UNITED STATES - ANTI-DUMPING DUTY ON DYNAMIC RANDOM ACCESS MEMORY SEMICONDUCTORS (DRAMS) OF ONE MEGABIT OR ABOVE FROM KOREA
Document: Report of the Panel
Date: 29 January 1999
Document codes: WT/DS99/R
Complainant: South Korea
Respondent: U.S.
Third parties: EU
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. 2, 3, 5.8, 6, 11, 17, 17.6(i)  Anti-dumpingArt. I, VI, X  GATT 1994

UNITED STATES - ANTI-DUMPING DUTY ON
DYNAMIC RANDOM ACCESS MEMORY SEMICONDUCTORS (DRAMS)
OF ONE MEGABIT OR ABOVE FROM KOREA
Report of the Panel
The report of the Panel on United States – Anti-Dumping Duty on Dynamic Ramdom Access
Memory Semiconductors (DRAMS) of one Megabit or above from Korea is being circulated to all
Members, pursuant to the DSU. The report is being circulated as an unrestricted document from 29
January 1999. Pursuant to the Procedures for the Circulation and Derestriction of WTO Documents
(WT/L/160/Rev.1). Members are reminded that in accordance with the DSU only parties to the
dispute may appeal a panel report. An appeal shall be limited to issues of law covered in the Panel
report and legal interpretations developed by the Panel. There shall be no ex parte communications
with the Panel or Appellate Body concerning ma tters under consideration by the Panel or Appellate
Body.
Note by the Secretariat: This Panel Report shall be adopted by the Dispute Settlement Body (DSB) within 60 days after the
date of its circulation unless a party to the dispute decides to appeal or the DSB decides by consensus not to adopt the report .
If the Panel Report is appealed to the Appellate Body, it sha ll not be considered for adoption by the DSB until after the
completion of the appeal. Information on the current status of the Panel Report is available from the WTO Secretariat.

I. INTRODUCTION
A. BACKGROUND
1.1 On 14 August 1997, Korea requested consultations with the United States regarding "the
failure of the United States to revoke the anti-dumping duty order on DRAMs from Korea "
(). Korea made its request pursuant to Article 4 of the Understanding on Rules and
Procedures Governing the Settlement of Disput es (the DSU), Article XXIII:1 of the General
Agreement and Article 17.3 of the Agreement on the Implementation of Article VI of the General
Agreement on Tariffs and Trade (the AD Agreement).
1.2 Pursuant to this request, Korea consulted with the United States in Geneva on
9 October 1997. No mutually satisfactory solution was reached.
1.3 On 6 November 1997, Korea requested the establishment of a panel with the standard terms
of reference provided by Article 7 of the DSU (WT/DS99/2). Korea made this request pursuant to
Article 6 of the DSU, Article XXIII:2 of the General Agreement and Article 17.5 of the AD
Agreement.
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL
1.4 At its meeting on 16 January 1998, the Dispute Settlement Body (the DSB) established a
panel pursuant to Korea’s request (WT/DS99/3). The Panel’s terms of reference are:
To examine, in the light of the relevant provisions of the covered agreements cited by
Korea in document WT/DS99/2 the matter referred to the DSB by Korea 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.
(WT/DS/99/3.)
1.5 Pursuant to a request by Korea, and as provided in paragraph 7 of Article 8 of the DSU, on
19 March 1998, the Director-General accordingly composed the Panel as follows:
Chairman: Mr. Crawford Falconer
Members: Mr. Meinhard Hilf
Ms. Marta Lemme
C. P
ANEL PROCEEDINGS
1.6 The Panel met with the Parties on 18/19 June 1998 and on 21/22 July 1998.
1.7 On 18 September 1998, the Chairman of the Panel informed the DSB that the Panel would not
be able to issue its report within six months of the composition and establishment of the terms of
reference of the Panel. The reasons for the delay are set out in WT/DS99/4.
1.8 The Panel submitted its interim report to the parties on 23 October 1998. On 6 November 1998
both parties submitted written requests for the Panel to review precise aspects of the interim report, no
further meeting with the Panel was requested. The Panel submitted its final report to the parties on 4
December 1998.

II. FACTUAL ASPECTS
A. THE ORIGINAL ANTI-DUMPING DUTY INVESTIGATION
2.1 On 22 April 1992, Micron Technologies, Inc. ("Micron")1 filed an anti-dumping duty petition
with the International Trade Commission ("ITC") and the Department of Commerce ("DOC") against
imports of DRAMs of one megabit or above, whether assembled or unassembled, from the Republic
of Korea.
2.2 On 10 May 1993 pursuant to an investigation, the DOC issued an Anti-Dumping Duty Order
and Amended Final Determination for DRAMs from Korea.
2 The notice corrected certain clerical
errors and found anti-dumping margins of 0.82 percent for Samsung Electronics Co., Ltd
("Samsung"), 4.97 percent for LG Semicon Co., Ltd ("LG Semicon"), 11.16 percent for Hyundai
Electronics Co., Ltd (Hyundai) and 3.85 percent for all others. The parties appealed the DOC's Final
Determination to the U.S. Court of International Trade, which remanded the case to the DOC to
correct certain errors. In its 24 August 1995 Redetermination on Remand, the DOC found corrected
dumping margins of 0.22 percent for Samsung ( de minimis), 4.28 percent for LG Semicon, 5.15
percent for Hyundai and 4.55 percent for all others.
B. THE FIRST ADMINISTRATIVE REVIEW
2.3 The DOC initiated the first annual review of DRAMs from Korea on 15 June 1994 and
investigated whether the Korean companies made sales of DRAMs less than normal value, (i.e.
dumped) during the period of review. In its 6 May 1996 Final Results, the DOC found that LG
Semicon and Hyundai had not dumped during the period of review.3
C. THE SECOND ADMINISTRATIVE REVIEW
2.4 The DOC initiated the Second Administrative Review on 15 June 19954 and then investigated
whether Hyundai and LG Semicon made sales of DRAMs less than normal value during the period of
review. The DOC published its Final Results on 7 January 1997, and found that Hyundai and LG
Semicon had not dumped during the period of review.5
D. THE THIRD ADMINISTRATIVE REVIEW
2.5 On 8 May 1996, the DOC published a Notice of Opportunity to Request Administrative
Review for the period of 1 May 1995 to 30 April 1996. 6 On 29 and 31 May 1996, LG Semicon and
Hyundai, respectively, asked the DOC to conduct an administrative review and to revoke the anti-
dumping duty order. On 25 June 1996, the DOC initiated the Third Annual Review of DRAMs from
Korea, covering the period of 1 May 1995 to 30 April 1996. At the same time the DOC initiated a
revocation review pursuant to a request from the respondents under section 353.25(a)(2) of the DOC
regulations to revoke the DRAMs from Korea order in part.
7
2.6 On 24 July 1997, the DOC issued its Final Results and Determination Not to Revoke Order in
Part ("Final Results Third Review").8 The DOC found that Hyundai and LG Semicon had not dumped
during the period of review.

1 Micron later changed its name to Micron Technology, Inc.
2 58 Fed. Reg. 27520 (10 May 1993)
3 61 Fed. Reg. 20216 (6 May 1996)
4 60 Fed. Reg. 31447 (15 June 1995)
5 62 Fed. Reg. 965 (7 January 1997)
6 61 Fed. Reg. 20791 (8 May 1996)
7 61 Fed. Reg. 32771 (25 June 1996)
8 62 Fed. Reg. 39809 (24 July 1997)

E. THE US ANTI-DUMPING LEGISLATION AND REGULATION REGARDING REVOCATION
2.7 The relevant US legislation concerning revocation is set forth in Section 751(d) of the Tariff
Act of 1930, as amended, which reads :
The administering authority may revoke, in w hole or in part, a countervailing duty order
or an anti-dumping duty order or finding, or terminate a suspended investigation, after
review under subsection (a) or (b) of this section. The administering authority shall not
revoke, in whole or in part, a countervailing duty order or terminate a suspended
investigation on the basis of any export taxes, duties, or other charges levied on the export
of the subject merchandise to the United States which are specifically intended to offset
the countervailable subsidy received.
2.8 The relevant DOC regulations concerning revocation are set forth in the DOC's Regulations,
Section 353.25(a)(2):
The Secretary [of Commerce] may revoke an order in part if the
Secretary concludes that:
(i) One or more producers or resellers covered by
the order have sold the merchandise at not less than
foreign market value for a period of at least three
consecutive years;
(ii) It is not likely that those persons will in the
future sell the merchandise at less than foreign market
value; and
(iii) For producers or resellers that the Secretary
previously has determined to have sold the
merchandise at less than foreign market value, the
producers or resellers agree in writing to their
immediate reinstatement in the order, as long as any
producer or reseller is subject to the order, if the
Secretary concludes under §353.22(f) that the producer
or reseller, subsequent to the revocation, sold the
merchandise at less than foreign market value.
III. FINDINGS AND RECOMMENDATIONS REQUESTED BY THE PARTIES
A. K
OREA
3.1 Korea requests the Panel to find that: the United States is not in conformity with its
obligations under Articles I, VI and X of the General Agreement of Tariffs and Trade1994 ("GATT
1994") and Articles 2, 3, 5.8, 6, 11.1 and 11.2 of the Agreement on Implementation of Article VI of
GATT 1994 ("AD Agreement"). Korea also requests the Panel to suggest that the United States take
the following actions: (i) revoke the anti-dumping duty order on DRAMs from Korea; (ii) alter the de
minimis standard for reviews of anti-dumping duty orders; and (iii) eliminate the “no likelihood/not
likely" criterion provided for in section 353.25(a)(2)(ii) of the DOC regulations, and otherwise
conform its revocation scheme to the requirements of Article 11 of the AD Agreement.
B. U
NITED STATES
3.2 The United Sates requests the Panel to find that:

(a) Korea’s claims under Articles 1, 2, 3 and 17 of the AD Agreement are inadmissible
(with the exception of claims under Articles 2.1, 2.2, 2.2.1.1, and 3.1);
(b) Korea’s claims concerning the 1993 final determinations by the DOC and the ITC on
DRAMs from Korea are inadmissible;
(c) The DOC’s Final Results Third Review is not inconsistent with Article 11 of the AD
Agreement or any other provision of the AD Agreement or GATT 1994;
(d) The United States anti-dumping statute and regulations are not inconsistent with
Article 11 of the AD Agreement or any other provision of the AD Agreement or
GATT 1994;
(e) The above measures do not nullify or impair benefits accruing to Korea under the AD
Agreement or GATT 1994.
IV. MAIN ARGUMENTS OF THE PARTIES
A. PRELIMINARY OBJECTIONS
4.1 The United States raises preliminary objections concerning the admissibility of certain
claims made by Korea.
4.2 Korea asserts that all claims are properly before the Panel, and that all of the United States'
preliminary objections should be rejected.
1. Admissibility of Korea's Claims Concer ning Articles 1, 2, 3, and 17 of the AD
Agreement
(a) Objection of the United States
4.3 The following are the arguments of the United States in support of its preliminary objection:
4.4 The United States argues that the Panel must reject as inadmissible Korea’s claims concerning
Articles 1, 2, 3, and 17 of the AD Agreement. In its request for consultations, Korea did not identify
these provisions. Therefore, claims based on these provisions did not constitute part of the “matter”
for which consultations were requested under Article 17.3 of the AD Agreement. As a result, the
claims based on these provisions also did not constitute part of the “matter” that, under Article 17.4 of
the AD Agreement, Korea was entitled to refer to the Dispute Settlement Body (“DSB”).
4.5 Article 17.3 of the AD Agreement permits a Member to request consultations concerning a
“matter.” Article 17.4 of the AD Agreement further permits a Member to refer “the matter” to the
DSB -- that is, to request the establishment of a panel. Article 17.5 directs the DSB to establish a
panel to examine “the matter.” In light of the lang uage used, it is clear that the “matter” for which
consultations is requested under Article 17.3, the “matter” referred to the DSB under Article 17.4, and
the “matter” to be examined by a panel under Article 17.5, is the same matter. These provisions
constitute special or additional rules and procedures. As such, under Article 1.2 of the DSU, they
prevail over any inconsistent provisions in the DSU.
9

9 Appendix 2 to the DSU expressly identifies Articles 17.4 and 17.5 as special or additional rules.
Because Article 17.3 is incorporated by reference into Article 17.4, Article 17.3 also must prevail over any
inconsistent provisions in the DSU.

4.6 A “matter” as used in these provisions consis ts of the specific claims identified by a
Member.10 A “claim,” in turn, consists of an identification of the provision of the specific agreement
alleged to have been violated.11 Accordingly, because the “matter” to be examined by a panel must be
the same “matter” for which consultations were requested, a panel may only consider “claims” that
were identified in the request for consultations by means of an identification of the provisions of the
specific agreements alleged to have been violated.
4.7 In its request for consultations, Korea identified Article VI of GATT 1994 and Articles 6 and
11 of the AD Agreement. Korea did not identify Articles 1, 2, 3, or 17 of the AD Agreement.
Therefore, claims based on these provisions did not, and could not, constitute part of the matter that
Korea properly could refer to the DSB under Article 17.4, nor could claims based on these provisions
properly constitute part of the matter to be examined by a panel under Article 17.5.
12
(b) Response by Korea
4.8 In its letter dated 17 June 1998, Korea made the following arguments:
4.9 The U.S. objection rests, in large part, on a tortured discussion of the relationship between the
terms “matter” and “claim.” The United States correctly notes that a “matter” is composed of the
“claim(s)” that make up that matter and that each claim consists of a challenged measure and the
WTO provision the complainant claims the measure violates. But this explication, far from supporting
the U.S. objection, confirms Korea’s position. Between a matter and the claims that compose it, the
matter is the more general. Thus, a requirement that a matter be identified is far less demanding than a
requirement that the claims that make it up be iden tified. The United States attempts to obscure this
truth with a circuitous ramble suggesting that since a matter is composed of claims, any requirement to
identify the matter can be met only by identifying each claim it subsumes. But, had the negotiators
intended to require a complainant to identify all claims composing its as-yet undrafted complaint in its
consultation request, Articles 17.3 and 17.4 would refer to “claims” not “matters.” The Panel should
reject this baseless attempt to equate the specific with the general, contrary to the obvious intent of the
negotiators as shown in the text of the relevant provisions.
4.10 The United States cited the Appellate Body report in Brazil–Measures Affecting Dessicated
Coconut (Dessicated Coconut) to support its objection. However, the passage from that report quoted
below confirms that the panel request, not the consultation request, defines the terms of reference:
A panel’s terms of reference are important for two reasons. First, terms of reference
fulfil an important due process objective – they give the parties and third parties
sufficient information concerning the claims at issue in the dispute in order to allow them
an opportunity to respond to the complainant’s case. Second, they establish the
jurisdiction of the panel by defining the precise claims at issue in the dispute.
13

10 Brazil - Measures Affecting Desiccated Coconut , WT/DS22/AB/R, Report of the Appellate Body
adopted 20 March 1997, p. 23 (hereinafter “Desiccated Coconut” ).
11 European Communities - Regime for the Importation, Sale and Distribution of Bananas ,
WT/DS27/AB/R, Report of the Appellate Body adopted 25 September 1997, para. 141.
12 In this regard, it is irrelevant that Korea did not cite Article 17.4 in its request for the establishment
of a panel (WT/DS99/2). A complainant cannot circumvent the requirements of the AD Agreement and the
DSU by omitting in its request for a panel the provision that imposes the requirements.
Moreover, putting aside the special or additional rules of the AD Agreement, Korea’s claim concerning
Article 1 of the AD Agreement is inadmissible because Korea’s request for the establishment of a panel did not
include a claim under Article 1 (WT/DS99/2). Thus, this claim is not within the Panel’s terms of reference and
must be rejected.
13 WT/DS22/AB/R (21 February 1997) at page 21.

4.11 Korea agrees with the approach taken in previous adopted reports that a matter, which includes
the claims composing that matter, does not fall within a panel’s terms of reference unless the claims are
identified in the documents referred to or contained in the terms of reference.
4.12 The Panel should reject the attempt by the United States to exclude Korea’s claims
concerning Articles 2, 3 and 17 of the AD Agreement on the ground that Korea did not specifically
identify these articles in its request for consultations. The Appellate Body and WTO panels uniformly
have rejected similar attempts, declaring that the legally relevant question is whether a claim was
raised in the request for establishment of a panel. That is because the panel request is the document
that generally sets a panel’s terms of reference. These holdings are based on the language of the
Dispute Settlement Understanding (the DSU)--a request for consultations must contain merely “an
indication of the legal basis for the complaint,” but a panel request must provide a “summary of the
legal basis of the complaint.” The ordinary mean ing of these terms is confirmed by the context,
object and purpose of the consultation request and the panel request. As the United States itself
argued in Japan–Measures Affecting Consumer Photographic Film and Paper (Japan–Film)
14, a
Member cannot know before consultations, when it makes its request, precisely what the scope of a
Respondent’s possible violations of WTO measures might be.
15 The consultative process, thus, serves
two functions: it allows the complainant to develop a better understanding of the precise nature of the
possible violations while, at the same time, it allows the Respondent to develop a better understanding
of the complaint and, of course, it provides an opportunity to settle the dispute. Based on the
consultations, a complainant must set out the legal basis of its complaint with precision in its panel
request. That is what Korea did, and so the Panel should dismiss the US preliminary objection.
(c) Clarification by the United States
4.13 Pursuant to written questions posed by the Panel,16 the United States clarified its preliminary
objections concerning the admissibility of Korea's claims under Articles 1, 2, 3, and 17 of the AD
Agreement.
4.14 The United States is of the view that a claim that was actually raised during consultations may
be referred to the DSB. This view was recently confirmed in the Guatemala Cement case, in which
the panel concluded that “the ‘matter’ consulted about under Article 17.3, the ‘matter’ referred to the
DSB under Article 17.4, and the ‘matter’ to be examined by a panel under Article 17.5, is in each
instance the same matter ...”17
4.15 It is the experience of the United States that the investigating authorities of the various WTO
Members adhere to the transparency requiremen ts of the AD Agreement with varying degrees of
rigor. In the case of those authorities that adhere rigorously to these requirements, such as the US
authorities, it would not be unreasonable to expect that a complaining Member would be able to
identify its claims with precision in its written request for consultations. However, in the case of
authorities that adhere with less rigor to the transparency requirements of the AD Agreement, a

14 WT/DS44/R (22 April 1998), para. 3.14.
15 Korea notes, however, that in this case, it raised Articles 2 and 3 of the AD Agreement during the
WTO consultations with the United States. See, e.g., Questions Submitted by the Republic of Korea to the
United States, Questions C-9, C-9-1 and D-2. In regard to the other articles cited by the United States, the
standards of Article 17 apply to this dispute as a matter of course and although Korea mentioned Article 1 in its
First Submission, it advanced no argument based on that Article.
16 The Panel recalls that the questions were: "The United States’ preliminary objections state that
certain provisions were not identified in Korea’s request for consultations. (a) Could the United States please
state whether it considers that a claim which was actually raised during consultations, but was not identified in
the request for consultations, is part of a matter which may be referred to the DSB? (b) Could the United States
please state whether Korea and the United States in fact consulted with respect to Korea’s claims under Articles
1, 2, 3 and 17 of the ADP Agreement?"
17 Guatemala - Anti-Dumping Investigation Regarding Portland Cement from Mexico , WT/DS60/R,
Report of the Panel issued 19 June 1998, para. 7.15.

Member requesting consultations may not be in a position, as a practical matter, to identify with
precision its claims in its written request for consultations. It may be that only during the course of
the consultations will the complaining Member be able to identify with precision the alleged
violations committed by the investigating authorities in question. Therefore, a Member should be
permitted to refer a claim to a panel if it was actually raised during consultations, even though it may
not have been included in the written request for consultations.
4.16 The United States is aware that an identification of the claims on which the parties actually
consulted may raise an issue of fact. Normally, there should be documents from the consultations
(typically in the form of written questions presented by the complaining Member to the responding
Member) that identify the claims actually raised. In the absence of such documentation, a panel
should rely on the written request for consultations itself.
4.17 The United States and Korea consulted with respect to claims under Articles 2.1, 2.2, 2.2.1.1,
and 3.1. Although, Korea did not identify Article 5.8 by name, in consultations, Korea did refer to
“the 2 percent de minimis margin threshold of the AD Agreement.”
4.18 The United States and Korea did not consult with respect to claims under Article 1 or
Article 17. Moreover, as previously noted by the United States, Article 1 was not included in Korea’s
request for the establishment of a panel.
(d) Clarification by Korea:
4.19 Pursuant to a question posed by the Panel,18 Korea states that:
4.20 Korea and the United States consulted regarding Articles 2 and 3 of the AD Agreement.
Korea intended to advance no arguments under Article 1. Article 17.6 is a procedural provision that
applies to this Panel proceeding as a matter of course.
4.21 Korea further clarified its position in response to another question by the Panel:19
4.22 Korea does not take the position that the United States “violated” Article 17.6 in the same
sense that it violated Articles 2, 5.8, 6, 11.1 and 11.2 of the Anti-Dumping Agreement and Articles I,
VI and X of the General Agreement.
2. Admissibility of Claims Regarding the Scope of the US Anti-Dumping Order
(a) Objection of the United States
4.23 The following are the arguments of the United States in support of its preliminary objection:
4.24 The Panel must dismiss Korea’s claim because the original anti-dumping investigation on
DRAMs from Korea simply is not subject to the AD Agreement. Article 18.3 of the AD Agreement
provides:
Subject to subparagraphs 3.1 and 3.2, the provisions of this Agreement shall apply to
investigations, and reviews of existing measures, initiated pursuant to applications which
have been made on or after the date of entry into force for a Member of the WTO
Agreement.

18 The Panel recalls that the question was: "Cou ld Korea please state whether Korea and the United
States in fact consulted with respect to Korea’s claims under Articles 1, 2, 3 and 17 of the ADP Agreement?"
19 The Panel recalls that the question was: "Korea argues that the United States has violated certain
substantive obligations under Article 17.6 of the ADP Agreement. Could Korea please explain the nature of that
violation in concrete terms?"

4.25 The application (“petition” in US terminology) for anti-dumping duties in the instant case was
made on 22 April 1992, and resulted in a final determination by the DOC on 23 March 1993. As
noted previously, the DOC issued an anti-dumping order (definitive duties) on 10 May 1993. Thus,
the investigation began and finished well before 1 January 1995, the date on which the WTO
Agreement entered into force for the United States. Therefore, determinations made by US
authorities in the course of that investigation are not subject to the provisions of the AD Agreement
and may not be reviewed by this Panel.
4.26 The Appellate Body reached a similar conclusion in the Desiccated Coconut case. That case
dealt with the transition provision for countervailing duties contained in Article 32.3 of the Agreement
on Subsidies and Countervailing Measures (“SCM Agreement”), a provision that the Appellate Body
found to be “identical” to Article 18.3 of the AD Agreement.
20 The Appellate Body described
Article 32.3 (and, thus, Article 18.3) as follows:
The Appellate Body sees Article 32.3 of the SCM Agreement as a clear statement that for
countervailing duty investigations or reviews, the dividing line between the application
of the GATT 1947 system of agreements and the WTO Agreement is to be determined by
the date on which the application was made for the countervailing duty investigation or
review. Article 32.3 has limited application only in specific circumstances where a
countervailing duty proceeding, either an investigation or a review, was underway at the
time of entry into force of the WTO Agreement . This does not mean that the WTO
Agreement does not apply as of 1 January 1995 to all other acts, facts and situations
which come within the provisions of the SCM Agreement and Article VI of the
GATT 1994. However, the Uruguay Round negotiators expressed an explicit intention
to draw the line of application of the new WTO Agreement to countervailing duty
investigations and reviews at a different point in time from that for other general
measures. Because a countervailing duty is imposed only as a result of a sequence of
acts, a line had to be drawn, and drawn sharply, to avoid uncertainty, unpredictability and
unfairness concerning the rights of states and private parties under the domestic laws in
force when the WTO Agreement came into effect.
21
4.27 By challenging a determination made before the WTO Agreement came into effect, Korea is
attempting to undo the sharp line drawn by the drafters and generate the very uncertainty,
unpredictability, and unfairness that the drafters sought to avoid. The Panel should reject this attempt
by dismissing Korea’s claim regarding the determination made by the DOC and the ITC during the
original anti-dumping investigation.
(b) Response by Korea
4.28 In a letter to the Panel dated 17 June 1998, Korea made the following arguments in response
to the US preliminary objection:
4.29 The Panel has the authority and is obliged to examine Korea’s claims regarding the scope of the
US anti-dumping order because: (i) not reviewing the claim would allow the United States to act
inconsistently with the AD Agreement; and (ii) reviewing the claim would be consistent with the
Vienna Convention on the Law of Treaties ("Vienna Convention").
4.30 When the WTO Agreement entered into force for the United States, the United States
assumed the obligation not to act after that date in a manner inconsistent with the AD Agreement
regardless of when the application for anti-dumping duties was made. The United States’ continued
imposition of the flawed scope decision made in the original investigation and each instance of the
United States’ bringing within the proceeding a higher density chip constitute action inconsistent with

20 WT/DS/22/AB/R, Report of the Appellate Body adopted 20 March 1997, at 19 n. 23.
21 Id. at 19 (footnotes omitted).

the AD Agreement. According to Article 18.3 of the AD Agreement, the provisions of the AD
Agreement apply to reviews of existing measures made on or after the date of entry into force of the
WTO Agreements. The Third Review in this proceeding was initiated on 8 May 1996, thus Korea’s
claim regarding the continuing flawed scope determination would be properly before the Panel.
4.31 The application of the AD Agreement in this case would not constitute retroactive application
of the AD Agreement. According to Article 28 of the Vienna Convention:
Unless a different intention appears from the treaty or is otherwise established, its
provisions do not bind a party in relation to any act or fact which took place or any
situation which ceased to exist before the date of the entry into force of the treaty with
respect to that party. (Emphasis added by Korea.)
4.32 The United States’ continued imposition of the flawed scope decision has not “ceased to
exist” and, thus, is subject to the AD Agreement. The United States’ continued imposition of the
flawed scope decision subject to the AD Agreement is an act occurring after 1 January 1995, as is
each instance of the United States’ bringing within the proceeding a higher density chip.
(c) Rebuttal arguments made by the United States
4.33 At the second meeting of the Panel, the United States made the following additional
arguments:
4.34 Korea's claims under Articles 2 and 3 are vulnerable to attack on all fronts. In its first written
submission, Korea complained about two, and only two, decisions by the United States. First, Korea
alleged that the Commission, in its original investig ation, failed to include DRAMs with densities of
less than one megabit in its injury analysis. S econd, Korea alleged that the DOC, by issuing an anti-
dumping order that covered DRAMs of one megabit or above, improperly included products that were
not in existence at the time of the original investigation. According to Korea’s first submission, the
scope of the order “includes products such as 64 megabit DRAMs that were not even shipped to the
United States until 1996 ...” These statements and others in Korea’s first submission establish, without
doubt, that Korea seeks to overturn determinations made before the WTO entered into force. Such
challenges are prohibited by the express terms of Article 18.3 of the AD Agreement. If Korea or the
respondents thought these determinations were wrong, they should have challenged them back in
1992-93. Now is too late and beyond the authority of this Panel to entertain.
4.35 In its rebuttal submission, Korea attempts to make it appear that it is challenging
determinations made after 1 January 1995, when the WTO entered into force for the United States.
However, Korea never identifies which determinations it is challenging or the basis for its challenge.
Is it challenging the questionnaire that the DOC sent out in the third administrative review of the anti-
dumping order on DRAMs from Korea ? If it is, it has provided no evidence for its claim that
respondents reported data for an allegedly new product, 64 megabit (“Meg”) DRAM, or that the DOC
calculated a dumping margin based on that data. Korea also seems to believe 64 Meg DRAMs were
not “in existence” when the original investigation was conducted; were 16 Meg in existence when the
original investigation was conducted? And how do es Korea define “in existence” – must the DRAM
be produced or shipped, and shipped on a commercial basis or is a trial basis good enough? These
and other questions are never addressed by Korea and the Panel has no way of answering them largely
because the evidence that was before the investig ating authorities when they made their original
determinations on scope and like product is not before this Panel.

4.36 In response to a question from the Panel,22 the United States made the following clarification
concerning the application of Article 18.3 of the AD Agreement in the context of administrative
reviews:
4.37 The United States considers reviews under section 751(a) of the Tariff Act of 1930, as
amended (the “Act”), and section 353.22 of the regulations promulgated by the DOC (commonly
referred to as “administrative reviews”) to constitute “reviews of existing measures” within the
meaning of Article 18.3 of the Agreement on Implementation of Article VI of the General Agreement
on Tariffs and Trade 1994 (the “AD Agreement”). Administrative reviews contain elements of both
an Article 9.3 assessment proceeding (because they determine, inter alia, final liability for duties) and
an Article 11.2 review (because they alter the cash deposit rate and may lead to revocation).
Accordingly, the relevance of Article 18.3.1 to this case is unclear.
4.38 In the instant case, the third administrative review of the anti-dumping duty order on DRAMs
from Korea (for purposes of determining the amount of duties to be assessed on prior entries, the
estimated cash deposit to be required on future entries, and whether the order should be revoked
pursuant to section 353.25(a)) is subject to the AD Agreement by virtue of Article 18.3. Korea’s
scope challenge, however, is not directed at the administrative review but, rather, at the original
investigation. Indeed, Korea is challenging not a new decision on scope in the administrative review,
but an immutable aspect of the order which was adopted before the WTO Agreement took effect for
the United States.
4.39 Finally, the United States wishes to emphasize that Article 18.3 is an entry-into-force
provision. It is not intended to override the language of the other 17 articles by making all provisions
that apply to investigations applicable to reviews. Thus, Article 18.3 does not preempt the AD
Agreement’s distinction between investigations and other administrative proceedings.
3. Admissibility of Claims under Article XVI.4 of the Marrakesh Agreement Establishing
the World Trade Organization and Article 18.4 of the AD Agreement
(a) Objection of the United States
4.40 The United States in its oral statement at the second meeting of the Panel with the Parties
raised a preliminary objection questioning the admissibility of Korea's claims under Article XVI.4 of
the Marrakesh Agreement Establishing the World Trade Organization and Article 18.4 of the AD
Agreement. The following are the US arguments in support of its preliminary objection:
4.41 In its 10 July 1998 rebuttal submission, Korea raises several new claims to which the
United States objects. Korea’s claims regarding Article XVI:4 of the Marrakesh Agreement
Establishing the World Trade Organization and Article 18.4 of the AD Agreement are entirely new.
These new claims (i) were not consulted on, (ii) were not included in Korea’s panel request, and (iii)
heretofore, have not made an appearance in this dispute settlement proceeding. The dispute
settlement process under the AD Agreement and the DSU cannot (and does not) condone these types
of actions by Korea. It is settled law under the Appellate Body decisions in Bananas III and the India
Patents decisions that claims not raised in the request for the establishment of a panel are not within
the Panel’s terms of reference and must be dismissed.
(b) Response by Korea
4.42 In answer to a question by the Panel
23 and during the second meeting of the Panel with the
Parties, Korea made the following arguments in response to the US preliminary objection:

22 The Panel recalls that the question was: "Does the United States consider that 'administrative
reviews' constitute 'reviews of existing measures' within the meaning of Article 18.3 ADP. Why or why not?
Please address the relevance, if any, of footnote 21 and Article 18.3.1 to your answer."

4.43 Korea is not making a separate claim because a Member automatically violates Article 18.4
whenever a Member violates another provision of the AD Agreement. Korea takes the same position
with respect to claims under Article XVI.4 of the Marrakesh Agreement Establishing the World Trade
Organization.24
B. STANDARD OF REVIEW
(a) Submission by the United States
4.44 The United States submits that Korea seeks to retry the factual issues that were before the
DOC in the underlying administrative proceeding. The following are the arguments of the
United States in support of this submission:
4.45 Panel review is not a substitute for proceedings conducted by national investigating
authorities. Numerous panels have recognized that the role of panels is not to conduct a de novo
review of factual issues. In describing the role of panels when reviewing factual issues, the panel in
the Korea – Anti-Dumping Duties on Imports of Polyac etal Resins from the United States (Korean
resins) case stated, in part:
The Panel . . . should [not] substitute its own judgment for that of the KTC as to the
relative weight to be accorded to the facts before the KTC. To do so would ignore that
the task of the Panel was not to make its own independent evaluation of the facts before
the KTC to determine whether there was material injury to the industry in Korea but to
review the determination as made by the KTC for consistency with the Agreement,
bearing in mind that in a given case reasonable minds could differ as to the significance
to be attached to certain facts.25
4.46 The standard of review to be applied by this Panel is set forth in Article 17.6 of the AD
Agreement. In sub-paragraph “(i),” panels are instructed not to substitute their judgment for that of
the national investigating authorities:
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 panel might have reached a
different conclusion, the evaluation shall not be overturned ... .
26
4.47 Moreover, when applying this standard, Article 17.5(ii) directs the Panel to limit its review to
the facts that were before the DOC when it made its determination (i.e., the evidence contained in the
administrative record).
4.48 In reviewing legal questions that turn on th e proper meaning to be ascribed to the AD
Agreement, sub-paragraph “(ii)” of Article 17.6 states:
the panel shall interpret the relevant provisions of the Agreement in accordance with
customary rules of interpretation of public international law. Where the panel finds that

23 The Panel recall that the question was: "In response to a from the Panel, (Ex. ROK-84), Korea
states that the US "has violated Article 18.4" AD Agre ement . Is Korea raising a separate claim under Article
18.4? If so, please specify where this claim is identified in Korea's request for establishment (WT/DS99/2)."
24 The Panel notes that Korea made this last statement orally during the second meeting of the Panel
with the Parties.
25 Korea – Anti-Dumping Duties on Imports of Polyacetal Resins from the United States , BISD
40S/205, para. 227.
26 AD Agreement, art. 17.6(i).

a relevant provision of the Agreement admits of more than one permissible
interpretation, the panel shall find the authoritie s’ measure to be in conformity with the
Agreement if it rests upon one of those permissible interpretations.27
4.49 Thus, the relevant question in every case is not whether the challenged determination rests
upon the best or the “correct” interpretation of the AD Agreement, but whether it rests upon a
“permissible interpretation” (of which there may be many). If it does, then this Panel must uphold the
determination.
4.50 The United States, in its oral presentation at the first meeting of the Panel with the Parties,
further argued as follows:
4.51 Both Korea and the United States agree that the applicable standard of review in this dispute
is Article 17.6 of the AD Agreement. This standard of review governs the Panel’s review of
determinations by administrative agencies such as the DOC in this case. It relates to both factual
establishment and evaluation of the facts of the matter, as well as legal interpretation of the AD
Agreement.
(i) Article 17.6(i)
4.52 With respect to its assessment of factual matters before the administrative authorities,
Article 17.6(i) provides that the Panel shall do the following:
First: “determine whether the authorities’ establishment of the facts was proper”
This means that the Panel should determine whether the authorities followed procedures
for collecting, evaluating, and processing facts during their investigation which were
consistent with the requirements of the AD Agreement.
Second: determine whether the authorities’ “evaluation of those facts was unbiased and
objective”
This provision means that the Panel must evaluate whether (a) the authorities examined
all of the relevant facts before it, including facts which might detract from an affirmative
determination, (b) whether adequate explanation has been provided of how the
determinations made by the authorities are supported by facts in the record, and (c)
whether the authorities based their determinations on an examination of factors required
by the AD Agreement.
4.53 In making this evaluation, Article 17.6(i) directs the Panel not to substitute its judgement of
the facts for those of the authorities. There may be situations where the facts in a hotly-contested case
such as the one presented in this dispute could lead to more than one conclusion. Thus, there may
well be some facts lending support to Korea’s arguments that dumping is not likely. However, there
are also many facts -- indeed it is argued, the bulk of the evidence in this case -- supporting the
conclusion that dumping is likely. The significance of Article 17.6(i) is that it prohibits the Panel
from overturning the evaluation of the authorities as long as the “establishment of the facts was
proper” and the “evaluation was unbiased and objective.” Thus, if the process by which the domestic
authorities established the facts is consistent with the AD Agreement, and the authorities assessed all
of the evidence in the record, then the authorities’ determination must be upheld by the Panel if it is
supported by a factual basis in the record.
4.54 This interpretation of Article 17.6(i) is consistent with its text, as well as its object and
purpose, as well as with decisions of numerous GATT 1947 panels.

27 Id., art. 17.6(ii).

(ii) Article 17.6(ii)
4.55 Another important aspect of the standard of review is Article 17.6(ii) which addresses
procedures for assessing the interpretation of the relevant portions of the AD Agreement. The first
sentence of Article 17.6(ii) directs the panel to interpret the relevant provisions of the Agreement in
accordance with the customary rules of interpretation of public international law. In the context of
practice developed by the Appellate Body and panels, such a direction has meant the application, inter
alia, of the provisions of the Vienna Convention. In the typical case, a panel or the Appellate Body
has used the Vienna Convention as a tool for determining a single meaning for a particular WTO text.
However, Article 17.6(ii) reveals that the negotiators anticipated that it may well be possible for
Members’ authorities to interpret the text of pr ovisions of the AD Agreement in more than one
“permissible” way. In making the assessment whether there is more than one permissible way to
interpret an AD text, the panel could make use of the Vienna Convention to determine whether an
interpretation of a particular authority -- such as the United States in this dispute -- is permissible. If
the panel finds that the text is susceptible to more than one permissible meaning, then Article 17.6(ii)
provides that “the panel shall find the authorities’ measure to be in conformity with the Agreement if
it rests upon one of those permissible interpretations.”
4.56 Accordingly, Article 17.6(ii) is intended to pr ovide a certain flexibility -- where the language
was undefined or otherwise ambiguous -- for authorities to establish (or maintain) implementing
procedures. This is particularly the case such as the instant dispute where the key terms are
undefined, such as the terms “necessary” and “warranted” in Article 11.2.
4.57 The DOC’s decision not to revoke the anti-dumping duty order on DRAMs from Korea rests
upon a “permissible” interpretation of Article 11 of the AD Agreement that is based upon both the
ordinary meaning of the terms of Article 11, as well as their context and the general object and
purpose of the AD Agreement. Moreover, in considering whether the DOC’s determination rests
upon a “permissible” interpretation of the relevant WTO provisions, the Panel will discover that the
agency assembled a voluminous record. In fact, the DOC compiled an extensive record. The agency
then conducted a painstaking, fact-intensive review of that record, including all arguments presented
by Hyundai and LG Semicon, before deciding not to revoke the anti-dumping order on DRAMs from
Korea. Consistent with Article 17.6(i) of the AD Agreement, the facts of this case were properly
established and reasonably supported the determination made by the DOC. Pursuant to Article
17.6(i), the only question is whether the DOC’s establishment of the facts was “proper” and whether
its “evaluation of those facts was unbiased and objective.” If it was, then Article 17.6(i) of the AD
Agreement requires the Panel to uphold this determination.
(b) Rebuttal response by Korea
4.58 Korea makes the following arguments in rebuttal to the United States submission on
standard of review:
4.59 Unlike the other WTO agreements, the AD Agreement prescribes a standard of review. With
regard to review of facts, there is no significant difference in the views of Korea and the United States
regarding the appropriate standard of review. However, with regard to review of legal interpretations,
the standard proposed by the United States—that the Panel must uphold US interpretations unless
Korea proves that they are “forbidden”--finds no support in the text or interpretive assessments of
Article 17.6(ii) of the AD Agreement.
(i) In Reviewing Facts, the Panel Should Determine Whether a Reasonable, Unprejudiced
Person Would Have Found, Based on the Evidence Before the DOC, That the Facts Reasonably
Supported the Conclusions of the DOC.
4.60 The standard of review regarding assessment of facts is set out in Article 17.6(i) of the AD
Agreement:

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 panel might have reached a
different conclusion, the evaluation shall not be overturned.
4.61 This standard was interpreted by the panel in the recent decision in Guatemala -- Anti-
dumping Investigation Regarding Portland Cement from Mexico.28 There, at paragraphs 7.54 through
7.57, the Panel cited as sensible and consistent with the standard of review under Article 17.6(i) the
approach spelled out by the Panel in United States -- Measures Affecting Softwood Lumber from
Canada.29 As set forth by the Guatemala -- Cement panel:
[W]e are to examine whether the evidence relied on by the Ministry was sufficient, that
is, whether an unbiased and objective investigating authority evaluating that evidence
could properly have determined that sufficient evidence of dumping, injury, and causal
link existed to justify initiating the investigation.30
4.62 There is no significant dispute between Korea an d the United States regarding this standard,
but there is total disagreement as to its application in this dispute. Korea establishes that the DOC
based its determination not to revoke on unverified information and mere conjecture from the US
petitioner, while failing to consider fairly and objectively verified and verifiable information
submitted by the Korean Respondent companies. Korea is confident that the Panel will share its view
that, given the evidence in the DOC’s record, an unbiased and objective person would have concluded
that, even assuming that DOC’s criteria for revocation were consistent with the United States’ WTO
obligations, the Korean Respondent companies satisfied them. Korea does not accept that the DOC’s
revocation criteria are permissible under the WTO, but even assuming for the sake of argument that
they are, the United States made a determination that is not supportable under the Article 17.6(i)
standard of review.
(ii) In Reviewing Legal Interpretations, the Panel Should Follow the Interpretive Rules of the
Vienna Convention; There is no Basis for virtually total deference to the DOC, as Argued by the
United States.
4.63 The standard of review regarding legal interpretation is set out in Article 17.6(ii) of the AD
Agreement:
[T]he panel shall interpret the relevant provisions of the Agreement 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.
4.64 The United States, focusing on the second sentence of this provision, argues that the legal
interpretation of the United States regarding Article 11 of the AD Agreement must be upheld unless it
is “forbidden.”
4.65 The United States ignores the first sentence of Article 17.6(ii), which mandates the Panel in
the first instance to interpret Article 11 (and the other provisions of the AD Agreement at issue in this
dispute) “in accordance with customary rules of interpretation of public international law” ( i.e., in
accordance with Articles 31 and 32 of the Vienna Convention).

28 WT/DS60/R (dated 19 June 1998).
29 BISD 40S/358, page 490, para. 335 (27 October 1993).
30 WT/DS60/R at para. 7.57 (footnote omitted).

4.66 One of the world’s leading GATT/WTO schol ars, Professor John Jackson, has analyzed
Article 17.6(ii) in depth. 31 He decisively rejects the extremely deferential standard of review
advocated by the United States, based on a thorough review of Article 17, the Vienna Convention and
the reasons cited in support of a deferential review standard. First, he establishes that the purpose of
the Vienna Convention is to resolve ambiguities in the text of an agreement. Thus, after Article 31
(and, where appropriate, Article 32) is applied, there will be no lingering ambiguities. The second
sentence of Article 17.6(ii) will rarely come into play because there usually will not be “more than
one permissible interpretation” of Article 11 (or any other provision of the AD Agreement).
4.67 Second, Professor Jackson demolishes the intellectual underpinnings for application of a
deferential standard of review. At pages 202 through 211 of his article, he critiques the applicability
in the WTO context of the US court decision that is widely recognized as the model used by the US
negotiators in proposing what became Article 17.6(ii)-- Chevron U.S.A., Inc. v. Natural Resources
Defense Council, Inc.
32 Professor Jackson demonstrates that none of the three bases for deference to
administrative agencies that may apply to domestic legal proceedings is relevant in the context of
WTO panel reviews. First, unlike domestic legal proceedings, in which an administrative agency has
“expertise” regarding its particular regulatory area, no WTO Member has any greater expertise
relative to other WTO Members regarding the interpretation and application of provisions of the
WTO agreements. In Professor Jackson’s words:
Countries party to an anti-dumping dispute are not delegates whose technical expertise
specially qualifies them to make authoritative interpretive decisions. They are, rather,
interested parties whose own (national) interests may not always sustain a necessary
fidelity to the terms of international agreements.
33
4.68 Next, Professor Jackson demonstrates that the so-called “democracy” rationale is
inapplicable. (This is based on the principle that because federal judges in the United States are not
elected, judicial deference to agency decisions, which flow from decisions taken by elected presidents
and legislators, enhances the legitimacy of administrative decisionmaking.) National authorities are
not accountable to the WTO Membership at large; indeed, WTO panels are the Members’ delegates.
Thus, the concept of deference to those accountable to the populace has no counterpart in the WTO
context.
4.69 Finally, Professor Jackson dissects and rejects the “efficiency” rationale of Chevron--that a
single interpretation by the agency charged to administer a law is preferable to the potential of
multiple interpretations by different courts. At page 210 of his article he shows that, in the WTO
context, deference to national authorities would lead to the very multiplicity of interpretations that the
“efficiency” rationale was meant to prevent:
Whereas in the US administrative law setting there is typically little danger of multiple
interpretations of the statutory language by several different agencies, in the
GATT/WTO setting multiple interpretations of agreement provisions is precisely one of
the problems that panel review is designed to ameliorate.
34
4.70 This extensive analysis of Professor Jackson’s article proves the intellectual deficiencies of
the deferential standard of review advocated by the United States. Because the virtually total
deference advocated by the United States, in addition to not being mandated by the text of
Article 17.6(ii), is intellectually unsound, the Panel should reject it. The Panel should, as commanded
by the first sentence of Article 17.6(ii), apply the interpretive rules of the Vienna Convention to the

31 See Steven P. Croley & John H. Jackson, WTO Dispute Procedures, Standard of Review, and
Deference to National Governments, 90 AM. J. INT’L L. 193 (1996) (Ex. ROK-88).
32 467 US 837 (1984) (Ex. ROK-89).
33 90 AM. J. INT’L L. at 209.
34 Id. at 210.

legal interpretations involved in this dispute. When the Panel does so, Korea is confident that it will
agree with Korea that the United States has violated its obligations under Articles 2, 5.8, 6, 11.1 and
11.2 of the AD Agreement.
(c) Rebuttal response by the United States
4.71 The United States made the following arguments in its second oral statement before the
Panel:
4.72 With one possible exception, there seems to be agreement between Korea and the United
States over the standard of review to be applied by this Panel to factual issues. That exception
concerns the panel’s report in the Guatemala Cement case, which Korea quotes with approval in its
rebuttal submission. At paragraph 57 (Findings) and elsewhere, the panel in the Guatemala Cement
case articulates the standard as “whether an unbiased and objective investigating authority evaluating
that evidence could properly have determined ...” (emphasis added by the United States). While the
panel purports to be following the standard in Lumber, which it quotes in the preceding paragraph, we
believe the panel inserts the word “properly” which suggests a higher degree of second-guessing on
the part of the panel than either Lumber or Article 17.6(i) would seem to contemplate. The panel may
have thought it was simply incorporating the word “proper” from the phrase “establishment of the
facts was proper” in 17.6(i); however, if that was the intention, we respectfully submit that this was a
mistake because that phrase deals with questions like whether the authorities improperly refused to
allow certain information to be on the record.
4.73 With respect to the assessment of factual matters before an investigating authority,
Article 17.6(i) directs panels to, first, “determine whether the authorities’ establishment of the facts
was proper.” This means that the Panel should determine whether the DOC followed procedures for
collecting, evaluating, and processing facts during its administrative proceeding which were
consistent with the requirements of the AD Agreement. Second, panels must determine whether the
authorities’ “evaluation of those facts was unbiased and objective.” This provision means that the
Panel must evaluate whether (a) the DOC examined all of the relevant facts before it, including facts
which might detract from the challenged determination, (b) whether adequate explanation has been
provided of how the determination made by the DOC is supported by facts in the record, and (c)
whether the DOC based its determination on an examination of factors required by the AD
Agreement.
4.74 It must be emphasized, that Article 17.6(i) dir ects the Panel not to substitute its judgment of
the facts for those of the investigating authority. There may be situations where the facts in a hotly
contested case, such as the one here, could lead to more than one conclusion. Thus, there may be
some facts lending support to Korea’s arguments. However, there are also many facts – indeed, we
would argue, the bulk of the evidence – which s upport the determination made by the DOC in this
case. The significance of Article 17.6(i) is that it prohibits the Panel from overturning the evaluations
of the DOC as long as the “establishment of the facts was proper” and the “evaluation was unbiased
and objective.” The United States respectfully submits that this interpretation of Article 17.6(i) is
consistent with its text (as well as its object and purpose), and with the decisions of numerous
GATT 1947 panels.
C. B
URDEN OF PROOF
(a) Submission by the United States
4.75 The United States submits that Korea has the burden of establishing a violation of a
provision of a WTO agreement. The following are the arguments of the United States in support of
this claim:

4.76 The fact that the complainant has the burden of proof has been made clear by the Appellate
Body in the Wool Shirts case when it stated:
[W]e find it difficult, indeed, to see how any system of judicial settlement could work if
it incorporated the proposition that the mere assertion of a claim might amount to proof.
It is, thus, hardly surprising that various international tribunals, including the
International Court of Justice, have generally and consistently accepted and applied the
rule that the party who asserts a fact, whether the claimant or the Respondent, is
responsible for providing proof thereof. Also, it is a generally-accepted canon of
evidence in civil law, common law and, in fact, most jurisdictions, that the burden of
proof rests upon the party, whether complaining or defending, who asserts the
affirmative of a particular claim or defence.
35
4.77 This principle is not affected by Korea’s incorrect assertion that anti-dumping measures
constitute “derogations” from alleged free-trade principles of the WTO. 36 To the contrary, the right
conferred by Article VI and the AD Agreement to impose anti-dumping measures forms part of the
carefully constructed balance of rights and obligations that make up the WTO free-trade regime. To
diminish this right, as suggested by Korea, by characterizing Article VI and the AD Agreement as
“derogations” would constitute an impermissible failure to respect this balance.
4.78 Even if anti-dumping measures could be described as a derogation from, or an “exception” to,
such alleged free-trade principles, this would not affect the assignment of the burden of producing
evidence of a violation. As the Appellate Body stated in the Hormones case:
The general rule in a dispute settlement proceeding requiring a complaining party to
establish a prima facie case of inconsistency with a provision of the SPS Agreement
before the burden of showing consistency with that provision is taken on by the
defending party, is not avoided by simply describing that same provision as an
"exception". In much the same way, merely characterizing a treaty provision as an
"exception" does not by itself justify a "stricter" or "narrower" interpretation of that
provision than would be warranted by examination of the ordinary meaning of the actual
treaty words, viewed in context and in the light of the treaty's object and purpose, or, in
other words, by applying the normal rules of treaty interpretation.
37
4.79 More generally, there simply is no justification for treating anti-dumping measures as
derogations or exceptions. The case typically cited by proponents of this view is the Pork from
Canada case, in which the panel characterized Article VI:3 of GATT 1947, which authorized the
imposition of countervailing duties, “as an exception to basic principles of the General Agreement had
to be interpreted narrowly and that it was up to the United States, as the party invoking the exception,
to demonstrate that it had met the requirements of Article VI:3.” 38 However, the panel’s statement
was conclusory in nature, and the panel cited no authority for the proposition that Article VI was an
“exception.” Moreover, this aspect of the panel’s decision was dicta, because nothing in the remainder
of the panel report indicates that the panel’s characterization of Article VI:3 as an “exception”
influenced the panel’s analysis of the matter.
4.80 Perhaps more significantly, other than Pork from Canada , of the fourteen panel reports
following the Wine and Grape Products case that addressed Article VI of GATT 1947 or the Tokyo
Round agreements based on Article VI, none of the panels (1) found that Article VI was an exception,

35.WT/DS33/AB/R, at 14 (footnote omitted).
36 The Panel notes that this argument by Korea is set out at paragraph 4.90 of this report.
37 EC Measures Concerning Meat and Meat Products (Hormones) , WT/DS26/AB/R, Report of the
38 United States - Countervailing Duties on Fresh, Chilled and Frozen Pork from Canada , DS7/R,
Report of the Panel adopted 11 July 1991, BISD 38S/30, para. 4.4.

(2) imposed the “burden of proof” on the party imposing anti-dumping or countervailing duties, or (3)
expressly indicated a requirement to interpret Article VI in a narrow manner. In all of these disputes,
the complaining party complied with its burden of producing prima facie evidence of a violation, and
the defending party responded with argument and other evidence.
4.81 Moreover, in the only case thus far to consider Article VI of GATT 1994, both the panel and
the Appellate Body refrained from treating Article VI as an “exception.” In the Desiccated Coconut
case, the Philippines made the “Article VI-as-exception” argument in support of its claim that it could
challenge Brazil’s countervailing duty order as a violation of Article VI of GATT 1994. 39 Brazil, in
turn, argued that Article VI could not be applied independently of the SCM Agreement, and that
under the transition rules of the SCM Agreement, the Brazilian determination was not subject to the
SCM Agreement. If the Philippines were correct that Article VI is an exception, then both the panel
and the Appellate Body presumably would have fo cused on the violation of the “core rules” of
GATT 1994 (Articles I and II) that allegedly occurred after 1 January 1995, and they would have
placed the burden on Brazil to establish that its determination was not subject to Article VI. However,
neither the panel nor the Appellate Body accepted the Philippines’ “Article VI-as-exception”
argument.
40
4.82 Article VI and the AD Agreement do not constitute derogations or exceptions from the rest of
the WTO framework. Even if they did, they would be subject to the same rules of interpretation as
any other provision of the WTO agreements, and the burden of producing evidence of a violation still
would rest with Korea as the complaining party.
(b) Rebuttal response by Korea
4.83 Korea makes the following arguments in rebuttal to the US position on burden of proof:
4.84 Korea’s view of the burden of proof in this case is reasonable, balanced and accurate. It is
firmly rooted in the decision of the Appellate Body in United States -- Measure Affecting Imports of
Woven Wool Shirts and Blouses from India .41 First, Korea initially bears the burden of showing the
US violations--it is for Korea “to submit a prima facie case of violation.” 42 In response, the United
States must rebut Korea’s presentation--it is “for the United States to convince the Panel that, at the
time of its determination it had respected” its WTO obligations. 43 (The United States has chosen not
to directly counter Korea’s Article 11 arguments.) Second, Korea need only demonstrate that the
United States violated a specific provision. In doing so here, Korea need only present an
interpretation of the specific provision, e.g., Article 11, that shows the precise nature of the US
violation. Contrary to the assertions of the United States, Korea is not obliged to set forth a “Treatise
on the Law of” each of the provisions Korea has demonstrated that the United States has violated. In
this case, neither Korea, nor the Panel, need to define precisely the location of the “line of violation”
which the United States obviously has crossed. Rather, a demonstration that the United States has
crossed that line is sufficient. If a prosecutor can prove that a defendant murdered the victim, does the
defendant go free because the prosecutor cannot prove the precise moment in time that the defendant
murdered the victim? Certainly not. The violation is established, and that is sufficient for a finding of
guilt.

39 WT/DS22R, Report of the Panel, as modified by the Appellate Body, adopted 20 March 1997,
para. 73 and 85.
40 Id.; and WT/DS22/AB/R.
41 WT/DS33/AB/R (25 April 1997), pages 15-20.
42 Id., page 16 (quoting United States -- Measure Affecting Imports of Woolen Shirts and Blouses from
43 Id.

D. CLAIMS UNDER ARTICLE 11 OF THE AD AGREEMENT AND ARTICLE VI OF GATT 1994
1. Limitations Imposed by Article VI of GATT 1994 and Article 11 of the AD Agreement
(a) Claim raised by Korea
4.85 Korea claims that by virtue of Article VI of GATT 94 and Article 11 of the AD Agreement, a
Member may impose a duty only to offset dumping that is causing injury and may maintain a duty
only as long and as to the extent necessary to offset dumping that is causing injury. The following are
Korea's arguments in support of this claim:
4.86 Article VI of the General Agreement sets forth the general restrictions and procedures
regarding the ability of a Member to impose and maintain anti-dumping duties. Paragraph 1 of
Article VI defines and condemns dumping that is causing or threatening material injury to a domestic
industry. Paragraph 2 allows a Member to offset or prevent dumping that is causing or threatening
injury by imposing a duty in the amount of the margin of dumping. And Paragraph 6(a) establishes
the following limitation on a Member’s ability to impose or maintain a duty, stressing that the
prohibition of dumping is limited to dumping that is causing or threatening injury:
No contracting party shall levy any anti-dumping . . . duty on the importation of any
product of the territory of another contracting party unless it determines that the effect of
the dumping . . . is such as to cause or threaten material injury to an established domestic
industry, or is such as to retard materially the establishment of a domestic industry.
4.87 Article 11 of the AD Agreement further specifies requirements to achieve the goal of limiting
the duration of anti-dumping duties.
4.88 According to Paragraph 1:
An anti-dumping duty shall remain in force only as long as and to the extent necessary to
counteract dumping which is causing injury.
4.89 To maintain an anti-dumping duty, a Member must establish three elements: that the
responding company (i) is dumping and (ii) thereby causing (iii) injury to a domestic industry. A
GATT panel reached a similar conclusion regarding Article 9 of the Tokyo Round Anti-Dumping
Code, the predecessor of Article 11 of the AD Agreement. In Swedish Stainless Steel Plate, the panel
found that “anti-dumping duties were temporary and remedial in nature,” and rejected the US
argument to the contrary.
44 Specifically, the panel concluded: “Article 9.1 obliged Parties to the
Agreement not to maintain anti-dumping duties when such duties were no longer necessary to
counteract [i] dumping which was [ii] causing [iii] injury.” 45 The United States refused to allow the
adoption of this decision; however, the panel’s interpretation is unassailable.
4.90 The panel’s conclusion is the clearest statement imaginable of the limits of a Member’s
authority to impose anti-dumping duties. It demonstrates, in clear, certain terms, that anti-dumping
duties are a derogation from the main thrust of the WTO regime--which is to promote free trade--by
clearly defining the temporal limits of anti-dumping duties.46 In other words, when injurious dumping
ends, so must the duty.
4.91 Paragraph 2 of Article 11 of the AD Agreement further specifies the application of the general
rule set forth at Paragraph 1. It provides:

44 See United States-Anti-Dumping Duties on Imports of Stainless Steel Plate from Sweden (24
45 Id. at para. 223.
46 See id. at para. 232.

The authorities shall review the need for the continued imposition of the duty, where
warranted, on their own initiative or, provided that a reasonable period of time has
elapsed since the imposition of the definitive anti-dumping duty, upon request by any
interested party which submits positive information substantiating the need for a review.
Interested parties shall have the right to request the authorities to examine whether the
continued imposition of the duty is necessary to offset dumping, whether the injury would
be likely to continue or recur if the duty were removed or varied, or both. If, as a result
of the review under this paragraph , the authorities determine that the anti-dumping duty
is no longer warranted, it shall be terminated immediately. (Emphasis added by Korea.)
4.92 The first sentence of Paragraph 2 requires authorities to conduct reviews both: (i) “where
warranted” “on their own initiative”; or (ii) “upon request” supported by positive information. The
second sentence requires authorities to provide parties the right to request examination of whether
dumping is occurring, whether injury would continue if the duty were removed or varied or both. The
third sentence requires authorities to terminate immediately any duty that is no longer warranted.
4.93 Each of the three sentences that compose Paragraph 2 is a directive commanding certain
conduct by administering authorities47 to effect the general rule set forth in Paragraph 1. Paragraph 1
is the basic or primary provision of Article 11. It states a general rule limiting the maintenance of
anti-dumping duties. Paragraph 2 then sets forth specific administrative requirements to achieve the
general directive of Paragraph 1. Thus, the provisions of Paragraph 2 must be interpreted as further
establishing and specifying the requirements of Paragraph 1 and Paragraph 2 must be interpreted so as
to give life to Paragraph 1. 48 Accordingly, in light of Paragraph 1, Paragraph 2 provides a set of
procedures to be followed to ensure that a duty is not applied when it is no longer necessary to offset
dumping that is causing injury, e.g., where, as in this case, a Respondent is found not to have been
dumping.
4.94 Under Paragraph 1 of Article 11, to maintain the anti-dumping duties in this case, the US
Government would have had to establish three elements: (i) that a product was still being dumped
and (ii) that the dumping was causing (iii) injury to the domestic industry.

47 Korea notes that Footnote 22 to Article 11.3 does grant authorities the quite limited discretion in
“sunset” reviews to maintain a duty if, based on the most recent retrospective assessment, no margin is found.
The footnote is not relevant to this proceeding, because this is not a “sunset” review covered by Article 11.3
and, even if it were, the U.S. authorities found no margins for three consecutive years.
48 See United States-Anti-Dumping Duties on Imports of Stainless Steel Plate from Sweden
(24 February 1994), ADP/117, para. 224 (unadopted).
Korea notes that the WTO Appellate Body and GATT panels have found that Paragraph 1 of Article III
of the General Agreement is the primary provision of Article III and, thus, guides the interpretation and
application of the remaining paragraphs of Artic le III. For example, the Appellate Body in Japan-Taxes on
Alcoholic Beverages stated: “Consequently, the Panel is correct in seeing a distinction between Article III:1,
which ‘contains general principles’, and Article III:2, which ‘provides for specific obligations regarding internal
taxes and internal charges’. Article III:1 articulates a general principle that internal measures should not be
applied so as to afford protection to domestic production. This general principle informs the rest of Article III.”
WT/DS8/AB/R, pp. 17-18 (4 October 1996) (citation omitted). Relevant GATT precedent includes the Report
of the Panel in United States-Measures Affec ting Alcoholic and Malt Beverages , which stated: “The basic
purpose of Article III is to ensure, as emphasized in Article III:1 , ‘that internal taxes and other charges, and
laws, regulations and requirements affecting the internal sale, purchase, transportation, distribution or use of
products . . . should not be applied to imported or domestic products so as to afford protection to domestic
production’.” BISD 39S/206, 276, para. 5.25 (19 June 1992) (emphasis added). Because Article III:1 states the
purpose of Article III, all other provisions of Article III must be interpreted according to Article III:1. The Panel
in United States-Measures Affecti ng Alcoholic and Malt Beverages “considered that the . . . purpose of Article
III has to be taken into account in interpreting the term ‘like products’” in terms of Article III:2. Id. The Panel
in United States-Section 337 of the Tariff Act of 1930 rejected an interpretation of Article III:4 that would
“defeat the purpose of Article III, which is to ensure that internal measures ‘not be applied to imported or
domestic products so as to afford protection to domes tic production’ (Article III:1).” BISD 36S/345, 385,
para. 5.10 (7 November 1989).

