CHINA – MEASURES AFFECTING TRADING RIGHTS AND DISTRIBUTION SERVICES FOR CERTAIN PUBLICATIONS AND AUDIOVISUAL ENTERTAINMENT PRODUCTS
Document: Notification of an Appeal by China 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: 23 September 2009
Document codes: WT/DS363/10
Complainant: U.S.
Respondent: China
Third parties: Australia, EU, Japan, South Korea, Taiwan
Dispute stage: Appellate Body
Agreements cited: Part I, para. 5.2  Protocol of AccessionArt. XI:1, III:4  GATT 1994Art. XVII, XVI  Services (GATS)Part I, para. 1.2, Part I, para. 5.1  Protocol of Accession

CHINA – MEASURES AFFECTING TRADING RIGHTS
AND DISTRIBUTION SERVICES FOR CERTAIN PUBLICATIONS
AND AUDIOVISUAL ENTERTAINMENT PRODUCTS

Notification of an Appeal by China

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 22 Septembe r 2009, from the Delegation of the People's
Republic of China, is being circulated to Members.

 Pursuant to Article 16.4 and Article 17 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate
Review, China hereby notifies its decision to appeal to the Appellate Body certain issues of law
covered in the Panel Report in (, as amended by
), and certain legal interpretations developed by the Panel in this Report.
1

1. China seeks review by the Appellate Body of the Panel's legal c onclusions set out in
paragraphs 7.913 and 8.2(a)(i) and (ii)
2 of the Panel Report that China's measures 3 are not justified
under Article XX(a) of the General Agreement on Tariffs and Trade 1994 ("GATT 1994"). The Panel
committed errors of law and legal interpretation in concluding that none of the relevant measures are
"necessary" to protect public morals, within the meaning of Article XX(a) of the GATT 1994. In
particular:
1) The Panel erred in law and failed to make an objective assessment of the
matter before it, in violation of Article 11 of the DSU, in considering that the
state-ownership requirement in Article 42 of the Publications Regulation
makes no material contribution to the protection of public morals in China.4
2) To the extent that it based its findings on its reasoning concerning Article 42
of the Publications Regulation, the Panel also erred in law in considering that
the exclusions relating to foreign-invested enterprises in Articles X.2 and X.3

1For ease of reference, China hereafter refers to this Report as the "Panel Report".
2China makes reference to sub-section (a) under paragraph 8.2 on page 466 of the Panel Report.
3The Catalogue and the Foreign Investment Regulation (Articles X.2 and X.3 as well as Articles 3
and 4); the Several Opinions (Article 4) ; the Publications Regulation (Article 42 in conjunction with Article 41,
and Article 41); the 2001 Audiovisual Products Regulation (Article 27); the Audiovisual Products Importation
Rule (Article 8); and the Audiovisual (Sub-)Distribution Rule (Article 21).
4See, e.g., Panel Report, paras. 7.850, 7.852–7.863.

