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Report of the Panel

I. Introduction

A. Background

1.1.
On 14 August 1997, Korea requested consultations with the United States regarding "the failure of the United States to revoke the anti-dumping duty order on DRAMs from Korea" (WT/DS99/1). Korea made its request pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the DSU), Article XXIII:1 of the General Agreement and Article 17.3 of the Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade (the AD Agreement).
1.2.
Pursuant to this request, Korea consulted with the United States in Geneva on 9 October 1997. No mutually satisfactory solution was reached.
1.3.
On 6 November 1997, Korea requested the establishment of a panel with the standard terms of reference provided by Article 7 of the DSU (WT/DS99/2). Korea made this request pursuant to Article 6 of the DSU, Article XXIII:2 of the General Agreement and Article 17.5 of the AD Agreement.

B. Establishment and Composition of the Panel

1.4.
At its meeting on 16 January 1998, the Dispute Settlement Body (the DSB) established a panel pursuant to Korea’s request (WT/DS99/3). The Panel’s terms of reference are:

To examine, in the light of the relevant provisions of the covered agreements cited by Korea in document WT/DS99/2 the matter referred to the DSB by Korea in that document and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements. (WT/DS/99/3.)

1.5.
Pursuant to a request by Korea, and as provided in paragraph 7 of Article 8 of the DSU, on 19 March 1998, the Director-General accordingly composed the Panel as follows:

Chairman: Mr. Crawford Falconer

Members: Mr. Meinhard Hilf

Ms. Marta Lemme

C. Panel Proceedings

1.6.
The Panel met with the Parties on 18/19 June 1998 and on 21/22 July 1998.
1.7.
On 18 September 1998, the Chairman of the Panel informed the DSB that the Panel would not be able to issue its report within six months of the composition and establishment of the terms of reference of the Panel. The reasons for the delay are set out in WT/DS99/4.
1.8.
The Panel submitted its interim report to the parties on 23 October 1998. On 6 November 1998 both parties submitted written requests for the Panel to review precise aspects of the interim report, no further meeting with the Panel was requested. The Panel submitted its final report to the parties on 4 December 1998.

II. Factual Aspects

A. The Original Anti-Dumping Duty Investigation

2.1.
On 22 April 1992, Micron Technologies, Inc. ("Micron")1 filed an anti-dumping duty petition with the International Trade Commission ("ITC") and the Department of Commerce ("DOC") against imports of DRAMs of one megabit or above, whether assembled or unassembled, from the Republic of Korea.
2.2.
On 10 May 1993 pursuant to an investigation, the DOC issued an Anti-Dumping Duty Order and Amended Final Determination for DRAMs from Korea.2 The notice corrected certain clerical errors and found anti-dumping margins of 0.82 percent for Samsung Electronics Co., Ltd ("Samsung"), 4.97 percent for LG Semicon Co., Ltd ("LG Semicon"), 11.16 percent for Hyundai Electronics Co., Ltd (Hyundai) and 3.85 percent for all others. The parties appealed the DOC's Final Determination to the U.S. Court of International Trade, which remanded the case to the DOC to correct certain errors. In its 24 August 1995 Redetermination on Remand, the DOC found corrected dumping margins of 0.22 percent for Samsung (de minimis), 4.28 percent for LG Semicon, 5.15 percent for Hyundai and 4.55 percent for all others.

B. The First Administrative Review

2.3.
The DOC initiated the first annual review of DRAMs from Korea on 15 June 1994 and investigated whether the Korean companies made sales of DRAMs less than normal value, (i.e. dumped) during the period of review. In its 6 May 1996 Final Results, the DOC found that LG Semicon and Hyundai had not dumped during the period of review.3

C. The Second Administrative Review

2.4.
The DOC initiated the Second Administrative Review on 15 June 19954 and then investigated whether Hyundai and LG Semicon made sales of DRAMs less than normal value during the period of review. The DOC published its Final Results on 7 January 1997, and found that Hyundai and LG Semicon had not dumped during the period of review.5

D. The Third Administrative Review

2.5.
On 8 May 1996, the DOC published a Notice of Opportunity to Request Administrative Review for the period of 1 May 1995 to 30 April 1996.6 On 29 and 31 May 1996, LG Semicon and Hyundai, respectively, asked the DOC to conduct an administrative review and to revoke the anti-dumping duty order. On 25 June 1996, the DOC initiated the Third Annual Review of DRAMs from Korea, covering the period of 1 May 1995 to 30 April 1996. At the same time the DOC initiated a revocation review pursuant to a request from the respondents under section 353.25(a) (2) of the DOC regulations to revoke the DRAMs from Korea order in part.7
2.6.
On 24 July 1997, the DOC issued its Final Results and Determination Not to Revoke Order in Part ("Final Results Third Review").8 The DOC found that Hyundai and LG Semicon had not dumped during the period of review.

E. The US Anti-dumping Legislation and Regulation Regarding Revocation

2.7.
The relevant US legislation concerning revocation is set forth in Section 751(d) of the Tariff Act of 1930, as amended, which reads :

The administering authority may revoke, in whole or in part, a countervailing duty order or an anti-dumping duty order or finding, or terminate a suspended investigation, after review under subsection (a) or (b) of this section. The administering authority shall not revoke, in whole or in part, a countervailing duty order or terminate a suspended investigation on the basis of any export taxes, duties, or other charges levied on the export of the subject merchandise to the United States which are specifically intended to offset the countervailable subsidy received.

2.8.
The relevant DOC regulations concerning revocation are set forth in the DOC's Regulations, Section 353.25(a) (2) :

The Secretary [of Commerce] may revoke an order in part if the Secretary concludes that:

(i) One or more producers or resellers covered by the order have sold the merchandise at not less than foreign market value for a period of at least three consecutive years;

(ii) It is not likely that those persons will in the future sell the merchandise at less than foreign market value; and

(iii) For producers or resellers that the Secretary previously has determined to have sold the merchandise at less than foreign market value, the producers or resellers agree in writing to their immediate reinstatement in the order, as long as any producer or reseller is subject to the order, if the Secretary concludes under §353.22(f) that the producer or reseller, subsequent to the revocation, sold the merchandise at less than foreign market value.

III. Findings and recommendations requested by the parties

A. Korea

3.1.
Korea requests the Panel to find that: the United States is not in conformity with its obligations under Articles I, VI and X of the General Agreement of Tariffs and Trade1994 ("GATT 1994") and Articles 2, 3, 5.8, 6, 11.1 and 11.2 of the Agreement on Implementation of Article VI of GATT 1994 ("AD Agreement"). Korea also requests the Panel to suggest that the United States take the following actions: (i) revoke the anti-dumping duty order on DRAMs from Korea; (ii) alter the de minimis standard for reviews of anti-dumping duty orders; and (iii) eliminate the "no likelihood/not likely" criterion provided for in section 353.25(a) (2) (ii) of the DOC regulations, and otherwise conform its revocation scheme to the requirements of Article 11 of the AD Agreement.

B. United States

3.2.
The United Sates requests the Panel to find that:

(a) Korea’s claims under Articles 1, 2, 3 and 17 of the AD Agreement are inadmissible (with the exception of claims under Articles 2.1, 2.2, 2.2.1.1, and 3.1) ;

(b) Korea’s claims concerning the 1993 final determinations by the DOC and the ITC on DRAMs from Korea are inadmissible;

(c) The DOC’s Final Results Third Review is not inconsistent with Article 11 of the AD Agreement or any other provision of the AD Agreement or GATT 1994;

(d) The United States anti-dumping statute and regulations are not inconsistent with Article 11 of the AD Agreement or any other provision of the AD Agreement or GATT 1994;

(e) The above measures do not nullify or impair benefits accruing to Korea under the AD Agreement or GATT 1994.

IV. Main arguments of the parties

A. Preliminary Objections

4.1.
The United States raises preliminary objections concerning the admissibility of certain claims made by Korea.
4.2.
Korea asserts that all claims are properly before the Panel, and that all of the United States' preliminary objections should be rejected.

1. Admissibility of Korea's Claims Concerning Articles 1, 2, 3, and 17 of the AD Agreement

(a) Objection of the United States

4.3.
The following are the arguments of the United States in support of its preliminary objection:
4.4.
The United States argues that the Panel must reject as inadmissible Korea’s claims concerning Articles 1, 2, 3, and 17 of the AD Agreement. In its request for consultations, Korea did not identify these provisions. Therefore, claims based on these provisions did not constitute part of the "matter" for which consultations were requested under Article 17.3 of the AD Agreement. As a result, the claims based on these provisions also did not constitute part of the "matter" that, under Article 17.4 of the AD Agreement, Korea was entitled to refer to the Dispute Settlement Body ("DSB").
4.5.
Article 17.3 of the AD Agreement permits a Member to request consultations concerning a "matter." Article 17.4 of the AD Agreement further permits a Member to refer "the matter" to the DSB -- that is, to request the establishment of a panel. Article 17.5 directs the DSB to establish a panel to examine "the matter." In light of the language used, it is clear that the "matter" for which consultations is requested under Article 17.3, the "matter" referred to the DSB under Article 17.4, and the "matter" to be examined by a panel under Article 17.5, is the same matter. These provisions constitute special or additional rules and procedures. As such, under Article 1.2 of the DSU, they prevail over any inconsistent provisions in the DSU.9
4.6.
A "matter" as used in these provisions consists of the specific claims identified by a Member.10 A "claim," in turn, consists of an identification of the provision of the specific agreement alleged to have been violated.11 Accordingly, because the "matter" to be examined by a panel must be the same "matter" for which consultations were requested, a panel may only consider "claims" that were identified in the request for consultations by means of an identification of the provisions of the specific agreements alleged to have been violated.
4.7.
In its request for consultations, Korea identified Article VI of GATT 1994 and Articles 6 and 11 of the AD Agreement. Korea did not identify Articles 1, 2, 3, or 17 of the AD Agreement. Therefore, claims based on these provisions did not, and could not, constitute part of the matter that Korea properly could refer to the DSB under Article 17.4, nor could claims based on these provisions properly constitute part of the matter to be examined by a panel under Article 17.5.12

(b) Response by Korea

4.8.
In its letter dated 17 June 1998, Korea made the following arguments:
4.9.
The U.S. objection rests, in large part, on a tortured discussion of the relationship between the terms "matter" and "claim." The United States correctly notes that a "matter" is composed of the "claim(s)" that make up that matter and that each claim consists of a challenged measure and the WTO provision the complainant claims the measure violates. But this explication, far from supporting the U.S. objection, confirms Korea’s position. Between a matter and the claims that compose it, the matter is the more general. Thus, a requirement that a matter be identified is far less demanding than a requirement that the claims that make it up be identified. The United States attempts to obscure this truth with a circuitous ramble suggesting that since a matter is composed of claims, any requirement to identify the matter can be met only by identifying each claim it subsumes. But, had the negotiators intended to require a complainant to identify all claims composing its as-yet undrafted complaint in its consultation request, Articles 17.3 and 17.4 would refer to "claims" not "matters." The Panel should reject this baseless attempt to equate the specific with the general, contrary to the obvious intent of the negotiators as shown in the text of the relevant provisions.
4.10.
The United States cited the Appellate Body report in Brazil–Measures Affecting Dessicated Coconut (Dessicated Coconut) to support its objection. However, the passage from that report quoted below confirms that the panel request, not the consultation request, defines the terms of reference:

A panel’s terms of reference are important for two reasons. First, terms of reference fulfil an important due process objective – they give the parties and third parties sufficient information concerning the claims at issue in the dispute in order to allow them an opportunity to respond to the complainant’s case. Second, they establish the jurisdiction of the panel by defining the precise claims at issue in the dispute.13

4.11.
Korea agrees with the approach taken in previous adopted reports that a matter, which includes the claims composing that matter, does not fall within a panel’s terms of reference unless the claims are identified in the documents referred to or contained in the terms of reference.
4.12.
The Panel should reject the attempt by the United States to exclude Korea’s claims concerning Articles 2, 3 and 17 of the AD Agreement on the ground that Korea did not specifically identify these articles in its request for consultations. The Appellate Body and WTO panels uniformly have rejected similar attempts, declaring that the legally relevant question is whether a claim was raised in the request for establishment of a panel. That is because the panel request is the document that generally sets a panel’s terms of reference. These holdings are based on the language of the Dispute Settlement Understanding (the DSU) --a request for consultations must contain merely "an indication of the legal basis for the complaint," but a panel request must provide a "summary of the legal basis of the complaint." The ordinary meaning of these terms is confirmed by the context, object and purpose of the consultation request and the panel request. As the United States itself argued in Japan–Measures Affecting Consumer Photographic Film and Paper (Japan–Film)14, a Member cannot know before consultations, when it makes its request, precisely what the scope of a Respondent’s possible violations of WTO measures might be.15 The consultative process, thus, serves two functions: it allows the complainant to develop a better understanding of the precise nature of the possible violations while, at the same time, it allows the Respondent to develop a better understanding of the complaint and, of course, it provides an opportunity to settle the dispute. Based on the consultations, a complainant must set out the legal basis of its complaint with precision in its panel request. That is what Korea did, and so the Panel should dismiss the US preliminary objection.

(c) Clarification by the United States

4.13.
Pursuant to written questions posed by the Panel,16 the United States clarified its preliminary objections concerning the admissibility of Korea's claims under Articles 1, 2, 3, and 17 of the AD Agreement.
4.14.
The United States is of the view that a claim that was actually raised during consultations may be referred to the DSB. This view was recently confirmed in the Guatemala Cement case, in which the panel concluded that "the ‘matter’ consulted about under Article 17.3, the ‘matter’ referred to the DSB under Article 17.4, and the ‘matter’ to be examined by a panel under Article 17.5, is in each instance the same matter..."17
4.15.
It is the experience of the United States that the investigating authorities of the various WTO Members adhere to the transparency requirements of the AD Agreement with varying degrees of rigor. In the case of those authorities that adhere rigorously to these requirements, such as the US authorities, it would not be unreasonable to expect that a complaining Member would be able to identify its claims with precision in its written request for consultations. However, in the case of authorities that adhere with less rigor to the transparency requirements of the AD Agreement, a Member requesting consultations may not be in a position, as a practical matter, to identify with precision its claims in its written request for consultations. It may be that only during the course of the consultations will the complaining Member be able to identify with precision the alleged violations committed by the investigating authorities in question. Therefore, a Member should be permitted to refer a claim to a panel if it was actually raised during consultations, even though it may not have been included in the written request for consultations.
4.16.
The United States is aware that an identification of the claims on which the parties actually consulted may raise an issue of fact. Normally, there should be documents from the consultations (typically in the form of written questions presented by the complaining Member to the responding Member) that identify the claims actually raised. In the absence of such documentation, a panel should rely on the written request for consultations itself.
4.17.
The United States and Korea consulted with respect to claims under Articles 2.1, 2.2, 2.2.1.1, and 3.1. Although, Korea did not identify Article 5.8 by name, in consultations, Korea did refer to "the 2 percent de minimis margin threshold of the AD Agreement."
4.18.
The United States and Korea did not consult with respect to claims under Article 1 or Article 17. Moreover, as previously noted by the United States, Article 1 was not included in Korea’s request for the establishment of a panel.

(d) Clarification by Korea:

4.19.
Pursuant to a question posed by the Panel,18Korea states that:
4.20.
Korea and the United States consulted regarding Articles 2 and 3 of the AD Agreement. Korea intended to advance no arguments under Article 1. Article 17.6 is a procedural provision that applies to this Panel proceeding as a matter of course.
4.21.
Korea further clarified its position in response to another question by the Panel:19
4.22.
Korea does not take the position that the United States "violated" Article 17.6 in the same sense that it violated Articles 2, 5.8, 6, 11.1 and 11.2 of the Anti-Dumping Agreement and Articles I, VI and X of the General Agreement.

2. Admissibility of Claims Regarding the Scope of the US Anti-Dumping Order

(a) Objection of the United States

4.23.
The following are the arguments of the United States in support of its preliminary objection:
4.24.
The Panel must dismiss Korea’s claim because the original anti-dumping investigation on DRAMs from Korea simply is not subject to the AD Agreement. Article 18.3 of the AD Agreement provides:

Subject to subparagraphs 3.1 and 3.2, the provisions of this Agreement shall apply to investigations, and reviews of existing measures, initiated pursuant to applications which have been made on or after the date of entry into force for a Member of the WTO Agreement.

4.25.
The application ("petition" in US terminology) for anti-dumping duties in the instant case was made on 22 April 1992, and resulted in a final determination by the DOC on 23 March 1993. As noted previously, the DOC issued an anti-dumping order (definitive duties) on 10 May 1993. Thus, the investigation began and finished well before 1 January 1995, the date on which the WTO Agreement entered into force for the United States. Therefore, determinations made by US authorities in the course of that investigation are not subject to the provisions of the AD Agreement and may not be reviewed by this Panel.
4.26.
The Appellate Body reached a similar conclusion in the Desiccated Coconut case. That case dealt with the transition provision for countervailing duties contained in Article 32.3 of the Agreement on Subsidies and Countervailing Measures ("SCM Agreement"), a provision that the Appellate Body found to be "identical" to Article 18.3 of the AD Agreement.20 The Appellate Body described Article 32.3 (and, thus, Article 18.3) as follows:

The Appellate Body sees Article 32.3 of the SCM Agreement as a clear statement that for countervailing duty investigations or reviews, the dividing line between the application of the GATT 1947 system of agreements and the WTO Agreement is to be determined by the date on which the application was made for the countervailing duty investigation or review. Article 32.3 has limited application only in specific circumstances where a countervailing duty proceeding, either an investigation or a review, was underway at the time of entry into force of the WTO Agreement. This does not mean that the WTO Agreement does not apply as of 1 January 1995 to all other acts, facts and situations which come within the provisions of the SCM Agreement and Article VI of the GATT 1994. However, the Uruguay Round negotiators expressed an explicit intention to draw the line of application of the new WTO Agreement to countervailing duty investigations and reviews at a different point in time from that for other general measures. Because a countervailing duty is imposed only as a result of a sequence of acts, a line had to be drawn, and drawn sharply, to avoid uncertainty, unpredictability and unfairness concerning the rights of states and private parties under the domestic laws in force when the WTO Agreement came into effect.21

4.27.
By challenging a determination made before the WTO Agreement came into effect, Korea is attempting to undo the sharp line drawn by the drafters and generate the very uncertainty, unpredictability, and unfairness that the drafters sought to avoid. The Panel should reject this attempt by dismissing Korea’s claim regarding the determination made by the DOC and the ITC during the original anti-dumping investigation.