4.95 However, the United States, itself, determined for over three consecutive years that the
product was not being dumped. 49 No dumping existed; and no dumping means no injury due to
dumping and obviously, no causal relationship between the two non-existent conditions.
4.96 Nonetheless, the DOC followed its regulations in this case and maintained the anti-dumping
duties after it found for three consecutive reviews that no dumping was occurring. Therefore, as
applied in this case, the DOC’s regulations and practices violated the obligations of the United States
under Article VI of the General Agreement and Article 11.1 of the AD Agreement.
4.97 The United States also violated Paragraph 2 of Article 11. Paragraph 2 provides that an
administering authority must conduct a review upon request by an interested party after a reasonable
time elapses and must revoke the duty “immediately” if continued imposition of the duty is not
necessary to offset dumping that is causing injury. For three consecutive years, the DOC found that
Hyundai and LG Semicon were not dumping. No dumping having been found, the continued
imposition of the duty was not “necessary to offset dumping.” But, nonetheless, the DOC, following
its regulations, failed to terminate the duties immediately. Thus, on their face and as applied, the
DOC’s regulations and practices violate Article 11.2 of the AD Agreement and Article VI of the
General Agreement.
4.98 Paragraph 2 of Article 11 requires Members to find that “the continued imposition of the
[anti-dumping] duty is necessary to offset dumping.” However, the DOC maintained the duty without
making this finding.
4.99 The DOC’s regulations depart from the requirements of Article 11. Under its regulations the
DOC may revoke only if a Respondent meets th ree requirements, one of which is the “no
likelihood/not likely” requirement. In the Thir d Annual Review, the DOC found that Respondents
had not met the “no likelihood/not likely” requirement, but this finding cannot serve as the basis for
refusing to revoke under Article 11. The DOC failed to find that “the continued imposition of the
duty is necessary to offset dumping,” as Article 11 requires. Thus, the DOC violated the second
sentence of Article 11 (and the third sentence, which requires termination where the Member does not
find that continuation is necessary and, thus, finds that the duty is “no longer warranted”).
50
(b) Response by the United States
4.100 The following are the United States' arguments in response to Korea's claim:

49 See the three Final Results--61 Fed. Reg. 20216 (6 May 1996) (Ex. ROK-18) (amended by 61 Fed.
Reg. 51410 (2 October 1996) and 62 Fed. Reg. 2654 (17 January 1997) (Ex. ROK-51)); 62 Fed. Reg. 965
(7 January 1997) (Ex. ROK-20) (amended by 62 Fed. Reg. 18742 (17 April 1997) (Ex. ROK-52)); 62 Fed. Reg.
39809 (24 July 1997) (Ex. ROK-3).
50 The Panel notes that Korea does not claim any inconsistencies concerning Section 353.25(a)(2)(i) of
the DOC regulations (the three years of no dumping requirement). At the first meeting of the Panel with the
Parties the Panel asked: "Does Korea consider that a finding of no-dumping for a three-year period is
significant for the purpose of its interpretation of Article 11.2 of the ADP Agreement, or would Korea adopt the
same interpretation if no-dumping had been found for only e.g. one or two years?" Korea responded to this
question as follows:
In Korea’s view, 3.5 years is not a clear dividing line. Rather, 3.5 years of no dumping (no
injury and no causation) is far beyond whatever line is established by Paragraphs 1 and 2 of
Article 11. Thus, in the Government’s view, it is not necessary for either Korea or the Panel to
determine precisely where the line is, but merely to know and hold that maintaining a definitive
duty after finding no dumping for 3.5 years is beyond the pale.

4.101 Korean producers have a history of dumping DRAMs in the United States. 51 The principal
issue in this case is whether the DOC was required to revoke the anti-dumping order maintained by
the United States on DRAMs from Korea when Respondents stopped dumping for three consecutive
years.
4.102 Korea believes this obligation can be found in Article 11 of the AD Agreement and Article VI
of GATT 1994. This belief is not grounded in an analysis of these agreements which relies upon
customary international rules of treaty interpretation.
4.103 The United States agrees that WTO Members may not assess (or “levy”) anti-dumping duties
on imports if they are not dumped. This explains why the United States did not assess anti-dumping
duties on merchandise produced by Respondents that entered during the period covered by the third
administrative review (or during the period covered by the first two administrative reviews, for that
matter). In fact, the so-called “retrospective” assessment system maintained by the United States,
under which duties are not collected upon importation but only after a determination of dumping,
seeks to guarantee this result.
 Hence, this is not the issue presented by Korea’s submission. The
fundamental point on which the United States and Korea differ is whether Article 11 and Article VI
required the DOC to revoke the anti-dumping order on DRAMs from Korea as soon as Respondents
went three consecutive years without dumping. The United States believes that Korea has failed to
meet its burden of producing evidence of a violation because there is no evidence. Nothing in
Article VI or the AD Agreement supports Korea’s argument. Indeed, a proper analysis of Article 11
leads to exactly the opposite conclusion.
4.104 Dumping is a pernicious trade practice which is to be “condemned” if it causes or threatens
material injury to an industry in the importing country.52 In 1955, a Working Party report adopted by
the CONTRACTING PARTIES to GATT 1947 instructed signatories to “refrain from encouraging
dumping ... by [their] private commercial enterprises.”53
4.105 The purpose of Article VI and the AD Agreement is to ensure that relief is made available to
producers adversely affected by dumping. Under th ese provisions, a broad framework of rights and
obligations has been created which regulates the determination of dumping and the application of
remedial anti-dumping duties. Within this framework, WTO Members are free to adopt national
standards governing the determination of dumping and the application of anti-dumping duties, as long
as such measures rest upon a “permissible” interpretation of the AD Agreement.
54
4.106 Anti-dumping duties are not meant to be permanent measures. The 1959 Report of the Group
of Experts on Anti-dumping and Countervailing Duties provided: “[i]t was generally agreed that anti-
dumping duties should remain in place only so long as they were genuinely necessary to counteract
dumping which was causing or threatening material injury to a domestic industry.”
55
4.107 In the 1979 AD Agreement, Article 9 contained two paragraphs which described the
obligation of signatories regarding the duration of anti-dumping duties. The first paragraph
established the fundamental proposition that “anti-dumping duties shall remain in force only as long
as, and to the extent necessary to counteract dumping which is causing injury.”
56 The second
paragraph provided a procedural mechanism by which signatories were to ensure the temporary and

51 See Final Determination of Sales at Less Than Fair Value: Dynamic Random Access Memory
Semiconductors of One Megabit and Above From the Republic of Korea, 58 Fed. Reg. 15467(1993) ("DRAM
LTFV") (Ex. USA-4).
52 GATT 1994, Article VI:1.
53 GATT, adopted on 3 March 1955, 3d Supp. BISD 223, para. 4.
54 AD Agreement, art. 17.6(ii).
55 Adopted 13 May 1959, BISD 8S/151-152, para. 23.
56 1979 AD Agreement, art. 9:1.

remedial character of anti-dumping duties as expressed in Article 9:1. Specifically, Article 9:2
provided:
The investigating authorities shall review the need for the continued imposition of the
duty, where warranted, on their own initiative or if any interested party so requests and
submits positive information substantiating the need for review.57
4.108 The only case ever to turn on an interpretation of Article 9 was Plate from Sweden which
involved a challenge by Sweden to a 1987 decision by the ITC not to review (pursuant to section
751(b) of the Act) a determination of material injury made in 1973. 58 In that case, the panel
determined that Article 9:1, by itself, did not constitute an independent legal ground pursuant to which
a signatory was obliged to review the continued need for anti-dumping duties. 59 This followed, the
panel reasoned, from:
The silence of Article 9:1 regarding the means by which a Party was to determine when
an anti-dumping duty was no longer necessary within the meaning of that provision,
together with the mandatory review procedure specifically provided for in Article 9:2,
the purpose of which could only be understood in light of the requirement embodied in
Article 9:1, contradicted the view that Article 9:1 by itself obliged Parties to take specific
procedural steps to satisfy themselves as to the continued need for the imposition of an
anti-dumping duty distinct from those required under Article 9:2.
60
4.109 In the Uruguay Round of multilateral trade negotiations, the basic outline of Article 9 was
preserved. Renumbered as Article 11 of the AD Agreement, the first paragraph of the new article is
identical to Article 9:1 of the 1979 AD Agreement. Paragraph one continues to state a “general rule”
regarding the duration of anti-dumping duties.
4.110 Paragraph 2 (in new Article 11) has been expanded. It still provides the “specific obligation”
to examine whether the continued imposition of anti-dumping duties is “necessary” within the
meaning of Article 11.1. However, now, paragraph 2 sets forth in greater detail the administrative
procedures needed to fulfill this objective. In addition, the paragraph concludes with a new sentence
which states that “[i]f, as a result of the review under this paragraph, the authorities determine that the
anti-dumping duty is no longer warranted, it shall be terminated immediately.”61
4.111 Perhaps the biggest change occasioned by the Uruguay Round in this area is the addition of a
third paragraph to Article 11. This is the so-called “sunset” provision which requires WTO Members
to revoke all anti-dumping measures after five years unless “the authorities determine, in a review
initiated before that date on their own initiative or upon a duly substantiated request made by or on
behalf of the domestic industry within a reasonable period of time prior to that date, that the expiry of
the duty would be likely to lead to continuation or recurrence of dumping and injury.”
62
4.112 Korea never explains how the language of Article 11, or for that matter any other aspect of
the AD Agreement, supports its argument. Instead, it simply repeats that if there is no dumping there
can be no injury, and if there is no injury, there can be no duty. This can not substitute for a reasoned
analysis of Article 11 which is based upon the customary international rules of treaty interpretation
prescribed by Article 17.6(ii) of the AD Agreement.

57 Id. art. 9.2.
58 United States - Anti-Dumping Duties on Imports of Stainless Steel Plate from Sweden,
ADP/117,Report of the Panel issued 24 February 1994 (unadopted), (" Plate from Sweden").
59 Id. para. 228.
60 Id. para. 226.
61 Id. (emphasis added by the United States).
62 AD Agreement, art. 11.3.

4.113 In the Reformulated Gasoline case, the Appellate Body concluded that the fundamental rule
of treaty interpretation set out in Article 31(1) of the Vienna Convention has “attained the status of a
rule of customary or general international law.” 63 In the Japan Taxes case, the Appellate Body said
the same thing about the supplementary means of tr eaty interpretation set forth in Article 32 of the
Vienna Convention.64
4.114 Article 31 of the Vienna Convention provides that the words of a treaty must form the starting
point for the process of interpretation. In this regard, words must be interpreted according to their
“ordinary meaning” taking into account their “context” ( i.e., other provisions of the treaty) and the
“object and purpose” of the agreement. 65 While recourse to a treaty’s object and purpose is
permissible, it may not override the clear meaning of the text. As the Appellate Body in the Japan
Taxes case recognized, a “treaty’s ‘object and purpose’ is to be referred to in determining the meaning
of the ‘terms of the treaty’ and not as an independent basis for interpretation.”66
4.115 When the text of a treaty either leaves the meaning ambiguous or obscure, or leads to a
manifestly absurd or unreasonable result, Article 32 of the Vienna Convention authorizes recourse to
further means of interpretation, including a treaty’s negotiating history. “Moreover, such recourse
may be had to verify or confirm a meaning that emerges as a result of the textual approach.”67
4.116 As previously noted, nothing in the text of Articles 11.1 or 11.2 mandates revocation of an
anti-dumping order as soon as a Respondent stops dumping. First, as the panel in Plate from Sweden
found, the obligation to review the continued need for an anti-dumping order finds expression in the
language of Article 11.2, not Article 11.1.68 Secondly, footnote 22 to Article 11.3 expressly states that
an anti-dumping duty order may be maintained beyond the initial five-year period even when a
Respondent has not dumped during the “most recent assessment proceeding.” 69 Thirdly, this
interpretation of Article 11 is supported by the express requirement in Article 11.2, which did not
appear in Article 9 of the 1979 AD Agreement, that interested parties wait “a reasonable period of
time” before requesting a revocation review. 70 This change in language suggests that national
investigating authorities may require, before initiating a revocation review, a “reasonable period of
time” to elapse during which no dumping is taking place. Finally, this construction of Articles 11.1
and 11.2 comports with the object and purpose of the AD Agreement, which is to provide a
framework within which Members may address injurious dumping through remedial duties.
4.117 Korea also cannot interpret the language of Article 11 to amount to a requirement that anti-
dumping orders must be revoked whenever a Respondent goes three years without dumping. While
the first two paragraphs do discuss the “need” for an order and whether an order is “necessary” or

63 United States – Standards for Reformulated and Conventional Gasoline , WT/DS2/AB/R, Report of
the Appellate Body adopted 20 May 1996, at 17.
64 Japan – Taxes on Alcoholic Beverages , WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, Report
of the Appellate Body adopted 1 November 1996, at 10.
65 See, e.g., Competence of the General Assembly for the Admission of a State to the United Nations
(Second Admissions Case), [1950], ICJ Rep., at 8 (“The Court considers it necessary to say that the first duty of
a tribunal which is called upon to interpret and apply the provisions of a treaty, is to endeavour to give effect to
them in their natural and ordinary meaning in the context in which they are occur.”)
66 WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, at 12 n. 20.
67 I. Brownlie, Principles of Public International Law, 4th ed. (Clarendon Press, 1990), p. 630
("Brownlie").
68 Plate from Sweden , ADP/117, para. 224-26. (arguing that “The United States Violated Paragraph 1
of Article 11").
69 Id., art. 11.3 n. 22. Moreover, if zero dumping margins do not require revocation under
Article 11.3's sunset provisions (which require revocation unless national authorities find a likelihood of
dumping and injury), then zero dumping margins should not require revocation under Article 11.2 (where there
is no such requirement).
70 AD Agreement, art. 11.2.

“warranted,” these words are never defined, and dictionary definitions are not instructive.71 Article 11
simply does not provide that investigating authorities must revoke an order solely because there have
been three years of no dumping. Inserting such a requirement into the text would be an impermissible
interpretation of Article 11. Moreover, consulting the AD Agreement’s negotiating history confirms
this result. This history reveals that Korea and several other Members, including Japan and India,
strongly supported a “sunset provision” in the AD Agreement which would have required the
automatic revocation (or “termination”) of all anti-dumping measures within as little as three years.
72
These types of proposals were rejected in favor of the sunset provision now found in Article 11.3,
which requires the sunset process to commence after five years, not three. Indeed, if, as argued by
Korea, revocation were required as soon as an exporter ceased dumping, Article 11.3 would be
superfluous insofar as a consideration of dumping (as opposed to injury) is concerned.
4.118 In short, Korea’s interpretation of Article 11 is strained and without support. Rather than
prescribe the specific circumstances that must lead to revocation, the drafters of Article 11 chose
instead to impose upon Members an obligation to “review,” under certain circumstances, the “need
for the continued imposition” of the anti-dumping or der. Once that review is completed, and only if
the investigating authority “determine[s] that the anti-dumping duty is no longer warranted” based
upon one or more of the reviews described in Article 11.2, must a Member revoke the anti-dumping
order.
73
4.119 In the instant case, Respondents asked the DOC to revoke the anti-dumping order on DRAMs
from Korea pursuant to section 353.25 of the agency’s regulations. Under this regulation, the DOC
does not examine “whether the injury would be likely to continue or recur if the duty were removed or
varied.”74 Pursuant to section 353.25, the DOC examines whether the “continued imposition of the
[anti-dumping] duty [order] is necessary to offset dumping.” The DOC does this by examining all of
the evidence before it, especially: (i) whether the Respondent has sold the subject merchandise in the
United States at not less than normal value for at least three consecutive years; (ii) whether a
resumption of less-than-normal-value sales is not likely; and (iii) whether the Respondent has agreed
not to resume sales at less than normal value.75
4.120 Once the Respondents in DRAMs from Korea provided “positive information” (in the form of
three years without dumping) substantiating the need for a determination under section 353.25, the
United States undertook a factual examination of whether “the continued imposition of the [anti-
dumping] duty [order] is necessary to offset dumping.” By any measure, the United States satisfied
this obligation. The DOC engaged in a painstaking analysis of voluminous data on the administrative
record and only then did it determine that the order on DRAMs from Korea was necessary to offset
dumping.
76

71 For example, “warranted” is defined in the dictionary as “to justify or call for.” Webster’s II New
Riverside University Dictionary, 1302 (1984).
72 See, e.g ., MTN.GNG/NG8/3, circulated 20 May 1987, at 5; MTN.GNG/NG8/W/10, circulated 30
September 1987, at 10 ; MTN.GNG/NG8/W/30, circulated 20 June 1988, at 13 (Ex. USA-77).
73 AD Agreement, art. 11.2. Of course, to withstand scrutiny by a WTO panel, the national
investigating authority must render a determination th at satisfies the standard of review prescribed by
Article 17.6 of the AD Agreement.
74 Under US law, this task is performed by the ITC.
75 19 C.F.R. § 353.25(a) (1997) (Ex. USA-24).
76 At one point in its submission, Korea suggests that the DOC’s determination was contrary to
Article 11.2 because instead of finding that the continued imposition of the order is “necessary to offset
dumping,” the DOC found an absence of future dumping “not likely.” For the following reasons, this assertion
is groundless. First, toward the end of its notice, the DOC expressly found “that there is a need for the order to
remain in place.” Final Results Third Review, 62 Fed. Reg. at 39819 (Ex. USA-1). Second, the AD Agreement
establishes a broad framework which regulates the determination of dumping and the application of remedial
anti-dumping duties. Within this framework, WTO Members are free to adopt national standards governing the
determination of dumping and the application of anti-dumping duties. No panel has ever held that national anti-

4.121 The United States, in response to a question from the Panel,77 subsequently further argued as
follows:
4.122 Section 353.25 of the DOC’s regulations sets fo rth three independent criteria that the agency
applies with equal force in every case under the regulation.
4.123 While the DOC always applies the same criteria in every revocation case under
section 353.25(a), the agency must conduct a case-by-case analysis of the evidence in the
administrative record to determine if the three criteria have been satisfied. As the United States
explained in its first written submission and during the first meeting of the Panel, the DOC has a long
history of considering the satisfaction of the first and third criteria to be relevant to whether the
second criterion (i.e., the “not likely” criterion) has been satisfied. Indeed, as the DOC explained in
the Final Results Third Review:
In evaluating the “not likely” issue in numerous cases, Commerce has considered three
years of no dumping margins, plus a Respondent’s certification that it will not dump in
the future, plus its agreeing to immediate reinstatement in the order all to be indicative of
expected future behavior. In such instances, this was the only information contained in
the record regarding the likelihood issue. . .
In other cases, when additional evidence is on the record concerning the likelihood of
future dumping, Commerce is, of course, obligated to consider that evidence. In this
regard, in evaluating such record evidence to determine whether future dumping is not
likely, the DOC has a longstanding practice of examining all relevant economic factors
and other information on the record in a particular case.
78
4.124 Second, all three criteria relate to the concept of necessity because they all bear on whether a
Respondent, for which no dumping margins have been found for a three-year period, is likely to
resume dumping if the order is revoked. In this regard, it cannot be denied that the imposition of an
anti-dumping order is intended to alter the behavior of companies exporting merchandise subject to
the order. If the remedy works as intended, the imposition of an anti-dumping order should make
dumping less likely to occur than in the absence of the order. However, once the disciplines of an
anti-dumping order are terminated ( i.e., revoked), a Respondent may resume dumping. Under
section 353.25, the DOC seeks to determine, based upon evidence, whether the dumping which had
occurred in the past, and which led to the imposition of the order, is likely to recur if the order is
revoked. The DOC does this by looking at the Respondent’s past and expected behavior. The
Respondent’s past behavior is relevant to the first and second criteria under section 353.25(a). Its
expected behavior is relevant to the second and third criteria. If a resumption of dumping is likely
should the order be terminated, then a plain reading of the terms of Article 11 indicate that the
“continued imposition of the duty is necessary to offset dumping.”
(c) Rebuttal arguments made by Korea
4.125 Korea makes the following arguments in rebuttal to the United States responses:

dumping standards must mirror verbatim the language of Article VI or the AD Agreement (or the predecessors
to the AD Agreement).
77 The Panel recalls that the question was as follows: "Article 11.2 of the ADP Agreement refers to an
examination by the investigating authorities as to “whether the continued imposition of the duty is necessary to
offset dumping”. The United States suggests that the DOC conducts this examination by applying the three
criteria contained in section 353.25(a)(2) of the DOC regulations ((i) three years without dumping; (ii) dumping
“not likely” in the future; and (iii) acceptance of immediate reinstatement ). Could the United States clarify how
it sees each of these criteria relate to the concept of necessity under this Article?"
78 Final Results Third Review, 62 Fed. Reg. at 39810 (citations omitted) (Ex. USA-1).

4.126 In an attempt to interpret the nature of the obligations imposed by Article 11, the
United States asserts:
While the first two paragraphs [of Article 11] do discuss the “need”
for an order and whether an order is “necessary” or “warranted,”
these words are never defined and dictionary definitions are not
instructive.
79
This amounts to avoidance of interpretation. As they appear in Paragraphs 1 and 2, “need,”
“necessary” and “warranted” are not terms requiring dictionary interpretation in the first place.
4.127 Paragraph 1 of Article 11 imposes a clear, substantive obligation upon all Members that use
anti-dumping duties:
An anti-dumping duty shall remain in force only as long as and to the
extent necessary to counteract dumping which is causing injury.
(Emphasis added by Korea.)80
4.128 Moreover, Paragraph 1, on its face, clearly states that a Member shall not maintain a duty
where a Respondent is dumping , but is causing no injury. The Panel, then, should reject the
United States’ argument that Article 11 allows a Member to maintain a duty on a Respondent which
the Member itself has found, for three-and-one-half consecutive years, is not dumping.
4.129 The fact that Paragraph 1 does not prescribe specific circumstances requiring revocation (or
detail factors to be considered) is inapposite. It establishes a rule of general application--like the vast
majority of legal requirements--which Members must follow. Paragraph 2 then establishes procedural
guidelines for implementing the Paragraph 1 rule.
4.130 The United States suggests that the fact that the rule is general means it has no force. This is
incorrect. Indeed, the fact that it is general means that it has greater force. Thus, the US assertion that
the rule, being “broad-based,” gives “wide latitude” to Members is incorrect. The negotiators wisely
left the rule in its general form, knowing they could not specify each and every example in which a
Member would be required to revoke. They presumab ly also knew that, if they tried to do so, they
would create a “blueprint for avoidance” that would allow the most recalcitrant authorities to maintain
duties in ways not specifically prohibited, but nonetheless contrary to the general principles of the AD
Agreement. Paragraph 1 is a crystal clear statement of the limits of a Member's ability to impose
antidumping duties.
4.131 Paragraph 2 also is instructive. It provides for a review of “whether the continued imposition
of the duty is necessary to offset dumping.” The words “is” and “offset” are the keys to this inquiry.
The negotiators chose the present-tense verb “is” and tied it to another present
-tense verb, “offset.”
They did not select either “will be” for “is” or “prevent” for “offset.” Nor did they permit a forward-
looking “likely” analysis. Thus, the forward-looking analysis used by the United States is an
impermissible interpretation of this provision.
4.132 Also, “offset” has a specific meaning in the anti-dumping context. It means to impose a duty
on the imported product to re-establish competitive equilibrium or to “offset” the competitive

79 The United States avoids the clear meaning of the English language again when it states that the
terms “not likely” and “no likelihood” have the same meaning as a matter of English (as a matter of law, they
arguably might, but certainly not as a matter of English); Wieland-Werke AG v. United States , Customs Bulletin
and Decisions, 32(16), Ct. No. 96-10-02297, Slip Op. 98-23 (22 April 1998), at pages 35-36 (Ex. ROK-85).
80 The Panel should look to the text of a provision to determine its nature. The text of Paragraph 1 is
strongly worded and establishes that the drafters meant to confine anti-dumping duties to certain limited
situations.

advantage the Respondent has obtained in the Member’s market through low prices. Thus, the word
“offset” presumes that dumping is occurring.
4.133 In sum, contrary to the United States’ assertions, 81 the text of Paragraphs 1 and 2 require
revocation in this case. The analysis above further establishes that the United States is in violation of
its Article 11 obligations.
4.134 Paragraph 3 Article 11, including Footnote 22, confirm Korea's position on paragraphs 1 and
2. The relevant portions of Paragraph 3 of Article 11, including Footnote 22, are:
Notwithstanding the provisions of paragraphs 1 and 2,[ 82] any definitive anti-dumping
duty shall be terminated on a date not later than five years from its imposition . . ., unless
the authorities determine, in a review initiated before that date . . ., that the expiry of the
duty would be likely to lead to continuation or recurrence of dumping and injury.
22/
22/ When the amount of the anti-dumping duty is assessed on a retrospective basis
[as in the US system], a finding in the most recent assessment proceeding . . . that no
duty is to be levied shall not by itself require the authorities to terminate the definitive
duty.
4.135 A number of aspects of Paragraph 3 and its relationship to Paragraphs 1 and 2 illuminate the
issues Korea has raised in this case. First, there is no basis to the US claim that Korea’s interpretation
of Paragraphs 1 and 2 renders Paragraph 3 superfluous. To the contrary, the US reading of
Paragraphs 1 and 2 would render Paragraph 3 surplusage. Paragraphs 2 and 3, interpreted in light of
Paragraph 1, impose two very distinct sets of obligations on Members. Korea has demonstrated that
after a Member has found that a Respondent has not dumped for three-and-one-half consecutive years,
Paragraphs 1 and 2 require revocation. Paragraph 3, in contrast, requires Members either to revoke a
duty or re-establish that dumping is causing injury through sunset (or expiry) reviews within five
years of the most recent dumping, injury and causation findings. Importantly, this provision applies
even where a Member has found that a Respondent has engaged in significant dumping in every
single review period leading up to the sunset (or expiry) review. Thus, Korea’s demonstration of the
US violations does not even encroach upon Paragraph 3, much less render it superfluous.
83
4.136 Second, even though Paragraph 3 addresses sunset (or expiry) reviews, an analysis of its
provisions may illuminate the meaning and scope of Paragraphs 1 and 2. Paragraph 3 contains
language indicating that the negotiators could have, but decided not to, expand a Member’s authority
to conduct a forward-looking “likely” analysis in conducting dumping reviews under Paragraph 2.
Paragraph 3 requires revocation of a duty no later than five years after its imposition, unless the

81 Korea also notes that according to the United States, “the DOC has revoked literally hundreds of
anti-dumping measures based upon an absence of dumping.” Indeed, the United States has not revoked
hundreds, or even dozens, of orders based on the absence of dumping where it has conducted a full-blown “no
likelihood/not likely” analysis. The United States applies the full analysis where it wishes to block revocation.
This exercise of unfettered discretion violates Paragraphs 1and 2 of Article 11. The Panel notes that this
argument by the United States is reflected in Paragraph 4.180.
82 Korea notes that this introductory clause establishe s that Paragraph 3 is an exception to Paragraphs 1
and 2. However, an analysis of Paragraph 3 nonetheless is instructive.
83 Indeed, the Panel should reject the United States’ position, which focuses on Paragraph 3, because
that position would reduce Paragraphs 1 and 2 to “inutility.” See United States -- Standards for Reformulated
and Conventional Gasoline (20 May 1996), WT/DS2/AB/R, page 23.
The United States also asserts that the AD Agreemen t’s negotiating history indicates that Korea and
several other Members supported a sunset or expiry revi ew position with a three-year threshold, instead of a
five-year threshold. Because the texts of Paragraphs 1 and 2 are quite clear, this point is not admissible under
Article 32 of the Vienna Convention . But, even if it were admissible, it is irrelevant. A three-year sunset or
expiry review provision would apply even where dumping was occurring and in the context of a retrospective
regime would serve to ensure that a Member was not maintaining a duty absent injury and causation.

Member conducts injury and dumping reviews and determines “that the expiry of the duty would be
likely to lead to continuation or recurrence of dumping and injury .” In contrast, Paragraph 2 allows a
similar inquiry regarding injury only. Paragraph 2 limits dumping reviews to an examination of
“whether the continued imposition of the duty is necessary to offset dumping.” The use of present-
tense language ( e.g., “offset dumping” vs. “prevent dumping ”), coupled with the omission of the
“likely to continue or recur” provision, indicates that a forward-looking analysis is not permitted in
regard to Paragraph 2 dumping reviews. The fact that Paragraph 3 specifies a forward-looking “likely
to continue or recur” analysis both for dumping and injury (and that Paragraph 2 provides for a
“likely” analysis for injury, but not dumping) demonstrates that the negotiators could have chosen to
extend a forward-looking analysis to dumping as well as to injury under Paragraph 2, but decided not
to and, instead, expressly limited the analysis. The United States should not be permitted to add a
requirement to the plain language of Paragraph 2, especially after the negotiators chose not to.
4.137 Finally, Footnote 22 does not support the US position in any way. Instead, it further confirms
Korea’s interpretation of Article 11.
4.138 The United States would have the Panel believe that Footnote 22 operates as a blanket, fully
insulating Members with retrospective regimes from having to revoke a definitive duty after finding
no dumping. First, the footnote establishes an exception only under Paragraph 3 (which, of course, is
an exception to Paragraphs 1 and 2). Second, the exception applies only to those Members with
retrospective regimes. Third, the limit is set at one year (“the most recent assessment proceeding”).
Finally, Footnote 22 is discretionary in operation.
4.139 Most significantly, though, Footnote 22 has nothing to do with this proceeding. The obvious
implication is that the exception of Footnote 22 is limited to one year and that, if in the most recent
assessment proceedings, the Member repeatedly has found no dumping, the Member’s conduct no
longer falls within the special terms of Footnote 22 and the Member must revoke because “[a]n anti-
dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping
which is causing injury.” Thus, Footnote 22, which in any case applies only to Paragraph 3, not to
Paragraphs 1 and 2, cannot insulate the US conduct at issue here.
4.140 In any event, the Panel should not countenance the US attempt to: (i) export Footnote 22
from Paragraph 3 and import it into Paragraphs 1 and 2; and then (ii) expand it so as to allow the
United States to refuse to revoke (or even condu ct an injury investigation) where Respondents were
found to have small dumping margins in the six-month period of the original investigation (1992), but
have been found not to have dumped in every subsequent review, covering some 42 months.
4.141 In Swedish Stainless Steel Plate , the panel examined, among other things, Sweden’s claim
that the procedures employed by the United States in deciding not to review an injury determination,
i.e., a decision not to initiate an injury review, violated Paragraphs 1 and 2 of Article 9 of the 1979
AD Agreement (the predecessors of Paragraphs 1 and 2 of Article 11).
84 As the United States
concedes by citing this report, although the panel’s conclusions are not part of the WTO acquis (it
was not adopted), the panel’s analysis provides useful guidance and its conclusions are well-
founded.85 However, the United States has not accurately presented the findings of the panel with
respect to Article 9.1/11.1 and 9.2/11.2.
4.142 According to the United States, “the panel concluded that paragraph 1 did not impose an
independent legal obligation upon GATT signatories.” This mischaracterizes the panel’s conclusion.
Sweden had argued that the United States had breached procedural obligations under both paragraphs

84 In Swedish Stainless Steel Plate, unlike here, the DOC never found that the Respondent had stopped
dumping.
85 See Japan -- Taxes on Alcoholic Beverages (1 November 1996), WT/DS8, 10 & 11/AB/R, page 15
and United States -- Import Prohibition of Certain Shrimp and Shrimp Products (15 May 1998), WT/DS58/R,
para. 7.16, note 623, for discussions of the relevance of adopted and unadopted panel reports.

1 and 2. 86 In contrast to the US account, the panel actually found that Paragraph 1 imposes a far-
reaching substantive obligation and that Paragraph 2 imposes a procedural obligation:
223. The panel noted that under Article 9:1 “An anti-dumping duty shall remain in
force only as long as, and to the extent necessary to counteract dumping which is causing
injury.” Accordingly, Article 9:1 obliged Pa rties to the Agreement not to maintain anti-
dumping duties when such duties were no longer necessary to counteract dumping which
was causing injury. However, the text of Article 9:1 did not provide an express
obligation regarding the steps to be taken by Parties to the Agreement in order to make a
determination on whether the continued imposition of an anti-dumping duty was
necessary to counteract dumping which was causing injury.
224. In contrast, Article 9:2 provided for a specific obligation to “review” the need
for the continued imposition of the duty, on the initiative of investigating authorities, or
upon a duly substantiated request by any interested party. In the Panel’s view, the
purpose of the review procedure under Article 9:2 could only be understood if Article 9:2
was read in the light of Article 9:1. The references in Article 9:2 to “the need for the
continued imposition of the duty” and “the need for review” could only be interpreted in
a meaningful manner when read in conjunction with the obligation in Article 9:1 . Thus,
a review under Article 9:2 of “the need for the continued imposition of the duty” was a
review of whether that duty continued to be “necessary to counteract dumping which is
causing injury”. Similarly, “positive information substantiating the need for review” in
Article 9:2 necessarily meant information relevant to the issue of whether the anti-
dumping duty remained “necessary to counteract dumping which is causing injury.”
225. The Panel thus read Article 9:1 as requiring Parties not to maintain anti-
dumping duties longer than necessary to counteract dumping which was causing injury,
and Article 9:2 as setting forth an obligation of Parties regarding the undertaking of a
factual examination of whether the continued imposition of anti-dumping duties was
necessary within the meaning of Article 9:1.87
4.143 Thus, Paragraph 1 of Article 11 does impose substantive legal obligations. Moreover,
contrary to the United States’ assertion, it constitutes an independent legal ground obligating
revocation in certain cases, including this one. Finally, paragraph 224 of the Panel Report confirms
that Paragraph 1 establishes the legal obligation that guides the application and interpretation of
Paragraph 2.
4.144 The United States violated Article 11 of the AD Agreement not only because of the way it
applied its revocation scheme in the DRAMs from Korea case, but also because the regime on its face
is inconsistent with Article 11 of the AD Agreement.
4.145 Article 11.1 permits imposition of anti-dumping duties “only as long as and to the extent
necessary to counteract dumping which is causing injury.” Where the duty is no longer warranted
under this standard, Article 11.2 requires that “it shall be terminated immediately.”
4.146 Contrary to the dictates of Article 11, which require revocation when duties are not necessary
to counteract dumping which is causing injury, the US revocation scheme permits duties to continue
indefinitely except where the Secretary of Commerce, on the basis of unfettered discretion rather than
objective criteria, decides to revoke. In addition to the lack of objective criteria and the concomitant
existence of unfettered discretion, the US revocation regime also mandates proof of no likelihood of

86 See United States -- Anti-Dumping Duties on Imports of Stainless Steel Plate from Sweden
(24 February 1994), APD/117, para. 221 (unadopted).
87 Id. at paras. 223-25 (emphasis added by Korea).

resumption of dumping and forces Respondents, as a condition of revocation, to agree to forgo their
rights to an injury determination if the DOC concludes that Respondent has resumed dumping.
4.147 Thus, this case is not analogous to situations in which legislation permits, but does not
mandate, action inconsistent with a WTO obligation. This is not like US Superfund, in which the law
directed imposition of a tax inconsistent with Article III of the General Agreement, but provided for
the possibility of regulations setting out requirements under which this penalty tax would not be
applied.
88 Nor is it like Thai Cigarettes , in which a Thai law authorized the imposition of
discriminatory excise taxes, but regulations promulgated under the law taxed imported and domestic
cigarettes at the same rate.89
4.148 Unlike US Superfund, Thai Cigarettes and similar disputes, in this case the Secretary of
Commerce cannot act in conformity with the obligations of Article 11. Inclusion of the “no
likelihood/not likely” criterion and the mandatory cession of the right to an injury review (embedded
in a Respondent’s agreement to immediate reinstatement in the anti-dumping duty order), on their
face, require action that is inconsistent with the dictates of Article ll.1.
4.149 Thus, the first, not the second, principle set out in the US Tobacco decision applies:
[T]he Panel recalled that panels had consistently ruled that legislation which mandated
action inconsistent with the General Agreement could be challenged as such, whereas
legislation which merely gave the discretion to the executive authority of a contracting
party to act inconsistently with the General Agreement could not be challenged as such;
only the actual application of such legislation inconsistent with the General Agreement
could be subject to challenge.90
The US revocation scheme mandates action inconsistent with the WTO AD Agreement and so it can
be challenged as such.
4.150 The US revocation scheme also breaches both of Article XVI:4 of the Marrakesh Agreement
Establishing the World Trade Organization, which requires each Member to “ensure the conformity of
its laws, regulations and administrative procedures with its obligations as provided in the annexed
Agreements,” and of Article 18.4 of the AD Agreem ent, which mandates that “[e]ach Member shall
take all necessary steps… to ensure … the conformity of its laws, regulations and administrative
procedures with the provisions of this Agreement . . ..”
4.151 Thus, the US revocation scheme, on its face, by allowing the US to maintain duties in
situations in which Article 11 requires revocati on, violates not only Ar ticle 11 itself, but also
Article 18.4 of the AD Agreement and Article XVI:4 of the Marrakesh Agreement.91
(d) Rebuttal arguments made by the United States
4.152 The United States makes the following arguments in rebuttal:
4.153 Article 11.1 does not impose, as Korea seems to suggest, an independent obligation on WTO
Members to: (i) revoke anti-dumping orders as soon as dumping stops, and/or (ii) examine dumping

88 See United States -- Taxes on Petroleum and Certain Imported Substances (17 June 1987), BISD
34S/136, pages 163-64, para. 5.2.9, ("US – Gasoline").
89 See Thailand -- Restrictions on Importation and Internal Taxes on Cigarettes (7 November 1990),
90 See United States -- Measures Affecting the Importation, Sale and Use of Tobacco (4 October 1994),
DS44/R, para. 118, ("US – Tobacco") (emphasis added by Korea).
91 The Panel notes that the United States raised a preliminary objection with regards to Korea's claims
under Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization and Article 18.4
of the AD Agreement. The arguments of the Parties on this matter can be found in Section IV.A.3 of this report.

and injury as part of every review under Article 11.2.92 With respect to the first point, the plain terms
of Article 11.1 simply do not direct a Member to take any action to implement the general principle
contained in Article 11.1. There certainly is no language in Article 11.1 which requires WTO
Members to revoke (i.e., “terminate”) anti-dumping orders as soon as dumping stops. 93 With respect
to the second point, Article 11.2 cannot be given its full meaning, as it must, if Korea’s interpretation
of Article 11.1 is correct (i.e., if Article 11.1 requires an examination of dumping and injury in every
review under Article 11). Article 11.2 provides for several different types of reviews. For example,
under Article 11.2, investigating authorities are direct ed to review, in certain instances, whether the
“continued imposition of the duty is necessary to offset dumping.” These provisions would be a
nullity if Korea’s interpretation of Article 11.1 were correct.
94
4.154 The better view of Article 11.1, and the one which comports with the ordinary meaning of its
terms, is that Article 11.1 states a general rule which informs the rest of Article 11. The specific
obligations established in Article 11 are set forth in Articles 11.2 through 11.5. 95 Of these provisions,
only Article 11.2 is directly at issue in this case.
4.155 If the terms of Article 11 are given their ordinary meaning in the context within which they
occur, it becomes manifestly apparent that Article 11.2 does not require revocation after one year (or
even three years) of no dumping. First, footnote 22 to Article 11.3, disposes of any suggestion that
revocation is mandated whenever a Respondent stops dumping. Second, Article 11.2 simply does not
prescribe the specific circumstances that must lead to revocation. It certainly does not contain
language which mandates revocation in the event that a Respondent goes three years without
dumping. Third, a review of the negotiating history of Article 11 reveals that Korea and several other
WTO Members supported a provision in the AD Agreement which would have required the automatic
revocation (or “termination”) of all anti-dumping orders after three years. These types of proposals
were rejected in favor of the “sunset” provision now found in Article 11.3, which requires the sunset
process to commence after five years. Thus, far from contradicting the plain-text interpretation
advanced by the United States, the negotiating history of Article 11 confirms the views of the United
States.
4.156 Finally, Korea’s interpretation of Article 11.2 is at odds with Article 11.3, footnote 22. Under
Article 11.3, once every five years, inve stigating authorities must review, inter alia , whether
revocation of the “duty would be likely to lead to continuation or recurrence of dumping ... .”
According to footnote 22, however , “a finding in the most recent assessment proceeding under
subparagraph 3.1 of Article 9 that no duty is to be levied shall not by itself require the authorities to

92 In its first written submission, Korea appeared to concede that Article 11.1 merely states a general
rule which is implemented by, inter alia, Articles 11.2 and 11.3. However, at various times since then, including
in its oral statement before the Panel, Korea seems to suggest that Article 11.1 creates a legal obligation, quite
apart from Articles 11.2 and 11.3, which the United States is claimed to have violated.
93 Indeed, a prior panel recognized that Article 9.1 of the Tokyo Round Anti-Dumping Code (which is
virtually identical to Article 11.1 of the AD Agreement) calls for a prospective analysis. Plate from Sweden ,
ADP/117, para. 233.
94 Korea’s interpretation of Article 11 would violate the principle of interpretation expressed in the
maxim: Ut res magis valeat quam pereat, often referred to as the rule of “effectiveness.” Under this rule, courts
and panels should interpret treaty provisions so as to give full effect to their ordinary meaning. As the Appellate
Body has stated: “An interpreter is not free to adopt a reading that would result in reducing whole clauses or
paragraphs of a treaty to redundancy or inutility.” United States - Standards for Reformulated and Conventional
Gasoline, WT/DS2/AB/R, WT/DS4/AB/R, Report of the Appellate Body adopted 20 May 1996, p. 23.
95 A similar type of framework was identified by the Appellate Body in the Japan Taxes case which had
before it Article III of GATT 1994. In ruling that Japan’s Liquor Tax Law violated provisions of Article III, the
Appellate Body stated that Article III:1 articulates the gene ral rule that “internal measures should not be applied
so as to afford protection to domestic production.” Japan - Taxes on Alcoholic Beverages , WT/DS8/AB/R,
WT/DS10/AB/R, WT/DS11/AB/R, Report of the Appellate Body adopted 1 November 1996, p. 18. This rule,
the Appellate Body stated, “informs” the rest of Article III, including Article III:2, which “‘provides for specific
obligations regarding internal taxes and internal charges.’” Id.

terminate the definitive duty.” Yet, under Korea’s construction of Article 11.2, any time a
Respondent ceases dumping, investigating authorities must immediately terminate ( i.e., revoke) the
duty. Thus, under Korea’s construction, footnote 22 never can come into play, because a finding of
no dumping must result in the immediate revocation of an order. In other words, footnote 22 is
superfluous.96
4.157 In sum, Korea is asking the Panel to go far beyond an interpretation of the AD Agreement and
to prescribe the circumstances under which an an ti-dumping order must be revoked. As discussed,
Korea’s “interpretation” of Article 11 is contrary to the “customary rules of interpretation of public
international law” prescribed by Article 17.6(ii) of the AD Agreement and Article 3.2 of the DSU.
Furthermore, if Korea’s position were embraced by the Panel and adopted by the Dispute Settlement
Body (“DSB”), it would create, contrary to Articles 3.2 and 19.2 of the DSU, a right or obligation
where none currently exists.
4.158 In response to a question by the Panel,
97 the United States further argued:
4.159 In U.S. - Tobacco and the Superfund case, the panels recognized that legislation mandatorily
requiring authorities to impose GATT-inconsistent measures, whether or not such legislation has been
applied, may constitute a violation of the General Ag reement. However, in both of those cases, there
existed legislation or regulations providing the authorities with the possibility of avoiding the need to
apply the GATT-inconsistent legislation. As a result, the panels concluded that the mere existence of
the mandatory, GATT-inconsistent legislation did not, by itself, constitute a violation of the General
Agreement.98
4.160 Thus, where legislation which, “on its face” (or as a matter of law), mandates action
inconsistent with Article 11.2, but additional legislative or regulatory provisions permit action
consistent with Article 11.2, a Member may not challenge the mandatory piece of legislation until it
(or some other enactment) is applied in a manner that violates Article 11.2.
4.161 In the instant case, section 353.25(a) does not mandate action inconsistent with Article 11.2.
and even if it does, other legislative avenues for revocation exist. First, on its face and as applied,
section 353.25(a) rests upon a permissible interpretation of Article 11.2. Second, section 353.25(a) is
not “mandatory” in the sense that it requires WTO inconsistent action. Indeed, Korea has often said
in this proceeding that the regulation allegedly confers upon the Secretary of Commerce “unfettered
discretion.” As the United States explained at the second meeting of the Panel, the Secretary cannot
have the “unfettered discretion” to revoke an anti-dumping order and, at the same time, be required to
apply the regulation in a mandatory fashion. The two arguments are mutually exclusive. Finally,
even assuming arguendo that section 353.25(a) mandates action inconsistent with Article 11.2,

96 Hence, Korea’s interpretation of Article 11.2 would, once again, violate the rule of “effectiveness.”
In this regard, in the recently issued report in the Indonesia Autos case, the panel rejected an argument by
Indonesia that, if accepted, would have reduced Article III:2 of GATT 1994 to inutility. Indonesia - Certain
Measures Affecting the Automobile Industry , WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R, Report of
the Panel issued 2 July 1998, para. 14.40 (unadopted).
97 The Panel recalls that the question was as follows: "In US – Tobacco, the panel recalled 'that panels
had consistently ruled that legislation which mandated action inconsistent with the General Agreement could be
challenged as such, whereas legislation which merely ga ve the discretion to the executive authority … to act
inconsistently with the General Agreement could not be challenged as such…' In the event that a particular
review provision does not allow a Member to terminate a duty in circumstances where such termination is
required by Article 11.2, is this in and of itself sufficient for a finding of 'mandatory' legislation inconsistent
with the ADP Agreement, i.e., if other legislative avenues exist whereby termination of an anti-dumping duty
through an Article 11.2-type review could be sought, is this relevant? Why or why not?"
 98 Thailand - Restrictions on Importation of and Internal Taxes on Cigarettes , BISD 37S/200
(adopted 7 November 1990) at paras. 84-86; United States - Taxes on Petroleum and Certain Imported
Substances, BISD 34S/136 (adopted 17 June 1987) at paras. 5.2.9-5.2.10.

respondents are free to pursue revocation through an Article 11.2-type review under section 751(b) of
the Act (and sections 353.22(f) and 353.25(d) of the DOC’s regulations).
2. Secretary of Commerce's Discretion
(a) Claims raised by Korea
4.162 Korea claims that the DOC’s regulations, including the “no likelihood/not likely” criterion,
give the Secretary of Commerce unreasonably broa d discretion in making revocation determinations
and allow the Secretary to maintain the duty in an arbitrary and unjustifiable manner in violation of
Article 11. The following are Koreas arguments in support of this claim:
4.163 Under US law, the Secretary may, but is not required to , revoke an order if a Respondent
meets the three requirements above. Thus, a Respondent has the burden of establishing each of these
elements, but even if the Respondent meets this burden, the Secretary nonetheless has the discretion to
refuse to revoke the order. Also, the statute and regulations contain absolutely no standards or factors
governing the “not likely” determination.
4.164 The DOC has concurred with this analysis. According to the DOC, this scheme is permitted
by the enabling legislation:
 DOC’s Position: The applicable statutes and regulations grant the
DOC broad discretion in determining whether to revoke an anti-
dumping finding. The only relevant statutory provision states: “The
administering authority may revoke, in whole or in part, a
countervailing duty order or an anti-dumping duty order * * * after a
review under this section.” 19 U.S.C. section 1675(c) (emphasis
supplied). Therefore, except for the requirement for conducting an
administrative review, Congress has not specified any procedure that
the DOC must follow or any criteria that it must consider in
determining whether to revoke a particular anti-dumping duty order.
The applicable Commerce regulation , contained in 19 CFR 353.25,
preserves the broad discretion granted by Congress , by providing in
pertinent part: “[T]he Secretary may revoke an order or terminate a
suspended investigation if the Secretary concludes that * * *” In
short, the regulation like the governing statute, vests a great deal of
discretion in the Secretary to determine the propriety of revocation.99
4.165 That the Secretary’s discretion not to revoke is utter and complete under US law has been
confirmed by the US courts. According to the US Court of International Trade:
• “The language of the regulations indicates that the Secretary is not compelled to grant
revocation even when plaintiffs satisfy the requirements for revocation”;100
• “The regulation does not present objective criterion for determining whether there is
“no likelihood” of resumption of LTFV sales. Instead, the petitioner [the Respondent
before the DOC] must establish this fact to the satisfaction of the Secretary”;
101

99 Frozen Concentrated Orange Juice from Brazil , 56 Fed. Reg. 52510, 52513 (Response of the DOC
to Comment 3) (21 October 1991) (emphases added by Korea) (Ex. ROK-4).
100 Toshiba, 15 C.I.T. at 599 (citation omitted) (denying plaintiff/Respondent’s challenge to the DOC’s
determination not to revoke) (Ex. ROK-5).
101 Id. at 600.

• “[The regulation] vests a great deal of discretion in the Secretary to determine the
propriety of revocation . . ..”
“[T]he language employed indicates that Commerce is not compelled to grant
revocation, as the above noted sections refer to what the Secretary may do when
acting on an application for revocation . . ..”
“[E]ven if the administrative reviews reveal that plaintiffs have not been
dumping for the periods in question, Commerce may exercise its discretion not to
grant revocation”;102 and
• “[E]ven assuming the plaintiffs had, as they claim, satisfied all of the requirements
for revocation contained in [the regulation], the ITA was not required to grant their
request.”
103
4.166 These excerpts confirm that the Secretary’s discretion not to revoke an order is unfettered.
4.167 Finally, the US anti-dumping law and all of the Secretary’s determinations that follow it are
completely insulated from domestic claims that the US law (or the Secretary’s determination) violates
a US obligation under any of the WTO agreements, including the AD Agreement. Section 102(a)(1)
of the Uruguay Round Agreements Act (the le gislation implementing the WTO Agreements)
provides:
(1) UNITED STATES LAW TO PREVAIL IN CONFLICT.—No provisions
of any of the Uruguay Round Agreements, nor the application of any
such provision to any person or circumstance, that is inconsistent
with any law of the United States shall have effect.
4.168 Thus, even where the Secretary follows a US law that a reviewing court later finds is
inconsistent with a US obligation under a WTO agreement, the court is required by US law to find
that the WTO Agreement provision has no effect.
4.169 The United States’ revocation scheme completely ignores the requirements of Article 11 of
the AD Agreement. It fails to recognize that in ce rtain situations, such as that presented here, the AD
Agreement requires the Secretary to revoke an order. This is the purpose--the very essence, if you
will--of Article 11. Moreover, as applied in the Third Annual Review of DRAMs from Korea, the US
scheme violated Article 11.
4.170 In contrast, the US regime never requires the Secretary to revoke an order. No matter what
the circumstances are, the Secretary always has the discretion to refuse to revoke an order. A step-by-
step review of the US revocation scheme shows the absolute discretion bestowed on the Secretary.
4.171 First, the US regulations impose three requirements on a Respondent before revocation will
even be considered. In brief they are:
1. three consecutive years of no or de minimis margins104;

102 Matsushita, 688 F. Supp. at 623 (citations omitted) (denying plaintiff/Respondent’s challenge to the
DOC’s determination not to revoke), aff’d, 861 F.2d 257 (Fed. Cir. 1988) (Ex. ROK-6).
103 Manufacturas Industriales , 666 F. Supp. at 1565 (denying plaintiff/Respondent’s challenge to the
DOC’s determination not to revoke) (Ex. ROK-7).
104 The United States limits application of the two percent de minimis threshold required by Article 5.8
of the AD Agreement to the investigation stage of pro ceedings. For administrative reviews, the United States
maintains its pre-WTO de minimis threshold of 0.5 percent. See 19 C.F.R. § 351.106(c) of the DOC’s anti-
dumping regulations; 62 Fed. Reg. 27296, 27382-83 (19 May 1997) (Ex. ROK-49).

2. a showing that dumping is “not likely” to recur (or, that there is “no
likelihood” that dumping will recur);
3. a written agreement that the duty/order will be reinstated if dumping does
recur.105
The key requirement here is the second--the “no likelihood/not likely” requirement--because the DOC
found that Respondents met the first and third requirements, but not the second requirement.
4.172 Under US law, the Respondent bears the burden of establishing that future dumping is “not
likely,”106 and this shifting of the burden of proof is, by itself, a violation of Article 11. However, it is
exacerbated by the fact that the “no likelihood/not likely” requirement has no “objective criterion”
according to the US court that reviews challenged anti-dumping determinations of the DOC:
The regulation does not present an objective criterion for determining whether there is
“no likelihood” of resumption of LTFV sales. Instead, the petitioner [the Respondent
company seeking revocation] must establish this fact to the satisfaction of the
Secretary.107
Thus, the Secretary makes the determination as to whether the Respondent has met the second
requirement and, conducts the analysis without consistent reference to transparent and established
standards.108
4.173 Second, even in those cases where the Secretary finds that a Respondent has satisfied all three
requirements, the Secretary still has the discretion to not revoke the order. This is because the
regulation states only that “[t]he Secretary may revoke” an order where he finds that the three criteria
have been met to his satisfaction.109
4.174 Finally, the Secretary’s exercise of discretion is virtually unrestrained. This is due primarily
to US federal court holdings that the decisions of the Secretary are subject to “‘tremendous
deference’”110 by the reviewing courts (the CIT and the CAFC), and also to the use of the word “may”
in the statute and the regulation.
4.175 In sum, the “no likelihood/not likely” requirement grants the Secretary unbounded discretion
and, even where the Secretary finds that a Respondent has met each of the three requirements, the
Secretary can, by executive fiat, refuse to revoke the duties. Because revocation is not a matter of
discretion under the WTO, the United States has turned Article 11 on its head. In the United States,
revocation is always a matter of discretion, without any regard to WTO requirements, and, as
exercised in this case, the US discretion violated Article 11 of the AD Agreement.
(b) Response by the United States
4.176 The following are the United States' arguments in response to Korea's claim:

105 See 19 C.F.R. § 353.25(a)(2) (1996).
106 See Sanyo Electric, 15 C.I.T. 609, 1991 C.I.T. LEXIS 441 (Ex. ROK-50); Toshiba, 15 C.I.T. at 600
(Ex. ROK-5); Manufacturas Industriales, 666 F. Supp. at 1566 (Ex. ROK-7).
107 See Toshiba, 15 C.I.T. at 600 (Ex. ROK-5).
108 The Secretary apparently considers many factors, but a review of past practice shows that there is no
consistent method or means of analysis.
109 See also 19 U.S.C. § 1675(d)(1) (“The administering authority may revoke . . . an anti-dumping duty
. . .” (emphasis added by Korea)).
110 See, e.g., Manufacturas Industriales, 666 F. Supp. at 1567 (quoting Smith-Corona v. United States ,
713 F.2d 1568, 1582 (Fed. Cir. 1983)) (Ex. ROK-7).

4.177 The Congress of the United States has given the DOC broad discretion in administering the
anti-dumping law, in general, and in the revocation of orders, in particular. 111 Section 751(d) of the
Act states, in part:
. . . The administering authority may revoke, in whole or in part, a countervailing duty
order or an anti-dumping duty order . . . after [an administrative] review . . .112
4.178 Therefore, except to impose a requirement that revocation occur after a review under
section 751 of the Act, Congress has not specified the procedures that the DOC must follow, or the
criteria that it must consider, in determining whether to revoke an outstanding anti-dumping duty
order.113 Instead, like legislatures around the world, Congress delegated to an administrative agency
(here, the DOC) the responsibility for working out the details.
4.179 This is not to say, however, that the DOC can do whatever it wants, as Korea suggests. The
agency’s discretion, vis-à-vis interested parties, is limited by its regulations, administrative practice,
and relevant administrative law doctrines. 114 In the exercise of the authority conferred on it by the
Congress, the DOC has promulgated section 353.25 of its regulations which sets out the criteria for
revocation.115 This regulation limits the DOC’s discretion to an examination of the issues surrounding
the established criteria. Furthermore, in applying the regulation, the DOC has developed an
administrative practice, from which it may not deviate unless it provides an explanation. 116 For the
courts of the United States to uphold a deviat ion from past practice, the explanation must be
consistent with a reasonable interpretation of the law and be supported by substantial evidence on the
record of the underlying administrative proceeding. 117 Even then, the DOC’s discretion may be
further constrained by the legal doctrines of “collateral estoppel” 118 and the “law of the
proceeding.”119
4.180 In fact, over the years, the DOC’s administrative practice regarding revocation has been
exceedingly consistent. The “no likelihood”/“not likely” standard firs t appeared in the DOC’s

111 Oregon Steel Mills Inc. v. United States , 862 F.2d 1541, 1544 (Fed. Cir. 1988) (Ex. USA-68);
Toshiba Corp. v. United States, 15 CIT 597, 599 (1991) (Ex. USA-69).
112 19 U.S.C. § 1675(d)(1) (1997) (emphasis added by the United States) (Ex. USA-19).
113 In fact, the statute provides several means by which an anti-dumping duty order may be revoked.
For example, section 751(d) of the Act provides that an order may be revoked following a “changed
circumstances” review pursuant to section 751(b) of the Act. 19 U.S.C. § 1675(d)(1) (1997) (Ex. USA-19).
The principal issue in this case, however, is whether th e United States acted in accordance with its international
obligations when it did not revoke, in part, the anti-dumping duty order on DRAMs from Korea following an
“administrative” review pursuant to section 353.25(a) of the DOC’s regulations.
114 Manufacturas, 666 F. Supp. at 1565 (the DOC’s discretion is not “unbounded”) (Ex. USA-60).
115 See 19 C.F.R. § 353.25(a) (1997) (Ex. USA-24).
116 UAW v. NLRB, 459 F.2d 1329, 1341 (D.C. Cir. 1972) (Ex. USA-70); see also Ipsco v. United States,
687 F. Supp. 614 (Ct. Int’l Trade 1988) (although the DOC needs discretion to formulate and adjust
methodologies to new factual situations, it cannot avoid explaining the basis for departing from administrative
precedent by pointing to an arbitrary standard not adopted by formal rule-making) (Ex. USA-71).
117 19 U.S.C. § 1516a (1998) (Ex. USA-62).
118 Under United States law, an administrative agency, such as the DOC, may be collaterally estopped
from departing from past determinations of fact wher e a party has detrimentally relied on those determinations
and where the party has been given insufficient notice of the change. See, e.g. , 4 Davis, Administrative Law
§ 20:12 (1983) (Ex. USA-72).
119 Under the “law of the proceeding” doctrine, a well-established administrative practice which has
gone unchallenged for some time and upon which the parties have reasonably come to rely may acquire the
status of a regulation, such that an administrative agency may not change that practice without an explanation
that justifies the change. See, e.g., Shikoku Chemicals v. United States , 795 F. Supp. 417 (Ct. Int’l Trade 1992)
(Ex. USA-73).

regulations in 1980.120 Since then, the DOC has revoked literally hundreds of anti-dumping measures
based upon an absence of dumping.
4.181 Lastly, while Korea is presenting its claim before this Panel that the DOC’s discretion is
“unfettered,” the Respondents are currently prosecuting a lawsuit in the CIT challenging the DOC’s
failure to revoke in the Final Results Third Review.121 If the DOC’s discretion truly was incapable of
being checked or regulated by the courts, then Respondents’ lawsuit would be pointless.
4.182 Korea claims, quite apart from the Final Results Third Review , that the DOC’s regulations
confer upon the Secretary of Commerce a level of discretion that violates Article 11 of the AD
Agreement. According to Korea, the “not li kely” standard in section 353.25(a) of the DOC’s
regulations has no “objective criterion.” Therefore, the DOC allegedly conducts its analysis “without
consistent reference to transparent and established standards.”
122
4.183 First, the DOC’s discretion is not “unbounded.” The DOC’s discretion is limited by its
regulations, administrative practice, and administrative law doctrines.
4.184 Secondly, while the statute uses the term “may revoke,” and the term “not likely” is not
defined further in the DOC’s regulations, no panel has ever demanded that a regulation which
implements a GATT or WTO obligation must be drafted in such a way as to define each element of
the regulation. Indeed, discretionary legislation which arguably permits, but does not require, an
administrative agency to promulgate regulations or take other action that is WTO-inconsistent does
not, as such, violate the WTO agreements.
123 A complaining party must show that the agency actually
took WTO-inconsistent action.124
4.185 Finally, it is hard to understand how the “not likely” standard can be condemned for lacking
so-called “objective criteria,” when Article 11, itself, lacks such criteria. For example, there is
nothing in the AD Agreement that fleshes out the terms “necessary” or “warranted.” If these terms
lack “objective criteria,” is each WTO Member which considers treaties self-executing under its legal
and constitutional systems guilty of violating the AD Agreement if it fails to promulgate regulations
that further define these terms?
4.186 The United States, in response to a question from the Panel,
125 subsequently further argued as
follows:
4.187 The discretion granted to the Secretary under section 353.25(a)(2) is subject to legal/judicial
control. The DOC’s discretion is limited by its regulations, administrative practice, and relevant
administrative law doctrines. In addition, in order for a determination by the DOC under section
353.25(a)(2) to be sustained by the US courts, the determination must be consistent with a reasonable
interpretation of the law and be supported by substantial evidence on the record of the underlying
administrative proceeding.

120 Anti-dumping Duties, 45 Fed. Reg. 8182 et seq. (1980) (section 353.54(a)) (Ex. USA-74).
121 Hyundai Electronics Industries Co., Ltd., et al. v. United States , Consol. Ct. No. 97-08-01409, Ct.
Int’l Trade (Before: Judge Richard Goldberg).
122 Korea also argues that section 751(d) of the Act confers a level of discretion on the Secretary that
violates Article 11 when it uses the words “may revoke.” Id. para. 4.26 n. 85.
123 See generally GATT, Analytical Index: Guide to GATT Law and Practice, Updated 6 th Edition
(1995), 645-48.
124 Id.
125 The Panel recalls that the question was as follows: "Article 11.2 of the ADP Agreement states that
an anti-dumping duty “shall be terminated immediately” if the investigating authorities determine that the duty
is 'no longer warranted'. In this regard, could the United States explain why section 353.25(a)(2) of the DOC
regulations provides that the Secretary of Commerce 'may ' revoke if the three criteria set forth therein are met,
rather than specifying that the Secretary of Commerce 'shall' revoke if those criteria are met? Is the exercise of
the Secretary’s discretion under section 353.25(a)(2) subject to legal / judicial control?"

