UNITED STATES – MEASURES RELATING TO SHRIMP FROM THAILAND
Document: Report of the Panel
Date: 29 February 2008
Document codes: WT/DS343/R
Complainant: Thailand
Respondent: U.S.
Third parties: Brazil, Chile, China, EU, India, South Korea, Japan, Mexico, Vietnam
Dispute stage: Appellate Body
Agreements cited: Art. 2.4.2, 2.1, 2.4, 9.3, 18.1, 7, 9.1, 9.2, 9.3, 7.4  Anti-dumpingArt. VI:2  GATT 1994Art. 7.2  Anti-dumpingArt. XI:1, I:1, II:1, X:3(a), XX  GATT 1994

UNITED STATES – MEASURES RELATING TO SHRIMP
FROM THAILAND

Report of the Panel

I. INTRODUCTION
A. COMPLAINT OF THAILAND
1.1 On 24 April 2006, Thailand requested consulta tions with the United States pursuant to
Article 4 of the Understanding on Rules and Proce dures Governing the Settlement of Disputes (the
"DSU"), Article XXII:1 of the General Agre ement on Tariffs and Trade 1994 (the " GATT 1994") and
Articles 17.2, 17.3 and 17.4 of the Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 (the " Anti-Dumping Agreement") with respect to certain issues
relating to measures imposed by the United States on imports of certain frozen warmwater shrimp
from Thailand.1 Thailand and the United States held consultations, but failed to resolve the dispute.
1.2 On 15 September 2006, Thailand requested the establishment of a panel pursuant to
Article XXIII of the GATT 1994, Articles 4 and 6 of the DSU, and Article 17 of the Anti-Dumping
Agreement.2
1.3 At its meeting on 26 October 2006, the Dis pute Settlement Body (DSB) established a Panel
pursuant to the request of Thailand in document WT /DS343/7, 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 Thailand in document , the matter referred to the DSB by Thailand in
that document, and to make such findings 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 21 November 2006, the DS B also established a Pa nel pursuant to the
request of India in document , which dealt substantially with the same matter.
1.6 On 19 January 2007, Thailand 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 Thailand 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:
"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

1 WT/DS343/1.
2 WT/DS343/7.
3 WT/DS343/8.

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, Chile, China, the European Communities, India, Japan, Korea, Mexico and Viet Nam
4
reserved their rights to participate in the Panel proceedings as third parties.5
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 use of "zeroing" an d the application of the enhanced continuous
bond requirement (hereafter the "EBR") 6 by the United States on certain frozen warmwater shrimp
imported from Thailand.
A. THE ANTI-DUMPING MEASURE
2.2 The first measure at issue concerns the im position of anti-dumping duties on imports of
shrimp from Thailand. On 27 January 2004, the United States initiated an anti-dumping investigation
of certain frozen and canned warmwater shrimp imported from Thailand, Brazil, China, Ecuador,
India, and Viet Nam. 7 On 28 July 2004, the US Department of Commerce (hereafter "USDOC")
preliminarily determined that certain frozen and canned warmwater shrimp from Thailand were being
sold at less than fair value to the United States (the "Preliminary Determination"). 8 On 1 February
2005, USDOC published an amended fina l determination of sales at less than fair value and an anti-
dumping duty order imposing definitive anti-dum ping duties only on imports of certain frozen
warmwater shrimp from Thailand.9

4 In a letter directed to the DSB, dated 8 February 2007, Viet Nam reserved its third party rights. The
parties did not oppose this request.
5 WT/DS343/8/Rev.1.
6 In its Request for Establishment of the Panel, Thailand uses the term "Continuous Bond
Requirement", instead of EBR to refer to the measure at issue.
7 Initiation of Antidumping Duty Investigations: Certain Frozen and Canned Warmwater Shrimp from
Brazil, Ecuador, India, Thailand, the People's Republic of China and the Socialist Republic of Vietnam ,
69 Fed. Reg. 3876 (27 January 2004).
8 Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final
Determination, and Negative Critical Circumstances De termination: Certain Frozen and Canned Warmwater
Shrimp from Thailand, 69 Fed. Reg. 47100 (4 August 2004).
9 Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty
Order: Certain Frozen Warmwater Shrimp from Thailand , 70 Fed. Reg. 5145 (1 February 2005), Exhibit
THA-14. On 23 December 2004, USDOC published a fi nal determination that frozen and canned warmwater

2.3 In the anti-dumping order, the USDOC estab lished margins of dumping for eleven
individually-investigated Thai exporters ranging fro m 5.7% to 6.8%, and an "all others" margin of
dumping of 6.0%.
2.4 The United States does not accept nor dispute that the "zeroing" used to calculate the anti-
dumping duties at issue in these proceedings is inconsistent with Article 2.4.2 of the Anti-Dumping
Agreement, and does not contest Thailand's zeroing claim for purposes of this dispute.10
B. THE ENHANCED CONTINUOUS BOND REQUIREMENT (THE "EBR")
2.5 The second measure at issue concerns the imposition of the EBR on importers of shrimp from
Thailand subject to an anti-dumping order. On 9 July 2004, US Customs and Border Protection
(hereafter "US Customs") amended its existing bond requirements to include new guidelines specific
for "covered cases" within "special categories" of merchandise. The EBR has been 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")
11, as amended by the Amendment to
Bond Directive 99-3510-004 for Certain Merchandi se Subject to Antidumping/Countervailing Cases
(hereafter the "July 2004 Amendment") 12, the document entitled "Clarification to July 9 2004
Amended Monetary Guidelines for Setting Bond Am ounts for Special Categories of Merchandise
Subject to Antidumping and/or Countervailing Duty Cases" (hereafter the "August 2005
Clarification")
13, the document entitled "Current Bond Fo rmulas" posted by US Customs on its
website on 24 January 2005 (hereafter "Current Bond Formulas") 14, and the Notice published in the
United States Federal Register entitled Mone tary Guidelines for Setting Bond Amounts for
Importations Subject to Enhanced Bonding Requi rements (hereafter th e "October 2006 Notice"). 15
The July 2004 Amendment, the August 2005 Clarification, the document Current Bond Formulas and
the October 2006 Notice is referred to collectively as the "Amended CBD". US Customs has
identified as a primary objective of the directive, "c ontinued vigilance ... to ensure collection of all
appropriate anti-dumping a nd countervailing duties."
16 On 1 February 2005, US Customs
implemented the EBR with respect to all imports of certain frozen warmwater shrimp subject to
anti-dumping duties (hereafter "subject shrimp"). 17 Prior to 1 February 2005, the United States had
also sent notices to 33 importers beginning on 6 August 2004, of which 12 importers furnished

shrimp from Thailand was being sold at less than fair value in the United States. See Notice of Final
Determination of Sales at Less Than Fair Value and Ne gative Final Determination of Critical Circumstances:
Certain Frozen and Canned Warmwater Shrimp from Thailand , 69 Fed. Reg. 76918 (23 December 2004),
Exhibit THA-15. Thereafter, on 21 January 2005, the US International Trade Commission (hereafter "USITC")
determined that imports of frozen warmwater shrimp from Thailand were causing material injury to the US
domestic industry but concluded that imports of canned warmwater shrimp were not causing injury or threat
thereof and should thus be excluded from the Order. See Certain Frozen or Canned Warmwater Shrimp and
Prawns from Brazil, China, Ecuador, India, Thailand , and Vietnam: Investigations Nos. 1063-1068 (Final) , 70
Fed. Reg. 3943 (27 January 2005) and USITC Publication 3748, Certain Frozen or Canned Warmwater Shrimp
and Prawns from Brazil, China, Ecuador, India, Thailand, and Vietnam: [Investigations Nos. 1063-1068
(Final)] (January 2005).
10 United States' responses to First Set of Panel Questions, para. 1.
11 Exhibit THA-1.
12 Exhibit THA-2.
13 Exhibit THA-4.
14 Exhibit THA-3.
15 Monetary Guidelines for Setting Bond Amounts for Importations Subject to Enhanced Bonding
Requirements, 71 Fed. Reg. 62276 (24 October 2006), Exhibit THA-5.
16 Exhibit THA-2.
17 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. 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).

enhanced bonds. To date, "agriculture/aquaculture merchandise" is the onl y merchandise designated
as a "special category" and "shrimp covered by anti-dumping or countervailing duty cases" is
currently the only "covered case" designated within the agriculture/aquaculture category.
C. I
MPOSITION OF CONTINUOUS BONDS AND OTHER SECURITY REQUIREMENTS IN THE CONTEXT
OF THE US RETROSPECTIVE ANTI -DUMPING AND COUNTERVAILING DUTY ASSESSMENT
SYSTEM
2.6 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 coun tervailing duties after merchandise is imported
into the country at the end of assessment or "admin istrative" reviews which are conducted 12 months
following the anniversary month of the relevant anti-dumping order.
18 Certain of the following
aspects of the US system discussed below, may prove relevant to an objective assessment of
Thailand's claim.
1. Overview of anti-dumping and countervailing duty procedures
2.7 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 requiremen t, to ensure collection if anti-dumping or
countervailing duties are ultimately imposed. The pr eliminary determination 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. Sub sequently, USDOC makes a final determination as to
whether dumping or countervailable s ubsidisation is occurring. If th is determination is affirmative
and USITC also issues a final determination that im ports of subject merchandise in the investigation
were causing material injury to the US domestic indus try or threatening with material injury, or that
the establishment of an industry in the United Stat es is materially retarded by reason of subject
merchandise in the investigation, thereafter US DOC issues a public notice, denominated under US
law as an anti-dumping or countervailing duty order. In the anti-dumping or countervailing duty
order, USDOC sets forth ad valorem cash depos it rates for producers/exporters individually
investigated, as well as an "all-others" rate applicable to all other producers/exporters. Pursuant to the
order, importers must post a cash deposit of est imated anti-dumping or countervailing duties for each
import transaction. This cash deposit is based on the overall margin of dumping or countervailable
subsidisation found for the exporter or producer during the investigation phase.
2.8 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

18 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.

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.
2.9 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.
2.10 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.19 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.20
2. Timeline for anti-dumping and countervailing duty procedures
2.11 Under US law, USDOC has a finite period to complete its anti-dumping or countervailing
duty investigation and issue an 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
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 countervailing duty investigation,
USDOC has 20 days (which may be extended to 40 days, only in the case of an anti-
dumping investigation) to determine whethe r to initiate an investigation after it
receives a petition to investigate dumping or countervailable subsidisation.
• In the preliminary phase of an anti-dump ing or countervailing duty investigation,
after USDOC initiates the investigation, US ITC has 45 days (which may be extended

19 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.
20 United States' responses to First Set of Panel Questions, para. 64.

to 65 days) from the date the petition is filed to make a preliminary injury
determination. If USITC makes a preliminar y affirmative injury determination, 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
countervailable subsidisation investigation, from the date it initiated the investigation
to make its preliminary determination of th e 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, only in the case of an anti-dumping
investigation) from its preliminary determina tion to make a final determination of the
dumping or subsidisation margins of inv estigated producers 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 countervailing 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 pe riod of review within 245 days (which
may be extended 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.
D. I
MPLEMENTATION OF THE AMENDED CONTINUOUS BOND DIRECTIVE (THE "AMENDED CBD")
2.12 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.21
2.13 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
impair US Treasury revenue collection. 22 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 designated as "covered cases" to provide continuous customs bonds in
excess of amounts established under 1991 guidelines and in addition to cash deposits of estimated

21 As indicated in paragraph 2.5 above, the Unite d 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.
22 See 19 C.F.R. § 113.13(d). US Customs administers the powers under section 113.13(d) in
accordance with the 1991 Customs Bond Di rective, which provides that "a bond may be demanded with a limit
of liability amount greater than that computed using this formula, provided sufficient evidence of high risk is on
hand to support the higher amount": See Exhibit THA-1, p. 3.

anti-dumping duties per entry. Thus, under the Am ended 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.
2.14 As noted, subject shrimp is currently the only category of merchandise subject to the EBR.
2.15 The following hypothetical example illustrat es the combined total security obligations
imposed on Thai shrimp importers subject to the EBR, including bond and cash deposit requirements:
(a) An importer of Certain Frozen Warmwater Sh rimp from Thailand 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
6.0 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.23
$600
3. Continuous Bond Amount: 24
Basic Bond + EBR ( 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

23 See 19 C.F.R. § 351.211(a). If no administrativ e review is requested, anti-dumping duties will be
assessed at the cash deposit 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)).
24 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 assessed anti-dumping duty
rate plus all applicable duties, taxes, and fees.

 Obligation Description Amount
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.
25
$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.
$60,000
4. Total Obligations: = 1. + 2. + 3.
$200,000 continuous
bond (covering all
shipments in one
year period) + $600
cash deposit per
shipment of $10,000

2.16 The Amended CBD authorizes US Customs to u se the standard formula or instead make
individualised bond determinations for subject Th ai shrimp importers to determine bond amounts.
The Amended CBD (specifically the August 2005 Clarification and the October 2006 Notice)
provides that US Customs may reconsider bond am ounts for individual importers on a case-by-case
basis to ensure that duties are co llected. However, in order to r eceive a reduction in the overall bond
coverage via an individualized bond determination, an importer mu st so request, and may submit
information on its financial condition related to the risk of non-collection for that importer. US
Customs will then determine bond amounts based on the financial information 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 av ailable 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". 26 To date, the United States has
indicated that it received 27 requests for individuali zed bond determinations, of which it has reviewed
22 requests, 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.27
2.17 The Enhanced continuous bonds provided pursu ant 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. 28 As explained in Section II.C.2 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.

25 See 1991 Customs Bond Directive, Exhibit THA-1, which fixed 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.
26 Exhibit THA-5.
27 See United States' Responses to First Set of Pa nel Questions, para. 44; Exhibit US-12. The GAO
Report, Exhibit THA-10, p. 42, indicates that the number of shrimp importers totalled 550 through June 2006.
Exhibit US-17 refers to 530 shrimp importers in 2004.
28 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.

E. THE IMPACT OF THE ENHANCED CONTINUOUS BOND REQUIREMENT (THE "EBR") ON SUBJECT
SHRIMP IMPORTERS
2.18 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 the B asic Bond and EBR as well as provide cash deposits
equal to the anti-dumping duty rate established in th e final determination. Additionally, Thailand
explains that sureties have also "typically" re quired subject shrimp importers/exporters to post
collateral equal to 100 per cent of the EBR to secure the increased bond amounts.29 The United States
contends that evidence presented to this Panel doe s not support 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. 30 Thailand further
explains that subject shrimp importers/exporters ha ve also been required to pay associated fees to
secure the increased bond amounts.31 32 Due to the fact that enhan ced bonds are deemed valid for 12-
month periods of liability, but are not released until final liability has been a ssessed for anti-dumping
duties on the goods covered by the bond, shrimp importers/exporters subject to the EBR have also had
to furnish concurrent enhanced bonds and concurrent rounds of colla teral for bonds covering distinct
12-month periods of liability.33 In the context of the additional security, collateral and fee obligations,
the Government Accountability Office (hereafte r "USGAO") in a report (the "USGAO Report") 34
concluded that subject importers /exporters have likely had to fo rgo other commercial opportunities,
although the effects could not be fully isolated from other changes occurri ng at the same time. 35 The
USGAO Report also observed that some importers have required exporters to export on a Delivery
Duty Paid ("DDP") basis, thereby making the expo rter, as the importer of record, responsible for
customs bond requirements. 36 The parties disagree on the im pact of the increased security

29 In its first written submission, paragraph 125, Tha iland refers to the following statement by the US
Court of International Trad e (hereafter "USCIT") in NFI v. US (Exhibit THA-9, p. 38.): "[T]he testimony of
witnesses for two plaintiffs relating to the requirem ents imposed on plaintiffs seeking new term bonds
corroborates the finding that sureties ty pically require 100 percent collateral in the situations occasioned by the
new bonding requirements." In paragraph 125 of its first written submission, Thailand also refers to
communications between customs brokers and subject exporters (Exhibit THA-13) that discuss 100 per cent
collateral requirements.
30 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.
31 Thailand presents as evidence invoices (Exhibit THA-18) indicating that surety companies have
charged Thai exporters 10 per cent of the amount of the enhanced bond as a fee for providing the bonds. The
United States has emphasized that, as a third party benefi ciary to the contract betw een the surety and the bond
principal, it is not itself a party to the contract, and thus does not set market-based fees charged by sureties or
receive payments: see United States' first written submission, paras. 7 and 10.
32 See e.g. Exhibit THA-9, p. 38 ("the testimony of witnesses for two plaintiffs relating to the
requirements imposed on plaintiffs seeking new term bon ds corroborates the finding that sureties typically
require 100 percent collateral in the situations occasioned by the new bonding requirements.").
33 See e.g. Exhibit THA-18, wherein US Customs in separate communications to a Thai
importer/producer, specified that the importer/producer must post separate enhanced bonds, each of which is
deemed sufficient for one year.
34 Government Accountability Office, Customs' Revised Bonding Policy Reduces Risk of Uncollected
Duties, but Concerns about uneven Implementation and Effects Remain , GAO-07-50 (Washington D.C.:
October 2006), Exhibit THA-10.
35 See USGAO Report, pp. 6, 24 and 35, Exhibit THA-10; see also NFI v. US, Exhibit THA-9, p. 31.
36 See USGAO Report, p. 6, Exhibit THA-10. See also United States' second written submission
(WT/DS343), 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.
37
2.19 In October 2006, the USGAO concluded that th e Amended CBD criteria were not transparent
or consistently applied. 38 On 13 November 2006, the US Court of International Trade (hereafter
"USCIT") ruled that US Customs appeared to have discretion under US law to consider potential anti-
dumping or countervailing duty in setting continuous bond amounts 39; 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 40, and that the application of the Amended CBD to the eight complaining
importers was arbitrary and capricious. 41 For this reason, the USCIT issued a preliminary injunction
status quo in favour of eight of the 20 complaining impor ters, prohibiting the enforcement of any side
agreements that limited importation 42, 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. 43
The USCIT's final decision on the merits of the complainants' legal claims is pending. After the GAO
Report was issued but prior to publication of the USCIT's ruling, US Customs published the Amended
CBD criteria in the October 2006 Notice, whic h further described the process for obtaining
individualized bond amounts.
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1 Thailand requests the Panel;44
(a) to find that, regarding the application of the EBR to subject shrimp from Thailand,
the United States acted inconsistently with:
(i) Article 18.1 of the Anti-Dumping Agreement by taking specific action against
dumping that is not in accordance with the provisions of Article VI of the
GATT 1994 as interpreted by the Anti-Dumping Agreement;
(ii) subsidiarily, Articles 7 and 9
45 of the Anti-Dumping Agreement, Article VI:2
of the GATT 1994, and the Ad Note to Article VI:2 and 3 of the GATT 1994
(the "Ad Note").
(iii) Article XI:1 of the GATT 1994 by imposing an impermissible restriction on
imports of shrimp from Thailand; or, alternatively, that the United States
acted inconsistently with Article II:1( a) and the first and second sentences of
Article II:1(b) of the GATT 1994 by imposing impermissible duties or
charges on imports of shrimp from Thailand.

37 See e.g. Thailand's first written submission, para s. 144-145; United States' first written submission,
para. 41.
38 See generally, USGAO Report, Exhibit THA-10.
39 See Exhibit THA-9, p. 42.
40 See Exhibit THA-9, p. 54
41 See Exhibit THA-9, p. 58.
42 See Exhibit THA-9, p. 73.
43 See Exhibit THA-9, p. 72.
44 Thailand's first written submission, paras. 288-290.
45 In its Request for Establishment of the Panel, pa ra. 2 (vi), Thailand also claimed a violation of
Articles 9.1, 9.2 and 9.3 of the Anti-Dumping Agreement. In response to Question 42 from the Panel, Thailand
stated that it did not pursue further a violation under Article 9.1.

