RUSSIA – TARIFF TREATMENT OF CERTAIN AGRICULTURAL AND MANUFACTURING PRODUCTS REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 12 August 2016
Document codes: WT/DS485/R
Complainant: EU
Respondent: Russia
Third parties: Australia, Brazil, Canada, Chile, China, Colombia, India, Japan, South Korea, Moldova, Norway, Singapore, Ukraine, U.S.
Dispute stage: Panel
Agreements cited: Art. II:1(b), II:1(a)  GATT 1994

RUSSIA – TARIFF TREATMENT OF CERTAIN AGRICULTURAL AND
MANUFACTURING PRODUCTS
REPORT OF THE PANEL

LIST OF ANNEXES
ANNEX A
PRELIMINARY RULING OF THE PANEL
Contents Page
Annex A-1 Preliminary Ruling of the Panel A-2
ANNEX B
WORKING PROCEDURES OF THE PANEL
Contents Page
Annex B-1 Working Procedures of the Panel B-2
Annex B-2 Additional Working Procedures on BCI B-7
ANNEX C
ARGUMENTS OF THE PARTIES
EUROPEAN UNION
Contents Page
Annex C-1 First Part of the integrated executive summary of the arguments of
the European Union
C-2
Annex C-2 Second part of the integrated executive summary of the arguments of the
European Union
C-12
RUSSIAN FEDERATION
Contents Page
Annex C-3 First Part of the integrated executive summary of the arguments of the Russian
Federation
C-20
Annex C-4 Second part of the integrated executive summary of the arguments of the
Russian Federation
C-28
ANNEX D
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex D-1 Executive summary of the arguments of Australia D-2
Annex D-2 Executive summary of the arguments of Brazil D-4
Annex D-3 Executive summary of the arguments of Canada D-7
Annex D-4 Executive summary of the arguments of Chile D-10
Annex D-5 Executive summary of the arguments of Colombia D-11
Annex D-6 Executive summary of the arguments of Japan D-13
Annex D-7 Executive summary of the arguments of Norway D-17
Annex D-8 Executive summary of the arguments of Ukraine D-21
Annex D-9 Executive summary of the arguments of the United States D-23

WTO AND GATT CASES CITED IN THIS REPORT

Short Title Full Case Title and Citation
Argentina – Hides and
Leather
Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and
Import of Finished Leather, and Corr.1, adopted 16 February
2001, DSR 2001:V, p. 1779
Argentina – Import
Measures
Appellate Body Reports, Argentina – Measures Affecting the Importation of
Goods, WT/DS438/AB/R / WT/DS444/AB/R / WT/DS445/AB/R, adopted 26
January 2015
Argentina – Textiles and
Apparel
Appellate Body Report, Argentina – Measures Affecting Imports of Footwear,
Textiles, Apparel and Other Items, WT/DS56/AB/R and Corr.1, adopted 22 April
1998, DSR 1998:III, p. 1003
Argentina – Textiles and
Apparel
Panel Report, Argentina – Measures Affecting Imports of Footwear, Textiles,
Apparel and Other Items, WT/DS56/R, adopted 22 April 1998, as modified by
Appellate Body Report WT/DS56/AB/R, DSR 1998:III, p. 1033
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon,
WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, p. 3327
Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft,
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, p. 1161
Canada – Renewable Energy
/ Canada – Feed-in Tariff
Program
Panel Reports, Canada – Certain Measures Affecting the Renewable Energy
Generation Sector / Canada – Measures Relating to the Feed-in Tariff Program,
WT/DS412/R and Add.1 / WT/DS426/R and Add.1, adopted 24 May 2013, as
modified by Appellate Body Reports WT/DS412/AB/R / WT/DS426/AB/R , DSR
2013:I, p. 237
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 – Alcoholic Beverages Panel Report, Chile – Taxes on Alcoholic Beverages, WT/DS87/R, WT/DS110/R,
adopted 12 January 2000, as modified by Appellate Body Report
WT/DS87/AB/R, WT/DS110/AB/R, DSR 2000:I, p. 303
Chile – Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures
Relating to Certain Agricultural Products, WT/DS207/AB/R, adopted 23 October
2002, DSR 2002:VIII, p. 3045 (Corr.1, DSR 2006:XII, p. 5473)
China – Auto Parts Appellate Body Reports, China – Measures Affecting Imports of Automobile
Parts, WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, adopted 12
January 2009, DSR 2009:I, p. 3
China – Electronic Payment
Services
Panel Report, China – Certain Measures Affecting Electronic Payment Services,
WT/DS413/R and Add.1, adopted 31 August 2012, DSR 2012:X, p. 5305
China – Publications and
Audiovisual Products
Panel Report, China – Measures Affecting Trading Rights and Distribution
Services for Certain Publications and Audiovisual Entertainment Products,
WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by Appellate
Body Report WT/DS363/AB/R, DSR 2010:II, p. 261
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of Various
Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted
22 February 2012, DSR 2012:VII, p. 3295
Colombia – Textiles Panel Report, Colombia – Measures Relating to the Importation of Textiles,
Apparel and Footwear, WT/DS461/R and Add.1, circulated to WTO Members 27
November 2015 [appeal/adoption pending]
Dominican Republic –
Import and Sale of
Cigarettes
Appellate Body Report, Dominican Republic – Measures Affecting the
Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted 19 May
2005, DSR 2005:XV, p. 7367
EC – Approval and
Marketing of Biotech
Products
Panel Reports, European Communities – Measures Affecting the Approval and
Marketing of Biotech Products, WT/DS291/R, Add.1 to Add.9 and Corr.1 /
WT/DS292/R, Add.1 to Add.9 and Corr.1 / WT/DS293/R, Add.1 to Add.9 and
Corr.1, adopted 21 November 2006, DSR 2006:III, p. 847
EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation,
Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997,
DSR 1997:II, p. 591

Short Title Full Case Title and Citation
EC – Chicken Cuts Appellate Body Report, European Communities – Customs Classification of
Frozen Boneless Chicken Cuts, WT/DS269/AB/R, WT/DS286/AB/R, adopted 27
September 2005, and Corr.1, DSR 2005:XIX, p. 9157
EC – Computer Equipment Appellate Body Report, European Communities – Customs Classification of
Certain Computer Equipment, WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R,
adopted 22 June 1998, DSR 1998:V, p. 1851
EC – Computer Equipment Panel Report, European Communities – Customs Classification of Certain
Computer Equipment, WT/DS62/R, WT/DS67/R, WT/DS68/R, adopted 22 June
1998, as modified by Appellate Body Report WT/DS62/AB/R, WT/DS67/AB/R,
WT/DS68/AB/R, DSR 1998:V, p. 1891
EC – Fasteners (China) Panel Report, European Communities – Definitive Anti-Dumping Measures on
Certain Iron or Steel Fasteners from China, WT/DS397/R and Corr.1, adopted
28 July 2011, as modified by Appellate Body Report WT/DS397/AB/R, DSR
2011:VIII, p. 4289
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR
1998:I, p. 135
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
EC – Selected Customs
Matters
Appellate Body Report, European Communities – Selected Customs Matters,
WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX, p. 3791
EC – Tariff Preferences Appellate Body Report, European Communities – Conditions for the Granting of
Tariff Preferences to Developing Countries, WT/DS246/AB/R, adopted 20 April
2004, DSR 2004:III, p. 925
EC and certain member
States – Large Civil Aircraft
Appellate Body Report, European Communities and Certain Member States –
Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted 1
June 2011, DSR 2011:I, p. 7
Japan – Alcoholic Beverages
II
Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R,
WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, p. 97
Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and
Paper, WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, p. 1179
Korea – Various Measures
on Beef
Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled
and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001,
DSR 2001:I, p. 5
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 – Corn Syrup
(Article 21.5 – US)
Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose
Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the
DSU by the United States, WT/DS132/AB/RW, adopted 21 November 2001,
DSR 2001:XIII, p. 6675
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
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes and
Sections of Iron or Non-Alloy Steel and H-Beams from Poland, WT/DS122/AB/R,
adopted 5 April 2001, DSR 2001:VII, p. 2701
Ukraine – Passenger Cars Panel Report, Ukraine – Definitive Safeguard Measures on Certain Passenger
Cars, WT/DS468/R and Add.1, adopted 20 July 2015
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain
Corrosion-Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R
and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779
US – Certain EC Products Appellate Body Report, United States – Import Measures on Certain Products
from the European Communities, WT/DS165/AB/R, adopted 10 January 2001,
DSR 2001:I, p. 373

Short Title Full Case Title and Citation
US – COOL Panel Reports, United States – Certain Country of Origin Labelling (COOL)
Requirements, WT/DS384/R / WT/DS386/R, adopted 23 July 2012, as modified
by Appellate Body Reports WT/DS384/AB/R / WT/DS386/AB/R, DSR 2012:VI,
p. 2745
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application of
Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009, DSR
2009:III, p. 1291

EXHIBITS REFERRED TO IN THIS REPORT
Exhibit Title Short title
EU-1 Communication from the Committee on Market Access, Rectification
and Modification of Schedules, Schedule CLXV – The Russian
Federation, 1 May 2015, G/MA/TAR/RS/406; and EU objection to the
request of the Russian Federation to modify/rectify its WTO b ound
accession schedule CLXV
Russia's Request for
Rectification
EU-3 Decision No. 54 of the Board of the Eurasian Economic Commission of
16 July 2012 "On the Common Customs Tariff Regulation of the
Customs Union of the Republic of Belarus, Republic of Kaz akhstan and
the Russian Federation" (entered into force on 23.08.2012) – relevant
parts in English and Russian
Decision No. 54
EU-4 Decision No. 9 of the Board of the Eurasian Economic Commission of
29 January 2014 "On the determination of the import cust oms duty
rates in the Common Customs Tariff of the Customs Union with regard
to certain types of paper and paperboard" – in English and Russian
Decision No. 9
EU-5 Decision No. 77 of the Board of the Eurasian Economic Commission of
26 May 2014 amending th e Single Commodity Nomenclature of
Foreign Economic Activities of the Customs Union and the Common
Customs Tariff of the Customs Union in respect of certain goods in
accordance with the WTO accession commitments of the Russian
Federation and approving the draft Decision of the Council of Eurasian
Economic Commission – relevant parts in English and Russian
Decision No. 77
EU-6 Decision No. 52 of the Council of the Eurasian Economic Commission
of 16 July 2014 "On the determination of the import customs duty
rates in the Common Customs Tariff of the Customs Union in respect
of certain goods in accordance with the obligations of the Russian
Federation in the WTO" – in English and Russian
Decision No. 52
EU-7 Decision No. 47 of the Council of the Eurasian Econo mic Commission
of 23 June 2014 "Amending the Single Commodity Nomenclature of
Foreign Economic Activity of the Customs Union and the Common
Customs Tariff of the Customs Union in respect of certain goods in
accordance with the obligations of the Russian Federation to the WTO"
– relevant parts in English and Russian
Decision No. 47
EU-8 Decision No. 103 of the Board of the Eurasian Economic Commission
of 7 July 2014, Moscow "On the determination of the import customs
duty rates in the Common Customs Tariff of the Customs Union with
regard to certain types of tires and retreated tires and certain types of
footwear in accordance with the obligations of the Russian Federation
in the WTO and on the approval of the draft decision of the Council of
the Eurasian Economic Commission" – in English and Russian
Decision No. 103
EU-9 Excerpts from Schedule CLXV – The Russian Federation, Annex I to
the Protocol of Accession of the Russian Federation, circulated in
WT/ACC/RUS/70/Ad.1
Russia's Schedule
EU-10 Declaration of goods and supplementary list of 28 October 2014 – in
English and Russian
Declarations of Goods and
Supplementary Lists to
Declarations of Goods
EU-11 Declarations of goods of 17 June, 9 April, 16 June, 5 May, 3 June, 6
June, 16 June and 3 June 2015 respectively – in English and Russian
Declarations of Goods and
Supplementary Lists to
Declarations of Goods
EU-12 Declaration of goods and supplementary list of 7 June 2015 – in
English and Russian
Declarations of Goods and
Supplementary Lists to
Declarations of Goods
EU-13 Declaration of goods of 15 October 2014 – in English and Russian Declarations of Goods and
Supplementary Lists to
Declarations of Goods
EU-14 Declaration of goods of 05 November 2014 and the supplementary
lists – in English and Russian
Declarations of Goods and
Supplementary Lists to
Declarations of Goods
EU-15 Declaration of goods of 6 December 2013 and the supplementary lists
– in English and Russian
Declarations of Goods and
Supplementary Lists to
Declarations of Goods
EU-16 Declaration of goods and supplementary lists of 19 September 2014 –
in English and Russian
Declarations of Goods and
Supplementary Lists to
Declarations of Goods

Exhibit Title Short title
EU-17 Declaration of goods and supplementary lists of 10 April 2015 – in
English and Russian
Declarations of Goods and
Supplementary Lists to
Declarations of Goods
EU-18 Declaration of goods and supplementary lists of 14 June 2015 – in
English and Russian
Declarations of Goods and
Supplementary Lists to
Declarations of Goods
EU-19 Illustrative List of discrepancies related to the European Union's claim
on the Systematic Duty Variation
Illustrative List
EU-20 Specific cases of discrepancies, customs statistics of foreign trade of
Russian Federation
Customs Statistics
RUS-9 Decision No. 54 of the Counci l of the Eurasian Economic Commission
of 21 August 2015 "On the establishment of import duties of the
Common Customs Tariff of the Eurasian Economic Union in respect of
certain goods in accordance with the commitments of the Russian
Federation to the WTO" – in English and Russian
Decision No. 54
RUS-10 Decision No. 85 of the Board of the Eurasian Economic Commission of
2 June 2015 "On amending the single Commodity Nomenclature of
Foreign Economic Activity of the Eurasian Economic Union applied to
certain types of goods according to the commitments of the Russian
Federation under the WTO" – in English and Russian
Decision No. 85

ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
1980 Decision Decision of 26 March 1980 on Procedures for Modifica tion and Rectification of
Schedules of Tariff Concessions, L/4962, adopted by the Council, C/M/139
BCI Business Confidential Information
CCT Common Customs Tariff of the Eurasian Economic Union
Collins English Dictionary
online
Collins English Dictionary online,
<http://www.collinsdictionary.com/dictionary/english>
Customs Valuation
Agreement
Agreement on Implementation of Article VII of the GATT 1994
DSB Dispute Settlement Body
Decision No. 9 Decision No. 9 of the Board of the Eurasian Economic Commission
Decision No. 47 Decision No. 47 of the Council of the Eurasian Economic Commission
Decision No. 52 Decision No. 52 of the Council of the Eurasian Economic Commission
Decision No. 54 of the
Board
Decision No. 54 of the Board of the Eurasian Economic Commission
Decision No. 54 of the
Council
Decision No. 54 of the Council of the Eurasian Economic Commission
Decision No. 77 Decision No. 77 of the Board of the Eurasian Economic Commission
Decision No. 85 Decision No. 85 of the Board of the Eurasian Economic Commission
Decision No. 103 Decision No. 103 of the Board of the Eurasian Economic Commission
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
EAEU Eurasian Economic Union
EAEU Treaty Treaty on the Eurasian Economic Union
EU European Union
EUR Euro
GATT 1994 General Agreement on Tariffs and Trade 1994
Oxford English Dictionary
online
Oxford English Dictionary online, <http://www.oed.com>
Paragraph 313 Paragraph 313 of the Report of the Working Party on the Accession of Russia,
WT/ACC/RUS/70, WT/MIN(11)/2
Russia Russian Federation
Russia's Accession Protocol Protocol on the Accession of the Russian Federation, 17 December 2011,
WT/MIN(11)/24, WT/L/839
Russia's Request for
Rectification
Communication from the Committee on Market Access, Rectification and
Modification of Schedules, Schedule CLXV – The Russian Federation, 1 May
2015, G/MA/TAR/RS/406
Russia's Schedule Schedule CLXV – The Russian Federation, Annex I to the Protocol of Accession
of the Russian Federation, circulated in WT/ACC/RUS/70/Ad.1
Russia's Working Party
Report
Report of the Working Party on the Accession of Russia, WT/ACC/RUS/70,
WT/MIN(11)/2
SDV Systematic Duty Variation
Shorter Oxford English
Dictionary
New Shorter Oxford English Dictionary, 2007 (6th edition), Volumes 1 and 2
Vienna Convention Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 1155
UNTS 331; 8 International Legal Materials 679
WTO World Trade Organization

1 INTRODUCTION
1.1 Complaint by the European Union
1.1. On 31 October 2014, the European Union requested consultation s with the Russian
Federation (Russia) pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes (DSU), Article XXII of the General Agreement on Tariffs and
Trade 1994 (GATT 1994), and Article 19 of the Agreement on Implementation of Article VII of the
GATT 1994 (Customs Valuation Agreement) with respect to the measures and claims set out
below.1
1.2. The following Members asked to join th e consultations: Ukraine (on 6 November 2014)2;
Japan (on 14 November 2014) 3; the United States (on 14 November 2014) 4; and Indonesia (on
14 November 2014).5 The DSB did not receive a notification from Russia accepting these requests.
1.3. Consultations were held on 28 November 2014.6
1.2 Panel establishment and composition
1.4. On 26 February 2015, the European Union requested the establishment of a panel pursuant
to Article 6 of the DSU with standard terms of reference. 7 At its meeting on 25 March 2015, the
Dispute Settlement Body (DSB) established a panel pursuant to the request of the European Union
in document WT/DS485/6, in accordance with Article 6 of the DSU.8
1.5. The Panel's terms of reference are the following9:
To examine, in the light of the relevant provisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by the European Union in
document WT/DS485/6 and to make such findings as will assist the DSB in making
the recommendations or in giving the rulings provided for in those agreements.
1.6. On 8 June 2015 , the European Union requested the Director -General to determine the
composition of the panel, pursuant to Article 8.7 of the DSU . On 18 June 2015, the Director -
General accordingly composed the Panel as follows10:
Chairperson: Mr Ronald Saborío Soto

Members: Mr Esteban Conejos, Jr.
 Mr Gustavo Lunazzi

1.7. Australia, Brazil, Canada, Chile, China, Colombia, India, Japan, the Republic of Korea,
Moldova, Norway, Singapore, Ukraine, and the United States notified their interest i n participating
in the Panel proceedings as third parties.

1 Request for Consultations by the European Union, WT/DS485/1, 4 November 2014.
2 Request to Join Consultations – Communication from Ukraine, WT/DS485/2, 10 November 2014.
3 Request to Join Consultations – Communication from Japan, WT/DS485/3, 18 November 2014.
4 Request to Join Consultations – Communication from the United States, WT/DS485/4,
18 November 2014.
5 Request to Join Consultations – Communication from Indonesia, WT/DS485/5, 18 November 2014.
6 Request for the Establishment of a Panel by the European Union, WT/DS485/6, 27 February 2015.
7 Request for the Establishment of a Panel by the European Union, WT/DS485/6, 27 February 2015.
8 Minutes of Meeting held in the Centre William Rappard on 25 March 2015, WT/DSB/M/359,
1 May 2015, para. 6.4.
9 Constitution of the Panel established at the Request of the European Union – Note by the Secretariat,
WT/DS485/7, 19 June 2015.
10 Constitution of the Panel established at the Request of the European Union – Note by the Secretariat,
WT/DS485/7, 19 June 2015.

1.3 Panel proceedings
1.3.1 General
1.8. The Panel held its organizational meeting with the parties on 30 June 2015. After consultation
with the parties, the Panel adopted its Working Procedures11 and timetable on 3 July 2015.
1.9. The European Union filed its first written submission on 27 July 2015. Russia filed its first
written submission on 24 August 2015. Third party submissions were received on
2 September 2015 from Australia, Canada, Colombia, Japan, Norway, Uk raine, and the United
States.
1.10. The Panel held a first substantive meeting with the parties from 15 to 16 September 2015.
A session with the third parties took place on 16 September 2015.
1.11. The parties filed their rebuttal submissions on 20 October 2015.
1.12. The Panel held a second substantive meeting with the parties from 23 to
24 November 2015. On 22 December 2015, the Panel issued the Draft Descriptive Part of its
Report to the parties. The Panel issued its Interim Report to the parties on 24 February 2016. The
Panel issued its Final Report to the parties on 8 April 2016.
1.3.2 Working procedures on Business Confidential Information (BCI)
1.13. On 30 June 2015, the European Union requested the Panel to adopt additional working
procedures to protect any BCI that the parties might submit to it. In support of this request, the
European Union provided a proposal for BCI procedures. On 3 July 2015, the Panel transmitted its
own draft BCI procedures to the parties. On 8 July 2015, the European Union provided comments
on the draft prepared by the Panel. In the light of these comments, the Panel on 14 July 2015
adopted Additional Working Procedures Concerning Business Confidential Information. 12 Neither
party submitted BCI to the Panel during the course of the proceedings.
1.3.3 Preliminary ruling
1.14. On 24 August 2015, Russia submitted to the Panel a request for a preliminary ruling
pursuant to Article 6.2 of the DSU. The European Union was given and used the opportunity to
respond in writing to Russia's request on 3 September 2015. The partie s were also advised that
they could comment on Russia's request during their opening oral statements at the Panel's first
substantive meeting with the parties. The Panel additionally advised the third parties that they
could comment on Russia's request in their written submissions to the Panel, or in their oral
statements at the third party session conducted in the context of the Panel's first substantive
meeting. Taking into account Russia's request that the Panel issue a preliminary ruling prior to the
first substantive meeting (which the Panel considered not to be feasible) and Russia's reiteration at
the first substantive meeting that the Panel should rule on Russia's request as soon as possible,
the Panel issued its conclusions on Russia's request for a preliminary ruling on
18 September 2015, shortly after the end of the first substantive meeting.
1.15. The Panel issued its detailed reasons in support of its conclusions on 2 November 2015. On
the same date, the Panel asked the parties whether they would obje ct to early circulation of the
detailed reasons to the Membership. On 5 November 2015, the European Union indicated that it
would support early circulation. On the same date, however, Russia objected to circulation,
indicating that its objection was withou t prejudice to Russia's general position on the issue of
circulation of preliminary rulings to the Membership of the WTO, or to Russia's position on such
circulation in any other ongoing or future dispute to which it is or may be a party or third party.

11 See the Panel's Working Procedures in Annex B-1.
12 See the Panel's Additional Working Procedures on BCI in Annex B-2.

Accordingly, the Panel advised the parties on 10 November 2015 that it would not circulate its
detailed reasons prior to its Final Report.13
2 FACTUAL ASPECTS
2.1 The measures at issue
2.1. The European Union challenges 12 measures related to Russia's tariff treatment o f certain
agricultural and manufacturing products.
2.2. The first eleven measures are customs duties provided for in the Common Customs Tariff of
the Eurasian Economic Community (CCT) in respect of the following tariff lines14:
a. 4810 22 900 0 (certain kinds of light-weighted coated paper)
b. 4810 29 300 0 (certain paper and paperboard products in rolls)
c. 4810 92 300 0 (certain multi -ply paper and paperboard products with only one outer
layer bleached)
d. 4810 13 800 9 (certain paper and paperboard products in rolls)
e. 4810 19 900 0 (certain paper and paperboard products)
f. 4810 92 100 0 (certain multi -ply paper and paperboard products with each layer
bleached)
g. 1511 90 190 2 (certain palm oil products in tare of capacity 20,000 kg or less)
h. 1511 90 900 2 (certain palm oil products in tare of capacity 20,000 kg or less )
i. 8418 10 200 1 (freezers refrigerators household type)
j. 8418 10 800 1 (freezers refrigerators household type)
k. 8418 21 800 0 (compression-type refrigerators of a capacity exceeding 340 litres)
2.3. The European Union ch aracterizes the twelfth measure at issue as "a more general measure
consisting in systematic duty variations, to the extent that they result in the application of duties
in excess of bound rates". 15 This measure, which the European Union refers to as the "s ystematic
duty variation" (SDV) 16, consists in "systematically according certain clearly described types of
tariff treatment that lead, in each individual instance of such tariff treatment, to duties being
levied in excess of bound rates".17
3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1. The European Union requests that the Panel find that the measures at issue are, or were at
the time of the Panel's establishment, inconsistent with Russia's obligations under Articles II:1 (a)
and II:1(b) of the GATT 199 4. The European Union further requests, pursuant to Article 19.1 of
the DSU, that the Panel recommend that Russia bring its measures into conformity with its WTO
obligations, to the extent that it has not already done so.

13 The Panel's conclusions on Russia's request for a preliminary ruling, as well as the detailed reasons,
are contained in Annex A-1 of this Report.
14 European Union's first written submission, para. 31.
15 European Union's first written submission, para. 127.
16 European Union's first written submission, para. 127.
17 European Union's second written submission, para. 95.

3.2. Russia requests that the Panel fin d that the European Union's claims are outside the Panel's
terms of reference. Additionally, Russia requests the Panel to find that the sixth, seventh, eighth,
tenth, and eleventh measures challenged by the European Union have been amended or otherwise
changed since the time of the Panel's establishment, and are now consistent with Russia's
obligations under Article II:1(a) and (b) of the GATT 1994. Russia also requests the Panel to find
that, in respect of the sixth to twelfth challenged measures, the Euro pean Union failed to provide
sufficient evidence in support of its claims. Finally, in respect of the twelfth measure at issue,
Russia requests the Panel to find that the European Union failed to specify the norms and laws
establishing the measure and its precise content, or else to find that the European Union failed to
establish that the measure exists and is inconsistent with Russia's obligations under Article II:1(a)
and (b).18
4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are reflected in their executive summaries, provided to the
Panel in accordance with paragraph 19 of the Working Procedures ado pted by the Panel (see
Annexes C-1, C-2, C-3, and C-4).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of Australia, Brazil, Canada, Chile, Colombia, Japa n, Norway, Ukraine, and
the United States are reflected in their executive summaries, provided in accordance with
paragraph 20 of the Working Procedures adopted by the Panel (see Annexes D-1, D-2, D-3, D-4,
D-5, D-6, D-7, D-8, and D-9).
6 INTERIM REVIEW
6.1. On 24 February 2016, the Panel issued its Interim Report to the parties. On 9 March 2016,
the European Union and Russia each submitted written requests for the Panel to review aspects of
the Interim Report. On 23 March 2016, the European Union and Russia subm itted comments on
each other's requests for review. Neither party requested an interim review meeting.
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.
6.3. In addition to the changes indicated below that the Panel made in response to the parties'
requests for substantive modifications, the Panel corrected typographical errors and other non -
substantive editorial clarifications in the Report, including those identified by the parties.
6.1 General interpretative issues arising under Article II:1(b), first sentence, of the
GATT 1994
6.4. Regarding paragraph 7.14, the European Union requests that the Panel add a reference to
Russia's arguments in respect of (a) the definition of an ordinary customs duty in the
jurisprudence of the Appellate Body, and (b) the evidence required to establish an inconsistency
with Article II:1(b), first sentence.
6.5. The Panel does not consider it necessary to refer to the arguments of Russia that the
European Union has identified in the context of paragraph 7.14. That paragraph, and section 7.2 of
the Report more generally, is not intended to provide a comprehensive overview of all issues
relating to the interpretation of Arti cle II:1(b), first sentence. Rather, it addresses certain specific
legal issues raised by the parties. Accordingly, we do not think it is necessary to recall the
arguments mentioned by the European Union in paragraph 7.14. We do note, however, that issue
(b) is d iscussed three paragraphs down in paragraph 7.17. Similarly, issue (a) is dealt with in
paragraph 7.93. In the light of these considerations, we made no change in response to the
European Union's comment.

6.2 Claims concerning applied ad valorem duty rates tha t allegedly exceed bound ad
valorem duty rates (the first to sixth measures)
6.6. Regarding paragraphs 7.34 and 7.129, the European Union notes that it has not argued that
a temporary duty reduction in itself violates Article II:1(a). Rather, it has challenged the
temporary duty reduction in light of the fact that the measure foresaw future tariff treatment in
excess of the bound duty rate. The European Union requests that the Panel modify paragraphs
7.34 and 7.129 to reflect this. The European Union also notes that the Panel correctly
characterized its relevant claim at paragraph 7.130.
6.7. The Panel made appropriate changes to paragraphs 7.34, 7.129, and 8.1(c)(iii).
6.8. Regarding paragraphs 7.42 to 7.43, the European Union requests the Panel to reflect certain
arguments in its response to Panel question number 123.
6.9. The Panel made appropriate changes to paragraph 7.43. Regarding paragraph 7.46, the
European Union requests the Panel to omit or qualify the fourth sentence. The European Union
notes that it addressed both the fact that Russia's customs duties are prescribed by the CCT and
the fact that Russian customs authorities are required to, and do in fact, levy those duties in
individual import transactions. The European Union also suggests that the Panel refer to a
presumption that Russian customs authorities are legally required to apply the duties contained in
the CCT in each and every individual import transaction. In the European Union's view, the
presumption would better captured by the verb "impose" than the ve rb "apply". Additionally, the
European Union requests that, for greater clarity, the paragraph be modified to take into account
certain statements by Russia in its responses to Panel question numbers 34 and 52. According to
the European Union, these respon ses indicate that the adoption of customs duties applied by
Russia is in the hands of the EAEU.
6.10. The Panel deleted the fourth sentence of the paragraph. However, for the sake of
consistency with the rest of the findings, we do not find it appropriate to us e the verb "impose"
instead of "apply". Also, paragraph 7.46 already makes clear that the European Union challenges
duty rates that Russian customs authorities are legally required to apply. Finally, we see no need
to add to paragraph 7.46 by referring to elements of the identified statements of Russia. We also
note that paragraph 7.42 already makes a related point.
6.11. Regarding paragraph 7.53, the European Union requests the Panel to add a reference to
Russia's statements that the Vienna Convention on the Law of Treaties (Vienna Convention) and
the Decision of 26 March 1980 on Procedures for Modification and Rectification of Schedules of
Tariff Concessions (1980 Decision) apply cumulatively, and that Article 79 of the Vienna
Convention constitutes a rule of customary international law.
6.12. The Panel made appropriate changes to paragraphs 7.52 and 7.53.
6.13. Regarding paragraphs 7.80, 7.100, 7.101, 7.119, 7.174, 7.175, 7.198, 7.215, 7.261 and
7.262, as well as footnotes 290, 295, 296 and 343, the European Union requests that, since Russia
may have more than one customs authority, the term "customs authority" in these paragraphs and
footnotes be changed to "customs authorities".
6.14. Russia objects to the European Union's request. According to Russia, Russia has one
customs authority – the "Federal Customs Service". Russia points out that that term is used in
paragraph 306 of Russia's Working Party Report.
6.15. The Panel retained the references to "customs authority" in its Report. However, we wish to
clarify that this term is us ed generally to refer to the authority or authorities in Russia responsible
for the application to imports of customs duties provided for in the CCT.
6.16. Regarding paragraph 7.100, the European Union submits that Russia's customs authorities
are not and were not at liberty to modify the rates of customs duties, but are and were required to
apply the duties provided for in the CCT. The European Union therefore requests that the
paragraph in question state that customs authorities were required to "apply" a duty rate as from

1 January 2016, rather than that they were required to "increase" the duty rate as from 1 January
2016.
6.17. Russia agrees with the European Union that its customs authority is not, and was not, at
liberty to modify the duty rates. In this connect ion, Russia again refers to paragraph 306 of its
Working Party Report. Russia therefore asks the Panel to take into account the European Union's
comment.
6.18. The Panel made appropriate changes to paragraph 7.100.
6.19. Regarding paragraph 7.107, the European Union requests that the Panel clarify that Russia
proposed that the Panel should follow the approach taken by the panel in EC – IT Products only
with respect to the sixth measure's conformity with the first sentence of Article II:1(b).
6.20. The Panel made appropriate changes to paragraph 7.107.
6.21. Regarding paragraph 7.114, the European Union requests the Panel to clarify the cross -
reference, by replacing the reference to section 7.3.2.3 with a reference to specific paragraphs of
the Report.
6.22. The Panel made appropriate changes to paragraph 7.114.
6.3 Claims concerning applied combined duty rates that allegedly exceed bound duty
rates (the seventh to eleventh measures at issue)
6.23. Regarding paragraph 7.161, the European Union states that it has not characterised the
seventh and eighth measures as measures that have expired, but rather has stated that those
measures ceased to apply as from 1 September 2015 and were not replaced by another duty. The
European Union therefore requests the Panel to clarify the wording of that paragraph.
6.24. The Panel made appropriate changes to paragraph 7.161.
6.25. Regarding paragraphs 7.168 to 7.169, as well as other relevant paragraphs in the same
section, the European Union requests that they be modified to make reference to an argument put
forward by Ru ssia. According to the European Union, Russia argues that to establish an
inconsistency of the relevant combined applied duties with Article II:1(b), the complaining party
should provide evidence of application of duties in excess of the bound rates for a particular price
range related to the products in question, because certain products may in practice be traded in
price ranges in which duties would not exceed bound rates.
6.26. The Panel considers that this argument by Russia is addressed by its findings in section 7.2
on general interpretative issues . We fail to see the connection between Russia's argument
regarding how to demonstrate inconsistency with Article II:1(b), first sentence, and paragraphs
7.168 and 7.169, which concern the issue of the precise mea sure on which we should make
findings. We therefore made no change to the section that contains paragraphs 7.168 and 7.169.
However, we modified paragraphs 7.14 and 7.17, which are part of section 7.2, to reflect Russia's
argument.
6.27. Regarding paragraph 7.17 5, the European Union states that it has not argued that Russia
never applied a cap for any tariff line, at any point in the past. The European Union requests the
Panel to clarify the paragraph accordingly.
6.28. The Panel made appropriate changes to paragraph 7.175.
6.29. Regarding paragraph 7.187, the European Union requests that the Panel explicitly refer to
Russia's argument in paragraph 33 of Russia's second written submission that paragraph 313 of
Russia's Working Party Report informs the content of Russia's obligations under Article II:1.
6.30. The Panel made appropriate changes to paragraph 7.187, as well as a corresponding change
to paragraph 7.183.

6.31. Regarding the final sentence of paragraph 7.194, the European Union requests the Panel to
clarify that it is making an observation concerning the explicit wording of paragraph 313.
6.32. The Panel made appropriate changes to paragraph 7.194.
6.33. Regarding paragraph 7.198, the European Union notes that paragraph 313 of Russia's
Working Party Report aims to ensure that the specific e lement of an applied combined duty does
not exceed the ad valorem element of that same duty for the average customs value calculated
over three years, rather than seeking to ensure that the same amount of duty is levied, in every
particular transaction or on average. The European Union requests the Panel to clarify its
statement in paragraph 7.198 accordingly.
6.34. The Panel made appropriate changes at paragraph 7.198, as well as corresponding changes
to paragraphs 7.197 and 7.200.
6.35. Regarding paragraph 7.202, t he European Union requests the Panel to insert specific
language concerning the applicability of Article II:1(b) even in the absence of actual import
transactions and a reference to the Panel's analysis at paragraphs 7.15 to 7.17 of the Report.
6.36. The Panel made appropriate changes to paragraph 7.202, including to footnote 271.
6.37. Regarding the first two sentences of paragraph 7.205, the European Union notes that Russia
in its responses to Panel question numbers 70, 90 and 97(c) explicitly confirmed the Panel's
understanding. The European Union requests the Panel to make reference to those statements.
6.38. The Panel added a reference to Russia's statements to footnote 260, which contain the
Panel's summary of Russia's arguments on this issue.
6.39. Regarding footnote 272, the European Union requests the Panel to replace the words "based
on" with "in conformity with", in order to avoid giving the impression that the Customs Valuation
Agreement forms the basis of the Panel's reasoning in this section.
6.40. The Panel made appropriate changes to footnote 272.
6.41. Regarding paragraph 7.215, the European Union requests that the word "above" be
replaced with the words "in excess of".
6.42. The Panel notes that its use of the word "above" in paragraph 7.215 is consistent with its
general use of this term throughout the Report. We also note that we have used the expression "in
excess of" in our conclusions sections. We therefore made no change in response to the European
Union's comment.
6.43. Regarding paragraphs 7.215 and 7.217, the European Union re quests a modification to
these paragraphs and other related paragraphs. According to the European Union, the Panel
should repeat or make reference to the more general finding in paragraphs 7.168 and 7.169, as
well as parts of paragraph 7.171, that the desi gn and structure of an applied duty in the form of
"x% but not less than y per unit of measurement", where the bound duty is simply "x%", indicates
inconsistency with Article II:1(b).
6.44. Russia objects to the European Union's request. According to Russia, th e Panel's findings in
paragraphs 7.215 and 7.217 cannot be considered as a general finding that the design and
structure of a duty in the form "x%, but not less than y per unit of measurement", where the
bound duty is x%, indicates inconsistency with Artic le II:1(b). Rather, Russia considers that these
paragraphs only concern the ninth measure at issue, because the value of "y" in respect of the
ninth measure was the same before and after that measure was amended.
6.45. The Panel notes that paragraphs 7.168, 7.169, and 7.171 of the Panel's Report do not make
any "general findings" regarding the consistency of a duty rate of a particular design or structure.
Those particular paragraphs do not find that the duties are inconsistent merely by virtue of their
design or structure. Those paragraphs rather concern whether the Panel should consider the
measure at issue as it existed at the time of the Panel's establishment or as amended.. Paragraphs

7.168 to 7.169 indicate only that the design and structure of the relevant applied duty rate did not
change following amendment. Paragraph 7.171, when read in full, indicates that in deciding which
precise measure to rule on, we did not rely solely on the design and structure of the measure , but
rather looked at the precise values assigned to the ad valorem element of the duty rate during the
relevant periods. Indeed, the Panel only made findings regarding the measures' consistency later
in the Report, after examining in detail the evidence submitted by the parties. We therefore m ade
no change to paragraphs 7.215 or 7.217 in response to the European Union's request.
6.46. Regarding paragraph 7.216 and other related paragraphs in the Report, the European Union
requests that these paragraphs be modified to take account of the European Uni on's statements in
paragraphs 85 and 87 of its first written submission that the break -even price can be determined
mathematically, and paragraph 58 of its second written submission, stating that an applied duty
expressed as "x% but not less than y per uni t of measurement" will exceed a bound rate
expressed as "x%" for every customs value below "y divided by x%", as long as there is no
additional mechanism like a ceiling.
6.47. The Panel notes that footnote 245 of its Report already reflects relevant statements by the
European Union. Nevertheless, we made appropriate changes to clarify paragraphs 7.216, 7.219
and 7.265.
6.48. Regarding Figures 1 to 4 in paragraphs 7.216, 7.220, 7.264 and 7.265, the European Union
requests the Panel to indicate the break -even price on the lower axis, given that, in its view, all
the other relevant values on the lower axis are provided, and the Figures were clearly drawn up on
the basis of a certain value for the break-even prices.
6.49. The Panel does not accept the European Union's assertio n regarding the basis for preparing
the Figures. Nevertheless, as Figures 1 to 4 in paragraphs 7.216, 7.220, 7.264 and 7.265 could be
simplified further without losing their illustrative value, we did so.
6.50. Regarding paragraphs 7.222 and 7.267, the European Union states that the Panel is
required to examine all evidence submitted to it, and therefore requests the Panel to replace the
words "to have regard to" with the words "base our reasoning on".
6.51. The Panel made appropriate changes at paragraph 7.222, as well as a corresponding change
at paragraph 7.267.
6.4 Claims concerning the twelfth measure ("Systematic Duty Variation")
6.52. Regarding paragraph 7.357, Russia requests the Panel to reflect argumentation set out in
Russia's opening statement at the second meeting of the Panel. Russia proposes wording to that
effect.
6.53. The European Union objects to Russia's request. According to the European Union, Russia's
proposed modifications are not relevant since none of them concern the issue of a "significant
number" of tariff lines.
6.54. The Panel considers that some of the arguments indicated in Russia's request are relevant
to the issue identified at paragraph 7.357. Accordingly, we made appropriate changes to
paragraph 7.357.
6.55. Regarding paragraph 7.372, Russia requests the Panel to reflect its responses to Question
Nos. 106 and 107. Russia proposes wording to that effect.
6.56. The European Union objects to Russia's request. According to the European Union, Russia's
proposed modifications would diminish the clarity of the Panel's Report.
6.57. The Panel considers that some of the arguments indicated in Russia's request are relevant
to the discussion already reflected at paragraph 7.372. Accordingly, we made appropriate changes
to that paragraph.