4.188 Indeed, the US courts themselves have best explained the legal/judicial controls on the DOC’s
discretion. The US Court of International Trade (“CIT”) in Manufacturas Industriales De Nogales,
S.A. v. United States , 666 F. Supp. 1562, 1565 (Ct. Int’l Trade 1987), declared that the DOC’s
discretion is not “unbounded.” In addition, the US Court of Appeals for the Federal Circuit, which
reviews decisions of the Court of International Trade, has stated:
The Secretary of Commerce (Secretary) has been entrusted with responsibility for
implementing the anti-dumping law. The Secretary has broad discretion in executing the
law. While the law does not expressly limit the exercise of that discretion with precise
standards or guidelines, some general standards are apparent and these must be followed.
The Secretary cannot, under the mantle of discretion, violate these standards or interpret
them out of existence.126
4.189 As the United States has discussed, the “general standards” to which the court refers include
the expectation that the DOC will examine only those issues related to the criteria set forth in its
regulation, the requirement to adhere to prior administrative practice, and the necessity that each
decision be based upon substantial evidence contained in the administrative record.127
4.190 Based upon the manner in which the question has been framed, there is apparent interest by
the Panel in whether section 353.25(a)(2) properly reflects the obligations contained in Article 11.
The United States maintains that section 353.25(a)(2) actually tracks the obligations contained in
Article 11. In this regard, Article 11 requires Members to review whether the continued imposition of
a definitive anti-dumping duty is warranted. Similarly, section 353.25(a)(2) requires the DOC, upon
proper request, to review whether revocation of an anti-dumping order is appropriate. Moreover,
Article 11 requires a Member to terminate the anti-dumping duty if, as a result of a review under
Article 11.2, the authorities determine that the anti- dumping duty is no longer warranted. Likewise,
section 353.25(a)(2) imposes an obligation on the DOC to revoke the anti-dumping order if the three
criteria related to the need for the continued imposition of the order are satisfied.
4.191 The fact that section 353.25(a)(2) contains the term “may,” as opposed to the term “shall,” is
merely a reflection of the discretion accorded to the DOC by the United States Congress. This
discretion is embodied in section 751(d) of the Tariff Act, which states that “the administering
authority may revoke, in whole or in part, . . . an anti-dumping duty order or finding . . . after review .
. .” The DOC, in promulgating section 353.25(a)(2), determined that revocation of an order will occur
if the three criteria set forth in that provision are satisfied. Therefore, the use of the term “may” does
not connote an ability to deviate from its practice of revoking an anti-dumping order whenever those
three criteria are satisfied.
4.192 In its second oral statement before the Panel, the United States further argued:
4.193 Korea also asserts that the United States has misled the Panel by claiming that the DOC has
revoked literally hundreds of anti-dumping measures based upon an absence of dumping. The United
States has not misled the Panel. First of all, the representation made by the United States is absolutely
true and Korea does not present evidence to the contrary. What Korea has done is to recast the
statement to cover a different universe of cases -- that is, cases where the DOC received and examined
evidence directly bearing on the no likelihood/not likely criterion. This universe of cases, Korea
asserts, shows that the DOC only applies the not likely criterion when it wants to "block revocation."
However, the United States has already shown that the depth of the agency's analysis under section
353.25 depends, almost exclusively, upon the arguments of the parties and the evidence on the record
of the administrative proceeding -- not the whim of the DOC. Secondly, a review of the cases over
the past 19 years where the DOC has examined the no likelihood/not likely standard reveals that in a

126 Smith-Corona Group v. United States, 713 F.2d 1568, 1571 (1983), cert. denied, 465 U.S. 1022, 104
S.Ct. 1274, 79 L.Ed. 2d 679 (1984) (emphasis added by the United States)(footnote omitted).
127 See id.

substantial number of cases, the United States revoked the subject order. Now, if the United States
only applied the not likely criterion when it wanted to "block revocation," as Korea asserts, wouldn't
one expect all, or at least most, of these cases to result in maintenance of the order -- not revocation?
3. Speculative Analysis of Future Dumping
(a) Claim raised by Korea
4.194 Korea claims that by imposing a "no likelihood/not likely" recurrence of dumping criterion
which must be met for an order to be revoked, the United States is in violation of Article 11.2 which
does not allow a forward looking analysis in the case of dumping. The following are Korea's
arguments in support of that claim:
4.195 The “no likelihood/not likely” criterion focuses on whether dumping will recur in the
future.128 Speculation as to whether dumping will recur is not permitted by Paragraph 2 of Article 11
of the AD Agreement.
4.196 The relevant sentence of Paragraph 2 is the second:
Interested parties shall have the right to request the authorities to examine whether the
continued imposition of the duty is necessary to offset dumping, whether the injury
would be likely to continue or recur if the duty were removed or varied, or both.
First, this sentence provides rights to interested parties, thus imposing requirements on Members.
Second, it limits Members’ discretion as to the type of analysis they can conduct. Although the
sentence allows Members to conduct a forward-looking analysis of whether injury would be likely to
continue or recur,
129 it does not call for or allow a prospective analysis of whether dumping “would be
likely to continue or recur.” As revealed in the plain language of the sentence, the negotiators did not
extend the “likely to” concept to the dumping context and doing so by implication is impermissible.
Rather, regarding dumping, the Member is permitted only to examine “whether the continued
imposition of the duty is necessary to offset dumping.”
130 Where, as here, no dumping has occurred
for three consecutive years, the duty is not “necessary to offset dumping” because there is no dumping
(much less injury).
4.197 This analysis is confirmed by a review of Paragraph 3 of Article 11, the so-called “sunset
provision.” Paragraph 3 requires a Member to revoke a duty no later than five years from its
imposition. The only exception to this rule is where a Member conducts a review and determines
“that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and
injury” (footnote omitted; emphasis added by Korea). The fact that the negotiators specifically
provided for a forward-looking analysis of dumpi ng and applied the word “likely” to cover both
dumping and injury in Paragraph 3, but not in Paragraph 2, confirms that such an analysis is not
permitted under Paragraph 2 of Article 11.

128 See 19 C.F.R. § 353.25(a)(2)(ii) (1996).
129 Korea notes, in this regard, that the United States has failed to comply with this requirement as well.
Under US law, when the ITC examines whether a duty should be revoked for changed circumstances, it is
required to presume that future sales will be dumped, absent a review of the matter and contrary conclusion by
the DOC. See Matsushita Elec. Indus. Co. v. United States , 569 F. Supp. 853, 856 (C.I.T. 1983), rev’d on other
grounds, 750 F.2d 927 (Fed. Cir. 1984) (Ex. ROK-55); American Permac, Inc. v. United States , 656 F. Supp.
1228 (C.I.T. 1986), aff’d, 831 F.2d 269, cert. denied, 485 U.S. 901, 108 S. Ct. 1067 (Ex. ROK-56).
130 This analysis complies with the directive of the Vienna Convention, Article 31.1 (“A treaty shall be
interpreted in good faith in accordance with the ordinary m eaning to be given to the terms of the treaty in their
context and in the light of its object and purpose.”).

4.198 Korea, in response to a question from the Panel131, subsequently further argued as follows:
4.199 First, as a matter of textual interpretation, there is no relationship between “necessary” in
Article 11.1 and “likely” in Article 11.3, and thus a finding of “likelihood” under Paragraph 3 can
neither satisfy nor fail to satisfy the “necessary” requirement in Paragraph 1. Paragraph 3 begins:
“Notwithstanding the provisions of paragraphs 1 and 2, . . ..” Thus, this Paragraph is an exception
from Paragraphs 1 and 2 that is segregable from them and should not be used to interpret those
Paragraphs.
4.200 Second, this point is confirmed by an examination of the differing requirements and standards
of Paragraphs 2 and 3. Paragraph 3 requires revocation of a duty no later than five years after its
imposition, unless the Member conducts injury and dumping reviews and determines “that the expiry
of the duty would be likely to lead to continuation or recurrence of dumping and
 injury.” In contrast,
Paragraph 2 limits dumping reviews to an examinat ion of “whether the continued imposition of the
duty is necessary to offset dumping.” The use of present-tense language, coupled with the omission
of the “likely to continue or recur” provision, indicates that a forward-looking analysis is not
permitted in regard to Paragraph 2 dumping reviews. The fact that Paragraph 3 specifies a forward-
looking “likely to continue or recur” analysis both for dumping and injury, while Paragraph 2
provides for a “likely” analysis only for injury, demonstrates that the negotiators were aware that they
could extend a forward-looking analysis to dumping as well as to injury under Paragraph 2, but
decided not to do so. For purposes of Article 11.2, then, the question of whether a duty is “necessary
to counteract dumping,” as set out in Paragraph 1, is answered by reference to whether “continued
imposition of the duty is necessary to offset dumping.”
4.201 The negotiators: (i) chose a “likely” standard for Paragraph 3; (ii) did not change the
Paragraph 2 dumping standard; and (iii) included at the start of Paragraph 3 the phrase,
“Notwithstanding the provisions of paragraphs 1 and 2.” These facts confirm that the United States
violated its Article 11 obligations when it conducted a forward-looking analysis of dumping in this
case.
4.202 After finding for three consecutive reviews that no dumping was occurring, the United States
should have revoked on that basis alone. Having fa iled to revoke (in violation of Article 11), the
United States should have conducted only the present-tense dumping examination provided for by
Paragraph 2; the United States violated Paragraph 2 by conducting a forward-looking analysis. But,
even assuming, for the sake of argument, that Paragraph 2 (or, somehow, Paragraph 3) permits the
United States to conduct a forward-looking review, the United States violated those provisions: (i) by
devolving the likely criterion to “no likelihood/not likely” (which enables the United States to
maintain anti-dumping duties years after dumping and any resulting injury have ceased); (ii) by
shifting the burden of proof to Respondents; and (iii) by setting the standard so that, in this case at
least, it simply could not be met. And the United States took all of these actions and created these
insurmountable barriers after finding for three-and-one-half consecutive years that Respondents had
not dumped (and, thus, had not caused injury).
(b) Response by the United States
4.203 The following are the United States arguments in response to Korea's claim:

131 The Panel recalls that the question was as follows: "The Panel notes that Article 11.1 of the ADP
Agreement provides that 'an anti-dumping duty shall remain in force only as long as and to the extent necessary
to counteract dumping which is causing injury', whereas the penultimate sentence of Article 11.3 provides for
the continued application of an anti dumping duty if its expiry 'would be likely to lead to continuation or
recurrence of dumping and injury.' What is the relationship between the concept of necessity in Article 11.1 and
the concept of likelihood in Article 11.3? How does a finding of 'likelihood' under Article 11.3 satisfy the
“necessity” requirement of Article 11.1?"

4.204 Korea focuses on the time period that the DOC examined when it determined that an absence
of dumping by Respondents was “not likely” in Final Results Third Review . In particular, Korea
contends that Article 11.2 of the AD Agreement does not permit investigating authorities (i) to
examine whether dumping will recur, and (ii) to conduct a “forward-looking analysis.” These
arguments fail.
4.205 The United States demonstrated that Article 11 does not require Members to revoke anti-
dumping orders as soon as a Respondent stops dumpi ng. Thus, if an order may cover an exporter or
reseller that was found not to be dumping during the most recent assessment period, it is only logical
that the inquiry under Article 11.2 may, when appropriate, look at whether “dumping will recur.”
There certainly is nothing in Article 11.2 or the context of the AD Agreement which precludes this
type of examination.
4.206 There also is nothing in Article 11 which defines the time period that investigating authorities
must examine when deciding if an order is “necessary to offset dumping.” In the instant case, the
DOC conducted an extensive analysis of the entire record which included Respondents’ past conduct
(e.g., three years of no dumping), as well as data regarding the first part of 1997, which Respondents
characterized as a market upturn.
132 In describing the temporal scope of its review, the DOC stated, in
part:
Common sense, however, dictates that the DOC should, as always, base its determination
on all record evidence.
In this revocation proceeding the DOC considered all publicly available data and
information placed on the record by all parties ...133
4.207 Korea seeks to pick and choose the information in the record that it thinks is most helpful to
Respondents. In doing so, however, it never provid es any authority for its position nor explains why
an investigating authority should not be allowed to rely on the most current information available
when making a determination under Article 11.2.
4.208 Finally, Korea’s construction of Articles 11.2 and 11.3 and, in particular, its discussion of the
term “likely,” is flawed. Article 11.2 articulates a relatively broad standard regarding the revocation
(or “termination”) of anti-dumping duties that implements the “general rule” set forth in Article 11.1.
Article 11.3, on the other hand, articulates a very specific standard. It requires WTO Members to
revoke all anti-dumping measures after five years unless “the authorities determine ... that the expiry
of the duty would be likely to lead to continuation or recurrence of dumping and injury.
134 While it is
true that Article 11.3 (but not Article 11.2) uses the term “likely” in the dumping context, this does
not mean the specific standard does not (or cannot) fit within the more general standard. It simply
means the “likely” standard is mandatory in the context of Article 11.3 and a “permissible”
interpretation of the AD Agreement in the context of Article 11.2. Indeed, it is impossible to imagine
how section 353.25, when it uses a term found in Article 11.2 and Article 11.3, could be anything
other than a permissible interpretation of the AD Agreement.
4.209 The United States, in response to a question from the Panel135, further argued as follows:

132 Final Results Third Review, 62 Fed. Reg. at 39814 (Ex. USA-1).
133 Id.
134 AD Agreement, art. 11.3 (emphasis added by the United States).
135 The Panel recalls that the question was: "Article 11.1 of the ADP Agreement provides that an anti-
dumping duty may only remain in force as long as it is necessary to counteract dumping which 'is' causing
injury. Article VI:1 of GATT 1994 condemns dumping if it “causes” or 'threatens' material injury. The verbs
quoted from these provisions are expressed in the present tense. Does the United States consider that the use of

4.210 Article VI and Article 11 address different questions. Article VI asks whether an anti-
dumping duty needs to be imposed because an industry currently is being injured by dumped imports.
Article 11, on the other hand, takes as a given that the imposition of the definitive anti-dumping duty
was necessary to offset injurious dumping. It, therefore, asks whether the “continued imposition of
the duty is necessary to offset dumping” or whether the injury originally found would be likely to
“continue or recur if the duty were removed or varied” (emphasis added by the United States).
4.211 The Appellate Body has affirmed, on more than one occasion, that the principles of treaty
interpretation laid down in the Vienna Convention should guide panels when they seek to discern the
meaning of WTO agreements. 136 Article 31 of the Vienna Convention provides that the terms of a
treaty must form the starting point for the process of interpretation. In this regard, terms must be
interpreted according to their “ordinary meaning” taking into account, inter alia, their “context” (i.e.,
the other provisions of the agreement).
4.212 If this approach is followed with respect to the language in Article 11 of the AD Agreement,
it becomes quite clear that the provisions of Article 11 do not condition the maintenance of definitive
anti-dumping duties ( i.e., anti-dumping orders) upon a finding that present dumping is presently
causing (or presently threatening to cause) material injury. Specifically, Article 11.2 states that, in
conducting a review, authorities must examine, inter alia , “whether the injury would be likely to
continue or recur if the duty was removed or varied.” This indicates that “recurrence” of injury is
reason to keep an order in effect. In other words, that injury may have ceased does not warrant
revocation of an order if the revocation is likely to cause injury to recur. Similarly, Article 11.3
allows maintenance of anti-dumping duties beyond five years when “expiry of the duty would be
likely to lead to continuation or recurrence of dumping and injury.” The “recurrence” language
indicates that anti-dumping orders can be maintained when dumping and/or injury do not currently
exist, but is likely to recur upon revocation of th e order. In sum, it would be inconsistent with
Articles 11.2 and 11.3 of the AD Agreement to construe Article 11.1 as requiring that an order be kept
in effect only if there is present dumping which is presently causing or presently threatening to cause
material injury.
4.213 In this regard, the panel in the Swedish Plate case found that Article 9.1 of the Tokyo Round
Anti-Dumping Code called for a prospective analysis.
137 But for the deletion of a comma, Article 9.1
is identical to Article 11.1 of the AD Agreement.
(c) Rebuttal arguments made by Korea
4.214 Korea makes the following arguments in rebuttal to the United States' response:
4.215 Paragraph 2 provides for a review of “whether the continued imposition of the duty is
necessary to offset dumping.” The words “is” and “offset” are the keys to this inquiry. The
negotiators chose the present-tense verb “is” and tied it to another present -tense verb, “offset.” They
did not select either “will be” for “is” or “prevent” for “offset.” Nor did they permit a forward-
looking “likely” analysis. Thus, the forward-looking analysis used by the United States is an
impermissible interpretation of this provision.
4.216 Paragraph 3 contains language indicating that the negotiators could have, but decided not to,
expand a Member’s authority to conduct a forward-looking “likely” analysis in conducting dumping

the present tense suggests that anti-dumping measures should only remain in place to the extent that present
dumping is presently causing or presently threatening to cause material injury? If not, why not?"
136 See, e.g., United States – Standards for Reformulated and Conventional Gasoline , WT/DS2/AB/R,
Report of the Appellate Body adopted 20 May 1996, at 17; Japan – Taxes on Alcoholic Beverages ,
WT/DS8/AB/R, Report of the Appellate Body adopted 1 November 1996, at 10.
137 United States - Anti-Dumping Duties on Imports of Stainless Steel Plate from Sweden , ADP/117 and
Corr. 1, Report of the Panel issued 24 February 1994 (unadopted), para. 233.

reviews under Paragraph 2. Paragraph 3 requires revocation of a duty no later than five years after its
imposition, unless the Member conducts injury and dumping reviews and determines “that the expiry
of the duty would be likely to lead to continuation or recurrence of dumping and injury .” In contrast,
Paragraph 2 allows a similar inquiry regarding injury only. Paragraph 2 limits dumping reviews to an
examination of “whether the continued imposition of the duty is necessary to offset dumping.” The
use of present-tense language ( e.g., “offset dumping” vs. “prevent dumping”), coupled with the
omission of the “likely to continue or recur” provision, indicates that a forward-looking analysis is not
permitted in regard to Paragraph 2 dumping reviews. The fact that Paragraph 3 specifies a forward-
looking “likely to continue or recur” analysis both for dumping and injury (and that Paragraph 2
provides for a “likely” analysis for injury, but not dumping) demonstrates that the negotiators could
have chosen to extend a forward-looking analysis to dumping as well as to injury under Paragraph 2,
but decided not to and, instead, expressly limited the analysis. The United States should not be
permitted to engraft a specious requirement on to the plain language of Paragraph 2, especially after
the negotiators chose not to.
(d) Rebuttal arguments made by the United States
4.217 The United States makes the following arguments in rebuttal:
4.218 The purpose of the AD Agreement is to ensure that relief is made available to producers
adversely affected by dumping. The agreement accomplishes this goal by establishing a broad
framework of rights and obligations which regulates the determination of dumping and the application
of remedial anti-dumping duties. Within this framework, Article 11 seeks to ensure that anti-dumping
measures do not become permanent fixtures that take on a life of their own. In particular, Article 11.1
states the general principle that “[a]n anti-dumping duty shall remain in force only as long as and to
the extent necessary to counteract dumping which is causing injury.”
138
4.219 Article 11 does not pursue this principle by stating a per se rule which mandates revocation
whenever a Respondent goes three years without dum ping. Indeed, as the United States has stated
repeatedly throughout this dispute settlement proceeding, Article 11 does not prescribe the specific
circumstances that must lead to revocation or the factors that an administering authority must consider
when deciding if an order is “necessary to offset dumping.” The drafters of Article 11 chose instead
to impose upon Members an obligation to “review,” under certain circumstances, the “need for the
continued imposition” of the anti-dumping duty. Once that review is completed, and only if the
investigating authority “determine[s] that the anti-dumping duty is no longer warranted” based upon
one or more of the reviews described in Article 11.2, must a Member revoke an anti-dumping order.
4.220 Korea’s allegation that Article 11 somehow proscribes a prospective (or “forward-looking”)
analysis under Article 11.2 is completely without merit. First, Article 11, as discussed, does not
define the time period that an investigating author ity must examine when deciding if the “continued
imposition of the duty is necessary to offset dumping.” Second, Article 11.3, footnote 22, clearly
permits a Member with a retrospective assessment sy stem, such as the United States, to maintain an
anti-dumping duty (i.e., an order) even though the most recent assessment period may have revealed
an absence of dumping. Given this fact, it is only logical that the inquiry under Article 11.2 may
involve a prospective analysis of whether dumping is likely to resume. Finally, the ordinary meaning
of the expression “continued imposition,” in Article 11.2, suggests an analysis that goes beyond the
immediate question of whether a Respondent is presently dumping. Rather, it suggests a broad
inquiry into the anti-dumping order’s continuing necessity -- necessity based upon past and expected
behavior. This is precisely the type of inquiry that is provided for under section 353.25(a) of the
DOC’s regulations.

138 AD Agreement, art. 11.1.

4.221 The United States, in response to a question from the Panel,139 further argued as follows:
4.222 Article 11 does not indicate what time period should be considered when determining whether
the continued imposition of the duty is necessary to offset dumping. In most cases under section
353.25(a), the arguments of the parties determine which time period will be important to the DOC’s
analysis. In this regard, the DOC examines current trends that may have some bearing on the
foreseeable future ( e.g., within the coming year). For example, the existence of inventories and
capacity utilization may offer some indication about what is likely to happen in the next few months.
Still, high inventories for different industries may have different implications on the period of time
which is relevant. Similarly, different industries may have business cycles of different lengths.
Therefore, the experience of the United States in administering the anti-dumping duty law suggests
that the specific business cycles and trends of the industry in question are relevant. The appropriate
time period depends on the facts of each case.
4.223 With regard to when the relevant time period is set, it is the parties themselves that provide
evidence deemed relevant to the inquiry. Thus, the DOC does not “establish” a time period under
section 353.25(a). The DOC may conclude as it did in DRAMs from Korea, that, of all the evidence,
some is more probative of likelihood of future dumping than others. However, even in this context,
the DOC still did not “establish” a time period in the sense of declaring evidence related to a
particular time period as irrelevant or inadmissible.
4. Burden of Proof
(a) Claim raised by Korea
4.224 Korea claims that by applying a revocation requirement that the company subject to an anti-
dumping duty prove that it is "not likely" to dump in the future, the United States has shifted the
burden of proof away from the Member imposing the duty in violation of Article 11 of the AD
Agreement. The following are Korea's arguments in support of this claim:
4.225 The regulations applied by the DOC in this case allow the Secretary to revoke the anti-
dumping duties if it finds that, among other things, “[i]t is not likely that [Respondents will] in the
future” dump.
140 US courts reviewing these regulations have found that the Respondent bears the
burden of proving that it is “not likely” to dump in the future (or, alternatively, that there is “no
likelihood” of future dumping).141
4.226 This formulation unjustifiably shifts the burden of proof from the Member imposing the duty,
which must justify continuing the duty, to the responding companies. 142 This is contrary to the text
and structure of Article 11.
4.227 First, the “no likelihood/not likely” criterion is inconsistent with the text of Paragraph 2 of
Article 11. In Paragraph 2 (unlike Paragraph 3), the word “likely” does not apply to dumping, but
only to injury. However, even assuming that it did apply to dumping, the United States has pushed
the text of Paragraph 2 still further without support. The United States has turned the “likely”

139 The Panel recalls that the question was: "At what point during the revocation review proceeding is
the time period for examining the 'not likely' criterion determined and notified to the parties? Has it always
been the same point? If not, why not?
140 See 19 C.F.R. § 353.25(a)(2)(ii) (1996).
141 See, e.g., Sanyo Electric Co. v. United States , 15 C.I.T. 609 (Ex. ROK-50); Toshiba, 15 C.I.T. at
600 and 603 (Ex. ROK-5); Manufacturas Industriales, 666 F. Supp. at 1566 (Ex. ROK-7).
142 As the CIT has stated: “The regulation does not present an objective criterion for determining
whether there is no likelihood of resumption of LTFV sales. Instead, the petitioner [the Respondent before the
DOC] must establish this fact to the satisfaction of the Secretary.” See Toshiba, 15 C.I.T. at 600 (Ex. ROK-5).

standard on its head, transmogrifying it to “not lik ely,” and requiring Respondents to bear the burden
of proving the standard even though Paragraph 2 clearly imposes the burden on Members.
4.228 Moreover, each sentence of Paragraph 2 either: (i) imposes an obligation on a Member that is
maintaining anti-dumping duties (the first and third sentences); or (ii) grants a right to a Respondent
company subject to such duties (the second sentence). In doing so, Paragraph 2 sets forth procedures
to implement the general directive of Paragraph 1 that anti-dumping duties may be imposed by a
Member only to offset dumping that is causing injury. Paragraph 2 does not allow, and cannot
reasonably be interpreted to allow, a Member to impose such substantial obligations on Respondents
seeking revocation.
143
4.229 Second, the DOC’s shifting of the burden of proof, both in general and in DRAMs from
Korea, is inconsistent with the structure of Article 11 and with US obligations under the AD
Agreement. As a derogation from the general principle of free trade the WTO regime protects, the
right to impose anti-dumping duties is granted, but is tightly circumscribed, by the text of the AD
Agreement.144 Where a party has been found to be dumping and thereby injuring a domestic industry,
a Member may impose duties. However, this is the limit of the Member’s discretion.
4.230 Paragraph 1 of Article 11 prohibits a Member from maintaining a duty where no dumping is
occurring (or has occurred). And, if a Member is not allowed to impose or maintain a duty absent
dumping, it certainly cannot do so and, then, condition revocation on a Respondent’s meeting the
burden of proving to the satisfaction of the Member that dumping is “not likely” to recur. Thus,
where a Member’s own authorities have concluded--for three consecutive years--that a Respondent
has not dumped, the Member is obliged by Article 11 to revoke the duty. On its face, Article 11 does
not permit a Member to force a Respondent to bear the burden of proving some speculative “fact.”
4.231 The DOC’s regulations, on their face and as applied, permit the DOC to shift the burden of
proof to a Respondent and to employ the “no likelihood/not likely” criteria in a biased fashion.
Therefore, the United States has violated and is violating Article 11 of the AD Agreement.
(b) Response by the United States
4.232 The following are the United States' arguments in response to Korea's claim:
4.233 Under section 353.25(a)(2) of the DOC’s regulations, an absence of dumping for three years
does not entitle a Respondent to revocation.145 The agency must also be satisfied that a resumption of
less-than-normal-value sales to the United States by the Respondent is not likely.
4.234 The DOC’s likelihood determination is case-specific. It engages in a fact-intensive, case-by-
case analysis of all of the information on the record in order to determine if a resumption of less-than-
normal-value sales to the United States is “not likely.”146
4.235 In administrative proceedings in which the parties do not submit evidence or argument
concerning the likelihood of resumption of dumping, the fact that a Respondent has not dumped for
three consecutive years and certified that it will not dump in the future may constitute the only

143 This is particularly true where, as here, the authority found in three consecutive years that
Respondents were not dumping (and, thus, perforce were not causing injury). Moreover, where, for three years,
a Respondent has been found not to be dumping, Article 11 requires the Member to revoke the anti-dumping
duties.
144 See United States-Anti-Dumping Duties on Imports of Stainless Steel Plate from Sweden
(24 February 1994), ADP/117 (unadopted).
145 19 C.F.R. § 353.25(a)(2) (1997) (Ex. USA-24). In its first submission, Korea mistakenly claims that
three consecutive years of no dumping “satisfied the requirements for revocation set out in 19 C.F.R.
§ 353.25(a)(2) (1996).”
146 19 C.F.R. § 353.25(a)(2) (1997) (Ex. USA-24).

evidence in the administrative record on the likelihood issue. 147 In such cases (which constitute the
vast majority since 1980), the DOC has generally found that a resumption of dumping is not likely
based upon the un-controverted record evidence.148 Over the years, this practice has evolved into a de
facto presumption that if a Respondent has not dumped within the prior three-year period, it is not
likely to resume dumping in the future.149
4.236 In contrast, in cases in which the parties raise concerns and submit evidence about the
likelihood of resumption of dumping, the DOC anal yzes the arguments and evidence, and decides
whether or not to revoke based upon a review of all of the record evidence. Sometimes this process
produces a result favorable to the petitioning industry in the United States, 150 and sometimes it does
not.151

147 Tatung Co. v. United States, 18 CIT 1137, 1144 (1994) (Ex. USA-37).
148 See, e.g., Red Raspberries From Canada; Final Results of the Anti-dumping Duty Administrative
Review, and Revocation in Part of the Anti-dumping Duty Order , 57 Fed. Reg. 49686, 49686-88 (1992); Final
Results of Anti-dumping Duty Administrative Reviews: Fishnetting of Man-made Fibers From Japan , 56 Fed.
Reg. 49456, 49457 (1991); Elemental Sulphur From Canada; Final Results of Anti-dumping Duty
Administrative Review and Revocation In Part , 56 Fed. Reg. 16068 (1991) (" Sulphur from Canada "); Spun
Acrylic Yarn From Japan; Final Results of Anti-dumping Duty Administrative Review and Revocation in Part ,
52 Fed. Reg. 43781, 43782 (1987); Clear Sheet Glass From Japan; Final Results of Administrative Review and
Revocation of Anti-dumping Finding , 47 Fed. Reg. 14506 (1982). These administrative determinations appear
in the order cited at Ex. USA-38 through Ex. USA-42.
149 See New AD Regulations , 62 Fed. Reg. at 27326 (Ex. USA-43). But see, e.g., Certain Circular
Welded Carbon Steel Pipes and Tubes from Taiwan; Final Results of an Anti-dumping Duty Administrative
Review and Determination not to Revoke in Part , 56 Fed. Reg. 8741, 8742 (1991) (Ex. USA-44); and Final
Results of Anti-dumping Duty Administrative Review; Large Power Transformers From Italy , 53 Fed. Reg.
29367, 29370 (1988) (Ex. USA-45). In both of these cases, the DOC was not satisfied that future dumping was
unlikely, despite the apparent absence of any comment or argument from the petitioning industry.
150 See, e.g., Brass Sheet and Strip From Germany; Final Results of Anti-dumping Duty Administrative
Review and Determination Not To Revoke in Part , 61 Fed. Reg. 49727, 49732 (1996) (“Brass Sheet from
Germany”); Television Receivers, Monochrome and Color, From Japan; Final Results of Anti-dumping Duty
Administrative Review and Determination Not To Revoke in Part , 54 Fed. Reg. 35517, 35518-19 (1989)
(“Televisions from Japan”); Impression Fabric of Man-Made Fiber From Japan; Final Results of Anti-dumping
Duty Administrative Review , 52 Fed. Reg. 41601, 41602 (1987); High Power Microwave Amplifiers and
Components Thereof From Japan; Final Results of Anti-dumping Duty Administrative Review , 51 Fed. Reg.
43402, 43403 (1986); Cadmium From Japan; Final Results of Administrative Review of Anti-dumping Finding
and Determination Not To Revoke , 46 Fed. Reg. 50815, 50816 (1981); Canned Bartlett Pears From Australia;
Final Results of Administrative Review of Anti-dumping Finding and Determination Not to Revoke , 46 Fed. Reg.
43224, 43224-25 (1981). These administrative determinations appear in the order cited at Ex. USA-46 through
Ex. USA-51.
151 See, e.g., Steel Wire Rope From the Republic of Korea; Final Results of Anti-dumping Duty
Administrative Review and Revocation in Part of Anti-dumping Duty Order , 62 Fed. Reg. 17171, 17173-74
(1997) (“Steel Rope from Korea ”); Certain Forged Steel Crankshafts From the United Kingdom; Final Results
of Anti-dumping Duty Administrative Review and Revocation of Anti-dumping Duty Order , 62 Fed. Reg. 16768,
16771 (1997); Fresh Cut Flowers From Mexico; Final Results of Anti-dumping Duty Administrative Review and
Revocation in Part of Anti-dumping Duty Order , 61 Fed. Reg. 63822, 63825 (1996) (“ Flowers from Mexico ”);
Antifriction Bearings (Other Than T apered Roller Bearings) and Parts Ther eof From Italy; Final Results of
Anti-dumping Duty Administrative Reviews and Revocation In Part of an Anti-dumping Duty Order , 60 Fed.
Reg. 10959, 10967 (1995); Flowers From Colombia , 59 Fed. Reg. at 15167 (Ex. USA-30); Final Results of
Anti-dumping Duty Administrative Review and Revocation in Part: Titanium Sponge From Japan , 57 Fed. Reg.
557, 557 (1992) (“ Sponge from Japan ”); FCOJ from Brazil , 56 Fed. Reg. at 52511 (Ex. USA-31); Color
Television Receivers, Except for Video Monitors, From Taiwan; Final Results , 55 Fed. Reg. 47093, 47097
(1990); Printed Vinyl Film From Brazil; Final Results of Administrative Review of Anti-dumping Finding and
Revocation in Part, 49 Fed. Reg. 33158, 33158 (1984).
These administrative determinations appear in the order cited at Ex. USA-52 through Ex. USA-58. In
Sponge from Japan , the notice states that “[t]he petitioner indicated that they had no objection to this
revocation.” 57 Fed. Reg. at 557. However, in an ear lier, related notice, the petitioner’s objection to revocation
on various grounds was made evident. See Titanium Sponge From Japan; Final Results of Anti-dumping Duty

4.237 US courts have held that the burden is on the party seeking revocation to come forward with
"real evidence" 152 to persuade the DOC to revoke the order. 153 However, once the factual record
closes, all such burdens evaporate and it falls to the DOC to make a determination that is in
accordance with law and based upon substantial evidence.154
4.238 The DOC closed the administrative record to new factual information on 2 May 1997. It gave
all parties to the proceeding a full and fair opportunity to comment in writing upon the facts in the
record. The DOC held a public hearing on 5 May 1997 which was attended by Respondents and
Micron. Once all the facts and arguments were identified, the DOC analyzed everything in the
administrative record which bore on the likelihood issue. It then summarized its conclusions in
memoranda which contain very detailed evaluations of company-specific, confidential information
provided by Respondents and several of their OEM customers.
155 Among other things, the DOC
examined the nature of the subject merchandise, trends in the domestic and home market industries,
and currency movements. The agency also conducted extensive analyses of supply and demand, price
trends during all phases of the business cycle, and the importance of the US market to the
Respondents.
4.239 This type of fact-intensive, case-by-case analysis was (and is) fully consistent with the DOC’s
long-standing practice of examining all relevant economic factors and other information on the record
in a particular case. 156 In the instant case, it led to a determination not to revoke the order that was
based upon facts which were properly established, and whose evaluation was unbiased and objective
4.240 Korea argues that the DOC’s regulations, “on their face” and as applied in Final Results Third
Review, permit the DOC to shif t the burden of proof to a Respondent to show that a resumption of
dumping is “not likely.” Korea also contends that the DOC employs the “not likely” standard in its
regulations in a “biased fashion.” Both situations, Korea asserts, violate Article 11 of the AD
Agreement.

Administrative Review and Tentative Determination To Revoke in Part , 54 Fed. Reg. 13403, 13405 (1989)
(comment 9) (Ex. USA-59).
152 Sanyo Elec. Co. v. United States , 15 CIT 609, 614 (1991) (“the investigation was conducted at
Sanyo’s request, and it was for Sanyo to come forward with real evidence to persuade Commerce to revoke the
order”), citing Manufacturas Industriales De Nogales, S.A. v. United States , 666 F. Supp. 1562, 1566 (Ct. Int’l
Trade 1987) (hereinafter “Manufacturas”) (Ex. USA-60).
153 The DOC, in practice, actually places the burden initially on the petitioning US industry to come
forward with evidence relevant to the “not likely” issue. It is only after the petitioner has satisfied this
requirement that the burden, in effect, switches to the Respondent to come forward with evidence which
indicates that a resumption of dumping is “not likely.”
This is not to say, however, that the DOC must deny revocation under these circumstances if a
Respondent fails to put evidence on the record (beyond three years of no dumping) regarding the likelihood
issue. The ultimate question in every proceeding is wh ether the weight of the evidence justifies maintenance of
the order. In this regard, under US law, it is incumbent upon the DOC to render a decision that is based upon
substantial evidence and in accordance with law. 19 U.S.C. § 1516a (1998) (Ex. USA-62). Moreover, the DOC
may, quite apart from evidence introduced by the parties, exercise its investigatory powers (as it did in the
instant case) to collect public information on its own to help it decide the “not likely” issue. See, e.g.,
Televisions Receivers, Monochrome and Color, From Japan; Determination Not To Revoke in Part , 55 Fed.
Reg. 11420, 11422 (1990) (Ex. USA-61).
154 19 U.S.C. § 1516a (1998) (Ex. USA-62). See also 2 Charles H. Koch, Jr. Administrative Law and
Practice § 5.51 at 169 (2d ed. 1997) (“In reality then the burden of persuasion always rests with the agency.”)
(Ex. USA-63).
155 See, e.g., Charts from Agency Analyst to File ("Prelim. Analysis") (Ex. USA-13); Analysis
Memorandum from Program Manager to Deputy Assistant Secretary of Import Administration, 16 July 1997
("Final Analysis") (Ex. USA-34).
156 See, e.g., Steel Rope from Korea , 62 Fed. Reg. at 17173-74 (Ex. USA-52); Brass Sheet from
Germany, 61 Fed. Reg. at 49730-32 (Ex. USA-46); FCOJ from Brazil, 56 Fed. Reg. at 52511 (Ex. USA-31).

4.241 The AD Agreement does not prevent importing countries from requiring Respondents to
come forward with evidence which indicates that a resumption of dumping is “not likely.” Article 11
does not prescribe the specific factors that an inve stigating authority must consider when determining
whether anti-dumping duties are “warranted.” It also does not prescribe the specific procedural steps
that must be followed when conducting a review under Article 11.2. Within this framework, the “not
likely” standard is a reasonable exercise of the United States’ legitimate interest in ensuring that relief
to those domestic industries that have been adversely affected by dumping is not withdrawn earlier
than is “necessary.”.
4.242 Whether it is “not likely” that dumping will resume is an issue that directly and logically
relates to whether anti-dumping duties continue to be necessary or warranted. The fact that an
exporter revises its prices to eliminate dumping while the anti-dumping remedy is in place does not
necessarily mean that the exporter will not resume dumping once the remedy is removed. By
considering such factors as trends in costs and prices, along with Respondents’ pricing practices over
the prior three-year period, the DOC is able to evaluate whether the anti-dumping order remains
“necessary to offset dumping.” In this respect, there is nothing facially invalid about the DOC’s
revocation standard, in general, or the “not likely” standard, in particular. The DOC’s standard,
therefore, reflects a “permissible” interpretation of Article 11 of the AD Agreement.
4.243 Lastly, Korea’s position, if taken to its logical extreme, would preclude importing countries
from imposing any type of evidentiary burden on Respondents during the course of a proceeding
under Article 11. This would be inconsistent with numerous provisions in the AD Agreement. For
example, Article 6 of the agreement reflects the long-standing practice of national investigating
authorities to solicit information on sales and costs by means of a questionnaire and to allow
interested parties otherwise to submit information on the record in support of their positions regarding
the issue of dumping.
157 The solicitation of comparable information in the context of a proceeding
under section 353.25(a) of the DOC’s regulations is by no means unfair or unusual. Finally, in the
instant case, the DOC did not demand that Respondents prove a negative (or the impossible) -- that
they would not dump if the order was revoked. Instead, the DOC established a procedure “at the
request of the parties” for the submission of factual information regarding market conditions,
coincidence of dumping with downturns, and related matters.158
(c) Rebuttal arguments made by Korea
4.244 Korea makes the following arguments in rebuttal to the United States responses:
4.245 The US revocation scheme, on its face and as applied, violates Article 11 of the AD
Agreement. Because the US revocation regime, on its face and as applied, shifts the burden of proof
to Respondents, the Panel should find that the United States has violated Article 11.
4.246 The US first submission ostensibly takes issue with Korea’s demonstration, but actually
contains several statements that confirm that the US regime does, indeed, place the burden of proof on
Respondents. For example, the United States declares:
The agency must also be satisfied that a resumption of less-than-normal-value sales to
the United States by the Respondent is not likely.
The use of the word “satisfied” indicates that the burden of proof is on the Respondent, and not on the
agency or the petitioner. 159 Later, at paragraph 77, the United States actually agrees with Korea that

157 AD Agreement, art. 6.
158 Final Results Third Review, 62 Fed. Reg. at 39810 (Ex. USA-1).
159 For example, instead of “must also be satis fied,” the United States could have used “must
determine” or “must conclude” or “must find.”

“US courts have held that the burden is on the party seeking revocation to come forward with ‘real
evidence’ to persuade the DOC to revoke the order.”
4.247 Thus, by its own admission, the United States’ revocation regime shifts the burden of proof to
respondents. The United States improperly imported the “likely” standard from injury reviews under
Paragraph 2 to dumping reviews, thereby expanding the burden of proof applied in dumping reviews.
Then, the United States turned the standard on its head, transmogrifying it to “not likely,” and
requiring Respondents to bear the burden of proving the standard even though Paragraph 2 clearly
imposes the burden on Members. This extension and shifting of the burden of proof violates
Article 11 of the AD Agreement, which places the burden squarely on the administering authorities.
4.248 The United States several times has stated that there will be dire consequences if the Panel
accepts Korea’s interpretation of Article 11. For example, the United States asserts that Korea’s
position, “if taken to its logical extreme,” would preclude a Member from imposing any evidentiary
burden on a Respondent seeking revocation. This might be true if one took Korea’s position to its
illogical extreme, but nothing which Korea has advanced even suggests this.
4.249 Under the US system, the Korean Respondents demonstrated for three consecutive reviews
that they were not dumping. That is an exceedingly substantial evidentiary burden. It required
Respondents to comply with US dumping laws and to submit voluminous data, all of which the DOC
verified, to demonstrate their compliance.
4.250 But, having done so, the United States was required to revoke the definitive duty, unless it
initiated reviews under Paragraph 2 and found that “continued imposition of the duty is necessary to
offset dumping” and that the “injury would be likely to continue or recur if the duty were varied.”
(d) Rebuttal arguments made by the United States
4.251 The United States makes the following arguments in rebuttal:
4.252 In its first written submission, Korea states that section 353.25(a) of the DOC’s regulations,
“on its face and as applied,” improperly requires Respondents to bear the burden of showing that a
resumption of dumping is “not likely.” At no time since then has Korea ever explained how
section 353.25(a), “on its face,” places the burden of proof on Respondents to show anything. Korea
does try to elicit support for its position by emphasizing the negative phraseology of the not-likely
standard, and even characterizing the standard as “transmogrified.” However, whether the standard is
“transmogrified”, it is still just a standard and nothing on “the face” of the regulation speaks to
allocation of the burden of proof.
4.253 In its first written submission, the United States demonstrated that the DOC did not place the
burden of proof (in the sense of a burden of persuasion) on the Korean Respondents. At the first
meeting of the Panel, Korea attempted to rebut this demonstration by pointing to the fact that in the
Final Results Third Review , the DOC cited to several court decisions that, according to Korea, stand
for the proposition that a party seeking revocation of an anti-dumping order in the United States bears
the burden of proving that a resumption of dumping is “not likely.” The answer to Korea's arguments
is that (i) the court decisions do not stand for the proposition claimed by Korea, and (ii) the DOC's
reliance on the court decisions was appropriate.
4.254 Unfortunately, the term "burden of proof" is often used with imprecision in GATT/WTO
jurisprudence. It tends to carry with it excess baggage that more often than not creates confusion on
the part of observers and practitioners, alike.
4.255 In general, "burden of proof" is used to describe two different concepts. The first is the
"burden of persuasion" (otherwise know as the necessity of establishing a fact) which never shifts
from one party to the other at any stage of a proceeding in which the relevant rules establish such a

burden. The second concept is the "burden of going forward with the evidence," which may shift
back and forth between the parties as a proceeding progresses.160 The DOC imposed a burden of proof
on the Respondents in the sense of a burden of go ing forward with the evidence once the US industry
(represented by Micron Technology, Inc. (“Micron”)) came forward with evidence suggesting that
dumping would recur if the anti-dumping order we re revoked. Korea, however, asserts that the DOC
imposed a burden of proof in the sense of a burden of persuasion.
4.256 Turning to the court decisions referred to by Korea and cited by the DOC in Final Results
Third Review , a review of these decisions establishes that the courts did not impose a burden of
persuasion on exporters seeking the revocation of an order. 161 Instead, the courts were discussing the
"burden of proof" in the sense of the burden of coming forward with evidence. This fact can best be
understood by discussing the decisions in reverse chronological order.
4.257 The most recent cases were Sanyo and Toshiba, which were issued within a few weeks of
each other.
162 In both decisions, the US Court of International Trade (“CIT”) stated that it was for the
party seeking revocation to come forward with re al evidence to persuade the DOC to revoke the
order.163 In both decisions, the court cited to Manufacturas Industriales De Nogales, S.A. v.
United States, 666 F. Supp. 1562, 1566 (Ct. Int’l Trade 1987) (Ex. USA-60). Manufacturas
Industriales, in turn, cited to the decision of the US Court of Appeals for the Federal Circuit (“Federal
Circuit”) in Matsushita Electric Industrial Co. v. United States , 750 F.2d 927 (Fed. Cir. 1984)
(additional views of Nichols, J.), for the proposition that it was for the proponent of revocation to
come forward with real evidence to persuade the DOC to revoke an order.164
4.258 In Matsushita,165 the ITC conducted a review of an anti-dumping order and determined that
injury was likely to recur if the order were re voked. The CIT overturned the ITC's determination,
ruling that the ITC had inappropriately placed the burden of proof (as in burden of persuasion) on the
parties seeking revocation. On appeal, the Federal Circuit reversed the decision of the lower court,
thereby sustaining the ITC's determination. Among other things, the Federal Circuit held that the ITC
had not placed the burden of proof on the parties seeking revocation:
Finally, we do not discern that the ITC imposed a "burden of proof" on the Japanese
importers to prove no injury was likely to occur. The ITC's decision does not depend on
the "weight" of the evidence, but rather on the expert judgment of the ITC based on the
evidence of record. On review, the question is whether there was evidence which could
reasonably lead to the ITC's conclusion, that is, does the administrative record contain
substantial evidence to support it and was it a rational decision?166
In his separate views, Judge Nichols elaborated on this point:
The CIT judge said this lament reflected an impermissible throwing of the burden of
proof on the proponents of lifting the order. I do not agree. There is a subtle but

160 See, e.g., Black’s Law Dictionary, 6th ed. (West Publishing Co., 1990), p. 196 (“burden of proof”
describes two different concepts) (Ex. USA-85).
161 The court decisions in question are cited in Final Results Third Review, 62 Fed. Reg. at 39812 (Ex.
USA-1).
162 Sanyo Elec. Co. v. United States , 15 CIT 609 (1991) (Ex. USA-60); Toshiba Corp. v. United States ,
15 CIT 597 (1991) (Ex. USA-69).
163 Sanyo, 15 CIT at 614 (Ex. USA-60); Toshiba, 15 CIT at 603 (Ex. USA-69).
164 666 F. Supp. at 1566 (Ex. USA-60).
165 In the judicial hierarchy of the federal court sy stem in the United States, the Federal Circuit is
superior to, and reviews the decisions of, the CIT. In this particular instance, Judge Nichols' views were issued
separately as an appendix to the decision (rather than as a concurring opinion) b ecause, according to the court,
"they read so well as separately stated." Matsushita, 750 F.2d at 936, n. 14 (Ex. USA-60).
166 Id. at 933 (citations omitted).

recognizable difference between the burden of proof and the burden of going forward.
This investigation was conducted at all because these attorneys had requested on behalf
of their clients that it should be. If they did not intend to waste [ITC] resources, it would
be reasonable to think they would be in possession of information which, if believed and
not controverted, would constitute a prima facie case ...167
4.259 Thus, Matsushita distinguished between the burden of persuasion and the burden of coming
forward with evidence, finding that it was permissible for the ITC to impose a burden of coming
forward on the proponent of revocation. Manufacturas Industriales relied on this proposition, as did
Sanyo and Toshiba, in turn, through their reliance on Manufacturas Industriales. Thus, when the
DOC cited to Matsushita, Sanyo, and Toshiba in its discussion of the evidentiary burden placed on the
Korean Respondents in the Final Results Third Review, it was referring only to the burden of coming
forward with evidence and not, as asserted by Korea, the ultimate burden of persuasion.168
4.260 Further support for this view can be found in the DOC’s practice under section 353.25(a) of
its regulations. The DOC actually places the burden initially on the petitioning US industry to come
forward with evidence relevant to the “not likely” issue. If the petitioning industry fails to present
evidence, the DOC typically revokes the underlying anti-dumping order even though the concerned
Respondent(s) may have presented no evidence directly bearing on the “not likely” criterion. If, as
Korea asserts, the burden of proof (as in the burden of persuasion) truly were on the Respondent to
show that a resumption of dumping was “not like ly,” the DOC could not revoke an order if the
Respondent did not present any evidence directly bearing on the not-likely criterion. As a matter of
law, a party that bears the burden of persuasion cannot prevail if that party presents no evidence.
4.261 In sum, Korea is wrong, as a factual matter, when it claims that the DOC imposed a burden
of persuasion on the Korean Respondents. 169 Once Micron presented a prima facie case against
revocation, the burden effectively shifted to Respondents to come forward with evidence to rebut
Micron's evidence. However, the ultimate burden of persuasion always remained with the DOC.170
4.262 With the facts thus clarified as to what the DOC actually did, the United States does not
understand Korea to be complaining about the fact that the Korean Respondents were required to
present evidence relating to the likelihood of future dumping once Micron had submitted evidence
establishing a prima facie case against revocation. If Korea is complaining of such a requirement,
then the United States simply notes that the imposition of such a burden is reasonable and is not
precluded by anything in the AD Agreement.

167 Id. at 937.
168 The DOC could not have been referring to the burden of persuasion, as claimed by Korea, because
the cited court decisions dealt with the burden of proof in the sense of the burden of coming forward with
evidence.
169 Thus, Korea has failed to meet the burden placed on it by customary international law to prove,
before this Panel, the truth of the fact asserted. United States – Measures Affecting Imports of Woven Wool
Shirts and Blouses From India , WT/DS33/AB/R, Report of the Appellate Body adopted 23 May 1997, at 16
(hereinafter “Wool Shirts”). I is an accepted principle of public international law that municipal law and practice
is a fact to be proven before an international tribunal, such as the present one. Case Concerning Certain
German Interests in Polish Upper Silesia , [1926], PCIJ Rep., Series A, No. 7, at 19 (Ex. USA-6); Case
Concerning the Payment in Gold of Brazilian Federal Loans Contracted in France , [1929], PCIJ Rep.,
Series A, No 15, at 124-25 (hereinafter “ Brazilian Loans ”) (Ex. USA-7). See also Brownlie, pp. 40-42 (Ex.
USA-8).
170 Although the DOC did not impose a burden of persuasion on the Korean Respondents, it must be
noted that nothing in the AD Agreement prevents an investigating authority from imposing such a burden on a
Respondent. Indeed, the very fact that Article 11.2 does not require revocation of an anti-dumping order unless
and until an investigating authority makes certain findings, and given the broad standard set forth in Article 11.2
(which only requires revocation if the relief provided by an order is no longer “warranted”), it is hard to imagine
how the imposition of such a burden could rest upon an impermissible interpretation of Article 11.

5. Impossibility to Meet the DOC’s Revocation Standard
(a) Claim raised by Korea
4.263 Korea claims that the DOC’s revocation standard was impossible to meet in this proceeding
and, thus, both on its face and as applied, is inconsistent with Article 11 of the AD. The following are
Korea's arguments in support of this claim.
4.264 Article 11.1 of the AD Agreement requires Members to apply anti-dumping duties only for as
long as they are “necessary to counteract dumping which is causing injury.” Article 11.2 of the AD
Agreement requires that, if “the anti-dumping duty is no longer warranted, it shall be terminated
immediately.” In the Third Administrative Review (the Review), the United States failed to
determine objectively and fairly “whether the continued imposition of the duty is necessary to offset
dumping.”
171 Therefore, the United States violated its obligations under the AD Agreement. The
DOC attempted to camouflage its departure from its normal revocation practice (in which it revokes
solely on the basis of three years of no dumping, plus a promise not to dump in the future) and
imposed a subjective and unnecessary “no likelihood/not likely” requirement, based on speculation
and conjecture of future dumping, that was impossible for Respondents to satisfy.
4.265 The DOC erroneously supported its departur e from its normal revocation practice by
declaring that DRAM producers rou tinely dump during cyclical downturns. 172 As precedents for its
“conclusion,” the DOC cited the antidumping proceedings against the Japanese DRAM producers in
the mid-1980’s173 and against the Korean DRAM producers in 1992. 174 The DOC supported its
reliance on these past proceedings by surmising that, because DRAMs are commodity products, any
company from any country is likely to dump in any cyclical downturn. On this basis, the DOC
concluded that it must examine a downturn period and determine that Respondents would not dump in
that period, before it could revoke the order.
175
4.266 All of the parties accept that the DRAM indust ry is characterized by upturns and downturns.
However, as Respondents established during the many phases of the proceeding, prices of imports in
economic downturns are not necessarily “dumped” prices. Indeed, during the last two severe
downturns in the DRAM market, the DOC found that neither Respondent had dumped. The first
downturn occurred during 1993, a period which the First Administrative Review covered. As
Figure 1
176 shows, the book-to-bill ratio 177 consistently declined during 1993. Yet, the DOC found
that Respondents were not dumping. The second downturn occurred in late 1995 and early 1996,
during the period of the Third Administrative Review. Again, the book-to-bill ratio declined (even
more precipitously than in 1993). Yet, still, the DOC found Respondents had not dumped. Thus,
contrary to its conclusions en route to denying revocation in the Third Annual Review, the DOC,
itself, previously had found that Respondents had not dumped during a variety of market conditions,
including the last two cyclical downturns.

171 Anti-Dumping Agreement, Article 11.2.
172 Notice of Final Results of Antidumping Duty Administrative Review and Determination Not to
Revoke Order in Part; DRAMs from Korea, 62 Fed. Reg. 39809, 39810 (24 July 1997) (Ex. ROK-3).
173See, e.g., 64K Dynamic Random Access Memory Components (64K DRAMs) from Japan; Final
Determination of Sales at Less than Fair Market Value, 51 Fed. Reg. 15943 (29 April 1986) (64K DRAMs from
Japan) (Ex. ROK-53).
174 Final Determination of Sales at Less than Fair Value: Dynamic Random Access Memory
Semiconductors of One Megabit and Above from the Republic of Korea , 58 Fed. Reg. 15467 (23 March 1993)
(Ex. ROK-9).
175 Notice of Final Results of Antidumping Duty Administrative Review and Determination Not to
Revoke Order in Part; DRAMs from Korea, 62 Fed. Reg. 39809, 39810 (24 July 1997) (Ex. ROK-3).
176 See Case Brief of LG Semicon, Case No. A-580-812 (21 April 1997) at 19 (Ex. ROK-2).
177 The book-to-bill ratio is a measure designed by the U.S. Semiconductor Industry Association and
used by market experts to track market cyclicality. It represents the value, month by month, of new orders
(book) to deliveries (bill).

4.267 The explanation for the DOC’s findings of no dumping during the previous two downturns is
quite simple. DRAM production costs constantly decrease and, thus, downward price pressure,
whether due to “supply/demand cyclicality” or another cause, does not inexorably lead to dumping, as
the DOC claims in the Final Results.178
4.268 By determining that a future downturn must be examined because of an alleged history in the
DRAM industry of dumping during cyclical downturns, and coupling this with the “no likelihood/not
likely” criterion, the DOC set an impossible, completely subjective standard for revocation.
Moreover, to make this determination, the Depart ment used speculative price and cost scenarios
proffered by the U.S. petitioner of what might occur in the future. An authority will always find that
dumping may occur in the future if the variables of its analysis are biased by speculation and
conjecture masquerading as data proffered by a petitioner. The DOC’s use of this test of whether
dumping may occur in the future if certain economic variables might be realized was an unnecessary
and unsupported exercise leading to a foregone conclusion.
4.269 In addition, the DOC’s reliance on the earlier Japanese and Korean DRAM dumping cases to
establish the necessity for conducting a speculative analysis in a cyclical downturn was biased and
unsound. The economic conditions, analytical variables and results of the earlier Japanese and
Korean DRAM investigations are dissimilar. Thus, the Japanese investigation is not analogous and,
in any case, this proceeding is about Korean DRAM manufacturers, not Japanese DRAM
manufacturers.
4.270 First, in the DRAMs from Japan investigation, the DOC found that all of the respondents had
dumped.
179 In contrast, as discussed above, in the 1992 DRAMs from Korea investigation, the largest
producer, Samsung Electronics, was excluded from the investigation because it was found not to have
dumped (Samsung accounted for over 70 percent of Korea’s imports). Second, in contrast to the
DRAMs from Japan investigation, where the “all others” margin was 39.68 percent, the “all others”
margin in the DRAMs from Korea case was only 4.55 percent.180 Third, although the DOC found that
the Japanese producers had dumped in a cyclical downturn, the DOC has found that the Korean
DRAM manufacturers have not dumped during cyclical downturns. Finally, the two Korean DRAM
manufacturers remaining subject to the anti-dumping duty order have not dumped in three consecutive
administrative reviews and have filed with the DOC the requisite statement affirming that they will
not dump in the future (and will submit to reinstatement in the order if they do).
4.271 Because there was no reliable evidence on the record that Korean DRAM manufacturers will
dump in the next downturn or any future downturns, the DOC’s premise for departing from its normal
revocation practice of examining historical data to make its “likelihood” determination is unsupported
and an abuse of discretion. Even if one assumes that the DOC’s examination of whether there is a
likelihood of dumping in the future by Korean DRAM manufacturers was acceptable under Article 11
(it was not), the examination should be based on actual verified data on the record – no dumping or
insignificant margins in the investigation, no dum ping by the two remaining Respondents for three
consecutive years and a pledge not to dump in the future.

178 See 62 Fed. Reg. 39809, 39810 and 39817 (24 July 1997) (Ex. ROK-3).
179 See, e.g., Dynamic Random Access Memory Semiconductors of 256 Kilobits and Above from Japan:
Preliminary Determination of Sales at Less Than Fair Value , 51 Fed. Reg. 9475, 9477 (19 March 1986)
(DRAMs from Japan) (Ex. ROK-54).
180 “All others” rates are generally representative of the average dumping margins for an investigation.
The actual average dumping margin for the investigation is less than two percent when Samsung’s de minimis
margin of 0.22% is included. A peculiar twist of “all others” calculations omits zero or de minimis margins
from the “all others” rate calculation. Therefore, even though each Respondent’s dumping margin decreased
when the Department amended its final results, the “all others” rate increased. A more realistic comparison
would include Samsung’s results and would yield an “all others” or average rate of less than two percent. Thus,
in DRAMs from Korea, the weighted average margin for all Respondents met the current de minimis standard of
the Anti-Dumping Agreement.

4.272 The AD Agreement envisions a decision-making process based on fact, not speculation. The
facts in this case indicate that the Korean manufacturers have not dumped since the investigation and
that the two Respondents remaining in the investig ation have a multi-year record of trading at or
above normal value. These two Respondents have provided the statements required by the DOC that
they will not dump in the future and will submit to reinstatement in the order if they do. This pledge
and the empirical data before the DOC clearly indicate that the DOC was required to revoke the order.
The DOC’s failure to do so violates Article 11 of the AD Agreement.
4.273 In deciding not to revoke the duty, the DOC focused on the period immediately following the
Third Administrative Review and rejected Respondents' requests that it examine a more recent - and
therefore more relevant - period (assuming, for the sake of argument, that it should conduct such an
analysis in the first place).
181 As Respondents pointed out during the Third Administrative Review :
the issue before the Department is not what may or may not have happened last year. It is
what is likely to happen in the future if the order is revoked. In order to make a
reasonable prediction of the future, the Department's decision must be based on the most
recent information available
182.
4.274 The Department failed to correct this deficiency in its Final Results183. It violated Article 11.2
by failing to conduct a forward-looking analysis (assuming, for the sake of argument, it was not
simply required to revoke the order).
(b) Response by the United States
4.275 The following are the United States' arguments in response to Korea's claim:
4.276 Korea tries to convince this Panel that: (i) downturns in the DRAM market occurred during
the first and third administrative reviews; (ii) respondents were found not to be dumping during these
periods; therefore, (iii) the Department erred when it determined that market downturns “inexorably”
lead to dumping. This flaw in the DOC’s thinking , Korea argues, also led to a legal standard for
revocation that allegedly is impossible for producers in cyclical industries to meet. For the following
reasons, these arguments are without merit and should be rejected by the Panel.
4.277 To begin with, the periods covered by the first and third reviews ( i.e., 1993 to 1995) were, as
discussed above, unusually robust. 184 According to every important measure ( e.g., prices, revenues,
and profits), the DRAM industry was not in a “downturn” during this time period. Korea stumbles on
this point because it appears to focus exclusively on “book-to-bill”data prepared by the U.S.
Semiconductor Industry Association (“SIA”). However, evidence on the record establishes that the
SIA stopped publishing this data around the end of 1996 because its utility to market forecasters was
limited.
185
4.278 Secondly, Korea ignores the lag that tends to exist between highs and lows in the book-to-bill
ratio, and turning points in sales growth. Put another way, even if the book-to-bill ratio is an accurate
indicator of market cycles for DRAMs, Korea overlooks the fact that a downturn in the market may
not manifest itself for many months following a low point in the book-to-bill ratio. For example,
according to data compiled by Merrill Lynch (which covers all semiconductors and not just DRAMs),
the lowest point in the 1990-1991 downturn occurred in April of 1990, eight months after the low

181 See 62 Fed.Reg. 39809, 39813-14 (24 July 1997) (Ex. ROK-3).
182 Case Brief of Hyundai, Case No. A-580-812 (21 April 1997) at 17 (Ex. ROK - 35).
183 See 62 Fed.Reg. 39809, 39813-14 (24 July 1997) (Ex.ROK-3).
184 See Case Brief of LG Semicon, Ex. B (Paine Webber) (“1993-1995 boom period”) (Ex. USA-15).
185 LGS Ltr.-1, Ex. 1 (Lawrence Fisher, Index of Demand for Chips Soars to High for This Year , N.Y.
Times, 12 Nov. 1996, at D11) (Ex. USA-21).

point in the book-to-bill ratio. 186 The same phenomenon manifested itself in the 1996 downturn.
There, the low point in the book-to-bill ratio occurred in April of 1996, but the downturn in the
market did not reach its lowest point until December of 1996 – eight months after the period covered
by the third administrative review.187
4.279 Lastly, the DOC did not determine that downturns in the DRAM market “inexorably” lead to
dumping. The United States agrees with Korea’s claim that the “prices of imports in economic
downturns are not necessarily ‘dumped’ prices.”188
4.280 The DOC also did not apply a legal standard for revocation that is “impossible” for producers
in cyclical industries to meet. First of all, the administrative determination being challenged in this
case did not cover any product or any industry other than DRAMs from Korea . Thus, broad
statements about the alleged implications of this case for other markets that may or may not be
“cyclical” in nature are without foundation.
4.281 Secondly, the DOC did not presume that dumping occurred during the 1996 downturn. The
agency engaged in a painstaking analysis of voluminous data on the administrative record and only
then did it determine that “dumping may have taken place during the 1996 downturn.”189 In a different
case, involving a different cyclical industry, such evidence may not exist and the DOC may find that a
resumption of dumping would not be likely if the order in question were revoked.
4.282 Lastly, the fundamental flaw in Korea’s claim is perhaps best captured by the simple fact that
the DOC has revoked anti-dumping duty orders co vering producers within cyclical industries.
Examples of such cases include Carbon Steel Bars and Structural Shapes From Canada, 51 Fed. Reg.
41364, 41364 (1986) (Ex. USA-28), and Steel Reinforcing Bars From Canada; Final Results of
Antidumping Duty Administrative Review and Revocation in Part , 51 Fed. Reg. 6775, 6775 (1986)
(Ex. USA-29). The DOC has also revoked anti-dumping duty orders that covered products within
“seasonal” industries. See, e.g., Certain Fresh Cut Flowers From Colombia; Final Results of
Antidumping Duty Administrative Review, and Notice of Revocation of Order (in Part) , 59 Fed. Reg.
15159, 15167 (1994) (“Flowers from Colombia”) (Ex. USA-30); Frozen Concentrated Orange Juice
From Brazil; Final Results and Termination In Part Of Antidumping Duty Administrative Review;
Revocation In Part of Antidumping Duty Order , 56 Fed. Reg. 52510, 52511 (1991) (“ FCOJ From
Brazil”) (Ex. USA-31). In both instances, prices, costs, and sales vary widely over the course of the
business or seasonal cycle.190

186 Case Brief of LG Semicon, Ex. B (Merrill Lynch) (Ex. USA-15).
187 Id.
188 Indeed, the DOC determined that Samsung did not dump DRAMs in the United States during the
1990-91 downturn.
189 Final Results Third Review , 62 Fed. Reg. at 39814 & 39817 (Ex. USA-1). Later in the notice, the
DOC expanded on this conclusion:
. . . in light of the market conditions during the downturn and the fact that the months actually
examined during the POR did not include the lowest point in the downturn, we find that the
existence of below-cost sales during May and June of 1996 s uggests that the number of
below-cost sales increased following the end of the third review period as the DRAM market
worsened. As prices in the DRAM market fell, a substantial number of sales were made
below cost. This pattern is suggestive of deteriorating market conditions that often give rise to
dumping. Id. at 39817
190 See, e.g., Frozen Concentrated Orange Juice from Brazil; Final Determination of Sales at Less
Than Fair Value, 52 Fed. Reg. 8324, 8330 (1987) (respondent argued that FCOJ was a “seasonal product”) (Ex.
USA-32); FCOJ from Brazil, 56 Fed. Reg. at 52511 (The DOC acknowledged that “sharp price fluctuations are
frequent occurrences in the FCOJ industry”) (Ex. USA-31).

