EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Document: Panel Report
Date: 16 August 2010
Document codes: WT/DS375/R; WT/DS376/R; WT/DS377/R
Complainant: Taiwan
Respondent: EU
Third parties: Australia, Brazil, China, Costa Rica, Hong Kong, India, Japan, South Korea, Philippines, Singapore, Thailand, Turkey, U.S., Vietnam
Dispute stage: Panel
Agreements cited: Art. II:1, X:1, X:2, XXIII  GATT 1994

EUROPEAN COMMUNITIES AND ITS MEMBER STATES –
TARIFF TREATMENT OF CERTAIN INFORMATION
TECHNOLOGY PRODUCTS

Reports of the Panel

Note by the Secretariat:

In the disputes WT/DS375, WT/DS376, and WT/DS377, as explained in paragraph 2.4 of the Panel's Findings,
the Panel decided to issue its Reports in the form of a single document constituting three Panel Reports, each of
the Reports relating to each one of th e three complainants in this disput e. The document comprises a common
cover page, a common Descriptive Part and a common set of Findings in relation to the complainants' claims
that the Panel decided to address. This document also contains Conclusions and Recommendations that, unlike
the Descriptive Part and the Findings, are particularised for each of the complainants. Specifically, in the
Conclusions and Recommendations, separate document numbers/symbols have been used for each of the
complainants (WT/DS375 for the United States, WT/DS376 for Japan and WT/DS377 for Chinese Taipei).

I. INTRODUCTION
A. C
OMPLAINTS OF THE UNITED STATES, JAPAN AND CHINESE TAIPEI
1.1 On 28 May 2008, the United States and Japan, and on 12 June 2008, the Separate Customs
Territory of Taiwan, Penghu, Kinmen and Matsu ("Chinese Taipei"), independently requested
consultations with the European Communities 1 and its member States ("European Communities") 2
pursuant to Article 4 of the DSU and Article XX II:1 of the GATT 1994 regarding the tariff treatment
that the European Communities accords to certain information technology products.3
1.2 The United States, Japan and Chinese Taipei requ ested, pursuant to paragraph 11 of Article 4
of the DSU, to join in each other's consultations. 4 China, the Philippines, Singapore and Thailand
requested to join in the consultations requested by the United States and Japan, and China also
requested to join in the consulta tions requested by Chinese Taipei. 5 The European Communities did
not accept these requests, with the exception of the re quest of China to join in the consultations
requested by Chinese Taipei.6
1.3 Separate consultations were held in Gene va between each complaining party and the
European Communities. The Eur opean Communities and the United St ates held their consultations
on 25 and 26 June 2008 and 14 and 15 July 2008. The European Communities and Japan held their
consultations on 26 June 2008 and 16 and 17 July 2008. The European Communities and Chinese
Taipei held their consultations on 3, 18 and 25 Ju ly 2008. None of these consultations led to a
mutually satisfactory resolution of the dispute.
1.4 On 18 August 2008, the United States, Japan and Chinese Taipei, jointly and severally,
requested the establishment of a panel pursuant to Article 6 of the DSU, with standard terms of
reference.
7 At its meeting on 29 August 2008, the Dis pute Settlement Body ("DSB") deferred the
establishment of a panel following opposition by the European Communities.8
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL
1.5 At its meeting on 23 September 2008, the DSB established a single Panel pursuant to the joint
panel request of the United States, Japan and Chinese Taipei in document WT/DS375/8, WT/DS376/8
and WT/DS377/6 in accordance with Article 6 of the DSU.9

1 On 1 December 2009, the Treaty of Lisbon amending the Treaty on European Union and the Treaty
establishing the European Community (done at Lisbon, 13 December 2007) entered into force. On
29 November 2009, the WTO received a Verbal Note (WT/L/779) from the Council of the European Union and
the Commission of the European Communities stating that, by virtue of the Treaty of Lisbon , as of
1 December 2009, the European Union replaces and succeeds the European Community.
2 The use of the term "European Communities" is without prejudice to the European Communities'
position that its member States are not responding partie s in this dispute (see below paragraph 1.10). This
matter is addressed below, as appropriate, in the Findings Section of these Reports.
3 WT/DS375/1, WT/DS376/1 and WT/DS377/1, respectively.
4 See WT/DS375/3 and 6; WT/DS376/3 and 6; and WT/DS377/2 and 4.
5 See WT/DS375/2, 4, 5 and 7; WT/DS376/2, 4, 5 and 7; and WT/DS377/3.
6 See WT/DS377/5.
7 The joint panel request was circulated on 19 August 2008 as a single document (WT/DS375/8,
WT/DS376/8 and WT/DS377/6). The joint panel request is reproduced in Annex [G-1] to these Reports.
8 WT/DSB/M/255, para. 69.
9 WT/DSB/M/256, para. 52.

1.6 At that meeting, the parties to the dispute agre ed that the Panel should have standard terms of
reference. The Panel's terms of reference are, therefore, as follows:
"To examine, in the light of the relevant provisions in the covered agreements cited
by the parties to the dispute, the matter referred to the DSB by the United States,
Japan and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu in
document WT/DS375/8, WT/DS376/8 and WT/D S377/6, and to make such findings
as will assist the DSB in making the recommendations or in giving the rulings
provided for in those agreements."
1.7 On 12 January 2009, the United States, Japan and Chinese Taipei requested the Director-
General to determine the composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU.
1.8 On 22 January 2009, the Director-General accordingly composed the Panel as follows:
10
 Chairman: Mr Wilhelm Meier

 Members: Mr David Evans
 Ms Valerie Hughes

1.9 Australia; Brazil; China; Costa Rica; Hong K ong, China; India; Japan (in respect of the
United States' and Chinese Taipei's complaints); Kor ea; the Philippines; Singapore; Chinese Taipei
(in respect of the United States' and Japan's compla ints); Thailand; Turkey; the United States (in
respect of Japan's and Chinese Taipei's complaints); and Viet Nam reserved their rights to participate
in the Panel proceedings as third parties.
11
C. PANEL PROCEEDINGS
1.10 On 4 February 2009, the parties and the Panel held their organizational meeting. In that
meeting, as well as in oral and written communicati ons thereafter, the European Communities raised
concerns on the status of the complaining parties as th ird parties to this dispute and also objected to
the inclusion of its member States as responding par ties of this dispute. The Panel will address these
matters below, as appropriate, in the Findings Section of these Reports.
1.11 The Panel held its first substantive meeting with the parties on 12 and 14 May 2009. The
session with the third parties took place on 13 May 2009. The Panel held its second substantive
meeting with the parties on 9 July 2009. Upon reque st by the complaining parties, and in accordance
with the procedures adopted by the Panel after co nsulting with the parties, both the first and the
second meetings were opened to the public. 12 A real time closed-circuit television broadcast of the
Panel's open sessions was presented in a separate room of the WTO building in Geneva to allow the
public to observe the proceedings.
1.12 On 25 August 2009, the Panel issued the draft descriptive part of its Panel Reports. On
8 September 2009, the Panel received comments from the parties on the draft descriptive part. The

10 WT/DS375/9, WT/DS376/9 and WT/DS377/7 of 26 January 2009.
11 On 23 January 2009 the United States, Japan and Chinese Taipei notified their interest to participate
as third parties.
12 "Procedures for open hearings, first and second substantive meetings of the Panel" of 29 April 2009,
adopted under paragraph 2 of the "Working Procedures for the Panel" of 10 February 2009.

Panel issued its Interim Reports to the parties on 11 June 2010. The Panel issued its Final Reports to
the parties on 23 July 2010.
II. FACTUAL ASPECTS
A. M
EASURES AT ISSUE
2.1 The complaining parties claim that the Europ ean Communities is required to accord duty-free
tariff treatment to certain inform ation technology products. These products 13 are described by the
complaining parties as certain "flat panel disp lay devices" ("FPDs"), "set-top boxes which have a
communication function" ("STBCs") and "m ultifunctional digital machines" ("MFMs") 14. The
complaining parties claim that the European Communities is obliged to grant such duty-free treatment
under the European Communities Schedule of Concessions to the GATT 1994 ("the EC Schedule")
pursuant to modifications therein to reflect the commitments it has made under the Ministerial
Declaration on Trade in In formation Technology Products ("Information Technology Agreement" or
"ITA").
15
2.2 The complaining parties have identified the following as the measures at issue in this dispute:
1. FPDs
(a) Council Regulation (EC) No. 493/2005 of 16 March 2005;
(b) Commission Regulation (EC) No. 634/2005 of 26 April 2005;
(c) Commission Regulation (EC) No. 2171/2005 of 23 December 2005;
(d) Council Regulation (EEC) No. 2658/87 of 23 July 1987 on the tariff and statistical
nomenclature and on the Common Customs Tariff, including all annexes thereto, as
amended;
(e) Explanatory Notes to the Combined Nome nclature of the European Communities,
2008/C 133/01 (May 30 2008), alone or in combination with Council Regulation
(EEC) No. 2658/87 of 23 July 1987; and
(f) Any amendments or extensions and any related or implementing measures.

13 The reference to "flat panel display devices", "s et-top boxes which have a communication function"
and "multifunctional digital machines", and their respective acronyms "FPDs", STBCs" and "MFMs", is for ease
of reference only and will be used in these Reports without prejudice to the positions taken by the parties on the
description and designation of the products at issue in this dispute.
14 In footnote 15 of their joint panel request, the complaining parties explain that they use this term to
refer to "machines which perform two or more of the func tions of printing, copying, or facsimile transmission,
capable of connecting to an automatic data processing machine or to a network (including devices commercially
known as MFPs (multifunctional printers), other 'input or output units' of 'automatic data processing machines',
and facsimile machines)."
15 Ministerial Declaration on Trade in Information Technology Products , 13 December 1996
(WT/MIN(96)/16). The full text of the ITA is also reproduced in Annex G to these Reports.

2. STBCs
(a) Council Regulation (EEC) No. 2658/87 of 23 July 1987 on the tariff and statistical
nomenclature and on the Common Customs Tariff, including all annexes thereto, as
amended;
(b) Explanatory Notes to the Combined Nome nclature of the European Communities,
2008/C 112/03 (7 May 2008)
16, alone or in combination with Council Regulation
(EEC) No. 2658/87 of 23 July 1987; and
(c) Any amendments or extensions and any related or implementing measures.
3. MFMs
(a) Commission Regulation (EC) No. 517/1999 of 9 March 1999;
(b) Report of the Conclusions of the 360 th meeting of the Customs Code Committee,
Tariff and Statistical Nomenclature Section, TAXUD/555/2005-EN (March 2005);
(c) Commission Regulation (EC) No. 400/2006 of 8 March 2006;
(d) Council Regulation (EEC) No. 2658/87 of 23 July 1987 on the tariff and statistical
nomenclature and on the Common Customs Tariff, including all annexes thereto, as
amended (including amendments adop ted pursuant to Commission Regulation
No. 1214/2007 of 20 September 2007); and
(e) Any amendments or extensions and any related or implementing measures.
B. REQUEST FOR INFORMATION FROM THE WORLD CUSTOMS ORGANIZATION
2.3 On 8 September 2009, the Panel, pursuant to Article 13.1 of the DSU, sent a letter to the
World Customs Organization ("WCO") Secretariat re questing its assistance in certain issues relating
to the Harmonized System ("HS"). The WCO replied to the Panel's letter on 29 September 2009. On
14 October 2009, the parties submitted their comments on the WCO's reply.
C. REQUEST FOR SEPARATE REPORTS
2.4 At the organizational meeting of 4 February 2009, the European Communities requested the
Panel to issue separate Panel Reports. The complain ing parties did not object to such request at that
meeting. In their comments to the draft descrip tive part of these Reports, the complaining parties
requested that, if the Reports are issued as a si ngle document, the conclusions and recommendations
for each of the disputes be set out on separate pages, with each page bearing only the Report symbol
relating to that dispute. The Panel findings are th erefore issued in the form of a single document
containing three separate Reports. The Panel's conclusions and recommendations for each of the

16 Reference has also been made to certain actions of the Customs Code Committee with respect to
amendments to these Explanatory Notes (footnote 11 and page 5 of the joint panel request).

disputes will be set out on separate pages, with each page bearing only the Report symbol relating to
that dispute.
17
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
A. UNITED STATES, JAPAN AND CHINESE TAIPEI
3.1 In light of the measures cited above, the complaining parties request the Panel to find as
follows:
1. FPDs
3.2 As a result of the measures cited above, the Un ited States, Japan and Chinese Taipei request
the Panel to find that the European Communities ha s acted inconsistently with Articles II:1(a) and
II:1(b) of the GATT 1994 by according certain FPDs treatment less favourable than that provided in
the EC Schedule, and by imposing on these products ordinary customs duties, or other duties and
charges, in excess of those set forth in the EC Schedule.
2. STBCs
3.3 As a result of the measures cited above, the Un ited States, Japan and Chinese Taipei request
the Panel to find that the European Communities ha s acted inconsistently with Articles II:1(a) and
II:1(b) of the GATT 1994 by according STBCs treatment less favourable than that provided in the EC
Schedule, and by imposing on these products ordinary customs duties, or other duties and charges, in
excess of those set forth in the EC Schedule.
3.4 The United States and Chinese Taipei further re quest the Panel to find that the European
Communities, with respect to STBCs, has acted in consistently with Articles X:1 and X:2 of the
GATT 1994 by not promptly publishing the Explanatory Notes identified above in respect to these
products and by applying duties to these products us ing the approach specified in these Explanatory
Notes prior to the date of their publication.
3. MFMs
3.5 As a result of the measures cited above, the Un ited States, Japan and Chinese Taipei request
the Panel to find that the European Communities ha s acted inconsistently with Articles II:1(a) and
II:1(b) of the GATT 1994 by according certain MFMs treatment less favourable than that provided in
the EC Schedule, and by imposing on these products ordinary customs duties, or other duties and
charges, in excess of those set forth in the EC Schedule.
B. EUROPEAN COMMUNITIES
3.6 The European Communities requests that the Panel reject all the claims raised by the United
States, Japan and Chinese Taipei.

17 The Panel will therefore follow the similar approach taken by the panel in US – Steel Safeguards (see
cover note to that Report and para. 10.725) See also the Appellate Body Report on
EC - Bananas (21.5 - Ecuador II) and China – Auto Parts.

IV. ARGUMENTS OF THE PARTIES
4.1 The arguments of the parties, as set fort h in their executive su mmaries of their written
submissions and oral statements to the Panel, are attached to these Reports as Annexes A, B, C and D
(see List of Annexes, pages ii and iii). The replies of the parties to questions and the parties'
comments on each other's replies to questions are not attached to these Reports as annexes. They are,
however, reflected in the findings section of these Reports where relevant.
 18
V. ARGUMENTS OF THE THIRD PARTIES
5.1 The arguments of the third parties, as set fo rth in their executive summaries of their written
submissions and oral statements to the Panel, are at tached to these Reports as Annexe E (see List of
Annexes, page iii).19 The replies of the third parties to questions are not attached to these Reports as
annexes. They are however reflected in the findings section of these Reports where relevant.20
VI. INTERIM REVIEW
6.1 Pursuant to Article 15.3 of the DSU, the findi ngs of the final panel report must include a
discussion of the arguments made by the parties at the interim review stage. This Section of the Panel
Report provides such a discussion. As Article 15.3 ma kes clear, this Section forms part of the Panel's
findings.
A. BACKGROUND
6.2 The United States, Japan, Chinese Taipei and the European Communities separately requested
an interim review by the Panel of certain aspects of the Interim Report issued to the parties on 11 June
2010.21 None of the parties requested an interim revi ew meeting. However, the parties made use of
the opportunity to submit further written comments on each others' requests. 22 On 23 July 2010, the
Panel issued its Final Report to the parties on a confidential basis.
B. PARTIES' REQUESTS FOR CHANGES TO THE INTERIM REPORTS
6.3 Below, the Panel will address the parties' requests for changes to the Interim Report. Unless
otherwise indicated, the references below are to paragraph or footnote numbers appearing in the
Interim Report.
1. General Comments
(a) Comments by the Complainants
6.4 Japan requests the Panel to modify paragraph 7.91 to reflect its request that the Panel refrain
from exercising judicial economy with respect to its claims regarding Attachments A and B of the
ITA, and not just those pertaining to Attachment A.

18 As established by paragraph 18 of the "Working Procedures for the Panel" of 10 February 2009.
19 Australia; Brazil; Hong Kong, China; India; Japan; Chinese Taipei; Thailand; the United States; and
Viet Nam did not make written submissions. Brazil; Japan; Korea; Chinese Taipei; the United States; and Viet
Nam did not make oral statements.
20 As established by paragraph 18 of the "Working Procedures for the Panel" of 10 February 2009.
21 Letters of the parties of 25 June 2010.
22 Letters of the parties of 9 July 2010.

6.5 None of the parties have commented on Japan's request.
6.6 The Panel has modified paragraph 7.91 to reflect Japan's request to refrain from exercising
judicial economy with respect to its claims concerning Attachments A and B of the ITA.
6.7 The complainants request the Panel to modify paragr aphs 7.94, 7.119, 7.291, 7.599, 7.603
and other relevant paragraphs thro ughout the report to use the term "tariff item numbers" rather than
"CN codes", where the terms are used to refer to eight-digit numbers appearing in the EC Schedule.
6.8 The European Communities has not commented on the complainants' request.
6.9 The Panel has replaced the term "CN code" with the term "tariff item number" where
appropriate.
6.10 The complainants ask that the panel modify paragraphs 7.82 - 7.90 7.290, 7.817 and 8.2 to
reflect that EC member States have acted inconsiste ntly with their obligations through the application
of duties to products. They assert that the Panel has declined to consider certain applications by EC
member States customs officials on grounds that the complainants limited thei r claims to "as such"
challenges, and by asserting that reaching findings with respect to member States would not be
necessary to secure a positive resolutio n to the dispute in view of " certain assurances" made by the
European Communities. Japan and the United St ates argue, however, that failing to consider
applications by member States may fail to provide a positive resolution to the dispute. This would
result, they argue, if member States were to con tinue to impose duties on the products at issue. The
United States and Japan argue that the claims are within the Panel's terms of reference. Moreover,
they note that EC member States are WTO Members in their own right with individual obligations,
and that the internal relationship between the European Communities and its member States cannot
diminish the rights of other WTO Members to exercise their rights under the WTO Agreements.
6.11 The European Communities requests the Panel to reject th e complainants' request. It argues
that the complainants may not challenge the "app lication" of duties by EC member States to the
products at issue, in particular, in light of their st atements to the Panel during the proceedings that the
complainants have not challenged the measures on an "as applied" basis. The European Communities
submits that it is "exclusively competent to deci de the duty applicable to each product at issue",
whereas the "application" of such duty is the so le responsibility of the EC member State customs
authorities. In its view, the application of duties to products at issue is the same as the "application" of
the EC measures at issue. The European Communities asserts that the complainants have not provided
evidence of the application of duties to all products concerned by each of the 27 EC member States
sufficient to support their claim regarding the app lication of duties, nor does it consider that the
complainants may make their claim by referring so lely to the legal effects of the EC measures.
23
Finally, the European Communities challenges the view of the complainants that the Panel's failure to
reach findings with respect to EC member States would compromise the ability of the complainants to
achieve a positive resolution to the dispute. The European Communities contends that the
complainants' position assumes that EC member State customs authorities would disregard EC law if
the European Communities modified through amendment or repeal the measures at issue in order to
implement the Panel report. As it argued in its submissions, the European Communities submits that it

23 The European Communities further argues that Japan and Chinese Taipei may not sustain their
claims based on their reliance on evidence submitted by the United States only (as provided in footnote 1 of the
United States' request for review of precise aspects of the Interim Report). At most, the European Communities
submits that evidence provided by the United States could support its own claim, and not any by Japan or
Chinese Taipei.

has exclusive competence to determine the applicab le duty rate for the products at issue, and that
member States are bound to apply any new applicable duty rate.
6.12 The Panel observes that, despite the complainants' identification in their joint Panel request of
all EC member States as respondents in this disput e, the complainants have directed their claims
against a set of EC measures. While the co mplainants have submitted evidence of the application of
duties by certain EC member State customs authoriti es in particular instances, we recall that the
complainants have confirmed to the Panel that they did not seek to challenge these particular
applications, but rather submitted such evidence in support of their "as such" claims against the EC
measures. The Panel also observes that the evidence provided by the complainants does not reflect all
customs determinations by all EC member States . For these reasons, the Panel considers that it has
made the appropriate findings in th is regard and hence, we have not made the requested changes. We
have nevertheless adjusted paragraph 8.2 to clarify our position in this regard.
6.13 The complainants request the Panel to designate the argument set forth in the penultimate
sentence in paragraph 7.95 regarding whether or not the complainants have made a "prima facie" case
as that advanced by the Europ ean Communities. They contend th at the Panel has not necessarily
adopted the European Communities' characterization in its reports and the paragraph should be clearer
to that effect.
6.14 The European Communities has not commented on the complainants' request.
6.15 The Panel has inserted the terms "according to the European Communities", in the
penultimate sentence, for purposes of clarification, specifying that the arguments pertain exclusively
to the European Communities.
6.16 The complainants request that the final clause in the last sentence of paragraph 7.114 be
deleted, arguing that the Report considers the comp lainants' characterization of the measures for each
of the claims, and not only certain claims "in particular".
6.17 The European Communities has not commented on the complainants' request.
6.18 The Panel has deleted the clause; it does not consider that this change affects the substance of
the Reports.
6.19 The complainants request the Panel to refer in para graphs 7.119 and 7.315 to refer to a
separate section of the Reports to reflect that th e complainants have presented different views on
whether the concessions based on Attachment B of th e ITA are located exclusively in the Annex to
the EC Schedule or whether they are incorporated by reference. In particular, the complainants
request the Panel to include the following foot notes: "Regarding the complainants' views on the
location of the concession, see paras. 7.213-7.220".
6.20
The European Communities has not commented on the complainants' request.
6.21 The Panel has inserted the footnote to clarify that the parties hold different views on the
location of the concessions.
6.22 The complainants request the Panel to reconsider the re levant analysis in paragraph 7.137 in
determining whether the 2009 CN is within its terms of reference. In particular, the complainants
argue that the approach set forth in paragraphs 7.169-1.170 that was used to evaluate whether the
2007 and 2009 regulations are within its terms of re ference should also be relevant for evaluating the

2009 CN. The latter approach was discu ssed in the Appellate Body Report on Chile – Price Band
System.
6.23 The European Communities has not commented on the complainants' request.
6.24 The Panel has revised paragraph 7.137 to reflect the decision of the Appellate Body in C hile
– Price Band System , as discussed in paragraphs 7.175- 7.176 of the Report, for purposes of
completeness. The Panel has additionally harmon ized the section with the approach taken in
paragraphs 7.171-7.191.
6.25 The complainants request the Panel to revise the final sentence in paragraph 7.183 to read
"...we consider that a ruling that takes into cons ideration Council Regulation No. 179/2009 would aid
in the settlement of this dispute". They argue, in paragraphs 7.168-7.190, that the Panel does not need
to evaluate whether amendments to the duty susp ensions (in particular Council Regulations Nos.
301/2007 and 179/2009) are within the Panel's term s of reference, or whether it may rule on the
measures in the present dispute. The complainan ts argue that they included Council Regulation
493/2005 within the their joint Panel request due to th e reference that certain flat panel displays using
LCD technology that are "capable of reproducing vide o images from a source other than an automatic
data-processing machine" are not covered by the ITA. The complainants do not contest that the Panel
may consider whether it will address the argumen ts made by the European Communities and the
complainants in connection with these measures. In particular, the complainants recognize that the
Panel may consider whether the duty suspensions "c ure" the breach of Articles II:1(a) and II:1(b)
resulting from the imposition of duties on certain disp lays. However, the complainants contend that
the does not raise a question of the Panel's terms of reference. The complainants argue that the duty
suspension elements of the measures in question were not part of the complainants' claims, and thus
do not give rise to a terms of reference question.
6.26 The European Communities has not commented on the complainants' request.
6.27 The Panel notes that it has considered the dut y suspension as set forth under Council
Regulation 493/2005, and subsequently modified and extended under Coun cil Regulations Nos.
301/2007 and 179/2009, not only due to the complain ants' initial identification of Council Regulation
493/2005 as a measure at issue, but also in light of subsequent arguments made by both the European
Communities and the complainants in connection w ith these regulations. Moreover, we note that
Chinese Taipei and the European Communities ha ve acknowledged the more recent modification,
Council Regulation No. 179/2009, in the context of their arguments.
24 Chinese Taipei noted that it
considered that Council Regulations Nos. 301/ 2007 and 179/2009 have not changed the essential
nature of the original measure in dispute. 25 The Panel considers these measures to be relevant to its
analysis of the measures as issue, particularly in light of argumentation advanced by the parties to
this dispute. Having regard to the complainants' concern with the Panel's characterization of its
analysis, however, the Panel has revised language in the section heading and paragraphs 7.167-7.171
and 7.183 accordingly.
6.28 The complainants request the Panel to revise paragra ph 7.198 to provide as follows: "means
that the complainants have failed to satisfy the provisions of Article 6.2 ...".
6.29 The European Communities argues that this change is one of substance and should be
rejected.

24 See, for instance, European Communities' first written submission, para. 94.
25 Chinese Taipei's response to Panel question No. 18.

6.30 The Panel disagrees with the European Communities th at this change affects the substance of
the paragraph and agrees to make the change requested by the complainants.
6.31 The complainants request the Panel to revise paragraph 7.229 to provide as follows: "The
European Communities argues that CN codes 8528 51 00 and 8528 41 00 in the current CN are the
relevant provisions implementing obligations pursuant to the ITA...".
6.32 The European Communities argues that this change is one of substance and should be
rejected. The European Communities submits gene rally that the paragraph misrepresents the
arguments of the European Union, the last sente nce of the paragraph having been taken out of
context. Accordingly, the European Communities requ ests that the Panel review the paragraph in its
entirety.
6.33 The Panel has reviewed the paragraph in its entirety, which summarizes arguments appearing
in paragraphs 44-47 of the European Communities' second written submission. The Panel has made
minor editorial changes to paragraph 7.229 and sees no need for additional changes.
6.34 The complainants request the Panel to modify the first sentence of paragraph 7.234 as
follows, to reflect their arguments: "Based on the terms of the descriptions for these CN codes, it
appears evident that under the CN 'monitors of a kind solely or principally used in an automatic data-
processing system of heading 8471' are classifiable under duty free CN codes 8528 41 00 and 8528 51
00".
6.35 The European Communities has not commented on the complainants' request.
6.36 The Panel has made this editorial change, which does not alter the substance of the
paragraph.
(b) Comments by the European Communities
6.37 The European Communities requests the Panel to use the term "EC member States customs
authorities" in place of "EC member States" in paragraphs 7.141, 7.147 and 7.150 for accuracy.
6.38 The United States submits that the Panel uses the term "EC member States" correctly in the
context in which these terms appear, to refer to th e entities that have undertaken obligations pursuant
to the EC legal regime under di scussion. The United States assert s that the European Communities
has not explained why the references are incorrect ot her than to state that EC member State customs
authorities apply EC law. The United States argu es that the European Communities does not contend
that EC member State customs authorities are in fact authorities of the member State rather than of the
European Communities.
6.39 The Panel does not perceive a substantive distincti on between one term or the other in the
context of its Reports. We note, in addition, that the Panel used the term "EC member States" in
discussing their identification as respondents in the dis pute in paragraphs 7.82 - 7.90 of the report.
For these reasons, and for consistenc y, the Panel does not consider it necessary to adopt the proposed
changes of the European Communities.
6.40 The European Communities requests the Panel to refrain, in paragraphs 7.161, 7.267, 7.757,
7.1153, 8.4, 8.5, 8.14, 8.16, 8.17, 8.25, 8.27, 8.28 and 8.37, from making recommendations with
respect to point 4 in the annex to Commission Regulation No. 634/2005 and all of Commission
Regulation No. 2171/2005. The European Commun ities argues that these provisions have been

repealed by Commission Regulation No. 1179/2009 of 26 November 2009 (Articles 2 and 3 and
Annex II, point 46 and Annex III, point 28). Furtherm ore, it requests the Panel to refrain from making
recommendations with respect to CNEN 2008/C 133/ 01, because aspects thereof relevant to this
dispute have been deleted. In addition, the Eu ropean Communities requests the Panel to refrain from
making recommendations with respect to Commission Regulation No. 517/99 in its entirety and point
4 of the Annex to commission Regulation No. 400/2006, arguing that these provisions have been
repealed by Commission Regulation No. 1179 /2009 of 26 November 2009. The European
Communities refers to Attachments 1 and 2 to its Comments on the Interim Reports in these respects.
6.41 The European Communities additionally requests th at the following text be added at the end
of each of paragraphs 8.14, 8.25 and 8.37: "Since the European Union has confirmed that point 4 of
Commission Regulation No. 634/2005 has been de leted, Commission Regulation No. 2171/2005 has
been repealed and the relevant parts of CNEN 2008/C 133/01 have been deleted, the Panel does not
make any recommendations on these measures."
6.42 Additionally, in commenting on paragraph 7. 1153 of the Interim Reports, the European
Communities informs the Panel of the attachments to its comments on the Interim Reports. However,
Unlike with its comments with respect to other pa ragraphs of the Interim Reports, the European
Communities does not request any specific changes to paragraph 7.1153, or to the findings on the
consistency of the relevant measures with respect to the treatment of MFMs.
6.43 The complainants ask the Panel to decline the requ est by the European Communities to
modify its recommendations in the cited paragraphs and request the Panel to delete paragraph 7.161,
the final sentence of paragraph 7.267, paragraph 7. 1156 and paragraphs 8.14, 8.25 and 8.37. In this
last respect, the United States argues that paragraph 8.14 as written may make resolution of the
dispute more difficult by conditioning the recommendation and providing no mechanism for
determining which measures will be in force on the date of adoption of the reports. It asserts that the
scope of recommendations would be unclear.
6.44 The United States submits that the Interim Reports propose to make a conditional
recommendation on the basis of statements by th e European Communities that certain measures
would be repealed. The complainants argue that the European Communities did not provide evidence
confirming the repeal of these measures during th e Panel proceedings, and that introduction of
evidence at this stage of the proceedings is inappropriate.
26 Accordingly, they argue that there is not a
permissible basis for failing to make recommendations. They argue that a Panel is required to make
recommendations on measures that are within its te rms of reference once it has determined any WTO
inconsistency, finding support for this in Article 19.1 of the DSU and various Panel and Appellate
Body Reports, in particular in cases where the meas ure expired only after the panel was established.
As a factual matter, the United States and Chinese Taipei further argue that the introduction of
evidence of the repeal of the measures does not estab lish that the measures do not continue to have
legal effect, or that EC member States do not con tinue to apply duties to products subject to the
Panel's findings in contravention of their own WTO obligations and the repeal of the measures.
6.45 Moreover, the United States and Chinese Taipei recall their concern that, by declining to
make findings regarding EC member States, the Pa nel may have increased the risk that a positive

26 Chinese Taipei submits in addition, that the late introduction of evidence of the repeal of certain
measures runs contrary to paragraph 15 of the Panel's Working Procedures. This paragraph states that "the
parties shall submit all factual evidence to the Panel no later than during the first substantive meeting, except
with respect to factual ev idence necessary for purposes of rebuttals , answers to questions or comments on
answers provided by others. Exceptions to this procedure will be granted upon a showing of good cause."

resolution to the dispute will not be achieved. Sp ecifically, the United States is concerned that the
European Communities may not take steps beyond rep eal of certain measures, and thus fail to deal
with member States that continue to apply duties to the products despite such repeal.
6.46 Japan questions why the matter of the repeal wa s not reported to the Panel earlier and, like
the United States, observes that the interim review st age is not the appropriate stage to introduce new
evidence.
6.47 The Panel notes at the outset that the European Communities submitted on June 25, 2010
two documents (Attachments 1 and 2) attached to the European Communities' Comments on the
Interim Reports. The Panel had not seen these mate rials prior to their submission by the European
Communities. The European Communities argues th at these documents demonstrate that it has
deleted point 4 in the annex to regulation 634/200 5 and that regulation 2171/2005 has been entirely
repealed. The European Communities also argu es that the relevant parts of CNEN 2008/C 133/01
have been deleted. The European Communities requests that, on the basis of these documents, the
Panel refrain from making any recommendations in relation to those measures.
6.48 We note that the documents in Attachment 1 and 2 were published in November 2009, long
after the record had closed. At no time between November 2009 and the issuance of the Interim
Reports did the European Communities seek leave of th e Panel to provide this additional information.
Article 15.2 of the DSU, which provides for the Interim Review process, was considered by the
Appellate Body in EC – Sardines. It clarified that this provision do es not permit parties to "introduce
new evidence", and is availabe only "for the pane l to review precise aspects of the interim report".
27
Consistent with the Appellate Body's approach and in the interest of protecting the due process rights
of the complainants, who had no opportunity to make submissions for the record on the documents
provided, we decline to consider further the docum ents attached by the European Communities to its
request for interim review. The Panel also declines to make adjustments to the Interim Reports to
exclude the measures in question from the Panel's recommendation and to add text about the
European Communities' confirmation that certain m easures have been repeal ed, as requested by the
European Communities.
6.49 The Panel now turns to the issue raised by th e complainants in response to the European
Communities' request, namely whether the Panel may decline to make recommendations on those
measures once it has concluded that they are incons istent with the respondents' WTO obligations. The
complainants refer to Article 19.1 of the DSU, whic h provides that "[w]here a panel or the Appellate
Body concludes that a measure is inc onsistent with a covered agreement, it shall recommend that the
Member concerned bring the measure into conformity with that agreement" (emphasis added by the
complainants in their comments). The complainants additionally refer to a series of Appellate Body
and Panel reports in which panels and the Appellate Body have pr oceeded to make recommendations
on measures within their terms of reference that were modified or expired after the panel was
established.
28 The United States contends that panels ha ve declined to make recommendations only
where measures had expired before the Panel was established.29

27 Appellate Body Report on EC – Sardines , para. 301. The Appellate Body held similarly in two
subsequent disputes: see Appellate Body Report on EC – Selected Customs Matters , para. 259 and Appellate
Body Report on EC – Bananas III (US), paras. 6.1-6.18.
28 See, e.g., Panel Report on EC – Approval and Marketing of Biotech Products , paras. 8.16 and 8.36;
Appellate Body Report on EC – Selected Customs Matters , para. 310; Appellate Body Report on Dominican
Republic – Import and Sale of Cigarettes, para. 129.
29 See Appellate Body Report on US – Certain EC Products, para. 81; Appellate Body Report on US –
Upland Cotton, para. 272. Appellate Body Report on EC – Bananas III (US).

6.50 The Panel has decided to adjust certain paragraphs of its Reports, including its
recommendation pursuant to Article 19.1 of the DSU, in order to reflect more clearly the fact that, at
the time of writing the Interim Reports, there wa s no evidence properly before the Panel that the
measures in question had in fact been repealed. Accordingly, the Panel has made adjustments to
paragraphs 7.161, 7.267, 7.1156, 8.14, 8.25 and 8.37, in this respect.
6.51 The European Communities requests the Panel to review pa ragraph 7.191 of the Reports in
their entirety and reflect differences in the scope of the complainants' claims. It submits that Japan's
claims with respect to flat panel display devi ces are narrower than those advanced by the United
States and Chinese Taipei on the basis of language appearing in paragraphs 216 of Japan's first written
submission, which refers to "flat panel display devices 'for' ADP machines", as well as "LCD
monitors with DVI", and those referred to in ar guments of the United States and Chinese Taipei,
namely in this last respect, "those devices that can display information only from an ADP machine".
6.52 The United States submits that it is not necessary for the Panel to make changes to these
sections, noting that Japan expressly stated that the scope of its claims concerning flat panel display
devices was the same as that of the other parties. Japan argues that the European Communities has
mischaracterized the scope of its claim concerning flat panel display devices, as it had equally done in
its second written submission. Accordingly, the United States and Japan request the Panel to reject the
proposal by the European Communities to modify paragraph 7.191.
6.53 The Panel sees no distinction in the scope of Japan's claim in relation to those of the other
complainants, in particular in light of statements by Japan that it considers products at issue to be
those it has described and those referred to by other parties. Similar to the other complainants, Japan
has referred to the language of the FPDs narrativ e description, as well as to language in tariff item
number 8471 60 90 in the EC Schedule. In addition, similar to the other complainants, Japan has
discussed certain technology in display devices, su ch as LCD monitors with DVI interfaces. In
addition, all three complainants submitted a join t Panel request discussing identical claims and the
matter before the Panel. For these reasons, the Panel sees no basis to make revisions to the Reports as
requested by the European Communities.
2. Flat Panel Display Devices (FPDs)
(a) Comments by the Complainants
6.54 The complainants request the Panel to revise paragraph 7.246 to provide as follows: "The
Panel considers that, under the CN, read in conj unction with the CNEN, a display based on LCD,
OLED or plasma technology ... cannot be capable of connecting to other sources".
6.55 The European Communities argues that this change is one of substance and should be
rejected.
6.56 The Panel
 disagrees that this change is one of subs tance and has made this change as it better
reflects the intention of the Panel.
6.57 The complainants request that the final sentence of paragraph 7.477 be revised for
consistency, as follows: "Rather, we consider our task to be to determine whether the concession
covers those products at issue, namely those that are designed for use with automatic data-processing
machines (which, undisputedly, fall within the ITA)...".
6.58 The European Communities has not commented on the complainants' request.

6.59 The Panel has made this editorial correction for consistency.
6.60 The complainants request the Panel to revise the concl uding sentence of paragraph 7.502 as
follows: "Nor do we understand them to argue that all "televisions" necessarily qualify as flat panel
display devices under the concession." The complainan ts acknowledge that they do not claim that all
display devices or monitors, such as televi sions using LCD or other non-CRT technologies,
necessarily fall within the meaning of the FPDs na rrative description. However, they request the
Panel to clarify a statement in paragraph 7.502 regarding whether televisions may qualify as flat panel
display devices under the concession. The compla inants argue that they have not excluded the
possibility that some "televisions" might fall under the concessions, depending on the definition given
to a "television".
6.61 The European Communities submits that the complainants' request amounts to an attempt to
enlarge the findings of the panel ex-post of the actu al proceedings. It argues that the complainants
never argued that flat panel televisions would be within the scope of the claims.
6.62 The Panel notes that the complainants have not provided any citation to arguments that
support the broader formulation requested. The complainants point out that the meaning of the term
"television" was not discussed in this dispute. Accordingly, the Panel declines to modify the text.
6.63 The complainants request the Panel to clarify its statement regarding the duty suspension in
paragraph 7.744 with the following modificati ons: "However, Council Regulation No. 179/2009
suspends those duties for some products, and hence th ere is no inconsistency with Article II:1(b) to
the extent the duty suspension is applied to a product covered by either concession."
6.64 The European Communities submits that it does not understand the changes in light of the
language appearing in paragraphs 7.745 of the Interim Report.
6.65 The Panel has modified the text to clarify the di stinction between when the suspension is
applied (as in para. 7.744) and when it is not (as in para. 7.745).
(b) Comments by the European Communities
6.66 The European Communities requests the Panel to review th e citations in paragraphs 7.269,
7.270 et seq., and footnotes 359, 360 and 363, which it argues concern exclusively MFMs. The
European Communities expresses concern that the analys is in this section is based on the existence of
evidence that pertains to MFMs.
6.67 The United States argues that the evidence relied on by the Panel is not inapplicable simply
because the BTI pertains to a product other than LCD monitors. It argues that the evidence
demonstrates that EC member States rely on regulations that use earlier CN numbers to classify goods
under the most recent CN, supporting the conclusion that a mere change in CN numbers does not
result in prior regulations losing their relevance for purposes of customs classification in the European
Communities. For purposes of accuracy, the United States proposes that the Panel modify the
penultimate sentence to eliminate a reference to LC D monitors, as follows: "Moreover, there is some
evidence that at least in some instances national authorities conti nue to support their classification
decisions with reference to classification measures using older CN codes".
6.68 The Panel has taken the approach described by th e United States in the proposed Interim
Report. Namely, despite the fact that the BTI pertains to a product different than an LCD monitor, the
Panel considers the method applied demonstrates that EC member States rely on regulations using

older CN numbers despite changes in the current CN. As suggested by the United States, the Panel
has modified the penultimate sentence to remove the reference to LCD monitors.
6.69 The European Communities requests the Panel revise paragraph 7.475. The European
Communities submits that it did not argue that the terms "mainly" and "only" in paragraph 7.475
should be "added" to the narrative description, but are "interpretative tools".
6.70 The United States responds that it does not understand th e Panel to have asserted in this
paragraph that the European Communities argued th at words should be added to the text of the
concession. Rather, the United States submits that it understands the Panel to find that the position of
the European Communities would require one to r eads words into the text that do not appear.
Therefore, it submits that the paragraph need not be revised.
6.71 For purposes of clarity, the Panel has chaged the word "add" to read "read in", as the Panel
did not mean to suggest the literal addition of terms.
6.72 The European Communities submits that, in paragraphs 7.560 et seq., including 7.587 to
7.596, the Panel has not considered the state of t echnology at the time of the ITA negotiations in the
context of the ordinary meaning of the relevant concessions, despite what it asserts are very clear
arguments in its submissions. The European Communities requests the Panel to address these
arguments.
6.73 The United States submits that the Panel has not om itted considering arguments regarding
the state of technology at the time of ITA negotiatio ns, but instead considers and rejects the argument,
in particular in paragraphs 7.589 – 7.594. It thus considers revisions unnecessary.
6.74 The Panel has addressed what it understood to be arguments by the European Communities
concerning the state of technology in the section of the report entitled "Other arguments". We note
that in their submissions on flat panel display devi ces, unlike in their submissions for set top boxes,
the European Communities did not clearly designate arguments concerning the state of technology as
necessarily relating to "surrounding circumstances" or "ordinary meaning". In any event, in light of
the broad nature of the terms of the concessions, the Panel concluded that the state of technology does
not inform its interpretation. Accordingly, the Pa nel considers it has addressed the arguments of the
European Communities in paragraphs 7.560 et seq.
6.75 The European Communities requests the Panel to revise pa ragraph 7.614 to reflect its
arguments appearing in paragraphs 100-101 and footnote 812 of its first written submission. It argues
that these paragraphs do not state that "genuine ADP monitors" do not equate to "those solely used
with ADPs".
6.76 The Panel notes that the paragraphs cited by the European Commun ities state that the
question of whether "a given multifunctional LCD mon itor falls within the scope of [tariff heading
8471 60 90]" is "wholly different" from whether a "g enuine ADP monitor would fall within the scope
of the ordinary meaning of the heading". It con tinues, stating that "ADP monitors undoubtedly fall
within this heading, but this says very little about whether the different kinds of multifunctional LCD
monitors subject to this dispute fall within the ordi nary meaning of the heading". It then states that
these multifunctional monitors may be classified as video monitors or as reception apparatus for
television under different headings.
6.77 Based on this language in these paragraphs, the Panel understands the European Communities
to distinguish between what it considers are "multifunctional" monitors from "genuine ADP

monitors". The Panel understands the principal di fferentiator in the terms used by the European
Communities is whether a product is multifunctional or not. A product that is not multifunctional is
one that does not have multiple uses or one that is onl y capable of being used in one respect. As the
European Communities refers to ADP machines in this context, th e Panel understands the European
Communities to refer to products that are not mu ltifunctional, but those capable of being used
exclusively with ADP machines.
6.78 Nevertheless, the Panel has revised the text to paraphrase the views of the European
Communities expressed in paragraphs 100-101 and footnote 812 of its first written submission.
6.79 The European Communities requests the Panel to reflect arguments in paragraph 7.698 from
paragraphs 160 to 169 in its first written submissi on. The European Communities submits that it has
not conceded that "it would in all cases have 'pla ced relatively too much weight on criteria in CNEN
2008/C 133/01 in classifying these products'", referri ng to paragraphs 160 to 169 in its first written
submission.
6.80 The complainants have not commented on the European Communities' request.
6.81 The Panel has revised the text to paraphrase the views of the European Communities
expressed in paragraphs 167-169 of its first written submission.
6.82 The European Communities considers that paragraph 7.710 misrepresents its position. The
European Communities submits that it has not argued that LCD technology would fall outside the
coverage of ITA products.
6.83 The complainants have not commented on the European Communities' request.
6.84 The Panel has revised the text to paraphrase the views of the European Communities
expressed in paragraphs 71-76, 87, 90 of the European Communities' first written submission.
6.85 The European Communities requests the Panel to delete th e final sentence of paragraph
7.711, submitting that it misrepresents the position of the European Communities.
6.86 The complainants have not commented on the European Communities' request.
6.87 The Panel has revised the text to reflect the European Communities' arguments as reflected in
its Response to Panel question No. 50.
6.88 The European Communities submits that findings of violation of Article II:1(a) in
paragraphs 7.757, 8.4(e), 8.5(e), 8.16(e), 8.17 (e), 8.27 (e) and 8.28(e), should be confined to the
scope of the findings under Article II:1(b) of the GATT 1994 absent the duty suspension.
6.89 The complainants
 observe that the Panel's findings under Article II:1(a) apply both to
products subject to the duty suspension as well as to products that are not subject to the duty
suspension. They accordingly reject these proposed changes.
6.90 The Panel determined in paragraph 7.757 that a viol ation of Article II:1(a) results regardless
of whether the duty suspension is applied. Accord ingly, the Panel declines to make the proposed
changes.

3. Set Top Boxes Which Have a Communication Function (STBCs)
(a) Comments by the Complainants
6.91 The complainants request the Panel to modify language in paragraphs 7.854, 7.855, 7.882,
7.937, 7.948, 7.952, 7.977 and 7.981, discussing th e features and additional characteristics of a "set
top box", by removing the term essential character. Specifically, the complainants request the Panel
to refrain from using the term "essential charact er" in explaining a set top box, because this
terminology is also used in the HS GIR 3(b). The complainants point to a finding by the Panel that
the HS is not relevant in the context of Attachment B concessions.
6.92 The European Communities has not commented on the complainants' request.
6.93 The Panel has modified paragraphs 7.854, 7.855, 7.882, 7.937, 7.948, 7.952, 7.977 and 7.981
in the interim report to remove the use of the term "essential character" without changing the
substance of the paragraphs.
6.94 The complainants request the Panel to include a foot note in paragraph 7.823, citing the
complainants' response to Panel question Nos. 85, 88 and 146.
6.95 The European Communities has not commented on the complainants' request.
6.96 The Panel has included the suggested footnote.
6.97 The United States requests the Panel to reconsider its conclusion in paragraph 7.957 with
respect to tariff line number 8528 12 91, in light of it s view that it provided an adequate explanation
of each of the terms in the concession for tariff lin e number 8528 12 91. It notes that the terms are
"materially identical" to the terms used for the conc ession contained in Attachment B of the ITA. It
further argues that the Panel's conclusions rega rding the terms of Attachment B are "equally
applicable" to those elements of the concession in the subheading. The United States acknowledges
that this subheading refers to devices "capable of receiving televisions signals", unlike the description
in Attachment B. The United States additionally contends that it has explained why the terms of
heading 8528 support its interpretation of the conces sion for tariff line number 8528 12 91. To the
extent the Panel were not to modify its conclu sions, the United States requests the Panel to, at a
minimum, delete the sentence stating that the Unite d States has not addressed the interpretative issue
by taking into consideration the location of the concession in the EC Schedule.
6.98 The European Communities argues that the changes proposed by the United States would
not be appropriate in light of its arguments presented throughout the proceedings.
6.99 The Panel
 does not consider it appropriate to modify its conclusions that the United States
has failed to meet its burden to establish a prima f acie case of violation, in light of its initial
consideration of arguments by the United States. The Panel has incorporated a number of textual
changes to clarify its conclusions in paragraph 7.957.
6.100 The complainants request the Panel to modify paragraph 7.990 to reflect their argument
against the statement in the HSEN that ISDN, WLAN and Ethernet modems "perform a similar
function but ... do not modulate or demodulate signals ". The complainants suggest the use of the
phrase "the presence of a modem, but not including devices that it states perform a similar function
but do not...".

6.101 The European Communities has not commented on the complainants' request.
6.102 The Panel has made this editorial change.
6.103 Chinese Taipei notes that paragraphs 7.998 and 7.999 correctly reflect its erroneous
reference to "May 2007" instead of "April 2007" and to a "favourable" opinion instead of "no
opinion" in its Joint Panel Request. Chinese Taipei underlines that it did, however, correctly refer to
"April 2007" and to the "no opin ion" since its first written submission and that the European
Communities acknowledged this in its comments on th e United States' and Chinese Taipei's response
to Panel question No. 154.
6.104 The European Communities has not commented on this matter.
6.105 The Panel confirms that Chinese Taipei is correct.
(b) Comments by the European Communities
6.106 The European Communities requests the Panel to reconsider its summary of arguments in
paragraphs 7.782-7.786, and pa ragraphs 7.774 to 7.778; and 7.779 to 7.780, concerning the
complainants' citation of "with" and "which" in the context of discussing the STBCs narrative
description. It considers the Panel's summary does not reflect the exchange between the parties. In
particular, the European Communities states that a principal point it was making in its discussion was
that a correct interpretation of a commitment or c oncession requires consideration of the correct text
of the concession. It argues that the complainan ts' decision to replace the language "which" at times
with the term "with", caused a lack of clarity with respect to what was the correct description at issue,
where it was located and the meaning of the two te rms. The European Comm unities asserts that this
lack of clarity affected "the procedural situation that the [European Communities] was facing". In its
view, the Panel's approach to addressing the issue obscures the real exchange between parties.
6.107 The United States submits that it has not taken the position that terms other than those used
in the text of the concession should be the basis for an analysis, in particular, as explained in
paragraphs 7.783 and 7.784. It therefore request the Panel to reject the European Communities'
proposal.
6.108 The Panel understands the European Communities to assert that the manner in which the
complainants described the concession for "set top boxes", including their reference to both the terms
"with" and "which", as well as their discussion of the ro le of the EC headnote, created a due process
issue. However, the Panel notes its conclusion in paragraph 7.780 that the language in the STBCs
narrative description in Attachment B and that appearing in the Annex to the EC Schedule is identical,
thus giving rise to identical scope (as concerns th at language). In addition, in paragraph 7.787, we
determined that the parties have sufficiently id entified the concession in setting forth their claim
pursuant to the STBCs narrative descriptions. Acco rdingly, the Panel does not consider that
paragraphs 7.782-7.786; 7.774 to 7.778; and 7.779 to 7.780 should be adjusted.
6.109 The European Communities argues that the Panel's summary of arguments in paragraph
7.829 and footnote 1037 seems to relate, in part, to arguments that concern flat panel display devices
and not set top boxes which have a communication function.
6.110 The United States submits that the arguments cited by the Panel pertain to the view on
interpretation of the EC headnote, and are equally relevant to the STBCs narrative description under
discussion. It therefore considers changes unnecessary and inappropriate.

6.111 The Panel recognizes that the cited arguments relate, in part to arguments that concern flat
panel display devices. However, as indicated by the United States, these arguments apply to the
European Communities' interpretation of the EC hea dnote. The Panel considers these relevant to its
analysis of the concession based on the STBCs narra tive description, and had therefore referenced
them in this paragraph. For purposes of clarity, th e Panel has made editorial revisions to the language
in the footnote.
6.112 The European Communities submits that the Panel has not considered evidence in
paragraph 7.872 that was presented in Exhibit EC-1 07 in a manner "optimal for WTO proceedings".
The European Communities argues that the exhibit, which is 19 pages long, establishes that a
terminal adapter used with ISDN service is not a modem, and is sometimes incorrectly considered a
modem.
6.113 The complainants have not commented on the European Communities' request.
6.114 In the course of its deliberations in this case, the Panel considered the exhibit referred to by
the European Communities. This is reflected by reference to Exhibit EC-107 in paragraph 7.872. The
Panel therefore declines to make any changes.
6.115 The European Communities submits that the Panel has not adequately considered evidence
presented in paragraph 7.943 (as found in Exhibits EC-39, 40, 41 and 42) in a manner "optimal for
WTO proceedings".
6.116 The United States argues that the European Communities is attempting to reargue points that
were already addressed by the Panel.
6.117 The Panel has reviewed the eviden ce discussed by the European Communities (including
each of the exhibits, which provide lists of proposed products and headings to be considered, many of
which are not relevant), as refl ected in paragraph 7.943. The Pa nel notes that this evidence was
considered by the Panel in the course of its deliber ations. In particular, the Panel noted the list of
products referred to in the 18 Oct ober 1996 paper refer to a set t op box product broadly, thereby
supporting a broad interpretation. In addition, we noted no reference was made to language that was
not included in the final text, and that no discussion centred on hard drive or recording features, or
additional functionality. On the basis of this cons ideration, the Panel concluded that the European
Communities did not demonstrate how or why the documents it referred to should lead to any
different interpretation of the concession. The Eu ropean Communities has not indicated any specific
changes it wishes to be included. In light of the foregoing, the Panel declines to make any changes.
6.118 The European Communities requests the Panel to give a more thorough assessment in
paragraph 7.951 to Exhibit EC-41, a fax from Jap an's MITI dated 23 October 1996. The European
Communities argues that this document is actual a nd contemporaneous, available to ITA drafters,
specifically refers to the narrative description, an d refers to the products the European Communities
considers to be covered by the terms of the conce ssion based on the STBCs narrative description. It
emphasizes further that this document was communi cated to others. For these reasons, the European
Communities asserts it is not clear why this document should not inform or influence interpretation of
the concession at issue. At a minimum, the Eur opean Communities suggests that a more thorough
consideration is appropriate gi ven the importance attributed to the document by the European
Communities.
6.119 The Panel has reviewed and incorporated the re ferenced fax from Japan's Ministry of
International Trade, dated 23 October 1996, which itself attaches a "Web TV Networks" press release,

in paragraph 7.951. The Panel observes that this document confirms what was included in Exhibit
EC-38. In addition, the Panel took the evid ence presented by the European Communities into
consideration, weighing it against what was provided by the complainants (e.g. Exhibit US-114).
6.120 The European Communities requests the Panel to reconsider its analysis and conclusions
regarding paragraphs 7.1017 – 7. 1025 and paragraph 7.1092. The European Communities rejects the
analysis and conclusions in pa ragraphs 7.1017-7.1032 and 7.1092, arguing that the Panel did not
sufficiently consider the "draft" character of th e CNENs at issue. In particular, the European
Communities argues that the Panel only considered the attributes of duly adopted CNENs, and not
those of the draft or preparatory versions, when determining whether the "draft CNENs" are "laws,
regulations, judicial decisions or administrative ru lings of general application" and "measures of
general application ..." under Articles X:1 and X: 2 of the GATT 1994. By doing so, the European
Communities considers the Panel's analysis to be flawed. In its view, the Panel should have
considered the draft character at all points in the analysis, and not solely in its assessment of whether
the CNEN amendments were "made effective", under Article X:1, or whether the CNEN amendments
were "enforced" within the meaning of Article X:2.
6.121 The European Communities does not reject the possibility that preparatory acts which were
enforced may fall within the disciplines of Article s X:1 and X:2. However, it presupposes that one
would analyze such draft measures together with an y relevant administrative instructions that were
given, or other measures giving effect to the preparatory act. Such an approach, it argues, would allow
a panel to properly consider the new attributes of th e draft measures, which, in fact, would no longer
be draft measures, but would be given a certain effe ct beyond that of a mere draft. In this case, the
European Communities argues that the Panel should have taken into account the second Chairman's
Statement together with the draft CNEN, in co nsidering whether the draft constituted a "law,
regulation, judicial decision [or] administrative rulin g" or "measure of gene ral application taken by
any contracting party".
6.122 The European Communities further notes that th e Panel's approach contradicts the way the
Panel itself refers to its findings. According to the European Communities, the Panel refers
interchangeably to CNENs and to the "draft" CN EN amendments, which highlights the conceptual
difficulty with the Panel's approach to the inte rpretation. The European Communities refers to
paragraphs 7.1026, 7.1032 and 7.1092.
6.123 The United States and Chinese Taipei request the Panel to reject the comments by the
European Communities. The United States submits that the European Communities is attempting to
reargue points about the legal effect of the "dra ft" CNENs that were rejected by the Panel in
paragraphs 7.1038-7.1063. For reas ons described in those paragraphs, it does not consider the so-
called "draft" character of the CNENs to alter its views on whether the measures in question are
"laws, regulations, judicial decisions and administ rative rulings." The United States suggests that the
Panel insert a footnote in paragraph 7.1024 that cros s-refers to paragraphs 7.1037-7.1062, noting that
the issues are relevant to the matters discussed in this section. Chinese Taipei considers that the Panel
correctly examined whether the draft CNENs qualify as "laws, regulations, judicial decisions or
administrative rulings" and "measures of general appli cation". In its view, the draft character of the
said measures does not alter the analysis. If the interpretation of the European Communities were
accepted, such an approach would render Articles X:1 and X:2 of the GATT 1994 "inutile".
6.124 The Panel considers that its analysis and findings in paragraphs 7.1017-7.1032 and paragraph
7.1092 are correct and that there is no basis fo r agreeing with the European Communities' request.
The Panel has not concluded that all draft measur es or preparatory acts would necessarily be covered
by Articles X:1 and/or X:2. Instead, the Panel c oncluded that an analysis of the coverage of

Articles X:1 and X:2 must be based primarily on the content and substance of the instrument at issue,
and not merely on its form or nomenclature, such as, for example, the alleged "preparatory" character
of the CNENs at issue. Put differently, the mere fact that a measure is labelled as a "draft" is not
enough to preclude it from coverage under Articles X:1 and X:2. In order to assess whether the
CNENs at issue are indeed "preparatory acts" – as opposed to only being labelled as "preparatory
acts" – the Panel considered whether the CNENs at i ssue had any effect in practice, i.e., were "made
effective", before their formal adoption by th e Commission and publication in the EU Official
Journal. Because Article X:1 also explicitly requires considering whether the "law, regulation, judicial
decision or administrative ruling" at issue was made effective, the Panel considered that the alleged
"preparatory" character of the CNENs at issue s hould be addressed separately when considering the
"made effective" requirement. Had the Panel concluded that the draft CNENs at issue were true
preparatory acts, with no effect until their official adoption by the Commission and publication in the
EU Official Journal, the Panel would have concl uded that the CNENs at issue were not covered by
Article X:1. However, the Panel found that in this dispute, the CNENs at issue were made effective,
even though they were labelled "draft CNEN", such that they were in fact not mere "preparatory acts".
Similarly, the Panel did not consider the alleged "preparatory" nature of the CNENs at issue when
considering whether the CNENs at issue are a "measu re", but instead, did so when considering the
requirement of "enforcement". Again, had the Panel concluded that the draft CNENs at issue were not
being enforced, the Panel could not have established an Article X:2 violation.
6.125 In addition, the Panel would note that it in fact analyzed the draft measures together with the
particular constellation of facts, including relevant statements that were given by the Chairman of the
Customs Code Committee, the votes on the measur es taken by the Customs Code Committee, and
also in light of BTIs that were issued by certain EC member States. In this respect, the Panel recalls
its finding in paragraph 7.1061.
6.126 Accordingly, the Panel declines the European Co mmunities' request to revise its analysis or
conclusions. For clarity, the Panel will include the footnote proposed by the United States in
paragraph 7.1023. Finally, the Panel notes that it referred to CNENs when dealing with CNENs in
general, while it referred to "CNEN amendments" when addressing the specific CNENs at issue.
4. Multifunctional Digital Machines (MFMs)
(a) Comments by the complainants
6.127 The complainants ask the Panel to modify pargraph 7.1234 to clarify that the type of
apparatus referred to in subparagraph (a) is one which can connect to an ADP.
6.128 The European Communities has not commented on the complainants' request.
6.129 The Panel has made the requested clarification.
6.130 The complainants suggest that the Panel add the fo llowing language after the penultimate
sentence in paragraph 7.1303:
"As we indicate in pargraph 7.1392 et seq., no MFM may properly be classified under
HS 9009.12, and no other argument has been made by the EC to the effect that any
MFM can be classifiable outside Chapters 84 and 85"
The complainants believe that this clarifi cation will avoid any confusion over the way in
which the Panel is using Note 3 to Section XVI as context in its discussion.

6.131 The European Communities has not commented on the complainants' request.
6.132 The Panel does not consider that the way the Panel is using Note 3 to Section XVI as context
in its discussion of subheading 8471 60 is confusi ng, and indeed does not relate to its separate
findings later about the scope of s ubheading 9009 12. However, to a void the possibility of confusion,
the Panel has added the following footnote to the penultimate sentence of that paragraph:
"We note that the only argument the European Communities has made with respect to
the possible classification of MFMs outside Chapters 84 and 85 is with respect to
their classification in subheading 9009 12. The Panel has dealt with whether MFMs
can be classified in subheading 9009 12 in paragraphs 7.1392 et seq. below."
6.133 The complainants suggest adding the following text at the end of paragraph 7.1392:
"In this connection, the Panel notes that in pargraph 7.1476 it finds that "the ADP
MFMs at issue . . . cannot fall within the scope of the concession in subheading 9009
12 of the EC Schedule, regardless of the pr imary, secondary, or equivalent nature of
the copying function vis-à-vis these machines' other functions" such as printing and
scanning."
The complainants believe this will clarify the Panel's findings and avoi d any confusion about
what the Panel has found about the proper scope of subheading 9009 12 of the EC Schedule.
6.134 The European Communities has not commented on the complainants' request.
6.135 The Panel does not see any need to add clarification on this point as the Panel indicates in the
immediately following paragraph that it is turning to the issue of the scope of subheading 9009 12.
Given that the Panel had not yet made findings on the scope of subheading 9009 12 at that point in
the Interim Reports, there can be no need to "clarify" them at that point.
6.136 The complainants request the Panel to edit paragraph 7. 1495 to clarify that the 12 pages per
minute criterion in subheading 8443 31 is only rele vant for determining whether an MFM with a
facsimile function is subject to the complainants' request.
6.137 The European Communities has not commented on the complainants' request.
6.138 The Panel has made the suggested change.
6.139 The United States also made specific requests for additio nal citations in particular footnotes
to reflect the United States argumentation on the points referred to in those paragraphs.
6.140 The European Communities has not commented on the United States' request.
6.141 The Panel has inserted the additional citations.
(b) Comments by the European Communities
6.142 The European Communities asks the Panel to delete the first sentence of paragraph 7.1299
because it argues, the Panel is incorrectly attribu ting to the European Communities the view that a
determination pursuant to Chapter Note 5(B) should be based on actual use.

6.143 The complainants have not commented on the European Communities' request.
6.144 The Panel did not intend the paragraph to serve as a summary of the European Communities'
arguments, but rather to reflect its own unders tanding of the implications of the European
Communities' position. The Panel has changed the fi rst sentence of paragraph 7.1299 to clarify that
the paragraph reflects the Pane l's understanding of the logical consequence of the European
Communities' arguments. To further clarify, the Panel has also removed the term "actual use" from
the second sentence of paragraph 7.1299.
6.145 The European Communities notes that paragraph 7.1386 restat es the Panel's conclusion set
out in the first sentence of paragraph 7.1363. For "reasons of consistency" the European Communities
feels it would be appropriate to restate the conc lusion set out in the second sentence of paragraph
7.1363 in paragraph 7.1386 as well.
6.146 The United States does not consider this change neces sary; however, if the Panel opts to
make the change requested by th e European Communities, the Unite d States requests that it insert a
footnote at the end of the second sentence referenci ng paragraph 7.1476, as follows. "However, with
regard to subheading 9009 12, see paragraph 7.1476, infra."
6.147 The Panel has made both of the suggested changes with minor modifications. The footnote
as modified reads: "However, with regard to whet her MFMs fall within the scope of subheading 9009
12, see paragraph 7.1476, below."
6.148 The European Communities asks the Panel to amend paragraph 7.1389 to reflect accurately
the EC position. In particular the European Comm unities argues that it has never "conceded" that the
"print module" is the largest component of an MFM and that it has never agreed that the way copying
is achieved is through the combined use of the printer and scanner modules.
6.149 Additionally, the European Communities states that it did not argue that
"the combination of the [printing and scanni ng] functions together, with the addition
of the copying function, somehow creates a machine that necessarily is not of a kind
principally used with an ADP machine if the copying function is equivalent or
primary over the other functions."
According to the European Communities, its pos ition is that if the copying function of an
ADP MFM is equivalent to its ADP functions then it is prima facie classifiable under both
headings 8471 60 and 9009 12 with the conseque nce that classification must be determined
under GIR 3. With respect to an ADP MFM whose principal function is copying "such
machine cannot be considered to be of a kind principally used with an ADP machine for the
purposes of Chapter Note 5(B)."
6.150 The complainants have not commented on the European Communities' request.
6.151 The Panel
 has modified the paragraph to more precisely reflect what the European
Communities' argued during the course of the proceedings.
6.152 The European Communities requests that the Panel amend paragraph 7.1390 to accurately
reflect its arguments. In particular, the European Communities recalls that it has repeatedly explained
that the function of the principal component or the value of the various components in the MFM may
not be dispositive for classification purposes when such components are themselves multifunctional.

6.153 The complainants have not commented on the European Communities' request.
6.154 The Panel first notes that although the European Co mmunities asserts that it has repeatedly
explained its position, the European Communities did not provide the Panel with any citations to its
arguments on this point during the course of the pr oceedings. The Panel is aware that the European
Communities did state in paragraphs 438-440 of its first written submission that classification of an
MFM based on the classification of the component which imparts the product's essential character,
pursuant to GIR 3(b), is not possible if that component is a print engine, which is itself
multifunctional. However, the Panel did not say in paragraph 7.1390 that the European Communities
had not explained why the function of the principal component or the value of the various components
should not be dispositive for classification purposes, but rather that the European Communities had
not explained why pages per minute or the other criteria listed by the ECJ in the Kip judgment were
more relevant than those two factors or why the factors listed by the ECJ should be dispositive.
However, to avoid any perception that the Pa nel has misunderstood the European Communities'
arguments, we are modifying the paragraph as well as adding an additional sentence to footnote 1774
to paragraph 7.1390, which will now read:
"A focus on the function of the principal component seems more in line with Note 3
to Section XVI. We note that the Eur opean Communities has argued that if the
principal component, in this case the pr int engine, is itself multifunctional then
classification of the MFM, pursuant to GIR 3(b) based on the classification of the
component which imparts the products essential character is not possible. (see
European Communities' first written submis sion, paras. 438-440). However, the
Panel is not persuaded by this argument."
6.155 The European Communities requests that the Panel amend pa ragraph 7.1451 to clarify that
the European Communities was not invoking the cl assification practice of Members as "subsequent
practice" in the sense of Article 31(3)(b) of the Vien na Convention, but that pursuant to the Appellate
Body rulings in EC – Computer Equipment and EC – Chicken Cuts , classification practice of
Members may still be relevant under Article 32 of the Vienna Convention. Additionally, the
European Communities would like the Panel to clarify that it also referred to the judgment of the ECJ
in the Rank Xerox case in its arguments as well as to the classification practice of Chinese Taipei and
some third countries.
6.156 The complainants have not commented on the European Communities' request.
6.157 The European Communities renews its position that it did not refer to the classification
practice of individual Members for the purpose of establishing "subsequent practice demonstrating a
common, consistent and concordant practice of members" with respect to paragraph 7.1454 as well.
6.158 The complainants have not commented on the European Communities' request.
6.159
 The Panel notes that in section VII.G.3(a)(iv) entitl ed "subsequent practice" the Panel dealt
extensively with the European Communities' argumen ts with respect to the classification practice of
itself and other Members with respect to the inte rpretation of the ordinary meaning of subheading
8471 60, the relevant concession in this dispute. This discussion contained references to the European
Communities' arguments pertaining to the Rank Xerox case and to the practice of Chinese Taipei. The
Panel notes that the European Communities did not ob ject to our referring to these types of arguments
relating to the classification of the products at is sue as dealing with "subsequent practice" in our
interpretation of subheading 8471 60 or anywhere else in the Interim Report. Given that the European
Communities referred to the classification practice of Members which was subsequent to the relevant

subheadings being inscribed in the HS as suppor t for its understanding of the scope of the
subheadings, we consider that we appropriately dealt with these arguments under Article 31(3)(b) of
the Vienna Convention. The Panel did make minor clarifications to paragraph 7.1451 of the Interim
Report, to more precisely reflect the European Communities' arguments.
6.160 The European Communities argues that, because it referred to the lack of agreement within
the WCO as indirect evidence of the classification practice of individual Members, the discussion of
the disagreement in the WCO contained in paragr aph 7.1456 is best considered with the other
materials on the classification practice of Members, rather than as an independent supplementary
means of interpretation.
6.161 The complainants have not commented on the European Communities' request.
6.162 The Panel has moved the reference to the citation of discussions in the WCO from paragraph
7.1456 of the Interim Report as well as the Panel's consideration of this discussion in paragraph
7.1459, with some minor modifications, to the immediately preceding section on subsequent practice.
6.163 The European Communities argues that the first sentence of paragraph 7.1459 suggests that
there is a contradiction between the references ma de by the European Communities to the discussions
within the WCO and the "admission" by the Eu ropean Communities that there was significant
disagreement among Members within the WCO. The European Communities does not propose any
specific alterations in the language of the first sentence of paragraph 7.1459.
6.164 The complainants have not commented.
6.165 The Panel has deleted the phrase "that even the European Communities' admits" from the
first sentence of paragraph 7.1459 which, as not ed above, has been moved to the immediately
preceding section on subsequent practice.
6.166 The European Communities points out that the cross-reference to paragraph 7.1478 made in
the first sentence of paragraph 7.1496 appears to be erroneous. Additionally, the European
Communities requests that the word "certain" be in serted before the term ADP MFMs in the first
sentence of the same paragraph.
6.167 The complainants have not commented on the European Communities' request.
6.168 The Panel has corrected the cross reference and inserted the word "certain" before ADP
MFMs.
5. Other changes to the Interim Reports
6.169
 The complainants further identified a variety of typographical errors and editorial
suggestions in the following paragraphs. The Panel has reviewed all of these errors and amended the
text accordingly. 30 The Panel has also made a number of stylistic changes that do not affect the
substance of the Reports.

30 See paragraphs 2.3; 7.42; 7.100; 7.111; 7.120; 7.140; 7.144, fn. 217; 7.150, fn. 235; 7.159, fn. 245;
7.191; 7.196; 7.228; 7.234; 7.238; 7.239; 7.250; 7.259; 7.265; 7.269, fn. 360; 7.277, fn. 367; 7.288; 7.304;
7.325; 7.326; 7.335; 7.354; 7.355; 7.357; 7.358, fn. 484; 7.360, fn. 491; 7.361; 7.371; 7.430; 7.431, fn. 571;
7.440; 7.441; 7.453; 7.455; 7.457; 7.465; 7.474; 7.498, fn . 672; 7.502; 7.504; 7.513; 7.521; 7.531; 7.539; 7.548,
fn. 720; 7.582; 7.584; 7.591; 7.593, fns. 789 and 791; 7. 600; 7.614; 7.619, fn. 816; 7.624; 7.642, fn. 860; 7.644;

VII. FINDINGS
A. S
UMMARY OF THE MAIN ISSUES FOR THE PANEL'S DETERMINATION
7.1 The fundamental issue for the Panel's determin ation in these disputes is whether a series of
EC measures are inconsistent with Articles II:1( a) and (b) of the GATT 1994 because they result in
less favourable treatment to imports of flat pa nel display devices, set top boxes which have a
communication function and multifunctional digital m achines ("MFMs") than that provided for these
products under the European Communities' WTO Schedule (the "EC Schedule"), and because the
tariff treatment provided is in excess of that provided for these products under the EC Schedule.
7.2 The complainants argue that, pursuant to commitments made in the ITA, the European
Communities is obligated to provide duty-free treat ment to each of these products. Specifically, the
complainants allege that certain flat panel display devices are covered by two duty-free concessions in
the EC Schedule: one that is set forth in a narra tive description (the "FPDs narrative description") in
an Annex attached to the EC Schedule, and a second arising under tariff item number 8471 60 90 of
the EC Schedule. The complainants jointly a llege that certain set-top boxes which have a
communication function are covered by a narrative descr iption (the "STBCs narrative description") in
the Annex to the EC Schedule, while separately, th e United States alleges that certain set top boxes
which have a communication function are also cove red by duty-free concessions arising under tariff
item numbers 8517 50 90, 8517 80 90, 8525 20 99 and 8528 12 91 of the EC Schedule. Finally, the
complainants argue that certain MFMs are covered under either HS1996 subheading 8471 60 or
heading 8517 21 of the EC Schedule. According to the complainants, despite these duty-free
concessions, the challenged measures require that par ticular products that satisfy the terms of those
concessions be classified under dutiable headings. Th e complainants argue that the application of
duties to those products which they believe shoul d be afforded duty-free treatment results in a
violation of Articles II:1(a) and (b) of the GATT 1994.
7.3 In addition to claims under Article II of the GATT 1994, the United States and Chinese
Taipei, further allege that the European Communitie s has acted inconsistently with Articles X:1 and
X:2 of the GATT 1994 by failing to publish and en force certain EC measures related to the
classification of STBCs in accordance with the requirements of those provisions.
31
7.4 The European Communities requests the Panel to reject all claims raised by the
complainants. The European Communities argues th at the specified measures do not require the
assessment of duties in a manner inconsistent with an y of the particular concessions identified by the
complainants in its Schedule of concessions. The European Communities fu rther rejects that the
actions cited by the United States and Chinese Taipei are inconsistent with Articles X:1 and X:2 of the
GATT 1994.

7.646; 7.664; 7.667; 7.669; 7.675; 7.679; 7.682; 7.694; 7.698; 7.703; 7.705; 7.710; 7.710, fn. 934; 7.711; 7.711,
fn. 942; 7.715; 7.717; 7.727; 7.735; 7.740; 7.754; 7.755, fn. 974; 7.758; 7.759; 7.761, fn. 979; 7.762; 7.798;
7.799; 7.807; 7.820; 7.822; 7.823; 7.839; 7.842; 7.843; 7.845, fn. 1069; 7.848; 7.851; 7.855; 7.875; 7.876;
7.918; 7.921; 7.923; 7.925; 7.933; 7.934; 7.941; 7.949; 7.950; 7.952; 7.964; 7.872 and 7.966; 7.973; 7.975;
7.978; 7.979; 7.1035, fn. 1344; 7.1042, fn. 1361; 7.1044; 7.1059, fn. 1380; 7.1074; 7.1120; 7.1126; 7.1128, fn.
1475; 7.1134; 7.1158; 7.1200; 7.1213; 7.1243-7.1246; 7.1249, fn. 1619; 7.1266; 7.1270-7.1272; 7.1284; 7.1292;
7.1301; 7.1314; 7.1325; 7.1326; 7.1377; 7.1394; 7.1398; 7.1402; 7.1429; 7.1430, fn. 1831; 7.1440; 7.1457 and
its fn. 1858; 7.1465; 7.1469; 7.1478; 7.1479; 7.1493; 7.1495; 7.1496; 7.1505; 7.1506; 7.1513; 7.1527; 7.1531;
8.6(d); 8.8(c); 8.11(c); 8.19(c); 8.22 (c); 8.31 (c); 8.34 (c).
31 Although the three complainants made a joint request for the establishment of this Panel, which
includes inter alia joint claims under Article X of the GATT 1994, Japan did not pursue these particular claims
in its submissions.

B. B
ACKGROUND
1. The Information Technology Agreement (ITA)
7.5 Two years following the conclusion of the Uruguay Round negotiations, during the WTO
Ministerial Conference held in Singapore between 9-13 December 1996, 29 WTO Members 32 and
States or separate customs territories in the process of acceding to the WTO adopted the "Ministerial
Declaration on Trade in Information Technology Products" ("the ITA").
33
7.6 The ITA preamble expresses the desire to " achieve maximum freedom of world trade in
information technology products" a nd to "encourage the continued technological development of the
information technology industry on a world-wide basis". Paragraph 1 of the ITA "declares" that
"[e]ach party's trade regime should evolve in a ma nner that enhances market access opportunities for
information technology products".
7.7 In accordance with paragraph 2 of the ITA, pa rticipants to the ITA ("ITA participants")
agreed to "bind and eliminate" customs duties and other duties and charges within the meaning of
Article II:1(b) of the General Agreement on Tariffs and Trade 1994, through equal duty rate reductions,
on "(a) all products classified (or classifiable) with Harmonized System (1996) ('HS') headings listed in
Attachment A to the Annex to this Declaration"; and "(b) all products specified in Attachment B to the
Annex to this Declaration, whether or not they are included in Attachment A".
7.8 Further to paragraph 2 of the ITA, the ITA in its Annex (the "ITA Annex"), sets forth
"Modalities and Product Coverage". Specifically, paragraph 1 of the ITA Annex states that:
"[E]ach participant shall incorporate the measures described in paragraph 2 of the
[ITA] into its schedule to the General Agreement on Tariffs and Trade 1994, and, in
addition, at either its own tariff line leve l or the Harmonized System (1996) ("HS")
6-digit level in either its official tariff or any other published versions of the tariff
schedule, whichever is ordinarily used by importers and exporters."
7.9 Paragraph 2 of the ITA Annex, in its chapeau, in structs ITA participants to incorporate "the
measures described in paragraph 2 of the [ITA]" in the following manner:
"[...] each participant shall provide all other participants a document containing
(a) the details concerning how the appropriate duty treatment will be provided in its
WTO schedule of concessions, and (b) a list of the detailed HS headings involved for
products specified in Attachment B."
7.10 Paragraph 2(b) of the ITA Annex specifies the manner in which ITA participants should
modify their respective Schedules to implement the ITA, as follows:

32 Both the European Communities as such (then of 15 member States) and each of its then member
States were Participants to the "Ministerial Declaration on Trade in Information Technology Products".
33 The ITA included an invitation for other WTO Me mbers and acceding States or separate customs
territories to join the plurilateral technical discussions that would take place in Geneva at the beginning of 1997.
"Ministers express satisfaction ab out the large product coverage outlined in the Attachments to the
Annex to this Declaration. They instruct their respective officials to make good faith efforts to finalize
plurilateral technical discussions in Geneva on the basis of these modalities, and instruct these officials to
complete this work by 31 January 1997, so as to ensu re the implementation of this Declaration by the largest
number of participants."

"The modifications to its Schedule to be proposed by a participant in order to
implement its binding and elimination of customs duties on information technology
products shall achieve this result:
(i) in the case of the HS headings listed in Attachment A, by
creating, where appropriate , sub-divisions in its Schedule at
the national tariff line level; and
(ii) in the case of the products specified in Attachment B, by
attaching an annex to its Sche dule including all products in
Attachment B, which is to specify the detailed HS headings
for those products at either the national tariff line level or the
HS 6-digit level.
Each participant shall promptly modify its national tariff schedule to reflect the
modifications it has proposed, as soon as they have entered into effect."
7.11 As reflected above, para graph 2 of the ITA Annex refers to two attachments – Attachment A
and Attachment B – that set forth product covera ge under the ITA. A chapeau paragraph preceding
these Attachments indicates that Attachment A "lists th e HS headings or parts thereof to be covered",
whereas Attachment B "lists specific products to be covered by an ITA wherever they are classified in
the HS".
34 Attachment A is divided in two sections. Attachment A, Section 1 includes a table listing
HS1996 headings (four digits) and subheadings (six digits) with their corresponding "HS
descriptions", including the following HS1996 subheading at issue in this dispute:
 HS96 HS description
 8471 60 I nput or output units, whether or not containing storage units in the
same housing

7.12 Certain headings and subheadings in Attachment A, Section 1 are "ex-outs", identified with
the term "ex", which indicates pa rtial coverage of the corresponding HS1996 heading, i.e. only a
subset of products falling within the description of the specific heading are bound to the specified
duty. Attachment A, Section 2, entitled "Sem iconductor manufacturing and testing equipment and
parts thereof", includes a second table containing HS1996 subheadings, with corresponding
"descriptions" of the covered products. Certain head ings listed in this section are designated "[f]or
Attachment B" in the comments column.
35 Attachment B is preceded by a chapeau paragraph, which
states:
"Positive list of specific products to be cove red by this agreement wherever they are
classified in the HS.
Where parts are specified, they are to be covered in accordance with HS Notes 2(b) to
Section XVI and Chapter 90, respectively."
7.13 Following the chapeau, Attachment B lists 13 pr oducts, including the following descriptions
at issue in this dispute:

34 Exhibits US-1; TPKM-1.
35 All the product descriptions with the comment "[f]or Attachment B" are "ex-outs".

"Flat panel displays (including LCD, Electro Lumi nescence, Plasma and other
technologies) for products falling within this agreement, and parts thereof."
"Set top boxes which have a communication function : a microprocessor-based
device incorporating a modem for gaining access to the Internet, and having a function
of interactive information exchange".
7.14 In addition to modalities and pr oduct coverage, paragr aph 5 of the ITA Annex directs ITA
participants to consider any divergence among th em in classifying information technology products,
beginning with the products specified in Attachment B, in furtherance of the "common objective of
achieving, where appropriate, a common classification for these products within existing HS
nomenclature".
36 Further, the ITA contemplates that ITA participants meet "periodically" to "review
product coverage" and determine whether "Attachments s hould be modified to incorporate additional
products".37 At the time of implementati on, discussed in paragraphs 7. 16-7.20 below, participants
agreed to establish a Committee of Participants on the Expansion of Trade in Information Technology
Products ("CITA"). Among other responsibilities, CITA is responsible for conducting consultation and
review concerning the expansion of ITA product coverage as provided for in paragraph 3 of the ITA
Annex and the elimination of classification divergences provided for in paragraph 5 of the ITA Annex.38
7.15 ITA participants agreed to review particip ation in the ITA "no later than 1 April 1997". 39
Following the review and approval, the ITA participan ts agreed to modify their respective schedules
of concessions, including agreement to bind all tariffs on items listed in the Attachments no later than
1 July 1997 and "phase in" customs duty rate reducti ons beginning in 1 July 1997 and concluding "no
later than 1 January 2000".40

36 Para. 5 of the ITA Annex provides:
"Participants shall meet as often as necessary and no later than 30 September 1997 to consider any
divergence among them in classifying information technology products, beginning with the products specified
in Attachment B. Participants agree on the common objective of achiev ing, where appropriate, a common
classification for these products within existing HS nomen clature, giving consideration to interpretations and
rulings of the Customs Co-operation Council (also known as the World Customs Organization or 'WCO'). In
any instance in which a divergence in classification remains, participants will consider whether a joint
suggestion could be made to the WCO with regard to updating existing HS nomenclature or resolving
divergence in interpretation of the HS nomenclature."
37 Para.3 of the ITA Annex provides as follows:
"Participants shall meet periodically under the auspices of the Council on Trade in Goods to review the
product coverage specified in the Att achments, with a view to agreeing, by consensus, whether in the light of
technological developments, experience in applying the tariff concessions, or changes to the HS nomenclature,
the Attachments should be modified to incorporate additional products, and to consult on non-tariff barriers to
trade in information technology products. Such cons ultations shall be without prejudice to rights and
obligations under the WTO Agreement."
38 Implementation of the Ministerial Declaration on Trade in Information Technology Products, WTO
Document G/L/160, para. 8 (2 April 1997) (Exhibit EC-5). To date, the ITA participants have not agreed to a
plurilateral basis to expand ITA coverage or eliminate any particular classification divergences.
39 Para. 4 of the ITA Annex provides that ITA particip ants meet "no later than 1 April 1997 to review
the state of acceptances received and to assess the conclu sions to be drawn therefrom". Implementation was to
proceed on the condition that "approximately 90 per cent of world trade in information technology products
have by then notified their acceptance", and "provided th at the staging has been ag reed to the participants'
satisfaction". The WTO Secretariat was tasked with determining the level of participation on the basis of the
most recent data available at the time of the meeting. A 92 per cent level of participation was determined, prior
to implementation. See para. 7.17 for further information.
40 Para. 2 of the ITA Annex provides, in part, as follows:

2. Implementation of the ITA
7.16 WTO Members commit to bind duty levels on a va riety of goods. In other words, Members
commit not to levy duties in excess of their boun d levels on products originating from other WTO
Members. Members' tariff bindings are recorded in their Schedules of concessions on goods, which
are annexed to the GATT 1994 and are an integral pa rt thereof in accordance with Article II:7 of that
Agreement. The Appellate Body clarified in EC – Computer Equipment that concessions provided for
in Members' Schedules are part of the terms of the treaty, in this case the GATT 1994.
41 Article II:2
of the WTO Agreement further provides that the Ag reements contained in the Annexes to the WTO
Agreement, which includes the GATT 1994, are integral parts of the WTO Agreement.42
7.17 In accordance with paragraph 3 of the ITA, ITA pa rticipants met in January 1997 in an effort
to complete work on implementation of their ITA commitments within their particular WTO
Schedules.43 Participants agreed to submit their pro posed schedules of concessions no later than
1 March 1997, to be reviewed and approved by ITA participants on a consensus basis no later than
1 April 1997.44 On 26 March 1997, the ITA participants informed the Chairman of the Council for
Trade in Goods of their decision to im plement the ITA in their WTO Schedules. 45 ITA participants
then agreed to implementation following review a nd approval, on a consensus basis, of 25 Schedules
of the original ITA participants (including the 15 EC member States separately) and a determination

"These documents will be reviewed and approved on a consensus basis and this review
process shall be completed no later than 1 April 1997. As soon as this review process has
been completed for any such document, that document shall be submitted as a modification to
the Schedule of the participant concerned, in accordance with the Decision of 26 March 1980
on Procedures for Modification and Rectification of Schedules of Tariff Concessions (BISD
27S/25)."
Para. 2(a) of the ITA Annex specifies as follows:
"The concessions to be proposed by each partic ipant as modifications to its Schedule shall
bind and eliminate all customs duties and other duties and charges of any kind on information
technology products as follows:
(i) elimination of such customs duties shall take place through rate reductions in equal
steps, except as may be otherwise agreed by th e participants. Unless otherwise agreed by the
participants, each participant shall bind all ta riffs on items listed in the Attachments no later
than 1 July 1997, and shall make the first such rate reduction effective no later than 1 July
1997, the second such rate reduction no later than 1 January 1998, and the third such rate
reduction no later than 1 January 1999, and the elimination of customs duties shall be
completed effective no later than 1 January 2 000. The participants agree to encourage
autonomous elimination of customs duties prior to these dates. The reduced rate should in
each stage be rounded off to the first decimal; and
(ii) elimination of such other duties and charges of any kind, within the meaning of Article II:1(b)
of the General Agreement, shall be completed by 1 July 1997, except as may be otherwise specified in the
participant's document provided to other participants for review."
41 Appellate Body Report on EC – Computer Equipment, para. 84.
42 Additionally, Article XVI:4 of the WTO Agreement requires that "[e]ach Member shall ensure the
conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed
Agreements". Thus, a Member is obliged to ensure th at its domestic legislation is consistent with the
concessions contained in its Schedule.
43 Paragraph 3 of the ITA (Exhibits US-1; TPKM-1).
44 Paragraph 2 of the ITA Annex (Exhibits US-1; TPKM-1). See also the note by the WTO Secretariat
on the Informal Meeting of ITA participants of 26 March 1997, document G/L/159/Rev.1 (24 April 1997)
(Exhibit US-37).
45 Implementation of the Ministerial Declaration on Trade in Information Technology Products, WTO
Document G/L/160, para. 2 (2 April 1997) (Exhibit EC-5); Notes by the WTO Secretariat of the informal
meeting that took place on 25-26 March 1997, WTO document G/L/159/Rev.1 (24 April 1997) (Exhibit US-37).

by the WTO Secretariat that participants to the ITA represented more than 92 per cent of world trade
on information technology products.
46 In the review and approval pr ocess, ITA participants agreed to
amend certain narrative product descriptions in Attachment B, including the product description for
FPDs at issue in this dispute.47
7.18 In accordance with paragraph 2 of the ITA Annex and the Decision of 26 March 1980 on
Procedures for Modification and Rectifica tion of Schedules of Tariff Concessions (the "1980
Procedures"), each ITA participant submitted a propo sed modification to its own Schedule for review
by all WTO Members. 48 Each participant's schedule was ce rtified following a three-month review
period for that particular schedule.49
7.19 With minor variations, most of the original ITA participants incorporated the ITA-related
concessions into their WTO Schedules by: (i) cons olidating in a single section of their WTO
Schedules the HS1996 tariff item numbers listed under both sections of Attachment A 50; (ii) listing
those product descriptions from Attachment A, Section 2 that were described as "[f]or Attachment B",
and all product descriptions from Attachment B in a unified, separate section or annex to their
schedules51; and (iii) attaching a "staging matrix" to their respective WTO Schedules, indicating the
duty reductions that would be applicable each year for each of the relevant tariff lines. 52 The majority

46 For further explanation, see fn. 39 above.
47 The EC Schedule (like other ITA participants' sc hedules) incorporates the terms "devices" and
"vacuum-fluorescence" in the product description for FPDs. These modifications are discussed in further detail
below.
48 Proposed schedules for the European Communities, India, Indonesia, Israel, Norway and Turkey
requests were circulated on 2 April 1997. The circulation of schedules of the remaining ITA participants was
delayed subject to domestic ratification proceedings. See G/IT/1 (28 July 1997), G/IT/1/Rev.1
(28 October 1997), and G/IT/M/1 (13 October 1997), paras. 2.1-2.13 (minutes of the first formal meeting of the
Committee Participants to ITA).
49 Modifications to the schedules of the following 14 ITA participants were certified in 1997: Canada
(WT/Let/ 158); European Communities (WT/Let/ 156); Hong Kong, China (WT/Let/160); Iceland
(WT/Let/159); India (WT/Let/181); Indonesia (WT/Let/157); Israel (WT/Let/174); Japan (WT/Let/138); Macao,
China (WT/Let/ 177); Malaysia (WT/Let/176); Norway (WT/Let/153); Singapor e (WT/Let/175); Turkey
(WT/Let/173); and the United States (WT/Let/182). Modifications to the following eight additional schedules
were certified in 1998: Australia (WT/Let/248); Costa Rica (WT/Let/196); Czech Republic (WT/Let/256);
Korea (WT/Let/249); Romania (WT/Let/260); Slovak Re public (WT/Let/258); Switzerland/Liechtenstein
(WT/Let/253); and Thailand (WT/Let/250).
50 In accordance with para. 2(b)(i) of the ITA Annex, some ITA participants included subdivisions,
based on their domestic tariff nomenclatures, in addition to the HS1996 six-digit codes listed in Attachment A.
For example, the European Communities included the eight-digit CN codes 8471 60 40 and 8471 60 90, in
addition to including the HS1996-based subheading 8471 60. Not all ITA participants conformed with this
approach.
51 In accordance with para. 2(b)(ii) of the ITA An nex, the majority of ITA participants listed 55
products (including 42 product descriptions from Attach ment A, Section 2 and 13 product descriptions from
Attachment B). See paragraph 7.10 above. Exceptionally, the United States included 8 additional products in
an annex to its Schedule, though the United States did not provide in writing a reason for doing so. These
aspects are discussed in further detail below.
52 The term "staging matrix" does not appear either in the ITA or in the ITA related concessions of the
EC Schedule, and it is used in these Reports for ease of refere nce only. Most ITA participants included such a
matrix in accordance with the "stages" of tariff rate reductions esta blished in para. 2(a)(i) of the ITA Annex
(also referred to in para. 2 of the ITA and para. 4 of the ITA Annex). Japan exceptionally did not include a
staging matrix in the modifications it proposed to refl ect its ITA-related concessions. WT/Let/138 (17 April
1994).

of ITA participants
53 included a "headnote" in advance of listing those product descriptions from
Attachment A, Section 2 that were described as "[ f]or Attachment B", and product descriptions from
Attachment B. As relevant to this dispute, th e headnote in the EC Sche dule (hereinafter the "EC
headnote") provides as follows:
"With respect to any product described in or for Attachment B to the Annex to the
Ministerial Declaration on Trade in Information Technology Products
(WT/MIN(96)/16), to the extent not specifically provided for in this Schedule, the
customs duties on such product, as well as any other duties and charges of any kind
(within the meaning of Article II:1(b) of the General Agreement on Tariffs and Trade
1994) shall be bound and eliminated as set forth in paragraph 2(a) of the Annex to the
Declaration, wherever the product is classified".
54
7.20 Due to the informal nature of the plurilateral technical discussions that took place during the
negotiation and implementation of the ITA, there is no formal record of ITA participants' discussions
on how modifications would be incorporated in to Members' WTO Schedules. Almost all ITA
participants included an identical or similarly wo rded headnote in their WTO Schedules but there is
no express requirement in the ITA itself or elsewhere to do so. The origin of the idea for including a
headnote as an aspect of the implementation of the ITA is not clear.
3. The EC Schedule of concessions
7.21 The European Communities sets forth its tari ff bindings in EC Schedule LXXX following the
conclusion of the Uruguay Round. 55 On 28 February 1996, the European Communities submitted
Schedule CXL to update its tari ff concessions and other commitments following enlargement of the
European Communities.56 Approximately one year later, on 1 April 1997, the European Communities
submitted WTO document G/MA/TAR/RS/16 proposi ng to implement its ITA commitments via
modifications to its Schedule.57 EC Schedule CXL was not certified until 19 March 2010 58; however,

53 Nineteen out of 24 of the original "ITA Schedules" (excl uding those of WTO acceding States or
separate customs territories) included a headnote in their WTO Schedules employing nearly identical language.
The WTO Schedules of Japan and Switzerland/Lichtenstein, in particular, do not contain a headnote like those
appearing in the WTO Schedules of other ITA participants. Japan included similar, though not identical,
language in note 3 of the "Notes to Attachment II to Section II of Part I" to its Schedule (See WT/Let/138, p. 5;
(17 April 1994). Switzerland/Lichtens tein (participating jointly) did not include a headnote at all in their
Schedules (see WT/Let/253 (20 November 1998)). Differences among the headnotes appearing in ITA
participants' Schedules and variations in the Schedules of Japan and Switzerland/Lichtenstein will be discussed
in further detail below.
54 WT/Let/156 (Exhibit US-7).
55 On 15 December 1994, the European Commun ities notified its intention to withdraw tariff
commitments previously made by Austria in Schedule XXXII, Finland in Schedule XXIV, Sweden in Schedule
XXX and the European Communities of 12 in Schedule LXXX. See G/L/65/Rev.1, 14 March 1996,
paragraph 1. See also GATT document L/7614 (15 December 1994).
56 See G/L/65/Rev.1, 19 March 1996, paragraph 3. The European Communities subsequently proposed
a number of modifications to Schedule CXL which include, but are not limited to G/L/65/Rev.1/Add.2 (21
October 1997) and Corr.1 (10 February 1998), G/L/65/Rev.1/Add.3 (23 November 1998), G/L/65/Rev.1/Add.4
(1 July 1999) and G/L/65/Rev.1/Add.5 (22 February 2000). See also a summary by the WTO Secretariat in
G/MA/W/23/Rev.6 (19 March 2009).
57 Rectifications and Modifications of Schedules, G/MA/TAR/RS/16 (2 April 1997). The European
Communities requested modifications pursuant to the 1980 Procedures, discussed in paragraph 7.20 above.
58 WT/Let/666 (19 March 2010).

the proposed modifications in G/MA/TAR/RS/16 we re certified by the WTO Director General in
WTO Document WT/Let/156 and became effective on 2 July 1997.
59
7.22 The ITA-related commitments implemented in the EC Schedule follow the format used by
many ITA participants, as discussed in paragra ph 7.19 above. In particular, the European
Communities consolidated in a single section all the HS1996 codes appearing in both sections of
Attachment A. In many cases, the European Co mmunities introduced further sub-divisions of its
domestic nomenclature (the "Combined Nomenc lature" or "CN") at the eight-digit level.
60 I n
addition, the European Communiti es attached an annex to its Schedule (the "Annex to the EC
Schedule") that includes a headnote (the "EC headnote") and a consolidated list of product
descriptions from Attachment A, Section 2, labelle d "[f]or Attachment B", and those descriptions
from Attachment B itself.
7.23 The EC headnote appears at the beginning of the first pa ge of the Annex to the EC Schedule,
as follows:
EC 26 March 1997
With respect to any product described in or fo r Attachment B to the Annex to the Ministerial
Declaration on Trade in Information Technology Products (WT/MIN(96)/16), to the extent not
specifically provided for in this Schedule, the customs duties on such product, as well as any
other duties and charges of any kind (within th e meaning of Article II:1(b) of the General
Agreement on Tariffs and Trade 1994) shall be bound and eliminated as set forth in
paragraph 2(a) of the Annex to the Declaration, wherever the product is classified.

7.24 Following the EC headnote, the Annex to the EC Schedule lists 55 product descriptions. As
explained in footnote 51 above, these comprise 42 pr oduct descriptions from Attachment A, Section 2
that are described with the comment "[f]or Atta chment B" and 13 products descriptions listed in
Attachment B. The product descriptions appear in a left-hand column, labelled "Description". A
right-hand column, labelled "HS", includes tariff ite m numbers at the eight-digit level next to each
product description. The following is an excerpt showi ng the first two entries in the Annex to the EC
Schedule:
Description HS
Quartz reactor tubes and holders designed for insertion into diffusion
and oxidation furnaces for production of semiconductor wafers

70200005

Chemical vapour deposition apparatus for semiconductor production

84198920

7.25 Of the 55 product descriptions in the Annex to the EC Schedule , 30 have only one code listed
next to them, while 25 have two or more codes listed next to them. All the codes that appear in the
Annex to the EC Schedule also appear in the separ ate, consolidated section of the EC Schedule that
lists the HS1996 codes from Sections 1 and 2 of Attachment A . All these codes also appear in the

59 Document WT/Let/156 (15 August 1997) (Exhibit US-7).
60 The CN was established by Council Regulation (EEC) No. 2658/87 of 23 July 1987 on the tariff and
statistical nomenclature and on the Common Customs Tariff (OJ L 256/1, 7 September 1987, as amended)
("Council Regulation No. 2658/87") (Exhibits EC-49; US-13; TPKM-5). The first six digits of the CN are
based on the HS. Any digits beyond the HS six-digit level are CN-specific.

"staging matrix" that appears in the EC Schedule.
61 The following is an excerpt showing the first
entry in the Staging Matrix to the EC Schedule:
EC 26 March 1997
ex HS Base rate July 1997 1998 1999 2000 2001 2002 2003 2004 2005
 38180010 6.9 5.2 3.5 1.7 0.0

7.26 The European Communities has ma de several modifications to its ITA-related concessions
since the modifications in document WT/Let/156 beca me effective on 2 July 1997. For example, on
4 February 1998, the European Commun ities replaced all references to codes 8471 30 00, 8471 41 90,
8471 49 90, 8471 50, 8528 12 10, 8528 13 10 and 8543 89 17 with codes 8 471 30 91, 8471 41 91,
8471 49 91, 8471 50 91, 8471 30 10, 8471 41 30, 8471 49 30, 8471 50 30, 8471 30 99, 8471 41 99,
8471 49 99 and 8471 50 99. The European Communities explained in WTO Document
G/MA/TAR/RS/47, that "[t]he World Customs Or ganisation has debated the classification of
multimedia personal computers and the general view, which prevailed, was that such products no matter
what their principal function ar e to be classified within 8471" . WTO document G/MA/TAR/RS/47
indicates further that "[t]he European Communities has implemented this classification opinion by
transferring the products concerned, together w ith their accompanying rates of duty, from 8528 and
8543 to 8471".62 Each of the new headings was specified with a final duty rate of zero. References to
the new codes were included in the Annex to the EC Schedule next to the product descriptions for
"Computers, etc." and "Network equipment". 63 These modifications were certified by the WTO
Director General in WTO Document WT/Let/261 and became effective on 10 May 1998.64
7.27 On 22 February 2000, the European Communities circulated an amendment to its then-
proposed Schedule CXL, explaining that ITA-rela ted modifications in document G/MA/TAR/RS/16
and G/MA/TAR/RS/47 (that were certified in doc uments WT/Let/156 and WT/Let/261, as discussed
in paragraphs 7.21 and 7.26 above , respectively) had "overtaken" those commitments proposed in
Schedule CXL.65
7.28 On 29 November 2000, the European Communities notified that it would add a reference to a
new code (tariff item number 8528 12 91) next to the product description for "set-top boxes which
have a communication function" as it appears in the Annex to the EC Schedule. 66 The European
Communities explained in WTO document G/MA/TAR/RS/74 that "the European Communities have
decided to join some other ITA participants in classifying certain types of ITA set-top boxes under HS
Sub-heading 8528 12".
7.29 When EC Schedule CXL was certified on 19 March 2010 in WTO document WT/Let/666
67,
the WTO Director General expressly noted that certification of EC Schedule CXL was "without

61 For further explanation of this matter, see para. 7.19 above.
62 G/MA/TAR/RS/47 (10 February 1998), p. 3.
63 The European Communities proposed to modify the references as follows (See G/MA/TAR/RS/47
(10 February 1998), p. 5):
"Computers etc. Replace by following reference: 8471.10.90 (unchanged), 8471 30 10,
 8471.30.91, 8471.30.99, 8471.41.30, 8471.41.91, 8471.41.99, 8471.49.30,
8471.49.91, 8471.49.99, 8471.50.30, 8471.50.91, 8471.50.99
Network equipment replace 8471.50.90 by 8471.50.99".
64 WT/Let/261 (25 November 1998).
65 G/L/65/Rev.1/Add.5, para. 2 (22 February 2000).
66 G/MA/TAR/RS/74 (15 December 2000) (Exhibit US-26).
67 WT/Let/666 (19 March 2010). See also para. 7.21 above.

prejudice" to ITA-related concessions that were previously certified in documents WT/Let/156 and
WT/Let/261.
68 At this time, the WTO Director-Gener al additionally certified the amendment
pertaining to set-top boxes proposed in G/MA/TAR /RS/74 (discussed in paragraph 7.28) in WTO
document WT/Let/667.69
7.30 The parties to this dispute agree that th e concessions contained in WTO documents
WT/Let/156, WT/Let/261 and G/MA/TAR/RS/74 (now certified as document WT/Let/667) comprise
those relevant to this dispute.70
4. The Harmonized System (HS)
(a) The Harmonized System
7.31 The "Harmonized Commodity Description and Coding System" (the "HS") was established
under the "International Convention on the Harmoni zed Commodity Description and Coding System"
("HS Convention")71, and entered into force on 1 January 1988.72
7.32 The preamble of the HS Convention sets out th e objectives of the HS including "to facilitate
international trade", "to facilitate the collection, co mparison and analysis of statistics", "to reduce the
expense incurred by re-describing, reclassifyi ng and recoding goods as they move from one
classification system to another in the course of international trade", and "to facilitate the
standardisation of trade documentation and the transmission of data". 73 The HS Convention aims to
achieve these objectives through the HS, which est ablishes an international standard for product
nomenclature for more than 5,000 commodity groups, and includes approximately 1,200 headings that
are grouped into 21 sections comprising 99 chapters. 74 Product groups are organized systematically
and each group is identified by a "heading", represen ted as a four-digit code. The first two digits
indicate the chapter to which they correspond, while the two subsequent digits indicate the position
within the heading of a particular chapter. HS headings are sometimes further divided into

68 G/L/65/Rev.1/Add.5, para. 2 (22 February 2000).
69 WT/Let/667 (19 March 2010).
70 In their responses to Panel question No. 8, the par ties agreed that the ITA-related concessions by the
European Communities are those contained in documents WT/Let/156, WT/Let/261 and G/MA/TAR/RS/74.
71 The HS Convention is available in Exhibits EC-15; US-8; TPKM-6.
72 Exhibits EC-15; US-8; TPKM-6. The HS has its origin in the "Geneva Nomenclature", which came
into existence on 1 July 1937 in the form of the 1937 Draft Customs Nomenclature of the League of Nations .
The Geneva Nomenclature was subsequently replaced in 1959 by the Brussels Convention on Nomenclature for
the Classification of Goods in Customs Tariffs ("Brussels Tariff Nomenclature"). The Brussels Tariff
Nomenclature came into force on 11 September 1959, following the adoption on 1 July 1955 of a Protocol of
Amendment establishing a revised version of the Nomencla ture. The Brussels Tariff Nomenclature was in turn
renamed the Customs Co-operation Council Nomenclature in 1974 (the "CCCN"). The Customs Co-operation
Council Nomenclature was replaced by the HS on 1 January 1988, wh en the HS Convention entered into effect.
See also the Panel Report on EC – Chicken Cuts, para. 7.186.
73 Second, Third and Fourth tiret s of the Preamble of the HS C onvention (Exhibits EC-15; US-8;
TPKM-6).
74 The HS is set out as an Annex to the HS Convention and is an integral part thereof (see Article 1(a)
and Article 2 of the HS Convention) (Exhibits EC-15; US-8; TPKM-6). Strictly speaking, the HS has 97
chapters. Our indication of the HS as having only 96 ch apters is because chapter 77 is "reserved for possible
future use in the Harmonized System", and chapters 98 and 99 are "reserved for special uses by Contracting
parties". These chapters are therefore empty.

subheadings, which are identified by a six-digit c ode, which is the maximum level of disaggregation
permitted by the HS. The last two digits then indicate the relevant HS subheading.
75
7.33 The HS Convention requires contracting parties to the HS to ensure th at their laws are in
conformity with the HS. Article 3.1(a)(i) of th e HS Convention provides in particular that HS
contracting parties shall use, in respect of their cu stoms tariff and statistical nomenclatures, all the HS
headings and subheadings "without addition or modi fication, together with their related numerical
codes". Article 3.3 of the HS Convention permits HS contracting parties to create sub-divisions
classifying goods beyond the six-digit level (for example, at the eight-digit level or more), provided
that any such subdivision is added and coded at a level beyond that of the six-digit numerical code as
it appears in the HS. The European Communities' dom estic nomenclature (i.e., the CN) is an example
thereof.76
(b) The HS General Rules for Interpretation ("GIRs")
7.34 Pursuant to Article 3.1(a)(ii) of the HS Conve ntion, each contracting party also undertakes to
apply the "General Rules for the Interpretation of the Harmonized System and all the Section, Chapter
and Subheading Notes, and that it shall not modify the scope of the Sections, Chapters, headings or
subheadings of the HS". 77 The Annex to the HS Convention sets out six general rules for the
interpretation and uniform application of the HS ("GIRs "). The first five rules relate to the four-digit
headings, while rule six relates to the classification in the five- or six-digit subheading. The GIRs
must be applied in an hierarchical order. In ot her words, a contracting party should begin with the
first GIR and proceed to subsequent GIRs only if necessary.78
(c) HS Explanatory Notes (HSEN) and opinions by the WCO Council
7.35 Article 3(1)(a)(i) of the HS Convention stipulates that HS contracting parties must use all the
headings and subheadings of the HS without additi on or modification, together with their related
numerical codes and that each contracting party must follow the numerical order of the HS. Article 6
of the HS Convention establishes the HS Committee composed of representatives from each of the
Contracting Parties that meets at least twice annuall y. Under Article 7(1)(b) of the HS Convention,
the HS Committee prepares HS Explanatory Notes (HSEN), classification opinions and other advice
as guidance to secure uniformity in the interpretation of the HS. The HSEN provide guidance for
interpreting the terms of a specific HS heading. Classification opinions are opinions of the HS
Committee regarding the customs classification of a specific product.

75 See Appellate Body Report on EC – Chicken Cuts , para. 230 (quoting a response by the WCO
Secretariat).
76 See Article 3 of Council Regulation No. 2658/87 (Exhibits EC-49; US-13 and TPKM-5); see also
paragraphs 7.39-7.40 below. The HS was approved on behalf of the European Communities by Council
Decision 87/369/EEC of 7 April 1987 (OJ 1987 L 198/1), (Exhibits EC-15; US-8; TPKM-6). The CN not only
reproduces the headings and subheadings of the HS up to the six-digit level, but also contains codes at seven and
eight-digit levels. See also fn. 60 above.
77 See also Article 1(a) of the HS Convention (Exhibits EC-15; US-8; TPKM-6).
78 GIR 1 explains that classification should be based, first, on the terms of the headings, relevant
Section or Chapter Notes pursuant to GIR 1 and provided such headings or Notes do not otherwise require,
according to the provisions of GIRs 2-6. Moreover , according to the Explanat ory Notes to GIR 1 "the
expression 'provided such headings or Notes do not otherwise require' is intended to make it quite clear that the
terms of the headings and any rela tive Section or Chapter Notes are paramount, i.e., they are the first
consideration in determining classification."

(d) Amendments to the HS
7.36 The preamble of the HS Convention recognizes as an important objective that of "ensuring
that the HS is kept up-to-date in the light of cha nges in technology or in patterns of international
trade".
79 In this respect, Article 7.1(a) of the HS Convention provides that one of the functions of the
HS Committee is "to propose such amendments to th is Convention as may be considered desirable,
having regard, in particular, to the needs of u sers and changes in technology or in patterns of
international trade". Since its entry into force on 1 January 1988, the HS has been partially amended
every four to six years. Such amendments have come into force on 1 January 1992 (HS1992),
1 January 1996 (HS1996), 1 January 2002 (HS2002) and 1 January 2007 (HS2007).80
7.37 Amendments to the HS must be approved by the HS Committee and subsequently by the
Council, the highest governing body of the World Customs Organization (WCO) 81. Each of these
amendments included several changes to product codes or descriptions. When a recommendation to
amend the HS is approved, HS contracting parti es are obliged to implemen t these changes in their
national tariff nomenclature.82 Modifications have been partial in nature, leaving various HS headings
and subheadings unchanged from one version to the next.
5. Tariff classification in the European Communities
7.38 The following summary is intended only to aid the general understanding of the tariff
classification system of the European Communities. Aspects of this system will be discussed in
greater detail in sections where such discussion has relevance.
(a) The Combined Nomenclature
7.39 The European Communities applies a common customs tariff vis-à-vis third countries. Article
20(3) of the Community Customs Code ("CCC") 83 clarifies that the Customs Tariff of the European
Communities comprises, inter alia , a "Combined Nomenclature" of goods (CN) and conventional
duties.84 The Common Customs Tariff provides for the applicable duties.85

79 Preamble of the HS Convention, thirteenth recital.
80 For an explanation by the WCO Secretariat of the list of the amendments, see: TAR/W/91 (HS1996),
G/MA/W/26 (HS2002), G/MA/W/76 (HS2007).
81 The Preamble of the HS Convention indicates that it has been "established under the auspices of the
Customs Co-operation Council". Paragraph 1(f) of the HS Convention indicates that "the Council" refers to the
Customs Co-operation Council. The Council is headed by th e Secretary General of the Council. See Para. 1(g)
of the HS Convention. Article 8.1 of the HS Convention provides that "the Council shall examine proposals for
amendment of this Convention, prepared by the Harm onized System Committee, an d recommend them to the
Contracting Parties under the procedure of Article 16 unless any Council Member which is a Contracting Party
to this Convention requests that the proposals or any part thereof be referred to the Committee for re-
examination".
82 See para. 7.35 above.
83 Council Regulation (EEC) No. 2913/92 of 12 October 1992 establishing the Community Customs
Code (OJ L 302/1, 19 October 1992), as amended (the "CCC") (Exhibits US-19; TPKM-16).
84 Annex I of Council Regulation No. 2658/87, Part One, Preliminary provisions, Section I – General
Rules, "B. General rules concerning duties", explains in its general rules that conventional duties are "[t]he
customs duties applicable to imported goods originating in countries which are Contracting Parties to the
General Agreement on Tariffs and Trade or with which the European Community has concluded agreements
containing the most-favoured-nation tariff clause". The Annex states further that "[u]nless the context requires
otherwise, these conventional duties are applicable to goods, other than those referred to above, imported from
any third country" (Exhibits EC-49; US-13; TPKM-5).

7.40 The CN, which is set forth in Annex I to Council Regulation No. 2658/87, is established by
the European Commission (the "Commission") and comprises: (i) the HS nomenclature;
(ii) Community subdivisions to that nomenclature, referred to as "CN subheadings" and
(iii) preliminary provisions, additional section or chapter notes and footnotes relating to CN
headings".
86 These additional section and chapter notes a nd footnotes are intended to further define
the scope of the CN. Products are groupe d in chapters, divided over sections. 87 Both section and
chapter notes assist in determining the customs classification of goods. 88 When notes are intended to
be relevant for the entire section, they are set out as section notes. When they relate only to a specific
chapter, it is a chapter note. The section notes and ch apter notes, if any, can be found at the beginning
of each section and chapter, respectively. Annex I to Council Regulation No. 2658/87 is divided into
three parts, entitled: "Part one – Preliminary provisions"; "Part two – Schedule of customs duties" and
"Part three – Tariff annexes".
7.41 "Part one — Preliminary provisions", contains two sections. Section I, entitled "General
rules", includes inter alia, the General Rules for the Interpreta tion of the CN (CN GIRs), which are
identical to those of the HS. 89 Section II, entitled "Special provisions", deals with specific issues
relating to goods for certain categories of ships, boats and other vessels and for drilling or production
platforms; civil aircraft and goods for use in ci vil aircraft; pharmaceutical products; containers and
packing materials; or signs, abbreviations and symbols.
7.42 "Part two — Schedule of customs duties", contains the CN codes and conventional duties.
Each CN code is an eight-digit number, reproducing the headings and subheadings of the HS up to the
six-digit level, with the seventh and eighth digits being CN-specific. 90 As a national nomenclature of
a contracting party to the HS, the CN has th e same Sections and chapters as the HS. 91 The CN also
reproduces all the HS Section, Chapter, and Subheading Notes without modifying their scope, with
additional notes particular to the CN.
92 Each CN chapter comprises a table with four columns,
labelled from left to right as "CN code"; "Descri ption"; "Conventional rate of duty (%)", and
"Supplementary unit".
7.43 "Part three — tariff annexes" contains agricultu ral annexes, lists of pharmaceutical substances
which qualify for duty-free treatment, information on quotas, and information on "favourable tariff
treatment by reason of the nature of the goods".

85 Article 20(1) of the CCC.
86 Article 1 of Council Regulation No. 2658/87 (Exhibits EC-49; US-13; TPKM-5).
87 As discussed in fn. 74 above in relation to the HS, the CN includes 99 chapters. Only 97 are used,
however. In particular, CN chapters 77 and 99 are reserv ed for possible future uses. Unlike in the case of the
HS, the CN includes a 98th chapter that covers "complete industrial plants".
88 CN GIR Rule 1 provides that customs classification shall be determined according to the terms of the
headings and any relative section or chapter notes; see paragraph 7.41.
89 See para. 7.34 above. According to Article 3 of the HS Convention, the European Communities
must apply the HS GIRs. In the case of the CN GIRs, the first five rules re late to the six-digit headings while
rule 6 relates to the CN breakouts, i.e. the eight-digit subheading. The GIRs are part of the CN (they are
included in its "Part one – Preliminary provisions") and accordingly, are binding.
90 Article 3 of Council Regulation No. 2658/87 (Exhibits EC-49; US-13; TPKM-5). See also para. 7.33
above.
91 See also fn. 87 above.
92 As indicated in para. 7.33 above, HS contracti ng parties are required to use all the headings and
subheadings of the HS without addition or modification, together with their related numerical codes, and each
contracting party must follow the numerical order of the HS.

7.44 In accordance with Article 2 of Council Regulation No. 2658/87, as amended, the
Commission has also established the integrated tariff of the European Communities, known as the
"Taric".
93 The Taric is based on the CN, with further s ubdivisions at the ninth- and tenth-digit levels,
referred as the "Taric subheadings". These a dditional tariff subheadings are utilized for the
implementation of specific policies, such as, for example, tariff suspensions; tariff quotas; tariff
preferences (including tariff quotas and ceilings); the generalized system of tariff preferences
applicable to developing countries; anti-dum ping and countervailing duties; countervailing
charges; agricultural components and others. The Taric is part of the Common Customs Tariff.94
7.45 Pursuant to Article 12 of Council Regulation No. 2658/87, as amended, the Commission must
publish each year, before 31 October, a consolid ated version of the CN, incorporating the
amendments of the past year. The consolidated version of the CN – as a Commission Regulation
amending Annex I to Regulation No. 2658/87 – is pub lished in the Official Journal of the European
Union (the "EU Official Journal"). 95 It applies as of 1 January of the year following its official
publication. To avoid confusion, the year of application is indicated. The CN2007, for example,
indicates that this was the CN version applicable in 2007. The CN currently applicable as of the date
of the issuance of these Reports is the CN2010.
(b) The Customs Code Committee and the EC Comitology procedure
7.46 According to Council Regulation No. 2658/87, as amended, the Commission establishes and
manages the CN and Taric. 96 Article 9 of Council Regulation No. 2658/87, as amended, authorizes
the Commission to adopt measures relating to th e application of the CN, such as classification
regulations (these are Commission Regulations) and explanatory notes to the CN ("CNEN"), in
accordance with the procedure set out in Article 10 of that Regulation. Article 10 states that the
Commission may adopt such measures with the assi stance of the "Customs Code Committee" as per
the "management procedure" in Article 4 of Council Decision 1999/468/EC (the "Comitology
Decision").
97
7.47 The Customs Code Committee consists of a representative of the Commission service (as
chairperson) and representatives of the governme nts of each EC member State. Under the
"management procedure", the Commission service submits draft implementing measures related to
classification to the "Comitology committee", which delivers an opinion in favour or against (or
reaches "no opinion") on these draft measures by means of a vote by EC member State representatives
prior to adoption by the Commission.
98 The Comitology committee opinion is handled through voting
by member States representatives. Article 4(2) of the Comitology Decision explains that the opinion

93 The acronym "TARIC" corresponds to its title in the French Language: "Tarif Intégré de la
Communauté" (See also Exhibit US-12, containing the Commission's information on Taric).
94 See Exhibit US-12, p. 5.
95 The CN2009 version, for example, was established by Commission Regulation (EC) No. 1031/2008
of 19 September 2008, amending Annex I to Council Regulation No. 2658/87, OJ L 291/1, 31 October 2008
(Exhibits US-11; TPKM-21).
96 See Council Regulation No. 2658/87, Articles 1, 2 and 6 (Exhibit EC-49; US-13; TPKM-5).
97 Exhibits EC-51 and TPKM-18. Article 10 of Council Regulation No. 2658/87 cross-refers to Article
7 of the Comitology Decision, which provides that each Committee shall adopt its own rules of procedure. The
Rules of Procedure of the Customs Code Committee were submitted in Exhibit EC-52.
98 European Communities' first written submission, paras. 292-293; Article 4.2 and 4.3 of the
Comitology Decision (Exhibit EC-51; TPKM-18).

"shall be delivered by a qualified majority of members, excluding a vote by the chairperson".
99 A
vote can result in three possible outco mes: (i) a qualified majority vote in favour of the proposal, i.e.,
a favourable opinion is reached; (ii) a qualified majority vote against the proposal, i.e., a non-
favourable opinion is reached; or (iii) there is a lack of a qualified majority either in favour or against
the proposal, i.e., a no-opinion result. Where either a favourable opinion or no opinion is reached, the
Commission may adopt a proposed measure.
100 But, if a non-favourable opinion is rendered, the
Commission must defer to the European Council, which can itself reach a different decision by a
qualified majority, within three months.101 If the European Council takes no decision within this time
limit, the Commission adopts the proposed measure.102
7.48 In addition to the CNEN and Classification Regulations, Article 8 of Council Regulation
No. 2658/87, as amended, also provides that "customs items" can be submitted by the Chairman of the
Customs Code Committee for examination, either on his or her own initiative or at the request of a
representative of an EC member State. Under this "Article 8 procedure", the Customs Code
Committee functions as a "discussion forum" betw een the Commission and the EC member States,
and not as the "Comitology Committee".
103 The result of such discussion is reflected in the minutes
of the meeting as an "Article 8" topic.
7.49 Prior to each Customs Code Committee meeti ng, the agenda of items on which the
Comitology Committee is requested to give its opinion is circulated. 104 After each meeting, the
minutes of the meeting are drawn up and circulated amongst the EC member States' representatives.105
(c) Interpretation of the CN
7.50 In addition to the GIRs, the HS Section and Chapter Notes and CN additional notes discussed
in paragraphs 7.40 and 7.41 above, the Commission h as at its disposal a vari ety of tools to ensure
uniform classification practice throughout the Community. These tools include (i) HSEN and
Opinions; (ii) EC classification regulations; (iii) CNEN; (iv) Opinions of the Customs Code
Committee in the framework of Article 8 of Counc il Regulation No. 2658/87; and (v) Binding Tariff
Information decisions ("BTIs"). These instruments are described in more detail below.
(i) HS Explanatory Notes (HSEN) and Opinions by the HS Committee
7.51 HSEN and Opinions by the WCO Council may al so inform interpretation of the CN at the
six-digit level. These are discussed in paragraph 7.35 above.

99 Following the most recent enla rgement of the European Unio n on 1 January 2007, a qualified
majority constitutes 255 votes out of a total of 345 vot es. (see European Communities' first written submission,
para. 292, fn. 191).
100 European Communities' first written submission, paras. 292-293; Article 4.3 of the Comitology
Decision (Exhibits EC-51; TPKM-18).
101 European Communities' first written submission, paras. 292-293; Article 4.3 of the Comitology
Decision (Exhibits EC-51; TPKM-18). In the case the EC Council becomes involved, the Commission may
defer the application of the measure for a period of up to three months.
102 Article 4.3 and 4.4 of the Comitology Decision (Exhibits EC-51; TPKM-18).
103 See para. 7.47 above.
104 Article 3 of the Rules of Procedure of the Customs Code Committee (Exhibit EC-52).
105 Article 12.1 of the Rules of Procedure of the Customs Code Committee (Exhibit EC-52).

(ii) Classification Regulations
7.52 Pursuant to Article 9(1)(a) of Council Re gulation No. 2658/87, as amended, the Commission
may adopt regulations on the classification of goods . Such classification regulations are adopted by
the Commission in accordance with the "management procedure" discussed in paragraph 7.47 above.
The Commission may in practice first submit its proposed measure as an "item submitted to the
Customs Code Committee for examination under Ar ticle 8 of Regulation No. 2658/87", which may
lead to amendments to the original proposal. Once the Commission considers that its proposal is
finalized, it may again submit it to the Customs Code Committee for an opinion.
7.53 Classification regulations that are published in the EU Official Journal are binding throughout
the European Communities.
106 In general, the preamble of a classification regulation explains that the
regulation is necessary "in order to ensure uniform application of the Combined Nomenclature
annexed to the said Regulation". 107 In their main text, classification regulations contain a detailed
description of one or several goods, provide for the a pplicable CN code, and give the reasons for such
classification.108 However, classification regulations do not "amend" the CN.109
(iii) Explanatory Notes to the Combined Nomenclature (CNEN)
7.54 The Commission may also issue CNEN in accordance with Article 9(1)(a) of Council
Regulation No. 2658/87, as amended, for interpreta tion of the CN. The Court of Justice of the
European Union ("European Court of Justice") has concluded that CNEN are not "legally binding",
but provide "an important aid in the interpretation of the CN". 110 As with classification regulations,
CNEN are adopted by the Commission in accordan ce with the "management procedure" of the
Comitology Committee discussed in paragraph 7.47 above. However, CNEN are distinct from the
CN Section and Chapter notes.
111
(iv) Statements of the Customs Code Committee in the framework of Ar ticle 8 of Regulation
No. 2658/87
7.55 The Statements of the Customs Code Committee in the framework of Article 8 of Regulation
No. 2658/87, which are discussed in paragraph 7.48 a bove, may also be considered when interpreting
the CN. Article 8 states that the Customs Code Committee may examine any matter referred to it by
its Chairman, either on his or her own initiative or at the request of a representative of a EC member
State (a) concerning the CN; (b) concerning the Ta ric nomenclature and any other nomenclature
which is wholly or partly based on the CN or wh ich adds any subdivisions to it, and which is
established by specific Community provisions with a view to the application of tariff or other
measures relating to trade in goods. In practi ce, the Customs Code Committee thus examines

106 See Article 288(2) of the Treaty on the functioning of the European Union, formerly, Article 249(2)
of the EC Treaty.
107 See, e.g., Commission Regulation (EC) No. 517/1999 of 9 March 1999 concerning the classification
of certain goods in the Combined Nomenclature, OJ L 61/23, 10 March 1999 (Exhibits US-59; TPKM-35).
108 Classification regulations may also contain illustratio ns of the products (see, e.g., Exhibits US-59;
TPKM-35).
109 European Court of Justice (GoldStar Europe), para. 19 (Exhibit TPKM-9); European Court of
Justice (Gebr. Vismans Nederland BV), para. 13 (Exhibit TPKM-10). See also the Panel Report on
110 See, e.g., European Court of Justice (DFDS BV), para. 28 (Exhibits US-16; TPKM-37); European
Court of Justice (Clees), para. 12 (Exhibits EC-57; US-17). See also the Panel Report on EC - Selected Customs
Matters, para. 2.39 and the Panel Report on EC - Chicken Cuts, para. 7.412.
111 See para. 7.40 above.

questions concerning the interpretation of Commun ity Customs law such as, for example, tariff
classification issues. The Customs Code Committe e operates as a specific forum for cooperation
between the EC member States and the Commission. The Customs Code Committee's opinions on
questions relative to the application and interpreta tion of the CN are not legally binding. However,
the European Court of Justice has held that such opinions constitute an important means of ensuring
the uniform application of the common customs tariff by the authorities of the member States and as
such can be considered as a valid aid to the interpretation of the tariff.
112
7.56 Through an online "Comitology register" 113, one can access the agendas of the Customs Code
Committee meetings; certain draft implementing measures; summary records of meetings and
summaries of voting results. Other documents ar e considered confidential and access must be
requested. Access, however, can be denied on certain grounds.114
(v) Binding Tariff Information (BTI)
7.57 The European Communities also h as an advance ruling system in tariff classification matters,
known as the Binding Tariff Information ("BTI"). BTIs are issued by the customs authorities of the
EC member States upon request by importers, in wr iting and free of charge, except for special costs
incurred by the customs authorities for certain procedures, such as necessary laboratory analysis of the
products.115 The customs authority specifies the customs cl assification code of the product in a BTI.
BTIs are valid throughout the European Communitie s, regardless of their location of issuance 116, and
are generally valid for a period of six years. 117 Article 12(5)(a) of the CCC explains, however, that
BTI shall cease to be valid: (i) where a regulation is adopted and the BTI no longer conforms to this
regulation118; or (ii) where a BTI is no longer compatible with the interpretation of the CN by reason
of amendments to the CNEN. In both cases, BTIs can still remain valid for a three-month grace
period.119
7.58 Issued BTIs are maintained in a database (the EBTI database) that is managed by the
Commission, in particular, the Directorate General for Taxation and Customs Union (DG
TAXUD).120 The Commission has issued "administrative guidelines" on the EBTI and its operation in
order to contribute to the harmonization of natio nal practices in the area of Binding Tariff
Information.121 The content of the EBTI database largel y depends on the information transmitted by

112 Panel Report on EC – Selected Customs Matters , para. 2.40 (citing European Court of Justice
(Dittmeyer), para. 4).
113 See http://ec.europa.eu/transparency/regcomitology/index.cfm.
114 See Article 15 of the Rules of procedure of the Customs Code Committee: "The principles and
conditions concerning public access to the committee's documents shall be the same as those defined in
Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001. It is for the
Commission to take a decision on requests for access to these documents" (Exhibit EC-52).
115 Article 11.2 of the CCC (Exhibits US-19; TPKM-16).
116 Article 11 of Commission Regulation (EEC) No. 2454/93 of 2 July 1993 laying down provisions for
the implementation of Council Regulation (EEC) No. 2913/92 of 12 October 1992 establishing the CCC, (OJ L
253/1, 11 October 1993) (Exhibit US-21).
117 Article 12(4) of the CCC (Exhibits US-19; TPKM-16).
118 This could, e.g., be the case with a classifica tion regulation classifying a similar product in a
different tariff heading.
119 Classification Regulations, e.g., normally state that a BTI "issued by the customs authorities of
Member states, which is not in accordance with this Regulation, can continue to be invoked for a period of three
months under Article 12(6) of Regulation (EEC) No. 2913/92." (Exhibit TPKM-35).
120 See the BTI Guidelines, p.4 (Exhibits US-18; TPKM-85); Panel Report on EC - Selected Customs
Matters, para. 7.123.
121 See the BTI Guidelines, point "1. Objectives of the Guidelines" (Exhibits US-18; TPKM-85).

the national customs authorities. A limited version of the database is accessible to the public via the
internet. This version of the EBTI lists the following information: the BTI's reference (each BTI has a
unique reference that includes the International Or ganization for Standardization (ISO) country code,
followed by a series of numbers to represent the y ear of issue and/or an administrative code); the
issuing country; the start and end dates of va lidity; the nomenclature code; the classification
justification (most often limited to a reference to the applicable GIR of the CN); the language of
issuance; the place and date of issuance with identification of the issuing authority; a brief description
of the goods; some national and/or Commission keywords; and any applicable images or
illustrations.
122 A more complete version of the EBTI-d atabase is exclusively available to the
Commission and issuing authorities of the member States. This version contains additional
information of a confidential nature, such as th e name and address of the applicant/holder, the
composition of the product and its trade name and any additional information that the applicant
considers confidential.123 Most BTIs submitted in this dispute were extracted from the public EBTI
database.
C. GENERAL ISSUES
1. Burden of proof
7.59 The Panel recalls the general principles app licable to burden of proof in WTO dispute
settlement, i.e., that parties claiming a violation of a provision of a covered agreement by another
Member must assert and prove its claim. 124 In US – Wool Shirts and Blouses the Appellate Body
stated 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, in most ju risdictions, that the burden of proof rests
upon the party, whether complaining or defending, who asserts the affirmative of a
particular claim or defence. If that pa rty adduces evidence sufficient to raise a
presumption that what is claimed is true, the burden then shifts to the other party, who
will fail unless it adduces sufficient evidence to rebut the presumption" (original
footnote omitted).
125
7.60 Furthermore, in Canada – Dairy (Article 21.5 New Zealand and US II) the Appellate Body
stated explicitly that:
"as a general matter, the burden of proof rests upon the complaining Member. That
Member must make out a prima facie case by presenting sufficient evidence to raise a
presumption in favour of its claim. If the complaining Member succeeds, the
responding Member may then seek to rebut this presumption. Therefore, under the
usual allocation of the burden of proof, a responding Member's measure will be
treated as WTO- consistent, until sufficient evidence is presented to prove the
contrary."
126

122 See the BTI Guidelines, point "5. Operation of the EBTI-database" (Exhibits US-18; TPKM-85).
123 Panel Report on EC – Selected Customs Matters, paras. 7.124-7.125.
124 Appellate Body Report on US – Wool Shirts and Blouses, DSR 1997: I, p. 16.
125 Appellate Body Report on US – Wool Shirts and Blouses, DSR 1997: I, p. 14.
126 Appellate Body Report on Canada – Dairy (Article 21.5 New Zealand and US II), para. 66.

7.61 The Appellate Body has also stated that "[i]t is also well to remember that a prima facie case
is one which, in the absence of effective refuta tion by the defending party, requires a panel, as a
matter of law, to rule in favour of the complaining party presenting the prima facie case."
127 T h e
Appellate Body has said that "[a] prima facie case must be based on 'evidence and legal argument' put
forward by the complaining party in relation to each of the elements of the claim. Complaining parties
may not simply submit evidence and expect the panel to divine from it a claim of WTO-inconsistency.
Nor may complaining parties simply allege facts without relating them to its legal arguments."128
7.62 The Appellate Body has also explained that "[i]n the context of the GATT 1994 and the WTO
Agreement, precisely how much and precisely what kind of evidence will be required to establish such
a presumption will necessarily vary from measure to measure, provision to provision, and case to
case."129
7.63 In addition, the Appellate Body in EC – Hormones established that "when that prima facie
case is made, the burden of proof moves to the defendi ng party, which must in turn counter or refute
the claimed inconsistency." 130 As the Appellate Body explained in Japan – Apples, the complaining
party is not responsible for providing proof of all f acts raised in relation to the issue of determining
whether a measure is consistent with a give n provision of a covered agreement. Although the
complaining party bears the burden of proving its case, the responding party must prove the case it
seeks to make in response.
131
7.64 In this dispute, the United States, Japan and Chinese Taipei have jointly claimed that the
European Communities acted inconsistently with provisions of Articles II:1(a) and (b), and
Articles X:1 and X:2 of the GATT 1994.132 The complainants thus bear the burden to demonstrate that
the European Communities acted inconsistently with these provisions.
2. Treaty interpretation
7.65 Article 3.2 of the DSU directs panels to cl arify the existing provisions of the covered
agreements "in accordance with customary rules of interpretation of public international law". It is
well settled in WTO case law that the principles codified in Articles 31 and 32 of the Vienna
Convention on the Law of Treaties ("Vienna Convention") are such customary rules. 133 These
provisions read as follows:
"Article 31: General rule of interpretation
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning
to be given to the terms of the treaty in their context and in the light of its object and
purpose.

127 Appellate Body Report on EC – Hormones, para. 104.
128 Appellate Body Report on US – Gambling, para. 140.
129 Appellate Body Report on US – Wool Shirts and Blouses, DSR 1997: I, p. 14.
130 Appellate Body Report on EC – Hormones, para. 98.
131 Appellate Body Report on Japan – Apples, para. 154.
132 Although the three complainants made a joint request for the establishment of this Panel, which
includes inter alia joint claims under Article X of the GATT 1994, Japan did not pursue these particular claims
in its submissions. See also para. 7.996 below; fn. 31 below and fn. 994 above.
133 Appellate Body Report on US – Gasoline, p. 17, DSR 1996:I, 3 at 15-16; Appellate Body Report on
India – Patents (US), para. 45; and Appellate Body Report on US – Shrimp, para. 114.

2. The context for the purpose of the inte rpretation of a treaty shall comprise, in
addition to the text, including its preamble and annexes:
any agreement relating to the treaty which was made between all the parties in
connection with the conclusion of the treaty;
any instrument which was made by one or more parties in connection with the
conclusion of the treaty and accepted by the other parties as an instrument related to
the treaty.
3. There shall be taken into account, together with the context:
any subsequent agreement between the par ties regarding the interpretation of the
treaty or the application of its provisions;
any subsequent practice in the applica tion of the treaty which establishes the
agreement of the parties regarding its interpretation;
any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so
intended.
Article 32: Supplementary means of interpretation
Recourse may be had to supplementary me ans of interpretation, including the
preparatory work of the treaty and the circumstances of its conclusion, in order to
confirm the meaning resulting from the application of article 31, or to determine the
meaning when the interpretation according to article 31:
leaves the meaning ambiguous or obscure; or
leads to a result which is manifestly absurd or unreasonable."
134
7.66 We recall that the Appellate Body in EC – Computer Equipment explained that tariff
concessions provided for in a Member's Schedule are pa rt of the terms of the treaty, and, "[a]s such,
the only rules which may be applied in interpreting the meaning of a concession are the general rules
of treaty interpretation set out in the Vienna Convention." 135
7.67 Accordingly, the Panel shall apply these principl es in interpreting the relevant provisions of
the covered agreements.
D. PRELIMINARY HORIZONTAL ISSUES
1. The status of the complainants as third parties in this dispute
7.68 On 23 January 2009, more than three months fo llowing the establishment of this Panel, on 23
September 2008, and one day after the composition of the Panel, on 22 January 2009, the United

134 The Vienna Convention on the Law of Treaties (the "Vienna Convention"), done at Vienna,
23 May 1969, 1155 U.N.T.S. 331; 8 International Legal Materials 679.
135 Appellate Body Report on EC – Computer Equipment, para. 84.

States, Japan and Chinese Taipei notified their inter est to participate as third parties to each others'
complaints.
136 On 4 February 2009, at the Panel's orga nizational meeting, the European Communities
commented on such requests and raised the issue of whether the complainants' participation as third
parties to each of the other two disputes for whic h they are not the main party serves any "legitimate
purpose", since the complainants had submitted a joint Panel request.
7.69 On 13 February 2009, the European Communities sent an email to the Panel stating that it
expected the Panel to make a ruling on the matter. On 17 February 2009, the Panel responded via a
fax to the parties, asking whether the European Communities was formally requesting a preliminary
ruling on the matter in accordance with paragraph 14 of the Panel's Working Procedures. In a letter
dated 20 February 2009, the European Communities informed the Panel that it did not intend to
request a formal ruling on the matter, but request ed the Panel to "take appropriate organizational
measures in the course of the proceedings in order to preserve a fair balance of procedural rights
between defendant and the complainants and, more generally, to ensure due process." The European
Communities expressed its particular concern that par ticipation of the main parties as third parties
could "disadvantage [it] by giving each [c]omplain ant additional opportunities for arguing their own
claims before the Panel, beyond those already provided" under the DSU and the Panel's Working
Procedures.
7.70 At the "open session" of the first substantive m eeting with the third parties, which took place
on Wednesday, 13 May 2009, the Panel reminded the complainants of the due process concerns raised
by the European Communities in its 20 February 2009 letter. In that meeting, the Panel noted that the
European Communities had not requested any rulin g on the matter and that, according to paragraph
14 of the Working Procedures, th e deadline for such a request ha d already passed. The Panel then
gave the complainants, as third parties to each others ' complaints, the opportunity to make third party
statements, but reminded them that any such stat ements should be made bearing in mind the due
process concerns raised by the European Communities in its 20 February 20 09 letter. None of the
complainants made any oral statements at this me eting. Subsequently, only Japan made a submission
responding to Panel questions to third parties in its role as a third party; however, the European
Communities has not raised any specific due process concern with Japan's responses made as a third-
party.
137
7.71 The Panel will briefly consider below concerns ra ised by the European Communities on the
participation of the main parties as third parties, as well as the complainants' notifications of their
interest to participate as third parties more than ten days after the date of the establishment of the
Panel. We recall, however, that the European Co mmunities did not formally request a formal ruling
by the Panel on this matter when given the opportunity to do so.
(a) The notification of interest to participate as third parties
7.72 Article 10 of the DSU provides in relevant part:

136 See triple-numbered document WT/DS375/9, WT/DS376/9 and WT/DS377/7 of 26 January 2009
(in particular, fn. 1).
137 Japan submitted responses to the Panel questions to the third parties after the first substantive
meeting. However, in its response, Ja pan solely referred to paragraphs fro m its responses to the questions from
the Panel, in its capacity as a main party to the disput e. Japan's comments therefore did not reflect additional
arguments that had not already been made.

"1. The interests of the parties to a dispute and those of other Members under a
covered agreement at issue in the dispute shall be fully taken into account during the
panel process.
2. Any Member having a substantial inte rest in a matter before a panel and
having notified its interest to the DSB (refe rred to in this Understanding as a "third
party") shall have an opportunity to be heard by the panel and to make written
submissions to the panel. These submissions shall also be given to the parties to the
dispute and shall be reflected in the panel report."
7.73 Although Article 10 is silent on the period of time Members have to notify their interest to
participate as third parties in a given disput e, we note the following GATT Council Chairman's
Statement of June 1994 discussed notification within a ten-day period following the establishment of
a panel:
"Delegations in a position to do so, should indicate their intention to participate as
third party in a panel proceeding at the Council session which establishes the panel.
Others who wish to indicate a third party interest should do so within the next ten
days."
138
7.74 We are aware that WTO Members have on previous occasions notified their interest to
participate as third parties in disputes beyond the ten days following the establishment of the panel.
For example, two third-party notification requests in EC – Export Subsidies on Sugar (Australia) were
submitted after that period but prior to composition of the panel pursuant to Article 8.7 of the DSU. 139
The panel in that dispute recalled the Appellate Body's decision in EC – Hormones that "the DSU
leaves panels a margin of discretion to deal, al ways in accordance with due process, with specific
situations that may arise in a particular case and that are not explicitly regulated." 140 That panel
allowed third party participation on the basis that the notification did not adversely affect the selection
and composition of the panel, nor otherwise hamper the panel process. 141 In Turkey – Rice , a third
party request was notified more than ten days after the establishment of the Panel, and after the panel
had been composed.142 This panel allowed participation, stating:
"[S]imilarly to the relevant third party requests in EC – Export Subsidies on Sugar
(Australia), as a result of Pakistan's request, the Panel process has not been hampered.
In addition, although the Panel had already been composed when Pakistan formulated
its third party request, we see no reason to believe that accepting Pakistan's request
would affect the "independence of the memb ers" of this Panel, as stipulated by
Article 8.2 of the DSU, nor does it seem to prejudice in any way the manner in which
this Panel fulfil (sic) its functions specified in Article 11 of the DSU: '[T]o assist the
DSB in discharging its responsibilities unde r this Understanding and the covered
agreements. Accordingly, a panel should ma ke an objective assessment of the matter
before it, including an objective assessme nt of the facts of the case and the

138 Third Party Participation in Panels, Statement by the Chairman of the Council, document C/COM/3
of 27 June 1994, page 1. However, as noted by a previous panel, the question of formalizing a ten-day
notification requirement remains the subject of proposals in the context of the DSU negotiations (see Panel
Report on EC – Export Subsidies on Sugar (Australia), para. 2.2).
139 Panel Report on EC – Export Subsidies on Sugar (Australia), para. 2.1.
140 Panel Report on EC – Export Subsidies on Sugar (Australia) , para. 2.3 (citing the Appellate Body
Report on EC – Hormones, fn. 138).
141 Panel Report on EC – Export Subsidies on Sugar (Australia), para. 2.3.
142 Panel Report on Turkey – Rice, para. 6.1.

applicability of and conformity with the re levant covered agreements, and make such
other findings as will assist the DSB in making the recommendations or in giving the
rulings provided for in the covered agreements...'".
143
7.75 In the present dispute, the complainants notified their interest to participate as third parties
more than three months following the establishment of this Panel, i.e., on 23 September 2008, and one
day after the composition of this Panel, i.e., on 22 Janua ry 2009. Despite the length of delay and the
fact that this Panel had already been compos ed, we see no reason why accepting the complainants'
requests would affect the "independence of the member s" of this Panel or otherwise hamper the Panel
process. The members of this Panel had been selected taking into consideration the participation of
the complainants as main parties. We do not see how the additional participation of the complainants
as third parties would have compromised the initial se lection of these panellists; nor has the European
Communities made any such allegation. Given th e foregoing, we confirm our acceptance of the
complainants' request to participate as third parties to this dispute.144
(b) Multiple complainants and the joint panel request
7.76 Article 9 of the DSU provides in relevant part:
"1. Where more than one Member request s the establishment of a panel related
to the same matter, a single panel may be established to examine these complaints
taking into account the rights of all Member s concerned. A single panel should be
established to examine such complaints whenever feasible.
2. The single panel shall organize its ex amination and present its findings to the
DSB in such a manner that the rights whic h the parties to the dispute would have
enjoyed had separate panels examined the complaints are in no way impaired. If one
of the parties to the dispute so requests, the panel shall submit separate reports on the
dispute concerned. The written submissions by each of the complainants shall be
made available to the other complainants, and each complainant shall have the right
to be present when any one of the other complainants presents its views to the panel."
7.77 We additionally recall the cited provisions of Article 10 of the DSU, presented in
paragraph 7.72 above.
7.78 In the present dispute, we do not consider the fact that multiple complainants have presented a
joint panel request should per se prevent parties from seeking to participate as third parties, or that the
complainants' participation as third parties woul d not serve a "legitimate purpose". Nothing in the
language of Articles 9 or 10 of the DSU limits or re gulates the participation of complainants as third
parties in disputes where multiple compla inants present a panel request jointly.
145 In fact, such

143 Panel Report on Turkey – Rice, para. 6.8.
144 We again note, as discussed above, that in any case the complainants did not make any third-party
written or oral submissions to the Panel, nor did they exer cise their capacity as third parties to any significant
extent. Furthermore, when asked to clarify its position, the European Communities itself did not formally
request the Panel to reject the third party status of the complainants. See also paras. 7.70 and 7.71 above.
145 We also note that the equivalent provisions in the Working Procedures for Appellate Review (see
document WT/AB/WP/3 of 28 February 1997, Rules 23 and 24) do not have any such limitation either. In
addition, as noted by the European Communities, co-complainants in a previous dispute have simultaneously
participated as third parties to each others' complaints. See, for instance, EC – Trademarks
and Geographical Indications (DS174 and DS290), in which the United States and Australia were third parties
to each others' complaints.

participation may prove desirable for a complainant. For instance, a co-complainant that presented a
joint panel request may decide to pursue, in sub sequent phases of the panel proceedings, only certain
claims that it had jointly included in the panel request. It is possible that a co-complainant under these
circumstances would have a legitimate interest in co mmenting, as a third party, on the claim(s) it had
decided not to pursue as a joint complainant. We cons ider; however, that in cases where multiple
complainants present a joint panel request, and simulta neously request to participate as third parties,
care should be taken to ensure protection of the due pr ocess rights of the parties. In this dispute, we
have reminded the complainants of the European Communities' due process concerns, and received no
specific complaint from the European Communities.
(c) Conclusions
7.79 For all the foregoing reasons, the Panel does not consider that the co-complainants'
participation as third parties to each of the two ot hers' disputes for which they are not the main party
in any way adversely affected or hampered the pa nel process, or otherwise impaired the due process
rights of any of the parties to this dispute. The Panel therefore confirms the status of the complainants
as third parties to each other's complaints.
2. The status of the EC member States as respondents in this dispute
(a) Arguments of the parties
7.80 At the Panel's organizational meeting and in a 4 February 2009 letter addressed to the Panel,
the European Communities notified the Panel that it would participate as the sole respondent in
proceedings before the Panel. To the extent the Pa nel were to find that any of the measures specified
in the joint panel request breach WTO obligations, the European Communities stated it will bear full
responsibility for such breach of its Schedule.
146 The European Communiti es submits that it has had
exclusive competence with respect to all tariff ma tters since 1968, pursuant to Article 133 of the
Treaty establishing the European Community ("EC Tr eaty"). It argues that the role of customs
authorities of the EC member States is limited to applying measures previously enacted by the
European Communities. 147 Further, it argues that EC member States are required under EC law to
apply the implementing measures taken by the European Communities, and are prevented from taking
any remedial action on their own until the Eu ropean Communities has adopted the required
implementing measures to comply with any recommendation by the Panel. 148 Because the
complainants have only brought "as such" clai ms against measures enacted by the European
Communities149, the European Communities argues that ther e is no basis to direct findings against
EC member States for measures that EC member States have no power to repeal or amend. 150
Therefore, the European Communities argu es that addressing any recommendation to each
EC member State would serve no useful purpose.

146 Letter from the Delegation of the Commission (4 February 2009).
147 European Communities' second written submission, para. 149.
148 European Communities' response to Panel question No. 17. See also statements of the European
Communities at the Panel's organizational meeting of 4 February 2009.
149 European Communities' second written submission, para. 149. In EC – Computer Equipment , the
European Communities submits, claims were brought against certain measures of the European Communities
and certain "practices" of two EC memb er States, the United King dom and Ireland. In contrast, in the case at
hand, the European Communities notes that all the claims concern EC measures, and are brought on an "as
such" basis. Thus, The European Communities argues that the Panel's consideration neither requires nor justifies
the designation of the EC member States as respond ents. See European Communities' response to Panel
question No. 17 and European Communities' second written submission, paras. 147-152.
150 European Communities' second written submission, para. 148.

7.81 The complainants argue for the inclusion of EC memb er States as respondents for several
reasons. They note that EC member States are WTO Members in their own right, with their own
obligations, including under Article II of the GA TT 1994. In addition, they argue that both the
European Communities and its member States play a role in the application of duties, generally.
Therefore, both play a role in the application of du ties to the products in question in this dispute.
While noting that the European Co mmunities administers the CN and has issued the regulations and
CNENs at issue, the complainants argue that nati onal customs authorities in EC member States issue
BTIs, interpreting and applying th ose regulations and CNENs, and apply duties to the products in
accordance with the relevant EC regulations and CNEN s. As a systemic matter, as reflected in rulings
by prior panels, such as EC – Computer Equipment
151, the complainants argue that the internal legal
relationship between the European Communities and its member States cannot diminish the rights of
other WTO Members to exercise their rights under the WTO Agreement (including rights under the
DSU). Therefore, the complainants submit, they have exercised their right s under the DSU to bring
claims against the European Communities as well as the EC member States, and the terms of
reference of this Panel reflect this.152
(b) Consideration by the Panel
7.82 The issue is whether the Panel should make findings with respect to the actions of the
EC member States and address recommendations to EC member States in this dispute, to the extent it
finds that any of the measures at issue breach WTO obligations.
7.83 Article 3.3 of the DSU contemplates instances "in which a Member considers that any
benefits accruing to it directly or indirectly under the covered ag reements are being impaired by
measures taken by another Member " (emphasis added). Article 3.7 of the DSU in turn provides that
"[t]he aim of the dispute settlement mechanism is to secure a positive solution to a dispute". Article
11 of the DSU provides that "a panel should make an objective assessment of the matter before it,
including an objective assessment of the facts of th e case and the applicability of and conformity with
the relevant covered agreements, and make such other findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in the covered agreements".
7.84 The Panel notes that the complainants' joint panel request is addressed to the European
Communities and its member States .
153 In their request, the complainants claim that both the
European Communities, and its member States acco rd tariff treatment to certain information
technology products at issue in this dispute that is inconsistent with Articles II:1(a) and II:1(b) of the
GATT 1994.
7.85 The complainants acknowledge that they have not challenged any specific prior application of
duties by particular EC member States. 154 However, they argue it is a ppropriate to directly challenge
EC member States because the customs authorities of individual member States apply duties to the
products in accordance with the relevant EC regulations and CNENs.

151 Japan and Chinese Taipei refer to the Panel Report on EC – Computer Equipment (para. 8.16)
(Japan's response to Panel question No. 17; Chinese Taipei's response to Panel question No. 17). Japan
separately cited the Panel Report on EC - Selected Customs Matters (paras. 7.136-145), which it argues,
observed that Article XXIV:12 of GATT 1994 constitute s neither an exception to nor a derogation from the
obligation of uniform administration in Article X:3(a). (Japan's response to Panel question No. 17).
152 Complainants' responses to Panel question No. 17.
153 In this regard, the disputes are identically entitled "". See triple-numbered document WT/DS375/9,
WT/DS376/9 and WT/DS377/7 of 26 January 2009, in particular, fn. 1.
154 See complainants' response to Panel question No. 119.

7.86 It is not in dispute that EC member States are Members of the WTO, either as original
Members or as Members that acceded to the WTO following the conclusion of the Uruguay Round.
155
The European Communities does not exclude the possi bility that claims of WTO inconsistency may
be brought against individual EC member States. However, the European Communities argues that it
should be treated as the sole respondent, and not individual member States, in this dispute. The
European Communities focuses both on the fact that th e complainants have limited their claims to an
"as such" challenge 156, and their view that the role of customs authorities of EC member States is
limited to applying measures previously enacted by the European Communities. The European
Communities submits that the complainants' clai m addressed against these EC member States does
not concern the "application" or "practice" of the EC measures at issue. 157 To the extent a violation
were determined, upon implementation of the Panel's recommendation by the European Communities,
the European Communities attests th at EC member States would be required under EC law to apply
the implementing measures taken by the European Communities.158
7.87 In accordance with Article 3.7 of the DSU, our primary objective is to secure a positive
solution to the dispute. To this end, our terms of reference as set forth in paragraph 1.6above direct us
"[t]o examine, in the light of the relevant provisions in the covered agreements cited by the parties to
the dispute, the matter referred to the DSB by the United States, Japan and the Separate Customs
Territory of Taiwan, Penghu, Kinmen and Ma tsu in document WT/DS375/8, WT/DS376/8 and
WT/DS377/6, and to make such findings as will assi st the DSB in making the recommendations or in
giving the rulings provided for in those agreements".
7.88 At the outset, our focus concerns the tariff treat ment provided for under the measures at issue.
As noted by the complainants, th e same issue arose before in EC – Computer Equipment .159 That
Panel ultimately found it unnecessary to rule on claims directed against EC member States, in light of
findings of inconsistency determined with respect to the measures of the European Communities.160
7.89 In the circumstances of this case, we do not consider it necessary to determine at the outset
whether to rule on the claims directed against EC member States. We note the matter in this dispute
is directed towards a number of measures promulgated by the European Communities. The
complainants have clarified that they are not challe nging particular applications of the measures. The

155 Article XI of the WTO Agreement establishes requ irements for qualifying as an "original Member"
of the WTO, while Article XII of the WTO Agreement, e xplains that a State or separate customs territory may
accede to the WTO Agreement. For a list of EC member States that are WTO members, see WTO website,
available at http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm.
156 European Communities' second written submission, para. 149.
157 European Communities' second written submission, para. 149. See also the European Communities'
response to Panel question No. 17; European Communities' second written submission, paras. 147-152.
158 European Communities' response to Panel question No. 17. See also the statements of the European
Communities at the Panel's organizational meeting of 4 February 2009; Letter from the Delegation of the
Commission (4 February 2009).
159 Panel Report on EC – Computer Equipment , para. 8.16. In that dispute, the United Kingdom and
Ireland were identified as respondents.
160 Panel Report on EC – Computer Equipment , para. 8.72. In concluding it unnecessary to rule on
claims directed against the United Kingdom and Ireland, the Panel in EC – Computer Equipment recognized that
its terms of reference required it to examine the matters referred to the DSB, including those concerning the
United Kingdom and Ireland. That Panel stated that it would consider at the outset whether customs authorities
in the European Communities and the United Kingdom and Ireland "have or have not deviated from the
obligations assumed under that Schedule". The Pane l concluded that the European Communities and its
member States are "all bound by their tariff commitments under Schedule LXXX", and stated that the focus of
its inquiry was "tariff treatment of LAN equipment and multimedia PCs by customs authorities in the European
Communities". See Panel Report on EC – Computer Equipment, para. 8.16.

European Communities sought to assure the Panel that the role of customs authorities of the
EC member States is limited to applying measures previously enacted by the European Communities.
In the context of the claims before us, our analysis of the complainants' claims with respect to the
FPDs and STBCs narrative descriptions and the al leged concession pertaining to MFMs, we will
consider the extent to which the European Commun ities and its member States have failed to comply
with obligations in the context of EC commitments set forth in the EC Schedule. To the extent the EC
member States apply WTO inconsistent measures enacted by the European Communities, we consider
there is a reasonable basis to conclude that they have acted inconsistently.
7.90 Accordingly, we refrain on ruling at the outset whether findings against particular EC
member States would be necessary to secure a positive solution to the dispute.
3. Order of analysis for the complainants' claims under Articles II and X of the GATT
1994
(a) Arguments of the parties
7.91 The United States requests the Panel to begin its analysis with those claims concerning the
concessions that appear in the Annex to the EC Schedule. The United States considers it practical and
logical to begin with these concessions as they orig inate from Attachment B of the ITA, which uses
general terminology that "often span multiple tariff subheadings"
161. Furthermore, it submits that the
language in the EC headnote 162 or the ITA does not specify a particular order of analysis. Chinese
Taipei similarly requests the Panel to begin with an an alysis of the claims made in connection with
the Annex to the EC Schedule, arguing that, if a product falls within the concessions made pursuant to
Attachment B, it is no longer necessary to look at specific Attachment A concessions. 163 Japan
submits that the two claims are legally independe nt and has not requested the Panel to follow a
particular order of analysis. 164 However, Japan requests the Panel to refrain from practising judicial
economy with respect to its claims in relation to headings/subheadings listed in Attachment A and B,
as reflected in the EC Schedule. 165 The complainants have not requested the Panel to follow a
particular order of analysis with respect to th eir claims in connection with MFMs, under Articles
II:1(a) and (b) of the GATT 1994, or any order of analysis as concerns Articles X:1 and X:2 of the
GATT 1994
166.
7.92 The European Communities argues that it does not see any "added value" in the
complainants claims concerning the FPDs narrative description that appears in the Annex to the EC
Schedule, in light of the complainants' separate claims under tariff subheading 8471 60 90, which is
one of the codes listed next to the narrative description in the Annex to the EC Schedule. 167 While
responding to the complainants' arguments concerni ng the STBCs narrative description, the European

161 United States' response to Panel question No. 1.
162 In particular, the United States refers to the language "to the extent not specifically provided for in
this Schedule" and "wherever the product is classified" that appears in the EC Schedule (Exhibits US-1; US-7).
163 Chinese Taipei's response to Panel question No 10(b).
164 Japan's response to Panel question No. 1.
165 Japan's second written submission, para. 143; Japan's response to Panel question No. 113.
166 United States' response to Panel question no. 158; Chinese Taipei's response to Panel question
No. 158.
167 European Communities' response to Panel question No. 10(b). The European Communities states
specifically that it "does not see any added value in the latter analysis compared to an analysis under tariff
heading 8471 60 90 unless the Panel would agree (quod non) with the overly broad and untenable interpretation
by the complainants of the word 'for' in the narrativ e product definition of 'flat panel displays…'" (European
Communities' response to Panel question No. 10(b)).

Communities submits that it does not understand what the United States means through its
identification of "the commitment to provide dut y-free treatment for set top boxes meeting the
description contained in the four individual tariff lines in the EC Schedule ..., HS96 8528 12 91 in
particular".
168 Further, it notes that the other complainants have not identified the tariff lines as a
separate concession. 169 The European Communities does not address whether a particular order of
analysis should be followed with respect to the co mplainants' MFM claims. It also does not consider
that there is a legal requirement in Article X to ad opt a particular order of analysis for Articles X:1
and X:2 of the GATT 1994.170
(b) Consideration by the Panel
7.93 The Panel notes the parties' views regarding the correct order of analysis that the Panel
should follow, as set forth in the summary of their views above.
7.94 The Panel will address the complainants' claims relating to the FPDs narrative descriptions as
it appears in the Annex to the EC Schedule, followed by their claim in connection with duty-free tariff
item number 8471 60 90, as concerns flat panel display devices. Thereafter, the Panel will address the
complainants' claims relating to the STBCs narrativ e description as it appears in the Annex to the EC
Schedule, followed by the United States' claims in connection with duty-free tariff item numbers
8517 50 90, 8517 80 90, 8525 20 99 and 8528 12 91, and finally, claims under Articles X:1 and X:2
of the GATT 1994 starting with Article X:1. Finally , the Panel will consider the complainants' MFM
claims, first under tariff item number 8471 60 and thereafter tariff item number 8517 21.
7.95 In taking this approach the Panel is mindfu l that both the United States and Chinese Taipei
requested us to consider claims under the narrative descriptions in the Annex to the EC Schedule first,
and presented their submissions and arguments accordingly. Japan did not favour any particular order
of analysis, but requested us not to exercise judici al economy with its separate claims in relation to
tariff item number 8471 60 90, with respect to its claims concerning flat panel display devices.
171 The
Panel notes that it may only consider the issue of judicial economy after having considered the claims
under the Annex to the EC Schedule. Finally, we do not understand the European Communities to be
objecting to an order of analysis that begins with the narrative descriptions in the Annex to the EC
Schedule. Rather, the European Communities has raised a number of issues with respect to the clarity
of the claims made by the complainants, including th e identification of the pr oducts at issue, aspects
of the measures at issue, and the obligations clai med to be breached. As these arguments, according
to the European Communities, rela te to the substantive issue of whether the complainants have
established a prima facie case, we will address them in other sections of these Reports. In particular,
we are not in a position to conclude at the outset that the claims relating to the Annex to the EC
Schedule provide no "added value", as suggested by the European Communities, without actually
considering the substance of those claims.
7.96 However, prior to considering the complainants particular claims under Articles II and X of
the GATT 1994, the Panel will address general issues and several preliminary issues affecting the
disputes.

168 European Communities' second oral statement, para. 46 (referring to United States' second written
submission, para. 23 (italics added by European Communities)).
169 European Communities' second oral statement, para. 49. In response to question 10 from the Panel,
the European Communities states: "the Panel appears to be called upon to examine the claims of the
complainants only on the basis of the narrative product definition in light of the products the complainants have
(or have failed to) identify" (European Communities' response to Panel question No. 10(b)).
170 European Communities' response to Panel question No. 158.
171 Japan's second written submission, para. 143.

4. Characterization of the Panel's task for the complainants' claims under Article II of the
GATT 1994
7.97 As indicated in paragraph 7.1 above, the funda mental issue for the Panel's determination in
these disputes is whether, in violation of Article II of the GATT 1994, the identified EC measures
result in less favourable tariff treatment to imports of FPDs, STBCs and MFMs than that provided for
in the EC Schedule, and whether the tariff treatment provided is in excess of that provided for in the
EC Schedule.
7.98 Article II:1 of the GATT 1994 provides in relevant part:
"(a) Each contracting party shall accord to the commerce of the other contracting
parties treatment no less favourable than that provided for in the appropriate Part of
the appropriate Schedule annexed to this Agreement.
(b) The products described in Part I of the Schedule relating to any contracting
party, which are the products of territories of other contracting parties, shall, on their
importation into the territory to which the Sc hedule relates, and subject to the terms,
conditions or qualifications set forth in that Schedule, be exempt from ordinary
customs duties in excess of t hose set forth and provided therein. Such products shall
also be exempt from all other duties or charges of any kind imposed on or in
connection with the importation in excess of those imposed on the date of this
Agreement or those directly and mandator ily required to be imposed thereafter by
legislation in force in the importing territory on that date."
7.99 In Argentina – Textiles and Apparel, the Appellate Body elaborated on the meaning and scope
of these provisions:
"The terms of Article II:1(a) require that a Member 'accord to the commerce of the
other Members treatment no less favourable than that provided for' in that Member's
Schedule ... Paragraph (a) of Article II:1 contains a general prohibition against
according treatment less favourable to imports than that provided for in a Member's
Schedule. Paragraph (b) prohibits a specific kind of practice that will always be
inconsistent with paragraph (a ): that is, the application of ordinary customs duties in
excess of those provided for in the Schedule".
172
7.100 In light of the foregoing, as in previous cases 173, in order to assess the complainants' claims,
we will consider the following: (a) the treatment accorded to the products at issue in the EC Schedule;
(b) treatment accorded to the products at issu e under the challenged measures at issue; and

172 Appellate Body Report on Argentina – Textiles and Apparel, para. 45. The Appellate Body further
explained the relationship between the two provisions as follows:
"In accordance with the general rules of treat y interpretation set out in Article 31 of the
Vienna Convention, Article II:1(b), first sentence, must be read in its context and in light of
the object and purpose of the GATT 1994. Article II:1(a) is part of the context of Article
II:1(b); it requires that a Member must acco rd to the commerce of the other Members
'treatment no less favourable than that provided for' in its Schedule. It is evident to us that the
application of customs duties in excess of those provided for in a Member's Schedule
inconsistent with the first sentence of Article II:1(b), constitutes 'less favourable' treatment
under the provisions of Article II:1(a) ... ."
(Appellate Body Report on Argentina – Textiles and Apparel, para. 47).
173 Panel Report on EC – Chicken Cuts, para. 7.65.

(c) whether the challenged measures result in less fa vourable treatment of the products at issue than
that provided for in the EC Schedule and, more particularly, whether the challenged measures result in
the imposition of duties and charges on the products at issue in excess of those provided for in the EC
Schedule.
7.101 We are thus required to interpret certain c oncessions in the EC Schedule. As we have
indicated above in paragraph 7.16, the EC Schedul e is an integral part of the GATT 1994 and the
WTO Agreement . Accordingly, we will assess the various asp ects of the EC Schedule cited by the
complainants applying the principles of treaty in terpretation codified in the Vienna Convention in
addressing the claims before us.
7.102 In addition, if we were to determine that th e applied rate exceeds the bound duty rate, then, in
accordance with the aforementioned approach, the a pplication of customs duties would be "in excess"
of those provided for in the EC Schedule, and woul d consequently also violate Article II:1(a) of the
GATT 1994 by according to imports of the products at issue treatment less favourable than that
provided for those products in accordance with the applicable concession in the EC Schedule.
5. What is required in order to prove an "as such" claim in the circumstances of this case
7.103 In the broader context of this dispute, the pa rties have discussed what is required to prove an
"as such" claim in the circumstances of this case.
7.104 The European Communities has argued in the context of the complainants' GATT 1994
Article II claims in connection with flat panel disp lay devices and set top boxes that the complainants
failed to identify in sufficient detail the products or aspects in the measures at issue to establish that
all or some of the products identified by the complainan ts are necessarily treated by the European
Communities inconsistently with its concessions. The European Communities argues that the issue of
a violation under Article II cannot be determined without consideration of all the relevant
characteristics of the particular products at issue th at may be involved in an objective classification
exercise. In this sense, the Eur opean Communities contends that the complainants cannot show that a
certain category of existing products is treated in a way inconsistent with the EC commitments
because their arguments address an overly broad pr oduct description. Thus, in the view of the
European Communities, a panel should not reach the requested findings as "it would not be clear with
respect to which products the Panel found a viol ation". The European Communities considers the
approach to be consistent with Article II of the GATT 1994 which, it argues, discusses a WTO
Member's concessions with respect to a particular product.
174
7.105 The complainants argue that, in order to establish a violation of Article II of the GATT 1994,
their task is to demonstrate that the measures necessarily lead EC customs authorities to impose duties
on one or more products subject to their commitments to provide duty-free treatment. 175 Citing what
they suggest was the approach in China – Auto Parts , the complainants argue that they are not
required to demonstrate that the measures in question result in the imposition of duties on every single
model of flat panel display that is imported into the European Communities. Instead, they submit that
any aspect of the criteria in the me asures can lead to a violation. 176 According to the complainants,

174 European Communities' response to Panel question No. 22.
175 Complainants' response to Panel question No. 22. In proving an "as such" claim, the United States
argues that a complainant may present evidence including the text of the rele vant measure, as well as evidence
of its application.
176 Complainants' response to Panel question No. 22 (referring to Panel Report on

the mere fact that a measure might result in the correct duty treatment for a given model of a product
in some instances would not "save" the measure from a finding of violation. By demonstrating that a
measure excludes from duty-free treatment any display with particular technical characteristics, the
measures result in the imposition of duties on pr oducts covered by the EC's duty free tariff
obligations, thereby violating Article II of the GATT 1994.
7.106 The DSU does not expressly distinguish between "as such" or "as applied" claims of
violation, nor does Article 6.2 of the DSU or any other provision of the DSU set forth a particular
burden of proof that applies to complainants who rai se "as such" claims of violation. We note that
the Appellate Body in US – Oil Country Tubular Goods Sunset Reviews elaborated on the nature of an
"as such" challenge, as follows:
"By definition, an 'as such' claim challenges laws, regulations, or other instruments of
a Member that have general and prospective application, asserting that a Member's
conduct—not only in a particular instance that has occurred, but in future situations
as well—will necessarily be inconsistent with that Member's WTO obligations. In
essence, complaining parties bringing 'as su ch' challenges seek to prevent Members
ex ante from engaging in certain conduct."
177
7.107 Further, we note that the Appellate Body in US – Carbon Steel discussed the burden of proof
attributable to the complaining party when bringing an "as such" claim, as follows:
"[T]he party asserting that another party's muni cipal law, as such, is inconsistent with
relevant treaty obligations, bears the burden of introducing evidence as to the scope
and meaning of such law to substantiate th at assertion. Such evidence, will typically
be produced in the form of the text of the relevant legislation or legal instruments,
which may be supported, as appropriate, by ev idence of the consistent application of
such laws, the pronouncements of domestic courts on the meaning of such laws, the
opinion of legal experts and the writings of recognized scholars."178
7.108 Thus, in substantiating an "as such" challenge against laws, regulations, or other instruments
of a Member that have general and prospective application, a complainant may adduce evidence in the
form of the text of the relevant legislation or legal text, and may also submit evidence of the
application of such legislation.
7.109 In the present dispute, the complainants have identified a series of generally applicable EC
measures pertaining to the tariff classification of prod ucts (including certain CN codes, classification
regulations and CNENs). Further, in certain cases, the complainants have also presented individual
classification decisions by customs authorities as ev idence of the application of the measures at
issue.179
7.110 The European Communities asserts that due to an "overly broad" product description used by
the complainants and reference to certain criteria in the measures at issue, the complainants cannot
show that a "category of actually existing products" is indeed treated inconsistently with the European
Communities' concessions at issue in this dispute. 180 In the European Communities' view, only by

177 Appellate Body Report on US – Oil Country Tubular Goods Sunset Reviews, para. 172.
178 Appellate Body Report on US – Carbon Steel, para. 157 (emphasis added); see also Panel Report on
Mexico – Rice, para. 6.26.
179 Complainants' response to Panel question No. 120.
180 European Communities' response to Panel question No. 22.

knowing the "product model" or "category" therein would it be possible to examine the objective
characteristics of that product and determine the applicable tariff treatment.
181
7.111 We consider that the points made by the Eu ropean Communities raise two questions in
particular: first, is it sufficient to focus on aspects of, or particular criteria within, a broader measure
in order to establish an "as such" breach? Second, is it necessary to identify specific product models
or categories of products in order to establish an "as such" breach, or is it sufficient to identify
products that share a particular characteristic?
7.112 In our view, precisely what is required to estab lish an "as such" breach will vary from case to
case depending on the particular circumstances of th e case, including the nature of the measures and
obligations at issue. We note that, in general term s, the complainants assert that the measures at issue
in this case are designed to specify the characteristics that a product must have in order to fall within a
certain duty-free tariff heading, as well as identifyi ng certain characteristics that will disqualify a
product from falling within that tariff heading. During the course of these proceedings, the
complainants have focused on particular aspects of th e measures at issue that, in their view, exclude
products with certain characteristics from falling within duty-free tariff headings.
7.113 In this regard, we do not understand the complainants to be arguing that all products that have
the particular characteristic identified must nece ssarily receive duty-free treatment. Rather, we
understand the complainants to be arguing that th e exclusion from duty-free treatment of all products
with a certain characteristic, will necessarily result in the application of duties to some products that
fall within the EC duty-free commitments. Thus, in order to assess this claim it will be necessary for
us to consider whether, as claimed by the complain ants, the challenged measures do indeed operate to
automatically exclude from duty-free treatment products with certain characteristics. Moreover, it is
only in the light of the scope of these concessions that the consistency of the measures at issue can be
assessed. Specifically, the issue before us is wh ether the scope of the EC duty-free concessions
include some products with characteristics that, by virtue of the EC measures, are excluded from duty-
free treatment. If the obligations do include such pr oducts, and if the effect of the EC measures is
necessarily to deny such products duty-free treatment , then we would consider that an "as such"
breach of the EC commitments will have been established.
7.114 In light of the nature of the claims before us, we do not agree with the European Communities
that in the present case it is necessary to examine all aspects of the measures at issue, or all
characteristics of a particular product, in order to establish an "as such" breach. Indeed, the essence of
the complainants' case, as we understand it, is that the EC measures at issue do not operate in such a
manner as to permit such a holistic examination of a pr oduct in light of the entirety of its objective
characteristics. Rather, we understand the complainan ts' claim to be that aspects of the measures
operate to exclude from particular duty-free tariff he adings all products with a certain characteristic
irrespective of the other objective characteristics they may possess. Indeed, it is this automatic
exclusion of products with certain characteristics that appears to lie at the heart of the claims against
the European Communities in the cu rrent case. Of course, the compla inants' characterisation of the
measures will need to be examined in the course of our analysis.
7.115 We note that the Panel in China – Auto Parts , referred to by the parties in this dispute,
followed a similar approach. As the United States points out 182, that panel explained that "the scope of
[its] review in respect of the complainants' claim against China's measures, in particular the essential
character determination, under Articles II:1(a) a nd (b) of the GATT 1994 is limited to a very narrow

181 See, e.g., European Communities' second written submission, para. 66.
182 United States' second written submission, fn. 20.

question of whether any aspect of the criteria set out in the measures w ill necessarily lead to a
violation of China's obligations under its Schedule and consequently Articles II:1(a) and (b) of the
GATT 1994".
183
7.116 We also do not accept the European Communities' assertion that particular product models or
categories must always be identified in classification cases involving Article II of the GATT 1994.
The key issue in this case under Article II is whether certain products that are entitled duty-free
treatment under the EC Schedule indeed receive su ch treatment. If the complainants are able to
establish that the measures operate in such a wa y as to necessarily deny duty -free treatment, then we
consider that a breach of Article II has been estab lished. More specifically, in the circumstances of
this case, if we were to determine that some produc ts fall within the scope of duty-free concessions in
the EC Schedule, then if the challenged measure s provide for the applica tion of duties to those
products covered by the concession, this would be sufficient to find a breach of Article II. The
European Communities also suggests that a ruling on this basis "would not be clear with respect to
which products the Panel found a violation." While th e particular findings we will make in this case
will only be considered after a full examination of the issues before us, we would observe that
findings generally focus on measures rather than products. While the obligation under Article II
refers to the tariff treatment of products, such trea tment results from the effect of certain measures.
This means that, in the event that a violation is found, it is the measures at issue that must be brought
into conformity. In light of th is, we consider that a finding that focuses on certain aspects of the
measures at issue would constitute a result that is sufficiently clear.
7.117 In light of the arguments and evidence pr esented by the complainants throughout the
proceedings, we will thus consider whether certain aspects of the measures operate to exclude from
particular duty-free tariff headings all products with the identified characteristic(s), irrespective of the
other objective characteristics they may possess. To the extent that products with certain
characteristics identified by the complainants are automatically excluded, we would not consider it
necessary to undertake an examination of all aspects of the measures or all aspects of a particular
product.
E. F
LAT PANEL DISPLAY DEVICES (FPDS)
7.118 In this section of the Reports, the Panel will consider the complainants' claims that certain
EC measures are inconsistent with Articles II:1( a) and II:1(b) of the GATT 1994 because they result
in less favourable tariff treatment to imports of cer tain flat panel display devices than that provided
for these products under the EC Schedule, and becau se the tariff treatment provided is in excess of
that provided for in the EC Schedule. In the join t Panel request, the complainants indicate that the
identified measures at issue cover "certain flat pane l displays using LCD technology that are 'capable
of reproducing video images from a source other than an automatic data-processing machine'", as well
as "flat panel displays with certain attributes, including digital visual interface (DVI)". 184
7.119 The complainants argue, in their Joint Panel Re quest, that pursuant to commitments made in
the ITA, the European Communities is obliged to provide duty-free tr eatment to flat panel display
devices. In particular, the complainants allege that certain flat panel display devices are covered by

183 Panel Report on China - Auto Parts , para. 7.540 (emphasis added). That panel concluded that
"Article 21(2) of Decree 125 has an element that would n ecessarily lead to a result th at 'a chassis fitted with
engines' within the scope of tariff heading 87.06 is cl assified as a complete motor vehicle and consequently
assessing them at the tariff rate applicable to a motor vehicle inconsistently with China's concessions contained
in the tariff headings of China's Schedule". See Panel Report on China - Auto Parts, para. 7.588.
184 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 3.

the duty-free concession set forth in the narrative description "Flat panel display devices (including
LCD, Electro Luminescence, Plasma, Vacuum-Fluorescence and other technologies) for products
falling within this agreement, and parts thereof", lo cated in the Annex to the EC Schedule, regardless
of which tariff line the products are classi fied under in the EC combined nomenclature.
185 Second, the
complainants allege that certain flat panel disp lay devices are covered by the duty-free concession as
"[i]nput or output units...Other" in tariff item numb er 8471 60 90 in the EC Schedule. According to
the complainants, despite these duty-free concessions, the challenged measures require that particular
flat panel display devices which have a DVI connect or, or are capable of reproducing video images
from a source other than an automatic data-processing machine, be classified under tariff item number
8528 59 10 or 8528 59 90, which carry a 14 per cent ad valorem duty. The application of this 14 per
cent duty on imports that they consider should be granted duty-free treatment is the essence of the
complainants' claim. The complainants reject th at the suspension of the collection of duties on
specific flat panel displays pursuant to what they allege to be a temporary measure, resolves the
matter.186
7.120 The European Communities submits that the products referred to by the complainants are
new "multifunctional" products for which there is no "specific heading". Thus, these monitors had to
be classified on a case-by-case basis, considering their "specific characteristics. 187 Consequently, the
European Communities rejects the co mplainants' Article II claims. To the extent the Panel considers
that a product were in an individual case to be tr eated as duty-free, the European Communities argues
that the chance of a breach of Article II woul d be unlikely, because the European Communities
suspends the application of duties which, it argu es, reduces the likelihood that customs duties have
been "unduly levied".188
7.121 The task before the Panel, therefore, is to de termine: (a) the scope of duty-free treatment in
the EC Schedule; (b) whether the products identified by the complainants fall within the scope of the
duty-free tariff concession; (c) whether the challenge d measures result in the imposition of duties on
the products at issue in excess of those provided for in the EC Schedule; and (d) whether the measures
at issue result in less favourable treatment of the products at issue than that provided for in the EC
Schedule.
7.122 In light of the approach we have outlined above, we will first identify the measures and
products at issue. This is particularly impor tant as the European Co mmunities argues that the
complainants have failed to sufficiently identify what products should receive duty-free treatment in
order to demonstrate a violation of WTO commitments based on the measures at issue.189
1. Preliminary Issues
7.123 During these proceedings, the European Communitie s has raised various issues with respect
to the complainants' claims. 190 The European Communities has ar gued that one of the challenged

185 Regarding the complainants' views on the location of the concession, see paras. 7.219 - 7.226 below.
186 Joint Panel request, WT/DS375/8, 376/8, DS377/6, pp. 2-3.
187 European Communities' first written submission, para. 92.
188 European Communities' first written submission, paras. 94, 62-63, 169; European Communities'
response to Panel question No. 23.
189 European Communities' first written submission, para. 32.
190 We note that the European Communities has not alleged particular violations of Article 6.2 of the
DSU or the Panel's terms of reference, but instead alleges that the complainants have failed to make a "prima
facie" case. See European Communities' first written subm ission, para. 32. Nevertheless, the Panel considers it
appropriate to address issues raised by the European Communities, as well as additional issues that go to the
Panel's terms of reference at the outset. These issues are enumerated in paragraph 7.123 of these Reports.

measures was not legally binding under EC law. In addition, the European Communities has argued
that several measures are no longer applicable in pr actice and are therefore irrelevant to the Panel's
analysis. Otherwise, the European Communities considers that the complainants' failed to identify the
product or products at issue or aspects of the measur es at issue in sufficient detail for the European
Communities to defend itself and for the Panel to rule on the matter. Finally, the European
Communities has asserted that the complainants fa iled to identify "with the necessary clarity" the
obligation of which the European Communities is allegedly in breach.
7.124 In addition, there is a question of whether the complainants' reference to any amendments or
extensions and any related implementing measures was sufficient to bring within the Panel's terms of
reference the continuation of a duty suspension on imports of particular flat panel display devices, and
versions of the CN adopted by the European Communities subsequent to the consultations request and
establishment of this Panel.
7.125 The Panel will address each of these issues in turn. We note that the Appellate Body has
explained that together the identification of the sp ecific measures at issue and the legal basis of the
complainants comprise the "matter referred to the DSB" which forms the basis for a panel's terms of
reference under Article 7.1 of the DSU.
191
7.126 One of the essential purposes of the terms of refe rence is to establish the jurisdiction of the
panel by defining the precise claims at issue in the dispute. 192 The Appellate Body has also observed
that the vesting of jurisdiction in a panel is a fu ndamental prerequisite for lawful panel proceedings.193
Therefore, we must address these issues before we can proceed to address the substance of the
complainants' claims.
7.127 As the joint Panel request serves as the basis for the terms of reference of this Panel 194, we
will start our analysis by first setting forth the relevant text of the joint Panel request.
(a) The measures at issue specifically identified in the Panel request
7.128 In their joint Panel request 195, the complainants identified the relevant EC measures at issue
as follows:
"Customs authorities of EC member States impose duties on flat panel displays. The
measures at issue through which they do so include:
1. Council Regulation (EC) No. 493/2005 of 16 March 2005;

191 Appellate Body Report on Guatemala – Cement I, paras. 69-76.
192 Appellate Body Report on Brazil – Desiccated Coconut, DSR 1997: I, p. 186.
193 Appellate Body Report on Mexico – Corn Syrup (Article 21.5 – US), para. 36.
194 We recall, as set forth in para. 1.6 above, the Dispute Settlement Body (DSB) established a panel in
the present dispute in accordance with Article 6 of the DSU with the following terms of reference:
"To examine, in the light of the relevant provisions in the covered agreements cited by the
parties to the dispute, the matter referred to the DSB by the United States, Japan and the
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu in document
WT/DS375/8, WT/DS376/8 and WT/DS377/6, and to make such findings as will assist the
DSB in making the recommendations or in giving the rulings provided for in those
agreements."
See also Constitution of the Panel Established at the Request of the United States, Japan, and the
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, WT/DS375/9, 376/9, DS377/7, p. 1.
195 See para. 2.2 above.

