UNITED STATES – CUSTOMS BOND DIRECTIVE FOR MERCHANDISE SUBJECT TO ANTI-DUMPING/COUNTERVAILING DUTIES
Document: Report of the Panel
Date: 29 February 2008
Document codes: WT/DS345/R
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

Report of the Panel

I. INTRODUCTION
A. COMPLAINT OF INDIA
1.1 On 6 June 2006, India requested consultations with the United States pursuant to Article 4 of
the Understanding on Rules and Procedures Governing the Settlement of Disputes ("the DSU"),
Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994"), Article 17 of
the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
(the "Anti-Dumping Agreement") and Article 30 of the Agreem ent on Subsidies and Countervailing
Measures (the " SCM Agreement") with respect to certain measures imposed by the United States on
imports of certain frozen warmwater shrimp from India 1. India and the United States held
consultations, which failed to resolve the dispute.
1.2 On 13 October 2006, India requested the establishment of a panel pursuant to Article XXIII
of the GATT 1994, Articles 4 and 6 of the DSU, Article 17 of the Anti-Dumping Agreement and
Article 30 of the SCM Agreement.2
1.3 At its meeting on 21 November 2006, the Disput e Settlement Body (the "DSB") established a
Panel pursuant to the request of India in documen t , in accordance with Article 6 of the
DSU.
1.4 The Panel's terms of reference are the following:
"To examine, in the light of the relevant provisions of the covered agreements cited
by India in document , the matter referred to the DSB by India in that
document, and to make such finding s as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements."
3
1.5 At its meeting on 26 October 2006, the DSB also established a Panel pursuant to the request
of Thailand in document , which dealt substantially with the same matter.
1.6 On 19 January 2007, India requested the Director-General to determine the composition of
the Panel, pursuant to Article 8.7 of the DSU. This paragraph provides:
"If there is no agreement on the panelists within 20 days after the date of the
establishment of a panel, at the request of either party, the Director-General, in
consultation with the Chairman of the DSB and the Chairman of the relevant Council
or Committee, shall determine the com position of the panel by appointing the
panelists whom the Director-General consid ers most appropriate in accordance with
any relevant special or additional rules or procedures of the covered agreement or
covered agreements which are at issue in th e dispute, after consulting with the parties
to the dispute. The Chairman of the DSB shall inform the Members of the
composition of the panel thus formed no later than 10 days after the date the
Chairman receives such a request."
1.7 India also requested the Director General to select the same persons to serve as panelists for
both DS343 and DS345, in accordance with Article 9.3 of the DSU, which provides:

1 WT/DS345/1.
2 WT/DS345/6.
3 WT/DS345/7.

"If more than one panel is established to ex amine the complaints related to the same
matter, to the greatest extent possible the same persons shall serve as panelists on
each of the separate panels and the timetab le for the panel process in such disputes
shall be harmonized."
1.8 On 26 January 2007, the Director-General composed the Panel as follows:
 Chairperson: Mr. Michael Cartland

 Members: Mrs. Enie Neri de Ross
 M r . G r a h a m S a m p s o n

1.9 Brazil, China, the European Communities, Jap an, and Thailand reserved their rights to
participate in the Panel proceedings as third parties.
4
1.10 The Panel held the first substantive meeting with the parties on 6 and 7 June 2007. The
session with the third parties took place on 7 June 2007. The Panel's second substantive meeting with
the parties was held on 24 and 25 July 2007.
1.11 On 4 September 2007, the Panel issued the Descrip tive Part of its Panel Report. The Interim
Report was issued to the parties on 9 October 2007 a nd the Final Report was issued to the parties on
13 November 2007.
II. FACTUAL ASPECTS
2.1 This dispute concerns the implementation of the enhanced continuous bond requirement
(hereafter the "EBR") 5 by the United States and its application to certain frozen warmwater shrimp
imported from India. India presents claims both as such and regarding its application.
A. THE ENHANCED CONTINUOUS BOND REQUIREMENT (THE "EBR")
2.2 On 9 July 2004, US Customs and Border Pr otection (hereafter "US Customs") amended its
existing bond requirements to include new guideli nes specific for "covered cases" within "special
categories" of merchandise. The EBR has b een imposed pursuant to the Customs Bond
Directive 99-3510-004 on Monetary Guidelines for Setting Bond Amounts issued on 23 July 1991
(the "1991 Customs Bond Directive"), as amende d by the Amendment to Bond Directive 99-3510-
004 for Certain Merchandise Subject to Antidumpi ng/Countervailing Cases (hereafter the "July 2004
Amendment")6, the document entitled "Clarification to Ju ly 9 2004 Amended Monetary Guidelines
for Setting Bond Amounts for Special Categories of Merchandise Subject to Antidumping and/or
Countervailing Duty Cases" (hereafter the "August 2005 Clarification")
7, the document entitled
"Current Bond Formulas" posted by US Custom s on its website on 24 January 2005 (hereafter
"Current Bond Formulas") 8, and the Notice published in the United States Federal Register entitled
Monetary Guidelines for Setting Bond Amounts fo r Importations Subject to Enhanced Bonding
Requirements (hereafter the "October 2006 Notice"). 9 The July 2004 Amendm ent, the August 2005
Clarification, the document Current Bond Form ulas and the October 2006 Notice is referred to
collectively as the "Amended CBD". US Customs has identified as a primary objective of the

4 WT/DS345/7.
5 In its Request for Establishment of the Panel, India uses the term "Continuous Bond Requirement",
instead of EBR to refer to the measure at issue.
6 Exhibit IND-3.
7 Exhibit IND-4.
8 Exhibit IND-5.
9 Exhibit IND-6.

directive, "continued vigilance ... to ensure collection of all appropriate anti-dumping and
countervailing duties."10 On 1 February 2005, US Customs impl emented the EBR with respect to all
imports of certain frozen warmwater shrimp s ubject to anti-dumping duties (hereafter "subject
shrimp").11 Prior to 1 February 2005, the United States had also sent notices to 33 importers
beginning on 6 August 2004, of which 12 importers furnis hed enhanced bonds. 12 T o d a t e ,
"agriculture/aquaculture merchandise" is the only merchandise designated as a "special category" and
"shrimp covered by anti-dumping or countervaili ng duty cases" is currently the only "covered case"
designated within the agriculture/aquaculture category.
B. IMPOSITION OF CONTINUOUS BONDS AND OTHER SECURITY REQUIREMENTS IN THE CONTEXT
OF THE US RETROSPECTIVE ANTI -DUMPING AND COUNTERVAILING DUTY ASSESSMENT
SYSTEM
2.3 According to the United States, the EBR in co mbination with cash deposits is imposed to
ensure payment of anti-dumping or countervailin g duties under its retrospective duty assessment
system. Unlike the systems employed in many other countries, the US retrospective system
determines final liability for anti-dumping and countervailing duties 12 months following the
anniversary month of the relevant anti-dumping dut y order after merchandise is imported into the
country at the end of assessment or "administrative" reviews.
13 Certain of the following aspects of the
US system discussed below, may prove relevant to an objective assessment of India's claim.
1. Overview of anti-dumping and countervailing duty procedures
2.4 Under the US retrospective duty assessment syst em, the United States determines, through an
investigation, whether margins of dumping or co untervailable subsidisation exist, and whether
dumped imports or countervailable subsidisation cause or threaten to cause material injury to a
domestic industry. During the preliminary phase of the investigation, the US International Trade
Commission (hereafter "USITC") determines whether a reasonable indication exists that an industry
in the United States is materially injured, whether a reasonable indication exists that an industry in the
United States is threatened with material injury, or whether the establishment of an industry in the
United States is materially retarded by reason of subject merchandise investigated. USDOC also
preliminarily determines whether a reasonable basis exists to believe that dumping or countervailable
subsidisation is occurring. If USDOC makes an affi rmative determination, it will issue a preliminary
determination, which permits the imposition of provisional measures, historically in the form of a
cash deposit, bond, or other security requirement, to ensure payment if anti-dumping or countervailing
duties are ultimately imposed. The preliminary dete rmination sets forth ad valorem cash deposit rates
for producers/exporters individually investigated, as well as an "all-others" rate applicable to all other
producers/exporters. Subsequently, USDOC makes a final determination as to whether dumping or
countervailable subsidisation is occurring. If this de termination is affirmative and USITC also issues
a final determination that imports of subject merchandise in the investigation were causing material
injury to the US domestic industry or threatening with material injury, or that the establishment of an
industry in the United States is materially reta rded by reason of subject merchandise in the
investigation, thereafter USDOC issues a public notice, denominated under US law as an anti-
dumping or countervailing duty order. In the an ti-dumping or countervailing duty order, the US

10 Exhibit IND-3.
11 US Customs applied the EBR to all importers of subject shrimp under an anti-dumping order from
Brazil, China, Ecuador, India, Thailand, and Viet Nam on 1 February 2005. See Notice of Amended Final
Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Frozen Warmwater
Shrimp from India, 70 Fed. Reg 5147 (1 February 2005), Exhibit IND-13.
12 See United States' responses to First Set of Panel Questions, paras. 34-35.
13 See generally Title VII of the Tariff Act of 1930, 19 U.S.C. § 1671 et seq.; see also 19 C.F.R. §
351.101 et seq.

Department of Commerce sets fo rth ad valorem cash deposit rates for producers/exporters
individually investigated, as well as an "all-others" ra te applicable to all other producers/exporters.
Pursuant to the order, importers must post a cash deposit of estimated anti-dumping or countervailing
duties for each import transaction. This cash depos it is based on the overall margin of dumping or
countervailable subsidisation found for the exporter or producer during the investigation phase.
2.5 During the anniversary month following a final determination in the investigations phase,
importers, exporters, producers, a nd domestic interested parties ma y request that USDOC conduct an
assessment review, often referred to as an "adminis trative review" of the import transactions that
occurred in the prior year. During this review, US DOC analyses all of the import transactions for the
period of review (i.e., the prior 12 months) to determine the final amount of the anti-dumping or
countervailing duty payable on imports from each pr oducer or exporter for which USDOC received a
request for review.
2.6 Upon USDOC's completion of an administrative review, US Customs a pplies the assessment
rate provided by USDOC to the customs value of each entry to determine the amount of final liability.
If the amount of the cash deposit is greater than the amount of final liability, US Customs refunds the
amount collected in excess of the final liability, together with interest on the excess amount.
Alternatively, if the amount of final liability ex ceeds the amount of the cash deposit, US Customs
issues a bill to the importer for payment of the diffe rence in the amounts together with interest on the
difference in the amounts. During the administrative review, USDOC may establish a new cash
deposit rate for each producer or exporter, on the basis of that producer or exporter’s transactions over
the period of review. This new ad valorem cash deposit rate will be applied to future imports from the
producer or exporter. USDOC analyses the import transactions of each producer or exporter subject
to the review to calculate a new cash deposit rate going forward. For those entries not covered by a
request for an administrative review, USDOC instructs US Customs to assess anti-dumping or
countervailing duties at the cash deposit rate required upon entry.
2.7 Due to the design of the US retrospective system, the dumping or subsidisation calculations in
the administrative review are based on different transactions than those evaluated during the
investigation. The investigation evaluates the pric ing behaviour of producer s and exporters based on
transactions completed during a period of time prior to the initiation of the anti-dumping or
countervailing duty investigation. In contrast, an administrative review evaluates pricing behaviour
during later time periods.
14 As a result of this, the dumping or subsidisation margins calculated in the
administrative review may be either higher or lower than the margins calculated in the investigation.
According to the United States, the EBR attempts to ensure full collection of anti-dumping or
countervailing duties by securing against the possibili ty that the margin will increase from the time of
the investigation until calculation of the final duty liability during the administrative review, and that
importers will default on payment of increased duties.15
2. Timeline for anti-dumping and countervailing duty procedures
2.8 Under US law, USDOC has a finite period to complete its anti-dumping or countervailing
duty investigation and issue an anti anti-dumping or countervailing duty order, if any. USDOC may
extend the deadlines for the preliminary and final de terminations, but cannot extend the investigation
beyond 407 days. US law provides that USDOC ordinarily must complete an administrative review
within 365 days. USDOC may extend the deadlines for issuing preliminary and final results of the

14 The first administrative review evaluates transactions occurring from the date of imposition of
provisional measures (if any) in the preliminary determination through the end of the twelve-month period
following imposition of the anti-dumping duty order, generally a period of 18 months. All subsequent
administrative reviews generally evaluate transactions occurring during the preceding 12 months.
15 United States' Responses to First Set of Panel Questions, para. 58.

assessment review, but the review may not excee d 545 days. Specifically, the following is an
overview of applicable time limits:
• In the petition phase of an anti-dumping or coun tervailing duty investig ation, USDOC has 20
days (which may be extended to 40 days, only in the case of an anti-dumping investigation) to
determine whether to initiate an investigation after it receives a petition to investigate dumping
or countervailable subsidisation.
• In the preliminary phase of an anti-dumping or countervailing duty in vestigation, after
USDOC initiates the investigation, USITC has 45 days (which may be extended to 65 days)
from the date the petition is filed to make a pre liminary injury determination. If USITC makes
a preliminary affirmative injury determinati on, then USDOC has 140 days (which may be
extended to 190 days) in the case of a dumping investigation, or 65 days (which may be
extended to 130 days) in the case of a counterva ilable subsidisation investigation, from the
date it initiated the investigation to make its preliminary determination of the existence of
dumping or countervailable subsidisation.
• In the final phase of an anti-dumping or countervailing duty investigation, USDOC has 75
days (which may be extended to 135 days, onl y in the case of an anti-dumping investigation)
from its preliminary determination to make a final determination of the dumping or
subsidisation margins of investigated pr oducers and exporters. If USDOC makes an
affirmative final determination, USITC has until 45 days (which may be extended to 75 days)
after USDOC’s final determination to make its final injury determination. If the USITC makes
an affirmative final injury determination, USDOC issues an anti-dumping or countervailing
duty order.
• One year after the date the anti-dumping or c ountervailing duty order is issued, and during the
anniversary month of the order every year thereafter, interested parties may request that
USDOC conduct an administrative review of individual producers or exporters. After
initiating this review, USDOC is required to issue preliminary results of the actual margin of
dumping or subsidisation for the entries of the reviewed producer or exporter during the period
of review within 245 days (which may be exte nded to 365 days) after the last day of the
anniversary month. USDOC then must issue the final results within 120 days (which may be
extended to 180 days) after the preliminary results are published.
C. I
MPLEMENTATION OF THE AMENDED CONTINUOUS BOND DIRECTIVE (THE "AMENDED CBD")
2.9 Following issuance of the anti-dumping duty orde r on imports of certain frozen warmwater
shrimp on 1 February 2005, US Customs began re quiring subject shrimp importers to maintain
enhanced bond coverage additional to the cash security required on each entry, in compliance with the
Amended CBD.16
2.10 Generally, to satisfy US Customs bond requireme nts, any importer of goods subject to an
anti-dumping or countervailing duty order may obtain either a single entry bond, covering a single
entry, or a continuous bond, which provides security for all entries filed by the bond principal during
the period of time covered by the bond, typically one year. US Customs may also require additional
security if US Customs believes that acceptance of an entry secured by a continuous bond would

16 As indicated in para.2.2, the United States sent notices to 33 importers prior to publication of the
anti-dumping order on 1 February 2005 beginning on 6 August 2004, of which 12 importers furnished enhanced
bonds prior to 1 February 2005.

impair US Treasury revenue collection.
17 Previously, under the 1991 Customs Bond Directive,
importers subject to an anti-dumping or counterva iling duty order that selected the continuous bond
option only needed to post a customs bond equal to the greater of $50,000 or 10 per cent of the duties,
taxes, and fees paid during the preceding year, rounded to the nearest multiple of $10,000. After
publication of the Amended CBD, however, US Cu stoms implemented the EBR and required select
importers of merchandise designa ted as "covered cases" to provide continuous customs bonds in
excess of amounts established under the 1991 Customs Bond Directive and in addition to cash
deposits of estimated anti-dumping duties per entry. Thus, under the Amended CBD, in addition to a
minimum of $50,000 or 10 per cent of the duties, taxes, and fees paid during the preceding year, US
Customs requires importers subject to the EBR to secure a bond for an amount equal to the USDOC
cash deposit rate in effect on the date of entry of the merchandise multiplied by the importer's value of
imports from the previous year, as well as pay cash deposits equal to the amount of anti-dumping
duties per entry. The Amended CBD does not apply to single entry bonds.
2.11 As noted, subject shrimp is currently the only category of merchandise subject to the EBR.
2.12 The following hypothetical example illustrat es the combined total security obligations
imposed on Indian shrimp importers subject to the EBR, including bond and cash deposit
requirements:
(a) An importer of Certain Frozen Warmwate r Shrimp from India subject to the "all
others" anti-dumping duty rate imports US$1 million
 of subject shrimp during the
previous 12 months.
(b) The value of subject shrimp entered in the present transaction amounts to
US$ 10,000.
(c) The Bound rate under Harmonized Tariff Sc hedule (HTS) headings 0303.13.00 and
1605.20.10 is 0 per cent.
(d) The USDOC anti-dumping duty "all-others" rate (pursuant to anti-dumping order) is
10.17 per cent.
(e) US Customs applies the Amended EBR formula to the existing importer without
making adjustments based on an individualized determination.
 Obligation Description Amount
1. Normal Duties: As per a 0 per cent bound rate under
HTS headings $0
2. Cash Deposit for Anti-dumping
Duties:
Upon issuance of an anti-dumping order
but prior to an administrative review, US
Customs orders the posting of a cash
deposit based on the "all-others" rate.
18
$1,017

17 See 19 C.F.R. § 113.13(d). US Customs administers the powers under section 113.13(d) in
accordance with 1991 Customs Bond Dire ctive, which provides that "a bond may be demanded with a limit of
liability amount greater than that comput ed using this formula, provided suffic ient evidence of high risk is on
hand to support the higher amount".
18 See 19 C.F.R. § 351.211(a). If no administrativ e review is requested, anti-dumping duties will be
assessed at the cash deposits rate for estimated anti-dumping duties as established in the anti-dumping Order and
required on that merchandise at the time of entry. (See 19 C.F.R. § 351.212(c)).

 Obligation Description Amount
3. Continuous Bond Amount: 19
Basic Bond + EBR amounts ( see 3(a) +
(b) below), rounded up by increments of
$10,000 up to $100,000, and then by
increments of $100,000.
$200,000
3(a). Basic Bond Amount:
The greater of either $50,000 or 10
per cent of the duties, taxes, and fees
paid during the preceding year,
rounded.
20
$50,000
3(b). EBR Amount:
100 per cent of anti-dumping duty rate
established in final Order or most recent
administrative review * value of imports
in previous 12 months.
$101,700
4. Total Obligations: = 1. + 2. + 3.
$200,000 continuous
bond (covering all
shipments in one year
period) + $1017 cash
deposit per shipment
of $10,000

2.13 The Amended CBD authorizes US Customs to u se the standard formula or instead make
individualised bond determinations for subject I ndian importers to determine bond amounts. The
Amended CBD (specifically the August 2005 Clar ification and the October 2006 Notice), provides
that US Customs may reconsider bond amounts for individual importers on a case-by-case basis to
ensure that duties are collected. However, in order to receive a reduction in the overall bond coverage
via an individualized bond determination, an importer must so request, and may submit information
on its financial condition related to the risk of non-co llection for that importer. US Customs will then
determine bond amounts based on the financial info rmation supplied by the importer, US Customs
records on compliance history of the importer, the importer's or principal's ability to pay, and other
relevant information available to US Customs. Thus, the October 2006 Notice provides that,
"[a]bsent exceptional circumstances, the above formulas will determine the bond amounts where a
submission has not been made by the principal".
21 To date, the US has indicated that it received 27
requests for individualized bond determinations, of which it has reviewed 22 requests and has granted
no reductions to three importers, reductions of 25 per cent to eleven importers, 45 per cent to one
importer, 75 per cent to two importers, 80 per cent to one importer and 85 per cent to two importers.22

19 A continuous bond amount secures multiple transactions during its validity. In place of a continuous
bond, an importer may elect to post a single-transaction bond, which is equal to the total entry value of
merchandise plus all applicable duties, taxes, and fees.
20 See the 1991 Customs Bond Directive, which fixes a minimum continuous bond amount of $50,000
and establishes the following formula: (1) In the case of 0 to $1 million duties/taxes, the bond limit of liability is
fixed in multiples of $10,000 nearest to 10 per cent of duties, taxes and fees paid during the preceding calendar
year; or (2) in the case of duties/taxes over $1 million, the bond liability is fixed in multiples of $100,000
nearest to 10 per cent of duties, taxes and fees paid during the preceding year.
21 See Exhibit IND-6.
22 See United States' responses to First Set of Pa nel Questions, para. 38; Exhibit US-12. The GAO
Report, Exhibit IND-26, p. 42 indicates that the number of shrimp importers totalled 550 through June 2006.
Exhibit US-17 refers to 530 shrimp importers in 2004.

2.14 The enhanced continuous bonds provided pursuan t to the Amended CBD are released when
final liability for anti-dumping duties on goods cove red by the bond is assessed, and upon liquidation
of the import entries made in account of the goods.
23 As explained in section II.B above, if an
administrative review is requested, final liability for anti-dumping or countervailing duties will be
determined through such a review. If an administ rative review is not requested, final liability will
equal the margin of dumping or subsidy published in the final determination; however, this liability
will not be assessed until the conclusion of the time period for requesting an administrative review.
D. THE IMPACT OF THE ENHANCED CONTINUOUS BOND REQUIREMENT (THE "EBR") ON SUBJECT
SHRIMP IMPORTERS
2.15 Following the application of the EBR, subject shrimp importers have faced significantly
higher security obligations than previously to en ter merchandise. Specifically, as explained above,
subject shrimp importers must satisfy both th e Basic Bond and the EBR as well as provide cash
deposits equal to the anti-dumping duty rate establis hed in the final determination. Additionally,
India submits that sureties have also "typically" re quired subject shrimp importers to post collateral
equal to 100 per cent of the EBR to secure the increased bond amounts. 24 The United States contends
that evidence presented to this Panel does not s upport the conclusion that a majority of companies
eligible to act as sureties on bonds securing obligations to US Customs has required certain importers
of subject shrimp to post collateral equal to 100 per cent of the EBR. 25 India further submits that
subject shrimp importers/exporters have also be en required to pay associated fees to secure the
increased bond amounts. 26 Due to the fact that enhanced bonds are deemed valid for 12-month
periods of liability, but are not released until fi nal liability has been assessed for anti-dumping duties
on the goods covered by the bond, shrimp importers/e xporters subject to the EBR have also had to
furnish concurrent enhanced bonds and concurrent rounds of collateral for bonds covering distinct 12-
month periods of liability. In the context of the additional security, collateral and fee obligations, the
Government Accountability Office (hereafter "USGAO") in a report (the "USGAO Report") 27
concluded that subject importers /exporters have likely had to fo rgo other commercial opportunities,
although the effects of the EBR could not be fully isolated from other changes occurring at the same
time.28 The USGAO Report also indicated that some im porters have required exporters to export on a
Delivery Duty Paid ("DDP") basis, thereby making the exporter, as the importer of record, responsible
for customs bond requirements. 29 The parties disagree on the impact of the increased security

23 Under 19 USC § 1675(b), once the administering authority orders liquidation of entries pursuant to a
review, goods are liquidated within 90 days after the instructions to Customs are issued, in most cases.
24 In its Request for Review of the Interim Report, paragraph 4, India refers to the following statement
by the US Court of Internationa l Trade (hereafter "USCIT") in NFI v. US (Exhibit IND-16, p. 38.): "the
testimony of witnesses for two plaintiffs relating to the requirements imposed on plaintiffs seeking new term
bonds corroborates the finding that sureties typically requi re 100 percent collateral in the situations occasioned
by the new bonding requirements." See also Exhibit IND-15, which contains, among other documents, a request
for collateral from an Indian shrimp importer.
25 See United States' Request for Review of the Interim Report, para. 4. See also Exhibit US-13, which
lists companies to act as sureties on bonds securing obligations to US Customs.
26 The United States has emphasized that, as a third party beneficiary to the contract between the surety
and the bond principal, it is not itself a party to the cont ract, and thus does not set market-based fees charged by
sureties or receive payments: see also United States' first written submission, paras. 8 and 11.
27 Government Accountability Office, Customs' Revised Bonding Policy Reduces Risk of Uncollected
Duties, but Concerns about uneven Implementation and Effects Remain (hereafter, "USGAO Report"), GAO-
07-50 (Washington D.C.: October 2006), Exhibit IND-26.
28 See USGAO Report, pp. 6, 24 and 35, Exhibit IND-26; see also NFI v. US, Exhibit IND-16, p. 31.
29 See USGAO Report, p. 6, Exhibit IND-26. See al so United States' second written submission, para.
30, wherein the United States contends that the use of a DDP basis rather than Cost, Insurance and Freight (CIF)
one does not affect the costs borne by the importer of record.

requirements and related collateral requirements and fees on the year-on-year volume of shrimp
imports into the United States.30
2.16 In October 2006, USGAO concluded in the US GAO Report that the Amended CBD criteria
were not transparent or consistently applied. 31 On 13 November 2006, the US Court of International
Trade (hereafter "USCIT") ruled that US Custom s appeared to have discretion under US law to
consider potential anti-dumping or counterva iling duty in setting continuous bond amounts 32;
however, it concluded that the administrative record supported the conclusion that the plaintiffs are
likely to demonstrate that US Customs arbitrarily and capriciously selected the anti-dumping orders
on shrimp as the only "covered case" of merchandise 33, and that the application of the Amended CBD
to the eight complaining importers was arbitrary and capricious.34 For this reason, the USCIT issued a
preliminary injunction status quo in favour of eight of the 20 co mplaining importers, prohibiting the
enforcement of any side agreements that limited importation 35, and ordered US Customs to review the
sufficiency of certain EBR bonds amounts in excess of $1,500,000 posted by the eight complaining
importers in the case.
36 The USCIT's final decision on the merits of the complainants' legal claims is
pending. After the GAO Report was issued but pr ior to publication of the USCIT's ruling, US
Customs published the Amended CBD criteria in th e October 2006 Notice, which further described
the process for obtaining individualized bond amounts.
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1 India requests the Panel:
(a) to find that the laws, rules and regulati ons of the United States that authorize the
imposition of the EBR and the instruments comprising the Amended CBD are
inconsistent as such with the provisions of: 37
(i) Article 18.1 of the Anti-Dumping Agreement together with Article VI:2 of the
GATT and Article 1 of the Anti-Dumping Agreement because the EBR is a
specific action against dumping not in accordance with the provisions of the
Anti-Dumping Agreement;
(ii) Article 18.4 of the Anti-Dumping Agreement , Article 32.5 of the
SCM Agreement and Article XVI:4 of the WTO Agreement because the
United States has not complied with its ob ligation to ensure conformity of its
laws, regulations and administrative procedures with the provisions of each
of these agreements;
(iii) Article 32.1 of the SCM Agreement together with Article VI:3 of the
GATT 1994 and Article 10 of the SCM Agreement because it is a specific
action against subsidization not in accordance with the SCM Agreement;

30 See e.g. India's first written submission, para. 53; I ndia's first oral statement, para. 4; United States'
first written submission, para. 46.
31 See generally, USGAO Report, Exhibit IND-26.
32 See Exhibit IND-16, p. 42.
33 See Exhibit IND-16, p. 54
34 See Exhibit IND-16, p. 58.
35 See Exhibit IND-16, p. 73.
36 See Exhibit IND-16, p. 72.
37 India's first written submission, para. 115.

(iv) Articles VI:2 and VI:3 of the GATT 1994 because it secures duties, and
results in charges, in excess of the ma rgin of dumping or in excess of the
amount of the subsidy determined to have been granted, as the case may be;
(v) Articles 9.1, 9.2 and 9.3 (including Article 9.3.1) of the Anti-Dumping
Agreement and Articles 19.2, 19.3 and 19.4 of the SCM Agreement because
the EBR is imposed on top of, and in addition to, the collection of cash
deposits calculated on the basis of the rate of antidumping or countervailing
duties specified in the final determin ation which alone is permissible under
these provisions;
(vi) Article 7 of the Anti-Dumping Agreement and Article 17 of the
SCM Agreement because the EBR is applied:
– on the basis of a risk of default in collections and not because it is
judged necessary to prevent injury during the investigation as
required by Article 7.1(iii) of the Anti-Dumping Agreement and
Article 17.1(c) of the SCM Agreement;

– without regard to, and in excess of, the provisionally estimated
amount of duty:

• equal to the provisionally estimated dumping margin as required
by Article 7.2 of the Anti-Dumping Agreement; or
• equal to the provisionally calcula ted amount of subsidization in
Article 17.2 of the SCM Agreement;
– for a duration that is not limited to as short a period as possible as
required by Article 7.4 of the Anti-Dumping Agreement and Article
17.4 of the SCM Agreement;

(vii) The Ad Note to Article VI:2 and 3 of the GATT 1994 (the "Ad Note")
because the imposition of the EBR on top of the obligation to provide bonds
or make cash deposits for the payment of antidumping or countervailing
duties is not reasonable security for the payment of antidumping or
countervailing duties and because it is not imposed pending final
determination of the facts in any case of suspected dumping or subsidization;
(viii) Article 18.5 of the Anti-Dumping Agreement and Article 32.6 of the
SCM Agreement because the Amended CBD has made changes in the laws
and regulations and/or in the administration of the laws and regulations of the
United States that are relevant to these agreements and that were required to
be notified by the United States to the relevant Committees; and
(ix) Article I:1 and Article II:1(a) and (b) of the GATT 1994 to the extent that the
EBR results in a duty or charge imposed on or in connection with importation
or is a method of levying duties and charges or is a rule or formality in
connection with importation that is inconsistent with these provisions; or
(x) Alternatively, Article XI of the GATT 1994 to the extent that the EBR
constitutes a restriction on imports other than "a duty, tax or other charge".

(xi) India also claims a violation of Articles 2.2, 2.3 and 2.4 of the Anti-Dumping
Agreement38; Articles 1 and 14 of the SCM Agreement39; Article 7.5 of the
Anti-Dumping Agreement and 17.5 of the SCM Agreement40; Articles X:1 and
X:2 of the GATT 199441;
(b) For the same reasons, India also requ ests the Panel to find that the EBR as applied to
imports of shrimp from India is inconsistent with the provisions of Articles 1, 7.1(iii),
7.2, 7.4, 7.5, 9.1, 9.2, 9.3, 9.3.1 and 18.1 of the Anti-Dumping Agreement, of Article
X:3(a) and of Articles I:1, II:1(a) and (b) or, alternatively, of XI:1 and XIII of the
GATT 1994.42 India also claims a violation of Article VI:2 of the GATT 1994
(including the Ad Note); and Articles 2.2, 2.3 and 2.4 of the Anti-Dumping
Agreement.43
(c) Accordingly, India requests that the Pane l recommend to the DSB in accordance with
Article 19.1 of the DSU that the United States brings its measures into conformity
with the provisions of the Anti-Dumping Agreement , SCM Agreement and the
GATT 1994 within a reasonable period of time.44
3.2 The United States requests that the Panel reject India's claims for the reasons provided in its
first written submission.45
IV. ARGUMENTS OF THE PARTIES
4.1 The arguments of the parties as set forth in their executive summaries submitted to the Panel,
are attached to this Report as Annexes (see List of Annexes, page (vii)).
V. ARGUMENTS OF THE THIRD PARTIES
5.1 The arguments of the third parties as set fort h in their executive summaries submitted to the
Panel, i.e. Brazil, China, the Eu ropean Communities, Thailand and Jap an are attached to this Report
as Annexes (see List of Annexes, page (vii)).
VI. INTERIM REVIEW
6.1 On 9 October 2007, the Panel issued its Interi m Report to the parties. On 23 October 2007,
both parties submitted written requests for the review of precise aspects of the Interim Report. The
parties also submitted written comments on the other party's comments on 2 November 2007. Neither
party requested an interim review meeting.
6.2 In accordance with Article 15.4 of the DSU, this section of the Panel's Report sets out the
Panel's response to the arguments made at the inte rim review stage, wherever the Panel felt that
explanation was necessary. The Panel has also modi fied certain aspects of its Report in light of the
parties' comments wherever the Panel considered it necessary. Due to the factual similarities in the
disputes DS343 and DS345, the Panel wherever possi ble has modified the respective reports of these
two disputes in parallel. The Panel has also made a limited number of editorial corrections to the

38 Request for Establishment of the Panel, WT/DS345/6, para. (c).
39 Request for Establishment of the Panel, WT/DS345/6, para. (d).
40 Request for Establishment of the Panel, WT/DS345/6, para (g).
41 Request for Establishment of the Panel, WT/DS345/6, para. (j).
42 India's first written submission, para. 116.
43 Request for Establishment of the Panel, WT/DS345/6.
44 India's first written submission, para. 117.
45 United States' first written submission, para. 98.