6. Certification Regarding Future Dumping
(a) Claim raised by Korea
4.283 Korea claims that by imposing a revocation requirement on exporters to certify that they will
not dump in the future the United States violates Article 11 of the AD Agreement. The following are
Korea's arguments in support of this claim.
4.284 The United States has maintained the anti-dumping duties even though it has failed to meet
the requirements of Paragraphs 1 and 2 of Article 11 for maintaining an order. The United States’
violation does not end here, however. The United States refused Respondents’ direct request to
revoke the duties in spite of the fact that, in addition to three years without dumping (and thus no
injury due to dumping), the two companies formally certified that they would not dump in the future,
and agreed to the immediate reinstatement of the duties in the event that they resumed dumping.191
4.285 This is an abuse of discretion and violates US obligations under Article 11 of the AD
Agreement. First, the limited authority granted Members under Article 11 to impose and maintain
anti-dumping duties does not extend so far as to permit a Member to impose a certification
requirement for revocation.
4.286 Second, the certification requirement of the US revocation regime192 requires a Respondent to
forgo its right under Paragraph 2 of Article 11 to an injury finding. If the DOC concludes that the
Respondent has resumed dumping, the US Government does not conduct any injury analysis, but
simply reinstates its collection of deposits or duties. This violates Paragraph 2 of Article 11 of the AD
Agreement, which requires Members to impose duties only where dumping exists and is causing
injury and obliges Members to conduct investigations of dumping and injury before imposing (or
maintaining) any duty.
4.287 Far from complying with Article 11, the US regime is so biased that even where, as here, the
responding companies have not dumped for three years and have agreed to allow the US Government
to re-impose the duties on a moment’s notice, the United States nonetheless refused to revoke the
duties. Moreover, before it will even consider revocation, the US regime requires a Respondent to
forgo rights granted under Article 11. These are violations of Article 11 of the AD Agreement.
(b) Response by the United States
4.288 The following are the United States' arguments in response to Korea's claim:
4.289 None of the parties involved in this dispute, including Korea, deny that Respondents had
several options under United States law when it came to revocation of the anti-dumping duty order on
DRAMs from Korea. For example, they could have pursued a “changed circumstances” review before
the DOC and/or the ITC pursuant to section 751(b) of the Act.193 Either or both of these options could
have led to the revocation of the order. Instead, Respondents chose to proceed under section
353.25(a) of the DOC’s regulations.
4.290 One of the criteria the DOC is required to consider when deciding whether to revoke an anti-
dumping order under section 353.25 is whether the Respondents at issue have “agree[d] in writing to
their immediate reinstatement in the order ... if the Secretary concludes under § 353.22(f) [of the
DOC’s regulations] that the producer or reseller, subsequent to the revocation, sold the merchandise at

191 See 62 Fed. Reg. 39809 (24 July 1997) (Ex. ROK-3).
192 19 C.F.R. § 353.25(a)(2)(iii) (1996).
193 Section 751(d) of the Act provides that an order may be revoked following a “changed
circumstances” review pursuant to section 751(b) of the Act. 19 U.S.C. § 1675(d)(1) (1997) (Ex. USA-19).

less than foreign market value.” 194 In the instant case, Hyundai and LG Semicon voluntarily
submitted the appropriate certifications,195 which were, in turn, accepted by the DOC.
4.291 Before this Panel, Korea argues that Article 11 does not “permit a Member to impose a
certification requirement for revocation.” According to Korea, the certification provided for in
section 353.25 of the DOC’s regulations is an “abuse of discretion” because it allows the
United States to impose duties “on a moment’s notice” without a new finding of injury. For the
following reasons, Korea’s comments lack merit.
4.292 In the nearly twenty years since section 353.25 has been in existence (in one form or another),
the DOC has never used the certification provision to reinstate an anti-dumping order. Hence,
Korea’s sweeping declarations about “bias” and an “abuse of discretion” lack any foundation in fact.
These claims also ignore the principle, that discretionary legislation which permits, but does not
require, administrative agencies to promulgate WTO-inconsistent regulations, does not, as such,
violate GATT 1994 or any of the covered agreements.
196 A complaining party must show that the
agency actually took WTO-inconsistent action.197 In the instant case, that proof is lacking.
4.293 Secondly, Korea ignores the explicit language in section 353.25 which requires a finding of
dumping under section 353.22(f) of the DOC’s regulations before reinstatement may occur.
Paragraph (f) in section 353.22 describes the standards and procedures associated with a changed
circumstances review pursuant to section 751(b) of the Act. 198 Thus, far from permitting duties to be
re-imposed “on a moment’s notice,” the DOC’s regulations prescribe a review on the record in
accordance with the United States’ established anti-dumping methodology.
4.294 Finally, Korea argues that the certification provided for in section 353.25 of the DOC’s
regulations is contrary to Article 11 because paragraph 2 requires Members to “conduct investigations
of dumping and injury before imposing (or maintaining) any duty.” In point of fact, the obligation to
conduct investigations of dumping and injury before imposing (or maintaining) an anti-dumping duty
is found in Articles 1 and 5 of the AD Agreement. Article 11 says nothing about conducting dumping
or injury investigations.
4.295 More importantly, Article 11.2 establishes a broad based standard under which revocation is
warranted if national investigating authorities determine that an order is no longer “necessary to offset
dumping.” Article 11 does not prescribe the specific factors that an investigating authority must
consider when determining whether anti-dumping duties are “warranted.” It also does not prescribe
the specific procedural steps that must be followed when conducting a review under Article 11.2.
Within this framework, the certification provision in the DOC’s regulations is a permissible exercise
of the United States’ legitimate interest in ensuring that relief to those domestic industries that have
been adversely affected by dumping is not withdrawn earlier than is “necessary.”
4.296 The United States, in response to a question from the Panel,
199 further argued as follows:
4.297 Section 353.25(a) conditions the reinstatement of duties upon a finding of dumping under
section 353.22(f) of the DOC’s regulations. Section 353.22(f) sets forth in full the rights and
obligations attendant to a review under section 751(b) of the Act ( i.e., a “changed circumstances”

194 19 C.F.R. § 353.25(a)(2) (1997) (Ex. USA-24).
195 Final Results Third Review, 62 Fed. Reg. at 39810 (Ex. USA-1).
196 See generally GATT, Analytical Index: Guide to GATT Law and Practice, Updated 6 th Edition
(1995), 645-48.
197 Id.
198 19 C.F.R. § 353.22(f) (1997) (Ex. USA-24).
199 The Panel recalls that the question was: "Could the United States explain the purpose of the
certification requirement, whereby respondents agree to their immediate reinstatement in an anti-dumping order
if they dump subsequent to revocation. If respondents agree to their immediate reinstatement in the order, why
is it necessary to determine whether or not it is 'not likely' that respondents will dump in the future?"

review). Among the rights and obligations contained in section 353.22(f) is the opportunity for
“notice and comment.” In other words, section 353.22(f) guarantees to every interested party, inter
alia, the right to review and comment upon the DOC’s determination. This process, from start to
finish, typically takes between six and nine months to complete. If one adds to this the time between
revocation (or “termination”) of the anti-dumping duty order and the initiation of a review pursuant to
the reinstatement provision in section 353.25(a), a year or more may have passed before duties are
once again applied to the Respondent that resumed dumping merchandise subject to the order.
4.298 The “not likely” criterion performs, therefore, an important function. It seeks to provide some
assurance to the DOC that the Respondent which has stopped dumping for at least three years
(section 353.25(a)(2)(i)), and agreed to reinstatement in the order if it resumes dumping
(section 353.25(a)(2)(iii)), will not dump during the period immediately after revocation
(section 353.25(a)(2)(ii)). It is not a perfect system. No investigating authority, including the DOC,
can ever be completely certain that an exporter will not resume injurious dumping the minute an order
is lifted. However, it is a “permissible” approach, within the meaning of Article 17.6(ii) of the AD
Agreement, which seeks to ensure that the anti-dumping relief obtained by the injured domestic
industry is terminated only when it is no longer warranted.
200
7. Need for Injury Finding
(a) Claim raised by Korea
4.299 Korea claims that by failing to initiate ex officio an injury review where evidence showed that
it was warranted the United States violates Article 11 of the AD Agreement. The following are
Korea's arguments in support of this claim:
4.300 Sales at less than normal value (dumping), alone, are not prohibited by the WTO agreements;
rather, the WTO agreements prohibit only dumping that is causing injury. 201 A Member must
establish that a Respondent is dumping and also that the dumping is causing injury before it can
impose or maintain a duty. 202 Thus, even assuming for the sake of argument that the DOC’s finding
that renewed dumping was likely was correct (and that the DOC’s imposition of the various criteria
was permissible), the US Government failed to make any determination that dumping which is
causing injury was likely.
4.301 The provisions of the AD Agreement establish three requirements on Members that would
impose or maintain a duty: dumping, injury and causation. First, the Member must establish that a
product is being dumped, i.e., “introduced into [its] commerce . . . at less than its normal value.”
203
The methodology for establishing dumping is set out in Article 2. Second, the Member must establish
that its domestic industry is materially injured. The methodology for establishing injury is set out in
Article 3. Finally, the Member must establish that the dumping is causing the material injury.
Guidelines for establishing causation are set forth in Article 3.5. Absent any one of these three
elements, a Member shall not impose or maintain an anti-dumping duty.
4.302 In regard to maintaining a duty, Paragraph 2 of Article 11 of the AD Agreement requires a
Member, on its own initiative, to conduct a review of injury to the domestic industry (as well as of
dumping) “where warranted.” According to the first sentence of Paragraph 2:

200 Moreover, the DOC has never reinstated an anti-dumping order pursuant to section 353.25(a)(iii) of
its regulations. Therefore, as a practical matter, the “ not likely” criterion and the reinstatement requirement are
not redundant.
201 See General Agreement, Article VI; AD Agreement, Articles 11:1 and 11:2. See also United States-
Anti-Dumping Duties on Imports of Stainless Steel Plate from Sweden (24 February 1994), ADP/117, para. 231
(see also para. 232) (unadopted).
202 Id.
203 AD Agreement, Article 2:1.

The authorities shall review the need for the continued imposition of the duty, where
warranted, on their own initiative . . ..204
According to the third sentence of Paragraph 2:
If, as a result of the review under this paragraph, the authorities determine that the anti-
dumping duty is no longer warranted, it shall be terminated immediately.
4.303 In DRAMs from Korea , circumstances clearly “warranted” an injury review by the US
Government. For three consecutive years, the US Government, itself, had found that no dumping
existed. The logical consequence of this finding is that no injury caused by dumping could have
occurred during this same three-year period--if there is no dumping, there is no injury and, of course,
the duty is not necessary. But, even if the authorities had been justified in concluding that a
resumption of dumping was likely, they made no determination as to whether a resumption of injury--
after three years of no injury--was likely. After concluding that for three years no injury was
occurring as a result of dumping, the authorities had an obligation on their own initiative (it was
“warranted”) to investigate whether injury as well as dumping would be likely to resume if the order
were revoked. Paragraph 2 of Article 11 required a separate determination regarding injury and the
US Government failed to comply with this requirement and thereby violated Article 11.
4.304 Furthermore, the ITC, the US agency that conducts injury investigations, does not even have
the authority to conduct such a review so as to be able to meet its obligation under Paragraph 2 of
Article 11. Quite simply, the United States has failed to implement this requirement of Paragraph 2 of
Article 11 and this, too, is a violation of the AD Agreement.
4.305 Korea, in response to a question from the Panel,
205 further argued as follows:
4.306 The Korean Government’s understanding is that the Respondents requested revocation under
Section 353.25(a)(2) and not Section 207.45(a) for a number of reasons. In the United States, after
the original investigation is complete, the procedure shifts away from the ITC. The DOC is the entity
that conducts the administrative reviews. Having been found not to be dumping by the Department
for three consecutive reviews, covering three-and-one-half years, the Respondents presumably
thought that revocation pursuant to the DOC’s regula tion was basically a formality, as it is in most
cases.
4.307 In any case, as the title of Section 353.25(a) is “Revocation based on absence of dumping,”
this regulation is the more appropriate regulation. The ITC, of course, does not have a regulation
providing for revocation based upon an absence of du mping. Instead, Section 207.45(a) is the ITC’s
“changed circumstances” review regulation--it presumes that dumping is occurring, but allows a
respondent to demonstrate that market circumstances have changed such that the dumping no longer
is causing injury. (The DOC also has a changed circumstances regulation, at Section 353.25(d).)
4.308 The United States suggests that the Respondents should have pursued a changed
circumstances review at the DOC and/or the ITC. The United States thus continues to attempt to
improperly burden the Respondents. The United States implies that the fact that they did not seek
such a review somehow undermines Korea’s case. But this is not true. The DOC’s regulations
provide specifically for “Revocation based on absence of dumping,” and, as Korea has demonstrated,

204 See also United States-Anti-Dumping Duties on Imports of Stainless Steel Plate from Sweden
(24 February 1994), ADP/117, paras. 251-252 (unadopted).
205 The Panel recalls that the question was: "At para. 4.4, Korea states that 'the United States…failed to
conduct an injury review, which clearly was warranted in this case'. At para. 4.55, Korea states that Art. 11.2
'obliges Members to conduct investigations of dumping and injury before imposing (or maintaining) any duty'.
Could Korea please explain why the respondents requested revocation under section 353.25(a)(2) of the DOC
regulations, and why they did not request revocation under section 207.45(a) of the ITC regulations?"

even if that regulation complied with the AD Agreement (which it does not), the Respondents met its
requirements and were denied revocation only because of bias and the Secretary of Commerce’s
unfettered discretion in these matters. The implication of the United States that, had Respondents
requested changed circumstances reviews, the United States would have revoked the order, is baseless
given the DOC’s conduct in this case. Also, it is another attempt by the United States to shirk its
Article 11 obligations to self-initiate where warranted.
4.309 Finally, in its response to Korea’s claims that the United States improperly failed to initiate a
changed circumstances injury review (or dumping review), which clearly was warranted, the United
States apparently is attempting improperly to conflate two of the obligations of Article 11.2--the
obligation to self-initiate where warranted and the obligation to provide for initiation upon request
under certain circumstances. As stated above, the Government supposes that the companies did not
request an ITC review because they understood that the ITC injury provision applies where a
company is dumping, but nonetheless is seeking revocation on the basis that, due to “changed
circumstances” in the market, the dumping no longer is injuring the domestic industry. Thus, this
provision is not appropriate here. (Moreover, based on U.S. procedure, Respondents would have had
no cause to do so until after the DOC denied revocation.)
4.310 The U.S. position on this point demonstrates, in general, the poverty of the U.S. position. In
this case, what would the ITC have examined? Korea’s argument is not changed circumstances but
revocation based on no dumping and no injury caused by dumping. In this context, what is the
relevance of a change in market conditions?
4.311 Also, the United States conveniently fails to note that its suggestion would have imposed on
the Korean companies the burden of establishing “changed circumstances sufficient to warrant the
institution of a review investigation.” 19 C.F.R. § 207.45(a). In other words, simply to obtain a
review that might, possibly, result in revocation, the companies would have had to meet a burden of
proof that Article 11 does not allow a Member to assign to a company to obtain revocation itself. The
companies then, of course, would have had to meet an even greater and more improper burden to
obtain revocation. Thus, even the procedure for simply requesting an injury review under 19 C.F.R.
207.45(a) violates Article 11.2.
4.312 With this argument, the United States apparently has conceded that Korea is correct that the
United States improperly places the burden of proof on the responding companies. Perhaps more
importantly, under Article 11.2, the United States was required to self-initiate an injury investigation
“where warranted,” a standard that certainly was met here, where for over 3 years the Department
found no dumping, and thus the injury finding from the original investigation was stale and no longer
applicable.
4.313 Korea, in response to another question from the Panel,
206 also made the following arguments:
4.314 If the Department fails to revoke, the ITC mu st self-initiate, because three consecutive
reviews of no dumping is the strongest possible evidence that, at the very least, the ITC’s original
finding of injury by reason of dumping is no longer valid and that an injury review is necessary.
(b) Response by the United States
4.315 The following are the United States' arguments in response to Korea's claim:

206 The Panel recalls that the question was: "Under Article 11.2 of the AD Agreement, investigating
authorities are to 'review the need for the continued imposition of the duty, where warranted'. At para. 4.60 of
its first submission, Korea asserts that the United States was required to self-initiate an injury review in this
case. Does Korea argue that the ITC should self-initiate an injury review as soon as the DOC finds that
respondents have not dumped for three consecutive years, or does Korea consider that additional conditions
should also be met before the ITC must self-initiate? If so, what other conditions were met in the present case?"

4.316 Korea argues that the United States was obligated to conduct an “injury review” pursuant to
Article 11.2 of the AD Agreement. According to Ko rea, an inquiry into whether a “resumption of
injury ... was likely” was “warranted” because Respondents had gone three years without dumping.
Korea also asserts that the United States lacks the ability to comply with Article 11.2 because the ITC
lacks the authority under United States law to conduct this type of review. As with Korea’s other
claims, these too fail.
4.317 First, the ITC’s authority to self-initiate a review of its injury determination is expressly
provided for in section 751(b) of the Act
207 and section 207.45(c) of its regulations. 208 Secondly,
Respondents never asked the ITC to exercise its authority in this regard. No one, including Korea,
ever raised this issue until after the DOC issued the Final Results Third Review . As a result, this
Panel lacks an adequate factual and legal record to review under Articles 17.5 and 17.6 of the AD
Agreement. Lastly, as the complaining party, Korea bears the burden of coming forward with
evidence to support its claim. To support its claim that a review of the injury question was
“warranted,” Korea must present evidence which shows: (i) that injury to the domestic industry in the
United States was not likely “to continue or recur if the duty were removed or varied,” and (ii) that the
responsible investigating authority in the United States was in possession of this information a
reasonable period of time before Korea instituted the present action.
209 Korea has done neither. All it
has done is cite to the fact that Respondents were found not to be dumping during a three-year period
when the order was in existence.210
4.318 The United States, in response to a question from the Panel,211 further argued as follows:
4.319 A Member is required to self-initiate a review only “where warranted.” In this case, Korea
has not asserted that anything, other than an absence of dumping for three years, indicated that an
injury review was “warranted” within the meaning of Article 11.2.
4.320 Evidence that dumping has stopped does not, in and of itself, indicate that an injury review is
“warranted” under Article 11.2. For one thing, a lack of current dumping does not necessarily
indicate a change in the relevant market conditions. Rather, a Respondent may simply have changed
its pricing practices in response to the issuance of the anti-dumping order or may even have ceased or
curtailed its exports because of an inability to compete at a fairly traded price.
4.321 It also is not enough to claim, as Korea does, that injury has stopped subsequent to the
issuance of an order. First of all, the AD Agreement recognizes that this may be the case in a
particular situation; that is why Article 11.2 calls for evidence that the injury is not likely to “recur.”
It also explains why the test turns on what will happen if the “duty were removed or varied.” In other
words, the drafters of Article 11.2 assumed that in some, but not necessarily all cases, maintenance of
the order will remedy injury.

207 19 U.S.C. § 1675(b) (1997) (Ex. USA-19).
208 19 C.F.R. § 207.45(c) (1997) (Ex. USA-78).
209 See AD Agreement, art. 11.2 .
210 Korea’s argument also glosses over an important fact. At the time the DOC initiated the challenged
(third) administrative review in June of 1996, only one administrative review had been completed which
revealed zero or de minimis margins for Respondents. See First Review 61 Fed. Reg. 20216 (Ex. USA-22).
Presumably, Korea does not believe that a single year without dumping “warrants” a review of the injury issue.
211 The Panel recalls that the question was: "The United States argues that the respondents never asked
the ITC to 'self-initiate' a review of its injury determination, that Korea did not raise this issue until after the
final results of the third administrative review were issued, and that, as a result, the Panel lacks an adequate
factual and legal record to review under Articles 17.5 and 17.6 of the AD Agreement. Is it the view of the
United States that the obligation of a Member to review the need for the continued imposition of an anti-
dumping duty on its own initiative can only be challenged in WTO dispute settlement if such a 'self-initiation'
comes in response to a request from an interested party?"

4.322 In short, a self-initiated review of injury is “warranted” within the meaning of Art. 11.2 when
a Member is in possession of information which bears on what the condition of the industry would be
after an anti-dumping order is “removed or varied.” Evidence limited exclusively to a Respondent’s
pricing practices during the existence of the order misses the mark because it says next to nothing
about the condition of the industry if the duty is removed or varied. Under section 751(b), interested
parties also have the opportunity to request a review of the ITC’s injury determination.
(c) Rebuttal arguments made by Korea
4.323 Korea makes the following arguments in rebuttal to the United States responses:
4.324 The United States asserts that for a self-initiated review to be warranted:
Korea must present evidence which shows that injury to the domestic industry in the
United States was not likely “to continue or recur if the duty were removed or varied.”
4.325 As this statement demonstrates, even in the context of the standard for simply initiating a self-
initiated review, the United States seeks to impose on a Respondent the burden of “show[ing] that
injury . . . was not likely to continue or recur . . ..”
4.326 This is not a permissible interpretation of the requirement of Paragraph 2 of Article 11.
Paragraph 2 does not allow a Member to impose on a Respondent a burden equal to proving that a
duty should be revoked merely to obtain initiation of a self-initiated review.
4.327 A self-initiated review is just that--self-initiated. It is not initiated because a Respondent has
made a certain showing--that is termed a “review upon request” in Paragraph 2. The two are quite
distinct. The provision of a review upon request is contingent on an interested party having submitted
“positive information substantiating the need for review.” The United States, however, would import
this requirement from the “review upon request” provision to the self-initiated review provision. In
doing so, it would completely undercut the reason for having a separate self-initiated review provision
in the first place. Thus, the US “criticism” that “Respondents never asked the ITC to exercise its
authority in this regard” misses the point entirely.
4.328 This is not the first time that the United States has sought to avoid its Article 11.2
responsibilities regarding injury reviews.
212 In Swedish Stainless Steel Plate, the panel concluded that
the predecessor of Article 11.2 established two distinct sets of obligations regarding injury reviews--
one set relating to self-initiated reviews and one set relating to reviews upon request.213 Moreover, the
panel found that, in the context of a self-initiated review, a Member cannot impose on the Respondent
a burden drawn from thin air in order to protect the Member’s market. Rather, the Member must self-
initiate an injury review, where warranted, includ ing in situations where the data warranting the
review are possessed only by the Member.214 As the panel aptly noted:
[T]here could be situations in which information indicating that initiation of a review was
warranted was more readily available to in vestigating authorities than to interested
parties.215
4.329 In sum, the United States imports the burden of proof from “review upon request” into a self-
initiated review, in an attempt to deflect Korea’s demonstration in its first submission that the United
States violated the Article 11.2 obligation to self-initiate an injury review.

212 See, e.g., United States -- Anti-Dumping Duties on Imports of Stainless Steel Plate from Sweden
(24 February 1994), ADP/117, paras. 247-52 (unadopted).
213 Id. at para. 251.
214 Id.
215 Id.

4.330 Self-initiation by the United States of an injury review clearly was warranted in this case.
Apart from any evidence which the United States had regarding the state of the US market and the
impact of Japan- and EC-based competitors on th e domestic DRAM industry, Korea demonstrated to
the US Government for a period of more than three consecutive years that it was not dumping. Three-
and-one-half years of no dumping means three-and-one-half years of no injury and three-and-one-half
years of no causation. Thus, for over three years, Korea demonstrated that not one of the three
prerequisites for imposing an anti-dumping duty was met. What, possibly, could the ITC have
examined? There was no dumping. Therefore, even if there was injury, there was no causation.216
(d) Rebuttal arguments made by the United States
4.331 The United States makes the following arguments in rebuttal:
4.332 Korea has not cited to any evidence which “warranted” a review under Article 11.2 of
whether injury to the US DRAM industry would be likely to continue or recur if the duty were
removed or varied. All Korea has done is cite to the Respondents’ lack of dumping during a three-
year period. However, as the United States discussed during the Panel meeting, evidence limited
exclusively to a Respondent’s pricing practices during the existence of an order says next to nothing
about the condition of the industry if the duty is “removed or varied.”217
4.333 Nor is it correct that the ITC lacks the author ity to initiate, on its own initiative, an injury
review if there are no current dumping margins. Briefly, the ITC has previously conducted such
reviews (pursuant to section 751(b) of the Act) both when the most recent dumping margins have
been zero, see Electric Golf Carts from Poland , Inv. No. 751-TA-1, USITC Pub. 1069 (June 1980)
(Ex. USA-86), and when there are current dumping margins, see Salmon Gill Fish Netting of
Manmade Fiber from Japan, Inv. No. 751-TA-7, USITC Pub. 1387 (June 1983) (Ex. USA-87). That
the ITC’s conduct of a section 751(b) review is dependent on neither the presence or absence of a
current dumping margin is illustrated by the pending injury review concerning Titanium Sponge from
Japan, Kazakstan, Russia, and Ukraine , Inv. No. 751-TA-17-20, in which the imports from Japan
have been subject to a zero duty rate for the past three years, but current duties are in effect with
respect to imports from the other three subject countries.
4.334 Next, Korea accuses the United States of conflating the standard for initiating reviews upon
request with the standard for self-initiated reviews. To buttress its argument, though, Korea
misconstrues the statement made by the United States at the first meeting of the Panel. The United
States was not referring to an evidentiary showing applicable to respondents before the investigating
authorities in the United States. Rather, the United States was discussing the showing that Korea,
before this Panel, must make in order to establish that a self-initiated injury review was "warranted"
within the meaning of Article 11.2.
8. Respondents Met the Criteria for Revocation
(a) Submission by Korea
4.335 Korea submits to the Panel that the record eviden ce supported revocation, even applying the
US scheme (which it deems improper), and that in support for its failure to revoke the United States

216 The United States cites as “important” the fact that at the time the DOC initiated the Third Review,
only one administrative review had been completed. But, Korea’s injury argument, does not depend upon all of
the reviews having been completed at the start of the Third Review. Rather, Korea’s argument is based upon
the fact that the United States itself, after completing three reviews, effectively determined that there had been
3.5 years of no injury, and did not determine that a recurrence of injury was likely (even assuming that a
recurrence of dumping was likely), as required by Paragraph 2 of Article 11.
217 See AD Agreement, art. 11.2.

mischaracterized the facts on the administrative record. Korea presents the following arguments in
support of this submission:
(i) The Record Evidence Supported Revocation, Even Applying the US Scheme.
4.336 Even assuming for the sake of argument, that the US revocation scheme complies with the
WTO agreements. Korea will demonstrate once again that the Panel should find that the DOC’s
establishment of the facts was improper and that its evaluation of the facts was biased and not
objective.
4.337 In this regard paragraph 56 of the US first submission states:
56. In its rebuttal submission, Korea will undoubtedly argue that one of the ways
the market could have “changed” at this time was for the better. It will cite passages in
the administrative record where various investment bankers and industry experts predict
higher prices and better times for the DRAM industry in 1997. What it will ignore, is
roughly the same number of experts who were not sure which way the market was
headed and who openly expressed concerns about its future.
218
4.338 In this passage, the United States concedes th at the import of the record evidence regarding
the market was at least 50-50 in support of revocation. 219 In other words, at least half the record
evidence supported the conclusion that the market was getting healthier and, in the words of the
United States, “roughly the same number of experts . . . were not sure which way the market was
headed and . . . openly expressed concern about its future.” So, actually, 50 percent of the experts
said the market was getting healthier and 50 percent said they were not sure which way the market
would go. The United States therefore concedes that the split is not 50-50, but that 50 percent
predicted a recovery and 50 percent were not sure and, thus, the evidence is strongly in favor of
recovery and revocation. Thus, even if these forecasts were the only evidence on the record, it could
not support a “no likelihood/not likely” finding even under the DOC’s own regulations.
4.339 But this was not the only evidence on the record. During the 18-19 June 1998 Panel meeting,
the United States stated that three consecutive reviews of no dumping (the first criterion) and
certification not to dump and to submit to reinstatement of the order (the third criterion) also bore on
the “not likely” issue (the second criterion).
220
4.340 So, the United States admits that the record evid ence in favor of a finding of “not likely” and
revocation was, at a minimum:
1. three consecutive reviews (three-and-one-half years) of no dumping by
Respondents;
2. a certification by Respondents that they would not dump in the future and
would submit to reinstatement if they were to do so; and
3. the considered opinion of at least 50 percent of the experts on the record that
the DRAM market would continue to strengthen or, in the words of the

218 The Panel notes that this argument is set forth in Paragraph 4.412 of this report.
219 Elsewhere, the United States concedes that a recovery was underway, noting its opinion that the
recovery “was, at best, bumpy.”
220 The United States thus effectively concedes that it is in violation of its GATT Article X obligations,
because the relevant US regulation (19 C.F.R. § 353.25(a)) does not reflect this methodology. Korea also notes
that the US imposition of the certification and “no likelihood/not likely” requirements is incoherent. To test the
likelihood of future dumping after obtaining a certification makes no sense--the certification is legally binding
on the Respondents and, thus, is definitive, but the likelihood test is based largely on speculation.

United States, that the future would bring “higher prices and better times for
the DRAM industry.”221
And, in favor of rejecting revocation, the United States points to:
1. a number of experts “who were not sure which way the market was headed
and who openly expressed concern”; and
2. a fiction that the companies had dumped during the “last downturn” (in the
original investigation) and, thus, would do so again.222
4.341 This summary of the record evidence and US admissions demonstrate that there was not a 50-
50 split in the record evidence; to the contra ry, the record evidence was and is strongly in
Respondents’ favor. Thus, even accepting all of the United States’ assertions, the United States’ basic
argument must fall.
4.342 The AD Agreement does not permit the United States to maintain a definitive duty where
only a minimal portion of the evidence, at most, supports doing so. In this case, the Korean producers
overwhelmingly demonstrated, through their past conduct, through their certification and through
expert economic opinion and analysis, that they would not resume dumping if the DOC were to
revoke the order. By refusing to revoke, the United States has abused the limited right to impose and
maintain anti-dumping remedies granted by the AD Agreement.
4.343 Moreover, the language chosen by the United States to discuss its findings indicates its lack
of certainty and shows that it was speculating as to what was “likely” or “not likely” to occur. For
example, in the Final Results of the Third Review, the DOC discusses the 1996 downturn and
concludes that revocation should be denied, in part, because the pricing pattern it saw was “suggestive
of deteriorating market conditions that often give rise to dumping.”223 The DOC did not find that the
pricing pattern “showed” or even “indicated” deteriorating conditions that, e.g., always give rise to
dumping. This type of speculation appears throughout the Final Results and, also, the first US
submission. For example, according to the United States:
The agency engaged in a painstaking analysis of voluminous data on the administrative
record and only then did it determine that “dumping may have taken place during the
1996 downturn.
First, how “painstaking” could an analysis be that found only that dumping “may” have occurred? In
any case, even if the analysis was painstaking, th at is not the point. The DOC did not make the
finding Article 11 requires. Second, each of the DOC’s stated rationales for failing to revoke are
speculative: “may,” “suggestive,” “often.”
4.344 This, Korea submits, is not a permissible way to regulate dumping. The United States clearly
has violated its WTO obligations under Article 11 of the AD Agreement and Article VI of the General
Agreement.
(ii) The United States Has Mischaracterized the Facts on the Administrative Record.

221 There were other facts on the record supporting revocation, including the fact that the Korean
producers had weathered two downturns without dumping.
222 The United States has misstated a number of facts, including the condition of the market during the
First and Third Reviews and Respondents’ production cutbacks, in order to try to buttress its failure to revoke.
223 See DRAMs from Korea , 62 Fed. Reg. 39809, 39817 (24 July 1994) (emphasis added by Korea)
(Exh. ROK 3).

4.345 Korea asks the Panel to examine four core facts in detail should it conclude that the United
States has not otherwise violated Article 11. The following are discussed in turn:
• the United States continues to ignore the downtu rns that occurred during the First and Third
Review Periods;
• the United States ignores the fact that although the 1996 downturn was severe, prices already
had begun to recover in 1997;
• the United States selected and analyzed record data in an improper, biased and not objective
fashion to avoid the implications of the 1996-1997 recovery; and
• Respondents did, in fact, cut production, but while the United States conveniently recognized
Respondents’ production cutbacks for one purpose, it then ignored them when it refused to
revoke.
(1) The United States Continues to Ignore the Downturns That Occurred During the First and
Third Review Periods.
4.346 The United States refused to recognize that the DRAM industry suffered downturns during
1993 and during 1995. The record evidence cited by
 the United States in its first submission
demonstrates that industry downturns occurred during the second half of 1993 and during the latter
part of 1995 and into early 1996. These periods were covered by the First and Third Administrative
Reviews.
4.347 Korea has never argued, as the United States implies, that the semiconductor industry did not
experience net positive growth from the end of 1993 through the middle of 1995, i.e., Korea agrees
that the book-to-bill ratio indicated that the market was larger and more robust in the middle of 1995
than it was at the end of 1993. However, Korea has demonstrated that a closer look at the ratios
shows that downturns in the industry occurred durin g the second half of 1993 and from the latter part
of 1995 into the second half of 1996, periods that fell within the First and Third Administrative
Reviews, respectively.
4.348 The book-to-bill ratio was produced for years by the US Semiconductor Industry Association
(SIA) and was universally accepted as an indicator of DRAM market conditions. It was relied upon
by industry leaders and analysts studying market trends. SIA abandoned the statistic, not because it
was inaccurate, but because: (i) it reflected only the conditions of the US market--the key market in
this case (and the DRAM market increasingly was perceived as a global market); and, more
importantly, (ii) it was thought to be having an unduly strong and negative impact on the prices of
stocks in the industry.
224
4.349 In the Final Results of the Third Administrative Review, the United States noted that "[t]he
DRAM industry is highly cyclical in nature with periods of sharp upturn and downturn in market
prices."225 But, the United States attempts to cloud the cyclicality of the DRAM market by quoting
completely out of context a passage from Dr. Flamm's economic analysis regarding the alleged
stability of prices during 1993, 1994 and 1995. In fact, the study directly contradicts the US position.

224 See “Bye-Bye B:B Oct's Rebound,” Electronic Buyer's News , 18 November 1996 (Ex. ROK-86).
(The Electronic Buyer’s News article not only demonstrates that market analysts widely accepted the book-to-
bill ratio as an accurate indicator of market conditions and shows the real reasons SIA abandoned it, but also
shows that the end of 1996 coincided with an upturn in the market.)
225 See DRAMs from Korea, 62 Fed. Reg. 39809, 39810 (24 July 1994) (Ex. ROK-3).

4.350 Dr. Flamm’s study rests on a quarter-by-quarter analysis of annual pricing data for 1993
through 1996.226 Dr. Flamm concludes that from the fourth quarter of 1992 through the first quarter
of 1996, prices for DRAMs declined in 6 out of 14 quarters (or nearly half of the time). Of course,
during this time, the DOC found that neither Hyundai nor LG Semicon were dumping. This led
Dr. Flamm to conclude that “even in an environment of falling prices (and falling by quite a lot in the
first half of 1996) [Respondent] was not dumping, as verified by the DOC."227
4.351 Moreover, these quarterly pricing data fully support the downturns indicated in the book-to-
bill ratios. Thus, regardless of whether the DRAM industry experienced overall growth between 1993
and 1995, that same time period also was marked by at least two clear and distinguishable downturns
during which the DOC found that LG Semicon and Hyundai were not dumping.
4.352 The United States also relies on a Merrill Lynch report to claim that "Korea overlooks the fact
that a downturn in the market may not manifest itse lf for many months following a low point in the
book-to-bill ratio." But the United States ignores the fact that the same Merrill Lynch report uses
quarterly sales data that demonstrate that downturns occurred in 1993 and 1995.
4.353 All of the relevant data--including those cited by the United States in this proceeding--
demonstrate that downturns occurred during periods covered by the First and Third Administrative
Reviews. The DOC found Respondents did not dump during these periods. So, contrary to the
DOC’s assertion in this proceeding, Respondents did demonstrate that they do not dump during
downturns.
(2) The United States Ignores the Fact That Although the 1996 Downturn Was Severe, Prices
Already Had Begun to Recover in 1997.
4.354 The 1996 downturn was more severe than the 1991 downturn. However, the 1996 downturn
began in late 1995 (during the Third Review period) and Respondents showed that the market
conditions improved in early 1997.
4.355 The United States attempts to extrapolate from the 1991 downturn to the 1996 downturn.
However, the United States would have the Panel ignore, first, that although some analysts remained
uncertain or hesitant about the future of the DRAM market in 1997, many analysts confidently
asserted that because, unlike the 1991 downturn, the 1996 downturn did not occur during an economic
recession in the United States, but, to the contrary, occurred during an unprecedented period of
growth, the recovery would be swifter and well underway by 1997.
4.356 Second, the United States would have the Panel ignore that, in any event, because the 1996
downturn began at the end of 1995, it was covered by the Third Review, during which the
United States found that LG Semicon and Hyundai were not dumping. The United States can not
have it both ways. If it insists that the end of 1996 was characterized as a downturn, it also must
acknowledge that the Third Review covered a downturn and, thus, that the DOC had found that
Respondents did not dump during the most recent downturn.
(3) The United States Selected and Analyzed Record Data in an Improper, Biased and Not
Objective Fashion to Avoid the Implications of the 1996-1997 Recovery.
4.357 In discussing DRAM market conditions from 1996 and projecting them into 1997, the
United States continued its pattern of selectively choosing and omitting portions of the administrative
record in order to create a biased and inaccurately negative market assessment. For example, the
United States quotes out of context a passage from a De Dios & Associates report, which states that in

226 See Dr. Kenneth Flamm, Economic Analysis of 16 Megabit DRAM Costs and Pricing: Projections
for 1997 and 1998 (Revised and Supplemented), April 1997, Figure 3 (Ex. ROK-35, Attachment 2).
227 Id. at page 6.

regard to the recovery in the DRAM market "[w]hat we have here is a temporary situation that will
change."
4.358 When read in context, however, the passage has an altogether different meaning. In
particular, it does not support, but, in fact, contradicts the US position:
What we have here is a temporary situation that will change. But
change does not necessarily mean a plunge in prices similar to last
year's behaviour. Many other analysts are too quick to offer this as
the only other alternative. How it will change requires a deeper
understanding of the market forces that affect price.228
The De Dios analysis then goes on to consider th e impact of various market forces, concluding that
prices should continue to increase.229
4.359 In short, the United States has selected fragments from the De Dios and other analyses. A
careful reading of those analyses, however, reveals that the vast majority of the evidence on the record
indicated the market had strengthened and was continuing to strengthen.230
4.360 Finally, the administrative record overwhelmingly supports the fact that the predicted
recovery for 1997 would not be due entirely to reports of cutbacks in production by Korean producers.
Again, the United States misleadingly cites to the De Dios analysis. But, one need only review the
multiple analyses on the administrative record, including the De Dios analysis, to understand that
many market forces were driving the market upward. These factors included, in addition to the strong
US economy and many other factors, increases in the production and memory content of PCs.231
(4) Respondents Did, in Fact, Cut Production, But While the United States Conveniently
Recognized Respondents’ Production Cutbacks for One Purpose, It Then Ignored Them When
It Refused to Revoke.
4.361 According to the United States, "a careful read ing of the administrative record casts a large
shadow of doubt over the ‘production cutbacks' announced by the Korean producers." 232 Actually, a
"careful reading" of the record reveals that ei ght days before issuing its Final Results, the DOC
acknowledged that Respondents had, indeed, cut pr oduction. In order to undercut Dr. Flamm’s study
so as to provide a rationale for rejecting its conclusions, the DOC stated in its internal decision
memorandum, "in light of the announced cutbacks in DRAM production, and the recent

228 See Ex. ROK-35, Attachment 5 at 3 (emphasis added by Korea).
229 Id. at 3-5.
230 According to the US First Submission, the DOC determined that: (i) contract prices follow the
direction of spot market prices; and (ii) Respondents’ contract prices fell below spot market prices in February
1997. These assertions are not supported. Moreover, tho ugh the United States implies that they are correct, for
the reasons presented below, they are not. First, cont ract and spot prices obviously correlate. But this most
certainly does not mean that contract prices fell below fair value (or fell faster than costs). Second, unrebutted
evidence on the record shows that the gap between Respondent’s contract and spot market prices was quite large
during the period of review and remained large. Finally, the United States claims that the DOC determined that
“contract and spot market prices were rapidly trending below Respondents’ reported costs of production
throughout the period that immediately followed the third administrative review.” Again, the DOC’s
determination is incorrect. Even worse, the DOC’s sole support for this determination was a chart that showed
that Respondent’s prices actually remained well above
 its falling costs of production.
231 See Case Brief of Hyundai, Case No. A-580-812 (21 April 1997), at Attachments 5, 12 and 13 (Ex.
ROK-35).
232 The Panel notes that this argument is set forth in Paragraph 4.422 of this report.

announcements of actual factory shutdowns, it is difficult to accept the [confidential data omitted]
scenario."233
4.362 Now the United States argues before this Panel, as it did in the Final Results, that
Respondents did not cut production. But, if the administrative record allegedly proves that
Respondents did not reduce product ion, why did the DOC acknowledge the opposite just a few days
before issuing the Final Results? The United States apparently reached the conclusion that cutbacks
had occurred to criticize and reject the results of the Flamm study, and then, eight days later, claimed
that cutbacks had not occurred in order to create a negative picture of the DRAM market and to reject
revocation. The Panel should not accept this transparently biased and not objective assessment of the
record evidence.
(b) Response by the United States
4.363 The United States made the following arguments in response to Korea's submission:
4.364 DRAMs are a type of semiconductor.
234 They are used in computers and many other
electronic devices that require high-density, random access memory.235
4.365 The first commercial shipment of a DRAM occurred in 1971. 236 Back then, the technology
was primarily 16 kilobits (“K”). By 1990, the technology was transitioning from its fifth generation
(4 megabits ("Meg")) to its sixth (16 Meg).237
4.366 As technology and industry standards have matured, DRAMs have become a commodity
product.238 Thus, customers tend to distinguish between products primarily on the basis of price.
During significant downturns in the market, the pressure on prices can become acute, forcing
producers/resellers to price aggressively in order to stay competitive and maintain their customer
base.239 An examination of historical data on DRAM pricing reveals that foreign producers often
dump ( i.e., sell at “less than normal value” within the meaning of the AD Agreement) during
significant market downturns. For example, va rious producers were found to have dumped DRAMs
in the United States during the dramatic downturn that occurred in the mid-1980s.240
4.367 The DRAM industry experienced another, although milder, downturn in 1990 which lasted
well into 1991.241 Faced with what it believed were injurious imports at unfair prices, Micron, a U.S.

233 See Analysis of Data, DRAMs from Korea , US DOC of Commerce, Case No. A-580-812 (16 July
1997) (Ex. ROK-87).
234 Final Results Third Review, 62 Fed. Reg. at 39809 (Ex. USA-1)
235 Id.
236 Case Brief of Hyundai, 21 Apr. 1997, Ex. 2 at 4 (Ex. USA-12).
237 Case Brief of Hyundai, Ex. 2 at 16-17.
238 Final Results Third Review, 62 Fed. Reg. at 39810 (Ex. USA-1).
239 Final Results Third Review , 62 Fed. Reg. at 39810 (Ex. USA-1); see also Charts from Agency
Analyst to File at 34-35 (hereinafter “ Prelim. Analysis”) (Ex. USA-13). During upturns in the market, prices
stabilize or rise. The length and intensity of these business “cycles” is influenced by a variety of factors,
including customer demand, overall economic growth, an d technological developments. A similar phenomenon
occurs in the agricultural industry where "seasonal" cycles are influenced by a variety of factors, including
weather and crop disease. See Letter from LG Semicon Co., Ltd. and LG Semicon America, Inc. to Secretary of
Commerce, 15 Jan. 1997, at 13-14 (hereinafter “LGS Ltr.-2”) (Ex. USA-14)
Korea concedes that DRAMs is a cyclical industry. The “cyclicality” of the industry was also a point
repeatedly made by the respondents before the DOC in the underlying administrative proceeding. See, e.g.,
Case Brief of LG Semicon, 21 Apr. 1997, at 16-17 (Ex. USA-15).
240 See, e.g., 64K Dynamic Random Access Memory Components (64K DRAM’s) From Japan: Final
Determination of Sales at Less Than Fair Value , 51 Fed. Reg. 15943 (1986) (Ex. USA-16); Case Brief of LG
Semicon, Ex. B (VLSI Research ) (Ex. USA-15).
241 Prelim. Analysis at 27 & 34 (Ex. USA-13); Case Brief of LG Semicon, Ex. B (Merrill Lynch) (Ex.
USA-15).

manufacturer of DRAMs, filed an anti-dumping petition on behalf of the U.S. industry covering
imports of DRAMs from Korea. The petition, which was properly filed with the DOC and the
Commission, alleged that Korean manufacturers were dumping DRAMs in the United States. 242 The
petition also contained information which indicated that unfairly priced imports from Korea were
causing material injury to the DRAM industry in the United States.243
4.368 Both the ITC and the DOC conducted investigations into the allegations presented by Micron.
Hyundai and LG Semicon participated in those investigations. 244 The DOC’s investigation examined
a six-month period in accordance with section 353.42(b)(1) of its regulations (19 C.F.R. §
353.42(b)(1) (1991)) which began on 1 November 1991.245
4.369 In its final determination published on 23 March 1993, the DOC found that Hyundai and LG
Semicon had been making less-than-normal-value sales in the United States. For Hyundai, the DOC
determined a dumping margin of 11.16 percent.246 For LG Semicon, the margin was 4.97 percent. 247
An affirmative injury determination by the ITC led to the publication of an anti-dumping duty order
on 10 May 1993.
248
4.370 In 1994 and 1995, during the anniversary months of the order, the DOC received requests
from the respondents to conduct administrative reviews of the order in accordance with section 751(a)
of the Tariff Act of 1930, as amended (“the Act”). 249 The request made in 1994 covered sales
between 1 May 1993 and 30 April 1994. The request made in 1995 covered the twelve months
ending 1 May 1995.
4.371 Contrary to Korea’s assertion, the 1993-1995 period was a good one for DRAM producers.
“DRAMs prices stabilized in mid-1992, and the industry experienced growth until late 1995.” 250
Some industry observers have even described 1995 as “incredibl[y]” good. 251 Indeed, the economic
consultant retained by Hyundai, Kenneth Flamm (author of the “Flamm Study”), characterized 1993-
95 as an “unusual period of relatively stable prices”252 and at one point marveled at its “unprecedented
string of near zero or slightly positive price changes.” 253 Within this environment, Hyundai and LG
Semicon were able to ship to the United States without dumping. 254 Accordingly, they were not

242 Initiation of Antidumping Duty Investigation: Dynamic Random A ccess Memory Semiconductors of
One Megabit and Above From the Republic of Korea, 57 Fed. Reg. 21231 (1992) (Ex. USA-17).
243 Id.
244 See, e.g., DRAM LTFV, 58 Fed. Reg. 15467 (Ex. USA-4).
245 Id.
246 DRAM Order, 58 Fed. Reg. 27520 (Ex. USA-2). This amount was subsequently reduced to 5.18
percent as a result of municipal judicial proceedings in Micron Technology, Inc. v. United States , 893 F. Supp.
21 (Ct. Int’l Trade 1995) (Ex. USA-18).
247 DRAM Order, 58 Fed. Reg. at 27520 (Ex. USA-2).
248 Id. As the United States noted above, Samsung eventually was found not to be dumping during the
period covered by the DOC’s original investigation. Therefore, it was (and is) excluded from the anti-dumping
order..
249 19 U.S.C. § 1675 (Ex. USA-19).
250 Dynamic Random Access Memory Semiconductors of One Megabit or Above from the Republic of
Korea; Preliminary Results of Antidumping Duty Administrative Review and Notice of Intent Not to Revoke
Order, 62 Fed. Reg. 12794, 12796-97 (1997) (hereinafter "Preliminary Results Third Review") (Ex. USA-20).
251 See, e.g., Letter from LG Semicon Co., Ltd. and LG Semicon America, Inc. to Secretary of
Commerce, 2 Jan. 1997 (hereinafter “LGS Ltr.-1"), at App. 1 (article on history of semiconductors by T. J.
Rodgers for Austin American-Statesman) (Ex. USA-21).
252 LG Semicon Case Br., Ex. B (VLSI Research) (Ex. USA-15); Hyundai Case Br., Ex. 2 at 5 and Fig.
3 (“Flamm Study”) (Ex. USA-12).
253 Id. at 5.
254 Dynamic Random Access Memory Semiconductors of One Megabit or Above From the Republic of
Korea; Final Results of Antidumping Duty Administrative Review , 61 Fed. Reg. 20216 (1996) (final results first
review) (hereinafter “First Review” ) (Ex. USA-22); Dynamic Random Access Memory Semiconductors of One

levied any duties on their DRAM imports and the cash deposit rate for future shipments was set at
zero.255
4.372 The 1995-1996 period was the subject of a request for an administrative review by
respondents on 29 and 31 May 1996.256 In addition, the DOC was asked by LG Semicon and Hyundai
to revoke (in part) the order on DRAMs from Korea pursuant to section 353.25(a)(2) of its regulations.
That regulation provided the DOC with the authority to revoke an order, in part, whenever:
(i) One or more producers or resellers covered by the order have sold the merchandise at
not less than foreign market value for a period of at least three consecutive years; (ii) It is
not likely that those persons will in the future sell the merchandise at less than foreign
market value; and (iii) ... the producers or resellers agree in writing to their immediate
reinstatement in the order ... if the Secretary concludes under § 353.22(f) that the
producer or reseller, subsequent to the revocation, sold the merchandise at less than
foreign market value.
19 C.F.R. § 353.25 (a)(2) (1997) (Ex. USA-24).
257
4.373 As a result of respondents’ request, the DOC initiated a review pursuant to section 751(a) of
the Act on 25 June 1996.258 During the review, the DOC compiled an extensive factual record which
contained, in the words of Korea, “reams of current data regarding pricing trends, inventory levels and
various other aspects of market conditions for DRAMs.” The DOC issued the preliminary results of
its third review on 18 March 1997.259 In the notice, the DOC informed the respondents of its intention
not to revoke the order pursuant to section 353.25. In particular, the DOC determined that the
administrative record “does not support a conclusion at this time that there is no likelihood of future
dumping by the Korean respondents.”260

Megabit or Above From the Republic of Korea; Final Results of Antidumping Duty Administrative Review , 62
Fed. Reg. 965 (1997) (final results second review) (Ex. USA-23). The First Review was amended on October 2,
1996. See Dynamic Random Access Memory Semiconductors From the Republic of Korea; Amended Final
Results of Antidumping Duty Administrative Review, 61 Fed. Reg. 51410 (1996).
255 Under United States law and practice, anti-dumping duty orders, in and of themselves, do not result
in the levying (or “assessment”) of anti-dumping duties. They also do not, as a rule, delay the entry of imports
into the United States. The only thing the United States Customs Service typically holds are the entry documents
and a cash deposit or bond covering the potential liability for anti-dumping duties. On the anniversary month of
every order, the DOC publishes a notice in the Federal Register which reminds interested parties (including
foreign exporters) of their right to request an “administrative review” pursuant to section 751(a) of the Act. In
an administrative review, the DOC calculates the anti-dumping duties actually owed for merchandise exported
to the United States during the previous twelve months and sets the deposit rate for estimated duties that might
be owed on future entries. 19 U.S.C. § 1675 (Ex. USA-19). Because the actual duties levied may exceed or fall
short of the deposits or bonds posted at the time of entry, the Customs Service either collects additional money
or refunds the excess (with interest). 19 U.S.C. § 1677g (Ex. USA-19).
256 Preliminary Results Third Review , 62 Fed. Reg. at 12795 (Ex. USA-20). A request was also
received from Micron. Id.
257 The URAA revised certain terminology in the Act, including substituting the term “normal value”
for “foreign market value.” However, because the instant review was initiated prior to the date the DOC’s new
regulations took effect on 1 July 1997, the 1996 regulations were still controlling and are, therefore, cited herein
unless otherwise noted. These regulations used the previous terminology.
258 Initiation of Antidumping and Coun tervailing Duty Administrative Reviews and Requests for
Revocation in Part , 61 Fed. Reg. 32771 (1996) (Ex. USA-25). The challenged administrative review was
conducted pursuant to the Act, as amended by the Uruguay Round Agreements Act (“URAA”). Uruguay
Round Agreements Act, Pub. L. No. 103-465, tit. II, 108 Stat. 4808, 4842 (1994).
259 Preliminary Results Third Review, 62 Fed. Reg. 12794 (Ex. USA-20).
260 Id. at 12796.

4.374 At the heart of the DOC’s decision was evidence of a dramatic decline in DRAM prices
throughout 1996 that was more severe than the market downturn in 1990-91 261 and only “a little less
severe” than the one in 1985-86.262 This downturn in the market caused U.S. and Korean producers
to experience double-digit percentage declines in revenue on sales of DRAMS. 263 Exacerbating the
situation was the willingness of certain producers at this time to increase production and liquidate
inventories of finished goods.
264 As the DOC explained in its notice:
(1) The DRAM market is in a year-long downturn, with steep price declines in the
DRAM market beginning in January 1996 and continued price declines forecasted; (2)
the downturn has resulted in declines of sales and revenues in the DRAM market, growth
in DRAM inventories, and the existence of significant DRAM oversupply; (3) the
Korean respondents and other DRAM producers have continued to increase DRAM
production during the downturn (which may further depress prices during such an
oversupply period); (4) the Korean respondents will likely continue to maintain a
substantial presence in the U.S. market during various phases of the business cycle
(including periods of significant price decline) in light of substantial Korean capacity and
large U.S. demand; and (5) based on the information on the record, Korean pricing in the
United States appears, according to price trends, to be at or near normal value, indicating
that only a slight downward movement in U. S. price will likely result in dumping
margins.
Preliminary Results Third Review, 62 Fed. Reg. at 12796 (Ex. USA-20).
4.375 The DOC did not, however, view the 1996 market downturn in isolation. Instead, it analyzed
all of the evidence on the record which bore on the likelihood issue. Thus, in addition to respondents’
three years of no dumping, the DOC considered, inter alia , pricing practices and trends in prior
market downturns. When it did this, the DOC discov ered that there was a history of dumping in the
United States during downturns in the DRAM market. In summarizing its conclusions, the DOC
stated, in part:
Given these circumstances, we preliminarily find that it would be difficult for the Korean
respondents to remain competitive without selling DRAMs at less than normal value.
The history of the DRAM industry is one of dumping in periods of significant downturn.
...While Korean respondents did not dump in the three consecutive review periods, most
of this period was marked by an expanding DRAM market. ...This third review period
ended in April 1996, and there has been a continuing decline in global prices since that
time. Further, we note that the price decline in 1996 was more severe than in prior
downturns. ... For these reasons, we preliminarily find that there is no basis to conclude
that there is no likelihood of future dumping by LGS and Hyundai
Id. at 12796-97 (Ex. USA-20).

261 Case Brief of LG Semicon, Ex. B (Merrill Lynch) (Ex. USA-15).
262 Case Brief of Hyundai, Ex. 2 at 5 (conclusion of Dr. Flamm) (Ex. USA-12); but see Preliminary
Results Third Review , 62 Fed. Reg. at 12797 (Ex. USA-20). Whether the 1996 downturn was more or less
severe than prior downturns is unimportant. What is important is that the 1996 downturn was not unlike prior
downturns and during those periods (including the milder one in 1990-91), DRAM producers were found to be
dumping.
263 DRAMs from Korea : Micron’s Third Review Rebuttal Brief, 30 Apr. 1997, Ex. 7 (hereinafter
“Micron Rebuttal Brief”) (Ex. USA-26); Case Brief of LG Semicon, Ex. B (VLSI Research ) (Ex. USA-15).
264 Prelim. Analysis at 24, 28, & 29 (Ex. USA-13); Case Brief of LG Semicon, Ex. B (Merrill Lynch:
“With no recession, the more rapid decline was clearly a massive inventory correction. That is why it fell so
quickly.”) (Ex. USA-15).

4.376 "Case briefs," which commented on the DOC's preliminary results, were filed by respondents
and Micron on 18 April 1997. "Rebuttal briefs" were filed by the parties on 29 April 1997. On 5
May 1997, the DOC held a public hearing at which respondents and Micron presented oral arguments.
4.377 In their comments on the preliminary results, respondents did not argue that the DOC’s
revocation standards or procedures were contrary to the AD Agreement. In fact, Hyundai stated just
the opposite -- it acknowledged that United States law was “within the letter and spirit of Article
11.”265 Instead, respondents argued, inter alia , that the DOC’s use of the phrase “no likelihood”
distorted the regulatory standard and allegedly forced them to prove the impossible -- that the
likelihood of future dumping was “almost zero.” 266 Respondents also maintained that the DOC
ignored data which supported a “not likely” determination. In particular, they pointed to (i) their lack
of dumping between the 1991 and 1996 market downturns, and (ii) record evidence which, they
believed, showed a dramatic improvement in the market by the end of 1996 that was characterized by
decreases in production, increases in demand, and rising prices for DRAMs in the United States.
267
4.378 In its final determination published on 24 July 1997, the DOC once again found that Hyundai
and LG Semicon had not sold DRAMs in the United States at less than normal value during the period
covered by the third review ( i.e., 1 May 1995 through 30 April 1996). 268 The agency also reaffirmed
its preliminary finding that the evidence on the reco rd of the review did not support a finding that a
resumption of dumping was not likely under section 353.25(a)(2) of the regulations.269 In making this
determination, the DOC emphasized several points it had made in its preliminary determination.
First, the DOC discussed the cyclical nature of the DRAM industry and the pricing practices of
DRAM producers during market downturns:
The DRAM industry is highly cyclical in nature with periods of sharp upturn and
downturn in market prices. In the past, the DRAM industry has been characterized by
dumping during periods of significant downturn. For instance, various foreign producers
were found to have dumped during the downturn in the mid-1980s . . . and the Korean
respondents in this proceeding were found to have dumped in the less than fair value
investigation during 1991-1992, the last period when there was a significant downturn in
the DRAM industry. Because DRAMs are a commodity product, DRAM
producers/resellers must price aggressively during a downturn period in order to stay
competitive and maintain their customer base. This is especially true during the lowest
point in the downturn. Therefore, it is reasona ble to conclude that information regarding
the selling activities and pricing practices of respondents, as well as other market
conditions, during periods of significant downturn are relevant to whether dumping is not
likely to occur in the future. Thus, . . . we found the January through December 1996
time period to be particularly relevant to the “not likely” issue because it corresponded
with a significant “downturn” in the DRAM industry.
270
4.379 Next, the DOC addressed its findings regarding respondents’ pricing practices and production
levels during the market downturn that began toward the end of the third review period and continued
throughout 1996 and into 1997:
 . . according to Electronic Buyers News, total worldwide market revenue plunged 38%
to $25.13 billion in 1996. Both Hyundai and LGS reported dramatic decreases in
revenues in their 1996 publicly available financial statements. . . . Although we agree
with the respondents that DRAM prices have recovered somewhat during 1997, prices

265 See, e.g., Case Brief of Hyundai, at 5 (Ex. USA-12).
266 Final Results Third Review, 62 Fed. Reg. at 39812 (Ex. USA-1).
267 Id. at 39814-16.
268 Id. at 39824.
269 Id. at 39810, 39811, & 39816.
270 Id. at 39810.

fell significantly during the 1996 downturn. In any case, it appears that pricing in the
DRAM market has not yet fully recovered. Current prices are still lower than in the years
preceding the 1996 market downturn, years in which the respondents were found not to
be dumping. Furthermore, prices have, in fact, decreased recently . . . the average price
for a 64M DRAM is now in the mid $40 range, down from $55 earlier this year.