2. Commission Regulation (EC) No. 634/2005 of 26 April
2005;
3. Commission Regulation (EC) No. 2171/2005 of 23
December 2005;
4. Council Regulation (EEC) No. 2658/87 of 23 July 1987 on
the tariff and statistical nom enclature and on the Common
Customs Tariff, including all annexes thereto, as amended;
4
and
5. Explanatory Notes to the Combined Nomenclature of the
European Communities, 2008/C 133/01 (May 30 2008),
alone or in combination with Council Regulation (EEC) No.
2658/87 of 23 July 1987,
as well as any amendments or extensions and any related or implementing measures.
5
September 2007
5 Including the actual application by customs authorities of EC member States of a 14%
customs duty on imports of certain flat panel displays."196
7.129 The European Communities has not contested the complainants' specific identification of the
measures in its joint Panel request.
(b) Are versions of the CN adopted by the European Communities subsequent to the
consultations request and establishment of this Panel within the Panel's terms of reference?
7.130 We note that the complainants' joint Panel request refers to the Council Regulation
No. 2658/87, as amended, as one of the measures at issue in this dispute. 197 Footnote 4 of the joint
Panel request notes that the Council Regulati on includes amendments adopted pursuant to
Commission regulation No. 1214/2007, which contains the CN2008 198. In addition, the complainants
identified as part of the measure at issue "any amendments or extensions and any related or
implementing measures".
199
7.131 Pursuant to Article 12 of C ouncil Regulation No. 2658/87, th e Commission adopts each year
by means of a regulation a complete updated version of the CN 200 together with the corresponding
rates of duty of the CCT, as an amendment to Annex I of Council Regulation No. 2658/87.

196 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 2.
197 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 2.
198 Commission Regulation No. 1214/2007, Article 1 (Exhibit JPN-3).
199 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 2.
200 As discussed in paragraphs 7.39-7.45 above, the European Communities established a goods
nomenclature, known as the Comb ined Nomenclature, or CN, which contains HS nomenclature and
subheadings, as well as preliminary provisions, additiona l section or chapter notes and footnotes relating to CN
headings.

7.132 Since the complainants filed their joint Pane l request on 19 August 2008, the CN has been
updated twice: the CN2009 was published in Commission Regulation No. 1031/2008 of 19 September
2008
201, and the current CN2010 was published in Commission Regulation No. 948/2009 of
30 September 2009.
7.133 The question arises whether versions of th e CN – such as the CN2009 and CN2010 – which
were promulgated subsequent to the panel request ma y be considered by the Panel. We note that the
complainants and the European Communities indicated that they considered the CN2009 version to be
the relevant measure at issue. 202 The United States and Chinese Taipei submit that Council
Regulation No. 2658/87 is regularly amended to include subsequent amendments, and thus, the
relevant measure should be the most recent update. The United States, in particular, submits that
Council Regulation No. 2658/87 is regularly am ended and reissued without substantive
modification.203
7.134 We recall that the Appellate Body has held th at "panels cannot simply ignore issues which go
to the root of their jurisdiction – that is, to their au thority to deal with and dispose of matters. Rather,
panels must deal with such issues – if necessary, on their own motion – in or der to satisfy themselves
that they have authority to proceed."204
7.135 It is well settled that the identification of the specific measures at issue and the provision of a
brief summary of the legal basis of the complaint in the panel request comprise the "matter referred to
the DSB", which forms the basis for a panel's te rms of reference under Article 7.1 of the DSU. 205
Therefore, to satisfy ourselves whether we have th e authority to proceed to make findings on the
version of the CN currently in force, we must ex amine whether that version is included within our
terms of reference because it was identified as a specific measure at issue in the joint Panel request.
7.136 The Appellate Body has explained that, pursuant to Article 6.2 of the DSU, a panel request
must be "sufficiently precise"206 in the identification of the measures at issue such that what is referred
to adjudication by a panel may be discerned from the panel request.207
7.137 Regarding amendments to measures, the Appellate Body in Chile – Price Band System stated
that:
"[T]he demands of due process are such that a complaining party should not have to
adjust its pleadings throughout dispute settleme nt proceedings in order to deal with a
disputed measure as a 'moving target'. If the terms of reference in a dispute are broad
enough to include amendments to a measure – . . . – and if it is necessary to consider
an amendment in order to secure a positive solu tion to the dispute – . . . – then it is

201 Exhibits US-11; JPN-20; TPKM-21.
202 Parties' responses to Panel question No. 65.
203 United States' and Chinese Taipei's responses to Panel question No. 65.
204 Appellate Body Report on Mexico – Corn Syrup (Article 21.5 – US), paras. 36 and 53.
205 Appellate Body Report on US – Zeroing (21.5 - Japan) , para. 107; Appellate Body Report on
Guatemala – Cement I, para. 72; Appellate Body Report on US – Carbon Steel, para. 125; and Appellate Body
Report on US – Continued Zeroing, para. 160.
206 Appellate Body Report on US – Zeroing (21.5 - Japan) , para. 108; Appellate Body Report on
US - Continued Zeroing, para. 161; Appellate Body Report on US – Carbon Steel , para. 126; Appellate Body
Report on EC – Bananas III, para. 142.
207 Appellate Body Report on US – Continued Zeroing, para. 168.

appropriate to consider the measure as amended in coming to a decision in a
dispute."
208
7.138 The Appellate Body examined in that case the relationship between the original measure and
the subsequent amendment to that measure, and de termined that the law in question "amend[ed]"
Chile's price band system "without changing its essence".209
7.139 In light of the Appellate Body's ear lier enunciations in its reports on Chile – Price Band
System and EC – Chicken Cuts, we understand that a panel's terms of reference may be considered to
include "amendments" to measures that are listed in the panel request as long as the terms of reference
are broad enough, and second, the new measure do es not "change the essence" of the original
measures included in the request or have legal impli cations overly different from those of the original
measures. Moreover, it may be relevant to consider whether the inclusion of any amendments within a
panel's terms of reference is necessary to secure a po sitive solution to the dispute. We consider the
approach set forth above to be relevant to the issue before us.
Whether the Panel's terms of reference are br oad enough to include subsequent amendments
to the CN
7.140 We note that the complainants incorporated the phrase "any amendments or extensions and
any related or implementing measures" into their joint Panel request. We recall that the complainants,
in the joint Panel request, identified as the speci fic measure at issue Council Regulation No. 2658/87,
"as amended" (emphasis added). While we do not consider that the mere incantation of the phrase
"any amendments or extensions a nd any related or implementing me asures" in a panel request will
permit Members to bring in measures that were clearly not contemplated in the Panel request, it may
be used to refer to measures not yet in force or concluded on the date of the panel request, or measures
that the complainants were not yet aware of, su ch as government procedures not yet published that
have the same essential effect as the measures that were specifically identified. This is to prevent the
possibility that the procedural requirements of WT O dispute settlement result in a situation where
measures could completely evade review.
210 This is especially true with the type of measures we have
before us, which are amended annually.211

208 Appellate Body Report on Chile – Price Band System, para. 144.
209 Appellate Body Report on Chile – Price Band System, para. 139 (emphasis original). The Appellate
Body in EC – Chicken Cuts considered the relevance of its earlier findings in its report in
Chile - Price Band System, in particular the notion of changing the essence of the original measure. In
considering two measures that had been enacted subsequent to the panel request, the Appellate Body in
EC - Chicken Cuts noted that the two measures made no reference to the initial measures in that request, and the
initial measures continued to be in effect. For these reasons, and having determined that the subsequent
measures had legal implications different from those of the two original measures, the Appellate Body
concluded that the measures were not, in essence, the same and could not be considered "amendments" as were
the measures at issue in Chile –Price Band System . The Appellate Body additionally concluded that failure to
consider the two subsequent measures in the Panel's terms of reference "would not hinder a positive resolution
of this dispute" (Appellate Body Report on EC – Chicken Cuts, paras. 155-162).
210 Appellate Body Report on Chile – Price Band System, paras. 139 (also para. 7.175 below) and 144.
211 Appellate Body Report on US – Zeroing (21.5 - Japan) , para. 116. In that dispute, the Appellate
Body concluded that a periodic review could be identified for purposes of Article 6.2 of the DSU through the
use of the phrase "subsequent closely connected measur es". The Appellate Body explained that the phrase
"subsequent closely connected measures" in the complainant's panel request was sufficiently precise to identify
the review in question, which "formed part of a continuum of events" (Appellate Body Report on
US - Zeroing (21.5 - Japan), para. 116).

7.141 As noted above, pursuant to Article 12 of this Council Regulation No. 2658/87, Annex I,
which contains the CN, is updated annually and the latest version supersedes the prior one. In our
view, the Panel's terms of referenc e are broad enough to include sub sequent amendments to the CN.
The complainants' reference to Council Regulation No 2658/87 "as amended" and their use of the
phrase "any amendments or extensions and any re lated or implementing measures" in the Panel
request are sufficiently broad to account for the possi bility of amendments or extensions of the CN.
212
We will therefore consider whether subsequent amendments change the essence of the preceding
version of Council Regulation No. 2658/87 which was identified in the joint Panel request.
Whether subsequent amendments to Council Re gulation No. 2658/87 change the essence of
the version of that was identified by the complainants
7.142 We note that subsequent amendments to the Co uncil Regulation No. 2658/87 strictly prolong
its period of application without modifying any of th e terms or headings at issue in this dispute.
Accordingly, we conclude that subsequent amen dments, including the 2008- 2010 versions, do not
change the essence of the version of the CN (2007) set forth in Council Regulation No. 2658/87 that
was identified by the complainants. Therefore, we find that the subsequent amendments do not change
the essence of the version of Council Regulation No . 2658/87 which was identified in the joint Panel
request.
7.143 Finally, we will consider the implications of these measures for the u ltimate resolution of the
matter before us.
Whether the inclusion of any amendments within a panel's terms of reference is necessary to
secure a positive solution to the dispute
7.144 We recall that the complainants have requ ested the Panel to determine whether their
commerce has been accord ed treatment less favourable than that provided in the EC Schedules,
inconsistently with the obligations of the EC and its member States under Article II of the
GATT 1994. The complainants argue that the Europ ean Communities fails to accord tariff treatment
that is no less favourable than that provided for in its Schedule.213
7.145 As noted above, subsequent amendments to C ouncil Regulation No. 2658/87 (set forth in the
Annex) maintain the same terms and headings as th e measure identified by the complainants in their
joint Panel request. Therefore, we consider that a ruling that takes into consideration Council
Regulation No. 2658/87, as amended, which includes in Annex I the currently applicable CN 214,
would aid in the settlement of the dispute.

212 In this respect, we recall, for example in Chile – Price Band System , the panel request referred to
"Law 18.525, as amended by Law 18.591 and subsequently by Law 19.546, as well as regulations and
complementary provisions and/or amendments". The Appellate Body considered that language to reflect a
"broad scope of the Panel request in order to include a subsequent amendment within the Panel's terms of
reference". Appellate Body Report on Chile – Price Band System, para. 135.
213 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 3.
214 We note that the complainants have presented the CN2009 as Exhibits US-11; JPN-20; TPKM-21.
The Panel does not have in the record the CN2010. We understand however that there has been no change to
the relevant CN codes in the latest version of the CN.

Conclusions

7.146 For the foregoing reasons, we conclude that Council Regulation No. 2658/87, as amended,
which includes in Annex I the currently applicable CN, is the specific measure at issue in this dispute
and was properly identified as such in the joint Panel request.
(c) Is CNEN 2008/C 133/01 a measure that can be subject to WTO dispute settlement?
(i) Arguments of the parties
7.147 The European Communities argues that CNEN 2008/C 133/01 215 is not "legally binding" in
the European Communities' legal order and cannot alter the scope of the CN. 216 In its view, CNENs,
like HSENs, "are an important aid for interpreting the scope of the various tariff headings but do not
have legally binding force …" 217. The European Communities argu es that CNENs are not "like a
regulation", but "reflect a Commission's view on how the CN should be interpreted and applied with
respect to a certain product or a category of product at issue". 218 In this respect, it argues that there is
no mandatory language in the CNENs that precludes the exercise of discretion in relation to a monitor
identified with all of its relevant objective characteristics. 219 To what extent CNENs can create
expectations among the public and private actors, the European Communities argues, will depend on
the formulation of each relevant CNEN including the "clarity of the Note or parts thereof" and
"whether the content of the Note is in accordance with the wording of the relevant subheading and the
general interpretative rules and Section and Chapter Notes that are applicable for its interpretation".
220
The European Communities explains that the EC member States, when classifying imported goods,
have to base their classification on the CN and the interpretative rules therein (GIR 1-6) and not on
the CNENs. The European Communities submits that if some EC member States refer to a CNEN, "it
is merely to inform the economic operator that with respect to its product, the Commission has
already conducted the interpretative exercise and taken a non-binding view that the CN should be
interpreted in a particular way". 221 The European Communities further explains that the CNENs only

215 Throughout these Reports we will use the abbreviation "CNENs" to indicate Explanatory Notes to
the Combined Nomenclature in general, as a group. Th e abbreviation "CNEN" will be used with reference to a
particular Explanatory Note to the Combined Nomenclature.
216 European Communities' first written submission, paras. 312-314; European Communities' second
written submission, para. 55 (referring to European Co urt of Justice (Kamino), paras. 47-49 (Exhibit TPKM-
52)); European Communities' second oral statement, paras. 27-34.
217 European Communities' second written submission, para. 55; European Communities' second oral
statement paras 29-30 (referring to European Court of Justice (Kamino), para. 47 (Exhibit TPKM-52)).
218 European Communities' response to Panel question No. 23; European Communities' response to
Panel question No. 91.
219 European Communities' first written submission, paras. 66 - 69; European Communities' second
written submission, para. 55; European Communities' second oral statement pa ras. 29-35; European
Communities' response to Panel question No. 122. It ar gues that, simply because "a given sentence" in the
CNEN appears to be written with language that sounds mandatory does not mean that a mandatory rule exists in
the EC legal order (European Communities' second oral statement, para 35).
220 European Communities' response to Panel question No. 121.
221 European Communities' first written submission, para. 315; European Communities' second written
submission, para. 55. In its response to Panel question No. 91, the European Communities further clarified that
"with some simplification, the flexibility which the Panel asks about can be described as a flexibility to take a
view different from that expressed by a non-binding opinion on the interpretation of a binding legislation, with
the caveat that the authority expressing the non-binding opinion can try to convince th e Member State that it is
right before the court.". The European Communities al so mentioned that it cannot be excluded that national
customs authorities would classify a given product diff erently from the CNEN but that "[i]n such a case,

come into play at the eight-digit level of the CN
222, and that "the CNEN serves to confirm the
classification made on the basis of the CN, but it is not itself the legal reason and basis for that
classification".
223 To the extent a conflict arises betw een the terms of the CNEN and relevant
headings in the CN, the European Communities argu es that the CNEN is inapplicable and customs
officials are obliged not to apply it.224
7.148 Notwithstanding its views on the legal value of CNENs, the European Communities argues
that it is in the process of amending the relevant parts of the CNENs to be completed in
September 2009.
225
7.149 The complainants argue that CNENs set forth rules and norms that are intended to have
general and prospective application, that have legal effect and ensure uniformity of administration of
the CN. Moreover, they argue that CNENs provide administrative guidance and create expectations
among the public and among private actors that they will be applied.
226
7.150 Chinese Taipei argues that despite the repeated clai ms of the European Communities that
CNENs are not legally binding, an examination of th eir legal status confirms that they are "in fact"
legally binding.227 As the United States and Chinese Taipei note, just because CNENs cannot alter the
scope of the CN itself does not mean that EC cu stoms authorities would be free to disregard them. 228
First, a BTI will cease to exis t when contrary to a CNEN. 229 Second, certain statements of the Chair
of the Customs Code Committee prove that EC customs authorities must follow CNENs.230 Third, EC
member States that deviate from the content of a CNEN, and collect less import duties as a result
thereof, are considered liable and the Commi ssion has the option of instituting infringement
proceedings against such EC member States. 231 Fourth, since CNENs are "tools for ensuring a
uniform classification practice within the EC", they would not be able to ensure such uniformity if EC

however, there is a range of tools available to unify the classification" (European Communities' response to
Panel question No. 23).
222 See, e.g., European Communities' response to Panel question No. 83 (explaining the classification
exercise for set top boxes, and the use of the CNEN).
223 European Communities' second oral statement, para. 53 (cross-referencing with the European
Communities' response to Panel question No. 83).
224 European Communities' first written submission, para. 98; European Communities' second oral
statement, paras. 38-43; European Communities' response to Panel question No. 122.
225 European Communities' response to Panel questions Nos. 60 and 110. The European Communities
submits that draft changes to CNEN 2008/C 133/01 have already been prepared by the services of the
Commission and has been the subject of the necessary inter-service consultations, although the specific content
has not been revealed.
226 Complainants' responses to Panel question No. 121.
227 Chinese Taipei's second written submission, para. 132.
228 The United States makes a similar point (see United States' second written submission, para. 35).
229 United States' second written submission, para. 35; Japan and Chinese Taipei's responses to Panel
question No. 121. Japan argues that, like a regulation, a CNEN can result in the reclassification of products into
a different tariff line in the CN, and the application of a different duty rate.
230 In particular, the United States and Chinese Taipei referred to the statements of the Chairman of the
Customs Code Committee during the 413th, the 432nd and the 433rd meetings: see paras.7.999-7.1008 below.
231 Chinese Taipei's response to Panel question No. 121 (in particular, referring to the Customs Code
Committee's document on the Nature and Legal Value of Guidelines , 5.4.2006 (Exhibit TPKM-85, para. 13)
which explains that the Commission can initiate infringem ent proceedings against an administration for breach
of Article 10 of the EC Treaty, accord ing to which the Member States must facilitate the achievement of the
Community's tasks and abstain from any measure which could jeopardise the attainment of the objectives of the
EC Treaty).

member States were free to decide whether to apply them or not.
232 Further, the complainants submit
that CNENs are explicitly referenced in legisla tion implementing the EC domestic nomenclature, and
have been recognised by the Court of Justice as an important aid to the interpretation of Community
customs law. 233 Moreover, it notes that CNENs may be cited before the Commission or national
courts.234
7.151 Japan and Chinese Taipei argue that CNENs bind officials implementing EC customs tariffs
in member States to ensure that they are admini stered in a uniform manner within the EC customs
territory.235 Chinese Taipei argues that CNENs will not have legal effect only if the Commission
expressly amends the CNENs or the European Court of Justice declares the CNEN contrary to the
wording of the heading or Chapter or Section Notes.236
7.152 The United States argues that the European Communiti es has not offered evidence that the
content of the CNENs has changed as a result of ruli ngs before the European Court of Justice or for
other reasons.237 The United States submits that evidence of applications of CNEN by EC customs
authorities demonstrated they are binding. 238 The United States further argues that the European
Communities has relied on CNENs to assert that it has complied with DSB recommendations and
rulings regarding uniformity of administration.
239
(ii) Consideration by the Panel
7.153 The Panel acknowledges statements by the Europe an Court of Justice that CNENs "are an
important aid for interpreting the scope of the vari ous tariff headings but do not have legally binding
force...".240 The European Communities also argues that EC member States may depart from the
CNEN where they consider that it conflicts with the CN itself. In other words, the CNENs cannot
amend or alter the CN. The argument by the Eu ropean Communities appear s to be that because
CNENs are not "binding" or "mandatory", and becau se EC Member States have "discretion" not to
apply them, the CNENs cannot form the basis of an "as such" breach of th e European Communities'
obligations.
7.154 As an initial point, the Panel does not understa nd the European Communities to argue that
CNENs are not challengeable under WTO dispute settlement. That is, we do not understand the
European Communities to contest that CNENs are "act s…attributable to a Member". In our view, the
issue is rather whether they can be challenged on an "as such" basis. In this regard, the Panel recalls
that "an 'as such' claim challenges laws, regulations , or other instruments of a Member that have
general and prospective application, asserting that a Member's conduct — not only in a particular

232 Chinese Taipei's second written submission, paras. 61-70 (adding that such "infringement
proceedings" would be based on Article 10 of the EC Treaty); and paras. 132 and 261-268.
233 Complainants' responses to Panel question No. 121.
234 Chinese Taipei's response to Panel question No. 121.
235 Japan and Chinese Taipei's responses to Panel question No. 121.
236 Chinese Taipei's second written submission, paras. 132-134.
237 See, for instance, United States' second written subm ission, paras. 73-76; United States' response to
Panel question No. 110.
238 United States' first written submission, para. 127; United States' second written submission,
paras. 69, 72; United States' comment on European Communities' response to Panel questions Nos. 121-122.
239 United States' response to Panel question No. 18; United States' second written submission, para. 35,
fn. 65; United States' response to Panel question No. 121.
240 European Communities' second written submission, para. 55 (referring to European Court of Justice
(Kamino), paras. 47-49 (Exhibit TPKM-52), European Court of Justice (DFDS BV), para. 28 (Exhibits US-16;
TPKM-37); European Court of Justice (Clees), para. 12 (Exhibits EC-57; US-17)).

instance that has occurred, but in future situations as well — will necess arily be inconsistent with that
Member's WTO obligations."
241 It flows from this that, in ge neral, measures challenged "as such"
should have general and prospective application, and "necessarily" result in a breach of WTO
obligations. The Panel is mindful in this regard of the so-called mandatory/discretionary distinction
applied in a number of GATT cases prior to the establis hment of the WTO, and in several cases since.
We are also mindful that the Appellate Body h as cautioned against the mechanistic application of
such a distinction.242 We also recall the following statement by the Appellate Body with respect to the
Sunset Policy Bulletin (SPB) of th e United States, at issue in US - Oil Country Tubular Goods Sunset
Reviews:
"The United States has explained that, within the domestic legal system of the United
States, the SPB does not bind the USDOC and that the USDOC 'is entirely free to
depart from [the] SPB at any time'. However, it is not for us to opine on matters of
United States domestic law. Our mandate is confined to clarifying the provisions of
the WTO Agreement and to determini ng whether the challenged measures are
consistent with those provisions. As noted by the United States, in US - Corrosion-
Resistant Steel Sunset Review , the Appellate Body indicated that 'acts setting forth
rules or norms that are intended to have general and prospective application' are
measures subject to WTO dispute settlement. We disagree with the United States'
application of these criteria to the SPB. In our view, the SPB has normative value, as
it provides administrative guidance and creates expectations among the public and
among private actors. It is intended to have general application, as it is to apply to all
the sunset reviews conducted in the United States. It is also intended to have
prospective application, as it is intended to apply to sunset reviews taking place after
its issuance. Thus, we confirm - once agai n - that the SPB, as such, is subject to
WTO dispute settlement."
243
7.155 With this in mind, we move to consider th e European Communities' argument that CNENs,
by their nature, are not binding or mandatory and therefore cannot breach the obligations at issue "as
such".
7.156 Before turning directly to this question, the Pa nel finds it useful to recall certain features of
CNENs. In this respect, we note the explanati ons from the European Communities that the CNENs
are proposed and adopted by the Commission, follo wing discussion amongst the Commission and the
customs authorities of the 27 EC member States in the Customs Code Committee.
244 In the European
Communities' own words "[CNENs] reflect a Commission's view on how the CN should be
interpreted and applied with respect to a certa in product or a category of product at issue".
245 In
addition, the European Communities stated that CN ENs "constitute an important means of ensuring
the uniform application of the Common Customs Tariff by the customs authorities of the Member
States", and serve as "a valid aid to the interpretation of the tariff". 246 The European Court of Justice
has stated that CNEN are "an important aid in the interpretation of the CN". 247 Finally, the European

241 Appellate Body Report on US - Oil Country Tubular Goods Sunset Reviews, para. 172.
242 Appellate Body Report on US - Corrosion Resistant Steel Sunset Reviews, para. 93.
243 Appellate Body Report on US - Oil Country Tubular Goods Sunset Reviews , para 187 (original
footnotes omitted).
244 European Communities' first written submission, paras. 300-305.
245 European Communities' response to Panel question No. 91.
246 European Communities' second written submission, para. 69.
247 European Communities' second written submission, para. 55; European Communities' second oral
statement, paras. 29-30 (referring to European Court of Justice (Kamino), para. 47 (Exhibit TPKM-52)).

Communities has indicated that EC member States "decide on the classification of products in
individual cases" and that "in this role", they "consult" the CNENs.
248 We note, in addition, that the
complainants have submitted BTIs issued by EC member States in support of their claims under
Article II of the GATT 1994, some of which identif y the CNENs as a "classification justification". 249
The complainants have also argued that CNEN can have legal consequences for BTIs, such that a BTI
becomes invalid where it is determined to contradict guidance set forth in a CNENs. 250 Further, they
have argued that "if a Member State deviates in its classification practice from the approach taken in a
CNENs, the Commission can institute infringement pr oceedings before the European Court of Justice
against such a Member State".251
7.157 In line with the Appellate Body statements above , the Panel does not consider that the status
of CNENs under EC domestic law is determinative. In addition, while we note the statement of the
European Court of Justice that CNEN are not "legal ly binding", we understand this to relate, at least
in part, to the fact that CNEN cannot amend or alte r the CN. In the Panel's view, the legal effect of
CNEN on the CN is not the primary issue before it. The issue before it is whether CNEN set forth
rules or norms that are intended to have general a nd prospective application, and whether CNEN have
normative value in providing administrative guidance, and create expectations among the public and
among private actors. Stated another way, the issu e is whether CNEN are "a uthoritative" such that
"per se" requirements set out in the CNEN could va lidly form the basis of an "as such" claim of a
breach of Article II of the GATT.
7.158 We find that CNEN do meet this standard. It is clear that CNENs are important in enabling
the European Communities to main tain a uniform application of the Common Customs Tariff within
its territory. Although the European Communitie s has noted that CNENs do not "preclude the
exercise of discretion" by member State customs au thorities, it is apparent that there is a clear
expectation that such discretion will be exerci sed in a certain fashion and that infringement
proceedings may apply in instances where such discreti on is not so exercised. The Panel also finds it
relevant that CNENs are issued by the Commissi on, a body with undisputed authority within the
European Communities for ensuring the uniform application of the Customs Code Tariff, and with the
power to challenge interpretations not consistent with its own. Indeed, according to Regulation
No. 2658/87, as amended, the Commission establishes and manages the CN.252 In addition, according
to its Article 9, the Commission adopts Explanatory Notes. Moreover, the Panel notes that BTIs will
cease to be valid where they are no longer compatible "at Community level" with "the explanatory
notes [...] adopted for the purposes of interpreting the rules".253
7.159 In US – Underwear , the Appellate Body upheld the Panel's interpretation that an
administrative order was of "general application" "to the extent that the restraint affects an
unidentified number of economic operators, in cluding domestic and foreign producers." 254 In line
therewith, we consider that the CNEN amendments at issue in this dispute are of "general application"
because the application of a CNEN is not limited to a single import or a single importer. Rather, they

248 European Communities' response to Panel question No. 23.
249 See Exhibits US-28 and TPKM-61 referring to French BTIs that expressly mention as classification
250 See Article 12(5)(a)ii of the CCC (Exhibits US-19; TPKM-16), which provides that BTI shall cease
to be valid "where it is no longer compatible with the in terpretation of one of the nomenclatures referred to in
Article 20(6): at Community level, by reason of amendments to the Explanatory notes to the combined
nomenclature".
251 European Communities' response to Panel question No. 91.
252 See Council Regulation No. 2658/87, Articles 1; 2 and 6 (Exhibits EC-49; US-13; TPKM-5).
253 See Article 12(5)(a)ii of the CCC (Exhibits US-19; TPKM-16).
254 Panel Report on US - Underwear, para. 7.65.

set forth rules or norms that are intended to have general and prospective application. The objective
of the CNEN is to ensure the uniform a pplication of the Common Customs Tariff to all products
falling under a specific CN code upon importation into the EU. The CNEN create legitimate
expectations among the public and among private actors.
7.160 We therefore conclude that CNEN 2008/C 133/ 01 identified by the complainants in this
dispute may be challenged "as such". We consider its effects in paragraph 7.246 et seq. below.
(d) Are Commission Regulation Nos. 634/2005 and 21 71/2005 outside the Panel's jurisdiction
because they are no longer effectively applicable?
(i) Arguments of the parties
7.161 The European Communities argues that Commission Regulation Nos. 634/2005 and
2171/2005 provide for classification of certain LCD monitors within CN codes 8471 60 80 and
8528 21 90 as the CN codes existed at the time in li ght of the HS2002. However, it argues that these
codes were replaced in 2007 by CN codes 8528 41 00 and 8528 59 90. Because CN codes 8471 60 80
and 8528 21 90 no longer exist, the European Comm unities alleges that Commission Regulation Nos.
634/2005 and 2171/2005 "have effectively lost their relevance". The Europ ean Communities states,
in addition, that it is in the process of repealing or replacing them as appropriate for reasons of legal
certainty.
255
7.162 The complainants argue that Commission Regulation Nos. 634/2005 and 2171/2005 are both
still valid and have legal effect. 256 The complainants argue that Commission Regulation Nos.
634/2005 and 2171/2005 w ould only cease to be valid if they were expressly revoked by the
Commission or expressly annulled by the European C ourt of Justice. They argue that the European
Communities has not provided evidence to suggest otherwise, nor has a ruling by the European Court
of Justice in Kamino demonstrated that the measures were amended or revoked. Moreover, the United
States and Chinese Taipei argue there is no implied annulment under EC Community law or
annulment by analogy. The United States argues that the mere fact that the HS codes have changed
does not under EC law prevent customs authorities from relying on regulations that predated the
change in the codes. Japan argues that the measures are still valid "as part of the legal context in
which the EC would presumably interpret its more recent measures ...unless and until the EC presents
sufficient evidence that the older measures have been formally withdrawn". Finally, the United States
and Chinese Taipei argue that Article 12(5) of the CCC provides a further basis to conclude that the
classification regulations continue to have effect. Th ey allege that this provision states that BTI will
automatically cease to be valid where they conflic t with a classification regulation, an explanatory
note or a judgment of the European Court of Justice. As a result, absent formal annulment, revocation
or amendment, traders cannot rely on conflicting BTI.
257
(ii) Consideration by the Panel
7.163 The Panel is faced with two questions. First, what is the precise status of Commission
Regulation Nos. 634/2005 and 2171/2005? Second, if the implementation of the CN2007 did indeed
supersede and render ineffective Commission Regula tions 634/2005 and 2171/2005, does this mean
they can no longer be considered measures at issue in this dispute?

255 European Communities' first written submission, para. 95; European Communities' second written
submission, para. 63.
256 Complainants' responses to Panel question No. 18.
257 Complainants' responses to Panel question No. 18.

7.164 We understand the European Communities' argument as follows: the adoption of the CN2007
resulted in these two measures becoming "e ffectively inapplicable in practice".
258 Accordingly, we
understand the European Communities has requested th e Panel not to consider them. We first note
that the European Communities does not disput e that Commission Regulation Nos. 634/2005 and
2171/2005 were operative prior to implementation to the HS/CN2007. Additionally, although the
European Communities has told the Panel that it w as in the process of repealing or replacing the
measures, the European Communities has submitted no information to the Panel confirming whether
this actually occurred.
7.165 Regardless, if the formal repeal of the measure s did occur after the Panel was established and
its terms of reference set, it w ould be within our discretion to decide how to take into account
subsequent modifications or a repeal of the measures at issue. 259 In exercising that discretion, we note
that past panels have ruled on repealed or e xpired measures if those measures still had lingering
effects after the repeal260 or if they thought such a ruling would aid in securing a positive resolution to
the dispute as required by Article 3.7 of the DSU. 261 Panels have also decided to make rulings on
repealed or expired measures where the re spondent Member had not conceded the WTO
inconsistency of the measure and the repealed measure could be easily re-imposed.262
7.166 We note that there is no disagreement that the complainants specifically identified
Commission Regulation Nos. 634/2005 and 2171/2005 in the joint Panel request. We also note that
the complainants argue that the measures continue to have lingering effect as evidenced by BTIs
submitted by the complainants.
263 Additionally, the complainants continue to request a finding from
the Panel on these measures and are of the belief that a finding from the Panel on the consistency of
these measures with the European Communities' obligations under the GATT 1994 would aid in
securing a positive resolution of this dispute. Fina lly, the European Communities has not argued that
the envisioned repeal of these measures is because it concedes that they are inconsistent with its WTO
obligations. For all the foregoing reasons, the Panel will proceed to make findings with respect to
their WTO consistency.
7.167 As noted above, the European Communities indicated to the Panel that it intended to repeal
the measures and that "DG TAXUD expects to be able to submit a draft to the Customs Code
Committee for a vote in late September or the beginning of October [2009] at the latest" 264; however,
there is no evidence properly before the Panel as to whether that repeal actually took place. In any
event, we note that any repeal would have taken pl ace after the panel was established and its terms of
reference were set.265 Therefore, the Panel considers that it may make recommendations with respect
to these measures.

258 See paragraph 7.161 above.
259 Appellate Body Report on EC – Bananas III (Article 21.5 – United States), para. 270.
260 Panel Report on US – Upland Cotton , paras. 7.122, 7.128; upheld in Appellate Body Report on
US - Upland Cotton, para. 274.
261 Panel Report on China – Publications and Audiovisual Products, para. 7.453.
262 Panel Report on India – Additional Duties, paras. 7.69-7.70.
263 See, for instance, United States' first written s ubmission, para. 127; United States' second written
submission, paras. 69 and 72; United States' comment on European Communities' response to Panel questions
Nos. 121-122.
264 European Communities' response to Panel question No. 110; European Communities' response to
Panel question No. 60.
265 The Appellate Body has explained that it would be inappropriate for a panel to make
recommendations with respect to measures that were repealed or expired prior to the establishment of the panel.

(e) Whether the Panel may consider the conti nuation of a duty suspension on imports of
particular flat panel display devices subsequent to the consultations request and establishment
of this Panel?
(i) Arguments of the parties
7.168 The European Communities submits that Council Regulation No. 179/2009 of 5 March
2009
266, which it submits to have replaced Council Regu lation No. 493/2005, is the relevant measure
for the Panel's consideration.267
7.169 The United States argues that the extension of the suspension under Council Regulation
No.179/2009 should not be considered within the Panel's terms of reference because it was not "in
effect" at the time the Panel was established.268
(ii) Consideration by the Panel
7.170 In their joint Panel request, the complainants identified Council Regulation No. 493/2005 as a
measure at issue in this dispute. This measure expired on 31 December 2006, but was extended under
Council Regulation No. 301/2007 until 31 December 2008. These two regulations suspended the
application of duties on "monitors with a diagonal measurement of the screen of 48,5 cm or less and
with an aspect ratio of 4:3 or 5:4".269
7.171 Council Regulation No. 179/2009 replaced Co uncil Regulation No. 301/2007. This
regulation suspends the application of duties on certain black and white or other monochrome
monitors, and certain colour monitors. Council Regulation No. 179/2009 will expire on 31 December
2010.270
7.172 The complainants did not identify Council Regulation No. 301/2007 as a measure at issue in
their joint Panel request, but they specifically referre d to it in their Panel request when alleging that
the EC measures fail to accord tariff treatment that is no less favourable than that provided for in the
EC Schedules.271 None of the complainants argued that Council Regulation No. 301/2007 is outside
of the Panel's terms of reference. Similarly, th e complainants did not identify Council Regulation No.
179/2009 as a measure, in particular, because it had not yet been promulgated at the date of the Panel
request. However, the European Communities 272 as well as Chinese Taipei 273 have acknowledged
Council Regulation No. 179/2009 in the context of their arguments. Chinese Taipei argues that

Appellate Body Report on US – Certain EC Products, para. 81; Appellate Body Report on US - Upland Cotton,
para. 272; and Appellate Body Report on EC – Bananas III (Article 21.5 – Ecuador II), para. 271.
266 Council Regulation No. 179/2009 (Exhibit EC-9).
267 European Communities' first written submission, para. 94.
268 United States' second written submission, paras. 76 and 79.
269 Articles 1 of Council Regulation Nos. 493/2005 and 301/2007 (Exhibits TPKM-25; US-45
respectively).
270 Council Regulation No. 179/2009, 3rd and 6th recitals and Article 1.
271 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 3. Chinese Taipei additionally discusses
Council Regulation No. 301/2007 in paras. 214-215 of its first written submission.
272 See, e.g., European Communities' first written submission, para. 94.
273 Chinese Taipei's response to Panel question No. 18.

Council Regulation No. 179/2009 does not ch ange the essence of the duty suspension.
274 The United
States contests its inclusion within the Panel's terms of reference.275
7.173 We recall that the complainants referred to "any amendments or extensions and any related or
implementing measures", in addition to iden tifying Council Regulation No. 493/2005, when
discussing the measures at issue.276
7.174 We note that the European Communities has not contested the inclusion or reference of
Council Regulation No. 493/2005. As mentioned, the European Communities has itself discussed the
relevance of Council Regulation No. 179/2009.
7.175 Regarding amendments to measures, discussed in the context of the Panel's terms of
reference, the Panel recalls the followi ng statement by the Appellate Body in Chile – Price Band
System, also cited in paragraph 7.137 above:
"[T]he demands of due process are such that a complaining party should not have to
adjust its pleadings throughout dispute settleme nt proceedings in order to deal with a
disputed measure as a 'moving target'. If the terms of reference in a dispute are broad
enough to include amendments to a measure – . . . – and if it is necessary to consider
an amendment in order to secure a positive so lution to the dispute – as it is here –
then it is appropriate to consider the meas ure as amended in coming to a decision in a
dispute."
277
7.176 As we noted above, the Appellate Body examin ed in that case the relationship between the
original measure and the subsequent amendment to that measure, and determined that the law in
question "amend[ed]" Chile's price band system "without changing its essence".278
7.177 In light of the Appellate Body's earlier stat ements, we recognized that a panel's terms of
reference may be considered to include "amendments" to measures that are listed in the panel request
as long as the terms of reference are broad enough, and the new measure does not "change the
essence" of the original measures included in the re quest. Moreover, we noted, it may be relevant to
consider whether the inclusion of any amendments w ithin a panel's terms of reference is necessary to
secure a positive solution to the dispute. The Panel will consider here whether it may properly
consider amendments to the duty suspension.

274 Chinese Taipei's response to Panel question No. 18.
275 United States' second written submission, paras. 76 and 79.
276 See para. 7.128 above.
277 Appellate Body Report on Chile – Price Band System, para. 144.
278 Appellate Body Report on Chile – Price Band System, para. 139 (emphasis original). The Appellate
Body in EC – Chicken Cuts considered the relevance of its earlier findings in its report in
Chile - Price Band System, in particular the notion of changing the essence of the original measure. In
considering two measures that had been enacted subsequent to the panel request, the Appellate Body in
EC - Chicken Cuts noted that the two measures made no reference to the initial measures in that request, and the
initial measures continued to be in effect. For these reasons, and having determined that the subsequent
measures had legal implications different from those of the two original measures, the Appellate Body
concluded that the measures were not, in essence, the same and could not be considered "amendments" as were
the measures at issue in Chile –Price Band System . The Appellate Body additionally concluded that failure to
consider the two subsequent measures in the Panel's terms of reference "would not hinder a positive resolution
of this dispute" (Appellate Body Report on EC – Chicken Cuts, paras. 155-162).

Whether the Panel's terms of reference are br oad enough to include Council Regulations Nos.
301/2007 and 179/2009
7.178 In the case before us, we note that, in addition to identifying Council Regulation
No. 493/2005, the complainants include the phrase "any amendments or extensions and any related or
implementing measures".279
7.179 The complainants do not expressly identify C ouncil Regulations Nos. 301/2007 or 179/2009
as measures in their joint Panel request, alt hough they do discuss Council Regulation Nos. 301/2007
in their Panel request 280, and subsequently in their submissions. 281 Therefore, we must examine
whether the phrase "any amendments or extensions and any related or implementing measures" is
sufficiently broad so as to describe Council Regulations Nos. 301/2007 or 179/2009.
7.180 In our view, the main text of the Panel Request is broad enough to include Council
Regulations Nos. 301/2007 or 179/2009. The terms of measures in the Panel request before us, like
those terms in panel requests in previous disputes th at were construed broadly, are sufficiently broad
to account for the possibility of amendments or extensions of the identified measures. 282 We will
therefore consider whether the new measures that we re not enumerated as "measures at issue" in the
complainants' joint Panel request, change the essence of Council Regulation No. 493/2005.
Whether the inclusion of Council Regulations Nos. 301/2007 and 179/2009 change the
essence of Council Regulation No. 493/2005
7.181 Council Regulation No. 301/2007 expressly states in its seventh recital that "the suspension
introduced by this Regulation is a prolongation of a suspension introduced by Regulation 493/2005"
and that "it is not in the interest of the Community that there be any interruption of the tariff treatment
of the monitors covered by this suspension". Moreover, Council Regulation No. 301/2007 extends for
two years a suspension of the application of duties to the same range of products to which Council
Regulation No. 493/2005 applied, namely, "monitors with a diagonal measurement of the screen of
48,5 cm or less and with an aspect ratio of 4:3 or 5:4". Article 1 of this regulation sets forth the
specific legal obligations to au tonomously suspend 14 per cent ad valorem duties under CN code
8528 59 90, until 31 December 2008, for "monitors with a diagonal measurement of the screen of 48,5
cm or less and with an aspect ratio of 4:3 or 5:4".
7.182 Because Council Regulation No. 301/2007 simply prolongs the period of application of
Council Regulation No. 493/2005 without modifying the scope of applicability of the duty
suspension, we consider the measure does not change the essence of Council Regulation
No. 493/2005.
7.183 We next consider Council Regulation No. 179/2 009. This regulation indicates in its sixth
recital that "the suspensions provided for in this Regulation are an extension of the suspension
introduced by Regulation 301/2007 ...". In its third recital, Council Regulation No. 179/2009 indicates
that "it is in the interest of the Community to extend the current autonomous duty suspension for two

279 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 2.
280 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 2.
281 See, for instance, Exhibit US-45; Chinese Taipei's first written submission, para. 89.
282 In this respect, we recall, for example in Chile – Price Band System , the panel request referred to
"Law 18.525, as amended by Law 18.591 and subsequently by Law 19.546, as well as regulations and
complementary provisions and/or amendments". The Appellate Body considered that language to reflect a
"broad scope of the Panel request in order to include a subsequent amendment within the Panel's terms of
reference". Appellate Body Report on Chile – Price Band System, para. 135.

years starting from 1 January 2009 and to increase the diagonal measurement of the screen to 55,9 cm
(22 inches) and to add the additional aspect ratios of 1:1 and 16:10". In its fourth recital, the
regulation provides "it is also in the interest of the Community to provid e for a suspension for two
years starting from 1 January 2009 for black and white or other monochrome monitors with a
diagonal measurement of the screen not exceeding 77 ,5 cm (30,5 inches) a nd with the same aspect
ratios as for colour monitors".
7.184 Article 1 of Council Regulation No. 179/2009 sets forth the specific legal obligation to
autonomously suspend 14 per cent ad valorem duties, until 31 December 2010, for certain products.
In particular, under CN code 8528 59 10, duties are to be suspended for:
"[B]lack and white or other monochrome monitors, using liquid crystal display
technology, equipped with either digital vi sual interface (DVI) or a video graphics
array (VGA) connector or both with a diagonal measurement of the screen not
exceeding 77,50 cm (i.e. 30,5 inches), with an aspect ratio of 1:1, 4:3, 5:4 or 16:10,
with a pixel resolution exceeding 1,92 me ga pixels, and with a dot pitch not
exceeding 0,3 mm".
7.185 Under CN code 8528 59 90, duties are to be suspended for:
"[C]olour monitors, using liquid crysta l display technology, with a diagonal
measurement of the screen not exceeding 55,9 cm (i.e. 22 inches), with an aspect
ratio of 1:1, 4:3, 5:4 or 16:10".
7.186 Thus, unlike in the case of Council Regul ation No. 301/2007, Council Regulation
No. 179/2009 not only prolongs the duration of th e initial duty suspension established under Council
Regulation No. 493/2005, but also expands the preci se terms of the suspension to a broader category
of products, including those "black and white or other monochrome monitors" specified above, and
"colour monitors" as specified above. Despite such en larged coverage, we do not consider that this
measure operates in such a way as to change the essence of its predecessor measures implementing
and prolonging the duty suspension. We note that th e duty suspension is in essence applicable to
"monitors", albeit both black and white or other mono chrome and colour ones. However, we consider
the suspension operates in a near identical manner wi thin EC law and has similar legal implications.
That is, the suspension excludes certain LCD colour monitors from the application of duties arising
from classification under CN code 8528 59 90. The lat est measure, at least in part, more broadly
suspends the application of duties on LCD colour monitors with a diagonal measurement of up to 55,9
cm with various aspect ratios of 1:1, 4:3, 5:4 or 16:10, as opposed to only those with a diagonal
measurement of up to 48,5 cm and aspect ratios of either 4:3 or 5:4.
283 Although the precise terms of
the suspension point to a broader category of pr oducts, we consider Council Regulation No. 179/2009
does not change the essence of Council Regulation No. 493/2005.
7.187 In summary, we have thus far concluded that the Panel's terms of re ference are broad enough
to include Council Regulations Nos. 301/2007 and 179/2009, due to the complainants' reference to
"any amendments or extensions and any related or implementing measures" in their joint Panel
request. In addition, we concluded that C ouncil Regulations Nos. 301/2007 and 179/2009 do not

283 In addition, the latest measure extends coverage to LCD black and white or monochrome monitors
with diagonal measurement of the screen not exceeding 77,50 cm (i.e. 30,5 inch es), with an aspect ratio of 1:1,
4:3, 5:4 or 16:10, with a pixel resolution exceeding 1, 92 mega pixels, and with a dot pitch not exceeding
0,3 mm.

change the essence of Council Regulation No. 493/2005. Finally, we will consider the implications of
these measures for the ultimate resolution of the matter before us.
Whether the inclusion of any amendments within a panel's terms of reference is necessary to
secure a positive solution to the dispute
7.188 We recall that the complainants have requ ested the Panel to determine whether their
commerce has been accord ed treatment less favourable than that provided in the EC Schedules,
inconsistently with the obligations of the EC and its member States under Article II of the GATT
1994. The complainants argue that the European Co mmunities fails to accord tariff treatment that is
no less favourable notwithstanding the suspension of duties under Council Regulation 493/2005 and
Council Regulation 301/2007.284
7.189 As noted above, Council Regulations Nos. 493/2005 and 301/2007 have expired. Council
Regulation No. 179/2009 is the legislation that is cu rrently in force. Therefore, we consider that a
ruling that takes into consideration Council Regul ation No. 179/2009 would aid in the settlement of
this dispute.
Conclusions
7.190 For the foregoing reasons, we conclude th at Council Regulations Nos. 301/2007 and
179/2009, as amendments and extensions of Council Regulation No. 493/2005, are within the Panel's
terms of reference.
(f) Did the complainants adequately identify the products at issue in the Panel request?
(i) Arguments of the parties
7.191 In its first written submission, the European Communities raised several allegations in the
context of arguing that the complainants have "failed to make a prima facie case" for a series of
reasons. Among them, the European Communities argues that the complainants have failed to make a
prima facie case by "failing to identify the product or products at issue in sufficient detail…". 285 In
discussing what is required to succeed in an "as su ch" claim, the European Communities submits that
the Appellate Body in EC – Computer Equipment recognized that, in order to identify the 'specific
measures at issue', it may also be necessary to identify the products subject to the measures in
dispute".286 While noting the statement by the Appellate Body in EC – Chicken Cuts , according to
which one can define the products at issue through the challenged measures, the European
Communities argues that this approach is inapplicab le where the products at issue are "significantly
more complex" and the measures at issue do not apply a single criterion when considering their
classification.287
7.192 The complainants indicated that the identified measur es at issue apply to, for instance,
"certain flat panel displays using LCD technology that are 'capable of reproducing video images from
a source other than an automatic data-processing mach ine'", and "flat panel displays with certain
attributes, such as DVI".288 The complainants reject the European Communities' interpretation of EC –

284 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 3.
285 European Communities' response to Panel question No. 22.
286 European Communities' response to Panel question No. 22 (citing the Appellate Body Report on
EC – Computer Equipment, para. 67 (emphasis in original)).
287 European Communities' response to Panel question No. 22.
288 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 3.

Computer Equipment. Rather, they argue that the approach taken in both EC - Computer Equipment
and EC – Chicken Cuts supports the view that the products at issue "flow from the measures identified
in the panel request".
289
(ii) Consideration by the Panel
7.193 The Panel recalls that Article 6.2 of the DSU requi res a complainant to "identify the specific
measures at issue and provide a brief summary of th e legal basis of the complaint sufficient to present
the problem clearly".
7.194 Article 6.2 of the DSU does not refer to the identification of the products at issue, but instead,
only refers to the identification of the specific measures at issue. The Appellate Body has explained
that under DSU Article 6.2, "the identification of the product at issue is generally not a separate and
distinct element of a panel's terms of reference; ra ther, it is a consequence of the scope of application
of the specific measures at issue." Thus, it concluded that it is "the measures at issue that generally
will define the product at issue."
290 At the same time, though, it recognized that it may be necessary to
identify the products at issue, in instances where decisions of customs authorities are under challenge,
in order to identify the specific measures at issue.291
7.195 In their joint Panel request, we recall that th e complainants indicated that the identified
measures at issue apply to, for instance, "certain flat panel displays using LCD technology that are
'capable of reproducing video images from a source other than an automatic data-processing
machine'", and "flat panel displays with certain attributes, such as DVI". 292 The complainants have
identified a series of generally applicable EC measures pertaining to the tariff classification of
products (including certain CN codes, classification regulations and CNENs) in connection with their
claims concerning FPDs. In certain cases, the complainants have also identified individual
classification decisions by customs authorities as evidence of the application of the measures at issue.
7.196 The Panel notes that while the European Comm unities has not argued that the complainants
have breached the provisions of Article 6.2 it has argued that the complainants "failed to make a
prima facie case" of violation, "as such", by allegedly failing to identify the products with sufficient
clarity.
293 To the extent that the European Communities ' arguments relate to the issue of what is
required to establish an "as such" claim we have dealt with this in paragraphs 7.103-7.117 above.
With regard to the issue of whether the co mplainants have established a prima facie case, this can
only be determined after considering the full range of arguments and evidence before the Panel, which
we do in subsequent sections. At this stage the Panel confines itself to the issue of whether the
products were sufficiently identified for the purposes of Article 6.2. While the European Communities
has not raised a claim in these terms, we recall our statement in paragraph 7.134 above that Panels
may choose to deal with issues on their own motion wh ere it considers that they go to the heart of
their jurisdiction, to satisfy themselves that they may proceed. In the circumstances of this case, we
consider it useful to examine at the outset the meas ures that fall within our te rms of reference and the
corresponding products at issue.

289 United States' second written submission, para. 16; Japan's response to Panel question No. 22.
290 Appellate Body Report on EC – Chicken Cuts, para. 165 (emphasis original).
291 Appellate Body Report on EC – Chicken Cuts, para. 166; Appellate Body Report on EC – Computer
Equipment, para. 67.
292 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 3.
293 European Communities' first written submission, paras. 32, 34-49.

7.197 We note here that the contested measures are not individual classification decisions by
customs authorities, but, rather, as was the case in EC – Chicken Cuts , are generally applicable legal
instruments.
294 In our view, the joint panel request fo cuses on particular aspects of the measures at
issue, which in turn identify the products at issu e sufficiently for the purposes of Article 6.2 of the
DSU. The panel request focuses on flat panel display devices with two characteristics – those capable
of reproducing video images both from an ADP and a source other than an automatic data-processing
machine, and those with certain attributes, such as a built in DVI interface. Thus, for the purposes of
fulfilling the requirements of Article 6.2 of the DSU, we conclude there has been sufficient
identification of the products for us to proceed with the dispute at hand.
(g) Have the complainants identified obligations "with the necessary clarity" for the European
Communities to defend itself and for the Panel to rule on the complainants' claims under
Articles II:1(a) and II:1(b) of the GATT 1994?
(i) Arguments of the parties
7.198 The European Communities argues that, in their first submissions, the complainants failed
to identify the precise concession that is allegedly breached both in terms of its substantive content
and where precisely it is provided for in the Schedule of the European Communities.
295 In particular,
the European Communities argues that the complainants ' claim in their joint Panel request that "their
commerce has been accorded treatment less favourable than that provided in the EC Schedules , and
that ordinary customs duties, or other duties and charges, in excess of those set forth in the EC
Schedules have been applied to certain flat panel displays (...)" (emphasis added). 296 The European
Communities argues that the United States did not define precisely the text that should be analysed
when discussing products that are also listed in Attachment B.
297 The European Communities
questions whether Japan considers that the text of the ITA is incorporated by reference into the
concessions or whether the language in the Annex to the EC Schedule itself is the concession.298 The
European Communities argues that Chinese Taipei has claimed th e concessions are in the EC
Schedule and not in the text of the ITA itself. The European Communities continues that Chinese
Taipei has ignored the fact that the Annex to th e EC Schedule contains a list of tariff item numbers,
and further failed to account for the fact that the terms "device" and "vacuum-fluorescence" were
incorporated into the final text of the ITA. 299 In sum, the European Communities argues that the
complainants "appear to use the terms set forth in the EC Schedule and ITA almost interchangeably
without providing a justification for such an approach". 300 Without knowing where the concession
actually is, the European Communities claims that it is not clear whether the substantive obligations
are identical for all parties, or whether certain differences were allowed to exist. Moreover, the
European Communities argues that its ability to defend itself is compromised due to a lack of clarity
regarding the concessions' locations.301
7.199 The European Communities considers that the narrative product definitions in the EC
Schedule pursuant to Attachment A, Section 2 and A ttachment B and the tariff item numbers next to
them reflect the common understanding between WT O Members of the scope of the relevant EC

294 Appellate Body Report on EC – Chicken Cuts, para. 167.
295 European Communities' first written submission, para. 51.
296 European Communities' first written submission, para. 50.
297 European Communities' first written submission, para. 52.
298 European Communities' first written submission, para. 54.
299 European Communities' first written submission, para. 56.
300 European Communities' first written submission, para. 57.
301 European Communities' first written submission, para. 61.

commitments pursuant to Attachment A, Section 2 and Attachment B.
302 The European Communities
recognizes two possibilities: first, that the product descr iptions and the headings next to them in the
Annex to the EC Schedule are the concession, or second, that the product descriptions in the ITA
itself are incorporated into the EC Schedule as a "safety net".303
7.200 The European Communities disputes the rele vance of document WT/MIN(96)/16/Corr.1. 304
Noting the format and numbering of the documen t in comparison to other WTO documents, the
European Communities submits that there is no evidence that the said document was ever officially
circulated among all WTO Members. The European Communities asserts that a separate document,
G/L/159/Rev.1, states that ITA participants "agreed to amend the description of the products in
Attachment B and this amendment is already reflected in the schedules of participants", thus revealing
that amendments would be done via the Schedules of ITA participants.
305
7.201 The United States argues that the Panel "must look at Attachment B and the product
descriptions contained therein" to determine the sco pe of the concession as, it argues, the text of the
EC headnote expressly directs the reader to Attachment B. 306 In this regard, the United States argues
that the chapeau to Attachment B, including its ph rases "products described in or for Attachment B",
"[p]ositive list of specific products" and "wherever th ey are classified in the HS" should be evaluated
to the extent they provide additional information "o n whether a given product is 'described in or for
Attachment B'".307 Moreover, it argues, had the drafters in tended to refer only to the list of products
reproduced in the EC Schedule, they would have stated so by referring to the list of product
descriptions below the EC headnote rather than by referring to Attachment B itself. 308 However, the
United States submits that Attachment B was modified to reflect certain technical corrections,
including the addition of the terms "devices" and "Vacuum Fluorescence", pursuant to document
WT/MIN(96)/16/Corr.1309, dated 13 October 1997. The United States argues that this document is an
official WTO document that reflects a consen sus to correct the legal text of the ITA. 310 Thus, it
concludes that there are no discrepancies between the description for "flat panel display devices (...)"
that appears in the EC Schedul e and the one in Attachment B. 311 As such, it considers the relevant
language is identical for purposes of the Panel's assessment of the concession.312

302 European Communities' response to Panel question No. 5.
303 European Communities' response to Panel question No. 5.
304 WT/MIN(96)/16/Corr.1 (13 October 1997) (Exhibit US-36). WT/MIN(96)/16/Corr.1 sets out
typographical and other corrections to the ITA.
305 European Communities' comment on the complainants' responses to Panel question No. 115.
306 United States' response to Panel question No. 5.
307 United States' and Chinese Taipei's responses to Panel question No. 111.
308 Complainants' responses to Panel question No. 5.
309 Exhibit US-36.
310 The United States submits that the document is formatted as an official WTO document, has an
assigned document number, and is not identified as a draf t, thus dispelling doubts about its authenticity (see
United States' second written submission, para. 66, fn.129). To the extent there are doubts as to its origin, the
United States submits that the fact that participants agre ed to changes to Attachment B is also supported within
G/L/159/Rev. 1 (24 April 1997), which, it contends, states, "In the plurilateral technical discussions held before
31 January 1997, it was agreed to amend the description of the products in attachment B and this amendment is
already reflected in the schedules of participants." (See United States' response to Panel question No. 115
(Exhibit US-37)). Finally, in reference to the Europe an Communities' first written submission (para. 186), the
United States submits that the European Communities does not dispute that the changes to the FPDs concession
were "part of the final agreement." (See United States' response to Panel question No. 115).
311 United States' responses to Panel questions Nos. 5 and 55.
312 Complainants' responses to Panel question No. 5.

7.202 Japan and Chinese Taipei submit that the EC concession, while made pursuant to
Attachment B, is located in the Annex to the EC Sc hedule, and not in Attachment B itself. Thus, they
consider that they have clearly identified the precise concession and made clear that these concessions
appear in the EC Schedule.
313 The language of the product narr ative descriptions contained in
Attachment B has been incorporated into the EC Schedule, and thus, constitu tes the language of the
EC tariff concession314. Notwithstanding, Japan and Chinese Taip ei agree with the United States that
there are no discrepancies between the description for "flat panel display devices (...)" in the EC
Schedule and the one in Attachment B as a result of an agreement to include the terms "devices" and
"Vacuum Fluorescence", reached pursuant to document WT/MIN(96)/16/Corr.1.315
7.203 The European Communities contends that it does not have document
WT/MIN(96)/16/Corr.1 and consequently concludes that the document was never circulated to WTO
Members or ITA participants.
316 Nevertheless, the European Co mmunities submits that the terms
"devices" and "vacuum-fluorescence" were incorporated into the final text of the ITA in response to a
request by Switzerland during negotiations of the final ITA text, though it considers the agreement
was never "formally rectified".317
(ii) Consideration by the Panel
7.204 The Panel notes that the European Communities has not argued that the complainants' alleged
failure to identify the precise concession means th at the complainants have failed to satisfy the
provisions of Article 6.2 or other provisions of the DSU; instead, the European Communities argues
that the complainants failed to make a prima facie case of violation by allegedly failing to identify the
precise concession with respect to its claims concerning flat panel display devices.
7.205 The Panel considers that two issues arise in light of the European Communities' contention
that the complainants did not id entify the obligations "with the n ecessary clarity" for the European
Communities to defend itself: first, have the compla inants sufficiently referred to the concessions at
issue in their joint Panel request, and second, what is the location of the concession arising under the
FPDs narrative description for the purposes of the Panel's analysis.
7.206 We recall again our statement in paragraph 7.134 above that Panels may choose to deal with
issues on their own motion that they consider to go to the heart of their jurisdiction, to satisfy
themselves that they may proceed. 318 We will thus first address whether the complainants sufficiently
identified the obligations in their Panel request to permit the Panel to proceed. Second, we will

313 Japan's second written submission, para. 133; Chinese Taipei's second written submission,
paras. 100-111.
314 Japan's and Chinese Taipei's responses to Panel question No. 5.
315 Japan's and Chinese Taipei's response to Panel question No. 55. Japan argues that it "assumes that
the said document was not a draft and was circulated" because it has document WT/M IN(96)/16/Corr.1 in its
archives. (Japan's response to Panel question No. 115) . Chinese Taipei agrees w ith the United States that
document WT/MIN(96)/16/Corr.1 is an official WTO document that was circulated among WTO Members, in
light of its format and designation with a WTO docume nt number (Chinese Taipei's response to Panel question
No. 115).
316 The European Communities contends that document WT/MIN(96)/16/Corr.1 is possibly an unused
draft. (see European Communities' response to Panel question No. 55).
317 See European Communities' first written submissi on, para. 186; Trade in Information Technology
Products: Result of Bilateral Consultations, Communi cation from Switzerland (G eneva 21 January 1997)
(Exhibit EC-29).
318 Appellate Body Report on Mexico – Corn Syrup (Article 21.5 – US), paras. 36 and 53.

address the issue of precisely wh ere the concession arising under th e narrative product description for
"flat panel display devices" is located.
Whether the complainants sufficiently identifie d the obligations in their Panel request to
permit the Panel to proceed
7.207 We recall that Article 6.2 of the DSU requires a complainant to "provide a brief summary of
the legal basis of the complaint sufficient to present the problem clearly".
7.208 In US – Oil Country Tubular Goods Sunset Reviews , the Appellate Body found that the term
"legal basis" in Article 6.2 of the DSU refers to the claim made by the complaining party. 319 T h e
Appellate Body has clarified that a claim sets fort h the complainant's view that "the respondent party
has violated, or nullified or impaired the benefits arising from, an identified provision of a particular
agreement".320
7.209 While a claim sets forth the comp lainant's view that the respondent party has violated, or
nullified or impaired the benefits arising from, an identified provision of a particular agreement,
arguments are adduced by a complaining party to demonstrate that the responding party's measure
does indeed infringe upon the identified treaty provision. 321 The arguments in support of a claim may
be set out and progressively clarified in the firs t written submission, the rebuttal submission and the
first and second panel meetings with the parties.322
7.210 The Appellate Body has additionally explained that the requirements in Article 6.2 to identify
the specific measures at issue and to provide a brie f summary of the legal basis of the complaint "are
intended to ensure that the complaining party 'present[s] the problem clearly' in its panel request."323
7.211 The "problem" is not solely the obligations in the covered agreements nor the respondent
Member's measures but rather wh ether the respondent Member's measures comport with those
obligations. Therefore, to sufficiently present th e problem clearly, a complaining Member must
"plainly connect the challenged measure(s) with th e provision(s) of the covered agreements claimed
to have been infringed, so that the respondent part y is aware of the basis for the alleged nullification
or impairment of the complaining party's benefits." 324 As the Appellate Body has explained, "[o]nly
by such connection between the measure(s) and the relevant provision(s) can a respondent 'know what
case it has to answer, and ... begin preparing its defence'.325".326
7.212 This understanding is consistent with the essentia l purpose of the panel request to give the
parties and third parties sufficient information concer ning the claims at issue in the dispute to enable
them to respond to the complainant's case327; this speaks to the due process rights of the respondent.328
It is worth recalling that due process protections are "inherent in the WTO dispute settlement

319 Appellate Body Report on US – Oil Country Tubular Goods Sunset Reviews, para. 162.
320 Appellate Body Report on Korea – Dairy, para. 139.
321 Appellate Body Report on Korea – Dairy, para. 139.
322 Appellate Body Report on EC – Bananas III, para. 141.
323 Appellate Body Report on US – Continued Zeroing, para. 160.
324 Appellate Body Report on US – Oil Country Tubular Goods Sunset Reviews, para. 162.
325 (footnote original) Appellate Body Report on Thailand – H-Beams, para. 88.
326 Appellate Body Report on US – Oil Country Tubular Goods Sunset Reviews , para. 162; see also
Appellate Body Report on Brazil – Desiccated Coconut, DSR 1997:I, p.186.
327 Appellate Body Report on Brazil – Desiccated Coconut, DSR 1997:I, p.186.
328 Panel Report on China – Publications and Audiovisual Products, para. 7.28.

system"
329 and are "fundamental to ensuring a fair and orderly conduct of dispute settlement
proceedings".330
7.213 We recall that the complainants discussed the EC obligations concerning its FPDs claims as
follows in their joint Panel request:
"On 2 July 1997, the EC modified Schedule LXXX – European Communities to the
Marrakesh Agreement Establishing the World Trade Organization (the Marrakesh
Agreement). Those concessions include the concession for '[i]nput or output
units...Other' as in HS item 8471 60 90. Th is subcategory carries a zero duty rate.
The Schedule also provides in a headnote that '[w]ith respect to any product described
in or for Attachment B to the Annex to the Ministerial Declaration on Trade in
Information Technology Products, to the exte nt not specifically provided for in this
Schedule, the customs duties on such product, as well as any other duties and charges
of any kind … shall be bound and eliminated , as set forth in paragraph 2(a) of the
Annex to the Declaration, wherever the pr oduct is classified.' Attachment B includes
'[f]lat panel display devices (including LCD, Electro Luminescence, Plasma,
Vacuum-Fluorescence and other technologi es) for products falling within this
agreement and parts thereof.' The bound duty rate for this product, as set forth in HS
items 8471 60 90, 8473 30 10, 8473 30 90, 8531 20 30, 8531 20 51, 8531 20 59,
8531 20 80, 8531 80 30, 8531 90 10, 8531 90 30, 9013 80 11, 9013 80 19,
9013 80 30 and 9013 90 10, and as specified in the headnote, is zero.
As a result of these concessions, the EC and its member States are obliged to grant
duty-free treatment to flat panel displays. Nevertheless, the EC and its member States
impose duties on these products, as explained below."
331
7.214 In addition, as reflected in the summary of th e parties' arguments above, the parties have
discussed the location of the concession arising unde r the narrative product description for "flat panel
display devices".
7.215 The European Communities appears not to ha ve taken issue with the complainants'
identification of "the concession for '[i]nput or ou tput units...Other" as in HS item 8471 60 90'", as
specified in the text in the preceding paragraph.
7.216 However, the European Communities has taken i ssue with the complainants' reference to the
headnote in the EC Schedule and the description for FPDs as it appears both in the Annex to the EC
Schedule and in Attachment B itself.
7.217 In the Panel's view the joint Panel request does sufficiently identify the concessions at issue.
It is clear that the complainants' claim relates to the narrative description for flat panel displays, read
in association with the headnote in the EC's Schedul e. The European Commun ities can have been in
no doubt as to the legal basis of the case against it, and indeed provided substantive arguments in
response. In the Panel's view, and as discussed fu rther below, while the panel request could have
been clearer in terms of where the obligations were "located" (that is, incorporated by reference or set

329 Appellate Body Report on Chile – Price Band System , para. 176. See also Appellate Body Report
on Mexico – Corn Syrup (Article 21.5 – US), para. 107.
330 Appellate Body Report on Thailand – H-Beams, para. 88.
331 Joint Panel Request WT/DS375/8, WT/DS376/8, WT/DS377/6, p. 2.

out independently in the Annex to the EC Schedu le), this has not prejudiced the ability of the
European Communities to defend itself in this case.
7.218 Accordingly, we conclude that the complainants identified the obligations "with the necessary
clarity" in their Panel request for the European Co mmunities to defend itself and for the Panel to rule
on the complainants' claims. We now address the "location" of the narrative product description for
"flat panel display devices" for purposes of addressing the complainants' claims in this case.
Is the commitment arising under the narrative product description for "flat panel display
devices" located in the Annex to the EC Schedule, Attachment B, or both?
7.219 The issue, as reflected in the parties' argumen ts above, is whether the product description for
"flat panel display devices (...)" is that reproduced separately in the Annex to the EC Schedule, that
contained in Attachment B, or whether both texts are relevant.
7.220 The United States argues that that the Panel must look at the descriptions in Attachment B in
light of the EC headnote . Japan and Chinese Taipei submit that the EC concession made pursuant to
Attachment B has been incorporated by reference and is therefore found in the Annex to the EC
Schedule, and not in Attachment B itself.
7.221 The European Communities appears to recognize both possibilities: that the product
descriptions and the headings next to them in th e Annex to the EC Schedule are the concession, or
second, as a "safety net" that the product descriptions in the ITA itself are in corporated into the EC
Schedule.332
7.222 Setting aside the parties' views, we note that the EC headnote found in the Annex to the EC
Schedule refers to "any product described in or fo r Attachment B to the Annex to the Ministerial
Declaration on Trade in Information Technology Products (WT/MIN(96)/16)". In addition, the
Annex to the EC Schedule reproduces, separately, pro duct descriptions that clearly have their origins
in Attachment B of the ITA, though the text of the narrative descriptions for "flat panel display
devices (...)" in the Annex to the EC Schedule is not identical with that appearing in Attachment B.
Looking at Attachment B contained in WT/MIN( 96)/16, as the parties have discussed, the terms
"devices" and "vacuum-fluorescence" appear in the text of the Annex to the EC Schedule, but not in
the ITA text.
7.223 There is some dispute between the parties on the precise status of the Corrigendum document.
The complainants consider that a formal correcti on to the ITA was agreed to and circulated in
document WT/MIN(96)/16/Corr.1 of 13 October 1997. 333 The United States and Chinese Taipei, in
particular, highlight that the document itself is formatted as an official WTO document, has an
assigned document number, and is nowhere identified as a draft. The United States submits
additionally that document G/L/159/Rev.1 discusses changes to the narrative descriptions for flat
panel display devices.
334 Noting the differences in format and numbering of the document in
comparison to other WTO documents, the European Communities rejects the claim that a formal
document with an amendment was circulated and cons iders status of this document to be "unclear
and, therefore, in dispute". 335 Notwithstanding this view, the Eu ropean Communities submits that an

332 European Communities' response to Panel question No. 5.
333 Complainants' responses to Panel questions Nos. 5 and 55.
334 United States' second written submission, para. 66, fn. 129 (Exhibit US-37).
335 European Communities' response to Panel question No. 115. The European Communities
additionally asserts that the language in document G/ L/159/Rev.1, "agreed to amend the description of the

informal agreement to this effect took place duri ng the implementation phase of the ITA pursuant to a
request by Switzerland.
336
7.224 We note that document WT/MIN(96)/16/Corr.1 co ntains a product description for "flat panel
display devices (...)" that corresponds exactly to that reproduced in the EC schedule.
7.225 Whatever the formal status of document WT/MIN(96)/16/Corr.1, or the relevance of
document G/L/159/Rev.1, it is evident to the Panel th at the ITA participants intended to modify the
product descriptions contained in the ITA, and that these modified product descriptions should form
the basis of the ITA participants' co mmitments with regard to that product. Evidence for this is found
in the fact that the European Communities used th is version of the narrative product description in the
Annex to its Schedule. The Panel also notes that , of those ITA participants that have included
narrative descriptions in their schedules, all of them have used the modified language contained in
document WT/MIN(96)/16/Corr.1 for the FPDs commitment. Indeed, we note that it is not disputed
by the parties here that ITA participants agreed to amend some of the product descriptions in
Attachment B, including that for "flat panel display devices (...)" , and that these were reflected in the
amendments to the WTO schedules of its participants.
7.226 In light of our view that ITA participants in tended to and did modify the product description
for "flat panel display devices (...)", we find that there are no discrepancies between the modified
narrative product description for flat panel display de vices contained in Attachment B of the ITA, as
referred to in the EC headnote, and that wh ich is reproduced in the list in the Annex to the EC
Schedule. Accordingly, we will not address further the question of whether the focus should be on the
narrative descriptions in Attachment B of the ITA, or those reproduced separately in the Annex to the
EC Schedule. To the extent that the product d escriptions themselves define the scope of the
obligations (a point that we will return to belo w), the identical language used in these narrative
product descriptions in the ITA on the one hand, and as reproduced in the EC Schedule on the other,
would give rise to obligations of identical scope.
2. The measures at issue and their effects
7.227 The Panel will now consider the measures at issu e specifically identified by the complainants,
as set forth in paragraph 7.128 above, and their e ffect. In addition, we will consider Council
Regulation No. 179/2009 that we determined in paragraph 7.190 above to be an amendment to
Council Regulation No. 493/2005. As we explaine d, we will not consider Council Regulation No.
493/2005 since it has been replaced by Council Regulation No. 179/2009. We recall that the
European Communities has not contested consideration of any of these measures.
(a) Council Regulation No. 2658/87, as amended by Commission Regulation No. 948/2009
7.228 As discussed in paragraphs 7.39-7.45 above , Council Regulation No. 2658/87 establishes the
CN and CCT.
337

products in Attachment B and this amendment is already re flected in the schedules of participants", reveals that
amendments would be done via the WTO Schedules of ITA participants, and not in the ITA, contrary to the
United States' and Chinese Taipei's view (European Co mmunities' comment on the complainants' responses to
Panel question No. 115).
336 See para. 7.203 above.
337 Council Regulation No. 2658/87, Article 1 (Exhibits EC-49; US-13; TPKM-5).

7.229 We recall that we concluded in paragraph 7.146 above that the Council Regulation No.
2658/87, including its Annex I, as it has been most recen tly amended, is the specific measure at issue
in this dispute and was properly identified as such in the joint Panel request.
7.230 The CN1997
338 included the following descriptions for CN subheadings 8471 60 and CN
heading 8528:
Rate of duty
CN code Description autonomous
(%)
conventional
(%)
Supplementary
unit
1 2 3 4 5
8471 Automatic data-processing m achines and units thereof;
magnetic or optical readers, machines for transcribing
data onto data media in coded form and machines for
processing such data, not elsewhere specified or
included:

8471 60 - Input or output units, whether or not containing
storage units in the same housing:
8471 60 10 - - For use in civil aircraft (1): 11 Free p/st
 - - Other:
8471 60 40 - - - Printers 11 2 p/st
8471 60 50 - - - Keyboards 11 2 p/st
8471 60 90 - - - Other 11 1 p/st

CN code Description Rate of duty
 autonomous
(%)
conventional
(%)
Supplementary
unit
1 2 3 4 5
8528 Reception apparatus for television, whether or not
incorporating radio-broadcast receivers or sound or
video recording or reproducing apparatus; video
monitors and video projectors

 - Reception apparatus for television, whether or not
incorporating radio-broadcast receivers or sound or
video recording or reproducing apparatus

8528 12 - - Colour

8528 13 00 - - Black and white or other monochrome 22 6.8 p/st
 - Video monitors
8528 21 - - Colour:
 - - - With cathode-ray tube:
8528 21 14 - - - - With a screen width/he ight ratio less than 1,5 22 14 p/st
 - - - - Other:
8528 21 16 - - - - - With scanning parameters not exceeding 625
lines
22 14 p/st
8528 21 18 - - - - - With scanning parameters exceeding 625 lines 22 14 p/st
8528 21 90 - - - Other 22 14 p/st
8528 22 00 - - Black and white or other monochrome 22 14 p/st

7.231 The CN2007 first introduced the duty-free CN codes 8528 41 00 and 8528 51 00 to replace
duty-free CN code 8471 60 80339, and dutiable CN code 8528 59 90 to replace CN code 8528 21 90.340

338 Exhibit TPKM-22.
339 CN code 8471 60 80 replaced the duty-free heading CN code 8471 60 90 in previous CN versions.
340 CN2007 (Exhibits US-47; JPN-2; TPKM-34).

7.232 The CN2010 maintains the same structure and CCT as the CN2007 version, as follows
341:
CN code Description Conventional
rate of duty (%)
Supplementary
unit
1 2 3 4
8528 Monitors and projectors, not in corporating television reception
apparatus; reception apparatus fo r television, whether or not
incorporating radiobroadcast receivers or sound or video
recording or reproducing apparatus:

 - Cathode-ray tube monitors:
8528 41 00 - - Of a kind solely or principally used in an automatic data-
processing system of heading 8471
Free p/st
8528 49 - - Other:
8528 49 10 - - - Black and white or other monochrome 14 p/st
 - - - Colour:
8528 49 35 - - - - With a screen width/height ratio less than 1,5 14 p/st
 - - - - Other:
8528 49 91 - - - - - With scanning paramete rs not exceeding 625 lines . 14 p/st
8528 49 99 - - - - - With scanning parameters exceeding 625 lines 14 p/st
 - Other monitors:
8528 51 00

- - Of a kind solely or principally used in an automatic data-
processing system of heading 8471 .
Free p/st

8528 59 - - Other:
8528 59 10 - - - Black and white or other monochrome 14 ( 1) p/st
8528 59 90 - - - Colour 14( 2) p/st

(1) Customs duty autonomously suspended, until 31 December 2010, for black-and-white or other monochrome monitors,
using liquid crystal display technology, e quipped with either a digital-visual-i nterface (DVI) or a video-graphics-array
(VGA) connector or both, with a diagonal measurement of the screen not exceedi ng 77,50 cm (i.e. 30,5 inches), with an
aspect ratio of 1:1, 4:3, 5:4 or 16:10, with a pixel resoluti on exceeding 1,92 mega pixels, and with a dot pitch not exceeding
0,3 mm (TARIC code 8528 59 10 10).
(2) Customs duty autonomously suspended, until 31 December 2010, for colour monitors using liquid crystal display
technology, with a diagonal measurement of the screen not exceeding 55,9 cm (i.e. 22 in ches), with an asp ect ratio of 1:1,
4:3, 5:4 or 16:10 (TARIC code 8528 59 90 40).

7.233 Under the CN2010 version, CN code 8528 59 90 is assigned a 14 per cent duty rate, which is
subject to an autonomous duty suspension, until 31 D ecember 2010, "for colour monitors using liquid
crystal display technology, with a diagonal measure ment of the screen not exceeding 55,9 cm (i.e. 22
inches), with an aspect ratio of 1:1, 4:3, 5:4 or 16:10 (TARIC code 8528 59 90 40)".342
(i) Arguments of the parties
7.234 The complainants submit that Council Regulation No. 26 58/87, in particular, its Annex I, as
amended, sets forth the basic EC measure on tariff s, wherein all monitors are classified under CN
heading 8528. The complainants argue that the releva nt CN headings since the entry into force of the
CN2007 are CN code 8528 51 00 applicable to "other monitors" "of a kind solely or principally used
in an automatic data-processing system of head ing 84.71" and those classified under CN heading

341 The terms and applicable duty rates of CN code 8528 41 00 and CN code 8528 51 00 are identical in
the CN2007, the CN2008, the CN2009 and the CN2010.
342 CN2010, p. 574, footnote "(2)". Under the CN2008, CN code 8528 59 90 is assigned a 14 per cent
duty rate subject to an autonomous duty suspension , until 31 December, "for monitors with a diagonal
measurement of the screen of 48,5 cm or less and with an aspect ratio of 4:3 or 5:4 (TARIC code
8528 59 90 30)" (CN2008, p. 575, footnote "(1)"). Under the CN 2009, CN code 8528 59 90 is also assigned a
14 per cent duty rate, although no duty suspension is specified. (CN2009, p. 574).

8528.59 applicable to "other".
343 They argue that products classified under these headings were
previously classified as under CN heading 8471 (i n either CN code 8471 60 90 or 8471 60 80), prior
to the CN2007. Japan additionally argues that CN codes 8528 59 10, 8528 72 20 to 8528 72 99, and
8528 73 00 are also relevant.344
7.235 The European Communities argues that CN codes 8528 51 00 and 8528 41 00 in the current
CN are the relevant provisions implementing obliga tions pursuant to the ITA, both of which extend
duty-free treatment to monitors "of a kind solely or principally used in an automatic data-processing
system of 8471".345 The European Communities said that it is not entirely clear what the basis is for
considering that the European Communities would be in breach of its obligations under the claim
based on HS1996 subheading 8471 60 (CN code 8471 60 90) because the combined scope of CN
codes 8528 51 00 and 8528 41 00 under the HS2007 is at least as wide as CN code 8471 60 90 in the
EC Schedule, despite differences in the wording of the headings. 346 Thus, presumably, the European
Communities contends that any a lleged violation could only arise from the alleged interpretative
effect of certain criteria in CNEN 2008/C 133/ 01 when applied in connection with the CN. 347 The
European Communities contends that it is not clear how the CN is considered to breach Article II of
the GATT 1994 in relation to the complainants' clai m pursuant to the narrative description for FPDs.
In its view, it is not clear how to determine wh ere certain products, such as televisions or video
monitors, should be classified.348
(ii) Consideration by the Panel
7.236 The parties do not appear to dispute the content of Council Regulation No. 2658/87.
7.237 The complainants have identified duty-fr ee CN codes 8528 41 00 and 8528 51 00, and
dutiable CN code 8528 59 90 as those relevant to its claims. The current CN2010 includes reference
to an autonomous duty suspension, until 31 December 2010, "for colour monitors using liquid crystal
display technology, with a diagonal measurement of the screen not exceeding 55,9 cm (i.e. 22 inches),
with an aspect ratio of 1:1, 4:3, 5:4 or 16:10 (TARIC code 8528 59 90 40)".
7.238 The European Communities has not contested that CN codes 8528 41 00 and 8528 51 00
replace duty-free CN code 8471 60 90. Moreover, the European Communities has not asserted any
other relevant headings.
7.239 The Panel therefore understands that the European Communities now classifies products that
were previously classified in CN code 8471 60 90 under CN codes 8528 41 00 and 8528 51 00.
7.240 Based on the terms of the descriptions for these CN codes, it appears evident that under the
CN 'monitors of a kind solely or principally used in an automatic data-processing system of heading
8471' are classifiable under duty free CN codes 8528 41 00 and 8528 51 00. These include CRT-
based monitors (under CN code 8528 41 00) and "[o]ther" types of monitors (under CN code
8528 51 00).

343 Complainants' response to Panel question No. 66.
344 Japan's response to Panel question No. 66.
345 European Communities' second written submission, paras. 44-45.
346 European Communities' second written submission, para. 46.
347 European Communities' second written submission, para. 46; European Communities' second oral
statement, paras. 25-26.
348 European Communities' second written submission, para. 47.

7.241 Non-CRT, "monitors" that are black and white or other monochrome are classifiable under
the dutiable CN code 8528 59 10, and subject to a 14 per cent ad valorem duty, and colour "monitors"
are classifiable under CN code 8528 59 90, and subject to a 14 per cent ad valorem duty In
accordance with an autonomous dut y suspension identified in the CN2010, black and white or other
monochrome LCD monitors "equipped with either a digital-visual-interface (DVI) or a video-
graphics-array (VGA) connector or both, with a diagonal measurement of the screen not exceeding
77,50 cm (i.e. 30,5 inches), with an aspect ratio of 1:1, 4:3, 5:4 or 16:10, with a pixel resolution
exceeding 1,92 mega pixels, and with a dot pitch not exceeding 0,3 mm" are exempt from duties.
Colour LCD monitors "with a diagonal measurement of the screen not exceeding 55,9 cm (i.e. 22
inches), with an aspect ratio of 1:1, 4:3, 5:4 or 16:10" are similarly exempt from duties.
(b) CNEN 2008/C 133/01
7.242 On 30 May 2008, the European Communities publis hed a new consolidated version of the
CNENs in the EU Official Journal, i.e., CNEN 2008/C 133/01.
349
7.243 CNEN 2008/C 133/01 includes, inter alia, the following CN breakouts of HS heading 8528:
"8528 41 00 Of a kind solely or principa lly used in an automatic data-processing
system of heading 8471
Monitors of this subheading work with the cathode ray tube (CRT) display
technology.
The characteristics of monitors of this subheading generally facilitate
prolonged periods of viewing at close proximity.
Monitors of this subheading have the following characteristics:
1. they are capable of accepting a signal only from the central
processing unit of an automatic data-processing machine of heading
8471:
2. they have generally an aspect ratio of 4:3 or 5:4;
3. they frequently incorporate tilt and swivel adjusting mechanisms
and glare-free surfaces;
4. they may incorporate up to two loudspeakers.
Monitors of the CRT type have the following specific characteristics:
1. they are fitted with particular connectors such as SUB-D
connectors;
2. their dot screen pitch starts at 0,41 mm for medium resolution and
gets smaller as the resolution increases.
Monitors of this subheading cannot:
- be connected to a video source such as a DVD recorder or
reproducer, a camera or a video camera recorder, a satellite receiver
or a video game machine;

349 Foreword of CNEN 2008/C 133/01. The foreword clarifies that "[t]his version of the CNENs
includes and, where appropriate, repl aces those published in the Official Journal of the European Union, C
series, up to 11 April 2008. CNENs published in the Official Journal, C series, subsequent to that date remain in
force and will be incorporated in the CNENs when revised".

- incorporate components (for example, a chroma decoder, a Y/C
separator) which enable the monitor to display an image from a
composite video baseband signal (CVBS) or composite video
signal (whose waveform conforms to a television broadcast
standard such as NTSC, SECAM, PAL, D-MAC) or S-Video signal
or when they are capable of re producing an image by accepting
signals such as component vi deo (for example, YUV, YC BCR,
YPBPR), Serial Digital Interface (S DI), High-Definition-SDI (HD-
SDI) and digital video 'DV' (for example, MPEG1, MPEG2,
MPEG4);
- be equipped with an infrared receiver for the reception of signals
from an infrared remote control;
- have a programme channel up/down button;
- be fitted with interfaces such as DVI-D, DVI-I and High-Definition
Multi-media Interface (HDMI) even if these interfaces do not
support high-bandwidth digital content protection (HDCP)
encryption;
- be fitted with interfaces for 'slo t-in' modules or for other devices
which enable a connection to a vi deo source or the reception of
television signals;
- be used in systems other than automatic data-processing systems
(for example, home cinema systems, video editing systems,
systems for medical imaging or systems of the printing or graphics
industry for pre-press colour proofs).
This subheading does not include indicator panels of heading 8531.
8528 49 10 Black and white or other monochrome
The Explanatory Notes to subheadings 8528 49 35 to 8528 49 99 apply,
mutatis mutandis.
 8528 49 35 to Colour
8528 49 99
Monitors fall within these subheadings unless it can be demonstrated that
they are of a kind solely or principally used in an automatic data-processing
system.
The characteristics of monitors of th ese subheadings generally facilitate
prolonged periods of viewing at a distance, for example, at exhibitions and
in home cinema systems, television studios and video surveillance systems.
Some monitors facilitate viewing at close proximity, for example, for
measuring, checking or medical applications, rear view camera surveillance
for vehicles or radio navigational aid apparatus.
Certain monitors are fitted with connectors or interfaces such as
Cinch/RCA, BNC, SCART, Mini DIN 4-pin/Hosiden, DVI-D, DVI-I and
High-Definition Multi-media Interface (HDMI). These connectors or
interfaces allow for the reception of a signal from a video source such as a
DVD recorder or reproducer, a camer a or a video camera recorder, a
satellite receiver or a video game machine. These monitors may also be
fitted with interfaces for automatic da ta-processing machines of heading
8471.

Some monitors may have interfaces that allow for the reception of signals
from sources such as a cash register, an automatic teller machine (ATM), a
radio navigational aid apparatus, a numerical control panel or a
programmable memory controller, apparatus for measuring, checking or
medical applications of Chapter 90.
They may have separate inputs for red (R), green (G) and blue (B) signals,
or they may incorporate components (for example, a chroma decoder, a Y/C
separator) which enable the monitor to display an image from a composite
video baseband signal (CVBS) or composite video signal (whose waveform
conforms to a broadcast standard su ch as NTSC, SECAM, PAL, D-MAC)
or S-Video signal or when they ar e capable of reproducing an image by
accepting signals such as component video (for example, YUV, YC
BCR,
YPBPR), Serial Digital Interface (SDI ), High-Definition-SDI (HD-SDI) and
digital video 'DV' (for example, MPEG1, MPEG2, MPEG4).
They may be fitted with connectors for the reception of audio signals.
These subheadings do not include:
(a) videophones (subheading 8517 69 10);
(b) indicator panels of heading 8531.
8528 51 00 Other monitors
to 8528 59 90
Monitors of these subheadings work on display technologies such as liquid
crystal display (LCD), organic light emitting diode (OLED) or plasma.
These subheadings include monitors co mprising a projector and a screen in
the same housing.
8528 51 00 Of a kind solely or principa lly used in an automatic data-processing
system of heading 8471
The Explanatory Notes to subheading 8528 41 00 apply, mutatis mutandis.
Monitors falling within this subheading generally have a diagonal
measurement of the screen of 48.5 cm (19 inches) or less.
8528 59 10 Other
and 8528 59 90
The Explanatory Notes to subheadings 8528 49 35 to 8528 49 99 apply,
mutatis mutandis.
For the monitors of these subheadings the aspect ratio is often 16:9 or
16:10."
(i) Arguments of the parties
7.244 The complainants argue that CNEN 2008/C 133/01 limits duty-free coverage under CN code
8528 51 00 to "monitors" that "are capable of accepting a signal only from the central processing unit
of an automatic data-processing machine of heading 84.71", those that "cannot ... be connected to a

video source such as a DVD recorder or reproducer, camera or a video camera recorder, a satellite
receiver or a video game machine", and thus can only accept a signal from a CPU of an automatic
data-processing machine; and otherwise, those that ar e not fitted with interfaces such as DVI. Subject
to the condition in the note to CN code 8528 51 00 that "[m]onitors within this subheading generally
have a diagonal measurement of the screen of 48,5 cm (19 inches) or less", the complainants submit
that monitors that are princi pally for use with automatic da ta-processing systems or other ITA
products are excluded from duty-free tr eatment under CN code 8528 51 00.
350 The United States and
Chinese Taipei contend that these criteria apply under CN code 8528 51 00 on the basis of the
"mutatis mutandis " language in the explanatory notes that refers to CN code 8528 41 00. 351 The
United States, in addition, observes that the language in the note to CN code 8528 59 90 in
CNEN 2008/C 133/01 states that monitors classifiable under the CN code 8528 59 90 " may also be
fitted with interfaces for automatic da ta-processing machines of heading 8471."
352 In its view, a DVI
connector is such an interface. Thus, the United Stat es argues, even if a monitor is "for" an automatic
data-processing machine, it is classified under 8528 59 90 and subject to a 14 per cent duty.353
7.245 The European Communities ' arguments concerning whether the CNENs are "not legally
binding" or otherwise "inapplicable" to the extent they conflict with the CN, are set forth in
paragraphs 7.147-7.148 above . In addition, the European Comm unities argues that the complainants
have limited their challenge to the mutatis mutandis language in the CNEN to CN code 8528 51 00.
While it argues that the CNEN to CN code 8528 41 00 provide for a list of relevant classification
criteria, the CNEN to CN code 8528 41 00 are not in themselves challenged under either of the
claims. 354 Due to the language in the CNEN to CN code 8528 41 00 "monitors of this subheading
work with the cathode ray tube (CRT) display tec hnology", the European Communities argues that, in
order to apply the CNEN to other technologies mutatis mutandis , it is necessary to distinguish
between the technical criteria that are relevant only in relation to CRT technology. Thus, it argues, the
words mutatis mutandis do not incorporate all of the CNEN to CN code 8528 41 00 into the CNEN to
CN code 8528 51 00. 355 For instance, it notes the language "[m]onitors of the CRT type have the
following specific characteristics ...". In addition, the European Communities argues that the language
of the CNEN does not preclude the exercise of discr etion in the classification of monitors based on
objective characteristics. 356 To the extent the criteria were ev en applied rigidly, the European
Communities asserts that the criteria are no longer app licable under EC law in light of the European

350 United States' first written submission, para. 124; Japan's first written submission, paras. 226 and
250; Chinese Taipei's first written submission, paras. 84 and 180. The United States refers to several BTIs
issued by EC member States in suppor t of its arguments that monitors have been classified (or reclassified) as
under a dutiable heading due to the presence of DVI. It refers in particular, to a BTI issued by one EC member
State stating that duty-free computer monitors "must be capable of receivi ng a signal from a computer and no
other source", and that a "LCD monitor with DVI inputs and a diagonal measurement of the screen of [19
inches] or less and with an aspect ratio of 4:3 or 5:4" "with video or DVI inputs" is classified in CN code
8528 59 90 and subject to duties (United States' first written submission, para. 127 (Exhibit US-50)).
351 United States' second oral statement, para. 30; Chinese Taipei's second oral statement, para. 31. The
United States argues that the BTI demonstrate that EU member States have applied the DVI and connectability
criteria in the CNEN in classifying goods under CN code 8528 59 90 on the basis of the " mutatis mutandis"
language appearing in that code. (United States' second oral statement, para. 31).
352 United States' first written submission, para. 126 (emphasis added).
353 United States' first written submission, para. 126 (emphasis added).
354 European Communities' second written submission, para. 50.
355 European Communities' second written submission, para. 51.
356 European Communities first written submission, paras. 66-69; European Communities' second
written submission, para. 55.

Court of Justice's Kamino judgment.
357 Finally the European Communities argues it is in the process
of repealing or amending CNEN 2008/C 133/01 in light of the judgment.
(ii) Consideration by the Panel
7.246 The Panel recalls its finding in paragraph 7.160 above that CNENs identified by the
complainants in this dispute are measures that may be challenged "as such".
7.247 The complainants have identified language in the CNEN to CN code 8528 51 00 in CNEN
2008/C 133/01 pertaining to monitors "[o]f a kind sole ly or principally used in an automatic data-
processing system of heading 8471". They note th e language that "monitors falling within this
subheading generally have a diagona l measurement of the screen of 48.5 cm (19 inches) or less" as
well as language appearing in the CNEN to CN code 8528 51 00 stating that "[t]he Explanatory Notes
to subheading 8528 41 00 apply, mutatis mutandis". Within the heading to CN code 8528 41 00, the
complainants note the conditions that "[m]onitors of this subheading cannot: - be connected to a video
source such as a DVD recorder or reproducer, a camera or a video camera recorder, a satellite receiver
or a video game machine ... – be fitted with interfaces such as DVI-D, DVI-I and High Definition
Multi-media Interface (HDMI) even if these interfa ces do not support high-bandwidth digital content
protection (HDCP) encryption".
7.248 In addition, the Panel notes that language in the CNEN to CN codes 8528 59 10 to 8528 59 90
states that "[t]he Explanatory Notes to subheadings 8528 49 35 to 8528 49 99 apply, mutatis
mutandis". This Note states that "[m]onitors fa ll within these subheadings unless it can be
demonstrated that they are of a kind solely or principally used in an automatic data-processing
system".
7.249 In respect of CN codes 8528 51 00 and 8528 59 10 to 8528 59 90, the text of CNEN
2008/C 133/01 states that the Explanatory Notes to other subheadings apply, " mutatis mutandis". The
dictionary definition of the Latin term " mutatis mutandis" is literally "things being changed that have
to be changed", or otherwise "making the neces sary changes; with due alteration of details". 358 In the
context of its use in the identified section of CN EN 2008/C 133/01, we understand this reference to
indicate that the entirety of the CNEN of the refere nced CN code should apply to the extent possible,
except for necessary changes, wherein due alteration of appropriate details would be made.
7.250 We understand this to mean that the complete CNEN to CN code 8528 41 00 would apply to
the CNEN to CN code 8528 51 00, except for elemen ts or criteria that would no longer make sense in
the context of CN code 8528 51 00. This would exclude, for instance, the reference under CN code
8528 41 00 to "cathode ray tube (CRT) display te chnology". Thus, reference to CRT technology
would be substituted with display technology refe rred to in the context of CN code 8528 51 00,
including for instance, "liquid crystal display (LCD), organic light emitting diode (OLED) or plasma".
Otherwise, the essence of the CN EN to CN code 8528 41 00 would apply. The same approach
applies under CN code 8528 59 10. Accordingly, the Panel will proceed on this basis, making changes
only where necessary.
7.251 We begin with reference to duty-free CN code 8528 51 00 "Of a kind solely or principally
used in an automatic data-processing system of h eading 8471" that falls under the subheading for
"Other monitors". This heading is described as applying to monitors that "work on display

357 European Communities' second written submission, paras. 56-61 (referring to European Court of
358 The Shorter Oxford Dictionary (2003), p. 1870.

technologies such as liquid crystal display (LCD), organic light emitting diode (OLED) or plasma".
The CNEN to CN code 8528 51 00 applies the CNEN to CN code 8528 41 00, mutatis mutandis, and
further indicates that monitors fa lling within the heading "generally have a diagonal measurement of
the screen of 48.5 cm (19 inches) or less". In addition to the guidan ce provided for diagonal
measurement, monitors of this heading thereby ha ve the "capab[ility] of accepting a signal only from
the central processing unit of an automatic data -processing machine of heading 8471", among other
characteristics. Further, these monitors "cannot ... be connected to a video source such as a DVD
recorder or reproducer, a camera or a video came ra recorder, a satellite receiver or a video game
machine", "cannot ... be fitted with interfaces such as DVI-D, DVI-I and High-Definition Multi-media
Interface (HDMI) ...", and "cannot ... be used in systems other than automatic data-processing systems
...".
359
7.252 The Panel considers that, under the CN, read in conjunction with the CNEN, a display based
on LCD, OLED or plasma technology that is cl assified under CN code 8528 51 00, like those
classifiable in 8528 41 00, cannot be capable of connecting to other sources. Thus, these monitors
may accept a signal only from an automatic data-processing machin e. In addition, a monitor that is
classified under CN code 8528 51 00 cannot be fitted with DVI-D or DVI-I interfaces and other like
interfaces, including HDMI, and potentially other conn ectors that serve similar purposes (as the notes
state that covered monitors "cannot ... be fitted with interfaces such as DVI-D, DVI-I ...").
7.253 In our view, due to the definitive and absolute nature of the cited language, the particular
CNEN may be said to operate on a " per se" basis. In other words, these aspects of the CNEN provide
no room for discretion for customs authorities. The mere presence, for example, of a DVI, or the
capability to accept signals from a source other than an automatic data-processing machine results in a
subject monitor being excluded from CN code 8528 51 00 (due to the operation of the mutatis
mutandis condition in the CNEN to that provision).
7.254 We note that this restrictive language contrast s with less restrictive language used in other
aspects of the CNENs. For instance, the CNEN to CN code 8528 41 00 (which is applicable to
products classified under CN code 8528 51 00, via the mutatis mutandis condition appearing in the
CNEN to CN code 8528 51 00) states that "the ch aracteristics of monitors of this subheading
generally facilitate prolonged periods of viewi ng at close proximity"; "they have generally an aspect
ratio of 4:3 or 5:4"; "they frequently incorporate tilt and swivel adjusting mechanisms and glare-free
surfaces"; and "they may incorporate up to two loudspeakers". No thing in the text of the CNEN, for
example, automatically precludes classification simply because a monitor does not facilitate
prolonged viewing at close proximity, or have an aspect ratio of 4:3 or 5:4.
7.255 CN codes 8528 59 10 and 8528 59 90 apply to "o ther" monitors than those classifiable under
CN code 8528 51 00 that "work on display technologi es such as liquid crystal display (LCD), organic
light emitting diode (OLED) or plasma". The CNEN to CN code 8528 59 10 and 8528 59 90 applies
the CNEN to CN codes 8528 49 35 to 8528 49 99, mutatis mutandis , which apply exclusively to
"[c]olour" monitors.
360 The CNEN to these headings indicates that monitors fall under these headings
"unless it can be demonstrated that they are of a kind so lely or principally used in an automatic data-
processing system". Moreover, it is indicated that certain monitors classifiable under this CN code
are fitted with interfaces, including inter alia DVI-D, DVI-I and HDMI, that "allow for the reception

359 CNEN 2008/C 133/01 (Exhibits US-49; JPN-18; TPKM-23).
360 The same Explanatory Notes apply mutatis mutandis to CRT-monitors of CN code 8528 49 10, i.e.
black and white or monochrome CRT-based monitors that are not of a kind solely or principally used in an
ADP-system of heading 8471.

of a signal from a video source such as a DVD recorder or reproducer, a camera or a video camera
recorder, a satellite receiver or a video game machine".
7.256 Therefore, the Panel concludes that the CNEN to CN code 8528 51 00 requires that monitors
be excluded from that subheading if they are cap able of receiving signals from sources other than
automatic data-processing machines, as well as mon itors that are fitted with DVI, HDMI or other
interfaces capable of similar function.
7.257 The European Communities has confirmed that CN code 8528 51 00 is the only possible
duty-free CN code available for non-CRT-based colour, flat panel monitors.
361
7.258 Therefore, we conclude that monitors that matc h one or both criteria, i.e., that are capable of
receiving signals from sources other than an automa tic data-processing machine, or are fitted with
DVI, HDMI or similar connectors may not be classified under the duty-free subheading 8528 51.
These criteria work as mandatory, "per se", or "autom atic" rules. Subject monitors therefore would
have to be classified under CN code 8528 59 10 or 8528 59 90, which carries a 14 per cent duty.
(c) Commission Regulation Nos. 634/2005 and 2171/2005
7.259 Commission Regulation No. 634/2005, which was adopted on 26 April 2005 and published in
the EU Official Journal on 27 April 2005, concer ns the classification of certain "colour monitor[s]"
using LCD technology.
7.260 Item 4 of the Annex to this Regulation con cerns the classification under CN code 8528 21 90
of the following product:
"A colour monitor of the liquid crystal device (LCD) type with a diagonal
measurement of the screen of 38,1 cm (15" ) and overall dimensions of 30,5 (W) ×
22,9 (H) × 8,9 (D) cm with: - maximum resolution of 1 024 × 768 pixels [and] scan
frequencies of 30-80 kHz (horizontal) and 56-75 Hz (vertical). The product has the
following interfaces: - VGA in[;] - DVI in[;] - BNC in and out[;] - S-video (Y/C) in
and out[;] - Audio in and out. The prod uct can display signals received from various
sources, such as an automatic data-processi ng machine, a closed circuit television
system, a DVD player or a camcorder."
7.261 Item 4 of the Annex indicates that "[c]lassifi cation under subheading 8471 60 is excluded, as
the monitor is not of a kind solely or principall y used in an automatic data-processing system (see
Note 5 to Chapter 84), in view of its capabilities to display signals from various sources."
7.262 Commission Regulation No. 2171/2005, which was adopted on 23 December 2005 and
published in the Official Journal of the Europ ean Communities on 29 December 2005, concerns the
classification of certain "colour monitor[s]" using LCD technology.
7.263 Item 1 of the Annex to this Regulation concerns the classification under CN code
8471 60 80
362 of the following product:

362 We recall from para. 7.231 abov e that CN code 8471 60 80 replaced the duty-free heading CN code
8471 60 90 in the CN2006. CN codes 8528 41 00 and 8528 51 00, which replaced CN code 8471 60 80, were
introduced in the CN2007.

"A colour monitor of the liquid crystal device (LCD) type with a diagonal
measurement of the screen of 38,1 cm (15 ″) and overall dimensions of 34,5 (W) ×
35,3 (H) × 16,5 (D) cm (aspect ratio 5:4) with: - a maximum resolution of 1 024 ×
768 pixels at 75 Hz, - a pixel size of 0,279 mm. The product has a mini D-sub 15 pin
interface only. It is designed for working only in conjunction with a product
classifiable under heading 8471".
7.264 Item 1 of the Annex indicates that "[t]he in tended use of the monitor is that of accepting
signals from the central processing unit of an au tomatic data-processing system". The following
further explanation is provided:
"The product is also capable of re producing both video and sound signals.
Nevertheless, in view of its size and its limited capability of receiving signals from a
source other than an automatic data-pro cessing machine via a card without video
processing features, it is considered to be of a kind solely or principally used in an
automatic data-processing system".
7.265 Item 2 of the Annex to this Regulation con cerns the classification under CN code 8528 21 90
of the following product:
"A colour monitor of the liquid crystal device (LCD) type with a diagonal
measurement of the screen of 50,8 cm (20 ″) with overall dimensions of 47,1 (W) ×
40,4 (H) × 17,4 (D) cm (aspect ratio 16:10) with: - a screen pixel density of 100 dpi, -
a pixel size of 0,25 mm, - a maximum resolution of 1 680 × 1 050 pixels, - a fixed
band width of 120 MHz. The product is d esigned for use in the development of
sophisticated graphics (CAD/CAM systems) and video film editing and production.
The product is equipped with a DVI interface enabling the product to display signals
received from an automatic data-processing machine via a graphic card capable of
processing video signals (for example for purposes of video film editing and
production). The product also displays text s, spread sheets, presentations and the
like."
7.266 Item 2 of the Annex indicates that "[c]lassi fication under subheading 8471 60 is excluded as
the monitor is not of a kind solely or principally used in an automatic data-processing system (see
Note 5 (B) to Chapter 84)."
7.267 Item 3 of the Annex to this Commissi on Regulation No. 2171/2005 concerns the
classification under CN code 8528 21 90 of the following product:
"A colour monitor of the liquid crystal device (LCD) type with a diagonal
measurement of the screen of 54 cm (21 ″) and overall dimensions of 46,7 (W) × 39,1
(H) × 20 (D) cm (aspect ratio 4:3) with: - a maximum resolution of 1 600 × 1 200
pixels at 60 Hz, - a pixel size of 0,27 mm. The product has the following interfaces:
- mini D-sub 15 pin, - DVI-D, - DVI-I, - audio in and out. The product can display
signals received from various sources such as a closed circuit television system, a
DVD player, a camcorder or an automatic data-processing machine."
7.268 Item 3 of the Annex indicates that "[c]lassi fication under subheading 8471 60 is excluded as
the monitor is not of a kind solely or principall y used in an automatic data-processing system (see
Note 5 to Chapter 84), but is capable of displaying signals from various sources."

7.269 Item 4 of the Annex to Commission Regula tion No. 2171/2005 concerns the classification
under CN code 8528 21 90 of the following product:
"A colour monitor of the liquid crystal device (LCD) type with a diagonal
measurement of the screen of 76 cm (30″) and overall dimensions of 71 (W) × 45 (H)
× 11 (D) cm (aspect ratio 15:9) with: - a maximum resolution of 1 024 × 768 pixels, -
a pixel size of 0,50 mm. The product has the following interfaces: - 15-pin mini DIN,
- BNC, - 4-pin mini DIN, - RS 232 C, - DV I-D, - Stereo and PC audio. The product
can display signals received from various sources such as a closed circuit television
system, a DVD player, a camcorder or an automatic data-processing machine."
7.270 Item 4 of the Annex indicates that "[c]lassi fication under subheading 8471 60 is excluded as
the monitor is not of a kind solely or principall y used in an automatic data-processing system (see
Note 5 to Chapter 84), but is capable of displaying signals from various sources."
(i) Arguments of the parties
7.271 The complainants argue that the cited items in Commission Regulation Nos. 634/2005 and
2171/2005 determine tariff treatment based on a m onitor's "capabilities to display signals from
various sources", whether the monitor "is not of a kind solely or principally used in an automatic data-
processing system", or whether the monitor "is capab le of displaying signals from various sources".
In other words, classification is determined based on whether or not a monitor is exclusively for use
with an automatic data-processing system.
363 T h e United States argues that, the fact that the
European Communities concluded that the display devices in item 4 in the Annex to Commission
Regulation No. 634/2005 and items 3 and 4 of Commission Regulation No. 2171/2005 were classified
in a dutiable heading, fails to support the conclu sion that the presence of a DVI connector is not
dispositive. The United States claims that the Eu ropean Communities has con ceded, with respect to
item 2 of Council Regulation No. 2 171/2005, that the presence of a DVI connector is dispositive of
classification.364 The complainants additionally rej ect that item 1 of Commission Regulation
No. 2171/2005 provides a basis to argue that disp lays capable of connecting to multiple sources may
be extended duty-free treatment. In this respect, the complainants argue that the device is not
equipped with a DVI interface or any other connector that would permit the device to be used with
sources other than an automatic data-processing machine.
365 Finally, the United States submits BTIs
of EC customs authorities classifying such devices in a dutiable heading 366, and argues that the
European Communities has cited no evidence from d ecisions of customs authorities to demonstrate
that a device with DVI or a device capable of recei ving signals from a source other than an automatic
data-processing machine could be classified in a duty-free heading.367
7.272 As addressed in paragraphs 7.161-7.167 above, the European Communities argues that
Commission Regulation Nos. 634/2005 and 2171/2005 "hav e effectively lost their relevance" and that
it is in the process of repealing or replacing them. 368 Apart from this, the European Communities

363 United States' first written submission, paras. 125-126; United States' second written submission,
para. 69; Japan's first written submission, para. 245; Chinese Taipei's first written submission, paras. 69 and 77.
364 United States' second written submission, para. 70.
365 United States' second written submission, para. 71; complainants' response to Panel question
No 145.
366 Exhibit US-50.
367 United States' second written submission, para. 71 (referring to BTIs IE 06NT-14-501-01, IE06NT-
14-501-02 and IE06NT-14-501-03 (Exhibit US-50)).
368 European Communities' first written submission, para. 95; European Communities' second written
submission, para. 63.

specifically argues that item 1 in the annex to Commission Regulation No. 2171/2005 demonstrates
that a monitor which is capable of reproducing bot h video and sound signals, was classified under
duty-free CN code 8471 60 80.
369 Thus, it argues, it is not correct that the European Communities
would in all cases "limit the scope of the FPDs covered by the concession to those that can only be
used with an ADP machine". 370 In addition, the European Communities argues that these
Commission Regulations demonstrate that the existence of a DVI has not been necessarily dispositive.
In particular, the European Communities argues that DVI is merely listed among many other technical
characteristics in item 4 in the Annex to Commi ssion Regulation No. 634/2005, and items 3 and 4 in
the Annex to Commission Regulation No. 2171/2005. In its view, only item 2 in the annex to
Commission Regulation No. 2171/2005 could be argu ed as demonstrating that the presence of a DVI
connector was decisive for classification.371
(ii) Consideration by the Panel
7.273 The Panel recalls from paragraphs 7. 166-7.167 above that it is a ppropriate to proceed to
make findings and recommendations with respect to the WTO consistency of Commission Regulation
Nos. 634/2005 and 2171/2005.
7.274 We now consider the effect of the relevant items of the two Commission Regulations.
7.275 We note that Commission Regulation Nos. 634/2005 and 2171/2005 provide for classification
of certain LCD monitors within CN codes 8471 60 80 and 8528 21 90 as these codes existed under the
HS2002.372 As the European Communities has explained, these were replaced by CN codes
8528 41 00 and 8528 59 90, respectively, in the CN2007, following implementation of the HS2007. 373
In the context of this dispute, Japan and Chinese Taipei have argued that national customs authorities
within the European Communities can still determ ine the appropriate customs classification by
relying on a "conversion table" that relates back to pre-existing CN headings. Thereby, for example,
they argue that customs officials may conclude that an apparatus previously classified under a
superseded CN code would now fall under the updated CN code. 374 In addition, the United States
submitted a BTI on record, claiming that French customs authorities relied on a classification
regulation based on a repealed CN code to justify classifying a product under the relevant updated CN
code.375 In response, the European Communities ar gues that the conversion table "has not been
adopted by the Commission", and "reflects excl usively the views of the Commission services
responsible for customs matters". 376 In addition, it argues that, in the BTI referred to by the United
States, the discussed classification regulation w as referred to "merely as additional authority
supporting interpretation of Council Regulation 2658/87".377

369 European Communities' first written submission, para. 67.
370 European Communities' first written submission, para. 68; European Communities' second oral
statement para. 36.
371 European Communities' response to Panel question No. 23.
372 Articles 1 of Commission Regulation Nos. 634/2005 and 2171/2005.
373 See European Communities' first written submission, para. 95.
374 Japan's and Chinese Taipei's responses to Panel question, No. 24; Chinese Taipei's second written
submission, paras. 52 and 53.
375 The United States, e.g., refers to BTI FR-E4-2007-002262-R (31 January 2007) (Exhibit US-62),
issued by France on 13 January 2007, in which French customs officials classified a multifunctional digital
machine in CN code 8443 31 99 while referring to Commission Regulation No. 517/1999, which itself
referenced CN code 9009 12 00. (United States' response to Panel question, No. 18, fn. 43).
376 European Communities' second written submission, para. 156.
377 European Communities' second written submission, para. 158.

7.276 We note the European Communities' view that CN codes 8471 60 80 and 8528 21 90 no
longer appear within the CN. However, apart from a change in CN codes, there is no evidence before
us to suggest that the classification guidance contai ned in the Classification Regulations has changed.
Moreover, there is some evidence that at least in some instances national authorities continue to
support their classification decisions with refe rence to classification measures using older CN
codes.
378 On this basis, the Panel will continue its assessment of the effect of these classification
regulations.
7.277 The products in item 4 of Commission Regul ation No. 634/2005, and items 3 and 4 of
Commission Regulation No. 2171/2005 describe LCD colour displays with diagonal screen
measurements of 15, 21 and 30 inches. All three items refer to displays that are fitted with a DVI
interface.379 In addition, all three items described displa ys that are capable of displaying signals
received from "various sources" in addition to an automatic data-processing machine. Notably, the
product in item 4 of Commission Regulation No . 634/2005 is excluded from classification under
subheading 8471 60 because "the monitor is not of a ki nd solely or principally used in an automatic
data-processing system (see Note 5 to Chapter 84), i n view of its capabilities to display signals from
various sources" (emphasis added). Each of the products described in items 3 and 4 of Commission
Regulation No. 2171/2005 is excluded from cla ssification under subheading 8471 60 because "the
monitor is not of a kind solely or principally used in an automatic data-processing system (see Note 5
to Chapter 84), but is capable of displaying signals from various sources" (emphasis added).
7.278 In light of the juxtaposition of the language "solely or principally used in an automatic data-
processing system" with the capability to display si gnals from "various sources", we understand that
the mere capability to display signals from other sources, and, ergo, connect to those other sources, is
enough to exclude the particular display from duty-fr ee treatment. The language "but is" that is used
in items 3 and 4 of Commission Regulation No. 2171/ 2005 strongly suggests that monitors simply
capable of displaying signals from various sources are not considered to be "sol ely or principally" for
use in an ADP. The language in item 4 of Co mmission Regulation No. 634/2005, "in view of its
capabilities", while not quite as definitive, suggests a similar approach.
7.279 We note that the product in item 2 of Commission Regulation No. 2171/2005 – a LCD colour
monitor with a 20 inch diagonal screen measurement – is also fitted with a DVI interface. However
the reason given for excluding the product is dis tinct from the reason provided for excluding the
above products. In this case, the product is excluded from classification under subheading 8471 60
because "the monitor is not of a kind solely or principally used in an automatic data-processing
system". Absent is any reference to the capability to display signals from "various" sources other than
an automatic data-processing machine. 380 We consider, however, that this does not support the
European Communities' view that displays with DVI , capable of connecting to sources other than an
automatic data-processing machine, may be granted duty-free treatment.
7.280 Finally, we note that the product describe d in item 1 of Commission Regulation No.
2171/2005 – an LCD monitor with a 15 inch diagonal screen measurement, having "a mini D-sub 15

378 See, for example, fn. 375 above.
379 Item 4 of Commission Regulation No. 634/2005, refers to "DVI in"; item 3 of Commission
Regulation No. 2171/2005 refers to both "DVI-D" and "DVI-I" (US-46; JPN-16; TPKM-19); and its item 4
refers to "DVI-D" (Exhibits US-15; JPN-17; TPKM-20) .
380 We note, item 2 of Commission Regulation No. 2171/2005 provides that "[t]he intended use of the
product is that of displaying video signals for development of graphics or video film editing and production in a
CAD/CAM system or a video editing system (see Note 5 (E) to Chapter 84)", without reference to the capability
to connect to other sources than such a system or an automatic data-processing machine.

pin interface only", and "designed for working only in conjunction with a product classifiable under
heading 8471" – does not have a DVI interface. We are unclear to what extent the product may be
used with other devices due to the indication that it is "designed for working only in conjunction with
a product classifiable under heading 8471" and has "limited capability of receiving signals from a
source other than an automatic data-processing m achine". In addition, we understand that the
application of item 1 Commission Regulation No. 2171/2005 is limited to products of a certain
diagonal screen measurement.
381 Furthermore, we explained above that items 3 and 4 clearly exclude
certain displays from classifica tion under a duty-free heading based on their ability to connect to
sources other than an automatic data-processing machine.
7.281 Taken together, we consider that Commissi on Regulation Nos. 634/2005 and 2171/2005 have
the general effect of excluding from duty-free treat ment certain LCD colour monitors because they
are capable of displaying signals from sources ot her than an automatic data-processing machine.
According to these regulations, those products de scribed in item 4 of Commission Regulation No.
634/2005 and items 3 and 4 of Commission Regula tion No. 2171/2005 in connection with CN code
8528 21 90 are excluded from duty-free classification because they are "not of a kind solely or
principally used in an automatic data-processing sy stem". Only the product described in item 1 of
Commission Regulation No. 2171/2005 is described as "of a kind solely or principally used in an
automatic data-processing system", with emphasis give n to the fact that it is "designed for working
only in conjunction with a product classifiable un der heading 8471" and its "limited capability of
receiving signals from a source other than an auto matic data-processing machine...". Moreover, we
note that this product is described as having a "mini D-sub 15 pin interface only".
7.282 Under these regulations, the determination of wh ether to exclude the products from duty-free
treatment appeared to be independent of the dia gonal screen measurement of the particular product.
At a minimum, we note that a monitor with a 15- inch diagonal screen measurement and a "DVI in"
interface described in item 4 of Commission Re gulation No. 634/2005 was excluded, whereas item 1
of Commission Regulation No. 2171/2005 was not, d espite also having a 15-inch diagonal screen
measurement, though no DVI interface.
7.283 The measures do not expressly indicate whet her the presence of DVI connectability is
dispositive in determining classification under a dutiable heading. However, we note, of the five items
considered, those four that were excluded from classification under a duty-free heading were
described as possessing some variation of a DVI (whe re a "DVI in", both "DVI-D" and "DVI-I", or
"DVI-D") interface. The product classified under duty-free CN code 8471 60 80 under item 1 of
Commission Regulation No. 2171/2005 was describe d as having a "mini D-sub 15 pin interface
only".
382

381 We note item 1 of Commission Regulation No. 2171/2005 provides "in view of its size and its
limited capability of receiving signals from a source other than an automatic data-processing machine via a card
without video processing features, it is considered to be of a kind solely or principally used in an automatic data-
processing system" In light of this rationale, we understa nd that size is a relevant consideration in determining
whether such a product would qualify for duty-free treatment under subheading 8471 60.
382 While the linkage between the presence of a DVI interface and connectability to sources other than
an automatic data-processing machine is not express, it appears to be implied, in particular, when Commission
Regulation No. 2171/2005 is read in its entirety. Other than describing the dimension, resolution and pixel size,
item 1 of this Regulation otherwise indicates that the "[t]he product has a mini D-sub 15 pin interface only".
Immediately thereafter, item 1 indicates that "[the product] is designed for working only in conjunction with a
product classifiable under heading 8471". In addition to the fact that these two sentences appear in sequence, the
sentences further appear directly related due to the fact that the first sentence refers to "The product" while the
second sentence begins with the indefinite "It". In contrast, for instance, item 3 of Commission Regulation No.

7.284 Accordingly, the Panel concludes that item 4 in the Annex of Commission Regulation Nos.
634/2005 and items 2, 3 and 4 in the Annex of 2171/2005 require that LCD monitors that are capable
of displaying signals from sources other than an automatic data-processing machine, as described in
those items, shall be classified in a dutiable headi ng, which sets a 14 per cent duty. Under the current
CN2010, such products would thus be excluded from CN code 8528 51 00.
(d) The continuation of the duty suspension under Council Regulation No. 179/2009
7.285 The Panel recalls its finding in paragraph 7.1 90 above that Council Regulations Nos.
301/2007 and 179/2009 were implem ented as either an extension or amendment of Council
Regulation No. 493/2005, and are within the Panel's terms of reference. Because Council Regulation
No. 179/2009 replaced Council Regulation No. 301/2007 in the EC legal order, effective 1 January
2009, as explained, we will limit our assessment to the effects of Council Regulation No. 179/2009.
7.286 We also explained in paragraph 7.184 above that Article 1 of Council Regulation No.
179/2009 sets forth the specific legal obligation to autonomously suspend 14 per cent ad valorem
duties, until 31 December 2010 for certain products. In particular, under CN code 8528 59 10, duties
are to be suspended for:
"[B]lack and white or other monochrome monitors, using liquid crystal display
technology, equipped with either digital vi sual interface (DVI) or a video graphics
array (VGA) connector or both with a diagonal measurement of the screen not
exceeding 77,50 cm (i.e. 30,5 inches), with an aspect ratio of 1:1, 4:3, 5:4 or 16:10,
with a pixel resolution exceeding 1,92 me ga pixels, and with a dot pitch not
exceeding 0,3 mm".
7.287 Under CN code 8528 59 90, duties are to be suspended for
"[C]olour monitors, using liquid crysta l display technology, with a diagonal
measurement of the screen not exceeding 55,9 cm (i.e. 22 inches), with an aspect
ratio of 1:1, 4:3, 5:4 or 16:10".
(i) Arguments of the parties
7.288 The European Communities explains that Council Regula tion No. 493/2005 expired on 31
December 2008, and was thereafter replaced by Council Regulation No. 179/2009, beginning on 1
January 2009. It thus considers that Council Regul ation No. 179/2009 is relevant to the Panel's
analysis.
383 The European Communities argues that th e legal effect of Council Regulation No.
179/2009 is to suspend the application of duti es through 31 December 2010 on certain flat panel
colour video monitors having inter alia an aspect ratio 1:1, 4:3, 5:4 or 16:10 and sizes up to 22 inches.

2171/2005 notes that "[t]he produc t can display signals received from va rious sources...", immediately after
specifying a multitude of interfaces that include a "mini D-sub 15 pin" as we ll as "DVI-D" and DVI-D". In our
view, the language strongly suggests that the presence of a DVI interf ace has been a leading factor in
establishing whether a product is "of a kind solely or principally used in an automatic data-processing system".
We note, in addition, as the complainants have indicat ed, that there have been at least three BTI in which
customs officials exclusively noted th e presence of a DVI within the descri ption of the product in reaching a
decision to classify a product under dutiable CN code 8528 21 90 (currently 8528 59 10) (See, e.g., IE06NT-14-
501-01, IE06NT-14-501-02 and IE06NT-14-501-03 (Exhibit US-50)).
383 European Communities' first writte n submission, para. 94 (Exhibit EC-9). The Panel recalls its
determination in paragraph 7.190 above that Council Regulation No. 179/2009 amended Council Regulation
No. 493/2005 and would therefore form the basis of the Panel's assessment of the duty suspension.

The European Communities explains further that du ties are suspended for black and white or other
monochrome LCD monitors up to the size 30,5 inches equipped inter alia with a DVI or VGA
connector.
384 The European Communities argues that the duty suspension assists customs officials in
providing uniform classification of different monitor models in light of the "number and complexity
of the different technical criteria that are releva nt in the tariff classification of LCD monitors". 385 The
European Communities argues further that the application of the duty suspension effectively results in
a zero applicable tariff and removes any breach of Article II of the GATT 1994.386
7.289 The complainants do not dispute the legal status of the duty suspension under Council
Regulation No. 493/2005 or under successor provisions, or its application to the particular products
described in the measure. The complainants, howev er, argue that the duty suspension is temporary
and conditional because it has a finite period of va lidity, limited application and may be terminated
unilaterally.387 For these reasons, they reject the notion th at the duty suspension for certain imported
display products is "legally sufficient" or adequate to eliminate inconsistency with Article II of the
GATT 1994. They also observe that the suspensi on does not cover all products covered by the
concessions at issue, but only those that match criteria up to a particular screen size.388
(ii) Consideration by the Panel
7.290 In this section, the Panel will address the legal effect of th e duty suspension in the context of
the EC legal order. In a later section, we will discuss whether the duty suspension removes any
breach of Article II of the GATT 1994.
7.291 In our view, it is clear from Article 1 of C ouncil Regulation No. 179/2009 that the sole legal
effect of the measure is to suspend the applicati on of 14 per cent duties, for the period 1 January 2008
through 31 December 2010, for monitors falling with in the terms described within the text of the
regulation. In particular we e xplained above that, under CN code 8528 59 10, duties are to be
suspended for:
"black and white or other monochrome monitors, using liquid crystal display
technology, equipped with either digital vi sual interface (DVI) or a video graphics
array (VGA) connector or both with a diagonal measurement of the screen not
exceeding 77,50 cm (i.e. 30,5 inches), with an aspect ratio of 1:1, 4:3, 5:4 or 16:10,
with a pixel resolution exceeding 1,92 me ga pixels, and with a dot pitch not
exceeding 0,3 mm".
7.292 Further, under CN code 8528 59 90, duties are to be suspended for:

384 European Communities' first written submission, para. 94.
385 European Communities' response to Panel question No. 23.
386 European Communities' first written submission, para. 63.
387 United States' first written submission, paras. 124 and 142; United States' second written
submission, para. 77; Japan's first written submission, para . 230; Japan's first oral statement, para. 45; Japan's
second written submission, para. 141; Chinese Taipei's fi rst written submission, paras. 183, 353-354; Chinese
Taipei's first oral statement, para. 15; Chinese Taipei's second written submission, para. 212. The complainants
contend that the duty suspension has been extended once until 31 December 2006, under Council Regulation
No. 493/2005, and later until 31 Decem ber 2008 by Council Regulation No. 301 /2007, and is currently set to
expire on 31 December 2010 under Council Regulation No. 179/2009.
388 United States' first written submission, para. 124; United States' second written submission, paras.
78, 79; Chinese Taipei's second written submission, para. 213.

"colour monitors, using liquid crystal display technology, with a diagonal
measurement of the screen not exceeding 55,9 cm (i.e. 22 inches), with an aspect
ratio of 1:1, 4:3, 5:4 or 16:10".
7.293 We note that duties are thus suspended on certain LCD colour monitors with aspect ratios of
1:1, 4:3, 5:4 or 16:10 and a diagonal screen measurement of up to 22 inches; and certain LCD black
and white or other monochrome monitors with aspect ratios of 1:1, 4:3, 5:4 or 16:10, with a pixel
resolution exceeding 1,92 mega pixels, with a dot pitch not exceeding 0,3 mm, and with a diagonal
screen measurement of up to 30,5 inches. Accordingly, duties are not suspended on all LCD colour or
black and white or other monochrome monitors cl assifiable under either CN code 8528 59 10 or
8528 59 90.
7.294 Hence, not all monitors presently classifiable under CN code 8528 59 10 or 8528 59 90 and
capable of reproducing video images from automati c data-processing systems and sources other than
automatic data-processing systems, are eligible fo r duty suspension under Council Regulation No.
179/2009. This is, for example, the case for either LCD colour monitors, or black and white or other
monochrome monitors, exceeding respectively 22 and 30.5 inches in diagonal measurements,
respectively, even if they meet all other requirements set forth in Article 1 of that regulation.
7.295 In addition, we note that the measures only specified that duties are suspended until 31
December 2010.
(e) The application of a 14 per cent customs duty on imports of certain flat panel display devices
7.296 In addition to the above measures at issue, in their joint Panel request, the complainants
specified that the measure at i ssue includes "the actual application by customs authorities of EC
member States of a 14 per cent customs duty on imports of certain flat panel displays".
389 In response
to a question from the Panel, the complainants indicated that they were not challenging the application
of any EC measures. 390 Accordingly, the Panel will not consider particular applications by EC
member State customs officials, or reach findings with respect to particular applications.
(f) Conclusions
7.297 In our analysis of the measures above, we c oncluded that tariff item number 8528 41 00 and
8528 51 00 implement the European Communities' ob ligations with respect to tariff item number
8471 60 90 in the EC Schedule. Further we conclude that, under CNEN 2008/C 133/01, monitors that
are capable of receiving signals from sources other th an an automatic data-processing machine, or are
fitted with DVI, HDMI or similar connectors are automatically excluded from classification under the
duty-free CN code 8528 51 00. We concluded that Commission Regulation Nos. 634/2005 and
2171/2005, similarly have the effect of excluding from duty-free treatment under CN code 8528 51 00
LCD certain colour monitors that are capable of displaying signals from sources other than an
automatic data-processing machine. Finally, we concluded that Council Regulation No. 179/2009
suspends the application of duties under CN code 8528 59 90 on certain LCD colour and black and
white or other monochrome monitors that meet the technical criteria set forth in the regulation. The
duty suspension applies until 31 December 2010.

389 Joint Panel request, WT/DS375/8, 376/8, DS377/6, fn. 5.
390 Complainants' responses to Panel question No. 119.

3. The complainants' further identification of the products at issue
7.298 We found in paragraph 7.197 above that the comp lainants sufficiently identified the products
at issue in their joint Panel request in order for us to proceed with the dispute. In particular, we noted
that the measures at issue describe the products sufficiently in terms of two criteria, i.e., (i) those
capable of reproducing video images from a source other than an automatic data-processing machine,
and (ii) those with certain attributes, such as, for example, a built in DVI interface.
7.299 In their first submissions, the complainants discussed the products at issue in additional detail.
In the European Communities' view, the Panel shoul d limit its analysis to those products specifically
discussed by the complainants and to the particular products listed in the identified measures at issue.
7.300 The Panel will now consider the implications of the complainants' identification of the
products and particular measures at issue on our assess ment of the concessions in the EC Schedule at
issue.
(a) Arguments of the parties
7.301 The United States submits that a "flat panel display device" is "a type of monitor that is thin
and typically uses less energy than devices using conventional cathode ray tu be (CRT) technology".
In its view, these devices may rely on a "variety of technologies", including liquid crystal display
(LCD) or plasma technology.
391 The United States submits that computer displays at the outset were
primarily based on analogue CRT technology, requi ring that a digital signal generated by an
automatic data-processing machine be converted to analogue before being received by the display. 392
Today, it contends that "virtually all computer monitors marketed and sold" use LCD technology.
These displays are capable of receiving and pro cessing digital signals without analogue conversion.
393
The United States contends that flat panel disp lay devices may connect to an automatic data-
processing machine using "various technologies" that accept digital signals, including, for instance the
Digital Visual Interface (DVI) connector.394

391 United States' first written submission, para. 50.
392 The United States submits that digital-to-analogue conversion was handled by a Video Graphics
Array (VGA) connector, also referred to as an "RGB co nnector", "D-sub 15 connector", or "mini-sub D15"
connector. United States' first written submission, para. 51, fn. 64.
393 The United States submits that development of LCD technology used in computer displays began in
the early 1970s, began to be commerci alized in the 1980s, and were "an increasingly important part of the
market during the mid-1990s". United States' first written submission, para. 52.
394 The United States submits that the DVI, which it describes as a connector that typically consists of
three rows of pins arrayed on a plug with a screw on either side, has become the industry standard for
connecting a computer to a flat panel display device (Un ited States' first written submission, paras. 53-54). The
complainants jointly submit that the DVI interface was developed in 1998 by the Digital Display Working
Group (DDWG) industry group, which they describe as an "open industry group" comprising leading computer
manufacturers such as Intel, Compaq, Fujitsu, He wlett Packard, IBM, NEC and Silicon Image. The
complainants refer to a statement by the DDWG that the DVI standard "provides a high-speed digital connection
for visual data types that is display technology independent … is primarily focused at providing a connection
between a computer and its display device … and meets the needs of all segments of the PC industry
(workstation, desktop, laptop, etc) and will enable th ese different segments to unite around one monitor
interface standard" See Digital Displa y Working Group, Digital Visual Interface (DVI) Revision 1.0, p. 5
(March 30, 1999) ("DDWG Paper") (Exhibit US-35). Se e generally: United States' first written submission,

7.302 Japan submits that this dispute concerns "flat panel display devices" including "the [LCD]
type commonly referred to, in numerous EC and other documents, as 'LCD monitors'".
395 While
stating that it would "focus[] on LCD monitors with a 'digital visual interface' or DVI", Japan submits
that the scope of the dispute covers "flat pane l display devices 'for' [automatic data-processing]
machines".396 Japan submits that LCD monitors with DVI are the most common type of flat panel
display device.397 Japan further submits a list of specific products that it considers illustrative of the
types of LCD monitors that are subject to duties.398
7.303 Chinese Taipei submits that "flat panel display devices" are devices capable of receiving
signals from automatic data-processing machines and ot her sources that are lighter and much thinner
than traditional displays due to their use of technologies other than CRT, such as LCD, Electro
Luminescence, Plasma, Vacuum-Fluorescence or Organic Light Emitting Diode (OLED)
technologies. Chinese Taipei contends that flat pa nel display devices can have "varying sizes" and
"various technical specifications", and may rely on a "variety of connectors", including DVI. In its
view, displays with DVI technologies are "most affect ed" by the measures at issue in this dispute.
Chinese Taipei submits that the DVI interface is specifically designed for automatic data-processing
machines.
399 Chinese Taipei submits that flat panel disp lay devices are "generally used in connection
with [automatic data-processing] machines or as part of computer networks in office, industrial or
home environments."400
7.304 The European Communities argues that the complainants' descriptions of the products in
their first submissions assume that the product at issue is synonymous with "computer monitors" or
"LCD monitors with a DVI", or otherwise display devices capable of receiving signals from automatic
data-processing machines only, or from both automatic data-processing machines and other
sources.
401 It notes that the United States describes monitors and display technology generally, using
terms such as "LCD monitors", "LCD flat panel display devices" "LCD monitors with a DVI", "LCD
monitors 'for' a computer", "LCD monitors that are 'for' ITA products", "LCD computer monitor,
whether or not equipped with DVI and whether or not solely capable of being used with a
computer".402 The European Communities contends that Japan has limited its description to displays
using LCD technology and incorporating a DVI conn ector, which may be used with automatic data-
processing machines only, or with both automatic data-processing machines and other sources. 403
Finally, the European Communities argues that Chine se Taipei has limited its legal arguments to flat
panel display devices using LCD technology that can be used with automatic data-processing
machines only, or with automatic da ta-processing machines and other apparatus. 404 Accordingly, the

395 Japan's first written submission, para. 216.
396 Japan's first written submission, para. 216.
397 Japan otherwise states that it "supports the argume nts of" the United States and Chinese Taipei that
the measures at issue limit duty-fr ee coverage under HS1996 heading to devices that can display information
only from an automatic data-processing machine (Japan's first written submission, para. 216).
398 Exhibit JPN-15. Japan argues that this list is illustrative only, and not comprehensive (Japan's first
written submission, para. 218).
399 Chinese Taipei's first written submission, para s. 11-12 (citing the DDWG website, available at
http://www.ddwg.org and http://www.ddwg..org/faqs.asp).
400 Chinese Taipei states that flat panel display devices are also used in Points of Information (PoI) or
Points of Sale (PoS) (Chinese Taipei's first written submission, para. 14).
401 European Communities' first written submission, para. 42.
402 European Communities' first written submission, pa ra. 41 (referring to United States' first written
submission, paras. 56, 58, 59, 61, 132, 135 and 137.)
403 European Communities' first written submission, paras. 39-40.
404 European Communities' first written submission, paras. 36-37.

European Communities considers the complainants' descriptions inadequate to establish a prima facie
case.
7.305 To the extent that the Panel considers that th e complainants have identified "some" of the
displays with sufficient clarity, the European Communities argues that the Panel should limit its
findings to the LCD monitors described in ite m 4 in the annex to Commission Regulation No.
634/2005, and items 1, 2, 3 and 4 in Commission Regulation 2171/2005.
405 It argues that the five
displays in these measures are capable of being used with both video monitors and monitors of
automatic data-processing machines. However, th e European Communities additionally requests the
Panel to make findings with respect to LCD monitors that can accept a signal only from an automatic
data-processing machine, since, it argues, the compla inants have specified mo nitors that can accept a
signal only from automatic data-processing machines. Moreover, because the complainants did not
refer to HDMI technology at all in their first writte n submissions, but only mentioned this category of
product in response to a question from the Panel, the European Communities argues that displays
utilizing HDMI technology should not be considered within the scope of the claims before the
Panel.
406
7.306 In response, the United States submits that it has used term s to describe each product, and
provided definitions as well as technical background information sufficient to identify the products.407
In particular, the United States submits that it adequa tely set forth its claim by identifying at least two
types of flat panel display devices that are affected by the measures at issue: "flat panel display
devices with a DVI interface (whether or not the product can be used with devices other than an
automatic data-processing machine)"; and "flat panel di splay devices that are not 'solely' for use with
an ADP machine, but which are nonetheless 'for' an ADP machine".408 The United States additionally
argues that displays that have an HDMI interface fall within its claims because these products are
"capable of connecting to a device other than a computer (whether through an HDMI interface or
another technology)".409
7.307 Japan rejects the view that it has limited the scope of its claim by referring to LCD
technologies, or to the presence of DVI, or that it has limited its claim based on whether a display can
also operate with some other non-ITA device, such as a television receiver. In its view, reference to
the DVI connector is illustrative, as oppo sed to delimiting the products at issue. 410 In light of its claim
regarding displays "for" automatic data-processing m achines, Japan considers that a display with an
HDMI interface would fall within the scope of its claim as long as the device is capable of receiving
signals from and operating with an automatic data-processing machine or other ITA product.
Moreover, Japan submits that the HDMI interface was developed for audio-visual appliances on the
basis of the DVI standard.411
7.308 Chinese Taipei similarly rejects that its claims are limited to LCD monitors with DVI
connectors.412 While submitting that the display types most affected by the EC measures are LCD
displays with a DVI connector, Chinese Taipei c onsiders that displays with HDMI interfaces fall

405 European Communities' first written submission, paras. 47-48.
406 European Communities' second written submission, para. 39.
407 United States' second written submission, para . 16 (referring to United States' first written
submission, paras. 42, 50-54, 68-71) (Exhibits US-22 to 25; US-31 to 35, US-53 to 56).
408 United States' response to Panel question No. 48; United States' second oral statement, para. 27.
409 United States' response to Panel question No. 49.
410 Japan's second written submission, para. 132.
411 Japan's response to Panel question No. 49.
412 Chinese Taipei's second written submission, para. 98.

under its claim.
413 Chinese Taipei further submits that it has clearly indicated the scope of the product
covers flat panel display devices that can only re produce and receive signals from an automatic data-
processing machine.414 Chinese Taipei argues that it included both of these products because certain
devices that can only receive signals from an ADP m achine have nevertheless been subject to duties
by the European Communities merely due to the presence of certain connectors.415
(b) Consideration by the Panel
7.309 We recall from above that the task before us in respect of the complainants' claims based on
Article II of the GATT 1994, is to determine whet her the measures at issue result in duties being
levied on certain products, in excess of the tari ff treatment provided for those products under the
EC Schedule. In doing so, we explained our unde rstanding of the complainants' claim to be that
aspects of the measures operate automatically to exclude from particular duty-free tariff headings all
products with a certain characteristic irrespectiv e of the other objective characteristics they may
possess. Thus, we concluded that, if we were to de termine that some products fall within the scope of
duty-free concessions in the EC Schedule, then if the challenged measures provided for the
application of duties to those products covered by the concession, this treatment would be sufficient to
find a breach of Article II.
7.310 Accordingly, we disagree with the European Communities that the complainants were obliged
to identify the particular models or precise products at issue in order to succ eed at their claim. We
consider that the measures within our terms of re ference determine the products that are within our
terms of reference. The Panel will consider below these and other aspects of the measures in its
assessment in determining whether the complain ants have met their burden to demonstrate
inconsistency of the measures at issue under Article II of the GATT 1994.
7.311 As argued above by the parties, the European Communities notes that the complainants have
referred to aspects of the measures at issue which describe particular products or attributes of
products, in particular, items in the Annex to Commission Regulation Nos. 634/2005 and 2171/2005.
In addition, we note that the complainants have re ferred to various products or categories of products
in framing their arguments to the Panel.
7.312 The United States, for instance, describes a "fla t panel display device" as a type of monitor
that is thinner and typically uses less energy than devices using CRT technology. It contends that
these devices rely on a "variety of technologies", "including liquid crystal or plasma". 416 The United
States emphasizes that these devices are capable of connecting to automatic data-processing machines
using "various connectors", including notably a DVI interface.417
7.313 Japan describes "LCD monitors", in particul ar those with DVI interfaces, as the "most
common type" of flat panel display devices that are capable of displaying information from an
automatic data-processing machine, regardless of th eir ability to connect to other units. Japan
additionally indicates that other products may fall within the scope of this dispute.
418

413 Chinese Taipei's response to Panel question No. 49.
414 Chinese Taipei's first written submission, para. 234.
415 United States' first written submission, para. 130 (Exhibit US-78); Chinese Taipei's response to
Panel question No. 48.
416 United States first written submission, para. 50.
417 United States first written submission, para. 53.
418 Japan's first written submission, paras. 216 and 218.

7.314 Chinese Taipei submits that "flat panel display devices" are those devices "capable of
receiving signals from automatic data-processing machines only or from both ADP machines and
other sources". Chinese Taipei submits further that these devices rely on "various different
technologies" such as LCD, Electro Luminescence , Plasma, Vacuum-Fluorescence or OLED, have
"varying" sizes and "various" specifications, and inco rporate "a variety of connectors", including DVI
as well as "VGA connectors". It considers that "L CD displays with a DVI connector" are "most
affected" by the measures at issue.
419
7.315 On the basis of the Panel request, our assessm ent of the measures, and the complainants'
views on the products at issue set forth in their subm issions, we understand it is not in dispute that the
claims relate to devices using non-CRT technology.
7.316 With regard to specific display technology, some of the aspects of the measures challenged, in
particular Commission Regulation Nos. 634/2005 an d 2171/2005 identified above , relate expressly to
LCD technology. However, the complainants have additionally argued that the measures apply to
display devices based on other technologies. The relevant provisions of CNEN 2008/C 133/01 are
expressly applicable to technologies other than mere ly LCD. In addition, the joint Panel request
identifies both display devices using LCD technology as well as "flat panel display devices"
generally. While the complainants have for the most part focused their arguments on LCD devices,
the Panel does not consider that the particular technol ogy used by a flat panel display is dispositive to
assessing whether the complainants have, or have not, established a prima facie case of violation. The
central issue, in our view, is the permissibility of excluding from duty-free treatment flat panel display
devices with certain characteristics that are unrelat ed to the particular display technology used.
Therefore, the Panel considers that the aspects of the measures at issue challenged are broad enough
to encompass flat panel display devices with certain characteristics that are unrelated to the particular
display technology used, irrespective of the precise display technology used.
7.317 In light of the complainants' Panel request, and their arguments discussed above, the Panel
considers that the Panel's inquiry is limited to th e following aspects of the measures: (i) the exclusion
of flat panel display devices from duty-free treatment on the basis that they are able to receive and
display signals from sources other than automatic data-processing machines, in addition to being able
to receive and display signals from an automatic data-processing machine and (ii) the exclusion of flat
panel display devices from duty-free treatment on the basis of the presence of a DVI connector. As
recognized by the European Communities a nd complainants, the Appellate Body in
EC - Chicken Cuts found:
"the identification of the products at i ssue must flow from the specific measure
identified in the panel request. [...] [It] is the measure at issue that generally will
define the product at issue".
420
7.318 In our view, it flows from this that the products at issue are: (i) flat panel display devices that
are capable of receiving and reproducing video images both from an automatic data-processing
machine and from a source other than an automatic data-processing machine, and (ii) flat panel
display devices that have a DVI interface, whether or not they are capable of receiving signals from
another source.
7.319 With regard to display devices incorporating an HDMI connector, we consider that these
products also fall within our terms of reference. While the complainants did not refer to HDMI

419 Chinese Taipei's first written submission, paras. 11, 12 and 14.
420 Appellate Body Report on EC – Chicken Cuts, para. 165 (emphasis in original).

technology in their respective sections identifyi ng the "products at issue", we note that the
complainants referred to "flat panel displays with certain attributes, such as DVI" within their joint
Panel request.
421 In addition, we note that the relevant text of the identified CNEN 2008/C 133/01
states that "Monitors of this subheading cannot ... be fitted with interfaces such as DVI-D, DVI-I and
High-Definition Multi-media Interface (HDMI) ev en if these interfaces do not support high-
bandwidth digital content protection (HDCP) encryption".422 Finally, even if we were to consider that
products with HDMI were not covered, to the extent that HDMI are used to connect a flat panel
display device to sources other than an automatic data-processing machine, we consider that flat panel
display devices with HDMI would be included in the scope of the complainants' claim relating to this
aspect of the measure.
7.320 Accordingly, we will consider below whether the products as specified by the complainants
and that flow from the criteria identified by the complainants, fall within the scope of the EC
concessions at issue.
4. Whether the European Communities' tariff treatment of particular flat panel displays is
consistent with its obligations under Article II of the GATT 1994
7.321 The European Communities made duty-free conc essions on certain information technology
products as part of its implementation of the ITA, which are reflected in the EC Schedule. The
complainants' claim with respect to the tariff treatme nt of certain flat panel display devices relates to
two concessions in the EC Schedule: (i) the conc ession embodied in the narrative description "Flat
panel display devices (including LCD, Electro Luminescence, Plasma, Vacuum-Fluorescence and
other technologies) for products falling within this ag reement, and parts thereof", in the Annex to the
EC Schedule
423; and (ii), the concession embodied in EC Schedule under tariff item number
8471 60 90 listed therein. The complainants argue that by not affording duty-free treatment to
products which are within the scope of these tari ff concessions, the European Communities is acting
inconsistently with its obligati ons under Article II of the GATT 1994, which requires that Members
not treat products coming from another Member le ss favourably than in their schedules or charge
duties in excess of the bound rates set forth in the Schedule.
7.322 As noted above, we will start by determining the scope of the FPDs concession in the Annex
to the EC Schedule. We will then turn to dete rmining the scope of tariff item number 8471 60 90.
Having determined the scope of the relevant obligati ons in the EC Schedule, we will then consider
whether the effect of the measures at issue noted abov e is such that products that fall within the scope
of the European Communities' obligations do not receive duty-free treatment.
(a) The ordinary meaning of the relevant c oncession: The EC headnote and narrative product
description for FPDs in the Annex to the EC Schedule
7.323 The complainants submit that FPDs are covered by the duty-free concession in the narrative
description for FPDs in the Annex to the EC Schedul e ("Flat panel display devices (including LCD,
Electro Luminescence, Plasma, Vacuum-Fluorescence and other technologies) for products falling
within this agreement, and parts thereof").
424 They argue that the ordinary meaning of the terms of the

421 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 3 (emphasis added).
422 Exhibits US-49; JPN-18; TPKM-23 (emphasis added).
423 Regarding the complainants' views on the location of the concession, see paras. 7.219 - 7.226 above.
424 The following third parties also take this view: see, for instance, Australia's oral statement, paras. 8,
13; China's executive summary of its third party submission, para. 3; Costa Rica's third party submission, para.
5, 22-23; Hong Kong (China)'s third party statement, paras. 4-5; Korea's third party submissions, paras. 10-11,

FPDs narrative description, when read in the cont ext of the EC headnote, requires the European
Communities to extend duty-free coverage to all pr oducts described by the narrative description for
FPDs, wherever those products are classified.
425 In their view, the tariff item numbers listed beside
the narrative descriptions cannot limit the concession's sc ope to only those products classifiable in the
listed codes. 426 The United States even describes the EC headnote as a "separate" commitment,
additional to the commitments associated with in dividual tariff lines in the EC Schedule. 427 Within
the terms of this narrative description, they indicate that the term "for" is key to the ordinary meaning
analysis under the Vienna Convention.
7.324 The European Communities accepts that the EC headnote is part of its Schedule 428, but
rejects the complainants' allegations on the ordi nary meaning of the terms in the EC headnote 429 as
well as the FPDs narrative description. 430 The European Communities argues that the fourteen tariff
item numbers listed next to the FPDs narrative description determine the scope of the FPDs
commitment made pursuant to Attachment B and therefore should not be "read out from the EC's
Schedule".
431
7.325 As explained above432, the Annex to the EC Schedule contains (i) the EC headnote, and (ii) a
table listing 55 narrative descriptions (including the FP Ds narrative description) in a left-hand column
with one or more specific tariff item numbers liste d next to each narrative description in the table's
right-hand column (including 14 codes associated with the FPDs narrative description).
7.326 We recall that the EC headnote provides as follows:

22; Philippines' third party submission, para. 3; Philippines' third party statement, pp. 5-6; Singapore's oral
statement, paras. 9 and 48.
425 Complainants' response to panel question No. 100. The United States and Chinese Taipei submit
that the ITA itself does not provide for the inclusion of a headnote; however, they argue that participants agreed,
during the implementation phase, to incorporate a headnote into their Schedules as part of the process of
implementing their Attachment B conce ssions. They argue that such a h eadnote was to include the language
"wherever they are classified in th e HS" (United States' and Chinese Taip ei's responses to panel question No.
100). Japan argues that the ITA does not require the incorporation of a headnote when inscribing duty-free
concessions on products described in Attachment B into ITA participants' Schedules. It argues that participants
had discretion concerning how to reflect this commitment into their own Schedules subject to review and
approval by the Members. While arguing that no requirement exists to incorporate a particular headnote, Japan
submits it included a note that is "almost the same" as the EC headnote (Japan's response to panel question
No. 100).
426 The following third parties also take this view : see, for instance, Australia's third party oral
statement, para. 8; Philippines third party oral statement, p. 8; and Singapore's third party submission, para. 22.
427 United States' comments to the European Communities' response to Panel questions Nos. 100 and
103 and questions 1-3 of the United States.
428 European Communities' first written submission, para. 18.
429 European Communities' first oral statement, para. 20.
430 European Communities' first written submission, paras. 104-118.
431 European Communities' first written submission para s. 50-61; European Communities' response to
Panel question No. 10; European Communities' second written submission, paras. 13 and 18. The European
Communities argues that the CN codes that appear next to the product description for FPDs "appear twice" in its
Schedule, as those codes listed next to the narrative descriptions in the Annex to the EC Schedule are also listed
elsewhere in the EC Schedule and carry a zero duty. Thus, the European Communities considers that the CN
codes in the Annex to the EC Schedule "exhaust" the headnote, in particular the language "wherever the product
is classified" that appears therein. Accordingly, the European Communities does not consider the headnote adds
to its commitments (see, for instance, European Comm unities' first oral statement, para. 19; European
Communities' response to questions from the United States during second meeting, para. 1).
432 See paragraphs 7.24 - 7.25 above.

"With respect to any product described in or for Attachment B to the Annex to the
Ministerial Declaration on Trade in Information Technology Products
(WT/MIN(96)/16), to the extent not specifically provided for in this Schedule, the
customs duties on such product, as well as any other duties and charges of any kind
(within the meaning of Article II:1(b) of the General Agreement on Tariffs and Trade
1994) shall be bound and eliminated as set forth in paragraph 2(a) of the Annex to the
Declaration, wherever the product is classified".
433
7.327 The text of the FPDs narrative description, th at appears below the EC headnote, provides as
follows:
"Flat panel display devices (including LCD, Electro Luminescence, Plasma, Vacuum-
Fluorescence and other technologies) for produc ts falling within this agreement, and
parts thereof".434
7.328 The following 14 tariff item numbers are associated with the FPDs narrative description:
"84716090, 84733010, 84733090, 85312030, 85312051, 85312059, 85312080,
85318030, 85319010, 85319030, 90138011, 90138019, 90138030, 90139010".435
7.329 The complainants have identified both the FPD s narrative description and the EC headnote in
discussing the concession that they consider to ari se under the Annex to the EC Schedule. Because
the EC headnote appears at the outset of the Annex to the EC Schedule and thus precedes the
narrative descriptions, we consider it appropriate to begin our analysis with the EC headnote before
turning to the narrative description. Pursuant to Article 31 of the Vienna Convention, we will
consider the ordinary meaning of the EC headnote.
(i) The meaning of the terms of the EC headnote
Arguments of the parties
7.330 The complainants' arguments with respect to the EC headnote focus on the language
"wherever the product is classified" and "to the extent not specifically provided for in this Schedule".
There arguments are reflected below:
wherever the product is classified
7.331 The complainants argue that the phrase "wherever the product is classified" means that the
product must be accorded duty-free treatment no matter where the Member chooses to classify it in its
customs tariff under national law.436 The United States considers that the function of the EC headnote
is to "affirm" the duty-free treatment to be accorded to products falling within the general description
of products in Attachment B. 437 It argues that a Member "is not excused" from providing duty-free
treatment to an Attachment B product "merely be cause it is classifiable in a dutiable heading". 438
Japan argues that the phrase "wherever the product is classified" indicates that the narrative product
descriptions "take precedence" over the HS headings used by the ITA partic ipants to classify these

433 Exhibit US-7.
434 Exhibit US-7.
435 Exhibit US-7.
436 Complainants' response to Panel question No. 10(b).
437 United States' first written submission, para. 8.
438 United States' response to Panel question No. 10(b).

products in the past, and thus determine the scope of the tariff concessions on Attachment B
products.
439 If tariff item numbers were intended to define the scope of the concession, it argues, it
would have been unnecessary to include the EC headnote that explicitly provides for duty-free
treatment wherever the product is classified. 440 Chinese Taipei considers that the meaning of the
words "wherever the product is classified" is "both crucial and self-explanatory" as it means that a
listed product is entitled to duty-free treatment regardless of the specific tariff line under which a
particular product falls in the EC Schedule.
441
7.332 The European Communities argues that the phrase "wherever the product is classified" was
included in the EC headnote because the product definitions in Attachment B "could cut across"
multiple different tariff lines.442
to the extent not specifically provided for in this Schedule
7.333 The United States argues that the phrase "to the extent not specifically provided for in this
Schedule" acknowledges that produc ts may be covered by a concession associated with a particular
tariff line or by the Attachment B description, or both. Even if the product is classifiable in a dutiable
heading, the United States argues, the Members mu st nonetheless accord dut y-free treatment to the
product if it meets the Attachment B description. 443 Japan argues that the phrase when read with the
phrase "shall be bound and eliminated" means th at Attachment B concessions grant a duty-free
treatment to certain products that are not given duty-free treatment by any other specific
concessions.444 Chinese Taipei argues that the phrase relates to the term "product" and clarifies that
the Attachment B concessions are additional to an y concessions already resulting from Attachment
A.445
7.334 The European Communities argues that the phrase "to the extent not specifically provided
for in this Schedule" refers to all product definiti ons in the entire EC Schedule, including those in the
tariff headings that follow the HS nomenclature, a nd "those that do not follow the HS nomenclature
but rather copy into the Schedule the product definitions contained in Attachment B to the ITA.446
Consideration by the Panel
7.335 In terms of its structure, the EC headnote can be subdivided into five main elements or
grammatical phrases:
(a) "With respect to any product described in or for Attachment B to the Annex to the
Ministerial Declaration on Trade in Information Technology Products
(WT/MIN(96)/16),"
(b) "to the extent not specifically provided for in this Schedule"

439 Japan's response to Panel question No. 10(b).
440 Japan's second written submission, para. 221.
441 Chinese Taipei's response to Panel question No. 7.
442 European Communities' response to Panel question No. 10(b).
443 United States' response to Panel question No. 10(b).
444 Japan's response to Panel question No. 10(b).
445 Chinese Taipei's response to Panel question No. 10(b).
446 European Communities' response to Panel question No. 10(b).

(c) "the customs duties on such product, as we ll as any other duties and charges of any
kind (within the meaning of Article II:1(b) of the General Agreement on Tariffs and
Trade 1994)"
(d) "shall be bound and eliminated as set forth in paragraph 2(a) of the Annex to the
Declaration"
(e) "wherever the product is classified".
7.336 We first analyse these grammatical phrases on their own and thereafter consider the
implications of these elements taken together.
7.337 The opening segment of the EC headnote refers to any product that is either described "in"
Attachment B, or otherwise, is "for" Attachment B. We recall that certain HS headings listed in
Attachment A, Section 2 are identified by the comment " For Attachment B"
447 (emphasis added). As
we will discuss below, the EC Schedule reprodu ces these product descriptions both from (or "in")
Attachment B and from Attachment A, Section 2 di rectly below the EC headnote, in accordance with
the modalities set out in the ITA. We al so concluded above that, for our purposes 448, there are no
discrepancies between the FPDs narrative descri ption in Attachment B and the FPDs narrative
description in the Annex to the EC Schedule.449
7.338 The segment of the EC headnote "to the extent not specifically provided for in this Schedule",
introduces two main elements. We consider the reference to "in this Schedule" (emphasis added), can
only refer to the EC Schedule, because the EC headnote appears within the EC Schedule.
Furthermore, there is no reference to any particular section of the EC Schedule. With regard to the
terms "to the extent not specifically provided for", the adverb "specifically" is defined as, "(a) in
respect of specific or distinctive qualities; (b) peculiarly; (c) in a clearly defined manner, definitely,
precisely". The adjective "specific" is defined as, inter alia , "A. adjective 1 Having a special
determining quality. (...) 2 Specially or peculiarly pe rtaining to a particular thing or person, or a class
of these; peculiar ( to)". The term "provide" as a verb is defined as, inter alia, "3 verb trans. Stipulate
in a will, statute, etc., that."450
7.339 In view of the terms "specifically" and "provi ded for", and the reference to "this Schedule",
the Panel considers that this segment addresses th e provision of or inclusion of a specific element
within the EC Schedule as a whole. In the Panel' s view, the phrase "to the extent not specifically
provided for" relates to the requirement to el iminate customs duties and charges on the products
subject to the EC headnote in accord ance with the rate reductions specifi ed in the ITA. In the Panel's
view the phrase "to the extent not specifically prov ided for in this Schedule" cannot have been
intended to simply relate back to the word "produc t" that precedes it. Such an interpretation would
indicate that the requirement to provide duty free tr eatment to products subject to the headnote would
apply only to the extent that a product is not already "provided for" elsewhere in a Member's WTO

447 ITA (Exhibits US-1; TPKM-1).
448 See para. 7.226 above.
449 We recognized above that the product description for FPDs in the Annex to the EC Schedule is
clearly not identical with that appearing in Attachme nt B, noting in particular the addition of the words
"devices" and "vacuum-fluorescence" in the Annex. Nevertheless, we concluded that the description in the EC
Schedule clearly has its origins in Attachment B, base d on similarities between the two descriptions, and we
noted that the parties do not disagree that the text in Attachment B was intended to be modified to reflect what is
now reproduced in the Annex to the EC Schedule. See paras. 7.222-7.226 above.
450 See the Shorter Oxford Dictionary (2003), p. 2946 for "specifically" and "specific", and p. 2382 for
"provide".

schedule. Most, if not all, products described in or for Attachment B are classifiable somewhere
within the EC's Schedule. If the headnote were to apply only to products that were not already
"provided for" in the EC Schedule, the duty free treatment provided for in the Annex to the EC
Schedule would have extremely limited, if any, application. Such a limited interpretation would defeat
the clear objective to provide duty-free treatment to products described in or for Attachment B. We
thus consider that the phrase "to the extent not specifically provided for" must relate to the
requirement to bind and eliminate customs duties and other charges. In other words, the phrase
acknowledges that there may be some repetition in terms of product covera ge between the products
"in or for" Attachment B and the rest of the EC Schedule, including the two other ITA-related
sections of the EC Schedule. It also reaffirms th at such products are now subject to new duty-free,
ITA-related, tariff obligations, notwithstanding any overlap in product coverage.
451
7.340 The next segment of the EC headnote – "the customs duties on such product, as well as any
other duties and charges of any kind (within the mean ing of Article II:1(b) of the General Agreement
on Tariffs and Trade 1994)" – expressly refers to "customs duties" or "any other duties and charges of
any kind" that are "within the meaning of Article II:1(b) of the [GATT 1994]". In our view, these
terms are self explanatory. Moreover, we note that the meaning of these terms is not in dispute.
Thus, we do not address this aspect in further detail here.
7.341 The next segment of the EC headnote provides that customs duties and any other duties and
charges of any kind "shall be bound and eliminated as set forth in paragraph 2(a) of the Annex to the
Declaration". In combination with the preceding se gment, the obligation to "bind and eliminate"
duties and charges clearly commits the European Communities to provide duty-free treatment to the
products under the concession, and this by 1 January 2000 and as provided for in paragraph 2(a) of the
ITA Annex. The third and fourth segment thus in tegrate in the EC Schedule a key objective of the
ITA, i.e., to eliminate all duties and charges for Attachment B products, in the manner and time-frame
prescribed by paragraph 2(a) of the ITA Annex. Th e Panel notes that, without this particular segment
of the EC headnote, there appears to be nothing in the remainder of the EC headnote, nor in the
product descriptions or the tariff item numbers that fo llow, that on its face, could be interpreted to
indicate that duty-free treatment must be provided in respect of those products. One of the key
functions of the EC headnote is therefore to expr essly provide that duty-free treatment be provided to
the products covered in this part of the EC Schedule.
7.342 The EC headnote concludes with the phr ase "wherever the product is classified".
452 The term
"wherever" is defined, inter alia, as "II rel. adverb & conjunction. 2 At, in, or to any or every place in
or to which (...) III 3 Introducing a qualifying dependent clause: in or to whatever place: no matter
where. 4 In any case or circumstances in which".
453 The expression "no matter" is defined as "be of no

451 The Panel notes that the phrase "to the extent not specifically provided for in this Schedule" may
also have been intended to clarify that, where products already received duty-free treatment in the Schedule of a
Member, such products would not be subject to the "staging" provisions of the ITA, whereby customs duties
where reduced to zero through rate reductions in equal steps from 1997 to 2000. In this respect, products
already receiving duty-free treatment under a Schedule, would continue to receive duty-free treatment during
this "staging" period. The Panel notes further that the EC headnote refers explicitly to paragraph 2(a) of the ITA
Annex, which contains the "staging" provisions in the ITA.
452 We note this language is highly similar to language that appears in two separate locations in the ITA
Annex. The chapeau to the ITA Annex provides "Attachment B lists specific products to be covered by an ITA
wherever they are classified in the HS". The chap eau immediately preceding Att achment B provides "Positive
list of specific products to be covered by this agreement wherever they are classified in the HS". However, in
this Section of the Reports, we address the plain meaning of the terms.
453 The Shorter Oxford Dictionary (2003), p. 3622.

consequence or importance; (b) colloq. it is of no consequence or importance, never mind."
454 The
verb "classify" is defined generally as "1 Arrange in classes; assign to a class". 455 In terms of the
structure of the EC headnote, we understand this concluding phrase is tied to the condition that
customs duties (and any other duties and charges) sh all be bound and eliminated for products in or for
Attachment B as provided in paragraph 2(a) of the IT A Annex. Initially, on the basis of the dictionary
definitions provided above, the plain meaning of the phrase implies that the classification of the
product is not dispositive, not important, or even not re levant. When read together with the rest of the
text of the EC headnote that precedes it, the Pane l considers that the language "wherever the product
is classified" indicates that customs duties should be bound and eliminated on products in Attachment
B, as well as the products "for" Attachment B 456, and that this should be so no matter where that
product is classified in the EC Schedule.
7.343 Our initial analysis of the text of the EC hea dnote suggests that products described in or for
Attachment B must be granted duty-free treatment irrespective of where those products are classified.
This interpretation has implications for the m eaning and significance of the tariff item numbers
appearing alongside the product descriptions in the EC Schedule. In particular, whatever significance
the tariff item numbers would have, they would not ha ve the effect of controlling or determining the
scope of coverage arising from the ordinary mean ing of the product descriptions themselves. In other
words, the plain meaning of the phrase "wherever th e product is classified" is not consistent with a
view that the tariff item numbers notified by the Eu ropean Communities operate to limit the scope of
the EC concessions strictly to products that are cl assified or classifiable in the particular tariff item
numbers listed next to a given product description in the Annex to the EC Schedule.
7.344 The European Communities has ar gued that the language "wherever the product is classified"
is intended to refer to the tariff item numbers in the EC Schedule where zero duties would apply for a
particular product (as the Member would itself specify in its Schedule in the lead up to
implementation of its ITA obligations). 457 Accordingly, in its view, the tariff item numbers notified
alongside the product descriptions in its Schedule wo uld effectively "exhaust" the headnote, which is
to say that the tariff item numbers appearing next to the product descrip tions indicate where the
product will be classified by the European Communities. However, the Panel finds it difficult to agree
with this interpretation, at least on the basis of the plain meaning of the text of the EC headnote, when
considered in full. As the Panel has interprete d above, the phrase "wherever the product is classified"
refers to the condition that customs duties and othe r duties and charges shall be bound and eliminated
for products in or for Attachment B. This phrase is open-ended; it cannot reasonably be read to refer
only to the list of products and tariff item number s listed in the Annex to the EC Schedule alongside
the narrative description. While recognizing that the European Communities notified a finite list of 14
tariff item numbers next to the description for flat panel display devices in the Annex to the EC

454 The Shorter Oxford Dictionary (2003), p. 1721.
455 The Shorter Oxford Dictionary (2003), p. 420.
456 We recall again that certain HS headin gs listed in Attachment A, Section 2 are identified by the
comment "For Attachment B". As a result, we understand that descriptions in Attachment A, Section 2 were
included in Members' schedules along with those narrativ e descriptions from Attachment B, in accordance with
the modalities set out in the ITA (see para. 7.337).
457 The European Communities argues that ITA partic ipants had a reason for doing so, in particular,
that it was necessary to do so because products described in Attachment A, Section 2 and Attachment B cut
across several HS headings, as the headings existed at the time of the HS1996, and it was not possible to agree
on a single appropriate heading to classify the product.