Interim Report for the purposes of clarity and accu racy. References to sections, paragraph numbers
and footnotes in this Section VI relate to the Interim Report. Where appropriate, references to
paragraphs and footnotes to the Final Report are included.
A. I
NDIA'S COMMENTS ON THE INTERIM REPORT
1. Sequence of events surrounding implementation of the EBR
6.3 Regarding paragraph 2.2 and footnote 11, Indi a submits that US Customs began "official"
implementation of the EBR immediately after the introduction of the July 2004 Amendment and prior
to imposition of the anti-dumping order on certain frozen warmwater shrimp from India on 1 February
2005. India therefore requests that the Panel move text located in Footnote 11 into the main body text
in paragraph 2.2 to emphasize that the EBR was implemented for certain importers prior to 1 February
2005. The United States requests the Panel to reject India's suggestions. Although acknowledging
that 35 importers did receive notices prior to publication of the anti-dumping order, the United States
considers the notion that the receipt of these no tices constitutes "immediate implementation" to be
misleading. Taking both parties' comments into consideration, the Panel has moved information
contained in footnote 11 into the main body text , but has declined to designate these notices as
constituting "immediate" or "official" implementation.
2. One hundred per cent surety collateral requirements
6.4 Regarding paragraph 2.15, India submits that th e following statement is inaccurate: "at least
one or more of 250 companies eligible to act as sureties on bonds securing obligations to US Customs
has also required certain importers of subject shri mp to post collateral equal to 100 per cent of the
EBR plus associated fees to secure the in creased bond amounts". In reference to NFI v. US (Exhibit
IND-16, p. 38), India notes the USCIT's statement th at facts (in that case) support the inference that
sureties require up to 100 per cent security for the EBR. In particular, as India notes, the USCIT
indicated that testimony of witnesses for two plai ntiffs in that case corroborated the finding that
sureties typically require 100 per cent collateral to satis fy the EBR. In light of this statement, India
requests the Panel to modify the factual aspects of the report to reflect the USCIT's conclusion. The
United States requests the Panel to decline India's su ggestions due to the fact that the proceedings in
NFI v. US are ongoing, contain a different factual record and involve questions of US law (and not
WTO law). In particular, the United States notes that the findings in NFI v. US pertain to 8 importers
and should not be extrapolated. However, the Unite d States requests the Panel to include evidence
submitted by India and the United States on the issue of collateral requirements into the relevant
footnotes. Taking both parties' comments into cons ideration, the Panel has modified paragraph 2.15
in order to reflect the parties' views with respect to the overall effect of the EBR on all subject shrimp
importers/exporters from India, including additional references to Exhibit IND-15.
3. India's Article X:3(a) as such claim
6.5 Regarding paragraph 6.6, India requests that the Panel include a reference to India's as such
claim relating to Article X:3(a) of the GATT 1994. The United States requests the Panel to reject this
suggestion. The Panel notes that, in its Request for Establishment, India only claimed that the EBR as
applied to subject shrimp is inconsistent with Article X:3(a), and did not refer to this provision in
relation to its as such claims. Therefore, the Panel considers India's suggested modification without
basis and rejects it.
4. The relationship of the Ad Note and the Anti-Dumping Agreement
6.6 Regarding paragraphs 6.65 – 6.90, India request s that the Panel modify its discussion of the
relationship between the Ad Note and the Anti-Dumping Agreement to reflect India's arguments in its

second oral statement (see India's second oral statement, paras. 40-45). India argues that, based on
Article 31(3) of the Vienna Convention, the Ad No te must be interpreted in light of the context
provided by the Anti-Dumping and SCM Agreements. Specifically, India requests the Panel to modify
the statement in the third sentence of footnote 107 th at "India notes that the Ad Note is not expressly
implemented through the Anti-Dumping Agreement ". India would prefer, as provided in paragraph
6.80 of the Interim Report, that footnote 107 reflect India's argument that the Ad Note is implemented
through Article 7 of the Anti-Dumping Agreement. The United States considers India's arguments to
be fully addressed in paragraphs 6.91 – 6.107 in th e section entitled "contextual considerations". The
United States does not object to India's proposed changes to footnote 107, although it considers that
the Panel addressed India's argument in paragraphs 6.91 – 6.95 of the Interim Report.
6.7 The Panel has made the change requested by India in footnote 107 (113 of its Final Report).
5. Classification of Appellate Body reasoning as dicta in US – Zeroing (EC) and US –
Zeroing (Japan)
6.8 Regarding paragraph 6.101, India contends th at the Appellate Body's statements in US –
Zeroing (EC), footnote 184, regarding its comments on the US retrospective duty assessment system
found in footnote 109, are themselves based on the description contained in paragraph's 2.4-2.5 of the
US – Zeroing (EC) Panel Report and thus do not constitute dicta of the Appellate Body. Instead,
India contends that the Appellate Body is restating the Panel's analysis. India thus requests the Panel
to modify paragraph 6.101 of the Interim Report to reflect this. The United States disputes India's
assertion regarding footnote 184. The United States notes that obiter dictum is defined in Ballentine's
Law Dictionary (West Publishing, 3d. ed.) as "e xpressions in an opinion of the court which are not
necessary to support the decision". The United States submits that, the mere fact that the Appellate
Body based its comments on paragraphs in the Pane l report has no bearing on whether the Appellate
Body's comments were necessary to support its actual findings.
6.9 The Panel sees no need to make the change request ed by India. Given that panels themselves
may state dicta, and that the scope of an appeal may be narrower than the scope of panel proceedings,
the mere fact that the Appellate Body was restating the panel's analysis does not mean ipso facto that
the Appellate Body's statement does not constitute obiter dictum.
6. Text of footnote 203
6.10 Regarding footnote 203, India requests that the text be amended to read "In its first oral
submission, India notes that there is no substantiv e difference between amending a provision in a US
anti-dumping or countervailing duty statute to provide discretion, or simply extending the reach of a
customs statute, such as 19 USC. § 1623 to confer discretion". The United States considers this
proposed change unnecessary. Nevertheless, the Un ited States requests the Panel to use the term
"contends" instead of "notes" if it follows India's suggestion, since the verb "notes" could imply that
the statement is one of fact. The Panel has modified the text of footnote 203 (of the Final Report) to
read as follows: "In its first oral submission, Indi a contends that there is no substantive difference
between amending a provision in a US anti-dumpi ng or countervailing duty statute to provide
discretion, or simply extending the reach of a cu stoms statute, such as 19 USC. § 1623 to confer
discretion".
7. India's claims under the GATT 1994 and the United States' defence under Article XX(d)
of the GATT 1994
6.11 Regarding paragraphs 6.286 – 6.313, India requests that the Panel address whether the United
States should be permitted to defe nd the EBR simultaneously under the Ad Note and under Article
XX(d) of the GATT 1994, and in any case, whether it should be permitted to defend the EBR under

Article XX(d) since, India submits, the Panel found that Article VI of the GATT 1994 and the Anti-
Dumping Agreement read together constitute lex specialis. Finally, India requests the Panel to clarify
whether the United States should be permitted to defend the EBR under Article XX(d) without having
invoked footnote 24 of the Anti-Dumping Agreement. India requests the Panel to address these issues
as threshold considerations, and in the case that th e Panel considers it appropriate to evaluate the
United States' defence under Article XX(d), the Panel also evaluate India's as applied claims under
the GATT 1994.
6.12 The United States requests the Panel to reject I ndia's proposal to conduct a threshold analysis
regarding the appropriateness of its Article XX(d) defence. The United States contends that no basis
exists in the WTO Agreements to conclude that a Member may not defend a measure under Article
XX(d) simply because it also responds to a claim unde r the Ad Note. According to the United States,
the analysis under Article XX(d) is independent from that of the Ad Note. Furthermore, the United
States disagrees with India's assertion that the Panel should not consider Article XX(d) in view of its
findings regarding lex specialis. The United States notes that the Panel found that "Article VI of the
GATT 1994 and the Ad Note" constitute lex specialis, and not the Anti-Dumping Agreement. Finally,
the United States submits that it was not required to invoke footnote 24 of the Anti-Dumping
Agreement since the Panel has found the United States in breach of the Ad Note.
6.13 The Panel is of the view that a respondent in a WTO dispute may simultaneously respond to
claims presented by the claimant while also raising an affirmativ e defence under a relevant provision
in Article XX of the GATT 1994. The Panel notes that the text of the chapeau to Article XX of the
GATT 1994 reads: " ... nothing in this Agreement shall be construed to prevent the adoption or
enforcement by any contracting party of measures . .. " (emphasis added). This text does not on its
face limit a panel from considering an affirmativ e defence under Article XX where it has found a
violation under a provision of the GATT, including Article VI and/or the Ad Note. In this regard, the
Panel recalls its findings that the application of the EBR constitutes specific action against dumping
which is not in accordance with the provisions of the GATT 1994 since it is inconsistent with the Ad
Note. The Panel also considers it proper to analyse the United States' defence under Article XX
notwithstanding the finding presented in pa ragraph 6.171 that Article VI of the GATT 1994 and the
Ad Note to Article VI constitute lex specialis. In the findings, the Panel re fers to Article VI and its
Ad Note as lex specialis with respect to the other more general provisions of the GATT 1994 cited by
India. The Panel's findings with respect to the applicability of the principle of lex specialis do not
refer to a defence under Article XX(d) in order to jus tify a potential violation of Article VI and its Ad
Note. Accordingly, the Panel considers additiona l analysis of the United States' Article XX(d)
defence unnecessary and rejects India's request for re view of our findings on this issue. For the
foregoing reasons, the Panel considers it unnecessary to evaluate whether a Member must invoke
footnote 24 of the Anti-Dumping Agreement in order to assert an affirmative defence under
Article XX.
B. THE UNITED STATES' COMMENTS ON THE INTERIM REPORT
1. Typographical errors
6.14 Regarding paragraph 1.10, the United States requests replacing the phrase "24 and 25 July
200" with "24 and 25 July 2007". The Panel has corrected this typographical error.
6.15 Regarding paragraph 1.11, the United States requests replacing the phrase "9 September
2007" with "9 October 2007". The Panel has corrected this typographical error.
6.16 Regarding paragraph 2.10, the United States submits that US Customs designates importers of
certain merchandise, not importers, as "covered cases", and thus requests the Panel to modify the text

to read: "US Customs implemented the EBR and requ ired select importers of merchandise designated
as 'covered cases' ...". The Panel has corrected this error.
6.17 Regarding paragraph 6.20 (7.20 of the Final Report), the United States requests replacing the
phrase "the amendment as issue" with "the amendm ent at issue". The Panel has corrected this
typographical error.
2. Treatment of amendments as part of the measure at issue
6.18 Regarding paragraph 6.22, the United States constr ues the Panel's reference to the findings of
the Appellate Body in Chile – Price Band System as suggesting that, by merely including certain
language in a panel request regardi ng amendments to measures, a basis would exist to treat a measure
as part of the measure at issue and within the pane l's terms of reference. The United States requests
the Panel to remove the third and final sentences from the paragraph and base the analysis on the
nature of the measure in question. India consider s that the third and final sentences are consistent
with the rationale in Chile – Price Band System . The Panel has made minor modifications to the text
in paragraph 6.22 (7.22 of the Final Report) in order to reflect the rationale presented in Chile – Price
Band System that an amendment should not change the essence of the original measure into something
different than what was in force before its issuance.
3. Description of the United States' argument regarding Article 18.1 of the Anti-Dumping
Agreement
6.19 Regarding paragraph 6.37, the United States considers the Panel's description of the US
argument regarding Article 18.1 of the Anti-Dumping Agreement to be redundant with paragraph 6.34.
Thus, the United States requests the Panel to delete the paragraph in its entirety. The Panel has
deleted para. 6.37 of the Interim Report.
4. The EBR formula
6.20 Regarding paragraph 6.47 (7.46 of the Final Re port), the United States requests the Panel to
replace the phrase "the formula would be invalid" in the final sentence of this paragraph with "the
formula would not apply" to more accurately characterise the statute of the EBR formula in relation to
the directive. India considers the phrase "the form ula would be invalid" to be appropriate since the
formula in the Amended CBD is based on the an ti-dumping rate, which thus signifies that the
constituent elements of dumping are built into the formula.
6.21 The Panel has made the change requested by the United States .
5. The relationship between Article 9.3.1 of the Anti-Dumping Agreement and retrospective
duty assessment
6.22 Regarding paragraphs 6.86, 6.97 and note 114, th e United States requests the Panel to modify
language to more accurately reflect the relationship between Article 9.3.1 of the Anti-Dumping
Agreement and retrospective duty assessment. First, th e United States suggests that the Panel replace
the parenthetical that the system is "specifically authorised by Article 9.3.1" with "which is
specifically contemplated in Article 9.3.1)". Second, the United states suggests replacing the
parenthetical "(which Members are entitled to apply by virtue of Article 9.3.1 of the Anti-Dumping
Agreement)" with "(which is specifically contemplated by Article 9.3.1 of the Anti-Dumping
Agreement)". India requests the Panel to reject the United States' suggestions since the Panel's
rationale should be parallel to the reasoning in paragr aph 6.97. India submits that in paragraph 6.97,
the Panel concluded that there must be a source of authorisation for taking security. Accordingly,
India submits that the Panel should also identify a source of authorisation for the retrospective

assessment system, and if none, consider the c onsequences of such a finding. By merely
contemplating a retrospective assessment system, Indi a submits that it would be equally plausible to
presume the drafters had no intention of enabling Members to require security.
6.23 The Panel is not persuaded by India's comments, and therefore sees no reason not to make the
changes requested by the United States.
6. Characterisation of the "enhanced" bond requirement
6.24 Regarding paragraph 6.108 (7.108 of the Final Report), the United States suggests replacing
the term "extended" with "enhanced" to describe the bonds required under the Amended CBD.
6.25 The Panel has made the change requested by the United States.
7. The legal standard for determining whether or not the application of the EBR resulted
in "reasonable" security requirements
6.26 Regarding paragraphs 6.116 – 6.128, the United States proposes a number of changes to
language that, in its view, could be construed as in consistent with the Panel's positions elsewhere in
its Report. First, the United States proposes a number of changes to prevent the Panel from
incorrectly paraphrasing the reasonableness standard set forth in the Ad Note. In general, the United
States proposes to use the formulation "the likeli hood of rates increasing", as the United States
considers that the term "likely", or "likely amount " (as used by the Panel in the Interim Report),
suggests that a Member must demonstrate substantial certainty.
6.27 Second, the United States considers that the Pane l's use of the term "likely" in the Interim
Report’s discussion of increases in margins could be read to contradict its point elsewhere in the
report that the information on which security requireme nts must be evaluated is that available “at the
time that the [requirement]” is imposed, and not ex post rationalization.
46 The United States recalls
the Panel's statement in paragraph 6.82 of its In terim Report that, due to the operation of the U.S.
retrospective duty assessment system, “there is no ce rtainty that imports entering the United States
following imposition of an anti-dumping order are in fact dumped” and that until assessment “it is not
possible to state with certainty whether or not those imports are dumped.” Since likelihood would
need to be evaluated based on information available to the customs authority at the time the security
requirement is imposed, the United States has s uggested, for example, changing “determine the
amount” to “estimate the amount” in paragraph 6.118.
6.28 Third, the United States asserts that as in “o rdinary cases of customs administration”, there
may be cases in which an importer has a histor y of defaulting on its obligations such that additional
security may be the only means available to the Unite d States to ensure that duties are paid, short of
prohibiting that importer from entering goods entirely. The United States claims that the Panel failed
to address US arguments regarding risks of defau lt. The United States requests that the Panel
consider clarifying its findings to confirm that it is not finding that a Member is precluded from
requiring additional security in cases in which principles of ordinary customs administration would so
require, such as cases in which importers have a de monstrated history of non-payment of liability
owed.
6.29 The United States also asks the Panel to refer to estimates of the "amount" of final dumping
liability rather than estimates of the amount of the final "rate" of dumping. The United States asserts
that since security for antidumping duties (whether cash deposit or bond) is a quantity based on the
total dumping liability, which depends both on the ad valorem rate and the customs value of imports

46 Interim Report, para. 6.125.

entered at a given time, using the term “dumping lia bility” rather than the “rate of dumping” in
discussing the amount of security that may be required.
6.30 Regarding para. 6.122 of the Interim Report, the Un ited States asks the Panel to delete certain
language describing an argument made by the United States early in the proceedings.
6.31 India requests the Panel to reject the United St ates' suggestions. Regarding paragraph 6.117,
India considers changes suggested by the United Stat es to be inconsistent with its argument that the
final amount of liability is only established following an administrative review, as opposed to through
the anti-dumping order. Regarding the changes suggest ed for paragraphs 6.118, 6.119, 6.122, 6.128,
6.226 and 6.312, India submits that these changes are inconsistent with the level or rigour of analysis
that a Member must undertake before taking additi onal security, as discussed in paragraph 6.118.
India considers the proposed changes to be incons istent with the Panel's conclusion in paragraph
6.118, last sentence, that the rate in the anti-dum ping order remains the best estimate of suspected
dumping and a rigorous analysis is necessary to exceed this estimate. Regarding the changes
suggested for paragraph 6.122, India submits that the Panel should retain the United States' assertion
that "it is not uncommon for assessed duties to excee d cash deposits". India considers this statement
to be an omission by the United States, and its re moval is not justified b ased on footnote 29, which
qualifies this assertion. Further, India considers that reasoning in paragra phs 6.120 – 6.121 provide
support to reject the assertion that rates increased 33% of the time.
6.32 The Panel has made only a limited number of the changes requested by the United States
regarding this first issue. In particular, the Pa nel has declined the US suggestion to replace its own
language with references to "the likelihood of rates increasing", for the United States has failed to
properly explain the advantages of its formulation ove r that of the Panel. Generally, the Panel is
concerned that the changes proposed by the United States might weaken the standard that the Panel
applied, consistent with the Ad Note, in the present ca se. In particular, the Panel is not persuaded that
it is inappropriate to expect an investigating author ity to make determinations of what is likely to
happen in the future. The Panel is not persuaded by the US suggestion that the standard articulated in
the Interim Report would require ex post rationalization. The Panel considers that an investigating
authority is required to comply with the applicable standard by making a prospective determination of
the likelihood of rates of dumping increasing on the b asis of the information available to it at the
relevant time.
6.33 The Panel declines to make any changes in respect of the US comments on the need to
consider the risk of default as in “ordinary cases of customs administration”. The Panel considers that
it already addressed the principal argument of th e United States regarding risk of default in
footnote 140 of the Interim Report. The Panel declin es to further confirm that it is not finding that a
Member is precluded from requiring additional security in cases in which principles of ordinary
customs administration would so require. The Pane l's findings are based on its interpretation of the
Ad Note. The Panel does not have a mandate to co nsider whether or not additional security may be
imposed under principles of ordinary customs admi nistration. Although the Ad Note contains the
phrase "[a]s in many other cases in customs admini stration", the Panel considers that such phrase is
used for introductory purposes only. If such phrase had been intended to dictate the substantive
circumstances under which "reasonable security" could be imposed under the Ad Note, details of such
other cases of customs administration would have been spelled out in the Ad Note in detail.
6.34
 The Panel accepts the US request to refer to u se the term “dumping liability” rather than the
“rate of dumping”. This is because the amount of security is not merely a function of the rate of
dumping in the anti-dumping order, but also of the cu stoms value of the relevant imports. The Panel
is not persuaded by India's concern that such ch anges would be inconsiste nt with the US argument
that the amount of liability is established finally only in an administrative review and not in the anti-
dumping order. As noted at footnote 114 to the In terim Report, the final determination of dumping,

injury and causation is in fact the basis for collecting anti-dumping duties under prospective
assessment systems. Regardless of when liability is actually deemed to arise, Article 9.3.1 of the
Anti-Dumping Agreement stipulates that, under both the pros pective and retrospective assessment
systems, "[t]he amount of the anti-dumping duty shall not exceed the margin" of dumping. The Panel
has modified paras 6.117 and 6.118 of the Interim Report accordingly. The Panel has not modified
the reference to "the likely amount of such increase" in para. 6.119 of the Interim Report, in order to
maintain consistency with the identical phrase in para. 6.118 of the Interim Report (in respect of
which the United States did not ask the Panel to include references to duty liability).
6.35 Regarding paragraph 6.226, the United States re quests the Panel to modify the penultimate
sentence to incorporate modifications suggested fo r paragraphs 6.116-6.218. Specifically, the United
States requests that the Panel replace phrasing "that anti-dumping liability was likely to increase" with
the phrase "that there was a likelihood that anti-dumping liability would increase". For the reasons set
forth above in respect of paras 6.116 – 6.128, the Pa nel declines to make the changes requested by the
United States.
6.36 Regarding paragraph 6.312, the United States re quests the Panel to modify the fourth and
sixth sentences to incorporate modifications suggested for paragraphs 6.116 – 6.128. Specifically, the
United States requests that the Panel replace the phr ase "that rates of dumping provided for in the
anti-dumping order were likely to increase" with the phrase "that there was a likelihood that rates of
dumping provided for in the anti-dumping order woul d increase"; and the phrase "without adequately
establishing that anti-dumping duties are likely to in crease" with the phrase" without adequately
establishing that there was a likelihood that an ti-dumping duties would increase". For the same
reasons discussed above, India requests the Panel to re ject this change. For the reasons set forth above
in respect of paras 6.116 – 6.128, the Panel declin es to make the changes requested by the United
States.
6.37 The Panel has made the deletion requested by th e United States in respect of paragraph 6.122
of the Interim Report (7.122 of the Final Report), since such deletion does not impact negatively on
the integrity of its findings.
8. Challenges to mandatory measures under the "mandatory/discretionary" distinction
6.38 Regarding paragraph 6.208, the United Stat es requests the Panel to delete the phrase
"challenged and" from the last sentence to better re flect the Panel's observations in the subsequent
paragraph regarding the import of the "mandatory/discretionary" distinction. The Panel does not find
this change appropriate, and thus declines to amend the text.
6.39 Regarding paragraph 6.226, the United States re quests the Panel to modify the penultimate
sentence to incorporate modifications suggested fo r paragraphs 6.116-6.218. Specifically, the United
States requests that the Panel replace phrasing "that anti-dumping liability was likely to increase" with
the phrase "that there was a likelihood that anti-dumping liability would increase". For the reasons set
forth above in respect of paras 6.116 – 6.128, the Pa nel declines to make the changes requested by the
United States.
9. Consistency between DS343 and DS345
6.40 The Panel has also made a number of changes to paras 6.98, 6.109, 6.121 and footnote 143 of
the Interim Report, to maintain consistency with its findings in United States – Measures Relating to
Shrimp from Thailand (DS 343). The Panel included paragraph 7.81 in its Final Report for the same
reason.

VII. FINDINGS
A. PRELIMINARY ISSUES
1. Parallel panel proceedings in DS343 and DS345
7.1 This Panel was established by the DSB at its meeting on 21 November 2006. One month
earlier, on 26 October 2006, the DSB had establishe d a separate Panel in the dispute (DS343) US –
Shrimp (Thailand) the terms of reference of which also included the application of the EBR to imports
of subject shrimp. At the DSB meeting where the present Panel was established, Thailand stated that
it had expected the establishment of a single Panel for both proceedings in accordance with Article 9.1
of the DSU. In the absence of that single Panel, Thailand indicated that, pursuant to Article 9.3 of the
DSU, it expected that the same persons would be ap pointed as panelists in the two disputes and that
the timetables would be harmonized. The representative of the United States responded that, although
the Panel in DS343 had already been established, th e same persons could be appointed to serve as
panelists in the two proceedings and the timetables of the separate Panels could be harmonized.
7.2 The meetings to appoint the same members for th is Panel and that of DS343 were held jointly
between the two separate complainants, India an d Thailand, and the common defendant, the United
States. Since the parties were unable to agr ee on panelists to serve for these proceedings, on 19
January 2007, Thailand and India requested, in separat e letters, that the Director-General determine
the composition of the Panel pursuant to Article 8.7 of the DSU, and select the same persons to serve
as panelists for both proceedings, pursuant to Article 9.3 of the DSU. On 26 January 2007, the
Director-General composed two separate Panels consisting of the same members.
7.3 On 9 February 2007, India and Thailand sent sep arate letters to the Chairman of the two
Panels requesting enhanced third party rights in each other's proceedings. On 15 February 2007, the
Chairman met with the parties in a joint organi zational meeting to hear comments on the proposed
Timetable and Panel Working Procedures. At that meeting, as well as in a letter dated
16 February 2007, the United States argued that gran ting enhanced third party rights to Thailand and
India was not necessary in the instant cases.
7.4 After having heard the parties' views, the Pane l decided not to grant enhanced third party
rights to India and Thailand but instead, opted for a practical approach aimed at ensuring that the
parties to both disputes enjoyed adequate opportuni ty to participate in the proceedings where
appropriate. On 23 February 2007, the Panel sent to the parties a joint Timetable as well as separate,
albeit similarly worded, Working Procedures . In this joint communication, the Panel informed the
parties that it had decided the following:
"[The Panel] intends to conduct both proceedi ngs so as to ensure that the parties who
are also third parties in each other's pr oceedings, have adequate opportunity and
ability to participate to the fullest extent in a manner which is compatible with the
provisions of the DSU. To this end, after having hear d the parties' views, the Panel
intends to take the following steps:
(i) holding consolidated substan tive meetings with the parties
(Thailand, India and US);
(ii) allowing the complainants during the joint meetings to
comment on each others' argumentation, provided they limit
themselves to those claims they have in common;

(iii) holding separate Third-Party Sessions, starting with DS343
and asking the Members which are not third-parties to DS345 (i.e.,
Chile, Mexico, Korea and Viet Nam) to leave the meeting room once
the Third-Party Session for DS343 is over. Note that since Thailand
and India are third parties to each other's cases, and parties in their
own, they would be in the room during the entirety of the joint
meetings, including third party sessions;
(iv) not allowing submissions in one case to be deemed to be
submitted in the other case. The parties could however attach to their
third party submissions, their submissions made as parties in the case
in which they are complaining party;
(v) issuing separate reports;
(vi) allowing all parties to respond to all questions posed by the
Panel in writing."
2. Overview of the Panel's approach to consideration of India's claims
7.5 India has made two types of claims concerning the EBR: (i) It has challenged as such the
laws, regulations and instruments of the United St ates that comprise the Amended CBD and authorize
the imposition of the EBR, together with a US statutory provision (19 U.S.C. § 1623) and a US
Customs regulation (19 C.F.R. § 113.13); and (ii) it has challenged the application of the Amended
CBD, i.e. the imposition of the EBR, to subject shrimp from India.
7.6 India's as such claims concern: the consistenc y of the Amended CBD and the
abovementioned US statutory and regulatory pr ovisions with Articles 1 and 18.1 of the Anti-Dumping
Agreement and Articles 10 and 32.1 of the SCM Agreement; their consistency with Article VI and the
Ad Note; their consistency with Ar ticles 7.1(iii), 7.2 and 7.4 of the Anti-Dumping Agreement and
Articles 17.1(c), 17.2 and 17.4 of the SCM Agreement; their consistency with Articles 9.1, 9.2, 9.3,
and 9.3.1 of the Anti-Dumping Agreement and Articles 19.2, 19.3, and 19.4 of the SCM Agreement;
their consistency with Article 18.4 of the Anti-Dumping Agreement , Article 32.5 of the SCM
Agreement and Article XVI of the WTO Agreement ; their consistency with Articles I, II:1(a) and
II:1(b), first and second sentences, of the GATT 1994; and, in the alternative, their consistency with
Article XI of the GATT 1994.
7.7 As regards its as applied claims, India challenges the c onsistency of the EBR with the
provisions of Articles 1, 7.1(iii), 7.2, 7.4, 7.5, 9.1, 9.2, 9.3, 9.3.1 and 18.1 of the Anti-Dumping
Agreement, and Articles I:1, II:1(a) and (b), VI:2 , X:3(a) of the GATT 1994, and alternatively,
Articles XI:1 and XIII of the GATT 1994.
7.8 India also claims that the United States has acted inconsistently with Article 18.5 of the Anti-
Dumping Agreement and Article 32.6 of the SCM Agreement by not notifying the Amended CBD to
the Anti-Dumping and SCM Committees.
7.9 The Panel notes that India, in its Request for Establishment, additionally made claims under
Articles 2.2, 2.3 and 2.4 of the Anti-Dumping Agreement, as such and as applied; Articles 1 and 14 of
the SCM Agreement, as such; Article 7.5 of the Anti-Dumping Agreement, as such; and Article 17.5 of
the SCM Agreement, as such. However, India did not present arguments nor request Panel findings

on these claims in any of its submissions. The Pa nel will therefore not address these claims in its
Report.47
3. Order of analysis
7.10 India has presented its as such and as applied claims sometimes together, and in other
instances separately. The Panel, fo r the sake of clarity and consistency with the parallel proceedings
in DS343 US – Shrimp (Thailand)48, has decided first to address India's as applied claims followed by
the consideration of its as such claims. Finally, we will consider India's claim under Article 18.5 of
the Anti-Dumping Agreement and Article 32.6 of the SCM Agreement.
B. INDIA'S AS APPLIED CLAIMS
1. Scope of the measure concerned
7.11 India's as applied claims concern the application of the Amended CBD, i.e. the EBR, to
imports of subject shrimp from India. Before entering into an analysis of each of the as applied
claims raised by India, the Panel first must iden tify which are the legal instruments that comprise the
Amended CBD.
7.12 We recall that the terms of reference that govern the present dispute are the following:
"To examine, in the light of the relevant provisions of the covered agreements cited
by India in document WT/DS345/6, the matter referred to the DSB by India in that
document, and to make such finding s as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements."
49
7.13 In its Request for Establishment, India specified that the measure at issue consists of the
following legal instruments:50
(a) the 1991 Customs Bond Directive;
(b) the July 2004 Amendment;51
(c) the document Current Bond Formulas;52
(d) the August 2005 Clarification;53 and
(e) "any amendments, clarifications, or extens ions to these measures and all related or
implementing measures (together, the 'Amended CBD') issued by US Customs."54

47 The Panel further notes that, in its first written subm ission, India requested the Panel to find that the
application of the EBR violates Article 7.5 of the Anti-Dumping Agreement. However, India did not present any
arguments for this claim. Accordingly, the Panel declines to make any findings for the claim.
48 Section VII.A.1 concerning the organization of the parallel proceedings.
49 WT/DS345/7.
50 India's first written submission, para. 17. We note th at India has explained in its first oral statement
that, although it had referred interchangeably to the Amended CBD and EBR in the context of its as such
claims, its claim only addresses the Am ended CBD "to the extent that it authorizes, imposes and describes the
EBR". (See India's first oral statement, para. 14).
51 Exhibit IND-3.
52 Exhibit IND-4.
53 Exhibit IND-5.
54 India's first written submission, para. 17.

7.14 In its first written submission, India submitte d to the Panel that the October 2006 Notice,
55
which was published on 24 October 2006 followi ng the submission of India's Request for
Establishment, should also be considered as one of the instruments comprising the Amended CBD. 56
The United States has not contested the inclusion of the October 2006 Notice within this Panel's terms
of reference.
7.15 We recall that the Appellate Body has ruled that panels have a duty to examine issues of a
"fundamental nature", issues that go to the root of their jurisdiction, on their own motion if the parties
to the dispute remain silent on those issues.
57 Whether a measure falls within our terms of reference is
clearly an issue that goes to the root of our jurisdiction. Theref ore, even though the United States
does not contest the inclusion of the October 2006 No tice, we must determine whether this Notice is
within our terms of reference.
7.16 Article 7 of the DSU, governing the Panel's terms of reference, Article 4 of the DSU,
governing a complainant's request for consultations, and Article 6 of the DSU, governing a
complainant's request for establishment of a panel ar e relevant to this issue. Article 7.1 of the DSU
provides:
"Panels shall have the following terms of reference unless the parties to the dispute
agree otherwise within 20 days from the establishment of the panel:
To examine, in the light of the relevant provisions in (name of the
covered agreement(s) cited by the parties to the dispute), the matter
referred to the DSB by (name of party) in document ... and to make
such findings as will assist the DSB in making the recommendations
or in giving the rulings provided for in that/those agreement(s)."
7.17 Article 4.4 of the DSU provides:
"All such requests for consultations shall be notified to the DSB and the relevant
Councils and Committees by the Member wh ich requests consultations. Any request
for consultations shall be submitted in writing and shall give the reasons for the
request, including identification of the measures at issue and an indication of the
legal basis for the complaint."(emphasis added)
7.18 Article 6.2 of the DSU provides:
"The request for the establishment of a pa nel shall be made in writing. It shall
indicate whether consultations were held, identify the specific measures at issue and
provide a brief summary of the legal basis of the complaint sufficient to present the
problem clearly. In case the applicant request s the establishment of a panel with other
than standard terms of reference, the written request shall include the proposed text of
special terms of reference."(emphasis added).
7.19 The Appellate Body affirmed in US – Upland Cotton that, "pursuant to Article 7 of the DSU,
a panel's terms of reference are governed by the request for establishment of a panel".
58 As evident

55 Exhibit IND-6.
56 India's first written submission, para. 18.
57 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 36; see also Appellate Body
58 See e.g. Appellate Body Report, US – Upland Cotton, para. 284, citing Appellate Body Report, US –
Carbon Steel, para. 124.

from the text of Articles 4 and 6 of the DSU, the complainant must identif y the measure at issue in
both the request for consultations and request for panel establishment.
7.20 The Appellate Body considered in Chile – Price Band System whether an amendment to a
measure that was enacted after the Panel had been established should nevertheless be considered as
within the Panel's terms of reference. 59 In that case, the Appellate Body determined that the
amendment at issue should be considered as part of the measure at issue since the amendment served
the purpose of clarifying the legislation that establis hed the measure at issue and did not change the
original measure into something different th an what was in force before the amendment. 60 T h i s
determination was considered consis tent with earlier jurisprudence 61 and was also found to be
consistent with the object and purpose of the WTO dispute settlement system, as set forth in
Article 3.7 of the DSU, to "secure a positive solution to a dispute". The Appellate Body explained:
"If the terms of reference in a dispute ar e broad enough to include amendments to a
measure—as they are in this case—and if it is necessary to consider an amendment in
order to secure a positive solution to the di spute—as it is here—then it is appropriate
to consider the measure as amended in coming to a decision in a dispute."62
7.21 In the case before us, we note that the Oct ober 2006 Notice further describes the process to
determine enhanced continuous bond amounts for importations involving what the United States
describes as elevated collection risks, and seeks pub lic comment concerning that process. We also
note that the United States describes the 2006 Noti ce as the "comprehensive and exclusive statement
of the policy and processes expressed in the July 2004 Amendment to the Bo nd Guidelines, the Bond
Formulas posted on CBP's Web site, and the August 2005 Clarification". 63 In addition, we note that
neither India or the United States stated that the 2006 Notice should be excluded when asked directly
whether the Panel should consider the 2006 Notice within its terms of reference.64 Instead, both India
and the United States agreed to the October 2006 Noti ce's inclusion and both referred to the Appellate
Body's findings in Chile – Price Band System in this regard.65
7.22 We agree with and adopt as our own the A ppellate Body's rationale as provided in Chile –
Price Band System . In the dispute before us, the Unite d States published the October 2006 Notice
after this Panel had been establishe d. Moreover, in our view, India's inclusion of the language "any
amendments, clarifications, or extensions to th ese measures and all related or implementing measures
(together, the 'Amended CBD') issued by US Custom s" in its Request for Establishment is broad
enough to allow for the inclusion of the 2006 Notice. The October 2006 Notice seeks to clarify the
legislation that established the measure at issue and does not change the essence of the original

59 Appellate Body Report, Chile – Price Band System, para. 137.
60 Appellate Body Report, Chile – Price Band System, para. 137.
61 The Appellate Body in Chile – Price Band System cited to a passage from the Panel's finding in
Argentina – Footwear (EC) which concluded that modifications made to the measure at issue during the panel
proceedings did:

"… not constitute entirely new safeguard measur es in the sense that they were based on a
different safeguard investigation, but are instead modifications of the legal form of the
original definitive measure, which remains in force in substance and which is the subject of
the complaint."
(See Appellate Body Report, Chile – Price Band System, para. 138.)
62 Appellate Body Report, Chile – Price Band System, para. 144.
63 See Exhibit IND-6, p. 62,277.
64 India's responses to First Set of Panel Questions, paras. 51 and 52, United States' responses to First
65 India's responses to First Set of Panel Questions, pa ra. 51 and United States' responses to First Set of
Panel Questions, para. 55.

measure into something different than what was in force before its issuance (in this regard, we recall
that the October 2006 Notice includes in its text the statement that it is the "comprehensive and
exclusive statement of the policy and processes e xpressed in the July 2004 Amendment to the Bond
Guidelines, the Bond Formulas posted on [U S Customs'] Web site, and the August 2005
Clarification"). In our view, the inclusion of October 2006 Notice allows the Panel to achieve a
positive resolution to the dispute, and additionally, accords with the interests of both parties.
7.23 The Panel therefore finds that the October 2006 Notice is properly part of the measure at issue
and within the Panel's terms of reference.
2. Articles 1 and 18.1 of the Anti-Dumping Agreement, and the Ad Note
7.24 India claims that the application of the EBR to subject shrimp is inconsistent with Articles 1
and 18.1 of the Anti-Dumping Agreement and the Ad Note thereto. We shall begin by assessing
India's claim under Article 18.1 of the Anti-Dumping Agreement.
7.25 For the most part, the issues arising in resp ect of India's Article 18.1 claim under these
proceedings are the same as those that we consider ed in the context of the same claim made by
Thailand in US – Shrimp (Thailand) . This is reflected in the fact that there is significant overlap in
the arguments of India and Thailand regarding these issues.
66 Similarly, the arguments made by the
United States in respect of this claim are virtually id entical to the arguments that it made in respect of
the same claim in US – Shrimp (Thailand) .67 As a result, the findings that we make in respect of
India's Article 18.1 claim closely resemble those that we made in respect of the same claim by
Thailand in US – Shrimp (Thailand).
7.26 India submits that the application of the EBR to subject shrimp from India is inconsistent with
Articles 1 and 18.1 of the Anti-Dumping Agreement. Article 1 provides that:
"An anti-dumping measure shall be applie d only under the circumstances provided
for in Article VI of GATT 1994 and pursuant to investigations initiated ( footnote
omitted) and conducted in accordance with the provisions of this Agreement. The
following provisions govern the application of Article VI of GATT 1994 in so far as
action is taken under anti-dumping legislation or regulations."
7.27 Article 18.1 provides that:
"No specific action against dumping of expor ts from another Member can be taken
except in accordance with the provisions of GATT 1994, as interpreted by this
Agreement."
7.28 India submits that the application of the EBR to subject shrimp from India constitutes specific
action against dumping in a form other than a perm itted response to dumping under the provisions of
the GATT 1994 as interpreted by the Anti-Dumping Agreement . The United States rejects India's
claim.
7.29 We begin our evaluation of India's claim by cons idering whether or not the application of the
EBR constitutes "specific action against dumping". Ther eafter, we turn to the issue of whether or not

66 E.g. at para. 79 of its second written submission, In dia refers to "the differences in interpretation of
the Ad Note between India and Thailand, on the one hand, and the United States, on the other," thereby
indicating that India and Thailand share the same interpretation of the Ad Note.
67 This is further reflected in the fact that the oral statement made by the United States at each of our
substantive meetings with the parties addressed the claims of India and Thailand jointly.

the EBR is applied "in accordance with the provisions of the GATT 1994, as interpreted by" the
Anti-Dumping Agreement.
(a) Does the application of the EBR constitute "specific action against dumping"?
(i) Main arguments of India
7.30 India asserts that the application of the E BR constitutes "specific action against dumping"
because it is (i) "specific action" in response to dumping that (ii) also acts "against" dumping.
"Specific action" in response to dumping
7.31 India submits that the Appellate Body has defined "specific action" against dumping or
subsidization as "action that is taken in response to situations presenting the constituent elements"
68 of
dumping or subsidization and has explained further th at the measure must "… be inextricably linked
to or have a strong correlation with the constituent el ements of dumping or of a subsidy. Such a link
… may be derived from the text of the measure itself." 69 India asserts that it is indisputable that the
EBR is "specific" to dumping or subsidization because the Amended CBD expressly states that it
applies only to importers of designated merchandise that is subject to anti-dumping or countervailing
duties, i.e., when all the conditions for imposition of anti-dumping or countervailing duties have been
fulfilled. India asserts that, accordingly, and as the United States argued before the Appellate Body in
US – Offset Act (Byrd Amendment) , to the extent that the EBR "… imposes … liability on
importers/producers/exporters when dumping or subsidization is found …", it is clearly "specific
action" with respect to dumping and subsidization.
70 India states, in addition, that one important
element of the formula for calculating the bond lia bility amount is the amount of anti-dumping or
countervailing duties owed based on the dumping marg in or the individual ne t subsidy rate. India
submits that there is therefore clearly an inex tricable link between the EBR and the constituent
elements of dumping or of a subsidy. India also not es that one of the stated purposes of the EBR is to
ensure that anti-dumping and countervailing duties are collected for payment to domestic industry
under the Continued Dumping and Subsidy Offset Ac t (hereafter the "CDSOA"), which the Appellate
Body has found to be a "specific action" against dumping or subsidization. According to India,
regulations or administrative procedures by US Customs to implement the CDSOA also constitute
specific action against dumping.
Specific action "against" dumping
7.32 India asserts that, to be "against" dumping, the measure must have "…an adverse bearing on,
or more specifically, [have] the effect of dissuading the practice of dumping …."
71 India asserts that
the application of the EBR has a serious, adverse impact on importers and, therefore, on dumping.
India asserts that the demand of 100 per cent collate ral by sureties acceptable to US Customs for the
issuance of enhanced bonds, together with high bo nd premiums and other charges associated with
providing the collateral, impose a heavy burden on importers. India further asserts that the bonds
initially posted by importers inevita bly get exhausted or saturated well before the first administrative
review and liquidation of entries are completed, w ith the result that importers are forced to post
additional, enhanced bonds. India states that su reties again subject importers to additional demands
for collateral and high bond premiums, which result in further charges and further depletion of their
capital and credit. Relying on findings of the USCIT, India asserts that importers are forced to incur
serious losses in profits and business opportunities. India argues that this in turn has a serious

68 Appellate Body Report, US – 1916 Act.
69 Appellate Body Report, US – Offset Act (Byrd Amendment), para 239.
70 Appellate Body Report, US – Offset Act (Byrd Amendment), paras. 16-17.
71 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 254.

deterrent effect on exporters of the merchandise subject to the EBR as is evident from the sharp drop
between 2005 and 2006 in the quantity and value of shrimp exported from India as well as in the total
number of exporters from India.
(ii) Main arguments of the United States
7.33 The United States denies that the application of the EBR is either "specific action" in response
to dumping, or specific action "against" dumping.
"Specific action" in response to dumping
7.34 Regarding India's argument that the EBR is specific to dumping because it may be and has
been applied only to importers of goods subject to a US anti-dumping order and the formula it
contains uses the anti-dumping rate as one variable in determining the amount of additional security
that may be prescribed, the United States asserts that these features merely reflect the fact that the
directive is, like various measures refe rred to by the Appellate Body in US – Offset Act (Byrd
Amendment), "related to" dumping or subsidies insofa r as the unsecured liability it is designed to
secure is anti-dumping and countervailing duty liability . The United States asserts that, according to
the Appellate Body, "an action that is not 'specific' within the meaning of Article 18.1 of the
Anti-Dumping Agreement and of Article 32.1 of the SCM Agreement , but is nevertheless related to
dumping or subsidization, is not prohibited by Article 18.1 of the Anti-Dumping Agreement or
Article 32.1 of the SCM Agreement ."
72 The United States asserts that the directive is applied in
response to noncollection risk – the mere fact that th e particular noncollection risk at issue relates to
anti-dumping duties is not a sufficient basis to conclude that the directive itself is "taken in response
to the constituent elements of dumping or a subsid y." The United States submits that "the constituent
elements of 'dumping'" are not "built into the essential elements" of the additional bond directive, 73
since US Customs does not determine anti-dumping or countervailing duty margins, and the directive
does not purport to establish margins of dumping or s ubsidization. The United States also asserts that
the additional bond directive does not apply to a ll entries subject to anti-dumping or countervailing
duties – rather it only applies to those for which a sp ecific noncollection risk has been identified. The
United States submits that the sole reason the dir ective is designed to secure anti-dumping liability is
because the vast majority of unsecured liability th at has resulted in noncollection happens to be
anti-dumping duty liability.
7.35 According to the United States, the fact th at the additional bond directive is based on
noncollection risk, rather than the constituent elemen ts of dumping or subsidization, is evident in the
text of the directive itself and associated materi als. The United States asserts that none of the
information US Customs uses to determine that merchandise should be identified as "special
category" merchandise subject to the amended dir ective – previous collection problems, payment
history, indications that the liquidated duty rates may exceed existing security – has any relation to the
constituent elements of dumping or subsidization. 74 Likewise, none of the information US Customs
requests for purposes of establishing individual bond amounts – prior history of paying import duties,
the value of the merchandise to be secured, the de gree of supervision US Customs exercises over the
transaction, the prior record of the importer in honouring bond commitments, and evidence of the
importer's ability to pay duties assessed – has any bearing on the constituent elements of dumping or
subsidization.75 The United States submits that all of these factors are, however, relevant to
establishing noncollection risk.