In regard to inventory levels and the supply of DRAMs, the record demonstrates that
supply exceeded demand during 1996 and thus far in 1997 ... . [I]t is uncertain how long
it will be before production returns to previous levels in anticipation of increased demand
in the marketplace. According to Electronic Buyer’s News (January 27, 1997, Issue
1042), an upturn in demand in October, 1996, triggered a simultaneous increase in
production . As a result, the DRAM market was glutted, driving prices down in
December, 1996 to one of the lowest levels during the downturn.
271
4.380 At this point, the DOC turned its attention to evidence on the record concerning the
possibility of sales at less than normal value in the United States. In particular, the agency
summarized the company-specific data submitted by respondents as part of the third administrative
review (i.e., data up to, and including, April 30, 1996) and the data received or obtained by the DOC
regarding subsequent periods:
…(1) The respondents’ own sales and cost data indicate that there were a substantial
number of home market sales made at prices below COP during the two months
immediately following the close of the third administrative review, (2) the lowest point
of the downturn, in terms of DRAM pricing and other market conditions, did not occur
until after mid-1996 (well after the end of th e third administrative review period); (3)
publicly available spot market pricing data, when viewed in conjunction with the
respondent’s cost data, extrapolated to a future point in time, indicate that LGS and
Hyundai may have made U.S. sales at prices below COP during 1996; (4) respondent’s
own pricing data indicate that [their] contr act prices generally follow the same pricing
patterns as spot market prices ... . [I]n light of the market conditions during the
downturn and the fact that the months ac tually examined during the POR [period of
review] did not include the lowest point in the downturn, we find that the existence of
below-cost sales during May and June of 1996 suggests that the number of below-cost
sales increased following the end of the third review period as the DRAM market
worsened. As prices in the DRAM market fell, a substantial number of sales were made
below cost. This pattern is suggestive of deteriorating market conditions that often give
rise to dumping.272
4.381 Lastly, after discussing LG Semicon’s assertion that it has no economic incentive to dump in
the United States,273 the DOC addressed respondents’ argument that they did not dump subsequent to
the third review period because their production costs were declining as fast as prices were falling:

271 Id. at 39816-17.
272 Id. at 39817 (emphasis added).
273 The relevant portion of the notice states:
In this regard, LGS argues that it has a relatively small share of the U.S. market, which decreases its
economic incentive to dump. However, the United States is part of the world’s largest regional market for
DRAMs, with considerable growth potential. Given the importance of the U.S. market, as a general matter,
even a producer with a relatively small market share would have an incentive to ride out industry downturns.
The fact that DRAM producers, including the Korean respondents, have historically been found to have dumped
during downturns supports this conclusion.
Id. at 39819.

Historical data support the premise that both costs and prices of any given generation
of DRAM will decline over time. What respondents have been unable to
demonstrate, however, is that the decline in costs kept up with the rapid rate of
decline in prices during the second half of 1996.274
4.382 As a result of the DOC’s fi nal determination, it did not revoke the anti-dumping order.
However, entries covered by the challenged review were not assessed (or levied) anti-dumping duties
and the cash deposit rate for subsequent entries (i.e., entries made after 30 April 1996) of respondents’
merchandise was set at zero.275
E. CLAIMS UNDER ARTICLES 2, 6 AND 17 OF THE AD AGREEMENT
1. Failure to Verify Information from the US, and Failure to Consider Fairly and
Objectively Respondents’ Information and Data
(a) Claim raised by Korea
4.383 Korea claims that in analyzing the "no likelihood/not likely" criterion for revocation, the
United States violated its obligations under and the standards set forth in Articles 2.2.1.1, 6.6 and
17.6(i) of the AD Agreement. The following are Korea's argument in support of that claim:
4.384 In analyzing the “no likelihood/not likely” criterion, the United States violated its obligations
under and the standards set forth in Articles 2.2.1.1, 6.6 and 17.6(i) of the AD Agreement.
4.385 Article 17.6(i) states in relevant part:
the panel shall determine whether [i] the authorities’ establishment of the facts was
proper and whether [ii] their evaluation of those facts was unbiased and objective.
4.386 The United States: (i) improperly established the facts; and (ii) evaluated the facts in a biased
and non-objective manner. Thus, the Panel should find that the United States violated the standards
for review set forth at Article 17.6.
4.387 Article 6.6 states in relevant part:
the authorities shall during the course of an investigation satisfy themselves as to the
accuracy of the information supplied by interested parties upon which their findings are
based.
4.388 The United States violated its obligation under Article 6.6 because it failed to satisfy itself as
to the accuracy of data supplied by Petitioner. Indeed, the United States uncritically accepted and
relied on Petitioners’ data without taking any action to confirm that it was accurate.
4.389 Article 2.2.1.1 states in relevant part:
costs shall normally be calculated on the basis of records kept by the exporter or
producer . . ., provided that such records are in accordance with the generally accepted
accounting principles of the exporting country and reasonably reflect the costs associated
with the production and sale of the product under consideration.

274 Id.
275 These entries are, in fact, the subject of an administrative review initiated by the DOC on 19 June
1997. As part of this review, respondents have renewed their requests for revocation pursuant to section
353.25(a) of the DOC’s regulations. See Dynamic Random Access Memory Semiconductors of One Megabit or
Above From Korea; Preliminary Results of Antidumping Duty Administrative Review and Notice of Intent not to
Revoke Order, 63 Fed. Reg. 11411 (9 Mar. 1998) (Ex. USA-27).

4.390 The United States disregarded cost data prepared by Respondents which were in accordance
with generally accepted accounting principles of Korea and accurately reflected costs, thereby
violating its obligation under Article 2.2.1.1.
4.391 To support its decision regarding the likelihood of dumping in the future, the United States
disregarded a valid econometric study on DRAM cost and pricing and Respondent-specific cost and
pricing data
276 and relied instead on irrelevant spot market pricing and speculative assumptions of
future costs supplied by Petitioner. 277 Also, the DOC disregarded Respondents’ data collection
proposal, apparently assuming (incorrectly) that it had no bearing on the likelihood issue.
4.392 The US divided its analysis of the revocation issue into four topics:
• Pricing Trends in the DRAM Industry;
• Inventory Levels;
• Petitioner’s Allegation that LG Semicon and Hyundai Were Dumping in 1996;
and
• Whether Korean DRAM Producers Can Remain Competitive in the US Market
Without Dumping.278
As discussed in detail below, in analyzing each of these four topics, the DOC chose Petitioner’s
position over Respondents’. In doing so, the DOC unfairly disregarded actual Respondent-specific
price and cost data and embraced Petitioner’s irrelevant data, broad-brush allegations and unfounded
theories.
(i) Pricing Trends in the DRAM Industry.
4.393 The DOC analyzed pricing trends in the spot market and disregarded the actual price data
submitted by Respondents. However, as Respondents demonstrated to the DOC during the Third
Review, Respondents rely primarily on long -term contracts, not the spot market. 279 Moreover, the
DOC’s analysis did not even acknowledge the fa ct that the cost of producing 16 megabit DRAMs
(indeed of producing any DRAM) 280 has decreased dramatically because of die shrinkage and yield
improvements.281 The DOC concluded its analysis of this topic by indicating that “although the
DRAM market has stabilized somewhat, prices continue to fluctuate and a large degree of uncertainty
about the direction of the market remains.” 282 That statement is hardly indicative of a fair and
objective determination of future dumping by Respondents. Obviously, DRAM prices fluctuate--this
is a commodity market, after all. However, just as important and inexorable, DRAM costs fall. There

276 See Case Brief of Hyundai, Exhibits 2 and 3, Case No. A-580-812 (21 April 1997) (Ex. ROK-35).
277 Notice of Final Results of Anti-dumping Duty Administrative Review and Determination Not to
Revoke Order in Part; DRAMs from Korea, 62 Fed. Reg. 39809, 39814-39819 (24 July 1997) (Ex. ROK-3).
278Id.
279 Case Brief of Hyundai, Case No. A-580-812 (21 April 1997) at 14 (Ex. ROK-35); Notice of Final
Results of Anti-dumping Duty Administrative Review and Determination Not to Revoke Order in Part; DRAMs
from Korea, 62 Fed. Reg. 39809, 39817 (24 July 1997) (Ex. ROK-3). Generally, in a declining market, spot
market prices will be lower than previously negotiated long-term contracts. Therefore, an analysis between spot
prices and cost unfairly disadvantaged Respondents, which sold primarily pursuant to long-term contracts.
280 Shipments of 16 megabit DRAMs in the United States more than doubled between 1995 and 1996
and were the major density category in 1997.
281 The shrinkage and yield improvements inherently drive costs down. Costs are important because, as
DRAMs are a commodity product with high value and low transportation costs, unitary worldwide pricing
precludes a finding of dumping based on price-to-price analyses. However, when pricing falls below cost there
are certain scenarios where dumping may occur. See Article 2.2 of the AD Agreement.
282 Notice of Final Results of Anti-dumping Duty Administrative Review and Determination Not to
Revoke Order in Part; DRAMs from Korea , 62 Fed. Reg. 39809, 39817 (24 July 1997) (emphasis added by
Korea) (Ex. ROK-3).

is no indication on the record that DRAM prices fell or will fall faster or for a more sustained period
than DRAM costs. On the other hand, the record does contain an econometric study regarding
Respondents’ cost trends which concludes that Respondents will not dump in the future. The DOC
summarily rejected this report.283 The DOC’s conclusion reflecting an axiom of commodity markets--
“prices fluctuate”--would not be an adequate basis for a decision not to revoke were it standing alone,
much less here, where the record contains contrary empirical data and a valid econometric study.
(ii) Inventory Levels.
4.394 In discussing whether inventory levels would increase or decrease,
284 the DOC acknowledged
that Respondents publicly had announced DRAM production cutbacks “and it appears that the market
has reacted with higher prices.” However, it then concluded erroneously that “it is unclear how much
of an effect this will have on the overall supply of DRAMs.”
285 It should have been obvious to the
DOC that, in this commodity market, if prices were to rise and demand did not, then production and
inventory would have been cut. There is no credible evidence on the record that production did not
decrease just as Respondents stated. Inventory levels naturally decreased and prices rose in response
to these production and inventory decreases.
4.395 The DOC refused to revoke the order even though Respondents’ data were not refuted. The
DOC failed to apply basic economic supply and demand theories or to distinguish between
Respondents’ facts and the US petitioner’s unfounded assertions.
(iii) Petitioner’s Allegations that LG Semicon and Hyundai Were Dumping in 1996.
4.396 The DOC employed unreliable extrapolations and suppositions and irrelevant spot market
pricing, and ignored Respondents’ verified actual costs, en route to determining that Respondents did
not satisfy the “no likelihood/not likely” criterion for revocation because they may have dumped in
1996. Even while agreeing with Respondents that an allegation concerning sales at below COP
largely was irrelevant for purposes of detecting dumping in the post-review period, the United States
relied on that irrelevant data to find that future possible market conditions (also based largely on
irrelevant spot-market pricing) produced a “pattern [that] is suggestive of deteriorating market
conditions that often give rise to dumping.” 286 The DOC’s use of irrelevant data to “suggest” that
dumping may occur directly contravenes the mandate of Article 17.6 of the AD Agreement, which
requires Members to base determinations on an objective and fair analysis of facts, not speculation
and conjecture.
4.397 In addition, in analyzing whether Respondents had dumped in 1996, the DOC relied on
unverified data from Micron, while rejecting verified data supplied by Respondents. Micron’s “data”
consisted of news articles and research reports regarding the state of the industry, including spot
market prices. The data were not verified (and were not specific or, even, germane to either
Respondent). Respondents, in contrast, submitted actual cost and price data for the period. The DOC
verified the data for that part of 1996 that was within the period of review. These data and
Respondents’ actual cost and price data demonstr ated, conclusively, that Respondents were not
dumping in 1996. The DOC’s failure to treat properly Respondents’ actual cost and price data, and
acceptance of Petitioner’s data, violates Articles 2.2.1.1 and 6.6, respectively, of the AD Agreement.

283 Case Brief of Hyundai, Exhibit 2, Case No. A-580-812 (21 April 1997) (Ex. ROK-35); Notice of
Final Results of Anti-dumping Duty Administrative Review and Determination Not to Revoke Order in Part;
DRAMs from Korea, 62 Fed. Reg. 39809, 39818 (24 July 1997) (Ex. ROK-3).
284 In theory, large inventory overhangs will either depress prices by their very existence or will depress
prices once the inventory is released.
285 Notice of Final Results of Anti-dumping Duty Administrative Review and Determination Not to
Revoke Order in Part; DRAMs from Korea, 62 Fed. Reg. 39809, 39817 (24 July 1997) (Ex. ROK-3).
286 Id.

Moreover, the DOC’s treatment of these data violates the standard of Article 17.6 of the AD
Agreement, which requires Members to base determinations on an objective and fair analysis of facts.
(iv) Whether Korean DRAM Producers Can Remain Competitive in the US Market Without
Dumping.
4.398 In the DOC’s Final Results, it stated that “[i]n sum, the current condition of the DRAM
market and the data on the record supports a conclusion that the not likely criterion for revocation has
not been satisfied.”287 The DOC also unreasonably claimed that “Respondents have been unable to
demonstrate . . . that the decline in costs kept up with the rapid rate of decline in prices during the
second half of 1996.”288
4.399 This is inaccurate. The record evidence--including the economic analyses of Dr. Flamm and
Law & Economics Consulting Group--establishes th at Korean DRAM manufacturers have not
dumped and will not dump in the future. In addition, Respondents provided actual cost and price data
to refute Micron’s unfounded speculation and conjecture. As Respondents pointed out in the Review,
costs decrease rapidly in the DRAM industry and prior cost decreases were sufficient to ensure that
Respondents did not dump in the relevant examination periods, which included significant downturns.
Moreover, Respondents demonstrated in numerous ways that they had no economic incentive to dump
in the US market.
For example:
Hyundai
1. does not depend on exports from Korea to supply the U.S. market because it
has invested $1.4 billion to construct a DRAM wafer-fabrication facility in the
United States; and
2. does not have to rely on the U.S. market to absorb its Korean production,
because demand for DRAMs is growing in Korea, Southeast Asia and
Europe.289
LG Semicon
1. has a stable, relatively small presence in the United States;
2. has a customer base of first-tier computer manufacturers that depend on steady
supply (in this sub-market, pricing is significantly less volatile than it is in the
spot market); and
3. is focusing on Southeast Asian markets.290
4.400 In addition, each company submitted detailed economic studies demonstrating that it had no
economic incentive to dump.291
4.401 Respondents have not dumped; Respondents have no reason to dump in the United States;
and the record data verified that they will not dump in the future. Therefore, the DOC’s analysis of

287 Id. at 39819.
288 Id.
289 See Case Brief of Hyundai, Case No. A-580-812 (21 April 1997) at 16 and 26-27 (Ex. ROK-35).
290 See Case Brief of LG Semicon, Case No. A-580-812 (21 April 1997) at 16-61 (Ex. ROK-2);
Rebuttal Brief of LG Semicon Co., Ltd., Case No. A-580-812 (30 April 1997) at 8-20 (Ex. ROK-39).
291 See Exs. ROK-39, ROK-30 and ROK-35.

this topic and its conclusion that Respondents’ inability “to demonstrate” precludes revocation is not
indicative of Respondents’ data or the state of the market.” It is unreasonable, conclusory and
unsupported by the facts.
4.402 In addition, in analyzing whether Respondents could remain competitive without dumping (as
was the case in analyzing whether Respondents had dumped in 1996--see paragraph 4.74), the DOC
relied on unverified data from Micron, while rejecting verified data supplied by Respondents. The
DOC’s reliance on unverified, non-germane data rather than Respondents’ verified data violates
Article 6.6 of the AD Agreement, which requires Members to “satisfy themselves as to the accuracy”
of data submitted and relied upon to support a finding. It also violates the standard of Article 17.6 of
the AD Agreement, which requires Members to base determinations on an objective and fair analysis
of facts.
4.403 Korea, in response to a question from the Panel,
292 subsequently clarified its claim under
Article 17 as follows:
4.404 Korea’s claim is that when the Panel examines the conduct of the United States, applying the
standards of review at Article 17.6, the Panel should find that:
• the DOC’s establishment of the facts was improper;
• the DOC’s evaluation of the facts was biased and not objective; and
• the US interpretations of various provisions of the AD Agreement are impermissible.
4.405 As a result of these findings, the Panel then should make appropriate recommendations and
suggestions to the US Government. Use of the word “violated” in a few instances in Korea’s first
submission was meant as a shorthand reference to this point. Korea does not take the position that the
United States “violated” Article 17.6 in the same sense that it violated Articles 2, 5.8, 6, 11.1 and 11.2
of the AD Agreement and Articles I, VI and X of the General Agreement.
(b) Response by the United States
4.406 The following are the United States' arguments in response to Korea's claim:
4.407 Korea attacks the DOC’s analysis of the DRAM market and Respondents’ selling activities
during and after the lowest point in the 1996 mark et downturn. According to Korea, the DOC based
its determination not to revoke “on unverified information from the US petitioner and on mere
conjecture, and by failing to consider fairly and objectively Respondents’ information and data.” The
DOC’s analysis, Korea insists, “is nothing more than a transparent effort . . . to substantiate its
groundless conclusion.” Korea even accuses the United States of a “pattern of bias [that] is
pervasive.”
4.408 These allegations are without merit.
(i) Pricing Trends in the DRAM Industry
4.409 Korea’s basic allegation is that the DOC erred when it concluded that the DRAM market
experienced a significant downturn in 1996 that might continue well into 1997. Korea maintains that
the record in the underlying administrative proceeding established that: (i) by the end of 1996, the

292 The Panel recalls that the question was: "Korea argues that the United States has violated certain
substantive obligations under Article 17.6 of the AD Agreement. Could Korea please explain the nature of that
violation in concrete terms?"

DRAM market was firmly on the road to recovery; (ii) the DOC focused on price trends in the spot
market and ignored data on Respondents’ contract prices to original equipment manufacturers
("OEMs"); (iii) the DOC did not even “acknowledge” that DRAM costs constantly decline; and (iv)
DRAM prices were not falling faster (or for a more sustained period) than DRAM costs.
4.410 In point of fact, when the administrative record closed to new factual information on
2 May 1997, the road to recovery for the DRAM industry was, at best, bumpy. First of all, the
enormity of the 1996 downturn cannot be over-stated. It was the first year of negative growth for the
DRAM industry since the downturn in 1985. 293 As put by Kenneth Flamm, Hyundai’s economic
consultant, “[n]o forecaster predicted the exceptional magnitude of the enormous decline in DRAM
prices that took place in the 2nd quarter of 1996.”294
4.411 Secondly, the only reason anyone in the industry was talking about a recovery in 1997 is
because the Korean producers announced production cutbacks toward the end of February, 1997, 295
and not because the systemic problems which plague this industry ( e.g., excess production capacity,
excess supply, accumulated inventory) had corrected themselves. 296 Therefore, while the
announcement had a positive impact on the market, 297 it was, at best, a temporary measure which
could easily reverse itself. 298 According to a February, 1997 report prepared by De Dios &
Associates, and cited by Korea:
You will notice, however, that the basis fo r the momentum deviates from the normal
causes of price increases. We did not mention overwhelming demand or true and
prolonged lack of supply as reasons for the momentum. In the end, strong demand and
prolonged lack of supply are the bases for a true shortage. What we have here is a
temporary situation that will change.299
4.412 In its rebuttal submission, Korea will undoubtedly argue that one of the ways the market
could have “changed” at this time was for the better. It will cite passages in the administrative record
where various investment bankers and industry expert s predict higher prices and better times for the
DRAM industry in 1997.300 What it will ignore, is roughly the same number of experts who were not
sure which way the market was headed and who openly expressed concerns about its future. 301 This
evidence, which was put on the record as late as 2 May 1997 (more than six weeks after the DOC’s

293 LG Semicon Case Br., Ex. B (VLSI Research) (Ex. USA-15); Case Brief of Hyundai, Ex. 2 at 5 and
Fig. 3 (“Flamm Study”) (Ex. USA-12).
294 Id., Ex. 2 at 22 (emphasis added by the United States).
295 Micron Rebuttal Br., Ex. 1 (Goldman Sachs) (Ex. USA-26); Case Brief of Hyundai, Ex. 7-11 (Ex.
USA 12).
296 See, e.g. , Case Brief of Hyundai, Ex. 10 (Morgan Stanley) (“the global oversupply problem still
remains”) (Ex. USA-12). For a fuller discussion of the economic forces that were pulling on the DRAM
industry during the very volatile period before and after the DOC’s preliminary results in this case, see Id., Ex. 5
(De Dios & Associates: “The DRAM Market Advisor”) (Ex. USA-12).
297 Indeed, spot market prices for 16 Meg DRAMs reportedly rose by approximately twenty percent on
mere rumors of the announcement. Id., Ex. 7 (Electronic News) (Ex. USA-12).
298 Id., Ex. 5 (De Dios & Associates) (Ex. USA-12).
299 Id. (emphasis added by the United States).
300 See, e.g., Id., Ex. 10 (Morgan Stanley) and Ex. 15 (Merrill Lynch) (Ex. USA-12); LG Semicon Case
Br., Ex. B (VLSI Research) (Ex. USA-15).
301 See, e.g. , Case Brief of Hyundai, Ex. 5 (De Dios & Associates: “The momentum and market
psychology can still shift back in the opposite direction.”) and Ex. 7 (Electronic News: “... others are left
wondering if the market can absorb the combined capaci ty coming from Korea, Japan and elsewhere ...”) (Ex.
USA-12). See also Letter from Hale and Dorr to Secretary of Commerce, 2 May 1997, at Ex. 1 (Electronic
Buyers’ News (28 Apr. 1997): “The mainstay 16-Mbit market last week continued to be highly unstable.
Analysts and independent distributors all agreed that average selling prices slipped about 10 percent in the spot
market.”) (Ex. USA-33).

preliminary results), established that numerous forces threatened to reverse the market’s brief
turnaround, including:
• the temptation on the part of Korean vendors to “ship more of their accumulated
inventory”;302
• excessive customer inventories due to “slow PC end-use demand”;303
• the tendency of some Japanese producers to “weigh additional profit margin against
strategic customer relationships”;304
• global oversupply and excess production capacity;305 and,
• the pricing strategies of European and US DRAM suppliers.306
4.413 Moreover, the uncertainty surrounding the direction of the market had not resolved itself by
the time the DOC issued its final results on 24 July 1997. For example, after initially rising on news
of the Korean “production cutbacks,” spot market prices for the 1Mx16 EDO DRAM decreased from
the $7.45 to $8.09 range on 13 June 1997 to the $6.30 to $6.85 range on 27 June 1997.307
4.414 This evidence, when measured with the entire record, led the DOC to conclude:
In sum, although the DRAM market has stabilized somewhat, prices continue to fluctuate
and a large degree of uncertainty about the direction of the market remains.308
4.415 Far from being a “tepid conclusion” which states the obvious, this finding by the DOC
accurately described the volatile state of the DRAM market in the late spring and early summer of
1997. As the DOC emphasized in later sections of its notice:
wholly apart from the data concerning the 1996 downturn, ... our analysis indicates that
market conditions in the DRAM industry remain volatile. As stated previously, while
the plunge in prices began to stabilize somewhat in early 1997, recent data indicate that
prices are headed downward again. For example, according to publicly available data,
the average US price for a 16M DRAM fell from approximately $18.00 in May 1996 to
approximately $7.00 in December 1996. According to Dataquest, the price for the 16M
as of June 30, 1997 , is approximately $6.50. This represents a 64 percent decline in
prices between the end of the third period of review (April 30, 1996) and June 1997.
Since DRAMs are a commodity product, it is reasonable to expect that Korean producers
will match prevailing market prices in the United States.
309

302 Case Brief of Hyundai, Ex. 5 (De Dios & Associates) (Ex. USA-12).
303 Id.
304 Id.
305 Id. See also Id., Ex. 10 (Morgan Stanley) (Ex. USA-12).
306 Id. As if to underscore this point, Compaq Computer Corporation (“Compaq”), one of
Respondents’ “premium” OEM customers in the United States, stated in a letter to the DOC on 15 July 1997
that “[t]here is only one, worldwide DRAM market. What is done in Europe affects the market in the United
States.” Letter from Vinson & Elkins (on behalf of Compaq, et al.) to Secretary of Commerce, 15 July 1997, at
4 (hereinafter “Compaq Ltr.”) (Ex. USA-34).
307 Final Results Third Review , 62 Fed. Reg. at 39817, citing Dataquest (“The Semiconductor DQ
MONDAY Report,” Issue 24, 23 June 1997, and Issue 25, 30 June 1997) (Ex. USA-1).
308 Id.
309 Final Results Third Review , 62 Fed. Reg. at 39818 (emphasis added by the United States) (Ex.
USA-1).

4.416 In short, Korea’s claim that the DRAM market was firmly on the road to recovery by the end
of 1996 is without merit. 310 The DOC reasonably determined based upon facts properly established
that US market conditions in the DRAM industry remained volatile during the first part of 1997.
4.417 Equally infirm is Korea’s contention that the DOC ignored or disregarded: (i) Respondents’
contract prices to OEMs, (ii) the constant decline in DRAM costs, and (iii) the absence of any
evidence on the record which indicated that DRAM prices were falling faster (or for a more sustained
period) than DRAM costs. On the contrary, the admi nistrative record is replete with evidence that the
DOC gave careful consideration to each of these matters before making its final determination.
4.418 For example, the DOC determined, based upon company-specific cost and price data
provided by Respondents (and verified by the DOC), that as the market downturn in 1996 worsened
after the close of the third review, Respondents were forced to price a “substantial” portion of all
home market sales below their declining cost of production.
311 In addition, the DOC verified, as
Respondents had alleged, that their sales were based primarily on contract prices to OEMs (such as
Compaq), as opposed to "spot market" prices, and that contract prices tended to lag behind market
prices in a declining market. 312 However, the DOC also determined, based upon record evidence,
that: (i) contract prices to OEM customers follow the direction of prices on the spot market; and (ii)
when Respondents restricted the supply of DRAMs to distributors and brokers in February of 1997 in
order to stabilize spot market prices, their contract prices fell below the spot market. 313 According to
some industry observers, contract prices for DRAMs fell by as much as $4 below the spot market. 314
In summarizing its conclusions on these points, the DOC stated, in part:
We disagree with the Respondents’ assertion that the average US prices presented in the
petitioner’s analysis bear no relation to their actual US prices. We recognize that the
petitioner based its analysis upon average US spot market prices instead of contract
prices. However, based upon the average gross unit prices calculated using
Respondent’s own data from the POR, it appears that contract prices generally follow the
same pricing patterns as spot market prices. There is even evidence on the record
indicating that the actual contract prices were sometimes lower than the average spot
prices presented in the petitioner’s analysis.
315
4.419 Finally, the DOC determined, based upon record evidence, that contract and spot prices were
rapidly trending below Respondents’ reported costs of production throughout the period that

310 Also without merit is Korea’s claim that the DO C based its determination solely “on events during
calendar year 1996 ; and it did so despite acknowledging that market conditions in the DRAM industry had
recovered in 1997.” The DOC based its final determination upon properly established facts covering 1996 and
1997.
311 Analysis Memorandum from Program Manager to Deputy Assistant Secretary for Import
Administration, 16 July 1997, bates no. 41-45 (hereinafter “Final Analysis”) (Ex. USA-35).
312 Final Analysis, bates no. 52. See also LG Semicon Case Br., at 31-34 (Ex. USA-15). The DOC did
not verify, and the record does not support, Korea’s suggestion that contract prices were set over a “long-term.”
In a volatile market such as the one that prevailed throughout 1996, DRAM customers, such as Compaq, insist
upon renegotiating their purchase prices at least every quarter. Final Results Third Review , 62 Fed. Reg. at
39819 (Ex. USA-1).
313 See, e.g. , Case Brief of Hyundai, Ex. 5 at 12 (De Dios & Associates) (Ex. USA-12), Ex. 9
(Computer Reseller News) (Ex. USA-12), and Ex. 11 (Electronic Buyers News) (Ex. USA-12). According to
Morgan Stanley, “[t]he Korean firms executed the change skillfully. For example, they used a clever tactic
when they cut their shipments to discount brokers, who have a big influence on the spot price.” Id., Ex. 10
(Morgan Stanley) (Ex. USA-12).
314 Id., Ex. 9 (Computer Reseller News) (Ex. USA-12).
315 Final Results Third Review , 62 Fed. Reg. at 39817-18 (Ex. USA-1). Later in the notice, the DOC
revisited the relationship between spot and contract prices during the first several quarters of 1997: “In fact,
even into 1997, prices to OEM customers remained depressed, and below spot market prices, even as the spot
market prices began to show some increase.” Id. at 39819.

immediately followed the third administrative review. 316 Indeed, part of the DOC’s basis for this
determination was price data for the first quarter of 1997 provided by some of Respondents’ OEM
customers and company-specific cost projections for the second quarter of 1997 contained in the
Flamm Study.317
(ii) Inventory Levels
4.420 In the Final Results Third Review, the DOC stated:
although the Respondents have made public announcements regarding DRAM
production cut-backs and it appears that the market has reacted with higher prices, it is
unclear how much of an effect this will have on the overall supply of DRAMs.318
4.421 Korea contends that it “should have been obvious to the DOC that, in this commodity market,
if prices were to rise and demand did not, then production and inventory would have been cut.” 319
According to Korea, “[t]here is no credible ev idence on the record that production did not decrease
just as Respondents stated.”
4.422 On the contrary, a careful reading of the administrative record casts a large shadow of doubt
over the “production cutbacks” announced by the Korean producers. First, record evidence indicates
that the Respondents never actually “reduced” production. At most, they simply held back on
previously announced increases in production.
320 Secondly, the administrative record is awash in
evidence that the Respondents orchestrated a very “clever” tightening of the spot market in February
of 1997 by cutting back on shipments to distributors and brokers (who have a big influence on the
spot price), while maintaining shipments to their “premium,” OEM customers.
321 The record also
establishes that the Respondents were able to affect this change in the “market’s psychology,” as one
observer put it, by accumulating inventory. 322 Goldman Sachs, for example, informed clients as late
as 14 April 1997 that the Korean producers never instituted any type of production cutbacks. Instead,
they simply built up inventories “that will be unleashed on the market later.”323
(iii) Petitioner’s Allegation that LG Semicon and Hyundai Were Dumping in 1996
4.423 Korea argues that the DOC based its determination not to revoke the anti-dumping order on
DRAMs from Korea, in part, on certain data reported by Respondents which showed that their home
market sales made below cost increased at a rapi d pace in May and June of 1996 as the downturn in
the DRAM market worsened. Korea contends that because the DOC conceded that this information
was “irrelevant” to its analysis of dumping, the DOC should not have relied on these data to inform its
revocation decision. However, Korea misstates what the DOC actually did.

316 Final Analysis, bates no. 52-57, and 59 (Ex. USA-35).
317 Id. bates no. 59. While it is true that the DOC co nsidered many aspects of the study prepared by
Dr. Flamm to be unduly optimistic, see Final Results Third Review , 62 Fed. Reg. at 39818, Korea’s repeated
assertion that the DOC “ignored” or “summarily rejected” the study rings hollow. The DOC not only
scrutinized every inch of the study, see, e.g., Final Analysis , bates no. 58 (Ex. USA-35), but actually compared
some of Dr. Flamm’s optimistic projections of future costs with prices reported by several US customers of
Respondents.
318. 62 Fed. Reg. at 39817 (Ex. USA-1).
319 Whether “obvious” or not, Korea claims, without support or citation, that “[i]nventory levels
naturally decreased and prices rose in response to these production and inventory decreases.”
320 Case Brief of Hyundai, Ex. 10 at 1 (Morgan Stanley: “hold down increases in 16m DRAM
production . . . The recent announcement by the Korean s is that they will hold capacity expansion 30 percent
below originally projected levels.”) (Ex. USA-12) and Ex. 11 (Electronic Buyer’s News: “scale back a planned
16-Mbit production expansion by 30 percent”) (Ex. USA-12).
321 Id., Ex. 10 at 2 (Morgan Stanley) (Ex. USA-12).
322 See, e.g., Case Brief of Hyundai, Ex. 5 at 2-3 & 6 (De Dios & Associates) (Ex. USA-12).
323 Micron Rebuttal Br., Ex. 1 (Goldman Sachs) (Ex. USA-26).

4.424 To begin with, the DOC did not disregard any home market sales on the basis that they were
below cost when it calculated normal value in the final results of the third administrative review. 324
Thus, any arguments based upon the requirements of the below-cost test under United States law are
of no consequence.325
4.425 Secondly, the DOC did not equate sales made below cost during a two-month period with
dumping. As the agency clearly stated in its final results:
We note that, according to the DOC’s cost test methodology, these below cost sales were
not sufficiently numerous for the DOC to reject as a basis for determining normal value
in this third review. We also agree with LG Semicon that whether it made home market
sales at prices below the COP during the tw o months immediately following the close of
the third review period in and of itself does not demonstrate that dumping occurred.326
4.426 Instead, the DOC weighed all of the record evidence and arguments made by the parties
before it decided that the requirements set forth in 19 C.F.R. § 353.25 (1997) had not been met. As
the DOC explained in the final results of the challenged determination, Respondents’ dramatic
increase in below-cost sales immediately after the period of review was only one factor that
influenced its decision:
. . . we find that the not likely criterion for revocation has not been satisfied for the
following reasons: (1) The Respondents’ own sales and cost data indicate that there were
a substantial number of home market sales made at prices below COP during the two
months immediately following the close of the third administrative review; (2) the lowest
point of the downturn, in terms of DRAM pricing and other market conditions, did not
occur until after mid-1996 (well after the end of the third administrative review period);
(3) publicly available spot market pricing data, when viewed in conjunction with the
Respondent’s cost data, extrapolated to a future point in time, indicate that LG Semicon
and Hyundai may have made US sales at prices below COP during 1996; (4)
Respondent’s own pricing data indicate that [their] contract prices generally follow the
same pricing patterns as spot market prices. . . [I]n light of the market conditions during
the downturn and the fact that the months actually examined during the POR did not
include the lowest point in the downturn, we find that the existence of below-cost sales
during the May and June of 1996 suggests that the number of below-cost sales increased
following the end of the third review period as the DRAM market worsened. As prices
in the DRAM market fell, a substantial number of sales were made below cost. This
pattern is suggestive of deteriorating market conditions that often give rise to dumping.
327
(iv) Whether Korean DRAM Producers Can Remain Competitive in the US Market Without
Dumping
4.427 Korea asserts that the Respondents had no incentive to dump in the United States because
they were either establishing production facilities in the United States, had limited sales to the United

324 Final Results Third Review, 62 Fed. Reg. at 39817 (Ex. USA-1).
325 Under section 773(b) of the Act, home market sales that are below cost may be disregarded in the
calculation of normal value if they are made “within an extended period of time.” 19 U.S.C. § 1677b(b)(1)
(1997) (Ex. USA-19). “As in the [AD] Agreement, the term ‘extended period of time’ is defined in new
section 773(b)(2)(B) as being normally one year, but not less than six months.” Statement of Administrative
Action (URAA), H.R.Doc. 103-316, vol. 1, at 831-32 (1994) (Ex. USA-36). Since Respondents’ prices did not
begin to fall below their costs in substantial quantities until the end of the period covered by the third
administrative review ( i.e., 1 May 1995 to 30 April 1996), none of these sales were excluded from the DOC’s
calculation of normal value. Final Results Third Review, 62 Fed. Reg. at 39817 (Ex. USA-1).
326 Id. at 39817.
327 Id.

States, or because demand in other parts of the world was so great they could afford not to dump in
the United States.
4.428 With respect to Korea’s assertion that LG Semicon’s share of the US market was too small to
justify dumping, the record actually demonstrates th at the company’s share of the US market, both in
relative and absolute terms, was far from insignificant.328
4.429 As for Korea’s claim that both Respondents focus more on Southeast Asia and/or Europe, and
less on the United States, the record confirms that the United States is home to the world’s largest
consumers of DRAMs, including important customers of both LG Semicon and Hyundai. 329
Moreover, data obtained from Dataquest shows the Americas to be close to twice the size of other
regional markets for DRAMs. In 1996, for example, the Americas accounted for a reported $10,107
million in DRAM consumption, compared with $5,895 million for Asia/Pacific (excluding Japan),
$5,166 million for Japan, and $4,759 million for Europe.
330 In addressing these issues in the Final
Results Third Review, the DOC stated, in part:
... the United States is part of the world’s largest regional market for DRAMs, with
considerable growth potential. Given the importance of the US market, as a general
matter, even a producer with a relatively small market share would have an incentive to
ride out industry downturns. The fact that DRAM producers, including the Korean
Respondents, have historically been found to have dumped during downturns supports
this conclusion.
331
4.430 Finally, Korea’s claim that Hyundai had no incentive to dump because it is building a DRAM
factory in the United States cannot be sustained. First of all, what little information is on the record
regarding this issue indicates that the plant ha d not been completed, let alone begun commercial
operations, at the time the DOC issued the Final Results Third Review.332 Secondly, there is nothing
on the record of the underlying administrative proceeding which demonstrates that Hyundai would not
continue to import DRAMs into the United States once the plant was completed.
(c) Rebuttal arguments made by Korea
4.431 Korea in its oral statement at the first meeting of the Panel with the Parties, further argued as
follows:
4.432 The United States improperly established the facts; and evaluated the facts in a biased and
non-objective manner, in violation of the standards set forth in Article 17.6. The United States
violated its obligation under Article 6.6 by failing to satisfy itself as to the accuracy of data supplied
by Petitioner. Indeed, the United States uncritically accepted and relied on Petitioners’ data without
taking any action to confirm that it was accurate. The United States disregarded cost data prepared by
Respondents which were in accordance with generally accepted accounting principles of Korea and
accurately reflected costs, thereby violating its obligation under Article 2.2.1.1. Finally, to support its
decision regarding the likelihood of dumping in the future, the United States disregarded a valid
econometric study on DRAM cost and pricing and Respondent-specific cost and pricing data and
relied instead on irrelevant spot market pricing and speculative assumptions of future costs supplied
by Petitioner. Also, the DOC disregarded Respondents’ data collection proposal, apparently assuming
(incorrectly) that it had no bearing on the likelihood issue.

328 Final Analysis, bates no. 50 (Ex. USA-35).
329 Id.
330 Id.
331 62 Fed. Reg. at 39819 (Ex. USA-1).
332 Case Brief of Hyundai, at 26 (Ex. USA-12).

(d) Rebuttal arguments made by the United States
4.433 The United States makes the following rebuttal arguments:
(i) The United States Appropriately Satisfied Itself as to the Accuracy of the Data Relied Upon
4.434 Korea’s generalized allegation that the DOC relied upon data submitted by Micron without
satisfying itself as to the accuracy of the data is baseless. The DOC appropriately evaluated all of the
information gathered in the underlying administrative proceeding, and relied upon information
submitted by both Respondents and by Micron in reaching its determination concerning the likelihood
of future dumping.
4.435 First, the DOC conducted on-site verifications of the cost and sales data submitted by LG
Semicon and Hyundai in their questionnaire responses for the May 1995 to April 1996 third review
period (including home market cost and price data through June 1996).
333 As discussed in the first US
submission, the DOC relied on this verified cost and price data in its determination not to revoke,
when it concluded: (i) that Respondents had made a substantial number of sales below cost in Korea
in May and June 1996, as the rapid and continuing decline in DRAM prices drove their prices below
cost; and, (ii) that Respondents’ verified cost data for 1995 and the first half of 1996, extrapolated
forward to the second half of 1996, indicated that Respondents may have already resumed dumping in
the latter half of 1996.
334
4.436 Second, the DOC satisfied itself as to the accuracy of the information it relied upon
concerning developments following the end of the third-review period. This information, submitted
by the Respondents as well as by Micron and other interested parties, included independent market
analysts’ reports from such reputable brokerage houses as Goldman Sachs, Merrill Lynch, Lehman
Brothers, and ABN Amro Hoare Govett; business and market news reporting by well-known news
organizations such as the Wall Street Journal, New York Times, Financial Times, Reuters, Korea
Herald, and Nikkei; and reports from various trade journals.335 As the DOC noted in the Final Results
Third Review, the Respondents and their customers submitted data on average US prices reported by
Dataquest and the American IC Exchange, studies by independent analysts and numerous newspaper
and magazine articles.336
4.437 The DOC did not accept such reports uncritically, but instead appropriately evaluated the
factual assertions made by the interested parties, and satisfied itself as to the accuracy of the
information on which it relied. For example, as discussed in the first US submission, the Korean
Respondents contended that the prevailing ex cess of DRAM supply over demand would be
ameliorated in the future by production cutbacks the Korean producers had announced on
30 January 1997. However, while their own production figures were obviously available to them, the
Respondents did not provide any data to substantiate their assertion that they had, in fact, cut back
production. Instead, in their 18 April 1997 case briefs before the DOC, they relied exclusively on
news reports concerning their earlier announcements.
337 The DOC appropriately discounted the news
reports of production cutbacks which were not substantiated by data readily available to Respondents.

333 Final Results Third Review, 62 Fed. Reg. at 39815-17 (Ex. USA-1).
334 Final Results Third Review, 62 Fed. Reg. at 34817 (Ex. USA-1).
335 See, e.g., LG Semicon Case Br. at Appendix B (submitting 13 industry research studies) and
Appendix C (submitting 18 news reports) (Ex. USA-15 & 96); Case Brief of Hyundai Ex. 5, 10, 15 (market
analysts’ reports) and Ex. 7-9, 11 (news reports) (Ex. USA-12); Micron Rebuttal Br. Ex. 1 (Goldman Sachs) and
Ex. 2, 3, 7-9 (news reports) (Ex. USA-26 & 97).
336 Final Results Third Review, 62 Fed. Reg. at 39814 (Ex. USA-1).
337 Case Brief of Hyundai at 19-20 and Ex. 7 (Ex. USA-12 & 98); LG Semicon Case Br. at 66-69 (Ex.
USA-99). In this regard, it is worth noting that in the Indonesia Autos case, the panel justified a negative ruling
of market displacement or impedance under Article 6.3 of the Agreement on Subsidies and Countervailing
Measures on the failure of the complainants to provide evidence that, according to the panel, was at the disposal

4.438 Similarly, the DOC carefully considered each of the parties’ contentions concerning both the
reliability of the submitted information and the appropriate conclusions to be drawn from it. 338 For
example, the DOC specifically addressed LG Semicon’s argument that the DRAM pricing data series
compiled by Lehman Brothers (a well-known US brokerage house) and submitted by Micron was
unreliable, noting that [t]hese data were similar to other pricing data submitted on the record,
including the pricing data obtained from the Am erican Integrated Chip Exchange (AICE) and
Dataquest.
339 In each case, the DOC applied its considerable experience in market analysis and
considered the source of the information, its internal logic, and its consistency with other information
in determining its accuracy and usefulness. In short, there simply is no basis for Korea’s claim that the
DOC did not satisfy itself as to the accuracy of the data that it relied upon.
(ii) The United States Properly Evaluated All Cost Data Submitted by the Korean Respondents
4.439 Korea alleges that the United States violated Article 2.2.1.1 of the AD Agreement by
disregarding cost data prepared by Respondents, which, it claims, was prepared in accordance with
Korean GAAP and accurately reflected costs. The record is clear, however, that the DOC verified the
cost data submitted by both Respondents as it pertained to cost of production for the third-review
period (covering quarterly costs from the first quarter of 1995 through the second quarter of 1996).
The DOC relied on this verified cost data in considering whether Respondents may have resumed
dumping in the months following the end of the third-review period.
4.440 In addition to the cost data for the third review submitted by both Respondents, late in the
proceeding, LG Semicon also submitted information which purportedly represented its cost of
production for two DRAM models in the second half of 1996. These data were not submitted in the
same format as the data in the third review ques tionnaire response, with underlying detail and copies
of the company’s financial statements for the period, nor were they provided in the form of hard
figures of the kind that could be verified by reconciliation to financial and cost records. Instead, the
claimed cost of production information was submitted in the form of data points on a graph, with an
express disclaimer that [t]he reported figures were calculated based on best information currently
available.
340
4.441 In addition, numerous news reports and market analysts’ reports were submitted which
indicated that LG Semicon had made several changes in accounting practices, including changes in
the accounting for depreciation and for foreign exchange losses. 341 These reports indicated that LG
Semicon had a loss of 40 billion won in the second half of 1996, and would have reported a loss for
the year if it continued to use the accounting methods it had used in the prior year. 342 The DOC noted
these changes, and further noted the fact that LG Semicon failed to identify these adjustments to its
costs significantly reduces the reliability of the information. We are uncertain whether LG Semicon
made other adjustments to its reported costs. 343
4.442 Despite LG Semicon’s claim that its late-submitted 1996 cost data were prepared in
conformity with its financial statements, LG Semicon never submitted its 1996 financial statements to
allow the DOC to confirm LG Semicon’s assertion, or to determine whether any other accounting

of the companies in question. Indonesia - Certain Measures Affecting the Automobile Industry , WT/DS54/R,
WT/DS55/R, WT/DS59/R, WT/DS64/R, Report of the Panel issued 2 July 1998, para. 14.234 (unadopted).
338 See Final Results Third Review , 62 Fed. Reg. at 39817 ( We have reviewed the data submitted by
the petitioner as well as all arguments and information on the record regarding the veracity of the data and the
underlying assumptions. . . . [M]any of the Respondents’ arguments concerning the alleged distortions and
inaccuracies in the petitioner’s analysis lack merit. ) (Ex. USA-1).
339 Id. at 39818. See also Micron Rebuttal Br. Ex. 6 (Ex. USA-97); Case Brief of Hyundai Ex 5 (Ex.
USA 12).
340 LG Semicon Case Br. at 57, n. 21 (Ex. USA-99).
341 Final Results Third Review, 62 Fed. Reg. at 39818 (Ex. USA-1).
342 Micron Rebuttal Br. at 8-10 and Exhibits 2 & 3 (Ex. USA-97).
343 Final Results Third Review, 62 Fed. Reg. at 39818 (Ex. USA-1).

changes had been made. Under these circumstances, the DOC properly concluded that, taking into
consideration LG Semicon’s verified cost data for the first half of 1996, that the piecemeal data
submitted for the second half of 1996 could not be accepted at face value. The DOC was under no
obligation to accept the incomplete cost data in the format submitted by LG Semicon when it
contained undisclosed changes in accounting methods and an unsubstantiated claim that it was
prepared in accordance with its normal accounting records.
(iii) The United States Appropriately Discounted Hyundai’s Economic Study Containing
Unrealistic Projections of Costs and Prices and Respondents’ Unsubstantiated Cost and Pricing Data
4.443 Korea also claims that the DOC improperly disregarded an economic study submitted by
Respondent Hyundai that purported to show, based on a number of assumptions concerning the trend
in prices and costs, that Hyundai’s prices would remain above its costs in the second half of 1997 and
1998. The DOC did not ignore the Flamm study. To the contrary, in the Final Results Third Review ,
the DOC carefully considered Respondent’s submissions, but concluded that the unrealistic
assumptions on which the study was based (which assumptions were contradicted by other data
submitted by Respondents and by pricing data submitted by their computer customers) rendered the
study’s projections unreliable.
344 Indeed, as noted by the DOC, those optimistic projections had
already proved incorrect by the pricing trends and analysts’ reports in June 1997. 345 While baldly
asserting that the Flamm study was a valid econometric study, Korea does not address any of the
specific flaws in its underlying assumptions that the DOC identified in its determination.
4.444 Korea also complains that the DOC disregarded the Respondent-specific cost and pricing data
submitted by the companies. The DOC in fact relied upon the verified cost and pricing data for the
third-review period that Respondents had submitted in their questionnaire responses. In addition, one
Respondent, LG Semicon, submitted monthly averages for selected cost and pricing data. The DOC
properly discounted that data (which in itself s howed that LG Semicon’s earlier projections were
erroneous).
4.445 Korea further asserts that Respondents’ data (w hich were verified by the DOC) showed that
their contract prices were above spot prices. However, Korea does not cite any specific evidence in
the record to support its assertion, apparently re lying generally on its earlier reference to the data
submitted by Respondents in their 18 April 1997 case briefs. The DOC properly evaluated
Respondents’ data, in light of all the evidence on the record including actual pricing data submitted
by the OEM computer customers themselves and concluded that Respondents’ contract pricing
generally followed the pricing trends in the spot market.
346
4.446 LG Semicon submitted two charts in its 18 April 1997 case brief (at 49-50, Figures 5 and 6)
in support of its argument that its contract prices to OEMs during the third-review period were above
the average US spot-market price. Those charts actually support the DOC’s conclusion that
Respondents’ US prices followed the declining trend of spot prices, and that the extrapolation of those
trends indicated that Respondents already may have made sales below cost during 1996.
4.447 To the extent that the charts show a lag between LG Semicon’s prices and the rapidly
declining spot prices in the second quarter of 1996, it reflects a fundamental distortion in the way the
data were presented by LG Semicon. The charts present LG Semicon’s quarterly average prices and
costs for 4 meg and 16 meg DRAMs from the first quarter of 1995 through the second quarter of
1996, based on US prices and cost data submitted in the third review. However, because the third

344 Final Results Third Review , 62 Fed. Reg. at 39818 (Ex. USA-1). See also Micron Rebuttal Br. at
Ex. 5 (Critique of Flamm Analysis) (Ex. USA-97).
345 Id. ( current market conditions do not bear the strong demand assumption out ).
346 Final Results Third Review, 62 Fed. Reg. at 39817-18 (Ex. USA-1).

review covered US sales made during the period 1 May 1995 through 30 April 1996,347 what is shown
in the chart as the average US price for the second quarter of 1996 actually represents sales for just the
first month (April 1996) in the quarter. In a rapidly dec lining market, using prices for just the first
month of a quarter to represent a quarterly average badly skews the comparison. This error was
compounded when LG Semicon uses these quarterly averages to derive trends on which it based cost
and price projections for the second half of 1996.
348
4.448 The distortion in the calculation of LG Semicon’s average DRAM prices for second quarter
1996 was demonstrated by the additional pricing data submitted by LG Semicon, purporting to show
actual monthly average US prices for May to December 1996. 349 The monthly US pricing data for
May and June show the gross distortion reflected by the quarterly average data for the second quarter
of 1996, as well as in the projections for the second half of 1996 that are based on a trend using the
distorted quarterly average.
350
(iv) The United States Properly Relied on Publicly Available Reports Concerning Market Price
Trends and Projections of Costs Based on Respondents’ Verified Cost Submissions
4.449 Korea contends that the DOC improperly relied on publicly reported spot-pricing data in
considering pricing trends and price levels, arguing that spot prices are irrelevant to the assessment
of the market-pricing trends. Similarly, Korea asserts that the DOC improperly utilized the cost
projections submitted by Micron, which were based on Respondents’ own verified cost data for the
third-review period. The United States reaffirms the discussion in its first written submission which
showed that Korea’s arguments are groundless.
4.450 The DOC carefully considered Respondents’ arguments against reliance on independent
analysts’ spot-market pricing data in making determinations concerning the pricing levels and trends
in the DRAM market. Respondents claimed that their sales to OEM customers, which Korea now
asserts were made according to long-term contracts, did not precisely track spot-market prices.
4.451 First, the evidence does not support Korea’s assertion that Hyundai and LG Semicon sold to
US customers pursuant to long-term contracts. While Respondents may have reached periodic
understandings on prices with their OEM customers, the actual prices were set in individual purchase
orders, and were subject to change. As stated in their questionnaire responses, Respondents reported
the invoice date (generally coincident with the date of shipment to the customer) as the date of sale.
351
Under the DOC’s well-established practice, if all of the material terms of a sale are fixed in a legally
binding long-term contract including, most importantly, the product, the price and quantity of the sale
then the DOC would use the date of the long-term contract, not the invoice date, as the date of sale in

347 By contrast, pursuant to its standard questionn aire format, the DOC had collected information on
Respondents’ costs and sales in the home market through June 1996, as potential comparisons for the reported
US sales for the period through April 1996.
348 LG Semicon Case Br. at 52-54, Figures 7 and 8 (Ex. USA-99).
349 Id. at 58-59, Figures 9 and 10 (Ex. USA-99). These unsubstantiated data, first submitted late in the
proceeding with the case briefs, were submitted only in the form of data points on a graph showing simple
monthly weighted average prices, an averaging methodology that is not consistent with the DOC’s practice.
350 Compare LG Semicon Case Br. at 52-54 with id. at 55-59 (Ex. USA-99).
351 See, e.g., LG Semicon Questionnaire Response, Section C, 16 August 1996, at 7 ( LG Semicon has
reported invoice date as date of sale ) (Ex. USA-100); id., Section A, at 15 ( A variety of changes occur after the
initial {purchase order} that affect the terms of the sale. Price. As a result of changing market conditions, the
customer may demand a lower price. . . . ) (Ex. USA-100); Hyundai Questionnaire Response, Section A,
19 August 1996, at A-10 ( the product, unit price and quantity are shown in the purchase order from the
customer. Once a sales order has been issued, the terms, i.e., price, product, and quantity, may be modified. If
so, then a new sales order is issued. ) (Ex. USA-101).

its dumping analysis.352 Neither Respondent indicated in its verified questionnaire response that it sold
pursuant to such long-term contracts, and the DOC used the date of invoice as the date of sale.
4.452 Second, the evidence showed that even those OEM customers that had non-binding
understandings regarding pricing over longer periods abandoned such understandings as the DRAM
market price continued its dramatic fall th roughout 1996. A report on LG Semicon from the
brokerage house ABN Amro Hoare Govett, prepared in November 1996, stated:
LG Semicon’s interim net profits fell 60 percent {year-over-year} in 1H96 as prices
tumbled. However, the worst is yet to be reported for the company. . . . [A]lthough spot
market DRAM prices declined sharply in the first half of the year, the average for the
half was much higher than those which have prevailed so far in the second half.
However, the difference between the prices that LG Semicon actually realized in the first
half and the second half is likely to be even more pronounced because of long-term
contracts that many DRAM producers had signed. These were typically quarterly
contracts, and had the effect of keeping contract high above the spot market prices . . . By
mid-year, many industry sources confirmed that quarterly contracts had been replaced
by monthly contracts, and that prices were being renegotiated as often as once per week.
Consequently, the prices that DRAM makers have received on the bulk of their products
in the second half have been much closer to the spot market rate. As a result, we expect
that LG Semicon will post negative gross profits for the second half of 1996.
353
4.453 Consequently, while LG Semicon might have been in a position to obtain some price premium
over spot-market prices at the beginning of 1996, this situation clearly evaporated by the second half
of 1996, as longer-term price agreements were displaced and OEM customers had ample access to an
excess supply of DRAMs at even lower prices.
F. C
LAIMS UNDER ARTICLE X:1 AND X:2 OF GATT 1994
1. Transparency and Due Process in the Administration of Government Measures
(a) Submission by Korea
4.454 Korea makes the following arguments on the application of Article X:
4.455 Unlike most GATT provisions, which are concerned with the content of a government’s laws,
regulations, decisions and rulings, Article X of the General Agreement focuses on the administration
of those laws, regulations, decisions and rulings. 354 It articulates the fundamental principles of
transparency (publication and disclosure of government measures and actions) and what is widely
known as due process (fundamental fairness).
4.456 Despite its importance, there is very little pr ecedent regarding Article X. A review of the
relevant chapter of the GATT Analytical Index discloses that, in most disputes, complainants made
subsidiary claims regarding Article X. When panels found violations of a substantive GATT article,
however, they declined to rule on the subsidiary claim.
355 Given the past treatment of Article X,

352 See Anti-dumping Duties; Counter vailing Duties; Final Rule, 62 Fed. Reg. 27296, 27348-50 (Ex.
USA-102); id. at 27411 (codifying practice in new regulation, 19 CFR § 351.401(i)) (9 May 1997) (Ex.
USA 102)
353 Letter from Micron Technology, Inc. to Assistant Secretary LaRussa, 28 January 1997, at Ex. 1,
p.18 (emphasis added by the United States) (Ex. USA-103).
354 The Appellate Body referenced this distinction in European Communities–Regime for the
Importation, Sale and Distribution of Bananas (9 September 1997), WT/DS 27/AB/R, para. 200.
355 See 1 GATT, ANALYTICAL I NDEX: G UIDE TO GATT L AW AND P RACTICE 293-312 (6th ed.
1995).

Korea stresses its Article X claims are not subsidiary to any other claim. They are independent –
separate and distinct.
4.457 The GATT Analytical Index notes that Article X was based on the 1923 International
Convention Relating to the Simplification of Customs Formalities and on US proposals. 356 In Article
1 of the Simplification Convention, “[t]he Contracting States . . . undertake that their commercial
relations shall not be hindered by excessive, unnecessary or arbitrary customs or other similar
formalities.”
4.458 The concerns that led to the drafting of GATT Article X are fully expressed in the so-called
Sullivan Study, prepared by the US Department of State to annotate and explain the articles of the US
model friendship, commerce and navigation (FCN) treaty.
357 In the annotation for Article XV of the
US model FCN, which closely follows GATT Article X, the drafters state:
Inclusion of Article XV in the treaty is based primarily because of concern that customs
administration could nullify or impair the benefits occurring from the liberalization of
trade. This Article is intended to provide protection against a variety of forms of
administrative inequity or harassment which cumulatively could become a serious
impediment to trade. Article XV is based on ample precedents, including reciprocal
trade agreements, GATT, the proposed ITO Charter, and various multilateral conventions
on customs administration and formalities dating back to the 1920’s.
358
4.459 The WTO Appellate Body has recognized the critical role of the GATT Article X obligations.
In United States – Restrictions on Imports of Cotton and Man-made Fibre Underwear it stated:
Article X:2, General Agreement , may be seen to embody a principle of fundamental
importance – that of promoting full disclosure of governmental acts affecting Members
and private persons and enterprises, whether of domestic or foreign nationality. The
relevant policy principle is widely known as the principle of transparency and has
obviously due process dimensions . The essential implication is that Members and other
persons affected, or likely to be affected, by governmental measures imposing restraints,
requirements and other burdens, should have a reasonable opportunity to acquire
authentic information about such measures and accordingly to protect and adjust their
activities or alternatively to seek modification of such measures.
359
4.460 This quotation, which relates to the requirement of prior publication set out in Article X:2,
applies with equal force to Articles X:1 and X:3(a), which state in relevant part:
1. Laws, regulations, judicial decisions and administrative rulings of general
application, made effective by any contracting party, pertaining to the classification or
the valuation of products for customs purposes, or to rates of duty, taxes or other charges,
or to requirements, restrictions or prohibitions on imports or exports or on the transfer of
payments therefor, or affecting their sale, distribution, transportation, insurance,
warehousing, inspection, exhibition, processi ng, mixing or other use, shall be published
promptly in such a manner as to enable governments and traders to become acquainted
with them.

356 See id. at 309. The 1923 Convention is printed in 30 League of Nations Treaty Series, No. 775,
p. 378 (Ex. ROK-74).
357 US DOC of State, Standard Draft Treaty of Friendship, Commerce and Navigation (Charles H.
Sullivan ed., 1970) (relevant excerpts Ex. ROK-75).
358 Id. at p. 247 (emphasis added by Korea).
359 United States – Restrictions on Imports of Cotton and Man-made Fibre Underwear
(10 February 1997), WT/DS24/AB/R, section VI, pp. 21-22 (emphasis added by Korea).

3. (a) Each contracting party shall administer in a uniform , impartial and
reasonable manner all its laws, regulations, decisions and rulings of the kind described in
paragraph 1 of this Article. (Emphasis added by Korea.)
Government measures must be published in such a manner as to enable governments and traders to
become acquainted with them (Article X:1), and they must be administered in a uniform, impartial
and reasonable manner (Article X:3(a)).
4.461 In Response to a question from the Panel,360 Korea further argued:
The WTO Agreements are a unitary whole. The transparency and uniformity obligations of Article X
apply to the WTO Agreements, including the AD Agreement. When a Member promulgates a law or
regulation or issues an administrative ruling of general application, it must comply with Article X:1.
Also, the Member must administer each statute, regulation and administrative ruling in a way that
complies with Article X:3. Thus, Article X applies to each and every action the Department takes in a
revocation proceeding. Any other interpretation would allow a Member to completely avoid the
dictates of Article X (and, thereby, the substantive obligations of the AD Agreement).
(b) Response by the United States
4.462 The United States responds to Korea's submission with the following arguments:
4.463 Article X:1 provides, in part:
Laws, regulations, judicial decisions and administrative rulings of general application,
made effective by any contracting party, pertaining to . . . rates of duty, taxes or other
charges, or to requirements, restrictions or prohibitions on imports . . . shall be published
promptly in such a manner as to enable go vernments and traders to become acquainted
with them.
4.464 Throughout its submissions, the United States has established that section 751 of the Act and
section 353.25(a)(2) of the DOC’s regulations govern a decision by the DOC to revoke an anti-
dumping duty order. Section 353.25 (a)(2) of the regulations sets forth the criteria which the DOC
will consider in evaluating whether revocation is appropriate. Moreover, the DOC’s regulations
require that the final results of all administrative reviews be published, including decisions on
revocation.
361 Thus, the United States has complied with its obligations under Article X:1 by
promptly publishing all relevant laws, regulations, and administrative decisions in a manner that
enables governments and traders to become acquainted with them.
4.465 Considering the undisputed fact that the United States promptly published these statutory and
regulatory provisions, the United States has satisfied all the requirements of Article X:1. As the plain
language suggests, Article X:1 simply requires Members to publish certain laws and regulations of
general application. This provision does not concern itself with the content or substantive elements of
a Member’s legislation. Indeed, Korea agrees by stating that Article X is unlike most provisions of
the WTO agreements, “which are concerned with the content of a government’s laws, regulations,
decisions and rulings,” because Article X relates to the administration of those laws, regulations,
decisions and rulings. Nevertheless, Korea’s arguments focus solely on the substantive elements of
the US anti-dumping law and regulations.

360 The panel recalls that the question was: "How would Korea describe the relationship, if any, in
legal terms between Article X of GATT 94 and the AD Agreement?"
361. See 19 C.F.R. §§ 353.22(c)(8) and 353.25(c)(2)(v)(vi) (1997) (Ex. USA-24).