(iv) Article X:3(a) of the GATT 1994 by failing to administer its customs laws
and regulations relating to bonds in a uniform, impartial and reasonable
manner.
(v) Article I of the GATT 1994 by failing to extend to imports of subject shrimp
advantages that are provided to imports of shrimp from other countries.
(b) to find that, regarding the Anti-Dumping Measure, the United States acted
inconsistently with:
(i) Article 2.4.2 of the Anti-Dumping Agreement by using the zeroing
methodology to calculate margins of dumping.46
(c) to proceed to address Thailand's claims re garding the consistency of the EBR with
Articles XI, II, X:3(a), and I of the GATT 1994, even if the Panel were to agree with
Thailand on the claim that the application of the Enhanced Bond Requirement
constitutes specific action against dumping w ithin the meaning of Article 18.1 of the
Anti-Dumping Agreement.
(d) to recommend, in accordance with Article 19.1 of the DSU, that the DSB request the
United States to bring the measures at issue into conformity with the Anti-Dumping
Agreement and the GATT 1994 within a reasonable period of time.
(e) to suggest, pursuant to its authority under Ar ticle 19.1, that the United States bring its
measure into conformity by immediately releasing any bonds held by US Customs for
imports of subject shrimp from Thailand pursuant to the EBR, so that those imports,
like all other US imports subject to an ti-dumping duties would be secured by the
Basic Bond Requirement.
3.2 The United States requests that the Panel reject Thailand's claims for the reasons provided in
its first written submission.
47
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 v).
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, Chile, China, the European Communities, India, Korea, Japan and Mexico, are
attached to this Report as Annexes (see List of Annexes, page v).48
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

46 In its Request for Establishment of the Panel, paras. 2 (a) (ii), (iii) and (iv), Thailand also claimed a
violation of Articles 2.1, 2.4 and 9.3 of the Anti-Dumping Agreement. In Thailand's Answers to First Set of
Panel Questions, question 2, Thailand stated that it did not pursue further a violation under these articles.
47 United States' first written submission, para. 81.
48 China and Viet Nam informed the Panel that they would not be providing written submissions.

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
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. T
HAILAND'S COMMENTS ON THE INTERIM REPORT
1. The impact of the EBR on subject importers
6.3 Regarding paragraph 2.18 and co llateral requirements, Thailand requests the Panel to modify
its statement that at least one or more sureties h as required subject importers to provide 100 per cent
collateral, based on statements made by the US CIT that sureties "typically" require 100 per cent
collateral (see NFI v. U.S., Exhibit THA-9, at 38). Thailand submits that the dictionary definition of
"typically" is "representatively, characteristically." (see New Shorter Oxford dictionary, vol. 2 (1993),
Brown, L. Ed. (Clarendon Press: Oxford) p. 3442). Further, Thailand requests the Panel to refer to
evidence disclosed in email communications be tween customs brokers and exporters discussing
collateral requirements (see Exhibit THA-13). The United States requests the Panel to decline
Thailand's suggestions due to the fact that the proceedings in NFI v. US are ongoing, contain a
different factual record and involve questions of US law. In particular, the United States notes that
the findings in NFI v. US pertain to 8 importers and should not be extrapolated. The United States
further notes that evidence on record, such as Exhi bit THA-13, does not support the conclusion that
all or a majority of sureties require collateral. However, the United States does request the Panel to
include evidence submitted by Thailand and the Unit ed States on the issue of collateral requirements
into the relevant footnotes. Taking both parties' co mments into consideration, the Panel has modified
paragraph 2.18 in order to reflect both parties' views with respect to the overall effect of the EBR on
all subject shrimp importers/exporters from Thailand.
6.4 Regarding paragraphs 2.18, 6.59 and 6.75, footnote 103 and fees and the stacking effect,
Thailand requests the Panel to refer to Exhibit THA-18 as evidence to support a finding that sureties
have charged associated fees to se cure increased bond amounts. Thailand further requests the Panel
to refer to Exhibit THA-18 as discussed in paragr aphs 132-134 of Thailand's first written submission,
or NFI v. US , Exhibit THA-9 as discussed in paragraphs 59-62 and 113 of Thailand's first written
submission to support its explanation of the stacking effect of bonds on imports. The United States
does not object to inclusion of citation to Exhibit THA-18, but requests the Panel to retain the existing
text in the main body. If the Panel refers to Thailand's arguments regarding stacking, the United
States requests the Panel to also refer to US argume nts presented in paragraphs 7, 10-11, and 40-44 of
its first written submission. In relation to fees, the Panel has added citation to invoices provided in
Exhibit THA-18 and the United States' first written s ubmission, in footnotes to paragraph 2.18 of the
Interim Report. The Panel has also cited to E xhibits THA-18 and THA-13 in paragraph 2.18 when
discussing the stacking of enhanced bonds and its effect on collateral requirements.
6.5 Regarding paragraph 2.18, Thailand also request s the Panel to modify the phrase "certain
importers may have required exporte rs to export on a DDP basis" to reflect a statement by the
USGAO that importers "now require" exporters to export on a DDP basis (see USGAO Report,
Exhibit THA-10, p. 6). Thailand also asks the Pane l to consider a Thai shrimp industry survey (see

Exhibit THA-12) in support of the finding that exporters are required to ship on a DDP basis. The
United States requests the Panel to modify the Interi m Report to reflect the US position that the use of
a DDP basis rather than a Cost, Insurance, and Frei ght (CIF) basis does not affect the costs faced by
the importer of record. The Panel has modified the phrasing of its descriptive section in paragraph
2.18 to reflect statements by the USGAO regarding whether importers of subject shrimp have required
exporters to export on a DDP basis, and has includ ed citation to the United States arguments on the
impact of a shift to a DDP basis.
2. Findings by the USCIT in NFI v. U.S.
6.6 Regarding paragraph 2.19, Thailand requests the Pa nel to additionally refer to findings by the
USCIT from section 2(b) of NFI v. U.S. (see Exhibit THA-9, p. 54). Thailand submits that, as
pertains to the decision on whether to issue a prel iminary injunction, the USCIT 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. The United States construes the current language in the report as accurately
describing the USCIT's decision with respect to the eight complaining importers. The Panel has
retained the original language discussing the US CIT holding while also seeking to clarify its
description of the US court's holding through th e addition of language in paragraph 2.19. The
paragraph now reflects the USCIT's findings that plaintiffs are likely to demonstrate that US Customs
both arbitrarily and capriciously selected the an ti-dumping order as the only covered case, and
arbitrarily and capriciously applied the Amended CBD to the eight complaining importers.
3. Parallel panel proceedings
6.7 Regarding paragraph 6.1, Tha iland requests the Panel to consider substituting the word
"should" for "would" in the final sentence so that it does not appear that the decision to appoint the
same panellists in DS343 and DS345 and to harmonise the timetable for the two cases was made by
the representative of the United States. The United States notes that the US representative stated on
record that "the same panellists could consider on the same timetable the matters in the two requests".
(see WT/DSB/M/222, emphasis added). The Panel has amended paragraph 6.1 (7.1 of the Final
Report) to reflect the statement made by the US representative.
4. "Specific action" in response to dumping
6.8 Regarding paragraphs 6.55 and 6.61, Thailand requests the Pa nel to refer to additional
arguments and evidence provided by Thailand in para graphs 162 – 176 of its first written submission.
Thailand submits that the Panel has only referred selectively to its argumentation regarding whether
the application of the EBR constitutes "specific ac tion" in response to dumping. In particular,
Thailand submits that paragraph 6.61 contains no reference to Th ailand's responses to the United
States' arguments, including those presented in para graphs 19 – 27 of Thailand' s first oral statement,
and paragraphs 8 – 15 of Thailand' s second oral statement. The United States considers the Panel to
have adequately represented Thaila nd's arguments in paragraphs 162 – 176 of the Interim Report, as
well as Thailand's responses to US arguments, and doesn 't believe further changes are necessary. In
the case that the Panel were to refer to argumenta tion offered by Thailand in subsequent submissions,
the United States requests the Panel to refer to US arguments in response to these additions.
6.9 In making its findings, the Panel has set out the main arguments of the parties. The Panel
does not consider that it is required to provide an exhaustive description of all of the parties'
arguments, sub-arguments and supporting evidence wh en making its findings, particularly since the
parties' own summaries of their arguments are annexed to the Report. Thailand's main argument
regarding the specificity of the relevant action is that the EBR may only be applied to goods subject to
US anti-dumping orders. This argument is repe ated on numerous occasions in the extracts identified

by Thailand in its interim comments, and is prope rly reflected in para. 6.55 of the Interim Report
(7.55 of the Final Report).
5. Specific action "against" dumping
6.10 Regarding paragraph 6.59, Thailand requests the Panel to refer to additional arguments and
evidence provided by Thailand in paragraphs 182 – 190 of its firs t written submission. Thailand
submits that the Panel has only referred selectivel y to its argumentation regarding whether the
application of the EBR constitutes specific action "a gainst dumping". In particular, Thailand submits
that paragraphs 6.64, and 6.75 – 6.77 contain no reference to Thailand's submissions or evidence, such
as Thailand's argumentation as to why the effects of the collateral requirements and fees charged by
sureties are relevant considerations when determining that the measure is "against" dumping (as found
by the Panel in footnote 103 of the Interim Repor t), and argumentation that the EBR does not simply
facilitate the collection of anti-dumping duties (as f ound by the Panel in paragraph 6.76). The United
States considers the Panel to have adequately repr esented Thailand's submissions and evidence in the
Interim Report, including arguments regarding colla teral and fees in paragr aph 6.75 of the Interim
Report, and Thailand's argument that the EBR does not solely facilitate the collection of anti-dumping
duties. In the case that the Panel were to refer to argumentation offered by Thailand in subsequent
submissions, the United States requests the Panel to refer to US arguments in response to these
additions.
6.11 The Panel considers that it has appropriately summarized the main arguments of Thailand
regarding the impact of the application of the EBR. The Panel does not consider that it is required to
provide an exhaustive description of all of the parties' arguments, sub-arguments and supporting
evidence when making its findings, particularly sin ce the parties' own summaries of their arguments
are annexed to the Report.
6. Application of the Ad Note
6.12 Regarding paragraphs 6.81 – 6.87, Thailand s ubmits that the Panel's discussion of Thailand's
arguments regarding the application of the Ad Note is incomplete. In particular, Thailand submits
that the Panel only discusses arguments regarding the relationship between the Ad Note and the Anti-
Dumping Agreement, but not other arguments related to other issues discussed in Section VI.C.4, such
as the proper interpretation of the Ad Note (see e.g. Thailand's first oral statement, paras. 9 – 16).
6.13 Thailand requests the Panel to address the following arguments: (a) Thailand's argument
regarding the ordinary meaning of the term "sus pected dumping", based on its ordinary meaning and
the context of the authority to impose anti-dumping du ties in Article VI:2 (see Thailand's responses to
the Panel's first set of questions, paras. 47 – 49; Thailand's second written submission, paras. 27, 30 –
31); (b) Thailand's argument that Article VI and the Anti-Dumping Agreement require a simultaneous
finding of the existence of dumping and injury (see Thailand's first oral statement, paras. 13 – 14,
Thailand's second written submission, paras. 26, 31); (c) Thailand's argument that the term "cash
deposit" as used in the Anti-Dumping Agreement refers only to provisional measures (see Thailand's
second oral statement, paras. 38 – 42); and (d) Tha iland's argument that the purpose of cash deposits
of estimated anti-dumping duties collected after the imposition of an anti-dumping order is to protect
domestic industries rather than to secure the paym ent of potential increases in liability (see Thailand's
second oral statement, para. 54).
6.14 In addition, Thailand submits that the Pane l has not discussed Thailand's responses to the
United States' arguments, such as in paragraph 6.87 of the Interim Report, regarding the United States'
contention that Thailand's arguments would mean that security pending final assessment of anti-
dumping duties was nowhere permitted by the Anti-Dumping Agreement or the GATT 1994 (see e.g.
Thailand's first oral statement, paras. 5 – 7; Thailand's second written submission, paras. 8 – 12;

Thailand's response to the Panel's second set of qu estions, paras. 23 – 25; Thailand's second oral
statement, para. 7).
6.15 The United States considers the Panel to have adequately represented Thailand's arguments
regarding the ordinary meaning of "suspected dum ping", Article VI, the meaning of "cash deposit"
and the alleged "purpose" of cash deposits in th e Interim Report. The United States considers
unwarranted Thailand's request to respond to argum ents regarding what Thailand claims would not
prevent the United States from administering its retrospective duty assessment system. The United
States, contends that this argument is premised on a claim that "cash deposits" are "duties", which the
Panel has discussed and rejected in paragraphs 6.110 – 6.121 of the Interim Report.
6.16 Thailand's main argument regarding the ordinary meaning of the term "suspected dumping" is
that "[t]he ordinary meaning of 'suspected' is 'that one suspects to exist or to be such' " (footnote
omitted). Given that an investigation under Article 5.1 of the Anti-Dumping Agreement is to
determine the "existence" of dumping, dumping can no longer be said to be merely "suspected" once a
final determination in such an investigation has been made.
49 This argument is premised on the view
that the existence of dumping is established on ce the anti-dumping order is imposed. The Panel
addresses this issue – and therefore the premise of Th ailand's argument - at para. 6.102 of the Interim
Report. The Panel addresses this issue further – with specific reference to Thailand's argument
regarding Article 5.1 of the Anti-Dumping Agreement – in paras 6.107 – 6.109 of the Interim Report.
6.17 Thailand's argument that Article VI and the Anti-Dumping Agreement require a simultaneous
finding of the existence of dumping and injury is necessarily addressed in our view, expressed at para.
6.108 of the Interim Report, that the conditio ns for imposing anti-dumping measures (including
therefore the existence of injury and causation) ar e established in respect of the "current situation"
prevailing at the time of imposition. Our point rema ins, though, that a finding of dumping (and injury
and causation) at the time of imposition does not mean that there will necessarily be dumping in
respect of future import entries.
6.18 Thailand's argument that the term "cash deposit", as used in the Anti-Dumping Agreement ,
refers only to provisional measures is necessarily addressed by our consideration of the negotiating
history of the Ad Note, which makes it clear that th e Ad Note is not limited to provisional measures
taken prior to the final determination of dumping. This argument is further addressed by our review
of the relationship between the Ad Note and the Anti-Dumping Agreement, for it is premised on an
assumption that the terms of Article 7.2 of the Anti-Dumping Agreement somehow trump those of the
Ad Note.
6.19 We have included footnote 170 at paragraph 7.122 of our Final Report to address Thailand's
argument in respect of the purpose of cash deposits collected after the imposition of an anti-dumping
order.
6.20 To the extent that Thailand's comment in resp ect of paragraph 6.87 of the Interim Report
would suggest that the United States is entitled to continue its current practice of collecting cash
deposits, we note Thailand's argument that "the United States is authorised under Article 9 of the Anti-
dumping Agreement to maintain its current practice of collecting cash deposits of estimated anti-
dumping duties following the imposition of definitive anti-dumping duties." 50 This argument is
necessarily addressed – and rejected - through our findings on the possible treatment of cash deposits
as anti-dumping duties. To the extent that Thailand' s comment refers to its argument that the United

49 See para. 47 of Thailand's Responses to the First Set of Panel Questions.
50 See Thailand's second written submission, para. 9.

States could collect security under the Basic Bond Requirement,
51 we note that these proceedings
concern the WTO-consistency of the specific facts surrounding the application of the EBR. Whether
or not the United States might legitimately take action under some other provision of its domestic law
does not affect our analysis of the application of the EBR in light of the relevant provisions of the
covered agreements, including Article 18.1 of the Anti-Dumping Agreement and the Ad Note. While
we examined other forms of security that might potentially be applied under the Ad Note, we did so in
order to shed light on the interpretation of that provision. Thailand's arguments regarding possible
security under the Basic Bond Requirement would not serve this function, for Thailand has made it
clear that the Basic Bond Requirement would not ap ply under the Ad Note, which it considers to be
superseded by the Anti-Dumping Agreement.
7. Ordinary meaning of the text of the Ad Note
6.21 Regarding paragraphs 6.100 – 6.106, Thailand submits that the Panel has not discussed the
ordinary meaning of the term "suspected dumping" in the Ad Note as interp reted in accordance with
Article 31 of the Vienna Convention on the Law of Treaties. Thailand conte nds that the Panel has
instead interpreted the term "suspected dumping" so lely by reference to the processes of the United
States' investigating authority. Thailand therefore re quests the Panel to verify that the interpretation
of the ordinary meaning of the text of the Ad Note is based on the ordinary meaning of the text, in
accordance with Article 31 of the Vienna Convention, and not strictly on US administrative practice.
Thailand also requests the Panel to provide refere nce to the records in paragraphs 6.101 – 6.102
regarding discussion of US administrative processes . The United States disagrees with Thailand's
request to modify the discussion of "suspected dum ping". The United States does not consider the
Panel to suggest that "suspected" dumping should no t be interpreted based on its ordinary meaning,
nor that the Panel adopted a meaning of "suspected" th at is inconsistent with its ordinary meaning.
The United States also considers that the Panel's ev aluation of the US duty assessment system in this
context appears intended not to interpret the term "s uspected", but to assess how that term applies to
the particular facts of this dispute. Neverthe less, if the Panel chooses to include reference and
citations to the record describing duty assessment, the United States suggests the Panel refer to the
description of the US retrospective duty assessment system set forth in paragraphs 2.7 – 2.10 of the
Interim Report.
6.22 The Panel had not understood there to be any disagreement between the parties regarding the
ordinary meaning of the term "suspected dumping" . Rather, the disagreement concerned the question
of whether or not there could still be "suspect ed dumping" after the imposition of an anti-dumping
order. Since in this case the relevant anti-dumping order was imposed by the United States, the Panel
considered this issue in the context of the US system. The Panel did not refer to the context of the US
system to interpret the terms "suspected dumping" per se. We have included paragraph 7.101 in the
Final Report to clarify our interpretation of the phrase "suspected dumping".
6.23 Regarding Thailand's suggestion that we incl ude references for our description of the US
administrative processes, we note that this descri ption is based on descriptions of the relevant
processes provided by the parties (both orally and in writing) during the course of these proceedings.

51 See, for example, para. 7 of Thailand's oral statement at the first substantive meeting. We understand
that this argument does not include the US practice of collecting cash deposits, for Thailand's argument pre-
supposes that action under the Basic Bond Requirement will not constitute "specific action against dumping"
(see para. 17 of Thailand's comments on the Interim Repo rt), whereas cash deposits are necessarily "specific
action against dumping".