(b) Response by Korea

4.28.
In a letter to the Panel dated 17 June 1998, Korea made the following arguments in response to the US preliminary objection:
4.29.
The Panel has the authority and is obliged to examine Korea’s claims regarding the scope of the US anti-dumping order because: (i) not reviewing the claim would allow the United States to act inconsistently with the AD Agreement; and (ii) reviewing the claim would be consistent with the Vienna Convention on the Law of Treaties ("Vienna Convention").
4.30.
When the WTO Agreement entered into force for the United States, the United States assumed the obligation not to act after that date in a manner inconsistent with the AD Agreement regardless of when the application for anti-dumping duties was made. The United States’ continued imposition of the flawed scope decision made in the original investigation and each instance of the United States’ bringing within the proceeding a higher density chip constitute action inconsistent with the AD Agreement. According to Article 18.3 of the AD Agreement, the provisions of the AD Agreement apply to reviews of existing measures made on or after the date of entry into force of the WTO Agreements. The Third Review in this proceeding was initiated on 8 May 1996, thus Korea’s claim regarding the continuing flawed scope determination would be properly before the Panel.
4.31.
The application of the AD Agreement in this case would not constitute retroactive application of the AD Agreement. According to Article 28 of the Vienna Convention:

Unless a different intention appears from the treaty or is otherwise established, its provisions do not bind a party in relation to any act or fact which took place or any situation which ceased to exist before the date of the entry into force of the treaty with respect to that party. (Emphasis added by Korea.)

4.32.
The United States’ continued imposition of the flawed scope decision has not "ceased to exist" and, thus, is subject to the AD Agreement. The United States’ continued imposition of the flawed scope decision subject to the AD Agreement is an act occurring after 1 January 1995, as is each instance of the United States’ bringing within the proceeding a higher density chip.

(c) Rebuttal arguments made by the United States

4.33.
At the second meeting of the Panel, the United States made the following additional arguments:
4.34.
Korea's claims under Articles 2 and 3 are vulnerable to attack on all fronts. In its first written submission, Korea complained about two, and only two, decisions by the United States. First, Korea alleged that the Commission, in its original investigation, failed to include DRAMs with densities of less than one megabit in its injury analysis. Second, Korea alleged that the DOC, by issuing an anti-dumping order that covered DRAMs of one megabit or above, improperly included products that were not in existence at the time of the original investigation. According to Korea’s first submission, the scope of the order "includes products such as 64 megabit DRAMs that were not even shipped to the United States until 1996..." These statements and others in Korea’s first submission establish, without doubt, that Korea seeks to overturn determinations made before the WTO entered into force. Such challenges are prohibited by the express terms of Article 18.3 of the AD Agreement. If Korea or the respondents thought these determinations were wrong, they should have challenged them back in 1992-93. Now is too late and beyond the authority of this Panel to entertain.
4.35.
In its rebuttal submission, Korea attempts to make it appear that it is challenging determinations made after 1 January 1995, when the WTO entered into force for the United States. However, Korea never identifies which determinations it is challenging or the basis for its challenge. Is it challenging the questionnaire that the DOC sent out in the third administrative review of the anti-dumping order on DRAMs from Korea? If it is, it has provided no evidence for its claim that respondents reported data for an allegedly new product, 64 megabit ("Meg") DRAM, or that the DOC calculated a dumping margin based on that data. Korea also seems to believe 64 Meg DRAMs were not "in existence" when the original investigation was conducted; were 16 Meg in existence when the original investigation was conducted? And how does Korea define "in existence" – must the DRAM be produced or shipped, and shipped on a commercial basis or is a trial basis good enough? These and other questions are never addressed by Korea and the Panel has no way of answering them largely because the evidence that was before the investigating authorities when they made their original determinations on scope and like product is not before this Panel.
4.36.
In response to a question from the Panel,22 the United States made the following clarification concerning the application of Article 18.3 of the AD Agreement in the context of administrative reviews:
4.37.
The United States considers reviews under section 751(a) of the Tariff Act of 1930, as amended (the "Act"), and section 353.22 of the regulations promulgated by the DOC (commonly referred to as "administrative reviews") to constitute "reviews of existing measures" within the meaning of Article 18.3 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the "AD Agreement"). Administrative reviews contain elements of both an Article 9.3 assessment proceeding (because they determine, inter alia, final liability for duties) and an Article 11.2 review (because they alter the cash deposit rate and may lead to revocation). Accordingly, the relevance of Article 18.3.1 to this case is unclear.
4.38.
In the instant case, the third administrative review of the anti-dumping duty order on DRAMs from Korea (for purposes of determining the amount of duties to be assessed on prior entries, the estimated cash deposit to be required on future entries, and whether the order should be revoked pursuant to section 353.25(a)) is subject to the AD Agreement by virtue of Article 18.3. Korea’s scope challenge, however, is not directed at the administrative review but, rather, at the original investigation. Indeed, Korea is challenging not a new decision on scope in the administrative review, but an immutable aspect of the order which was adopted before the WTO Agreement took effect for the United States.
4.39.
Finally, the United States wishes to emphasize that Article 18.3 is an entry-into-force provision. It is not intended to override the language of the other 17 articles by making all provisions that apply to investigations applicable to reviews. Thus, Article 18.3 does not preempt the AD Agreement’s distinction between investigations and other administrative proceedings.

3. Admissibility of Claims under Article XVI.4 of the Marrakesh Agreement Establishing the World Trade Organization and Article 18.4 of the AD Agreement

(a) Objection of the United States

4.40.
The United States in its oral statement at the second meeting of the Panel with the Parties raised a preliminary objection questioning the admissibility of Korea's claims under Article XVI.4 of the Marrakesh Agreement Establishing the World Trade Organization and Article 18.4 of the AD Agreement. The following are the US arguments in support of its preliminary objection:
4.41.
In its 10 July 1998 rebuttal submission, Korea raises several new claims to which the United States objects. Korea’s claims regarding Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization and Article 18.4 of the AD Agreement are entirely new. These new claims (i) were not consulted on, (ii) were not included in Korea’s panel request, and (iii) heretofore, have not made an appearance in this dispute settlement proceeding. The dispute settlement process under the AD Agreement and the DSU cannot (and does not) condone these types of actions by Korea. It is settled law under the Appellate Body decisions in Bananas III and the India Patents decisions that claims not raised in the request for the establishment of a panel are not within the Panel’s terms of reference and must be dismissed.

(b) Response by Korea

4.42.
In answer to a question by the Panel23 and during the second meeting of the Panel with the Parties, Korea made the following arguments in response to the US preliminary objection:
4.43.
Korea is not making a separate claim because a Member automatically violates Article 18.4 whenever a Member violates another provision of the AD Agreement. Korea takes the same position with respect to claims under Article XVI.4 of the Marrakesh Agreement Establishing the World Trade Organization.24

B. Standard of Review

(a) Submission by the United States

4.44.
The United States submits that Korea seeks to retry the factual issues that were before the DOC in the underlying administrative proceeding. The following are the arguments of the United States in support of this submission:
4.45.
Panel review is not a substitute for proceedings conducted by national investigating authorities. Numerous panels have recognized that the role of panels is not to conduct a de novo review of factual issues. In describing the role of panels when reviewing factual issues, the panel in the Korea – Anti-Dumping Duties on Imports of Polyacetal Resins from the United States (Korean resins) case stated, in part:

The Panel... should [not] substitute its own judgment for that of the KTC as to the relative weight to be accorded to the facts before the KTC. To do so would ignore that the task of the Panel was not to make its own independent evaluation of the facts before the KTC to determine whether there was material injury to the industry in Korea but to review the determination as made by the KTC for consistency with the Agreement, bearing in mind that in a given case reasonable minds could differ as to the significance to be attached to certain facts.25

4.46.
The standard of review to be applied by this Panel is set forth in Article 17.6 of the AD Agreement. In sub-paragraph "(i)," panels are instructed not to substitute their judgment for that of the national investigating authorities:

in its assessment of the facts of the matter, the panel shall determine whether the authorities’ establishment of the facts was proper and whether their evaluation of those facts was unbiased and objective. If the establishment of the facts was proper and the evaluation was unbiased and objective, even though the panel might have reached a different conclusion, the evaluation shall not be overturned....26

4.47.
Moreover, when applying this standard, Article 17.5(ii) directs the Panel to limit its review to the facts that were before the DOC when it made its determination (i.e., the evidence contained in the administrative record).
4.48.
In reviewing legal questions that turn on the proper meaning to be ascribed to the AD Agreement, sub-paragraph "(ii)" of Article 17.6 states:

the panel shall interpret the relevant provisions of the Agreement in accordance with customary rules of interpretation of public international law. Where the panel finds that a relevant provision of the Agreement admits of more than one permissible interpretation, the panel shall find the authorities’ measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations.27

4.49.
Thus, the relevant question in every case is not whether the challenged determination rests upon the best or the "correct" interpretation of the AD Agreement, but whether it rests upon a "permissible interpretation" (of which there may be many). If it does, then this Panel must uphold the determination.
4.50.
The United States, in its oral presentation at the first meeting of the Panel with the Parties, further argued as follows:
4.51.
Both Korea and the United States agree that the applicable standard of review in this dispute is Article 17.6 of the AD Agreement. This standard of review governs the Panel’s review of determinations by administrative agencies such as the DOC in this case. It relates to both factual establishment and evaluation of the facts of the matter, as well as legal interpretation of the AD Agreement.

(i) Article 17.6(i)

4.52.
With respect to its assessment of factual matters before the administrative authorities, Article 17.6(i) provides that the Panel shall do the following:

First: "determine whether the authorities’ establishment of the facts was proper"

This means that the Panel should determine whether the authorities followed procedures for collecting, evaluating, and processing facts during their investigation which were consistent with the requirements of the AD Agreement.

Second: determine whether the authorities’ "evaluation of those facts was unbiased and objective"

This provision means that the Panel must evaluate whether (a) the authorities examined all of the relevant facts before it, including facts which might detract from an affirmative determination, (b) whether adequate explanation has been provided of how the determinations made by the authorities are supported by facts in the record, and (c) whether the authorities based their determinations on an examination of factors required by the AD Agreement.

4.53.
In making this evaluation, Article 17.6(i) directs the Panel not to substitute its judgement of the facts for those of the authorities. There may be situations where the facts in a hotly-contested case such as the one presented in this dispute could lead to more than one conclusion. Thus, there may well be some facts lending support to Korea’s arguments that dumping is not likely. However, there are also many facts -- indeed it is argued, the bulk of the evidence in this case -- supporting the conclusion that dumping is likely. The significance of Article 17.6(i) is that it prohibits the Panel from overturning the evaluation of the authorities as long as the "establishment of the facts was proper" and the "evaluation was unbiased and objective." Thus, if the process by which the domestic authorities established the facts is consistent with the AD Agreement, and the authorities assessed all of the evidence in the record, then the authorities’ determination must be upheld by the Panel if it is supported by a factual basis in the record.
4.54.
This interpretation of Article 17.6(i) is consistent with its text, as well as its object and purpose, as well as with decisions of numerous GATT 1947 panels.

(ii) Article 17.6(ii)

4.55.
Another important aspect of the standard of review is Article 17.6(ii) which addresses procedures for assessing the interpretation of the relevant portions of the AD Agreement. The first sentence of Article 17.6(ii) directs the panel to interpret the relevant provisions of the Agreement in accordance with the customary rules of interpretation of public international law. In the context of practice developed by the Appellate Body and panels, such a direction has meant the application, inter alia, of the provisions of the Vienna Convention. In the typical case, a panel or the Appellate Body has used the Vienna Convention as a tool for determining a single meaning for a particular WTO text. However, Article 17.6(ii) reveals that the negotiators anticipated that it may well be possible for Members’ authorities to interpret the text of provisions of the AD Agreement in more than one "permissible" way. In making the assessment whether there is more than one permissible way to interpret an AD text, the panel could make use of the Vienna Convention to determine whether an interpretation of a particular authority -- such as the United States in this dispute -- is permissible. If the panel finds that the text is susceptible to more than one permissible meaning, then Article 17.6(ii) provides that "the panel shall find the authorities’ measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations."
4.56.
Accordingly, Article 17.6(ii) is intended to provide a certain flexibility -- where the language was undefined or otherwise ambiguous -- for authorities to establish (or maintain) implementing procedures. This is particularly the case such as the instant dispute where the key terms are undefined, such as the terms "necessary" and "warranted" in Article 11.2.
4.57.
The DOC’s decision not to revoke the anti-dumping duty order on DRAMs from Korea rests upon a "permissible" interpretation of Article 11 of the AD Agreement that is based upon both the ordinary meaning of the terms of Article 11, as well as their context and the general object and purpose of the AD Agreement. Moreover, in considering whether the DOC’s determination rests upon a "permissible" interpretation of the relevant WTO provisions, the Panel will discover that the agency assembled a voluminous record. In fact, the DOC compiled an extensive record. The agency then conducted a painstaking, fact-intensive review of that record, including all arguments presented by Hyundai and LG Semicon, before deciding not to revoke the anti-dumping order on DRAMs from Korea. Consistent with Article 17.6(i) of the AD Agreement, the facts of this case were properly established and reasonably supported the determination made by the DOC. Pursuant to Article 17.6(i), the only question is whether the DOC’s establishment of the facts was "proper" and whether its "evaluation of those facts was unbiased and objective." If it was, then Article 17.6(i) of the AD Agreement requires the Panel to uphold this determination.

(b) Rebuttal response by Korea

4.58.
Korea makes the following arguments in rebuttal to the United States submission on standard of review:
4.59.
Unlike the other WTO agreements, the AD Agreement prescribes a standard of review. With regard to review of facts, there is no significant difference in the views of Korea and the United States regarding the appropriate standard of review. However, with regard to review of legal interpretations, the standard proposed by the United States—that the Panel must uphold US interpretations unless Korea proves that they are "forbidden"--finds no support in the text or interpretive assessments of Article 17.6(ii) of the AD Agreement.

(i) In Reviewing Facts, the Panel Should Determine Whether a Reasonable, Unprejudiced Person Would Have Found, Based on the Evidence Before the DOC, That the Facts Reasonably Supported the Conclusions of the DOC.

4.60.
The standard of review regarding assessment of facts is set out in Article 17.6(i) of the AD Agreement:

in its assessment of the facts of the matter, the panel shall determine whether the authorities’ establishment of the facts was proper and whether their evaluation of those facts was unbiased and objective. If the establishment of the facts was proper and the evaluation was unbiased and objective, even though the panel might have reached a different conclusion, the evaluation shall not be overturned.

4.61.
This standard was interpreted by the panel in the recent decision in Guatemala -- Anti-dumping Investigation Regarding Portland Cement from Mexico.28 There, at paragraphs 7.54 through 7.57, the Panel cited as sensible and consistent with the standard of review under Article 17.6(i) the approach spelled out by the Panel in United States -- Measures Affecting Softwood Lumber from Canada.29 As set forth by the Guatemala -- Cement panel:

[W]e are to examine whether the evidence relied on by the Ministry was sufficient, that is, whether an unbiased and objective investigating authority evaluating that evidence could properly have determined that sufficient evidence of dumping, injury, and causal link existed to justify initiating the investigation.30

4.62.
There is no significant dispute between Korea and the United States regarding this standard, but there is total disagreement as to its application in this dispute. Korea establishes that the DOC based its determination not to revoke on unverified information and mere conjecture from the US petitioner, while failing to consider fairly and objectively verified and verifiable information submitted by the Korean Respondent companies. Korea is confident that the Panel will share its view that, given the evidence in the DOC’s record, an unbiased and objective person would have concluded that, even assuming that DOC’s criteria for revocation were consistent with the United States’ WTO obligations, the Korean Respondent companies satisfied them. Korea does not accept that the DOC’s revocation criteria are permissible under the WTO, but even assuming for the sake of argument that they are, the United States made a determination that is not supportable under the Article 17.6(i) standard of review.

(ii) In Reviewing Legal Interpretations, the Panel Should Follow the Interpretive Rules of the Vienna Convention; There is no Basis for virtually total deference to the DOC, as Argued by the United States.

4.63.
The standard of review regarding legal interpretation is set out in Article 17.6(ii) of the AD Agreement:

[T]he panel shall interpret the relevant provisions of the Agreement in accordance with customary rules of interpretation of public international law. Where the panel finds that a relevant provision of the Agreement admits of more than one permissible interpretation, the panel shall find the authorities’ measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations.