6.58. Regarding paragraph 7.395, Russia requests the Panel to reflect its argumentation set forth
in its opening and closing statements at the second meeting of the Panel, as well as in its
comments on the European Union's response to Question No. 117. Russia proposes wording to
that effect.
6.59. The European U nion objects to Russia's request. According to the European Union, the
arguments indicated in Russia's request are not significantly different from those mentioned in the
footnote accompanying paragraph 7.395, and in any event do not warrant the conclusion that they
go to the question of whether the SDV could be said to be "general".
6.60. The Panel considers that some of the arguments indicated in Russia's request are relevant
to the issue identified at paragraph 7.395. Accordingly, we made appropriate changes to
paragraph 7.395, and deleted the accompanying footnote because it was no longer necessary in
view of the change.
6.61. Regarding paragraph 7.408, the European Union states that the Report in other sections
recognizes and analyses the relationship of the dutie s contained in the Illustrative List to the
European Union's claims related to the Systematic Duty Variation (SDV). According to the
European Union, it is therefore incorrect to say that those duties "do not relate to specific
measures at issue covered by the panel request". The European Union further states that if the
phrase were to refer to something other than the SDV, it would seem out of place and
unnecessary for the Panel's reasoning with respect to its conclusion on the SDV. The European
Union therefore requests that this sentence be omitted.
6.62. Russia objects to the European Union's request. In Russia's view, the sentence in question
correctly reflects the fact that the European Union challenged the SDV as a single measure, but did
not challenge the i ndividual duties that constitute the SDV. According to Russia, the Panel made
the necessary findings to secure a positive solution to the dispute.
6.63. The Panel deleted the relevant sentence at paragraph 7.408, as it was not essential.
7 FINDINGS
7.1 Overview of claims
7.1. In its request for the establishment of a panel, the European Union identifies 12 measures at
issue, claiming that each of these 12 measures is inconsistent with Article II:1(a) and (b), first
sentence, of the GATT 1994.19
7.2. Article II:1(a) and (b), first sentence, state in relevant part that:
(a) Each contracting party shall accord to the commerce of the other contracting
parties treatment no less favourable than that provided for in the appropriate
Part of the appropriate Schedule annexed to this Agreement.
(b) 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 Schedule relates, and subject t o
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.
7.3. The first 11 challenged measures consist of customs duties required to be applied by Russia
concerning 11 distinct tariff lines:

19 In its request for establishment of a panel (panel request), the European Union claimed that Russia
acted inconsistently with Article II:1(b), second sentence, of the GATT 1994. The European Union has not
made this claim in its subsequent submissions and statements. The Panel does not, therefore, address this
claim in these findings.

Challenged measure Tariff line Product category
The first measure 4810 22 900 0 Paper and paperboard products
The second measure 4810 29 300 0 Paper and paperboard products
The third measure 4810 92 300 0 Paper and paperboard products
The fourth measure 4810 13 800 9 Paper and paperboard products
The fifth measure 4810 19 900 0 Paper and paperboard products
The sixth measure 4810 92 100 0 Palm oil and its fractions
The seventh measure 1511 90 190 2 Palm oil and its fractions
The eighth measure 1511 90 990 2 Palm oil and its fractions
The ninth measure 8418 10 200 1 Combined refrigerator-freezers
The tenth measure 8418 10 800 1 Combined refrigerator-freezers
The eleventh measure 8418 21 100 0 Refrigerators
7.4. In addition, the European Union challenges as the twelfth measure an alleged unwritten
measure that it terms the "Systematic Duty Variation" (SDV).
7.5. The European Union's 12 claims20 can be grouped into three categories:
a. The first to sixth claims all relate to applied ad valorem duty rates allegedly in excess of
bound ad valorem duty rates;
b. The seventh to eleventh claims all relate to applied combined duty rates allegedly in
excess of bound duty rates:
i. The seventh to ninth claims all relate to applied combined duty rates allegedly in
excess of bound ad valorem duty rates;
ii. The tenth and eleventh claims both relate to applied combined duty rates allegedly in
excess of bound combined duty rates; and
c. The twelfth claim relates to the SDV, which allegedly re sults in an unspecified number of
applied combined duty rates in excess of bound duty rates.
7.6. The Panel notes that the parties in this dispute have used the term "combined" duty rates as
it is used in the Working Party Report on Russia's Accession (Russia' s Working Party Report), to
refer to duty rates sometimes described as "mixed" duty rates. 21 Paragraph 311 of Russia's
Working Party Report explains that "combined (mixed) duties [a]re expressed in terms of
alternative rates, one as an ad valorem rate and t he other as a specific rate that serve[s] as a
minimum rate of duty". 22 Such duties take the form "x% but not less than y per unit". For the
purposes of this Report, we also use the term "combined" duty rates to refer to combined duties
that include an additional ad valorem element. These duties take the form "z%; or x% but not less
than y per unit; whichever is the lower". In respect of all 12 claims, the European Union requests
the Panel to find that Russia is or was required to apply duty rates in excess of the relevant bound
duty rates in Russia's Schedule of Concessions (Schedule) 23, and that Russia therefore acted
inconsistently with Article II:1(b), first sentence. The European Union additionally requests the
Panel to find as a consequence that Russia h as also acted inconsistently with Article II:1(a), by
according to imports from other Members treatment less favourable than that provided for in its
Schedule. The European Union challenges all 12 measures as such, and not as applied.24
7.7. In respect of the si xth measure, the European Union has made two distinct claims. The first
claim concerns the ad valorem duty rate that was provided for at the time of the Panel's
establishment, but which was to become effective only on 1 January 2016. The European Union
requests that in respect of the duty rate to be applied as of 1 January 2016, the Panel make a

20 To recall, in respect of each "claim", the European Union requests findings under both Article II:1(a)
and (b), first sentence.
21 Report of the Working Party on the Accession of Russia, WT/ACC/RUS/70, WT/MIN(11)/2, (Russia's
Working Party Report), para. 311.
22 Russia's Working Party Report, para. 311.
23 Schedule CLXV – The Russian Federation, Annex I to the Protocol of Accession of the Russian
Federation, circulated in WT/ACC/RUS/70/Ad.1, (Russia's Schedule), (Exhibit EU-9).
24 Annex A-1, Preliminary Ruling, paras. 2.25-2.26.

finding of inconsistency with Article II:1(b), first sentence, and consequently Article II:1(a). The
European Union's second claim concerns the temporary reduction of the applied duty rate to the
level of the bound duty rate. This reduced duty rate was allegedly in force at the time of the
Panel's establishment. The European Union requests the Panel to find that at the time of the
Panel's establishment Russia was req uired to act inconsistently with Article II:1(a) because it only
temporarily reduced the applied duty rate to the level of the bound duty rate.
7.8. As noted in paragraph 1.14 above, Russia submitted a request for a preliminary ruling
pursuant to Article 6.2 of the DSU. Russia challenged a number of aspects of the European Union's
panel request. Russia requested the Panel to find that all of the European Union's claims were
outside the Panel's terms of reference. 25 The Panel's preliminary ruling is contained in Annex A-1
of this Report, and forms an integral part of the present findings. As indicated therein, we
concluded that none of the claims or measures identified by European Union in its panel request
falls outside the Panel's terms of reference.
7.9. As regards the merits of the European Union's claims, Russia initially requested that the
Panel reject all of the European Union's claims in this dispute. Subsequently, Russia requested only
that the Panel reject the Euro pean Union's claims in respect of the sixth to twelfth measures at
issue.26
7.10. The Panel will address the European Union's claims in three separate parts, consistent with
the three categories described in paragraph 7.5 above. We shall first address the European Union's
claims in respect of applied 27 ad valorem duty rates allegedly in excess of bound duty rates (the
first to sixth measures); second, we address the European Union's claims in respect of applied
combined duty rates allegedly in excess of bound duty rates (the seventh to eleventh measures);
and third, we address the European Union's claim in respect of the SDV (the twelfth measure).
7.2 General interpretative issues arising under Article II:1(b), first senten ce, of the
GATT 1994
7.11. As all 12 of the challenged measures are claimed to be in breach of Article II:1(b), first
sentence, we will address as a preliminary matter two general interpretative issues that arise in
the context of Article II:1(b), first sentence.
7.12. First, the European Union argues that because Article II:1 protects competitive
opportunities of imported products and not trade flows as such, a finding of inconsistency with
Article II:1 does not hinge upon the actual effects of the contested measure in the marketplace.28
The European Union also notes that Appellate Body jurisprudence indicates that a finding of
inconsistency under Article II:1(b), first sentence, can result directly from the structure and design
of an applied customs duty. 29 Therefore, according to the European Union, all that is required to
ground a finding of inconsistency with Article II:1 is the existence of ordinary customs duties that
are in excess of those provided in the relevant schedule.30
7.13. Second, the European Union notes that the phrase "in excess of" not only appears in Article
II:1(b), first sentence, but also in Article III:2, first sentence, of the GATT 1994 31, where it has
been interpreted as prohibiting even the smallest amount of excess, and is not conditional on a
trade effects test, qualified by a de minimis standard, or contingent on showing evidence of actual

25 Russia's request for a preliminary ruling, para. 67.
26 Russia's second written submission, para. 108. See also generally Russia's opening and closing
statements at the first and second meetings of the Panel.
27 We use the term "applied" duty rates to mean duty rates either "actually applied" or "applicable".
28 European Union's first written submission, para. 38 (referring to Appellate Body Report, US – FSC
(Article 21.5 – EC), paras. 215 and 221; and Panel Reports, Argentina – Hides and Leather, para. 11.20; US –
29 European Union's first written submission, para. 40 (referring to Appellate Body Report, Argentina –
Textiles and Apparel, paras. 53-54).
30 European Union's first written submission, para. 38 (referring to Appellate Body Report, US – FSC
(Article 21.5 – EC), paras. 215 and 221; and Panel Reports, Argentina – Hides and Leather, para. 11.20; US –
31 Article III:2, first sentence, requires that Members not impose on products imported from other
Members internal taxes (or other internal charges) in excess of those applied to like domestic products.

transactions in which taxes or duties were applied "in excess". 32 The European Union argues that
Article II:1(b), first sentence, similarly applies to duties that are in excess of bound duty rates
even when the margin by which they exceed those duty rates is small, even when they exceed
those duty rates only with respect to some categories of transactions, and even when it cannot be
positively established that actual transactions have already taken place.33
7.14. Russia submits that the European Union has failed to explain "why this analogy [to Article
III:2] is … appropriate". In Russia's view, the European Union's interpretation is merely an
"unsubstantiated assertion". 34 Thus, Russia argues, the European Union has failed to meet its
burden of proof. Russia additionally argues in respect of evidence of actual import transactions
that where a complaining party alleges that an applied duty rate exceeds the bound duty rate on ly
within a certain price range, the complaining party should provide evidence of the actual
application of duties in excess of the bound rates because the relevant products may in practice be
traded in price ranges in which the applied duties would not exceed the bound rates.35
7.15. The Panel first addresses the issue of whether, in a dispute involving as such claims, a
finding of inconsistency with Article II:1(b), first sentence, is conditional on evidence of actual
import transactions concerning products fal ling within the relevant tariff lines, or on a "trade
effects" test (that is to say, evidence of adverse trade effects resulting from the challenged
measures).
7.16. With respect to evidence of actual import transactions, we note that in Colombia –
Textiles36, the responding party argued that the complaining party had not established a prima
facie case because it had not "provided any evidence to show 'that apparel and footwear [we]re
being imported at prices which violated the levels bound by [the responding part y].'"37 The panel
in that dispute stated that:
[I]n Argentina – Textiles and Apparel, in reaching a finding of inconsistency with
Article II:1 of the GATT 1994, the panel and the Appellate Body based themselves on
the "very nature" (in the words of the pan el) or the "structure and design" (in the
words of the Appellate Body) of the measure at issue. The empirical evidence on the
application of the measure examined by the Panel [in Argentina – Textiles and
Apparel] did not constitute indispensable evidence for its analysis but rather served to
confirm the previous conclusions regarding the "nature" of the measure.
In the context of [ Colombia – Textiles], … Decree No. 456 is sufficient in itself to
conduct an analysis of whether Panama has established a prima facie case that the
compound tariff is inconsistent with Article II:1(a) and Article II:1(b), first sentence,
of the GATT 1994.38
7.17. We see no reason to follow a different approach in respect of this issue. Thus, we will
conduct our analysis on the basis that a finding of inconsistency under Article II:1(b), first
sentence, does not require a complaining party to demonstrate the existence of actual transactions
concerning products falling within the alleged tariff lines. It follows that a complaining party also
does not need to demonstrate the existence of actual transactions involving relevant products that
fall within particular price ranges. Indeed, we note that prices may change over time. Therefore,
we do not consider that the absence of evidence of actual transactions in a given price range
proves that transactions in that price range would or could never exist.

32 European Union's first written submission, para. 40 (referring to Appellate Body Report, Japan –
Alcoholic Beverages II, p. 23, DSR 1996:I, 97, at 115; and Panel Report, Mexico – Taxes on Soft Drinks, paras.
8.52 and 8.57).
33 European Union's first written submission, para. 40.
34 Russia's first written submission, para. 19.
35 Russia's first written submission, paras. 18-19; second written submission, para. 75.
36 We note that the panel report in Colombia – Textiles was circulated subsequent to the second
meeting of the Panel with the parties in this dispute.
37 Panel Report, Colombia – Textiles, para. 7.113 (referring to Appellate Body Report, Argentina –
Textiles and Apparel, paras. 53, 55 and 62, and quoting Colombia's opening statement at the first meeting of
the Panel, para. 60).
38 Panel Report, Colombia – Textiles, paras. 7.122-7.123. (footnote omitted) See also paras. 7.113-
7.124.

7.18. In respect of adverse trade effects, the Appellate Body has explained that trade effects are
"irrelevant" to findings under Article III of the GATT 1994 because "Article III protects
expectations not of any particular trade volume but rather of the equal competitive relationship
between imported and domestic products." 39 The panel in EC – IT Products explained that,
similarly, Article II generally, wi thout reference to any particular paragraph, protects expectations
of a competitive relationship (or conditions of competition) and not expectations of any particular
trade volume.40 This is in accord with the statement of the panel in Argentina – Hides and Leather
that "Article XI:1, like Articles I, II and III … protects competitive opportunities of imported
products, not trade flows." 41 Further support for the view that evidence of actual trade effects is
not essential can be found in the Appellate Body's observation that "the disciplines of the GATT
and the WTO, as well as the dispute settlement system, are intended to protect not only existing
trade but also the security and predictability needed to conduct future trade". 42 As Article II:1(b),
first sentence, is concerned with tariff bindings and thus market access conditions, it is difficult to
think of another discipline of the GATT 1994 for which it would be more true to say that it is
intended to protect not only existing trade, but also the security an d predictability needed to
conduct future trade. Thus, in accordance with the jurisprudence cited above, we consider that
Article II:1(b), first sentence, protects conditions of competition, and not trade volumes.
7.19. This view is consistent with the approach followed by the Appellate Body in Argentina –
Textiles and Apparel. As mentioned above, there the Appellate Body indicated that a finding of
inconsistency with Article II:1(b), first sentence, can be made on the basis of the structure and
design of an imp ugned duty.43 The Appellate Body did not rely on any evidence of adverse trade
effects in making its findings of inconsistency. Similarly, and as discussed above, the panel in
Colombia – Textiles made findings of inconsistency based solely on the "text" of the relevant
measures.44
7.20. For these reasons, we will conduct our analysis on the basis that a finding of inconsistency
under Article II:1(b), first sentence, does not require a complaining party to demonstrate adverse
trade effects concerning products falling within the relevant tariff lines.
7.21. On the second issue, whether Article II:1(b), first sentence, permits an applied duty rate to
exceed the relevant bound duty rate up to a de minimis level, we recall that Article II:1(b), first
sentence, prohibits the i mposition of ordinary customs duties "in excess" of those set forth in a
Schedule.45 The Appellate Body stated in this respect that "[a] tariff binding in a Member's
Schedule provides an upper limit on the amount of duty that may be imposed, and a Member is
permitted to impose a duty that is less than that provided for in its Schedule." 46 Similarly, the
panel in EC – IT Products stated that "if we were to determine that the applied duty rate exceeds
the bound duty rate, then … the application of customs dutie s would be 'in excess' of those
provided for in the EC Schedule" .47 While these statements do not explicitly address the issue of a
de minimis exception, they equally do not suggest that Members may exceed the bound duty rates
even minimally. A more specific inquiry is therefore in order.
7.22. The dictionary definition of the noun "excess" is "[t]he amount by which one number or
quantity exceeds another". 48 More specifically, "in excess of" means "more than". 49 Thus, as a
textual matter, a particular number or quan tity is "in excess of" another number or quantity if it is
greater, regardless of the extent to which it is greater.

39 Appellate Body Report, Japan – Alcoholic Beverages II, p. 15, DSR 1996:I, 97, at 110.
40 Panel Report, EC – IT Products, para. 7.757.
41 Panel Report, Argentina – Hides and Leather, para. 11.20 (footnotes omitted).
42 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 82 (footnote omitted).
43 Appellate Body Report, Argentina – Textiles and Apparel, paras. 53, 55 and 62.
45 We have explained above that a finding of inconsistency with Article II:1(b), first sentence, requires
no demonstration of adverse trade effects. Consequently, it is not relevant to examine whether there could be
adverse trade effects that are de minimis.
46 Appellate Body Report, Argentina – Textiles and Apparel, para. 46 (emphasis added).
47 Panel Report, EC – IT Products, para. 7.102.
48 Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 2, p. 886.
49 Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 2, p. 886.

7.23. Looking at the context of Article II:1(b), first sentence, we note that Article III:2, first
sentence, of the GATT 1994 is cast in very similar terms and in fact uses the phrase "in excess of":
The products of the territory of any contracting party imported into the territory of
any other contracting party shall not be subject … to internal taxes or other internal
charges of any kind in excess of those applied … to like domestic products (emphasis
added).
7.24. The Appellate Body has interpreted this provision to mean that:
Even the smallest amount of "excess" is too much. The prohibition of discriminatory
taxes in Article III:2, first sentence, is not conditional on a "trade effects test" nor is it
qualified by a de minimis standard.50
7.25. Russia effectively asks us to take no notice of this statement concerning Article III:2, first
sentence, in our interpretative analysis under Article II:1(b), firs t sentence. Indisputably, these
are two different provisions with different scopes of application. Article III:2, first sentence,
concerns internal taxes applied to imported goods, whereas Article II:1(b), first sentence, relates
to customs duties applied to imports at the border. However, both Articles II:1(b) and III:2
concern the imposition of charges on products, and both provisions require an assessment of
whether an imposed charge "exceeds" another charge (the customs duty set forth in a Member's
schedule or the internal tax applied to like domestic products). Moreover, both customs duties and
internal taxes can, from an economic perspective, be used as instruments to afford protection to
domestic production. Taking into account the Appellate Body's interpretation o in respect of Article
III:2, first sentence, it would be incongruous if an internal tax could not be used to provide even
the slightest degree of protection to domestic "like" products under Article III:2, first sentence, but
additional protection could be provided to such products through the application of a duty rate that
slightly exceeds the bound duty rate.
7.26. In view of the aforementioned substantial similarities between Articles II:1(b), first
sentence, and III:2, first sentence, it appe ars to us that the Appellate Body's interpretation of the
identical phrase "in excess of" in Article III:2, first sentence, is relevant to the interpretation of
Article II:1(b), first sentence, and that these two provisions should be interpreted harmonious ly.
We observe in addition that this being an interpretative issue, we do not agree with Russia that it
was for the European Union to prove the legal correctness of its reliance on jurisprudence
concerning Article III:2, first sentence.51
7.27. We turn, finally, to the object and purpose of the GATT 1994, which the Appellate Body has
stated is "to preserve the value of tariff concessions negotiated by a Member with its trading
partners, and bound in that Member's Schedule". 52 The Appellate Body has further explaine d that
"the security and predictability of 'the reciprocal and mutually advantageous arrangements
directed to the substantial reduction of tariffs and other barriers to trade' is an object and purpose
of the WTO Agreement , generally, as well as of the GATT 1994".53 In our view, a de minimis
exception to the obligation not to exceed tariff bindings, far from preserving the value of tariff
concessions, would allow importing Members to diminish their value, however slightly. Such an
exception would also detract from the security and predictability of tariff concessions inasmuch as
it would then be unclear ex ante precisely what tariff treatment would be accorded to imports.
7.28. In the light of the text, context, and object and purpose of Article II:1(b) first sente nce, we
find that Article II:1(b), first sentence, admits of no de minimis exception. Consequently, an

50 Appellate Body Report, Japan – Alcoholic Beverages II, p. 23, DSR 1996:I, 97, at 115 (footnotes
omitted).
51 Appellate Body Report, EC – Tariff Preferences, para. 105 ("[I]t is not the responsibility of the [party
invoking a WTO provision] to provide us with the legal interpretation to be given to [that] particular
provision").
52 Appellate Body Report, Argentina – Textiles and Apparel, para. 47.
53 Appellate Body Report EC – Computer Equipment, para. 82 (referring to Panel Report, EC - Computer
Equipment, para. 8.25). See also Appellate Body Report, EC – Chicken Cuts, para. 243; and Panel Report,
Colombia – Textiles, para. 7.128).

importing Member in our view must not exceed a tariff binding, even if the extent of the excess is
only minimal.
7.29. As an additional but separate matter , it is useful to address in this section one additional
interpretative issue arising in respect of Article II:1(b), first sentence, even though it is relevant
only to the claims concerning the seventh to eleventh measures. In that context, the European
Union has argued that under Article III:2, first sentence, Members may not balance more
favourable treatment of imported products in some instances against less favourable treatment of
the same imported products in other instances. 54 The European Union argues th at this
interpretation applies equally in the context of Article II:1.
7.30. Russia has not contested this particular argument. However, we recall Russia's general
concerns regarding the appropriateness of transposing jurisprudence concerning Article III:2 to
Article II:1.55
7.31. We note in this regard that according to the panel in Argentina – Hides and Leather:
The mere fact that, under certain circumstances, imports are taxed at a lower rate
than internal sales is not sufficient to exclude a violation of Article III:2, first
sentence, in accordance with the well -established principle that more favourable
treatment of imports in certain instances may not be balanced against less favourable
treatment of imports in other cases.56
7.32. Moreover, we find relevant the followin g observation by the Appellate Body, which refers
specifically to the imposition of customs duties in excess of a bound duty rate:
There is no indication in previous Appellate Body Reports addressing the Anti-Dumping
Agreement or in the Harmonized System to indicate that levying tariffs in excess of a
bound rate on the importation of a product could be "offset" or justified by levying
tariffs below the bound rate on another importation of that product.57
7.33. In this respect, we recall that Article II:1(b), fir st sentence, is not subject to a de minimis
exception. Logically, this finding must also cover a minor (or major) departure from a bound duty
rate in respect of particular import transactions even if accompanied or followed by application of a
symmetrically lower duty rate in respect of other import transactions. We consider that the
reasoning we have developed above in paragraphs 7.21 to 7.28 applies with equal force to the
interpretative issue at hand. We therefore find that A rticle II:1(b), first sentence, prohibits duties
imposed in excess of a bound duty, even if these duties are balanced or offset (at the same time
or later) by duties imposed on identical products that are below the bound duty.
7.3 Claims concerning applied ad valorem duty rates that allegedly exceed bound ad
valorem duty rates (the first to sixth measures)
7.34. The Panel now turns to assess the European Union's first set of claims, which concern the
first to sixth measures at issue. The European Union claims that the ad valorem duty rates that the
CCT requires Russia to apply in respect of these measures are in excess of the bound ad valorem
duty rates contained in Russia's Schedule. According to the Europ ean Union, the measures are
therefore inconsistent as such with Article II:1(b), first sentence, of the GATT 1994, and
consequently Article II:1(a) of the GATT 1994. As mentioned above58, the sixth measure involves
a temporary reduction of the applied duty rate. According to the European Union, th is temporary
duty reduction also renders the sixth measure independently in consistent as such with
Article II:1(a) of the GATT 1994, as the measure at the same time provides for a future duty rate

54 European Union's second written submission, para. 73 (referring to Panel Report, Argentina – Hides
and Leather, para. 11.260).
55 See paragraph 7.14 above.
56 Panel Report, Argentina – Hides and Leather, para. 8.176 (referring to GATT Panel Reports, US -
Tobacco, para. 98; US - Section 337, para. 5.14; and Panel Report, US - Gasoline, paras. 6.14-6.15).
57 Appellate Body Report, US –Softwood Lumber V (Article 21.5 – Canada), para. 115.
58 See paragraph 7.7 above.

that exceeds the bound duty rate. We therefore address the first to fifth measures together, before
addressing the sixth measure separately.
7.3.1 Claims concerning the first to fifth measures
7.35. We first turn to the European Union's claims concerning the first to fifth measures at issue,
which concern ad valorem duty rates required to be applied by Russia in respect of tariff lines
4810 22 900 0, 4810 29 300 0, 4810 92 300 0, 4810 19 900 0, and 4810 13 800 9.
7.36. The European Union claims that the duty rates required to be applied by Russia in respect of
these tariff lines are in excess of the relevant bound duty rates, and that is the first to fifth
measures are therefore inconsistent as such with Article II:1(b), first sentence, and consequently
inconsistent as such with Article II:1(a), of the GATT 1994.59
7.37. Russia initially suggested that the relevant bound duty rates inscribed in its Schedule reflect
errors, and that it attempted to correct those errors in its Schedule. According to Russia, the
European Union did not act in good fai th by objecting to this attempt. 60 Subsequently, Russia
stated that it was not raising this as a defence. 61 Russia did not put forward additional arguments
specific to these claims of the European Union.
7.38. The Panel will proceed by describing the measures and applied duty rates at issue, before
assessing the consistency of the challenged measures under Article II:1.
7.3.1.1 Measures and applied duty rates at issue
7.39. According to the European Union, Russia imposes an ad valorem duty rate of 15% for
products imported under tariff lines 4810 22 900 0 and 4810 92 300 0, as required by the CCT as
amended by Decision No. 54 of the Board of the Eurasian Economic Commission (Decision No. 54).
Additionally, according to the European Union, Russia imposes an ad valorem duty rate of 10% for
products imported under tariff lines 4810 29 300 0, 4810 13 800 9, and 4810 19 900 0, as
required b y the CCT as amended by Decision No. 9 of the Board of the Eurasian Econ omic
Commission (Decision No. 9 ) and Decision No. 77 of the Board of the E urasian Economic
Commission (Decision No. 77).62
7.40. Russia has not specifically contested that it imposes these duty rates as required by the
CCT.
7.41. The Panel notes that there is no dispute between the parties as to the ad valorem duty rates
required to be appl ied by Russia in respect of the first five measures. Based on the evidence
presented, we find that the relevant applied duty rates are as follows:
Challenged measure Tariff line Russia's applied duty rate
The first measure 4810 22 900 0 15%63
The second measure 4810 29 300 0 10%64
The third measure 4810 92 300 0 15%65
The fourth measure 4810 13 800 9 10%66
The fifth measure 4810 19 900 0 10%67

59 European Union's first written submission, para. 50.
60 Russia's first written submission, paras. 47-64 and 80-86.
61 Russia's responses to Panel question Nos. 40 and 59.
62 The European Union indicates that all duty rates required to be applied by Russia and challenged in
these proceedings can be located within the Common Customs Tariff of the Eurasian Economic Union (CCT), as
amended by certain Decisions of the Council of the Eurasian Economic Commission, and certain Decisions of
the Board of the Eurasian Economic Commission. European Union's first written submission, para. 33.
63 Section X, Chapter 48 of the CCT, as amended by Decision No. 54 of the Board of the Eurasian
Economic Commission, (Decision No. 54 of the Board), (Exhibit EU-3).
64 Section X, Chapter 48 of the CCT, as amended by Decision No. 9 of the Board of the Eurasian
Economic Commission, (Decision No. 9), (Exhibit EU-4).
65 Decision No. 54 of the Board, (Exhibit EU-3).
66 Decision No. 9, (Exhibit EU-4); Section X, Chapter 48 of the CCT, as amended by Decision No. 77 of
the Board of the Eurasian Economic Commission, (Decision No. 77), (Exhibit EU-5).

7.42. In respect of these measures, we also observe that they were not adopted by Russia, but by
the Eurasian Economic Union (EAEU), an international organization of which Russia is a member
state.
7.43. The European Union argues that Russia is responsible for the challenged measures because
Russia committed in its Working Party Report to ensure that measures adopted by the EAEU would
be aligned with Russia's WTO obligations. The European Union refers to various provisions of
Russia's Working Party Report in support of this assertion . According to the European Union, the
EAEU is a customs union and, in its view, the panel report in Turkey – Textiles stands for the
proposition that the members of a customs union may be held responsible in WTO dispute
settlement for acts of that customs union, at least in certain circumstances. In t he European
Union's view, the fact that the legal instruments pursuant to which the types of tariff treatment at
issue in this dispute are accorded were adopted by the bodies of the EAEU does not mean that the
measures at issue are not Russia's measures, within the meaning of Article 3.3 of the DSU . The
European Union states that the CCT is Russia's customs tariff. The European Union additionally
notes that Russia has treated the challenged measures as if they were its own measures, and has
not denied that it actually applies duty rates enacted by t he EAEU or that this happens pursuant to
legal instruments enacted by bodies of the EAEU.68
7.44. Russia has not commented on this issue.
7.45. In considering this issue, the Panel first notes Russia's Working Party Report, which
indicates that Russia is obliged both under general international law and its domestic law to apply
the duty rates contained in the CCT. 69 We further note the evidence submitted by the European
Union, which includes a number of customs declarations concerning specific import transactions,
including transactions under the tariff lines at issue in this dispute. These customs declarations
demonstrate that, for the relevant tariff lines, Russia has applied the duty rates set forth in the
CCT.70 Customs declarations have been presented in support of the first to fifth and seventh to
eleventh measures.
7.46. It is clear to us that the act of applying the duty rates (i.e. the levying of duties at the time
of importation) is directly attributable to Russia. However, as we have indicated, the European
Union challenges the measures at issue "as such", independently of any act of application. More
specifically, it challenges duty rates that Russia is required by the CCT to apply. Nevertheless, the
aforementioned two elements, i.e. Russia's international and domestic law obligations in respect of
the CCT and Russia's demonstrated conduct in respect of duty rates contained in the CCT, in our
view justify a presumption that Russia applies the duty rates contained in the CCT that are at issue
in this dispute. In our view, the relevant CCT requirements are attributable to Russia, insofar as,
on the evidence before us, it can be presumed that the CCT requirements will lead to the relevant
duty rates being applied by Russia. Russia has not sought to rebut that presumptio n. Nor has
Russia otherwise contested the European Union's assertion that the challenged measures are

67 Decision No. 9, (Exhibit EU-4); Decision No. 77, (Exhibit EU-5).
68 European Union's first written submission, paras. 22-27 (referring to Russia's Working Party Report,
paras. 154-155, 185, 214 and 275) and fn 14 (referring to Panel Report, Turkey – Textiles, para. 9.6);
responses to Panel question Nos. 111 and 123.
69 As stated at paragraph 157 of Russia's Working Party Report (cited in the European Union's response
to Panel question No. 123):
The representative of the Russian Federation explained that [Customs Union] Agreements, once
they entered into force, were international treaties of the Russian Federation, and, with the
exception of the Constitution of the Russian Federation and Federal constitutional laws, would
prevail, in the event of a conflict, over the provisions of Federal laws and other normative legal
acts in the Russian Federation. With regard to [Customs Union] Commission Decisions, he
explained that the status of such Decisions in the legal system of the Russian Federation
corresponded to that which the Decision would have had, if it had been adopted by the Federal
Executive Body responsible for regulating the subject matter at the moment when the CU
Commission was delegated the relevant authority. Russia's Working Party Report, para. 157.
As explained elsewhere by the European Union, the Customs Union of the Republic of Belarus, Republic of
Kazakhstan and the Russian Federation preceded the formation of the EAEU. European Union's first written
submission, para. 22.
70 See Declarations of Goods and Supplementary Lists to those Declarations of Goods, (Exhibits EU-10,
EU-11, EU-12, EU-13, EU-14, EU-15, EU-16, EU-17 and EU-18).

attributable to Russia. In fact, Russia has asked the Panel to consider some of the measures as
subsequently amended by the EAEU, and to make positive fin dings that these amended measures
are consistent with Russia's WTO obligations. 71 In asking the Panel to find that the measures at
issue are consistent with its WTO obligations, Russia seems to us to rely on amended duty rates
that the CCT requires Russia t o apply, in an attempt to demonstrate Russia's compliance with its
WTO obligations.
7.47. In the light of the foregoing, we proceed with our analysis of the first to fifth measures on
the basis that the CCT requirements establishing the duty rates applicable to the tariff lines at
issue are attributable to Russia.
7.3.1.2 Consistency with Article II:1(b), first sentence, of the GATT 1994
7.48. The European Union claims that the first to fifth measures are inconsistent with Article
II:1(b), first sentence, and consequently Art icle II:1(a). Given that the European Union's claim
under Article II:1(a) is a consequential claim, we commence our analysis with the claim under
Article II:1(b), first sentence. The Appellate Body and previous panels have followed this approach
where the imposition of a customs duty was challenged under both Article II:1(a) and (b), first
sentence, since the language of Article II:1(b), first sentence, "is more specific and germane".72
7.49. To determine, as Article II:1(b), first sentence, requires, whether a pr oduct has been
subject to ordinary customs duties "in excess of those set forth and provided" in Russia's
Schedule, it is first necessary to ascertain the relevant bound duty rates. Next, we must examine
whether the challenged measures impose applied duty rates "in excess" of the bound duty rates,
resulting in the imposition of duties in excess of those provided in the Schedule, and are therefore
inconsistent with Article II:1(b), first sentence.
7.3.1.2.1 Relevant bound duty rates
7.50. The European Union contends that t he bound ad valorem duty rate in Russia's Schedule is
5% for all five tariff lines at issue. 73 The European Union points out in this respect that after the
establishment of this Panel, Russia initiated a procedure for a formal rectification and modification
of its Schedule, including the bound duty rates for these five tariff lines, based on alleged errors in
the Schedule that was annexed to its Protocol of Accession 74, evidenced, in Russia's view, by
discrepancies between the Schedule and the bilateral agree ments signed by Russia and certain
Members prior to Russia's accession. In the European Union's view, Russia's proposed modification
can have no bearing on the claims before the Panel, because the European Union objected to
Russia's request for modificatio n, and consequently the authentic text of the Schedule remained
unchanged.75
7.51. The European Union also submits that, in any event, no such alleged error occurred. The
European Union points out that Russia's Draft Schedule was prepared and submitted by Russia,
ultimately verified by Russia and the other Members, and became Russia's Schedule as of the date
of accession. The European Union considers that no error was made in the process of compiling
Russia's Schedule, and if any error was made, it could only be a ttributed to Russia itself. In the

71 Russia's second written submission, para. 108. In this connection, we recall Russia's comment at the
first meeting of the Panel that "certain amendments to the CCT were introduced in particular due to the
requests of the European Union itself that we have received prior to these proceedings and its request for
consultations. Even though we believed that these duties complied with Russia's obligations, we have satisfied
these requests of the European Union". Russia's opening statement at the first meeting of the Panel, para. 86.
We note in this respect paragraph 275 of Russia's Working Party Report (which is incorporated into paragraph
2 of its Protocol of Accession by way of reference to paragraph 1450 of the Working Party Report), in which
Russia undertook to ensure that "from the date of accession, the application of all laws, regulations and other
measures affecting importation or exportation of goods, whether by the Russian Federation or the competent
bodies of the [Customs Union], would be in conformity with relevant provisions of the WTO Agreement".
European Union's first written submission, para. 26.
72 Appellate Body Report, Argentina – Textiles and Apparel, para. 45.
73 European Union's first written submission, paras. 42-47 and 50.
74 Protocol on the Accession of the Russian Federation, 17 December 2011, WT/MIN(11)/24, WT/L/839,
(Russia's Accession Protocol).
75 European Union's first written submission, paras. 17-21 and 62-63.

European Union's view, to permit Russia to amend its Schedule in the context of a dispute would
diminish the value and certainty of Members' concessions, thus not only contravening the basic
objectives of the GATT 1994, b ut also diminishing the rights and obligations provided in the
covered agreements, an act expressly prohibited by Article 3.2 of the DSU.76
7.52. Russia initially argued that it had attempted to rectify and modify its "Schedule of
Concessions and Commitments on G oods"77 under the 1980 Decision on Procedures for
Modification and Rectification of Schedules of Tariff Concessions (1980 Decision) 78, to correct an
error of a purely formal character in its Schedule, and that the European Union's objection to that
attempt was not made in good faith. 79 Russia argued that under paragraph 325 of its Accession
Protocol, its Schedule could not contain anything that went beyond the results of the bilateral
market access negotiations that took place during its accession. According t o Russia, the current
commitments in its Schedule do not properly reflect the results of the bilateral market access
negotiations. Russia maintained that errors occurred in the transposition of its draft commitments
from the World Customs Organization Harmonized System Nomenclature 1996 to the Harmonized
System Nomenclature 2007, and that those errors were ultimately included in its Schedule. Russia
noted that its currently applied duty rates (at least in respect of the first to fifth measures) are not
in excess of the duty rates indicated in the "Bilateral Protocol on Market Access on Goods between
the Russian Federation and the European Union" .80 Furthermore, Russia noted that Article 79 of
the Vienna Convention on the Law of Treaties (Vienna Convention) is part of customary
international law and provides for rules regarding correction of errors in treaties. Russia suggested
that the European Union, by objecting only to the formal "character" of the error rather than the
existence of the error, had implicitl y acknowledged the presence of errors in the Schedule, and
therefore diminished Russia's rights under Article 79.81
7.53. In responses to subsequent questions from the Panel, Russia indicated that it was not
challenging the European Union's objection to the requ est for rectification of its Schedule. Russia
indicated that its statements on this issue were "for information purposes only, and reflect[] the
reaction to the questions raised by the European Union in its First Written Submission". 82
Additionally, Russia stated that, in its view, Article 79 of the Vienna Convention establishes general
rules for correction of errors, and that such general rules may be applied cumulatively with, and
may clarify, the provisions of the 1980 Decision. 83 Nevertheless, Russia stated that "[t]he current
concessions of Russia are reflected in 'Schedule CLXV'."84
7.54. Based on the foregoing, the Panel notes that for purposes of the present proceedings, there
is no dispute between the parties as to the status of the relevant bound duty rate s contained in
Russia's Schedule. In considering this issue, we observe that paragraph 2 of the 1980 Decision
allows Members to introduce changes in the authentic texts of the Schedules to reflect
"amendments or rearrangements which do not alter the scope of a concession", as well as "other
rectifications of a purely formal character". Paragraph 3 states that any proposed "changes … shall
be communicated by the Director -General to all the contracting parties and shall become a
Certification provided that no objection has been raised by a contracting party within three
months".85 In responses to questions from the Panel, Russia acknowledged that when its proposed

76 European Union's first written submission, paras. 77-78.
77 Communication from the Committee on Market Access, Rectification and Modification of Schedules,
Schedule CLXV – The Russian Federation, 1 May 2015, G/MA/TAR/RS/406, (Russia's Request for Rectification),
(Exhibit EU-1).
78 Decision of 26 March 1980 on Procedures for Modification and Rectification of Schedules of Tariff
Concessions, L/4962, adopted by the Council, C/M/139, (1980 Decision); and Russia's Request for
Rectification, (Exhibit EU-1).
79 Russia's first written submission, paras. 47-64 and 80-86.
80 Russia's first written submission, para. 45.
81 Russia's first written submission, paras 94-97. See also Russia's response to Panel question No. 40.
82 Russia's response to Panel question No. 40. Russia also observed that "[a]s the Russian Federation
stated at the first meeting the issue of rectification was raised by the European Union in its First Written
Submission, the response of the Russian Federation on this issue is just a reaction to the statement made by
the EU". Russia's response to Panel question No. 59.
83 Russia's response to Panel question No. 57.
84 Russia's response to Panel question No. 50. See also Russia's opening statement at the second
meeting of the Panel, para. 8; and Russia's response to Panel question No. 59.
85 1980 Decision, para. 3 (emphasis added).

rectification was circulated in document G/MA/TAR/RS/40686 in accordance with its request, both
the European Union and Japan objected to Russia's proposed rectification. 87 No further action was
taken with respect to Russia's Schedule. In particular, no certification was circulated by the
Director-General. As indicated, Russia is not challenging the Europ ean Union's objection in the
context of the present proceedings and has not questioned Japan's objection. Thus, for the
purposes of our task in this dispute, Russia's Schedule remains unaltered.
7.55. Furthermore, we note that under Article 79 of the Vienna Con vention, a treaty error can be
corrected either following an agreement between the signatory states and the contracting states
as to the existence of an error (under the first paragraph of Article 79), or in the absence of an
objection to a proposed correction of an error that has been notified by a treaty depositary (under
the second paragraph).88 In the light of Russia' s position that "[t]he current concessions of Russia
are reflected in 'Schedule CLXV'", and bearing in mind that Russia has not invoked Art icle 79 in
this case but refers to it only for information, it seems to us that there is no need for us to
examine whether Article 79 applies in this dispute or whether it could be applied cumulatively with
the 1980 Decision. We observe in any event that, even if it did apply, as indicated above, both the
European Union and Japan objected to Russia's proposed rectification. In these circumstances, we
see no basis on which the alleged error in Russia's Schedule could be considered to have been
corrected under either paragraph of Article 79. On the basis of the foregoing, we find that there
has been no change to the relevant bound duty rates contained in Russia's current Schedule.
7.56. In the light of the above, we find that the duty rates are 5% in respect of all five tariff lines
corresponding to the first to fifth measures at issue.89
7.3.1.2.2 Comparison of applied and bound duty rates
7.57. The European Union argues that Russia is required to apply a duty rate of 15% in respect of
the first and third measures, and of 10% in re spect of the second, fourth, and fifth measures. The
European Union notes that the bound ad valorem duty rate is 5% for all five tariff lines. According
to the European Union, products falling under these five tariff lines are therefore subject to
ordinary customs duties in excess of those provided in Russia's Schedule, which is inconsistent
with Article II:1(b), first sentence.90
7.58. Russia did not specifically contest that its applied duty rates exceed the corresponding
bound duty rates in respect of the first to fifth measures.91
7.59. The Panel notes that in the case of the first to fifth measures, for which the applied and
bound duty rates are both expressed in ad valorem terms, the determination of whether Russia
has imposed excessive customs duties is straightforward.92

86 Russia's Request for Rectification, (Exhibit EU-1).
87 Russia's response to Panel question No. 40; EU objection to the request of the Russian Federation to
modify/rectify its WTO bound accession schedule CLXV, (Exhibit EU-1).
88 Article 79 of the Vienna Convention provides as follows:
1. Where, after the authentication of the text of a treaty, the signatory States and the
contracting States are agreed that it contains an error, the error shall, unless they decide upon
some other means of correction, be corrected …
2. Where the treaty is one for which there is a deposita ry, the latter shall notify the signatory
States and the contracting States of the error and of the proposal to correct it and shall specify
an appropriate time-limit within which objection to the proposed correction may be raised. If, on
the expiry of the time-limit: (a) no objection has been raised, the depositary shall make and
initial the correction in the text and shall execute a procès -verbal of the rectification of the text
and communicate a copy of it to the parties and to the States entitled to bec ome parties to the
treaty; (b) an objection has been raised, the depositary shall communicate the objection to the
signatory States and to the contracting States.
89 Russia's Schedule, (Exhibit EU-9).
90 European Union's first written submission, paras. 42-47 and 50.
91 In addition to Russia's statements noted in paragraph 7.53 above, we note that in its second written
submission, the Russian Federation did not address the first to fifth measures, and did not make any request of
the Panel in respect of these measures. See generally Russia's second written submission and statements at
the second meeting of the Panel.
92 The panel in Colombia – Textiles stated in this regard that:

7.60. As explained in sections 7.3.1.1 and 7.3.1.2.1 above, the relevant applied and bound duty
rates are as follows:
Tariff line Russia's applied duty rate Russia's bound duty rate93
4810 22 900 0 15%94 5%
4810 29 300 0 10%95 5%
4810 92 300 0 15%96 5%
4810 13 800 9 10%97 5%
4810 19 900 0 10%98 5%

7.61. A direct comparison of Russia's applied and bound ad valorem duty rates in respect of the
first to fifth measures at issue indicates that for e ach measure, Russia has imposed ordinary
customs duties higher than those set forth and provided in its Schedule.99
7.3.1.2.3 Conclusion
7.62. For the reasons set out above, the Panel finds that for each of the first five measures
(namely the duties required to be applied by Russia in respect of tariff lines 4810 22 900 0,
4810 29 300 0, 4810 92 300 0, 4810 13 800 9, 4810 19 900 0), the applied a d valorem duty rate
is higher than the bound a d valorem duty rate contained in Russia's Schedule, resulting in the
imposition of o rdinary customs duties in excess of those set forth and provided in Russia's
Schedule. We therefore conclude that Russia is required to apply duties in excess of those set forth
in its Schedule, contrary to Article II:1(b), first sentence.
7.3.1.3 Consistency with Article II:1(a) of the GATT 1994
7.63. Turning now to the European Union's claim under Article II:1(a), the European Union argues
that Article II:1(b), first sentence, prohibits a specific kind of practice that will always be
inconsistent with Article II:1(a) . The European Union argues that while paragraph 1(a) prohibits
less favourable treatment of imports than that provided for in a Member's Schedule, paragraph
1(b), first sentence, prohibits the imposition of ordinary customs duties in excess of those provided
in the Schedule. According to the European Union, if a customs duty is levied on a product in
excess of that provided in a Member's Schedule, this adversely affects the conditions of
competition for that product, meaning that there is less favourable t reatment.100 The European
Union maintains that since Russia is required to impose duties in excess of those provided in its
Schedule, contrary to Article II:1(b), first sentence, it is also act ing inconsistently with
Article II:1(a).101
7.64. Russia did not provide a specific response to this claim of the European Union.

