connection with the importation in excess of those imposed on the date of this
Agreement or those directly and mandatorily required to be imposed thereafter by
legislation in force in the importing territory on that date.
7.393. Japan claims that Ukraine acted inconsistently with its obligations under Article II:1(b)
because Ukraine imposes duties that are in excess of those set forth in its schedule through the
unlawful safeguard measure at issue.
426
7.394. Ukraine responds that Japan's claim under Article II:1(b) is a consequential claim. It
argues that its safeguard measure was lawfully implemented in accordance with Article XIX and
the Agreement on Safeguards, and was permitted as "emergency action on imports of particular
products". Accordingly, Ukraine concludes that Japan's claim must fail.427
7.395. The Panel found above that Ukraine (i) acted inconsistently with its obligations under
Article XIX:1(a) by failing to make a proper de termination regarding the existence of unforeseen
developments and the effect of GATT 1994 obligations; (ii) acted inconsistently with its obligations
under Article 2.1 by failing to make a proper determination regarding increased imports; (iii) acted
inconsistently with its obligations under Article 4.2(a) by failing to make a proper determination
regarding threat of serious injury to the domestic industry; and (iv) acted inconsistently with its
obligations under Article 4.2(b) by failing to conduct a proper causation analysis. In the light of
this, we see no need, for the purpose of resolving this dispute, to make additional findings
regarding whether Ukraine has also acted inconsistently with its obligations under Article II:1(b).
We therefore exercise judicial economy and decline to make findings with respect to this claim.
7.8 Claims relating to the conduct of the investigation and the investigation report
7.396. The Panel notes that Japan put forward three different claims under Article 3. The first
claim is based on Article 3.1, second sentence, concerning reasonable public notice and public
hearings or other appropriate means to present ev idence and views, including an opportunity to
respond to the presentations of others. The second claim is based on Article 3.1, first sentence,
which concerns the obligation to make a proper investigation. The third claim is based on
Article 3.1, last sentence, and Article 4.2(c), concerning the obligation to publish a report. We will
address these claims in turn.
7.8.1 Claim under Article 3.1, second sentence
7.397. Article 3.1, second sentence, provides as follows:
This investigation shall include reasonable public notice to all interested parties and
public hearings or other appropriate means in which importers, exporters and other
interested parties could present evidence and their views, including the opportunity to
respond to the presentations of other parties and to submit their views, inter alia, as
to whether or not the application of a safeguard measure would be in the public
interest.

427 Ukraine's first written submission, paras. 200-201; second written submission, para. 77.

7.398. Japan claims that Ukraine acted inconsistently with Article 3.1, second sentence, because
Ukraine failed to provide (i) reasonable public notice and (ii) appropriate means through which
Japan as an interested party could present evidence and its views, including the opportunity to
respond to the presentations of other parties. Japan argues that although registered as an
interested party, it received very little information from the authorities and few submissions or
presentations made by the other parties, and that this prevented it from presenting its views in a
meaningful way.
428
7.399. Ukraine submits that Japan's claim is no t supported by the facts on the record. Ukraine
observes that it involved Japan and other interested parties in the course of the investigation and
provided appropriate means for the defence of their interests, as required by Article 3.1. In this
regard, Ukraine recalls that it sent several letters to the Embassy of Japan and provided Japan
with an opportunity to participate in the hearin g organised in March 2012. Ukraine considers that
in doing so the competent authorities adequately discharged their obligations under Article 3.1.
429
7.400. As concerns the obligations set forth in the second sentence of Article 3.1, Japan submits
that the second sentence elaborates on the specific content of the term "investigation". It provides
certain procedural guarantees, namely the requirem ents of reasonable public notice and public
hearings or other appropriate means in which interested parties could present evidence and their
views.430
7.401. Ukraine responds that Article 3.1 contains only very limited procedural obligations that
Members must comply with when conducting a sa feguard investigation and that this due process
provision is of a general nature and does not specify how the various due process obligations listed
therein are to be complied with. Nevertheless, Ukraine acknowledges that Article 3.1 obliges the
competent authorities of a Member to provide reasonable public notice to all interested parties and
to provide all such parties with the opportunity to present evidence and their views and to respond
to the presentations of other parties.
431
7.402. The Panel notes that both parties agree that Article 3.1, second sentence, provides certain
procedural guarantees to interested parties, notably "reasonable public notice" and "public
hearings or other appropriate means … [to] present evidence and their views including the
opportunity to respond to the presentations of other parties". 432 This was also confirmed by the
Appellate Body in US – Wheat Gluten:
The focus of the investigative steps mentioned in Article 3.1 is on 'interested parties',
who must be notified of the investigation, and who must be given an opportunity to
submit 'evidence', as well as their 'views', to the competent authorities. The interested
parties are also to be given an opportunity to 'respond to the presentations of other
parties'.
433
7.403. We note that Article 3, second sentence, does not define the term "interested parties".
Nevertheless, it makes clear that the term "inter ested parties" at a minimum includes importers
and exporters. In addition, it refers to "other interested parties", without qualification. In our view,
therefore, the term "interested parties" also includes Members such as Japan whose interest in the
proceeding is self-evident, as its exporters would be affected by the imposition of a safeguard
measure. We find relevant in this regard that the importing Member must, under Article 12.1 of
the Agreement on Safeguards, notify the WTO Committee on Safeguards immediately on initiating
a safeguard investigation. One of the reasons why Article 12.1 requires immediate notification in

428 Japan's first written submission, para. 163; second written submission, paras. 67-68; and opening
statement at the second meeting of the Panel, para. 60.
429 Ukraine's first written submission, paras. 61 and 66; opening statement at the first meeting of the
Panel, para. 31; second written submission, para. 16; and opening statement at the second meeting of the
Panel, para. 16.
430 Japan's first written submission, para. 153 (referring to Panel Reports, US – Steel Safeguards,
431 Ukraine's first written submission, paras. 50 and 52; and second written submission, para. 19.
432 See also Panel Reports, US – Steel Safeguards, para. 10.61 (stating that "Article 3.1 of the
Agreement on Safeguards provides certain procedural guarantees to interested parties, such as 'reasonable
public notice' and 'public hearings or other appropriate means [to] present evidence and their views'").
433 Appellate Body Report, US – Wheat Gluten, para. 54.

our view is to ensure that potentially affected exporting Members do not miss the opportunity to
present their views to the competent authorities as interested parties.
7.404. In the investigation at issue in this dispute, Ukraine in fact registered as interested parties
not only importers and foreign producers, but also eight authorities of foreign countries, including
the Embassy of Japan in Ukraine, and international organizations.434 We thus proceed on the same
basis as the parties – that an exporting Member such as Japan can properly be viewed as an
"interested party" within the meaning of Article 3.1, second sentence. More specifically, we
consider that Japan falls within the category of "other interested parties".
7.405. Turning now to Japan's claim, and having regard to the text of Article 3.1, second
sentence, we consider that Japan, in order to sustain its claim under that provision, must establish
that Ukraine:
a. failed to provide reasonable public notice; or
b. failed to provide public hearings or other appropriate means through which Japan as an
interested party could present evidence and its views, including the opportunity to
respond to the presentations of other parties.
7.8.1.1 Reasonable public notice
7.406. The Panel will begin its analysis with an examination of Japan's contention that Ukraine
has failed to provide reasonable public notice.
7.407. Japan argues that Article 3.1 provides cert ain procedural guarantees to interested parties
such as "reasonable public notice".
435 Further, according to Japan, although registered as an
interested party in the investigation, it received very little information from the competent
authorities. Japan argues that Exhibit JPN-13 demonstrates Ukraine's failure to comply with the
procedural requirements of Article 3.1. Japan su bmits that only six letters and two verbal notes
were communicated to Japan during the investigation, and that these communications were
merely procedural and did not contain any substantive information.436
7.408. Ukraine responds that Japan's claim is co ntradicted by the facts on the record. Ukraine
argues that there is no express provision guaranteeing interested parties access to the file, apart
from the very general requirement to provide "reaso nable public notice to all interested parties,"
and that the Agreement on Safeguards does not contain any disclosure obligations as set forth in,
for example, Articles 6.4 and 6.9 of the Anti-Dum ping Agreement. Furthermore, in Ukraine's view,
Exhibit JPN-13, which indicates that Ukraine sent six letters to the Embassy of Japan during the
investigation and contacted the Embassy of Japa n via telephone on two additional occasions,
makes it clear that Ukraine gave Japan reasonable public notice. Ukraine asserts that the index of
Exhibit JPN-13 also indicates that Japan had notice of the 22 March 2012 hearing. Ukraine also
points out that in the Notice on Initiation the interested parties were also provided with a 45-day
period to send their comments and views to the Ministry for consideration.
437
7.409. The Panel notes that while the parties disagree whether Ukraine gave reasonable public
notice to all interested parties, neither party ha s been specific about what constitutes reasonable
public notice within the meaning of Article 3.1. In our view, in interpreting the phrase "reasonable
public notice", it is necessary to bear in mind that interested parties play a central role in
safeguard investigations and that they are a primary source of information for the competent
authorities.
438 In the light of this, we consider that the competent authorities must certainly notify

434 List of the interested parties of the safeguard investigation, (Exhibit JPN-12); Letter sent on
25 August 2011 regarding "the list of the interested parties of the investigation", and their rights and
obligations, (Exhibit UKR-2).
435 Panel Reports, US – Steel Safeguards, para. 10.61.
436 Japan's first written submission, paras. 153 and 163; and second written submission, paras. 68–69.
437 Ukraine's first written submission, para. 61; opening statement at the second meeting of the Panel,
para. 22 and response to Panel question No. 29.
438 In US – Wheat Gluten, the Appellate Body highlighted the special role of interested parties in
safeguard investigations. See Appellate Body Report, US – Wheat Gluten, para. 54 (stating with regard to

interested parties of a decision or action, such as the initiation of an investigation, that impacts on
whether or how interested parties can discharge thei r role as providers of evidence and views. As
we mentioned above, the Appellate Body in US – Wheat Gluten also stated that interested parties
must be notified of an investigation.
7.410. Furthermore, absent further elaboration in Article 3.1, we consider that the adjective
"reasonable" when used in conjunction with "public notice" is susceptible of being interpreted to
relate to several relevant aspects, including the timing of the public notice, the manner of
publication of the notice, and its content. Here as well, a determination of whether public notice is
"reasonable" in terms of its timing, manner of publication and content may, in our view, affect the
ability of interested parties to perform their role in the investigative process.
7.411. With these considerations in mind, we now turn to the safeguard investigation at issue in
this dispute. Ukraine issued three public notices in connection with the investigation at issue:
(i) the Notice of Initiation (Exhibit JPN-3), (ii) the Notice of Extension (Exhibit JPN-5), and (iii) the
Notice of Imposition (Exhibit JPN-2).
7.412. Japan has not addressed the latter two notices in its arguments pertaining to its claim
under the second sentence of Article 3.1. We ther efore do not consider them further. As regards
the Notice of Initiation, Japan has not specifically identified in what way the Notice in its view was
not "reasonable" in terms of its timing, manner of publication or content. We note that it was
published in the Uryadovyi Kuryer, the official government gazette of Ukraine, on 2 July 2011. The
Notice indicates that the competent authorities would register the interested parties within 30 days
of publication of the Notice; that they would review requests for hearings within the same
timeframe; and that they would review written comments and information within 45 days of
publication.
439 As regards the content of the Notice, it sets forth: (i) the date of initiation of the
investigation; (ii) the products subject to the investigation; (iii) the reasons for the initiation of
investigation; and (iv) deadlines and procedures applicable to interested parties. In view of these
elements, we see no basis on which to conclude that the public notice given by Ukraine of the
initiation of the investigation at issue was not reasonable in terms of its timing, manner of
publication or content.
7.413. As regards Japan's argument that it received very little substantive information from the
competent authorities during the investigation, we see nothing in Article 3.1 that would require the
competent authorities to provide substantive information beyond what is necessary to provide
reasonable public notice.
440 We have just found that Japan has failed to establish that the Notice of
2 July 2011 falls short in this respect. Also, we observe that Japan has not been specific about
what additional information Ukraine should have provided. For all these reasons, we reject Japan's
argument that it received too little substantive information from Ukraine's competent authorities.
7.414. In the light of the foregoing consideratio ns, we conclude that Japan has not demonstrated
that Ukraine acted inconsistently with Article 3.1, second sentence, because the investigation did
not include reasonable public notice to all interested parties.
7.8.1.2 Public hearings or other appropri ate means to present evidence and views,
including an opportunity to respond to the presentations of others
7.415. The Panel now turns to Japan's claim that Ukraine acted inconsistently with Article 3.1,
second sentence, because it failed to provide an appropriate means through which Japan as an
interested party could present evidence and its views, including the opportunity to respond to the
presentations of other parties.

Article 3.1, second sentence, that "[t]he Agreement on Safeguards, therefore, envisages that the interested
parties play a central role in the investigation and that they will be a primary source of information for the
competent authorities").
439 Exhibit JPN-12 indicates that the competent authorities registered 38 interested parties. See also
Exhibit UKR-2 and Ukraine's first written submission, para. 23. Ukraine pointed out that many interested
parties sent written comments. Ukraine's second written submission, para. 16.
440 Pursuant to Article 3.1, second sentence, the competent authorities must also give interested parties
access to presentations of other parties.