Schedule, there is no basis, on an analysis of the plain meaning of the language of the EC headnote, to
conclude that these tariff item numbers "exhaust" the FPDs product descriptions.
458
7.345 In summary, in the Panel's view, an initial te xtual analysis of the key terms and phrases
appearing in the EC headnote strongly supports the conclusion that pr oducts initially described in or
for Attachment B, which in the case of flat panel displays is the same as that reproduced in the Annex
to the EC Schedule, must be granted duty-free treat ment irrespective of where they are classified in
the EC Schedule.
7.346 Such a conclusion suggests that the product descriptions in Attachment B determine the scope
of the products for which the European Communitie s is required to extend duty-free treatment, and
not the tariff item numbers that are listed next to each of the product descriptions in the Annex to the
EC Schedule. The alternative interpretation, that the tariff item numbers define the scope of the
obligation, would appear to read out the phr ase "wherever the product is classified" from the
headnote.
7.347 The Panel stresses that, at this stage of its analysis, these observations regarding the
interpretation of the EC headnote are preliminary in nature. They are based on the plain meaning of
the text of the EC headnote, which is the starti ng point, but not the end point, for interpreting treaty
text.
(ii) The terms of the EC headnote in their context
7.348 The complainants have argued that the plain meaning of the terms in the EC headnote is
"straightforward"459, but that the ITA as context provides further support to interpret the EC
concession based on the FPDs narrative description. 460 T h e complainants argue that the ITA
provides relevant context for interpreting the EC Sc hedule within the meaning of Article 31(2)(b) of
the Vienna Convention , as an instrument which was made by one or more parties in connection with
the conclusion of the treaty. 461 In addition, the complainants ha ve discussed the meaning of the EC

458 To the extent the specific eight-digit CN codes listed next to the product description for FPDs were
to have some function, for instance to inform its interpretation of the ordinary meaning of the terms of the
narrative product description for FPDs, their function will be considered below at the time of our assessment of
the ordinary meaning of the FPDs product description.
459 See, for instance, United States second written submission, para. 94.
460 United States second written submission, paras. 59 and 94; Japan's second written submission, para.
18; Chinese Taipei's second written submission, para. 6. Chinese Taipei argues that the reference in the
headnote shows that all WTO Members have accepted th e ITA as related to the concessions made in their
Schedules (Chinese Taipei's second written submission, para. 8).
461 Complainants' responses to Panel question No. 2; Japan's response to Panel question No. 1. The
United States argues that the ITA is not the treaty at issue in this dispute; it considers the ITA is an "instrument"
related to the GATT 1994 (United States' response to Panel question No. 1). The United States argues that WTO
Members acknowledged the relationship between the ITA and the GATT 1994 by formally accepting the
modifications to the Schedules of those ITA participants who were WTO Members shortly after its conclusion.
Second, it submits that WTO Members acknowledged the ITA during the Mini sterial Declaration in Singapore
by taking note of and welcoming the agreement (United States' response to Panel question No. 2). Japan argues
the ITA is a "political declaration", but generally agrees with the United States that the ITA is not treaty text for
purposes of interpreting the EC concessions (Japan's response to Panel question Nos. 1, 2 and 5; Japan's second
written submission, para. 18). Japan considers that the substantive content of the ITA that was subsequently
included in the concessions of the EC Schedule should be given less interpretative weight (Japan's second
written submission, para. 18). Chinese Taipei submits th at the ITA was "accepted" by all WTO Members as an
instrument related to the Schedule of Concessions, as demonstrated by the fact that the ITA was negotiated and
agreed upon within the framework of the WTO during the Ministerial Conference in Singapore on 13 December

headnote in terms of modifications made to the EC Schedule, as well as concessions in other ITA
participants' Schedules of concessions.
7.349 The European Communities argues that the ITA is "closely related" to the schedules of ITA
participants, and as such, can be considered as cont ext in the sense of Article 31(2)(b) of the Vienna
Convention.
462 To the extent the ITA does provide relevant context to interpret the EC Schedule, the
European Communities argues, however that the ITA itself must be interpreted in accordance with the
Vienna Convention.463 The European Communities considers th at interpretation of the ITA does not
support the complainants' case, despite the fact that the complainants have limited their arguments to
"artificially selected ITA provisions".464
7.350 The Panel will address each of the possible sources of context, in turn.
The terms of the EC headnote and Annex to the EC Schedule read in the context of the ITA
Arguments of the parties
7.351 The complainants submit that various provisions in th e ITA, in particular, its preamble,
paragraphs 1 and 2 of the main text, and paragraphs 2, 3 a nd 5 of the Annex, support their
interpretation that products initially described in the Annex to the EC Schedule must be granted duty-
free treatment irrespective of where they are classified in the EC Schedule.
7.352 To the contrary, the European Communities argues that various provisions of the ITA
support an interpretation that the tariff item numbers in the Annex to the EC Schedule effectively
"exhaust" the commitments it has undertaken.
7.353 The parties' views with respect to these provisions are considered below.
The preamble and paragraph 1 of the ITA
7.354 The complainants argue that the language in the pr eamble and paragraph 1 of the ITA
support their interpretation of the EC headnote. In particular, the complainants refer to provisions
such as the aim of "achieving maximum freedom of world trade in information technology products";
that the ITA endeavours "to encourage the continue d technological development of the information

1996 (Chinese Taipei's second written submission, para. 8; Chinese Taipei's response to Panel question No. 2).
Chinese Taipei considers the reference in the chapeau to the ITA is an additional element that shows that all
WTO Members have accepted the ITA in connection with c oncessions in the Members' Schedules. In addition,
Chinese Taipei notes that modifications to the Schedules of Concessions for all ITA participants were
implemented in accordance with the "Procedure for Modification and Rectif ication of Schedules of Tariff
Concessions", to which all WTO Members were parties (Chinese Taipei's second written submission, para. 8).
462 European Communities' response to Panel question No. 1.
463 European Communities' responses to Panel questions Nos. 1 and 2. According to the European
Communities, the ITA is a "full-fledged" international treaty in the sense of Article 2(1) of the Vienna
Convention, as it clearly contains "unambiguously worded legal obligations" which are binding under public
international law on all the parties to the declaration. The European Communities considers it irrelevant that the
ITA is designated as a "ministerial declaration", noting th at the first paragraph of the preamble to the ITA uses
the term "agreement" (European Communities' response to Panel question No. 1). The European Communities
submits that, before relying on any part of the ITA as co ntext, one must first determine the meaning of that text
under the ITA (European Communities' response to Panel question No. 2).
464 European Communities' response to Panel question No. 2.

technology industry on a world-wide basis", and that trade regimes "should evolve in a manner that
enhances market access opportunities for information technology products".
465
7.355 The United States argues that these provisions reflect that the ITA participants contemplated
a "positive evolution in market access". This shows, the United States argues, that the ITA
participants were interested in ensuring that duty-free treatment would be maintained, even as
technology evolved and "a singl e digital product came to have additional purposes previously
assigned to other products". 466 The United States argues, the full provisions of the ITA, including
Attachment B, should be read consistently with the language of encouraging expanded trade and
technological development. In its view, if ever y advance in technology necessitated renegotiating,
economic operators would be discouraged from i nnovating, as doing so would compromise duty-free
access.467
7.356 Japan argues that the objectives embodied in the preamble and paragraph 1 of the ITA reflect
an attempt to encourage "technological development" and "evolution," not to create disincentives for
them. In its view, it would not be consistent with these objectives to reduce tariffs on certain products,
only to re-impose them on the basis of changes to products through technological development.468
7.357 Chinese Taipei argues that the cited provisions of the preamble or paragraph 1 of the ITA
establish that "trade regimes" should evolve in a way that enhances market opportunities. It argues
that nothing in those provisions indicates that the coverage provided under Attachments A and B
should be read "restrictively" or "strictly interpre ted", or that products should be excluded from the
scope of the ITA just because they are more technol ogically advanced than th ose that existed at the
time the ITA was negotiated.469
7.358 The European Communities , however, submits that the "artificially selected" ITA
provisions referred to by the complainants do not support their case. 470 It considers that the cited
provisions cannot be read in isolation from the rest of the ITA. 471 The European Communities recalls
that paragraph 1 of the ITA uses the word "should" and not "shall" and is, therefore, not mandatory.472
Further, the European Communities argues that paragraph 1 of the ITA also refers to "each party's
trade regime" rather than specifically to the interpretation of a given tariff concession. 473 The
European Communities disagrees that the reference to "trade regime" in paragraph 1 indicates that the
ITA covers the "now ever-evolving information technology industry". 474 The European Communities
considers that the Preamble and paragraph 1 of the ITA are important to understand paragraph 3 of the
ITA Annex475, which, it argues, is the only provision th at addresses questions regarding enlargement

465 See United States' first written submission, para. 28; United States' second written submission,
466 United States' first written submission, para. 107.
467 United States' second written submission, para. 61.
468 Japan's first written submission, para. 175.
469 Chinese Taipei's second written submission, paras. 15-16.
470 European Communities' response to Panel question No. 2.
471 European Communities' response to Panel question No. 2. The European Communities argues that
the ITA includes a "carefully nego tiated scope of products" and "detailed procedures for the review and
updating of that scope, including in the light of technological development."
472 European Communities' response to Panel question No. 2.
473 European Communities' response to Panel question No. 2 .
474 European Communities' comments on responses by complainants to Panel question No.101.
475 European Communities' response to Panel question No. 2.

of the product scope as a result of technological development.
476 In its view, the ITA Annex reflects
the notion that the information technology industry has a "rapidly advancing nature" and that the
language of the ITA was not intended to "cover every new product that may come along in the rapidly
developing, converging information technology sector".477
Paragraph 2 of the ITA and paragraph 2 of the ITA Annex
7.359 The complainants argue that paragraph 2 of the IT A and paragraph 2 of the ITA Annex
establish a "dual approach" for tariff liberalization, under which ITA participants agreed to bind and
eliminate duties for products that were either classi fiable under HS headings listed in Attachment A,
or were described within a list of products in Attachment B. 478 They consider that products could be
covered by either Attachment, or both. 479 In the complainants' view, paragraph 2 of the ITA
establishes the obligations, while paragraph 2(b) of the ITA Annex sets forth modalities for binding
and eliminating duties on ITA products. 480 The complainants submit that paragraph 2(b) of the ITA
Annex directs participants to attach an "annex" to their WTO Schedules, including all products in
Attachment B, and to "provide a list of the detaile d HS headings involved fo r products specified in
Attachment B".
7.360 Under paragraph 2 of the ITA and pa ragraph 2 of the ITA Annex, the United States argues
that each Member was instructed to specify the part icular HS headings that the Member considered
applicable at the time of implementing ITA concessions. The United States argues that the list of tariff
item numbers in the Annex to the EC Schedule (notifie d on the basis of Article 2 of the ITA) refer to
other descriptions in a separate part of the EC Schedule, which only indicate the types of products that
were considered to be covered at that time by its Attachment B concessions.481 Thus, the United States
considers that the codes beside the Attachment B product descriptions cannot limit the coverage to

476 European Communities' comments on responses by complainants to Panel question No. 101. The
European Communities considers that paragraph 1 of the ITA is more relevant to other provisions, such as those
addressing non-tariff barriers referred to in paragraph 3 of the ITA Annex, than to the consideration of other
parts of the ITA that establish the scope of tariff concessi ons. Similarly, it argues that the text of the preamble
of the ITA "can only be understood" as referring to the procedures provided for in the ITA for liberalization and
"future" expansion of trade in information technology (European Communities' response to Panel question
No. 2).
477 European Communities' first written submission, para. 15.
478 United States' first written submission, paras. 8 and 23; Japan's first written submission para. 143
(stating that the obligations in tariff concessions made pursuant to Attachment A and Attachment B are legally
independent of each other); Chinese Taipei's first wr itten submission, para. 24 (s tating that there are two
categories of products covered in the ITA: those which are listed in Attachment A to the Annex to the
Declaration and those which are listed in Attachment B to the Annex to the Declaration).
479 United States' first written submission, para. 23. In the United States' view, the dual approach
sought to ensure that classification developments woul d not undermine the goal of ensuring duty-free treatment
(United States' first written submission, para 29); United States' response to Panel question No. 10(b), para. 24;
Japan's first written submission, para. 263; Chinese Taipei's response to Panel question No. 10(b).
480 Complainants' response to Panel question No. 103. Japan argues that, since paragraphs 2(a) and
2(b) of the ITA define the scope of the participants' duty-free commitments by referring only to narrative
descriptions and HS headings without referring to the modalities set forth in paragraph 2 of the ITA Annex, the
main paragraphs have priority, and those in the ITA An nex are ancillary. Therefore, the Annex cannot "trump"
commitments in the main provisions. In its view, paragraph 2 of the ITA Annex should be read "within the
context of" paragraph 2(b) of the ITA itself. Chinese Taipei argues that Paragraph 2 of the ITA Annex cannot
add to or reduce the commitments resulting from paragraph 2(b) of the ITA, which aim to eliminate customs
duties and other duties and charges for those products listed in Attachment B (Chinese Taipei's response to
Panel question No. 103).
481 United States' responses to Panel question Nos. 7, 82 and 116.

Attachment B products classifiable in those codes.
482 The United States argues that, were the codes to
determine the coverage for those products descr ibed in Attachment B products, this would be
inconsistent with the text of the EC headnote (and headnotes included in other ITA participants'
Schedules) which requires duty-free treatment for a ll Attachment B products wherever they are
classified. It argues that the headnote would also be inutile as ITA participants could have bound
their headings at zero without including a headnote at all. 483 The United States further considers it
relevant that the Attachment B narrative product descriptions are generally not based on the HS.484
7.361 Japan argues that the requirement to include an "annex" including all products in
Attachment B means that the narrative descriptions of all Attachment B products were intended to be
included and to define the scope of the concession. 485 Japan considers that their inclusion confirms
the primacy of the language of the narrative produc t descriptions over the codes listed beside them. 486
Japan further considers that the reference in paragra ph 2(a) of the ITA to products that are "classified
(or classifiable)" confirms that the duty-free co mmitments pursuant to Attachment B cover all
products falling within the narrative description, rega rdless of their classification by national customs
authorities.487 Japan also argues that the use of approva l on a "consensus basis" makes more sense if
HS headings are treated as non-binding, since it is easier to reach consensus on something that "does
not have the potential to change or redefine the scope of the concession".488
7.362 Chinese Taipei explains that the terms "classified (or classifiable)" in paragraph 2 of the ITA
indicates that the "negotiators intended to define th e scope of products in Attachment A on the basis
of the HS" and that accordingly, the HS1996 plays a role in the interpretation of the scope of
concessions in relation to products listed in Attachme nt A. However, it argues that no such reference
can be found in paragraph 2(b) of the ITA which refe rs to "all products specified in Attachment B to
the Annex to this Declaration, whether or not they are included in Attachment A." 489 Chinese Taipei
argues that paragraph 2(b) of the ITA sets forth the ge neral commitment to eliminate customs duties
and other duties and charges with respect to the pr oducts described in narrative descriptions listed in
Attachment B. It considers that paragraph 2 of the ITA Annex sets out the implementation procedure
to be followed, namely specifying HS codes for the products listed in Attachment B. 490 By doing so,
it argues, ITA participants agreed that the scope of the concession would be defined by the relevant
product description and not the notified HS headings. 491 Thus, the HS headings would not restrict the
scope of the concession, as defined by the product descriptions. 492 Chinese Taipei argues that, while
paragraph 2(b) of the ITA defines the scope of th e tariff commitments, paragraph 2 of the ITA Annex

482 United States' response to Panel question No. 103; United States' comments to European
Communities' responses to Panel question No. 102.
483 United States' comments on European Communities' responses to Panel question Nos. 103-104.
484 United States' first written submission, para. 23.
485 Japan's response to Panel question No. 103.
486 Japan's response to Panel question No. 104.
487 Japan's response to Panel question No. 104. Japan submits that a reference to the HS is made only
for Attachment A products and not for Attachment B products.
488 Japan's response to Panel question No. 103. Japa n further argues that th e "review and approval"
process referenced in the chapeau of paragraph 2 of th e ITA Annex was based on the lack of any mechanism to
impose uniformity on how countries would illustrate the scope of the concessions. Notably, Japan points out that
ITA participants notified different headings, including HS tariff lines in some cases and national tariff lines in
others, or no headings at all (in the case of Japan). Japan argues that the uniformity, instead, comes from the use
of the same narrative descriptions to describe the concession (Japan's response to Panel question No. 103).
489 Chinese Taipei's response to Panel question No. 104.
490 Chinese Taipei's response to Panel questions Nos. 100 and 103.
491 Chinese Taipei's second written submission, para. 103.
492 Chinese Taipei's responses to the Panel's question No 7.

identifies the HS describing it as a tool for im plementing the concessions in each participant's
Schedule. Paragraph 2 of the ITA Annex cannot add to or reduce the co mmitments resulting from
paragraph 2(b) of the ITA. It explains that the commitments set out in the ITA are substantive and that
they aim at elimination of customs duties a nd other duties and charges with regard to, inter alia ,
products listed in Attachment B. In contrast, it ar gues, the commitments established in the Annex are
procedural, setting out the modalities in which the s ubstantive commitments are to be implemented.
Therefore, Chinese Taipei submits that the nature and scope of the commitments in the ITA and its
Annex are different and both must be read together.
493
7.363 The complainants argue that the codes are "illustrative" only. 494 Japan argues that the HS
headings notified in accordance with subparagraph 2(b)(ii) of the ITA Annex were intended "to
clarify as far as possible" what headings are include d in the narrative descriptions as "illustration" or
"limited context", rather than to narrow the sc ope or to exhaust the meaning of the narrative
description.495 Thus, the reference to "detailed HS head ings involved for products specified in
Attachment B" was intended to refer to headings that concern or relate to the narrative product
description, but not to define the scope of the concession. 496 Chinese Taipei argues that the codes
listed are "evidence" of how the European Comm unities considered the Attachment B concession
should be translated into the CN and the CCT. It argues, however, that this cannot substitute for the
determination of the common intention of all WTO memb ers. Therefore, it argues, an analysis of the
tariff item numbers listed beside the product description may only help to ascertain what the European
Communities considered to be included in the con cession without such list constituting an exhaustive
description.497
7.364 The European Communities argues the codes notified in accordance with paragraph 2 of the
ITA Annex, which were accepted by consensus and certified, represent a common agreement between
WTO Members498, and "exhaust" the Europ ean Communities' commitment with respect the narrative
product descriptions to which they relate. 499 The European Communities ar gues that the ITA through
paragraphs 2 of the main ITA te xt and paragraph 2 of its Annex directs members to extend duty-free
coverage to products under Attachment A, where there was no disagreement as to proper
classification of products described by HS headings, or products under Attachment B, where
participants did not oppose the inclusion of produc ts in the ITA, but disagreed with respect to
classification.
500 The European Communities considers th e descriptions in Attachment B as
"sometimes deliberately broad" and other times "d escribed very narrowly" in order to exclude
products, such as televisions.501 While noting that the language of the narrative product definitions is

493 Chinese Taipei's response to Panel question No. 103.
494 United States' response to Panel question Nos. 7 and 82 (para. 113); Japan's response to Panel
question No. 6; Chinese Taipei's response to Panel question No. 7.
495 Japan's responses to Panel question Nos. 103 and 107. Japan argues that the codes thus "can help
illustrate the range of products that fall within the narrative product descriptions". It considers that reading them
this way "preserve[s] the integrity of the Attachment B approach as going beyond the HS nomenclature"
(Japan's response to Panel question No. 116).
496 Japan's response to Panel question No. 103.
497 Chinese Taipei's response to Panel question No. 116.
498 European Communities' first oral statement, para. 21.
499 European Communities' response to Panel question No. 10(c), para. 31.
500 European Communities' first written submission, para. 18. The European Communities argues that
the ITA Annex, including its Attachments are integral parts of the ITA as a whole. This is also demonstrated by
the chapeau of paragraph 2 of the main text, which reads "[p]ursuant to the modalities set forth in the Annex ...".
It argues that there is no hierarch y between the main text of the ITA, the ITA Annex and the Attachments and
the provisions should be read holistically (European Communities' response to Panel question No. 104).
501 European Communities' first written submission, paras. 19-20.

not HS language per se, the European Communities argues that " it was explicitly foreseen that they
would be implemented by means of HS headings", in particular, by the fact that paragraph 2 of the
ITA Annex requires parties to identify the "detaile d HS headings involved for products specified in
Attachment B". Thus, it argues, the language of th e ITA including the Attach ments is influenced by
the HS.
502 The European Communities is of the view that , since reference is made to HS headings
both in the language of the ITA and in the ITA Annex, the ITA commitments had to be made
specifically in relation to products identified with their HS headings.503
7.365 The European Communities explains that it could be possible to interpret provisions of the
ITA such that the headnote provides for a "safety net" in respect of products defined in Attachment B
whereby there could, at least in principle, be othe r products than those identified with headings in the
EC Schedule that fulfil a given product definition. 504 Under this scenario, th e European Communities
contends that the product definitions in Attachment B of the ITA itself would arguably provide for a
separate obligation. Thus, on this basis there would formally be two sets of commitments pursuant to
Attachment B in the EC Schedule, one that comb ines the product descriptions and the headings next
to them and another that incorporates the product de scriptions in the ITA itself into the EC Schedule
as a "safety net". 505 In this safety-net scenario, a particular product may fall within a heading other
than those identified next to the description. However, the European Communities argues that it
would be necessary for a complainant to demonstrate through "overwhelming evidence" that there are
other such products, and therefore other head ings that would correspond to such a product
description.
506
7.366 The complainants reject the European Commun ities' allegation that the complainants are
required to demonstrate that there are headings ot her than those identified in the Annex to the EC
Schedule that would correspond to that definition, and that "overwhelming ev idence" would need to
be provided to prove that a specific product falling w ithin the terms of the description of FPDs is not
being given duty-free treatment.507
Paragraph 3 of the ITA Annex
7.367 The complainants argue that paragraph 3 of the ITA A nnex pertains to new or "additional"
products and does not limit the scope of existing concessions in the ITA. The United States argues

502 European Communities' response to Panel question No. 21.
503 European Communities' response to Panel question No. 21 (stating that "the HS96 and its rules are
therefore necessarily relevant and app licable also in relation to the commitments made pursuant to Attachment
A, Section 2 and Attachment B of the ITA"). In light of its view that the CN codes in the Annex to the EC
Schedule establish the binding obligations, the European Communities argues that the obligations should be
interpreted in accordance with the relevant language of those CN codes and the corresponding HS1996 rules
(European Communities' response to Panel question Nos. 21 and 112).
504 European Communities' responses to Panel question Nos. 3 and 5.
505 In light of the language contained in the headnote, the product descriptions in Attachment B would
arguably prevail over any discrepancies with the language in the Schedule. The European Communities argues
has not been able to identify any differences between the language used in the relevant parts of the Schedule and
the product definitions in Attachment B except for the identification of the specific headings in the EC Schedule
(European Communities response to Panel question No. 5, para. 18).
506 European Communities' second written submission, para. 19; European Communities' response to
question 1 from the United States during the second meeting.
507 United States' comments on European Communities' response to Panel question Nos. 100-103 and
questions 1-3 of the United States during the second meeting (rejecting the European Communities' argument
imposing a "strict burden of proof"); Japan's second oral statement, para. 64 (referring to European

that paragraph 3 of the ITA Annex pertains to "addi tional products", not to products that fall within
the terms of the concessions.
508 Japan argues that paragraph 3 is "largely irrelevant" to the present
dispute as it "simply states the obvious", i.e., that participants can meet again to increase the product
coverage.509 Japan considers that the European Comm unities has "dramatically overstated" the
interpretative significance of paragraph 3 of the IT A Annex regarding future negotiations based on its
view that the possibility for future negotiations "somehow narrows" the scope of the original
concessions.510 Chinese Taipei submits that the European Comm unities gives too much significance
and weight to the procedure for future negotiations envisaged in paragraph 3 of the ITA Annex.
Chinese Taipei submits that paragraph 3 addresses futu re negotiations and that it is thus "largely
irrelevant" to the determination of the existing pr oduct coverage of the ITA, because it pertains to
future potential negotiations. Paragraph 3, it argu es, "only, and logically, envisages a procedure to
extend the scope of the ITA that does not impose or ask for a restrictive interpretation of the products
covered by the ITA".511
7.368 The European Communities submits that the ITA Annex shows that the parties were well
aware of the rapidly advancing nature of the IT industry and considers that the ITA's language "was
not expected to cover every new product that may come along in the rapidly developing, converging
information technology sector".
512 To capture the object and purpose of the ITA, it argues, all these
parts have to be interpreted in such a way that a ll of them are given meaning and none of them is
rendered ineffective.513 In its view, paragraph 3 of the ITA Annex provides a mechanism for updating
the Annex and a framework for resolving the am biguities that convergence and rapid development
were expected to bring to customs classification in this sector.514
Paragraph 5 of the Annex
7.369 The complainants argue that paragraph 5 of the IT A Annex pertains to matters of
classification harmonization, and does not limit the scope of existing concessions in the ITA. The
United States argues that paragraph 5 of the ITA Annex simply establishes a mechanism for working
toward common classification of in formation technology products.515 Japan argues that paragraph 5
(and 6) of the ITA Annex would not have been necessary, had the implementation of the ITA,
including specifically the selection of tariff lines in the national tariff schedules, not been exclusively
or conclusively addressed under paragraph 2 of the ITA. 516 Chinese Taipei considers that paragraph
5 relates to "divergences in the classification of products for which commitments are already made".
Therefore, it argues that the procedure is "not aimed at 'enlarging' commitments but at removing
classification divergences for products which are already covered by existing concessions."517
7.370 Chinese Taipei is of the view that the negotiato rs of the ITA were "crystal clear" about the
difference between the issue of modification of product coverage and the issue of classification. 518
Chinese Taipei alleges that classification diverg ences would only happen after the scope of product

508 See, for instance, United States' response to Panel question No. 118.
509 Japan's second written submission, para. 20.
510 Japan's second written submission, para. 19.
511 Chinese Taipei's second written submission, para. 17.
512 European Communities first written submission, para. 15.
513 European Communities' first written submissions, para. 22.
514 European Communities' first written submission, para. 16.
515 United States' comments to European Communities' responses to Panel question No. 107.
516 Japan's response to Panel question No. 103.
517 Chinese Taipei's response to Panel question No. 109.
518 Chinese Taipei's comment on European Communities' response to Panel question No. 118.

coverage has been defined and, therefore, the manda tes of paragraph 3 and pa ragraph 5 "are different
and separate and should not be mixed up".
519
7.371 The European Communities argues that paragraph 5 of the ITA Annex addresses
divergences in product classification within the HS nomenclature, including those in Attachment B.520
Consideration by the Panel
Does the ITA qualify as context within the meaning of Article 31 of the
Vienna Convention?
7.372 Prior to considering the parties' arguments w ith respect to the substance of the ITA, the Panel
will address whether the ITA may serve as context within the meaning of the Vienna Convention to
interpret the concessions in the EC Schedule. In lig ht of the parties' unanimous views that the ITA
falls within Article 31(2)(b) of the Vienna Conve ntion, we will begin our analysis with this
provision.521
7.373 We recall that Article 31(2) of the Vienna Convention provides that:
"The context for the purpose of the interp retation of a treaty shall comprise, in
addition to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made
between all the parties in connection with the conclusion of the
treaty;
(b) any instrument which was made by one or more parties in
connection with the conclusion of the treaty and accepted by the
other parties as an instrument related to the treaty."
7.374 In addition to the text of the treaty, incl uding its preamble and annexes, Article 31(2)
mentions certain "agreements" and certain "instrum ents" that must also be taken into account as
context by a treaty interpreter. As the Panel in EC – Chicken Cuts observed:
"Regarding other agreements or instruments that may qualify under Article 31(2), the
International Law Commission stated that:
'[T]he principle on which [Article 31( 2)] is based is that a unilateral
document cannot be regarded as form ing part of the context [...]
unless not only was it made in connexion with the conclusion of the
treaty, but its relation to the treaty was accepted in the same manner
by the other parties. [...] What is proposed in paragraph 2 is that, for
purposes of interpreting the treaty, these categories of documents
should not be treated as mere evidence to which recourse may be had

519 Chinese Taipei's comment on European Communities' response to Panel question No. 118.
520 European Communities' first written submission, para. 17.
521 See United States' response to Panel question No. 2; Japan's response to Panel questions Nos. 1 and
2; Chinese Taipei's response to Panel question No. 2; European Communities' response to Panel question Nos. 1
and 2. We note, in addition, certain third parties agree th at the ITA provides relevant context: see, for instance,
Australia's third party oral statement, para. 12; China's third party oral statement, para. 6; Costa Rica's third
party submission, paras. 7-13.

for the purpose of resolving an ambiguity or obscurity, but as part of
the context for the purpose of arriving at the ordinary meaning of the
terms of the treaty.'
255 (emphasis added)
Further, a leading international law commentat or suggests that, in order to be related
to the treaty, and thus be part of the 'context' as opposed to the negotiating history,
which is dealt with in Article 32 of the Vi enna Convention, an instrument 'must be
concerned with the substance of the treaty and clarify certain concepts in the treaty or
limit its field of application. It must equally be drawn up on the occasion of the
conclusion of the treaty.'
256
The Vienna Convention refers to the concepts of "agreement" and "instrument" within the definition
of "treaty" above.
525 The statement by the International Law Commission above implies that a
qualifying "instrument" 526 may even be a unilateral "document" so long as it complies with the
additional requirements in Article 31(2)(b) that it w as "made in connection with the conclusion of the
treaty", and "its relation to the treaty was accepted in the same manner by the other parties". In light of
this, it is useful to consider whether the ITA is co ncerned with the substance of the treaty, clarifies
concepts in the WTO Agreement, or otherwise limits its field of application, and the extent to which it
was drawn up on the occasion of the conclusion of the treaty.
7.377 At a minimum, the ITA qualifies as an "instrument" for the purposes of Article 31(2)(b). 527
The ITA was proposed, drafted and agreed to by a subset of WTO Members and states or separate

522 Panel Report on EC – Chicken Cuts, paras. 7.153-7.154.
523 European Communities' response to Panel question No. 1.
524 Japan's response to Panel question Nos. 1 and 2.
525 Specifically, the definition in Article 2(1) seems to imply that an "agreement" may itself be
composed of one or more "instruments".
526 Panel Report on EC – Chicken Cuts, para. 7.154 (citing Ian Sinclair, The Vienna Convention on the
Law of Treaties, Manchester University Press, 2nd edition (1984), p. 129.
527 In US – FSC (para. 7.58), the panel consid ered the ordinary meaning of the term "instrument" as
follows:
"In this respect, we note that the word "instrument" has been defined by one dictionary as follows:
'Law. A formal legal document whereby a right is created or confirmed, or a fact recorded; a formal writing of
any kind, as an agreement, deed, charter, or record, drawn up and executed in legal form".[footnote omitted]
Similarly, a legal dictionary has defined the word "ins trument" to mean, inter alia, '[a] document or writing
which gives formal expression to a legal act or agreement, for the purpose of creating, securing, modifying or

customs territories in the process of acceding to the WTO. ITA partic ipants in turn modified their
WTO Schedules, which themselves form part of the WTO Agreement, following the conclusion and
signing of the ITA. In this sense, the parties r ecognized the ITA as an "instrument" as we understand
that term.
7.378 The ITA also represents an instrument "made by one or more parties in connection with the
conclusion of the treaty", where the term "parties" refers to WTO Members. The ITA (formally the
Ministerial Declaration on Trade in Information Technology Products) was agreed upon on 13
December 1996 by 15 WTO Members (counting the th en 15 EC member States as one), as well as
States or separate customs territories in the process of acceding to the WTO. Pursuant to the provisions
in the ITA, participants modified their schedules of concessions, which themse lves form part of the
WTO Agreement .
528 Because the original ITA participants expressly agreed to a process for
incorporating ITA-related concessions into their WTO Schedules, the Panel considers that the ITA was
clearly made "in connection with the conclusion of the treaty", as the WTO Members amended their
Schedules (which form part of the WTO Agreement) in order to give effect to the ITA.
7.379 The ITA also meets the requirement of having being "accepted by the other parties as an
instrument related to the treaty." At least thre e elements demonstrate this. First, the ITA was
recognized under paragraph 18 of the Singapore Mi nisterial Declaration of 13 December 1996 which
was adopted by all WTO Members:
"Taking note that a number of Members have agreed on a Declaration on Trade in
Information Technology Products, we welcome the initiative taken by a number of
WTO Members and other States or separate customs territories which have applied to
accede to the WTO, who have agreed to ta riff elimination for trade in information
technology products on an MFN basis ..."529 (emphasis added)
7.380 This express reference to the ITA in a WTO Mini sterial Declaration adopted by consensus by
all WTO Members constitutes, in our view, acceptance by WTO Members that the ITA is an
instrument related to the WTO Agreement.
7.381 Second, following the ministerial declaration, ITA participants modified their WTO
Schedules of concessions to reflect commi tments undertaken pursuant to the ITA. 530 No objections
were raised by other WTO Members within the thr ee-month period provided for such purpose to the
ITA-related modifications that were proposed by the European Communities 531 and these were,
therefore, certified by the Director General of the WTO in document WT/Let/156.
7.382 Third, the EC headnote of the Annex to th e EC Schedule, which forms part of the WTO
Agreement, makes express reference to the ITA, furthe r suggesting that the ITA is related to the WTO
Agreement.

terminating a right; a writing executed and delivered as the evidence of an act or agreement'.[footnote omitted]
Thus, the term 'legal instrument' in its ordinary meaning involves the existence of a formal legal text that has a
binding effect in determining the rights and/or obligations of the parties thereto, which in this case would be all
GATT 1947 contracting parties.[footnote omitted]"
528 The document in which the European Communities requested the modification of its schedule
pursuant to obligations assumed under the ITA contains a sentence that reads: "[p]lease find attached the
modifications to the EC Schedule ... which incorporate the commitments under the ITA " (emphasis added)
(/MA/TAR/RS/16, 2 April 1997).
529 WT/MIN(96)/DEC (18 December 1996) (Exhibit US-95).
530 See paras. 7.18 and 7.21 above.
531 G/MA/TAR/RS/16 (2 April 1997).

7.383 For the reasons discussed above, the Panel concl udes that the ITA qualifies as an instrument
that was made by one or more parties in connec tion with the conclusion of the treaty and accepted by
WTO Members as an instrument related to the treaty. The ITA may thus serve as context within the
meaning of Article 31(2)(b) of the Vienna Convention.
7.384 Finally, the Panel notes the point raised by the European Communities that the ITA, which
the European Communities considers is a full-fledged treaty, must be interpreted following the rules
of the Vienna Convention first, after which its te rms may be relied upon as context to interpret the EC
Schedule. The Panel has not addressed the question of whether the ITA is in its own right a treaty
within the sense of Article 2 of the Vienna Conventio n or any other relevant provision. We agree that
a treaty is to be interpreted accord ing to the rules codified in the Vienna Convention, which require
that a treaty be interpreted in good faith in accordan ce with the ordinary meaning to be given to its
terms. In our view, in considering the terms of the ITA as context, this will in any event involve
ascertaining the ordinary meaning of the terms of the ITA, regardless of its nature as a treaty or other
instrument. Hence, the Panel does not consider it necessary to reach a finding on whether the ITA is a
treaty or some other kind of agreement or declaration.
The EC headnote considered in the context of the ITA
7.385 The Panel will now consider whether the ITA informs its preliminary conclusion that
products initially described in the Annex to the EC Schedule must be granted duty-free treatment
irrespective of where they are classi fied in the EC Schedule. In so doing, it is appropriate to look at
the ITA in a holistic manner, ensuring that all the provisions in the ITA are given meaning and none
of them is rendered meaningless. Therefore, we wi ll analyse the ITA, looking not only at its main
provisions, but also at relevant provisions in the preamble, Annex and Attachments, as well as the text
that immediately precedes each Attachment.
7.386 We begin with the phrases in the preamble wh ich have been addressed by the parties and
paragraph 1 of the ITA. We note that the parti es have made reference to two phrases in the ITA
preamble that read " Desiring to achieve maximum freedom of worl d trade in information technology
products" and " Desiring to encourage the continued technological development of the information
technology industry on a world-wide basis" as well as the language in paragraph 1 of the ITA that
reads "Trade regimes should evolve in a manner to enhance market access opportunities of IT
products". The use of the word "desiring" at the be ginning of the sentences in the preamble and the
use of the word "should" in paragraph 1 reflect s that these opening provisions of the ITA represent
non-mandatory provisions. This language contrasts with the use of the word "shall" in ITA paragraph
2, which we discuss below. We do not see grounds, based on these provisions alone, to find that the
ITA mandates a particularly expansive approach to product coverage or to interpret the specific duty-
free commitments made pursuant to the ITA.
532 Indeed, we do not consider that these non-mandatory
provisions should bear in any specific way on the interpretative task before the Panel, namely
interpreting the meaning of the Annex to the EC Schedule, and the EC headnote in particular.
7.387 The non-mandatory nature to expanding the produc t coverage is reinforced and made explicit
by paragraph 3 of the ITA Annex, which provides as follows:

532 We see no basis, as the European Communities seems to argue in its response to Panel question
No. 2, to conclude that the non-mandatory provisions encouraging the evolution of the participants' trade regime
"in a manner to enhance market access opportunities of IT products" has more significance for work on non-
tariff barriers than on tariff concessions. We observe that both the tariff and non-tariff aspects are part of the
trade regime that should evolve in a manner that enhances market access oppor tunities for information
technology products.

"Participants shall meet periodically unde r the auspices of the Council on Trade in
Goods to review the product coverage specified in the Attachments, with a view to
agreeing, by consensus, whether in the light of technological developments,
experience in applying the tariff concessi ons, or changes to the HS nomenclature, the
Attachments should be modified to incorporate additional products, and to consult on
non-tariff barriers to trade in information technology products. Such consultations
shall be without prejudice to rights a nd obligations under the WTO Agreement."
(emphasis added)
7.388 This explicit provision for future review s of product coverage affirms that the ITA
participants were aware that the product coverage in the ITA was not comprehensive. The European
Communities argues that paragraph 3 of the ITA Annex is the mechanism envisaged by negotiators
for updating the product coverage of the ITA and part of the framework for resolving the ambiguities
that convergence and rapid developm ent were expected to bring to customs classification in this
sector.
533 We agree that paragraph 3 of the ITA Annex is about "updating" the product coverage and
including "additional" products in the ITA, as this is explicit in the text. However, nothing in that
provision suggests that paragraph 3 was envisaged as a way to deal with ambiguities arising from
convergence and rapid de velopment of products currently covered by the ITA, as the European
Communities seems to suggest.
534 Paragraph 3 of the ITA Annex discusses modification of the ITA
Attachments to "incorporate additional products". Since such incorporation would require the
"modification of the Attachments", we understand th e phrase "additional products" necessarily refers
to the inclusion of products which are not currently covered by Attachment A and Attachment B. It is
not possible to determine whether a product is an "additional" product within the parameters of
paragraph 3 of the ITA Annex wit hout first determining whether a pr oduct is covered by the terms of
an existing concession. Absent a common interpretation by the Members, and in the context of dispute
settlement proceedings, the Appellate Body has explained that determination of whether the terms of a
Member's Schedule describe a certain product is a qu estion that should be interpreted in accordance
with the rules of the Vienna Convention.535
7.389 For the above reasons, we conclude that para graph 3 of the ITA Annex does not pertain to
products described by the HS1996 headings that ar e listed in Attachment A, or specified in
Attachment B. Rather, paragraph 3 pertains to pro ducts that fall outside the current coverage of the
ITA. As a consequence, the Panel is of the view that paragraph 3 provides little guidance on the key
interpretative issue before it, namely whether IT A participants intended the products in and for
Attachment B to be liberalized "wherever the product is classified", as claimed by the complainants,
or to be "exhausted" by the tariff lines included in the Annex to their Schedules, as claimed by the
European Communities. For this reason, we see no need to consider this provision any further.
7.390 Turning to other provisions of the ITA, we recall that paragraph 2 of the ITA, provides as
follows:
"Pursuant to the modalities set forth in the A nnex to this Declaration, each party shall
bind and eliminate customs duties and other duties and charges of any kind, within
the meaning of Article II:1(b) of the Ge neral Agreement on Tariffs and Trade 1994,
with respect to the following:

533 European Communities' first written submission, paras. 14-15.
534 European Communities' first written submission, paras. 16-17; European Communities' response to
Panel question No. 2.
535 Appellate Body Report on EC – Computer Equipment, para. 106.

(a) all products classified (or classifiable) with Harmonized
System (1996) ("HS") headings listed in Attachment A to the Annex
to this Declaration; and
(b) all products specified in Attachment B to the Annex to this
Declaration, whether or not they are included in Attachment A;
through equal rate reductions of customs duties beginning in 1997 and concluding in
2000, recognizing that extended staging of reductions and, before implementation,
expansion of product coverage may be necessary in limited circumstances."
7.391 Paragraph 2 of the ITA is unequivocal in di stinguishing between the approach taken for
products classified (or classifiable) in HS1996 headi ngs "listed" in Attachment A, and for products
"specified" in Attachment B, "whether or not" they were also included in Attachment A. The chapeau
to the paragraph establishes that ITA participants "shall bind and eliminate customs duties and other
duties and charges of any kind, within the meanin g of Article II:1(b) of the General Agreement on
Tariffs and Trade 1994". Thus, we agree with the co mplainants' characterization of the ITA as an
instrument seeking to achieve it s objectives through a "dual appro ach". The obligation to liberalize
clearly applies both to all products classified (o r classifiable) in HS1996 headings "listed" in
Attachment A and to all those products "specified" in Attachment B, whether or not included in
Attachment A.
7.392 Paragraph 2 of the ITA states that such tariff elimination is "pursuant to the modalities set
forth in the Annex to this Declaration." In tu rn, the ITA Annex sets out "modalities" through which
the goals of paragraph 2 of the ITA would be achieved.
536 Paragraph 1 of the ITA Annex indicates
that each participant "shall incorporate the measures described in paragraph 2 of the Declaration" into
its WTO schedule of concessions, as well as in its applied national tariff schedule. When read
together with paragraph 2 of the main text and the chapeau to the ITA Annex 537, it is clear that the
modalities in the ITA Annex serve as a means to fulf il the main obligations that are established in
paragraph 2 of the ITA. In light of the defined rela tionship described in paragraph 1 of the Annex, we
will consider paragraph 2 of the main text of the ITA, in combination with paragraph 2 of the ITA
Annex, which relate to the product coverage set out in the Attachments. We see no basis to conclude
that the specific modalities in paragraph 2 of the ITA Annex (the "how") could modify or diminish the
obligations that are stated in a definitive manner in paragraph 2 of the ITA (the "what").538
7.393 Paragraph 2(a) of the ITA provides for the liberalization of all products "classified (or
classifiable)" in HS1996 headings listed in Attachme nt A, which is subdivided in two sections. The

536 This is evident from the fact that the ITA Annex is entitled "Modalities and Product Coverage".
537 The chapeau provides that "[a]ny Member of the World Trade Organization, or State or separate
customs territory in the process of acceding to the WTO, may participate in the expansion of world trade in
information technology products in accordance with the following modalities:"
538 We find textual basis for this in paragraphs 1 and 2 of the ITA Annex. We note that paragraph 1 of
the ITA Annex instructs participants that are WTO Members to "incorporate the measures described in paragraph
2 of the Declaration" into its schedule. Non-members are instructed to implement them "on an autonomous basis,
pending completion of its WTO accession, and shall incor porate these measures into its WTO market access
schedule for goods". Paragraph 2 of the ITA Annex continues with the phrase "[t]o this end...". Textually,
therefore, these provisions define the relationship between paragraph 2 of the main ITA text and paragraph 2 of
its Annex. In addition, we note that one phrase of paragraph 2(b) of the ITA Annex addresses binding and
eliminating "customs duties on information technology products", leaving out the reference in paragraph 2 of
the ITA to the "other duties and charges" as provided in Article II:1(b) of the GATT 1994. Clearly, a truncated
reference in the modalities is not meant to strike out the broader obligation elaborated in paragraph 2 of the ITA.

notion of "classified (or classifiable)" expressly re lates to the 1996 version of the HS. Following the
main text and modalities provisions in the Annex, Attachment A, Section 1 includes several HS1996
headings, subheadings and ex-outs in a left-hand column
539, and HS based descriptions for the listed
headings and subheadings in a right-hand column, as well as more specific descriptions that were
negotiated for the ex-outs. 540 Similarly, Attachment A, Section 2, which is entitled "Semiconductor
manufacturing and testing equipment and parts thereof", includes HS1996 subheadings or ex-outs in
left-hand columns541, and HS based descriptions for the listed subheadings in a right-hand column, as
well as more specific descriptions that were negotiated for the ex-outs. 542 Section 2 also indicates
whether a particular "HS Code," and its associated "Description," is "For Attachment B".543
7.394 In contrast, paragraph 2(b) of the ITA pr ovides for the liberalization of all products
"specified" in Attachment B "whether or not they are included in Attachment A". The choice of
language in paragraph 2(b) of the ITA, in particular the use of the term "specifi ed", indicates that this
latter provision referred to something other than products classified (or classifiable) in the HS
headings listed in Attachment A.
544
7.395 Attachment B strictly contains product d escriptions and makes no reference to HS1996
headings, subheadings or ex-outs. The descriptions are, for the most part, not taken from the HS1996
and are, generally speaking, not based on HS language (this is certainly true for the products at issue
in this dispute). 545 A chapeau in the Annex that pr ecedes the Attachments indicates that
"Attachment B lists specific products to be covered by an ITA wherever they are classified in the
HS".546 A second chapeau that immediately precedes A ttachment B in the Annex states "Positive list
of specific products to be covered by this agreemen t wherever they are classified in the HS". This
latter phrase clearly reinforces the view that the intention is to cover a "positive list of specific
products"... "wherever they are classified in the HS ". Nothing in this phrase suggests that specific
tariff item numbers would define the specific products that follow.
7.396 It appears clear, therefore, that ITA drafters felt the need to resort to a set of product
descriptions that were not generally based on the HS. Otherwise, they could have resorted to the same
terminology used in paragraph 2(a) , or have omitted paragraph 2(b) a ltogether. As will be explained
below, ITA participants were required to include the se descriptions in their Schedules. In the Panel's
view, this explicit recognition of a limited role for th e HS in the context of Attachment B is consistent

539 The HS headings and subheadings, and whether or not they are ex-outs, are indicated in three left-
hand columns, labelled "HS96".
540 We recall that the right-hand column to Attachment A , Section 1 is labelled "HS description". A
headnote that precedes the ITA Attachments indicates that "Attachment A lists the HS headings or parts thereof
to be covered".
541 The left-most column indicates whether the HS subh eadings is an ex-out or not, while the adjacent
column, labelled "HS Code" indicates the HS subheading at the six-digit level.
542 The third column to Attachment A, Section 2 is labelled "Description" and includes the HS
description for the indicated HS subheading.
543 The right-most column to Attachment A, Section 2 is labelled "Comments".
544 The verb "to specify" is defined inter alia as "1 verb intrans. Speak or treat of a matter etc. in detail;
give details or particulars. (...) 2 verb trans. Mention or name (a thing, that) explicitly; state categorically or
particularly." The Shorter Oxford Dictionary (2003), p. 2946.
545 Some descriptions in Attachment B indeed make reference to HS codes. But this seems to be the
exception that confirms the rule.
546 ITA, page 6. The full text of the chapeau reads: "There are two attachments to the Annex.
Attachment A lists the HS headings or parts thereof to be covered.
Attachment B lists specific products to be covered by an ITA wherever they are classified in the HS."

with, and underlines, a broader intention that th e products specified therein are to be covered
"wherever they are classified in the HS".
7.397 We next consider paragraph 2 of the ITA A nnex, which addresses the implementation of the
main obligation set forth in paragraph 2 of the ITA ma in text. We recall that paragraph 2 of the ITA
Annex provides:
"To this end, as early as possible and no later than 1 March 1997 each participant
shall provide all other participants a docu ment containing (a) the details concerning
how the appropriate duty treatment will be provided in its WTO schedule of
concessions, and (b) a list of the detailed HS headings involved for products specified
in Attachment B. These documents will be reviewed and approved on a consensus
basis and this review process shall be comp leted no later than 1 April 1997. As soon
as this review process has been completed for any such document, that document
shall be submitted as a modification to the Sc hedule of the participant concerned, in
accordance with the Decision of 26 March 1980 on Procedures for Modification and
Rectification of Schedules of Tariff Concessions (BISD 27S/25).
(a) The concessions to be proposed by each participant as modifications to its
Schedule shall bind and eliminate all customs duties and other duties and charges of
any kind on information technology products as follows:
(i) elimination of such customs duties shall take place through
rate reductions in equal steps, except as may be otherwise agreed by
the participants. Unless otherwise agreed by the participants, each
participant shall bind all tariffs on items listed in the Attachments no
later than 1 July 1997, and shall make the first such rate reduction
effective no later than 1 July 1997, the second such rate reduction no
later than 1 January 1998, and the third such rate reduction no later
than 1 January 1999, and the elimination of customs duties shall be
completed effective no later than 1 January 2000. The participants
agree to encourage autonomous el imination of customs duties prior
to these dates. The reduced rate should in each stage be rounded off
to the first decimal; and
(ii) elimination of such other duties and charges of any kind,
within the meaning of Article II:1(b) of the General Agreement, shall
be completed by 1 July 1997, except as may be otherwise specified in
the participant's document provided to other participants for review.
(b) The modifications to its Schedule to be proposed by a participant in order to
implement its binding and elimination of customs duties on information technology
products shall achieve this result:
(i) in the case of the HS headings listed in Attachment A, by
creating, where appropriate , sub-divisions in its Schedule at the
national tariff line level; and
(ii) in the case of the products specified in Attachment B, by
attaching an annex to its Sc hedule including all products in

Attachment B, which is to specify the detailed HS headings for those
products at either the national tariff line level or the HS 6-digit level.
Each participant shall promptly modify its national tariff schedule to reflect the
modifications it has proposed, as soon as they have entered into effect."
7.398 In general terms, paragr aph 2 of the ITA Annex sets out a series of steps for participants to
prepare, review, and assess the specific commitments by the ITA participants, and to then modify
their WTO schedules of concessions. The chapeau of paragraph 2 of the ITA Annex provides inter
alia that "[...] each participant shall provide all othe r participants a document containing (a) the details
concerning how the appropriate duty treatment will be provided in its WTO schedule of concessions,
and (b) a list of the de tailed HS headings involved for pr oducts specified in Attachment B".
547 One
dictionary definition of "involved" is "contained by implication, implicit". 548 In this context, we
understand that ITA participants were expected to pr esent a list of HS headings they considered to be
associated with the products in Attachment B. Paragraph 2 thereafter envisaged that the proposed
amendments to ITA participants' Schedules would go through a "review and approval" process, before
1 April 1997, and would then follow the steps for incorporation into each ITA participant's schedule
through the 1980 procedures. 549 Thus, ITA participants were given the responsibility of ensuring that
their counterparts in the ITA had correctly prepared a draft modification to their Schedule before such
amendments were formally submitted for consideration by the WTO membership at large.
7.399 Paragraph 2(a) of the ITA Anne x then defines the manner in which ITA participants would
eliminate the tariffs and "other duties and charges". We do not consider that these provisions bring much
clarity to the interpretation of the EC headnote. On the other hand, paragraph 2(b) of the ITA Annex is
of particular importance to interpret the concessions in the Annex to the EC Schedule and to clarify the
meaning of the EC headnote. This provision elaborates on the "dual approach" introduced by paragraph
2 of the ITA main text, and specifies the elements that would need to be contained in the modifications
that participants would make to their schedules.
7.400 Paragraph 2(b)(i) of the ITA Annex directs partic ipants to create sub-divisions in their WTO
Schedules reflecting their national tariff line level in order to liberalize the HS headings listed in
Attachment A. The parties do not dispute this appr oach. However, this approach does not inform our
interpretation of the EC headnote. Paragraph 2(b)( ii) of the ITA Annex, on the other hand, instructs
participants to attach an "annex" to their resp ective WTO Schedules which shall include "all products
in Attachment B" and "specify the detailed HS headin gs for those products at either the national tariff
line level or the HS 6-digit level."
7.401 On a plain reading of paragraph 2(b)(ii) of th e ITA Annex, the identification of HS Headings
is clearly considered an important requirement in re lation to the products specified in Attachment B.
Paragraph 2(b)(ii) explicitly gives participants th e option to specify what they consider to be the
relevant headings, either at "the national tariff line level or the HS 6-digit level". Unlike the approach
taken for Attachment A products, we observe that there is no requirement to create sub-divisions in the
Schedule at the national tariff level to liberalize products specified in Attachment B.
7.402 This difference in approaches must be given m eaning. While paragraph 2(b)(ii) of the ITA
Annex requires specification of HS headings for At tachment B products, in our view, the absence of
any requirement to harmonize the particular subhead ings or national tariff lines to be specified for a

547 ITA Annex, para. 2, Chapeau.
548 The Shorter Oxford Dictionary (2003), p. 1419.
549 See para. 7.18 above.

particular Attachment B narrative description dem onstrates that the descriptions were intended to
govern in determining product c overage, and not the HS subhead ings or national codes that
participants might have selected. The products th at shall be liberalized are those "specified" in
Attachment B, independently of the headings or cod es that participants might have considered to be
"involved" with a particular narrative description. Had the ITA participants intended that the tariff
lines would define the concession, given that no HS headings correspond fully with the Attachment B
narrative descriptions, the requirement to create sub-di visions in the Schedule at the national tariff
level would have been a key requirement. Instead , the provisions suggest that the ITA sought to
liberalize a specific set of products that all participants could agree to, embodied in Attachment B,
even if they could not agree on where to classify them under the HS.
7.403 We recall the European Communities' argument th at the HS headings to be included in a
schedule, which ITA participants would self-designa te, serve to determine the coverage of the
concession. Because the tariff headings (either based on HS six-digit codes or national nomenclature)
set the boundaries of the concession, the European Communities argues that the codes therefore
"exhaust" the headnote by specifying the relevant h eadings. We will now consider the implications of
this argument in light of paragraph 2(b) of th e ITA Annex. In the alternative, the European
Communities appeared to accept that the product descriptions could in principle provide for a separate
obligation, such that the product descriptions in the ITA alone could provide the basis for the
concession. However, the European Communities ar gues that a complainant would be required to
demonstrate through "overwhelming evidence" that the products did not fall under the particular
headings that had been notified by the European Communities.
550
7.404 Under the terms of paragraph 2(b) of the ITA Annex, one participant could have chosen the
option to specify headings at the "HS 6-digit level" next to a particular narrative description, while
another participant could have chosen to identify a different subheading, or could have designated an
eight-digit national code next to the same product description. Such eight-digit tariff code could
pertain to the subheading listed by other ITA pa rticipants (e.g., as a breakout incorporating the
subheading as its first six digits), or it could pertain to an altogether different subheading. We observe
that the logical consequence of the European Comm unities' "exhaustion" approach is that different
ITA participants would have had liberalized more or fewer products, depending on which HS codes
were included in their Attachment B-related secti on of their schedules. Under this approach ITA
participants could have disparate commitments, gi ven that either HS six-digit codes or the more
detailed national nomenclatures could be used. An ITA participant notifying an HS six-digit code
would be committing to fully liberalize the entire HS Subheading, whereas a ITA participant notifying
an eight-digit code in the same subhead ing would only be committing to liberalize part of the same
HS Subheading. In our view, the two options prov ided under paragraph 2(b)(ii) do not allow for an
interpretation that the codes determine the preci se concession and "exhaust" the headnote. Permitting
such variations in coverage w ould have allowed Members to carve -out or redefine for themselves
what products would be covered by their concessions under Attachment B, which would run contrary
to the objective established in paragraph 2(b) of the main ITA text, i.e., to bind and eliminate duties
for all those products specified in Attachment B. In our view, the European Communities'
interpretation fails to explain how the divergen ces that would arise under the "exhaustion" theory,
with the different codes notified by different ITA participants, would be co nsistent with the clear
intention to cover "all products specified in Attachment B".
7.405 The question arises why ITA participants were required to specify detailed HS headings in
connection with Attachment B narrative descriptions, if the codes did not define the scope of the

550 European Communities' second written submission, para. 19; European Communities' response to
question 1 from the United States during the second meeting.

obligation. We find further support for our interp retation of the relevance of the specified HS
headings or national codes in paragraph 5 of the ITA Annex, which provides:
"Participants shall meet as often as ne cessary and no later than 30 September 1997 to
consider any divergence among them in classifying information technology products,
beginning with the products specified in Attachment B. Participants agree on the
common objective of achieving, where appropriate, a common classification for these
products within existing HS nomenclature, giving consideration to interpretations and
rulings of the Customs Co-operation Council (also known as the World Customs
Organization or "WCO"). In any instance in which a divergence in classification
remains, participants will c onsider whether a joint suggestion could be made to the
WCO with regard to updating existing HS nomenclature or resolving divergence in
interpretation of the HS nomenclature." (emphasis added)
7.406 This provision directs ("shall") participants to meet following the modifications to their
Schedules to consider divergences in classification, beginning with, as stated, divergences related to
products specified in Attachment B. It is appare nt that the ITA negotiators foresaw different ITA
participants classifying some of the covered produc ts in different ways, and established a mechanism
for trying to reduce such divergences in classification.
551 Paragraph 5 of the ITA Annex confirms that
ITA participants could not agree on the appropriate HS classification of some of the IT products they
wanted to liberalize, even if they agreed on wh at the description of those products was (hence their
inclusion in Attachment B). 552 These included products in Attachment B, plus those identified in
Attachment A, Section 2, having the comment "[f]or Attachment B".
7.407 If we again turn to the "exhaustion" interpretation by the European Communities, we note
that, had the HS codes notified by each ITA particip ant been intended to have the effect of defining
the scope of the commitments undertaken by that IT A participant (therefore "exhausting" them), the
meetings stipulated in paragraph 5 would essentia lly involve a renegotiation of commitments. Yet,
there is no reference in this pa ragraph to amending the schedules of concessions as a result of the
discussions nor to considering the tariff treatment of Attachment B products in the participants'
schedules. On the contrary, the emphasis throughout the entire paragraph is on the "HS classification"
of those products. Paragraph 5 even encourages participants to suggest updates of the nomenclature to
the WCO, which clearly cannot modify the concessi ons in participant's schedules. Moreover, tariff
treatment is not explicitly nor implicitly mentioned in this paragraph. In the Panel's view, therefore, it
is clear that ITA paragraph 5 is concerned with harmonizing classification practices amongst
participants, and is not concerned with renegotiating tariff concessions. 553 As such, it is inconsistent
with the European Communities' "exhaustion" appr oach, and informs our view that the scope of
Attachment B-related commitments is determined by the product descriptions and not by the notified
tariff item numbers.

551 In this respect, we note that ITA participants notified different HS subheadings or codes within their
domestic nomenclatures in connection with the Attachment B narrative descriptions that were incorporated into
their Schedules. The Schedules of other ITA partic ipants are discussed in further detail in paras 7.424 et seq.
below.
552 The European Communities holds a similar view, having stated that Attachment B includes some
products "on the classification of which the participants could not, at least imme diately, agree but did not
oppose their inclusion" (European Communities' first written submission, para. 18).
553 We note as well that, under the exhaustion theory by the European Communities, ITA participants
would have reasonably been expected to have an interest in reviewing not only the HS headings notified, but
also the classification practice concer ned prior to approving the draft ITA related amendments. It would have
been otherwise impossible to determine whether "all" products specified in Attachment B had been fully
liberalized as mandated by paragraph 2 of the ITA. We observe that there is no such a provision in the ITA.

7.408 Although there are several provisions in the ITA which remain unaddressed in our analysis,
we observe that we have covered all those raised by the parties in their arguments. We do not
consider it necessary to address the remaining provisions , as they do not appear to be relevant to our
task.
7.409 Taking into account our analysis of the provisions in the ITA so far, and looking at them in a
holistic manner, the Panel is of the view that the drafters of the ITA considered that the traditional
approach of listing HS codes was inadequate to address the full scope of the product coverage that
was intended by participants to the ITA, in par ticular given the then prevailing divergences in the
classification of products in and for Attachment B. Consequently, ITA participants agreed to
implement their commitments though a "dual" appro ach that included binding and eliminating duties
for both: (i) products classified or classifiable in HS codes listed in Attachment A, and (ii) products
specified in Attachment B. While the appro ach under Attachment A is straightforward and
"traditional" in WTO terms, ITA participants were directed under Attachment B to eliminate duties on
all products "specified' in that Attachment. This approach was taken because ITA participants could
not agree on precise headings for the products identified through the narrative descriptions in
Attachment B. Since the narrative descriptions mu st determine the scope of coverage of those
products, duty-free treatment must be extended to pr oducts specified in Attachment B "wherever they
are classified". Otherwise, ITA participants w ould have ended up with diverging product coverage,
which runs contrary to the intent to provide d duty-free coverage for specified "products" in
Attachment B, and not headings of tariff lines under which products are classified. We explained that,
if the "exhaustion" interpretation were correct, the potentially significant differentiation in the scope
of commitments undertaken by ITA participants would be a significant feature of ITA-related
concessions. An intention to create such a differen tiated approach to commitments should be clearly
evident from the language in the ITA. However, it is not. We also do not see a basis to conclude that a
unique or elevated burden of proof would be requir ed to demonstrate that a product fell within the
scope of a particular concession that is defined by the narrative description.
7.410 Paragraph 3 of the ITA Annex provides an avenue to negotiate the inclusion of "additional"
products. However, the determination of whether a product is in fact currently covered, would involve
an assessment of the existing concession pursuant to the ITA, including the narrative descriptions in
and for Attachment B. We recall again our view that, ITA negotiators foresaw different ITA
participants classifying some of the covered produc ts in different ways, and established a mechanism
for trying to reduce such divergences in classification.
7.411 The Panel, therefore, considers that the ITA provisions discussed above inform our
preliminary view based on the text of the headnote that products described in or for Attachment B
must be granted duty-free treatment irrespective of wh ere they are classified in the EC Schedule. In
other words, the product descriptions in and for Attach ment B should be considered and interpreted in
determining which products would receive duty-free treatment.
The terms of the EC headnote and Annex to th e EC Schedule considered in the context of
other sections of the EC Schedule
7.412 In their discussions regarding the meaning of th e EC headnote and the concessions at issue in
this dispute, the complainants have discussed several aspects of the EC Schedule, including
modifications made to the Annex to the EC Sche dule pertaining to the narrative descriptions for
"Computers" and STBCs, in an effort to explain thei r interpretation of the EC headnote, in the context
of the provisions of the ITA. The complainants consider these actions by the European Communities
confirm their view that the tariff item numbers liste d in the Annex to the EC Schedule are of limited
relevance to determine the scope of coverage of the narrative descriptions. We consider these aspects

of the EC Schedule below, in view of our earlie r assessment of the EC headnote and the ITA as
context, and in view of the parties' discussions on the matter, to see whether they shed light on our
understanding of the EC headnote.
Do the modifications made to certain ITA-related concessions in the EC Schedule
inform our interpretation on the relevance of the tariff item numbers?
7.413 The complainants have discussed two particular modifications made to the EC Schedule in
connection with ITA-related commitments. On e included a 1998 communication of the tariff item
numbers listed in the Annex to the EC Schedule via G/MA/TAR/RS/47 in relation to the narrative
descriptions for "Computers etc." and "Network equipment" (the "1998 notification").
554 The
complainants additionally referred to the European Communities' 2000 notification to include tariff
item number 8528 12 91 next to the STBCs narrativ e description in the Annex to the EC Schedule
(the "2000 notification").555
Arguments of the parties
7.414 In response to a question from the Panel 556, the European Communities argued that
communication of an additional code in 2000 in c onnection with the narrative description for STBCs,
supports its view that the codes next to the narra tive description indeed exhaust the EC headnote. It
argues that the codes notified by the European Communities in 1997 and then reviewed in 1998 were
accepted by consensus and certified in accordance w ith the procedures of paragraph 2 of the ITA
Annex and paragraph 2 of the ITA Implementing Deci sion, and exhausted the EC's commitment with
respect to set top boxes which have a communicati on function. However, it argues, the code notified
in 2000 (tariff item number 8528 12 91 (now 8528 71 13)) served to "enlarge" its commitment for set
top boxes which have a communication function. It notes that through a communication notified along
with the modification, the European Communities ef fectively recognized that products classifiable in
this new code would also qualify for duty-free treatment.
557 The European Communities argues,
however, that a parallel cannot be drawn between its 2000 notification and a separate 1998
notification (also referred to by the Panel in qu estion 109 to the European Communities) made in
respect of "Computers etc." and "Network equipmen t". It argues that the 1998 notification resulted
from the European Communities' impl ementation of the classification approach reflected in the WCO
opinion on the classification of PCTV products. 558 Under this modification, the European
Communities argues that it harmonized its classi fication approach for multimedia computers
(computers with television and other multimedia capabilities such as audio, video,
telecommunication) under HS heading 8471, instead of HS headings 8471, 8528 and 8543, as had
been done formerly. To do so, the European Comm unities argues that it transferred classification of
the products (with duty rates unchanged) to the ne w heading, as specified by the WCO. In its view,
this modification (reflected in the 1998 notifica tion) did not extend duty-free treatment available

554 Complainants' responses to Panel question No. 109; United States' comment to European
Communities' response to question by the Panel No. 109.
555 United States' first written submission, para 45 (Exhibit US-26); Japan's first written submission,
556 European Communities' response to Panel question No. 109.
557 European Communities' response to Panel question No. 109. The European Communities argues
that the exhaustion of the commitment on STBCs in 1997 and the communication of a new code for another
group of products in 2000 are thus two independent processes which do not affect one another.
558 European Communities' response to Panel question No. 109; WCO Classification Opinion
concerning the classification of PCTV in subheading 8471.49, as discussed and adopted by the HS Committee
during its 19th and 22nd sessions (Exhibit EC-125).

under the ITA to a new group of products, but were merely consequential changes resulting from a
reclassification decision.
559
7.415 The complainants dispute the European Communiti es characterization of these two
modifications to the EC Schedule. Regardless of the fact that one change was brought about by
decisions of its own customs authorities, whereas the other resulted from the implementation of a
WCO classification opinion, the United States argues that both reflect "classification" changes that
are incompatible with the European Communities' exhaustion theory. The United States argues that
the 2000 notification can only be understood to me an that products included in tariff item number
8528 12 91 were among the pr oducts meeting the description of STBCs. However, it argues, if the
headnote was "exhausted", there would be no reaso n for the European Communities to modify the
codes listed in the table.560
7.416 Japan considers the European Communities' argum ent that it "enlarged" its concession for
STBCs to be inconsistent with the fact that c oncessions made in the WTO do not change despite
customs classifications changes. Japan argues that such changes cannot modify the scope of the WTO
concessions as this would fundamentally undermine the stability and predictability of the rights and
obligations of Members under the WTO Agreement.561
7.417 Chinese Taipei considers the statement by the European Communities in the 2000
notification that it had "decided to join some other ITA participants in classifying certain types of ITA
set-top boxes under HS sub-heading 8528 12" to be inconsistent with the exhaustion theory. 562
Chinese Taipei submits that procedures under paragr aph 5 of the ITA are not aimed at "enlarging"
ITA commitments, but rather at removing classifica tion divergences for products already covered by
existing ITA concessions. Had the European Commun ities intended to unilaterally "enlarge" its
commitment, it argues, the European Communities would not have notified the modification to its
Schedule related to ITA products, nor specified that the corresponding codes to Attachment B
description of "set-top boxes" had been replaced. Instead, it argues, the European Communities could
have simply modified its national tariff code to implement its obligations under the ITA.
563
Consideration by the Panel
7.418 The parties' discussion regarding the 1998 and 2000 notifications centre on documents issued
in conjunction with changes made to the EC Schedule.564

559 European Communities' response to Panel question No. 109.
560 United States' comment to European Communities' response to Panel question No. 109 (The United
States notes that, in both cases, the European Communities maintained the duty-free treatment for the product in
question, notwithstanding the fact that the subheadings in which it considered the product classified were not
originally included in the Annex to the EC Schedule).
561 Japan's response to Panel question No. 109; Japan's comment to European Communities' response to
Panel question No. 109.
562 Chinese Taipei's comment to European Communities' response to Panel question No. 109.
563 Chinese Taipei's comment to European Communities' response to Panel question No. 109.
564 Although the parties did not themselves identify th ese documents in the cont ext of discussing the
Annex to the EC Schedule, the complainants raised the issue of the 2000 notification in the context of discussing
their claims concerning STBCs, and they discussed the 1998 notification in response to a question put to the
European Communities by the Panel. The explanations in the documents discussed by the parties in connection
with the 1998 notification were not incorporated into the EC Schedule at the time of certification (see document
WT/Let/261). Practically all the contents of the 2000 notification, including the explanations by the European
Communities which have been referred to by the par ties, were certified on 19 March 2010 in document

7.419 At the time of the 1998 notification made inter alia in respect of "Computers etc." and
"Network equipment", the European Communities circulated the following communication, in
document G/MA/TAR/RS/47 of 10 February 1998:
"I attach herewith a notice concerning r ectifications and modifications to our
Schedule CXL related to ITA products (5 pages).

RECTIFICATION AND MODIFICATIONS OF SCHEDULES
SCHEDULE CXL - EUROPEAN COMMUNITIES
INFORMATION TECHNOLOGY AGREEMENT (G/MA/TAR/RS16)
CORRIGENDUM

Following a review of the documents s ubmitted under G/MA/TAR/RS/16 of 2 April
to incorporate in Schedule CXL the commitments under the Information Technology
Agreement, the attached corrections should be made.

4. The World Customs Organisation has debated the classification of multimedia
personal computers and the general view, wh ich prevailed, was that such products no
matter what their principal function are to be classified within 8471. The EC has
implemented this classification opinion by transferring the products concerned,
together with their accompanying rates of duty, from 8528 and 8543 to 8471.
The consequential changes for the ITA Sc hedule means that the all references
8471.30.00, 8471.41.90, 8471.49.90, 8471.50, 8528.12.10, 8528.13.10 and
8543.89.17 should be deleted and replaced by the following:

5. As a result of the above the following changes should be made to the tariff
references against product descriptions in Attachment B:
Computers etc. Replace by following reference: 8471.10.90 (unchanged), 8471 30 10,
8471.30.91, 8471.30.99, 8471.41.30, 8471.41.91, 8471.41.99, 8471.49.30,
8471.49.91, 8471.49.99, 8471.50.30, 8471.50.91, 8471.50.99
Network equipment replace 8471.50.90 by 8471.50.99"
565 (footnotes omitted)
7.420 At the time of the 2000 modification made in respect of STBCs, the European Communities
circulated the following communication, in document G/MA/TAR/RS/74 of 15 December 2000:
"I attach herewith a notice concerning r ectifications and modifications to our
Schedule CXL related to ITA products.

WT/Let/667. We also note the Appellate Body's statement that "nothing in the DSU limits the faculty of a panel
freely to use arguments submitted by any of the parties -- or to develop its own legal reasoning -- to support its
own findings and conclusions on the matter under its consideration." Appellate Body Report on
EC - Hormones, para. 156. See also Appellate Body Report on Korea – Dairy , para. 138; Panel Report on
Egypt – Steel Rebar , para. 7.58. We thus consider it appropriate to address the parties' comments as we assess
the role of the CN codes that are listed in the Annex to the EC Schedule.
565 Document G/MA/TAR/RS/47 (10 February 1998), certified in document WT/Let/261
(25 November 1998).

RECTIFICATION AND MODIFICATIONS OF SCHEDULES
SCHEDULE CXL - EUROPEAN COMMUNITIES
INFORMATION TECHNOLOGY AGREEMENT (G/MA/TAR/RS16)

When the European Communities notified th eir commitments under the Information
Technology Agreement in doc. G/MA/TAR/RS/16 of 2 April 1997, they indicated
that the EC would classify "set-top box es", an Attachment B product, under the
following tariff lines: 8517 50 90, 8517 80 90 and 8525 20 99, all duty-free from 1
January 2000.

Customs experts from ITA participants have met several times to discuss
classification divergences on ITA products, as mandated by paragraph 5 of the Annex
to the Ministerial Declaration of 13 D ecember 1996. Their recommendations to the
Committee of Participants to the Agreem ent are contained in doc. G/IT/14 of 6
September 2000.

As indicated in that document, the Europ ean Communities have decided to join some
other ITA participants in classifying certain types of ITA set-top boxes under HS sub-
heading 8528 12. The European Communities have created a new tariff line for such
set-top boxes, as follows:

 Base rate Final rate Implementation
8528 12 91 ------- Apparatus with a
microprocessor-based device
incorporating a modem for
gaining access to the Internet,
and having a function of
interactive information
exchange, capable of receiving
television signals ("Set-top
boxes with a communication
function")
New line

0.0 2000

This change took effect from 1 October 2000. It is without prejudice to other possible
changes in ITA product classification that may be necessary once the Committee of
Participants to the Agreement has comple ted its examination of the recommendations
from customs experts.

Consequently, the tariff references shown ag ainst product descriptions in Attachment
B of the ITA Schedule of the European Communities should be modified as follows:

Set-top boxes: Replace by following refe rence: 8517.50.90 (unchanged), 8517.80.90
(unchanged), 8525.20.99 (unchanged), 8528.12.91 (new) ."
566 (footnotes omitted,
emphasis original)

566 Document G/MA/TAR/RS/74 (15 December 2000) (Exhibit US-26), certif ied in WT/Let/667
(19 March 2010).

7.421 Both the complainants and the European Communities have put forward competing
interpretations of the motivations and effects of these modifications which, not surprisingly, support
their respective positions regarding the key interpretative issue described above.
7.422 Although the European Communities claims th at the purposes of these two modifications
were different – arguing that the 1998 notification was undertaken to reflect a change of classification
practice endorsed by the WCO, whereas the 2000 notification was undertaken to unilaterally "enlarge"
commitments – the Panel is struck by the similar ity in the explanations and language in the two
notifications themselves. While the European Communities has explained to us that its 2000
notification was a unilateral expansion of commitment s, we find little evidence of this in the words
used to describe the change at the time that it was made. We not e that the European Communities
emphasized "classification" as the basis for both of the modifications.
7.423 In addition, the 1998 amendment appears to us to undermine the "exhaustion" approach
proposed by the European Communities, under wh ich HS or national codes notified exhaust
obligations. It is apparent fro m the 1998 amendment that views on th e appropriate classification of
products can evolve over time. This may occur multilaterally (for example by agreement at the
WCO), but may also occur as a result of plurilatera l discussions where a number of countries agree to
a harmonized approach to classifying particular goods, or indeed unilaterally by individual WTO
Members. It could even result from discussions under paragraph 5 of the ITA Annex where clarifying
the classification of an Attachment B product could eventually lead to a formal agreement to modify the
schedules of all ITA participants. One consequence is that, as views on proper classification evolve, it
is possible that the codes that were notified by a particular WTO Member as corresponding to a
particular narrative description would no longer be considered to apply to the products that were
intended to be covered by that narrative descrip tion. Despite this, the ITA does not expressly
envisage or require an ITA participant to update its Schedule to take account of classification changes
that may affect the codes listed next to the narra tive product descriptions of products in or for
Attachment B. While the European Communities did, in fact, modify its codes in this particular case,
we are unaware of any obligation on the Europ ean Communities to do so. Had the European
Communities not modified the tariff item numbers, under the "exhaustion" approach, the European
Communities may no longer have had an obligation to extend duty-free treatment to products that the
European Communities itself would admit should recei ve duty-free treatment pursuant to its original
obligations undertaken in implementing Attachment B.
Do the WTO Schedules of concessions of other IT A participants inform our interpretation on
the relevance of the tariff item numbers?
7.424 In response to a question from the Panel 567, the United States and Chinese Taipei explained
that their respective WTO Schedules of concessions incl ude either "identical" or "virtually identical"
headnotes to the EC headnote. Japan explained that its WTO Schedule contains a "note corresponding
to" the EC headnote. 568 The complainants have explained that headnotes in ITA participants' WTO
Schedules serve to ensure that Members would provide duty-free treatment on all products described

567 Complainants' response to Panel question No. 9.
568 Japan submits that the note in its Schedule is "not identical, but are almost the same", but considers
that the note functions the same as the EC headnote, notably, indicating "how to eliminate customs duties in
respect of the products provided 'for' and 'in' Attach ment B, with the condition 'wherever the products are
classified'" (Japan's response to Panel question No. 9).

in or for Attachment B, regardless of which codes are associated with those descriptions, or even if no
codes were associated with the description (as in the case of Japan's WTO Schedule).
569
7.425 We recall that the Appellate Body found in EC – Computer Equipment that the terms of the
treaty being interpreted when dealing with a ta riff concession in a schedule are those of the WTO
Agreement.570 It subsequently found in EC – Chicken Cuts that other Members' Schedules of
concessions could form part of the "broader cont ext" to interpret a Member's tariff concessions. 571
We will therefore consider below whether the schedules of other WTO Members, and in particular the
schedules of other ITA participants, may shed further light on our understanding of the EC headnote.
7.426 The Panel begins by observing that the ITA-related concessions of some ITA participants are
included in "rectifications and modifications" to their Uruguay Round Schedules, whereas others are
included in Protocols of Accession. 572 It is apparent from these documents that ITA participants
attempted to standardize the format that would be used to incorporate th ese concessions into their
Schedules, as practically all of them include specific sections for Attachment A-related and
Attachment B-related concessions, as well as a "sta ging matrix" providing a detailed description of
the maximum duties that would be applicable for eac h of the relevant tariff lines, per year, until their
final elimination.573 Attachment A concessions are normally presented using a format that follows, to
a large extent, the one used by most Members in their Uruguay Round Schedules, and consolidates in
a single list the HS headings listed under both Sections 1 and 2 of Attachment A.
574 Similarly, all ITA
participants included in their schedule an annex or section listing products identified as "in or for"
Attachment B, with some relatively minor variations.575
7.427 Counting the EC-27 as one, there are 35 Schedules of ITA participants in the English
language576, seven in Spanish 577 and one in French. 578 The panel observes that these schedules share

569 See, for instance, United States' comments on European Communities' response to question Panel
question Nos. 100 and 103, and United States' questions No. 1-3, para. 5; Japan's response to Panel question
No. 100.
570 Appellate Body Report on EC – Computer Equipment, para. 84.
571 Appellate Body Report on EC – Chicken Cuts , para. 193. We note that the European Communities
has recognized in its own arguments that the Schedules of concession of other WTO Members that were ITA
participants may serve as "broader context" to interpre t the concessions as contained in the Annex to the EC
Schedule (European Communities' first written submission, paras. 142 and 242).
572 ITA participants reflecting concessions in their Protocols of Accession (P.A.) include Albania,
China, Croatia, Georgia, Jordan, Moldova, Oman, Saudi Arabia, Chinese Taipei, Ukraine, and Viet Nam.
573 The Panel recalls from its assessment of the ITA th at two of these sections appear to have been
foreseen in Paragraph 2(b) of the ITA Annex. It should be noted, in addition, that Japan's ITA-related
modification in WT/Let/138 (17 April 1994) does not conform to this description.
574 This is the case of ITA-related concessions incorporated through the 1980 procedures. It should,
however, be noted that the Protocols of Accession of ITA participants merged ITA- with their non-ITA-related
concessions, resulting in Attachment A concessions appearing undistinguishable from the "traditional" tariff
concessions determined under participants' respective accession processes.
575 The Panel notes that at least one schedule (Egypt's ITA-related modification in WT/Let/459)
appears to be missing one of the product descriptions ("Apparatus for stripping or cleaning semiconductor
wafers" that appears in ex 8456 91 of Attachment A, Section 2). Other Members' Schedules (Korea's in
WT/Let/249, Egypt's in WT/Let/459, Israel's in WT/Le t/174, Jordan's Protocol of Accession and Viet Nam's
Protocol of Accession) do not incorporate the change s concerning FPDs (i.e. the addition of the words "
devices" and "vacuum-fluorescence"). Fi nally, at least one Schedule (the Un ited States') incorporates product
descriptions (eight in total) that are not expressly sp ecified in Attachment B or taken from Attachment A,
Section 2.
576 The following Members used the English language to reflect their ITA-related concessions into their
schedules: Albania (P.A.); Australia (WT/Let/248); Bahrain (WT/Let/488); Canada (WT/Let/158); China

many common features and could be grouped accordi ng to certain traits, including the language used
in preparing them, whether they included a headnote and whether they listed tariff headings next to
narrative descriptions. Thirty of the 35 Schedules in the English language incorporate a headnote that
is identical to the EC headnote, and list tariff codes next to the product descriptions that appear below
the headnote.
579 Most of these Schedules also have in co mmon the fact that they share the same
product descriptions in the Attachment B-related sections. The seven WTO Schedules in Spanish
include identical headnotes, which the Panel considers to be equiva lent to those in the English
version580, each of which lists tariff codes next to th e product descriptions. Taking into account the
above, in total, 38 of 43 Schedules of ITA participan ts either contain exactly the same language as the
EC headnote, or language which is equivalent to it.
7.428 Although the headnote was not explicitly provided fo r in the ITA, this substantial uniformity
in approach with regard to the inclusion of a hea dnote and as to its terms, strongly suggests that the
headnote was envisaged to play an important role in implementing the ITA. The Panel will return to
this point to below. We will now turn to examine the schedules of participants that differ somewhat
from the EC Schedule.
7.429 As mentioned above, Japan's Schedule contains a "note" that is different from the EC
headnote that appears in the Annex to the EC Sche dule and the headnotes that were included in the
WTO Schedules of other participants. Japan's Schedule contains a note that reads as follows:

(P.A.); Croatia (P.A.); Egypt (WT/Let/459); Europe an Communities (WT/Let/156); Georgia (P.A.); Hong
Kong, China (WT/Let/160); Iceland (WT/Let/159); India (WT/Let/181); Indonesia (WT/Let/157); Israel
(WT/Let/174); Japan (WT/Let/138); Jordan (P.A.); Ko rea (WT/Let/249); Kyrgyz Republic (P.A.); Macao,
China (WT/Let/177); Malaysia (WT/Let/176); Maur itius (WT/Let/334); Moldova (P.A.9; New Zealand
(WT/Let/295); Norway (WT/ Let/153); Oman (P.A.); Philippines (WT/Le t/303); Saudi Arabia (P.A.); Chinese
Taipei (P.A.); Singapore (WT/Let/175); Thailand (WT/Le t/250); Turkey (WT/Let/173); Ukraine (P.A.); United
Arab Emirates (WT/Let/585); United States (WT/Let/182); and Viet Nam (P.A.).
577 The following Members used the Spanish language to reflect their ITA-related concessions into
their schedules: Costa Rica (WT/Let/196); Dominican Republic (WT/Let/557); El Salvador
(G/MA/TAR/RS/45+Add.1, not certif ied); Guatemala (WT/Let/544); Hond uras (WT/Let/511); Nicaragua
(WT/Let/512); and Peru (WT/Let/640).
578 Switzerland/Liechtenstein used the French language to reflect their ITA-related concessions in their
joint schedule (WT/Let/253).
579 These are: Albania; Australia; Canada; China; Croatia; Egypt; Georgia; Hong Kong, China; Iceland;
India; Indonesia; Israel; Jordan; Kyrgyz Republic; Macao, China; Malaysia; Mauritius; Moldova; New Zealand;
Norway; Oman; Philippines; Saudi Arabia; Chinese Taipei; Singapore; Thailand; Turkey; Ukraine; United Arab
Emirates; and Viet Nam. Two of the other Schedules in English have similar headnotes to the EC headnote,
with minor variations. For example, the Schedule of the United States employs the word "on" instead of "in and
for" before the reference to "Attachment B" (See document WT/Let/182). Similarly, Bahrain's Schedule does
not contain the words "to the Annex" between "Attachment B" and "to the Ministerial Declaration on Trade in
Information Technology Products
" (See document WT/Let/488).
580 The headnote appears in those Members' WTO Schedules drafted in Spanish as follows:
Lista, los derechos de aduana aplicables a ese producto, así como los demás derechos o cargas
General sobre Aranceles Aduaneros y Comercio de 1994) quedarán consolidados y eliminados
See, for example, Costa Rica's modification in WT/Let/196.

"Notwithstanding the provision of paragraph 3 of the Notes to the Schedule, the tariff
reductions from the bound rate as of 1 January 1997 to free in respect of the products
in Lists III and IV, wherever they are classified , shall be implemented in three equal
rate reductions as follows: (a) The first reduction shall be impl emented on the date
that this instrument becomes effec tive; (b) The second reduction shall be
implemented on 1 January 1998; (c) The th ird reduction shall be implemented on 1
January 1999." (emphasis added)
581
7.430 "List IV" reproduces the product descriptions specified in Attachment B, without assigning
any tariff code next to them.582
7.431 Japan's Schedule thus contains language that is very similar to the reference "wherever the
product is classified" in the EC headnote. In add ition, the product descriptions "for Attachment B"
are reproduced in List IV. Based on these two elements, Japan's Schedule may be understood as
providing duty-free access to products "in or for Attachment B" irrespective of where they are
classified.583
7.432 In the Panel's view the terms of Japan's "Note" clearly reflects the fact that Japan did not
consider that the inclusion of HS codes was necessary in order to implement ITA Attachment B
commitments. To this extent, it lends support to the view that the scope of commitments is
determined by the narrative descripti ons of products "wherever they are classified" rather than by the
HS codes. However the Panel is mindful that Japan took a unique approach to scheduling its
Attachment B-related commitments. Moreover, Japan's Schedule is not the subject of this dispute.
Accordingly, the Panel chooses not to attach much weight to it beyond noting that in significant
respects it mirrors key aspects of the headnotes appear ing in the vast majority of ITA participants
schedules.
7.433 We note that two Schedules (those of Korea and Switzerland/Liechtenstein, jointly)
584 lack a
"headnote" or any provision that contains language equivalent to the phrase "wherever the product is
classified". The Attachment B-related sections of these Members' schedules include only a table
listing the product descriptions and HS codes that the participants chose to notify during the
implementation period.
7.434 We do not have before us sufficient information to enable us to understand the basis for not
including a headnote, as the product descriptions la ck any indication of th e applicable bound duty,
other duties and charges or any relevant term or conditions on the concession, making it difficult to

581 Japan's ITA-related concessions are reflected in document WT/Let/138 (17 April 1994).
582 Japan's ITA-related concessions, document WT/Let/138 (17 April 1994).
583 As another difference, the Panel observes that the phrase "to the extent not specifically provided for
in this Schedule" is absent in Japan's note. As the Pane l discussed above, we determin ed this phrase to refer to
the requirement to eliminat e customs duties and charges on products "i n or for" Attachment B in accordance
with the ITA regardless of whether they are already covered by existing commitments in the relevant WTO
Schedule. Thus, products in or for Attachment B would now be subject to duty-free, ITA-related, tariff
obligations, notwithstanding any overlap in product coverage. Despite the absence of this phrase from Japan's
Schedule (and ITA-related commitments), the Panel considers that Note 3 in the Japanese Schedule (see above)
addresses this same objective through the language "the tariff reductions from the bound rate as of 1 January
1997 to free in respect of the products in Lists III and IV, wherever they are classified , shall be implemented".
Despite this difference in text between the note appear ing in Japan's Schedule and the EC headnote, the Panel
finds no basis to suggest that the commitment to extend duty-free treatment to products wherever classified is
any different.
584 See Schedules of Korea (WT/Let/249) and Switzerland/Liechtenstein (WT/Let/253).

understand on the face of the Schedule what is th e obligation assumed by the Member in respect of
those products. This unquestionably creates difficulty in interpreting these two Schedules as concerns
the product descriptions in or for Attachment B that ar e included. In our view, this underlines the fact
that without a headnote, key elements of the Attach ment B-related concessions, in particular the tariff
treatment of those products or the relationship with the ITA, would remain unaddressed.
7.435 Finally, the Panel notes the assertion put forth by the European Communities that a number of
WTO Members participating in the ITA would nec essarily have "either made commitments without
there being an obligation pursuant to the ITA and/ or there are a number of WTO breaches because of
the differences in classification" if the compla inants' position regarding the predominance of the
product descriptions in the Annex to the EC Sc hedule were accepted. As discussed above, the
headnote refers to the product descr iptions "in and for" Attachment B wherever they are classified in
the ITA participant's schedule. For this reason, we are not convinced that differences in classification
would necessarily result in breaches in concessions in a Schedule concerning a product description "in
or for" Attachment B . We also consider that the HS headings and national codes listed by ITA
participants in their Attachment B-related sections were intended to facilitate the implementation of
those concessions, including inter alia the consultations to be held by ITA participants pursuant to
paragraph 5 of the ITA Annex for the purpose of eliminating divergences in classification and,
possibly, to assist participants in phasing out th e applicable duties. However, as the terms of
reference of this Panel do not go beyond specific terms in the EC Schedule, we will not elaborate
further on this issue.
7.436 Based on the foregoing, the Panel considers that the substantial uniformity in approach with
regard to the inclusion of a relatively standardized headnote in the schedules of ITA participants is
fully consistent with the notion that the headnotes were meant to play an important role in interpreting
the Attachment B-related concessions. However, we consider that other participants' schedules do not
provide much guidance in interpreting the term s of the EC headnote, beyond highlighting the
importance of the headnotes in determining the co rresponding tariff treatment for products in or for
Attachment B.
What is the relevance of the HS to our interpretation of the concession in the Annex to the EC
Schedule?
Arguments of the parties
7.437 The complainants argue that HS interpretative materials, including HS section and chapter
notes, HSENs and GIRs are not relevant context for interpreting the concessions at issue that arise
under the Annex to the EC Schedule. 585 With respect to products descr ibed in or for Attachment B,
the complainants note that the duty-free obligation ex tends to these products "wherever ... classified."
Furthermore, the complainants note that paragraph 2(b) of the ITA refers to "products specified in
Attachment B" (emphasis added), while the reference to products "classified (or classifiable) with
Harmonized System (1996) ("HS") headings" in paragraph 2(a) of the ITA, pertains to coverage under
Attachment A. 586 Based on this distinction, they argue that HS materials, while relevant to
interpretation of concessions arising pursuant to Attachment A 587, are not relevant to interpret

585 Complainants' responses to Panel question No. 104.
586 United States' response to Panel question No. 104; Japan's first written submission, para. 16; Japan's
response to Panel question Nos. 20 and 21; Chinese Taipei's response to Panel question No. 104.
587 The United States acknowledges that prior Appella te Body reports indicate that the HS materials
may be relevant to interpret HS-derived language in the description of a tariff concession in a Member's
Schedule where the drafters relied on HS terminology or expressly provided for the application of HS

narrative descriptions, that were incorporated into the Annex to the EC Schedule pursuant to
Attachment B. Japan submits that "the very point of the concessions made pursuant to Attachment B
was to use product descriptions in those areas wh ere the existing headings provided by the HS
nomenclature were deemed insufficient."
588
7.438 The European Communities considers that the HS1996 interpretive materials are relevant to
the assessment of the concessions in the Annex to its Schedule. It argues that the language in
paragraph 2 of the ITA Annex, which refers to "a list of the detailed HS headings involved for
products specified in Attachment B", provides a basi s to consider these materials in its assessment of
whether the measures at issue for flat pa nel display devices are WTO-inconsistent. 589 In addition, the
European Communities argues that these materials are also relevant for the Panel's analysis of
concessions reached pursuant to Attachment A.590
Consideration by the Panel
7.439 The Appellate Body confirmed in EC – Chicken Cuts that the HS constituted relevant
"context" to interpret a Member's schedule of concessions:
"The above circumstances confirm that, prior to, during, as well as after the Uruguay
Round negotiations, there was broad consen sus among the GATT Contracting Parties
to use the HS as the basis for their WTO Schedules, notably with respect to
agricultural products. In our view, this c onsensus constitutes an 'agreement' between
WTO Members 'relating to' the WTO Agreem ent that was 'made in connection with
the conclusion of' that Agreement, within the meaning of Article 31(2)(a) of the
Vienna Convention. As such, this agre ement is 'context' under Article 31(2)(a) for
the purpose of interpreting the WTO agreements , of which the EC Schedule is an
integral part. In this light, we consider that the HS is relevant for purposes of
interpreting tariff commitments in the WTO Members' Schedules." 591

interpretative rules to Attachment B concessions, for instance, those made in acco rdance with Attachment A
(United States' first written submission, para. 24; Unite d States' second written submission, para. 14; United
States' response to Panel question Nos. 104 and 116) Japan submits more broadly that HS materials that address
directly the meaning of the language of a concession may be relevant to interpret concessions that use HS
terminology (Japan's response to Panel question No. 104) . Chinese Taipei similarly submits that the HS1996
"plays a role" in the interpretation of the scope of conces sions in relation to products listed in Attachment A in
light of the reference in paragraph 2(a) of the ITA (Chinese Taipei's response to Panel question No. 104).
588 Japan's second written submission, para. 173.
589 European Communities' first written submission, para. 146; European Communities' response to
Panel questions No. 104.
590 The European Communities argues that the use of the terms "classified (or classifiable)" in
paragraph 2(a) is an express indication that ITA participants intended HS classification rules to have an
important role in the interpretation of the scope of the concessions made pursuant to the ITA (European
Communities' response to Panel questions No. 104).
591 Appellate Body Report on EC – Chicken Cuts, para. 199. See also Appellate Body Report on EC -
Computer Equipment, para. 89. In that dispute, the Appellate Body stated:
"We are puzzled by the fact that the Panel, in its ef fort to interpret the terms of [the EC Schedule], did
not consider the Harmonized System and its Explanatory Notes. We note that during the Uruguay Round
negotiations, both the European Communities and the United States were parties to the Harmonized System.
Furthermore, it appears to be undisputed that the Uruguay Round tariff negotiations were held on the basis of
the Harmonized System's nomenclature and that requests for, and offers of, concessions were normally made in
terms of this nomenclature." (Appellate Body Report on EC - Computer Equipment, para. 89).

7.440 In establishing that the HS provided relevant "c ontext" for the interpretation of a Member's
schedule, the Appellate Body took into considerati on a number of factors. While noting that the HS
was not formally part of the WTO Agreement and was not incorporated, in whole or in part, into that
Agreement, the Appellate Body observed that the vast majority of WTO Members are also contracting
parties to the HS and identified what it consider ed was a "close link" between the HS and the WTO
Agreement.
592 Specifically, the Appellate Body observed that a number of WTO agreements resulting
from the Uruguay Round, including the Agreement on Rules of Origin (in Article 9), the Agreement
on Subsidies and Countervailing Measures (in Article 27), and the Agreement on Textiles and
Clothing (in Article 2 and the Annex thereto), re fer to the HS for purposes of defining product
coverage within the agreement or the products subject to particular provisions.
7.441 The Appellate Body explained that, besides cons idering the headings and subheadings of the
HS, a treaty interpreter may also resort to elements which are binding on the contracting parties of the
HS (i.e. the Section, Chapter and Subheading Notes and the GIRs), as well as other elements which
are not binding for the contracting parties of the HS, such as the HS Explanatory Notes.593
7.442 The Appellate Body cautioned in China – Auto Parts , however, that context provided by the
HS may not always be relevant to the issue at hand:
"[C]ontext is relevant for a treaty interpreter to the extent that it may shed light on the
interpretative issue to be reso lved, such as the meaning of the term or phrase at issue.
Thus, for a particular provision, agreement or instrument to serve as relevant context
in any given situation, it must not only fa ll within the scope of the formal boundaries
identified in Article 31(2), it must also ha ve some pertinence to the language being
interpreted that renders it capable of helpin g the interpreter to determine the meaning
of such language. Because WTO Members' Schedules of Concessions were
constructed using the nomenclature of the Harmonized System, the Harmonized
System is apt to shed light on the meaning of terms used in these Schedules. It does
not, however, automatically follow that th e Harmonized System was context relevant
to the interpretative question faced by the Pa nel in its analysis of the threshold issue
in this dispute."
594
7.443 In our view, while the HS would always qualif y as context for interpreting concessions in a
Member's schedule that are based on that nomenclature, or that explicitly or implicitly make reference
to it, the relevance of the HS will depend on the interpretative question at issue. Moreover, it does not
follow from the Appellate Body ju risprudence that the HS will necessarily qualify as context or be
relevant in interpreting all tariff concessions, including concessions which are not based on the HS.
7.444 We are of the view that the HS, including h eadings and subheadings of the HS, Section,
Chapter and Subheading Notes and the GIRs, and poten tially HSENs, are not relevant for interpreting
the concessions based on narrative descriptions in the Annex to the EC Schedule. The terms of the EC

592 Appellate Body Report on EC – Chicken Cuts, paras. 195-197.
593 See Appellate Body Report on EC – Chicken Cuts , para. 224. While the Appellate Body agreed
with the general proposition that "the Chapter Notes to the Harmonized System, which are binding, may have
greater probative value than the Expl anatory Notes to the Harmonized Syst em, which are non-binding" it also
recognized that the "probative value of a Note will, however, also depend on how relevant it is to the
interpretative question at issue; as a result, it cannot be excluded that an Explanatory Note that directly
addresses a given interpretative question will be more probative than a Chapter Note that does not relate
specifically to that interpretative question." (See Appellate Body Report on EC – Chicken Cuts , para. 224,
fn. 431).
594 Appellate Body Report on China – Auto Parts, para. 151.

headnote are evidently not based on the HS, nor do th ey make explicit or implicit reference to it.
Similarly, although some of the product descriptions in the Annex to the EC Schedule make use of
certain HS terminology, this is not the case for th e concessions at issue in this dispute, namely the
FPDs and STBCs narrative descriptions. For this reason, we consider that the HS will not inform our
interpretation of the terms of the EC headnote or narrative descriptions at issue.
Preliminary conclusions: The Panel's interpreta tion of the role of the EC headnote in the
Annex to the EC Schedule
7.445 On the basis of the plain meaning of the key terms and phrases appearing in the EC headnote,
we preliminarily concluded that the EC headnote requires the European Communities to extend duty-
free treatment to products described in the Annex to the EC Schedule, irrespective of where they are
classified in the EC Schedule. As corollaries to this finding the Panel further concluded that the tariff
item numbers notified next to the product descriptions , while "illustrative" of the locations where the
European Communities considered those products s hould have been classified at the time of
implementation of the ITA, cannot delimit the scope of coverage of the concessions. We further
explained that the HS, including chapter and explanatory notes and GIRs, are not relevant to our
assessment of the scope of product coverage in any of the narrative descriptions at issue in this case.
We concluded that the provisions of the ITA pr ovide context for interpreting the headnote, and
support our preliminary conclusions.
7.446 We will consider the FPDs narrative concession be low in light of the object and purpose of
the WTO Agreement; however, we would note at pre sent that the substantial uniformity with which
ITA participants included a headnote with highly si milar language, including identical language in
many cases, is fully consistent with the notion that the headnote was intended to play an important
role in those Members' schedules.
(iii) The meaning of the terms of the FPDs narrative description in the Annex to the EC Schedule
7.447 We next examine the ordinary meaning of the FPDs narrative description, including
consideration of its text, taken in its context and in light of the Agreement's object and purpose. We
recall that the FPDs narrative description provides:
"Flat panel display devices (including LCD, Electro Luminescence, Plasma, Vacuum-
Fluorescence and other technologies) for produc ts falling within this agreement, and
parts thereof".
595
The meaning of the terms of the FPDs narrative description
Arguments of the parties
7.448 The complainants have structured their argum ents to address the ordinary meaning of the
terms "Flat panel display devices" separately from th e text "for" and "produ cts falling within this
agreement, and parts thereof". The complainants have not addressed at length the significance of the
parenthetical language "(including LCD, Electro Luminescence, Plasma, Vacuum-Fluorescence and
other technologies)" in the narrative description.

595 Exhibit US-7.

The meaning of the term "Flat panel display devices "
7.449 The United States describes a "flat panel display device" as "a type of monitor that is thinner
and typically uses less energy than devices using conventional cathode ray tube (CRT) technology".
596
In particular, the United States notes that "flat panel display" has been defined as "a video display
with a shallow physical depth, based on technology other than CRT (cathode ray tube). Such displays
are typically used in laptop computers. Co mmon types of flat panel displays are the
electroluminescent display, the gas discharge display, and the LCD display."597 In addition, the United
States refers to the definition "[a]n electronic disp lay in which a large orthogonal array of display
devices, such as electroluminescent devices or light emitting diodes, form a flat screen." 598 According
to the United States, these displays rely on a va riety of technologies to achieve a thinner profile
including LCD or plasma. 599 Moreover, the United States claims that FPDs process digital signals
directly, including those from an automatic data-p rocessing machine, via a DVI interface or other
connector.600
7.450 The United States argues that the term "dev ices" was inserted based on a proposal by
Switzerland shortly after the conclusion of the ITA. In the United States' view, the inclusion of this
word "simply makes clear" that a "device" or the fi nished product containing a flat panel display and
not just the display itself, is covered by the concession.601
7.451 The United States notes that the concession in the Annex to the EC Schedule specifically
identifies LCD flat panel display devices as one of the covered types. Since "computers" are
"automatic data-processing machines", which themse lves are products falling w ithin the agreement,

596 United States' first written submission, para . 50 (referring to Energy Star, LCD Basics,
http://www.energystar.gov/index.cfm?c=monitors.lcd (Exhibit US-31)).
597 United States' first written submission, paras. 50 an d 121, fn. 166 (referring to Microsoft Computer
Dictionary, 2002 (5th edition), p. 155).
598 United States' first written submission, pa ras. 50 and 121, fn. 166 (referring to McGraw Hill
Dictionary, p. 1437).
599 United States' first written submission, para. 50. The United States notes in particular that LCD
technology is commonly used for computer monitors and involves aligning material suspended in a liquid under
the influence of a low voltage to reflect ambient light. See Hirohisa Kawamoto, The History of Liquid-Crystal
displays, Proceedings of the IEEE (Vol .90, No. 4 (April 2002), p. 466 (Exhibit US-32); Definition of "LCD" in
Newton's Telecom Dictionary, p. 555 (24
th ed., 2008) (Exhibit US-33). The United States refers to a definition
for LCDs as "[a]n alphanumeric display using liquid crystal sealed between tw o pieces of glass. The display is
divided into hundreds or thousands of individual dots, which are charged or not charged, reflecting or not
reflecting external light to form ch aracters, letters and numbers". See Newton's Telecom Dictionary (24th ed.
2008), p. 545 (Exhibit US-33); see also Carmen Carmack and Jeff Tyson, How Computer Monitors Work, p. 1
("Most desktop displays use liquid crystal display (LCD) or cathode ray tube (CRT) technology, while nearly all
portable computing devices such as laptops incorporate LCD technology. Because of their slimmer design and
lower energy consumption, monitors using LCD technology (also called flat panel or flat screen displays) are
replacing the venerable CRT on most desktops.").
600 United States' first written submission, paras. 52-5 3 (citing to "How Monitors Work", p. 4: A DVI
connector consists of three rows of pins arrayed on a plug with a screw on either side. DVI was developed in
1998 by the Digital Display Working Group (DDWG), which included leading computer manufacturers. The
DVI connector was intended to provide digital-to-digital connection standard for personal computers and digital
displays. See Digital Display Working Group, Digital Visual Interface (DVI) Revision 1.0p, p. 5 (30 March
1999) (Exhibit US-35)).
601 United States' response to Panel question No. 54.

the United States argues that LCD monitors are th erefore covered under the product descriptions for
FPDs.
602
7.452 Japan submits that LCD monitors with DVI are th e most common type of flat panel display
devices "for" automatic data-processing machines. 603 Japan provides an "illustrative" although "not
comprehensive" list of products it believes to be at issue.604 As the narrative description in Attachment
B and the Annex to the EC Schedule explicitly id entify "LCD" technology in discussing flat panel
display devices, Japan argues that "LCD monitors ar e 'flat panel display devices' for display of data
from an ADP machine".605
7.453 Japan argues that the addition of the term "d evice" to the descriptio n does not "materially
change the meaning" of the concession. Japan refers to the definition of "device" as ""a thing designed
for a particular function or adapted for a purpose." 606 Japan argues that a flat panel display for an
automatic data-processing machine ser ves to perform the function of displaying a signal from an
automatic data-processing machine. Therefore, it ar gues that the addition of the term "devices" does
not change the original meaning of "flat panel displays".607
7.454 Chinese Taipei argues that "flat panel display devices" are products with specialized
definitions. Therefore, it submits that dictionaries specialized in IT sector terminology may be
relevant in examining the terms "flat", "panel", "display" and "devices".
7.455 Chinese Taipei refers to the definition of "f lat" as "(3) Even, smooth, unbroken, without
projection; (of the face, features, etc.) without prominence, not projecting; (of land) not undulation;
(of a surface) smooth, level. B. Deflated, puncture d. C. (Electronic) Uniform in behaviour over a
given range of frequencies; responding e qually to signals of all frequencies."
608 It refers to "panel" as
"(5) A thin board such as might form a panel of a door etc.; esp. One used as a working surface. B. A
rigid support for a painting (as opp. to a canvas); a pa inting on such a support. C. A leaf or section of
a folding screen or triptych."609
7.456 Chinese Taipei refers to a number of definitions of "display", such as "(2) Something intended
for people to look at: an exhibition, a show. B. A visual presentation of data or signals on the screen
of a cathode-ray tube etc.; a device or system used for this." 610; "1. a visible representation of
information, in words, numbers, or drawings, as on the cathode-ray tube screen of a radar set,
navigation system, or computer console. 2 The de vice on which the information is projected. Also

602 United States' first written submission, para. 121.
603 Japan's first written submission, para. 216.
604 Exhibit JPN-15.
605 Japan's first written submission, para. 266; Japan's second written submission, para. 150.
606 Japan's response to Panel question No. 54 (referring to the Shorter Oxford Dictionary (2003) p. 655
(Exhibit JPN-27).
607 Japan's response to Panel question No. 54. Japan argues that this view is confirmed from the
grammatical standpoint. When the phrase "flat panel displa y" is inserted in front of the word "devices," it
argues, the phrase "flat panel display" serves to modify and describe the neutral term "devices." Thus, whether
this phrase "flat panel displays" is used as the noun, or at modifies the noun "devices," it argues that the meaning
does not change.
608 Chinese Taipei's first written submission, para. 223 (citing the Shorter Oxford Dictionary (1993),
p. 968).
609 Chinese Taipei's first written submission, para. 224 (citing the Shorter Oxford Dictionary (1993),
p. 2083).
610 Chinese Taipei's first written submission, para. 225 (citing the New Shorter (1993), p. 699).

knows as display device. 3. The image of the information."
611; "[a] generic term for a computer
subsystem. Printers, serial ports, and disk drives are often referred to as devices; such subsystems
frequently require their own controllin g software, called device drivers." 612; as "a thing designed for a
particular function or adapted for a purpose; an invention, a contrivance." 613; and "(1) any electronic
or electromechanical machine or component from a tr ansistor to a disk drive. The term "device"
always refers to hardware, never software."614
7.457 Chinese Taipei refers to "panel display" as "a n electronic display in which a large orthogonal
array of display devices, such as electro-luminesce nt devices or light-emitting diodes, form a flat
screen. Also known as flat-panel display." 615 It refers to the definition "flat panel display" as "[a]
video display with a shallow physical depth, based on technology other than CRT (cathode ray tube).
Such displays are typically used in laptop computer s. Common types of flat panel displays are the
electroluminescent display, the gas disch arge display, and the LCD display" 616 or "[a] thin display
screen for computer and TV usage. The first flat panels appeared on laptop computers in the mid-
1980s, and the LCD technology became the standard. Stand-alone LCD screens became available for
desktop computers in the mid-1990s and exceeded sal es of CRTs for the first time in 2003. For TV
viewing, LCD and plasma are the two competing technologies, and many flat panel TVs can also
display computer output."617 When these terms are considered t ogether, Chinese Taipei considers the
ordinary meaning of "flat panel display device" is a "smooth and thin board used as a visual
presentation of data or signals on that board".618
7.458 Based on these definitions, Chinese Taipei concludes that a flat panel display device is "a thin
display screen employing plasma, LCDs and other technologies for use with computers or other
apparatus"
619; or "thin screen devices to visualize data or signals" "employ[ing] various technologies,
such as LCD and plasma, with the exception of CRT technologies" and "hav[ing] a variety of
applications including reproduction of signals from ADP machines" as well as "visualiz[ing] data
from other sources".
620 Chinese Taipei argues that these definitions "confirm that flat panel display
devices are for use with computers or for any othe r apparatus since no limitation is included in the
definitions." In addition, it argues that the terms "display" and "display device", as well as "panel
display" and "flat panel display" are synonymous.621

611 Chinese Taipei's second written submission, paras. 150-153 (referring to McGraw-Hill Dictionary
(1993), p. 593; see also McGraw-Hill Dictionary (2003), p. 629.
612 Chinese Taipei's first written submission, para. 227; Microsoft Computer Dictionary, (5th ed.,
2002), p. 155.
613 Chinese Taipei's first written subm ission, para. 226 (referring to the Shorter Oxford Dictionary
(1993), p. 655).
614 Techweb On-line Dictionary (visited on 4 December 2008), available at:
http://www.techweb.com/encyclopedia/defineterm.jhtml?term=flatpaneldisplay.
615 Chinese Taipei's second written submission, paras. 150-153 (referring to McGraw-Hill Dictionary
(1993), p. 1437; see also McGraw-Hill Dictionary (2003), p. 1522.
616 Chinese Taipei's first written submission, para. 227; Microsoft Computer Dictionary (5th ed., 2002),
p. 217.
617 Techweb On-line Dictionary (visited on 4 December 2008), available at
http://www.techweb.com/encyclopedia/defineterm.jhtml?term=flatpaneldisplay.
618 Chinese Taipei's first written submission, para. 227; Microsoft Computer Dictionary (5th ed., 2002).
619 Chinese Taipei's first written submission, para. 233.
620 Chinese Taipei's first written submission, para. 234.
621 Chinese Taipei's second written submission, para. 154.

7.459 Chinese Taipei also argues that th e use of the plural "devices" rather than the singular form
"device" does not change the or dinary meaning of the concession.
622 Instead, it argues, the use of the
plural serves to clarify that "any flat panel di splay devices are covered provided they are for 'any'
product falling within the ITA agreement rather than just for certain products covered by the ITA". 623
Chinese Taipei argues that the last-minute inclusion of the term "devices", in addition, confirms that
the product description "covers both semi-finished and finished products".624
7.460 The European Communities criticizes the complainants' approaches to defining the terms in
the phrase "flat panel display devices". It argu es that the United States "does not examine the
ordinary meaning of the relevant te rm" and that "the ordinary meaning of the relevant term is entirely
mixed up with vague fact-like statements and ostens ible contextual assertions without any structured
legal analysis". 625 The European Communities further critic izes the United States' citation to the
Microsoft Computer Dictionary that dates from 2002, arguing that this definition post-dates when
product coverage was established in the ITA. 626 The European Communities also criticizes Chinese
Taipei's inclusion of various dictionary definiti ons dating from a time-frame after the negotiation of
the ITA.627
7.461 The European Communities argues that the mean ing of adding the word "devices", which it
submits was added on the basis of a request by Switzerland 628, is "less clear" and has led to "debates"
in the ITA committee whether the definition covers fi nished products and/or semi-finished products.
It argues that the term "devices" might have been added as "a spill-over effect from the reference to
CRT technology in the definition of 'monitors'", such that the addition of the word would mean that
those genuine ADP monitors that used flat panel technology could come within the scope of the
ITA.
629 However, it also recognizes the possibility of a more "technical" meaning. In response to a
question from the Panel, the Europ ean Communities submits that the word "devices" was added as it
"was necessary because the product de finition was intended to cover many different display devices
mainly for incorporation into other ITA covered products". 630 Furthermore, the European
Communities argues that the use of the plural in the term "device s" indicates that the term is not
"synonymous" with "computer flat panel monitors ". The European Communities submits that the
narrative description provides no guidance about the scope of possible relevant technology
applications, such as use of a display in a car radi o or an airplane entertainment display. For this
reason, the European Communities argues that it is unclear what the product coverage should be.631

622 Chinese Taipei's second written submission, pa ras. 158-159; Chinese Ta ipei argues that "all
products included in Attachment B" are listed in the plural, such as "c omputers", "projection type flat panel
display units" and "monitors".
623 Chinese Taipei's second written submission, paras. 158-159.
624 Chinese Taipei's response to Panel question No. 54.
625 European Communities' first written submission, para. 104.
626 European Communities' first written submission, para. 104.
627 European Communities' first written submission, para. 110.
628 European Communities' first written submission, para. 186 (referring to Trade in Information
Technology Products: Result of Bilateral Consultations, Communication from Switzerland, Geneva
(21 January 1997) (Exhibit EC-29).
629 European Communities' first written submission, paras. 186-187.
630 European Communities' response to Panel question No. 54.
631 European Communities' first written submission, para. 113.

The meaning of the term "for"
632
7.462 The complainants refer to the term "for" as "to be recei ved by, to belong to; to be used with,
or in connection with." 633 In addition, the United States refers to the definition "a function word to
indicate purpose."634
7.463 The United States argues that the term "for" does not impose the "limitation" suggested by the
EC measures, such that a display would fall outside the concession due to the "mere possibility" that it
is capable of connecting to something other than an ITA product means. 635 Japan argues that the
ordinary meaning of the word "for" is "extremely broad, noting that the Shorter Oxford Dictionary
provides over 20 definitions for the term. 636 Japan argues that the concept of "for" should encompass
being "capable of operating with a computer", for instance. In its view, this means more than whether
the device can merely receive signals from computers, but that such a device "must be designed to be
used with computers, thereby providing an acceptable level of operational quality".
637 Chinese
Taipei argues that the word "for" is "extremely wide and covers many different possible
situations".638
7.464 Japan and Chinese Taipei additionally argue that the term "for" should not be interpreted by
adding any limiting language in the product descripti on, such as "only for", "mainly for" or "also
for".639 Japan also argues that the absence of limiting terms demonstrates that the word "for" should
not be limited by any words, such as, "solely" or "principally". 640 Japan argues that the mere fact that
a device is "for" one type of machine does not, by virtue of the word alone, impose any kind of
exclusivity of use.641
7.465 The European Communities argues that the complainants' interpretation of "for" is "overly
broad".642 The European Communities acknowledges that "for" is a function word indicating
purpose643 and that computers fall within the ITA 644; however, it contends that an analysis of the word

632 Chinese Taipei, unlike the other complainants, examines the phrase "for products falling under this
agreement" as context to inform the ordinary meaning of the phrase "[f]lat panel display devices" (Chinese
Taipei's first written submission, paras. 236-246). He re, we will consider its arguments in this section,
consistent with the other complainants' approach.
633 United States' first written submission, para. 132, referring to the Shorter Oxford Dictionary (1993),
p. 997 (Exhibits US-79; US-80); Japan's first written submission, para. 268; Chinese Taipei's first written
submission, para. 241.
634 United States' first written submission, para. 132 (Exhibits US-79; US-80).
635 United States' first written submission, para. 132.
636 Japan's first written submission, para. 268.
637 Japan's second oral statement, para. 71. Japan argues that, even a flat panel display with a DVI
connector may not necessarily be "for" a computer, if for instance, it can recei ve and display television signals.
It argues that other factors would help determine this, such as the resolution of such a flat panel display device
(Japan's second oral statement, para. 71).
638 Chinese Taipei's first oral statement, para. 28.
639 Japan's first written submission, para. 269; Japan's second written submission, para. 151; Chinese
Taipei's first written submission, para. 242; Chinese Taipei's second written submission, para. 163. Japan argues
that no "modifier" or "restriction" app ears before or after the term "for", wh ich confirms the term "for" is used
"without limitation". Japan argues that the addition of th e words "only" or "mainly", which are not part of the
text, have the effect of "stand[ing] the ordinary meaning of [the word 'for'] on its head".
640 Japan's second written submission, para. 152; Japan's second oral statement, para. 59.
641 Japan's first written submission, para. 268.
642 European Communities' responses to Panel question No. 10.
643 European Communities' responses to Panel question No. 64.
644 European Communities' first written submission, para. 19.

"for" is ineffective when examined in isolation, since the ITA covers a variety of products. The
European Communities argues, the ordinary meaning of "for" could denote "only for", "mainly for" or
"also for".
645 Based on the number of different flat pane l display products included in the ITA, the
European Communities argues that the term "for" serves to imply "a number of different products"
"rather than whether or not a given flat panel display could have multiple usages". 646 In its view, the
term "for" indicates that "a given flat panel display device is always only for a product that falls
within the scope of the agreement".647
The meaning of the term "products falling within this agreement"
7.466 Chinese Taipei argues that the phrase "for products falli ng within this agreement, and parts
thereof" is "self explanatory", such that only flat panel display devices for products falling within this
agreement ... benefit from the duty-free treatment.648 Chinese Taipei argues that the term "agreement"
refers to the ITA. Thus, it argues that a flat panel display device may fall within the concession if it is
used with products falling within the ITA, including at least automatic data-processing machines.649
7.467 The European Communities argues that the qualification "for products falling within this
agreement, and parts thereof" necessarily means that not all flat panel display devices can fall within
the scope of the concessions.650 It notes that "products falling within this agreement and parts thereof"
is in the plural. Thus, it argues that the ordinary meaning of the term is therefore "of very limited
importance" because it explicitly refers to many other products covered by the agreement and
necessitates thus a contextual analysis to be understood".651
Consideration by the Panel
7.468 The Panel notes that in their arguments about the meaning and scope of the concession at
issue, the complainants have relied on various dict ionary definitions of the relevant terms of the
concession including technical dictionaries as well as more general dictionaries of the English
language. Given the terms involved, we are of the view that this is appropriate.
7.469 Before we begin our analysis of the specifi c terms used in the concession based on these
dictionary definitions, we recall the Appellate Body 's statement that, while dictionaries are a "useful
starting point" for the analysis of "ordinary mean ing" of a treaty term they "are not necessarily
dispositive".
652
7.470 As noted above, the complainants have focu sed their discussion on the phrase "flat panel
display devices", the word "for" and the phrase "pro ducts falling within this Agreement". We will
address these in turn.

645 European Communities' first written submission, para. 116.
646 European Communities' first written submission, paras. 135-136 (emphasis original).
647 European Communities' first written submission, para. 136 (emphasis original).
648 Chinese Taipei's second written submission, para. 162.
649 Chinese Taipei's first written submission, paras. 241 and 243-245.
650 European Communities' first written submission, para. 114.
651 European Communities' first written submission, para. 115.
652 Appellate Body Report on EC – Chicken Cuts , para. 175 (citing the Appellate Body Reports on:
See also the Appellate Body Reports on: China – Publications and Audiovisual Products , para. 348;
India - Additional Import Duties, para. 167, fn. 324; and US – Offset Act (Byrd Amendment), para. 248.

7.471 We note that the parties have not addressed to any degree the phrase "(including LCD, Electro
Luminescence, Plasma, Vacuum-Fluorescence and ot her technologies)" that appears in the
concession, except to note the reference to "LCD" technology when interpreting the meaning of the
descriptor "flat panel display devices"
653. Thus, we will not address it here . In addition, the parties did
not specifically address the term "and parts thereof" that appears at the end of the of the FPDs
narrative description. The parties have agreed that the focus in this dispute should be on finished or
complete products.654 As semi-finished products are not at issue, and based on the parties' comments
regarding semi-finished products, we will not address the question of what tariff treatment should be
extended to semi-finished displays or component pa rts. Accordingly, we will not evaluate the term
"and parts thereof" in the narrative description.
"Flat panel display devices"
7.472 The complainants have offered a number of definitions from both ordinary and technical
dictionaries to define the terms "Flat panel disp lay devices". Dictionary definitions should not be
considered as the sole basis for est ablishing the ordinary meaning of a term or terms in a treaty.
However, the Panel does note a high degree of cons istency among the definitions of the individual
terms and the technical definitions that have been provided by the parties. Based on a technical
definition from the 2002 Microsoft Computer Dictionary and a government website reference
655, the
United States offers that a "flat pa nel display device" is "a type of monitor that is thinner ... than
devices using conventional cathode ray tube (CRT ) technology". 656 In reference to individual
definitions of the terms "flat", "panel", "display" and "devices" as well as a technical definition of the
compound word "panel display" from the McGraw-Hill Dictionary of Scientific and Technical Terms ,
and technical definitions of "flat panel display" and "device" from the Microsoft Computer Dictionary
and the Techweb On-line Dictionary , Chinese Taipei submits that a "flat panel display device" is
among other things a "thin board" or "display" that is designed for "visual presentation of data or
signals" or "reproduction of signals from ADP machines".657
7.473 In the Panel's view, both the ordinary and tec hnical dictionary definitions support the United
States' and Chinese Taipei's descriptions. 658 We note in addition that the European Communities has
not proposed an alternative definition of these terms.
7.474 The European Communities critic ises the complainants' reliance on some dictionaries in
particular, the United States' and Chinese Ta ipei's reliance on the 2002 edition of the Microsoft
Computer Dictionary, arguing that a definition established more than five years after the conclusion
of ITA negotiations is not reflective of the meanin g of that term during that time. However, as
Chinese Taipei points out, the Panel notes that both the 1993 and 2003 McGraw-Hill Dictionary of
Scientific and Technical Terms , that pre- and post-date, the conclusion of the ITA, provide
comparable definitions of the terms in the phrase "Flat panel display devices" to support the

653 See, for instance, United States' first written subm ission, para. 121; Japan's first written submission,
654 See complainants' response to Panel question No. 51. Japan and Chinese Taipei expressed the view
that the EC concession for FPDs covers both finished and semi-finished products, but have focused only on
finished products. The European Communities stated that it considered "no legal argument is advanced
claiming that the European Communities would be in breach of its obligations in respect of semi-finished flat
panel display devices" (European Communities' response to Panel question No. 51).
655 Energy Star, LCD Basics, http://www.energystar.gov/index.cfm?c=monitors.lcd (Exhibit US-31).
656 United States' first written submission, para. 50.
657 Chinese Taipei's first written submission, para. 227.
658 The definition of "panel display" from the McGraw-Hill Dictionary refers to an "electronic display
... such as, electro-luminescent devices or light-emitting diodes" that form a "flat screen".

complainants' interpretation. The description from this dictionary is similar to that in the disputed
Microsoft Computer Dictionary . In particular, the McGraw-Hill Dictionary of Scientific and
Technical Terms refers to "an electronic display" in wh ich "devices, such as electro-luminescent
devices or light-emitting diodes, form a flat screen", noting this may be referred to as a "flat-panel
display". The Microsoft Computer Dictionary refers to "[a] video display with a shallow physical
depth, based on technology other than CRT (cathode ray tube)", of which the "LCD display" is a
"[c]ommon type of flat-panel display". Moreover, we note that the 1993 edition of the Shorter Oxford
Dictionary, through its description of a "panel" as a "thin board", and Techweb On-line Dictionary ,
through its indication that "[s]tand-alone LCD screen s became available for desktop computers in the
mid-1990s", support these definitions.
7.475 We note the definitions of the term "device" pr ovided by the complainants – that of "a thing
designed for a particular function or adapted for a purpose"
659. As noted by the parties 660, the fact that
the word was added based on a late proposal by Sw itzerland does not clarify the intentions behind the
inclusion of this word. Regardless, the parties have agreed here that the focus in this dispute should be
on finished or complete products and that th e term "device" appears in the EC Schedule. 661 Thus, we
do not consider it necessary to address the implications of the language for semi-finished products.
7.476 We disagree with the European Communities' contention that the inclusion of the plural of the
term "devices" somehow calls into question the comp lainants' conclusions on the textual analysis of
the terms "Flat panel display devices". We consider that the definition of "devices" is broad enough
to encompass the kind of finished products that ar e at issue in this dispute when interpreted in
accordance with the Vienna Conventi on. The parties have recognized that the concession is intended
to cover finished products, in addition to semi-finished ones.
7.477 Therefore, in light of the several dictionary definitions presented by the complainants, that
both pre- and post-date the time-frame in which the European Communities included the concession
for FPDs in the Annex to the EC Schedule, we conc lude that the plain meaning of the terms "Flat
panel display devices" refers to a type of apparatus that has a flat di splay and is generally thinner than
conventional CRT displays or monitors, and is designed for visual presentation of data or signals. We
further observe, based solely on our assessment of the terms "Flat panel display devices", that there is
no limitation on technical characteristics, such as screen size, dimension, refresh rate, dot-pixel ratio,
or other technical characteristics. There is also no limitation on the type of connector sockets it may
possess, such as VGA, s-video, DVI-I, DVI-D or HDMI. Moreover, we do not consider that the terms
"Flat panel display devices" in isolation, set any limitation on whether the apparatus may only display
or reproduce signals from automatic data-processing machines, or whether it may display signals from
multiple sources. This is reinforced by the pa renthetical language that immediately follows it
providing examples of the different technologies to be covered by the concession, including "LCD,
Electro Luminescence, Plasma, Vacuum-Fluorescence and other technologies." We now consider the
remaining terms in the description.

659 The Shorter Oxford Dictionary (1993), p. 655.
660 See the parties' response to Panel question No. 54; European Communities' first written submission,
para. 186, referring to Trade in Information Tec hnology Products: Result of Bilateral Consultations,
Communication from Switzerland, Geneva, 21 January 1997 (Exhibit EC-29).
661 See complainants' response to Panel question No. 51.

"for"
7.478 We recall that the complainants have focused on a limited category of finished flat panel
display devices.
662 We will confine our analysis of the term s as they would apply to such types of
devices. While it is not obvious why the word "for" would have a different meaning in other contexts,
the Panel does not consider it is necessary to make a ruling in this regard.
7.479 The complainants have indicated that the te rm "for", among other meanings, can mean "a
function word to indicate purpose" and "to be receive d by, to belong to". The European Communities
has not proposed alternatives to the definitions provided by the complainants.
7.480 In our view, use of the word "for" in the narra tive description at issue is intended to limit the
coverage of the concession to those flat panel display devices that have as a purpose operation with
products described in the concession as "products falling within this agreement". We note the
complainants have limited their arguments to discussing automatic data-processing machines. We
therefore focus our analysis here on automatic data -processing machines, and not other products. Flat
panel displays must be "designed for use" with an automatic data-processing machine. In the Panel's
view, the mere capability of a flat panel display device to connect to an automatic-data-processing
machine, for example, would not necessarily mean that the flat panel display device was "for" use
with an automatic-data-processing machine. Japan has argued that the concept of "for" should
encompass being "capable of operating with a comput er". In our view, mere use, or capability to
connect to an automatic data-processing machine w ould not fit within the notion of "for products
within this Agreement". As Japan explained 663, if a device is capable of connecting to a device in
some minimal respect, i.e., it receives and reproduces signals for viewing, but the displayed image or
signal is not of acceptable quality or of practical use, that would not be enough to satisfy the
concession. Thus, under the concession, we consider an objective assessment of the product would be
required, taking into consideration elements such as image quality, resolution, screen size in relation
to the particular product range of applications, and so forth.
7.481 Such an interpretation does not in our view im ply exclusivity, such that a device must be
"solely" for, or "only" for use with an automatic data-processing machine. In our view, it is not
appropriate to read in such words, as the European Communities suggests 664. Had the drafters
intended such exclusivity then they would have incl uded those terms or similar ones. However, they
have not.
"products falling within this Agreement"
7.482 We explained in the preceding section that th e word "for" in this context means "designed
for" and encompasses the capability to operate wi th products falling within the ITA, including
automatic data-processing machines. We said that this implies an ability to operate with an acceptable
or functional level of operation, as opposed to me re incidental ability to achieve a connection.
However, we explained that the concession does no t provide that flat panel display devices must
exclusively connect with an automatic data-proces sing machine or other product covered by the ITA,
nor the manner in which that connection should be achieved. We also indicated that we would limit

662 See para. 7.471 above.
663 Japan's second oral statement, para. 71. Japan argues that, even a flat panel display with a DVI
connector may not necessarily be "for" a computer, if for instance, it can recei ve and display television signals.
It argues that other factors would help determine this, such as the resolution of such flat panel display device
(Japan's second oral statement, para. 71).
664 European Communities' first written submission, para. 116.

our analysis of the terms as they apply to these products, and would not address semi-finished or other
products, or parts of products.
7.483 We thus do not consider it relevant or neces sary to assess the full gamut of products within
the ITA Agreement that would be subject to the c oncession. In other words, we do not consider it our
task to determine all the products that would be capab le of operating with the products at issue in this
dispute. Rather, we consider our task to be to determine whether the concession covers those products
at issue, namely those that are designed for u se with automatic data-processing machines (which,
undisputedly, fall within the ITA), as well as, poten tially, with sources other than automatic data-
processing machines.
7.484 Based on our assessment of the plain meanings of the terms above, we disagree that the use of
the plural in the term "product s" limits the "importance" of ascertaining the ordinary meaning of the
phrase because it refers to many products covered by the agreement.
665 In our view, the phrase is self-
explanatory and refers to all products falling within the ITA.
Preliminary conclusion on the meaning of the FPDs narrative description
7.485 Based on the foregoing assessment, we preliminaril y conclude that the concession refers to
certain apparatus or devices that have a flat disp lay and are generally thinner than conventional CRT
displays or monitors, and are designed for visual presentation of data or signals from products falling
with in the ITA, including notably, automatic da ta-processing machines. We find preliminarily that
there is no express limitation on technical characteristics, such as screen size, dimension, refresh rate,
dot-pixel ratio, or othe r technical characteristics, including no express limitation on the type of
connection or sockets it may possess, such as DVI. Mo reover, we conclude that while the flat panel
display devices at issue must be designed for use with an automatic data-p rocessing machine there is
no requirement for exclusivity, such that the c oncession would be limited to apparatus that only
display or reproduce signals from products falling within the ITA, including automatic data-
processing machines.
(iv) The terms of the FPDs narrative description in their context
7.486 The complainants have argued that other narrative descrip tions that appear in the Annex to
the EC Schedule provide relevant context that further supports their interpretation of the FPDs
narrative description.
7.487 The European Communities has referred to other parts of its Schedule, including
descriptions in the tariff item numbers notified in connection with the FPDs narrative description, and
the concessions in other ITA participants' WTO Sc hedules in support of their interpretation of the
FPDs narrative description as it appears in the Annex to the EC Schedule.
Other parts of the EC Schedule as context
7.488 The Panel recalls that the Appellate Body explained in EC – Chicken Cuts , that context in a
Member's Schedule may include "other terms" in the same heading or chapter.666 We will consider the
parties' arguments surrounding whether various elem ents found in the EC Schedule, including other
descriptions in the Annex to the EC Schedule, inform the interpretation of the FPDs narrative
description.

665 See European Communities' first written submission, para. 115.
666 Appellate Body Report on EC – Chicken Cuts, para. 193.

The descriptions in the 14 tariff item numbe rs in connection with the FPDs narrative
description as context
7.489 The European Communities argues that the 14 tariff item numbers that were notified in
connection with the FPDs narrative description in th e Annex to the EC Schedule provide relevant
context for the Panel's interpretation. The tariff item numbers provide as follows:
" 8471 60 90
: Automatic data-processing machines and units thereof; magnetic or
optical readers, machines for transcribing data onto data media in coded form and
machines for processing such data, not else where specified or included; - Input or
output units, whether or not containing storage units in the same housing; -- Other; ---
Other
8473 30 10: Parts and accessories (other than covers, carrying cases and the like)
suitable for use solely or principally with machines of heading Nos 8469 to 8472; -
Parts and accessories of the machines of heading No 8471 -- Electronic assemblies
8473 30 90
: Parts and accessories (other than covers, carrying cases and the like)
suitable for use solely or principally with machines of heading Nos 8469 to 8472; -
Parts and accessories of the machines of heading No 8471; -- Other
8531 20 30
: Electric sound or visual signalling a pparatus (for example, bells, sirens,
indicator panels, burglar or fire alarms), other than those of heading No 8512 or 8530
- Indicator panels incorporating liquid cr ystal devices (LCD) or light emitting diodes
(LED); --Other; --- Incorporating light emitting diodes (LED)
8531 20 51
: Electric sound or visual signalling a pparatus (for example, bells, sirens,
indicator panels, burglar or fire alarms), other than those of heading No 8512 or 8530
- Indicator panels incorporating liquid cr ystal devices (LCD) or light emitting diodes
(LED); --Other; --- Incorporating liquid crystal devices (LCD); ---- Incorporating
active matrix liquid crystal devices (LCD); ----- Colour
8531 20 59
: Electric sound or visual signalling a pparatus (for example, bells, sirens,
indicator panels, burglar or fire alarms), other than those of heading No 8512 or 8530
- Indicator panels incorporating liquid cr ystal devices (LCD) or light emitting diodes
(LED); --Other; --- Incorporating liquid crystal devices (LCD); ---- Incorporating
active matrix liquid crystal devices (LCD); ----- Black and white or other
monochrome
8531 20 80
: Electric sound or visual signalling a pparatus (for example, bells, sirens,
indicator panels, burglar or fire alarms), other than those of heading No 8512 or 8530
- Indicator panels incorporating liquid cr ystal devices (LCD) or light emitting diodes
(LED); -- Other; --- Other
8531 80 30
: Electric sound or visual signalling a pparatus (for example, bells, sirens,
indicator panels, burglar or fire alarms), other than those of heading No 8512 or 8530;
- Other apparatus; -- Other; ---Flat panel display devices
8531 90 10: Electric sound or visual signalling a pparatus (for example, bells, sirens,
indicator panels, burglar or fire alarms), other than those of heading No 8512 or 8530;
- Parts; -- Of apparatus of subheading No 8531 20

8531 90 30
: Electric sound or visual signalling a pparatus (for example, bells, sirens,
indicator panels, burglar or fire alarms), other than those of heading No 8512 or 8530;
- Parts; -- Of apparatus of subheading 8531 80 30
9013 80 11: Liquid crystal devices not constituting articles provided for more
specifically in other headings; lasers, other than laser diodes; other optical appliances
and instruments, not specified or included el sewhere in this Chapter; - Other devices,
appliances and instruments; -- Liquid crystal devices; --- Active matrix liquid crystal
devices; ---- Colour
9013 80 19
: Liquid crystal devices not constituting articles provided for more
specifically in other headings; lasers, other than laser diodes; other optical appliances
and instruments, not specified or included el sewhere in this Chapter; - Other devices,
appliances and instruments; -- Liquid crystal devices; --- Active matrix liquid crystal
devices; ---- Black and white or other monochrome
9013 80 30
: Liquid crystal devices not constituting articles provided for more
specifically in other headings; lasers, other than laser diodes; other optical appliances
and instruments, not specified or included el sewhere in this Chapter; - Other devices,
appliances and instruments; -- Liquid crystal devices; --- Other
9013 90 10: Liquid crystal devices not constituting articles provided for more
specifically in other headings; lasers, other than laser diodes; other optical appliances
and instruments, not specified or included elsewhere in this Chapter; - Parts and
accessories; -- For liquid crystal devices (LCD)"
7.490 The Panel will consider the parties' arguments below.
Arguments of the parties
7.491 The European Communities argues that the descriptions in the 14 tariff item numbers that
were notified in connection with the FPDs narrativ e description in the Annex to the EC Schedule
demonstrate that the FPDs concession covers many different headings, which in turn cover many
different products. In terms of coverage, the European Communities points out that the list does not
include HS1996 subheadings 8528 12 and 8528 13, or 8528 21 and 8528 22, which, it argues reflects
its dutiable concessions concerning televisions and video monitors. The European Communities
argues that only tariff item number 8471 60 90 is relevant for the Panel's consideration of the products
in question because, it argues, this code is the so le code where the complainants claim multifunctional
LCD monitors belong in the EC Schedule. By iden tifying this code next to the narrative description
for FPDs, the European Communities argues that it is committed to applying no duties on these
devices "to the extent some of them would be considered to fall within this tariff heading". It notes, in
addition, that tariff item number 8471 60 90 was notifie d next to four other narrative descriptions: for
"Network equipment (...)", "Monitors: (...)", "Plotters whether input or output units (...)" and
"Projection type flat panel display units (...)".667
7.492 The United States argues that the tariff item numbers next to the product descriptions in the
Annex to the EC Schedule merely reflect the types of products the European Communities at the time
considered were covered by its Attachment B concessi ons. It argues that the mere fact that HS codes
may indicate some products covered by the EC concessions does not mean however, the codes

667 European Communities' first written submission, paras. 125-127.

themselves are the concession. Furthermore, the United States notes that participants identified
different codes, indicating no consensus with regard to classification.
668
7.493 Japan argues that the tariff item numbers listed in the Annex to the EC Schedule may only
serve to illustrate the range of products that might fall within the scope of the narrative description or
provide limited context. 669 Japan submits that any other interp retation would defeat the purpose of
Attachment B, since the HS was viewed as t oo limiting for defining the scope of Attachment B-
related concessions. 670 In its view, the fact that different countries included different codes cannot
mean that the language of concessions means different things to different countries. Instead the codes
are limited to showing that different countries have different national systems for classifying the same
underlying product scope defined by the language of the concessions. By viewing the HS codes as
illustrative, Japan argues that the Panel will "preserve the integrity of the Attachment B approach as
going beyond the HS nomenclature". Otherwise, it argues, countries could "trump or restrict" the
meaning of the language of the concession that had been agreed upon.
671
7.494 Chinese Taipei argues that the 14 tariff item numbers are the headings which the European
Communities considers to be affected by the concession within the FPDs narrative description.
However, it argues the scope of the concessions pursu ant to Attachment B cannot be defined by the
scope of specific HS headings or tariff item numbers. 672 The codes, it argues, are "evidence" of how
the European Communities considered the Attachment B concession s hould be "translated" into the
CN, or to clarify the meaning. Chinese Taipei considers the fact that the European Communities
included "such an extensive list" of tariff item numbe rs in its Schedule "demonstrates that the parties
considered that the product description in Attachment B covers a very broad range of products based
on flat panel display technology".673 It argues that how an individual WTO Member gives examples of
the scope of its WTO commitments, however, cannot substitute for the determination of the common
intention of all WTO members. 674 Chinese Taipei argues that none of the 14 tariff item numbers can
be interpreted to exclude flat panel display devi ces that are capable of receiving signals both from an
ADP machine and other sources. 675 Thus, it argues that the tariff item numbers do not support the
proposition that FPDs are not covered by that concession if they are able to be connected to apparatus
other than automatic data-processing machines. 676
Consideration by the Panel
7.495 The Panel recalls its preliminary finding that the FPDs narrative description determines the
scope of the concession, no matter where it is classified in the EC Schedule, and that the tariff item
numbers appearing alongside the product descriptions do not have the effect of controlling the scope
of coverage arising from the ordinary meaning of the product descriptions.677
7.496 Aside from their reference in the Annex to th e EC Schedule, these CN codes also appear
elsewhere in the EC Schedule together with their associated six-digit HS subheading descriptions.

668 United States' response to Panel question No. 116.
669 Japan's second written submission, para. 160.
670 Japan's response to Panel question No. 116.
671 Japan's second written submission, para. 161.
672 Chinese Taipei's response to Panel question No. 116.
673 Chinese Taipei's first written submission, paras. 256-257.
674 Chinese Taipei's response to Panel question No. 116.
675 Chinese Taipei's first written submission, paras. 259-263, 272-279.
676 Chinese Taipei's first written submission, paras. 279-280.
677 See para. 7.343 above.

7.497 As we noted above, the CN codes address a differe nt issue - they assist in the implementation
of Attachment B-related commitments by reflecti ng the classification intended by the European
Communities at that time. This was necessary due to th e participants' view that the approach taken in
Attachment A, namely specifying HS headings, was not feasible for products described in Attachment
B. As ITA participants notified different codes ne xt to the descriptions in many cases, we explained
that reliance on interpretation of those codes would not reflect the common intentions of participants
and could run contrary to an assessment of the objective meaning of the terms. We accordingly
decline to consider them further.
678
The narrative description for "monitors" as context
Arguments of the parties
7.498 The European Communities argues that the narrative description for "monitors" in its
Schedule is relevant context for determining the scope of the FPDs narrative description. In particular,
it argues that the exclusion of "televisions" in the concession for "monitors" is not limited to CRT
televisions but should be understood categorically to exclude all monitors which are able to function
as televisions because of their ability to receive a nd process televisions or vi deo signals, irrespective
of the technology used. It submits that CRT tec hnology was mentioned specifically in the monitors
concession because this was the technology that was used by televisions and monitors at the time
when the concessions were made.679 Finally, the European Communities notes that the last sentence of
the definition of monitors explicitly excludes "High De finition (HD)" televisions. In view of this, it
argues that it would not make sense to interpret the last sentence of the text relating to the definition
of 'monitors' as excluding only HD monitors that use the CRT technology from the scope of the
concessions while including HD monitors using other technologies because, it states "[m]ost
multifunctional LCD monitors in the market today are 'HD Ready'".680
7.499 The complainants argue that a separate concession for "m onitors" that appears in the Annex
to the EC Schedule is expressly limited to CRT monitors , which are not at issue in this dispute. They
submit that the use of the term "therefore" in th e sentence referring to the exclusion of televisions
indicates that the exclusion "is only to be read in conjunction" with the description of the CRT
monitor.681 Thus, the complainants reject the idea that th e exclusion of televisions is a "categorical"
exclusion, that also applies to "video monitors" or "monitors able to function as televisions because of
their ability to receive and process television or video signals".682

678 See para. 7.404 above. We note, nevertheless, that a cursory review of the remaining CN codes and
their descriptions does not inform us as to whether products falling under this heading must be used only with an
automatic data-processing machine or other products with in the product scope of the ITA, or may include "flat
panel displays" with DVI or other interfaces that may r eceive or reproduce signals fr om multiple sources. At a
minimum, the codes generally confirm the view that the FPDs narrative description was envisioned to cover
certain displays as finished products, in addition to semi-finished products. We recall from above however, that
semi-finished products are not in dispute. We therefore do not consider them in this dispute.
679 European Communities' first written submission, paras. 128-131.
680 European Communities' response to Panel question No. 53.
681 United States 'second written submission, para. 82; United States' response to Panel question No.
52; Japan's first oral statement, para. 50; Chinese Taipei's second written submission, para. 171; Chinese
Taipei's response to Panel question No. 52. If a general exclusion for televisions had been intended to apply
generally to the ITA, the United States argues that the exclusion would have been incorporated into Attachment
B independently (United States 'second written submission, para. 82).
682 United States 'second written submi ssion, para. 83; United States' seco nd oral statement, para. 32;
Japan's first oral statement, para. 50. The United States notes in addition that the ITA concession incorporated

7.500 Japan submits that the concession for "monitors" provides a specific carve-out for products
capable of receiving and processing television signals or other non-computer input signals.
683 It argues
that CRT technology is "distinct" from digital technolo gy employed in flat panel display devices, thus
preventing the carve-out from being a pplied to flat panel display devices. 684 In Japan's view, the
limitation to CRT-based technology demonstrates that drafters used restrictive language when they
intended to restrict the scope, which, it argues, is not the case for the concession for FPDs.685
7.501 Chinese Taipei considers that both CRT and digital t echnology existed at the time of the
concessions; thus, it submits there is no basis to concl ude that the exclusion of televisions also applies
to the concession for FPDs.686
Consideration by the Panel
7.502 The parties have identified the following langua ge that appears in the Annex to the EC
Schedule:
"Monitors: display units of automatic da ta-processing machines with a cathode ray
tube with a dot screen pitch smaller than 0,4 mm not capable of receiving and
processing television signals or other analogue or digitally processed audio or video
signals without assistance of a central processing unit of a computer as defined in this
agreement. The agreement does not, theref ore, cover televisions, including high
definition televisions."687
7.503 As evident from the text, the device must be CRT-based, and cannot be capable of receiving
and processing signals independent of connection with an automatic data-processing machine. The
Panel notes that this restriction is limited to CRT monitors, and does not appear in the concession
relating to flat panel display devices for automatic data-processing machines.
7.504 We also note the concluding text "[t]he agre ement does not, therefore, cover televisions,
including high definition televisions".
688 On its face, this statement relates directly to the concession

from Attachment B expressly covers "computers capable of receiving and processing television and other video
signals", thus calling into question the basis for a categorical exclusion of monitors able to function as
televisions (United States 'second written submission, para. 84).
683 Japan's first oral statement, para. 50.
684 Japan's second written submission, para. 165; Japan's response to Panel question No. 52. Japan also
finds support for the distinction historically, submitting that CRT monitors capable of receiving and processing
televisions signals existed in 1996, such that "the desire explicitly to exclude televisions made sense" (Japan's
second written submission, para. 166).
685 Japan's second written submission, paras. 163-164; Japan's first oral statement, para. 50; Japan's
response to Panel question No. 52.
686 Chinese Taipei's second written submission, para. 173.
687 Exhibit US-7. The Panel notes that the descriptio n as it appears in the IT A is drafted differently,
with the sentence referring to the exclusion of televisions in a separate paragraph from the description of
monitors. In addition, the exclusion concludes with a footnote which indicates that the "[p]articipants will
conduct a review of this product description in January 1999 under the consultation provisions of paragraph 3 of
the Declaration".
688 The Panel takes note of footnote 3 to the last sentence of the "Monitors" description, as it appears in
Attachment B of the ITA, which provides: "Participants will conduct a review of this product description in
January 1999 under the consultation provisions of para graph 3 of the Declaration". The European Communities
argues that a "restrictive interpretation seems to be conf irmed by the presence of [this footnote]" and that the
definition of monitors appearing in Attachment B "constitute[d] the common denominator upon which all
parties could agree by the time of signature of the Ag reement" (see European Communities' response to Panel

immediately preceding it, namely CRT monitors with particular characteristics. While the term
"television" is not defined in the ITA, or in th e Annex to the EC Schedule, the use of the word
"therefore" implies a definition of "television" th at is limited to CRT technology, and which is
incapable of receiving and processing television signals or other analogue or digitally processed audio
or video signals without the assistance of a central processing unit of an automatic data-processing
machine. While this may be a limited definition of the word "television", the Panel notes that the
drafters of the ITA had the option of adding similar restrictions on the concession relating to FPDs for
ADPs but yet did not.
7.505 We observe that a Member, when making a comm itment pursuant to Article II of the GATT
1994, may choose precise, even exclusive, terms and conditions to qualify or limit the scope of
coverage. These include terms and conditions that w ould limit coverage to a particular product based
on its physical attributes, dimensions, technical characteristics or features. A Member may also refer
to a particular classification or tariff heading to define or limit the scope of a concession. The
determination of the scope of coverage comes from the meaning of the terms of that commitment.
For this reason, a panel should not read qualifications into a commitment that are not there.
7.506 We recall our preliminary conclusion, based on the text of the FPDs narrative description that
flat panel display devices that are "for" products fa lling within the ITA, are covered by the FPDs
narrative concession. We preliminarily concluded based on the plain meaning of the term "for" that
such devices must be "designed for" or capable of providing an acceptable level of operation, to fall
within the concession. We did not find, however , that the text of the concession imposed any
exclusivity requirement pertaining to which sources a flat panel display device could connect to, nor
did we determine a requirement as to with which connectors such a display may be fitted.
7.507 In contrast, we note that the "monitors" narrative description in the Annex to the EC Schedule
is detailed and limited to CRT monitor units of au tomatic data-processing machines with a precise dot
screen pitch that are not capable of receiving a nd processing television signals or other analogue or
digitally processed audio or vi deo signals without assistance of a central processing unit of an
automatic data-processing machine as defined in the ITA.
7.508 We do not understand the complainants to claim th at all display devices or monitors, such as
televisions using LCD or other non-CRT technologies, necessarily, would fall within the meaning of
the FPDs narrative concession. Rather, the complainan ts have requested the Panel to find that the
measures at issue are inconsistent with the Europ ean Communities' obligations under Article II of the

question No. 61). The inclusion of this footnote in connection with the statement that "[t]he agreement does not,
therefore, cover televisions, including high definition televisions" suggests that the ITA drafters perhaps
envisioned that the product description would be inadequate to fully address the objective of excluding
"televisions" from coverage under the agreement and should th erefore, be subject to revi ew. In this sense, it is
foreseeable that the drafters anticipat ed that technologies other than CRT-b ased displays may be incorporated
into televisions, and that televisions with different technologies, such as LCD or plasma, might also need to be
excluded. It is also possibl e however, that this footnote refers to th e description in its entirety, and was simply
placed at the end of the full description. This may sugge st that ITA participants were uncertain as to whether
the full gamut of possible "monitor" technologies were discussed, or that the scope of the description was
reflected as intended. However, neither interpretation is supported by the text in isolation, nor have parties
provided any persuasive evidence to substantiate either view. The European Communities contends that Japan
requested such a review in accordance with footnote 3 of the ITA Annex, but this "led to no change" (see
European Communities' response to Panel question No. 61). Finally, we note that the Annex to the EC
Schedule does not include this footnote or any reference to it. In light of the foregoing, the Panel is unable to
draw broad conclusions on the excl usion for televisions, and its app licability beyond the description for
"Monitors".

GATT 1994 because they apply per se rules, requiring that all devices that are fitted with a DVI, for
instance or those that are capable of receiving or reproducing signals from sources other than an
automatic data-processing machine are necessarily excluded from duty-free coverage. The
complainants have not indicated that they are challenging the European Communities' treatment of
"televisions" or products that are capable of re ceiving and processing tele vision signals or other
analogue or digitally processed audio or video signa ls without assistance of a central processing unit
of an automatic data-processing machine. Nor do we understand them to argue that all "televisions"
necessarily qualify as flat panel display devices under the concession.
7.509 The importance of the "exclusion" of televisions "categorically" in other descriptions would
require a treaty interpreter to as sess whether "television" would refer to products that are capable of
receiving and processing television signals without the assistance of a central processing unit of an
automatic data-processing machine. Thus, in addition to taking the step of treating the exclusion as
categorical and broadly applicable, the Panel would also be required to make a determination on the
intended meaning of the term "television". This analysis would take use beyond the complainants'
claims as well as the arguments before us. We do not consider it necessary to address this issue.
The narrative description for "network equipment" as context
Arguments of the parties
7.510 Japan argues that the language of the "network equipment" narrative description within
Attachment B confirms a "broad and inclusive" in terpretation of the concessi on for flat panel display
devices. In particular, Japan argues that the inclusion of limiting language "dedicated for use solely or
principally" in the description reflects the idea th at, where parties intended to require that the
equipment be dedicated for use solely or prin cipally with ADP machines, such language was
included. In its view, the absence of this language in the concession for FPDs is a reflection that the
limitation was not intended.
689
7.511 The European Communities argues that Japan's " a contrario" argument, based on the fact
that the narrative description for network equipmen t uses the words "solely or principally" in its
description, whereas the description for FPDs does not, fails to consider that the FPDs narrative
description explicitly refers to products "falling within this agreement". Further, it argues that the term
"for" does not necessarily exclude "solely or principally" in relation to a specific product.690
Consideration by the Panel
7.512 The parties have identified the following langua ge that appears in the Annex to the EC
Schedule:
"Network equipment: Local Area Network (LAN) and Wide Area Network (WAN)
apparatus, including those products dedicated for use solely or principally to permit
the interconnection of automatic data-p rocessing machines and units thereof for a
network that is used primarily for the sh aring of resources such as central processor
units, data storage devices and input or out put units including adapters, hubs, in line
repeaters, converters, concentrators, br idges and routers, and printed circuit

689 Japan's first written submission, paras. 281-283; Japan's second written submission, paras. 168-170.
690 European Communities' first written submission, para. 136.

assemblies for physical incorporation into automatic data-processing machines and
units thereof."
691
7.513 Japan and the European Communities highlight the terms "solely or principally" in the
concession.
7.514 We recall again that the complainants have requ ested the Panel to find that the measures at
issue are WTO-inconsistent because they apply per se rules, requiring that all devices that are fitted
with a DVI, for instance or those that are capabl e of receiving or reproducing signals from sources
other than an automatic data-processing machine, are necessarily excluded from duty-free coverage.
The complainants argue that the products they have identified fall within the scope of the FPDs
narrative description. In particular, they argue that the ordinary meaning of the term "for" in the
concession does not require that devices operate ex clusively with an automatic data-processing
machine to qualify for duty-free treatment under the concession.
7.515 Our task in this dispute is not to determine the meaning of the terms "solely or principally", as
these terms do not appear in the FPDs narrative descri ption. Rather, Japan argues that these terms in
the context of the "network equipment" description in the Annex to the EC Schedule serve to
emphasize that the drafters used exclusionary language where it was intended.
7.516 In the preceding section, we explained that WTO Members may choose precise, exclusive
terms and conditions to define a concession or to limit the scope of coverage. However, Members
may otherwise choose broad language to define a concession. We preliminarily concluded based on
the plain meaning of the terms in the FPDs concessi on, that coverage was at least broad enough to
include flat panel display devices that could conn ect to sources other than automatic data-processing
machines, as long as those displays were "for" products falling within the ITA.
7.517 The network equipment concession shows that nego tiators were well aware of concepts such
as "solely" and "principally", which are also con cepts used in the HS. These terms do not appear in
the FPDs narrative description, however, and we have taken that into consideration in our assessment
of the text of the FPDs description. Notably, we consider the absence of the terms "solely" or
"principally" to suggest a broader reading.
The narrative descriptions for "projection ty pe flat panel display units used with
automatic data-processing machines..." and "multimedia upgrade kits for automatic
data-processing machines..." as context
Arguments of the parties
7.518 Japan argues that the word "can" used in the concession for "projection type flat panel
display units..." in the Annex to the EC Schedul e informs the interpretation of the FPDs narrative
description. In particular, it argues that "can" me ans that "dual or multiple usages for the unit is
contemplated"
692, or that any device that "'can' display digital information from the computer will be
covered".693 In its view, both devices under the FPDs and "p rojection type flat panel display units..."
concessions are "for" computers if they have th e "ability to display information from an ADP
machine".694 Japan additionally argues that the language of the description for projection type flat

691 Exhibit US-7.
692 Japan's first written submission, para. 285.
693 Japan's second written submission, para. 171.
694 Japan's first written submission, para. 287; Japan's second written submission, para. 172.

panel display units does not include express limita tions like in the concessions on "Monitors" or
"Network equipment.
695
7.519 Chinese Taipei considers that because the concession fo r "projection type flat panel display
units..." is limited to those that are "used with ADP machines..." means that the phrase "for products
falling within this agreement" includes FPDs, even though they may be able to be connected to
apparatus other than ADP machines. It consider s this is the case because the scope of products
"falling within the ITA" is broader than "ADP mach ines". Chinese Taipei argu es that it is "sufficient
that the display unit can, i.e., is able to, display information from an ADP machine in order to fall
under the scope of the ITA". It argues "there is no reason why a stricter requirement would be
applicable to the FPDs concerned in this dispute, which also rely on flat panel display technology".696
7.520 The European Communities disputes that the use of the word "can" in the "projection type
flat panel display units..." con cession contemplates dual or multiple usages, and that such an
interpretation can be extended to interpret the FPDs concession. 697 The European Communities
contends that the concession for pr ojection type flat panel display units refers to a "very specific
finished product" used with automatic data-processing machines". Therefore, it considers that, even if
a projection type flat panel display unit could di splay signals from sources other than an automatic
data-processing machine, it remains covered by the d escription for projection type flat panel display
provided that the display is solely or principally of a kind used with an automatic data-processing
machine.698
7.521 Chinese Taipei additionally argues that because the concession for "multimedia upgrade kits
for automatic data-processing mach ines..." is limited by the term s "for automatic data-processing
machines", means that the phrase "for products fa lling within this agreement" within the FPDs
description, is broader. It considers this is the case because the scope of pr oducts "falling within the
ITA" is broader than "ADP machines".699
Consideration by the Panel
7.522 The "projection type flat panel display units..." narrative description provides as follows:
"Projection type flat panel display units used with automatic data-processing
machines which can display digital informa tion generated by the central processing
unit."700
7.523 The multimedia upgrade kits for automatic da ta-processing machines' narrative description
provides as follows:
"Multimedia upgrade kits for automatic data -processing machines, and units thereof,
put up for retail sale, consisting of, at least, speakers and/or microphones as well as a

695 Japan's second written submission, para. 172.
696 Chinese Taipei's first written submission, paras. 248-249.
697 European Communities' first written submission, para. 137.
698 European Communities response to Panel question No. 61. The European Communities argues that
it would be more appropriate to compare the definition of "projection type flat panel displays" and "monitors"
because these definitions are both specifically defined as "display units" of or used with computers".
699 Chinese Taipei's first written submission, para. 248.
700 Exhibit US-7.

printed circuit assembly that enables the ADP machines and units thereof to process
audio signals (sound cards)."
701
7.524 The "projection type flat panel display units ..." narrative description contains the terms " used
with automatic data-processing machines". (emphasi s added) The "multimedia upgrade kits for
automatic data-processing machines..." narra tive description contains the terms " for automatic data-
processing machines". (emphasis added)
7.525 We are of the view that the phrase "automatic data-processing machines" in both of these
concessions is in principle narrower than the phras e "products falling within this agreement" that
appears in the FPDs narrative description. Howeve r, the issue before us, as reflected in the
preliminary conclusions reached above requires us to assess the ordinary meaning of the term "for" in
the FPDs narrative concession. We concluded that th e term "for" in the description meant that such
devices must be designed for or capable of providing an acceptable level of operation, to fall within
the concession. Furthermore, we concluded prelim inarily that the text of the FPDs concession does
not impose any exclusivity requirement with regard to which sources a flat panel display device could
connect, nor did we determine a requirement as to with which connectors such a display may be fitted.
7.526 In the context of interpreting the FPDs narrative description we are not required to interpret
the terms "used with" as they appear in the "Proj ection type flat panel display units..." concession.
Rather we are asked to consider wh ether they inform or shed light on our interpretation. We consider
that the term "used with" is quite similar to "for", but the term "can" seems broader. We also observe
that the phrase "products falling within this agreemen t" is broader than the term "automatic data-
processing machines".
7.527 With respect to the use of "for" in the "multi media upgrade kits for automatic data-processing
machines...", we note that the concession is elabor ated in significant detail, referring not only to
automatic data-processing machines, but specifically to those types of automatic data-processing
machines that fully comply with the terms of the concession, e.g., those put up for retail sale,
consisting of, at least, speakers and/or microphones as well as a printed circuit assembly that enables
the ADP machines and units thereof to process audio signals. We again recall, WTO Members
frequently choose to draft both precise, even exclusive terms and conditions to define a concession, as
well as to draft concessions in broader terms. In our view, given the considerable detail in which the
concession is expressed as compared to the approach used for the FPDs narrative description, we do
not consider that this description assists us with the interpretative issue before us.
The WTO Schedules of other WTO Members
7.528 The European Communities argues that the Sc hedules of other ITA participants provide
relevant context to interpre t the FPDs narrative description. 702 The Panel recalls that the Appellate
Body explained in EC – Chicken Cuts , that other WTO Members' Schedules may provide relevant
context to interpret the terms in a particular Member's Schedule. 703 We will thus consider the
European Communities' arguments concerning the HS subheadings that other ITA participants
notified in the Schedules when implementing th eir ITA commitments. The European Communities
refers to a table summarizing the classification up to the HS subheading level (six digits) notified by

701 Exhibit US-7.
702 European Communities' first written submission, paras. 142-145.
703 Appellate Body Report, EC – Chicken Cuts, para. 193.

ITA participants based on modifications made via WTO document G/IT/2/Add.1 of 17 October
1997:
704
Classification of "Flat panel display devices (including LCD, Electro Luminescence, Plasma, Vacuum-
Fluorescence and other technologies) for products falling within this agreement and parts thereof" by ITA
participants in 1997
Sub-heading Number of participants
classifying in that subheading Main parties to the dispute
842490 1 -
847149 7 US
847160 24 EC, JA, TPKM, US
847310 1 -
847321 1 -
847329 1 -
847330 23 JA, US
847340 1 -
847350 1 -
851790 1 -
852290 1 -
852821 3 JA
852822 3 JA
852990 3 JA
853120 27 EC, JA, TPKM, US
853180 15 EC, US
853190 26 EC, JA, TPKM, US
854389 6 US
854390 8 US
854890 1 -
901320 4 JA
901380 22 EC, JA, TPKM, US
901390 22 EC, JA, TPKM, US
901790 1 -

Arguments of the parties
7.529 The European Communities argues that the ITA participants' classification at the six-digit
level of "flat panel display devices" in 1997 (as refl ected in the above table) demonstrates what ITA
participants "understood" when commitments were made and approved by consensus. The European
Communities argues that the table shows that ITA participants considered not only HS subheading
8471 60 which covers inter alia "ADP monitors", but also HS subheadings 8528 21 and 8528 22
which cover "video monitors", as the "most relevant " codes for classifying FPDs. It submits further
that no ITA participant identified the codes for te levisions, whether 8528 12 or 8528 13, and that only
Japan, Iceland and Macao consider that "flat panel display devices" covers "video monitors".705

704 WTO document G/IT/2/Add.1 (17 October 1997) (Exhibit EC-14).
705 European Communities' first written submission, para. 144. According to the European
Communities, if the Panel were to adopt the complainants ' view that the FPDs narrative description determines
the scope of the concession, and not the HS headings /CN codes that were notified in connection with the
description, then the table demonstr ates a number of WTO and ITA members have either made commitments
without there being an obligation pursuant to the ITA, or there are a number of WTO breaches because of the
differences in classification. In its view, almost all parties would either have made unnecessary commitments

7.530 The complainants maintain the view that the language of the FPDs narrative description, and
not the HS headings or tariff item numbers notified by ITA participants in their respective WTO
Schedules, determines the scope of coverage of those products described in the concessions.
706
Consideration by the Panel
7.531 The Panel recalls from paragraph 7.445 above that the 14 tariff item numbers next to the
narrative descriptions in the EC Schedule do not li mit the concession. They only illustrate where the
European Communities considered relevant FPDs were classifiable at the time of implementation of
the ITA. Accordingly, we will only make a few poi nts regarding the table presented by the European
Communities.
7.532 The European Communities submitted as exhibits two separate WTO Secretariat reports that
summarize the HS subheadings listed by ITA particip ants: the table above, describing the situation in
1997, as well as a document assessing the practice of ITA parties between 1997 and 1999.707 Both the
WTO Secretariat reports and the tables submitte d by the European Communities, however, wrongly
mention that Japan notified HS headings next to narrative product descriptions. Japan's schedule,
however, did not make mention of the headings.708
7.533 In light of this error, the Panel conducted its own assessment of the information as presented
below:709
HS
subheading
(up to six
digits)
Number of
schedules
listing the
relevant
subheading
WTO Members/ITA participants that have listed at least one tariff line in
their respective schedule:
842490 1 Korea
847149 14 Australia; Bahrain; Hong Kong, China; El Salvador; Indonesia; Korea;
Oman; Peru; Philippines; Saudi Arabia; UAE; Ukraine; United States; Viet
Nam
847150 1 Saudi Arabia
847160 33 Australia; Bahrain; Canada; Costa Rica; Croatia; Dominican Rep.; El

and/or would be in breach of their obligations in respect of some product descriptions. (European Communities'
first written submission, para. 145).
706 United States' response to Panel question No. 116; Japan's second written submission, para. 160;
Chinese Taipei's first written submission, para. 256; Chinese Taipei's second written submission, para. 178.
Japan submits that any notified codes or headings many at most serve to "illustrate" the range of products that
might fall within the scope of the narrative description. Chinese Taipei argues that the codes may be used at
most to "clarify" the meaning of the FPDs narrative description.
707 These are WTO document G/IT/2/Add.1 (17 October 1997) (Exhibit EC-14) and document
G/IT/2/Add.1/Rev.1 (29 July 1999) (Exhibit EC-20). Both documents were prepared based on the ITA
participants' schedules of commitments, while the latt er document contains updated information, including the
addition of data for participants that had joined the ITA following the issuance of the first report, as well as
changes that were implemented by participants as rectifications or modifications.
708 See paragraph 7.432 above.
709 The Panel followed the same methodology used by the WTO Secretariat in pr eparing this table. A
particular Member is listed next to those HS subheadings if that Member has listed at least one national tariff
line in its schedule that falls under that HS subheadi ng. The following table summa rizes the HS subheadings
listed by the relevant 43 Members in their schedules of concessions, but does not include information on the
schedules of those EC member States that are jointly represented by the EC-27. These are: Bulgaria, Cyprus,
Czech Republic, Estonia, Latvia, Lithuania, Poland, Romania, Slovak Republic and Slovenia.

HS
subheading
(up to six
digits)
Number of
schedules
listing the
relevant
subheading
WTO Members/ITA participants that have listed at least one tariff line in
their respective schedule:
Salvador; European Communities; Egypt; Guatemala; Hong Kong, China;
Honduras; Indonesia; India; Iceland; Jordan; Kyrgyz Rep.; Korea; Macao,
China; Moldova; Nicaragua; New Zealand; Oman; Peru; Philippines; Saudi
Arabia; Chinese Taipei; Singapore; Switzerland/Liechtenstein; Turkey;
Ukraine; UAE; United States
847190 1 Egypt
847310 1 Korea
847321 2 Honduras; Norway
847329 2 Honduras; Norway
847330 31 Albania; Australia; Bahrain; Canada; Costa Rica; Croatia; El Salvador;
European Communities; Georgia; Hong Kong, China; Honduras; Indonesia;
India; Iceland; Jordan; Kyrgyz Rep.; Korea; Macao, China; Moldova;
Nicaragua; Norway; New Zealand; Oman; Peru; Saudi Arabia; Singapore;
Switzerland/Liechtenstein; Turkey; Ukraine; UAE; United States
847340 1 Korea
847350 2 Honduras; Norway
851790 1 Hong Kong, China
852290 1 Korea
852821 2 Iceland; Macao, China
852822 2 Iceland; Macao, China
852990 2 Iceland; Macao, China
853120 40 Albania; Australia; Bahrain; Canada; China; Costa Rica; Croatia;
Dominican Rep.; El Salvador; European Communities; Georgia; Guatemala;
Hong Kong, China; Honduras; Indonesia; India; Iceland; Israel; Jordan;
Kyrgyz Rep.; Korea; Macao, China; Moldova; Malaysia; Nicaragua;
Norway; New Zealand; Oman; Peru; Philippines; Saudi Arabia; Chinese
Taipei; Singapore; Switzerland/Liechtenstein; Thailand; Turkey; Ukraine;
UAE; United States; Viet Nam
853180 22 Albania; Australia; Bahrain; Canada; Croatia; El Salvador; European
Communities; Georgia; India; Israel; Kyrgyz Rep.; Moldova; Norway; New
Zealand; Oman; Saudi Arabia; Switzerland/Liechtenstein; Turkey; Ukraine;
UAE; United States; Viet Nam
853190 37 Albania; Australia; Bahrain; Canada; China; Costa Rica; Croatia;
Dominican Rep.; El Salvador; European Communities; Georgia; Guatemala;
Hong Kong, China; Honduras; Indonesia; India; Iceland; Israel; Jordan;
Kyrgyz Rep.; Macao, China; Moldova; Malaysia; Nicaragua; Norway; New
Zealand; Oman; Peru; Saudi Arabia; Chinese Taipei; Singapore;
Switzerland/Liechtenstein; Turkey; Ukraine; UAE; United States; Viet Nam
854190 1 Mauritius
854389 11 Australia; Bahrain; El Salvador; Hong Kong, China; Indonesia; Oman;
Philippines; Saudi Arabia; UAE; United States; Viet Nam
854390 12 Australia; Bahrain; El Salvador; Hong Kong, China; Indonesia; Korea;
Oman; Philippines; Saudi Arabia; Singapore; UAE; United States
854890 2 Canada; Viet Nam
901320 3 Iceland; M acao, China; Norway
901380 28 Albania; Australia; Bahrain; Canada; Croatia; El Salvador; European
Communities; Georgia; India; Iceland; Israel; Jordan; Kyrgyz Rep.; Korea;
Macao, China; Moldova; Malaysia; Norway; New Zealand; Oman; Saudi
Arabia; Chinese Taipei; Switzerland/Liechtenstein; Turkey; Ukraine; UAE;
United States; Viet Nam

HS
subheading
(up to six
digits)
Number of
schedules
listing the
relevant
subheading
WTO Members/ITA participants that have listed at least one tariff line in
their respective schedule:
901390 28 Albania; Australia; Bahrain; Canada; Croatia; El Salvador; European
Communities; Georgia; India; Iceland; Israel; Jordan; Kyrgyz Rep.; Korea;
Macao, China; Moldova; Malaysia; Norway; New Zealand; Oman; Saudi
Arabia; Chinese Taipei; Switzerland/Liechtenstein; Turkey; Ukraine; UAE;
United States; Viet Nam
901790 1 Korea

7.534 This table demonstrates considerable diverg ence in the HS subheadings listed by ITA
participants next to the FPDs narrative descrip tion. HS1996 subheading 8531 20, for instance,
appears in most of the ITA participants' Schedules. 710 This subheading pertains to "Electric sound or
visual signalling apparatus (for example, bells, sirens , indicator panels, burglar or fire alarms), other
than those of headings 8512 or 8530 - Indicator pa nels incorporating liquid crystal devices (LCD) or
light emitting diodes (LED)". The following HS1996 subheadings also appear in many of participants'
Schedules:
8471 60: Automatic data-processing machines and units thereof; magnetic or optical
readers, machines for transcribing data onto data media in coded form and machines
for processing such data, not elsewhere specified or included; - Input or output units,
whether or not containing storage units in the same housing.
8473 30: Parts and accessories of the machines of heading 8471.
8531 90: Electric sound or visual signalling a pparatus (for example, bells, sirens,
indicator panels, burglar or fire alarms), other than those of heading 8512 or 8530; -
Parts.
9013 80: Liquid crystal devices not constitu ting articles provided for more
specifically in other headings; lasers, other than laser diodes; other optical appliances
and instruments, not specified or included el sewhere in this Chapter; - Other devices,
appliances and instruments.
9013 90: Liquid crystal devices not constitu ting articles provided for more
specifically in other headings; lasers, other than laser diodes; other optical appliances
and instruments, not specified or included elsewhere in this Chapter; - Parts and
accessories.
7.535 The Panel's assessment of ITA participants ' Schedules reveals that HS1996 subheading
8471 60 was one of the subheadings that appear s most frequently in connection with the FPDs
narrative description.711 Their inclusion of subheading 8471 60 supports the view that a substantial
proportion of ITA participants considered that at least some flat panel display devices were "input or
output units" of automatic data-processing machines, but it also shows that many Members considered
that flat panel display devices were classifiable under other headings. As emphasized by the European

710 Egypt, Japan and Mauritius did not list HS subheading 8531 20 as relevant for FPDs.
711 The following Members did not list HS Subheading 8471 60 in connection with the FPDs narrative
description: Albania; China; Georgia; Israel; Japan; Malaysia; Mauritius; Norway; Thailand; and Viet Nam.