72 Appellate Body Report, US – Offset Act (Byrd Amendment ), para. 262.
73 Appellate Body Report, US – 1916 Act, para. 130.
74 Exhibit IND-6 at 62,277.
75 Exhibit IND-6 at 62,277.

7.36 The United States acknowledges that the formul as for determining bond amounts incorporate
the anti-dumping rate, but only because from the standpoint of US Customs it is the best and only
available baseline proxy of duties that ultimately may be assessed. According to the United States,
the inclusion of the anti-dumping rate in the form ulas thus does not support the conclusion that the
directive itself relies on the constituent elements of dumping or subsidization.
Specific action "against" dumping
7.37 The United States asserts that the sole evidence that India cites in support of its argument that
the directive operates "against" dumping is either inaccurate or irrelevant.
7.38 First, the United States asserts that the record does not support India's assertion that the
directive reduced shipments from countries subject to it.
76 The United States refers to the USGAO
Report, which indicates that the effects of the bond directive "cannot readily be isolated from other
changes occurring at the same time, such as the imposition of AD duties."77
7.39 Second, with regard to India's argument concer ning surety fees, the United States asserts that
US Customs neither sets surety fees, nor requires importers to post collateral in support of bonds. The
United States argues that US Customs is a third pa rty beneficiary to bond contracts, which are private
contracts negotiated between the surety and the im porter. The United States further asserts that US
Customs neither requested nor encouraged sureties to require collateral with respect to the bonds at
issue.
7.40 Furthermore, the United States asserts that the Appellate Body noted in US – Offset Act (Byrd
Amendment ) that "a measure cannot be against dumping or a subsidy simply because it facilitates or
induces the exercise of rights that are WTO-consistent." 78 According to the United States, the
GATT 1994 and the Anti-Dumping Agreement do not prohibit the United States from obtaining
payment for the anti-dumping duties in question, an d the bond requirement facilitates its ability to do
so.
(iii) Evaluation by the Panel
7.41 In considering the text of Article 18.1 of the Anti-Dumping Agreement , we note that the
relevant language was considered in detail by the Appellate Body in US – Offset Act (Byrd
Amendment). In that case, the Appellate Body found:
"Looking to the ordinary meaning of the words used in these provisions, we read
them as establishing two conditions precedent that must be met in order for a measure
to be governed by them. The first is that a measure must be "specific" to dumping or
subsidisation. The second is that a measure must be "against" dumping or
subsidisation. These two conditions operate together and complement each other. If
they are not met, the measure will not be governed by Article 18.1 of the Anti-
Dumping Agreement or by Article 32.1 of the SCM Agreement . If, however, it is
established that a measure meets these two c onditions, and thus falls within the scope
of the prohibitions in those provisions, it would then be necessary to move to a
further step in the analysis and to determ ine whether the measure has been "taken in
accordance with the provisions of the GATT 1994", as interpreted by the Anti-
Dumping Agreement or the SCM Agreement. If it is determined that this is not the

76 India's first written submission, para. 62.
77 USGAO Report, p. 24, Exhibit IND-26.
78 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 258.

case, the measure would be inconsistent with Article 18.1 of the Anti-Dumping
Agreement or Article 32.1 of the SCM Agreement."
79
7.42 We agree with this analysis by the Appellate Body, and adopt it as our own. Accordingly, in
order to establish whether the application of the EBR constitutes "specific action against dumping",
we shall first examine whether or not the application of the EBR is " specific" to dumping. If so, we
shall then consider whether or not the application of the EBR acts "against" dumping.
Whether or not the application of the EBR is "specific" to dumping
7.43 The degree of specificity needed for action to fall within the scope of Article 18.1 was
addressed by the Appellate Body in US – 1916 Act and US – Offset Act (Byrd Amendment) . In its
report in US – 1916 Act, the Appellate Body found that:
"[T]he ordinary meaning of the phrase "specific action against dumping" of exports
within the meaning of Article 18.1 is action that is taken in response to situations
presenting the constituent elements of "dumpi ng". "Specific action against dumping"
of exports must, at a minimum, encompass action that may be taken only when the
constituent elements of "dumping" are present."
80
7.44 In US – Offset Act (Byrd Amendment), the Appellate Body explained further that:
"The criterion we set out in US – 1916 Act for specific action in response to dumping
is not whether the constituent elements of dumping or of a subsidy are explicitly
referred to in the measure at issue, nor wh ether dumping or subsidization triggers the
application of the action, nor whether th e constituent elements of dumping or of a
subsidy form part of the essential components of the measure at issue. Our analysis
in US – 1916 Act focused on the strength of the link between the measure and the
elements of dumping or a subsidy. In other words, we focused on the degree of
correlation between the scope of applica tion of the measure and the constituent
elements of dumping or of a subsidy. In noting that the "wording of the 1916 Act
also makes clear that these actions can be taken only with respect to conduct which
presents the constituent elements of 'dumping'", we did not require that the language
of the measure include the constituent elements of dumping or of a subsidy. This is
clear from our use of the word "also", whic h suggests that this aspect of the 1916 Act
was a supplementary reason for our finding, and not the basis for it. Indeed, we
required that the constituent elements of dumping (or of a subsidy) be "present",
which in our view can include cases where the constituent elements of dumping and
of a subsidy are implicit in the measure."
81
7.45 We agree with the Appellate Body's interpretation of the phrase "specific action", and adopt it
as our own. Accordingly, we shall determine whethe r or not the application of the EBR is "specific"
to dumping by examining whether or not the application of the EBR is inextricably linked to, or has a
strong correlation with, the constituent elements of dumping.

79 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 236.
80 Appellate Body Report, US – 1916 Act , para. 122 (footnote omitted, original emphasis). Although
the Appellate Body's finding refers to the phrase "specific action against dumping" in its entirety, the Appellate
Body confirmed in US – Offset Act (Byrd Amendment) (para. 245) that its finding concerned the phrase "specific
action", rather than the word "against".
81 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 244 (footnote omitted).

7.46 In our view, the constituent elements of dumping are implicit in the express conditions for the
application of the EBR, since the EBR may be applied only to goods subject to a US anti-dumping (or
countervailing) duty order.
82 If there were no finding that the constituent elements of dumping were
present, there would be no anti-dumping order against subject shrimp, and therefore no basis for
applying the EBR in respect of subject shrimp imports. For this reason, the existence of the
constituent elements of dumping is a legal pre-requisite for the application of the EBR. This is further
confirmed by the fact that the formula in the Amended CBD for calculating the EBR includes direct
reference to the anti-dumping duty rate, and theref ore the constituent elements of dumping. If the
constituent elements of dumping were not present, the US would not have found cause to determine
an anti-dumping rate, and the formula would not apply.
7.47 We note the US argument that although the application of the EBR may be related to
dumping, the application of the EBR is not "specific" to dumping because it is based on non-
collection risk rather than the constituent elements of dumping, in the sense that the EBR does not
"apply to all entries subject to anti-dumping or c ountervailing duties – but only to those for which a
specific non-collection risk has been identified". We recall, though, that the Appellate Body has
already determined
83 that a measure need not be triggered by the constituent elements of dumping in
order for that measure to constitute "specific action" in respect of dumping. Nor does the existence of
"additional requirements" transform a "specific action against dumping" into something else. 84 Even
though the application of the EBR might ultimately be triggered by a risk of non-collection, the fact
remains that the EBR is only applied in respect of imports subject to anti-dumping (or countervailing
duty) orders. There remains, therefore, a significan t degree of correlation between the application of
the EBR and the constituent elements of dumping. In our view, such a degree of correlation
demonstrates that the application of the EBR is "specific", rather than merely related, to dumping.
Whether or not the application of the EBR acts "against" dumping
7.48 In our view, a measure will only act "against" dumping if it has some form of adverse bearing
on dumping. This is consistent with th e approach of the Appellate Body in US – Offset Act (Byrd
Amendment), where it found that:
"[T]o determine whether a measure is 'against' dumping or a subsidy, [] it is necessary
to assess whether the design and structure of a measure is such that the measure is
'opposed to', has an adverse bearing on, or, more specifically, has the effect of

82 The United States has not disputed the factual accu racy of India's argument (see India's first written
submission, para. 60) that the July 2004 Amendment limits the application of the EBR to merchandise upon
which USDOC has issued an anti-dumping order, setting ou t that "[a]ny increase in bond liability will become
effective when the Department of Commerce (DOC) issues its Order on the case", and that the August 2005
Clarification characterises the July 2004 Amendment as containing "specific guidelines for bonds covering
certain merchandise subject to antidumping/countervailing duty cases".
83 US – Offset Act (Byrd Amendment) (para. 243), the Appellate Body found that the relevant measure
constituted "specific action against dumping" notwithstanding the US argument that the relevant measure was
not triggered by the constituent elements of dumping, but ra ther by an applicant's qualification as an "affected
domestic producer" which has incurred qualifyi ng expenditures. We further recall that in US – 1916 Act , the
Appellate Body held that "an additional requirement" for th e taking of action (in that case, a finding of intent)
did "not transform the 1916 Act into a statute which does not provide for 'specific action against dumping'"
(Appellate Body Report, US – 1916 Act, para. 132).
84 In US – 1916 Act , the Appellate Body held that "an additional requirement" for the taking of action
(in that case, a finding of intent) did "not transform the 1916 Act into a statute which does not provide for
'specific action against dumping'" (Appellate Body Report, US – 1916 Act, para. 132).

dissuading the practice of dumping or the practice of subsidization, or creates an
incentive to terminate such practices."
85
7.49 In light of the ordinary meaning of the term "a gainst", we consider it appropriate to adopt a
similar approach in determining whether or not the application of the EBR acts "against" dumping. In
doing so, we note that the Appellate Body concluded that the measure at issue in US – Offset Act
(Byrd Amendment) had an adverse bearing on the foreign prod ucers/exporters because it "created an
incentive" for those foreign producers/exporters "not to engage in the practice of exporting dumped or
subsidized products or to terminate such practices".86 In our view, a similar incentive arises as a result
of the application of the EBR on imports of subjec t shrimp. Ordinarily, the application of the EBR
results in additional costs 87 that, although initially borne by impor ters, ultimately impact on foreign
producers/exporters of the subject merchandise, just as anti-dumping duties do. 88 As a result of the
formulas used to calculate the amount of the EBR, the amount of the EBR, like the amount of anti-
dumping duty, is directly linked to a given fore ign producer's/exporter's margin of dumping. The
higher the margin of dumping, the higher the amount of the EBR, and the higher the cost of the
EBR.
89 In order to maintain its level of sales and/ or profitability, despite the increased costs for
importers as a result of the application of the EBR, foreign producers/exporters have an incentive to
reduce, or even eliminate, their margin of dumpi ng (just as they have an incentive to reduce their
margin of dumping in order to reduce the am ount of anti-dumping duties levied on their goods). 90
Furthermore, shrimp importers have an incentive to avoid the costs associated with the application of
the EBR by importing shrimp from foreign producers/exporters whose produce has not been found to
have been dumped, and is therefore not subject to the shrimp anti-dumping order. As a result of such
incentives, which affect the relevant entities in much the same way as anti-dumping duties do, we find
that the application of the EBR constitutes specific action "against" dumping.
7.50 The United States argues that, rather than being specific action "against" dumping, the
application of the EBR merely facilitates the coll ection of anti-dumping duties. In assessing this
argument, we note that in US – Offset Act (Byrd Amendment) the Appellate Body disagreed with the
panel's finding that the CDSOA is a measure against dumping because the CDSOA provides a

85 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 254.
86 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 256.
87 The financial costs of obtaining enhanced bonds include the fees and collateral requirements imposed
by surety companies for providing such bonds. Although the United States does not itself determine the terms
and conditions under which surety companies provide bonds, the United States must have been aware that
importers would necessarily incur costs in procuring the bonds that it required them to provide.
88 Although the parties have made arguments regarding the actual impact of the EBR on the volume
and market share of imports from India, we do not consider these to be relevant to the issue before us. In our
view, Article 18.1 of the Anti-Dumping Agreement is concerned with the effect of actions on the practice of
dumping, rather than trade flows in the relevant imports . We note that the Appellate Body has confirmed that
"the test should focus on dumping [or subsidization] as practices" (see Appellate Body Report, US – Offset Act
(Byrd Amendment), para. 253), and that the appropriate "analy sis does not mandate an economic assessment of
the implications of the measure on the conditions of competition under which domestic product and
dumped/subsidized imports compete" (see Appellate Body Report, US – Offset Act (Byrd Amendment) ,
para. 257).
89 In this regard, the adverse bearing of the applicatio n of the EBR is similar to that of the measure at
issue in US – Offset Act (Byrd Amendment) (where the adverse bearing resulted from the collected anti-dumping
duties being transferred to domestic producers) , in the sense that the adverse bearing is directly linked to the
margin of dumping of the foreign producer/exporter. Indeed, the adverse bearing of the EBR is similar to that of
an anti-dumping duty, in the sense that both result in increased costs that the relevant entities have an incentive
to avoid or mitigate.
90 In reply to Question 2 from the First Set of Panel Questions, para. 5, the United States asserted that
"[i]f the cash deposit rate in the most recently complete d administrative review is determined to be zero, any
new continuous bond obtained after completion of the administrative review would reflect an enhanced bond
amount of $0."

financial incentive for domestic producers to file or support applications for the initiation of anti-
dumping and countervailing duty inves tigations, and that such an incentive would likely result in a
greater number of applications, investigations and orders. In particular, we note that the Appellate
Body found that "a measure cannot be against dump ing or a subsidy simply because it facilitates or
induces the exercise of rights that are WTO-consistent."91 Upon careful reflection, we do not consider
that the Appellate Body's reasoning should preclude our finding that the application of the EBR
constitutes specific action "against" dumping. Instea d, the Appellate Body's reasoning means that we
would be precluded from concluding that the application of the EBR constitutes specific action
"against" dumping simply because it may also facilitate the collection of WTO-consistent anti-
dumping duties. However, this does not preclude us from concluding, as the Appellate Body and
panel did in US – Offset Act (Byrd Amendment) , that the application of the measure at issue
constitutes specific action "against" dumping on the b asis of other considerations, notwithstanding the
fact that the application of that measure might al so facilitate the collection of WTO-consistent anti-
dumping duties.
7.51 Our finding that the application of the EBR constitutes "specific action against dumping" is
supported by the United States' view that provisiona l measures taken in the form of bonds constitute
"specific action against dumping".
92 If a bond applied as a provisional measure should be treated as a
"specific action against dumping", it would appear reasonable to conclude that a bond applied as a
definitive measure should be similarly categorized: in both cases, the adverse bearing of the bond on
foreign producers/exporters and im porters (and the correlation with the constituent elements of
dumping) is the same. The United States asserts, though, that unlike a bond required as a provisional
measure, the enhanced bond directive provides for security after the existence of dumping has been
established, pending determination of the facts with respect to payment of duties. The United States
submits that the application of the EBR "facilitates the exercise of WTO-consistent rights" 93 – i.e., the
collection of duties owed following the imposition of an order. The United States asserts that, by
contrast, certain bonds required before an anti-dumping duty order has been imposed may not be
viewed as "facilitating" the exercise of WTO-consistent rights, insofar as, before the order is imposed,
it has not been established that a Member is entitled to collect duties. We are not persuaded by the US
argument, however, since we have already concluded that the fact that the application of the EBR may
facilitate the exercise of WTO-consistent rights is no t determinative of whether or not the application
of the EBR constitutes "specific action against dumpi ng" (in the sense that this fact does not preclude
a finding that a measure constitutes "specific action against dumping" on the basis of other
considerations).
Conclusion
7.52 In light of the above, we conclude that the a pplication of the EBR constitutes "specific action
against dumping" in the meaning of Article 18.1 of the Anti-Dumping Agreement.
7.53 Accordingly, we must now consider the remain ing elements of Article 18.1, regarding the
question of whether or not the EBR was appl ied "in accordance with the provisions of the
GATT 1994", as interpreted by the Anti-Dumping Agreement.

91 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 258.
92 See United States' responses to Second Set of Panel Questions, para. 4, in which the United States
asserts that "a bond requirement prior to imposition of an order may be considered an action 'against' dumping".
93 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 258.

(b) Was the EBR applied "in accordance with" the provisions of the GATT 1994, as interpreted
by the Anti-Dumping Agreement?
7.54 The United States submits that the EBR was applied "in accordance with the provisions of the
GATT 1994", as interpreted by the Anti-Dumping Agreement, because the application of the EBR is
authorized by the Ad Note. India rejects the US reliance on the Ad Note.
(i) Main arguments of India
7.55 India notes that the Appellate Body found in US – 1916 Act that:
"Article VI, and, in particular, Artic le VI:2, read in conjunction with the
Anti-Dumping Agreement , limit the permissible responses to dumping to definitive
anti-dumping duties, provisional measures and price undertakings."
94
7.56 India further notes that similarly, in US – Offset Act (Byrd Amendment) , the Appellate Body
found that:
"The GATT 1994 and the [SCM] Agreement provide four responses to a
countervailable subsidy: (i) definitive countervailing duties; (ii) provisional measures;
(iii) price undertakings; and (iv) multilate rally sanctioned countermeasures under the
dispute settlement system. No other response to subsidization is envisaged in the text
of the GATT 1994, or in the text of the [SCM] Agreement . Therefore, to be 'in
accordance with the GATT 1994, as interpreted by' the [SCM] Agreement, a response
to subsidization must be in one of those four forms."95
7.57 India asserts that the application of the EBR does not involve the collection of a definitive
(anti-dumping or countervailing) duty or a price undert aking by exporters. India asserts that it is also
not a provisional measure to the extent that it is applied (a) in addition to, and on top of, the
provisional measures contemplated by Article 7 of the Anti-Dumping Agreement such as cash deposits
or bonds in an amount not greater than the provision ally estimated margin of dumping, and (b) even
after these provisional measures have run their cour se and the decision to impose definitive duties has
been taken under Article 9.1 of the Anti-Dumping Agreement , as the case may be. India further
submits that the application of the EBR is inconsistent with the requirements of Articles 7 and 9 of the
Anti-Dumping Agreement.
7.58 India asserts that in US – 1916 Act , the Appellate Body found that "[t]he Anti-Dumping
Agreement is an 'Agreement on Implementation of Artic le VI of the General Agreement on Tariffs
and Trade 1994." India submits that, accordingly, "Ar ticle VI must be read in conjunction with the
provisions of the Anti-Dumping Agreement …" 96 India states that, as an interpretative note to
paragraphs 2 and 3 of Article VI of the GATT 1994, it is clear that the Ad Note is part and parcel of
Article VI and cannot be separated from it. For this reason, India submits that the Ad Note therefore
cannot support any response to dumping or subsidization other than those recognized by the Appellate
Body in US – Offset Act (Byrd Amendment).
7.59 India also asserts that the Ad Note limits th e permissible measures to a single security in the
form of a "cash deposit or bond", rather than a combination of both cash deposits and bonds.

94 Appellate Body Report, US – 1916 Act , para 137. See also Appellate Body Report, US – Offset Act
(Byrd Amendment), para 265.
95 Appellate Body Report, US – Offset Act (Byrd Amendment), para 269.
96 Appellate Body Report, US – 1916 Act, para. 114.

(ii) Main arguments of the United States
7.60 The United States submits that India offers an in terpretation of the Ad Note in relation to the
Anti-Dumping Agreement that is inconsistent with the terms of the Anti-Dumping Agreement and fails
to give the Ad Note any meaning or legal effect, contrary to the relationship between the GATT 1994
and other WTO Agreements contemplated by the WTO Agreement. The United States asserts that the
GATT 1994, including the Ad Note, is an "integral part" of the WTO Agreement.97 The United States
argues that past panels and the Appellate Body have noted that Article VI is "part of the same treaty"
as the Anti-Dumping Agreement, and "should not be interpreted in a way that would deprive it or the
Anti-Dumping Agreement of meaning."98 The United States argues that panels "should give meaning
and legal effect to all the relevant provisions," including the Ad Note. According to the United States,
the Ad Note permits Members to require "reasonabl e security (cash deposit or bond)" for the payment
of anti-dumping and countervailing duties. For the United States, no other provision of the
Anti-Dumping Agreement or the GATT 1994 specifically addresses security for the payment of duties
after the final determination in an investigati on, including the collection of cash deposits, and,
moreover, no provision prohibits a Member from requiring this security.
7.61 The United States submits that, instead of "reading Article VI in conjunction with the
Anti-Dumping Agreement ," as the Appellate Body in US – 1916 Act suggested, India, through a
misreading of Articles 7 and 9 of the Anti-Dumping Agreement, attempts to read Article VI and the
Ad Note out of the covered agreements entirely, depriving both provisions of any meaning. The
United States asserts that, if accepted, India's vari ous theories would mean that security pending final
assessment of anti-dumping and countervaili ng duties is nowhere permitted by the Anti-Dumping
Agreement, SCM Agreement, or the GATT. The United States asserts that, if India's arguments were
accepted, Members would not be permitted to ma intain security requirements pending final
determination of liability. The United States argues that to preclude a Member with a retrospective
system from requiring the posting of security prior to the determination of fi nal liability would create
a disparity between retrospective and prospective systems. The United States argues that such a
conclusion would compromise Members' ability to maintain retrospective duty assessment systems,
despite the fact that these systems are specifically contemplated by the text of the Agreement.
(iii) Evaluation by the Panel
7.62 At this juncture, we are examining the issu e of whether or not the EBR was applied "in
accordance with the provisions of the GATT 1994", as interpreted by the Anti-Dumping Agreement.
The parties agree that the relevant provision of the GATT 1994 in this regard is Article VI, and
specifically the Ad Note thereto.
99 This is also consistent with the view expressed by the Appellate
Body in US – 1916 Act. 100 The Ad Note provides that:

97 Article II:2 of the WTO Agreement.
98 Panel Report, US – 1916 Act (EC), para. 6.97.
99 We note that the GATT 1994 consists inter alia of the GATT 1947. Article XXXIV of the
GATT 1947 provides that the annexes to the GATT 1947 are "an integral part" thereo f. The Ad Note, which is
contained in Annex I to the GATT 1947, is therefore "an integral part" of the GATT 1947. As such, the Ad Note
is necessarily part of the GATT 1994. We conclude from the fact that the Ad Note is included under the heading
"Ad Article VI" that the Ad Note is part of Article VI of the GATT 1994. Both parties agree with this approach
(See e.g. para. 44 of India's second oral statement, and para. 14 of the United States' second written submission).
100 In particular, the Appellate Body clarified "Since the only provisions of the GATT 1994
"interpreted" by the Anti-Dumping Agreement are those provisions of Article VI concerning dumping,
Article 18.1 should be read as requiring that any "specific action against dumping" of exports from another
Member be in accordance with the relevant provisions of Article VI of the GATT 1994, as interpreted by the
 Anti-Dumping Agreement". Appellate Body Report on US – 1916 Act, para. 124. See also Panel Report on US
– 1916 Act (Japan), paras. 6.214-218 and 6.264; and Panel Report on US – 1916 Act (EC), paras. 6.197-6.199.

"As in many other cases in customs administration, a contracting party may require
reasonable security (bond or cash deposit) for the payment of anti-dumping or
countervailing duty pending fina l determination of the facts in any case of suspected
dumping or subsidization."
7.63 We first consider the relationship between the Ad Note and the Anti-Dumping Agreement, and
the question of whether or not the Ad Note may au thorize the imposition of security requirements that
are not expressly envisaged by the Anti-Dumping Agreement . If we find that the Ad Note may
authorize such security requirements, we consider the temporal scope of the security requirements that
Members may impose pursuant to the Ad Note. Ther eafter, we consider the question of whether or
not Members may require security combining bot h cash deposits and bonds. Finally, we examine
whether the application of the EBR constitutes "reasonable" security.
The relationship between the Ad Note and the Anti-Dumping Agreement
7.64 India submits that the relationship between the WTO Agreement and the Anti-Dumping
Agreement and the SCM Agreement has been explored by the Appella te Body in previous disputes.
According to India, it is in light of this relations hip that the Appellate Body interpreted Article VI of
the GATT 1994, as interpreted by the provisions of these Agreements, to permit only the specific
responses to dumping and subsidization contemplated by these Agreements.
7.65 India asserts that, in Brazil – Desiccated Coconut , the Appellate Body found that "… the
authors of the new WTO regime intended to put an end to the fragmentation that had characterized the
previous system". India states that the Appellate Body based its reasoning on (a) the preamble to the
WTO Agreement , (b) the provisions of Article II:2 of the WTO Agreement providing that the
Multilateral Trade Agreements form an "integral part" of the WTO Agreement , (c) the single
undertaking reflected in the provisions of the WTO Agreement , and (d) the "integrated dispute
settlement system" established under the DSU "… allowing all relevant provisions of the WTO
Agreement to be examined in one proceeding".
101
7.66 India asserts that it is based on this reasoning that, unlike the position while the Tokyo Round
Subsidies Code was in force, the Appellate Body found that, after the WTO Agreement entered into
force, Article VI of the GATT 1994 could not be applied independently of the SCM Agreement .102
India notes that the Appellate Body agreed with the Panel further that:
"[T]he question for consideration is not whether the SCM Agreement supersedes
Article VI of GATT 1994. Rather, it is whether Article VI creates rules which are
separate and distinct from those of the SCM Agreement , and which can be applied
without reference to that Agreem ent, or whether Article VI of GATT 1994 and the
SCM Agreement represent an inseparable package of rights and disciplines that must
be considered in conjunction."103
7.67 India notes that the Appellate Body went on to find that, after the WTO Agreement entered
into force, both Article VI and the SCM Agreement must be read together.
7.68 According to India, therefore, it is clear that, even if the provisions of Article VI of the
GATT 1994, the Anti-Dumping Agreement and the SCM Agreement must all be read together as a
single legal instrument, the provisions of these Agr eements themselves may set out rules that govern
the relationship between the GATT 1994 and the Agreements. Such provisions also must be given

101 Appellate Body Report, Brazil – Dessicated Coconut, p. 18.
102 Appellate Body Report, Brazil – Dessicated Coconut, p. 17.
103 Appellate Body Report, Brazil – Dessicated Coconut, p. 14.

meaning. India asserts that, in fact, th e Appellate Body took this into account in US – Antidumping
Act of 1916 when it found that:
"Article VI of the GATT 1994 and the Anti-Dumping Agreement are part of the same
treaty, the WTO Agreement. As its full title indicates, the Anti-Dumping Agreement is
an 'Agreement on Implementation of Article VI …' Accordingly, Article VI must be
read in conjunction with the provisions of the Anti-Dumping Agreement , including
Article 9."104
7.69 India submits that the Appellate Body also found that Article 1 of the Anti-Dumping
Agreement provides that "'an anti-dumping measure' must be consistent with Article VI of the
GATT 1994 and the provisions of the Anti-Dumping Agreement "105 and that "… the scope of
application of Article VI is clarified, in particular, by Article 18.1 of the Anti-Dumping Agreement".106
India further asserts that it is worth noting that , after the Appellate Body concluded that the
Antidumping Act of 1916 was inconsiste nt with Article VI:2 and the Anti-Dumping Agreement , it
agreed with the conclusion of the Panel that "the 1916 Act violates Article VI:2 of the GATT 1994"
only after recording "… the caveat that Article VI:2 mu st be read together with the relevant provisions
of the Anti-Dumping Agreement".107
7.70 According to India, therefore, the Appellate Body's conclusion that "Article VI, and in
particular, Article VI:2 read in conjunction with the Anti-Dumping Agreement, limit the permissible
responses to dumping to definitive anti-dumpi ng duties, provisional measures and price
undertakings"108 was based on an exhaustive analysis and interpretation of the provisions of the
Anti-Dumping Agreement that govern the relationship between Article VI and the Anti-Dumping
Agreement. India asserts that, because the application of the EBR is neither a provisional measure, a
price undertaking, or a definitive anti-dumping duty, the application of the EBR is not envisaged by
the Ad Note, and therefore cannot be authorized by the Ad Note.
7.71 We note that the Appellate Body found in Brazil – Desiccated Coconut that "Article VI of the
GATT 1994" cannot "be applied independently of the SCM Agreement in the context of the WTO" as
"[t]he authors of the new WTO regime intended to put an end to the fragmentation that had
characterized the previous system".
109 At first glance, this finding might seem to support India's view
regarding the non-applicability of the Ad Note, whic h is an integral part of Article VI of the
GATT 1994. However, we also note that the Appellate Body findings relied on by India were
prefaced by the following observations:
"The relationship between the GATT 1994 and the other goods agreements in
Annex 1A is complex and must be examined on a case-by-case basis. Although the
provisions of the GATT 1947 were incorporated into, and became a part of the
GATT 1994, they are not the sum total of the rights and obligations of WTO Members
concerning a particular matter. For example, with respect to subsidies on agricultural
products, Articles II, VI and XVI of the GATT 1994 alone do not represent the total
rights and obligations of WTO Members. The Agreement on Agriculture and the
SCM Agreement reflect the latest statement of WTO Members as to their rights and
obligations concerning agricultural subsidi es. The general interpretative note to
Annex 1A was added to reflect that the other goods agreements in Annex 1A, in

104 Appellate Body Report, US – 1916 Act, para. 114.
105 Appellate Body Report, US – 1916 Act, para. 119.
106 Appellate Body Report, US – 1916 Act, para. 121.
107 Appellate Body Report, US – 1916 Act, para. 138.
108 Appellate Body Report, US – 1916 Act, para. 137.
109 Appellate Body Report, Brazil – Desiccated Coconut, p. 18.

many ways, represent a substantial elaboration of the provisions of the GATT 1994,
and to the extent that the provisions of the other goods agreements conflict with the
provisions of the GATT 1994, the provisions of the other goods agreements prevail.
This does not mean, however, that the other goods agreements in Annex 1A, such as
the SCM Agreement, supersede the GATT 1994. As the Panel has said:
... the question for consideration is not whether the SCM Agreement
supersedes Article VI of GATT 1994. Rather, it is whether Article VI
creates rules which are separate and distinct from those of the SCM
Agreement, and which can be applied without reference to that
Agreement, or whether Article VI of GATT 1994 and the SCM
Agreement represent an inseparable package of rights and disciplines
that must be considered in conjunction."
110 (emphasis supplied,
footnote omitted)
7.72 Thus, despite the complexity of the issue under consideration, the Appellate Body was
abundantly clear in stating that Article VI of the GATT 1994 was not superseded by the SCM
Agreement. The findings of the panel, which were upheld by the Appellate Body without
modification, similarly excluded the possibility that the SCM Agreement might be superseded by
Article VI of the GATT 1994. Thus, neither the panel nor Appellate Body findings in Brazil –
Desiccated Coconut provide any basis for concluding that Article VI of the GATT 1994 is superseded
by the SCM Agreement.111 We emphasise this point because, in our view, India's specific argument
regarding the relationship between the Ad Note and the Anti-Dumping Agreement suggests that the
latter supersedes the former.
7.73 Thus, although the Panel and Appellate Body in Brazil – Desiccated Coconut found that
Article VI could not be applied "without reference" to, or independently of, the SCM Agreement, this
finding cannot mean that the Ad Note may not au thorize action that is not envisaged by the SCM or
Anti-Dumping Agreement.112 In our view, the findings in Brazil – Desiccated Coconut that Article VI
may not be applied independent of , or without reference to, the Anti-Dumping Agreement simply
mean (consistent with the conflict mechanism set forth in the general interpretative note to Annex 1A)
that Article VI may not be interpreted to justify action that is prohibited by the Anti-Dumping
Agreement. It is in this sense that Article VI must be applied with reference to the Anti-Dumping
Agreement. If the Ad Note authorizes conduct, and reference to the Anti-Dumping Agreement
confirms that such conduct is not prohibited by the Anti-Dumping Agreement, we see no basis in the
Anti-Dumping Agreement, the GATT 1994, or the abovementioned findings of the panel and Appellate
Body, to prohibit such conduct. 113 Any other approach would deprive the Ad Note of meaning and

110 Appellate Body Panel, Brazil – Desiccated Coconut, p. 14.
111 Although the findings of the panel and Appellate Body in Brazil – Desiccated Coconut were
concerned with the relationship between Article VI of the GATT 1994 and the SCM Agreement , we see no
reason why (and the parties have not argued that) those findings should not guide us in assessing the relationship
between Article VI and the Anti-Dumping Agreement, especially since the Appellate Body's findings concerned
the broader "relationship between the GATT 1994 and the other goods agreement in Annex 1A" to the WTO
Agreement.
112 Such result would conflict with the Appellate Body's conclusion that the SCM Agreement does not
supersede Article VI of the GATT 1994.
113 We note India's argument that Article 18.1 refers to "the provisions of GATT 1994, as interpreted by
this Agreement " (emphasis added). According to India, this means that the relevant provisions of the
GATT 1994 are those that have been implemented through the Anti-Dumping Agreement. India notes that the
Ad Note is implemented through Article 7 of the Anti-Dumping Agreement . We note that this was not the
approach adopted by th e Appellate Body in US – Offset Act (Byrd Amemndment). In that case, the Appellate
Body did not consider whether any of the relevant provisions of Article VI of the GATT 1994 had been
expressly implemented through the Anti-Dumping Agreement. Instead, the Appellate Body simply interpreted

legal effect, and would effectively mean that it has been superseded by the Anti-Dumping
Agreement.114
7.74 In our view, such an approach to the relationship between the Ad Note and the Anti-Dumping
Agreement is entirely consistent with the interpretation set forth by the Appellate Body in Brazil –
Desiccated Coconut. It also respects the Appellate Body's concern that the WTO system should not
reintroduce "the fragmentation that had characterized the previous system". 115 The fragmentation
with which the Appellate Body was concerned in Brazil – Desiccated Coconut resulted from the fact
that, under the GATT regime, Contracting Parties could take anti-dumping action under Article VI
even if they had not signed – and were therefore not bound by – the Tokyo Round Anti-Dumping
Code. Non-signatories of the Code could theref ore act (under Article VI) "independently" of, or
"without reference" to the Code. Such fragm entation, which is precluded under the "single
undertaking" in the WTO regime, would not be re-int roduced by our interpretation of the relationship
between Article VI and the Anti-Dumping Agreement , since our interpretation is premised on the
notion that Article VI may not be applied "inde pendently" of, or "without reference" to, the
Anti-Dumping Agreement.
7.75 India claims that the application of the EBR is inconsistent with Articles 7 and 9 of the
Anti-Dumping Agreement . This claim is concerned with the application of the EBR after the
imposition of the anti-dumping order. Accordingly, the application of the EBR is not a provisional
measure and therefore falls outside the scope of Article 7 of the Anti-Dumping Agreement. We reject
India's Article 9 claim for the reasons set forth at paragraphs 7.96 - 7.107. India has not identified any
other provision of the Anti-Dumping Agreement that would prohibit the security requirements
resulting from the application of the EBR. Nor are we able to identify any. As a matter of law,
therefore, such security requirements would be au thorized by the Ad Note, provided they are in
conformity with the substantive provisions thereof. This is the issue we will turn to shortly.
7.76 Before concluding on the relations hip between the Ad Note and the Anti-Dumping
Agreement, though, we must consider India's specific argument that the Appellate Body has found
that "Article VI, and, in particular, Ar ticle VI:2, read in conjunction with the Anti-Dumping

the phrase "the provisions of GATT 1994, as interpreted by this Agreement" as a reference to Article VI of the
GATT 1994. (see US – Offset Act (Byrd Amemndment) (AB) paras. 264 and 265). We therefore conclude that
the phrase "as interpreted by [the Anti-Dumping] Agreemen t" is simply designed to clarify that the relevant
provision of the GATT 1994 is Article VI, since that is the provision interpreted by the Anti-Dumping
Agreement. Furthermore, we note that India's argument would result in the Ad note being rendered inutile,
simply because it has not been ex pressly implemented through the Anti-Dumping Agreement. In light of our
findings regarding the relationship between the Ad Note and the Anti-Dumping Agreement , and particularly
bearing in mind the Appellate Body jurisprudence to the e ffect that the provisions of Article VI, including the
Ad Note, are not superseded by the Anti-Dumping Agreement , we are unable to accept the interpretation
proposed by India. We also note that Article 1 of the Anti-Dumping Agreement provides in relevant part that the
provisions of the Anti-Dumping Agreement "govern the application of Article VI of GATT 1994". Consistent
with our reasoning above, we consider that the Anti-Dumping Agreement can only govern the application of
Article VI to the extent that it expressly addresse s issues covered by Article VI. In our view, the Anti-Dumping
Agreement cannot govern the application of Article VI in respect of security for definitive anti-dumping duties if
the Anti-Dumping Agreement contains no provisions expressly dealing with such security.
114 Any other approach would also render other parts of Article VI, such as paragraph 6(b) thereof,
inutile. As noted by the panel in Brazil – Desiccated Coconut (note 60), the Anti-Dumping Agreement "does not
replicate or elaborate on Article VI:5 of the GATT 1994, which proscribes the imposition of both an anti-dumping
and a countervailing duty to compensate for the same situ ation of dumping and export subsidization, nor does it
address the issue of countervailing action on behalf of a third country as provided for in Article VI:6(b) and (c) of
GATT 1994. If the [Anti-Dumping] Agreement were considered to supersede Article VI of the GATT 1994
altogether with respect to countervailing measures, these provisions would lose all force and effect. Such a result
could not have been intended."
115 Appellate Body Report, Brazil – Desiccated Coconut, p. 18.