8. Administrative reviews and exporter-specific assessment rate assignments
6.24 Regarding paragraph 6.109 and footnote 136, Th ailand requests the Panel to clarify through
references to the record the finding that the Un ited States in its administrative reviews initially
assesses whether the export price for particular e xports was below normal value. Thailand submits
that evidence before the Panel, including the prel iminary determination in the first administrative
review of shrimp from Thailand, indicates that th e United States' actual determination in assessment
reviews is based on an overall calculation of a si ngle dumping margin for each exporter, based on all
of the exporters' transactions within the review pe riod (see Exhibits US-5, US-6). The United States
considers the discussion of how the United States calculates the anti-dumping margin to be accurate in
its current form. Regardless, the United States hi ghlights the Panel's finding that the existence of
dumping is established after imports are made.
6.25 Thailand also requests the Panel to explain the statement that the calculation of an exporter-
specific assessment rate in an administrative review is done "for the sake of administrative
convenience." Specifically, Thailand requests the Pa nel to explain the meaning of "administrative
convenience" and how this concept differs from a published determination of a margin of dumping
within the meaning of the Anti-Dumping Agreement for each exporter. The United States does not
consider it necessary for the Panel to elaborat e on the meaning of the term "administrative
convenience".
6.26 The Panel has made a number of changes to f ootnote 155 to its Final Report in order to
address the concerns raised by Thailand.
9. Cash deposits
6.27 Regarding paragraph 6.113, Thailand also request s the Panel to explain the statement that "a
cash deposit is not cash and is not a payment to yield public revenue at the time it is provided", and in
what sense cash deposits of estimated duties paid on entry of goods subject to US anti-dumping orders
are not "cash". Thailand submits that the parties di d not dispute that cash deposits of estimated duties
are, in fact, "cash" paid to the general fund of the US treasury at the time of importation. Thailand
requests the Panel to clarify its position through reference to US la w and the record and to clarify
what is the process where a cash deposit "is conve rted from a deposit or security, into a form of
payment". The United States disputes Thailand's read ing of the Panel's findi ng, contending the Panel
to have meant that cash deposits are not liquidate d revenue without the same attributes as cash.
However, if the Panel were to include citation to the record on the transformation of cash deposits into
a form of payment, the United States suggests refe rring to the description of the assessment review
process in paragraphs 6.110 – 6.121 and 2.8 – 2.9 of the Interim Report.
6.28 The Panel has made a number of changes to para graph 6.113 (now 7.114 of its Final Report)
and inserted footnote 170 in its Final Report order to address the concerns raised by Thailand.
10. Negotiating history of the Ad Note
6.29 Regarding paragraph 6.124, Thailand submits that , in its submissions, it referred to the 1959
Report of the Group of Experts as well as the 1948 Re port of the Working Party that adopted the Ad
Note, when discussing the negotiating history of the Ad Note (see Thailand's first oral statement, para.
15, Thailand's response to the first set of Panel questions, para. 10, and Th ailand's response to the
second set of Panel questions, para. 42). Accord ingly, Thailand requests the Panel to revise
paragraphs 6.124 – 6.125 to reflect both of these references to the negotiating history. The United
States does not consider changes to this section necessary because it views the Panel's analysis as
more than adequate. The United States also notes th e Panel's statement that it is not referring to the
negotiating history because it does not consider it dete rminative of the issue before it. The United

States considers that Thailand's reference to the 1948 Working Party Report does not detract from the
Panel's conclusions concerning the negotiating history, but is instead fully consistent with the Panel's
interpretation, under which dumping is suspected until anti-dumping duties are finally assessed and
collected.
6.30 The Panel has inserted paragraphs 7.127 and 7.128 in its Final Report addressing this issue.
11. Likelihood of increase of dumping margin for future imports as a best proxy
6.31 Regarding paragraphs 6.137 – 6. 138, Thailand submits that if a Member may also make a
separate prospective determination of the likely dumping margin for future imports, and if the
Member properly determines that the rates of dump ing found in the final determination of dumping
are likely to increase, then the rate of dumping f ound in the final determination is no longer the "best
and only available proxy for duties that ultimatel y may be assessed". In light of this, Thailand
requests the Panel to revise these paragraphs to clarif y that, if a Member determines that the rates of
dumping provided in the anti-dumping order are likely to decrease, then that determination also
constitutes "the best estimate of suspected dumpi ng for which security may be required pursuant to
the Ad Note". Thailand submits, in this sense, that a Member could collect security only in this lower
amount as "reasonable" under the Ad Note.
6.32 The United States disagrees with Thailand's a ssertions but nonetheless requests the Panel to
make clarifications to this section. The United States disagrees with the assertion that a Member must
also make a separate prospective determination of the likely dumping margin for future imports in
addition to determining the margin of dumping for the period of investigation. The United States
contends that the Panel did not conclude that the only evidence that a Member may offer to support
the establishment of a "reasonable" security would be through a prospective determination of the
likely dumping margin. According to the United Stat es, this conclusion is without basis in the Ad
Note and would not accord with the Panel's observa tion in paragraph 6.111 that Members are entitled
to operate retrospective duty assessment systems. Th e United States contends that, in accord with the
Panel's conclusion that dumping is suspected un til final assessment under the US retrospective
assessment system, likelihood needs to be evaluate d based on information available to the customs
authority at the time the security is imposed, whic h may or may not include the type identified by
Thailand.
6.33 The Panel declines Thailand's request, since this case does not concern a situation in which a
Member determined that the rates of dumping pr ovided in the anti-dumping order are likely to
decrease.
12. The phrase "error or fraud on the part of import specialists"
6.34 Regarding paragraph 6.141, the Panel refers to "error or fraud on the part of import
specialists." Thailand submits that the term "impor t specialists" is generally used to describe US
Customs officers responsible for issues relating to specific products, but that Thailand made no
allegations of fraud by US Customs officers. Thus, Thailand requests the Panel remove the phrase
"on the part of import specialists" to avoid inference of such an allegation. The United States does not
object to this change.
6.35 The Panel has amended its text to address the concern raised by Thailand.
13. Documentation on likelihood of anti-dumping rate increases
6.36
Regarding paragraphs 6.141 et se q., Thailand contends that the Panel is incorrect in asserting
that the United States did not submit any documenta ry evidence that anti-dumping rates increased 33

per cent of the time. Thailand submits that in response to question 24 from the Panel following the
first substantive meeting with the parties, the Un ited States addressed this via Exhibit US-10 (see US
response to the second set of Panel questions, para . 38). According to Thailand, Exhibit US-10
consists of the following: (i) 1 page that cont ains a chart plotting "Number of Cases" against
"Percentage Change" with figures ranging from 0% to 2500% (but the X axis does not extend from -
1% to -100%) without: (1) a further definition of the term "cases", (2) details of the anti-dumping duty
orders, and period of time covered by these "cases" , (3) details on each individual "case", including
figures for the extent of increase/decrease in the " case", the order concerned, date of entry and value
of trade, or, (4) figures for aggregate number of "cases" where margins increased, decreased or
remained the same; (ii) 1 page that provides figures for uncollected duties on crawfish for fiscal year
2003 with deposit and final rates; (iii) 5 pages of undefined figures
("FirstOfTotalAmt","ADZCaseNbr","Sum","Rate Increase") that relate only to particular exporters of
crawfish from China; and (iv) 3 pages that set out the amount of uncollected duties for fiscal year
2003 on all anti-dumping and countervailing duty orders . Thailand further notes that the United
States described Exhibit US-10 as a US Customs analysis of "historical rate fluctuations in individual
cases" (see US response to the first set of Panel que stions, para. 26). Thailand also asserts that the
United States referred to Exhibit US-10 (at para. 38 of its responses to the Panel's Second Set of
Questions) in support of its assertion that rates increased approximately 33 per cent of the time.
Therefore, Thailand requests the Panel to revise para graph 6.141 to indicate that the United States
submitted documentary evidence in support of the assertion that anti-dumping rates increased 33 per
cent of the time, but such evidence is unclear and unreliable.
6.37 In Thailand's view, however, the analysis in Exhibit US-10 does not have a precise scope and
methodology and does not clearly concern 13 anti- dumping cases involving 340 exporters, as claimed
by the United States in its responses to the second se t of Panel questions, footnote 46. According to
Thailand the analysis is also problematic becau se it appears to be limited to a subset of
agriculture/aquaculture cases, does not contain wei ghting by trade value or volume, and includes
cases involving new shipper reviews. Thailand submits that, given that the cash deposit rate was zero
in new shipper reviews, all affirmative dumping dete rminations would have been considered as cases
of "increases" in dumping rates, resulting in an ex aggerated estimate that cannot be extrapolated to
ordinary assessment reviews or a situation wher e the new shippers bonding privilege has been
removed. Accordingly, Thailand requests the Pane l to specifically cite portions of Thailand's
submissions that set out objections to Exhibit US-10. In light of these changes, nevertheless, even if
there were clear and reliable documentary eviden ce to support the United States' analysis, Thailand
submits that this analysis should not change the Panel's conclusion in paragraphs 6.142 – 6.146.
6.38 Thailand further submits that, in footnote 167 to paragraph 6.141 of the Interim Report, the
Panel's statement that the "Unite d States' evidence in respect of rate incr eases extends beyond the
crawfish case and covers each agriculture/aquacu lture order" is inaccurate as it is unsupported by
evidence on record. Thailand notes that the Panel h as based this statement on footnote 45 of the
United States' responses to the second set of Pane l questions. According to Thailand, however, the
United States provided no evidence to support the assertion that all agriculture/aquaculture orders are
covered in its analysis. Tha iland submits that the United Stat es did not provide a list of the
agriculture/aquaculture orders exam ined by the CBP in Exhibit US-10. Moreover, Thailand submits
that the United States instead provided Exhibit US-1 9 which, according to the United States, updated
Exhibit US-10. Thailand asserts, however, that Exhibit US-19 does not cover "each
agriculture/aquaculture order" as it excludes, at a minimum, 2 anti-dumping orders on pasta and 1
anti-dumping order on frozen raspberries (see Thailand' s responses to the first set of Panel questions,
footnote 55). Moreover, Thailand contends that the United States' assertion that the CBP examined
13 anti-dumping orders (see United States' responses to the second set of Panel questions,
footnote 46), suggests that US Customs' analysis wa s incomplete, as there appear to be more than 13
anti-dumping orders in effect on agriculture/aqu aculture merchandise (see Thailand's responses to the
first set of Panel questions, footnote 55 (listing "at least" 22 orders); Exhibit US-19 (listing 17 orders);

and Exhibit US-21 (listing 21 orders)). Accordingly, Thailand requests the Panel to also revise this
statement in footnote 167.
6.39 The United States notes that it has not cited Exhibit US-10 in support of the argument that
rates increased 33 per cent of the time. Accordi ng to the United States, Exhibit US-10 addresses the
question of the amount by which rates increase in cases where an increase occurs, leaving this Exhibit
irrelevant to the Panel's analysis of the likelihood of a rate increase. The United States asserts that
Exhibit US-19 is relevant to the question of th e likelihood of increase. The United States contends
that this Exhibit examines each assessment for each agriculture/aqu aculture order and compares it to
the cash deposit rate at the time to determine the lik elihood that rates would increase (38 per cent, in
that study). However, due to the Exhibit's inclusion in footnote 167, the United States considers the
Panel to have only concluded that the United Stat es did not provide documentary evidence in support
of its argument that rates increased 33 per cent of th e time, not more generally to arguments regarding
rate increases.
6.40 The Panel declines to find that the United St ates submitted Exhibit US-10 in support of its
argument that rates of dumping had increased in 33 pe r cent of cases. Regarding Thailand's reference
to para. 38 of the US Responses to the Panel's Second Set of Questions, we note that the United States
merely cited Exhibit US-10 in support of its assertio n that "[w]hen rates increased, they increased by,
on average, 285%". Since this was not an issue that we were required to examine, we had no need to
examine the parties' arguments in respect of the co ntents of Exhibit US-10. While the United States
submitted evidence of rate increases in Exhibit US-1 9, the United States made no argument that such
evidence demonstrated that rates increased in 33 per cent of cases.
6.41 We have amended footnote 187 of the Final Re port in light of the concerns raised by
Thailand.
14. The United States defence under Article XX(d) of the GATT 1994
6.42 Regarding Section VI.6(b), Thailand submits that, to the extent that the Anti-Dumping
Agreement constitutes lex specialis with respect to the measure at issue, the panel should only
consider defences available within the Anti-Dumping Agreement and not the United States' defence
under Article XX(d) of the GATT 1994 . Thailand submits that consideration of the United States'
Article XX(d) defence is inconsistent w ith the finding that Article 18.1 of the Anti-Dumping
Agreement, read in conjunction with the Ad Note, aut horises the taking of reasonable security based
on future increases in dumping margins. Accord ingly, Thailand requests the Panel to either not
exercise judicial economy with respect to Thailand's other claims under the GATT 1994 or to also
exercise judicial economy with respect to the Unite d States' defence under Article XX(d). Otherwise,
Thailand requests the Panel to explain why it has c onsidered the United States' Article XX(d) defence
while exercising judicial economy with respect to Thailand's GATT 1994 claims.
6.43 The United States considers Thailand's request without basis since, it contends, the Panel
found that the application of the EBR to subject Th ai shrimp importers breached the Ad Note to
Article VI of the GATT 1994. Because Article XX(d) applied to claims under the GATT 1994 and the
Ad Note is a provision of the GATT 1994 ¸ the United States considers it appropriate to reach the
United States' Article XX(d) defence. Furtherm ore, the United States disagrees with Thailand's
assertion that the Panel should not consider Artic le 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.
6.44 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 6.159 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
Thailand. 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 Thailand's request for review of our findings on this issue.
15. Factual findings on risk of default
6.45 Regarding the Panel's analysis of the meaning of "reasonable" in the Ad Note and "necessary"
under Article XX(d) of the GATT 1994 , Thailand submits that these concepts should involve
consideration of both the likelihood that anti-dumpi ng duties will increase and the risk of default by
importers of subject merchandise due to increased duty liability. With respect to its analysis of the Ad
Note, Thailand notes that the Panel commented that "there is no additional obligation under the Ad
Note to assess the risk of default of individual importers", and made no fact ual findings regarding the
risk of default on increased duty liability. With r espect to its analysis of Article XX(d), Thailand
notes that the Panel also did not consider the risk of default. Thailand re quests the Panel to make
factual findings on the relevance of the risk of default, and whether the United States properly
determined an increased default risk. The United States does not consider it necessary for the Panel to
evaluate evidence regarding risk of default. Ho wever, the United States contends that the Panel
should clarify its findings by inserting a statement confirming that the Panel is not suggesting that a
Member is precluded from requiring security as in "other cases of customs administration", such as
when an importer has a significant risk of default.
6.46 In view of the analytical approach adopted by the Panel in this case, we do not consider that it
is appropriate for us to address the parties' evidence regarding the risk of default. In particular, the
analytical approach of the Panel does not provide any standard against which to assess that evidence.
B. T
HE UNITED STATES' COMMENTS ON THE INTERIM REPORT
1. Typographical errors
6.47 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.
6.48 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.
2. Factual aspects to the dispute
6.49 Regarding paragraph 2.10, the United States re quests replacing the phrase "prior to initiation
of the anti-dumping or countervailing duty order" with the phrase "prior to initiation of the anti-
dumping or countervailing duty investigation." The Panel has corrected this error.

6.50 Regarding paragraph 2.13, 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.
3. Treatment of amendments as part of the measure at issue
6.51 Regarding paragraph 6.48, the United States cons trues the Panel's analysis as suggesting that
the inclusion of certain language in a panel request concerning amendments to measures, or the need
to secure a positive resolution to a dispute could be the basis for treating a measure as part of the
measure at issue and within the panel's terms of re ference. The United States requests the Panel to
remove the third and final sentences from the para graph and base the analysis on the nature of the
measure in question. Thailand disagrees with the United States' suggestion to delete the third and
final sentences of paragraph 6.48. Thailand not es that the finding by the Appellate Body in Chile
Price Band System considered both the extent to whic h the new measure amended the existing
measure, and the fact that the request for the establishment included language to encompass
amendments. Thailand contends it would be misl eading to include the October 2006 Notice within
the Panel's terms of reference without basing the decision in part on the statement in Thailand's
request for establishment that the measure at issu e included any amendments. The Panel has made
minor modifications to the text in paragraph 6.48 (7 .48 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.
4. The EBR formula
6.52 Regarding paragraph 6.72 (7.72 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 charact erise the status of the EBR formula in relation to
the directive.
6.53 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
6.54 Regarding paragraphs 6.108 (7.109 of the Final Report) and 6.111 (7.112 of the Final Report),
the United States requests the Panel to modify lang uage to more accurately reflect the relationship
between Article 9.3.1 of the Anti-Dumping Agreement and retrospective duty assessment. First, the
United States suggests that the Panel replace the pa renthetical that the system is "(specifically
authorised by Article 9.3.1)" with "(which is specifi cally contemplated in Article 9.3.1)". Second, the
United states suggests replacing the parenthetical "(wh ich 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)".
6.55 The Panel has made the changes requested by the United States.
6.
 Characterisation of the "enhanced" bond requirement
6.56 Regarding paragraph 6.128 (7.131 of the Final Report), the United States suggests replacing
the term "extended" with "enhanced" to describe the bonds required under the Amended CBD.
6.57 The Panel has made the change proposed by the United States.

7. The legal standard for determining whether or not the application of the EBR resulted
in "reasonable" security requirements
6.58 Regarding paragraphs 6.136 – 6.146, 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.
6.59 Thailand disagrees that the standard applied by the Panel requires a showing of substantial
certainty. Thailand also disagrees with the US pr oposal to use the term "likelihood", for Thailand is
concerned that reference to "a likelihood" might mean that so long as one possible outcome is that the
amount of final liability may increase over the rate of dumping established in the investigation, there
would be "a" likelihood that rates may increase.
6.60 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.52 The United States recalls
the Panel's statement in paragraph 6.102 of its In terim Report that, due to the operation of the U.S.
retrospective duty assessment system, "there is no cer tainty 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 6.138.
6.61 Thailand submits that the textual changes re quested by the United States would reduce the
objective standard articulated in the Interim Report to a questi on of what "roughly approximates"
potential margins.53 As the Appellate Body has made clear in the context of sunset reviews, the mere
fact that a determination requires a prospective anal ysis does not justify a departure from the standard
of an objective, impartial and reas oned determination of probability. Thailand asserts that the Panel
should not make any revisions to the Interim Report that would suggest that "reasonable security" can
be based on a possibility of rates increasing, rather than the "best estimate" by an "objective and
impartial investigating authority" that rates "wer e likely to increase" and a proper determination of
"the likely amount of such increase."
6.62 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.

52 Interim Report, para. 6.144.
53 US Request for interim Review, para. 13.

6.63 Thailand asserts that none of the parties has argue d that a risk of default constitutes a basis
separate from the amount of liability on which to determine the amount of security. Instead, Thailand
considers that any security must be capped at the amount of potential liability and then may be
adjusted below the total potential liability based on the default risk of the individual importer.
Thailand also asserts that the United States is not co rrect to state that the Panel does not directly
address the United States' arguments regarding risk of default. Thailand asserts that the Panel
considered whether it was necessary to consider risk of default and concluded that it was not.
54
Furthermore, Thailand notes that the Panel found th at security measures such as the EBR constitute
specific action against dumping. As specific action against dumping, such measures may be imposed
only in response to situations covered by Article VI and the Anti-Dumping Agreement, i.e., injurious
dumping. Thailand asserts that the United Stat es' proposal to impose security requirements above the
amount of potential liability for dumping duties, however, would impose additional burdens on
importers based on their financial wellbeing. Tha iland asserts that this is not permitted under the Ad
Note, which permits only action against dumping. Accordingly, to permit additional security above
the potential liability for dumping duties, or security so lely on the basis of a risk of default, would
expand the scope of Article VI of the GATT 1994 and the Anti-Dumping Agreement beyond dumping
and include within their scope matters such as the financial structure and strength of importers that
they were not intended to address or regulate. Thailand submits that any question of additional
security relating to the risk of default could arise only under provisions of the GATT unrelated to
"specific action against dumping."
55
6.64 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
entered at a given time, using the term "dumping liability" rather than the "rate of dumping" in
discussing the amount of security that may be required is more appropriate.
6.65 Thailand asserts that the United States has failed to clearly articulate any good reason for the
Panel to make the suggested changes. Furthermore, Thailand notes the US argument that liability for
anti-dumping duties arises on importation following a finding that dumping is occurring and the
publication of an anti-dumping order. Since the Panel finds that the order gives rise to a suspicion of
dumping, Thailand is concerned that the changes proposed by the United States would imply that
liability for anti-dumping duties may be established on the basis of merely a suspicion of dumping.
6.66 Regarding para. 6.142 of the Interim Report, the Un ited States asks the Panel to delete certain
language describing an argument made by the Unite d States early in the proceedings. Thailand did
not comment on the change requested by the United States.
6.67 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

54 Interim Report, para. 6.139, footnote 164.
55 While the Panel failed to address this argument in the Interim Report, Thailand has persistently
argued in these proceedings that the Ad Note permits only provisional security measures now further regulated
under Article 7 of the Anti-Dumping Agreement. The authority for any additional security for duties imposed as
definitive dumping measures is regulated by the GATT, in cluding Article XX(d) thereof, rather than the Ad
Note or the Anti-Dumping Agreement. See Thailand's Request, para. 17 and accompanying citations at note 20;
Thailand's Second Oral Stat ement, para. 61. Thailand again requests the Panel to address this argument in its
final report.

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.
6.68 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 the United States regarding risk of default in note 164
of the Interim Report. The Panel declines to furthe r 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 Panel's finding s are based on its interpretation of the Ad Note.
The Panel does not have a mandate to consider wh ether or not additional security may be imposed
under principles of ordinary customs administration. Although the Ad Note contains the phrase "[a]s
in many other cases in customs administration", th e 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 unde r the Ad Note, details of such other cases of
customs administration would have been spelled out in the Ad Note in detail.
6.69 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 Thailand's concerns regard ing any suggestion that liability for anti-dumping
duties arises pursuant to imposition of an anti-dum ping order following a de termination of dumping,
injury and causation. As noted at paragraph 6.108 of the Interim Report, this is in fact the basis for
collecting anti-dumping duties under prospective assessme nt systems. Regardless of when liability is
actually deemed to arise, Article 9.3 of the Anti-Dumping Agreement stipulates that, under both the
prospective and retrospective ass essment systems, "[t]he amount of the anti-dumping duty shall not
exceed the margin" of dumping. The Panel has m odified paragraphs 7.140 and 7.141 of the Final
Report accordingly. The Panel has not modified the reference to "the likely amount of such increase"
in paragraph 7.141 of the Final Re port in order to maintain consis tency with the identical phrase in
para. 7.140 of the Final Report (in respect of whic h the United States did not ask the Panel to include
references to duty liability).
6.70 Regarding paragraph 6.188, the United States re quests the Panel to modify the fourth and
sixth sentences to incorporate modifications suggested for paragraphs 6.136 – 6.146. 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, Thailand requests the Pane l to reject this change. Thailand does not
consider the United States to have explained why this change is appropriate in the context of a review
of the standard of "necessary" under Article XX(d). For the reasons set forth above in respect of
paragraphs 6.136 – 6.146, the Panel declines to make the changes requested by the United States.
6.71 In the absence of any objection from Thailand, the Panel sees no reason not to make the
deletion requested by the United States in respect of paragraph 6.142 of the Interim Report (7.144 of
the Final Report).