7.416. Japan argues that the competent authorities are responsible for providing "appropriate
means" to ensure meaningful opportunities for the interested parties to present evidence and their
views as well as to respond to the presentations of other parties. Japan contends that these
"appropriate means" must, among other things, in clude specific rules for the distribution of
relevant documents, in order to ensure such meaningful opportunities. In Japan's view, this
requirement flows from the competent authorities' duty to carry out an "investigation" which
precludes "them from remaining passive".
441 Japan maintains that the competent authorities must
ensure that all interested parties receive the relevant documents submitted by the other parties.442
7.417. Japan submits that it was prevented from effectively presenting its views in a meaningful
way in the investigation at issue, as it did not have adequate opportunity to respond to the few
submissions and presentations made by the other interested parties that it received. Japan asserts
that it sent the competent authorities two sets of written comments during the investigation that
were limited to brief general observations, due to the very limited information that had been
provided to it. According to Japan, Ukraine's assertion that the competent authorities are not
obliged by the Safeguards Law
443 to provide such information to the interested parties, unless the
authorities received a written request, must be rejected, because Ukraine cannot justify its failure
to respect the requirements of Article 3.1 on the basis of its domestic legislation.
444
7.418. Japan further contends that, while it could and did participate in the public hearing of
M a r c h 2 0 1 2 , i t c a n n o t b e s a i d t h a t i t w a s p r o v i d e d w i t h a m e a n i n g f u l o p p o r t u n i t y t o p r e s e n t
evidence and its views, given the very limite d information concerning the elements of the
investigation that had been provided to Japan prior to the hearing, and in view of the time
constraints of the hearing. Moreover, Japan argues that the Ukrainian authorities did not ensure
the appropriate means for the interested parties to familiarize themselves with the other parties'
evidence and views. According to Japan, in view of the unclear and ambiguous wording of
Article 9.6 of Ukraine's Safeguards Law
445 , Ukraine did not provide an appropriate means of
ensuring communication between, and participation of, the interested parties in this investigation.
Japan maintains that the requirements of Article 9.6 are contradictory and ambiguous and that it
remains unclear who and under what conditions should supply the relevant information.
446
7.419. Ukraine submits that Japan's claim is not supported by the facts on the record because
Ukraine involved the interested parties in the course of the investigation and provided appropriate
means for the defence of their interests, in a ccordance with the procedural obligation of
Article 3.1. Ukraine argues that, under Article 3.1, second sentence, the competent authorities are
obliged to provide an opportunity for participation, but obviously cannot force the interested
parties to present their interests. Relying on a statement by the panel in US – Steel Safeguards ,
Ukraine maintains that "inviting comments in response to the questionnaires, and addressing the
issue during its public hearings" is enough for a Member to comply with the obligation under
Article 3.1 to provide "appropriate means in which importers, exporters and other interested
parties [can] present evidence and their views".
447

441 Appellate Body Report, US – Wheat Gluten, para. 55.
442 Japan's response to Panel question No. 89.
443 Exhibit JPN-1.
444 Japan's first written submission, para. 163; second written submission, para. 67; opening statement
at the second meeting of the Panel, para. 60; and response to Panel question Nos. 9, 89 and 110.
445 Article 9.6 of the Ukraine's Safeguards Law provides, in relevant part, that:
The interested parties may on written request, see all information provided by another interested
party …. if such information: [1. relates to protec tion of their interests; 2. is not confidential
pursuant to Article 12 of the Law; 3. is used for the purposes of a safeguard investigation].
…
The information and evidences supplied to the Ministry by one of the interested parties in the
course of a safeguard investigation shall be also supplied to all other interested parties involved.
Where the information and evidences haven't been provided to the Ministry or to other interested
parties, or provided information and evidences could not be verified, such information and
evidences shall be disregarded by the Ministry in the course of a safeguard investigation.
446 Japan's second written submission, para. 69; response to Panel question Nos. 9, 28 and 89; and
comments on Ukraine's response to Panel question No. 115.
447 Ukraine's first written submission, para. 61; opening statement at the first meeting of the Panel,
para. 31; Ukraine's second written submission, paras. 16 and 19; and opening statement at the second
meeting of the Panel, paras. 16, 18 and 19 (referring to Panel Reports, US – Steel Safeguards, para. 10.64).

7.420. According to Ukraine, its competent authorities provided the interested parties with a
mechanism to actively participate in the investigation according to its Safeguards Law and the
Notice on Initiation. Ukraine points out that interested parties were provided with a 45-day period
to send comments and information to the Ministry. Ukraine considers that Exhibit JPN-13 also
makes clear that it gave Japan the opportunity to present evidence and its views at the
March 2012 public hearing. Ukraine notes that Japa n had a possibility to meet all other interested
parties as well as to present its views at the hearings and send a written version of its views to the
Ministry. Ukraine considers that Japan could have participated much more actively in the
investigation, as other interested parties did, and that Japan did not fully exercise its rights. Thus,
Ukraine does not consider that Japan's lack of participation was the fault of the Ministry.
448
7.421. Ukraine further argues that Japan did not request access to the application by the
domestic industry or the information provided by other interested parties, and did not complain
about not being provided such information by these parties automatically. Ukraine contends that
according to its Safeguards Law, registered interested parties are to provide all other interested
parties with the evidence and information they subm it to the Ministry, and that the Ministry is not
obliged under the Safeguards Law to provide such information to the interested parties, unless
they submit a written request to that effect. Ukraine notes that the Ministry sent a letter to the
Embassy of Japan in Ukraine, and to all the other registered interested parties, with a summary of
their rights and obligations, which included providing all the information supplied to the Ministry
directly to other interested parties. Ukraine obse rves that many interested parties, but not the
Embassy of Japan in Ukraine, sent the Ministry appropriate information.
449
7.422. The Panel begins by observing that the se cond sentence of Article 3.1 requires that the
competent authorities hold public hearings "or" provide other appropriate means for interested
parties to present evidence and views, including responses to presentations of other parties. The
word "or" makes clear that when public hearings are held, there is no obligation to provide, in
addition, any "other appropriate means" of giving input.
7.423. As regards access to substantive information on the investigation at issue, nothing in the
text of the second sentence of Article 3.1, or any other provision of the Agreement on Safeguards
cited by Japan, indicates that the importing Me mber must provide substantive information in
advance of any public hearings to the interested pa rties. While Article 3.1 refers to an opportunity
to "respond" to presentations of other parties, this is in the context of the public hearings or other
appropriate means which must be provided for all interested parties to present evidence and their
views.
7.424. We now turn to examine the facts of the pr esent dispute. The evidence on record indicates
that Ukraine's competent authorities undertook relevant steps as indicated in the following table:

448 Ukraine's second written submission, para. 16; opening statement at the second meeting of the
Panel, paras. 18 and 20; and response to Panel question No. 28.
449 Ukraine's second written submission, para. 18; and opening statement at the second meeting of the
Panel, paras. 20–21.

Date Step Description
2 July 2011 Publication of the Notice of
Initiation (Exhibit JPN-3)
The Ministry of Economy informed the public
about the deadline for requesting registration as
interested party (within 30 days after publication
of the Notice), reviewin g requests for hearings
(within 30 days after publ ication of the Notice),
and submitting written comments and other
information (within 45 days after publication date
of the Notice).
25 August 2011 Letter from Ministry of Economic
Development and Trade of Ukraine
to the interested parties (Exhibit
UKR-2)
The Ministry provided a list of registered
interested parties, inform ed registered interested
parties that Ukraine's Safeguards Law established
the rights and obligations of interested parties
and provided an annotated list of selected
provisions of the Safeguards Law. The Ministry
also informed interested parties that they were
required to send their written comments and
other information directly to all other interested
parties within five days of submitting them to the
competent authorities; and that they could submit
a request to the competent authorities to see all
information submitted to them by another
interested party, subject to certain conditions.
18 January 2012 Letter from Ministry of Economic
Development and Trade of Ukraine
to Embassy of Japan in Ukraine
(Exhibit UKR-2)
The Ministry informed about the date of the public
hearing to be held – 7 February 2012 – and the
agenda for the hearing. The agenda indicates that
for each item of the agenda, the complainant
would make a presentation, followed by
presentations of the interested parties and, lastly,
debate.
3 February 2012 Letter from Ministry of Economic
Development and Trade of Ukraine
to interested parties (Exhibit UKR-
2)
The Ministry postponed the public hearing date
until further notice.
7 March 2012 Letter from Ministry of Economic
Development and Trade of Ukraine
to interested parties (Exhibit UKR-
2)
The Ministry fixed 22 March 2012 as the new
hearing date and informed the interested parties
that information provided by interested parties
orally during the hearing would be considered in
the Minister's special investigation only if it was
submitted in writing no later than 27 March 2012.

22 March 2012 Public hearing, Ministry of
Economic Development and Trade
of Ukraine, Kiev (Exhibit UKR-2)
The public hearing took place.
7.425. As is apparent from the table, the competent authorities in the investigation at issue:
a. informed all interested parties of the proced ure for registration and subsequently of the
identities of the interested parties that were registered;
b. informed interested parties of the date of the public hearing and the agenda450;
c. gave interested parties an opportunity to (i) submit written comments and other
information within 45 days after publication of the Notice; and (ii) make oral

450 Japan has stated that it participated in the public hearing of 22 March 2012. Japan's response to
Panel question No. 28.

presentations at the public hearing, to be considered by the competent authorities
subject to submission of a written version after the public hearing451;
d. informed interested parties (i) of the obligation to send their written comments and
other information directly to all other interested parties within five days of submitting
them to the competent authorities; and (ii) that they could submit a request to the
competent authorities to see all information submitted to them by another party, subject
to certain conditions452; and
e. gave interested parties an opportunity at the public hearing, either as part of their own
presentations or during the subsequent de bate, to respond to written comments and
other information submitted by other parties in advance of the hearing.
7.426. Furthermore, the competent authorities informed interested parties that its investigation
would be conducted in accordance with the Sa feguards Law of Ukraine. Article 9.5 of the
Safeguards Law provides that interested parties participating in a public hearing on an
investigation may supply additional information in the course of such hearings, to be considered by
the competent authorities subject to submission of a written version after the public hearing.
Article 9.6 further provides that interested parties may comment on all information submitted by
another interested party, and that comments must be considered by the competent authorities if
they are "well grounded" and submitted within the deadline set by the competent authorities.
453
Thus, Ukraine's domestic legislation establishes specific opportunities and means for interested
parties to participate in the investigation and provide information.
454
7.427. Particularly in the light of the addition al opportunities for participation and access to
information provided for under Ukrainian law, the interested parties in this investigation could
"present evidence and their [own] views", both in writing and orally at the public hearing. They
also had an "opportunity to respond to the presentations of other parties" – that is to say,
presentations of evidence or vi ews submitted by other parties. Interested parties could do so
either orally at the public hearing (and provide a written version of their responses after the
hearing by 27 March 2012
455) or, in the case of new presentations of other parties at the public
hearing, after the public hearing pursuant to Article 9.6 of the Safeguards Law. 456 Regarding the
time constraints at the public hearing to which Japan has referred, the initial agenda for the public
hearing communicated to Japan on 18 January 2012 suggests that the time set aside for the public
hearing permitted only brief responses to presentations by other parties. However, there is no
evidence, and Japan does not contend, that it or any other interested party sought and was denied
additional time to respond to other parties' presentations.
457
7.428. Japan observes that it received little substantive information from the competent
authorities. As already mentioned, however, Article 3.1 imposes no obligation on the competent
authorities to provide interested parties with substantive information over and above that needed
to satisfy the requirement to give "reasonable public notice" of an investigation.

451 Letter sent on 7 March 2012 regarding exact date and time of the hearings, (Exhibit UKR-2).
452 Letter sent on 25 August 2011 regarding the list of the interested parties of the investigation, their
rights and obligations, (Exhibit UKR-2); see also Article 9.6 of the Safeguards Law.
453 We note in passing that the Safeguards Law also indicates, in Article 17.2, that interested parties
could submit their views to the competent authorities regarding whether application of a safeguard measures
would be in the "national interest".
454 European Union's third-party response to Panel question Nos. 9-10.
455 Letter sent on 7 March 2012 regarding the exact date and time of the hearings, (Exhibit UKR-2).
456 The evidence before the Panel does not indicate whether any interested party submitted additional
information during the public hearing and a deadline was set for other interested parties to comment on such
information. We note, however, that the European Union has stated that interested parties were given an
opportunity by the competent authorities to respond to presentations of other parties also in writing after the
public hearing. It further stated that it submitted written comments on 23 March 2012 that took into account
arguments raised by other interested parties during the public hearing; see European Union's third-party
response to Panel question No. 10.
457 We note in this respect that the letter of 18 January 2012 appears to have specifically invited Japan
to put forward any "proposals for the agenda" of the public hearing. See Letter of 18 January 2012 regarding
notification and agenda of hearings, (Exhibit UKR-2).

7.429. Japan further maintains that it received few submissions made by other parties, and that
the competent authorities failed to ensure that interested parties had an opportunity to respond to
the presentations of other parties. We have already observed that, first, Article 3.1, second
sentence, requires public hearings "or" other appropriate means in which interested parties could
present evidence, views, and responses to others' evidence and views, and that, secondly, in the
investigation at issue there was an opportunity for interested parties to make their own
presentations in the course of the public hearing and to respond to other parties' presentations
during the public hearing. As identified above, Ukraine's Safeguards Law provides additional
opportunities for participation, including the opportunity to submit written comments within 45
days after publication of the Notice. Japan asserts that, despite what is provided for in the
Safeguards Law
458, it did not receive all written submissions directly from the other parties. 459 We
note, however, that Article 9.5 of the Safeguards Law affords the possibility to interested parties to
request access to all information submitted to th e competent authorities by another interested
p a r t y . T h e r e i s n o e v i d e n c e o n r e c o r d t o s h o w t h a t J a p a n m a d e i n q u i r i e s w i t h t h e c o m p e t e n t
authorities to satisfy itself that it had received all submissions of other parties. Ukraine has stated
that it received no such request from Japan. Having opted for the public hearings route to provide
opportunities for participation, we do not agree that Ukraine was required under Article 3.1 to do
more than it did to ensure access to such written submissions.
7.430. In sum, for the reasons cited above, we are unable to accept Japan's contention that it was
prevented from presenting evidence and views in a meaningful way, and that the investigation did
not include appropriate means through which Japan and other interested parties "could present
evidence and their views, including the opportun ity to respond to the presentations of other
parties", as required by Article 3.1, second sentence.
7.8.1.3 Conclusion
7.431. In the light of the above, we conclude that Japan has failed to establish that Ukraine acted
inconsistently with Article 3.1, second sentence, by failing to provide reasonable public notice or
not providing public hearings or other appropriat e means to present evidence and views, including
an opportunity to respond to the presentations of others.
7.8.2 Claims under Article 3.1, last sentence, and Article 4.2(c)
7.432. The Panel now turns to Japan's claims under Article 3.1, last sentence, and
Article 4.2(c).
460
7.433. Japan claims that Ukraine acted inconsiste ntly with Articles 3.1 and 4.2(c). First, Japan
argues that Ukraine's Notice of 14 March 2013, i.e. the "published report", does not set forth the
competent authorities' findings and reasoned conclusions reached on all pertinent issues of fact
and law and does not contain a detailed analysis of the case as well as a demonstration of the
relevance of the factors examined with respec t to various issues, including the unforeseen
developments, the effect of the obligations incurred under the GATT 1994, the increase in imports,
the serious injury or threat of serious injury, causation, etc. Japan contends that Ukraine cannot
remedy its failure with its claim of confidentiality. Japan argues that what is confidential pursuant
to Article 3.2 is the information and not certain categories of reports, documents or analysis. In
Japan's view, a party cannot invoke Article 3.2 in relation to entire reports, documents or analysis
solely because they were issued by the author ities or designated as confidential by the
government. Referring to the panel reports in US – Steel Safeguards, Japan argues that, in any
event, neither the protection of confidential information nor Ukraine's domestic law, notably
Article 12.3 thereof, can excuse the authorities' fa ilure to comply with the obligation to provide a

458 Article 9.6 of the Safeguards Law places a legal obligation on interested parties to distribute their
submissions directly to other interested parties, and a sanction attaches to any omission to do so. Specifically,
the competent authorities are required to disregard submissions not supplied to other interested parties.
459 The European Union has stated that it received the written comments provided by other interested
parties. European Union's third-party response to Panel question No. 10.
460 For the text of Articles 3.1 and 4.2(c), see para. 7.110 above.

