UNITED STATES – CUSTOMS BOND DIRECTIVE FOR MERCHANDISE SUBJECT TO ANTI-DUMPING/COUNTERVAILING DUTIES
Document: Notification of an Appeal by India under Article 16.4 and Article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and under Rule 20(1) of the Working Procedures for Appellate Review
Date: 22 April 2008
Document codes: WT/DS345/9
Complainant: India
Respondent: U.S.
Third parties: Brazil, China, EU, Japan, Thailand
Dispute stage: Appellate Body
Agreements cited: Art. 18.1, 1, 2.2, 2.3, 2.4, 7.1, 7.2, 7.4, 7.5, 9.1, 9.2, 9.3, 18.4, 18.5  Anti-dumpingArt. VI:2, VI:3, VI, X:1, X:2, I, II:1, XIII  GATT 1994Art. 32.1, 10, 1, 14, 32.5  Subsidies and Countervailing Measures (SCM)Art. XVI:4  Agreement Establishing the World Trade Organization

UNITED STATES – CUSTOMS BOND DIRECTIVE FOR MERCHANDISE SUBJECT TO
ANTI-DUMPING/COUNTERVAILING DUTIES

Notification of an Appeal by India

under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 20(1) of the Working Procedures for Appellate Review

 The following notification, dated 17 April 2008, from the Delegation of India, is being
circulated to Members.

Pursuant to Articles 16.4 and 17 of the Understanding on Rules and Procedures Governing
the Settlement of Disputes (the "DSU") and Rule 20 of the Working Procedures for Appellate Review,
India hereby notifies its decision to appeal to the Appellate Body certain issues of law covered in the
Report of the Panel on United States – Customs Bond Directive for Merchandise Subject to
Antidumping/ Countervailing Duties () (the “Panel Report”) and certain legal
interpretations developed by the Panel in this dispute.

At issue is the enhanced bond requirement (the “EBR”) imposed by the United States on
importers of certain frozen warmwater shrimp fro m India subject to anti-dumping duties imposed by
the United States. The United States has imposed th e EBR pursuant to certain instruments specified
in paragraph 2.2 of the Panel Report which, for convenience, are referred to collectively as the
“Amended CBD”.

India seeks review by the Appellate Body of the following errors of law and of legal
interpretation by the Panel:

1. The Panel erred in its conclusion (and re lated findings) that Article VI of the General
Agreement on Tariffs and Trade 1994 (the “GATT 1994”) read in conjunction with Articles 1
and 18.1 of the Agreement on Implementation of Article VI of the General Agreement on
Tariffs and Trade 1994 (the “Anti-Dumping Agreement”) permits responses to dumping other
than (a) definitive duties, (b) provisional measures and (c) price-undertakings.
1 In particular:

(a) The Panel erred in finding that the Appellate Body’s conclusions in US –
Antidumping Act of 1916 2 and U S – C D S O A3 that the permissible responses to
dumping are limited to definitive anti- dumping duties, provisional measures and

1 See Panel Report, paras. 7.62 - 7.77.
2 Appellate Body Report on United States – Anti-Dumping Act of 1916 , WT/DS136/AB/R,
WT/DS162/AB/R, adopted 26 September 2000 (“U.S.-Antidumping Act of 1916”).
3 Appellate Body Report on United States-Continued Dumping and Subsidy Offset Act of 2000 ,
WT/DS217/AB/R, WT/DS234/AB/R, adopted on 27 January 2003 (“U.S.-CDSOA”).

price-undertakings, are mere dicta because, in those Reports, the Appellate Body did
not even refer to the provisions of Note 1 Ad paragraphs 2 and 3 of Article VI of the
GATT 1994 (the “Ad Note”).
4 The Panel’s failure to follow the Appellate Body’s
conclusions in previous disputes on the same issue is inconsistent with its function
under Article 3.2 of the DSU of ensuring “security and predictability to the
multilateral trading system” and under Article 3.3 of ensuring the “prompt settlement
of situations” and, further, is inconsistent with its obligation under Article 11 to make
an objective assessment of the matter.

(b) The Panel erred in finding that the phrase “the provisions of the GATT 1994 , as
interpreted by this Agreement” in Article 18.1 of the Anti-Dumping Agreement was
simply designed to clarify that the re levant provision of the GATT 1994 is Article
VI.
5

2. The Panel erred in its conclusion (and rela ted findings) that, in principle, the EBR was
authorized by the Ad Note because the Anti-Dumping Agreement did not prohibit it. 6 I n
particular:

(a) The Panel erred in rejecting India’s ar gument that the Ad Note was implemented
through Article 7 of the Anti-Dumping Agreement and could not be applied
independently of Article 7 by finding that the Ad Note was not “… expressly limited
to provisional measures taken prior to a final determination of dumping”.7

(b) The Panel erred also in finding that, while in the case of the prospective system of
assessment of anti-dumping duties, the phrase “final determination” in the Ad Note
could be interpreted as the final determination that precedes the decision to impose
duties,
8 in the case of the retrospective syst em followed by the United States, the
same phrase could be interpreted as the “det ermination of the final liability for the
payment of anti-dumping duties” referred to in Article 9.3.1 of the Anti-Dumping
Agreement.9

(c) Further, the Panel erred in finding that, fo r purposes of taking security under the Ad
Note, under the retrospective system of asse ssment followed by the United States, the
anti-dumping duty order at the end of the original investigation and again at the end
of each new assessment review gave rise to a suspicion of dumping with respect to
import entries into the United States after each such anti-dumping duty order and such
suspicion lasted until the subsequent assessme nt review with respect to such import
entries, in which both the existence and amount of dumping could be determined with
precision.
10