4.64.
The United States, focusing on the second sentence of this provision, argues that the legal interpretation of the United States regarding Article 11 of the AD Agreement must be upheld unless it is "forbidden."
4.65.
The United States ignores the first sentence of Article 17.6(ii), which mandates the Panel in the first instance to interpret Article 11 (and the other provisions of the AD Agreement at issue in this dispute) "in accordance with customary rules of interpretation of public international law" (i.e., in accordance with Articles 31 and 32 of the Vienna Convention).
4.66.
One of the world’s leading GATT/WTO scholars, Professor John Jackson, has analyzed Article 17.6(ii) in depth.31 He decisively rejects the extremely deferential standard of review advocated by the United States, based on a thorough review of Article 17, the Vienna Convention and the reasons cited in support of a deferential review standard. First, he establishes that the purpose of the Vienna Convention is to resolve ambiguities in the text of an agreement. Thus, after Article 31 (and, where appropriate, Article 32) is applied, there will be no lingering ambiguities. The second sentence of Article 17.6(ii) will rarely come into play because there usually will not be "more than one permissible interpretation" of Article 11 (or any other provision of the AD Agreement).
4.67.
Second, Professor Jackson demolishes the intellectual underpinnings for application of a deferential standard of review. At pages 202 through 211 of his article, he critiques the applicability in the WTO context of the US court decision that is widely recognized as the model used by the US negotiators in proposing what became Article 17.6(ii) --Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.32 Professor Jackson demonstrates that none of the three bases for deference to administrative agencies that may apply to domestic legal proceedings is relevant in the context of WTO panel reviews. First, unlike domestic legal proceedings, in which an administrative agency has "expertise" regarding its particular regulatory area, no WTO Member has any greater expertise relative to other WTO Members regarding the interpretation and application of provisions of the WTO agreements. In Professor Jackson’s words:

Countries party to an anti-dumping dispute are not delegates whose technical expertise specially qualifies them to make authoritative interpretive decisions. They are, rather, interested parties whose own (national) interests may not always sustain a necessary fidelity to the terms of international agreements.33

4.68.
Next, Professor Jackson demonstrates that the so-called "democracy" rationale is inapplicable. (This is based on the principle that because federal judges in the United States are not elected, judicial deference to agency decisions, which flow from decisions taken by elected presidents and legislators, enhances the legitimacy of administrative decisionmaking.) National authorities are not accountable to the WTO Membership at large; indeed, WTO panels are the Members’ delegates. Thus, the concept of deference to those accountable to the populace has no counterpart in the WTO context.
4.69.
Finally, Professor Jackson dissects and rejects the "efficiency" rationale of Chevron--that a single interpretation by the agency charged to administer a law is preferable to the potential of multiple interpretations by different courts. At page 210 of his article he shows that, in the WTO context, deference to national authorities would lead to the very multiplicity of interpretations that the "efficiency" rationale was meant to prevent:

Whereas in the US administrative law setting there is typically little danger of multiple interpretations of the statutory language by several different agencies, in the GATT/WTO setting multiple interpretations of agreement provisions is precisely one of the problems that panel review is designed to ameliorate.34

4.70.
This extensive analysis of Professor Jackson’s article proves the intellectual deficiencies of the deferential standard of review advocated by the United States. Because the virtually total deference advocated by the United States, in addition to not being mandated by the text of Article 17.6(ii), is intellectually unsound, the Panel should reject it. The Panel should, as commanded by the first sentence of Article 17.6(ii), apply the interpretive rules of the Vienna Convention to the legal interpretations involved in this dispute. When the Panel does so, Korea is confident that it will agree with Korea that the United States has violated its obligations under Articles 2, 5.8, 6, 11.1 and 11.2 of the AD Agreement.

(c) Rebuttal response by the United States

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

C. Burden of Proof

(a) Submission by the United States

4.75.
The United States submits that Korea has the burden of establishing a violation of a provision of a WTO agreement. The following are the arguments of the United States in support of this claim:
4.76.
The fact that the complainant has the burden of proof has been made clear by the Appellate Body in the Wool Shirts case when it stated:

[W]e find it difficult, indeed, to see how any system of judicial settlement could work if it incorporated the proposition that the mere assertion of a claim might amount to proof. It is, thus, hardly surprising that various international tribunals, including the International Court of Justice, have generally and consistently accepted and applied the rule that the party who asserts a fact, whether the claimant or the Respondent, is responsible for providing proof thereof. Also, it is a generally-accepted canon of evidence in civil law, common law and, in fact, most jurisdictions, that the burden of proof rests upon the party, whether complaining or defending, who asserts the affirmative of a particular claim or defence.35

4.77.
This principle is not affected by Korea’s incorrect assertion that anti-dumping measures constitute "derogations" from alleged free-trade principles of the WTO.36 To the contrary, the right conferred by Article VI and the AD Agreement to impose anti-dumping measures forms part of the carefully constructed balance of rights and obligations that make up the WTO free-trade regime. To diminish this right, as suggested by Korea, by characterizing Article VI and the AD Agreement as "derogations" would constitute an impermissible failure to respect this balance.
4.78.
Even if anti-dumping measures could be described as a derogation from, or an "exception" to, such alleged free-trade principles, this would not affect the assignment of the burden of producing evidence of a violation. As the Appellate Body stated in the Hormones case:

The general rule in a dispute settlement proceeding requiring a complaining party to establish a prima facie case of inconsistency with a provision of the SPS Agreement before the burden of showing consistency with that provision is taken on by the defending party, is not avoided by simply describing that same provision as an "exception". In much the same way, merely characterizing a treaty provision as an "exception" does not by itself justify a "stricter" or "narrower" interpretation of that provision than would be warranted by examination of the ordinary meaning of the actual treaty words, viewed in context and in the light of the treaty's object and purpose, or, in other words, by applying the normal rules of treaty interpretation.37

4.79.
More generally, there simply is no justification for treating anti-dumping measures as derogations or exceptions. The case typically cited by proponents of this view is the Pork from Canada case, in which the panel characterized Article VI:3 of GATT 1947, which authorized the imposition of countervailing duties, "as an exception to basic principles of the General Agreement had to be interpreted narrowly and that it was up to the United States, as the party invoking the exception, to demonstrate that it had met the requirements of Article VI:3."38 However, the panel’s statement was conclusory in nature, and the panel cited no authority for the proposition that Article VI was an "exception." Moreover, this aspect of the panel’s decision was dicta, because nothing in the remainder of the panel report indicates that the panel’s characterization of Article VI:3 as an "exception" influenced the panel’s analysis of the matter.
4.80.
Perhaps more significantly, other than Pork from Canada, of the fourteen panel reports following the Wine and Grape Products case that addressed Article VI of GATT 1947 or the Tokyo Round agreements based on Article VI, none of the panels (1) found that Article VI was an exception, (2) imposed the "burden of proof" on the party imposing anti-dumping or countervailing duties, or (3) expressly indicated a requirement to interpret Article VI in a narrow manner. In all of these disputes, the complaining party complied with its burden of producing prima facie evidence of a violation, and the defending party responded with argument and other evidence.
4.81.
Moreover, in the only case thus far to consider Article VI of GATT 1994, both the panel and the Appellate Body refrained from treating Article VI as an "exception." In the Desiccated Coconut case, the Philippines made the "Article VI-as-exception" argument in support of its claim that it could challenge Brazil’s countervailing duty order as a violation of Article VI of GATT 1994.39 Brazil, in turn, argued that Article VI could not be applied independently of the SCM Agreement, and that under the transition rules of the SCM Agreement, the Brazilian determination was not subject to the SCM Agreement. If the Philippines were correct that Article VI is an exception, then both the panel and the Appellate Body presumably would have focused on the violation of the "core rules" of GATT 1994 (Articles I and II) that allegedly occurred after 1 January 1995, and they would have placed the burden on Brazil to establish that its determination was not subject to Article VI. However, neither the panel nor the Appellate Body accepted the Philippines’ "Article VI-as-exception" argument.40
4.82.
Article VI and the AD Agreement do not constitute derogations or exceptions from the rest of the WTO framework. Even if they did, they would be subject to the same rules of interpretation as any other provision of the WTO agreements, and the burden of producing evidence of a violation still would rest with Korea as the complaining party.

(b) Rebuttal response by Korea

4.83.
Korea makes the following arguments in rebuttal to the US position on burden of proof:
4.84.
Korea’s view of the burden of proof in this case is reasonable, balanced and accurate. It is firmly rooted in the decision of the Appellate Body in United States -- Measure Affecting Imports of Woven Wool Shirts and Blouses from India.41 First, Korea initially bears the burden of showing the US violations--it is for Korea "to submit a prima facie case of violation."42 In response, the United States must rebut Korea’s presentation--it is "for the United States to convince the Panel that, at the time of its determination it had respected" its WTO obligations.43 (The United States has chosen not to directly counter Korea’s Article 11 arguments.) Second, Korea need only demonstrate that the United States violated a specific provision. In doing so here, Korea need only present an interpretation of the specific provision, e.g., Article 11, that shows the precise nature of the US violation. Contrary to the assertions of the United States, Korea is not obliged to set forth a "Treatise on the Law of" each of the provisions Korea has demonstrated that the United States has violated. In this case, neither Korea, nor the Panel, need to define precisely the location of the "line of violation" which the United States obviously has crossed. Rather, a demonstration that the United States has crossed that line is sufficient. If a prosecutor can prove that a defendant murdered the victim, does the defendant go free because the prosecutor cannot prove the precise moment in time that the defendant murdered the victim? Certainly not. The violation is established, and that is sufficient for a finding of guilt.

D. Claims under Article 11 of the AD Agreement and Article VI of GATT 1994

1. Limitations Imposed by Article VI of GATT 1994 and Article 11 of the AD Agreement

(a) Claim raised by Korea

4.85.
Korea claims that by virtue of Article VI of GATT 94 and Article 11 of the AD Agreement, a Member may impose a duty only to offset dumping that is causing injury and may maintain a duty only as long and as to the extent necessary to offset dumping that is causing injury. The following are Korea's arguments in support of this claim:
4.86.
Article VI of the General Agreement sets forth the general restrictions and procedures regarding the ability of a Member to impose and maintain anti-dumping duties. Paragraph 1 of Article VI defines and condemns dumping that is causing or threatening material injury to a domestic industry. Paragraph 2 allows a Member to offset or prevent dumping that is causing or threatening injury by imposing a duty in the amount of the margin of dumping. And Paragraph 6(a) establishes the following limitation on a Member’s ability to impose or maintain a duty, stressing that the prohibition of dumping is limited to dumping that is causing or threatening injury:

No contracting party shall levy any anti-dumping... duty on the importation of any product of the territory of another contracting party unless it determines that the effect of the dumping... is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry.

4.87.
Article 11 of the AD Agreement further specifies requirements to achieve the goal of limiting the duration of anti-dumping duties.
4.88.
According to Paragraph 1:

An anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury.

4.89.
To maintain an anti-dumping duty, a Member must establish three elements: that the responding company (i) is dumping and (ii) thereby causing (iii) injury to a domestic industry. A GATT panel reached a similar conclusion regarding Article 9 of the Tokyo Round Anti-Dumping Code, the predecessor of Article 11 of the AD Agreement. In Swedish Stainless Steel Plate, the panel found that "anti-dumping duties were temporary and remedial in nature," and rejected the US argument to the contrary.44 Specifically, the panel concluded: "Article 9.1 obliged Parties to the Agreement not to maintain anti-dumping duties when such duties were no longer necessary to counteract [i] dumping which was [ii] causing [iii] injury."45 The United States refused to allow the adoption of this decision; however, the panel’s interpretation is unassailable.
4.90.
The panel’s conclusion is the clearest statement imaginable of the limits of a Member’s authority to impose anti-dumping duties. It demonstrates, in clear, certain terms, that anti-dumping duties are a derogation from the main thrust of the WTO regime--which is to promote free trade--by clearly defining the temporal limits of anti-dumping duties.46 In other words, when injurious dumping ends, so must the duty.
4.91.
Paragraph 2 of Article 11 of the AD Agreement further specifies the application of the general rule set forth at Paragraph 1. It provides:

The authorities shall review the need for the continued imposition of the duty, where warranted, on their own initiative or, provided that a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty, uponrequest by any interested party which submits positive information substantiating the need for a review. Interested parties shall have the right to request the authorities to examine whether the continued imposition of the duty is necessary to offset dumping, whether the injury would be likely to continue or recur if the duty were removed or varied, or both. If, as a result of the review under this paragraph, the authorities determine that the anti-dumping duty is no longer warranted, it shall be terminated immediately. (Emphasis added by Korea.)

4.92.
The first sentence of Paragraph 2 requires authorities to conduct reviews both: (i) "where warranted" "on their own initiative"; or (ii) "upon request" supported by positive information. The second sentence requires authorities to provide parties the right to request examination of whether dumping is occurring, whether injury would continue if the duty were removed or varied or both. The third sentence requires authorities to terminate immediately any duty that is no longer warranted.
4.93.
Each of the three sentences that compose Paragraph 2 is a directive commanding certain conduct by administering authorities47 to effect the general rule set forth in Paragraph 1. Paragraph 1 is the basic or primary provision of Article 11. It states a general rule limiting the maintenance of anti-dumping duties. Paragraph 2 then sets forth specific administrative requirements to achieve the general directive of Paragraph 1. Thus, the provisions of Paragraph 2 must be interpreted as further establishing and specifying the requirements of Paragraph 1 and Paragraph 2 must be interpreted so as to give life to Paragraph 1.48 Accordingly, in light of Paragraph 1, Paragraph 2 provides a set of procedures to be followed to ensure that a duty is not applied when it is no longer necessary to offset dumping that is causing injury, e.g., where, as in this case, a Respondent is found not to have been dumping.
4.94.
Under Paragraph 1 of Article 11, to maintain the anti-dumping duties in this case, the US Government would have had to establish three elements: (i) that a product was still being dumped and (ii) that the dumping was causing (iii) injury to the domestic industry.
4.95.
However, the United States, itself, determined for over three consecutive years that the product was not being dumped.49 No dumping existed; and no dumping means no injury due to dumping and obviously, no causal relationship between the two non-existent conditions.
4.96.
Nonetheless, the DOC followed its regulations in this case and maintained the anti-dumping duties after it found for three consecutive reviews that no dumping was occurring. Therefore, as applied in this case, the DOC’s regulations and practices violated the obligations of the United States under Article VI of the General Agreement and Article 11.1 of the AD Agreement.
4.97.
The United States also violated Paragraph 2 of Article 11. Paragraph 2 provides that an administering authority must conduct a review upon request by an interested party after a reasonable time elapses and must revoke the duty "immediately" if continued imposition of the duty is not necessary to offset dumping that is causing injury. For three consecutive years, the DOC found that Hyundai and LG Semicon were not dumping. No dumping having been found, the continued imposition of the duty was not "necessary to offset dumping." But, nonetheless, the DOC, following its regulations, failed to terminate the duties immediately. Thus, on their face and as applied, the DOC’s regulations and practices violate Article 11.2 of the AD Agreement and Article VI of the General Agreement.
4.98.
Paragraph 2 of Article 11 requires Members to find that "the continued imposition of the [anti-dumping] duty is necessary to offset dumping." However, the DOC maintained the duty without making this finding.
4.99.
The DOC’s regulations depart from the requirements of Article 11. Under its regulations the DOC may revoke only if a Respondent meets three requirements, one of which is the "no likelihood/not likely" requirement. In the Third Annual Review, the DOC found that Respondents had not met the "no likelihood/not likely" requirement, but this finding cannot serve as the basis for refusing to revoke under Article 11. The DOC failed to find that "the continued imposition of the duty is necessary to offset dumping," as Article 11 requires. Thus, the DOC violated the second sentence of Article 11 (and the third sentence, which requires termination where the Member does not find that continuation is necessary and, thus, finds that the duty is "no longer warranted").50

(b) Response by the United States

4.100.
The following are the United States' arguments in response to Korea's claim:
4.101.
Korean producers have a history of dumping DRAMs in the United States.51 The principal issue in this case is whether the DOC was required to revoke the anti-dumping order maintained by the United States on DRAMs from Korea when Respondents stopped dumping for three consecutive years.
4.102.
Korea believes this obligation can be found in Article 11 of the AD Agreement and Article VI of GATT 1994. This belief is not grounded in an analysis of these agreements which relies upon customary international rules of treaty interpretation.
4.103.
The United States agrees that WTO Members may not assess (or "levy") anti-dumping duties on imports if they are not dumped. This explains why the United States did not assess anti-dumping duties on merchandise produced by Respondents that entered during the period covered by the third administrative review (or during the period covered by the first two administrative reviews, for that matter). In fact, the so-called "retrospective" assessment system maintained by the United States, under which duties are not collected upon importation but only after a determination of dumping, seeks to guarantee this result. Hence, this is not the issue presented by Korea’s submission. The fundamental point on which the United States and Korea differ is whether Article 11 and Article VI required the DOC to revoke the anti-dumping order on DRAMs from Korea as soon as Respondents went three consecutive years without dumping. The United States believes that Korea has failed to meet its burden of producing evidence of a violation because there is no evidence. Nothing in Article VI or the AD Agreement supports Korea’s argument. Indeed, a proper analysis of Article 11 leads to exactly the opposite conclusion.
4.104.
Dumping is a pernicious trade practice which is to be "condemned" if it causes or threatens material injury to an industry in the importing country.52 In 1955, a Working Party report adopted by the CONTRACTING PARTIES to GATT 1947 instructed signatories to "refrain from encouraging dumping... by [their] private commercial enterprises."53
4.105.
The purpose of Article VI and the AD Agreement is to ensure that relief is made available to producers adversely affected by dumping. Under these provisions, a broad framework of rights and obligations has been created which regulates the determination of dumping and the application of remedial anti-dumping duties. Within this framework, WTO Members are free to adopt national standards governing the determination of dumping and the application of anti-dumping duties, as long as such measures rest upon a "permissible" interpretation of the AD Agreement.54
4.106.
Anti-dumping duties are not meant to be permanent measures. The 1959 Report of the Group of Experts on Anti-dumping and Countervailing Duties provided: "[i]t was generally agreed that anti-dumping duties should remain in place only so long as they were genuinely necessary to counteract dumping which was causing or threatening material injury to a domestic industry."55
4.107.
In the 1979 AD Agreement, Article 9 contained two paragraphs which described the obligation of signatories regarding the duration of anti-dumping duties. The first paragraph established the fundamental proposition that "anti-dumping duties shall remain in force only as long as, and to the extent necessary to counteract dumping which is causing injury."56 The second paragraph provided a procedural mechanism by which signatories were to ensure the temporary and remedial character of anti-dumping duties as expressed in Article 9:1. Specifically, Article 9:2 provided:

The investigating authorities shall review the need for the continued imposition of the duty, where warranted, on their own initiative or if any interested party so requests and submits positive information substantiating the need for review.57