reasoned and adequate explanation of how the facts support their conclusions in a published
report.461
7.434. Japan further claims that Ukraine acted inco nsistently with Articles 3.1 and 4.2(c) because
it failed to publish its report and detailed analysis "promptly". Japan considers that the temporal
parameter regulating the publication obligation in Article 3.1 is the term "promptly" in
Article 4.2(c). In Japan's view, whether a publication has been made "promptly" is to be
determined by reference to the date of the conclu sion of the investigation, i.e. the date of the
determination. Japan maintains in this respect that the determination was made in the present
case on 28 April 2012. Japan thus concludes that pu blication of the competent authorities' report
in the form of a Notice one year later cannot be viewed as "prompt".
462
7.435. Ukraine contends that Japan's claims under Articles 3.1 and 4.2 (c) are not well founded.
According to Ukraine, Japan did not substantiate its claim that the Notice of 14 March 2013 was
insufficient to satisfy the requirements of the Ag reement on Safeguards. Ukraine contends that it
published a sufficiently detailed report. In Ukraine's view, the Key Findings, Notice of
14 March 2013, and its WTO notification contain a non-confidential summary of findings and
reasoned conclusions reached on all pertinent issues of fact and law concerning the application of
the safeguard measure, consistently with Articles 3.1 and 4.2(c).
463
7.436. As regards the second basis for Japan's claim, Ukraine submits that it published its detailed
analysis of the investigation promptly upon adoption of the decision on a measure. Ukraine argues
that Article 3.1 does not prescribe any deadline for the publication requirement. As regards
Article 4.2(c), Ukraine relies on the express textual link to Article 3 to argue that the obligation to
publish the report promptly under Article 4.2(c) aris es only at the time of adoption of a safeguard
measure, and not before that time. Ukraine contends that the record shows that it published its
detailed analysis "promptly" upon having decided to adopt the measure in March 2013 and before
the measure was actually applied.
464
7.437. The Panel notes that Japan submits two se parate bases in support of its claims that
Ukraine acted inconsistently with Articles 3.1 and 4.2(c). Specifically, Japan argues that these
Articles have been breached because (i) Ukraine did not publish a report setting forth the
competent authorities' findings and reasoned conc lusions, as well as a detailed analysis of the
case; and (ii) Ukraine failed to publish its report and its detailed analysis "promptly". We recall
that Japan argues that the "published report" within the meaning of Articles 3.1 and 4.2(c) is the
Notice of 14 March 2013.
465
7.438. Regarding the first of the two bases asserted by Japan, we note that Japan has discussed
this extensively in the context of its other claims concerning (i) the various determinations made
by Ukraine's competent authorities, that is to say, the competent authorities' determinations on
unforeseen developments and the effect of GATT 1994 obligations, increased imports, the threat of
serious injury and causation and (ii) the applic ation and duration of the safeguard measure at
issue. We have, likewise, addressed this first basis for Japan's claims in the sections of our
Findings addressing those other claims, as appropriate. 466 Japan has presented no different or
additional arguments in support of this aspe ct of its claim that would require separate
consideration in this section. Consequently, we do not further address this aspect of Japan's claim
here.
7.439. We therefore turn to the second basis asse rted by Japan in support of its claims, namely
Japan's contention that Ukraine has failed to publish its report and its detailed analysis "promptly".
We begin our analysis by noting that Article 3.1, last sentence, refers to a requirement to "publish"
a report setting forth the competent authorities' findings and reasoned conclusions. But it

461 Japan's first written submission, para.165; second written submission, paras. 43–45; opening
statement at the second meeting of the Panel, para 36; and response to Panel question No. 87 (referring to
Panel Reports, US – Steel Safeguards, para. 10.275).
462 Japan's second written submission, para. 49; and response to Panel question No. 31.
463 Ukraine's first written submission, para. 47; second written submission, para. 9; and response to
Panel question Nos. 10 and 27.
464 Ukraine's first written submission, para. 63; and second written submission, para. 21.
465 Japan's second written submission, para. 24.
466 See sections 7.2.3, 7.3.2, 7.4.2, 7.5.2, 7.6.2.

establishes no requirements with respect to the timing of such publication. In contrast,
Article 4.2(c) contains an express requirement to "publish promptly", "in accordance with the
provisions of Article 3", a "detailed analysis of the case under investigation as well as a
demonstration of the relevance of the factors examined". Also, whereas Article 4.2(c) thus includes
an explicit cross-reference to Article 3, the converse is not true. In our view, the cross-reference in
Article 4.2(c) to Article 3 makes it clear that the analysis and demonstration to be promptly
published under Article 4.2(c) are to be publishe d in the form of a report, as contemplated by
Article 3.1. Thus, we conclude that Article 4.2(c) requires "prompt" publication of the report
required by Article 3.1.
7.440. Article 3.1 does not explicitly require th e competent authorities to publish their report
"promptly". As the wording of Article 4.2(c) is di fferent from that of Article 3.1 also in other
respects, it is reasonable to assume that the difference in the wording of Article 4.2(c) was
intended to produce at least some different effects, including with regard to certain aspects of the
publication requirement.
467 It therefore strikes us as improper to read a word – "promptly" – into
the text of Article 3.1 that would add to, and am plify, the basic publication requirement that is
imposed in Article 3.1. As emphasized by the Appellate Body in India – Patents (US), the principles
of treaty interpretation "neither require nor condone the imputation into a treaty of words that are
not there or the importation into a treaty of concepts that were not intended". 468 We, thus, do not
agree with Japan that Article 3.1 imposes an obligation on competent authorities to publish their
report "promptly". Accordingly, we conclude that Japan has failed to establish that Ukraine acted
inconsistently with its obligations under Article 3.1, last sentence, because its competent
authorities did not publish their report "promptly".
7.441. Turning to Japan's identical claim under Article 4.2(c), we begin by considering the
triggering event that will enable us to determine whether the competent authorities published their
report, or analysis and demonstration, promptly. Article 4 is entitled "Determination of Serious
Injury or Threat Thereof", whereas Article 3, to which Article 4.2(c) refers, is entitled
"Investigation". Moreover, Article 4.2(a) indicates that an "investigation" in the sense of Article 3
serves to "determine whether increased imports have caused or are threatening to cause serious
injury to a domestic industry …". Thus, unless terminated or suspended, the investigation
culminates in a determination of whether serious injury or threat thereof has been caused by
increased imports.
7.442. As noted, Article 4.2(c) refers to the requirement in Article 3.1, last sentence, that the
competent authorities publish a report that provides the findings and reasoned conclusions
reached on "all pertinent issues of fact and law". Since Article 3 is entitled "Investigation", the
phrase "all pertinent issues of fact and law" in our view includes all issues of fact and law that are
pertinent to the investigation undertaken by the competent authorities. This unquestionably
includes those issues that the competent authorities must address to arrive at the determination
referred to in Article 4.2(a).
7.443. If the competent authorities determine that the relevant conditions and circumstances are
satisfied, they may decide to apply a safeguard measure. If they decide to apply a safeguard
measure, they need to establish parameters such as the date of introduction of the measure, its
form and level (i.e. the rate of duty in the even t the measure takes the form of a duty, as in the
present dispute), and its expected duration. Articl es 5.1 and 7.1 of the Agreement on Safeguards
stipulate in this regard that the competent auth orities may apply a safeguard measure only to the
extent and for such period of time as may be "n ecessary" to prevent or remedy serious injury and
to facilitate adjustment. The question arises whether the rate of duty and the expected duration
are issues on which the competent authorities' report must include findings and reasoned
conclusions, or a detailed analysis and demonstration. We find instructive in this context the
following observations of the Appellate Body in US – Line Pipe:

467 We consider that this view that Article 4.2(c) adds to rather than simply restates Article 3.1, last
sentence, is consistent with the statement of the Appellate Body to the effect that Article 4.2(c) is an
elaboration of the requirement set out in Article 3.1, last sentence, to provide a "reasoned conclusion" in a
published report. See Appellate Body Report, US – Steel Safeguards, para. 289.
468 Appellate Body Report, India – Patents (US), para. 45.

It is clear, therefore, that, apart from on e exception, Article 5.1, including the first
sentence, does not oblige a Member to justify, at the time of application, that the
safeguard measure at issue is applied "only to the extent necessary". The exception
we identified in Korea – Dairy lies in the second sentence of Article 5.1. That exception
concerns safeguard measures in the form of quantitative restrictions, which reduce
the quantity of imports below the average of imports in the last three representative
years. That exception does not apply to the line pipe measure.
…
This does not imply, as Korea seems to assert, that the measure may be devoid of
justification or that the multilateral verification of the consistency of the measure with
the Agreement on Safeguards is impeded. The Member imposing a safeguard measure
must, in any event, meet several obligations under the Agreement on Safeguards .
And, meeting those obligations should have the effect of clearly explaining and
"justifying" the extent of the applicat ion of the measure. By separating and
distinguishing the injurious effects of factors other than increased imports from those
caused by increased imports, as required by Article 4.2(b), and by including this
detailed analysis in the report that sets forth the findings and reasoned conclusions,
as required by Articles 3.1 and 4.2(c), a Member proposing to apply a safeguard
measure should provide sufficient motivation for that measure. Compliance with
Articles 3.1, 4.2(b) and 4.2(c) of the Agreement on Safeguards s h o u l d h a v e t h e
incidental effect of providing sufficient "justification" for a measure and … should also
provide a benchmark against which the permissible extent of the measure should be
determined.
469
7.444. We understand and conclude from this statement that the report that a Member must
publish under Articles 3.1 and 4.2(c) need not ad dress whether the established rate of duty and
expected duration of the measure are "necessa ry" within the meaning of Articles 5 and 7. 470 That
being the case, even if in some Members' legal system the decision to apply a safeguard measure
is customarily taken sometime after the determination referred to in Article 4.2(a), there is no
need to delay the publication of the report until the decision to apply a safeguard measure has
been made and its form and level, expected du ration and date of introduction have been
established.
7.445. In the light of the foregoing, we consid er that the competent authorities' report, or
analysis and demonstration, must be promptly published once the competent authorities have
made the determination referred to in Article 4.2(a), that is to say once they have made a
determination of serious injury or threat thereof caused by increased imports. We thus consider
that whether a Member "promptly" published its report, or analysis and demonstration, has to be
examined by reference to when the aforementioned determination was made.
7.446. We now turn to the concept of "promptness" in Article 4.2(c). The dictionary defines the
word "prompt" as "quick; and without delay".
471 Accordingly, Article 4.2(c) requires that the
relevant report, or analysis and demonstration, be published quickly and without delay, once the
relevant determination has been made. Nevertheless, the assessment of whether a report has
been published promptly must, in our view, be ma de on a case-specific basis, taking account of
the circumstances of the dispute.
7.447. Turning to the facts of this dispute, we recall that Japan's claim concerns the Notice of
14 March 2013, and that we agree that the Notice is the type of report, or analysis and
demonstration, that Ukraine was required to publish "promptly". The Notice was published in the
official gazette on 14 March 2013. However, as confirmed by Ukraine, the investigation in this case

469 Appellate Body Report, US – Line Pipe, paras. 233 and 236.
470 The Appellate Body in the quoted statement was referring only to Article 5.1, not Article 7.1.
However, we consider that the Appellate Body's considerations can also be extended, by analogy, to
Article 7.1.
471 The Shorter Oxford Dictionary (2007), Vol. 2, p. 2367. See also Panel Reports, EC – IT Products,
para. 7.1074 (interpreting the word "promptly" in Article X:1 of the GATT 1994 as meaning "[i]n a prompt
manner; readily, quickly; at once, without delay; directly, forthwith, there and then").

was concluded on 28 April 2012. 472 Moreover, as we explain below 473, the competent authorities
made a determination of threat of serious inju ry caused by increased imports on 28 April 2012.
The date of introduction, and also the proposed form and level (increased rates of duty) and
expected duration of the safeguard measur e, were only established on 14 March 2013. 474 As we
have explained, in our view these subsequent acti ons did not warrant a delay in publication of the
competent authorities' report. Furthermore, as noted below at paragraph 7.453, Ukraine argues
that after making its finding on 28 April 2012, it held consultations with various exporting
countries. However, Ukraine has not argued, and we do not consider, that such consultations
affected the competent authorities' ability to publish their report quickly and without delay after
having made the determination referred to in Article 4.2(a).
475 In the light of this, we consider that
since the competent authorities published their report in this case almost 11 months after the
determination of 28 April 2012, they failed to publish their report, or analysis and demonstration,
"promptly".
7.448. We therefore conclude that Ukraine ac ted inconsistently with its obligations under
Article 4.2(c) because it did not publish its report, or analysis and demonstration, "promptly".
7.8.3 Claim under Article 3.1, first sentence
7.449. We now address Japan's claim under Article 3.1, first sentence, which concerns whether
Ukraine failed to make a proper investigation. Article 3.1, first sentence, provides as follows:
A Member may apply a safeguard measure only following an investigation by the
competent authorities of that Member pursuant to procedures previously established
and made public in consonance with Article X of GATT 1994.
7.450. Japan claims that Ukraine acted inconsistently with Article 3.1 because it failed to make a
"careful study", and in particular because it di d not examine data for the period 2011–2012. In
interpreting the term "investigation", Japan, relying on the Appellate Body Report in US – Wheat
Gluten, contends that the ordinary meaning of the word "investigation" suggests that the
competent authorities should carry out a "systematic inquiry" or a "careful study" into the matter
before them and that authorities charged with conducting an inquiry or a study, i.e. an
"investigation", must actively seek out pertinent information.
476 According to Japan, there is an
obligation to seek out pertinent information abou t the "recent past". Japan contends that this
obligation flows from the interpretation of the term "investigation" in the light of its context, in
particular Articles 2.1 and 4.2, and the object and purpose of the Agreement on Safeguards, as
well as the urgent nature of the safeguard meas ures contemplated in the Agreement. In Japan's
view, safeguard measures should logically be applied immediately after the conclusion of an
investigation finding serious injury or a threat thereof caused by increased imports because of the
emergency nature of safeguard measures. According to Japan, a significant delay in applying a
safeguard measure requires an update of the data.
477
7.451. Regarding the investigation at issue, Japa n submits that Ukraine failed to carry out an
investigation as required by Article 3.1 because it failed to seek out pertinent information, in
particular data for the period 2011–2012, which is the most recent period given that the safeguard
measure was applied in April 2013. Japan observes that the safeguard measure at issue was
applied more than two years after the end of the period of investigation (2008–2010). Japan
maintains that a two-year gap between the end of the period of investigation and what it considers
to be the date of imposition of the safeguard me asure is clearly excessive and that this excessive
delay cannot be justified by any efforts on the part of Ukraine to conduct negotiations with

472 Ukraine's response to Panel question No. 124.
473 See para. 7.487 below.
474 See, e.g. paras. 7.497 and 7.499 below.
475 In our view, such consultations might have affected the date of introduction, the form, the level or
the expected duration of the safeguard measure ultimately applied. As we have noted, however, the competent
authorities' report did not need to set forth reasoned conclusions or provide a detailed analysis on these
aspects.
476 Appellate Body Report, US – Wheat Gluten, paras. 53-54.
477 Japan's first written submission, paras. 151 and 162; second written submission, paras. 50, 52, 54,
64 and 123; opening statement at the second meeting of the Panel, para. 34; and response to Panel question
Nos. 30 and 47.