of the Catalogue, Articles 3 and 4 of the Foreign Investment Regulation ,
Article 4 of the Several Opinions and Article 21 of the Audiovisual
(Sub-)Distribution Rule make no material contribution to the protection of
public morals in China.
5
3) The Panel erred in interpreting Article XX(a) of the GATT 1994 as requiring
the Panel to also weigh the restrictive impact that the measures at issue may
have on those wishing to engage in impor ting, in particular on their right to
trade.6
4) The Panel committed errors of law and legal interpretation, and failed to
make an objective assessment of the fact s, in violation of Article 11 of the
DSU, in considering that at least one of the alternative measures referred to
by the United States was an alternative "reasonably available" to China.7
Should the Appellate Body reverse the Panel's findi ngs that China's measures are not "necessary" to
protect public morals, within the meaning of Article XX(a) of the GATT 1994, China requests that the
Appellate Body complete the Panel's analysis and fi nd that China's measures are fully justified under
Article XX(a) of the GATT 1994.
2. China seeks review by the Appellate Body of the Panel's legal conclusions set out in sub-
section 3.(b)(i) of section VIII of the Panel Report 8 that the Circular on Internet Culture (Article II),
the Network Music Opinions (Article 8), the Several Opinions (Article 4) and Article X:7 of the
Catalogue, in conjunction with Articles 3 and 4 of the Foreign Investment Regulation , are
inconsistent with Article XVII of the GATS. The Pa nel's legal conclusions are based on errors of law
and legal interpretation in applying the customary rul es of interpretation of public international law as
codified in Articles 31 and 32 of the Vienna Convention on the Law of Treaties ("the Vienna
Convention"), to China's GATS schedule. Such errors led, inter alia , to the erroneous finding that
China's schedule to the GATS includes specific co mmitments on the electronic distribution of sound
recordings in non-physical form under Sector 2.D "sound recording distribution services", contrary to
Articles 3.2 and 19.2 of the DSU.
9 In particular:
1) The Panel erred in its analysis of the ordinary meaning to be given to the
terms "sound recording distribution services", taken in their context and in
light of the object and purpose of the Treaty.
10
2) The Panel erred in concluding that an analysis of China's GATS schedule
based on supplementary means of interpretation under Article 32 of the
Vienna Convention confirmed its earli er analysis, under Article 31 of the
Vienna Convention, of China's commitment on sound recording distribution
services.
11

5See, e.g., Panel Report, paras. 7.851, 7.864–7.868.
6See, e.g., Panel Report, paras. 7.787–7.788, 7.847–7.849, 7.862–7.863, 7.867–7.868.
7See, e.g., Panel Report, paras. 7.886–7.909.
8Panel Report, page 467.
10See, e.g., Panel Report, paras. 7.1173–7.1220.
11See, e.g., Panel Report, paras. 7.1221–7.1247.

3) Consequently, the Panel erred in la w in finding that China's measures 12 are
inconsistent with China's national treatment commitments under Article XVII
of the GATS.
3. China seeks review by the Appellate Body of the Panel's legal conclusions, set out in
paragraphs 7.576, 7.598, 7.599, 7.7 06 and sub-section 2.(c)(ii), (iii), (vi) and (vii) of Section VIII of
the Panel Report,13 that Article 30 of the Film Regulation and Article 16 of the Film Enterprise Rule
are inconsistent with China's trading rights commitments under China's Accession Protocol. The
Panel's conclusions are based on errors of law and le gal interpretation, and on a failure to make an
objective assessment of the facts before it, contrary to Article 11 of the DSU. Such errors led, inter
alia, to the erroneous finding that the challenged meas ures are inconsistent with certain provisions of
China's Accession Protocol, contrary to Articles 3.2 and 19.2 of the DSU. In particular, the Panel
erred in concluding that China's trading rights commi tments are applicable to the Chinese measures at
issue, despite the fact that these measures do not re gulate hard-copy cinematographic film, which is
the subject of the US claim.14
4. China seeks review by the Appellate Body of the Panel's legal c onclusions set out in
paragraphs 7.706 and sub-section 2.(d)(i), (ii), (v), (v i) and (x) of section VIII of the Panel Report that
Article 5 of the Audiovisual Products Regulation and Article 7 of the Audiovisual Products
Importation Rule are inconsistent with China's trading rights commitments under China's Accession
Protocol. The Panel's findings concerning these m easures are based on the same reasoning as the one
on which the Panel based its findings concerning Article 30 of the Film Regulation and Article 16 of
the Film Enterprise Rule.15

12The Circular on Internet Culture (Article II); the Network Music Opinions (Article 8); the Several
Opinions (Article 4); and the Catalogue (Article X:7, in conjuncti on with Articles 3 and 4 of the Foreign
Investment Regulation).
13Panel Report, pages 464–465.
14See, e.g., Panel Report, paras. 7.528–7.560, 7.584.
15See, e.g., Panel Report, paras. 7.649–7.651, 7.674.