The examination of a measure's consistency with Article II:1(b), first sentence, of the GATT 1994
necessarily requires a comparison between the tariff treatment accorded by the challenged
measure to imports of the products concerned, on the one hand, and the bound level established
in the re sponding Member's Schedule of Concessions, on the other. Where both the tariff
provided for in the measure at issue and the tariff bound in the Schedule are expressed in the
same terms (for example, in ad valorem terms or in specific terms), the comparison may be
straightforward. Panel Report, Colombia – Textiles, para. 7.145.
93 Russia's Schedule, (Exhibit EU-9).
94 Decision No. 54 of the Board, (Exhibit EU-3).
95 Decision No. 9, (Exhibit EU-4).
96 Decision No. 54 of the Board, (Exhibit EU-3).
97 Decision No. 9, (Exhibit EU-4); Decision No. 77, (Exhibit EU-5).
98 Decision No. 9, (Exhibit EU-4); Decision No. 77, (Exhibit EU-5).
99 We note that the European Union has provided evidence allegedly showing actual imports being
subject to customs duties higher than those set forth in Russia's Schedule. See Declarations of Goods and
Supplementary Lists to Declarations of Goods, (Exhibits EU-10 and EU-11). However, given our finding in
section 7.2 above that neither trade effects nor actual import transactions need be demonstrated in order to
make a finding of inconsistency under Article II:1(b), first sentence, we find it unnecessary to address this
evidence. This approach accords with that of the panel in Colombia – Textiles. See Panel Report, Colombia –
Textiles, para. 7.124.
100 European Union's first written submission, paras. 37-38 (referring to Appellate Body Report,
101 European Union's first written submission, para. 50.

7.65. The Panel recalls the statement of the Appellate Body that:
[T]he principle of judicial economy "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 panel s "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
resolution of the matter at issue would be false judicial econom y", 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 allow 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".102
7.66. We have concluded in section 7.3.1.2.3 above that Russia is required to apply duties in
excess of those set forth in its Sche dule, contrary to Article II:1(b), first sentence. In the light of
this, we see no need, for the purpose of resolving this dispute, to make additional findings as to
whether, as a consequence of that conclusion, Russia is also acting inconsistently with Ar ticle
II:1(a).103 We therefore exercise judicial economy and decline to make findings with respect to this
claim.
7.3.2 Claims concerning the sixth measure
7.67. The Panel now turns to claims concerning the sixth measure at issue, namely an ad valorem
duty rate require d to be applied by Russia in respect of tariff line 4810 92 100 0. To recall, the
European Union's claims concerning the sixth measure are different from, and more complex to
assess, than those concerning the first to fifth measures.
7.68. The European Union cla ims that, at the time of the Panel's establishment, Russia was
required to apply a duty rate in respect of tariff line 4810 92 100 0 that was inconsistent with its
obligations under Article II:1(a) and (b), first sentence, of the GATT 1994. According to th e
European Union, at the time of the Panel's establishment, the CCT provided for a 15% duty rate
for tariff line 4810 92 100 0, but the duty regime in existence at the time temporarily reduced the
duty rate of 15% to 5%. The European Union contends that on 1 January 2016 the temporary duty
reduction was to be discontinued and the duty rate was to revert to 15%. The European Union
submits that at the time of the Panel's establishment the sixth measure was inconsistent with
Article II:1(a) and (b), first sent ence, in two ways. First, the European Union claims that a
temporary reduction of the duty rate "cannot sufficiently guarantee compliance" with Article
II:1(a), at least when duties will be levied in excess of bound rates as soon as the period of
reduction ends.104 In the European Union's view, the temporary duty reduction at issue accorded
treatment less favourable than that provided for in Russia's Schedule to imports of the European
Union. Second, the European Union submits that Russia's tariff treatment o f products under tariff
line 4810 92 100 0 was inconsistent as such with Article II:1(b), first sentence, and consequently
inconsistent as such with Article II:1(a), because it consisted in the application of a duty rate
higher than the bound duty rate pro vided in Russia's Schedule, resulting in the imposition of
ordinary customs duties in excess of those provided in Russia's Schedule.105
7.69. Russia argues in respect of the European Union's claim under Article II:1(b), first sentence,
that the European Union has not proven the existence of the measure. In Russia's view, the

102 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,
103 We note that previous panels have followed such an approach where a claim was made only as a
consequence of a finding of inconsistency in respect of another claim. See for example Panel Report, Ukraine –
Passenger Cars, para. 7.109. See also Panel Report, US – Upland Cotton, fn 1061.
104 European Union's first written submission, para. 54.
105 European Union's first written submission, paras. 53-58; opening statement at the first meeting of
the Panel, para. 30; second written submission, para. 41; opening statement at the second meeting of the
Panel, para. 9.

allegedly WTO -inconsistent rate of 15% has never actually been applied to products imported
under tariff line 4810 92 100 0. Russia submits that, accordingly, the measure described by the
European Union "simply does not exist", and the Panel should therefore refrain from ruling on it.
Alternatively, Russia argues that the Panel should make findings on the measure as amended by
Decision No. 85 of the Board of the Eurasian Economic Commission (Dec ision No. 85). 106
Regarding the European Union's claim under Article II:1(a), Russia contests the European Union's
proposed legal standard for assessing the temporary duty reduction and questions whether the
European Union has met its burden of proof.107
7.70. The Panel will first address the measure and applied duty rate at issue before turning to the
preliminary issues raised by Russia. Thereafter, we will address the European Union's claim under
Article II:1(b), first sentence, and consequential claim under Articl e II:1(a), before turning to the
European Union's independent claim under Article II:1(a).
7.3.2.1 Measure and applied duty rate at issue
7.71. According to the European Union, at the time of the Panel's establishment, Russia imposed
an ad valorem duty rate of 15% for products imported under tariff line 4810 92 100 0, as required
by the CCT as amended by Decision No. 77 of the Board of the Eurasian Economic Commission
(Decision No. 77).108 Nevertheless, as also noted by the European Union, footnote 14C of Decision
No. 77 provided for a temporary reduction of the ad valorem duty rate to 5%, between 20 April
2013 and 31 December 2015 inclusive.109 The European Union accepts that the duty rate required
to be applied by Russia at the time of the Panel's establishment was therefo re equal to the bound
duty rate of 5%. However, the European Union highlights that at the time of the Panel's
establishment, the CCT, as amended by Decision No. 77, required a duty rate of 15% to be levied
as of 1 January 2016. 110 The European Union requests the Panel to make findings on the sixth
measure from the "vantage point" of the Panel's establishment.111
7.72. Russia does not contest the European Union's description of the relevant duty rate provided
for at the time of the Panel's establishment.
7.73. The Panel notes that there is no dispute between the parties as to the duty rate applied by
Russia on the date of the Panel's establishment, as contained in the CCT as amended by Decision
No. 77. 112 Based on the evidence presented, we find that the applied duty rate for the sixth
measure on the date of the Panel's establishment was as follows:
Challenged measure Tariff line Russia's applied duty rate at
date of Panel's establishment
The sixth measure 4810 92 100 0 5% (until 31 December 2015);
15% (from 1 January 2016)113

7.3.2.1.1 Relevant measure on which to make findings
7.74. Regarding the measure at issue, we must address, in addition, whether the sixth measure
actually existed at the time of the Panel's establishment, and if so, whether we should make
findings on the measure as it existed at the time of the Panel's establishment or on the measure in
its amended form.

106 Russia's first written submission, paras. 29-30; second written submission, para. 13; opening
statement at the second meeting of the Panel, para. 17. Decision No. 85 of the Board of the Eurasian Economic
Commission, (Decision No. 85), (Exhibit RUS-10). Decision No. 85 is discussed further below in paras. 7.67-
7.78.
107 Russia's first written submission, paras. 21-22 and 25.
108 Decision No. 77, (Exhibit EU-5).
109 Decision No. 77, (Exhibit EU-5), fn 14C.
110 European Union's first written submission, paras. 51-52.
111 European Union's second written submission, para. 42.
112 We also note that there is no dispute between the parties, and we accept, that the CCT requirement
establishing the duty rate applicable to the tariff line at issue is attributable to Russia. See paragraphs 7.42 to
7.47 above.
113 Section X, Chapter 48 of the CCT, as amended by Decision No. 77, (Exhibit EU-5).

7.75. Russia argues, due to footnote 14C of Decision No. 77, which set a duty rate of 5% until 31
December 2015, the sixth measure at issue was never applied in a manner i nconsistent with
Russia's Schedule. Russia argues that by virtue of the temporary duty reduction and Decision No.
85, the sixth measure as described by the European Union "simply does not exist". 114 Russia
therefore requests the Panel to find that the sixth measure is WTO-consistent, or "alternatively" to
consider the sixth measure in its "amended" form and make a finding that the measure is
consistent with Russia's obligations under Article II:1. 115 Russia notes in this respect that Decision
No. 85 of the Boar d of the Eurasian Economic Commission 116 established a "constant duty of 5%"
as of 1 September 2015.117
7.76. The European Union does not dispute that the current applied duty rate contained in the
CCT, as amended by Decision No. 85, is 5%, as from 1 September 2015. 118 The European Union
insists, however, that at the time of the Panel's establishment, both the future applied duty rate
(15%) and the temporarily reduced rate itself (5%) existed and were contained in a binding legal
instrument. In the European Union's vie w, the fact that a permanent rate of duty is not applied
until a certain predefined future date cannot mean that such duty rate does not exist, or even that
it is not in force. Rather, the European Union argues, such a duty rate is in force even though it
will only be applied as of a future date.119
7.77. Additionally, the European Union submits that it is asking the Panel to adopt findings on the
sixth measure as it existed at the time, or from the "vantage point", of the Panel's
establishment.120 The European Unio n argues that Decision No. 85 cannot affect the terms of
reference of the Panel. According to the European Union, the European Union is entitled, at a
minimum, to a finding that the measure as it existed at the time of the Panel's establishment was
inconsistent with Article II:1.121
7.78. The Panel notes that the parties disagree over, first, whether or not the sixth measure at
issue existed at the time of the Panel's establishment, and second whether, even if the measure
did exist, the Panel should make findings on the measure as amended by Decision No. 85, or as it
existed at the time of the Panel's establishment. We address these issues in that order.
7.79. We note that Decision No. 77, which was in force at the time of the Panel's establishment,
states that "the Boa rd of the Eurasian Economic Commission has decided as follows: … a) from 1
September 2014: … to establish import customs duty rates from the Customs Union Common
Customs Tariff pursuant to Annex No 3".122 Annex No. 3 sets a duty rate of 15% for tariff line 4810
92 100 0.123 Significantly, however, footnote 14C, concerning tariff line 4810 92 100 0, states that
"Import customs duty at the rate of 5% of the customs value is applied from 20.04.2013 to
31.12.2015 inclusive."124 Thus, Decision No. 77 sets out a rule e stablishing a permanent duty rate
of 15% for tariff line 4810 92 100 0, and a footnote that temporarily reduces that duty rate to 5%.
7.80. It is clear to us from the legal structure of Decision No. 77 – a general rule establishing a
permanent duty rate and an accompanying footnote establishing a temporary, lower duty rate –
that on the date of the Panel's establishment, Russia's customs authority was required to apply the
temporary duty rate of 5%, and was required to apply the duty rate of 15% as from 1 Januar y
2016. Thus, the rule requiring the future applied duty rate (15%) was in force on the date of the
Panel's establishment, even though that rate had not yet been applied.

114 Russia's first written submission, para. 30.
115 Russia's second written submission, para. 108.
116 Decision No. 85, (Exhibit RUS-10).
117 Russia's first written submission, para. 29 and fn 9; Russia's second written submission, para. 17.
118 European Union's response to Panel question No. 10;second written submission, para. 42.
119 European Union's opening statement at the second meeting of the Panel, para. 28; response to Panel
question No. 120; second written submission, para. 40.
120 European Union's second written submission, para. 42.
121 European Union's opening statement at the first meeting of the Panel, paras, 36-37; second written
submission, paras. 42 and 52.
122 Decision No. 77, (Exhibit EU-5).
123 Decision No. 77, (Exhibit EU-5).
124 Decision No. 77, (Exhibit EU-5).

7.81. On this basis, we find that the measure challenged by the European Union (namely the duty
rate of 15% required to be applied as from 1 January 2016) was in existence on the date of the
Panel's establishment.125 We are unable to agree with Russia that a measure in force on the date
of the Panel's establishment "does not exist" simply because it will be implemented at a later time.
7.82. We now turn to the question of whether the Panel should nevertheless make findings only in
respect of the measure "in its amended form", as requested by Russia. 126 We note that Decision
No. 77 amended the CCT. Decision No. 85 came into effect on 1 September 2015, during the Panel
proceedings.127 It likewise amends the CCT, but does not include any explicit reference to Decision
No. 77. It therefore would not appear to either amend or formally repeal Decision No. 77 as s uch.
As Russia confirmed that the duty rate has been 5% as from 1 September 2015, we understand
that Decision No. 85 takes precedence over Decision No. 77 in respect of amending the CCT.128
7.83. In considering whether to make findings only in respect of the duty rate contained in the
CCT after it was amended by Decision No. 85 , we note that the Appellate Body has repeatedly
indicated that in situations where a measure has been amended during panel proceedings, a
complaining party is nevertheless entitled to seek and obtain findings on the measure as it existed
at the time of the panel's establishment.129 We also note that in Chile – Price Band System, the
Appellate Body made findings on the measure as amended during the panel proceedings. The
Appellate Body explained that, in that instance, such findings were necessary "to secure a positive
solution to the dispute and to make sufficiently precise recommendations and rulings so as to allow
for prompt compliance".130 We further note that the complaining party in that dis pute agreed that
it was appropriate for the panel to make findings on the measure as amended. 131 The Appellate
Body elaborated that such an approach does not "condone a practice of amending measures
during dispute settlement proceedings if such changes are m ade with a view to shielding a
measure from scrutiny … [and] the demands of due process are such that a complaining party
should not have to adjust its pleadings throughout dispute settlement proceedings in order to deal
with a disputed measure as a 'moving target'".132
7.84. In the present dispute, the European Union as the complaining party requested findings only
on the measure as it existed at the time of the Panel's establishment. 133 As our terms of reference
include the measure as it existed at that time and A rticle 11 of the DSU requires us to make an
"objective assessment of the matter", we can examine the WTO -consistency of the measure as it
existed at that time. Regarding whether we should make findings on the sixth measure in its
current form, we consider that, for the reasons explained by the Appellate Body in Chile – Price
Band System (relating to the possibility of shielding a measure from scrutiny and the demands of
due process , and referred to above ), it would not be appropriate to do so in the absence of a
specific request from the European Union. In the light of the foregoing, we decline Russia's request
to make findings on the basis of the duty rate established by Decision No. 85.

125 A similar issue was addressed in our Preliminary Ruling, where we stated that the European Union's
panel request in respect of the sixth measure "only suggests that the 15% rate was not yet being applied at
the time, and not that the rule providing for the 15% rate was not yet in force. We therefore do not agree with
Russia that [the Panel Request] refers to a measure that was 'simply not in existence' on the date of the
Panel's establishment". See Annex A-1, para. 6.10. As indicated above, having reviewed the evidence, we now
find that the measure existed at the time of the Panel's establishment.
126 Russia's second written submission, para. 108.
127 Decision No. 85 states that "the Board of the Eurasian Economic Commission has decided to: 1. To
amend the … Common Customs Tariff of the Eurasian Economic Union … as follows: a) from 1 September
2015: … To establish the rates of import customs duties of the Common Customs Tariff of the Eurasian
Economic Union, according to the Annex No. 3". Decision No. 85, (Exhibit RUS-10).
128 According to Russia, in accordance with Decision No. 85, "as of 1 September 2015 the permanent
import duty at the rate of 5% is applied". Russia's response to Panel question No. 28.
129 Appellate Body Reports, EC – Selected Customs Matters, para. 187; China – Raw Materials,
para. 360.
130 Appellate Body Report, Chile – Price Band System, para. 143 (footnotes omitted).
131 Appellate Body Report, Chile – Price Band System, para. 133.
132 Appellate Body Report, Chile – Price Band System, para. 144.
133 We note that the European Union's panel request states that "[f]or each of the [challenged]
measures … [the] request also covers any amendments, replacements, extensions, implementing measures or
other related measures adopted by [the relevant bodies]". European Union's panel request, p. 3. Thus, if the
European Union had wished to do so, it could have sought to bring Decision No. 85 within the Panel's terms of
reference.

7.85. Nevertheless, we note that, according to the Appellate Body, panels m ust take into account
relevant amendments and other relevant developments if and when they make recommendations
under Article 19 of the DSU. 134 The Appellate Body has explained in this regard that "[i]n general,
in cases where the measure at issue consists o f a law or regulation that has been repealed during
the panel proceedings, it would seem there would be no need for a panel to make a
recommendation in order to resolve the dispute." 135 Although Decision No. 77 does not appear to
have been formally repealed, the relevant applied duty rate h as been amended by Decision
No. 85. We will take appropriate account of this change in making any r ecommendations under
Article 19.
7.3.2.2 Preliminary issues
7.86. Before turning to examine the consistency of the sixth measure with Arti cle II:1(a) and (b),
first sentence, it is useful to deal with a number of preliminary issues concerning that measure.
7.3.2.2.1 Duty "actually applied" to the product at issue "on [its] importation"
7.87. The first issue we consider is Russia's argument that a duty only constitutes an "ordinary
customs duty" on which a Panel may make findings under Article II:1(b), first sentence, if it is
actually applied to a product on its importation.
7.88. Russia argues that a duty is a "duty" within the meaning of Article II:1(b), first sentence,
only if it is or was actually applied to products at the moment of their importation. 136 In support of
its position, Russia refers to the Appellate Body report in Australia – Salmon. According to Russia,
the Appellate Body in that dispute determine d that a measure must be "actually applied" to the
product at issue. 137 In addition, Russia points to Article II:1(b), first sentence, itself, which
provides that products must not "on their importation" be subject to duties in excess of those set
forth in a Member's Schedule.138 Russia infers from this that the duty to be examined by the Panel
under Article II:1(b), first sentence, is the duty that is imposed on goods at the moment of
importation, "should such importation happen". 139 Russia maintains that, since the duty rate of
15% was never and will never be applied (given that Decision No. 85 provides for a constant duty
rate of 5%), the sixth measure as challenged by the European Union under Article II:1(b), first
sentence, does not constitute a measure on wh ich the Panel can rule. Moreover, Russia submits
that should there be imports of the product at issue from the European Union, they would be
subject to a duty that is fully consistent with Russia's tariff commitments.140
7.89. The European Union argues that the Ap pellate Body in Australia – Salmon stated that the
measure at issue, because it was defined in terms of a specific product at issue, could not include
a rule that applies to a different product. The European Union asserts that this issue has nothing to
do with the question of whether the consistency of a measure can be determined by a panel before
that measure has been applied in practice.141
7.90. The Panel notes that the Appellate Body in Australia – Salmon stated in relevant part that
"the measure at issue in t his dispute can only be the measure which is actually applied to the
product at issue".142 The Appellate Body went on to state that:

134 See for example, Appellate Body Reports, US – Certain EC Products, para. 81; Dominican Republic –
Import and Sale of Cigarettes, para. 129.
135 Appellate Body Report, China – Raw Materials, para. 264.
136 Russia's opening statement at the first meeting of the Panel, paras. 11-13 (referring to Appellate
Body Report, Australia – Salmon, para. 103); second written submission, para. 12; opening statement at the
second meeting of the Panel, para. 16.
137 Russia's opening statement at the first meeting of the Panel, paras. 11-13 (referring to Appellate
138 Russia's opening statement at the second meeting of the Panel, para. 15.
139 Russia's opening statement at the second meeting of the Panel, para. 17.
140 Russia's first written submission, para. 32; response to Panel question No. 61; opening statement at
the second meeting of the Panel, paras. 14-17.
141 European Union's second written submission, para. 46.
142 Appellate Body Report, Australia – Salmon, para. 103 (emphasis original).

The product at issue is fresh, chilled or frozen salmon and the SPS measure applicable
to fresh, chilled or frozen salmon is the import prohibition set forth in QP86A. The
heat-treatment requirement provided for in the 1988 Conditions applies only to
smoked salmon and salmon roe, not to fresh, chilled or frozen salmon.143
7.91. It is therefore clear to us that the Appellate Body's ref erence to "actual application", as
relied upon by Russia, concerned the question of whether the product at issue in that dispute was
within the product scope of the challenged measure. In other words, the issue was whether the
challenged measure was actually applied – or as the Appellate Body also said in the second
statement quoted above, was "applicable" – to the products at issue (rather than different
products), and not whether that measure applied to those products at the time of their
importation.144
7.92. In respect of the measure at issue, we have determined that it was clear, from the vantage
point of the date of the Panel's establishment, that as from 1 January 2016, the duty rate
applicable to a product falling within tariff line 4810 92 100 0 was to be 15%.145 Furthermore, as
we have pointed out above, a complaining party need not provide evidence of actual import
transactions to substantiate a claim that the imposition of a duty ra te is inconsistent with
Article II:1 as such.146 It follows from this proposition that a panel can make findings in respect of
a duty rate even if, on the date of the panel's establishment, the challenged duty rate has not yet
been "actually applied" on the importation of the relevant product. For these reasons, we are
unable to accept Russia's contention that the Appellate Body report in Australia – Salmon supports
the conclusion that the sixth measure, insofar as it provided for the future duty rate of 15%, was
not a measure on which the Panel can make findings.
7.93. As for the phrase "on their importation" in Article II:1(b), first sentence, we agree with
Russia that Article II:1(b), first sentence, applies to duties imposed on products "on their
importation". Russia argues that the duty rate that was required t o be imposed under Deci sion
No. 77 is not a duty rate subject to Article II:1(b), first sentence, because it never was and never
will be actually applied "on the importation" of the relevant product. Russia argues that it will
instead apply the duty rate imposed under Decision N o. 85. In considering this argument, we
recall, as an initial matter, that we are assessing the situation as it existed on the date of the
Panel's establishment. At that time, Decision No. 85 did not exist, and the duty rate that was to be
applied on the i mportation of the relevant product from 1 January 2016 was 15%. Although
Decision No. 85 subsequently amended that duty rate, on the date of the Panel's establishment,
the CCT, as amended by Decision No. 77, provided for a rate concerning a "duty" to be ap plied as
from 1 January 2016 "on the importation" of the relevant product. 147 In other words, Decision
No. 77 concerned a "duty" within the meaning of Article II:1(b), first sentence, that was to be
applied in the future. Decision No. 85 did not exist at the time of the Panel's establishment, and
therefore is not relevant to an assessment of the measure as it existed at that time. We therefore
consider that the sixth measure concerns an "ordinary customs duty " within the meaning of
Article II:1(b), first sentence.
7.3.2.2.2 Future application of the challenged duty rate
7.94. We now turn to consider whether the Panel can make findings in respect of the applied duty
rate of 15%, even though at the time of the Panel's establishment that rate was to be applied only
in the future, namely on 1 January 2016.
7.95. In the European Union's view, nothing prevents the Panel from making a finding of
inconsistency in relation to the future imposition of duties in excess of bound duties. According to

143 Appellate Body Report, Australia – Salmon, para. 103.
144 See also Annex A-1, fn 173.
145 See paragraphs 7.73 and 7.80 to 7.81 above.
146 See paragraphs 7.16 to 7.17 above.
147 We consider this interpretation to be consistent with the Appellate Body's statement in China – Auto
Parts that "an ordinary customs duty is a charge imposed on products, on their importation". Appellate Body
Report, China – Auto Parts, para. 153. (emphasis original) This statement refers simply to the obligation
contained in Article II:1(b), first sentence, and does not imply that a duty that has yet to be applied to
products on their importation is not a "duty" within the meaning of that obligation, or cannot be the subject of
findings by a panel before that duty is applied.

the European Union, the duty rate to be ap plied on 1 January 2016 was already required by the
CCT, as amended by Decision No. 77, which existed on the date of the Panel's establishment. The
European Union notes that the GATT panel in US – Superfund found it permissible to challenge a
mandatory measure that is not yet in force, at least where the entry into force is automatic at a
future date and does not depend on further legislative action. The European Union argues that a
duty may consequently violate Article II:1 "regardless of whether it was ev er levied".148 Therefore,
the European Union submits, the Panel "can (in procedural terms) and should (in substantive
terms)"149 find that Russia has acted inconsistently with Article II:1(b), first sentence, and
consequently with Article II:1(a), by providing for the application, as of a future date, of duties in
excess of those provided for in its Schedule.150
7.96. Russia responds that accepting the European Union's approach would "result in a possibility
for any future panels to determine that any measure that is p resently consistent with the WTO
agreement is actually inconsistent with it if it is modified in [a] WTO-inconsistent manner".151 Such
a finding would, according to Russia, be tantamount to finding that an applied duty rate that is
equal to a Member's bound rate is nevertheless "inconsistent now, if it is levied in excess [of]
bound rates in the future".152
7.97. The European Union counters that it is not challenging the "mere possibility" that Russia
might act inconsistently with Article II:1(b), first sentence. Ra ther, the European Union explains
that it is challenging the measure as it actually existed at the time of the Panel's establishment.
According to the European Union, the future developments referred to by Russia (i.e. the
application as from 1 January 201 6 of a duty rate of 15%) were neither hypothetical nor separate
from the challenged measure. Rather, the challenged measure prescribed a particular kind of tariff
treatment as of a future date.153
7.98. As an initial matter, the Panel recalls that, as discussed in paragraphs 7.15 to 7.17 and 7.20
above, a complaining party need not demonstrate the existence of "actual" imports to substantiate
a claim that the imposition of a customs duty as such is inconsistent with Article II:1. We therefore
see no basis on which to exclude from dispute settlement proceedings a measure that is in force,
but which has yet to be applied.
7.99. We further recall that, acc ording to the Appellate Body, rules or norms of general and
prospective application that "mandate" particular action can be found, as such, to be WTO -
inconsistent.154 Decision No. 77 in our view sets forth a duty rate of general and prospective
application i nsofar as it specifies a duty rate applicable to all import transactions under the
relevant tariff line. That being the case, we proceed to examine whether Decision No. 77 mandates
the imposition of that duty rate in the future.
7.100. The dictionary defines the term "mandatory" as "[o]f the nature of, pertaining to, or
conveying a command or mandate" or "[o]f an action: obligatory in consequences of a command,
compulsory".155 Thus, a mandatory legal provision is one that makes it compulsory to take certain
action, i.e. it requires that the action be taken. We have already determined above that, on the
date of the Panel's establishment, Decision No. 77 required Russia's customs authority to apply an
increased duty rate of 15% as from 1 January 2016. There is no lang uage in Decision No. 77 that
vests "discretionary authority" in Russia's customs authority regarding whether to apply the 15%
duty rate. 156 The increase in the duty rate was definitive, and was expressed as occurring

148 European Union's opening statement at the second meeting of the Panel, para. 13.
149 European Union's first written submission, para. 61.
150 European Union's first written submission, paras. 58 and 60-61; opening statement at the first
meeting of the Panel, para. 30; second written submission, paras. 41, 44-47, and 52; opening statement at
the second meeting of the Panel, paras. 9-10 and 12-13.
151 Russia's first written submission, para. 38.
152 Russia's first written submission, para. 38.
153 European Union's opening statement at the Panel's first meeting, para. 38; second written
submission, para. 41.
154 Appellate Body Reports, US – Section 211 Appropriations Act, para. 259; US – 1916 Act, para. 88;
Argentina – Import Measures, para. 5.101.
155 Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 1, p. 1694.
156 Appellate Body Report, US – Section 211, para. 259.

automatically and by virtue of the measur e itself, without any need for implementing or other
intervening action. The fact that the EAEU could, and in fact did, pass a new Decision modifying
the duty rate for the tariff line in question does not demonstrate that the future applied duty rate
at is sue, as provided for at the time of the Panel's establishment, was discretionary. To the
contrary, the adoption of the new decision would appear to confirm that Decision No. 77 did not
confer any discretion on Russia's customs authority to apply the lower duty rate of 5% beyond
31 December 2015. Indeed, but for the adoption of Decision No. 85, the applied duty rate as from
1 January 2016 would have been 15%.
7.101. We therefore find that the sixth measure was mandatory insofar as Russia's customs
authority was, a t the time of the Panel's establishment, required to apply a duty rate of 15% as
from 1 January 2016.
7.102. We next address whether, despite being mandatory, the sixth measure cannot be found to
be WTO-inconsistent because the mandatory action (i.e. the applica tion of the 15% duty rate as
from 1 January 2016) lay in the future. This issue has been addressed in two previous panel
reports, including an adopted GATT panel report. 157 The GATT panel in US – Superfund found, in
the context of Article III:2 of the GATT 1 947, that "existing legislation" that "mandates" GATT -
inconsistent action could be found to be inconsistent even if "administrative acts implementing it"
had not yet been undertaken. 158 Similarly, the WTO panel in Chile – Alcoholic Beverages made
findings in the context of Article III:2 on a measure that had "been enacted but not [yet]
implemented".159 Addressing that measure, the panel observed that there appeared "to be no
discretion allowed in its enforcement … The law [wa]s certain and definitive ".160 We also find it
instructive to recall once more the Appellate Body's observation that:
[T]he disciplines of the GATT and the WTO, as well as the dispute settlement system,
are intended to protect not only existing trade but also the security and predictability
needed to conduct future trade. This objective would be frustrated if instruments
setting out rules or norms inconsistent with a Member's obligations could not be
brought before a panel once they have been adopted and irrespective of any particular
instance of application of such rules or norms.161
7.103. As we have said above 162, it is difficult to think of a nother provision of the GATT 1994
besides Article II:1(b), first sentence, for which it would be more apt to say that it is intended to
protect not only existing t rade, but also the security and predictability needed to conduct future
trade. On that basis and like, notably, the GATT panel in US – Superfund163, we consider that a
panel can in principle find an existing measure to be inconsistent as such with a provisio n such as
Article II:1(b), first sentence, even if that measure mandates WTO -inconsistent action that will
take place only in the future.164

157 According to the Appellate Body, "[a]dopted [GATT] panel reports are an important part of the GATT
acquis. … They … should be taken into account where they are relevant to any dispute". Appellate Body Report,
Japan – Alcoholic Beverages II, p. 13, DSR 1996:I, 97, at 108.
158 GATT Panel Report, US – Superfund, para. 5.2.2.
159 Panel Report, Chile – Alcoholic Beverages, fn 413.
160 Panel Report, Chile – Alcoholic Beverages, fn 413.
161 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 82. (emphasis added)
162 See paragraph 7.18 above.
163 That GATT panel addressed the issue in the light of Articles III and XI of the GATT 1947, not Article
II. GATT Panel Report, US – Superfund, para. 5.2.2.
164 We note that the GATT panel in US – Superfund analysed whether the mandated future WTO-
inconsistent action would take place "within a time frame within which the trade and investment decisions that
could be influenced by the tax are taken". GATT Panel Report, US – Superfund, para. 5.2.2. The parties to this
dispute did not address this legal issue directly. For the purposes of disposing of the claim before us, it is not
necessary to determine whether an analysis of the length of the delay in the application of the future duty rate
is required. Indeed, even assuming for the sake of argument that such an analysis were required (as the GATT
panel in US – Superfund appears to have considered), this element would be met here. We note that the
higher duty rate required by the CCT, as amended by Decision No. 77, was to have been applied on 1 January
2016, and the Panel was established on 25 March 2015. Thus, the higher duty rate would have been applied
approximately nine months after the Panel's establishment. In contrast, the internal tax at issue in US –
Superfund was to go into effect 22 months after the establishment of the GATT panel, and the GATT panel
considered this to be a time period in which trade and investment decisions could be influenced. GATT Panel

7.104. Applying this to the sixth measure, it follows that we can make findings on whether the
future applied duty rate of 15%, required by the CCT as amended by Decision No. 77 to be
imposed from 1 January 2016, would have resulted in duties that were inconsistent with
Article II:1(b), first sentence. Moreover, in our view, we can make findings in respect of the future
applied duty rate even if the rate required to be applied at the time of the Panel's establishment
was no higher than the relevant bound duty rate. There is nothing illogical about saying that a
measure raises no issue of WTO -consistency insofar as its current a pplied rate is concerned, but
does raise an issue of WTO-consistency insofar as its mandatory future applied rate is concerned.
7.105. We therefore consider that we can make findings on whether the future duty rate of 15%
required by the CCT as amended by Decisi on No. 77 would have been inconsistent with
Article II:1(b), first sentence, even taking into account that that duty rate was to be applied only
some nine months after the Panel's establishment.
7.3.2.2.3 Temporary duty reduction
7.106. We now turn to examine whether the temporary reduction of the duty rate to 5% could
eliminate a possible finding of inconsistency in respect of the future applied duty rate of 15%.
7.107. Russia argues that in EC – IT Products the panel correctly found no inconsistency with
Article II:1(b), first sentence, because the measure at issue, a WTO -inconsistent duty rate, had
been temporarily suspended.165 In Russia's view, footnote 14C in Decision No. 77 likewise acts as
a temporary duty suspension, and for this reason the Panel should follow the approach taken in
EC – IT Products in this respect.166
7.108. The European Union responds by noting that the panel in EC – IT Products limited itself to
findings on a situation in which a duty suspension is in force. The European Union asserts that the
sixth measure would violate Article II:1(b), first sentence, and therefore also Article II:1(a), as
soon as the duty begins to be levied at a rate of 15%. The European Union sees no reason why a
panel could not make a prospective finding of such a violation, from the vantage point of its time
of establishment. Specifically, the European Union considers that a thorough reading of the panel
report in EC – IT Products fully supports the proposition that a temporarily suspended or reduced
duty that is otherwise in excess would be inconsistent with Article II:1 upon the automatic expiry
of the suspension.167
7.109. The Panel understands Russia to be arguing that a temporary duty reduction can
"eliminate" any inconsistency with Article II:1(b), first sentence, by lowering the actually applie d
duty rate to a WTO -consistent level.168 In considering this argument, we recall that, according to
the panel in EC – IT Products, the measures at issue in that dispute imposed duties in excess of
those set forth in the Schedule, but the inconsistency with Article II:1(b), first sentence, was
eliminated through a temporary duty suspension lowering the applied duty rate to the level of the
duty rate bound in the relevant Schedule.169 The panel stated that:
It must be borne in mind that Council Regulation No. 1 79/2009 that is currently in
effect, suspends the application of duties on certain displays … To the extent that
Council Regulation No. 179/2009 suspends duties levied on products that the
European Communities is obliged to provide duty -free treatment for … neither [of the
measures at issue] actually imposes duties in excess of those set forth in the EC
Schedule. Accordingly, the duty suspension eliminates the inconsistency with the
European Communities' obligations under Article II:1(b). In other words, bu t for the

Report, US – Superfund, paras. 1.3 and 5.2.1. Given the substantially shorter time-frame in the present
dispute, we are satisfied that as of the date of the Panel's establishment, the mandatory future duty rate of
15% could affect trade and investment plans and decisions of producers and exporters outside Russia,
including those of the European Union.
165 Russia's first written submission, para. 33.
166 Russia's first written submission, paras. 33 and 34.
167 European Union's second written submission, para. 44; opening statement at the second meeting of
the Panel, para. 9; response to Panel question No. 89.
168 Russia's first written submission, paras. 33-34 (referring to Panel Report, EC – IT Products, paras.
7.758 and 7.763).
169 Panel Report, EC – IT Products, paras. 7.740 and 7.744-7.745.

duty suspension, the measures at issue are inconsistent with Article II:1(b) of the
GATT 1994.170
7.110. The panel in EC – IT Products was not requested by the complaining part ies to make
findings in respect of any mandatory duty rate to be applied in the future, after the end of the
period of suspension.171 Rather, the findings of the panel in EC – IT Products were directed to the
duty rates applied during the period of suspension. 172 Furthermore, the panel explained that "to
the extent the duty suspension we re not applicable … or if the suspension measure were to be
repealed or annulled", then the measure would result in duties being levied in a manner
inconsistent with Article II:1(b), first sentence. 173 This suggests that, in the panel's view, the duty
rates that would have applied, if and when the duty suspension ended, were the underlying
permanent duty rates, and their application would have resulted in duties being levied in excess of
bound duties, inconsistently with Article II:1(b), first sentence.
7.111. On this basis, it appears to us that the panel in EC – IT Products was concerned with a
duty rate applied during the period of suspension, whereas we are concerned with a duty rate to
be applied following the expiry of the period of duty reduction introduced i n footnote 14C of
Decision No. 77. Therefore, the approach taken by the panel in EC – IT Products is in our view not
directly relevant to our assessment of the future applied rate at issue in our dispute. Nor do we
consider that this approach precludes any finding of consistency or inconsistency in respect of a
mandatory future applied duty rate.
7.3.2.3 Consistency with Article II:1(b), first sentence, of the GATT 1994
7.112. Turning now to assess the consistency of the sixth measure with Article II:1, as stated
above, we find it appropriate to first address the European Union's claims under Article II:1(b),
first sentence, and the alleged consequential inconsistency with Article II:1(a), before turning to
the European Union's independent claim under Article II:1(a). 174 We also note in this respect that
the European Union has presented all of its claims concerning other measures in this order, stating
that in the light of the Appellate Body's comments in Argentina – Textiles and Apparel , the
"analysis should begin with and focus on" Article II:1(b), first sentence.175
7.113. The European Union claims that the sixth measure, as it existed at the time of the Panel's
establishment, was inconsistent with Article II:1(b), first sentence, because it subjected products
imported under tari ff line 4810 92 100 0 to duties in excess of the bound duties as of 1 January
2016.
7.114. Russia rejects the European Union's claim for the reasons described in the Panel's
summaries of Russia's arguments in section 7.3.2.2 above.
7.115. The Panel has already rejected Russia's arguments in section 7.3.2.2 above. Notably, we
found that we can make findings on whether the mandatory future applied duty rate of 15%
resulted in the ap plication of duties that were inconsistent with Article II:1(b), first sentence. We
therefore proceed directly to a comparison of the applied and bound duty rates.
7.3.2.3.1 Comparison of applied and bound duty rates
7.116. The European Union argues that, at the time of t he Panel's establishment, Russia's
mandatory future applied duty rate was 15%, whereas the bound ad valorem duty rate was 5%.
According to the European Union, products falling under the relevant tariff line are therefore