exporting countries. Japan argues that the fact that the competent authorities examined additional
data from the first half of 2011 regarding "certain factors" does not imply that the period of
investigation was extended so as to also include the first half of 2011. According to Japan, the
Notice of 14 March 2013 does not include any analys is relating to the first half of 2011; and even
in the Key Findings, the competent authorities only examined one factor from the first half of
2011, namely the ratio of imports in relation to domestic production.
478
7.452. Ukraine responds that the authorities conducted the investigation in accordance with the
limited obligations of Article 3.1. Ukraine disagrees with Japan's interpretation that the competent
authorities should have continued to update the information even after the end of the investigation
and argues that such interpretation is not supported by the text of the Agreement on Safeguards
and must be rejected. In Ukraine's view, there is no requirement under the Agreement on
Safeguards to continue to update the information following the end of the period of investigation
and certainly not following the end of the investigation. Ukraine argues that nothing in the
Agreement on Safeguards requires that the application of the measure must follow the termination
of the investigation immediately or within a certain period of time. According to Ukraine, when a
Member is to impose a safeguard measure is a matter that does not concern the "investigation"
but only the application of the safeguard measure. Ukraine maintains that the time gap between
the end of the investigation and the imposition of a safeguard measure is not determined by the
Agreement on Safeguards, and that the time gap is therefore for a Member to decide upon.
479
7.453. Regarding the investigation at issue, Ukraine argues that its investigation took into account
all of the data relating to the period of investigation and that it updated this information with more
recent information that was available before the investigation was concluded. Ukraine contends
that it set the period of investigation as 2008 through 2010 when it initiated the safeguard
investigation on 2 July 2011 and carefully invest igated the information concerning this period.
Ukraine notes that its competent authorities in the Key Findings also presented some more recent
data for the first half of 2011, particularly concer ning the further increase in import volumes in
relative terms, that was available before the initiation of the investigation. Ukraine considers,
however, that the competent authorities are not obliged to review data outside the period of
investigation as asserted by Japan. Ukraine submits that Japan is in fact complaining that there
was a gap between the date of the termination of the investigation and the date of application of
the measure. Ukraine argues that the time gap in this case was not the result of an arbitrary
decision of the competent authorities, but was caused by the need to exchange views with
exporting countries, particularly the European Union, Japan, the Russian Federation, and the
Republic of Korea.
480
7.454. The Panel notes that Japan's claim arises from the fact that Ukraine relied on data
concerning a period of investigation ending more than one year before the finding of threat of
serious injury caused by increased imports and two years before its introduction. We have already
concluded above, however, that Ukraine's determination of increased imports does not meet the
requirements of Article 2.1, inter alia because it is not based on an increase of imports that was
recent enough. Therefore, we see no need to make findings on whether Ukraine also acted
inconsistently with Article 3.1, first sentence, because it did not seek out pertinent information
about the most recent past, in particular information about the period 2011–2012. We
consequently exercise judicial economy and make no findings with regard to this claim.
7.9 Claims relating to notifications, prior consultations, and the level of concessions
7.455. The Panel notes that Japan put forward various claims under Article 12 relating to
Ukraine's obligations concerning notifications to the WTO and prior consultations with other
Members as well as a claim under Article 8 relating to the obligation to endeavour to maintain a
substantially equivalent level of concessions and other obligations.

478 Japan's first written submission, para. 162; second written submission, paras. 50 and 62; opening
statement at the second meeting of the Panel, para. 35; and response to Panel question Nos. 24 and 30.
479 Ukraine's first written submission, paras. 58 and 60; opening statement at the first meeting of the
Panel, para. 30; second written submission, paras. 12-15; opening statement at the second meeting of the
Panel, para. 12; and response to Panel question No. 3.
480 Ukraine's first written submission, paras. 56-58, and 60; opening statement at the first meeting of
the Panel, paras. 28-30; second written submission, paras. 11-15; opening statement at the second meeting of
the Panel, para. 11; and response to Panel question No. 3.

7.9.1 Claims under Article 12.1
7.456. The Panel first turns to assess Japan's claims regarding Ukraine's alleged failure to comply
with the notification requirements set out in Article 12.1, which provides as follows:
A Member shall immediately notify the Committee on Safeguards upon:
(a) initiating an investigatory process relating to serious injury or threat thereof and
the reasons for it;
(b) making a finding of serious injury or threat thereof caused by increased
imports; and
(c) taking a decision to apply or extend a safeguard measure.
7.457. Japan claims that Ukraine acted inconsistently with its obligation to notify "immediately"
upon initiating a safeguard investigation pursuant to Article 12.1(a). 481 Japan further claims that
Ukraine acted inconsistently with its obligation under Article 12.1(b) to notify "immediately" upon
making a finding of serious injury or threat thereof, as well as its obligation under Article 12.1(c)
to notify "immediately" upon taking a decision to apply a safeguard measure.
482
7.458. Ukraine submits that its notifications to the WTO were timely and should therefore be
found to be consistent with its WTO obligations. Ukraine therefore argues that Japan's claims
under Articles 12.1 must fail.
483
7.459. The Panel will first address some general interpretative issues concerning Article 12.1.
After that, Japan's claims will be addressed in order they are presented.
7.9.1.1 Notification requirements under Article 12.1
7.460. Article 12.1 requires WTO Members to notify the Committee on Safeguards upon the
occurrence of the "events"
484 specified in the subparagraphs of this provision, namely, (i) initiating
an investigatory process, (ii) making a finding of serious injury or threat thereof, and (iii) taking a
decision to apply or extend a safeguard measure.
485
7.461. Article 12.1 requires that these notifica tions be made "immediatel y" upon the occurrence
of the specified events. The word "immediately" is defined as "most urgent; occurring or taking
effect without delay; done at once". 486 The Appellate Body in US – Wheat Gluten stated that the
word "immediately" "implies a certain urgency" and that the degree of urgency required depends
on a case-by-case assessment, account being taken of the administrative difficulties involved in
preparing the notification and the character of the information supplied. The Appellate Body
clarified in particular that relevant factors in assessing the degree of urgency may include the
complexity of the notification to be made and the need for translation into one of the WTO's official
languages. However, the Appellate Body has cautioned that the amount of time taken to prepare
and submit a notification must, in all cases, be kept to a minimum, as the underlying obligation is
to notify "immediately".
487
7.462. Finally, the Appellate Body has also stated that an "'immediate" notification is that which
allows the Committee on Safeguards, and Members, the fullest possible period to reflect upon and

481 Japan's first written submission, paras. 326-330; second written submission, paras. 255-257; and
opening statement at the second meeting of the Panel, para. 61.
482 Japan's first written submission, para. 335; second written submission, para. 258; and opening
statement at the second meeting of the Panel, para. 61.
483 Ukraine's first written submission, para. 232; opening statement at the first meeting of the Panel,
para. 89; second written submission, para. 91; and opening statement at the second meeting of the Panel,
para. 102.
484 Appellate Body Report, US – Wheat Gluten, para 102.
485 Ibid.
486 The Shorter Oxford Dictionary (2007), Vol 1, p. 1330.
487 Appellate Body Report, US – Wheat Gluten, para. 105.

react to an ongoing safeguard investigation. 488 This suggests that a determination of whether a
notification was "immediate" does not require consideration of whether the Committee or Members
received the notification early enough to still allow them in fact to reflect on, or react to, it.489
7.463. As regards the events described in the three subparagraphs of Article 12.1, we note that
they reflect a logical sequence in the internal de cision-making process preceding the application of
a safeguard measure: first initiation, then making a determination on the conditions that must be
satisfied before a safeguard measure may be applied, and finally the decision to apply or extend a
safeguard measure. We note that the final step in the process envisaged by Article 12.1 – the
taking of a decision to apply – may in the legal system of some Members coincide with the second
step.
490 In the system of other Members, it may come after the second step.491
7.464. In the case of Members whose internal decision-making process provides for a gap
between, on the one hand, a finding of serious in jury or threat thereof caused by increased
imports and, on the other hand, the decision to apply a safeguard measure, the relevant events
may, of course, be notified separately and su ccessively. In the case of Members where these
events occur at the same time, nothing prec ludes notification of the relevant events
simultaneously, whether in a single or separate notifications.
7.465. To assess whether or not a notification under Article 12.1 was "immediate", it is necessary
to establish both the date on which the relevant triggering event occurred and the date of the
notification. The latter is generally taken to correspond to the date on which the notification was
sent to the Committee on Safeguards, but the position is less clear with regard to the former. An
issue may arise as to whether the Panel should assess the immediacy of the notifications under
Article 12.1 by reference to: (i) the date of adoption of the relevant decision on the action
concerned (i.e. the decision to initiate, the decision to make a finding or the decision to apply or
extend a safeguard measure), (ii) the date of publication of that decision, or (iii) the entry into
force of that decision. We observe in this regard that in some domestic legal systems, for some
relevant actions and in some situations, some or all of these dates may coincide, such that there
may be no need to distinguish between these dates.
7.9.1.1.1 Claim under Article 12.1(a)
7.466. The Panel will now assess Japan's claim under Article 12.1(a).
7.467. Japan asserts that by notifying the Commi ttee on Safeguards of the initiation of the
investigation 11 days after publication of the initiation decision notice in the Official Journal,
Ukraine failed to comply with the requirement of "immediate" notification, in particular in the light
of the minimal information contained in the notification.
492
7.468. Ukraine argues that its notification of th e initiation of the investigation was "immediate"
given that the working language of Ukraine is not one of the WTO working languages. Ukraine
notes that it took the decision to initiate the investigation on 30 June 2011, published that decision
on 2 July 2011, and notified the WTO on 13 July 2011, that is to say, 11 days after the publication
of that decision.
493 Ukraine points out that in the US – Wheat Gluten dispute, the notification under
Article 12.1(a) was made 16 days after publication of the decision to initiate investigation, which

488 Ibid. para. 106.
489 Ibid.
490 The European Union appears to fall within this category (European Union's third-party response to
Panel question No. 27).
491 This may be because, for instance, there are different decision-makers entrusted with determining (i)
whether the substantive conditions for application of a safeguard have been satisfied and (ii) whether the
application of a safeguard measure is warranted. Australia and the United States appear to fall within this
second general category (Australia's and the United States' third party responses to Panel question No. 27).
See also Panel Report, Dominican Republic – Safeguard Measures, footnote 516.
492 Japan's first written submission, paras. 327 and 330; second written submission, paras. 255-257;
opening statement at the second meeting of the Panel, para. 61.
493 Ukraine's first written submission, para. 225.

was found not to be "immediate". Ukraine notes in this connection that the United States'
investigating authority works and publishes in a WTO working language.494
7.469. Ukraine submits that the timeliness of a notification under Article 12.1 is to be determined
on a case-by-case basis after assessing all factors influencing the time to respond. Ukraine argues
that the case-by-case nature of the assessment deri ves from the fact that no specific time period
is mentioned in Article 12 to explain the term "immediately". Ukraine submits that in this case, the
fact that the official language of the investigating authority is not one of the three official working
languages of the WTO is reason to provide flexibility to Members.
495
7.470. Ukraine submits that the key date for determining the timeliness of a notification under
Article 12.1(a) is the date of publication of the relevant decision. 496 Ukraine refers to the Appellate
Body report in US – Wheat Gluten that used the date of publication as the relevant reference.497
7.471. Japan responds that translation issues cannot justify the 11-day delay in the notification,
in particular in the light of "the character of the information supplied". Japan submits in this
respect that the need to translate a document of only 604 words into one of the WTO's languages
cannot justify a delay of 11 days in view of the obligation to limit the amount of time taken to
prepare a notification under Article 12.1 to a "minimum".
498
7.472. Japan points in this regard to the report in Korea – Dairy, where the panel concluded that
a delay of 14 days between the publication of the decision on initiation and its notification to the
WTO was not "immediate" notification and was therefore inconsistent with Article 12.1. Japan
highlights that in that case the language of the decision, Korean, was also not a WTO working
language.
499
7.473. The Panel observes that it is common gr ound that Ukraine made a notification to the
Committee on Safeguards regarding the initiation of its safeguards investigation. The parties
disagree, however, over whether Ukraine's notification was "immediate". On 30 June 2011,
Ukraine took Decision No. SP–259/2011/4402-27 "On Initiation of the Safeguard Investigation on
Import of Motor Cars to Ukraine Regardless of Country of Origin and Export".
500 On 2 July 2011,
Ukraine published the "Notice of Initiation and Conducting of the Safeguard Investigation on
Import of Motor Cars to Ukraine Regardless of Country of Origin and Export" in the Uryadovyi
Kuryer, which made reference to the decision to initiate the safeguard investigation and
established that it would enter into force on the date of publication of the notice. 501 Ukraine
notified the Committee on Safeguards of the in itiation of the investigation on 13 July 2011. 502 We
note that in its notification, Ukraine points to 2 July 2011 as the date of initiation of the
investigation.503
7.474. The parties agree that for purposes of Ar ticle 12.1(a) the date on which an investigatory
process is considered to have been "initiated" is the date of publication of the decision to
initiate.504 The Appellate Body in US – Wheat Gluten used the date of publication for determining
whether a delay in notifying the initiation of a safeguard investigation meant that the notification

494 Ukraine's first written submission, para. 225 (referring to Appellate Body Report, US – Wheat
Gluten); opening statement at the second meeting of the Panel, para. 84; second written submission, para. 86.
495 Ukraine's first written submission, paras. 218-219 (referring to Appellate Body Report, Korea –
Dairy, para. 7.128); second written submission, para. 83; and opening statement at the second meeting of the
Panel, para. 61.
496 Ukraine's first written submission, para. 214; second written submission, paras. 255-257; and
opening statement at the second meeting of the Panel, para. 61.
497 Ukraine's first written submission, para. 214 (referring to Appellate Body Report, US – Wheat Gluten,
para. 111).
498 Japan's second written submission, para. 256 (referring to Appellate Body Report, US – Wheat
Gluten, para. 105).
499 Japan's second written submission, para. 257 (referring to Panel Report, Korea – Dairy, para. 7.134).
500 Ukraine's first written submission, para. 208; and second written submission, para. 86.
501 Exhibit JPN-3.
502 Notification under Article 12.1(A) of the Agreement on Safeguards on Initiation of an Investigation
and the Reasons for it, WTO document G/SG/N/6/UKR/9 (Exhibit JPN-4).
503 Exhibit JPN-4, p. 2.
504 Ukraine's first written submission, para. 214; and Japan's response to Panel question No. 106.