Agreement, limit the permissible responses to dumping to definitive anti-dumping duties, provisional
measures and price undertakings".
116 While we acknowledge that such statements were made by the
Appellate Body in US – 1916 Act and US – Offset Act (Byrd Amendment) , we note that the Appellate
Body was not considering the WTO-consistency of secu rity imposed pursuant to the Ad Note in those
cases. By contrast, we have conducted a careful ex amination of the relationship between the Ad Note
and the Anti-Dumping Agreement, and find that the Ad Note may permit responses to dumping in the
form of particular security requirements. In doi ng so, we note that Appellate Body jurisprudence
clearly indicates that the Ad Note has not been superseded by the Anti-Dumping Agreement. In such
circumstances, we are not prepared to find that the Ad Note h as been rendered superfluous by dicta in
an Appellate Body Report that does not even refer to the provisions of the Ad Note. Instead, we shall
base ourselves on the clear-cut guidance that has been provided by the Appellate Body in Brazil –
Desiccated Coconut.
7.77 For all the above reasons, we find that the relationship between the Ad Note and the
Anti-Dumping Agreement is not such as to preclude the Ad Note authorizing certain types of security
that are not expressly envisaged by the Anti-Dumping Agreement.
The temporal scope of the Ad Note
7.78 We recall that the EBR was applied on imports entering the United States after the shrimp
anti-dumping order was imposed. The first substantive issue we must consider is whether the
temporal scope of the Ad Note covers the period of application of the anti-dumping order (as alleged
by the United States), or whether it is limited to provisional measures taken prior to the final
determination of dumping preceding the imposition of the anti-dumping order (as alleged by India).
Ordinary meaning of the text of the Ad Note

7.79 By its express terms, the Ad Note is applicable "pending final determination of the facts in
any case of suspected dumping or subsidization". The United States argues that the temporal scope of
the Ad Note covers the period of application of the anti-dumping order since, in a retrospective
system such as the US system, there remains a "case of suspect ed dumping" pending completion of
the assessment review. India a gues that the Ad Note is implemented through Article 7 of the
Anti-Dumping Agreement , regarding the application of provisional measures. According to India,
therefore, the application of the Ad Note is expr essly limited to provisional measures taken prior to a
final determination of dumping.
7.80 The Ad Note refers to "suspected dumping." We interpret "dumping" in light of Article 2.1 of
the Anti-Dumping Agreement. Having regard to the dictionary definition, 117 we understand the term
"suspected" to refer to dumping that is suspected to ex ist, in the sense that its existence may be likely.
118
7.81 In order to determine whether or not there re mains "a case of suspected dumping" after the
determination of dumping preceding the imposition of a US anti-dumping order, we must carefully
consider the analyses of dumping undertaken in the US retrospective system. In order to impose an
anti-dumping order, the United States first determines , through an analysis of import entries during a
given period of investigation, whether margins of dumping exist, and whether dumped imports cause

116 Appellate Body Report, US – 1916 Act , para. 137; Appellate Body Report, US – Offset Act (Byrd
Amendment), para. 265.
117 The New Shorter Oxford English Dictionary (Clarendon Press, 4 th Ed. 1993), page 3162 (which
defines the word "suspected" in relevant part as "that one suspects to exist or to be such; imagined to be possible
or likely").
118 As noted below at note 148, we do not consider that the mere possibility of dumping would be
sufficient to justify reasonable security under the Ad Note.

or threaten to cause material injury to a domestic industry. If a determination of injurious dumping is
made, the United States issues an anti-dumping duty or der. In its anti-dumping duty order, the United
States sets forth ad valorem cash deposit rates for producers/exporters individually investigated, as
well as an "all-others" rate applicable to all othe r subject producers/exporters. Pursuant to the anti-
dumping duty order, importers must post a cash deposit of estimated anti-dumping duties for each
import transaction. This cash deposit is based on the overall margin of dumping found for the
exporter or producer during the investigation phase. Thereafter, the US retrospective duty assessment
system provides that, every twelve months, during the anniversary month of the anti-dumping duty
order, importers, exporters, producers, and domestic interested parties have the opportunity to request
that USDOC conduct an assessment review of the impor t entries that occurred in the prior year (but
following imposition of the anti-dumping order). Duri ng any such review, the United States analyses
all of the import entries for the relevant period of review (i.e., the prior 12 months) to determine the
final amount of the anti-dumping duty payable on imports from the relevant producer or exporter. For
those entries not covered by a request for an assessment review, USDOC instructs US Customs to
assess anti-dumping duties at the cash deposit rate required upon entry.
7.82 In our view, there is no certainty that impor ts entering the United States following imposition
of an anti-dumping order are in fact dumped. The determination of dumping made during the initial
investigation underlying the anti-dumping order does not apply to these imports, since that
determination was made on the basis of imports oc curring during an earlier period of investigation.
Rather, the final determination (o f the existence and amount) of dumping is only made in respect of
imports entering the United States following imposition of the anti-dumping order when an
assessment review is undertaken. Un til that time, it is not possible to state with certainty whether or
not those imports are dumped. Indeed, the assessment review may demonstrate that those import
entries were not dumped, such that no anti-dumping duties may be collected.
7.83 While there is no certainty that import entries subject to an anti-dumping order are dumped,
there is a reasonable basis for suspecting that they might be. Such suspicion of dumping results from
the finding of dumping made in respect of import entries of subject merchandise during the initial
period of investigation, i.e., the finding of dumping th at gave rise to the anti-dumping order. In our
view, that suspicion of dumping may last until a final determination of du mping is made in the
assessment review, whereupon both the existence and amount of dumping may be determined with
precision.
119
7.84 We acknowledge that the United States must de termine the existence of dumping (and injury
and causality) in order to impose an anti-dumping orde r. That determination, however, relates to
imports during the period of investigation underlying the initial investigation. It does not relate to
imports entering the United States after the anti-dump ing order is imposed. Accordingly, the initial
determination does not remove the su spicion of dumping in respect of those later imports. In fact, as
noted above, that initial determination is actually th e basis for the suspicion of dumping in respect of
those later imports.
7.85 India raises arguments regarding the meaning of the phrase "final determination" in the
Ad Note. India argues that it is no coincide nce that, in almost every context in the Anti-Dumping
Agreement in which the term "final determination" o ccurs, it is referred to in the singular in the
context of the determination immediately preceding th e application of "final measures" or "definitive

119 A new determination of dumping in an assessment review would, of course, give rise to a further
suspicion of dumping. Even if the results of the first assessment review indicate that there was no dumping
during the period under review, we consider it reasonable to continue to suspect – on the basis of the initial
investigation underlying the anti-dumping order – that future imports may be dumped. This interpretation is
consistent with, and indeed supported by, note 22 of the Anti-Dumping Agreement.

duties". In this regard, India notes that in Mexico – Anti-Dumping Measures on Rice , the Appellate
Body found that:
"Article 11.2 of the Anti-Dumping Agreement and Article 21.2 of the SCM
Agreement, … Article 12.2.2 of the Anti-Dumping Agreement and Article 22.5 of
the SCM Agreement … indicate that a definitive duty is imposed subsequent to a
final affirmative determination. We are of the view... that a duty becomes 'definitive'
… at the time of the investigating auth ority's final affirmative determination.
… The Agreements therefore use the term 'definitive'" to distinguish duties imposed
after a final determination (following an investiga tion) from 'provisional' duties that
may be imposed under certain conditions dur ing the course of an investigation,
namely, after a preliminary determination."
120 (emphasis in original)
India further notes that in EC – Bed Linen (Article 21.5 – India), the Appellate Body found that:

"Members have the right to impose and collect anti-dumping duties only after the
completion of an investigation in which it has been established that the requirements
of dumping, injury, and causation ' have been fulfilled' . In other words, the right to
impose anti-dumping duties under Article 9 is a consequence of the prior
determination of the existence of dumping margins, injury, and a causal link. 121
(emphasis in original)
7.86 We recall that the Mexico – Anti-Dumping Measures on Rice and EC – Bed Linen
(Article 21.5 – India) cases concerned anti-dumping measures applied in the context of prospective
assessment systems. In such systems, one may legitimately refer to anti-dumping duties being levied
pursuant to the "final determination" at the end of the initial investigation. In the present case,
though, we are concerned with the US retrospec tive assessment system. Under that system, anti-
dumping duties are not levied pursuant to the final determination at the end of the initial investigation.
Accordingly, we see no reason why the "final determ ination" in the Ad Note may not be interpreted
(in the context of a retrospective duty assessment system) as the "determination of the final liability
for payment of anti-dumping duties" referred to in Article 9.3.1 of the Anti-Dumping Agreement.122
Since we are not prepared to interpret the Ad Note in a way that would not make sense in the context

120 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, paras. 345-346.
121 Appellate Body Report, EC –Bed Linen (Article 21.5 – India), para. 123.
122 In particular, we see no reason why the determ ination referred to in Article 9.3.1 may not be
considered as a final determination. Furthermore, we note that the Appellate Body found in Mexico –
Anti-Dumping Measures on Rice that "the conditions to impose [an anti-dumping duty] are to be assessed with
respect to the current situation" (Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 165).
We understand this to mean that, according to the Appellate Body, the conditions for imposing anti-dumping
duties, including the existence of dumping, must be established in respect of the "current situation" (at the time
of imposition). There is no obligation on Members, at the time of imposition, to establish the existence of
dumping prospectively, by reference to any future situation. Indeed, any such obligation would be impossible to
fulfil. While Members applying a prospective system of anti-dumping duty collection may use their findings in
respect of the period of investigation as a proxy for the period following imposition of a definitive anti-dumping
measure, there is no obligation on Members to do so. Indeed, Members applying a retrospective system of anti-
dumping duty assessment (which is specifically contem plated by Article 9.3.1) choose not to do so.
Accordingly, we see no basis to conclude that the Un ited States, which applies a retrospective system, already
determines the existence of dumping in respect of future import entries at the time that it imposes an anti-
dumping order. The fact that Article 5.1 requires the Un ited States to establish the existence of dumping at the
time it imposes such order, does not mean that the United States is at the same time establishing the existence of
dumping in respect of future import entries covered by that order.

of a retrospective duty assessment system, 123 we reject India's argument that the phrase "final
determination" in the Ad Note necessarily refers to the final determination made at the end of the
initial investigation.
7.87 India further argues that, even going by the argum ents of the United States, there cannot be a
single "final determination" of the liability for payment of anti-dumping duties because, under
Article 9.3.1, there will be as many determinations of the final liability for payment as there are
administrative reviews. As noted by the United States, 124 though, in the US system of duty
assessment, each set of entries is covered by only one assessment review. Thus, while there may be
multiple determinations over the life of an anti-dump ing duty order, for each entry, there is only one
final determination of the facts with respect to payment.
7.88 India also argues that the arguments of the United States beg the question of why the Ad Note
was not implemented by introducing similar provi sions and associated disciplines on the taking of
security in Article 9 of the Anti-Dumping Agreement. India asserts that, if Members had wanted, or
perceived a need, to do so, they would have intr oduced additional provisions in Article 9 of the
Anti-Dumping Agreement to permit the taking of security after the final determination. In light of our
findings regarding the relationship between the Ad Note and the Anti-Dumping Agreement, we are not
persuaded that Members would have needed to incorporate a specific authorization into the
Anti-Dumping Agreement in order for the United States to be en titled to require security in respect of
imports entering after imposition of an anti-dumping order. In our view, the United States is entitled
to require such security on the basis of the authorization provided for in the Ad Note.
7.89 We note India's argument that the above analysis fails to take into account that in many cases
no assessment review is conducted. 125 The United States argues that in no case is assessment –
whether at the cash deposit rate or otherwise – conducted at the time of entry, and in all cases the cash
deposit collected at the time of entry is a baseline proxy of the amount that may ultimately be
assessed, and is never itself the final liability. Th e United States assert that while, in some cases, the
amount of the cash deposit happens to equal the amount of the final liability, it cannot be known at the
time of entry whether this will be the case (since it cannot be known whether an interested party
intends to request a review).
7.90 Although there may be cases in which no assessment review ultimately takes place, there is
no means of knowing this at the time that the impor t entry is made. Whether or not an assessment
review is to take place will only be known once ei ther the assessment review is requested, or the
deadline for requesting such review has passed w ithout any such request having been made. Thus,
even though imports may ultimately be liquidated at the cash deposit rate in the anti-dumping order,
there remains the possibility that an assessment review may be requested, and that such review may
indicate that those imports are not dumped (i.e., that no anti-dumping duties are to be assessed). At
the time of entry, therefore, such imports may only be suspected of being dumped.
Contextual considerations regarding Article 7 of the Anti-Dumping Agreement

7.91 India asserts that the Ad Note is implemented through Article 7 of the Anti-Dumping
Agreement, and may not be applied independently of that provision. Accordingly, India submits that
the Ad Note may only justify imposing security for provisional measures, as envisaged by Article 7.

123 We recall in this regard that the Anti-Dumping Agreement is "neutral as between different systems
for levy and collection of anti-dumping duties" (Appellate Body Report, US – Zeroing (Japan), para. 163).
124 See United States' second written submission, note 2.
125 See India's second written submission, para. 81.

7.92 The United States asserts that nothing in the text of the Ad Note suggests that it is limited to
"provisional measures". The United States also cont ends that neither Article 7 nor the concept of
"provisional measures" existed at the time the Ad Note was negotiated.
7.93 In support of its view that the Ad Note is implemented through Article 7 of the Anti-Dumping
Agreement, India argues that the Ad Note only provi des for provisional security measures, i.e.,
security measures applied before the final determ ination prior to the imposition of anti-dumping
order. For the reasons set forth in the preceding sub-section, we are unable to accept that the temporal
scope of the Ad Note is limited in this way.
7.94 In support of its argument, India relies on a single paragraph in a 1959 Report of the Group of
Experts on Anti-dumping and Countervailing Duties to assert that the "reasonable security (bond or
cash deposit)" referred to in the Ad Note "is the same as the provisional measures referred to in
Article 7 of the Anti-Dumping Agreement."
126 That paragraph provides:
"Provisional anti-dumping measures
19. The Group discussed the question of provisional anti-dumping measures. It
was recognized that in certain circumstan ces the use of such measures might be
justified in order to limit the material inju ry to a domestic industry, even though it
was noted that Article VI made no mention of them. On the other hand, it was
generally felt that provisional measures shoul d be used sparingly and for the shortest
possible time in order to interfere as little as possible with normal trade and in order
that they should not assume a protectionist character. For this reason, any such
measures should preferably be introduced after the responsible administration of the
importing country had carried out an initial confidential investigation that revealed
that there was a serious case to consider further. Moreover, where possible, the
provisional measures should not lead to a situation in which either the exporter or the
importer of the product under investigation would suffer if the eventual decision were
not to impose an anti-dumping duty. The Group agreed that it was desirable that such
provisional measures should not be of retroactive application and that they should
preferably take the form of bond or c ash deposits as mentioned in Interpretative
Note 1 to paragraphs 2 and 3 of Article VI. Furthermore, they should be based on
provisions which would, as far as possible, permit the importer to determine the
maximum duty which could be assessed."
7.95 In the second sentence of the a bove extract from their Report, therefore, the Group of Experts
"noted that Article VI made no mention of [p rovisional measures]". Since the Ad Note was
introduced into GATT 1947 in 1948,
127 and was therefore an integral part of Article VI of the GATT
1947 at the time that the Group of Experts issued its Report, this statement by the Group of Experts
must mean that neither Article VI generally, nor the Ad Note specifically, provided for provisional
anti-dumping measures. This statement by the Group of Experts is therefore fundamentally at odds
with India's argument that the Ad Note is expressl y limited to provisional measures taken prior to a
final determination of dumping.

126 India's first written submission, para. 92.
127 The Ad Note to Article VI was included in Article 34 of the Havana Charter and was incorporated
into the GATT 1947 in conjunction with the rest of Article 34 in 1948 (see Report of Working Party No. 3 on
Modifications to the General Agreement, GATT/CP.2/22/Rev.1 (Aug. 30, 1948)).

Contextual considerations regarding Article 9 of the Anti-Dumping Agreement , and the WTO-
conformity of cash deposits
7.96 A further contextual consideration arises fro m the United States' assertion that India's
arguments would mean that no security is permissible pending final assessment, including cash
deposits. India rejects this argument, asserting inst ead that cash deposits could be collected pursuant
to Article 9 of the Anti-Dumping Agreement. India argues that, from the standpoint of both the United
States, as the Member collecting anti-dumping duti es, and the importer, who is liable to pay the
anti-dumping duties following the decision to impo se definitive duties, there is no substantive
difference between accepting (or paying) "cash deposits" instead of "cash" in payment of
anti-dumping duties. India asserts that whether cash is accepted as a "cash deposit" or as "payment of
duties" is a difference only in nomenc lature and not in substa nce. India refers in this regard to the
statement by the Appellate Body in US – Zeroing (Japan), where it held that "[a]t the time of
importation, an administering authority may collect du ties, in the form of a cash deposit, on all export
sales …".
128 The United States maintains that cash de posits are not duties within the meaning
prescribed under Article 9 of the Anti-Dumping Agreement , but instead are a form of security or
estimate of the amount of duties that will ultimately be owed on a given entry. The United States also
calls attention to the fact that Article 7.2 of the Anti-Dumping Agreement distinguishes cash deposits
from duties by stating that "provisional measure s may take the form of a provisional duty or,
preferably, a security – by cash deposit or bond ... ."129
7.97 We consider that the United States' argument ra ises an extremely important consideration, for
the ability to require security is an essential elemen t of a retrospective assessment system (which is
specifically contemplated by Article 9.3.1 of the Anti-Dumping Agreement ). If security, including
even cash deposits, may not be required pursuant to th e Ad Note, we consider it important to establish
what provision of the GATT 1994 or Anti-Dumping Agreement it may be required under. If security,
including even cash deposits, may not be imposed unde r such other provisions, we consider that an
interpretation of the Ad Note permitting such security would be further justified. Thus, even though
we are not required to rule on whether or not cash deposits may be imposed pursuant to the Ad Note
in order to resolve the dispute before us, this issu e is an important contextual consideration to which
we should have regard when interpreting the Ad Note.
7.98 As to the question of whether or not cash depos its may be justified un der other provisions of
the GATT 1994 or Anti-Dumping Agreement, India argues that cash deposits may be imposed pursuant
to Article 9 of the Anti-Dumping Agreement . We are not persuaded by this argument, though, for
Article 9 provides only for the imposition of definitive anti-dumping duties. As noted by India, 130 the
term "duty" is defined in the tax context as "the payment to the public revenue levied on the import,
export, manufacture or sale of goods …". 131 In our view, this definition of the term "duty" is not
broad enough to encompass cash deposits. Unlike duties, cash deposits do not yield public revenue,
in the sense that cash deposits have no intrinsic va lue in and of themselves. Although cash may have
intrinsic value, a cash deposit, on the other hand, is not liquidated revenue is not a payment to yield
public revenue at the time it is provided, but rath er, is provided as a form of security. A cash deposit
will not yield public revenue until some point in the future. In the context of the US retrospective
assessment system, that point comes when – and only when – either duties are assessed pursuant to an
assessment review, or the cash deposits are liquida ted once the deadline for requesting an assessment
review has expired (without any assessment review ha ving been requested). Until that point, a cash
deposit has no intrinsic value in and of itself. Indeed, India itself acknowledges that "based on the
ordinary meaning and the meaning in legal parlance of the terms "provisional duties" and "security",

128 Appellate Body Report, US – Zeroing (Japan), para. 156.
129 United States' second written submission, para. 16.
130 See India's responses to Second Set of Panel Questions, para. 29.
131 The New Shorter Oxford English Dictionary, L. Brown (ed.) (Clarendon Press, 1993), Vol. I, p. 769.

there is clearly a difference, as a matter of law, between collecting duties, provisionally or otherwise,
and the taking of security in the form of bonds or cash deposits."
132 Since we are required to interpret
the relevant provisions of the covered agreements by reference to the ordinary meaning of the
terms,133 (and since the ordinary meaning of the terms reflects fundamental differences in the
substantive consequences of those terms), we are una ble to accept India's argument that whether cash
is accepted as a "cash deposit" or as "payment of duties" is a difference only in nomenclature and not
in substance.
7.99 Furthermore, we note that Article 9.3.1 of the Anti-Dumping Agreement refers to
circumstances "[w]hen the amount of the anti-dumping duty is assessed on a retrospective basis". If
the cash deposit applied in a retrospective system we re a duty, it would make no sense to talk of the
amount of the duty being assessed on a retrospective basis, as the amount of the cash deposit, which
India refers to as a "duty", is fixed prospectively.
7.100 In addition, we observe that Article 9.3 of the Anti-Dumping Agreement provides that the
amount of the anti-dumping duty "shall not exceed the margin of dumping as established under
Article 2". The Appellate Body has confirmed that the margin of dumping established in an
assessment review is a margin of dum ping "as established under Article 2".
134 This is also consistent
with note 22 to the Anti-Dumping Agreement, which applies "when the amount of the anti-dumping
duty is assessed on a retrospective basis", and whic h envisages definitive duties being levied pursuant
to "assessment proceeding[s]". Since note 22 acc epts that amounts of anti-dumping duties, which
(according to Article 9.3) must not exceed the ma rgin of dumping established under Article 2, may be
assessed pursuant to assessment proceedings, necessarily note 22 also accepts that the margins of
dumping established in assessment proceedings are margins of dumping "established under Article 2".
Accordingly, and consistent with Article 9.3, the margin of dumping in the assessment review
operates as a ceiling for the amount of anti-dumping duty. If the cash deposit were an anti-dumping
duty, and the cash deposit were in excess of the ma rgin of dumping established subsequently in the
assessment review, the imposition of that cash deposit would violate Article 9.3. This cannot be a
correct interpretation, though, for under this in terpretation it would be impossible for a Member
requiring cash deposits to know, at the time of appli cation, whether or not it was acting in conformity
with Article 9.3.
7.101 We recall India's reference
135 to the statement by the Appellate Body in US – Zeroing (Japan)
that "[a]t the time of importation, an administering au thority may collect duties, in the form of a cash
deposit, on all export sales…". 136 However, in that case the Appe llate Body was not addressing, and

132 See India's responses to Second Set of Panel Questions, para. 33.
133 Article 3.2 of the DSU provides that WTO Me mbers recognise that the WTO dispute settlement
system serves to clarify the provisions of the cove red agreements "in accordance with customary rules of
interpretation of public international law". Article 31 of the Vienna Convention on the Law of Treaties,
considered as one such rule, reads th at "[a] treaty shall be interpreted in good faith in accordance with the
ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and
purpose." Appellate Body Report on US – Gasoline, p. 17. See also Appellate Body Report on India – Patents
(US), para. 46; Appellate Body Report on Japan – Alcoholic Beverages II, pp. 10-12; and Panel Report on US –
DRAMS, para. 6.13.
134 In US – Zeroing (EC) (para. 130) the Appellate Body stated that "the margin of dumping established
for an exporter or foreign producer operates as a ceiling for the total amount of anti-dumping duties that can be
levied on the entries of the subject product (from that exporter) covered by the duty assessment proceeding." In
the context of that case (starting with the Appellate Bo dy's reference to the need to establish a margin of
dumping (under Article 2) for the product as a whole, and for each exporter or foreign producer (see
paras. 127-129)) it is clear to us that the Appellate Body was referring to the margin of dumping established in
an assessment review as a margin of dumping "established under Article 2".
135 See India's second written submission, para. 71.
136 Appellate Body Report, US – Zeroing (Japan), para. 156.

did not need to address, the issue of whether or not cash deposits constitute duties. The Appellate
Body's statement therefore constitutes obiter dictum in the discussion of a different issue, which we
do not feel compelled to treat as authoritative guidan ce on the issue before us here. Furthermore, in
its earlier Report on US – Zeroing (EC), the Appellate Body included dicta to the effect that, under the
US retrospective duty assessment system, "the United States collects security in the form of a cash
deposit at the time a product enters the United States, and determines the amount of duty due on the
entry at a later date ."137 This suggests that in that earlie r case the Appellate Body treated cash
deposits as a form of security for duties to be collected later, rather than as duties per se. Thus, even
if we were required to follow Appellate Body dict a, it is unclear exactly how this dicta should be
interpreted.
7.102 In addition, we observe that Article 9.3.1 of the Anti-Dumping Agreement refers to
"refund[s]" to be made in the context of retrosp ective assessment systems. Article 9.3.1 does not
stipulate what precisely must be refunded. Article 9. 3.2, by contrast, which applies in the context of
prospective assessment systems, refers to "refund[s] ... of any ... duty paid". Unlike Article 9.3.2,
therefore, Article 9.3.1 does not characterize what is being refunded as a "duty", even though (as
acknowledged by India 138) Article 9.3.1 is the mechanism by which cash deposits are refunded. If
cash deposits were duties, there would have been no need to use different language in Articles 9.3.1
and 9.3.2.
7.103 India also argues that the Anti-Dumping Agreement expressly mentions the interpretative and
supplementary notes to Article VI that are not subsumed by the provisions of the Anti-Dumping
Agreement and the SCM Agreement. India notes in this regard that Article 2.7 of the Anti-Dumping
Agreement expressly states that "[t]his Article is without prejudice to the second Supplementary
Provision to paragraph 1 of Article VI in Annex I to GATT 1994." India asserts that if the drafters of
the Anti-Dumping Agreement had intended to keep the Ad Note available to Members after the final
determination, they would similarly have said so. India also submits that the arguments of the United
States beg the question of why the Ad Note was not implemented by introducing similar provisions
and associated disciplines on the taking of security in Article 9 of the Anti-Dumping Agreement in the
case of the retrospective system. India asserts that if Members had wanted, or perceived a need, to do
so, they would have introduced add itional provisions in Article 9 of the Anti-Dumping Agreement
during the Tokyo Round or the Uruguay Round process to permit the taking of security after the final
determination.
7.104 The implication of India's argument regarding Article 2.7 of the Anti-Dumping Agreement is
that the Ad Note, together with the majority of other Notes and Supplementary Provisions to
Article VI of the GATT 1994, are superseded by the Anti-Dumping Agreement . We have already
explained that there is no basis for reaching any su ch conclusion. We have also already explained
that, based on our interpretation of the relationship between the Ad Note and the Anti-Dumping
Agreement, there was no need for Members to include an express authorization for collection security
(after imposition of the anti-dumping order) in Arti cle 9, for the authorization provided for in the
Ad Note remains valid.
7.105 As further contextual support for our view that cash deposits required following imposition of
an anti-dumping order are not anti-dumping duties, we note that Article 7.2 of the Anti-Dumping
Agreement, regarding provisional measures, draws a clear distinction between a (provisional) "duty"
and a "cash deposit". India's argument that cash depo sits are duties is therefore at odds with the plain
language of Article 7.2.

137 Appellate Body Report, US – Zeroing (EC), para. 109.
138 See e.g. India's first written submission, para. 79.

7.106 Accordingly, we are not persuaded by India's argument that cash deposits may be imposed
pursuant to Article 9 (as anti-dumping duties). Nor has India advanced any other basis for Members
to require security in the form of cash deposits. We recall, though, that we consider that the ability of
Members to require security such as cash de posits pending final assessment is an essential
requirement for the operation of a retrospective asse ssment system. Such contextual considerations
support our interpretation of the ordinary meaning of the Ad Note as permitting such security.
7.107 In light of the above, we find that the applica tion of the EBR falls with in the temporal scope
of the Ad Note, in the sense th at the Ad Note authorizes the imposition of security requirements
during the period following the imposition of a US anti-dumping order.
The combined use of bonds and cash deposits
7.108 We recall that the EBR was applied in conj unction with cash deposits, in the sense that
importers had to provide both e nhanced bonds and cash deposits covering the same subject import
entries. We next consider whether the Ad No te allows the imposition of security requirements
combining both cash deposits and bonds, or whet her the Ad Note requires Members to choose
between either (i) cash deposits or (ii) bonds.
7.109 India asserts that the plain meaning of the disjunctive "or" between the terms "bond" and
"cash deposit" is that either a bond or a cash deposit may be required as security for the potential
liability for anti-dumping or countervailing duties and not both at the same time.
7.110 The United States submits that nothing in the text or context supports this reading of the term.
According to the United States, the phrase "bond or cash deposit" is a parenthetical that appears after
the term "reasonable security" and that term provid es relevant context for in terpretation. The United
States asserts that India fails to explain how requiring two types of security instead of one is relevant
to determining what constitutes "reasonable security". The United States also argues that India fails
to explain why the Agreement should be read to proscribe US Customs from, for example, replacing a
portion of the existing cash deposit requirement with a bond requirement. The United States argues
that the Appellate Body has interpreted other uses of "or" in the WTO Agreements as covering one or
the other item, as well as both items, in a phrase. The United States notes that, in its report in US –
FSC (Article 21.5 II) , the Appellate Body interpreted Article 21.5 of the DSU in this manner.
Article 21.5 states:
"Where there is disagreem ent as to the existence or consistency with a covered
agreement of measures taken to comply with the recommendations and rulings such
dispute shall be decided through recourse to these dispute settlement procedures,
including wherever possible resort to the original panel."
139

7.111 The United States argues that the Appellate Body interpreted this provision to mean that "an
Article 21.5 panel may be called upon to examine either the 'existence' of 'mea sures taken to comply'
with DSB recommendations and rulings, or, when su ch measures exist, the 'consistency' of those
measures with the covered agreements, or a combination of both , in situations where the measures
taken to comply, through omissions or othe rwise, may achieve only partial compliance."
140 T h e
United States submits that, like the language interpreted by the Appellate Body in US – FSC
(Article 21.5 – EC) , based on the text and context, the "or" in the Ad Note encompasses a cash
deposit, a bond, or a combination of both.

139 Article 21.5 of the DSU (emphasis added).
140 Appellate Body Report, US – FSC (Article 21.5 – EC II), para. 60 (emphasis added).