3. The Panel erred in its conclusion (and re lated findings) that the Amended CBD was not
inconsistent as such with the provisions of (a) Articles 1 and 18.1 of the Anti-Dumping
Agreement and (b) Articles 10 and 32.1 of the SCM Agreement.
11 In particular:

4 See Panel Report, para. 7.76.
5 See Panel Report, para. 7.73 and footnote 113.
6 See Panel Report, paras. 7.71 – 7.84; 7.86 – 7.90; 7.95 – 7.107; 7.116 – 7.118 and footnotes 111-114.
7 See Panel Report, paras. 7.91 – 7.95.
8 See Panel Report, para. 7.86.
9 See Panel Report, paras. 7.86 – 7.87.
10 See Panel Report, paras. 7.80 – 7.87.
11 See Panel Report, paras. 7.236 – 7.238.

(a) The Panel did not make an objective assessment of the matter before it in accordance
with the requirements of Article 11 of the DSU when it concluded that the Amended
CBD was discretionary in character.
12

(b) The Panel also erred in concluding th at every application of the EBR under the
Amended CBD would not necessarily constitute an impermissible specific action
against dumping or subsidization, as the case may be.
13

4. The Panel erred in concluding that the Amended CBD was not inconsistent with the
provisions of Article 18.4 of the Anti-Dumping Agreement and of Article 32.5 of the SCM
Agreement.14 In the event that the Appellate B ody concludes that the Amended CBD is
inconsistent as such with the pr ovisions of (a) Article 18.1 of the Anti-Dumping Agreement
and (b) Article 32.1 of the SCM Agreement, India requests the Appellate Body to complete
the analysis and rule in India’s favour that the Amended CBD is inconsistent with the
provisions of Article 18.4 of the Anti-Dumping Agreement and of Article 32.5 of the SCM
Agreement also.

5. The Panel erred in its conclusion (and re lated findings) that the Amended CBD was not
inconsistent either as such
15 or as applied 16 with the provisions of Articles 9.1, 9.2, 9.3 and
9.3.1 of the Anti-Dumping Agreement and was not inconsistent as such with the provisions of
Articles 19.2, 19.3 and 19.4 of the SCM Agreement.17 In particular:

(a) The Panel erred in finding that the defin ition of the term “duty” in Article 9 of the
Anti-Dumping Agreement is not broad enough to encompass cash deposits.18

(b) The Panel erred in finding that the statement of the Appellate Body in U.S. – Zeroing
(Japan)
19 that, under the retrospective system of assessment, “… [a]t the time of
importation, an administering authority may collect duties, in the form of cash
deposits, on all export sales ….” constituted obiter dictum.
20

6. The Panel erred in its conclu sion (and related findings) that ce rtain provisions of U.S. law,
i.e., 19 U.S.C. §1623 and 19 C.F.R. §113.13, did not form part of the Panel’s terms of
reference.
21

7. Further, in the event that the Appellate Body upholds the Panel’s conclusion that the Ad Note
authorized the imposition of the EBR in principle, India considers that the Panel erred in its
conclusion (and related findings ) that the United States did not have any obligation to assess
the risk of default by importers prior to imposing the EBR.
22

8. The Panel also erred in its conclusion (and related findings) that it was permissible for the
United States to defend the EBR under Article XX(d) even though the Panel had found the

12 See Panel Report, paras. 7.216 – 7.222; 7.227.
13 See Panel Report, paras. 7.225 – 7.227; 7.236.
14 See Panel Report, para. 7.271.
15 See Panel Report, paras. 7.262 – 7.263.
16 See Panel Report, paras. 7.97 – 7.105; 7.159 – 7.161.
17 See Panel Report, para. 7.264.
18 See Panel Report, paras. 7.98 – 7.106 and para. 7.160.
19 Appellate Body Report on United States – Measures Relating to Zeroing and Sunset Reviews,
WT/DS322/AB/R, adopted on 23 January 2007 (“U.S – Zeroing (Japan)”).
20 See Panel Report, para. 7.101.
21 See Panel Report, paras. 7.181 – 7.196.
22 See Panel Report, paras. 7.118 and footnote 148.

EBR to be a specific action against dumping wh ich was not in accordance with the provisions
of the GATT 1994.
23

9. In the event that the Appellate Body concludes that Article XX(d) of the GATT 1994
remained available to the Unite d States to justify the EBR, India considers that the Panel
nevertheless acted inconsistently with its oblig ation under Article 11 of the DSU to make an
objective assessment of the matter before it when it found that, for the purpose of considering
the defence of the United States under Article XX(d), the law or regulation at issue was 19
U.S.C. §1673e(a)(1) read together with 19 U.S.C. §1673e(b)(1), 19 U.S.C. §1673, 19 C.F.R.
§351.212(b)(1) and 19 C.F.R. §351.211(c)(1).
24

In sum, India considers that the Panel erred in law in the interpretation and application of Articles 1,
7, 9.1, 9.2, 9.3, 9.3.1, 18.1 and 18.4 of the Anti-Dumping Agreement, of Articles 10, 19.2, 19.3, 19.4,
32.1 and 32.5 of the SCM Agreement , of Article VI, the Ad Note and Article XX(d) of the GATT
1994 and of Articles 3.2, 3.3 and 11 of the DSU.