was not immediate. 505 We therefore use the date of publication as the relevant date for
determining whether a notification to the Committee on Safeguards of the initiation of a
safeguards investigation was "immediate" within the meaning of Article 12.1. Thus, the question
before us is whether a notification made 11 days after the publication on 2 July 2011 can be
considered "immediate" within the meaning of Article 12.1(a).
7.475. We recall that Ukraine's investigation was not conducted in a WTO working language, and
the published notice was also not in a WTO working language.
506 However, Ukraine's notification
addresses only five elements: the initiation date of the investigation; the products subject to the
investigation; the reasons for initiating the investigation; the contact point; and the deadlines and
procedures for parties to present evidence.
507 None of these elements is unusual or complicated,
and the notice does not contain any particularly complex information. The document is less than
two pages long and contains approximately 600 words. It therefore seems to us that translation in
this instance should not have been a time-consuming process. 508 Thus, in our view, neither the
nature of the information nor the length of the document justify a translation delay of 11 days.
7.476. As Ukraine has not posited any other justification for the 11-day period between
publication of the Notice of Initiation and its notification under Article 12.1(a) in this case, we
consider that the notification was not "immediate" and therefore conclude that Ukraine acted
inconsistently with Article 12.1(a) in this regard.
7.9.1.1.2 Claims under Articles 12.1(b) and (c)
7.477. The Panel now turns to assess Japan's claims under Articles 12.1(b) and (c).
7.478. Japan asserts that Ukraine acted inconsistently with its obligation to notify "immediately"
upon making a finding of a serious injury or threat thereof pursuant to Article 12.1(b), and
"immediately" upon taking a decision to apply a safeguard measure pursuant to Article 12.1(c).
509
Japan argues that in US – Wheat Gluten , the Appellate Body found that the relevant triggering
event in the context of Article 12.1(c) is the taking of a decision, and that this provision focuses on
whether a decision has occurred or has been taken, and not on whether that decision has been
given effect.
510 Japan submits that this same analysis is applicable to Article 12.1(b), as this
provision focuses on whether a finding of serious injury or threat of serious injury has been
made.511
7.479. Japan submits that in the present case, Ukraine took the decision to apply a safeguard
measure on 28 April 2012, published its decision on 14 March 2013 and notified the Committee on
Safeguards on 21 March 2013. Japan argues that si nce the triggering event is the taking of the
decision, which took place on 28 April 2012, the no tification was made almost one year after the
taking of the decision and is therefore inconsis tent with the requirements of Articles 12.1(b)
and (c).512
7.480. Ukraine responds that according to th e Appellate Body, the triggering event under
Article 12.1(c) is the date when the decision becomes official and not when it enters into force. 513

505 Appellate Body Report, US – Wheat Gluten, para. 111, stating that "[t]he USITC notice was
published in the United States Federal Register on 1 October 1997 [and] not notified to the Committee on
Safeguards until 17 October 1997". See also Panel Report in Korea – Dairy, para. 7.134. Panel Report in US –
Wheat Gluten, para. 8.196 and footnote 182. Appellate Body Report, US – Wheat Gluten, paras. 111-112.
506 According to Article 3 of Ukraine's Safeguards Law, "the investigations shall be performed in the
state language of Ukraine" (Exhibit JPN-1).
507 Exhibit JPN-4.
508 We note in this regard that Ukraine has not brought to our attention any significant constraints on its
ability to translate the notification from Ukrainian to a WTO working language, which might have affected our
assessment.
509 Japan's first written submission, para. 335; and second written submission, para. 258.
510 Japan's first written submission, para. 333; and second written submission para. 263 (referring to
the Appellate Body Report, US – Wheat Gluten, para. 120).
511 Japan's first written submission, para. 334; and second written submission, para. 265.
512 Japan's first written submission, para. 335; and second written submission, para. 267.
513 Ukraine's first written submission, para. 216 (referring to Appellate Body Report, US – Wheat Gluten,
para. 120).

Ukraine also submits that it follows from the panel report in Dominican Republic – Safeguard
Measures and from statements of the Appellate Body in US – Wheat Gluten that the key obligation
regarding a definitive measure is that it is notified prior to its entry into force. Ukraine argues that
in its view the date of publication is key in considering the timeliness of a notification.
514
7.481. Ukraine considers that 28 April 2012 cannot be viewed as the date of the taking of a
decision to apply a safeguard measure. Ukraine asserts that the relevant decision is a document
for internal use, and it cannot be considered as an appropriate legal document until its official
publication. Ukraine therefore submits that it is the publication of the notice that is the key date
for purposes of the timeliness of Ukraine's notifications under Articles 12.1(b) and (c).
515 Ukraine
submits that since the triggering event occurre d on 14 March 2013 and the notifications to the
Committee on Safeguards were made on 21 March 2013, only seven days later, the notifications
were "immediate"516 and therefore consistent with Articles 12.1(b) and (c).517
7.482. Japan does not agree with Ukraine's assertion that the relevant triggering event under
Article 12.1 is the date of publication or "when the decision becomes 'official'". 518 Japan asserts
that Ukraine's view is not supported by the text of Article 12.1 and is based on an erroneous
reading of the Appellate Body's findings in US – Wheat Gluten .519 Japan considers that Ukraine's
argument that the relevant triggering event for th e purposes of Article 12.1(c) must also be the
"date of publication" is contrary to the text of Article 12.1 and the intention of the drafters, since
the different triggering events under Articles 12.1(a) and 12.1(c) reflect a substantive difference in
the position of the WTO Members and their consequences.
520 Japan also does not agree that "the
key obligation regarding the notification of a definitive measure is that it is notified prior to entry
into force". Japan notes in this context that the Appellate Body emphasized that "the timeliness of
a notification under Article 12.1(c) depends only on whether the notification was immediate".521
7.483. Japan also submits, in the alternative, that if the Panel were to conclude that the relevant
triggering event is the "publication" on 14 Marc h 2013, then a delay of seven days between the
date of publication and the date of notification does not comply with the requirement of
"immediacy", in particular taking into account the very long delay between the actual taking of the
decision on 28 April 2012 and its publication on 14 March 2013. Japan claims that administrative
difficulties, such as translation into a working language of the WTO, cannot be invoked as a
justification for a delay of almost a year between the taking of the decision and its publication in
the Official Journal.
522
7.9.1.1.2.1 Notification under Article 12.1(b)
7.484. The Panel begins with the notification under Article 12.1(b). It is common ground that
Ukraine made a notification to the Committee on Safeguards after making a finding on injury or
threat thereof caused by increased imports. The parties disagree, however, whether that
notification was "immediate". Ukraine notified the making of a finding of serious injury or threat
thereof to the Committee on 21 March 2013.
523 This was a joint notification under Articles 12.1(b)
and (c), concerning both the finding of threat of serious injury and the application of the safeguard
measure.

514 Ukraine's first written submission, paras. 216-217; second written submission, para. 83; and
opening statement at the first meeting of the Panel, para. 81 (referring to Appellate Body Report, US – Wheat
515 Ukraine's first written submission, paras. 226-227; second written submission, paras. 87-88; and
response to Panel question No. 128.
516 Ukraine's first written submission, para. 228; opening statement at the first meeting of the Panel,
para. 88; second written submission, para. 89; and opening statement at the second meeting of the Panel,
para. 101.
517 Ukraine's first written submission, paras. 228 and 232; and second written submission, para. 91.
518 Japan's second written submission, para. 260 (referring to Ukraine's first written submission,
para. 216).
519 Japan's opening statement at the first meeting of the Panel, paras. 100-101; and second written
submission, para. 260.
520 Japan's second written submission, paras. 261-262; and response to Panel question No. 106.
521 Japan's second written submission, para. 266 (referring to Appellate Body Report, US – Wheat
Gluten, para. 120).
522 Japan's second written submission, para. 268.
523 WTO document G/SG/N/8/UKR/3, G/SG/N/10/UKR/3, G/SG/N/11/UKR/1 (Exhibit JPN-7).

7.485. The notification refers to the Notice of 14 March 2013 concerning the Decision of
28 April 2012 of the Interdepartmental Commission on Foreign Trade No. SP-275/2012/4423-08,
which according to item 9 of the noti fication, was published on 14 March 2013.
524 The notification
also states that the introduction of the measure was to occur 30 days after publication of the
Notice of Imposition on 14 March 2013.
7.486. The Notice of 14 March 2013 states that the Commission "has decided that import of motor
cars to Ukraine […] increased relative to domestic production by the domestic industry, and that
such increase took place under conditions and volumes which threatened to cause serious injury to
the domestic industry" and that "the national interests of Ukraine require imposition of safeguard
measures against such imports".
525 Thus, it is clear from the Notice of 14 March 2013 that the
Commission "[made] a finding of [threat of] serious injury … caused by increased imports" within
the meaning of Article 12.1(b). The text of th e 28 April 2012 decision was not submitted to the
Panel. The Notice of 14 March 2013 indicates that the Commission decided to impose a safeguard
measure based on the decision and underlying findings adopted on 28 April 2012.
7.487. After referring to, and endorsing, the findings in the Commission's 28 April 2012 decision,
the Notice of 14 March 2013 goes on to state that a safeguard measure "shall be imposed" in the
form of a special duty, and specifies the applic able rates of duty and the duration of the
measure.
526 The Notice of 14 March 2013 states that this decision is to enter into force 30 days
after publication of the Notice. As already mentioned, it was not published until much later after
the decision of 28 April 2012 was taken, this is, on 14 March 2013.
7.488. We note that the Notice of 14 March 2013 incorporates and endorses but does not modify
or supersede the finding of threat of serious injury caused by increased imports made on
28 April 2012. The only new element evident from the Notice of 14 March 2013 in respect of the
28 April 2012 finding is the publication of the Co mmission's decision. Indeed, neither party has
suggested that the Commission's finding of 28 April 2012 was merely preliminary or incomplete.
Moreover, the fact that the finding of 28 April 2012 was part of the Notice of 14 March 2013, which
contains other findings and is broader in scope, does not detract from the fact that the Notice of
14 March 2013, at a minimum, incorporates the relevant finding.
7.489. On these facts, we find that the competent authorities on 28 April 2012 adopted a decision
making a finding of threat of serious injury ca used by increased imports within the meaning of
Article 12.1(b). The decision that contained this finding was not published, however, until
14 March 2013, and the decision to apply a safeguard based on that finding only entered into force
one month later.
7.490. The issue to which we now turn our attention is which of these dates – the date of
adoption or publication of the finding of threat of serious injury caused by increased imports, or
the date of entry into force of that finding through the application of a safeguard based on it – is
the relevant triggering date for purposes of assessing whether Ukraine's notification under
Article 12.1(b) was "immediate".
7.491. The context of Article 12.1 suggests that we should not base our assessment on the date
of entry into force of the finding. Article 12.3 requires the Member "proposing to apply" a
safeguard measure to grant adequate opportunity for "prior" consultations. It follows from this
requirement in Article 12.3 that these consulta tions need to take place before a safeguard
measure is applied, i.e. before a finding of thre at of serious injury enters into force through
application of a safeguard measure. Article 12.3 also states that the consultations serve, inter alia,
to allow exporting Members to review the information provided under Article 12.2. That provision
identifies information to be included in notifications, inter alia, "evidence of serious injury or threat
thereof caused by imports", that is, evidence supp orting the finding referred to in Article 12.1(b).
All of this indicates to us that the notification under Article 12.1(b) must also precede the date of
entry into force of the finding referred to in that provision.

524 Exhibit JPN-7, p. 5.
525 Notice of Imposition of Safeguard Measures on Imports of Motor Cars to Ukraine Regardless of
Country of Origin and Export, (Exhibit JPN-2), pp. 3-4.
526 Exhibit JPN-2, p. 9.

7.492. In this case there was a gap of more than ten months between the date of adoption of the
finding of serious injury caused by increased impo rts and the date of publication of that decision.
Moreover, the record indicates that there was no intervening change to the substance of the
finding at issue, nor was there any supplementary in vestigation after the date of adoption of that
finding. We note that Ukraine's Safeguards Law does not appear to provide for separate
publication of this finding 527, and that the finding on 28 April 2012 may have been an internal
decision without the status of a legal norm under Ukrainian law. However, neither consideration
demonstrates that WTO rules, specifically those set forth in Article 12.1(b), do not require a
Member to notify a finding of threat of serious injury immediately after the relevant finding is
made, in this case by Ukraine's competent authorities on 28 April 2012.
7.493. For all these reasons, we consider that, in the circumstances of this case, a finding of
threat of serious injury was made on 28 April 2012. That finding was neither preliminary nor
incomplete, and the decision to make that finding was not altered, rescinded or suspended after
28 April 2012. Ukraine was therefore required by Arti cle 12.1(b) to notify this finding immediately
after it was made, regardless of the provisions of Ukraine's Safeguards Law or the fact that it was
not separately published.
7.494. Having found that in the circumstances of this case the event triggering the obligation
under Article 12.1(b) occurred on 28 April 2012, we must assess whether Ukraine's notification
under Article 12.1(b) of 21 March 2013 was "immediate". We recall that more than ten months
passed after the competent authorities made the re levant finding and before submission of the
notification to the Committee on Safeguards. Even factoring in the undisputed need for translation
and the fact that the notification under Article 12.1(b) was more technical than the notification
under Article 12.1(a), the notification is only four pages long and counts just over 1,800 words, its
translation could not therefore have required several months. Ukraine has not made any argument
to that effect. As Ukraine has not pointed to any other circumstances to be taken into
consideration, it clear to us in view of the substantial delay that Ukraine in this instance did not
proceed with the required degree of urgency and failed to keep the delay in notifying the
Committee on Safeguards to a minimum. We therefore conclude that Ukraine did not notify the
Committee on Safeguards immediatel y upon making the finding referred to in Article 12.1(b) and
that it consequently acted inconsistently with Article 12.1(b).
7.9.1.1.2.2 Notification under Article 12.1(c)
7.495. The Panel observes that it is common gr ound that Ukraine made a notification to the
Committee on Safeguards after taking the decision to apply a safeguard measure, but again, the
parties disagree whether Ukraine's notification under Article 12.1(c) was "immediate". As noted
above, Ukraine made a joint notification under Articles 12.1(b) and (c) on 21 March 2013.
528 The
notification refers to the Notice of 14 March 2013 and states that the introduction of the measure
will occur 30 days after publication of the Notice.
7.496. As also noted above, the Notice of 14 March 2013 incorporates the Commission decision of
28 April 2012, and describes the decision of 28 April 2012 as the decision "according to which
safeguard measures were imposed".529 The Notice of 14 March 2013 mentions that the decision of
28 April 2012 was taken pursuant to Article 16 of Ukraine's Safeguards Law. According to
Article 16(3)of that Law, a Commission decision on application of a safeguard measure must
contain, inter alia, the duration of a measure and the date of its entry into force:
The decision of the Commission on application of the safeguard measures shall contain
the information on:

527 This inference also appears to be confirmed by the fact that the finding was published only on
14 March 2013, as part of the Notice of the same date.
528 WTO document G/SG/N/8/UKR/3-G/SG/N/10/UKR/3-G/SG/N/11/UKR/1 (Exhibit JPN-7).
529 Exhibit JPN-2, p. 4.