7.112 The Ad Note authorizes the imposition of "reasonable security (bond or cash deposit)". In our
view, the reasonableness of the security is to be assessed by reference to both the form and the amount
thereof. In terms of form, the phrase "(cash deposit or bond)" in the Ad Note serves to clarify that
both cash deposits and bonds constitute reasonable forms of security. Since that is the case, we see
nothing in the text of the Ad Note to suggest th at the combination of both (otherwise reasonable)
forms of security necessarily results in a measure that is unreasonable. In par ticular, the text of the
Ad Note does not provide that the form of security will only be reasonable if either (i) cash deposits
or (ii) bonds are required.
7.113 We consider that an interpretation of the word "or" to permit the combined use of bonds and
cash deposits is consistent with the Appellate Body's interpre tation of the word "or" in US – FSC
(Article 21.5 – EC II) . In that case, the Appellate Body found 141 that the word "or" in respect of the
phrase "existence or consistency" in Article 21.5 of the DSU should be interpreted to permit
Article 21.5 proceedings addressing both the "exist ence" and the "consistency" of implementation
measures, not only one or the other. Since the A ppellate Body was interpreting a similar use of the
word "or" in US – FSC (Article 21.5 – EC II) , the Appellate Body's findings regarding that matter
offer useful guidance that we consider it appropriate to follow in these proceedings.
7.114 In light of the above, we find that the applicati on of the EBR is consistent with the temporal
scope of the Ad Note, and that the United States is entitled to impose security requirements combining
both cash deposits and bonds. The fi nal substantive issue for us to examine is whether or not the
security requirements established by the EBR in th is case were "reasonable" in the meaning of the
Ad Note.
Whether the application of the EBR resulted in "reasonable" security requirements
7.115 The Ad Note only permits the imposition of "r easonable" security requirements. Thus, the
application of the EBR may only be found to be in accordance with the Ad Note to the extent that it
provides for "reasonable" security. The United States asserts that the application of the EBR provided
for reasonable security, whereas India contends that the resultant security requirements were not
reasonable. As noted in the preceding section, the r easonableness of the security is to be assessed by
reference to both the form and the amount thereof. Having already dealt with India's claim regarding
the form of the security required by the United Stat es, in this section we consider the reasonableness
of the amount thereof.
7.116 The United States submits that the ordinary meaning of the term "reasonable" is "in
accordance with reason; not irrational or absurd." 142 The United States further asserts that, with
respect to amounts, "reasonable" is additionally defi ned as "[w]ithin the limits of reason; not greatly
less or more than might be thought likely or appropriate." 143 We consider it appropriate to consider
the meaning of the term "reasonable" in light of this definition. 144 We believe it equally important,
though, to consider the context in which the term "reasonable" is used. In particular, since the
Ad Note only permits security in a given "case of suspected dumping", the reasonableness of that
security should be assessed in light of the circumstances of that case of suspected dumping.
7.117 In this regard, we recall that the EBR is app lied in conjunction with cash deposits. While the
cash deposits are designed to secure the duty liability established as a result of the anti-dumping order
(or most recent assessment review), the EBR is applied to secure against liability resulting from
increases in the rate of dumping over and above that established in the order (or most recent

141 Appellate Body Report, US – FSC (Article 21.5 – EC II), para. 60.
142 The United States refers to New Shorter Oxford English Dictionary, p. 2496.
143 The United States refers to New Shorter Oxford English Dictionary, p. 2496.
144 We note that India has not challenged the definition proposed by the United States.

assessment review).
145 Since the amount of cash deposits is limited to the rate of dumping established
in the anti-dumping order (or most recent assessment review), such security corresponds to the given
case of suspected dumping, and is therefore in principle "reasonable" within the meaning of the
Ad Note. The same reasoning does not cover th e application of the EBR, however, since the
application of the EBR increases the level of security beyond the dumping liability established as a
result of the anti-dumping order. By virtue of th e reasonableness requirement in the Ad Note, such
increased security would only be permitted if there were some other basis which renders it reasonable
in a particular case.
7.118 In light of the abovementioned dictionary de finition (whereby reasonableness may be defined
as "not irrational or absurd" and, with respect to am ounts, as "not greatly less or more than might be
thought likely or appropriate"), we consider that there would only be an appropriate basis for such
increased security if a Member properly determined that the rates of dumping provided for in the anti-
dumping order were likely to increase (such that th e cash deposits provided for in the anti-dumping
order would not provide sufficient security for the relevant case of suspected dumping). 146 T h e
Member would also need to determine the likely amount of such increase, in or der to ensure that the
amount of the additional security requirement is not greatly more than the amount by which the final
dumping liability would likely exceed the dumping liability established as a result of the anti-dumping
order. Only then could that Member demonstrat e that the additional secur ity properly and reasonably
relates to an established case of suspected dumping, c onsistent with the requirements of the Ad Note.
Without this type of analysis, the rate in the an ti-dumping order remains "the best and only available
baseline proxy of duties that ultimately may be assessed", 147 and therefore the best estimate of
suspected dumping for which security may be required pursuant to the Ad No te. Security exceeding
this estimate would not be "reasonable" in the meaning of the Ad Note.
7.119 We shall therefore examine whether the United States properly determined that the rate of
dumping envisaged in the anti-dumping order would likely increase. If we find that it did, we shall
then examine whether the United States properly established the likely amount of such increase.
148

145 India has not argued that the United States would not be entitled to collect duties in respect of any
amount by which the rate of dumping established in an assessment review exceeds the cash deposits made in
respect of the relevant import entries.
146 Both parties argue that the reasonableness of the a pplication of the EBR should be assessed in light
of the likelihood of increases in the rates of dumping. See e.g. United States' respon ses to First Set of Panel
Questions. para. 27, and para. 7 of India's oral statement at the second substantive meeting. We acknowledge
that rates of dumping may increase, and that the United States would be entitled to collect anti-dumping duties
commensurate with the full amount of dumping. In our view, though, it would not be reasonable to require
additional security simply because of the possibility of rates of dumping increasing. (Otherwise, since rates may
also possibly decrease, one could argue that a reduction in security would be equally reasonable.) The
possibility of rates increasing beyond a reasonable level of security, and importers defaulting on that excess, is a
risk inherent in the retrospective system. The Ad Note does not allow Members to seek to eliminate that risk
through the application of unreasonably excessive security requirements.
147 United States' first written submission, para. 37.
148 The United States also argues that the applicati on of the EBR is reasonable because, in addition to
the likelihood of anti-dumping rates increasing, it also reflects the amount of potential liability in the event of
default and the likelihood of default (see para. United Stat es' second written submission, para. 24). Both parties
submitted argumentation regarding the US assessment of the risk of shrimp importers defaulting on anti-
dumping duties in excess of the cash deposits. If the United States had properly established the likelihood of
rates increasing, and the amount of likely increase, we consider that the United States would have been able to
introduce additional security requirements up to that amount. In the context of the application of the EBR, there
is no additional obligation under the Ad Note to assess the risk of default of individual importers. By virtue of
the Ad Note, security may be imposed once a case of su spected dumping is established, such that anti-dumping
duties may be payable. There is nothing in the Ad Note to suggest that security may only be required if it is
further established that importers would not otherwise pay the relevant anti-dumping duties. It is the case of

7.120 The United States asserts that "[t]o analyse the likelihood of potential increases, US Customs
used historical data on increases in the anti-dumping rate". 149 In this regard, the United States refers
to note 29 to para. 27 of its first written submission, where it is stated that "CBP's analysis at the time
indicated that with respect to agriculture/aquaculture cases, rates increased 33 per cent of the time, did
not change 11 per cent of the time, and decreased 56 per cent of the time".
7.121 We note that the United States has not submitte d any documentary evidence in support of its
assertion that anti-dumping rates increased 33 per cent of the time. It is, therefore, impossible to
assess the rigour of the United States' analysis. In pa rticular, it is impossible to verify how the United
States treated cases where the rate may have increased as a result of error on the part of Customs, or
error or fraud on the part of other parties.
150 151 In our view, apparent rate increases resulting from
error or fraud should not be confused with genuine increases in exporters' actual rates of dumping.
7.122 Leaving aside the lack of supporting documen tary evidence, we are in any event not
persuaded that an objective and impa rtial investigating authority could properly conclude that rates of
dumping for subject shrimp were likely to increase on the basis of a finding that, historically, rates
only increased in one third of agricu lture/aquaculture cases generally. 152Furthermore, the United
States has provided no explanation as to how any alleged historical trend in respect of dumping rates
for agriculture/aquaculture cases generally might justify conclusions regarding the likelihood of
dumping rates for subject shrimp specifically. In a ddition, we recall that the EBR is applied on all
imports of subject shrimp. A finding that, histori cally, rates have increased 33 per cent of the time in
respect of agriculture/aquaculture cases generally is no t sufficient, in our view, to demonstrate that all
rates for subject shrimp (in respect of all imports, from all sources) are likely to increase.
7.123 The United States seeks to support its conclusion that rates of dumping would likely increase
by asserting that " USDOC's preliminary results s uggest higher assessment rates for 63 of 70 Indian
companies subject to the original order – 17 of these companies, which had been making cash

suspected dumping that triggers the right to impose security requirements under the Ad Note, not the risk of
default of individual importers. (If this were not the cas e, the United States would be required to assess the risk
of individual importers defaulting before imposing cash deposits.) Although the risk of default does not provide
a basis for requiring security under the express terms of the Ad Note, we see no reason why a Member could not
choose to impose security requirements authorized under th e Ad Note only in respect of those importers with a
greater risk of default.
149 See United States' Responses to First Set of Panel Questions, para. 20.
150 See e.g. Exhibit IND-8, bottom of p. 10.
151 India argues that "the real so urce of defaults in payment of anti-dumping duties appears to be
associated with non-market economy cas es, surety bankruptcies, new shippe r reviews, etc." (see India's
responses Second Set of Panel Questions, para. 76). India also asserts that a "GAO Report concluded that most
defaults in payments of anti-dumping duties arose out of one country (China) and one sector (crawfish)" (see
India's second written submission, para. 87). We do not consider it necessary to review these arguments, though,
since at this juncture we are addr essing US evidence regarding cases in which the rates of dumping increased,
rather than cases resulting in uncollected, or defaulted, anti-dumping duties more generally. (As illustrated at
page 8 of Exhibit IND-8, not all uncollected anti-dumping duties in the crawfish case resulted from increased
rates of dumping. Scenario 1, e.g. which concerns the majority of the unpaid anti-dumping duties in the
crawfish case, concerned the problem of importers from new shippers being allowed to post single entry bonds,
rather than cash deposits, and then defaulting on those bonds (with CBP not able to collect from the surety
because the latter had gone bankrupt).) Furthermore, Exhibit US – 10 suggests that the United States had
evidence of rate increases extending be yond the crawfish case (the United Stat es claims that it had evidence of
rate increases in respect of 13 anti-dumping cases involving 340 exporter/producers; see United States'
responses to Second Set of Panel Questions, note 28; see also the Amendment, which although it refers
explicitly to the crawfish case, al so states that "[r]ecen t anti-dumping cases for agriculture/aquaculture
merchandise have also resulted in considerable rate incr eases"). Given the broad nature of this evidence, there
is no basis to query such evidence by reference to the alleged particularities of a single case.
152 See United States' first written submission, para. 27.

deposits at the 10.17% rate established in the investig ation, may be subject to an assessment rate in
excess of 82%.
153 Increases such as these r esult in unsecured liability, often in excess even of the
additional bond amount."154
7.124 India retorts that the US reliance on the prelimin ary results of the first administrative review
for Indian shrimp exporters to support its argu ment that shrimp exporters pose a genuine non-
collection risk is clearly misplaced. First, th e preliminary results issued on 9 March 2007 cannot
justify the imposition of the EBR on 9 July 2004. S econd, the results are "preliminary," by definition,
and remain subject to correction in the final results of the administrative review. Third, major Indian
exporters have complained that there are obvious cal culation errors that, if corrected, will lower duty
rates considerably. Fourth, the EBR is a self-fulf illing prophecy: US Customs allegedly imposed the
EBR on the basis of its prediction that duty rates will be significantly higher at the end of the
administrative review; however, exporters who are forced to quit the US market on account of the
high costs and collateral requirements of complying with the EBR will not cooperate in the review
and will, therefore, suffer higher duty rates. Fifth, contrary to US suggestions, an initial analysis by
India's Marine Products Export Development Authority ("MPEDA") reveals that only about 4 % of
total shrimp exports by value from India during the period of review were subject to the highest duty
rate of 82%. India submits that, if non-producer exporters are excluded on the ground that the shrimp
they exported was covered in the responses of the actual producers, only about 1.5% of total shrimp
exports from India would be subject to the highest rate of 82%. India further asserts that, in fact, of
the 17 exporters who have been subjected to an ad verse rate of 82%, eight have not exported at all
during the period of review, three are not producer exporters and six have insignificant exports, with
total exports of less than $2,000,000. 44 exporters subject to the "all others rate" have an average rate
of 10.54% against 10.17% in the original investigation, a minor difference of 0.37%. India states that
the three largest exporters received rates of 4.03%, 11.05% and 24.52% respectively, and that this will
result in a refund of $2.88 million to the first company and payments of approximately $250,000 and
$1,000,000 by the other two companies. According to India, therefore, the US assertion that 63 out of
70 companies have suffered higher rates, though factual, does not correctly represent the facts.
7.125 In principle, we do not consider that the prelim inary results of the first administrative review
of the shrimp anti-dumping order are relevant to a determination of whether or not an objective and
impartial investigating authority could properly have found, at the time that the EBR was imposed on
shrimp, that rates of dumping by shrimp exporters were likely to increase. We therefore decline to
base our findings on such ex post rationalization. Even if such analysis were relevant, though, it
would not favour the position of the United States, fo r India has demonstrated – and the United States
has not disputed – that rates only increased for a ve ry small proportion of shrimp imports from India,
and then only to a minor degree.
7.126 For these reasons, we do not consider that an objective and impartial investigating authority
could properly have found, on the basis of the evid ence relied on by the United States at the relevant
time, that the rates of dumping established in the shrimp order were likely to increase.
7.127 In light of our conclusion in the preceding sub-sec tion, we see no need to consider whether or
not the United States properly determined the amount by which rates of dumping were likely to
increase.

153 Certain Frozen Warmwater Shri mp from India: Preliminary Results and Partial Rescission of
Antidumping Duty Administrative Review, 72 Fed. Reg. 10,658, 10,667-68 (9 Mar. 2007) (Exhibit US-6).
154 See United States' first written submission, para. 27.

(iv) Summary
7.128 As a result of our finding that the United Stat es failed to properly establish that the rates of
dumping provided for in the anti-dumping order were likely to increase, we find that the United States
failed to demonstrate that the additional secur ity required through the application of the EBR
reasonably correlated to any case of suspected dum ping in excess of the margin of dumping provided
for in the anti-dumping order. Accordingly, we c onclude that the additional security requirements
resulting from the application of the EBR were not "reasonable" within the meaning of the Ad Note.
(v) Finding on whether or not the application of the EBR was "in accordance with" the Ad Note
7.129 In light of our finding that the application of the EBR was not "reasonable" within the
meaning of the Ad Note, we further find that the application of the EBR was not "in accordance with
the provisions of the GATT 1994, as interpreted by" the Anti-Dumping Agreement.
(c) Conclusion
7.130 Since we have found that the application of the EBR constitutes "specific action against
dumping" that is not "in accordance with the provisions of the GATT 1994, as interpreted by" the
Anti-Dumping Agreement , we conclude that the application of the EBR is inconsistent with
Article 18.1 of the Anti-Dumping Agreement . In light of the above analysis, we also find that the
application of the EBR to subject shrimp is inconsistent with the Ad Note.
7.131 We note that India has also made a claim under Article 1 of the Anti-Dumping Agreement .
That claim is necessarily dependent on India's Article 18.1 claim. Since we have found that the
application of the EBR to subject shrimp is inconsistent with Article 18.1, we likewise find that it is in
violation of Article 1 of the Anti-Dumping Agreement.
3. Articles 7.1(iii), 7.2 and 7.4 of the Anti-Dumping Agreement
(a) Main arguments of India
7.132 India submits that the application of the E BR is inconsistent with the requirements of
Article 7 of the Anti-Dumping Agreement as applied to importers of shrimp from India. India
explains that it considers it necessary to evaluate the consistency of the EBR with the provisions of
Article 7 of the Anti-Dumping Agreement as applied for two reasons:
 (1) The United States served notices requiring importers of shrimp from India to provide
enhanced, continuous bonds shortly after the preliminary affirmative determination
dated 4 August 2004 and well before the Anti-dumping Order on 1 February 2005.
Further, the Amended CBD does not make pr ovision for the termination of the EBR
after the issuing of the Order in the case. Rather, it requires the enhanced bond to be
renewed so as to reflect the duty rate currently specified in the Order.

 (2) The United States may seek to defend the EBR as being a "provisional measure"
consistent with Article 7 of the Anti-Dumping Agreement even in cases where the
United States imposed the EBR on importers after the order in an anti-dumping or
countervailing duty case. India submits that the United States may argue that the
EBR is intended to secure the collection of duties after the final liability is assessed in
administrative review proceedings under its retrospective assessment system.

7.133 India submits that, in both instances, the applica tion of the EBR is inconsistent with Article 7
of the Anti-Dumping Agreement.

7.134 India asserts that, under Article 7.1(iii) of the Anti-Dumping Agreement, it is necessary that
"the authorities concerned judge such measures ne cessary to prevent injury being caused during the
investigation". According to India, the stated reasons for introducing the EBR, however, do not
mention injury being caused during the investigatio n at all and focus rather on protecting revenue
against any failure on the part of importers to pay the duties finally assessed and ensuring that
payments are made to domestic industry pursuant to th e CDSOA that was held to be inconsistent with
the obligations of the United States in US – Offset Act (Byrd Amendment) . India therefore submits
that, if the EBR is a provisional measure, it is inconsistent with Article 7.1(iii) of the Anti-Dumping
Agreement.
7.135 India asserts that the EBR is also inconsistent with Article 7.2 of the Anti-Dumping
Agreement, since provisional measures, whether in the form of a cash deposit or a bond, may not be
for an amount in excess of the "provisionally estimated margin of dumping" or the "provisionally
calculated amount of subsidization", as the case may be.
7.136 India also submits that the EBR is inconsistent with Article 7.4 of the Anti-Dumping
Agreement, which limits application of provisional measures to "a period not exceeding four months,"
to the extent that the EBR on importers is introduced or remains in place on any date after six months
have elapsed in the anti-dumping case from the date on which provisional measures are first imposed.
(b) Main arguments of the United States
7.137 The United States submits that Article 7 of the Anti-Dumping Agreement does not apply to the
EBR. The United States argues that India appears to conflate the requirement of reasonable security
contained in the Ad Note with Article 7 of the Anti-Dumping Agreement regarding provisional
measures (i.e., measures taken prior to a final determination of dumpi ng or subsidization).
155 T h e
United States asserts that the bond directive, however, is a security requirement imposed after the
final determination of dumping or subsidization, pending "determi nation of the final liability for
payment of anti-dumping duties," and is therefore not a "provisional measure" within the meaning of
Article 7 of the Anti-Dumping Agreement.
7.138 With respect to India's argument that EBR was applied in certain cases prior to the issuance of
the order and therefore constitutes a "provisional measure" inconsistent, as applied, with Article 7 of
the Anti-Dumping Agreement,156 the United States asserts that the October 2006 Notice makes clear
that the directive no longer covers additional bond amounts requested prior to issuance of an order.157
(c) Evaluation by the Panel
7.139 We first note the relevant provisions as discussed by India in its claims under Article 7 of the
Anti-Dumping Agreement:
7.140 Article 7.1(iii) provides:
"Provisional measures may be applied only if:
(iii) the authorities concerned j udge such measure s necessary to
prevent injury being caused."

155 India's first written submission, para. 92 (asserting that "[i]t is clear that the 'reasonable security
(bond or cash deposit)' referred to in the Ad Note is the same as the provisional measures referred to in Article 7
of the Anti-Dumping Agreement.").
156 India's first written submission, para. 85.
157 Exhibit IND-6, p. 62,277 (cf. Exhibit IND-3, p. 2-3).

7.141 Article 7.2 provides:
"Provisional measures may take the form of a provisional duty or, preferably, a
security – by cash deposit or bond – equal to the amount of the anti-dumping duty
provisionally estimated, being not greater than the provisionally estimated margin of
dumping. Withholding of appraisement is an appropriate provisional measure,
provided that the normal duty and the esti mated amount of the anti-dumping duty be
indicated and as long as the withholding of appraisement is subject to the same
conditions as other provisional measures."
7.142 Article 7.4 provides:
"The application of provisional measures sh all be limited to as short a period as
possible, not exceeding four months or, on decision of the authorities concerned,
upon request by exporters representing a significant percentage of the trade involved,
to a period not exceeding six months. Wh en authorities, in the course of an
investigation, examine whether a duty lowe r than the margin of dumping would be
sufficient to remove injury, these periods may be six and nine months, respectively."
7.143 We recall that India advanced two reasons for rais ing its Article 7 claims. First, India alleged
application of the EBR as a provisional measure, prior to the imposition of the anti-dumping order.
Second, in the event that the United States woul d seek to defend the application of the EBR by
reference to Article 7 of the Anti-Dumping Agreement. In view of the US arguments set forth above,
it is evident that the United States has not sought to defend the application of the EBR under Article 7.
Accordingly, we shall focus our evaluation on India' s claim regarding the alleged application of the
EBR prior to the imposition of the anti-dumping order.
7.144 Prior to the imposition of the anti-dumping order on subject shrimp from India on 1 February
2005, and on the basis of its prel iminary determination of dumping, injury, and causality, in August
2004 the United States imposed provisional measures on imports of subject shrimp in the form of cash
deposits or (non-EBR) bonds. We refer to these as the "initial provisional measures". The amount of
these initial provisional measures was "equal to the weighted-average amount by which the [normal
value] exceeds the [export price]".
158
7.145 In response to a question from the Panel, the United States acknowledges that, prior to the
publication of the anti-dumping order on 1 February 200 5, certain importers were also requested to
submit enhanced bonds in addition to the abovementioned initial provisional measures. In particular,
the United States accepts that, from 6-10 August 2004, officers in one US Customs office sent
requests for additional bonds to eleven importers of shrimp (including one importer of shrimp from
Thailand and India), referring to the enhanced bon d directive. Subsequently, on 22 October 2004,
once in November 2004 and three times in January 2005, US Customs officers sent requests for
additional bonds to a total of 21 importers. 159 In our view, these additional bond requests should be
treated as provisional measures, since they were is sued prior to the publication of the anti-dumping
order.
7.146 In accordance with Article 7.2 of the Anti-Dumping Agreement, provisional measures may not
exceed "the amount of the anti-dumping duty prov isionally estimated." Since the United States
applied initial provisional measures in "the amount of the anti-dumping duty provisionally estimated",
the application of the EBR (prior to imposition of the anti-dumping order) in conjunction with the
initial provisional measures necessarily resulted in th e imposition of provisional measures (i.e., the

158 See Notice of Preliminary Determination, page 47,119.
159 See United States' responses to First Set of Panel Questions, paras. 34-35.

initial provisional measures together with the EBR) in excess of "the amount of the anti-dumping duty
provisionally estimated," contrary to Article 7.2 of the Anti-Dumping Agreement.
7.147 In light of our finding under Article 7.2 of the Anti-Dumping Agreement, we do not consider
it necessary to examine India's claims under Articles 7.1(iii) and 7.4 of the Anti-Dumping Agreement.
4. Articles 9.1, 9.2, 9.3, and 9.3.1 of the Anti-Dumping Agreement, and Article VI:2 of the
GATT 1994
(a) Main arguments of India
7.148 India also claims that the EBR as applied to importers of shrimp from India is inconsistent
with Article 9 of the Anti-Dumping Agreeement because "it is impermissible to demand an enhanced,
continuous bond in addition to the duties collected in an amount equal to the dumping margin or the
amount of the subsidy found to exist"
160 following a final determination in the initial investigation.
7.149 India asserts that Article 9.2 of the Anti-Dumping Agreement only permits the imposition of
anti-dumping duties in "appropriate amounts." As an "appropriate amount," India claims that
Article 9.3 of the Anti-Dumping Agreement does not permit anti-dumping duties that exceed the
margin of dumping.
7.150 Additionally, India argues that Article 9.3.1 of the Anti-Dumping Agreement does not confer
any right to Members operating a retrospective duty assessment system to impose any additional
measure except for anti-dumping duties. According to India, this was confirmed by the Appellate
Body in US – 1916 Act , with the finding that the Anti-Dumping Agreement limits permissible
responses to dumping to definitive anti-dumpi ng duties, provisional measures, or price
undertakings.161 Thus, after issuance of an anti-dumping or der, India argues that the United States
may only collect anti-dumping duties in an amount no greater than specified dumping margins, and
not additionally a bond as a provisional measure. India claims that Article 9.3.1of the Anti-Dumpnig
Agreement would not have referred to a refund unless some amount had already been collected prior
to determination of final liability, i.e. cash deposit that are collected in the United States' retrospective
system. Moreover, India believes that discussion of a refund in Article 9.3.1 of the Anti-Dumping
Agreement presupposes the collection of duties in cash or cash deposits, and not the taking of a bond
or other measure based on this language choice.
(b) Main arguments of the United States
7.151 The United States argues that the context provided by Article 9 of the Anti-Dumping
Agreement supports its interpretation that the Ad Note permits a Member to take reasonable security
during the period in a retrospective assessment syst em following a final determ ination and prior to a
final assessment review for a transac tion of goods. The United States argues that Article 9.2 of the
Anti-Dumping Agreement does not preclude a Member from requiring security after the final
determination in the investigation and pending fi nal determination of the facts with respect to
payment of duties. The United States submits that Article 9.2 of the Anti-Dumping Agreement allows
Members to collect anti-dumping duties "in the appropriate amounts in each case." Moreover,
Article 9.3 states that "[t]he amount of the anti-dumping duty shall not exceed the margin of dumping
as established under Article 2." According to th e United States, the margin of dumping established
following the assessment review described in Article 9.3.1 of the Anti-Dumping Agreement is a
margin of dumping that is calculated in accordance with Article 2 of the Anti-Dumping Agreement.

160 See India's first written submission, para. 77.
161 Appellate Body Report, US – 1916 Act (EC) , para. 114; Appellate Body Report, US – Offset Act
(Byrd Amendment), para. 269.

The United States argues that the cash deposit and E BR ensure or secure payment of this amount of
duty in accordance with Article 9.2 of the Anti-Dumping Agreement. The United States submits that
Article 9.3.1 of the Anti-Dumping Agreement reaffirms this. According to the United States,
Article 9.3.1 of the Anti-Dumping Agreement also clarifies that final liability for payment of anti-
dumping duties occurs as the final determination of th e facts with respect to payment—the end of an
assessment period—like the terminology used in the Ad Note. 162
7.152 The United States criticises India's argument that the phrase "margin of dumping" in
Article 9.3 of the Anti-Dumping Agreement refers to the margin of dumping established in a dumping
investigation or during a previous administrative review. 163 The United States argues that the margin
of dumping is based on actual analysis of particul ar entries during an assessment review in order to
establish the final liability for payment of anti-dumping duties.
(c) Evaluation by the Panel
7.153 We first note the relevant provisions as discussed by India in its claims under Article 9 of the
Anti-Dumping Agreement and Article VI:2 of the GATT 1994.
7.154 Article 9.1 provides:
"The decision whether or not to impose an anti-dumping duty in cases where all
requirements for the imposition have been fulfilled, and the decision whether the
amount of the anti-dumping duty to be imposed shall be the full margin of dumping
or less, are decisions to be made by the authorities of the importing Member. It is
desirable that the imposition be permissive in the territory of all Members, and that
the duty be less than the margin if such l esser duty would be adequate to remove the
injury to the domestic industry."
7.155 Article 9.2 provides:
"When an anti-dumping duty is imposed in respect of any product, such anti-dumping
duty shall be collected in the appropriate amounts in each case, on a non-
discriminatory basis on imports of such product from all sources found to be dumped
and causing injury, except as to imports from those sources from which price
undertakings under the terms of this Agre ement have been accepted. The authorities
shall name the supplier or suppliers of th e product concerned. If, however, several
suppliers from the same country are involved, and it is impracticable to name all these
suppliers, the authorities may name the supplying country concerned. If several
suppliers from more than one country are involved, the authorities may name either
all the suppliers involved, or, if this is impracticable, all the supplying countries
involved."
7.156 Article 9.3 provides:
"The amount of the anti-dumping duty shall not exceed the margin of dumping as
established under Article 2."
7.157 Article 9.3.1 provides:

162 United States' second written submission, para. 6-7.
163 United States' second written submission, para. 18.

"When the amount of the anti-dumping duty is assessed on a retrospective basis, the
determination of the final liability for payment of anti-dumping duties shall take place
as soon as possible, normally within 12 mont hs, and in no case more than 18 months,
after the date on which a request for a final assessment of the amount of the anti-
dumping duty has been made.(footnote omitted) Any refund shall be made promptly
and normally in not more than 90 days following the determination of final liability
made pursuant to this sub-paragraph. In any case, where a refund is not made within
90 days, the authorities shall provide an explanation if so requested."
7.158 Article VI:2 of the GATT 1994 provides:
"In order to offset or prevent dumping, a contracting party may levy on any dumped
product an anti-dumping duty not greater in amount than the margin of dumping in
respect of such product. For the purposes of this Article, the margin of dumping is the
price difference determined in accordance with the provisions of paragraph 1."
7.159 As indicated by the title to that provision, Article 9 of the Anti-Dumping Agreement is
concerned with the "imposition and collection of anti-dumping duties" (emphasis added). Consistent
with this title, the disciplines set forth in Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping
Agreement concern the imposition and collection of anti-dumping duties. In our view, therefore,
measures other than anti-dumping duties fall outside the scope of those provisions. Accordingly, we
shall begin our analysis of India's claim by cons idering whether or not the enhanced bond required by
the EBR is an anti-dumping duty. If it does not, India's claim must necessarily fail.
7.160 In the context of our review of India's claim under Article 18.1 of the Anti-Dumping
Agreement, we noted India's argument
164 that the term "duty" is defined in the tax context as "the
payment to the public revenue levied on the impor t, export, manufacture or sale of goods …". 165 In
our view, this definition of the term "duty" is not broad enough to encompass the enhanced bond
requirements imposed in respect of subject shrimp . Unlike duties, bonds do not yield public revenue,
in the sense that bonds have no intrinsic value in and of themselves. A bond is not a payment to yield
public revenue at the time it is provided, but rath er, is provided as a form of security. A bond will not
yield public revenue until some point in the future when it is converted from a security into a form of
payment. Indeed, we recall that India itself ac knowledges that "based on the ordinary meaning and
the meaning in legal parlance of the terms "provi sional duties" and "security", there is clearly a
difference, as a matter of law, between collecting du ties, provisionally or otherwise, and the taking of
security in the form of bonds or cash deposits."166
7.161 For these reasons, we conclude that the enhan ced bond is not an anti-dumping duty, with the
result that the application of the EBR falls outside the scope of Article 9 of the Anti-Dumping
Agreement.
7.162 We also note India's claim under Article VI:2 of the GATT 1994 . Like Article 9 of the
Anti-Dumping Agreement , that provision contains disciplines regarding the levy of anti-dumping
"duties". Accordingly, the application of the EBR al so falls outside the scope of Article VI:2 of the
GATT 1994.

164 See India's responses to Second Set of Panel Questions, para. 29.
165 The New Shorter Oxford English Dictionary, L. Brown (ed.) (Clarendon Press, 1993), Vol. I, p. 769.
166 See India's responses to Second Set of Panel Questions, para. 33.

5. Other as applied claims by India under the GATT 1994
7.163 The Panel notes that India has made a number of additional as applied claims under the
GATT 1994. In particular, India has requested the Panel to find that the EBR as applied to imports of
shrimp from India is inconsistent with Article X:3(a) of the GATT 1994 and with Articles I:1, II:1(a)
and (b) of the GATT 1994 or, alternatively, with Articles XI:1 and XIII of the GATT 1994.
7.164 We recall that we have found that the applicati on of the EBR is inconsistent with Article 18.1
of the Anti-Dumping Agreement because it does not constitute reasonable security in accordance with
the provisions of the Ad Note. We have also found that the application of the EBR to importers prior
to imposition of the anti-dumping order violated Article 7.2 of the Anti-Dumping Agreement.
7.165 The Panel, after careful consideration, on th e basis of judicial economy, refrains from ruling
on India's claims under Articles X:3(a), XI:1 and XIII, I:1, II:1(a) and (b) of the GATT 1994. The
Panel recalls that the principle of judicial economy is recognized in WTO law. The Appellate Body
has consistently ruled that panels are not require d to address all the claims made by a complaining
party. In fact, a panel has discretion to determine which claims it must address in order to resolve the
dispute between the parties, provided that those claims are within its terms of reference. 167 T h e
Appellate Body has relied on the explicit aim of the dispute settlement mechanism, which is to secure a
positive solution to a dispute, as provided in Article 3.7 of the DSU, or a satisfactory settlement of the
matter as per Article 3.4 of the DSU. The Appellate Body has stressed that the basic aim of dispute
settlement in the WTO is to settle disputes and not to "make law" by clarifying existing provisions of
the WTO Agreement that fall outside the context of resolving a particular dispute:
"[G]iven the explicit aim of dispute settlement that permeates the DSU, we do not
consider that Article 3.2 of the DSU is meant to encourage either panels or the
Appellate Body to 'make law' by clarifying existing provisions of the WTO
Agreement outside the context of resolving a particular dispute. A panel need only
address those claims which must be addressed in order to resolve the matter in issue
in the dispute.
168"169
7.166 We bear in mind that, in Australia – Salmon , the Appellate Body cautioned panels against
false judicial economy arguing that the right to exercise judicial economy could not be exercised
where only a partial resolution of a dispute would result:
"The principle of judicial economy has to be applied keeping in mind the aim of the
dispute settlement system. This aim is to resolve the matter at issue and 'to secure a
positive solution to a dispute'. To provide only a partial resolution of the matter at
issue would be false judicial economy. 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 a llow 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.'"
170
7.167 The Panel believes that this is not the case in the current proceedings. In making findings
under Article 18.1 of the Anti-Dumping Agreement, the Panel believes that it has effectively resolved

167 Appellate Body Report. India – Patents (US), para. 87.
168 (footnote original) The "matter in issue" is the "matter referred to the DSB" pursuant to Article 7 of
the DSU.
169 Appellate Body Report, US – Wool Shirts and Blouses , DSR 1997:I, 323 at 340. See also Panel
170 Appellate Body Report, Australia – Salmon , para. 223. See also Panel Report, EC – Sardines,
paras. 7.148-7.152; Appellate Body Report, US – Steel Safeguards, para. 10.703.

this aspect of the dispute. The Panel finds support for its exercise of judicial economy in the practice
of panels and the Appellate Body in previous dispute settlement proceedings. For example, as regards
India's claim under Article XI:1 of the GATT 1994, the Panel in US – 1916 Act (Japan) , after finding
a violation of Article VI, held that in the case before it, Article VI addressed the "basic feature" of the
measure at issue more directly than Article XI alth ough this did not mean that Article VI applied to
the exclusion of Article XI:1. On that occasion, the Panel found that it was entitled to exercise
judicial economy and decided not to review the claims of Japan under Article XI.
171 Precedent also
exists as regards India's claim under Article X:3(a) of the GATT 1994. In previous disputes, after
having found violations of, inter alia, Article I of the GATT 1994172, Article 11.2 of the Anti-Dumping
Agreement173 and Article 2.4.1 of the Anti-Dumping Agreement 174, the respective Panels did not
consider it necessary to examine the Article X:3(a) claims.
7.168 Even if the Panel would have found that the app lication of the EBR is not inconsistent with
Article 18.1 of the Anti-Dumping Agreement, the Panel is of the view that it would not be appropriate
to proceed and rule on India's additional GATT 1994 claims. We note that the text of Article 18.1 of
the Anti-Dumping Agreement provides that "[n]o specific action against dumping of exports from
another Member can be taken except in accordance with the provisions of the GATT 1994, as interpreted
by this Agreement." We recall that this reference to the provisions of GATT 1994 has been interpreted
by the Appellate Body as referring to Article VI of the GATT 1994. We further recall that the Ad Note
is an integral part of Article VI of the GATT 1994. We therefore interpret these provisions to mean that
the WTO Agreements allow for the imposition of measures whic h are considered to be specific action
against dumping provided they are in accordance with Article VI of the GATT 1994, including its
Ad Note.175 Accordingly, we are unable to accept that a measure which constitutes specific action
against dumping in accordance with the provisions of the Ad Note, can nevertheless be found
inconsistent with other provisions of the GATT 1994. For example, if we were to find that the
Amended CBD violates the MFN provision of Article I of the GATT 1994, such a finding would, as a
consequence, render inutile the provision in Article 18.1 of the Anti-Dumping Agreement , and by
reference, Article VI of the GATT 1994 and the Ad Note.
7.169 We find additional support for our conclusion in the General Interpretative Note to Annex 1A
of the WTO Agreement , which provides that in the event of conflict between a provision of the
GATT 1994 and another Agreement of Annex 1A, the provi sion of the other Agreement prevails. We
have found that the Amended CBD constitutes speci fic action against dumping or subsidisation in
accordance with Article VI of the GATT 1994, as interpreted by the Anti-Dumping Agreement, and
thus, is consistent with Articles 1 and 18.1 of the Anti-Dumping Agreement. Therefore, our findings
under these provisions of the Anti-Dumping Agreement must prevail over any potential finding of
violation under Articles X:3(a), XI:1 and XIII, I:1, II:1(a) and (b) of the GATT 1994.
7.170 Finally, we consider the Panel's discussion in US – 1916 Act (Japan) further relevant to this
issue. After finding a violation of Article VI of the GATT 1994, the Panel considered whether it must
also analyse a claim under Article III:4 of the GATT 1994. It held that, in the case before it,
Article VI addressed the "basic feature" of the measur e at issue more directly than Article III:4. In
doing so, the Panel referred to the international law principle lex specialis derogat legi generali in

171 Panel Report, US – 1916 Act (Japan), para. 6.281.
174 Panel Report, US – Stainless Steel, para. 6.55.
175 This finding is, of course, without prejudice to the operation and application of note 24 to
Article 18.1 of the Anti-Dumping Agreement . In this regard, we note and agree with the Appellate Body's
finding in US – Offset Act (Byrd Amendment) (para. 262) that "an action that is not 'specific' within the meaning
of Article 18.1 of the Anti-Dumping Agreement and of Article 32.1 of the SCM Agreement, but is nevertheless
related to dumping or subsidisation, is not prohibited by Article 18.1 of the Anti-Dumping Agreement or
Article 32.1 of the SCM Agreement." Such action would be governed by other provisions of the GATT 1994.

support of its reasoning. 176 The Panel did so by virtue of the Appellate Body's finding in EC –
Bananas III that:
"Although Article X:3(a) of the GATT 1994 and Article 1.3 of the Licensing
Agreement both apply, the Panel, in our view, should have applied the Licensing
Agreement first, since this agreement deals specifically, and in detail, with the
administration of import licensing procedures. If the Panel had done so, then there
would have been no need for it to a ddress the alleged inconsistency with
Article X:3(a) of the GATT 1994."177
7.171 We agree that the principle of lex specialis should apply in such circumstances. Since
Article VI of the GATT 1994, including the Ad Note, "deals specifically, and in detail", with the issue
of security for definitive anti-dumping and countervailing duties, those provisions address the "basic
feature" of the measure at issue more directly than the other GATT 1994 provisions cited by India.
Article VI and the Ad Note therefore constitute lex specialis that should prevail over the more general
GATT 1994 provisions cited by India.
7.172 For the above reasons, we conclude that it would not be appropriate for us to proceed and rule
on India's claims under Articles X:3(a), XI:1 and XIII, I:1, II:1(a) and (b) of the GATT 1994, and we
decline to do so.
C. INDIA'S AS SUCH CLAIMS
1. Scope of the measure concerned
7.173 As a necessary first step in the analysis of India's as such claims, the Panel is to identify the
scope of the measure at issue. For its as such claims, India has identified as the relevant measure any
amendments, clarifications, or extensions comp rising the Amended CBD, any related implementing
measures, the statutory provision 19 U.S.C. § 1673, and finally the regulatory provision 19 C.F.R. §
113.13.
(a) Scope of the Amended CBD
7.174 As we concluded in Section V II.B.1 above when dealing with the scope of the measure at
issue in respect to India's as applied claims, the Amended CBD comprises (i) the Customs Bond
Directive 99-3510-004 on Monetary Guidelines fo r Setting Bond Amounts, published on 23 July
1991; (ii) the July 2004 Amendment;
178 (iii) the document Current Bond Formulas; 179 (iv) the August
2005 Clarification;180 and (v) as India indicated in its Request for Establishment, "any amendments,
clarifications, or extensions to these measures and all related or implementing measures (together, the
'Amended CBD') issued by US Customs." 181 We also recall that a later instrument, the October 2006
Notice, which was not yet published when India s ubmitted its Request for Establishment, has been
found by this Panel to be part of the measure concerned and thus within its terms of reference.
(b) The statutory provision 19 U.S.C. § 1673 and the regulatory provision 19 C.F.R. § 113.13
7.175 Having clarified which legal instruments comprise the Amended CBD, the Panel must also
address one additional coverage issue: India's requ est to include the statutory provision 19 U.S.C. §

176 Panel Report, US – 1916 Act (Japan), para. 6.269.
177 Appellate Body Report, EC – Bananas III, para. 204.
178 Exhibit IND-3.
179 Exhibit IND-4.
180 Exhibit IND-5.
181 India's first written submission, para. 17.