4.108.
The only case ever to turn on an interpretation of Article 9 was Plate from Sweden which involved a challenge by Sweden to a 1987 decision by the ITC not to review (pursuant to section 751(b) of the Act) a determination of material injury made in 1973.58 In that case, the panel determined that Article 9:1, by itself, did not constitute an independent legal ground pursuant to which a signatory was obliged to review the continued need for anti-dumping duties.59 This followed, the panel reasoned, from:

The silence of Article 9:1 regarding the means by which a Party was to determine when an anti-dumping duty was no longer necessary within the meaning of that provision, together with the mandatory review procedure specifically provided for in Article 9:2, the purpose of which could only be understood in light of the requirement embodied in Article 9:1, contradicted the view that Article 9:1 by itself obliged Parties to take specific procedural steps to satisfy themselves as to the continued need for the imposition of an anti-dumping duty distinct from those required under Article 9:2.60

4.109.
In the Uruguay Round of multilateral trade negotiations, the basic outline of Article 9 was preserved. Renumbered as Article 11 of the AD Agreement, the first paragraph of the new article is identical to Article 9:1 of the 1979 AD Agreement. Paragraph one continues to state a "general rule" regarding the duration of anti-dumping duties.
4.110.
Paragraph 2 (in new Article 11) has been expanded. It still provides the "specific obligation" to examine whether the continued imposition of anti-dumping duties is "necessary" within the meaning of Article 11.1. However, now, paragraph 2 sets forth in greater detail the administrative procedures needed to fulfill this objective. In addition, the paragraph concludes with a new sentence which states that "[i]f, as a result of the review under this paragraph, the authorities determine that the anti-dumping duty is no longer warranted, it shall be terminated immediately."61
4.111.
Perhaps the biggest change occasioned by the Uruguay Round in this area is the addition of a third paragraph to Article 11. This is the so-called "sunset" provision which requires WTO Members to revoke all anti-dumping measures after five years unless "the authorities determine, in a review initiated before that date on their own initiative or upon a duly substantiated request made by or on behalf of the domestic industry within a reasonable period of time prior to that date, that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury."62
4.112.
Korea never explains how the language of Article 11, or for that matter any other aspect of the AD Agreement, supports its argument. Instead, it simply repeats that if there is no dumping there can be no injury, and if there is no injury, there can be no duty. This can not substitute for a reasoned analysis of Article 11 which is based upon the customary international rules of treaty interpretation prescribed by Article 17.6(ii) of the AD Agreement.
4.113.
In the Reformulated Gasoline case, the Appellate Body concluded that the fundamental rule of treaty interpretation set out in Article 31(1) of the Vienna Convention has "attained the status of a rule of customary or general international law."63 In the Japan Taxes case, the Appellate Body said the same thing about the supplementary means of treaty interpretation set forth in Article 32 of the Vienna Convention.64
4.114.
Article 31 of the Vienna Convention provides that the words of a treaty must form the starting point for the process of interpretation. In this regard, words must be interpreted according to their "ordinary meaning" taking into account their "context" (i.e., other provisions of the treaty) and the "object and purpose" of the agreement.65 While recourse to a treaty’s object and purpose is permissible, it may not override the clear meaning of the text. As the Appellate Body in the Japan Taxes case recognized, a "treaty’s ‘object and purpose’ is to be referred to in determining the meaning of the ‘terms of the treaty’ and not as an independent basis for interpretation."66
4.115.
When the text of a treaty either leaves the meaning ambiguous or obscure, or leads to a manifestly absurd or unreasonable result, Article 32 of the Vienna Convention authorizes recourse to further means of interpretation, including a treaty’s negotiating history. "Moreover, such recourse may be had to verify or confirm a meaning that emerges as a result of the textual approach."67
4.116.
As previously noted, nothing in the text of Articles 11.1 or 11.2 mandates revocation of an anti-dumping order as soon as a Respondent stops dumping. First, as the panel in Plate from Sweden found, the obligation to review the continued need for an anti-dumping order finds expression in the language of Article 11.2, not Article 11.1.68 Secondly, footnote 22 to Article 11.3 expressly states that an anti-dumping duty order may be maintained beyond the initial five-year period even when a Respondent has not dumped during the "most recent assessment proceeding."69 Thirdly, this interpretation of Article 11 is supported by the express requirement in Article 11.2, which did not appear in Article 9 of the 1979 AD Agreement, that interested parties wait "a reasonable period of time" before requesting a revocation review.70 This change in language suggests that national investigating authorities may require, before initiating a revocation review, a "reasonable period of time" to elapse during which no dumping is taking place. Finally, this construction of Articles 11.1 and 11.2 comports with the object and purpose of the AD Agreement, which is to provide a framework within which Members may address injurious dumping through remedial duties.
4.117.
Korea also cannot interpret the language of Article 11 to amount to a requirement that anti-dumping orders must be revoked whenever a Respondent goes three years without dumping. While the first two paragraphs do discuss the "need" for an order and whether an order is "necessary" or "warranted," these words are never defined, and dictionary definitions are not instructive.71 Article 11 simply does not provide that investigating authorities must revoke an order solely because there have been three years of no dumping. Inserting such a requirement into the text would be an impermissible interpretation of Article 11. Moreover, consulting the AD Agreement’s negotiating history confirms this result. This history reveals that Korea and several other Members, including Japan and India, strongly supported a "sunset provision" in the AD Agreement which would have required the automatic revocation (or "termination") of all anti-dumping measures within as little as three years.72 These types of proposals were rejected in favor of the sunset provision now found in Article 11.3, which requires the sunset process to commence after five years, not three. Indeed, if, as argued by Korea, revocation were required as soon as an exporter ceased dumping, Article 11.3 would be superfluous insofar as a consideration of dumping (as opposed to injury) is concerned.
4.118.
In short, Korea’s interpretation of Article 11 is strained and without support. Rather than prescribe the specific circumstances that must lead to revocation, the drafters of Article 11 chose instead to impose upon Members an obligation to "review," under certain circumstances, the "need for the continued imposition" of the anti-dumping order. Once that review is completed, and only if the investigating authority "determine[s] that the anti-dumping duty is no longer warranted" based upon one or more of the reviews described in Article 11.2, must a Member revoke the anti-dumping order.73
4.119.
In the instant case, Respondents asked the DOC to revoke the anti-dumping order on DRAMs from Korea pursuant to section 353.25 of the agency’s regulations. Under this regulation, the DOC does not examine "whether the injury would be likely to continue or recur if the duty were removed or varied."74 Pursuant to section 353.25, the DOC examines whether the "continued imposition of the [anti-dumping] duty [order] is necessary to offset dumping." The DOC does this by examining all of the evidence before it, especially: (i) whether the Respondent has sold the subject merchandise in the United States at not less than normal value for at least three consecutive years; (ii) whether a resumption of less-than-normal-value sales is not likely; and (iii) whether the Respondent has agreed not to resume sales at less than normal value.75
4.120.
Once the Respondents in DRAMs from Korea provided "positive information" (in the form of three years without dumping) substantiating the need for a determination under section 353.25, the United States undertook a factual examination of whether "the continued imposition of the [anti-dumping] duty [order] is necessary to offset dumping." By any measure, the United States satisfied this obligation. The DOC engaged in a painstaking analysis of voluminous data on the administrative record and only then did it determine that the order on DRAMs from Korea was necessary to offset dumping.76
4.121.
The United States, in response to a question from the Panel,77 subsequently further argued as follows:
4.122.
Section 353.25 of the DOC’s regulations sets forth three independent criteria that the agency applies with equal force in every case under the regulation.
4.123.
While the DOC always applies the same criteria in every revocation case under section 353.25(a), the agency must conduct a case-by-case analysis of the evidence in the administrative record to determine if the three criteria have been satisfied. As the United States explained in its first written submission and during the first meeting of the Panel, the DOC has a long history of considering the satisfaction of the first and third criteria to be relevant to whether the second criterion (i.e., the "not likely" criterion) has been satisfied. Indeed, as the DOC explained in the Final Results Third Review:

In evaluating the "not likely" issue in numerous cases, Commerce has considered three years of no dumping margins, plus a Respondent’s certification that it will not dump in the future, plus its agreeing to immediate reinstatement in the order all to be indicative of expected future behavior. In such instances, this was the only information contained in the record regarding the likelihood issue...

In other cases, when additional evidence is on the record concerning the likelihood of future dumping, Commerce is, of course, obligated to consider that evidence. In this regard, in evaluating such record evidence to determine whether future dumping is not likely, the DOC has a longstanding practice of examining all relevant economic factors and other information on the record in a particular case.78

4.124.
Second, all three criteria relate to the concept of necessity because they all bear on whether a Respondent, for which no dumping margins have been found for a three-year period, is likely to resume dumping if the order is revoked. In this regard, it cannot be denied that the imposition of an anti-dumping order is intended to alter the behavior of companies exporting merchandise subject to the order. If the remedy works as intended, the imposition of an anti-dumping order should make dumping less likely to occur than in the absence of the order. However, once the disciplines of an anti-dumping order are terminated (i.e., revoked), a Respondent may resume dumping. Under section 353.25, the DOC seeks to determine, based upon evidence, whether the dumping which had occurred in the past, and which led to the imposition of the order, is likely to recur if the order is revoked. The DOC does this by looking at the Respondent’s past and expected behavior. The Respondent’s past behavior is relevant to the first and second criteria under section 353.25(a). Its expected behavior is relevant to the second and third criteria. If a resumption of dumping is likely should the order be terminated, then a plain reading of the terms of Article 11 indicate that the "continued imposition of the duty is necessary to offset dumping."

(c) Rebuttal arguments made by Korea

4.125.
Korea makes the following arguments in rebuttal to the United States responses:
4.126.
In an attempt to interpret the nature of the obligations imposed by Article 11, the United States asserts:

While the first two paragraphs [of Article 11] do discuss the "need" for an order and whether an order is "necessary" or "warranted," these words are never defined and dictionary definitions are not instructive.79

This amounts to avoidance of interpretation. As they appear in Paragraphs 1 and 2, "need," "necessary" and "warranted" are not terms requiring dictionary interpretation in the first place.

4.127.
Paragraph 1 of Article 11 imposes a clear, substantive obligation upon all Members that use anti-dumping duties:

An anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury. (Emphasis added by Korea.)80

4.128.
Moreover, Paragraph 1, on its face, clearly states that a Member shall not maintain a duty where a Respondent isdumping, but is causing no injury. The Panel, then, should reject the United States’ argument that Article 11 allows a Member to maintain a duty on a Respondent which the Member itself has found, for three-and-one-half consecutive years, is not dumping.
4.129.
The fact that Paragraph 1 does not prescribe specific circumstances requiring revocation (or detail factors to be considered) is inapposite. It establishes a rule of general application--like the vast majority of legal requirements--which Members must follow. Paragraph 2 then establishes procedural guidelines for implementing the Paragraph 1 rule.
4.130.
The United States suggests that the fact that the rule is general means it has no force. This is incorrect. Indeed, the fact that it is general means that it has greater force. Thus, the US assertion that the rule, being "broad-based," gives "wide latitude" to Members is incorrect. The negotiators wisely left the rule in its general form, knowing they could not specify each and every example in which a Member would be required to revoke. They presumably also knew that, if they tried to do so, they would create a "blueprint for avoidance" that would allow the most recalcitrant authorities to maintain duties in ways not specifically prohibited, but nonetheless contrary to the general principles of the AD Agreement. Paragraph 1 is a crystal clear statement of the limits of a Member's ability to impose antidumping duties.
4.131.
Paragraph 2 also is instructive. It provides for a review of "whether the continued imposition of the duty is necessary to offset dumping." The words "is" and "offset" are the keys to this inquiry. The negotiators chose the present-tense verb "is" and tied it to another present-tense verb, "offset." They did not select either "will be" for "is" or "prevent" for "offset." Nor did they permit a forward-looking "likely" analysis. Thus, the forward-looking analysis used by the United States is an impermissible interpretation of this provision.
4.132.
Also, "offset" has a specific meaning in the anti-dumping context. It means to impose a duty on the imported product to re-establish competitive equilibrium or to "offset" the competitive advantage the Respondent has obtained in the Member’s market through low prices. Thus, the word "offset" presumes that dumping is occurring.
4.133.
In sum, contrary to the United States’ assertions,81 the text of Paragraphs 1 and 2 require revocation in this case. The analysis above further establishes that the United States is in violation of its Article 11 obligations.
4.134.
Paragraph 3 Article 11, including Footnote 22, confirm Korea's position on paragraphs 1 and 2. The relevant portions of Paragraph 3 of Article 11, including Footnote 22, are:

Notwithstanding the provisions of paragraphs 1 and 2,[82] any definitive anti-dumping duty shall be terminated on a date not later than five years from its imposition..., unless the authorities determine, in a review initiated before that date..., that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury.22/

22/ When the amount of the anti-dumping duty is assessed on a retrospective basis [as in the US system], a finding in the most recent assessment proceeding... that no duty is to be levied shall not by itself require the authorities to terminate the definitive duty.

4.135.
A number of aspects of Paragraph 3 and its relationship to Paragraphs 1 and 2 illuminate the issues Korea has raised in this case. First, there is no basis to the US claim that Korea’s interpretation of Paragraphs 1 and 2 renders Paragraph 3 superfluous. To the contrary, the US reading of Paragraphs 1 and 2 would render Paragraph 3 surplusage. Paragraphs 2 and 3, interpreted in light of Paragraph 1, impose two very distinct sets of obligations on Members. Korea has demonstrated that after a Member has found that a Respondent has not dumped for three-and-one-half consecutive years, Paragraphs 1 and 2 require revocation. Paragraph 3, in contrast, requires Members either to revoke a duty or re-establish that dumping is causing injury through sunset (or expiry) reviews within five years of the most recent dumping, injury and causation findings. Importantly, this provision applies even where a Member has found that a Respondent has engaged in significant dumping in every single review periodleading up to the sunset (or expiry) review. Thus, Korea’s demonstration of the US violations does not even encroach upon Paragraph 3, much less render it superfluous.83
4.136.
Second, even though Paragraph 3 addresses sunset (or expiry) reviews, an analysis of its provisions may illuminate the meaning and scope of Paragraphs 1 and 2. Paragraph 3 contains language indicating that the negotiators could have, but decided not to, expand a Member’s authority to conduct a forward-looking "likely" analysis in conducting dumping reviews under Paragraph 2. Paragraph 3 requires revocation of a duty no later than five years after its imposition, unless the Member conducts injury and dumping reviews and determines "that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury." In contrast, Paragraph 2 allows a similar inquiry regarding injury only. Paragraph 2 limits dumping reviews to an examination of "whether the continued imposition of the duty is necessary to offset dumping." The use of present-tense language (e.g., "offset dumping" vs. "prevent dumping"), coupled with the omission of the "likely to continue or recur" provision, indicates that a forward-looking analysis is not permitted in regard to Paragraph 2 dumping reviews. The fact that Paragraph 3 specifies a forward-looking "likely to continue or recur" analysis both for dumping and injury (and that Paragraph 2 provides for a "likely" analysis for injury, but not dumping) demonstrates that the negotiators could have chosen to extend a forward-looking analysis to dumping as well as to injury under Paragraph 2, but decided not to and, instead, expressly limited the analysis. The United States should not be permitted to add a requirement to the plain language of Paragraph 2, especially after the negotiators chose not to.
4.137.
Finally, Footnote 22 does not support the US position in any way. Instead, it further confirms Korea’s interpretation of Article 11.
4.138.
The United States would have the Panel believe that Footnote 22 operates as a blanket, fully insulating Members with retrospective regimes from having to revoke a definitive duty after finding no dumping. First, the footnote establishes an exception only under Paragraph 3 (which, of course, is an exception to Paragraphs 1 and 2). Second, the exception applies only to those Members with retrospective regimes. Third, the limit is set at one year ("the most recent assessment proceeding"). Finally, Footnote 22 is discretionary in operation.
4.139.
Most significantly, though, Footnote 22 has nothing to do with this proceeding. The obvious implication is that the exception of Footnote 22 is limited to one year and that, if in the most recent assessment proceedings, the Member repeatedly has found no dumping, the Member’s conduct no longer falls within the special terms of Footnote 22 and the Member must revoke because "[a]n anti-dumping duty shall remain in force only as long as and to the extentnecessaryto counteract dumping which is causing injury." Thus, Footnote 22, which in any case applies only to Paragraph 3, not to Paragraphs 1 and 2, cannot insulate the US conduct at issue here.
4.140.
In any event, the Panel should not countenance the US attempt to: (i) export Footnote 22 from Paragraph 3 and import it into Paragraphs 1 and 2; and then (ii) expand it so as to allow the United States to refuse to revoke (or even conduct an injury investigation) where Respondents were found to have small dumping margins in the six-month period of the original investigation (1992), but have been found not to have dumped in every subsequent review, covering some 42 months.
4.141.
In Swedish Stainless Steel Plate, the panel examined, among other things, Sweden’s claim that the procedures employed by the United States in deciding not to review an injury determination, i.e., a decision not to initiate an injury review, violated Paragraphs 1 and 2 of Article 9 of the 1979 AD Agreement (the predecessors of Paragraphs 1 and 2 of Article 11).84 As the United States concedes by citing this report, although the panel’s conclusions are not part of the WTO acquis (it was not adopted), the panel’s analysis provides useful guidance and its conclusions are well-founded.85 However, the United States has not accurately presented the findings of the panel with respect to Article 9.1/11.1 and 9.2/11.2.
4.142.
According to the United States, "the panel concluded that paragraph 1 did not impose an independent legal obligation upon GATT signatories." This mischaracterizes the panel’s conclusion. Sweden had argued that the United States had breached procedural obligations under both paragraphs 1 and 2.86 In contrast to the US account, the panel actually found that Paragraph 1 imposes a far-reaching substantive obligation and that Paragraph 2 imposes a procedural obligation:

223. The panel noted that under Article 9:1 "An anti-dumping duty shall remain in force only as long as, and to the extent necessary to counteract dumping which is causing injury." Accordingly, Article 9:1 obliged Parties to the Agreement not to maintain anti-dumping duties when such duties were no longer necessary to counteract dumping which was causing injury. However, the text of Article 9:1 did not provide an expressobligation regarding the steps to be taken by Parties to the Agreement in order to make a determination on whether the continued imposition of an anti-dumping duty was necessary to counteract dumping which was causing injury.