170 Panel Report, EC – IT Products, para. 7.744.
171 Panel Report, EC – IT Products, para. 3.2.
172 Panel Report, EC – IT Products, para. 3.2.
173 Panel Report, EC – IT Products, para. 7.745.
174 We follow this approach for the reasons set out in paragraph 7.48 above.
175 European Union's first written submission, para. 37 (referring to Appellate Body Report, Argentina –
Textiles and Apparel, para. 45).

subject to duties in excess of thos e in Russia's Schedule, contrary to Article II:1(b), first
sentence.176
7.117. Russia does not specifically contest that the mandatory future applied duty rate exceeds
the corresponding bound duty rate in respect of the sixth measure.177
7.118. The Panel recalls that the determination of whether Russia has imposed excessive duties is
straightforward when the applied and bound duty rates are both expressed in ad valorem terms.178
Comparing the relevant applied and bound duty rates, we note that there is no dispute between
the parties regarding the bound duty rate, which is 5%. 179 Thus, the relevant applied and bound
duty rates are as follows:
Tariff line Russia's applied duty rate provided for at date of
Panel's establishment
Russia's bound duty
rate180
4810 92 100 0 5% (until 31 December 2015); 15% (from 1 January 2016)181 5%

7.119. A direct comparison of Russia's future applied ad valorem duty rate and its bound ad
valorem duty rate indicates that, on the date of the Panel's establishment, Russia's customs
authority was required, as o f 1 January 2016, to impose duties higher than those set forth and
provided in its Schedule.
7.3.2.3.2 Conclusion
7.120. For the reasons set out above, the Panel finds that the sixth measure (namely the
mandatory future application of a duty rate of 15%, concerning tariff line 4810 92 100 0) is a
measure that existed on the date of establishment of the Panel. That measure mandates the
imposition from 1 January 2016 of an ad valorem duty rate higher than the bound ad valorem duty
rate contained in Russia's Schedule, requirin g the imposition of ordinary customs duties in excess
of those set forth and provided in Russia's Schedule. Therefore, we conclude that, in respect of the
sixth measure as it existed at the time of the Panel's establishment, Russia was required to apply
duties in excess of those set forth in its Schedule, contrary to Article II:1(b), first sentence.
7.3.2.3.3 Nullification or impairment of benefits
7.121. Article 3.8 of the DSU provides that:
In cases where there is an infringement of the obligations assumed under a covered
agreement, the action is considered prima facie to constitute a case of nullification or
impairment. This means that there is normally a presumption that a breach of the
rules has an adverse impact on other Members parties to that covered agreement,
and in such cases, it shall be up to the Member against whom the complaint has been
brought to rebut the charge.
7.122. Russia argues that the duty rate of 15%, which was m andated to be applied as from
1 January 2016, was never actually applied, inter alia, because of the adoption of Decision No. 85,
which imposed a duty rate of 5%. Russia recalls statements by the Appellate Body to the effect
that dispute settlement necessarily concerns situations in which a measure nullifies or impairs
benefits.182 In Russia's view, th e European Union has failed to provide evidence that the
challenged measure nullified or impaired benefits accruing to the European Union.183

176 European Union's first written submission, para. 51. See also Russia's Schedule, (Exhibit EU-9).
177 See generally Russia's second written submission and statements at the second meeting of the
Panel.
178 See paragraph 7.59 above.
179 The European Union states that the bound rate for this tariff line, as provided and set forth in
Russia's Schedule, is 5%. European Union's first written submission, para. 51. See also Russia's Schedule,
(Exhibit EU-9). This is not disputed by Russia.
180 Russia's Schedule, (Exhibit EU-9).
181 Section X, Chapter 48 of the CCT, as amended by Decision No. 77, (Exhibit EU-5).
182 Appellate Body Reports, US – Gambling, para. 121 ("The DSU provides for the 'prompt settlement' of
situations where Members consider that their benefits under the covered agreements 'are being impaired by

7.123. The European Union responds that it is not making a "non -violation" claim under Article
XXIII:1(b) of the GATT 1994, and is therefore not required to separately show how the measure at
issue impairs the benefits accruing to it. According to the European Union, the violation of the
covered agreements is, in itself, impairing the benefits accruing to the European Union a s well as
other Members. Thus, in the European Union's view, once the violation is established, no further
evidence of the impairment of benefits is required.184
7.124. The Panel observes that under the terms of Article 3.8, since we have found a breach of
the obligation contained in Article II:1(b), first sentence, there is "normally" a presumption that
that breach has an adverse impact on the European Union and other Members. We do not consider
the mere fact that the breach in respect of the sixth measure arises f rom the mandatory future
application of a specified duty rate to be sufficient to displace the "normal" presumption of adverse
impact.185 Nor has Russia advanced any argument to persuade us otherwise.
7.125. Regarding the adoption of Decision No. 85, we note that the issue before the Panel is
whether the duty rate required to be applied under Decision No. 77 caused nullification or
impairment. Although Decision No. 85 had not been adopted at the time of the Panel's
establishment, its subsequent adoption does not ha ve the effect of eliminating any nullification or
impairment that existed at the time of the Panel's establishment, as it did not have retroactive
effect. Having said this, as indicated, our recommendation under Article 19 of the DSU takes
account of the existence of Decision No. 85.
7.126. In the light of the foregoing, the Panel concludes that its finding of inconsistency under
Article II:1(b), first sentence, creates a presumption of nullification or impairment of the European
Union's benefits, and that Russia has not rebutted that presumption.
7.3.2.4 Consistency with Article II:1(a) of the GATT 1994 (consequential claim)
7.127. The European Union requested that in the event the Panel finds that Russia acted
inconsistently with Article II:1(b), first sentence, of the GATT 1 994, the Panel make a
consequential finding of inconsistency under Article II:1(a) of the GATT 1994.186
7.128. The Panel sees no need, for the purpose of resolving this dispute, to make additional
findings regarding whether as a consequence of a finding of inconsi stency under Article II:1(b),
first sentence, Russia also acted inconsistently with Article II:1(a). We therefore exercise judicial
economy and decline to make findings with respect to this claim.
7.3.2.5 Consistency of the sixth measure with Article II:1(a) of t he GATT 1994
(independent claim)
7.129. We turn now to the European Union's additional claim that the sixth measure is
inconsistent as such with Article II:1(a) of the GATT 1994 because it provides for a temporary duty
reduction and at the same time establishes a future duty rate that exceeds the bound duty rate .
We note as an initial matter that this claim differs from the European Union's claim of a
consequential inconsistency under Article II:1(a) resulting from a finding of inconsistency under
Article II:1(b), first sentence. By contrast, this independent claim addresses a different aspect of
the measure – namely the temporary nature of the 5% duty rate required to be applied by Russia
prior to 1 January 2016 – and we therefore do not consider it appropriate to exercise judicial
economy on this claim.

measures taken by another Member' … [Such] measure must be the source of the alleged impairment, which is
in turn the effect resulting from the existence or operation of the 'measure'"); US – Corrosion-Resistant Steel
Sunset Review, para. 86 ("[A] measure attributable to a Member may be submitted to dispute settlement
provided only that another Member has taken the view, in good faith, that the measure nullifies or impairs
benefits accruing to it").
183 Russia's response to Panel question No. 61; second written submission, para. 15.
184 European Union's response to Panel question No. 61; second written submission, paras. 48-49.
185 We also recall that in this instance the future application of the offending duty rate was merely
months away.
186 European Union's first written submission, para. 61.

7.130. The European Union submits that, at the time of the Panel's establishment the sixth
measure provided for a rate of duty in excess of the relevant bound rate, but temporarily reduced
that duty. The European Union a rgues that such temporary duty reductions cannot sufficiently
guarantee compliance with Article II:1(a), at least when it is clear from the outset that duties will
continue to be levied in excess of bound duty rates as soon as the period of the temporary
reduction ends. Comparing the facts of the present case to those at issue in EC – IT Products, the
European Union submits that the sixth measure, even during the period of duty reduction, was
inconsistent with Article II:1(a) because it was "insufficiently foreseeable to traders in the
marketplace".187 In the European Union's view, this lack of foreseeability "creates deleterious
effects on competition, and therefore less favourable treatment in the meaning of Article II:1(a),
even though the current applied rate is not in excess of bound levels". 188 It does this, according to
the European Union, because "envisaging a future duty in excess of bound rates is likely to restrict
trade even before the higher duty becomes applicable".189 In the European Union's view, exporters
might scale down their existing operations in anticipation of a higher duty, or refrain from
expanding their production capacity or developing commercial relationships with importers and
distributers. In sum, the European Union argues that by only temporarily applying tariff treatment
within the limits prescribed by its Schedule, and providing at the same time for a future duty that
exceeds the bound rate, Russia, at the time of the Panel's establishment, accorded to imports
treatment less favourable than that provided for in its Schedule.190
7.131. Russia responds that nothing in the WTO Agreement prohibits a Member from applying
duties on a temporary basis, provided that the duty is consistent with the WTO Agreement.
According to Russia, while Article II:1 requires WTO Members to levy duties in conformity with
their schedules, nothing in that Article refers to the character of the duties applied.191
7.132. Russia further argues that the European Union's claim effectively introduces new tests for
a measure's consistency with Article II:1(a). In Russia's view, the European Union's references to
"sufficient guarantees of compliance with Article II" and "measures being sufficiently foreseeable
to traders in the marketplace", among others, are intended to show that the sixth measure, which
is otherwise consistent with Russia's commitments, in fact violates Article II:1(a). However,
according to Russia, the European Union has failed to provide any justification for its position that
these tests are present in Article II:1(a) or relevant in the present case.192
7.133. Russia submits, finally, that the European Union has failed to provide any evidence of
trade uncertainty related to the existence of a temporary duty. Indeed, according to Russia, it is
difficult to reconcile the Euro pean Union's claim in respect of unpredictability for traders with the
certainty expressed by the European Union, in the context of its claim under Article II:1(b), first
sentence, that as of 1 January 2016 the temporary duty rate of 5% would be replaced b y a
permanent duty rate of 15%. In Russia's view, the European Union should "make a choice:
whether the measure is predictable or unpredictable". 193 In sum, Russia's position is that there is
no evidence that, in respect of the sixth measure, goods from the European Union have ever been
subject to treatment less favourable than that provided for in Russia's Schedule.194
7.134. The Panel notes that the European Union's claim under Article II:1(a) of the GATT 1994 is
based on reasoning developed in the un appealed panel report in EC – IT Products. It is therefore
useful to recall at the outset that panel's pertinent findings before considering whether they shed
light on the European Union's claim concerning the sixth measure at issue.

187 European Union's first written submission, para. 55.
188 European Union's first written submission, para. 56.
189 European Union's second written submission, para. 44.
190 European Union's first written submission, paras. 53 -57; opening statement at the first meeting of
the Panel, paras. 29 -30; responses to Panel question Nos. 15 and 48; second written submiss ion, paras. 41
and 44; opening statement at the second meeting of the Panel, para. 9; response to Panel question No. 88.
191 Russia's first written submission, paras. 22-23; second written submission, para. 16.
192 Russia's first written submission, para. 38; second written submission, para. 16; opening statement
at the second meeting of the Panel, para. 19.
193 Russia's opening statement at the second meeting of the Panel, para. 20.
194 Russia's first written submission, para. 25; opening statement at the second meeting of the Panel,
para. 20.

7.135. In EC – IT Products , the panel foun d that certain duty measures of the European
Communities were inconsistent with Article II:1(b), first sentence, but that the application by the
European Communities of a temporary "duty suspension" 195 "eliminate[d] that inconsistency" to
the extent of the s uspension.196 The panel then turned to consider whether the duty suspension
also eliminated the consequential inconsistency with Article II:1(a) that would otherwise follow
from a finding of inconsistency with Article II:1(b), first sentence.
7.136. In this respec t, the panel first noted that the temporary duty suspension had been
published on 31 March 2009, but was applied retroactively for the period January to March 2009.
The suspension was set to expire on 31 December 2010. The suspension at issue was the third in
a succession of duty suspensions applicable to the relevant products. The first suspension was
published on 31 March 2005 with effect from 1 January 2005 through 31 December 2006. The
second was published on 19 March 2007 with effect from 1 January tha t year. The third
suspension – the one in force at the time the EC – IT Products panel was established – enlarged
the scope of application of the previous suspensions. Based on the foregoing, the panel observed
that the duty suspension regime put in place by the European Communities had been renewed
biennially, with each suspension set to expire without automatic renewal. Prior suspensions had
been extended only pursuant to formal action taken by the EC Council. The panel also noted that
all three suspensions had applied retroactively during the period January to March of the relevant
years.197
7.137. The panel then proceeded to observe that although a suspension on imports had been
formally in effect for at least five years, the suspension was temporary in nature, and was subject
to formal extension or amendment. Additionally, the measures implementing the duty suspension
did not set out any specific conditions under which it could have been withdrawn or otherwise not
renewed. Thus, according to the panel, "the duty suspension in force at any particular time may
expire, be repealed, or be amended to increase or decrease coverage."198
7.138. Finally, the panel noted that unlike the tariff treatment under the duty suspension regime,
the tariff treatment accorded under the Euro pean Communities' Common Customs Tariff was not
contingent on renewal or extension. The panel found this distinction to be significant, because
"continuous tariff treatment provides foreseeability for traders operating in the marketplace". 199
Additionally, the tariff treatment provided in the European Communities' Common Customs Tariff
was prospective, whereas the duty suspension regime had been applied retroactively on a number
of occasions. On the basis of these considerations, the panel found that "the dut y suspension
measure does not eliminate the inconsistency with Article II:1(a) because there remains the
potential of deleterious effects on competition".200
7.139. Two points are worth highlighting in relation to this finding. First, the panel did not find
that the European Communities' use of a temporary duty suspension was, in itself, inconsistent
with Article II:1(a). It found rather that the use of a temporary duty suspension did not "eliminate"
the inconsistency with Article II:1(b), first sentence, caused by a different measure imposing WTO-
inconsistent duties. Thus, we do not read the panel's finding as suggesting that the duty
suspension itself gave rise to an independent breach of Article II:1(a), but only that it failed to
"eliminate" the consequential breach of that provision caused by the WTO-inconsistent duties.
7.140. Second, the panel's finding that the duty suspension did not "eliminate" the consequential
inconsistency with Article II:1(a) was based on a careful analysis of the features of the challenged
measure as a whole, including the offending duties and the temporary duty suspension. 201
Particularly important, in the panel's view, were the following facts: (a) the duty suspension
regime had been in place for a total of five years, yet there was no certainty that the suspension in
force at the time would be renewed upon the termination of a given suspension period; (b) the

195 Panel Report, EC – IT Products, para. 7.744.
196 Panel Report, EC – IT Products, para. 7.744.
197 Panel Report, EC – IT Products, paras. 7.758–7.759.
198 Panel Report, EC – IT Products, para. 7.760.
199 Panel Report, EC – IT Products, para. 7.761.
200 Panel Report, EC – IT Products, para. 7.761. According to the panel, "if a measure adversely affects
the conditions of competition for a product from that which it is entitled to enjoy under a Schedule, this would
be less favourable treatment under Article II:1(a)." Panel Report, EC – IT Products, para. 7.757.
201 Panel Report, EC – IT Products, para. 7.763.

individual suspensions provided no information concerning the conditions under which the
suspension would be terminated or otherwise not renewed; and (c) each individual suspension had
terminated in December of a given year and been renewed only in March of the following year,
with retroactive effect from January of the same year. These features were central to the panel's
finding that th e temporary duty suspension did not eliminate the potential for deleterious effects
on competition caused by WTO -inconsistent duties. These features made it difficult to predict, in
advance, whether the duty suspension "would expire, be repealed, or be amended", and thus gave
rise to a lack of "foreseeability for traders operating in the marketplace".202
7.141. Turning to the European Union's claim, the European Union argues that the temporary
duty reduction applied in respect of the sixth measure "creates deleteri ous effects on competition,
and therefore less favourable treatment in the meaning of Article II:1(a)". 203 The European Union
therefore asks the Panel to find that "[b]y making tariff treatment within the limits prescribed by
its Schedule temporary and provi ding at the same time for a future duty that exceeds the bound
rate, Russia has accorded less favourable treatment than that provided for in its Schedule" .204 In
considering this argument, we recall that, as we explained above, the panel in EC – IT Products did
not find that the duty suspension in that case was itself inconsistent with Article II:1(a). We
therefore do not agree with the European Union that "[a] lack of 'foreseeability for traders
operating in the marketplace' was mentioned by the panel in EC – IT Products as a reason for the
finding of less favourable treatment".205 The panel's finding of less favourable treatment was linked
to, and stemmed from, the WTO-inconsistent duties themselves.
7.142. In addition, we consider that the temporary duty reduction at issue in the present case is
significantly different from the temporary duty suspension at issue in EC – IT Products. In the first
place, in the case of the sixth measure we are not dealing with a duty suspension. The sixth
measure does not raise the is sue of whether the applied rate in force at the time of the Panel's
establishment could eliminate an inconsistency arising from another rate in force at the same time.
Only the 5% duty rate was being applied by Russia at the time.
7.143. Moreover, unlike in EC – IT Products, there is no indication in the present case that the
temporary duty reduction either had been or could have been renewed or extended. To the
contrary, pursuant to footnote 14C of Decision No. 77, the temporary reduction was to terminate
on 31 December 2015, with the applicable duty rate reverting to 15% on 1 January 2016.206 There
is nothing in the text of that Decision to suggest that the duty reduction could either have been
extended beyond 31 December 2015 or terminated prior to 31 December 20 15. Therefore, we see
no basis on which to find that there was any uncertainty as to whether the duty reduction would
be extended or when it would terminate. The footnote itself indicates that it would apply only until
31 December 2015.
7.144. Finally, and again as distinct from the measure at issue in EC – IT Products , Decision
No. 77, which provides for the duty reduction at issue here, was exclusively prospective in
application.
7.145. In our view, therefore, it was foreseeable for traders in the marketplace that, u ntil
31 December 2015, goods imported under the relevant tariff line would be subject to an ad
valorem duty rate of 5%, but that from 1 January 2016 they would be subject to an ad valorem
duty rate of 15%. Thus, we find that the temporary duty reduction at issue in this case did not
reduce foreseeability for traders in the marketplace regarding the applicable tariff treatment.
Indeed, we have relied precisely on the foreseeability of the duty rate reverting to 15% on
1 January 2016 to support our conclusion that at the time of the Panel's establishment the sixth
measure was inconsistent with Article II:1(b), first sentence.

202 Panel Report, EC – IT Products, para. 7.761.
203 European Union's first written submission, para. 56.
204 European Union's first written submission, para. 57.
205 European Union's response to Panel question No. 48 (emphasis added) (referring to Panel Report,
EC – IT Products, para. 7.761).
206 See paragraphs 7.73 and 7.80 to 7.81.

7.146. As regards the European Union's argument that "envisaging a future duty in excess of
bound rates is likely to restrict trade even before the higher duty becomes applicable" 207, we
consider that any such effect would not be the result of the temporary application of a duty rate of
5%.208 Rather, any such effect would be the result of the application from 1 January 2016 of the
duty rate of 15%. The findings we have made above under Article II:1(b), first sentence,
concerning the duty rate of 15% are in our view sufficient to address the European Union's
argument.
7.147. We turn, finally, to examine the European Union's argument that, in the light of th e panel
report in EC – IT Products , a temporary duty reduction does not "sufficiently guarantee"
compliance with Article II:1, and therefore creates deleterious effects on competition, at least
when it is clear from the outset that duties will continue to be levied in excess of bound duty rates
as soon as the period of the temporary reduction ends. 209 We note as an initial matter that the
panel in EC – IT Products pointed out that the European Union "sets forth its tariff bindings in the
EC Schedule pursuant to annual amendments to the autonomous duty rate in the CCT". 210 It
observed in this context that duty treatment cannot be guaranteed in an absolute sense. 211 We
agree with this observation. The European Union questions, however, whether the temporary duty
reduction at issue in our dispute "sufficiently" guarantees compliance.
7.148. In our view, the panel report in EC – IT Products does not stand for the proposition that a
temporary duty provides insufficient guarantees of compliance, and is therefore inconsistent w ith
Article II:1(a), whenever it is clear at the time the temporary duty is in force that it will later be
replaced by a duty that exceeds the tariff binding. The panel report in EC – IT Products indicates
only that a lack of continuous tariff treatment ma y lead to a lack of foreseeability. 212 We have
already determined, however, that the temporary duty reduction at issue in the present dispute
did not give rise to a lack of foreseeability, noting, inter alia, that it was prospective and had not
been retroactively applied. Moreover, the European Union has not identified any other aspect of
the sixth measure that in its view suggests that the temporary duty reduction provides insufficient
guarantees of compliance with Article II:1. We thus reject this contention by the European Union.
7.3.2.5.1 Conclusion
7.149. For the reasons set out above, the Panel finds that the European Union has not
demonstrated that the temporary duty rate of 5% required to be applied by Russia at the time of
the Panel's establishment created deleterio us effects on competition due to either a lack of
foreseeability or insufficient guarantees of compliance with Article II:1. We therefore conclude that
the European Union has not established that the sixth measure accords to imports treatment less
favourable than that provided in the Schedule, contrary to Article II:1(a) and independently of any
finding of inconsistency under Article II:1(b), first sentence.
7.4 Claims concerning applied combined duty rates that allegedly exceed bound duty
rates (the seventh to eleventh measures at issue)
7.150. The Panel now turns to the European Union's second set of claims, which concern the
seventh to eleventh measures at issue. The European Union claims that the combined duty rates
that the CCT requires Russia to apply in respect of these measures are in excess of the bound duty
rates contained in Russia's Schedule. According to the European Union, the measures are therefore
inconsistent as such with Article II:1(b), first sentence, of the GATT 1994, and consequently
Article II:1(a) of the GATT 1994.
7.151. We recall that the seventh to ninth measures at issue are combined duties allegedly
required to be applied in excess of ad valorem bound duty rates, while the tenth and eleventh

207 European Union's second written submission, para. 44.
208 Indeed, it appears to us that any such effect would result even if at the time of the Panel's
establishment no duty had been applied to the goods at issue.
209 European Union's first written submission, para. 54.
210 Panel Report, EC – IT Products, para. 7.761.
211 The panel report stated that "no amount of autonomous duty-free coverage can be assured in an
absolute sense." Panel Report, EC – IT Products, para. 7.761.
212 Panel Report, EC – IT Products, para. 7.761.

measures are combined duties allegedly required to be app lied in excess of combined duty rates.
In recognition of this distinction, we deal with the two groups of claims separately, beginning with
the claims concerning the seventh to ninth measures.
7.4.1 Claims concerning the seventh to ninth measures
7.152. We turn first t o the European Union's claims in respect of the duty rates required to be
applied by Russia in respect of tariff lines 1511 90 190 2 (the seventh measure), 1511 90 990 2
(the eighth measure), and 8418 10 200 1 (the ninth measure). The European Union claims that
Russia is required to apply duties on goods falling within these tariff lines that are inconsistent with
Article II:1(b), first sentence, of the GATT 1994, and consequen tly Article II:1(a) of the
GATT 1994.
7.4.1.1 Measures and applied rates at issue
7.153. The European Union argues that, in respect of goods falling under the seventh, eighth, and
ninth measures, the structure and design of the duties required to be applied by Russia result in
duties being levied in excess of bound rates with respect to a certain range of import prices.213
7.154. The European Union argues that, at the time of the Panel's establishment, Decision No. 52
of the Council of the Eurasian Economic Commission imposed an ad valorem duty rate of 3% for
goods imported under tariff lines 1511 90 190 2 ( the seventh measure) and 1511 90 990 2 (the
eighth measure). Nevertheless, as also noted by the European Unio n, footnote 13C of Decision
No. 52 subjected goods imported under these tariff lines to a duty rat e of 3%, but not less than
0.09 EUR/kg214, between 1 August 2014 and 31 August 2015. The European Union accepts that
the duty rate required to be applied by Russia in respect of these tariff lines reverted to an
ad valorem rate of 3% on 1 September 2015.215
7.155. The European Union further argues that, at the time of the Panel's establishment, the CCT,
as amended by Decision No. 103 of the Board of the Eurasian Economic Commission 216 and
Decision No. 52 of the Council of the Eurasian Economic Commission 217, imposed a combined duty
rate of "16.7%, but not less than 0.13 EUR/l"218 for goods imported under tariff line 8418 10 200 1
(the ninth measure). However, as also noted by the European Union, Decision No. 54 of the
Council of the Eurasian Economic Commission 219, which ent ered into force on
20 September 2015220, imposed a new duty rate of "15%, but not less than 0.13 EUR/l".
7.156. Russia does not contest the European Union's description of these three measures at issue.
7.157. The Panel notes that there is no dispute between the parties as to the duty rates required
to be applied by Rus sia in respect of the seventh to ninth measures, either at the time of the
Panel's establishment or subsequently. 221 Based on the evidence presented, we find that the duty
rates required to be applied by Russia in respect of the seventh, eighth, and ninth me asures, on
the date of the Panel's establishment and currently, are as follows:

213 European Union's first written submission, para. 79; second written submission, paras. 53 and 55.
214 That is, EUR 0.09 per kilogram.
215 European Union's first written submission, para. 81; second written submission, para. 53; response
to Panel question No. 91.
216 Decision No. 103 of the Board of the Eurasian Economic Commission, (Decision No. 103), (Exhibit
EU-8).
217 Decision No. 52 of the Council of the Eurasian Economic Commission, (Decision No. 52), (Exhibit EU-
6).
218 That is, EUR 0.13 per litre.
219 Decision No. 54 of the Council of the Eurasian Economic Commission, (Decision No. 54 of the
Council), (Exhibit RUS-9).
220 European Union's second written submission, para. 81; Russia's responses to Panel question Nos.
94- 95.
221 We also note that there is no dispute between the parties, and we accept, that the CCT requirements
establishing the duty rates applicable to the tariff lines at issue are attributable to Russia. See paragraphs 7.42
to 7.47 above.

Measure Tariff line Russia's applied duty rate provided
for at date of Panel's establishment
Russia's current
applied rate
The seventh measure 1511 90 190 2 3%, but not less than 0.09 EUR/kg222 3% as of 1 September
2015223
The eighth measure 1511 90 990 2 3%, but not less than 0.09 EUR/kg224 3% as of 1 September
2015225
The ninth measure 8418 10 200 1 16.7%, but not less than 0.13 EUR/l226 15% but not less than
0.13 EUR/l, as of 20
September 2015227
7.4.1.1.1 "Expired" and amended measures
7.158. At this point , we find it useful to deal with two issues that have arisen concerning the
identity and susceptibility to challenge of the seventh, eighth, and ninth measures. The first issue
concerns the quest ion of whether the seventh and eighth measures, which Russia claims have
"expired" during these proceedings, nevertheless constitute measures on which the Panel may
make findings. The second issue concerns the way in which the Panel should deal with the ni nth
measure, which was amended during the course of the proceedings.
7.4.1.1.1.1 Whether the seventh and eighth measures have "expired"
7.159. The first issue we need to consider is whether the seventh and eighth measures have
"expired", and what consequences would follow if they have.
7.160. Russia argues that the European Union's panel request brings within the scope of the
Panel's jurisdiction "any amendments, replacements, extensions, implementing measures" or other
measures "related" to the challenged measures. 228 Russia therefore requests the Panel to decide
on Russia's measures, including the seventh and eighth measures, as they have actually been
applied during the course of the proceedings. According to Russia, the challenged duty rates in
respect of tariff lines 1511 90 190 2 and 1511 90 990 2 expired on 31 August 2015, and were in
each case replaced with an ad valorem rate of 3%, which is exactly the same as the corresponding
duty rates in Russia's Schedule. Consequently, in Russia's view the Panel should not consider the
duty rates challenged by the European Union, as they did not have legal effect after
1 September 2015 and therefore their examination would not assist the Panel in securing a
positive solution to the dispute. According to Russia, the fact that the duty rates for these two
tariff lines have been brought into conformity with Russia's Schedule means that the Panel "has no
measure at issue to rule on". 229 Russia therefore asks the Panel to dismiss the European Union's
claims.230
7.161. According to the European Union, the Panel's terms of reference were set at the time of its
establishment, and the Panel should therefore make findings with respect to the measures as in
force on that date. The European Union has clarified, however, that it does not seek

222 Section II, Chapter 15 of the CCT, as amended by Decision No. 52, (Exhibit EU-6) (by virtue of
Footnote 31C, this rate was applied between 1 September 2014 and 31 August 2015).
223 Section II, Chapter 15 of the CCT, as amended by Decision No. 52, (Exhibit EU-6) (by virtue of
Footnote 31C, this rate is applied from 1 September 2015).
224 Section II, Chapter 15 of the CCT, as amended by Decision No. 52, (Exhibit EU-6) (by virtue of
Footnote 31C, this rate was applied between 1 September 2014 and 31 August 2015).
225 Section II, Chapter 15 of the CCT, as amended by Decision No. 52, (Exhibit EU-6) (by virtue of
Footnote 31C, this rate is applied from 1 September 2015).
226 Section XVI, Chapter 84 of the CCT, as amended by Decision No. 52, (Exhibit EU-6); and Decision
No. 103, (Exhibit EU-8).
227 Section XVI, Chapter 84 of the CCT, as amended by Decision No. 54 of the Council, (Exhibit RUS-9)
(by virtue of Footnote 42C, this rate applies from the date of the Decision's entry into force until 31 August
2016, after which date it reverts to 15%). Decision No. 54 of the Council was published on 10 September 2015
and entered into force, in accordance with its paragraph 3, on 20 September 2015. European Union's second
written submission, para. 84; Russia's response to Panel question No. 95.
228 European Union's request for establishment of a panel, para. 13.
229 Russia's first written submission, para. 106.
230 Russia's first written submission, paras. 99, 101, 103, 105-106 and 108; responses to Panel question
Nos. 24 and 68-69; second written submission, para. 5, 8 and 9; opening statement at the second meeting of
the Panel, para. 40.

recommendations under Article 19 of the DSU with respect to measures that have ceased to apply,
including the seventh and eighth measures.231
7.162. The Panel recalls its discussion, in the context of the sixth measure at issue, of the legal
implications of a change made subsequent to a panel's establishment that affects a challenged
measure.232 As we explained, a measure that is modified subsequent to a panel's establishment
does not, simply by virtue of that modification, cease to be a measure for the purposes of WTO
dispute settlement. E ven if an allegedly WTO -inconsistent measure is brought into conformity
during the course of the proceedings, a panel may still be required, pursuant to its terms of
reference and Article 11 of the DSU, to make findings in respect of the measure as it existed at the
time of the panel's establishment 233, at least where the complaining party has not requested the
panel to consider the measure as subsequently changed. The fact that a measure has been
brought into conformity with the covered agreements subsequent to a panel's establishment may,
however, have implications for what recommendations, if any, a panel decides to make.234
7.163. Applying these principles to the facts before us, we cannot agree with Russia that the
seventh and eighth measures as they existed at th e time of the Panel's establishment do not
constitute measures on which we may make findings. We note in this respect that the European
Union has only requested that we make findings on those measures as they existed at that
time.235 Accordingly, both our te rms of reference and Article 11 of the DSU, which requires us to
make an "objective assessment of the matter", compel us to examine the WTO -consistency of
these measures as they existed at the time the Panel was established. It would not be appropriate,
in the absence of a specific request from the European Union, for us to examine the seventh and
eighth measures in their current form ("as they are currently applied" 236, to use Russia's words)
rather than as they existed at the time of the Panel's establishme nt. However, we will take
appropriate account of any relevant changes made to the measures at issue when making our
recommendations (if any).
7.4.1.1.1.2 Whether the Panel should consider the ninth measure as amended
7.164. The second issue facing us is whether the Panel should consider the ninth measure at issue
as it existed at the time of the Panel's establishment, as it existed from 1 to 20 September 2015,
or as amended from 20 September 2015.
7.165. Both parties recognize that Russia's bound rate fell on 1 September 2015. They also agree
that the ninth measure was amended during the course of these proceedings, and that that
amendment entered into effect on 20 September 2015. 237 However, according to the European
Union, the measure remains inconsistent with Russia's obligations un der Article II:1(b), first
sentence. Thus, according to the European Union, the ninth measure as amended continues to
result in the imposition of customs duties in excess of those provided for in Russia's Schedule.
7.166. In the light of these developments, the E uropean Union asks the Panel to make findings
concerning the ninth measure as it existed (i) at the time of the Panel's establishment; (ii)
between 1 and 20 September 2015, during which time the extent of the measure's inconsistency
was, according to the E uropean Union, "aggravated" 238; and (iii) as amended, from
20 September 2015 onwards.239

231 European Union's opening statement at the first meeting of the Panel, para. 70; second written
submission, para. 82; opening statement at the second meeting of the Panel, para. 25; response to Panel
question No. 91.
232 See section 7.3.2.1.1 above.
233 Panel Report, Chile – Price Band System, paras. 7.7–7.8.
234 Appellate Body Report, US – Certain EC Products, paras. 81 and 129. See also our discussion of this
issue in the context of the sixth measure, in paragraph 7.85 above.
235 European Union's second written submission, para. 82.
236 Russia's first written submission, para. 101.
237 Russia's response to Panel question No. 42; second written submission, para. 5; and European
Union's second written submission, fn 71.
238 European Union's response to Panel question No. 10.
239 European Union's second written submission, para. 85; response to Panel question No. 92.

7.167. Russia has not responded specifically to this aspect of the European Union's request for
findings. Nevertheless, in the Panel's view, the extensive findings requested by the European
Union may not be necessary in order to secure a positive solution to this dispute, for the following
reasons.
7.168. Addressing first the European Union's first and third requests (i.e. that the Panel make
findings on the ninth measure both as it exi sted at the time of the Panel's establishment and as
amended from 20 September 2015), we note that the nature of the inconsistency alleged to have
existed at the time of the Panel's establishment is essentially the same as that alleged to exist
following the measure's amendment as of 20 September 2015. Specifically, both claims concern
the requirement to apply a duty rate expressed as "x%, but not less than y per unit of
measurement" in respect of products imported under a tariff line bound simply as x% (th at is, in
ad valorem terms). It is only the numerical value of "x" (as it figures in both the applied and
bound duty rates) that has changed during the course of these proceedings.240
7.169. Accordingly, our view is that a finding in respect of the measure as amen ded would be
sufficient to address the issues raised by this claim. Such a finding would not leave open the
question of whether the measure as it existed at the time of the Panel's establishment was
consistent with Russia's WTO obligations or not. As we ha ve explained, the measure's design and
structure have not changed, but only the numerical value of "x" as it figures in the applied and
bound duty rates. Consequently, a finding based on that design and structure would indicate
whether the measure as it ex isted at the time of the Panel's establishment was consistent with
Article II:1(b), even though the value of "x" was different.
7.170. We turn, finally, to the European Union's second request (i.e. that the Panel make findings
concerning the ninth measure as it existed between 1 and 20 September 2015). According to the
European Union, until 31 August 2015, the relevant bound duty rate was 16.7%. On 1 September
2015, in accordance with Russia's Schedule, the bound duty rate was lowered to 15%. However,
until 20 Se ptember 2015, Russia was required to subject goods imported under this tariff line to
an applied duty rate of "16.7%, but not less than 0.13 EUR/l". The European Union thus argues
that between 1 and 20 September 2015, Russia's alleged breach of Article II: 1(b), first sentence,
was aggravated because, although the bound duty rate with which Russia had to comply had
dropped (from 16.7% to 15%), the duty rate required to be applied by Russia remained the same.
Therefore, in the European Union's view, from 1 to 20 September 2015, even the ad valorem
element of the combined applied duty rate (16.7%) exceeded the bound duty rate (15%).241
7.171. It appears to us that the European Union's descriptions of both the change in the bound
duty rate and the absence of a change in the duty rate required to be applied by Russia from
1 to 20 September 2015 are correct. Russia has not argued otherwise. Nevertheless, in our view
additional findings on the measure as it existed during the period 1 to 20 September 2015 may
not be necessar y to resolve this dispute. If we were to find that the ninth measure as amended,
the ad valorem element of which is currently equal to Russia's bound ad valorem duty rate, is
inconsistent with Article II:1(b), first sentence, then it would follow a fortior i that the ninth
measure would have been WTO -inconsistent during the period 1 to 20 September 2015, when
even the ad valorem element of the ninth measure (16.7%) was higher than the relevant bound
duty rate (15%). In such circumstances, we do not believe t hat additional findings would be
necessary to secure a positive solution of this dispute. In contrast, if we were to find that the ninth
measure as amended is not inconsistent with Article II:1(b), first sentence, it may be necessary to
consider the measure as it existed from 1 to 20 September 2015 in order to ensure that we do not
leave gaps in our analysis. Accordingly, we will return to the ninth measure as it existed from
1 to 20 September 2015 only if we conclude that the ninth measure as amended is no t
inconsistent with Article II:1(b), first sentence.
7.172. In sum, in these findings we will consider the seventh and eighth measures as they existed
at the time of the Panel's establishment. In contrast, in the light of the European Union's request,

240 That is, the applied duty rate ("x% but not less than y per unit") has changed from "16.7% but not
less than 0.13 EUR/l" to "15% but not less than 0.13 EUR/l", and the bound rate (x%) has changed from
16.7% to 15%. Put another way, the value of x, as it figures in both the applied and bound duty rate, has
dropped from 16.7% to 15%.
241 European Union's second written submission, para. 84.

we will consider the ninth measure as amended from 20 September 2015. However, if we conclude
that the ninth measure as amended is not inconsistent with Russia's obligations under Article
II:1(b), first sentence, we will return to that measure as it ex isted during th e period
1 to 20 September 2015.
7.4.1.2 Consistency with Article II:1(b), first sentence, of the GATT 1994
7.173. Turning now to assess the consistency of the seventh, eighth, and ninth measures with
Article II:1 of the GATT 1994, the Panel finds it appropriate, for the reasons given above242, to first
address the European Union's claims under Article II:1(b), first sentence, before turning to the
European Union's consequential claim under Article II:1(a).
7.174. According to the European Union, the seventh, eighth, and ninth mea sures at issue are
inconsistent with Article II:1(b), first sentence. This is so, in the European Union's view, because in
respect of tariff lines 1511 90 190 2, 1511 90 990 2, and 8418 10 200 1, Russia is required to
apply a combined duty (pursuant to which the customs authority, in respect of every import of the
affected goods, calculates and chooses the higher of either an ad valorem duty or a specific duty),
whereas its Schedule provides for a straightforward ad valorem bound duty rate. It does so, in the
European Union's view, in a way that necessarily results in the application of duties in excess of
bound duty rates for some categories of transactions.243
7.175. The European Union notes that although the application of a type of duty other than that
provided for in a Member's schedule is not, in itself, inconsistent with Article II:1, such variation
will give rise to an inconsistency to the extent that it results in ordinary customs duties being
levied in excess of those provided in the schedule. In the Europea n Union's view, "simple
arithmetic"244 shows that, in respect of the seventh, eighth, and ninth measures, there is a break -
even price or customs value – expressed in relation to the weight or volume of the affected
imported goods – below which the ad valorem equivalent of the specific element of the applied
combined duty will inevitably exceed Russia's bound ad valorem duty.245 Additionally, and as noted
above, the European Union argues, in respect of the ninth measure, that from 1 to 20 September
2015 (after Russia's bound duty rate fell, but before the applied duty rate was reduced), even the
ad valorem element of the applied duty rate (16.7%) exceeded the bound rate (15%). Because,
during this period, the combined duty required the customs authority to select the higher of two
values, the minimum duty required to be levied in all cases was 16.7%. This meant that, in
respect of the ninth measure, the applied duty rate exceeded the bound rate with regard to all
rather than just some customs values. 246 According to the European Union, Russia did not, either
at the time of the Panel's establishment or subsequently, apply any kind of cap or ceiling
mechanism that would have prevented it from levying duties in excess of bound rates.247
7.176. The European Union adds that, as a matter of law, the fact that a duty is designed in a
way that makes individual violations merely possible, in a given price range, suffices to show a
violation of Article II:1. The European Union emphasizes, however, that its arguments are not
"purely hypothetical".248 To demonstrate this, the European Union submitted a series of customs
declarations that in its view make it "abundantly clear" 249 that the application of the specific

242 See paragraph 7.48 above.
243 European Union's first written submission, para. 79.
244 European Union's first written submission, para. 85.
245 European Union's first written submission, para. 85. In its second written submission, the European
Union provides the following mathematical formula in support of its argument:
An applied duty expressed as "x%, but not less than y per unit of measurement" … will exceed a
bound rate expressed as " x%" … for every customs value below "y divided by x%", as long as
there is no additional mechanism like a ceiling that would prevent that from happening with
respect to an individual import transaction".
European Union's second written submission, para. 58.
246 European Union's second written submission, para. 84.
247 European Union's first written submission, para. 103; opening statement at the first meeting of the
248 European Union's first written submission, para. 88.
249 European Union's first written submission, para. 98.

elements of the combined duties results in duties being levied in excess of bound rates, sometimes
"dramatically"250 so.251
7.177. Russia argues that the European Union's claims in respect of the seventh to ninth
measures are essentially about the structure and design of the applied duties, rather than the
duties themselves. In Russia's view, the mere fact that a Member applies a type of duty other than
that provided for in its schedule is not inconsistent with Article II:1. Rather, to successfully
challenge a customs duty under Article II:1, a complaining Member has additionally to prove that
the customs duty collected is in excess of the bound rate. 252 Moreover, in Russia's view, the
European Union's claims are legally flawed because nothing in the covered agreements requires a
Member to use a legislative ceiling or cap when they apply customs du ties.253 Additionally, Russia
argues that the European Union's claims must fail because they do not take account of paragraph
313 of Russia's Working Party Report, which, in its view, contains a methodology that must be
used when assessing the consistency of an applied combined duty with Article II:1.254
7.178. The Panel will, first of all, consider Russia's characterization of the European Union's claims
in respect of the seventh to ninth measures.
7.4.1.2.1 Duty type/structure variation
7.179. As noted above, Russia argues that the European Union's claims in respect of the seventh
to ninth measures are essentially about the structure and design of the applied duties, rather than
the duties themselves, and that Article II:1 does not prohibit it from applying a type or structure of
duty other than that provided for in its Schedule.
7.180. The Panel notes that, according to the Appellate Body, "the application of a type of duty
different from the type provided for in a Member's Schedule is inconsistent with Article II:1(b),
first sentence, of the GATT 1994 to the extent that it results in ordinary customs duties being
levied in excess of those provided for in that Member's Schedule ".255 Therefore, we agree with the
parties that the mere use by a Member of a duty type or structure that differs fr om the duty type
or structure used in that Member's Schedule is not, in itself, inconsistent with Article II:1. What
matters is whether the particular duty that is applied exceeds that set forth in a Member's
Schedule.
7.181. In our view, however, the European Un ion's claims do not arise from the mere fact that
Russia is required to apply combined duties in respect of tariff lines with a bound rate expressed in
ad valorem terms. Rather, the European Union's concern is that certain duties applied by Russia
lead, in some circumstances, to the levying of ordinary customs duties in excess of those provided
for in Russia's Schedule. As we understand it, the European Union uses the terms "structure and
design" in the context of explaining how and why the combined duties at issue result, in its view,
in the imposition of customs duties in excess of Russia's bound duty rates. The European Union's
claim is that the seventh to ninth measures are inconsistent with Article II:1(b), first sentence, not
simply because their struc ture or design differs from the type, structure or design of the
corresponding bound rates in Russia's Schedule, but rather because their type, structure and
design result in the imposition of customs duties in excess of those set forth in Russia's Schedule.
7.4.1.2.2 Methodology for comparison of applied and bound duty rates
7.182. Having addressed the nature of the European Union's claims, we now turn to consider the
European Union's claim that the seventh to ninth measures lead (or led, at the time of the Panel's

250 European Union's first written submission, para. 88.
251 European Union's first written submission, paras. 85, 88 and 98; opening statement at the first
meeting of the Panel, para. 67; second written submission, para. 53; and opening statement at the second
252 Russia's first written submission, paras. 104, 115, 118, and 122; second written submission, para.
31; opening statement at the second meeting of the Panel, paras. 25-26.
253 Russia's first written submission, paras. 129 and 132-133; opening statement at the first meeting of
254 The parties' arguments on this issue are summarized in more detail below in section 7.4.1.2.2.
255 Appellate Body Report, Argentina – Textiles and Apparel, para. 55 (emphasis added).

establishment) to the imposition of customs duties in excess of those provided in Russia's
Schedule.
7.183. We begin this part of our analysis by observing that Russia contests the methodology used
by the European Union to compare the applied and bound rates. According to Russia, the European
Union's approach is flawed because it does not take account of the methodology in paragraph 313
of Russia's Working Party Report. According to Russia, this methodology is to be used when
calculating the ad valorem equivalent of th e specific element of a combined applied duty. In
Russia's view, the European Union cannot, as a legal matter, establish that Russia applies specific
duties in excess of bound ad valorem duties contrary to Article II:1(b), first sentence, unless it
submits evidence conforming to the methodological specifications of paragraph 313.256
7.184. The European Union disagrees with Russia, arguing that paragraph 313 is not relevant to
an analysis under Article II:1(b), first sentence.257
7.185. The Panel notes that Russia's argument s concerning paragraph 313 raise the question of
how we should compare the relevant applied and bound duty rates for the purposes of assessing
the consistency of the seventh, eighth, and ninth measures with Article II:1(b), first sentence. This
issue is lo gically prior to the issue of whether the European Union has shown that the measures
are in fact inconsistent. Accordingly, we will initially consider whether paragraph 313 is relevant to
our assessment of the European Union's claims, and in particular whe ther it provides for a
methodology that must be used in calculating the ad valorem equivalent of the specific element of
a combined duty.
7.4.1.2.2.1 Relevance of Paragraph 313 of Russia's Working Party Report
7.186. Paragraph 313 of Russia's Working Party Report provides:
As a result of these negotiations, the representative of the Russian Federation
confirmed that for goods subject to a combined duty (for example, in the form of
5 per cent, but not less than 2 €/kg), it would be ensured, whether by the Russian
Federation or the competent bodies of the CU [customs union], that the ad valorem
equivalent of the specific duty rate for each tariff line, calculated based on the average
customs value, would be no higher than the alternative ad valorem duty rate for that
tariff line in the Schedule of the Russian Federation in accordance with the following
provisions:
- On an annual basis, it would be determined, whether by the Russian Federation
or by the competent bodies of the CU, whether it was necessary to reduce the
applied specific duty rate to ensure that it was no higher than the applied ad
valorem duty rate;
- This calculation would be done two months before the end of each calendar
year, beginning in the first calendar year after the date of the accession of the
Russian Federation;
- Data for the calculations would be from a three -year period, determined by
taking trade data from a recent five -year representative period and excluding
data for years with the highest and lowest trade for that period;
- Data on trade with countries or territories with which the Russian Federation
had a Customs Union or free trade agreement would be excluded from the
calculation; and

256 Russia's first written submission, paras. 138-143 and 153-158; second written submission, paras.
24-46; response to Panel question No. 99.
257 European Union's second written submission, paras. 64-79.