1673 and the regulatory provision 19 C.F.R. § 113.13 with in the scope of the measu re at issue. Both
provisions were mentioned in India's Request for Es tablishment but were not included in its Request
for Consultations. Unlike with the October 2006 No tice, the United States has strongly contested the
inclusion of both provisions within our terms of re ference. The United States argues that we should
not consider them because they were not mentioned in India's Request for Consultations.
7.176 The Panel will thus consider whether it may consider 19 U.S.C. § 1623 and 19 C.F.R. §
113.13 as within its terms of reference. The Pane l will first look at the circumstances surrounding the
inclusion of these two provisions in India's claim. As mentioned, India did not refer to these statutory
or regulatory provisions in its Request for Consultations.
182 H o w e v e r , i n i t s R e q u e s t f o r
Establishment, in addition to identifying th e legal instruments encompassing the Amended CBD,
India stated:
"[India] understands that the Amended CBD was adopted pursuant to the laws and
regulations of the United States that author ize [US Customs] to administer customs
laws and regulations including 19 U.S.C. §1484, 19 U.S.C. §1502, 19 U.S.C. §1505,
19 U.S.C. §1623, and 19 U.S.C. §1673g, and the regulations governing the amount
and imposition of bonds codified at 19 C. F.R. §113.13, 19 C.F.R. §113.40, 19 C.F.R.
§113.62 and 19 C.F.R. §142.2."
183
7.177 India has commented on the inclusion of these United States customs laws and regulations
(which include among them, 19 U.S.C. § 1623 and 19 C.F.R. § 113.13) in its later submissions to the
Panel. In its first written submission, India subm its that the United States had indicated during the
course of consultations that these identical statutor y and regulatory provisions authorize US Customs
to impose the EBR.
184 India also specified in its first writte n submission that it considered 19 U.S.C.
§ 1623(a), 19 C.F.R. § 113.1, and 19 C.F.R. § 113. 13 as the authorizing provisions. Subsequently,
India clarified that it would focus on 19 U.S.C. § 1623 and 19 C.F.R. § 113.13 with respect to its as
such claims, claiming that the United States admitted these were the relevant provisions.185
7.178 Therefore, for purposes of its as such claims, India requests that the Panel consider 19 U.S.C.
§ 1623 and 19 C.F.R. § 113.13 alongside the Amende d CBD. As an explanation as to why the Panel
should consider these provisions within its terms of reference, India argues that the Request for
Establishment of a Panel defines the scope of th e Panel's terms of reference and there is no
requirement of a "precise and exact identity" betw een the measures subject to consultations and the
measures identified in India's Panel request.186
7.179 The United States argues that India's claim with respect to 19 U.S.C. § 1623 and 19 C.F.R. §
113.13 is improper since these provisions were not in cluded in India's Request for Consultations and
thus do not fall within the Panel's terms of refere nce. The United States contends that panels are
limited to evaluating what was included in the Request for Consultations. Moreover, the United
States submits that what may or may not have take n place during consultations is not relevant when
reviewing whether a consultation requirement has been met. 187 Regardless of this omission, the

182 See WT/DS345/1. India concedes that these measur es were not included in its Request. (See India's
second written submission, para. 7).
183 See WT/DS345/6.
184 India's first written submission, para. 16.
185 See India's first oral statement, para. 15; India's responses to First Set of Panel Questions, para. 38.
In its answers to the First Set of Panel Questions, India reiterated that it wishes to "limit its claims in respect of
statute and regulatory provisions to 19 USC. [§]1623 and 19 C.F.R. [§]113.13".
186 India's second written submission, para. 8.
187 United States' second written submission, para. 41, citing to Appellate Body Report, Mexico – Corn

United States argues that these provisions are stric tly authorizing provisions and do not require WTO-
inconsistent action.
7.180 With the parties views in mind, we now addres s whether the measure at issue should include
19 U.S.C. § 1623 and 19 C.F.R. § 113.13 within its terms of reference. We indicated what are the
terms of reference governing this di spute in paragraph 7.12 above. We explained in paragraphs 7.16-
7.19 above that Article 7 of the DSU governs the Panel's terms of reference, Article 4 of the DSU
governs a complainant's request for c onsultations, and Article 6 of the DSU governs a complainant's
request for establishment of a panel. We also noted that a panel's terms of reference are governed by
the Request for Establishment of a panel.
188 We note that the issue of whether the October 2006
Notice should be included with the Panel's terms of reference has no bearing on whether 19 U.S.C. §
1623 and 19 C.F.R. § 113.13 should also be included, since these provisions are not amendments or
modifications to the measure at issue, but altogether separate provisions.
7.181 We adopt the view of the Appellate Body that a panel's terms of reference are governed by the
request for establishment of a panel. 189 We also consider this in light of the Article 6.2 of the DSU,
which requires that the request for est ablishment of a panel "identify the specific measure at issue"
(emphasis added), and Article 4.4 of the DSU, which provides that any request for consultations must
give "identification of the measures at issue". Necessarily then, a panel's terms of reference will
include the specific measure as identified in the re quest for establishment of a panel, and moreover,
such a measure should also have been identified in a complainant's request for consultations, to some
degree that is less than "specific". Articles 4 and 6, however, do not indicate to what degree the
identification of the measure in the request for cons ultations must relate to the identification of the
measure in the request for establishment.
7.182 We therefore must consider if any basis ex ists, in light of Articles 4 and 6 of the DSU, to
permit the inclusion of a measure that is mentioned in India's Request for Establishment but not in its
Request for Consultations. In attempting to answer this question, we note that the Appellate Body in
Brazil – Aircraft stated: "Articles 4 and 6 of the DSU … set forth a process by which a complaining
party must request consultations, a nd consultations must be held, befo re a matter may be referred to
the DSB for the establishment of a panel." 190 In this same Report the Appellate Body, however, also
rejected the notion that "Articles 4 and 6 of the DSU ... require a precise and exact identity between
the specific measures that were the subject of consul tations and the specific measures identified in the
request of the establishment of a panel." 191 Adhering to its view in Brazil – Aircraft , the Appellate
Body in US – Upland Cotton later cautioned the following:
"We emphasize that consultations are but the first step in the WTO dispute settlement
process. They are intended to 'provide the parties an opportunity to define and
delimit the scope of the dispute between them'.192 We also note that Article 4.2 of the
DSU calls on a WTO Member that receives a request for consultations to 'accord
sympathetic consideration to and afford adequate opportunity for consultation
regarding any representations made by anot her Member'. As long as the complaining
party does not expand the scope of the dis pute, we hesitate to impose too rigid a
standard for the 'precise and exact identity' 193 between the scope of consultations and

188 See para. 7.19 above, discussing Appellate Body Report, US – Upland Cotton, para. 284.
189 See e.g. Appellate Body Report, US – Upland Cotton, para. 284, citing to Appellate Body Report on
US – Carbon Steel, para. 124.
190 Appellate Body Report, US – Certain EC Products , para. 70, citing to Appellate Body Report,
Brazil – Aircraft, para. 131.
191 Appellate Body Report, Brazil – Aircraft, para. 132 (emphasis orignal).
192 (footnote original) Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US), para. 54.
193 (footnote original) Appellate Body Report, Brazil – Aircraft, para. 132 (emphasis omitted).

the request for the establishment of a pane l, as this would substitute the request for
consultations for the panel request. According to Article 7 of the DSU, it is the
request for the establishment of a panel that governs its terms of reference, unless the
parties agree otherwise.
194"195
7.183 In addition to its views presented in Brazil – Aircraft and US – Upland Cotton, the Appellate
Body has also found that a measure challenged by a party does not properly fall within a panel's terms
of reference simply because that measure w as referred to in the panel request. In US – Certain EC
Products, the Appellate Body addressed a situation where an action undertaken after the consultations
was not identified in the Request for Consultati ons although it was included in the Request for
Establishment.196 The measure was not the subject of the consultations because it happened after the
submission of the consultations request. In its an alysis, the Appellate Body developed a standard to
consider whether an instrument included in the Request for Es tablishment but absent from the
Request for Consultations could nevertheless be considered as a measure at issue and therefore part of
the Panel's mandate: whether the alleged measures at issue are separate and legally distinct
measures.197
7.184 In the case before us, India's Request for Consultations is clearly silent in respect of 19 U.S.C.
§ 1623 and 19 C.F.R. § 113.13. The text of Indi a's Request for Consultations (including its
footnotes)198 refers only to the legal instruments that comprise the Amended CBD (with the exception

194 (footnote original) Appellate Body Report, US – Carbon Steel, para. 124.
195 Appellate Body Report, US – Upland Cotton, para. 293.
196 See Appellate Body Report, US – Certain EC Products, paras. 69-70.
197 The Appellate Body evaluated one measure at issue in this dispute, the "increased bonding
requirements as of 3 March on EC listed products", against a separate measure, the "19 April action" governing
the imposition of 100 per cent duties on certain designated products imported from the European Communities.
See Appellate Body Report, US – Certain EC Products, para. 60.
198 India's Request for Consultations provides, in relevant part:

"My authorities have instructed me to request consultations with the United States of America
(the 'United States') pursuant to Article 4 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes, Article XXII:1 of the General Agreement on Tariffs
and Trade 1994 (the 'GATT'), Article 17 of the Agreement on Implementation of Article VI of
the General Agreement on Ta riffs and Trade 1994 (the ' Anti-Dumping Agreement ') and
Article 30 of the Agreement on Subsidies and Countervailing Measures (the ' Subsidies
Agreement') with respect to the Customs Bond Directive 99 3510-004 on Monetary Guidelines
for Setting Bond Amounts issued on 23 July 1991 , as amended by the Amendment to Bond
Directive 99-3510-004 for Certain Merchandise subject to Antidumping/Countervailing
Duties dated 9 July 2004
1, and any clarifications and amendments thereof 2 (together, the
'Amended Bond Directive').

…

Pursuant to the Amended Bond Directive, the United States has imposed the enhanced bond
requirement on importers of the subject merchandise from India.

The Government of India considers that th e Amended Bond Directive is inconsistent as such
..."
Internet Website of the United States Cu stoms and Border Protection Service at
http://www.cbp.gov /linkhandler/cgov/impor t/communications_to_trade/pilot_program/

of the October 2006 Notice, an issue which we ha ve already addressed above in Section VII.B.1
above. India in fact concedes that its Request for Consultations does not refer to any US statutory and
regulatory provisions.199
7.185 With respect to India's reference to 19 U.S.C. § 1623 and 19 C.F.R. § 113.13 in its Request
for Establishment, we note that paragraph 7.176 above lists both of these provisions alongside several
other US statutory and regulatory measures.
7.186 We thus consider 19 U.S.C. § 1623 and 19 C.F.R. § 113.13, as identified in India's Request
for Establishment of a Panel but not its Request for Consultations. The Panel will not consider the
actual statements made during consultations, but only the consultation request and the measures
themselves in determination of the scope of the measure. As the Appellate Body in US – Upland
Cotton explained, referring to the approach adopted by the Panel in Korea – Alcoholic Beverages ,
"...[w]hat takes places in ...consultations is not the concern of a panel".200
7.187 In light of the Appellate Body's findings in US – Certain EC Products that it is necessary to
examine what two measures actually do in order to determine the legal relationship between these two
measures, we will examine, on the basis of factual findings of the Panel, what the Amended CBD, 19
U.S.C. § 1623 and 19 C.F.R. § 113.13 each actually do, or provide for.
7.188 We begin our assessment with the Amended CBD. The texts of the instruments comprising
the Amended CBD indicate on their face that the measure addresses the imposition of the EBR to
"covered cases" of "special category" merchandise. The August 2004 Amendment indicates that one
of the goals of amending the bond directive is "ensuring [US Customs'] ability to collect the
anti-dumping and countervailing dutie s at liquidation and ensuring that the revenue is protected".
201
To accomplish this end, in particular, the instruments provide formulas to determine the amount of the
EBR, establish a methodology for making individualized determinations of enhanced bond amounts
for individual exporters/producers, and describe notif ication and publication requirements. We note
finally that the 2004 Amendment
202, 2005 Clarification 203, and October 2006 Notice 204 also each
expressly refer to 19 C.F.R. § 113.13 as constituting th e laws and regulations for which United States
Customs intends to ensure compliance.205

current_bond.ctt/current_bond.doc, on 9 July 2004, as accessed on 26 May 2006; and (ii) the
document entitled 'Clarification to July 9, 2004 Amended Monetary Guidelines for Setting
Bond Amounts for Special Categories of Merchandise Subject to Antidumping and/or
Countervailing Duty Cases', posted on the Internet Website of the United States Customs and
Border Protection Service at
http://www.cbp.gov/linkhandler/cgov/import/add_cvd/bonds/bond_clarification.ctt/
bond_clarification.doc, as accessed on 26 May 2006." (See WT/DS345/1, p. 1).
199 See India's second written submission, para. 7
200 Appellate Body Report, US – Upland Cotton , para. 287, citing to Panel Report, Korea – Alcoholic
Beverages, para. 10.19. The Appellate Body emphasised that no public record of what actually occurs in
consultations exists, and parties are also likely to disagree about what was discussed.
201 Exhibit IND-3, p. 2.
202 Exhibit IND-3, p. 1.
203 Exhibit IND-5, p. 1.
204 Exhibit IND-6, p. 62,276.
205 The 2006 Notice identifies 19 C.F.R. § 113.13 as the regulation that governs determination of bond
amounts. The 2005 Clarification provides that United States Customs has "broad authority under 19 C.F.R. §
113.13 to formulate guidelines to set the amount of continuous bonds". The 2004 Amendment also refers to 19
C.F.R. § 113.13 as the laws and regulations that authorize United States Customs to determine if continuous
bond amounts are adequate.

7.189 We next turn to 19 U.S.C. § 1623. Section 19 U.S.C. § 1623 permits the Secretary of the
Treasury to authorize US Customs to require bonds or other security to facilitate US Treasury revenue
collection or to enforce US laws or regulations. This provision provides in pertinent part:
"In any case in which bond or other security is not specifically required by law, the
Secretary of the Treasury may by regulation or specific instruction require, or
authorize customs officers to require, such bonds or other security as he, or they, may
deem necessary for the protection of the revenue or to assure compliance with any
provision of law, regulation, or instructi on which the Secretary of the Treasury or the
Customs Service may be authorized to enforce."
206
7.190 Generally, the provisions of 19 U.S.C. § 1623 al so govern the conditions and form of the
bond, cancellation of a bond, validity of a bond, and making of deposits in lieu of bonds.207

206 See 19 U.S.C.. § 1623(a).
207 19 U.S.C. § 1623 provides in full:
(a) Requirement of bond by regulation. In any case in which bond or other security is not specifically
required by law, the Secretary of th e Treasury may by regulation or specifi c instruction require, or authorize
customs officers to require, such bonds or other security as he, or they, may deem necessary for the protection of
the revenue or to assure compliance with any provision of law, regulation, or instruction which the Secretary of
the Treasury or the Customs Service may be authorized to enforce.
(b) Conditions and form of bond. Whenever a bond is required or authorized by a law, regulation, or
instruction which the Secretary of the Treasury or the Customs Service is authorized to enforce, the Secretary of
the Treasury may—
(1) Except as otherwise specifically provided by law, prescribe the conditions and form of such bond
and the manner in which the bond may be filed with or, pursuant to an authorized electronic data interchange
system, transmitted to the Customs Service, and fix the amount of penalty thereof, whether for the payment of
liquidated damages or of a penal sum: Provided, That when a consolidated bond authorized by paragraph 4 of
this subsection is taken, the Secretary of the Treasury may fix the penalty of such bond without regard to any
other provision of law, regulation, or instruction.
(2) Provide for the approval of the sureties on such bond, without regard to any general provision of
law.
(3) Authorize the execution of a term bond the conditions of which shall extend to and cover similar
cases of importations over such period of time, not to exceed one year, or such longer period as he may fix when
in his opinion special circumstances existing in a particular instance require such longer period.
(4) Authorize, to the extent that he may deem necessary, the taking of a consolidated bond (single entry
or term), in lieu of separate bonds to assure compliance with two or more provisions of law, regulations, or
instructions which the Secretary of the Treasury or the Customs Service is authorized to enforce. A consolidated
bond taken pursuant to the authority contained in this su bsection shall have the same force and effect in respect
of every provision of law, regulation, or instruction for the purposes for which it is required as though separate
bonds had been taken to assure compliance with each such provision.
(c) Cancellation of bond. The Secretary of the Treasury may authorize the cancellation of any bond
provided for in this section, or of any charge that may have been made against such bond, in the event of a
breach of any condition of the bond, upon the payment of such lesser amount or penalty or upon such other
terms and conditions as he may deem sufficient. In order to assure uniform, reasonable, and equitable decisions,
the Secretary of the Treasury shall publish guidelines establishing standards for setting the terms and conditions
for cancellation of bonds or charges thereunder.
(d) Validity of bond. No condition in any bond taken to assure compliance with any law, regulation, or
instruction which the Secretary of the Treasury or the Customs Service is au thorized to enforce shall be held
invalid on the ground that such condition is not specified in the law, regulation, or instruction authorizing or
requiring the taking of such bond. Any bond transmitted to the Customs Service pursuant to an authorized
electronic data interchange system shall have the same force and effect and be binding upon the parties thereto
as if such bond were manually executed, signed, and filed.
(e) Deposit of money or obligation of US in lieu of bond. The Secretary of the Treasury is authorized to
permit the deposit of money or obliga tions of the US, in such amount and upon such conditions as he may by

7.191 Lastly, we consider the provision 19 C.F.R. § 113.13. Section 19 C.F.R. § 113.13, which
similarly authorizes a US Customs officer to requi re security in order to facilitate US Treasury
revenue collection or enforce US Customs laws or regulations, provides in pertinent part:
"Notwithstanding the provisions of this secti on or any other provision of this chapter,
if a port director or drawback officer belie ves that acceptance of a transaction secured
by a continuous bond would place the reve nue in jeopardy or ot herwise hamper the
enforcement of Customs laws or regulations, he shall require additional security."208
7.192 Generally, the provisions in 19 C.F.R. §113.13 also govern minimum bond amounts,
guidelines for determining the bond amounts and periodic review of bond sufficiency.209
7.193 Based on our analysis of each of the Amended CBD, 19 U.S.C. § 1623 and 19 C.F.R. §
113.13 on its face, and in line with the analysis undertaken in US - Certain EC Products, we conclude
for several reasons that 19 U.S.C. § 1623 and 19 C.F.R. § 113.13 are legally distinct from the legal
instruments comprising the Amended CBD. As in US - Certain EC Products, the Amended CBD and
19 U.S.C. § 1623 and 19 C.F.R. § 113.13 do not provide for the same action. On the one hand, the
Amended CBD specifically permits the imposition of the EBR to "covered cases" of "special
category" merchandise to secure collection of anti-dumping and/or countervailing duties , and
provides formulas to determine the amount of the EBR as well as a methodology for making
individualized determinations. As we noted, th e August 2004 Amendment indicates that one of the
goals of amending the bond directiv e is "ensuring [US Customs'] ability to collect the anti-dumping
and countervailing duties at liquidation and ensuring that the revenue is protected".
210 On the other

regulation prescribe, in lieu of sureties on any bond requir ed or authorized by a law, regulation, or instruction
which the Secretary of the Treasury or the Customs Service is authorized to enforce.
208 See 19 C.F.R. § 113.13(d).
209 19 C.F.R. § 113.13 provides in full:
(a) Minimum amount of bond. The amount of any Customs bond shall not be less than $100, except
when the law or regulation expressly provides that a lesser amount may be taken. Fractional parts of a dollar
shall be disregarded in computing the amount of a bond. The bond always shall be stated as the next highest
dollar.
(b) Guidelines for determining amount of bond. In determining whether the amount of a bond is
sufficient, the port director or drawback office in the case of a bond relating to repayment of erroneous
drawback payment (See §113.11) should at least consider:
(1) The prior record of the principal in timely payment of duties, taxes, and charges with respect to the
transaction(s) involving such payments;
(2) The prior record of the principal in complying with Customs demands for redelivery, the obligation
to hold unexamined merchandise intact, and other requirements relating to enforcement and administration of
Customs and other laws and regulations;
(3) The value and nature of the merchandise involved in the transaction(s) to be secured;
(4) The degree and type of supervision that Customs will exercise over the transaction(s);
(5) The prior record of the principal in honouring bond commitments, including the payment of
liquidated damages; and
(6) Any additional information contained in any application for a bond.
(c) Periodic review of bond sufficiency. The port directors and drawback offices shall periodically
review each bond filed in their respectiv e port or drawback office in the case of a bond relating to repayment of
erroneous drawback payment (See §113.11) to determine whether the bond is adequate to protect the revenue
and insure compliance with the law and regulations. If the port director or drawback office determines that the
bond is inadequate, the principal shall be immediately notified in writing. The principal shall have 30 days from
the date of notification to remedy the deficiency.
(d) Additional security. Notwithstanding the provisions of this section or any other provision of this
chapter, if a port director or drawback office believes that acceptance of a transaction secured by a continuous
bond would place the revenue in jeopardy or otherwise hamper the enforcement of Customs laws or regulations,
he shall require additional security.
210 Exhibit IND-3, p. 2.

hand, 19 U.S.C. § 1623 provides the Secretary of the Treasury with a general regulatory power to
require or authorize customs officers to require bonds or other forms of security in order to protect the
revenue or to assure compliance with a US Treasury or US Customs law, regula tion, or instruction.
Similarly, 19 C.F.R. § 113.13 generally authorizes a port director to require security in the form of a
continuous bond in order to protect Treasury revenue or enforce Customs laws or regulations. In our
view, the provisions 19 U.S.C. § 1623 and 19 C.F. R. § 113.13 could in fact address many more
circumstances entirely distinct from those envisioned through application of an enhanced bond
requirement to "covered cases" of "special categor y" merchandise. Moreover, 19 U.S.C. § 1623 and
19 C.F.R. § 113.13 do not in any way specify particul ar requirements or limitations related to the
imposition of continuous bonds or other types of secu rity requirements, for imports subject to anti-
dumping or countervailing duties, other than a $100 minimum amount, as does the Amended CBD.
On the basis of these aspects alone of each the Amended CBD, U.S.C. § 1623 and 19 C.F.R. § 113.13,
we consider that the Amended CBD is legally distinct from 19 U.S.C. § 1623 and 19 C.F.R. § 113.13.
7.194 We also note that if the Amended CBD were condemned as such, the United States would no
longer be permitted to require security in the period following a final determination in the original
anti-dumping or countervailing duty investigation until final assessment of liability in order to ensure
collection of anti-dumping and/or countervailing duti es. However, to condemn 19 U.S.C. § 1623 and
19 C.F.R. § 113.13 would limit the United States' ab ility to impose security requirements to ensure
revenue collection in a wide array of circumstances. Based on its design, the Amended CBD does not
encompass or necessarily relate to the same breadth of actions or circumstances. This, in our view,
enforces the notion that the Amended CBD is legally distinct from the provisions of 19 U.S.C. § 1623
and 19 C.F.R. § 113.13.
7.195 Finally, we address the fact that the Amended CBD refers to 19 C.F.R. § 113.13 as providing
authority for the Amended CBD. We do not consider this fact requires us to conclude that the
measures (or 19 U.S.C. § 1623) are somehow inextr icably linked. Foremost, the Amended CBD and
19 U.S.C. § 1623 and 19 C.F.R. § 113.13 are each dis tinct legal instruments—one a directive, one a
statute, and the third a regulation, respectively. Additionally, as we indicated, the authority embodied
in 19 C.F.R. § 113.13 applies broadly and genera lly to many possible situations and circumstances
entirely distinct from that provided for in the Amended CBD. When considering the text of 19 U.S.C.
§ 1623 (i.e. the fact that both the US Treasury S ecretary and US Customs Service are authorized to
require security), there are even more occasions for which 19 U.S.C. § 1623 authorizes the US
Treasury or US Customs to act that in the case of 19 C.F.R. § 113.13. Thus , both 19 U.S.C. § 1623
and 19 C.F.R. § 113.13 are inextricably linked to va rious additional circumstances and occasions that
have no connection with or contex t relevant to the Amended CBD. As we explained, 19 C.F.R. §
113.13 authorizes US Customs officials to require security under any circumstances where a US
Customs official considers revenue to be in jeopardy or US Customs laws to be inhibited, and 19
U.S.C. § 1623 more broadly authorizes US Custom s officials or US Treasury officials to require
security under any circumstances to assure compliance with any provision of law, regulation, or
instruction which the Secretary of the Treasury or th e Customs Service may be authorized to enforce.
Neither of these provisions strictly addresses the purpose of ensuring collection of anti-dumping or
countervailing duties for "covered cases" of "special category" merchandise.
7.196 Accordingly, in light of the fact that we concluded that both 19 U.S.C. § 1623 and 19 C.F.R. §
113.13 are legally distinct from the Amended CBD we find that 19 U.S.C. § 1623 and 19 C.F.R. §
113.13 should not be considered within the scope of the measure at issue, and thus, are not within
Panel's terms of reference.
7.197 Based on the foregoing conclusions, the Pane l will consider the October 2006 Notice and
other instruments comprising the Amende d CBD for purposes of resolving India's as such
 claims, but
will not address 19 U.S.C. § 1623 and 19 C.F.R. § 113.13 in connection with this dispute.

2. Whether the measure at issue may be challenged "as such"
7.198 We next consider whether the measure at issu e in this dispute may properly be challenged as
such. According to India, the Amended CBD may be challenged as such because together these
provisions constitute "rules and norms of general and prospective application that require US Customs
to undertake impermissible specific actions agains t dumping and subsidization by taking security in
every case in which it perceives a risk of being unable to collect anti-dumping or countervailing duties
at liquidation that it fears may be higher than th e duty rates determined on the basis of the final
affirmative determination".211 The United States has argued that India has not sufficiently stated its as
such claims to merit consideration by this Panel.
7.199 Under WTO law, an as such claim challenges "laws, regulations, or other instruments of a
Member that have general and prospective app lication, asserting that a Member's conduct—not only
in a particular instance, but in future situations as well—will necessarily be inconsistent with that
Member's WTO obligations."212
7.200 The Appellate Body indicated in US — Corrosion-Resistant Steel Sunset Review that "in
principle, any act or omission attributable to a WTO Member can be a 'measure' of that Member for
purposes of dispute settlement proceedings". 213 The Appellate Body further elaborated on this
concept:
"[I]nstruments of a Member containing ru les or norms could constitute a 'measure'
irrespective of how or whether those rules or norms are applied in a particular
instance. This is so because 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. This objective would be
frustrated if ... instruments 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. It would also lead to a multiplicity of litigation if instruments embodying
rules or norms could not be challenged as such , but only in the instances of their
application. Thus, allowing claims against measures, as such, serves the purpose of
preventing future disputes by allowing the r oot of WTO-inconsistent behaviour to be
eliminated."
214
7.201 The concept of what constitutes a measure that may be challenged as such was discussed in
GATT jurisprudence:
"In the practice under the GATT, most of the measures subject, as such, to dispute
settlement, were legislation. We nevertheless observed in Guatemala – Cement I
that, in fact, a broad range of measures could be submitted, as such , to dispute
settlement:
In the practice established under the GATT 1947, a 'measure' may be
any act of a Member, whether or not legally binding, and it can
include even non-binding administrative guidance by a government

211 India's responses to First Set of Panel Questions, para. 42. In its first oral submission, India
contends that there is no substantive difference between amending a provision in a US anti-dumping or
countervailing duty statute to provide discretion, or simply extending the reach of a customs statute, such as 19
USC. § 1623 to confer discretion. (See India's first or al statement, para. 16; see also India's second written
submission, para. 18).
212 See Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 172.
213 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 81.
214 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 82.

(see Japan – Trade in Semi-Conductors , adopted 4 May 1988, BISD
35S/116)
215."216
7.202 The Appellate body has clarified that both mandatory and non-mandatory measures alike
could be challenged as such in relation to claims brought under the Anti-Dumping Agreement217:
"Article 18.4 contains an explicit obligation for Members to 'take all necessary steps,
of a general or particular character' to ensure that their 'laws, regulations and
administrative procedures' are in conformity with the obligations set forth in the
Anti-Dumping Agreement . Taken as a whole, the phrase 'laws, regulations and
administrative procedures' seems to us to encompass the entire body of generally
applicable rules, norms and standards a dopted by Members in connection with the
conduct of anti-dumping proceedings.218 If some of these types of measure could not,
as such, be subject to dispute settlement under the Anti-Dumping Agreement, it would
frustrate the obligation of 'conformity' set forth in Article 18.4."219
7.203 Regarding the form that a measure must take in order for it to be challenged as such, in US –
Zeroing (EC), the Appellate Body explained the following:
"[w]hen an 'as such' challenge is brought against a 'rule or norm' that is expressed in
the form of a written document – such as a law or regulation – there would, in most
cases, be no uncertainty as to the existence or content of the measure that has been
challenged."
220
7.204 In the dispute before us, we note that the Amende d CBD is indeed a rule or norm in the form
of a written document that directs the United States to act –in this case, to impose continuous bond
security requirements on designated "covered cases" of "special category" merchandise, i.e. shrimp
imported from India currently subject to an anti-dumpi ng order. We therefore conclude that the Panel
may properly evaluate the measure at issue, the Amended CBD, with respect to India's as such claims,
regardless of whether these measures are mandatory or discretionary.
3. The "mandatory/discretionary" distinction as an analytical tool
7.205 As a final preliminary matter, we consider wh ether the "mandatory/discretionary" distinction
should be applied when evaluating India's as such claims.

215 (footnote original) Appellate Body Report on Guatemala – Cement I , footnote 47 to para. 69. We
note, too, that the panel in Japan – Semi-Conductors referred (in para. 107) to another GATT case, Japan –
Agricultural Products I, where the panel also examined a measure co mposed, at least in part, of administrative
guidance.
216 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 85. The Appellate
Body also refers to the finding in US – 1916 Act that Article 17.4 does not place any limit on a panel's
jurisdiction to entertain claims against legislation as such (See Appellate Body Report on US – Corrosion-
217 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 88.
218 (footnote original) We observe that the scope of each elemen t in the phrase "laws, regulations and
administrative procedures" must be determined for purposes of WTO law and not simply by reference to the
label given to various instruments under the domestic law of each WTO Member. This determination must be
based on the content and substance of the instrument, and not merely on its form or nomenclature. Otherwise,
the obligations set forth in Article 18.4 would vary from Member to Member depending on each Member's
domestic law and practice.
219 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 87.
220 Appellate Body Report, US – Zeroing (EC), para. 197.

7.206 India submits that the "mandatory/discretionary" distinction is no longer applicable. India
argues that the discretion provided by the Amende d CBD assessed together with 19 U.S.C. § 1623
and 19 C.F.R. § 113.13 to undertake impermissible specific action against dumping and subsidisation,
renders these provisions WTO-inconsistent as such.221
7.207 The United States argues that Amended CBD provi des US Customs with discretion to apply
additional bond requirements on impor ters, and thus, in light of the "mandatory/discretionary"
distinction, is not as such WTO-inconsistent.
7.208 The controversial "mandatory/discretionary" distinction was early on developed as an
approach under the GATT system to address as such claims. Panels that applied the distinction
considered whether a disputed measure may only be inconsistent with a GATT or WTO obligation
because it mandates a violation, or precludes action that is consistent w ith an obligation, or whether
the disputed measure may be considered as incons istent even where the national authorities have
discretion to apply the measure. In US – Tobacco 222 and US – 1916 Act 223, for instance, legislation
that merely gave discretion to an authority to violate GATT or WTO obligations could not be
condemned as such but could still be challenged and condemned as applied.
7.209 The scope of applicability of the "mandatory/di scretionary" distinction has been a source of
debate among WTO members and in WTO jurispruden ce. We are aware that the Appellate Body has
explained that panels are not obliged, as a preliminary jurisdicti onal matter, to examine whether the
challenged measure is mandatory. 224 For the Appellate Body, "this issue is relevant, if at all, only as
part of the panel's assessment of whether the measure is, as such , inconsistent with particular
obligations."225 However, the Appellate Body in the same Report commented more broadly on the
need to exercise caution when applying the "mandatory/discretionary" distinction226:
"[W]e have not, as yet, been required to pronounce generally upon the continuing
relevance or significance of the Ma ndatory/Discretionary distinction. 227 Nor do we

221 In its first oral statement, India does not substantively differentiate between amending a provision in
a United States anti-dumping or counterv ailing duty statute to provide discre tion, or simply extending the reach
of a customs statute, such as 19 USC. § 1623 to confer discretion: See India's first oral statement, para. 16.
222 See GATT Panel Report, US – Tobacco, para. 118.
223 Appellate Body Report, US – 1916 Act, para. 88.
224 See Section VII.C.2 above.
225 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 89. See also, US –
Export Restraints : The Panel declined to consider the "mandatory/discretionary" distinction as a threshold
consideration, and instead identifie d and addressed the relevant WTO obligations first to assess how the
legislation at issue addressed those obligations and whether any violation arose from that ( US – Export
Restraints, paras. 8.11-8.13); US – Tobacco : The GATT Panel first resolved any controversy as to the
requirements of the GATT/WTO obligations at issue, and then considered in light of those findings whether the
defending party had demonstrated adequately that it had sufficient discretion to conform with those rules ( US –
Tobacco, para. 123).
226 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 93.
227 ( footnote original ) In our Report in United States – 1916 Act , we examined the challenged
legislation and found that the alleged "discretionary" elements of that legislation were not of a type that , even
under the "mandatory/discretionary" distinction , would have led to the measure being classified as
"discretionary" and theref ore consistent with the Anti-Dumping Agreement. In other words, we assumed that
the distinction could be applied because it did not, in any event, affect the outcome of our analysis. We
specifically indicated that it was not nece ssary, in that appeal, for us to answer "the question of the continuing
relevance of the distinction between mandatory and discretionary legislation for claims brought under the Anti-
Dumping Agreement ". (Appellate Body Report, US – 1916 Act , para. 99). We also expressly declined to
answer this question in footnote 334 to paragraph 159 of our Report in US – Countervailing Measures on
Certain EC Products. Furthermore, the appeal in US – Section 211 Appropriations Act presented a unique set
of circumstances. In that case, in defending the measure challenged by the European Communities, the United

consider that this appeal calls for us to undertake a comprehensive examination of
this distinction. We do, nevertheless, wish to observe that, as with any such
analytical tool, the import of the 'Mandatory/Discretionary distinction' may vary from
case to case. For this reason, we also wish to caution against the application of this
distinction in a mechanistic fashion."
228
7.210 Other recent Appellate Body and panel reports have also recognized the import of the
distinction as a technique for evaluating as such claims and applied the tool to their analysis, but
similarly declined to examine its continuing relevance.229
7.211 We likewise consider it unnecessary to undert ake a comprehensive examination of the
"mandatory/discretionary" distinction in the abstr act. Instead, we will address this issue only to the
extent necessary in light of our analys is of each of the provisions challenged as such by India in this
proceeding.

States unsuccessfully argued that discretionary regulations, issued under a separate law, cured the discriminatory
aspects of the measure at issue.
228 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 93. In that case, the
Appellate Body reversed Panel's finding that the Sunset Policy Bulletin was not a mandatory legal instrument,
thereby eliminating the need to assess the continuing re levance of the "mandatory/discretionary" distinction.
See Appellate Body Report, US – Corrosion Resistant Steel Sunset Review, para. 100.
229 E.g. in US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina) , the United
States argued that the Panel had erred when it consid ered whether Section 751(c)(4)(B) of the Tariff Act could
breach Article 11.3 of the Anti-Dumping Agreement , rather than considering whether the statute mandates a
breach. The Appellate Body concluded that the amended waiver provisions do not preclude the USDOC from
making a reasoned determination with a sufficient factual basis, as required by Article 11.3 of the Anti-Dumping
Agreement, and do not preclude the USDOC from considering other evidence on the record of the sunset review.
(See Appellate Body Report on US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina) ,
paras. 14–20, 120-121). In US – Zeroing (EC) the Appellate Body reiterated its previous statements on the
"mandatory/discretionary" distinction in US – Corrosion-Resistant Steel Sunset Review that "... as with any such
analytical tool, the import of the '"mandatory/discretionary" distinction' may vary from case to case. For this
reason, we also wish to caution agains t the application of this distinction in a mechanistic fashion." (Appellate
Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 93.) (See Appellate Body Report, US –
Zeroing (EC), paras. 206-214.) In Mexico – Anti-Dumping Measures on Rice , Mexico argued that a provision
was WTO consistent because it was not mandatory. The Pa nel had found that "...by threatening to impose fines
on anyone importing the product subject to an anti-dumpin g investigation, [the provision] of the Act clearly
provides for a specific action against dumping or subsidization which is not provided for in the [ Anti-Dumping
Agreement] or SCM Agreement". Moreover, the Panel stated, "[w]hen a law like the Act provides that it 'shall be
the responsibility of the Ministry to punish the following infringements', (citation omitted) it does more than just
dividing competences among the government, but rather stipulates that fines are to be imposed in case the
conditions of [the provision] of the Act are met and that it is up to the Ministry of Economy responsible also for
the conduct of anti-dumping and countervailing duty investigations to impose such fines." [See Panel Report,
Mexico – Anti-Dumping Measures on Rice, para. 7.278 and 7.279.] Mexico argued on appeal that the Panel had
failed to read the challenged provisions in the light of another provision, which would have would have led the
Panel to conclude that the measure allowed for discretion to act in a manner consistent with its obligations under
the WTO Agreements. The Appellate Body rejected this argument. (See Appellate Body Report on Mexico –
Anti-Dumping Measures on Rice, paras. 271-272.) In Korea – Commercial Vessels the Panel found that there
had not been a rejection by the Appellate Body in US – Corrosion-Resistant Steel Sunset Review of the use of
the traditional "mandatory/discretionary" distinction per se. The Panel proceeded to resolve the EC's " as such"
claims on the basis of whether or not the measure at i ssue mandates the provision of export subsidies. (See
Panel Report, Korea – Commercial Vessels, paras. 7.58-7.67.) In US – Countervailing Measures on Certain EC
Products, the Appellate Body stated in footnote 334: "We are not, by implication, precluding the possibility that
a Member could violate its WTO obligations by enacting legislation granting discretion to its authorities to act
in violation of its WTO obligation." (See Appellate Body Report, US – Countervailing Measures on Certain EC
Products, footnote 334.)