[…] the date of commencement of application of the safeguard measures, the date of
the Commission's decision entering into force, other information and regulations of
application of the safeguard measures.
530
7.497. Nothing in the Notice of 14 March 2013 indicates that the decision of 28 April 2012
established the parameters of application such as the duration of the measure or its date of entry
into force. But even if it did, we note that the Notice of 14 March 2013 establishes the date of
entry into force by stating that the decision to apply a safeguard measure will enter into force
30 days after its publication. Even if the decision of 28 April 2012 had similarly indicated that the
measure would enter into force after publication, that decision was not in fact published until
14 March 2013. Consequently, the decision of 28 April 2012 did not establish a date for its entry
into force. Therefore, we consider that the decision of 28 April 2012 does not constitute a "decision
of the Commission on application of … safeguard measures" within the meaning of Article 16(3) of
the Safeguards Law. In contrast, the Notice of 14 March 2013 unquestionably is such a decision,
as it makes clear when the decision to apply a safeguard measure, based on the decision of
28 April 2012, will enter into force – 30 days after publication of the Notice of 14 March 2013.
7.498. As Article 12.2 makes clear, the date of entry into force – or the date of introduction in the
language of Article 12.2 – is information that must be provided to the Committee on Safeguards in
making a notification under Article 12.1(c). This suggests to us that the "taking of a decision to
apply … a safeguard measure" under Article 12.1(c) necessarily includes a decision on the date of
introduction of the measure. Absent such a decision by the competent authorities that commits
them to a date of introduction, the decision on application remains incomplete in a significant
respect.
7.499. As discussed above, the Notice of 14 Marc h 2013 establishes the date of the entry into
force of Ukraine's safeguard measure on passenger cars – the date of introduction. It also
explicitly imposes a safeguard measure in the form of a special duty, and specifies the applicable
rates of duty and the duration of the measure. For the foregoing reasons, we consider that the
Notice of 14 March 2013 sets out all the essential elements of a "decision to apply … a safeguard
measure". Moreover, the fact that the publicat ion of the Notice of 14 March 2013 necessarily
meant, by its own terms, that the safeguard measure would enter into force 30 days later supports
our conclusion that the competent authorities "took" a decision to apply a safeguard measure, that
is, they committed themselves to a particular date of introduction. Accordingly, we find that the
competent authorities "[took] a decision to apply … a safeguard measure" within the meaning of
Article 12.1(c) on 14 March 2013, the date on which the Notice was published.
7.500. In contrast, while it seems clear that the Commission decision of 28 April 2012 contained
the substantive basis on which a "decision to apply … a safeguard measure" was based, we cannot
conclude that the competent authorities on 28 April 2012 went as far as "taking" a decision to
apply a safeguard measure. Notably, there is no in dication in the evidence before us that they
committed to any particular date for the introduction of such a measure. It is clear, however, that
a date for introduction of the measure was fixed as of the publication of the Notice of
14 March 2013.
7.501. We now turn to the date to be used fo r assessing whether Ukraine's notification under
Article 12.1(c) was made "immediately" upon taking a decision to apply a safeguard measure.
Based on the foregoing, we consider that, in the specific circumstances of this case, the competent
authorities took their decision to apply a safe guard measure only on 14 March 2013, when they
published the Notice.
531 We therefore find that the relevant date by reference to which we must
assess whether Ukraine's notification under Article 12.1(c) was "immediate" is 14 March 2013.
7.502. Ukraine's notification was sent to the Committee on Safeguards on 21 March 2013, seven
calendar days after the decision to apply a safeguard measure. In US – Wheat Gluten , the
Appellate Body found that a delay of five calendar days in notifying a decision to apply a safeguard

530 Exhibit JPN-1, p. 17.
531 We do not mean to suggest that the date of publication is the date that should generally be used for
determining whether the taking of a decision to apply a safeguard measure has been notified immediately.
Rather, we are saying that in the specific situation before us, the evidence suggests that the relevant decision
was only taken when it was published.

measure was not inconsistent with Article 12.1(c). The notification in question in that case was
approximately 790-words long. The delay in the present dispute is greater, but unlike in US –
Wheat Gluten, the Notice of 14 March 2013 in this case re quired translation into one of the WTO's
working languages. Ukraine's joint notification under Articles 12.1(b) and (c) provides considerably
more substantive information than the notification under Article 12.1(a). This is evidenced by the
fact that it is four pages long and contains just over 1,800 words. In our view, the need (i) to
prepare and finalize the original document, which is more than twice as long as the one at issue in
US – Wheat Gluten , and (ii) to have it translated after it had been finalized, can justify a longer
delay than five days. In the absence of specif ic arguments and evidence to the contrary, and
taking account of the length of the document, we see no basis to conclude that by notifying the
WTO seven days after publication of the Notice of 14 March 2013, Ukraine in this case did not
proceed with the required degree of urgency or failed to keep the delay in notifying the Committee
on Safeguards to a minimum. We therefore conclude that Japan has not established that Ukraine
failed to notify the Committee on Safeguards immediately upon taking a decision to apply a
safeguard measure within the meaning of Article 12.1(c).
7.9.2 Claim under Article 12.2
7.503. The Panel now turns to Japan's claim that Ukraine acted inconsistently with Article 12.2 in
making its notification to the WTO Committee on Safeguards. Article 12.2 provides that:
In making the notifications referred to in paragraphs 1(b) and 1(c), the Member
proposing to apply or extend a safeguard measure shall provide the Committee on
Safeguards with all pertinent information, which shall include evidence of serious
injury or threat thereof caused by incr eased imports, precise description of the
product involved and the proposed measure, proposed date of introduction, expected
duration and timetable for progressive liberalization. In the case of an extension of a
measure, evidence that the industry concerned is adjusting shall also be provided. The
Council for Trade in Goods or the Committee on Safeguards may request such
additional information as they may consider necessary from the Member proposing to
apply or extend the measure.
7.504. Japan claims that the notification made by Ukraine pursuant to Articles 12.1(b) and (c) on
21 March 2013 is inconsistent with Article 12.2 because it did not contain all pertinent
information.
532 More specifically, it argues that Ukraine's notification does not include certain
essential evidence of serious injury or threat th ereof caused by increased imports, and does not
include a timetable for progressive liberalization.533
7.505. Ukraine argues that its notification to the WTO Committee on Safeguards of 21 March 2013
included the requisite pertinent information on the injury determination and the decision to impose
the safeguard measure and was sufficient to be consistent with its WTO obligations. 534 Ukraine
adds that in assessing whether or not Article 12.2 has been complied with, it is important to focus
on the overarching goals of notifications. 535 Referring to Argentina – Footwear (EC) , Ukraine
argues that the notification must be sufficiently descriptive of the actions taken or proposed, and
of the bases for those actions, so that Members with an interest in the matter can decide whether
and how to pursue it further.
536
7.506. In response, Japan argues that a Member must not only comply with the spirit of
Article 12.2 but also its letter. Japan takes the view that the notification must at a minimum
address all the items specified in Article 12.2 as constituting all pertinent information as well as the
factors listed in Article 4.2 that are required to be evaluated in a safeguard investigation.
537

532 Japan's first written submission, para. 339; and second written submission, para. 272.
533 Japan's first written submission, paras. 342-348.
534 Ukraine's first written submission, para. 230. See also Ukraine's second written submission, para. 91.
535 Ukraine's first written submission, para. 222.
536 Ibid.
537 Japan's second written submission, para. 271.

7.507. The Panel notes that this claim concer ns the content of Ukraine's notification of
21 March 2013 under Articles 12.1(b) and (c). 538 The parties disagree whether that notification
provides sufficient information to comply with the minimum requirement imposed by Article 12.2.
We will examine the notification in question to determine if it meets the minimum requirement
imposed by Article 12.2.
7.9.2.1 "All pertinent information"
7.508. The Panel recalls that Article 12.2 sets fo rth the required content of notifications to the
WTO Committee on Safeguards under Articles 12.1(b) or 12.1(c). Such notifications must provide
"all pertinent information" with respect to several matters concerning the investigation,
determinations, and the proposed safeguard measure. Article 12.2 indicates that information that
is pertinent in all cases "include[s]" certain specified information. This was confirmed by the
Appellate Body in Korea – Dairy:
The text of Article 12.2 makes it clear that a Member proposing to apply a safeguard
measure is required to provide the Committee on Safeguards with all pertinent, not
just any pertinent, information. Moreover, it provides that such information shall
include certain items listed immediately after the phrase "all pertinent information",
namely, evidence of serious injury or thre at thereof caused by increased imports, a
precise description of the product involved and the proposed measure, the proposed
date of introduction, the expected duration of the measure and a timetable for
progressive liberalization. These items, which are listed as mandatory components of
"all pertinent information", constitute a minimum notification requirement that must
be met if a notification is to comply with the requirements of Article 12.
539
So far as the evidence of serious injury or threat thereof caused by increased imports is
concerned, the Appellate Body further clarified that:

We believe that "evidence of serious injury" in the sense of Article 12.2 should refer,
at a minimum, to the injury factors required to be evaluated under Article 4.2(a). In
other words, according to the text and th e context of Article 12.2, a Member must, at
a minimum , address in its notifications, pursuant to paragraphs 1(b) and 1(c) of
Article 12, all the items specified in Article 12.2 as constituting "all pertinent
information", as well as the factors listed in Article 4.2 that are required to be
evaluated in a safeguards investigation.
540
7.509. Accordingly, notifications of "all pertin ent information" under Article 12.2, must, at a
minimum, provide information about all of the items listed in Article 12.2, namely (i) evidence of
serious injury or threat thereof caused by increase d imports; (ii) precise description of the product
involved; (iii) the proposed measure, (iv) proposed date of introduction, (v) expected duration and
(vi) timetable for progressive liberalization. In addition, so far as evidence of serious injury or
threat thereof caused by increased imports is concerned, the relevant notification must include
information about each of the eight factors listed in Article 4.2 that are required to be evaluated,
namely (i) the rate and amount of the increase in imports of the product concerned in absolute
and relative terms; (ii) the share of the domestic market taken by increased imports, (iii) changes
in the level of sales, (iv) production, (v) productivity, (vi) capacity utilization, (vii) profits and
losses, and (viii) employment.
541
7.510. As these fourteen items all form part of the minimum content to be included in a
notification under Articles 12.1(b) and (c), this ne cessarily means that if any one of these items is
missing, the notification concerned fails to meet the requirements of Article 12.2.
7.511. With these considerations in mind, we now turn to assess Ukraine's notification.

538 Members are required to notify immediately under Article 12.1(b) upon making a finding of serious
injury or threat thereof caused by increased imports; and under Article 12.1(c) upon taking a decision to apply
or extend a safeguard measure.
539 Appellate Body Report, Korea – Dairy, para. 107. (emphasis original)
540 Ibid. para. 108. (emphasis original; original footnote omitted)
541 Ibid. paras. 108 and 109.

7.9.2.2 The competent authorities' notification
7.512. Japan contends that the notification does not contain all pertinent information regarding
evidence of serious injury or threat thereof caus ed by increased imports. More specifically, Japan
asserts that the following information was absent from the notification:
i. the amounts of the decrease in imports in absolute terms and the amounts of the
increase in imports in relative terms over the period of investigation;
ii. the intervening trends for 2008 to 2009 and for 2009 to 2010 in relation to each of
the injury factors;
iii. the absolute figures for each of the injury factors; and
iv. information concerning the causal link between increased imports of the product
concerned and the serious injury or threat thereof.542
7.513. Japan submits that the notification likewise does not include a timetable for progressive
liberalization. 543 Japan argues that the timetable for progressive liberalization is part of the
pertinent information that is required in a no tification under Article 12.1, and therefore the
absence of such a timetable defeats the fundamental goal of transparency and information.544
7.514. Ukraine considers that Japan's procedural claim under Article 12.2 must fail. 545 Ukraine
maintains that its notification under Articles 12.1(b) and (c) was sufficient under WTO rules. 546 In
particular, Ukraine considers that its notification included the requisite pertinent information on the
determination of serious injury or threat thereof and the decision to impose the safeguard
measure. The supplement to the notification of 21 March 2013, notified to the WTO Committee on
Safeguards on 28 March 2014, provided further pe rtinent information on the application of the
measure.
547
7.515. Ukraine acknowledges that it did not notify any timetable for progressive liberalization until
28 March 2014. 548 However, Ukraine submits that its no tification of 21 March 2013 satisfied its
obligations under Article 12.2 with respect to the liberalization timetable, based on what Ukraine
views as the overarching goals of Article 12. 549 In particular, Ukraine considers it relevant that its
authorities had sent a number of letters to Japan between 25 August 2011 and 25 March 2013,
which Ukraine alleges provided Japan with the information needed to undertake consultations with
Ukraine under Article 12.3. 550 Ukraine further emphasizes that the initial proposed safeguard rate
of duty for cars with an engine volume in the range of 1500 c m3 but not exceeding 2200 c m3 was
reduced from 15.1% to 12.95% as a result of the consultations with Japan that were held on
19 April 2012. Ukraine argues that as one of the purp oses of the notification is to inform Members
of the circumstances of the case and the intentions of the imposing Member with a view to
allowing any interested Member to decide whethe r to request consultations which may lead to the
modification of the proposed measure, it is relevant that this purpose of the notification was met in
the present case, given that Japan had the information and had the consultations which lead to the
modification of the proposed measure.
551
7.516. In response, Japan argues that the supplementary notification of 28 March 2014 does not
contain any of the information concerning injury and causal link identified by Japan as absent from

542 Japan's first written submission, paras. 340-346.
543 Ibid. paras. 347-348.
544 Japan's second written submission, para. 280.
545 Ukraine's second written submission, para. 91.
546 Ukraine's first written submission, para. 230. Ukraine also argues that it complied with the Article 7.4
substantive obligation through its liberalization plan implemented in April 2014. See Ukraine's first written
submission, para. 194.
547 Ibid. para. 230.
548 Ukraine's first written submission, para. 210.
549 Ibid. paras. 222-224, 232.
550 Ibid. para. 231.
551 Ibid. para. 232.

the notification of 21 March 2013.552 Moreover, in Japan's view, the fact that Ukraine's subsequent
notification of 28 March 2014 contains a timetable for progressive liberalization does not render
the notification of 21 March 2013 consistent with Article 12.2.
553 Finally, Japan adds that the
letters sent to Japan are irrelevant for determining Ukraine's compliance with Article 12.2, as such
a determination depends on the content and extent of the information Ukraine made available to
the Committee on Safeguards in its notifications.554
7.517. The Panel will begin its analysis by a ddressing the issue of whether the notification
contains a timetable for progressive liberalization 555 , as required by Article 12.2. Ukraine's
notification of 21 March 2013 contains information on the determination of injury or threat thereof,
in particular the trends of certain injury indicators of the domestic industry during the period of
investigation, and on the assessment of the export potential of certain exporting countries.
Additionally, the notification contains information about the proposed measure, specifically, on its
form and the applicable rates of duty; a description of the product involved; the proposed date of
introduction; and the expected duration of the safeguard measure. However, the notification
provides no timetable for progressive liberalization. This fact is not in dispute between the
parties.
556
7.518. Following the notification of 21 March 2013, Ukraine applied its safeguard measure as from
14 April 2013. It subsequently decided, on 12 February 2014, to liberalize that measure by
reducing the duty rates in two successive steps, after 12 and 24 months. 557 This decision was
published in the official gazette on 28 March 2014 and notified to the WTO Committee on
Safeguards on the same day.
558 We note that the notification of 28 March 2014 does contain a
timetable for progressive liberalization.
7.519. Ukraine's supplementary notification of 28 March 2014 came almost one year after the
entry into force of the safeguard measure. However, the text of Article 12.2 clearly imposes an
obligation to provide a timetable for progressive liberalization on "the Member proposing to apply
or extend a safeguard measure" (emphasis added). The term "proposing" entails that the Member
has not applied, but intends to, or is about to, apply a safeguard measure. If a safeguard measure
had already been adopted, the Member would no longer be "proposing" to apply it. Thus, it seems
clear to us that a timetable notified after the measure has already been imposed cannot satisfy
Article 12.2.
7.520. The panel in Korea – Dairy similarly found that Articles 12.1, 12.2 and 12.3
559, taken
together, impose an obligation to notify the details of a proposed safeguard measure before it is
applied, so that affected Members may consult on it before it takes effect. 560 The Appellate Body
confirmed that the requirement in Article 12.2 to provide all pertinent information, which includes
the timetable for progressive liberalization, allows exporting Members with a substantial interest to
engage in prior consultations:
In this way, exporting Members with a substa ntial interest in the product subject to a
safeguard measure will be in a better position to engage in meaningful consultations,