VII. FINDINGS
A. PRELIMINARY
 ISSUES
1. Parallel panel proceedings in DS343 and DS345
7.1 On 21 November 2006, a month after the establishment of the present Panel, the DSB
established a separate Panel in (DS345) US – Customs Bond Directive the terms of reference of which
also included the application of the EBR to imports of subject shrimp. At that meeting of the DSB,
Thailand stated that it had expected the establis hment 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 appointed 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 ha d already been establishe d, the 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 this Panel and DS345 were held jointly
between the two separate complainants, Thailand and India, and the common defendant, the United
States. Since the Parties were unable to agree on panellists to serve fo r 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 the two separate Panels consisting of the same members.
7.3 On 9 February 2007, Thailand and India 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 sational 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. Thus, on 23 February 2007, the Panel sent to the parti es 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 Thailand's claims
7.5 Thailand has challenged two measures applied by the United States that affect the import of
subject shrimp from Thailand. Thailand has firs t challenged the United States' use of zeroing to
calculate the margin of dumping for importers of Thai shrimp subject to definitive anti-dumping
duties. Thailand claims that the United States' use of zeroing in this instance is inconsistent with
Article 2.4.2 of the Anti-Dumping Agreement.
56
7.6 Thailand has also challenged the application of the EBR to subject shrimp from Thailand.
Specifically, Thailand challenges the consistency of the application of the EBR, which it claims
imposes an impermissible restriction on imports of subject shrimp from Thailand, with the provisions
of Article 18.1 of the Anti-Dumping Agreement. Subsidiarily and alternatively, Thailand claims that
the EBR is also inconsistent with the provisions of Articles 7.1, 7.2, 7.4 and 7.5 of the Anti-Dumping
Agreement; Article VI:2 of the GATT 1994 and the Ad Note, which it claims govern the application of
provisional anti-dumping measures; and Articles 9.1, 9.2 and 9.3 of the Anti-Dumping Agreement and
Article VI:2 of the GATT 1994, which it claims govern the imposition and collection of anti-dumping
duties.
7.7 In addition, Thailand claims that the E BR is inconsistent with XI:1 of the GATT 1994 by
imposing an impermissible restric tion on imports of subject shrimp from Thailand; or, alternatively,
with Article II:1(a) and the first and se cond sentences of Article II:1(b) of the GATT 1994 by
imposing impermissible duties or charges on imports of subject shrimp from Thailand . Thailand
further claims that the United States ac ted inconsistently with X:3(a) of the GATT 1994 by failing to
administer its customs laws and regulations rela ting to bonds in a uniform, impartial and reasonable
manner and with Article I of the GATT 1994 by failing to extend to imports of subject shrimp from
Thailand advantages that are provided to imports of shrimp from other countries.
3. Order of analysis
7.8 The Panel will first address Thailand's claim related to zeroing, and will then proceed to
address Thailand's claims challenging the application of the EBR.

56 As indicated in footnote 46 above, Thailand informed the Panel that it had abandoned its original
claims under Articles 2.1, 2.4 and 9.3 of the Anti-Dumping Agreement in respect to its zeroing claim. The Panel
will therefore not address these claims in this Report.

B. T
HAILAND'S CLAIM AGAINST THE USE OF ZEROING IN THE ORIGINAL INVESTIGATION
7.9 Thailand submits that the United States used zeroing when calculating the dumping margins
for Thai exporters on the basis of weighted aver age-to-weighted average comparisons in the Final
Determination that served as a basis for the An ti-dumping order on subject shrimp from Thailand. 57
According to Thailand, the "zeroing" in which USDOC engaged in this inves tigation is the same as
the "zeroing" in which USDOC engaged in US – Softwood Lumber V and US – Shrimp (Ecuador) .
Thailand submits that the use of such zeroing is inconsistent with Article 2.4.2 of the Anti-Dumping
Agreement.
7.10 In response to a Question from the Panel, the United States asserted that it "is not contesting
Thailand's zeroing claim for purposes of this dispute".58
1. Main arguments of the parties
7.11 Thailand asserts that WTO panels and the Appellate Body have repeatedly found that the use
of zeroing when calculating dumping margins on the b asis of weighted average-to-weighted average
comparisons is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement.59 Thailand notes in
this regard that the Appellate Body stated in US – Softwood Lumber V that:
"Zeroing means, in effect , that at least in the case of some export transactions, the
export prices are treated as if they were l ess than what they actually are. Zeroing,
therefore, does not take into account the entirety of the prices of some export
transactions, namely, the prices of export tr ansactions in those s ub-groups in which
the weighted average normal value is less than the weighted average export price.
Zeroing thus inflates the margin of dumping for the product as a whole."
60
7.12 Thailand further notes that the panel in US – Shrimp (Ecuador) recently stated that:
"There is now a consistent line of Appellate Body Reports, from EC – Bed Linen to
US – Zeroing (EC) that holds that "zeroing" in the context of the weighted average-
to-weighted average methodology in original investigations (first methodology in the
first sentence of Article 2.4.2) is inconsiste nt with Article 2.4.2. We have, as is our
duty, carefully considered the Appellate Body's reasoning in US – Softwood
Lumber V and taken into consideration the consis tent line of Appellate Body Reports
as mentioned in the previous paragraph. We find the Appellate Body's reasoning
persuasive and adopt it as our own."
61
7.13 Thailand asserts that even the USDOC itself h as admitted that it used zeroing in calculating
the dumping margins of Thai shrimp exporters on the basis of average-to-average comparisons in the
Final Determination and the Anti-Dumping Measure . According to Thailand, the USDOC Decision
Memorandum rejected arguments from the Thai expor ters and the Government of Thailand urging it
not to use zeroing and explained its use of zeroing in the following terms:
 "(i) We disagree with the respondents and the Government of Thailand that we should
discontinue our practice of not offsetting dumped sales with non-dumped sales in the

57 See Exhibit THA-14.
58 See United States' Responses to First Set of Panel Questions, para. 1.
59 See e.g. Panel Report, US – Zeroing (Japan) , para. 7.86; Appellate Body Report, US – Softwood
Lumber V, para. 117; Panel Report, US – Softwood Lumber V , paras. 7.224 and 8.1(a)(i); Panel Report, US –
Zeroing (EC), paras. 7.31-32; Appellate Body Report, EC – Bed Linen, paras. 46-66.
60 Appellate Body Report, US – Softwood Lumber V, para. 101.
61 Panel Report, US – Shrimp (Ecuador), paras. 7.40 et seq.

calculation of the overall weighted-average dumping margin, and thus we have not
changed our calculation of the weighted -average dumping margins for the final
determination. Specifically, we made m odel-specific comparisons of weighted-
average export prices with weighted-average normal values of comparable
merchandise. See section 773(a) of the Act; see also section 777A(d)(1)(A)(i) of the
Act. We then combined the dumping margins found based upon these comparisons,
without permitting non-dumped comparisons to reduce the dumping margins found
on distinct models of subject merchandise, in order to calculate the weighted-average
dumping margin. See section 771(35)(A) and (B) of the Act."
62

7.14 Thailand submits that there can therefore be no dispute that this is exactly the same
methodology as was found to be incons istent with Article 2.4.2 in US – Softwood Lumber V.
Thailand also asserts that this is exactly the same methodology as w as found to be inconsistent with
Article 2.4.2 by the US – Shrimp (Ecuador) panel.
7.15 Thailand submits that, for the same reasons as articulated by the Appellate Body in US –
Softwood Lumber V and the recent panel in US – Shrimp (Ecuador) , the use of this zeroing
methodology by the USDOC in calculating the du mping margins of Thai shrimp exporters was
inconsistent with Article 2.4.2 of the Anti-Dumping Agreement. Accordingly, Thailand requests that
the Panel find that the United States acted in consistently with Article 2.4.2 of the Anti-Dumping
Agreement in determining the dumping margins of the Th ai exporters in the Final Determination and
the Anti-Dumping Measure.
7.16 As noted above, the United States is not contesting Thailand's Article 2.4.2 claim.
Furthermore, the United States acknowledges that the same type of "zeroing" occurred in the
investigation of shrimp from Thailand as in the relevant investigation US – Shrimp (Ecuador) . The
United States further recognizes that a measure usin g a similar calculation was the subject of the US -
Softwood Lumber V report, and the DSB ruled that the measure was inconsistent with Article 2.4.2,
first sentence, because of that calculation.
2. Evaluation by the Panel
7.17 As is evident from the arguments of the parties, the issue we are confronted with in respect of
Thailand's Article 2.4.2 claim is very simila r to the issue addressed by the panel in US – Shrimp
(Ecuador). Since we agree with the approach adopted by that panel, our findings regarding Thailand's
claim closely resemble, and refer extensively to, th e findings of that panel. Given that the United
States does not contest Thailand's claim, we fi rst consider our role under Article 11 of the DSU, and
the burden of proof to be discharged by Thailand if it is to succeed in its claim. We then consider the
more substantive issues of whether Thailand has es tablished that the USDOC "zeroed" in the measure
at issue, and whether Thailand has established that the methodology used by USDOC is the same in
all legally relevant respects as the methodol ogy reviewed by the Appellate Body in US – Softwood
Lumber V. Thereafter, we consider whether Thailand has established that the methodology applied by
USDOC is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement.
(a) The role of the Panel under Article 11 of the DSU
7.18 Article 11 of the DSU provides:
"The function of panels is to assist th e DSB in discharging its responsibilities under
this Understanding and the covered agreements. Accordingly, a panel should make an
objective assessment of the matter before it, including an objective assessment of the

62 Decision Memorandum, Exhibit THA-16, p. 8.

facts of the case and the applicability of and conformity with the relevant covered
agreements, and make such other findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in the covered agreements.
Panels should consult regularly with the parties to the dispute and give them adequate
opportunity to develop a mutually satisfactory solution."
63 (emphasis added)
7.19 Notwithstanding the US decision not to cont est Thailand's claim, we are still bound by
Article 11 of the DSU to make an "objective assessment of the facts of the case and the applicability
of and conformity with the rele vant covered agreements, and make such other findings as will assist
the DSB in making the recommendations or in gi ving the rulings provided for in the covered
agreements".
(b) Burden of proof
7.20 The panel in US – Shrimp (Ecuador) made the following findings in respect of burden of
proof:
"Because of its singularity, this dispute raises in a particularly acute fashion the issue
of the burden of proof.
The burden of proof lies, in WTO dispute se ttlement proceedings, with the party that
asserts the affirmative of a particular claim or defence. Ecuador, as the complaining
party, must therefore make a prima facie cas e of violation of the relevant provisions
of the relevant WTO agreements. The bur den would then shift to the responding
party (here the United States), to adduce evidence to rebut the presumption that
Ecuador's assertions are true. In this context, we recall that 'a prima facie case is one
which, in the absence of effective refutati on by the defending party, requires a panel,
as a matter of law, to rule in favour of the complaining party presenting the prima
facie case.'
In our view, the issue of the burden of proof is of particular importance in this case.
This is because Ecuador has made factual and legal claims before the Panel which the
United States does not contest. Yet, the fact that the United States does not contest
Ecuador's claims is not a sufficient basis fo r us to summarily conclude that Ecuador's

63 Article 11 of the DSU. We note that Article 17.6 of the Anti-Dumping Agreement – setting forth the
special standard of review app licable to disputes under the Anti-Dumping Agreement – also applies to this
dispute. Article 17.6 provides that:

"17.6 In examining the matter referred to in paragraph 5:
(i) in its assessment of the facts of the matter, the panel shall determine whether the
authorities' establishment of the facts was proper and whether their evaluation of those facts
was unbiased and objective. If the establishment of the facts was proper and the evaluation
was unbiased and objective, even though the pa nel might have reached a different conclusion,
the evaluation shall not be overturned;
 (ii) the panel shall interpret the relevant provisions of the Agr eement in accordance with
customary rules of interpretation of public international law. Where the panel finds that a
relevant provision of the Agreement admits of more than one permissible interpretation, the
panel shall find the authorities' measure to be in conformity with the Agreement if it rests
upon one of those permissible interpretations."

Given that the United States does not contest Thailand's claims, it is not necessary for us to consider in
detail the implications of the standard of review in this dispute.

claims are well-founded. Rather, we can onl y rule in favour of Ecuador if we are
satisfied that Ecuador has made a prima facie case.

Thus, notwithstanding the fact that the United States is not seeking to refute
Ecuador's claims, we must satisfy ourselves that Ecuador has established a prima
facie case of violation, and notably that it has presented 'evidence and argument...
sufficient to identify the challenged measure and its basic import, identify the relevant
WTO provision and obligation contained th erein, and explain the basis for the
claimed inconsistency of the measure with that provision.' "
64 (footnotes omitted)
7.21 In support, the panel relied on Appellate Body rulings in EC – Hormones and US – Gambling
stressing the importance of the obligation on compla ining parties to establish a prima facie case. We
agree with this reasoning of the panel in US – Shrimp (Ecuador) , and adopt it as our own.
Accordingly, notwithstanding the fact that the United States is not seeking to refute Thailand's claims,
we must satisfy ourselves that Thailand has established a prima facie case of violation of Article 2.4.2
of the Anti-Dumping Agreement.
(c) Has Thailand established that the USDOC "zeroed" in the measure at issue?
7.22 We now consider whether Thailand has establishe d that USDOC "zeroed" in the measure at
issue.
7.23 Thailand has referred to USDOC's Decision Me morandum in support of its factual assertion
that USDOC "zeroed" in the measu re at issue. Furthermore, th e United States acknowledges that
USDOC did zero as alleged by Thailand. In these ci rcumstances, we are satisfied that Thailand has
provided sufficient evidence that USDOC zeroed in the measure at issue.
(d) Has Thailand established that the methodology used by USDOC is the same in all legally
relevant respects as the methodology reviewed by the Appellate Body in US – Softwood
Lumber V?
7.24 We now determine whether the "zeroing" methodology used by the USDOC to calculate the
dumping margins at issue here was, as alleged by Th ailand, the same in all legally relevant respects as
the one the Appellate Body, in US – Softwood Lumber V
 , found to be inconsiste nt with Article 2.4.2
of the Anti-Dumping Agreement.
7.25 The Appellate Body in US – Softwood Lumber V , described "zeroing" as applied by the
USDOC in that investigation as follows:
"First, USDOC divided the product under i nvestigation (that is, softwood lumber
from Canada) into sub-groups of identical, or broadly similar, product types. Within
each sub-group, USDOC made certain adjust ments to ensure price comparability of
the transactions and, thereafter, calculate d a weighted average normal value and a
weighted average export price per unit of the product type. When the weighted
average normal value per unit exceeded the weighted average export price per unit for
a sub-group, the difference was regarded as the 'dumping margin' for that comparison.
When the weighted average normal value per unit was equal to or less than the
weighted average export price per unit for a sub-group, USDOC took the view that
there was no "dumping margin" for that comp arison. USDOC aggregated the results

64 Panel Report, US – Shrimp (Ecuador), paras. 7.7 – 7.11.

of those sub-group comparisons in which the weighted average normal value
exceeded the weighted average export pr ice—those where the USDOC considered
there was a "dumping margin"—after multiplying the difference per unit by the
volume of export transactions in that sub-group. The results for the sub-groups in
which the weighted average normal value w as equal to or less than the weighted
average export price were treated as zero for purposes of this aggregation, because
there was, according to USDOC, no "dumping margin" for those sub-groups. Finally,
USDOC divided the result of this aggregati on by the value of all export transactions
of the product under investigation ( including the value of export transactions in the
sub-groups that were not included in the aggregation). In this way, USDOC obtained
an "overall margin of dumping", for each exporter or producer, for the product under
investigation (that is, softwood lumber from Canada)."(emphasis original)
65
7.26 The Appellate Body also added that:
"Thus, as we understand it, by zeroing, the investigating authority treats as zero the
difference between the weighted average normal value and the weighted average
export price in the case of those sub-groups where the weighted average normal value
is less than the weighted average export pr ice. Zeroing occurs only at the stage of
aggregation of the results of the sub-groups in order to establish an overall margin of
dumping for the product under investigation as a whole."66
7.27 In order to demonstrate that USDOC engaged in similar weighted average-to-weighted
average zeroing in the investigation at issue, Thailand relies on the abovementioned USDOC Decision
Memorandum. That document establishes that USDOC "made model-specific comparisons of
weighted-average export prices with weighted-avera ge normal values of comparable merchandise (...)
[and] then combined the dumping margins found based upon these comparisons, without permitting
non-dumped comparisons to reduce the dumping margins found on distinct models of subject
merchandise, in order to calculate the weighted-average dumping margin."
67
7.28 Furthermore, we note that the United States ac knowledges that the same type of "zeroing"
occurred in the investigation of shrimp fro m Thailand as in the relevant investigation US – Shrimp
(Ecuador), and that that panel found that the zeroing methodology at issue in US – Shrimp (Ecuador)
was the same methodology as at issue in US – Softwood Lumber V.68
7.29 Having examined the description of the me thodology employed by the USDOC in its
Decision Memorandum, we are satisfied that Thailand has demonstrated that the methodology applied
by the USDOC in calculating the margins of dum ping for subject merchandise from Thailand was the
same in all legally relevant respects as the met hodology which was found by the Appellate Body in
US – Softwood Lumber V to be inconsistent with Article 2.4.2 of the Anti-Dumping Agreement. In
our view, the abovementioned acknowledgement by the United States lends support to our conclusion
that Thailand has met its burden to make a prima facie case.
(e) Has Thailand established that the methodology applied by USDOC is inconsistent with
Article 2.4.2 of the Anti-Dumping Agreement?
7.30 We now turn to the legal analysis of Thailand's claim, i.e. whether the measure it challenges is
inconsistent with Article 2.4.2 of the Anti-Dumping Agreement. Article 2.4.2 provides as follows:

65 Appellate Body Report, US – Softwood Lumber V , para. 64 (footnote omitted).
66 Appellate Body Report, US – Softwood Lumber V , para. 65.
67 Decision Memorandum, Exhibit THA-16, p. 8.