4.466 Aside from publication, Korea believes that the relevant issue under Article X:1 is “whether
the criteria on which [the DOC’s] decision was based were objective . . .” No possible interpretation
of the plain language of Article X:1 could contemplate a requirement such as the one Korea advocates
before this Panel. Article X:1 does not require “objective criteria” to be set forth in the DOC’s
regulations. This argument goes to the content of the US laws and regulations which Korea
acknowledges to be irrelevant in the context of an Article X:1 argument. Were this not the case, then
probably all anti-dumping legislation of every WTO Member with such legislation, including Korea,
would be in violation of Article X:1.
4.467 The United States has consistently noted, that Korea, as the complaining party, bears the
burden of proving that the DOC’s application of its anti-dumping law and regulations to the Final
Results Third Review violated Article X. Specifically, under paragraph 1 of Article X, Korea must
establish that the United States failed to publish rules and requirements which establish or revise
principles applicable in future cases. Moreover, under paragraph 3 of Article X, Korea bears the
burden of establishing that the DOC failed to administer its laws and regulations in a uniform,
impartial, and reasonable manner. Korea’s mere assertions - unsupported by proof - do not sustain
Korea’s burden to establish an Article X violation. Therefore, the United States submits that the
Panel must reject these claims.
4.468 Korea recognizes that Article X embodies the fundamental principles of transparency and
(what is widely known as) “due process.” These principles do not concern themselves with the
consistency of a Member’s laws, regulations, decisions and rulings with the substantive provisions of
the WTO agreements, including the AD Agreement.
362 Rather, Article X relates to the administration
of a Member’s laws, regulations, decisions, and rulings.363
4.469 In discussing the policy underlying the obligations contained in Article X, the Appellate Body
has stated:
The essential implication is that Members and other persons affected, or likely to be
affected, by governmental measures imposing restraints, requirements and other burdens,
should have a reasonable opportunity to acquire authentic information about such
measures and accordingly to protect and adjust their activities or alternatively to seek
modification of such measures.364
4.470 Korea has not sustained its burden to establish that the Korean Respondents in the Final
Results Third Review did not have a “reasonable opportunity to acquire authentic information”
regarding the administration of the US anti-dumping law and regulations. Moreover, Korea’s
arguments do not relate to the “administration” of the US measures but, rather, the consistency of
such measures with other GATT 1994 or AD Agreement provisions.
365 As such, Korea’s argument
that the United States has violated Article X should be rejected.

362 See European Communities - Regime for the Impor tation, Sale and Distribution of Bananas ,
WT/DS27/AB/R, Report of the Appellate Body adopted 9 September 1997, at para. 200.
363 Id.
364 United States - Restrictions on Imports of Cotton and Man-made Fibre Underwear ,
WT/DS24/AB/R, Report of the Appellate Body adopted 10 February 1997, at 21-22 (emphasis added by the
United States).
365 For example, Korea’s argument that the “not likely” criterion in section 353.25(a)(2) does not
contain objective criteria is one of Korea’s central arguments under both Article 11 of the AD Agreement and
Article X:1 of GATT 1994. In addition, the argument that the United States failed to provide the same
advantage to Korea that was provided to Japan is the basis for Korea’s arguments under GATT 1994 Article I,
as well as Article X:3(a). The notion that Article X imposes duplicative obligations on WTO Members is
untenable, and is inconsistent with the Appellate Body’s interpretation of Article X.

2. Failure to Publish Objective and Specific Factors Regarding the “No Likelihood/Not
Likely” Criterion
(a) Claim raised by Korea
4.471 Korea claims that the United States failed to publish objective and specific factors regarding
the “no likelihood/not likely” criterion promptly and in such a manner as to enable Korea and Korean
companies to become acquainted with them, thus violating Article X:1 of GATT 1994. Korea makes
the following arguments in support of this claim:
4.472 The standard governing the objective criteria and methodology which the United States will
use in determining whether (and when) to revoke an anti-dumping duty order clearly is (a) a
government measure of general application
366 that (b) pertains to (i) rates of customs duty or (ii)
requirements on imports. Accordingly, the application of that standard in the proceeding involved in
this dispute is subject to the transparency and due process requirements of GATT Article X.
4.473 US law does not set out the objective criteria and methodology for determining entitlement to
revocation. The applicable provision (section 751(d )(1) of the Tariff Act of 1930, as amended, 19
U.S.C. § 1675(d)(1)) merely states that “[t]he administering authority may revoke, in whole or in part,
. . . an anti-dumping duty order . . . after review under . . . this section.” There are no objective
criteria or methodology, merely authorization of unbounded discretion.367
4.474 The US regulation also does not set out the objective criteria and methodology for
determining entitlement to revocation. The applicable provision provides no guidance in this regard:
(2) The Secretary may revoke an order in part if the
Secretary concludes that:
(i) One or more producers or resellers covered by the
order have sold the merchandise at not less than foreign market value
for a period of at least three consecutive years;
(ii) It is “not likely” that those persons will in the future
sell the merchandise at less than foreign market value; and
(iii) For producers or resellers that the Secretary
previously has determined to have sold the merchandise at less than
foreign market value, the producers or resellers agree in writing to
their immediate reinstatement in the order, as long as any producer or
reseller is subject to the order, if the Secretary concludes under
§353.22(f) that the producer or reseller, subsequent to the revocation,
sold the merchandise at less than foreign market value.
368
Governments and traders are advised that the Secretary has the authority to revoke (but is not required
to revoke) if he concludes that “[i]t is not likely that those persons will in the future sell the
merchandise at less than foreign market value.” However, they are not advised of the meaning of “not
likely” or how it will be applied, and, by virtue of the verb “may” at the start of the regulation, they
are reminded that the US authorities have unbounded discretion to decide not to revoke an anti-
dumping duty order.

366 The recently released Panel Report in Japan-Measures Affecting Consumer Photographic Film and
Paper clarifies that Article X:1 extends to administrative rulings in individual cases that establish or revise
principles or criteria applicable in future cases. WT/DS44/R, para. 10.388 (31 March 1998).
367 See Toshiba, 15 C.I.T. at 598-600 (Ex. ROK-5).
368 19 C.F.R. § 353.25(a)(2) (1996).

4.475 US judicial decisions permit this and, thus, are also unenlightening on that point. For
example, in Toshiba, the CIT declared:
Section 751(c) [now 751(d)(1)] of the Tariff Act of 1930 commits the
decision to revoke an anti-dumping order to the unfettered discretion
of the DOC of Commerce . . ..

The language of the regulations indicates that the Secretary is not
compelled to grant revocation even when plaintiffs satisfy the
requirements for revocation.

The regulation does not present an objective criterion for
determining whether there is “no likelihood” of resumption of LTFV
[less than fair value ( i.e., less than normal value)] sales. Instead, the
petitioner must establish this fact to the satisfaction of the
Secretary.
369
4.476 Finally, no objective criteria and methodology for determining entitlement to revocation are
set out in US administrative rulings of general application. In the Notice of Final Results in this case
the DOC mentioned “the predictive nature of the revocation proceeding.”370 The US CIT has asserted
that ordinarily past behaviour constitutes substantial evidence of expected future behaviour. 371 In the
Final Results in this case, the DOC agrees that normally three years of no dumping margins plus
certification of agreement to reinstatement of the anti-dumping order are all that is required for a
decision to revoke.372 When is satisfaction of these criteria not sufficient in the DOC’s eyes? “When
additional evidence is on the record . . ..” 373 In other words, the DOC adds a third, vague and
undefined requirement for revocation whenever it believes that it should do so. This is not an
objective criterion. It is the exercise of unfettered discretion.
4.477 In this way, there is no publication in such a manner as to enable governments and traders to
become acquainted with the situations in which the US authorities will choose to add a third
requirement to secure revocation. Likewise, there is no such publication of what substantive criteria
will be applied in those cases in which the DOC chooses to examine this additional requirement.
What does the DOC look at? “[A]ll relevant economic factors and other information on the record in
a particular case.”
374 The DOC continues by noting that “depending upon the facts of a case, we
consider ‘such factors as . . .’”375; a list of factors follows.
4.478 For purposes of GATT Article X, the issue is not whether the DOC explained its decision at
length. Rather, the issue is whether the criteria on which its decision was based were objective and
were publicized in such a manner as to enable governments and traders to become acquainted with
them (i.e., to know ahead of time the criteria on which the determination would be based). They were
not.

369 Toshiba, 15 C.I.T. at 598-600 (emphasis added by Korea) (citations omitted) (Ex. ROK-5).
370 62 Fed Reg. 39809, 39812 (24 July 1997) (Ex. ROK-3).
371 Tatung Co. v. United States, 18 C.I.T. 1137, 1144, 1994 C.I.T. LEXIS 288 (Ex. ROK-76).
372 62 Fed. Reg. 39809, 39810 (24 July 1997) (Ex. ROK-3).
373 Id.
374 Id.
375 Id. (quoting Brass Sheet and Strip from Germany, 61 Fed. Reg. 49727, 49730 (23 September 1996).

4.479 First, the standard applied by the DOC in its preliminary determination not to revoke the anti-
dumping duty order was different, and stricter, than the standard set out in the US regulations. The
DOC denied revocation on the grounds that the Korean Respondents could not satisfy the DOC that
there was “no likelihood” of future dumping.376 By the final determination, the DOC recognized that
it should have applied the standard of whether it was “not likely” that the Korean companies would
dump in the future. The DOC also recognized “t he potential difference in meaning” between “no
likelihood” and “not likely.”
377 However, it sought to argue that it had not applied the erroneous “no
likelihood” standard so as to require a higher degree of certainty that dumping would not recur than
was implied by the current standard--“not likely.” The explanation rings hollow, but more significant
for purposes of GATT Article X, it is an admiss ion that neither the Korean government nor the
companies could have known the level of certainty that the DOC would require for revocation in this
case.
4.480 Second, neither the Korean government nor the companies could have known the substantive
factors that the DOC would consider appropriate. The DOC acknowledges this, albeit in a convoluted
fashion, in its notice of final results:
We also disagree with Hyundai’s assertion that the DOC erred by relying on Brass Sheet
and Strip as support for its preliminary determination not to revoke. The DOC did not
rely upon Brass Sheet and Strip as support for each of the elements addressed in the
DOC’s preliminary determination regarding the “not likely” issue. Rather, the DOC
relied upon Brass Sheet and Strip primarily to confirm the legal standard for the type of
factors the DOC has considered relevant in the past ( e.g., conditions and trends in the
industry, currency movements and the ability of the foreign entity to compete in the US
without dumping).
378
Thus, despite its repeated references to Brass Sheet and Strip ,379 the DOC admits that this supposed
source of criteria does not in fact specify the criteria that the DOC will use in its revocation decision,
and indeed it does not necessarily specify the range of factors that Commerce may use.
4.481 Thus, the DOC believes it has complete discretion to choose the criteria it wishes to consider
determinative in each specific case. The criteria the DOC uses will vary from case to case. They are
not uniform or impartial and they are neither known to nor knowable by governments and traders.
Therefore, the United States is in breach of its transparency and due process obligations under Article
X:1 and X:3(a) of the General Agreement. The United States also is in breach of the obligations of
Article 17.6(i) of the AD Agreement to evaluate facts in an unbiased and objective manner.
(b) Response by the United States
4.482 The United States responds to Korea's claim with the following arguments:
4.483 Korea complains that the “not likely” criterion included in section 353.25(a)(2) does not
advise governments and traders of the “meaning of ‘not likely’ or how it will be applied.” This
argument implies that a Member cannot satisfy its obligations under Article X:1 unless interpretive
notes and definitions accompany every provision of a Member’s trade legislation. Suggesting that the
DOC’s regulations could be consistent with Article X:1 if section 353.25(a)(2) included “the meaning
of ‘not likely’ or how it will be applied,” is merely a further attempt by Korea to address the content

376 62 Fed. Reg. 12794, 12796 (18 March 1997) (Ex. ROK-34).
377 62 Fed. Reg. 39809, 39812-13 (24 July 1997) (Ex. ROK-3).
378 Id. at 39812 (emphasis added by Korea) (Ex. ROK-3).
379 Brass Sheet and Strip from Germany, 61 Fed. Reg. 49727 (23 September 1996) (Ex. ROK-36).

of the DOC’s regulations. The drafters could not have contemplated that Article X:1 would be
considered a remedy for such an argument.380
4.484 Moreover, Korea suggests that the measure of discretion allowed for in section 751(d)(1) of
the Act is inconsistent with Article X:1. For the same reasons discussed above, this argument relates
to the content of the statute. While the DOC’s discretion may be relevant to the interpretation of the
AD Agreement and the issue of whether the United States is in compliance with the agreement, it is
irrelevant to the issue of whether the United States published its laws, regulations, and administrative
decisions in a manner consistent with Article X:1.
4.485 Korea also suggests that the DOC adds a “vague and undefined requirement for revocation
whenever it believes that it should do so.” In this regard, Korea states that “the DOC agrees that
normally three years of no dumping margins plus certification of agreement to reinstatement of the
anti-dumping order are all that is required for a decision to revoke.” Thus, Korea apparently argues
that the DOC’s failure to publish when the “not likely” criterion will be applied violates Article X:1.
4.486 Korea predicates this argument upon the false premise that the DOC normally will not
examine the “not likely” requirement in a revocation inquiry. In the Final Results Third Review , the
DOC stated:
In evaluating the “not likely” issue in numerous cases, Commerce has considered three
years of no dumping margins, plus a Respondent’s certification that it will not dump in
the future, plus its agreeing to immediate reinstatement in the order all to be indicative of
expected future behavior. In such instances, this was the only information contained in
the record regarding the likelihood issue. . . .
 In other cases, when additional evidence is on the record concerning the likelihood of
future dumping, Commerce is, of course, obligated to consider that evidence. In this
regard, in evaluating such record evidence to determine whether future dumping is not
likely, the DOC has a longstanding practice of examining all relevant economic factors
and other information on the record in a particular case.
381
4.487 To intimate that the above passage reflects a practice of “normally” not considering the “not
likely” criterion published in the DOC’s regulations belies the unambiguous language contained in the
Final Results Third Review . The DOC stated that while satisfaction of two of the three criteria
contained in the regulation may be “indicative of expected future behavior,” it would consider any
additional available evidence in conducting its inquiry. Contrary to Korea’s contention,
section 353.25(a)(2) of the DOC’s regulations does not contain a “vague and undefined requirement”
that may be applied “whenever [the DOC] believes that it should do so.” On the contrary, the level
and depth of the DOC’s analysis of the “not likely” criterion in any given case is almost entirely
dependent on the amount and type of information placed on the record by the parties, including
Respondents. Thus, the DOC’s published regulations allow governments and traders to become
acquainted with all of the criteria which the DOC will apply when determining whether revocation of
an anti-dumping order is appropriate.
4.488 While the DOC will apply the criteria contained in section 353.25(a)(2) in each revocation
inquiry, the DOC must also evaluate the facts on the administrative record in order to determine
whether these criteria have been satisfied. Interestingly, Korea offers the fact that the DOC will
examine “information on the record in a particular case” and that a determination to revoke will be

380 Of course, parties may “become acquainted” with how the DOC has applied the “not likely”
criterion by examining past revocation decisions, all of which have been published in the Federal Register in
accordance with 19 C.F.R. § 353.25(c)(2)(vi) (1997) (Ex. USA-24) and its predecessor provisions.
381 Final Results Third Review, 62 Fed. Reg. at 39810 (citations omitted)(emphasis added by the United
States) (Ex. USA 1).

“depending upon the facts of a case” as evidence of an Article X violation. However, the United
States does not violate its obligation to publish laws, regulations, and administrative rulings by
examining evidence on a case-by-case basis. The absence of more detailed or specific requirements
as they relate to the “not likely” criterion merely reflects the fact-specific, case-by-case analysis in
which the DOC engages in order to determine whether revocation is justified.382
4.489 Article 11 of the AD Agreement does not provide specific guidance to Members with regard
to determining “whether the continued imposition of the duty is necessary to offset dumping, whether
the injury would be likely to continue or recur if the duty were removed or varied, or both.” This
determination is factual in nature. Certainly, Article X does not require Members to promulgate
published rules and regulations in more detail than that which is required under the terms of the AD
Agreement.383 Because the United States published the laws, regulations, and administrative
decisions relevant to the application of the “not likely” criterion and the DOC’s revocation decisions,
the United States complied with its obligations under Article X:1.
3. Failure to Publish Objective and Specific Factors Regarding the Time-Period Used in
Analysing the “No Likelihood/Not Likely” Criterion
(a) Claim raised by Korea
4.490 Korea claims that the failure by the United States to publish objective and specific factors
regarding the time-period selected for analyzing th e "no likelihood/not likely" criterion violates the
transparency obligations of Article X:1 of the General Agreement. The following are Korea's
arguments in support of this claim:
4.491 In the determination itself the DOC states:
There is nothing in the Act, the Department’s regulations or case precedent that defines
the relevant time period in considering the likelihood issue.384
4.492 Thus, there are no objective criteria published in such a manner as to enable governments and
traders to become acquainted with them, in breach of the United States’ obligations under Article X:1
of the General Agreement.
4.493 The United States breached its obligations under Article X of the General Agreement in
regard to the period selected by the Department for purposes of analyzing whether it believed that the
"no likelihood/not likely" criterion is permissible, its purpose must be to try to predict whether the
respondent companies would sell at less than normal value in the future. Thus, one would expect that:
(i) the Department would select the period to examine in each case based on objective criteria; and (ii)
the period chosen would reasonably seek to be predictive and relevant. The period chosen by the
Department in DRAMS from Korea fails in both respects
4.494 Korea in response to a question by the Panel,
385 further argued as follows:

382 Article 17.6 of the AD Agreement, which contains the Panel’s standard of review for this case,
recognizes that each anti-dumping determination requires a case-by-case evaluation of the facts.
383 Otherwise, Members who treat international agreements as self-executing under their legal and
constitutional systems would presumably be in violation of Article X.
384 62 Fed. Reg. 39809, 39814 (24 July 1997) (Ex. ROK-3).
385 The Panel recalls that the question was: "Could Korea please explain the essence of its claim under
Article X of GATT 1994. Is Korea concerned principally with the alleged failure to publish under Article X:1,
or is the focus of Korea’s complaint directed at the alleged failure to administer laws and regulations etc. in the
'uniform, impartial and reasonable manner' required by Article X:3(a)?"

4.495 Korea has established that the failure of the DOC to publish objective and specific factors
regarding both the “no likelihood/not likely” criterion and the time period used by the DOC in
analyzing whether this criterion was met violates the transparency obligation of Article X:1 of GATT
1994. More specifically, the DOC did not publish regulations or administrative rulings of general
application “promptly and in such a manner as to enable governments and traders to become
acquainted with them.”
(b) Response by the United States
4.496 The United States responds to Korea's claim with the following arguments:
4.497 Korea argues that the United States breached its obligations under Article X:1 of GATT 1994
with regard to the period selected by the DOC for purposes of analyzing whether it believed that the
“not likely” criterion was satisfied. Korea claims that the DOC failed to publish “objective criteria”
that helps define the relevant time period in considering the likelihood issue. Article X:1 does not
concern the content of a Member’s laws, regulations, decisions, and rulings. Korea’s argument that
the DOC’s regulations do not contain additional elements is wholly irrelevant to the issue of whether
the United States published its laws and regulations of general application in accordance with Article
X:1.
4.498 Neither the AD Agreement nor Article X:1 requires Members to prescribe in their legislation
the time frame that will be applicable in all cases for purposes of determining whether dumping or
injury would occur in the future. That is because the time period most relevant to this issue will
always depend upon the nature of the evidence on the record in each case. With respect to
determining the appropriate time period in applying the “not likely” criterion in the instant case, the
DOC stated in its Final Results Third Review: “[c]ommon sense . . . dictates that the DOC should, as
always, base its determination on all record evidence.”
386 Thus, the DOC “considered all publicly
available data and information placed on the record by all parties (including data regarding the
January 1997 through April 1997 time period, which Respondents characterize as a market
upturn).”387 A determination that is based upon the record evidence does not reflect a lack of
transparency and certainly does not constitute a violation under Article X:1. Therefore, the lack of
published “objective criteria” or more specific factors relating to the time period examined when
considering the likelihood issue does not violate the United States’ obligations under Article X:1.
4.499 There is no basis for Korea's assertion that the DOC “revived the ‘gap period’ review”
without such a requirement being published.
388
4.500 First, the 1989 amendments to the DOC’s anti-dumping regulations did not affect a
substantive change in the likelihood standard. Under this provision, the DOC's long-standing practice
has been to examine all economic factors and other information on the record which bear on the issue
of future dumping.389 Korea’s attempts to keep the DOC from looking at the period immediately after
the third administrative review are contrary to this practice and without support.
4.501 Secondly, in evaluating whether future dumping is not likely, the DOC may find that market
conditions and trends during a certain period or periods are probative. Often times, the agency’s

386 Final Results Third Review, 62 Fed. Reg. at 39814 (Ex. USA-1).
387 Id.
388. Prior to the promulgation in 1989 of the regula tions which governed this proceeding, the DOC
required a finding of no dumping for a period of two years. In addition, it was the DOC’s practice to consider
whether dumping took place in the period between the end of the two-year period and the date of its tentative
determination to revoke (the “gap period”). The 1989 amendments to the regulations eliminated the need for
“gap period” reviews by adopting the current system which is based, inter alia, upon three consecutive years of
no dumping.
389 See, e.g., Steel Rope from Korea , 62 Fed. Reg. at 17173-74 (Ex. USA-52); Brass Sheet from
Germany, 61 Fed. Reg. at 49730-31 (Ex. USA-46); FCOJ from Brazil, 56 Fed. Reg. at 52511 (Ex. USA-31).

analysis will focus on the period immediately following the close of the three-year period of no
dumping because it contains the most recent data available on market conditions and prices. 390 In the
instant case, the DOC found the January through December 1996 time frame to be particularly
probative because it contained recent data that corresponded with a significant downturn in the
DRAM market. As the DOC explained in the final results of its review, the fact that this period
coincided with the end of the third review was coincidental:
We consider it merely coincidental that this time frame coincided with the end of the
third administrative review and the period immediately following. Had the most recent
downturn occurred during a different time frame, it may have been appropriate to take
that period into account in our analysis.
391
4.502 In sum, the fact that the DOC considered the likelihood issue by examining a period of time
which extended beyond the end of the third administrative review does not constitute a non-published
revival of the “gap period” reviews. The DOC’s regulations, which do not contain a predetermined
time frame in which to examine the likelihood issue, are consistent with the United States’ obligations
under Article X:1. Moreover, the DOC’s decision to examine a period of time which extended
beyond the end of the third administrative review was based solely on record evidence. Contrary to
Korea’s argument, the DOC did not effectively resurrect the “gap period review” without publication.
Therefore, the United States complied with its Article X:1 obligations by publishing all relevant
statutory and regulatory provisions which applied to its revocation decision
(c) Rebuttal arguments made by Korea to both claims under Article X:1 of GATT 1994
4.503 Korea makes the following arguments in rebuttal to the United States responses on both
Article X:1 claims regarding the failure to publish objective and specific factors regarding the “no
likelihood/not likely” criterion and failure to publish objective and specific factors regarding the time-
period used in analysing the “no likelihood/not likely” criterion:
4.504 Article X:1 of the General Agreement articulates the fundamental principle of transparency.
The procedural protectionism of unknown, unknowable government requirements is every bit as
pernicious as the substantive protectionism of discriminatory government measures. This procedural
protectionism was condemned by the Appellate Body in United States -- Cotton Underwear in the
context of Article X:2. The logic of this condemnation applies with equal force to the transparency
requirement of Article X:1. If governments and traders are not aware of the substantive requirements
that they are required to meet (or, as in this case, that they are required to prove), they will not be able
either to protect and adjust their activities or to seek modification of the hidden measures. The United
States violated the transparency obligation of Article X:1 by failing to publish objective and specific
factors regarding both the “no likelihood/not likely” criterion and the time period used by the DOC in
analyzing it. There was no US law, regulation or administrative ruling to which the Korean
Respondents could turn to become acquainted with the factors or the time period the DOC would use
in assessing whether to revoke the anti-dumping duties.
4.505 This is not, as the United States alleges, an argument addressing the substance of the US
revocation scheme. Rather it is an indictment of the uncertainty and confusion flowing from the
DOC’s failure to publish the substantive factors and criteria the DOC would apply.
4.506 The United States seeks to excuse its lack of required transparency by claiming that it
published the US revocation regulation (Section 353.25(a)(2)) and that the absence of more detailed

390 See, e.g., Steel Rope from Korea , 62 Fed. Reg. at 17173 (Ex. USA-52); Silicon Metal From Brazil;
Final Results of Anti-dumping Duty Administrative Review and Determination Not To Revoke in Part, 62 Fed.
Reg. 1970, 1973 (1997) (Ex. USA-79); Brass Sheet from Germany, 61 Fed. Reg. at 49730-31 (Ex. USA-46);
Televisions from Japan, 54 Fed. Reg. at 35519 (Ex. USA-47).
391 Final Results Third Review, 62 Fed. Reg. at 39814 (Ex. USA-1).

requirements relating to the “no likelihood/not likely” criterion and the time period to be analyzed
“merely reflects the fact-specific, case-by-case analysis in which the DOC engages.”
4.507 The fact that revocation decisions are fact-intensive (as are all decisions in anti-dumping
proceedings) does not excuse the United States from its GATT Article X:1 obligations. The US
revocation regulation does not set out the basis (or bases) on which the United States decides how it
will apply the “no likelihood/not likely” criterion or the time period it will examine in assessing
whether the criterion is satisfied. Publication in Section 353.25(a)(2) of the regulations of a criterion
denominated “not likely” is not enough. Without an articulation of objective and specific factors, the
criterion is meaningless, because it does not provide accurate information that enables those seeking
revocation to know the substantive requirements the Department will apply. Also, the lack of
articulation reinforces the Secretary's discretion and insulates a decision not to revoke from challenge.
4.508 Equally unavailing is the subsidiary US argument that Article X:1 cannot require publication
of regulations “in more detail than that which is required under the terms of the AD Agreement.” The
United States has not supported and cannot support this assertion. Within national systems, laws
provide the basic, general authority. They are implemented and specified by regulations, which, in
turn, are further specified by administrative rulings of general application.
4.509 As the United States itself has argued, the AD Agreement (and the other WTO Agreements)
set out the parameters within which national governments can legislate and regulate in conformity
with their WTO obligations. Just as regulations and rulings are often necessary to flesh out national
laws, they are essential in situations such as anti-dumping revocation determinations--they enable
governments and traders to become acquainted with how national authorities will apply and
administer the requirements mandated by the WTO Agreements.
4.510 To meet the transparency obligation of Article X:1, each national regime must amplify and
specify the basic, general authority set out in the AD Agreement. The United States has not satisfied
this obligation.
(d) Rebuttal response by the United States to both claims under Article X:1 of GATT 1994
4.511 The United States also responds to both Article X:1 claims ( i.e. failure to publish objective
and specific factors regarding the “no likelihood/not likely” criterion and failure to publish objective
and specific factors regarding the time-period used in analysing the “no likelihood/not likely”
criterion) by Korea in its rebuttal briefs putting forward the following arguments:
4.512 Korea alleges that the United States violated Article X:1 by not further defining the “not
likely” criterion with objective criteria. As demonstrated in the first US submission, an interpretation
based upon the plain language of Article X:1 does not require that each and every statutory or
regulatory provision be further defined by the inclusion of “objective criteria.” Suggesting that the
DOC’s regulations could be consistent with Article X:1 if section 353.25(a)(2) included “the meaning
of ‘not likely’ or how it will be applied” is merely a further attempt by Korea to address the content of
the DOC’s regulations. Nonetheless, the DOC, through its various decisions in which the “not likely”
criterion has been applied, has published factors which have been considered consistently in
determining whether the criterion has been satisfied.
392 Therefore, even under an impermissibly broad

392 In every proceeding under section 353.25(a) of the DOC’s regulations, the agency tends to examine
the same factors to determine whether a resumption of dumping is “not likely.” These factors are: the nature of
the product(s) at issue; trends in the domestic and home market industries; currency movements; supply and
demand conditions; price trends; and, the importance of the US market to the Respondent(s). See, e.g. , Steel
Wire Rope From the Republic of Korea; Final Results of Anti-dumping Duty Administrative Review and
Revocation in Part of Anti-dumping Duty Order , 62 Fed. Reg. 17171, 17173-74 (1997) (Ex. USA-52); Brass
Sheet and Strip From Germany; Final Results of Anti-dumping Duty Administrative Review and Determination
Not To Revoke in Part , 61 Fed. Reg. 49727, 49732 (1996) (Ex. USA-46); Television Receivers, Monochrome

interpretation of Article X:1, the United States would be found in compliance because all such
determinations applying and describing the “not likely” criterion have been published. Significantly,
Korea has not alleged that the United States has failed to publish relevant decisions or rulings.393
4.513 In addition, Korea alleges that the discretionary nature of section 353.25(a)(2), as well as the
failure to publish when the “not likely” criterion will be applied, are violations of Article X:1. These
allegations effectively concern the consistency of section 353.25(a)(2) with Article 11 of the AD
Agreement. Contrary to Korea’s suggestion, an in terpretation based on the ordinary meaning of the
language contained in Article X:1 does not require the DOC to eliminate the discretionary element of
its regulation. Moreover, the DOC need not publish when the “not likely” criterion will be applied
because, pursuant to section 353.25(a)(2), it is applied in every case in which the Secretary conducts a
review under this regulation.
4.514 In sum, the United States, consistent with its obligations under Article X:1, published all
laws, regulations, judicial decisions and administrative rulings of general application in a manner
which enabled the Respondents and Korea to become acquainted with them. For these reasons, the
Panel should reject Korea’s claim that the DOC’s regulatory regime governing the revocation of
anti-dumping duties violates Article X:1.
4. Imposition of a New Unpublished Requirement in Contravention to Article X
Paragraphs 1 and 2 of GATT 1994
(a) Claim raised by Korea
4.515 Korea claims that in selecting the time-period used in analysing the “no likelihood/not likely”
criterion the United States imposed a new unpublished requirement in contravention to Article X:2
and Article X:2 of GATT 1994.
4.516 By applying a requirement regarding the pe riod following the Third Annual Review Period,
the DOC revived the “gap period” review. Under the DOC’s regulations in the 1980s, a Respondent
seeking revocation of an order had to establish, at a minimum, a history of no sales at less than fair
value (LTFV sales) for at least two years.
394
4.517 Although the regulation required a two-year period without dumping for revocation, the DOC
adopted a rule of practice requiring a Respondent seeking revocation to submit to an examination of,
at a minimum, about two years and nine months of its sales. This rule allowed the DOC to examine
the period between the end of the two-year period a nd the date of the tentative revocation (the so-
called gap period). Under the procedure at that time, the Respondent had to show that it was not
dumping during the gap period (and that there wa s no likelihood of future dumping) by presenting its
sales and cost data to the DOC for the gap period.
4.518 However, in 1986 the DOC issued proposed amendments to the anti-dumping regulations that
substantially revised revocation procedures. The changes were incorporated in the final regulations
published in the Code of Federal Regulations in 1990. 395 The new regulations expanded the required
period of no dumping from two years to three years a nd, at the same time, eliminated the requirement
for a gap period review.

and Color, From Japan; Final Results of Anti-dumping Duty Administrative Review and Determination Not To
Revoke in Part , 54 Fed. Reg. 35517, 35519 (1989) (Ex. USA-47); Frozen Concentrated Orange Juice From
Brazil; Final Results and Termination In Part Of Anti-dumping Duty Administrative Review; Revocation In Part
of Anti-dumping Duty Order, 56 Fed. Reg. 52510, 52511 (1991) (Ex. USA-31).
393 In addition, Korea has not alleged that the United States has violated the publication and explanation
requirements of Article 12 of the AD Agreement.
394 See, e.g., 19 C.F.R. 353.54(b) (1988) (Ex. ROK-77).
395 See 19 C.F.R. 353.25 (1990) (Ex. ROK-78).

4.519 In the Third Annual Review of DRAMs from Korea, the DOC effectively resurrected the gap
period review, applying it to Respondents even though it had been repealed from US law. Apart from
being absurdly unfair, this violated Paragraphs 1 and 2 of Article X of the General Agreement because
the United States applied a more burdensome requirement that was not published.
4.520 Korea in response to a question by the Panel, 396 further clarified its claim under Article X:2
as follows:
4.521 Korea established that by reviewing the time period following the period of review, the
Department was applying the so-called “gap-period review” methodology. This methodology legally
had ended with the revision of the Department’s regulations in 1986. Therefore, its application to
DRAMs from Korea in 1997 constituted the imposition of a new, unpublished requirement in
contravention of Article X:2 of the General Agreement.
(b) Rebuttal response by the United States
4.522 The United States responds to Korea's submission in its rebuttal briefs putting forward the
following arguments:
4.523 Korea apparently makes a legal claim under paragraph 2 of Article X. The United States will
not address the merits of this claim as Korea apparently did not care to discuss the obligations of
Article X:2, nor did Korea provide support for including paragraph 2 in its Article X claim. Indeed, in
discussing the policy of transparency which underlies all of Article X, Korea quotes the relevant
paragraphs of Article X, omitting paragraph 2. The Panel should, therefore, reject this “claim.”
G. CLAIMS UNDER ARTICLES I AND X:3 OF GATT 1994
1. The United States Revoked Anti-Dumping Duties in Like Cases
(a) Claim raised by Korea
4.524 Korea claims that the refusal to revoke the anti-dumping duty order in the case of DRAMs
from Korea constitutes a violation of Articles I and X:3(a) of GATT 94 because in like cases in the
past the United States has revoked the order. The following are Korea's arguments in support of this
claim:
4.525 In numerous revocation cases, the DOC has revo ked an anti-dumping duty order on the basis
of only two criteria – three years of no dumping margins and agreement by the Respondent companies
to immediate reinstatement in the anti-dumping duty order if they breached their commitment not to
dump in the future. The DOC generally does not conduct a “no likelihood/not likely” analysis of the
type conducted in the Final Determination in the Third Annual Review of DRAMs from Korea. Since
1989, the DOC has revoked on the basis of three years of no dumping and a Respondent’s
certification in the following cases:
• Certain Fresh Cut Flowers from Mexico, 63 Fed. Reg. 1428 (Preliminary) (9
January 1998);
• Large Power Transformers from Italy, 62 Fed. Reg. 3661 (24 January 1997);
• Fresh Cut Flowers from Mexico, 61 Fed. Reg. 63882 (2 December 1996);

396 The Panel recalls that the question was: "Could Korea please explain the essence of its claim under
Article X of GATT 1994. Is Korea concerned principally with the alleged failure to publish under Article X:1,
or is the focus of Korea’s complaint directed at the alleged failure to administer laws and regulations etc. in the
'uniform, impartial and reasonable manner' required by Article X:3(a)?"

• Polyethylene Terephthalate Film, Sheet, and Strip from the Republic of
Korea, 61 Fed. Reg. 58374 (14 November 1996);
• Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts
Thereof from Thailand, 61 Fed. Reg. 33711 (28 June 1996);
• Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts
Thereof from France, et al., 60 Fed. Reg. 10900 (28 February 1995);
• Titanium Sponge from Japan, 59 Fed. Reg. 9963 (2 March 1994);
• Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts
Thereof from France, Germany, Ital y, Japan, Romania, Singapore, Sweden,
Thailand, and the United Kingdom, 58 Fed. Reg. 39729 (26 July 1993);
• Dichloro Isocyanurates from Japan , 57 Fed. Reg. 55223 (24 November
1992);
• Red Raspberries from Canada, 57 Fed. Reg. 49686 (3 November 1992);
• Industrial Phosphoric Acid from Israel , 57 Fed. Reg. 10008 (23 March
1992);
• Elemental Sulphur from Canada, 57 Fed. Reg. 1452 (14 January 1992);
• Titanium Sponge from Japan, 57 Fed. Reg. 557 (7 January 1992);
• Elemental Sulphur from Canada, 56 Fed. Reg. 16068 (19 April 1991);
• Certain Fresh Cut Flowers from Colombia , 56 Fed. Reg. 50554
(7 October 1991);
• Calcium Hypochlorite from Japan , 55 Fed. Reg. 41259 (10 October 1990);
and
• Elemental Sulphur from Canada, 55 Fed. Reg. 13179 (9 April 1990).397
4.526 In the instant case (as in a small number of other cases), the DOC required satisfaction of a
third requirement, which it variously termed the “no likelihood” or the “not likely” criterion.
4.527 Assuming for the sake of argument that the “no likelihood/not likely” criterion is permissible
under the WTO rules, the United States would have tw o choices. It could conduct an analysis of this
third criterion for revocation in all cases, or in none. What it cannot do, consistent with its obligations
under Article I of the General Agreement, is what it actually has done in practice, which is to base its
decision whether to revoke on an analysis of this criterion in some but not all cases.
4.528 Article I:1 of the General Agreement provides:
With respect to customs duties and charges of any kind imposed on or in connection with
importation or exportation or imposed on the international transfer of payments for
imports or exports, and with respect to the method of levying such duties and charges,
and with respect to all rules and formalities in connection with importation and
exportation, and with respect to all matters referred to in paragraphs 2 and 4 of
Article III, any advantage, favour, privilege or immunity granted by any contracting
party to any product originating in or dest ined for any other country shall be accorded
immediately and unconditionally to the like product originating in or destined for the
territories of all other contracting parties.

397 See Ex. ROK-57 through Ex. ROK-73.

4.529 Criteria for determining whether to revoke an anti-dumping duty order are within the scope of
Article I. First, the report of the Panel in United States – Denial of Most-Favoured-Nation Treatment
as to Non-Rubber Footwear from Brazil found that:
The rules and formalities applicable to countervailing duties, including those applicable
to the revocation of countervailing duty orders, are rules and formalities imposed in
connection with importation, within the meaning of Article I:1.
398
4.530 What is true for revoking countervailing duty orders is equally true for revoking anti-dumping
duty orders. This is confirmed by a 1968 ruling of the Director-General regarding the application of
the obligations of Article I to the provisions of the then-existing Anti-Dumping Code.399 In that ruling
the Director General also declared that the provis ions of the Code constituted a “method of levying
such duties and charges,” so there is a second basis for finding that criteria for determining whether to
revoke an anti-dumping duty order are within the scope of Article I.
4.531 The application of less stringent criteria and procedures in determining whether to revoke an
anti-dumping duty order in some cases constitutes an “advantage, favour, privilege or immunity”
granted by the United States. The Brazilian Footwear case is on point in this regard as well. There,
the United States automatically revoked a countervailing duty order retroactively in certain cases,
while in others it required countries to request an injury review and did not make the revocation
retroactive to the same degree. This discriminatory treatment was found to violate Article I even
though the United States was acting under two different laws. 400 Here, on the other hand, the US
practice provides differential treatment under the very same law and regulations.
4.532 As regards the “like product” criterion of Article I, once again the Brazilian Footwear case is
instructive. The report in that proceeding states:
The Panel . . . examined whether the products to which the United States had accorded
the advantage of automatic backdating are like the products to which this advantage had
been denied. The Panel noted that the products to which the procedures under
Section 331 of the Trade Act of 1974 had actually been applied (industrial fasteners,
industrial lime, automotive glass) are not like the product to which Section 104(b) of the
Trade Agreements Act of 1979 had been applied in the case of Brazil (non-rubber
footwear). However, the Panel also noted that Brazil not only claimed that the
application of these two Acts in concrete cases was inconsistent with Article I:1 of the
General Agreement but also that the United States’ legislation itself was inconsistent
with that provision. The Panel recalled that neither Section 331 of the 1974 Act nor
Section 104(b) of the 1979 Act makes any distinctions as to the particular products to
which each applies, other than that the former applies to duty-free products originating in
the territories of contracting parties and the latter applies to dutiable products originating
in the territories of contracting parties signatories to the Subsidies Agreement. The
products to which Section 331 of the 1974 Act accords the advantage of automatic
backdating are therefore in principle the same products to which Section 104(b) of the
1979 Act denies the advantage of automatic backdating.
401

398 United States-Denial of Most-Favoured-Nation Treatment as to Non-Rubber Footwear from Brazil
(19 June 1992), BISD 39S/128, 150, para. 6.8.
399 Note by the Director-General (29 November 1968), L/3149, quoted in 1 GATT, A NALYTICAL
INDEX: GUIDE TO GATT LAW AND PRACTICE 30 (6th ed. 1995).
400 United States-Denial of Most-Favoured-Nation Treatment as to Non-Rubber Footwear from Brazil
(19 June 1992), BISD 39S/128, 150-53, paras. 6.7-6.17.
401 Id. at 151-52, para. 6.12 (emphasis added by Korea ). See also Belgian Family Allowances
(7 November 1952), BISD 1S/59, 60, para. 3, in which a violation of Article I was found regarding a law that
discriminated against any product from a country not having a particular system of family allowances.

4.533 For the same reason, it is irrelevant that none of the proceedings which were revoked without
analysis of the “no likelihood/not likely” criteri on involved DRAMs. The products as to which no
analysis was undertaken are in principle the same products as to which the analysis was conducted,
thereby satisfying the “like product” criterion.402
4.534 The finding of a violation of Article I would not be affected if the United States were to seek
to argue that its regulation lists three criteria for revocation, including the “no likelihood/not likely”
criterion, and that it was following its regulation. GATT precedent clearly condemns de facto as well
as de jure discrimination (i.e., discrimination in practice even where the law or regulation on its face
is not discriminatory). In the EC Bananas case, the Appellate Body, citing the panel decision in Beef
from Canada , declared that Article I applied to actions of a government that had the effect of
discriminating against certain imported products.403
4.535 The refusal of the United States to revoke the order also violates Article X of the General
Agreement. Because in like cases in the past the United States has revoked duties, the United States
violated Paragraph 3(a) of Article X by failing to administer its revocation regime in a “uniform,
impartial and reasonable” manner.
4.536 Accordingly, by requiring satisfaction of the “no likelihood/not likely” criterion in some
cases, while waiving analysis of it in others, the United States does not accord most-favored-nation
treatment in its determination of whether to revoke anti-dumping duty orders and it fails to administer
its law in a uniform manner. This is in violation of the United States’ obligations under Articles I and
X of the General Agreement.
(b) Response by the United States
4.537 The following are the United States' arguments in response to Korea's claim:
4.538 Korea argues that the United States violated its obligations under Article I of GATT 1994 by
not according most-favored-nation treatment in its revocation decisions. Korea bases its Article I
arguments upon its erroneous assertion that the DOC in consistently applies the “not likely” criterion
in its revocation decisions, thus according favorable treatment in cases that allegedly do not consider
this criterion. Korea’s arguments lack merit.
4.539 Despite the non-binding, non-authoritative sources relied upon by Korea to establish the
applicability of Article I to the DOC’s Final Results Third Review ,404 Korea’s substantive claims
under Article I are without merit. Korea analogizes this case to the Brazilian Footwear case. 405
However, unlike the circumstances before the panel in Brazilian Footwear, the United States applies
the same statutory and regulatory provisions with regard to the issue of revocation in every case. As
such, the same three criteria enunciated in section 353.25(a)(2) of the DOC’s regulations, including

402 Korea need not rely on the Brazilian Footwear precedent alone because the United States actually
discriminated against DRAMs from Korea versus DRAMs from another source. The DOC accepted a data
collection proposal in the Japanese DRAM case and did not apply the “not likely/no likelihood” criterion. Thus,
the administrative process employed by the DOC treated Korean DRAMs in a manner different from the way it
treated DRAMS from Japan – there was discriminatory treatment as to a “like product.”
403 European Communities–Regime for the Importation, Sale and Distribution of Bananas
(9 September 1997), WT/DS27/AB/R, pa ra. 232, citing European Economic Community–Imports of Beef from
Canada (10 March 1981), BISD 28S/92, 97-98, paras. 4.1-4.3.
404 Korea relies upon a 1968 ruling of the Director Ge neral to establish the a pplicability of Article I to
anti-dumping proceedings. However, the Appellate Body recently noted “that the 1968 Note cannot be
considered as an authoritative inte rpretation of GATT rules because it was never endorsed by a formal decision
of the C
ONTRACTING PARTIES.” European Communities - Regime for the Importation, Sale and Distribution of
Bananas, WT/DS 27/AB/R, Report of the Appellate Body adopted 9 September 1997, para. 200.
405 United States - Denial of Most-Favored-Nation Treatment as to Non-Rubber Footwear from Brazil ,
Report of the Panel adopted 19 June 1992, BISD 39S/128.

the “not likely” criterion, are applied in each case. However, as can be expected in any fact-oriented,
anti-dumping proceeding, the DOC’s final decision will be based upon the evidence on the
administrative record. As the DOC stated in the Final Results Third Review:
In evaluating the “not likely” issue in numerous cases, Commerce has considered three
years of no dumping margins, plus a Respondent’s certification that it will not dump in
the future, plus its agreeing to immediate reinstatement in the order all to be indicative of
expected future behavior. In such instances, this was the only information contained in
the record regarding the likelihood issue. . . .
In other cases, when additional evidence is on the record concerning the likelihood of
future dumping, Commerce is, of course, obligated to consider that evidence. In this
regard, in evaluating such record evidence to determine whether future dumping is not
likely, the DOC has a longstanding practice of examining all relevant economic factors
and other information on the record in a particular case.
406
4.540 Thus, the DOC recognizes that in some cases, satisfaction of two of the DOC’s criteria, in the
absence of other evidence, is relevant to the consideration of whether the “not likely” criterion has
been satisfied. When additional evidence relating to the “not likely” criterion is available, the DOC is
“obligated to consider that evidence.” Thus, the DOC’s consideration of whether each criterion is
satisfied will be based on the record evidence. Indeed, the various cases to which Korea cites reflect
this fact-oriented approach, and, contrary to Korea’s claim, indicate that th e DOC considers all three
criteria identified in section 353.25(a)(2) in the course of a revocation inquiry. While the DOC always
applies the same criteria in every revocation deci sion, the DOC must conduct a case-by-case analysis
of the evidence in the administrative record in order to determine if these criteria have been satisfied.
Such a case-by-case approach does not constitute de facto or de jure discrimination, nor does it accord
an advantage to any party.
4.541 As a result, Korea errs when it states that “[t]he DOC generally does not conduct a ‘no
likelihood/not likely’ analysis” and that the DOC requires “satisfaction of the ‘no likelihood/not
likely’ criterion in some cases, while waiving analysis of it in others ... .” Because
section 353.25(a)(2) of the DOC’s regulations governs all revocation decisions and the DOC
consistently applies this provision and the same standards to all products from all countries, the
United States has complied with its Article I obligations.
4.542 Throughout its arguments regarding Articles I and X:1, Korea interjects claims under Article
X:3(a) of GATT 1994. In many respects repeating its arguments under Articles X:1 and I, Korea
complains that the case-by-case approach taken by the Department in examining whether the “not
likely” criterion has been satisfied violates Article X:3(a). The disjointed manner in which Korea
raises these claims reflects the substantive deficiencies in its arguments.
4.543 Article X:3(a) requires each Member to “administer in a uniform, impartial and reasonable
manner all its laws, regulations, decisions and rulings.” As the United States has established
throughout this submission, the DOC refused to revoke the anti-dumping order on DRAMs from
Korea based on an unbiased and objective evaluation of the facts which led the DOC to conclude that
the “not likely” criterion had not been satisfied. The DOC’s impartial and reasonable application of
its regulations and governing statute was consistent with the United States’ obligations under
Article X:3(a). As a result, the Panel should reject Korea’s arguments.
4.544 Korea states that “[b]ecause in like cases in the past the United States has revoked duties, the
United States violated Paragraph 3(a) of Article X by failing to administer its revocation regime in a
‘uniform, impartial and reasonable’ manner.” The DOC applies the same criteria in every revocation
decision. However, as it does in all cases, the DOC considers all of the facts on the record to

406 Final Results Third Review, 62 Fed. Reg. at 39810 (citations omitted) (Ex. USA-1).

determine whether these criteria have been satisfied. A mere assertion that the United States revoked
anti-dumping orders in allegedly “like cases” is not evidence of an Article X:3(a) violation.
(c) Rebuttal arguments made by Korea
4.545 Korea makes the following arguments in rebuttal to the United States' responses:
4.546 Article I:1 of the General Agreement requires that: “any advantage, favour, privilege or
immunity”; with respect, inter alia , to rules and formalities imposed on or in connection with
importation or the method of levying customs duties and charges imposed on or in connection with
importation; granted by a WTO Member to any product originating in any other country; shall be
accorded immediately and unconditionally to the like product originating in all other WTO Member
countries.
4.547 The United States does not challenge (presumably because it recognizes that it cannot do so)
the facts that:
1. in most cases, the DOC’s finding that the “no likelihood/not likely” criterion
is satisfied automatically where there have been three consecutive
determinations of no or de minimis dumping margins and the certification of
no future dumping by Respondent companies constitutes an “advantage,
favour, privilege or immunity”;
2. the DOC’s revocation criteria constitute both: (a) a rule or formality imposed
in connection with importation; and (b) a method of levying customs duties
and charges;407
3. the DOC has not conducted a substantive analysis of the “no likelihood/not
likely” criterion in most cases, but rather has automatically concluded that
this criterion was satisfied where there have been three consecutive
determinations of no or de minimis dumping margins and certification of no
future dumping by Respondent companies; and
4. the DOC conditioned revocation in DRAMs from Korea on proof by the
Respondent companies of satisfaction of the “no likelihood/not likely”
criterion.
4.548 The United States’ only response is that “the United States applies the same statutory and
regulatory provisions with regard to the issue of revocation in every case” and that “each anti-
dumping proceeding is unique and the DOC must base each decision on the facts before it.”
408

407 Korea does not rely upon “non-binding, non-authoritative sources . . . to establish the applicability
of Article I,” as alleged by the United States in paragraph 163 and note 285 of its First Submission. As readily
apparent even when one just scans paragraphs 4.84 through 4.88 of Korea’s First Submission, Korea establishes
the applicability of Article I through determinations and declarations in the adopted panel reports on
United States -- Denial of Most-Favored-Nation Treatment as to Non-Rubber Footwear from Brazil
(19 June 1992), BISD 39S/128; Belgium Family Allowances (7 November 1952), BISD 1S/59; European
Communities -- Regime for the Importati on, Sale and Distribution of Bananas (25 September 1997),
WT/DS27/R; and European Economic Community -- Imports of Beef from Canada (10 March 1981), BISD
28S/92. The 1968 ruling of the Direct or-General was cited as secondary support for the proposition that criteria
for determining whether to revoke are “rules and formalities” and “a method of levying such duties and
charges.” Korea believes the reasoning of the Director -General in the 1968 ruling will provide useful guidance
to the Panel, as the Appellate Body found with respect to unadopted panel reports in Japan -- Taxes on
Alcoholic Beverages (1 November 1996), WT/DS8/AB/R, page 15.

4.549 First, the facts that the same US regulation (section 353.25(a)(2)) ostensibly controls in all
determinations regarding whether to revoke and that this regulation lists three criteria, including the
“no likelihood/not likely” criterion, are not dispositive. The Appellate Body in the EC Bananas case,
citing with approval the panel decision in Beef from Canada , declared that Article I of the General
Agreement condemns government actions that have the effect of discriminating against certain
imported products.
4.550 That is exactly what happened here. The United States may not have engaged in de jure
discrimination against Korean DRAMs, because the DOC uses Section 353.25(a)(2) in making its
determination of whether to revoke in all cases. The shifting of the standard--not its literal text--is
what is at issue here. Conditioning revocation for the Korean Respondents upon proof of the “no
likelihood/not likely” criterion, while automatically concluding in other cases that this criterion was
satisfied where there had been three consecutive determinations of no or de minimis dumping margins
and certification of no future dumping by Respondent companies, constitutes de facto discrimination.
The application of less stringent criteria and procedures in these cases constitutes an “advantage” that
was not afforded in the DRAMs from Korea case. To be consistent with its obligations under Article I
of the General Agreement, the United States should have substantively analyzed the “no
likelihood/not likely” criterion in all cases, or in none. Arbitrarily conducting a substantive analysis
in DRAMs from Korea, while not doing so in other cases, is a de facto violation of the most-favoured-
nation principle.
4.551 Second, the United States’ assertion that in all cases the DOC bases its revocation decision on
the facts on the record is false. The reality is that in the vast majority of cases the DOC automatically
presumes satisfaction of the “no likelihood/not likely” criterion when the two primary criteria (no
dumping for three reviews and agreement to reinstatement) are satisfied. The only instance in which
it does not do so is where the US petitioner chooses to allege that the “no likelihood/not likely”
criterion is not satisfied. In these instances, th e DOC does not require the US petitioner to prove its
allegations; rather, it requires the Respondent companies to prove to the satisfaction of the Secretary
(whose decision is not based on any objective criteria) that there is “no likelihood” that dumping will
resume (or that the resumption of dumping is “not likely”).
4.552 The United States explicitly admits this where it declares that, except where the US
petitioner
409 raises concerns, there is “a de facto presumption that if a Respondent has not dumped
within the prior three-year period, it is not likely to resume dumping in the future.”
4.553 Thus, the US assertion that different outcomes in its revocation cases are based on different
facts boils down to an admission that different outcomes are based on the application of a different
standard when the US petitioner so demands. The Panel should reject this attempt by the
United States to shield itself from Article I' s requirement of non-discriminatory application of
revocation determinations.
(d) Rebuttal response by the United States
4.554 The following are the United States' rebuttal arguments in response to Korea's claim:
4.555 Korea argues that the United States has violated its obligations under Article I of GATT 1994
by not according most-favored-nation treatment in its revocation decisions. Korea bases its Article I
arguments upon its erroneous assertion that the DOC in consistently applies the “not likely” criterion

408 The Panel notes that this argument by the United States is presented in Paragraph 4.563 of this
report.
409 While the United States refers to “the parties” ra ising concerns, no one reasonably can argue that a
Respondent company would claim it was likely to dump in the future. Only a US petitioner would ever make
such an allegation.

in its revocation decisions, thus according favorable treatment in those cases that do not consider this
criterion. Korea’s arguments lack merit and should be rejected by the Panel.
4.556 The United States has established that it applies the same statutory and regulatory provisions
with regard to the issue of revocation in every case. As such, the same three criteria set forth in
section 353.25(a)(2) of the DOC’s regulations, including the “not likely” criterion, are applied in each
case subject to the regulation. While the three criteria in section 353.25(a)(2) are independently
applied in every case, satisfaction of two of the DOC’s criteria is relevant to the consideration of
whether the “not likely” criterion has been satisfied. When additional evidence relating to the “not
likely” criterion is available, the DOC reviews that evidence. Thus, the evidence on the record, not
the DOC’s whim, will dictate whether the three criteria contained in section 353.25(a)(2) are satisfied.
This approach does not constitute de facto or de jure discrimination, nor does it accord an advantage
to any party. As such, the United States has complied with its obligations under Article I.
2. Korea Submitted an Effective Data Collection Proposal
(a) Claim raised by Korea
4.557 Korea claims that the refusal of the United States to give Korea the opportunity to negotiate a
Data Collection Proposal despite doing so in like cases in the past constitutes a violation of Articles I
and X:3 of GATT 1994. The following are Korea's arguments in support of that claim:
4.558 As part of their express, binding commitment not to sell at less than fair value (normal value)
in the future, the Korean Respondents agreed to participate in a data collection program (DCP) that
the Government of Korea had proposed to the United States. This agreement is noted in the DOC’s
Notice of Determination Not to Revoke.
410 The DOC rejected the proposed agreement, based on
Micron’s repeated opposition to it. 411 In the Final Determination, the DOC noted that the DCP
originally was proposed prior to the deadline for submitting new information, but then seems to say
that the proposal came too late to be considered. 412 Also, the DOC stated that the proposal was
“precatory in nature”; presumably, this means that the program was not currently in place.413 (It could
not be, because the United States refused to negotiate it) This part of the Final Determination, in
particular, demonstrates the flaws of the DOC’s “analysis”
4.559 In a prior anti-dumping proceeding involving semiconductors from Japan, the United States
terminated its suspension agreement on 256k a nd above DRAMs from Japan in return for an
agreement similar to that offered by both the Government of Korea and Respondents--an agreement to
ensure that there would be no further dumping of the products.
4.560 In this way the United States provided an advantage to Japan with respect to its
semiconductor imports concerning a rule or formality applicable to anti-dumping duties (or a method
of levying such duties) that it refused to provide to Korea with respect to its semiconductor imports.
The failure to grant this advantage – the opportunity to negotiate and implement a data collection
system in lieu of the imposition of anti-dumping duties – to Korea constitutes de facto discrimination
in contravention of the United States’ obligations under Article I.
4.561 The US conduct also violated Article X. Para graph 3(a) of Article X requires a Member to
administer its laws, regulations, decisions and rulings in a “uniform, impartial and reasonable
manner.” By refusing Korea’s DCP and maintaining the duties, even though in another similar case
the DOC accepted such a proposal, the DOC violated Article X.

410 62 Fed. Reg. 39809, 39810-11 (24 July 1997) (Ex. ROK-3).
411 Id. at 39811.
412 Id.
413 Id.

(b) Response by the United States
4.562 The following are the United States' arguments in response to Korea's claim:
4.563 Korea’s argument that the United States violated its obligations under Article I because the
DOC did not accept a data collection program (DCP) proposed by Korea is groundless. The only
support Korea musters for this argument is that the United States engaged in another data collection
program in another anti-dumping proceeding. Once again, Korea’s arguments do nothing more than
point to the fact that each anti-dumping proceeding is unique and the DOC must base each decision on
the facts before it. Merely noting different outcomes in two different cases is inadequate to sustain an
argument under Article I. Therefore, the United States did not violate Article I of GATT 1994 in its
Final Results Third Review.
4.564 Korea argues that the United States violated Article X:3(a) by refusing Korea’s DCP after
having accepted such a proposal in “another similar case.” For the same reasons that the United States
did not violate Article X:3(a) by revoking anti-dumping orders in allegedly “similar” cases, the
United States did not violate Article X:3(a) with regard to the rejection of Korea’s DCP proposal.
Certainly, the factual records and procedural history of each case were distinct and, thus, will lead to
different results. However, different results based on different facts does not constitute an
Article X:3(a) violation
(c) Rebuttal arguments made by Korea
4.565 Korea makes the following arguments in rebuttal to the United States' responses:
4.566 In providing the opportunity to negotiate and then accepting a DCP from Japan in 256K and
Above DRAMs from Japan, but refusing to extend as favorable treatment to Korea, the United States
failed to grant an “advantage” to Korea that it ha d granted to Japan. This failure to grant the
opportunity to negotiate and implement a DCP in lieu of the imposition of anti-dumping duties
constitutes de facto discrimination in contravention of the United States’ obligations under Article I of
the General Agreement.
(d) Rebuttal response by the United States
4.567 The following are the United States' rebuttal arguments in response to Korea's claim:
4.568 Korea’s additional argument that the United States has violated its obligations under Article I
because the DOC did not accept the DCP proposed in the instant case is equally groundless. The
paucity of support for this claim is evident in Korea’s first submission because Korea has not
provided any evidence to support a finding of disparate treatment. Most importantly, Korea has
provided no evidence concerning the facts pert aining to the earlier proceeding on DRAMs from
Japan.414 Accordingly, Korea has failed to establish a critical component of a disparate treatment
claim that the facts in the two proceedings are similar.
4.569 In its first submission Korea relies entirely on its 17 June 1997 letter containing its DCP
proposal, and on the similar suggestions from Compaq and Respondents Hyundai and LG Semicon.415
Those documents make clear that Korea proposed a data collection program modeled on the

414 Anti-dumping; Dynamic Random Access Memory Semiconductors of 256 Kilobits and Above from
Japan; Suspension of Investigation and Amendment of Preliminary Determination, 51 Fed. Reg. 28396
(7 August 1986) (hereinafter 256K DRAMs from Japan ) (Ex. USA-89).
415 Case Brief of Compaq, 18 April 1997 at 9-10 (Ex. USA-90), Letter from Doug Young Joo,
Commercial Counselor, Embassy of the Republic of Korea, 17 June 1997 (hereinafter Korea Letter of
17 June 1997) (Ex. USA-91), and Letter of Michael P. House (counsel to LG Semicon) and Lawrence R.
Walders (counsel to Hyundai), 27 June 1997 at 2-3 (Ex. USA-92).