552 Japan's second written submission, para. 276.
554 Japan's second written submission, para. 277.
555 One of the guiding principles of the Agreement on Safeguards is that safeguard measures be
progressively liberalized while in effect. The obligation for the imposing Member to progressively liberalize a
safeguard measure is set out in Article 7.4. For the text of Article 7.4, see para. 7.349 above.
556 In response to a question from the Panel, Ukraine stated that it considers that the reduction of the
duty rate from 15.1% to 12.95%, following consultations with Japan on 19 April 2012, amounts to
liberalization. Even assuming for the sake of argument that the reduction of the duty rate can be considered
liberalization, this would not detract from the fact that no timetable for progressive liberalization was included
in Ukraine's notification of 21 March 2013.
557 Ukraine's first written submission, para. 38.
558 See WTO document G/SG/N/8/UKR/3/Suppl.1-G/SG/N/10/UKR/3/Suppl.2-G/SG/N/11/UKR/1/Suppl.1
(31 March 2014) (Exhibit JPN-9).
559 For the text of Article 12.3, see para. 7.526 below.

as envisaged by Article 12.3, than they woul d otherwise be if the notification did not
include all such elements.561
7.521. It is true that a safeguard measure is by definition liberalized only after it has entered into
force, and that pursuant to Article 7.4 562 there is a requirement to progressively liberalize only in
the case of safeguard measures with an expected duration of over one year. However, Article 12.3
gives affected Members a right to an adequate op portunity for consultations before, not after, a
safeguard measure is applied. Affected Members are therefore entitled to receive the proposed
timetable for progressive liberalization before an y consultations under Article 12.3 are held. It is
clear to us in view of the foregoing that, like all other pertinent information, the timetable for
progressive liberalization must be notified before the associated safeguard measure enters into
force.
7.522. As regards the letters that Ukraine's authorities sent to Japan, we note that Article 12.2,
read together with Article 12.1, establishes an obligation to provide information not just to one
Member, but to the WTO Committee on Safeguards, and that under Article 12.3 all Members
having a substantial interest as exporters of the product concerned must be given an opportunity
for prior consultations. But even leaving that asid e, the letters identified by Ukraine in any event
do not contain a proposed timetable for progressive liberalization.
7.523. Furthermore, we recall that this Panel was established on 26 March 2014, i.e. two days
before Ukraine's supplementary notification of 28 March 2014. Therefore, as of the date of the
Panel's establishment, Ukraine had not notified any timetable for progressive liberalization to the
WTO Committee on Safeguards. Accordingly, the Panel finds that Ukraine's notification of
21 March 2013, the only notification submitted as of the date of this Panel's establishment, does
not satisfy the requirement to provide "all pertinen t information", since it failed to provide one of
the mandatory elements identified in Article 12.2 as being part of "all pertinent information", i.e. a
proposed timetable for progressive liberalization.
7.524. For all the above reasons, we conclude that , as of the date of this Panel's establishment,
i.e. 26 March 2014, Ukraine was acting inconsistently with its obligations under Article 12.2
because it had not provided, in its notification of 21 March 2013, "all pertinent information" as
required under that provision. Ukraine's suppl ementary notification of 28 March 2014 does not
affect our conclusion.
7.525. The Panel recalls that Japan also argues that other information is missing from the
notification of 21 March 2013. Since we have alre ady found that Ukraine acted inconsistently with
its obligations under Article 12.2 by failing to provide a proposed timetable for progressive
l i b e r a l i z a t i o n a s r e q u i r e d , w e d o n o t c o n s i d e r i t n e c e s s a r y t o g o o n t o m a k e a d d i t i o n a l f i n d i n g s
regarding whether Ukraine also acted inconsistently with Article 12.2 by failing to provide the other
information identified by Japan. We therefore decline to make findings regarding Japan's claim so
far as those arguments are concerned.
7.9.3 Claim under Article 12.3
7.526. The Panel now turns to Japan's claim that Ukraine failed to provide Japan with an adequate
opportunity for prior consultations under Article 12.3, which reads as follows:
A Member proposing to apply or extend a safeguard measure shall provide adequate
opportunity for prior consultations with those Members having a substantial interest
as exporters of the product concerned, with a view to, inter alia, reviewing the
information provided under paragraph 2, exchanging views on the measure and
reaching an understanding on ways to achieve the objective set out in paragraph 1 of
Article 8.
7.527. Japan claims that Ukraine failed to provide an adequate opportunity for consultations after
it made a notification under Articles 12.1(b) and (c) on 21 March 2013.
563 Japan argues that

561 Appellate Body Report, Korea – Dairy, para. 111.
562 For the text of Article 7.4, see para. 7.349 above.
563 Japan's first written submission, para.350; and second written submission, para. 282.

Article 12.3 provides that one of the objectives of the opportunity for prior consultation is to allow
for "reviewing the information provided under paragraph 2 (of Article 12)". Japan therefore
considers that the opportunity for prior consultati ons should be provided after the notification
containing information identified in Article 12.2 has been made. Japan submits that despite its
repeated requests after Ukraine's notificati on on 21 March 2013, Ukraine failed to provide
adequate opportunity for prior consultations on the proposed safeguard measure.564
7.528. Japan adds that the consultations held between Japan and Ukraine on 19 April 2012 did
not fulfil the requirements of Article 12.3. Japa n argues that Article 12.3 requires the Member
imposing a safeguard measure to provide affected exporting Members sufficient time and sufficient
information for meaningful consultations. In Japa n's view, the reference in Article 12.3 to "the
information provided under paragraph 2 (of Article 12)" indicates that the information listed in
Article 12.2 is the minimum information that the imposing Member has to provide to enable
meaningful consultations. Japan contends that the information provided to it in advance of the
consultations of 19 April 2012, namely the Key Findings,
565 did not contain all of the minimum
information required by Article 12.2, in particular , the proposed date of application, the precise
rate of duty and certain pertinent information concerning injury and causation.566
7.529. Ukraine responds that Japan's focus on the notification under Article 12.1 and on the
pertinent information required by Article 12.2 is misplaced. Ukraine considers highly relevant the
fact that, pursuant to Article 12.3, the consultati ons must be based on "the information provided
under paragraph 2" and not on the notification unde r Article 12.1 itself. In Ukraine's view, if an
interested Member has received information that is subsequently also provided in a notification
under Article 12.1, then that is sufficient to allow for proper consultations under Article 12.3.
Ukraine asserts that it provided Japan with the relevant information regarding its proposed
measure prior to both the decision of 28 April 2012 to impose a safeguard measure and the
decision of 21 March 2013 to publish the safeguard measure.
567 In particular, Ukraine refers to its
consultations with Japan of 19 April 2012, which in its view satisfied its obligation under
Article 12.3.
568
7.530. The Panel notes that Japan and Ukrain e disagree over how the pertinent information
required by Article 12.2 is to be provided for pu rposes of prior consultations under Article 12.3,
and whether prior consultations were held that allowed a review of relevant information. What is
not in dispute, however, is that as concerns the safeguard measure at issue Japan can be
considered a "Member having a substantial interest as [an exporter] of the product concerned"
within the meaning of Article 12.3. We note th at Japan's share of Ukraine's total imports of
passenger cars was 15% in 2010 according to the Notice of Imposition of 14 March 2013.
7.531. Before addressing the issues raised by Japan's claim, we recall the sequence of relevant
events:

564 Japan's first written submission, paras. 351-358.
565 Exhibit JPN-6 (Revised Version).
566 Japan's first written submission, paras. 359-367.
567 Ukraine's second written submission, para. 94.
568 Ukraine's first written submission, paras. 238-239.

Date Event
11 April 2012 Ukraine sent a letter, with Key Findings attached, to the Embassy of Japan
in Ukraine inviting Japan to consultations under Article 12.3.569
19 April 2012 Consultations were held between Ukraine and Japan in Kiev.570
28 April 2012 Safeguard investigation on passenger cars completed. 571
Decision on the Imposition of Safeguard Measures adopted.572
14 March 2013 Notice of Imposition - published in the Uryadovyi Kuryer No. 48.573
21 March 2013 Ukraine notified the WTO Committee on Safeguards pursuant to
Articles 12.1(b) and (c).
27 March 2013 A meeting was held between representatives of the Ministry of Economic
Development and Trade of Ukraine and Embassy of Japan in Ukraine.574
4 April 2013 Japan requested consultations pursuant to Article 12.3. 575
9 April 2013 A meeting was held between representatives of the Ministry of Economic
Development and Trade of Ukraine an d Ministry of Economy, Trade and
Industry of Japan.576
13 April 2013 Safeguard measure at issue entered into effect.
15 April 2013 Ukraine communicated to the WTO Committee on Safeguards that "the
Ministry of Economic Development and Trade of Ukraine proposes that the
consultations take place at the Ministry 's premises in Kiev/Ukraine during
April 2013."577
20 April 2013 Japan requested that the consultations take place in Geneva. 578
23 April 2013 Japan reiterated its concerns about th e lack of adequate opportunity for
consultation during the regular meeting of the WTO Committee on
Safeguards.579

At the same meeting of the WTO Committee on Safeguards, Ukraine
stated that it had held consultations with Japan to discuss the results of
the investigation on 19 April 2012 and fully complied with the Agreement
on Safeguards.580
4 June 2013 Ukraine sent a letter to the Permanent Mission of Japan in Geneva stating
that it "has provided the adequate opportunity for prior consultations with
Japan as stated in Article 12.3 of the Agreement".
581

Thereafter Japan reiterated on several occasions, in letters to Ukraine, and in
communications to and statements be fore the WTO Council for Trade in
Goods and the Committee on Safe guards, its position that the
consultations held in Ukraine failed to provide an adequate opportunity for
prior consultations under Article 12.3.582

569 Exhibit JPN-6 (Revised Version).
570 We note that the letter dated 11 April 2012 from the Ukrainian competent authority to the embassy
of Japan in Ukraine specifically refers to the proposed consultations as consultations pursuant to Article 12.3 of
the Agreement on Safeguards.
571 Ukraine's response to Panel question No. 83. See also Japan's response to Panel question No. 130.
572 This is referred to in the Notice of Imposition of Safeguard Measures on Imports of Motor Cars to
Ukraine Regardless of Country of Origin or Export was published in the Uryadovyi Kuryer No.48 of
14 March 2013 (Exhibit JPN-2), p. 4.
573 The Notice of Imposition of Safeguard Measures on Imports of Motor Cars to Ukraine Regardless of
Country of Origin or Export was published in the Uryadovyi Kuryer No. 48 of 14 March 2013 (Exhibit JPN-2).
574 Ukraine's response to Panel question No. 83.
575 See WTO document G/SG/108 (Exhibit JPN-14).
576 Ukraine's response to Panel question No. 83. See also Japan's response to Panel question No. 130.
577 See WTO documents G/SG/108/Suppl.1 and G/SG/108/Suppl.1/Corr.1 (Exhibit JPN-15).
578 Letter of the Permanent Mission of Japan to the United Nations and Other International Organizations
in Geneva to the Permanent Mission of Ukraine to the United Nations Office and Other International
Organizations in Geneva, 20 April 2013 (Exhibit JPN-16).
579 See WTO document G/SG/W/229 (Exhibit JPN-18).
580 Minutes of the Regular Meeting of the Committee on Safeguards held on 23 April 2013, WTO
document G/SG/M/43, pp. 8-9 (Exhibit JPN-17).
581 Letter of the Permanent Mission of Ukraine to the United Nations Office and Other International
Organizations in Geneva to the Permanent Mission of Japan to the United Nations and Other International
Organizations in Geneva, 4 June 2013 (Exhibit JPN-19).
582 Japan's first written submission, paras. 354-357.

7.532. It is clear from the above that the only consultations between Ukraine and Japan on the
proposed safeguard measure before its entry into force were those held on 19 April 2012. In
advance of those consultations, information was made available to Japan on the proposed
safeguard measure only in the Key Findings communi cated to it on 11 April 2012. The notification
pursuant to Articles 12.1(b) and (c) was not made by Ukraine until 21 March 2013, almost one
year later. No further consultations took place between Japan and Ukraine prior to the entry into
force of the safeguard measure on 13 April 2013.
7.533. With respect to the requirements of Article 12.3, the Appellate Body observed in US –
Wheat Gluten that:
Article 12.3 states that an "adequate opportunity" for consultations is to be provided
"with a view to": reviewing the informat ion furnished pursuant to Article 12.2;
exchanging views on the measure; and reaching an understanding with exporting
Members on an equivalent level of concessions. In view of these objectives, we
consider that Article 12.3 requires a Memb er proposing to apply a safeguard measure
to provide exporting Members with sufficient information and time to allow for the
possibility, through consultations, for meaningful exchange on the issues identified. To
us, it follows from the text of Article 12.3 itself that information on the proposed
measure must be provided in advance of the consultations, so that the consultations
can adequately address that measure. Moreover, the reference, in Article 12.3, to "the
information provided under" Article 12.2, indicates that Article 12.2 identifies the
information that is needed to enable meaningful consultations to occur under
Article 12.3.
583
7.534. Article 12.3 requires a Member proposing to apply a safeguard measure to provide an
adequate opportunity for prior consultations with WTO Members having a substantial interest in
exporting the product concerned. As these consultations are meant to be "prior consultations" on
the proposed safeguard measure 584, they must precede the application of a safeguard measure.
And since one of the stated objectives of these consultations is to allow for a review of the
information provided under Article 12.2, the rele vant information must have been provided in
advance of the consultations. Moreover, the information whose review must be possible during the
consultations is that which was "provided under paragraph 2 [of Article 12]". We understand from
this phrase that the information in question consists of "all pertinent information" within the
meaning of Article 12.2, including that pertaining to the items identified in Article 12.2 and the
factors listed in Article 4.2.
7.535. Japan takes the view that the "pertinent information" referred to in Article 12.2 must be
provided through a notification under Article 12.1 and that there is a link between the "pertinent
information provided" by means of a notification under Article 12.1 and the obligation to provide
"an adequate opportunity for consultations" under Article 12.3.
585 In contrast, Ukraine considers
that the requirements of Article 12.3 are satisfied if an interested Member has actually received
the information to be included in a notification under Article 12.1, whether through a notification
under Article 12.1 or otherwise. Ukraine's interpretation is not the most natural reading of the text
of the relevant provisions. Article 12.3 refers to information "provided" under Article 12.2, not
information "referred to", or "identified", in Article 12.2. For us, this suggests that if the
information is not "provided" as per Article 12.2, that is, in the notifications referred to in
Articles 12.1(b) and (c), a Member cannot be found to have complied with the relevant
requirement. Moreover, the past participle "provi ded" tracks the language used in Article 12.2,
which requires the Member proposing to apply a safeguard measure to "provide" the Committee
on Safeguards with all pertinent information. Thus, a Member proposing to apply a safeguard
measure must first "provide" the information to the Committee so that the information thus
"provided" can be used by interested exporting Members for purposes of the prior consultations
required by Article 12.3. Thus, the immediate cont ext of Article 12.3 supports an interpretation of
Article 12.3 as referring to the pertinent information provided to the Committee on Safeguards in
notifications under Articles 12.1(b) and (c).