"Article 2
Determination of Dumping

2.4.2 Subject to the provisions governing fair comparison in paragraph 4, the
existence of margins of dumping during the investigation phase shall normally be
established on the basis of a comparison of a weighted average normal value with a
weighted average of prices of all comparable export transactions or by a comparison
of normal value and export prices on a transaction-to-transaction basis. A normal
value established on a weighted average basis may be compared to prices of
individual export transactions if the author ities find a pattern of export prices which
differ significantly among different purchasers, regions or time periods, and if an
explanation is provided as to why such differences cannot be taken into account
appropriately by the use of a weight ed average-to-weighted average or
transaction-to-transaction comparison."
7.31 Thailand has relied on the Appellate Body Report in US – Softwood Lumber V
 and the panel
report in US – Shrimp (Ecuador) in support of its claim of inconsistency with Article 2.4.2 and, in
particular, on the Appellate Body's finding that margins of dumping may only be calculated for a
product as a whole under the weighted average-to-wei ghted average methodology provided for in the
first sentence of Article 2.4.2.
7.32 While we are not bound by the reasoning in pr ior Appellate Body and/or panel reports,
adopted Reports create legitimat e expectations among WTO Members, 69 and "following the
Appellate Body's conclusions in earlier disputes is not only appropriate, but is what would be
expected from panels, especially where the issues are the same".70
7.33 The panel in US – Shrimp (Ecuador) explained its understanding of the Appellate Body's
reasoning in US – Softwood Lumber V as follows:
"The Appellate Body began its analysis with the text of Article 2.4.2 and noted that
the question before it was the proper interpretation of the terms 'all comparable export
transactions' and 'margins of dumping' in Ar ticle 2.4.2. In examining the arguments
of the parties with respect to these phrases, the Appellate Body concluded that the
parties' disagreement centered on whether a Member could take into account 'all'
comparable export transactions only at the sub-group level, or whether such
transactions also had to be taken into account when the results of the sub-group
comparisons are aggregated. To examine that issue, the Appellate Body noted the
definition of dumping in Article 2.1 of the Anti-Dumping Agreement. The Appellate
Body found that 'it [was] clear from the texts of [Article VI:1 of the GATT 1994 and
Article 2.1 of the Anti-Dumping Agreement] that dumping is defined in relation to a
product as a whole as defined by the investig ating authority'. The Appellate Body
further considered that the definition of 'd umping' contained in Article 2.1 applies to
the entire Agreement, including Article 2.4.2, and that "'[d]umping', within the
meaning of the Anti-Dumping Agreement, can therefore be found to exist only for the
product under investigation as a whole, and cannot be found to exist only for a type,

69 See Appellate Body Report , Japan Alcoholic Beverages II , p. 14; Appellate Body Report, US –
Shrimp (Article 21.5 – Malaysia), paras. 108-109; Appellate Body Report, US – Softwood Lumber V, paras. 109-
112.
70 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 188.

model, or category of that product."
71 Next, the Appellate Body relied on its Report in
EC – Bed Linen , in which it stated that '[w]hatever the method used to calculate the
margins of dumping ... these margins must be, and can only be, established for the
 product under investigation as a whole.' Thus, the Appellate Body noted that "[a]s
with dumping, 'margins of dumping' can be found only for the product under
investigation as a whole, and cannot be found to exist for a product type, model, or
category of that product." The Appellate Body therefore rejected the United States'
arguments in that case that Article 2.4.2 does not apply to the aggregation of the
results of multiple comparisons at the sub- group level; for the Appellate Body, while
an investigating authority may undertake mu ltiple averaging to establish margins of
dumping for a product under investigation, the results of the multiple comparisons at
the sub-group levels are not margins of dum ping within the meaning of Article 2.4.2;
they merely reflect intermediate calculations made by an investigating authority in the
context of establishing margins of dumping fo r the product under investigation. It is
only on the basis of aggregating all
 such intermediate values that an investigating
authority can establish margins of dumping for the product under investigation as a
whole. On this basis, the Appellate Body held that zeroing, as applied by the
USDOC in US – Softwood Lumber V :
mean[t], in effect , that at least in the case of some export
transactions, the export prices are treated as if they were less than
what they actually are. Zeroing, therefore, does not take into account
the entirety of the prices of some export transactions, namely, the
prices of export transactions in those sub-groups in which the
weighted average normal value is less than the weighted average
export price. Zeroing thus inflates the margin of dumping for the
product as a whole.
The Appellate Body on this basis conclude d that the treatment of comparisons for
which the weighted average normal value is less than the weighted average export
price as "non-dumped" comparisons was not in accordance with the requirements of
Article 2.4.2 of the Anti-Dumping Agreement. As a result, the Appellate Body upheld
the Panel's finding that the United States had acted inconsistently with Article 2.4.2 of
the Anti-Dumping Agreement in determining the existence of margins of dumping on
the basis of a methodology incorporating the practice of zeroing."
72
7.34 The panel in US – Shrimp (Ecuador) further found that "there is now a consistent line of
Appellate Body Reports, from EC – Bed Linen to US – Zeroing (EC) that holds that 'zeroing' in the
context of the weighted average-to-weighted aver age methodology in original investigations (first
methodology in the first sentence of Article 2.4.2) is inconsistent with Article 2.4.2."73
7.35 We have carefully considered th e Appellate Body's reasoning in US – Softwood Lumber V
and taken into consideration the finding of the panel in US – Shrimp (Ecuador) that there is a
consistent line of Appellate Body Reports condemn ing "zeroing" in the context of the weighted
average-to-weighted average methodology in original investigations. Given that the issues raised by
Thailand's claim are identical in all material resp ects to those addressed by the Appellate Body in
Softwood Lumber V , we are satisfied that Thailand has established a prima facie case that the use of
zeroing by the USDOC in the calculation of the margins of dumping in respect of the measure at issue
is inconsistent with the United States' obligations under Article 2.4.2 of the Anti-Dumping Agreement

71 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 188.
72 Panel Report, US – Shrimp (Ecuador), paras. 7.38 and 7.39 (footnotes omitted).
73 Panel Report, US – Shrimp (Ecuador), para. 7.40.

because the USDOC did not calculate these dumping margins on the basis of the "product as a whole"
in that it failed to take into account all compar able export transactions in calculating the margins of
dumping.
7.36 In light of our finding that Thailand has made a prima facie case of violation in respect of the
measure at issue, and in the absence of arguments from the United States to the contrary, we rule in
favour of Thailand. We therefore conclude that the USDOC, by using "zeroing" in the manner
described above, has acted inconsistently with the Un ited States' obligations under Article 2.4.2 of the
Anti-Dumping Agreement.
C. THAILAND'S CLAIM AGAINST THE APPLICATION OF THE EBR TO SUBJECT SHRIMP FROM
THAILAND
1. Scope of the measure concerned
7.37 Thailand's claims concern the application of th e Amended CBD, i.e. the EBR, to imports of
subject shrimp from Thailand. Therefore, before entering into an analysis of each of Thailand's
claims, the Panel first must identify which are the legal instruments that comprise the Amended CBD.
7.38 We recall that our 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 Thailand in document WT/DS343/7, the matter referred to the DSB by Thailand in
that document, and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements."
74
7.39 In its Request for Establishment, Thailand specifi ed that the measure at issue consists of the
following legislative/legal instruments:
(a) the July 2004 Amendment;75
(b) the August 2005 Clarification;76
(c) the document Current Bond Formulas;77 and
(d) "any amendments or extensions to the [EBR], and any related or implementing
measures."78
7.40 In its first written submission, Thailand additionally identified the October 2006 Notice 79,
which was published on 24 October 2006 following the submission of Thailand's Request for
Establishment, as one of the four instruments th at amends and clarifies the United States' policy
related to continuous customs bonds and the operation and application of the EBR. 80 The United
States has not contested the inclusion of the Oc tober 2006 Notice within this Panel's terms of
reference.

74 WT/DS343/8.
75 Exhibit THA-2.
76 Exhibit THA-4.
77 Exhibit THA-3.
78 WT/DS343/7, p. 3.
79 Exhibit THA-5.
80 Thailand's first written submission, para. 51.

7.41 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.
81 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.
7.42 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)."
7.43 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)
7.44 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)
7.45 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".
82 As evident
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.
7.46 The Appellate Body previously 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.83 In that case, the Appellate Body determined that
the amendment at issue should be considered as pa rt of the measure at issue since the amendment

81 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 36; see also Appellate Body
82 See e.g. Appellate Body Report, US – Upland Cotton , para. 284, citing to Appellate Body Report,
US – Carbon Steel, para. 124.
83 Appellate Body Report, Chile – Price Band System, para. 137.

served the purpose of clarifying the legislation th at established the measure at issue and did not
change the original measure into something differe nt than what was in fo rce before the amendment.84
This determination was considered c onsistent with earlier jurisprudence 85 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."86
7.47 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".87
7.48 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 established. Moreover, in our view, Thailand's inclusion of the language
"any amendments or extensions to the [EBR], and any related or implem enting measures" in its
Request for Establishment of a Panel 88 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 measure into something different than what was in force before
its issuance (in this regard, we recall that the Oc tober 2006 Notice includes in its text the statement
that it is the "comprehensive and exclusive statement of the policy and processes expressed in the July
2004 Amendment to the Bond Guidelines, the Bond Fo rmulas posted on [US 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, a nd additionally, accords with the interests of both
parties.
7.49 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. Article 18.1 of the Anti-Dumping Agreement and the Ad Note
7.50 Thailand submits that the application of th e EBR to subject shrimp from Thailand is
inconsistent with Article 18.1 of the Anti-Dumping Agreement. Article 18.1 provides that:

84 Appellate Body Report, Chile – Price Band System, para. 137.
85 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 measures 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 subj ect of the complaint." (See Appellate Body Report, Chile –
Price Band System, para. 138.)
86 Appellate Body Report, Chile – Price Band System, para. 144.
87 See Exhibit THA-5, p. 62277.
88 WT/DS343/7, p. 3.

"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."
7.51 Thailand submits that the application of the EBR to subject shrimp from Thailand constitutes
specific action against dumping in a form other than a permitted response to dumping under the
provisions of GATT 1994 as interpreted by the Anti-Dumping Agreement. The United States rejects
Thailand's claim.
7.52 We begin our evaluation of Thailand's claim by considering whether or not the application of
the EBR constitutes "specific action against dumping". Thereafter, we turn to the issue of whether or
not the EBR is applied "in accordance with the provisions of the GATT 1994, as interpreted by" the
Anti-Dumping Agreement.
3. Does the application of the EBR constitute "specific action against dumping"?
(a) Main arguments of Thailand
7.53 Thailand 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.
(i) "Specific action" in response to dumping
7.54 Thailand notes that in US – Offset Act (Byrd Amendment), the Appellate Body stated that:
"[A] measure that may be taken only when the constituent elements of dumping …
are present, is a 'specific action' in response to dumping within the meaning of
Article 18.1 of the Anti-Dumping Agreement … [i]n other words, the measure must
be inextricably linked to, or have a str ong correlation with, the constituent elements
of dumping …"
89
7.55 According to Thailand, the key consideration fo r the Appellate Body was the "strength of the
link between the measure and the elements of dump ing" and the "degree of correlation between the
scope of application of the measure a nd the constituent elements of dumping". 90 For this reason, the
Appellate Body stated that the test "is met not only when the constituent elements of dumping are
'explicitly built into' the action at issue, but also where … they are implicit in the express conditions
for taking such action". 91 Thailand submits that the constituent elements of dumping are implicit in
the express conditions for the application of the EBR since it may be applied only to goods subject to
a US anti-dumping duty order.
(ii) Specific action "against" dumping
7.56 According to Thailand, the Appellate Body in US – Offset Act (Byrd Amendment) interpreted
the term "against" in Article 18.1 of the Anti-Dumping Agreement as relating to "an idea of
opposition, hostility or adverse effect". 92 Thailand asserts that the Appellate Body held that for a
measure to be "against" dumping:
"[I]t is necessary to assess whether the design and structure of a measure is such that
the measure is "opposed to", has an adver se bearing on, or, more specifically, has the

89 US – Offset Act (Byrd Amendment), para. 239.
90 US – Offset Act (Byrd Amendment), para. 244.
91 US – Offset Act (Byrd Amendment), citing with approval Thailand's Appellee Submission, para. 14.
92 US – Offset Act (Byrd Amendment), para. 250.

effect of dissuading the practice of dumpi ng or the practice of subsidization, or
creates an incentive to terminate such practices."93
7.57 Thailand further asserts that the Appellate Body clarified that action "against" dumping does
not require direct contact between the measure a nd the dumped product or entities responsible for the
product. The Appellate Body stated that:
"[T]here is no requirement that the measure must come into direct contact with the
imported product, or entities connected to, or responsible for, the imported good such
as the importer, exporter, or foreign producer."94
7.58 Thailand argues that the Appellate Body and pa nel agreed that "the test should focus on
dumping … as practices".95
7.59 Thailand submits that the application of the EBR to subject shrimp from Thailand has an
adverse bearing on, and the effect of dissuading, the practice of dumping. Furthermore, the EBR
comes into direct contact with the imported produc t and entities connected to its import such as the
importer, exporter or foreign producer. First, Thailand asserts that the application of the EBR
dissuades the practice of dumping by dissuading imports into the United States of subject shrimp.
Second, Thailand asserts that the EBR has an adverse bearing on both the practice of dumping and the
entities responsible for the dumped goods as it results in enhanced bonds significantly greater than
those required of other goods solely because t hose goods are subject to anti-dumping measures.
Thailand asserts that the adverse bearing of the E BR is compounded by the demands of sureties for
100 per cent collateral to secure the enhanced bonds. 96 According to Thailand, the adverse bearing of
the EBR is further compounded by the "stacking" of bonds, and accompanying collateral, year after
year.97 Thailand argues that the adverse effects of the EBR include the tying up of assets and cash
that forces companies to forego business opportunities, and the fees charged by surety companies.
(b) Main arguments of the United States
7.60 The United States denies that the application of the EBR is either "specific action" in response
to dumping, or specific action "against" dumping.
(i) "Specific action" in response to dumping
7.61 Regarding Thailand'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 98 and the formula it
contains uses the anti-dumping rate as one variable in determining the amount of additional security
that may be prescribed, 99 the United States asserts that these feat ures 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. 100 The United States asserts that, according

93 US – Offset Act (Byrd Amendment), para. 254.
94 US – Offset Act (Byrd Amendment), para. 253.
95 US – Offset Act (Byrd Amendment), para. 253.
96 See paragraph 2.18 above discussing collateral requirements to secure enhanced bonds.
97 See paragraph 2.18 above discussing collateral requirements to secure enhanced bonds.
98 Thailand's first written submission, paras. 162-4 and 169.
99 Thailand's first written submission, paras. 165-67.
100 With regard to the decision of the USCIT that Thailand cites in support of its position that the
directive as applied to importers of shrimp from Tha iland is "specific" to dumping (Thailand's first written
submission, para. 167), the United States notes that the litigation relates to certain claims under US law (rather
than the WTO Agreements) and is ongoing. Moreover, the October 2006 Notice was issued just prior to the

to the Appellate Body, "an action that is not 'spe cific' 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 ."
101 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, 102
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 that has resulted in noncollection happens to be anti-
dumping duty liability.
7.62 The United States rejects Thailand's argument that the directive is "not specifically related to
matters other than dumping." 103 According to the United States, the fact that the additional bond
directive is based on noncollection risk, rather than the constituent elements of dumping or
subsidization, is evident in the text of the directiv e itself and associated materials. 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 directive – previous collection
problems, payment history, indications that the liquidated duty rates may exceed existing security –
has any relation to the constituent el ements of dumping or subsidization.
104 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 merchandi se to be secured, the degree of supervision US
Customs exercises over the transaction, the prio r record of the importer in honoring bond
commitments, and evidence of the importer's ab ility to pay duties assessed – has any bearing on the
constituent elements of dumping or subsidization.
105 The United States submits that all of these
factors are, however, relevant to establishing noncollection risk.
7.63 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.
(ii) Specific action "against" dumping
7.64 The United States further submits that a review of Thailand's assertions demonstrates that the
additional bond directive does not meet the second prong of the test set forth by the Appellate Body
under Article 18.1: it is not an action taken "aga inst" dumping or subsidization. The United States
rejects Thailand's argument that the bond directive is an action "against" dumping because "it results
in enhanced bonds significantly greater than tho se required of other goods solely because those goods

release of the decision referenced by Thailand, and the co urt did not squarely address the Notice in its findings.
See Exhibit THA-9.
101 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 262.
102 Appellate Body Report, US – 1916 Act, para. 130.
103 Thailand's first written submission, para. 175.
104 Exhibit THA-5, p. 62,277.
105 Exhibit THA-5, p. 62,277.

are subject to anti-dumping measures." 106 The United States asserts that the higher bond is not
required "solely because those goods are subject to anti-dumping measures." 107 Rather, the directive
is applied to importers of certain goods because US Customs has determined that those importers pose
a higher risk of default. The United States argues that the fact that this potential liability and risk of
default happen to be attributable to certain anti-dumping and countervailing duties does not permit the
conclusion that the directive is an action "against" dumping and subsidization.
7.65 The United States asserts that actions by sureties and other private parties, including sureties'
fees and collateral requirements associated with th ese imports, do not constitute evidence that the
directive itself is an action "against" dumping or su bsidization. The United States submits that US
Customs does not set surety fees, nor does it require importers to post collateral in support of bonds.
The United States asserts that US Customs is a third party beneficiary to bond contracts, which are
private contracts negotiated between the surety and the importer.
7.66 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." 108 According to the United States, the
GATT 1994 and the Anti-Dumping Agreement do not prohibit the United States from collecting the
anti-dumping duties in question, and the bond requirement facilitates its ability to do so.
(c) Evaluation by the Panel
7.67 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 GATT 1994", as interpreted by the Anti-Dumping
Agreement or the SCM Agreement. If it is determined that this is not the case, the
measure would be inconsistent with Article 18.1 of the Anti-Dumping Agreement or
Article 32.1 of the SCM Agreement."109

106 Thailand's first written submission, para. 186.
107 Thailand's first written submission, para. 186.
108 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 258. The fact that the Appellate
Body was analysing a measure affecting private parties' ability to file petitions does not provide a basis to
distinguish the instant facts from those before the Appellate Body in US – Offset Act (Byrd Amendment) .
Contrary to Thailand's assertion, the "WTO-consistent" ri ght in question was not the right of a private party to
file a petition, as actions by private parties are not themselves subject to a finding of WTO-consistency. Rather,
as here, the Appellate Body was evaluating a measure that facilitated the exercise of "WTO-consistent rights" by
the government (in that case, acceptin g applications, conducting investig ations, and imposing orders; here,
collecting duties owed). US – Offset Act (Byrd Amendment), para. 258.
109 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 236.

7.68 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".
(i) Whether or not the application of the EBR is "specific" to dumping
7.69 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 'dumping'. '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."
110
7.70 In US – Offset Act (Byrd Amendment), the Appellate Body explained further that:
"[T]he criterion we set out in US – 1916 Act for specific action in response to
dumping is not whether the constituent elem ents of dumping or of a subsidy are
explicitly referred to in the measure at i ssue, nor whether dumping or subsidization
triggers the application of the action, nor whether the 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 s ubsidy. In other words, we focused on
the degree of correlation between the scope of application of the measure and the
constituent elements of dumping or of a subs idy. 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 el ements of 'dumping', we did not require
that the language of the measure include th e constituent elements of dumping or of a
subsidy. This is clear from our use of the word "also", which 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 el ements 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."
111
7.71 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.
7.72 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.112 If there were no finding that the constituent elements of dumping were

110 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".
111 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 244 (footnotes omitted).
112 The United States has not disputed the factual accu racy of Thailand's argument (see Thailand's first
written submission, para. 163) that the 9 July 2004 Amendment limits the application of the EBR to
merchandise upon which USDOC has issued an anti-dumping order, setting out that "[a]ny increase in bond

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.
7.73 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",
113 in the sense that the EBR does not
"apply to all entries subject to antidumping or c ountervailing duties – but only to those for which a
specific non-collection risk has been identified". 114 We recall, though, that the Appellate Body has
already determined115 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. 116 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.
(ii) Whether or not the application of the EBR acts "against" dumping
7.74 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 "a gainst" dumping or a subsidy, [] it is
necessary to assess whether the design and st ructure of a measure is such that the
measure is "opposed to", has an adverse bearing on, or, more specifically, has the
effect of dissuading the practice of dumpi ng or the practice of subsidization, or
creates an incentive to terminate such practices."
117
7.75 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

liability will become effective when the Department of Commerce (DOC) issues its Order on the case", and that
the 10 August 2005 Clarification char acterises the 9 July 2004 Amendment as containing "specific guidelines
for bonds covering certain merchandise subject to antidumping/countervailing duty cases".
113 United States' first written submission, para. 35.
114 United States' first written submission, para. 39.
115 In US – Offset Act (Byrd Amendment) , 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 qualifying expenditures. Appellate Body Report, US – Offset Act (Byrd
Amendment), para. 243.
116 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 that does not provide for 'specific
action against dumping'". (see Appellate Body Report, US – 1916 Act, para. 132).
117 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 254.

subsidized products or to terminate such practices".
118 In our view, a similar incentive arises as a
result of the application of the EBR on imports of s ubject shrimp. Ordinarily, the application of the
EBR results in additional costs 119 that, although initially borne by importers, ultimately impact on
foreign producers/exporters of the subject merchandise, just as anti-dumping duties do. 120 As a result
of the formulas used to calculate the amount of th e EBR, the amount of the EBR, like the amount of
anti-dumping duty, is directly linked to a given foreign producer's/exporter's margin of dumping. 121
The higher the margin of dumping, the higher the amount of the EBR, and the higher the cost of the
EBR.
122 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 amount of anti-dumping duties levied on their goods). 123
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.