- Data would be drawn from the Official Customs Statistics of the Russian
Federation notified to the WTO Integrated Database (IDB) unless such data was
unavailable. In such case, IDB and COMTRADE data would be used.
The Russian Federation would inform Members of the results of these calculations on a
tariff line basis and, if the results showed that it was neces sary to reduce the specific
duty rate alternative, this reduction would be made and would go into effect
automatically, beginning on 1 January of the year following the calculation. In no case
would the applied duty (whether expressed in ad valorem or spec ific terms and
whether determined by the Russian Federation or the competent bodies of the CU)
exceed the bound rate of the combined duty. If, after reductions based on the annual
re-calculation and changed circumstances, the specific duty rate alternative became
significantly lower than ad valorem alternative rate of duty, the Russian Federation
reserved the right to modify permanently the form of the duty to a purely ad valorem
duty, at a level that complied with the binding for the relevant tariff line. The Working
Party took note of these commitments.
7.187. In Russia's view, paragraph 313 "informs the content of Russia's obligations under Article
II:1", and in particular is a "necessary mechanism" 258 for the calculation of the ad valorem
equivalent of the specif ic element of a combined duty. According to Russia, as a result of
paragraph 313, individual customs declarations cannot serve as evidence that the ad valorem
equivalent of an applied specific duty rate is in excess of the corresponding ad valorem bound duty
rate. Rather, to establish that the specific element of a combined duty has been applied in excess
of an ad valorem bound rate, a complaining party would, in Russia's view, need to "submit
evidence based on data from a three -year period and average cust oms value". 259 According to
Russia, as the European Union's evidence does not meet these requirements, it cannot be
considered to have established a prima facie case that the se venth to ninth measures are
WTO-inconsistent.260
7.188. The European Union counters that p aragraph 313 only concerns goods subject to a
combined duty in Russia's Schedule. In the European Union's view, paragraph 313 does not
concern goods for which the Schedule provides an ad valorem rate and to which Russia
nevertheless applies a combined duty . Thus, according to the European Union, paragraph 313 is
not relevant to the seventh to ninth measures.261
7.189. The European Union further argues that, in any event, paragraph 313 concerns the
relationship between the specific element and the ad valorem element of a single combined duty.
According to the European Union, the purpose of the paragraph is to ensure that the specific
element of such a combined duty does not exceed the ad valorem element of that same duty for
the average customs value. If, after perfor ming the calculation in paragraph 313, it appears that
the specific element leads to a higher duty on average, then paragraph 313 would require Russia
to further reduce the applied specific element below its bound level. In this sense, paragraph 313
imposes obligations on Russia that are distinct from, and additional to, those contained in
Article II:1 and Russia's Schedule. Paragraph 313 does not set out a way of interpreting, changing,
or limiting Russia's obligations under Article II:1. In the European U nion's view, accepting Russia's
interpretation of paragraph 313 would make Article II:1(b), first sentence, practically meaningless
as far as Russia is concerned, because it would allow Russia to freely exceed its tariff bindings as
long as it did so only some of the time, compensating the duties it levies in excess by imposing
others below bound rates.262

259 Russia's first written submission, para. 155.
260 Russia's first written submission, paras. 136, 142-143 and 155-157; opening statement at the first
meeting of the Panel, paras. 78 and 80; second written submission, paras. 28-30, 33-34 and 39; opening
statement at the second meeting of the Panel, paras. 29, 31, and 34-39; responses to Panel question Nos. 20,
25, 30, 70-71, 96 and 97(c).
261 European Union's opening statement at the first meeting of the Panel, para. 73; second written
submission, para. 65; response to Panel question No. 75.
262 European Union's opening statement at the first meeting of the Panel, paras. 74-75 and 80; second
written submission, paras. 64-65, 68-69 and 74; opening statement at the second meeting of the Panel, paras.
17-21 and 23; responses to Panel question Nos. 23, 25, 30, 70, 73, 96-98 and 112-113.

7.190. The question before the Panel is whether paragraph 313 sets forth a methodology through
which the ad valorem equivalent of the specific element of a combi ned duty rate must be
calculated. If that were the case, the European Union's claims concerning the seventh to ninth
measures would need to be supported by evidence that takes this methodology into account.
7.191. Before examining the text of paragraph 313, it is useful to further explain the significance
of this issue for the current proceedings. In respect of the seventh, eighth, and ninth measures at
issue, the corresponding bound rates are expressed in straightforward ad valorem terms. The CCT,
however, requires the application of combined duties. To recall, the term "combined duty", as it
has been used in these proceedings, refers to a duty that consists of at least one ad valorem
alternative rate combined with a minimum specific alternative rate. 263 Where, in a given import
transaction, the ad valorem alternative rate, if it were applied, would yield an amount of duty per
unit of measurement that is less than the amount that the specific alternative rate would yield, the
CCT requires application of the specific alternative duty rate.264
7.192. In cases where a bound duty rate is expressed in ad valorem terms but the corresponding
applied duty is expressed in specific terms, the question arises how to compare the former with
the latter for the purpose of determining compl iance with Article II:1(b), first sentence. The
Appellate Body has explained in this respect that "for any specific duty, there is an ad valorem
equivalent deduced from the ratio of the absolute amount collected to the price of the imported
product".265 In other words, the comparison can be facilitated by converting the specific duty into a
percentage of the customs value of the imported product, and comparing that percentage with the
ad valorem bound duty rate.266
7.193. In Russia's view, paragraph 313 sets out a methodology that must be followed for a legally
valid comparison between a bound ad valorem duty rate and the specific element of an applied
combined duty rate to be calculated. As explained above, according to Russia the conversion and
comparison must be co nducted as envisaged in paragraph 313, that is to say, in respect of the
"average customs value" of a particular product, and on the basis of data " from a three -year
period, determined by taking trade data from a recent five -year representative period and
excluding data for years with the highest and lowest trade for that period".267
7.194. We begin our assessment by looking closely at the content of paragraph 313. We note
that, pursuant to paragraph 2 of Russia's Accession Protocol and paragraph 1450 of its Workin g
Party Report, paragraph 313 is an integral part of the WTO Agreement. However, we observe that
paragraph 313 is silent on the nature of its relationship, if any, with Article II:1(b), first sentence.
Paragraph 313 therefore neither expressly precludes no r expressly endorses Russia's
interpretation.
7.195. We next observe that both Article II:1(b), first sentence, and paragraph 313 are concerned
with, or may involve, comparisons of duties or duty rates. In particular, both provisions may, as in
the case of combined applied duties of the kind at issue here, require calculation of the ad valorem
equivalent of a specific duty or rate, and the comparison of that ad valorem equivalent with
another duty or rate. However, the two provisions are significantly different wh en it comes to the
issues of what precisely is to be compared, and for what purpose.

263 In the present case, the relevant combined duties take the form "x%, but not less than y per unit"
(the seventh to ninth measures) or "x%; or y%, but not less than z per unit" (the tenth and eleventh
measures).
264 For instance, at the time of the Panel's establishment, the tariff line concerning the seventh measure
was subject to an ad valorem bound duty rate of 3%. In the CCT, however, that tariff line was subject to a
combined duty rate of "3%, but not less than 0.09 EUR/kg". Thus, where levying a duty of 3% of the customs
value would work out to be less than 0.09 EUR/kg, the customs authority is required to levy the duty at the
rate of 0.09 EUR/kg. The duty levied on a product imported under the seventh measure can therefore never be
less than the equivalent of 0.09 EUR/kg, whether expressed in ad valorem or specific terms.
265 Appellate Body Report, Argentina – Textiles and Apparel, para. 50.
266 We note that the opposite conversion could also be used for comparative purposes, as it is possible
to estimate the specific duty equivalent that would result from the application of an ad valorem duty rate.
Although the calculation of one or the other may be easier depending on the information available in a case,
both comparative approaches are mathematically equivalent and should, therefore, lead to the same finding.
267 Russia's Working Party Report, para. 313.

7.196. As its terms make clear, Article II:1(b), first sentence, calls for a comparison between the
"customs duties … set forth and provided" for in a Member's Schedule, on the one hand, and the
customs duties levied on goods "on their importation into the territory to which the Schedule
relates", on the other hand. 268 The relevant comparison under Article II:1(b), first sentence, is
thus between a bound duty or duty rate and an applied duty or duty rate. The purpose of this
comparison is, as the text makes clear, to determine whether imports have been "exempt[ed]
from ordinary customs duties in excess of those" provided for in the Schedule.
7.197. Paragraph 313 calls for a different comp arison. The first sub -paragraph indicates the
overall concern of the provision, which is to ensure that "the ad valorem equivalent of the specific
duty rate for each tariff line, calculated based on the average customs value, would be no higher
than the al ternative ad valorem duty rate for that tariff line in the Schedule of the Russian
Federation". The way in which this is to be ensured is elaborated in the tirets of that sub -
paragraph. In particular, the first tiret of the sub -paragraph translates the ove rall concern into a
specific obligation: on an annual basis, Russia or the competent bodies of the Customs Union (and
now the EAEU) must determine "whether it [is] necessary to reduce the applied specific duty rate
to ensure that it [i]s no higher than the applied ad valorem duty rate".
7.198. This tiret makes clear that the relevant comparison under paragraph 313 is between the
two alternative elements – ad valorem and specific – of a single combined applied duty. Thus,
paragraph 313 is not concerned with the re lationship between Russia's applied and bound duties;
rather, its purpose is to ensure that if Russia's customs authorit y applies the specific element of a
combined applied duty, the ad valorem equivalent of the specific duty rate, determined on the
basis of the average customs value, does not exceed the corresponding alternative ad valorem
duty rate.
7.199. Turning to relevant context, the immediately preceding paragraph 312 in our view further
elucidates the different purpose of the mechanism in paragraph 313. It provides, in relevant part:
In response to comments of some Members that, combined (mixed) and specific rates
should be replaced by ad valorem duties upon the accession of the Russian
Federation, in order to increase transparency and reduce distortions in trade, the
representative of the Russian Federation noted that the CCT ensured a similar
effective rate for the ad valorem and specific alternatives of combined rates.
7.200. It is instructive that this paragraph contains, in fine , the phrase "the ad valorem and
specific alternatives of combined rates". (second emphasis added) To us, this provides additional
confirmation that paragraph 313 calls for a comparison between two elements of a single
combined applied duty, and not a comparison between a combined app lied duty and a
corresponding bound duty.269
7.201. In our view, not only the what and the why of the comparisons called for under
Article II:1(b), first sentence, and paragraph 313 are different, but also the how. As we have
mentioned above, for goods subject to a combined applied duty, paragraph 313 instructs that the
ad valorem equivalent of a specific duty rate be calculated on the basis of the average customs
value of a particular product. This calculation is to be done using data from a three -year period,
which in turn is to be determined by taking trade data from a recent five -year representative
period and excluding data for years with the highest and lowest trade for that period. So
calculated, the ad valorem equivalent must then be compared to the alterna tive ad valorem
element of the applied combined duty rate.
7.202. In contrast, Article II:1(b), first sentence, calls for a simple comparison between the bound
duty rate and the actually applied or applicable duty rate. In the case of combined applied duties,
it may be necessary to calculate the ad valorem equivalent of a specific element in order to

269 While it is true that paragraph 312 talks about the CCT prior to Russia's accession, paragraph 313
opens with the words "[a]s a result of these negotiations", and then goes on to say that "it would be ensured"
(emphasis added) by Russia that "the ad valorem equivalent of the specific duty rate for each tariff line would
be no higher than the alternative ad valorem duty rate for that tariff line". Russia's Working Party Report,
paras. 312-313.

compare it with a bound ad valorem rate.270 But nothing in the text of Article II:1(b), first
sentence, suggests that this calculation must or even can be based on the average customs value
of imports of the good concerned, or on data from a three -year period. The text of Article II:1(b)
states, broadly, that "products … shall, on their importation … be exempt from ordinary customs
duties in excess of those set forth an d provided" in a Member's Schedule. This unqualified
language, together with the considerations we set out above 271, suggests to us that the obligation
in Article II:1(b), first sentence, applies to each and every import transaction. Thus, the duties
applied or applicable in respect of each and every import transaction must comply with the upper
limit imposed by Article II:1(b), and not only some average duty calculated on the basis of a series
of import transactions.
7.203. In sum, while both paragraph 313 and Art icle II:1(b), first sentence, require comparisons,
there are significant differences between the two provisions in terms of what is to be compared,
how the comparison is to be undertaken, and the purpose for which the comparison is made.
These significant differences indicate to us that paragraph 313 does not, as Russia suggests,
prescribe or authorize a methodology to be applied when calculating ad valorem equivalents as
part of an analysis under Article II:1(b), first sentence. We find no support for this view in
paragraph 313. Moreover, the text of Article II:1(b), first sentence, and other considerations
suggest to us that the calculation of an ad valorem equivalent under that provision is to be based
on the specific duty applied or applicable to a good vis-à-vis its customs value.272
7.204. As an additional consideration, we have difficulty accepting Russia's interpretation of
paragraph 313 because of its implications. Accepting Russia's interpretation would mean that
Russia could subject some imports to duties in excess of bound rates, provided that, at the end of
the relevant three -year period, the duty applied in respect of the average customs value was in
conformity with the relevant bound rate. In other words, Russia could exceed its tariff bindings in
some transactions, provided that, over time, it levied duties below bound rates in others. We have
found above, however, that Article II:1(b), first sentence, does not permit such balancing. 273 In
our view, it would not be appropriate to endorse an interpretation of paragraph 313 that would
result in such a major departure from the requirements of Article II:1(b), first sentence, as we
understand it, without a very clear indication that this was indeed what the negotiators intended.
We have been unable to find any such indication.
7.205. Additionally, accepting Russia's interpretation of paragraph 313 would effectively make it
impossible for a Member to promptly challenge individual instances of application of a combined
duty in excess of the bound duty set forth in Russ ia's Schedule. This is because compliance with
Article II:1(b), first sentence, would need to be ensured only in respect of an average customs
value calculated on the basis of data from a three -year period. Here again, in the absence of a
clear indication to the contrary, it is highly doubtful, in our view, that the negotiators of paragraph
313 intended to limit the ability of Members exporting goods to Russia to promptly challenge
individual instances of application of a combined duty.
7.206. In sum, we consider that paragraph 313 is not relevant to the analysis of an applied
combined duty that allegedly results in the imposition of duties in excess of those provided for in
Russia's Schedule. More particularly, we consider that no recourse needs to, or can, be ha d to
paragraph 313 when calculating the ad valorem equivalent of the specific element of an applied
combined duty rate to determine whether that applied combined duty is in excess of the
corresponding ad valorem duty set forth in Russia's Schedule. As this is precisely the analysis that
must be performed in assessing the consistency of the seventh to ninth measures with
Article II:1(b), first sentence, paragraph 313 will not be considered further in our analysis of these
measures. Having found that paragrap h 313 is not relevant to our assessment of the claims
concerning the seventh to ninth measures, we do not find it necessary to determine in addition
whether, as the European Union argues, paragraph 313 establishes an additional obligation on

270 As explained above, in some cases it may also be possible to compare by calculating the specific duty
equivalent of an ad valorem rate.
271 On this point, see in paragraphs 7.15 to 7.17 and 7.21 to 7.33.
272 We note that the customs value of that good would need to be determined in accordance with the
provisions of the Customs Valuation Agreement.
273 See paragraph 7.33.

Russia only in situations where both the applied and the bound duties are expressed in combined
terms.
7.4.1.2.3 Comparison of applied and bound duty rates
7.207. We have already set out our understanding of the relevant applied duty rates in respect of
the seventh to ninth measures. We can therefore turn to consider whether those applied rates lead
to the imposition of duties in excess of those set forth in Russia's Schedule. To undertake this
analysis, we once again need to compare the duty rates required to be applied by Russia, on t he
one hand, and the bound duty rates provided for in Russia's Schedule, on the other. We recall
that, for the reasons given above 274, we will examine the seventh and eighth measures as they
existed at the time of the Panel's establishment. Conversely, in re spect of the ninth measure, we
will focus on the measure as it currently exists following an amendment that entered into force on
20 September 2015. We will consider the ninth measure as it ex isted during the period
1 to 20 September 2015 only if we conclu de that th e measure as amended is not
WTO-inconsistent.
7.208. In respect of the seventh and eighth measures, we find, based on the evidence presented,
that the applied and bound duty rates at the time of the Panel's establishment were as follows:
Tariff line Russia's applied duty rate provided for
at date of Panel's establishment
Russia's bound duty rate275
1511 90 190 2 3%, but not less than 0.09 EUR/kg276 3%
1511 90 990 2 3%, but not less than 0.09 EUR/kg277 3%
7.209. In respect of the ninth measure, we understand, base d on the evidence presented, that
the applied and bound rates, as of 20 September 2015, are as follows:
Tariff line Russia's current applied duty rate Russia's bound duty rate278
8418 10 200 1 15%, but not less than 0.13 EUR/l279 15%
7.210. In respect of the sevent h, eighth, and ninth measures, we cannot simply compare the
applied and bound duty rates, as we did for the first to sixth measures. Rather, we need to
consider how the applied combined duty rates operate before we can determine whether they lead
to the imposition of duties in excess of Russia's bound rates.
7.211. In this connection, the Appellate Body has observed that "for any specific duty, there is an
ad valorem equivalent deduced from the ratio of the absolute amount collected to the price of the
imported product".280 When the duty in question consists of a specific duty and the level bound in
the Member's Schedule is expressed in ad valorem terms, it is possible to calculate a "break-even"
price for which the ad valorem equivalent of the specific duty at issu e is equal to the bound
ad valorem level. Any import price below that break -even price will cause the ad valorem
equivalent of the specific duty to exceed the bound ad valorem level, whereas any import price
above the break-even price will result in the ad valorem equivalent of the specific duty being lower
than the bound ad valorem level.281
7.212. This holds true also in the case of the seventh to ninth measures, where (i) the relevant
applied rate is expressed in combined terms, consisting of two alternative ele ments, a specific one
and an ad valorem one, and (ii) the bound rate is expressed in ad valorem terms.282 In these
cases, the duty structure itself indicates in which transactions the specific element is to be applied.
Where the specific element is applied, it is possible to calculate a break-even price. Imports priced

274 See section 7.4.1.1.1.1 above.
275 Russia's Schedule, (Exhibit EU-9).
276 Decision No. 52, (Exhibit EU-6).
277 Decision No. 52, (Exhibit EU-6).
278 Russia's Schedule, (Exhibit EU-9). This bound rate came into effect on 1 September 2015.
279 Russia's Schedule, (Exhibit EU-9).
280 Appellate Body Report, Argentina – Textiles and Apparel, para. 50.
281 Appellate Body Report, Argentina – Textiles and Apparel, para. 53; Panel Report, Colombia –
Textiles, para. 7.146.

below that break-even price will be subject to a specific duty whose ad valorem equivalent exceeds
the corresponding bound ad valorem rate.
7.213. The European Union explained its understanding of th e structure, design, and architecture
of the seventh, eighth, and ninth measures. It also presented arithmetical calculations in an
attempt to show how the application of the relevant combined duties results, for import
transactions at or below a specified customs value (that is, the break-even price discussed above),
in the imposition of customs duties in excess of those provided for in Russia's Schedule.
Additionally, it submitted actual customs declarations that, in its view, confirm that customs duties
have, in fact, been levied in excess of bound rates in respect of the tariff lines affected by the
seventh, eighth, and ninth measures.283
7.214. Russia has not challenged the accuracy of the European Union's mathematical
explanations; it only challenged the method ology underlying the European Union's calculations as
failing to take account of paragraph 313 of Russia's Working Party Report. Nevertheless, it is, as
noted by the panel in Colombia – Textiles, the responsibility of a panel to "review" the submitted
"arithmetical calculations and verify whether they are of value in resolving this dispute". 284
Accordingly, we now turn to consider the European Union's arithmetical arguments in more detail.
7.215. We begin with the seventh and eighth measures. The European Union argu es that these
measures, as they existed at the time the Panel was established, required Russia to apply the
specific element of the combined duty whenever the customs value (expressed as a unit price 285)
of an import was less than 3 EUR/kg. According to the European Union, this resulted in an applied
duty above the bound level. In support of this contention, the European Union presents a
calculation using a hypothetical good with a customs value equal to 2.90 EUR/kg. In reviewing this
calculation, we recall that, at the time the Panel was established, the bound duty rate in respect of
the seventh and eight measures was 3%, while the applied duty rate in respect of both measures
was "3%, but not less than 0.09 EUR/kg". 286 Thus, assuming that 1 kilogram of palm oi l were
imported under either tariff line 1511 90 190 2 or 1511 90 990 2, at a customs value of EUR 2.90,
under the ad valorem element (namely 3%) of the applied combined rate, the duty levied would
be 0.087 EUR/kg.287 Since 0.087 EUR/kg is less than the alternative minimum specific duty rate of
"0.09 EUR/kg", Russia's customs authority would need to apply the alternative specific element,
namely "not less than 0.09 EUR/kg". Therefore, the applied s pecific duty rate would be
0.09 EUR/kg. In the present example , for a hypothetical good weighing 1 kilogram, the resulting
applied duty would therefore be exactly EUR 0.09. As we have explained above, the ad valorem
equivalent of an applied specific duty rate is calculated by dividing the amount of duty levied by
the total customs value of the good at issue (thereby yielding the percentage of the customs value
that the duty levied represents). 288 In this example, EUR 0.09 (the duty levied) divided by EUR
2.90 (the customs value of 1 kilogram of palm oil) yields an ad valorem equivalent of 3.1%. As
indicated, Russia's Schedule requires that it not impose a duty at a rate higher than 3%. Evidently,
an applied ad valorem equivalent duty rate of 3.1% would be higher than the bound rate of 3%.289
It is clear from this example t hat any time the customs value of the good is equal to or less than
2.90 EUR/kg 290, the specific element of the applied combined duty rate would necessarily be
applied.

283 European Union's first written submission, paras. 85-87 and 91-92; second written submission, para.
97.
285 We use the term unit price to express the value of a good in terms of one "unit of measurement" of
that good. For example, a good with a price of EUR 10 and weighing 10 kilograms, would be expressed in
terms of a unit price as 1 EUR/kg.
286 See paragraph 7.208 above.
287 3% of EUR 2.90 is EUR 0.087.
288 Appellate Body Report, Argentina – Textiles and Apparel, para. 50. See also Panel Report, Colombia
– Textiles, para. 7.146.
289 Put slightly differently, had the bound duty rate been applied, the amount of duty levied would have
been 3% of EUR 2.90, namely EUR 0.087. Therefore, for a good with a customs value of 2.90 EUR/kg, any
amount of duty above EUR 0.087 would be higher than the bound duty.
290 For a customs value below 2.90 EUR/kg, the ad valorem duty resulting from the specific element (i.e.
0.09 EUR/kg) will inevitably be higher than the duty resulting from the alternative ad valorem element (i.e. 3%
of the customs value), which means that "0.09 EUR/kg" would be levied by Russia's customs authority in all
such cases. The lower the customs value is with respect to 2.90 EUR/kg, the higher the percentage that

7.216. The European Union asserts that the lowest customs value for which the applied duty rate
would equal the bound duty rate (the "break-even price") is 3 EUR/kg, not 2.90 EUR/kg. According
to the European Union, for goods with customs values below that alleged break -even price Russia
was required to apply duties in excess of those provided in it s Schedule. We agree with the
European Union that a specific break -even price could be mathematically determined. However,
the European Union did not provide Russia and the Panel with the worked mathematical reasoning
supporting its determination of the br eak-even price. In these circumstances, and bearing in mind
the proper allocation of the burden of proof in WTO dispute settlement 291, we do not find it
appropriate to determine the break -even price ourselves. Because the European Union has not
provided its calculations in support of the specific break -even price that it has identified, we are
not in a position to review these calculations with a view to confirming whether a good valued at
3 EUR/kg would or would not be subject to duties higher than those pro vided for in Russia's
Schedule. We are satisfied, however, that the European Union has demonstrated that for goods
valued at or less than 2.90 EUR/kg, the application of the minimum specific duty rate of
0.09 EUR/kg would necessarily result in an ad valorem equivalent duty rate of more than 3%, i.e.
a duty rate higher than the bound rate. Accordingly, we find, in respect of the seventh and eighth
measures, that so long as the customs value of a good falling within the relevant tariff lines was
equal to or less than a certain customs value – and the customs value for which we have been able
to confirm this is 2.90 EUR/kg – the ad valorem equivalent of the specific element of the applied
combined duty rate would inevitably have been higher than the bound ad va lorem duty rate,
resulting in applied duties higher than the bound duty. This finding is represented graphically in
Figure 1 below.
Figure 1

7.217. We turn, next, to the ninth measure as amended. The European Union initially provided a
mathematical example for the ninth measure as it existed at the time of the Panel's establishment.
As discussed in paragraph 7.166 above, following amendment of the measure, the European Union
requested findings on the measure as it existed at the time of the Panel's establishment, as it
existed from 1 to 20 September 2015, and as amended after 20 September 2015. 292 As noted in
paragraph 7.172 above, the Panel decided to make findings on the measure as amended after
20 September 2015.

0.09 EUR/kg will represent of that customs value. Therefore, it is mathematically correct to say that the lower
the customs value is below 2.90 EUR/kg, the more the ad valorem equivalent of the combined applied duty
rate will exceed the bound rate of 3%.
291 Appellate Body Report, US – Wool Shirts and Blouses, p. 14, DSR 1997:I, 323, at 335.
292 European Union's second written submission, para. 85.

7.218. We note that the European Union has not presented mathematical explanations for the
measure as amended. We recall in th is regard that the amendment occurred during these
proceedings. The European Union states, however, that "[t]he inconsistency with Article II:1(b) …
remains, for the very same reasons as with the duties that were in force when the Panel was
established. Th e 'break -even' customs value below which duties would be imposed in excess is
now different, but can still be clearly established ".293 In considering this argument, we note that
the structure and design of the measure as amended is identical to that of the m easure as it
existed at the time of the Panel's establishment. In both instances the bound duty rate is in
ad valorem form, while the applied combined duty rate comprises both an ad valorem element and
a specific element. Moreover, in both instances the bo und duty rate is numerically equal to the ad
valorem element of the applied combined duty rate. 294 Given this, and lacking specific calculations
for the ninth measure as amended, we will first review the European Union's calculations in respect
of the measur e as it existed at the time of the Panel's establishment. If these calculations
concerning the ninth measure as it existed at that time confirm the European Union's argument
that below a customs value identified by the European Union the ad valorem equivalent of the
applied combined duty rate would inevitably have been higher than the bound ad valorem duty
rate, we will examine whether the same can be said of the measure as amended in respec t of that
same customs value.
7.219. The European Union argued in respec t of the measure as it existed at the time of the
Panel's establishment, that below a break -even customs value of 0.77 EUR/l, the specific element
of the combined duty would be applied, resulting in a duty levied above the bound level. As with
the seventh and eight measures, the European Union did not provide to Russia and the Panel its
worked mathematical reasoning in respect of this break-even price, but did provide calculations in
respect of a hypothetical good, in this instance a good with a customs val ue of 0.76 EUR/l.
Although we agree with the European Union that a specific break -even price could be
mathematically determined for the ninth measure as amended, we do not find it appropriate, in
the absence of specific calculations by the European Union, to determine the break -even price
ourselves. We have, however, reviewed the calculations that the European Union did provide using
the same analysis that we undertook in respect of the seventh and eighth measures. We are
satisfied that under the ninth meas ure as it existed at the time of the Panel's establishment, the
European Union has demonstrated that so long as the customs value of a good falling within the
relevant tariff line was equal to or less than 0.76 EUR/l, the ad valorem equivalent of the speci fic
element of the applied combined duty rate would inevitably have been higher than the bound ad
valorem duty rate, resulting in applied duties higher than the bound duty.295
7.220. Turning to the measure as amended, we have applied the European Union's calculati ons
and reasoning for the ninth measure as it existed at the time of the Panel's establishment to the
ninth measure as amended, again using a hypothetical good with a customs value equivalent to
0.76 EUR/l (the customs value that was identified by the Euro pean Union). This calculation
confirms, and we therefore find, in respect of the ninth measure as amended, that so long as the
customs value of a good falling within the relevant tariff line is equal to or less than 0.76 EUR/l,
the ad valorem equivalent of the specific element of the applied combined duty rate will inevitably
be higher than the bound ad valorem duty rate, resulting in applied duties higher than the bound
duty.296 This finding is represented graphically in Figure 2 below.

293 European Union's second written submission, para. 83.
294 See paragraphs 7.208 to 7.209 above.
295 The applied duty rate was "16.7%, but not less than 0.13 EUR/l", while the bound duty rate was
16.7%. For any good with a customs value equal to or less than 0.76 EUR/l, applying the ad valorem element
of 16.7% would have resulted in a specific duty rate equivalent of 0.127 EUR/l, which is less than 0.13 EUR/l,
therefore requiring Russia's customs authority to impose the specific element of the combined duty, namely
0.13 EUR/l. This inevitably would have resulted in an ad valorem equivalent duty rate higher than the bound
rate of 16.7%, whenever the customs value was 0.76 EUR/l or less. For a customs value of 0.76 EUR/l, the ad
valorem equivalent of the combined applied duty rate would be 17.1%.
296 The applied rate required is "15%, but not less than 0.13 EUR/l", while the bound rate is 15%. For
any good with a customs value equal to or less than 0.76 EUR/l, applying the ad valorem element of 15% will
result in a duty rate of 0.114 EUR/l, which is less than 0.13 EUR/l, therefore requiring Russia's customs
authority to impose the specific element of the combined duty, namely 0.13 EUR/l. This inevitably will result in
an ad valorem equivalent higher than the bound rate of 15%, whenever the customs value is 0.76 EUR/l or
less. In the case of a customs value of 0.76 EUR/l, the ad valorem equivalent of the combined applied duty
rate would be 17.1%. For all customs values below 0.76 EUR/l, the duty resulting from the specific element

Figure 2

7.221. In sum, in respect of the seventh and eighth measures as they existed at the time of the
Panel's establishment, and for the ninth measure as amended from 20 September 201 5, the
European Union has identified specific customs values at or below which imports were or will be
subject to the specific duty rate alternative of a combined duty, whose ad valorem equivalent was
or is higher than the corresponding ad valorem duty rate in Russia's Schedule.
7.222. As we have explained above, the consistency of a measure with Article II:1(b), first
sentence, can be determined on the basis of the "structure and design" of that measure.297 For the
reasons already given in respect of the first to f ifth measures, there is no need for a complaining
party to show that a particular measure has, in any given instance, actually led to the imposition
of customs duties in excess of bound levels. Accordingly, we do not consider it necessary to base
our findings on the Declarations of Goods and Supplementary Lists to those Declarations of Goods
submitted by the European Union in Exhibits EU-12, EU-13, EU-14, EU-16, EU-17, and EU-18.
7.223. Additionally, we note that the application of a duty may be inconsistent with Article II:1(b),
first sentence, even where it does not lead to duties being levied above bound levels in every
transaction, but only "with respect to a certain range of import prices". 298 Therefore, the fact that,
in respect of the seventh, eighth, and nint h measures, the European Union has demonstrated that
Russia's duties would have been higher than bound levels whenever the customs value was at or
fell below a certain level is sufficient to make a prima facie case of inconsistency with
Article II:1(b), first sentence.
7.4.1.3 Ceiling mechanism
7.224. Before concluding our analysis of the seventh, eighth, and ninth measures, we need to
address Russia's argument concerning the alleged lack of a ceiling mechanism.

(i.e. 0.13 EUR/l) will inevitably be higher than the duty resulting from the alternative ad valorem element (i.e.
15% of the customs value), which means that "0.13 EUR/l " would be levied by Russia's customs authority in
all such cases. The lower the customs value is with respect to 0.76 EUR/l, the higher the percentage that
0.13 EUR/l will represent of that customs value. Therefore, it is mathematically correct to say that the lower
the customs value is below 0.76 EUR/l, the more the ad valorem equivalent of the combined applied duty rate
will exceed the bound rate of 15%.
297 Appellate Body Report, Argentina – Textiles and Apparel, paras. 53, 55 and 62; Panel Report,
Colombia – Textiles, para. 7.122.
298 Appellate Body Report, Argentina – Textiles and Apparel, paras. 55 and 62.