224. In contrast, Article 9:2 provided for a specific obligation to "review" the need for the continued imposition of the duty, on the initiative of investigating authorities, or upon a duly substantiated request by any interested party. In the Panel’s view, the purpose of the review procedure under Article 9:2 could only be understood if Article 9:2 was read in the light of Article 9:1. The references in Article 9:2 to "the need for the continued imposition of the duty" and "the need for review" could only be interpreted in a meaningful manner when read in conjunction with the obligationin Article 9:1. Thus, a review under Article 9:2 of "the need for the continued imposition of the duty" was a review of whether that duty continued to be "necessary to counteract dumping which is causing injury". Similarly, "positive information substantiating the need for review" in Article 9:2 necessarily meant information relevant to the issue of whether the anti-dumping duty remained "necessary to counteract dumping which is causing injury."

225. The Panel thus read Article 9:1 as requiring Parties not to maintain anti-dumping duties longer than necessary to counteract dumping which was causing injury, and Article 9:2 as setting forth an obligation of Parties regarding the undertaking of a factual examination of whether the continued imposition of anti-dumping duties was necessary within the meaning of Article 9:1.87

4.143.
Thus, Paragraph 1 of Article 11 does impose substantive legal obligations. Moreover, contrary to the United States’ assertion, it constitutes an independent legal ground obligating revocation in certain cases, including this one. Finally, paragraph 224 of the Panel Report confirms that Paragraph 1 establishes the legal obligation that guides the application and interpretation of Paragraph 2.
4.144.
The United States violated Article 11 of the AD Agreement not only because of the way it applied its revocation scheme in the DRAMs from Korea case, but also because the regime on its face is inconsistent with Article 11 of the AD Agreement.
4.145.
Article 11.1 permits imposition of anti-dumping duties "only as long as and to the extent necessary to counteract dumping which is causing injury." Where the duty is no longer warranted under this standard, Article 11.2 requires that "it shall be terminated immediately."
4.146.
Contrary to the dictates of Article 11, which require revocation when duties are not necessary to counteract dumping which is causing injury, the US revocation scheme permits duties to continue indefinitely except where the Secretary of Commerce, on the basis of unfettered discretion rather than objective criteria, decides to revoke. In addition to the lack of objective criteria and the concomitant existence of unfettered discretion, the US revocation regime also mandates proof of no likelihood of resumption of dumping and forces Respondents, as a condition of revocation, to agree to forgo their rights to an injury determination if the DOC concludes that Respondent has resumed dumping.
4.147.
Thus, this case is not analogous to situations in which legislation permits, but does not mandate, action inconsistent with a WTO obligation. This is not like US Superfund, in which the law directed imposition of a tax inconsistent with Article III of the General Agreement, but provided for the possibility of regulations setting out requirements under which this penalty tax would not be applied.88 Nor is it like Thai Cigarettes, in which a Thai law authorized the imposition of discriminatory excise taxes, but regulations promulgated under the law taxed imported and domestic cigarettes at the same rate.89
4.148.
Unlike US Superfund, Thai Cigarettes and similar disputes, in this case the Secretary of Commerce cannot act in conformity with the obligations of Article 11. Inclusion of the "no likelihood/not likely" criterion and the mandatory cession of the right to an injury review (embedded in a Respondent’s agreement to immediate reinstatement in the anti-dumping duty order), on their face, require action that is inconsistent with the dictates of Article ll.1.
4.149.
Thus, the first, not the second, principle set out in the US Tobacco decision applies:

[T]he Panel recalled that panels had consistently ruled that legislation which mandated action inconsistent with the General Agreement could be challenged as such, whereas legislation which merely gave the discretion to the executive authority of a contracting party to act inconsistently with the General Agreement could not be challenged as such; only the actual application of such legislation inconsistent with the General Agreement could be subject to challenge.90

The US revocation scheme mandates action inconsistent with the WTO AD Agreement and so it can be challenged as such.

4.150.
The US revocation scheme also breaches both of Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization, which requires each Member to "ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements," and of Article 18.4 of the AD Agreement, which mandates that "[e]ach Member shall take all necessary steps… to ensure … the conformity of its laws, regulations and administrative procedures with the provisions of this Agreement...."
4.151.
Thus, the US revocation scheme, on its face, by allowing the US to maintain duties in situations in which Article 11 requires revocation, violates not only Article 11 itself, but also Article 18.4 of the AD Agreement and Article XVI:4 of the Marrakesh Agreement.91

(d) Rebuttal arguments made by the United States

4.152.
The United States makes the following arguments in rebuttal:
4.153.
Article 11.1 does not impose, as Korea seems to suggest, an independent obligation on WTO Members to: (i) revoke anti-dumping orders as soon as dumping stops, and/or (ii) examine dumping and injury as part of every review under Article 11.2.92 With respect to the first point, the plain terms of Article 11.1 simply do not direct a Member to take any action to implement the general principle contained in Article 11.1. There certainly is no language in Article 11.1 which requires WTO Members to revoke (i.e., "terminate") anti-dumping orders as soon as dumping stops.93 With respect to the second point, Article 11.2 cannot be given its full meaning, as it must, if Korea’s interpretation of Article 11.1 is correct (i.e., if Article 11.1 requires an examination of dumping and injury in every review under Article 11). Article 11.2 provides for several different types of reviews. For example, under Article 11.2, investigating authorities are directed to review, in certain instances, whether the "continued imposition of the duty is necessary to offset dumping." These provisions would be a nullity if Korea’s interpretation of Article 11.1 were correct.94
4.154.
The better view of Article 11.1, and the one which comports with the ordinary meaning of its terms, is that Article 11.1 states a general rule which informs the rest of Article 11. The specific obligations established in Article 11 are set forth in Articles 11.2 through 11.5.95 Of these provisions, only Article 11.2 is directly at issue in this case.
4.155.
If the terms of Article 11 are given their ordinary meaning in the context within which they occur, it becomes manifestly apparent that Article 11.2 does not require revocation after one year (or even three years) of no dumping. First, footnote 22 to Article 11.3, disposes of any suggestion that revocation is mandated whenever a Respondent stops dumping. Second, Article 11.2 simply does not prescribe the specific circumstances that must lead to revocation. It certainly does not contain language which mandates revocation in the event that a Respondent goes three years without dumping. Third, a review of the negotiating history of Article 11 reveals that Korea and several other WTO Members supported a provision in the AD Agreement which would have required the automatic revocation (or "termination") of all anti-dumping orders after three years. These types of proposals were rejected in favor of the "sunset" provision now found in Article 11.3, which requires the sunset process to commence after five years. Thus, far from contradicting the plain-text interpretation advanced by the United States, the negotiating history of Article 11 confirms the views of the United States.
4.156.
Finally, Korea’s interpretation of Article 11.2 is at odds with Article 11.3, footnote 22. Under Article 11.3, once every five years, investigating authorities must review, inter alia, whether revocation of the "duty would be likely to lead to continuation or recurrence of dumping...." According to footnote 22, however, "a finding in the most recent assessment proceeding under subparagraph 3.1 of Article 9 that no duty is to be levied shall not by itself require the authorities to terminate the definitive duty." Yet, under Korea’s construction of Article 11.2, any time a Respondent ceases dumping, investigating authorities must immediately terminate (i.e., revoke) the duty. Thus, under Korea’s construction, footnote 22 never can come into play, because a finding of no dumping must result in the immediate revocation of an order. In other words, footnote 22 is superfluous.96
4.157.
In sum, Korea is asking the Panel to go far beyond an interpretation of the AD Agreement and to prescribe the circumstances under which an anti-dumping order must be revoked. As discussed, Korea’s "interpretation" of Article 11 is contrary to the "customary rules of interpretation of public international law" prescribed by Article 17.6(ii) of the AD Agreement and Article 3.2 of the DSU. Furthermore, if Korea’s position were embraced by the Panel and adopted by the Dispute Settlement Body ("DSB"), it would create, contrary to Articles 3.2 and 19.2 of the DSU, a right or obligation where none currently exists.
4.158.
In response to a question by the Panel,97 the United States further argued:
4.159.
In U.S. - Tobacco and the Superfund case, the panels recognized that legislation mandatorily requiring authorities to impose GATT-inconsistent measures, whether or not such legislation has been applied, may constitute a violation of the General Agreement. However, in both of those cases, there existed legislation or regulations providing the authorities with the possibility of avoiding the need to apply the GATT-inconsistent legislation. As a result, the panels concluded that the mere existence of the mandatory, GATT-inconsistent legislation did not, by itself, constitute a violation of the General Agreement.98
4.160.
Thus, where legislation which, "on its face" (or as a matter of law), mandates action inconsistent with Article 11.2, but additional legislative or regulatory provisions permit action consistent with Article 11.2, a Member may not challenge the mandatory piece of legislation until it (or some other enactment) is applied in a manner that violates Article 11.2.
4.161.
In the instant case, section 353.25(a) does not mandate action inconsistent with Article 11.2. and even if it does, other legislative avenues for revocation exist. First, on its face and as applied, section 353.25(a) rests upon a permissible interpretation of Article 11.2. Second, section 353.25(a) is not "mandatory" in the sense that it requires WTO inconsistent action. Indeed, Korea has often said in this proceeding that the regulation allegedly confers upon the Secretary of Commerce "unfettered discretion." As the United States explained at the second meeting of the Panel, the Secretary cannot have the "unfettered discretion" to revoke an anti-dumping order and, at the same time, be required to apply the regulation in a mandatory fashion. The two arguments are mutually exclusive. Finally, even assuming arguendo that section 353.25(a) mandates action inconsistent with Article 11.2, respondents are free to pursue revocation through an Article 11.2-type review under section 751(b) of the Act (and sections 353.22(f) and 353.25(d) of the DOC’s regulations).

2. Secretary of Commerce's Discretion

(a) Claims raised by Korea

4.162.
Korea claims that the DOC’s regulations, including the "no likelihood/not likely" criterion, give the Secretary of Commerce unreasonably broad discretion in making revocation determinations and allow the Secretary to maintain the duty in an arbitrary and unjustifiable manner in violation of Article 11. The following are Koreas arguments in support of this claim:
4.163.
Under US law, the Secretary may, but is not required to, revoke an order if a Respondent meets the three requirements above. Thus, a Respondent has the burden of establishing each of these elements, but even if the Respondent meets this burden, the Secretary nonetheless has the discretion to refuse to revoke the order. Also, the statute and regulations contain absolutely no standards or factors governing the "not likely" determination.
4.164.
The DOC has concurred with this analysis. According to the DOC, this scheme is permitted by the enabling legislation:

DOC’s Position: The applicable statutes and regulations grant the DOC broad discretion in determining whether to revoke an anti-dumping finding. The only relevant statutory provision states: "The administering authority may revoke, in whole or in part, a countervailing duty order or an anti-dumping duty order * * * after a review under this section." 19 U.S.C. section 1675(c) (emphasis supplied). Therefore, except for the requirement for conducting an administrative review, Congress has not specified any procedure that the DOC must follow or any criteria that it must consider in determining whether to revoke a particular anti-dumping duty order. The applicable Commerce regulation, contained in 19 CFR 353.25, preserves the broad discretion granted by Congress, by providing in pertinent part: "[T]he Secretary may revoke an order or terminate a suspended investigation if the Secretary concludes that * * *" In short, the regulation like the governing statute, vests a great deal of discretion in the Secretary to determine the propriety of revocation.99

4.165.
That the Secretary’s discretion not to revoke is utter and complete under US law has been confirmed by the US courts. According to the US Court of International Trade:

· "The language of the regulations indicates that the Secretary is not compelled to grant revocation even when plaintiffs satisfy the requirements for revocation";100

· "The regulation does not present objective criterion for determining whether there is "no likelihood" of resumption of LTFV sales. Instead, the petitioner [the Respondent before the DOC] must establish this fact to the satisfaction of the Secretary";101

· "[The regulation] vests a great deal of discretion in the Secretary to determine the propriety of revocation...."

"[T]he language employed indicates that Commerce is not compelled to grant revocation, as the above noted sections refer to what the Secretary may do when acting on an application for revocation...."

"[E]ven if the administrative reviews reveal that plaintiffs have not been dumping for the periods in question, Commerce may exercise its discretion not to grant revocation";102 and

· "[E]ven assuming the plaintiffs had, as they claim, satisfied all of the requirements for revocation contained in [the regulation], the ITA was not required to grant their request."103

4.166.
These excerpts confirm that the Secretary’s discretion not to revoke an order is unfettered.
4.167.
Finally, the US anti-dumping law and all of the Secretary’s determinations that follow it are completely insulated from domestic claims that the US law (or the Secretary’s determination) violates a US obligation under any of the WTO agreements, including the AD Agreement. Section 102(a) (1) of the Uruguay Round Agreements Act (the legislation implementing the WTO Agreements) provides:

(1) United States Law to Prevail in Conflict.—No provisions of any of the Uruguay Round Agreements, nor the application of any such provision to any person or circumstance, that is inconsistent with any law of the United States shall have effect.

4.168.
Thus, even where the Secretary follows a US law that a reviewing court later finds is inconsistent with a US obligation under a WTO agreement, the court is required by US law to find that the WTO Agreement provision has no effect.
4.169.
The United States’ revocation scheme completely ignores the requirements of Article 11 of the AD Agreement. It fails to recognize that in certain situations, such as that presented here, the AD Agreement requires the Secretary to revoke an order. This is the purpose--the very essence, if you will--of Article 11. Moreover, as applied in the Third Annual Review of DRAMs from Korea, the US scheme violated Article 11.
4.170.
In contrast, the US regime never requires the Secretary to revoke an order. No matter what the circumstances are, the Secretary always has the discretion to refuse to revoke an order. A step-by-step review of the US revocation scheme shows the absolute discretion bestowed on the Secretary.
4.171.
First, the US regulations impose three requirements on a Respondent before revocation will even be considered. In brief they are:

1. three consecutive years of no or de minimis margins104;

2. a showing that dumping is "not likely" to recur (or, that there is "no likelihood" that dumping will recur) ;

3. a written agreement that the duty/order will be reinstated if dumping does recur.105

The key requirement here is the second--the "no likelihood/not likely" requirement--because the DOC found that Respondents met the first and third requirements, but not the second requirement.

4.172.
Under US law, the Respondent bears the burden of establishing that future dumping is "not likely,"106 and this shifting of the burden of proof is, by itself, a violation of Article 11. However, it is exacerbated by the fact that the "no likelihood/not likely" requirement has no "objective criterion" according to the US court that reviews challenged anti-dumping determinations of the DOC:

The regulation does not present an objective criterion for determining whether there is "no likelihood" of resumption of LTFV sales. Instead, the petitioner [the Respondent company seeking revocation] must establish this fact to the satisfaction of the Secretary.107

Thus, the Secretary makes the determination as to whether the Respondent has met the second requirement and, conducts the analysis without consistent reference to transparent and established standards.108

4.173.
Second, even in those cases where the Secretary finds that a Respondent has satisfied all three requirements, the Secretary still has the discretion to not revoke the order. This is because the regulation states only that "[t]he Secretary may revoke" an order where he finds that the three criteria have been met to his satisfaction.109
4.174.
Finally, the Secretary’s exercise of discretion is virtually unrestrained. This is due primarily to US federal court holdings that the decisions of the Secretary are subject to "‘tremendous deference’"110 by the reviewing courts (the CIT and the CAFC), and also to the use of the word "may" in the statute and the regulation.
4.175.
In sum, the "no likelihood/not likely" requirement grants the Secretary unbounded discretion and, even where the Secretary finds that a Respondent has met each of the three requirements, the Secretary can, by executive fiat, refuse to revoke the duties. Because revocation is not a matter of discretion under the WTO, the United States has turned Article 11 on its head. In the United States, revocation is always a matter of discretion, without any regard to WTO requirements, and, as exercised in this case, the US discretion violated Article 11 of the AD Agreement.