Communities, none of the ITA participants notifie d HS subheadings 8528 12 or 8528 13 pertaining to
televisions. Two Members listed HS subheadings 85 28 21 and 8528 22 pertaining to video monitors,
however, suggesting that at least some Members considered the ITA covered certain video monitors.
7.536 We confirm that we do not consider the tari ff item numbers listed next to the product
descriptions as definitive with respect to th e concession for FPDs. The information above,
demonstrating the varied approaches for classifying FPDs supports our approach that it is the product
description that governs for Attachment B products.
(v) Object and purpose
Arguments of the parties

7.537 The complainants note that a recognized object and purpose of the WTO Agreement and
GATT 1994 is providing security and predictably in the reciprocal and mutually advantageous
arrangements directed to the substantial reduction of tariffs and barriers to trade. 712 The complainants
also note that both the WTO Agreement and the GATT 1994 recognize "expanding the production and
trade in goods" as another core object and purpose that is furthered by reciprocal reductions in tariffs.
7.538 In addition, the complainants argue that the IT A may be relevant in analysing the object and
purpose of the GATT 1994 because the ITA is an instrument related to the GATT 1994. 713 The
United States argues that provisions in the ITA contradict the view that a digital product should no
longer be entitled to duty-free treatment simply because technology adva nces and that product
acquires additional features previously associated with other products. In its view, the ITA contains a
number of mechanisms to encourage technological development, including broad product coverage
and Attachment B.714 Japan submits that the overarching object and purpose of the WTO Agreement
and the GATT 1994 has been reinforced in the specific context of the ITA. In particular, Japan cites
the Ministerial Declaration on Trade in Informa tion Technology Products which expressed the desire
"to achieve maximum freedom of world trade in information technology products."715 Japan considers
that, it would be inconsistent with the object and purpose of the WTO Agreement and the GATT 1994
to reduce tariffs on a particular product, only to permit the re-imposition of those tariffs simply
because of some evolution in that product.716
7.539 Furthermore, the complainants argue that th e objectives of security and predictability also
require that concessions cover products even if they did not exist in that form at the time the
concessions had been granted to the extent that they comply with the wording of the concessions
concerned. Japan posits that the concession must c over all devices that fit s quarely within its terms
regardless of how their other functiona lity may change or improve over time. 717 Chinese Taipei

712 Complainants' response to Panel question No. 1; Japan's first written submission, paras. 172 (citing
paragraph 3 of the Preamble to the Marrakesh Agreement; Panel Report on China – Auto Parts, para. 7.460 and
Appellate Body Report on EC – Chicken Cuts , para. 243) and 288; Japan's second written submission, paras.
409-410; Chinese Taipei's first written submission, paras. 144-145; Chinese Taipei's second written submission,
para. 282.
713 United States' response to Panel question No. 1; Chinese Taipei's response to Panel question No. 1;
Chinese Taipei's second written submission, para. 15.
714 United States' second written submission, paras. 60-61.
715 Japan's first written submission, paras. 173 (citing Ministerial Declaration, WT/MIN(96)/16 adopted
13 December 1996, at Preamble, Page 1, Clause 4) and 29 0; Japan's response to Pa nel question No. 1; Japan's
second written submission, para. 411.
716 Japan's first written submission, paras. 290-292; Japan's second written submission, paras. 411-413.
717 Japan's first written submission, para. 177.

argues that to promote such security and predictab ility, in the first place, the interpretation of a
concession is to be limited by th e terms used in that concession.
718 Chinese Taipei argues that it
would run counter to such objec tives if the European Communities could exclude from the scope of
its concessions some apparatus just because they ar e more complete or more developed than when
they initially existed.719
7.540 The European Communities argues that the Panel should not conflate the object and purpose
of the ITA with that of the WTO Agreement. Furthermore, the European Communities argues that the
expansion of trade must be achieved through mutu ally advantageous arrangements. The European
Communities submits that there is no interpretativ e principle whereby tariff concessions must be
broadly construed in order to promote the expa nsion of trade between Members. The European
Communities considers the complainants' interpreta tive approach is overbroad and compromises the
legal certainty and predictability of tariff concessi ons, creating the risk that Members will become
reluctant to pursue the ITA liberalization process. 720
Consideration by the Panel
7.541 Article 31(1) of the Vienna Convention provides that:
"A treaty shall be interpreted in good faith in accordance with the ordinary meaning
to be given to the terms of the treaty in their context and in the light of its object and
purpose."
7.542 Article 31(1) of the Vienna Convention thus requires that a treaty must be interpreted in light
of that particular treaty's object and purpose. The Appellate Body in EC – Chicken Cuts explained
that the "starting point for ascertaining 'object and purpose' is the treaty itself, in its entirety.
721 As we
stated in paragraph 7.16 above, under Article II:7 of the GATT 1994 and Article II:2 of the WTO
Agreement, the concessions contained in the EC Schedule, including the Annex to the EC Schedule,
are treaty terms of the GATT 1994 and the WTO Agreement.
7.543 Accordingly, the Panel considers that the object a nd purpose that is relevant to our analysis is
the object and purpose of the treaty that is the subject of this dispute, namely the WTO Agreement, of
which the GATT 1994 and the EC Schedule are an integr al part. As stated in the preamble of the
WTO Agreement , one of the purposes is to "expand[] ... trade in goods and services". Members
should contribute to this objective "by entering into reciprocal and mutually advantageous
arrangements directed to the substantial reduction of tariffs and other barriers to trade".
7.544 Although the concessions in the EC Schedule are an integral part of the treaty, we also recall
the Appellate Body's explanation that treaty inte rpreters should not place too much weight on the
object and purpose of a particular concession in a Member's schedule, because "one Member's
unilateral object and purpose for the conclusion of a tariff commitment cannot form the basis' for an
interpretation of that commitment, because interpre tation in the light of Articles 31 and 32 of the
Vienna Convention must focus on ascertaining the common intentions of the parties."
722

718 Chinese Taipei's first written submission, pa ras. 289-290; Chinese Taipei's second written
submission, para. 444.
719 Chinese Taipei's first written submission, paras. 627-630.
720 European Communities' first written submission, paras. 170-172.
721 Appellate Body Report on EC – Chicken Cuts, paras. 238-239.
722 Appellate Body Report on EC – Chicken Cuts, paras. 238-239.

7.545 With respect to the relationship between th e object and purpose of the GATT 1994 generally
and a Member's tariff concessions in particular, the Appellate Body held in
Argentina - Textiles and Apparel that:
"a basic object and purpose of the GATT 1994, as reflected in Article II, is to
preserve the value of tariff concessions negotiated by a Member with its trading
partners, and bound in that Member's Sc hedule. Once a tariff concession is agreed
and bound in a Member's Schedule, a re duction in its value by the imposition of
duties in excess of the bound tariff rate would upset the balance of concessions
among Members."
723
7.546 In EC – Computer Equipment , the Appellate Body confirmed that the security and
predictability of the reciprocal and mutually advantageous arrangement s directed toward the
substantial reduction of tariffs a nd other barriers to trade is a recognized object and purpose of the
WTO Agreement, generally, as well as of the GATT 1994.724
7.547 We thus consider that tariff concessions made by WTO Members should be interpreted in
such a way as to further the objectives of preserving and upholding the "security and predictability" of
"the reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs
and other trade barriers to trade". This includes consideration of the general objective of the expansion
of trade and the substantial reduction of tariffs. Ho wever, a panel should take care not to disturb the
balance of reciprocal and mutually advantageous concessions negotiated by parties.725
7.548 In this case, the complainants have also argued that provisions of the ITA, a plurilateral
agreement that is separate from the WTO Agreement , are relevant in determining the object and
purpose of the WTO Agreement.726 We do not agree. While the WTO Agreement represents a mutual
agreement among all WTO Members, the ITA constitu tes a separate plurilateral arrangement made
among a subset of WTO Members and states and customs territories acceding to the WTO. Due to
the application of the MFN principle and Article II of the GATT 1994, the duty bindings and
eliminations agreed to by the ITA participants we re also extended to all WTO Members. However,
that does not mean that the objectiv es of the ITA participants of havi ng participants' tariff regimes
"evolve" in a manner that "enhances market access for information technology products" 727, or
"achiev[ing] maximum freedom of world trad e in information technology products" and
"encourag[ing] the continued technological developm ent of the information technology industry on a
world-wide basis"728 – can be considered a basis for determining the object and purpose of the WTO
Agreement and the GATT 1994. The ITA participants are a subset of the memb ership as a whole and
their intentions with respect to an agreemen t amongst themselves, while relevant context for
understanding the concessions they have made, are not material to a determination on the object and
purpose of the WTO Agreement and the GATT 1994.
7.549 In summary, the relevant object and purpose is the general object and purpose of the WTO
Agreement as a whole, including the GATT 1994, which is to provide security and predictability in
the reciprocal and mutually advantageous concessions negotiated by parties for the reduction of tariffs

723 Appellate Body Report on Argentina – Textiles and Apparel , para. 47; Panel Report on
EC - Chicken Cuts, para. 7.319.
724 Appellate Body Report on EC – Computer Equipment, para. 82; Panel Report on EC - Chicken Cuts,
para. 7.318.
725 See also Panel Report on EC – Chicken Cuts, para. 7.320.
726 Japan's first written submission, paras. 173-176. complainants' responses to Panel question No. 1.
727 Para.1 of the ITA.
728 Preamble of the ITA.

and other barriers to trade. In the Panel's view , the interpretation of the FPDs narrative description
described above is fully consistent with this object and purpose.
(vi) Subsequent practice (Article 31(3)(b) of the Vienna Convention)
7.550 The European Communities argues that the sp ecific classification practice of the United
States and the practice of ITA participants between 1997 and 1999 provide ot her relevant means to
interpret the FPDs narrative description.
729 The European Communities compares the table that
appears in paragraph 7.528 above, wh ich refers to HS subheadings no tified by ITA participants made
in 1997, with the following table reflecting the HS subheadings notified by ITA participants in
connection with the FPDs narrative description in 1999:730
Classification of "Flat panel display devices (including LCD, Electro Luminescence, Plasma, Vacuum-
Fluorescence and other technologies) for products falling within this agreement, and parts thereof" by ITA
participants in 1999
Sub-heading Number of participants
classifying in that subheading Main parties to the dispute
8424 90 1 -
8471 49 7 US
8471 60 28 EC, JA, TPKM, US
8473 10 1 -
8473 21 1 -
8473 29 1 -
8473 30 27 EC, JA, US
8473 40 1 -
8473 50 1 -
8517 90 1 -
8522 90 1 -
8528 21 3 JA
8528 22 3 JA
8529 90 3 JA
8531 20 32 EC, JA, TPKM, US
8531 80 18 EC, US
8531 90 29 EC, JA, TPKM, US
8541 90 1 -
8543 89 6 US
8543 90 8 US
8548 90 1 -
9013 20 4 JA
9013 80 26 EC, JA, TPKM, US
9013 90 26 EC, JA, TPKM, US
9017 90 1 -

7.551 In addition, Chinese Taipei argues that the Eu ropean Communities had consistently classified
LCD flat panel displays in duty-free heading 8471 until 2004. 731 Since 2004 and 2005, however,

729 European Communities' first written submission, paras. 174-177.
730 Exhibit EC-20.
731 Chinese Taipei's first written submission, paras. 291 and 295 (referring to BTIs classifying FPDs in
duty-free heading 8471) (Exhibit TPKM-54).

Chinese Taipei argues, the European Commun ities gradually began imposing duties on these
products.
732 Chinese Taipei submits that not all EC member States conformed with this approach.733
7.552 The Panel will consider the parties' views below.
Arguments of the parties
Classification practice of the United States
7.553 Citing a publication entitled " What Every Member of the Trade Community Should Know
About: Classification of Flat Panel Displays "734, the European Communities argues that the United
States has taken the same approach to limit classifi cation of ADP monitors to certain sizes and pixel
size configurations. The European Communities subm its that the United States itself classifies the
kind of monitors that the European Communitie s understands to be relevant to this case as video
monitors or televisions and not as output units of an ADP mach ine. In this respect, the European
Communities submits that "customs officials of th e United States have previously classified a number
of different multifunctional LCD monitors as vide o monitors pursuant to GIR 3(c)", including
products of various sizes, with or without a TV tuner, and with DVI connectors.735
7.554 The United States argues that its supposed classificati on practice provides no support for the
European Communities' view that its measures are consistent with its obligations, nor does it indicate
any particular "practice" on the part of the United States regarding monitors.736
Classification practice of ITA participants between 1997 and 1999
7.555 The European Communities argues that the classification practice of ITA participants
between 1997 and 1999, as referred to in WTO document G/IT/2/Add.1/Rev.1 of 29 July 1999 737,
provides information on classification divergences, incl uding those of new participants that joined the
ITA since 1997. The European Co mmunities argues that these data demonstrate a tendency towards
an increasing agreement on classification, with the exception of HS1996 subheading 8541 90.738

732 Chinese Taipei's first written submission, para . 292 (referring to Commission Regulation Nos.
754/2004 and 2147/2004 for plasma FPDs).
733 Chinese Taipei's first written submission, paras. 291, 298-299 and 304.
734 Exhibit EC-18.
735 European Communities' first written submission, paras. 174-175 (referring to Ruling of the
Commercial and Trade Facilitation Division, US Custom s and Border Protection ( 15 December 2006) (Exhibit
EC-19)).
736 United States' second written submission, para. 96 (The United States argues that the classification
of "LCD modules" – identified by the European Communities in Exhibit EC- 18 – is not at issue in this dispute.
Second, it argues, the reference to a single classifica tion ruling by Customs and Border Protection in Exhibit
EC-18, strictly illustrates that United States' customs authorities apply the "principal use" test when considering
the objective characteristics of a product. The United States argues that application of a principal use test is not
allowed under the EC measures at issue. Moreover, it argues that one classificati on instance does not support
the view that the EC measures at issue are consistent, no r does it indicate a particular "practice" on the part of
the United States regarding monitors).
737 Exhibit EC-20.
738 European Communities' first written submission, para. 177. In concluding on the data, the European
Communities states:
"[T]he number of participants identifying sub-headings 8471 60, 8473 30, 8531 20, 8531 80,
8531 90, 9013 80 and 9013 90 had increased while all the other headings where the number of
participants was below 10 and often only one or a few remained stable. Still no participants

7.556 The complainants argue that the European Communities' description of where it or other ITA
participants classify products that fall within th e FPDs narrative description is irrelevant since the
concession applies to a product wherever that product is classified.
739 In addition, Japan argues that
the presented data cannot be "subsequent practice" in the sense of Article 31(3)(b) of the Vienna
Convention because too few countries are invol ved and the practice is not consistent. 740 Chinese
Taipei argues that the only conclusion that can be take n from this "so-called" practice of ITA parties
is that ITA participants did not share a common classification.741
Consideration by the Panel
7.557 Article 31(3)(b) of the Vienna Convention states:
"3. There shall be taken into account, together with the context:
(b) any subsequent practice in the appli cation of the treaty which establishes the
agreement of the parties regarding its interpretation."
7.558 The Appellate Body in EC – Chicken Cuts observed that "'subsequent practice' in the
application of a treaty may be an important el ement in treaty interpretation because 'it constitutes
objective evidence of the understanding of the parties on the meaning of the treaty'."
742 The Appellate
Body based its comments on its earlier interpretation in Japan – Alcoholic Beverages II that
"subsequent practice" within the meaning of Ar ticle 31(3)(b) entails "...'concordant, common and
consistent' sequence of acts or pronouncements wh ich is sufficient to establish a discernible pattern
implying the agreement of the parties [to a treaty] regarding its interpretation". 743 Moreover, the
Appellate Body noted in US – Gambling that "subsequent practice" involves two elements: "...(i) there
must be a common, consistent, discernible pattern of acts or pronouncements; and (ii) those acts or
pronouncements must imply agreement on the interpretation of the relevant provision". 744 We recall
the statement by the Appellate Body in EC – Computer Equipment that "[i]nconsistent classification
practice, however, cannot be relevant in interpreting the meaning of a tariff concession".745
7.559 In establishing what may qualify as "common" and "concordant" practice, the Appellate Body
stated that, although not each and every party must have engaged in a particular practice for it to
qualify as a "common" and "concor dant" practice, it would be difficult to establish a "concordant,
common and discernible pattern" on the basis of acts or pronouncements of one, or very few parties to

identified the relevant sub-headings for te levisions and only Japan, Iceland and Macao
continued to identify video monitors as falling within the scope of the product definition of
'flat panel display devices (…)'. The continued important classification differences between
the complainants are also noteworthy."
(European Communities' first written submission, para. 177).
739 United States' second written submission, paras. 95-96; Japan's second written submission, para. 32;
Japan's second written submission, paras. 180-181; Chin ese Taipei's second written submission, para. 205.
Japan recalls its view that the codes are "illustrative" onl y, and represent a "range of products covered by the
concession itself" (Japan's second written submission, para. 181).
740 Japan's second written submission, para. 32; Japan's second written submission, para. 180.
741 Chinese Taipei's second written submission, paras. 205-206.
742 Appellate Body Report on Chicken Cuts , para. 255 (citing Yearbook of the International Law
Commission (1966), Vol. II, page 219, para. (6)); see also Panel Report on China – Auto Parts, para. 7.702.
743 Appellate Body Report on Japan – Alcoholic Beverages II, para. 106.
744 Appellate Body Report on US – Gambling, para. 192.
745 Appellate Body Report on EC – Computer Equipment, para. 95.

a multilateral treaty , such as the WTO Agreement.
746 The Appellate Body further found that if only
some WTO Members have actually engaged in a certain practice, that circumstance may reduce the
availability of such "acts and pronouncements" for purposes of determining the existence of
"subsequent practice" within the meaning of Article 31(3)(b) of the Vienna Convention.
7.560 The Appellate Body moreover noted that it s hould not be determined that "subsequent
practice" under Article 31(3)(b) "has been established by virtue of the fact that the Panel '[h]ad not
been provided any evidence to indicate that WTO Members protested against the EC classification
practice in question ..."
747 In this respect, the Appellate Body noted as follows:
"...'lack of reaction' should not lightly, without further inquiry into attendant
circumstances of a case, be read to imply agreement with an interpretation by treaty
parties that have not themselves engaged in a particular practice followed by other
parties in the application of the treaty. This is all the more so because the
interpretation of a treaty provision on the basis of subsequent practice is binding on
all parties to the treaty, including those that have not actually engaged in such a
practice".748
7.561 Accordingly, on the basis of guidance provided by the Appellate Body on the assessment of
subsequent practice for interpreting a treaty provisi on, the Panel will now consider whether there is
evidence of "consistent, common and concordant" cl assification practice for flat panel display devices
on the part of the ITA participants and with respect to the products at issue during the period since the
conclusion of the ITA.
7.562 The parties submitted the following evidence c oncerning Members' classification practice
following the conclusion of the ITA:
(a) the summary table that appears in para graph 7.528 above, which refers to HS
subheadings notified by ITA participants in connection with the FPDs narrative
description in 1997749;
(b) the summary table that appears in para graph 7.550 above, which updates the HS
subheadings notified by ITA participants in connection with the FPDs narrative
description in 1999750;
(c) a publication of the United States' Customs authorities entitled " What Every Member
of the Trade Community Should Know A bout: Classification of Flat Panel
Displays"751; and
(d) a publication of the United States' Customs and Border Protection regarding
classification of certain multifunctional LCD monitors752.
7.563 The Panel is of the view that the eviden ce submitted by the European Communities in
paragraphs 7.528 and 7.5 50 above is not relevant in assessing "subsequent practice" within the

746 Appellate Body Report on EC – Chicken Cuts, para. 259.
747 Appellate Body Report on EC - Chicken Cuts, para. 272.
748 Appellate Body Report on EC - Chicken Cuts, para. 273.
749 WTO document G/IT/2/Add.1 (17 October 1997) (Exhibit EC-14).
750 WTO document G/IT/2/Add.1/Rev.1 (29 July 1999) (Exhibit EC-20).
751 Exhibit EC-18.
752 Exhibit EC-19.

meaning of Article 31(3)(b) of the Vienna Convention. We recall that WTO documents G/IT/2/Add.1
of 17 October 1997 and G/IT/2/Add.1/Rev.1 of 29 July 1999
753, which form the basis for the table in
paragraphs 7.528 and 7.550 above, reflect the particular HS subheadings that ITA participants notified
in their respective WTO Schedules in 1997 and 1999 and were meant to assist participants in
narrowing down the divergences in classification. 754 Although these tables may reflect the HS
subheadings that ITA participants considered relevant to classification at the time they modified their
schedules to reflect ITA-related concession, it cannot be ascertained that these codes reflect the actual
"practice" of these Members without consideration of further evidence, which has not been presented
for all the Members. In many cases, Members notified multiple codes next to a particular
Attachment B description. Thus, it is not entirely cl ear what practice has been adopted in these cases.
It is also not clear from these tables whether Members are in fact classifying products, such as those at
issue in this dispute, in other headings that do no t appear in the tables or documents. In our view,
information derived from other Members' schedules should more properly be assessed as context under
Article 31(1) of the Vienna Convention, as the Panel has done in paragraphs 7. 528 and 7.550 above.
Thus, we do not find this information useful for ou r present purposes and, hence, we refrain from
elaborating further on these two tables or the documents on which the tables are based.
7.564 We next turn to the two documents presente d by the European Communities concerning US
classification for the products at issue: (i) the p ublication of the United States Customs and Border
Protection, entitled "What Every Member of the Trade Community Should Know About: Classification
of Flat Panel Displays"755, and (ii) a publication of the United States' Customs and Border Protection,
Commercial and Trade Facilitation Divi sion (HQ W966995) from 15 December 2006 756. The
document "What Every Member of the Trade Community Should Know About: Classification of Flat
Panel Displays" sets out the US Customs Services' position on interpretation of HS heading 8471, and
provides "guidelines" to use "when classifying all flat panel display modules".
757 In particular, it
discusses the application of principal/sole use with respect to "specific size flat panel display
modules" that "are principally used in ADP systems and conform to industry standards". 758 The
second document of the United States' Customs a nd Border Protection, Commercial and Trade
Facilitation Division discusses classification of a certain multifunctional LCD monitors "ranging inter
alia from 15 inch to 24 inch, with or without a TV tuner, DVI and/or S-Video etc connectors, VESA
compliant etc", and resorts to GIR 3(c) in certain cases.759

753 Exhibits EC-14; EC-20.
754 The introductory paragraphs to each of these do cuments indicates that "[t]o aid participants in
considering divergences in classifying information technology products, the Secretariat has compiled the various
classifications of Attachment B items in document [G/IT/2, respectively in document G/IT/2 and in
G/IT/2/Add.1]". The introductory paragraphs further simi larly provide that "[t]he attached table was prepared
from participants' schedules of commitments to provide this information". (See WTO document G/IT/2/Add.1
(17 October 1997) (Exhibit EC-14) and WTO document G/IT/2/Add.1/Rev.1, paras. 1-2; (Exhibit EC-20)). The
latter document further provides that "[a]t the meeting of 6 July 1999 it was requested that document
G/IT/2/Add.1 be updated in order to provide the latest information on classification divergences" (see Exhibit
EC 20, p.1, para. 1).
755 Exhibit EC-18.
756 Exhibit EC-19.
757 Exhibit EC-18, p. 3.
758 Exhibit EC-18, p. 4.
759 Exhibit EC-19, pp. 8-20. The Commercial and Trade Facilitation Division document discusses a
number of factors that economic operators should consider in determining whether a monitors is of a kind used
principally with an automatic data-processing machine, including: physical characteristics, such as brightness;
synchronization configuration; VESA-compliant mounting features; scalers; response time; size; the expectation
of the ultimate purchaser; the channels of trade; th e environment of sale, such as accompanying accessories,

7.565 The panel is of the view that this evidence is insufficient to enable us to draw conclusions
about the "consistency" of the United States classifica tion practice in this regard. We do not consider
it appropriate to extrapolate on the relatively limit ed evidence provided in consideration of the
potential range of different products that may be classifiable under HS subheading 8471 60 or under
other headings discussed in this dispute, such as HS subheading 8528. We observe that it is
incumbent on a party asserting the existence of a "common" and "concordant" practice among WTO
Members to provide sufficient evidence – which clearly is something beyond a handful of
classification exercises in one Member – to estab lish such a "consistent, common and concordant"
classification practice. The European Communities has not met this burden here.
(vii) Other arguments
7.566 We recall that recourse may be had to s upplementary means of interpretation may be
consulted in order to confirm the meaning resulting from the application of Article 31 of the Vienna
Convention, or to determine the meaning when th e interpretation according to Article 31 leaves the
meaning ambiguous or obscure or leads to a result which is manifestly absurd or unreasonable.
760
7.567 We have found, in interpreting the European Communities' commitment on FPDs in
accordance with Article 31 of the Vienna Conventi on, that the FPDs concession covers a range of
non-CRT technologies, including other technologies not actually identified, without limitation on
technical characteristics, such as screen size or the presence of certain connectors. We have also found
that the concession does not require that such de vices are used exclusively with automatic data-
processing machines or other ITA products.
7.568 There is a disagreement as to whether resort to Ar ticle 32 is appropriate in this case. We will
assume it is appropriate for purposes of analyzin g the European Communities' position. To the
extent, the European Communities' views are rele vant, we would consider the appropriateness of
Article 32 to our analysis. Therefore, we will exam ine, first, documents th at negotiators allegedly
relied on when drafting the ITA agreement; second, documents surrounding ITA II negotiations; and
finally, evidence of the existence of certain technologies at the time of the conclusion of the ITA.
Landscape papers submitted during negotiation of the ITA

Arguments of the parties
7.569 The European Communities submits that elements of the "landscape papers" submitted
while negotiating the ITA, and comments on these papers, are "preparatory work" or "other
supplementary means of interpretation" within the meaning of Article 32 of the Vienna Convention.
The European Communities thus considers those docum ents relevant to determine the scope of the
FPDs concession under its Schedule. 761 The European Communities ar gues that these papers contain
"a few guiding principles" and reflect "real events and exchanges" that reveal the negotiators' views
on the scope of the FPDs narrative descriptions found in Attachment B of the ITA.762

manner of advertisement and display; the usage of the merchandise; the economic practicability of so using the
import; and the recognition in trade of this use.
760 See para. 7.65 above.
761 European Communities' first written submission, para. 23; European Communities' response to
Panel question No. 12.
762 European Communities' first written submission, para. 26; European Communities second written
submission, para. 86.

7.570 In particular, the European Communities argues th at some of the landscape papers reveal that
the intent of negotiators was to focus on "current" product offerings and that "precise" definitions and
coverage of "specific" products were intended.
763 In addition, it argues that those landscape papers
demonstrate that negotiators never intended for th e "flat panel display devices..." narrative description
to cover any kind of monitors other than those specifically for computers. 764 The European
Communities submits that an early definition of "dis plays" in the ITA negotiations was subsequently
revised to be more "general", as "displays, designed for use with computers, sometimes referred to as
computer monitors".765 Subsequently, however, the European Communities contends that definitions
began to distinguish between "flat panel displa ys ... for ADP output devices" and "monitors for
computers".766 From then on, the European Communities argues, the flat panel display definition
stabilized.767 Despite changes to the concession for "flat panel displays...", the European Communities
argues that the description for "monitors for computers" remained open.768
7.571 The complainants reject the view that any documents on which the European Communities
relies, constitute preparatory work or other supplem entary means of interpretation within the meaning
of Article 32 of the Vienna Convention. Where th e ordinary meaning of the language is clear and
makes sense when read in contex t, they argue, recourse to othe r means of interpretation are not
appropriate.769 Further, they argue that the ITA does not have a formal "negotiating history" although
a number of documents were prepared by various Members in the process of negotiating the ITA. 770

763 European Communities' first written submission, para s. 24-25 (referring to Exhibits EC-2; EC-4).
The European Communities refers to the following comment by the United States in a 12 March 1996 paper:
"(…) The following list is an attempt to illustrate th e diversity and depth of the landscape of the ITA,
with a focus on current product offerings . This preliminary list was prepar ed to stimulate discussion on
establishing product coverage for the ITA. Specific products may need to be added within the general
categories, and more precise definition of the products and product categories will be required . A more specific
list should emerge from further discussions. (…)". (emphasis added) (Exhibit EC-2).
764 European Communities' first written submission, para. 188.
765 European Communities' first written submission, paras. 182-183 (referring to Facsimile
communication of 28 March 1996 from the US authoritie s, Exhibit EC-3; Facsimile communication of 16 April
1996 from the US authorities. Exhibit EC-23). The European Communities cites an early definition of
"displays" was:
"Displays designed for use with computers, sometimes referred to as computer monitors regardless of
the size of the display area (h owever measured, large or small) and whether or not using a CRT or some flat
screen technology such as AMLCD, EL, gas plasma, or one of the emerging technologies such as field emission
displays. Touch sensitive displays for use as combined input/output units with computers are also covered."
(Facsimile communication of 28 March 1996 from the US authorities. Exhibit EC-3).
766 European Communities' first written submission, paras. 184-185 (referrin g to Technical Working
Document QUAD Countries for consideration with regard to coverage of an Information Technology
Agreement, 1 November 1996; Exhibit EC-24; referring to Technical Working Document with comments by
QUAD Countries with regard to coverage of an Information Technology Agreement, 19 November 1996, 10:02;
Exhibit EC-25).
767 European Communities' first written submission, para. 186.
768 European Communities' first written submission, para. 185 (referring to Technical Working
Document with comments by QUAD Countries with regard to coverage of an Information Technology
Agreement, 25 November 1996 (Exhibit EC-27)).
769 United States' second written submission, para. 97 ; Japan's second written submission, para. 32,
referring to "Draft Articles on the Law of Treaties with commentaries 1966", at para. 18, pp. 222-23, Yearbook
of the International Law Commission, 1966, Vol. II (Exhibit JPN-26); Chinese Taipei's second written
submission, para. 26.
770 Complainants' response to Panel question No. 12; Japan's second written submission, para. 31;
Chinese Taipei's second written submission, para. 19. The United States submits that the only records from the
ITA negotiations that the participants directed the WTO Se cretariat to maintain were those referenced in note 4
of G/L/160. It argues, those records span the brief period between the conclusion of the ITA and the approval of

Japan and Chinese Taipei argue that the landscape papers strictly constitute preparations or
participants' own submissions in connection with the ITA, and are not the treaty or concessions at
issue.
771 The United States argues that the "systemic implications" of considering documents that are
from a single Member's files as negotiating history or surrounding circumstances would have the
effect of reading Article 32 of the Vienna Convention out of the treaty.772 Moreover, the United States
and Chinese Taipei argue that the submitted landscape papers were not accessible to all participants to
the ITA or the public, including notably, Chinese Taipei. Thus, they do not represent the common
intention of all relevant parties.773
7.572 The European Communities argues that the complainants cannot reject the landscape papers
on the grounds that they were not made availabl e to all parties. According to the European
Communities, such an argument is "manifestly disi ngenuous", in light of the participation of Japan
and the United States in these discussions as Quad members. The European Communities submits that
bilateral or plurilateral negotiati ons prior to multilateralization is a "frequent" and "peculiar feature"
of WTO tariff negotiations. In its view, not considering these landscape papers would render the
drafting history of many concessions "wholly irrelevant".774
Consideration by the Panel
7.573 The Appellate Body in EC – Chicken Cuts explained that an interpreter has certain flexibility
in considering relevant supplem entary means in a given case so as to assist in ascertaining the
common intentions of the parties."775 The supplementary means of interpretation, include, but are not
limited to "the preparatory work of the treaty and the circumstances of its conclusion". Thus a treaty
interpreter has certain flexibility in considering re levant supplementary means in a given case so as to
assist in ascertaining the common intentions of the parties."776
7.574 The Appellate Body explained:
"An 'event, act or instrument' may be relevant as supplementary means of
interpretation not only if it has actually infl uenced a specific aspect of the treaty text
in the sense of a relationship of cause and effect; it may also qualify as a
'circumstance of the conclusion' when it he lps to discern what the common intentions
of the parties were at the time of the conc lusion with respect to the treaty or specific
provision".
777
7.575 When determining how relevant a particular in strument or circumstance is for interpreting a
specific treaty provision, the Appellate Body expl ained that a panel should consider a number of
objective factors including:

participants Schedules (Exhibit US-96). It submits that the material submitted by the European Communities is
not contained in these documents (United States' response to Panel question No. 12).
771 Japan's response to Panel question No. 12; Chinese Taipei's response to response to Panel question
No. 12; Chinese Taipei's second written submission, paras. 19-25.
772 United States' second written submission, paras. 45 and 97.
773 United States' second written submission, para. 45; Chinese Taipei's second written submission,
para. 20, referring to Appellate Body Report on EC – Chicken Cuts , para. 297, Young Loan Arbitration, 59
I.L.R. 495 (1980) and Sir Ian Sinclair, The Vienna Convention on the Law of Treaties , 2nd ed (Manchester
University Press, 1984 quoted by the Panel in EC – Chicken Cuts: Panel Report, footnote 574.
774 European Communities' response to Panel question No. 12.
775 Appellate Body Report on EC – Chicken Cuts, para. 283.
776 Appellate Body Report on EC – Chicken Cuts, para. 283.
777 Appellate Body Report on EC – Chicken Cuts, para. 289.

"[T]he type of event, document, or instru ment and its legal nature; temporal relation
of the circumstance to the conclusion of the treaty; actual knowledge or mere access
to a published act or instrument; subject matter of the document, instrument, or event
in relation to the treaty provision to be inte rpreted; and whether or how it was used or
influenced the negotiations of the treaty".
778
7.576 Further in this respect, the Appellate Body st ated that instruments originating from individual
parties should, at a minimum, be "officially published" and "publicly available" to qualify as a
circumstance relevant for consideration under Article 32 of the Vienna Convention.
779 The Appellate
Body noted that "proof of actual knowledge will increase the degree of relevance of a circumstance
for interpretation".780
7.577 The requirement that such material be officia lly published and publicly available would seem
to ensure that all relevant parties, including not only those which participated in the negotiations, but
also those which did not, have access to and ther efore knowledge of the negotiating history that may
be used to interpret their obligations.
7.578 We note that the "landscape papers" submitte d by the European Communities derive from
discussions between the "Quad" countries. We ar e not in a position to determine, based on the
evidence before us, whether non-Quad participants , including Chinese Taipei, were privy to these
discussions or had access to the documents. The Eu ropean Communities itself appears to recognize
the limited audience of these papers. 781 The Panel notes the United States has called attention to
Footnote 4 of document G/L/160, which mandated th e WTO Secretariat to maintain a set of the
"informal documents exchanged by participants in cons ultations that led to the decisions taken at that
meeting".782 (emphasis added) However, we observe that the landscape papers submitted by the
European Communities do not form part of this record. 783 Finally, we note that the European
Communities has not submitted evidence that the "l andscape papers" were communicated to all ITA
participants or made available for consultation by interested delegations. Even if they had done so,
we recall that documents qualifying under Article 32 of the Vienna Convention must have been made
available to all WTO Members and not simply to partic ipants to the ITA. The European
Communities maintains that Japan and the United States as Quad members should have been aware of

778 Appellate Body Report on EC – Chicken Cuts, para. 291.
779 This view is supported by reference to a standard understanding of travaux préparatoires in public
international law. In particular, Ian Sinclair explains
 "... recourse to travaux préparatoires does not depend on the participation in the drafting of
the text of the State against whom the travaux are invoked. To hold otherwise would disrupt
the unity of a multilateral treaty, since it would imply that two different methods of
interpretation should be employed, the one for States who participated in the travaux
préparatoires and the other for States who did not so participate. One qualification should,
however, be made. The travaux préparatoires should be in the public domain so that States
which have not participated in the drafting of the text should have the possibility of consulting
them. Travaux préparatoires which are kept secret by negotiating States should not be capable
of being invoked against subsequently acceding States."
Ian Sinclair, The Vienna Convention on the Law of Treaties , Manchester University Press, 2nd edition
(1984) p. 144.
780 Appellate Body Report on EC – Chicken Cuts, para. 297.
781 European Communities' first written submission, para. 23; European Communities' response to
Panel question No. 12.
782 Exhibit US-96.
783 The Panel would also note in this respect that the record maintained by the WTO Secretariat in
accordance with document G/L/160 is limited and thus, sh eds limited light on the status of the documents
submitted by the European Communities.

the documents, in particular, because some of the do cuments were authored by them. However, this
is not relevant as criteria for determining their relevance under Article 32.
7.579 We have no evidence before us that the particular landscape papers were published, circulated
or made available to the other ITA participants or the WTO membership more broadly at the time of
negotiations or prior to this dispute. Thus, it is not clear to what extent if at all the views set forth in
these documents reflect the commonly held intentions of the parties.
7.580 The European Communities has taken note of st atements made by the Appellate Body in
Canada – Dairy, concerning the relevance that may be attribut ed to statements made in the context of
bilateral negotiations.
784 We note that the Appellate Body in Canada – Dairy took note that the
parties had agreed on record that the bilateral negotiations under discussion "failed to produce any
agreement between them", in concluding that Ca nada's commitment was not new or different. 785
Further, the Appellate Body in EC – Chicken Cuts emphasized the importance of ensuring that
documents being considered under Article 32 of the Vienna Convention reflect the common intentions
of the parties.786
7.581 We consider that the "landscape papers", whic h were only reviewed by a subset of the ITA
participants (the "Quad" members, in particular) and were not circulated prior to this dispute as far as
we can determine based on the evid ence before us, should not have any bearing on our interpretation
of the concessions arising under the EC schedule pur suant to the ITA. We do not have evidence of
any agreement (or lack thereof) among the Quad re garding the particular landscape papers. Nor do
we know to what extent if at all these views repr esent the common intentions of the ITA participants
or the WTO Members, because no evidence has been offe red that documents were circulated to others
prior to the conclusion of negotiations.
Proposals during ITA II negotiations
Arguments of the parties
7.582 The European Communities contends that negotiations surrounding the "ITA II"
demonstrate the respective positions of the parties on the existing product coverage of the ITA. In
this respect, the European Communities argues that Japan submitted a proposal to include "so-called
'multimedia monitor[s]'" as new products, but did no t explain that multimedia monitors were already
covered by the existing commitments. 787 The European Communities argues that if "multifunctional
LCD monitors" existed and were about to replace the CRT technology at the time when the ITA
concessions were made, it then is not clear why Japan was trying to negotiate the inclusion of a
product that was on its way to becoming redundant. 788 Furthermore, the European Communities
argues that in the proposals for the enlargement of the product coverage, partic ipants have explicitly

784 Appellate Body Report on Canada – Dairy, paras. 138-139. Footnotes omitted.
The European Communities additionally referred to findings made by the panel in Korea – Beef
regarding the relevance of an understanding reached bilaterally. (See Panel Report on Korea – Beef, para. 562).
785 Appellate Body Report on Canada–Dairy, paras. 139.
786 Appellate Body Report on EC – Chicken Cuts , para. 239; Appellate Body Report on
EC - Computer Equipment, para. 84.
787 European Communities' first written submission, para. 178 (referring to Exhibit EC-21).
788 European Communities' first written submission, para. 179.

listed television receivers and video monitors as a product to be covered in the future list of product
coverage.
789
7.583 The complainants argue that the proposals and negotiations pertaining to ITA II are not
relevant to the interpretative issues. 790 The United States submits that just because a proposal was
made in ITA II for "multimedia monitors" and "vid eo monitors" does not support the conclusion that
the products were not covere d under the original concessions. 791 Japan argues that the Panel should
not rely on the ITA II as an interpretative tool, in particular because no agreement arose out of the
ITA II discussions.792
Consideration by the Panel
7.584 We note that neither participants to the ITA nor the WTO membership at large has formally
agreed to the content of an "ITA II" to succeed or enlarge the product coverage of the ITA.
7.585 We recall that the Appellate Body has indicated that documents published, events occurring,
or practice followed subsequent to the conclusion of the treaty may be relevant for consideration
under Article 32 of the Vienna Convention to the exte nt that the instrument or document reflects the
"common intentions of the parties' at the time of the conclusion" of the treaty. 793 The Appellate Body
emphasized, however, that such an assessment must be determined on a case-by-case basis.
7.586 In this respect, the European Communities ar gues that negotiations a nd proposals made in
connection with the ITA II may inform the interpretation of the intended scope of product coverage of
the original ITA at the time of its conclusion.
7.587 We are hesitant to attribute much weight to st atements made in the context of negotiations for
a separate, successor agreement that has not yet been concluded, and where the extent of progress
towards reaching such an agreement remains uncle ar. In addition, the European Communities has
referred to limited evidence in support of its view on the scope of coverage to be attributed to the
FPDs narrative description. We understand the Eu ropean Communities to be arguing that Japan's
proposal to include a product it termed a "multi media monitor" within ITA II coverage, without
explaining that such a product is already covered under the original ITA, somehow demonstrates that
those products did not exist at the time ITA concessi ons were made. However, we note that Japan's
proposal appears to be limited to monitors employing CRT-based display technology.794 Furthermore,
the European Communities suggests that a proposal (b y Singapore) to include television receivers and
video monitors in a list for future coverage indicates these products were not part of ITA coverage.795

789 European Communities' first written submission, para. 180 (referring to Singapore's proposed
additions to product coverage in WTO document G/IT/SPEC/9 of 12 January 1998, Exhibit EC-22).
790 United States' second written submission, para. 97; Japan's second written submission, para. 183.
791 United States' second written submission, para. 97 and its fn. 203. Through the notation "already
covered by the ITA", the United States argues that the ITA II negotiators recognized that several products
proposed for inclusion in ITA II may in fact have been part of ITA I (United States' second written submission,
para. 97 and its fn. 203; WTO document Proposed Additions to Product Coverage: Compilation of Participants'
Submissions: Note by the Secretariat, G/IT/SPEC/15, pp. 23-24 (24 February 1998) (Exhibit US-130)).
792 Japan's second written submission, para. 183.
793 Appellate Body Report on EC – Chicken Cuts, para. 305.
794 Exhibit EC-21, p. 5.
795 European Communities' first written submission, para. 180, referring to Singapore's proposed
additions to product coverage in WTO document G/IT/SPEC/9 of 12 January 1998. Exhibit EC-22.

7.588 We do not consider that we have sufficient grounds to conclude that Japan's individual
proposal to include a product it termed a "multi media monitor" under ITA II coverage establishes
whether or not a particular product was covered with in the ITA, or whether such a product existed at
the time of ITA negotiations. The determination of whether a product is covered by the ITA involves
considering first the scope of the concessions alr eady found in the ITA. The products covered by the
concession proposed by Japan, may or may not (in whole or in part) fall within the existing ITA
coverage, and this is so regardless of Japan's individual views on the matter.
796 Moreover, we note
that Japan's views on whether or not multimedia mon itors were within the scope of ITA coverage do
not represent the common views of all ITA participan ts, let alone all of the WTO Membership. The
terms of the FPDs concession in the EC Schedule, on the other hand, represents agreed-upon text,
reflecting the common intentions of ITA participants and the WTO Membership.
7.589 We concluded in our Article 31 analysis that the FPDs concession in the EC Schedule extends
to certain apparatus or devices that have a flat display and are generally thinner than conventional
CRT displays or monitors, and are designed for vi sual presentation of data or signals from products
falling with in the ITA, including notably, automati c data-processing machines. We determined that
there is no express limitation on technical characteristics, such as screen size, dimension, refresh rate,
dot-pixel ratio, or othe r technical characteristics, including no express limitation on the type of
connection or sockets it may possess, such as DVI. Finally, we concluded that, while the flat panel
display devices at issue must be designed for use with an automatic data-p rocessing machine there is
no requirement for exclusivity, such that the c oncession would be limited to apparatus that only
display or reproduce signals from products falling within the ITA, including automatic data-
processing machines.
7.590 Finally, we find unpersuasive the European Communities' argument that Singapore's proposal
to include HS headings 8528 12, 8528 13, 85 28 21 and 8528 22 within the ITA II as duty-free
concessions, indicates that all flat panel display devices capable of receiving or reproducing signals
from sources other than an ADP machine were not with in the scope of the original ITA, in particular,
under the narrative description for FPDs. We have established above that the narrative descriptions of
the concessions in Members' WTO Schedules must be understood in terms of their ordinary meaning
in context and in light of the object and purpose of the treaty, in determining the coverage of a
particular concession. We found that the scope of the concession arising from the narrative
descriptions is dispositive regardless of the HS head ings or tariff codes that Members chose to notify
in connection with the descriptions, or those that they chose to bind at zero duties elsewhere in their
Schedules. Moreover, Singapore has not proposed modifying the narrative description for FPDs or
otherwise amending the list of products appearing in Attachment B. In any event, Singapore's view
does not represent the common intentions of all participants nor the WTO membership.
7.591 Accordingly, we consider that proposals made pursuant to the ITA II negotiations do not
affect our conclusions established pursuant to Article 31 of the Vienna Convention.
The state of technology at the time of ITA negotiations

Arguments of the parties
7.592 The United States and Japan contend that LCDs for computer displays began to be
commercialized in the 1980s, and "were very much a growing part of the market" beginning in the

796 We further note that Japan may have sought to clarify that a product was covered within the scope
of the ITA concessions (under the ITA II) despite its view that the product was already covered under the
existing ITA coverage.

"early 1990s", and were "well known during the mi d 1990s", when they began to replace CRT-based
devices.
797 Japan asserts that the commercial presence of LCD devices explains why the concessions
themselves mentioned flat panel devices 'including LCDs'".798
7.593 The European Communities argues that the technology referred to by the complainants has
been subject to "major developments" since the early 2000s, which it argues, is five or more years
after the conclusion of the ITA.
799 The European Communities qualifies evidence from the
complainants regarding LCD technology as concerni ng "only the development of LCD televisions",
and thus argues that it is not clear that LCD comput er displays existed at the time of negotiations as a
"viable commercial and technological reality". 800 The European Communiti es argues that a monitor
that can be used today as the output unit of an automatic data-processing machine is fundamentally
different from ADP monitors that were used and defined in 1996 when the ITA was negotiated. The
European Communities argues that these new pr oducts must be subject to negotiations. 801 The
European Communities further argues that LCD disp lays with DVI did not exist at the time of
negotiations.802
7.594 Several third parties to this dispute argue that the particular technological development of a
product should not exclude the possibility that a part icular product would fall within the scope of an
ITA concession, including those based on Attachment B of the ITA.803
Consideration by the Panel
7.595 The Panel notes that many of the arguments of the parties set out above concern the existence
or otherwise of certain technologies at the time of the ITA negotiations.804
7.596 One of the issues to consider is, to what extent is the state of technology that existed at the
time of the negotiations relevant to determining the scope of the commitments. A related issue is,
how should technological development, product evol ution and "new products", be dealt with in
interpreting concessions. In the Panel's view it is neither desirable nor possible to answer such
questions in the abstract and without reference to the terms of the concessions that are being
interpreted.

797 Japan's first written submission, paras. 273 and 277. Japan refers to an antidumping petition filed in
the United States in 1990 in support of the view that LCDs were commercially available.
798 Japan's first written submission, paras. 277.
799 The European Communities argues that LCD technology was nascent during the time of
negotiations and afterward for certain applications, due to technical issues (European Communities' first written
submission, paras. 88-89, citing Taiichiro Kurita, Moving Picture Quality Improvement for Hold-type AM-
LCDs, p. 986 (Exhibit EC-12) and T. Yamammoto, Y. Aono and M. Tsumura, guiding Principles for High
Quality Motion Picture in AMLCDs Applicable to TV Monitors, p. 456 (Exhibit EC-13)).
800 European Communities' first written submission, para. 90.
801 European Communities' first written submission, para. 76.
802 European Communities' first written submission, para. 87.
803 See, for instance, Australia's third party oral statement, para. 14; Australia's response to Panel
question No. 4; Costa Rica's third party oral statement, para. 6; Costa Rica's response to Panel question No. 4;
Hong Kong (China)'s third party oral statement, para. 6; Korea and Singapore's responses to Panel question
No. 9.
804 See for instance, Japan's second written submission, para. 156, United States' first written
submission, paras. 51-52 (citing to Hirohisa Kawamoto, The History of Liquid-Crystal Displays, Proceedings of
the IEEE (Vol. 90, No. 4 (April 2002), p. 466 (discussing the reflection process)).

7.597 We recall that, in determining the scope of the European Communities' commitment on FPDs,
we applied the customary rules of interpretation of public international law, as codified in Article 31
of the Vienna Convention. In doing so, we exam ined the ordinary meaning of the terms of the
European Communities' FPDs commitment, in the cont ext provided by the ITA, other relevant parts
of the EC Schedule, and the schedules of other WTO Members. We established that the FPDs
concession pertains to certain apparatus or devices th at have a flat display and are generally thinner
than conventional CRT displays or monitors, and are designed for visual presentation of data or
signals from products falling with in the ITA, in cluding notably, automatic data-processing machines.
We determined that there is no express limitation on technical characteristics, such as screen size,
dimension, refresh rate, dot-pixel ratio, or othe r technical characteristics, including no express
limitation on the type of connection or sockets it may possess, such as DVI. Finally, we concluded
that while the flat panel display devices at issue must be designed for use with an automatic data-
processing machine there is no requirement for exclusiv ity, such that the concession would be limited
to apparatus that only display or reproduce signa ls from products falling within the ITA, including
automatic data-processing machines.
7.598 We observe once again that a Member, when ma king a commitment pursuant to Article II of
the GATT 1994, may choose precise, even exclusive, terms and conditions to qualify or limit the
scope of coverage. These include terms and conditi ons that would limit coverage to a particular
product based on its physical attributes, dimensions, technical characteristics or features. A Member
may also refer to a particular classification or tariff heading to define or limit the scope of a
concession. The determination of the scope of covera ge comes from the meaning of the terms of that
commitment. For this reason, a panel should not r ead qualifications into a commitment that are not
there. At the same time, the other Members have an opportunity to agree or disagree with the
proposed concession when it is put forward for incorporation into a Member's schedule.
7.599 The Panel has interpreted the concession based on the FPDs narrative description in this
manner. In the case of this concession, the Panel notes that generic terms were used to cover a wide
range of products and technologies. In addition, it appears to be undisputed that flat panel display
devices designed for use with au tomatic data-processing machines existed at the time the ITA was
concluded (for example, the European Communities has referred to an earlier version of the "displays
designed for use with computers" concession that ex pressly mentions both CRT and flat panel display
technology)
805, and that the notion of multifunctional m onitors was not unknown to negotiators, as
evidenced in the monitors concessi on in the ITA, which appears to contemplate the existence of
monitors that accept signals from multiple sources.806
7.600 We are of the view, therefore, that there is no n eed to consider further the particular status of
technology at the time of negotiating the concession in assessing the scope of the concession before
us. Thus, for instance, the Panel does not consider the fact that DVI was developed after the
conclusion of the ITA operates to exclude FPDs wi th DVIs from the scope of the concession. As

805 See fn. 729 above. The Panel notes that, in interpreting the FPDs narrative description, it has
declined to consider the landscape papers under Article 32 of the Vienna Convention on account of the fact that
they do not reflect common intentions and therefore do not assist our interpretative task. The panel here refers
to the landscape document merely as evidence of the fact that both CRT and LCD technologies were known to
be used in displays designed for use with computers at the time the concessions were made.
806 See also China – Publications and Audiovisuals Products, para. 397.

explained, we have established on the terms of the concession th at "flat panel display devices"
incorporating a wide range of characteristics and technologies are covered.
807
7.601 We note the European Communities' argument that multifunctional monitors are "new
products" that did not exist at the time of th e negotiations. As noted above, the notion of
multifunctionality was not unknown at the time of the negotiations. Even if it were accepted that the
European Communities' claim is factually accurate, however, it is of limited relevance to the question
of whether the product is covered by the FPDs conces sion. This must be determined by interpreting
the terms of the concession in accordance with the Vienna Convention.
7.602 We recall that, in determining the scope of the European Communities' commitment on FPDs
we examined the ordinary meaning of the te rms of the European Communities' FPDs narrative
description, in the context provided by the ITA, ot her relevant parts of the EC Schedule, and the
schedules of other WTO Members. We established that the FPDs decryption pertains to certain
apparatus or devices that have a flat display and ar e generally thinner than conventional CRT displays
or monitors, and are designed for visual presentati on of data or signals from products falling with in
the ITA, including notably, automatic data-processi ng machines. We determined that there is no
express limitation on technical characteristics, such as screen size, dimension, refresh rate, dot-pixel
ratio, or other technical characteristics, including no express limitation on the type of connection or
sockets it may possess, such as DVI. We also noted th at there is no requirement for exclusivity, such
that the concession would be limited to apparatus that only display or reproduce signals from products
falling within the ITA, including automatic data-processing machines.
Other arguments - Conclusion

7.603 Given the Panel's view that the material s relied upon the European Communities for its
Article 32 arguments are not appropriate to consider under the circumstances of this case, we decline
to consider further the applicability of Article 32 in this case.

807 We also do not consider it necessary to resort to any form of evolutionary interpretation of the
terms, in light of our conclusion on the ordinary meaning of the terms. Had there been doubt as to whether LCD
or other displays that were capable of connecting to other sources than an automatic data-processing machine, or
displays that were fitted with DVI or other multi-use co nnectors, were within the scope of the concession, only
then might we have considered such an interpretative ap proach. We note in addition, the evidence cited by the
United States and Japan suggests that LCD displays were unveiled commercially in 1988, and would likely have
been contemplated at the time of the negotiations (See H. Kawamoto, "The History of Liquid-Crystal Displays"
Proceedings of the IEEE, Vol. 90, No. 4 (April 2002), available at
http://www.ieee.org/portal/cms_docs_iportals/iportals/aboutus/history_center/LCD-History.pdf, p. 495. Exhibit
US-32) While the European Communities argues that the LCD industry was nascent then, we note that the
European Communities has cited text of it in landscape papers it alleges were submitted by the United States
during negotiations of the ITA. In particular, one of these papers referred to an early version of a proposed
concession that provides in part "Displays designed for use with computers, sometimes referred to as computer
monitors regardless of the size of the display area (however measured, large or small) and whether or not using
a CRT or some flat screen technology such as AMLCD, EL, gas plasma, or one of the emerging technologies
such as field emission displays" (European Communitie s' first written submission, para. 182, referring to
Facsimile communication of 28 March 1996 from the US authorities, Exhibit EC-3). Regardless of the status of
this document, in view of the European Communities' id entification of this text, we find further confirmation
that negotiators were at least aware of a wide arra y of technology at the ti me of considering the FPDs
concession.

(viii) Overall conclusions on interpretation of the FPDs narrative product description in the Annex
to the EC Schedule
7.604 Based on our assessment of the text of the FPD s narrative description in accordance with the
principles codified in Article 31 of the Vienna C onvention, we concluded above that the concession
refers to certain apparatus or devices that have a flat display and are generally thinner than
conventional CRT displays or monitors, and are de signed for visual presentation of data or signals
from products falling with in the ITA, including notably, automatic data-processing machines. We
determined that there is no express limitation on technical characteristics, such as screen size,
dimension, refresh rate, dot-pixel ratio, or othe r technical characteristics, including no express
limitation on the type of connection or sockets it may possess, such as DVI. We further concluded
there is no requirement for exclusivity, such that the FPDs concession would be limited to apparatus
that may only display or reproduce signals from products falling within the ITA, including automatic
data-processing machines. In light of our interpretation of the key terms and phrases in the EC
headnote, considered in the context of the ITA, we concluded that duty-free treatment must be
extended to all products that fall within the scope of the FPDs concession in the Annex to the EC
Schedule irrespective of where they are classifi ed in the EC Schedule. We found no reason to
conclude otherwise based on our assessment of the various contextual arguments presented by the
parties, or arguments raised by the European Commu nities in the context of Article 32 of the Vienna
Convention.
(b) The ordinary meaning of the relevant concession: tariff item number 8471 60 90 in the EC
Schedule
7.605 The Panel recalls that the complainants have alleged that flat panel display devices are
covered not only by the duty-free FPDs narrative d escription in the Annex to the EC Schedule, but
also by the duty-free concession for "[i]nput or output units" of an automatic data-processing machine
in tariff item number 8471 60 90 in the EC Schedule.
808 In particular, tariff item number 8471 60 90
covers "Automatic data-processing machines and units thereof"; - Input or output units, whether or
not containing storage units in the same housing; -- Other; - - - Other". Within the terms of this
concession, the complainants consider the term "out put units" as key to the ordinary meaning analysis
under the Vienna Convention.
809 The complainants do not address the term "input" units in
connection with their assessment of tariff item number 8471 60 90.
7.606 The European Communities argues that LCD monitors of a kind used principally in an
automatic data-processing system are not precluded from duty-free treatment on the sole ground that
they are capable of displaying signals from source s other than an automatic data-processing machine,
or due to the presence of a DVI or other connector. Taking into considera tion the relevant HS1996
Section and Chapter Notes, as well as its Explanator y Notes to Chapters 84 and 85 and the GIRs of
the HS, the European Communities ar gues that the determination of whether a given monitor is used
"principally" in an automatic data-processing system requires a case-by-case analysis on the basis of
the product's objective technical characteristics, which could lead to prima facie classification under
the heading pertaining to video monitors (HS1996 subheadings 8528 21 and 8528 22). 810 This is
because certain displays existing today are "multifunc tional", i.e., they can display both from an

808 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 2. The following third parties also take this
Singapore, paras. 29, 33 and 48; and Thailand in its third party statement, para. 3.
809 United States' second written submission, para. 99 ; Japan's first written submission, para. 302;
Chinese Taipei's first written submission, para. 320.
810 European Communities' first written submission, paras. 166 and 169.

automatic data-processing machine and from other s ources. The European Communities submits that
in this case one would need to resort to GI R 3(c), and classification would result under HS1996
heading 8528.
7.607 The Panel will now interpret the relevant EC c oncession for tariff item number 8471 60 90
which reads as follows:
HS1996 Description Base
rate
Bound
rate
Year of
full
implement
ation
Other
duties
and
charges
Legal
instrument
where the
concession is
reflected
8471 Automatic data-processing
machines and units thereof;
magnetic or optical readers,
machines for transcribing data
onto data media in coded form
and machines for processing
such data, not elsewhere
specified or included:

 (…)
8471 60 - Input or output units, whether
or not containing storage units
in the same housing

8471 60 10 - - For use in civil aircraft 0.0 0.0 1997 0.0 WT/Let/156
 - - Other
8471 60 40 - - - Printers 2.0 0.0 1999 0.0 WT/Let/156
8471 60 50 - - - Keyboards 2.0 0.0 1999 0.0 WT/Let/156
8471 60 90 - - - Other 2.0 0.0 1999 0.0 WT/Let/156

7.608 In order to determine the ordinary meani ng of tariff item number 8471 60 90 in the EC
Schedule pursuant to Article 31 of the Vienna Conven tion, we will examine the text in its context and
in light of its object and purpose.
(i) The meaning of the terms of tariff item number 8471 60 90 in the EC Schedule
Arguments of the parties
7.609 The United States examines the term "input or output units" of tariff item number 8471 60 90
in the EC Schedule.811 Japan argues that the key language in the concession under tariff item number
8471 60 90 is the phrases "units thereof" and "output units".812 Chinese Taipei examines the ordinary
meaning of the term "output unit" from both general and specialized dictionaries.813

811 United States' first written submission, para. 136.
812 Japan's first written submission, para. 298 and 300 (Japan argues there is no dispute over the term
"automatic data-processing machines" which includes "computers").
813 Chinese Taipei's first written submission, para. 311, 323 and 325 (arguing that the terms "whether or
not containing storage units in the same housing" in HS1996 subheading 8471 60 do not suggest that a display
device capable of receiving signals both from an automatic data-processing machine and other sources would be
excluded from the definition of HS1996 subheading 8471 60).

Input or output units
7.610 The complainants refer to definitions of the words " output" and "units" from both standard
and technical dictionaries. They also consider th e terms in combination. They do not address the
term "input".
7.611 Japan notes that in a technical sense, "output" is defined as "data produced by a data-
processing operation, or the information that is the objective or goal in data-processing".
814 I n i t s
ordinary sense, Japan notes that "output" is define d as "an electrical signal delivered by or available
from an electronic device".815
7.612 Chinese Taipei refers to one definition of "output" as "energy produced by a machine; spec.
an electrical signal delivered by or available from an electronic device. c. Data or results produced by
a computer, the physical medium on which these are presented." 816 It also notes the definition,
"power or energy produced or delivered by a mach ine or a system, e: the information produced by a
computer (2) the act, process or an instance of producing (3) the terminal for the output of an
electrical device."817
7.613 Chinese Taipei additionally refers to the definition of "unit" as "3. An individual thing, person
or group regarded as single and complete, esp. for the purposes of calculation" 818, and "a piece or
complex of apparatus serving to perform one particular function."819
7.614 The complainants also look at the use of the terms "output" and "unit", or output device, in
combination. In particular, the United States notes that one technical definition of "input/output
device" is "a unit that accepts new data, sends it in to the computer for processing, receives the results,
and translates them into a useable medium". 820 The complainants submit that "output unit" means "a
unit which delivers information from the computer to an external device or from internal storage to
external storage".821
7.615 Based on these definitions, the United States ar gues that an "output unit" under HS1996 code
8471 60 is a device that accepts new data, sends it into the computer for processing, receives the
results, and translates them into a useable medium. It argues that an LCD computer monitor is an
output unit of an ADP machine since it provides the results of processing to the user by providing a
visual display of information received from the CPU. In its view, the mere fact that a monitor uses a

814 Japan's first written submission, para. 298 (referring to McGraw-Hill Dictionary, p. 1418 (Exhibit
JPN-11)).
815 Japan's first written submission, para. 87 (referring to the Shorter Oxford Dictionary (1993), pp.
3275, 2040 (Exhibit JPN-11)).
816 Chinese Taipei's first written submissi on, paras. 313 and 316 (referring to the Shorter Oxford
Dictionary (1993), p. 2040.
817 Chinese Taipei's first written submission, paras. 313 and 316 (referring to http://www.merriam-
webster.com/dictionary).
818 Chinese Taipei's first written subm ission, para. 314 (referring to the Shorter Oxford Dictionary
(1993), p. 3491).
819 Chinese Taipei's first written submission, para. 317 (referring to http://www.merriam-
webster.com/dictionary).
820 United States' first written submission, para. 136 fn. 193; United States' second written submission,
para. 99 (referring to McGraw-Hill Dictionary (5th ed. 1994), p. 1021(Exhibit US-82)).
821 United States' first written submission, para. 136, fn. 193, United States' second written submission,
para. 99 and Japan's first written submi ssion, para. 298 and Chinese Taipei's first written submission, para. 319
(all referring to McGraw-Hill Dictionary (5th ed. 1994), p. 1419 (Exhibits US-83; JPN-11)).

DVI connector, for instance, to tr ansmit the information displayed does not render it something other
than an output unit of an ADP.
822
7.616 Japan submits that the phrase "output unit" or "out put device" refers to devices that display
or in some other way use computer output. Thus, it argues, display monitors that can display data
from a computer are "output devices". Japan considers that "output units" refers to the wide range of
"units" covered by HS1996 heading 8471, where in its context "output" means the electric signal
delivered by the computer to which the "output unit" has been connected. This language speaks to the
interconnectivity between the computer and any un its used in connection with that computer.
Accordingly, it argues, any device that is connectable to a computer falls within the scope of that
heading.823
7.617 Japan additionally considers the use of the term "unit thereof" in heading 8471. Japan cites
the definition of "thereof" as "of that, concerning that". 824 In its view the terms "units thereof" in
heading 8471 refers to devices desi gned and engineered to be connected to and used in an integrated
fashion with computers. Japan further submits that the language "units thereof" imposes no limitation
and thus all "units thereof" are covered under subheading 8471 60, not just units that are exclusively
dedicated to automatic data-processing machines.825
7.618 Taking into consideration what it considers the technology and ordinary meanings, Japan
argues that an "output unit" of an automatic data -processing machine is some device that can receive
and then act upon electrical signals coming from a computer, without limitation regarding what the
device may connect to. Japan submits that an LCD monitor qualifies as an "output unit" of an ADP
machine. "By virtue of" the DVI, it argues, the LCD monitor can receive signals from the computer
and display them on the display screen.826
7.619 Chinese Taipei argues that the ordinary meaning of the terms "output units" in HS1996
subheading 8471 60 includes those FPDs capable of receiving signals both from an automatic data-
processing machine and other sources. Chinese Taipei argues that the ordinary meaning of an "output
unit" is "very broad" and covers a piece or complex of apparatus serving to deliver information or data
produced by a computer.827
7.620 The European Communities does not dispute that "genuine ADP monitors", would fall
within HS1996 subheading 8471 60. However, it argu es that it is not entirely clear whether products
identified by the complainants, including what it calls "multifunctional LCD monitors" fall within the
scope of the concession. To the extent they would qualify under tariff item number 8471 60 90, the
European Communities argues that those products recei ve duty-free treatment, and that there is thus
no need to examine the ordinary meaning of the concessions. But, the European Communities argues,
certain FPDs may also fall within the ordinary meaning of "video monitors" under HS1996 headings
8528 21 and 8528 22, or, in some cases, as "reception apparatus for television" under HS1996
headings 8528 12 and 8528 13.828

822 United States' first written submission, para. 136.
823 Japan's first written submission, paras. 299-301; Japan's second written submission, paras. 187-188.
824 Japan's first written submission, para. 87 (referring to the Shorter Oxford Dictionary (1993),
pp. 3275, 2040 (Exhibit JPN-11).
825 Japan's first written submission, para. 300; Japan's second written submission, para. 185.
826 Japan's first written submission, paras. 302-303.
827 Chinese Taipei's first written submission, paras. 318-320.
828 European Communities' first written submission, paras. 100-101.

Consideration by the Panel

7.621 The Panel notes that, in interpreting the meaning and scope of the concession at issue, the
complainants have relied on a variety of definiti ons from both technical dictionaries and more general
dictionaries of the English language. Given the terms involved, we think this is appropriate.829
7.622 Before we start our analysis of the specifi c terms used in the concession based on these
dictionary definitions, we recall the Appellate Body 's statement that, while dictionaries are a "useful
starting point" for the analysis of "ordinary mean ing" of a treaty term they "are not necessarily
dispositive".830 We are also aware that understanding the plain meaning of the text is the beginning of
our inquiry and not the end. While we may organize our analysis of the ordinary meaning into
different sections, for the sake of convenience, we remain cognizant that we are conducting an holistic
analysis of the ordinary meaning and that the te xt of the terms cannot be divorced from the context
and the object and purpose of the treaty.831
7.623 The complainants provided a number of definitions of the term "output", both in isolation as
well as in combination with the term "unit". A ll of these definitions support the understanding that
"output" in a general sense refers to an electrical signal delivered by or available from an electronic
device, or in particular, data or information. Such data or input could include that produced and
delivered by an automatic data-processing machine.
7.624 The concession in subheading 8471 60 (and tariff item number 8471 60 90 by extension) does
not cover the outputs themselves, but "output units". As discussed by Chinese Taipei, "unit" refers to,
inter alia "a device with a specified function forming pa rt of a complex mechanism". This definition
indicates that the meaning of "output units" cannot be dissociated from the question of what is the
"function performed" by such units and what complex mechanism they are a part of. To that end, we
recall that subheading 8471 60 is a subheading of 8471 which covers "aut omatic data-processing
machines" and "units thereof". Therefore, the "other" covered by tariff item number 8471 60 90 in the
EC Schedule would be all "input or output units" of automatic data-processing machines that are not
"for use in civil aircraft" (8471 60 10), "printers" (8471 60 40) or "keyboards" (8471 60 50).
7.625 We note that all parties agree that computers qualify as "automatic data-processing machines"
as used in HS1996 heading 8471. We note furthe r that "units" of "an automatic data-processing
machine" are devices forming part of and having at least one specified function in an ADP. Because
the "units" in question are "output" units of ADPs, it logically follows that the functions such "units"

829 Other panels have also examined technical dictionaries when conducting an ordinary meaning
analysis pursuant to Article 31 of the Vienna Convention. See e.g., the Panel Report on Mexico – Telecoms ,
paras. 7.81-7.83 (using the Newton's Telecom Dictionary to interpret certain terms from Mexico's Services
Schedule); Panel Report on China – Auto Parts , paras. 7.660-7-661 (using the Dictionary of Automobile
Engineering, an automobile industry dictionary, to interpret China's Schedule); Panel Report on EC – Approval
and Marketing of Biotech Products, para. 7.372 (using the Glossary of Biotechnology for Food and Agriculture,
a biotech industry dictionary, to define the word "biodiversity"); See also the Appellate Body Report on
EC - Poultry, para. 92 (citing the Dictionary of Trade Policy Terms and the Dictionary of International Trade).
830 The Appellate Body Report on EC – Chicken Cuts, para. 175 (citing the Appellate Body Reports on:
US - Softwood Lumber IV , para. 59; US - Offset Act (Byrd Amendment) , para. 248; and US - Gambling,
para. 166). See also the Appellate Body Reports on: China - Publications and Audiovisual Products, para. 348;
and India - Additional Import Duties, para. 167, fn. 324.
831 In this respect, we recall that the Appellate Body in EC – Chicken Cuts, noted that "Interpretation
pursuant to the customary rules codified in Article 31 of the Vienna Convention is ultimately an holistic exercise
that should not be mechanically subdivided into rigid components." (Appellate Body Report on
EC - Chicken Cuts, para. 176).

are required to perform are the sending/receiving of electrical signals, information, or data from an
ADP.
832
7.626 Therefore, we preliminarily conclude that the plain meaning of the term "output units" in the
relevant concession, i.e., subheading 8471 60, refers to devices that form part of an ADP or an ADP
system and that perform at least one specifi ed function involving sending/receiving signals,
information or data from the ADP or ADP system. This being the case, the concession in 8471 60 90
of the EC Schedule would cover all "input or output units" of automatic data-processing machines that
are not "for use in civil aircraft" (8471 60 10), "printers" (8471 60 40) or "keyboards" (8471 60 50).
7.627 We now turn to consider whether reading the terms of the concession in their context
confirms or changes our preliminar y understanding of the plain meani ng of the term "output units" in
the concession.
(ii) The terms of tariff item number 8471 60 90 in their context
7.628 The complainants argue that various contextual elemen ts, including the structure of heading
8471, the language used in various subheadings an d the interpretative materi als in the HS1996, such
as the notes to Chapter 84, support the conclusion that the scope of tariff item number 8471 60 90 in
the EC Schedule is broad enough to include LCD mon itors and other display devices, that are fitted
with connectors, such as DVI, that can receive and reproduce signals from an automatic data-
processing machine, regardless of whether they can also connect to other devices.
833
7.629 The European Communities argues that the key question is whether a given LCD monitor
falls within the scope of tariff item number 8471 60 90 or under one of the headings of Chapter 85. 834
Contrary to the complainants, the European Co mmunities argues that it has followed the HSEN1996
to heading 8471 in classifying FPDs under subhe adings 8528 12 and 85 28 13 and 8528 21 and
8528 22, where appropriate. 835 Specifically, the European Communities argues that it has simply
been applying the criteria contained therein to distinguish between display units of ADP machines and
video monitors. At the time relevant to this disput e, the language of the Explanatory Note to heading
8471 with regard to "separately presented units" su ch as "display units of automatic data-processing
machines" stated that display units of ADP mach ines were "capable of accepting a signal only from
the central processing unit of an automatic data-pro cessing machine and [were] therefore not able to
reproduce a colour image from a composite video si gnal whose waveform conforms to a broadcast
standard (NTSC, SECAM, PAL, D-MAC etc.)". Such display units, it argues, were equally "fitted
with connectors characteristic of data-processing systems (e.g. RS-232C interface, DIN or SUB-D
connectors)". According to the European Communiti es, these are precisely the two criteria that the

832 The parties have not raised the issue as to whether the displays under discussion in this dispute are
those of a type included within the same housing as the microprocessor and other components of an automatic
data-processing machine, or those external to the housing of an automatic data-processing machine. We recall
that the parties have limited their arguments to finished products, and not semi-finished ones. Accordingly, we
will focus our assessment here on finished products, or external displays or monitors, and not semi-finished
components that may be incorporated in the housing of an automatic data-processing machine.
833 United States' first written submission, paras. 137-139; United States' second written submission,
paras. 99-100; Japan's first written submission, para. 304; Japan's second written submission, para. 189; Chinese
Taipei's first written submission, para. 323-348.
834 European Communities' first written submission, para. 134. The European Communities argues, in
particular, that it is first necessary to exclude the applicability of other headings including 8528 before
considering whether the products at issue can fall within residual CN code 8471 60 90.
835 European Communities' first written submission, para. 158.

complainants claim the European Co mmunities should not have applied.
836 But, it argues, even if the
HSEN1996 to heading 8471 were ignored it would still be necessary "in most cases" to resort to the
application of GIR 3(c) because it would be impossi ble to identify the principal function of the
multifunctional monitor.837
The terms of HS1996 heading 8471, other subheadings under it and its overall structure
Arguments of the parties
7.630 The complainants argue that the duty-free concession in heading 8471 covers not only parts
of the heading, but th e entire heading. Japan believes this indicates that the duty-free treatment was
intended to be offered to all devices that are com puters or are used in conjunction with computers. 838
This is confirmed, argues Japan, by the use of the te rm "units thereof" in the heading. Because the
subheading in subheading 8471 60 clarifies that "un its thereof" includes "input or output units", the
complainants believe that the concession broadly co vers any devices used either to input information
into a computer or to output information coming from a computer. 839 Finally, Japan also claims that
the meaning "units thereof" indicates that the language of HS1996 heading 8471 is not limited by the
technology used in the products fa lling under it, which confirms that this heading "is broad enough to
cover products using changed technology."840
7.631 The complainants further argue that the overall structure of HS1996 heading 8471, which
includes several subheadings, confirms the broad scope of the European Communities' concession. 841
They consider that the terms of the other s ubheadings under HS1996 heading 8471 taken together
provide strong contextual support for understanding that all types of computers and all types of
computer units – separately or in various combinations – fall within heading 8471.842
7.632 In particular, Japan submits that HS1996 subheadings 8471 41, 8471 49 and 8471 50 cover
different types of products that combine a computer with some other computer related devices.843 The
text of these three headings is:
8471 41: "- Other digital automatic data-pro cessing machines; - - comprising in the
same housing at least a central processing un it and an input and output unit, whether
or not combined"
8471 49: "- Other digital automatic data-processing machines; - - Other, presented in
the form of systems"
8471 50: "- Digital processing units other than those of subheadings No 8471 41 and
8471 49, whether or not containing in the same housing one or two of the following
types of unit: storage units, input units, output units"844

836 European Communities' first written submission, para. 158.
837 European Communities' first written submission, para. 159.
838 Japan's first written submission, para. 304.
839 Japan's first written submission, para. 305.
840 Japan's response to Panel question No. 13.
841 United States' second written submission, para . 99 (referring to United States' first written
submission, para. 328.
842 United States' first written submission, para. 13 7; Japan's first written submission, para. 316;
Chinese Taipei's first written submission, para. 329.
843 Japan's first written submission, para. 310.

7.633 It argues, however, that the rest of the subheadi ngs deal with "units" of computers that do not
include computers, such as HS1996 subheadings 8471 60 (input and output units); 8471 70 (storage
units) and 8471 80 (other types of units).
845 Finally, Japan notes that subheading 8471 90 captures
"other" devices that would otherwise be included in heading 8471 but that do not fall within any of
the earlier subheadings.846
7.634 Chinese Taipei argues that heading 8471 makes clear th at all types of automatic data-
processing machines are covered, including, under HS1996 subheading 8471 10, 8471 30, 8471 41
and 8471 49. 847 Chinese Taipei notes that subheading 8471 60 contains a residual heading under
eight-digit tariff item number 8471 60 90 ("- - Other; "- - - Other"). Chinese Taipei submits that the
existence of the "other" 848 subcategory indicates therefore that, under the EC Schedule, all "input or
output units" of computers that are not specifically covered by one of the tariff item numbers under
the HS1996 subheading 8471 60 (i.e., as "printers" or "keyboards") fall under the "residual" tariff item
number 8471 60 90. Chinese Taipei reasons that the existence of a "residual subheading" in the
EC Schedule is important as it tends to underline the "broad scope" of the EC concession in HS1996
subheading 8471 60, under which it is included.849
7.635 The European Communities has argued in this dispute that the mere presence of an "others"
subheading within 8471 cannot have the effect of e xpanding the coverage of that heading beyond its
own terms.850 In the European Communities' view, becau se the present dispute concerns issues with
respect to concessions based on subheadings bel onging to different HS1996 Chapters (Chapters 84
and 85), "in resolving those issues no relevant cont extual guidance can be drawn from the mere fact
that HS1996 heading 8471 includes an 'Other' subheading."851
Consideration by the Panel
7.636 The Panel recalls that the Appellate Body has conf irmed that the HS may provide additional
relevant context to the interpretation of a given tariff concession. 852 The parties all agree that the
HS1996, on which the concession in CN 8471 60 in the EC Schedule is based, is the relevant HS
document to provide context for the ordinary meaning of that concession. 853 The Panel finds,
therefore, that the other parts of heading 8471 are relevant context for determining the scope of the
meaning of the terms used in the concession.
7.637 In this regard, we observe that heading 8471 is structured in broad terms as follows:

844 Japan's first written submission, paras. 307-309.
845 Japan's first written submission, para. 314.
846 Japan's first written submission, para. 315.
847 Chinese Taipei's first written submission, para. 328.
848 Chinese Taipei's first written submission, para. 554 (citing the Shorter Oxford Dictionary (1993)
defining "other" as "existing besides or distinct from that or those already specified or implied; further,
additional").
849 Chinese Taipei's first written submission, para s. 328, 555-557; Chinese Taipei's second written
submission, para. 333. Japan, more generally, refers to the European Communities' concession in CN code
8471 60 90 ("Other"), together with the text of other subheadings, as part of its contextual arguments on the
"structure" of HS1996 heading 84.71 (see Japan's first written submission, para. 142).
850 European Communities' first written submission, para. 424.
851 The European Communities' response to Panel question No. 13.
852 Appellate Body Report on EC – Chicken Cuts , para. 199; Appellate Body Report on
China - Auto Parts, para. 151.
853 Parties' response to Panel question No. 104.

HS1996 Description
8471 Automatic data-processing machines and units thereof; magnetic or optical
readers, machines for transcribing data onto data media in coded form and
machines for processing such data, not elsewhere specified or included:
8471 10 - Analogue or hybrid automatic data-processing machines
8471 30 - Portable digital automatic data-processing machines, weighing not more than
10 kg, consisting of at least a central processing unit, a keyboard and a display
 - Other digital automatic data-processing machines:
8471 41 - - Comprising in the same housing at least a central processing unit and an
input and output unit, whether or not combined
8471 49 - - Other, presented in the form of systems
8471 50 - Digital processing units other than those of subheading 8471 41 or 8471 49,
whether or not containing in the same housing one or two of the following
types of unit: storage units, input units, output units
8471 60 - Input or output units, whether or not containing storage units in the same
housing
8471 70 - Storage units
8471 80 - Other units of automatic data-processing machines
8471 90 - Other

7.638 In particular, we observe that the structure and wording of heading 8471 seem to encompass
all types of computer units within its parameters. The structure has the logic of first looking at ADPs
themselves (8471 10, 8471 30, 8471 41 and 8471 49)
854 and then moving on to "units" of those
computers in the various ways they are presented – i.e., as part of a computer, as systems, with digital
processing units, input or output units, storage units on a stand-alone basis, and other ADP units. In
particular, we note the residual category of "other". We agree with the European Communities that
the inclusion of an "other" category in a headin g or subheading cannot lead to an interpretation
beyond its terms. However, the inclusion of an "o ther" subheading can indicate that the terms of the
remaining subheadings do not by themselves delineate the limits of the scope of the main heading.
This structure, along with the generic nature of the language in the main heading, lends credence to an
interpretation of heading 8471 that it is meant to include any type of ADP unit.
7.639 At the same time, our understanding of th e broad nature of the scope of 8471 is not informed
by the fact that the entire headi ng was included in the duty-free concession in the ITA. Contrary to
the complainants' arguments, we do not believe this provides any guidance to the effect that terms
within that heading are to be interpreted broadly. It could be equally plausible that the entire heading
was included in the duty-free category because it w as narrowly construed and therefore, duty-free
treatment would be limited to a small set of products. That being said, however, our broad
understanding of the coverage of heading 8471 is based on the words in the heading itself in
conjunction with its structure. On the other hand, our analysis cannot end with an understanding that
heading 8471 has a broad coverage; indeed the re levant concession under consideration is not 8471
generally, but rather the specific subheading 8471 60 for input or output units.
7.640 We note that subheading 8471 60 in the EC Schedule follows the same type of structural logic
as the main heading. It begins generally with input or output units and then specifies the coverage of
printers, keyboards, and a residual category "other". As with the main heading, subheading 8471 60

854 We do note that even within 8471 30 the term "unit" is used to describe the Central Processing Unit
("CPU") which is the main component of an automatic data-processing machine, therefore it seems that the term
"unit" can also refer to parts of an automatic data-processing machine.

contains generic language "input or output units" and then has eight-digit tariff item number which
further subdivide the broader category. One of these eight-digit codes is "other", which as noted
above could indicate that the subheading under which it falls is not intended to be narrowly construed.
7.641 Thus the context provided by the terms of heading 8471 and subheading 8471 60 further
informs our earlier understanding that the plain meaning of the text of the terms in the concession
covers devices that form part of an ADP or ADP system and that perform at least one specified
function involving sending/receiving signals, information or data from the ADP or ADP system.
Under this scenario, the concession in 8471 60 90 of the EC Schedules would cover all "input or
output units" that are not "for use in civil aircraft" (8471 60 10), "printers" (8471 60 40) or
"keyboards" (8471 60 50).
The HS1996: Note 5 to Chapter 84 and the HSEN1996 to heading 8471 and heading 8528

7.642 The complainants have discussed the contextual relevance of the text of HS1996 Note 5 to
chapter 84 to understanding the scope of the European Communities' concession of duty-free
treatment for "input or output units" in subheading 8471 60. They consider that the chapter notes, in
particular Notes 5(B) and 5(C) to chapter 84 provide further contextual support for the broad
interpretation of the terms "input or output units" in the text of subheading 8471 60 in the EC
Schedule.855 By contrast, the European Communities argues that the language of those chapter
notes with regard to "display units of automatic data-processing machines" confirms that products
capable of receiving or reproducing signals from sources other than an automatic data-processing
machine are properly classifiable under HS1996 Chapter 85 856, "in most cases" through the
application of GIR 3(c) because it would be im possible to identify the principal function of a
monitor.857
7.643 We recall that the Appellate Body has confirme d that the HS may provide additional relevant
context to the interpretation of a given tariff conces sion, including not only the text of the Chapter,
heading and subheadings, but also the Section, Chapter heading and subheadings notes, the HSEN and
the GIRs. 858 The parties all agree that the 1996 version of the Harmonized System, on which the
concession in subheading 8471 60 in the EC Schedule is based, is the relevant document of the HS to
provide context for the ordinary meaning of that concession. 859 The Panel finds, therefore, that the
Section, Chapter, heading and subheadings notes, the HSEN and the GIRs that have been to referred
to by the parties qualify as context for interpreting the conces sions in subheading 8471 60 of the EC
Schedule. In doing this, we are mindful of the Ap pellate Body's general proposition that the binding
elements of the HS may have greater probative value than those which are non- binding.860

855 United States' first written submission, para. 13 8; Japan's first written submission, para. 318;
Chinese Taipei's first written submission, para. 331. (Exhibits US-84, JPN-23; EC-15).
856 European Communities' first written submission, para. 158.
857 European Communities' first written submission, para. 159.
858 Appellate Body Reports on EC - Computer Equipment, para. 89; EC – Chicken Cuts, para. 199 and
China – Auto Parts, para. 151.
859 The parties' responses to Panel question No. 132 (arguing that the HS1996 applied at the time of the
concession and that the HS2007 (and th e Explanatory Notes thereto) are neither 'context' under Article 31(2) of
the Vienna Convention, nor an element 'to be taken into account together with the context', under Article 31(3)
of the Vienna Convention).
860 Appellate Body Report on EC – Chicken Cuts, para. 224.

Notes 5(B) and 5(C) to HS1996 Chapter 84
7.644 The complainants submit that Note 5(B)(a) to HS1996 Ch apter 84 permits that a "unit" is
considered part of an automatic data-processing sy stem when "it is either 'of a kind solely or
principally used' in an automatic data-processing system".
861 They argue that solely or principally
have different meanings. Therefore, they argue th at the mere possibility that a display device could
receive and reproduce signals from a source other th an an automatic data-processing machine is not
sufficient to exclude it from HS1996 heading 8471.862
7.645 In particular, Japan notes that the first sentence of No te 5(B) indicates that "solely" and
"principally" are alternatives.863 It argues that a product should qualify under Note 5(B) as a "unit" of
an automatic data-processing machine if it is either "solely" or "principally" of a kind used with an
automatic data-processing machine. 864 Japan notes that the word "sol ely" means "as a single person
or thing; without any other as an associate, etc.; alone" and that "principally" means "for the most
part; in most case". 865 Based on these definitions, Japan contends that "solely" in Note 5(B) means a
unit is only used in an automatic-data-processing sy stem, whereas "principally" means that the unit
may be used in connection with machines other th an automatic data-processing systems. Thus, it
considers that displays that are capable of recei ving and reproducing signals from sources other than
solely an automatic data-processing system should qualify under heading 8471 as "principally" used
with an automatic data-processing machine. By re quiring exclusive use with an automatic data-
processing machine under the measures at issue, Japan argues that the EC measures at issue render the
term "principally" in Note 5(B)(a) "inutile".866
7.646 Chinese Taipei argues that the ordinary meaning of the term "principally" is "1. in the chief
case, above all, pre-eminently" or "3 For the most part; in most cases", which it considers makes clear
that "principally" does not exclude other uses .867 Accordingly, the United States and Chinese Taipei
argue that an output unit of an automatic data-processing machine that is capable of receiving signals
from sources other than an auto matic data-processing machine can still fall within the scope of
HS1996 heading 8471 as an output unit "principally " for use with an automatic data-processing
machine.868
7.647 Japan and Chinese Taipei additionally argue that Note 5(C) to Chapter 84 applies because it
discusses "separately presented units of an automatic data-processing machine".869 They consider this
paragraph provides the broadest possible reading of heading 8471 because it includes any unit "of" an

861 United States' first written submission, paras. 138-139 (Exhibit US-84); United States' second
written submission, para. 100; Chinese Taipei's first written submission, paras. 332-333.
862 United States' first written submission, para. 138 , United States' second written submission, para.
100; Japan's first written submission, para. 337; Chinese Taipei's first written submission, paras. 334; 337-338.
863 In its first submission, Japan indicates that Note 5(B) to Chapter 84 does not appear to apply directly
to "separately presented units of "an automatic data-p rocessing machine", but "separate units" of "systems" of
automatic data-processing machines. Japan submits that the displays at issue are not necessarily parts of
"systems", leaving the applicability of Note 5(B) unclear. Nevertheless it co nsiders the meaning, in light of the
European Communities' identification of Note 5 (Japan's first written submission, paras. 332-334).
864 Japan's first written submission, paras. 332-334.
865 Japan's first written submission, paras. 333-334 (referring to the Shorter Oxford Dictionary (1993),
pp. 2939 and 2356 (Exhibit JPN-11)).
866 Japan's first written submission, para. 337.
867 Chinese Taipei's first written subm ission, para. 335 (referring to the Shorter Oxford Dictionary
(1993), p. 2356).
868 Chinese Taipei's first written submission, paras. 334; 337-338.
869 Japan's first written submission, para. 234; Japan's second written submission, para. 192.

automatic data-processing machine, an d states that such units are to be classified in heading 8471.
870
Japan submits that the definition "of" – including, "relat ed to (a thing) in a wa y defined, specified, or
implied by the preceding words" – indicates a br oad application and does not require exclusivity. 871
Thus, it argues that monitors that are capable of receiving or reproducing signals of an automatic data-
processing machine through a DVI are a "units" of an automatic data-processing machine, regardless
of whether they can reproduce or receive signals from other sources. 872 Chinese Taipei takes Japan's
view that Note 5(C) does not require exclusive use with an automatic data-processing machine in
order to be classified under heading 8471.873
HSEN1996 to heading 8471 and heading 8528
7.648 The European Communities argues that the language of HSEN1996 to heading 8471 with
regard to separately presented units" such as di splay units of automatic data-processing machines
confirms that products capable of receiving or reproducing signals from sources other than an
automatic data-processing machine are prope rly classifiable under HS1996 Chapter 85. 874 I n
particular, the European Communities cites the language in HSEN1996, Note I(D)(1) to heading 8471
that states: "Display units of automatic data-p rocessing machines are capable of accepting a signal
only from the central processing unit of an automati c data-processing machine ... They are fitted with
connectors characteristic of data-processing systems (e.g. RS-232C interface, DIN or SUB-D
connectors) and do not have an audio circuit...".
875 The European Communities additionally cites the
HSEN1996 to heading 8528 that provides: "video mon itors of this heading should not be confused
with the display units of [ADP] machines described in the Explanatory Note to heading 8471".876
7.649 The complainants submit that HSEN to headings 8 471 and 8528 should not be relied on to
inform interpretation of tariff item number 8471 60 90. 877 In particular, Japan and Chinese Taipei
argue that, by referring to ADP monitors as "accepting a signal only from an ADP machine," the
HSEN to 8471 Point I(D)(1) contradicts the wording of Note 5(B)(a) to Chapter 84 that refers to input
or output units "of a kind principally or solely for use in an ADP system" (emphasis added) and

870 Japan's first written submission, para. 324.
871 Japan's first written submission, para. 325.
872 Japan's first written submission, paras. 327-328.
873 Chinese Taipei's first written submission, para. 340.
874 European Communities' first written submission, para. 158.
875 European Communities' first written submission, paras. 156 and 158.
876 European Communities' first written submission, paras. 156-157. The European Communities
recognizes that the Europe an Court of Justice in its preliminary ruling in Kamino identified a textual conflict
between the language in HSEN to heading 8471 and that in Note 5(B)(a) to Chapter 84, ruling that the
conflicting part in HSEN to heading 8471 is inapplicable on the basis of the hierarchy of Notes in the CN and
the HS (European Communities' first written submission, para. 165). Based on this, the European Communities
acknowledges that its classification justification in most cases is "too rigid" and needs to be reviewed (European
Communities' first written submission, paras. 166-167).
877 United States' second written submission, para. 100; Japan's second written submission, para. 191;
Chinese Taipei's second written submissi on, para. 185. The United States argues that HSEN cannot supersede
Chapter Notes. Chinese Taip ei argues that the HSEN are not legally binding and thus should not be given
interpretative value where they conflict with binding HS section or chapter notes or with the wording of HS
headings.

therefore must be ignored.
878 Thus, they reject that the HSEN(1996) to heading 8471, including its
Point I(D), justifies reading the term "principally" out of Note 5(B)(a) to Chapter 84.879
The application of GIR 3(c)
7.650 To the extent the HSEN1996 to heading 8471 were considered irrelevant, the European
Communities argues that it would still be necessary "in mo st cases" to resort to the application of GIR
3(c) because it would be impossible to identify the prin cipal function of a monitor. It argues that the
assessment of whether a monitor is "principally" for use with an automatic data-processing machine –
and thus, whether or not it is classifiable under HS1996 heading 8471 – requires a case-by-case
analysis on the basis of objective technical character istics. In such an assessment, it argues, recourse
to GIR 3(c) may be necessary where the principal function cannot be identified. If GIR 3(c) is
applied, the European Communities argues, relevant monitors would then be classified in one of the
subheadings in heading 8528 because that occurs l ast in numerical order among those which equally
merit consideration, i.e., as a video monitor or reception apparatus for television.880
7.651 The complainants reject this view. 881 Japan argues that resort to GIR 3(c) is incorrect if the
interpretative question can be resolved by refere nce to the language of the relevant heading. 882 I n
general, Chinese Taipei cautions against application of rule GIR 3(c), arguing that classification under
the heading that occurs last in numerical order among those which equally merit consideration is
arbitrary and "without economic or real basis".883 It argues that the application of GIR 3(c) to devices
able to reproduce signals from sources other th an automatic data-processing machines would
nevertheless violate EC obligations under tari ff item number 8471 60 90 in its Schedule, because
application of this rule should lead to classificati on in either headings 8531 or 9013, not heading 8528
as the European Communities has argued. 884 The United States argues that GIR 3 should not be
applied in these circumstances since the products at issue are in no way classifiable outside of chapter
84 or chapter 85.885
Consideration by the Panel
7.652 The Panel notes at the outset that the discussion of the HS1996 Notes in this section of the
Reports is related to the contextual value that Note 5 to Chapter 84 provides for interpreting the
ordinary meaning of the terms in subheading 8471 60 in the EC Schedule– i.e., in this instance,

878 Japan's second written submission, para. 193; Chinese Taipei's second written submission, para.
185; Chinese Taipei's second oral statement, para. 18.
879 United States' second written submission, para. 100; Japan's second written submission, para. 191;
Chinese Taipei's second oral statement, para. 17. Chinese Taipei submits that the European Court of Justice in
Kamino confirmed that any CNEN and HSEN that would require exclusive use with an automatic data-
processing machine for a classification under heading 8471 is inapplicable, since it would modify the scope of
Note 5(B)(a) to Chapter 84 (Chinese Taipei's first written submission, para. 208).
880 European Communities' first written submission, paras. 159 and 166.
881 United States' response to Panel question No. 20; Japan's second written submission, para. 194;
Chinese Taipei's second written submission, para. 182.
882 Japan's second written submission, para. 194; Japan's response to Panel question No. 20.
883 Chinese Taipei's response to Panel question No. 20.
884 Chinese Taipei submits that the European Communities' application of GIR3(c) would regardless be
inconsistent with its obligations, because it considers that it would not lead to classification of display devices
under heading 8528 but instead to duty-free headings 8531 or 9013 that equally merit consideration and occur
later in numerical order than 8528 (Chinese Taipei's first written submission, para. 340; Chinese Taipei's second
written submission, para. 186).
885 United States' response to Panel question No. 20.

"output units". We recognize that HS1996 Note 5 to Chapter 84 is relevant in determining whether
the flat panel display devices identified by the comp lainants – those flat panel display devices that are
fitted with a DVI interface, or similar connector, and/or are capable of reproducing and receiving
video signals from automatic data-processing machines as well as other sources – could fall within the
scope of 8461 60.
 We thus begin our analysis of what context Note 5 provides to an understanding of
the concession in 8471 60.
7.653 HS1996 Note 5 to Chapter 84 provides886:
"Chapter 84
Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof
Notes.

5.(A) For the purposes of heading No. 84.71, the expression "automatic data-
processing machines" means :
(a) Digital machines, capable of (1) st oring the processing program or programs
and at least the data immediately neces sary for the execution of the program;
(2) being freely programmed in accordance with the requirements of the user;
(3) performing arithmetical computations specified by the user; and, ( 4)
executing, without human intervention, a processing program which requires
them to modify then-execution, by logical decision during the processing run;
(b) Analogue machines capable of si mulating mathematical models and
comprising at least: (1) analogue elements, control elements and
programming elements;
(c) Hybrid machines consisting of either a digital machine with analogue
elements or an analogue machine with digital elements.
(B) Automatic data-processing machines may be in the form of systems consisting of
a variable number of separate units. Subject to paragraph (E) below, a unit is to be
regarded as being a part of a complete system if it meets all of the following
conditions:
(a) It is of a kind solely or principally used in an automatic data-processing system;
(b) It is connectable to the central processing unit either directly or through one or more
other units; and
(c) It is able to accept or deliver data in a form (codes or signals) which can be used by
the system.
(C) Separately presented units of an auto matic data-processing machine are to be
classified in heading No. 8471.

886 Exhibits US-84; JPN-23; EC-15.

(D) Printers, keyboards, X-Y co-ordinate input devices and disk storage units which
satisfy the conditions of para graphs (B) (b) and (B) (c) a bove, are in all cases to be
classified as units of heading No. 8471.
(E) Machines performing a specific function other than data-processing and
incorporating or working in conjunction with an automatic data-processing machine
are to be classified in the headings appropriate to their respective functions or, failing
that, in residual headings.

Subheading Notes.
1.- For the purposes of subheading No. 8471. 49, the term "systems" means automatic
data-processing machines whose units satisfy th e conditions laid down in Note 5(B)
to Chapter 84 and which comprise at least a central processing unit, one input unit
(for example a keyboard or scanner), and one output unit (for example, a visual
display unit or a printer)."
7.654 The parties have additionally discussed the relevance of HSEN1996 to headings 8471 and
8528.
7.655 HSEN1996 to Heading 8471 provides:
"I.– Automatic data-processing machines and units thereof
(…)
D.– Separately presented units
This heading also cover separately presente d units of data-processing systems. These
may be in the form of units having a separate housing and designed to be connected,
for example, by cables to other machines on a system, or in the form of units not
having a separate housing and designed to be inserted into a machine (e.g., insertion
onto the main board of a central processing unit). Constituent units are those defined
in Parts (A) and (B) above as being parts of a complete system.
Among the constituent units included are disp lay units of automatic data-processing
machines which provide a graphical representation of the data processed. They differ
from the video monitors and television r eceivers of heading 8528 in several ways,
including the following:
(1) Display units of automatic data-processing machines are capable of accepting a
signal only from the central processing unit of an automatic data-processing machine
and are therefore not able to reproduce a colour image from a composite video signal
whose waveform conforms to a broadc ast standard (NTSC, SECAM, PAL, D-MAC
etc.). They are fitted with connectors ch aracteristic of data-processing systems (e.g.
RS-232C interface, DIN or SUB-D connectors) and do not have an audio circuit.
They are controlled by special adaptors (e.g. monochrome or graphics adaptors)
which are integrated in the central processing unit of the data-processing machine.

(2) These display units are characterised by low magnetic field emissions. Their
display pitch starts at 0.41 mm for medi um resolution and ge ts smaller as the
resolution increases.
(3) In order to accommodate the presentation of small yet well-defined images,
display units of this heading utilise smaller dot (pixel) sizes and greater convergence
standards than those applicable to video monitors and television receivers of heading
8528. (Convergence is the ability of the electron gun(s) to excite a single spot on the
face of the cathode-ray tube without disturbing any of the adjoining spots.)
(4) In these display units, the vi deo frequency (bandwid th), which is the
measurement determining how many dots can be transmitted per second to form the
image, is generally 15 MHz or greater. Whereas, in the case of video monitors of
heading 8528, the bandwidth is generally no greater than 6 MHz. The horizontal
scanning frequency of these display units varies according to the standards for
various display modes, generally from 15 kHz to over 155 kHz. Many are capable of
multiple horizontal scanning frequencies. Th e horizontal scanning frequency of the
video monitors of heading 8528 is fixed, usually 15.6 or 15.7 kHz depending on the
applicable television standard. Moreover , the display units of automatic data-
processing machines do not operate in confor mity with national or international
broadcast frequency standards for public broadcasting or with frequency standards for
closed-circuit television.
(5) Display units covered by this head ing frequently incorporate tilt and swivel
adjusting mechanisms, glare-free surfaces, flicker-free display, and other ergonomic
design characteristics to facilitate prolonged periods of viewing at close proximity to
the unit...".
887
7.656 HSEN1996 to Heading 8528 provides:
"This heading covers television receivers (including video monitors and video
projectors), whether or not incorporating radio-broadcasting receivers or sound or
video recording or reproducing apparatus.
This heading includes:
(1) Television receivers of the kind used in the home (table models, consoles, etc.)
including coin-operated televisions sets.
(…)
(5) Video monitors which are receivers connected directly to the video camera or
recorder by means of co-axial cables, so that all the radio-frequency circuits are
eliminated. They are used by television companies or for closed-circuit television
(airports, railway stations, steel plants, hospitals, etc.). These apparatus consist
essentially of devices which can generate a point of light and display it on a screen
synchronously with the source signals. They incorporate one or more video amplifiers
with which the intensity of the point can be varied. They can, moreover, have
separate inputs for red (R), green (G) and bl ue (B), or be coded in accordance with a

887 Exhibit EC-11.

particular standard (NTSC, SECAM, PAL, D-MAC, etc.). For reception of coded
signals, the monitor must be equipped with a decoding device covering (the
separation of) the R, G and B signals. The most common means of image
reconstitution is the cathode-ray tube, for direct vision, or a projector with up to three
projection cathode-ray tubes; however, other monitors achieve the same objective by
different means (e.g., liquid crystal screens , diffraction of light rays on to a film of
oil).
Video monitors of this heading should not be confused with the display units of
automatic data-processing machines described in the Explanatory Note to heading
8471.

The heading excludes, inter alia:
(a) Display units of automatic data-processing machines, whether or not presented
separately (heading 8471) ...".888
7.657 The parties have also addressed the relevance of GIR 3(c) which provides:
"When goods cannot be classified by reference to Rule 3 (a) or 3 (b), they shall be
classified under the heading which occurs last in numerical order among those which
equally merit consideration".
7.658 Finally, in respect of this rule, HSEN1996 Explanatory Note VI to Section Note 3 as follows:
"In general, multi-function machines are classified according to the principal function
of the machine.
(…)
Where it is not possible to determine the principal function, and where, as provided in
Note 3 to the Section, the context does not otherwise require, it is necessary to apply
General Interpretative Rule 3 (c); such is the case, for example, in respect of multi-
function machines potentially classifiable in several of the headings 84.25 to 84.30, in
several of the headings 84.58 to 84.63 or in several of the headings 84.69 to 84.72."
889
7.659 We recall from paragraph 7.34 above that Article 1(a) of the HS Convention provides that the
HS comprises headings and subheadings and thei r related numerical codes, as well as the section,
chapter and subheading notes and GIRs. Under Article 3.1(a) of the HS Convention, each contracting
party seeks to ensure that its domestic nomenclature is in conformity with the HS, and to use the
headings and subheadings of the HS without addition or modification, and apply the GIRs and all the

888 HSEN1996 to heading 8528 (Exhibit EC-17).
889 Exhibit EC-16.

Section, Chapter and Subheading Notes, and in doing so, it shall not modify the scope of the Sections,
Chapters, headings or subheadings of the Harmonized System.
890
7.660 The GIRs provide the interpretative principl es which govern the classification of goods.
GIR 1 provides that:
"The titles of Sections, Chapters and sub-Ch apters are provided for ease of reference
only; for legal purposes, classification shall be determined according to the terms of
the headings and any relative Section or Chapter Notes and, provided such headings
or Notes do not otherwise require, accordin g to the following provisions:" (emphasis
added)
7.661 We observe that HS1996 Note 5 to Chapter 84 is organized in a way similar to the heading
itself. Note 5(A) defines an automatic data-processing machine; Note 5(B) describes how a "unit" can
qualify as part of a "complete system"; Note 5(C) addresses units presented separately; Note 5(D) to
printers, keyboards and X-Y devices and disk storag e units; and Note 5(E) to machines incorporating
or working in conjunction with an automatic data-processing machine and performing a specific
function other than data-processing.
7.662 With respect to the three criteri a in Note 5(B), we note that the main disagreement among the
parties is the relevance of the requirement in Note 5(B)(a) of a determination as to the scope of the
coverage of the term "output units " in subheading 8471 60. Namely, that to be regarded as part of a
complete system, the "unit" must be "of a kind so lely or principally used in an automatic data-
processing system". The European Communities does not dispute that chapter note 5(B) is applicable
to the question of what types of products fit within the subheading 8471 60 and that a product must be
solely or principally used in an automatic data-pro cessing system in order to fall within the scope of
the concession.
891 However, it argues that HSEN1996 to h eading 8471 is relevant to understanding
Note 5(B)(a).892
7.663 In response to a question posed by the Panel on the meaning of the phrase "of a kind" in Note
5(B)(a), the WCO Secretariat explains that the HS Nomenclature Committee considered the issue, but
declined to issue an Interpretativ e Rule defining the expression. Therefore, in the WCO Secretariat's
view, it would "seem reasonable to conclude that th e Nomenclature Committee was, in effect, leaving
the interpretation of the expressions to each admini stration to apply, on a case-by-case basis, in the
context of classifying specific articles." 893
7.664 We note that the chapeau to Note 5(B) tells us that the note provides guidance in determining
whether a unit can be regarded as being part of a co mplete system. We are not convinced that a unit
needs to be regarded as part of a complete system to fall within the meaning of the term "input or
output units" in subheading 8471 60 as a unit could also be presented separately as explained in Note
5(C) or fall within the meaning of Note 5(D). 894 Note 5(C) provides that separately presented units of

890 Exhibits EC-15; US-8; TPKM-6.
891 European Communities' second written submission, para. 130.
892 European Communities' first written submission, para. 158.
893 WCO responses to Panel questions, pp. 5-6.
894 The Panel notes that HS96 subheading 8471 60 does not refer to "systems" or "complete systems",
rather HS96 subheading 8471 49 is the only subheading of HS96 heading 8471 which refers to systems.
Although not raised by the parties in this dispute, this may raise a question whether Note 5(B) is applicable to all
"units" or only those units that are to be regarded as forming part of a complete system. We note that in
para. 7.626 above, based on the plain meaning of the terms, we considered that a unit of an ADP is a device that
forms "part of an ADP or an ADP system" and that performs "at least one specified function involving

an ADP machine "are to be classified in heading 8471." Additionally, Note 5(D) provides that
printers, keyboards, X-Y co-ordinate input devices a nd disk storage units which satisfy the terms of
Notes 5(B)(b) and (B)(c) are in all cases to be classified as units of heading 8471.
7.665 We are of the view that these provisions of th e Chapter Note must be read holistically and
cannot be read in such a way that whether a par ticular device falls within heading 8471 would differ
depending on how it is presented at the border, i.e. , separately or as part of a complete system. We
also note that the requirement in Note 5(B)(a) that un its be "of a kind solely or principally used in an
automatic data processing system" resonates within an expression of what we have already found to
be the plain meaning of an "unit "of" an ADP machine".
895 We also recall that an ADP system is
defined in the subheading note as consisting of at least a CPU, one input unit, and one output unit. 896
Therefore, regardless of whether a unit is presented as part of a complete ADP system or separately it
must be "of a kind solely or principally used in an automatic data processing system".
7.666 The term "principally" means "for the most par t; in most case", "in the chief case, above all,
pre-eminently" or "for the most part; in most cases".
897 The formulation of "solely" or "principally" as
alternatives thus means that it is not necessary for a unit to be used exclusively in an automatic data-
processing system for it to be to be classified with in heading 8471. While Note 5(C) is formulated
differently as, "separately presented units of an automatic data-processing machine", in our view, Note
5 has to be read holistically and in its entirety su ch that heading 8471 should not apply differently to
units whether presented separately or as part of a complete system. Accordingly, we understand the
term "of" in 5(C) embodies the conditions set forth in 5(B).
7.667 We note that HSEN1996 to heading 8471 app ears to contradict HS1996 Chapter Note
5(B)(a). In particular, Chapter I(D) to HSEN1996 to heading 8471 indicates that separately presented
units of data-processing systems may form part of a complete system, as discussed above. However,
its point 1 states that "[d]isplay units of auto matic data-processing machines are capable of accepting
a signal only from the central processing unit of an auto matic data-processing machine" (emphasis
added) while Chapter Note 5 provides that 8471also c overs units that are principally for use with an
automatic data-processing machine. Since an explan atory note cannot alter the scope of the HS, we
consider that Chapter I(D) to HSEN1996 to headi ngs 8471 does not justify excluding flat panel
display devices from heading 8471, merely because th ey can also connect to sources other than an
automatic data-processing machine. 898 In this respect, we note that the Appellate Body in

sending/receiving signals, informati on or data from the ADP or ADP sy stem." While the Panel does not
exclude an interpretation whereby "units" might nevertheless fall under Note 5(C) or 5(D), for example, the
Panel does not consider that it makes a substantive difference in the circumstances of this dispute, and it
therefore does not consider it necessary to rule on this matter.
895 See paragraph 7.626 above where we stated that, based on the plain meaning of the terms, units of
an ADP are devices that form part of an ADP or an ADP system and that perform at least one specified function
involving sending/receiving signals, information or data from the ADP or ADP system.
896 Subheading Note 1 (for 8471 49) cited in Japan's first written submission, fn. 69. Subheading Note
1 clarifies that for the purposes of subheading 8471 49 the term "systems" means computers "whose units satisfy
the conditions laid down in Note 5(B) to chapter 84 an d which comprise at least a central processing unit, one
input unit (for example a keyboard or a scanner) and one output unit (for example a visual display unit or a
printer).
897 Chinese Taipei's first written subm ission, para. 335 (referring to the Shorter Oxford Dictionary
(1993), p 2356).
898 In this respect, we note that the European Cour t of Justice ruled that point 1 to Chapter I(D) to
HSEN1996 was to be considered inapplicable, since th e requirement that display units of automatic data-
processing machines are capable of accepting a signal only from the central processing unit of an automatic

EC - Chicken Cuts explained that Chapter Notes to the Ha rmonized System, which are binding, can
have greater probative value than HSEN.
899 We are of the view that the Chapter Notes provide
relevant guidance here.
7.668 Note 5(D) provides additional context to unders tanding what the crucial features are of an
"input or output unit" of an automatic data-processi ng machine. Note 5(D) provides that a printer,
keyboard, or X-Y device which satisfies the terms of Notes 5(B)(b) and (B)(c) falls within the heading
8471. This may indicate that the criteria in Note 5( B)(b) and (B)(C) are important to units of heading
8471. The implications on the relevance of Note 5( B)(a) are unclear, however, as it may only be that
the types of units enumerated in Note 5(D) are so obviously part of a system of an automatic data-
processing machine that it would not be necessary to assess whether these units were of a kind solely
or principally for use with an automatic data-processing machine.
7.669 Finally, Chapter Note 5(E) to HS1996 Chapter 84 provides for a classification of machines
incorporating or working in conjunction with an automatic data-processing machine and performing a
specific function other than data-processing. According to this note, these "are to be classified in the
headings appropriate to their respective functions or, failing that, in residual headings". There has
been no argument before us, however, that the products at issue in this dispute are "machines
incorporating or working in conjunction with an automatic data-processing machine and performing a
specific function other than data-processing". Noth ing in Note 5(E) instructs on how to determine
whether a product which performs data processing and a specific function other than data processing
may fall within the scope of heading 8471. The Pa nel notes that monitors that can operate as display
units of an automatic data-processing machine therefor e do not appear to fall within the scope of the
note.
7.670 Our analysis of Note 5 to HS1996 Chapter 84 and the HSEN1996 to heading 8471 has led us
to understand that automatic data-processing machin e "units" that are of a kind used solely or
principally with an automatic data-processing ma chine are to be covered under heading 8471,
regardless of whether they are presented separately or as part of a complete system. This is also true
of units that are printers/keyboards/X-Y units or th at are disk storage units. This provides important
contextual guidance as to the parameters of the scope of this concession. The comprehensive scope of
the Chapter Note reinforces our conclusion that heading 8471 is broad.
7.671 This analysis further informs our understanding that input or output units of an ADP machine
under subheading 8471 60 of the EC Schedule includes devices that are "of a kind solely or
principally used by an automatic data-processing sy stem", and that perform at least one specified
function that involves accepting or delivering data in a form (codes or signals) that can be used by the
automatic data-processing machine or "automat ic data-processing machine system". More
specifically, tariff item number 8471 60 90 of the EC Sc hedule would cover all "input or output units"
that are not "for use in civil aircraft" (8471 60 10), "printers" (8471 60 40) or "keyboards"
(8471 60 50). These Notes also inform our understa nding that not all devices capable of connecting
to an automatic data-processing machine by accepting or delivering data from or to an automatic-data-
processing machine necessarily qualify as an input or output unit of heading 8471.
7.672 Finally, we observed that GIR 1 directs contracti ng parties to the HS to consider the terms of
the headings and any relevant Section or Chapter Notes in classifying goods at their border, and
otherwise, according to the principles in the remain ing GIRs 2-6. We note that GIR 2 pertains to

data-processing machine would have the effect of amending and, in particular, of restricting the scope of Note
5(B)(a) to Chapter 84 of the CN (See European Court of Justice (Kamino), paras. 49-50 (Exhibit TPKM-52)).
899 Appellate Body Report on EC – Chicken Cuts, para. 224.

incomplete or unfinished articles, or mixtures or co mbinations, none of which are applicable in this
case. GIR 3 sets forth applicable rules when goods are prima facie classifiable under two or more
headings.
900 We note that we do not need to consider th is issue further as it is not relevant in the
circumstances of the present case. The issue before us is whether at least some of the products at issue
(that is, with particular characteristics such as possessing a DVI connector and/or the ability to receive
and display signals from both ADP and non-ADP sour ces) will fall within the scope of the 8471 60.
We are not called upon to determine whether all such products fall within this concession, or whether
in some instances, some products with those charact eristics may be properly considered to fall within
the scope of other concessions. We find that GIRs Rules 4-6 are also inapplicable here.
Other parts of the EC Schedule
7.673 In addressing the complainants' separate Artic le II claims concerning the FPDs narrative
description and tariff item number 8471 60 90 in the EC Schedule, the European Communities has
identified heading 8528 under the HS1996 as anothe r potential relevant headings under which the
products discussed by the complainants should be classified.
7.674 We observe that the general structure of headi ng 8528 in the EC Schedule, which is identical
to HS1996 heading 8528, is as follows:
HS1996 Description
8528 Reception apparatus for television, whether or not incorporating radio-
broadcast receivers or sound or video recording or reproducing apparatus;
video monitors and video projectors:
 - Reception apparatus for television, whether or not incorporating radio-
broadcast receivers or sound or video recording or reproducing apparatus
8528 12 - - Colour
8528 13 - - Black and white or other monochrome
 - Video monitors
8528 21 - - Colour
8528 22 - - Black and white or other monochrome
8528 30 - Video projectors

7.675 The European Communities considers that a key issue before the Panel is whether the
products discussed by the complainants fall within the scope of the concession: (i) under tariff item
number 8471 60 90, (ii) under any of subheadings 85 28 21 and 8528 22, and 8528 12 and 8528 13, as
either "video monitors" or "reception apparatus for television", or (iii) prima facie, under both tariff
item number 8471 60 90 and any one of the subheadings of 8528. 901 We note that the European
Communities has not provided a detailed analysis of the meaning that should be attributed to the
terms of the identified HS1996 subheadings under 8528 or its scope of coverage.

900 We note that the Appellate Body in EC – Chicken Cuts explained that an assessment of the scope of
a tariff commitment is a first step that should not be confused with the determination of where a product is
properly classified. It explained that GIR 3 is only relevant in a classification exercise. (Appellate Body Report,
EC – Chicken Cuts , para. 234). We note that GIR 3(c) provides general guidance in cases where classification
cannot be determined based either on the specific descrip tion of a heading or the esse ntial character of a good.
We thus do not consider this provision sheds light on our understanding of "output unit" in heading 8471 in the
circumstances of this case.
901 European Communities' first written submission, paras. 100-101.

7.676 The complainants submit that the ordinary meaning of the terms of tariff item number
8471 60 90, considered in the context of HS 1996 subheading 8471 60 and the HS1996 Note 5 to
Chapter 84 support their view that a device that is pr incipally used for computers, but is also capable
of receiving a signal from sources other than an auto matic data-processing machine, or equipped with
a DVI or similar interface, is a "unit" of an au tomatic data-processing machine within the ordinary
meaning of the language in HS1996 heading 8471.
902
7.677 The Panel will address below the relevance of whether the products at issue properly fall
within the scope of the dutiable concession under HS 1996 heading 8528, to the extent relevant. Here,
we address only whether the terms of HS1996 headin g 8528 have any relevance for the interpretation
of the scope of coverage of tariff item number 8471 60 90 in the EC Schedule.
7.678 We do not consider that the terms in head ing 8528 lend interpretative assistance to
determining, in a general sense, the meaning to be given to the terms "input or output units" of
automatic data-processing machines in the concession at issue. The word "unit" or any explanation of
that term does not appear in the heading. Rather the terms "Reception apparatus for television" and
"Video monitors" are prominent.
7.679 As noted above, in the circumstances of this c ase we do not consider it necessary to rule on
whether some of the products at issue, namely FPDs with DVI and/or the capability to receive and
display signals from automatic data processing mach ines and other sources, may fall within the scope
of heading 8528 by virtue of the effect of the HS interpretative rules considered as context. The issue
before us whether some such products fall within the scope of heading 8471 60. Accordingly, we do
not consider it necessary to consider heading 8528 any further.
7.680 Therefore, we find that an analysis of the other portions of the EC Schedule, outside the terms
of subheading 8471 60, do not provide significant additional guidance in interpreting the scope of the
concession in 8471 60 of the EC Schedule.
(iii) Object and purpose (Article 31 of the Vienna Convention)
Arguments of the parties

7.681 We recall from our assessment of the partie s' arguments concerning object and purpose 903,
that the complainants argued that a recognized object and purpose of the WTO Agreement and GATT
1994 is providing security and predictability in the reciprocal and mutually advantageous
arrangements directed to the substantial reduction of tariffs and barriers to trade. 904 The complainants
argue that the objectives of security and predictabi lity also require that c oncessions cover products
even if they did not exist in that form at the time the concessions were granted as long as they comply
with the wording of the concessions concerned. 905 The complainants also note that both the WTO
Agreement and the GATT 1994 recognize "expanding the pr oduction and trade in goods" as another

902 Japan's second written submission, para. 188; Chinese Taipei's second written submission,
para. 142.
903 See paras. 7.537-7.549 above.
904 Complainants' response to Panel question No. 1; Japan's first written submission, paras. 172
(referring to paragraph 3 of the Preamble to the Marrakesh Agreement; Panel Report on China – Auto Parts ,
para. 7.460 and Appellate Body Report on EC – Chicken Cuts , paras. 243 and 288; Japan's second written
submission, paras. 409-410; Chinese Taipei's first writte n submission, paras. 144-145; Chinese Taipei's second
written submission, para. 282.
905 Japan's first written submission, para. 177; Chinese Taipei's first written submission, paras. 289-290,
627-630; Chinese Taipei's second written submission, para. 444.

core object and purpose that is furthered by mutually reciprocal reductions in tariffs. In addition, the
complainants argue that the ITA may be relevant to analyse the object and purpose of the GATT 1994
because the ITA is an instrument related to the GATT 1994.
906
7.682 The European Communities considers the complainants' interpretative approach is
overbroad and compromises the legal certainty a nd predictability of tariff concessions, creating the
risk that Members will become reluctant to pursue the ITA liberalization process. 907
Consideration by the Panel
7.683 The Panel concluded that the relevant object and pur pose with respect to this dispute is the
general object and purpose of the WTO Agreement and the GATT 1994 as a whole, which is to
provide security and predictability in the reci procal and mutually advantageous concessions
negotiated by parties for the reduction of tariffs and other barriers to trade. We concluded that the
ITA should not be considered a basis for determining the object and purpose of the WTO Agreement
and the GATT 1994.
7.684 The Panel does not consider that the object and purpose of the WTO Agreement and the
GATT 1994 provide significant guidance in the circumst ances of the interpretative exercise before us.
Nevertheless the Panel considers that the interp retation of the concession at issue discussed above is
consistent with the object and purpose of the WTO Agreements. More specifically, tariff item
number 8471 60 90 of the EC Schedule would cover all "input or output units" that are not "for use in
civil aircraft" (8471 60 10), "printers" (8471 60 40) or "keyboards" (8471 60 50).
(iv) Subsequent practice (Article 31(3)(b) of the Vienna Convention)
7.685 We recall from above 908, that the European Communities argued that the specific
classification practice of the United States and the practice of ITA participants between 1997 and
1999 provides other relevant means to interpret the FPDs narrative description.
909 In this latter
respect, the European Communities co mpares particular HS subheadings notified by ITA participants
in 1997, with updates to those HS subheadings notif ied by ITA participants in connection with the
FPDs narrative description in 1999.
7.686 The Panel determined that evidence submitted by the European Communities regarding HS
subheadings notified by ITA participants is not re levant in assessing "subsequent practice" within the
meaning of Article 31(3)(b) of the Vienna Convention. 910 We additionally concluded that evidence is
too limited to draw conclusions a bout the "consistency" of the United States classification practice
broadly.911
7.687 We, therefore, do not consider further the evidence presented by th e European Communities
regarding the existence of a consistent practice rega rding the potential range of different products that
may be classifiable under this HS subheading 8471 60 or under other headings discussed in this
dispute, such as HS subheading 8528.

906 United States' and Chinese Taipei's responses to Panel question No. 1; Chinese Taipei's second
written submission, para. 15.
907 European Communities' first written submission, paras. 170-172.
908 See paras 7.550, 7.553 and 7.555 above.
909 European Communities' first written submission, paras. 174-177.
910 See para. 7.563 above.
911 See para. 7.564 above.

(v) Other arguments
Arguments of the parties

7.688 Chinese Taipei argues that subheading 8528 51, as it appears in the HS2007, further supports
the conclusion that flat panel display devices of a kind used at least principally with an ADP machine
are to be classified under a heading that treats them as output units of an ADP machine. Under the
HS2007, Chinese Taipei argues that HS2007 Note 5 to Chapter 84 indicates that output units of an
ADP machine classifiable under HS 1996 subheading 8471 60 are now classifiable under subheading
8528 51 as monitors "[o]f a kind solely or principally used in an automatic data-processing system of
heading 8471". Chinese Taipei notes further under the HS2007, the requirement of "sole or principal"
use, that previously appeared in the text of HS1996 Note 5(B)(a) to Chapter 84 pertaining to heading
8471 is now included in the wording itself of HS2007 subheading 8528 51. In its view, this change
demonstrates that the notion of an "exclusive use" requirement for consideration as an output unit of
an automatic data-processing machine has been rejected.
912
7.689 The European Communities has argued that subsequent versions of the HS are not relevant
to the interpretation of the concessi ons at issue in this dispute which were made on the basis of the
HS1996.913
Consideration by the Panel
7.690 The Panel notes that Chinese Taipei has not specified that the Panel should consider the
relevance of the HS2007 as supplementary means of interpretation under Article 32 of the Vienna
Convention.
7.691 We have found, in interpreting the Eur opean Communities' commitment under tariff item
number 8471 60 90 in accordance with Article 31 of the Vienna Convention, that the concession
covers devices that form part of an "automatic data-processing machine" are "of a kind solely or
principally used by an automatic data-processing sy stem" and that perform at least one specified
function that involves accepting or delivering data in a form (codes or signals) that can be used by the
automatic data-processing machine or "automat ic data-processing machine system". More
specifically, tariff item number 8471 60 90 of the EC Sc hedule would cover all "input or output units"
that are not "for use in civil aircraft" (8471 60 10), "printers" (8471 60 40) or "keyboards"
(8471 60 50).
7.692 We recall that under Article 32 of the Vie nna Convention, recourse may be had to
"supplementary means of interpretation" in two di stinct circumstances, namely, either to confirm the
meaning of the treaty terms resulting from the applica tion of Article 31 or to determine such meaning,
but only if the Article 31 interpretation left the meaning ambiguous or obscure, or led to a result
manifestly absurd or unreasonable.
914 The Appellate Body in EC – Chicken Cuts has indicated that
documents published, events occurring, or practice followed subsequent to the conclusion of the treaty
may be relevant for considerati on under Article 32 of the Vienna Convention to the extent that the
instrument or document reflects the "common intentions of the parties' at the time of the conclusion"

912 Chinese Taipei's first written submission, paras. 343-346.
913 European Communities' first written submission, para. 407.
914 See para. 7.65.

of the treaty.
915 The Appellate Body emphasized however, that such an assessment must be
determined on a case-by-case basis.
7.693 Furthermore, as to what material can qualify as "supplementary means of interpretation", we
recall the Appellate Body's clarification in EC – Chicken Cuts that the reference made in Article 32 to
"preparatory work of the treaty" and "circumstanc es of its conclusion" is not exhaustive, indicating
that "an interpreter has a certain flexibility in co nsidering relevant supplementary means in a given
case so as to assist in ascertaining the common intentions of the parties."916
7.694 It follows therefore that the fact that the HS2007 is not preparatory work of the treaty or
circumstances of the conclusion of the treaty, does not per se disqualify it from being considered
supplementary means of interpretation under Article 32. Nor can the fact that the HS2007 occurred
subsequently to the conclusion of the treaty be per se a reason to disqualify it under Article 32, so
long as it serves to indicate what were the "common intentions of the parties" at the time of the
conclusion of the treaty, i.e. at the time they bound their Schedules.
 917
7.695 We note that the HS is constantly evolving and that, in fact, the HS2007 is the second update
to the HS since 1996.918 If the current version of the HS or its Chapter or Explanatory Notes contained
information that indicated the common intentions of the parties at the time of the conclusion of the
treaty it could serve as a supplementary means of interpretation.
7.696 We note that under HS2007, CN code 8471 60 90 that appears in the EC Schedule no longer
applies, and that the relevant subheading is no w 8528 51 under the HS2007. We observe that the
terms of HS2007 heading 8528 are as follows:
 Description
8528 Monitors and projectors, not incorp orating television reception apparatus;
reception apparatus for television, whethe r or not incorporating radio-broadcast
receivers or sound or video recording or reproducing apparatus.
 - Cathode-ray tube monitors:
8528 41 - - Of a kind solely or principally used in an automatic data -processing system of
heading 84.71
8528 49 - - Other
 - Other monitors:
8528 51 - - Of a kind solely or principally used in an automatic data -processing system of
heading 84.71
8528 59 - - Other
 - Projectors
8528 61 - - Of a kind solely or principally used in an automatic data -processing system of
heading 84.71
8528 69 - - Other

915 Appellate Body Report on EC – Chicken Cuts, para. 305.
916 Appellate Body Report on EC – Chicken Cuts, para. 283 and para. 305, fn. 574 (relying on the use
of the word "including" in the text of Article 32 as an indication of its non-exhaustive nature).
917 Appellate Body Report on EC – Chicken Cuts, para. 305 (footnote omitted).
918 We note that the HS Committee undertakes a period ic review of the HS, approximately every 4 to 6
years. Since the version of the HS that came into force on 1 January 1996 (the version under which the
concessions of this case were based on), new versions of the HS have come into force on 1 January 2002
(HS 2002) and 1 January 2007 (HS2007). It is envisaged that a fifth set of amendments will enter into force on
1 January 2012.

 Description
 - Reception apparatus for television, whether or not incorporating radio-
broadcast receivers or sound or video recording or reproducing apparatus:
8528 71 - - Not designed to incorporate a video display or screen
8528 72 - - Other, colour
8528 73 - - Other, black and white or other monochrome

7.697 In addition we observe that the HS2007 Notes 5(C) and (D) to Chapter 84 differ from those of
HS1996 as follows:
"(C) Subject to paragraphs (D) and (E) be low, a unit is to be regarded as being part
of an automatic data-processing system if it meets all of the following conditions:
(i) It is of a kind solely or principally used in an automatic data-processing system;
(ii) It is connectable to the central processing unit either directly or through one or
more other units; and
(iii) It is able to accept or deliver data in a form (codes or signals) which can be
used by the system".
(D) Heading 84.71 does not cover the following when presented separately, even if
they meet all of the conditions set forth in Note 5 (C) above :

(v) Monitors and projectors, not incorporating television reception apparatus."
919

919 We recall that HS1996 Note 5 to Chapter 84 provides as follows:

"5.(A) For the purposes of heading No. 84.71, the expression "automatic data-processing
machines" means :
(a) Digital machines, capable of (1) storing the processing program or programs and at
least the data immediately necessary for the execution of the program; (2) being freely
programmed in accordan ce with the requirements of the user; (3) performing arithmetical
computations specified by th e user; and, (4) executing, without human intervention, a
processing program which requires them to modify then-execution, by logical decision during
the processing run;
(b) Analogue machines capable of simulating mathematical models and comprising at
least: (1) analogue elements, control elements and programming elements;
(c) Hybrid machines consisting of either a digital machine with analogue elements or an
analogue machine with digital elements.
(B) Automatic data-processing machines may be in the form of systems consisting of a
variable number of separate units. Subject to paragraph (E) below, a unit is to be regarded as
being a part of a complete system if it meets all of the following conditions:
(a) It is of a kind solely or principally used in an automatic data-processing system;
(b) It is connectable to the central processing unit either directly or through one or more
other units; and
(c) It is able to accept or deliver data in a form (codes or signals) which can be used by
the system.
(C) Separately presented units of an automatic da ta-processing machine are to be classified in
heading No. 8471.

7.698 We note that the HS2007 was concluded near ly 10 years after the European Communities
bound its schedule containing the concession at issue and is actually the second change in the HS
since that time. The Panel believes that it would be difficult to sustain the view that any material so
remote in time from the conclusion of the treaty c ould serve as supplementary means of interpreting
the intent of the Members at the time they concl uded the treaty. However, we do not bar this as a
possibility. Indeed, it is possible that the HS2007 could serve as a means of supplementary
interpretation if it could be substantiated that it re flected the common intentions of the parties at the
time of the conclusion of the relevant treaty being examined. For example, if the Notes 5(C) and
5(D) to Chapter 84 of the HS2007 specifically stated that the products not to be classified in 8471 had
been classified therein in previous versions, then it might be possible to demonstrate the common
intentions of the Members. However, there is nothing to indicate as much. Therefore, we conclude
that this particular HS2007 subheading, explan atory note, and Chapter Note cannot serve as a
supplementary means of interpreting the concessions the European Communities made in its schedule
in 1997.
7.699 Therefore, we find that an analysis of s ubheading 8528 51 as it appears in the HS2007 does
not provide guidance in interpreting the scope of the concession in 8471 60, which was based on the
HS1996 nomenclature.
(vi) Overall conclusions on the ordinary meaning of the terms tariff item number 8471 60 90 in
the EC Schedule
7.700 In our analysis of the text of the tariff c oncession under tariff item number 8471 60 90 in its
context and in light of the treaty's object and purpose we considered the ordinary meaning of
subheading 8471 60 in the EC Schedule. This analysis led us to conclude that the meaning applies to
devices that form part of an "automatic data-pro cessing machine" are "of a kind solely or principally
used by an automatic data-processing system" and th at perform at least one specified function that
involves accepting or delivering data in a form (codes or signals) that can be used by the automatic
data-processing machine or "automatic data-processi ng machine system". More specifically, tariff
item number 8471 60 90 of the EC Schedule would cove r all "input or output units" that are not "for
use in civil aircraft" (8471 60 10), "printers" (8471 60 40) or "keyboards" (8471 60 50). We are also
of the view that not all devices capable of conn ecting to an ADP or ADP system by accepting or
delivering data from or to an ADP necessarily qualify as an input or output unit of heading 8471. We
did not find any relevant subsequent practice on th e matter. Furthermore, we do not consider an
assessment of the changes made under the HS2007 relevant to our interpretation.
(c) Do the flat panel displays at issue which are the subject of this dispute fall within the scope of
the narrative description in the Annex to the EC Schedule or HS 8471 60?
7.701 The Panel has established the scope of the conc ession, i.e., the type of products that are
covered by the European Communities' obligation under Article II of the GATT 1994 to provide duty-
free treatment to products under th e FPDs narrative description and within CN 8471 60 90 in its
Schedule. It will now turn to an analysis of whether the complainants have established that the
measures at issue are inconsistent with its obligations arising under the concessions at issue.

(D) Printers, keyboards, X-Y co-ordinate input devices and disk storage units which satisfy
the conditions of paragraphs (B) (b) and (B) (c) abov e, are in all cases to be classified as units
of heading No. 8471.
(E) Machines performing a specific function other than data-processing and incorporating or working
in conjunction with an automatic data-processing machine are to be classified in th e headings appropriate to
their respective functions or, failing that, in residual headings." (Exhibits US-84, JPN-23 and EC-15)

7.702 We recall that in paragraphs 7.309-7.320 above we determined the products at issue in this
dispute to be: (i) flat panel display devices capab le of connecting to an automatic data-processing
machine and that are also capable of reproducing video images from a source other than an automatic
data-processing machine, and (ii) flat panel displa y devices capable of connecting to an automatic
data-processing machine and that have a DVI or other type of connector, whether or not they are
capable of receiving signals from another source. We noted that the "flat panel display devices" at
issue are generally thin, and are not based on CRT technology. The complainants focused their
submissions to a great extent on displays with LCD technology, however, the technology used by a
flat panel display device is not dispositive to our definition. Indeed, certain measures at issue focus
on LCD technology, such as Commission Regulation Nos. 634/2005 and 2171/2005, while CNEN
2008/C 133/01 addresses a larger array of technologi es, including LCD, organic light emitting diode
(OLED) or plasma, among others.
7.703 The complainants assert that the flat panel display devi ces that are capable of connecting to
an automatic data-processing machine that have a DVI connector and/or are capable of receiving and
reproducing signals from sources other than automatic data-processing machines are flat panel display
devices "for" products within the ITA within the meaning of the FPDs narra tive description, or are
"output units" within the meaning of tariff item number 8471 60 90 in the EC Schedule.
920 T h e
complainants argue that a flat panel display devi ce which has the capability of receiving output from
an automatic data-processing machine by virtue of its DVI connector should not be excluded as being
"for" an automatic data-processing machine. 921 The complainants argue that these products are
additionally input or output units within the meaning of tariff item number 8471 60 90 in the EC
Schedule, because they provide the results of processi ng to the user by means of a visual display of
information received from the CPU.922
7.704 The European Communities asserts that it is not in dis pute that certain monitors are
"genuine ADP monitors" that fall within the dut y-free scope of the concession for tariff item number
8471 60 90 of its schedule.923 Pursuant to the ruling by the European Court of Justice in Kamino, the
European Communities acknowledges th at there is a difference between the relative weight given to
criteria in the CNEN to headings 8528 41 00 and 8528 51 00 and in Commission Regulation Nos.
634/2005 and 2171/2005 as compared with the relative weight given by the European Court of Justice
to these criteria.
924 However, it argues that not necessarily a ll products identified by the complainants
fall within the scope of either of the two concessions identified by the complainants. 925 The European
Communities argues that a new product, which it terms "multifunctional LCD monitors" emerged
following the conclusion of the ITA, that incorporated elements such as LCD technology and DVI
and merged products in a way that "cuts right in between the commitments taken and those explicitly
not taken pursuant to the ITA".
926 It argues these "new" products ar e not to be confused with those

920 Japan and Chinese Taipei observe that, while the concessions may overlap to a certain extent, if a
product is explicitly covered by one of the concessions, but it is unclear whether it is covered by the other, it is
still to be extended duty-free treatment (Japan's first wr itten submission, para. 263; Chinese Taipei's second
written submission, para. 147).
921 United States' first written submission, para. 129; Japan's first written submission, paras. 267-270;
Chinese Taipei's first written submission, paras. 185-186.
922 United States' first written submission, para. 136; Chinese Taipei's first written submission,
para. 186.
923 European Communities' first written submission, paras. 100-101.
924 European Communities' first written submission, paras. 167-169.
925 European Communities' first written submission, paras. 65-66.
926 European Communities' first written submission, para. 74. The European Communities claims that
LCD technology was not commercialized at the time of negotiations. It fu rther asserts that the DVI connector
did not exist at the time the concessions were negotiated, but only two to three years later (European

that were present in 1996, and that they are excluded from duty-free coverage.
927 At a minimum, to
the extent the products were considered to fall w ithin the scope of tariff item number 8471 60 90, the
European Communities contends that these products "may fulfil also" the ordinary meaning of "video
monitors" under subheadings 8528 21 and 8528 22 in its Schedule, or, in some cases, "reception
apparatus for television..." under subheadings 8528 12 and 8528 13.928
7.705 As a general proposition, the Panel is of the view that if the flat panel display devices at issue
are determined to be within the scope of th e concession based on the FPDs narrative description
concession, or within the scope of the concession in tariff item number 8471 60 90, then the European
Communities is obliged to provide them with duty-free treatment pursuant to Article II:1(a) and (b) of
the GATT 1994.
7.706 We will begin our analysis with the question of whether the flat panel display devices at issue
are covered either by the tariff concession based on the FPDs narrative description concession, and
then turn to the concession in tariff item number 8471 60 90.
(i) Arguments of the parties
7.707 The complainants submit that the flat panel display devices at issue use a DVI connector to
transmit the information from the computer to the display, thereby qualifying these products as both
flat panel display devices "for" computers or ot her ITA products, and "output units" within the
meaning of tariff item number 8471 60 90 in the EC Schedule.
929 The complainants argue that a DVI
is a standard computer connector that is displa y technology independent and was developed for the
computer industry to allow computers to transmit digital signals to a display device.930
7.708 The United States argues that approximately half of all LCD monitors have a DVI
connector.931 It claims that some devices with a DVI connector, such as the Apple Cinema Display,
discussed in the context of this dispute, must be connected to a computer in order to receive video
signals because such displays are configured to accept a single signal and a single bandwidth.932

Communities' first written submission, paras. 87-88). For these reasons, the European Communities concludes
that, a fortiori , multifunctional monitors could not have existed at the time of negotiations to be considered
within the concessions (European Communities' first written submission, para. 90).
927 European Communities' first written submission, paras. 71-76.
928 European Communities' first written submission, paras. 100-101.
929 United States' first written submission, paras. 129 and 136; Japan's first written submission,
para. 303.
930 United States' first written submission, para. 129. The United States refers to a Paper of Digital
Display Working Group, Digital Visual Interface (DVI) Revision 1.0p, p.5 (March 30, 1999) ("DDWG Paper")
(Exhibit US-35), which discusses the DVI specification as "provid[ing] a high-speed digital connection for
visual data types that is display technology independent" and "primarily focused at providing a connection
between a computer and its display device" and "meet[i ng] the needs of all segments of the PC industry
(workstation, desktop, laptop, etc)" and "enabl[ing] these different segments to unite around one monitor
interface standard". The United States additional refers to Carmack and Tyson, How Computer Monitors Work,
p. 5, indicating that "DVI keeps data in digital form from the computer to the monitor". Japan's first written
931 United States' first written submission, para. 129; United States' second written submission, para.
90; referring to Apple product manual (Exhibit US-78).
932 United States' first written submission, para. 130, referring to Apple Cinema Displays: Technology
Overview (May 2005) (referring to http://images.apple.com/pro/pdf/L309968A_Display_TO.pdf, p. 22 (listing a
PC, Power Mac, or Powerbook computer as requirements for operability) (Exhibit US-78); see also Exhibit US-

7.709 In particular, it submits that certain displays – the Apple Cinema Display – cannot operate
without a computer.
933
7.710 With the advent of LCD technology in computer displays, Japan argues that the DVI standard
was necessary to allow a digital-to-digital conn ection to support connectability with computers. 934
Japan argues that the DVI standard became the "d e facto standard" for an interface permitting the
display of digital information received from a co mputer, based on support by leading computer
companies.935 Japan argues it is not in dispute that LC D monitors with DVI can connect to the CPU
of an automatic data-processing machine.936
7.711 The complainants consider that merely because a DVI connector enables a flat panel display
device to reproduce and receive signals does not m ean the device is no longer "for" a computer.
Neither is a display with DVI no longer a "unit" of an automatic data-processing machine or system,
just because it transmits information displayed from sources other than an automatic data-processing
machine.937 In accordance with Notes 5(B) and (C) of HS1996 Chapter 84, the complainants argue
that the mere possibility that a monitor could be c onnected to something other than an automatic data-
processing machine is not sufficient to exclude it from heading 8471 because coverage under that
heading is extended to devices that are either sole ly or principally used in an automatic data-
processing system.938
7.712 The United States and Japan argue that reliance on a "sole or principal use" standard cannot
be reconciled with the notion that monitors "capable of connecting to a device other than a computer"
are not entitled to duty-free treatment. It consid ers this to be contradicted by the European
Communities own duty suspension, which states th at LCDs are "mainly used as output units of
automatic data-processing machines" but are treated as not "principally" used in an automatic data-
processing system". The United States argues that "mainly" and "principally" are synonyms.939
7.713 Japan argues that under Note 5(C) to Chapter 84, a flat panel display device that is a
separately presented unit must be "of" a computer, where the term "of" is interpreted broadly.
Otherwise, Japan argues that "principally" within No te 5(B) means "for the most part, in most cases"
which necessarily means that a unit may be used in connection with machines other than automatic
data-processing machines, and still qualify as "units". 940 On the contrary however, it argues that the
EC measures only allow minimally duty-free treatment for products that solely connect to a computer,

50, including GB5002860943 (UK, April 13, 2007), classifying a display with DVI in a dutiable tariff line,
while describing it as "solely for use with an automatic data-processing system".
933 United States' second written submission, para. 90; referring to Apple product manual (Exhibit
US-78).
934 Japan's first written submission, paras. 278-279. In contrast to computers, Japan argues that
virtually no DVD players can connect to an LCD monitor through a DVI (Japan's first written submission,
fn. 123).
935 Japan's first written submission, para. 275.
936 Japan's first written submission, para. 331.
937 United States' first written submission, para. 132; United States first written submission, para. 135.
938 United States' first written submission, para. 138.
939 United States' first written submission, para. 132 (referring to Commission Regulation No.
493/2005, p. 1).
940 Japan's first written submission, para. 334 (referring to the Shorter Oxford (1993), p.2356).

reading the word principally out of the concession.
941 Chinese Taipei submits that "principally"
means "in the chief case" or "for the most part, in most cases".942
7.714 The European Communities states that it understands the co mplainants' claim under tariff
item number 8471 60 90 to concern monitors that are "solely or principally" for use with an automatic
data-processing machine, whereas it understands th e complainant's claim pursuant to the FPDs
narrative description to cover devices that are "merely capable of operating with a computer". 943 It
considers that these two claims are different in scope. 944 Moreover, it contends that the complainants
have argued that televisions and video monitors fall within this concession, a proposition with which
it strongly disagrees.945
7.715 The European Communities argues that the co mplainants have not established that the
identified criteria are dispositive with rega rd to classification under a dutiable heading. 946 T h e
European Communities argues that th e decision on whether or not a given monitor is used solely or
principally in an automatic data-processing system to qualify for duty-free treatment requires a case-
by-case analysis based on objective technical charac teristics as laid down in HSEN1996 to heading
8471, with the exception of point 1 of Chapter I(D), th at the European Court of Justice determined to
be inapplicable in the European Court of Justice Kamino ruling.947 In determining the classification of
displays, the European Communities argues that it currently takes into consideration a number of
technical characteristics, including screen resolution, aspect ratio, bandwidth, size, and the presence of
a DVI connector. For instance, the European Co mmunities submits that it has classified the LCD
monitor in item 1 in Commission Regulation No. 2171/2005 in duty-free subheading heading 8471 60
based on its ability to reproduce video signals from a source other than an automatic data-processing
machine. Thus, it argues, it does not necessarily limit the scope of the concession to products that can
only be used with an automatic data-processing machine. 948 In addition, the European Communities
argues that the presence of a DVI connector is "not necessarily dispositive" as to whether a monitor is
not an output unit of a computer It refers to item 4 in Commission Regulation No. 634/2005 and

941 Japan's first written submission, para. 337.
942 Chinese Taipei's first written submission, para. 335 (defining "principally" as "1. in the chief case;
above all; pre-eminently. 3 For the most part; in most cases".
943 European Communities' first written submission, para. 97; European Communities' second written
submission, para. 33. The European Communities takes issue in particular with Japan's statement that its claim
related to the FPDs narrative description covers those products "for" automatic data-processing machines or
other ITA products ("i.e., only those capable of operating with a computer or other ITA product"), whereas it
considers its claim in connection with CN code 8471 60 90 covers products that have digital connectivity
(European Communities' second written submission, para. 205).
944 European Communities second written submission, paras. 33-36. In response to a question from the
Panel, the European Communities argues that the United St ates clarified that a television would not be covered
under subheading 8471 60 even it if could connect to a computer. However, the European Communities argues
that the United States has not clarified whether a television would be covered under the FPDs narrative
concession, and it argues that neither Chinese Taipei nor Japan clarified whether televisions were covered under
either of the concessions (European Communities' second written submission, para. 37).
945 European Communities' second written submission, para. 29. The European Communities argues
that the "monitors" concession in the Annex to its Schedule categorically excludes televisions, including high
definition televisions, as well as video monitors and high definition video monitors capable of receiving and
processing television signals other analogue or digitally processed audio or video signals without the assistance
of a central processing unit of a computer (European Communities' second written submission, para. 30).
946 European Communities' first written submission, paras. 69-70.
947 European Communities' first written submission, para. 166, citing European Court of Justice
(Kamino) (Exhibit TPKM-52).
948 European Communities' first written submission, para. 68.

items 3 and 4 in Commission Regulation No. 2171/2005, in which it argues that the presence of a DVI
connector is listed among other technical characteristics.
949
7.716 Moreover, the European Communities argues that, to the extent any displays were improperly
excluded from duty-free coverage as displays solely or principally for use with automatic data-
processing machines, the duty suspen sion in place has reduced the like lihood that duties have been
"unduly levied".950 Furthermore, the European Communiti es argues that, in cases where duties might
have been levied, many products are of the kind that would prima facie be classifiable as "video
monitors" under subheadings 8528 21 and 8528 22, or, in some cases, "reception apparatus for
television..." under heading 8528 12 and 8528 13. As explained above, the European Communities
argues that a new product, which it terms "mu ltifunctional LCD monitors" emerged following the
conclusion of the ITA, that incorporated elem ents such as LCD technology and DVI and merged
products in way that "cuts between the commitment s taken and those explicitly not taken pursuant to
the ITA".951 It thus disputes that either LCD or DVI we re contemplated as falling within the coverage
of ITA products, as LCD televisions and monitors di d not exists as a viable commercial reality and
DVI was not available at that time. It argues these "new" products are not to be confused with those
that were present in 1996, and are excluded from duty-free coverage. 952 In cases where products may
be classifiable in more than one heading, it cons iders that GIR 3(c) would apply and those display
monitors would be justifiably subject to duties as televisions or as video monitors.953
7.717 The European Communities argues that the fact th at the DVI originated on the computer side
of the industry proves nothing in light of the convergence of the IT and multimedia consumer
electronics industries. It considers that the very purpose of DVI is to display video signals as
evidenced by the fact that DVI is Video El ectronics Standards Association (VESA) certified.
954
Moreover, because many modern televisions have a DVI connector, the European Communities
argues that its mere existence in a monitor cannot establish that the display is an "ADP monitor". 955
In this sense, it argues that the presence of a DVI connector indicates the presence of certain
electronic components inside the monitor that al lows the LCD monitor to function with many
different devices that are not covered by the ITA. 956 Even if the DVI standard was developed first by
the computer industry for computer purposes, because of its ability to be used with both analogue and

949 European Communities' response to Panel question 23.
950 European Communities' first written submission, paras. 167-169. The European Communities
acknowledges that it has previously "p aid specific attention to whether or not a monitor is 'capable of accepting
a signal only from the central processi ng unit of an automatic data-proce ssing machine" in accordance with its
interpretation of the HSEN1996 to heading 8471.
951 European Communities' first written submission, para. 74. The European Communities claims that
LCD technology was not commercialized at the time of negotiations. It fu rther asserts that the DVI connector
did not exist at the time the concessions were negotiated, but only two to three years later (European
Communities' first written submission, paras. 87-88). For these reasons, the European Communities concludes
that, a fortiori , multifunctional monitors could not have existed at the time of negotiations to be considered
within the concessions (European Communities' first written submission, para. 90).
952 European Communities' first written submission, paras. 71-76, 87, 90.
953 European Communities' first written submission, para. 169. The European Communities refers in
particular to the "Apple Cinema" monitors in arguing that the application of GIR 3(c) is justified.
954 European Communities' first written submission, para. 65.
955 European Communities' first written submission, para. 65.
956 European Communities' response to Panel question No. 50.

digital signals, the European Communities explains that it was adopted by the consumer electronics
sector for products such as set-top boxes, DVD players and game consoles.
 957
7.718 The European Communities also challenges the argument by the United States that certain
display products with DVI connectors – the Apple Ci nema Display – are solely capable of connecting
with a computer, and that European Communities w ould thus classify products solely used with
computers in a dutiable heading. 958 The European Communities claims that this particular product
can operate without the assistance of a computer.959
7.719 Finally, the European Communities argues that because DVI is "display technology
independent" means that it was foreseen to functi on with displays using CRT or LCD or other
technologies", and thus is not considered as a standard computer connector.960
7.720 The complainants respond that the Europ ean Communities' reliance on the HSEN is
misplaced, as the HSEN are not relevant to extent they contradict the meaning of the HS itself,
including its Chapter Notes.961 In addition, the complainants argue that GIR 3(c) is inapplicable.962
7.721 The United States additionally rejects that the presence of a DVI connector or the ability to
connect to sources other than automatic data-p rocessing machines has not been dispositive. The
United States submits that the statement by th e European Communities th at the presence of a DVI
connector has not been "necessarily dispositive" fails to clarify whether the presence of DVI was in
fact dispositive. Contrary to the European Communities' reference to items in Commission Regulation
Nos. 634/2005 and 2171/2005, the United States notes th at all the items were classified in a dutiable
heading.963 It argues that the mere fact that devices ar e described as having characteristics in addition

957 European Communities' second oral statement, para. 22 (referring to Exhibit EC-110). The EC
argues that many consumer products, notably DVD players include DVI.
958 According to the European Communities, the Apple Cinema Display can also connect to an ADP
machine (see European Communities' comments to the United States' response to Panel question No. 143). In
this respect, the European Communities argues that "page 22 of Exhibit US-78 addresses the question what kind
of a computer is required if the monitor is to be used as a unit of an ADP system. Of course, in such a situation
an ADP machine will be necessary"); See also: European Communities' first written submission, para. 169, fn.
90; European Communities' second oral statement, para. 23. In addition to asserting that the product manual for
this device makes clear that it can connect to sources other than computers (see Exhibit US-78, citing p. 6,
second paragraph, last sentence or p. 7, fourth paragraph, last sentence, p. 23), the European Communities
argues that the device can at a minimum be connected to other sources with the use of as SDI-DVI converters
specifically designed to drive Apple Cinema Displays or similar monitors without the assistance of an ADP
machine (Exhibit EC-116).
959 European Communities' response to Panel question No. 143 (stating, with reference to the manual in
Exhibit US-78, that the Apple Cinema Display can inde ed operate without the assi stance of a computer/ADP
machine).
960 European Communities' response to Panel question No.50, para. 164.
961 United States' comment on the European Communities' response to Panel questions Nos. 138 and
139; Chinese Taipei's second oral statement, para. 18.
962 United States' and Japan's response to Panel qu estion No. 20, para. 52; Japan's second written
submission, para. 194; Chinese Taipei's first written su bmission, para. 340; Chinese Taipei's second written
submission, paras. 182 and 186.
963 United States' second written submission, para. 70. The United States argues in addition that item 2
in Commission Regulation No. 2171/2005 was classified strictly on the basis of the presence of DVI, and item 1
in Commission Regulation No. 2171/2005 is not relevant because the device is indicated as not having a DVI
connector (but instead a "mini D- sub 15 pin interface only") The United States argues that item 1 of
Commission Regulation No. 634/2005 only has a VGA connector, and not a DVI connector, which does not
demonstrate how a device capable of connecting to sources other than a computer might be entered duty-free

to DVI in certain items of the Regulations does not support the conclusion that DVI was merely a
"strong indicator" that the product was dutiable.
7.722 Japan also considers that th e mere presence of a DVI connector is dispositive for tariff
treatment. It understands, however, that the mere pr esence of a DVI connector in a flat panel display
monitor does not by itself necessarily mean the flat panel display device will be capable of operating
with a computer. Whether an flat panel display de vice can be used with an automatic data-processing
machine, depends on all relevant technological sp ecifications, including interfaces on the flat panel
display device, to determine whether the flat panel display device is in fact capable of operating with
a computer and/or some other ITA products.
964
7.723 In addition, the United States and Chinese Taip ei argue that the European Communities has
not provided evidence to demonstrate that a device with DVI connector or capable of receiving and
reproducing signals from a source other than a computer could be classified in a duty-free subheading.
On the contrary, the United States submits that the evidence shows that custom s officials in certain
cases have not referred to any characteristic excep t the presence of DVI connector as the basis for
classification in a dutiable subheading. 965 Moreover, it argues that CNEN 2008/C 133/01
demonstrates clearly that the presence of DVI is not merely a strong indicator but is in fact decisive of
classification in a dutiable heading.966
7.724 The complainants submit that, in determining whether devices equipped with DVI technology
are covered, it is not relevant whether the DVI connector was developed after the ITA concluded. 967
In addition, the United States argues that it is fact ually not relevant whether different DVI standards
exist, including DVI-I and DVI-D, or whether DVI was adopted and used in the consumer media
industry. It notes that DVI-I and DVI-D differ onl y in that the former accepts both digital and
analogue signals while the later accepts only digital signals. 968 In addition, it argues that an adoption
by consumer media industry does not support the use of a per se exclusion of products with DVI.
Moreover, the United States claims that virtually no consumer electronics devices are today equipped
with DVI while computers are.969
7.725 The United States argues that the fact that the DVI was not designed for a particular display
technology supports the view that this connector w as in fact designed for co mputers, in particular
considering that the ITA expressly refers to a number of technologies used with flat panel displays,
including LCD.970

simply does not demonstrate how devices capable of connecting to sources other than an automatic data-
processing machine are sometimes granted duty-free treatment (United States' second written submission, paras.
70-71).
964 Japan's response to Panel question No. 48.
965 United States' second written submission, para. 71 (referring to Exhibit US-50).
966 United States' second written submission, para. 72; Chinese Taipei's second oral statement, para. 40.
967 United States' second written submission, para. 87; Japan's second written submission, para. 155;
Chinese Taipei's second written submissi on, para. 125. Japan submits eviden ce in addition that the flat panel
displays were used as display computer terminals at th e time of ITA negotiations (Japan's first oral statement,
968 United States' second written submission, para. 92 (referring to "How Computer Monitors Work",
pp. 8-10 (Exhibit US-34)).
969 United States' second written submi ssion, para. 92. The United States argues that only 11 of 1500
DVD players it assessed have DVI, while no camcorders incorporate this standard (Exhibit US-129).
970 United States' first written submission, para. 53.

7.726 Finally, the United States disputes the Europ ean Communities' view that the Apple Cinema
Display, as it is imported without the use of external converters, is capable of operating with devices
other than computers, such that it would justify subjecting the device to duties.
971
(ii) Consideration by the Panel
7.727 The Panel will consider below whether the products identified by the complainants fall within
the scope of the FPDs narrative description, or are "input or output units; - other" within the meaning
of tariff item number 8471 60 90 in the EC Schedule.
The concession pursuant to the FPDs narrative description in the Annex to the EC Schedule
7.728 We recall our conclusion above that the concession refers to certain apparatus or devices that
have a flat display and are generally thinner than conventional CRT displays or monitors, and are
designed for visual presentation of data or signals from products falling with in the ITA, including
notably, automatic data-processing machines. We de termined that there is no express limitation on
technical characteristics, such as screen size, dimension, refresh rate, dot-pixel ratio, or other technical
characteristics, including no express limitation on the type of connection or sockets it may possess,
such as DVI. We further concluded there that ther e is no requirement for exclusivity, such that the
FPDs concession would be limited to apparatus th at may only display or reproduce signals from
products falling within the ITA, including automati c data-processing machines. We also concluded
that the concession applies to products that fall within its scope, wherever those products are
classified.
7.729 We also recall that the products at issue in this dispute are: (i) flat panel display devices that
are capable of connecting to an automatic data-processing machine and are also capable of
reproducing video images from a source other than an automatic data-processing machine, and (ii) flat
panel display devices that are capable of conn ecting to an automatic data-processing machine and
have a DVI connector, whether or not they are capable of receiving signals from another source.
7.730 Based on our conclusions on the scope of the FPD s narrative description above, we conclude
that the products at issue, including flat panel display devices with DVI, and flat panel display devices
able to accept and receive signals from automatic data-processing machines and sources other than
automatic data-processing machines, may fall within the scope of the concession, provided that they
are designed for use with an automatic data-processing machine. We determined that an array of non-
CRT technologies, including LCD, fall within th e concession. In addition, the FPDs narrative
description does not establish particular limitations on the type of connector or socket that a display
might incorporate, nor does the concession establish any exclusivity requirement such that a product
may only connect with a computer in order to be eligible for duty-free treatment. The fact that a
device may be able to receive and display signals from other sources would not therefore exclude it
from coverage under the concession. In addition, the Panel can see no reason why a product that
otherwise falls within the scope of the concession, would be excluded simply because it is fitted with
certain connectors, such as DVI or HDMI.
7.731 Having said this, we reiterate, it is conceivabl e that certain products that have a DVI or
similar connector or that are able to displa y and receive signals from ADP and non-ADP sources
would not qualify under the concession to the extent they did not provide an acceptable level of

971 United States' comment on European Communities' response to Panel question No. 143; para 61
(referring to Exhibit EC-116). See also Japan's and Ch inese Taipei's responses to the European Communities'
second question after the second Panel meeting.

functionality or opera bility, or otherwise not meet the requirements set out in the concession. The
mere capability to receive signals from computers is not enough to qualify under the concession.
972
For example, the resolution of certain products ma y not be high enough to properly display signals
from a computer.
7.732 Thus, we conclude that at least some flat pane l display devices at issue in this dispute could
fall within the scope of the concession for "flat panel display devices (including LCD, Electro
Luminescence, Plasma, Vacuum-Fluorescence and other technologies) for products falling within this
agreement" that appears in the Annex to the EC Schedule.
The concession pursuant to tariff item number 8471 60 90 in the EC Schedule
7.733 We next consider whether the products at i ssue in this dispute fall within the separate
concession pursuant to tariff item number 8471 60 90 in the EC Schedule. We recall our conclusion
that an "input or output unit" within the meani ng of tariff item number 8471 60 90 is a device that
forms part of an "automatic data-processing machine" , is "of a kind solely or principally used by an
automatic data-processing system", and that perform s at least one specified function that involves
accepting or delivering data in a form (codes or sign als) that can be used by the automatic data-
processing machine or "automatic data-processing m achine system". More specifically, tariff item
number 8471 60 90 of the EC Schedule covers all "input or output units" of an automatic data-
processing machine that are not "for use in civil aircraft" (8471 60 10), "printers" (8471 60 40) or
"keyboards" (8471 60 50). We also explained that not all devices capable of connecting to an ADP
machine or ADP system by accepting or delivering data from or to an ADP necessarily qualify as an
input or output unit of heading 8471.
7.734 We are not persuaded that flat panel displays which incorporate a DVI or similar connector,
or which can receive and display signals from au tomatic data processing machines and other sources,
necessarily fall outside the scope of 8471 60 90 as defi ned above. There is no reason to automatically
preclude the flat panel display devices at issue from be ing "input or output units". In particular, it is
clear that the scope of 8471 60 and 8471 60 90, is not limited to those output units that are used
exclusively with an ADP. We are, however, not sayi ng that all of the flat panel display devices at
issue will necessarily fall within the scope of this concession. That would have to be determined on a
case-by-case basis, taking into account all the objective characteristics of a particular product.
7.735 We note that the European Communities has argue d that the products at issue are prima facie
classifiable under other, dutiable, headings and th at by virtue of the application of the HS
interpretative rules, and GIR3(c) in particular, th e products at issue could fall within these dutiable
headings. As we have noted,
973 in the circumstances of this case we are only required to determine
whether some of the products at issue fall within the scope of the duty free heading 8471 60. We do
not preclude the possibility that some of the products at issue, depending on their particular objective
characteristics, may fall within the scope of other head ings or subheadings, by virtue of the effect of
the HS interpretative rules consider ed as context. The key finding, in terms of the effect of the
measures at issue in this case, is th at it is not possible to assume that all such products would fall
within the scope of these dutiable headings.974

972 Japan's second oral statement, para. 70.
973 See para. 7.668 above.
974 The Panel notes that the European Communities has relied on the judgment of the European Court
of Justice in Kamino to support its contention that its measures ar e WTO consistent. We recall that the facts of
the case in Kamino are not the same as those before us and that while the case dealt with the same relevant HS

(d) Do the measures at issue provide for duties on products identified by the complainants which
are in excess of those set forth in the EC Schedule?
7.736 We recall our reasoning in para graphs 7.97-7.102 above that Article II:1(b) requires that
Members not apply ordinary customs duties in excess of those provided for in the Schedule.
Therefore, in this section we will compare the tari ff treatment provided to the products identified by
the complainants under the challenged measures with that provided for in either the FPDs narrative
description or tariff item number 8471 60 90 in the EC Schedule. Having done this, we can determine
whether the challenged measures impose duties in excess of those set forth in the EC Schedule, such
that the European Communities is in breach of its obligations under Article II:1(b) of the
GATT 1994.
975
7.737 The complainants argue that, through the measu res at issue, including Council Regulation
No. 2658/87, as amended, CNEN 2008/C 133/01 and Commission Regulation Nos. 634/2005 and
2171/2005, the European Communities does not provide duty-free treatment to flat panel displays that
are entitled to such treatment. They additionally identi fied the application of a suspension of duties on
products that are classified under CN codes 8528 59 10 and 8528 59 90 covering certain black and
white or other monochrome monitors, and certain co lour monitors, respectively, each subject to a
14 per cent duty rate.
7.738 We recall from paragraph 7.232 above that th e current CN extends duty-free treatment under
CN code 8528 51 00 to certain "monitors...of a kind sole ly or principally used in an automatic data-
processing system of heading 8471" and for dutia ble CN codes 8528 59 10 and 8528 59 90 covering
certain black and white or other monochrome monito rs, and certain colour monitors, respectively,
each subject to a 14 per cent duty rate. In para graph 7.258 above, we conc luded that CNEN 2008/C
133/01 requires that LCD and other flat panel displa y devices that are fitted with a DVI connector, or
that are capable of receiving and reproducing vi deo images both from an automatic data-processing
machine and from a source other than an automati c data-processing machine, are required to be
classified under dutiable CN codes 8528 59 10 or 8528 59 90, each of which sets a duty rate of 14 per
cent. Thus, CNEN 2008/C 133/01 requires that flat panel display devices that are capable of
connecting with sources other than automatic data-p rocessing machine, or those that are fitted with
connectors such as DVI-I, DVI-D or HDMI, be ex cluded from classification under duty-free CN code
8528 51 00.
7.739 In addition, in paragraph 7.284 above, we concluded that Commission Regulation
No. 634/2005 requires that LCD monitors as described in item 4 of its Annex be classified under CN

Chapter Note it did not deal with the same HS subheading, the same measures, or the same products. We also
note that the European Court of Justice is the domestic court of 27 out of 153 Members of the WTO and that in
the Kamino decision the European Court of Justice was applying the rules of European Community law to gauge
the consistency of the EC regulation at issue in that case with that legal regime rather than applying the general
rules of interpretation of public international law to determine the consistency of a measure with WTO
obligations. Moreover, the Panel notes that our findings here are similar to the vi ew taken by the European
Court of Justice in Kamino. See European Court of Justice (Kamino), para. 71.
975 As noted in paragraph 7.102, prior panels have reasoned that a measure which is inconsistent with
the obligation in Article II:1(b) to provide duty treatment not in excess of that set forth in a Member's schedule
necessarily implies an inconsistency with the obligati on in Article II:1(a) not to provide less favourable
treatment to imported products than that set forth in a Member's schedule. Therefore, we will begin our analysis
of whether the tariff treatment provided for in the European Communities' measures is consistent with Article II
of the GATT 1994 with an analysis of the obligation in Article II:1(b). Subsequently, we will move on to
address the complainants' claim that the European Communities is also acting inconsistently with the obligation
in Article II:1(a).

code 8528 21 90. Similarly, Commission Regula tion No. 2171/2005 requires that LCD monitors as
described in items 2, 3 and 4 of its Annex be cl assified under CN code 85 28 21 90, which sets a duty
rate of 14 per cent. CN code 8528 21 90 has been replaced by CN code 8528 59 90 under the current
CN.
7.740 Finally, we concluded in paragraph 7.294 above that Council Regulation No. 179/2009
suspends the application of duties on the following displays that would otherwise be classifiable under
dutiable headings 8528 59 10 and 8528 59 90, respectiv ely, each of which sets a duty rate of 14 per
cent:
 "black and white or other monochrome monitors, using liquid crystal display
technology, equipped with either digital vi sual interface (DVI) or a video graphics
array (VGA) connector or both with a diagonal measurement of the screen not
exceeding 77,50 cm (i.e. 30,5 inches), with an aspect ratio of 1:1, 4:3, 5:4 or 16:10,
with a pixel resolution exceeding 1,92 me ga pixels, and with a dot pitch not
exceeding 0,3 mm".
"colour monitors, using liquid crystal display technology, with a diagonal
measurement of the screen not exceeding 55,9 cm (i.e. 22 inches), with an aspect
ratio of 1:1, 4:3, 5:4 or 16:10".
7.741 In the Annex to its Schedule, the European Co mmunities agreed to bind and eliminate duties
on flat panel display devices that fall within the sco pe of the FPDs narrative description. In addition,
we also recall our conclusion that at least some of the flat panel display devices at issue fall within the
scope of tariff item number 8471 60 of the EC schedul e (under 8471 60 90, in particular), which is a
duty-free concession.
7.742 Therefore, CNEN 2008/C 133/01, by directing na tional customs authorities to classify those
flat panel display devices in CN codes 8528 59 10 or 8528 59 90, under which the CN imposes duties
of 14 per cent, requires the imposition of duties on at least some products which fall within the scope
of the FPDs narrative description and/or within the scope of the CN code 8471 60 90 in the EC
Schedule. The CNEN and CN operating together ther efore result in the levying of duties in excess of
those provided for in the European Communities' Schedule, and are therefore inconsistent with Article
II:1(b) of the GATT 1994.
7.743 Similarly, Commission Regulation Nos. 634/200 5 and 2171/2005 direct national customs
authorities to classify all products matching the te rms of the description in their annexes under a CN
code which imposes a 14 per cent duty, because those products are capable of receiving and
reproducing video signals from sources other than an automatic data-process ing machine. They
therefore result in the imposition of duties on at least some products which fall within the scope of the
FPDs narrative description and/or within the scope of the tariff item number 8471 60 90 in the EC
Schedule. Commission Regulation Nos. 634/2005 a nd 2171/2005 therefore result in the levying of
duties in excess of those provided for in the Eu ropean Communities' Schedule, and are therefore
inconsistent with Article II:1(b) of the GATT 1994.
7.744 It must be borne in mind that Council Regulati on No. 179/2009 that is currently in effect,
suspends the application of duties on certain disp lays as described in paragraph 7.740 above, that
would otherwise be classifiable under dutiable headi ngs 8528 59 10 and 8528 59 90, and subject to a
14 per cent duty. To the extent that Council Re gulation No. 179/2009 suspends duties levied on
products that the European Communities is obliged to provide duty-free treatment for under either of
the concessions, (including LCD monitors with a DVI, or those that are capable of receiving and

reproducing video signals from sources other than an automatic data-process ing machine), neither
CNEN 2008/C 133/01 working in conjunction with the CN, nor Commission Regulation Nos.
634/2005 and 2171/2005 act ually imposes duties in excess of those set forth in the EC Schedule.
Accordingly, the duty suspension eliminates the inconsistency with the European Communities'
obligations under Article II:1(b). In other words, but for the duty suspension, the measures at issue
are inconsistent with Article II:1(b) of the GATT 1994.
7.745 However, to the extent the duty suspension were not applicable to a particular product that
fell within the scope of either concession, i.e., a product covered by either concession fell outside the
scope of the express terms of the duty suspension, or if the suspension measure were to be repealed or
annulled, then, as discussed above, CNEN 2008/C 133/0 1 working in conjunction with the CN, or
Commission Regulation Nos. 634/2005 and 2171/2005, would result in the levying of duties in excess
of those provided for in the European Commun ities' Schedule in a manner inconsistent with
Article II:1(b) of the GATT 1994.
7.746 Notwithstanding, our conclusions in this section, we next consider whether the measures at
issue otherwise lead the European Communities, by directing national customs authorities, to accord
to the commerce of the other contracting parties treatm ent less favourable than that provided for in its
Schedule.
(e) Do the measures at issue provide less favourable treatment than that set forth in the EC
Schedule?
7.747 With respect to whether the European Comm unities' measures provide for less favourable
treatment than that set forth in the EC Schedule, we recall the explanation of the Appellate Body in
Argentina – Textiles and Apparel , that Article II:1(b) prohibits a specific kind of practice that will
always be inconsistent with Article II:1(a). In particular, the Appellate Body found that "the
application of customs duties in excess of those pr ovided for in a Member's Schedule inconsistent
with the first sentence of Article II:1(b), constitut es 'less favourable' treatment under the provisions of
Article II:1(a)."
976 Therefore, as prior panels have before us , we find that a violation of Article II:1(b)
necessarily results in less favourable treatment which is inconsistent with the obligations in Article
II:1(a).977
7.748 In addition, we indicated above that Council Regulation No. 179/2009 currently suspends the
application of duties on products that fall within its scope, in particular those described in
paragraph 7.740.
7.749 In light of our analysis of the scope of concessions arising under the FPDs narrative
description, we concluded that the products at is sue could fall within the scope of that duty-free
concession. In addition, we indicated that certain of the flat panel display devices at issue qualify for
duty-free treatment under CN 8471 60 90 in the EC Schedule.978

976 Appellate Body Report on Argentina – Textiles and Apparel, paras. 45-47.
977 Panel Report on EC – Chicken Cuts, para. 7.65.
978 In particular, we recall, the concession under the FPDs narrative description refers to certain
apparatus that have a flat display and generally thinner than conventional CRT displays or monitors, and is
designed for visual presentation of data or signals from products that fall within the ITA, including automatic
data-processing machines. We determined that there is no limitation on technical characteristics, such screen
assize, dimension, refresh rate, dot-pixel ratio, or other technical characteristics, including no express limitation
on the type of connection or sockets it may possess, such as DVI. We further concluded there is no requirement
for exclusivity, such that the FPDs concession would be limited to apparatus that may only display or reproduce

7.750 We also found that Council Regulation No. 2658/87, as amended, operating in conjunction
with CNEN 2008/C 133/01; and Commission Regulation Nos. 634/2005 and 2171/2005 are
inconsistent with Article II:1(b) of the GATT 1994, to the extent they levy duties in excess of those
set forth in the EC Schedule. However, Counc il Regulation No. 179/2009 suspends those duties for
some products, and hence there is no inconsistency with Article II:1(b) to the extent the duty
suspension is applied to a product covered by either concession. It follows, therefore, that there is no
inconsistency with Article II:1(a) by virtue of an inconsistency with Article II:1(b).
7.751 In cases where the suspension of duties were not applied, then, in accordance with the
approach of the Appellate Body in Argentina – Textiles and Apparel , the levying of duties would be
inconsistent with Article II:1(a) of the GATT 1994.
7.752 However, we now consider whether the measu res at issue would also provide for less
favourable treatment in a manner inconsistent with Article II:1(a) of the GATT 1994, even in cases
where the duty suspension under Council Regulation No. 179/2009 is applied.
(i) Arguments of the parties
7.753 The complainants argue that the application of the suspension results in less favourable
treatment because it is both temporary, applying for defined and limited time periods, and conditional,
because it may be terminated unilaterally if condi tions for its continuation are no longer fulfilled.
979
In particular, the United States argues that the failure to prov ide permanent duty-free treatment
adversely affects imports because importers do not have certainty regarding duty treatment. 980 The
United States notes that the panel in EC – Selected Customs Matters stated that "the fact that traders
may be subject to the same duty (or, for that ma tter, no duty) whether the LCD monitors they are
importing in the European Communities are classi fied under heading 8471 or 8528 does not detract
from our conclusion that the trading environment has b een affected as a result of the divergent tariff
classification".981 Further, according to the United States, "lasting" duty-free treatment can only be
provided through amendments to the autonomous duty rate in the CCT. 982 In this respect, the United
States refers to the words of the Commission, that duty suspensions "constitu te an exception to the
normal state of affairs" and are "reviewed regularly with the possibility of deletion on request of a
party concerned".983 In addition, Chinese Taipei argues that various types of flat panel displays fall
outside the scope of the duty suspension and are therefore subject to duties inappropriately.984

signals from products falling within the ITA, including automatic data-processing machines. The concession
under CN code 8471 60 90 in the EC Schedule refers to a device that forms part of an "automatic data-
processing machine" or are "of a kind solely or principally used by an automatic data-processing system", and
that perform at least one specified function that involves accepting or de livering data in a form (codes or
signals) that can be used by the automatic data-processing machine or "automatic data-processing machine
system".
979 United States' first written submission, para. 142 ; Japan's second written submission, para. 141;
Chinese Taipei's first written submission, para. 124; Chinese Taipei's first written submission, para. 354-355.
980 United States' first written submission, para. 143.
981 United States' first written submission, para. 143, referring to Panel Report on
EC - Selected Customs Matters, para. 7.304, fn. 579.
982 United States' second written submission, para. 77, citing Exhibit US-85.
983 United States' first written submission, pa ra. 142, referring to Commission communication
concerning autonomous tariff suspensions and quotas, OJ C 128 (April 25, 1998), p. 2 (Exhibit US-85).
984 Chinese Taipei's first written submission, para . 184; Chinese Taipei's first written submission,
para. 354-355.