7.225. According to the European Union, Russia provides for no mec hanism that would prevent
the ad valorem equivalents of the applied combined duties at issue from exceeding the level of
Russia's bound duties. 299 In the European Union's view, in the absence of a ceiling mechanism,
goods imported under the relevant tariff l ines will be subject to duties exceeding those provided
for in Russia's Schedule.300
7.226. Russia submits that the European Union's claims are unfounded because nothing in the
WTO Agreement requires Members to apply a mechanism such as a ceiling or cap, nor has s uch an
obligation been adopted by the WTO General Council or Ministerial Conference. In Russia's view,
the Appellate Body has stated that the use of a mechanism such as a ceiling or cap is a possibility,
but not an obligation.301
7.227. The European Union respond s by asserting that it is not challenging the absence of a
ceiling mechanism as being in itself WTO -inconsistent. According to the European Union, the
absence of any mechanism that would ensure that the ad valorem equivalents of the specific
element of the applied combined duty rates do not surpass the bound ad valorem rates is a part of
the design and structure of the measures. In the European Union's view, it is precisely because
there is no ceiling mechanism that the seventh, eighth, and ninth measures i nevitably lead to the
levying of duties in excess of bound levels whenever the customs value falls below a certain
threshold.302
7.228. The Panel begins by considering the European Union's argument concerning the absence of
a duty ceiling or cap that would prevent Russia from levying duties higher than those provided for
in its Schedule. The European Union has indicated that, to its knowledge, Russia applies no such
ceiling mechanism. The European Union has also argued that it cannot be expected to positively
demonstrate the absence of something. 303 We note that Russia has introduced no evidence
suggesting that such a ceiling or cap exists. Thus, there is no evidence on record that Russia has
put in place a ceiling or cap that would prevent such duties from being applied.
7.229. With respect to Russia's argument that nothing in the WTO Agreement requires Members
to apply a mechanism such as a ceiling or cap, we recall that we have already found, in our
preliminary ruling, that the European Union is not challenging the absence of a ceiling mechanism
in itself. As we explained there, we understand the European Union's references to the absence of
a ceiling mechanism as an element of the European Union's description of the overall design and
structure of the seventh, eighth, and n inth measures, or as a part of the European Union's
explanation of how and why these measures lead, in respect of some transactions, to the
imposition of customs duties in excess of those provided for in Russia's Schedule. 304 In our view,
the European Union's point is simply to acknowledge that Russia could, in principle, have ensured
that the seventh, eighth, and ninth measures at issue never result in the imposition of duties
above the levels provided for in Russia's Schedule, by developing and implementing a kind of

299 We note that the European Union has not argued that the first to sixth measures at issue could be
subject to a duty ceiling or cap that would prevent these measures from leading to the imposition of customs
duties in excess of those provided in Russia's Schedule. As we understand it, this is because a ceiling or cap
could only be relevant where an applied duty is expressed in a form different from that in which the
corresponding bound duty is expressed. A ceiling or cap could be particularly relevant where a Member applies
a specific or a combined duty in respect of a tariff line bound in ad valorem terms. Thus, in Argentina – Textiles
and Apparel, the Appellate Body discussed the possibility of using a ceiling or cap mechanism which would
"ensure that, even if the type of duty applied differs from the type of duty provided in that Member's Schedule,
the ad valorem equivalent of the duties actually applied would not exceed the ad valorem duties provided for in
the Member's Schedule". Appellate Body Report, Argentina – Textiles and Apparel, para. 54.
300 European Union's first written submission, para. 103; opening statement at the first meeting of the
301 Russia's first written submission, paras. 129 and 132-133; opening statement at the first meeting of
302 European Union's first written submission, paras. 100 and 103; opening statement at the first
meeting of the Panel, paras. 67 and 69; second written submission, paras. 58, 67 and 69; opening statement
at the second meeting of the Panel, para. 16.
303 European Union's second written submission, para. 93; opening statement at the first meeting of the
Panel, para. 43.
304 Annex A-1, para. 2.32.

ceiling or cap. 305 Therefore, as the European Union has claimed no breach by Russia of some
asserted requirement to put in place a ceiling mechanism, we reject Russia's argument that the
European Union's claims are unfounded because there is no requirement under Article II:1(b), first
sentence, to use a ceiling mechanism.
7.4.1.4 Conclusion
7.230. We have found above that, in relation to the seventh and eighth measures as they existed
at the time the Panel was established, the duties required to be applied by R ussia were higher
than bound levels for imports at or below specified break -even prices (customs values). We have
also noted that there is no evidence that Russia applied a ceiling or cap that would prevent such
duties from being applied. Therefore, we con clude that, in respect of the seventh and eighth
measures as they existed at the time of the Panel's establishment, Russia was required in in some
instances to apply duties in excess of those set forth in its Schedule, contrary to Article II:1(b),
first sentence.
7.231. We have also found that, in relation to the ninth measure as amended from 20 September
2015, the duties required to be applied by Russia are higher than bound levels for imports at or
below a specified break -even price. We have also noted the abse nce of evidence that Russia
applies a ceiling or cap that would prevent these duties from being applied. Therefore, we conclude
that, in respect of the ninth measure at issue as amended from 20 September 2015, Russia is
required in some instances to apply duties in excess of those set forth in its Schedule, contrary to
Article II:1(b), first sentence. In the light of this conclusion, we do not need to make a finding
concerning the WTO-consistency of the ninth measure either at the time the Panel was establi shed
or during the period of 1 to 20 September 2015, during which the relevant bound duty rate was
reduced but the applied duty rate remained as it was on the date of the Panel's establishment.306
7.4.1.5 Consistency with Article II:1(a) of the GATT 1994
7.232. We have con cluded in section 7.4.1.4 above that Russia has acted inconsistently with
Article II:1(b), first sentence. In the light of this conclusion, we see no need, for the purpose of
resolving this dispute, to make addi tional findings regarding whether, as a consequence of that
conclusion, Russia has also acted inconsistently with Article II:1(a). We therefore exercise judicial
economy and decline to make findings with respect to this claim.
7.4.2 Claims concerning the tenth and eleventh measures
7.233. We now turn to the European Union's claims in respect of the duty rates required to be
applied by Russia in respect of tariff lines 8418 10 800 1 (the tenth measure) and 8418 21 100 0
(the eleventh measure). The European Union claims that Russia is required to apply duties on
goods falling within these tariff lines that are inconsistent with Article II:1(b), first sentence, of the
GATT 1994, and consequently Article II:1(a) of the GATT 1994.
7.4.2.1 Measures and applied rates at issue
7.234. The European Union argues that, in respect of goods falling under the tenth and eleventh
measures, the structure and design of the duty rates applied by Russia result in duties being levied
in excess of bound duty rates with respect to a certain range of import prices.307
7.235. The European Union argues that, at the time of the Panel's establishment, the CCT, as
amended by Decision No. 47 of the Council of the Eurasian Economic Commission 308 (Decision
No. 47), imposed a combined duty rate of "16%, but not less than 0.156 EUR/l" for goods
imported under tariff line 8418 10 800 1 (the tenth measure). Nevertheless, as also noted by the

305 Such a ceiling would eliminate, as it were, the arithmetical inevitability of the inconsistency as
described above by ensuring that in no instance would duties be levied in excess of the rates bound in Russia's
Schedule.
306 See paragraph 7.172 above.
307 European Union's first written submission, para. 104; second written submission, paras. 87 and 89.
308 Decision No. 47 of the Council of the Eurasian Economic Union, (Decision No. 47), (Exhibit EU-7).

European Union, Decision No. 54 of the Council of the Eurasian Economic Commission 309, which
entered into force on 20 September 2015 310, imposed a new duty rate of "15%; or 14%, but not
less than 0.114 EUR/l; whichever is the lower".
7.236. The European Union also argues that, at the time of the Panel's establishment, the CCT, as
amended by Decision No. 47 311, imposed a combined duty rate of "13.3%, but not less than
0.12 EUR/l" for goods imported under tariff line 8418 21 100 0 (the eleventh measure).
Nevertheless, as also noted by the European Union, Decision No. 54 of the Council of the Eurasian
Economic Commission 312, which entered into force on 20 Septembe r 2015, imposed a new ad
valorem duty of 10%.
7.237. Russia does not contest the European Union's description of the measures at issue.
7.238. The Panel notes that there is no dispute between the parties as to the rates applied by
Russia in respect of the tenth and elev enth measures, either at the time of the Panel's
establishment or subsequently.313 Based on the evidence presented, we find that the applied duty
rates for the tenth and eleventh measures, on the date of the Panel's establishment and currently,
are as follows:
Measure Tariff line Russia's applied duty rate provided for
at date of Panel's establishment
Russia's current
applied rate
 The tenth measure 8418 10 800 1 16%, but not less than 0.156 EUR/l314 15%; or 14%, but
not less than 0.114
EUR/l; whichever is
the lower315
The eleventh measure 8418 21 100 0 13.3%, but not less than 0.12 EUR/l316 10%317
7.4.2.1.1 Amended measures
7.239. As with the European Union's claims concerning the seventh to ninth measures, Russia
argues that in the light of amendments made to the tenth and elev enth measures that entered
into force on 20 September 2015, the tenth and eleventh measures as in force at the time of the
Panel's establishment have "expired". According to Russia, the current applied duty rates are
exactly the same as those set out in Russia's Schedule. Russia therefore asks the Panel to find that
these measures are consistent with Russia's obligations under Articles II:1(b), first sentence, and
consequently Article II:1(a).318
7.240. The European Union responds that the duties currently applied i n respect of the tenth and
eleventh measures appear to correspond to the bound duty rates. Nevertheless, according to the
European Union, the Panel should adopt findings on the WTO -consistency of those measures as
they existed at the time of the Panel's establishment.319
7.241. As the Panel explained above in the context of addressing the sixth and seventh to ninth
measures320, a measure that is modified subsequent to a panel's establishment does not, by virtue
of that amendment, cease to be a measure for the purposes of WTO dispute settlement. Even if an

309 Decision No. 54 of the Council, (Exhibit RUS-9).
310 European Union's second written submission, para. 81; Russia's responses to Panel question Nos.
94-95.
311 Decision No. 47, (Exhibit EU-7).
312 Decision No. 54 of the Council, (Exhibit RUS-9).
313 We also note that there is no dispute between the parties, and we accept, that the CCT requirements
establishing the duty rates applicable to the tariff lines at issue are attributable to Russia. See paragraphs 7.42
to 7.47 above.
314 Section XVI, Chapter 84 of the CCT, as amended by Decision No. 47, (Exhibit EU-7).
315 Section XVI, Chapter 84 of the CCT, as amended by Decision No. 54 of the Council, (Exhibit RUS-9).
316 Section XVI, Chapter 84 of the CCT, as amended by Decision No. 47, (Exhibit EU-7).
317 Section XVI, Chapter 84 of the CCT, as amended by Decision No. 54 of the Council, (Exhibit RUS-9).
318 Russia's second written submission, para. 9; opening statement at the second meeting of the Panel,
paras. 40-42; response to Panel question No. 115.
319 European Union's second written submission, para. 93; opening statement at the second meeting of
the Panel, para. 29; responses to Panel question Nos. 91, 92 and 124.
320 See section 7.3.2.1.1 and paragraphs 7.162 to 7.163 above.

allegedly WTO -inconsistent measure is brought into conformity during the course of the
proceedings, a panel may still be required, pursuant to its terms of reference and Article 11 of the
DSU, to make findings in resp ect of the measure as it existed at the time of the panel's
establishment321, at least where the complaining party has not requested the panel to consider the
measure as amended.
7.242. In the present case, the European Union has requested findings only on the tent h and
eleventh measures as they existed at the time of the Panel's establishment. 322 Accordingly, both
our terms of reference and Article 11 of the DSU, which requires us to make an "objective
assessment of the matter", compel us to examine the WTO -consistency of those measures as they
existed at the time of the Panel's establishment. It would not be appropriate, in the absence of a
specific request from the European Union, for us to examine the tenth and eleventh measures in
their current form rather than as they existed at the time of the Panel's establishment. However,
as we have already noted, we will take appropriate account of any relevant changes made to the
measures at issue when making our recommendations (if any).
7.243. In this connection, we note the Euro pean Union's request that the Panel make additional
findings concerning the tenth and eleventh measures as they exist ed during the period of
1 to 20 September 2015. According to the European Union, on 1 September 2015, in accordance
with Russia's Schedule, the bound rate for tariff line 8418 10 800 1 (tenth measure) fell from
"16.7%; or 16%, but not less than 0.156 EUR/l; whichever is the lower" to "15%; or 14%, but not
less than 0.114 EUR/l; whichever is the lower". However, until 20 September 2015, Russia
continued to subject goods imported under this tariff line to an applied duty rate of "16%, but not
less than 0.156 EUR/l". Similarly, according to the European Union, the bound rate for tariff line
8418 21 100 0 (eleventh measure) fell on 1 September 2015 from "14.7%; or 13.3%, but not less
than 0.12 EUR/l; whichever is the lower" to 10%. However, until 20 September 2015, Russia
continued to apply a duty rate of "13.3%, but not less than 0.12 EUR/l". The European Union
argues that from 1 to 20 September 2 015 Russia's breach of Article II:1(b), first sentence, was
aggravated because, although the bound duty rate had dropped, the applied duty rate remained
the same. Thus, in the European Union's view, from 1 to 20 September 2015, even the ad valorem
element of the applied duty rates (16% for tariff line 8418 10 800 1 and 13.3% for tariff line
8418 21 100 0) exceeded the corresponding bound rates (15% for tariff line 8418 10 800 1 and
10% for tariff line 8418 21 100 0). The European Union submits that, as a re sult, during this
period the tenth and eleventh measures led to the imposition of duties in excess of bound duty
rates regardless of customs value.323
7.244. It appears to us that the European Union's descriptions of both the changes in the bound
duty rates and the absence of corresponding changes in the applied duty rates from
1 to 20 September 2015 are correct. Russia has not argued otherwise. Nevertheless, in our view
additional findings on the measure as it existed during the period 1 to 20 September 2015 may
not be necessary to resolve this dispute. If we were to find that the tenth and eleventh measures
at the time of the Panel's establishment, the ad valorem elements of which were equal to the
lower ad valorem elements of the bound duty rates, were inconsisten t with Article II:1(b), first
sentence, it would follow a fortiori that those measures would have been WTO -inconsistent during
the period 1 to 20 September 2015, when even the ad valorem elements of the measures were
higher than the ad valorem elements of the relevant bound duty rates. In such circumstances, we
do not believe that additional findings would be necessary to securing a positive solution to this
dispute. In contrast, if we were to find that the tenth and eleventh measures were not inconsistent
with Article II:1(b), first sentence, at the time of the Panel's establishment, it may be necessary to
consider the period 1 to 20 September 2015 in order to ensure that we do not leave gaps in our
assessment of the challenged measures. Accordingly, we wil l return to the tenth and eleventh
measures as they existed during the period 1 to 20 September 2015 only if, at the end of our
initial analysis, we conclude that those measures were not inconsistent with Article II:1(b), first
sentence, at the time of the Panel's establishment.

321 Panel Report, Chile – Price Band System, para. 7.7.
322 European Union's second written submission, para. 93.
323 European Union's second written submission, paras. 92-93.

7.4.2.2 Consistency with Article II:1(b), first sentence of the GATT 1994
7.245. Turning now to assess the consistency of the tenth and eleventh measures with Article II:1
of the GATT 1994, the Panel finds it appropriate, for the reasons given abo ve324, to first address
the European Union's claims under Article II:1(b), first sentence, before turning to the European
Union's consequential claims under Article II:1(a).
7.246. According to the European Union, the tenth and eleventh measures at issue are
inconsistent with Article II:1(b), first sentence. This is so, in the European Union's view, because
the duties required to be applied by Russia in respect of both relevant tariff lines, at the time of
the Panel's establishment, were in excess of those provided in Russia's Schedule whenever the
customs value fell below a certain break -even price. The European Union argues that below a
certain break-even price per litre (which can be determined arithmetically), the specific element of
the combined applied duty wa s applied (i.e. 0.156 EUR/l or 0.12 EUR/l). In a subset of cases
within that price range, the ad valorem equivalent of that applied specific duty rate was higher
than 16.7% or 14.7% respectively, even though Russia's Schedule (because of the formulation
"whichever is the lower") required that Russia not exceed those ad valorem duty rates. For that
subset of cases, the applied duties were in excess of those provided in the Schedule, and
accordingly were inconsistent with Article II:1(b), first sentence. In t he European Union's view,
both the possibility of exceeding the bound duty rates and the precise range of cases in which the
bound duty rates would have been exceeded can be deduced directly from the design and
structure of the duties. The European Union a lso submitted customs declarations that, it alleges,
show that duties in excess of the bound levels have actually been levied. The European Union adds
that Russia provided for no mechanism, such as a ceiling on the level of the applied duty, which
would have prevented the applied duties from exceeding the level of the bound duties.325
7.247. Russia argues that the European Union's claims in respect of the tenth and eleventh
measures are essentially about the structure and design of the applied duties, rather than t he
duties themselves. However, in Russia's view, the mere fact of application of a type of duty other
than that provided for in a Member's Schedule is not, without more, inconsistent with Article II:1.
Russia submits that, to succeed under Article II:1, a complaining party has additionally to prove
that the duty collected actually exceeded the bound level. 326 Moreover, in Russia's view, the
European Union's claims are legally flawed because nothing in the covered agreements requires a
Member to use a legislat ive ceiling or cap when they apply customs duties. 327 Additionally, Russia
argues that the European Union's claims must fail because they do not take account of the
"mechanism" contained in paragraph 313 of Russia's Working Party Report. 328 As we have
explained in the context of the seventh to ninth measures, Russia argues that that paragraph
contains a methodology that must be used when assessing the consistency of an applied combined
duty with Article II:1.329
7.4.2.2.1 Duty type/structure variation
7.248. The Panel first deals with Russia's argument that the European Union's claims in respect of
the tenth and eleventh measures are about the structure and design of the applied duties, rather
than about the applied duties themselves. It is not entirely clear from Russia's submis sions
whether this argument applies to the tenth and eleventh measures as well as to the seventh to
ninth measures. To the extent that it does, we think it sufficient to recall our reasoning and
findings concerning this argument in the context of the seven th to ninth measures. 330 What we
said there applies with equal force here.

324 See paragraph 7.48 above.
325 European Union's first written submission, paras. 111-112, 114, 117-118 and 121; opening
statement at the first meeting of the Panel, para. 27; second written submission, para. 87; opening statement
at the second meeting of the Panel, para. 27.
326 Russia's first written submission, para. 122.
327 Russia's first written submission, paras. 129 and 132-133; opening statement at the first meeting of
328 Russia's first written submission, paras. 162 and 167; second written submission, para. 46; opening
statement at the second meeting of the Panel, paras. 31 and 39; response to Panel question No. 99.
329 The parties' arguments on this issue are summarized in more detail below, section 7.4.2.2.2.
330 See section 7.4.1.2.1.

7.4.2.2.2 Methodology for comparison of applied and bound duty rates
7.249. We next turn to consider the issue of the correct methodology to be used for comparing
whether the duty rates required to b e applied by Russia in respect of the tenth and eleventh
measures were higher than those provided in Russia's Schedule whenever the customs value fell
below a certain break-even price.
7.250. Russia contests the methodology used by the European Union to compare the applied and
bound rates, and on the basis of which the European Union concludes that the tenth and eleventh
measures resulted in the application of duties in excess of those provided in Russia's Schedule.
According to Russia, the European Union's case is flawed because it does not take account of
paragraph 313 of Russia's Working Party Report. In Russia's view, the European Union cannot, as
a legal matter, establish that Russia applies specific duties in excess of bound ad valorem duties
unless it submits evidence conforming to the methodological specification of paragraph 313.
7.251. The European Union argues that the methodology in paragraph 313 does not set out a way
of interpreting, changing, or limiting Russia's obligations under Article II:1. 331 Additionally, the
European Union contends that the tenth and eleventh measures do not fall within the scope of
paragraph 313 because the relevant bound duties are of a more complex form, consisting of an
additional ad valorem element.332
7.252. The Panel already explained why, in its view, paragraph 313 does not, as Russia suggests,
prescribe or authorize a methodology to be applied when calculating ad valorem equivalents as
part of an analysis under Article II:1(b), first sentence . Analysing the texts of both paragraph 313
and Article II:1(b), first sentence, we found no support for the proposition that the methodology in
paragraph 313 must or even could be used in the context of a claim that a Member subjects
imports to duties in excess of those provided in its Schedule.
7.253. In our view, our reasoning and findings on this issue in the context of the seventh, eighth,
and ninth measures apply mutatis mutandis in the present context. 333 In the light of this finding,
we do not consider it necessary to determine in addition whether, as the European Union argues,
the tenth and eleventh measures fall outside the scope of paragraph 313 because the relevant
bound duties are of a more complex form, consisting of an additional ad valorem element.
7.254. Accordingly, in considering whether the tenth a nd eleventh measures led to the imposition
of duties in excess of Russia's bound rates, we will not have regard to the methodology in
paragraph 313.
7.4.2.2.3 Comparison of applied and bound rates
7.255. We have already set out our understanding of the relevant applied ra tes in respect of the
tenth and eleventh measures. We can therefore turn to consider whether those applied rates lead
to the imposition of duties in excess of those set forth in Russia's Schedule. To undertake this
analysis, we once again need to compare R ussia's applied duty rates, on the one hand, and the
duty rates provided for in Russia's Schedule, on the other. We recall that, for the reasons given
above334, we will examine the tenth and eleventh measures as they existed at the time of the
Panel's establishment.
7.256. We find, based on the evidence presented, that the applied and bound duty rates at the
time of the Panel's establishment were as follows:

331 See the fuller discussion of the European Union's arguments at paragraphs 7.188 to 7.189 above.
332 European Union's opening statement at the second meeting of the Panel, para. 28.
333 See paragraphs 7.190 to 7.206 above.
334 See paragraph 7.244 above.

Tariff line Russia's applied duty rate provided for
at date of Panel's establishment335
Russia's bound duty rate336
8418 10 800 1 16%, but not less than 0.156 EUR/l 16.7%; or 16%, but not less than 0.156
EUR/l; whichever is the lower
8418 21 100 0

13.3%, but not less than 0.12 EUR/l 14.7%; or 13.3%, but not less than 0.12
EUR/l; whichever is the lower
7.257. The European Union explained its understanding of the structure, design, and architecture
of the tenth and eleventh measures. It also presented arithmetical calculations in an attempt to
show how these measures result, in some transactions, in the imposition of cust oms duties in
excess of those provided for in Russia's Schedule. Additionally, it submitted actual customs
declarations that, in its view, confirm that customs duties have, in fact, been levied in excess of
bound rates in respect of the tariff lines affected by the tenth and eleventh measures.337
7.258. Russia has not challenged the accuracy of the European Union's mathematical
explanations. As noted above, Russia only challenged the methodology underlying the European
Union's calculations, because th ose calculations fail to take account of paragraph 313 of Russia's
Working Party Report.
7.259. As the Panel has explained, the European Union argues that the tenth and eleventh
measures, as they existed at the time of the Panel's establishment, required Russia to apply duties
in excess of those provided in its Schedule whenever the customs value of a good falling within a
relevant tariff line was less than a certain value. The European Union has provided calculations in
support of this argument. As with the calculations provid ed in respect of the seventh to ninth
measures, we will review the European Union's calculations for the tenth and eleventh measures.
7.260. In respect of the tenth measure as it existed at the time of the Panel's establishment, the
bound rate in Russia's Schedule was "16.7%; or 16%, but not less than 0.156 EUR/l; whichever is
lower". In order to determine the amount of duty that should be levied according to the Schedule,
three separate steps are required. In a first step it is necessary to calculate 16.7% of th e customs
value, to obtain a first possible amount of duty to be levied. For the purposes of subsequent steps
in the analysis, however, the amount of that duty to be levied must be converted into a
corresponding unit price 338, to obtain a specific duty rate equivalent of the ad valorem duty rate.
The second step involves calculating 16% of the customs value and converting the result into the
corresponding specific duty rate equivalent, expressed as EUR/l. If this yields an amount of duty to
be levied (express ed as a unit price) less than 0.156 EUR/l, then the relevant specific duty rate
equivalent for purposes of the second step is 0.156 EUR/l, because it cannot be "less than" that
rate. The third and final step requires a comparison of the specific equivalent duty rates resulting
from the first and second steps. Whichever duty rate is lower is the one that must be levied.
7.261. The European Union has provided a hypothetical example of a good with a customs value
of 0.92 EUR/l. We first consider the situation from t he perspective of Russia's Schedule at the time
of the Panel's establishment. Following the first step, we note that the ad valorem only element of
16.7% results in a specific duty rate equivalent of 0.154 EUR/l. 339 Under the second step, for the
calculation of the alternative duty element, we note that the ad valorem duty rate of 16% would
yield a specific duty rate equivalent of 0.147 EUR/l 340, which is less than the specific duty rate of
0.156 EUR/l. Because this element of the duty rate requires "no less th an 0.156 EUR/l", the
relevant alternative duty rate is 0.156 EUR/l. For the third and final step, it is necessary to
compare the two alternative specific duty rate equivalents calculate d in the first step
(i.e. 0.154 EUR/l) and the second step (i.e. 0.156 EUR/l). That comparison shows that the first
alternative duty rate is lower. Thus, for a good with a customs value of 0.92 EUR/l, Russia's
Schedule would require that its customs authority levy no more than 0.154 EUR/l (corresponding
to an ad valorem equivalent of 16.7%).

335 Decision No. 47, (Exhibit EU-7).
336 Russia's Schedule, (Exhibit EU-9).
337 Declarations of Goods and Supplementary Lists to Declarations of Goods, (Exhibits EU-15, EU-16,
and EU-17).
338 The term "unit price" is discussed in footnote 285 above.
339 16.7% of 0.92 EUR/l is 0.1536 EUR/l.
340 16% of 0.92 EUR/l is 0.1472 EUR/l.

7.262. Next, we consider Russia's applied duty rate at the time of the Panel's establishment,
which was "16%, but not less than 0.156 EUR/l". Considering a good imported at the same
hypothetical customs value of 0.92 EUR/l, the ad valorem element of 16% would have resulted in
a specific duty rate equivalent of 0.147 EUR/l. 341 Since this is less than the rate for the specific
duty element, and the duty requires a rate of "no less than 0.156 EUR/l", Russia's customs
authority would have been required to impose the alternative specific duty rate. The duty rate to
be levied would therefore have been 0.156 EUR/l (corresponding to an ad valorem equivalent of
16.96%).
7.263. Comparing the applied and bound duty rates, it is clear that the applied specific duty r ate
equivalent would have been higher than the bound level (0.156 EUR/l compared to 0.154 EUR/l).
In ad valorem terms, a specific duty rate of 0.156 EUR/l levied on a good with a customs value of
0.92 EUR/l or less yields an ad valorem equivalent duty rate of at least 16.96%. 342 This is higher
than the bound duty rate, which provided for an absolute maximum rate of 16.7%.
7.264. The European Union asserts that the break -even customs value for the tenth measure was
approximately 0.93 EUR/l, but has not provided its calculations in support of this break -even
customs value. Although we agree with the European Union that a specific break -even price could
be mathematically determined for the tenth measure, we do not find it appropriate, in the absence
of specific calcul ations by the European Union, to determine the break -even price ourselves.
However, based on the preceding considerations, we are satisfied that the European Union has
demonstrated in respect of the tenth measure that so long as the customs value of a good falling
within the relevant tariff line was equal to or less than 0.92 EUR/l, the ad valorem equivalent of
the specific element of the applied combined duty rate would inevitably have been higher than the
bound duty rate, resulting in applied duties highe r than the bound duty. 343 This finding is
represented graphically in Figure 3 below.
Figure 3

341 16% of 0.92 EUR/l is 0.1472 EUR/l.
342 0.156 EUR/l divided by 0.8 EUR/l is 0.195 (i.e. 19.5%).
343 For all customs values below 0.92 EUR/l, the duty resulting from the specific element (i.e. 0.156
EUR/l) will inevitably be higher than the duty resulting from the alternative ad valorem element (i.e. 16% of
the customs value), which means that "0.156 EUR/l" would need to be applied by Russia's customs authority in
all such cases. The more the customs value falls below 0.92 EUR/l, the higher the percentage that 0.156 EUR/l
will represent of that customs value. Therefore, it is mathematically correct to say that the lower the customs
value is below 0.92 EUR/l, the more the ad valorem equivalent of the specific element of the combined applied
duty rate will exceed the bound ad valorem rate of 16.7%. We note that the ad valorem equivalent of the
bound duty rate would remain 16.7% for all customs values below 0.92 EUR/l.

7.265. The European Union asserts that the break -even customs value for the tenth measure was
approximately 0.93 EUR/l, but has not provided its worked mathematical reasoning in support of
this break-even customs value. Although we agree with the European Union that a specific break -
even price could be mathematically determine d for the tenth measure, we do not find it
appropriate, in the absence of specific calculations by the European Union, to determine the break-
even price ourselves. However, based on the preceding considerations, we are satisfied that the
European Union has demonstrated in respect of the tenth measure that so long as the customs
value of a good falling within the relevant tariff line was equal to or less than 0.92 EUR/l, the ad
valorem equivalent of the specific element of the applied combined duty rate would inevitably have
been higher than the bound duty rate, resulting in applied duties higher than the bound duty. 344
This finding is represented graphically in Figure 4 below.
Figure 4

7.266. In sum, in respect of the tenth and eleventh measures as they existed at the time the
Panel was established, the European Union has identified specific customs values at or below which
imports would have been subject to the specific duty rate alternatives of a combined duty, whose
ad valorem equivalents were higher than the corresponding rate in Russia's Schedule, resulting in
applied duties higher than the bound duties.
7.267. As we explained above, there is no need for a complaining part y to show that a particular
measure has, in respect of a particular transaction, actually led to the imposition of duties in
excess of bound levels. Accordingly, and because we agree with the European Union that our
assessment can be conducted on the basis of the structure and design of the tenth and eleventh
measures at issue, considered in the light of Russia's Schedule, we do not consider it necessary to
base our findings on the customs declarations submitted by the Europ ean Union in Exhibits
EU-15, EU-16 and EU-17.
7.268. Additionally, as we have already noted, the application of a duty may be inconsistent with
Article II:1(b), first sentence, even where it does not lead to duties being levied above bound

344 For all customs values below 0.92 EUR/l, the duty resulting from the specific element (i.e. 0.156
EUR/l) will inevitably be higher than the duty resulting from the alternative ad valorem element (i.e. 16% of
the customs value), which means that "0.156 EUR/l" would need to be applied by Russia's customs authority in
all such cases. The more the customs value falls below 0.92 EUR/l, the higher the percentage that 0.156 EUR/l
will represent of that customs value. Therefore, it is mathematically correct to say that the lower the customs
value is below 0.92 EUR/l, the more the ad valorem equivalent of the specific element of the combined applied
duty rate will exceed the bound ad valorem rate of 16.7%. We note that the ad valorem equivalent of the
bound duty rate would remain 16.7% for all customs values below 0.92 EUR/l.

levels in respect of every transaction, but only "with respect to a certain range of import prices".345
Therefore, the fact that, in respect of the tenth and eleventh measures, the European Union has
demonstrated that Russia's duties would have been higher than bound levels whenever the
customs value was at or fe ll below a certain level is sufficient to make a prima facie case of
inconsistency with Article II:1(b), first sentence.
7.4.2.2.4 Ceiling mechanism
7.269. Before concluding our analysis of the tenth and eleventh measures, we note the European
Union's argument that Russia does not apply a ceiling mechanism that would prevent the tenth
and eleventh measures from operating in the way described above.346
7.270. Russia responds that nothing in WTO law requires the use of such a ceiling mechanism,
and therefore the European Union's argument is legally flawed.347
7.271. The Panel dealt with this issue above in connection with its analysis of other challenged
measures. The findings and analysis set out there apply equally here. 348 In particular, we note
once again that there is no evidence on the record that Russia has put in place a ceiling or cap that
would prevent such duties from being applied. Moreover, we reaffirm our rejection of Russia's
argument that the European Union's claims are unfounded because there is no requirement to use
a ceiling mechanism. As we have explained, our view is that the European Union is not challenging
the absence of a ceiling mechanism in itself.
7.4.2.2.5 Conclusion
7.272. We have found above that, in relation to the tenth and eleventh measures as they existed
at the time the Panel was established, the duties required to be applied by Russia were higher
than bound levels in Russia's Schedule for imports at or below specified break -even prices
(customs values). We have also noted that there is no evidence that Russia applies a ceiling or cap
that would prevent such duties from being applied. Therefore, we conclude that, in respect of the
tenth and eleventh measures as they existed at the time of the Panel's establishment, Russia was
required in some instances to apply duties in excess of those set forth in its Schedule, contrary to
Article II:1(b), first sentence, of the GATT 1994. In the light of this conclusion, we do not need to
make findings concerning the WTO -consistency of the tenth and eleventh measures as they
existed during the period 1 to 20 September 2015.
7.4.2.3 Consistency with Article II:1(a) of the GATT 1994
7.273. We concluded in section 7.4.2.2.5 above that Russia has ac ted inconsistently with
Article II:1(b), first sentence. In the light o f this conclusion, we see no need, for the purpose of
resolving this dispute, to make additional findings regarding whether, as a consequence of that
conclusion, Russia has also acted inconsistently with Article II:1(a). We therefore exercise judicial
economy and decline to make findings with respect to this claim.
7.5 Claims concerning the twelfth measure ("Systematic Duty Variation")
7.274. The Panel now turns to the European Union's claims concerning the twelfth measure at
issue, the "Systematic Duty Variation" or "SDV".
7.275. The European Union argues that the CCT systematically provides, in relation to a
significant number of tariff lines, for a type or structure of duty that varies from the type or
structure of duty recorded in Russia's Schedule, in a way that results in the application of duties in
excess of those provided for in the Schedule. The European Union alleges that these systematic
duty variations take place in one of the two ways explained in paragraphs 7.210 to 7.221 and
7.259 to 7.266 above, in respect of the seventh to ninth measures and the tenth and eleventh

345 Appellate Body Report, Argentina – Textiles and Apparel, paras. 55 and 62.
346 See paragraph 7.246 above.
347 See paragraph 7.247 above.
348 See paragraphs 7.228 to 7.229 above.

measures respectively. According to the European Union, the SDV is therefore inconsistent as such
with Article II:1(b), first sentence, of the GATT 1994 because, like the seventh to eleventh
measures, it results in the imposition on imports from the European Union of duties in excess of
those set forth and provided in Russia's Schedule, and consequently is also inconsistent as such
with Article II:1(a) of the GATT 1994.349
7.276. The European Union argues that the twelfth measure, rather than calling for a finding that
is limited to a number of specific tariff lines, requires a more general finding. According to the
European Union, instances of inconsistency resulting from the SDV are neither rare nor sporadic,
but appear systematically throughout the CCT.350
7.277. The European Union further argues that challenging the SDV as a distinct measure at issue
is consistent with the DSU and relevant jurisprudence. The European Union asserts that it has
adequately described the precise content of the SDV. Specifically, the European Union argues that
the SDV consists of a large number of individual instances of inconsistency that are all contained in
a legally binding instrument, the CCT. Additionally, the European Union notes that both Russia's
applied and bound duties are subject to frequent changes, meaning that individual tariff lines are a
"moving target".351 The European Union submits that requiring a complaining party to "zero in" on
the specific situation of a given tariff line at a specific point in time would make it impossible to
address numerous similar violations in any practical way.352
7.278. Russia responds that the European Union has failed to establish the existence and the
precise content of the SDV, thereby failing to meet the threshold legal test established by the
Appellate Body in US – Zeroing (EC) for challenging an unwritten measure as such. Russia asserts
that the European Union has not specified the norms and laws establishing the SDV, and claims
that, as a consequence, it is unclear what particular kind of tariff treatment Russia should
eliminate or on what precisely the Panel should rule.353
7.279. Russia further argues that a higher standard of review is required in instances of as such
claims, and argues that the European Union has not met that high standard. According to Russia,
the European Union has not provided evidence that WTO -inconsistent duty rates exist that
constitute a systematic practice. In particular, in Russia's view the European Union has not
provided any evidence to show that the duties allegedly covered by the SDV are repeate d actions
that are linked together. Russia states that the only common characteristic that they all possess is
that they are set out in a single document, namely the CCT. In the light of these considerations,
Russia argues that the European Union has failed to provide the "substantiated criteria" that would
enable the Panel to determine the systematic "character" of the measure at issue.354
7.280. Russia suggests, finally, that the European Union has not provided sufficient evidence for
the Panel to make a finding of inconsistency. For such a finding to be made, Russia argues that
evidence should be provided in respect of each particular tariff line that allegedly deviates from the
Schedule, including evidence that a particular duty is levied in excess of the bound duty, and
evidence that there is no mechanism to prevent duties from being levied in such a manner.
Furthermore, Russia argues that linking a particular applied duty to the particular provision of
Russia's Schedule is crucial for determining whether there is any inconsistency between the
applied and bound duties.355
7.281. The Panel notes that the parties disagree on three key issues: (i) whether the SDV is the
type of measure that may be subject to WTO dispute settlement, (ii) whether the SDV has been
shown to exis t, and (iii) whether the SDV is inconsistent with Article II:1(b), first sentence, and
consequently Article II:1(a). To uphold the European Union's claims, we would need to reach an

349 European Union's first written submission, paras. 127-129.
350 European Union's first written submission, para. 133.
351 European Union's first written submission, para. 134.
352 European Union's first written submission, para. 134.
353 Russia's second written submission, paras. 85-107 (referring to Appellate Body Report, US – Zeroing
(EC), paras. 196 and 198); opening statement at the second meeting of the Panel, paras. 51-55.
354 Russia's second written submission, paras. 2 and 102-103; opening statement at the second meeting
of the Panel, paras. 57-58.
355 Russia's second written submission, paras. 57-82; opening statement at the second meeting of the
Panel, para. 56.

affirmative conclusion on all three issues. In the circumstances of the ca se before us, we find it
appropriate to examine first whether the existence of the measure has been proven, before
analysing whether, if it exists, it is a measure of the type that can be subject to dispute
settlement.
7.5.1 Measure at issue
7.282. Unlike the first to eleventh measures, the twelfth measure at issue does not consist in the
tariff treatment applied by Russia in respect of a particular tariff line. It is alleged to consist,
rather, in something broader, affecting a "significant number or tariff lines". I mportantly, it is
unwritten, in the sense that it is, in the European Union's own words, "not described in a separate
written measure". 356 Consistent with this, the European Union in its panel request has also
described the SDV as a "general practice".357
7.283. We recall that the first issue arising in respect of the twelfth measure is whether the
European Union has demonstrated its existence. In this respect, we are mindful of the Appellate
Body's statement that the "evidence and arguments [necessary] in order to p rove the existence of
a measure challenged will be informed by how such measure is described or characterized by the
complainant."358 In the light of this, and taking into account the fact that the alleged SDV is an
unwritten measure, we will review in some detail the ways in which the European Union has
described the measure during the course of the proceedings. This will enable us to identify the
characteristics of the measure at issue and subsequently assess whether the European Union has
demonstrated its existence.
7.284. We begin by recalling the description of the twelfth measure contained in the European
Union's panel request. That document defines and limits our jurisdiction, and sets out the
"nature"359 of both the measures at issue and the claims against the m. The twelfth measure is
identified in paragraph 11 of the Panel request, which provides the following description of the
SDV:
[T]he legal instruments referred to below systematically provide, in relation to a
significant number of tariff lines, for a typ e/structure of duty that varies from the
type/structure of duty recorded in the Schedule in a way that leads to the application
of duties in excess of those provided for in the Schedule for those goods whenever the
customs value is below a certain level, i n one of the two ways described above (in
relation to the seventh, eighth, ninth, tenth and eleventh measure at issue), without
providing for a mechanism that would prevent the ad valorem equivalents of the
applied duties from exceeding the level of the bo und duties. This general practice
constitutes the twelfth measure at issue.360
7.285. In its first written submission, the European Union states that the twelfth measure is:
[A] more general measure consisting in systematic duty variations … In this respect,
the CCT systematically provides, in relation to a significant number of tariff lines, for a
type/structure of duty that varies from the type/structure of duty recorded in the
Schedule in a way that leads to the application of duties in excess [of Russia's
Schedule].361
7.286. The European Union further states that:
[V]iolations resulting from the SDV are not rare and sporadic occurrences, they
appear systematically throughout the CCT. In view of the large number of such

356 European Union's opening statement at the second meeting of the Panel, para. 51.
357 European Union's request for the establishment of a panel, para. 11.
358 Appellate Body Report, Argentina – Import Measures, para. 5.108.
359 Appellate Body Report, US – Continued Zeroing, para. 169.
360 European Union's request for the establishment of a panel, para. 11.
361 European Union's first written submission, para. 127.

violations … they are best described as individual instances of a more general
phenomenon.362
7.287. Additionally, the European Union explains that "[t]he SDV … is embedded directly into the
numerous individual tariff lines throughout the CCT", and contends that, therefore, "[t]he
violations stemming from the SDV … can be identified by the Panel as a 'group'".363
7.288. At our first substantive meeting with the parties, the European Union once again stated
that the "content [of the SDV] is the particular kind of tariff treatment that is systematically
accorded by Russia to a significant number of tariff lines".364 Following this meeting, we asked the
European Union a number of questions in order to clarify our understanding of the SDV. In one
response, the European Union explained that it "is challenging the SDV as a single mea sure", and
stated that "[e]ach individual tariff line to which the SDV applies … is an individual instance of"
that measure.365 In another response, the European Union stated that the SDV is "characterized
notably by the particular kind of tariff treatment t hat Russia imposes on a significant and changing
number of tariff lines".366
7.289. Finally, in its second written submission, the European Union explains that it is challenging
the WTO-consistency of "systematically applying certain clearly described types of tar iff treatment
that lead, in each individual instance of such tariff treatment, to duties being levied in excess of
bound rates".367
7.290. Russia argues that the European Union has "failed to define the precise content" of the
twelfth measure at issue. 368 According to Russia, the European Union's challenge is effectively
against an open -ended list of tariff lines. 369 In Russia's view, the European Union's description of
the SDV leaves open the scope and content of the measure, and requires either the Panel or
Russia to identify the particular tariff lines that are allegedly inconsistent with Article II:1(b), first
sentence.370 In Russia's view, the ambiguity of the European Union's descriptions of the SDV
prevents the Panel from finding that that measure is inconsistent with Russia's WTO obligations.371
7.291. The Panel agrees with Russia that some aspects of the European Union's descriptions are
not entirely clear. Notably, the European Union has sometimes used different words to describe
the relationship between the SDV, the CCT, and individual tariff lines.372 Nevertheless, in our view,
the excerpts reproduced above show that the European Union has consistently defined the SDV as
consisting in the systematic application of particular types of tariff treatment accorded to, or in
respect of, a significant number of individual tariff lines in the CCT. 373 Thus defined, the SDV
consists of three key elements, which are:

362 European Union's first written submission, para. 133.
363 European Union's first written submission, para. 142.
364 European Union's opening statement at the second meeting of the Panel, para. 89.
365 European Union's response to Panel question No. 31.
366 European Union's response to Panel question No. 76.
367 European Union's second written submission, para. 95.
368 Russia's first written submission, para. 173; second written submission, paras. 85, 102 and 103;
request for a preliminary ruling, para. 51; opening statement at the second meeting of the Panel, para. 51.
369 Russia's first written submission, para. 174.
370 Russia's request for a preliminary ruling, para. 11; first written submission, para. 179.
371 Russia's second written submission, para. 59.
372 For example, the European Union's panel request states that it is "the legal instruments referred to
below" (i.e. the CCT itself) that "systematically provide" for the challenged kinds of tariff treatment. In its first
written submission, the European Union again states that "the CCT systematically provides" for the relevant
tariff treatment (para. 127), but later states that the alleged violations "result[] from the SDV" and "appear
systematically throughout the CCT" (para. 133). The European Union further states that "[t]he SDV consists of
a large number of individual violations that are all contained in a legally-binding, overarching public
instrument: the CCT" (para. 139). The European Union then states that "[t]he SDV … is embedded directly into
the numerous individual tariff lines throughout the CCT" (para. 142). In its response to questions from the
Panel, the European Union used the expression "[e]ach individual tariff line to which the SDV applies (in other
words, each individual tariff line to which the sort of tariff treatment described by the EU when defining the
SDV is accorded)" (response to Panel question No. 31).
373 The European Union has also suggested that the SDV applies to a changing number of tariff lines. We
observe, however, that this attribute was not described or otherwise adverted to in the European Union's panel

a. The systematic application
b. Of certain types of tariff treatment ("duty variation")
c. To, or in respect of, a significant number of individual tariff lines in the CCT.
7.292. As the European Union has insisted on these three elements in its panel request and
throughout its submissions, in our view they constitute definitional characteristics of the SDV. Each
of them is constitutive of the SDV, in the sense that without any one of the three the SDV would
no longer be the SDV, but a different measure.
7.293. We note, in addition, that the European Union's panel request characterizes the SDV as a
"general practice". As indicated above, in statem ents before us, the European Union also referred
to the SDV as a "general phenomenon", and indicated that the relevant types of duty variation
occur "throughout the CCT". 374 This additional characteristic, which goes to the scope of the SDV,
can and should likewise be considered as a definitional and constitutive element of the SDV. 375 As
we elaborate further below, the European Union's characterization of the SDV as a "general"
measure clarifies the scope of the SDV in a way that the other definitional elements do not.376
7.294. Having identified the definitional characteristics of the SDV as we understand them, we
now turn to consider them in more detail. As they are not fully self-explanatory, it is appropriate to
clarify what the terms "systematic", "types of tariff treatment", and "significant" and "general"
mean, after which we will assess whether the SDV has been shown to exist.
7.5.1.1 Systematic application
7.295. The Panel begins by considering the first of the three elements enumerated above, the
"systematic application" of particular tariff treatment.
7.296. We note at the outset the European Union's argument, in response to a question from the
Panel, that "[t]here is no general requirement to prove that a measure at issue is of a 'system atic
character'".377 We agree. In the present dispute, however, it is the European Union itself that has
defined the measure at issue as consisting of the "systematic" application of particular types of
tariff treatment, and insisted, throughout its submissions, on the systematic nature of the SDV.
Indeed, the very name chosen by the European Union for the twelfth measure – "Systematic Duty
Variation" – highlights the importance of this nature. Thus, in inquiring into the meaning of the
term "systematic", and in proceeding to assess whether the Europe an Union has submitted proof
in support of its assertion that the measure is "systematic", we are not imposing any general
requirement, but rather analysing the measure at issue according to "the way in which the
complainant has characterized" it.378
7.297. The term "systematic" first appears in the European Union's panel request, where it is not
defined. Nevertheless, some indication of the term's meaning can be gleaned from the context
provided by the paragraph in which it is used. First, the panel request indica tes that the SDV
"systematically provides [the particular kinds of tariff treatment], in relation to a significant
number of tariff lines …" This sentence, and in particular the preposition "in relation to", indicates
that the expression "systematically provides" means something other than "a significant number of
tariff lines". In other words, the sentence implies that the systematic nature of the measure's
application consists in something other than the mere fact that it applies to or affects a significa nt
number of tariff lines. This reading of the sentence ensures that each of its elements is given
independent meaning and effect.

request. Moreover, the European Union has confirmed that it is not claiming that the allegedly frequent
modifications of the CCT are inconsistent with any provision of the covered agreements. At any rate, the
evidence submitted by the European Union suggests that any changes to the scope of the SDV have been
changes that eliminated the kind of duty variation that the European Union alleges is characteristic of the SDV.
374 European Union's opening statement at the first meeting of the Panel, para. 17.
375 Annex A-1, paras. 4.39 and 4.41.
376 See section 7.5.1.4 below.
377 European Union's response to Panel question No. 109.
378 European Union's response to Panel question No. 109.