7.212 In reviewing each of India's claims as such , we will consider each of the instruments
comprising the Amended CBD on its face. The Ap pellate Body has pronounced on the burden of
proof and relevant evidence to sustain an as such claim with respect to legislation:
"A responding Member's law will be tr eated as WTO-consistent until proven
otherwise. The party asserting that another party's municipal law, as such , is
inconsistent with relevant treaty obligati ons bears the burden of introducing evidence
as to the scope and meaning of such law to substantiate that assertion. Such evidence
will typically be produced in the form of th e text of the relevant legislation or legal
instruments, which may be supported, as appr opriate, by evidence of the consistent
application of such laws, the pronouncemen ts of domestic courts on the meaning of
such laws, the opinions of legal experts a nd the writings of recognized scholars. The
nature and extent of the evidence required to satisfy the burden of proof will vary
from case to case."230
7.213 The Appellate Body has also emphasized that the following:
"When a measure is challenged 'as such', the starting point for an analysis must be the
measure on its face. If the meaning and cont ent of the measure are clear on its face,
then the consistency of the measure as such can be assessed on that basis alone. If,
however, the meaning or content of the measure is not evident on its face, further
examination is required …"
231
7.214 Accordingly, this Panel will apply the "mandatory /discretionary" distinction as an analytical
tool where necessary to evaluate India's as such claims. We are, however , cognizant of the need to
avoid applying it mechanistically.
4. Application of the "mandatory/discretionary" distinction in this dispute
7.215 Due to our import of the "mandatory/discreti onary" distinction for the purpose of evaluating
each of India's as such claims, we will analyse whether the measure is on its face mandatory or
discretionary. The Panel will thus analyse each of the instruments that comprise the Amended CBD
on its face.
7.216 We first consider the July 2004 Amendment. The July 2004 Amendment provides that "Port
Directors will be required to review continuous bonds for importers who import
agriculture/aquaculture merchandise subject to anti-dumping and countervailing duty cases and obtain
larger bonds where necessary ".232 The July 2004 Amendment further provides that Port Directors
will be required to review continuous bonds fo r cases where USDOC has issued a preliminary
affirmative determination in an agriculture/aquaculture case, or in the case of new shippers with no
prior history of agriculture/aquaculture imports. Finally, we note that the July 2004 Amendment
provides that "if [United States Customs] determin es any comparable risk with other commodities, a
similar review of bond coverage will be performed".
233
7.217 Similar to the July 2004 Amendment, the August 2005 Clarification authorizes US Customs
to designate a "covered case" of "special cate gory" merchandise and apply the EBR to importers

230 Appellate Body Report, US – Carbon Steel , para. 157 (footnote omitted); Appellate Body Report,
Dominican Republic – Import and Sale of Cigarettes , para. 111 and Appellate Body Report, US – Gambling ,
para. 138.
231 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 168; Appellate Body
Report, Dominican Republic – Import and Sale of Cigarettes, para. 112.
232 See Exhibit IND-3, p. 1 (emphasis added).
233 Exhibit IND-3, p. 2..

whether subject to an anti-dumping duty order or an affirmative preliminary determination, and for
new importers with no prior histor y of importers of the subject merchandise. The 2005 Clarification
reiterates that "[s]pecial categories can be designa ted where additional bond requirements in the form
of greater continuous entr y bonds or other security may be required ".
234 Unlike the July 2004
Amendment, however, the Clarification provides that "[US Customs] may adjust the rates used in the
formulas set forth above to calculate different bond amounts as circumstances warrant and to address
risks experiences with cases where the [USDOC] deposit rate is 0 percent".235
7.218 We next consider the October 2006 Notice. The United States describes the October 2006
Notice as constituting the "comprehensive and ex clusive statement of the policy and processes
expressed in the July 2004 Amendment to the B ond Guidelines, the Bond Formulas posted on CBP's
Web site, and the August 2005 Clarification". 236 Similar to the August 2005 Clarification, the
October 2006 provides that "[US Customs] will only designate Special Categories, that is,
merchandise for which an enhanced bond amount may be required"237, and, "Special Categories may
be designated when additional requirements in the form of greater continuous entry bonds or other
security may be required."238 However, the 2006 Notice provides that "[US Customs] may decide not
to require an increased bond amount even though the principal imports Special Category
merchandise".239 The October 2006 Notice also refers to a process that permits importers to attain
individualized determinations for EBR amounts. Ac cording to the October 2006 Notice, "[i]mporters
will be offered the opportunity to submit information on their financial condition related to the risk of
non-collection for that importer and [United Stat es Customs] will determine bond amounts based on
that information, the importer's compliance histor y, and other relevant in formation available..." 240
Without an importer's submission, th e Notice indicates: "[US Customs] may calculate the bond
amount using the formulas determined on the basis of the risk of non-collection". 241 The 2006 Notice
concludes with the statement: "Congress has provided [US Customs] authority to require security in
order to ensure the payment of all duties determined to be due to the United States..."242
7.219 The document titled "Current Bond Formulas" contai ns illustrations of the application of the
formulas provided in the Amended CBD. We do not find it necessary to consider this document for
purposes of determining whether the measure at issue is mandatory or discretionary.
7.220 Based on a review of the text of each of these instruments, we preliminarily conclude that the
provisions are not binding on Port Directors, or US Customs more broadly. In other words, the
Amended CBD on its face does not appear to require US Customs to designate a particular "covered
case" or "special category" of merchandise in or der to further impose the EBR to the subject
merchandise. In particular, the October 2006 Notice, which represents the United States' most recent
publication describing the Amended CBD, indicates that Congress has provided US Customs with the
authority to impose enhanced continuous bond amount s. We interpret the language of the October
2006 Notice to reflect an important and inherent limitation on the scope of the Amended CBD.
Namely, the Amended CBD instructs US Customs that it may impose the EBR of "covered cases" of
"special category" merchandise, and even provides specific instructions for applying the standard
formula or making individualized determinations fo r particular importers. However, the instruments
that comprise the Amended CBD (the July 2004 Amendment, August 2005 Clarification, and October

234 Exhibit IND-4, p. 2 (emphasis added).
235 Exhibit IND-4, p. 4.
236 Exhibit IND-6, p. 62,277.
237 Exhibit IND-6, p. 62,277 (emphasis added).
238 Exhibit IND-6, p. 62,277 (emphasis added).
239 Exhibit IND-6, p. 62,278.
240 Exhibit IND-6, p. 62,277.
241 Exhibit IND-6, p. 62,278 (emphasis added).
242 Exhibit IND-6, p. 62,277.

2006 Notice) do not require that US Customs desi gnate "covered cases" or "special category"
merchandise subject to an anti-dumping order prior to applying the EBR. It is in this sense that the
August 2005 Clarification provides that "Special Categories of merchandise can be designated where
additional bond requirements in the form of greater continuous entry bonds or other security may be
required".
243 The October 2006 Notice uses identical language. 244 Rather, the August 2005
Clarification and October 2006 Notice only provide criteria that may be considered to identify
"special categories" or "covered cases", such as pr evious collection problems of a specific industry,
the capitalization level of the industry, the proj ected ability of the industry to pay future duty
liabilities, whether the industry is highly leveraged, the history of revenue collection problems of the
industry, whether the industry has low duty rates or was duty free previously, and other factors.245
7.221 We supplement our analysis with an evaluati on of the application of the Amended CBD to
date. Primarily, we observe that US Customs ha s as of yet only designate d one "covered case", and
thus has only applied the EBR to subject shrimp impor ters. This has occurred in practice, despite the
fact, as the United States revealed, that US Cust oms has imposed an anti-dumping order on at least
one other product in the agriculture/aquaculture cat egory of merchandise, certain orange juice from
Brazil, since publication of the Amended CBD. Pote ntially, US Customs' decision not to apply the
EBR to importers of certain orange juice from Brazil could relate to the inherent characteristics of the
industry as assessed by US Customs, such as pr evious collection problems in the industry, the
capitalization level of the industry, the projected ab ility of the industry to pay future duty liabilities,
whether the industry is highly leveraged, and so fo rth. In addition, outstanding anti-dumping orders
are in place on other categories of agriculture/aquacu lture merchandise, such as crawfish and honey,
yet importers of these products are not subject to th e EBR. These realities, in our view, indicate that
the Amended CBD does not require US Customs to impose the EBR on importers, which would, as
India argues, mandate WTO-inconsistent behaviour. In particular, this is telling in the case of
outstanding orders on products such as crawfish, where risks of margins increases and default have
been alleged, thus suggesting enhanced continuous bond amounts w ould also be "necessary" within
the meaning of the Amended CBD. Instead th e Amended CBD functions as a guideline to US
Customs officials. Indeed the instruments that comprise the Amended CBD define themselves as
"guidelines" in their titles.
7.222 We further note the decision by the USCIT from 13 November 2006 regarding several
importers' request for a preliminary injunction against the EBR. The USCIT found US Customs
appeared to have discretion under US law to consider potential anti-dumping or countervailing duty in
setting continuous bond amounts.
246
7.223 We will also address India's position that the Amended CBD is as such inconsistent because
the Amended CBD allows for impermissible speci fic action against dumping or subsidisation by
imposing the EBR in every case in which the United States concludes that there is a likelihood of
increase in dumping margins or the amount of subsidy found to exist between the final determination
and the final assessment in an administrative review. India considers this approach to be consistent
with that taken by the panel and upheld by the Appellate Body in Mexico – Anti-Dumping Measures
on Rice247. In that case, the United States argued that a Mexican anti-dumping provision allowing for
the imposition of a fine for importers which ente r products subject to anti-dumping or countervailing
duty investigations while such investigations ar e underway was an impermissible specific action
against dumping. Mexico argued that this pr ovision was WTO consistent because it was not

243 See Exhibit IND-4, p. 2.
244 See Exhibit IND-6, p. 62,277.
245 See Exhibit IND-4, pp. 2-3; Exhibit IND-6, p. 62,277.
246 See Exhibit IND-16, p. 42.
247 See Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 330; Panel Report,
Mexico – Anti-Dumping Measures on Rice, paras. 7.278-7.279.

mandatory. The Panel concluded that "...by thr eatening to impose fines on anyone importing the
product subject to an anti-dumping investigation, [t he provision] of the Act clearly provides for a
specific action against dumping or subsidi zation which is not provided for in the [ Anti-Dumping
Agreement] or SCM Agreement "
248. With respect to Mexico's argument that the provision was
discretionary and thus, not WTO-inconsistent, the Panel provided:
"When a law like the Act provides that it 'shall be the responsibility of the Ministry to
punish the following infringements', 249 it does more than just dividing competences
among the government, but rather stipulates that fines are to be imposed in case the
conditions of [the provision] of the Act are met and that it is up to the Ministry of
Economy responsible also for the conduc t of anti-dumping and countervailing duty
investigations to impose such fines."
250
7.224 Mexico subsequently argued before the Appella te Body that the Panel erred in failing to
recognize that the challenged provisions of the FT A are "discretionary" measures that permit the
investigating authority to apply them in a WTO-consistent manner. 251 The Appellate Body rejected
this argument and found that Mexico improperly failed to bring its claim under Article 11 of the
DSU.252
7.225 We cannot conclude that India's position concerning the findings in Mexico – Anti-Dumping
Measures on Rice is relevant to the dispute before us. In that case, the Panel found and the Appellate
Body agreed that the measure at issue was an impermissible specific action against dumping and
subsidization and was therefore, as such inconsistent with Article 18.1 of the Anti-Dumping
Agreement and Article 32.1 of the SCM Agreement because it "stipulated" that the ministry
responsible for anti-dumping and countervailing du ty investigations impose fines in cases where
conditions of the measure were met. However, in our case, we do not find that in every occasion that
the United States imposes the EBR on importers of a category of merchandise subject to an anti-
dumping order its imposition constitutes an imperm issible specific action against dumping or
subsidisation.
7.226 In our findings presented in Section VII.B.2(b)( iii) above, we determined that the application
of the EBR to subject shrimp from India was unreasonable. However, despite the fact that the
application of the EBR to subject shrimp constituted an impermissible specific action against dumping
in violation of Article 18.1 of the Anti-Dumping Agreement, we explained in Section VII.B.2(b)(iii)
above that the Ad Note authorises the imposition of security requirements during the period following
imposition of a US anti-dumping (or countervailing) duty order so long as the security is reasonable.
Thus it would be possible for the United States to apply reasonable security to protect against
increases in future anti-dumping duty rates as long as an appropriate basis existed to determine that
rates of dumping provided for in the anti-dumping order were likely to increase following a final
determination in the original investigation. Based on these findings, we are unable to conclude that a
violation will occur for every application of the EBR to impo rters of a designated category of
merchandise. In contrast, the measure in Mexico – Anti-Dumping Measures on Rice was determined
to be an impermissible specific action against dumping which was not permitted under any provision
of the GATT 1994, the Anti-Dumping Agreement or the SCM Agreement.
7.227 We therefore find that the Amended CBD on its face allows US Customs to exercise
discretion to designate "covered cases" and "special category" merchandise in order to impose the

248 Panel Report, Mexico – Anti-Dumping Measures on Rice, para. 7.278.
249 (footnote original omitted).
250 Panel Report, Mexico – Anti-Dumping Measures on Rice, para. 7.279.
251 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 271.
252 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, paras. 272-274.

EBR, and is thus not mandatory in nature. Moreover, contrary to India's stance, each application of
the EBR via the Amended CBD may not constitute an impermissible specific action against dumping
in violation of the GATT 1994 and the Anti-Dumping Agreement or a specific action against
subsidisation in violation of the GATT 1994 and the SCM Agreement.
5. Whether the Amended CBD is inconsistent as such with Articles 1 and 18.1 of the
Anti-Dumping Agreement, Articles 10 and 32.1 of the SCM Agreement, and the Ad Note
7.228 The Panel notes that India originally made separate as such claims with respect to Articles 1
and 18.1 of the Anti-Dumping Agreement, on the one hand and the Ad Note, on the other hand. For
purposes of our analysis, we are considering these cl aims together. Additionally, in the context of
India's as such claims under the SCM Agreement, India originally made separate as such claims with
respect to Articles 10 and 32.1 of the SCM Agreement and the Ad Note. We will also consider these
claims together.
(a) Main arguments of India
7.229 We note that India's arguments related to its as such claims under Articles 1 and 18.1 of the
Anti-Dumping Agreement , Articles 10 and 32.1 of the SCM Agreement , and the Ad Note are
substantially the same as those made in relation to its as applied claims under those provisions. India
claims that the Amended CBD provides for specific action against dumping and subsidisation that is
inconsistent as such with Articles 1 and 18.1 of the Anti-Dumping Agreement and Articles 10 and
32.1 of the SCM Agreement, and is not in accordance with the prov isions of the Ad Note. According
to India, the Amended CBD is a "specific action" with respect to dumping and subsidisation because
an inextricable link exists between the measure and the constituent elements of dumping or of
subsidisation as evidenced by the text of the direc tive. India also submits that the Amended CBD has
a serious, adverse impact on importers due to in creased bond amounts and surety requirements and,
therefore, is "against" dumping or subsidisation. India contends that the Amended CBD is not a
permissible response to dumping or subsidisation in accord with any provision Article VI of the
GATT 1994 (including the Ad Note) as interpreted by the Anti-Dumping Agreement or SCM
Agreement. India submits that the measure does not invol ve a price undertaking by exporters, is not a
provisional measure within the meaning of Articles 7 of the Anti-Dumping Agreement and Articles 17
of the SCM Agreement, and is not within the meaning of the Ad Note. India also submits that it does
not satisfy the restrictions imposed by Article 9 of the Anti-Dumping Agreement or Article 19 of the
SCM Agreement governing the collection of definitive anti-dumping or countervailing duties. Finally,
India claims that the Amended CBD cannot be justified under either footnote 24 of the Anti-Dumping
Agreement or footnote 56 of the SCM Agreement because the Amended CBD is not merely related to
dumping or subsidisation but is specific acti on against dumping or subsidisation governed by
Article VI of the GATT 1994.
7.230 Assuming arguendo that the Amended CBD is permitted under the Ad Note, India contends
that application of the EBR to any case of s ubject merchandise could not constitute reasonable
security within the meaning of the Ad Note. India considers the requirement for security at a rate of
100 per cent of the duties owed on the previous 12 mont hs' imports at the rate set in the relevant anti-
dumping or countervailing duty order is overly burdensome.
(b) Main arguments of the United States
7.231 The United States rejects India's claims that the Amended CBD as such constitutes
impermissible specific action against dumping and subs idisation that is inconsistent with Articles 1
and 18.1 of the Anti-Dumping Agreement and Articles 10 and 32.1 of the SCM Agreement. According
to the United States, the Amended CBD as such c annot constitute specific action against dumping
because it does not require importers to comply with the EBR. Moreover, the United States submits

that US Customs retains discretion as to whether to im pose the EBR at all, either to an entire category
of merchandise or on an individual importers/princip al basis. According to the United States, the
Amended CBD addresses non-collection problems rela ted to anti-dumping duties and is thus only
related to dumping or subsidisation in the sense that unsecured liability is anti-dumping or
countervailing duty liability. The United States points to the text and design of the Amended CBD in
arguing that the constituent elements of dumping or s ubsidisation are not built into the directive. The
United States submits that the Amended CBD is not "against" dumping or subsidisation because
evidence does not support the conclusion that the Am ended CBD adversely aff ected subject imports
or dissuaded dumping.
7.232 The United States also argues that bond amounts required under the Amended CBD constitute
reasonable security during the period following a fi nal determination but prior to a final assessment
review in a dumping or subsidisation investigation, under the Ad Note and therefore, the Amended
CBD is in accordance with the provisions of GATT 1994. The US argues that the "final determination
of the facts" in the text of the Ad Note refers to the determination of the facts with respect to the
payment of anti-dumping or countervailing duty whic h occurs in a retrosp ective assessment system
following an assessment review. In a retrosp ective system, the US argues that dumping or
subsidisation is suspected until completion of an assessment review.
(c) Evaluation by the Panel
7.233 The provisions of Article 1 and 18.1 of the Anti-Dumping Agreement appear in
paragraphs 7.26-7.27 above.
7.234 We note that the provisions in Articles 10 and 32.1 of the SCM Agreement governing
countervailing duty investigations are substantively similar to those in Articles 1 and 18.1 of the
Anti Dumping Agreement. Article 10 of the SCM Agreement reads:
"Application of Article VI of GATT 1994
253

Members shall take all necessary steps to ensure that the imposition of a
countervailing duty254 on any product of the territory of any Member imported into
the territory of another Member is in acco rdance with the provisions of Article VI of
the GATT 1994 and the terms of this Agreement. Countervailing duties may only be
imposed pursuant to investigations initiated 255 and conducted in accordance with the
provisions of this Agreement and the Agreement on Agriculture."

253 (footnote original) The provisions of Part II or III may be invoked in parallel with the provisions of
Part V; however, with regard to the effects of a pa rticular subsidy in the domestic market of the importing
Member, only one form of relief (either a countervailing dut y, if the requirements of Part V are met, or a
countermeasure under Articles 4 or 7) shall be available. The provisions of Parts III and V shall not be invoked
regarding measures considered non-actionable in acco rdance with the provisions of Part IV. However,
measures referred to in paragraph 1(a) of Article 8 may be investigated in order to determine whether or not they
are specific within the meaning of Article 2. In addition, in the case of a subsidy referred to in paragraph 2 of
Article 8 conferred pursuant to a programme which has not been notified in accordan ce with paragraph 3 of
Article 8, the provisions of Part III or V may be invoked, but such subsidy shall be treated as non-actionable if it
is found to conform to the standards set forth in paragraph 2 of Article 8.
254 (footnote original) The term "countervailing duty" shall be understood to mean a special duty levied
for the purpose of offsetting any subsidy bestowed direct ly or indirectly upon the manufacture, production or
export of any merchandise, as provided for in paragraph 3 of Article VI of GATT 1994.
255 (footnote original ) The term "initiated" as used hereinafter means procedural action by which a
Member formally commences an investigation as provided in Article 11.

7.235 Article 32.1 of the SCM Agreement reads: "No specific action against a subsidy of another
Member can be taken except in accordance with the provisions of the GATT 1994, as interpreted by
this Agreement."256
7.236 We recall in Section VII.C.4 above that we concluded that the Amended CBD is not a
mandatory measure, in the sense that the Unite d States has discretion to impose the EBR on
designated categories of designated merchandise su bject to an anti-dumping or countervailing duty
order. More importantly, however, we recall our finding that the EBR does not constitute an
impermissible specific action against dumping or subsidisation in every occasion that it is imposed on
importers of a "covered case" or "special categor y" merchandise subject to an anti-dumping or
countervailing duty order. We based this fi nding on our earlier determination in Section
VII.B.2(b)(iii) above related to India's as applied claims under Articles 1 and 18.1 of the Anti-
Dumping Agreement that the Ad Note permits a WTO Member to require reasonable security in the
period between a final determination in the original investigation until the final assessment review in a
retrospective duty assessment system. In light of this finding, we do not agree with India's position
that the Amended CBD as such necessarily constitutes an impermissible specific action against
dumping in every case to which it is applied. For the foregoing reasons, we accordingly conclude that
the Amended CBD as such does not violate Article 18.1 of the Anti-Dumping Agreement or the
Ad Note.
7.237 We note that India has also made an as such claim under Article 1 of the Anti-Dumping
Agreement. That claim is necessarily dependent on India's Article 18.1 claim. Since we have found
that the Amended CBD as such is not inconsistent with Article 18.1 of the Anti-Dumping Agreement,
we likewise find that it does not as such violate Article 1 of the Anti-Dumping Agreement.
7.238 Based on our reasoning that the Amended CBD doe s not constitute an impermissible specific
action against dumping in every case to which it is ap plied, we also conclude that the Amended CBD
as such does not constitute an impermissible specific ac tion against subsidisation, and thus does not
violate Article 32.1 of the SCM Agreement as such . Due to the consistency of the Amended CBD
with Article 32.1 of the SCM Agreement , we also find that the Amended CBD as such does not
violate Article 10 of the SCM Agreement.
6. Articles 7.1(iii), 7.2, and 7.4 of the Anti-Dumping Agreement and Articles 17.1(c). 17.2
and 17.4 of the SCM Agreement
(a) Main arguments of India
7.239 India argues that the Amended CBD as such violates Articles 7.1(iii), 7.2, and 7.4 of the Anti-
Dumping Agreement and Articles 17.1(c), 17.2 and 17.4 of the SCM Agreement. These arguments are
similar to those made in relation to India's claim that the EBR as applied
 to subject shrimp importers
violates Article 7 of the Anti-Dumping Agreement , which are presented in Section VII.B.3 above.
India explains that it considers it necessary to evaluate the consistency as such of the Amended CBD
also with the provisions of Article 7 of the Anti-Dumping Agreement and of Article 17 of the SCM
Agreement based on the following premise: the Amended CBD does not make provision for the
termination of the EBR after the issuance of an anti-dumping or countervailing duty order and thus
provides for the imposition of the EBR as a provision al measure to importers of covered merchandise
after a preliminary affirmative determination in an in vestigation but prior to the issuing of an order in

256 (footnote original) This paragraph is not intended to preclude action under other relevant provisions
of the GATT 1994, where appropriate.

an anti-dumping or countervailing duty case.
257 According to India, the application of the EBR
following issuance of an order violates the expr ess limitations governing provi sional measures and is
thus as such inconsistent with Article 7 of the Anti-Dumping Agreement and Article 17 of the SCM
Agreement.
7.240 Based on its argument that the Amended CBD provides for the imposition of a provisional
measure, India also claims that the Amended CBD as such violates Articles 7.1(iii) of the Anti-
Dumping Agreement and Article 17.1(c) of the SCM Agreement because it is not designed as a
measure necessary to prevent injury being caused during an investigation.258 India asserts that, under
Article 7.1(iii) of the Anti-Dumping Agreement and Article 17.1(c) of the SCM Agreement , it is
necessary that "the authorities concerned judge su ch measures necessary to prevent injury being
caused during the investigation". However, according to India, the stated reasons for introducing the
EBR do not mention injury being caused during the i nvestigation at all and focus rather on protecting
revenue against any failure on the part of importers to pay the duties finally assessed and ensuring that
payments are made to domestic industry pursuant to th e CDSOA that was held to be inconsistent with
the obligations of the United States in US – Offset Act (Byrd Amendment) . India therefore submits
that, if the EBR is a provisional measure, it is inconsistent as such with Article 7.1(iii) of the Anti-
Dumping Agreement and Article 17.1(c) of the SCM Agreement.
7.241 India asserts that the Amended CBD as such is also inconsistent with Article 7.2 of the Anti-
Dumping Agreement and with Article 17.2 of the SCM Agreement , since provisional measures,
whether in the form of a cash deposit or a bond, may not be for an amount in excess of the
"provisionally estimated margin of dumping" or the "provisionally calculated amount of
subsidization", as the case may be. India argues th at the requirement to provide cash deposits in
addition to the EBR clearly exceeds the provisionally estimated margin of dumping.
7.242 Finally, India argues that the Amended CBD as such is inconsistent under Article 7.4 of the
Anti-Dumping Agreement and Article 17.4 of the SCM Agreement to the extent that the EBR is
introduced or remains in place on any date after six months have elapsed in the case of an anti-
dumping case or after four months have elapse d in the case of a countervailing duty case from the
date on which provisional measures are first impos ed. If security required under the Amended CBD
would not be released until liquidation at least one year following imposition of an anti-dumping
order, then any application of the EBR prior to a final determination of dumping in an original
investigation would fail to satisfy the limitations imposed by Article 7.4 of the Anti-Dumping
Agreement and Article 17.4 of the SCM Agreement.
7.243 India thus submits that the Amended CBD as such is inconsistent with Article 7 of the Anti-
Dumping Agreement and with Article 17 of the SCM Agreement.
(b) Main arguments of the United States
7.244 As with India's as applied claims related to Article 7 of the Anti-Dumping Agreement, the
United States submits that Article 7 of the Anti-Dumping Agreement and Article 17 of the
SCM Agreement does not apply to the EBR. The United Stat es argues that India appears to conflate
the requirement of reasonable security contained in the Ad Note with Article 7 of the Anti-Dumping
Agreement and Article 17 of the SCM Agreement regarding provisional measures (i.e., measures taken

257 Thus, the Notice states that the Enhanced Bond Requirement may be imposed on importers where
US Customs "… detects sudden changes in declared values , claimed country of origin or declared classification,
etc. …"
258 India's first written submission, para. 86.

prior to a final determination of dumping or subsidization).259 The United States asserts that the bond
directive, however, is a security requirement imposed after the final determination of dumping or
subsidization, pending "determination of the final liability for payment of anti-dumping duties," and is
therefore not a "provisional measure" within the meaning of Article 7 of the Anti-Dumping Agreement
or Article 17 of the SCM Agreement.
7.245 With respect to India's argument that the Am ended CBD applies in the period prior to the
issuance of the order and therefore constitu tes a "provisional measure" inconsistent, as such with
Article 7 of the Anti-Dumping Agreement and Article 17 of the SCM Agreement,260 the United States
asserts that the October 2006 Notice makes clear that the directive no longer covers additional bond
amounts requested prior to issuance of an order.261
(c) Evaluation by the Panel
7.246 We first note the relevant provisions as discussed by India in its claims under Article 7 of the
Anti-Dumping Agreement and Article 17 of the SCM Agreement.
7.247 The text of the relevant provisions under Article 7 of the Anti-Dumping Agreement appears in
Section VII.B.3 above.
7.248 In addition, Article 17.1(c) of the SCM Agreement provides:
"Provisional measures may be applied only if:
 (c) the authorities concerned judge such measures necessary to prevent injury being
caused during the investigation."
7.249 Article 17.2 of the SCM Agreement provides:
"Provisional measures may take the form of provisional countervailing duties
guaranteed by cash deposits or bonds e qual to the amount of the provisionally
calculated amount of subsidization."
7.250 Article 17.4 of the SCM Agreement provides:
"The application of provisional measures sh all be limited to as short a period as
possible, not exceeding four months."
7.251 The Panel will begin its analysis by considering the text of the Amended CBD. We note that
the United States' most recent instrument on record discussing the Amended CBD is the October 2006
Notice. This Notice does not explicitly address th e question of whether or not the EBR could be
applied before the imposition of an anti-dumping or countervailing duty order. Nevertheless, we
consider that certain parts of the Notice clearly indicate that the EBR could not be applied as a
provisional measure. For instance, the 2006 Notice provides that the "amount of additional [bond]
coverage" will be calculated using a formula inco rporating the "AD/CVD rate established in DOC
Order (or the rate established in the most recently completed administrative review)."
262 To the extent
that the October 2006 Notice provides that the formula for calculating the amount of the EBR refers to

259 India's first written submission, para. 92 (asserting that "[i]t is clear that the 'reasonable security
(bond or cash deposit)' referred to in the Ad Note is the same as the provisional measures referred to in Article 7
of the Anti-Dumping Agreement.").
260 India's first written submission, para. 85.
261 Exhibit IND-6, p. 62,277 (cf. Exhibit IND-3, pp. 2-3).
262 Exhibit IND-6, p. 62,277.

the rate of dumping set forth in the anti-dumping or countervailing duty order (or most recent
assessment review), the October 2006 Notice does not on its face permit the imposition of the EBR
prior to the completion of a final determination in the US retrospective duty assessment system, which
precedes publication of an anti-dumping or countervailing duty order. For this reason, in our view,
the language of the October 2006 Notice does not provi de for the imposition of provisional measures.
Provisional duties would only apply prior to the completion of the original anti-dumping or
countervailing duty investigation. Therefore, Article 7 of the Anti-dumping Agreement or Article 17
of the SCM Agreement are not applicable to the Amended CBD.
7.252 To complete our analysis for India's claims under Article 7 of the Anti-Dumping Agreement
and Article 17 of the SCM Agreement , we also consider the July 2004 Amendment, August 2005
Clarification, and the Current Bond Formulas doc ument. Unlike the October 2006 Notice, we note
that each of these documents presents a formula to calculate an EBR amount with respect to importers
of "special category" or "covered case" merc handise subject to a preliminary affirmative
determination of dumping or subsidisation. Th e inclusion of this formula in the July 2004
Amendment, August 2005 Clarification, and the Current Bond Formulas document suggests that the
Amended CBD did or still does govern applications prior to a final affirm ative determination of
dumping or subsidisation. In our view, however , we consider the October 2006 Notice to have
amended the measure at issue. We noted in th e preceding paragraph that the October 2006 Notice
does not explicitly address the question of whether or not the EBR could be applied before the
imposition of an anti-dumping or countervailing dut y order. Specifically, the October 2006 Notice
does not include a formula to calculate an EBR amount with respect to importers of "special category"
or "covered case" merchandise subject to a prelim inary affirmative determination of dumping or
subsidisation. We consider this to be an intentional omission in light of language elsewhere in the
Notice (i.e., that the "amount of additional [bond ] coverage" will be calcu lated using a formula
incorporating the "AD/CVD rate es tablished in DOC Order (or the rate established in the most
recently completed administrative review)"). Due to the absence of such a formula in the October
2006 Notice, and in light of our view that the Oc tober 2006 Notice serves to amend the measure at
issue with respect to the EBR's application prior to the imposition of an anti-dumping or
countervailing duty order, we conclude that the Amended CBD does not provide for the application of
the EBR as a provisional measure. Our conclusion also accords with the Unit ed States' position that
the Amended CBD no longer covers additional bond amounts requested prior to issuance of an order.
7.253 We therefore conclude that the Amended CBD as such is not inconsistent with
Articles 7.1(iii), 7.2 and 7.4 of the Anti-Dumping Agreement or Articles 17.1(c), 17.2 and 17.4 of the
SCM Agreement.
7. Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping Agreement , Articles 19.2, 19.3 and
19.4 of the SCM Agreement, and Article VI:3 of the GATT 1994
(a) Main arguments of India
7.254 We note that India has presented identical arguments for its as such
 claims under Articles 9.1,
9.2, 9.3 and 9.3.1 of the Anti-Dumping Agreement and Articles 19.2, 19.3 and 19.4 of the SCM
Agreement, as for its as applied claims under Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping
Agreement. These arguments are presented in Section VII.B.4 above.
(b) Main arguments of the United States
7.255 The United States arguments in relation to I ndia's applied claims under Article 9 of the Anti-
Dumping Agreement presented in Section VII.B.4 above, also remain relevant for India's claims under
Articles 9.1, 9.2, 9.3, and 9.3.1 of the Anti-Dumping Agreement and Articles 19.2, 19.3, and 19.4 of
the SCM Agreement.

(c) Evaluation by the Panel
7.256 We first note the relevant provisions as discussed by India in its claims under Article 9 of the
Anti-Dumping Agreement, Article 19 of the SCM Agreement and Article VI:3 of the GATT 1994.
7.257 The text of the relevant provisions under Article 9 of the Anti-Dumping Agreement and
Article VI:2 of the GATT 1994 appear in Section VII.B.4 above.
7.258 In addition, Article 19.2 of the SCM Agreement provides:
"The decision whether or not to impose a countervailing duty in cases where all
requirements for the imposition have been fulfilled, and the decision whether the
amount of the countervailing duty to be im posed shall be the full amount of the
subsidy or less, are decisions to be made by the authorities of the importing Member.
It is desirable that the imposition should be permissive in the territory of all Members,
that the duty should be less than the total amount of the subsidy if such lesser duty
would be adequate to remove the injury to the domestic industry, and that procedures
should be established which would allow the authorities concerned to take due
account of representations made by domestic interested parties(footnote omitted)
whose interests might be adversely affected by the imposition of a countervailing
duty."
7.259 Finally, Article 19.3 of the SCM Agreement provides:
"When a countervailing duty is imposed in respect of any product, such
countervailing duty shall be levied, in the appropriate amounts in each case, on a
non‑ discriminatory basis on imports of such product from all sources found to be
subsidized and causing injury, except as to imports from those sources which have
renounced any subsidies in question or fro m which undertakings under the terms of
this Agreement have been accepted. A ny exporter whose exports are subject to a
definitive countervailing duty but who was not actually investigated for reasons other
than a refusal to cooperate, shall be entitled to an expedited review in order that the
investigating authorities promptly establish an individual countervailing duty rate for
that exporter."
7.260 Article 19.4 of the SCM Agreement provides:
"No countervailing duty shall be levied
263 on any imported product in excess of the
amount of the subsidy found to exist, calcula ted in terms of subs idization per unit of
the subsidized and exported product."
7.261 Article VI:3 of the GATT 1994 provides the following:
"No countervailing duty shall be levied on any product of the territory of any
contracting party imported into the territory of another contracting party in excess of
an amount equal to the estimated bounty or s ubsidy determined to have been granted,
directly or indirectly, on the manufacture, production or export of such product in the
country of origin or exportation, including any special subsidy to the transportation of
a particular product. The term "counterva iling duty" shall be understood to mean a
special duty levied for the purpose of offsetting any bounty or subsidy bestowed,

263 ( footnote original ) As used in this Agreement "levy" shall mean the definitive or final legal
assessment or collection of a duty or tax.

directly, or indirectly, upon the manufacture, production or export of any
merchandise."
7.262 We refer to our findings in section VII.B.4 above in relation to India's as applied claim under
Articles 9.1, 9.2, 9.3, and 9.3.1 of the Anti-Dumping Agreement. We noted, as its title indicates, that
Article 9 of the Anti-Dumping Agreement is concerned with the "imposition and collection of anti-
dumping duties" (emphasis added). Consistent with this title, we also observed that the disciplines set
forth in Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping Agreement concern the imposition and
collection of anti-dumping duties. For that reason, we concluded that measures other than anti-
dumping duties fall outside the scope of those provisions . Accordingly, we turned to the context of
our review of India's claim under Article 18.1 of the Anti-Dumping Agreement , and directly
considered India's argument
264 that the term "duty" is defined in the tax context as "the payment to the
public revenue levied on the import, export, manufacture or sale of goods …". 265 We found that
India's definition of the term "duty" was not broad enough to encompass the enhanced bond
requirements imposed in respect of subject shrimp because bonds do not yield public revenue and
have no intrinsic value in and of themselves. We re called our findings that a bond is not a payment to
yield public revenue at the time it is provided, but ra ther, is provided as a form of security. Indeed,
we recalled that India itself acknowledges that "bas ed on the ordinary meaning and the meaning in
legal parlance of the terms "provisional duties" and "security", there is clearly a difference, as a matter
of law, between collecting duties, provisionally or othe rwise, and the taking of security in the form of
bonds or cash deposits."
266
7.263 Therefore, for the same reasons we concluded that the enhanced bond is not an anti-dumping
duty, with the result that the application of the EBR falls outside the scope of Article 9 of the Anti-
Dumping Agreement and Article VI:2 of the GATT 1994; we also conclude that India's as such claims
under Article 9 of the Anti-Dumping Agreement and Article VI:2 fail.
7.264 We note that the provisions in Articles 19.2, 19.3, and 19.4 of the SCM Agreement governing
countervailing duty investigations are substantively sim ilar to those in Articles 9.1, 9.2, 9.3 and 9.3.1
of the Anti-Dumping Agreement. Accordingly, based on our reas oning that the enhanced bond is not
an anti-dumping duty, with the result that the application of the EBR falls outside the scope of
Article 9 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994; we also conclude that
the enhanced bond is not a counter vailing duty, with the result that the application of the EBR falls
outside the scope of Article 19 of the SCM Agreement and Article VI:3 of the GATT 1994.
8. Article 18.4 of the Anti-Dumping Agreement , Article 32.5 of the SCM Agreement and
Article XVI of the WTO Agreement
(a) Main arguments of India
7.265 India claims that the Amended CBD is inconsiste nt with obligations under Article XVI:4 of
the WTO Agreement , Article 18.4 of the Anti-Dumping Agreement and Article 32.5 of the SCM
Agreement. India considers that the Amended CBD a nd the identified US statutory and regulatory
provisions authorize impermissible specific action ag ainst dumping, and also violates Articles 7 and 9
of the Anti-Dumping Agreement , as well as Articles 17 and 19 of the SCM Agreement . India
recognizes that its claims under Article 18.4 of the Anti-Dumping Agreement and 32.5 of the SCM

264 See India's responses to Second Set of Questions, para. 29.
265 The New Shorter Oxford English Dictionary, L. Brown (ed.) (Clarendon Press, 1993), Vol. I, p. 769.
266 See India's responses to Second Set of Panel Questions, para. 33.