7.754 The European Communities argues that the duty suspensi on, which has recently been
prolonged and extended to cover additional monitors, results in monitors receiving duty-free
treatment, for those that might have been erroneously classified in a dutiable heading. The European
Communities claims therefore that no breach of Article II would occur.
985
(ii) Consideration by the Panel
7.755 The notion of less favourable tr eatment has been exam ined in the context of other provisions
of the GATT, notably in Article III:4 of the GATT 1994.
7.756 The Appellate Body in Korea – Various Measures on Beef stated that whether or not imported
products are treated "less favourably" should be asse ssed by examining whether a measure modifies
the conditions of competition in the relevant market to the detriment of imported products.986
7.757 While Article III:4 focuses on less favourable treatment between domestic and imported like
products and Article II focuses on less favourable treatment, vis-à-vis what is in a Schedule, we find
the emphasis on competitive opportunities relevant fo r our analysis, particularly as negotiated tariff
concessions and the certainty thereof are important market access guarantees. Therefore, if a measure
adversely affects the conditions of competition fo r a product from that which it is entitled to enjoy
under a Schedule, this would be less favourable treatment under Article II:1(a).
7.758 We have found in paragraph 7.744 that, but for the duty suspension, the European
Communities' measures are inconsistent with its oblig ations under Article II:1(b). It follows, in light
of the Appellate Body decision in Argentina – Textiles and Apparel referred to in paragraph 7.99
above, that the European Commun ities' measures are also inconsis tent with Article II:1(a). The
question arises whether the duty suspension eliminates the inconsistency with respect to Article II:1(a)
in the same way as it did with re spect to Article II:1(b). The curre nt suspension regime of Council
Regulation No. 179/2009 has been in place since 1 Janua ry 2009, but was applicable retroactively for
the period January-March 2009. It will automa tically expire on 31 December 2010. The duty
suspension is limited to the particular products specified therein.
987 Council Regulation No. 179/2009
is the third in a succession of measures that ha ve applied a suspension of duties on imports of
particular LCD displays. The first of these measures, Council Regulation No. 493/2005, was
published 31 March 2005 with effect from 1 Ja nuary 2005 through 31 December 2006. Second,
Council Regulation No. 301/2007 was published in 19 March 2007 with effect from the 1 January of
that year. This latter regulation extended the id entical terms of the prior suspension under Council
Regulation No. 493/2005 to 31 December 2008. Mo st recently, Council Regulation No. 179/2009
was published in March 2009 with retroactive effect to 1 January of 2009. This measure is currently
in force and forms part of the Panel's terms of reference. 988 This measure enlarged the scope of
application of the duty suspensions that were previously applied to certain LCD imports.
7.759 These earlier applications of the duty suspen sion reveal that the duty suspension regime
currently in place has been renewed biannually, is set to expire automatically and is not extended
automatically. The duty suspension has only been ex tended or amended, subject to formal actions
taken by the EC Council, i.e., following the passage of a new Council Regulation. It appears that these
measures do not take effect prior to their publication in the EU Official Journal. The suspension under

985 European Communities' first written submission, paras. 62-63.
986 Appellate Body Report on Korea –Various Measures on Beef, para. 137.
987 See para. 7.740 above.
988 See paras. 7.170-7.190 above.

all three measures was applied retroactively for periods between January and March in 2005, 2007
and 2009, respectively.
7.760 Thus, while a suspension on imports of certain LC D displays has formally been in effect for
five years or more, the suspension is not permanent in nature, and is subject to a formal extension or
amendment. In addition, we note that the measure at issue (as well as prior measures) implementing
the autonomous duty suspension does not set out specific conditions for its withdrawal or non-
renewal. Thus the duty suspension in force at a particular time may expire, be repealed, or be
amended to increase or decrease coverage.
7.761 We recognize that no amount of autonomous duty-free coverage can be assured in an absolute
sense. The European Communities, for instance, sets forth its tariff bindings in the EC Schedule
pursuant to annual amendments to the autonomous duty rate in the CCT, published in October of each
year prior to its entry into force the following January. Notwithstanding this fact, tariff bindings set
forth in the CCT autonomous duty regime remain in place until formal repeal by the Commission.
Thus, tariff treatment under the CCT is not contin gent on renewal or extension, unlike under the
current duty suspension regime. In our view, this dis tinction is significant, in particular, in the sense
that continuous tariff treatment provides forseeab ility for traders operating in the marketplace.
Moreover, the tariff treatment established under the CCT is prospective, unlike under the duty
suspension regime, where the application of the suspension has been applied retroactively on a
number of occasions.
989 For the foregoing reasons, we are of the view that the duty suspension
measure does not eliminate the inconsistency with Article II:1(a) because there remains the potential
of deleterious effects on competition.
7.762 We note finally that the Appellate Body has explained that the examination of whether a
measure involves "less favourable treatment" within the meaning of Article III:4 of the GATT 1994
does not require an examination of the actual effect s of the contested measure in the marketplace, in
order to demonstrate inconsistency.990 In our view, the same holds true for purposes of our analysis in
this case with respect to Article II:1(a).
7.763 Accordingly, the measures at issue, including Council Regulation No. 179/2009 operating in
conjunction with the CN and CNEN 2008/C 133/01, and with Commission Regulation Nos. 634/2005
and 2171/2005, are inconsistent with the European Communities' obligations u nder Article II:1(a) of
the GATT 1994. This is true even in cases wher e Council Regulation No. 179/2009 suspends duties
on products that the European Communities is obligat ed to provide duty-free treatment for, including
LCD monitors with a DVI interface, or that are capable of receiving and reproducing video signals
from sources other than an automatic data-processing machine.
F. SET-TOP BOXES WHICH HAVE A COMMUNICATION FUNCTION (STBCS)
7.764 In this section of the Reports, the Panel will consider the complainants' claims that certain
EC measures are inconsistent with Articles II:1( a) and II:1(b) of the GATT 1994 because they result
in less favourable tariff treatment to imports of certain set top boxes which have a communication

989 We find further support for this view in the statement of the Commission, provided by the United
States, that duty suspensions "constitute an exception to th e normal state of affairs" and are "reviewed regularly
with the possibility of deletion on request of a part y concerned" (United States first written submission,
para. 142, referring to Commission communication concerning autonomous tariff suspensions and quotas, OJ C
128 (April 25, 1998), p. 2 (Exhibit US-85)). While this statement was not made in the circumstances of this
case, it is at least, illustrative of the conditional nature of the measure. The European Communities has not
rebutted this statement.
990 Appellate Body Report on US – FSC (Article 21.5 – EC), paras. 215 and 221 (footnote omitted).

function (STBCs) than that provided for these produc ts under the EC Schedule, and because the tariff
treatment afforded is in excess of that afforded for them in the EC Schedule. In the joint Panel
request, the complainants indicate that the identif ied measures at issue affect set top boxes with
"modems of certain types (e.g., Ethernet modems)" or STBCs "which incorporate a device performing
a recording or reproducing function (e.g., a hard disk or DVD drive)".
991
7.765 The complainants argue, pursuant to commit ments made in the ITA, the European
Communities is obliged to provide duty-free treatment to STBCs. In particular, the complainants
allege that certain STBCs are covered by the duty-free concession set forth in the narrative description
"set-top boxes which have a communication function: a microprocessor-based device incorporating a
modem for gaining access to the Internet, and having a function of interactive information exchange",
located in the Annex to the EC Schedule, regardle ss of which tariff line the products are classified
under in the CN. 992 The United States submits that the bound duty rate for these products is set forth
in tariff item numbers 8517 50 90, 8517 80 90, 8525 20 99, and 8528 12 91, and as specified in the
headnote, is zero.
7.766 According to the complainants, despite this duty-free concession, one of the challenged
measures, an amendment to CNEN 2008/C 112/03, requi res that particular STBCs with "modems of
certain types (e.g., Ethernet modems)" or STBCs "which incorporate a device performing a recording
or reproducing function (e.g ., a hard disk or DVD drive)", be excluded from duty-free heading CN
code 8528 71 13. In the same amendment, accordi ng to complainants, STBCs "which incorporate a
device performing a recording or reproducing function (e .g., a hard disk or DVD drive)" must be
classified under CN code 8521 90 00, which carries a 13.9 per cent ad valorem duty.993 The exclusion
of STBCs with "modems of certain types (e.g., Ethernet modems)" from duty-free CN code
8528 71 13, and the application of this 13.9 per cent duty on STBCs "which incorporate a device
performing a recording or reproducing function (e.g., a hard disk or DVD drive)" is the essence of the
complainants' claim.
7.767 In addition, the United States and Chinese Taipei argue that actions of the European
Communities concerning the delivery of opinions with respect to the proposed amendments to the
Explanatory Notes contained in 2008/C 112/03 in Oc tober 2006 and May 2007 are inconsistent with
EC obligations under Articles X:1 and X:2 of th e GATT 1994. The United States and Chinese Taipei
argue that these opinions were not published in the EC Official Journal until 7 May 2008. Further,
they argue that EC member States were applying duties to set top boxes using the approach specified
in 2008/C 112/03 prior to 7 May 2008.994
7.768 The European Communities argues, however, that the complainants have misinterpreted the
commitment for STBCs in the EC Schedule. C onsequently, the European Communities rejects the
complainants' Article II claims. In addition, the European Communities rejects that the actions cited
by the United States and Chinese Taipei are inconsistent with Articles X:1 and X:2 of the GATT
1994.
7.769 In respect of the complainants' Article II claims, as with preceding claims, the Panel considers
its task is therefore to determine: (a) the scope of duty-free treatment in the EC Schedule; (b) whether

991 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 4.
992 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 4.
993 Joint Panel request, WT/DS375/8, 376/8, DS377/6, pp. 4-5.
994 Although the three complainants made a joint request for the establishment of this Panel, which
includes inter alia joint claims under Article X of the GATT 1994, Japan did not pursue these particular claims
in its submissions.

the products identified by the complainants fall with in the scope of the duty-free tariff concession; (c)
whether the challenged measures result in the impositi on of duties on the products at issue in excess
of those provided for in the EC Schedule; and (d ) whether the measures at issue result in less
favourable treatment of the products at issue than that provided for in the EC Schedule.
7.770 In light of the approach we have outlined above, we will first identify the measures and
products at issue. This is particularly important in this case as the Eur opean Communities has called
into question whether the particular measures are with in the Panel's terms of reference. Therefore,
before proceeding to the substance of the complain ants' claims, we first turn to address whether the
complainants may bring their claim before the Panel.
1. Preliminary issues
7.771 During these proceedings, the European Communitie s has raised various issues with respect
to STBCs claims.
995 As with their claim concerning flat panel display devices, the European
Communities considers that one of the challenged m easures is not legally binding under EC law. In
addition, the European Communities has contended that the complainants have failed to explain what
constitutes the relevant EC concession and what ar e the precise terms of the concession. The Panel
will briefly address each of these issues in this section.
7.772 We recall that the Appellate Body has explained that together, the identification of the
specific measures at issue and the legal basis of th e claims comprise the "matter referred to the DSB"
which forms the basis for a panel's terms of reference under Article 7.1 of the DSU.996
7.773 One of the essential purposes of the terms of refe rence is to establish the jurisdiction of the
panel by defining the precise claims at issue in the dispute. 997 The Appellate Body has also observed
that the vesting of jurisdiction in a panel is a fu ndamental prerequisite for lawful panel proceedings.998
Therefore, we must address these issues before we can proceed to address the substance of the
complainants' claims.
7.774 As the joint Panel request serves as the basis for the terms of reference of this Panel
999, we
will start our analysis by first setting forth the relevant text of the joint Panel request.

995 We note that the European Communities has not alleged particular violations of Article 6.2 of the
DSU or the Panel's terms of reference, but instead alleges that the complainants have failed to make a "prima
facie" case. See European Communities' first written subm ission, para. 32. Nevertheless, the Panel considers it
appropriate to address issues raised by the European Communities, as well as additional issues that go to the
Panel's terms of reference at the outset. These issues are enumerated in paragraph 7.123 of these Reports.
996 Appellate Body Report on Guatemala – Cement I, paras. 69-76.
997 Appellate Body Report on Brazil – Desiccated Coconut, DSR 1997:I, p. 186.
998 Appellate Body Report on Mexico – Corn Syrup (Article 21.5 – US), para. 36.
999 We recall, as set forth in para. 1.6 above, the Dispute Settlement Body (DSB) established a panel in
the present dispute in accordance with Article 6 of the DSU with the following terms of reference:
"To examine, in the light of the relevant provisions in the covered agreements cited by the
parties to the dispute, the matter referred to the DSB by the United States, Japan and the
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu in document
WT/DS375/8, WT/DS376/8 and WT/DS377/6, and to make such findings as will assist the
DSB in making the recommendations or in giving the rulings provided for in those
agreements."
See also Constitution of the Panel Established at the Request of the United States, Japan, and the
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, WT/DS375/8, 376/8, DS377/6, p. 1.

(a) STBCs: The measures at issue
7.775 In their joint Panel request, the complainants identified the relevant EC measures at issue as
follows:
"Customs authorities of EC member States impose duties on STBs with a
communication function. The measures at issue through which they do so include:
1. Council Regulation (EEC) No. 2658/87 of 23 July 1987 on
the tariff and statistical nomenclature and on the Common Customs
Tariff, including all annexes thereto, as amended
10; and
2. Explanatory Notes to the Combined Nomenclature of the
European Communities, 2008/C 112/03, (7 May 2008), alone or in
combination with Council Regulation (EEC) No. 2658/87 of 23 July
1987,
11
as well as any amendments or extensi ons and any related or implementing
measures.12
European Communities' position that CNEN in gene ral are not legally binding in the European
Communities' legal order, and are in their essence "important tools for the interpretation of the
CN".1002 Most importantly, the European Communiti es maintains the view that CNEN are not
binding on customs officials in their interpretation and application of the CN to customs
determinations, to the extent a conflict arises be tween the terms of the CNEN and CN, including its
Section and Chapters notes.
1003

1000 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 4.
1001 See paras. 7.130 et seq.
1002 European Communities' first written submission, paras. 312-314; European Communities' response
to Panel question No. 23; European Communities' second written submissi on, paras. 47-49 and 55 (Exhibit
TPKM-52)); European Communities' second oral statement, paras. 27-34.
1003 European Communities' first written submission, para. 98; European Communities' second oral
statement, paras. 38-43; European Communities' response to Panel question No. 122.

7.778 As it is relevant to the complainants' clai m concerning STBCs, the Panel recalls its finding
that the CNEN amendments at issue in this dispute are measures of general and prospective
application that can be challenged "as such". In pa rticular, we concluded that CNENs are of "general
application" because the application of a CNEN is not limited to a single import or a single importer,
and they set forth rules or norms that are intended to have general and pros pective application that
create legitimate expectations among the public and among private actors.
7.779 For the same reasons as those stated in para graphs 7.158-7.160 the Pane l therefore concludes
that CNEN 2008/C 112/03 can be challenged "as such".
(c) Have the complainants' identified the EC concession at issue?
7.780 In its first written submission, the European Communities argues that th e complainants have
failed to explain what constitutes the EC concessi on for "set top boxes which have communication..."
and where it is provided for, by referring both to th e narrative description appearing in Attachment B,
and also the description in the Annex to the EC Schedule.
1004 The European Communities further
argues that the complainants have failed to prope rly identify the precise language of the concession
"set top boxes which have a communication function" through their reference to "Set top boxes with a
communication function", thus failing to analyse the te rms consistent with the approach set forth in
Article 31 of the Vienna Convention.1005
7.781 The complainants identified the relevant "concessions" in their joint Panel request, as follows:
"The Schedule provides in a headnote that '[ w]ith respect to any product described in
or for Attachment B to the Annex to the Ministerial Declaration on Trade in
Information Technology Products, to the exte nt not specifically provided for in this
Schedule, the customs duties on such product, as well as any other duties and charges
of any kind…shall be bound and eliminated, as set forth in paragraph 2(a) of the
Annex to the Declaration, wherever the produc t is classified.' Attachment B includes
'set-top boxes which have a communication function: a microprocessor-based device
incorporating a modem for gaining access to the Internet, and having a function of
interactive information exchange.' The bound duty rate for this product, as set forth
in HS items 8517 50 90, 8517 80 90, 8525 20 99, and 8528 12 91, and as specified in
the headnote, is zero."
1006
7.782 The complainants argued that they have properl y referred to the language that constitutes the
concession in the Annex to the EC Schedul e, namely identifying "Set top boxes which have a
communication function".1007
7.783 We consider the complainants have establishe d what they consider to be the relevant
concession(s) at issue. However, we consider that two issues arise in light of the European
Communities' concerns with the complainants' discussi on of the relevant EC concession: first, what is
the location of the concession arising under the re levant narrative product description for purposes of
the Panel's analysis, and second, what are the impli cations of the reference to "set top boxes with a
communication function" to this dispute.

1004 European Communities' first written submission, paras. 190-196.
1005 European Communities' first written submission, paras. 197-201.
1006 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 4.
1007 United States' first written submission, para. 43; Japan's first written submission, para. 350;
Chinese Taipei's first written submission, para. 360.

7.784 We note that the European Communities has not ar gued that the complainants' alleged failure
to identify the precise concession means that the complainants have breached the provisions of Article
6.2 or other provisions of the DSU, in either respect . We also recall our statement in paragraph 7.773
above that Panels may choose to deal with issues on their own motion that it considers to go to the
heart of its jurisdiction, to satisfy themselves that they may proceed.
 1008 We will first address where
precisely the relevant concession is located. Second, we will consider what are the relevant terms of
the concession.
Is the relevant commitment located in the Annex to the EC Schedule, Attachment B, or both?
7.785 The issue that arises over the European Communities' complain ant is whether the narrative
description for "Set top boxes which have a comm unication function ..." is the narrative description
reproduced separately in the Annex to the EC Sche dule, or that contained in Attachment B, or
whether both texts are relevant.
7.786 In addressing the location of the narrative d escription for "flat panel display devices..."
above1009, we recall our view that the ITA participants did not intend for there to be discrepancies
between the descriptions that appear in Attachme nt B of the ITA and those appearing in the EC
Schedule. Accordingly, as above, we will not address further the question of whether the focus
should be on the narrative descriptions in Attachment B of the ITA, or those reproduced separately in
the Annex to the EC Schedule. To the extent that the product descriptions themselves define the
scope of the obligations (a point that we will re turn to below), we explained that the identical
language used in these narrative product descriptions in the ITA on the one hand, and as reproduced
in the EC Schedule on the other, would give rise to obligations of identical scope.
7.787 We thus turn to the second issue identified above.
What are the implications of the reference to "set top boxes with a communication function"
to this dispute?
7.788 We recall the European Communities' complaint over the identification of the language "Set
top boxes with a communication function" in its submissions. 1010 The European Communities
considers the complainants' reliance on the descriptive language "set top boxes with a communication
function", rather than the language of the concession which uses the terms "which have", leads to a
different conclusion on the scope of coverage, in light of the definition of the term "with", which is
defined as "denoting association of accompaniment", or accompanied by; having (a person or thing)
as an addition accompaniment".1011
7.789 We note that the United States and Japan have asserted that the phrase "set top boxes with a
communication function" is "at times used simply to paraphrase the language associated with the
Attachment B headnote" and other times is "used to refer to the concession the EC made in 2000 for
'set top boxes with a communication function.'"1012

1008 Appellate Body Report on Mexico – Corn Syrup (Article 21.5 – US), paras. 36 and 53.
1009 See para. 7.226 above.
1010 European Communities' first written submission, paras. 197-201.
1011 European Communities' first written submission, para. 217 (referring to the Shorter Oxford
Dictionary (1993), p. 3703 (Exhibit EC-31)).
1012 United States' and Japan's response to Panel question 80.

7.790 In its first oral statement, the United States fu rther specified that it considers the European
Communities has made separate commitments both for "set top boxes which have a communication
function" and "set top boxes with a communication function". The United States explains that the first
arises from the inclusion of the headnote and narra tive description in the Annex to the EC Schedule,
while the latter arises from a four th tariff line (tariff item number 8528 71 13) that the United States
claims was added in 2000 to the Annex to the EC Schedule.
1013 The United States asserts that it has
properly identified both of these conc essions in its initial submissions. 1014 The United States has
argued additionally that it did not consider there was any substantive distin ction between the terms
"with" and "which have".1015
7.791 The Panel has discussed above the circumstance s surrounding the addition of tariff item
number 8528 71 13 to the Annex to the EC Schedule via document G/MA/TAR/RS/74.1016
7.792 In response, the European Communities argued that it considers that the decision to notify an
additional code in 2000 did not introduce a separate narrative description into its Schedule nor modify
the existing one. At most, the European Commun ities argues that the addition of the tariff item
number could be understood to mean that the na rrative description could be understood to cover a
specific category of set top boxes capable of receiving television signals provided that these products
otherwise satisfy the terms of the narrative description.
1017
7.793 In view of the parties' further comments, we c onsider the implications of the parties' separate
references to the term "with" in their submissions . We note that Japan and Chinese Taipei have
limited their claims concerning set top boxes to an assessment of the STBCs narrative description.
Accordingly, as we have determined these two parties to have sufficiently identified the concession as
the narrative description, we do not understand either of these complainants to have considered that
the word "with" forms a literal part of the con cession. In addition, we understand the United States
has affirmed it has raised two separate claims co ncerning set top boxes. First, like the other two
complainants, we consider the United States has suffi ciently set forth its claim pursuant to the STBCs
narrative description. Separately, however, apar t from occasional paraphrasing of the narrative
description, we understand the United States reference to the term "with" pertains to its second claim
raised with respect to tariff commitments arising fro m four tariff lines that appear in the Annex to the
EC Schedule in connection with the STBCs narrative description.
7.794 In light of complainants reference in their jo int Panel request to the precise language of the
concession as it appears in the EC Schedule, and th eir subsequent discussion of this language, we
therefore consider that the complainants have explained what constitutes the concession. 1018 Further,
we will address the significance of the term "with" as it may pertain to the United States' other claim
in connection with tariff item number 8528 71 13, to the extent relevant.

1013 United States' first oral statement, paras. 13 and 16.
1014 United States' second written submission, para. 23.
1015 United States' first oral statement, para. 16.
1016 See paras. 7.413-7.423 above.
1017 European Communities' second written submission, para. 80. The European Communities offers
several reasons why the term "with" should not be given relevance. First, it contends that the terms or phrase
used by a domestic legislator to describe or name a product in the context of a classification measure should not
be relevant for interpreting the scope of a tariff concession. In addition, it argues that the terms "Set top boxes
with a communication" were not intended to be included in the modified Schedule, only the code identified with
it (European Communities second written submission, paras. 77-78).
1018 See, for instance, United States' first written submission, para. 43; Japan's first written submission,

7.795 Accordingly, the Panel will consider the effect of the EC measures identified by the
complainants, and subsequently, the scope of th e relevant concessions in its assessment of the
complainants' claims concerning Article II of the GATT 1994.
2. The measures at issue and their effects
7.796 The Panel will now consider the measures at issu e specifically identified by the complainants,
as set forth in paragraph 7.775 above, and their effects.
(a) Council Regulation No. 2658/87, as amended
7.797 As discussed in paragraphs 7.39-7.45 above , Council Regulation No. 2658/87 establishes the
CN and CCT.
1019
7.798 We recall that we concluded in paragraph 7.146 above that the Council Regulation No.
2658/87, including its Annex I, as it has been most recen tly amended, is the specific measure at issue
in this dispute and was properly identified as such in the joint Panel request.
7.799 The CN2010 version includes the duty-free CN code 8521 90 00 as follows:1020
CN code Description
Conventional
rate of duty
(%)
Supplementar
y unit
1 2 3 4
8521 Video recording or reproducing apparatus, whether
or not incorporating a video tuner:

8521 10 - Magnetic tape-type:
8521 10 20

- - Using tape of a width not exceeding 1,3 cm and
allowing recording or reproduction at a tape speed
not exceeding 50 mm per second
14 p/st
8521 10 95 - - Other 8 p/st
8521 90 00 - Other 13.9 p/st

7.800 The CN2010 version includes the duty-free CN code 8528 71 13, as well as the dutiable CN
codes 8528 71 19 and 8528 71 90, as follows:
CN code Description
Conventional
rate of duty
(%)
Supplementary
unit
1 2 3 4
8528 Monitors and projectors, not incorporating television
reception apparatus; reception apparatus for television,
whether or not incorporating radio-broadcast receivers or
sound or video recording or reproducing apparatus

 - Reception apparatus for te levision, whether or not
incorporating radio-broadcast receivers or sound or video

1019 Council Regulation No. 2658/87, Article 1 (Exhibits EC-49; US-13; TPKM-5).
1020 The Panel notes that CN code 8521 10 20 in both the CNEN2007 and CNEN2008 contains a
reference next to the conventional rate of duty of 14 per cent, which states, "Lower applied duty rate of 13 per
cent until 24 December 2008 (Council Regul ation (EC) No 2114/2005 (OJ L 340 , 23.12.2005, p. 1))" (Exhibit
JPN-3).

CN code Description
Conventional
rate of duty
(%)
Supplementary
unit
recording or reproducing apparatus
8528 71 - - Not designed to incorporate a video display or screen
 - - - Video tuners:
8528 71 11

- - - - Electronic assemblies for incorporation in automatic
data-processing machines
Free

p/st

8528 71 13

- - - - Apparatus with a microprocessor-based device
incorporating a modem for gaining access to the Internet,
and having a function of interactive information exchange,
capable of receiving television signals ('set-top boxes with
communication function')
Free

p/st

8528 71 19 - - - - Other 14 p/st
8528 71 90 - - - Other 14 p/st
8528 72 - - Other, colour
8528 72 10 - - - Television projection equipment 14 p/st
8528 72 20 - - - Apparatus incorporating a video recorder or
reproducer
14 p/st
 - - - Other:

7.801 The terms and applicable duty rates of CN codes 8521 90 00, 8528 71 13, 8528 71 19 and
8528 71 90 are identical in the CN2007 version (contained in Commission Regulation No. 1549/2006,
as amended), the CN2008 version (contained in Commission Regulation No. 1214/2007, as
amended), the CN2009 version (contained in Co mmission Regulation No. 1031/2008, as amended),
and the CN 2010 version (contained in Commission Regulation No. 948/2009, as amended).1021
(i) Arguments of the parties
7.802 The complainants have identified Council Regulation No. 2658/87, as amended, as providing
the basic EC measure on tariffs, wherein set top boxes are classified either under CN code 8521,
covering "recording or reproducing apparatus" or under CN code 8528 ( under either CN code
8528 17 13, 8528 71 19 or 852 8 71 90) concerning "Reception appara tus for television, whether or
not incorporating radio-broadcast receivers or s ound or video recording or reproducing apparatus;
video monitors and video projectors".
7.803 The European Communities does not dispute that certain STBCs may be classified under
dutiable CN codes 8521 90 00, 8528 71 19, or 8528 71 90.1022
(ii) Consideration by the Panel
7.804 The parties do not appear to dispute the content of the CN. As noted in paragraphs 7.799-
7.801, the CN2007 version and subsequent versi ons (through the CN2010 version) include the CN
codes 8521 90 00, 8528 71 13, 8528 71 19 and 8528 71 90. The terms and applicable duty rates for
the relevant headings have remained identical in the subsequent versions of the CN, i.e. in CN2008,
CN2009 and its current version, CN2010.

1021 CN2007 (Exhibits US-47; JPN-2; TPKM-34); CN2008 (Exhibit JPN-3); CN2009 (Exhibits US-11;
JPN-20; TPKM-21).
1022 European Communities' first written submission, para 278.

7.805 CN code 8528 71 13, which is duty free - and which, before CN2007 was 8528 12 91
- concerns:
"- Reception apparatus for television, whet her or not incorporating radio-broadcast
receivers or sound or video recording or reproducing apparatus:; - - Not designed to
incorporate a video display or screen:; - - - Video tuners:; - - - - Electronic assemblies
for incorporation in automatic data-pro cessing machines; - - - - Apparatus with a
microprocessor-based device incorporating a modem for gaining access to the
Internet, and having a function of inter active information exchange, capable of
receiving television signals ('set-top boxes with communication function')".
7.806 CN code 8528 71 19 applies a 14 per cent duty rate. CN code 8528 71 90 applies a 14 per
cent duty rate.
7.807 CN code 8521 90 00, which has a duty rate of 13.9 per cent duty rate, concerns:
"Video recording or reproducing apparatus, whether or not incorporating a video
tuner:; - Magnetic tape-type:; - - Using ta pe of a width not exceeding 1,3 cm and
allowing recording or reproduction at a tape speed not exceeding 50 mm per second; -
- Other; - - - Other".
7.808 In conclusion, Council Regulation No. 2658/1987, as amended, sets forth in CN 8528 71 13,
the duty-free CN code that applies to the followi ng products: "Apparatus with a microprocessor-based
device incorporating a modem for gaining access to th e Internet, and having a function of interactive
information exchange, capable of receiving televi sions signals ('set-top boxes with communication
function')". In addition, the CN establishes du tiable CN codes 8521 90 00, applicable to "[v]ideo
recording or reproducing apparatus, whether or not incorporate a video tuner", which sets a 13.9 per
cent duty. The CN also sets forth CN codes 8528 71 19 and 8528 71 90, as "o ther" headings, each of
which sets a duty rate of 14 per cent.
(b) CNEN 2008/C 112/03
7.809 On 7 May 2008, the European Communities published CNEN 2008/C 112/03 which includes
the following excerpts pertaining to CN codes 8521 90 00, 8528 71 13, 8528 71 19 and 8528 71 90:
"'
8521 90 00 Other
This subheading includes apparatus w ithout a screen capable of receiving
television signals, so-called "set-top boxes", which incorporate a device
performing a recording or reproducing function (for example, a hard disk or
DVD drive).
On page 339, the following text is inserted:
'8528 71 13 Apparatus with a microprocessor-based device incorporating a modem
for gaining access to the Internet, and having a function of interactive
information exchange, capable of recei ving television signals ("set-top
boxes with communication function")
This subheading covers apparatus without a screen, so-called "set-top boxes
with communication function", consisting of the following main components:

— a microprocessor,
— a video tuner.
The presence of an RF connector is an indicator that a video tuner may be
present.
— a modem.
Modems modulate and demodulate outgoing as well as incoming data
signals. This enables bidirectional communication for the purposes of
gaining access to the Internet. Exam ples of such modems are: V.34-,
V.90-, V.92-, DSL- or cable modems. An indication of the presence of
such a modem is an RJ 11 connector.
Devices performing a similar function to that of a modem but which do
not modulate and demodulate signals are not considered to be modems.
Examples of such apparatus are ISDN -, WLAN- or Ethernet devices. An
indication of the presence of such a device is an RJ 45 connector.
The modem must be built into the set-top box. Set-top boxes which do not
have a built-in modem but use an external modem are excluded from this
subheading (e.g. a set consisting of a set-top box and an external modem).
The Transmission Control Protocol/Internet Protocol (TCP/IP) must be present
as firmware in the set-top box.
Set-top boxes of this subheading must enable the user of the apparatus to
access the Internet. The apparatus must also be able to run Internet
applications in an "interactive informa tion exchange" mode such as an e-mail
client or a messaging application using UDP or TCP/IP sockets.
Set-top boxes which incorporate a device performing a recording or
reproducing function (for example, a hard disk or DVD drive) are excluded
from this subheading (subheading 8521 90 00).
8528 71 19 Other
See the last paragraph of the Explanatory Notes to subheading 8528 71 13.
8528 71 90 Other
This subheading includes products w ithout a screen which are reception
apparatus for television but which do not incorporate a video tuner (for
example, so-called 'IP-streaming boxes').
See also the last paragraph of the Ex planatory Notes to subheading 8528 71
13.'
"
7.810 In addition to this CNEN amendment as pub lished in the EU Official Journal, the
complainants referred in their joint Panel request to certain decisions of the Customs Code Committee
(Tariff and Statistical Nomenclature Section), incl uding opinions delivered with respect to this CNEN
amendment in draft form in October 2006 and May 2007. Both these CNEN amendment proposals

formed the basis for the CNEN am endment that was published in the EU Official Journal on 7 May
2008.
7.811 In October 2006, the Customs Code Committee (Tar iff and Statistical Nomenclature Section)
considered a Commission proposal for a CNEN amendment concerning CN code 8528 12 20 for
"reception apparatus for colour television, incorpor ating a video recorder or reproducer"; CN codes
8528 12 90 to 8528 12 95 for "video tuners"; CN code 8528 12 91 for "set top boxes with
communication function"; and CN code 8528 12 98 for "other".
1023
7.812 In May 2007, the Customs Code Committee (Tar iff and Statistical Nomenclature Section)
considered a Commission proposal for a CNEN amendment, excluding "STBs with HDD" from CN
code 8528 12 91 but no opinion was delivered, while the text of the draft was added to the minutes of
the Customs Code Committee meeting.1024
(i) Arguments of the parties
7.813 In accordance with the 2008/C 133/01, the complainants argue that the European
Communities improperly applies either 13.9 or 14 per cent duties on certain set top boxes that should
be extended duty-free treatment. In particular, under this CNEN, the complainants argue that the
following products are excluded from duty-free trea tment under CN code 8528 71 13: (i) set top
boxes with a hard disk or DVD drive are excluded from CN code 8528 71 13 and must be classified in
CN code 8521 90 00 and subject to a 13.9 per cent duty; (ii) set top boxes with ISDN, WLAN or
Ethernet technology are excluded from CN code 852 8 71 13 and are classified under 8528 71 19 and
subject to a 14 per cent duty; (iii) set top boxes that use an external (not "built in") modem are
excluded.
1025
7.814 The European Communities does not dispute that these CN co des are subject to either 13.9
or 14 per cent duties. 1026 Nevertheless, the European Commun ities submits that consideration of
whether a particular product is a set top box which has a communication function that qualifies for
duty-free treatment requires objective consideration of "the totality of technological elements present
in the set top box" subject to the GIRs. 1027 It argues that, if a set top box fulfils the objective
characteristics of a reception apparatus for televi sion, it is to be classified in heading 8528.
Otherwise, if a product has the char acteristics of a video recording or reproducing apparatus, it is
classified in heading 8521. In this latter respect , the European Communities asserts that the presence
of a hard disk is not assessed in isolation of other characteristics of the product. In addition, it argues
that products may be classified under CN code 8528 71 19 if they do not incorporate a modem, or
under CN code 8528 71 90 if they are reception appa ratus for televisions, but do not incorporate a
tuner. In cases where classification cannot be de termined the European Communities argues that
products are classified in accordance with GIR 3. The European Communities considers that CNEN
generally do not have binding legal authority and th erefore should not form the basis of an "as such"
challenge.1028

1023 Customs Code Committee (407th meeting) (Exhibit TPKM-30).
1024 Customs Code Committee (420th meeting) (Exhibit TPKM-31).
1025 United States' first written submission, paras. 48, 89 and 98-99, 104; Japan's first written
submission, para. 359, 388; Chinese Taipei's first written submission, paras. 103-104.
1026 European Communities' first written submission, para. 278.
1027 European Communities' response to Panel question No. 83; European Communities' first written
submission, paras. 279 and 286.
1028 See paragraphs 7.147-7.148 above.

(ii) Consideration by the Panel
7.815 In paragraphs 7.160 above, we determined th at CNENs in general are "authoritative", setting
forth rules or norms that have or are intended to have general and prospec tive application, having
normative value and providing administrative guidan ce, and creating expectations among the public
and among private actors. On this basis, we determ ined that CNENs can be challenged "as such", in
particular since they are issued by the European Communities, provide administrative direction to
customs authorities, and create legitimate expectat ions. Accordingly, the Panel will consider the
effect of the CNEN 2008/C 112/03 on classification of STBCs. The Panel will focus on the particular
CNEN to CN codes 8521 90 00, 8528 71 13, 8528 71 19 and 8528 71 90.
7.816 CNEN 2008/C 112/03 refers, inter alia, to CN code 8528 71 13, which applies to "[a]pparatus
with a microprocessor-based device incorporating a modem for gaining access to the Internet, and
having a function of interactive information exch ange, capable of receiving television signals",
identified specifically as "set-top boxes with communication function".
7.817 Under the CNEN to CN code 8528 71 13, set top boxes which incorporate a device
performing a recording or reproducing function, incl uding specifically a hard disk or DVD drive are
excluded from this subheading, and are directed to be classified in subheading 8521 90 00. CN code
8521 90 00 covers "set-top box es" ("apparatus without a screen capable of receiving television
signals") which incorporate a device performi ng a recording or reproducing function, including
specifically a hard disk or DVD drive. This c ode carries a 13.9 per cent duty, as discussed in the
preceding section.
7.818 In addition, the CNEN to CN code 8528 71 13 indicates that the described "set top box"
contains three main components: a microprocessor, a video tuner and a modem. Under the CNEN to
this heading, modems are indicated to modulat e and demodulate outgoing as well as incoming data
signals to enable bidirectional communication for the purposes of gaining access to the Internet.
While several examples of modems are provided (V.34-, V.90-, V.92-, DSL- or cable modems),
ISDN-, WLAN- or Ethernet devices are expressly excluded as modems that modulate and demodulate
signals.
7.819 Accordingly, we understand that apparatus contai ning in particular ISDN, WLAN or Ethernet
technology as apparatus that do not contain a "modem" within the meaning of the CNEN amendment,
which indicates that that apparatus will not comply with the requirement in the heading to possess
each of a microprocessor, a video tuner and a modem . Thus, a "set-top box with communication
function" that incorporates ISDN, WLAN or Ethernet technology is expressly excluded from CN code
8528 71 13. A "set top box" incorporating ISDN, WLAN or Ethernet technology is classifiable under
either dutiable CN codes 8521 90 00 or anothe r CN code (CN code 8528 71 19 or CN code
8528 71 90) depending on the presence or not of a recording or reproducing function.
7.820 Set-top boxes which do not have a built-in mode m, but use an external modem are similarly
excluded from CN code 8528 71 13. It is not expressly indicated which CN code would be applicable
for such a product. However, the European Communities has confirmed that these products are
classifiable under CN code 8528 71 19 that is described in CNEN 2008/C 112/03 as "other". CN code
8528 71 19 assigns a 14 per cent duty under th e current CN2010 (and as well as 2007-2009 CN
versions). The CNEN to CN code 8528 71 19 re fers to language in the concluding paragraph of
CN code 8528 71 13, indicating that such products that incorporate a device performing a recording or
reproducing function are not to be classified in CN code 8528 71 19 either.

7.821 Finally, the CNEN to CN code 8528 71 90 described as "Other" indicates that it covers
products without a screen which are reception appara tus for television but which do not incorporate a
video tuner, including "so-called 'IP-streaming boxes'". The CNEN similarly refers to CN code
8528 71 13. Thus, we understand that products classi fiable in 8528 71 90 must also be excluded from
coverage there if they perform a recording or reproducing function. These products would be
classifiable in 8521 90 00 and similarly subject to a 14 per cent duty.
7.822 In summary, we conclude that products may only qualify under duty-free CN code
8528 71 13 to the extent they meet the terms of the concession generally. However, set top boxes that
do not have a built-in modem, as described in th e provisions, or otherwise incorporate ISDN, WLAN
or Ethernet technology, are excluded. A set top box that qualifies as a product without a screen which
is a reception apparatus for television but which does not incorporate a video tuner is also excluded.
Finally, any set top box that contains a device performing a recording or reproducing function, such as
a hard drive or DVD drive, will also be excluded. Based on the text of CNEN 2008/C 112/03, we
have no evidence before us to conclude that devi ces that fulfil these conditions are not excluded, or
that resort might be had to GIR 3 if prima facie classifiable under other headings. As noted, products
that are in part described by CN code 8528 71 13 but that do not meet the requirements enumerated in
this paragraph are required to be classified unde r other codes under heading 8528, subject to 14 per
cent duties, or otherwise under CN code 8521 90 00 and subject to 13.9 per cent duties.
(c) The application of duties on imports of certain set top boxes
7.823 In addition to the above measures at issue, in their joint Panel request, the complainants
specified that the measure at i ssue includes "the actual application by customs authorities of EC
member States of customs duties on imports of STBs with a communication function".
1029 I n
response to a question from the Panel, however, th e complainants indicated that they were not
challenging the application of any EC measures. 1030 Accordingly, the Panel will not consider
particular applications by EC member State customs officials, or reach findings with respect to
particular applications.
(d) Conclusions
7.824 In our analysis of the measures above, we c oncluded that CN code 8528 71 13 is duty-free,
while CN codes 8521 90 00, 8528 71 19 and 8528 71 90 ar e all dutiable. Further, we concluded that
CNEN 2008/C 112/03 identifies certain product charact eristics as dispositive for classification in CN
codes other than duty-free treatment under CN code 8528 71 13. In particular, we found that set top
boxes that do not have a built-in modem, as descri bed in the provisions, or otherwise incorporate
ISDN, WLAN or Ethernet technology, are excluded. A set top box that qualifies as a product without
a screen which is a reception apparatus for televisi on but which does not incorporate a video tuner is
also excluded. Finally, any set top box that cont ains a device performing a recording or reproducing
function, such as a hard drive or DVD drive, will also be excluded.
3. The complainants' further identification of the products at issue
(a) Arguments of the parties
7.825 The United States and Japan argue that STBCs are "an electronic apparatus that connects to
a communication channel, such as a phone, integrat ed services digital network (ISDN) or cable

1029 Joint Panel request, WT/DS375/8, 376/8, DS377/6, p. 4.
1030 See complainants' responses to Panel question No. 119.

television line, and produces output on a conventional television screen".
1031 The United States and
Japan argue that these set top boxes "enable a televi sion set to receive and decode digital television
(DTV) broadcasts and are often referred to as 'cable boxes' or 'receivers'" and "vary greatly in their
complexity".1032 The United States and Japan submit furt her that these set top boxes additionally
enable connection to the Internet, and to send a nd receive information via "interactive information
exchange".1033 Japan submits that such "interactive inform ation exchange" occurs in real time over
the Internet using a modem. 1034 Chinese Taipei argues that set top boxes which have a
communication function are "devices that enable a television set to receive and decode digital
television ('DTV') signals ... that are used for satellite , cable and terrestrial digital televisions ... [and]
... include the capability to connect to the Internet through a modem". 1035 Chinese Taipei and Japan
submit that STBCs " sometimes include a hard disk to record television programmes, download
software from the DTV provider and to perform ot her ancillary applications enabled by the DTV
provider".1036 Japan and Chinese Taipei submit that its claim with respect to set top boxes does not
concern tariff treatment applicable to a specific models, but rather, it concerns a "number of criteria"
used by the European Communities to determine the tariff treatment of a category of products.1037
7.826 The European Communities argues that the complainants have not met their burden to
sustain their "as such" claims due to their failure to identify the products or product categories at
issue.1038 For this reason, it considers that the complainants have failed to establish that all set top
boxes are subject to duties to necessarily violate its commitments. 1039 The European Communities
argues that the United States' and Japan's descr iption of the products selects and de-emphasizes
different technical elements, while Chinese Taipei provides "an entirely unsupported description" of
the product. 1040 In the view of the European Communiti es, by joining and combining descriptive
elements from various sources and time periods, the co mplainants fail to address differences between
the products existing at the time of the conclusion of the ITA and the product as it existed/exists at
later times.1041 The European Communities argues that cons ideration of certain models, such as set
top boxes with a recording function, demonstrates that the main features of certain set top boxes make
them "digital video recorders", which are "compl etely different" than what is covered by the
concession.1042 Generally, the European Communities ar gues that particular set top boxes when
considered objectively, are not eligible for duty-fr ee treatment, such as a set top box that performs a 1

1031 United States' first written submission, para. 42; Japan's first written submission, para. 344
(referring to informitv glo ssary, http://informitiv.com/glossary/settopbox/ (Exhibit US-22); ITV dictionary.com
http://www.itvdictionary.com (Exhibit US-23, JPN-11)).
1032 United States' first written submission, para. 42; Japan's first written submission, para. 344
(referring to Newton's Telecom Dictionary (10th ed. 1996), p. 1041 (Exhibit US-24, Exhibit JPN-11)).
1033 United States' first written submission, para. 42; Japan's first written submission, para. 344
(referring to Annabel Z. Dodd, the E ssential Guide to Telecommunications (3 rd ed. 2001), p. 308 (Exhibit US-
25, Exhibit JPN-11)).
1034 Japan's first written submission, para. 345.
1035 Chinese Taipei's first written submission, para. 15.
1036 Japan's first written submission, para. 345 (e mphasis added); Chinese Taipei's first written
submission, para. 15.
1037 Japan's second written submission, para. 197; Chinese Taipei's second written submission,
para. 225.
1038 European Communities' second written submission, para. 67; European Communities' second oral
statement, paras. 51 and 58.
1039 European Communities' second written submission, para. 68.
1040 European Communities' first written submission, para. 202 (referring to Exhibits US-22 to 25).
1041 European Communities' first written submission, para. 205.
1042 European Communities' first written submission, para. 260 (referring to Exhibit EC-43 to 45,
US-28).

per cent "communication" function a nd 99 per cent "other" functions.
1043 In its view, if the
complainants' broad approach were followed, no matter how prevailing the recording function, that
product, and any other possible product in the future would be considered an ITA product as long as
the "technological elements" fit inside a "box" that enables a communication function.1044
(b) Consideration by the Panel
7.827 We recall from above our finding that the task before us in respect of the complainants' claims
based on Article II of the GATT 1994, is to determin e whether the measures at issue result in duties
being levied on certain products, in excess of th e tariff treatment provided for those products under
the EC Schedule. In doing so, we explained our und erstanding of the complainants' claim to be that
aspects of the measures operate automatically to excl ude from particular duty-free tariff headings all
products with a certain characteristic irrespective of the other objective characteristics they may
possess. Thus, we concluded that, if we were to de termine that some products fall within the scope of
duty-free concessions in the EC Schedule, and if th e challenged measures provided for the application
of duties to those products covered by the concession, this treatment would breach Article II.1045
7.828 Accordingly, we disagree with the European Communities that the complainants were obliged
in this case to identify the particular models or pr ecise products at issue in order to succeed with their
claim. We consider that the measures within our terms of reference determine the products that are
within our terms of reference. The Panel will cons ider below these and other aspects of the measures
in its assessment in determining whether the comp lainants have met their burden to demonstrate
inconsistency of the measures at issue under Article II of the GATT 1994.
7.829 In making our assessment, we note that the complainants have referred to various
characteristics of the products in framing their arguments to the Panel. In particular, the complainants
submit that a set top box with a communication function is an electronic apparatus that connects to a
communication channel, including through techno logies based on phone, ISDN or cable television
line. They argue these devices enable connection to the Internet and handle information interactively,
and produce output on a conventional television screen . In addition, the co mplainants submit that
these devices connect to a television set to receive and decode digital television broadcasts, including
over satellite and cable. The complainants also argue that the addition of a hard drive to a set top box
with a communication function does not change its nature as a set top box with a communication
function.
1046
7.830 Bearing in mind the foregoing, we consider that the products at issue in this dispute are
(i) electronic apparatus that enable a video mon itor or television to receive and decode digital
television broadcasts from a communication channel, which are capable of connecting to the Internet
through an in-built WLAN, ISDN or Ethernet devi ce in order to have an interactive information
exchange; and (ii) electronic apparatus that meet the terms of the description in the CNEN and
otherwise incorporate a device performing a recording or reproducing function, such as a hard disk or
DVD drive.
7.831 In the Panel's view, therefore, the two main issues before it concern whether the concession
for "Set top boxes which have a communication func tion" covers electronic devices that achieve an
interactive communication function via WLAN, ISDN or Ethernet, and whether the concession covers

1043 European Communities' first written submission, paras. 258-260 (Exhibit EC-46).
1044 European Communities' response to Panel question No. 69.
1045 See paras. 7.103-7.117 above.
1046 Complainants' response to Panel questions Nos. 85, 88 and 146.

those devices containing recording functionality (for example, a hard drive or DVD drive), in addition
to an interactive communication function. As not ed in paragraphs 7.8 09-7.812 above, these aspects
are reflected in the text of the measure CNEN 2008/C 112/03, and were the focus of the complainants'
arguments. The Panel will thus proceed on the basis of the products affected by these aspects of the
measures, and in light of the description of the product presented by the parties.
4. Whether the European Communities' tariff tr eatment of particular set top boxes is
consistent with its obligations under Article II of the GATT 1994
7.832 The European Communities made duty-free conc essions on certain information technology
products as part of its implementa tion of the ITA, which are reflected in the EC Schedule. The
complainants' claim relates to the concession embo died in the narrative description "Set top boxes
which have a communication function: a micropr ocessor based device incorporating a modem for
gaining access to the Internet and having a function of interactive information exchange" in the Annex
to the EC Schedule. In addition, the United States argues that the Eu ropean Communities has
committed to provide duty-free treatment to set top boxes in accordance with concessions embodied
in the EC Schedule under CN codes 8517 50 90, 8517 80 90, 8525 20 99 or 8528 12 91 listed therein.
The complainants argue that by not affording dut y-free treatment to products which are within the
scope of these tariff concessions, the European Co mmunities is acting inconsistently with its
obligations under Article II of the GATT 1994, which requires that Members not treat products
coming from another Member less favourably than in their schedules or to charge duties in excess of
the bound rates set forth in said Schedule.
7.833 As noted above, we will start by determining the scope of the STBCs concession in the Annex
to the EC Schedule. We will then turn to consider the United States' claim with respect to CN codes
8517 50 90, 8517 80 90, 8525 20 99 or 8528 12 91. Ha ving determined the scope of the relevant
obligation in the EC Schedule, we will then consider whether the effect of the measures at issue noted
above is such that products that fall within the sc ope of the EC's obligations do not receive duty-free
treatment.
(a) The Ordinary Meaning of the Relevant Con cession: The EC headnote and narrative product
description for STBCs in the Annex to the EC Schedule
7.834 The complainants submit that certain set top boxes are covered by the duty-free concession
in the narrative description for STBCs in the Annex to the EC Schedul e ("Set top boxes which have a
communication function: a microprocessor based de vice incorporating a modem for gaining access to
the Internet and having a function of interactive information exchange").
1047 They argue that the
ordinary meaning of the terms of the STBCs narrativ e description, when read in the context of the EC
headnote, requires the European Communities to extend duty-free coverage to all products described
by the narrative description, wherev er those products are classified. 1048 In their view, the tariff item

1047 The following third parties also take this view: see, for instance, Australia's oral statement,
paras. 8, 13; China's executive summary of its third party submission, para. 3; Costa Rica's third party
submission, para. 5, 22-23; Hong Kong (China)'s third party statement, paras. 4-5; Korea's third party
submissions, paras. 10-11, 22; Philippines' third party submission, para. 3; Philippines' third party statement, pp.
5-6; Singapore's oral statement, paras. 9 and 48.
1048 Complainants' response to panel question No. 10 0. The United States and Chinese Taipei submit
that the ITA itself does not provide for the inclusion of a headnote; however, they argue that participants agreed,
during the implementation phase, to incorporate a headnote into their Schedules as part of the process of
implementing their Attachment B conce ssions. They argue that such a h eadnote was to include the language
"wherever they are classified in the HS" (United Stat es' and Chinese Taipei's responses to panel question
No. 100). Japan argues that the ITA does not require th e incorporation of a headnote when inscribing duty-free

numbers listed beside the narrative descriptions cannot limit the concession's scope to only those
products classifiable in the listed codes. The Unite d States describes the EC headnote as a "separate"
commitment, additional to the commitments as sociated with individual tariff lines in the EC
Schedule.
1049
7.835 The European Communities accepts that the EC headnote is part of its Schedule 1050, but
rejects the complainants' allegations on the ordi nary meaning of the terms in the EC headnote 1051 as
well as the STBCs narrative description. 1052 The European Communities ar gues that the three tariff
item numbers listed next to the STBCs narrative description determine the scope of the STBCs
commitment made pursuant to Attachment B and therefore shed light on what products were
understood to be covered.1053
7.836 As explained above,1054 the Annex to the EC Schedule contains (i) the EC headnote, and (ii) a
table listing 55 narrative descriptions (including th e STBCs narrative description) in a left-hand
column with one or more specific tariff item numb ers listed next to each narrative description in the
table's right-hand column (including four codes associated with the STBCs narrative description).
7.837 We recall that the EC headnote provides as follows:
"With respect to any product described in or for Attachment B to the Annex to the
Ministerial Declaration on Trade in Information Technology Products
(WT/MIN(96)/16), to the extent not specifically provided for in this Schedule, the
customs duties on such product, as well as any other duties and charges of any kind
(within the meaning of Article II:1(b) of the General Agreement on Tariffs and Trade
1994) shall be bound and eliminated as set forth in paragraph 2(a) of the Annex to the
Declaration, wherever the product is classified".
1055
7.838 The text of the STBCs narrative description, th at appears below the EC headnote, provides as
follows:

concessions on products described in Attachment B into ITA participants' Schedules. It argues that participants
had discretion concerning how to reflect this commitment into their own Schedules subject to review and
approval by the Members. While arguing that no requirement exists to incorporate a particular headnote, Japan
submits it included a note that is "almost the same" as the EC headnote (Japan's response to panel question
No. 100).
1049 United States' comments to the European Communities' response to Panel questions Nos. 100 and
103 and to questions 1-3 of the United States.
1050 European Communities' first written submission, para. 18.
1051 European Communities' first oral statement, para. 20.
1052 European Communities' first written submission, paras. 104-118.
1053 European Communities' first written submission paras. 50-61. The European Communities has
argued that the CN codes that appear next to the product descriptions (such as for instances, the FPDs narrative
description) "appear twice" in its Schedule, as those c odes listed next to the narrative descriptions in the Annex
to the EC Schedule are also listed el sewhere in the EC Schedule and carry a zero duty. Thus, the European
Communities considers that the CN codes in the Annex to the EC Schedule "exhaust" the headnote, in particular
the language "wherever the product is classified" that appears therein. Accordingly, the European Communities
does not consider the headnote adds to its commitments (see, for instance, European Communities' first oral
statement, para. 19; European Communities' response to questions from the United States during second
meeting, para. 1).
1054 See paragraphs 7.24 - 7.25 above.
1055 Exhibit US-7.

"Set top boxes which have a communication function: a microprocessor based device
incorporating a modem for gaining access to the Internet and having a function of
interactive information exchange".
1056
7.839 The following four tariff item numbers are associated with the STBCs narrative description:
85175090, 85178090, 85252099, 85281291.1057
7.840 The complainants have identified both the ST BCs narrative description and the EC headnote
in discussing the concession that they consider to ar ise under the Annex to the EC Schedule. Because
the EC headnote appears at the outset of the Annex to the EC Schedule and thus precedes the
narrative descriptions, we consider it appropriate to begin our analysis with the EC headnote before
turning to the narrative description. Pursuant to Article 31 of the Vienna Convention, we will
consider the ordinary meaning of the EC headnote.
(i) The meaning of the terms of the EC headnote
7.841 The Panel recalls its conclusions from paragraph 7.330 et seq . above regarding the
interpretation of the EC headnote in the Annex to the EC Schedule. In accordance with Article 31 of
the Vienna Convention, the Panel determined that the EC headnote operates so that the EC concession
is defined by the narrative product descriptions in th e Annex to the EC Schedule and not by the terms
of the tariff item numbers beside them, which are "illustrative" of the head ings that the European
Communities considered relevant at the time of im plementation of the ITA. The tariff item numbers
do not delimit the particular products that should be extended duty-free treatment.1058
7.842 The Panel found support for this in the context provided by the ITA, other aspects of the EC
Schedule, and other WTO Members' schedules of co ncessions, and in light of the object and purpose
of the WTO Agreement and GATT 1994. As a separate matter, because the language of the dispositive
product descriptions at issue, are not based on HS language and do not refer to the HS, the Panel
further considered that HS interpretative material s, including section and chapter notes and GIRs, are
not relevant to an assessment of the scope of produc t coverage. Neither did we consider relevant the
CNEN, which are not part of the HS.
7.843 Likewise, the EC concession for set top boxes in the Annex to the EC Schedule is defined
only by the relevant narrative description, which we now analyse. On the basis of our findings above,
we will consider the ordinary meaning of the sp ecific terms of the STBCs narrative description to
determine the treatment under the EC concession. Again, the Panel will assess the narrative
description in accordance with the principles of treaty interpretation as codified in Article 31 of the
Vienna Convention.

1056 Exhibit US-7.
1057 Exhibit US-7. CN codes 85175090, 85178090 and 85252099 also appear in the EC Schedule's
consolidated section that lists the HS1996 duty-free codes from Sections 1 and 2 of Attachment A. The fourth
code, CN code 8528 12 91, was adde d to the Annex to the EC Schedule , in 15 December 2000. See EC ITA
Modifications; Committee on Market Access, Rectificati ons and Modifications of Schedules, Schedule CXL –
European Communities, G/MA/TAR/RS/74 (15 December 2000) (Exhibit US-26).
1058 See in particular paras. 7.445-7.447 for a summary of overall conclusions on interpretation of the
EC headnote and on the relevance of the narrative product descriptions and CN codes in the Annex to the EC
Schedule.

(ii) The terms of the STBCs narrative description in the Annex to the EC Schedule
7.844 We recall that the STBCs narrative description provides:
"Set top boxes which have a communication function: a microprocessor based device
incorporating a modem for gaining access to the Internet and having a function of
interactive information exchange".
1059
7.845 The complainants distinguish between the terms appearing before the colon ("Set top boxes
which have a communication function:"), and those after the colon ("a microprocessor-based device
incorporating a modem for gaining access to the Internet, and having a function of interactive
information exchange"). The United States and Japan argues that a device having the three
characteristics appearing after the colon is a set top box with a communication function. 1060 Chinese
Taipei notes that only the words before the colon were marked in bold, as the description originally
appeared in Attachment B of the ITA, which it argu es, suggests that "negotiators of the ITA intended
to stress the words 'set top boxes which have a communication function" over the rest of the text. 1061
According to Chinese Taipei, the co lon "breaks the sentence" into tw o parts, wherein the product is
identified before the colon, while the terms after the colon describe "a type of device ... that is able to
perform a communication function". Chinese Taipei argues that the terms after the colon provide
context to interpret the terms before the colon, though it argues the conclusion would be the same
whether treated as context or otherwise, namely, th at the addition of functions or features would not
preclude a set top box from falling within the concession. 1062 If the concession contains no limitation,
they argue, the concession does not limit the type of functionality.
7.846 The European Communities argues that the narrative description must be considered in its
entirety, and not divided into pieces. 1063 In its view, the text which follows after the colon is used to
identify or explain the text before the colon, and accordingly, the two parts cannot be read in
separation.1064 Thus, it considers "set top boxes which have a communication function" are identified
after the colon as a specific type of "device" th at is i) microprocessor-based, ii) incorporating a
modem for gaining access to the Internet and iii) having a function of interactive information
exchange.1065 In its view, these three aspects do not co nstitute "minimal requirements" and endless
additional features or technical elements should not be assumed when considering the definition of a
set top box which has a communication function. 1066 The European Communiti es argues that it is not
feasible to ignore the main versus an ancillary func tion, in determining whether a product qualifies as
a set top box within the meaning of the narrative description.1067
7.847 The Panel notes that the narrative description at issue contains 29 terms, many of which have
been discussed by the parties. The main questi ons before the Panel are whether the concession for

1059 Exhibit US-7.
1060 United States' first written submission, para. 92; Japan's first written submission, para. 373.
1061 Chinese Taipei's first written submission, para. 384, fn. 196.
1062 Chinese Taipei's first written submission, para. 403.
1063 European Communities' first written submission, para. 211.
1064 European Communities' first written submission, para. 212.
1065 European Communities' first written submission, para. 213.
1066 European Communities' first written submission, paras. 214, 218. The European Communities
qualifies the complainants as "saying that a set top box which has a communication function is the
communication function": "STB + communication function = (1) + (2) + (3) where (1) + (2) + (3) would be the
defining elements … of the communication function" (European Communities' first written submission,
para. 218).
1067 European Communities' comments on complainants' responses to Panel question No. 146.

"set top boxes which have a communication function" covers electronic devices that achieve an
interactive communication function via WLAN, ISDN or Ethernet, and/or whether the concession
covers those devices containing recording functiona lity, such as a hard drive or DVD drive, in
addition to an interactive communication function. Considering the complainants' arguments, and the
focus of their complaints in these two respects, we focus our analysis on those terms of the concession
that are central to addressing the matters before us, in their relevant context and in light of the object
and purpose. The Panel will also consider the Eu ropean Communities' argument that the concession
must be considered in its entirety. At the outset , the Panel considers it helpful to begin with an
assessment of the opening terms appearing in th e concession, which indicate that the concession
concerns "Set top boxes", in particular, those "which have a communication function".
The meaning of the terms "set top boxes which have a communication function"

The meaning of the terms "set top box"
Arguments of the parties
7.848 The complainants submit technical definitions of the term "set top boxes". Japan and
Chinese Taipei argue that the term "set top box" is a high-tech neologism – i.e., a new word or
expression – with no precise definition in ordinary dictionaries. 1068 T h e United States and Japan
describe a set top box as a microprocessor-based elec tronic apparatus that incorporates a modem to
connect to a communication channel, such as a phone, ISDN or cable television line, and produces
output on a conventional television screen, adding that set top boxes "vary greatly in their
complexity". They argue that set top boxes often en able a television set to receive and decode digital
television broadcasts and that set top boxes are of ten referred to as "cable boxes" or "receivers".
1069
Also, set top boxes enable a user to connect to th e Internet and send and receive information – thus
engaging in "interactive information exchange".1070 According to Chinese Taipei, a "set top box" is "a
device that interfaces a television set or computer " with "a network, enabling users to exchange
information"1071 or to "a cable TV network, cable modem ne twork, or satellite TV dish and, perhaps,
telephone network". 1072 Chinese Taipei submits that a set top box may have a communication
function for which its "purpose or intended role is the transmission or exchange of information, news,
etc".1073
7.849 The complainants define a "set top box" as follows:
Source Referred to: Definition of "set top box"
Informitv glossary,
http://informitv.com/glossary/settopbox/
1074
"[r]eceiver device that processes an incoming signal
from a satellite dish, aerial, cable, network or
telephone line"

1068 Japan's first written submission, para. 377; Chinese Taipei's first written submission, paras. 389-
390.
1069 United States' first written submission, para. 42; United States' second written submission, para. 37.
1070 United States' first written submission, para. 42; Japan's first written submission, para. 345.
1071 Chinese Taipei's first written submission, para. 400.
1072 Chinese Taipei's first written submission, para. 401.
1073 Chinese Taipei's first written submission, para. 401.
1074 United States' first written submission, para. 42 , fn. 45, (Exhibit US-22); Japan's first written

Source Referred to: Definition of "set top box"
ITV Dictionary,
http://www.itvdictionary.com (Exhibit
US-23)
1075
"A set-top box (STB) is a device that connects to an
external signal source and decodes that signal into
content that can be presented on a display unit such
as a TV."
Newton's Telecom Dictionary (10th ed.
1996), p. 1041 (Exhibit US-24)1076
"The electronics box which sits on top of your TV,
connecting it to your incoming CATV signal and
your TV's incoming coaxial cable. Set-tops vary
greatly in their complexity with older models merely
translating the frequency received off the cable into a
frequency suitable for the television receiver while
newer models can be addressable with a unique
identify much like a telephone. That identify can be
addressed from the cable head end. This allows the
CATV operator to turn individual channels on and
off, such as pay channels"
Annabel Z. Dodd, The Essential Guide
to Telecommunications (3rd ed. 2001),
p. 308
1077
"Digital set top boxes are available to take advantage
of the two-way capability of digital cable TV and
satellite TV."
Yourdictionary.com,
http://www.yourdictionary.com/set-top-
box, visited on 30 October 20081078
"a small computing device that interfaces a television
(TV) set or computer to a cable TV (CATV)
network, cable modem network, or satellite TV dish
and, perhaps, telephone ne twork. A set-top box is
responsible for functions such as decoding digital
TV signals for display on an analogue TV set,
compression and decompression, buffering, security
management, and variou s signalling and control
communications."
Foldoc, Free Online Dictionary of
Computing,
http://foldoc.org/index.cgi?query=set+to
p+box, visited on 30 October 20081079
"Any electronic device designed to produce output
on a conventional television set (on top of which it
nominally sits) and connected to some other
communication channels such as telephone, ISDN,
optical fibre, or cable. The STB usually runs
software to allow the user to interact with the
programmes shown on the television in some way."

1075 United States' first written submission, para. 42 , fn. 45, (Exhibit US-23); Japan's first written
1076 United States' first written submission, para. 42, fns. 46-47, (Exhibit US- 24); Japan's first written
submission, para. 344, fns. 146-147.
1077 United States' first written submission, para. 42 , fn. 48, (Exhibit US-25); Japan's first written
1078 Chinese Taipei's first written submission, paras. 397, fn. 200.
1079 Chinese Taipei's first written submission, paras. 398, fn. 201.

Source Referred to: Definition of "set top box"
SearchNetworking.com,
http://searchnetworking.techtarget.com/s
Definition/0,,sid7_gci212971,00.html,
visited on 30 October 20081080
"A set-top box is a device that enables a television
set to become a user interface to the Internet and also
enables a television set to receive and decode digital
television (DTV) broadcasts. DTV set-top boxes are
sometimes called receivers. A set-top box is
necessary to television viewers who wish to use their
current analogue television sets to receive digital
broadcasts."

7.850 The European Communities argues that there is no universa lly applicable definition of a
"set top box". Rather, "set top box" covers "a very broad category of products, the only common
feature of which is that they have the form of a box and are placed close to a TV or a video monitor
(for the use with that product for the purposes of ultimately reproducing television)". The European
Communities argues that a "great variety" of set top boxes exist today, not all of which have the same
features
1081, including set top boxes that serve as satellite receivers to decode television
programming.1082 However, the European Communities argues that the terms "which have a
communication function" denote a particular type of set top box, i.e., those set top boxes that access
the Internet directly thro ugh an incorporated modem.
1083 The advent of set top boxes incorporating
both communication and video recording or reproducing functions resulted in what the European
Communities calls a "new" product where the comm unication function is supplementary to the
recording or reproducing function.
Consideration by the Panel
7.851 The parties agree on certain common elements, which are supported by the various definitions
and descriptions they provided. In particular, the parties recognize that a "set top box" describes an
apparatus or device that processes an incoming signa l from an external signal source in a manner that
can be presented on a display unit, such as a vide o monitor or television set . The parties seem to
agree that the apparatus may not necessarily be d esigned to be "on top" of a television or video
monitor.1084 Otherwise, many of the definitions acknowl edge that a set top box may handle one or
several functionalities, including receiving and decoding television broadcasts, whether from a
satellite, cable or Internet source; converting dig ital TV broadcasts to function on older analogue TV
sets; enabling two-way interactive connectivity with digital cable television broadcasts or via the
Internet. The complainants submit that set top boxes might also provide recording of digital video
content. While disagreeing with several other el ements, the European Communities accepts that the
definition of a set top box encompasses "a very broad category of products, the only common feature
of which is that they have the form of a box and are placed close to a TV or a video monitor (for the
use with that product for the purposes of ultimately reproducing television)".
1085 Furthermore, the
European Communities seems to ac cept that an apparatus having a recording function may still be
considered a set top box in case such recording function is "ancillary".1086

1080 Chinese Taipei's first written submission, paras. 399, fn. 202.
1081 European Communities' response to Panel question No.69 (referring to Exhibit US-23).
1082 Exhibit EC-35.
1083 European Communities' response to Panel question Nos. 69 and 78.
1084 European Communities' response to Panel question No.69.
1085 European Communities' response to Panel question No.69.
1086 European Communities' response to Panel question No. 23. In this respect, the European
Communities considers that products which are currently in the market could, with some simplification, be

7.852 In light of the broad array of functionalities c ontemplated by set top boxes, we agree with the
European Communities that the u se of the terms "which have a communication function" may limit
the particular type of set top box that is covere d under the concession. We will accordingly consider
these terms, as well as the relevance of the remaining terms in the entire text of the concession. In
light of the complainants' focus on recording features and certain technologies that enable
connectivity, we consider that it is not necessary to assess all of the various possible functions a set
top box could perform.
The terms "which have a communication function"
7.853 Japan argues that the ordinary sense of the phrase "which have a communication function"
confirms that the scope of the EC concession is broad.
1087 We recall our conclusion above that the
complainants' reference to the term "with" was ei ther intended to paraphrase the concession, or
otherwise, the United States used the term in refe rence to its separate claim in connection with the
European Communities' 2000 notification of tariff it em number 8528 71 13 in the Annex to the EC
Schedule.1088 Accordingly, we see no need to consider the term here.
Arguments of the parties
7.854 The complainants argue that the description contains the terms "which have" and does not
include the terms "which have only" or "which have solely". Therefore, in their view the phrase
"which have" does not limit the concession to set top boxes that are solely comprised of the three
characteristics enumerated afte r the colon in the concession. 1089 The complainants argue that such a
reading would impute into the EC Schedule words that are not there. Had the drafters intended to
limit the concession, the complainants argue that the term "only" or its equivalent would have been
included.1090 In the absence of additional words, Japan argues that set top boxes with other functions
are covered as well.1091
7.855 Japan and Chinese Taipei additionally argue that the indefinite article "a", defined as "[o]ne,
some, any"1092 indicates that ITA participants intended to c over a broad array of set top boxes. Japan
argues that the term "a" indicates that parties inte nded to cover set top boxes which may perform not
only a communication function but also other set top boxes which perform a function in addition to a
communication function.1093 Chinese Taipei argues that the use of the term "a" indicates coverage of
set top boxes which perform any type of communication function, not a specific type.1094

divided into the following three categories: 1) set top boxes of the type of digital video recorders with an
ancillary communication function (such as those in Exhibit EC-44), 2) the "Internet on TV" set top boxes whose
main function is to communicate (such as those in Exhibit EC-46), or set top boxes of the type that would be
classifiable in heading 8528, i.e. se t top boxes which perform the function of reception apparatus for television
and whose communication function is somehow more limited (and which have no or even a small hard disk
drive).
1087 Japan's first written submission, para. 380.
1088 See paras 7.788-7.795 above.
1089 United States' second written subm ission, para. 39; Japan's first written submission, para. 386;
Chinese Taipei's first written submission, para. 394.
1090 United States' response to Panel question No. 80; Chinese Taipei's first written submission,
para. 394.
1091 Japan's first written submission, para. 383.
1092 The Shorter Oxford Dictionary (1993), p. 1.
1093 Japan's first written submission, para. 382.
1094 Chinese Taipei's first written submission, paras. 393.

7.856 Finally, Japan and Chinese Taipei additionally define the term "communication" as "[t]he
action of communicating heat, feeling, motion, etc.; esp. the transmission or exchange of information,
news, etc."
1095; and the term "function" as "[t]he activity pr oper or natural to a person or thing; the
purpose or intended role of a person or thing; an office, duty, employment, or calling. Also, a
particular activity or operation (among several) …" 1096 Based on these definitions, Japan argues that
set top boxes with a "communication function" ar e those whose purpose or intended role is the
transmission or exchange of information, without constraining the type of information that can be
exchanged. Japan argues further that the term "function" conveys "the notion of a single function
among several functions, in no way excluding other functions". 1097 Chinese Taipei argues that the
terms "communication" and "function" indicate that set top boxes with a communication function are
those that have an activity or operation of transmission or exchange of information, news, etc.
1098
7.857 The European Communities argues that the term "which" as a relative noun serves the
purpose of "introducing a clause defining or restrict ing the antecedent, esp. a clause essential to the
identification of the antecedent". 1099 Accordingly, the European Communities argues that "which
have a communication function" defi nes or restricts the meaning of the antecedent term "set top
boxes". When considered in combination with the use of a colon, the European Communities argues
that it should be understood that not all set top boxes are defined but merely certain kinds of set top
boxes, in particular those with a communication function. 1100 The European Communities is of the
view that, when appraising the objective characteris tics of an apparatus for purposes of classification,
it is possible that the prevalence of a recording function over other functions will lead to the
conclusion that an apparatus is a "video recorder" rather than a "set top box". 1101 The European
Communities has not assessed the meaning of the term "a" in isolation.
Consideration by the Panel
7.858 The European Communities provides a definition of "which" as to "introduc[e] a clause
defining or restricting the antecedent". The term "which" followed by "communication function" may
thus be used to restrict the antecedent term "set top boxes", as the European Communities suggests.
However, the term "which" is also defined as "used as a function word to introduce a non-restrictive
relative clause and to modify a noun in that clause and to refer together with that noun to a word or
word group in a preceding clause or to an entir e preceding clause or sentence or longer unit of
discourse".1102 Therefore, rather than restricting the term "set top boxes" the term "which have a
communication function" can also be used to define "set top boxes". Thus, this definition confirms to
us that "which", considered as it appears in the narrative description, cannot necessarily be assumed to
limit the breadth of coverage of the concession to set top boxes which only have a communication
function. Accordingly, we will consider the re maining terms in the c oncession and any relevant
context thereafter to inform our interpretation of the scope of coverage.

1095 The Shorter Oxford Dictionary (1993), p. 466.
1096 The Shorter Oxford Dictionary (1993), p. 1056.
1097 Japan's first written submission, para. 381.
1098 Chinese Taipei's first written submission, para. 391.
1099 European Communities' first written subm ission, para. 215 (referring to The Shorter Oxford
Dictionary (1993), p. 3667 (Exhibit EC-31)).
1100 European Communities' first written submission, para. 216.
1101 European Communities' response to Panel questions Nos. 23 and 89. Regarding the European
Communities' argument that the prevalence of a recording function may lead to the conclusion that a device is
not a "set top box", see United States' second written submission, para. 37.
1102 Merriam-Webster Online Dictionary (http://www.merriam-webster.com/dictionary/which).

7.859 The definition of the terms "communication" and "function" provided by Japan and Chinese
Taipei support the view that a communication func tion refers to the transmission or exchange of
information as a capability or operation of a set top box. Generally, the meaning of these terms are not
in dispute to the extent that the parties agree that communication is through access to the Internet and
is interactive as opposed to unidirectional (these aspects are discussed in further detail in below).
7.860 Although the Panel agrees that the narrative d escription covers set top boxes which have a
communication function in addition to other functi ons, we would note that the concession does not
cover all multifunction products wh ich may incorporate in them a set top box with a communication
function. For a product to be covered by the conc ession it must be a "set top box", an apparatus or
device that processes an incoming signal from an external signal source in a manner that can be
presented on a display unit, such as a video monitor or television set. This apparatus need not be
designed to be placed on top of the display un it, and may handle one or several functionalities,
including: receiving and decoding television broadcast s, whether from a satellite, cable or Internet
source; converting digital TV br oadcasts to function on older an alogue TV sets; enabling two-way
interactive connectivity with digita l cable television broadcasts or via the Internet; or even recording
of digital video content. Therefore, if through the inclusion of additional features or incorporating it
into another product, an apparatus may no longer be described as, in essence, a "set top box which
ha[s] a communication function" it would not be covered by the concession.
7.861 Accordingly, based on our preliminary assessment of the terms "set top boxes which have a
communication function", we conclude that the term s "which have" in isolation do not necessarily
limit the breadth of coverage of the concession to set top boxes which only have a communication
function. However, we also find that the coverage of the concession was not intended to extend to
devices which have set top boxes incorporated into th em along with other functions in a way that they
may no longer be described as, in essence, a "set top box which ha[s] a communication function". In
other words, we determined that the concession covers set top boxes which have a communication
function, but not necessarily only a communication function. In addition, the Panel notes that while
"which have" does not necessarily imply an exclusive functionality, it is clear that the drafters chose
to emphasize functionality, and a communication func tion in particular, in defining this narrative
product description. We will return to this below.
1103 Before addressing the words that appear after
the colon, we address briefly the relevance of the use of a colon in the concession.
The relevance of the colon to an understanding of the terms in the concession
Arguments of the parties
7.862 Japan and Chinese Taipei consider the relevance of the u se of the colon in their assessment
of the ordinary meaning of the concession. In pa rticular, Japan argues that a device having the three
characteristics appearing after the colon is a set top box with a communication function. 1104 Chinese
Taipei argues that the colon "breaks the sentence" into two parts, wherein the product is identified
before the colon, and "a type of device (STB) th at is able to perform a communication function is
described" after the colon. In other words, acco rding to Chinese Taipei, the terms after the colon
merely provide for an example of a set top box which has a communication function.
7.863 The European Communities argues that the use of a colon divides the text into two parts:
"Set top boxes which have a communication function", and "a microprocessor-based device
incorporating a modem for gaining access to the Internet, and having a function of interactive

1103 See paragraph 7.883 et seq. below.
1104 Japan's first written submission, para. 373.

information exchange". In its view, the text whic h follows after the colon is used to identify or
explain the text before the colon, which requires not reading the two parts in absolute separation.
1105
Consideration by the Panel
7.864 The Oxford Guide to English Usage explains that one function of a colon is to "[l]ink[] two
grammatically complete clauses, but mark[] a step forward, from introduction to main theme, from
cause to effect, or from premise to conclusion".1106
7.865 It is unquestionable that the colon provides a di vision between the antecedent text "Set top
boxes which have a communication function", and that which follows it. A "link" or relationship
between these clauses is implicit since the full text constitutes the concession at issue. Thus, the terms
before the colon cannot be understood in isolatio n from the rest. Rather, all the terms together
determine the concession. The text following th e colon appears to inform and expand upon the
description provided by the antecedent text "Set top boxes which have a communication function".
Such a set top box is "microprocessor-based", and further "incorporat[es] a modem for gaining access
to the Internet, and [has] a function of interactiv e information exchange". What remains is to
determine the ordinary meaning of "a micropr ocessor-based device incorporating a modem for
gaining access to the Internet, and having a function of interactive information exchange", which
informs the meaning of "Set top boxes which have a communication function".
Textual analysis of the phrase "a microprocessor-based device incorporating a
modem for gaining access to the Internet, and having a function of interactive
information exchange"
7.866 The parties' arguments centre on the significance of "incorporating a modem", the description
"for gaining access to the Internet" and the releva nce of "interactive information exchange". The
United States and Japan define the term "microprocessor" as "[a]n electronic circuit, usually on a
single chip, which performs arithmetic, logic and cont rol operations, with the assistance of internal
memory".1107 However, they do not consider the language "a microprocessor-based device" to restrict
the broad scope of the meaning of the concession. 1108 T h e European Communities has not
commented on the significance of these terms for inte rpretation of the overall concession. The parties
do not dispute that the apparatus at issue are "mic roprocessor-based" and neither does the Panel. Set
top boxes falling under the concession must thus be "microprocessor-based". The Panel will now
consider the remaining terms, in particular those highlighted by the parties.
The terms "incorporating a modem"
Arguments of the parties
7.867 The complainants define "incorporate" as "1. combine or unite into one body or uniform
substance; mix together. 2. Put (one thing) in or into another to form one whole; include, absorb." 1109
They argue that, in the context of the definition of set top box, "incorporating" signifies that the

1106 The Oxford Guide to English Usage , Oxford University Press, 2d edition, 1994, p. 237. In
addition, The Oxford Guide to English Usage explains that a colon may also be used to introduce a list of items
or otherwise to introduce speech or a quotation in an "especially formal and emphatic way". (p. 237).
1107 United States' first written submission, para. 94 (Exhibit US-63); Japan's first written submission,
paras. 379-380 (referring to Newton's Telecom Dictionary (10th ed. 1996), p. 731 (Exhibit JPN-11)).
1108 Japan's first written submission, paras. 379-380.
1109 The Shorter Oxford Dictionary (1993), p. 1342.

device must itself contain a modem.
1110 Japan notes the use of the term "incorporating" in other
provisions of the HS1111, and argues that these examples confirm that the term "incorporating" is used
to mean that "something is included or mounted in internal space of a frame or a base in a housing of
a machine, to be fitted together to form a whole".1112
7.868 The European Communities agrees that "incorporating" means that a modem must be
included in the same housing. 1113 Based on this definition, the Eu ropean Communities argues that set
top boxes that cannot connect to the Internet wit hout assistance from an external modem, do not meet
the requirement of incorporating a modem for gaini ng access to the Internet and providing interactive
information exchange.1114
7.869 With respect to the term "modem" the complainants argue that it should be interpreted
broadly to include a wide array of technologies that en able a set top box to gain access to the internet.
The complainants refer to the following definitions of the term "modem":
Source Referred to: Definition of "modem"
IEEE Standard Dictionary of
Electrical and Electronics
Terms (6th ed. 1996), p. 6601115
"[a] contraction of MOdulator-DEModulator, an equipment that
connects data terminal equipment to a communication line"
Newton's Telecom Dictionary
(2004, 20th ed.), p. 5321116
"The term 'modem' also is applied (and correctly so, in the purely
technical sense) to ISDN TAs (Terminal Adapters), ADSL TUs
(Terminating Units), line drivers and short-haul modems"
The Shorter Oxford Dictionary
(1993), p. 13421117
"A combined modulator and demodulator, used esp. to connect a
computer to a telephone line, for converting digital electrical
signals to analogue or audio one and vice versa."

7.870 Based on these definitions, the complainants ar gue that the term "modem" does not require
that a device perform digital-to-analogue signal conversion via the sending and receiving of audible
tones transferred over telephone lines.
1118 Neither must a device enable any form of "direct" access to
an Internet Service Provider ("ISP"), Internet Exchange ("IX") or Network Access Point ("NAP" or

1110 Complainants' responses to Panel question No. 76; Chinese Taipei's first written submission,
paras. 410-415.
1111 For example, Japan refers to the concessions "Indicator panels incorporating liquid crystal devices
(LCD) or light emitting diodes (LED)" in HS code 8531 20, "Wrist-watches, electrically operated, whether or
not incorporating a stop-watch facility" in HS heading 9102 10 and the reference "This Chapter does not cover:
(g) Pumps incorporating measuring devices, of heading 84.13…" in Note 1 to Chapter 90 of the HS. (Japan's
response to Panel question No. 76).
1112 Japan's response to Panel question No. 76.
1113 European Communities' response to Panel question No. 76.
1114 European Communities' response to Panel question No. 73.
1115 United States' first written submission, para. 10 0, fn. 145 (Exhibit US-67); Japan's first written
submission, para. 390, fn. 180 (Exhibit JPN-11); Chinese Taipei's first written submission, para. 418.
1116 Japan's first written submission, para. 390, fn. 181; Chinese Taipei's first written submission,
para. 419, fn. 212.
1117 Chinese Taipei's first written submission, para. 410.
1118 United States' comments on European Communities' response to Panel question Nos. 151, 152, and
153.

"peering point"), in order to qualify as a "modem" within the concession.
1119 Chinese Taipei argues
that the term "modem" is a generic term used to describe an apparatus that accesses and interfaces
with the Internet. 1120 Japan and Chinese Taipei argue that th e use of the words "used esp." in the
Shorter Oxford Dictionary definition of modem above, demonstrates that the definition is not "self-
restrictive", and that the reference "connect a computer to a telephone line" is an example only. 1121
7.871 The United States and Japan define "modulate" as "to convert voice or data signal for
transmission over a communications network" 1122 and "demodulate" as "to receive signals transmitted
over a communications computer; and to convert them into electrical pulses that can serve as inputs to
a computer system". 1123 The United States and Japan further define "pulse modulation" as "[t]he
deployment of high-speed networks such as the In tegrated Service Digital Network (ISDN) in many
parts of the world has also relied heavily on PCM technology". 1124 The complainants argue that
dictionaries recognize that an array of technologies, including specifically those based on ISDN, and
LAN, as well as digital-to-analogue telephone-line b ased modems and cable modems were available
for gaining access to the Internet at the time the ITA was negotiated.1125 The United States argues that
the fact that ISDN technology existe d at the time of the concession, for instance, supports the view
that the concession's coverage was intended to be br oad. Otherwise, the United States argues, the text
of the concession would have been drafted to reflect a limitation to a certain type of modem.1126
7.872 The European Communities defines a "modem" as "a combined modulator and
demodulator, used esp. to connect a computer to a telephone line, for converting digital electrical
signals to analogue or audio ones and vice versa". 1127 The European Communities acknowledges that
technologies other than digital-to-analogue tele phone-based modems existed at the time of the
negotiations, including ISDN, which it submits wa s developed in the mid-1970s through the 1990s,
and Asymmetrical Digital Subscriber Line ("AD SL") technology, which it submits, was developed in

1119 United States' second written submission, paras. 51 and 54; United States' comments on European
Communities' response to Panel question Nos. 149 and 150. The United States refers to the following sources:
Jonathan E. Nuechterlein & Philip J. Weiser, Digital Crossroads: American Telecommunications Policy in the
Internet Age 131-32 (2005) (Exhibit US-126); Newton's Telecom Dictionary 525, 629, 708 (24th Ed. 2008)
(Exhibit US-127).
1120 Chinese Taipei's first written submission, para. 420.
1121 Japan's second written submission, para. 218; Chinese Taipei's second written submission,
para. 239.
1122 United States' first written submission, para. 101, fn. 147; Japan's first written submission, para.
391, fn. 182 (both citing the IEEE Standard Dictionary of Electrical and Electronics Terms (6th ed. 1996), p.
703 and IEEE 100: The Authoritative Dictionary of IEEE Standard Terms (2000), p. 703). (Exhibit US-70)
(Exhibit JPN-11).
1123 United States' first written submission para. 101, fn. 147 (referring to IEEE Standard Dictionary of
Electrical and Electronics Terms (6th ed. 1996), p. 270 (Exhibit US-70)); Japan's first written submission,
para. 391, fn. 182 (referring to IEEE 100: The Authoritative Dictionary of IEEE Standard Terms (2000), p. 287.
(Exhibit JPN-11)).
1124 United States' first written submission, para. 101 , fn. 147 (referring to Hermann J. Helgert,
AccessScience@McGraw-Hill, http://www.accessscience. com (Exhibit US-71)); Japan's first written
submission, para. 391, fn. 182 (referring to McGraw Hill Encyclopaedia of Science and Technology, 5 th ed.
(Exhibit JPN-11)).
1125 Complainants' response to Panel question No. 70; see, e.g., Exhibits US-67-68, US-72.
1126 United States' second written submission, para. 55.
1127 European Communities' first oral statement, para. 44 (referring to the Shorter Oxford Dictionary
(1993), p. 1803 (Exhibit EC-31)).

1989 and allows for transfer of data over telephone lines at frequencies different from those used by
telephone voice calls, allowing for simultaneous voice and data transfer.
1128
7.873 The European Communities argues that modems must fulfil two conditions to be properly
considered as a "modem": first, the apparatus h as to perform digital-to-analogue modulation and
demodulation, and second, modulation must occu r for the purposes of "direct" transmission and
communication with the Internet. The European Communities submits that a "direct" connection to
the Internet is effectuated through the server of th e relevant Internet Service Provider ("ISP") to the
Internet.1129 The European Communities argues that digital-to-analogue telephone-based modems and
cable modems fulfil both conditions. The European Communities submits that cable modems provide
a direct connection 1130 and perform digital-to-analogue modul ation and reverse demodulation similar
to traditional modems, albeit on different non-tele phone networks and a hi gher frequency without
audible tone conversion.1131 But, in its view, devices based on ISDN, WLAN or Ethernet technology
do not meet these conditions and thus do not qualify as "modems" under the concession at issue.
7.874 The European Communities submits that there is no basis in the terms of the concession to
conclude that negotiators relied on highly technical terms, such as "pulse code modulation" or "pulse
amplitude modulation" to either include or exclude products from the concession. Rather it considers
the common understanding of the term "modem" was relied on. 1132 The European Communities
argues that in other aspects, Attachment B relied on hi ghly technical and specific descriptions if they
wanted to ensure that a particular product was covered.1133
7.875 Additionally, the European Communities recalls statements by the United States as a
complainant in the dispute EC – Computer Equipment , which, it argues, coincided "exactly" with the
time of the negotiation and conclusion of the ITA. 1134 The European Communities submits that the
United States argued factually that LANs, principally including Ethernet, Token Ring and fibre
distributed data interface technologies, were expressly not "modems".
1135

1128 European Communities' response to Panel question No. 70 (referring to
http://www.iptegrity.com/index/php?option=com_content&task=view&id=30&Itemid=42 (Exhibit EC-81)).
1129 European Communities' response to Panel question No. 153; European Communities comments on
complainants' response to Panel question No. 153.
1130 European Communities' response to Panel question Nos. 149 and 150.
1131 European Communities' comments on complainants' responses to Panel question No. 150.
1132 European Communities' second written submission, paras. 231-232.
1133 European Communities' second written submission, paras. 233-234.
1134 European Communities' second oral statement, para. 73 (referring to United States' first written
submission in that dispute, paras. 28-29 and to the United States second written submission in that case,
para. 31).
1135 European Communities' second oral statement, para. 75 (referring to United States' first written
submission in that dispute, paras. 28-29 and to the United States' second written submission in that case,
para. 31. In particular, the European Communities cites the following statement by the United States in that
dispute :
"The EC mistakenly includes 'multiplexers' and 'modems' in its description of LAN
equipment, suggesting that these, too, are LAN products, which they are not. 'Modems' are
combined modulators-demodulators, which operate to convert a signal in order to achieve
compatibility in a telecommunications environment. Modems are not LAN equipment, and,
indeed, have historically been classified and been accorded tariff treatment as
telecommunications apparatus by the EC and other U.S. trading partners".

United States second written submission in that case, para. 31.

Consideration by the Panel
7.876 The parties agree that the term "incorporati ng" in the concession means that a set top box
must physically contain a "modem" in order to fall w ithin the scope of the concession. The definition
of incorporate – "combine or unite into one body"
1136 – supports this view. The heart of the parties'
disagreement, however, arises from the meaning of "modem" in the concession. The complainants
argue that ISDN, WLAN or Ethernet devices are such modems allowing access to the Internet and
that set top boxes incorporating such in-built devi ces thus fall within the concession. The European
Communities, however, disagrees arguing that the term "modem" only covers products that fit within
the common understanding of the term at the time of the ITA and that modems must directly connect
to the Internet and perform digital-to-analogue modulation and reverse demodulation to satisfy the
terms of the concession. Thus, the issue between the parties concerns, not the meaning of
incorporating – which the parties agree on - but the meaning of "modem" as it appears in the
concession.
7.877 The range of definitions discussed by the parties provide that the term "modem" is "a
contraction of "Modulator-Demodulator", and is used to connect "data terminal equipment" to a
"communication line".1137 The Shorter Oxford states that a "modem" is used especially to connect a
computer to a telephone line, and converts digital signals to analogue ones. 1138 (emphasis added). The
European Communities considers this latter definition provides support for its contention that the term
"modem" is limited to those devices that provide di gital-to-analogue signal co nversion, in particular
via a telephone line. The complainants consider that the notion of "used esp." indicates that a device
achieving a connection over a telephone line is only an example of a modem, allowing for other types
of devices. The complainants have cited at least one other definition indicating that the term "modem"
may refer to devices in addition to those handling digital-to-analogue conversion, for instance an
ISDN terminal adapter device (i.e., an ISDN modem) or an Asymmetric Digital Subscriber Line
("ADSL") terminating unit.1139
7.878 These definitions have evolved over time and refl ect that the term "modem" is not limited in
its usage to refer to a particular device or equipm ent that converts digital to analogue signals over a
standard telephone line. The ordinary usage of th e term "modem" expanded with the advent of newer
technologies developed to transfer data over a comm unication line. In this respect, a telephone line-
based modulator and demodulator that converted digi tal to analogue signals represented an early type
of "modem". However, evidence provided by th e complainants, including the aforementioned
dictionary definitions, indicates that the term "modem" has been used in referring to other devices that
provided modulation and demodulatio n over different mediums and also potentially without digital-
to-analogue signal conversion. For instance, Newton's Telecom Dictionary notes that the term
"modem" is applicable to refer to ISDN termin al adapters (ISDN modems), which are equipment
responsible for providing digital signal transfer over a special type of digital telephone line. 1140
Evidence provided by the European Communities show s that terminal adapters used with ISDN

1136 The Shorter Oxford (1993), p. 1342.
1137 IEEE Standard Dictionary of Electrical and Electronics Terms (6 th ed. 1996), p. 660 (Exhibit
US-67).
1138 The Shorter Oxford (1993), p. 1342.
1139 Newton's Telecom Dictionary (2004, 20 th ed.), pp. 532; see also Dictionary of Business Terms
(3rd ed.).
1140 Newton' Telecom Dictionary (2004, 20th ed.), pp. 532; see also Dictionary of Business Terms
(3rd ed.).

service are sometimes called modems.
1141 In addition, the European Communities concedes (and the
text of the amendment to the CNEN 2008/C 112/03 reflect s) that the term "modem" is used to refer to
"cable modems" as well, which are in several ways technologically distinct from telephone line-based
modems, in terms of the medium used, frequency range and other parameters.1142
7.879 It bears noting that the European Commun ities acknowledges that alternate technologies,
including ISDN and ADSL either existed or were in development in advance of the conclusion of ITA
negotiations, though it does not concede that the term "modem" is applicable to devices that operate
based on these technologies.1143
7.880 Given the foregoing, the plain meaning of the term "modem" can include devices other than
those that convert a digital signal to analogue fo r purposes of information transfer over a telephone
line. We note the European Communities' argume nt that for a device to be a "modem" it must
provide for a direct connection to an ISP (Internet Service Provider). However, we see no basis for
this conclusion in the plain meaning of the term modem. We will however, consider whether the
remaining terms of the concession further inform our understanding of the terms "incorporating a
modem". In particular we will analyse whether the modifying phrase "for gaining access to the
Internet" indicates that the direct connection to an ISP advocated by the European Communities is
indeed required. We will also examine whether the terms "and having a function of interactive
information exchange" also inform our understanding of the particular type of modem covered by the
concession.
The terms "for gaining access to the Intern et, and having a function of interactive
information exchange"
Arguments of the parties
7.881 The United States and Chinese Taipei argue that the language surrounding the term
"modem" as it appears in the Annex to the EC Schedule, in particular the terms "for gaining access to
the Internet", provides support that a "modem" is not limited to a device that is telephone line-based
and provides digital to analogue si gnal conversion. The United States and Chinese Taipei argue that
the term "communication function" is "broad", whic h supports the view that devices of any type that
enable a set top box to gain access to the Inte rnet may qualify, including devices based on ISDN,
WLAN or Ethernet technology.
1144 Chinese Taipei submits that what is fundamental or "essential" is
"that the device enables one to gain access to the Internet".1145 Chinese Taipei notes that the definition
of the term "gain" is "[o]btain, secure, or acquire (esp. something desired or advantageous)". The
complainants additionally argue that devices of an y type that enable a set top box to perform
interactive information exchange, in additi on to being microprocessor-based, fall under the
concession. Chinese Taipei submits that the term "i nteractive" means "1. Reciprocally active; acting
upon or influencing each other. 2. Designating or pert aining to a computer terminal or system that
allows a two-way flow of information between it and a user, responding to input from a user.";
"information" means "2. Communication of the knowle dge of some fact or occurrence. 3. Knowledge
or facts communicated about a particular subject, event, etc; intelligence, news."; and "exchange"

1141 See Exhibit EC-107, p. 5. The evidence provided by the European Communities indicates that a
"modem" is not needed for operation on an ISDN service, which requires use of a terminal adaptor, which it is
stated, "works much like a modem" (p. 15).
1142 Newton's Telecom Dictionary, (2004, 20th ed.), p. 191 (Exhibit US-72).
1143 See fn. 1127 above.
1144 United States' first written submission, para. 102; Chinese Taipei's first written submission,
para. 421.
1145 Chinese Taipei's first written submission, para. 421.

means, as a noun, "[t]he action, or an act, of reci procal giving and receiving", and as a verb, "Dispose
of by exchange or barter; relinquish (something)".
1146
7.882 The European Communities submits that interactivity with in the concession refers to a two-
way communication process, in the case of set-top b oxes between the service provider and the client
in which a message is related to the previous messages exchanged. This includes the ability to control
video on demand or pay-TV, and Internet connectivity. 1147 The European Communities submits that
an incorporated modem component enables interactive exchange.
Consideration by the Panel
7.883 The term "modem" is followed by the phrase "for gaining access to the Internet, and having a
function of interactive informati on exchange". The meaning of the term "gain" provided by the
complainants is not disputed by the Europ ean Communities, though the European Communities
rejects the view that the phrase supports a broad inte rpretation of the meaning of the term "modem".
In addition, the parties agree that the meaning of the term "interactive information exchange" refers to
a requirement of a two-way communication process or "two-way flow of information".1148
7.884 In our view, the phrase "for gaining access to the Internet, and having a function of interactive
information exchange" informs the nature of the "communication function" referred to in the language
of the concession preceding the colon. As we e xplained above, the plain words of the concession
define a particular class or category of set top box by reference to function, i.e., those which have a
communication function. Emphasis is placed on func tionality, and in particular, a communication
function. The language following the colon further informs the nature of this communication function.
Specifically, it is a communication function enabled through the ability to access the Internet in an
interactive manner. In our view, the incorporation of a modem fulfils the purpose of gaining Internet
access, which in turn may enable in teractive information exchange. In the Panel's view it is this
functionality that is central to the product defin ition at issue. There is no express specification as to
the nature or quality of Internet access, in terms of speed, transfer rate, or whether limited or full
access may be provided, in determining whether a device has a communication function.
7.885 In light of the broad meaning that is imparted by the concession, with its emphasis on a
"communication function", "gaining access to the In ternet" and enabling "interactive information
exchange", we are of the view that function should guide an assessment of the scope of the
concession, including the terms "incorporating a modem", as opposed to a narrow or detailed
assessment of the technical properti es of the internal components of a set top box. As the European
Communities argues
1149, the concession does not contain detailed or highly technical terms, and we do
not consider it appropriate to assume that drafters intended to include or exclude products based on
their technical design or makeup. The drafters have not, for example, elaborated extensively on the
specific technical nature of a "modem". Rather, as we state here, the concession in terms of its plain
meaning emphasizes function.
7.886 Accordingly, based on the plain meaning of the terms of the concession, we consider that, in
order to constitute a set top box covered by the c oncession, the device must be microprocessor-based;

1146 Chinese Taipei's first written submission, paras. 410-415, (referring to the Shorter Oxford
Dictionary (1993), p. 1811 (gain), p. 1406 (interactive), p. 1379 (information) and p. 886 (exchange).
1147 European Communities' response to Panel question No. 74.
1148 Chinese Taipei's first written submi ssion, paras. 410-415 (referring to the Shorter Oxford (1993),
p. 1406); European Communities' response to Panel question No. 74.
1149 European Communities' second written submission, paras. 231-232.

incorporate a "modem", and be capable of gainin g access to the Internet and handling two-way
interactivity or information exchange . We concluded that, in the cont ext of this concession, the term
"modem" should not be interpreted in an overly narro w or technical sense, but should be informed by
the clear emphasis on functionality. Accordingly, we found that devices that incorporate, or have built
in, technologies that enable them to access the Internet and provide interactive information exchange
may fall within the scope of the concession. While set top boxes available at the time of the ITA
negotiations may have primarily incorporated mode ms that operate directly over a telephone line and
provide digital-to-analogue si gnal conversion, both contempor ary and newer technologies are
commonplace today and enable similar or identical func tionality. In our view, to interpret otherwise,
would exclude from coverage many set top boxes wh ich, in fact, have a communication function of
the type contemplated in the concession.
7.887 In reaching our preliminary findings on the mean ing of the terms of the concession, we have
briefly addressed the issue of products available at the time of the negotiation of the concession for
"Set top boxes which have a communication function (...)".
1150 We will address further below the
European Communities' arguments concerning the state of technology at the time the concessions
were made, and its reference to what it asserts were descriptions of "set top boxes" used during the
negotiations.
Preliminary conclusions on the textual analysis of the STBCs narrative description
7.888 The Panel concludes that the term "set top box" generally describes an apparatus or device
that processes an incoming signal from an external signal source in a manner that can be presented on
a display unit, such as a video monitor or television set. This apparatus need not be designed to be
placed on top of the display unit and may handle on e or several functionalities. We recognized that,
through the inclusion of additional features or inco rporation into another product, an apparatus may
no longer be described as, in essence, a "set top box which ha[s] a communication function" and
would not be covered by the concession. We c oncluded further that the terms of the STBCs
concession in the Annex to the EC Schedule extends to any "set top box" that fulfils all of the
following requirements: is microprocessor-based; in corporates a "modem", and is capable of gaining
access to the Internet and handling two-way interac tivity or information ex change. We concluded
that, in the context of this concession, the term "modem" should not be interpreted in an overly
narrow or technical sense, but should be info rmed by the clear emphasis on functionality.
Accordingly, we found that devices that incorporate, or have built in, technologies that enable them to
access the Internet and provide interactive inform ation exchange may fall within the scope of the
concession. We will now consider the terms of the STBCs narrative product description in their
broader context.
(iii) The terms of the STBCs narrative description in their context
7.889 The complainants have argued that other narrative descrip tions that appear in the Annex to
the EC Schedule provide relevant context that fu rther supports their interpretation of the STBCs
narrative descriptions.
7.890 The European Communities has referred to other parts of its Schedule, including
descriptions in the tariff item numbers notified in connection with the FPDs narrative description, and
the concessions in other ITA participants' WTO Sc hedules in support of their interpretation of the
FPDs narrative description as it appears in the Annex to the EC Schedule.

1150 See paras. 7.871, 7.872 above.

Other parts of the EC Schedule as context

7.891 The Panel recalls as the Appellate Body explained in EC – Chicken Cuts , that context in a
Member's Schedule may include "other te rms" in the same heading or chapter. 1151 We will consider
the parties' arguments surrounding whether various elements found in the EC Schedule, including
other descriptions in the Annex to the EC Schedul e, inform interpretation of the STBCs narrative
description.
The descriptions in the tariff item numbers 8517 50 90, 8517 80 90, 8525 20 99 and
8528 12 91 in connection with the STBCs narrative description as context
Arguments of the parties
7.892 Japan and Chinese Taipei argue that the tariff lines appearing in the Annex to the EC
Schedule next to the description for STBCs – i.e., tariff item numbers 8517 50 90, 8517 80 90,
8525 20 99 and 8528 12 91 – support their interp retation of the concession based on the ordinary
meaning of the terms. While considering that these codes do not determine the scope of the
concession at issue, Japan and Chinese Taipei submit that these codes provide relevant context to the
extent that they indicate where the European Communities viewed ST BCs were classified at the time
of implementation.1152
7.893 Japan and Chinese Taipei note that HS1996 headin g 8517 covers "[e]lectrical apparatus for
line telephony or line telegraphy, including line telephone sets with cordless handsets and
telecommunication apparatus for carrier-current line systems or for digital line systems;
videophones". Further, they note that tariff item number 8517 50 90 covers "Other apparatus, for
carrier-current line systems or for digital line systems - Other" and that tariff item number 8517 80 90
covers "Other apparatus – Other". Japan and Chin ese Taipei argue that none of the terms of these
headings refer to the functions that may be performed by apparatuses classified under this heading and
subheadings, or expressly or implicitly limit the func tions of products classified under them to one or
more functions. Japan and Chinese Taipei also argue that HS1996 headin g 8517 and tariff item
numbers 8517 50 90 and 8517 80 90 do not refer to a sp ecific type of modem that would restrict the
scope of the concession.
1153
7.894 Japan and Chinese Taipei next note that HS 1996 heading 8525 cove rs "[t]ransmission
apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not
incorporating reception apparatus or sound recordin g or reproducing apparatus; television cameras;
still image video cameras and other video camera recorders". Further, they note that HS1996
subheading 8525 20 covers "trans mission apparatus incorporating reception apparatus". Japan and
Chinese Taipei argue that the terms of this heading, read together with the terms of heading 8525,
make clear that apparatuses covered by this h eading fall under it regardless of whether they
incorporate reception apparatus or sound recordin g or reproducing apparatus. Japan and Chinese
Taipei note that HS1996 heading 8525 is divided into four main subheadings. Since the terms
"recording" and "reproducing" are placed before the first semi-colon in the title of heading 8525,
Japan and Chinese Taipei argue that recording and re producing applies to apparatus for all four main
subheadings, including transmission apparatus for radio-telephony, radio-telegraphy, radio-
broadcasting or television. Thus, they argue th at devices falling under subheading 8525 20, including

1151 See Appellate Body Report on EC – Chicken Cuts, para. 193.
1152 Japan's first written submission, para. 394; Chinese Taipei's second written submission, para. 245.
1153 Japan's first written submission, paras. 398- 400; Chinese Taipei's first written submission,
paras. 426-431; Chinese Taipei's second oral statement, para. 52.

set top boxes which have a communication function, may perform more than one function and still be
classifiable therein. Moreover, they argue that the terms of HS1996 heading 8525 and subheading
8525 20 do not require that transmission apparatus incorporating reception apparatus also incorporate
a modem in order to be classifiable under that heading and subheading.
1154
7.895 Japan notes that HS1996 heading 8528 covers "[ r]eception apparatus for television, whether
or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus;
video monitors and video projectors". Thus, it ar gues, whether or not a device incorporates video
recording or reproduction is irrelevant for classifi cation under heading 8528. Furthermore, Japan
notes that HS1996 heading 8527 differentiates between "[o]ther radio-broadcast receivers, including
apparatus capable of receiving also radio-telephony or radio-telegraphy: − − 8527 31 "[c]ombined
with sound recording or re producing apparatus" and − − 8527 32 "[n]ot combined with sound
recording or reproducing apparatus but combined with a clock". Similarly, Japan notes HS1996
subheading 8528 12 relates to " − Reception apparatus for television, whether or not incorporating
radio-broadcast receivers or sound or vi deo recording or reproducing apparatus: − − Colour"
differentiates between "− − − Television projection equipment" and " − − − Apparatus incorporating a
video recorder or reproducer". In Japan's view, the separate treatment provided for in headings for
products able to perform different functions would seem to indicate that where no such differentiated
treatment exists, for instance in HS headings 8517 a nd 8525, apparatus able to perform more than one
function should not be treated differently.1155
7.896 Finally, Chinese Taipei submits that the f act that the European Communities did not
implement the full concession for "set top boxes wh ich have a communication function" by including
the same wording as appears in the Attachment B description – i.e., "a microprocessor-based device
incorporating a modem for gaining access to the internet, and having a function of interactive
information exchange" – supports the view that this description is "but only one type of [STBC]" that
is covered by the concession. 1156 However, despite the fact that the European Communities chose to
implement the language appearing in the Attachment B description at the end of 2000, via the
amendment of tariff item number 8528 21 91 to its Sc hedule, the overall contextual analysis is not
affected, because, it argues, tariff item number 8528 21 91 must necessarily include what had been
identified by the European Communities in the initial CN subheadings.
1157
7.897 The United States argues that the 2000 amendment to the EC Schedule – i.e., when the
European Communities added tariff item number 8528 12 91 against the STBCs narrative description
in the Annex to the EC Schedule - supports the view that the Eu ropean Communities agreed to a
commitment which comprises not only "Set top boxes which have a communication function", but
also "Set top boxes with a communication function" (emphasis added). Thus, it argues, this
modification contradicts the view that the phrase "whi ch have" must be read to limit the concession to
products that are solely comprised of the thr ee characteristics enumerat ed after the colon in
Attachment B.1158 The United States argues that the 2000 amendment establishes that STBCs with
tuners were covered by the original d escription in the Annex to the EC Schedule , because the

1154 Japan's first written submission, paras. 401-404; Japan's response to Panel question No. 82; Chinese
Taipei's first written submission , paras. 433-435; Chines e Taipei's response to Panel question No. 82; Chinese
Taipei's second oral statement, para. 52.
1155 Japan's first written submission, paras. 405-406.
1156 Chinese Taipei's first written submission, para. 436.
1157 Chinese Taipei's first written submission, para. 436.
1158 United States' second written submission, para. 39.

description of the tariff item number that was added (i.e., 8528 12 91) ac knowledges that products
with tuners are covered within the concession.
1159
7.898 The European Communities argues that the three codes notified in the Annex to the EC
Schedule in 1997 shed light on what sort of products we re "understood to be covered by the narrative
description".1160 In its view, tariff item numbers 8517 50 90, 8517 80 90, 8525 20 99 indicate a
common feature of these codes is that they all pe rtain to modem devices, i.e. CN heading 8517
concerns set top boxes incorporating wired mode ms, and heading 8525 concerns those incorporating
"wireless modems".1161 The European Communities notes that it did not include HS1996 subheadings
under 8521 which covers devices with recording functionality or initially include HS1996 heading
8528 concerning devices with tuners. In addition, the European Communities submits that its
inclusion of tariff item number 8528 12 91 in th e year 2000 "extended on its own motion the
treatment available so far only for products meeti ng exactly the ITA definition to another and well
defined category of products, even though these products were significantly different from those set
forth in the ITA definition and, legally speaking, not covered by it." 1162 I n t h e E u r o p e a n
Communities' view, set top boxes equipped with a tuner "were not initially supposed to be covered by
the ITA" because "the presence of a tuner chang es the nature of the apparatus and requires a
classification in heading 8528, even if the product additionally incorporates a modem or other
elements mentioned in narrative description."
1163 The European Communities submits it modified its
schedule to provide for the duty-free treatment for tariff item number 8528 12 91 in the year 2000
because the United States insisted that set top boxes with a tuner should receive ITA treatment. 1164
The European Communities submits further that sin ce only Japan and Turkey joined them "in such a
move", this means that "there was no broade r consensus among the ITA parties on this new
classification"1165 and such notification "cannot be interpre ted to mean that the ITA definition has
been relaxed or abandoned".1166
7.899 In response to the argument by the United St ates, the European Communities argues that its
concession only concerns "Set top boxes which have a communication function", and that the 2000
modification adding tariff item number 8528 12 91 do es not change the language of the concession.
The European Communities argues that no particular name or phrase used for describing and naming
a product in the context of adopting a classification measure can be considered relevant for
interpretation of the scope of a tariff concession formul ated at the WTO level. At most, the European
Communities considers that the STBCs narrative desc ription covered a specific category of products
that, in addition to meeting the other requirements of the definition, are capable of receiving television
signals.
1167
Consideration by the Panel
7.900 The STBCs narrative description appears in the Annex to the EC Schedule in connection with
four tariff item numbers 8517 50 90, 8517 80 90, 8525 20 99 and 8528 12 91. We recall from

1159 United States' second written submission, para. 41.
1160 European Communities' first written submission, para. 239.
1161 European Communities' first written submission, para. 241.
1162 European Communities' first written submission, para. 251.
1163 European Communities' first written submission, para. 248.
1164 European Communities' first written submission, para. 249.
1165 European Communities' first written submission, para. 250.
1166 European Communities' first written submission, para. 251.
1167 European Communities' second written submission, para. 80.

paragraph 7.420 that the European Communitie s notified the addition of tariff item number
8528 12 91 on 1 October 2000.
1168
7.901 the European Communities also notified the a ddition of this last code 8528 12 91 on 15
December 2000, to its Schedule under HS1996 heading 8528 12 as follows:
 Base rate Final rate Implementation
8528 12 91 ------- Apparatus with a microprocessor-based
device incorporating a modem for gaining
access to the Internet, and having a function of
interactive information exchange, capable of
receiving television si gnals ("Set-top boxes
with a communication function")
New line

0.0 2000

7.902 These changes took effect from 1 October 2000, and were certified on 19 March 2010.1169
7.903 Whether this action represents an autonomous liberalization effort, as the European
Communities contends 1170, or an indication of changes to classification of a product already
understood to be covered under the narrative descrip tion, we see no reason for excluding the tariff
item number that was added in 2000 for purposes of our contextual assessment of the meaning of the
concession.
7.904 The Panel recalls its preliminary finding that the STBCs narrative description determines the
scope of the concession, no matter where classified in the EC Schedule, and that the tariff item
numbers appearing alongside the product descriptions do not have the effect of controlling the scope
of coverage arising from the ordinary meaning of the product descriptions.
1171 Aside from their
reference in the Annex to the EC Schedule, these ta riff item numbers also appear elsewhere in the EC
Schedule together with their associated six-digit HS subheading descriptions.
7.905 As we noted above, the tariff item numbers address a different issue: they assist in the
implementation of the Attachment B-related commitments and to register the classification intended
by the European Communities with a view to assisting ITA participants in the discussions on the
classification divergences that were envisaged in pa ragraph 5 of the ITA Annex. This was necessary
because the approach taken with respect to HS headings that appear in Attachment A was not feasible
for other products. Due to the fact that ITA par ticipants notified different codes next to the
descriptions in many cases, we explained that re liance on interpretation of those codes would not
reflect the common intentions of participants and could run contrary to an assessment of the objective
meaning of the terms. We accordingly decline to consider them further.

1168 Specifically, the notification of that amendment reads in relevant part as follows:
"Consequently, the tariff references shown against product descriptions in Attachment B of
the ITA Schedule of the European Communities should be modified as follows:

Set-top boxes
: Replace by following reference: 8517.50.90 (uncha nged), 8517.80.90
(unchanged), 8525.20.99 (unchanged), 8528.12.91 (new)."

See G/MA/TAR/RS/74 (15 December 2000) (Exhibit US-26).
1169 See para. 7.29 above.
1170 European Communities' first written submission, para. 251.
1171 See para. 7.343 above. We confirmed our findings based inter alia on our contextual assessment of
the ITA, and consideration of the WTO schedules of other WTO participants.

7.906 While the Panel considers that the descriptions associated with the tariff item numbers do not
define the scope of the obligation, we neverthel ess note that the codes do not inform us whether
coverage extends to products that incorporate additional features, su ch as a hard drive, or products
that employ particular technologies to achieve Inte rnet connectivity. Were we to treat the codes as
dispositive, then one might conclude that the European Communities only undertook obligations for
products containing telephone-based modems due to the particular codes.
Other descriptions in the Annex to the EC Schedule in context
Arguments of the parties
7.907 Japan argues that other descriptions in the Annex to the EC Schedule reflect that the
concession for STBCs was not intended to be limited. Japan argues, where the drafters intended to
limit the function of the apparatus they included clear statements to this effect, such as in the
description for "computers" or "Network equipmen t". In the case of "computers", Japan emphasizes
the language "Machines performing a specific function other than data-processing, or incorporating or
working in conjunction with an automatic data-processing machine, and not ot herwise specified under
Attachment A or B , are not covered by this agreement." (emphasis added).
1172 In the description for
"Network equipments", Japan refers to the lang uage "Local Area Network (LAN) and Wide Area
Network (WAN) apparatus, including those products dedicated for use solely or principally to permit
the interconnection of automatic data-processing machines and units thereof for a network…"
(emphasis added).1173 Japan argues that the concession for STBCs does not include comparable words
of limitation and that there is thus no such limitation for the STBCs concession.1174
7.908 The European Communities argues that, overall, Attachment B was written "in rather
straightforward terms, not using any highly tec hnical language", a good example of which is the
description of "proprietary format storage devices" , which specifies that that product category also
includes "Bernoulli box, Syquest and Zipdrive cartridge storage units".1175 According to the European
Communities, while this language appears highly tec hnical "at first sight", it confirms that the
language that the negotiators used "was not a highly technical one and that when they wanted to
ensure that a particular product is covered, they di d not hesitate to use even its commercial name".
For instance, the European Communities argues that drafters could have made express reference to
technologies such as ISDN, WLAN or Ethernet had they intended from products that connect to the
Internet through these technologies to be covered.
1176 Or, drafters could have referred to a particular
standard (such as an IEEE standard) had it consid ered the technical standard of a professional
organization were relevant.1177
Consideration by the Panel
7.909 Japan and the European Communities refer to the following narrative descriptions in the
Annex to the EC Schedule as providing relevant c ontext to inform interpretation of the STBCs
narrative description.

1172 Japan's first written submission, para. 395.
1173 Japan's first written submission, para. 396.
1174 Japan's first written submission, para. 397.
1175 European Communities' second written submission, para. 234.
1176 European Communities' second written submission, para. 229.
1177 European Communities' second written submission, para. 233.

"Computers: automatic data-processing machines capable of 1) storing the processing
program or programs and at least the data immediately necessary for the execution of
the program; 2) being freely programmed in accordance with the requirements of the
user; 3) performing arithmetical computations specified by the user; and 4) executing,
without human intervention, a processing program which requires them to modify
their execution, by logical decision during the processing run.
The agreement covers such automatic da ta-processing machines whether or not they
are able to receive and process with the assistance of central processing unit
telephony signals, television signals, or other analogue or digitally processed audio or
video signals. Machines performing a specific function other than data-processing, or
incorporating or working in conjunction w ith an automatic data-processing machine,
and not otherwise specified under Attachment A or B, are not covered by this
agreement."
"Network equipment: Local Area Network (LAN) and Wide Area Network (WAN)
apparatus, including those products dedicated for use solely or principally to permit
the interconnection of automatic data-p rocessing machines and units thereof for a
network that is used primarily for the sh aring of resources such as central processor
units, data storage devices and input or out put units including adapters, hubs, in line
repeaters, converters, concentrators, br idges and routers, and printed circuit
assemblies for physical incorporation into automatic data-processing machines and
units thereof."
"Proprietary format storage devices including media therefor for automatic data-
processing machines, with or without removable media and whether magnetic, optical
or other technology, including Bernoulli Box, Syquest, or Zipdrive cartridge storage
units."
7.910 As is reflected in the descriptions above, th e product coverage in the Annex to the EC
Schedule is varied, including computers, but also network equipment, storage devices, and set top
boxes which have a communication function, among other products. In our view, divergences in the
language used in the various product descriptions, and the varying levels of specificity they contain,
diminishes the significance that can be drawn from comparisons and contrasts between the language
in various products descriptions.
7.911 We explained above that the inclusion of the list of narrative descriptions in Attachment B
reflects an approach different from the traditiona l approach of using the language of the HS.
Participants to the ITA agreed to eliminate duties on all products specified in Attachment B, whether
or not they are included in Attachment A. I nherent in this dual approach, ITA participants
consequently agreed to include language in descriptions in Attachment B that is not necessarily
language derived from the HS. Certain descriptions in Attachment B provide limited explanation of
the type of products covered (e.g. "Paging alert de vices, and parts thereof"), while other descriptions
provide detailed technical characteristics of the products covered (e.g. "monitors"
1178). In addition,
while some of them define the coverage in te rms of the "use" of the product (e.g. "electric

1178 "Monitors: display units of automatic data-processi ng machines with a cathode ray tube with a dot
screen pitch smaller than 0,4 mm not capable of receiving and processing television signals or other analogue or
digitally processed audio or video signals without assistance of a central processing unit of a computer as
defined in this agreement. The agreement does not, therefore, cover televisions, including high definition
televisions."

amplifiers"
1179), others descriptions identify types of products covered (e.g. "Proprietary format
storage devices"1180). While some relate to terms which are not found in the HS ("Flat panel display
devices"), some appear to borrow language from the HS (e.g. "computers" 1181), and at least one
description makes express reference to specific HS headings where the products appear in the HS
(i.e., "Plotters"1182) Moreover, certain descriptions incl uding the STBCs narrative description make
use of a colon or semicolon in the first part of the description. 1183 Finally, certain descriptions
expressly limit coverage, whereas other descriptions contain no such express limitation.
7.912 This lack of uniformity in the Attachment B product descriptions potentially arose from the
desire of participants to provide duty-free covera ge for products matching descriptions, but without
clear agreement as to the relevant headings for cl assification of those products. In our view, this
makes it difficult to extrapolate the terms from one Attachment B description to interpret another
Attachment B description.
7.913 As discussed in paragraph 7.888 above, we note the description for STBCs emphasizes the
function of the product, rather than, for example, an extensive technical description or focus on
specific technology. Such emphasis is clear from the language "which have a communication
function", that is informed by the phrase "for gain ing access to the Internet, and having a function of
interactive information exchange". The func tionality includes "access to the Internet" and
"interactive" or "two-way" information exchange. We determined the emphasis on functionality to be
primary to our interpretation, rather than, for example, a focus on technical properties, which were not
elaborated in the concession.
7.914 Similar to the STBCs narrative description, the description for "Computers" is also function-
oriented, enumerating the capabilities or functions of the device. Distinctly however, this description
indicates with certain precision devices that would qua lify ("machines whether or not they are able to
receive and process with the assistance of central processing unit telephony signals, television signals,
or other analogue or digitally processed audio or vide o signals"), but also those that would not qualify
("Machines performing a specific function other than data-processing, or incorporating or working in
conjunction with an automatic data-processing machine, and not otherwise specified under
Attachment A or B, are not covered by this agreement"). We are hesitant to imply restrictions into the
concession for STBCs that are not expressly provid ed for, as is the case with the "Computers"
concession.
7.915 We note that the descriptions for "Network E quipment" and "Proprietary format storage
devices (...)" provide detailed explanation of thei r coverage, specifying products that are to be
included and enumerating devices and components that are to be included in the concession. The
description for "Proprietary format storage devices (...)" enumerates an exemplary, though not
exclusive list of products that are to be covere d. The concession pursuant to the STBCs narrative
description in the EC Schedule appears to be rest ricted to a more limited category of products, as
opposed to a range of equipment.

1179 "Electric amplifiers when used as repeaters in line telephony products falling within this agreement,
and parts thereof." (emphasis added)
1180 "Proprietary format storage devices including media therefor for au tomatic data-processing
machines, with or without removable media and whether magnetic, optical or other technology, cartridge
storage units." (emphasis added)
1181 See Exhibit US-1.
1182 "Plotters whether input or output units of HS heading No 8471 or drawing or drafting machines of
HS heading No 9017." (emphasis added). See Exhibit US-1.
1183 The other three narrative descriptions in Attachment B making use of a semicolon are "computers",
"network equipment", and "monitors".

7.916 As a matter of treaty interpretation, we have focused on the ordinary meaning of the words
used in the concession for STBCs. As we have noted, the words used place a clear emphasis on
functionality. We note that while the negotiators used the term "modem", they did not go further and
enumerate precise modem or device technologies that are considered to fall within the concession, or
that are considered to fall outside the concession. Th is supports the Panel's view that the intention of
the drafters was to emphasize function (for example, gaining access to the internet) and not form (for
example, a particular kind of modem or device technology enabling access to the internet). Beyond
this, however, in the Panel's view the partic ular terms of surrounding concessions, which were
negotiated in different circumstances and in a di fferent factual context, and concern altogether
dissimilar products, do not greatly assist in interpreting the scope of the STBCs concession.
The WTO Schedules of other WTO Members as context

7.917 The European Communities argues that the Sc hedules of other ITA participants provide
relevant context to interpret the FPDs narrative description. 1184 The Panel recalls as the Appellate
Body explained in EC – Chicken Cuts , that other WTO Members' Schedules may provide relevant
context to interpret the terms in a particular Member's Schedule. 1185 We will thus consider the
European Communities' arguments concerning the HS subheadings that other ITA participants
notified in the Schedules when implementing thei r ITA commitments. The European Communities
refers to a table summarizing the classification up to HS subheading level (six digits) notified by ITA
participants based on modifications made via WTO document G/IT/2/Add.1 of 17 October 1997:1186
Classification of "set top boxes which have a communication function"
by ITA participants in 1997
Sub-heading Number of participants classifying
in that subheading Main parties to the dispute
8471.41 2 -
8471.90 1 -
8517.50 25 EC, TPKM, US
8517.80 12 EC, JA
8525.10 3 US
8525.20 14 EC, JA, TPKM
8528.12 3 US
8543.89 1 -

7.918 The European Communities submitted a second ta ble, based on an updated document by the
WTO Secretariat of 29 July 1999:1187
Classification of "set top boxes which have a communication function"
by ITA participants from 1997 to 1999
Sub-heading Number of participants classifying
in that subheading
Main parties to the dispute
8471.41 2 -
8471.90 1 -
8517.50 31 EC, TPKM, US
8517.80 14 EC, JA

1184 European Communities' first written submission, paras. 142-145.
1185 See Appellate Body Report on EC – Chicken Cuts, para. 193.
1186 WTO document G/IT/2/Add.1 (17 October 1997) (Exhibit EC-14).
1187 European Communities' first written submission, para. 246, which makes reference to WTO
document G/IT/2/Add.1/Rev.1 of 29 July 1999 (Exhibit EC-20).

Classification of "set top boxes which have a communication function"
by ITA participants from 1997 to 1999
Sub-heading Number of participants classifying
in that subheading
Main parties to the dispute
8525.10 3 US
8525.20 17 EC, JA, TPKM
8528.12 3 US
8543.89 1 -

Arguments of the parties
7.919 The European Communities argues that the information pr esented in the table indicates the
parties' understanding of what was covered by the product description for STBCs in 1997. While
recognizing divergences in the codes that were notified by ITA participants, the European
Communities submits that the "overwhelming ma jority" notified HS1996 subheadings 8517 50,
8517 80 and 8525 20, confirming agreement on the intended coverage of the STBCS narrative
description.1188 The European Communities also refers to a second table containing 1999 updated
information by the WTO Secretariat, which incorpor ates HS headings notified by participants that
joined the ITA following the issu ance of the original document. This later document further
incorporates change that had been implemented by th e participants as a result of rectifications or
modifications.1189
7.920 The complainants argue that the table summarizing the codes where the ITA participants
classified STBCs is irrelevant. In their view, the tabl e merely supports the view that at the time of the
ITA there was no uniform agreement on the relevant classification headings for STBCs which have a
communication function.1190 In any case, as illustrated by the table, some WTO Members listed "set-
top boxes which have a communication function" under HS1996 heading 8528 12.1191
Consideration by the Panel
7.921 The Panel recalls from paragraph 7.445 above that th e four tariff item numbers next to the
narrative descriptions in the EC Schedule do not li mit the concession. They only illustrate where the
European Communities considered relevant FPDs were classifiable at the time of implementation of
the ITA. Accordingly, we will only make a few poi nts regarding the table presented by the European
Communities.
7.922 The European Communities submitted as exhi bits two separate WTO Secretariat reports
which summarize the HS subheadings that were listed by ITA participants: the table above, describing
the situation in 1997, as well as a document assessi ng the practice of ITA parties between 1997 and
1999.1192 Both the WTO Secretariat reports and the tables submitted by the European Communities,

1188 European Communities' first written submission, paras. 244-245.
1189 See fn. 1187 above.
1190 United States' second written submission, para. 47; Japan's second written submission, para. 222;
Chinese Taipei's second written submission, paras. 249-250.
1191 Japan's response to Panel question No. 82; Chinese Taipei's response to Panel question No. 82.
1192 European Communities' first written submission, para. 243, 246 and fn. 156. These are document
G/IT/2/Add.1 (17 October 1997) (Exhibit EC-14) and document G/IT/2/Add.1/Rev.1 (29 July 1999) (Exhibit
EC-20).

however, wrongly mention that Japan notified HS head ings next to narrative product descriptions.
Japan's schedule, however, did not.
1193
7.923 In light of this error, the Panel conducted its own assessment of the information as presented
below:1194
HS
Subheading
(6 digit)
Number of
participants
notifying
that
subheading
There is at least one tariff line listed in the
Schedule of the following ITA participants:
8471 41 6 Costa Rica; Dominican Republic; Guatemala; Honduras; Nicaragua; El
Salvador
8471 50 1 China
8471 90 1 Indonesia
8517 50 40 Albania; Australia; Bahrain; Canada; China; Costa Rica; Croatia; Dominican
Republic; Egypt; El Salvador; European Communities; Georgia; Guatemala;
Honduras; Hong Kong, China; Iceland; India; Israel; Jordan; Korea; Kyrgyz
Rep.; Macao, China; Malaysia; Mauritius; Moldova; Nicaragua; New
Zealand; Norway; Oman; Peru; Philippines; Saudi Arabia; Chinese Taipei;
Singapore; Switzerland/Liechtenstein; Thailand; Turkey; UAE; United
States; Viet Nam
8517 80 13 Albania; Croatia; European Communities; Egypt; Georgia; Iceland; Jordan;
Kyrgyz Rep.; Macao, China; Moldova; New Zealand; Norway; Turkey
8525 10 11 Bahrain; Costa Rica; El Salvador; Honduras; Nicaragua; Oman; Peru; Saudi
Arabia; UAE; United States; Viet Nam
8525 20 15 Albania; Australia; Croatia; European Communities; Georgia; Iceland;
Kyrgyz Rep.; Macao, China; Moldova; New Zealand; Peru; Philippines;
Chinese Taipei; Turkey; Viet Nam
8528 12 9 European Communities; Iceland; Macao, China; Oman; Saudi Arabia;
Ukraine; UAE; United States; Viet Nam
8530 00 1 Bahrain
8543 89 1 Israel

7.924 This table demonstrates considerable diverg ence in the HS subheadings listed by ITA
participants next to the STBCs narrative descr iption. HS1996 subheading 8517 50, for instance,
appears in twice as many schedules as other subheadings. 1195 This subheading pertains to Electrical
apparatus for line telephony or line telegraphy, in cluding line telephone sets with cordless handsets
and telecommunication apparatus for carrier-current line systems or for digital line systems;
videophones. - Other apparatus, for carrier-current line systems or for digital line systems." However,
a number of Members declined to notify subheadings 8517 50, 8517 80 and 8525 20 next to the
STBCs narrative description in the corresponding section of their Schedule.

1193 See paragraph 7.432 above.
1194 The Panel followed the same methodology used by the WTO Secretariat in preparing this table. A
particular Member is listed next to those HS subheadings if that Member has listed at least one national tariff
line in its schedule that falls under that HS subheadi ng. The following table summa rizes the HS subheadings
listed by the relevant 43 Members in their schedules of concessions, but does not include information of the
schedules of those EC member States that are jointly re presented by the EC-27. These are: Bulgaria, Cyprus,
Czech Republic, Estonia, Latvia, Lithuania, Poland, Romania, Slovak Republic and Slovenia.
1195 Besides Japan, which did not assign any code to products in or for Attachment B, the Panel notes
that Indonesia and Ukraine did not list HS1996 subheading 8517 50 as relevant for STBCs in their schedules of
concessions.

7.925 In addition, other HS1996 subheadings that appeared more or less frequently in the schedules
of ITA participants include the following:
8517 80
: "Electrical apparatus for line telephony or line telegraphy, including line
telephone sets with cordless handsets and telecommunication apparatus for carrier-
current line systems or for digital line systems; videophones. - Other apparatus"
8525 10: "Transmission apparatus for radio- telephony, radio-telegraphy, radio-
broadcasting or television, whether or not incorporating reception apparatus or sound
recording or reproducing apparatus; television cameras; still image video cameras and
other video camera recorders. - Transmission apparatus"
8525 20: "Transmission apparatus for radio- telephony, radio-telegraphy, radio-
broadcasting or television, whether or not incorporating reception apparatus or sound
recording or reproducing apparatus; television cameras; still image video cameras and
other video camera recorders. - Transmission apparatus incorporating reception
apparatus."
8528 12 : "Reception apparatus for television, whether or not incorporating radio-
broadcast receivers or sound or video r ecording or reproducing apparatus; video
monitors and video projectors; - Reception apparatus for television, whether or not
incorporating radio-broadcast receivers or sound or video recording or reproducing
apparatus; - - Colour"
7.926 While a number of participants considered subh eading 8517 50 relevant to their classification
of products in connection with the STBCs narrative description, a noteworthy number of participants
considered HS subheading 8528 12 to be relevant to their classification of set top boxes.
(iv) Object and purpose
Arguments of the parties
7.927 We recall from our assessment of the partie s' arguments concerning object and purpose 1196,
that the complainants argued that a recognized object and purpose of the WTO Agreement and GATT
1994 is providing security and predictability in the reciprocal and mutually advantageous
arrangements directed to the substantial reduction of tariffs and barriers to trade.1197 In their view, the
objectives of security and predictability also require that concessions cover products even if those
products did not exist in that form at the time the concessions were granted as long as they comply
with the wording of the concessions concerned. 1198 The complainants also note that both the WTO
Agreement and the GATT 1994 recognize "expanding the pr oduction and trade in goods" as another
core object and purpose that is furthered by reciprocal reductions in tariffs.

1196 See paras. 7.537-7.549 above.
1197 Complainants' response to Panel question No. 1; Japan's first written submission, para. 172
(referring to paragraph 3 of the Preamble to the Marrakesh Agreement; Panel Report on China – Auto Parts ,
para. 7.460 and Appellate Body Report on EC – Chicken Cuts , paras. 243 and 288); Japan's second written
submission, paras. 409-410; Chinese Taipei's first writte n submission, paras. 144-145; Chinese Taipei's second
written submission, para. 282.
1198 Japan's first written submission, para. 177; Chinese Taipei's first written submission, paras. 289-
290 and 627-630; Chinese Taipei's second written submission, para. 444.

7.928 The European Communities considers the complainants' in terpretative approach overbroad
and that it compromises the legal certainty and pred ictability of tariff concessions, creating the risk
that Members will become reluctant to pursue the ITA liberalization process.
 1199
Consideration by the Panel
7.929 The Panel concluded that the relevant object and pur pose with respect to this dispute is the
general object and purpose of the WTO Agreement and the GATT 1994 as a whole. We concluded
that the ITA should not be considered the basis for determining the object and purpose of the WTO
Agreement and the GATT 1994.
7.930 The relevant object and purpose for the purposes of this dispute is to provide security and
predictability in the reciprocal and mutually adva ntageous concessions negotiated by parties for the
reduction of tariffs and other barriers to trade. In the Panel's view, the interpretation of the STBCs
narrative description described above is fully consistent with this object and purpose.
(v) Subsequent practice (Article 31(3)(b) of the Vienna Convention)
Arguments of the parties
7.931 The European Communities argues that the codes notified by ITA participants between
1997 and 1999, as referred to in WTO Document G/IT/2/Add.1/Rev.1 of 29 July 1999 1200, provides
information on classification divergences, including t hose of new participants that joined the ITA
since 1997. The European Communities argues that the codes notified by ITA participants at the time
of implementation reveal that the "overwhelmi ng majority of ITA participants" shared its
understanding of the product covera ge of the concession for STBCs at the time of implementation of
the concession. 1201 The European Communities provides th e following table to summarize the
information:1202
Classification of "Set top boxes which have a communication function"
by ITA participants from 1997 to 1999
Sub-heading Number of participants
classifying in that subheading Main parties to the dispute
8471.41 2 -
8471.90 1 -
8517.50 31 EC, TPKM, US
8517.80 14 EC, JA
8525.10 3 US
8525.20 17 EC, JA, TPKM
8528.12 3 US
8543.89 1 -

7.932 Specifically, the European Communities submits that the "overwhelming majority of ITA
participants" identified codes 8517 50; 8517 80 and 8525 20 as the relevant codes for STBCs. These
are also the codes that the Eu ropean Communities notified in the Annex to its Schedule, i.e.,

1199 European Communities' first written submission, paras. 170-172.
1200 Exhibit EC-20.
1201 European Communities' first written submission, para. 245.
1202 European Communities' first written submission, para. 246 (referring to G/IT/2/Add.1/Rev. 1
(Exhibit EC-20)).

8517 50 90; 8517 80 90 and 8525 20 99. The European Communities argues that the data provides a
"very valuable indication" of what the ITA parties to the ITA understood in 1997 (i.e., when they
notified their amended schedules of commitments to the WTO) under the product description "set top
boxes which have a communication function".
1203 Specifically, the European Communities indicates
that codes 8517 50; 8517 80 and 8525 20 all pertai n to modem devices. Thus, it argues that the
notification of these tariff lines reflects an unde rstanding that the narrative description in the
concession was only intended to cover certain types of set top boxes. that access the Internet via a
modem connected through a telephone line but, not set top boxes which function as recorders or those
that incorporate a tuner. The European Co mmunities argues that, had Members intended to
incorporate those with recording or tuner capabilities, then they would have notified codes of heading
8521 or 8528.1204
7.933 The complainants consider that the notified codes mere ly illustrate where the products were
classified at that time. Thus, they argue that the absence of particular codes should not be interpreted
to mean that only certain categories of set top boxes are covered under the concession. 1205 Japan and
Chinese Taipei submit that certain Members notif ied heading 8525, which contradicts the assertion
that Members held a consistent view on the coverage of the STBCs concession.1206
Consideration by the Panel
7.934 We recall from paragraphs 7.557-7.561, that "subsequent practice" is the "...'concordant,
common and consistent' sequence of acts or pr onouncements which is sufficient to establish a
discernible pattern implying the agreement of the pa rties [to a treaty] regarding its interpretation" 1207.
It is an "important element" in treaty interp retation that provides "objective evidence of the
understanding of the parties as to the meaning of the treaty". 1208 Inconsistent classification practice
must be disregarded. 1209 In determining what constitutes "c ommon" and "concordant" practice, we
noted that it would be difficult to establish a "concordant, common and discernible pattern" on the
basis of acts or pronouncements of one, or very few parties to a multilateral treaty, such as the WTO
Agreement.1210
7.935 Accordingly, the Panel will consider whether there is evidence of "consistent, common and
concordant" classification practice on the part of the ITA participants and with respect to the set top
box products at issue since the conclusion of the ITA until present.
7.936 As mentioned in paragraph 7.563 above, we do not consider it appropriate to assess
information in WTO document G/IT/2/Add.1/Rev.1 (29 July 1999), either alone or in combination
with information from WTO document G/IT/2/Add.1 of 17 October 1997 1211 as "subsequent practice"
because it is unclear whether the tables broadly re flect the practice of ITA participants classifying
STBCs. That document indicates that the "table was prepared from participants' schedules of
commitments" and that it incorporates "any chan ges that were im plemented by participants as

1203 European Communities' first written submission, paras. 244-245.
1204 European Communities' first written submission, para. 241.
1205 Complainants' response to Panel question No. 82.
1206 Japan's and Chinese Taipei's responses to Panel question No. 82.
1207 Appellate Body Report on Japan – Alcoholic Beverages II, para. 106.
1208 Appellate Body Report on EC – Chicken Cuts, para. 255 (citing Yearbook of the International Law
Commission (1966), Vol. II, page 219, para. (6)); see also Panel Report on China – Auto Parts, para. 7.702.
1209 Appellate Body Report on EC – Computer Equipment, para. 95.
1210 Appellate Body Report on EC – Chicken Cuts, para. 259.
1211 WTO document G/IT/2/Add.1 of 17 October 1997 (Exhibit EC-14) see para. 7.917 above.

rectifications or modifications".
1212 Since we cannot confirm the nature of participants' practice solely
on the basis of the codes appearing in the table, and since we have considered the identical data in our
assessment of other Members' Schedules as relevant "context", we abstain from elaborating further in
this Section on the European Communities' table or the document that forms the basis of the table.
7.937 Apart from information appearing in the table, the European Communities has not identified
evidence of the practice of other Members. The comp lainants allege that the practice of the European
Communities has been inconsistent, in particular beginning in the years 2005-2006. Without further
evidence to assess the practice among at least those Members that participate in the export and import
of set top boxes, we lack sufficient evidence of th e existence of subsequent practice to inform its
interpretation.
(vi) Other arguments – Surrounding circumstances
7.938 Apart from an analysis of the text of the concession in the EC Schedule, the European
Communities argues that the Panel should consider the "surrounding circumstances" to inform its
interpretation of the treaty terms. In particular, the European Communities argues that the type of set
top boxes that were available in 1996 at the time of negotiations, and the descriptions used during
negotiations of the concession establish what was the intended product coverage.1213
7.939 The complainants argue that the European Co mmunities' allegations concerning the type of
set top boxes available and descriptions allegedly used in the context of ITA negotiations can at most
qualify as "supplementary means" of interpretation pu rsuant to Article 32 of the Vienna Convention.
The United States argues that the European Comm unities has not demonstrated that the meaning
resulting from Article 31 is obscure or manifestly absurd or unreasonable or that the documents
confirm the meaning resulting from the applicati on of an Article 31 analysis under the Vienna
Convention in this case.1214
7.940 In raising its arguments concerning the surrounding circumstances, the European
Communities refers to the following citation by the Appellate Body in EC – Chicken Cuts:1215
"The ordinary meaning of a treaty term must be ascertained according to the
particular circumstances of each case. Im portantly, the ordinary meaning of a treaty
term must be seen in the light of the intention of the parties 'as expressed in the words
used by them against the light of the surrounding circumstances'".1216
7.941 In that case, the Appellate Body evaluated the Panel's decision to consider other elements in
addition to dictionary definitions, to complete its ordinary meaning analysis of the terms under
review.1217 The Appellate Body found no flaws in the Pa nel's decision to consider other elements to
complement its analysis of the dictionary definiti ons, noting that interpretation pursuant to Article 31

1212 WTO document G/IT/2/Add.1/Rev.1, paras. 1 and 2 (Exhibit EC-20).
1213 European Communities' first written submission, paras. 219-236 and, in particular, para. 235.
1214 United States' second written submission, para. 45.
1215 European Communities' first written submission, para . 219 (noting that this excerpt derives from a
book by Lord McNair, The Law of Treaties (Oxford Clarendon Press, 1961), p. 365 (Exhibit EC-33)).
1216 Appellate Body Report on EC – Chicken Cuts, para. 175.
1217 Appellate Body Report on EC – Chicken Cuts , para. 176. These elements, described as "factual
context" included "products covered by the concession contained in heading 02.10", "flavour, texture, [and]
other physical properties" of the products falling under heading 02.10, and "preservation" when interpreting the
term "salted" as it appears in heading 02.10.

of the Vienna Convention is a "holistic exercise ", and that such elements could otherwise be
considered as "context" if not considered under "ordinary meaning".
7.942 One issue that arises is what relevance and wei ght should be given to the materials that the
European Communities submitted. As a second matter, we recall that the party that asserts a particular
fact must be able to prove it. In this latter resp ect, in asserting that a certain factual situation existed
at the time of the negotiations, and that this shoul d inform our interpretation, the burden is on the
European Communities to provide clear and objective evidence not just that such a factual situation
did indeed exist, but also the linkage between th is factual situation and the actual text of the
concession. In other words, the European Communiti es must be able to demonstrate, on an objective
basis, that the factual situation at the time of th e concession informed the intention of the drafters, and
influenced the terms used in the concession at issue.
7.943 We have found in paragraph 7.888, in interpreting the European Communities' commitment
on STBCs in accordance with Article 31 of the Vi enna Convention, that the term "set top box"
generally describes an apparatus or device that processes an incoming signal from an external signal
source in a manner that can be presented on a display unit, such as a video monitor or television set.
This apparatus need not be designed to be placed on top of the display unit and may handle one or
several functionalities. We recognized that, th rough the inclusion of additional features or
incorporation into another product, an apparatus may no longer be d escribed as, in essence, a "set top
box which ha[s] a communication function" and w ould not be covered by the concession. We
concluded further that the terms of the STBCs concession in the Annex to the EC Schedule extends to
any "set top box" that fulfils all of the fo llowing requirements: it is microprocessor-based;
incorporates a "modem", and is capable of gain ing access to the Internet and handling two-way
interactivity or information exchange . We concluded that, in the cont ext of this concession, the term
"modem" should not be interpreted in an overly narro w or technical sense, but should be informed by
the clear emphasis on functionality. Accordingly, we found that devices that incorporate, or have built
in, technologies that enable them to access the Internet and provide interactive information exchange
may fall within the scope of the concession.
7.944 We will examine, first, materials presented by the European Communities in connection with
the ITA negotiations, and second, the European Comm unities' arguments regarding the existence of
certain technologies at the time of the conclusion of the ITA.
7.945 Before proceeding, we recall the European Commun ities' statement that it is not arguing that
only those products and models that use the precise technology present in 1996 would be covered by
the concessions made pursuant to the ITA. Contra ry to this view, the European Communities
recognizes certain concessions are open ended in resp ect of the precise technology used by a given
device or apparatus."
1218
Landscape papers submitted during negotiation of the ITA
Arguments of the parties
7.946 The European Communities argues that "non-papers" circulated among negotiators illustrate
the type of set top boxes that were intended to be covered by the STBCs narrative description. In
papers issued on 4 October 1996 and 18 October 1996, the European Communities argues that a

1218 European Communities' response to Panel question No. 53 (stating "[t]here is no general rule
according to which the ITA concessions would either be entirely open to technological developments or that
they would only be limited to the products and technology existing at the time).

negative list of "items predominantly designed for c onsumer use" demonstrates that only certain set
tops were intended for duty-free cove rage, in particular "Set top boxes for connecting to the Internet",
but not "Set top boxes (decoder a nd TV receiver or decoder only)".
1219 In a 23 October 1996 paper,
the European Communities argues th at Japan proposed inclusion of set top boxes that "bring high-
quality, economical Internet access to the televisi on consumer audience" or are "television-based
Internet solution[s] … to accessing and browsing the Internet". 1220 In a 31 October 1996 paper, the
European Communities refers to a description for "Set-top boxes which have communication
function" as "a device, equipped with CPU and mode m function, which has a function of interactive
information exchange".1221 In a 1 November 1996 document, the European Communities notes that
the descriptions for "Game machines (…)", "Interne t television" and "Set top boxes (decoder and TV
receiver or decoder only)" were included on the same lists. 1222 In a 25 November 1996 document,
described as a "Quad Technical Working Document ", the European Communities argues that a more-
developed definition of "Set top boxes which ha ve communication function" was finally provided,
reflecting in handwritten notes a proposal to change the phrase "which have communication function"
to "with communication function". 1223 In the European Communiti es' view, these materials are
evidence that the words of the par ticular concession at issue "really matter", as demonstrated through
the back and forth comments by parties.1224
7.947 The United States and Chinese Taipei submit that the materials were prepared by individual
Members and do not represent the common intentions of the parties, or even the views of all ITA
participants, and thus should not be considered. Moreover, the United States argues that the European
Communities uses these materials to advocate a diff erent meaning than what may be concluded from
an analysis of the ordinary meaning of the terms of the concession, and thus its position should not be
accepted.1225
Consideration by the Panel
7.948 In the context of discussing landscape papers subm itted as part of the negotiations of the ITA,
we recall our determination in para graph 7.581, that consideration of "landscape papers", which were
only reviewed by a subset of the negotiating ITA part icipants (the "Quad" members, in particular) and
were not circulated at any point in time prior to this dispute, should not have any bearing on our
interpretation of the concessions arising under the ITA, that were subsequently incorporated into ITA
participants' Schedules. Accordingly, we do not c onsider that they should inform our interpretation
here.
7.949 Notwithstanding this conclusion, we find it difficu lt to draw any particular conclusion from
the content of the materials that have been submitt ed. In particular, the lists of "products to be

1219 European Communities' first written submission, paras. 227-228, referring to Exhibits EC-39-40.
1220 European Communities' first written submission, para. 230, referring to Exhibit EC-41, p. 25.
1221 European Communities' first written submission, para. 230, referring to Exhibit EC-42. The
European Communities notes that this same document also included a description for "Game Machines which
have a communication function", described as "Game machines equipped with CPU and modem function,
which adds a function of interactive information exchange to television set when connected to it"; and "Internet
television", which was described as "A television set, equipped with CPU and modem function inside, which
has a function of interactive information exchange " (European Communities' first written submission,
para. 231).
1222 European Communities' first written submission, para. 232, referring to Exhibit EC-24.
1223 European Communities' first written submission, para. 233, referring to Exhibit EC-27.
1224 European Communities' first written submission, para. 235.
1225 United States second written submission, para. 46; Chinese Taipei's second written submission,
para. 243.

included wherever they are classified" in the 18 October 1996 "non-paper" refers broadly to "Set top
boxes for connecting to the Internet". To the extent relevant to our analysis, this would appear to
support a broad interpretation. Moreover, this same document refers to products to be excluded from
ITA coverage, including "Set top boxes (decoder and TV receiver or decoder only)". No mention is
made to these aspects in the final text of the c oncession, nor is mention made to hard drive or
recording features. Finally, the progression of working documents ultimately demonstrate a definition
of set top boxes that is not much, if at all, diffe rent from that appearing in Attachment B and the EC
concession. As noted above, the burden is on the European Communities to demonstrate how and
why the documents it has referred to assist the Panel in interpreting the text of the concession and the
intention of the drafters. We do not find such assistance in these materials.
The state of technology at the time of ITA negotiations

Arguments of the parties
7.950 The European Communities argues that set top boxes available in 1996 can generally be
divided into two categories: a fi rst category it describes as "traditi onal" set top boxes that mainly
allowed for digital TV viewing on analogue TV devices by paying customers; and a second it
describes as "Internet on TV" devices, which allowed interactive communication and could access
the Internet when used in conjunction with a television.
1226 The European Communities argues that
this latter category of pr oduct was generally not successful in the market, and disappeared with the
introduction of the 1996 Microsoft "WebTV" project. 1227 In subsequent years, the European
Communities claims new set top boxes with a mode m and microprocessor were developed that were
oriented toward ordering of video-on-demand co ntent, or accessing certain websites (e.g., home
shopping or tele-voting), as opposed to sending and/ or receiving emails. Later set top box models
were developed that allowed limited access to th e Internet, such as to websites offering on-line
shopping (e.g., walled garden type set top boxes). Only later did set top boxes begin to incorporate
video tuners to decode TV signa ls, and hard disks and functionality to record material from the
television signal, according to the European Comm unities. While these latter models retained a
communication function for purposes such as ordering movies or downloading electronic programme
guides/schedules facilitating the recording of TV programmes, the European Communities argues that
these products represent a new or "merged categor y" of products focused on video recording
 .1228 In
its view, evidence demonstrates that two categories of set top box were available in the marketplace in
1996, which should inform the understanding of the scope of the concession.
7.951 The United States and Chinese Taipei argue that the European Communities has not
provided evidentiary support for its assertions that onl y two types of set top boxes existed in 1996, or
that "Internet on TV" devices were the only really successful set top boxes at that time. 1229 T h e
United States and Chinese Taipei submit that set-t op boxes existed in 1996 that permitted both
television programming and Internet access via TV, a nd are clearly distinguishable from "Internet on
TV" devices such as "WebTV". 1230 The United States refers to literature describing a set top box in
1996 that contained a decoder and television recei ver as well as a cable modem and provided access

1226 European Communities' first written submission, para. 222, referring to Exhibits EC-34-35;
European Communities' response to Panel question No. 78.
1227 European Communities' first written submission, para. 222, referring to Exhibit EC-36-38.
1228 European Communities' response to Panel question No. 78.
1229 United States second written submission, para. 43; Chinese Taipei's response to Panel question No.
81; Chinese Taipei's second written submission, para. 2 44; Gerard O'Driscoll, The Essential Guide to Digital
Set-Top Boxes and Interactive TV, (2000), p. 91 (Exhibit US-116).
1230 United States second written submission, fn. 68 to para. 37, United States' response to Panel
Question 81, referring to Exhibits US-114 to 116.

to services including home shopping, interactive games and distance learning.
1231 Chinese Taipei
argues that literature at the time recognized a wide range of set top boxes with more traditional uses,
such as television viewing or ordering pay-per-vie w movies and more advanced uses, such as
interactive services including home shopping and Internet. 1232 If there had been one product, the
United States argues that the concession would have b een drafted differently to refer to, for instance
"WebTV devices without tuners" rather than set top boxes.1233
Consideration by the Panel
7.952 The Panel notes that the arguments of the parti es set out above concern the existence or
otherwise of certain technologies at the time of the ITA negotiations. 1234 We recall that, as explained
in paragraph 7.596 above, we do not consider it desirable nor possible to consider the relevance of the
state of technology that existed at the time of th e negotiations, or technological development in the
abstract and without reference to the terms of the concessions that are being interpreted.
7.953 We recall that, in determining the scope of the European Communities' commitment on
STBCs, we have applied the customary rules of interp retation of public international law, as set out in
Articles 31 of the Vienna convention. In doing so , we have examined the ordinary meaning of the
terms of the European Communities' commitment, in the context provided by the ITA, other relevant
parts of the EC Schedule, and the schedules of other WTO Members. We have interpreted the
concession based on the STBCs narrative description in this manner.
7.954 We established that the STBCs concession pertai ns to apparatus or devices that processes an
incoming signal from an external signal source in a manner that can be presented on a display unit,
such as a video monitor or television set. These apparatus need not be designed to be placed on top of
the display unit and may handle one or several functionalities. We recognized that, through the
inclusion of additional features or incorporation in to another product, an apparatus may no longer be
described as, in essence, a "set top box which ha [s] a communication function" and would not be
covered by the concession. We concluded further that the terms of the STBCs concession in the
Annex to the EC Schedule extends to any "set top bo x" that fulfils all of the following requirements:
it is microprocessor-based; incorporates a "modem", a nd is capable of gaining access to the Internet
and handling two-way interactivity or information ex change. We concluded that, in the context of
this concession, the term "modem" should not be in terpreted in an overly narrow or technical sense,
but should be informed by the clear emphasis on f unctionality. Accordingly, we found that devices
that incorporate, or have built in, technologies that enable them to access the Internet and provide
interactive information exchange may fall within the scope of the concession.
7.955 We also observed that, when making a commitment, Members may propose precise, even
exclusive terms to define that concession, to qualif y or limit the scope of coverage through terms and
conditions, including by limiting term s to physical attributes, dimensions, technical characteristics or
features. A Member may also refer to a particular classification or tariff heading to define or limit the
scope of a concession. With regard to the STBCs concession we have found that that the central focus

1231 Complainants' response to Panel question No. 81, referring to Scientific-Atlanta 1996 Annual
Report, p. 16 (Exhibit US-114); Explorer 2000 Installation and Operation Guide, pp. 1-2 and 1-4 (Exhibit
US-115).
1232 Japan's response to Panel question No. 81; Chinese Taipei's response to Panel question No. 81.
1233 United States second written submission, para. 37, fn. 71, referring to Exhibit US-115.
1234 See for instance, Japan's second written subm ission, para. 156; United States' first written
submission, paras. 51-52 (citing to Hirohisa Kawamoto, The History of Liquid-Crystal Displays, Proceedings of
the IEEE (Vol. 90, No. 4 (April 2002), p. 466 (discussing the reflection process)).

is on function, as opposed to a precise or detailed assessment of the technical properties of the internal
components of a set top box.
7.956 Even setting this aside, we recall that the Eur opean Communities would need to demonstrate,
on an objective basis, that the factual situation at the time of the concession informed the intention of
the drafters, and influenced the terms used in the concession at issue. The Panel is not persuaded by
evidence submitted by the European Communities that the market for set top boxes consisted of those
used for viewing digital TV on analogue TVs, an d devices that enabled Internet access on TV, such
that the concession was only to cover these products. While the evidence in th e form of media press
releases
1235 research studies1236, a product manual 1237 and a fax from Japan's Ministry of International
Trade, dated 23 October 1996, which itself a ttaches a "Web TV Networks" press release 1238, reflects
that so-called "Internet on TV" devices with limited functionalities and access via telephone line-
based modems were marketed a nd available in 1996, the complainants have referred to more
sophisticated products with TV tuner capabilities. 1239 While this does not directly address the
question of whether devices with recording capabiliti es or modem technologies existed or not at that
time, it at least does call into question whether the ITA participants were na rrowly focused in their
views on products.
(vii) Overall conclusions on the interpretation of th e narrative description for STBCs in the Annex
to the EC Schedule
7.957 Based on our assessment of the text of the ST BCs narrative description in the Annex to the
EC Schedule in accordance with the principles codifi ed in Article 31 of the Vienna Convention, we
concluded above that the term "set top box" genera lly describes an apparatus or device that processes
an incoming signal from an external signal source in a manner that can be presented on a display unit,
such as a video monitor or television set. This appa ratus need not be designed to be placed on top of
the display unit and may handle one or several functionalities. We recognized that, through the
inclusion of additional features or incorporation into another product, an apparatus may not meet the
description of a "set top box which ha[s] a communi cation function" and would not be covered by the
concession. We concluded further that the terms of the STBCs concession in the Annex to the EC
Schedule extends to a "set top box" that fulfil all the following requirements: it is microprocessor-
based; incorporates a "modem", and is capable of gaining access to the Internet and handling two-way
interactivity or information exchange . We concluded that, in the cont ext of this concession, the term
"modem" should not be interpreted in an overly narro w or technical sense, but should be informed by
the clear emphasis on functionality. Accordingly, we found that devices that incorporate, or have built
in, technologies that enable them to access the Internet and provide interactive information exchange
may fall within the scope of the concession.

1235 "Internet on TV satisfies consumers", Exhibit EC-34; "Out with decoder boxes, in with on-tv
licenses at ViewCall", Exhibit EC-35; "Microsoft and We bTV Networks to Collaborate On Internet Television
Browsing for the Masses", Exhibit EC-36.
1236 "Media Policy: convergence, Concentration and Commerce", Euromedia Research Group, p. 91
(Exhibit EC-37).
1237 Sony Internet Terminal, Operating Instructions, Exhibit EC-38.
1238 Fax from Japan's Ministry of International Trade, dated 23 October 1996, to Mr Jaochim
Graminsky and Mr. Matthew Rohde, (Exhibit EC-41). Of note, the Panel cannot verify that this fax was
received by additional recipients.
1239 Scientific-Atlanta 1996 Annual Report, p. 16 (Exhibit US-114); Explorer 2000 Installation and
Operation Guide, pp. 1-2 and 1-4 (Exhibit US-115).

(b) The ordinary meaning of the relevant concession: the United States' claim in connection with
tariff item numbers 8517 50 90, 8517 80 90, 8525 20 99 and 8528 12 91 in the EC Schedule
7.958 In addition to its claim in connection with the narrative product description for STBCs in the
Annex to the EC Schedule, the United States has additionally claimed that the European Communities
is required to provide duty-free treatment to STBCS u nder individual tariff lines that appear in the EC
Schedule. The United States submits that the Eu ropean Communities bound certain subheadings at
zero duty in order to implement its ITA oblig ations, including tariff item numbers 8517 50 90
("Electrical apparatus for line telephony or line tele graphy... -- Other apparatus, for carrier-current
line systems or for digital line systems... – Other"), 8517 80 90 ("Electrical apparatus for line
telephony or line telegraphy... -- Other apparatus ... – Other"), 8525 20 99 ("Transmission apparatus
for radio-telephony, radio-telegra phy, radio-broadcasting or televi sion... -- Transmission apparatus
incorporating reception apparatus... --- Other") a nd 8528 12 91 ("Reception apparatus for television,
whether or not incorporating radio broadcast recei vers or sound or video recording or reproducing
apparatus ... -- Colour ... --- Other ... ---- Other ... ------ Apparatus with a microprocessor-based device
incorporating a modem for gaining access to the Internet, and having a function of interactive
information exchange, capable of receiving televisi on signals ('Set-top boxes with a communication
function')."
1240
7.959 The United States notes that the latter tariff item number 8528 12 91, in particular, describes
"[a]pparatus with a microprocessor-based device in corporating a modem for gaining access to the
Internet, and having a function of interactive info rmation exchange, capable of receiving television
signals" similar to the narrative description in the Annex to the EC Schedule. The United States
argues that the "devices in question" are "micr oprocessor-based devices, incorporating a modem for
gaining access to the internet, and having a function of interactive information exchange" that are
"also capable of receiving television signals" due to their ability to "enable a television set to receive
and decode digital television (DTV) broadcasts".1241
7.960 The United States argues that the language "whe ther or not incorporating radio broadcast
receivers or sound or video recording or repr oducing apparatus" in HS1996 heading 8528 does not
mean that set top boxes incorporating a device pe rforming a recording or reproducing function are
excluded from duty-free coverage.1242
7.961 The European Communities submits that a claim in connection with the subheadings and their
descriptions has not been clearly established, as the customs classification rules are relevant and have
not been referred to.1243
7.962 It appears that the United States has turned to its analysis in respect of the concession in the
STBCs narrative description, including its assessment of the ordinary meaning of the terms of that
concession, in concluding that the products fall w ithin the scope of the concessions under tariff item

1240 United States' first written submission, para. 10 9, referring to EC ITA Schedule Modifications;
Committee on Market Access, Rectifications and Modifications of Schedules, Schedule CXL – European
Communities, G/MA/TAR/RS74 (15 December 2000 ) (Exhibit US-26); United States' second written
submission, para. 63.
1241 United States' first written submission, para. 110; United States' second written submission,
para. 63.
1242 United States' second written submission, para. 64.
1243 European Communities' second oral statement, para. 47. The European Communities notes in
addition, that the United States alone has raised a claim concerning the descriptions, while the other
complainants consider the codes may only provide context for interpreting the narrative description (European

numbers 8517 50 90, 8517 80 90, 8525 20 99, and 8528 12 91. The United States has not offered any
analysis of the ordinary meaning to be attribut ed to the terms of the tariff item numbers 8517 50 90,
8517 80 90, 8525 20 99, and has summarily limited its assessment of the terms of 8528 12 91.
Moreover, the United States has not considered in lim ited fashion the location of the concession in its
context, including its surrounding provisions.
1244 Finally, in the Panel's view, the United States has
asserted with only limited argumentation that the devices in question fall within the scope of the four
identified tariff lines.
7.963 For all the foregoing reasons, the Panel considers that the United States has failed to meet its
burden to establish a prima facie case of violation, with respect to its claims concerning tariff item
numbers 8517 50 90, 8517 80 90, 8525 20 99 and 8528 12 91 in the EC Schedule.
(c) Do the set top boxes which are the subject of this dispute fall within the scope of the narrative
description in the Annex to the EC Schedule?
7.964 Now that we have determined the scope of the concession, i.e., the type of products covered
by the European Communities' obligations under Article II of the GATT 1994 to provide duty-free
treatment, we must determine whether the products raised by the complainants in the joint Panel
request fall within that description such that they would be entitled to the duty-free treatment required
by the concession.
7.965 We recall our conclusion in paragr aph 7.830 above that the products at issue in this dispute
are (i) electronic apparatuses that enable a video mo nitor or television to receive and decode digital
television broadcasts from a communication channel, which are capable of connecting to the Internet
through an in-built WLAN, ISDN or Ethernet device in order to have an interactive information
exchange; and (ii) electronic apparatuses that meet the terms of the description in
CNEN 2008/C 112/03 and otherwise incorporate a device performing a recording or reproducing
function, such as a hard disk or DVD drive.
7.966 The complainants argue that all such products fall within the scope of the STBCs narrative
description in the Annex to the EC Schedule. Th e European Communities, on the other hand, argues
that the products do not communicate using a "mode m" and are thus not within the scope of the
STBCs narrative description. Additionally, the Eu ropean Communities argues that some of the
products raised by the complainants have additional features and functionality that make them entirely
new products that do not fall within the scope of the STBCs narrative description. Therefore,
according to the European Commun ities, these products are not covere d by the obligation to provide
duty-free treatment to certain set top boxes in the Annex to its Schedule.
7.967 As a general proposition, if the set top boxes at is sue are determined to be within the scope of
the STBCs narrative description concession in the A nnex to the EC Schedule, then the European
Communities is obliged to provide them with dut y-free treatment. Once the Panel has reached a
conclusion on whether the products are within the sc ope of the concession, the next step would be to
compare the obligation in the EC Schedule with the treatment provided for in the European
Communities' measures in order to determine whether that treatment is less favourable than and levies
duties in excess of that set forth in its schedule, such that it would be in contravention of its

1244 We recall, in our assessment of the complain ants' claim in connection with CN8471 60 90, we
determined that the HS1996, including relevant Chapter and Section Notes and interpretative materials, may
provide relevant context for interpreting a Member's co ncessions that are based on the HS. See para. 7.636
above, referring to Appellate Body Report on EC – Chicken Cuts , para. 199; Appellate Body Report on
China - Auto Parts, para. 151.

obligations under Articles II:1(a) and II:1(b) of the GATT 1994. We begin our analysis, therefore
with the question of whether the products at issu e are "set top boxes which have a communication
function: a microprocessor based device incorporatin g a modem for gaining access to the Internet and
having a function of interactive information exchange ." We will conduct our analysis pursuant to our
understanding of the scope of the concession as set out above.
(i) Arguments of the parties
7.968 The European Communities contends that the products at issue fall outside of the scope of
the STBCs narrative description in the Annex of th e EC Schedule for two main reasons. First,
because they do not incorporate "modems" as that term is used in the concession. Second, because by
virtue of additional features they have become a product other than a set top box.
7.969 The complainants are of the view that nothing in the STBCs concession allows the European
Communities to exclude from duty-free treatment set top boxes with a communication function
merely because they gain access to the Internet using "particular types of modems" that use RJ-45
connectors
1245 or because they incorporate a hard disk or other recording or reproducing apparatus.1246
Do products which incorporate ISDN, WLAN, and Ethernet technology incorporate modems
for gaining access to the Internet?
7.970 The complainants argue that devices which incorporate communication devices with ISDN,
WLAN, and Ethernet technology are devices which "incorporate a modem for gaining access to the
internet and having a function of interactive information exchange."1247
7.971 The complainants explain that ISDN-based devices uses pulse code modulation to convert
analogue to digital signals at the transmitter ("modul ate"), and to convert back ("demodulate") digital
signals to analogue at the receiver end via pulse c ode modulation that samples the amplitude of an
analogue signal in uniform intervals. The complainants submit that an ISDN modem, also known as a
"terminal adapter", essentially serves as a protocol converter to interface non-ISDN devices through
variation of the electrical signal as the informati on to be transmitted on the communication medium
varies.1248 Through this process, in which the electric signal is varied, the complainants argue that
both voice (via analogue) and digital signals are transferred over an ISDN medium.1249
7.972 As concerns WLAN technology, the complainan ts submit that WLAN achieves transmission
and receipt of data by varying the characteristics of the electrical signal in the form of a radio
frequency signal. Under the most common standards, which they refer to as IEEE 802.11 (including

1245 United States' first written submission, para. 104 Japan's first written submission, paras. 368;
Chinese Taipei's first written submission, paras. 365 and 437.
1246 United States' first written submission, para. 97; Japan's first written submission, paras. 368 and
384; Chinese Taipei's first written submission, paras. 365 and 437.
1247 United States' first written submission, para. 100 ; Japan's second written submission, para. 218;
Chinese Taipei's first written submission, para. 419; complainants' response to Panel question No. 70.
1248 Japan's first written submission, paras 390-391, footnote 181; United States' first written
submission, para. 100, footnote 146; and Chinese Taipei's first written submission, para. 419, footnote 212 (all
referring to Newton's Telecom Dictionary (24th ed. 2008), p. 922) (Exhibits US-68; JPN-11).
1249 Complainants' response to Panel question No . 72 (referring to IT U-T Recommendation G.711:
General Aspects of Digital Transmission Systems. Terminal Equipments: Pulse Code Modulation of Voice
Frequencies (Exhibit US-109)).

802.11b and 802.11a), the complainants argue that th e transferred information is modulated at the
transmitter side and demodulated at the receiving end.
1250
7.973 The complainants submit that Ethernet achieves transmission and receipt of data via different
standards that vary the electrical characteristics of the signal via pulse amplitude modulation, in
particular a five-level PAM constellati on at the transmission and receiver side. 1251 The United States
also emphasizes that set top boxes with an Ethern et "modem" may connect via an RJ-45 connector
directly to a network port in a user's wall, in th e same manner as a cable modem with RF connector
linking to a cable port in the wall.1252
7.974 In addition, the complainants note the European Communities' view that cable modems fall
within the terms of the scope of the STBCs narra tive description. Given the functionality of ISDN,
WLAN and Ethernet devices discussed above, and the European Communities' acceptance that set top
boxes incorporating "cable modems" fit within the scope of the STBCs narrative description, the
United States argues that there is no rationale for considering cable modems as "modems", but
excluding ISDN, WLAN or Ethernet devices, which also modulate and demodulate signals.1253
7.975 The European Communities argues that only digital-to-analogue telephone-based modems
and cable modems fulfil the conditions of pe rforming digital-to-analogue modulation and
demodulation and modulating for the purposes of "direct" transmission and communication with the
Internet, and are thus "modems" within the meaning of the STBCs narrative description.1254
7.976 The European Communities argues that ISDN-based devices do not constitute "modems"
because these device do not perform digital-to-anal ogue modulation and demodulation to connect to
the Internet, but instead perform digital-to-digital transmission only. In addition, the European
Communities submits that ISDN functions through a terminal adapter. 1255 In contrast, the European

1250 Complainants' response to Panel question No. 72. The complainants specify that 802.11b supports
DBPSK, DQPSK modulation schemes, which allow for transmissions via binary constellation (they refer to:
IEEE Std 802.11b – 1999. Part 11: Wireless LAN Medi um Access Control (MAC) and Physical Layer (PHY)
specifications: Higher-Speed Physical Layer Extension in the 2.4 Ghz Band, p. 42 (Exhibit US-111)). The
complainants specify that 802.11a supports BPSK, QPSK, 16-QAM and 64-QAM modulation schemes, which
rely on a 64-point constellation (they refer to: IEEE Std 802.11a-1999 - Supplemen t to IEEE Standard for
Information Technology, p. 24 (Exhibit US-112)). See also United States' first written submission, para. 100
(referring to Wireless Broadband Modems, International Engineering Consortium, www.iec.org (Exhibit US-
69)).
1251 Complainants' response to Panel question No. 72. The complainants specify that Ethernet relies on
different standards (802.3 IEEE), including Ethernet, Fast Ethernet, Gigabit Ethernet, and 10 Gigabit Ethernet.
The complainants submit that Fast and Gigabit Ethernet use Pulse Amplitude Modulation (PAM) to handle
information transmission. The compla inants refer to the follo wing sources: IEEE St d 802.3-2005, Section 2,
Part 3: Carrier Sense Multiple Access with Collision Detection (SCMA/CD) access method and physical layer
specifications (Exhibit US-110), p. 426, Section 3, Part 3, pp. 149-150, Section 2, Part 3, Figure 32-4, p. 42.
1252 See Exhibits US-124 and US-125 (manuals for set top boxes providing instructions on connecting
an RJ-45 interface to a network port in the wall).
1253 United States' first written submission, paras. 100-101; United States' second written submission,
1254 European Communities' response to Panel question Nos. 149, 150; European Communities'
comments on complainants' responses to Panel question No. 150.
1255 European Communities' response to Panel question No. 73; European Communities' second written
submission, para. 225 (referring to Overview of ISDN lines, available at http://www.wifinotes.com/computer-
networks/how-ISDN-works.html (Exhibit EC-107, p. 1-2); How ISDN works (available at
http://www.smartcomputing.com/articles/archive/R0501/25R-1/25R01.pdf?guid= and http://www.teach-
ict.com/as_a2/topics/telephone_systems/telephone_systems/how_isdn_works.htm (Exhibit EC-107, pp. 3-5)).