19 December 1996 agreement between the US and Japanese semiconductor industries. 416 B y
definition, an industry-to-industry agreement does not depend on acceptance by the United States,
which is not a party to the agreement. Furthermore, Korea’s proposal did not make any reference to
the circumstances or agreements involved in the termination of the earlier anti-dumping proceeding in
256K DRAMs from Japan . The Panel should not find an Article I violation based on the assertions
offered by Korea.
4.570 In any case even if the Panel deem Korea’s bare assertions sufficient to satisfy its burden of
presenting a prima facie case of a violation of Article I, publicly available information concerning the
earlier investigation demonstrates that the circumstances of the two proceedings are fundamentally
dissimilar. The earlier anti-dumping investigation concerning 256K DRAMs from Japan was
suspended in August 1986 pursuant to a statutory suspension agreement (undertaking) concluded in
connection with the 1986 US-Japan Semiconductor Agreement. 417 As part of this agreement, the
Japanese semiconductor companies undertook to provide a range of cost and pricing data to the DOC
on a quarterly basis and to revise their prices to eliminate dumping.418
4.571 In 1991, when the 1986 agreement came up for renewal, the DRAM anti-dumping proceeding
and related price undertaking were terminated with the express support of the US semiconductor
industry.419 At the same time, the data collection procedures were extended, with the proviso that data
would be made available to the DOC only upon initiation of a new anti-dumping investigation. In
1996, the US-Japan Semiconductor Agreement was modified further. This time, the provisions
regarding data collection took the form of an industry-to-industry agreement. 420 I t w a s t h i s
formulation of the DCP which was suggested as the basis for an arrangement in the instant case. 421
4.572 This brief review of the circumstances underlying the US-Japan data collection program as it
evolved out of the 256K DRAMs from Japan investigation reveals the substantial differences between
that case and the case before this Panel. First, the 1996 US-Japan industry-to-industry data collection
agreement, which was identified as the model for Korea’s proposal, involved neither acceptance by
the United States government, which was not a party to the agreement, nor any action by the
United States involving an active anti-dumping proceeding. Second, the DOC’s 1991 termination of
the suspension agreement in the 256K DRAMs from Japan case, the central element in Korea’s
disparate treatment claim, was predicated upon receipt of the express support of the domestic

416 See Korea Letter of 17 June 1997 ("Compaq pointed out that the December 19, 1996 agreement
between the US Semiconductor Industry Association (S IA) and the Electronic Industries Association of Japan
(EIAJ) could provide an appropriate model for resolving the Korean DRAM case. We agree with that
suggestion.") (Ex. USA-91).
417 See 256K DRAMs from Japan , 51 Fed. Reg. 28396 (7 Aug. 1986) (Ex. USA-89). The US-Japan
Semiconductor Agreement also involved market-access commitments in settlement of an investigation under
section 301 of the Trade Act of 1974. Presidential Memorandum of 31 July 1986, Determination Under
Section 301 of the Trade Act of 1974, 51 Fed. Reg. 27811 (4 Aug. 1986) (Ex. USA-93).
418Id., 51 Fed. Reg. at 28398-99 (7 Aug. 1986) (Ex. USA-89). The DOC’s notice announcing the
agreement stated as follows:
Basis of the Agreement . On and after the effective date of this Agreement, each signatory
producer/exporter individually agrees to make any necessary price revisions to eliminate
completely any amount by which the foreign market value of its merchandise exceeds the United
States price of its merchandise subject to this Agreement.
 Id., 51 Fed. Reg. at 28398 (Ex. USA-89).
419 Dynamic Random Access Memory Semiconductors of 256 Kilobits and Above from Japan;
Termination of Anti-dumping Duty Investigation, 56 Fed. Reg. 37522, 37523 (7 August 1991) (Ex. USA-94).
420 See Office of the US Trade Representative, Press Release 96-65, US and Japan Reach
Semiconductor Accord, 2 August 1996 ( The heart of the new agreement is an industry-to-industry accord
which will provide a broad range of activities across industry as well as serving as a clearinghouse for the
collection and analysis of data. The new agreement retains a role for government in reviewing a wide range of
qualitative and quantitative data, including market share ) (Ex. USA-95).
421 See Korea Letter of 17 June 1997.

industry, which thereby indicated that it no longer had an interest in the continuation of the suspension
agreement. In the present case, there is an outstanding anti-dumping order, not a suspension
agreement, and, as Korea acknowledges, the domestic industry has opposed termination of the order.
4.573 The facts underlying the 256K DRAMs from Japan case demonstrate that Korea’s claim under
Article I is based on mere assertion of a violation. While the results in the two cases differed, the
treatment of Respondents and the application of the DOC’s regulations in the two cases was not such
that an advantage was provided in 256K DRAMs from Japan that was not accorded to Respondents in
the Final Results Third Review. Therefore, the Panel should reject Korea’s claims under Article I.
3. Variance of the "No Likelihood/Not Likely" Criterion and the Time-Period Selected
(a) Claim raised by Korea
4.574 Korea claims that by varying the "no likelihood/not likely" criterion and the time-period
selected for analyzing it from case to case the United States has Contravened its Obligations under
Article X:3(a) of GATT 1994. The Following are Korea's arguments in support of this claim:
4.575 Despite its repeated references to Brass Sheet and Strip,
422 the DOC admits that this supposed
source of criteria does not in fact specify the criteria that the DOC will use in its revocation decision,
and indeed it does not necessarily specify the range of factors that Commerce may use. Thus, we
come back full circle--the DOC believes it has complete discretion to choose the criteria it wishes to
consider determinative in each specific case. The criteria the DOC uses will vary from case to case.
They are not uniform or impartial. Therefore, the United States is in breach of its transparency and
due process obligations under X:3(a) of the General Agreement
4.576 Moreover, given the absence of objective criteria and the resulting unfettered discretion to
select any period it desires, the United States is not administering its law in a uniform, impartial and
reasonable manner, as required by Article X:3(a).
4.577 The period chosen by the United States illustrates the results of the administrative
arbitrariness that Article X is meant to prevent. The administrative determination at issue in this
dispute was published in the US Federal Register on 24 July 1997. At the time the determination was
drafted, actual data were available for the first half of 1997 and credible predictive data were available
for the remainder of the year. Yet, the DOC chose to base its “no likelihood/not likely” determination
on events during calendar year 1996; and it did so despite acknowledging that market conditions in
the DRAM industry had recovered in 1997.
423 The DOC then accepted and rejected data in a biased
fashion, to reach its conclusion that the “no likelihood/not likely” standard was not satisfied.
Therefore, the period chosen by the United States was neither impartial nor reasonable, and the United
States breached its obligations under Article X:3(a) of the General Agreement.
(b) Response by the United States
4.578 The United States responds to Korea's claim with the following arguments:
4.579 Korea states that the United States violated Article X:3(a) because “[t]he criteria the DOC
uses will vary from case to case.” The United States addressed this argument in the context of its
discussion of Article X:1. As the United States does not vary the criteria relevant to a revocation
decision from case to case, the United States has not violated Article X:3(a).

422 Brass Sheet and Strip from Germany, 61 Fed. Reg. 49727 (23 September 1996) (Ex. ROK-36).
423 62 Fed. Reg. 39809, 39817 (24 July 1997) (Ex. ROK-3) . Also, the DOC rejected the Flamm study
because, according to the DOC, the study was overly optim istic. But, elsewhere, the DOC itself acknowledged
that market conditions improved, thus confirming the accuracy of Dr. Flamm’s assumptions.

4.580 Korea states that “the period chosen by the United States was neither impartial nor
reasonable, and the United States breached its obligations under Article X:3(a) of the General
Agreement.” The DOC determined the relevant period in which to consider the likelihood issue on the
basis of the evidence on the record. The fact that different periods of time may be examined in
different cases is a result of the existence of different factual records. Once again, a different result
based on different facts does not constitute an Article X:3(a) violation.
4. Rejection and Acceptance of Data
(a) Claim raised by Korea
4.581 Korea claims that the United States by rejecting verified and corroborated evidence from the
Korean Respondent companies while accepting the US petitioner’s claims violated its obligations
under Article X:3(a) of GATT 1994. The following are Koreas' arguments in support of that claim:
4.582 The United States, by rejecting and accepting data in a biased fashion, also breached its
obligations under Article X:3(a) of the General Agreement. Article X:3(a) requires Members to
administer their anti-dumping laws in a uniform, impartial and reasonable manner.
4.583 In its efforts to satisfy the DOC that there was “no likelihood” of future dumping, the Korean
companies submitted large amounts of current data regarding pricing trends, inventory levels and
various other aspects of market conditions for DRA Ms. All of these data were corroborated; indeed,
the DOC verified much of it. The US petitioner, on the other hand, generally submitted speculation
and innuendo, little of which was corroborated and none of which the DOC verified. Despite this, the
DOC uniformly rejected verified and corroborated Korean data and accepted the US petitioner’s
speculative claims. For example, with respect to pricing trends in the DRAM industry, the DOC
conceded that the Korean companies had established that prices had stabilized, indeed recovered
somewhat, during 1997.
424 Yet, the DOC speculatively concluded that “a large degree of uncertainty
about the direction of the market remains.” 425 Similarly, with respect to inventory levels, the DOC
rejected the companies’ publicly announced and published plans to decrease production levels (even
while noting that “the market . . . reacted with higher prices”) and instead accepted speculative
assertions that production might increase, due to the possibility that there might be a temporary spike
in demand (which would increase prices, of course).
426 Thirdly, although acknowledging that below-
cost sales by the Korean companies were not sufficiently numerous to be disregarded in the normal
value calculations, the DOC concluded that the record “suggests that the number of below-cost sales
increased . . ..” 427 This is nothing more than a transparent effort by the DOC to substantiate its
groundless conclusion.
4.584 The pattern of bias is pervasive. The DOC wanted to conclude that continued dumping was
likely, so it discounted evidence that contradicted this belief. This is not a matter of a few isolated
incidents. The pattern is universal--claims by the US petitioner were accepted even if speculative,
while those of the Korean companies were rejected even if corroborated and verified. This violates
the US obligation under Article X:3(a) to administer its anti-dumping law in a uniform, impartial and
reasonable manner.
(b) Response by the United States
4.585 The United States responds to Korea's claim with the following arguments:

424 62 Fed. Reg. 39809, 39814 and 39817 (24 July 1997) (Ex. ROK-3).
425 Id. at 39817.
426 Id.
427 62 Fed. Reg. 39809, 39817 (24 July 1997) (Ex. ROK-3).

4.586 Korea assails the DOC’s consideration of the evidence submitted for the record as “biased”
and states that “[t]he pattern of bias is pervasive.” Korea couches these allegations in the context of
an argument under Article X:3(a). As the Final Results Third Review make vividly clear, the DOC
afforded all parties an opportunity to submit evid ence. The DOC thoroughly evaluated all of the
evidence and data submitted by the parties and provided a well-reasoned analysis of this information.
The fact that the DOC’s evaluation of this data did not produce a result that Korea favors does not
provide a basis for Korea’s claims of bias. As such, the DOC’s consideration of this data did not
violate the United States’ obligations under Article X:3(a).
(c) Rebuttal arguments made by Korea to all claims under Article X:3(a) of GATT 1994
4.587 Korea makes the following arguments in rebuttal to the United States responses on all
Article X:3(a) claims (i.e. the United States revoked anti-dumping duties in like cases, Korea
submitted an effective data collection proposal, variance of the "no likelihood/not likely" criterion and
the time-period selected rejection, and acceptance of data):
4.588 Article X:3(a) of the General Agreement requires governments to administer their laws,
regulations and administrative rulings of general application in a “uniform, impartial and reasonable
manner.” It embodies the fundamental principle of due process. If government measures are
arbitrarily applied, the resulting procedural protectionism is as damaging as would be the application
of measures that are discriminatory on their face.
4.589 Four aspects of the DOC’s actions in DRAMs from Korea violate the United States’ due
process obligation under Article X:3(a):
1. the refusal of the United States to revoke the duties despite
doing so in the past,
2. the refusal of the United States to give Korea the
opportunity to negotiate a Data Collection Proposal despite
doing so in like cases in the past;
3. varying the “no likelihood/not likely” criterion and the time
period selected for analyzing it from case to case; and
4. rejecting verified and corroborated evidence from the
Korean Respondent companies while accepting the US
petitioner’s unsubstantiated speculative claims.
4.590 As was true with regard to Article X:1, this is not, as the United States alleges, an argument
addressing the substance of the US revocation scheme. Rather, it condemns the arbitrary
administration of the law by the DOC. Korea has never argued that the Department denied rights of
participation in this proceeding. What it has established is that the United States applied different
criteria in this case than in other cases and that it accepted and evaluated data in a biased fashion.
These are the denials of due process contrary to Article X:3(a).
4.591 The US argument that its anti-dumping revocation regime is administered in conformity with
Article X:3(a) because the same regulation (Section 353.25(a)(2)) ostensibly is applied in all cases,
and that different outcomes are due to different facts is no defense. To conform to Article X:3(a), the
United States would have had to uniformly apply the standards for determining whether to revoke.
Either in its laws, regulations or administrative rulings of general application the United States would
have had to set out the specific, objective criteria on which it bases its revocation decisions. The
United States has not done so. As acknowledged repeatedly by its own courts, in the United States
there are no objective criteria governing revocation.

4.592 The United States claims that the Brass Sheet and Strip determination sets out the factors
always used by the DOC in analyzing the “no likelihood/not likely” criterion. Yet, at page 49727 of
the Final Results of the Third Review, 428 the DOC admits that the determination does not specify the
factors the DOC will use in revocation determinations and that Brass Sheet and Strip in fact did not
set out the factors used in the DRAMs from Korea decision.
4.593 In most cases the United States revokes anti-dumping duties without conducting a substantive
analysis of the “no likelihood/not likely” criterion. In only a very few cases, including DRAMs from
Korea, did the DOC substantively analyze this criterion and require Respondents to prove it to the
satisfaction of the Secretary. The United States terminated the anti-dumping proceeding on 256K and
above DRAMs from Japan in return for a data collection proposal. However, the DOC refused even
to allow Korea the opportunity to negotiate a sim ilar proposal. The DOC arbitrarily chose the time
period it examined in determining whether the “no likelihood/not likely” criterion was satisfied.
Finally, the DOC systematically rejected verified or verifiable evidence submitted by the Korean
Respondent companies while accepting the US petitioner’s unverified, speculative claims.
4.594 Each of the four actions set out above demonstrates that the DOC applied its revocation
regime in a manner that was neither uniform, impartial, nor reasonable.
4.595 Facts differ from case to case, but Article X:3(a) requires that they be analyzed in a uniform,
impartial and reasonable manner. The United States did not do so, and thereby violated its obligations
under Article X:3(a).
(d) Rebuttal response made by the United States to all claims under Article X:3(a) of GATT 1994
4.596 The United States makes the following arguments in rebuttal all Article X:3(a) claims made
by Korea 429 (i.e. the United States revoked anti-dumping duties in like cases, Korea submitted an
effective data collection proposal, variance of the "no likelihood/not likely" criterion and the time-
period selected rejection, and acceptance of data):
4.597 Korea has failed to establish a violation under Article X:3(a). Korea bears the burden of
providing evidence that the DOC, in reaching its determination in Final Results Third Review , failed
to administer its regulations in a “uniform, impartial and reasonable manner.” 430 Considering the
Appellate Body’s finding that “the mere assertion of a claim” does not amount to proof, 431 this Panel
should reject Korea’s baseless claims under Article X:3(a).
4.598 Korea asserts that “[t]he criteria the DOC uses will vary from case to case” and, thus, “[t]hey
are not uniform or impartial.” The United States has established, however, that the criteria contained
in section 353.25(a)(2) have remained substantially the same since the promulgation of this regulation
in 1980, and apply in each case where an anti-dumping order may be revoked pursuant to this
regulation. Therefore, the premise underlying Korea’s claim that the criteria are not uniform or
impartial is not grounded in fact. Because Article X:3(a) concerns itself with the administration of the
DOC’s regulations, Korea’s failure to present evidence (beyond mere assertions) that the DOC has
applied section 353.25(a)(2) in a non-uniform and biased manner. Korea’s claim fails.
4.599 Korea alleges bias by stating that “[t]he DOC wanted to conclude that continued dumping
was likely . . .” The only support offered by Korea consists of isolated instances where the DOC
concluded that evidence presented by the Korean Respondents did not support their arguments. A
proper review of the record in the underlying administrative proceeding reveals that the DOC’s

428 See Ex. ROK-36.
429 The Panel notes that this includes those Article X:3 claims made in conjunction with Article I
claims.
430 GATT 1994, Art. X:3(a).
431 Wool Shirts, WT/DS33/AB/R, at 14.

conclusions in the Final Results Third Review were based on an objective and unbiased evaluation of
the facts. While the DOC’s conclusions may have been to the detriment of the Respondents, this does
not substantiate a claim that the DOC administered its law and regulations in a biased or unreasonable
fashion.
4.600 Korea also alleges that “the period chosen by the United States [in which to consider the
likelihood issue] was neither impartial nor reasonable, and the United States breached its obligations
under Article X:3(a) of the General Agreement.” The DOC determined the relevant period in which
to consider the likelihood issue on the basis of the evidence provided by the parties to the
administrative review. The fact that different periods of time may be examined in different cases
derives from the simple fact that the evidentiary records in each case will differ. For the same
reasons, Korea’s arguments that the DOC rejected a data collection proposal (DCP) after having
accepted such a proposal in “another similar case,” and that the United States has revoked duties “in
like cases in the past,” do not establish a violation under Article X:3(a). Korea fails to demonstrate
that, despite the different results in different cases with different facts, the DOC failed to administer
its laws, regulations, decisions and rulings in a uniform, impartial and reasonable manner. Stated
differently, Korea’s claims must be rejected, because what little evidence Korea has provided does not
relate to the legal obligation imposed by Article X:3(a).
H. C
LAIMS UNDER ARTICLES 2 AND 3 OF THE AD AGREEMENT
1. The DOC’s Decision Regarding the Scope of the Proceeding
(a) Claim raised by Korea
4.601 Korea claims that the United States violated its obligations under Articles 2 and 3 of the AD
Agreement because, during the original investigation of DRAMs from Korea the DOC (i) failed to
include in the scope products that were in existence and that are like products to the investigated
products; and (ii) included products in the scope of its proceeding that did not exist at the time of the
original investigation. The following are Koreas arguments in support of this claim:
4.602 Articles 2 and 3 of the AD Agreement set forth procedures and requirements for Members to
employ and follow in determining whether a product is dumped and whether that dumping has caused
injury to a Member’s domestic industry. In order for an anti-dumping measure to be taken, a Member
must determine that a like product is being sold at a price below its normal value and that the sales
below normal value of the like product cause (or threaten) material injury to a domestic industry of
the Member.
432
4.603 The United States violated its obligations under Articles 2 and 3 of the Agreement by
including within the scope of the proceeding produc ts that were not in existence at the time of the
original investigation and therefore could not have been investigated to determine if they were
dumped and injured an industry in the United States.433 The United States also violated its obligations
under Articles 2 and 3 of the Agreement by excluding certain products that were like those considered

432 Articles 2 and 3 of the AD Agreement.
433 The scope of the anti-dumping duty order includes DRAMs of one megabit and above. See Notice
of Final Results of Anti-dumping Duty Administrative Review and Determination Not to Revoke Order in Part;
DRAMs from Korea , 62 Fed. Reg. 39809 (24 July 1997) (Ex. ROK-3). Theoretically, this scope includes
products such as 64 megabit DRAMs that were not even shipped to the United States until 1996, as well as
DRAMs with higher densities (memory capacities) that have not yet been developed.

in the investigation. The exclusion of the like products contributed to the issuance of the anti-
dumping duty order because they could have significantly altered the dumping and injury results.434
4.604 The AD Agreement does not envision manipulation of the scope of a proceeding to, on the
one hand, exclude a substantial portion of like products 435 from the original dumping and injury
analyses and, on the other hand, create a completely open-ended scope that includes future
generations of DRAMs with a memory capacity 64 ti mes, 256 times, or greater, than that of the
products originally investigated. Common sense alone dictates that a definition of like products that
defines a 64 megabit DRAM (64 times the memory capacity of a one megabit DRAM) as a like
product to the one megabit DRAM investigated in th e original investigation and defines a 256 kilobit
DRAM (a one megabit DRAM has only 4 times the memory capacity of a 256 kilobit DRAM) not a
like product is indefensible. Not only does the memory capacity difference between DRAM
generations separate DRAMs such as one mega bit and four megabit and 64 megabit DRAMs into
different like products, an examination of design and process differences further distinguishes one and
four megabit DRAMs from 64 megabit and above DRAMs. There are significant design, process and
application differences between the categories, that demonstrate that the one and four megabit
DRAMs are not like products to the 64 megabit and above DRAMs.
4.605 The open-ended nature of the product scope suggested by Micron and accepted by the DOC
embraced not only infinitely increasing memory capacities, but also infinitely advancing technologies.
The product scope of the anti-dumping duty order extends to memory devices that are so technically
advanced that they cannot reasonably be consid ered like products to the originally investigated
products--they are not merely model-year changes. This, also, violates the United States’ obligations
under Articles 2
436 and 3 of the AD Agreement.
4.606 A basic limitation faced by DRAM producers is speed. The speed of a DRAM, whether a
Fast Page Mode (FPM) DRAM, the type of DRAM investigated during the original investigation, or
an Extended Data Output (EDO) DRAM, does not match that of microprocessors. Significant, costly
delays, or “wait states,” occur when speed mismatches between the DRAM and the microprocessor
develop. FPM and EDO DRAMs are referred to as asynchronous DRAMs and, in order to decrease
wait states, each type has been subjected to advanced engineering techniques. FPM speeds have been
increased by process and photolithographic advances; minor architectural changes have increased the
speed of EDO DRAMs. However, FPM and EDO DRAMs still suffer from the mismatch speed
problem.
4.607 Synchronous DRAMs (SDRAMs), on the other hand, represent a major technological
advance in the memory market. The operation of an SDRAM is fully synchronized with an internal
system clock. This is completely different from a conventional DRAM, such as FPM and EDO
DRAMs, which lack such a clock. Also, the architecture of SDRAMs ( i.e., design topology,
operation diagram and function) is radically different from previous DRAMs. The architecture of
SDRAMs supports multiple and new functions to synchronize ( e.g., multi-bank, on-chip
programmable functions and multi-operational mode). The system clock and radical architectural
changes synchronize the function of the SDRAM with that of the microprocessor so as to provide a
data rate in line with the speed of the micropro cessor. Thus, SDRAMs are a complete reinvention of
random access memory that provide “burst” technology to deliver data faster and cheaper. In
somewhat simpler terms, SDRAMs multiply and synchronize memory access to avoid downtime for
the microprocessor and to increase data retrieval speed.

434 The DOC’s investigation did not examine sales of Korean DRAMs with densities of less than one
megabit. In previous investigation, the DOC treated 256 kilobit DRAMs as like products to one megabit
DRAMs. See DRAMs from Japan, 51 Fed. Reg. 9475 (19 March 1986) (Ex. ROK-54).
435 During the period of investigation (November 1991 – April 1992), 256 kilobit DRAMs represented
a sizable segment of DRAM shipments.
436 The Panel notes that there was an error in Korea's first submission which originally refered to
Article 1 of the AD Agreement. All further incorrect references have also been revised. See also footnote 15.

4.608 In addition, future DRAMs will have new, completely distinct architectures, such as Rambus
DRAMs, SyncLink DRAMs and DRAMs with embedded logic. The name, “DRAM,” likely will still
be used, even though the products are distinct and do not compete.
4.609 Thus, the technological advance from the FPM/EDO DRAMs to SDRAMs is not a matter of
generational or memory capacity change. The advance is so radical that including this new type of
memory in a proceeding where the original investigation was limited only to sales of FPM and EDO
DRAMs is akin to including Ferraris in an an ti-dumping proceeding regarding one-horse carts.
Articles 2 and 3 of the AD Agreement simply do not permit the open-ended application of anti-
dumping duties so as to capture products that because of technological advances are virtually
unrelated to the products originally investigated.
4.610 Therefore, the United States violated its obligations under Articles 2 and 3 of the AD
Agreement when it excluded products that were clearly like products from its investigation and at the
same time determined that there was no upper limit on the memory capacities and additional features
or functions of DRAMs considered to be like products and subject to its anti-dumping duty order.
4.611 In response to a question by the Panel,
437 Korea further argued as follows:
4.612 Korea is making two legally distinct claims. First, Korea argues that every time since the
WTO entered into force that the United States has forced the Respondents to report data for a new
product, e.g., the 64M DRAM, and has calculated a dumping margin based in part on that data, the
United States has engaged in a “post-GATT” action. These “post-GATT” actions are not, as the
United States asserts, insulated from review. They must comply with the dictates of the WTO
agreements. In this case, the United States improperly has acted to include within the scope of
administrative reviews products that did not even exist at the time of the investigation (indeed,
products made using technologies and machines that did not even exist at the time of the
investigation). This violates Articles 2 and 3 of the Anti-Dumping Agreement.
4.613 Second, Korea claims that the United States is in violation of its Anti-Dumping Agreement
obligations by continuing to apply the original product scope determination in the 1993 DRAMs from
Korea order. Although the scope determination was made in 1993, the United States has not modified
it to conform to its WTO obligations. Thus, each time the United States has published a
determination with the same scope it has violated Article 18.4 of the Anti-Dumping Agreement and
Article XVI:4 of the WTO Agreement.
4.614 The United States has argued throughout this proceeding that its Federal Register
determinations, e.g., the Final Results in Brass Sheet and Strip
438, constitute “administrative rulings of
general application” within the meaning of GATT Article X:1. (Korea concurs.) If, indeed, one can
(indeed, must) rely on the U.S. administrative rulings to ascertain U.S. law, then obviously those
rulings must comply with Article 18.4 and Article XVI:4. If this is true of the “no likelihood/not
likely” analysis in Brass Sheet and Strip, then it is true of the scope determinations in this proceeding.
(b) Response by the United States
4.615 The Panel notes that the United States raised a preliminary objection with regards to Korea's
claims under Articles 2 and 3 of the AD Agreement. In light of its preliminary objection the United

437 The Panel recalls that the question was: "Could Korea confirm that it is challenging the product
scope determination in the 1997 refusal to revoke, and not product scope determination in the original 1993
DRAMs from Korea determination? Is Korea making two legally distinct claims: (1) against the original
product scope determination in the 1993 DRAMs from Korea order, and (2) against the product scope
determination contained in the 1997 refusal to revoke? Or does Korea consider that these two claims are
essentially linked, to the extent that one claim cannot exist independently of the other?"
438 61 Fed. Reg. 49727 (23 September 1996) (Ex. ROK-36))

States did not respond directly to Korea's claim. The arguments of the Parties on this matter can be
found in Section IV.A.2 of this report.
I. CLAIMS UNDER ARTICLE 5.8 OF THE AD AGREEMENT
1. De Minimis Margin Threshold for Administrative Reviews
(a) Claim raised by Korea
4.616 Korea claims that the United States violates Article 5.8 of the AD Agreement by setting the
de minimis margin threshold for administrative reviews at a level lower than that required by that
provision. The following are Korea's arguments in support of that claim:
4.617 The WTO obliges the United States to ensure not only that its practice in administering its
anti-dumping law is in conformity with the AD Ag reement and the General Agreement, but also that
its law and regulations on their face are consistent with those obligations. This claim concerns the
latter obligation.
4.618 By setting the de minimis threshold in administrative reviews at 0.5 percent, 439 the United
States has violated its obligations under Article 5.8 of the AD Agreement, which sets the threshold at
two percent. The obligation of Article 5.8 is that:
There shall be immediate termination in cases where the authorities determine that the
margin of dumping is de minimis . . .. The margin of dumping shall be considered to be
de minimis if this margin is less than 2 percent, expressed as a percentage of the export
price. (Emphasis added by Korea.)
4.619 Nor is there any basis to the arguments, as pursued by the United States in the course of
enacting its legislation to implement the WTO agreements and its anti-dumping regulations pursuant
to that law, that the obligation imposed by Article 5.8 is limited to anti-dumping investigations and
does not extend to reviews of anti-dumping duties.
4.620 Article 5.8 uses the word “cases,” a generic word that applies to the review stage of
proceedings as well as the investigation stage. “Cases” was used in the comparable provision,
Article 5.3, of the Tokyo Round Anti-Dumping Code.
440 Although the focus of revisions to this
Article in the Uruguay Round was to make it mandatory (replacing “should” with “shall”) and to
replace “negligible” with a quantified “de minimis” threshold, the scope of applicability also was
addressed.
4.621 A review of the Uruguay Round negotiating hist ory of Article 5.8 shows that the obligation
imposed by Article 5.8 is not limited to investigations. Article 5.7 of the 6 July 1990 “Carlisle I” draft
read: “For the purpose of this Code, the margin of dumping shall be considered to be de minimis if
this margin is less than x percent ad valorem . . ..” (emphasis added by Korea).
441 This attempt to
clarify the scope of the provision was opposed by the United States, and so the express application to
all phases of an anti-dumping proceeding disappeared in the “Carlisle II” draft of 14 August 1990,
which contained two alternate bracketed versions of this provision. One said that “there should be
immediate termination of cases, at any stage of the investigation, against imports from a particular

439 The threshold for reviews is set out in Section 351.106(c) of the DOC’s anti-dumping regulations,
62 Fed. Reg. 27296, 27382-83 (May 19, 1997) (Ex. ROK-49). The current regulation is cited rather than the
regulation applicable to th e Korean DRAM proceeding b ecause this claim relates to an inconsistency of the
regulation on its face rather than as applied in the DRAM proceeding.
440 Article 5.3 of the Tokyo Round Anti-Dumping Code provided: “There should be immediate
termination in cases where the margin of dumping . . . is negligible.”
441 MTN.GNG/NG8/W/83/Add.5 (23 July 1990), p. 18.

country where the margin of dumping is less than x percent ad valorem . . .” (emphasis added by
Korea). The other version repeated the formulation of the Tokyo Round Code, substituting a
quantified threshold for “negligible”: “There should be immediate termination in cases where the
margin of dumping is less than x percent ad valorem” (emphasis added by Korea).442
4.622 By the next draft, the 6 November 1990 New Zealand I, Article 5.8 said: “There should be
immediate termination in cases where the margin of dumping is de minimis, 10/” and this footnote 10
provided: “For the purpose of this paragraph, a de minimis margin of dumping is considered to be
less than x percent, expressed as a percentage of the normal value.” 443 This formulation remained
unchanged until the “Dunkel Draft” of 20 December 1991, in which the formulation is the same as
that quoted above from Article 5.8 of the approved Ag reement (except for substitution of the last two
words – “export price” is used in the Agreement, whereas the Dunkel Draft referred to “normal
value”).444
4.623 Thus, the effort by the United States to expressly limit the scope of Article 5.8 to
investigations was unsuccessful. The same generic formulation used in the Tokyo Round Code (“in
cases”) was maintained.
4.624 The application of the de minimis threshold to reviews as well as to investigations also is
supported by a review of related Uruguay Round AD Agreement provisions. According to Article
9.2, anti-dumping duties, when imposed, shall be collected “in the appropriate amounts in each case.”
That amount, as per Article 9.3, shall not exceed the margin of dumping established under Article 2.
The margin of dumping calculation rules of Article 2 apply to both investigations and reviews. This
tracing of the rules applicable to the assessment of anti-dumping duties to be collected discloses no
logical reason why the de minimis level during the review stage of a proceeding should be different
than at the investigation stage. That which is the legal equivalent of a zero margin for purposes of
determining whether to impose an anti-dumping duty is also the legal equivalent of zero for collecting
anti-dumping duties.445
4.625 Finally, this analysis is confirmed by the DOC’s own regulations, which, by definition, treat
investigations and annual reviews as parts of the same proceeding. Section 353.2(q) defines
“Proceeding” as follows:
A “proceeding” begins on the date of the filing of a petition or publication of a notice of
initiation under §353.11, and ends on the date of publication of the earliest notice of
(1) dismissal of petition, (2) recission of initiation, (3) termination of investigation, (4) a
negative determination that has the effect of terminating the proceeding, (5) revocation of
an order, or (6) termination of a suspended investigation.
446
In that investigations and annual reviews are part of the same proceeding, they should be subject to
the same de minimis threshold.
4.626 The proscription of Article 11.1 is that an anti-dumping duty shall remain in force only as
long as and to the extent necessary “to counteract dumping which is causing injury.” Under
Article 5.8, a calculated margin of dumping of less than two percent is not “dumping.” Therefore, the

442 Unpublished working document, reprinted in Inside US Trade (21 August 1990) (Ex. ROK-80).
443 Unpublished working document, reprinted in Inside US Trade (9 November 1990) (Ex. ROK-81).
444 Reprinted in 3 T HE GATT U RUGUAY R OUND: A N EGOTIATING H ISTORY (1986-1992) 457
(TERENCE P. STEWART, ed., 1993) (Ex. ROK-82).
445 The United States appears to be the only WTO Member that provides a separate, lower de minimis
threshold for reviews. The EU and Japan, in contrast, expressly apply the AD Agreement’s two percent
de minimis threshold to both investigations and reviews. See, respectively, G/ADP/N/1/EEC/2/Suppl.1 (1 April
1997), clause 17 and Articles 11(5) and 9(3); G/ADP/Q1/JPN/4 (12 August 1996), para. 4.
446 19 C.F.R. § 353.2(q) (1996) (emphases added by Korea) (Ex. ROK-83).

United States is in breach of its WTO obligations by maintaining a de minimis threshold of
0.5 percent for administrative reviews.
4.627 At the first meeting of the Panel, Korea made the following additional arguments:
4.628 By setting the de minimis threshold in administrative reviews at 0.5 percent, the United States
has violated its obligations under Article 5.8 of the Anti-Dumping Agreement, which sets the
threshold at two percent. The obligation of Article 5.8 applies to “cases,” including reviews as well as
investigations.
4.629 The United States has argued, as it did in the course of enacting its legislation to implement
the WTO agreements and its anti-dumping regulations pursuant to that law, that the obligation
imposed by Article 5.8 is limited to anti-dumping investigations and does not extend to reviews of
anti-dumping duties. This is incorrect.
4.630 Article 5.8 uses the word “cases,” a generic word that applies to the review stage as well as
the investigation stage of proceedings. The extensive review of the Uruguay Round negotiating
history of Article 5.8 contained in our written su bmission shows that the obligation of Article 5.8 is
not limited to investigations and that the effort by the United States during the negotiations to
expressly limit the scope of Article 5.8 to investigations was unsuccessful. The same generic
formulation used in the Tokyo Round Code (“in cases”) was maintained.
4.631 This analysis is confirmed by an analysis of the provisions both of the Uruguay Round and of
the DOC’s own regulations, which, by definition, treat investigations and annual reviews as parts of
the same proceeding. In that an investigation and all subsequent reviews are parts of the same “case”
or “proceeding,” they are subject to the same de minimis threshold.
(b) Response by the United States
4.632 The United States responds to Korea's claim with the following arguments:
4.633 Consistent with the framework set forth in the AD Agreement, anti-dumping proceedings in
the United States consist of two phases: (1) an initial phase consisting of an investigation; and (2) if
an investigation results in the imposition of an order (definitive duties), an assessment and review
phase. In an investigation, the DOC applies a de minimis standard of 2 percent ad valorem.
447 In the
assessment and review phase, the DOC applies a de minimis standard of 0.5 percent ad valorem.448
4.634 Under Article 5.8, Members must apply a 2 percent de minimis standard in anti-dumping
investigations. Korea claims that because the DOC does not apply a de minimis standard of 2 percent
for purposes of assessments and reviews, the United States is in violation of Article 5.8. 449 Korea’s
claim is unfounded, however, because Article 5.8 appl ies only to initial anti-dumping investigations.
Article 5.8 does not apply to assessments and reviews.
4.635 By way of background, the AD Agreement distinguishes between the investigatory phase and
the assessment and review phase of an anti-dumping proceeding. Article 5 deals with investigations,
while Article 9 deals with assessments and Article 11 deals with reviews. This structure is reflected
in other provisions of the AD Agreement. For example, Articles 12.1 and 12.2 set forth obligations
concerning the contents of public notices issued during an investigation, while Article 12.3 sets forth

447 19 U.S.C. § 1673b(b)(3) (Ex. USA-19); New AD Regulations , 62 Fed. Reg. at 27382-83
(sec. 351.106(b)(1)) (Ex. USA-80).
448 New AD Regulations at § 351.106(c)(1).
449 Although Korea’s request for the establishment of a panel fails to specify the particular provision of
US law alleged to be in violation of Article 5.8, in its first submission, Korea refers to 19 C.F.R. § 351.106(c)
(1998).

comparable obligations with respect to reviews. Likewise, Article 18.3, which is a transition rule,
distinguishes between “investigations” and “reviews of existing measures.”
4.636 In Desiccated Coconut , the Appellate Body recognized this distinction between an initial
investigation and the post-investigation phase, noting that the imposition of “definitive” duties (an
“order” in US terminology) ends the investigative phase. 450 Although Desiccated Coconut was a
dispute over countervailing duties, given the similarities between the SCM Agreement and the AD
Agreement, the following statement of the Appellate Body is particularly apt:
we see a decision to impose a definitive countervailing duty as the culminating act of a
domestic legal process which starts with the filing of an application by the domestic
industry, includes the initiation and conduct of an investigation by an investigating
authority, and normally leads to a preliminary and a final determination. A positive final
determination that subsidized imports are causing injury to a domestic industry
authorizes the domestic authorities to impose a definitive countervailing duty on
subsidized imports.
451
4.637 Article 5 is entitled “Initiation and Subsequent Investigation.” There is nothing in the text of
Article 5 that suggests that the provisions of that article, including Article 5.8, apply to anything other
than the investigation phase of an anti-dumping proceeding. Indeed, the first sentence of Article 5.8
makes it clear that Article 5.8, like Article 5 in general, deals only with the investigation phase.452
4.638 Korea’s only textual argument is that the word “cases” in the second sentence of Article 5.8
refers “to the review stage of proceedings as well as the investigation stage.” In other words,
according to Korea, the word “cases,” appearing in an article that, by its terms, deals only with
“investigations,” means “investigations and reviews.”
4.639 Korea must violate basic principles of treaty interpretation in order to reach this result.
According to Article 31(1) of the Vienna Convention, “[a] treaty shall be interpreted in good faith in
accordance with the ordinary meaning to be given to th e terms of the treaty in their context and in the
light of its object and purpose.” The first sentence of Article 5.8 also uses the word “case,” and in that
sentence it is very clear that “case” means “investigation.” Moreover, the ordinary meaning of the
term “case” is: “[a]n instance of the existence or occurrence of something.”
453 The United States
previously has established that the context of Article 5.8 is “investigations.” Putting the ordinary
meaning of “cases” and the context together, it is clear that the second sentence of Article 5.8 was
intended to refer to investigations where there was the existence or occurrence of a de minimis
dumping margin.

450 WT/DS/22/AB/R, p. 11.
451 Id. A similar distinction was recognized under the 1979 AD Agreement. See EC - Imposition of
Anti-Dumping Duties on Imports of Cotton Yarn from Brazil , ADP/137, Report of the Panel adopted
30 October 1995, para. 585, in which the panel stated:
Those adjustments or allowances mentioned by Brazil were only relevant to the stage of
investigation of dumping or injury, whereas the “constructive remedies” in the context of
Article 13 only applied once an investigation was completed. Accordingly, such adjustments or
allowances would not be “constructive remedies provided for by this Code”. Equally, a
determination of negligible margins of dumping or low volume of market share, was required,
pursuant to Article 5:3, to be made at a stage of the investigation process prior to the time at which
parties were obliged to consider the possibility of constructive remedies; consequently, they should
not be considered as “constructive remedies provided for by this Code” either.
452 The first sentence of Article 5.8 provides as follows: “[a]n application under paragraph 1 shall be
rejected and an investigation shall be terminated promptly as soon as the authorities concerned are satisfied that
there is not sufficient evidence of either dumping or of injury to justify proceeding with the case.”
453 Webster’s II New Riverside University Dictionary, 234 (1984).

4.640 Korea cites the fact that the EU and Japan apply a 2 percent de minimis standard to both
investigations and reviews. This reference is legally irrelevant. While Article 31(3)(b) of the Vienna
Convention permits a consideration of “any subsequent practice in the application of the treaty which
establishes the agreement of the parties regarding its interpretation,” unilateral policy decisions made
by only two signatories to the AD Agreement for purposes of their domestic legislation do not
constitute “subsequent practice” within the meaning of Article 31.3(b).
454
4.641 Finally, Korea’s discussion of the negotiating history of Article 5.8 is both legally irrelevant
and contradicts Korea’s own position. Korea’s discussion is legally irrelevant because under
Article 32 of the Vienna Convention, recourse may be had to the preparatory work of a treaty “when
the interpretation according to Article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads
to a result which is manifestly absurd or unreasonable.” The application of Article 31 to Article 5.8
makes it clear that the 2 percent de minimis standard applies only to investigations, and not to reviews.
Thus, the meaning of Article 5.8 is not “ambiguous or obscure.” Moreover, this result is not
“manifestly absurd or unreasonable,” and Korea has not even alleged that it is.
4.642 Moreover, as a factual matter, the drafting history discussed by Korea contradicts its own
position. Korea refers to the so-called “Carlisle I” draft, which would have expanded the coverage of
Article 5.8 to the entire “Code.” Korea correctly notes that the United States opposed this expansion
and that, as a result, the ultimate language of Article 5.8 repeated the formulation in the 1979 AD
Agreement. Thus, contrary to what Korea alleges, the drafting history shows that the drafters
declined to apply the 2 percent de minimis standard to anything other than investigations.
4.643 In light of the above, the Panel should dismiss Korea’s claim and find that the United States’
application of a 0.5 percent de minimis standard to the assessment and review phase does not violate
US obligations under Article 5.8 of the AD Agreement.
(c) Rebuttal arguments made by Korea
4.644 Korea makes the following arguments in rebuttal to the United States responses:
4.645 The United States seeks to make much of the facts that Article 5 of the AD Agreement is
entitled “Initiation and Subsequent Investigation” and that the Appellate Body in Brazil -- Coconut
recognized there were two distinct phases in an anti-dumping proceeding--investigation and reviews.
4.646 The second US fact is self-evident, uncontested and irrelevant. The issue is whether the mere
fact that the de minimis threshold appears in Article 5 is dispositive. It is not.
4.647 As to the first “fact,” Article 5.9 clearly is not limited to the investigation stage. It provides
that “[a]n anti-dumping proceeding shall not hinder the procedures of customs clearance.” (Emphasis
added by Korea.) Thus, Article 5 is not limited to investigations, its title notwithstanding.
4.648 Also, the de minimis threshold set out in the second sentence of Article 5.8 uses the generic
word “cases.” Granted, as a matter of drafting, the use of “proceedings” (as in Article 5.9), rather
than the retention of the more amorphous “cases” (as originally used in the comparable provision
(Article 5.3) of the Tokyo Round Anti-Dumping Code ), would have been preferable. However, US
argument to the contrary notwithstanding, “cases” as used in Article 5.8 cannot be interpreted
textually to refer only to the investigation stage of an anti-dumping proceeding.

454 Se e EC - Imposition of Anti-Dumping Duties on Imports of Cotton Yarn from Brazil , ADP/137,
Report of the Panel adopted 30 October 1995, para. 497 (“The practices of three of the total signatories to an
Agreement did not constitute subsequent practice in the application of the treaty in accordance with
Article 31(3)(b) of the Vienna Convention on the Law of Treaties.”).

4.649 The purpose of the AD Agreement and of GATT Article VI--to define the circumstances in
which and procedures by which a Member legitimately can apply an anti-dumping measure--also
supports finding that a good-faith interpretation of the de minimis provision must apply the provision
to all phases of an anti-dumping proceeding. There is no logical reason why the de minimis level
during the review stage of a proceeding should be different than at the investigation stage. Moreover,
any other holding would allow a Member such as the United States to set the review threshold as low
as it wished.
4.650 Application of the de minimis threshold to the review stage of a proceeding thus is supported
by the interpretive rules of Article 31 of the Vienna Convention . According to Article 32 of the
Vienna Convention, recourse to the preparatory work of the AD Agreement and the circumstances of
its conclusion is permissible to confirm the meaning of the de minimis provision. Alternatively,
recourse to supplemental means of interpretation would be permissible if the Panel were to find either
that limiting the threshold to the investigation stage would lead to an unreasonable, indeed manifestly
absurd, result, or that the meaning of “cases” is ambiguous.
4.651 The negotiating history shows clearly that the US effort to limit the provision to
investigations failed. The arguments to the contrary in the US first submission do not square with the
facts. The Tokyo Round Code used the generic wo rd “cases.” Attempts in the “Carlisle I” and
“Carlisle II” drafts to specify more clearly the scope of the provision were unsuccessful. Therefore, in
the “Dunkel Draft,” as in the text of Article 5.8 appearing in the approved legal text, the Tokyo Round
Code’s reference to “cases” was retained.
4.652 Thus, the text of Article 5.8, rules of treaty interpretation, the Uruguay Round negotiating
history and common sense dictate that the 2.0 percent de minimis threshold apply to anti-dumping
reviews. Because Section 351.106(c) of the DOC’s regulations
455 sets the de minimis threshold for
administrative reviews at 0.5 percent, the United States is in breach of its WTO obligations.
(d) Rebuttal arguments made by the United States
4.653 The United States makes the following arguments in rebuttal:
4.654 In its first written submission to the Panel, the United States established that the text and
context of Article 5.8 demonstrate that this provision applies only to initial anti-dumping
investigations, and not to reviews of definitive anti-dumping duties, such as the underlying
administrative review of the order on DRAMs from Korea. There is one additional contextual point
that further confirms the fact that Article 5.8 applies only to investigations.
4.655 Korea's argument, as the United States understands it, is that due to the presence of the word
"cases" in the second sentence of Article 5.8, Article 5.8 applies to an anti-dumping proceeding as a
whole, and not merely to the initial investigatory phase. The natural consequence of this argument is
that whenever the authorities find a dumping margin of less than 2 percent, then they must consider
the margin de minimis and immediately terminate the case (or, in US terminology, “revoke” the anti-
dumping order).
4.656 However, this result is at odds with Article 11.3, footnote 22. That provision says that in
countries with a retrospective assessment system, such as the United States, a finding "that no duty is
to be levied shall not by itself require the authorities to terminate the definitive duty." In other words,
under footnote 22, a finding of a zero dumping margin does not require termination of an anti-
dumping order, even though such a dumping margin would be considered de minimis under
Article 5.8.

455 See 62 Fed. Reg. 27296, 27382-83 (19 May 1997) (Ex. ROK-49).

4.657 Put simply, if Article 5.8 means what Korea says it means, then footnote 22 is a nullity. If
Article 5.8 applies to more than initial investigat ions, then any time an authority administering a
retrospective system finds a dumping margin of less than 2 percent, under Article 5.8 it must
immediately terminate the case (or revoke the order). Under Korea's interpretation, one never gets to
footnote 22, because one of the events that trigge rs its application (a finding of a zero dumping
margin) automatically results in the termination of the duty, and there is nothing left to do under
Article 11.
4.658 Obviously, this construction violates the principle of “effectiveness” of treaty interpretation
which. Therefore, the United States respectfully submits that the Panel must find that Article 5.8 only
applies to initial anti-dumping investigations. Such an interpretation renders both Article 5.8 and
Article 11.3 (footnote 22) effective, and, as a result, conforms to accepted rules of treaty
interpretation.
4.659 Finally, although the text and context of Article 5.8 make clear that Article 5.8 applies only to
investigations, Korea has suggested that it somehow makes no sense to have different de minimis
standards apply to different phases of an anti-dumping proceeding. To the contrary, there is a very
good reason for having different standards.
4.660 Injurious dumping is a pernicious trade practice which the international community has
“condemned” for over fifty years.
456 Dumping is defined as the amount by which the normal value of
a like product sold in the ordinary course of trade exceeds the export price of the product. 457 A n y
excess, however small, constitutes dumping.
4.661 In the Uruguay Round of multilateral trade negotiations, however, the drafters recognized
that for purposes of investigations, a higher (more forgiving) standard of “actionable dumping”
(which is what a de minimis standard is) was appropriate. This recognition is consistent with the fact
that the calculation of a dumping margin necessarily involves scores (and in some cases, hundreds) of
discrete factual determinations, some of which may involve situations where the outcome is close and
the exercise of human judgment is unavoidable. For example, in the case of an adjustment to normal
value, it may be a "close call" as to whether a particular expense is direct or indirect or whether the
amount of the adjustment has been properly documented. This inevitable aspect of the anti-dumping
process arguably makes it unfair to subject parties in volved (perhaps for the first time) in an initial
investigation of dumping to an overly rigorous standard of actionable dumping.
4.662 Following an investigation, however, an exporter knows how the anti-dumping rules apply to
its particular factual situation. Therefore, it is appropriate to hold the exporter to a more demanding
de minimis standard, because the exporter is in a position to avoid dumping margins of 1-2 percent.
Thus, contrary to Korea’s assertions, there is a sound basis for apply different de minimis standards to
different phases of an anti-dumping proceeding.
4.663 Finally, Korea's reliance on the negotiating history of Article 5.8 remains misplaced. First of
all, it is clear from the plain text (and context) of Article 5.8 that it applies only to investigations.
Thus, reliance on negotiating history to reach a different interpretation is precluded by the Vienna
Convention. Secondly, as discussed in our first written submission, that negotiating history actually
confirms the position of the United States. Specifically, it shows that there was an attempt to render
the definition of de minimis in Article 5.8 applicable to more than just the investigatory phase.
However, this attempt was not successful.
4.664 At the second meeting of the Panel, the United States made the following additional rebuttal
arguments:

456 GATT 1994, Art. VI:1.
457 Id. See also AD Agreement, Art. 2.

4.665 Korea notes that Article 5.9 of the AD Agreement uses the word “proceeding.” According to
Korea, this proves that Article 5 is not limited to investigations, and Korea implies that this means that
Article 5.8 is not limited to investigations.
4.666 First, it is by no means clear that the term “proceeding,” as used in Article 5.9, refers to
something other than an “investigation.” The term “proceeding” is simply not defined in the AD
Agreement.
4.667 However, even assuming that Korea is correct in its assertion that the word “proceeding,” as
used in Article 5.9, encompasses both the investigatory and post-investigatory phases, this fact would
seem to undercut Korea’s argument, because it suggests that the drafters knew what terminology to
use when they sought to make a particular right or obligation extend beyond the investigation phase.
Thus, if Korea’s definition of “proceeding” is correct, the fact that the drafters declined to use this
term in Article 5.8 demonstrates that the drafters intended that Article 5.8 apply only to investigations.
4.668 Indeed, in its rebuttal submission, Korea concedes that it “would have been preferable” if the
drafters had used the word “proceeding” in Article 5.8. Certainly, from Korea’s perspective, it would
have been preferable if the drafters had done so, because it would have given Korea a textual basis for
its claim. Unfortunately for Korea, the drafters did not.
J. I
NCONSISTENCY OF THE REMEDY SOUGHT BY KOREA
(a) Submission by the United States
4.669 Regarding the findings and recommendations requested by Korea, contained in Section III.A
of this report. The United States submits that the specific remedy sought by Korea is inconsistent
with established panel practice. The following are the arguments of the United States in support of
this submission:
4.670 In its first submission, Korea has asked this Panel to recommend that the United States
“revoke the anti-dumping duty order on DRAMs from Korea .” In so doing, Korea has requested a
specific remedy that is inconsistent with established GATT/WTO practice and the DSU. Therefore,
should the Panel agree with Korea on the merits, the Panel nonetheless should reject the requested
remedy, and instead should make a general recommendation, consistent with the DSU and established
GATT/WTO practice, that the United States bring its anti-dumping measure into conformity with its
obligations under the AD Agreement.
4.671 The specific remedy
458 of revocation requested by Korea goes far beyond the type of remedies
recommended by the overwhelming preponderan ce of prior GATT 1947 and WTO panels. In
virtually every case in which a panel has found a measure to be inconsistent with a GATT obligation,
panels have issued the general recommendation that the country “bring its measures . . . into
conformity with GATT.” 459 This is true not only for GATT disputes, in general, but for disputes
involving the imposition of anti-dumping (and countervailing duty) measures, in particular.460
4.672 This well-established practice is codified in Article 19.1 of the DSU, which provides:

458 By “specific” remedy, the United States means a remedy that requires a party to take a particular,
specific action in order to cure a WTO-inconsistency found by a panel.
459 See, e.g., Canada - Measures Affecting Exports of Unprocessed Herring and Salmon, L/6268,
Report of the Panel adopted 22 March 1988, BISD 35S/98, 115, para. 5.1. The United States indicates that in
escess of 100 prior panel reports in which panels have made recommendations using similar language.
460 See, e.g. , Canadian Countervailing Duties on Gr ain Corn from the United States , SCM/140 and
Corr. 1, Report of the Panel adopted 28 April 1992, BISD 39S/411, 432, para. 6.2; Korean Resins , ADP/92,
para. 302.

Where a panel or the Appellate Body concludes that a measure is inconsistent with a
covered agreement, it shall recommend that the Member concerned bring the measure
into conformity with that agreement. (footnotes omitted).
4.673 Indeed, in the first case to work its way through the WTO dispute settlement system, the
recommendations of both the panel and the Appellate Body carefully adhered to Article 19.1.461
4.674 The requirement that panels make general recommendations reflects the purpose and role of
dispute settlement in the WTO, and, before it, under GATT 1947. Article 3.4 of the DSU provides
that “[r]ecommendations and rulings made by the DSB shall be aimed at achieving a satisfactory
settlement of the matter,” and Article 3.7 provides that “[a] solution mutually acceptable to the parties
to a dispute . . . is clearly to be preferred.” To this end, Article 11 of the DSU directs panels to
“consult regularly with the parties to the dispute and give them adequate opportunity to develop a
mutually satisfactory solution.” Ideally, a mutually agreed solution will be achieved before a panel
issues its report. However, if this does not occur, a general panel recommendation that directs a party
to conform with its obligations still leaves parties with the necessary room to cooperate in arriving at a
mutually agreed solution.
462
4.675 Indeed, a Member generally has many options available to it to bring a measure into
conformity with its WTO obligations. A panel cannot, and should not, prejudge by its
recommendation the solution to be arrived at by the parties to the dispute after the DSB adopts the
panel’s report.
4.676 In addition, the requirement that panels issue general recommendations comports with the
nature of a panel’s expertise, which lies in the interpretation of covered agreements. Panels generally
lack expertise in the domestic law of a defending party. 463 Thus, while it is appropriate for a panel to
determine in a particular case that a Member’s legislation was applied in a manner inconsistent with
that country’s obligations under a WTO agreement, it is not appropriate for a panel to dictate which of
the available options a party must take to bring its actions into conformity with its international
obligations.
4.677 The compliance process under the DSU makes the precise manner of implementation a matter
to be determined in the first instance by the Member concerned, subject to limited rights to
compensation or retaliation by parties that have successfully invoked the dispute settlement
procedures. In Article 19 of the DSU, the drafters precluded a panel from prejudging the outcome of
this process in their recommendations.

461 In Reformulated Gasoline , the Appellate Body recommended “that the Dispute Settlement Body
request the United States to bring the baseline establishment rules contained in Part 80 of Title 40 of the Code of
Federal Regulations into conformity with its obligations under the General Agreement.” WT/DS2/AB/R, p. 29.
The panel in that case issued a virtually identical recommendation. WT/DS2/R, Report of the Panel, as
modified by the Appellate Body, adopted 20 May 1996, para 8.2.
Even more noteworthy is Japan Taxes, in which the Appellate Body recommended “that the Dispute
Settlement Body request Japan to bring the Liquor Tax Law into conformity with its obligations under the
General Agreement on Tariffs and Trade 1994.” WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, at 34.
462 As noted by Prof. Jackson:
One of the basic objectives of any dispute procedure in GATT has been the effective
resolution of the dispute rather than “punishment” or imposing a “sanction” or obtaining
“compensation.” This objective has been recogn ized explicitly by GATT committees. The prime
objective has been stated to be the “withdrawal” of a measure inconsistent with the General
Agreement.
John H. Jackson, World Trade and the Law of the GATT 184 (1969) (citations omitted) (Ex.
USA 82).
463 Indeed, Article 8.3 of the DSU provides that citizens of Members whose governments are parties to
a dispute normally shall not serve on a panel concerned with that dispute, absent agreement by the parties.

4.678 In sum, specific remedies are at odds with established GATT and WTO practice and the
express terms of the DSU. Therefore, regardless of how the merits of this case are decided, Korea’s
request for revocation of the anti-dumping order on DRAMs should be rejected.
(b) Rebuttal response by Korea
4.679 Korea makes the following arguments in rebuttal to the United States submission:
4.680 The United States erroneously asserts that Korea impermissibly requests the Panel to
recommend a “specific remedy.”
4.681 There are two sentences in Korea’s remedy request. In the first, Korea respectfully requests
the Panel to find that the United States is not in conformity with its obligations under Articles I, VI
and X of the General Agreement and Articles 2, 5.8, 6, 11.1 and 11.2 of the AD Agreement. This is
in complete compliance with the so-called “general remedy” recommendation that is mandated by
Article 19.1 of the DSU, which provides that “[w]here a panel or the Appellate Body concludes that a
measure is inconsistent with a covered agreement, it shall recommend that the Member concerned
bring the measure into conformity with that Agreement.” (Footnotes omitted.)
4.682 In the second sentence of its remedy request, Korea “further requests that the Panel suggest
that the United States take the following actio ns to comply with its obligations under the WTO
Agreements . . ..” This language was carefully crafted to conform with the second sentence of
Article 19.1 of the DSU, which provides:
In addition to its recommendations, the panel or Appellate Body may suggest ways in
which the Member concerned could implement the recommendations. (Emphasis added
by Korea.)
4.683 In short, Korea is asking the Panel: (a) to make the “general remedy” recommendation called
for by the first sentence Article 19.1 of the DSU; and (b) to suggest ways the US could implement that
recommendation, as permitted by the second sentence of Article 19.1.
V. INTERIM REVIEW
5.1 On 6 November 1998, Korea and the United States requested the Panel to review, in
accordance with Article 15.2 of the DSU, precise aspects of the interim report issued to parties on 23
October 1998.
A. COMMENTS BY KOREA
5.2 Korea requested a number of changes to the Panel's description of Korea's main arguments.
Certain of these proposed changes were made by the Panel.
5.3 The Panel corrected typographical errors identified by Korea in Section VI of the report.
5.4 At the request of Korea, we corrected our description of the period of the first administrative
review at paragraph 6.2. In light of this correction, we amended references in the findings to the
period of time during which no dumping was found.
5.5 With regard to paragraph 6.55, Korea asserted that the Panel made a conclusory assertion
with no explicit indication of the reasons supporting the finding. Korea asked the Panel to clarify the
reasons why the Final Results Third Review were inconsistent with Article 11.2 of the AD
Agreement. The Panel made a change to this paragraph.

5.6 With regard to paragraph 6.92, Korea asked the Panel to issue findings regarding GATT 1994
Articles I and X, to avoid the situation described by the Appellate Body in Australia - Measures
Affecting Importation of Salmon .464 Korea stated that in that case the Appellate Body found that the
panel had erred in law by misapplying the doctrine of judicial economy. We note the Appellate
Body's statement in United States – Shirts and Blouses that "a panel need only address those claims
which must be addressed in order to resolve the matter at issue". 465 We also note that this statement
was referred to by the Appellate Body in Salmon. In Salmon, the Appellate Body also stated that "a
panel has to address those claims on which a finding is necessary in order to enable the DSB to make
sufficiently precise recommendations and rulings so as to allow for prompt compliance by a Member
with those recommendations and rulings 'in order to ensure effective resolution of disputes to the
benefit of all Members' [consistent with Article 21.1 of the DSU]." Having found that section
353.25(a)(2)(ii) of the DOC regulations, and the Final Results Third Review based on that provision,
are inconsistent with Article 11.2 of the AD Agreement, we consider that we have resolved "the
matter at issue" and "enable[d] the DSB to make sufficiently precise recommendations and rulings so
as to allow for prompt compliance by [the United States] with those recommendations and rulings 'in
order to ensure effective resolution of disputes to the benefit of all Members'." For these reasons, we
consider that it is not necessary for us to exam ine Korea's claims under Articles I and X of GATT
1994.
B. COMMENTS BY THE UNITED STATES
5.7 With regard to paragraphs 6.42 to 6.50, the United States expressed the concern that certain
phrases used by the Panel could be taken out of context. The United States asked the Panel to ensure
a clear distinction between the type of standard that administering authorities must apply in order to
satisfy the "necessary" standard under Article 11.2, and the quantum (and nature) of the evidence that
must support conclusions under such a standard. The Panel made some changes to paragraphs 6.43,
6.47 and 6.50.
5.8 The Panel corrected a typographical error identified by the United States in Section VI of the
report.
5.9 With respect to the second sentence of paragraph 6.50, the United States proposed replacing
the word "likelihood" with "necessity". The Panel did not make this change.
VI. FINDINGS
A. I
NTRODUCTION
6.1 This dispute arises out of the US Department of Commerce ("DOC") 24 July 1997 Notice of
Final Results of Antidumping Duty Administrative Review and Determination Not to Revoke Order
in Part: Dynamic Random Access Memory Semiconductors of One Megabyte or Above From the
Republic of Korea ("Final Results Third Review").466
6.2 An anti-dumping order was imposed on DRAMs from Korea (" DRAMs from Korea ") on 10
May 1993,467 following an investigation initiated pursuant to an application filed on 22 April 1992 by
Micron Technologies, Inc. ("Micron"). Two administrative reviews were initiated by the DOC on 15
June 1994 and 15 June 1995, covering the periods 29 October 1992 to 30 April 1994 and 1 May 1994
to 30 April 1995 respectively. The DOC found th at LG Semicon Co., Ltd. ("LGS") and Hyundai
Electronics Industries, Inc. ("Hyundai") (the "respondents") had not dumped in either period of
review.

464 Adopted 20 October 1998, WT/DS18/AB/R, hereinafter "Salmon".
465Adopted 23 May 1997, WT/DS33/AB/R, p. 19.
466 62 Fed. Reg. 39809 (24 July 1997).
467 58 Fed. Reg. 27520 (10 May 1993).

6.3 The DOC initiated a third annual review on 25 June 1996, covering the period 1 May 1995 to
30 April 1996. At the same time, the DOC initiated a revocation review pursuant to a request from
the respondents under section 353.25(a)(2) of the DOC regulations to revoke DRAMs from Korea in
part. On 24 July 1997, the DOC issued its Final Results Third Review , which contained a
determination not to revoke DRAMs from Korea in part, and a finding that the respondents had not
dumped during the period of the third administrative review.
6.4 On 14 August 1997, Korea requested consultations with the United States concerning the
DOC's determination not to revoke DRAMs from Korea .468 Consultations were requested under
Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes
("Dispute Settlement Understanding", or "DSU") and Article 17.3 of the WTO Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("AD
Agreement"). Consultations were held in Geneva on 9 October 1997, but the parties failed to reach a
mutually satisfactory solution.
6.5 On 6 November 1997, Korea requested the establishment of a panel
469 to examine inter alia
the consistency of (1) section 353.25(a)(2)(ii) and (iii) of the DOC regulations, and (2) the DOC's
determination not to revoke, with various provisions of the AD Agreement. This Panel was
established on 16 January 1998, with standard terms of reference.
470
B. PRELIMINARY ISSUES
6.6 The United States initially raised three pre liminary objections. First, the United States
asserted that claims raised by Korea under Articles 1, 2, 3 and 17 of the AD Agreement were not
properly before the Panel (i.e., were inadmissible) because they were not identified in Korea's request
for consultations. Second, the United States asserted that Korea's Article 1 claim was inadmissible
because it was not included in Korea's request for establishment of a panel. Third, the United States
argued that product scope claims raised by Ko rea under Articles 2, 3 and 18.4 of the AD Agreement,
and Article XVI:4 of the WTO Agreement, were inadmissible because they concerned a product
scope determination that is not subject to the disciplines of the AD Agreement.
6.7 In response to questions from the Panel, Korea stated that it "intended to advance no
arguments under Article 1",
471 and that it "does not take the position that the United States 'violated'
Article 17.6 …". 472 We therefore consider that Korea has not raised any claims under Articles 1 and
17.6 of the AD Agreement, and do not consider it necessary to rule on the US preliminary objections
concerning these issues.
6.8 In response to a question from the Panel, the United States asserted that "a Member should be
permitted to refer a claim to a panel if it was actually raised during consultations, even though it may
not have been included in the written request for consultations." 473 The United States also asserted
that the parties to the present case actually consulted on Korea's claims under Articles 2.1, 2.2, 2.2.1.1
and 3.1 of the AD Agreement. In its second submission, the United States repeated its request for the
Panel to find Korea's claims under Articles 1, 2, 3 and 17 of the AD Agreement inadmissible, "with
the exception of claims under Articles 2.1, 2.2, 2.2.1.1, and 3.1". 474 We therefore consider that the
United States has withdrawn its preliminary ob jection to Korea's Article 2.1, 2.2, 2.2.1.1 and 3.1
claims, and do not consider it necessary to rule on this matter.