(b) Response by the United States

4.176.
The following are the United States' arguments in response to Korea's claim:
4.177.
The Congress of the United States has given the DOC broad discretion in administering the anti-dumping law, in general, and in the revocation of orders, in particular.111 Section 751(d) of the Act states, in part:

... The administering authority may revoke, in whole or in part, a countervailing duty order or an anti-dumping duty order... after [an administrative] review...112

4.178.
Therefore, except to impose a requirement that revocation occur after a review under section 751 of the Act, Congress has not specified the procedures that the DOC must follow, or the criteria that it must consider, in determining whether to revoke an outstanding anti-dumping duty order.113 Instead, like legislatures around the world, Congress delegated to an administrative agency (here, the DOC) the responsibility for working out the details.
4.179.
This is not to say, however, that the DOC can do whatever it wants, as Korea suggests. The agency’s discretion, vis-à-vis interested parties, is limited by its regulations, administrative practice, and relevant administrative law doctrines.114 In the exercise of the authority conferred on it by the Congress, the DOC has promulgated section 353.25 of its regulations which sets out the criteria for revocation.115 This regulation limits the DOC’s discretion to an examination of the issues surrounding the established criteria. Furthermore, in applying the regulation, the DOC has developed an administrative practice, from which it may not deviate unless it provides an explanation.116 For the courts of the United States to uphold a deviation from past practice, the explanation must be consistent with a reasonable interpretation of the law and be supported by substantial evidence on the record of the underlying administrative proceeding.117 Even then, the DOC’s discretion may be further constrained by the legal doctrines of "collateral estoppel"118 and the "law of the proceeding."119
4.180.
In fact, over the years, the DOC’s administrative practice regarding revocation has been exceedingly consistent. The "no likelihood"/"not likely" standard first appeared in the DOC’s regulations in 1980.120 Since then, the DOC has revoked literally hundreds of anti-dumping measures based upon an absence of dumping.
4.181.
Lastly, while Korea is presenting its claim before this Panel that the DOC’s discretion is "unfettered," the Respondents are currently prosecuting a lawsuit in the CIT challenging the DOC’s failure to revoke in the Final Results Third Review.121 If the DOC’s discretion truly was incapable of being checked or regulated by the courts, then Respondents’ lawsuit would be pointless.
4.182.
Korea claims, quite apart from the Final Results Third Review, that the DOC’s regulations confer upon the Secretary of Commerce a level of discretion that violates Article 11 of the AD Agreement. According to Korea, the "not likely" standard in section 353.25(a) of the DOC’s regulations has no "objective criterion." Therefore, the DOC allegedly conducts its analysis "without consistent reference to transparent and established standards."122
4.183.
First, the DOC’s discretion is not "unbounded." The DOC’s discretion is limited by its regulations, administrative practice, and administrative law doctrines.
4.184.
Secondly, while the statute uses the term "may revoke," and the term "not likely" is not defined further in the DOC’s regulations, no panel has ever demanded that a regulation which implements a GATT or WTO obligation must be drafted in such a way as to define each element of the regulation. Indeed, discretionary legislation which arguably permits, but does not require, an administrative agency to promulgate regulations or take other action that is WTO-inconsistent does not, as such, violate the WTO agreements.123 A complaining party must show that the agency actually took WTO-inconsistent action.124
4.185.
Finally, it is hard to understand how the "not likely" standard can be condemned for lacking so-called "objective criteria," when Article 11, itself, lacks such criteria. For example, there is nothing in the AD Agreement that fleshes out the terms "necessary" or "warranted." If these terms lack "objective criteria," is each WTO Member which considers treaties self-executing under its legal and constitutional systems guilty of violating the AD Agreement if it fails to promulgate regulations that further define these terms?
4.186.
The United States, in response to a question from the Panel,125 subsequently further argued as follows:
4.187.
The discretion granted to the Secretary under section 353.25(a) (2) is subject to legal/judicial control. The DOC’s discretion is limited by its regulations, administrative practice, and relevant administrative law doctrines. In addition, in order for a determination by the DOC under section 353.25(a) (2) to be sustained by the US courts, the determination must be consistent with a reasonable interpretation of the law and be supported by substantial evidence on the record of the underlying administrative proceeding.
4.188.
Indeed, the US courts themselves have best explained the legal/judicial controls on the DOC’s discretion. The US Court of International Trade ("CIT") in Manufacturas Industriales De Nogales, S.A. v. United States, 666 F. Supp. 1562, 1565 (Ct. Int’l Trade 1987), declared that the DOC’s discretion is not "unbounded." In addition, the US Court of Appeals for the Federal Circuit, which reviews decisions of the Court of International Trade, has stated:

The Secretary of Commerce (Secretary) has been entrusted with responsibility for implementing the anti-dumping law. The Secretary has broad discretion in executing the law. While the law does not expressly limit the exercise of that discretion with precise standards or guidelines, some general standards are apparent and these must be followed. The Secretary cannot, under the mantle of discretion, violate these standards or interpret them out of existence.126

4.189.
As the United States has discussed, the "general standards" to which the court refers include the expectation that the DOC will examine only those issues related to the criteria set forth in its regulation, the requirement to adhere to prior administrative practice, and the necessity that each decision be based upon substantial evidence contained in the administrative record.127
4.190.
Based upon the manner in which the question has been framed, there is apparent interest by the Panel in whether section 353.25(a) (2) properly reflects the obligations contained in Article 11. The United States maintains that section 353.25(a) (2) actually tracks the obligations contained in Article 11. In this regard, Article 11 requires Members to review whether the continued imposition of a definitive anti-dumping duty is warranted. Similarly, section 353.25(a) (2) requires the DOC, upon proper request, to review whether revocation of an anti-dumping order is appropriate. Moreover, Article 11 requires a Member to terminate the anti-dumping duty if, as a result of a review under Article 11.2, the authorities determine that the anti-dumping duty is no longer warranted. Likewise, section 353.25(a) (2) imposes an obligation on the DOC to revoke the anti-dumping order if the three criteria related to the need for the continued imposition of the order are satisfied.
4.191.
The fact that section 353.25(a) (2) contains the term "may," as opposed to the term "shall," is merely a reflection of the discretion accorded to the DOC by the United States Congress. This discretion is embodied in section 751(d) of the Tariff Act, which states that "the administering authority may revoke, in whole or in part,... an anti-dumping duty order or finding... after review..." The DOC, in promulgating section 353.25(a) (2), determined that revocation of an order will occur if the three criteria set forth in that provision are satisfied. Therefore, the use of the term "may" does not connote an ability to deviate from its practice of revoking an anti-dumping order whenever those three criteria are satisfied.
4.192.
In its second oral statement before the Panel, the United States further argued:
4.193.
Korea also asserts that the United States has misled the Panel by claiming that the DOC has revoked literally hundreds of anti-dumping measures based upon an absence of dumping. The United States has not misled the Panel. First of all, the representation made by the United States is absolutely true and Korea does not present evidence to the contrary. What Korea has done is to recast the statement to cover a different universe of cases -- that is, cases where the DOC received and examined evidence directly bearing on the no likelihood/not likely criterion. This universe of cases, Korea asserts, shows that the DOC only applies the not likely criterion when it wants to "block revocation." However, the United States has already shown that the depth of the agency's analysis under section 353.25 depends, almost exclusively, upon the arguments of the parties and the evidence on the record of the administrative proceeding -- not the whim of the DOC. Secondly, a review of the cases over the past 19 years where the DOC has examined the no likelihood/not likely standard reveals that in a substantial number of cases, the United States revoked the subject order. Now, if the United States only applied the not likely criterion when it wanted to "block revocation," as Korea asserts, wouldn't one expect all, or at least most, of these cases to result in maintenance of the order -- not revocation?

3. Speculative Analysis of Future Dumping

(a) Claim raised by Korea

4.194.
Korea claims that by imposing a "no likelihood/not likely" recurrence of dumping criterion which must be met for an order to be revoked, the United States is in violation of Article 11.2 which does not allow a forward looking analysis in the case of dumping. The following are Korea's arguments in support of that claim:
4.195.
The "no likelihood/not likely" criterion focuses on whether dumping will recur in the future.128 Speculation as to whether dumping will recur is not permitted by Paragraph 2 of Article 11 of the AD Agreement.
4.196.
The relevant sentence of Paragraph 2 is the second:

Interested parties shall have the right to request the authorities to examine whether the continued imposition of the duty is necessary to offset dumping, whether the injury would be likely to continue or recur if the duty were removed or varied, or both.

First, this sentence provides rights to interested parties, thus imposing requirements on Members. Second, it limits Members’ discretion as to the type of analysis they can conduct. Although the sentence allows Members to conduct a forward-looking analysis of whether injury would be likely to continue or recur,129 it does not call for or allow a prospective analysis of whether dumping "would be likely to continue or recur." As revealed in the plain language of the sentence, the negotiators did not extend the "likely to" concept to the dumping context and doing so by implication is impermissible. Rather, regarding dumping, the Member is permitted only to examine "whether the continued imposition of the duty is necessary to offset dumping."130 Where, as here, no dumping has occurred for three consecutive years, the duty is not "necessary to offset dumping" because there is no dumping (much less injury).

4.197.
This analysis is confirmed by a review of Paragraph 3 of Article 11, the so-called "sunset provision." Paragraph 3 requires a Member to revoke a duty no later than five years from its imposition. The only exception to this rule is where a Member conducts a review and determines "that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury" (footnote omitted; emphasis added by Korea). The fact that the negotiators specifically provided for a forward-looking analysis of dumping and applied the word "likely" to cover both dumping and injury in Paragraph 3, but not in Paragraph 2, confirms that such an analysis is not permitted under Paragraph 2 of Article 11.
4.198.
Korea, in response to a question from the Panel131, subsequently further argued as follows:
4.199.
First, as a matter of textual interpretation, there is no relationship between "necessary" in Article 11.1 and "likely" in Article 11.3, and thus a finding of "likelihood" under Paragraph 3 can neither satisfy nor fail to satisfy the "necessary" requirement in Paragraph 1. Paragraph 3 begins: "Notwithstanding the provisions of paragraphs 1 and 2,...." Thus, this Paragraph is an exception from Paragraphs 1 and 2 that is segregable from them and should not be used to interpret those Paragraphs.
4.200.
Second, this point is confirmed by an examination of the differing requirements and standards of Paragraphs 2 and 3. Paragraph 3 requires revocation of a duty no later than five years after its imposition, unless the Member conducts injury and dumping reviews and determines "that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury." In contrast, Paragraph 2 limits dumping reviews to an examination of "whether the continued imposition of the duty is necessary to offset dumping." The use of present-tense language, coupled with the omission of the "likely to continue or recur" provision, indicates that a forward-looking analysis is not permitted in regard to Paragraph 2 dumping reviews. The fact that Paragraph 3 specifies a forward-looking "likely to continue or recur" analysis both for dumping and injury, while Paragraph 2 provides for a "likely" analysis only for injury, demonstrates that the negotiators were aware that they could extend a forward-looking analysis to dumping as well as to injury under Paragraph 2, but decided not to do so. For purposes of Article 11.2, then, the question of whether a duty is "necessary to counteract dumping," as set out in Paragraph 1, is answered by reference to whether "continued imposition of the duty is necessary to offset dumping."
4.201.
The negotiators: (i) chose a "likely" standard for Paragraph 3; (ii) did not change the Paragraph 2 dumping standard; and (iii) included at the start of Paragraph 3 the phrase, "Notwithstanding the provisions of paragraphs 1 and 2." These facts confirm that the United States violated its Article 11 obligations when it conducted a forward-looking analysis of dumping in this case.
4.202.
After finding for three consecutive reviews that no dumping was occurring, the United States should have revoked on that basis alone. Having failed to revoke (in violation of Article 11), the United States should have conducted only the present-tense dumping examination provided for by Paragraph 2; the United States violated Paragraph 2 by conducting a forward-looking analysis. But, even assuming, for the sake of argument, that Paragraph 2 (or, somehow, Paragraph 3) permits the United States to conduct a forward-looking review, the United States violated those provisions: (i) by devolving the likely criterion to "no likelihood/not likely" (which enables the United States to maintain anti-dumping duties years after dumping and any resulting injury have ceased); (ii) by shifting the burden of proof to Respondents; and (iii) by setting the standard so that, in this case at least, it simply could not be met. And the United States took all of these actions and created these insurmountable barriers after finding for three-and-one-half consecutive years that Respondents had not dumped (and, thus, had not caused injury).

(b) Response by the United States

4.203.
The following are the United States arguments in response to Korea's claim:
4.204.
Korea focuses on the time period that the DOC examined when it determined that an absence of dumping by Respondents was "not likely" in Final Results Third Review. In particular, Korea contends that Article 11.2 of the AD Agreement does not permit investigating authorities (i) to examine whether dumping will recur, and (ii) to conduct a "forward-looking analysis." These arguments fail.
4.205.
The United States demonstrated that Article 11 does not require Members to revoke anti-dumping orders as soon as a Respondent stops dumping. Thus, if an order may cover an exporter or reseller that was found not to be dumping during the most recent assessment period, it is only logical that the inquiry under Article 11.2 may, when appropriate, look at whether "dumping will recur." There certainly is nothing in Article 11.2 or the context of the AD Agreement which precludes this type of examination.
4.206.
There also is nothing in Article 11 which defines the time period that investigating authorities must examine when deciding if an order is "necessary to offset dumping." In the instant case, the DOC conducted an extensive analysis of the entire record which included Respondents’ past conduct (e.g., three years of no dumping), as well as data regarding the first part of 1997, which Respondents characterized as a market upturn.132 In describing the temporal scope of its review, the DOC stated, in part:

Common sense, however, dictates that the DOC should, as always, base its determination on all record evidence.

In this revocation proceeding the DOC considered all publicly available data and information placed on the record by all parties...133

4.207.
Korea seeks to pick and choose the information in the record that it thinks is most helpful to Respondents. In doing so, however, it never provides any authority for its position nor explains why an investigating authority should not be allowed to rely on the most current information available when making a determination under Article 11.2.
4.208.
Finally, Korea’s construction of Articles 11.2 and 11.3 and, in particular, its discussion of the term "likely," is flawed. Article 11.2 articulates a relatively broad standard regarding the revocation (or "termination") of anti-dumping duties that implements the "general rule" set forth in Article 11.1. Article 11.3, on the other hand, articulates a very specific standard. It requires WTO Members to revoke all anti-dumping measures after five years unless "the authorities determine... that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury.134 While it is true that Article 11.3 (but not Article 11.2) uses the term "likely" in the dumping context, this does not mean the specific standard does not (or cannot) fit within the more general standard. It simply means the "likely" standard is mandatory in the context of Article 11.3 and a "permissible" interpretation of the AD Agreement in the context of Article 11.2. Indeed, it is impossible to imagine how section 353.25, when it uses a term found in Article 11.2 and Article 11.3, could be anything other than a permissible interpretation of the AD Agreement.
4.209.
The United States, in response to a question from the Panel135, further argued as follows:
4.210.
Article VI and Article 11 address different questions. Article VI asks whether an anti-dumping duty needs to be imposed because an industry currently is being injured by dumped imports. Article 11, on the other hand, takes as a given that the imposition of the definitive anti-dumping duty was necessary to offset injurious dumping. It, therefore, asks whether the "continued imposition of the duty is necessary to offset dumping" or whether the injury originally found would be likely to "continue or recur if the duty were removed or varied" (emphasis added by the United States).
4.211.
The Appellate Body has affirmed, on more than one occasion, that the principles of treaty interpretation laid down in the Vienna Convention should guide panels when they seek to discern the meaning of WTO agreements.136 Article 31 of the Vienna Convention provides that the terms of a treaty must form the starting point for the process of interpretation. In this regard, terms must be interpreted according to their "ordinary meaning" taking into account, inter alia, their "context" (i.e., the other provisions of the agreement).
4.212.
If this approach is followed with respect to the language in Article 11 of the AD Agreement, it becomes quite clear that the provisions of Article 11 do not condition the maintenance of definitive anti-dumping duties (i.e., anti-dumping orders) upon a finding that present dumping is presently causing (or presently threatening to cause) material injury. Specifically, Article 11.2 states that, in conducting a review, authorities must examine, inter alia, "whether the injury would be likely to continue or recur if the duty was removed or varied." This indicates that "recurrence" of injury is reason to keep an order in effect. In other words, that injury may have ceased does not warrant revocation of an order if the revocation is likely to cause injury to recur. Similarly, Article 11.3 allows maintenance of anti-dumping duties beyond five years when "expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury." The "recurrence" language indicates that anti-dumping orders can be maintained when dumping and/or injury do not currently exist, but is likely to recur upon revocation of the order. In sum, it would be inconsistent with Articles 11.2 and 11.3 of the AD Agreement to construe Article 11.1 as requiring that an order be kept in effect only if there is present dumping which is presently causing or presently threatening to cause material injury.
4.213.
In this regard, the panel in the Swedish Plate case found that Article 9.1 of the Tokyo Round Anti-Dumping Code called for a prospective analysis.137 But for the deletion of a comma, Article 9.1 is identical to Article 11.1 of the AD Agreement.

(c) Rebuttal arguments made by Korea

4.214.
Korea makes the following arguments in rebuttal to the United States' response:
4.215.
Paragraph 2 provides for a review of "whether the continued imposition of the duty is necessary to offset dumping." The words "is" and "offset" are the keys to this inquiry. The negotiators chose the present-tense verb "is" and tied it to another present-tense verb, "offset." They did not select either "will be" for "is" or "prevent" for "offset." Nor did they permit a forward-looking "likely" analysis. Thus, the forward-looking analysis used by the United States is an impermissible interpretation of this provision.
4.216.
Paragraph 3 contains language indicating that the negotiators could have, but decided not to, expand a Member’s authority to conduct a forward-looking "likely" analysis in conducting dumping reviews under Paragraph 2. Paragraph 3 requires revocation of a duty no later than five years after its imposition, unless the Member conducts injury and dumping reviews and determines "that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury." In contrast, Paragraph 2 allows a similar inquiry regarding injury only. Paragraph 2 limits dumping reviews to an examination of "whether the continued imposition of the duty is necessary to offset dumping." The use of present-tense language (e.g., "offset dumping" vs. "prevent dumping"), coupled with the omission of the "likely to continue or recur" provision, indicates that a forward-looking analysis is not permitted in regard to Paragraph 2 dumping reviews. The fact that Paragraph 3 specifies a forward-looking "likely to continue or recur" analysis both for dumping and injury (and that Paragraph 2 provides for a "likely" analysis for injury, but not dumping) demonstrates that the negotiators could have chosen to extend a forward-looking analysis to dumping as well as to injury under Paragraph 2, but decided not to and, instead, expressly limited the analysis. The United States should not be permitted to engraft a specious requirement on to the plain language of Paragraph 2, especially after the negotiators chose not to.