7.298. Neither the European Union's written submissions nor its responses to the Panel's
questions provide an explicit definition o f the term "systematic". Indeed, the European Union's
statements suggest at least three possible meanings of, or approaches to, the term "systematic":
first, some of the European Union's statements suggest that systematic means nothing more than
"applied in respect of, or affecting, a significant number of tariff lines"; second, other statements
suggest the opposite, that is, that the "systematic" nature of the measure is conceptually distinct
from the fact that it allegedly affects numerous tariff lines; a nd third, there are statements
suggesting that the term "systematic" implies the existence of some kind of pattern of behaviour
in according particular types of tariff treatment.
7.299. With respect to the first approach, the submissions contain a number of sta tements that
appear to conflate the terms "systematic" and "significant number of tariff lines". For example, the
European Union argues that "violations resulting from the SDV are not rare and sporadic
occurrences. They appear systematically throughout the CCT."379 This statement could be read as
suggesting that the SDV is "systematic" because it applies to a "significant number" of tariff lines.
Similarly, in response to a question from the Panel, the European Union explained that "[t]he
terms systematic and general refer … to the fact that such variations … are widespread and appear
at numerous points throughout the CCT, so that they can be described as individual instances of a
more general measure".380
7.300. With respect to the second approach, and despite the st atements quoted above, the
European Union has also repeatedly distinguished between the "systematic" nature of the measure
and the fact that it applies in respect of a significant number of tariff lines. This is in keeping with
the European Union's descrip tion of the measure in its panel request. Thus, the European Union
referred to "the systematic duty variation that affects a significant number of tariff lines" 381,
suggesting that the systematic character of the measure and the fact that it affects a signif icant
number of tariff lines are conceptually distinct. To similar effect is the European Union's statement
that "[t]he finding [they] seek is addressed at the particular kind of tariff treatment systematically
accorded to a large and changing number of tariff lines throughout the CCT".382
7.301. Finally, in respect of the third approach, a number of statements suggest that the
"systematic" nature of the SDV lies in the fact that the relevant types of tariff treatment are
applied according to some plan, method, or pattern. Thus, the European Union refers to the SDV
as a "pattern of violations". 383 Similarly, the European Union argues that "[b]y examining the
Illustrative List, a pattern emerges : Russia did not make an error by imposing a combined duty
instead of an ad valorem duty in a few isolated instances, but has done so repeatedly,
systematically and in the same way".384
7.302. In considering the European Union's use of these variant approaches to the term
"systematic", we note that, on the one hand, we need to pay attent ion to the ways in which the
European Union has used the term so that we consider the measure as described by the European
Union itself. On the other hand, it is important, particularly when dealing with a term that is a
definitional characteristic of a me asure, that we are able to identify a clear and unchanging
meaning. Otherwise, neither the responding party nor the Panel itself would be able to pin down,
as it were, the measure whose consistency with the covered agreements is contested. This could
raise issues of due process, in that a responding party should not have to adjust its pleadings
during the panel proceedings to respond to shifting descriptions of the measure. 385 It could also
effectively permit a complaining party, over the course of its submissions, to redefine a measure in
such a manner that it would no longer be within a panel's terms of reference.
7.303. In the light of this, it is necessary for us to proceed to determine the meaning of the term
"systematic" that will form the basis of our review of the evidence submitted in support of the
existence of the SDV. As we noted above, the European Union's panel request includes the term

379 European Union's first written submission, para. 133. (emphasis added)
380 European Union's opening statement at the first meeting of the panel, para. 17.
381 European Union's opening statement at the first meeting of the Panel, para. 11.
382 European Union's response to Panel question No. 32.
383 European Union's first written submission, paras. 7 and 32.
384 European Union's response to Panel question No. 82. (emphasis omitted)
385 We note that the Appellate Body made a very similar point in respect of the due process rights of
complaining parties. Appellate Body Report, Chile – Price Band System, para. 144.

"systematically", but does not explicitly define it. In the absence of a definition provided by the
European Union, we look initially to the term's ordinary meaning, as expressed in dictionaries.386
7.304. The Shorter Oxford English Dictionary defines "systematic" as follows:
(Of a text, exposition, activity, etc.) arranged or conducted according to a system,
plan, or organized method; (of a person) acting according to a system, regular and
methodical, thorough; habitual, deliberate, pre-meditated…387
7.305. The Oxford English Dictionary Online provides similar relevant definitions:
Arranged or conducted according to a system, plan, or organized method; involving or
observing a system; (of a person) acting according to a system, regular and
methodical.
Acting, carried out, or expressed with deliberate (and frequently malicious) intent;
carried out as a regular and reprehensible practice; habitual, deliberate,
premeditated.388
7.306. Similarly, the Collins English Dictionary defines "systematic" as something that is
"characterized by the use of order and planning; methodical".389
7.307. These definitions indicate that the word "systematic", when combined wi th an activity such
as "application" of particular tariff treatment, denotes something that is done according to a
system, plan, or organized method. Thus, when the European Union refers to "systematic"
application of particular types of tariff treatment, it is in our view denoting the existence of an
alleged "system" for applying these types of tariff treatment. We also note in this connection the
European Union's use of the term "pattern of violations". 390 In our view, that term can be properly
used to desc ribe a situation of "systematic" violations only if it refers to violations that are the
consequence of a system, plan, or organized method.
7.308. It is instructive to note, in addition, the following statement by the Appellate Body in
Argentina – Import Measures:
It seems to us that … the Panel's findings show that the TRRs [the trade -related
requirements at issue] measure has systematic application as opposed to sporadic,
unrelated applications of individual TRRs. The systematic nature of the unwritten TRRs
measure is evidenced by and manifested in the fact that TRRs are applied to economic
operators in a broad variety of different sectors as part of an organized effort,
coordinated and implemented at the highest levels of government, and aimed at
achieving imp ort substitution and reduction of trade deficit within the framework of
the "managed trade" policy.391
7.309. This passage interprets the phrase "systematic application" as referring to a situation
where individual applications in a broad variety of different econo mic sectors are connected
("related") to one another inasmuch as they are all the result of an "organized effort" undertaken

386 We note that other panels have also had recourse to dictionaries in order to clarify the ordinary
meaning of terms used in a panel request: see, e.g. Panel Reports, China – Electronic Payment Services, para.
7.42 and fn 91; China – Publications and Audiovisual Products, para. 7.50; EC – Approval and Marketing of
Biotech Products, para. 19.
387 Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007), Vol.
2, pp. 3154-3155.
388 Oxford English Dictionary online, definition of "systematic",
<http://www.oed.com/view/Entry/196668?redirectedFrom=systematic#eid>, accessed on 12 February 2016.
The Dictionary gives a number of examples of this usage, including the following: "Resistance groups in
Belgium have … been engaged in the systematic destruction of railways, road bridges, telecommunications
[etc.]".
389 Collins English Dictionary online, definition of "systematic",
<http://www.collinsdictionary.com/dictionary/english/systematic>, accessed on 12 February 2016.
390 European Union's first written submission, paras. 7 and 32.
391 Appellate Body Report, Argentina – Import Measures, para. 5.142.

in support of a particular "aim". This understanding accords closely with that which we have
derived from dictionaries above.392
7.310. Furthermore, and as we explained, the text of the European Union's panel request
indicates, and some of the European Union's own statements suggest, that the term "systematic",
in the context of the twelfth measure, must mean something other than "occurring in respect of a
significant number of tariff lines", because the panel request by its terms distinguishes between
these two concepts. We also note that the European Union has used the word "widespread" in its
submissions when discussing the systematic appl ication of relevant tariff treatment. 393 We do not
agree that this word can be used interchangeably with "systematic". Indeed, the dictionary
definitions provided above do not support such an interpretation. To be sure, a systematic activity
can, and often will be, one that is also widespread. But an activity can, in our view, be systematic
without at the same time being widespread.394
7.311. More generally, we consider that frequent repetition of an activity, or repetition on a
regular basis, is not, in and of itself , "systematic" activity, as it does not necessarily imply an
activity that is undertaken according to a system, plan, or organized method or effort. Observed
repetition may be accidental, random or so diffuse or unrelated as to belie any suggestion of
systematicity. Nevertheless, depending on the circumstances of each case, repetition may
constitute relevant evidence in support of an asserted systematic activity. In some cases it may
even be possible to infer the existence of systematic activity from observ ed repetition, where the
repetition is so substantial (for example, so frequent) as to render it more likely than not that an
underlying system exists.395 Based on the above considerations, we find that the term "systematic"
in the European Union's expressio ns "systematic application" and "systematic duty variation"
cannot properly be interpreted to mean "widespread" or "in a large number of cases". Rather, we
think it means "done according to a system, plan, or organized method or effort". It refers, in the
aforementioned expressions, to a situation where individual instances of application of certain
types of tariff treatment, or individual instances of duty variation, are connected by a system,
plan, or organized method or effort. 396 Accordingly, we will base our review of the evidence
submitted to us on this interpretation of the term "systematic".
7.5.1.2 Certain types of tariff treatment
7.312. We now turn our attention to what we have identified as the second definitional
characteristic of the SDV, the particular types of tariff treatment at issue. The European Union has
consistently argued that the SDV concerns goods subject to applied combined duty rates and
either bound combined duty rates or bound ad valorem duty rates. More particularly, the SDV
consists in two distinct types of tariff treatment. The first (which we will refer to as the "first type")
occurs where the CCT requires the imposition of a specific duty rate whenever it is higher than the
alternative ad valorem duty rate, where the bound rate is ad valorem only. Put another way, this
type of tariff treatment occurs where the relevant bound duty rate is expressed as "x%", and the
applied duty rate is expressed as "x%, but not less than y per unit". 397 The second (which we will

392 In response to a question from the Panel, the European Union stated that "in Argentina – Import
Measures, the panel found that the measure at issue had systematic application primarily because it applied to
economic operators in a broad variety of sectors." European Union's responses to Panel question Nos. 106-107
and 119. In our view, however, and as the passage cited above shows, the Appellate Body in that case
considered a range of factors in concluding that the measure at issue had "systematic" application. We do not
read paragraph 5.146 of the same Appellate Body report, which refers to the panel's finding on "systematic
application", as limiting the Appellate Body's own reasoning in its report, including at paragraph 5.142. At any
rate, for the reasons explained below, interpreting "systematic" to mean nothing more than, or to necessarily
include "occurring in a significant number of cases" would in our view be incorrect and would, in the present
dispute, also render parts of the text of the European Union's panel request redundant, as we have said.
393 See, e.g. European Union's opening statement at the first meeting of the Panel, para. 17.
394 For instance, an attack on a targeted group can be systematic, but it need not at the same time be
widespread.
395 This standard of proof has also been applied in the Panel Report, US – Countervailing and
Anti-Dumping Measures (China), para. 7.374 (referring to Appellate Body Reports, US – Upland Cotton
(Article 21.5 – Brazil), paras. 301, 321; and US – Continued Zeroing, para 335).
396 In our view, the terms "system", "plan" and "organized method or effort" imply the idea of pursuing
a particular aim. We therefore do not identify the existence of a particular aim as a separate element in our
interpretation of the term "systematic".
397 European Union's first written submission, para. 129; second written submission, para. 97.

refer to as the "second type") occ urs where the CCT requires the imposition of a combined duty
rate in the form of "x%, but not less than y per unit", where the bound rate, though also
combined, is expressed in the form "z%; or x%, but not less than y per unit; whichever is the
lower", where the value of "z" is higher than "x". 398 The seventh to ninth measures at issue in this
dispute are examples of the first type of tariff treatment; the tenth and eleventh measures at issue
are examples of the second type.
7.313. At the Panel's second meeting with the parties, Russia argued that the European Union had
introduced a new, third type of tariff treatment into its description of the SDV. According to Russia,
this additional type falls outside the Panel's terms of reference because it was not included in the
European Union's panel request.399
7.314. The European Union denies that it has introduced a new type of tariff treatment into the
description of the SDV. The European Union argues that "paragraph 11 of the European Union's
panel request, as well as the paragr aphs referred to therein, covers all three types of tariff
treatment by referring to 'two ways' described in relation to measures 7 – 11. The first 'way'
covers two types of tariff treatment under the SDV, and the second way covers the third".400
7.315. In order t o address this issue, it is necessary to look closely at the passages to which
Russia has pointed in support of its allegation. The first paragraph is from the European Union's
second written submission. It reads as follows:
The EU has, first, clearly desc ribed the particular type of tariff treatment required by
the SDV in abstract, even mathematical terms. To recap, that type of tariff treatment
is as follows. The bound duty is ad valorem (expressed as "X%"), and the applied duty
is combined, consisting of an ad valorem and a specific element (expressed as "X%
but not less than Y per unit of measurement"). There is no mechanism such as a
ceiling that further moderates the level of the applied duty, capable of ensuring that
the ad valorem equivalent of the a pplied duty never exceeds "X%". For all tariff lines
to which such treatment is accorded, the applied duty will exceed the bound rate
(expressed as "X%") for every customs value below "Y divided by X%".401
7.316. This paragraph is supplemented by a footnote, which provides:
In addition, the European Union's description of the SDV outlines two further possible
types of tariff treatment. The second type is exactly the same as the first type, except
that the bound ad valorem duty is higher than the ad valorem element o f the
combined applied duty. In such cases (bound duty is "X%"; applied duty is "Z% but
not less than Y per unit of measurement", where X>Z), the duty would be applied in
excess of bindings whenever the customs value is below "Y divided by Z%". The third
type is analogous to the tariff lines described in Section D of the European Union's
first written submission. Whenever the applied duty is expressed as "X% but not less
than Y per unit of measurement", and the bound duty is expressed as "Z%; or X% but
not less than Y per unit of measurement; whichever is the lower" (where Z is higher
than X), the duty would be applied in excess of bindings whenever the customs value
is below "Y divided by Z%".402

398 European Union's first written submission, para. 129; second written submission, fn 82.
399 Russia's closing statement at the second meeting of the Panel, para. 17. Russia's complaint in this
respect focuses on paragraph 97 of the European Union's second written submission and paragraph 47 of its
opening statement at the second meeting of the Panel.
400 European Union's response to Panel question No. 105.
401 European Union's second written submission, para. 97. (footnote omitted)
402 European Union's second written submission, fn 82. To similar effect are two further paragraphs of
the European Union's opening statement at the second meeting of the Panel, which provide:
[T]he Illustrative List only provides evidence of the first type: combined duties with an ad
valorem element equal to the bound rate. The second type is closely connected, the only
difference being that the ad valorem element is lower than the bound rate. Nevertheless, given
the existence of the specific duty, the same mathematical formula can be relied upon to see
exactly why and when the second type leads to the levying of duties in excess.

7.317. Russia's contention is that the "second type" of tariff treatme nt referred to in this footnote
is in fact a new type of tariff treatment that was not raised in the European Union's panel request.
7.318. The Panel recalls the definition of the SDV as set out in the European Union's panel
request.403 Importantly, that definition refers to alleged duty variations "in one of the two ways
described above (in relation to the seventh, eighth, ninth, tenth, and eleventh measure at issue)".
This sentence refers the reader back to the paragraphs 8 and 9 of the panel request, which define
the types of tariff treatment allegedly accorded to the seventh to ninth and tenth and eleventh
measures at issue. With respect to the seventh to ninth measures, paragraph 8 defines the
relevant type of tariff treatment as follows: "Russia applies combine d duty rates (combining an
ad valorem and a specific element; for instance '3% but not less than 0.09 EUR/kg') in relation to
goods for which the Schedule provides for ad valorem rates (for instance '3%')'. In respect of the
tenth and eleventh measures at issue, the relevant type of tariff treatment is defined in paragraph
9 as: "Russia applies combined duty rates (combining an ad valorem and a specific element; for
instance '16%, but not less than 0.156 EUR/l') in relation to goods for which the Schedule provides
for a formula that requires Russia to impose the lower of the amounts of duty: either the amount
based on the application of an ad valorem rate or of the amount based on the application of a
combined rate (for instance '16.7%; or 16%, but not less than 0.156 EUR/l; whichever is the
lower')".
7.319. The question for us is whether what the European Union refers to in its second written
submission as the "second type" of tariff treatment is included within the descriptions in the panel
request, or whether it is a new type of tariff treatment that falls outside the Panel's terms of
reference. To avoid confusion, we refer to this type as the "third type" of tariff treatment.
7.320. We begin by observing that there does appear to be a lack of consistency between the
descriptions of the SDV provided in the European Union's panel request and first written
submission, on the one hand, and in its second written submission and second opening statement,
on the other hand. The notion that the SDV consists of two types of tarif f treatment (or of tariff
treatment that results in the imposition of excess duties in one of two ways) is supported by the
description provided in the European Union's first written submission, which distinguishes between
two broad types of tariff treatment (the first introduced by the words "In a number of instances" at
the beginning of the paragraph, and the second introduced by the words "A different way in which
the SDV could lead to violations" five lines from the end of the paragraph). 404 In the latter
submissions (i.e. in the European Union's second written submission and its second opening oral
statement), however, the European Union refers to three types of tariff treatment. Although the
European Union refers in its earlier submissions to two "ways", rather than to two "types", we do
not think that the expression "two ways" clearly or obviously denotes "three" (or more) types.
7.321. A closer examination, however, reveals that this difference in wording is stylistic rather
than substantive. The "third" type of tariff treatment is merely one more version of the type of
tariff treatment that we have described above as the "first type", and which the European Union
described as the "first way". To recall, this particular "way" exists where the CCT requires the
imposition of a specific duty rate whenever it is higher than the alternative ad valorem duty rate,
and the bound rate is ad valorem only. Indeed, the "third type" of tariff treatment is in fact
discussed in the European Union's first written submission, a lthough in that document the
European Union did not refer to it as a separate type of tariff treatment, but merely as a possible
manifestation of the first way identified in the panel request. Thus, in its first written submission,
the European Union explained the first way as follows:
In a number of instances, the CCT requires the imposition of a specific duty whenever
it is higher than a given ad valorem duty, with the bound rate being ad valorem only.
Such duties will inevitably be levied in excess of b ound rates below a certain break -

The third type of tariff treatment is somewhat different from the first two. However, it also
shares an important feature with them: for some customs values, the structure and design of the
duty require the application of a specific duty that exceeds the ad valorem rate provided in the
Schedule. European Union's opening statement at the second meeting of the Panel,
paras. 47-48.
403 See paragraph 7.284 above.
404 European Union's first written submission, para. 129.

even price, including when expressed in connection to some other characteristic of the
product such as weight or volume. Where the bound ad valorem rate is equal to the
applied ad valorem element of the duty, the specific e lement of the duty will always
be applied in excess of bound rates. Where the bound ad valorem rate is higher than
the ad valorem element of the applied duty, the specific element of the duty will still
be in excess of bound rates in a subset of cases, aga in below a certain break -even
price. Either way, the price range in which duties are imposed in excess of bound
rates is easy to calculate and predict, such that it is possible to see precisely when
and how violations of Article II:1 will occur.405
7.322. As this p assage makes clear, the only difference between the two variations of the first
way concerns the value of the ad valorem element of the applied combined duty rate vis-à-vis the
bound ad valorem duty rate. The fundamental structure of the two variations is, however, exactly
the same, and both are, in our view, covered by the European Union's panel request. 406 It would
therefore be accurate to describe both variations with the expression used by the European Union
in paragraph 8 of its panel request. 407 Although the illustrative example given in that paragraph is
of a situation where the specific element of the combined applied duty rate is equal to the bound
ad valorem bound rate, that example is designated as being "for instance", and does not limit the
ordinary meaning of the abstract description that it illustrates.
7.323. In our view, the European Union could have been clearer in explaining that the "two ways"
it identified in its panel request referred to or incorporated "three types" of tariff treatment.
Nevertheless, for the reasons given above, we do not agree with Russia that the European Union
has expanded the scope of the twelfth measure at issue by including a type of tariff treatment that
was not specified in the European Union's panel request.
7.324. In sum, we und erstand the second definitional element of the SDV (i.e. "certain types of
tariff treatment") as referring to two types of tariff treatment. The first occurs where Russia
applies a combined duty rate in respect of a tariff line with abound ad valorem rate (regardless of
whether the value of the ad valorem element of the applied combined duty is equal to or less than
the value of the ad valorem bound duty rate). The second occurs where Russia applies a combined
duty rate in the form of "x% but not less than y per unit" in respect of a tariff line subject to a
bound combined duty rate in the form of "z%; or x% but no less than y per unit; whichever is the
lower", where the value of "z" is higher than "x".
7.5.1.3 Significant number of individual tariff lines
7.325. We now turn to address the next definitional characteristic that we have identified above,
namely the "significant number of tariff lines" allegedly affected by the SDV.
7.326. The European Union has not specifically defined, either in its panel request or
subsequently, what it means by the term "significant" in the phrase "a significant number of tariff
lines". Accordingly, as above when addressing the meaning of "systematic", we begin by
considering the European Union's statements before the Panel. In its first writte n submission, the
European Union argues that "…violations resulting from the SDV are not rare and sporadic", and
indicates that "[i]n view of the large number of such violations, the European Union submits that
they are best described as individual instanc es of a more general phenomenon". 408 Later in the
same submission, the European Union argues that the SDV "is embedded directly into the

405 European Union's first written submission, para. 129.
406 An example may make this point more concrete. Take, for example, the seventh measure at issue,
which is an example of the "first type" of tariff treatment. As we have explained, that measure consists in the
application of a combined duty rate ("3% but not less than 0.09 EUR/kg") where the corresponding bound duty
rate is ad valorem only ("3%"). In this example, the value of the ad valorem element of the applied combined
duty rate and the bound ad valorem duty rate are equal (3%). It is possible, however, to imagine a situation
where, instead of being equal, the value of the ad valorem element of the applied combined duty rate is not
equal to the value of the bound ad valorem duty rate. It is possible, for example, to imagine an applied
combined duty rate of "2% but not less than 0.09 EUR/kg" where the corresponding bound rate is simply 3%.
That variation – the lowering of the ad valorem element of the combined duty so that it is less than the ad
valorem bound duty rate – does not change the fundamental structure of the measure.
407 Paragraph 8 is quoted in paragraph 7.318 above.
408 European Union's first written submission, paras. 133 and 138-139.

numerous individual tariff lines throughout the CCT". 409 In its opening statement at the Panel's
first substantive meeting with the parties, the European Union explained that the kinds of tariff
treatment at issue are "repeatedly" accorded through the SDV 410, and argued that its Illustrative
List reflects the "frequency" with which the SDV accords the particular kinds of tariff treatment.411
Similarly, in response to a question from the Panel, the European Union states that the SDV affects
a "large and changing number of tariff lines" 412, and also that it is "widespread". 413 Taken
together, these statements indicate to us that the Euro pean Union uses the phrase "a significant
number of tariff lines" to refer to a large number of tariff lines, or numerous tariff lines.
7.327. The term "significant" is defined as meaning "[s]ufficiently great or important to be worthy
of attention" or "noticeab le, substantial, considerable, large". 414 Whereas the first of these
meanings essentially concerns a qualitative attribute of someone or something, the second
indicates that the term "significant" can also be interpreted in a quantitative sense. As explained
above, the European Union appears to have used the term in the latter sense. We note in this
respect that in the phrase at issue the adjective "significant" qualifies the word "number", which
suggests a concern with quantity. Given this context, and the E uropean Union's own statements
before us, we are satisfied that in the case of the twelfth measure the term "significant" has been
used to underscore that the number of affected tariff lines is quantitatively important.
7.328. For these reasons, and in acc ordance with the relevant dictionary definition, we consider
that "a significant number" of tariff lines is a "large", "substantial", or "considerable" number of
tariff lines. Therefore, to be "significant", a number need not necessarily be very large, substantial,
or considerable.
7.329. In interpreting the phrase "a significant number of tariff lines", we also need to look at the
relevant context of that phrase in the panel request, which includes a reference to the SDV as a
"general" practice.415 The word "general" is defined, inter alia, as follows:
Including, participated in by, involving or affecting, all, or nearly all, the parts of a
specified whole …; completely or approximately universal within implied limits;
opposed to partial or particular … Relating or belonging in common to various persons
or things … Of a rule, law, principle, formula, or description: applicable to a variety of
cases; true or purporting to be true for all or most of the cases which come under its
terms; (virtually) universal. In later use freq.: true in most instances, but not without
exceptions …416
7.330. This definition raises the issue of whether the word "general" in the panel request should
be taken to indicate that the SDV is a measure that affects "all, or nearly all", tariff lines. In our
view, such an interpretation of "general" would be questionable, however, precisely because the
panel request also contains the phrase "a significant number of tariff lines". As we have explained,
the word "significant" as it appears in that phrase im plies a large number of tariff lines, but not
necessarily all, or nearly all, of Russia's tariff lines. 417 Moreover, if the European Union had meant
to suggest that the SDV covers all, or nearly all, tariff lines, it would in our view have said so
specifically, rather than using the looser term "significant number".
7.331. For these reasons, we consider that "a significant number of tariff lines" does not mean all,
or nearly all, tariff lines, but merely a large, substantial, or considerable number of tariff lines.

409 European Union's first written submission, para. 142.
410 European Union's opening statement at the first meeting of the Panel, para. 88.
411 European Union's opening statement at the first meeting of the Panel, para. 89.
412 European Union's response to Panel question No. 32.
413 European Union's response to Panel question No. 85.
414 Oxford English Dictionary Online, definition of "significant",
<http://www.oed.com/view/Entry/179569?redirectedFrom=significant#eid>, accessed on 12 February 2016.
415 European Union's request for the establishment of a panel, para. 11.
416 Oxford English Dictionary Online, definition of "general",
<http://www.oed.com/view/Entry/77489?rskey=htbn3p&result=1&isAdvanced=false#eid>, accessed on 12
February 2016.
417 Annex A-1, para. 4.38.

7.5.1.4 General practice
7.332. We turn, finally, to the European Union's characterization of the SDV as a "general"
practice. The European Union observes in this respect that violations resulting from the SDV are
"best described as individual instances of a more genera l phenomenon".418 The European Union
also states that "[t]he terms systematic and general refer … to the fact that such variations … are
widespread and appear at numerous points throughout the CCT, so that they can be described as
individual instances of a more general measure."419
7.333. The latter statement is instructive because it elucidates how the concepts of "general" and
"significant number" can be read harmoniously. It indicates that the relevant types of tariff
treatment have been allegedly accorded to a la rge number of tariff lines ("numerous points"), and
that affected tariff lines can be found "throughout the CCT". The SDV is alleged to be general in
view of the latter aspect. That is, we understand the European Union to contend that unlike the
first to eleventh measures, the twelfth measure is general, in the sense that it does not target any
specific tariff line or any particular part of the CCT.
7.334. We note that this understanding of the word "general" accords with one of the dictionary
definitions provided above420, namely "opposed to partial or particular". In addition, interpreting
the word "general" in this way sheds additional light notably on the scope of the SDV. It makes
clear that the "phenomenon"421 called "SDV" that allegedly exists in the CCT is not limited to only
specific parts of the CCT.422 It therefore gives the term "general" independent meaning.
7.335. In the light of the foregoing, we consider that the word "general" addresses the scope of
the SDV and clarifies that scope in a way that the other three definitional characteristics do not. It
notably indicates that the SDV is not confined to particular parts of the CCT.
7.5.1.5 Conclusion on the definition of the measure at issue
7.336. After careful examination of each of the "definitional characteristics" of the SDV, and
bearing in mind the limitations imposed by the text of the panel request as well as the European
Union's subsequent descriptions and explanations before us, we consider that the alleged twelfth
measure can be described essentially as follows: the CCT applies two specified types of tariff
treatment to a large number of tariff lines. This phenomenon, which reflects a system or organized
method or effort, is general rather than being limited to only particular parts of the CCT. To use
once again the terms of the panel request, the measure at issue consists in the systematic
application of particular types of tariff treatment to a significant number of tariff lines, resulting in
a general practice.
7.337. Having explained our understanding of the measure as defi ned by the European Union, we
now turn to consider whether the European Union has proven that the measure exists as alleged
by the European Union.
7.5.2 Existence of the measure
7.338. We turn to consider whether the European Union has demonstrated the existence of the
twelfth measure. We recall in this regard that according to the Appellate Body, the complaining
party must "present relevant arguments and evidence during the panel proceedings showing the
existence of the measures, for example, in the case of challenges brought against unwritten
measures".423

418 European Union's first written submission, paras. 133 and 138-139.
419 European Union's opening statement at the first meeting of the Panel, para. 17.
420 See paragraph 7.329 above.
421 European Union's first written submission, para. 133.
422 In contrast, it is arguable that the phrase "a significant number of tariff lines" provided an indicator
that the SDV is not limited to specific tariff lines. But a significant number of tariff lines could be a significant
number that represents only a specific part of the CCT.
423 Appellate Body Report, US – Continued Zeroing, para. 169.

7.339. The European Union argues that the existence of the twelfth measure is demonstrated by
(i) the mathematical explanations of the seventh to elevent h measures at issue; (ii) a
non-exhaustive list ("Illustrative List") that provides the duty rates applied by Russia at the time of
the Panel's establishment in respect of 39 tariff lines; and (iii) trade statistics for transactions
under six of the tariff lines indicated in the Illustrative List, that allegedly demonstrate the
"adverse trade impact" of the applied duty rates for those six tariff lines.424
7.340. Russia considers that the evidence provided by the European Union is insufficient to prove
the existence of the twelfth measure.425 Russia suggests that the European Union's Illustrative List
demonstrates only "the fact that Russia does indeed apply duties". 426 Russia argues that the
European Union has failed to provide any evidence to show that the duty rates allegedly
illustrating the SDV are either repeated actions or linked together.427
7.341. The Panel recalls that the twelfth measure as described by the European Union is an
alleged unwritten measure whose existence has been challenged. We note the Appellate Body's
statement that "the constituent elements that must be substantiated with evidence and arguments
in order to prove the existence of a measure challenged will be informed by how such measure is
described or characterized by the complainant".428
7.342. Since we have already identified the key elements of the European Union's description
above, we turn to consider the types of evidence submitted by the European Union in support of
its description, before assessing whether this evidence demonstrates the existence of the
characteristic elements of the measure, as described by the European Union.
7.5.2.1 Evidence submitted by the European Union
7.343. We now address the European Union's evidence in respect of the existence of the twelfth
measure. We note that the European Union has submitted three types of evidence in support of its
submission that the twelfth measure exists.
7.344. First, the European Union has presented the applied and bound duty rates in respect of the
seventh to eleventh measures at issue, with accompanying mathematical explanations and
descriptions. Three of these applied duty rates (related t o the seventh, eighth and ninth measures
at issue) are combined duty rates comprising a single ad valorem element and a minimum specific
element.429 We recall the European Union's claim that the alleged inconsistency arises in respect of
tariff lines where the bound ad valorem rates are identical to the ad valorem alternative element of
the applied combined duty rates. This corresponds to the "first type" of tariff treatment that,
according to the European Union, characterizes the SDV. The remaining two appli ed duty rates
(related to the tenth and eleventh measures at issue) are combined duty rates comprising multiple
elements: first, a straightforward ad valorem element; second, a "combined" element constituting
an alternative ad valorem element that may not be lower than a minimum specific element; and
third, an element requiring that the duty levied be the lowest permissible under the various
elements. In the case of these two applied duty rates, the European Union claims that the alleged
inconsistency arises in respect of bound combined duty rates that are identical to the "combined"
elements of the applied duty rates. This corresponds to evidence in respect of the "second type" of
tariff treatment that, according to the European Union, characterizes the SDV.
7.345. Second, the European Union has presented an "Illustrative List of discrepancies" of tariff
lines that indicates the applied duty rates contained in the CCT in respect of 39 distinct tariff lines,
as they existed on the date of the Panel's establishment, as well as the bound duty rates for those
same tariff lines.430 The 39 tariff lines are from five different chapters of the CCT, namely: six tariff

424 European Union's response to Panel question No. 87, para. 174; second written submission, paras.
97-98.
425 Russia's opening statement at the second meeting of the Panel, paras. 51-58.
426 Russia's opening statement at the second meeting of the Panel, para. 53.
427 Russia's opening statement at the second meeting of the Panel, paras. 51-58.
428 Appellate Body Report, Argentina – Import Measures, para. 5.108.
429 See paragraphs 7.207 to 7.209 above.
430 Illustrative List of discrepancies related to the European Union's claim on the Systematic Duty
Variation, (Illustrative List), (Exhibit EU-19).

lines from chapter 15, two tariff lines from chapter 39, one tariff line from chapter 40, eight tariff
lines from chapter 84, and twenty -two tariff lines from chapter 87. Each of these relates to the
"first type" of tariff treatment challenged by the European Union, and corresponds to the type of
tariff treatment described by the European Union in respect of the s eventh to ninth measures. 431
We note that three of the 39 tariff lines included in the Illustrative List are 1511 90 190 2,
1511 90 990 2, and 8418 10 200 1. For these three tariff lines the relevant applied and bound
duty rates have already been described b y the European Union in the context of the seventh,
eighth and ninth measures. 432 Therefore, the Illustrative List demonstrates the applied and bound
duty rates in respect of 36 tariff lines additional to the five tariff lines already provided in the
European Union's description of the seventh to eleventh measures at issue. Furthermore, we
observe that the European Union did not submit into evidence all relevant Decisions of the EAEU
establishing the applied duty rates indicated in the Illustrative List.433
7.346. Finally, the European Union has presented trade statistics and accompanying calculations
concerning six of the tariff lines included in the Illustrative List.434 Two of these tariff lines relate to
the seventh and eighth measures at issue. The statistics indic ate the total value and net weight of
goods imported under each of the six tariff lines, to certain districts in Russia, from certain points
of origin in the European Union. The European Union's accompanying calculations allegedly
demonstrate that the average customs duty levied on products falling under each of those six tariff
lines is in excess of the relevant bound duties. We recall that similar evidence was used as
supplementary evidence by the panel and the Appellate Body in Argentina – Textiles and Apparel,
in making a finding of inconsistency under Article II:1(b), first sentence.435
7.347. The European Union has submitted no other evidence, whether direct or indirect, to
support its assertion regarding the existence of the SDV.
7.5.2.2 Assessment of evidence
7.348. As we have already noted, the European Union recognizes that the SDV, as distinct from
its alleged individual instances, is an unwritten measure. We cannot, therefore, lightly accept the
European Union's assertion that it exists. Accordingly, we now turn to con sider whether the
evidence submitted by the European Union demonstrates that the SDV, as defined by the
European Union, actually exists. As we have explained above, the SDV, as described by the
European Union, has the following definitional characteristics : "certain types of tariff treatment"
that, in respect of a "significant number of tariff lines", are "systematically" applied or accorded in
such a way as to result in a "general" practice. As we have explained, each of these is constitutive
of the SDV as defined by the European Union. Thus, each element must be demonstrated before
the Panel could find that the SDV, as a single overarching and unwritten measure, exists.
7.349. In reviewing the evidence before us, we will begin by considering whether the evidence
submitted by the European Union establishes the existence of the relevant types of tariff
treatment. If it does, we will proceed to consider whether this tariff treatment is accorded to a
significant number of tariff lines, whether it is accorded in a syst ematic way, and whether it has
resulted in a general practice.
7.5.2.2.1 Types of tariff treatment
7.350. We have already explained our understanding of the two types of tariff treatment
implicated in the European Union's description of the SDV. We now turn to examine whet her the
evidence submitted by the European Union shows that the types of tariff treatment described by
the European Union exist in the CCT. In carrying out this analysis, we are not concerned with

431 See paragraph 7.312 above.
432 The applied and bound duty rates indicated in the Illustrative List for tariff line 8418 10 200 1 are the
same as those indicated by the European Union for the ninth measure as it existed at the time of the Panel's
establishment, and not as amended.
433 In contrast, in respect of its claims concerning the first to eleventh measures at issue, the European
Union presented as evidence the relevant Decisions of the Eurasian Economic Union, amending the CCT.
434 Specific cases of discrepancies, customs statistics of foreign trade of Russian Federation, (Customs
Statistics), (Exhibit EU-20).
435 Appellate Body Report, Argentina – Textiles and Apparel, paras. 61-62.

either the frequency with which, or the systematic way in w hich, the treatment is allegedly
accorded. Rather, our inquiry focuses on whether the types of tariff treatment alleged to exist
have been identified in the CCT.
7.351. The European Union argues that the seventh to ninth measures manifest the first type of
tariff treatment at issue (which exists where Russia applies a duty rate in the form "x% but not
less than y per unit", where the corresponding bound rate is expressed in ad valorem terms only).
Similarly, the European Union argues that the tenth and eleventh me asures manifest the second
type of tariff treatment at issue (which exists where Russia applies a duty rate in the form "x% but
not less than y per unit", where the corresponding bound rate is "z%; or x% but not less than y
per unit; whichever is the lower ").436 Additionally, the European Union argues that the Illustrative
List contains further examples of the first type of tariff treatment.437
7.352. The Panel begins by noting that the European Union does not claim to have provided any
evidence of the type of tariff treatment described as the "second type" in its second written
submission (referred to in our findings as the "third" type). 438 As we have explained above, this
type of tariff treatment, which is really just another version or sub -type of the first type, all egedly
exists where Russia applies a combined duty rate in the form "x% but not less than y per unit ",
and where the corresponding bound rate is expressed in ad valorem terms only and is higher than
the ad valorem element of the applied combined rate. 439 Because the European Union has not
provided us with any instances of this type of tariff treatment in the form of relevant excerpts from
the CCT, we find that it has failed to establish the third type of tariff treatment exists in the CCT.
7.353. Conversely, we fin d that the seventh to ninth measures at issue in this dispute are
instances of the first type of tariff treatment described by the European Union.440 Similarly, we find
that the tenth and eleventh measures at issue are instances of the second type of tariff treatment.
As we have explained in detail above, the European Union has provided evidence establishing the
existence of all these measures. It has, in particular, submitted relevant extracts from the CCT and
Russia's Schedule.
7.354. Accordingly, we find that, b y submitting evidence in respect of the seventh to eleventh
measures, the European Union has established the existence of the two types of tariff treatment
implicated in the SDV and described by the European Union in its Panel request: the first existing
where Russia applies a duty rate in the form "x% but not less than y per unit", where the
corresponding bound rate is expressed in ad valorem terms (the seventh to ninth measures); and
the second existing where Russia applies a duty rate in the form "x% but not less than y per unit",
where the corresponding bound rate is "z%; or x% but not less than y per unit; whichever is the
lower" (the tenth and eleventh measures). Although, in respect of the first type, we have seen
evidence of only one of the sub -types described by the European Union, this is sufficient to
establish that the first type of tariff treatment, as described by the European Union, actually exists
in the CCT.
7.5.2.2.2 Significant number of tariff lines
7.355. We now turn to assess whether the European Union has demonstrated that the types of
tariff treatment identified above are accorded to "a significant number of tariff lines".441
7.356. According to the European Union, the Illustrative List clearly shows that Russia accords the
relevant types of tariff treatment to a "significant" number of tariff lines in the CCT.442

436 European Union's first written submission, paras. 127 and 129.
437 European Union's opening statement at the second meeting of the Panel, para. 47; response to Panel
question No. 107.
438 European Union's second written submission, para. 97, fn 82.
439 As we have explained, this contrasts with the seventh, eighth, and ninth measures at issue, in
respect of which the bound ad valorem rate and the ad valorem element of the applied combined duty are
equal.
440 They are not, however, instances of the sub-type that we have referred to as the "third type" of tariff
treatment, and of whose existence the European Union has provided no evidence. Rather, the value of the
bound ad valorem duty rate and the ad valorem element of the combined duty rate are equal.
441 See paragraphs 7.325 to 7.331 above.