118 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 256.
119 The financial costs of obtaining enhanced bonds include the fees and collateral requirements
imposed by surety companies for providing such bonds. (See paragraph 2.18 above discussing fee and collateral
requirements to secure enhanced bonds). Although th e 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.
120 Although the parties have made arguments regarding the actual impact of the EBR on the volume
and market share of imports from Thailand, 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).
121 Thailand also argues that the EBR acts "against" dumping by inflating the margin of dumping for a
given shipment. Thailand asserts that the export price on which the determination of dumping is based is a net
price from which all shipping costs, including duties, charges, and other costs of importation, including the cost
of the EBR, are deducted. Thailand argues that when the cost of the EBR is deducted from the invoiced export
price to arrive at the net export price used to determine dumping margins, the result is a lower export price and,
therefore, higher dumping margins. The United States submits that Thailand's argument is founded on an
incorrect citation to a provision in US law, and a fundamentally incorrect understanding how the USDOC
interprets and applies the relevant legal provisions. We recall that we are presently examining Thailand's claim
against the EBR as applied against imports of shrimp . Since Thailand has provid ed no evidence that, in
applying the EBR against imports of shrimp, the United St ates treated the costs of ob taining enhanced bonds as
shipping costs to he deducted from the export price, there is no basis for us to conclude that any such application
of the EBR acted "against" dumping.
122 In this regard, the adverse bearin g of the application 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.
123 In response to Question 6 from the Panel after the first substantive meeting, the United States
asserted that "[i]f the cash deposit rate in the most recen tly completed 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."

7.76 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 Continued Dumping and Su bsidy Offset Act (hereafter the "CDSOA") is a
measure against dumping because the CDSOA provi des a financial incentive for domestic producers
to file or support applications for the in itiation of anti-dumping and countervailing duty
investigations, 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 dumping or a subsidy simply because it f acilitates or induces the exercise of rights that are
WTO-consistent."124 Upon careful refection, 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. Instead, the Appellate Body's reas oning means that we would be precluded from
concluding that the application of the E BR 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 basis of other considerations, notwithstanding the fact that the application of that measure
might also facilitate the collection of WTO-consistent anti-dumping duties.
7.77 Our finding that the application of the EBR constitutes "specific action against dumping" is
supported by the US view that provisional measures taken in the form of bonds constitute "specific
action against dumping". 125 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 EBR provides for security after the ex istence of dumping has been established, pending
determination of the facts with respect to paymen t of duties. The United States submits that the
application of the EBR "facilitates the exercise of WTO-consistent rights"
126 – i.e., the collection of
duties owed following the imposition of an order. Th e United States asserts that, by contrast, certain
bonds required before an antidumping duty or der 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 United
States' argument, however, since we have already conc luded that the fact that the application of the
EBR may facilitate the exercise of WTO-consistent ri ghts is not determinative of whether or not the
application of the EBR constitutes "specific action ag ainst dumping" (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).
(iii) Conclusion
7.78 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.
7.79 Accordingly, we must now consider the remain ing elements of Article 18.1, regarding the
question of whether or not the EBR was applied "in accordance with the provisions of GATT 1994",
as interpreted by the Anti-Dumping Agreement.

124 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 258.
125 See United States' Responses to Second Set of Panel Questions, para. 5, in which the United States
asserts that "a bond requirement prior to imposition of an order may be considered an action 'against' dumping".
126 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 258.

4. Was the EBR applied "in accordance with" the provisions of the GATT 1994, as
interpreted by the Anti-Dumping Agreement
7.80 The United States submits that the EBR was a pplied "in accordance with the provisions of
GATT 1994", as interpreted by the Anti-Dumping Agreement, because the application of the EBR is
authorised by the Ad Note. Thailand rejects the US reliance on the Ad Note.
(a) Main arguments of Thailand
7.81 Thailand submits that the Ad Note cannot be read independently of the provisions of the Anti-
Dumping Agreement to create a fourth permissible response to dumping not provided for in the Anti-
Dumping Agreement. Thailand further asserts that, in any ev ent, the text of the Ad Note expressly
limits its application to provisional measures taken wh ile dumping is "suspected", that is, prior to a
final determination of dumping.
7.82 Thailand asserts that Article VI of the GATT 1994, which includes as an "integral part" the
Ad Note, cannot be read independently of the Anti-Dumping Agreement. Thailand notes that Article 1
of the Anti-Dumping Agreement provides that the provisions of the Anti-Dumping Agreement "govern
the application of Article VI of GATT 1994 in so far as action is take n under anti-dumping legislation
or regulations." Thailand argues that the Appellate Body found in US – 1916 Act that "Article 1 states
that 'an anti-dumping measure' must be consistent with Article VI of the GATT 1994 and the
provisions of the Anti-Dumping Agreement ."
127 Thailand also states that, similarly, in Brazil –
Desiccated Coconut, the Appellate Body emphasised 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 fragm entation that had characterized the previous
system".128 According to Thailand, the Appellate Body identified a clear distinction between the
previous GATT system, in which Article VI could be invoked separately from the Tokyo Round SCM
Code, and the WTO system, in which Article VI cannot be so invoked. 129 Thailand asserts that this
distinction applies equally to the Anti-Dumping Agreement.
7.83 Thailand submits that, when read in conjunction with the Anti-Dumping Agreement ,
Article VI and the Ad Note permit only three r esponses to dumping. According to Thailand, the
Appellate Body has consistently found 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-dumping duties, provisional measures and price undertakings ".130 Thailand asserts that
these responses are governed by Articles 7, 8, and 9 of the Anti-Dumping Agreement . Thailand
further asserts that the United States has also argued this position in recent panel proceedings.131
7.84 Thailand understands the United States to argue that the Ad Note permits the imposition of
cash deposit and bond amounts in excess of the amount of the margin of dumping currently in effect
during the period following the imposition of definiti ve anti-dumping duties. For Thailand, therefore,
the United States argues that Article 9 of the Anti-Dumping Agreement, governing the imposition and
collection of anti-dumping duties, does not limit the amounts of cash deposits and bonds that may be
imposed. Thailand asserts that, in these circumstances, there is a conflict between the provisions of
Article 9 of the Anti-Dumping Agreement , which expressly limits the measures that may be taken

127 Appellate Body Report, US – 1916 Act, para. 119.
128 Appellate Body Report, Brazil – Desiccated Coconut, p. 18.
129 Appellate Body Report, Brazil – Desiccated Coconut, p. 18.
130 Appellate Body Report, US – 1916 Act , para. 137; Appellate Body Report, US – Offset Act (Byrd
Amendment), para. 265.
131 Thailand refers in this regard to United States' first written submission to the Panel, Mexico –
Anti-Dumping Measures on Rice, (WT/DS294) 22 March 2004, para. 274.

following the imposition of definitive anti-dumping duties, and the United States' reading of the
Ad Note. Thailand notes that, in cases of conf lict between a provision of a multilateral trade
agreement, such as the Anti-Dumping Agreement, and the GATT 1994, the General Interpretative Note
to Annex 1A of the Marrakesh Agreement Establishing the WTO provides that the provisions of the
multilateral trade agreement shall prevail. 132 Thailand submits that for this reason also, the Ad Note
cannot be read to confer rights to take action against dumping following the imposition of definitive
dumping duties that are not found in Article 9 of the Anti-Dumping Agreement.
7.85 Thailand also asserts that the Ad Note limits the 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.
(b) Main arguments of the United States
7.86 The United States submits that Thailand offers an interpretation 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 .133
The United States argues that past panels and the Ap pellate 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 Antidumping Agreement of meaning." 134 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 perm its Members to require "reasonable security (cash
deposit or bond)" for the payment of antidumping 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 investigation, including the collection of cash
deposits, and, moreover, no provision prohibits a Member from requiring this security.
7.87 The United States submits that, instead of "reading Article VI in conjunction with the
Antidumping Agreement," as the Appellate Body in US – 1916 Act suggested,135 Thailand, 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, Thailand's various theories would mean that security pending
final assessment of anti-dumping and countervailing duties is nowhere permitted by the Anti-Dumping
Agreement, SCM Agreement , or the GATT 1994. The United States asserts that, if Thailand's
arguments were accepted, Members would not be permitted to maintain security requirements
pending final determination of liability. The Unite d States argues that to preclude a Member with a
retrospective system from requiring the posting of secur ity prior to the determin ation of final 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.

132 The General Interpretative Note states that: "In the event of a conflict between a provision of the
General Agreement on Tariffs and Trade and a provision of another agreement in Annex 1A to the Agreement
Establishing the World Trade Organization (referre d to in the agreements in Annex 1A as the " WTO
Agreement"), the provision of the other agreement shall prevail to the extent of the conflict."
133 Article II:2 of the WTO Agreement..
134 Panel Report, US – 1916 Act (EC), para. 6.97.
135 Cf. Thailand's Responses to First Set of Panel Questions, paras. 34-37.

(c) Evaluation by the Panel
7.88 At this juncture, we are examining the issu e of whether or not the EBR was applied "in
accordance with the provisions of 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.
136 This is also consistent with the view expressed by the Appellate Body in US –
1916 Act. 137 The Ad Note provides that:
"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."
7.89 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.
(i) The relationship between the Ad Note and the Anti-Dumping Agreement
7.90 Thailand's basic argument is that Article VI of the GATT 1994, including the Ad Note, may
not be applied "independently" of the Anti-Dumping Agreement, in the sense that it may not provide
an independent basis for taking specific action against dumping outside of the provisions of the Anti-
Dumping Agreement . In this regard, Thailand asserts 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".
138 In other words, Thailand
argues that if Article VI of the GATT 1994 were found to provide an independent basis for taking
specific action against dumping, such finding would result in fragmented anti-dumping regimes.
7.91 In considering Thailand's argument, we note th at the Appellate Body findings relied on by
Thailand 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

136 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. Thailand's second written submission, para. 3, and United States' second written submission, para. 14).
137 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, US – 1916 Act , para. 124. See also Panel Report, US –
1916 Act (Japan), paras. 6.214-218 and 6.264; and Panel Report, US – 1916 Act (EC), paras. 6.197-6.199.
138 Appellate Body Report, Brazil – Desiccated Coconut, p. 18.

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
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."139
7.92 It is important to note that, 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 .140 We emphasise this point because, in our view, Thailand's position
regarding the relationship between the Ad Note and the Anti-Dumping Agreement suggests that the
latter supersedes the former.
7.93 Thailand correctly notes that the panel and Appellate Body in Brazil – Desiccated Coconut
found that Article VI could not be applied "w ithout reference" to, or independently of, the SCM
Agreement. This finding cannot mean, though, that the Ad Note may not authorise action that is not
envisaged by the SCM Agreement or Anti-Dumping Agreement.141
7.94 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 inte rpretative 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
authorises 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 pa nel and Appellate Body, to prohibit such

139 Appellate Body Report, Brazil – Desiccated Coconut, p. 14 (emphasis added, footnote omitted).
140 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.
141 Such result would conflict with the Appellate Body's conclusion that the SCM Agreement does not
supersede Article VI of the GATT 1994.

conduct.
142 Any other approach would deprive the Ad Note of meaning and le gal effect, and would
effectively mean that it has been superseded by the Anti-Dumping Agreement. 143
7.95 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 . Contrary to Thailand's argument, we do not consider that our approach
reintroduces "the fragmentation that had characterized the previous system". 144 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 "ind ependently" of, or "without reference" to, the Anti-
Dumping Agreement.
7.96 Thailand has not identified any provision of the Anti-Dumping Agreement that would prohibit
the security requirements resulting from the application of the EBR.
145 Nor are we able to identify
any. As a matter of law, therefore, such security requirements would be authorized by the Ad Note,
provided they are in conformity with the substantive provisions thereof. This is the issue we will turn
to shortly.

142 In this regard, we note that Thailand argued in its reply to Question 16 of the First Set of Panel
Questions (at para. 38) that "the provisions of Article VI cannot be read to expand on or undermine the specific
rules contained in the Anti-Dumping and SCM Agreement s". This statement is not inconsistent with our
interpretation of the relationship between Article VI and the Anti-Dumping Agreement: provided there are no
"specific rules" contained in the Anti-Dumping Agreement regarding security for definitive anti-dumping duties,
there is no risk that security acti on authorized by Article VI would "expand on or undermine" those specific
rules. We also note Thailand's reliance on Article 1 of the Anti-Dumping Agreement, which 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 addresses 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.
143 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 GATT 1994, which proscribes the imposition of both an anti-dumping
and a countervailing duty to compensate for the same situation of dumping and export subsidization, nor does it
address the issue of countervailing action on behalf of a third country as provided fo r in Article VI:6(b) and (c)
of GATT 1994. If the [Anti-Dumping] Agreement were considered to supersede Article VI of GATT 1994
altogether with respect to countervailing measures, thes e provisions would lose all force and effect. Such a
result could not have been intended."
144 Appellate Body Report, Brazil – Desiccated Coconut, p. 18.
145 Thailand has not advanced any primary claim that the imposition of reasonable security
requirements is inconsistent with any provisions of the Anti-Dumping Agreement other than Article 18.1. Since
we are examining the applicability of the Ad Note precise ly in order to resolve Thailand's Article 18.1 claim,
that provision provides no basis – at this stage – for conc luding that the application of the EBR is prohibited by
the Anti-Dumping Agreement. Thailand has argued, by way of "subsidiary and alternative" claims, that the EBR
is inconsistent with the provisions of Articles 7.1, 7.2, 7.4, and 7.5, and Articles 9.1, 9.2 and 9.3 of the Anti-
Dumping Agreement (see note 266 to Thailand's first written submission). Article 7 contains disciplines
regarding the imposition of provisional measures. Since we are presently assessing the application of EBR after
the imposition of the anti-dumping order, i.e., as a definitive anti-dumping measure, Article 7 is not applicable.
Furthermore, Article 9 is concerned with the imposition and collection of anti-dumping duties (see paragraph
7.113). Since the EBR is not an anti-dumping duty, the EBR is not governed – let alone prohibited - by that
provision.

7.97 Before concluding on the relations hip between the Ad Note and the Anti-Dumping
Agreement, though, we must consider Thailand's asser tion that the Appellate Body has found 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'".
146 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 security imposed pursuant to the Ad Note in those cases. By
contrast, we have conducted a careful examination 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 doing 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.
7.98 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.
(ii) The temporal scope of the Ad Note
7.99 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 imposition of
the anti-dumping order (as alleged by Thailand).
Ordinary meaning of the text of the Ad Note
7.100 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. Thailand agues that the app lication of the Ad Note is expressly limited to
provisional measures taken while dumping is "suspected ", that is, prior to a final determination of
dumping. Thailand asserts that the existence of du mping is confirmed once a final determination of
dumping is made by the USDOC, such that there can no longer be "any case of suspected dumping"
as of the imposition of the anti-dumping order.
7.101 The Ad Note refers to "suspected dumping." We interpret "dumping" in light of Article 2.1 of
the Anti-Dumping Agreement . Regarding the term "suspected", the United States asserts that this
refers to dumping that is "imagined to be possible or likely." 147 Thailand asserts that the ordinary
meaning of "suspected" is "that one suspects to exist or to be such". 148 Despite the apparent
differences between the definitions advanced by the pa rties, in fact the parties have merely proposed
different elements of one of the definitions set forth in The New Shorter Oxford English Dictionary
(which defines the word "suspected" in relevant pa rt as "that one suspects to exist or to be such;
imagined to be possible or likely"). There is, th erefore, no disagreement between the parties in this

146 Appellate Body Report, US – 1916 Act , para. 137; Appellate Body Report, US – Offset Act (Byrd
Amendment), para. 265.
147 The New Shorter Oxford English Dictionary (Clarendon Press, 4th Ed. 1993), p. 3162.
148 The New Shorter Oxford English Dictionary (Clarendon Press, 4th Ed. 1993), p. 3162.

regard. We understand the term "suspected" to refer to dumping that is suspected to exist, in the sense
that its existence may be imagined to be likely.
149
7.102 In order to determine whether or not there remains "a case of suspected dumping" after
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 im port entries during a given period of investigation,
whether margins of dumping exist, and whether dump ed imports cause 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 order. In its anti-dumping duty order, the United States sets forth ad
valorem cash deposit rates for producers/exporters indivi dually investigated, as well as an "all-others"
rate applicable to all other subject producers/e xporters. 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 dumpi ng found for the exporter or producer during the
investigation phase. Thereafter, the US retros pective duty assessment system provides that, every
twelve months, during the anniversary month of the antidumping duty order, importers, exporters,
producers, and domestic interested parties have the opportunity to request that USDOC conduct an
assessment review of the import en tries that occurred in the prior year (but following imposition of
the anti-dumping order). During any such review, th e 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
antidumping 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.
7.103 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.
7.104 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 that 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.
150
7.105 Thailand asserts that there is no longer an y suspicion of dumping once there is a
determination of dumping giving rise to the imposition of an anti-dumping order. That determination,
however, relates to imports during the period of inv estigation underlying the initial investigation. It

149 As noted below at note 184, we do not consider that the mere possibility of dumping would be
sufficient to justify reasonable security under the Ad Note.
150 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.

does not relate to imports entering the United States after the anti-dumping order is imposed. 151
Accordingly, the initial determination does not remo ve the suspicion of dumping in respect of those
later imports. In fact, as noted above, that initial de termination is actually the basis for the suspicion
of dumping in respect of those later imports.
7.106 We note Thailand's argument that the above analys is fails to take into account that in many
cases no assessment review is conducted. 152 In those cases, Thailand asserts that, by automatic
operation of law, the entries are liquidated at th e margin of dumping in effect at the time of
importation, i.e. , the amount of the cash deposit of estimated duties. The United States asserts that
Thailand's emphasis on "automatic assessment" in its response is misleading. The United States
argues that in no case is assessment – whether at th e 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. The 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).
7.107 Irrespective of whether or not the final assessme nt in cases where no interested party requests
a review may be deemed to be "automatic", th ere remains no means of knowing whether or not an
assessment review will be conducted at the time that the import entry is made. This will only be
known once either the assessment review is requested , or the deadline for requesting such review has
passed without any such request having been made . Thus, even though imports may ultimately be
liquidated at the cash deposit rate in the anti-dum ping 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 asse ssed). At the time of entry, therefore, such
imports may only be suspected of being dumped.
Contextual considerations regarding Articles 5.1 and 9.3.1 of the Anti-Dumping Agreement
7.108 Turning to broader contextual considerati ons regarding Articles 5.1 and 9.3.1 of the Anti-
Dumping Agreement , Thailand asserts that there is a fundamental difference between the
determination in an original investigation of whether dumping exists – and thus is not merely
"suspected" – and the determination in a retrospective assessment review of the amount of duties to be
collected on particular entries. According to Thaila nd, this difference is reflected in the text of the

151 In support of its argument, Thailand refers to a number of provisions of US law. Thus, Thailand
asserts that the US anti-dumping law uses the word "sus pect" to refer to the period between a preliminary and
final determination of dumping. According to Thailand, section 733(b) of the Tariff Act of 1930 provides for a
preliminary determination of "whether ther e is a reasonable basis to believe or suspect that the merchandise is
being sold, or is likely to be sold, at less than fair value." Thailand asserts that, in contrast, section 735(a)(1) of
the Tariff Act provides for a "final determination of whether the subject merchandise is being, or is likely to be,
sold in the United States at less than fair value." Thailand argues that the US DOC's regulations similarly
characterise the final determination of dumping investigation as one that "constitutes a final decision by the
Secretary [of Commerce] as to whether dumping or countervailable subsidization is occurring ." Thailand
submits that under US law, therefore, dumping is only "suspected" during the period between the preliminary
and final determinations of dumping. This dispute is governed by the covered agreements, not US law.
Accordingly, our findings are based on the text of Article VI of the GATT 1994 (including the Ad Note), and the
Anti-Dumping Agreement This is consistent with the finding by the Appellate Body in US – Softwood Lumber
IV that "[t]he manner in which the municipal law of a WTO Member classifies an item cannot, in itself, be
determinative of the interpretation of provisions of the WTO covered agreements." (Appellate Body Report, US
– Softwood Lumber IV , paras. 56, 65; see also Appellate Body Report, US – Corrosion-Resistant Steel Sunset
Review, para. 87 and note 87.) Since our findings are not based on the provisions of US law, we shall disregard
Thailand's arguments in respect thereof.
152 See e.g. Thailand's Responses to Second Set of Panel Questions, paras. 34-39.