468 WT/DS99/1.
469 WT/DS99/2.
470 WT/DS99/3.
471 See para.4.20, supra.
472 See para.4.22, supra.
473 See para.4.15, supra.
474 See para.3.2(a), supra.

6.9 Furthermore, Korea stated at the second meeting with the Panel that it is not raising separate
claims under Article 18.4 of the AD Agreement or Article XVI:4 of the WTO Agreement. 475
Accordingly, it is not necessary for us to rule on the US preliminary objection concerning such
claims.
6.10 In light of the above, we consider that the only preliminary issue before us is the admissibility
of Korea's claims under Articles 2 and 3 of the AD Agreement concerning product scope. More
particularly, the outstanding preliminary issue concerns the admissibility of Korea's claim that the
United States violated Articles 2 and 3 of the AD Agreement by "includ[ing] within the scope of
administrative reviews products that did not even exist at the time of the investigation (indeed,
products made using technologies and machines that did not even exist at the time of the
investigation)." The United States argues that this claim is inadmissible because, in accordance with
Article 18.3 of the AD Agreement, there is no product scope determination that is subject to the AD
Agreement.
6.11 Article 18.3 provides for the application of the AD Agreement to:
"investigations, and reviews of existing measures, initiated pursuant to applications
which have been made on or after the date of entry into force for a Member of the
WTO Agreement."
6.12 We note that the WTO Agreement entered into force for the United States on 1 January 1995.
6.13 We recall that Article 3.2 of the DSU requires panels to interpret "covered agreements",
including the AD Agreement, "in accordance with customary rules of interpretation of public
international law". The rules of treaty interpretation set forth in Article 31 of the Vienna Convention
on the Law of Treaties ("Vienna Convention"), have "attained the status of a rule of customary or
general international law".
476 Article 31.1 of the Vienna Convention provides:
"A treaty shall be interpreted in good fait h in accordance with the ordinary meaning
to be given to the terms of the treaty in their context and in the light of its object and
purpose".
6.14 In our view, pre-WTO measures do not become subject to the AD Agreement simply because
they continue to be applied on or after the date of entry into force of the WTO Agreement for the
Member concerned. Rather, by virtue of the ordinary meaning of the terms of Article 18.3, the AD
Agreement applies only to "reviews of existing measures" initiated pursuant to applications made on
or after the date of entry into force of the AD Agreement for the Member concerned ("post-WTO
reviews").477 However, we do not believe that the terms of Article 18.3 provide for the application of
the AD Agreement to all aspects of a pre-WTO measure simply because parts of that measure are
under post-WTO review. Instead, we believe that the wording of Article 18.3 only applies the AD
Agreement to the post-WTO review. In other words, the scope of application of the AD Agreement is

475 See para.4.43, supra.
476 United States - Standards for Reformulated and Conventional Gasoline (hereinafter Gasoline),
WT/DS2/AB/R, adopted 20 May 1996, p. 17.
477 We note that this approach is in line with that adopted by the panel in Desiccated Coconut in respect
of Article 32.3 of the SCM Agreement, which is virtually identical to Article 18.3 of the AD Agreement. That
panel stated that "Article 32.3 defines comprehensively the situations in which the SCM Agreement applies to
measures which were imposed pursuant to investigations not subject to that Agreement. Specifically, the
SCM Agreement applies to reviews of existing measures initiated pursuant to applications made on or after the
date of entry into force of the WTO Agreement. It is thus through the mechanism of reviews provided for in the
SCM Agreement, and only through that mechanism, that the Agreement becomes effective with respect to
measures imposed pursuant to investigations to which the SCM Agreement does not apply" ( Brazil - Measures
Affecting Desiccated Coconut , WT/DS22/R, para. 230, upheld by the Appellate Body in WT/DS22/AB/R,
adopted on 20 March 1997).

determined by the scope of the post-WTO review, so that pursuant to Article 18.3, the AD Agreement
only applies to those parts of a pre-WTO measure that are included in the scope of a post-WTO
review. Any aspects of a pre-WTO measure that are not covered by the scope of the post-WTO
review do not become subject to the AD Agreement by virtue of Article 18.3 of the AD Agreement.
By way of example, a pre-WTO injury determination does not become subject to the AD Agreement
merely because a post-WTO review is conducted relating to the pre-WTO determination of the
margin of dumping.
6.15 The principal issue in this dispute, therefore, is whether the DOC's 1993 product scope
determination was subject to review in the third administrative review.
478 Also at issue, however, is
whether US "administrative reviews", i.e., Article 9.3.1 duty assessments, constitute "reviews" within
the meaning of Article 18.3 of the AD Agreement. In the present case, we note that both parties
consider that Article 9.3.1 duty assessment procedures constitute "reviews" within the meaning of
Article 18.3. 479 For the purpose of our analysis in this case, therefore, we shall proceed on the
assumption that Article 9.3.1 duty assessment procedures do constitute "reviews" within the meaning
of Article 18.3.
6.16 There is nothing in the Final Results Third Review to indicate that the third administrative
review included a review of the 1993 DRAMs from Korea product scope determination. Although the
Final Results Third Review contain a section entitled "Scope of the Review", 480 this does not by itself
mean that the 1993 product scope determination was subject to review. To the contrary, the product
scope of the DRAMs from Korea order, and thus of the third administrative review, was determined
once and only once in the original pre-WTO investigation, well before the entry into force of the
WTO Agreement for the United States on 1 January 1995. The product scope of the order was not
subject to any re-examination in the third administrative review, nor was any determination regarding
product scope made at that time. In effect, therefore, Korea is asking the Panel to review the WTO-
consistency of an anti-dumping measure with regard to an aspect governed solely by a pre-WTO
determination.
6.17 Thus, we find that the scope of the third administrative review set forth in the Final Results
Third Review did not include the 1993 product scope determination. Proceeding on the basis of the
parties' agreement that Article 9.3.1 duty assessments constitute "reviews" within the meaning of
Article 18.3 of the AD Agreement (an issue on which we do not make any findings or conclusions),
the 1993 product scope determination was not part of that "review" and is therefore not rendered
subject to the AD Agreement by virtue of Article 18.3 of the AD Agreement. For this reason, Korea's
product scope claim concerning Articles 2 and 3 of the AD Agreement is not admissible.
C. C
ONSISTENCY OF SECTION 353.25(a)(2)(ii) AND (iii) WITH ARTICLE 11.2 OF THE AD
AGREEMENT
6.18 The determination not to revoke in part DRAMs from Korea was based on section
353.25(a)(2) of the DOC regulations.481 Section 353.25(a)(2) of the DOC regulations provides that:
"The Secretary may revoke an order in part if the Secretary concludes that:

478 Korea's claim appears to include all three post-WTO administrative reviews initiated by the DOC
(see para. 4.612, supra). However, we note that only the third administrative review, i.e., the Final Results
Third Review , is included in Korea's request for establishment. In line with consistent WTO panel and
Appellate Body practice, the two preceding administrativ e reviews therefore fall outside the Panel's terms of
reference.
479 In response to questions from the Panel, both parties confirmed their view that administrative
reviews (i.e., Article 9.3.1 duty assessment procedures) constitute "reviews" within the meaning of Article 18.3.
The United States also asserted that "the third administrative review … is subject to the AD Agreement by
virtue of Article 18.3." (See para. 4.38, supra.)
480 62 Fed. Reg. 39809 (24 July 1997), at 39809.
481 19 C.F.R §353.25(a)(2) (1997).

(i) One or more producers or resellers covered by the order have sold the
merchandise at not less than foreign market value for a period of at least three
consecutive years;
(ii) It is not likely that those persons will in the future sell the merchandise at
less than foreign market value; and
(iii) For producers or resellers that the Secretary previously has determined to
have sold the merchandise at less than foreign market value, the producers or resellers
agree in writing to their immediate reinstatement in the order, as long as any producer or
reseller is subject to the order, if the Secretary concludes under §353.22(f) that the
producer or reseller, subsequent to the revocation, sold the merchandise at less than
foreign market value."
6.19 Korea has raised a number of claims concerning the consistency of section 353.25(a)(2)(ii)
and (iii) with Article 11.2 of the AD Agreement.
482
6.20 Article 11.2 of the AD Agreement provides:
The authorities shall review the need for the continued imposition of the duty, where
warranted, on their own initiative or, provided that a reasonable period of time has
elapsed since the imposition of the definitive anti-dumping duty, upon request by any
interested party which submits positive information substantiating the need for a
review.* Interested parties shall have the right to request the authorities to examine
whether the continued imposition of the duty is necessary to offset dumping, whether the
injury would be likely to continue or recur if the duty were removed or varied, or both.
If, as a result of the review under this paragraph, the authorities determine that the
anti-dumping duty is no longer warranted, it shall be terminated immediately.
* A determination of final liability for payment of anti-dumping duties, as provided for in paragraph 3 of
Article 9, does not by itself constitute a review within the meaning of this Article.
6.21 In interpreting Article 11.2 of the AD Agreement, we bear in mind that Article 3.2 of the
DSU requires panels to interpret "covered agreem ents", including the AD Agreement, "in accordance
with customary rules of interpretation of public international law". We recall that the rules of treaty
interpretation set forth in Article 31 of the Vienna Convention have "attained the status of a rule of
customary or general international law".
483 We note that Article 31.2 of the Vienna Convention
expressly defines the context of the treaty to include th e text of the treaty. Thus, the entire text of the
AD Agreement may be relevant to a proper interpretation of any particular provision thereof.
6.22 In examining Korea's claims, we also bear in mind the standard of review set forth in Article
17.6(ii) of the AD Agreement:
"the panel shall interpret the relevant prov isions of the Agreement 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 authoritie s' measure to be in conformity with the
Agreement if it rests upon one of those permissible interpretations."
6.23 In addressing Korea's claims, the Panel is required to examine:

482 We recall that the consistency of section 353.25(a)(2)(i) of the DOC regulations with Article 11.2 of
the AD Agreement is not at issue (see note 50, supra).
483 Gasoline, WT/DS2/AB/R, adopted 20 May 1996, p. 17.

1. whether Article 11.2 of the AD Agreement precludes an anti-dumping duty
being deemed "necessary to offset dumping" where there is no present
dumping to offset; and
2. whether sub-paragraphs (ii) and (iii) of section 353.25(a)(2) are consistent with
Article 11.2.
1. Whether Article 11.2 of the AD Agreement precludes an anti-dumping duty being
deemed "necessary to offset dumping" where there is no present dumping to offset
6.24 Korea argues that Article 11.2 of the AD Agreement contains procedures to ensure that a duty
is not applied when it is no longer "necessary to offset dumping" that is causing injury, e.g., where an
exporter is found not to have been dumping. 484 We understand Korea to claim that Article 11.2 of the
AD Agreement precludes an anti-dumping duty being deemed "necessary to offset dumping" where
there is no present dumping to offset, and that Article 11.2 requires duties to be revoked as soon as
there is a finding of "no dumping".485
6.25 Having regard to the rules of treaty interpretation contained in Article 31.1 of the Vienna
Convention, we consider that the following textual and contextual analysis of Article 11.2 of the AD
Agreement is appropriate in resolving this issue.
6.26 First, we note that the second sentence of Article 11.2 refers to an examination of "whether
the continued imposition of the duty is necessary to offset dumping." We note further that this
sentence is expressed in the present tense. In addition, the second sentence of Article 11.2 does not
explicitly include any reference to dumping being "likely" to "recur", as is the case with the injury
review envisaged by that sentence.
6.27 However, the second sentence of Article 11.2 requires an investigating authority to examine
whether the "continued imposition" of the duty is necessary to offset dumping. The word "continued"
covers a temporal relationship between past and fu ture. In our view, the word "continued" would be
redundant if the investigating authority were restricted to considering only whether the duty was
necessary to offset present dumping. Thus, the inclusion of the word "continued" signifies that the
investigating authority is entitled to examine whether imposition of the duty may be applied
henceforth to offset dumping.
6.28 Furthermore, with regard to injury, Article 11.2 provides for a review of "whether the injury
would be likely to continue or recur if the duty were removed or varied" (emphasis supplied). In
conducting an Article 11.2 injury review, an inve stigating authority may examine the causal link

484 See para. 4.93, supra.
485 In the US, an anti-dumping order does not of itself result in the levying/assessment of duties, but
sets a rate of deposit for estimated duties to be paid on future imports. In the anniversary month of every order,
interested parties may request an "administrative review" of the anti-dumping order ( i.e., an Article 9.3.1 duty
assessment procedure). In an administrative review, the DOC calculates the anti-dumping duties actually owed
on imports during the previous 12 months, and sets a new deposit rate for estimated duties on future imports. If
the actual duties levied fall short of the deposit rate in the order, the excess is repaid. If the actual duties levied
exceed the deposit rate, the additional amount is collected. Despite the imposition of an anti-dumping order,
therefore, it is possible that no anti-dumping duties are actually levied. In cases where no anti-dumping duties
are levied, one could query whether Article 11.2, which concerns the imposition of a "duty", applies. However,
neither party disputes the application of Article 11.2 in such circumstances. In particular, in response to the
Panel's question: "Is the United States of the view that an anti-dumping duty is not being 'imposed' within the
meaning of Article 11 in cases where no duties are collected as a result of determinations in administrative
reviews that there has been no dumping?", the United States asserted that "a definitive anti-dumping duty (or
'order' in U.S. parlance) is 'imposed' within the meaning of Art. 11 even when no duties are actually being
'assessed' (or collected) …". Korea concurred orally with th is view, as it applies in this case. For the purpose of
our analysis in this case, therefore, we proceed on the assumption that Article 11.2 does apply.

between injury and dumped imports. If, in the cont ext of a review of such a causal link, the only
injury under examination is injury that may recur following revocation (i.e., future rather than present
injury), an investigating authority must necessarily be examining whether that future injury would be
caused by dumping with a commensurately prospective timeframe. To do so, the investigating
authority would first need to have established a st atus regarding the prospects of dumping. For these
reasons, we do not agree that Article 11.2 precludes a priori the justification of continued imposition
of anti-dumping duties when there is no present dumping.
6.29 In addition, we note that there is nothing in the text of Article 11.2 of the AD Agreement that
explicitly limits a Member to a "present" analysis, and forecloses a prospective analysis, when
conducting an Article 11.2 review.
6.30 Turning to the context of Article 11.2, we consider that Article 11.3 of the AD Agreement is
particularly relevant in giving support for and reinforcing this interpretation. Article 11.3 provides:
"Notwithstanding the provisions of paragraphs 1 and 2, any definitive anti-dumping duty
shall be terminated on a date not later than five years from its imposition (or from the
date of the most recent review under paragraph 2 if that review has covered both
dumping and injury, or under this paragraph), unless the authorities determine, in a
review initiated before that date on their own initiative or upon a duly substantiated
request made by or on behalf of the domestic industry within a reasonable period of time
prior to that date, that the expiry of the duty would be likely to lead to continuation or
recurrence of dumping and injury.* The duty may remain in force pending the outcome
of such a review."
* When the amount of the anti-dumping duty is assessed on a retrospective basis, a finding in the most
recent assessment proceeding under subparagraph 3.1 of Article 9 that no duty is to be levied shall not by
itself require the authorities to terminate the definitive duty.
6.31 We note that, with regard to dumping, the "sunset provision" in Article 11.3 of the AD
Agreement envisages inter alia an examination of whether the expi ry of an anti-dumping duty would
be likely to lead to "continuation or recurrence" 486 of dumping. If, as argued by Korea, an anti-
dumping duty must be revoked as soon as present dumping is found to have ceased, the possibility
(explicitly envisaged by Article 11.3) of the expiry of that duty causing dumping to recur could never
arise. This is because the reference to "expiry" in Article 11.3 assumes that the duty is still in force,
and the reference to "recurrence" of dumping assumes that dumping has ceased, but may "recur" as a
result of revocation. Korea's textual interpretation of Article 11.2 would effectively exclude the
possibility of an Article 11.3 review in circumstances where dumping has ceased but the duty remains
in force. Korea's interpretation therefore renders part of Article 11.3 ineffective. As stated by the
Appellate Body in Gasoline, "[a]n interpreter is not free to adopt a reading that would result in
reducing whole clauses or paragraphs of a treaty to redundancy or inutility".
487 An interpretation of
Article 11.2 which renders part of Article 11.3 meaningless is contrary to the customary or general
rules of treaty interpretation, and thus should be rejected.
6.32 Furthermore, Korea's argument that Article 11.2 requires the immediate revocation of an anti-
dumping duty in case of a finding of "no dumping" ( e.g., when a retrospective assessment finds that
no duty is to be levied) is also inconsistent with note 22 of the AD Agreement. Note 22 states that, in
cases where anti-dumping duties are levied on a retrospective basis, "a finding in the most recent
assessment proceeding … that no duty is to be levied shall not by itself require the authorities to
terminate the definitive duty". If Korea's interpretation of Article 11.2 were accurate, then an
investigating authority would be obligated under Article 11.2 to terminate an anti-dumping duty upon
making such a finding, and note 22 would be meaningless. In our view, this confirms a finding that

486 Emphasis supplied.
487 Gasoline, WT/DS2/AB/R, adopted 20 May 1996, p. 23.

the absence of present dumping does not in and of itself require the immediate termination of an anti-
dumping duty pursuant to Article 11.2.
6.33 We have also taken into account the basic operation of the AD Agreement more generally.
Under the AD Agreement, a Member is entitled to impose anti-dumping duties with prospective effect
on the basis of an examination of past dumping during a recent period of investigation, provided that
it creates a duty assessment mechanism under Article 9.3 to ensure that the amount of the anti-
dumping duty does not exceed the margin of dumping.
488 As the basic operation of the AD
Agreement is intrinsically prospective, it appears to us that any departure from this approach would be
explicitly provided for, which, as noted in para. 6.29 above, is manifestly not the case. Thus, the
Panel finds that, absent any such explicit provision, the AD Agreement does not require the automatic
revocation of anti-dumping duties as soon as dumping ceases after the date of imposition of the duties.
6.34 In light of the above, the Panel rejects the claim that Article 11.2 of the AD Agreement
requires revocation as soon as an exporter is found to have ceased dumping, and that the continuation
of an anti-dumping duty is precluded a priori in any circumstances other than where there is present
dumping.
489
2. Are sub-paragraphs (ii) and (iii) of section 353.25(a)(2) consistent with Article 11.2?
6.35 Korea claims that both the section 353.25(a)(2)(ii) "not likely" test and the section
353.25(a)(2)(iii) certification requirement violate Article 11.2 of the AD Agreement. We will address
the consistency of both provisions with Article 11.2 in turn.
(a) Consistency of the section 353.25(a)(2)(ii) "not likely" criterion with Article 11.2
6.36 Korea claims that the section 353.25(a)(ii) "not likely" criterion is inconsistent with
Article 11.2 of the AD Agreement. Korea argues inter alia that Article 11.2 only applies a "likely"
test in the context of injury, and not dumping. Korea argues that, even assuming the Article 11.2
"likely" test were to apply in the context of dumping as well as injury, "the United States has pushed
the text of Paragraph 2 still further without support. The United States has turned the 'likely' standard
on its head, transmogrifying it to 'not likely', …."
6.37 We recall that section 353.25(a)(2) of the DOC regulations provides in relevant part that:
"The Secretary may revoke an order in part if the Secretary concludes that:
(…)
(ii) It is not likely that those persons will in the future sell the merchandise at
less than foreign market value;
(…)
6.38 We note that in the Final Results Third Review, the DOC states that it "must be satisfied that
future dumping is not likely in order to revoke an order. In this case, based upon the evidence in the
record, this standard has not been met and, therefore, we conclude that there is a need for the order to
remain in place". 490 On the basis of the clear evidence of record, therefore, it is apparent that section

488 It has long been recognised in the GATT system that such an approach, sometimes referred to as a
"pre-selection system", is permissible. See, for example, the Second Report on Anti-Dumping and
Countervailing Duties, adopted on 27 May 1960, BISD 9S/194, at 195.
489 Of course, the absence of dumping and the length of time that situation has existed may well be
relevant to the issue of the prospect of recurrence of dumping.
490 62 Fed. Reg. 39809 (24 July 1997), at 39819.

353.25(a)(ii) is in fact a "not likely" criterion, such that the only determination made under section
353.25(a)(2)(ii) is whether recurrence of dumping is "not likely". If the DOC fails to satisfy itself that
recurrence of dumping is "not likely", it will find that there is a need for the continued imposition of
the anti-dumping duty.
6.39 In light of the above, we must consider whether the section 353.25(a)(2)(ii) "not likely"
criterion is, as claimed by Korea, inconsistent with the terms of Article 11.2. In particular, we must
examine whether the terms of Article 11.2 preclude the continued imposition of anti-dumping duties
on the basis that an authority fails to satisfy itself that recurrence of dumping is "not likely". In order
to do so, we must first examine the relationship between Articles 11.2 and 11.1. In our view, the
references in Article 11.2 to "the need for the continued imposition of the duty" and "whether the
continued imposition of the duty is necessary to offset dumping" can only be understood in a
meaningful manner when read in conjunction with the obligation in Article 11.1, whereby:
"An anti-dumping duty shall remain in force only as long as and to the extent necessary
to counteract dumping which is causing injury."
6.40 Both parties agree that Article 11.2 of the AD Agreement implements Article 11.1. Both
parties have argued that Article 11.1 of the AD Agreement contains a general rule that anti-dumping
duties shall remain in force only as long as and to the extent necessary to counteract dumping which is
causing injury. Both parties have also argued that the general rule contained in Article 11.1 is
implemented through Article 11.2 (and Article 11.3).491
6.41 We agree with the parties that, by virtue of Article 11.1 of the AD Agreement, an anti-
dumping duty may only continue to be imposed if it remains "necessary" to offset injurious dumping.
We are of the view that Article 11.1 contains a general necessity requirement, whereby anti-dumping
duties "shall remain in force only as long as and to the extent necessary" to counteract injurious
dumping. That anti-dumping duties "shall remain in force only as long as and to the extent necessary"
to counteract injurious dumping is therefore an unambiguous requirement of Article 11.1. We also
agree with the parties that the application of the general rule in Article 11.1 is specified in Article
11.2, which provides generally that "authorities shal l review the need for the continued imposition of
the duty", and requires authorities "to examine whether the continued imposition of the duty is
necessary to offset dumping" in the context of Article 11.2 dumping reviews.
6.42 Accordingly, we must assess the essential character of the necessity involved in cases of
continued imposition of an anti-dumping duty. We note that the necessity of the measure is a function
of certain objective conditions being in place, i.e. whether circumstances require continued imposition
of the anti-dumping duty. That being so, such continued imposition must, in our view, be essentially
dependent on, and therefore assignable to, a foundation of positive evidence that circumstances
demand it. In other words, the need for the continued imposition of the duty must be demonstrable on
the basis of the evidence adduced.
6.43 The necessity of the continued imposition of the anti-dumping duty can only arise in a defined
situation pursuant to Article 11.2: viz to offset dumping. Absent the prescribed situation, there is no
basis for continued imposition of the duty: the duty cannot be "necessary" in the sense of being
demonstrable on the basis of the evidence adduced because it has been deprived of its essential
foundation. In this context, we recall our finding
492 that Article 11.2 does not preclude a priori
continued imposition of anti-dumping duties in the absence of present dumping. However, it is also
clear from the plain meaning of the text of Article 11.2 that the continued imposition must still satisfy
the "necessity" standard, even where the need for the continued imposition of an anti-dumping duty is
tied to the "recurrence" of dumping. We recognize that the certainty inherent to such a prospective
analysis could be conceivably somewhat less than that attached to purely retrospective analysis,

491 See, for example, paras. 4.91 (Korea) and 4.154 (United States) supra.
492 See section VI.C.1, supra.

reflecting the simple fact that analysis involving prediction can scarcely aspire to a standard of
inevitability. This is, in our view, a discernable distinction in the degree of certainty, but not one
which would be sufficient to preclude that the sta ndard of necessity could be met. In our view, this
reflects the fact that the necessity involved in Article 11.2 is not to be construed in some absolute and
abstract sense, but as that appropriate to circumstances of practical reasoning intrinsic to a review
process. Mathematical certainty is not required, but the conclusions should be demonstrable on the
basis of the evidence adduced. This is as much applicable to a case relating to the prospect of
recurrence of dumping as to one of present dumping.
6.44 We must now consider whether a failure to find that the recurrence of dumping is "not likely"
meets the standard that the continued imposition of the anti-dumping duty be demonstrable on the
basis of the evidence adduced. In doing so, we note the US argument that "under section 353.25, the
Department seeks to determine … whether the dumping which had occurred in the past, and which led
to the imposition of the order, is likely to recur if the order is revoked. If a resumption of dumping is
likely should the order be terminated, then a plain reading of the terms of Article 11 indicate that the
“continued imposition of the duty is necessary to offset dumping.”"
493 As a first step, therefore, we
must consider whether the section 353.25(a)(2)(ii) "not likely" approach utilised by the United States
is indeed equivalent to a test of whether dumping is "likely to recur". This is without prejudice to any
view at this stage regarding the second step of whether the "likely to recur" standard would be, in turn,
itself consistent with the terms of Article 11.2 as regards the necessity of the anti-dumping duty to
offset dumping.
6.45 We consider that a failure to find that an event is "not likely" is not equivalent to a finding
that the event is "likely". We see a clear conceptual difference between establishing something as a
positive finding, and failing to establish something as a negative finding. It is perfectly possible that
one could not determine that someone was unlikely to dump and find that they were also likely to
dump. But the former determination does not, in and of itself, amount to a demonstrable basis for
concluding the latter. This is evident from the fact that the former finding is manifestly compatible
also with the reverse of the latter situation, i.e., it is perfectly logical to find that you cannot determine
that someone is unlikely to dump, yet also be unable to determine that they were actually likely to
dump. In other words, determining that something is not "not likely" is entailed by, but does not itself
entail, that something is likely.
6.46 We consider that this reflects common usage of the relevant terms. A finding that an event is
"likely" implies a greater degree of certainty that the event will occur than a finding that the event is
not "not likely". For example, in common parlance, a statement that it is "likely" to rain implies a
greater likelihood of rain than a statement that rain is not unlikely, or not "not likely". Similarly, a
statement that a horse is "likely" to win a race implies a greater likelihood of victory than a statement
that the same horse is not unlikely to win, or not "not likely" to win. The difference between the
concepts of "likely" and "not likely" is perhaps made clearer by interpreting the word "likely" in
accordance with its normal meaning of "probable". The question then becomes whether not "not
probable" is equivalent to "probable". In our view, the fact that an event is not "not probable" does
not by itself render that event "probable".
6.47 Given this reality, it is a priori possible that situations could arise where the not "not likely"
criterion is satisfied but where the likelihood criterion is not satisfied. Reliance on the not likely
criterion clearly fails to provide any reliable means to avoid or preclude this flaw. Given such a
fundamental flaw, it cannot constitute a demonstrable basis for consistently and reliably determining
that the likelihood criterion is satisfied.
6.48 In light of the above analysis, we conclude that the section 353.25(a)(2)(ii) "not likely"
standard is not in fact equivalent to, and falls deci sively short of, establishing that dumping is "likely
to recur if the order is revoked". This being so, we do not need to address the potential second step of

493 See para. 4.124 supra.

whether, in turn, the "likely" standard is itself consistent with the terms of Article 11.2 of the AD
Agreement.494
6.49 We have not found any other detailed argument developed by the United States in
justification of its view that the section 353.25(a)(2)(ii) "not likely" criterion is consistent with the
terms of Article 11.2. We consider, however, that the US submission could be construed to argue that
the necessity of the continued imposition of a duty may be somehow more directly warranted by a
finding that it is not possible to determine that recurrence of dumping is "not likely", irrespective of
the fact that a finding that recurrence of dumping is not "not likely" is not equivalent to a finding that
recurrence of dumping is "likely".
6.50 Recalling our views in para. 6.42 above, we note that "necessity" in the context of Article
11.2 requires the need for the continued imposition of an anti-dumping duty being demonstrable on
the basis of the evidence adduced. In our view, given that we have found that a determination that it
is not possible to conclude that recurrence of dumping is "not likely" does not in and of itself provide
a demonstrable basis to reliably conclude that recurrence of dumping is "likely", we also find that it is
logically incapable of providing any predictive assurance at even an equivalent, and certainly not a
higher, level than likelihood. Nor has the United States in any case provided any argument as to what,
if any, other standard of predictive assurance is in fact consistent with the terms of Article 11.2 short
of likelihood. As outlined in para. 6.43 above, while mathematical certainty of recurrence of dumping
is not required, the conclusions must still be demonstrable on the basis of the evidence adduced. In
this case, however, it is not even established that recurrence of dumping is likely. Absent any other
rationale, this amounts to an effective presumption that, in the absence of a finding that recurrence of
dumping is not "not likely", anti-dumping duties may continue to be imposed. But "presumption", by
definition, exists only where there is no requirement of justification or proof. As such, it is manifestly
irreconcilable with the requirements of meeting a standard of necessity which involves
demonstrability on the basis of the evidence adduced. In light of this, we are unable to find that the

494 While we do not need to proceed to the second step, and have not done so, we make the following
observations. We note that Article 11.3 provides for termination of a definitive anti-dumping duty five years
from its imposition. However, such termination is conditional. First, the terms of Article 11.3 itself lay down
that this should occur unless the authorities determine that the expiry would be "likely to lead to continuation or
recurrence of dumping and injury." Where there is a determination that both are likely, the duty may remain in
force, and the five year clock is reset to start again from that point. Second, Article 11.3 provides also for
another situation whereby this five year period can be otherwise effectively extended, viz in a situation where a
review under paragraph 2 covering both dumping and injury has taken place. If, for instance, such a review
took place at the four year point, it could effectively extend the sunset review until 9 years from the original
determination. In the first case, we note that the provisions of Article 11.3 explicitly conditions the prolongation
of the five year period on a finding that there is likelihood of dumping and injury continuing or recurring. In the
second case, where there is reference to review under Article 11.2, there is no such explicit reference.
However, we note that both instances of review have the same practical effect of prolonging the
application of anti-dumping duties beyond the five year point of an initial sunset review. This at the very least
suggests, in our view, that there could be reason to support a view that authorities are entitled to apply the same
test concerning the likelihood of recurrence or continuation of dumping for both Article 11.2 and 11.3 reviews.
There certainly appears to be nothing that explicitly pr ovides to the contrary. Nor do we see any reason why
this conclusion would be materially affected by whether or not the dumping review occurred in conjunction with
an injury review. There is nothing in the text of Article 11 which suggests there should be some fundamental
bifurcation of the applicable standard for dumping review contingent on whether there is also an Article 11.2
injury review being undertaken.
We also note that "likelihood" or "likely" carries with it the ordinary meaning of "probable". That
being so, it seems to us that a "likely standard" amounts to the view that where recurrence of dumping is found
to be probable as a consequence of revocation of an anti-dumping duty, this probability would constitute a
proper basis for entitlement to maintain that anti-dumping duty in force. Without prejudice to the legal status of
such a view in terms of its consistency with the terms of Article 11.2 - a matter on which we are not required to
rule as noted in the text above - we feel obliged to at l east take note that, at least as a practical matter, rejection
of such a view would effectively amount to a systematic requirement that reviewing authorities are obliged to
revoke anti-dumping duties precisely where doing so would render recurrence of dumping probable.

section 353.25(a)(2)(ii) "not likely" criterion provides any demonstrable basis on which to reliably
conclude that the continued imposition of the duty is necessary to offset dumping.
6.51 For these reasons, we find that the section 353.25(a)(2)(ii) "not likely" criterion operates to
effectively require495 the continued imposition of anti-dumping duties, and prevents revocation, in
circumstances inconsistent with and outside of those provided for in Article 11.2. Accordingly, we
find that section 353.25(a)(2)(ii) constitutes a mandatory requirement inconsistent with Article 11.2 of
the AD Agreement.
496
(b) Is the section 353.25(a)(2)(iii) certification requirement consistent with Article 11.2 of the
AD Agreement?
6.52 Korea raises two claims concerning the section 353.25(a)(2)(iii) certification requirement.
First, Korea claims that "the limited authority granted Members under Article 11 to impose and
maintain anti-dumping duties does not extend so far as to permit a Member to impose a certification
requirement for revocation". 497 Second, Korea claims that the certification requirement "requires a
respondent to forgo its right under Paragraph 2 of Article 11 to an injury finding. This violates
Paragraph 2 of Article 11 of the Anti-Dumping Agreement, which requires Members to impose duties
only where dumping exists and is causing injury and obliges Members to conduct investigations of
dumping and injury before imposing (or maintaining) any duty".
498
6.53 We note section 751(b) of the 1930 Tariff Act (as amended) and section 353.25(d) of the
DOC's regulations, whereby an anti-dumping order may be revoked on the basis of "changed
circumstances". We note that neither of these provisions imposes a certification requirement. In
other words, an anti-dumping order may be revoked under these provisions absent fulfilment of the
section 353.25(a)(2)(iii) certification requirement. We also note that Korea has not challenged the
consistency of these provisions with the WTO Agreement. Thus, because of the existence of
legislative avenues for Article 11.2-type reviews that do not impose a certification requirement, and
which have not been found inconsistent with the WTO Agreement, we are precluded from finding that
the section 353.25(a)(2)(iii) certification requirement in and of itself amounts to a mandatory
requirement inconsistent with Article 11.2 of the AD Agreement.

495 In making this finding, we note that the DOC's determination in the Final Results Third Review is
not separable from, or contingent to, the terms of the DOC regulations. Rather, our finding of inconsistency
with the terms of the AD Agreement are rooted in and tied to the terms of the DOC regulations. In this way, it
is by reason of the section 353.25(a)(2) "not likely" criterion that we find the United States to be in breach of the
terms of Article 11.2. The United States is effectively obliged to act upon the DOC regulations, such that to all
practical intents and purposes the DOC regulations are mandatorily applicable.
496 According to the United States, "respondents are free to pursue revocation through an Article 11.2-
type review under section 751(b)" of the 1930 Tariff Act, in addition to section 751(a) th ereof. We take note of
the view that, consistent with reasoning that has been applied in earlier GATT/WTO disputes, the existence of
alternative, WTO-consistent legislative avenues for Article 11.2-type reviews (such as section 751(b)) could be
considered capable of precluding a fi nding that the inability of the United States to revoke under section
353.25(a)(2) in and of itself constitutes a mandatory requirement inconsistent with Article 11.2. This issue does
not arise in respect of the section 353.25(a)(2)(ii) "not likely" criterion, however, since there are, in any case, no
alternative, WTO-consistent avenues for Article 11.2-type reviews available. The United States asserts that
"[r]egardless of the procedural mechanism used ( e.g., section 751(a) of the Act and section 353.25(a) of the
Department's regulations, or section 751(b) of the Act and section 353.25(d) of the Department's regulations),
the Department will not revoke an anti-dumping order based on a cessation of dumping unless it determines that
a resumption of dumping is not likely" (emphasis supplied). In other words, because the WTO-inconsistent "not
likely" criterion will be applied in all cases, there are necessarily no WTO-consistent alternative avenues for
Article 11.2-type reviews.
497 See para. 4.285, supra.
498 See para. 4.286, supra.

3. Conclusion
6.54 For the above reasons, we conclude that section 353.25(a)(2)(ii) is not consistent with Article
11.2 of the AD Agreement.499
D. CONSISTENCY OF THE FINAL RESULTS THIRD REVIEW WITH ARTICLE 11.2 OF THE AD
AGREEMENT
6.55 We have found that section 353.25(a)(2)(ii) of the DOC regulations is inconsistent with
Article 11.2 of the AD Agreement. Since the Final Results Third Review is itself based on and
determined by section 353.25(a)(2)(ii), we must find that the Final Results Third Review is thereby
also inconsistent with Article 11.2 of the AD Agreement.
E. CONSISTENCY OF THE FAILURE TO SELF-INITIATE AN INJURY REVIEW WITH ARTICLE 11.2 OF
THE AD AGREEMENT
6.56 Korea raises two claims concerning ex officio Article 11.2 injury reviews. First, Korea
effectively claims that an ex officio injury review was "warranted" in the present case because there
had been no dumping -- and therefore no injury caused by dumping -- for three years and six months.
Second, Korea claims that even if the US were to have decided that an ex officio injury review was
"warranted" in the present case, the International Trade Commission ("ITC") does not have the
authority to conduct such a review because Article 11.2 is not properly implemented in US legislation.
1. Is an ex officio Article 11.2 injury review warranted after three years and six months' no
dumping?
6.57 Korea argues that the United States violated Article 11.2 of the AD Agreement because, "after
concluding for three years that no injury was occurring as a result of dumping, the authorities had an
obligation on their own initiative ('it was warranted') to investigate whether injury as well as dumping
would be likely to resume if the order were revoked."
500 Korea is effectively claiming that Article
11.2 necessarily requires an investigating authority to self-initiate an Article 11.2 injury review solely
on the basis of three years and six months' no dumping, because any injury found to exist will not be
caused by dumped imports due to the absence of dumping.
6.58 The issue before us is whether Article 11.2 necessarily requires an investigating authority,
following three years and six months' findings of no dumping, to find that an ex officio Article 11.2
review of "whether the injury would be likely to continue or recur if the duty were removed or varied"
is "warranted".

499 In arriving at our finding, we examined the matter in accordance with the terms of Article 17.6,
including 17.6 sub-para (ii). In interpreting the relevant provisions of the AD Agreement in the course of
addressing the claims and arguments before it, we have done so in accordance with customary rules of
interpretation of public international law. We note that, in making certain of its arguments in response to the
claims of Korea, the United States characterised those arguments as constituting a “permissible interpretation”
of the terms of the AD Agreement. As a matter of fact, where we failed to find those arguments persuasive, we
rejected them on the basis that they were not consistent with the AD Agreement and, in reaching such a view,
we did so on the basis of the customary rules of interpretation of public international law. The fact that the
arguments concerned had been presented as a “permissible interpretation” did not, in the circumstances of this
case, alter the legal basis upon which we were able to, and did, evaluate them, viz. the customary rules of
interpretation of public international law. We further observe that, as a consequence, there is neither warrant
nor need in this case to enquire further as to whether the AD Agreement “ more generally”, as it were, admits of
further interpretation.
500 See para. 4.303, supra.

6.59 A review of "whether the injury would be likely to continue or recur if the duty were removed
or varied" could include a review of whether (1) injury that is (2) caused by dumped imports 501 would
be likely to continue or recur if the duty were removed or varied. With regard to injury, we believe
that an absence of dumping during the preceding three years and six months is not in and of itself
indicative of the likely state of the relevant domestic industry if the duty were removed or varied.
With regard to causality, an absence of dumping during the preceding three years and six months is
not in and of itself indicative of causal factors other than the absence of dumping. If the only causal
factor under consideration is three years and six months' no dumping, the issue of causality becomes
whether injury caused by dumped imports will recur. This necessarily requires a determination of
whether dumping will recur. Thus, the "injury" review that Korea believes is "warranted" on the basis
of three years and six months' no dumping woul d be entirely dependent upon a determination of
whether dumping will recur. This is precisely the type of determination that the United States sought
to make in the present case. The mere fact of three years and six months' findings of no dumping
does not require the investigating authority to, in addition, self-initiate a review of "whether the injury
would be likely to continue or recur if the duty were removed or varied".
6.60 We therefore reject Korea's claim that the United States violated Article 11.2 of the AD
Agreement by failing to initiate, solely on the basis of three years and six months' no dumping, an ex
officio Article 11.2 review of "whether the injury would be likely to continue or recur if the duty were
removed or varied".
2. Does the ITC have the authority to conduct an ex officio Article 11.2 injury review?
6.61 Korea effectively claims that US law is inconsistent with Article 11.2 of the AD Agreement
because it does not provide the ITC with the authority to conduct an ex officio Article 11.2 injury
review where "warranted".
6.62 We reject Korea's claim because the United States has established that the ITC has a general
authority to conduct ex officio Article 11.2 injury reviews by virtue of section 751(b) of the 1930
Tariff Act and section 207.45(c) of the ITC regulations.502
F. ARTICLE 2.2.1.1 OF THE AD AGREEMENT
6.63 Korea submits that the United States violated Article 2.2.1.1 of the AD Agreement because it
"disregarded cost data prepared by Respondents which were in accordance with generally accepted
accounting principles of Korea and accurately reflected costs".503 We understand Korea to claim that
the United States violated Article 2.2.1.1 by rejecting (a) the Flamm econometric study regarding cost
trends (the "Flamm study"), and (b) the cost data submitted by respondents for 1996.
6.64 Article 2.2.1.1 of the AD Agreement provides in relevant part:
"For the purpose of paragraph 2, costs shall normally be calculated on the basis of
records kept by the exporter or producer under investigation, provided that such
records are in accordance with the generally accepted accounting principles of the

501 We note that, by virtue of note 9 of the AD Agreement, the term "injury" in Article 11.2 "shall be
interpreted in accordance with the provisions of" Article 3. Article 3.5 of the AD Agreement requires the
establishment of a causal link between the dumped imports and the injury found to exist. Thus, we consider that
the Article 11.2 examination of "whether the injury would be likely to continue or recur if the duty were
removed or varied" may also involve an examination of wh ether any injury that is found to be likely to continue
or recur is caused by dumped imports. We can envisage circumstances, however, when an Article 11.2 injury
review need not necessarily include an examination of causal link.
502 See para. 4.317, supra.
503 See para. 4.390, supra.

exporting country and reasonably reflect the costs associated with the production and
sale of the product under consideration. ..."
6.65 In addressing these two claims, we note th at Article 2.2.1.1 of the AD Agreement applies
"[f]or the purpose of paragraph 2" of Article 2, while the cost data in issue was submitted in the
context of an Article 11.2 review. However, neither party questioned the applicability of Article
2.2.1.1 in the present case.
504 For the purpose of our analysis in this case, therefore, we proceed on the
assumption that Article 2.2.1.1 does apply.
1. Rejection of the Flamm study
6.66 Korea claims that the United States violated Article 2.2.1.1 of the AD Agreement because it
disregarded cost data in the Flamm study which (1) were in accordance wi th the generally accepted
accounting principles of Korea and (2) accurately reflected costs. Korea's claim is effectively based on
an interpretation of Article 2.2.1.1 of the AD Agreement that requires a Member to accept projections
for future costs based on historical cost data prov ided those projections are "in accordance with the
generally accepted accounting principles of the exporting country and reasonably reflect the costs
associated with the production and sale of the product under consideration." Article 2.2.1.1, however,
clearly indicates that the provisos concerning generally accepted accounting principles and reflection
of costs of production and sale only apply to "r ecords kept by the exporter or producer under
investigation". As the projections for the Flamm study, which were prepared by an outside consultant
on behalf of Hyundai, do not constitute "records kept by the exporter or producer under
investigation", we believe that the two provisos contained in the first sentence of Article 2.2.1.1 do
not apply to the US treatment of the projections for that study. Accordingly, we must reject Korea's
claim based on those provisos, i.e., that the United States violated Article 2.2.1.1 because it rejected
projections for future costs based on historical cost data that are "in accordance with the generally
accepted accounting principles of the exporting country and reasonably reflect the costs associated
with the production and sale of the product under consideration."
6.67 Assuming for the sake of argument that it were permissible to interpret Article 2.2.1.1 of the
AD Agreement so as to require a Member to accept projections for future costs based on historical cost
data provided they are "in accordance with the generally accepted accounting principles of the
exporting country and reasonably reflect the costs associated with the production and sale of the
product under consideration", we believe that Korea's claim would still fail. As the Final Results
Third Review do not suggest that any projected costs were rejected because they were not prepared "in
accordance with the generally accepted accounting principles" of Korea, we understand Korea to
argue that the United States violated Article 2.2.1.1 by rejecting projected costs that "reasonably
reflect the costs associated with the production and sale" of DRAMs. In light of Korea's interpretation
of Article 2.2.1.1 of the AD Agreement, and in light of Articles 17.5(ii) and 17.6(i) of the AD
Agreement, Korea's claim would require us to determine whether, given the record evidence before
the DOC, an unbiased and objective investigating authority could properly have found that the Flamm
study did not "reasonably reflect the costs associated with the production and sale" of DRAMs. In its
Final Results Third Review , the DOC found that "the cost portion of the Flamm study was based on
several questionable premises including the assumption of certain production yields and rates." For
example, the DOC stated that the Flamm study contained "optimistic capacity rates" that were
"difficult to accept" in a context of production cutbacks, and that the capacity scenario was based on a
demand assumption that could not be borne out by market conditions present at that time.
505 Korea
has failed to challenge the DOC's finding of "questionable premises", and has failed to identify

504 The Panel asked both parties oral questions concerning the applicability of Article 2.2.1.1 in the
present case. In its oral response, the United States in particular did not dispute the applicability of Article
2.2.1.1. While noting that an Article 2 dumping determination had not been made in the present Article 11.2
review, the United States asserted that cost data submitted for the Article 11.2 review had been assessed using
the "Anti-Dumping Agreement, our standard methodology".
505 62 Fed. Reg. 39809 (24 July 1997), at 39818.

anything in the record to indicate that, in light of the "questionable premises" identified by the DOC,
an unbiased and objective investigating authority could not properly have considered that the study
did not "reasonably reflect the costs associated with the production and sale" of DRAMs. Korea
merely notes that the "record contains … a valid econometric study", and accuses the DOC of having
"summarily rejected" that study.
6.68 In EC - Hormones, the Appellate Body stated that:
"[t]he initial burden lies on the complaining party, which must establish a prima facie
case of inconsistency with a particular provision of the SPS Agreement on the part of the
defending party, or more precisely, of its SPS measure or measures complained about.
When that prima facie case is made, the burden of proof moves to the defending party,
which must in turn counter or refute the claimed inconsistency." 506
6.69 In failing to advance anything beyond conclusory arguments in support of its claim that the
DOC should not have rejected the Flamm study, we consider that Korea has failed to "establish a
prima facie case" that an objective and impartial investigating authority could not properly have found
that the study did not "reasonably reflect the costs associated with the production and sale" of
DRAMs.
6.70 Accordingly, assuming for the sake of argument that Article 2.2.1.1 of the AD Agreement
requires a Member to accept projections for future costs based on historical cost data provided those
projections are "in accordance with the generally accepted accounting principles of the exporting
country and reasonably reflect the costs associated with the production and sale of the product under
consideration", we would reject Korea's claim that the United States violated Article 2.2.1.1 of the AD
Agreement by rejecting projections for future costs based on historical cost data that "reasonably
reflect the cost of production and sale" of DRAMs.
2. Rejection of respondents' 1996 cost data
6.71 Korea further claims that the United States violated Article 2.2.1.1 of the AD Agreement by
rejecting respondents' cost data for 1996. We understand Korea's claim to refer exclusively to the
DOC's rejection of cost data submitted by LGS for the second
 half of 1996. The Final Results Third
Review do not suggest that the DOC rejected LG S cost data for the first half of 1996. 507 Nor do the
Final Results Third Review suggest that cost data submitted by other respondents for 1996 was rejected.
6.72 As the Final Results Third Review do not suggest that LGS cost data for the second half of
1996 were rejected because they were not prepared "in accordance with the generally accepted
accounting principles" of Korea, we understand Korea to argue that the United States violated Article
2.2.1.1 by rejecting LGS cost data for the second half of 1996 that "reasonably reflect the costs
associated with the production and sale" of DRAMs. In light of Articles 2.2.1.1, 17.5(ii) and 17.6(i)
of the AD Agreement, Korea's claim requires us to determine whether, given the record evidence
before the DOC, an unbiased and objective investigating authority could properly have found that the
cost data submitted by LGS for the second half of 1996 did not "reasonably reflect the costs
associated with the production and sale" of DRAMs.
6.73 In its Final Results Third Review , the DOC stated that its review of LGS cost data for the
second half of 1996 "indicates that there are serious questions whether the reported costs were
understated due to significant changes in LGS' depreciation schedule and write-offs of foreign
exchange losses."
508 These "serious questions" were then described in greater detail by the DOC in

506 EC Measures Concerning Meat and Meat Products , WT/DS26/AB/R, adopted 13 February 1998,
para. 98.
507 62 Fed. Reg. 39809 (24 July 1997), at 39818.
508 62 Fed. Reg. 39809 (24 July 1997), at 39818.

the Final Results Third Review . However, Korea has failed to challenge the DOC's finding of
"serious questions", and has failed to identify anything in the record to indicate that, in light of such
"serious questions", an unbiased and objective investigating authority could not properly have
considered that the LGS cost data for the second half of 1996 did not "reasonably reflect the costs
associated with the production and sale" of DRAMs. Korea merely states that the DOC's "failure to
treat properly Respondents' actual cost and price data … violates Article 2.2.1.1".
509 In failing to
advance anything beyond conclusory arguments in support of its claim that the DOC should not have
rejected the LGS cost data for the second half of 1996, we consider that Korea has failed to establish a
prima facie case that an objective and impartial investigating authority could not properly have found
that the LGS cost data for the second half of 1996 did not "reasonably reflect the costs associated with
the production and sale" of DRAMs. Accordingly, we must reject Korea's claim that the United
States violated Article 2.2.1.1 of the AD Agreement by rejecting the LGS cost data for the second half
of 1996.
G. A
RTICLE 6.6 OF THE AD AGREEMENT
6.74 Korea submits that, in making the alleged errors in its flawed analysis, the DOC infringed
Article 6.6 of the AD Agreement because "it failed to satisfy itself as to the accuracy of data supplied
by the Petitioner", 510 and uncritically accepted and relied on the petitioner's data without taking any
action to confirm that it was accurate. It appears that Korea's claims target principally the DOC's
treatment of data supplied by the petitioner, and not data obtained from other sources.511 In particular,
Korea argues that in analyzing whether respondents may have dumped in 1996, and whether
respondents could remain competitive without dumping, the DOC relied on unverified data from
petitioner Micron.
6.75 Article 6.6 provides:
"Except in circumstances provided for in paragraph 8 [facts available], the authorities
shall during the course of an investigation satisfy themselves as to the accuracy of the
information supplied by interested parties upon which their findings are based."
6.76 With reference to Articles 6.6, 17.5(ii) and 17.6(i) of the AD Agreement, we must determine
whether, on the basis of record evidence before the DOC, an unbiased and objective investigating
authority could properly have been satisfied as to the accuracy of the information on which the DOC
based its findings of (a) whether respondents had dumped in 1996, and (b) whether respondents could
remain competitive without dumping.
1. Whether respondents had dumped during 1996
6.77 Korea asserts that the United States violated Article 6.6 of the AD Agreement because, in
determining whether the respondents had dumped
512 during 1996, the DOC relied on unverified news
articles and research reports regarding the state of the industry, including spot market prices, that had
been provided by the petitioner.

509 See para. 4.397, supra.
510 See para. 4.388, supra.
511 This is confirmed by para. (g) of Korea's request for establishment, where Korea asserts that the
Final Results Third Review were "based on unverified information from the petitioning company"
(WT/DS99/2).
512 A careful reading of the Final Results Third Review reveals that the DOC did not find that
respondents had "dumped" during 1996. The DOC only found that respondents "may have made U.S. sales
below COP [cost of production] during 1996", and that "the existence of below-cost sales during May and June
of 1996 suggests that the number of below-cost sales increased following the end of the third review period" (62
Fed. Reg. 39809 (24 July 1997), at 39817). A finding of sales below-cost is not equivalent to a finding of
dumping within the meaning of Article 2.

6.78 In essence, we understand Korea to argue that Members cannot discharge their Article 6.6
obligation to "satisfy themselves as to the accuracy of the information supplied by interested parties
upon which their findings are based" unless they verify the accuracy of that information. However,
the text of Article 6.6 does not explicitly require verification of all information to be relied on.
Indeed, the term "verify" only arises in Article 6.7 of the AD Agreement. Article 6.6 simply requires
Members to "satisfy themselves as to the accuracy of the information". In our view, Members could
"satisfy themselves as to the accuracy of the in formation" in a number of ways without proceeding to
some type of formal verification, including for example reliance on the reputation of the original
source of the information. Indeed, we consider that anti-dumping investigations would become totally
unmanageable if investigating authorities were requ ired to actually verify the accuracy of all
information relied on.
513
6.79 The United States asserts that information submitted by interested parties "included
independent market analysts’ reports from such reputable brokerage houses as Goldman Sachs,
Merrill Lynch, Lehman Brothers, and ABN Amro Ho are Govett; business and market news reporting
by well-known news organizations such as the Wa ll Street Journal, New York Times, Financial
Times, Reuters, Korea Herald, and Nikkei; and re ports from various trade journals" (footnote
omitted).514 The United States also notes that the respondents and their customers submitted data on
"average U.S. prices reported by Dataquest and the American IC Exchange, studies by independent
analysts and numerous newspaper and magazine articles". 515 The United States argues that the DOC
satisfied itself as to the accuracy of information submitted by interested parties, and refers to specific
examples of how the DOC "applied its considerable experience in market analysis and considered the
source of the information, its internal logic, and it s consistency with other information in determining
[the] accuracy and usefulness" of certain news re ports presented by the respondents and brokerage
house reports presented by the petitioner.516 Korea has failed to identify anything in the record (other
than the fact that the information was not verified) to indicate that an unbiased and objective
investigating authority could not properly have been satisfied as to the accuracy of this information.
6.80 We recall that the text of Article 6.6 does not support Korea's argument that it is perforce
violated in all cases where a Member fails to verify the accuracy of all information relied on. In the
absence of additional argumentation from Korea demonstrating that an unbiased and objective
investigating authority could not properly have been satisfied as to the accuracy of the information
relied on by the DOC in determining whether respondents had dumped during 1996, we find that
Korea has failed to establish a prima facie case that the United States violated Article 6.6 of the AD
Agreement in determining whether respondents had dumped during 1996.
2. Whether respondents could remain competitive without dumping
6.81 We consider that Korea's claim concerning the use of unverified data regarding the
competitiveness of respondents should be rejected for two reasons. First, Korea fails to identify
which "unverified data from Micron" is in issue.
6.82 Second, Korea's claim again assumes that Article 6.6 of the AD Agreement requires Members
to verify the accuracy of information on which findings are based. However, we recall that failure to
verify the accuracy of information does not necessarily constitute a violation of Article 6.6. In the
absence of additional argumentation (i.e., other than the failure to verify) from Korea indicating that
an objective and unbiased investigating authority could not properly have been satisfied as to the
accuracy of information relied on by the DOC in determining whether respondents could remain

513 For example, we query whether investigating authorities should be required to verify import
statistics from a different government office. We also query whether investigating authorities should be
required to verify "official" exchange rates obtained from a central bank.
514 See para. 4.436, supra.
515 See para. 4.436, supra.
516 See para. 4.438, supra.

competitive without dumping, we find that Korea has failed to establish a prima facie case that the
United States violated Article 6.6 with regard to the DOC's findings as to whether respondents could
remain competitive without dumping.
H. ARTICLE 5.8 OF THE AD AGREEMENT
6.83 Korea claims that the United States violates Article 5.8 by setting the de minimis dumping
margin threshold for Article 9.3 duty assessment proc edures at 0.5%, instead of the 2% standard set
forth in Article 5.8. 517 Korea argues that "[t]he obligation of Article 5.8 applies to 'cases', including
[Article 9.3] reviews as well as investigations."518
6.84 The text of Article 5.8 reads in relevant part:
"An application under paragraph 1 shall be rejected and an investigation shall be
terminated promptly as soon as the authorities concerned are satisfied that there is not
sufficient evidence of either dumping or of injury to justify proceeding with the case.
There shall be immediate termination in cases where the authorities determine that the
margin of dumping is de minimis, or that the volume of dumped imports, actual or
potential, or the injury, is negligible. The margin of dumping shall be considered to be
de minimis if this margin is less than 2 per cent, expressed as a percentage of the export
price. … "
6.85 Essentially, the parties disagree as to whether the second sentence (and therefore the de
minimis standard contained in the third sentence) of Article 5.8 applies to both anti-dumping
investigations and Article 9.3 duty assessment procedures (referred to in US parlance as
"administrative reviews"), or only to anti-dumping investigations.
6.86 In our view, the scope of the obligation in the second sentence of Article 5.8 is defined by the
term "cases". However, the ordinary meaning of that term does not clarify whether it refers to both
anti-dumping investigations and Article 9.3 duty assessment procedures, or only to the former. To
resolve this matter, therefore, we must consider the following context of Article 5.8, second sentence.
6.87 First, the term "case" is used in the first sentence of Article 5.8. The first sentence is
concerned explicitly and exclusively with the circumstances in which an "application" ("under
[Article 5,] paragraph 1") shall be rejected and an "investigation" terminated as a result of insufficient
evidence to justify proceeding with the "case". As the treatment of the "application" and conduct of
the "investigation" is dependent on the sufficiency of evidence concerning the "case", we consider
that the term "case" in the first sentence must at least encompass the notions of "application" and
"investigation". In our view, it would meaningless for the term "case" in the first sentence to also
encompass the concept of an Article 9.3 duty asse ssment procedure, since we fail to see how the
sufficiency of evidence concerning a subsequent duty assessment could be relevant to the treatment of
an "application" or the conduct of an "investigation", both of which precede the Article 9.3 duty
assessment procedure.
519 As we consider that the term "case" in the first sentence of Article 5.8 does
not include the concept of "duty assessment", we see no reason to adopt a different approach to the
term "cases" in the second sentence of that provision.
6.88 Second, we consider that note 22 of the AD Agreement effectively provides that a finding in a
US duty assessment procedure that no duty is to be levied "shall not by itself require the authorities to

517 The Panel notes that the relevant provision is set forth in section 351.106(c) of the DOC regulations.
518 See para. 4.628, supra.
519 In this regard, we note that Korea has not argued before us that an Article 9.3 duty assessment
procedure should be included within the notion of "investigation" for the purpose of Article 5.8. In the context
of Article 5 of the AD Agreement, it is clear to us that the term "investigation" means the investigative phase
leading up to the final determination of the investigating authority.

terminate the definitive duty." According to note 22, therefore, a finding in an Article 9.3 duty
assessment procedure of a zero percent margin of dumping, which is de minimis under both the US
0.5 percent standard and the 2 percent standard advocated by Korea on the basis of Article 5.8, shall
not by itself lead to termination of the duty. Nevertheless, by arguing that Article 5.8, including the
second sentence thereof, applies in the context of Article 9.3 duty assessments, Korea is effectively
arguing that a zero percent, i.e., de minimis, margin of dumping shall lead to "immediate termination"
of the duty. Thus, to the extent that Korea's interpretation of Article 5.8, second sentence, requires
"immediate termination" of the duty in circumstances where termination "shall not" be required by
note 22 of the AD Agreement, Korea's interpretation renders note 22 meaningless.
520
6.89 For these reasons, we conclude that Article 5.8, second sentence, does not apply in the context
of Article 9.3 duty assessment procedures. As Article 5.8, second sentence, does not require
Members to apply a de minimis test in Article 9.3 duty assessment procedures, it certainly cannot
require Members to apply a particular de minimis standard in such procedures.
6.90 Korea argues that there is "no logical reason why the de minimis level during the [Article
9.3.1] review stage of a proceeding should be differen t than at the investigation stage. That which is
the legal equivalent of a zero margin for purposes of determining whether to impose an anti-dumping
duty is also the legal equivalent of zero for collecting anti-dumping duties."521 As explained above, we
consider that the text of Article 5.8, when read in its context, does not require that a Member apply the
Article 5.8 de minimis test in an Article 9.3 duty assessment procedure. In any event, there are
possible logical explanations for applying different de minimis standards in investigations and Article
9.3 duty assessment procedures. Article 5.8 requires the termination of investigations in cases where
the margin of dumping is de minimis . Thus, in the context of Article 5.8, the function of the de
minimis test is to determine whether or not an exporter is subject to an anti-dumping order. In the
context of Article 9.3 duty assessment procedures, however, the function of any de minimis test
applied by Members is to determine whether or not an exporter should pay a duty. A de minimis test
in the context of an Article 9.3 duty assessment procedure will not remove an exporter from the scope
of the order. Thus, the implications of the de minimis test required by Article 5.8, and any de minimis
test that Members choose to apply in Article 9.3 duty assessment procedures, differ significantly.
Accordingly, we are not convinced that Korea's policy argument requires us to abandon our
conclusion that the text of Article 5.8, when read in its context, does not require that a Member apply
the Article 5.8 de minimis test in an Article 9.3 duty assessment procedure.
6.91 In light of our conclusion that Article 5.8, second sentence, does not apply in the context of
Article 9.3 duty assessment procedures, we reject Korea's claim that the United States violates Article
5.8 by applying a 0.5 percent de minimis standard in the context of Article 9.3 duty assessment
procedures.
I. KOREA'S CLAIMS UNDER GATT 1994
6.92 We note that Korea has made a number of claims concerning the consistency of the
application of section 353.25(a)(2)(ii) and (iii) of the DOC regulations, and the consistency of the
Final Results Third Review , with Articles I and X of the GATT 1994. We note that a panel "need
only address those claims which must be addressed in order to resolve the matter in issue in the
dispute."522 Since we have already found that section 353.25(a)(2)(ii) of the DOC regulations, and the
Final Results Third Review based on that provision, are inconsistent with Article 11.2 of the AD

520 As stated by the Appellate Body in Gasoline, "[a]n interpreter is not free to adopt a reading that
would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility" ( Gasoline,
WT/DS2/AB/R, adopted 20 May 1996, p. 23).
521 See para. 4.624, supra.
522 United States - Measures Affecting Imports of Woven Wool Shirts and Blouses from India ,
WT/DS33/AB/R, adopted 23 May 1997, page 19.

Agreement, we do not consider it necessary to examine Korea's claims under Articles I and X of the
GATT 1994.
VII. CONCLUSIONS AND RECOMMENDATION
7.1 We conclude that, for the reasons outlined in this report, section 353.25(a)(2)(ii) of the DOC
regulations, and the Final Results Third Review based on that provision, are inconsistent with the US
obligations under Article 11.2 of the AD Agreement.
7.2 The Panel recommends that the Dispute Settlement Body request the United States to bring
section 353.25(a)(2)(ii) of the DOC regulations, and the Final Results Third Review , into conformity
with its obligations under Article 11.2 of the AD Agreement.
7.3 Korea has requested us to suggest that the United States (i) revoke DRAMs from Korea and
(ii) eliminate the section 353.25(a)(2)(ii) "not likely" criterion. In this regard we note Article 19.1 of
the DSU, which provides in relevant part that:
"In addition to its recommendations, the panel or Appellate Body may suggest ways in
which the Member concerned could implement the recommendations".
7.4 By virtue of Article 19.1 of the DSU, therefore, the Panel has discretion to suggest ways in
which it believes the United States could appropriately implement the above recommendation.
However, in light of the range of possible ways in which we believe the United States could
appropriately implement our recommendation, we decline to make any suggestion in the present case.