7.357. Russia responds that the Illustrative List cannot be considered evidence of anything ,
except the fact that Russia does apply duties.443
7.358. The Panel notes that the European Union has identified a number o f applied and bound
duty rates. According to the European Union, they demonstrate that the relevant types of tariff
treatment are accorded to a "significant number" of tariff lines. As noted above, the European
Union has submitted an Illustrative List, con sisting of the applied and bound duty rates in respect
of 39 tariff lines, and the evidence provided by the European Union in respect of the seventh to
eleventh measures. As we have explained, the rates corresponding to the seventh, eighth, and
ninth measu res, as they existed at the time of the Panel's establishment, are included in the
Illustrative List, whereas those corresponding to the tenth and eleventh measures are not. In total,
therefore, the European Union has identified the applied and bound duty rates for 41 different
tariff lines that allegedly demonstrate the SDV.
7.359. The Illustrative List suggests that Russia's applied duty rates were, at the time of the
Panel's establishment, at a certain level, and of a certain type and structure. However, as stated in
paragraph 7.345 above, the European Union has not provided the relevant excerpts from the CCT
that would demonstrate that the applied duty rates alleged in the Illustrative List do in fact exist.
7.360. Nonetheless, the European Union has submitted into evidence Decision No. 52
(Exhibit EU-6) and Decision No. 103 (Exhibit EU -8), which relate to its claims concerning the
seventh to ninth measures at issue. Decision No. 52 establishes certain duty rates required to be
applied by Russia as of 1 September 2014. It shows the same applied duty rates as are specified
in the Illustrative List for 20 tariff lines contained in the Illustrative List. Similarly, Decision No. 103
establishes duty rates required to be applied by Russia as of 1 September 2014, and shows the
same applied duty rate as specified in the Illustrative List for one additional tariff lin e not
contained in Decision No. 52. In addition to these Decisions that relate to tariff lines included in
the Illustrative List, the European Union has provided the relevant Decisions establishing the duty
rates in respect of the tenth and eleventh measures. Therefore, in total the European Union has
provided legal instruments establishing the applied duty rates in resp ect of 23 tariff lines allegedly
affected by the SDV. It follows that for the remaining 18 tariff lines included in the Illustrative List
the European Union has provided no documentary evidence of their existence. We will therefore
proceed on the basis tha t the European Union's evidence demonstrates that the relevant tariff
treatment has been accorded to 23 tariff lines.
7.361. We now consider whether the evidence before us supports the European Union's assertion
that the SDV affects a "significant" number of tariff lines. As we have explained in paragraph 7.331
above, the phrase "a significant number of tariff lines" in our view refers to a large, substantial, or
considerable number of tariff lines. We recall at the out set that the phrase "a significant number"
is intended to capture all tariff lines affected by the SDV, and not simply those contained in the
Illustrative List. However, it would be improper to infer from the mere existence of some tariff
lines with the re levant type of tariff treatment that there necessarily are others. The evidence
before us establishes the existence of 23 relevant tariff lines. In the absence of other evidence that
would support the conclusion that additional relevant tariff lines in fac t exist, the only inquiry we
can undertake is whether 23 tariff lines is in itself a "significant number" of tariff lines.
7.362. We note at the outset that the phrase "a significant number" does not refer to a particular
number. We further observe that 23 tariff lines could be a large, substantial, or considerable
number, and hence a "significant" number, of tariff lines, in some contexts, but not in others.
Therefore, it appears to us at a minimum appropriate, in assessing whether 23 tariff lines are a
large, substantial, or considerable number, to have regard to some comparator or reference point.
Otherwise, it is possible that a number will be accepted as "significant" even though the context
suggests that it is not large enough to constitute a "significant" number.
7.363. In the specific context in which the phrase "in relation to a significant number of tariff
lines" has been used in the European Union's panel request and in the European Union's
arguments before us, only two alternative approaches appear to us to wa rrant closer
consideration. On the one hand, the European Union's description of the measure as affecting a

442 European Union's second written submission, para. 98; response to question No. 87.
443 Russia's opening statement at the second meeting of the Panel, para. 53.

"significant" number of tariff lines could be understood as highlighting a fundamental distinction
between the SDV and the other eleven measures challenged by the European Union, each of which
concerns one single tariff line.444 On the other hand, the number of tariff lines affected by the SDV
could be compared to the total number of tariff lines in the CCT.
7.364. We begin with the first approach. It is easy to see that the European Union's reference in
the panel request to a "significant number of tariff lines" is useful in identifying the specific
measure at issue, insofar as it sharply contrasts the twelfth measure with the preceding eleven
measures, which concern single and identified tariff lines. Under this approach, the proper
comparison is therefore between the number of tariff lines affected by the SDV and the number of
tariff lines associated with each of the eleven other measures. As noted, each of these measures
concerns one single tariff line. This should not be taken to mean, however, that any number
greater than one is a significant number. To be "significant" under this approach, a number must
be greater than one and at the same time be a large, substantial, or considerable number. The
number one simply serves as a reference point for determining whether a number can be accepted
as "significant".
7.365. Under the alternative approach, we would compare the number of tariff lines affected by
the SDV to t he totality of tariff lines in the CCT, which, according to the parties, is approximately
11,000.445 Under this approach, the reference point is not the number one, but a number roughly
equal to 11,000. Thus, whether a number can be accepted as "significant" under this approach
must be determined bearing in mind the number 11,000. As a consequence, it may be the case
that under this approach a particular number could not be accepted as "significant" even though
under the first approach where the reference poi nt is one that same number could be accepted as
"significant".
7.366. As we understand the European Union's description of the SDV, the European Union
alleges that the total number of tariff lines, which we have said is approximately 11,000, is greater
than the number of tariff lines affected by the SDV. This view is supported by the European
Union's contention that the SDV affects a "significant" number of tariff lines contained in the CCT,
not "all" tariff lines. Viewed in this light, and considering the very large number of tariff lines in the
CCT, it seems to us that if the intended comparison was with the total number of tariff lines in the
CCT, it would have been more natural to refer in the panel request to a significant "proportion",
"percentage", or "shar e", of tariff lines that are affected by the SDV rather than to a significant
"number".
7.367. Thus, we find that the first approach fits better with the words actually used to describe
the twelfth measure in the panel request, and with their context, which nota bly includes the
preceding identification of the first eleven measures, each of which differs from the twelfth
measure by virtue of the fact that it concerns only one specific tariff line. As we cannot accept both
approaches at the same time, we will base our analysis on the first approach.
7.368. Accordingly, we now proceed to determine whether the 23 tariff lines at issue are a large,
substantial, or considerable number of tariff lines that is at the same time greater than one.
Plainly, 23 is a number greater than one. Moreover, 23 tariff lines can in our view be characterized
as a large, substantial, or considerable number of tariff lines in the context of the present dispute.
Indeed, had the European Union challenged the duties applicable to each of the 23 tar iff lines at
issue individually (which it could have done, but elected not to), we would have had to make
findings on 23 additional measures at issue. If we had to address an additional 23 measures at
issue, we would have no hesitation in saying that this would constitute a large, substantial, or
considerable number of additional measures). Thus, we are satisfied that in the specific context of

444 We note that the seventh to eleventh measures in particular concern the same types and structures
of duty that are covered by the SDV.
445 We note that in Russia's Working Party Report, a Russian representative indicated that before
Russia's accession what is now called the CCT "consisted of 11,170 tariff lines". Russia's Working Party Report,
para. 310.

the twelfth measure as described in the panel request, 23 tariff lines can be considered a large
number.446
7.369. For these reasons, we find that the 23 tariff lines whose existence the European Union has
established can be properly considered a "significant" number of tariff lines. We consequently also
find that the European Union has demonstrated that the relevant types of tariff treatment are
accorded "in relation to a significant number of tariff lines".447
7.5.2.2.3 Systematic application
7.370. We now turn to the European Union's assertion that the relevant types of tariff treatment
are systematically applied or accorded. We have determin ed above that the word "systematic" as
used in the context of the twelfth measure refers to a situation where individual instances of
application of particular types of tariff treatment are connected by a system, plan, or organized
method or effort. Bearin g this in mind, we now turn to consider the evidence submitted by the
European Union in order to determine whether it supports the conclusion that the types of tariff
treatment discussed above are indeed being applied systematically.448
7.371. The key evidence relied upon by the European Union consists of tariff lines included in the
Illustrative List, as well as the tenth and eleventh measures as they existed at the time the Panel
was established. In its first written submission, the European Union explains that th is "Illustrative
List detailing a number of tariff lines with regard to which the SDV leads to violations … is proof of
the systematic application of the SDV". 449 Similarly, in response to a question from the Panel, the
European Union reaffirmed that "[t]he significant number of tariff lines that is affected is also
indicative of the systematic nature of the measure". 450 In response to a question from the Panel
concerning the relationship between the Illustrative List and the alleged "systematic" nature of the
SDV, the European Union also stated that, in Argentina – Import Measures, the panel found that
the measure at issue had systematic application primarily because it applied to economic operators
in a broad variety of different sectors.451
7.372. Russia argues that t he European Union has "failed to provide evidence that [violations]
exist and … constitute a systematic practice". 452 In Russia's view, the European Union has failed
"to establish the systematic character of the measure at issue". 453 According to Russia,"[t]he
Illustrative List merely shows that certain duties are of [a] type, structure and design different
from those provided for in Russia's Schedule"; it does not "provide any evidence of inconsistency

446 We recall that we have said at paragraph 7.328 above that a "significant" number need not
necessarily be a very large, substantial, or considerable number.
447 See paragraphs 7.325 to 7.331 above.
448 The European Union has commented on Russia's argument that the European Union has not provided
"substantiated criteria that would allow … establishing [the] systematic character of the measure at issue".
Russia's second written submission, para. 58(c); response to Panel question No. 109. According to the
European Union, Russia's argument is "quite vague". The European Union then stated that "[i]t also departs
from the legal standard set by the Appellate Body. There is no general requirement to prove that a measure at
issue is of a systematic character". European Union's response to Panel question No. 109. The basis for the
European Union's statement is unclear to us because, as we have explained above, it is the European Union
that has insisted on the systematic nature of the SDV. While there may not be any "general" requirement to
establish the systematic nature of a challenged measure, here the European Union in its own description of the
measure at issue has consistently referred to it as being systematic in nature. Thus, in saying that our task is
to determine whether the European Union has established the systematic nature of the measure at issue, we
are not imposing a new test or additional requirement. Rather, we are simply inquiring whether the European
Union has "adduce[d] evidence sufficient to raise a presumption" that the challenged measure is of a
systematic nature. Appellate Body Report, US – Wool Shirts and Blouses, p. 14, DSR 1997:I, p. 323 at 335.
Doing so is fully consistent with the Appellate Body's statement that the elements that "must be substantiated
with evidence and arguments in order to prove the existence of a measure challenged will be informed by how
such measure is described or characterized by the complainant". Appellate Body Report, Argentina – Import
Measures, para. 5.108.
449 European Union's first written submission, para. 139.
450 European Union's response to Panel question No. 84; opening statement at the second meeting of
the Panel, para. 46 ("The Illustrative List is also evidence of the systematic nature of that measure").
451 European Union's responses to Panel question Nos. 106-107.
452 Russia's second written submission, para. 102.
453 Russia's second written submission, paras. 58-59.

of applied duties provided therein with Article II:1(a) an d (b) of the GATT 1994". 454 Russia also
argues that the European Union has failed to clarify how it could be assessed whether the three
types of tariff treatment, taken together, are accorded systematically. According to Russia, the
European Union suggests that the Panel should rule on the SDV on the basis of the Illustrative List,
which contains examples of only the first type of tariff treatment as evidence of the WTO -
inconsistency of the single measure, the SDV. 455 Additionally, in response to a question fro m the
Panel, Russia explained that although there may be some "logic in saying that duties are
systematic measures, because they are written measures of general and prospective application",
nevertheless "the SDV does not amount to a simple combination of these duties", and accordingly
there is no reason "to transfer the characteristics of a duty … to the SDV".456
7.373. The Panel begins by considering whether the "systematic" nature of the twelfth measure
must be demonstrated in relation to each of the two types of tariff treatment, or whether we can
consider those types of treatment together. The European Union argues that "[t]he reference to
'systematic' … should be understood as covering all … type[s] of tariff treatment considered
together."457 We see no reason no t to accept the European Union's argument. The European
Union's panel request states in relevant part that "the legal instruments … systematically provide,
in relation to a significant number of tariff lines, for a type/structure of duty that varies from t he
type/structure of duty recorded in the Schedule in a way that leads to the application of duties in
excess of those provided for in the Schedule for those goods whenever the customs value is below
a certain level, in one of the two ways described above (in relation to the seventh, eighth, ninth,
tenth and eleventh measure at issue) ."458 The quoted sentence does not say that the relevant
legal instruments systematically provide for duty type/structure variation in respect of each of the
two ways identified in the panel request. This suggests to us that the word "systematically" in the
panel request is intended to describe the SDV as a single phenomenon, rather than describing two
parallel SDVs. We therefore consider that the two relevant ways of duty variati on that characterize
the SDV must be considered together when determining whether they are provided for
systematically. Accordingly, we will determine whether the European Union has established that
the relevant types of tariff treatment, considered together, are applied "systematically".
7.374. We have already explained that the term "systematic" as it appears in the panel request
has a meaning distinct from the phrase "a significant number of tariff lines". Therefore, the mere
fact that a certain type of tariff treatment is repeatedly accorded does not necessarily indicate the
existence of a system underlying that repetition. Indeed, observed repetition may be coincidental
or so diffuse or unstructured as to belie any suggestion of an underlying system, plan, or ganized
method or effort. However, it may in some cases be possible to infer the existence of a system
where the observed repetition is so substantial as to render it more likely than not that an
underlying system, plan, organized method or effort exists. It is important to be clear, however,
that in such cases the repetition is evidence from which the existence of an underlying system may
be inferred; it is not in itself the system.
7.375. The European Union's assertion that the Illustrative List of tariff lines is itself "proof" of the
measure's systematic nature suggests to us that we should begin our analysis by considering
whether the tariff lines submitted as evidence are so numerous as to make it more likely than not
that an underlying system exists. In thi s connection, we recall our determination above that the
European Union has demonstrated the existence of 23 relevant tariff lines. 459 As we have
noted, 21 of these tariff lines are examples of the first type of tariff treatment at issue (i.e. where
Russia a pplies a combined duty in respect of a tariff line bound in its Schedule in ad valorem
terms). The two remaining tariff lines – which are the tariff lines submitted by the European Union
in the context of its claims concerning the tenth and eleventh measur es at issue – are examples of
the second type of tariff treatment.

454 Russia's second written submission, para. 78.
455 Russia's comments on the European Union's responses to Panel question Nos. 106-107.
456 Russia's response to Panel question No. 109.
457 European Union's response to Panel question No. 107.
458 European Union's request for the establishment of a panel, para. 11. (emphasis added)
459 We recall that the European Union has submitted the Illustrative List only to illustrate, rather than to
comprehensively encapsulate, the SDV. However, our analysis can take into account only tariff lines allegedly
affected by the SDV of whose existence we have evidence.

7.376. In our view, an assessment of whether 23 tariff lines justify the inference that the relevant
types of tariff treatment are being accorded "systematically" cannot be meaningfully undertake n
by considering these 23 tariff lines in absolute terms. Rather, to determine whether observed
repetition is more or less common or frequent, we think it would be appropriate, as a conceptual
matter, to compare the frequency with which the relevant types of tariff treatment have been
accorded in the present dispute with the total number of tariff lines in respect of which the
relevant type of tariff treatment could potentially have been applied (that is, the universe of all
possibly affected tariff lines). If the difference were small, then it might be justified to infer that
the relevant types of tariff treatment have been applied systematically.460
7.377. The European Union has not provided arguments or evidence regarding the universe of all
possibly affected tar iff lines. We note that it is possible to conceive of more than one potentially
relevant universe. One possible approach would be to compare the 23 tariff lines allegedly affected
by the SDV against the number of all tariff lines contained in the CCT. Howe ver, that approach
does not accord well with the European Union's description of the SDV as affecting only tariff lines
with duty rates that are bound in either ad valorem form (x%) or a particular type of combined
form ("z%; or x% but not less than y per unit; whichever is the lower"). It would therefore be
questionable to take account of any tariff lines in the CCT with duty rates bound in specific form.461
Accordingly, we do not find the entire CCT to be an appropriate comparator.
7.378. An alternative approac h would be to compare the 23 tariff lines to the total number of
tariff lines contained in the CCT for which the bound duty rate is expressed in either ad valorem or
the relevant combined duty form, that number being a sub -group of all the tariff lines contained in
the CCT in respect of which duty variation from relevant bound duty rates could have occurred.
Ultimately, however, we need not decide whether this alternative approach, or any other
approach, would be an appropriate comparator. This is because t he European Union has not
provided the relevant information. Without evidence as to the universe of all potentially relevant
tariff lines in the CCT, we are unable to assess whether the 23 tariff lines at issue establish that
the CCT accords the relevant t ypes of tariff treatment so commonly or frequently as to justify our
inferring the existence of an underlying system, plan, or organized method or effort.
7.379. It is appropriate in this context to address the European Union's reliance on the Appellate
Body's de cision in Argentina – Textiles and Apparel . According to the European Union, the
Appellate Body in that case found an inconsistency with Article II:1 with respect to all relevant
tariff categories to which the measure at issue applied, even though the comp laining party had
only submitted evidence relating to 118, or at most 124, out of approximately 940 relevant tariff
lines.462 According to the European Union, the Appellate Body's findings in that case were based on
evidence relating to a minority of the aff ected tariff lines. 463 In the European Union's view, we
should follow the same approach in respect of our examination of the SDV.464
7.380. We do not disagree with the European Union's summary of the findings of the Appellate
Body in Argentina – Textiles and Apparel. However, the passages relied on by the European Union
relate to the Appellate Body's findings on the consistency of the measure at issue with the covered
agreements, and do not concern the existence of the measure at issue. Indeed, as the European
Union acknowledges, in Argentina – Textiles and Apparel both the measure itself and its scope of
application were "described in a set of distinct documents" 465, and accordingly there was no
uncertainty as to the measure's existence. In contrast, we are dealing with an unwritten measure

460 If the difference is large, it would not normally be justified to infer solely on the basis of the number
of instances of relevant tariff treatment that that tariff treatment has been applied systematically. However, it
may be possible to demonstrate systematic application in other ways, for example by showing that the
individual instances form part of a system, plan, or organized method or effort.
461 We focus on the bound duty rates because it is to these rates that Russia is required under Article
II:1 to conform. We also recall that the panel request indicates in relevant part that the SDV involves "a
type/structure of duty that varies from the type/structure of duty recorded in the Schedule". European Union's
request for establishment of a panel, para. 11. (emphasis added) Thus, it is the type or structure of the duty
rates in the CCT that departs from the type or structure of the bound duty rates.
462 European Union's first written submission, para. 141; second written submission, para. 100.
463 European Union's second written submission, para. 100.
464 European Union's first written submission, para. 142.
465 European Union's first written submission, para. 142; European Union's opening statement at the
second meeting of the Panel, para. 51.

that is alleged to be of a systematic nature. As we have said, we cannot lightly accept assertions
concerning the existence of an unwritten measure of a particular nature. Moreover, we consider
that the inferences that can be drawn fr om given numbers of tariff lines will of necessity depend
on the particular circumstances of each case.
7.381. In the present dispute, what is to be demonstrated is the systematic nature of the SDV. By
definition, the systematic nature is an attribute of the mea sure as a whole, not of each individual
instance of relevant duty variation that is said to be connected to other such instances by a
system. As we have said, if inferences are to be drawn solely based on numbers of tariff lines, it is
only if the demonstr ated number is sufficiently substantial that it can be inferred that an
underlying system exists. This situation contrasts with that facing the Appellate Body in
Argentina – Textiles and Apparel, where the Appellate Body found that the measure at issue, on
account of its "structure and design" 466, resulted in an inconsistency with Article II:1(b), first
sentence, in respect of numerous specific tariff categories and then proceeded to extend the scope
of its finding of inconsistency to all other relevant tarif f categories. It appears to us that in that
dispute, considering additional tariff categories would merely have provided further confirmation of
something that the Appellate Body already considered to have been established, namely that the
measure at issue by virtue of its design and structure would result in inconsistencies with
Article II:1(b), first sentence. We therefore consider that the Appellate Body report in Argentina
- Textiles and Apparel does not support the proposition that a minority of tariff lines affected by
the SDV is necessarily sufficient to demonstrate the systematic nature of the SDV. In our view,
whether or not a minority of tariff lines is sufficient must be assessed on a case-by-case basis.
7.382. In the case at hand, we are unable to infer from the 23 demonstrated instances of relevant
tariff treatment that other tariff lines exist that have also been subjected to the particular types of
tariff treatment at issue. The European Union has not therefore established that the 23 tariff lines
are a minority of tariff lines affected by the SDV. Moreover, although we have found that 23 tariff
lines is a large and hence "significant" number of tariff lines in the circumstances of this dispute,
we lack evidence and explanation concerning the universe of potentially relevant tariff lines in the
CCT against which to compare the 23 tariff lines. In the light of this, the European Union in our
view has also not established that 23 instances of relevant tariff treatment are sufficiently
numerous to render it more likely than not that they are connected by a system, plan, or
organized method or effort.
7.383. As the 23 demonstrated instances of relevant tariff treatment in our view do not establish,
by themselves, that that tariff treatment is systematically appli ed, we now turn to consider
whether there is any other evidence before us to show that these and possibly other relevant
instances are connected or related such that they can be described as evidencing an underlying
system, plan or organized method or effort. In undertaking this analysis, we are not looking to see
whether the European Union has established the subjective intentions of the persons (if any) who
designed and put in place the alleged SDV. Rather, we inquire into whether the European Union
has d emonstrated that there exists some objective connection or relationship between the
identified instances of relevant tariff treatment that supports the inference that they form part of
an underlying system, plan or organized method or effort.
7.384. The European Union did not, in its first written submission, provide an explanation of what,
in its view, renders the application of the types of tariff treatment at issue "systematic". In order
to explore this issue, we addressed a number of questions to the European Union. The European
Union stated in this context that "[b]y examining the Illustrative List, a clear pattern emerges:
Russia did not make an error by imposing a combined duty instead of an ad valorem duty in a few
isolated instances, but has done so repea tedly, systematically, and in the same way ".467 The
European Union subsequently elaborated on this point in the following terms:
The connection between the individual instances of the SDV is clear: they all consist in
a particular kind of tariff treatment, a nd they are all embodied in individual tariff lines
in the CCT. Both those individual tariff lines and the CCT as a whole are written legal
instruments of general and prospective application. The tariff treatment, or its precise
content, is described disti nctly from the individual instances of the SDV, and the

466 Appellate Body Report, Argentina – Textiles and Apparel, para. 62.
467 European Union's response to Panel question No. 82. (emphasis original)

Illustrative List shows that it is actually applied in a significant number of instances.
That tariff treatment is widespread and ongoing, and has been accorded repeatedly to
a significant number of t ariff lines. It is likely to continue, if for no other reason,
because it is provided by the CCT which is a measure of general and prospective
application, i.e. stretching into the future.468
7.385. The European Union responded to another question in similar terms:
[T]he individual instances of the SDV – the tariff lines in the CCT – could all, in
themselves, be described as measures of general and prospective application. They
mandate customs authorities to levy duties in a particular way. They are all contained
in a single legally binding document of general and prospective application: the CCT.
No discretion is involved.469
7.386. The Panel notes that these passages identify four elements as constituting the
"connection" between the alleged individual instances: first, ea ch instance is an example of a
particular kind of tariff treatment; second, each instance is embodied (i.e. is written down) in the
CCT; third, each individual instance, and the CCT itself, is legally binding and has general and
prospective application; an d fourth, the relevant types of tariff treatment have been accorded
repeatedly.
7.387. We begin with the third element, which concerns the fact that the individual tariff lines in
the CCT that are allegedly affected by the SDV, and the CCT itself, are written an d legally binding
measures of general and prospective application. Those characteristics may be important when
considering the nature of each individual instance in itself. However, they do not, in our view, shed
any light on the relationship or connection between the individual instances or demonstrate how
they unite into an "overriding measure".470 Indeed, even tariff lines in the CCT that are not alleged
to be affected by the SDV exhibit those characteristics.
7.388. The first and second elements focus on the fa ct that all of the alleged individual instances
of the SDV are of a particular form or type, and are contained in the same legal instrument, the
CCT. The fourth element relates to the repeated application of the particular types of tariff
treatment to a nu mber of the tariff lines contained in the CCT. These elements in our view are
indeed evidence of repetition of the same phenomenon, that is to say, the repeated appearance in
the CCT of the relevant types of tariff treatment. However, these elements fail t o distinguish
between the identity of the SDV, as a distinct "overarching" measure, and its individual instances.
The SDV must have content other than, or additional to, the individual instances of repetition.
Mere repetition of certain types of tariff tre atment does not, without more, show that the relevant
tariff lines are connected to each other by a system. 471
7.389. We are mindful of the fact that we are dealing with particular types of tariff treatment
contained in the CCT. These types of tariff treatment di d not, of course, appear spontaneously in
the CCT and they are therefore not purely accidental. However, this fact alone is in our view
insufficient to infer that the individual instances of relevant tariff treatment are connected to one
another in such a way as to show the existence of an underlying system, plan, method, or effort.
We note in this regard the European Union's statement that individual instances of the SDV can be
found in "at least Chapters 15, 39, 40, 84 and 87 of the CCT". 472 These chapters cover very
different agricultural and manufacturing products, including animal and vegetable oils, plastics,
rubbers, refrigerators, and motor vehicles. The European Union did not explain why the SDV

468 European Union's response to Panel question No. 85. The European Union stated along similar lines
that "[w]hat brings together all these instances of the SDV, which could all individually be characterized as
rules or norms of general and prospective application, is the type of tariff treatment that is accorded … In
practical terms, they are also all bound together by the simple fact that they are all contained in a single,
overarching written legal instrument – the CCT." European Union's response to Panel question No. 117.
469 European Union's response to Panel question No. 87.
470 European Union's response to Panel question No. 87.
471 As we have explained, repetition may be enough to demonstrate the existence of an underlying
system only where it is very extensive. We have already determined above that we are unable to agree,
without additional information, that 23 demonstrated instances constitute a sufficiently extensive repetition to
indicate the existence of an underlying system.
472 European Union's response to Panel question No. 81.

affects those chapters rather than others, and what, in its view, is the connection between the
sectors covered by those chapters beyond the fact that they cover tariff lines in respect of which
the CCT applies the relevant types of tariff treatment. Since a system, plan, or organized method
or effort is someth ing more than merely the sum of all its parts, it is in our view important to
articulate that system, plan, organized method or effort other than by merely describing the
individual instances of which it consists. Therefore, even accepting that the 23 inst ances of duty
type/structure variation identified by the European Union are the result of decisions establishing
the relevant duty rates, this element by itself does not demonstrate that it is more likely than not
that the resulting instances of duty varia tion are inter -connected and form part of a common
system, plan or organized method or effort.
7.390. Finally, we recall that the European Union has asserted that other individual instances of
the SDV exist, without, however, explaining where in the CCT those ad ditional instances could be
found.473 In response to a question from the Panel on this issue, the European Union stated that
the "instances [of the SDV] would be identifiable on the basis of the type of tariff treatment that is
accorded".474 This statement, ho wever, rather than shedding light on the connection, if any,
among the tariff lines allegedly affected by the SDV appears to assume the connection to be
demonstrated.
7.391. In sum, the European Union has not provided us with evidence or explanation sufficient to
establish that it is more likely than not that the demonstrated instances of relevant tariff treatment
are connected by a system, plan, or organized method or effort. Consequently, we conclude that
the European Union has failed to demonstrate that the types of tariff treatment at issue have been
"systematically" applied.
7.5.2.2.4 The SDV as a "general" practice
7.392. We now turn to consider the last of what we have identified as the definitional
characteristics of the SDV. This is the "general" character of the SDV.475
7.393. As we have observed above, the European Union's panel request refers to the SDV as a
"general practice".476 In its first written submission, the European Union again referred to the SDV
as a "more general measure" 477, and also characterized it as a "general phe nomenon".478 In its
opening oral statement at the Panel's first substantive meeting with the parties, the European
Union reaffirmed that it was challenging the SDV in "more general terms" 479, and explained that
the term "general", together with the term "systematic", refers:
[F]irst, to the fact that such variations , which lead to duties exceeding bindings, are
widespread and appear at numerous points throughout the CCT, so that they can be
described as individual instances of a more general measure. Second, th ose terms
refer to the nature of the European Union's claim – we ask for a general finding, and
not a finding on a list of individual tariff lines.480
7.394. In its opening oral statement at the Panel's second substantive meeting with the parties,
the European Uni on once again stated that the SDV is a "more general measure". 481 And in
response to a question from the Panel, the European Union explained that "[t]he SDV could be

473 Leaving aside whether it would be appropriate for us embark, on our own, on a search for additional
relevant instances, we note that the European Union has not submitted the CCT as evidence.
474 European Union's response to Panel question No. 81.
475 We note that, at this stage of our analysis, we are not inquiring whether the alleged SDV is the type
of measure that is or may be susceptible to challenge in WTO dispute settlement.
476 European Union's request for establishment of a panel, para. 11.
477 European Union's first written submission, para. 127.
478 European Union's first written submission, para. 133.
479 European Union's opening statement at the first meeting of the Panel, para. 90.
480 European Union's opening statement at the first meeting of the Panel, para. 17; response to Panel
question No. 9.
481 European Union's opening statement at the second meeting of the Panel, para. 50.

described as a single general measure that is reflected in a number of more specific rules or norms
of general and prospective application".482
7.395. Russia argues that while the European Union's challenge is aimed at the SDV as a single
general measure, all evidence provided by the European Union relates to instances of the SDV .
Russia also argues that the European Union failed to produce any justification as to why certain
duties set out in the CCT constitute a separate administrative practice or more general policy
separate from other duties.483
7.396. The Panel observes that the European Union has used the ter m "general" to describe a
number of aspects of its claim. Thus, it has referred to the SDV as a "general" practice reflected in
the CCT; it has indicated that it is seeking a "general" finding 484; and it has also stated that both
the SDV itself and its individual instances are measures of "general and prospective application".485
Although we recognize that these different aspects may be interrelated 486, we are concerned in
this part of our analysis with the first aspect – that is, whether, on the basis of evidence submitted
to us, we can conclude that the SDV, as described by the European Union, constitutes a "general"
practice.
7.397. As we have found above 487, the definitional term "general" indicates that the SDV is not
confined to particular parts of the CCT or specifi c tariff lines. With this interpretation in mind, we
now turn to assess whether this aspect of the SDV is borne out in the evidence before us. We have
already identified the evidence on which the European Union relies. In the present context, we find
the Illustrative List especially instructive, as it provides an indication of the scope of the alleged
SDV. The tenth and eleventh measures at issue are also relevant to the analysis, because they are
alleged instances of the SDV.
7.398. The Illustrative List includes tariff lines allegedly affected by the SDV from five chapters of
the CCT, i.e. chapters 15, 39, 40, 84, and 87. These numbers indicate, however, that the CCT
consists of at least eighty -seven chapters. We have seen no evidence that the relevant types of
tariff treatment appear in any of the additional chapters from which examples have not been
provided to us. In our view, it cannot properly be inferred from identified instances relating to only
five chapters of the CCT that the SDV is a "general" measure w hose effects are manifest
"throughout the CCT", rather than being limited to particular parts, or chapters, of that
instrument.
7.399. Similarly, although the Illustrative List identifies, as we have said, a number of tariff lines
whose existence the European Un ion has established, this does not, in our view, justify an
inference concerning the existence of affected tariff lines beyond those particular tariff lines. The
relevant tariff lines listed in the Illustrative List and those concerning the tenth and eleve nth
measures may be examples of a broader phenomenon, but they are not proof that other such tariff
lines exist in the CCT. We recall our finding above that the relevant types of tariff treatment have
been accorded to a "significant" number of tariff lines . This finding, however, provides no basis on
which to assume that the relevant types of tariff treatment go beyond these specific tariff lines.
Therefore, the evidence before us in our view does not demonstrate that the relevant types of
tariff treatment have been accorded to tariff lines in the CCT "generally", rather than being
confined to specific tariff lines.

482 European Union's response to Panel question No. 117.
483 Russia's comments on the European Union's response to Panel question No. 117; Russia's opening
statement at the second meeting of the Panel, para. 58.
484 See, e.g. European Union's first written submission, para. 131; second written submission, para. 99.
485 See, e.g. European Union's first written submission, para. 139; second written submission, para.
101. In its opening oral statement at the Panel's second meeting with the parties, the European Union stated
that "…each of the tariff lines which the SDV covers would in itself be a measure of general and prospective
application. Logically, the SDV, as a more general measure, can be no less." European Union's opening
statement at the second meeting of the Panel, para. 50. (emphasis added) In our view, this argument does not
concern the issue of the scope and coverage of the SDV, i.e. whether the SDV constitutes a general practice.
486 For example, it may very well be that a "general" measure covering a large number of tariff lines
would call for a "general finding", rather than a series of findings on discrete tariff lines.
487 See paragraph 7.335 above.

7.400. We do not overlook the fact that the Illustrative List was submitted by the European Union
to "illustrate" the existence of the SDV, rather than to comprehensively delimit its scope. However,
the European Union has not provided other evidence or explanation that would enable either the
Panel or Russia to identify which additional chapters or tariff lines are affected. Therefore, while
the Illustrative List, considered together with the tenth and eleventh measures, may be indicative
of a more widespread phenomenon, we have no evidentiary basis on which to make a finding to
that effect.
7.401. In the light of the foregoing considerations, we find that th e European Union has failed to
establish that the SDV is a "general" practice reflected in the CCT.
7.5.2.2.5 Overall assessment of the evidence
7.402. As we have explained, each of the definitional characteristics we have considered above is
constitutive of the SDV, an d we have therefore initially examined them separately. Since the
European Union has defined the SDV as a single measure, it is clear that the existence or non -
existence of any one of the definitional characteristics is legally meaningful only insofar as i t points
towards the existence or non-existence of the SDV.
7.403. In the preceding paragraphs, we found that the evidence submitted by the European Union
establishes the existence of two of the SDV's definitional characteristics: namely, that "certain
types of t ariff treatment" are accorded in the CCT in respect of a "significant number of tariff
lines". We also found, however, that the evidence fails to establish that the relevant tariff
treatment is accorded in a "systematic" fashion and that it has been accord ed in such a way as to
constitute a "general" practice reflected in the CCT. We have already explained that the non -
existence of one or more of the SDV's definitional characteristics would indicate that the SDV, as a
single, overarching measure, does not e xist. Therefore, because these two definitional
characteristics of the SDV have not been established, we can only conclude that the European
Union has failed to establish the existence of the SDV as a single, overarching measure.
7.5.3 Conclusion on the SDV
7.404. As we have explained above, the European Union has argued that the SDV is a measure of
a type that can be challenged in WTO dispute settlement. The European Union has further argued
that the SDV, as such, is inconsistent with Article II:1(b), first sentence, of the GATT 1994, and
consequently with Article II:1(a) of the same Agreement.
7.405. Russia has contested both of these positions.
7.406. In the light of the Panel's conclusion above that the evidence submitted by the European
Union fails to establish the existence of the SDV, the Panel need not, and does not, proceed to
consider these arguments. Because we have found that the European Union has not established
the existence of the SDV, there is no measure on which we could make any additional findings.
7.407. Accordingly, we conclude that, in respect of the twelfth measure at issue, the European
Union has failed to establish an inconsistency with Article II:1(b), first sentence. It necessarily
follows that the European Union has also failed to establish a consequential incon sistency with
Article II:1(a).
7.408. Finally, we observe that the European Union has not requested us to make findings on the
consistency with Article II:1 of each individual applied duty rate identified in the Illustrative List,
except for those that relate to the seventh to ninth measures. 488 We therefore do not separately
address the consistency of every applied duty rate identified in the Illustrative List, except for
those that relate to the seventh to ninth measures.

488 The European Union stated that "the individual 'violations' or, rather, individual instances of the SDV
need not be specifically and exhaustively identified. The only finding the Panel should adopt in respect of the
twelfth measure at issue is a single, general finding on the SDV." European Union's response to Panel question
No. 79.

8 CONCLUSIONS AND RECOMMENDATIONS
8.1. For the reasons set forth in this Report, the Panel concludes as follows:
a. In respect of Russia's preliminary ruling request:
i. the Panel finds that Russia failed to establish that the European Union's panel
request is inconsistent with Article 6.2 of the DSU and that the European Union's
claims covered by Russia's preliminary ruling request are outside the Panel's terms of
reference.
b. In respect of the European Union's claims regarding the first to fifth measures at issue,
which concern tariff lines 4810 22 900 0; 481 0 29 300 0; 4810 92 300 0;
4810 13 800 9; and 4810 19 900 0:
i. the Panel finds that Russia is required to apply ordinary customs duties in excess of
those set forth and provided in its Schedule of Concessions ("Schedule"), contrary to
Article II:1(b), first sentence; and
ii. the Panel exercises judicial economy in respect of the European Union's
consequential claim of inconsistency with Article II:1(a) of the GATT 1994.
c. In respect of the European Union's claims regarding the sixth measure at issue, which
concerns tariff line 4810 92 100 0:
i. the Panel finds that, on the date of the Panel's establishment, Russia was required to
apply, as from 1 January 2016, ordinary customs duties in excess of those set forth
and provided in its Schedule, contrary to Article II:1(b), first sentence;
ii. the Panel exercises judicial economy in respect of the European Union's
consequential claim of inconsistency with Article II:1(a) of the GATT 1994; and
iii. the Panel finds that the European Union has failed to establish that the sixth
measure at issue was , on the date of the Panel's establishment, independently
inconsistent with Article II:1(a) of the GATT 1994 because it imposed a temporary
duty reduction and at the same time provided for a future duty rate that, from 1
January 2016, would have exceeded the bound duty rate.
d. In respect of the European Union's claims regarding the seventh and eighth measures at
issue, which concern tariff lines 1511 90 190 2 and 1511 90 900 2:
i. the Panel finds that, on the date of the Panel's establishment, Ru ssia was required in
some instances to apply ordinary customs duties in excess of those set forth and
provided in its Schedule, contrary to Article II:1(b), first sentence; and
ii. the Panel exercises judicial economy in respect of the European Union's
consequential claim of inconsistency with Article II:1(a) of the GATT 1994.
e. In respect of the European Union's claims regarding the ninth measure at issue, which
concerns tariff line 8418 10 200 1:
i. the Panel finds that Russia is required in some instances to apply ordinary customs
duties in excess of those set forth and provided in its Schedule, contrary to Article
II:1(b), first sentence; and
ii. the Panel exercises judicial economy in respect of the European Union's
consequential claim of inconsistency with Article II:1(a) of the GATT 1994.
f. In respect of the European Union's claims regarding the tenth and eleventh measures at
issue, which concern tariff lines 8418 10 800 1 and 8418 21 800 0:

i. the Panel finds that, on the date of the Panel's establishment, Russia was r equired in
some instances to apply ordinary customs duties in excess of those set forth and
provided in its Schedule, contrary to Article II:1(b), first sentence; and
ii. the Panel exercises judicial economy in respect of the European Union's
consequential claim of inconsistency with Article II:1(a) of the GATT 1994.
g. In respect of the European Union's claims regarding the twelfth measure at issue (the
alleged "Systematic Duty Variation"):
i. the Panel finds that the European Union failed to establish its claims o f inconsistency
with Article II:1(a) and (b), first sentence, because it did not demonstrate the
existence of the "Systematic Duty Variation", that is, a measure constituting a
general practice and consisting in the systematic application, in relation to a
significant number of tariff lines, of a type or structure of duty that varies from the
type or structure of duty recorded in the Schedule in a way that leads to the
application of duties in excess of those set forth and provided in Russia's Schedule.
8.2. Pursuant to Article 3.8 of the DSU, in cases of failure to comply with obligations assumed
under a covered agreement, that failure is considered prima facie to constitute a case of
nullification or impairment of benefits accruing under that agreement. Conseq uently, the Panel
finds that, to the extent that Russia has failed to comply with certain provisions of the GATT 1994,
that failure constitutes a case of nullification or impairment of benefits accruing to the European
Union under that agreement.
8.3. Pursuant to Article 19.1 of the DSU, to the extent that the first to eleventh measures
continue to be inconsistent with Article II:1(b), first sentence, of the GATT 1994, the Panel
recommends that Russia bring them into conformity with its obligations under the GATT 1994.489