(d) Rebuttal arguments made by the United States

4.217.
The United States makes the following arguments in rebuttal:
4.218.
The purpose of the AD Agreement is to ensure that relief is made available to producers adversely affected by dumping. The agreement accomplishes this goal by establishing a broad framework of rights and obligations which regulates the determination of dumping and the application of remedial anti-dumping duties. Within this framework, Article 11 seeks to ensure that anti-dumping measures do not become permanent fixtures that take on a life of their own. In particular, Article 11.1 states the general principle that "[a]n anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury."138
4.219.
Article 11 does not pursue this principle by stating a per se rule which mandates revocation whenever a Respondent goes three years without dumping. Indeed, as the United States has stated repeatedly throughout this dispute settlement proceeding, Article 11 does not prescribe the specific circumstances that must lead to revocation or the factors that an administering authority must consider when deciding if an order is "necessary to offset dumping." The drafters of Article 11 chose instead to impose upon Members an obligation to "review," under certain circumstances, the "need for the continued imposition" of the anti-dumping duty. Once that review is completed, and onlyif the investigating authority "determine[s] that the anti-dumping duty is no longer warranted" based upon one or more of the reviews described in Article 11.2, must a Member revoke an anti-dumping order.
4.220.
Korea’s allegation that Article 11 somehow proscribes a prospective (or "forward-looking") analysis under Article 11.2 is completely without merit. First, Article 11, as discussed, does not define the time period that an investigating authority must examine when deciding if the "continued imposition of the duty is necessary to offset dumping." Second, Article 11.3, footnote 22, clearly permits a Member with a retrospective assessment system, such as the United States, to maintain an anti-dumping duty (i.e., an order) even though the most recent assessment period may have revealed an absence of dumping. Given this fact, it is only logical that the inquiry under Article 11.2 may involve a prospective analysis of whether dumping is likely to resume. Finally, the ordinary meaning of the expression "continued imposition," in Article 11.2, suggests an analysis that goes beyond the immediate question of whether a Respondent is presently dumping. Rather, it suggests a broad inquiry into the anti-dumping order’s continuing necessity -- necessity based upon past and expected behavior. This is precisely the type of inquiry that is provided for under section 353.25(a) of the DOC’s regulations.
4.221.
The United States, in response to a question from the Panel,139 further argued as follows:
4.222.
Article 11 does not indicate what time period should be considered when determining whether the continued imposition of the duty is necessary to offset dumping. In most cases under section 353.25(a), the arguments of the parties determine which time period will be important to the DOC’s analysis. In this regard, the DOC examines current trends that may have some bearing on the foreseeable future (e.g., within the coming year). For example, the existence of inventories and capacity utilization may offer some indication about what is likely to happen in the next few months. Still, high inventories for different industries may have different implications on the period of time which is relevant. Similarly, different industries may have business cycles of different lengths. Therefore, the experience of the United States in administering the anti-dumping duty law suggests that the specific business cycles and trends of the industry in question are relevant. The appropriate time period depends on the facts of each case.
4.223.
With regard to when the relevant time period is set, it is the parties themselves that provide evidence deemed relevant to the inquiry. Thus, the DOC does not "establish" a time period under section 353.25(a). The DOC may conclude as it did in DRAMs from Korea, that, of all the evidence, some is more probative of likelihood of future dumping than others. However, even in this context, the DOC still did not "establish" a time period in the sense of declaring evidence related to a particular time period as irrelevant or inadmissible.

4. Burden of Proof

(a) Claim raised by Korea

4.224.
Korea claims that by applying a revocation requirement that the company subject to an anti-dumping duty prove that it is "not likely" to dump in the future, the United States has shifted the burden of proof away from the Member imposing the duty in violation of Article 11 of the AD Agreement. The following are Korea's arguments in support of this claim:
4.225.
The regulations applied by the DOC in this case allow the Secretary to revoke the anti-dumping duties if it finds that, among other things, "[i]t is not likely that [Respondents will] in the future" dump.140 US courts reviewing these regulations have found that the Respondent bears the burden of proving that it is "not likely" to dump in the future (or, alternatively, that there is "no likelihood" of future dumping).141
4.226.
This formulation unjustifiably shifts the burden of proof from the Member imposing the duty, which must justify continuing the duty, to the responding companies.142 This is contrary to the text and structure of Article 11.
4.227.
First, the "no likelihood/not likely" criterion is inconsistent with the text of Paragraph 2 of Article 11. In Paragraph 2 (unlike Paragraph 3), the word "likely" does not apply to dumping, but only to injury. However, even assuming that it did apply to dumping, the United States has pushed the text of Paragraph 2 still further without support. The United States has turned the "likely" standard on its head, transmogrifying it to "not likely," and requiring Respondents to bear the burden of proving the standard even though Paragraph 2 clearly imposes the burden on Members.
4.228.
Moreover, each sentence of Paragraph 2 either: (i) imposes an obligation on a Member that is maintaining anti-dumping duties (the first and third sentences); or (ii) grants a right to a Respondent company subject to such duties (the second sentence). In doing so, Paragraph 2 sets forth procedures to implement the general directive of Paragraph 1 that anti-dumping duties may be imposed by a Member only to offset dumping that is causing injury. Paragraph 2 does not allow, and cannot reasonably be interpreted to allow, a Member to impose such substantial obligations on Respondents seeking revocation.143
4.229.
Second, the DOC’s shifting of the burden of proof, both in general and in DRAMs from Korea, is inconsistent with the structure of Article 11 and with US obligations under the AD Agreement. As a derogation from the general principle of free trade the WTO regime protects, the right to impose anti-dumping duties is granted, but is tightly circumscribed, by the text of the AD Agreement.144 Where a party has been found to be dumping and thereby injuring a domestic industry, a Member may impose duties. However, this is the limit of the Member’s discretion.
4.230.
Paragraph 1 of Article 11 prohibits a Member from maintaining a duty where no dumping is occurring (or has occurred). And, if a Member is not allowed to impose or maintain a duty absent dumping, it certainly cannot do so and, then, condition revocation on a Respondent’s meeting the burden of proving to the satisfaction of the Member that dumping is "not likely" to recur. Thus, where a Member’s own authorities have concluded--for three consecutive years--that a Respondent has not dumped, the Member is obliged by Article 11 to revoke the duty. On its face, Article 11 does not permit a Member to force a Respondent to bear the burden of proving some speculative "fact."
4.231.
The DOC’s regulations, on their face and as applied, permit the DOC to shift the burden of proof to a Respondent and to employ the "no likelihood/not likely" criteria in a biased fashion. Therefore, the United States has violated and is violating Article 11 of the AD Agreement.

(b) Response by the United States

4.232.
The following are the United States' arguments in response to Korea's claim:
4.233.
Under section 353.25(a) (2) of the DOC’s regulations, an absence of dumping for three years does not entitle a Respondent to revocation.145 The agency must also be satisfied that a resumption of less-than-normal-value sales to the United States by the Respondent is not likely.
4.234.
The DOC’s likelihood determination is case-specific. It engages in a fact-intensive, case-by-case analysis of all of the information on the record in order to determine if a resumption of less-than-normal-value sales to the United States is "not likely."146
4.235.
In administrative proceedings in which the parties do not submit evidence or argument concerning the likelihood of resumption of dumping, the fact that a Respondent has not dumped for three consecutive years and certified that it will not dump in the future may constitute the only evidence in the administrative record on the likelihood issue.147 In such cases (which constitute the vast majority since 1980), the DOC has generally found that a resumption of dumping is not likely based upon the un-controverted record evidence.148 Over the years, this practice has evolved into a de facto presumption that if a Respondent has not dumped within the prior three-year period, it is not likely to resume dumping in the future.149
4.236.
In contrast, in cases in which the parties raise concerns and submit evidence about the likelihood of resumption of dumping, the DOC analyzes the arguments and evidence, and decides whether or not to revoke based upon a review of all of the record evidence. Sometimes this process produces a result favorable to the petitioning industry in the United States,150 and sometimes it does not.151
4.237.
US courts have held that the burden is on the party seeking revocation to come forward with "real evidence"152 to persuade the DOC to revoke the order.153 However, once the factual record closes, all such burdens evaporate and it falls to the DOC to make a determination that is in accordance with law and based upon substantial evidence.154
4.238.
The DOC closed the administrative record to new factual information on 2 May 1997. It gave all parties to the proceeding a full and fair opportunity to comment in writing upon the facts in the record. The DOC held a public hearing on 5 May 1997 which was attended by Respondents and Micron. Once all the facts and arguments were identified, the DOC analyzed everything in the administrative record which bore on the likelihood issue. It then summarized its conclusions in memoranda which contain very detailed evaluations of company-specific, confidential information provided by Respondents and several of their OEM customers.155 Among other things, the DOC examined the nature of the subject merchandise, trends in the domestic and home market industries, and currency movements. The agency also conducted extensive analyses of supply and demand, price trends during all phases of the business cycle, and the importance of the US market to the Respondents.
4.239.
This type of fact-intensive, case-by-case analysis was (and is) fully consistent with the DOC’s long-standing practice of examining all relevant economic factors and other information on the record in a particular case.156 In the instant case, it led to a determination not to revoke the order that was based upon facts which were properly established, and whose evaluation was unbiased and objective
4.240.
Korea argues that the DOC’s regulations, "on their face" and as applied in Final Results Third Review, permit the DOC to shift the burden of proof to a Respondent to show that a resumption of dumping is "not likely." Korea also contends that the DOC employs the "not likely" standard in its regulations in a "biased fashion." Both situations, Korea asserts, violate Article 11 of the AD Agreement.
4.241.
The AD Agreement does not prevent importing countries from requiring Respondents to come forward with evidence which indicates that a resumption of dumping is "not likely." Article 11 does not prescribe the specific factors that an investigating authority must consider when determining whether anti-dumping duties are "warranted." It also does not prescribe the specific procedural steps that must be followed when conducting a review under Article 11.2. Within this framework, the "not likely" standard is a reasonable exercise of the United States’ legitimate interest in ensuring that relief to those domestic industries that have been adversely affected by dumping is not withdrawn earlier than is "necessary.".
4.242.
Whether it is "not likely" that dumping will resume is an issue that directly and logically relates to whether anti-dumping duties continue to be necessary or warranted. The fact that an exporter revises its prices to eliminate dumping while the anti-dumping remedy is in place does not necessarily mean that the exporter will not resume dumping once the remedy is removed. By considering such factors as trends in costs and prices, along with Respondents’ pricing practices over the prior three-year period, the DOC is able to evaluate whether the anti-dumping order remains "necessary to offset dumping." In this respect, there is nothing facially invalid about the DOC’s revocation standard, in general, or the "not likely" standard, in particular. The DOC’s standard, therefore, reflects a "permissible" interpretation of Article 11 of the AD Agreement.
4.243.
Lastly, Korea’s position, if taken to its logical extreme, would preclude importing countries from imposing any type of evidentiary burden on Respondents during the course of a proceeding under Article 11. This would be inconsistent with numerous provisions in the AD Agreement. For example, Article 6 of the agreement reflects the long-standing practice of national investigating authorities to solicit information on sales and costs by means of a questionnaire and to allow interested parties otherwise to submit information on the record in support of their positions regarding the issue of dumping.157 The solicitation of comparable information in the context of a proceeding under section 353.25(a) of the DOC’s regulations is by no means unfair or unusual. Finally, in the instant case, the DOC did not demand that Respondents prove a negative (or the impossible) -- that they would not dump if the order was revoked. Instead, the DOC established a procedure "at the request of the parties" for the submission of factual information regarding market conditions, coincidence of dumping with downturns, and related matters.158

(c) Rebuttal arguments made by Korea

4.244.
Korea makes the following arguments in rebuttal to the United States responses:
4.245.
The US revocation scheme, on its face and as applied, violates Article 11 of the AD Agreement. Because the US revocation regime, on its face and as applied, shifts the burden of proof to Respondents, the Panel should find that the United States has violated Article 11.
4.246.
The US first submission ostensibly takes issue with Korea’s demonstration, but actually contains several statements that confirm that the US regime does, indeed, place the burden of proof on Respondents. For example, the United States declares:

The agency must also be satisfied that a resumption of less-than-normal-value sales to the United States by the Respondent is not likely.

The use of the word "satisfied" indicates that the burden of proof is on the Respondent, and not on the agency or the petitioner.159 Later, at paragraph 77, the United States actually agrees with Korea that "US courts have held that the burden is on the party seeking revocation to come forward with ‘real evidence’ to persuade the DOC to revoke the order."

4.247.
Thus, by its own admission, the United States’ revocation regime shifts the burden of proof to respondents. The United States improperly imported the "likely" standard from injury reviews under Paragraph 2 to dumping reviews, thereby expanding the burden of proof applied in dumping reviews. Then, the United States turned the standard on its head, transmogrifying it to "not likely," and requiring Respondents to bear the burden of proving the standard even though Paragraph 2 clearly imposes the burden on Members. This extension and shifting of the burden of proof violates Article 11 of the AD Agreement, which places the burden squarely on the administering authorities.
4.248.
The United States several times has stated that there will be dire consequences if the Panel accepts Korea’s interpretation of Article 11. For example, the United States asserts that Korea’s position, "if taken to its logical extreme," would preclude a Member from imposing any evidentiary burden on a Respondent seeking revocation. This might be true if one took Korea’s position to its illogical extreme, but nothing which Korea has advanced even suggests this.
4.249.
Under the US system, the Korean Respondents demonstrated for three consecutive reviews that they were not dumping. That is an exceedingly substantial evidentiary burden. It required Respondents to comply with US dumping laws and to submit voluminous data, all of which the DOC verified, to demonstrate their compliance.
4.250.
But, having done so, the United States was required to revoke the definitive duty, unless it initiated reviews under Paragraph 2 and found that "continued imposition of the duty is necessary to offset dumping" and that the "injury would be likely to continue or recur if the duty were varied."

(d) Rebuttal arguments made by the United States

4.251.
The United States makes the following arguments in rebuttal:
4.252.
In its first written submission, Korea states that section 353.25(a) of the DOC’s regulations, "on its face and as applied," improperly requires Respondents to bear the burden of showing that a resumption of dumping is "not likely." At no time since then has Korea ever explained how section 353.25(a), "on its face," places the burden of proof on Respondents to show anything. Korea does try to elicit support for its position by emphasizing the negative phraseology of the not-likely standard, and even characterizing the standard as "transmogrified." However, whether the standard is "transmogrified", it is still just a standard and nothing on "the face" of the regulation speaks to allocation of the burden of proof.
4.253.
In its first written submission, the United States demonstrated that the DOC did not place the burden of proof (in the sense of a burden of persuasion) on the Korean Respondents. At the first meeting of the Panel, Korea attempted to rebut this demonstration by pointing to the fact that in the Final Results Third Review, the DOC cited to several court decisions that, according to Korea, stand for the proposition that a party seeking revocation of an anti-dumping order in the United States bears the burden of proving that a resumption of dumping is "not likely." The answer to Korea's arguments is that (i) the court decisions do not stand for the proposition claimed by Korea, and (ii) the DOC's reliance on the court decisions was appropriate.
4.254.
Unfortunately, the term "burden of proof" is often used with imprecision in GATT/WTO jurisprudence. It tends to carry with it excess baggage that more often than not creates confusion on the part of observers and practitioners, alike.
4.255.
In general, "burden of proof" is used to describe two different concepts. The first is the "burden of persuasion" (otherwise know as the necessity of establishing a fact) which never shifts from one party to the other at any stage of a proceeding in which the relevant rules establish such a burden. The second concept is the "burden of going forward with the evidence," which may shift back and forth between the parties as a proceeding progresses.160 The DOC imposed a burden of proof on the Respondents in the sense of a burden of going forward with the evidence once the US industry (represented by Micron Technology, Inc. ("Micron")) came forward with evidence suggesting that dumping would recur if the anti-dumping order were revoked. Korea, however, asserts that the DOC imposed a burden of proof in the sense of a burden of persuasion.
4.256.
Turning to the court decisions referred to by Korea and cited by the DOC in Final Results Third Review, a review of these decisions establishes that the courts did not impose a burden of persuasion on exporters seeking the revocation of an order.161 Instead, the courts were discussing the "burden of proof" in the sense of the burden of coming forward with evidence. This fact can best be understood by discussing the decisions in reverse chronological order.
4.257.
The most recent cases were Sanyo and Toshiba, which were issued within a few weeks of each other.162 In both decisions, the US Court of International Trade ("CIT") stated that it was for the party seeking revocation to come forward with real evidence to persuade the DOC to revoke the order.163 In both decisions, the court cited to Manufacturas Industriales De Nogales, S.A. v. United States, 666 F. Supp. 1562, 1566 (Ct. Int’l Trade 1987) (Ex. USA-60). Manufacturas Industriales, in turn, cited to the decision of the US Court of Appeals for the Federal Circuit ("Federal Circuit") in Matsushita Electric Industrial Co. v. United States, 750 F.2d 927 (Fed. Cir. 1984) (additional views of Nichols, J.), for the proposition that it was for the proponent of revocation to come forward with real evidence to persuade the DOC to revoke an order.164
4.258.
In Matsushita,165 the ITC conducted a review of an anti-dumping order and determined that injury was likely to recur if the order were revoked. The CIT overturned the ITC's determination, ruling that the ITC had inappropriately placed the burden of proof (as in burden of persuasion) on the parties seeking revocation. On appeal, the Federal Circuit reversed the decision of the lower court, thereby sustaining the ITC's determination. Among other things, the Federal Circuit held that the ITC had not placed the burden of proof on the parties seeking revocation:

Finally, we do not discern that the ITC imposed a "burden of proof" on the Japanese importers to prove no injury was likely to occur. The ITC's decision does not depend on the "weight" of the evidence, but rather on the expert judgment of the ITC based on the evidence of record. On review, the question is whether there was evidence which could reasonably lead to the ITC's conclusion, that is, does the administrative record contain substantial evidence to support it and was it a rational decision?166

In his separate views, Judge Nichols elaborated on this point:

The CIT judge said this lament reflected an impermissible throwing of the burden of proof on the proponents of lifting the order. I do not agree. There is a subtle but recognizable difference between the burden of proof and the burden of going forward. This investigation was conducted at all because these attorneys had requested on behalf of their clients that it should be. If they did not intend to waste [ITC] resources, it would be reasonable to think they would be in possession of information which, if believed and not controverted, would constitute a prima facie case...167