Communities argues that telephone-based modems use analogue technology via sending and receiving
data in the form of audible tones transferred by te lephone lines, which is converted back into digital
data. As a reflection of distinctions in these technologies, the European Communities submits that
traditional modems and ISDN technolog y were classified until 2006 in different parts of its domestic
nomenclature: CN: 8517 50 10 for modems (apparatus for carrier-current line systems) and 8517 50
90 for digital line systems. In light of this treatment, the European Communities argues that, it is hard
to accept that ITA participants decided not to distinguish between these two technologies in the
concession.
1256
7.977 Furthermore, the European Communities argues that Ethernet and WLAN also do not
constitute "modems" under the concession, because they do not perform digital-to-analogue
modulation and demodulation 1257, and do not connect directly to the Internet, but connect only after
connecting first to an external modem. 1258 It argues that WLAN and Ethernet are thus not modems
but "devices for connection to an internal network" via an "external modem".
Are the products at issue which incorporate a dditional features still set top boxes of a type
covered by the STBCs Concession?
7.978 The complainants argue that the addition of features such as video recording does not change
the fact that the product is a set top box with a communication function. 1259 T h e United States
contends that the European Communities' positi on that the recording function can somehow be
divorced from the communication function, such th at a device could be described as 80 per cent
recording and 20 per cent communication is utterly flawed. 1260 Chinese Taipei and Japan submit
that set top boxes which have a communication function " sometimes include a hard disk to record
television programmes, download software from a di gital television provider and to perform other
ancillary applications enabled by the digital television provider". 1261 Japan is of the view that STBCs
concession should include not only set top boxes capable of solely performing a communication
function, but also STBCs which perform additional functions, such as recording or reproducing, in
addition to the communication function.1262

The document explains the basic features of ISDN, including the terminal adapter; Cisco's How ISDN works ,
available at http://www.cisco.com/en/US/docs/internet working/technology/handbook/ISDN.html (Exhibit EC-
107, pp. 6-12); Beginner's Guide to ISDN , available at http://www.seg.co.uk/products/isdnover.htm (Exhibit
EC-107, pp. 13-18); How it works: science and technology , by Wendy Horobin, Marshall Cavendish
Corporation, 3rd ed., published by Marshall Cavendish, 2003, pp. 1473 et seq.
1256 European Communities second written submission, para. 227.
1257 European Communities' response to Panel question No. 151; European Communities' comments on
complainants' responses to Panel question No. 149; see also European Communities' second written submission,
para 228; European Communities' response to Panel question No. 73.
1258 European Communities' first written submission, para. 265; European Communities' response to
Panel question No. 73; European Communities' second written submission, para. 228.
1259 United States' second written submission, para. 38.
1260 United States' second written submission, para. 40 . With respect to the products at issue, the
United States refers to the European Communities' own m odification of its schedule in 2000 and several BTIs
from national customs authorities which it argues demonstrate that the European Communities itself
acknowledges that set top boxes which also have recordin g devices incorporated into them fall within the scope
of the STBCs narrative description (United States' firs t oral statement, para. 15 ; United States' second written
submission, para. 41; Exhibits US-26 and US-28).
1261 Chinese Taipei's first written submission, para. 15, Japan's first written submission, para. 345
(emphasis added).
1262 Japan's first written submission, para. 382.

7.979 The European Communities argues that the products at issue fall outside the scope of the
STBCs narrative description because, the main featur es of certain set top boxes make them "digital
video recorders" or "personal video recorders", whic h are "completely different" than what is covered
by the concession.
1263 Generally, the European Communities argues that certain set top boxes when
considered objectively, are not eligible for duty-fr ee treatment, such as a set top box that performs a 1
per cent "communication" function and 99 per cent "other" functions. 1264 In response to the evidence
presented by the United States, the European Commun ities submits that even a cursory review of the
products discussed in the BTIs presented by the co mplainants would reveal that they are no longer
considered to be "set top boxes", as their main f eatures and functionality make them completely new
products that do not fall within the scope of the STBCs concession.1265
7.980 The European Communities argues that a determination of whether a "set top box" is
excluded from duty-free treatment because of its add itional functionality is not done merely based on
the presence of a hard disk, but rather based on a consideration of all the characteristics of those
products.1266 The European Communities submits that it may determine on the basis of an objective
assessment of all the objective characteristics of a set top box with recording or reproducing
capabilities, that such product is prima facie classifiable under the terms of both CN heading 8528, as
"[r]eception apparatus for television, whether or not incorporating radio-broadcast receivers or sound
or video recording or reproducing apparatus", a nd CN heading 8521, as "[v]ideo recording or
reproducing apparatus, whether or not incorporating a video tuner".1267 In accordance with GIR 1 and
Note 3 to Section XVI of the HS1996, the Eu ropean Communities argues it would be necessary to
determine the "principal function" of the device. 1268 By way of example, the European Communities
argues that a set top box with video recording or reproducing capabilities, which is also equipped with
a video tuner for the reception of TV signals, and software that automatically downloads TV
programming, may be considered principally a r ecording or reproducing apparatus, however, only
when considering the presence of electronics for reco rding, playback and recording buttons, remote
control, absence of a screen, and after assessing wh ether recording or reproducing capabilities will be
an additional/secondary feature. 1269 On the other hand, if it were de termined that the hard drive was
used for saving emails or attachments, or if th e product were equipped with a keyboard for an easy
sending of emails, as opposed to use of the numeric keypad on a remote control primarily oriented
toward recording functionality, the European Comm unities argues this would be a factor suggesting
that the communication function prevails over recording capability.1270
(ii) Consideration by the Panel
7.981 We recall our conclusion in paragr aphs 7.851-7.852, that a "set top box" is an apparatus or
device that processes an incoming signal from an external signal source in a manner that can be
presented on a display unit, such as a video monitor or television set. This apparatus need not be

1263 European Communities' first written submission, para. 260, referring to Exhibits EC-43, EC-44,
EC-45, Exhibit US-28.
1264 European Communities' first written submission, paras. 258-260; Exhibit EC-46.
1265 European Communities' first written submission, para. 260 making reference to Exhibit US-28 and
the confidential version of the BTI in Exhibit EC-43.
1266 European Communities' first written submission, para. 286.
1267 European Communities' second written submission, para. 239.
1268 European Communities' response to Panel question No. 85.
1269 European Communities' second written submission, para. 243. As an example, the European
Communities refers to a product which describes itsel f as a Digital Video Recorder, and has a product
instruction manual which describes how to record or wa tch movies, without reference to Internet functionality
(Exhibit EC-44).
1270 European Communities' response to Panel question No. 85.

designed to be placed on top of the display un it, and may handle one or several functionalities,
including: receiving and decoding television broadcast s, whether from a satellite, cable or Internet
source; converting digital TV br oadcasts to function on older an alogue TV sets; enabling two-way
interactive connectivity with digita l cable television broadcasts or via the Internet; or even recording
of digital video content.
7.982 We also recall our conclusion in paragraphs 7. 861 that the use of the terms "which have a
communication function" places an important em phasis on the communication functionality in
defining the particular type of set top box that is covered under the concession. Although all such set
top boxes must have a communication function, we also found that the terms of the concession did not
convey the meaning such that coverage is limited to set top boxes with only a communication
function. However, we did note that there may co me a point when, due to additional functionality, a
particular product would not, in essence, meet the description of a "set top box which ha[s] a
communication function" and, therefore, would not be included within the scope of the STBCs
narrative description.
7.983 We further concluded in paragra phs 7.880 and 7.886 that the text following the colon, in the
narrative description, expands upon the description provided by the antecedent text "Set top boxes
which have a communication function". We conclude d that the terms of the STBCs concession in the
Annex to the EC Schedule extends to a "set top box" that fulfil all the following requirements: it is
microprocessor-based; incorporates a "modem", and is capable of gaining access to the Internet and
handling two-way interactivity or in formation exchange. In the cont ext of this concession, the term
"modem" should not be interpreted in an overly narro w or technical sense, but should be informed by
the clear emphasis on functionality. Thus, the term should not be interpre ted to refer only to
components that connect to the Internet directly , or perform digital-to-analogue signal conversion
over a telephone line. Interpreting the concession in context and in light of the clear focus on
functionality, we found that devices that incorporate, or have built in, technologies to access the
Internet and provide interactive information exchange may fall within the scope of the concession.
7.984 The complainants have presented evidence that devices based on ISDN, WLAN and Ethernet
technology connect set top boxes to a communication lin e. We consider that it is clear that such
devices incorporate, or have built in, technologi es to access the Internet and provide interactive
information exchange. We therefore conclude that set top boxes that otherwise meet the terms of the
concession, and that incorporate ISDN, WLAN, and Et hernet technology fall within the scope of the
concession.
7.985 In reaching our conclusions, we do note that we have not relied on technical definitions of
terms such as "modems", "pulse code modulation" or "pulse amplitude modulation" to either include
or exclude products, as the Eur opean Communities has raised.
1271 Rather, we have based our
conclusions on the ordinary meaning of the terms us ed in the concession considered in context and in
light of their object and purpose.
7.986 Finally, with respect to set top boxes whic h have a communication function which also
incorporate a recording device or hard disk, we recall our conclusion that the STBCs narrative
description is not limited to products that only ha ve a communication function. However, we also
recall that additional functionality may, at a certa in point, result in a product not meeting the
description of a "set top box which ha[s] a communi cation function". Such a determination about
whether a product is or not such a set top box must be made based on a case-by-case analysis of the
objective characteristics of a particular product as it is presented at the border.

1271 European Communities' second written submission, para. 231-232.

(d) Does the CN, in conjunction with CNEN 2008/C 112/03, provide for duties on products
identified by the complainants which are in excess of those set forth in the EC Schedule?
7.987 We recall our reasoning in para graphs 7.97-7.102 above that Article II:1(b) requires that
Members shall not apply ordinary customs duties in excess of those provided for in the Schedule.
Therefore, in this section we will compare the tari ff treatment provided to the products identified by
the complainants under the challenged measures with that provided for in the STBCs narrative
description in the Annex to the EC Schedule to determine whether the challenged measures provide
for duties being applied which are in excess of tho se set forth in the EC Schedule, such that the
European Communities is in breach of its obligations under Article II:1(b) of the GATT 1994.
1272
7.988 The complainants argue that, through the measures at issue -- Council Regulation
No. 2658/87, as amended and CNEN 2008/C 112/03 -- the European Communities does not provide
duty-free treatment to set top boxes which have a communication function.
7.989 We recall from paragraph 7.808 above that Council Regulation No. 2658/1987, as amended,
sets forth in CN code 8528 71 1 the duty-free CN code in which to classify certain "Apparatus with a
microprocessor-based device incorporating a modem for gaining access to the Internet, and having a
function of interactive information exchange, capable of receiving televisions signals ('set-top boxes
with communication function')". In addition, the CN establishes dutiable CN codes 8521 90 00,
applicable to "[v]ideo recording or reproducing appa ratus, whether or not incorporate a video tuner",
which sets a 13.9 per cent duty. The CN also establishes CN codes 8528 71 19 and 8528 71 90
without additional description, which each set a duty rate of 14 per cent.
7.990 In paragraph 7.822 above, under CNEN 2008/C 112/03, we concluded that products may only
qualify under duty-free CN code 8528 71 13 to the exte nt they meet the terms of the CNEN generally.
However, set top boxes that do not have a built-in modem, as described in the provisions, or otherwise
incorporate ISDN, WLAN or Ethernet technology, are excluded. A set top box that qualifies as a
product without a screen which are reception apparatu s for television, but which does not incorporate
a video tuner is also excluded. Finally, any set top box that contains a device performing a recording
or reproducing function, such as a hard drive or DV D drive, will also be excluded. Products that are
in part described by CN code 8528 71 13, but do not meet the requirements enumerated in this
paragraph are instructed to be classified under othe r codes under heading 8528, subject to 14 per cent
duties, or otherwise under CN code 8521 90 00 and subject to 13.9 per cent duties.
7.991 We recall that, in the Annex to its Schedule, the European Communities agreed to bind and
eliminate duties on set top boxes that fall within th e scope of the STBCs narrative description. We
also note that the CNEN requires that set to p boxes which incorporate a device performing a
recording or reproducing function, as well as those which utilise ISDN, WLAN or Ethernet
technology be classified outside the scope of the duty-free CN code 8528 71 13. The CNEN by
directing national customs authorities to classify th ose set top boxes in dutiable CN code 8521 90 00
or in dutiable CN codes 8528 71 19 and 8528 71 90 under which the CN imposes duties of 13.9 per
cent and 14 per cent, respectively, requires the im position of duties on at least some products which

1272 As noted in paragraph 7.102, prior panels have r easoned that a measure which is inconsistent with
the obligation in Article II:1(b) to provide duty treatment not in excess of that set forth in a Member's schedule
necessarily implies an inconsistency with the obligati on in Article II:1(a) not to provide less favourable
treatment to imported products than that set forth in a Member's schedule. Therefore, we will begin our analysis
of whether the tariff treatment provided for in the European Communities' measures is consistent with Article II
of the GATT 1994 with an analysis of the obligation in Article II:1(b). Subsequently, we will move on to
address the complainants' claim that the European Communities is also acting inconsistently with the obligation
in Article II:1(a).

fall within the scope of the STBCs narrative descr iption. Therefore, the CNEN and CN operating
together result in the imposition of duties in excess of those provided for in the European
Communities' Schedule and are inconsistent with Article II:1(b) of the GATT 1994.
(e) Does the CN, in conjunction with the CNEN 2008/C 112/03 provide less favourable treatment
than that set forth in the EC Schedule?
7.992 We recall from paragraph 7.102 above that, if we were to determine that the applied rate
exceeds the bound duty rate, then, in accordance with the aforementioned approach, the application of
customs duties would be "in excess" of those provided for in the EC Schedule, and would
consequently also violate Article II:1(a) of the GATT 1994 by according to imports of the products at
issue treatment less favourable than that provided for those products in accordance to the applicable
concession in the EC Schedule.
7.993 Accordingly, for those products discussed above that are classified under a dutiable heading,
that should otherwise be accorded duty-free treatment in respect of the concession for "Set top boxes
which have a communication function: a micropr ocessor based device incorporating a modem for
gaining access to the Internet and having a function of interactive information exchange" as provided
for in the EC Schedule, we conclude that the application of duties on these products would
consequently result in treatment less favourable in violation of Article II:1(a) of the GATT 1994.
5. Whether the European Communities' actions concerning the delivery of opinions with
respect to the proposed amendments to th e Explanatory Notes contained in 2008/C
112/03 are inconsistent with Articles X:1 and X:2 of the GATT 1994
(a) Summary of main issues for the Panel's determination
7.994 The Harmonized Commodity Description and Coding System (the "HS")
1273 is supplemented
by Explanatory Notes, known as the "HSEN". 1274 Similarly, the European Communities' Combined
Nomenclature (the "CN") is supplemented by its own Explanatory Notes, known as the Explanatory
Notes to the Combined Nomenclature ("CNENs"). 1275 CNENs are published by the Commission in
the Official Journal of the European Union ("EU Official Journal"). In addition, the Commission
regularly publishes a consolidated version of all CNENs incorporating ame ndments published in the
EU Official Journal up to a certain date. All CNEN s published after that date remain in force and are
incorporated in a subsequent consolidated version.1276

1273 The HS, as amended, is set out as an Annex to the International Convention on the Harmonized
Commodity Description and Coding System (the "HS Convention"), done at Brussels on 14 June 1983 (Exhibit
EC-119). See, in particular, Articles 1(a) and 2 of the HS Convention.
1274 However, according to Article 1(a) of th e HS Convention, as noted by the Panel in
EC - Chicken Cuts, HSEN are not binding and do not form part of the HS per se. On the other hand, as also
noted by the Panel in EC – Chicken Cuts , the WCO has indicated that HSEN "are taken into consideration in
conjunction with the legal texts when interpreting the HS." (Panel Report on EC – Chicken Cuts , para. 7.220).
See also Appellate Body Report on EC – Chicken Cuts, para. 224.
1275 Throughout these Reports we will use the abbreviation "CNENs" to indicate Explanatory Notes to
the Combined Nomenclature in general, as a group. Th e abbreviation "CNEN" will be used with reference to a
particular Explanatory Note to the Combined Nomenclature.
1276 The consolidated version of the CNENs as published in the EU Official Journal on 30 May 2008
(OJ 2008/C 133/01) specifies in its foreword that: "[t]his version of the CNENs includes and, where appropriate,
replaces those published in the Official Journal of the European Union, C se ries, up to 11 Ap ril 2008. CNENs

7.995 On 7 May 2008, the Commission published in the EU Official Journal an amendment to a
CNEN regarding the classification of "set-top bo xes with communication function" of duty-free
CN2007 code 8528 71 13 ("STBCs").
1277 This amendment explains inter alia the scope of coverage
of that code and provides that among the conditions required for classification under this code are: (1)
the presence of a "video tuner"; (2) the presence of a modem, but not including devices that it states
perform a similar function but which do not modul ate or demodulate signals, such as ISDN-, WLAN-
or Ethernet connectivity; and (3) the absence of a device performing a recording or reproducing
function such as a hard disk or a DVD drive. As with other CNENs, this amendment started as a
Commission proposal that was discuss ed in the Customs Code Committee. 1278 As explained below,
this proposed amendment is at the heart of the GATT 1994 Article X claims.
7.996 Although the three complainants made a joint request for the establishment of this Panel,
which includes inter alia joint claims under Article X of th e GATT 1994, Japan did not pursue these
particular claims in its submissions. With regard to the Article X claims, the joint panel request states
as follows:
"[W]ith respect to STBs with a communication function, the Tariff and Statistical
Nomenclature Section of the Customs Code Committee delivered favourable opinions
with respect to the proposed amendments to the Explanatory notes contained in
2008/C 112/03 in October 2006 and May 2007, respectively. It did not publish the
amended explanatory notes in the EC Official Journal until 7 May 2008.
Furthermore, EC member States were applying duties to STBs using the approach
specified in 2008/C 112/03 prior to 7 May 20 08. We consider that these actions are
inconsistent with the EC's obligations under Articles X:1 and X:2 of the GATT
1994."
1279
7.997 The United States argues that the European Communiti es violated Article X:1 of the GATT
1994 in that it "made effective" certain CNEN am endments in October 2006 and May 2007, that is,
well before their publication in the EU Official J ournal on 7 May 2008. In addition, the United States
argues that the European Communities violated Article X:2 of the GATT 1994 since it used CNEN
amendments to apply duties on certain products before officially publishing those CNEN
amendments.
1280 The United States explains that the rele vant CNEN amendments are those voted by
the Customs Code Committee in October 2006 and Ma y 2007. More particularly, in October 2006
the Customs Code Committee delivered a favourab le opinion on a proposed amendment to a CNEN
providing that STBCs with ISDN-, WLAN-, or Ethern et connectivity were to be excluded from duty-
free CN code 8528 12 91 (which later became 8528 71 13 under the CN2007) and that STBCs falling
in that duty-free CN code must incorporate a video tuner. STBCs with such connectivity or lacking a
video tuner would be subject to 14 per cent duties. In May 2007, it argues, the Customs Code

published in the Official Journal, C series, subsequent to that date remain in force and will be incorporated in the
CNENs when revised".
1277 We note that the terms of CN code 8528 71 13 refer to "set top boxes with communication
function" while the concession in the EC Schedule is for "set top boxes which have a communication function".
Here, we will refer to "set top boxes with communication function" since those are the terms of CN code
8528 71 13 as reflected in the CNEN at issue here; CNEN, OJ 2008/C 112/03, 7 May 2008. The text of that
CNEN itself clarifies that "the Explanatory Notes to the Combined Nomenclature of the European Communities
are amended
 as follows: On page 335, the following text is inserted : [...]; On page 339, the following text is
inserted [...]." (emphasis added); (Exhibits US-30; TPKM-28).
1278 See paragraphs 7.46-7.47 above.
1279 Joint panel request, WT/DS375/8, DS376/8, DS377/6, p.5.
1280 See, for instance, United States' first written submission, paras. 112-119; United States' second
written submission, paras. 120 and 124.

Committee approved a second amendment to the CNEN, providing that STBCs with a "recording
function" would be "excluded from" duty-free CN code 8528 12 91 and subject to a 13.9 per cent
duty. Chinese Taipei has advanced similar arguments under its GATT 1994 Article X claims. It
identifies the proposed amendments to the CNEN in its submissions as "draft CNEN".
1281
7.998 The European Communities , however, submits that the CNEN amendments cannot be
considered "laws, regulations, judi cial decisions or administrative rulings of general application"
under Article X:1 nor "measures of general applicat ion" under Article X:2 "in particular, because of
the factual features of the CNEN such as their non- binding nature combined with their essentially and
inherently informative character". 1282 Furthermore, the European Communities strongly emphasizes
the "draft" character of the CNEN amendments, being merely "preparatory" acts, i.e. draft measures.
The European Communities submits that draft CNEN amendments cannot be "made effective" or
"enforced" within the meaning of Articles X:1 a nd X:2 of the GATT 1994. In its view, the CNEN
amendments were "made effective" upon adopt ion by the Commission and their subsequent
publication in the EU Official Journal. Since the CNEN amendments were only adopted by the
Commission on 29 April 2008 and published in the O fficial Journal a few days later on 7 May 2008,
there is no Article X:1 violation. The European Communities also argues that the CNEN amendments
were not enforced before official publication in the EU Official Journal and that the evidence
submitted by the complainants in support of this a llegation is not satisfactory. Accordingly, the
European Communities argues, there is no Article X:2 violation either.1283
(b) The measures at issue
7.999 The Panel must first determine which measures are at issue and whether such measures are
within the Panel's terms of reference. Once we ha ve made this determination, we will proceed to
analyse the Article X claims per se.
7.1000 The United States and Chinese Taipei identify in their joint panel request as the measures at
issue two "proposed amendments" to the CNEN for which the Customs Code Committee delivered
"favourable opinions" in "October 2006 and May 2007 respectively".1284
7.1001 The first measure identified by the two comp lainants is the "Draft CNEN on Satellite
receivers with built-in modem" as voted upon by the Customs Code Committee in October 2006 and
which received a "favourable opinion". 1285 The European Communities explains that discussions on
issues pertaining to the classification of set-top b oxes were held in the Customs Code Committee
during 2005 and that, following these discussions, the Commission submitted a document (doc.
TAXUD/0667/2006) in May 2006 as a "preliminary draft" for discussion (but not for a "vote"). 1286
According to the European Communities, the purpo se of these discussions was to seek the input and
opinions of the EC member States on the classification of these products. During the course of these
discussions, the initial text of document TAXUD/ 0667/2006 was revised and became document
TAXUD/0667/2006 Rev. 2, then document TAXUD/ 0667/2006 Rev. 3, reflecting the comments of

1281 Chinese Taipei's first written submission, paras. 371-372; 374; 459-462.
1282 European Communities' first written submission, para. 310.
1283 European Communities' first written submission, paras. 306-309; 316.
1284 See para. 7.996 above.
1285 "Draft CNEN on Satellite receivers with built- in modem" (doc. TAXUD/0667/2006 Rev 3), see
point 3.7 and Annex VI in Customs Code Committee (407 th meeting) (Exhibits US-27; TPKM-30). The text of
document TAXUD/0667/2006 Rev 2 is also available in Exhibits EC-54 and EC-90.
1286 "Draft Explanatory Notes: Satellite receivers" (d oc. TAXUD/0667/2006), see point 4.13 (pages 7-
8) in Customs Code Committee (395th meeting) (Exhibits EC-90; US-74); (also cited in European Communities'

the EC member States. It was this latest versi on of the proposed amendment to the CNEN that the
Commission submitted to the Customs Code Committ ee in October 2006 for a vote. This proposal
contained explanatory notes for different interrela ted CN codes, i.e. for CN codes 8528 12 90 to
8528 12 95 ("video tuners"); 8528 12 91 ("set-top boxes with a communication function")
1287; and
8528 12 98 ("other").1288
7.1002 The European Communities explains that the purpose of the October 2006 version was to
clarify the scope of certain CN codes related to STBCs for which no Explanatory Notes yet existed.
However, its main focus was on duty-free CN code 8528 12 91 for "set-top boxes with a
communication function", which became 8528 71 13 in the CN2007. This proposal for amendment
specified, inter alia, that "set-top boxes with a communication function" from CN code 8528 12 91
did not include set-top boxes with Ethernet-, WL AN- or ISDN- connectivity nor set-top boxes which
incorporate a device performing a recording or repro ducing function such as, for example, a hard disk
or a DVD drive. When submitted for a vote in October 2006, the Customs Code Committee delivered
a favourable opinion on the exclusion of set-top boxes with Ethernet, WLAN or ISDN. 1289 The voting
on the exclusion for set-top boxes incorporating a device performing a recording or reproducing
function was postponed.
1290
7.1003 The second measure identified by the two complain ants is the "Draft CN Explanatory Notes:
Set-top box incorporating a hard disk"1291 which, they contend, received a "favourable opinion" by the
Customs Code Committee in "May" 2007. 1292 This proposal for amendment of the CNEN called for
exclusion from duty-free CN code 8528 12 91 set-top boxes which incorporate a device performing a
recording or reproducing function (for example, a hard disk or DVD drive); this had been proposed at
the October 2006 meeting, but had been postponed. The European Communities points out that the
reference to "May" 2007 in the Panel request is "not correct".1293
7.1004 The European Communities submits, first, that the vote in the Customs Code Committee took
place in April 2007 instead of "May" 2007 (which is the date of the document containing the minutes
of the meeting). Secondly, th e European Communities argues that the Customs Code Committee did
not deliver a "favourable" opinion on this propo sed amendment as mentioned in the joint panel
request, but rather a "no opinion". 1294 The European Communities observes that it "understands
which measure is at issue, or, rather, what is th e measure the existence of which the complainants
allege". However, the European Communities points out "that the factual statements set forth in the
Panel request, and underlying the complainants' theory of how this measure came into existence, are
not correct". In the European Communities' view , the measure that the co mplainants identify and

1287 The terms of CN code 8528 12 91 read in full: "apparatus with a microprocessor-based device
incorporating a modem for gaining access to the Intern et, and having a function of interactive information
exchange, capable of receiving television signals ('set-top boxes with communication function')."
1288 European Communities' first written submission, paras. 300-302.
1289 European Communities' first written submission, paras. 300-302.
1290 European Communities' first written submission, para. 302. The Panel notes that the "Draft CNEN
on Satellite receivers with built-in modem", as voted by the Customs Code Committee and as reflected in the
Annex to the minutes of the October 2006 Customs Code Committee meeting, reflects this, in that it does not
mention the exclusion for set-top boxes incorporating a device performing a recording or reproducing function
and refers only to the exclusion of ISDN, WLAN and Ethernet connectivity.
1291 "Draft CN Explanatory Notes: Set-top box incorporating a hard disk" (doc. TAXUD/0590/2007),
see point 3.3 (page 5) to Customs Code Committee (420th meeting) (Exhibits EC-90; TPKM-31).
1292 Joint panel request, W/DS375/8, 376/8, 377/6.
1293 European Communities' comments on the complainants' responses to Panel question No. 154.
1294 This means that there the Customs Code Committee did not reach a qualified majority in favour
(favourable opinion) or against (non favourable opinion) the Commission's proposal.

describe in the Panel request "does not exist" and th is "is not without consequences for the analysis of
the complainants' claims by the Panel".
1295
7.1005 The Panel observes first that, as pointed out by th e European Communities, the complainants
have incorrectly mentioned "May" 2007 as the date of the "Draft CN Explanatory Notes: Set-top box
incorporating a hard disk", described above at paragr aph 7.1003, and they have also incorrectly stated
that the Customs Code Committee delivered a "favourab le" opinion with respect thereto. In fact, the
draft CNEN was dated April 2007 and the Customs Code Committee delivered a "no opinion" instead
of a favourable opinion. It is clear that the refere nce to "May" instead of "A pril" is a mere clerical
error, which did not lead to any confusion on the part of the European Communities. Indeed, the
European Communities confirmed that it understood "which measure is at issue, or, rather, what is the
measure the existence of which the complainants allege". 1296 Hence we see no reason to exclude the
correct "draft CNEN" from our consideration. As for referring to a "favourable" opinion as opposed
to a "no opinion", we do not consider that th is error should put the "draft CNEN" beyond our
consideration either. Although they are two distinct actions, we understand that in the circumstances
before us, both a "no opinion" and a "favourable opinion" would lead to the same result, namely the
adoption of this "draft CNEN" by the Commission. 1297 In addition, both the statement of the
European Communities that it "understands which measure is at issue" and its active defence
demonstrate that the European Communities' ability to defend itself was not prejudiced by this error
in the Panel request. Accordingly, we will take into consideration this draft CNEN in our analysis and
will henceforth refer to "April 2007" instead of "May 2007" with respect to this measure.
7.1006 The European Communities further submits that proposed am endments to the CNEN have
to be "adopted by the Commission to exist" 1298 and that this only happened on 29 April 2008. 1299
Consequently, it argues, from an EC legislative process point of view, both measures at issue are mere
"drafts" or "preparatory acts". Given that a measure must be adopted before it can be "made effective"
and "enforced", it argues, the "draft" CNEN amendm ents fall outside the ambit of Articles X:1 and
X:2 of the GATT 1994.1300 The United States and Chinese Taipei respond that they do not contest that
the CNEN amendments were not formally adopted by the Commission until 29 April 2008. In their
view, however, nothing in Article X:1 or X:2 – that is, nothing in the meaning of "made effective" or
"enforced" requires such formal adoption. Rather, Articles X:1 and X:2 only require that the measures
at issue were "made effective" and "enforced" in practice, which has occurred in the present case.1301
7.1007 Turning first to the concerns raised by the European Commun ities with regard to the draft
character of the CNEN amendments, we observe that the CNEN amendments' draft character does not
automatically preclude them from being challe ngeable measures. The Appellate Body in
US - Corrosion-Resistant Steel Sunset Review determined that any act of a WTO Member can

1295 European Communities' comments to the United States' and Chinese Taipei's response to Panel
question No. 154.
1296 See para. 7.1003 above; European Communities' comments to the United States' and Chinese
Taipei's response to Panel question No. 154.
1297 See para. 7.47 above.
1298 European Communities' second written submission, para. 95.
1299 European Communities' first written submission, para. 305, (explaining that the CNEN were
adopted on 29 April 2008 by Mr. Verheugen (Vice-Presid ent of the Commission) signing the act on behalf of
the Commission (College)) (Exhibit EC-55).
1300 European Communities' first written submission, para. 309; European Communities' second written
submission, para. 95; European Communities' second oral statement, para. 92; European Communities' response
to Panel question No. 154.
1301 Chinese Taipei's comments to the European Communities' response to Panel question No. 154;
United States' and Chinese Taipei's responses to Panel question No. 155.

constitute a measure challengeable before a Panel.
1302 It is an entirely different question, however,
whether a given measure, such as the "draft" CN EN at issue here, falls within the scope of
Articles X:1 and X:2 of the GATT 1994. Given that th e core of the parties' argumentation in relation
thereto concerns the meaning of the terms "made ef fective" in Article X:1 and "enforced" in Article
X:2, we will deal with this issue below, when we address those matters. 1303 We will thus assess in
those sections below whether the draft characte r of the CNEN amendments excludes the CNEN
amendments from the scope of Articles X:1 and X:2.
7.1008 In their submissions – but not in their joint panel request – the United States and Chinese
Taipei present both measures at issue together with: (1 ) various statements made by the Chair of the
Customs Code Committee at the 413 th, 432nd and 433rd meetings and (2) several BTIs. The European
Communities questions whether these statements and BT Is form part of the measures at issue. The
United States and Chinese Taipei clarify that they do not cons ider this material to form part of the
measures at issue. Rather, they consider them to serve as "ample evidence that the customs
authorities of the EC member States must apply the draft CNEN once the EC Customs Code
Committee has issued an opinion by means of a vote". According to the two complainants, this
material thus establishes that the draft CNENs we re "made effective" once they were voted upon by
the Customs Code Committee. 1304 The European Communities responds that if the draft measures
were sent to the customs authorities with an "adminis trative instruction" to follow them as if they had
been adopted, it would not be the draft CNEN that would constitute the measure at issue for the
purposes of Articles X:1 and X:2 of the GATT 1994. Rather, it argues, the measure at issue would
instead be the "administrative instruction". The European Communities submits that the complainants
have not made such a claim. 1305 The Panel will treat the various statements made by the Chair of the
Customs Code Committee and the BTI as evidence and not as "measures at issue".
(c) The United States' and Chinese Taipei's claim under Article X:1 of the GATT 1994
(i) Main claim of the parties
The arguments of the Parties
7.1009 The United States and Chinese Taipei assert that the measures at issue fall within the scope
of Article X:1 of the GATT 1994 as they constitute regulations or administrative rulings of general
application pertaining to the classification of produc ts for customs purposes. They claim further that
the measures at issue were made effective upon the votes in the Customs Code Committee in October
2006 and April 2007, but that they were published only in May 2008 (i.e., more than one year later).
As a consequence, they argue, the European Comm unities violated its obligation under Article X:1 to
publish promptly the measures at issue once they were made effective.

1302 Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review, para. 81:

"In principle, any act or omission attributable to a WTO Member can be a measure of that
Member for purposes of dispute settlement pro ceedings. The acts or omissions that are so
attributable are, in the usual case, the acts or omissions of th e organs of the state, including
those of the executive branch."

1303 See paras. 7.1048 and 7.1128 et seq.
1304 Chinese Taipei's response to Panel question No . 156. See also United States' response to Panel
question No. 156 and Chinese Taipei's comments on the European Communities' responses to Panel question
Nos. 163 and 165.
1305 European Communities' response to Panel question No. 155.

7.1010 The European Communities responds that the measures at issue do not constitute a "law,
regulation, judicial decision or administrative ruling of general application" in the sense of Article X:1
of the GATT 1994. According to the European Comm unities, "this is, in particular, because of the
factual features of the CNEN such as their non-bi nding nature combined with their essentially and
inherently informative character".
1306 Furthermore, the identified measures at issue are merely
"preparatory acts" that were not "made effective". 1307 In the alternative, the European Communities
argues that the measures at issue were published promptly and in such a manner as to allow
governments and traders to become acquainted with them.1308
7.1011 Of the third parties, only the Philippines submits arguments in relation to Article X:1. The
Philippines argues that the publication of the CNEN on 7 May 2008 i.e. more than one year after
having been adopted by the Customs Code Committ ee in October 2006 and April 2007 – is contrary
to Article X:1 of the GATT 1994.
1309
Consideration by the Panel
7.1012 The Panel begins its analysis by recalling the text of Article X:1 of the GATT 1994:
"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 therefore, or affecting their sale, distribution, transportation,
insurance, warehousing inspection, exhibiti on, processing, mixing or other use, shall
be published promptly in such a manner as to enable governments and traders to
become acquainted with them. Agreements affecting international trade policy which
are in force between the government or a governmental agency of any contracting
party and the government or governmental agency of any other contracting party shall
also be published. The provisions of this paragraph shall not require any contracting
party to disclose confidential information which would impede law enforcement or
otherwise be contrary to the public inte rest or would prejudice the legitimate
commercial interests of particular enterprises, public or private."
7.1013 In examining the provisions of Article X:1 of the GATT 1994, the Appellate Body in
EC - Poultry held that:
"Article X relates to the publication and administration of 'laws, regulations, judicial
decisions and administrative rulings of ge neral application', rather than to the
substantive content of such measures".
1310
7.1014 The Panel in EC – Selected Customs Matters stated that:
"[T]he title as well as the content of the various provisions of Article X of the GATT
1994 indicate that that Article, at least in part, is aimed at ensuring that due process is

1306 European Communities' first written submission, para. 310.
1307 European Communities' second oral statement, para. 92; European Communities' response to Panel
question No. 154.
1308 European Communities' first written submission, para. 305; European Communities' comments to
the United States' and Chinese Taipei's responses to Panel question No. 159.
1309 Philippines' third party submissions, paras. 40-41.
1310 Appellate Body Report on EC – Poultry, para. 115.

accorded to traders when they import or export [...] In this regard, we note that Article
X:1 of the GATT 1994 requires that customs laws, regulations etc. should be
published 'in such a manner as to enable governments and traders to become
acquainted with them' [...].This due pr ocess theme, which would appear to be
reflected in each of sub-paragraphs of Article X of the GATT 1994, has been referred
to by the Appellate Body when interpreting that Article."
1311
7.1015 These statements confirm our understanding that Article X:1 of the GATT 1994 is primarily
concerned with the publication of "laws, regulations , judicial decisions and administrative rulings of
general application" as opposed to the content of su ch measures. Paragraph 1 also reflects the "due
process" concerns that underlie Article X as a whol e. In particular, Article X:1 addresses the due
process notion of notice by requiring publication that is prompt and that ensures those who need to be
aware of certain laws, regulations, judicial decisions and administrative rulings of general application
can become acquainted with them.1312
7.1016 We will address the legal questions before us by following a five-step analysis. First, we will
determine whether the measures at issue are "laws, regulations, judicial decisions [or] administrative
rulings of general application" within the meaning of Article X:1 of the GATT 1994. Second, if the
answer to this question is in the affirmative, we will assess whether the measures at issue "pertain to
the classification or the valuation of products for cu stoms purposes, or to rates of duty, taxes or other
charges, or to requirements, restrictions or prohi bitions on imports or exports or on the transfer of
payments therefore, or affecting their sale, di stribution, transportation, insurance, warehousing
inspection, exhibition, processing, mixing or other u se". Third, if this assessment is also in the
affirmative, we will determine whether the measur es at issue were "made effective" within the

1311 Panel Report on EC - Selected Customs Matters, para. 7.107, as upheld by the Appellate Body. In
that case, the Panel recalled that the Appellate Body in US - Underwear, DSR 1997: I, p. 29 referred to the
fundamental importance of the transparency standards contained in Ar ticle X of the GATT 1994 and stated that
Article X has due process dimensions.
1312 In this context, we also refer to the Appellate Body in US – Underwear, finding that also
Article X:2 "embod[ies] 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 know n as the principle of transp arency and has obvious due
process dimensions." According to the Appellate Body, the "essential implication" of this due process
dimension is "that Members and other persons affected, or likely to be affected, by governmental measures
imposing restraints, requirements and other burdens, shou ld have a reasonable opportunity to acquire authentic
information about such measures and acc ordingly to protect and adjust their activities or alternatively to seek
modification of such measures" (Appellate Body Report on US - Underwear, DSR 1997:I, p. 29). We consider
that this statement, although addressing Article X:2, is equally applicable to Article X:1. We further note that in
China – Publications and Audiovisuals Products, the Panel in para. 7.28 recalled that "[t]he Appellate Body has
previously found that the obligation to afford due process is 'inherent in the WTO dispute settlement system' and
it has described due process requirements as 'fundamental to ensuring a fair and orderly conduct of dispute
settlement proceedings". (Panel Report on China - Audiovisuals Products; para. 7.28 (quoting, respectively, the
Appellate Body Reports on Chile - Price Band System , para. 176 and on Thailand - H-Beams, para. 88). That
Panel also recalled the Appellate Body's conclusion that:

"[T]he protection of due process is an essential feature of a rules-based system of adjudication,
such as that established under the DSU. Due process protection guarantees that the
proceedings are conducted with fairness and impartiality, and that one party is not unfairly
disadvantaged with respect to other parties in a dispute." (Panel Report on
China - Publications and Audiovisuals Products , para. 7.28 (quoting the Appellate Body
Report on US - Continued Suspension, para. 433).

meaning of the provision. We will then consider , as a fourth analytical step, the moment of
publication in order to determine whether it was "prompt" vis-à-vis the moment the measures were
"made effective". Fifth, if the response to the latte r is also in the affirmative, we will progress to the
last analytical step and consider whether the "p rompt" publication was done "in such a manner as to
enable governments and traders to become acquainted with them."
(ii) Whether the measures at issue are laws, regul ations, judicial decisions or administrative
rulings of general application pertaining to the classification of products for customs
purposes
Arguments of the parties

7.1017 The United States and Chinese Taipei argue that the measures at issue are either
"regulations" or "administrative rulings" of "general application" within the meaning of Article X:1 of
the GATT 1994 that "plainly pertain" to the classification of products for customs purposes. 1313
Chinese Taipei submits that the measures at issue are regulations or administrative rulings, within the
meaning of Article X:1 of the GATT 1994, even if they are not formally called "regulations" or
"administrative rulings". In Chinese Taipei's view, it is the content and substance of the measure that
ultimately determine whether it is indeed a "regulatio n" or "administrative ruling", not the label given
to it under domestic law. 1314 According to the United States, the measures at issue, in conjunction
with the CN, are administrative rulings since "the y are used by administrative authorities in the
member States as a basis for determining tariff classification of an entire category of merchandise".1315
7.1018 The United States and Chinese Taipei further submit that the measures at issue are of "general
application". The United States argues that "amendments to the CN Explanatory Notes, in conjunction
with the CN, are used by administrative author ities in the EC member States as a basis for
determining tariff classification of an entire cate gory of merchandise" and that they apply to "all
set top boxes with a communication function imported into the EC". 1316 It adds that the "CNEN set
forth rules and norms that are intended to have gene ral and prospective application" and that they are
applied by the EC customs authorities "to all importe rs to ensure uniformity and administration of the
CN".1317 Chinese Taipei submits that a measure is of "g eneral application" when it applies to a range
of situations or cases, rather than being limited in its scope of application. It also points out that the
CNEN relating to STBCs "apply to a range of situa tions or cases and affect an unidentified number of
economic operators. They are thus of general application".1318
7.1019 The European Communities responds that the measures at issue do not constitute a "law,
regulation, judicial decision or administrative ruling of general application" in the sense of Article X:1
of the GATT 1994. According to the European Commun ities, "this is, in particular, because of the
factual features of the CNEN such as their non-bi nding nature combined with their essentially and
inherently informative character". 1319 The European Communities argu es that "[i]t is a well known
and settled issue within the EC legal system th at while Explanatory Notes to the CN may be

1313 United States' first written submission, para. 115; Chinese Taipei's first written submission,
para. 465.
1314 Chinese Taipei's second written submission, pa ras. 259-260 (citing the Appellate Body Report on
US – Corrosion-Resistant Steel Sunset Review, fn. 87).
1315 United States' first written submission, para. 114; United States' second written submission,
para. 121.
1316 United States' first written submission, para. 114.
1317 United States' response to Panel question No. 121.
1318 Chinese Taipei's first written submission, para. 467.
1319 European Communities' first written submission, para. 310.

considered as 'an important aid for interpreting' the CN, they do not have a legally binding force and
cannot alter the CN"
1320, nor can they "preclude the exercise of discretion" by the customs
authorities.1321 The European Communities explains that the EC member States, when classifying
imported goods, have to base their classification on the CN and the interpretative rules therein
(GIR 1-6) and not on a CNEN. The European Communities submits that if some EC member States
refer to a CNEN, "it is merely to inform the econom ic operator that with respect to its product, the
Commission has already conducted the interpretative exercise and taken a non-binding view that the
CN should be interpreted in a particular way".
1322 The European Communities further explains that
the CNEN only comes into play at the eight-digit level of the CN 1323, and that "the CNEN serves to
confirm the classification made on the basis of the CN, but it is not itself the legal reason and basis for
that classification".1324 It argues that this is confirmed by th e complainants' own exhibits, which show
that some EC member States were classifying certain STBCs with a hard disk in dutiable CN codes
well before the challenged CNEN was adopted by th e Commission, and well before it was even voted
upon in the Customs Code Committee.
1325
7.1020 Chinese Taipei responds that "the fact that the European Court of Justice has stated that the
CNEN are 'not legally binding' is not dispositiv e of the issue whether they constitute 'laws,
regulations, judicial decision or administrative rulings of general application' and thus fall within the
scope of Article X:1 of the GATT 1994". It argues that the content and the substance of the CNENs

1320 European Communities' first written submission, para. 289; European Communities' second written
submission, para. 69 (citing the European Court of Justice (Develop Dr Eisbein), paras. 20-23 (Exhibit EC-56)).
1321 European Communities' second written submission, para. 55.
1322 European Communities' first written submission, para. 315. European Communities' second written
submission, para. 55. However, when the European Communities was asked by the Panel about the flexibility
EC member States' customs authorities have to classify a product contrary to the tariff heading as indicated in
the CNENs, it responded, in part, that the "CNEN reflect a Commission's view on how the CN should be
interpreted and applied with respect to a certain product or a category of product at issue [...]. If a Member State
deviates in its classification practice from the appr oach taken in a CNEN, the Commission can institute
infringement proceedings before the European Court of Ju stice against such a Member State [...]. Hence, with
some simplification, the flexibility which the Panel asks about can be described as a flexibility to take a view
different from that expressed by a non-binding opinion on the interpretation of a binding legislation, with the
caveat that the authority expressing the non-binding opinion can try to convince the Member State that it is right
before the court." (European Communities' response to Panel question No. 91). Responding to another question
posed by the Panel, the European Communities also mentioned that it cannot be excluded that national customs
authorities would classify a given produc t differently from the CNEN but that "[i]n such a case [...], there is a
range of tools available to unify the classification" (European Communities' response to Panel question No. 23).
1323 European Communities' response to Panel question No. 83 (explaining that "[t]he classification
exercise begins, in accordance with GIR 1, with an examination of the terms of the 4-digit head ing, rather than
an 8-digit level analysis. If a set top box that is considered at this level contains a tuner and technological
elements allowing it to perform a communication function, it will fall under heading 8528. If the same set top
box also contains a hard disk performing a recording or reproducing function that qualifies it as a video
recorder, it will be classified in head ing 8521.[...] Once it is determined that the product at i ssue falls within
heading 8528 (be it by virtue of GIR 1 or GIR 3, for example), then the relevant subheading at 6- and,
ultimately, a 8-digit level will have to be identified. It is only at the 8-digit level that the CNEN comes into
play. It acts as a confirmation of a correct classification analysis.").
1324 European Communities' second oral statement, para. 53 (cross- referencing with the European
Communities' response to Panel question No. 83).
1325 European Communities' second oral statement, para. 53 (citing Exhibit US-28 and cross-
referencing with the European Communities' first wr itten submission, para. 321). See also European
Communities' response to Panel question No. 83 (explaining that the CNEN at issue is expressed "in a rather
categorical language (e.g. products with a hard disk drive performing a recording or reproducing function are
excluded and classified elsewhere)" to reflect the fact that CNENs "are drafted with an understanding of the
products as they currently exist in the market...").

are the elements that matter to qualify this inst rument as a law, regulation, judicial decision or
administrative ruling of general application, not its title.
1326 Chinese Taipei also asserts that despite
the repeated claims of the Eur opean Communities that CNEN are not legally binding, an examination
of their legal status confirms that they are "in fact" legally binding. 1327 Just because CNENs cannot
alter the scope of the CN itself does not mean that EC customs authorities would be free to disregard
them. More specifically, Chinese Taipei considers that the CNENs are legally binding for various
reasons. First, a BTI will cease to exist when contrary to a CNEN. 1328 Second, as the statements of
the Chair of the Customs Code Committee prove, EC customs authorities must follow CNENs. 1329
Third, EC member States that deviate from the content of a CNEN, and collect less import duties as a
result thereof, are considered liable and the Co mmission has the option of instituting proceedings
against such EC member States. Fourth, since CN ENs are "tools for ensuring a uniform classification
practice within the EC", they would not be able to ensure such uniformity if EC member States were
free to decide whether to apply them or not.1330
7.1021 The European Communities confirms that the complainants are "correct" in saying that the
CNENs fulfil a certain function in its customs system – a function which is well-explained in the case-
law of the European Court of Justice. Accordi ng to the European Communities, however, what the
complainants "misunderstand" is that such case-la w and statements of the European Communities on
the significance of CNENs in the EC for classifi cation purposes only relate to CNENs which are
existing, i.e., to CNENs which have been duly ad opted and published by the European Communities.
The European Communities argues that this situation does not and cannot relate to "events" such as
"mere drafts " (and even less so to "intermediate drafts"); discussions; EC member States' votes; or
Customs Code Committee opinions delivered in the "management procedure". According to the
European Communities, "[t]hese events simply do not have any legal effect on the interpretation and
application of the CN".
1331
Consideration by the Panel
7.1022 The Panel is called upon to determine whethe r the CNEN amendments identified by the
United States and Chinese Taipei are "laws, regulations, judicial decisions or administrative rulings of
general application" that pertain to one of the sp ecific subjects enumerated in Article X:1 of the
GATT 1994. As indicated above, first, we will cons ider whether the CNEN amendments are a "law,
regulation, judicial decision [or] administrative ruling" within the meaning of Article X:1. Second, if
the answer to that question is in the affirma tive, we will then consider whether the CNEN
amendments are of "general application". Finally, if that assessment is also affirmative, we will
consider whether the CNEN am endments qualify as pertaining to one of the specific subjects
enumerated in Article X:1.
7.1023 We now turn to our first question. Whether a given instrument constitutes a "law",
"regulation", "judicial decision" or an "administr ative ruling" of general application within the

1326 Chinese Taipei's second written submission, para. 260.
1327 Chinese Taipei's second written submission, para. 132.
1328 The United States makes a similar point (see United States' second written submission, para. 35).
1329 In particular, the two complainants referred to the statements of the Chairman of the Customs Code
Committee during the 413th, 432nd and 433rd meetings, see para. 7.1050 and following paras. below.
1330 Chinese Taipei's second written submission, paras. 61-70 (adding that such "infringement
proceedings" would be based on Article 10 of the EC Treaty); and paras. 132 and 261-268.
1331 European Communities' second oral statement, paras. 88-90.

meaning of Article X:1 must be based primarily on the content and substance of the instrument, and
not merely on its form or nomenclature.
1332 Most recently, the Appellate Body has stated that:
"[F]irst ... the way in which a Member's domestic law characterizes its own measures,
although useful, cannot be dispositive of the characterization of such measures under
WTO law. Secondly, 'the intent, stated or otherwise, of the legislators  is not 
conclusive' as to such characterization."1333
7.1024 Accordingly, "laws, regulations, judicial deci sions and administrative rulings" can encompass
more than those instruments formally character ized as such by a WTO Member. Otherwise, WTO
Members themselves could determine which provisi ons would be subject to WTO obligations under
Article X:1 of the GATT 1994 merely by the labelli ng of those instruments. Hence, we will first
consider what is meant by "laws"; "regulations"; "judicial decisions" and "a dministrative rulings" in
the sense of Article X:1, and in terms of substance, rather than form or nomenclature. Subsequently,
we will consider whether the CNENs at issue fall within laws, regulations, judicial decisions or
administrative rulings under Article X:1.
7.1025 Substantively, a "law" is "a ru le of conduct imposed by secular authority"; a rule which "a
particular State [...] may enforce by imposing penalties". 1334 A "regulation" is "a rule prescribed for
controlling some matter, or for the regulati ng of conduct; an authoritative direction". 1335 A "ruling" is
"the action of governing or exercising authority, the exercise of government, authority, control,
influence" or "an authoritative pronouncement". 1336 The adjective "administrative" indicates that it is
a ruling from an administrative body. Finally, a "judicial decision" is an action or pronouncement by
a judicial body or authority.1337

1332 A similar approach was taken by the Appellate Body in US – Corrosion-Resistant Steel Sunset
Review, with respect to a similar language used in Article 18.4 of the Anti-Dumping Agreement ("…laws,
regulations and administrative procedures …"). The Appellate Body stated:

"We observe that the scope of each element in the phrase 'laws, regulations and administrative
procedures' must be determined for purposes of WTO law and not simply by reference to the
label given to various instruments under the domestic law of each WTO Member. This
determination must be based on the content and substance of the instrument, and not merely
on its form or nomenclature. Otherwise, the obligations set forth in Article 18.4 would vary
from Member to Member depending on each Member's domestic law and practice." (Footnote
87 to para. 87).

1333 Appellate Body Report on China – Auto parts , para. 178 (footnotes omitted) (citing the Appellate
Body Report on US – Softwood Lumber IV (Article 21.5 – Canada) , para. 82, which, by its turn, refers to the
Appellate Body Report on US – Softwood Lumber IV , para. 56). In China – Auto parts , the Appellate Body
further noted, with approval, the Panel's recognition that "a degree of caution must be exercised in attributing
decisive weight to characteristics th at fall exclusively within the contro l of WTO Members, 'because otherwise
Members could determine by themselves which of the provisions would apply to their charges'." Appellate
Body Report on China – Auto parts, para. 178 (footnote omitted).
1334 The Shorter Oxford Dictionary (2002), p. 1544.
1335 The Shorter Oxford Dictionary (2003), p. 2516. In the GATT Panel Report on Canada – FIRA ,
para. 5.5, the Panel explained that the term "regulation" covered "mandatory rules applying across-the-board".
1336 The Shorter Oxford Dictionary (2003), p. 2630.
1337 We note that the Panel in Dominican Republic – Import and Sale of Cigarettes understood the term
"judicial decisions" in Article X:1 as meaning "pronouncements with the force of res judicata issued by judicial
authorities as a result of a legal process." (Panel Report on Dominican Republic – Import and Sale of Cigarettes,
para. 7.404).

7.1026 Substantively, and when read as a whole within the context of Article X:1, the phrase "laws,
regulations, judicial decisions and administrative rulings" reflects an intention on the part of the
drafters to include a wide range of measures that have the potential to affect trade and traders.
1338 A
narrow interpretation of the terms "laws, regulati ons, judicial decisions and administrative rulings"
would not be consistent with this intention, and would also undermine the due process objectives of
Article X referred to above.1339
7.1027 Based on the foregoing, we observe that the ordinary meanings of the terms "laws,
regulations, judicial decisions and administrative rulings" indicates that the instruments covered by
Article X:1 range from imperative rules of conduct to the exercise of influence or an authoritative
pronouncement by certain authoritative bodies. Accord ingly, we consider that the coverage of
Article X:1 extends to instruments with a degree of authoritativeness issued by certain legislative,
administrative or judicial bodies. This does not mean, however, that they have to be "binding" under
domestic law. Hence, the fact that CNENs are not legally binding under EC law does not preclude
them from being contemplated by the terms "laws, regulations, judicial decisions [or] administrative
rulings" under Article X:1. However, whether a par ticular measure has a degree of authoritativeness
such that it would be properly characterised as "laws, regulations, administration rulings or judicial
decisions" requires a case-by-case assessment of the particular factual features of the measure at issue.
7.1028 We now turn to consider whether the CNEN amendments at issue have a degree of
authoritativeness such that it would be consider ed a "law, regulation, judicial decision or
administrative ruling" within the context of Article X:1. In this respect, we note the explanations from
the European Communities that the CNENs are proposed by the Commission and discussed amongst
the Commission and the customs authorities of th e 27 EC member States in the Customs Code
Committee; that the "CNEN reflect a Commission's view on how the CN shoul d be interpreted and
applied with respect to a certain produc t or a category of product at issue"
1340; that the CNENs
"constitute an important means of ensuring the uniform application of the Common Customs Tariff by
the customs authorities of the Member States" 1341; that they are "a valid aid to the interpretation of the
tariff"1342; that the CNENs are "guidance"1343; and that EC member States "decide on the classification
of products in individual cases" and that "in this role" they "consult" the CNEN. 1344 Furthermore, we
note that the complainants have submitted BTIs issued by EC member States customs authorities
mentioning the CNEN as a "classification justification" 1345; that CNEN can have legal consequences
for BTIs1346 and that "if a Member State deviates in its classification practice from the approach taken

1338 In US – Corrosion-Resistant Steel Sunset Review , the Appellate Body similarly found that the
expression "laws, regulations and administrative proce dures" in Article 18.4 of the Anti-Dumping Agreement
seemed to encompass the entire body of generally applicable rules, norms and standards adopted by Members in
connection with the conduct of anti-dumping pr oceedings. (Appellate Body Report on
US - Corrosion Resistant Steel Sunset Review, para. 87).
1339 We observe, however, that Article X:1, as oppose d to Article X:2, does not deal with "measures of
general application" but only with "laws, regulations, judicial decisions and administrative rulings of general
application".
1340 European Communities' response to Panel question No. 91.
1341 European Communities' second written submission, para. 69.
1342 European Communities' second written submission, para. 69.
1343 European Communities' second oral statement, para. 30.
1344 European Communities' response to Panel question No. 23.
1345 See para. 7.1064 below.
1346 See Article 12(5)(a)ii of the CCC (Exhibits US-19; TPKM-16), which provides that BTI shall cease
to be valid "where it is no longer compatible with the in terpretation of one of the nomenclatures referred to in
Article 20(6): at Community level, by reason of amendments to the Explanatory notes to the combined
nomenclature".

in a CNEN, the Commission can institute infringeme nt proceedings before the European Court of
Justice against such a Member State".
1347
7.1029 In the Panel's view, it is clear that CNENs are important in enabling the European
Communities to maintain a uniform application of the Common Customs Tariff within its territory.
Although the European Communities has noted th at CNENs do not "preclude the exercise of
discretion" by member State customs authorities, it is apparent that there is a clear expectation that
such discretion will be exercised in a certain fash ion and that infringement proceedings may apply in
instances where such discretion is not so exercised. The Panel also finds it relevant that CNENs are
issued by the Commission, a body with undisputed authority within the EC for ensuring the uniform
application of the Customs Code Tariff, and with th e power to challenge interpretations not consistent
with its own. Indeed, according to Regulation No. 2658/87, as amended, the Commission establishes
and manages the CN.
1348 In addition, according to its Article 9, the Commission adopts Explanatory
Notes. Moreover, the Panel notes that BTIs wi ll cease to be valid where they are no longer
compatible "at Community level" with "the explanatory notes [...] adopted for the purposes of
interpreting the rules". 1349 In these circumstances, the Panel considers that CNENs have a degree of
authoritativeness such that they may be properly ch aracterized as a "law, regulation, administration
ruling or judicial decision" as t hose terms are used in Article X:1. The fact that CNENs are not
"legally binding" under EC law does not diminish this conclusion.1350
7.1030 In our view, the transparency and due process purpose of Article X:1 would be defeated if
CNENs, which evidently play a key role in EC cl assification practice, were not be covered by the
obligations in Article X:1. We consider this s upports our interpretation that CNENs qualify as "law,
regulation, judicial decision [or] administrative ruling".
7.1031 In light of this affirmative finding, we proceed to our second question: whether CNENs are of
"general application". We note the European Co mmunities' argument that the measures cannot be of
general application because of their "draft" characte r. We will consider their alleged draft character
later, when analyzing the terms "made effective" (see paragraphs 7.1047-7.1048 below).
7.1032 In EC – Selected Customs Matters, the Panel found that:
"'[L]aws, regulations, judicial decisions and administrative rulings of general
application' described in Article X:1 of the GATT 1994 are laws, regulations, judicial
decisions and administrative rulings that apply to a range of situations or cases, rather
than being limited in their scope of application".1351
7.1033 Similarly, in US – Underwear , the Appellate Body upheld the Panel's interpretation that an
administrative order was of "general application" "to the extent that the restraint affects an
unidentified number of economic operators, including domestic and foreign producers."1352

1347 European Communities' response to Panel question No. 91.
1348 See Council Regulation No. 2658/87, Articles 1; 2 and 6 (Exhibits EC-49; US-13 and TPKM-5).
1349 See Article 12(5)(a)ii of the CCC (Exhibits US-19; TPKM-16).
1350 See paragraphs 7.1037-7.1062 in the Final Reports below. Assuming arguendo that the alleged
"draft" character of the CNENs were relevant to the matters discussed in this section, for the reasons described
in those paragraphs, the Panel does not consider the so- called "draft" character of the CNENs to alter its views
on whether the measures in question are "laws, regulations, judicial decisions and administrative rulings".
1351 Panel Report on EC – Selected Customs Matters, para. 7.116.
1352 Panel Report on US - Underwear, para. 7.65.

7.1034 In line with the above understanding by the Panel in EC – Selected Customs Matters and also
with that of the Appellate Body in US – Underwear, we consider that the CNEN amendments at issue
in this dispute are of "general application" within the meaning of Article X:1 of the GATT 1994. This
is so because the application of a CNEN is not limited to a single import or a single importer. Rather,
the objective of the CNEN is to ensure the unifo rm application of the Common Customs Tariff to all
products falling under a specific CN code upon im portation into the European Communities. The
CNEN at issue, for example, describes which STB Cs are eligible for duty-free treatment under CN
code 8528 12 91, indicating that STBCs with WLAN-, ISDN- or Ethernet- connectivity or with a
recording or reproduction device such as a hard disk or a DVD-drive are excluded from duty-free CN
code 8528 12 91. The CNEN at issue are thus of "g eneral application" within the meaning of Article
X:1 of the GATT 1994.
7.1035 Finally, we need to consider whether the CN EN pertain to one of the specific subjects
enumerated in Article X:1. According to Article X:1, the CNEN should:
- pertain to "the classification or the valua tion 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 therefore" or
- affect "their sale, distribution, trans portation, insurance, warehousing inspection,
exhibition, processing, mixing or other use".
1353
7.1036 We agree with the United States and Chinese Taip ei, that, at the very least, the measures at
issue "pertain[] to the classification of products for customs purposes". 1354 This much is evident from
a superficial reading of the measures. In this r espect, we again highlight the European Communities'
confirmation that the CNENs are "an important me ans of ensuring the uniform application of the
Common Customs Tariff by the customs authorities of the EC Member States and as such may be
considered a valid aid to the interpretation of the tariff".
1355
7.1037 In this section, we first determined that the CNEN amendments are "laws, regulations,
judicial decisions [or] administrative rulings". S econd, we determined that the CNEN are of general
application". Finally, we determined that CNEN s "pertain to the classification of products for
customs purposes". We can therefore continue our analysis and consider whether, and if so when, the
CNEN amendments were "made effective" within th e meaning of Article X:1 of the GATT 1994. If
we make a positive determination in that regard , the only outstanding issues under Article X:1 would
be whether the CNEN amendments were "publishe d promptly" and, if so, whether they were
published "in such a manner as to enable governments and traders to become acquainted with them".

1353 We understand the disciplines of Article X:1 to include a third group, not at issue in the present
dispute, i.e.: "[a]greements affectin g international trade policy which are in force between the government or a
governmental agency of any contracting party and the government or governmental agency of any other
contracting party ...".
1354 The Panel notes that the European Communities does not seem to raise any objections in this
regard. Rather, the European Communities confirmed th at CNENs are an important aid for interpreting the CN
(see, for example, European Communities' first written submission, para. 289).
1355 European Communities' second written submission, para. 69.

(iii) Whether the draft CNENs were "made effective" in October 2006 and/or April 2007
Arguments of the parties

7.1038 The United States and Chinese Taipei argue that the CNEN amendments were "made
effective" upon voting in the Customs Code Committee. The votes were cast in October 2006 for the
first measure at issue (the CNEN amendment con cerning the exclusion for certain types of modems)
and in April 2007 for the second measure at issue (t he CNEN amendment concerning the exclusion of
set top boxes with a recording or reproduction device such as a hard disk or a DVD drive).1356
7.1039 In the United States' and Chinese Taipei's view, the term "made effective" requires a factual
assessment of whether the CNEN amendment has been made "applicable". 1357 Such assessment
should be made irrespective of the measure's form al status or legal qualification in the Member's
domestic legal order.1358 Accordingly, the characterization as "d raft" does not change the fact that the
CNEN amendments have been "made effective". 1359 Chinese Taipei points out that "made effective"
means "having an effect or result, actual, de facto, in effect". Thus, a law, regulation, judicial decision
or administrative ruling of general application is ma de effective as of the date a domestic authority
may begin to apply that measure, even if it chooses to not yet apply it. 1360 Such understanding, it
argues, is confirmed by the Spanish and the French versions of Article X:1, which translate "made
effective" into "haya puesto en vigor" and "re ndus executoires", respectiv ely. The United States
emphasizes that Article X:1 mentions "made effectiv e" and not "adopt", which is used elsewhere in
the GATT 1994. Thus, it claims, it would be incorrect to assume that there is no significance that the
drafters chose to use the different term "made effective" in Article X:1. 1361 Nor, submits the United
States, would the European Communities' approach make sense in the context of Article XX(g) of the
GATT 1994, which also uses the term "made effective", since nothing in that provision would require

1356 Chinese Taipei's response to Panel question No. 156.
1357 Chinese Taipei's response to Panel question No. 154; United States' second written submission,
paras. 122-123.
1358 Chinese Taipei's comments on the European Communities' response to Panel question No. 154.
1359 United States' response to Panel question No. 155.
1360 United States' and Chinese Taipei's responses to Panel question Nos. 154-156 and their respective
comments on the European Communities' responses to those Panel questions; Chinese Taipei's second written
submission, paras. 272-273. In its response to Panel question No. 154, Chinese Taipei adds that "[a] measure of
general application may be 'effective' but not yet 'enforced'. In this respect, 'made effective' and 'enforced'
suggest a two-step situation. Generally, a WTO Member fi rst makes a measure of general application 'effective'
(Article X:1), and then it enforces the said measure (Article X:2). However, in this case, there is no substantive
distinction --- the measure was both made effective and enforced before it was published, as it was both
applicable and in fact applied by EC customs authorities." See also Chinese Taipei's comments on the European
Communities' response to Panel Question No. 154. Chinese Taipei further argues that the European
Communities' interpretation that Article X:1 requires "f ormal adoption" of the measure "could result in an
absurd situation that an importer could be requested to comply with, e.g. new unpublished valuation guidelines
but there would not be any infringem ent of Article X simply because th e competent minister had not yet
formally signed these guidelines". It points out that su ch an interpretation is precisely what Article X tries to
avoid; Chinese Taipei's comments on the European Communities' response to Panel question No. 154.
1361 United States' comments on the European Communities' responses to Panel question Nos. 154-156.
The United States also refers to Article XII:3(a) of th e GATT 1994, which uses the word "adopt", and also to
Articles XX; XXXVI:9 and XXXVII:3(b) of the GATT 1994, which use the word "adoption".

that the measures be "adopted" in conjunction with restrictions on domestic production or
consumption.
1362
7.1040 In their view, various statements of the Chai rman of the Customs Code Committee and BTIs
issued by EC member State customs authorities prove that the CNEN amendments were "made
effective" once voted in the Customs Code Committee 1363, even before their formal adoption and
official publication.1364 The BTIs, for example, would demonstrate that the EC customs authorities
have relied on the CNEN as a "classification justifi cation" to classify certain STBCs in a dutiable CN
code.1365
7.1041 The European Communities responds that "made effective" means "entered into force" 1366
and that – under EC law - CNEN amendments only en ter into force after adoption by the Commission
and publication in the EU Official Journal. 1367 t emphasizes that the Customs Code Committee does
not "adopt" measures. The vote in the Customs Code Committee is merely a "step" in the adoption
procedure. According to the European Commun ities, the "Customs Code Committee opinions
delivered in the management procedure ... simply do not have any legal effect on the interpretation
and application of the CN".1368 Since the CNEN amendments were "adopted" by the Commission only
in April 2008, the CNEN amendments were not "made effective" before that time. The CNEN
amendments were therefore merely "preparatory act s" to which, in the Eu ropean Communities' view,
Article X:1 does not apply.1369 Allowing "preparatory" acts to fall within the disciplines of Article X:1
would mean that draft bills and laws could be challenged as they are "discussed in their
parliaments."1370 Such an understanding, claims the Eu ropean Communities, would turn these GATT
disciplines on their head and result in WTO Members' administrations not being able to function. It
would mean that at the moment a WTO Member issu ed a "preparatory act", it would also have to
publish it, even though the act itself would not yet have been adopted.
1371 The European
Communities considers that this view is supported by the French and Spanish language versions of
Article X:11372, and argues that the general language "made effective" was chosen to accommodate the
inclusion of "judicial decisions" within the scope of Article X:1.1373
7.1042 Regarding the statements by the Chairman of the Customs Code Committee, the European
Communities affirms that the statement by a "Commi ssion official presiding" over the Customs Code
Committee meeting "does not create any rights or obligations for the Member States". Such statement
"has no law-creating effect" as "that would be beyo nd any powers of the Commission official acting

1362 United States' comments on the European Communities' responses to Panel questions Nos. 154-
156. The United States also refers to Article XV:9(b) of the GATT 1994, in which the term "make effective" is
used but which, according to the United States, again would make no sense to read as meaning "adopted".
1363 Chinese Taipei's response to Panel question No . 156. See also United States' second written
submission, para. 122.
1364 United States' second written subm ission, para. 122; Chinese Taip ei's first written submission,
para. 473; Chinese Taipei's response to Panel question No. 154.
1365 United States' response to Panel question No. 122.
1366 European Communities' response to Panel question No. 154.
1367 The European Communities submits that a measure can only "enter into force" when it can no
longer be modified or withdrawn by the government without undergoing again the legislative or quasi-
legislative process; European Communities' responses to Panel question Nos. 154 and 156.
1368 European Communities' second oral statement, para. 88-90.
1369 European Communities' response to Panel question No. 154.
1370 European Communities' response to Panel question No. 156.
1371 European Communities' responses to Panel question Nos. 155 and 156.
1372 European Communities' response to Panel question No. 154.
1373 European Communities' response to Panel question No. 154.

as Chairman of the Customs Code Committee (or even beyond any powers of the Customs Code
Committee as a whole)."
1374 Consequently, those statements ca n by no means be interpreted as
requiring the EC member States to comply with a draft CNEN. According to the European
Communities, such an interpretation would be ma nifestly illegal under EC law, the EC Treaty and
Article 249 thereof.1375
Consideration by the Panel
7.1043 The Panel is called upon to determine whether the CNEN amendments at issue were "made
effective" within the meaning of Article X:1 of the GATT 1994. First, we will consider the meaning
of the term "made effective" in Article X:1. Second, we will consider whether the CNEN amendments
at issue were "made effective" and this will include an examination of the various statements of the
Chairman of the Customs Code Committee and of the BTIs submitted by the United States and
Chinese Taipei. Third, should we c onclude that the CNEN amendments were made effective, we will
determine when these amendments were "made effective". Th e latter point is relevant in determining
whether the CNEN amendments were published "promp tly". That issue, however, will be dealt with
in the following section.1376
The meaning of "made effective"
7.1044 We now turn to the first step in our analysis, which is to identify the ordinary meaning of the
term "made effective."
7.1045 We note that the term "made effective" in the context of Article X:1 of the GATT 1994 has
not been addressed by the Appellate Body or by any Panel. However, in US – Gasoline the Appellate
Body held in the context of Article XX(g) of the GATT 1994, that the ordinary meaning of "made
effective when used in connection with a measure - a governmental act or regulation may be seen to
refer to such measure being 'operative', as 'in force', or as having 'come into effect'".1377 In the context
of Article XX(g), the ordinary meaning of "made e ffective" thus indicates that a measure is "made
effective" when it is "operative" and, following the Appellate Body's reasoning, operative means
either "in force" or "come into effect".
7.1046 The Appellate Body's approach suggests that the meaning of "made effective" is not confined
to "officially entered into force". In our view, "m ade effective" also covers measures brought into
effect in practice. In other words, it may include measures that have not yet been formally adopted in
accordance with municipal law. This understanding is supported by the ordinary meaning of
"effective" as "actual, de facto, in effect; (of an order etc.) operative, in force" 1378 and "operative" as

1374 European Communities' response to Panel question No. 92 (further arguing that, if the Chair would
have such powers, there would be no need for a management procedure, for the Commission, or for the Customs
Code Committee at all).
1375 European Communities' response to Panel question No. 92. Article 249 of the EC Treaty (which
became Article 288 of the Treaty on the Functioning of th e European Union with the entry into fo rce of the
Lisbon Treaty) enumerates the EU in struments that are binding, i.e. "Regulations", "Directives" and
"Decisions".
1376 See paras. 7.1069-7.1070 below.
1377 Appellate Body Report on US - Gasoline , DSR 1996:I, page 19 (citing the Shorter Oxford
Dictionary (1993), p. 786) (footnote omitted). Article XX(g) of the GATT 1994 pr ovides in relevant part that
"... relating to the conservation of exhaustible natural resources if such measures are made effective in
conjunction with restrictions on domestic production or consumption".
1378 The Shorter Oxford Dictionary (2002), p. 794.

"[b]eing in operation or force, exerting force or influence".
1379 Neither of these definitions suggests
that "made effective" covers only measures that have officially entered into force.
7.1047 Given the foregoing, we consider that limiting the meaning of "made effective" to include
only measures that have officially entered into force in accordance with municipal law could open the
possibility for WTO Members to avoid the disciplin es of Article X:1, merely by asserting that a
certain "law, regulation, ..." has not yet fo rmally entered into force under municipal law. 1380 T h i s
would run counter to the due process and transpar ency objectives reflected in the requirement in
Article X:1 that governments and traders must be ab le to become acquainted with "laws, regulations,
administrative rulings and judicial decisions" through prompt publication.
7.1048 In conclusion, we are of the view that the term "made effective" under Article X:1 of the
GATT 1994 also covers measures that were brought into effect, or made operative, in practice and is
not limited to measures formally promulgated or that have formally "entered into force". We see no
basis to adopt the more restrictive view proposed by the European Communities, which considers that
"made effective" under Article X:1 refers to meas ures formally adopted un der its domestic system,
i.e., adoption by the Commission.1381 This being so, in circumstances where the relevant measure has
been "made effective", the requirement to publish promptly will arise regardless of its formal adoption
or whether it remains a "draft" measure under the Member's municipal legal order.
Whether the CNEN amendments were made effective before adoption by the
Commission
7.1049 We now proceed to examine the main question under this section, i.e. whether the CNEN
amendments were made effective before their adoption by the Commission. The complainants argue
that the CNEN amendments were made effectiv e upon the voting in the Customs Code Committee;
the European Communities argues that the CNEN amendments were not made effective before their
adoption by the Commission. Thus we need to cons ider whether the measures were made effective at
some time between their vote in the Customs Code Committee and their adoption by the Commission.
7.1050 We recall that the complainants have relied on various Statements of the Chairman of the
Customs Code Committee ("the Chairman's Statements") during its 413th, 432nd and 433rd meetings, as
well as the BTIs issued by certain EC member St ate customs authorities. They argue that this
evidence proves that the CNEN amendments were made effective upon voting in the Customs Code
Committee because it indicates "that the customs authorities of the EC member States must apply" the
CNEN amendments "once the EC Customs Code Co mmittee had issued an opi nion", even before its
formal adoption and official publication. 1382 We further recall that the first measure at issue was
submitted to the Customs Code Committee for an opinion in October 2006. The opinion was
favourable. The second measure at issue was s ubmitted to the Customs Code Committee for an
opinion in April 2007. The opinion was a so-called "no opinion", i.e. there was no qualified majority
in favour (a favourable opinion) or against (a non-favourable opinion).

1379 The Shorter Oxford Dictionary (2003), p. 2006.
1380 That is also why the way in which a Member characterises its own measures under domestic law,
although useful, cannot be dispositive of the char acterization of such measures under WTO law (see
footnote above).
1381 On the issue of whether the measures were adopted through a vote in the Customs Code
Committee, we note that the Commission is the EC body that formally adopts draft CNEN, not the Customs
Code Committee.
1382 United States' second written submission, para. 121; Chinese Taipei's first written submission, para.
473; Chinese Taipei's response to Panel question No. 156, para. 122-123.

7.1051 In analysing this evidence, we will first cons ider the Chairman's statements to determine
whether they support the complainants' arguments: thereafter, we will turn to the BTIs.
7.1052 We start with a description of the Chairman's Statements as reflected in the minutes of the
respective meetings. The minutes of the 413
th Customs Code Committee meeting, which took place
in January 2007, refer to a discussion concerning the implications of CNEN for Set top boxes that had
already been voted on in the Customs Code Committ ee, but not yet "published". In particular, the
Chairman's Statement was as follows:
"Issuing of BTIs: Some MS asked the question 'What is the situation with issuing
BTIs if the measure has already been voted on but still not published (for example,
CNEN on set-top boxes) or if the measure has been voted on but there was no
qualified majority (for example, CNEN on dual use vehicles)?' Chair stated that MS
should follow the BTI guidelines (Point 11 (p. 18 to 19)). Detailed discussion on this
question would be a matter for a meeting of the BTI sector".
1383
7.1053 Point 11 of the "BTI Guidelines"1384 provides that:
"11. Invalidation of BTIs (ex nunc)
A BTI ceases to be valid:
• Where a legal measure, e.g. a regulation is adopted by the Community. For
the sake of coherence and uniformity in the application of the CCT Member
States should not issue new BTIs that are contradictory to a legal measure
which has been voted in the Customs C ode Committee, even if this measure
is not yet published.
• Where the BTI is no longer compatible with the interpretation of one of the
customs nomenclatures, e.g. following amendments to the CN Explanatory
notes, a judgment of the European Court of Justice, or, on international level,
an HS classification opinion or amendments to the HS Explanatory notes."
(emphasis added)
7.1054 The minutes of the 432
nd Customs Code Committee meeting, which took place in October
2007, also made reference to the CNEN for set-top boxes, indicating the following:
"Set top boxes: Some MS raised the issue of publication of the CN Explanatory Notes
explaining the difficulties they encounter in practice. Chair informed that the
publication of the CN Explanatory Notes was planned to be accompanied by the
introduction of the autonomous duty suspension on these products. However, DG
TAXUD was aware of the opposition by a number of MS to an autonomous duty
suspension. Chair reminded the MS not to issue any contradictory BTIs and to follow

1383 Customs Code Committee (413 th meeting) (Exhibits US-75; TPKM -57); See also United States'
first written submission, para. 116 and Chinese Taipei's fi rst written submission, paras. 61 and 373. The Panel
notes that the complainants did not submit any documents regarding such an eventual discussion in the Customs
Code Committee, BTI Sector.
1384 BTI Guidelines (Exhibits US-18; TPKM-85).

the text that had been agreed upon and ha d been made public in the Annex to the
report of respective meeting."
1385
7.1055 The minutes of the 433 rd meeting of the Customs Code Committee, which took place in
October 2007, mention in relevant part:
"Use of statements in the minutes of th e Committee and the application of voted
measures before their publication (Doc TAXUD/0716/2007).
The Chairman presented the working document and invited Member States to reflect
on the choice of the appropriate instrument to ensure uniform tariff classification in
the EU. He pointed out that the adoption of classification regulations or explanatory
notes should be limited to cases where they are the only way to ensure uniform
application. The need to revoke conflicting BTIs is not a sufficient reason to adopt a
classification regulation. The Chairman recommended the increased use of
statements in the reports of the meetings of the Committee instead.
Various Member States supported the use of statements as a mean s to ensure quick
decision-making. One Member State highlighted the importance of having detailed
product descriptions in such statements. Opinions were divided on the question of
whether unanimity or a qualified majority is needed for the adoption of a statement.
As statements do not have legally bindi ng value, it was pointed out that a
classification regulation can still be adopted if afterwards legally binding value is
required. It was suggested to develop a da tabase listing all statements which need to
be applied by the customs administrations. One Member State suggested that a new
box could be added to the template for su bmissions in which the outcome of the
Committee's discussions could be indicated.
The Chairman also recalled that as soon as the Committee has rendered an opinion on
the classification of a specific type of product, no BTI should be issued contrary to
that opinion and that this opinion should be respected by all Member States. It
follows from the above that as soon as an opinion has been voted, Member States can
issue BTIs for the products concerned, even before the measure has been adopted by
the Commission and published in the Official Journal."
1386
7.1056 We now turn to determine whether the Chairman 's Statements support the contention that the
CNEN amendments were "made effective" prior to their formal adoption.
7.1057 The first Chairman's Statement was made during the 413 th meeting, which took place in
January 2007 (i.e. after the October 2006 vote but before the April 2007 vote). We agree with the
European Communities that this first Statement do es not support the view that EC member States
were thereby instructed to bring their classificat ion practices into conformity with the CNEN
amendments at issue upon their vote in the Cust oms Code Committee. In that statement, the
Chairman merely indicated that EC member States should follow BTI Guidelines Point 11.
According to the complainants, Point 11 of the BT I Guidelines makes it clear that a draft CNEN that
was voted upon by the Customs Code Committee shoul d be followed by the EC member States, even

1385 Customs Code Committee (432nd meeting) (Exhibit TPKM-58).
1386 Customs Code Committee (433 rd meeting) (Exhibits US–20; TPKM-17). See also United States'
first written submission, para. 116; United States' second written submission, para. 122; Chinese Taipei's first
written submission, para. 61; Chinese Taipei's second written submission, paras. 64 and 264.

if not yet published in the EU Official Journal.
1387 The Panel disagrees. Point 11, quoted above at
paragraph 7.1053 above, must be looked at as a whole and it consists of two bullets. The
complainants refer to the first bullet. It is true that this first bullet provides that a "legal measure"
should be followed upon its vote in the Customs Code Committee, even if not yet published in the EU
Official Journal. However, this first bullet deals with the interrelationship between BTIs and
regulations, which was not the context in which the firs t Chairman's statement was made. Instead, the
Statement concerned the interrelationship between BT Is and CNEN, which is expressly dealt with in
the second bullet. The second bullet refers to the invalidation of BTIs due to incompatibility with "the
interpretation of one of the customs nomenclatures, e.g. following amendments to the CN Explanatory
notes". It is therefore more plausible that the Ch airman was exhorting EC member States to follow
Point 11, second bullet. 1388 For these reasons, we do not find sufficient basis in this first Statement to
conclude that the CNEN amendments at issue s hould be followed as soon as they are voted upon by
the Customs Code Committee.
7.1058 We now turn to the second Chairman's Statem ent relied upon by the complainants. This
second Statement was made at the 432 nd meeting of the Customs Code Committee, which took place
in October 2007. 1389 Like the first Statement, the second Statement explicitly refers to the
Explanatory notes for set top boxes, reminding "the EC member States not to issue any contradictory
BTIs and to follow the text that had been agreed upon and had been made public in the Annex to the
report of respective meeting." The Statement was made after the October 2006 and the April 2007
vote. The Statement clearly covers the first CN EN amendment at issue, which was "agreed upon"
through a favourable opinion and which was pub lished in the annex to the report of the 407 th meeting
of the Customs Code Committee. As for the second CN EN amendment at issue, we consider that it
too is encompassed within the Chairm an's remarks. Although the refe rence in this Statement is to
"the text that had been agreed upon " (emphasis added), the fact that the second CNEN amendment
received a "no opinion", as opposed to a favourable opinion, does not in our view bring that measure
outside the scope of the Chairman's directi ons. Indeed, the European Communities itself has
explained that both a "favourable opinion" and a "no opinion" indicate that the submitted text will be
adopted by the Commission.
1390 "No opinion" also means that there was no qualified majority to
disagree, i.e. to issue a "non-favourable" opinion. As such, we believe that the "text that had been
agreed upon" covers both measures at issue. In addi tion, we note that the text of the second CNEN
amendment was equally "made public in the Annex to the report of respective meeting", namely as an
Annex to the report of the 420th meeting.

1387 See para. 7.1050 below.
1388 Chinese Taipei itself ack nowledges that Point 11, first bullet "originally referred to classification
regulations" but claims that "it equally applies to CN Ex planatory Notes", see Chinese Taipei's answer to Panel
question No. 122, para. 53.
1389 See para. 7.1054 above.
1390 In the Panel Report on EC – Chicken Cuts, the European Communities indeed stated that:

"The Customs Code Committee is a committee of Member States representatives responsible
for monitoring the adoption of detailed secondary (delegated) legislation by the Commission
(the system is known as the "Comitology" system). The Committee is asked to vote for or
against a particular proposal. A qualified majority vote is required in order for the Committee
to issue either a positive or negative opinion (for the necessary majority, see Article 205 of the
EC Treaty). The adoption of a positive opinion, or the failure to arrive at an opinion, means
that the proposal will be adopted . Only in the event of a negative opinion will the matter be
examined by the Council of the European Union [...]."(emphasis added, European
Communities' response to Panel question No. 55).

7.1059 In the light of our analysis, we are of the vi ew that this second Chairman's Statement, which
expressly relates to CNEN for set top boxes, instruct ed the customs authorities of EC member States
"to follow" the measures at issue once voted upon but before they were formally adopted by the
Commission and officially published in the EU Official Journal. This Statement sent an unambiguous
message to EC member states: an official of the EC, in his capacity as Chairman of the Customs Code
Committee, instructed EC member States "to follo w" the measures at issue once voted upon in the
Customs Code Committee, but before they were o fficially published in the EU Official Journal.
1391
The impact of this Statement, together with the vote in the Customs Code Committee, must be
considered in determining whether in the particular factual circumstances of this case the measures
were indeed made effective. We will return to this below.
7.1060 We turn now to the third and last Chairman's Statement relied upon by the United States and
Chinese Taipei, made during the 433 rd meeting of the Customs Code Committee, which took place in
October 2007 (i.e. after both the October 2006 and the April 2007 votes). 1392 This Statement differs
from the two previous Statements in that it does not explicitly refer to the CNEN for set top boxes.
As its title indicates, this Statement relates in part to the "application of voted measures before their
publication". Read in isolation, it is not clear to us whether the key phrase in the third paragraph of
the statement – "an opinion on the classification of a specific type of product" – refers to an opinion
by the Customs Code Committee when assessing a proposal for a CNEN amendment or whether it
refers to an opinion concerning a draft classification regulation. Under the circumstances, we will
undertake an analysis of the language of the three paragraphs of this Statement.
7.1061 We begin by noting that in the third Statemen t's first paragraph, the Chairman recommends
the increased use of statements, as opposed to classification regulations and explanatory notes. Then,
in the Statement's second paragraph, reference is made to the fact that various EC member States
supported the use of statements over regulations and explanatory notes as a means to ensure quick
decision-making. Given that such statements are not legally binding, the third Statement also clarified
that if a legally binding instrument was needed, a classification regulation would still be an option.
Hence, the second paragraph does not seem to addr ess CNENs. Finally, the more relevant third
paragraph of the statement reads:
"The Chairman also recalled that as s oon as the Committee has rendered an opinion
on the classification of a specific type of product, no BTI should be issued contrary to
that opinion and that this opinion should be respected by all Member States. It
follows from the above that as soon as an opinion has been voted, Member States can
issue BTIs for the products concerned, even before the measure has been adopted by
the Commission and published in the Official Journal."1393
7.1062 The third paragraph of the third Statement seems to refer to an opinion rendered in respect of
a classification regulation, rather than a CNEN. While classification regulations deal with "the
classification of a specific type of product", Explan atory Notes are more general in nature and deal
with products falling under a specific (sub)heading of the CN. The reference to a "measure" in the
last sentence of this third paragraph does not cl arify the issue, since the European Communities

1391 We also note in the Statement that the "Chair reminded MS not to issue any contradictory BTIs and
to follow the text that had been agreed upon and had been made public in the Annex to the report of the
respective meeting" (emphasis added). This indicates to us that this statement was not made in isolation, and
was consistent with previous statements or discussions in the Customs Code Committee.
1392 See para. 7.1055 above.
1393 See para. 7.1055 above.

sometimes refers to CNENs as "measures."
1394 Additionally, when referring to classification
regulations in inter alia the BTI Guidelines, the Commission has referred to "legal measures". 1395
Furthermore, both classification regulations and the CNENs are adopted by the Commission and
published in the EU Official Journal.1396
7.1063 Although the European Communities argues that no legal value should be attributed to these
three Chairman's Statements, we consider that, whatev er formal legal authority is attributable to them,
the Statements – in particular the second Statement – could be relevant in determining whether the
CNEN amendments were "made effective" in the sense of Article X:1. In this regard, we note that the
Chair of the Customs Code Committee is a represen tative of the Commission whose instructions on
such matters may be presumed to carry weight a nd influence EC member States to follow them. We
also note that under the Comitology procedure, EC member States are permitted to make comments in
case of disagreement with the statements of the Chair. 1397 However, there is no indication that the EC
member States took issue with the Chairman's statement on this point.
7.1064 We now turn to the BTIs, also submitted by the United States and Chinese Taipei as evidence
to establish that the CNEN amendm ents at issue were followed afte r the vote in the Customs Code
Committee. We will deal with these BTIs in de tail later when considering whether the CNEN
amendments were enforced before their official publication in the context of the Article X:2 claim. 1398
For the purpose of our current analysis, however, we emphasize four particular BTIs. These four BTIs
refer explicitly to the measures at i ssue. Moreover, they were issued after the vote in the Customs
Code Committee but before the CNEN amendments were published in the EU Official Journal. These
BTIs are the following:
(1) FR-E4-2007-002839R1 (France, 11 July 2007);
(2) FR-E4-2007-001251 (France, 11 July 2007);
(3) FR-E4-2007-00261 (France, 11 July 2007); and
(4) CZ05-0187-2008 (Czech Republic, 23 April 2008)
1399.

1394 This is the case, for example, in Article 12(5)(a), last paragraph, of the CCC which, when referring
inter alia to the invalidation of BTI because of a CNEN, read s: "[t]he date on which binding information ceases
to be valid for the cases cited in (i) and (ii) shall be the publication of the said measures (...)"(emphasis added)
(Exhibits US-19; TPKM-16).
1395 See para. 7.1054 above.
1396 Here again, like in the Second Statement, the Ch airman "reminded" the EC member States of the
importance of the vote in the Customs Code Committee. In our view, the use of the term "reminded" suggests
that this was not a Statement made in isolation.
1397 We note that the EC member States did not ma ke a comment on the minutes of these meetings.
Article 12 (1), second paragraph of the Rules of Procedure of the Customs Code Committee provides that "[t]he
committee members shall send any written comments they may have on the minutes to the Chairman. The
committee shall be informed of this; if there are any di sagreements, the proposed amendment shall be discussed
by the committee. If the disagreement persists, the proposed amendment shall be annexed to the minutes".
(Exhibits US-19; TPKM-16).
1398 See paras. 7.1128 and following.
1399 The three French BTIs mention under "classification justification": "[...] Decision of the Customs
Committee during its 420 th meeting held on 18, 19 and 20 Apr il 2007", while the Czech BTI mentions
"[e]xplanations for CN re subheading 8528 71 13". (see Exhibit US- 28: the Original French BTIs mention
provided a translation of the Czech BTI that was not contested by the European Communities).

7.1065 We stress that we do not consider that estab lishing that a measure was "made effective"
necessarily requires proof that the measure at issue was indeed applied in practice. However, we
consider that BTIs may nonetheless serve as an indi cation that the CNEN amendments at issue were
made effective in the sense that term is used in Article X:1 of the GATT 1994. Moreover, the BTIs
submitted by the complainants indicate that, in a number of instances, some EC member States did
indeed use the measures at issue in making classifi cation decisions, prior to their formal adoption by
the European Communities.
7.1066 For all the foregoing reasons, we consider that the various elements discussed above – the
votes of the Customs Code Committee; the statement of the Chair in the 432
nd meeting and certain
BTIs issued by EC member States with explicit refere nce to the measures at issue – form a particular
constellation of facts, particular to this case, whic h supports the position of the two complainants that
the draft CNEN were "made effective" as that term is understood in Article X:1 of the GATT 1994.
7.1067 At this point, we would underline the particular character of the facts before us. They are
particular in the sense that in light of the submissi ons before us, they appear to deviate from ordinary
EC law and practice. The European Communities h as emphasized throughout its submissions that a
vote in the Customs Code Committee on a measure should not have the consequences advocated by
the two complainants. That is, a vote should not have been used as a basis for classification decisions
prior to formal adoption and, to the extent that the Chair of the Customs Code Committee advised
otherwise, such statements from the Chair would not be consistent with EC law. According to the
European Communities, a vote in the Customs Code Committee is a step in th e "legislative" process
and should not be considered as anything more than that; a measure should take effect only once the
"legislative" process is finalized. Under EC law, the European Communities st ates, such legislative
process is finalized once the measure is adopted by the Commission and published in the EU Official
Journal, and not when it is merely a "preparatory" act.
7.1068 In this regard, the Panel emphasizes that it h as made no findings with respect to the general
status and effect of a vote in the Customs Code Committee under EC law: nor has it made a finding
that such a vote will in every case mean that a meas ure has been "made effective". Rather, the Panel
considers that, in the particular circumstances of th is case, the cumulative effect of the votes in the
Customs Code Committee, the relevant BTIs and the Second Statement by the Chair, are such that the
measures at issue were "made effective" within the meaning of Article X:1 of the GATT 1994.
When were the CNEN amendments made effective?
7.1069 Having determined that the CNEN amendmen ts were "made effective", we must now
determine when the CNEN amendments were "made effective". This will give us the necessary
"reference point" for determining in the next sec tion whether the CNENs were published "promptly"
once "made effective". Up to now, we have dete rmined that the CNEN amendments were made
effective before their adoption by the Commission, and before their publication. We note that the
votes in the Customs Code Committee took place in October 2006 and April 2007; that the second
statement of the Chair is dated October 2007; and that some of the relevant BTIs were issued in July
2007. Bearing these factors in mind, we conclude th at the CNEN amendments were made effective,
at the latest, at the time of the October 2007 statem ent of the Chair. We emphasize that we reach this
conclusion on the basis of the particular circumstan ces of the case considered as a whole, namely the
votes on the CNEN amendments in the Customs Code Committee; the Chairman's statement and the
BTIs citing the CNEN amendments as "classificati on justification". The cumulative effect of these
factors leads us to the conclusion that the measu res were made effective by October 2007, at the
latest.

7.1070 Hence, we will now proceed to consider wh ether the measures at issue were published
"promptly" and "in such a manner as to enable gove rnments and traders to become acquainted with
them".
(iv) Whether the measures at issue were published "promptly"
Arguments of the parties
7.1071 The United States argues that the CNEN amendments were not published "promptly" as
required by Article X:1 of the GATT 1994. The Unite d States submits that "prompt" means "done ...
without delay". 1400 The United States refers to the GATT Panel in EEC – Apples (US) in which a
violation was found because of the European Comm unities' failure to publish its measure until two
months after it was in effect. 1401 With regard to the present dispute, the United States points out that
the measures at issue were approved by the Cu stoms Code Committee in October 2006 and April
2007, but that they "did not appear in the EC's official gazette for over a year after approval, making it
virtually impossible for affected companies and other Members to access them in a reasonable
manner".1402 As a consequence, the United States submits, the eventual publication of the measures in
the EU Official Journal does not constitute prompt publication. Chinese Taipei advances a similar
understanding of the term "prompt" as used in Article X:1 and argues that "since the draft CNEN
relating to STBCs with a hard disk drive was 'mad e effective' in April 2007, the publication thereof
made in May 2008 cannot be considered to have been done 'promptly' or 'without delay'".1403
7.1072 The European Communities, however, argues that the amended CNEN was adopted by the
Commission only at the end of April 2008 and that it was "promptly" published on 7 May 2008. 1404
In the alternative, the European Communities notes that even if the measures at issue had been made
effective upon the vote in the Customs Code Co mmittee – which it strongly contests – the CNEN
amendments at issue were "published promptly via the Comitology website". 1405 In particular, the
European Communities argues that the measures at issue were published as annexes to the minutes of
the 407th and 420 th meetings of the Customs Code Committee and that "[t]hese reports are available
on the Comitology website usually within 3 weeks after the meeting".1406
Consideration by the Panel
7.1073 Having established that the measures at issue were "made effective" at the latest by October
2007, the Panel is first required to consider whet her the measures at issue were published "promptly"
within the meaning of Article X:1 of the GATT 1994. If we answer this in the affirmative, we will
consider whether the prompt publication of the CNEN amendments was "in such a manner as to
enable government and traders to become acquainted with them".
7.1074 We begin by recalling that Article X:1 of th e GATT 1994 requires that "laws, regulations,
judicial decisions and administrative rulings, made ef fective by a contracting party, pertaining to the
classification ... of products for customs purposes sha ll be published promptly in such a manner as to

1400 United States' response to Panel question No. 159.
1401 United States' response to Panel question No. 159, para. 81.
1402 United States' first written submission, paras. 112 and 116; United States' second written
submission, para. 120.
1403 Chinese Taipei's response to Panel question No. 159, para. 132.
1404 European Communities' first written submission, para. 308.
1405 European Communities' comment to the responses of the two complainants to Panel question
No. 157, para. 196.
1406 European Communities' first written submission, para. 299.

enable governments and traders to become acquainted with them". It does not, however, specify what
"promptly" means, i.e. what is the permissible time span between the moment that such measure is
"made effective" and the time it is "published". In this regard, we note that the adverb "promptly" is
defined as "[i]n a prompt manner; readily, quickly; at once, without delay; directly, forthwith, there
and then."
1407 The word "prompt", as an adjective, means, inter alia, "2. a. Ready in action; quick to
act when occasion arises; acting with alacrity, or without undue delay; ready and willing; quick to do
something."1408 In our view, the meaning of prompt is not an absolute concept, i.e. a pre-set period of
time applicable in all cases. 1409 Rather, an assessment of whether a measure has been published
"promptly", that is "quickly" and "without undue delay", necessarily requires a case-by-case
assessment.1410 Accordingly, we will look at the time span between the moment the CNEN
amendments were "made effective" and the time th ey were "published", and assess whether this is
prompt in light of the facts of the case.
7.1075 The European Communities has suggested that the measures at issue were published twice,
i.e. in the EU Official Journal and on the Comitolo gy website. We note that the text of the measures
indeed appears both in the EU Official Journal and in the Comitology website (more particularly, as
Annexes to the minutes of the 407 th and 420th meeting of the Customs Code Committee). Therefore,
we will consider each in terms of whether such pub lication was "prompt" vis-à-vis October 2007 (our
"reference point"). Only if at least one of these pub lications is considered "prompt", will we turn to
the next step in our analysis and determine whet her the prompt publication was "in such a manner as
to enable governments and traders to become acquain ted with them". This is because the requirement
to publish promptly and the requirement with resp ect to the manner of publication (i.e., in such a
manner as to enable governments and traders to become acquainted with them) are cumulative
requirements under Article X:1.
7.1076 We start with the publication in the EU Official Journal. The CNEN amendments were
published in the EU Official Journal on 7 May 2008, while "made effective" at the latest by October
2007. Thus, the CNEN amendments were published in the EU Official Journal at least eight months
after they were made effective. In the circumstan ces of this case and in light of the nature of the
measures at issue, we consider that publication af ter eight months does not meet the requirement to
publish "promptly". A significant number of trader s and trade can be affected during an eight-month
period. We observe as well that the publication on 7 May 2008 followed shortly after the adoption by
the Commission at the end of April 2008, and that minutes of meetings of the Customs Code
Committee are available on the Comitology website "usually within 3 weeks after the meeting". 1411
This suggests that such information should be made public within weeks rather than months, and that
such is the "usual" practice of the European authorities. Under the ci rcumstances of this case, we are

1407 The Shorter Oxford Dictionary (2003), p. 2366.
1408 The Shorter Oxford Dictionary (2003), p. 2376. "Prompt" is also defined as "to move to action",
see Merriam-Webster Online Dictionary. Retrie ved 4 December 2009, fr om http://www.merriam-
webster.com/dictionary/prompt.
1409 In EEC – Apples (US) , para. 5.21, the GATT Panel found that "no lapse of time between
publication and entry into force was specified" by Article X:1.
1410 In US - Wheat Gluten, the Appellate Body used a similar approach when it considered the meaning
of the term "immediately" with respect to the obligation under Article 12.1 of the Agreement on Safeguards to
"immediately notify" the Committee on Safeguards upon certain actions they may take. The Appellate Body
agreed with the Panel that the ordinary meani ng of "immediately" "implies a certain urgency",
adding however that the degree of urgency or immedi acy required "depends on a case-by-case assessment."
(Appellate Body Report on US - Wheat Gluten, para. 105).
1411 European Communities' first written submissions, para. 299.

not persuaded, nor has the European Communities offered any support for its contention otherwise
1412,
that publishing the CNEN amendments eight months after they were made effective qualifies as
"prompt" under Article X:1. Hence, we find that the publication of the CNEN amendments in the EU
Official Journal was not prompt. In view of this finding, we do not need to consider whether the
publication in the EU Official Journal was "in such a manner as to enable governments and traders to
become acquainted with them".
7.1077 We now turn to the publication of the CN EN amendments on the Comitology website as
annexes to the minutes of the respective Customs C ode Committee meetings. It is not clear when
those minutes were posted on the Comitology website. We note that the minutes of the 407 th meeting
held from 18 to 20 October 2006 are dated "19 Decemb er 2006" (the date of the report) and that the
minutes of the 420th meeting held from 18 to 20 April 2007 are dated "31 May 2007" (the date of the
report). We will therefore consider whether publi cation was prompt on the basis of the dates of 19
December 2006 and 31 May 2007. At the outset, we note that both dates occur before the date we
considered the latest date as from which the CNEN amendments became effective (October 2007). It
is clear that publication prior to the date the measu re was made effective satisfies the requirement to
publish "without delay" and hence that the measure was published promptly. Having found that the
publication of the CNEN amendment in the Comitolo gy website was prompt, we must now determine
whether the publication of the CNEN amendment in the Comitology website satisfies the requirement
in Article X:1 of being published "in such a manne r as to enable governments and traders to become
acquainted with them".
(v) Whether the measures at issue were published "in such a manner as to enable governments
and traders to become acquainted with them".
Arguments of the parties
7.1078 The United States and Chinese Taipei consider the publication in the EU Official Journal as
not being prompt and argue that the publication of the measures at issue on the Comitology website
does not meet the standard of publication require d by Article X:1 of the GATT 1994. According to
Chinese Taipei , to assess whether a publication has been made in such a manner as to enable
governments and traders to become acquainted with them, "it is necessary to put oneself at the level of
the newcomer wishing to enter a new market rather than at the level of the experienced insider who
through his contacts or specialised knowledge is able to obtain information which is otherwise
difficult to obtain". Chinese Taipei submits that, wh en applying this standard, it is "obvious" that the
inclusion of a document on the EC Comitology website is insufficient to comply with the
requirements of Article X:1 because "the Comitology website contains thousands of documents issued
by hundreds of different Committees. Unless one knows the precise name of the Committee dealing
with the issue of the specific document number" it argu es, "it is impossible to retrieve information of
how a product is treated". Chinese Taipei gives th e example of searching for a decision relating to
"set top boxes", where the result of the search would be "0 document(s) found".
1413 The United States
argues that "the measures in question were not publis hed for over a year after they were enforced and
made effective, whether in the EC Official Jour nal or in another medium readily available to

1412 The European Communities has limited itself to stating that "it is factually and legally incorrect to
say that the CNEN were published over a year after th eir adoption", since in its view the CNEN amendment
were only made effective upon adoption by the Commi ssion (European Communities' first written submission,
para. 307).
1413 Chinese Taipei's comment on the European Communities' response to Panel question No. 157,
paras. 44-45.

Members and traders"
1414 making it "virtually impossible" for affected companies and other Members
to access them in a reasonable matter. 1415 Accordingly, the United States argues that making the text
of the measures at issue available in the minutes of the Customs Code Committee does not satisfy the
requirement of Article X:1 of the GATT 1994.
7.1079 The European Communities submits that the measures at issue were promptly published in
the EU Official Journal because the measures were made effective on 29 April 2008 and that such
publication meets the requirements of Article X:1. Alternatively, the European Communities notes
that the opinions of the Customs Code Committee delivered in the management procedure "while only
stages in the legislative procedure" were "made avai lable" in the reports containing the minutes of the
meetings of the Customs Code Committee "to a llow for maximum transparency on the activities of
the EC institutions". 1416 In this respect, the European Communities points out that the laws,
regulations, judicial decisions and administrative rulings of general application covered by Article X:1
"do not need to be communicated via an official ga zette and, depending on the circumstances, even a
communication via a website may be sufficient". The European Communities argues that such
circumstances "may also include th e fact that the economic operators are used to getting information
via the website and are aware that the government communicates certain matters in this way".1417
Consideration by the Panel
7.1080 The Panel recalls its finding in paragraph 7.1 076 that in this case, the publication of the
CNEN amendments in the EU Offici al Journal cannot be considered "prompt" and that hence, we do
not need to consider whether that publication w as "in such a manner as to enable governments and
traders to become acquainted with them". Accord ingly, we will consider only whether publication on
the Comitology website, which we considered to be "prompt" in the circumstances of this case, was
"in such a manner as to enable governments and traders to become acquainted with them".
7.1081 We note that Article X:1 contains two closely lin ked requirements. The first is that measures
subject to Article X are "published", and the second is that such publication is "in such a manner as to
enable governments and traders to become acquainted with them".
7.1082 Regarding the requirement that measures are " published", the Panel first notes a difference
between Article X:1 and Article X:2. While Ar ticle X:1 requires that measures be "published",
Article X:2 refers to measures having been "offi cially published". The absence of the adverb
"officially" in Article X:1, which is present in Article X:2, clarifies that the publication of the relevant
measure does not need to be in an "official" publication in order to satisfy Article X:1.
7.1083 The Panel in Chile – Price Band System analysed the meaning of the phrase "to publish" in
light of the requirement to "publish" safeguard investigation reports under Article 3.1 of the
Agreement on Safeguards. This analysis may be of some relevance in the present dispute, especially
given that Article 3.1 of the Agreement on Safeguards expressly refers to Article X of the GATT
1994. 1418 In the relevant parts of its Reports, that Panel made the following observations and finding:

1414 United States' response to Panel question No. 157, para. 79.
1415 United States' first written submission, para. 116.
1416 European Communities' first written submission, para. 299.
1417 European Communities' response to Panel question No. 157, para. 167.
1418 Article 3.1 of the Agreement on Safeguards states in relevant part:

"A Member may apply a safeguard measure only following an investigation by the competent
authorities of that Member pursuant to procedur es previously established and made public in

"[W]e note that the Minutes of the relevant [Chilean Distortion Commission] sessions
have not been 'published' through any official medium. Rather, they were transmitted
to the interested parties and placed at the disposal of 'whoever wishes to consult them
at the library of the Central Bank of Chile '. In order to determine whether it is
sufficient under Article 3.1 of the Agreement on Safeguards to make the investigating
authorities' report 'available to the public' in such a manner, we first refer to the
dictionary meaning of 'to publish'. The term can mean 'to make generally known', 'to
make generally accessible', or 'to make generally available through [a] medium'. We
therefore turn to the context of Artic le 3.1 provided by similar publication
requirements in the AD and SCM Agreements. (...) In addition, we also note that
various 'transparency' provisions in the c overed agreements, such as Article III of the
GATS, Article 63.1 of the TRIPS Agreement, and Article 2.11 of the TBT Agreement
all distinguish between 'to publish' and 'to ma ke publicly available'. In the light of
these considerations, we find that the verb 't o publish' in Article 3.1 of the Agreement
on Safeguards must be interpreted as meaning 'to make generally available through an
appropriate medium', rather than simply 'm aking publicly available'. As regards the
minutes of the relevant [Chilean Distortion Commission] sessions, we therefore find
that they have not been generally made available through an appropriate medium so
as to constitute a 'published' report with in the meaning of Article 3.1 of the
Agreement on Safeguards."
1419
7.1084 We agree with this approach and consider th at the same reasoning can be applied to the
publication obligation in Article X:1. As noted a bove, Article X:1 requires that publication be "in
such a manner as to enable governments and traders to become acquainted with them". In our view, if
measures are to be published "in such a manner as to enable governments and traders to become
acquainted with them", it follows that they must be generally available through an appropriate
medium rather than simply making them publicly available.1420
7.1085 We observe that the rationale behind the pu blication requirement in Article X of the
GATT 1994 is to ensure due process and transparen cy about measures that affect governments and
traders. If such measures were not published, governments and traders would not necessarily know
what conditions would apply to their goods when im ported into a Member's territory. Publication
thus offers the possibility for governments and traders to learn of "laws, regulations, judicial decisions
and administrative rulings of general application" applicable to trading with that Member or its
nationals.
7.1086 A textual analysis of the publication requiremen t in Article X:1 bears out this understanding.
The definition of the word "manner" is "senses relating to the way in which an action is performed" or
"the way in which something occurs or is perfo rmed; a method of action; a mode of procedure." 1421
The term "to enable" can be understood as "to give pow er to (a person); to st rengthen, make adequate

consonance with Article X of GATT 1994. (...) The compet ent authorities shall publish a
report setting forth their findings and reasoned conclusions reached on all pertinent issues of
fact and law."

1419 Panel Report on Chile – Price Band System , para. 7.127 (referring to the Shorter Oxford
Dictionary, p. 2405).
1420 In other words, if a "medium" makes measures generally available to the public in such a manner as
to "enable governments and traders to become acquainted with them", we consider that such medium should be
regarded as "appropriate" and that publishing on that medium would fall within "published" a used in
Article X:1.
1421 The Shorter Oxford Dictionary (2002), p. 1692.

or proficient", "to impart to (a person or agent) power necessary or adequate for a given object; to
make competent or capable", "to supply with the re quisite means or opportunities to an end or for an
object" or "to make possible or easy; also to give effectiveness to (an action)".
1422 Finally, the term
"acquainted" means "personally known; familiar, through being known", or "having personal or
experimental knowledge; possessed of persona l knowledge, more or less complete." 1423 Thus, it is
clear from the a textual analysis of Article X:1 that it is not any manner of publication that would
satisfy the requirement, but only those that would give power to or supply governments and traders
with knowledge of the particular measures that is "adequate" so that traders and Governments may
become "familiar" with them, or "known" to them in a "more or less complete" way.
7.1087 In our view, making the minutes of the Customs Code Committee, with draft CNENs
attached, available on the Comitology website does not meet this standard. In particular, we note that
there is nothing in the minutes, or the draft CNENs attached, that would supply traders and
governments with adequate knowledge of measures that are or would be applied in trading with the
EC member States. Indeed, the publication of th e respective reports of the Customs Code Committee
meetings merely provided the text of the CNEN am endments, specifying that these were "drafts". In
addition, the documents contain placeholders for th e reference number of the measure, e.g. "(2006/C
... ../..)" in the first case and "(2007/C ... ../..)" in the second case.
1424 In light of this, the Panel finds
that, in the circumstances described above, posti ng the draft CNEN on the Comitology website does
not constitute publication "in such a manner as to enable governments and traders to become
acquainted with them".

1422 The Shorter Oxford Dictionary (2002), p. 819.
1423 The Shorter Oxford Dictionary (2002), p. 20.
1424 More particularly, the first CNEN amendment wa s published as Annex VI to the Summary of the
conclusions of the 407 th meeting of the Customs Code Committee. The text itself is titled "Draft CNEN on
Satellite receivers with built-in modem", while the refere nce number "(2006/C ... ../..)" is not yet completed.
The text of Annex VI begins as follows:
"Draft CNEN on "Satellite receivers with built-in modem ":
UNIFORM APPLICATION OF THE COMBINED NOMENCLATURE (CN)
(Classification of goods)
(2006/C …../..)
Explanatory notes adopted in accordance with the procedure de fined in Article 10 (1) of
Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical
nomenclature and on the Common Customs Tariff
The explanatory notes to the Combined Nomenclature of the European Communities shall be
amended as follows:
[...]"
The second measure at issue was published as Annex IV to the Report of Conclusions of the 420
th
meeting of the Customs Code Committee. Again, the text itself is titled "Draft CN Explanatory Notes: Set-top
box incorporating a hard disk", while the reference number "(2007/C ... ../..)" is not yet completed. The text of
Annex IV begins as follows:
"Draft CN Explanatory Notes: Set-top box incorporating a hard disk
UNIFORM APPLICATION OF THE COMBINED NOMENCLATURE (CN)
(Classification of goods)
(2007/C …../..)
Explanatory notes adopted in accordance with the procedure de fined in Article 10 (1) of
Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical
nomenclature and on the Common Customs Tariff
The explanatory notes to the Combined Nomenclature of the European Communities shall be
amended as follows:
[...]"

(vi) Conclusions regarding the complainants' claim under Article X:1
7.1088 The Panel determined in the above sections that the measures at issue were included in the
scope of Article X:1 and that they were "made effe ctive" at the latest by October 2007. We then
considered two possible "publications" of the measur es: (i) in the EU Official Journal (ii) on the
Comitology website. We found that the publication in the first instance was not "prompt", while the
publication in the second case, although prompt, was not "in such a manner as to enable governments
and traders to become acquainted" with the measures at issue. Acco rdingly, we conclude that the
European Communities violated its obligation in Article X:1 to publish promptly the CNEN
amendments in such a manner as to enable governments and traders to become acquainted with them.
(d) The United States' and Chinese Taipei's claim under Article X:2 of the GATT 1994
(i) Main claims of the parties
Arguments of the parties

7.1089 The measures at issue are, as described above , the proposed amendments to the CNEN as
voted by the Customs Code Committee in October 2006 and April 2007. The Chairman's Statements
and the BTIs are submitted as evidence in support of the claims. These statements and the BTIs are
thus not measures at issue.1425
7.1090 The United States and Chinese Taipei argue that, because some EC member States applied
the measures at issue before the official publication of the CNEN amendments in the EU Official
Journal on 7 May 2008, the European Communities has violated Article X:2 of the GATT 1994.
7.1091 The European Communities responds that Article X:2 of the GATT 1994 does not apply in
the present case because the conditions for Article X:2 are not met. The European Communities
argues that the CNEN amendments at issue cannot be a "measure of general application" because of
their specific characteristics. Further, the European Communities submits that the CNEN amendments
at issue did not effect an advance in rate of duty under an established and uniform practice. The
European Communities also submits th at their specific characteristics, together with their character as
"preparatory" acts, excludes them from being "enforced". The CNEN amendments cannot be
enforced. In the alternative, the European Communities argues th at the United States and Chinese
Taipei have not submitted sufficient proof that the measures at issue have violated Article X:2.
7.1092 Amongst the third parties only the Philippines submits arguments in relation to Article X:2.
Like the United States and Chinese Taipei, the Phili ppines submits that the European Communities
applied the measures at issue before the official publication of the CNEN amendments in the EU
Official Journal on 7 May 2008 and that, in doing so, it violated Article X:2 of the GATT 1994.1426
Consideration by the Panel
7.1093 Article X:2 of the GATT 1994 provides that:
"No measure of general app lication taken by any contracting party effecting an
advance in a rate of duty or other charge on imports under an established and uniform
practice or imposing a new or more bur densome requirement, restriction or

1425 See paragraph 7.1008 above.
1426 The Philippines' third party submissions, paras. 41 and 44.

prohibition on imports, or on the transfer of payments therefor, shall be enforced
before such measure has been officially published."
7.1094 The Panel recalls the following statement of the Appellate Body in US - Underwear that
Article X:2 of the GATT 1994 embodies the principle of transparency and due process:
"Article X:2, General Agreement, may be se en 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 principl e is widely known as the principle of
transparency and has obviously due process di mensions. The essential implication is
that Members and other persons affected, or likely to be affected, by governmental
measures imposing restraints, requireme nts and other burdens, should have a
reasonable opportunity to acquire authentic information about such measures and
accordingly to protect and adjust their activ ities or alternatively to seek modification
of such measures."
1427
7.1095 We understand Article X:2 of the GATT 1994 to contain five conditions: (i) the existence of a
"measure"; (ii) the measure is of "general appli cation"; (iii) the measure is taken by a contracting
party (WTO member); (iv) the measure is of the type described in Article X:2 (i.e. a measure
"effecting an advance in a rate of duty or other charge on imports under an established and uniform
practice or imposing a new or more burdensome requi rement, restriction or prohibition on imports, or
on the transfer of payments therefore"); and (v) the measure was enforced before its official
publication. We will analyse each of these in turn.
(ii) Whether the measures at issu e are a "measure" and, if so, whether they are of "general
application" and "taken by a contracting party"
Arguments of the parties

7.1096 According to the United States and Chinese Taipei , the CNEN amendments at issue are
"measures" of "general applicati on" for the same reasons that they are a "law, regulation, ..." of
"general application" under Article X:1. Similarly, the arguments invoked by the European
Communities to reject the Article X:2 claim are sim ilar to those raised in its defence against the
applicability of Article X:1.
1428 The parties have not raised any particular arguments regarding the
requirement that the measures are those taken by a WTO Member.
Consideration by the Panel
7.1097 We now turn to consider whether the first thre e conditions are met, i.e., whether each of the
CNEN amendments at issue is a "measure" of "gener al application", "taken by a contracting party",
i.e., a WTO Member. In our analysis of Article X:1 above 1429, we found that the CNEN amendments
at issue are contemplated by that range, namely, a "law, regulation, judicial decision [or]

1427 Appellate Body Report on US - Underwear, DSR 1997: I, p. 29.
1428 See, in particular, the United States' response to Panel question No. 156 (invoking the Appellate
Body Report on US – Corrosion-Resistant Steel Sunset Review , para. 85); Chinese Taipei's second written
submission, paras. 280-281 and 283-285 (invoking the Appellate Body Report on US – Anti-Dumping Measures
on Oil Country Tubular Goods , para. 187); and the European Communities' first written submission, para. 310;
European Communities' second oral statement, para. 92; European Communities' response to Panel question
No. 156, para. 166.
1429 See paragraph 7.1027 below.

administrative ruling". Article X:2 refers simply to "measure" and hence encompasses an even
broader category – namely, any act or omission by a WTO Member. It follows therefore that the
drafters intended to include a broad range of meas ures that have the potential to affect trade and
traders. We conclude that the CNEN amendmen ts at issue qualify as "measures" in the sense of
Article X:2. We also found above
1430 that the CNEN amendments are of "general application". We
see no reason to depart from this finding when considering the identical terms "general application" in
our Article X:2 analysis. Hence, we conclude that the CNEN amendments are a "measure of general
application" in the sense of Article X:2. In addition, we note that the measure at issue must be "taken
by a contracting party" (WTO member), as was the case here.
(iii) Whether the measures at issue are of a kind eff ecting an advance in rate of duty under an
established and uniform practice
7.1098 We will divide the arguments of the parties a nd our analysis into two subsections. We will
start with defining the meaning of the terms "effect ing an advance in a rate of duty" and consider
whether the CNEN amendments at issue effect an adva nce in a rate of duty. If we answer this in the
affirmative, we will next assess the meaning of "under an established and uniform practice" and
consider whether the CNEN amendments at issue effect an advance in a rate of duty under an
established and uniform practice.
"effecting an advance in rate of duty"
Arguments of the parties
7.1099 The United States submits that an "advance" in a rate of duty is a "rise", an "increase" in the
rate of duty. It argues that the CNEN amendments at issue "effect" an advance in a rate of duty since
its application "resulted in the reclassification of STBCs from a duty-free tariff line into a tariff line
with duties of up to 14 per cent". 1431 The United States argues that, "absent the CNEN, at least some
member States would not have imposed duties on the products at issue", and that "[b]y imposing
uniformity throughout the EC, the CNEN thus at a mi nimum 'effect[s] an advance in rate of duty' for
those portions of the EC customs territory that were imposing non-uniform lesser duties". 1432 T h e
United States further argues that to fall under the disciplines of Article X:2, the measures at issue need
not be the only cause for such increase. It submits that Article X:2 does not contain any reference to a
"causation requirement or set any particular threshold". 1433 As long as the measure "effects" an
advance in the rate of duty, the measure would need to be officially published prior to its enforcement.
Chinese Taipei similarly interprets an "advance" in rate of duty as an "increase" in the rate of
duty.1434 Chinese Taipei argues that the me asures at issue effect an advance in the rate of duty in that
they result in some types of STBCs – Chinese Taipei cites in particular those with a hard disk –
becoming subject to duties pursuant to the new cl assification imposed by the measures at issue. 1435 In
its view, "the CNEN have introduced certain classi fication criteria such as the presence or absence of
a hard disk drive or of certain specific modem ty pes that were not mentioned previously in the
applicable customs legislation and this has led to a change in classification practice of the member
States" and to higher duties for STBCs. Like the United States, Chinese Taip ei also submits that

1430 See paragraph 7.1034 below.
1431 United States, first written submission, para. 11 8; United States' response to Panel question
No. 160, para. 83.
1432 United States' response to Panel question No. 161, para. 84.
1433 United States' response to Panel question No. 160, para. 82.
1434 Chinese Taipei's response to Panel question No. 160.
1435 Chinese Taipei's first written submission, paras. 470 and 478.

nothing in the text of Article X:2 of the GAT T 1994 requires that the measure at issue be the sole
cause for such an increase.
1436 Both the United States and Chinese Ta ipei argue that the various BTIs
they have submitted to the Panel constitute proof that the measures at issue effected an advance in the
rate of duty.1437
7.1100 The European Communities submits that the measures at issu e merely lead to a "technical
reclassification" into another tariff line, but not to an "increase in the duty rate" levied by the
European Communities. In the European Communiti es' view, the United States and Chinese Taipei
fail to provide evidence of an increase in a rate of du ty by virtue of the CNEN amendments at issue.
The European Communities argues that none of the submitted BTIs classifies any of the products at
issue in a duty-free code. To the contrary, it ar gues, all these BTIs indicate tariff lines bearing the
same duty of 14 per cent and do not, therefore, constitu te evidence of a breach of Article X:2 of the
GATT 1994.1438
Consideration by the Panel
7.1101 Article X:2 requires that the measure "effect[s] an advance in a rate of duty or other charge on
imports under an established and uniform pr actice or imposes a new or more burdensome
requirement, restriction or prohibition on imports, or on the transfer of payments therefore". Given
the way this claim has been presented and argued, the more specific question before us is whether the
CNEN amendments at issue are of a kind "effecting an advance in the rate of duty" and whether they
do so "under an established and uniform practice".
7.1102 As mentioned above, we will st art by determining whether th e CNEN amendments at issue
effect an advance in a rate of duty. If this is an swered in the affirmative, we will determine whether
the CNEN amendments effect an advance in a rate of duty under an established and uniform practice
and if so, whether they meet this requirement.
7.1103 We thus turn to the meaning of the terms "effecting an advance in a rate of duty". 1439 The
Panel begins its analysis by noting that "effecting" comes from the verb "to effect". "[T]o effect"
inter alia means to "bring about (an event or result)" 1440; "to cause to come into being"; "to put into
operation".1441

1436 United States' response to Panel question No. 160, para. 82; Chinese Taipei's response to Panel
question No. 160, para. 133. These BTIs will be analyzed in more detail below at 7.1133-7.1135.
1437 United States' first written submission, para. 116; Chinese Taipei's response to Panel question
No. 161, para. 135.
1438 European Communities' comments on United States' and Chinese Taipei's responses to Panel
1439 The Spanish and French versions of the GATT 1994 confirm this view. The Spanish language
version mentions "que tenga por efecto", literally "that has the effect of". In Spanish, "efecto" is defined as "[l]o
que sigue por virtud de una causa", i.e. what follows by virtue of a cause. The French text mentions " qui
entraînerait" which comes from the verb "entraîner" which means "4. [a]voir pour conséquence nécessaire,
inévitable. amener, causer, implique r, occasionner, produire, provoquer, déclencher" (see Diccionario de la
lengua Española, Real Academia Española, vigésima primera edición, 2001, p. 558 and Le nouveau Petit Robert
(2000), p. 874).
1440 The Shorter Oxford Dictionary (2002), p. 794.
1441 effecting. (2009). In Merriam-Webster Online Dictionary . Retrieved 7 December 2009, from
http://www.merriam-webster.com/dictionary/effecting.

7.1104 The ordinary meaning of "bring about" is "cause to happen, accomplish".
1442 According to
the Merriam-Webster online Dictionary, "[t]he verb effect goes beyond mere influence; it refers to
actual achievement of a final result".1443
7.1105 We see similarities between the word "effecting" and "to cause". With regard to the verb "to
cause" in particular, the Panel in US – Lamb clarified that "[t]he word 'to cause' means 'effect, bring
about, occasion, produce, induce, make', or also 'to serve as cause or occasion of'. The word 'to cause'
means 'that which produces an effect or consequen ce; an antecedent or antecedents followed by a
certain phenomenon'; it 'indicates a condition or circ umstance or combination of conditions and
circumstances that effectively and inevitably calls forth an issue, effect or result or that materially aids
in that calling forth'." In that same dispute, the Panel found that the ordinary meaning of "cause"
requires "the showing of a link", but that it does not imply the need for there to be a sole or single
cause.
1444 Likewise, we believe that the term "effecting" does not necessarily require that the
measures at issue be the sole or single cause for the advance in rate of duty. However, it must be
shown that it goes beyond mere influence and there must be a demonstrable link between the
measures at issue and the advance.
7.1106 Turning to the term "advance", we note that it can mean "progress"; "a step forward";
"forward motion"; "a rise in amount, value or price". 1445 When viewed in this context, we understand
that "advance" as used in Article X:2 m eans "a rise in amount, value or price." We also consider that
both the French and Spanish versions of "advance" in Article X:2, "relèvement" and "aumentar",
respectively, support such an understanding. 1446 The French "relèvement" is defined as "action de
relever, de hausser, d'augmenter" 1447, while the Spanish "aumentar" is defined as "[a]crecentar, dar
mayor extension, número o material a alguna cosa". 1448 "[A]crecentar" refers back to "aumentar". 1449
Accordingly, Article X:2 of the GATT 1994 covers me asures of general application that "cause" an
"increase" in a rate of duty.
7.1107 Hence, we can conclude that "effecting an adva nce in a rate of duty" means that the CNEN
amendments at issue are of a type that "bring about" an "increase" in a rate of duty. The function of
the language "effecting an advance in a rate of duty" is to further describe the type of measures that
are subject to the obligation in Article X:2. That is, it operates to define the class of measures to which
the injunction against enforcement before official publication applies. As such, the focus under this
aspect of Article X:2 is on the type of measure under consideration. The question is whether the
measures at issue are of the type that they are intend ed to have a certain effect, namely, an increase in
a rate of duty. The issue is not, at this point in the analysis, whether they have actually had that effect
in practice.1450 In this particular case, therefore, the question at this stage of the analysis is not whether

1442 The Shorter Oxford Dictionary (2002), p. 290.
1443 effecting. (2009). In Merriam-Webster Online Dictionary . Retrieved 7 December 2009, from
http://www.merriam-webster.com/dictionary/effecting.
1444 Panel Report on US – Lamb, para. 7.237-7.238.
1445 The Shorter Oxford Dictionary (2002), p. 31.
1446 We recall that the French and Spanish texts of the GATT 1994 are equally authentic (see the final
clause of the WTO Agreement. See also the Panel Report on China – Autos, para. 7.159, and the Panel Report
on EC – Trademarks and Geographical Indications (United States), para. 7.607).
1448 Diccionario de la lengua Española, Real Academia Española (2001), p. 162.
1449 Diccionario de la lengua Española, Real Academia Española (2001), p. 23.
1450 In a sense, the distinction could be thought of as one between the intention or purpose of the
measure, and the actual application of th e measure in practice. Another way of thinking about it is, if the result
of enforcing the measure is to increase the rate of duty app lied to a particular product, then this would be strong
evidence that the measure is of a type that "effects" an increase in the rate of duty.

the complainants have proved that the CNEN amendm ents have actually resulted in increased rates of
duty in particular instances. Rather, the question is whether, in general terms, the CNEN amendments
are measures of a type that can be said to be intended to effect an advance in the rate of duty.
7.1108 On their face, the CNEN amendments at issue indicate that certain STBCs are not classifiable
as set top boxes with a communication function in duty-free CN code 8528 12 91. Instead, as a result
of the CNEN amendments, those STBCs are classifiab le in other tariff lines which are dutiable. The
applicable rates of duty, however, are not specified in the measures at issue, but rather are set out in
the Common Customs Tariff of the European Comm unities, which imposes varying duty rates of
between 13.9 per cent and 14 per cent with respect to th e relevant tariff lines. It seems clear to us that
although the measures at issue them selves do not specify the rates of duty to be applied, the measures
result in the exclusion of certain STBCs from dut y-free treatment. The CNEN amendments at issue
necessarily lead to certain STBCs being classified in tariff lines that impose a duty rate in excess of
zero while other STBCs are classifiable in duty-free tariff lines.
7.1109 Under the CNEN amendments at issue, it became clear that STBCs with WLAN, ISDN or
Ethernet connectivity, or with a recording and repr oducing device (such as, for example, a hard disk
or a DVD drive) would be excluded from CN c ode 8528 12 91 (now 8528 71 13) which was – and
still is – subject to a 0 per cent duty. The BTIs demonstrate the lack of uniformity that existed before
the CNEN amendments were voted on in the Custom s Code Committee. Of the BTIs issued before
that time, we find BTIS classifying STBCs with a hard disk or a DVD drive in CN code 8521 90 00
(13.9 per cent duty); in 8528 12 20 (14 per cent duty)
1451 and in CN code 8528 12 91 (duty free). 1452
The different classification of similar STBCs by different EC member States' customs authorities
shows that there was a lack of uniformity in the cl assification of set-top boxes with hard disk drives
among the EC member States during 2005 and 2006. As Chinese Taipei points out, "in such a
situation, it is up to the Commission to adopt measur es, either a CNEN or a classification regulation,
in order to ensure the uniform application of the Common Customs Tariff."
 1453
7.1110 We therefore believe that, through the CNEN amendments at issue, the Commission sent a
clear signal to all customs authorities of EC member States that STBCs with certain features were not
eligible for classification in duty-free CN code 8528 12 91, leaving other dutiable codes as the only
available classification options. Thus, EC member States that had granted duty-free treatment before
the vote on the measures in the Customs Code Committee were thereafter required not to classify in
CN code 8528 12 91. In consequence, the CNEN amendments at issue entailed a change in
classification practices for some EC member States with the practical consequence that certain STBCs
became dutiable. We therefore consider that, at least in some instances, as a result of the CNEN
amendments at issue, some EC member States were required to change their classification practices in
such a way that effected an advance in rate of dut y. Hence, we conclude that the CNEN amendments
at issue effect an advance in rate of duty an d as such fall within the measures contemplated by
Article X:2.
7.1111 While we do not consider that the complainants are required to submit proof of application on
this point, we find support for our conclusions when comparing: (i) a French BTI issued in 2005
(before the vote in the Customs Code Committee), cl assifying an STB with a 160 GB hard disk in the

1451 See the following BTIs presented by the United States in exhibit US-28: BTIs DEM-3358-05-1
(Germany, 11 August 2005); DEM/3971/06-1 (Germany, 13 June 2006); DEM/4638/06-1 (Germany, 24 July
2006); and BED.T.245.774 (Belgium, 23 March 2006).
1452 French BTI FR-E4-2005-003506 (2 August 2005).
1453 Chinese Taipei's comments on the European Communities' responses to Panel question Nos. 163
and 165.

duty-free heading 8528 12 91 with (ii) a French BTI issued in July 2007 (after the vote in the Customs
Code Committee) that classifies an STB with a 160 GB hard disk in dutiable heading 8521 90 00,
expressly mentioning the 2007 draft CNEN as a classification justification.
1454.
"Under an established and uniform practice"
Arguments of the parties
7.1112 The United States submits that the phrase "under an established and uniform practice" does
not relate to an "advance in a rate of duty". Rath er, it modifies the phrase "other charge on imports".
The United States submits that "[t]he current dispute would thus not implicate the phrase 'an
established and uniform practice'". The United States notes that in any event the measures at issue do
in fact effect an advance in a rate of duty unde r an established and uniform practice since they are
intended to ensure uniformity of administration of the EC-wide customs tariff. 1455 "[E]liminating
divergences in classification is an ostensible purpose of CNENs, and after the CNEN was adopted, EC
member States began to impose duties consistently on imports of set top boxes based on the criteria
enumerated in the CNEN." 1456 According to the United States, th e evidence presented in this dispute
demonstrates the existence of an "established and uniform practice" since "at least some member State
customs authorities did not impose duties on the set top boxes at issue" 1457 before the vote of the
Customs Code Committee while "all BTI[s] issued af ter the vote provide for classification of set top
boxes in the dutiable heading, consistent w ith the requirements contained in the CNEN" 1458 and the
customs authorities of the EC member States "relie d on the CNEN as a basis for their decisions to
reclassify merchandise into a dutiable heading".1459
7.1113 According to Chinese Taipei , an established and uniform practice "would require that a
certain classification, charge or duty is applied cons istently and in the same manner to all imports of
comparable goods".1460 However, like the United States, Chinese Taipei argues that the phrase "under
an established and uniform practice" does not relate to the advance "in rate of duty" but only to "or
other charge on imports". The phrase "under an estab lished and uniform practice" appears next to
"other charge on imports", such that the former info rms the latter. Further, there is no comma or any
reference that permits the interpreter to determ ine that the phrase "under an established and uniform
practice" also informs "a rate of duty". It argues that an advance "in a rate of duty" is "perfectly
discernible, and traders may know what this duty is by simply looking into the tariff schedule".
Moreover, an advance in "rate of duty" is necess arily "under an established and uniform practice"
because it is understood that the duty will be levied "every time a product is imported".
Consequently, it is not necessary to demonstrate a r ecurrence. Chinese Taipei submits that the term
"other charge", in contrast, is a broad concept a nd may refer to a wide variety of charges, making it
necessary that such other charge is levied under an "established and uniform practice" in order to

1454Compare French BTI FR-E4-2005-003506 (2 August 2005), submitted by the United States in
Exhibit US-120 with French BTI FR-E4-2007-002839R1 (F rance, 11 July 2007), submitted by Chinese Taipei
in Exhibit TPKM-61. Exhibit TPKM-61 shows that BTI FR-E4-2007-002839R1 expressly mentions as
avril 2007".
1455 United States' responses to Panel question Nos. 162, 163 and 165.
1456 United States' first written submission, para. 118 (Exhibit US-28).
1457 United States' response to Panel question No. 160, para. 83.
1458 United States' response to Panel question No. 165, para. 89.
1459 United States' response to Panel question No. 160, para. 83.
1460 Chinese Taipei's response to Panel question No. 162, para. 136.

ascertain the nature of that charge.
1461 Finally, it argues that, "from a grammatical viewpoint", "under
an established and uniform practice" neither relates to "measure of general application" (the words
"under an established and uniform practice" would have to be placed after "any contracting party"),
nor does it indicate the required level of enforcemen t, since it would then have been placed after
"enforced".1462
7.1114 The European Communities argues that it is "evident" from reading Article X:2 of the
GATT 1994 that the phrase "an established and uniform practice" cannot "be divorced" from the text
"advance in a rate of duty". According to th e European Communities, the measure cannot be
considered as only qualifying and pertaining to "other charge on imports". The European
Communities argues that the phrase "effecting an advance in a rate of duty or other charge on imports
under an established and uniform practice" has to be read as a whole . According to the European
Communities, "the word 'other' in this phrase conf irms the understanding that both 'advance in a rate
of duty' and 'charge on imports' are subcategories of one larger category 'cha rges on imports under an
established and uniform practice'".
1463 The European Communities adds that the statements of the
United States and Chinese Taipei with regard to the elimination of divergences in classification
through CNEN "naturally describe a situation that ca n only exist with respect to existing CNENs, i.e.
CNENs duly adopted by the EC Commission". The Eu ropean Communities considers that "[a]s such,
these statements cannot be used in support of the complainants' arguments in the present case". 1464 In
addition, the European Communities argues that the existence of an "established and uniform
practice" cannot be evidenced essentially by two in dividual instances of application (by France and
the Czech Republic) of that measure out of 27 EC member States. 1465 The European Communities
submits that "[b]y asking the Panel to rely on the French and Czech BTIs as evidence of an
enforcement of an allegedly existing Community-w ide measure, the United States and Chinese Taipei
are effectively asking the Panel to replace the missing evidence by a mere assumption that the
remaining EC Member States did the same and for the same alleged reasons". The European
Communities argues that the Panel cannot make such an "assumption".1466
Consideration by the Panel
7.1115 We now turn to consider whether the phrase "under an established and uniform practice"
relates to an "advance in rate of duty". If we find th is to be the case, we will consider the meaning of
the phrase "under an established and uniform practice" and subsequently, whether such requirement is
met.
7.1116 We agree with the European Communities that the phrase "under an established and uniform
practice" relates to an "advance in a rate of duty" . In our view, the phrase "under an established and
uniform practice" qualifies the term "advance", which relates to both "rate of duty", and "or other
charge on imports". We are persuaded that the term "or", as used in the phrase "advance in a rate of
duty or other charge on imports" indicates that "rate of duty" and "other charge" are subcategories of
the broader category of "charge on imports", wh ich encompasses both "dut[ies]" and "other
charge[s]". This interrelation between "rate of dut y" and "other charge" – both subcategories of

1461 Chinese Taipei's comments on the European Communities' response to Panel question No. 160,
paras. 47-48.
1462 Chinese Taipei's responses to Panel question Nos. 162-163.
1463 European Communities' comments on United States' and Chinese Taipei's responses to Panel
question No. 162.
1464 European Communities' response to Panel question No. 163, para. 178.
1465 European Communities' response to Panel question No. 163 (paras. 182-184) and No. 165
(paras. 189-195).
1466 European Communities' response to Panel question No. 165, para. 195.

"charges on imports" - support the view that the phrase "under an established and uniform practice"
must relate to both "rate of duty" and "other char ge" and that it should not be read to refer only to
"other charge" only. Accordingly, we conclude that the "advance in a rate of duty" must be "under an
established and uniform practice".
7.1117 We now turn to the meaning of the terms in the phrase "under an established and uniform
practice". In Japan – Alcoholic Beverages II , the Appellate Body interpreted the term "practice" in
the context of the reference to "subsequent practice" under Article 31.3(b) of the Vienna Convention.
In particular, the Appellate Body stated that "pr actice" entails the following features: "a 'concordant,
common and consistent' sequence of acts or pr onouncements which is sufficient to establish a
discernible pattern...".
1467 I n EC – Selected Customs Matters , the Panel considered that the same
definition could be applied to explain the term "p ractice" in Article X:3(b) of the GATT 1994. We
see no reason to depart from this a pproach and give a different meaning to the term "practice" in
Article X:2 of the GATT 1994. 1468 Accordingly, we will apply the definition of "practice" provided
by the Appellate Body in Japan – Alcoholic Beverages II.
7.1118 When analysing the term "uniform" in the context of the obligation of "uniform"
administration in Article X:3(a) of the GATT 1994, the Panel in European
Communities - Selected Customs Matters, concluded that:
"[T]he dictionary defines the term 'unifo rm' as 'of one unchanging form, character, or
kind; that is or stays the same in different places or circumstances, or at different
times'. This definition, which has been relied upon by both the United States and the
European Communities and was supported by a number of third parties to this
dispute, indicates, that the term 'uniform' requires, inter alia , geographic
uniformity."
1469
7.1119 In line with these considerations, we find that "uni form practice", in its context, refers to the
similar application of a measure in the customs territory of a Member. Accordingly, "uniform
practice" means that the customs authorities of th e EC member States apply the measures at issue
similarly and consistently throughout the customs territory of the European Communities.
7.1120 In addition, we note that Article X.2 requires that such "practice" must also be "established".
The ordinary meaning of "established" is "[i]nstitu te[d] or ordain[ed] permanently by enactment or
agreement" or "set up on a permanent or secure basis". 1470 Accordingly, "established" entails an
element of duration. Hence, under Article X:2, measur es must be of a type that effect an advance in a
rate of duty under an established and uniform practice, which means that the advance in a rate of duty
must be applied ("practice") in the whole customs territory ("uniform") and its application should be
on a secure basis ("established").
7.1121 With the above understanding in mind, we w ill now analyse whether the CNEN amendments
at issue effect an advance in a rate of duty "und er an established and uniform practice". We begin by
referring once more1471 to the explanations of the European Communities that the CNENs "constitute
an important means of ensuring the uniform application of the Common Customs Tariff by the
customs authorities of the Member States"; that they are "a valid aid to the interpretation of the tariff";

1467 Appellate Body Report on Japan – Alcoholic Beverages II, DSR 1996:I, p. 106.
1468 Panel Report on EC - Selected Customs Matters, fn. 898.
1469 Panel Report on European Communities - Selected Customs Matters, para. 7.123.
1470 The Shorter Oxford Dictionary (2002), p. 860.
1471 See para. 7.1028 above.

that the "CNEN reflect a Commission's view on how the CN should be interpreted and applied with
respect to a certain product or a category of product at issue"; that they are "guidance"
1472; and that the
EC member States "consult" the CNEN in assessing the classification at importation. 1473 I n
consequence, we understand that the essence of the CNEN is to inform the customs authorities of the
EC member States about the coverage of particul ar CN codes in order to ensure uniform tariff
treatment throughout the customs territory of the European Communities. In the present dispute, the
measures at issue inform the customs authorities of the EC member States about the coverage of CN
code 8528 12 91 to ensure a Community-wide, uni form application of the Common Customs Tariff,
regardless of the point of entry of the goods in the EC customs territory ("uniform"). In addition, the
measures at issue are to be applied every time a set top box with a WLAN-, ISDN- or Ethernet
connection or with a recording or reproduction device – such as, for example, a hard disk or a DVD
drive – is imported into the customs territory of the European Communities ("established").
7.1122 Finally, we address the European Communities' argument that the two complainants have
presented insufficient evidence to est ablish that the CNEN amendment effects an advance in rate of
duty under an established and uniform practice. Mo re particularly, the European Communities argues
that the existence of an "established and unifor m practice" cannot be evidenced essentially by two
individual instances of application (by France and th e Czech Republic) of that measure out of 27 EC
member States. 1474 We observe that the BTIs were submitted as evidence of enforcement prior to
publication rather than as evidence of an estab lished and uniform practice. The established and
uniform practice arises out of the nature and purpo se of CNENs rather than any specific evidence of
particular classification practice of EC member States provided by the BTIs. Accordingly, and
similarly to the approach we took when considerin g the relevance of the BTIs to determine whether
the CNEN amendments effect and advance in rate of duty, we reject this argument.1475
7.1123 In this section, we first defined the meaning of the terms "effecting an advance in a rate of
duty". Second, we considered whether the CNEN amen dments at issue effect an "advance in rate of
duty". We concluded in the affirmative. Third, we considered whether the requirement of an
"established and uniform practice" applies in this di spute. We concluded that it does. Fourth, we
defined the meaning of "an established and unifo rm practice" and concluded that the CNEN
amendments at issue effect an advance in rate of duty "under an established and uniform practice".
We now consider whether the CNEN amendments were "enforced" before they were "officially
published".
(iv) Whether the draft CNEN were enforced before official publication
Arguments of the parties
7.1124 The United States argues that the European Communities imposed duties on imports of
STBCs using the reasoning contained in the measures at issue before the CNEN was officially
published in the EU Official Journal on 7 May 2008. 1476 The United States claims that the BTIs
before the Panel "support the conclusion" that EC member States relied on the CNEN in their
classification decisions before the official publication of the CNEN amendment. 1477 M o r e

1472 See para. 7.1027 above.
1473 European Communities' response to Panel question No. 23, para. 103.
1474 See para. 7.1114 above.
1475 See para. 7.1107 above.
1476 United States' first written submission, para. 117; United States' second written submission,
para. 122.
1477 United States' second written submission, para. 122.

particularly, the United States points out that "fiv e BTIs submitted as evidence to the Panel were
issued between the vote and official publication clas sifying STBCs in the dutiable heading, and that
four of the five BTI refer to the CNEN as a "justification" for the classification".
1478 T h e U n i t e d
States submits that "it is significant that the EC has offered no BTI issued by any member State
reaching the opposite conclusion."1479 Chinese Taipei argues that "[b]efore the official publication in
May 2008 took place, several EC member States starte d to apply the adopted CNEN". It points out
that the enforcement of the CNEN amendments by the EC member States prior to their official
publication is consistent with the fact that the m easures at issue were made effective upon their vote
by the Customs Code Committee. 1480 Chinese Taipei submits that th e evidence submitted by the
United States and itself shows that customs aut horities applied the CNEN amendment before the
amendment to the CNEN was officially published. 1481 Chinese Taipei points out that the measures at
issue were indeed "enforced" since the EC customs authorities took "actual decisions in specific cases
compelling the observance with the measure, e.g., le vying higher duties, withdrawing contrary BTIs
or issuing BTIs consistent with the criteria laid down in the measure".1482
7.1125 The United States submitted 15 BTIs, i.e. BTIs (1) to (15) below. 1483 Chinese Taipei
submitted six BTIs, five of which were also presented by the United States, i.e. numbers (5); (6); (7);
(14) and (15).1484 Chinese Taipei presented an additional BTI (16). These 16 BTIs are:
1. DEM-3358-05-1 (Germany, 11 August 2005) – 8521 90 00; [14 per cent duty]
2. BED.T.245.774 (Belgium, 23 March 2006) – 8528 12 20; [14 per cent duty]
3. DEM/3971/06-1 (Germany, 13 June 2006) – 8521 90 00; [13.9 per cent duty]
4. DEM/4638/06-1 (Germany, 24 July 2006) – 8521 90 00; [13.9 per cent duty]
5. FR-E4-2007-002839R1 (France, 11 July 2007) – 8521 90 00; [13.9 per cent duty]
6. FR-E4-2007-001251 (France, 11 July 2007) – 8521 90 00; [13.9 per cent duty]
7. FR-E4-2007-00261 (France, 11 July 2007) – 8521 90 00; [13.9 per cent duty]
8. BED.T. 248.255 (Belgium, 23 January 2008) – 8521 90 00; [13.9 per cent duty]
9. CZ05-0187-2008 (Czech Repub lic, 23 April 2008) – 8521 90 00; [13.9 per cent duty]
10. NLRTD-2008-000713 (Netherlands, 20 May 2008) – 8528 71 90; [14 per cent duty]
11. NLRTD-2008-000714 (Netherlands, 20 May 2 008) – 8528 71 90; [14 per cent duty]

1478 United States' second written subm ission, fn. 269; United Stat es' second written submission,
para. 124.
1479 United States' response to Panel question No. 166, para. 90.
1480 Chinese Taipei's first written submission, paras. 470-473. The complainants argue in their
Article X:1 claim that the BTIs prove that the draft CNEN were "made effective" upon their vote in the Customs
Code Committee, see paragraph 7.1064 above.
1481 Chinese Taipei's second written submission, paras. 283-284.
1482 Chinese Taipei's response to Panel question No. 154, paras. 114-115 (emphasis added).
1483 The BTIs 1-13 were presented as Exhibit US-28 and the BTIs 14-15 were presented as Exhibit
US-120.
1484 Chinese Taipei's first written submission, para. 472, fn. 229 (Exhibits TPKM-60 and 61).

12. BGBG/2008/000072 (Bulgaria, 26 May 2008) – 8528 71 90; [14 per cent duty]
13. CZ05-0478-2008 (Czech Repub lic, 10 June 2008) – 8528 71 90; [14 per cent duty]
14. FR-E4-2005-003506 (France, 2 August 2005) - 8528 12 91; [0 per cent duty]
15. GB 114068108 (United Kingdom, 8 April 2005) – 8528 12 91; [0 per cent duty]
16. BED.T.235.330 (Belgium, 4 March 2004) – 8528 12 91; [0 per cent duty].
7.1126 The United States and Chinese Taipei argue that these BTIs establish that at least some EC
member States enforced the CNEN amendments at issue before their official publication on
7 May 2008. More particularly, they point out that some of those BTIs issued before the official
publication of the CNEN amendments in May 2008 e xpressly refer to the measures at issue as part of
the classification justification to classify certain set top box outside the duty-free code. This is the case
for BTIs 5; 6; 7 and 9.
1485 In addition, the two complainants ar gue that the BTIs preceding the vote of
the CNEN amendments at issue in the Custom s Code Committee demonstrate that there was no
uniformity when classifying STBCs with a hard disk . Germany and Belgium, for example, classified
STBCs with a hard disk in a different dutiabl e tariff line, while France and the United Kingdom
classified such STBCs in a duty-free tariff line.1486
7.1127 Similarly to its arguments regarding "made effective" under Article X:1 of the GATT 1994,
the European Communities argues that for a measure to be "enforced", it must first have been
formally adopted by the Commission and published in the EU Official Journal. 1487 It argues that the
measures at issue are merely "prepa ratory acts" that were formally adopted only in April 2008, a few
days before the official publication of the CNEN amendment in the Official Journal on 7 May 2008.
The European Communities contests the relevanc e of these BTIs in establishing the alleged
Article X:2 violation. The European Communitie s submits that it cannot prevent measures by
individual EC member States and questions whether or not the complainants also target the individual
measures (BTIs) by the EC member States. 1488 In its view, the BTIs submitted by the complainants
further confirm that the measures are measures taken by individual EC member States. Finally, the
European Communities contends that the specific circumstances of the case might, at most, be
considered as evidence of the way in which the Eu ropean Communities "administered" in a particular
instance measures of the kind described in Article X:1 in the sense of Article X:3 of the GATT 1994,
but submits that neither the United States nor Chinese Taipei has brought such a claim.1489
Consideration by the Panel
7.1128 The final question before the Panel is to dete rmine whether the CNEN amendments at issue –
which it already considers to be of general application and effecting an advance in a rate of duty under
an established and uniform practice – were enforced before their official publication. It is undisputed
that the publication of the CNEN amendments in th e EU Official Journal c onstitutes such official
publication. Accordingly, we will consider whether the CNEN amendments were enforced before
their official publication in the EU Official Journal on 7 May 2008.

1485 United States' second written submission, fn. 269.
1486 Compare BTIs 1, 3 and 4 classifying set top boxes with a hard disk in CN code 8521 90 00, with
BTI 2 classifying a set top box in 8528 12 20 and BTIs 14-15 classifying a set top box in 8528 12 91.
1487 See para. 7.1041 above.
1488 European Communities' second written submission, para. 97.
1489 European Communities' first written submission, paras. 321-327; European Communities' second
oral statement, paras. 95-96.

7.1129 One of the meanings of "enforced" is "carr[ied] out effectively".
1490 In our view, proof that a
measure has been applied would establish that it was enforced. This is supported by both the Spanish
and French versions of Article X:2. The Spanish version expressly mentions "aplicada", which means
"applied". The French version mentions "mise en vigueur". "En vigueur" means "en application" so
that "mise en vigueur" means "put into application". 1491 This contrasts with "made effective" under
Article X:1 which does not necessarily require an actual application of the laws, regulations, judicial
decisions and administrative rulings of general application.
7.1130 Accordingly, we consider whether the Eur opean Communities indeed applied the CNEN
amendments at issue before 7 May 2008. We will assess each CNEN amen dment in turn. As the
Appellate Body explained in US – Wool Shirts and Blouses , the general rule of the burden of proof is
that the burden rests upon the party, whether compla ining or defending, who asserts the affirmative of
a particular claim or defence. 1492 Hence, it is for the two compla inants to make their case. The
complainants submitted BTIs with a view to proving this aspect of their claims.
7.1131 At the outset, we wish to point out that we see no basis in Article X:2 to require any particular
threshold in terms of the number of instances of enfo rcement that must be demonstrated in order to
establish that a relevant measure has been enforced prior to its official publication within the meaning
of Article X:2. In our view, even a single instan ce of enforcement of a measure before its official
publication could amount to a violation of Article X: 2, depending on the facts of the case. To find
otherwise, we believe, would unde rmine the due process objective embodied in Article X:2. We also
recall our consideration that the "uniform and established practice" relates to the "advance". 1493 I t
does not qualify a required level of enforcement.
7.1132 We start with the October 2006 CNEN amendm ent. This is the CNEN amendment that
excludes from duty-free CN code 8528 12 91 tho se STBCs with WLAN-, ISDN- or Ethernet
connectivity. In reviewing the submitted BTIs and in considering whether they establish that this
CNEN amendment was enforced before its official publication on 7 May 2008, we noted that they all
concern STBCs with a hard disk or a DVD drive. None relates to a classification decision on STBCs
with WLAN-, ISDN- or Ethernet- connectivity. As such, we have no evidence before us establishing
that the October 2006 CNEN amendment was enforced by the Customs authorities of the EC member
States before 7 May 2008. Accordi ngly, we conclude that the Unit ed States and Chinese Taipei have
failed to prove that the October 2006 CNEN amendm ent was enforced before its official publication
in the EU Official Journal as CNEN 2008/C 112/03 on 7 May 2008. Thus we conclude that the two
complainants have not made out their claim that the October 2006 CNEN amen dment is inconsistent
with the European Communities' obligations under X:2 of the GATT 1994.
7.1133 We now turn to the April 2007 CNEN amendmen t. This is the CNEN amendment that
excludes from duty-free CN code 8528 12 91 those STBCs with a recording or reproducing device
such as, for example, a hard disk or a DVD driv e. We have already established that all the BTIs
submitted by the two complainants relate to STBCs with a hard disk or a DVD-drive. We note,
however, that not all BTIs are relevant to this case. We can discard BTIs 10, 11, 12 and 13 since they
were all issued after the date of official publication in the EU Official Journal, i.e. after 7 May 2008.
Accordingly, they cannot serve to establish that the CNEN amendment in question was enforced
before 7 May 2008. We can also discard BTIs 1, 2, 3, 4, 14, 15 and 16, because they were all issued
before the CNEN amendment was voted on in the Cu stoms Code Committee, i.e. before April 2007.

1490 Webster's New Encyclopaedia Dictionary (1993), p. 332.
1492 Appellate Body Report on US – Wool Shirts and Blouses, DSR 1997:I, page 335.
1493 See para. 7.1116 above.

Accordingly, these BTIs are equally irrelevant in establishing that the CNEN amendment in question
was enforced prior to official publication. This l eaves us with BTIs 5, 6, 7, 8 and 9 which could be
relevant since they were all issued after the vote in the Customs Code Committee but before the
official publication of the CNEN amendment in the EU Official Journal. We note that BTIs 5, 6, 7,
and 9 seem particularly relevant since they expressly refer to this CNEN amendment as a
"classification justification". More particularly, the te xt of French BTIs 5, 6, and 7 expressly refers to
the topic "classification justification" to the Customs Code Committee during the 420
th meeting held
on 18, 19 and 20 April 2007. And, Czech BTI 9 mentions under "classification justification" that
"[t]he product cannot be included in TARIC code 8528 71 13 00 because it is equipped with a hard
disk".1494 In other words, the BTI excludes the set top box with a hard disk from duty-free heading
8528 71 13 because of the presence of a hard disk to classify it in dutiable heading 8521 90 00. This
is exactly what the CNEN amendment requires. Fina lly, there is BTI 8. BTI 8 shows that a set top
box with a hard disk was classified in a dutiable h eading. However, we find no explicit reference to
the CNEN amendment in BTI 8; therefore, although in line with the measure at issue, we will not
draw any conclusions with respect to BTI 8.
7.1134 We find that the explicit reference to this CN EN amendment in BTIs 5, 6, 7 and 9 clearly
demonstrates that the customs authorities were well aw are of the measure at issue. In addition, the
fact that the measure at issue was explicitly menti oned as a "classification justification" demonstrates
that at least those EC member States issui ng those BTIs applied this measure at issue before the
official publication of the amendment to the CNEN on 7 May 2008. As a consequence, we find that
those four BTIs illustrate that the 2007 CNEN am endment at issue was enforced by EC member
States to determine the tariff classification prior to the official publication of the CNEN amendment in
the EU Official Journal. Consequently, we find that the United States and Chinese Taipei have
established that the April 2007 CNEN amendment was enforced by at least some EC member States
before its official publication in the EU Official Journal as CNEN 2008/C 112/03 on 7 May 2008.
The United States and Chinese Taipei have therefor e established that the European Communities has
acted inconsistently with Article X:2 in respect of the April 2007 CNEN amendment.
7.1135 In sum, we have determined that the United States and Chinese Taipei did not establish that
the European Communities enforced the Octobe r 2006 CNEN amendment before its official
publication as CNEN 2008/C 112/03 in the EU Official Journal on 7 May 2008. On the other hand,
we have found that the United States and Chin ese Taipei have provided sufficient evidence to
establish that the April 2007 CNEN amendment was enforced before its official publication as
CNEN 2008/C 112/03 in the EU Official Journal on 7 May 2008, in violation of Article X:2 of the
GATT 1994. Accordingly, we conclude that the European Communities has acted inconsistently with
Article X:2 of the GATT 1994 with respect to the April 2007 CNEN amendment.
G. MULTIFUNCTION DIGITAL MACHINES (MFMS)
7.1136 In this section of the Reports the Panel will consider the complainants' claims that certain
EC measures are inconsistent with Articles II:1( a) and (b) of the GATT 1994 because they result in
less favourable tariff treatment to imports of cer tain multifunction digital machines ("MFMs") than
that provided for these products under the EC Schedule and because the tariff treatment provided is in
excess of that provided for in the EC Schedule. In the joint Pa nel request, the complainants explain
that MFMs are machines which perform two or mo re of the functions of printing, copying, or
facsimile transmission, capable of connecting to an automatic data-processing machine or to a

1494 See Exhibit US- 28: the Original French BTIs mention "Décision du Comité des douanes lors de la
420ème session des 18, 19 et 20 avril 2007". The complainants provided a translation of the Czech BTI that
was not contested by the European Communities.

network (including devices commercially known as M FPs (multifunctional printers), other "input or
output units" of "automatic data-processing machines" (ADP), and facsimile machines).
1495
7.1137 Throughout the course of the proceedings the complainants have divided MFMs into two sub-
categories: i) ADP MFMs, which are capable of c onnecting to an ADP machine (e.g., a computer) or
computer network; and ii) Non-ADP MFMs, which are not connectable to an ADP machine, but
connect instead to a telephone line, such that they necessarily have a facsimile transmission
function.
1496 In considering the substance of the compla inants' claims with respect to MFMs in
subsections VII.G.3 and VII.G.4 below, we will like wise divide them into these two subcategories of
ADP MFMs and non-ADP MFMs.
7.1138 The complainants submit that when the ITA was conc luded, MFMs entering the European
Communities were classified in the duty-free HS1996 subheadings 8471 60 or 8517 21. They claim,
however, that over a period of time beginning in 1999, the European Communities started to adopt
measures based on "arbitrary classification criteria", wh ich in turn resulted in the reclassification of
MFMs under dutiable headings (i.e., as "photocopying apparatus" under HS1996 subheading 9009 12,
which carries a 6 per cent duty). The complainants claim that this alleged reclassification "eroded", or
"emptied", the ITA-based, duty-free concessions in the EC Schedule for these products, ultimately
leading to the imposition of 6 per cent duties on most MFMs imported into the European
Communities.
1497 It is the levying of this 6 per cent ad valorem duty to products which they believe
should be afforded duty-free treatment that is the focus of the complainant's claims.
7.1139 The European Communities argues, however, that the products at issue do not fall
exclusively within the tariff headings that embody the European Communities' duty-free concessions.
Rather, they could also, prima facie, be properly classified as falling within a separate tariff heading
that embodies a dutiable concession, which heading is currently being applied by EC customs
authorities. According to the European Communitie s, in such a situation where a product may prima
facie fall within more than one tariff heading, proper application of the rules of the HS will result in
some of the products properly falling within the dutiable concession. Therefore, the European
Communities submits that the dutiable tariff treatm ent of certain MFMs resulting from the measures
at issue simply reflects a proper interpretation of the scope of these concomitantly applicable duty-
free and dutiable EC concessions rather than any in consistency with Article II. Consequently, the
European Communities asks the Panel to reject the complainants' claims.
7.1140 The task before the Panel, therefore, is to determine: (a) the scope of the duty-free tariff
concession in the EC Schedule; (b) whether the produc ts at issue fall within the scope of the duty-free
tariff concession; (c) whether the challenged me asures result in the imposition of duties on the
products at issue in excess of those provided for in the EC Schedule; and (d) whether the measures at
issue result in less favourable treatment of the pr oducts at issue than that provided for in the
EC Schedule.

1495 Joint Panel Request, WT/DS735/8, 376/8, 377/6, fn. 15.
1496 We use these terms with a view to aid our analysis. Our use of these terms is without prejudice to
the positions of the parties, as well as our own, on any further or specific charac teristics these products may
contain, as discussed and considered below.
1497 United States' first written submission, paras. 1 and 75; Japan's first written submission, paras. 52-
56; Chinese Taipei's first written submission, paras. 493-495. The United States claims that evidence shows
such "reclassification" by EC cust oms authorities from duty-free to dutia ble headings (United States' second
written submission, para. 103 and its fn. 219; comparing some BTIs that the United States claims classified
MFMs in duty-free subheadings prior to and during ITA negotiations (Exhibit US-106) with various other BTIs
that the United States claims classi fied MFMs in dutiable subheadings after the measures at issue came into
place (Exhibit US-62)).

7.1141 We note that the approach we have outlined re quires the Panel first to identify the measures
and the products at issue. This is particularly important in this case as the European Communities has
raised several points calling into question whether certain measures are within the Panel's terms of
reference. Therefore, before proceeding to the subs tance of the complainants' claims, we first turn to
whether particular aspects of those claims are properly before the Panel.
1. Preliminary issues
7.1142 During these proceedings, the Eu ropean Communities raised va rious issues related to the
jurisdiction of this Panel with respect to the MF M claims. First, the European Communities argued
that several measures identified by the complainants ' in their joint Panel request are effectively no
longer applicable in practice and are therefore irrelevant to the Panel's analysis. Second, the European
Communities argued that one of the measures challe nged was not legally bindi ng under EC law.
Third, the European Communities has alleged that the complainants have added during the course of
the proceedings new measures and new claims that were not included in the joint Panel request and
are thus outside the Panel's terms of reference.
7.1143 We will address each of these issues in turn. We note that the Appellate Body has explained
that, taken together, the identification of the specific measures at issue and the legal basis of the
complaint comprise the "matter referred to the DS B", which forms the basis for a panel's terms of
reference under Article 7.1 DSU.
1498
7.1144 One of the essential purposes of the terms of refe rence is to establish the jurisdiction of the
panel by defining the precise claims at issue in the dispute. 1499 The Appellate Body has also observed
that the vesting of jurisdiction in a panel is a fundamental prerequisite for lawful panel
proceedings.1500 Therefore, we first must address these i ssues before we can proceed to address the
substance of the complainants' claims.
7.1145 As the joint Panel request serves as the basis for the terms of reference of this Panel, we will
start our analysis by first setting forth the relevant text of the joint Panel request.
(a) The measures at issue identified in the joint Panel request:
7.1146 In their joint Panel request, the complainants identified the following as the EC measures at
issue in this dispute with respect to their clai ms of tariff treatment of MFMs by the European
Communities that is inconsistent with Articles II:1(a) and II:1(b) of the GATT 1994:
- Commission Regulation (EC) No. 517/19991501;

- Report of the Conclusions of the 360 th meeting of the Customs Code Committee (the
"2005 Statement")1502;

- Commission Regulation (EC) No. 400/2006
1503;

1498 Appellate Body Report on Guatemala – Cement I, paras. 69-76.
1499 Appellate Body Report on Brazil – Desiccated Coconut, DSR 1997:I, p. 186.
1500 Appellate Body Report on Mexico – Corn Syrup (Article 21.5 – US), para. 36.
1501 Exhibits US-59; JPN-4; TPKM-35.
1502 Exhibits US-60; JPN-6; TPKM-32.
1503 Exhibits US-61; JPN-5; TPKM-36.

- Council Regulation (EEC) No. 2658/87, as amended (the "CN2007")
1504; and

- Any amendments or extensions and any related or implementing measures.

7.1147 In particular the joint Panel request states th at "Customs authorities of EC member States
impose duties on MFMs" through various measures listed therein. Among these measures the
"Council Regulation (EEC) No. 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and
on the Common Customs Tariff, including all annex es thereto, as amended (including amendments
adopted pursuant to Commission Regulation No. 1214/2007 of 20 September 2007)" is indicated.
1505
7.1148 Next, the joint Panel request explains that the modifications to the EC Schedule that were
made, "to reflect the commitments made under the ITA" included "the concessions for '[f]acsimile
machines', as contained in HS 8517 21 00 and 'input or output units' of 'automatic data-processing
machines', as in HS category 8471 60. The bound duty rate for both products is zero."
7.1149 Additionally, the joint Panel request alleg es that the Commission Regulation No. 517/1999
and 400/2006 subject "certain MFMs" to "a duty rate of 6 per cent" by classifying them as "indirect
process electrostatic photocopiers" and "photocopyi ng apparatus", respectively. The joint Panel
request also asserts that the 2005 Statement provides for "multifunctional devices" having a certain
copy speed to be classified in the 6 per cent dutiable HS heading 90.09.

7.1150 The joint Panel request also claims that Council Regulation No. 2658/87, as amended
(including the 2006 amendment which promulgated th e CN2007), with the creation of three specific
CN subcategories, is inconsistent with the Eu ropean Communities' concessions. In particular, the
joint Panel request alleges that:
"On 31 October 2006, the EC amended C ouncil Regulation (EEC) No. 2658/87 of 23
July 1987 on the tariff and statistical nomenclature and on the Common Customs
Tariff, creating CN 8443 31 10 ('[m]achines performing the functions of copying and
facsimile transmission, whether or not with a printing function, with a copying speed
not exceeding 12 monochrome pages per minute'), CN 8443 31 91 ('[o]ther;
[m]achines performing a copying function by scanning the original and printing the
copies by means of an electrostatic engine') and CN 8443 31 99 ('[o]ther'). By virtue
of these subcategories, MFMs with copying speeds of more than 12 monochrome
pages per minute and with an electrostatic engine are classified under CN 8443 31 91.
The duty rate for CN 8443 31 91 is 6 per cent."
1506
7.1151 Finally, the joint Panel request avers that the co mplainants are also raising claims against any
amendments or extensions of the specifically listed measures as well as any related or implementing
measures thereof.

1504 As amended, inter alia, by Commission Regulation No. 1549/2006, which introduced the CN2007
(Exhibits JPN-2;TPKM-34). For a detailed explanation of the CN, see Section VII.B.4.(a), above.
1505 Joint Panel Request, WT/DS375/8, 376/8, 377/6, page 5 and fn. 16 (original footnote omitted).
1506 Joint Panel Request, WT/DS375/8, 376/8, 377/6, page 6 (original footnote omitted).

(b) Are Commission Regulation Nos. 517/1999 and 400/2006 and the 2005 Statement outside the
Panel's jurisdiction because they are no longer effectively applicable?
(i) Arguments of the parties
7.1152 The European Communities argues that Commission Regulation Nos. 517/1999 and
400/2006 are both based on CN code 9009 12 00, wh ich was permanently removed as a consequence
of the implementation by the European Communitie s of the HS2007, as reflected in the CN2007 (and
subsequent versions therein). It further notes th at in the HS2007, heading 9009 was replaced by three
entirely new HS subheadings, namely subheadings 8443 31, 8443 32 and 8443 39. The European
Communities therefore claims that when the CN2007 entered into force on 1 January 2007,
Commission Regulation Nos. 517/1999 and 400/20 06, although still "formally in force", became
"effectively inapplicable in practice" from that date and remain so as of the date of the establishment
of this Panel. The European Communities subm its that, due to the difference in language and
structure between the old CN [HS] code 9009 and the new CN [HS] code 8443, it is very difficult, and
even "pointless", to apply these two classification re gulations today by "analogy". The European
Communities also states that, as a consequence of these changes, it is in the process of formally
repealing Commission Regulation Nos. 517/1999 and 400/2006, as well as all other Regulations
providing for the classification of certain pr oducts under HS heading 9009. The European
Communities further states that it intends to do so by the beginning of October 2009, at the latest.
1507
7.1153 Finally, with respect to the 2005 Statement, the European Communiti es argues that the 2005
Statement has in any case been superseded by the advent of the 12 ppm copy speed criterion under the
CN2007 and is therefore not a measure before the Panel since it is no longer applicable.1508
7.1154 The United States and Japan (with respect to Commission Regulation Nos. 517/1999 and
400/2006 as well as the 2005 Statement) and Chinese Taipei (only with respect to Commission
Regulation Nos. 517/1999 and 400/2006) 1509 respond that these measures are still valid and in effect,
and still form part of the EC legal system, at l east so long as they have not been expressly and
formally withdrawn, annulled, revoked or amended.1510

1507 European Communities' response to Panel question No. 110, para. 20.
1508 European Communities' second written submission, para. 160.
1509 With respect to the 2005 Statement, Chinese Taipei considers that it "has effectively been
superseded" by the CN2007 (and subsequent versions therein) due to incorporation of the 12 ppm copy speed
criterion in that CN. (Chinese Taipei's response to Panel question No. 24).
1510 Complainants' responses to Panel question Nos. 18 and 24; United States' second written
submission, paras. 5 and 103; Un ited States' second opening statement, para. 7; Japan's second written
submission, para. 34; Chinese Taipei's second written submission, paras. 44, 46-51, 56 and 291-292. The
United States further notes that the European Communities itself "concedes" that Commission Regulation Nos.
517/1999 and 400/2006 remain "formally in force" and that the 2005 Statement has "some interpretative value"
(United States' second written submi ssion, para. 105 (citing the Europ ean Communities' response to Panel
question No. 24)). Chinese Taipei further submits that under EC law, there is no "implied annulment" or
"annulment by analogy" (Chinese Taipei's responses to Panel question Nos. 18 and 24 and second written
submission, para. 48). Chinese Taipei refers to the European Court of Justice in Cabletron (C-463/98) as an
example of an express annulment of classification regulations (Chinese Taipei's second written submission,
para. 48, fn. 35). Chinese Taipei also refers to Commission Regulation No. 705/2005 (Exhibits TPKM-83; EC-
102) as an example of an express amendment and repealing of classification regulations due to changes in the
CN that resulted inter alia in the elimination of certain CN codes (Chinese Taipei's second written submission,
paras. 49-50). Japan, in the alternative, argues that, if these three measures are indeed "no longer in effect as a
legal matter", then they at least se rve to "help explain the cu rrent version of the measure at issue". (Japan's
response to Panel question No. 18).

7.1155 The complainants also submit that evidence, in the form of a BTI from France, shows
contrary to the European Communities' argu ment that these measures became "effectively
inapplicable" with the advent of the new CN2007, th at in fact EC customs authorities relied on these
measures even after the CN2007 had entered into force.
1511 More generally, Japan and Chinese Taipei
further claim that EC national authorities today can still make their tariff classifications based on such
measures by simply using a "table of equivalence" or "conversion table" be tween the old CN and the
current one, which allows these authorities to concl ude, for example, that an apparatus previously
classified under the old CN code 9009 12 00 would now fall under the new CN code 8443.1512
7.1156 The European Communities responds that the "conversion table", mentioned by Japan and
Chinese Taipei, is not legally binding and does not amend the terms of earlier classification
regulations based on a different nomenclature. Furthe rmore, as this table "has not been adopted by
the Commission, [it] therefore, reflects exclusiv ely the views of the Commission services responsible
for customs matters".1513 As to the French BTI that was cited by the complainants as evidence that the
measures at issue are still applicable today, th e European Communities explains that the reference
made in this BTI to Commission Regulation No. 517/1999 served "merely as additional authority
supporting the interpretation" taken by the French customs authorities.
1514
(ii) Consideration by the Panel
7.1157 The Panel is faced with two questions. First, what is the factual status of Commission
Regulation Nos. 517/1999 and 400/2006 and the 2005 St atement? Second, if the implementation of
the CN2007 did indeed supersede and render inapplicable Commission Regulation Nos. 517/1999 and
400/2006 as well as the 2005 Statement, does this mean they can no longer be considered measures at
issue with respect to the MFM claims?
7.1158 We understand the European Communities' argumen t in essence to be the following: The
adoption of the CN2007 resulted in these three me asures becoming "effectively inapplicable in
practice"; therefore, the only measure at issue in this dispute is the current CN. We first note that
there is no disagreement among the parties to this di spute that, at the time the Panel was established,
Commission Regulation Nos. 517/199 9 and 400/2006 were, as the Eu ropean Communities itself puts

1511 More specifically, the complainants make refe rence to BTI FR-E4-2007-002262-R (issued by the
French customs on 13 January 2007), which classified an ADP MFM in CN2007 code 8443 31 91 and cited
Commission Regulation No. 517/1999 as one of the justifications for this decision (Exhibits US-62;
TPKM-84). See United States' responses to Panel qu estion Nos. 18 and 24; United States' second written
submission, footnote 220 to para. 105; United States' se cond oral statement, para. 7; Japan's second written
submission, para. 34 (referring to the United States' response to Panel question No. 18); Chinese Taipei's
1512 Japan's and Chinese Taipei's responses to Panel question No. 24; Chinese Taipei's second written
submission, paras. 52 and 53.
1513 European Communities' second written submission, para. 156 (commenting on the complainants'
responses to Panel question No. 24). In support of this view, the European Communities points to the language
of the following disclaimer, contained in a document called "Conversion Tables for CN 2006-2007 and
CN 2007-2006" (Exhibit EC-93):

"Disclaimer: these conversion tables are provided only for information and have no legal
value. Only the Combined Nomenclature is binding."