583 Appellate Body Report, US – Wheat Gluten, para. 136.
584 Article 12.3 is addressed to "a Member proposing to apply or extend a safeguard measure".
585 Japan's second written submission, para. 287, referring to Appellate Body Report, Korea – Dairy,
para. 111.

7.536. Nevertheless, we accept that this interpre tation alone might not be fully dispositive of all
issues presented in a case where the complaining party has been provided with all pertinent
information otherwise than through a notification. However, in the dispute before us we need to
address this point only if Japan was, in fact, provided with all pertinent information.
7.537. With these considerations in mind, th e Panel now examines whether, in the present
dispute, Ukraine provided Japan with adequate opportunity for prior consultations with a view to,
inter alia, reviewing the information provided under Article 12.2. As mentioned earlier, the only
consultations on the proposed safeguard measure that were held prior to the entry into force of
that measure were those held on 19 April 2012. Uk raine had provided no notification to the WTO
under Article 12.1(b) or (c) at the time. While Ukra ine provided the Key Findings to Japan prior to
the consultations, on 11 April 2012, those findings do not include information concerning a
timetable for progressive liberalization, which is one of the mandatory elements of information to
be provided under Article 12.2.Thus, it is clear that Japan was not provided with the information
required under Article 12.2 before the consultations were held. Moreover, the Articles 12.1(b) and
12.1(c) notification made on 21 March 2013 simila rly failed to provide in formation regarding a
timetable for progressive liberalization
586 Since Japan was not provided with all pertinent
information identified in Article 12.2, it is clear to us that, even assuming Ukraine's interpretation
of the relevant provisions were correct, an issue we need not decide, by failing to provide Japan
with all pertinent information identified in Article 12.2 prior to the consultations, Ukraine acted
inconsistently with Article 12.3.
7.538. For the reasons set out above, we theref ore conclude that, although consultations took
place in April 2012 prior to the application of the measure at issue, Ukraine acted inconsistently
with its obligations under Article 12.3 because it failed to provide Japan, a Member with a
substantial export interest in the product subj ect to the proposed safeguard measure, with
adequate opportunity for prior consultations with a view to reviewing all pertinent information
within the meaning of Article 12.2, which incl udes the proposed timetable for progressive
liberalization.
7.9.4 Claim under Article 12.5
7.539. The Panel now turns to Japan's claim under Article 12.5, which provides that:
The results of the consultations referred to in this Article, as well as the results of mid-
term reviews referred to in paragraph 4 of Article 7, any form of compensation
referred to in paragraph 1 of Article 8, and proposed suspensions of concessions and
other obligations referred to in paragraph 2 of Article 8, shall be notified immediately
to the Council for Trade in Goods by the Members concerned.
7.540. Japan claims that Ukraine acted inconsistently with Article 12.5 because, even if the Panel
were to find that Ukraine and Japan held consultations pursuant to Article 12.3, the results of such
consultations were not notified, and a fortiori not notified "immediately", to the Council for Trade
in Goods.
587
7.541. Ukraine responds that Japan cannot complain about any failure to notify, in view of its own
failure to notify the results of the consultations. Ukraine asserts in this connection that Article 12.5
sets forth a shared obligation for the "Members" concerned, in the plural, in the consultations, to
notify the results.
588 In Ukraine's view the lack of a notification to the Council for Trade in Goods
could not have caused any harm to Japan given that this provision aims to protect the interests of

586 We recall that the supplementary notification dated 28 March 2014 does contain a timetable for
progressive liberalization. However, it was notified almost a year after the entry into force of the safeguard
measure, and is therefore not relevant for purposes of our evaluation under Article 12.3.
587 Japan's first written submission, para. 369.
588 Ukraine's first written submission, para. 242.

Members other than Japan and Ukraine. 589 Ukraine submits that the alleged lack of notification is
in any case a harmless error.590
7.542. The Panel notes that Japan in its response to one of its questions at the second substantive
meeting confirmed that if the Panel were to find that no consultations were held under
Article 12.3, as asserted by Japan, the Panel need not make a finding on its Article 12.5 claim.591
7.543. We have found above that Ukraine failed to provide Japan with an adequate opportunity
for prior consultations contrary to Article 12.3. Therefore, the condition on which Japan's claim
under Article 12.5 rests is not fulfilled. Given Japan's position, we consequently refrain from
addressing this conditional claim further and make no findings on its merits.
7.9.5 Claim under Article 8.1
7.544. The Panel now turns to Japan's claim under Article 8.1, which provides that:
A Member proposing to apply a safeguard measure or seeking an extension of a
safeguard measure shall endeavour to maintain a substantially equivalent level of
concessions and other obligations to that existing under GATT 1994 between it and
the exporting Members which would be affected by such a measure, in accordance
with the provisions of paragraph 3 of Article 12. To achieve this objective, the
Members concerned may agree on any adequate means of trade compensation for the
adverse effects of the measure on their trade.
7.545. Japan claims that Ukraine acted inconsistently with
Article 8.1 because it did not endeavour
to maintain a substantially equivalent level of concessions and other obligations to that existing
between Ukraine and Japan under the GATT 1994 in accordance with Article 12.3.
592 Japan argues
that Ukraine's failure to provide adequate opportunity for prior consultations within the meaning of
Article 12.3 is in itself a reason for the Panel to find that Ukraine acted inconsistently with its
obligations under Article 8.1.
593
7.546. Ukraine argues that the consultations that took place in April 2012 demonstrate that it has
always endeavoured to maintain an equivalent level of concessions and other obligations to that
existing under the GATT 1994 between it and Japan as well as with other exporting Members that
would be affected by the safeguard measure at issue.
594 Ukraine adds that Article 8 should be read
in a holistic manner in the sense that there is no violation of a legal provision requirement if that
legal provision itself provides for a balancing mechanism, as does Article 8.
595 Ukraine notes that
according to Article 8.2, if there is no agreement following consultations, or a fortiori when no
consultations take place, the affected exporting Member is free, no later than 90 days after the
safeguard measure is applied, to suspend the application of substantially equivalent concessions or
other obligations under the GATT 1994 to the tr ade of the Member applying the safeguard
measure. In Ukraine's view, as Japan was free to resort to this form of approved self-help under
Article 8.2, its claim under Article 8.1 is without merit.596
7.547. Japan responds that Article 8.2 allows temporary relief for the harm caused by the
application of a safeguard measure, but does not ad dress the breach of Article 8.1, which sets out
a clear legal obligation to be complied with by a Member proposing to apply safeguard measure.597
7.548. The Panel recalls that the Appellate Body stated in US – Wheat Gluten that:

589 Ukraine's first written submission, para.244. See also Ukraine's opening statement at the first
590 Ukraine's first written submission, para. 244.
591 Japan's response to Panel question No. 108.
592 Japan's first written submission, para. 370.
593 Ibid. para. 373.
594 Ukraine's first written submission, para. 248.
595 Ibid. para. 249.
596 Ibid.
597 Japan's second written submission, para. 296.

Article 8.1 imposes an obligation on Member s to "endeavour to maintain" equivalent
concessions with affected exporting Members. The efforts made by a Member to this
end must be "in accordance with the provis ions of" Article 12.3 of the Agreement on
Safeguards.
In view of the explicit link between Arti cles 8.1 and 12.3 of the Agreement on
Safeguards, a Member cannot …] "endeavour to maintain" an adequate balance of
concessions unless it has, as a first step, provided an adequate opportunity for prior
consultations on a proposed measure".
598
7.549. In that dispute, the Appellate Body upheld the panel's finding that, contrary to Article 12.3,
the United States did not provide an adequate opportunity for consultations because the form of
the proposed measure was not clear enough to en able meaningful consultations. The Appellate
Body elaborated as follows:
[A]n exporting Member will not have an "adequate opportunity" under Article 12.3 to
negotiate overall equivalent concessions through consultations unless, prior to those
consultations, it has obtained, inter alia, sufficiently detailed information on the form
of the proposed measure, including the nature of the remedy.
599
7.550. The Appellate Body in the same dispute al so upheld, "for the same reasons" as those it
cited when upholding the panel's finding under Article 12.3, the panel's additional finding that the
United States had acted inconsistently with its obligations under Article 8.1. 600 This confirms to us
that the lack of pertinent information at the time consultations are held under Article 12.3 leads to
a breach of Article 8.1. Compliance with Arti cle 8.1 must be made in accordance with the
provisions of Article 12.3.
7.551. In the present dispute, we have found above that Ukraine acted inconsistently with its
obligations under Article 12.3 because it failed to provide Japan with adequate opportunity for
prior consultations with a view to reviewing all pertinent information, which includes the proposed
timetable for progressive liberalization. We note that the information that was missing in US –
Wheat Gluten was different in nature and related to the form of the proposed measure and the
nature of the remedy. Nevertheless, in our view, the proposed timetable for progressive
liberalization is equally relevant to achieving the objective of endeavouring to maintain a
substantially equivalent level of concessions and other obligations that would be affected by a
safeguard measure. The timetable for progressive liberalization is an important element in
determining, per Article 8.1, "any adequate means of trade compensation for the adverse effects"
of the proposed safeguard measure on the trade of exporting Members. Absent a timetable for
progressive liberalization, an affected exporting Member cannot accurately assess the adverse
effects caused by the safeguard measure as the level and duration of the adverse effects will
depend on whether and when any liberalization of the safeguard measure will be introduced, and
thus, an adequate level of compensation cannot be calculated.
7.552. Consequently, we conclude that, to the extent that Ukraine failed to provide adequate
opportunity for prior consultations to review a proposed timetable for progressive liberalization,
Ukraine cannot be said to have "endeavoured to maintain" a substantially equivalent level of
concessions and other obligations, because without a proposed timetable for progressive
liberalization, exporting Members such as Japan were unable to form an accurate understanding as
to what might constitute a substantially equivalent level of concessions and other obligations.
7.553. For the reasons set out above, the Panel therefore concludes that Ukraine acted
inconsistently with its obligations under Article 8.1 because it has failed to endeavour to maintain a
substantially equivalent level of concessions and other obligations.

598 Appellate Body Report, US – Wheat Gluten, paras. 145-146.
599 Ibid. para. 137.
600 Ibid.

8 CONCLUSIONS AND RECOMMENDATIONS
8.1. For the reasons set forth in this Report, we conclude that Ukraine acted inconsistently with:
a. Article XIX:1(a) of the GATT 1994, by failing to make a proper determination regarding
(i) the existence of unforeseen developmen ts and (ii) the effect of GATT 1994
obligations;
b. Article 2.1 of the Agreement on Safeguards, by failing to make a proper determination
regarding increased imports;
c. Article 4.2(a) of the Agreement on Safeguards, by failing to make a proper
determination regarding threat of serious injury to the domestic industry;
d. Article 4.2(b) of the Agreement on Safeguards, by failing to demonstrate the existence
of a causal link and to conduct a proper non-attribution analysis;
e. Article 4.2(c) of the Agreement on Safeguards, by failing to publish promptly its analysis
of the case under investigation and its demonstration of the relevance of the factors
examined;
f. Article 8.1 of the Agreement on Safeguards, by failing to endeavour to maintain an
adequate balance of concessions and other obligations.
g. Article 12.1(a) of the Agreement on Safeguar ds, by failing to notify the WTO Committee
on Safeguards immediately after initiating a safeguard investigation;
h. Article 12.1(b) of the Agreement on Safeguar ds, by failing to notify the WTO Committee
on Safeguards immediately after making a fi nding of serious injury or threat thereof
caused by increased imports;
i. Article 12.2 of the Agreement on Safeguards, by failing to provide, in its notification of
21 March 2013, "all pertinent information" as required by that provision; and
j. Article 12.3 of the Agreement on Safeguards, by failing to provide Japan with adequate
opportunity for prior consultations with a view to reviewing all pertinent information.
8.2. Further, and also for the reasons set forth in this Report, we conclude that Japan failed to
establish that Ukraine acted inconsistently with:
a. Article 3.1, second sentence, of the Agreem ent on Safeguards, by failing to provide
reasonable public notice to all interested parties and public hearings or other appropriate
means for interested parties to present evid ence, views, and responses to presentations
of other parties;
b. Article 3.1, last sentence, of the Agreement on Safeguards, by failing to publish its
report "promptly";
c. Article 3.1, last sentence, or Article 4.2(c), of the Agreement on Safeguards, by failing to
provide a timetable for progressive liberalization in its Notice of 14 March 2013;
d. Articles 5.1 and 7.1 of the Agreement on Safeguards, by failing to apply the safeguard
measure as necessary to facilitate adjustment;
e. Article 7.4, first sentence, of the Agreement on Safeguards, by failing to progressively
liberalize the safeguard measure at regular intervals; or
f. Article 12.1(c) of the Agreement on Safeguards, by failing to notify the WTO Committee
on Safeguards immediately after taking a decision to apply a safeguard measure.

8.3. In the light of the conditional nature of Japan's claim under Article 12.5 regarding notification
of the results of consultations under Article 12.3 and our finding that the condition was not
fulfilled, we reached no conclusion on this claim.
8.4. With respect to the remainder of Japan's claims under Articles 2.1
601; 3.1, first sentence 602;
3.1, last sentence, and 4.2(c) 603; 4.1(a) and 4.1(b) 604; 4.2(a) 605; 5.1 606; and 11.1(a) 607 of the
Agreement on Safeguards and Articles II:1(b) and XIX:1(a) 608 of the GATT 1994, we exercised
judicial economy and reached no conclusions.
8.5. Pursuant to Article 3.8 of the DSU, in ca ses of failure to comply with obligations assumed
under a covered agreement, the measure is considered prima facie to constitute a case of
nullification or impairment of the benefits accruing from that agreement. Consequently, we find
that, to the extent that it acted inconsistently with certain provisions of the Agreement on
Safeguards and the GATT 1994, Ukraine nullified or impaired benefits accruing to Japan under
those Agreements.
8.6. Having found that Ukraine acted inconsistently with certain provisions of the Agreement on
Safeguards and the GATT 1994, as described above, in accordance with Article 19.1 of the DSU,
we recommend that the DSB request Ukraine to bring its measures into conformity with its
obligations under those Agreements.
609
8.7. Japan requested the Panel to exercise its au thority under the second sentence of Article 19.1
to suggest ways in which Ukraine could implement the recommendations of the Panel, and in
particular, to suggest that Ukraine revoke its safeguard measures.
610
8.8. Article 19.1 of the DSU states that WTO panels may suggest ways in which the Member
concerned could implement their recommendations. However, a panel is not required to make
such a suggestion. In the light of the nature and number of inconsistencies with the Agreement on
Safeguards and the GATT 1994 that we have found in this case, we suggest that Ukraine revoke
its safeguard measure on passenger cars.