Anti-Dumping Agreement, with Article 5.1 referring to an inves tigation to determine the "existence ...
of dumping", and Article 9.3.1 referring only to the "determination of the final liability for payment of
anti-dumping duties." Thailand argues that the referen ce in Article 9.3.1 to the determination of final
liability for payment of anti-dumping duties necessarily implies that there has previously been a
determination that dumping (and injury) exist an d that the imposition of anti-dumping duties is
merited. Thailand argues that if dumping is merely "suspected" after the conclusion of the original
investigation and until the final liability for duties on particular imports is determined, all US anti-
dumping orders are inconsistent with the basic requirement of Article VI of the GATT 1994 and the
Anti-Dumping Agreement that anti-dumping measures may only be imposed when imports are found
to be dumped and to be causing, or threatening to cause, material injury to the domestic industry.
7.109 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."
153 We understand this to mean that, accord ing 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.
154 Indeed, Members applying a retrospective system of anti-
dumping duty assessment (which is specifically contempl ated in Article 9.3.1) choose not to do so.
Accordingly, we see no basis to conclude that the United States, which applies a retrospective system,
already determines the existence of dumping in resp ect of future import entries at the time that it
imposes an anti-dumping order. The fact that Article 5.1 requires the United 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 existenc e of dumping in respect of future import entries covered by that
order.
7.110 Regarding Article 9.3.1, we note that this provisi on refers to "the determination of the final
liability for payment of anti-dumping duties". In a retrospective system, this determination
necessarily takes place after the relevant import entries have been made. In our view, part of the
process of determining "final liability for payment of anti-dumping duties" is to determine whether or
not those entries were dumped.
155 If they were not dumped, there is no "final liability for payment of
anti-dumping duties". Conversely, if they were dumped, there is "final liability for payment of anti-
dumping duties" (commensurate with the amount of dumping found to exist). Accordingly, we do not
accept Thailand's argument that the reference in Articl e 9.3.1 to the determination of final liability for

153 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 165. Although an
investigating authority generally assesses the current situation on the basis of historical data pertaining to a past
period of investigation, the panel found that such historical data "is being used to draw conclusions about the
current situation" (Panel Report, Mexico – Anti-Dumping Measures on Rice, para. 7.58).
154 Besides, the refund mechanism provided for in Article 9.3.2 of the Anti-Dumping Agreement is
designed to ensure that Members applying a prospective duty assessment system do not collect anti-dumping
duties in excess of the actual amount of dumping.
155 Thailand asserts that, in an assessment review, the United States does not assess whether the export
price for particular imports was below normal value to determin e the amount of liability under Article 9.3.1.
Instead, Thailand asserts that the United States makes overall determinations of assessment rates for
importers/exporters based on all imports during the period covered by an administrative review, and establishes
a single assessment rate for each importer/exporter. We need not examine the factual accuracy of this
argument, since in any event it would not change the fact that the existence of dumping – whether for import
entries individually, or for import entries overall – is established after those import entries are made. Until such
time, the United States may reasonably (on the basis of the anti-dumping order) view those import entries as a
"case of suspected dumping".

payment of anti-dumping duties necessarily implies th at there has previously been a determination
that dumping exists in respect of subsequent impor ts, and that the levying of anti-dumping duties is
merited. Rather, it simply means that there is a case of suspected dumping, and that the levying of
anti-dumping duties may be merited.
Contextual considerations regarding the WTO-conformity of cash deposits

7.111 A further contextual consideration arises fro m the United States' assertion that Thailand's
arguments would mean that no security is permissible pending final assessment, including cash
deposits. Thailand rejects this argument, asserting instead that the cash deposits required by the
United States following the imposition of an anti-dumping order are definitive anti-dumping duties
permissible under Article 9 of the Anti-Dumping Agreement .
156 Thailand asserts that this is
consistent with the view of the Appellate Body in US – Zeroing (Japan), where it held that "[a]t the
time of importation, an administering authority may collect duties, in the form of a cash deposit, on all
export sales …".
157 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." 158 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 measures may take the form of a provisional duty or,
preferably, a security – by cash deposit or bond ... ."
159
7.112 We consider that the US argument raises an ex tremely important consideration, for the ability
to require security is an essential element of a retr ospective 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 the 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.
7.113 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 , Thailand argues that cash deposits are anti-dumping
duties that may be imposed pursuant to Article 9 of the Anti-Dumping Agreement . We are not
persuaded by this argument, though, for the defin ition of the term "duty" is not broad enough to
encompass cash deposits. In this regard, Thailand has relied on Black's Law Dictionary to define
"duty" as "4. A tax imposed on a commodity or transaction, esp. on imports" (Black's Law Dictionary,
7th ed., B.A. Garner (ed.) (West Group, 1999), p. 523)(" Black's").160 Thailand has further asserted
that the definition of the term "tax" is "A mone tary charge imposed by the government on persons,
entities, or property to yield public revenue" (Ibid., p.1469), and that the relevant definition of
"charge" is "7. price, cost or expense" (Ibid., p.227). 161 Thailand also distinguished duties from bonds
in the following terms:
"A 'duty' involves a monetary expense to yield public revenue. A duty has an
intrinsic value in itself and can yield public revenue without further transformation. In

156 See Thailand's Responses to First Set of Panel Questions, paras. 29-30.
157 Appellate Body Report, US – Zeroing (Japan), para. 156.
158 United States' Responses to First Set of Panel Questions, para. 25.
159 United States' second written submission, para. 16.
160 See Thailand's first written submission, note 270.
161 Thailand's first written submission, note 218.

contrast, a 'bond' is a 'security' instrume nt reflecting a written promise to pay money
if certain circumstances occur. Its value is not intrinsic to itself , but rather depends
on the transformation of that bond into something of value through, for example,
payment of the duties by the surety. Thus:
Securities differ from most other commodities in which people deal.
They have no intrinsic value in themselves – they represent rights in
something else. The value of a bond, note or other promise to pay
depends on the financial condition of the promisor."
162
7.114 Thailand therefore distinguishes duties from bonds on the basis of whether or not those
instruments have intrinsic value in and of themse lves. In our view, the notion of intrinsic value
provides an equally valid basis for distinguishing du ties from cash deposits. Just as security in the
form of a bond is without intrinsic value, so too is security in the form of a cash deposit. Although
cash may have intrinsic value, a cash deposit, on the other hand, is not liquidated revenue and is not a
payment to yield public revenue at the time it is pr ovided, but rather, is provided as a form of security
like a bond. Based on the distinctions drawn above , 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 liquidated once the deadline for requ esting an assessment review has expired (without
any assessment review having been requested). 163 Until that point, a cash deposit has no intrinsic
value in and of itself.
7.115 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
Thailand refers to as a "duty", is fixed prospectively.
7.116 In addition, we observe that Article 9.3 pr ovides that the amount of the anti-dumping duty
"shall not exceed the margin of dumping as establis hed under Article 2". The Appellate Body has
confirmed that the margin of dumping established in an assessment review is a margin of dumping "as
established under Article 2". 164 This is also consistent with note 22 to the Anti-Dumping Agreement,

162 Thailand's first written submission, para. 204. (emphasis added)
163 Thailand asserts that the United States' anti-dumping regulations expressly recognize that cash
deposits are estimated duties that differ from a security in that "upon the issuance of an order [i.e. following a
final determination of dumping], importers no longer may post bonds as security for antidumping or
countervailing duties, but instead must make a cash deposit of estimated duties " (19 CFR § 351.211(a)).
Thailand also notes that the US Tariff Act provides that following final determinations of dumping and injury,
the USDOC must publish an anti-dumping order that "requires the deposit of estimated anti-dumping duties
pending liquidation of entries of merchandise at the same time as estimated normal customs duties on that
merchandise are deposited" (Section 736(a)(3) of the Tariff Act, 19 USC § 1673e(a)(3)). According to
Thailand, cash deposits of estimated anti-dumping duties are themselves duties. We have already indicated that
we shall resolve this dispute on the basis of the provisions of the covered agreements, rather than the provisions
of US law. That being said, by definition a security for estimated duties is not a duty per se. A security for
estimated duties is merely a security for duties that may possibly be collectible in the future. There is no duty in
the absence of any such future collection.
164 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".

which applies "when the amount of the anti-dumping duty is assessed on a retrospective basis", and
which envisages definitive duties being levied pursu ant to "assessment proceeding[s]". Since note 22
accepts that amounts of anti-dumping duties, which (according to Article 9.3) must not exceed the
margin of dumping established under Article 2, may be assessed pursuant to assessment proceedings,
necessarily note 22 also accepts that the margin s of dumping established in assessment proceedings
are margins of dumping "established under Article 2". Accordingly, and consis tent 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 dut y, and the cash deposit were in excess of the
margin of dumping established subsequently in th e assessment review, the imposition of that cash
deposit would violate Article 9.3. This cannot be a correct interpretation, though, for under this
interpretation it would be impossible for a Member requiring cash deposits to know, at the time of
application, whether or not it was acting in conformity with Article 9.3.
7.117 We recall Thailand's reliance on 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…".
165 However, in that case the Appe llate Body was not addressing, and
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 ."166 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.
7.118 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 Thailand167) 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.
7.119 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". Thailand's argument that cash deposits are duties is therefore at odds with the
plain language of Article 7.2.
7.120 Thailand submits that a failure to treat the a pplication of cash deposits as the levying of anti-
dumping duties would restrict the right of Member s to bring dispute settlement proceedings under
Article 17.4 of the Anti-Dumping Agreement, which provides that a Member may refer a matter to the
Dispute Settlement Body only "if final action has been taken by the administering authorities of the
importing Member to levy definitive anti-dumpi ng duties or to accept price undertakings ..."
168

165 Appellate Body Report, US – Zeroing (Japan), para. 156.
166 Appellate Body Report, US – Zeroing (EC), para. 109.
167 See e.g. Thailand's second written submission, para. 39.
168 Article 17.4 also provides that "a provisional m easure" can be referred to the DSB when considered
to be taken contrary to Article 7.1.

Thailand suggests that if definitive anti-dumping duti es are only levied pursuan t to a final assessment
of duties in an administrative review, a US an ti-dumping order could not be challenged in WTO
dispute settlement proceedings until after that fina l assessment has taken place (rather than when cash
deposits are applied pursuant to the anti-dumping order).
7.121 We do not share Thailand's concerns, though, sin ce Article 17.4 refers to "final action ... by
the administering authorities ... to levy definitive anti-dumping duties". Thus, Article 17.4 does not
state that definitive anti-dumping duties must have been levied. Rather, Article 17.4 merely requires
that final action to levy definitive anti-dumping duties must have been taken. In this context, the word
"to" should in our view be inte rpreted adverbially, to express purpose.
169 Accordingly, the imposition
of an anti-dumping order by the United States constitutes "final action ... to levy of definitive anti-
dumping duties" (emphasis added), in the sense that the order puts in place a mechanism providing for
the levying of definitive anti-dumping duties (even t hough the amount of those duties – if any – is not
calculated until some time in the future). If th e drafters of Article 17.4 had meant that Members
should wait until definitive anti-dumping duties we re actually levied be fore initiating dispute
settlement proceedings, the relevant phrase in Ar ticle 17.4 would have read "if definitive anti-
dumping duties have been levied, or price undertakings accepted".
7.122 Accordingly, we are not persuaded by Thailand's argument that cash deposits may be imposed
pursuant to Article 9 of the Anti-Dumping Agreement (as anti-dumping duties). 170 Nor has Thailand
advanced any other basis for Members to require secu rity in the form of cash deposits. We recall,
though, that we consider that the ability of Memb ers to require security such as cash deposits pending
final assessment is an essential requirement for the operation of a retrospective assessment system.
Such contextual considerations support our interpre tation of the ordinary meaning of the Ad Note as
permitting such security.
Negotiating history
7.123 Thailand also submits that the negotiating histor y of the Ad Note and Article VI makes clear
that the reference in the Ad Note to "suspected dumping" referred to the period "before anti-dumping
duties are actually brought into operation." 171 Thailand refers in this re gard to the 1959 Report of the
Group of Experts on Anti-dumping and Countervailing Duties, wherein "[t]he 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 cash deposits as mentioned in Interpretative Note 1 to
paragraphs 2 and 3 of Article VI."
172 According to Thailand, the Ad Note was, in effect, superseded
by the adoption of Article 10 of the 1967 Agreemen t on Implementation of Article VI, the forerunner
of Article 7 of the current Anti-Dumping Agreement , which provided a more comprehensive
regulation of the use of provisional measures.

169 The New Shorter Oxford English Dictionary , L. Brown (ed.) (Clarendon Press, 1993), Vol II,
provides that, when used with an infinitive in adverbial relation, the word "to" "indicat[es] a specified purpose,
use, function, or intention".
170 Thailand also asserts that, when it established th e current retrospective system, the United States
Congress expressly described the function of cash deposits of estimated duties not as to secure potential
increases in liability, but rather as to reduce the damage which delayed assessment may cause a domestic
industry. According to Thailand, therefore, the Congress considered these payments of estimated duties to fill
the same function as anti-dumping measures of remedying injury to a domestic industry. Thailand asserts that
cash deposits should, therefore, be governed by Article 9. Consistent with our mandate, our findings are based
on a thorough consideration of the relevant covered agreements. We decline to depart from those findings on
the basis of statements allegedly made by the United States Congress.
171 See UN Conference on Trade and Employment, Third Committee: Commercial Policy, Report of
the Working Party to Sub-Committee C, 22 January 1948, E/CONF.2/C.3/C/18, paras. 3(vii); 9 and 10.
172 Thailand refers in this regard to the 1959 Report of the Group of Experts on Anti-dumping and

7.124 The United States rejects Thailand's reliance on negotiating history, arguing that neither
Article 7 nor the concept of "provisional measures" existed at the time the Ad Note was negotiated.
The United States asserts that the Group of Experts relied on by Thailand stated explicitly that
"Article VI made no mention of them [provisional measures]".
7.125 Thailand's argument regarding negotiating history refers to a single paragraph in the 1959
Report of the Group of Experts on Anti-Dumping and Countervailing Duties entitled "Provisional
anti-dumping measures". That paragraph provides:
"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."
7.126 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 the GATT 1947 in 1948,
173 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 is therefore fundamentally at odds with Th ailand's argument that the Ad Note is expressly
limited to provisional measures taken prior to a final determination of dumping.
7.127 Regarding Thailand's argument that the 1948 Report of the Working Party that actually
adopted the Ad Note understood the term "suspect ed dumping" to refer to the period "before anti-
dumping duties are actually brought into operation", we note that the language cited by Thailand
actually arises in paragraph 10 of that Report, which concerns a proposal (item (viii)) from the
Netherlands regarding the inclusion of a consultation mechanism. The language is not used in respect
of Brazil's proposal (item (vii)) regarding the inclus ion of the Ad Note. In particular, the Report
reads:
"10. Item (viii)
In connection with the new paragraph proposed by him in the paper submitted to the
Sub-Committee on 9 January the representative of the Netherlands pointed out that
the proposal was intended to:

173 The Ad Note to Article VI was included in Article 34 of the Havana Charter and was incorporated
into the GATT 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 (30 Aug. 1948)).

 (a) provide facilities for consultation between Members in cases of suspected
dumping before anti-dumping duties are actually brought into operation."
7.128 Since the language of the Report relied on by Thailand did not relate to the Ad Note, its
relevance in the present dispute is questionable. In addition, it is by no means clear that the phrase
"before anti-dumping duties are actually brought into action" necessarily refers to the period prior to
the imposition of an anti-dumping order, since it mi ght equally refer to the period prior to assessment
of the anti-dumping duties. Furthermore, that language is in any event not sufficient to contradict the
very clear statement of the abovementioned Group of Experts.
7.129 We are considering the relevant negotiating hi story because Thailand referred to it in support
of its claim under Article 18.1 of the Anti-Dumping Agreement . We are not referring to the
negotiating history pursuant to Article 32 of the Vienna Convention , i.e., because we find that our
interpretation of the relevant provisions "leaves the meaning ambiguous or obscure; or leads to a
result which is manifestly absurd or unreasonable. " Nor are we referring to the negotiating history
because we find it determinative of the issues before us. However, if the Ad Note was not introduced
to provide for reasonable security in the form of provisional measures, one might legitimately ask
what it introduced for. Since the United States appears to have been applying a form of retrospective
assessment system at the time the Ad Note was introduced,
174 one might reasonably speculate that the
Ad Note may have been intended to provide fo r reasonable security for definitive anti-dumping
duties, pending final assessment.
7.130 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.
(iii) The combined use of bonds and cash deposits
7.131 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.
7.132 Thailand asserts that the word "or" in the phr ase "cash deposit or bond" in the Ad Note can
only be read in the exclusive sense rather than the inclusive sense, so that only a single security in the
form of either (i) a cash deposit or (ii) a bond ma y be applied. Thailand further argues that the
question of whether a measure is "reasonable" within the meaning of the Ad Note cannot be resolved
simply by reference to the amount of the security. According to Thailand, the manner in which any
security is imposed must also be "reasonable". Thailand submits that by mandating that security
required specifically for the collection of anti-dumping duties should take the form of either a bond or
a cash deposit, the drafters of the Ad Note sought to limit the burdens placed on importers by ensuring
that importers would not be required to provide specific anti-dumping security in two different forms
at the same time.

174 The parties disagree on whether or not the United States was applying a retrospective assessment
system at the time the Ad Note was introduced into the GATT 1947. The United States claims that it was,
whereas Thailand claims that it was not. Since this issue is not central to our findings, there is little to be gained
in seeking to resolve this issue definitively. We note, though, that even Thailand acknowledges that there may
have been cases (outside of the "normal" situation) in which the United States was required to assess anti-
dumping after the time of entry of goods (see Thailand's comments on the United States' reply to Question 15
from the Panel at the second substantive meeting, para. 12). The United States must necessarily have applied
some form of retrospective assessment in respect of such cases.

7.133 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 Thailand fails to explain how requiring two types of security instead of one is
relevant to determining what constitutes "reasonabl e security". The United States also argues that
Thailand fails to explain why the Agreement should be read to proscribe 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 – EC 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."
175
7.134 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 ‘measures 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." 176 T h e
United States submits that, like the language interpreted by the Appellate Body in US – FSC
(Article 21.5 – ECII) , based on the text and context, the "or" in the Ad Note encompasses a cash
deposit, a bond, or a combination of both.
7.135 We agree with Thailand's argument that the reasonableness of the security is to be assessed by
reference to both the form and the amount thereof. In terms of form, the purpose of the phrase "(cash
deposit or bond)" in the Ad Note is to clarify th at both cash deposits and bonds constitute reasonable
forms of security. Since that is th e case, we see nothing in the text of the Ad Note to suggest that the
combination of both (otherwise reasonable) forms of security necessarily results in a measure that is
unreasonable. In particular, 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.
7.136 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 177 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.
7.137 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.

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

(iv) Whether the application of the EBR resulted in "reasonable" security requirements
7.138 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 Thailand 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 thereo f. Having already dealt with Thailand's claim
regarding the form of the security required by th e United States, in this section we consider the
reasonableness of the amount thereof.
7.139 The United States submits that the ordinary meaning of the term "reasonable" is "in
accordance with reason; not irrational or absurd."
178 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." 179 We consider it appropriate to consider
the meaning of the term "reasonable" in light of this definition. 180 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.
7.140 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
assessment review).181 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.
7.141 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). 182 T h e

178 The United States refers to the New Shorter Oxford English Dictionary, p. 2496.
179 The United States refers to the New Shorter Oxford English Dictionary, p. 2496.
180 We note that Thailand has not challenged the definition proposed by the United States.
181 Thailand 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.
182 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' Responses to First Set of Panel
Questions, para. 51, and para. 68 of Thailand's second written submission. 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

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",
183 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.
7.142 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.184
7.143 The United States asserts that "[t]o analyse the likelihood of potential increases, US Customs
used historical data on increases in the antidumping rate". 185 In this regard, the United States refers to
note 28 to para. 26 of its first written submission, wh ere 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".
7.144 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.
186 187 In our view, apparent rate increases resulting from
error or fraud should not be confused with genuine increases in exporters' actual rates of dumping.