Agreement are consequential to its claims that the cited provisions are inconsistent as such with other
provisions of the GATT 1994, the Anti-Dumping Agreement, or the SCM Agreement.267
(b) Main arguments of the United States
7.266 Due to the continuing relevance of the "manda tory/discretionary" distinction, the United
States argues that the Amended CBD and cited laws and regulations are not as such inconsistent with
any separate obligations of the covered WTO Agreement s, and are therefore consistent with
Article 18.4 of the Anti-Dumping Agreement, Article 32.5 of the SCM Agreement, and Article XVI:4
of the WTO Agreement.
(c) Evaluation by the Panel
7.267 We consider India's claims that the Amended CBD is inconsistent w ith obligations under
Article 18.4 of the Anti-Dumping Agreement, Article 32.5 of the SCM Agreement, and Article XVI:4
of the WTO Agreement.
7.268 Article 18.4 of the Anti-Dumping Agreement provides that:
"Each Member shall take all necessary steps, of a general or particular character, to
ensure, no later than the date of entry into force of the WTO Agreement for it, the
conformity of its laws, regulations and ad ministrative procedures with the provisions
of this Agreement as they may apply to the Member in question."
7.269 Similarly, Article 32.5 of the SCM Agreement provides that:
"Each Member shall take all necessary steps, of a general or particular character, to
ensure, not later than the date of entry into force of the WTO Agreement for it, the
conformity of its laws, regulations and ad ministrative procedures with the provisions
of this Agreement as they may apply to the Member in question."
7.270 Article XVI:4 of the WTO Agreement provides that:
"Each Member shall ensure the conformity of its laws, regulations and administrative
procedures with its obligations as provided in the annexed Agreements."
7.271 We do not make findings on the claims of Indi a that the Amended CBD violates Article 18.4
of the Anti-Dumping Agreement , Article 32.5 of the SCM Agreement and Article XVI of the WTO
Agreement. The Appellate Body has previously c onsidered it unnecessary to make findings with
respect to claims under Article 18.4 of the Anti-Dumping Agreement and Article XVI:4 of the WTO
Agreement when a Panel finds that a complainant fails to establish that an as such violation has
occurred under any specific obligation of the covered agreements. 268 In our opinion, the Appellate
Body's rationale is equally applicable to India's claim under Article 32.5 of the SCM Agreement. We
therefore, also do not make any findings on the cl aims of India that the Amended CBD violates
Article 32.5 of the SCM Agreement.
9. Other as such claims by India under the GATT 1994
7.272 The Panel notes that India has made a number of additional as such claims under the
GATT 1994. In particular, India has requested the Panel to find that the Amended CBD as such is

267 India's second written submission, para. 58.
268 See Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, paras. 210-211.

inconsistent with Articles I:1, II:1(a) and (b) of the GATT 1994 or, alternatively, with Article XI:1 of
the GATT 1994.
7.273 The Panel recalls its view in Section VII.B.5 above that, even if it were to find that the EBR
as applied was not an impermissible specific action agains t dumping, it would not be appropriate to
proceed and rule on India's additional GATT 1994 claims in light of its findings under Articles VI of
the GATT 1994 and its Ad Note, and Articles 1 and 18.1 of the Anti-Dumping Agreement. This view
also stands as regards India's claims concerning the Amended CBD as such. We have found that the
Amended CBD as such constitutes "specific action against dum ping or subsidisation" which is not
inconsistent with Articles 1 and 18.1 of the Anti-Dumping Agreement and Articles 10 and 32.1 of the
SCM Agreement . In particular, we found that the Amended CBD allows for the imposition of
reasonable security as permitted under the Ad Note a nd thus in accordance with the provisions of the
GATT 1994, as interpreted by the Anti-Dumping and SCM Agreements . As explained before, the
Panel is unable to accept that a measure which constitutes specific action against dumping (or
subsidisation) in accordance with the provisions of the Ad Note, could nevertheless be found
inconsistent with other provisions of the GATT 1994. In light of the General Interpretative Note to
Annex 1A of the WTO Agreement, we concluded that our findings under of the Article 18.1 of the Anti-
Dumping Agreement, and by reference, Article VI of the GATT 1994 and the Ad Note must prevail
over any potential finding of violation under Articles I, II:1(a) and (b) and XI of the GATT 1994. This
also applies to our findings under Articles 10 and 32.1 of the SCM Agreement.
7.274 We also found support for our view in the principle of international law lex specialis derogat
legi generali. Since Article VI of the GATT 1994, including the Ad Note, "deals specifically, and in
detail", with the issue of security for definitive anti-dumping duties, and those provisions address the
"basic feature" of the measure at i ssue more directly than the other GATT 1994 provisions cited by
India, we concluded that Article VI and the Ad Note thus constitute lex specialis and should prevail
over the more general GATT 1994 provisions cited by India. This also applies in the context of
collecting security for countervailing duties.
7.275 In light of the above, we conclude that it woul d not be appropriate for us to proceed and rule
on India's as such claims under Articles I, II:1(a) and (b) and XI of the GATT 1994
, and we decline to
do so.
D. NOTIFICATION REQUIREMENT UNDER ARTICLE 18.5 OF THE ANTI-DUMPING AGREEMENT AND
ARTICLE 32.6 OF THE SCM AGREEMENT
1. Main arguments of India
7.276 India claims that the United States has violated Articles 18.5 of the Anti-Dumping Agreement
and 32.6 of the SCM Agreement by not informing the Committee on Anti-dumping Practices or the
Committee on Subsidies and Countervailing Measures (the "Anti-Dumping and SCM Committees")
about the Amended CBD. According to India, the EBR unquestionably constitutes a fundamental
change in the United States' administration of its laws and regulati ons relevant to the Anti-Dumping
and SCM Agreements. India argues that the formal designation of the Amended CBD as a "customs
law" is irrelevant.
269 Finally, India submits that Members are obligated to notify changes within a
reasonable period of time in order to make notification requirements meaningful.
2. Main arguments of the United States
7.277 The United States argues that it did not act inconsistently with Article 18.5 of the Anti-
Dumping Agreement or Article 32.6 of the SCM Agreement because the Amended CBD is a "law or

269 India's second written submission, para. 91.

regulation" that relates to the administration of United States customs regulations and continuous
bonds, and is not related to the administration of anti-dumping or countervailing duty laws and
regulations.270 The United States submits that a Member is not obligated to notify the Anti-Dumping
and SCM Committees about any modification to a cust oms administrative procedure that incidentally
affects merchandise subject to anti-dumping or countervailing duties. 271 Furthermore, according to
the United States, neither Article 18.5 nor Article 32.6 specify when a Member must notify the
measures specified, thus eliminating the possibility of a violation these provisions.272
3. Evaluation by the Panel
7.278 India requests the Panel to find that the United States has violated Articles 18.5 of the Anti-
Dumping Agreement and 32.6 of the SCM Agreement by failing to notify the Amended CBD to the
Anti-Dumping and SCM Committees. The United States, however, is of the view that it was under no
obligation to notify the Amended CBD to either of the Committees.
7.279 Article 18.5 of the Anti-Dumping Agreement provides:
"Each Member shall inform the Committee of any changes in its laws and regulations
relevant to this Agreement and in the administration of such laws and regulations."
7.280 Article 32.6 of the SCM Agreement identically provides:
"Each Member shall inform the Committee of any changes in its laws and regulations
relevant to this Agreement and in the administration of such laws and regulations."
7.281 We note that the United States has stated that the Amended CBD "is not a 'law or regulation'
relevant to the Anti-Dumping or SCM Agreements, and does not relate to the administration of those
laws or regulations." 273 Moreover, the United States has d escribed the Amended CBD as containing
"administrative procedures applicable to continuous bonds."274
7.282 Notwithstanding the United States' views, even if the Amended CBD, as a directive, would
not constitute a "law or regulati on", and regardless of whether it addresses US Customs regulations
and continuous bonds, it amends the procedure for collecting security from importers who may be
liable for anti-dumping or countervailing duties. The EBR has been designed as a security for the
collection of potential increased anti-dumping or coun tervailing duties and this security may only be
imposed where a given product is subject to an anti -dumping or countervailing order. We also recall
our findings that the Amended CBD constitutes specific action against dumping or subsidisation
within the meaning of Article 18.1 of the Anti-Dumping Agreement and Article 32.1 of the
SCM Agreement. We arrived at this conclusion by finding, inter alia, that the constituent elements of
dumping and/or subsidisation were present in th e Amended CBD. For all of these reasons, we
consider that the Amended CBD "changes ... the ad ministration" of anti-dumping or countervailing
duty laws and/or regulations and thus falls within the scope of Article 18.5 of the Anti-Dumping
Agreement and Article 32.6 of the SCM Agreement.
7.283 In light of our finding that the Amended CBD falls within the scope of Article 18.5 of the
Anti-Dumping Agreement and Article 32.6 of the SCM Agreement , we must last address whether the
United States has violated its obligations by failin g to notify the Amended CBD to the Anti-Dumping

270 United States' first written submission, para. 81.
271 United States' first written submission, para. 81.
272 United States' first written submission, paras. 79-82.
273 United States' first written submission, para. 81.
274 United States' first written submission, para. 81.

and SCM Committees within a specific timeframe. I ndia has argued that a Member must make such
notifications within a "reasonable" time period. We note that Article 18.5 of the Anti-Dumping
Agreement and Article 32.6 of the SCM Agreement do not specify an exact time limit for a WTO
Member to notify its relevant law or regulation. Despite the absence of a specific deadline, in our
view, in order for any notification to be effective, it must be made within a reasonable time. It is also
our view that Article 18.5 of the Anti-Dumping Agreement and Article 32.6 of the SCM Agreement
were originally formulated to address transparen cy concerns surrounding the administration of anti-
dumping and countervailing duty investigations and measures. A failure to properly notify changes in
the anti-dumping laws or regulations, or the administration of such laws to the Anti-Dumping and
SCM Committees within a reasonable time fails to address that objective.
7.284 In the matter before us, we are unaware that the United States has yet attempted to notify the
Amended CBD to the Anti-Dumping and SCM Committ ees . The United States has failed to do so
despite the fact that the Amended CBD became effe ctive more than three years ago with publication
of the July 2004 Amendment. We consider this delay to be unreasonable.
7.285 We accordingly find that the United States has failed to meet its obligation to notify the
Amended CBD to the Anti-Dumping and SCM Committees.
E. U
NITED STATES' DEFENCE UNDER ARTICLE XX(D) OF THE GATT 1994
7.286 Having found that the EBR constitutes "specific action against dumping" and that it is not a
"reasonable security" under the Ad Note to Article VI of the GATT 1994, and thus it is not "in
accordance with the provisions of the GATT 1994, as interpreted by the [ Anti-Dumping] Agreement",
the Panel will proceed to examine the United States' defence under Article XX(d) of the GATT 1994.
1. Main arguments of the United States
7.287 The United States argues that the Amended CB D is justified under Article XX(d) of the
GATT 1994 as a measure necessary to secure complia nce with United States anti-dumping and
countervailing duty assessment laws. According to the United States, the Amended CBD is necessary
to secure compliance with 19 U.S.C. 1673e(1), wh ich governs the assessment of anti-dumping duties,
as well as general customs regulations related to the payment of duties. Specifically, according to the
United States' argument, the Amended CBD is necessary to secure compliance with US laws
governing revenue collection because it secures un secured liability arising from additional anti-
dumping or countervailing duties owed in excess of cash deposits. The United States has stated that it
considers that problems of "significant potential un secured liability" and "significant risk of default"
exist with respect to subject shrimp entries.275 The United States submits that 19 U.S.C. 1673e(1) and
the other relevant laws and regulations that authorize the Amended CBD are not themselves WTO-
inconsistent. The United States also argues that no reasonable alternative is available to ensure
revenue collection.276
7.288 The United States further argues that the Amende d CBD is consistent with the chapeau to
Article XX. In this regard, the United States submits that the Amended CBD does not constitute a
disguised restriction on international trade or a me ans of arbitrary or unjustifiable discrimination
between countries where the same conditions prevail. In support of this position, the United States
submits that the measure applies to designated me rchandise subject to anti-dumping or countervailing
duties regardless of origin, and applies to all c ountries subject to the anti-dumping order on subject
shrimp. In addition, the United States submits that bond amounts may be determined based on
individualised risk assessments which are available to all importers/principals. Finally, the United

275 United States' first written submission, para. 90.
276 United States' first written submission, para. 92.

States emphasizes that the Amended CBD was publis hed on US Customs' web site when initially
introduced. The October 2006 Notice, which was later published in the Federal Register, is described
by the United States as a complete statement of the measure's contents and how it would be applied,
which allows importers to comment formally on the EBR and its administration, and presents the
directive's objective as addressing revenue collection problems.277
2. Main arguments of India
7.289 India disagrees with the United States and cons iders that the EBR as authorized by the
Amended CBD, is not justifie d under Article XX(d) of the GATT 1994 because it is not necessary to
secure compliance with US laws. As a general matter, India argues that the measure cannot be
considered as necessary or indisp ensable since the United States h as maintained and operated a
retrospective system since at least 1979 without pr eviously encountering a need for the type of
security provided by the EBR. Al so, as specific to subject shrimp, India submits that the US does not
have a basis on record or even expertise for dete rmining a higher likelihood of increase in future
margins or defaults. India further argues that the Un ited States' assertion is flawed that a high risk of
default in payments by subject shrimp importers/pri ncipals exists and that such a risk of default
should justify imposition of the EBR to subject shrimp imports. In this regard, India submits that the
United States improperly established a higher incidence of default in payments by
agriculture/aquaculture importers by factoring in ma rgins for crawfish and garlic importers based on
adverse facts available, defaults by new shippe rs not subject to bond requirements, and surety
bankruptcies.
278 Additionally, India argues that the application of the EBR should not be considered
necessary since less restrictive remedies exist to ensure the collection of anti-dumping or
countervailing duties. India has proposed as alte rnatives, civil remedies, an across-the-board
determination of the financial soundness of all im porters prior to application of the EBR, or
reductions in the duration of assessment review periods. 279 Regardless of whether the measure is
considered necessary, and regardless of the existen ce of less restrictive alternative remedies, India
submits that the EBR does not meet the requirements of the chapeau to Article XX(d). According to
India, the designation of shrimp subject to an anti-dumping order as a covered case was arbitrary and
capricious, and constitutes a disguised restriction on trade. In particular, India considers the EBR's
application to discriminate between the six subj ect countries and other c ountries where the same
conditions prevail.
3. Evaluation by the Panel
7.290 Before examining whether the EBR is justified by Article XX(d) of the GATT 1994, we recall
that the United States has the burden to prove to the Panel that this is the case.280
7.291 We will now look at the text of Article XX(d) and the chapeau of Article XX which provide:
"Subject to the requirement that such me asures are not applied in a manner which
would constitute a means of arbitrary or unjustifiable discrimination between
countries where the same conditions prev ail, or a disguised restriction on
international trade, nothing in this Agre ement shall be construed to prevent the
adoption or enforcement by any contracting party of measures:

277 See United States' first written submission, para. 77.
278 India's second written submission, para. 110.
279 India's second oral statement, paras. 56-57; see also India's second written submission, para. 112.
280 In US – Wool Shirts and Blouses , the Appellate Body held that "the burden of proof rests upon the
party, whether complaining or defending, who asserts the affirmative of a particular claim or defence."
Appellate Body Report, US – Wool Shirts and Blouses, p. 14.

(d) necessary to secure compliance with laws or regulations which
are not inconsistent with the provisions of this Agreement, including
those relating to customs enforcement of monopolies operated under
paragraph 4 of Article II and Article XVII, the protection of patents,
trade marks and copyrights, and the prevention of deceptive
practices[.]"
7.292 We note that, in US – Gasoline, the Appellate Body concluded that the analysis of a measure
under one of the paragraphs of Article XX is a "two-tiered" approach:
"In order that the justifying protection of Article XX may be extended to it, the
measure at issue must not only come under one or another of the particular exceptions
– paragraphs (a) to (j) – listed under Article XX; it must also satisfy the requirements
imposed by the opening clauses of Article XX. The analysis is, in other words, two-
tiered: first, provisional justification by reason of characterisation of the measure
under [in that case] XX(g); second, further appraisal of the same measure under the
introductory clauses of Article XX ..."
281
7.293 We agree and adopt as our own the Appellate B ody's reasoning. Therefore, the Panel shall
first look at whether the EBR is necessary to secure compliance with the relevant provisions of US
law that direct US Customs to assess and coll ect anti-dumping duties. We will only proceed to
analyse whether the EBR meets the requirements of the chapeau to Article XX, i.e whether the EBR
allows for "arbitrary or unjustifiable discrimin ation between countries where the same conditions
prevail", or constitutes a "disguised restriction on intern ational trade", if we have first determined that
the EBR has met the requirements under paragraph (d).
(a) Whether the EBR is necessary to secure compliance with US laws and regulations as
provided in Article XX(d) of the GATT 1994
7.294 The Appellate Body has indicated that two elements should be satisfied in order for a measure
to be provisionally justified under paragraph (d) of Article XX:
"For a measure ... to be justified provisionally under paragraph (d) of Article XX, two
elements must be shown. First, the measure must be one designed to 'secure
compliance' with laws or regulations that are not themselves inconsistent with some
provision of the GATT 1994. Second, the measure must be 'necessary' to secure such
compliance. A Member who invokes Article XX(d) as a justification has the burden
of demonstrating that these two requirements are met."
282
(i) First element: Whether the EBR has been "desi gned" to secure compliance with US laws and
regulations that are not in themselves WTO-inconsistent
7.295 We shall therefore commence our analysis by examining whether the EBR has been
"designed" to secure compliance with US laws and regulations that are not themselves inconsistent
with the GATT 1994. A necessary step in this analysis is t hus to identify which are those US laws or
regulations the compliance with which the EBR is ai med at securing, whether they are not themselves
WTO-inconsistent, and whether the EBR is itsel f designed to secure compliance with the aim
expressed in the relevant US laws or regulations.

281 Appellate Body Report, US – Gasoline, p. 22.
282 Appellate Body Report, Korea – Various Measures on Beef, para. 157.

7.296 The United States claims that the Amended CBD secures compliance with 19 U.S.C. §
1673e(a)(1), which governs assessment of anti-dumping duties and reads as follows:
"Within 7 days after being notified by the Commission of an affirmative
determination under section 1673d (b) of this title, the administering authority shall
publish an anti-dumping duty order which—
(1) directs customs officers to assess an anti-dumping duty equal to
the amount by which the normal value of the merchandise exceeds
the export price (or the constructed export price) of the merchandise,
within 6 months after the date on which the administering authority
receives satisfactory information upon which the assessment may be
based, but in no event later than—
(A) 12 months after the end of the annual accounting period of the
manufacturer or exporter within which the merchandise is entered, or
withdrawn from warehouse, for consumption, or
(B) in the case of merchandise not sold prior to its importation into
the United States, 12 months after the end of the annual accounting
period of the manufacturer or exporter within which it is sold in the
United States to a person who is not the exporter of that
merchandise."
7.297 The United States further submits that the Amended CBD is necessary to ensure compliance
with 19 C.F.R. § 113.13(c), which requires port di rectors to obtain bonds "adequate to protect the
revenue and insure compliance with the law and regulations."
283
7.298 India submits that 19 U.S.C. § 1673e(a)(1) or 19 C.F.R. § 113.13(c) exclusively do not
govern the obligation to require payment of duties owed to the US Treasury. India submits that 19
U.S.C. § 1673e(a)(1) "... directs US Customs to assess anti-dumping duties ... ", and 19 U.S.C. §
1673e(a)(3) "... requires the deposit of estimated an ti-dumping duties pending liquidation ... ". India
considers that 19 U.S.C. § 1673e(b) titled "Impos ition of duty", which governs imposition of anti-
dumping duties, read together with provisions of 19 U.S.C. § 1673f titled "Treatment of difference
between deposit of estimated anti-dumping dut y and final assessed duty under anti-dumping duty
order" actually identifies US Customs' obligation to collect anti-dumping duties.
284 Regardless of the
inclusion of these additional provisions, India has stat ed that all of the provisions read together
identify the obligation of the US Treasury and/or US Customs to collect anti-dumping duties.285
7.299 Taking the parties' views into considerati on, in our view, 19 U.S.C. § 1673e(a)(1) in
combination with certain additional provisions encompass the United States' obligation to collect anti-
dumping duties. Whereas 19 U.S.C. § 1673e(a)(1) directs customs officers to "assess" an
anti-dumping duty, the obligation under 19 U.S.C. § 1673e(b)(1) requires that entries of merchandise
subject to an anti-dumping order "be subject to the imposition of anti-dumping duties". Although
neither the United States or India did not refer to the following, we also note that 19 U.S.C. § 1673
provides that USDOC shall "impose[] upon such me rchandise an anti-dumping duty, in addition to
any other duty imposed in an amount equal to th e amount by which the normal value exceeds the
export price (or the constructed export price) for the merchandise." Additionally, we note that 19

283 United States' responses to Second Set of Panel Questions, para. 54.
284 In the case of countervailing duties, India submits that 19 U.S.C. § 1671e(b) read together with
19 U.S.C. § 1671f(b) govern US Customs' obligation to collect countervailing duties.
285 India's responses to Second Set of Panel Questions, paras. 98-101.

C.F.R. § 351.212(b)(1) requires that "the Secr etary will instruct the Customs Service to assess
anti-dumping duties by applying the assessment rate to the entered value of the merchandise".
Alternately, 19 C.F.R. § 351.211(c)(1) provides that the cash deposit rate will be assessed as the rate
of final liability if an administrative review is not requested. We consider each of these provisions
govern the final collection of anti-dumping or co untervailing duties. Therefore, in our view, 19
U.S.C. § 1673e(a)(1) in combination 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) represents the United States' obligation to collect anti-
dumping duties. We note that 19 U.S.C. § 1673e(a)(3) strictly requires the deposit of " ... estimated
anti-dumping duties pending liquidation ... ".
7.300 Accordingly, the Panel provisionally concludes that for the purpose of considering the United
States' defence under Article XX(d), the law or regul ation at issue is 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), all of which together govern the final collection of anti-dumping or countervailing
duties. We do not consider it necessary to expand ou r discussion to include analysis of 19 U.S.C. §
1673e(a)(3), governing the deposit of estimated anti-dumping duties pending liquidation, or 19 U.S.C.
§ 1673f, governing treatment of difference betwee n deposit of estimated anti-dumping duty and final
assessed duty under anti-dumping duty order.
7.301 The Panel must next consider for the purpo se of examining the United States' arguments
under Article XX(d) whether 19 U.S.C. § 1673e(a)(1) r ead 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) are in themselves not
inconsistent with any provision of the GATT 1994. When considering the relevant provisions of the
GATT 1994 governing anti-dumping duties, the Pane l recognizes that Article VI:2 expressly
recognizes Members' ability to levy anti-dumping duties where lawfully owed. As we have
established in Section VII.B.2(b) above, the Ad No te permits Members to require reasonable security
in a case of suspected dumping until a final determ ination of dumping is made in the assessment
review. The Panel further notes that India h as not expressly challenged any of these laws as
inconsistent with any provision of the GATT 1994. Moreover, regardless of India's expansion of what
constitutes the relevant law enforced by the Am ended CBD, the Panel does not interpret India's
commentary as a challenge to the right of the Unite d States to collect anti-dumping or countervailing
duties. Accordingly, the Panel concludes that, for the purpose of its analysis of the US defence under
Article XX(d) of GATT 1994, 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) are not in themselves
inconsistent with any provision of the GATT 1994.
7.302 As a final preliminary matter, the Panel will next consider whether the Amended CBD, which
authorizes application of the EBR, has indeed been designed to secu re compliance with 19 U.S.C. §
1673e(a)(1), 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). We note that the August 2004 Amendment indicates that one of the goals of amending
the bond directive is "ensuring [US Customs'] ab ility to collect the anti-dumping and countervailing
duties at liquidation and ensuring that the revenue is protected".
286 The August 2005 Clarification
states that the continuous bond guidelines were modi fied as "necessary in order to ensure the revenue
is adequately protected".287 The October 2006 Notice explains:
"Congress has provided [US Customs] authority to require security in order to ensure
the payment of all duties determined to be due to the United States, including revenue

286 Exhibit IND-3, p. 2.
287 Exhibit IND-4, p. 1.

collection gaps between estimated duty deposits and final assessed duties that the
importer fails to satisfy."288
7.303 We note that the stated goal of collecti ng "anti-dumping and countervailing duties at
liquidation" or "final assessed duties" potentially includes both the collection of the amount of duties
established during the final determination in the or iginal investigation as well as any increases in anti-
dumping duties that may arise in the period followin g a final determination but prior to assessment of
final liability.
7.304 In our view, the text of the instruments comprising the Amended CBD clearly indicates that
the stated goals of the measure at issue align with the objectives that 19 U.S.C. § 1673e(a)(1), 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) are
designed to secure: the final collection of anti- dumping or countervailing duties equal to the amount
by which normal value of subject merchandise exceeds to export price of that merchandise. Thus, for
the purpose of examining the United States' argumen ts under Article XX(d), it is sufficient for the
Panel to conclude that the Amended CBD which authorizes the imposition of the EBR has indeed
been designed to secure compliance with 19 U.S.C. § 1673e(a)(1), 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).
(ii) Second element: Whether the EBR is "necessary to secure compliance with" 19 U.S.C. §
1673e(a)(1), 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)
7.305 Once we have established that the EBR has been designed to secure compliance with 19
U.S.C. § 1673e(a)(1), 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), the WTO-compatibility of which is not being contested, we will next examine
whether the EBR is "necessary" to ensure such compliance.
7.306 In this regard, the United States argues th at the Amended CBD, which authorizes the
imposition of the EBR, is necessary to secure comp liance with US laws governing revenue collection
because it secures unsecured liability arising from additional anti-dumping or countervailing duties
owed in excess of cash deposits. In particular, the United States is arguing that the application of the
measure to subject shrimp importers was and remains necessary to secure against "significant
potential unsecured liability" and "significant risk of default" associated with merchandise entries.
289
According to the United States, the Amended CBD w as issued in a year following defaults of more
than $225 million on payment of anti-dumping duties, which reached $629 million as of end of fiscal
year 2006.290 The United States has estimated that the va lue of subject shrimp imports exceeds $2.5
billion291 and thus poses a significant additional risk for uncollected revenue in the event that
importer/principals were to default. The United Stat es claims that the likelihood of default by subject
shrimp importers, and importers/principals of agri culture/aquaculture merchandise more broadly, is
significant due to the fact that such entities tend to be undercapitalised a nd discontinue operations
before payment of final anti-dumping duty liability. 292 With respect to agri culture/aquaculture anti-
dumping cases not including subject shrimp, US Customs concluded that anti-dumping duties
increased 33 per cent of the time, did not change 11 per cent of the time, and declined 56 per cent of

288 Exhibit IND-6, p. 62,278.
289 United States' first written submission, para. 90.
290 United States' first written submission, para. 13.
291 United States' first written submission, para. 2.
292 United States' first written submission, para. 15.

the time.
293 In cases where anti-dumping duties increased, the United States claims that final liability
for anti-dumping duties often exceeded the amount secured by cash deposit and ordinary basic bond.
7.307 India disputes as unreasonable the US' determina tion that subject shrimp importers' dumping
margins are likely to increase and that subject shrimp importers present a heightened risk of default in
comparison to other importers of other products subject to anti-dumping orders. Foremost, India
emphasizes that the US' own analysis of anti-dumping duties in the case of other
agriculture/aquaculture products indicated that rates do not increase 67 per cent of the time. 294 India
also notes that the United States' analysis of th e likelihood of margin increases and the likelihood of
default was based on crawfish and honey imports, and not subject shrimp. India calls into question
the accuracy of the US' analysis, since India claims no basis for co mparison exists that shrimp and
other agriculture/aquaculture merchandise share simila r characteristics related to capitalization rates,
low entry/exit barriers, history of customs du ties payments, reliance on asset-based financing, and
levels of cash flow. 295 India also claims that determinati on of margins for crawfish and garlic
importers are inaccurate predictors for subject shri mp since the dumping margin determinations were
based on the application of adverse facts available, defaults by new shippers not subject to bond
requirements, and surety bankruptcies that led to a higher incidence of default in payments, which in
turn, led to defaults on anti-dumping duties in the years between 2004 and 2006. 296 For these reasons,
India submits that the US also does not have a b asis on record or even expertise for determining a
higher likelihood of increase in future margins or ev en a likelihood defaults by importers of subject
shrimp.297 India also cites a determination by the US CIT that no basis existed in US Customs'
administrative record to establish that shrimp exporters were likely to default on payment of increased
duties.298
7.308 We first look at the ordinary meaning of the word "necessary":
"[t]hat which is indispensable; an essentia l...;...[that] which is required for a given
situation; ...[t]hat cannot be dispensed w ith or done without; requisite, essential,
needful...; [d]etermined by predestination or natural processes, and not by free
will;...resulting inevitably from the nature of things or of the mind itself...;
[i]nevitably determined or produced by a previous state of things...".299
7.309 The Appellate Body has already examined th e concept of "necessary" in the context of
Article XX(d) of the GATT 1994 in Korea – Various Measures on Beef . In this case, the Appellate
Body concluded that, in order to be considered "necessary" to secure compliance, a measure does not
need to be "indispensable", but should constitute so mething more than strictly "making a contribution
to":
"We believe that, as used in the context of Article XX(d), the reach of the word
'necessary' is not limited to that which is 'indispensable' or of absolute necessity or
inevitable to secure compliance certainly fu lfil the requirements of Article XX(d).
But other measures, too, may fall within th e ambit of this exception. as used in
Article XX(d), the term 'necessary' refers, in our view to a range of degrees of
necessity. At one end of this continuum lies 'necessary' understood as 'indispensable';
at the other end, is 'necessary' taken to mean as 'making a contribution to'. We

293 United States' first written submission, footnote 29.
294 See United States' first written submission, footnote 29.
295 India's responses to Second Set of Panel Questions, para. 72.
296 India's second written submission, para. 110.
297 India's second written submission, para. 111.
298 Exhibit-IND – 16, p. 54.
299 The New Shorter Oxford English Dictionary, L. Brown (ed.) (Clarendon Press, 1993), Vol. II,
p. 3118.

consider that a 'necessary' measure is, in this continuum, located significantly closer
to the pole of 'indispensable' than to the opposite pole of simply 'making a
contribution to'."300
7.310 The Appellate Body weighed additional factors in evaluating the necessity of a measure, such
as: (i) the relative importance of the common inter ests or values that the law or regulation to be
enforced is intended to protect; (ii) the extent to which the measure contributes to the realization of
the end pursued, the securing of compliance with the law or regulation at issue; and, (iii) the
restrictive impact of the measure on imported goods. In Korea – Various Measures on Beef the
stated:
"It seems to us that a treaty interpreter assessing a measure claimed to be necessary to
secure compliance of a WTO-consistent law or regulation may, in appropriate cases,
take into account the relative importance of the common interests or values that the
law or regulation to be enforced is intende d to protect. The more vital or important
those common interests or values are, the ea sier it would be to accept as 'necessary' a
measure designed as an enforcement instru ment... There are other aspects of the
enforcement measure to be considered in evaluating that measure as 'necessary'. One
is the extent to which the measure contributes to the realization of the end pursued,
the securing of compliance with the law or regulation at issue. The greater the
contribution, the more easily a measure might be considered to be 'necessary'.
Another aspect is the extent to which the compliance measure produces restrictive
effects on international commerce,[footnote om itted] that is, in respect of a measure
inconsistent with Article III:4, restric tive effects on imported goods. A measure with
a relatively slight impact upon imported produc ts might more easily be considered as
'necessary' than a measure with intense or broader restrictive effects ..."
301
7.311 As pertains to this importance of the interest which the EBR allegedly intends to protect, we
consider that the assessment and collection of anti-dumping or countervailing duties carries
significant importance, specifically in the context of US efforts to enforce trade remedies permissible
under the WTO Agreement s, and generally, for the purpose of securing collection of US Treasury
revenue within the context of its retrospective duty assessment system. It is in this regard that
Article VI:1 of the GATT 1994 expressly recognizes WTO Members' ability to collect anti-dumping
duties where lawfully owed. It also stands to r eason that taking security logically serves the purpose
of collecting the full amount of anti-dumping or countervailing duties owed. The United States
argues that the Amended CBD which allows for the imposition of the EBR, secures an otherwise
unsecured liability – any additional anti-dumping duties owed upon assessme nt that exceed cash
deposits.302 We agree that this would logically aid in the collection of revenue. India does not seem
to dispute that this is the case.303
7.312 As the EBR makes clear on its face, however, we are not dealing with a measure that is
designed to secure the collection of anti-dumping du ties generally. Instead, we are considering a
measure designed to protect against the likelih ood of anti-dumping duties exceeding cash deposit
rates. We have explained earlier that there c ould only be an appropriate basis for taking such
increased security under the Ad Note if a WTO Me mber properly determined that the rates of
dumping provided for in the anti-dumping order were likely to increase (such that the cash deposits
provided for in the anti-dumping order would not pr ovide sufficient security for the relevant case of
suspected dumping). Notwithstanding that, we f ound that the United States had failed to properly

300 Appellate Body Report, Korea – Various Measures on Beef, paras. 161.
301 Appellate Body Report, Korea – Various Measures on Beef, paras. 162-163.
302 United States' first written submission, para. 90.
303 Exhibit IND-8, Exhibit 5, p. 6.

establish that rates of dumping provided for in th e anti-dumping order were likely to increase would
increase and therefore concluded that the United Stat es had failed to demonstrate that the additional
security required through the application of the EB R reasonably correlated to any case of suspected
dumping in excess of the margin of dumping provided for in the anti-dumping order. Accordingly,
we found that the additional security requirements resulting from the application of the EBR were not
"reasonable" within the meaning of the Ad Note. In our view, without adequately establishing that
anti-dumping duties are likely to increase above the cash deposit rates, it does not logically follow that
a security is necessary within the meaning of Article XX(d) of the GATT 1994. Given that the
likelihood of increased anti-dumping duties has not been properly established by the United States, we
do not see the need to impose the EBR to secure against such an outcome.
(b) Conclusion
7.313 Therefore, in light of our findings that that th e United States failed to demonstrate that the
additional security required through the applicati on of the EBR reasonably correlated to any case of
suspected dumping in excess of the margin of dumpi ng provided for in the anti-dumping order, we
cannot determine that the EBR as applied to shrimp is in fact necessary within the meaning of
Article XX(d) of the GATT 1994. Accordingly, we consider that the United States has failed to
establish that the EBR as applied to shrimp is justified as being necessary to secure compliance with
19 U.S.C. § 1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 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) or any other relevant laws.
VIII. CONCLUSIONS AND RECOMMENDATIONS
8.1 In light of the above findings, we reject India's claims that the laws, rules and regulations of
the United States that authorize the imposition of the EBR and the instruments comprising the
Amended CBD are inconsistent as such with the provisions of Articles 1, 7.1(iii), 7.2, 7.4, 9.1, 9.2,
9.3 (including 9.3.1), 18.1 and 18.4 of the Anti-Dumping Agreement; Articles 10, 17.1(c), 17.2, 17.4,
19.2, 19.3, 19.4 and 32.1 of the SCM Agreement; Articles VI:2 and VI:3 of the GATT 1994; and the
Ad Note thereto.
8.2 In light of the above findings, we uphold India's claims that:
(i) the application of the EBR to subject shrimp from India is inconsistent with
Articles 1 and 18.1 of the Anti-Dumping Agreement, and the Ad Note; that
(ii) the application of the EBR to subject shrimp from India prior to the
imposition of the anti-dumping order is in consistent with Article 7.2 of the
Anti-Dumping Agreement; and that
(iii) the United States violated Article 18.5 of the Anti-Dumping Agreement and
Article 32.6 of the SCM Agreement because it failed to notify the Amended
CBD to the Anti-Dumping and SCM Committees;
8.3 We reject the United States' argument that the application of the EBR is justified under
Article XX(d) of the GATT 1994.
8.4 In light of the above findings, we decline to rule separately on India's claims that:
(i) the application of the EBR to subject shrimp from India prior to the
imposition of the anti-dumping order is in consistent with Articles 7.1(iii), 7.4
and 7.5 of the Anti-Dumping Agreement; that

(ii) the application of the EBR to subject shrimp from India is inconsistent with
Articles I:1, Article II:1(a) and (b), X(3)(a), XI:1 and XIII of the GATT 1994;
and that
(iii) the laws, rules and regulations of the United States that authorize the
imposition of the EBR and the instruments comprising the Amended CBD
are inconsistent as such with Articles I:1, Article II:1(a) and (b), X(3)(a),
XI:1 and XIII of the GATT 1994
8.5 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed
under a covered agreement, the action is considered prima facie to constitute a case of nullification or
impairment of benefits under that agreement. Accordingly, we concl ude that to the extent the United
States has acted inconsistently with the provisions of the Anti-Dumping Agreement and the GATT
1994, it has nullified or impaired benefits accruing to India thereunder.
8.6 Article 19.1 of the DSU is explicit concerning the recommenda tion a panel is to make in the
event it determines that a measure is inconsistent with a covered agreement:
[i]t shall recommend that the Member concerned bring the measure into conformity
with that agreement. (footnotes omitted)
8.7 We therefore recommend that the United States bring its measure into conformity with its
obligations under the Anti-Dumping Agreement and the GATT 1994.