1514 European Communities' second written submission, para. 158 (commenting on the complainants'
responses to Panel question No. 24).

it, still "formally in force" within the EC legal system.
1515 Additionally, although the European
Communities has told the Panel that the measures w ould be repealed by October 2009, the European
Communities submitted no information to the Panel confirming whether this had actually occurred.
7.1159 We note that, even if the formal repeal of the measures did occur after the Panel was
established and its terms of reference had been set, it would still be within our discretion to decide
how to take into account subsequent modifica tions or a repeal of the measures at issue. 1516 In
deciding how to exercise that discretion, we take note that some past panels have proceeded to rule on
repealed or expired measures if those measure s still had lingering effects after the repeal 1517 or if they
thought such a ruling would aid in securing a positive resolution to the dispute as required by
Article 3.7 of the DSU. 1518 Other past panels have also deci ded to make rulings on repealed or
expired measures in cases where the respondent Member had not conceded the WTO inconsistency of
the repealed measure and such measure could be easily re-imposed.1519
7.1160 We discern no disagreement among the parties th at the complainants specifically identified
Commission Regulation Nos. 517/1999 and 400/2006 and the 2005 Statement in the joint Panel
request. We also note that the complainants argue that the measures continue to have lingering effect
as evidenced by the reliance of Fr ench customs authorities on the re gulations and the use by other
national customs authorities within the European Communities of a "conversion table" relating back
to the pre-existing tariff headings. Furthermore, as will be discussed further below, in relation to the
2005 Statement, even if it were true that these documents are "effectively inapplicable" and have no
particular legal weight within the European Communities' legal structure that does not ipso facto
mean that they are not susceptible to challenge in WTO dispute settlement. 1520 Additionally, the
complainants continue to request a finding from th e Panel on these measures and are of the belief that
a finding from the Panel on the consistency of th ese measures with the EC's obligations under the
GATT 1994 would aid in securing a positive resolution of this dispute. Finally, the European
Communities has not argued that the intended repeal of these measures was due to their inconsistency
with the European Communities' WTO obligations nor has the Eur opean Communities conceded that
they are indeed WTO-inconsistent. For all the foregoing reasons, the Panel will proceed to make
findings with respect to the WTO consistency of these measures.
7.1161 As explained above, the European Communities indicated to the Panel that it intended to
repeal the measures during the course of these proc eedings; however, there us no evidence properly
before the Panel as to whether such repeal actua lly took place or whether the measures continue to
have legal effect. Additionally, any such re peal would have taken place after the Panel was

1515 We also note, as pointed out by the European Communities itself, that as recently as 2009 the
European Court of Justice, in its decision in the Kip case, expressly "upheld th e validity" of Commission
Regulation No. 400/2006 (see the European Communities' second oral stat ement, para. 138; see also Chinese
Taipei's response to Panel question No. 18 and Chin ese Taipei's second written submission, para. 56).
Furthermore, we consider the fact that the European Communities is "in the process of formally repealing"
Commission Regulation Nos. 517/1999 and 400/2006 a furt her indication that these measures are indeed still
"valid" and thus "formally in force".
1516 Appellate Body Report on EC – Bananas III (Article 21.5 – Ecuador II), para. 270.
1517 Panel Report on US – Upland Cotton , paras. 7.122, 7.128; upheld by Appellate Body Report on
US - Upland Cotton, para. 274.
1518 Panel Report on China – Publications and Audiovisual Products, para. 7.453.
1519 Panel Report on India – Additional Duties, paras. 7.69-7.70.
1520 See paras. 7.1164-7.1169 below.

established and its terms of reference set.
1521 Therefore, the Panel considers that it may proceed to
make recommendations with respect to these measures.
(c) Is the 2005 Statement a measure that can be subject to WTO dispute settlement?
(i) Arguments of the Parties
7.1162 All complainants cite the 2005 Statement as a measure at issue. 1522 The United States and
Japan argue that, through the 2005 Statement, the Eur opean Communities made explicit for the first
time that output speed – pages per minute – would be the "key criterion" for determining whether or
not an MFM would be subject to duties, even t hough copying speed had no basis in the language of
the various headings at issue. 1523 The complainants submit that this page per minute criterion
effectively moves MFMs with a fax function from duty-free heading 8517 (covering "[f]acsimile
machines") into dutiable CN code 9009 12 00 (cove ring photocopying machines) and, as of HS2007,
dutiable CN code 8443 31 91, both subject to a 6 per cent customs duty. 1524 Consequently, the
application of this criterion results in certain MFMs being excluded from duty-free treatment.
According to the United States, this constitutes a " per se " exclusion from duty-free treatment. 1525
Further, Chinese Taipei also mentions that, in addition to this new criterion applying on the
Community-wide basis, some EC member States, such as Germany and the United Kingdom, have
also incorporated the criterion of 12 pages per minute into their "national classification guidance".1526
7.1163 In response, the European Communities argues that the 2005 Statement was "never meant to
have any legal effects". 1527 The European Communities submits that the 2005 Statement "records an
opinion expressed by [the Customs Code Committee]" and that "[w]hile it may have some interpretive
value, it is not a legal act under EC law".1528
(ii) Consideration by the Panel
7.1164 With respect to the 2005 Statement, the Panel understands the essence of the European
Communities' argument to be as follows: The 2005 Statement "is not a legal act under EC law".
Therefore, it cannot be a "measure" at issue subject to WTO challenge.1529

1521 Appellate Body Report on US – Certain EC Products, para. 81; Appellate Body Report on
US - Upland Cotton, para. 272; and Appellate Body Report on EC – Bananas III (Article 21.5 – Ecuador II),
para. 271.
1522 United States' first written submission, para. 78 (Exhibit US-60); Japan's first written submission,
paras. 42-43 (Exhibit JPN-6); Chinese Taipei's first written submission, para. 114 (Exhibit TPKM-32).
1523 United States' first written submission, para. 78; Japan's first written submission, para. 57.
1524 United States' first written submission, paras. 78 and also 79 (referring to BTIs issued in 2006 that
allegedly demonstrate that EC member States classified MFMs in dutiable CN code 9009 12 00 as photocopiers
on the basis of the page per minute criterion (Exhibit US-62)); Japan's first written submission, para. 44
(referring to BTIs that allegedly demonstrate that before and after 2007, EC member States classified MFMs in
dutiable CN code 9009 12 00 as photocopiers on the basis of the page per minute criterion (Exhibits JPN-7 and
8)); Chinese Taipei's first written submission, para. 488.
1525 United States' first written submission, para. 148.
1526 Chinese Taipei's first written submission, para. 506.
1527 European Communities' second written submission, para. 160.
1528 European Communities' response to Panel question No. 24.
1529 Panel Report on China—Publications and Audiovisual Products, 7.167-7.171 (finding that an
analysis under Article 3.3 is required when a party asserts that an instrument should not be examined by a panel
because it has no legal effect and that such analysis is required to ensure that a panel does not exceed its
authority).

7.1165 Article 3.3 of the DSU allows a Member to challenge "measures taken by another Member"
which it believes may be impairing benefits accruing to it directly or indirectly under the covered
agreements. Prior panels have determined that, if something brought before them was not a "measure"
within the meaning of Article 3.3 of the DSU, they lacked jurisdiction to hear the complaint about the
measure.
1530 Previous panels have also concluded that , just as with other jurisdictional questions, a
determination of whether what is brought before a panel is indeed a measure subject to WTO dispute
settlement can and should be made regardless of whether it is raised by the parties to the dispute.1531
7.1166 The Appellate Body has clarified that "[i]n prin ciple, any act or omission attributable to a
WTO Member can be a measure of that Member for purposes of dispute settlement proceedings." 1532
and that "acts or omissions that are so attributable are, in the usual case, the acts or omissions of the
organs of the state, including those of the executive branch.1533"1534
7.1167 A determination of whether something is a "measure" "must be based on the content and
substance of the instrument, and not merely on its form or nomenclature."1535 The Appellate Body has
clarified that the legal status of an instrument w ithin the domestic legal system of a Member is not
relevant for determining whether that instrument is a measure within the meaning of Article 3.3 of the
DSU.1536 Rather any acts, attributable to a Member, which set forth rules or norms that are intended
to have general and prospective application are measures subject to WTO dispute settlement.1537
7.1168 When a Member brings a challenge to a rule or norm "as such", as is the case here, the
Member must establish that it is a rule or norm wh ich is attributable to the responding Member, its
precise content, and that it has general and prospec tive application. Evidence to establish the required
elements can be proof of the systematic a pplication of the challenged "rule or norm". 1538 We note
that we have dealt with the issue of what is required to challenge a measure "as such" in the context of
our discussion of the European Communities' argume nts on the CNEN. See paragraphs 7.153 - 7.160
above. We see no reason why the conclusions would be any different here.
7.1169 In view of the above, we find unpersuasive the European Communities' argument that the
2005 Statement should be excluded from the Panel's jurisdiction solely because it is not "legally
binding" under EC domestic law. Having so found however, our analysis must not stop there. We
must still determine whether the complainants have established that the 2005 Statement is attributable
to the European Communities and whether it is a rule or norm of general and prospective application,
such that it fits within the meaning of a "measure" which can be challenged "as such" in WTO dispute
settlement pursuant to Article 3.3 of the DSU.

1530 Panel Report on China – Publications and Audiovisual Products, para. 7.1694.
1531 Panel Report on China – Publications and Audiovisual Products, para. 7.1658.
1532 Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review, para. 81.
1533 ( footnote original ) Both specific determinations made by a Member's executive agencies and
regulations issued by its executive branch can constitute ac ts attributable to that Member. See, for example, the
Panel Report in US – DRAMS, where the measures referred to the panel included a USDOC determination in an
administrative review as well as a regulatory provision issued by USDOC.
1534 Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review, para. 81.
1535 Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review, fn. 87.
1536 Appellate Body Report on US – Oil Country Tubular Goods Sunset Reviews , para. 187. (finding
that a non-binding "polic y bulletin" had normative value because it provided administrative guidance and
created expectations among the public and among private actors.)
1537 Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review, para. 82.
1538 Appellate Body Report on US – Zeroing (EC) , para. 198 . While we note that the systematic
application of the challenged rule or norm can be ev idence of its general and prospective application such
evidence is not necessarily required to substantiate an "as such" challenge to a particular rule or norm.

Is the 2005 Statement Attributable to the European Communities?

7.1170 We first observe that the complainants have asserted, and the Europ ean Communities has not
refuted, that the 2005 Statement is a statement of the Customs Code Committee of the European
Communities. We recall, in particular, that the Cu stoms Code Committee consists of a representative
from the Commission's service (who chairs it) and representatives from all EC member States.1539 We
further recall that:
"... Article 8 of Regulation No. 2658/87, as amended, also provides that 'customs
items' can be submitted by the Chairman of the Customs Code Committee for
examination, either on its own initiative or at the request of a representative of an EC
member State. Under this 'Article 8 procedure', the Customs Code Committee
functions as a "discussion forum" between the Commission and the EC member
States, and not as the 'Comitology Committee' . The result of such discussion is then
reflected in the minutes of the meeting as an 'Article 8' topic. ..." (footnote
omitted)
1540
7.1171 The specific statement at issue resulted from a deliberation under item 3 of the agenda of the
Customs Code Committee's 360 th meeting, which contains "[i]tems submitted to the Committee for
examination under Article 8 of the Regulation (EEC) No 2658/87". 1541 More specifically, the issue
that resulted in such deliberation was included in sub-item 3.11 of that agenda ("Multifunctional
digital copiers (doc. TAXUD/2072/2001)*"). 1542 Among the deliberations under item 3.11, it is
expressly stated that all EC member States "agreed" to have a "clarification" with respect to the
classification of certain MFMs in a "Committee stat ement" to be included in Annex VII of that
Customs Code Committee's meeting report. 1543 The Statement in Annex VII, again, indicates that the
Customs Code Committee had "agreed" to what is stated therein.1544
7.1172 We note that the European Communities does not dispute that the 2005 Statement emanated
from an official organ of the European Communities. Therefore, based on the foregoing, we conclude
that the 2005 Statement is attributable to the European Communities.
Does the 2005 Statement set forth rules or norms of general and prospective application?
7.1173 With respect to whether the complainants ha ve demonstrated that the 2005 Statement sets
forth rules or norms of general and prospective a pplication, we note that the complainants have
provided the Panel with the precise content of the Statement and provided evidence that the
application of the criteria therein led national cust oms authorities to classify MFMs in the dutiable
tariff subheading. Additionally, Chinese Taipei pointed out that some national customs authorities
incorporated the results of the statement into their own national classification guidance. 1545 We also
note the opinion of the Committee seems to reflec t the position of the European Communities as a
whole and may therefore have "interpretative value" 1546. We also recall that the panel in
EC - Selected Custom Matters explained that, although the results from discussions under an "Article

1539 See paragraph 7.47 above.
1540 See paragraph 7.48 above.
1541 See 2005 Statement, p. 2.
1542 See 2005 Statement, p. 3. The other agenda item 3's subheadings were: " Items for a first
examination (fact finding)" and "Items for discussion." Id., at pp. 2-3.
1543 See 2005 Statement, pp.7-8.
1544 See 2005 Statement, p. 11.
1545 Chinese Taipei's first written submission, para. 506.
1546 European Communities' response to Panel question No. 24.

8 procedure", either in the form of "statements" or "opinions", are "not legally binding", the European
Court of Justice has held that they neverthel ess "constitute an important means of ensuring the
uniform application of the common customs tariff by the authorities of the member States and, as
such, can be considered as a valid aid to the interpretation of the Common Customs Tariff."
1547
Therefore, we believe that the 2005 Statement, a lthough not "legally binding" within the European
Communities' legal system, nonetheless does set fort h rules or norms of general and prospective
application within the European Communities.
Conclusion of the Panel
7.1174 In view of the foregoing, we conclude that the 2005 Statement is a measure within the
meaning of Article 3.3 of the DSU as it is attri butable to the European Communities and sets forth
rules or norms of general and prospective applica tion. Consequently, because the 2005 Statement is a
measure and it is undisputed that it was specifically identified in the joint Panel request, the Panel will
proceed to make findings with respect to the WTO consistency of this measure.
(d) Have the complainants added new measures and new claims that were not specified in the
joint Panel request?
7.1175 The European Communities has ar gued that the complainants, by alleging that the European
Communities has taken certain measures inconsistent with European Communities' tariff concessions
embodied in codes of the CN other than in the CN codes specified in the joint Panel request, have
raised new measures and new claims which are not within the Panel's term s of reference. The
European Communities' arguments ra ise the issue of whether the comp lainants have complied with
the obligations set forth in Article 6.2 of the DS U as to what must be contained in a request for
establishment of a panel. Therefore, in this secti on, we will discuss the content of the obligations in
Article 6.2 and whether the measures and claims which the European Communities' alleges are
inadmissible are within our terms of reference.
(i) Article 6.2 of the DSU
7.1176 Article 6.2 of the DSU provides, in relevant part:
"The request for the establishment of a pane l shall be made in writing. It shall
indicate whether consultations were held, identify the specific measures at issue and
provide a brief summary of the legal basis of the complaint sufficient to present the
problem clearly."
7.1177 In Korea – Dairy, the Appellate Body explained that Article 6.2 contains four distinct
obligations with respect to the Panel Request:

1547 Panel Report on EC - Selected Customs Matters , para. 2.40 (citing the European Court of Justice
(Dittmeyer), para. 4). We find the description of the value of the 2005 Statement provided by the European
Court of Justice itself is analogous to that of the Sunset Policy Bulletin of the US Department of Commerce
which was challenged "as such" in several cases and found to be a measure by those panels and the Appellate
Body. See Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review, para. 81; Panel Report on
US – Oil Country Tubular Goods Sunset Reviews, para. 7.136. For example, the United States has explained
that "under [US] law, the Sunset Policy Bulletin w ould be considered a non-binding statement, providing
evidence of [the DOC's] understanding of sunset-relate d issues not explicitly addressed by the statute and
regulations." Panel Report on US – Corrosion-Resistant Steel Sunset Review, para. 7.121.

"The request must: (i) be in writing; (ii) indicate whether consultations were held;
(iii) identify the specific measures at issue; and (iv) provide a brief summary of the
legal basis of the complaint sufficient to present the problem clearly."
1548
7.1178 The arguments of the European Communities in this respect concern the latter two
obligations. The Appellate Body has explained that these requirements are intended to ensure that the
complainant present[s] the problem clearly in the panel request. 1549 The particular importance of
compliance with the two latter obligations in Article 6.2 was highlighted by the Appellate Body which
has explained that together the identification of the specific measure and the legal basis of the
complaint comprise the "matter referred to the DS B" which forms the basis for a panel's terms of
reference under Article 7.1 of the DSU.1550
7.1179 The terms of reference have two essential purposes: first, to give the parties and third parties
sufficient information concerning the claims at issu e in the dispute to allow them an opportunity to
respond to the complainant's case; and second, to establish the jurisdiction of the panel by defining the
precise claims at issue in the dispute.1551
7.1180 Compliance with the requirements of Article 6. 2 must be determined on the merits of each
case, having considered the panel request as a whol e, and in the light of attendant circumstances. 1552
When reviewing a panel request, "it is important when examining the consistency of part of the
request for establishment with Article 6.2 of the DSU, not to examine parts of this request in isolation
. . . the request must be considered as a whole, and the different claims in the request for
establishment must be read in their context." 1553 Additionally, a panel may consult the submissions
and statement made during the course of the panel pr oceedings "in order to confirm the meaning of
the words used in the panel request and as part of the assessment of whether the ability of the
respondent to defend itself was prejudiced."1554
Identification of the specific measures at issue
7.1181 For purposes of compliance with Article 6.2 it is necessary for the complaining party to
identify the measures at issue. Although it may be su fficient to identify a measure by its form, (i.e.,
by the name, number, date and place of promulgation of a law, regulation, etc. ...) this is not the only
manner of identification which could serve to satisfy the obligation in Article 6.2 of the DSU. A
measure may also be identified by its substance 1555, e.g. by providing a narrative description of the
nature of the measure, so that what is referred to adjudication by a panel may be discerned from the
panel request.1556

1548 Appellate Body Report on Korea – Dairy, para. 120.
1549 Appellate Body Report on US – Continued Zeroing, para. 160.
1550 Appellate Body Report on Guatemala – Cement I, paras. 69-76; see also Appellate Body Report on
US – Carbon Steel, paras. 125-127.
1551 Appellate Body Report on Brazil – Desiccated Coconut, DSR 1997:I, p. 186.
1552 Appellate Body Report on Korea – Dairy , paras. 124-127; also Appellate Body Report on
US - Carbon Steel, para. 127.
1553 Panel Report on Mexico – Anti-dumping Measures on Rice, para. 7.31 (original footnote omitted).
1554 Appellate Body Report on US - Carbon Steel, para. 127.
1555 Panel Report on Argentina – Footwear (EC) , para. 8.40; also Panel Report on
EC - Approval and Marketing of Biotech Products, para. 7.47.
1556 Appellate Body Report on US – Continued Zeroing, para. 168.

Provision of a brief summary of the legal basis of the complaint

7.1182 Article 6.2 of the DSU requires a complainant to provide a brief summary of the legal basis of
its complaint. In US – Oil Country Tubular Goods Sunset Reviews, the Appellate Body found that the
term 'legal basis' in Article 6.2 of the DSU refers to the claim made by the complaining party.1557
7.1183 The Appellate Body has also clarified that a clai m sets forth the complainant's view that "the
respondent party has violated, or nullified or impaired the benefits arising from, an identified
provision of a particular agreement,
 1558
7.1184 Although a complainant must provide a "summary" of the legal basis of its complaint, this
does not mean, however, that the complainant is requ ired, in its request for establishment, to set out
the arguments in support of a particular claim. We consider that there is a significant difference
between the claims identified in the request for the establishment of a panel, which establish the
panel's terms of reference under Ar ticle 7 of the DSU, and the arguments supporting those claims.
While a claim sets forth the complainant's view that the respondent party has violated, or nullified or
impaired the benefits arising from, an identified pr ovision of a particular agreement, arguments are
what is adduced by a complaining party to demonstrate that the responding party's measure does
indeed infringe upon the identified treaty provision.
 1559 The arguments in support of a claim may be
set out and progressively clarified in the first written submissions, the rebuttal submissions and the
first and second panel meetings with the parties.
1560 By contrast a party may not use its submissions
to "cure" a deficient panel request.1561
Sufficient to present the problem clearly
7.1185 The Appellate Body has explained that the requi rements in Article 6.2 to identify the specific
measures at issue and the provision of a brief su mmary of the legal basis of the complaint "are
intended to ensure that the complaining party 'present[s] the problem clearly' in its panel request."1562
7.1186 The "problem" is not solely the obligations in the covered agreements nor the respondent
Member's measures but rather wh ether the respondent Member's measures comport with those
obligations. Therefore, to sufficiently present the problem clearly, a complaining Member must
"plainly connect the challenged measure(s) with th e provision(s) of the covered agreements claimed
to have been infringed, so that the respondent part y is aware of the basis for the alleged nullification
or impairment of the complaining party's benefits." 1563 As the Appellate Body has explained, "[o]nly
by such connection between the measure(s) and the relevant provision(s) can a respondent "know
what case it has to answer, and ... begin preparing its defence".1564"1565
7.1187 This understanding is consistent with the essen tial purpose of the panel request which is to
give the parties and third parties sufficient informati on concerning the claims at issue in the dispute to

1557 Appellate Body Report on US – Oil Country Tubular Goods Sunset Reviews, para. 162.
1558 Appellate Body Report on Korea – Dairy, para. 139.
1559 Appellate Body Report on Korea – Dairy, para. 139.
1560 Appellate Body Report on EC – Bananas III, para. 141.
1561 Appellate Body Report on EC – Bananas III , para. 143; Appellate Body Report on
1562 Appellate Body Report on US – Continued Zeroing, para. 160.
1563 Appellate Body Report on US – Oil Country Tubular Goods Sunset Review, para. 162.
1564 (footnote original) Appellate Body Report on Thailand – H-Beams, para. 88.
1565 Appellate Body Report on US – Oil Country Tubular Goods Sunset Review , para. 162; see also
Appellate Body Report on Brazil – Desiccated Coconut, DSR 1997:I, p. 186.

allow them an opportunity to respond to the complainant's case
1566 which is concerned with the due
process rights of the respondent. 1567 It is worth recalling that due process protections are "inherent in
the WTO dispute settlement system" 1568 and are "fundamental to ensuring a fair and orderly conduct
of dispute settlement proceedings".1569
(ii) Codes of the CN other than 8443 31 91
Arguments of the parties
7.1188 The European Communities argues that it currently classifies all MFMs (as defined in the
joint Panel request) under CN2007 code 8443 31, which contains only one dutiable code, i.e. CN2007
code 8443 31 91. Therefore, the European Comm unities understands the complainants' claim to only
concern such eight-digit dutiable code. 1570 The European Communities asserts that because CN2007
code 8443 31 91 is the only code cited in the joint Panel request under the MFM claims, any claim
concerning tariff treatment under any other code than CN2007 code 8443 31 91 would be outside the
Panel's terms of reference.1571
7.1189 The European Communities contends that nothing in the joint Panel requ est suggests that the
reference to the CN2007 codes of subheading 8443 31 w as merely "illustrative" and that there might
be tariff treatment under any other codes which the complainants believe d was inconsistent with the
European Communities' tariff concessions. The Eu ropean Communities argues that a mere reference
to Council Regulation (EEC) No 2658/87 (i.e. the CN2007) is not, on its own, specific enough to meet
the requirements of Article 6.2 of the DSU, because the CN2007 covers thousands of different
headings and subheadings.1572
7.1190 The European Communities has pointed out that th e complainants have referred to the tariff
treatment provided by other codes to ADP MFMs or to other products which the European
Communities believes are not properly before the Panel.
7.1191 In particular, the European Communities point s to Chinese Taipei's statement that the
MFM-related claims also cover "ADP MFMs whic h perform a scanning and copy function but not a
facsimile function", which are classifiable under the 6 per cent ad valorem dutiable CN2007 code
8443 32 91.1573 The European Communities argues that su ch a claim is "manifestly outside the

1566 Appellate Body Report on Brazil – Desiccated Coconut, DSR 1997:I, p. 186.
1567 Panel Report on China – Publications and Audiovisual Products, para. 7.28.
1568 Appellate Body Report on Chile – Price Band System , para. 176. See also Appellate Body Report
on Mexico – Corn Syrup (Article 21.5 – US), para. 107.
1569 Appellate Body Report on Thailand – H-Beams, para. 88.
1570 The European Communities submits that Japan seems to confirm this understanding when it stated
that the only "cure" for the "WTO inconsistency of imposing duties on MFMs that should be duty-free under the
EC concessions" will be to "eliminate the duty under CN 8443 31 91 and to stop imposing duties" on these
devices. (European communities' second oral statement, para. 98, citing para. 35 of Japan's first written
submission).
1571 European Communities' second written submission, paras. 195-199 (commenting on the
complainants' responses to Panel question No. 37).
1572 European Communities' comments on the complainants' responses to Panel question No. 123.
More particularly, the European Co mmunities observes that some arguments of critical importance for the
complainants' claims are irrelevant in relation to the machines at i ssue because those machines have no printing
function. Examples include the complainants' arguments to the effect that the MFMs at issue are "printers" for
the purposes of Note 5(D) to HS1996 heading 84.71 or that printing is the principal function for the purposes of
Note 5(B) to HS1996 heading 84.71 or of Note 2 to HS1996 Section XVI. Ibid.
1573 Chinese Taipei's second written submission, para. 293.

Panel's terms of reference" because this specific CN2007 code was never expr essly mentioned in the
joint Panel request
1574 and this "new product" described by Chinese Taipei is not covered by the MFM
description used in footnote 15 of the joint Panel request.1575
7.1192 Additionally, the European Communities points to the United States' answer to question 137,
in which the United States argues
"[W]hile non-ADP MFMs whose essential charact er is that of a facsimile machine,
are included in the concession for 'facsim ile machines' under subheading 8517 21,
other non-ADP MFMs may not be 'facsimile machines' and therefore would fall
within the concession for goods of subheadi ng 8472 90. . . Moreover, as the United
States has noted, the only other appropriate subheading for non-ADP MFMs is
subheading 8472 90 — a subheading for which the EC has a bound duty of 2.2%.
Thus, all complainants are equally in agreement that the EC measures — which
subject non-ADP MFMs to a duty of 6 per cent — result in WTO-inconsistent duty
treatment for all non-ADP MFMs."
1576
7.1193 The European Communities objects to this asser tion and considers that it "amounts to an
entirely new claim, based on a different legal basis, which is not covered by th e terms of reference of
the Panel". In the European Communities' view, this "new claim" is outside the terms of reference
because "the Panel request makes no referen ce to the EC's concession for HS96 8472 90" and,
furthermore, "the Panel request makes it clear that the present dispute is concerned exclusively with
the duty-free concessions made by the European Comm unities pursuant to the ITA". In addition to
contending that this "new claim" is outside the terms of reference, the European Communities also
submits that, should the Panel conclude that, as conceded by the United States, some non-ADP MFMs
are not covered by the concession for HS1996 subhead ing 8517 21, but instead by the concession for
HS1996 subheading 8472 90, the Panel should refrain from examining the consistency of the tariff
treatment given to those non-ADP MFMs under EC Measures with the latter EC concession.1577
7.1194 Finally, the European Communities also objects to Chinese Taipei's reference, in response to
Panel question No. 127(b), that the European Comm unities may have breached the concession in its
Schedule covering products described in CN code 8472 90 90 by increasing the duties applicable to
"stand alone digital copiers" from 2.2% to 6 per cent. The European Communities recalls that the
joint Panel request makes no reference whatsoever to either "stand-alone digital copiers" or to the
European Communities' concession for HS1996 subhead ing 8472 90. Furthermore, that concession
was not even made pursuant to the ITA. Insofar as Chinese Taipei's assertion should be understood as
raising a "new claim", the European Communities requ ests the Panel to rule th at such claim is also
outside its terms of reference.
1578
7.1195 The complainants argue that the CN2007 en toto was listed as a measure at issue in the joint
Panel request and that the claims are not limited to certain CN codes which were explicitly referenced

1574 The European Communities further notes that the complainants had not even cited CN2007 code
8443 32 91 in their submissions "until the issue of the scope of that code was raised by the Panel's questions
after the first substantive meeting." (European Communities' comments on the complainants' responses to Panel
question No. 123).
1575 European Communities' comments on the complainants' responses to Panel question No. 123.
1576 United States' response to Panel question No. 137.
1577 European Communities' comments on the United States' response to Panel question No. 137.
1578 European Communities' comments on Chinese Taipei's response to Panel question No. 127(b) (also
commenting and/or citing Chinese Taipei's response to Panel question No. 44).

in the joint Panel request.
1579 In the complainants' view any tariff lines from the CN2007 that cover
the "products at issue" are within the Panel's terms of reference. In support of this view, Chinese
Taipei and Japan note that the description of MFMs contai ned in footnote 15 of the joint Panel
request is not limited to products of CN2007 code 8443 31 91, for this description is wide enough to
cover the machines matching the d escription of CN2007 code 8443 32 91. 1580 Chinese Taipei further
notes that, in fact, the products covered by CN 2007 code 8443 32 91 are descri bed in identical terms
as those described in CN2007 code 8443 31 91, na mely "[m]achines performing a copying function
by scanning the original and printing the copies by means of an electrostatic print engine" and they
are equally "capable of connecting to an auto matic data-processing machine or to a network". 1581
Japan agrees with Chinese Taipei, arguing that the discussion of the specific tariff lines within
CN2007 code 8443 in the joint Panel request was simply illustrative and does not limit the panel
request to only those tariff lines.1582
Consideration by the Panel
7.1196 The Panel understands the European Communities to be concerned that the complainants
may be seeking to have the Panel make findings on the WTO consistency of the tariff treatment of
MFMs under CN codes that were not specifically id entified as measures at is sue in the joint Panel
request. Additionally, the European Communities does not want the Panel to make findings on the
WTO consistency of the European Communities tari ff treatment of "stand alone digital copiers",
which were likewise not referred to by the compla inants' as a product that was the subject of their
claims in the joint Panel request. According to the European Communities, such claims are outside
the Panel's terms of reference. On the other hand, the complainants maintain that the CN as a whole
was identified as a specific measure at issue in th e joint Panel request, and that any specific codes
mentioned in the request were not meant to limit th e complainants' claims to those codes, but were
purely illustrative in nature.
7.1197 The arguments of the European Communities rai se the question of whether the complainants
may properly pursue claims that CN codes other th an 8443 31 91 are inconsistent with the European
Communities' obligations under the GATT 1994 or wh ether the European Communities is providing
inconsistent tariff treatment to prod ucts other than the MFMs described in the joint Panel request. In
essence, the European Communities is arguing that the complainants failed to comply with the
obligations in Article 6.2 of the DSU. We re call that the Appellate Body has explained that
determining the consistency of a pa nel request with the obligations in Article 6.2 must be done by
examining the panel request as a whole and in light of the attendant circumstances. Therefore, the
starting point for our analysis of whether these "claim s" are within our terms of reference is the joint
Panel request itself.
7.1198 We recall that the joint Panel request states th at Customs authorities of EC member States
impose duties on MFMs. The measures at issue through which they do so include:
 1. Commission Regulation (EC) No. 517/1999 of 9 March 1999;

1579 We note that the complainant's did not have an opportunity to respond the European Communities
specific allegations that they were ra ising new claims with respect to CN code 8472 90 or stand alone digital
copiers as the European Communities made these argume nts in its comments on the complainants' answers to
the Panel's question after the second substantive meeting, which was the last opportunity to make submissions to
the Panel.
1580 Chinese Taipei and Japan's responses to Panel question No. 123.
1581 Chinese Taipei's second written submission, para. 293; Chinese Taipei's second oral statement,
paras. 61-66; Chinese Taipei's response to Panel question No. 123.
1582 Japan's response to Panel question No. 123.

2. Report of the Conclusions of the 360th meeting of the Customs Code Committee,
Tariff and Statistical Nomenclature Section, TAXUD/555/2005-EN (March 2005);

 3. Commission Regulation (EC) No. 400/2006 of 8 March 2006; and

 4. Council Regulation (EEC) No. 2658/87 of 23 July 1987 on the tariff and statistical
nomenclature and on the Common Customs Tariff, including all annexes thereto, as
amended,
1583

as well as any amendments or extensions and any related or implementing measures.1584

7.1199 The joint Panel request then provides a narrative de scription of the measures and their effects.
In particular with respect to Council Regulation No. 2658/87, the complainants note:
"On 31 October 2006, the EC amended Counc il Regulation (EEC) No. 2658/87 of 23
July 1987 on the tariff and statistical nomenclature and on the Common Customs
Tariff, creating CN 8443 31 10 ("[m]achines pe rforming the functions of copying and
facsimile transmission, whether or not with a printing function, with a copying speed
not exceeding 12 monochrome pages per minute"), CN 8443 31 91 ("[o]ther;
[m]achines performing a copying function by scanning the original and printing the
copies by means of an electrostatic engine") and CN 8443 31 99 ("[o]ther"). By
virtue of these subcategories, MFMs with copying speeds of more than 12
monochrome pages per minute and with an electrostatic engine are classified under
CN 8443 31 91. The duty rate for CN 8443 31 91 is 6 per cent.
As a result, customs authorities of EC member States have been applying a 6 per cent
duty on imports of certain MFMs, instead of providing duty-free treatment as
required by the EC Schedules. The United States, Japan, and the Separate Customs
Territory of Taiwan, Penghu, Kinmen and Matsu consider that their commerce has
been accorded treatment less favourable than that pr ovided in the EC Schedules, and
that ordinary customs duties, or other duti es and charges, in excess of those set forth
in the EC Schedules have been applied to certain "input or output units" of "automatic
data-processing machines" and facsimile machin es, inconsistent with the obligations
of the EC and its member States under Articles II:1(a) and II:1(b) of the GATT 1994.
The measures at issue nullify or impair, within the meaning of GATT Article XXIII,
benefits accruing directly or indirectly to the United States, Japan, and the Separate
Customs Territory of Taiwan, Penghu, Kinmen and Matsu under the GATT 1994."
1585
7.1200 Footnote 15 to the joint Panel request defines MFMs as machines which perform two or more
of the functions of printing, copying, or facsimile transmission, capable of connecting to an automatic
data-processing machine or to a network (inc luding devices commercially known as MFPs

1583 ( footnote original) Including amendments adopted pursuant to Commission Regulation
No. 1214/2007 of 20 September 2007.
1584 (footnote original) Including the actual application by customs authorities of EC member States of
a 6 per cent duty on imports of certain MFMs.
1585 Joint Panel Request, WT/DS375/8, 376/8, 377/6, p. 6.

(multifunctional printers), other "i nput or output units" of "autom atic data-processing machines", and
facsimile machines).
1586
7.1201 The initial listing of the measures does refer to the entire CN, by referring to Council
Regulation No. 2658/87. However, we recall that th e conformity of a panel request with Article 6.2
of the DSU must be judged on the basis of the panel re quest as a whole. Therefore, we agree with the
panel in China – Publications and Audiovisual Products that we should look not only at the formal
names of the measures, but also at the complainants ' narrative description of the measures at issue in
the panel request.1587 In their description, the complainants refer to three CN codes (8443 31 10, 8443
31 91, and 8443 31 99), and note that it is by virtue of the subcategorization of the relevant
subheading into these three CN codes that MFMs with copying speeds of more than 12 monochrome
pages per minute and with an electrostatic engi ne are classified in CN code 8443 31 91. The
complainants assert that it is as a result of this classification that the customs authorities of EC
member States have been applying a 6 per cent duty on imports of certain MFMs rather than the duty-
free treatment the complainants believe is required.
7.1202 It is worth recalling here the important role the panel request plays in notifying the respondent
Member of the claims it has to answer and to enable it to prepare its defence. Due process
considerations, therefore, would caution against allowing measures and products into the Panel's
terms of reference that a respondent party had not received notice of.
7.1203 We are aware that prior panels have found that there is no obligation in Article 6.2 to identify
specific aspects of the specific measu res or to identify the particular products at issue if these could
reasonably be discerned from the Panel request.1588
7.1204 With respect to the joint Panel request in th is case, however, we find that, by specifically
listing the particular provisions of the CN under which the European Communities classifies MFMs,
by defining in footnote 15 the universe of MFM pr oducts about which they were concerned, and by
asserting that WTO-inconsistent, dutiable treatment arises as a "result" of the classification of the
defined MFMs into the particular provisions of the CN, the complainants informed the European
Communities that their complaints were limited to the products defined in footnote 15 and the
dutiable tariff treatment of such products resulting from the subcategorization of the CN into CN
codes 8443 31 10, 8443 31 91, and 8443 31 99. More over, we note that the complainants' narrative
does not contain qualifying language that would indicat e that the listing of the particular dutiable CN
codes was illustrative, merely a listing of examples, or non-exhaustive. 1589 This lack of qualification
is particularly important in the case of an inst rument like the CN, which contains thousands of
different headings and subheadings.1590
7.1205 We therefore conclude that, at least under the particular circumstances of the dispute before
us, the identification of the specific measure at i ssue in this dispute was not accomplished solely by
listing in the joint Panel request the Council Regulation which contained, as an Annex, the entire CN.

1586 Joint Panel Request, WT/DS375/8, 376/8, 377/6, fn. 15.
1587 Panel Report on China – Publications and Audiovisual Products, para. 7.47.
1588 Appellate Body Report on EC - Chicken Cuts, para. 165.
1589 We find support for our understanding in the Panel Report on China – Publications
and Audiovisual Products, paras. 7.93-7.104 where that panel found that particular requirements in legislation
which was listed as a measure at issue in the panel reque st were outside the panel's terms of reference because
they had not been discussed in the narrative description of the measures in the panel request.
1590 Panel Report on Japan – Film , para. 10.16 (That panel hesitated to say that a reference to a law
with a very broad scope that dealt with a broad range of issues would be sufficient to bring all measures taken by a
respondent under that law within the scope of the panel request).

Rather, via the narrative description in the joint Panel request, the complainants informed the
European Communities that they were only challeng ing the specific CN codes, which resulted in the
alleged less favourable and excessive tariff treatment, i.e., CN 8443 31 10, 84 43 31 91, 8443 31 99.
Additionally, via the definition provided in footnot e 15 the complainants also notified the European
Communities that their complaint was limited to th e tariff treatment being accorded to the products
described in such footnote. As a consequence, we find that any claims of inconsistency with Article II
of the GATT 1994 raised during these proceedings which are based on CN codes not expressly cited
in the joint Panel request or products other than the MFMs described in footnote 15 are outside the
terms of reference of this Panel.
2. The measures at issue and their effects
7.1206 In their joint Panel request, the complainants identified the following as the EC measures at
issue in this dispute with respect to their claims of less favourable tariff treatment and excessive duties
for imports of MFMs:
- Commission Regulation No. 517/1999
1591;

- Report of the Conclusions of the 360
th meeting of the Customs Code Committee (the
"2005 Statement")1592;

- Commission Regulation No. 400/2006
1593;

- Council Regulation No. 2658/87, as amended (the "CN2007")1594; and

- Any amendments or extensions and any related or implementing measures.

7.1207 We will discuss the substance of each of these measures and their effects, in turn, below.
(a) Commission Regulation No. 517/1999
7.1208 The preamble of Commission Regulation No. 517/ 1999 provides the following in its relevant
parts:
"Whereas in order to ensure uniform appli cation of the Combined Nomenclature (…)
it is necessary to adopt measures concerning the classification of the goods referred to
in the Annex to this Regulation;
(…)
Whereas (…) the goods described in column 1 of the table annexed to the present
Regulation must be classified under the appropr iate CN codes indicated in column 2,
by virtue of the reasons set out in column 3;"
7.1209 The Annex to Commission Regulation No. 517/1999 , cited in its preamble, deals with two
"multifunctional apparatus" and contains for each of them one column (1), where they are described, a

1591 Exhibits US-59; JPN-4; TPKM-35.
1592 Exhibits US-60; JPN-6; TPKM-32.
1593 Exhibits US-61; JPN-5; TPKM-36.
1594 Exhibits US-47; JPN-2; TPKM-34.

second column (2), where their respective classifi cation within the CN is indicated, and a third
column (3), where the reason for such classification is provided. It also cont ains two illustrations of
such products. The relevant part of this Annex is set out below:

(i) Arguments of the parties
7.1210 The complainants explain that via Commission Regulation No. 517/1999
1595 the European
Communities began to reclassify certain MFMs as "photocopiers" in dutiable CN code 9009 12 00.1596
In particular, the complainants refer to item 2 of the Annex to that regulation, which states that a
device capable of scanning, printi ng, faxing, and photocopying (indirect process) which has several
paper feed trays and is capable of reproducing up to 30 A4 pages per minute should be classifiable in
dutiable CN code 9009 12 00, which sets a 6 per cen t duty rate. The apparatus operates either in
autonomous form or in conjunction with an auto matic data-processing machine or in an automatic
data-processing network.1597
7.1211 Chinese Taipei and the United States note that the main criterion for such "reclassification"
is that the MFMs at issue have several functions , i.e., printing, scanning, copying and faxing, while
none of the functions are considered to gi ve to the apparatus its essential character. 1598 The European
Communities, pursuant to the regulation, therefore classified the product on the basis of GIR 3(c)
under the heading which comes last in numerical order, i.e., under CN subheading 9009 12 00.1599
7.1212 The complainants also noted that item 1 of the Annex of Commission Regulation No.
517/1999 relied upon Note 3 to Section XVI of the CN, inter alia, to conclude that a multifunctional
facsimile machine with a modem, scanner and prin ting device was classifiable in the duty-free CN
subheading of 8517 21 because the facsimile function was its principal function.1600
7.1213 As noted in paragraph 7.1152 the European Co mmunities contends that the only measure at
issue is the current version of the CN. 1601 The European Communities did not provide specific
argumentation on the effects of Commission Regulation No. 517/1999 .
(ii) Consideration by the Panel
7.1214 We note that the European Communities does not contest that the Annex to Commission
Regulation No. 517/1999 states that a device capable of scanning, printing, faxing, and photocopying
through (indirect process) which has several paper feed trays and is capable of reproducing up to 30
A4 pages per minute should be classifiable in dutiable CN code 9009 12 00 by virtue of the
application of GIR 3(c). Nor does the European Communities contest that the preamble of
Commission Regulation No. 517/1999 states that "the goods described in column 1 of the table
annexed to the present Regulation must be classified under the appropriate CN codes indicated in
column 2, by virtue of the reasons set out in column 3" (emphasis added).
7.1215 Therefore, the undisputed meaning of Commission Regulation No. 517/1999 is that: (1) a
multifunction facsimile machine as described in ite m 1 of the Annex must be classified under CN

1595 Exhibits US-59; JPN-4; TPKM-35.
1596 United States' first written submission, para. 77, Japan's first written submission, paras. 53-54 and
Chinese Taipei's first written submission, paras. 496- 497 (all referring to European Court of Justice (Rank
Xerox) (Exhibits US-58; TPKM-62)).
1597 United States' first written submission, para. 77; Japan's first written submission, para. 39; Chinese
Taipei's first written submission, paras. 487, 500.
1598 United States' first written submission, para. 77; Chinese Taipei's first written submission,
para. 486.
1599 Chinese Taipei's first written submission, para. 487.
1600 Japan's first written submission, para. 38, fn. 27; Chinese Taipei's first written submission,
para. 500.
1601 European Communities' first written submission, para. 342.

code 8517 21 00, which sets a duty rate of 0 per cen t; meanwhile (2) a MFM meeting the description
set forth in item 2 of the Annex must be classifi ed under CN code 9009 12 00, which sets a duty rate
of 6 per cent.
(b) The 2005 Statement
7.1216 From 26 to 28 January 2005, the European Co mmunities' Customs Code Committee held its
360
th meeting. According to the Report thereof, it was proposed during this meeting to make a
clarification regarding an indicator for distinguishing between fax-machines and digital copiers. All
EC member States agreed to have such a clarifica tion, which was reflected as attached in Annex VII
of the minutes of that meeting.1602
7.1217 The relevant parts of the 2005 Statement reads as follows:
"Items for conclusion
3.11 Multifunctional digital copiers (doc. TAXUD/2070/2001)*
Letter from EICTA was circulated.
The Chair made it clear that the issue is not to classify multifunctional devices. This
debate was closed. Regulation was issued in 1999 (Regulation 517/99) and
discussions in the HS committee 'closed.' One needs to appreciate the product as a
whole. Thus, the issue is to make a clarification and not a classification.
Nevertheless an indicator for distinguishing between fax-machines and digital copiers
could be the number of pages per minute.
All MS agreed to have the clarifica tion of the issue as reflected in the Committee
statement in annex VII.
(…)
TAXUD/555/2005-EN
 ANNEX VII
Statement on the classification of "multifunctional devices"

The Committee agreed that if a multifunctiona l device (fax, printer, scanner, copier)
has the capability of photocopying in black and white 12 or more pages per minute
(A4 format) this indicates that the product is classifiable in heading 9009 as a
photocopying apparatus."
1603

1602 See the United States' first written submission, para. 78 and fn. 121; Japan's first written
submission, paras. 42-43; Chinese Taipei's first written submission, para. 114.
1603 The 2005 Statement, pp. 7 and 11, respectively. Commission Regulation No. 517/99, cited in this
excerpt of the 2005 Statement, is Commission Regulation No. 517/1999 , one of the measures at issue described
above at paras. 7.1208-7.1209.

(i) Arguments of the parties
7.1218 The United States and Japan argue that, through the 2005 Statement, the European
Communities made explicit for the first time that output speed – pages per minute – would be the "key
criterion" for determining whether or not an MFM would be subject to duties –i.e., whether it would
be a facsimile machine under duty-free 8517 or a photocopier under dutiable 9009 - even though
copying speed had no basis in the langua ge of the various headings at issue.
1604 The complainants
submit that this page per minute criterion reclassifies MFMs with a fax function from duty-free
heading 8517 (covering "[f]acsimile machines" ) into dutiable CN code 9009 12 00 (covering
photocopying machines) and, as of HS2007, dutiable CN code 8443 31 91, both subject to a 6 per cent
customs duty.
1605 They thus argue that the application of this criterion results in the exclusion for
certain MFMs from duty-free treatment. According to the United States, it is a " per se" exclusion
from duty-free treatment.1606
7.1219 Other than contesting the legally binding nature of the 2005 Statement (see paragraph 7.1163
above), the European Communities did not provide specific argumentation on the effects of this
2005 Statement.
(ii) Consideration by the Panel
7.1220 The language of the 2005 Statement clarifies that the number of pages per minute (A4 format)
that a multifunctional (printer, scanner, copier, fax) device can "photocopy" in black and white can
serve as an indication to national customs authoriti es that the device is a photocopier and therefore
properly classifiable in the dutiable CN code 9009 12 00. The statement specifically sets 12 or more
pages per minute (A4 format) as the tipping point of indicating that the product is a photocopier.
7.1221 We recall that a Statement of the Customs Code Committee constitutes an important means of
ensuring the uniform application of the common cu stoms tariff by the authorities of the member
States and, as such, can be considered as a valid aid to the interpretation of the Common Customs
Tariff.
1607 The guidance the 2005 Statement provides to national customs authorities with respect to
the uniform application of the common customs tariff is to classify MFMs which can "photocopy" in
black and white 12 or more pages per minute (A4 format) as a photocopier under CN code 9009 12 00
which sets a 6 per cent duty rate.
(c) Commission Regulation No. 400/2006
7.1222 The preamble of Commission Regulation No. 400/ 2006 provides the following in its relevant
parts:
"Whereas:

1604 United States' first written submission, para. 78; Japan's first written submission, para. 57.
1605 United States' first written submission, paras. 78 and also 79 (referring to BTIs issued in 2006 that
would demonstrate that EC member States classified MFMs in dutiable CN code 9009 12 00 as photocopiers on
the basis of the page per minute criterion (Exhibit US-62 )); Japan's first written subm ission, para. 44 (referring
to BTIs that would demonstrate that before and after 2 007, EC member States classi fied MFMs in dutiable CN
code 9009 12 00 as photocopiers on the basis of the page per minute criterion (Exhibits JPN-7-8)); Chinese
Taipei's first written submission, para. 488.
1606 United States' first written submission, para. 148.
1607 Panel Report on EC - Selected Customs Matters , para. 2.40 (citing European Court of Justice
(Dittmeyer), para. 4).

(1) In order to ensure uniform application of the Combined Nomenclature … it is
necessary to adopt measures concerning the classification of the goods referred to
in the Annex to this Regulation.

(…)

(3) ... the goods described in column 1 of the table set out in the Annex to this
Regulation should be classified under the CN codes indicated in column 2, by
virtue of the reasons set out in column 3 of that table.

(…)

(5) The measures provided for in this Regula tion are in accordance with the opinion
of the Customs Code Committee."

7.1223 Article 1 of Commission Regulation No. 400/2006 states:
"Article 1
The goods described in column 1 of the tabl e set out in the Annex shall be classified
within the Combined Nomenclature under the CN codes indicated in column 2 of that
table."
7.1224 The Annex to Commission Regulation No. 400/2006, cited in its preamble and Article 1,
deals with four different products and contains fo r each of them one column (1), where they are
described, a second column (2), wher e their respective classification within the CN is indicated, and a
third column (3), where the reason for such classification is provided. The fourth product listed in this
Annex is a certain "multifunctional apparatus." The A nnex contains the following with respect to this
product:

(i) Arguments of the Parties
7.1225 The complainants also identify Commission Regulation No. 400/2006 as a measure at issue.
In 2006, they argue, the European Communities adopted Commission Regulation No. 400/2006 which
classifies multifunction printers, having scanning, laser printing, and laser copying (indirect process)
capabilities up to 40 A4 pages per minute under dutiable CN code 9009 12 as photocopiers.
1608
According to Japan, Commission Regulation No. 400/2006 r eaffirmed the European Communities'
page per minute approach, "largely dismissing the importance of digital connectivity in understanding
these products".1609 According to Chinese Taipei, Commission Regulation No. 400/2006 classifies
all MFMs without a fax function as photocopiers under CN code 9009 12 00 on the basis of GIR 3(c)
because "the apparatus has several functions none of which are considered to give the product its
essential character".1610
7.1226 As noted above, in paragraph 7.1152, the European Communities argues that this measure is
no longer effectively applicable. Therefore, the European Communities has not provided any
substantive discussion of the effects of the measure.
(ii) Consideration by the Panel
7.1227 We note that the European Communities does not contest that the Annex to Commission
Regulation No. 400/2006 states that a device capable of scanning, laser printing, laser copying
(indirect process) which has several paper feed tray s and is capable of reproducing up to 40 A4 pages
per minute should be classifiable in dutiable CN code 9009 12 00 by virtue of the application of GIR
3(c). Nor does the European Communities contest that Article 1 of Commission Regulation No.
400/2006 states that "the goods described in column 1 of the table set out in the Annex shall be
classified within the Combined No menclature under the CN codes indicated in column 2 of that
table." (emphasis added).
7.1228 Therefore, the undisputed meaning of Commission Regulation No. 400/2006 is that: (1) a
multifunctional machine as described in item 4 of the Annex shall be classified under subheading
9009 12 00, which sets a duty rate of 6 per cent.
(d) The CN2007 codes 8443 31 10; 8443 31 91 and 8443 31 99
7.1229 On 31 October 2006, the European Co mmunities enacted Commission Regulation
No. 1549/2006 amending the CN to reflect the subs tantive revisions of the HS agreed by the WCO
participants that resulted from the introduction of the HS2007. Among these changes in the HS, new
subheadings were created to include certain multif unctional machines, in particular "machines which
perform two or more of the functions of printing, copying or facsimile transmission, capable of
connecting to an automatic data-processing mach ine or network." In connection with the
implementation of these particular HS codes, the 2006 amendment of the CN, which entered into
force on 1 January 2007 (and became the "CN2007" ), contained the following relevant headings,
subheadings and codes and corres ponding product descriptions at th e four- and six-digit levels
(HS-based) and at the eight-digit level (CN-specific):

1608 United States' first written submission, para. 79 (Exhibit US-61); Japan's first written submission,
para. 41 (Exhibit JPN-5); Chinese Taipei's first written submission, para. 112 (Exhibit TPKM-36).
1609 Japan's first written submission, para. 58.
1610 Chinese Taipei's first written submission, paras. 489 and 508.

CN code Description Conventional
rate of duty (%)
Supplementary
unit
1 2 3 4
8443 Printing machinery used for printing by means of plates,
cylinders and other printing components of heading 8442; other
printers, copying machines and facsimile machines, whether or
not combined; parts and accessories thereof:

- Other printers, copying machines and facsimile machines,
whether or not combined

8443 31 - - Machines which perform two or more of the functions of
printing, copying or facsimile transmission, capable of
connecting to an automatic da ta-processing machine or to a
network:

8443 31 10 - - - Machines performing the functions of copying and facsimile
transmission, whether or not with a printing function, with a
copying speed not exceeding 12 monochrome pages per minute
Free

p/st
 - - - Other
8443 31 91 - - - - Machines performing a copying function by scanning the
original and printing the copies by means of an electrostatic print
engine
6 p/st
8443 31 99 - - - - Other

Free p/st
8443 32 - - Other, capable of connecti ng to an automatic data-processing
machine or to a network:

8443 32 10 - - - Printers Free p/st
8443 32 30 - - - Facsimile machines Free p/st
 - - - Other
8443 32 91 - - - - Machines performing a copying function by scanning the
original and printing the copies by means of an electrostatic print
engine
6 p/st
8443 32 93 - - - - Other machines performing a copying function
incorporating an optical system
Free p/st
8443 32 99 - - - - Other

2.2 -
8443 39 - - Other
8443 39 10 - - - Machines performing a copying function by scanning the
original and printing the copies by means of an electrostatic print
engine
6 p/st
 - - - Other copying machines
8443 39 31 - - - - Incorporating an optic system Free p/st
8443 39 39 - - - - Other 3 -
8443 39 90 - - - Other 2.2 -

(i) Arguments of the Parties
7.1230 The complainants argue that as a result of the eight-digit CN2007 codes 8443 31 10,
8443 31 91 and 8443 31 99, the products at issue are classified under the dutiable CN code
8443 31 91, which provides for the application of a 6 per cent ad valorem duty.

7.1231 While the complainants acknowledge that some MFMs, those with a copying and facsimile
function with a copying speed not exceeding 12 monochrome pages per minute, are given duty free
treatment, others are improperly subjected to the 6 per cent duty.
1611 Specifically, the complainants
argue that the CN2007 provides that MFMs with copying and computer printing functions, but
without a facsimile transmission function, are always subject to 6 per cent duty when using an
electrostatic print engine regardless of copy speed. The complainants also allege that, pursuant to the
new CN, MFMs with a facsimile function that have copying speeds of more than 12 monochrome
pages per minute and with an electrostatic print engine are also always subject to a 6 per cent duty.
 1612
7.1232 Chinese Taipei summarizes the tariff treatment provided to MFMs incorporating an
electrostatic print engine as follows;
(a) MFMs that perform a fax function are subject to 6 per cent customs duties if they are
able to copy more than 12 ppm;
(b) MFMs that perform a fax function are treated as duty-free if they are able to copy
12 or less ppm; and
(c) all MFMs that do not incorporate a fax function are subject to 6 per cent duty
irrespective of their copy speed.1613
7.1233 Chinese Taipei finds support for the complainants' understanding of the effect of the various
subcategories in CN heading 8443 in the cons olidated version of the CNEN to the CN2008 1614.
According to Chinese Taipei the CNEN 2008 clarifies that, in relation to CN2007 code 8443 31 91:
"the scanning process can be performed by a digital or optical system. An
electrostatic print engine operates in the sa me way as an electrostatic printer. The
machines of this CN subheading will perform a fax or printing function in addition to
the copying function. A machine that prints copies by inkjet or thermal print engines
will be classified under CN subheading 8443.31.99".
1615
7.1234 The European Communities does not seem to disagree with the complainants' view of the
tariff treatment that results from the application of the sub-categories in CN2007 subheading 8443 31.
The European Communities explains that all the mach ines that are connectable to an ADP system or

1611 Chinese Taipei's first written submission, para. 510.
1612 United States' first written submission, paras. 80, 81, 83 and 165 (submitting the following BTIs as
examples of the application of thes e CN2007 criteria to MFMs: IE-07NT-14-136-2 (15 November 2007); IE-
07NT-14-136-1 (Ireland, 15 November 2007); FR-E4-2007-002262-R (France, 31 January 2007);
GB116669062 (UK, 19July 2007); GB116669160 (UK, 19July 2007); GB116669258 (UK, 19 July 2007); and
IE-07NT-14-1684-02 (Ireland, 20 January 2009), (Exhib it US-62). See also the United States' second written
submission, paras. 7, 103, 105-107, 109; the United States' second opening statement, para. 36; the United
States' responses to Panel question Nos. 22 and 27; Japan's first written submission, para. 34.
1613 Chinese Taipei's first written submission, paras. 118, 120-121, 509-512.
1614 As noted above in Section VII.E.1(b), the panels terms of reference include the amendments to
Council Regulation No. 2658/87, including the CN2008 which is substantively the same as the CN2007. We
note that the CNEN 2008 provides some understanding as to how the CN2008 is implemented.
1615 Chinese Taipei's first written submission, pa ras. 514-515 citing CNEN 2008/C 133/01 (30
May 2008 (Exhibit TPKM-23).

to a network and that can perform two or more of the functions of copying, printing or facsimile
transmission are classifiable under one of these three eight-digit CN2007 codes.
1616
7.1235 Elaborating on the meaning of these three spec ific codes, the European Communities submits
that CN2007 code 8443 31 91, the only dutiable code among them, covers machines that: (i) perform
the function of copying and, in addition, the functions of printing and/or of faxing; (ii) are connectable
to an ADP machine or a network; (iii) use an electro static print engine; (iv) if they perform a faxing
function, their copying speed exceeds 12 ppm.1617
7.1236 The European Communities furt her claims that, on the other hand, CN2007 code 8443 31 91
does not cover MFMs: (i) that do not use an electrostatic print engine (including e.g. MFMs using an
"inkjet printer"); (ii) that use an electrostatic pr int engine, and with at least a copying and a faxing
function, but with a copying speed not exceeding 12 ppm,; and (iii) that use an electrostatic print
engine and with printing and fa xing functions, but without a copying function. Additionally, the
European Communities asserts that CN2007 code 84 43 31 91 does not cover single-function copying
machines, which may be covered by other eight-digit break outs in subheading 8443 31, depending on
whether they are connectable to an ADP machine or a network, the type of print engine and whether
they incorporate an optical system. Finally, th e European Communities submits that CN2007 code
8443 31 91 does not cover single-function facsimile transmission.
(ii) Consideration by the Panel
7.1237 The Panel recalls that the complainants' referen ced three CN2007 codes that are eight-digit
break outs of HS2007 subheading 8443 31, which sets forth the duty treatment for certain
multifunctional machines that perform "two or more of the functions of printing, copying or facsimile
transmission, capable of connecting to an ADP machine or to a network." 1618 Of the three codes,
8443 31 10, 8443 31 91 and 8443 31 99, the complainants have alleged that classifying certain MFMs
in 8443 31 91 results in the application of a 6 per cent ad valorem duty rate to products which they
argue are covered by the European Communities' dut y-free tariff concessions made in the context of
the ITA. Therefore, according to the complainants, the European Communities' is applying duties in a
manner inconsistent with its obligations in Articles II:1(a) and II:1(b). Our first task, then, is to

1616 European Communities' first written submission, para. 343; European Communities' response to
Panel question No. 126(a).
1617 The European Communities' response to Panel question No. 38, submitting, as examples of devices
captured by CN2007 code 8443 31 91, a brochure of the Xerox's model WorkCentre M20/M20i, an ADP MFM
with printing, copying, scanning and faxing functions and "output" speed of 22 ppm (Exhibit EC-63) and the
brochures of Panasonic's model DP-4510 and Ricoh's model MP 3500, both ADP MFMs with printing, copying,
scanning and faxing functions, and with copy/printing speeds of 45 ppm and 35/45 ppm, respectively (Exhibit
EC-82) The United States and Chinese Taipei agree with the European Communities' explanation of the
dutiable coverage of CN2007 code 8443 31 91 and also that the examples it submits would indeed be captured
by this CN code (the United States' and Chinese Taipei 's respective responses to Panel question No. 124). The
United States adds, however, that in this dispute it is "not challenging how the EC classifies the products in
question in its domestic nomenclature, but rather the duty treatment it accords to those products and whether the
duty treatment is consistent with that provided in the EC's Schedule of Concessions." (the United States'
response to Panel question No. 124).
1618 As to the use of the term "network" in the product description of CN2007 code 8443 31, we note
that the parties do not dispute that it also includes connection over the "phone line" as well as "wireless"
connection (see the complainants' responses to Panel que stion Nos. 25(a) and 25(b)). We understand this to
mean that CN2007 codes 8443 31 10, 8443 31 91 and 8443 31 99 capture non-ADP MFMs to the extent they
mean apparatus that do not connect to an ADP machine, but instead co nnect to a "phone line". We also
understand that the term "network", as used in CN2007 code 8443 31, is broader than "phone line" and could
also mean, e.g. "computer or digital network" so as to also capture ADP MFMs.

determine whether the CN2007, in particular code 8443 31 91, results in the application of a 6 per
cent ad valorem duty to the products in question.
7.1238 Based on the evidence and submissions before us, we see no disagreement among the parties
to this dispute that the following products are classified under code 8443 31 91 and are therefore
subject to a 6 per cent ad valorem tariff:
(a) ADP MFMs that have an electrostatic print engine and can print, copy and fax with a
copying speed exceeding 12 monochrome pages per minute ("ppm");
(b) ADP MFMs that have an electrostatic print engine and can print and copy, but do not
have a fax transmission function;
(c) non-ADP MFMs that have an electrostatic print engine and can copy and fax with a
copying speed exceeding 12 monochrome ppm.
7.1239 Additionally, we see no disagreement am ong the parties that, under the CN2007 the dutiable
CN2007 code 8443 31 91 does not
 apply to:
(a) ADP MFMs that have an electrostatic print engine but do not have a copying
function, which may instead be covered by the duty-free CN2007 code 8443 31 99;
(b) ADP MFMs that can print, copy and/or fax, but do not have an electrostatic print
engine (e.g. those with an "ink jet engine" or "thermal printer"), which may instead be
covered by the duty-free CN2007 code 8443 31 99; and
(c) ADP MFMs that have an electrostatic print engine and can print, copy and fax, with a
copying speed of 12 ppm or less, which may instead be covered by the duty-free
CN 2007 code 8443 31 10.
(d) non-ADP MFMs that have an electrostatic print engine and can copy and fax are
subject to 0 per cent customs duty if they have a copy speed of 12 ppm or less, which
may instead be covered by the duty-free CN 2007 code 8443 31 10.
(e) non-ADP MFMs that can copy and fax, but do not have an electrostatic print engine
(e.g. those with an "ink jet engine" or "thermal printer"), which may instead be
covered by the duty-free CN2007 code 8443 31 99.
7.1240 As noted in paragraph 7.1138 the complainants allege that the above-referenced measures
result in the improper application of a 6 per cent ad valorem duty to two subsets of multifunction
digital machines, ADP MFMs and non-ADP MFMs which are, according to the complainants,
covered by the duty-free concessions in the EC Schedule under headings 8471 and 8517, respectively.
As the concession for each of these sub-categories of multifunction digital machines is different, the
analysis of whether the European Communities is ac tually acting inconsistently with its obligations
will also, necessarily, be different. Therefore, we will address the complainants' claims of tariff
treatment that is excessive and less favourable than that in the EC Schedule separately for each
concession. First, we will examine whether the tariff treatment effectuated by the challenged
measures is inconsistent with the duty-free concession in heading 8471 of the EC Schedule, which the
complainants allege covers ADP MFMs. Secondl y, we will examine whet her the tariff treatment
effectuated by the challenged measures is incons istent with the duty-free concession in 8517, which
the complainants allege covers non-ADP MFMs.

3. Whether the European Communities' tariff trea tment of ADP MFMs is consistent with
its obligations under Article II of the GATT 1994
7.1241 The European Communities made duty-free conc essions on certain information technology
products as part of the its implementation of the IT A, which were incorporated in the EC Schedule
which is based on the HS1996 nomenclature. The comp laint with respect to the tariff treatment of
ADP MFMs relates to one such concession embodied in the EC Schedule at subheading 8471 60. The
complainants argue that by not affording duty-free treatment to products which are within the scope of
this tariff concession, the European Communities is acting inconsistently with its obligations under
Article II of the GATT 1994, which requires that Members not treat products coming from another
Member less favourably than in their schedules or to charge duties in excess of the bound rates set
forth in said Schedule.
7.1242 Therefore, as noted above, we begin our analys is of the complainants' claim by determining
the scope of the relevant concession, subheadin g 8471 60, and whether that scope includes the
products described by the complainants' as ADP MFMs . If the relevant products are covered within
the scope of the tariff concession, we will then examine whether the tariff treatment effectuated by the
application of the challenged measures results in the European Communities acting in breach of its
obligations in Article II of the GATT 1994.
(a) The ordinary meaning CN 8471 60 of the EC Schedule
7.1243 The complainants submit that ADP MFMs are covered by the duty-free concession in
subheading 8471 60 in the EC Schedule ("Automatic data-processing machines and units thereof";
- Input or output units, whether or not containing storage units in the same housing").
1619 Within the
terms of this concession, they indicate that the term s "input or output units" are key to the ordinary
meaning analysis under the Vienna Convention.1620
7.1244 Japan and Chinese Taipei further submit that ADP MFMs also fall more precisely under the
eight-digit concession in the EC Schedule in tariff item number 8471 60 40 ("- - Other;"
- - - Printers").1621 Furthermore, Chinese Taipei claims that these products, if not covered by tariff
item number 8471 60 40 as "printers," are at least covered by the residual eight-digit concession in
tariff item number 8471 60 90 ("- - Other;" - - - Other").1622

1619 The following third parties also take this view : Singapore (see Singapore's third party submission,
para. 81; Singapore's oral statement, para. 35); The Philippines (The Philippines' third party submission,
para. 50); Costa Rica (Costa Rica's third party submission, para. 28); Thailand (Thailand's oral statement, paras.
3-4).
1620 United States' first oral statement, para. 36; Japan's first written submission, paras. 79 and 181
(contending that ADP MFMS are, more specifically, "out put units"); Chinese Taipei's first written submission,
paras. 544-545. Japan also deals with the meaning of the terms "units thereof" in HS1996 heading 8471 in the
EC Schedule under its analysis of the ordinary meaning of the concession that cove r ADP MFMs (Japan's first
written submission, para. 79).
1621 See, e.g., Japan's first written submission, paras. 78-79; Japan's second written submission, para.
38; Chinese Taipei's first written submission, paras. 528, 546 and 553; Chinese Taipei's second written
submission, para. 332.
1622 Chinese Taipei's first written submission, paras. 528 and 557.

7.1245 The relevant concession, subheading 8471 60 in the EC Schedule
1623, is summarized below.
HS96 Description Base
rate
Bound
rate
Year of
full
impleme
ntation
Other
duties
and
charges
Legal
instrument
where the
concession is
reflected
8471 Automatic data-processing machines
and units thereof; magnetic or
optical readers, machines for
transcribing data onto data media in
coded form and machines for
processing such data, not elsewhere
specified or included:

 (…)
8471 60 - Input or output units, whether or
not containing storage units in the
same housing

8471 60 10 - - For use in civil aircraft 0.0 0.0 1997 0.0 WT/Let/156
 - - Other
8471 60 40 - - - Printers 2 0.0 1999 0.0 WT/Let/156
8471 60 50 - - - Keyboards 2 0.0 1999 0.0 WT/Let/156
8471 60 90 - - - Other 2 0.0 1999 0.0 WT/Let/156
 (…)
8471 90 00 - Other 2 0.0 1999 0.0 WT/Let/156

7.1246 We recall that the ITA provided for duty-free treatment of all products falling under HS1996
heading 8471 (i.e. including all its subheadings). We recall furt her that the European Communities
implemented this obligation by incorporating into its schedule all the relevant subheadings under
heading 8471, for which subheading 8471 60 is furthe r subdivided in four eight-digit level tariff item
numbers, which reflect the tariff treatment for products falling under subheading 8471 60. In order to
determine the ordinary meaning of subheading 8471 60 in the EC Schedule, pursuant to Article 31 of
the Vienna Convention, we will examine the text of the concession in its context and in light of its
object and purpose.
(i) The meaning of the text of subheading 8471 60
Arguments of the parties
7.1247 The complainants argue that the ordinary meaning of the language of the concession at both
the four digit and six digit level is dispositive a nd "focuses on whether a particular good can connect
to a computer or not – whether it is a "unit" of a computer – and whether that good can thus serve as
an "input or output unit" for a computer." 1624 Japan and Chinese Taipei al so argue that the ordinary
meaning of the term "printers" as used in ta riff item number 8471 60 40 is also relevant to
understanding the scope of the European Communities' duty-free concession and whether the products
at issue are covered by the concession.1625

1623 We note that the description in the heading 8471 and the subheading 8471 60 of the EC Schedule
are identical to those in HS1996 heading 8471 and subheading 8471 60 and that sometimes the parties refer to
the HS1996 and the EC Schedule interchangeably. Despite these references, we are always mindful that the
obligation being interpreted is that in the EC Schedule.
1624 United States' first written submission, paras. 110 and 94; Japan's first written submission, para. 78.
1625 United States' first written submission, para. 153 and Exhibits US-82-83; Japan's first written
submission, para. 78; Chinese Taipei's first written subm ission, at paras. 546-553. We note that the United

Input or output units
7.1248 The complainants first define the terms "input" and "output" in the "technological sense".
1626
In particular Japan notes that in computer science an "output unit" is defined as "a unit which delivers
information from the computer to an external devi ce or from internal storage to external storage." 1627
Japan also notes that an "input" is defined as "the information that is delivered to a data-processing
device from the external world, the process of delivering this data, or the equipment that performs this
process."1628
7.1249 The complainants also look at the use of the te rms "input" and "output" together in a single
phrase. In particular, the complainants note that an "input/output device" has been defined as "a unit
that accepts new data, sends it into the computer for processing, receives the results, and translates
them into a useable medium."1629
7.1250 The complainants find support for their interpre tation of the terms of the concession not only
from technical dictionaries, but from more general di ctionaries as well, which define "output" as "an
electrical signal delivered by or available from an electronic device" while defining "input" as the
converse, namely "an electrical signal entering an electronic device."1630
7.1251 The complainants argue that a "unit" should properly be understood as "an individual thing,
person, or group regarded as single and complete" or "a device with a specified function forming part
of a complex mechanism."1631 Relying on this broad understanding of the term unit, the complainants
argue that "units thereof" in the heading 8471, of which the concession at issue is a subheading,
covers "devices designed and engineered to be connect ed to and used in an integrated fashion with
computers."1632
7.1252 Chinese Taipei follows Japan's logic and concludes that the phrase "units thereof" in HS1996
heading 8471 indicates that the "units" referred to in the phrase "input or output units" in HS1996
subheading 8471 60 are those of "automatic da ta-processing machines." According to Chinese
Taipei, this means that under the EC Schedule "any" kind of ADP machine is covered by HS1996
heading 8471 and, as a consequence, merits duty-free treatment.1633

States does not argue that the products at issue fall more specifically within the 8 digit break-outs for "printers"
and "other" under the subheading of 8471 60.
1626 Japan's first written submission, para. 80 (arguing that it is appropriate to look at technical
dictionaries, even though it does not believe the terms have a "special meaning" under Article 31(4) of the
Vienna Convention, because the concessions at issue were made in pursuance of an agreement (the ITA) dealing
with technological products.)
1627 United States' first written submission, para. 153 and Exhibit US-82; Japan's first written
submission, para. 81 (citing McGraw Hill Dictionary, at p. 1419 (Exhibit JPN-11)).
1628 Japan's first written submission, para. 82 (citing McGraw Hill Dictionary, at p. 1021).
1629 Echibit US-101; Japan's first written submission, para. 83 (citing McGraw Hill Dictionary , at
p. 1021).
1630 Japan's first written submission, paras. 86-87 (citing Shorter Oxford Dictionary (1993), at pp. 2040,
1375 (Exhibit JPN-11)).
1631 Japan's first written submission, para. 86 (citing Shorter Oxford Dictionary (1993), at p. 3491).
1632 Japan's first written submission, para. 86.
1633 Chinese Taipei's first written submission, paras. 535 and 556. The United States, more generally,
argues that "the terms of the heading 84.71 ... provide strong contextual suppor t for the conclusion that
[ADP MFMs] are included within the scope of the EC's tariff concession for 'input or output units.'"
(United States' first written submission, para. 155).

7.1253 Japan claims that "input/output units" are also known as "peripheral devices," which are "any
device connected internally or externally to a comput er and used to enter or display data, such as the
keyboard, mouse, monitor, scanner, and printer."
1634 Japan cites the following definition of
"input/output instruction" to support its assertion that "input/output units" and "peripheral devices" are
synonymous:1635
"... [S]uch an instruction 'causes the transfer of data between peripheral devices and
main memory, and enables th e central processing unit [i.e ., in the computer] to
control the peripheral devices connected to it.'"1636
7.1254 The complainants submit that "input or output units" are terms that are very broadly defined
in the EC Schedule. 1637 They claim that the above definitions indicate that the ordinary meaning of
these terms focuses on the manner in which these "units " interact with an automatic data-processing
machine in the sense that they are able to accept new data, send it to into the computer for processing,
receive the results, and translate them into a u seable medium. Thus, according to the complainants,
the two key concepts underlying these specific terms ar e the ability to use digital data and computer
connectivity.1638
7.1255 The European Communities, rather than disputing the plain meaning of the terms in the text
of the concession, focuses its arguments instead on the contextual interpretation of CN subheading
8471 60.1639 In particular, the European Communities consid ers that the concession at issue should be
interpreted in light of the scope of another con cession under the EC Schedule, i.e. that of HS1996
subheading 9009 12 ("indirect process electrostatic photocopying apparatus").1640
7.1256 However, the European Communities does disag ree with Japan's claim that "input/output
devices" and "peripheral devices" are synonymous because the latter is broader than the former.
According to the European Communities, "input or output devices" are not necessarily "separate
units" since they can also be incorporat ed in the central processing unit (CPU). 1641 In the European
Communities' view, that "input/output devices" and "peripheral devices" are not synonymous, is

1634 Japan's first written submission, para. 83 (citing McGraw Hill Dictionary (2003) ). Japan explains
that in this dispute it has mostly relied on the 1994, fifth edition of McGraw Hill Dictionary because this is the
edition that was available both during the time in which the ITA was negotiated and the time when the HS was
revised to later become the HS1996. We note, however, that in a few instances, like in the case of "peripheral
devices," defined above, Japan has also relied on the 2003 edition of McGraw Hill Dictionary.
1635 We also note that the United States on some occas ions uses the terms "input or output units" and
"peripherals" as synonyms (see, e.g. United States' fi rst written submission, paras. 72, 145; second written
submission, para. 102).
1636 Japan's first written submission, para. 83, fn. 53 (citing McGraw Hill Dictionary (1994)).
1637 Japan also adds that these terms are in no wa y "limited by specific technologies." (Japan's second
written submission, para. 81; Japan's first oral statement, paras. 13 and 33).
1638 United States' first written submission, para. 153 (citing the McGraw Hill Dictionary ); United
States' second oral statement, para. 109; Japan's first written submission, paras. 77, 87-88 and 90; Japan's first
oral statement, para. 11 (but also further indicating that the predominant printing function of ADP MFMs
indicates that they fall under the ordinary meaning of "o utput units – printers"); Chinese Taipei's first written
submission, paras. 543-545, 585. Japan more explicitly claims that these concessions cover all MFMs "with a
digital connectivity", i.e. ADP MFMs. (Japan's first written submission, paras. 77, and 90; Japan's second
written submission, para. 39; Japan's response to Panel question No. 110).
1639 European Communities' second written submission, paras. 125-126.
1640 The Panel will address the European Communities' contention that duty-free treatment is not owed
because the products fall within the dutiable concession for HS1996 heading 9009 12 (see section VII.G.3(c)(ii)
below, starting at para. 7.1469) or 8472 90 (see section VII.G.3(c)(iii) below, starting at para. 7.1482).
1641 European Communities' response to Panel question No. 32.

further confirmed by the fact that in the EC Schedule, concessions other than that in HS1996
subheadings 8471 60 ("input or output units") incl ude products that could also be considered
"peripheral units" (e.g., the concession in tari ff item number 8471 80 10, which includes " --
Peripheral units").
1642
7.1257 The complainants respond that the European Communities has not explained why a key
phrase such as "output units", which ordinarily h as a broad meaning, should be read as narrowly as
proposed by the European Communities. They cons ider that, instead of engaging in the ordinary
meaning discussion of these terms under the Vienna Convention, the European Communities focuses
its defence exclusively on the meaning of certain terms related to the concessions it made for certain
"photocopiers", in particular those in HS1996 subheading 9009 12.1643
Printers
7.1258 As noted above, Japan and Chinese Taipei have argued that the eight digit break-out of
subheading 8471 60 (tariff item number 8471 60 40 – Ot her -- Printers) which covers "printers" also
covers the products at issue within its scope. 1644 Japan and Chinese Taipei have submitted various
definitions of "printers."
(a) "[A] computer output mechanism that prints characters one at the time or one line at
the time"
(b) [A device] that can "produce or reproduce (t ext, a picture, etc.) by mechanically
transferring characters or designs to paper, vellum, etc. esp[ecially] from inked types,
blocks, or plates" or "an output device which produces a printed record of data, text,
etc." 1645
(c) "[A]n output device which produces a pr inted record of data, text, etc." 1646 " b . a
device used for printing; especially a machine for printing from photographic
negatives; c. a device (as an ink-jet printer) that produces printout."
 1647
7.1259 Japan submits that the above definitions indicate that a "printer", from a technological sense,
means an automatic data-processing machine's "output unit" that produces a printed copy or copies of

1642 European Communities' response to Panel question No. 32.
1643 United States' first oral statement, paras. 9 and 36 ; United States' first closing statement, para. 4;
United States' second written submission, para. 108; United States' second oral statement, para. 38; Japan's first
oral statement, para. 13; Japan's second written submission, paras. 36-37 and 81-82; Chinese Taipei's second
written submission, para. 298.
1644 We are aware that the joint Panel request refers only to subheading 8471 60 as the concession at
issue in this dispute. However, we recall that Article 3(1)(a) of the HS Convention provides that the contracting
parties must follow the HS nomenclature down to the six- digit level and Article 3(3) allows contracting parties
the flexibility to establish eight-digit codes provided that any subdivision is added and coded at the level beyond
that of the six-digit numerical code[s] of the HS. In our view this means that any eight-digit CN code merely
sets forth an additional subdivision of what is covered by the six-digit subheading. Therefore, anything at the
eight-digit level must necessarily be incl uded within the scope of the subheadi ng at the six-digit level, in this
case 8471 60. Therefore, we see noth ing inappropriate with Japan and Chinese Taipei arguing that the products
at issue fall within a more specific subset of products covered by the concession raised in the joint Panel request.
1645 Exhibit JPN-11.
1646 Japan's first written submission, para. 89 (Exh ibit JPN-11); Chinese Taipei's first written
submission, para. 547, fn. 268.
1647 Chinese Taipei's first written submission, para. 548, fn. 269 (citing Merriam-Webster Dictionary
available at < http://www.merriam-webster.com/dictionary/printer > last viewed on 15 May 2010).

the "digital data" at issue. This "digital data " might come from the "computer" itself, from a"
scanner" that has created "digital data" from an or iginal document, or a "facsimile" that has received
digital data. In all instances, claims Japan, the "p rinter" will produce a paper version of that "digital
data" using digital technologies. Japan similarl y submits that, from an ordinary sense, the above
definitions indicate that a "printer" is a "computer output mechanism" that produces a paper version of
some data stored on or otherwise being used in connection with an automatic data-processing
system.
1648
7.1260 Additionally, Chinese Taipei argues that the definition of "printer" in no way requires the
information or data that are printed to come "e xclusively" from an "ADP machine". According to
Chinese Taipei, there are two requirements for an apparatus to be covered by the terms of the
duty-free concession under tariff item number 8471 60 40: (i) it must "be able to connect" to an
ADP machine and (ii) it must be "capable of producing printouts of data" received from an
ADP machine. Chinese Taipei further notes that the "maximum or minimum number of pages"
produced by an apparatus is not part of any of the above definitions of "printer".
1649
7.1261 The European Communities does not engage in a discussion of the definition of the term
"printer"; however, it does contend that a product (i .e., a MFM) that also performs other functions, in
addition to printing, which may be of equivalent or even higher importance, cannot be a mere
printer.1650
Consideration by the Panel
7.1262 The Panel notes that, in their arguments about the meaning and scope of the concession at
issue, the complainants have relied on various dict ionary definitions of the relevant terms of the
concession. The Panel also notes that the complainants have cited to technical dictionaries in addition
to more general dictionaries of the English language . Given the terms involved, we think this is
appropriate.1651
7.1263 Before we start our analysis of the specifi c terms used in the concession based on these
dictionary definitions, we recall the Appellate Body 's statement that, while dictionaries are a "useful
starting point" for the analysis of "ordinary mean ing" of a treaty term they "are not necessarily
dispositive".1652 We are also aware that understanding the plain meaning of the text is the beginning

1648 Japan's first written submission, paras. 84 and 89.
1649 Chinese Taipei's first written submission, paras. 549-550. Singapore supports Chinese Taipei's
view and similarly argues that "the definition of a 'printer' does not hinge upon the pages per minute that such a
machine can produce." (Singapore's third party submission, para. 100, fn. 92).
1650 European Communities' first written submission, para. 421.
1651 Other panels have also examined technical dictionaries when conducting an ordinary meaning
analysis pursuant to Article 31 of the Vienna Convention. See e.g., the Panel Report on Mexico – Telecoms ,
paras. 7.81-7.83 (using the Newton's Telecom Dictionary to interpret certain terms from Mexico's Services
Schedule); Panel Report on China – Auto Parts , paras. 7.660-7-661 (using the Dictionary of Automobile
Engineering, an automobile industry dictionary, to interpret China's Schedule); Panel Report on
EC - Approval and Marketing of Biotech Products , para. 7.372 (using the Glossary of Biotechnology for Food
and Agriculture, a biotech industry dictionary, to define the word "biodiversity"); See also the Appellate Body
Report on EC – Poultry , para. 92 (citing the Dictionary of Trade Policy Terms and the Dictionary of
International Trade).
1652 The Appellate Body Report on EC – Chicken Cuts, para. 175 (citing the Appellate Body Reports
on: US - Softwood Lumber IV , para. 59; US - Offset Act (Byrd Amendment) , para. 248; and US - Gambling,
para. 166). See also the Appellate Body Reports on: China - Publications and Audiovisual Products, para. 348;
and India - Additional Import Duties, para. 167, footnote 324.

of our inquiry and not the end. While we may or ganize our analysis of the ordinary meaning in
different sections, for convenien ce sake, we remain cognisant that we are conducting an holistic
analysis of the ordinary meaning and that the text of the terms cannot be divorced from their context
and their object and purpose.
 1653
7.1264 As noted above the main terms that have been raised by the complainants have been "input or
output units" and "printers." We will address each phrase in turn.
Input or output units
7.1265 The complainants provided a number of defin itions of "input" and "output" in isolation as
well as used together. All of these definitions support the understanding that "input" and "output"
refer to electrical signals, data, or information. An "input" is the electrical signal, data, or information
entering an electronic device, while an "output" is the electrical signal, data, or information leaving
the electronic device.
7.1266 The concession in subheading 8471 60 of heading 8471 does not cover the inputs or outputs
themselves, but "input or output units. A "unit", means inter alia "a device with a specified function
forming part of a complex mechanism." Such definitions indicate to us that the meaning of "input or
output units" cannot be dissociated from the question of what is the function or functions performed
by such units and what complex mechanism are they a part of. To that end, we recall that 8471 60 is a
subheading of 8471 which covers "automatic data-processing machines" and "units thereof".
Therefore, the "units" covered by subheading 84 71 60 are "units" of "a utomatic data-processing
machines".
7.1267 We note that all parties agree that computers qualify as "automatic data-processing machines"
as used in HS1996 heading 8471. We note furthe r that "units" of "an automatic data-processing
machine" are devices forming part and having at least one specified function in an ADP. Because the
"units" in question are "input" or "output" units of ADPs, it logically follows that the functions such
"units" are required to perform are the sending/ recei ving of electrical signals, information, or data
from an ADP.
7.1268 Therefore, we conclude that the plain meani ng of the term "input or output units" in the
concession, i.e., subheading 8471 60, are devices th at form part of an automatic data-processing
machine, such as computers, or an automatic da ta-processing system and that perform at least one
specified function involving sending/receiving signals, information or data from the automatic data-
processing machine.
7.1269 However, we cannot conclude our analysis with the plain meaning of the text. We must
examine whether reading the term in its context and in light of its object and purpose leads us to
change our preliminary understanding of the plain me aning of the term "input or output units" as used
in subheading 8471 60 in the EC Schedule.

1653 In this respect, we recall that the Appellate Body in EC – Chicken Cuts, noted that "Interpretation
pursuant to the customary rules codified in Article 31 of the Vienna Convention is ultimately an holistic exercise
that should not be mechanically subdivided into rigid components." (Appellate Body Report on
EC - Chicken Cuts, para. 176).

Printers
7.1270 As for printers, as noted above, the complainants have provided dictionary definitions which
define a "printer" as an output device or mechanis m which prints, on paper, data received from an
automatic data-processing machine. As "printers" , in the concession, are a subcategory of the
subheading covering "input or out put units" of computers, we see no reason to disagree with these
definitions.
7.1271 Therefore, the plain meaning of the text of tariff item number 8471 60 40 would cover within
its scope output devices which print data on pa per received from an automatic data-processing
machine. We note the European Communities argument that the ability to print information received
from an automatic data-processing machine is not di spositive of whether a particular product is a
"printer" or might be more properly classified accord ing to some other characteristic. However, we
believe this argument is better addressed in secti on VII.G.3(b) below, where we discuss whether the
products at issue in this dispute fit within the sc ope of the concession in subheading 8471 60, or even
more specifically within the eight-digit tariff item number 8471 60 40.
(ii) The terms "input or output units" and "printers" in their context
7.1272 The complainants argue that the plain meaning of the terms in subheading 8471 60 are
unambiguous.
1654 However, they also argue that examining the terms of the subheading in the context
of the rest of heading 8471, the interpretative t ools in the HS; such as th e notes to Chapter 84, and
other parts of the EC Schedule; will lead to the c onclusion that the scope of heading 8471 60 is broad
enough to cover "any" kind of ADP machine and, as a consequence, merit duty-free treatment for
those products.1655 In addition, Japan and Chinese Taipei argue that the HS1996 notes to Chapter 84
and Section XVI also support their interpretation of the term "printers" in tariff item number
8471 60 40 as including any device which can print output from an automatic data-processing
machine.
7.1273 The European Communities argues, contrary to the complainants, that Note 5(B) to Chapter
84 supports its interpretation that heading 8471 60 does not cover each and every conceivable kind of
MFM which may be connected to an automatic data-processing machine.
1656 The European
Communities also argues that the positions of the comp lainants with respect to the relevant context
are misplaced.1657
7.1274 The Panel will address each of the possible sources of context, in turn.
The terms of HS1996 heading 8471, other subheadings under it and its overall structure
Arguments of the parties
7.1275 The complainants argue that the duty-free concession in 8471 covers not only parts of the
heading, but the entire heading. They believe th is indicates that the duty-free treatment was intended

1654 Japan's first oral statement, paras. 2 and 64; Japan's second written submission, para. 80.
1655 Chinese Taipei's first written submission, paras. 535 and 556. The United States, more generally,
argues that "the terms of the heading 84.71 ... provide strong contextual suppor t for the conclusion that
[ADP MFMs] are included within the scope of the EC's tariff concession for 'input or output units.'"
(United States' first written submission, para. 155).
1656 United States' first written submission, para. 155; European Communities' first written submission,
paras. 410-422.
1657 European Communities' first written submission, paras. 423-426.

to be offered to all devices that are computer s or are used in conjunction with computers.
1658 This is
confirmed, argues Japan, by the use of the term "units th ereof" in the heading. Because the
subheading in 8471 60 clarifies that "units thereof" includes "input or output units", the complainants
believe that the concession broadly covers any devices that are used either to input information into an
automatic data-processing machine or to output information coming from an automatic data-
processing machine.1659 Finally, Japan also claims that the m eaning "units thereof" indicates that the
language of HS1996 heading 8471 is not limited by the technology used in the products falling under
it, which confirms that this heading "is broad enough to cover products using changed technology."1660
7.1276 The complainants also consider that the overall structure of HS1996 heading 8471, which
includes several subheadings, confirms the broad scope of the European Communities' concession.1661
The complainants consider that the terms of the other subheadings under HS1996 heading 8471, taken
together, provide strong contextual support for understanding that all types of computers and all types
of computer units – separately or in various combinations – fall within heading 8471.
1662
7.1277 In particular, Japan points out that subheadi ngs 8471 41, 8471 49, 8471 50 deal with products
which combine an automatic data-processing machine with some other computer related devices. The
text of these three headings is:
(a) 8471 41 ("- Other digital automatic data-pro cessing machines; - - comprising in the
same housing at least a central processing un it and an input and output unit, whether
or not combined")
(b) 8471 49 ("- Other digital automatic data-processi ng machines; - - Other, presented in
the form of systems")
(c) 8471 50 ("- Digital processing units other than those of subheadings No 8471 41 and
8471 49, whether or not containing in the same housing one or two of the following
types of unit: storage units, input units, output units")
1663
7.1278 The rest of the subheading deals with "units " of computers that do not themselves include
computers. This next set of subheadings includes the concession at issue, 8471 60, as well as 8471 70
and 8471 80, which cover storage units on a sta nd-alone basis and other units of computers,
respectively. In addition, the complainants not e that subheading 8471 90 captures other devices that
would otherwise be included in heading 8471, but that do not fall within any of the earlier
subheadings. Japan notes that even for this broad residual category the EC c oncession codified in its
schedule is a zero duty rate.1664

1658 United States' first written submission, para. 155; Japan's first written submission, para. 130.
1659 Japan's first written submission, para. 130.
1660 Japan's response to Panel question No. 13.
1661 United States' first written submission, para. 155; Japan's first written submission, para. 131;
Chinese Taipei's first written submission, paras. 322-330.
1662 United States' first written submission, para. 155; Japan's first written submission, paras. 132 and
140-141; Chinese Taipei's first written submission, paras. 322-330.
1663 Japan's first written submission, paras. 132-136.
1664 Japan's first written submission, paras. 72, 130-131 and 142-143; Japan's first oral statement, para.
21; Japan's response to Panel question No. 13; United States' first written submission, paras. 155-156; United
States' first opening statement, para. 35; United States' second written submission, para. 109; United States'
second opening statement, para. 38; Chinese Taipei's first written submission, paras. 589, 594 and 600;
Chinese Taipei's response to Panel question No. 13.

7.1279 The European Communities argues that the mere presence of an "others" subheading within
8471 cannot have the effect of expanding the cove rage of that heading beyond its own terms.
1665 In
the European Communities' view, because the presen t dispute concerns issues with respect to
concessions based on subheadings belonging to diffe rent HS1996 Chapters (Chapters 84 and 90), "in
resolving those issues no relevant contextual guida nce can be drawn from the mere fact that HS96
heading 8471 includes an 'Other' subheading."1666
7.1280 The European Communities also disputes that the concession in subheading 8471 60 must be
interpreted in a "broad fashion" simply because the entire heading 8471 was included in the ITA or
because the heading covers a wider range of product s than the alternative heading proposed by the
European Communities, 9009 12.1667 In particular the European Communities cautions against giving
too much weight to the inclusion of a heading in th e ITA in the interpretation of its terms. This is
because these headings also appear in the schedules of WTO Members who are not ITA participants,
and also because the object and purpose of security and predictability of tariff concessions cannot be
achieved if the same tariff concessions are consid ered "broader" for some simply because they are
also participants in the ITA. 1668
Consideration by the Panel
7.1281 We recall that the Appellate Body has confirme d that the HS may provide additional relevant
context to the interpretation of a given tariff concession. 1669 The parties all agree that the 1996
version of the HS, on which the concession in CN 8471 60 in the EC Schedule is based, is the relevant
document of the HS to provide context for the ordinary meaning of that concession. 1670 The Panel
finds, therefore, that the other parts of heading 8471 are relevant context for determining the scope of
the meaning of the terms used in the concession.
7.1282 In particular, the structure and wording of the heading seem to encompass all types of
computer units within its parameters. The structure has the logic of first looking at computers
themselves (8471 10 and 8471 30)1671 and then moving on to "units" of those computers in the various
ways they are presented – i.e., as part of an au tomatic data-processing machine, as systems, with
digital processing units, input or output units, stor age units on a stand-alone basis, and other. In
particular, we note the residual category of "other". We agree with the European Communities that
the inclusion of an "other" category in a headin g or subheading cannot lead to an interpretation
beyond its terms. However, the inclusion of an "o ther" subheading can indicate that the terms of the
remaining subheadings do not by themselves delineate the limits of the scope of the main heading.
7.1283 At the same time, our understanding of th e broad nature of the scope of 8471 is not informed
by the fact that the entire headi ng was included in the duty-free concession in the ITA. Contrary to

1665 European Communities' first written submission, para. 424.
1666 European Communities' response to Panel question No. 13.
1667 European Communities' first written submission, para. 424.
1668 European Communities' first written submission, para. 426.
1669 Appellate Body Reports on EC – Computer Equipment, para. 89; EC – Chicken Cuts, para. 199 and
China – Auto Parts, para. 151.
1670 The parties' responses to Panel question No. 132 (arguing that the HS1996 applied at the time of
the concession and that the HS2007 and the Explanatory Notes thereto are neither 'context' under Article 31(2)
of the Vienna Convention, nor an element 'to be taken into account together with the context', under Article
31(3) of the Vienna Convention).
1671 We do note that even within 8471 30 the term "unit" is used to describe the Central Processing Unit
("CPU") which is the main component of an automatic data-processing machine, therefore it seems that the term
"unit" can also refer to parts of an automatic data-processing machine.

the complainants' arguments, we do not believe this fact provides any guidance to the effect that terms
within that heading are to be interpreted broadly. It could be equally plausible that the entire heading
was included in the duty-free category because it w as narrowly construed and therefore, duty-free
treatment would be limited to a small set of products. That being said, however, our broad
understanding of the coverage of heading 8471 is based on the words in the heading itself in
conjunction with its structure. On the other hand, our analysis cannot end with an understanding that
8471 has a broad coverage; indeed the relevant c oncession under consideration is not 8471 generally,
but rather the specific subheading 8471 60 for input or output units.
7.1284 Although the context provided by the terms of 8471 and the subheadings within 8471 further
informs our earlier understanding of the plain meaning of the text of the terms in the concession, our
analysis must move on to examine the context provided by the HS rules relating to subheading 8471
60.
The HS1996: Note 5 to Chapter 84 and Note 3 to Section XVI

7.1285 The parties have discussed the contextual releva nce of the text of the HS1996 Chapter Note 5
to Chapter 84 to understanding the scope of the European Communities' concession of duty-free
treatment for "input or output units" in HS1996 subheading 8471 60. 1672 They have also discussed the
relevance and interplay between Chapter Note 5 and Note 3 to Section XVI of the HS1996 1673. The
complainants are of the view that the Chapter Notes, in particular 5(B) and 5(D), provide further
contextual support for the broad interpretation of the terms "input or output units" and "printers" in the
text of 8471 60. By contrast, the European Communities argues that Chapter Note 5(B) confirms, at
the very least, that products with a copying function that is not secondary or equivalent to the other
capabilities are classifiable under subheading 9009 12, and thus subject to duties.
Notes 5(B) and 5(C) to Chapter 84
7.1286 The complainants submit that Note 5 to HS1996 Chapter 84 is very relevant to an
interpretative analysis of the ordinary meaning of the concession at issue because it contains language
that "speak[s] directly to the mean ing of the terms" of the concession at issue, i.e. the meaning of
"units" in HS1996 heading 8471 and subheading 8471 60 of the EC Schedule. The complainants
argue that the language of Note 5 to HS1996 Chap ter 84, as a whole, confirms that subheading
8471 60 covers products, such as ADP MFMs, whose defining characteristics, are their ability to
connect to, and be used as an input or output unit of an automatic data-processing machine. 1674 The
fact that the language of Note 5 only speaks of the need to be "connectable", rather than "actually
connected", to an automatic data -processing machine also indicates that products which have some

1672 Australia and Singapore, third parties to this dispute, also make reference to this Chapter Note with
respect to MFMs. Australia only "notes " the existence of this Chapter Note, in particular Chapter Note 5(D),
but without explaining how exactly this rule applies to ADP MFMs (Australia's third party submission, para.
17). Singapore, on the other hand, ad dresses the meaning of Note 5(B) in more detail and claims that this rule
confirms that ADP MFMs fall in the concession und er HS1996 heading 84.71 (Singapore's third party
submission, paras. 84-85).
1673 Section XVI is the section containing Chapter 84 (and also Chapter 85).
1674 Japan's first written submission, paras. 74 and 146-147 (citing the Appellate Body report on
EC - Chicken Cuts, para. 224, fn. 224); Chinese Taipei clarifies that while for classification purposes there is no
hierarchy between sub-paragraphs (a), (b) and (c) of Chapter Note 5(B), for contextual purposes the "ability to
connect to a computer", as required by sub-paragraph (b) of the Note, is the most relevant element to this case
(Chinese Taipei's response to Panel question No. 36).

stand-alone features or capabilities still qualify as input or output units within the meaning of the
subheading.
1675
7.1287 The European Communities, on the other hand, argues that a proper reading of Note 5(B)
indicates that the mere fact that a machine is connectable to an automatic data-processing machine
does not make it classifiable under HS1996 subhead ing 8471 60. In particular, the European
Communities focuses on the wording in Note 5(B )(a) that sets as one of the conditions for
classification as being part of a "complete system" that the unit be "of a kind solely or principally used
in an automatic data-processing system." Based on this understanding of Note 5(B)(a), the European
Communities argues that it is erroneous to conc lude that the EC concession under HS1996 heading
8471 60 covers "each and every MFM that can connect to a computer."
1676 Indeed, the European
Communities argues that Note 5(B)(a) "makes it cl ear that a "unit" may not be classified under
HS1996 subheading 8471 60 unless it is used 'solely or principally' with an ADP system."1677
7.1288 Chinese Taipei, however, responds that the phrase "of a kind" in Note 5(B)(a) should be
interpreted as meaning "designed for" or "intended fo r", and defines the scope of the phrase "solely or
principally." Therefore, according to Chinese Taip ei, what counts is not the "actual use" of the
apparatus but its "physical characteristics".1678
7.1289 Finally, Japan notes that the European Court of Justice, in particular in the recent Kip ruling,
accepted the possibility that multifunctional machines could be of a kind used principally in an
automatic data-processing system and instructed th e European Communities to make classification
decisions about such machines on a case-by-case basis. 1679 In Japan's view, this ruling indicates that
the European Court of Justice recognized the key importance of the digital interface and computer
connectivity in assessing these products.1680
7.1290 Additionally, Japan argues that Note 5(C) exp licitly confirms that "units" of an automatic
data-processing machine – whether being imported with or without computers that can use the "unit"
in question – still belong in heading 8471.1681
Note 5(D) to Chapter 84 – "printers" and Note 3 to Section XVI
7.1291 Japan argues that this chapter note confirms that for any computer "printers" (i.e., devices
that can receive and print output of an auto matic data-processing machine), HS1996 heading 8471
must apply as long as the printers can "connect" to the computer (the rule of paragraph (B)(b)) and the

1675 United States' first written submission, para. 153.
1676 European Communities' first oral statement, paras. 55-59; European Communities' comments on
Japan and Chinese Taipei's responses to Panel question No. 127(b).
1677 European Communities' second oral statement, para. 121.
1678 Chinese Taipei's comments on the WCO responses to Panel questions, para. 14.
1679 Japan's first oral statement, paras. 23-27; Japa n's second written submission, paras. 111, 114-117
and 120. However, Japan first qualifies its reliance on this ruling stating that, while it is useful in a number of
respects in highlighting flaws in the European Communities' position, this ruling is merely the European
Communities' interpretation of the HS un der its domestic law within its juri sdiction and therefore does not bind
this Panel. Further, Japan strongly disagrees with Kip's "presumption" that "digital copiers" can be
"photocopying apparatus" under HS1996 heading 9009. (see Japan's first oral statement, para. 24; Japan's
second written submission, para. 113).
1680 Japan's first oral statement, paras. 23-27; Japan's second written submission, paras. 111, 114-117
and 120. See also, below at fn. 1780 to paragraph 7.1380, Chinese Taipei's quotation from the Kip ruling.
1681 Japan's first written submission, para. 150.

printers can "accept or deliver" the comput er data (the rule of paragraph (B)(c)).
1682 According to
Japan, Note 5(D) provides important interpretative guidance that the conditions in Note 5(B)(a) do not
apply and that all devices which are computer "print ers" belong in heading 8471 even if they have
other uses that might arguably be considered "principal".1683
7.1292 Japan and Chinese Taipei also argue that the meaning of "printer" is not limited to single
function printers. 1684 According to Japan when thinking about a multifunction device, it is entirely
proper to think of that device as being the mach ine that performs the principle function of the
device.1685 Japan therefore claims that a devi ce should be considered a "printer" when : (1) it can
function as a "printer" and (2) the facts and circumstances demonstrate the device is more a "printer"
than any other item. Inherent in the word "printer," claims Japan, is the notion that a device that is
"essentially a printer" does not automatically become something else because of some other functions.
The meaning of the word "printer" therefore does not have any such bright line as advocated by the
European Communities.1686 The complainants find support for their positions in the response of the
WCO Secretariat to questions from the Panel, whic h they argue clarifies that the reference to
"printers" in HS1996 Note 5(D) is not limited to "stand alone printers", and can include
"multifunctional machines".
7.1293 Japan and Chinese Taipei also find contextual support for the interpretation of the word
"printer" under Note 5(D) in Note 3 to Secti on XVI of the HS1996, which provides interpretative
guidance for headings in HS1996 Chapters 84 and 85. According to the complainants, Section Note 3
confirms that when the printing function is the principal function of a multifunction device that device
would still be classifiable as a "printer" under subheading 8471 60. 1687 Japan and Chinese Taipei find
support for this position in the WCO Secretariat's responses to the Panel's questions on this matter 1688,
which stated that
"[B]y application of Note 3 to Section XVI, HS1996 heading 8471 could also have
covered "certain multifunctional machin es" for which the connectible printing
function -- the function described Note 5 (D ) to Chapter 84 -- was determined to be
the machine's principal function, because Note 5 (D) to Chapter defined the scope of
HS1996 heading 8471.1689
7.1294 The European Communities argues that Note 5(D) should be interpreted strictly and any
machines not expressly described therein remain subject to the rule in Note 5(B)(a). The European
Communities claims that evidence of the narrow scope of Note 5(D) can be found in its "negotiating
history", which confirms that this Note was not meant to address multifunctional machines, such as

1682 Japan's first written submission, para. 151.
1683 Japan's first written submission, para. 152; Japan's first oral statement, para. 29; Japan's second
written submission, paras. 83 and 87.
1684 Chinese Taipei's second written submission, paras. 328-332.
1685 Japan's second written submission, para. 79; see also Chinese Taipei's second written submission,
paras. 328-332 (arguing that classification of a MFM as a printer could, for instance, result from a classification
on the basis of GIR 3(b), where the print module confers the essential character to the apparatus.).
1686 Japan's second written submission, paras. 79, 90 and 88.
1687 Japan's second written submission, paras. 90-93. See also Japan's second oral statement, paras. 44-
46.
1688 Japan's comments on the WCO responses to Panel questions, page 3; Chinese Taipei's comments
on the WCO responses to Panel questions, paras. 28-29.
1689 WCO responses to Panel questions, p. 14.

those at issue, but rather single-function printers, which may print indistinctly data received from an
automatic data-processing machine and from a different office machine, such as a word processor.
1690
7.1295 The European Communities also dismisses the re levance of Note 3 to Section XVI to the
interpretation of the concession at issue. The Eur opean Communities submits that the application of
Section Note 3 to Section XVI presupposes however that the product at issue is a multifunctional
machine which is prima facie classifiable under two or more headings, each covering a different
function. The European Communities therefore conte nds that, in the case at hand, before resorting to
Note 3 to Section XVI, it is necessary to consid er whether the product concerned is prima facie
classifiable under HS1996 heading 8471 pursuant to Note 5 to Chapter 84. The European
Communities also notes, however, that Note 3 to Section XVI only applies where a multifunctional
machine is prima facie cl assifiable under two or more headings of that same Section (which includes
Chapters 84 and 85). Thus, Section Note 3 cannot be applied in order to establish whether a
multifunctional machine is to be classified under HS1996 heading 8471 or under HS1996 heading
9009, since the latter is included in another Section (Section XVIII).
1691
7.1296 Chinese Taipei adds that if Note 3 to Section XVI would be inapplicable because HS1996
heading 9009 were also a possible classification option, classification should take place pursuant to
GIR 3. According to Chinese Taipei, the "multif unctional machine" would still be classified under
HS1996 heading 8471 pursuant to GIR 3(b) to the exte nt that the "essential character" of the device is
that of a "printer".
1692
7.1297 Japan responds that even if Note 3 to Section XVI might not be applicable to a classification
determination it still provides useful context as pa rt of the holistic application of the treaty
interpretation rules codified in the Vienna Conventio n. Regardless of the applicability of Note 3 to
Section XVI in a particular classification case, Japan and the United States both consider that it is
relevant for purposes of interpreting the text of th e concession in 8471 60, indeed, they argue that it
would make little sense to ignore Section Note 3 – which applies to Chapter 84 and Chapter 85 – as
context for understanding HS1996 heading 8471.1693
Consideration by the Panel
7.1298 The Panel notes at the outset that the discussion of the HS1996 Notes in this section of the
Reports is related to the contextual value the Note provides for interpreting the ordinary meaning of
the terms in subheading 8471 60 – i.e., "input or ou tput units" and "printers." Although we recognize
that the chapter note is used by customs author ities in making a classification determination about
whether particular products, such as the ADP MFMs described by the complainants in footnote 15 of
the joint Panel request, should be classified in a pa rticular heading or subheading, consistent with

1690 European Communities' first written submission, paras. 420-421; European Communities' second
written submission, para. 133; European Communities' second oral statement, paras. 136-137.
1691 European Communities' response to Panel question No. 20. The European Communities sees
confirmation to the inapplicability of Section Note 3 wh en the prima facie issue is between headings from a
Section other than Section XVI, based on the following reas ons: first, the text of Note 5 to Section XVI itself
limits the definition of "machine" to devices cited in Chapters 84 or 85. Second, the HSEN to Section Note 3
limits the definition of "composite machines" to thos e machines "described in different headings of
Section XVI." Third, whereas Note 3 to Section XVIII st ates that "the provisions of Note 4 to Section XVI
apply also to this Chapter", no similar provision has been made with respect to Note 3 to Section XVI.
(European Communities' response to Panel question No. 20). See also the European Communities' second oral
statement, para. 123.
1692 Chinese Taipei's comments on the WCO responses to Panel questions, paras. 28-29.
1693 United States' response to Panel question No. 20; Japan's second written submission, para. 96.

prior decisions of the Appellate Body we find that it can also provide context for the intended scope
of the heading itself.
1694 With that said, we begin our anal ysis of what context the chapter note
provides to an understanding of the concession in 8471 60.
7.1299 We observe that the relevant notes concerning HS1996 Chapter 84 that have been mentioned
are Note 5 and Subheading Note 1 (for 8471 49), which read as follows:1695
"Chapter 84
Nuclear reactors, boilers, machinery
and mechanical appliances; parts thereof
Notes.

5.(A) For the purposes of heading No. 84.71, the expression "automatic data-
processing machines" means :
(a) Digital machines, capable of (1) st oring the processing program or programs
and at least the data immediately neces sary for the execution of the program;
(2) being freely programmed in accordance with the requirements of the user;
(3) performing arithmetical computations specified by the user; and, ( 4)
executing, without human intervention, a processing program which requires
them to modify then-execution, by logical decision during the processing run;
(b) Analogue machines capable of si mulating mathematical models and
comprising at least: (1) analogue elements, control elements and
programming elements;
(c) Hybrid machines consisting of either a digital machine with analogue
elements or an analogue machine with digital elements.
(B) Automatic data-processing machines may be in the form of systems consisting of
a variable number of separate units. Subject to paragraph (E) below, a unit is to be
regarded as being a part of a complete system if it meets all of the following
conditions:
(a) It is of a kind solely or principally used in an automatic data-processing system;
(b) It is connectable to the central processing unit either directly or through one or more
other units; and
(c) It is able to accept or deliver data in a form (codes or signals) which can be used by
the system.
(C) Separately presented units of an auto matic data-processing machine are to be
classified in heading No. 8471.

1694 Appellate Body Reports on EC – Computer Equipment, para. 89; EC – Chicken Cuts, para. 199 and
China – Auto Parts, para. 151.
1695 Exhibits US-84, JPN-23; EC-15.

(D) Printers, keyboards, X-Y co-ordinate input devices and disk storage units which
satisfy the conditions of para graphs (B) (b) and (B) (c) a bove, are in all cases to be
classified as units of heading No. 8471.
(E) Machines performing a specific function other than data-processing and
incorporating or working in conjunction with an automatic data-processing machine
are to be classified in the headings appropriate to their respective functions or, failing
that, in residual headings.

Subheading Notes.
1.- For the purposes of subheading No. 8471. 49, the term "systems" means automatic
data-processing machines whose units satisfy th e conditions laid down in Note 5(B)
to Chapter 84 and which comprise at least a central processing unit, one input unit
(for example a keyboard or scanner), and one output unit (for example, a visual
display unit or a printer).
7.1300 We observe further that Notes 3 and 5 to Section XVI of the HS1996 read as follows:

Section XVI

MACHINERY AND MECHANICAL APPLIANCES;
ELECTRICAL EQUIPMENT; PARTS THEREOF;
SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE
AND SOUND RECORDERS AND REPRODUCERS, AND PARTS
AND ACCESSORIES OF SUCH ARTICLES

Notes.

3. Unless the context otherwise requires, composite machines consisting of two or
more machines fitted together to form a whole and other machines adapted for the
purpose of performing two or more complementary or alternative functions are to be
classified as if consisting only of that component or as being that machine which
performs the principal function.

5. For the purpose of these Notes, the expression "machines" means any machine,
machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter
84 or 85.
7.1301 We observe that Note 5 to HS1996 Chapter 84 is organized in a way similar to the heading
itself. Note 5(A) defines an automatic data-processing machine; Note 5(B) describes how a "unit" can
qualify as part of a "complete system"; Note 5(C) addresses units presented separately; Note 5(D) to
printers, keyboards and X-Y devices and disk storag e units; and Note 5(E) to machines incorporating

or working in conjunction with an automatic data-processing machine and performing a specific
function other than data-processing.
7.1302 With respect to the three criteri a in Note 5(B), we note that the main disagreement among the
parties is the relevance of the requirement in Note 5(B)(a) to a determination of the scope of the
coverage of the term "input or out put units" in subheading 8471 60. Namely, that to be regarded as
part of a complete system, the "unit" must be "of a kind solely or principally used in an automatic
data-processing system". The European Communities argues that Chapter Note 5(B) is directly
applicable to the question of what types of produc ts fit within the subheading 8471 60 and that a
product must be solely or principally used in an automatic data-processing system in order to fall
within the scope of the concession.
1696 The complainants respond that the term "of a kind" focuses
more on the design or intended use of the product and not the actual use with an automatic data-
processing system, which would require a case-by- case approach to a determination of whether a
particular multifunction digital machine satisfied all three criteria in Chapter Note 5(B).
7.1303 In response to a question posed by the Pane l on the meaning of the phrase "of a kind" in
Note 5(B)(a), the WCO Secretariat explains that the Nomenclature Committee considered the issue,
but declined to issue an Interpretative Rule defining the expression. Therefore, in the WCO
Secretariat's view, it would "seem reasonable to conclude that the Nomenclature Committee was, in
effect, leaving the interpretation of the expressions to each administration to apply, on a case-by-case
basis, in the context of classifying specific articles."
 1697
7.1304 It seems to the Panel, that the European Co mmunities' argument requires reading the term "of
a kind solely or principally used" as "solely or principally used", which would deprive the phrase "of a
kind" of any utility.1698 Therefore, we agree with Chinese Taipei's position, which seems to be the one
of the European Court of Justice in the Kip judgment, that the inclusion of the phrase "of a kind"
means that a determination pursuant to Chapter No te 5(B)(a) requires an examination of the design
and intended use of a product based on its objective physical characteristics., rather than a simple look
at the actual use. This does seem to inform the conc lusion, that with respect to units of a complete
system, the issue is not actual use with the com puter but whether the unit was designed or intended
solely or principally for use with the computer sy stem and also satisfies the criteria of Note 5(B)(b)
and (B)(c), i.e., is capable of connecting to the cen tral processing unit and able to accept or deliver
data in a form (codes or signals) which can be used by the system.
7.1305 We note that the chapeau to Note 5(B) tells us that the note provides guidance in determining
whether a unit can be regarded as being part of a complete system. 1699 Note 5(C) provides that

1696 European Communities' second oral statement, para. 121.
1697 WCO responses to Panel questions, pp. 5-6.
1698 European Communities' first written submission, para. 188; European Communities' first oral
statement, para. 57; European Communities' response to Panel question No. 46; European Communities' second
written submission, paras. 25 and 33; European Communities' second oral statement, paras. 121 and 131.
1699 The Panel notes that HS96 subheading 8471 60 does not refer to "systems" or "complete systems",
rather HS96 subheading 8471 49 is the only subheading of HS96 heading 8471 which refers to systems.
Although not raised by the parties in this dispute, this may raise a question whether Note 5(B) is applicable to all
"units" or only those units that are to be regarded as forming part of a complete system. We note that in
paragraph 7.626 above, based on the plain meaning of the terms, we considered that a unit of an ADP is a device
t h a t f o r m s " p a r t o f a n A D P o r a n ADP system" and that performs "at least one specified function involving
sending/receiving signals, informati on or data from the ADP or ADP sy stem." While the Panel does not
exclude an interpretation whereby "units" might nevertheless fall under Note 5(C), for example, the Panel does
not consider that it makes a substantive difference in the circumstances of this dispute, and it therefore does not
consider it necessary to rule on this matter.

separately presented units of an ADP machine "are to be classified in heading 8471." Additionally,
Note 5(D) provides that printers, keyboards, X- Y co-ordinate input devices and disk storage units
which satisfy the terms of Notes 5(B)(b) and (B)(c) ar e in all cases to be classified as units of heading
8471.
7.1306 We are of the view that these provisions of th e Chapter Note must be read holistically and
cannot be read in such a way that whether a par ticular device falls within heading 8471 would differ
depending on how it is presented at the border, i.e. , separately or as part of a complete system. We
also note that the requirement in Note 5(B)(a) that un its be "of a kind solely or principally used in an
automatic data processing system" resonates with what we have already found to be the plain meaning
of a "unit of an ADP machine".
1700 We also recall that an ADP sy stem is defined in the subheading
note as consisting of at least a CPU, one input unit, and one output unit. 1701 Therefore, regardless of
whether a unit is presented as part of a complete ADP system or separately it must be "of a kind solely
or principally used in an automatic data processing system".
7.1307 We also look to Note 5(D) which deals with printers, keyboards, X-Y co-ordinate input
devices and disk storage units which are in all cases to be classified as units of heading 8471 if they
satisfy the criteria in (B)(b) and (B)(c). As noted above, the features required under (B)(b) and (B)(c)
are the ability to connect to the central processing un it either directly or through one or more other
units and to accept or deliver data in a form which can be used by the system. We also note that
Subheading Note 1 (for 8471 49) lists a printer as an example of an output unit. The European
Communities seems to agree with th e Subheading Note 1 (for 8471 49) that "printers" are "input or
output units", as they created an eight-digit tariff item number underneath subheading 8471 60 for
"printers" in their Schedule. Given the relations hip between the eight-digit tariff item numbers and
the six-digit subheading under which they fall, it is reasonable to conclude that the ability to connect
to an automatic data-processing machine and to accept or deliver data in a form which can be used by
the ADP machine or system are important criteria for determining not only what is a "printer" under
CN 8471 60 40 in the EC Schedule, but also what "input or output" units are, generally.
7.1308 Japan and Chinese Taipei go on to contend that Note 5(D) clarifies that a printer which
satisfies the terms of Notes 5(B)(b) and (B)(c) fall s within the heading 8471 regardless of whether it
has other functions. The WCO Secretariat explains that , "the reference to "printers" in Note 5 (D) to
Chapter 84 covered all machines which "printed" bu t (A) neither (1) "copied" nor (2) "scanned" and
"transmitted a representation of the printed page", when (B) such machine "met the terms of Notes
5 (B) (b) and 5 (B) (c) to Chapter 84."
1702 Therefore, it would seem that application of Note 5(D) on
its own would not provide for the classificati on of multifunction machines in heading 8471.
However, the WCO Secretariat also informed the Panel that via the application of Note 3 to
Section XVI, which would classify composite machines adapted for the purpose of performing two or
more complementary or alternative functions as being that machine which performs the principal
function, a multifunction machine which had printing as its principal function might be classifiable in
heading 8471, pursuant to Chapter Note 5(D). 1703 We note that both the European Communities and

1700 See paragraph 7.626 above where we stated that, based on the plain meaning of the terms, units of
an ADP are devices that form part of an ADP or an ADP system and that perform at least one specified function
involving sending/receiving signals, information or data from the ADP or ADP system.
1701 Subheading Note 1 (for 8471 49) cited in Japan's first written submission, fn. 69. Subheading Note
1 clarifies that for the purposes of subheading 8471 49 the term "systems" means computers "whose units satisfy
the conditions laid down in Note 5(B) to chapter 84 an d which comprise at least a central processing unit, one
input unit (for example a keyboard or a scanner) and one output unit (for example a visual display unit or a
printer).
1702 WCO responses to Panel questions, p. 14.
1703 WCO responses to Panel questions, p. 14.

Chinese Taipei seem to accept that Note 3 to Section XVI would not be of use in a situation where the
product in question was also classifiable in a head ing outside Chapters 84 or 85, because Note 5 to
Section XVI limits the expression "machines" in the Notes to apparatus in the headings of those
Chapters.
1704 Nevertheless, in terms of giving contex t to the terms in HS1996 subheading 8471 60,
Note 3 further informs our understanding that in certain circumstances a multifunction machine could
fall within the scope of heading 8471 if its pr incipal function was one covered by the specific
subheadings.
7.1309 Finally, Note 5(E) to HS1996 Chapter 84 provides for classification of machines
incorporating or working in conjunction with an automatic data-processing machine and performing a
specific function other than data-processing. According to this note, these "are to be classified in the
headings appropriate to their respective functions or , failing that, in residual headings." Nothing in
Note 5(E) instructs on how to determine wh ether a product which performs data processing and a
specific function other than data processing may fall w ithin the scope of heading 8471. We also note
that pursuant to a reading of Note 5(E) in conjunc tion with Note 3 to Section XVI, and to the extent
the latter note is applicable, if a multifunctional pr oduct's principal function was determined to be
printing, scanning or some other form of data processing it might still fall within heading 8471.
7.1310 Our analysis of the Note 5 to HS1996 Chapter 84 and Note 3 to Section XVI has led us to
understand that ADP "units", in a variety of forms, are to be covered under HS1996 heading 8471.
This is true of units that are part of a comple te system, that are presented separately, that are
printers/keyboards/X-Y units or that are disk st orage units. This provides important context for
determining the scope of this concession. Subheadin g Note 1 (for 8471 49) also informs us that input
or output units include such machines as scanners and printers. We have also concluded that the term
"units" must be understood to be the same whethe r those units are part of a system or presented
separately.
7.1311 In sum, our review of Note 5 to Chapter 84 and Note 3 to Section XVI further informs our
understanding that input or output units of an AD P machine are devices that are of an "automatic
data-processing machine", part of an "automatic data-processing machine system", that are
connectable to the central processing unit either direc tly or through one or more other units and that
perform at least one specified function that involves accepting or delivering data in a form (codes or
signals) that can be used by the automatic da ta-processing machine or "automatic data-processing
machine system". Chapter Note 5(E) also inform our understanding that not all devices capable of
connecting to an ADP machine necessarily qualify as an input or output unit of heading 8471.
Other parts of the EC Schedule

Arguments of the parties
7.1312 Chinese Taipei first refers to the eight-digit tariff item numbers, which the European
Communities has established within 8471 60. In particular, Chinese Taipei notes that 8471 60
contains an eight-digit tariff item numbers 8471 60 90 ("- - Other; "- - - Other"). Chinese Taipei

1704 We note that the only argument the European Communities has made with respect to the possible
classification of MFMs outside Chapters 84 and 85 is with respect to their classification in subheading 9009 12.
The Panel has dealt with whether MFMs can be classified in subheading 9009 12 in paragraphs 7.1469 et seq.
below.

submits that the existence of the "other"
1705 subcategory indicates therefore that, under the
EC Schedule, all "input or output units" of computers that are not specifically covered by one of the
tariff item numbers under the HS1996 subheading 8471 60 (i.e., as "printers" or "keyboards") fall
under the "residual" tariff item number 8471 60 90. Chinese Taipei reasons that the existence of a
"residual subheading" in the EC Schedule is important as it tends to underline the "broad scope" of the
EC concession in HS1996 subheading 8471 60, under which it is included. Hence, concludes Chinese
Taipei, even if the ADP MFMs at issue were not to be regarded as "printers" under tariff item number
8471 60 40, they nonetheless fall within the scope of the concession contained in tariff item number
8471 60 90 ("Other").1706
7.1313 The European Communities focuses on another aspect of its schedule as context for
understanding its obligations under 8471 60, the s ubheading for photocopying apparatus in 9009 12.
As noted above, the European Communities has focused its defence against these claims by arguing
that the products in question act ually fall outside the scope of th e duty-free concession and thus the
European Communities has not acted inconsistently with its obligations under Article II of the GATT
1994. The European Communities maintains that the products at issue actually fall within the scope
of a dutiable concession in its schedule, HS1996 su bheading 9009 12. These arguments will be dealt
with in more detail in section VII.G.3(c) below. However, in response to the European Communities
arguments, the complainants submit that the heading HS1996 subheading 9009 12 actually provides
contextual support for their position that the products at issue fall within the broad scope of HS1996
subheading 8471 60.1707
7.1314 In particular, the United States argues that because subheading 9009 12 uses the term
"photocopying" it clearly does not cover MFMs, which perform a range of functions, including
scanning and printing, that are not performed by a photocopier. Additionally, the United States
argues that while an MFM may perform a copying function, the manner in which it does so sets it
apart from a photocopier. 1708 Chinese Taipei argues that the HS is struct ured logically with Chapter
84 including mechanical machines, Chapter 85 electrical machines and Chapter 90 optical
instruments. Chinese Taipei argues that there is a fundamental difference in the nature between the
products covered in Chapters 84 and 85 on the one ha nd on those covered by Chapter 90 on the other.
According to Chinese Taipei Chapte r 90 "exhaustively covers certain specific types of instruments
which are exhaustively and precisely defined as 'op tical, photographic, cinematographic, measuring,
checking, precision, medical or surgical instrume nts'" Chinese Taipei concludes then that digital
technology is excluded from Chapter 90 and therefor e apparatus that use it must also be excluded
from its scope.1709
7.1315 Japan finds relevance in the fact that, in its opinion, several head ings within the EC
Schedule, and not only subheading 9009 12 could c over "copying". Japan argues that 8471 covers
output units that can print out one or multiple c opies based on the outputting of digital data while
heading 8472 10 covers "other office machin es" which can make one or multiple copies of a
document using technologies that are neither digita l nor photocopying. Japan argues that because

1705 Chinese Taipei's first written submission, para. 554 (citing the Shorter Oxford Dictionary (1993)
defining "other" as "existing besides or distinct from that or those already specified or implied; further,
additional).
1706 Chinese Taipei's first written submission, pa ras. 555-557; Chinese Taipei's second written
submission, para. 333. Japan, more generally, refers to EC concession in CN code 8471 60 90 ("Other"),
together with the text of other subheadings, as part of its contextual arguments on the "structure" of HS1996
heading 84.71 (see Japan's first written submission, para. 142).
1707 United States' first written submission, para. 155.
1708 United States' first written submission, paras. 157-160.
1709 Chinese Taipei's first written submission, paras. 597-598.

three distinct headings can cover "copying" the deci ding factor of the scope of the coverage of these
headings must come from another factor besides the simple ability to make copies. In Japan's view,
the distinction comes from the underlying technology used.
1710 Japan then agrees with the other
complainants that because MFMs u se digital rather than optical technology they cannot be classified
in subheading 9009 12.1711
Consideration by the Panel
7.1316 We begin our analysis with the eight-digit tariff item number of 8471 60 90, which falls
under subheading 8471 60 in the EC Schedule. We note that subheading 8471 60 in the EC Schedule
seems to follow the same type of st ructural logic as the main heading. It begins generally with input
or output units and then specifies the coverage of pr inters, keyboards, and other. As with the main
heading, 8471 60 contains very generic language (i.e., "input or output units") and then has eight-digit
tariff item numbers which further subdivide the broa der category. One of these eight-digit codes is
"other", which as noted above can be a signal that the subheading under which it falls is not intended
to be narrowly construed.
7.1317 As noted above, the Panel will address in deta il below the European Communities' arguments
that the products at issue properly fall within the scope of the dutiable concession at HS1996
subheading 9009 12. Here, we address only the argum ent that the distinctions between digital and
photocopying technology in the EC Schedule must have some relevance for the interpretation of the
scope of coverage of subheading 8471 60. We do ta ke Japan's point that 8472 10 demonstrates that
not all forms of copying are covered exclusively under the subheading in 9009 12 for photocopying.
However, we do not find this lends much interp retative assistance to determining what types of
products the terms "input or output units" of automati c data-processing machines in the concession at
issue, 8471 60, cover and whether this includes products described as "digital copiers".
7.1318 Therefore, we find that an analysis of the other portions of the EC Schedule, outside the terms
of 8471 60 and its eight-digit tariff item numbers, do not provide much guidance in interpreting the
scope of the concession in 8471 60.
(iii) Object and purpose
Arguments of the parties
7.1319 The complainants note that a recognized object and purpose of the WTO Agreement and
GATT 1994 is providing security and predictability in the reciprocal and mutually advantageous
arrangements directed to the substantial reduction of tariffs and barriers to trade. 1712 T h e
complainants also note that both the WTO Agreement and the GATT 1994 recognize "expanding the
production and trade in goods" as another core object and purpose that is furthered by reciprocal
reductions in tariffs.
7.1320 Japan submits that the overarching object and purpose of the WTO Agreement and the GATT
1994 has been reinforced in the sp ecific context of the ITA. In particular, Japan cites to the

1710 Japan's first written submission, para. 124.
1711 Japan's first written submission, paras. 125-128.
1712 Japan's first written submission, para. 172 citing paragraph 3 of the Preamble to the Marrakesh
Agreement; Panel Report on China – Auto Parts, para. 7.460 and Appellate Body Report on EC – Chicken Cuts,
para. 243.

Ministerial Declaration on Trade in Information Technology Products which expressed the desire "to
achieve maximum freedom of world trade in information technology products."
1713
7.1321 Chinese Taipei argues that to promote such security and predictability, in the first place, the
interpretation of a concession is to be limited by th e terms used in that concession. Furthermore, the
complainants argue that the objec tives of security and predictability also require that concessions
cover products even if they did not exist in that fo rm at the time the concessions have been granted to
the extent that they comply with the wording of the concessions concerned. Japan posits that the
concession must cover all devices that fit squarely within its terms regardless of how their other
functionality may change or improve over time.1714 Chinese Taipei argues that it would run counter to
such objectives if the European Communities could exclude from the scope of its concessions some
apparatus just because they are more complete or more developed than when they initially existed. 1715
Japan also argues that allowing the European Communities to treat products falling within the
ordinary meaning of "output units" or more specific ally "printers" as being outside the scope of the
duty-free concession because of characteristics unrelated to the core meaning of an "output unit", such
as pages per minute, would undermine the security and predictability of the original concession.1716
7.1322 The European Communities reiterates the arguments it made with respect to the object and
purpose of the concessions for flat panel displays, which are described in paragraph 7.540 above.
Consideration by the Panel
7.1323 We recall that Article 31(1) of the Vienna Convention requires that a treaty must be
interpreted in light of that particular treaty's object and purpose. As we stated in paragraph 7.542
above, under Article II:7 of the GATT 1994 and Article II:2 of the WTO Agreement, the concessions
contained in the EC Schedule, including the Annex to the EC Schedule, are treaty terms of the GATT
1994 and the WTO Agreement.
7.1324 The Appellate Body in EC – Chicken Cuts , explained that the "starting point for ascertaining
'object and purpose' is the treaty itself, in its en tirety and not to place too much weight on the object
and purpose of a particular concession in a Member's schedule, because "one Member's unilateral
object and purpose for the conclusion of a tariff commitment cannot form the basis' for an
interpretation of that commitment, because interpre tation in the light of Articles 31 and 32 of the
Vienna Convention must focus on ascertaining the common intentions of the parties."
1717
7.1325 With respect to the relationship between th e object and purpose of the GATT 1994 generally
and a Member's tariff concession, we recall the Appellate Body's statement in
Argentina - Textiles and Apparel that:
"[A] basic object and purpose of the GATT 1994, as reflected in Article II, is to
preserve the value of tariff concessions negotiated by a Member with its trading
partners, and bound in that Member's Sc hedule. Once a tariff concession is agreed
and bound in a Member's Schedule, a re duction in its value by the imposition of

1713 Japan's first written submission, para. 173 citi ng Ministerial Declarati on, WT/MIN(96)/16 (13
December 1996), at Preamble, Page 1, Clause 4.
1714 Japan's first written submission, para. 177.
1715 Chinese Taipei's first written submission, paras. 627-630.
1716 Japan's first written submission, para. 179; Japan' s first oral statement, paras. 33-34; Japan's
response to Panel question No. 2; Japan's second written submission, paras. 4 and 12.
1717 Appellate Body Report on EC – Chicken Cuts, paras. 238-239.

duties in excess of the bound tariff rate would upset the balance of concessions
among Members."
1718
7.1326 Accordingly, the Panel considers that the object a nd purpose that is relevant to our analysis is
the object and purpose of the treaty that is the subject of this dispute, namely the WTO Agreement, of
which the GATT 1994 and the EC Schedule are an inte gral part. As noted above the security and
predictability of the reciprocal and mutually advant ageous arrangements directed to the substantial
reduction of tariffs and other barriers to trade is an object and purpose of the WTO Agreement ,
generally, as well as of the GATT 1994.1719
7.1327 On this basis, we consider that tariff concessions made by WTO Members should be
interpreted in such a way to further the obj ectives of preserving and upholding the "security and
predictability" of "the reciprocal and mutually adva ntageous arrangements directed to the substantial
reduction of tariffs and other trade barriers to trade". This incl udes consideration of the general
objective of the expansion of trade and the substan tial reduction of tariffs. However, a panel should
take care not to disturb the balance of reciprocal and mutually advantage ous concessions negotiated
by parties.1720
7.1328 In this case, the complainants have also argued that provisions of the ITA, a plurilateral
agreement that is separate from the WTO Agreement , are relevant in determining the object and
purpose of the WTO Agreement.1721 While the WTO Agreement represents a mutual agreement among
all WTO Members, the ITA constitutes a separate pl urilateral arrangement made among a subset of
WTO Members and states and customs territories accedi ng to the WTO. Due to the application of the
MFN principle and Article II of the GATT 1994, the dut y bindings and eliminations agreed to by the
ITA participants were also extended to all WTO Me mbers. However, that does not mean that the
objectives of the ITA participants of having partic ipants' tariff regimes "evolve" in a manner that
"enhances market access for information technology products"1722, or "achiev[ing] maximum freedom
of world trade in information technology products " and "encourag[ing] the continued technological
development of the information technology industry on a world-wide basis" 1723 – can be considered a
basis for determining the object and purpose of the WTO Agreement and the GATT 1994. The ITA
participants are a subset of the Membership as a whole and their intentions with respect to an
agreement amongst themselves, while relevant c ontext for understanding the concessions they have
made, are not appropriate for informing a de termination on the object and purpose of the WTO
Agreement and the GATT 1994.
7.1329 In summary, the relevant object and purpose with respect to this dispute is the general object
and purpose of the WTO Agreement and the GATT 1994 as a whole, which is to provide security and
predictability in the reciprocal and mutually adva ntageous concessions negotiated by parties for the
reduction of tariffs and other barriers to trade. By interpreting the terms of the concession in
subheading 8471 60 of the EC Schedule to provide du ty-free treatment for all input or output units of
automatic data-processing machines in light of this object and purpose, we see nothing that would
override or contradict our preliminary conclusion that the concession requires duty-free treatment for

1718 Appellate Body Report on Argentina – Textiles and Apparel , para. 47; Panel Report on
EC - Chicken Cuts, para. 7.319.
1719 Appellate Body Report on EC – Computer Equipment , para. 82; see also Panel Report on
EC - Chicken Cuts, para. 7.318.
1720 See also Panel Report on EC – Chicken Cuts, para. 7.320.
1721 Complainants' responses to Panel question No. 1; Japan's first written submission, paras. 173-176.
1722 Para.1 of the ITA.
1723 Preamble of the ITA.

devices that form part of an "automatic data-pro cessing machine" or an "automatic data-processing
machine system", and that perform at least one specified function that involves accepting or
delivering data in a form (codes or signals) that can be used by the automatic data-processing machine
or "automatic data-processing machine system."
(iv) Subsequent practice (Article 31(3)(b) of the Vienna Convention)
Arguments of the parties

7.1330 The European Communities argues that the customs classification practice of the Members,
including itself, the complainants, and the third partie s demonstrates that they have all considered that
machines with digital copying capability were at least not solely classifiable under subheading
8471 60, but were also prima facie classifiable in HS1996 heading 9009 12 for photocopiers.
According to the European Co mmunities, this shows a common understanding that multifunctional
products are not included in the concession for input or output units of ADP machines.
7.1331 The complainants dispute the European Communities inte rpretation of its own practice and
refer to various BTI decisions from national custom s authorities within the European Communities to
demonstrate that the European Communities has not c onsistently maintained that MFMs fit within the
scope of HS1996 subheading 9009 12. 1724 In addition, the complain ants argue that the evidence
adduced by the European Comm unities does not suggest that, at the time of the negotiations , the
European Communities believed or had a practice ac cording to which any device without a facsimile
function is a "photocopier," or according to which, based on "pages per minute" (much less 12 ppm),
one could deem all MFMs with a fax function as "photocopiers."1725
European Communities' Practice
7.1332 With respect to its own practice, the European Communities cites a 1995 classification
regulation1726, certain BTIs from national customs authorities 1727, the European Court of Justice
decision in Rank Xerox, and the challenged measures themselves as evidence of its consistent
practice. 1728
7.1333 The complainants however, submit that evidence before the Panel in fact shows that EC
customs authorities have issued decisions classi fying MFMs in HS1996 subheading 8471 60 during
and immediately following the ITA negotiations, in particular the United States and Chinese Taipei
cite several BTIs from national customs authorities all from 1996 and 1997. 1729

1724 See, e.g., United States' second written submission, para. 116 and fn. 256.
1725 United States' second oral statement, para. 43.
1726 This is Commission Regulation No. 1165/95, providing for the classification under CN code
9009 12 00 of an MFM with a digital copying function (Exhibit EC-70).
1727 Citing BTIs GB 61762, of 13 July 1994; GB 62735, of 15 August 1994; GB 79327, of 16 May
1996; and NL 199610225680135-0, of 30 October 19 96 (all submitted as Exhibit EC-79). (European
1728 European Communities' first written submission, paras. 385-389; European Communities' second
written submission, paras. 431-433 and 190 (commenting on the complainants' responses to Panel question
No. 35(b)).
1729 United States' second written submission, para . 116 (citing Exhibit US -106, containing three
decisions issued by EC customs authorities - two issued in early 1996 and one in mid-1997 - classifying MFMs
in HS subheading 8471 60); Chinese Taipei's first written submission, para. 632 (arguing that CN code
8471 60 40 was applied by BTI UK 119109 and UK 119108 to MFMs defined as "colour printer/copier and

7.1334 The European Communities seeks to rebut the BTIs cited by the complainants by noting that
two of them are related to ink jet ADP MFMs, which are not subject to this dispute.
 1730 The European
Communities clarifies however that "it cannot be excluded that imports of ADP MFMs may
occasionally have been classified by some local cust oms offices under a different heading prior to the
conclusion of the ITA." In fact, the European Communities argues, given the difficulties involved in
determining the distinctions between the scopes of HS1996 subheadings 8471 60 and 9009 12, "the
existence of some initial divergences between di fferent local customs offices would be hardly
surprising, despite the early guidance provided by Regulation 1165/95."
1731
Complainants' Practice
7.1335 The European Communities submits that at the time of the conclusion of the ITA, none of
the complainants or the third parties was of the view that all ADP MFMs with a digital copying
function had to be classified necessarily under the HS1996 heading 8471 and that this is evidenced by
their own classification practice.1732
7.1336 With respect to the United States, the Eur opean Communities conced es that US customs
authorities issued a headquarters ruling in 1996 holding that the MFMs at issue had to be classified as
"printers" under HS subheadi ng 8471 60 pursuant to GIR 3(b) , because the printing components
conferred their "essential character" to the product. 1733 However, the European Communities contends
that since the issuance of the 1996 headquarter ru ling, the US customs authorities considered that
ADP MFMs were prima facie classifiable under HS headings 9009, as "photocopiers", HS heading
8517, as "fax machines", and HS heading 8471, as "printers". The European Communities also
contends that the classification of "stand-alone dig ital copiers" in subheadin g 9009 12 demonstrates
that the United States believed that "digital copying" was a form of "photocopying." According to the
European Communities it wasn't until 2002 that US customs authorities modified, once again, their
interpretation and came to the conclusion that "digital copying" was not a form of "photocopying" and
that MFMs with a digital copying function were excluded from the scope of the HS1996 heading
9009.
1734

scanner". Similarly, BTI FR 82152 also classified a "machine combin ant une imprimante et un copier
informatique (scanner)" under CN code 8471 60 40) (Exhibit TPKM-79).
1730 European Communities' second written submission, paras. 431-433.
1731 European Communities' second written submission, para. 433.
1732 European Communities' second written submission, paras. 121-123 and para. 190 (commenting on
the complainants' responses to Panel question No. 35(b )); European Communities' second oral statement,
para. 139.
1733 Ruling HQ 958348, of 17 January 1996 (submitted as Exhibit EC-73).
1734 The European Communities' first written submission, paras. 390-396 (citing the following US
customs rulings to support the EC claim that at least until 1994 the United States classified MFMs under HS
subheading 9009 12: (i) NY 892321, of 8 December 1993; and (ii) NY 897540, of 9 May 1994 (Exhibit EC -
72). Citing the following US customs rulings to support the EC claim that as from 1996 the United States
classified MFMs with a digital copying function under HS subheading 8471 60 pursuant to GIR 3(b) and that
the application this GI R presupposes necessarily that the US customs remained of the view that the MFMs at
issue were prima facie classifiable under HS subheading 9009 12: (i) NY A88887, of 31 October 1996; (ii) NY
B87181, of 2 July 1997; (iii) NY B89972, of 2 October 1997; (iv) NY C81666, of 19 November 1997; (v) NY
C83939, of 5 February 1998; (vi) NY D80267, of 20 July 1998; (vii) NY D80821, of 7 August 1998; (viii) NY
D85157, of 24 November 1998; (ix) NY D85921, of 18 December 1998; (x) NY D87961, of 25 February 1999;
(xi) NY D88682; of 3 March 1999; (xii) NY D88835, of 10 March 1999; (xiii) NY E80009, of 1 April 1999;
(xiv) NY E80011, of 5 Apr il 1999; and (xv) NY F80927, of 27 December 1999 (Exhibit EC - 74). Citing US
customs ruling NY B87634, of 23 July 1997 to support its claim that the US customs authorities classified under
HS heading 9009 certain components for a digital copier (submitted as Exhibit EC - 75). And also citing the

7.1337 The complainants, particularly the United States, argue that the European Communities is
mistaken in its interpretation of the facts and that there is no evidence of any "practice" that would
support the European Communities' arguments.
1735 The United States explains that in virtually all the
US customs rulings from the individual ports no mention is made of HS heading 9009. 1736 These
rulings, instead, classify MFMs in HS subheading 8471 60. In fact, the European Communities points
to nothing more than two opinions predating the IT A negotiations, while ignoring the large number of
opinions before the Panel in which the US Custom s and Border Protection (CBP) treated MFMs as
"input or output units" of HS subheading 8471 60.
1737
7.1338 With respect to Japan, the European Communities does not rely on classification decisions
as Japan asserted that it did not ha ve information with respect to its classification of "digital copiers"
and ADP MFMs with a copying function prior to the introduction of the HS2007. 1738 The European
Communities instead relies on a proposal Japan made to the ITA Committee in 1997 with a view to
including HS1996 subheading 9009 12 within the scope of the ITA, so as to cover "digital copiers".
The European Communities argues that this suggests that, at that time, Japan took the view that digital
copiers fell within that subheading.1739
7.1339 The United States notes that the European Communities has not cited subsequent practice,
but rather the absence of Japanese classification practice. Both the United States and Japan dispute
the relevance of Japan's proposal during the ITA II negotiations. First, Japan responds that its
informal proposal to the CITA for the ITA II nego tiation in 1997 was not a reflection of Japan's own
view on the classification of MFMs, but rather to address the European Communities' imposition of
duties on MFMs. Thus, it is not at all suggestive of any inference regarding the customs practice on
MFMs at that time. 1740 Additionally, the United States recalls that in those negotiations it was
recognized that a number of products proposed for inclusion in that future agreement may have
already been covered by the original ITA. T hus a negotiating proposal says little about what was
covered by the concessions at issue in this dis pute, and certainly does not indicate a "common,
concordant, and consistent" practice even on the part of Japan, the Member putting forward the
proposal.1741

following US customs HQ rulings to support the EC claim that only as from 2002 the United States started to
expressly exclude MFMs with a digital copying function from the scope of the HS1996 heading 9009: (i) HQ
963680, of 30 August 2002; (ii) HQ 965697, of 30 August 2002; and (iii) HQ 965527, of 30 August 2002
(submitted as Exhibit EC - 69)). See also the European Communities' second written submission, paras. 122-
123 and para. 190 (commenting on the complainants' responses to Panel question No. 35(b)).
1735 United States' second oral statement, paras. 39-40; Japan's second written submission, paras. 29-32;
Chinese Taipei's second written submission, para. 323.
1736 We note that in response to the European Communities' question 1 to the complainants, the United
States explained that the ruling with respect to "stand-alone digital copiers" cited by the European Communities
was issued by the individual port director and did not reflect the view of US customs as a whole and was
subsequently corrected by headquarters into a classification under heading 8472.
1737 United States' second written submission, para. 116; United States' second opening oral statement,
para. 42 (citing Exhibits EC-73 and EC-74, containing 16 rulings issued by CBP between 1996 and 1999, which
the United States contends demonstrates that it classi fies MFMs in HS subheading 8471 60); Japan's second
1738 Japan's response to European Communities' question No. 1 after the first Panel meeting.
1739 European Communities' second written submission, paras. 122-123 and 190 (commenting on the
complainants' responses to Panel question No. 35(b)).
1740 Japan's second oral statement, para. 34.
1741 United States' second opening oral statement, para. 43.

7.1340 The European Communities submits that Chinese Taipei has classified all "digital copiers"
as "photocopying apparatus" under HS1996 heading 9009 from the time prior to the conclusion of the
ITA until the introduction of the HS2007, includi ng ADP MFMs with a copying function under
HS1996 heading 9009 where, on the basis of a "case-by -case examination", it was determined that no
function was more "important" than the copying f unction. The European Communities notes that this
is a very similar approach to that postulated by the European Communities itself and one that cannot,
therefore, be reconciled with Chinese Taipei's position in this dispute.
1742
7.1341 Chinese Taipei responds that, by citing Member's pr actice, the European Communities is
once again trying to reframe this dispute as one over tariff classification rather than tariff treatment.
The relevant question is not how Chinese Taipei clas sified a certain product but what tariff treatment
did it accord to the product concerned. For instance, Chinese Taipei may well have classified "digital
copiers" under HS heading 9009 in view of th e WCO discussions on what constituted an "optical
system" or even by applying the residual classifica tion rule contained in GIR 3(c). However, this does
not mean that Chinese Taipei considered that "dig ital copying" was equivalent to "photocopying". It
merely indicated that Chinese Taipei had to decide on a uniform classification for such products and
that it would be in compliance with its WTO obliga tions as long as it granted a zero tariff to such
products. Since HS heading 9009 is subject to a zero tariff in its WTO Schedule, Chinese Taipei
considered that a classification of "digital copiers" in this head ing was in compliance with its WTO
obligations.1743 Additionally, the United States argues that the classification Chinese Taipei was
referring to in its response to the question from the European Communities was that of "single-
function digital copiers" and that a "case-by-case" approach to classification cannot support the
conclusion that there exists a "practice" with respect to the classification of MFMs. 1744
Third Parties' Practice
7.1342 Finally, with respect to the third parties, the European Communities submits that, among the
third parties to this dispute, Singapore has expressl y confirmed that it classified all "digital copiers"
under HS1996 heading 9009 both before and after th e conclusion of the ITA and that none of the
other third parties, despite being specifically ask ed by the European Communities, have provided
evidence that they did not classify digital copier s under HS1996 heading 9009 or that they classified
all ADP MFMs with a copying function under HS1996 heading 8471. The European Communities
therefore invites the Panel to draw appropriate inferences from these third parties' deliberate
silence.1745
7.1343 The United States notes that the European Communities is attempting to rely on the absence
of classification practice by the third parties, which cannot support the conclusion that there exists a
"common, concordant, and consiste nt" practice on the part of other WTO Members that would give
support to the European Communities' interpretation of the concessions. As with Chinese Taipei, the
United States notes that Singapore's response to th e European Communities question related to the
classification of " single-function digital copiers", devices that are not MFMs, the product at issue in
this dispute. The United States further notes that , with respect to MFMs, Singapore states that it

1742 European Communities' second written submission, paras. 122-124 and 190 (commenting on the
complainants' responses to Panel question No. 35(b)).
1743 Chinese Taipei's response to European Communities' question No. 1 to the complainants; Chinese
Taipei's second oral statement, para. 60.
1744 United States' second opening oral statement, para. 41. The Panel understands that the United
States' reference here to a "EC measure" means the CN2007 , one of the measures at issue in this dispute with
respect to MFMs.
1745 European Communities' second written submission, paras. 122-123 and 190 (commenting on the
complainants' responses to Panel question No. 35(b)).

classified devices based on the "physical com ponent which imparted the device its essential
character." Thus these answers do not support the c onclusion that there exists a "practice" with
respect to classification of MFMs.
1746
Consideration by the Panel
7.1344 As noted above, pursuant to Article 31(3)(b) of the Vienna Convention the panel will take
into account, together with context any subsequent practice in the application of the treaty which
establishes the agreement of the parties regarding its interpretation.
7.1345 We recall that "'subsequent practice' in th e application of a treaty "constitutes objective
evidence of the understanding of the parties as to the meaning of the treaty." 1747 We recall that for
something to qualify as "subsequent practice" within the meaning of Article 31(3)(b) of the Vienna
Convention it must be "...'concor dant, common and consistent' seque nce of acts or pronouncements
which is sufficient to establish a discernible pattern implying the agreement of the parties [to a treaty]
regarding its interpretation".1748 We are also mindful, particularly in light of the evidence adduced by
the parties, that "[i]nconsistent classification prac tice . . . cannot be relevant in interpreting the
meaning of a tariff concession".1749
7.1346 As to what may qualify as "common" and "concor dant" practice, the Appellate Body stated
that, although not each and every party must have e ngaged in a particular practice for it to qualify as a
"common" and "concordant" practice, it would be difficult to establish a "concordant, common and
discernible pattern" on the basis of acts or pronouncements of one, or very few parties to a multilateral
treaty, such as the WTO Agreement.1750 The Appellate Body further found that if only some of WTO
Members have actually engaged in a certain practice, that circumstance may reduce the availability of
such "acts and pronouncements" for purposes of dete rmining the existence of "subsequent practice"
within the meaning of Article 31(3)(b) of the Vienna Convention.
7.1347 Accordingly, on the basis of guidance provided by the Appellate Body on the assessment of
subsequent practice for interpreting a treaty provisi on, the Panel must determine whether the evidence
of practice in the European Communities, the Unit ed States, Japan, Chinese Taipei and the third
parties constitutes evidence of "consistent, common and concordant" classification practice on the part
of the Members with respect to the products at i ssue during the period between the submission of the
EC Schedule until the present.
7.1348 We are not convinced that any of the evidence adduced can demonstrate a "consistent,
common, and concordant" practice. Indeed, the BT Is submitted by the complainants demonstrate that
even within the European Communities, national customs authorities did not necessarily follow the
Commission's view on the classification of multifunction digital machines with a copying function.
Likewise, in the United States, while customs headqua rters may have had a cons istent view, it seems
that at least one port director issued contrary cl assification rulings. We have no evidence of Japan's
classification practice and we do not accept that a negotiation proposal in the ITA II for all the

1746 United States' second opening oral statement, paras. 41 and 43. The Panel understands that the
United States' reference here to a "EC measure" means the CN2007, one of the measures at issue in this dispute
with respect to MFMs.
1747 Appellate Body Report on Chicken Cuts , para. 255, citing Yearbook of the International Law
Commission (1966), Vol. II, page 219, para. (6); see also Panel Report on China – Auto Parts, para. 7.702.
1748 Appellate Body Report on Japan – Alcoholic Beverages II , para. 106; Appellate Body Report on
US – Gambling, para. 192.
1749 Appellate Body Report on EC – Computer Equipment, para. 95.
1750 Appellate Body Report on EC – Chicken Cuts, para. 259.

participants to provide duty-free treatment for pr oducts in subheading 9009 12 can serve as evidence
of such practice.
7.1349 We do not believe the evidence of Chinese Taip ei's classification practice, which is the
practice of only one Member, can add to our understanding of what the Members intended when
providing a concession for "input or output units" of computers in subheading 8471 60. We recognize
that, because WTO tariff concessions are normally synonymous with the tariff headings in the HS, the
classification practice of the Members may be releva nt in determining their common intentions with
respect to a particular concession. However, the relevance of classification practice diminishes when
the concession on tariff treatment for both headings is the same, as is the case in Chinese Taipei's
schedule for subheadings 8471 60 and 9009 12 , i.e., zero.
7.1350 With respect to the third parties' classifi cation practice, we note the following. While
Singapore's classification practice of "digital copiers" in HS1996 heading 9009 may be relevant for
understanding the common intentions of the Members with respect to the scope of that heading, we do
not believe it assists us in answering the questi on of what the Members meant by using the term
"input or output units" of an ADP machine in subhe ading 8471 60, because it relates to a device that
cannot connect to an ADP machine. Additionally, we have no evidence of the practice of the other
third parties. We see no need to make an "appropr iate inference" from this lack of evidence as there
are a variety of reasons why the third parties may not have responded to the European Communities'
question with regard to their practice of classifyi ng stand-alone digital copi ers which would have no
bearing on the common intention of the Members in inscribing a concession for "input or output
units" in their schedules.
7.1351 Finally, we note that whatever evidence of practice we do have is from a limited group of
Members. We are aware that the European Co mmunities, the United States and Japan were the
driving forces behind the negotiation of the origin al ITA agreement. However, as the European
Communities rightly pointed out, the concessions contained in these headings and subheadings are not
limited to the participants of the ITA. They exist in most Members' schedules and many Members
have been faced with the issue of determini ng whether the scope of the concession in HS1996
subheading 8471 60 covers a particular product that is presented at their border. Given the ubiquity of
the products at issue we can only surmise that this has occurred more often and in more Members than
the limited information presented to this Panel. A dditionally, we note that the classification practices
presented to us are by no means "consistent, co mmon and concordant", and we cannot discern a
pattern implying the agreement of the parties to the WTO Agreement and the GATT 1994 regarding
the interpretation of the concession in 8471 60 from these documents.
7.1352 Based on the foregoing, we do not think that th e evidence adduced by the complainants or the
European Communities satisfies the co nditions for being considered s ubsequent practice. Therefore
we do not need to consider whether such "practice" informs our conclusions above made based on our
interpretation of the ordinary meaning of the terms of subheading 8471 60 in its context and in light of
its object and purpose.
(v) Other Arguments
Arguments of the Parties

7.1353 Japan and Chinese Taipei argue that the new heading 8443 and its explanatory note as well
as the redrafted Chapter Note 5( D) to Chapter 84 in the HS2007 provide further interpretative

guidance to determine the meaning of the concessi ons for "units thereof" in heading 8471 and
"photocopying" in heading 9009, as those words were used in 1996.
1751
7.1354 In particular Japan and Chinese Taipei argue that heading 8443 in HS2007 confirms their
understanding that the concession in HS1996 subhead ing 8471 for "input or output units" included
multifunction machines, even if they had a copying function. According to Japan, the fact that the
language of these new codes refer to devices that can perform multiple functions and also make
explicit that they need to be "capable of c onnecting" to an automatic data-processing machine,
confirms that the defining feature of ADP MFMs is their ability to be connected to an automatic data-
processing machine or to a network.
1752
7.1355 Additionally, Japan and Chinese Taipei argue th at the explanatory note to heading 8443 in
HS2007, provides further interpretative guidance to understand the meaning and scope of concessions
made in the EC Schedule based on the HS 1996 headings 8471 and 9009 because the 2007 HSEN
draws a clear and explicit distinction between "digital copiers" and "photocopiers," discussing each of
them in separate categories unde r the broader category "copying machines," which according to
Japan and Chinese Taipei strongly suggests that this distinction already existed under the 1996 HSEN
to heading 9009 and that such distinction was simp ly continued over into the 2007 HSEN to heading
8443, in more explicit terms.1753
7.1356 Finally, with respect to the HS2007 Chapter No te 5(D) to Chapter 84, Chinese Taipei argues
that by finding it necessary to expressly exclude MF Ms from the scope of heading, the new language
of this Chapter Note gives further support to Ch inese Taipei's argument that, under the HS1996-based
EC concessions, ADP MFMs properly fell under heading 8471.1754
7.1357 Initially, the European Communities argues that subsequent ve rsions of the HS are not
relevant to the interpretation of the concessions at issue in this di spute which were made on the basis
of the HS1996.1755 The European Communities also notes th at the language of the new heading 8443
and HSEN to heading 8443 was a result of a "pra gmatic" and "hard fought" compromise reached at
the WCO that involved "concessions on both sides" and that therefore resulted in this language being
"studiously ambiguous" with regard to the issues at hand. 1756 The European Communities further
submits that, in any case, it does not believe that the HS2007 material cited by the complainants has
the meaning they argue.
7.1358 In particular, the European Communities argues that from the mere fact that the new HS2007
subheadings 8443 31, 8443 32 and 8443 39 distingui sh between "connectable" and "non-connectable"
MFMs it does not follow logically that all connectable MFMs were previously classified under

1751 Japan's first written submission, paras. 166 and 171; Chinese Taipei's first written submission,
paras. 642-647; Chinese Taipei's response to Panel question No. 35(b); United States' response to Panel question
Nos. 132 and 135. The United States notes that the HS2007 materials support its interpretation of "digital
copying" and "photocopying", however it also notes that it has not relied on the 2007 HSEN to heading 8443 in
its arguments in this dispute.
1752 Japan's first written submission, para. 167; Chinese Taipei's first written submission, paras.
643-644.
1753 Japan's first written submission, paras. 168-171; Japan's second written submission, paras. 71-73;
Japan's response to Panel question No. 135; Japan's comments on the European Communities' response to Panel
question No. 134; Chinese Taipei's first written submission, paras. 642-647; Chinese Taipei's second oral
statement, para. 59; Chinese Taipei' response to Panel question No. 135.
1754 Chinese Taipei's first written submission, paras. 645-646.
1755 European Communities' first written submission, para. 407.
1756 European Communities' response to Panel questions No. 35(b) and 135.

HS1996 heading 84.71. Since the purpose of cr eating new positions under the heading 84.43 was
precisely to resolve a dispute arising from the lack of clarity of the criteria used in the HS1996, it is to
be expected that the new positions in the HS2007 use different criteria.
1757
7.1359 As to the 2007 explanatory note to heading 8443 in the HS2007, the European Communities
submits that the purpose of that section of the expl anatory note was simply to draw a "non-exhaustive
list" of different types of apparatus included within this "group" of machines. 1758 Because the list is
non-exhaustive the description that follows the term "photocopiers" does not necessarily imply that
the "digital copiers" mentioned in the explanatory note are not "photocopying apparatus".
1759
Additionally, the European Commun ities argues that the list in the e xplanatory note, even if it were
exhaustive, is much narrower than that included in the 1996 explanatory note to heading 9009. The
European Communities submits that it would be improper to prejudge whether the process followed
by "digital copiers" may be characterized as "indirect" for the purposes of the HS1996, where the term
"photocopier" is used in a broader sense than in the 2007 HSEN.
 1760
7.1360 Finally, as to the new HS2007 Note 5(D) to Chapter 84, the European Communities contends
that the reference to "copying machines" and MFMs made therein, merely seeks to dispel any possible
remaining doubts with regard to their classificati on. Since the old HS1996 heading 9009 was entirely
deleted, it was neither necessary nor possible to in sert equivalent language excluding expressly from
its scope digital copying machines or MFMs with a copying function.1761
Consideration by the Panel
7.1361 The Panel notes that Japan and Chinese Taipei have not specified that the Panel should
consider the relevance of the HS2007 as supplementa ry means of interpretation under Article 32 of
the Vienna Convention.
7.1362 We recall that under Article 32 of the Vie nna Convention, recourse may be had to
"supplementary means of interpretation" in two di stinct circumstances, namely, either to confirm the
meaning of the treaty terms resulting from the applica tion of Article 31 or to determine such meaning,
but only if the Article 31 interpretation left the meaning ambiguous or obscure, or led to a result
manifestly absurd or unreasonable. We recall fro m paragraph 7.585 above that the Appellate Body
has indicated that documents published, events occurring, or practice followed subsequent to the
conclusion of the treaty may be relevant for consid eration under Article 32 of the Vienna Convention
to the extent that the instrument or document reflec ts the "common intentions of the parties' at the

1757 European Communities' first written submission, para. 408, fn. 281.
1758 The European Communities also contrasts this language with the description of "Electrostatic
printers" under "item (1)" of "Section (A)" of the 2007 HSEN, which is introduced by the terms "Electrostatic
printers, which employ a process…". Additionally, argues the European Communities, the non-exhaustive
nature of the list of "copying machines" is further confirmed by the second (and last) paragraph of "Section B"
of the 2007 HSEN, which states that "[t]his group also includes contact photocopying apparatus and thermo
copying-apparatus." The "group" referred to in that second (and last) paragraph of "Section (B)" is the group of
"copying machines", and not only the "photocopiers" described under "item (2)" of "Section (B)". (European
Communities' response to Panel question No. 135).
1759 European Communities' response to Panel question No. 135.
1760 European Communities' first written submission, para. 408, fn. 281; European Communities'
response to Panel questions No. 35 and 135.
1761 European Communities' first written submission, para. 408, fn. 281.

time of the conclusion" of the treaty.
1762 The Appellate Body emphasized however, that such an
assessment must be determined on a case-by-case basis.
7.1363 Furthermore, as to what material can qualify as "supplementary means of interpretation", we
recall the Appellate Body's clarification in EC – Chicken Cuts that the reference made in Article 32 to
"preparatory work of the treaty" and "circumstanc es of its conclusion" is not exhaustive, indicating
that "an interpreter has a certain flexibility in co nsidering relevant supplementary means in a given
case so as to assist in ascertaining the common intentions of the parties."1763
7.1364 It follows therefore that the fact that the HS2007 is not preparatory work of the treaty or
circumstances of the conclusion of the treaty, does not per se disqualify it from being considered
supplementary means of interpretation under Article 32. Nor can the fact that the HS2007 occurred
subsequently to the conclusion of the treaty be per se a reason to disqualify it under Article 32, so
long as it serves to indicate what were the "common intentions of the parties" at the time of the
conclusion of the treaty, i.e. at the time they bound their Schedules.
 1764
7.1365 We note that the HS is constantly evolving and that, in fact, the HS2007 is the second update
to the HS since 1996. 1765 If the current version of the HS or its Chapter or Explanatory Notes
contained information that indicated the common intentions of the parties at the time of the conclusion
of the treaty it could serve as a supplementary means of interpretation.
7.1366 However, we conclude that the materials the parties have raised do not indicate the common
intentions of the parties in 1996 when they we re drafting their Schedules. The change from the
HS1996 (and indeed the HS2002) to the HS2007 that is re levant for our analysis is the elimination of
subheading 9009 12 and the redrafting of headings 8471 and 8443, such that heading 8443 now
covers certain products such as stand-alone and multifunction devices that can perform the functions
of printing, scanning, copying or facsimile transm ission, some of these devices being connectable to
computer, some not. The parties have raised the 2007 HSEN to 8443 as additional interpretative
support for their positions with respect to the scope of the obligations in both 8471 60 and 9009 12 as
they existed in the 1996 EC Schedule.
7.1367 Although the changes in the HS are certainly relevant to the current classification of the
products at issue in this dispute and the explanatory note does contain similar language to that in prior
versions of the HS we see nothing in the explanat ory note to indicate that it is a reflection of the
common intentions of the parties in 1996, such as an explanation that the 2007 HSEN, as part of the
process of combining the coverage of the two subh eadings, was codifying the distinctions between
subheadings HS1996 subheading 8471 60 and 9009 12 as they existed in 1996 or if the Note 5(D) to
Chapter 84 of the HS2007 specifically stated that the products not to be classified in 8471 had been
classified therein in previous versions. Howeve r, the HSEN and Chapter Note do not say that.
Indeed, we understand that the development of the new subheading 8443 31 was the result of
consistent disagreement among the parties as to the scope of HS1996 subheadings 8471 60 and 9009
12 respectively, and whether there was any overlap. Therefore, we conclude that this particular

1762 Appellate Body Report on EC – Chicken Cuts, para. 305.
1763 Appellate Body Report on EC – Chicken Cuts, para. 283 and para. 305, fn. 574 (relying on the use
of the word "including" in the text of Article 32 as an indication of its non-exhaustive nature).
1764 Appellate Body Report on EC – Chicken Cuts, para. 305 (footnote omitted).
1765 We note that the HS Committee undertakes a periodic review of the HS, approximately every 4 to 6
years. Since the version of the HS that came into force on 1 January 1996 (the version under which the
concessions of this case were based on), new versions of the HS have come into force on 1 January 2002 (HS
2002) and 1 January 2007 (HS2007). It is envisaged that a fifth set of amendments will enter into force on
1 January 2012.

HS2007 heading, HSEN to that heading and the new Note 5 to Chapter 84 cannot serve as
supplementary means of interpreting the concessions the European Communities made in its schedule
in 1996.
(vi) Overall conclusions on the ordinary meaning of the terms of HS1996 subheading 8471 60
and CN 8471 60 in the EC Schedule
7.1368 Our analysis of the text of the tariff concession in its context and in light of its object and
purpose led us to conclude that the ordinary mean ing of the concession is such that it applies to
devices that form part of an "automatic data-pro cessing machine" or an "automatic data-processing
machine system", and that perform at least one specified function that involves accepting or
delivering data in a form (codes or signals) that can be used by the automatic data-processing machine
or "automatic data-processing machine system". We are also of the view that not all devices capable
of connecting to an ADP by accepting or delivering data from or to an ADP necessarily qualify as an
input or output unit of heading 8471. We did not find any relevant subsequent practice on the matter.
Furthermore, the documents proposed as supplementa ry means of interpretation by the parties cannot
serve as such.
7.1369 Having now established the scope of the concession, i.e., the type of products covered by the
European Communities' obligation under GATT Articl e II to provide duty-free treatment to products
in subheading 8471 60 of its Schedule, we will turn to an analysis of whether the complainants have
demonstrated that the products at issue, ADP MFMs, fall within the scope of that obligation.
(b) Whether ADP MFMs are "input or output units" within the meaning of 8471 60
7.1370 The complainants assert that ADP MFMs are "input or output units" within the meaning of
subheading 8471 60 because they "receive signals fro m the computer and provide the results to the
user in the form of a printed page, and take th e information from hard copy and process it into an
electronic file provided to the computer for storage or transmission, or to be converted into a printed
image or deleted."
1766 Additionally, Japan and Chinese Taipei contend that the products are also
"printers" which are an acknowledged subset of "i nput or output units" as evidenced by the European
Communities creating an eight-digit tariff item number for printers under the relevant subheading, i.e.,
tariff item number 8471 60 40.
7.1371 The European Communities' asserts that beca use the multiple functions of the ADP MFMs
include copying, there is a ques tion whether they are properly cl assifiable for customs purposes as
"output units" under HS1996 subheading 8471 60 or as "photocopying apparatus" under HS1996
subheading 9009 12. The European Communities argues that a proper application of the classification
rules of the HS will lead to the conclusion that the products should be classified in subheading 9009
12 and therefore, the European Communities is not obligated to provide duty-free treatment for the
products.

1766 United States' first written submission, para. 153 (citing the definition McGraw-Hill Dictionary);
United States' second oral statement, para. 109; Japa n's first written submission, paras. 77, 87-88 and 90;
Japan's first oral statement, para. 11 (but also further indicating that the predominant printing function of
ADP MFMs indicates that they fall under the ordinary me aning of "output units – printers"); Chinese Taipei's
first written submission, paras. 543-545, 585. Japan more explicitly claims that these concessions cover all
MFMs "with a digital connectivity", i.e. ADP MFMs. (Japan's first written submission, para. 77; Japan's second
written submission, para. 39; Japan's response to Panel question No. 110).