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.
183 See United States' first written submission, para. 37.
184 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
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 Ad Note, we see no reason why a member could not choose to only
impose security requirements otherwise authorized under the Ad Note in respect of importers with a greater risk
of default.
185 See United States' Responses to First Set of Panel Questions, para. 36.
186 See e.g. Exhibit THA-6, bottom of page 10.
187 Thailand argues extensively that the major proportion of uncollected anti-dumping duties concerned
imports covered by the anti-dumping order on crawfish, and that such uncollected anti-dumping duties resulted
from the special circumstances of that case. We do not consider it necessary to review those 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 anti-dumping duties more generally. As illustrated at page 8 of Exhibit

7.145 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 agri culture/aquaculture cases generally.
188 Furthermore, 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.
7.146 The United States seeks to support its conclusion that rates of dumping would likely increase
by asserting that "USDOC's preliminary results from the first administrative review of the
antidumping order with respect to shrimp indicate th at several Thai companies that had been making
cash deposits at the 6% rate established in the invest igation may be subject to an assessment rate in
excess of 57%."
189 Thailand retorts that USDOC's prelimin ary results from the first administrative
review of the anti-dumping order with respect to shrimp actually indicate that "[f]or 17 out of the 18
exporters for whom actual margins (rather than punitive facts-available margins) were determined, the
assessment rates were actually lower than the cash deposit rates. In other words, for 94 per cent of
exporters for whom actual margins were calculated, the "unsecured liability" that the United States
refers to did not even arise." 190 Thailand also asserts that, even including exporters for whom actual
margins were not determined, assessment rates incr eased for only eight exporters. According to
Thailand, Thai "export statistics indicate that e xporters whose assessment rates increased accounted
for only 1.92 per cent of the value of trade for the period covered by the administrative review." 191
Thai asserts that rates of dumping have therefore d eclined or remained the same for approximately 98
per cent of the value of entries of Thai shrimp.192
7.147 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, for Thailand has demonstrated – and the United

THA-6, not all uncollected anti-dumping duties in the cr awfish case resulted from increased rates of dumping.
Scenario 1, e.g. which concerns the majority of the unpaid crawfish duties, 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 no t able to collect from the su rety because the latter had gone bankrupt). Furthermore,
Exhibit US – 10 suggests that the United States had evidence of rate increases extending beyond the crawfish
case (the United States claims that it had evidence of rate increases in respect of 13 antidumping cases involving
340 exporter/producers; see United St ates' Responses to Second Set of Pa nel Questions, note 46; see also the
Amendment, which although it refers explicitly to the crawfish case, also states that "[r]ecent antidumping cases
for agriculture/aquaculture merchandise have also resulte d in considerable rate increases"). Given the broad
nature of this evidence, there is no basis to quer y such evidence by reference to the allegedly special
circumstances of a single case.
188 See United States' first written submission, para. 26.
189 See United States' first written submission, para. 26.
190 See Thailand's oral statement at the first substantive meeting, para. 66.
191 See Thailand's Responses to First Set of Panel Questions, para. 112. In response to Question 50
from the Panel, Thailand also suggested (at para. 119) that "the CBP may have improperly limited its analysis to
cases in which administrative review s were conducted" (emphasis added). Since Thailand did not confirm the
factual basis for this argument in its subsequent submissi ons to the Panel, we shall not consider this argument
further.
192 See Thailand's second written submission, para. 69.

States has not disputed – that rates only increased for a very small proportion of shrimp imports from
Thailand.
7.148 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.
7.149 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.
(d) Summary
7.150 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.
(i) Finding on whether or not the application of the EBR was "in accordance with" the Ad Note
7.151 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.
5. Conclusion in respect of Thailand's Article 18.1 claim
7.152 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.
6. Other claims by Thailand
(a) Articles 7 and 9 of the Anti-Dumping Agreement , Article VI:2 of the GATT 1994, and the
Ad Note
7.153 Thailand has made separate claims that the E BR is inconsistent with the provisions of
Articles 7.1, 7.2, 7.4 and 7.5 of the Anti-Dumping Agreement; Articles 9.1, 9.2 and 9.3 of the Anti-
Dumping Agreement; Article VI:2 of the GATT 1994; and the Ad Note. In note 266 to its first written
submission, Thailand has explained that "these clai ms are subsidiary and alternative to Thailand's
Article 18.1 claim and, to the extent that the Pa nel finds in Thailand's favour on the Article 18.1
claim, the Panel need not further address Thaila nd's separate claims" under the abovementioned
provisions.
7.154
 In light of Thailand's characterisation of these additional claims as "subsidiary and
alternative" to its claim under Article 18.1 of the Anti-Dumping Agreement, and in view of our finding
in respect of Thailand's Article 18.1 claim, we do not consider it necess ary to address Thailand's
claims under Articles 7 and 9 of the Anti-Dumping Agreement, Article VI:2 of the GATT 1994, and
the Ad Note.

(b) Articles I:1, II:1(a), II:1(b), X:3(a) and XI:1 of the GATT 1994.
7.155 Thailand has made additional claims under Articles XI:1 and, alternatively, Article II:1(a) and
the first and second sentences of Article II:1(b), of the GATT 1994; and Articles X:3(a) and I of the
GATT 1994. However, unlike its alternative claims under Articles 7 and 9 of the Anti-Dumping
Agreement, and Article VI of the GATT 1994 and its Ad Note, Thailand has requested that the Panel
address its claims regarding the consistency of the EBR with Articles XI, II, X:3(a), and I of the
GATT 1994 even if it were to find a violation of its main claim under Article 18.1 of the Anti-
Dumping Agreement . In Thailand's view, the Panel should make findings "to assist the DSB in
making recommendations or rulings aimed at achievi ng a satisfactory settlement of the matter and to
ensure that on appeal the Appellate Body can, if necessary, fully address those claims or, at a
minimum, complete any necessary analysis to rule on those claims".
193
7.156 The Panel, after careful consideration, on th e basis of judicial economy, refrains from ruling
on Thailand's claims under Articles XI, II, X:3(a), and I of the GATT 1994. The Panel recalls that the
principle of judicial economy is recognized in WT O law. The Appellate Body has consistently ruled
that panels are not required to address all the claims made by a complaining party. In fact, a panel has
discretion to determine which claims it must addr ess in order to resolve the dispute between the
parties, provided that those claims are within its terms of reference. 194 The Appellate Body has relied
on the explicit aim of the dispute settlement mechan ism, 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.195"196
7.157 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.'"
197

193 Thailand's first written submission, para. 289.
194 Appellate Body Report, India – Patents (US), para. 87.
195 (footnote original) The "matter in issue" is the "matter referred to the DSB" pursuant to Article 7 of
the DSU.
196 Appellate Body Report, US – Wool Shirts and Blouses , DSR 1997:I, 323 at 340. See also Panel
197 Appellate Body Report, Australia – Salmon , para. 223. See also Panel Report, EC – Sardines,
paras. 7.148-7.152; Panel Report, US – Steel Safeguards, para. 10.703.

7.158 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 and the Ad Note, the Panel believes that it has
effectively resolved 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 Thailand's claim under Article XI:1 of the GATT 1994, the Panel in US –
1916 Act (Japan) , after finding a violation of Article VI, he ld that in the case before it, Article VI
addressed the "basic feature" of the measure at issue more directly than Article XI, although 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.198 Precedent also exists as regards Tha iland's claim under Article X:3(a) of the
GATT 1994. In previous disputes, after having found vi olations of, inter alia, Article I of the
GATT 1994199, Article 11.2 of the Anti-Dumping Agreement200 and Article 2.4.1 of the Anti-Dumping
Agreement201, the respective Panels did not consider it necessary to examine the Article X:3(a) claims.
7.159 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 Thailand'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 th at this reference to the provisions of the 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 integr al part of Article VI of the GATT 1994. We therefore interpret these
provisions to mean that the WTO Agreement s allow for the imposition of measures which are
considered to be specific action against dumping prov ided they are in accordance with Article VI of
the GATT 1994, including its Ad Note.202 Accordingly, we are unable to accept that a measure which
constitutes specific action against dumping in accord ance 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.
7.160 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 sp ecific action against dumping in accordance with
Article VI of the GATT 1994, as interpreted by the Anti-Dumping Agreement, and thus, is consistent
with Article 18.1 of the Anti-Dumping Agreement. Therefore, our findings under the Anti-Dumping
Agreement must prevail over any potential finding of viol ation under Articles XI, II, X:3(a), and I of
the GATT 1994.
7.161 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,

198 Panel Report, US – 1916 Act (Japan), para. 6.281.
201 Panel Report, US – Stainless Steel, para. 6.55.
202 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.

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
support of its reasoning.
203 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."
204
7.162 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 specifi cally, and in detail", with the issue
of security for definitive anti-dumping duties, those provisions address the "basic feature" of the
measure at issue more directly than the other GATT 1994 provisions cited by Thailand. Article VI
and the Ad Note therefore constitute lex specialis that should prevail over the more general
GATT 1994 provisions cited by Thailand.
7.163 For the above reasons, we conclude that it would not be appropriate for us to proceed and rule
on Thailand's claims under Articles I, II:1(a), the fi rst and second sentences of Article II:1(b), X:3(a),
and XI:1 of the GATT 1994, and we decline to do so.
7. United States' defence under Article XX(d) of the GATT 1994
7.164 Having found that the EBR constitutes "specific action against dumping" and that it is not a
"reasonable security" under the Ad Note, 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.
(a) Main arguments of the United States
7.165 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.
205 The United States submits that 19 U.S.C. 1673e(1) and
the other relevant laws and regulations that authorise the Amended CBD are not themselves WTO-
inconsistent. The United States also argues that no reasonable alternative is available to ensure
revenue collection.206
7.166 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

203 Panel Report, US – 1916 Act (Japan), para. 6.269.
204 Appellate Body Report, EC – Bananas III, para. 204.
205 United States' first written submission, para. 68.
206 United States' first written submission, paras. 69-70.

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
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.
(b) Main arguments of Thailand
7.167 Thailand argues that the United States has not met its burden under Article XX(d) of the
GATT 1994 to demonstrate that the application of the EBR is necessary to secure compliance with US
laws and regulations imposing anti-dumping duties. Thailand notes in general that the United States
has relied exclusively on the Basic Bond Requirement as sufficient to secure compliance with its laws
and regulations imposing anti-dumping duties in the overwhelming majority of antidumping duty
cases (specifically, in 242 out of 248 cases, represen ting 98 per cent of anti-dumping orders according
to Thailand). 207 Thailand also argues, based on the fact s on record, that the United States cannot
demonstrate that assessment rates for subject shrimp are likely to significantly exceed the cash deposit
rate established in the final de termination of the original dumping investigation. Thailand also
disputes the United States' assumption that subject Thai importers are more likely to default on
payment of anti-dumping duties than other products subject to anti-dumping duties. Accordingly,
Thailand argues that the Basic Bond Requirement in conjunction with cash deposit system and civil
recovery proceedings constitutes both a sufficient a nd less restrictive alternative measure, thereby
rendering ineffective the United States' argument that EBR is necessary to secure compliance.
7.168 Thailand also argues that the EBR does not meet the conditions set out in the chapeau to
Article XX(d) because its application constitutes "arb itrary" or "unjustifiable" discrimination and a
"disguised restriction on trade". Thailand argues that the actual objective of the EBR is to burden the
shrimp import industry in order to restrict the import of foreign shrimp products into the United
States. Thailand seeks support for its position by th e fact that the EBR has only been applied to
subject shrimp imports, and that the United States has not demonstrated that subject shrimp importers
from Thailand present a comparatively greater risk of default or non-payment than importers from
other countries. Thailand also argues that the lack of any nexus between the objective of collection of
United States revenue and the manner in which it was applied constitutes a disguised restriction on
international trade in subject shrimp. In this re gard, Thailand reiterates that the EBR has not been
applied to entries of other products with established histories of revenue collection problems.
(c) Evaluation by the Panel
7.169 Before examining whether the EBR is justified by Article XX(d) of the GATT 1994, we recall
that it is the United States who has the burden to prove to the Panel that this is the case.
208
7.170 We will now look at the text of Article XX(d) and the chapeau of Article XX which provide:

207 Thailand's first written submission, para. 272.
208 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.

"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:
(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[.]"
7.171 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 ..."
209
7.172 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).
(i) Whether the EBR is necessary to secure compliance with US laws and regulations as
provided in Article XX(d) of the GATT 1994
7.173 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."
210
First element: Whether the EBR has been "designed" to secure compliance with US laws and
regulations that are not in themselves WTO-inconsistent
7.174 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

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

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.
7.175 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 antidumping duty order which—
(1) directs customs officers to assess an antidumping 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."
7.176 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."
211
7.177 Thailand submits that 19 U.S.C. § 1673e(a)(1) ex clusively does not require importers to pay
duties, but in combination with 19 U.S.C. § 1673e (a)(3) instead directs US Customs to assess anti-
dumping duties. 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 de posit of estimated anti-dumping duties pending
liquidation ... ". Thailand considers that 19 U. S.C. § 1673 titled "Imposition of Antidumping Duties",
more accurately refers to the United States' obliga tion to collect anti-dumping duties. This provision
states that USDOC shall "impose[] upon such merchandise an antidumping duty, in addition to any
other duty imposed in an amount equal to the am ount by which the normal value exceeds the export
price (or the constructed export price) for the me rchandise." Thailand considers the obligation to
collect anti-dumping duties is additionally reflected in USDOC implementing obligations. 19 C.F.R.
§ 351.212(b)(1) requires that "the Secretary will in struct the Customs Service to assess antidumping
duties by applying the assessment rate to the entere d value of the merchandise". Alternatively,
19 C.F.R. § 351.211(c)(1) provides that the cash depos it rate will be assessed as the rate of final
liability if an administrative review is not requested.
7.178 Taking the parties' views into considerati on, 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) encompass the United Stat es' obligation to collect anti-dumping duties.

211 United States' Responses to Second Set of Panel Questions, para. 58.

Whereas 19 U.S.C. § 1673e(a)(1) directs customs o fficers to "assess" an antidumping duty, the
obligations under 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) require that entries of merchandise subject to an anti-dumping order be subject
to the imposition of antidumping duties. As we mentioned, 19 U.S.C. § 1673 requires that USDOC
"impose[] upon such merchandise an antidumping duty, in addition to any other duty imposed in an
amount equal to the amount by which the normal value exceeds the export price (or the constructed
export price) for the merchandise" 19 C.F.R. § 351.212(b)(1) requires that "the Secretary will instruct
the Customs Service to assess antidumping duties by applying the assessment rate to the entered value
of the merchandise". Alternatively, 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 admi nistrative review is not requested. We note that 19
U.S.C. § 1673e(a)(3) requires the deposit of " ... estimated anti-dumping duties pending liquidation
... ".
7.179 Accordingly, the Panel provisionally concludes 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 antidum ping duties pending liquidation, or 19 U.S.C.
§ 1673f, governing treatment of difference between deposit of estimated antidumping duty and final
assessed duty under antidumping duty order.
7.180 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.C.4, the Ad Note permits Members to require reasonable security in a case
of suspected dumping until a final determination of dumping is made in the assessment review. The
Panel further notes that Thailand has not expressly ch allenged any of these laws as inconsistent with
any provision of the GATT 1994. Moreover, regardless of Thailand's expansion of what constitutes
the relevant law enforced by the Amended CBD, the Panel does not interpret Thailand's commentary
as a challenge to the right of the United 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.
7.181 As a final preliminary matter, the Panel will next consider whether the Amended CBD, which
authorises application of the EBR, has indeed b een 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). 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 antidumping and countervailing
duties at liquidation and ensuring that the revenue is protected".
212 The August 2005 Clarification
states that the continuous bond guidelines were modi fied as "necessary in order to ensure the revenue
is adequately protected".213 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

212 Exhibit THA-2, p. 2.
213 Exhibit THA-4, p. 1.

collection gaps between estimated duty deposits and final assessed duties that the
importer fails to satisfy."214
7.182 We note that the stated goal of collecting "antidumping 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.
7.183 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' arguments under Article XX(d), it is sufficient for the Panel
to conclude that the Amended CBD which author ises 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).
Second element: Whether the EBR is "necessar y 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)
7.184 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 a compliance.
7.185 In this regard, the United States argues th at the Amended CBD, which authorises 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, th e United States argues 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.
215
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 2006.216 The United States has estimated that the va lue of subject shrimp imports exceeds $2.5
billion217 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. 218 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

214 Exhibit THA-5, p. 62278.
215 United States' first written submission, para. 68.
216 United States' first written submission, para. 12.
217 United States' first written submission, para. 2.
218 United States' first written submission, para. 14.

the time.
219 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.
7.186 Thailand disputes the US' determination that s ubject shrimp importers' dumping margins are
likely to increase and that subject shrimp importers present a heightened risk of default in comparison
to importers of other products subject to anti- dumping orders. Thailand submits that evidence does
not support a finding that substantial increases in th e assessment rate were more likely to occur for
subject shrimp than other products. Thailand ar gues that the problems of the United States with
collecting anti-dumping duties correlate almost exclusively to non-market economy cases, (in
particular crawfish and garlic cases) as a result of how dumping margins are calculated in non-market
economies, surety bankruptcies, and exemptions fro m cash deposit requirements for new shippers of
products subject to anti-dumping duties.
220 According to Thailand, these factors were determinative
in the finding that assessment rates would increase in excess of cash deposit rates and that a higher
incidence of default in payments would occur for ag riculture/aquaculture products. In support of its
position, Thailand cites to findings by the USCIT in NFI v. US that the United States did not offer
sufficient evidence to establish th at cash deposits would be insufficient to cover final rates of
liquidation,221 or that significant numbers of subject shri mp importers are defaulting or have defaulted
on any obligation to pay anti-dumping duties on their imports of shrimp. 222 Thailand also cites to
evidence on record which it claims demonstrates that non-Chinese agriculture/aquaculture cases
accounted for only 4 per cent of total uncollected duties while Chinese agri culture/aquaculture cases
accounted for 69 per cent of total uncollected duties. 223 Finally, Thailand claims that no basis for
comparison exists that shrimp and other ag riculture/aquaculture merchandise share similar
characteristics related to capitalization rates, history of customs duties payments, reliance on asset-
based financing, and levels of cash flow that w ould indicate a high risk of going out of business
and/or being unable to pay final anti-dumping duty li ability. Thailand submits that United States has
only cited to one page in the Agency Record to support its conclusion that agriculture/aquaculture
importers which defaulted "were not heavily capitalized ", and this statement applies to crawfish and
not subject shrimp224
7.187 We first look at the ordinary meaning of the word "necessary":
"[t]hat which is indispensable; an essential ...; ...[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 ...".225
7.188 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":

219 United States' first written submission, footnote 28.
220 Thailand's first written submission, para. 281.
221 Thailand's first written submission, para. 277, citing to NFI v. US, p. 55, Exhibit THA-9.
222 Thailand's first written submission, para. 278, citing to NFI v. US, p. 54, Exhibit THA-9.
223 Thailand's responses to Second Set of Panel Questions, para. 77 and footnote 59, citing to Exhibit
THA-6, p. 17.
224 Thailand's responses to Second Set of Panel Questions, para. 74.
225 The New Shorter Oxford English Dictionary, L. Brown (ed.) (Clarendon Press, 1993), Vol. II,
p. 3118.

"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
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'."
226
7.189 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
Appellate Body 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 ..."
227
7.190 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 agreements, 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.
228 We agree that this would logically aid in the collection of revenue. Thailand does not
seem to dispute that this is the case.229

226 Appellate Body Report, Korea – Various Measures on Beef, para. 161.
227 Appellate Body Report, Korea – Various Measures on Beef, paras. 162-163.
228 United States' first written submission, para. 68.
229 See Exhibit THA-6, Exhibit 5, p. 6.

7.191 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
establish that rates of dumping provided for in the anti-dumping order were likely to increase and
therefore concluded that the United States had fa iled to demonstrate that the additional security
required through the application of the EBR reasona bly correlated to any case of suspected dumping
in excess of the case of dumping provided for in th e anti-dumping order. Accordingly, we found that
the additional security requirements resulting from th e 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 rat es, 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.
(ii) Conclusion
7.192 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 jus tified 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. § 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 uphold Thailand's claims that the application of the EBR to
subject shrimp from Thailand is inc onsistent with Article 18.1 of the Anti-Dumping Agreement, and
the Ad Note. We reject the United States' argument that the application of the EBR is justified under
Article XX(d) of the GATT 1994.
8.2 We further uphold Thailand's claim that the United States acted inconsistently with
Article 2.4.2 of the Anti-Dumping Agreement by using zeroing to calculate margins of dumping in
respect of the Anti-Dumping Measure.
8.3 In light of the above findings, we decline to rule separately on Thailand's claims that the
application of the EBR to subject shrimp from Thailand is inconsistent with Articles I, II:1(a), the first
and second sentences of Article II:1(b), X:3(a), and XI:1 of the GATT 1994.
8.4 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 cons titute 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 Thailand thereunder.
8.5 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 con cerned bring the measure into conformity
with that agreement." (footnotes omitted)
8.6 We therefore recommend that the United States bring its measures into conformity with its
obligations under the Anti-Dumping Agreement and the GATT 1994.