7.1372 As a general proposition, if ADP MFMs are de termined to be within the scope of the
concession in subheading 8471 60 th en the European Communities is obliged to provide them with
duty free treatment pursuant to the bindings in its Schedule.
7.1373 Normally, once the Panel has reached a conclu sion on whether the products are within the
scope of the tariff concession the next step would be to compare the obligation in the EC Schedule
with the treatment provided for in the European Communities' measures in order to determine whether
that treatment is less favourable than and charges duties in excess of that set forth in its schedule in
contravention of its obligations in Articles II:1(a) and (b) of the GATT 1994. However, in this case,
the European Communities asserts because ADP MFMs are classifiable under another tariff
subheading means that the appropriate tariff conc ession is not necessarily the one put forth by the
complainants. We will address the issue of whether th e products at issue fall within more than one
tariff concession and the ramifications of that for an analysis under Article II of the GATT 1994 in
section VII.G.3(c) below. We begin our analysis , however, with the question of whether the ADP
MFMs at issue are covered by the tariff con cession in subheading 8471 60, given our understanding
of the scope of that concession as set out above.
(i) Arguments of the Parties
7.1374 The complainants describe MFMs, in general, as "digita l devices" that perform, in addition
to printing, one or more of the functions of scanning, copying, or facsimile transmission . They
further describe these machines as "gener ally" incorporating: (i) an "i nput unit" (i.e., a "scanner unit"
to convert information into digital input for the device) and (ii) an "output unit" (i.e., a "printer
unit"
1767 that allows the digital output from the device to be printed in paper form). The complainants
argue that once a document has been converted in to "digital information" by the MFM, such
information can be "stored, manipulated on the co mputer, transmitted over phone lines, or sent over
the internet."1768 The complainants describe ADP MFMs, in particular, as MFMs that are "capable of
directly connecting to an automatic data-processing machine or to a computer network in a digital
form."1769 Chinese Taipei further adds that these machin es "normally incorporate," in addition to the
printing function, a scanning and copying function, and they "sometimes" also have a fax function.1770
7.1375 The European Communities, however, argues that contrary to the complainant's assertions
MFMs are not 'technologically advanced versions of printers' but rather are best described as "the
result of a process of technological convergence whereby different devices, each with a specific
function (photocopiers, printers and/or facsimile m achines), have been merged into a single machine
capable of performing simultaneously various functions." 1771 The European Comm unities asserts that
these machines were developed from a "photocopier basis." 1772 The European Communities agrees
with the complainants that the prin t engine is an important part of the MFM, however it argues that it

1767 Chinese Taipei further adds, more specifically, that all MFMs at issue in the present dispute
incorporate an "electrostatic print unit." (Chinese Taipei's first written submission, para. 17)
1768 United States' first written submission, paras. 68-69, 71; Japan's first written submission, paras. 17-
19;Chinese Taipei's first written submission, paras. 17-20, 551 and 483).
1769 United States' first written submission, paras. 68-69, 71; Japan's first written submission, paras. 17-
19;Chinese Taipei's first written submission, paras. 17-20 and 483).
1770 Chinese Taipei's first written submission, para. 20. Chinese Taipei further explains that
ADP MFMs make copies when their "scanning unit" and "printing unit" work "in tandem". This is done,
elaborates Chinese Taipei, when "the digital image produced by the scanning unit is sent directly to the printing
unit" and, as a result, "one or more copies of the digiti zed image will be printed directly." (Chinese Taipei's first
written submission, para. 551).
1771 European Communities' first written submission, para. 330.
1772 European Communities' first written submission, para. 331.

is a necessary component, not only in printers, but in stand-alone digital photocopiers and facsimile
machines. The European Communities argues that a lthough the copying function (i.e., the instant
reproduction of an original document) involves the use of a print engine it is distinct from the function
of printing data received from an ADP machine.
1773
7.1376 The copying function of ADP MFMs is central to the European Communities' argument that
these products are not properly classified in subh eading 8471 60. Relying on the decision of the
European Court of Justice in the Kip case, the European Communities argues that the products at issue
cannot be directly classified under subheading 8471 60 unless it is shown that the copying function is
secondary in relation to the functions involving the use of an ADP. Additionally, the European
Communities contends that if th e copying function is "equivalent" then the goods are classified
pursuant to GIR 31774 and may still be classified under heading 9009 in accordance with GIR 3(c).1775
7.1377 The European Communities concedes that all the MFMs at issue meet conditions (b) and (c)
of Note 5(B). Therefore, the central point of disagreement between the complainants and the
European Communities is whether, via the proper app lication of the rules of the HS, in particular
Note 5(B)(a) to Chapter 84, the MFMs at issue can be classified under HS1996 subheading 8471 60.
7.1378 According to the United States, ADP MFMs respect all the conditions in Note 5 to
Chapter 84 and hence qualify as computer "un its", under HS1996 subheading 8471 60 in the EC
Schedule. In particular, the United States argues that, as required by Chapter Note 5(B), ADP MFMs
are "of a kind solely or principally used" in an automatic data-processing machine, "connectable" to
an automatic data-processing machine, and "able to a ccept or deliver data in a form (codes or signals)
which can be used by the system". Furthermore, the United States, argues that ADP MFMs are not
"machines performing a function other than data procession" under Note 5(E), and that this note
cannot serve as a basis for classifying the machines elsewhere.
1776
7.1379 All three complainants focus on the fact that the machines are made up of "printer modules"
and "scanning modules" which are designed to work with an automatic data-processing machine, to
support their contention that these devices are "pri ncipally used" with an automatic data-processing
machine or computer system. 1777 The complainants also point out that the printing function is the
most significant and that the print module is by far the largest component of the MFM.1778

1773 European Communities' first written submission, paras. 336-337.
1774 The European Communities argues that, when the copying function of the MFMs is not secondary
in relation to their ADP functions, th ey are prima facie classifiable under the HS96 headings 8471 and 9009
(and under the heading 8517 as well, if the MFM has al so a fax function). It becomes necessary, therefore, the
European Communities argues, to classify such MFMs in accordance with GIR 3. The European Communities
notes that the heading for photocopiers (9009) occurs in the HS96 after the headings for printers (8471) and fax
machines (8517). The European Communities considers GIR3(a) and (b) irrelevant. Therefore, it argues, in
accordance with GIR 3(c) , the MFMs at issue must be classified under HS96 9009 and, more specifically,
within the subheading 9009 12 (European Communities' first written submission, paras. 435-441).
1775 European Communities' first written submission, paras. 359, 364-365.
1776 United States' first written submission, paras. 161 -162 (also referring to the similar arguments it
makes with regard to its FPDs claim based on the concession in EC Schedule in CN code 8471 60 90).
1777 Chinese Taipei's first written submission, paras. 603-611; Chinese Taipei's second written
submission, paras. 328-332.
1778 United States' first written submission, para. 157; Japan explains that Note 5(B)(a) requires only
that the device be "of a kind" principally used with a computer. Japan considers that the qualifier "of a kind" in
Note 5(B)(a) serves to "limit the potentially broader lang uage" of the phrase "solely or principally used," which
follows it. In other words, explains Japan, the device need not to be "actually used" principally with a computer.
Similarly, Note 5(B)(b) requires only that the device be "connectable," not that it actually be "connected", and

7.1380 According to the complainants "printing" a nd "scanning" are the objective characteristics of
these devices and "digital copying" is simply an "incidental function" that occurs because of the
combination of these two core objective characteristics.
1779 "Printing" and "scanning" are, thus, the
tangible features of MFMs that provide the core functions that can operate on their own. The
complainants note that a pre-existing digital file ca n be printed and that an original document can be
converted into a digital file and then stored. Both the printing and scanni ng functions – and the
equipment that makes these two functions possibl e – thus fall squarely within HS1996 heading 8471
as "units" of an automatic data-processing machine. In Japan's view, ADP MFMs do not cease being
"units" of an automatic data-processing mach ine simply because these two functions, operating
together – with no additional equipment – can al so provide a digital copying function that can mimic
"analogue" photocopying. 1780
7.1381 Indeed, Japan asserts that the "printer unit" of an ADP MFM works just as any other "single
function computer printer", in particular given th at in both cases there exists a "laser scanning unit"
("LSU") that allows the device to "receive digital output from the computer and convert that digital
output into laser light that can then be used to create the printed image on paper or some other
medium." Japan submits that any other features MFMs may have simply "complement this basic
printing function and simply increase the functionality of the device." Japan further submits that an
ADP MFM's "printer unit" can operate "without any t echnical involvement" of its other units, i.e. the
"scanner unit" and/or "fax unit". Japan thus consid ers that an ADP MFM's "printer unit" "is basically
a computer printer."1781
7.1382 Chinese Taipei argues that, regardless of the application of Note 5(B), Note 5(D) indicates
that apparatus that can print from computers (like ADP MFMs) are "in all cases" to be classified in
HS1996 heading 8471, even though they are not "solely or principally used" with an automatic data-
processing machine. Accordingly, ADP MFMs ar e nevertheless classifiable under subheading 8471
60, more specifically under tariff item number 8471 60 40.
1782

Note 5(B)(c) requires only that the device be "able" to accept or deliver signals. Japan thus concludes that the
rule of Note 5(B)(a) follows the Appellate Body logic in EC - Chicken Cuts, according to which it is necessary
to look to the product based on its "objective characteristic s" at the time it crosses the border. Japan argues that
this means that even if a particular MFM might "actually" be used more often in some "non-computer use," the
device would still belong under HS1996 heading 84.71, since it is of "a kind" principally used with a computer
based on its "objective characteristics." (Japan's seco nd written submission, para. 101 and Japan's comments on
the WCO responses to Panel questions, page 2). See al so Japan's second written submission, footnote 70 to
para. 94.
1779 Chinese Taipei's second written submission, para s. 328-332. Chinese Taipei quotes the following
part of this European Court of Justice ruling to support such assertion:

"[a]ccordingly, those machines are likely simultaneously to meet the three requir ements laid down in
Note 5(B)(a) to (c) to Chapter 84 of the CN for them to be considered units forming part of an automatic data-
processing system, that is to say to be of a kind used solely or principally in an automatic data-processing
system, capable of connection to the central processing unit and receiving or supplying data in a form usable by
that system."
(European Court of Justice (Kip and Hewlett Packar d), para. 41 (Exhibit TPKM-63). See also, above
at paragraph 7.1288.
1780 Japan's second written submission, paras. 97-104. See also Japan's first written submission, paras.
146-154 (including para. 149, fn. 76); Japan's first oral statement, para. 29; Japan's second written submission,
para. 83; Japan's second oral statement, paras. 44-46.
1781 Japan's first written submission, paras. 91-95.
1782 Chinese Taipei's first written submission, paras. 603-611; Chinese Taipei's second written
submission, paras. 328-332.

7.1383 The United States concurs, arguing that if it is undisputed that printers and scanners are
covered by the European Communities' concession it is then illogical to conclude that when these
products are combined into a single unit, that a co mbined unit becomes a "photocopier" rather than an
"input or output unit."
1783 Therefore, the possible use of an ADP MFM as a digital copier cannot
somehow trump its objective characteristics of having a "printer unit" to output digital files as paper
documents and having a "scanner unit" to create digita l files from paper originals. In this regard,
Japan recalls that the Appellate Body has focused on the objective characteri stics of the device at
issue, not its actual use. In the present case, claims Japan, the objective characteristics of ADP MFMs
– their printer and scanner units – are both either directly or indirectly part of the device as a "printer."
The other functions do not change these objective characteristics.1784
7.1384 Additionally, Japan further asserts that the language of Note 5(C) confirms that ADP MFMs
are computer "units" under HS1996 heading 8471 even if imported without an automatic data-
processing machine and it further claims that ADP MFMs cannot be excluded from being such an
"unit" by virtue of Note 5(E), since their "digita l copy function" does not work "in conjunction with"
an automatic data-processing machine and does not th erefore perform a "specific function other than
data-processing."1785
7.1385 The European Communities submits that the complainants fail to properly take into account
Note 5(B) to HS1996 Chapter 84. According to the European Communities, pursuant to that note, the
MFMs at issue cannot be classified under HS1996 subheading 8471 60, unless it can be shown, on a
case-by-case basis, that the copying function of each particular kind of MFM is secondary in relation
to its ADP functions. 1786 The European Communities asserts that the relevant criteria for conducting
such a case-by-case analysis, as noted by the European Court of Justice in its Kip judgment, may
include print and reproduction speeds, the existence of an automatic page feeder for originals to be
photocopied or the number of page feeder trays. The European Communities states that this list of
criteria is not exhaustive and other objective characteristics of MFMs may be relevant as well.1787 The
European Communities does not consider that the actual use given to the products is relevant because,
as confirmed by the Appellate Body in EC – Chicken Cuts , in characterizing a product for the
purposes of tariff classification, it is necessary to look exclusively at the "objective characteristics" of
the product in question when presented for classification at the border.1788
7.1386 According to the European Communities, a "unit" may not be regarded as being part of an
automatic data-processing system and, hence, as covered by HS1996 subheading 8471 60, unless it
meets each of the three conditi ons specified in Chapter Note 5(B). The European Communities
argues that, whether MFMs also satisfy the condition in sub-paragraph (a) will depend on the "nature"
and the "relative importance" of the functions performed by each particular kind of MFM.1789
7.1387 The European Communities argues that, as admitte d by Japan, the digital copying function of
an ADP MFM works independently from an automa tic data-processing machine and, indeed, such
function could continue to be ope rated even if the ADP MFM were disconnected from the computer.
Therefore, in so far as an MFM is used for c opying, it cannot be considered to be "used in a

1783 United States' first oral statement, para. 35.
1784 Japan's second written submission, paras. 79 (third bullet point), 94-95.
1785 Japan's first written submission, paras. 146-154 (inc luding para. 149, fn. 76); Japan's first oral
statement, para. 29; Japan's second written submission, paras. 83 and 97-98.
1786 European Communities' first written submission, para. 411.
1787 European Communities' first written submission, para. 418.
1788 European Communities' first written submission, paras. 414-419.
1789 European Communities' first written submission, paras. 414-415.

computer". The European Communities further ar gues that the complainants have not submitted
enough evidence to support their point that computer functions of ADP MFMs, such as printing, are
such as to indicate that these devices are "princip ally" used with computers. Merely juxtaposing
certain computer functions (i.e. scanning and printing) and non-computer functions (i.e. copying) of
ADP MFMs to conclude that these devices comply with the "principally used" rule of Note 5(B)(a)
because, numerically, there are more "computer" than "non-computer" functions, is, in the European
Communities' view, too simplistic an argument. Such an argument overlooks, for example, the fact
that the scanning function may be "purely instrument al" to the copy function and that the machine
may have other non-computer functions, such as "facs imile transmission". More crucially, concludes
the European Communities, this "quantitative approach" fails to take into consideration the "level of
performance" of each of the different functions of the device.
1790
7.1388 In the European Communities point of view, Japan's position that "printing" is always the
principal functions of any ADP MFM is "unjustifiably rigid and manifestly unreasonable" because it
assumes this conclusion irrespective of the speci fic objective characteristics of each model of
ADP MFM. The European Communities contends that the argument that th e "print unit" (or the
"print module") is the "most important" component of ADP MFMs is wrong because most of the
printing components, including in particular the "p rint engine", are themselves multifunctional (i.e.
they can be used indistinctly for printing data received from an automatic data-processing machine,
for copying or for printing an incoming facsimile message). Additionally, the European Communities
argues that it does not follow from the mere fact th at the printing components are the most important
that the printing function is the most important. The Europ ean Communities rebuts the complainants'
position that the copying function is "incidental" to the other functions as being based on the
"implausible premise" that "digital copying" is not really "copying." And even if this premise were
correct, it would be of no use in relation to Note 5(B)(a), because it is beyond dispute that digital
copying, regardless of whether it is a distinct "function", does not involve "the use of an ADP
system".
1791
7.1389 According to the European Communities, when the copying function is not secondary (e.g., it
is either primary or equivalent) then the MFMs in question are prima facie classifiable in both
HS1996 subheadings 8471 60 and 9009 12 and the relevant rules of the HS, most notable GIR 3, must
be applied. In particular, the European Communities argues that because the essential character of the
MFM cannot be determined pursuant to GIR 3(b) , then GIR 3(c) is the applicable rule. 1792 GIR 3(c)
requires that when goods cannot be classified pursuan t to GIR 3(a) or (b) they shall be classified in
the heading which occurs last in numerical order among those which equally merit consideration. In
the European Communities' view, this justifi es the classification of MFMs under HS1996 subheading
9009 12 as photocopying apparatus.
7.1390 For their part, the complainants argue that GIR 3(c) is inapplicable. Most importantly, they
argue that any "essential character" analysis unde r GIR 3(b) would result in classification under
HS1996 heading 8741. Specifically, Japan argues that:

1790 European Communities' first written submission, para. 422; European Communities' second
written submission, para. 130.
1791 European Communities' second oral statement, paras. 140-145.
1792 GIR 3(b) requires classification of composite machines by the material or component which gives
them their essential character. The European Communities concedes that it is the print engine which would
confer the essential character on a MF M. However, the European Communities contends that the print engine
can be intended for use as a copier, fax, or printer, therefore if a print engine were intended for use in a MFM its
classification would give rise to the same difficulties as the classification of the MFM itself. The European
Communities, therefore, concludes that application of GIR 3(b) is impossible. See European Communities' first
written submission, paras. 437-441.

"For purposes of the analysis under GIR 3(b), MFMs with digital connectivity are
considered to be composed of the two key components – a printer module and a
scanner module – and it is the printer module that gives MFMs their essential
character because of the predominant printi ng function of MFMs. Moreover, both of
the two key components –a printer module and a scanner module – belong to the
same heading (i.e., 8471)."
1793
(ii) Consideration by the Panel
7.1391 The Panel recalls its conclusion above that an "input or output unit" within the meaning
subheading 8471 60 is a device that is of an "aut omatic data-processing machine" or part of an
"automatic data-processing machine system", that is connectable to the central processing unit either
directly or through one or more other units and th at performs at least one specified function that
involves accepting or delivering data in a form (codes or signals) that can be used by the automatic
data-processing machine or "automatic data-processi ng machine system". We also recall our view
that not all devices capable of connecting to an ADP by accepting or delivering data from or to an
ADP necessarily qualify as an input or output unit of heading 8471.1794
7.1392 All the parties agree that ADP MFMs are apparatus that not only perform ADP functions,
such as printing paper documents from an automa tic data-processing machine, but also perform,
autonomously, non-ADP functions, such as "digita l copying" (and, sometimes, "facsimile
transmission" as well). The parties all also agre e that the apparatus are able to connect to an
automatic data-processing machine and accept or deliver data from the central processing unit. Then,
the issue as posed by the parties is whether the product s at issue satisfy the criteria in Note 5(B)(a) of
Chapter 84, i.e. that they are "of a kind solely or principally used" with an automatic data-processing
machine.
7.1393 As noted above, we believe that the analysis should not be on actual use, but the design and
intended use of the products based on an examination of the objective characteristics. This can clearly
only be done on a case-by-case, product specific basis.
7.1394 The European Communities concedes that the prin t engine is the largest and most valuable
component of a MFM. 1795 The European Communities also does not dispute that the way copying is
achieved in a MFM is through the combined use of the print engine and the scanner. 1796 It is also
undisputed by all parties that a "single function" machine which was solely a printer or solely a
scanner would be presumed to be of a kind solely or principally used with an ADP machine and
would fall within the concession in subheading 84 71 60. However, the European Communities argues

1793 Japan's first oral statement, para. 31.
1794 However, with regard to whether MFMs fall within the scope of subheading 9009 12, see
paragraph 7.1476, below.
1795 European Communities' first written submission, para. 438. We note that the European
Communities, in paragraph 334 of its first written submis sion states that the essential components of an ADP
MFM with the functions of copying, printing and facsimile are: a print engine, a scanning device, a modem and
a print controller. On the other hand, Japan refers to the "printer unit" (see Japan's first written submission,
paras. 93-97). The United States refers to both a "print er unit" and a "print engine" (see United States' first
written submission, paras. 68 and 70). Finally, Chinese Taipei, in discussing the Kip judgment refers to the print
module, the scanning module and th e computer module (see Chinese Ta ipei's first written submission,
para. 518.)
1796 European Communities' first written submission, para 371-372 (explaining that in a digital
photocopier, a source of light project s the image of the origin al document onto the pho to-sensitive surface of a
scanning device, which convert it into electrical signals which are then recreated in the electrostatic print drum)

that a machine which combines the printing and scanning functions and in the process creates a
copying function, does not necessarily fall within th e scope of subheading 8471 60. According to the
European Communities, if the copying function is "equivalent" to the ADP function then the product
is prima facie classifiable in both subheadings 8471 60 and 9009 12 and by virtue of GIR 3(c) would
fall under dutiable subheading 9009 12. The Eu ropean Communities also argues that if the
combination of these two functions together, cr eates a machine where the copying function is
primary, that machine is necessarily not of a kind principally used with an ADP machine and must
also fall within the scope of subheading 9009 12.
1797
7.1395 The European Communities points to several crit eria set forth by the European Court of
Justice in the Kip case, including the pages per minute copying capability. However, we observe that
these criteria are not set out in th e HS1996 Chapter Notes themselves 1798 and that the European
Communities did not explain why these criteria would be more relevant than others, such as the
function of the principal component or the value of the various components in the MFM. 1799 We are
not persuaded that an MFM which can copy more than 12 monochrome pages per minute is
necessarily not "of a kind solely or principally used with an automatic data-processing system".
Similarly, we are not persuaded by the contention that this analysis will necessarily lead to the
conclusion that all MFMs are input or output units. This is a determination that needs to be made on a
case–by-case basis, taking into account the objective characteristics of each MFM.
7.1396 Additionally, we recall our conclusions in pa ragraphs 7.1306 through 7.1311, above that the
requirement set forth in Note 5(B)(a) that a "unit" must be "of a kind solely or principally used in an
automatic data processing system" is an expression of the plain meaning of the term unit of an ADP
machine and applies equally to separately presented units described in Note 5(C).
7.1397 We also note that, in certain circumstances, some ADP MFMs pursuant to our understanding
of the guidance in Note 3 to Section XVI for co mposite machines, will fall within the scope of
subheading 8471 60 if the principal function of that machine is printing, scanning or another "input"
or "output" function. While such a determination needs to be made on a case-by- case basis, it seems
to us that reading the concession in light of the c ontext of the HS Chapter and Section Notes and the
object and purpose certain of the ADP MFMs at issue in this dispute will fall within the terms of the
concession in subheading 8471 60.
7.1398 We note the EC position that at least some of th e products at issue fall within the scope of its
concessions that relate to HS1996 subheadings 9009 12 and 8472 90. We turn to that issue now.

1797 European Communities' first written submission, para. 389.
1798 We also note that the only criteria for a determination that copying is either primary or equivalent
reflected in the EC measures is the number of pages per minute the apparatus can copy. We do not believe that
this criterion alone can serve to determine "principal us e" especially as copying speed is usually identical to
printing speed in MFMs. See Exhibits US-87, US-104, JPN-13, US-108, EC-95 where the parties submitted the
technical specifications of various MFM models of different brands (HP, Brother, Xerox, Lexmark, Ricoh). For
all these models print and copy speed are the same. Sometimes print and copy speed are mentioned separately
("print speed"..."copy speed"), sometimes together ("print and copy speed")."
1799 A focus on the function of the principal component seems more in line with Note 3 to Section XVI.
We note that the European Communities has argued that if the prin cipal component, in this case the print
engine, is itself multifunctional then classification of the MFM, pursuant to GIR 3(b) based on the classification
of the component which imparts the products essential character is not possible. (see European Communities'
first written submission, paras. 438-440). However, the Panel is not persuaded by this argument.

(c) Are there other applicable tariff headings?
7.1399 The European Communities argues that because there are other prima facie applicable tariff
headings for the products at issue, and the proper a pplication of the rules of the HS would result in
ADP MFMs with a primary or equivalent c opying function being properly classified under a
subheading other than subheading 8471 60 in the EC Schedule, it is not obliged to provide duty-free
treatment to certain ADP MFMs. The first issue for the Panel to consider is whether the products at
issue (or at least some of them) fall within the scope of the dutiable headings identified by the
European Communities. If they do, the Panel would th en need to consider what effect this may have
on the issue of whether the EC is in breach of its obligations under Article II of the GATT 1994.
7.1400 The European Communities raises two possible alternative tariff headings related to
subheading 9009 12 and subheading 8472 90. In order to determine whether either is applicable we
will have to examine the ordinary meaning of th e concession and whether the products at issue fall
within the scope of that concession. We will address each concession in turn.
(i) Ordinary meaning of the terms of the concession under HS1996 subheading 9009 12
1800
7.1401 The Panel will begin analysing the ordinary me aning of the terms of the concession under HS
1996 subheading 9009 12 by examining the plain meaning of the terms set forth in that concession.
HS96 Description Base
rate
Bound
rate
Year of full
implementation
Other
duties
and
charges
Legal
instrument
where the
concession
is reflected
9009 Photocopying apparatus
incorporating an optical system
or of the contact type and
thermo-copying apparatus:

 - Electrostatic photocopying
apparatus:

9009 11 00 - - Operating by reproducing
the original image directly onto
the copy (direct process)

6.5 0.0 2000 0.0 WT/Let/156
9009 12 00 - - Operating by reproducing
the original image via an
intermediate onto the copy
(indirect process)

7.2 6 1999 0.0 WT/Let/666
 - Other photocopying
apparatus:

9009 21 00 - - Incorporating an optical
system
6.5 0.0 2000 0.0 WT/Let/156
9009 22 00 - - Of the contact type 4.9 3 1999 0.0 WT/Let/666
9009 30 00 - Thermo-copying apparatus 4.4 3 1999 0.0 WT/Let/666
9009 90 - Parts and accessories

1800 We recall that the EC Schedule is based on the HS1996 and that the language in the two are
identical. We also note that the parties often refer to the two interchangeably. Therefore, while we may refer to
the HS1996 in our analysis, we are ever mindful that the concession at issue is the one in the EC Schedule.

HS96 Description Base
rate
Bound
rate
Year of full
implementation
Other
duties
and
charges
Legal
instrument
where the
concession
is reflected
9009 90 10 - - Of electrostatic
photocopying apparatus or
other photocopying apparatus
incorporating an optical system
6.5 0.0 2000 0.0 WT/Let/156
9009 90 90 - - Other 3.8 0.0 2000 0.0 WT/Let/156

Meaning of electrostatic photocopying appara tus operating by reproducing the original image
via an intermediate onto the copy (indirect process)
Arguments of the parties
7.1402 The European Communities argues that the terms of the concession in HS1996 subheading
9009 12 for electrostatic photocopying apparatus "ope rating by reproducing the original image via an
intermediate onto the copy (indirect process)" are broad, and cover products, such as the MFMs at
issue, which make copies using digital technology. 1801 By contrast, the complainants argue that the
HS1996 subheading 9009 12 is very narrowly tailored to a particular type of copying process, also
known as analogue photocopying, and that it does not in clude products that make copies using digital
technology.1802
7.1403 All of the parties begin their analysis of the ordinary meaning of the concession in subheading
9009 12 by looking at the term "photocopying apparatus" in HS1996 heading 9009. The European
Communities, first notes that the prefix "photo" comes from the Greek word " phos" (φώς) and means
light. The European Communities asserts that the use of light is what distinguishes photocopiers from
other types of copying machines, such as the thermo-copying apparatus in subheading 9009 30 or the
mechanical duplicating machines in subheading 8472 90.
1803 The complainants provide several
definitions of variations of the term, such as for "photocopier", "photocopy" and "photocopying
process", in support of its contention that what is described in subheading in 9009 12 is a very specific
and narrow technological process. 1804 However, the European Communities argues that these
definitions support their contention that the descr iption in subheading 9009 12 is broad enough to
encompass "digital copying".1805
7.1404 In particular, all parties rely on the definition of a photocopier as "an electrical machine for
producing immediate, often full-size paper copies of text or graphic matter by a process usually
involving the electrical or chemical action of light;" 1806 a photocopy as "a copy of usually printed

1801 See, e.g., European Communities' first written submission, paras. 366-367; European Communities'
first oral statement, paras. 65-66; European Communities' response to Panel question No. 29, European
Communities' second written submission, para. 107; Europ ean Communities' second oral statement, para. 106;
European Communities' comments on the complainants' responses to Panel question No. 124.
1802 United States' second written submission, para. 112; United States' second oral statement, para. 37;
Japan's second oral statement, para. 22; Chinese Taipei's first written submission, para. 593.
1803 European Communities' first written submission, para. 368.
1804 See, e.g., the United States' first written submi ssion, paras. 74, 157-159; Japan's first written
submission, paras. 104-107; Japan's first oral statement, para. 12; Japan's second written submission, paras. 40
and 77; Japan's second oral statement, paras. 9 and 37; Chinese Taipei's first written submission,
paras. 568-570 and 584.
1805 European Communities' first written submission, paras. 368-370; European Communities' second
1806 The Shorter Oxford Dictionary (1993), p. 2193.

material made with a process in which an image is formed by the action of light usually on an
electrically charged surface;"
1807 and photocopying process as "any of the means by which a copy is
created on a sensitized surface (gener ally paper, film, or metal pl ate) by the action of radiant
energy."1808
7.1405 While all the parties seem to rely on the same general definitions of what photocopying is,
they do not agree on what type of technology is described in the concessi on as an electrostatic
photocopying apparatus "operating by reproducing the original image via an intermediate onto the
copy (indirect process)."
7.1406 The complainants argue that the term "indirect process" in the parenthetical does not impart
additional meaning, but rather is used to di stinguish it from the c opying process used by
"direct process electrostatic photocopying apparatu s" under subheading 9009 11 , in which the optical
image of the original is projected directly onto a "special light sensitive paper" without being first
projected onto an "intermediate."
1809 They essentially argue that "i ndirect process" electrostatic
photocopying does not have a separate meaning fro m the words used in the concession, i.e.,
photocopying done by "reproducing the orig inal image via an intermediate." Japan argues that,
unlike direct process electrostatic photocopying, indi rect process electrostatic photocopying inserts a
light sensitive "intermediate" – usually a light sensiti ve metal curved plate or drum – to serve as an
"intermediate" in the process, which is then used to finish the photocopying. 1810 Japan finds support
for its understanding in the McGraw-Hill Dictionary of Scientific and Technical Terms which defines
an "intermediate" as "that print which is used as a master for further reproduction." 1811 Japan also
argues that because the concession refers to "an in termediate," the language contemplates technology
that only uses a single intermediate – the light sensitive drum or plate – and not a series of steps.1812
7.1407 Based on the above definitions, the complainants argue that an electrostatic photocopying
apparatus "operating by reproducing the original image via an intermediate" has a very specific
meaning which does not include the use of digital data. 1813 In particular, Japan argues that a
"photocopier" reflects light off the original document a nd then uses that reflected light to transfer the
original image of the document to a light sensitive su rface and that this reflected light is not digital
data, and cannot be used or manipulated in the same way as digital data. 1814 The complainants also
argue that the photocopying process requires one expos ure of the original document for each copy.
According to Chinese Taipei, for each copy being made, an exposure of the optical image of the
original document is required. 1815 Japan argues that this one-to-one requirement is reflected in the
terms of the concession because the terms "image" a nd "copy" are in the singular, which, to Japan,
indicates that the photocopying apparatus covered by HS1996 subheading 9009 12 should reproduce a
single copy from a single original image. Ac cording to Japan, the language of the concession

1807 Merriam Webster Dictionary online available at http://www.merriam-
webster/dictionary/photocopy.
1808 The McGraw-Hill Dictionary, p. 1494 (Exhibit JPN-11).
1809 Japan's first written submission, paras. 105-107; Japan's first oral statement, para. 12.
1810 Japan's first written submission, para. 106.
1811 Japan's first written submission, para. 106 citing the McGraw-Hill Dictionary, p. 1034 (Exhibit
JPN-11).
1812 Japan's second written submission, para. 53. See also United States' first written submission, para.
158 and Exhibit US-90; United States' second written submission, para. 111.
1813 Japan's first written submission, para. 106; Chin ese Taipei's first written submission, para. 584;
United States' first written submission, para. 95.
1814 Japan's first written submission, para. 107; Japan's second written submission, para. 54.
1815 Chinese Taipei's first written submission, para. 579.

precisely captures the one image to make one co py correspondence that characterizes analogue
photocopying technology.
1816
7.1408 The European Communities, however, focuses on the requirement of a source of light to
project an image of the original, and argues that this definition of photocopying encompasses not only
analogue technology, but other technologies, such as digital copying, which also rely on a source of
light to project an image of the original documen t onto the photo-sensitive surfa ce of an "electrostatic
drum." The European Communities ar gues that an "intermediate may consist of an electrostatic drum
alone, as in the case of analogue photocopiers, or of various devices operating together (e.g., a
scanning device, a laser beam and an electrostatic drum), as in the case of the digital photocopiers
using a laser printer."
1817 The European Communities argues that Japan's definition does not belong
to the field of photocopying, but to printing mach inery. The European Co mmunities argues that the
ordinary meaning of "intermediate" is "coming or occurring between two things in time, place, order,
character, etc."1818
7.1409 Given the foregoing, the European Communities c oncludes that the ordinary meaning of the
terms of the concession in HS1996 subheading 9009 12 includes both digital and analogue copying
technologies because they both use light to make copies
1819, and because, as required by the terms of
the concession, both processes use an intermedia te to make copies, although in the case of
"digital copying", rather than one intermediate (the drum), various intermediates are used by working
together (i.e., a scanner; a laser beam and then an electrostatic drum).1820 Finally, and as a result of
the above, "digital copying" can be described as performing an "indirect process", even if in a
"more indirect" way than in analogue copying.1821
Consideration by the Panel
7.1410 The Panel recalls that its first task here is to determine the ordinary meaning of the scope of
the concession in subheading 9009 12 in the EC Sche dule. It is only after we have ascertained the
meaning of electrostatic photocopying apparatus "ope rating by reproducing the original image via an
intermediate onto the copy (indirect process)" that we can determine whether the products at issue,
certain ADP MFMs, are such apparatus.
7.1411 We consider that to accomplish such a task we are required to consider the following key
terms of this concession: "electrostatic photocopyi ng apparatus" and the "indirect process" where the
copy is produced "via an intermediate."

1816 Japan's first oral statement, para. 17; Japan's second written submission, para. 52.
1817 European Communities' first written submission, paras, 371-372, 374.
1818 European Communities' second written submission, para. 113 (citing the definition of
"intermediate" from the Shorter Oxford Dictionary) (1993) (Exhibit EC-96).
1819 European Communities' first written submission, paras. 369-370; European Communities' second
written submission, para. 106, fn. 76; European Communities' second oral statement, paras. 107-110.
1820 European Communities' first written submission, paras. 371-372 and 374. The European
Communities also considers that the complainants' narrow reading of "intermediate" as only meaning an
"electrostatic drum" has no basis on the ordinary meaning of this term, which is "coming or occurring between
two things in time, place, order, character, etc". Even if the terms "via an intermediate" had to be read as
meaning "via an electrostatic drum", this requirement wo uld be satisfied provided that the image is reproduced
onto the copy with the intervention of an "e lectrostatic drum" (as it is the case with all the "digital copiers") and
would not exclude the possibility that the image may have been processed by other devices, such as a "scanner",
before it reaches the "drum". European Communities' second written submi ssion, paras. 112-115; European
Communities' second oral statement, paras. 115-117.
1821 European Communities' first written submission, para. 372.

7.1412 We note that all the parties rely on definitions that describe "photocopying" as the process
whereby a paper copy is being produced by th e action of light on a photo-sensitive surface. The
complainants argue that "photocopying" is a very specific type of technology, while the European
Communities contends that any technology that u ses light to project an image of the original
document onto the photo-sensitive surface can be photoc opying. We have revi ewed the definitions
provided by the complainants and also looked at other definitions of photocopying.
7.1413 We find particularly informative, a definitio n from the World Encyclopaedia which explains
photocopying as:
"[R]eproduction of words, drawing, or photographs by machine. In a photocopying
machine, a light shines on the item to be copied, and an optical system forms an
image of it. Various techniques may be used to reproduce this image on paper. In a
modern plain-paper copier, the image is projected onto an electrically charged drum,
coated with the light-sensitive element sel enium. Light makes the selenium conduct
electricity, so bright areas of the drum lose their charge. The dark areas, which
usually correspond to image detail, retain thei r charge, and this attracts particles of a
fine powder called toner. Electrically char ged paper in contact with the drum picks
up the pattern of toner powder. A heated roller fuses the powder so that it sticks to
the paper and forms a permanent image."
1822 (emphasis added)
7.1414 The complainants explained that photocopying technology is based on an invention of the
process by Chester Carlson known as xerography. 1823 We note that in the Oxford English Dictionary
"photocopying" is indicated as a synonym to "xerogr aphy", the latter term being defined as "[a] dry
copying process in which an electrically charged surface retains both the charge and a pigmented
powder on areas not illuminated by light from bright pa rts of the document, so that a permanent copy
may be immediately obtained by placing paper on th e surface and applying heat to fuse the powder to
it; photocopying."1824 The Britannica Online Encyclopaedia explains that in xerography:
"[T]he photoconductive layer is selenium, and the image is made visible by dusting
the plate with an electrostatically charged powder (toner) having a charge that is the
opposite of that of the electrostatic image. The powder adheres to the image portions
only and is then transferred to a sheet of plain paper also under the influence of
electrostatic fields. A final heat treatment fuses the powder into the paper for a
permanent picture. The process usually makes a positive from a positive original."
1825
7.1415 We note that the definitions of photocopying provided by the parties are quite generic and that
the World Encyclopaedia recognizes that a photocopy can be made by a variety of methods, indeed

1822 "photocopying" World Encyclopaedia 2005. available at http://www.encyclopedia.com (last
viewed 23 May 2010).
1823 Xerox, the Story of Xerography" page 12 (Exhibit US-89) (explaining that "analogue photocopiers"
rely on a copy process called "xerography", invented in 1938 by Chester Carlson, and which is based on the
combination of two well-known natural phenomena: that materials of "opposite electrical charges" are attracted
to each other and that certain materials become "better c onductors of electricity when exposed to light.") See
also Abramsohn, Dr. Dennis A, " A Comparison of Photocopying to Digital Printing from Hardcopy" (Exhibit
US-90). See, e.g., the Unites States' first written submis sion, paras. 158-159; Japan's first written submission,
paras. 98-122; Chinese Taipei's second written submission, paras. 313-314; European Communities' first written
submission, paras. 371-372.
1824 Oxford English Dictionary, 2nd ed. 1989 (emphasis added).
1825 "photography, technology of" Encyclopaedia Britannica. En cyclopaedia Britannica Online.
available at http://www.search.eb.com/eb/article-36511 (last viewed 23 May 2010).

heading 9009 itself speaks of "contact type" photocopiers. However, it goes on to describe the method
of the "modern plain paper" photocopier which uses an electrostatically charged drum. We are of the
view that this type of photocopying does seem to be synonymous with "xerography" which uses
electrostatically charged powder (toner) and "electrosta tic fields". For this reason, we are of the view
that the definitions of "modern photocopying" and of xerography describe an electrostatic
photocopying process.
7.1416 We note that subheading 9009 12 does not cover just any electrostatic photocopying
apparatus, but one which operates by repr oducing the original image onto the copy via an
intermediate, which is also described in the concession with the parenthetical "(indirect process)".
The reference to "indirect process", distinguishes this process from the "direct process" technology
covered in subheading 9009 11. Essentially, in "indirect process" photocopying which operates via an
intermediate, the original image is not projected dir ectly onto the paper, but is rather first projected
onto something other than the final paper on which th e copy will appear. This is confirmed by the
definition of "intermediate" at paragraph 7.1406 as meaning "that print which is used as a master for
further reproduction." It is also confirmed by the explanation of the "electrostatic
photocopying process" above, that in a "modern" plai n-paper photocopier the image is projected onto
an electrically charged drum or plate, coated with the light-sensitive element selenium. It is in this
drum or plate that a latent and invisible image is created when light from the original document is
directly reflected onto it. This is also consistent with the dictionary definition of photocopying which
refers to a process where a copy is "created on a sensitized surface" using light. This also indicates
that the meaning of "... reproducing the original image via an intermediate ..." as used in the
concession requires the creation of the copy on a se nsitized surface as a "latent image" before the
copy is adhered to the paper.
7.1417 Therefore, the plain meaning of indirect pro cess, as used in the concession, describes an
electrostatic photocopying apparatus, operating by using light to project the original image onto a
light-sensitized surface creating a latent image whic h is subsequently adhered to plain paper using
electrostatically charged powder (toner) and heat to form a final copy of the original image on the
paper.
7.1418 We note that the above definitions of elect rostatic photocopying/xerography match the
evidence presented by the complainants to e xplain the process used by apparatus known as
"analogue photocopiers."
1826 We understand that all of the parties concur that "analogue" electrostatic
photocopying apparatus are unquestionably included within the scope of the concession in HS1996
subheading 9009 12. The complainants describ e analogue photocopying as having the following
characteristics: First, the "reflected light" from the original document has to be immediately used, or
else it disappears. In other words, the copy from the original document must be made immediately.1827
Second, under the above process, the original document is needed each time a hard copy is made. Put
differently, each "flash of light" that illuminate s the original document serves to produce one single
hard copy that outputs from the machine. So, fo r instance, ten copies would need ten "flashes of
light".1828 Third, under the above process, the "reflected light" has only one purpose, that is, to make

1826 Exhibit JPN-35 (providing a graphic description of the process). See also Exhibit EC-66 (also
providing a graphic description of the process). See European Communities' first written submission, para. 371,
fn. 255.
1827 Japan's first written submission, paras. 113-114; Japan's second oral statement, paras. 15-16;
Chinese Taipei's first written submission, paras. 575-584.
1828 United States' first written submission, paras. 15 8-159; United States' second written submission,
para. 111; Japan's first written submission, paras. 109, 113-114; Chinese Taipei's first written submission, paras.
575-584.

an instant "copy" of the original document in the drum or on a plat e, with the consequence that the
image created can never be shared or transferred to another machine or device.
1829 Finally, the image
created in the drum can be manipulated in only one way: by enlarging or reducing the size of the copy
by using adjustments to the lens and the position of the lens.1830
7.1419 The complainants argue that this is the only type of technology covered by the ordinary
meaning of the concession in subheading 9009 12. In particular, Japan points to the singular tense
used to describe original, copy, a nd intermediate to support its view that what is described in the
concession is analogue ph otocopying technology. 1831 However, the European Communities argues
that the ordinary meaning of subheading 9009 12 simply requires the reproduction of the original
image onto the copy via an intermediate and does not exclude the possibility that the image may have
been processed by other devices such as a scanner, before it reaches the drum.1832
7.1420 We do not believe that this interpretative ques tion can be answered by looking merely at the
plain meaning of the text in the absence of context or the object and purpose. In this respect, we will
examine the structure of Chapter 90, to which heading 9009 and subheading 9009 12 belong within
the EC Schedule, and the rest of heading 9009. Additionally, we will proceed to examine other
materials of the HS, raised by the parties, as o ffering context for the interpretation of the ordinary
meaning of the concession. In particular, we will review the language of the 1996 HSEN to heading
9009, which, the complainants claim, confir ms that the scope of the concession in HS1996
subheading 9009 12 is limited to analogue photocopying.
The terms in Subheading 9009 12 in their context
7.1421 The parties refer to several materials within th e HS as context for understanding the ordinary
meaning of the concession in 9009 12 as it appears in the EC Schedule. In particular, the parties refer
to the structure of Chapter 90 of the HS1996 (including heading 9009) in light of the structures and
coverage of Chapters 84 (including heading 8471), and the HSEN for heading 9009. The
complainants contend that all of these materials confirm that the concession in 9009 12 should be
narrowly construed to only apply to the specific type of photocopying technology commonly seen in
"analogue" photocopiers. The European Communiti es, however, argues that nothing in the context
demands such a narrow reading of the scope of the concession.
Arguments of the parties
HS 1996 and CN Heading 9009, 1996 HS EN to 9009, and Chapters 90, 84,
and 85
7.1422 The complainants begin their contextual argum ents by focusing on the structure of HS1996
Chapter 90, which they argue demonstrates that pr oducts with digital technology are not within the
scope of the tariff concessions in this Chapter.
1833 In particular, the complainants point to the

1829 Japan's first written submission, paras. 115-117; Japan's second oral statement, paras. 15-16, 43-
44; Chinese Taipei's first written submission, paras. 575-584; Chinese Taipei's first written submission,
paras. 575-584.
1830 Japan's first written submission, paras. 118-119; Chinese Taipei's first written submission,
paras. 575-584.
1831 Japan's first oral statement, paras. 18-19; Japan's second written submission, paras. 52-53.
1832 European Communities' second written submission, para. 115.
1833 Japan, for example, submits that the relevant headings under Chapter 90 – HS1996 headings 90.01
to 90.10 –, "all refer to analogue optical technologies, an inherent technological distinction that precludes

language of the other headings within Chapter 90 to support their premise, which include products
that depend on "optical," "analogue" and "phot ographic" technologies, instead of "digital"
technologies.
1834 The language of the headings in Chapter 90 are set forth below:
Chapter 90
"Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments
and apparatus; parts and accessories thereof"

Heading 90.01 "Optical fibers ..."
Heading 90.02 "Lenses, prisms, mirrors an d other optical elements ..."
Heading 90.03 "Frames and mounting for spectacles ..."
Heading 90.04 "Spectacles, goggles ..."
Heading 90.05 "Binoculars, monoculars ..."
Heading 90.06 "Photographic ... cameras"
Heading 90.07 "Cinematographic cameras and projectors ..."
Heading 90.08 "Image projectors ...; photographic ... enlarges and reduces"
Heading 90.09 "Photo-copying apparatus incorporating an op tical system or of the contact type and
thermo-copying apparatus."
Heading 90.10 "Apparatus and equipment fo r photographic ... laboratories ... not specified or included
elsewhere in this Chapter ..."

7.1423 The complainants argue that Chapter 90 cove rs optical, photographic, cinematographic ...
instruments and apparatus and that the relevant heading titles all depend on optical and photographic
technologies.1835 The complainants contrast the language of Chapter 90 and its headings with that of
Chapter 84 which covers "Nuclear reactors, boile rs, machinery and mechanical appliances; parts
thereof" and Chapter 85 which covers "Electrical machinery and equipment and parts thereof; sound
recorders and reproducers, television image and sound recorders and reproducers, and parts and
accessories of such articles." 1836 Japan argues that there is a distinc tion between the coverage of
products in Chapter 90 and Chapter 84 based on the underlying type of technology used. 1837 In the
complainants' view there is an inherent technological distinction that precludes products built around
digital technologies from the scope of Chapter 90 which deals with optical or photographic products
and thus it would be unreasonable to construe the terms of heading 9009 12 so broadly as to include a
fundamentally different technology, such as digital technology.1838
7.1424 To illustrate and give further support to the cl aim that Chapter 90 concessions are restricted
and have no relation with "digital technology", Chinese Taipei makes reference to the example of the
different tariff treatment given under the EC Schedule for "digital cameras" in one hand and

products built around digital technologies from the scope of heading 9009." (Japan's response to Panel question
No. 34). In the same vein, see also the United States' first written submission, para. 160.
1834 United States' first written submission, para. 160; Japan's first written submission, paras. 126.
Rather than citing specific language from each of the "relevant" headi ngs under Chapter 90, Chinese Taipei
makes a more general reference to Chapter 90's "title": "Optical, photographic, cinematographic, measuring,
checking, precision, medical or surgi cal instruments and apparatus; part s and accessories thereof." (Chinese
Taipei's first written submission, para. 595).
1835 Japan's first written submission, para. 126.
1836 Chinese Taipei's first written submission, paras. 595-596.
1837 Japan's first written submission, para. 126; see also Chinese Taipei's first written submission,
paras. 596, 598.
1838 United States' first written submission, para. 160; Japan's first written submission, paras. 126-128;
Japan's first oral statement, para. 33; Chinese Taipei's first written submission, paras. 592-598. Chinese Taipei
also sees confirmation to this view on the fact that, unlike HS1996 headings 8471 and 8517, heading 9009 does
not contain a "residual subheading" (Chinese Taipei's first written submission, para. 593).

"photographic cameras" on the other. In the EC Schedule, it argues, "digital cameras" fall under
HS1996 subheading 8525 40, more precisely under tariff item number 8525 40 11 as "still image
video cameras – digital." On the other hand, in the EC Schedule, "photographic cameras" fall under
HS1996 heading 9006.
1839
7.1425 The European Communities rejects the argument that when Chapters 84, 85 and 90 are read
together in context, because Chapter 90 is more "sp ecific," it then follows that it should be interpreted
restrictively. The European Communities claims that it is not aware of any such rule of interpretation
under the HS that would support such an approach. If anything, submits the European Communities,
the fact that Note 1(m) to Section XVI of th e HS expressly excludes Chapter 90 from that Section
(where Chapters 84 and 85 belong) indicates the HS drafters saw a potential overlap between these
three chapters and resolved this by giving preference to Chapter 90, not the other two.1840
7.1426 The European Communities also rejects the complainants' claim that "digital photocopiers" do
not "belong" in Chapter 90 because they sup posedly do not use "optical technology". The
European Communities claims that, in fact, these devices contain a scanner which is itself composed
of an "optical system consisting of lamps, len ses and mirrors." Furtherm ore, HS1996 heading 9009
also includes photocopiers without an optical system, namely the photocopiers "of the contact type,"
mentioned in HS1996 subheading 9009 22.1841 The European Communities argues that there is no rule
or principle whereby any product must be exclude d from Chapter 90 headings just because it uses
"digital technology". 1842 Indeed, the European Communities asser ts that various "optical products
with digital technology" clearly fall under Chapter 90.1843
7.1427 As to the example of the different treatmen t in the EC Schedule between "digital" and
"photographic" cameras, the European Communities submits that in fact HS1996 subheading 8525 40
covers all kinds of "still image video cameras", whether "digital" or "analogue." The European
Communities argues that this is confirmed by the fact that in the ITA, the concession under HS1996

1839 Chinese Taipei's first written submission, para. 597 . We note that, when dealing with the "HS as
context", Chinese Taipei also makes a similar argument, claiming that not only in the EC Schedule, but also
under the HS, "digital" and "photographic" cameras are classified differently, i.e. the former in HS1996 heading
8525 and the latter in HS1996 heading 90.06 (Chinese Taipei's first written submission, para. 620).
1840 European Communities' first written submission, para. 425.
1841 European Communities' first written submission, paras. 376-377.
1842 European Communities' response to Panel question No. 125.
1843 The European Communities submits that the following products are "optical products with digital
technology" that nevertheless fall under Chapter 90: (1 ) "pocket cameras ... controlled by a microprocessor";
(2) "Laser Photoplotter for creating latent printed circ uit board images on photosensitive film, generally from
digital formats ..."; (3) "Laser Phot oplotter for creating images on photose nsitive film, generally from digital
formats ..."; (4) "digital film recorders"; (5) "digital mi croscopes". It further lists the following "medical,
scientific and laboratorial analysis machines" that also incorporate digital technologies but nevertheless fall in
Chapter 90: (6) "digital oscilloscopes"; (7) "sound analysis apparatus"; (8) "spectrum analysers"; (9)
"spectrometers"; (10) "network analysers"; and (11) "pH meters." The European Communities argues that the
evidence that products (1) to (3) fall under heading 9006 is the language of the HS2007 HSEN to subheading
9006 (Exhibit EC-103). It argues that the evidence that product (4) falls under heading 9006 is a 2000 EC
classification regulation and a 2001 US HQ ruling (Exhibits EC-104; EC-105); It argue s that the evidence that
product (5) falls in heading 9011 (which, we note, is more precisely a "micro inspection station system"
incorporating inter alia a "digital CCD microscope") is a 2006 UK BTI (Exhibit EC-106). Finally, the
European Communities offers as evidence in support of its allegation that products (6) to (11) fall, respectively,
under headings 9030, 9027, 9030, 9027, 9031 and 9027, various brochures and two 2007 WCO classification
decisions (Exhibit EC-117). See European Communities' second written submission, paras. 184-185
(commenting on Japan's response to Panel question No . 34) and European Communities' response to Panel
question No. 125.

subheading 8525 40 is preceded by the word "ex", which indicates that the duty-free concession was
limited to only a subset of products within that s ubheading, i.e. only "still image video cameras" that
are "digital". According to the Eur opean Communities, the fact that in this "ITA concession" a term
not present in HS1996 subheading 8525 40 (i.e., th e word "digital" which precedes the phrase "still
image video") was included, combined with the fact that the rest of the text of that HS subheading
was omitted (i.e., the phrase "and other video camera r ecorders"), confirms that the scope of HS1996
subheading 8525 40 includes all kinds of "still video cameras". In the Euro pean Communities' view,
it was the fact that the device was a "still video came ra," not its "digital" nature, that caused it to fall
within the scope of HS1996 subheading 8525 40. Ther efore, the European Communities concludes,
this example does not support the argument that digital products are per se excluded from Chapter
90.
1844
Heading 9009
7.1428 Regarding the breadth of the concessions in HS1996 heading 9009, Chinese Taipei argues
that, unlike headings 8471 and 8517, the wordi ng includes a very limited category of apparatus
(photo-copying and thermo-copying) as well as their pa rts and accessories. Chinese Taipei also notes
that 9009 does not have a residual category. 1845 Japan argues that the sub-grouping of "electrostatic
photocopying apparatus" in 9009 only includes two more detailed six-digit subheadings 9009 11 for
direct process electrostatic photocopying and 9009 12 for indirect process electrostatic photocopying.
Japan submits that the language of the two subhead ings informs the definition of "photocopying" in
the main heading. Additionally, Japan argues that the exhaustive nature of the descriptions in the two
subheadings "makes clear that subheading 9009 12 has no role as a 'catch all' category that captures
any 'photocopying apparatus' using an 'electrostat ic' mechanism other than a 'direct process' one." 1846
Consequently, according to Japan, the terms of subh eading 9009 12 must be interpreted strictly in
accordance with its text.1847
7.1429 The complainants further note that, with r espect to photocopiers, heading 9009 and its
subheadings only apply to those photocopying apparatus incorporating an "optical system." The
United States explains that an "optical system" is a system composed of a "light source", "mirrors"
and "lenses" that allow the optical image of the original to be projected onto the drum (the
intermediate).
1848 Therefore, according to the complainan ts, a product cannot fall within the scope of
9009 12 if it does not use an optical system of a light source, mirrors, and lenses to project the original
onto the drum.1849

1844 European Communities' response to Panel question No. 125 (citing the full text of HS1996 heading
8525 as well of the 1996 HSEN to heading 8525). The European Communities also refers to the language of
HS1996 Chapter Note 1 h) to Chapter 90, claiming that it indistinctively excludes from Chapter 90 all still
image video cameras, whether they are digital or not).
1845 Chinese Taipei's first written submission, para. 593.
1846 Japan's second oral statement, para. 22.
1847 Japan's second oral statement, para. 22.
1848 United States' second written submission, para. 112; United States' second oral statement, para. 37.
1849 See, for example: United States' first written su bmission, paras. 71, 157, 159; United States' first
oral statement, para. 37; United States' second written s ubmission, paras. 111-114; United States' second oral
statement, para. 37; Japan's first wr itten submission, paras. 70-73, 107-122, 158-161 and 207; Japan's first oral
statement, para. 37; Japan's second written submission, paras. 40-41; Chinese Taipei's first written submission,
para. 574-584; Chinese Taipei's second written submission, paras. 299-300, 314, 319; complainants' responses
to Panel question No. 29 (arguing that the WCO endorsed their view that digital c opiers are not photocopiers);
Japan's responses to Panel questions Nos. 124; 131 and 136.

7.1430 The European Communities first argues that the distinctions in the six-digit subheadings
under 9009 for electrostatic photocopying apparatus are exhaustive. According to the European
Communities:
"[A]ll photocopying apparatus with an optical system and an electrostatic print engine
fall within one of those two categories. Since it is beyond dispute that digital copiers
do not operate according to the 'direct process ', it must be concluded that they follow
the 'indirect process.'"
1850
7.1431 Additionally, in rebuttal to the United St ates, the European Co mmunities argues that
"digital copiers", do have "optical systems" as re quired by the terms of the concession, indeed,
according to the European Communities they include not only one, but two "optical systems" (i.e., the
CCD of the scanner and the laser beam). 1851 The European Communities rejects the view that there
can only be one single "optical system" because this term appears in the concession in the singular
form. The European Communities argues that even if the wording of the concession had to be
narrowly interpreted as excluding the use of "more than one optical system", it is possible to consider
that "all the optical elements" used in digital copying constitute a "single system" because they
"operate in a related and interconnected manner in order to accomplish a common function," which in
this case is to make copies. 1852
1996 HSEN to Heading 9009
7.1432 The complainants argue that the 1996 HSEN to heading 9009 provides relevant contextual
material for understanding the concession because it speaks directly to the meaning of the terms of the
concession in 9009 12 for electrostatic photocopying apparatus operating by reproducing the original
image via an intermediate onto the copy (indirect process) and confirms that such a concession is
limited only to machines that use analogue copying technology.1853
7.1433 The complainants claim that the 1996 HSEN to heading 9009 supports their view that the
ordinary meaning of the term "photocopying" in the concession is only related to an analogue
copying process and, consequently, not related to "d igital copying". They attach particular importance
to the 1996 HSEN's definition of what constitutes th e "optical system" that "photocopying apparatus"
must incorporate under the concession. They recall this definition's explanation that an "optical
system", which is comprised mainly of a "light so urce", "lenses" and "mirrors," is used, similarly to
what happens in "analogue photocopiers", to project "the optical image of an original document on to
a light-sensitive surface".1854

1850 European Communities' second written submission, para. 110.
1851 The European Communities' second oral statement, para. 114.
1852 European Communities' comments on the complainants' responses to Panel question No. 124
(citing the definition of "system" from the Merriam-Webster Online Dictionary , as "a group of devices or
artificial objects … forming a network especially for … serving some common purpose.").
1853 See e.g., United States' first written submission, para. 163; Japan's first written submission, para.
74; Japan's first oral statement, para. 30; Japan's s econd written submission, paras. 40, 49 and 163. Japan's
second oral statement, paras. 28-30; Chinese Taipei's first written submission, paras. 617-619; Chinese Taipei's
second oral statement, para. 59.
1854 The United States' first written submission, para. 163; the Unites States' second written submission,
para. 112; Japan's first written submission, paras. 155-161; Chinese Taipei's first written submission, paras.
617-619.

7.1434 Japan further submits that the explanation of "indirect process" in the 1996 HSEN to
heading 9009 is very important to the interpreta tion of the phrase "reproducing the original image
onto the copy via an intermediate (indirect process)" in the concession. The HSEN states that:
"In the indirect process, the optical image is projected onto a drum (or plate) coated
with selenium or other semiconducting substa nce charged with static electricity.
After the latent image has been devel oped by means of a powdered dye, it is
transferred onto ordinary paper by applying an electrostatic field and fixed to the
paper by heat treatment."
1855
7.1435 Japan argues that this explanation thus confirms Japan's reading of "reproducing" (as used in
the concession) in the sense of "proj ecting" the original image. It further confirms Japan's reading of
the concession term "an intermediate" as meaning th e photosensitive "drum (or plate)." Japan argues
that the HSEN describes a process whereby the optical image is projected immediately onto the
intermediate rather than converted into digital data that can be stored, manipulated, or in other ways
processed before being used.1856
7.1436 Japan asserts that the language of the 1996 HSEN to heading 9009, which gives
"very specific" contextual guidance for exactly wh at "via an intermediate" in HS1996 subheading
9009 12 really means, quite specifically explains th at "the optical image is projected onto a drum (or
plate)" and that after the "latent image has b een developed" on the photosensitive drum, that
latent image "is transferred onto ordinary paper." Japan concludes that this language is entirely
consistent with its interpreta tion of HS1996 subheading 9009 12 and largely at odds with the
European Communities' broad inte rpretation of this concession as allowing "a wide range of
technologies requiring multiple 'intermediaries,'" whic h do not fit the descriptions contained in the
HSEN.1857
7.1437 The European Communities claims that the 1996 HSEN to heading 9009 is of limited
probative relevance to this case because besides not being binding under the HS, this particular EN
was drafted well before "digital copiers" came into existence. The European Communities asserts that
the HSEN to the HS1996 heading 9009 reproduces the wo rding of the EN to that heading of the 1988
version, which in turn was based upon the EN to the Brussels Nomenclature, going back as far as
1966.1858 The European Communities further argues that the descriptions of the specific types of
machines included in the group of photocopying apparatus in the 1996 HSEN to heading 9009 does
not purport to be exhaustive and does not exclude th e possibility that there may be other types of
"photocopying apparatus" belonging to the same "group". 1859 With respect to the "optical system" the
European Communities argues that "digital copiers" meet each and every element of the description in
the HSEN First, because in a digital copier the optical image of a document is projected on to a
"light-sensitive surface": the CCD array. Sec ond, because this is done by means of an

1855 Japan's first written submission, para. 162 citing Vol. 4 Harmonized Commodity Description and
Coding System, Explanatory Notes (2nd ed. 1996), at p. 1592. (Exhibit JPN-23).
1856 The United States' first written submission, para. 163; the Unites States' second written submission,
para. 112; Japan's first written submission, paras. 155- 161 and 163; Chinese Taipei's first written submission,
paras. 617-619.
1857 Japan's first written submission, paras. 162-163; Japan's first oral statement, para. 30; Japan's
second oral statement, paras. 31-32.
1858 European Communities' first written submission, para. 381 and fn. 202.
1859 European Communities' first written submission, paras. 381-384; European Communities' second
written submission, paras. 116-117 and 186-191 (commenting on the complainants' responses to Panel question
No. 35(b)); European Communities' second oral statement, para. 119. See also Exhibit EC-71, which
reproduces the different versions of this HSEN.

"optical system". Last, because "it is beyond disput e" that digital copiers include "components for the
developing and printing of the image".
1860
7.1438 The complainants reject the European Communities view that the language of the 1996 HSEN
to heading 9009 is "largely obsolete" and thus of lit tle probative use. Even if true that the original
version of the HSEN to heading 9009 was drafted in the 1960s, they wonder why in editions of the
HS that were prepared after "digital copiers" were prevalent on the market parties to the HS
(including the European Communities) did not modify the language in the HSEN to heading 9009 in
order to cover "digital copiers".
1861 Japan further argues that regardless of whether the HSEN is
merely "illustrative", "digital copying" cannot fall under the language of HS1996 heading 9009 and
subheading 9009 12 because it does not operate thr ough indirect process electrostatic photocopying
that involves projecting an optical image onto a drum or plate, and then making a photocopy onto
plain paper from the photosensitive drum or plate, as the 1996 HSEN to heading 9009 specifies.
1862
Consideration by the Panel
7.1439 We recall that the Appellate Body has confirme d that the HS may provide additional relevant
context to the interpretation of a given tariff concession. 1863 The parties all agree that the 1996
version of the HS, on which the concession in subhe ading 9009 12 in the EC Schedule is based, is a
relevant document of the HS to provide contex t for the ordinary meaning of that concession. 1864 The
Panel finds, therefore, that HS1996 Chapter 90 and other Chapters of the HS, HS1996 heading 9009,
and other parts of the HS, such as the explanatory notes are relevant context for determining the scope
of the meaning of the terms used in the concession.
HS1996 Chapter 90 and Chapters 84 and 85
7.1440 The Panel understands that the complainants' vi ew that HS1996 Chapter 90 is limited to
optical and photographic technology comes from the wording of the Chapter heading itself, which
specifically refers to "[o]ptical, photographic, cinematographic, measuring, checking, precision,
medical or surgical instruments and apparatus; parts and accessories thereof." We also note that
GIR 1 provides that the titles of Sections, Chapters and sub-Chapters "are provided for ease of
reference only" and that "for legal purposes, classification shall be determined according to the terms
of the headings and any relative Section or Chapter Notes...".
1865
7.1441 The European Communities has provided evidence to the Panel in the form of its own and in
some instances the United States' classification practice, some decisions from the WCO and the

1860 The European Communities' first written submission, paras. 382-384.
1861 See. the United States' response to Panel question No. 35(b); Japan's first written submission,
para. 74; Japan's first oral statemen t, para. 30; Japan's second written submission, para. 40. Chinese Taipei's
first written submission, paras. 617-619; Chinese Taipei's second oral statement, para. 59.
1862 Japan's second written submission, para. 59.
1863 Appellate Body Report on EC – Computer Equipment , para. 89 and Appellate Body Report on
EC – Chicken Cuts, paras. 196 and 199.
1864 The parties' responses to Panel question No. 132 (arguing that the HS1996 applied at the time of
the concession and that the HS2007 and the Explanatory Notes thereto are neither 'context' under Article 31(2)
of the Vienna Convention, nor an element 'to be taken into account together with the context', under
Article 31(3) of the Vienna Convention).
1865 GIR 1 provides that "[t]he titles of Sections, Chapters and sub-Chapters are provided for ease of
reference only; for legal purposes, cla ssification shall be determined according to the terms of the headings and
any relative Section and Chapter Notes and, provided such headings or Notes do not otherwise require,
according to the following provisions."

HSEN for heading 9006 to demonstrate that Chapter 90 does indeed cover some digital
technologies.
1866
7.1442 It is not clear to us that the complainants have sufficiently demonstrated that HS1996
Chapter 90 is exclusively limited to optical technology. However, nor has the European Communities
sufficiently demonstrated that Chapter 90 includes a variety of technologies. We do note that the
Chapter titles of Chapter 84 and 85 are certainly broa der than that of Chapter 90. While the titles of
Chapter 84 and 85 do refer to some specific technologies, such as nuclear reactors, they also refer to "
machinery and mechanical appliances " and "electrical machinery and equipment." This leads us to
believe that the HS drafters knew how to be broadly inclusive when they intended to and that they did
not do so in the title to Chapter 90. While we cannot conclude based on this element alone that
HS1996 Chapter 90 excludes all digital technology, we do recognize that the Chapter Title is worded
narrowly and that, subject to the limitation in GIR 1 that the Chapter titles ar e for ease of reference
only, this can inform our interpretation of the headings therein.
7.1443 Finally, we consider that the discussion con cerning the different HS Chapters in which
"digital cameras" and "photographic cameras" are classified –HS1996 Chapters 84 and 90
respectively- to be helpful to a certain extent. We believe that a lengthy analysis of the debate
between the parties on classification of those cameras
1867 will not aid us in providing a positive
resolution to the dispute, because, in our opinion, the resolution of that classification question would
not solve the question of the scope of subheading 9009 12. We do note that all the parties accept,
with respect to the example of cameras, that two products which perform substantially the same
function, but utilize different technologies, are classifiable in different headings of different Chapters.
Heading 9009
7.1444 We note that, in the EC Schedule, electro static photocopying apparatus operating by
reproducing the original image via an intermediate onto the copy (indirect process) is a dutiable
concession related to one of the sub-set of machines belonging to a larger group of other machines
falling under HS1996 heading 9009. In partic ular, heading 9009 covers two types of
copying apparatus: "photocopying apparatus incorpor ating an optical system or of the contact type"
and "thermo-copying apparatus". Thus photocopying apparatus that fall under heading 9009 that are
not of the contact type must incorporate an optical system.1868
7.1445 With respect to the term "optical system" as used in heading 9009, we note that the
Encyclopaedia Britannica explains that an optical system:
"consists of a succession of elements, which may include lenses, mirrors, light
sources, detectors, projection screens, reflecting prisms, dispersing devices, filters
and thin films, and fibre-optics bundles."
1869
We also note that the Explanatory Note to HS1996 heading 9009 confirms the definition above when
it refers to an optical system "comprising mainly a light source, condenser, lenses, mirrors, prisms or

1866 European Communities' first written submission, paras. 397-399; European Communities' response
to Panel question No. 29; European Communities' second written submission, paras. 161-175.
1867 These include: whether HS1996 subheading 8525 40 covers "digital" and "analogue" video
cameras.
1868 We note that neither the complainants nor the European Communities has claimed that the ADP
MFMs in question are "contact type" photocopiers.
1869 "optics" (2010). In Encyclopædia Britannica. last viewed June 09, 2010, from Encyclopædia
Britannica Online: http://www.britannica.com/EBchecked/topic/430511/optics.

an array of optical fibres."
1870 Therefore, the Panel finds that in the context of HS1996 subheading
9009 an optical system, is a system composed of the a bove elements that is used to project the optical
image of the original onto a light-sensitive surface.

7.1446 In heading 9009, photocopying apparatus are di vided into two categories, each of which are
further subdivided in six-digit subheadings with in them. First is "electrostatic photocopying
apparatus" which has two six-digit subheadings , i.e. 9009 11 and 9009 12. As noted before,
subheading 9009 11 covers those electrostatic phot ocopying apparatus operating by reproducing the
original image directly onto the copy (direct process), while subheading 9009 12 covers those
operating by reproducing the original image via an in termediate onto the copy (indirect process). The
second grouping of photocopying apparatus are "[o] ther photocopying apparatus"; within this
category there are also two six-di git subheadings for photocopying a pparatus incorporating an optical
system (9009 21) and for photocopying apparatus of the contact type (9009 22). Therefore, the
structure of heading 9009 is such that machin es under it are divided in subgroups and further
subdivisions based on descriptions that refer to the copying technology they use. In other words, how
these machine make copy is a vital element of the structure and logic of the concessions under this
heading and, consequently, also a crucial element that informs their scope. This view is confirmed by
the use in these two subheadings of the term "ope rating by", which denotes the intention to explain
how these machines "work." 1871 More importantly, we observe that heading 9009 does not make use
of residual categories in the form of "other" categor ies, which strongly suggests to us that the heading
is meant to cover very specific forms of producing a copy.
7.1447 We agree with the complainants that this structure of the head ing leads to the conclusion that
subheadings 9009 11 and 9009 12 are both limited a nd exhaustive. First, we cannot accept the
European Communities' proposition that everything not "direct process" is necessarily, therefore
"indirect process." The subheadings describe particular processes with specificity, which supports the
conclusion that these subheadings are not to be br oadly construed. At the same time neither
subheading refers to itself as a residual or "other" category. Had the drafters intended to include
under 9009 12 all forms of electrostatic photocopyi ng which were not "direct", they would have
described the category as "other", which is the nor mal practice throughout the HS. Therefore, we
cannot conclude that "indirect process" in th e concession in subheading 9009 12 simply means all
electrostatic photocopying apparatus not included in subheading 9009 11. The concession must have
meaning, and for an electrostatic photocopying appa ratus to fall within the scope of the concession in
subheading 9009 12 it must produce photocopies by using an optical system and via an intermediate
(i.e., indirect process).
7.1448 Additionally, when the terms of the subheading 90 09 12 are seen in the context of the rest of
the heading, we consider that "indirect process" phot ocopying entails a very specific process in which
the optical system has a very precise role, i.e. to reflect the image of the original document directly
onto an intermediary, generally an electrostatic drum , in the form of a latent image which is then,
from this drum, transposed and fixed onto ordinary paper using electrostatically charged powder and
heat. We further note that none of the definitions submitted to us with respect to "photocopying", or
any other related terms, mention "light" in associ ation with any purpose ot her than producing an
"immediate" latent image of the original. No referen ce is made, e.g., to the use of light as part of the

1870 (Exhibit JPN-23).
1871 In this regard we note that the transitive verb "operate" means "to cause to function: work" (The
Merriam-Webster Online dictionary defines "operate" as "transitive verb 1 : bring about, effect; 2 a : to cause to
function : work b : to put or keep in operation; 3 : to perform an operation on; especially : to perform surgery
on" ("operate." Merriam-Webster Online Dictio nary. 2010. Merriam-Webster Online. 31 May
2010 <http://www.merriam-webster.com/dictionary/operate>).

digitalization of the original document. This indi cates to us that under the concession at issue, the
meaning of "optical system" and "intermediate" are incompatible with the an interpretation that would
see these terms as including the use of a scanner
1872 or of an even more indirect process where the
image is projected onto the drum by something other th an the optical system. Again, we consider that
this directs us to read these two terms ("optical system" and "intermediate") as having very specific
meanings that limit them to the analogue copying process described above.
7.1449 Based on the foregoing, we conclude that the phrase "... reproducing the original image via an
intermediate ...", as used in the concession, indicates that "indirect process" electrostatic photocopying
requires the apparatus to use an optical system to project the original image directly and immediately
onto a light-sensitized surface creating a latent image (in an electrostatically charged drum or on a
plate) which is subsequently adhered to plain paper using electrostatically charged powder (toner) and
heat to form a final copy of the original image on the paper.
1996 HSEN to Heading 9009
7.1450 We begin with the parties' arguments on the relevance of the 1996 HSEN to heading 9009.
We disagree with the European Comm unities that this HSEN is irrelevant. In fact, we consider it
valuable contextual material that confirms our textual conclusions above on the scope of the
concession at issue. While it is true that, as any HSEN, the 1996 HSEN to heading 9009 is not
binding under the HS and may have less probative va lue than other binding HS material, such as the
texts of the headings themselves and HS Chapter or heading Notes, this does not mean that, by
definition, HSENs do not have probative value at all under the Vienna Convention. In fact, as stated
by the Appellate Body in EC – Chicken Cuts, the "probative value" of HS material has more to do
with "how relevant" such material is "to the inte rpretative question at issue" than necessarily with the
fact that this material is binding or not. Therefor e, "it cannot be excluded that an Explanatory Note
that directly addresses a given interpretative question will be more probative than a Chapter Note that
does not relate specifically to that interpretative question"
1873, to the extent that the HSEN provides
further clarifications and does not contradict the Ch apter Note. We consider that the 1996 HSEN to
heading 9009 at issue here falls exactly in the kind of situation described in the above statement from
the Appellate Body. By defining precisely various terms of the concession in HS1996 subheading
9009 12 (e.g. what is an "optical system" and how it works and, more importantly, what is "indirect
process"), this HSEN "directly addresses" the "int erpretative question" before us: the scope and
meaning of the concession under 1996 HSEN to heading 9009. We thus conclude that 1996 HSEN to
heading 9009 provide us with a very high probative value.
7.1451 The language of Part (A)(1) starts by reproducing verbatim the language of HS1996
subheadings 9009 11 and 9009 12 and then it defines what "direct" and "indirect" processes are. We
consider that this means, at least with respect to "indirect process", that the definition in the HSEN is
rather exhaustive. We note that in this defi nition no reference is made to anything that would
resemble the digital copying process (e.g. the digi talization process through a scanner, the saving of
the data in the memory of the machine before bei ng printed), other than the use of an electrostatic
process to print the image (and, even in this case, the printing is done differently by reconstructing the

1872 We note that while a scanner might have within it an optical system, it is not itself an optical
system and it does not use the optical system to project the original image onto the drum, but rather to digitalize
the original image and store it as data. See How Scanners Work (Exhibit EC-65).
1873 Appellate Body Report on EC - Chicken Cuts, para. 224, fn. 431.

digital image onto the drum), which can be used in other technologies that could be classified under
other headings.
1874
7.1452 We further recall our observation above that the "i ncorporation" of an "optical system" is part
of the description in the concession. This means that an "optical system" is part of the understanding
of what constitutes an electrostatic photocopying appa ratus using the indirect process and, ultimately,
of what the scope of the concession is. We recal l our conclusion above that heading 9009 indicates
that the required "optical system" relates to the combination of, inter alia, a "light source", mirrors
and lenses that are necessary elements to the an alogue copying process, so as to allow the projection
of the optical image of the original onto the elect rostatic drum. We consider that the 1996 HSEN
confirms such an understanding not only by defining what are the main components of the
"optical system" ("a light source, a condenser, lenses , mirrors, prisms or an array of optical fibres"),
but also, and more importantly, by explaining what is its purpose and how it works: to "project[] the
optical image of an original document on to the light-sensitive surface."
7.1453 Given the forgoing considerations, we consider that the context provided by the language of
the 1996 HSEN to heading 9009, furthers our unde rstanding of the plain text of the terms of
subheading 9009 12 in the EC Schedule. Reading the concession in its context with respect to the rest
of the relationship between Chapters 90, 84, and 85; based on the structure and scope of heading
9009, and given the explicit and direct references to the relevant terms in the 1996 HSEN to heading
9009; we conclude that the ordinary meaning of electrostatic photocopying apparatus operating by
reproducing the original image via an intermedia te onto the copy (indirect process) in HS1996
subheading 9009 12, is limited to the very specifi c "analogue" photocopying process described in the
HSEN.
Object and purpose
7.1454 The parties provided no specific additional argumentation on the object and purpose of this
tariff concession, outside their more genera l arguments on the object and purpose of the WTO
Agreement and the GATT 1994.
7.1455 We recall our finding in paragraph 7.547 a bove, that the object and purpose of the WTO
Agreement and the GATT 1994 is to ensure the security an d predictability of mu tually advantageous
and reciprocal tariff reductions. We see nothing in our understanding that the subheading 9009 12 in
the EC Schedule is limited to the type of tec hnology explicitly described therein, that would
contradict that object and purpose of the WTO Agreement and the GATT 1994.
Subsequent practice
Arguments of the Parties
7.1456 The European Communities presents argumentation on the classification practice of itself,
the complainants, and other Members which it argu es supports its position that digital copying is a
form of photocopying within the meaning of HS1996 heading 9009, and more specifically subheading
9009 12. In particular, the European Communitie s mentions a 1995 Classification Regulation from
the Commission, the challenged measures, and th e European Court of Justice judgment in the Kip

1874 For example, we note that all parties agreed that the print engine (or print module) contained in the
products at issue, might also be used as a component in other technologies that would not connect to a computer
and therefore not be classifiable in subheading 8471 60.

case.
1875 The European Communities also presents examples of purported practice by the United
States and Chinese Taipei of classifying digital copiers in subheading 9009 12. 1876 Finally, the
European Communities also cited discussions over the scope of subheading 9009 12 in the WCO,
which it argues evidences that the position of the co mplainants' put forward in this dispute was not
shared by many other WTO Members.1877
7.1457 The United States disputes the European Communities' interpretation of its customs
classification practice with respect to digital copiers.1878
7.1458 Japan rebuts the arguments of the European Co mmunities that it had a consistent practice by
bringing up a declaration from the European Communities made in the context of laying out the scope
of coverage of an anti-dumping duty order, that digital copying is not photocopying.1879
Consideration by the Panel
7.1459 The Panel recalls that much of the material re ferenced by the European Communities as
subsequent practice demonstrating a common, consistent and concorda nt practice of the Members is
similar or identical to that submitted in relati on to the discussion of subheading 8471 60. We also
note that the anti-dumping order submitted by Japan, if it were even evidence of subsequent practice,
would only serve to inform that within the European Communities there has been inconsistency.
7.1460 Therefore, we reiterate our conclusion in paragraph 7.1351 above that the documents
presented to us are by no means "consistent, co mmon and concordant", and we cannot discern a
pattern implying the agreement of the parties to the WTO Agreement and the GATT 1994 regarding
the interpretation of the concession in 9009 12 from these documents.
7.1461 With respect to the discussions at the WCO, we note that they took place between 1998 and
2003 and that there was significant disagreement among the Members as to the parameters of HS1996
headings 8471 and 9009 and whether there was any ove rlap. In fact when the issue came to a vote
there was a tie.
1880 Therefore, while these discussions do s how that the views of the complainants
were not shared by many WTO Members, they also show that the position of the European
Communities, was also not shared by many WTO Members. Therefore, we do not see how these
discussions could reflect the common intentions of the parties and inform our interpretation.
1881

1875 European Communities' first written submission, paras. 385-389.
1876 European Communities' first written submission, paras. 390-396; European Communities' second
written submission, paras. 121-124.
1877 European Communities' first written submission, paras. 397-399.
1878 United States' first oral statemen t, paras. 9 and 11; United States' second oral statement, para. 42
(arguing that "[t]he EC in fact points to nothing more than two opinions predating the ITA negotiations — while
ignoring the large number of opinions before the Pa nel in which US Customs and Border Protection (CBP)
treated MFMs as "input or output units" of subheading 8471 60" and referring to the 16 CBP rulings between
1996 and 1999 in Exhibits EC-73 and EC-74 classifying MFMs in 8471.60).
1879 Japan's second written submission, para. 60.
1880 WCO's letter of 29 September 2009, para. 27 (explaining that, "[w]hen the matter was put to a roll-
call vote, 33 delegates voted in favour of the proposition that "photocopying" was not limited to the projection
of an image onto a photosensitive surf ace and that present heading 90.09 di d cover digital copying, while 33
delegates voted against these propositions. There was one abstention.").
1881 We also note that one of the parties to the di spute, Chinese Taipei, is not a Member of the WCO
and could therefore not participate in those discussions.

Other Arguments

Arguments of the Parties
7.1462 The European Communities cited the negotiating history of the ITA and the ITA II as
supplementary means of interpretation of the concession in 9009 12. 1882 We also note that Japan and
Chinese Taipei have cited to material from the HS2007, in cluding an HSEN, with respect to their
arguments regarding the scope of the concession fo r electrostatic photocopying apparatus "operating
by reproducing the original image via an intermediate onto the copy (indirect process)" under HS1996
subheading 9009 12. In particular, they argue that the heading 8443 in the HS2007 as well as the
HSEN to that heading provide other interpretative guidance to determining the scope of the original
concession in 9009 12.1883
7.1463 We note that the United States and the European Communities have argued that neither the
HS2007 nor the 2007 HSEN to heading 8443 could ser ve as any sort of interpretative tool under
Articles 31 and 32 of the Vienna Convention to an understanding of the common intentions of the
Members with respect to the meaning of the concession in subheading 9009 12 in 1996. 1884 While
rejecting the use of these tools in the instant ca se, the European Communities does believe that the
HS2007 and the 2007 HSEN could, in certain cases, be relevant as "supplementary means of
interpretation" for the interpretation of an HS 1996 heading-based concession under Article 32 of the
Vienna Convention if both old and new headings had identical wording and all the relevant contextual
elements (e.g. Section, Chapter and headi ng Notes; potentially overlapping headings and
subheadings) had likewise been carried over unchanged from one version of the HS to the next. 1885
The United States, however, rejects even the theo retical possibility, raised by the European
Communities, that subsequent versions of the HS following the version under which WTO tariff
concessions were based on could qualify as " other supplementary means of interpretation" under
Article 32 of the Vienna Convention. The United States considers that modifications to the HS,
agreed upon nearly ten years after the relevant c oncessions were made, provide no insight into the
meaning of those concessions.1886
Consideration by the Panel
7.1464 The Panel recalls that recourse may be had to suppl ementary means of interpretation in order
to confirm the meaning resulting from the application of Article 31 of the Vienna Convention, or to

1882 European Communities' first written submission, paras. 397-406.
1883 Japan's first written submission, paras. 165-168; Japan's second written submission, paras. 71-73;
Japan's comments on the European Communities' respon se to Panel question No. 134; Chinese Taipei's first
written submission, paras. 171 and 636-638; Chinese Taipei's response to Panel question No. 134.
1884 United States' response to Panel questions No. 132 and 134; United States' comments on the
European Communities' response to Panel question No. 134 (also noting, in both its response and comment to
the EC response to Panel question No. 134, that the fact that WTO Members' Schedules of Concessions have not
yet been certified in HS2007 nomenclature indicates the lack of agreement on the relationship between the
HS2007 and Members' Schedules); European Communitie s' first written submission, para. 408; European
Communities' response to Panel questions No. 35(b) and 134.
1885 European Communities' response to Panel question No. 134.
1886 United States' response to Panel questions No. 132 and 134; Unites States' comments on the
European Communities' response to Panel question No. 134 (also noting, in both its response and comment to
the EC response to Panel question No. 134, that the fact that WTO Members' Schedules of Concessions have not
yet been certified in HS2007 nomenclature indicates the lack of agreement on the relationship between the
HS2007 and Members' Schedules).

determine the meaning when the interpretation acco rding to Article 31 leaves the meaning ambiguous
or obscure or leads to a result which is manifestly absurd or unreasonable.
1887
7.1465 With respect to the landscape papers submitted as part of the negotiations of the ITA, we
recall our determination in paragr aphs 7.581 above, that considerati on of "landscape papers", which
were only reviewed by a subset of the negotiatin g ITA participants (the "Quad" members, in
particular) and were not circulated at any point in time prior to this dispute, should not have any
bearing on our interpretation of the concessions ar ising under the ITA, that were subsequently
incorporated into ITA participants' Schedules.
7.1466 Regarding Japan's proposals during the ITA II negotiations, we recall our finding in
paragraph 7.587 above that we shoul d not give much weight to statements made in the context of
negotiations for a separate, successor agreement that has not yet been concluded, and where the extent
of progress towards reaching an agreement is unclear.
7.1467 Finally, we recall our conclusion in paragraph 7.1367, that the HS2007 and the 2007 HSEN to
heading 8443 cannot serve as means of supplementa ry interpretation for the concessions in HS1996
8471 60 and 9009 12.
Conclusion on ordinary meaning
7.1468 The Panel notes that the context examined, in pa rticular the 1996 HSEN to heading 9009,
informs the view that the "indirect process" utilized by an electrostatic photocopying apparatus, that is
covered under subheading 9009 12, is identical to th e process utilized by "analogue photocopiers" to
make photocopies. We thereby conclude that the or dinary meaning of the concession for electrostatic
photocopying apparatus operating by "indirect proc ess" in subheading 9009 12 of the EC Schedule,
seen in context and in light of the object and purpose of the Agreement, is limited to the photocopying
process used by "analogue photocopiers".
(ii) Are ADP MFMs covered by the concession in Subheading 9009 12?
7.1469 Now that we understand the scope of the ta riff concession set forth in HS1996 subheading
9009 12 of the EC Schedule, we must determine whether the products at issue, ADP MFMs, are
covered by the scope of this concession, which carries with it a 6 per cent ad valorem duty. If
ADP MFMs are covered by the scope of this c oncession, then the European Communities may be
entitled, as it argues, to assess a 6 per cent ad valorem duty on some of these products rather then the
duty-free treatment the complainants claim these products deserve.
7.1470 We note that the parties have explained the process by which ADP MFMs create copies. The
United States and Japan describe a digital copier as a digital device with an input unit (a scanner unit)
and an output unit (a printer unit that allows the digital output from the device to be printed).1888 They
submit that a document is converted into digital info rmation and that the print unit allows that digital
information to be printed in paper form. The Un ited States explains that it is the scanner component
that creates the digital master file of the document by converting points of light into electrical signals
and then digital data. Further, the United States expl ains that it is the printer component that converts
the file into one or more prints. Both the Un ited States and Japan submit that the MFM scanner uses
light only once, to convert the original document into digital data. Japan and Chinese Taipei explain

1887 See para. 7.65 above.
1888 See, e.g., United States' first written submission, para. 157-160; United States' second written
submission, paras. 111-112; Complainants' response to Panel question No. 79.

that digitalization is done through a "charged c ouple-device" (CCD) array consisting of numerous
diodes that convert photons of light into electrical impulses that become the digital signal. The
digital data can then be transmitted in order for such data to be printed. Once the image is digitalized,
as many prints as necessary can be made. According to Chinese Taipei, an MFM then uses a laser to
transmit the digital data onto an electrostatic drum to form an image of the original document, this
image is then printed using an electrostatic print engi ne to transfer this image by means of toner to a
carrier media such as paper.
7.1471 The European Communities explains that when th e image is placed on the glass plate of the
digital photocopier, it is illuminated and reflected by an angled mirror to another mirror and that there
can be more than two mirrors. It explains that each mirror is slightly curved to focus the image it
reflects onto a smaller surface. The last mirror then reflects the image onto a lens. The lens focuses
the image through a filter on the "charged-couple de vice" (CCD) array which converts the original
image into electrical signals. The light source thus projects the image of the original document onto
the "charged-coupled device" (CCD) , which converts it into electrical signals and creates a digital
image. Through a laser beam the digitalised imag e is transferred to an "electrostatic drum".
Subsequently, the image is developed and printed.
Arguments of the parties

7.1472 The European Communities contends that ADP MFMs which have an electrostatic print
engine and have a copying function that is not secondary or is at least equivalent to the other functions
of the apparatus are electrostatic photocopying apparatus within th e scope of the dutiable concession
in HS1996 subheading 9009 12. The Eur opean Communities considers that because light is used in
digital copying, albeit in different ways than in analogue photocopying, it follows that the latter
process is also "photocopying" under the terms of the concession. The European Communities further
argues that in this latter process, when the origin al document is digitalized before the image is
(re)created in the drum, not only one, but two "opt ical systems" are used, namely, the CCD of the
scanner and then the "laser". Finally, the European Communities contends that, consistent with the
terms of the concession, the digital process involves the use of not only one but various
"intermediates" working together: a scanner, the laser and finally the "electrostatic drum". As the
terms of the concession at issue have a broader mean ing than that professed by the complainants, the
European Communities concludes that they also include digital copying as a form of "indirect process
electrostatic photocopying", despite the technol ogical difference between this process and the
analogue copying process.
7.1473 The complainants argue that because ADP MFMs copy using a digital technology far
different from "indirect process electrostatic photocopying", and because they have other functions
unrelated to copying, these products can never fall under the dutiable concession under HS1996
subheading 9009 12. They contrast their understandi ng of what electrostatic photocopying using an
"indirect process" means with the way copies are made using a "digital copying" process. They
consider that the differences between these two pro cesses confirm that "digital copying" can never be
covered by the concession at issue.
7.1474 In particular, the complainants focus on the diffe rent manner in which light is used by these
two processes to support their views that ADP MFMs are not within the scope of the concession in
subheading 9009 12.
1889 Although they agree with the European Communities that light is used and
needed in "digital copying", they argue that it is used with a very different purpose in digital copying;

1889 See, e.g., United States' first written submission, para. 158 and Exhibit US-90.

i.e., to enable the CCD-based scanner to convert the original document into "digital data", which, if
needed, can then be printed by the machine's electrostatic print engine.
7.1475 Given that that the meaning of "photocopying" is limited to reflecting an optical image of the
original onto the electrostatic drum to produce the latent image and not to collect digital data, the
complainants contend that what digital copiers do is not photocopying within the meaning of heading
9009. Likewise, because the purpose of the optical sy stem as described in heading 9009 is to project
the original image onto an electrostatic drum, the co mplainants argue that neither the "scanner" nor its
CCD component can be understood as making up an "optical system" as is meant by the terms of the
concession. Similarly, they also assert that reading the concession properly means that the
"intermediate" refers to the electrostatic drum, which has the latent image projected onto it and then
transfers it to the paper using electrostatically ch arged powder (toner). Therefore, according to the
complainants neither the "scanner unit" nor the "laser printer unit" that are necessarily used in "digital
copying" can be seen, in isolation or conjunction, as the "intermediate" the concession describes. This
confirms, they submit, that the concession is limited by a single and specific "intermediate", i.e., the
"electrostatic drum".
1890
Consideration by the Panel
7.1476 The Panel starts by recalling that it is undisputed that all ADP MFMs at issue only make
copies digitally and that they do this using a scanner unit. As a consequence, these machines never
use the analogue copying process, which, as we have concluded above, characterizes indirect process
electrostatic photocopying under the concession at issue. We recall that we have concluded that the
ordinary meaning of the terms of the concession for "indirect process electrostatic apparatus", seen in
its proper context and in light of the object and purpose of the Agreement, in fact, does not include
digital copying.
7.1477 Based on our review of the submissions and th e evidence before us, we understand that ADP
MFMs make copies via a process commonly known as "digital copying":
1891 which involves the use
of a "scanner", which is a device or component that allows the conversion of information, such as text
and images, into digital data. 1892 Scanners always have an "ima ge sensor" as their core component,
generally a charge-coupled device (or, simply "CCD"). 1893 In "digital copying" , when the original

1890 See, for example: United States' first written su bmission, paras. 71, 157, 159; United States' first
oral statement, para. 37; United States' second written s ubmission, paras. 111-114; United States' second oral
statement, para. 37; Japan's first wr itten submission, paras. 70-73, 107-122, 158-161 and 207; Japan's first oral
statement, para. 37; Japan's second written submission, paras. 40-41; Chinese Taipei's first written submission,
para. 574-584; Chinese Taipei's second written submission, paras. 299-300, 314, 319; complainants' responses
to Panel question No. 29 (arguing that the WCO endorsed their view that digital c opiers are not photocopiers);
Japan's responses to Panel questions Nos. 124; 131 and 136.
1891 Exhibit JPN-35 (providing a graphic description); see also Exhibit EC-66 (containing a graphic
description included in a 1998 non-paper allegedly tabl ed by Japan to the CITA). See European Communities'
first written submission, footnote 255 to para. 371.
1892 In other words, scanners are fundamental to the "digitizing" of the original document, i.e. the
"capturing an analogue signal in digital form." Broadly speaking, "digitizing" means "the representation of an
object, image, sound, document or a signal (usually an analogue signal) by a discrete set of its points or samples
[,which occurs when these diverse forms of information] ... are converted into a si ngle binary code," i.e. a
sequence of 0s and 1s. ( Wikipedia, "Digitalizing", http://en.wikipedia.org/wiki/Digitizing#cite_note-2 (visited
on 13 May 2010)).
1893 We observe that the CCD technology was invented in 1969 by Willard Boyle and George E. Smith,
two scientists from AT&T Bell Labs. ( Wikipedia, http://en.wikipedia.org/wiki/Charge-coupled_device). The
CCD is "a collection of tiny light-sensitive diodes, which convert photons (light) into electrons (electrical
charge)." How Scanners Work (Exhibit EC-65).

document is placed on the glass plate of the machine, a lamp is used to illuminate the document. The
image of the scanned document then reaches the CCD array of the scanner used in the machine
through a series of mirrors, filters and lenses
1894 and is then converted into electrical signals
(digital data) and saved as a "digital file." This "d igital data" is then stored as a "digital file" and
arranged as "page data" which, through a "raster im age processor" (or "RIP"), is then broken down
"into an array of tiny dots" (so it can be used by the machine's laser). Once this is done, this
"page data" is sent to the "laser print unit" of the machine, which is itself composed of a
"laser beamer", a "moveable mirror" and "lenses". The "laser" receives the data (i.e., the tiny dots that
make up the text and images) and through the "m oveable mirror" and "lenses" "reconstructs" or
"recreates" the original document that was scanned in the beginning of the process by beaming pulses
of "laser light" onto an electrostatic drum. From this point onwards, the operation proceeds in the
similar manner as described above in the case of "analogue photocopiers."
1895 There is however an
important overall difference in the way machines using these two processes output hard copies:
unlike the case of "analogue photocopying", in the case of "digital copying" there is no need to repeat
the operation for each desired number of copies because, after a single scanning of the
original document, a "digital file" is made and stor ed in the machine thus allowing the printing of as
many copies as the memory of the device allows. The original document is thus no longer necessary
after the scanning.
1896
7.1478 With respect to CCD-based scanners, while it is tr ue that these devices indeed contain a "light
source", "mirrors" and "lenses", the mere fact that they have such components does not make them an
"optical system" within the meaning of the HSEN and heading 9009. This is confirmed when the
definition of "optical system" is seen in the contex t of the explanations of how the optical systems
work in electrostatic photocopying apparatus – i.e ., in the description of the indirect process in the
1996 HSEN to heading 9009, which is to project th e image onto a drum. This function has no relation
to the way a scanner works (to convert the text into digital data). While generally speaking both the
"drum" (in the "indirect process" as described in the HSEN) and the scanner's CCD (in the
digitalization process) are indeed "light sensitive", this fact alone cannot be dispositive because, as
stated above, they fulfil different purposes. Further, evidence before us suggests that not all scanners
use a CCD to convert text into digital data. Inst ead, some of them use the so-called CIS ("Contact
Image Sensor"), in which, unlike the case of CCDs, the digitalization does not involve the use of
"mirrors, filters, lamp and lens" that scan back and forth, right to left, to cover the whole document
placed in the glass platen of the scanner. Instead, in CIS-based scanners, the whole surface below the
glass contains a "row of red, green and blue light emitting diodes (LED)". The original document and
the CIS are very close to each other. The whole row of LEDs is lit at once and then the image is
captured and digitalized.1897 Further, we have evidence indicating that CIS-based scanners are used in
"digital copying".1898 The point here is that the fact that digitalization can be done without "mirrors,

1894 However, as explained in more details below, not all machines use CCD-based scanners and may
instead contain a CIS-based scanner, which does not use "mirrors and lenses" at all.
1895 However, one noteworthy difference between these two processes, even from this point onwards, is
that generally a laser forms the image of the or iginal document in a reversed manner than
"analogue photocopiers". Rather than forming a latent image by discharging the areas of the drum protected
from the light by the reflected image of the original document, what the laser light discharges are the lines of the
original image itself, thus leaving the background "positively charged". ("How Laser Printers Work" – Exhibit
US-86).
1896 (Exhibit US-90); "How Laser Printers Work" (E xhibit US-86); "How Scanners Work" (Exhibit
 EC-65); "How do Digital Copiers Work?" (Exhibit US-55).
1897 An explanation of CCD and, in particular, CIS is provided in Exhibit EC-65 ("how scanners work",
see page 4).
1898 For example, we notice that certain MFMs can have CIS-based scanners (and make copies using
them) rather than CCD-based ones, can be found, e.g., in Exhibit TPKM-82 (a WCO document describing an

lens etc." in the case of CIS-based scanners, reinfor ces the conclusion that an "optical system" within
the meaning of the 1996 HSEN (and, ultimately, within the meaning of the concession in HS1996
subheading 9009 12) has a very precise meaning that describes an analogue rather than a digital
process.
7.1479 We consider that the above facts are sufficien t for us to conclude that ADP MFMs are not
covered by the concession in the EC Schedule fo r electrostatic photocopying apparatus operating by
reproducing the original image via an intermediate onto the copy (indirect process), as described in
HS1996 subheading 9009 12.
7.1480 We consider however that other objective characteristics ADP MFMs possess also support the
conclusion that they are not captured by this dutiable concession, chiefly among them is the
undisputed fact that these machines are connectable to computers and/or computer networks. It is this
intrinsic characteristic of ADP MFMs that allows th em to perform various tasks that further distance
them from the "unifunctional", analogue character that characterizes machines under the concession in
HS1996 subheading 9009 12. ADP MFMs, it is undisputed, can not only make digital copies, but also
deal with digital data in various different ways: receiving and printing digital data from an automatic
data-processing machine or network; creating and sending digital data to an automatic data-processing
machine or network (if having an independent scanni ng unit) and, if containing a faxing function,
scanning and transmitting facsimiles and receiving and printing facsimiles.
7.1481 Given the above considerations, because th e ADP MFMs at issue are not photocopiers
incorporating an optical system that operate by reproducing the original image onto the copy via an
intermediate (indirect process), they cannot fall within the scope of the concession in subheading 9009
12 of the EC Schedule, regardless of the primary, secondary, or equivalent nature of the copying
function vis-à-vis these machines' other functions.
(iii) Are ADP MFMs covered by the concession in HS1996 subheading 8472 90?
Arguments of the Parties

7.1482 The European Communities first mentions HS1996 subheading 8472 90 as a contextual
argument in support of its view that digital copiers are covered under the subheading for
photocopying apparatus in HS1996 subheading 9009 12. In particular, the European Communities
argues that:
"[E]ven on the complainants' overbroad interpretation of HS96 8471, stand-alone
digital copiers could not be classified under that heading, because they are not
connectable to an ADP machine. At th e same time, the complainants' unduly narrow
interpretation of the term 'photocopying' excludes these machines from HS96 9009.
As a consequence, on the complainants ' interpretation, stand-alone digital
photocopiers would have to be classified under subheading HS96 8472 90 ('other'), a
residual subheading within a residual heading covering

ADP MFM, Brother MFC-8600, that could have a "scan input assembly" incorporating a "CIS unit") and
Exhibit JPN-1 (a brochure of an ADP MFM, Panasonic KX-FLB881, indicating that its "scanning system" is
CIS and stating the following about its copy function: " A CIS (Contact Image Sensor) makes possible high-
speed scanning and high-speed image reproduction even when the spine is raised slightly above the glass
plate.").

Other office machines (for example hectograph or stencil duplicating
machines, addressing machines, auto matic banknote dispensers, coin
sorting machines, coin-counting or wrapping machines, pencil
sharpening machines, perforating machines or stapling machines
Clearly, however, a digital photocopier has much more in common with an analogue
photocopier, in terms of both technology a nd uses, than with any of the machines
covered by HS96 8472."
1899
7.1483 We observe that, in its first written submission, the European Communities seemed to think it
absurd that MFMs or "stand-alone digital c opiers" could be classified under HS1996 subheading
8472 90 based on the low-tech machines that we re included in the illustrative list in the
subheading.1900 However, in its first oral statement, the European Communities submitted that if
stand-alone digital copiers fall within 8472 90 then the MFMs at issue would also be prima facie
classifiable under that subheading as well, in addition to being prima facie classifiable under heading
8471 60. Therefore, it would be necessary to dete rmine on a case-by-case basis, and having regard to
the relevant HS rules (Note 3 to Section XVI and GI R3), whether the products at issue are covered by
concession 8471 60 or by the concession for 8472 90. 1901 The European Communities asks the Panel
to rule on whether the MFMs at issue are covere d by subheadings 8471 60 or 8472 90 in its schedule
in order to secure a positive resolution to the dispute.1902
7.1484 Japan argues that the reasoning that because stand-alone digital copiers fall within
subheading 8472 90 so do MFMs ignores the important difference between the two types of products:
the MFMs ability to connect to an automatic data-processing machine and process data from an
automatic data-processing machine. 1903 Chinese Taipei concurs with Japan that an ADP MFM can
only be classifiable under heading 8471 60 in view of its computer connectivity and that 8472 90 will
not be prima facie applicable to an ADP MFM. 1904 The United States, however, seems to agree that
an ADP MFM could be prima facie classifiable under both subhead ings 8471 60 and 8472 90.
However, the United States believes that an ADP MF M is a "composite machine" within the meaning
of Note 3 to Section XVI and, as such, must be cl assified as consisting only of that component or as
being that machine which performs the principal function. In the case of ADP MFMs, the United
States submits that the principal function of MFMs th at connect to an ADP is imparted by the print
module – whether printing a document scanned into the MFM's memory or printing a file from the
ADP machine, therefore these devices must be classified under subheading 8471 60. 1905 The United
States also notes that if the European Communities were correct, and the ADP MFMs at issue should
be classified under 8472 90 and subject to a bound ra te of 2.2 per cent, then the 6 per cent duty the
European Communities is admittedly applying would still be in excess of its commitments and
contrary to Articles II:1(a) and II:1(b) of the GATT 1994 and the EC Schedule.1906

1899 European Communities' first written submission, paras. 378-379.
1900 European Communities' first written submission, para. 340.
1901 European Communities' first oral statement, paras. 67-68; European Communities' second written
submission, para. 102.
1902 European Communities' response to Panel question No. 127(c).
1903 Japan's second oral statement, para. 11; Japan's response to Panel question No. 127(a).
1904 Chinese Taipei's response to Panel question No. 127(a).
1905 United States' response to Panel question No. 127(a).
1906 United States' comments on the European Communities' response to Panel question No. 127(c).

Consideration by the Panel

7.1485 With respect to whether ADP MFMs could al so be covered by the concession in HS1996
subheading 8472 90 we note that the European Co mmunities has never specifically argued that it
believes ADP MFMs should receive the tariff treatme nt for products falling within the scope of the
concession in HS1996 subheading 8472 90. Rather it has asserted that this is a logical conclusion that
flows from the complainants' arguments that digital products, in cluding stand-alone digital copiers,
belong in Chapter 84 of the HS. Additionally, a lthough an understanding of the ordinary meaning of
the concession is essential for any determination of whether a particular product or products falls
within its scope, the European Communities has not provided any argumentation with respect to the
interpretation of the terms of this subheading pursuant to the rules codified in the Vienna
Convention.1907
7.1486 We recall that the United States did indicate that, in its view, some ADP MFMs might fall
within the concession for "other" office machin es in HS1996 subheading 8472 90 and therefore the
current 6 per cent dutiable treatment would still be in excess of that provided for in the EC Schedule.
However, like the European Communities, the United States provided no argumentation on the
ordinary meaning of the concession. Additionally, we note that the complainants have not raised a
claim that the current tariff treatment of ADP MF Ms, i.e., 6 per cent, is inconsistent with the
European Communities' obligations under Article II:1(b) of the GATT 1994 because those products
should have received the tariff treatment set fort h in the concession for "other" office machines in
HS1996 subheading 8472 90. Indeed, the joint Panel re quest specifically asserts that the products at
issue are entitled to duty-free treatment not a lesser dutiable treatment than that provided for under the
challenged measures.
7.1487 Given the lack of argumentation on the possibility that ADP MFMs could fall within the
scope of HS1996 subheading 8472 90 and the lack of argumentation on the ordinary meaning of the
concession in HS1996 subheading 8472 90 we cannot conclude that the European Communities has
demonstrated that the products at issue fall within the scope of this concession. With respect to the
arguments of the United States, even if some of the products did fall within the concession in HS1996
subheading 8472 90, the complainants did not raise a cl aim in the joint Panel request alleging that the
European Communities was charging duties in excess of those provided for in this subheading of its
Schedule. To permit the United States to pursue su ch a claim now would be to exceed our mandate.
Therefore, the Panel will not make any findings with respect to the scope of the concession in HS1996
subheading 8472 90 as it appears in the EC Schedu le, whether ADP MFMs fall within the scope of
that concession, or whether the European Communiti es is charging duties in excess of those provided
for in subheading 8472 90 of its Schedule.
(iv) Conclusion
7.1488 In summary, the Panel has concluded that at least some of the MFMs at issue, as described by
the complainants in footnote 15 of the joint Pane l request, fall within the scope of the subheading
8471 60, and that none of the MFMs at issue fa ll within the scope of the concession in HS1996
subheading 9009 12. The Panel makes no finding as to whether some of the products at issue may
also fall within the scope of subheading 8472 90 and tariff item number 8472 90 80 of the EC
Schedule.

1907 European Communities' response to Panel question Nos. 44 and 127(c), paras. 55-57; European
Communities' comments on the complainants' responses to Panel question No. 127.

7.1489 We will now apply these conclusions about the sc ope of the coverage of the concessions in
the European Communities schedule and whethe r ADP MFMs fall within that scope to a
determination of whether the challe nged measures provide for tariff treatme nt that is in excess of that
required by the EC Schedule or provides less favourab le treatment for the products at issue than that
provided for in the EC Schedule.
(d) Do the Measures at Issue Provide for Duties on ADP MFMs which are in excess of those set
forth in the EC Schedule?
7.1490 We recall our reasoning in para graphs 7.97-7.102, above that Article II:1(b) of the GATT
1994 requires that Members not apply ordinary custom s duties in excess of those provided for in their
Schedule. Therefore, in this section we will co mpare the tariff treatment provided to ADP MFMs
under the challenged measures with that provided fo r in subheading 8471 60 to determine whether the
challenged measures provide for du ties being applied to ADP MFMs which are in excess of those set
forth in the EC Schedule, such that the European Communities is in breach of its obligations under
Article II:1(b) of the GATT 1994.
1908
(i) Commission Regulation No. 517/1999
7.1491 We note our conclusion in paragraph 7. 1215 above, that Commission Regulation
No. 517/1999 requires that a MFM meeting the descrip tion set forth in item 2 of the Annex must be
classified under tariff item number 9009 12 00, which sets a duty rate of 6 per cent.
7.1492 We also recall our conclusion that the products at issue do not fall within the scope of
products defined in tariff item number 9009 12 00, and that at least some of them will fall within the
scope of tariff item number 8471 60, which is a duty-free concession. Therefore, because
Commission Regulation No. 517/1999 requires the impos ition of a 6 per cent duty on products that
the European Communities is obligated to provide du ty-free treatment for, the measure is inconsistent
with the European Communities' obligations under Article II:1(b) of the GATT 1994.
(ii) The 2005 Statement
7.1493 We recall our conclusion in para graph 7.1221 above that if a na tional customs authority were
to follow the non-binding guidance in the 2005 Statem ent then it would proceed to classify MFMs
which can photocopy in black and white 12 or mo re pages per minute as a photocopier under tariff
item number 9009 12 00 which sets a 6 per cent duty rate.
7.1494 We also recall our conclusion that the products at issue do not fall within the scope of
products defined in tariff item number 9009 12 00 of th e EC schedule, and that at least some of them
will fall within the scope of tariff item number 8471 60, which is a duty-free concession. Therefore,
to because the 2005 Statement guides the Europe an Communities, through its national customs
authorities, to uniformly apply a duty of 6 per cent on products that the European Communities is
obliged to provide duty-free treatment for, the measure is inconsistent with the European
Communities' obligations under Article II:1(b) of the GATT 1994.

1908 As noted in paragraph 7.102 and fn. 975 above, because of the relationship between the obligations
in Articles II:1(a) and (b), we will begin our analysis of whether the tariff treatment provided for in the
European Communities' measures is consistent with Ar ticle II of the GATT 1994 with an analysis of the
obligation in Article II:1(b). Subsequently, we will move on to address the complainants' claim that the
European Communities is also acting inconsistently with the obligation in Article II:1(a).

(iii) Commission Regulation No. 400/2006
7.1495 We recall our conclusion at paragraph 7. 1228 above that Commission Regulation No.
400/2006 requires that a multifunction machine as descr ibed in item 4 of the Annex to the Regulation
shall be classified under CN code 9009 12 00, which sets a duty rate of 6 per cent.
7.1496 We also recall our conclusion that the products at issue do not fall within the scope of
products defined in tariff item number 9009 12 00, and that at least some of them will fall within the
scope of tariff item number 8471 60, which is a duty-free concession. Therefore, because
Commission Regulation No. 400/2006 requires the impos ition of a 6 per cent duty on products that
the European Communities is obligated to provide du ty-free treatment for, the measure is inconsistent
with the European Communities' obligations under Article II:1(b) of the GATT 1994.
(iv) CN2007 codes 8443 31 10, 8443 31 91, and 8443 31 99
7.1497 Unlike Commission Regulation Nos. 517/1999 and 400/2006 and the 2005 Statement, the
CN2007 does not subject ADP MFMs to a 6 per cent duty via classification under HS1996
subheading 9009 12.
7.1498 The CN2007, as well as the subsequent versions of the CN to date, is based on HS2007,
which made a variety of changes in headings covering the very products at issue in this dispute. In
fact, we observed that the HS2007 completely removed HS1996 subheading 9009 12. Moreover,
several products that used to be classifi able under different HS1996 subheadings, including inter alia
some input or output units that used to be classifiable under HS1996 subheading 8471 60, were
merged under a new HS2007 heading 8443. The Europ ean Communities contends that this was also
the case for photocopiers covered under HS1996 subheading 9009 12, however this interpretation was
not accepted by all the contracting parties to the HS.
1909 This new heading includes a subheading
8443 31 for "[m]achines which perform two or more of the functions of printing, copying or facsimile
transmission, capable of connecting to an automatic data-processing machine or to a network".
7.1499 In implementing HS2007, the European Comm unities created its own eight-digit tariff item
numbers as subcategories of the subheading. Su bheading 8443 31 was subdivided in three categories
as follows:

1909 WCO response to Panel questions, pp. 6-12. We note, in addition, that WTO document
G/MA/W/76 circulated tables with "correlation tables" linking HS2007 with the previous version of the
nomenclature. While recognizing that the tables expressl y indicate that they have "no legal value", we observe
that page 25 contains a remark for HS2007 subheading 8443 31 explaining that the amendments were made
"due to technological progress in the high technology sector, notably concerning the classification of apparatus
with multiple reproduction functions". The table in page 25 of this document also explains that the new
subheading results from moving certain products which were used to be classified under ex8443.51*,
ex8471.60, ex8517.21, ex9009.11*, ex9009.12* and stressing that there is "no consensus" on the subheadings
with the asterisk.

CN2007
code Description
Conventional
rate of duty
(%)
8443 Printing machinery used for printing by means of plates, cylinders and
other printing componen ts of heading 8442; other printers, copying
machines and facsimile machines, wh ether or not combined; parts and
accessories thereof:

 - Other printers, copying machines and facsimile machines, whether or not
combine

8443 31 - - Machines which perform two or more of the functions of printing, copying
or facsimile transmission, capable of connecting to an automatic data-
processing machine or to a network:

8443 31 10 - - - Machines performing the functions of copying and facsimile
transmission, whether or not with a pr inting function, with a copying speed
not exceeding 12 monochrome pages per minute
Free
 - - - Other
8443 31 91 - - - - Machines performing a copying function by scanning the original and
printing the copies by means of an electrostatic print engine
6 per cent
8443 31 99 - - - - Other Free

7.1500 We observe that one of these CN2007 cod es 8443 31 91 provides for a 6 per cent ad valorem
duty for products classifiable therein. Speci fically, pursuant to CN2007 code 8443 31 91 the
European Communities would apply a 6 per cent dut y to "[m]achines performing a copying function
by scanning the original and printing the copies by m eans of an electrostatic print engine." All the
remaining products classifiable under 8443 31 are provide d duty-free treatment and are, therefore, not
relevant for our analysis. We recall our conclu sion in paragraphs 7.123 8-7.1239 above, that the
existence of these two eight-digit tariff item nu mbers under the same subheading, means that ADP
MFMs with a fax function which copy at a speed exceeding 12 monochrome pages per minute are
subject to the 6 per cent duty under 8443 31 91 wh ile those that copy at rates of 12 monochrome
pages per minute or slower are exempt from duties.
7.1501 We recall our determination in paragraph 7.1397 above that certain ADP MFMs fall within
the scope of the duty-free concession in the EC Schedule in subheading 8471 60. 1910 We also stated
that a decision on whether a particular ADP MF M fell within the duty-free concession could only be
made on a case-by-case basis, based on the objective ch aracteristics of a product, with due regard to
the guidance provided by the rules of the HS1996 (i ncluding relevant chapter and section notes and
the GIRs). Although the European Communities itself has maintained that such an analysis of the
objective characteristics is what is required, we fi nd that the measure does not provide for this.
Rather, the CN2007 requires that all ADP MFMs wh ich do not have a facsimile function or make
copies at a speed in excess of 12 monochrome pages per minute be classified in eight-digit tariff item
number 8443 31 91 which provides for a 6 per cent ad valorem duty. As a result, certain ADP MFMs
that are entitled to duty free treatment are subject to 6 per cent duty under the EC's measure.
7.1502 The European Communities contends that this duty treatment is justified, because tariff item
number 8443 31 91 is the successor to subheading 9 009 12 as it appears in the EC Schedule and that
goods that were classifiable under subheading 900 9 12 are now classifiable in tariff item number
8443 31 91 and should receive the same duty treatment , i.e. 6 per cent. Even assuming that products

1910 We recall that some ADP MFMs, pursuant to Note 5(D) to HS1996 Chapter 84 may be "printers"
and thus classifiable under CN code 8471 60 40 and some other ADP MFMs could fall under CN code 8471 60
90 for "other". In either case, as they would still be input or output units as defined by the concession in 8471
60 of the EC Schedule, they would nevertheless be entitled to duty-free treatment.

that were covered under subheading 9009 12 of the EC Schedule are now covered under CN2007
code 8443 31 91, that does not mean that CN code 8443 31 91 only covers products that were once in
subheading 9009 12. This is demonstrated by th e plain difference in the language of the two
concessions. While subheading 9009 12 covered elect rostatic photocopying apparatus which operate
by reproducing the original image via an intermed iate onto the copy (indirect process), CN code
8443 31 91 applies to machines which are capable of connecting to an ADP or a network that perform
a copying function by scanning the original and printing the copies by means of an electrostatic print
engine. Thus, even though, as explained in paragraph 7.1481, ADP MFMs do not fall within the scope
of subheading 9009 12 of the EC Schedule, they undis putedly fall within the meaning of the terms of
CN2007 code 8443 31 91. Therefore, the issue before us with respect to the CN2007, and any
subsequent versions, is not whet her the goods are properly classified , but whether the tariff treatment
comports with the concessions set forth in the EC Schedule.
7.1503 We have found that certain of the ADP MFMs at issue, fall within the scope of subheading
8471 60 of the EC Schedule. The CN2007 requires a duty of 6 per cent ad valorem be charged on at
least some products that properly fall within the scope of the duty-free concession for input or output
units of an ADP in subheading 8471 60 of the EC Schedule. Therefore, because the CN2007 requires
that a duty in excess of that set forth in the EC Schedule be levied against certain ADP MFMs which
fall within the scope of the duty-free concession in subheading 8471 60 in the EC Schedule, the
measure is inconsistent with Article II:1(b) of the GATT 1994.
(e) Do the measures at issue provide less favourable treatment than that set forth in the EC
Schedule?
7.1504 With respect to whether the European Comm unities' measures provide for less favourable
treatment than that set forth in the EC Schedule, we recall the explanation of the Appellate Body, in
Argentina – Textiles and Apparel, that paragraph 1(b) of Article II prohibits a specific kind of practice
that will always be inconsistent with paragraph 1(a).
1911 In particular, the Appellate Body found that
"the application of customs duties in excess of those provided for in a Member's Schedule inconsistent
with the first sentence of Article II:1(b), constitutes 'less favourable' treatment under the provisions of
Article II:1(a)." 1912 Therefore, as prior panels have before us 1913, we find that a violation of
Article II:1(b) necessarily results in less favourab le treatment which is inconsistent with the
obligations in Article II:1(a).
7.1505 In light of the foregoing, given that we have found that Commission Regulation No.
517/1999, Commission Regulation No. 400/2006, the 2005 Statement, and the 2007CN are
inconsistent with Article II:1(b) of the GATT 1994, those measures also provide for less favourable
treatment in a manner inconsistent with Article II:1(a) of the GATT 1994.
4. Whether the European Communities' tariff t reatment of Non-ADP MFMs is consistent
with its obligations under Article II of the GATT 1994
7.1506 We recall that the complainants have divided their claims with respect to multifunctional
digital machines into two parts. The first claim, discussed above, dealt with MFMs that could connect
to an automatic data-processing machine and which the complainants argued fell within the duty-free
concession in subheading 8471 60. The second claim, which will be discussed in this section of the

1911 Appellate Body Report on Argentina – Textiles and Apparel, para. 45.
1912 Appellate Body Report on Argentina – Textiles and Apparel, para. 47.
1913 Panel Report on EC – Chicken Cuts, para. 7.65.

Reports, deals with MFMs that have a facsimile func tion, but do not have the ability to connect to an
automatic data-processing machine.
(a) Are non-ADP MFMs covered by the concession in Subheading 8517 21 of the EC Schedule?
(i) Arguments of the parties
7.1507 The complainants refer to these products as non-ADP MFMs. The complainants argue that
these products fall within the European Commun ities' duty-free concession in the EC Schedule for
"facsimile machines" in subheading 8517 21.
1914 The complainants argue that by not affording duty-
free treatment to products which are within th e scope of this tariff concession, the European
Communities is acting inconsistently with its ob ligations under Article II of the GATT 1994, which
requires that Members not treat products coming from another Member less favourably than in their
schedules, nor charge duties in excess of the bound rates set forth in said Schedule.
7.1508 The European Communities argues that "since the non-ADP MFMs at issue in this section
have both a copying function and a facsi mile transmission function, they are prima facie classifiable
under the concessions for bot h HS96 8517 21 and 9009 12." 1915 According to the European
Communities, given that MFMs at issue are prima facie covered by the concessions for both HS1996
8517 21 and 9009 12, and in the absence of any relevant HS1996 chapter or heading notes 1916, it
becomes necessary to resort to GIR 3. The Eu ropean Communities main tains that the essential
character of these products cannot be determined pu rsuant to GIR 3(b), thus the MFMs must be
classified in accordance with GIR 3(c) , i.e., in the subheading that occu rs later in the HS. In this case
that would mean that non-ADP MFMs fall within the scope of the concession in subheading 9009 12
of the EC Schedule and are subject to duty.1917
7.1509 The complainants disagree with the European Communities and renew their arguments noted
at paragraphs 7.1473-7.1475 above that the concession in HS1996 subheading 9009 12 does not cover
digital copying.1918

1914 We note that the European Communities' concession relating to "facsimile machines" is included in
the EC Schedule with an eight-digit CN code, i.e. CN co de 8517 21 00. However, in this dispute we will refer
to this CN code and to subheading 8517 21 interchangea bly because we consider their scope to be identical
based on the following three reasons: (i) the use of "00" in the last two digits of that CN code; (ii) the identical
product descriptions that appear next to both the CN code and subheading; and (iii) the absence, in this case, of
CN-specific "break-outs" in the EC Schedule.
1915 European Communities' first written submission, para. 449.
1916 Although the European Communities is correct that there are no relevant chapter or heading notes
we do recall that Japan cited the HS Explanatory Note fo r heading 8517 which it argues confirms that facsimile
machines are those that can connect to a telephone line and have the ability bot h to send and to receive original
documents by converting them into digital data and sending them over telephone lines. (Japan's first written
submission, paras. 209-210 citing Vol. 4 Harmonized Commodity Description and Coding System, Explanatory
Notes (2nd ed. 1996), p. 1475 (Exhibit JPN-23).
1917 European Communities' first written submission, para. 451.
1918 See, for example: United States' first written su bmission, paras. 71, 157, 159; United States' first
oral statement, para. 37; United States' second written s ubmission, paras. 111-114; United States' second oral
statement, para. 37; Japan's first wr itten submission, paras. 70-73, 107-122, 158-161 and 207; Japan's first oral
statement, para. 37; Japan's second written submission, paras. 40-41; Chinese Taipei's first written submission,
para. 574-584; Chinese Taipei's second written submission, paras. 299-300, 314, 319; complainants' responses
to Panel question No. 29 (arguing that the WCO endorsed their view that digital c opiers are not photocopiers);
Japan's responses to Panel questions Nos. 124; 131 and 136.

7.1510 The European Communities responds that even if the complainants were right about non-
ADP MFMs falling outside the scope of HS1996 subheading 9009 12 as photocopiers, they would
then have to be classified under HS1996 subheading 8472 90. Therefore, according to the European
Communities "non-ADP MFMs would fall prima facie within both HS96 8517 21 and HS96 8472 90
and their classification would have to be determin ed, on a case-by-case basis, pursuant to Note 3 to
Section XVI of the HS96."
1919
(ii) Consideration by the Panel
7.1511 We take note of the fact that the European Communities agrees with the complainants that all
non-ADP MFMs are prima facie classifiable in HS1996 subheading 8517 21. Considering the
agreement among all the parties on this point, the Panel does not see the need to do an extensive
analysis of the ordinary meaning of the terms of this concession to determine whether the products are
covered within its scope. However, as with the claims regarding ADP MFMs, the European
Communities has argued that a proper classification exercise will lead to the products falling under a
different, dutiable concession, namely subheading 9 009 12 of the EC Schedule. Alternatively, the
European Communities argues that if they do not fall within subheading 9009 12 they would fall
within a different dutiable concession, this time subheading 8472 90 of the EC Schedule.
7.1512 Thus, the relevant issue with respect to th e complainants' claim that non-ADP MFMs are
entitled to duty-free treatment is whether non-ADP MFMs (or at least some of them) may be covered
by subheadings other than HS1996 8517 21, that are dutiable. We will begin our analysis by
determining whether the products at issue also fall within the scope of the tariff concessions in
HS1996 subheadings 9009 12 and 8472 90.
(b) Are there other applicable tariff headings?
7.1513 The European Communities raises two possible alternative tariff headings related to
subheading 9009 12 and subheading 8472 90. In order to determine whether either is applicable we
will have to examine the ordinary meaning of th e concession and whether the products at issue fall
within the scope of that concession. We will address each concession in turn.
(i) Are non-ADP MFMs covered by the concession in Subheading 9009 12 of the EC Schedule?
Arguments of the parties
7.1514 As noted above, the European Communities contends that because the products at issue
have a copying function they are prima facie classifiable within subheading 9009 12 of the EC
Schedule and that a proper applicati on of the GIRs of the HS, in particular GIR 3(c), will result in all
of the non-ADP MFMs at issue falling within the scope of that dutiable concession.1920
7.1515 The complainants disagree. They renew their argum ents, made with respect to the
classification of ADP MFMs, that digital copying is not the type of photocopying covered by the
concession in subheading 9009 12 of the EC Sc hedule and as such, non-ADP MFMs which make

1919 European Communities' second written submission, para. 135.
1920 European Communities' first written submission, paras. 446-451; European Communities' response
to Panel question No. 129; European Communities' comment to Japan's and Chinese Taipei's response to Panel
question No. 129.

copies using digital technology combining the work of a scanner and a print engine, cannot fall within
the concession in subheading 9009 12 of the EC Schedule.
1921
Consideration by the Panel
7.1516 We recall our finding in paragr aph 7.1468 above that the ordinary meaning of electrostatic
photocopying apparatus operating by reproducing the original image via an intermediate onto the
copy (indirect process) in subheading 9009 12 in the EC Schedule, is limited to the photocopying
process used by "analogue photocopiers" and does not include within its scope digital copying
technology.
7.1517 We also note that the non-ADP MFMs utilize the same digital copying process as ADP
MFMs, which was described in pa ragraph 7.1470 above. Given that the copying process utilized by
non-ADP MFMs is not the type of photocopying process covered by the concession in subheading
9009 12 of the EC Schedule, then we find that non-ADP MFMs cannot fall within the scope of the
concession in subheading 9009 12 of the EC Schedule.
(ii) Are Non-ADP MFMs covered by the concession under subheading 8472 90 of the EC
Schedule?
Arguments of the parties
7.1518 The European Communities argues that if digital copiers are not photocopiers under
subheading 9009 12, then digital copiers would have to be classified under subheading 8472 90. 1922
Following this logic, the European Communities argues that "non-ADP MFMs would fall prima facie
within both HS96 8517 21 and HS96 8472 90 and their classification would have to be determined, on
a case-by-case basis, pursuant to Note 3 to Section XVI of the HS96."1923
7.1519 The United States seems to agree with the European Communities on this point, when it
states that non-ADP MFMs whose "essential character" is that of a facsimile machine are included in
the concession for "facsimile machines" under subheading 8517 21, while other non-ADP MFMs may
not be "facsimile machines" and therefore would fa ll within the concession for goods of subheading
8472 90.1924

1921 See, for example: United States' first written su bmission, paras. 71, 157, 159; United States' first
oral statement, para. 37; United States' second written s ubmission, paras. 111-114; United States' second oral
statement, para. 37; Japan's first wr itten submission, paras. 70-73, 107-122, 158-161 and 207; Japan's first oral
statement, para. 37; Japan's second written submission, paras. 40-41; Chinese Taipei's first written submission,
para. 574-584; Chinese Taipei's second written submission, paras. 299-300, 314, 319; complainants' responses
to Panel question No. 29 (arguing that the WCO endorsed their view that digital c opiers are not photocopiers);
Japan's responses to Panel questions Nos. 124; 131 and 136.
1922 European Communities' second written submission, para. 135 citing the Complainants' responses to
Panel question No. 44.
1923 European Communities' second written submission, para. 135.
1924 United States' response to Panel question No. 137. We understand the United States' reference to
the "essential character" of the non-ADP MFMs to be a reference to GIR 3( b). Assuming that the United States
was correct that some non-ADP MFMs could be prima facie classifiable in both HS1996 subheadings 8472 90
and 8517 21, under HS rules, to the extent that the e ssential character of a partic ular non-ADP MFM could not
be determined pursuant to GIR 3(b), GIR 3(c) would suggest that the appropriate classification would be the
duty free subheading 8517 21 as the latest subheading in the Schedule.

7.1520 Japan and Chinese Taipei maintain that all non-ADP MFMs are included in the concession
on HS1996 subheading 8517 21. Japan argues that the scanner module and printer module are what
enable the device to transmit and receive facsimi les and that these modules are essential to the
facsimile capabilities of the device.
1925
7.1521 Finally, both Japan and the United States reite rate that even if some non-ADP MFMs were
properly classifiable in subheading 8472 90 the duty treatment under the current EC measures would
still exceed that provided for in that concession.
1926
Consideration by the Panel
7.1522 The Panel recalls its determination in paragraph 7.1487 above that given the lack of evidence
and argumentation on the scope of HS1996 subheading 8472 90 and that any claim of inconsistency
with Article II:1(b) because of tariff treatment in ex cess of that provided for in 8472 90 is outside our
mandate that we would not make any findings with respect to whether ADP MFMs fall within the
scope of that concession. Given that the arguments on non-ADP MFMs mirrored and were
sometimes even less than those presented on ADP MFMs, we see no reason to proceed with findings
on whether non-ADP MFMs fall within the scope of the concession in HS1996 subheading 8472 90.
(c) Do the measures at issue result in the imposition of duties on the products at issue in excess of
those provided for in the EC Schedule?
7.1523 We recall our reasoning in Section VII.D.4 (parag raphs 7.97-7.102) above that Article II:1(b)
of the GATT 1994 requires that Members not appl y ordinary customs duties in excess of those
provided for in their Schedule. Therefore, in this section we will compare the tariff treatment
provided to non-ADP MFMs under the challenged measu res with that provided for in subheading
8517 21 of the EC Schedule to determine whether the challenged measures provide for duties being
applied to non-ADP MFMs in excess of those set fo rth in the EC Schedule, such that the European
Communities is in breach of its obligations under Article II:1(b) of the GATT 1994.1927
(i) Commission Regulation No. 517/1999
7.1524 We note our conclusion in paragraph 7. 1491 above, that Commission Regulation
No. 517/1999 requires that a MFM meeting the descri ption set forth in item 2 of the Annex, which
could include a non-ADP MFM with a facsimile f unction, must be classified under CN code
9009 12 00, which sets a duty rate of 6 per cent.
7.1525 We also recall our conclusion that the products at issue do not fall within the scope of
products defined in tariff item number 9009 12 00 of th e EC Schedule, but that at least some of them
fall within the scope of subheading 8517 21 of th e EC schedule, which is a duty-free concession.
Therefore, as Commission Regulation No. 517/1999 requires the imposition of a 6 per cent duty on
products that the European Communities is obliged to provide duty-free treatment for, the measure is
inconsistent with the European Communities' obligations under Article II:1(b) of the GATT 1994.

1925 Japan and Chinese Taipei's responses to Panel question No. 137.
1926 Japan and the United States' responses to Panel question No. 137.
1927 As noted in paragraph 7.102, becau se of the relationship between the obligations in Articles II:1(a)
and (b), we will begin our analysis of whether the tariff treatment provided for in the European Communities'
measures is consistent with Article II of the GATT 1994 with an analysis of the obligation in Article II:1(b).
Subsequently, we will move on to address the complainants' claim that the European Communities is also acting
inconsistently with the obligation in Article II:1(a).

(ii) The 2005 Statement
7.1526 We recall our conclusion in para graph 7.1493 above that if a na tional customs authority were
to follow the non-binding guidance in the 2005 Statement, then it would proceed to classify MFMs
(including non-ADP MFMs with a facsimile functio n) which can photocopy in black and white 12 or
more pages per minute as a photocopier under CN code 9009 12 00 which sets a 6 per cent duty rate.
7.1527 We also recall our conclusion that at least some of the products at issue fall within the scope
of subheading 8517 21 of the EC Schedule, which is a duty-free concession, and that none of the
products at issue fall within the scope tariff item number 9009 12 00 of the EC Schedule. Therefore,
because the 2005 Statement guides the European Communities, through its national customs
authorities, to uniformly apply a duty of 6 per cent on products that the European Communities is
obliged to provide duty-free treatment for, the measure is inconsistent with the European
Communities' obligations under Article II:1(b) of the GATT 1994.
(iii) Commission Regulation No. 400/2006
7.1528 We recall that the complainants have specifically raised item 4 of the Annex to the Regulation
as the part of Commission Regulation No. 400/ 2006 which causes the European Communities to
charge duties on non-ADP MFMs which should be covered by the duty-free concession in subheading
8517 21 of the EC Schedule for "facsimile machin es". Item 4 of the Annex to the Regulation
describes a
"[M]ultifunctional apparatus capable of performing the following functions:
scanning, laser printing, laser copying (indi rect process). The apparatus, which has
several paper feed trays, is capable of reproducing up to 40 A4 pages per minute.
The apparatus operates either autonomously (as a copier) or in conjunction with an
automatic data-processing machine or in a network (as a printer, a scanner and a
copier)."
1928
7.1529 The regulation goes on to say that such an apparatus shall be classified under CN code
9009 12 00, which sets a duty rate of 6 per cent.
7.1530 We note that the description does not mention the apparatus having a facsimile function.
Therefore, we do not see how Commission Regul ation No. 400/2006 would necessarily require
national customs authorities within the European Communities to classify non-ADP MFMs with a
facsimile function in CN code 9009 12 00. We note that the complainants have provided no specific
argumentation as to how application of Commission Regulation No. 400/2006 results in duties being
applied to non-ADP MFMs with a facsimile function. Therefore, with respect to the claim regarding
the tariff treatment of non-ADP MFMs with a facsimile function, we find that the complainants have
not established that, by virtue of this regulation, the European Communities is levying duties on non-
ADP MFMs with a facsimile function in excess of those provided for in its Schedule.
(iv) CN2007 codes 8443 31 10, 8443 31 91, and 8443 31 99
7.1531 Unlike Commission Regulation Nos. 517/1999 and 400/2006 and the 2005 Statement, the
CN2007 does not subject non-ADP MFMs to a 6 per cent duty via classification under HS1996
subheading 9009 12.

1928 Commission Regulation No. 400/2006 (Exhibit JPN-5).

7.1532 The CN2007, as well as the subsequent versions of the CN to date, is based on HS2007,
which made a variety of changes in headings covering the very products at issue in this dispute. In
fact, we observed that the HS2007 completely removed HS1996 subheading 9009 12. Moreover,
several products that used to be classifi able under different HS1996 subheadings, including inter alia
some facsimile machines that used to be classifiable under HS1996 subheading 8517 21, were merged
under a new HS2007 heading 8443. The European Comm unities contends that this was also the case
for photocopiers covered under HS1996 subheading 9009 12, however this interpretation was not
accepted by all the contracting parties to the HS.
1929 This new heading includes a subheading 8443 31
for "[m]achines which perform two or more of th e functions of printing, copying or facsimile
transmission, capable of connecting to an automatic data-processing machine or to a network".1930
7.1533 In implementing HS2007, the European Communities created its own eight-digit CN codes as
subcategories of the subheading. Subheading 8443 31 was subdivided as follows:
CN2007
code Description
Conventional
rate of duty
(%)
8443 Printing machinery used for printing by means of plates, cylinders and
other printing componen ts of heading 8442; other printers, copying
machines and facsimile machines, wh ether or not combined; parts and
accessories thereof:

 - Other printers, copying machines and facsimile machines, whether or not
combined

8443 31 - - Machines which perform two or more of the functions of printing, copying
or facsimile transmission, capable of connecting to an automatic data-
processing machine or to a network:

8443 31 10 - - - Machines performing the functions of copying and facsimile
transmission, whether or not with a pr inting function, with a copying speed
not exceeding 12 monochrome pages per minute
Free
 - - - Other
8443 31 91 - - - - Machines performing a copying function by scanning the original and
printing the copies by means of an electrostatic print engine
6 per cent
8443 31 99 - - - - Other Free

7.1534 We observe that one of these CN2007 cod es 8443 31 91 provides for a 6 per cent ad valorem
duty for products classifiable therein. Speci fically, pursuant to CN2007 code 8443 31 91 the
European Communities would apply a 6 per cent dut y to "[m]achines performing a copying function
by scanning the original and printing the copies by m eans of an electrostatic print engine." All the
remaining products classifiable under 8443 31 are provide d duty-free treatment and are, therefore, not
relevant for our analysis. We recall our conclusion in paragraph 7.1500 above, that the existence of
these two eight-digit CN codes under the same s ubheading, means that non-ADP MFMs which copy
at a speed exceeding 12 monochrome pages per minute are subject to the 6 per cent duty under
8443 31 91, while those that copy at rates of 12 monochrome pages per minute or slower are exempt
from duties.

1929 WCO response to Panel questions, pp. 6-12.
1930 We note that all the parties confirmed that the term "network" in HS2007 subheading 8443 31
includes connections via a telephone line and thus non-ADP MFMs with a facsimile function would be covered
by this subheading. See Parties' responses to Panel question No. 25.

7.1535 The Panel reiterates that our task is to de termine whether the products at issue receive
treatment that is less favourable than or in exces s of the duties provided for in the concession in the
EC Schedule.
7.1536 We recall that the parties all agree that all non-ADP MFMs could fall, at least prima facie
within the scope of the duty-free concession in the EC Schedule in subheading 8517 21.
1931 We also
stated that due to lack of evidence and argumenta tion we did not have a basis for making a finding as
to whether some non-ADP MFMs might also fall within the scope of the dutiable concession in
8472 90. As noted above, by virtue of the effect of the relevant HS rules which provide important
context in interpreting the scope of these concessi ons, it appears to the Panel that at least some non-
ADP MFMs will fall within the scope of the conces sion in subheading 8517 21 of the EC Schedule.
Although the European Communities itself notes that the Appellate Body has confirmed that tariff
treatment of a particular product must be determined according to its objective characteristics at the
time of its importation
1932, we find that the measure does not provide for this. Rather, the CN2007
requires that all non-ADP MFMs which make copi es at a speed in excess of 12 monochrome pages
per minute be classified in eight-digit CN code 8443 31 91 which provides for a 6 per cent ad valorem
duty. As a result, certain non-ADP MFMs that are entitled to duty free treatment are subject to 6 per
cent duty under the EC's measure.
7.1537 The European Communities contends that this duty treatment is justified, because tariff item
number 8443 31 91 is the successor to subheading 9 009 12 as it appears in the EC Schedule and that
goods that were classifiable under subheading 900 9 12 are now classifiable in tariff item number
8443 31 91 and should receive the same duty treatment , i.e., 6 per cent. Even assuming that products
that were covered under subheading 9009 12 of the EC Schedule are now covered under CN2007
code 8443 31 91, that does not mean that tariff item number 8443 31 91 only covers products that
were once in subheading 9009 12. This is demonstrated by the plain difference in the language of the
two concessions. While subheading 9009 12 covere d electrostatic photocopying apparatus which
operate by reproducing the original image via an in termediate onto the copy (indirect process), tariff
item number 8443 31 91 applies to machines which are capable of connecting to an ADP or a network
that perform a copying function by scanning the original and printing the copies by means of an
electrostatic print engine. Thus, even though, as explained in paragraph 7.1517, non-ADP MFMs do
not fall within the scope of subheading 9009 12 of th e EC Schedule, they undisputedly fall within the
meaning of the terms of CN2007 code 8443 31 91. Theref ore, the issue before us with respect to the
CN2007, and any subsequent versions, is not whet her the goods are properly classified, but whether
the tariff treatment comports with the concessions set forth in the EC Schedule.
7.1538 We have found that certain of the non-ADP MF Ms at issue, fall w ithin the scope of
subheading 8517 21 of the EC Schedule. The CN2007 requires a duty of 6 per cent ad valorem be
charged on at least some products that properly fa ll within the scope of the duty-free concession for
facsimile machines in subheading 8517 21 of th e EC Schedule. Therefore, because the CN2007
requires that a duty in excess of that set forth in the EC Schedule be levied against certain non-ADP
MFMs which fall within the scope of the duty-free concession in subheading 8517 20 of the EC
Schedule, the measure is inconsistent with Article II:1(b) of the GATT 1994.

1931 United States' first written submission, paras. 103-104; United States' first oral statement, para. 36;
Japan's first written submission, para. 193; Chinese Ta ipei's first written submission, para. 566, European
1932 European Communities' first written submission, para. 447.

(d) Do the measures at issue provide less favourable treatment than that set forth in the EC
Schedule?
7.1539 With respect to whether the European Comm unities' measures provide for less favourable
treatment than that set forth in the EC Schedule, we recall the explanation of the Appellate Body, in
Argentina – Textiles and Apparel , that paragraph (b) of Article II prohibits a specific kind of practice
that will always be inconsistent with paragraph (a).
1933 In particular, the Appellate Body found that
"the application of customs duties in excess of those provided for in a Member's Schedule inconsistent
with the first sentence of Article II:1(b), constitut es 'less favourable' treatment under the provisions of
Article II:1(a)." 1934 Therefore, as prior panels have before us 1935, we find that a violation of
Article II:1(b) necessarily results in less favourab le treatment which is inconsistent with the
obligations in Article II:1(a).
7.1540 In light of the foregoing and given that we have found that Commission Regulation
No. 517/1999 , the 2005 Statement, and the CN2007 r esult in tariff treatment of non-ADP MFMs that
is inconsistent with Article II:1(b) of the GATT 1994, those measures also provide for less favourable
treatment in a manner inconsistent with Article II:1(a) of the GATT 1994.
VIII. RULINGS AND RECOMMENDATIONS
8.1 The Panel recalls the complainants' request that the Panel issue its findings in the form of a
single document containing three separate reports with common sections on the Panel's conclusions
and recommendations for each complaining party. 1936 In accordance with the requests by the
complaining parties, we therefore provide three separate sets of conclusions and recommendations.
8.2 We recall that the complainants have br ought claims not only against the European
Communities, but also its member States. We note that it is the member States' national customs
authorities that implement the customs measures enac ted by the European Communities. We also are
mindful of the fact that EC member states are WTO Members in their own right and that, like all
WTO Members, they are bound to act consistently w ith their WTO obligations. Thus, if one or more
EC member States were found to have applied WTO inconsistent measures, be they enacted by the
States themselves or by the European Communities, it could be appropriate to find that the member
States have acted inconsistently with their WTO obligations. However, we note that the complainants
have framed their claims as challenging the Eur opean Communities measures "as such" and have
confirmed to the Panel that they are not making clai ms with respect to specific applications of those
measures by national customs authorities of any member States. Under the circumstances, the Panel
considers that it is not required to make, and does not make, findings with respect to member States'
application of the European Communities' measures th at were challenged "as such" in this dispute.

1933 Appellate Body Report on Argentina – Textiles and Apparel, para. 45.
1934 Appellate Body Report on Argentina – Textiles and Apparel, para. 47.
1935 Panel Report on EC – Chicken Cuts, para. 7.65.

Moreover, we are of the view that findings with respect to the measures adopted by the European
Communities will provide a positive solution to the dispute.
1937

1937 We recall that the European Communities assured the Panel that to the extent the Panel were to find
that any of the measures specified in the joint panel request breach WTO obligations, the European
Communities stated it will bear full responsibility for such breach of its Schedule. See Letter from the
Delegation of the Commission (4 February 2009).

A. COMPLAINT BY THE UNITED STATES (DS375): CONCLUSIONS OF THE PANEL
1. FPDs
8.3 The United States has made claims with resp ect to Council Regulation 2658/87, as amended,
CNEN 2008/C 133/01, Commission Regulation Nos. 634/2005 and 2171/2005. The Panel analyzed
how these measures worked in conjunction with and in the absence of the duty suspension under
Council Regulation No. 179/2009.
8.4 With respect to the CNEN 2008/C 133/01, which operates in conjunction with the CN, the
Panel finds that:
(a) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that are capable of receiving and reproducing video images both from an
automatic data-processing machine and from a source other than an automatic data-
processing machine, that fall within th e scope of the FPDs narrative description
and/or within the scope of the CN code 8471 60 90, under dutiable headings.
Because the concessions call for duty-free treat ment of products falling within their
scope, this dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(b) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that have a DVI interface, whether or not they are capable of receiving
signals from another source, that fall within the scope of the FPDs narrative
description and/or within the scope of the CN code 8471 60 90, under dutiable
headings. Because the concessions call fo r duty-free treatment of products falling
within their scope, this dutiable treatment is inconsistent with Article II:1(b) of the
GATT 1994.
(c) Given the duty suspension currently in effect for certain products in dispute falling
within the scope of the FPDs narrative descr iption or within the scope of CN code
8471 60 90, the inconsistency with Article II:1(b) referred to in subparagraphs (a) and
(b) above is eliminated because the duties are suspended and hence are not in excess
of those provided for in the EC Schedule.
(d) For those products in dispute falling within the scope of the FPDs narrative
description or within the scope of CN c ode 8471 60 90 and that are not covered by
the duty suspension with the result that they are subject to dutiable treatment, the duty
suspension does not eliminate the inconsistency with Article II:1(b) for these products
and therefore this dutiable treatment is inc onsistent with Article II:1(b) of the GATT
1994.
(e) The European Communities fails to accord treatment no less favourable than that set
forth in its Schedule to the commerce of the other WTO Members, in particular
certain flat panel display devices that ar e capable of receiving and reproducing video
images both from an automatic data-processing machine and from a source other than
an automatic data-processing machine, or th at have a DVI interface, whether or not
they are capable of receiving signals from another source. Thus, the European
Communities is inconsistent with Artic le II:1(a) of the GATT 1994. This
inconsistency is not eliminated by the duty suspension with respect to certain
products in dispute falling within the sc ope of the FPDs narrative description or
within the scope of CN code 8471 60 90 because the duty suspension measure does

not eliminate the failure to accord treatme nt no less favourable to the commerce of
the other WTO Members.
8.5 With respect to item 4 in the Annex to Commission Regulation No. 634/2005 and items 2, 3
and 4 in the Annex to Commission Regulation No. 2171/2005:
(a) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that are capable of receiving and reproducing video images both from an
automatic data-processing machine and from a source other than an automatic data-
processing machine, that fall within th e scope of the FPDs narrative description
and/or within the scope of the CN code 8471 60 90, under dutiable headings.
Because the concessions call for duty-free treat ment of products falling within their
scope, this dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(b) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that have a DVI interface, whether or not they are capable of receiving
signals from another source, that fall within the scope of the FPDs narrative
description and/or within the scope of the CN code 8471 60 90, under dutiable
headings. Because the concessions call for duty-free treatment of products falling
within their scope, this dutiable treatment is inconsistent with Article II:1(b) of the
GATT 1994.
(c) Given the duty suspension currently in effect for certain products in dispute falling
within the scope of the FPDs narrative descr iption or within the scope of CN code
8471 60 90, the inconsistency with Article II:1(b) referred to in subparagraphs (a) and
(b) above is eliminated because the duties are suspended and hence are not in excess
of those provided for in the EC Schedule.
(d) For those products in dispute falling within the scope of the FPDs narrative
description or within the scope of CN c ode 8471 60 90 and that are not covered by
the duty suspension with the result that they are subject to dutiable treatment, the duty
suspension does not eliminate the inconsistency with Article II:1(b) for these products
and therefore this dutiable treatment is in consistent with Article II:1(b) of the
GATT 1994.
(e) The European Communities fails to accord treatment no less favourable than that set
forth in its Schedule to the commerce of the other WTO Members, in particular
certain flat panel display devices that ar e capable of receiving and reproducing video
images both from an automatic data-processing machine and from a source other than
an automatic data-processing machine, or th at have a DVI interface, whether or not
they are capable of receiving signals from another source. Thus, the European
Communities is inconsistent with Artic le II:1(a) of the GATT 1994. This
inconsistency is not eliminated by the duty suspension with respect to certain
products in dispute falling within the sc ope of the FPDs narrative description or
within the scope of CN code 8471 60 90 because the duty suspension measure does
not eliminate the failure to accord treatme nt no less favourable to the commerce of
the other WTO Members.

2. STBCs
8.6 With respect to the CNEN 2008/C 112/03 whic h operates in conjunction with the CN, the
Panel finds that:
(a) The measures direct national customs authorities to classify under dutiable headings
some set top boxes which incorporate a device performing a recording or reproducing
function and retain the essential character of a set top box and that fall within the
scope of the STBCs narrative description in the Annex to the EC Schedule. Because
the concession calls for duty-free treatment of products falling within its scope, this
dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(b) The measures direct national customs authorities to classify under dutiable headings
some set top boxes which utilise ISDN, WLAN or Ethernet technology, and that fall
within the scope of the STBCs narrative description in the Annex to the EC Schedule.
Because the concession calls for duty-free tr eatment of products falling within its
scope, this dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(c) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to such set top boxes than that provided for under
the STBCs narrative description in the A nnex to the EC Schedule and thus the
measures are also inconsistent with Article II:1(a) of the GATT 1994.
(d) The United States has failed to meet its burden to establish a prima facie case that the
products at issue fall within the scope of concessions arising under CN codes
8517 50 90, 8517 80 90, 8525 20 99 and/or 8528 12 91 of the EC Schedule.
Therefore, the United States has failed to establish that the measures are inconsistent
with Articles II:1(a) and II:1(b) of th e GATT 1994 because the concessions require
duty-free treatment for the products falling within their scope.
8.7 With respect to claims regarding the consistency of the CNEN 2008/C 112/03 with Article X,
the Panel finds that:
(a) The European Communities failed to publish promptly CNEN 2008/C 112/03, such
as to enable governments and traders to b ecome acquainted with them, and has thus
acted inconsistently with Article X:1 of the GATT 1994.
(b) The European Communities has not acted inconsistently with Article X:2 of the
GATT 1994 with respect to the Octobe r 2006 CNEN amendment because the
complainants did not establish that the Eu ropean Communities enforced the October
2006 CNEN amendment before its official publication as CNEN 2008/C 112/03 in
the EU Official Journal on 7 May 2008.
(c) The European Communities has acted incons istently with Article X:2 of the GATT
1994 with respect to the April 2007 CNEN amendment by enforcing the April 2007
CNEN amendment before its official publication as CNEN 2008/C 112/03 in the EU
Official Journal on 7 May 2008.
3. MFMs
8.8 With respect to item 1of the Annex to Commission Regulation No. 517/1999, the Panel finds
that:

(a) The regulation requires dutiable treatment of certain ADP MFMs that fall within the
scope of the concession for "input or ou tput units" in HS1996 subheading 8471 60 of
the EC Schedule. Because the concession calls for duty-free treatment of products
falling within its scope, this dutiable treatmen t is inconsistent with Article II:1(b) of
the GATT 1994.
(b) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.
(c) The regulation requires dutiable treatment of certain non-ADP MFMs that fall within
the scope of the concession for "facsimile machines" in HS1996 subheading 8517 21
of the EC Schedule. Because the concessi on calls for duty-free treatment of products
falling within its scope, this dutiable treatmen t is inconsistent with Article II:1(b) of
the GATT 1994.
(d) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certain non-ADP MFMs than that provided for
under the EC Schedule and thus the measures are also inconsistent with Article II:1(a)
of the GATT 1994.
8.9 With respect to the 2005 Statement, the Panel finds that:
(a) Because the measure has guided and serves to guide the European Communities
uniform application of the common custom s tariff in a way that results in the
application of duties to those ADP MFMs that fall within the duty-free concession,
the measure is inconsistent with Article II:1(b) of the GATT 1994.
(b) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.
(c) Because the measure has guided and serves to guide the European Communities
uniform application of the common custom s tariff in a way that results in the
application of duties to those non-ADP MFMs that fall within the duty-free
concession, the measure is inconsistent with Article II:1(b) of the GATT 1994.
(d) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certain non-ADP MFMs than that provided for
under the EC Schedule and thus the measures are also inconsistent with Article II:1(a)
of the GATT 1994.
8.10 With respect to item 4 of the Annex to Commission Regulation No. 400/2006, the Panel finds
that:
(a) The regulation requires dutiable treatment of certain ADP MFMs that fall within the
scope of the concession for "input or ou tput units" in HS1996 subheading 8471 60 of
the EC Schedule. Because the concession calls for duty-free treatment of products
falling within its scope, this dutiable treatmen t is inconsistent with Article II:1(b) of
the GATT 1994.

(b) By virtue of the inconsistency with Artic le II:1(b) of the GATT 1994, the regulation
accords treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.
(c) The regulation does not require the dutiable treatment of non-ADP MFMs with a
facsimile function. Therefore, th e European Communities has not acted
inconsistently with Article II:1(b) of the GATT 1994 with respect to non-ADP MFMs
with a facsimile function as the measure does not impose duties in excess of those
provided for in the EC Schedule.
8.11 With respect to the CN2007, the Panel finds that:
(a) The three relevant CN2007 codes require th at certain ADP MFMs which fall within
the scope of the duty-free concession for input or output units of an ADP in
subheading 8471 60 of the EC Schedule be charged a duty of 6 per cent. Therefore,
with respect to these products, the measure is inconsistent with Article II:1(b) of the
GATT 1994.
(b) By virtue of the inconsistency with Article II:1(b) of the GATT 1994, the CN2007
accords treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.
(c) The three relevant CN2007 codes require that certain non-ADP MFMs which fall
within the scope of the duty-free concession for "facsimile machines" in subheading
8517 21 of the EC Schedule be charged a duty of 6 per cent. Therefore, with respect
to these products, the measure is inconsistent with Article II:1(b) of the GATT 1994.
(d) By virtue of the inconsistency with Article II:1(b) of the GATT 1994, the CN2007
accords treatment less favourable to certain non-ADP MFMs than that provided for
under the EC Schedule and thus the measures are also inconsistent with Article II:1(a)
of the GATT 1994.
4. Nullification and impairment
8.12 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed
under a covered agreement, the action is considered prima facie to cons titute a case of nullification or
impairment of benefits under that agreement. Acco rdingly, we conclude that to the extent that the
European Communities has acted in consistently with Articles II:1( a), II:1(b), X:1 and X:2 of the
GATT 1994, it has nullified or impaired benefits accruing to the United States under that agreement.
5. Recommendations
8.13 Pursuant to Article 19.1 of the DSU, having found that the European Communities has acted
inconsistently with Articles II:1(a), II:1(b), X:1, and X:2 of the GATT 1994, we recommend that the
Dispute Settlement Body request the European Co mmunities to bring the relevant measures into
conformity with its obligations under the GATT 1994.

8.14 We recall that the European Communities has indicated that the Commission Regulation Nos.
634/2005 and 2171/2005 would be repealed.
1938 In addition, the European Communities has indicated
that Commission Regulation Nos. 517/1999 and 400/2006 would be repealed as of October 2009. 1939
However, there is no evidence properly before the Panel confirming such repeal. Therefore, the Panel
has proceeded on the basis that the said measures are in force.

1938 European Communities' first written submission, para. 95; European Communities' second written
submission, para. 63.
1939 European Communities' response to Panel question No. 110.

B. COMPLAINT BY THE JAPAN (DS376): CONCLUSIONS OF THE PANEL
1. FPDs
8.15 Japan has made claims with respect to Council Regulation 2658/87, as amended, CNEN
2008/C 133/01, Commission Regulation Nos. 634/2005 and 2171/2005. The Panel analyzed how
these measures worked in conjunction with and in the absence of the duty suspension under Council
Regulation No. 179/2009.
8.16 With respect to the CNEN 2008/C 133/01, which operates in conjunction with the CN, the
Panel finds that:
(a) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that are capable of receiving and reproducing video images both from an
automatic data-processing machine and from a source other than an automatic data-
processing machine, that fall within th e scope of the FPDs narrative description
and/or within the scope of the CN code 8471 60 90, under dutiable headings.
Because the concessions call for duty-free treat ment of products falling within their
scope, this dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(b) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that have a DVI interface, whether or not they are capable of receiving
signals from another source, that fall within the scope of the FPDs narrative
description and/or within the scope of the CN code 8471 60 90, under dutiable
headings. Because the concessions call fo r duty-free treatment of products falling
within their scope, this dutiable treatment is inconsistent with Article II:1(b) of the
GATT 1994.
(c) Given the duty suspension currently in effect for certain products in dispute falling
within the scope of the FPDs narrative descr iption or within the scope of CN code
8471 60 90, the inconsistency with Article II:1(b) referred to in subparagraphs (a) and
(b) above is eliminated because the duties are suspended and hence are not in excess
of those provided for in the EC Schedule.
(d) For those products in dispute falling within the scope of the FPDs narrative
description or within the scope of CN c ode 8471 60 90 and that are not covered by
the duty suspension with the result that they are subject to dutiable treatment, the duty
suspension does not eliminate the inconsistency with Article II:1(b) for these products
and therefore this dutiable treatment is inc onsistent with Article II:1(b) of the GATT
1994.
(e) The European Communities fails to accord treatment no less favourable than that set
forth in its Schedule to the commerce of the other WTO Members, in particular
certain flat panel display devices that ar e capable of receiving and reproducing video
images both from an automatic data-processing machine and from a source other than
an automatic data-processing machine, or th at have a DVI interface, whether or not
they are capable of receiving signals from another source. Thus, the European
Communities is inconsistent with Artic le II:1(a) of the GATT 1994. This
inconsistency is not eliminated by the duty suspension with respect to certain
products in dispute falling within the sc ope of the FPDs narrative description or
within the scope of CN code 8471 60 90 because the duty suspension measure does

not eliminate the failure to accord treatme nt no less favourable to the commerce of
the other WTO Members.
8.17 With respect to item 4 in the Annex to Commission Regulation No. 634/2005 and items 2, 3
and 4 in the Annex to Commission Regulation No. 2171/2005:
(a) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that are capable of receiving and reproducing video images both from an
automatic data-processing machine and from a source other than an automatic data-
processing machine, that fall within th e scope of the FPDs narrative description
and/or within the scope of the CN code 8471 60 90, under dutiable headings.
Because the concessions call for duty-free treat ment of products falling within their
scope, this dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(b) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that have a DVI interface, whether or not they are capable of receiving
signals from another source, that fall within the scope of the FPDs narrative
description and/or within the scope of the CN code 8471 60 90, under dutiable
headings. Because the concessions call fo r duty-free treatment of products falling
within their scope, this dutiable treatment is inconsistent with Article II:1(b) of the
GATT 1994.
(c) Given the duty suspension currently in effect for certain products in dispute falling
within the scope of the FPDs narrative descr iption or within the scope of CN code
8471 60 90, the inconsistency with Article II:1(b) referred to in subparagraphs (a) and
(b) above is eliminated because the duties are suspended and hence are not in excess
of those provided for in the EC Schedule.
(d) For those products in dispute falling within the scope of the FPDs narrative
description or within the scope of CN c ode 8471 60 90 and that are not covered by
the duty suspension with the result that they are subject to dutiable treatment, the duty
suspension does not eliminate the inconsistency with Article II:1(b) for these products
and therefore this dutiable treatment is inc onsistent with Article II:1(b) of the GATT
1994.
(e) The European Communities fails to accord treatment no less favourable than that set
forth in its Schedule to the commerce of the other WTO Members, in particular
certain flat panel display devices that ar e capable of receiving and reproducing video
images both from an automatic data-processing machine and from a source other than
an automatic data-processing machine, or th at have a DVI interface, whether or not
they are capable of receiving signals from another source. Thus, the European
Communities is inconsistent with Artic le II:1(a) of the GATT 1994. This
inconsistency is not eliminated by the duty suspension with respect to certain
products in dispute falling within the sc ope of the FPDs narrative description or
within the scope of CN code 8471 60 90 because the duty suspension measure does
not eliminate the failure to accord treatme nt no less favourable to the commerce of
the other WTO Members.

2. STBCs
8.18 With respect to the CNEN 2008/C 112/03 whic h operates in conjunction with the CN, the
Panel finds that:
(a) The measures direct national customs authorities to classify under dutiable headings
some set top boxes which incorporate a device performing a recording or reproducing
function and retain the essential character of a set top box and that fall within the
scope of the STBCs narrative description in the Annex to the EC Schedule. Because
the concession calls for duty-free treatment of products falling within its scope, this
dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(b) The measures direct national customs authorities to classify under dutiable headings
some set top boxes which utilise ISDN, WLAN or Ethernet technology, and that fall
within the scope of the STBCs narrative description in the Annex to the EC Schedule.
Because the concession calls for duty-free tr eatment of products falling within its
scope, this dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(c) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to such set top boxes than that provided for under
the STBCs narrative description in the A nnex to the EC Schedule and thus the
measures are also inconsistent with Article II:1(a) of the GATT 1994.
3. MFMs
8.19 With respect to item 1of the Annex to Commission Regulation No. 517/1999, the Panel finds
that:
(a) The regulation requires dutiable treatment of certain ADP MFMs that fall within the
scope of the concession for "input or ou tput units" in HS1996 subheading 8471 60 of
the EC Schedule. Because the concession calls for duty-free treatment of products
falling within its scope, this dutiable treatmen t is inconsistent with Article II:1(b) of
the GATT 1994.
(b) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.
(c) The regulation requires dutiable treatment of certain non-ADP MFMs that fall within
the scope of the concession for "facsimile machines" in HS1996 subheading 8517 21
of the EC Schedule. Because the concessi on calls for duty-free treatment of products
falling within its scope, this dutiable treatmen t is inconsistent with Article II:1(b) of
the GATT 1994.
(d) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certain non-ADP MFMs than that provided for
under the EC Schedule and thus the measures are also inconsistent with Article II:1(a)
of the GATT 1994.
8.20 With respect to the 2005 Statement, the Panel finds that:

(a) Because the measure has guided and serves to guide the European Communities
uniform application of the common custom s tariff in a way that results in the
application of duties to those ADP MFMs that fall within the duty-free concession,
the measure is inconsistent with Article II:1(b) of the GATT 1994.
(b) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.
(c) Because the measure has guided and serves to guide the European Communities
uniform application of the common custom s tariff in a way that results in the
application of duties to those non-ADP MFMs that fall within the duty-free
concession, the measure is inconsistent with Article II:1(b) of the GATT 1994.
(d) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certain non-ADP MFMs than that provided for
under the EC Schedule and thus the measures are also inconsistent with Article II:1(a)
of the GATT 1994.
8.21 With respect to item 4 of the Annex to Commission Regulation No. 400/2006, the Panel finds
that:
(a) The regulation requires dutiable treatment of certain ADP MFMs that fall within the
scope of the concession for "input or ou tput units" in HS1996 subheading 8471 60 of
the EC Schedule. Because the concession calls for duty-free treatment of products
falling within its scope, this dutiable treatmen t is inconsistent with Article II:1(b) of
the GATT 1994.
(b) By virtue of the inconsistency with Artic le II:1(b) of the GATT 1994, the regulation
accords treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.
(c) The regulation does not require the dutiable treatment of non-ADP MFMs with a
facsimile function. Therefore, th e European Communities has not acted
inconsistently with Article II:1(b) of the GATT 1994 with respect to non-ADP MFMs
with a facsimile function as the measure does not impose duties in excess of those
provided for in the EC Schedule.
8.22 With respect to the CN2007, the Panel finds that:
(a) The three relevant CN2007 codes require th at certain ADP MFMs which fall within
the scope of the duty-free concession for input or output units of an ADP in
subheading 8471 60 of the EC Schedule be charged a duty of 6 per cent. Therefore,
with respect to these products, the measure is inconsistent with Article II:1(b) of the
GATT 1994.
(b) By virtue of the inconsistency with Article II:1(b) of the GATT 1994, the CN2007
accords treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.

(c) The three relevant CN2007 codes require that certain non-ADP MFMs which fall
within the scope of the duty-free concession for "facsimile machines" in subheading
8517 21 of the EC Schedule be charged a duty of 6 per cent. Theref ore, with respect
to these products, the measure is inconsistent with Article II:1(b) of the GATT 1994.
(d) By virtue of the inconsistency with Article II:1(b) of the GATT 1994, the CN2007
accords treatment less favourable to certain non-ADP MFMs than that provided for
under the EC Schedule and thus the measures are also inconsistent with Article II:1(a)
of the GATT 1994.
4. Nullification and impairment
8.23 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed
under a covered agreement, the action is considered prima facie to cons titute a case of nullification or
impairment of benefits under that agreement. Acco rdingly, we conclude that to the extent that the
European Communities has acted inconsistently with Articles II:1(a) and II:1(b) of the GATT 1994, it
has nullified or impaired benefits accruing to Japan under that agreement.
5. Recommendations
8.24 Pursuant to Article 19.1 of the DSU, having found that the European Communities has acted
inconsistently with Articles II:1(a) and II:1(b) of the GATT 1994, we recommend that the Dispute
Settlement Body request the European Communities to bring the relevant measures into conformity
with its obligations under the GATT 1994.
8.25 We recall that the European Communities has indicated that the Commission Regulation Nos.
634/2005 and 2171/2005 would be repealed.1940 In addition, the European Communities has indicated
that Commission Regulation Nos. 517/1999 and 400/2006 would be repealed as of October 2009. 1941
However, there is no evidence properly before the Panel confirming such repeal. Therefore, the Panel
has proceeded on the basis that the said measures are in force.

1940 European Communities' first written submission, para. 95; European Communities' second written
submission, para. 63.
1941 European Communities' response to Panel question No. 110.

C. C
OMPLAINT BY THE CHINESE TAIPEI (DS377): CONCLUSIONS OF THE PANEL
1. FPDs
8.26 Chinese Taipei has made claims with respect to Council Regulation 2658/87, as amended,
CNEN 2008/C 133/01, Commission Regulation Nos. 634/2005 and 2171/2005. The Panel analyzed
how these measures worked in conjunction with and in the absence of the duty suspension under
Council Regulation No. 179/2009.
8.27 With respect to the CNEN 2008/C 133/01, which operates in conjunction with the CN, the
Panel finds that:
(a) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that are capable of receiving and reproducing video images both from an
automatic data-processing machine and from a source other than an automatic data-
processing machine, that fall within th e scope of the FPDs narrative description
and/or within the scope of the CN code 8471 60 90, under dutiable headings.
Because the concessions call for duty-free treat ment of products falling within their
scope, this dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(b) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that have a DVI interface, whether or not they are capable of receiving
signals from another source, that fall within the scope of the FPDs narrative
description and/or within the scope of the CN code 8471 60 90, under dutiable
headings. Because the concessions call fo r duty-free treatment of products falling
within their scope, this dutiable treatment is inconsistent with Article II:1(b) of the
GATT 1994.
(c) Given the duty suspension currently in effect for certain products in dispute falling
within the scope of the FPDs narrative descr iption or within the scope of CN code
8471 60 90, the inconsistency with Article II:1(b) referred to in subparagraphs (a) and
(b) above is eliminated because the duties are suspended and hence are not in excess
of those provided for in the EC Schedule.
(d) For those products in dispute falling within the scope of the FPDs narrative
description or within the scope of CN c ode 8471 60 90 and that are not covered by
the duty suspension with the result that they are subject to dutiable treatment, the duty
suspension does not eliminate the inconsistency with Article II:1(b) for these products
and therefore this dutiable treatment is inc onsistent with Article II:1(b) of the GATT
1994.
(e) The European Communities fails to accord treatment no less favourable than that set
forth in its Schedule to the commerce of the other WTO Members, in particular
certain flat panel display devices that ar e capable of receiving and reproducing video
images both from an automatic data-processing machine and from a source other than
an automatic data-processing machine, or th at have a DVI interface, whether or not
they are capable of receiving signals from another source. Thus, the European
Communities is inconsistent with Artic le II:1(a) of the GATT 1994. This
inconsistency is not eliminated by the duty suspension with respect to certain
products in dispute falling within the sc ope of the FPDs narrative description or
within the scope of CN code 8471 60 90 because the duty suspension measure does

not eliminate the failure to accord treatme nt no less favourable to the commerce of
the other WTO Members.
8.28 With respect to item 4 in the Annex to Commission Regulation No. 634/2005 and items 2, 3
and 4 in the Annex to Commission Regulation No. 2171/2005:
(a) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that are capable of receiving and reproducing video images both from an
automatic data-processing machine and from a source other than an automatic data-
processing machine, that fall within th e scope of the FPDs narrative description
and/or within the scope of the CN code 8471 60 90, under dutiable headings.
Because the concessions call for duty-free treat ment of products falling within their
scope, this dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(b) In the absence of the duty suspension under Council Regulation No. 179/2009, the
measures direct national customs authorities to classify some flat panel display
devices that have a DVI interface, whether or not they are capable of receiving
signals from another source, that fall within the scope of the FPDs narrative
description and/or within the scope of the CN code 8471 60 90, under dutiable
headings. Because the concessions call for duty-free treatment of products falling
within their scope, this dutiable treatment is inconsistent with Article II:1(b) of the
GATT 1994.
(c) Given the duty suspension currently in effect for certain products in dispute falling
within the scope of the FPDs narrative descr iption or within the scope of CN code
8471 60 90, the inconsistency with Article II:1(b) referred to in subparagraphs (a) and
(b) above is eliminated because the duties are suspended and hence are not in excess
of those provided for in the EC Schedule.
(d) For those products in dispute falling within the scope of the FPDs narrative
description or within the scope of CN c ode 8471 60 90 and that are not covered by
the duty suspension with the result that they are subject to dutiable treatment, the duty
suspension does not eliminate the inconsistency with Article II:1(b) for these products
and therefore this dutiable treatment is inc onsistent with Article II:1(b) of the GATT
1994.
(e) The European Communities fails to accord treatment no less favourable than that set
forth in its Schedule to the commerce of the other WTO Members, in particular
certain flat panel display devices that ar e capable of receiving and reproducing video
images both from an automatic data-processing machine and from a source other than
an automatic data-processing machine, or th at have a DVI interface, whether or not
they are capable of receiving signals from another source. Thus, the European
Communities is inconsistent with Artic le II:1(a) of the GATT 1994. This
inconsistency is not eliminated by the duty suspension with respect to certain
products in dispute falling within the sc ope of the FPDs narrative description or
within the scope of CN code 8471 60 90 because the duty suspension measure does
not eliminate the failure to accord treatme nt no less favourable to the commerce of
the other WTO Members.
2. STBCs
8.29 With respect to the CNEN 2008/C 112/03 whic h operates in conjunction with the CN, the
Panel finds that:

(a) The measures direct national customs authorities to classify under dutiable headings
some set top boxes which incorporate a device performing a recording or reproducing
function and retain the essential character of a set top box and that fall within the
scope of the STBCs narrative description in the Annex to the EC Schedule. Because
the concession calls for duty-free treatment of products falling within its scope, this
dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(b) The measures direct national customs authorities to classify under dutiable headings
some set top boxes which utilise ISDN, WLAN or Ethernet technology, and that fall
within the scope of the STBCs narrative description in the Annex to the EC Schedule.
Because the concession calls for duty-free tr eatment of products falling within its
scope, this dutiable treatment is inconsistent with Article II:1(b) of the GATT 1994.
(c) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to such set top boxes than that provided for under
the STBCs narrative description in the A nnex to the EC Schedule and thus the
measures are also inconsistent with Article II:1(a) of the GATT 1994.
8.30 With respect to claims regarding the consistency of the CNEN 2008/C 112/03 with Article X,
the Panel finds that:
(a) The European Communities failed to publish promptly CNEN 2008/C 112/03, such
as to enable governments and traders to b ecome acquainted with them, and has thus
acted inconsistently with Article X:1 of the GATT 1994.
(b) The European Communities has not acted inconsistently with Article X:2 of the
GATT 1994 with respect to the Octobe r 2006 CNEN amendment because the
complainants did not establish that the Eu ropean Communities enforced the October
2006 CNEN amendment before its official publication as CNEN 2008/C 112/03 in
the EU Official Journal on 7 May 2008.
(c) The European Communities has acted incons istently with Article X:2 of the GATT
1994 with respect to the April 2007 CNEN amendment by enforcing the April 2007
CNEN amendment before its official publication as CNEN 2008/C 112/03 in the EU
Official Journal on 7 May 2008.
3. MFMs
8.31 With respect to item 1of the Annex to Commission Regulation No. 517/1999, the Panel finds
that:
(a) The regulation requires dutiable treatment of certain ADP MFMs that fall within the
scope of the concession for "input or ou tput units" in HS1996 subheading 8471 60 of
the EC Schedule. Because the concession ca lls for duty-free treatment of products
falling within its scope, this dutiable treatmen t is inconsistent with Article II:1(b) of
the GATT 1994.
(b) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.

(c) The regulation requires dutiable treatment of certain non-ADP MFMs that fall within
the scope of the concession for "facsimile machines" in HS1996 subheading 8517 21
of the EC Schedule. Because the concessi on calls for duty-free treatment of products
falling within its scope, this dutiable treatmen t is inconsistent with Article II:1(b) of
the GATT 1994.
(d) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certain non-ADP MFMs than that provided for
under the EC Schedule and thus the measures are also inconsistent with Article II:1(a)
of the GATT 1994.
8.32 With respect to the 2005 Statement, the Panel finds that:
(a) Because the measure has guided and serves to guide the European Communities
uniform application of the common custom s tariff in a way that results in the
application of duties to those ADP MFMs that fall within the duty-free concession,
the measure is inconsistent with Article II:1(b) of the GATT 1994.
(b) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.
(c) Because the measure has guided and serves to guide the European Communities
uniform application of the common custom s tariff in a way that results in the
application of duties to those non-ADP MFMs that fall within the duty-free
concession, the measure is inconsistent with Article II:1(b) of the GATT 1994.
(d) By virtue of the inconsistency with Arti cle II:1(b) of the GATT 1994, the measures
accord treatment less favourable to certain non-ADP MFMs than that provided for
under the EC Schedule and thus the measures are also inconsistent with Article II:1(a)
of the GATT 1994.
8.33 With respect to item 4 of the Annex to Commission Regulation No. 400/2006, the Panel finds
that:
(a) The regulation requires dutiable treatment of certain ADP MFMs that fall within the
scope of the concession for "input or ou tput units" in HS1996 subheading 8471 60 of
the EC Schedule. Because the concession ca lls for duty-free treatment of products
falling within its scope, this dutiable treatmen t is inconsistent with Article II:1(b) of
the GATT 1994.
(b) By virtue of the inconsistency with Artic le II:1(b) of the GATT 1994, the regulation
accords treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.
(c) The regulation does not require the dutiable treatment of non-ADP MFMs with a
facsimile function. Therefore, the European Communities has not acted inconsistently
with Article II:1(b) of the GATT 1994 with respect to non-ADP MFMs with a
facsimile function as the measure does not im pose duties in excess of those provided
for in the EC Schedule.

8.34 With respect to the CN2007, the Panel finds that:
(a) The three relevant CN2007 codes require th at certain ADP MFMs which fall within
the scope of the duty-free concession for input or output units of an ADP in
subheading 8471 60 of the EC Schedule be charged a duty of 6 per cent. Therefore,
with respect to these products, the measure is inconsistent with Article II:1(b) of the
GATT 1994.
(b) By virtue of the inconsistency with Article II:1(b) of the GATT 1994, the CN2007
accords treatment less favourable to certa in ADP MFMs than that provided for under
the EC Schedule and thus the measures are al so inconsistent with Article II:1(a) of
the GATT 1994.
(c) The three relevant CN2007 codes require that certain non-ADP MFMs which fall
within the scope of the duty-free concession for "facsimile machines" in subheading
8517 21 of the EC Schedule be charged a duty of 6 per cent. Therefore, with respect
to these products, the measure is inconsistent with Article II:1(b) of the GATT 1994.
(d) By virtue of the inconsistency with Article II:1(b) of the GATT 1994, the CN2007
accords treatment less favourable to certain non-ADP MFMs than that provided for
under the EC Schedule and thus the measures are also inconsistent with Article II:1(a)
of the GATT 1994.
4. Nullification and impairment
8.35 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed
under a covered agreement, the action is considered prima facie to cons titute a case of nullification or
impairment of benefits under that agreement. Accordingly, we concl ude that to the extent that the
European Communities has acted in consistently with Articles II:1( a), II:1(b), X:1 and X:2 of the
GATT 1994, it has nullified or impaired benefits accruing to Chinese Taipei under that agreement.
5. Recommendations
8.36 Pursuant to Article 19.1 of the DSU, having found that the European Communities has acted
inconsistently with Articles II:1(a), II:1(b), X:1, and X:2 of the GATT 1994, we recommend that the
Dispute Settlement Body request the European Co mmunities to bring the relevant measures into
conformity with its obligations under the GATT 1994.
8.37 We recall that the European Communities has indicated that the Commission Regulation Nos.
634/2005 and 2171/2005 would be repealed.
1942 In addition, the European Communities has indicated
that Commission Regulation Nos. 517/1999 and 400/ 2006 would be repealed as of October 2009. 1943
However, there is no evidence properly before the Panel confirming such repeal. Therefore, the Panel
has proceeded on the basis that the said measures are in force.

1942 European Communities' first written submission, para. 95; European Communities' second written
submission, para. 63.
1943 European Communities' response to Panel question No. 110.