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

5. Impossibility to Meet the DOC’s Revocation Standard

(a) Claim raised by Korea

4.263.
Korea claims that the DOC’s revocation standard was impossible to meet in this proceeding and, thus, both on its face and as applied, is inconsistent with Article 11 of the AD. The following are Korea's arguments in support of this claim.
4.264.
Article 11.1 of the AD Agreement requires Members to apply anti-dumping duties only for as long as they are "necessary to counteract dumping which is causing injury." Article 11.2 of the AD Agreement requires that, if "the anti-dumping duty is no longer warranted, it shall be terminated immediately." In the Third Administrative Review (the Review), the United States failed to determine objectively and fairly "whether the continued imposition of the duty is necessary to offset dumping."171 Therefore, the United States violated its obligations under the AD Agreement. The DOC attempted to camouflage its departure from its normal revocation practice (in which it revokes solely on the basis of three years of no dumping, plus a promise not to dump in the future) and imposed a subjective and unnecessary "no likelihood/not likely" requirement, based on speculation and conjecture of future dumping, that was impossible for Respondents to satisfy.
4.265.
The DOC erroneously supported its departure from its normal revocation practice by declaring that DRAM producers routinely dump during cyclical downturns.172 As precedents for its "conclusion," the DOC cited the antidumping proceedings against the Japanese DRAM producers in the mid-1980’s173 and against the Korean DRAM producers in 1992.174 The DOC supported its reliance on these past proceedings by surmising that, because DRAMs are commodity products, any company from any country is likely to dump in any cyclical downturn. On this basis, the DOC concluded that it must examine a downturn period and determine that Respondents would not dump in that period, before it could revoke the order.175
4.266.
All of the parties accept that the DRAM industry is characterized by upturns and downturns. However, as Respondents established during the many phases of the proceeding, prices of imports in economic downturns are not necessarily "dumped" prices. Indeed, during the last two severe downturns in the DRAM market, the DOC found that neither Respondent had dumped. The first downturn occurred during 1993, a period which the First Administrative Review covered. As Figure 1176 shows, the book-to-bill ratio177 consistently declined during 1993. Yet, the DOC found that Respondents were not dumping. The second downturn occurred in late 1995 and early 1996, during the period of the Third Administrative Review. Again, the book-to-bill ratio declined (even more precipitously than in 1993). Yet, still, the DOC found Respondents had not dumped. Thus, contrary to its conclusions en route to denying revocation in the Third Annual Review, the DOC, itself, previously had found that Respondents had not dumped during a variety of market conditions, including the last two cyclical downturns.
4.267.
The explanation for the DOC’s findings of no dumping during the previous two downturns is quite simple. DRAM production costs constantly decrease and, thus, downward price pressure, whether due to "supply/demand cyclicality" or another cause, does not inexorably lead to dumping, as the DOC claims in the Final Results.178
4.268.
By determining that a future downturn must be examined because of an alleged history in the DRAM industry of dumping during cyclical downturns, and coupling this with the "no likelihood/not likely" criterion, the DOC set an impossible, completely subjective standard for revocation. Moreover, to make this determination, the Department used speculative price and cost scenarios proffered by the U.S. petitioner of what might occur in the future. An authority will always find that dumping may occur in the future if the variables of its analysis are biased by speculation and conjecture masquerading as data proffered by a petitioner. The DOC’s use of this test of whether dumping may occur in the future if certain economic variables might be realized was an unnecessary and unsupported exercise leading to a foregone conclusion.
4.269.
In addition, the DOC’s reliance on the earlier Japanese and Korean DRAM dumping cases to establish the necessity for conducting a speculative analysis in a cyclical downturn was biased and unsound. The economic conditions, analytical variables and results of the earlier Japanese and Korean DRAM investigations are dissimilar. Thus, the Japanese investigation is not analogous and, in any case, this proceeding is about Korean DRAM manufacturers, not Japanese DRAM manufacturers.
4.270.
First, in the DRAMs from Japan investigation, the DOC found that all of the respondents had dumped.179 In contrast, as discussed above, in the 1992 DRAMs from Korea investigation, the largest producer, Samsung Electronics, was excluded from the investigation because it was found not to have dumped (Samsung accounted for over70percent of Korea’s imports). Second, in contrast to the DRAMs from Japan investigation, where the "all others" margin was 39.68 percent, the "all others" margin in the DRAMs from Korea case was only 4.55 percent.180 Third, although the DOC found that the Japanese producers had dumped in a cyclical downturn, the DOC has found that the Korean DRAM manufacturers have not dumped during cyclical downturns. Finally, the two Korean DRAM manufacturers remaining subject to the anti-dumping duty order have not dumped in three consecutive administrative reviews and have filed with the DOC the requisite statement affirming that they will not dump in the future (and will submit to reinstatement in the order if they do).
4.271.
Because there was no reliable evidence on the record that Korean DRAM manufacturers will dump in the next downturn or any future downturns, the DOC’s premise for departing from its normal revocation practice of examining historical data to make its "likelihood" determination is unsupported and an abuse of discretion. Even if one assumes that the DOC’s examination of whether there is a likelihood of dumping in the future by Korean DRAM manufacturers was acceptable under Article 11 (it was not), the examination should be based on actual verified data on the record – no dumping or insignificant margins in the investigation, no dumping by the two remaining Respondents for three consecutive years and a pledge not to dump in the future.
4.272.
The AD Agreement envisions a decision-making process based on fact, not speculation. The facts in this case indicate that the Korean manufacturers have not dumped since the investigation and that the two Respondents remaining in the investigation have a multi-year record of trading at or above normal value. These two Respondents have provided the statements required by the DOC that they will not dump in the future and will submit to reinstatement in the order if they do. This pledge and the empirical data before the DOC clearly indicate that the DOC was required to revoke the order. The DOC’s failure to do so violates Article 11 of the AD Agreement.
4.273.
In deciding not to revoke the duty, the DOC focused on the period immediately following the Third Administrative Review and rejected Respondents' requests that it examine a more recent - and therefore more relevant - period (assuming, for the sake of argument, that it should conduct such an analysis in the first place).181 As Respondents pointed out during the Third Administrative Review :

the issue before the Department is not what may or may not have happened last year. It is what is likely to happen in the future if the order is revoked. In order to make a reasonable prediction of the future, the Department's decision must be based on the most recent information available182.

4.274.
The Department failed to correct this deficiency in its Final Results183. It violated Article 11.2 by failing to conduct a forward-looking analysis (assuming, for the sake of argument, it was not simply required to revoke the order).

(b) Response by the United States

4.275.
The following are the United States' arguments in response to Korea's claim:
4.276.
Korea tries to convince this Panel that: (i) downturns in the DRAM market occurred during the first and third administrative reviews; (ii) respondents were found not to be dumping during these periods; therefore, (iii) the Department erred when it determined that market downturns "inexorably" lead to dumping. This flaw in the DOC’s thinking, Korea argues, also led to a legal standard for revocation that allegedly is impossible for producers in cyclical industries to meet. For the following reasons, these arguments are without merit and should be rejected by the Panel.
4.277.
To begin with, the periods covered by the first and third reviews (i.e., 1993 to 1995) were, as discussed above, unusually robust.184 According to every important measure (e.g., prices, revenues, and profits), the DRAM industry was not in a "downturn" during this time period. Korea stumbles on this point because it appears to focus exclusively on "book-to-bill"data prepared by the U.S. Semiconductor Industry Association ("SIA"). However, evidence on the record establishes that the SIA stopped publishing this data around the end of 1996 because its utility to market forecasters was limited.185
4.278.
Secondly, Korea ignores the lag that tends to exist between highs and lows in the book-to-bill ratio, and turning points in sales growth. Put another way, even if the book-to-bill ratio is an accurate indicator of market cycles for DRAMs, Korea overlooks the fact that a downturn in the market may not manifest itself for many months following a low point in the book-to-bill ratio. For example, according to data compiled by Merrill Lynch (which covers all semiconductors and not just DRAMs), the lowest point in the 1990-1991 downturn occurred in April of 1990, eight months after the low point in the book-to-bill ratio.186 The same phenomenon manifested itself in the 1996 downturn. There, the low point in the book-to-bill ratio occurred in April of 1996, but the downturn in the market did not reach its lowest point until December of 1996 – eight months after the period covered by the third administrative review.187
4.279.
Lastly, the DOC did not determine that downturns in the DRAM market "inexorably" lead to dumping. The United States agrees with Korea’s claim that the "prices of imports in economic downturns are not necessarily ‘dumped’ prices."188
4.280.
The DOC also did not apply a legal standard for revocation that is "impossible" for producers in cyclical industries to meet. First of all, the administrative determination being challenged in this case did not cover any product or any industry other than DRAMs from Korea. Thus, broad statements about the alleged implications of this case for other markets that may or may not be "cyclical" in nature are without foundation.
4.281.
Secondly, the DOC did not presume that dumping occurred during the 1996 downturn. The agency engaged in a painstaking analysis of voluminous data on the administrative record and only then did it determine that "dumping may have taken place during the 1996 downturn."189 In a different case, involving a different cyclical industry, such evidence may not exist and the DOC may find that a resumption of dumping would not be likely if the order in question were revoked.
4.282.
Lastly, the fundamental flaw in Korea’s claim is perhaps best captured by the simple fact that the DOC has revoked anti-dumping duty orders covering producers within cyclical industries. Examples of such cases include Carbon Steel Bars and Structural Shapes From Canada, 51 Fed. Reg. 41364, 41364 (1986) (Ex. USA-28), and Steel Reinforcing Bars From Canada; Final Results of Antidumping Duty Administrative Review and Revocation in Part, 51 Fed. Reg. 6775, 6775 (1986) (Ex. USA-29). The DOC has also revoked anti-dumping duty orders that covered products within "seasonal" industries. See, e.g., Certain Fresh Cut Flowers From Colombia; Final Results of Antidumping Duty Administrative Review, and Notice of Revocation of Order (in Part), 59 Fed. Reg. 15159, 15167 (1994) ("Flowers from Colombia") (Ex. USA-30); Frozen Concentrated Orange Juice From Brazil; Final Results and Termination In Part Of Antidumping Duty Administrative Review; Revocation In Part of Antidumping Duty Order, 56 Fed. Reg. 52510, 52511 (1991) ("FCOJ From Brazil") (Ex. USA-31). In both instances, prices, costs, and sales vary widely over the course of the business or seasonal cycle.190

6. Certification Regarding Future Dumping

(a) Claim raised by Korea

4.283.
Korea claims that by imposing a revocation requirement on exporters to certify that they will not dump in the future the United States violates Article 11 of the AD Agreement. The following are Korea's arguments in support of this claim.
4.284.
The United States has maintained the anti-dumping duties even though it has failed to meet the requirements of Paragraphs 1 and 2 of Article 11 for maintaining an order. The United States’ violation does not end here, however. The United States refused Respondents’ direct request to revoke the duties in spite of the fact that, in addition to three years without dumping (and thus no injury due to dumping), the two companies formally certified that they would not dump in the future, and agreed to the immediate reinstatement of the duties in the event that they resumed dumping.191
4.285.
This is an abuse of discretion and violates US obligations under Article 11 of the AD Agreement. First, the limited authority granted Members under Article 11 to impose and maintain anti-dumping duties does not extend so far as to permit a Member to impose a certification requirement for revocation.
4.286.
Second, the certification requirement of the US revocation regime192 requires a Respondent to forgo its right under Paragraph 2 of Article 11 to an injury finding. If the DOC concludes that the Respondent has resumed dumping, the US Government does not conduct any injury analysis, but simply reinstates its collection of deposits or duties. This violates Paragraph 2 of Article 11 of the AD Agreement, which requires Members to impose duties only where dumping exists and is causing injury and obliges Members to conduct investigations of dumping and injury before imposing (or maintaining) any duty.
4.287.
Far from complying with Article 11, the US regime is so biased that even where, as here, the responding companies have not dumped for three years and have agreed to allow the US Government to re-impose the duties on a moment’s notice, the United States nonetheless refused to revoke the duties. Moreover, before it will even consider revocation, the US regime requires a Respondent to forgo rights granted under Article 11. These are violations of Article 11 of the AD Agreement.

(b) Response by the United States

4.288.
The following are the United States' arguments in response to Korea's claim:
4.289.
None of the parties involved in this dispute, including Korea, deny that Respondents had several options under United States law when it came to revocation of the anti-dumping duty order on DRAMs from Korea. For example, they could have pursued a "changed circumstances" review before the DOC and/or the ITC pursuant to section 751(b) of the Act.193 Either or both of these options could have led to the revocation of the order. Instead, Respondents chose to proceed under section 353.25(a) of the DOC’s regulations.
4.290.
One of the criteria the DOC is required to consider when deciding whether to revoke an anti-dumping order under section 353.25 is whether the Respondents at issue have "agree[d] in writing to their immediate reinstatement in the order... if the Secretary concludes under § 353.22(f) [of the DOC’s regulations] that the producer or reseller, subsequent to the revocation, sold the merchandise at less than foreign market value."194 In the instant case, Hyundai and LG Semicon voluntarily submitted the appropriate certifications,195 which were, in turn, accepted by the DOC.
4.291.
Before this Panel, Korea argues that Article 11 does not "permit a Member to impose a certification requirement for revocation." According to Korea, the certification provided for in section 353.25 of the DOC’s regulations is an "abuse of discretion" because it allows the United States to impose duties "on a moment’s notice" without a new finding of injury. For the following reasons, Korea’s comments lack merit.
4.292.
In the nearly twenty years since section 353.25 has been in existence (in one form or another), the DOC has never used the certification provision to reinstate an anti-dumping order. Hence, Korea’s sweeping declarations about "bias" and an "abuse of discretion" lack any foundation in fact. These claims also ignore the principle, that discretionary legislation which permits, but does not require, administrative agencies to promulgate WTO-inconsistent regulations, does not, as such, violate GATT 1994 or any of the covered agreements.196 A complaining party must show that the agency actually took WTO-inconsistent action.197 In the instant case, that proof is lacking.
4.293.
Secondly, Korea ignores the explicit language in section 353.25 which requires a finding of dumping under section 353.22(f) of the DOC’s regulations before reinstatement may occur. Paragraph (f) in section 353.22 describes the standards and procedures associated with a changed circumstances review pursuant to section 751(b) of the Act.198 Thus, far from permitting duties to be re-imposed "on a moment’s notice," the DOC’s regulations prescribe a review on the record in accordance with the United States’ established anti-dumping methodology.
4.294.
Finally, Korea argues that the certification provided for in section 353.25 of the DOC’s regulations is contrary to Article 11 because paragraph 2 requires Members to "conduct investigations of dumping and injury before imposing (or maintaining) any duty." In point of fact, the obligation to conduct investigations of dumping and injury before imposing (or maintaining) an anti-dumping duty is found in Articles 1 and 5 of the AD Agreement. Article 11 says nothing about conducting dumping or injury investigations.
4.295.
More importantly, Article 11.2 establishes a broad based standard under which revocation is warranted if national investigating authorities determine that an order is no longer "necessary to offset dumping." Article 11 does not prescribe the specific factors that an investigating authority must consider when determining whether anti-dumping duties are "warranted." It also does not prescribe the specific procedural steps that must be followed when conducting a review under Article 11.2. Within this framework, the certification provision in the DOC’s regulations is a permissible exercise of the United States’ legitimate interest in ensuring that relief to those domestic industries that have been adversely affected by dumping is not withdrawn earlier than is "necessary."
4.296.
The United States, in response to a question from the Panel,199 further argued as follows:
4.297.
Section 353.25(a) conditions the reinstatement of duties upon a finding of dumping under section 353.22(f) of the DOC’s regulations. Section 353.22(f) sets forth in full the rights and obligations attendant to a review under section 751(b) of the Act (i.e., a "changed circumstances" review). Among the rights and obligations contained in section 353.22(f) is the opportunity for "notice and comment." In other words, section 353.22(f) guarantees to every interested party, inter alia, the right to review and comment upon the DOC’s determination. This process, from start to finish, typically takes between six and nine months to complete. If one adds to this the time between revocation (or "termination") of the anti-dumping duty order and the initiation of a review pursuant to the reinstatement provision in section 353.25(a), a year or more may have passed before duties are once again applied to the Respondent that resumed dumping merchandise subject to the order.
4.298.
The "not likely" criterion performs, therefore, an important function. It seeks to provide some assurance to the DOC that the Respondent which has stopped dumping for at least three years (section 353.25(a) (2) (i)), and agreed to reinstatement in the order if it resumes dumping (section 353.25(a) (2) (iii)), will not dump during the period immediately after revocation (section 353.25(a) (2) (ii)). It is not a perfect system. No investigating authority, including the DOC, can ever be completely certain that an exporter will not resume injurious dumping the minute an order is lifted. However, it is a "permissible" approach, within the meaning of Article 17.6(ii) of the AD Agreement, which seeks to ensure that the anti-dumping relief obtained by the injured domestic industry is terminated only when it is no longer warranted.200

7. Need for Injury Finding

(a) Claim raised by Korea

4.299.
Korea claims that by failing to initiate ex officio an injury review where evidence showed that it was warranted the United States violates Article 11 of the AD Agreement. The following are Korea's arguments in support of this claim:
4.300.
Sales at less than normal value (dumping), alone, are not prohibited by the WTO agreements; rather, the WTO agreements prohibit only dumping that is causing injury.201 A Member must establish that a Respondent is dumping and also that the dumping is causing injury before it can impose or maintain a duty.202 Thus, even assuming for the sake of argument that the DOC’s finding that renewed dumping was likely was correct (and that the DOC’s imposition of the various criteria was permissible), the US Government failed to make any determination that dumping which is causing injury was likely.
4.301.
The provisions of the AD Agreement establish three requirements on Members that would impose or maintain a duty: dumping, injury and causation. First, the Member must establish that a product is being dumped, i.e., "introduced into [its] commerce... at less than its normal value."203 The methodology for establishing dumping is set out in Article 2. Second, the Member must establish that its domestic industry is materially injured. The methodology for establishing injury is set out in Article 3. Finally, the Member must establish that the dumping is causing the material injury. Guidelines for establishing causation are set forth in Article 3.5. Absent any one of these three elements, a Member shall not impose or maintain an anti-dumping duty.
4.302.
In regard to maintaining a duty, Paragraph 2 of Article 11 of the AD Agreement requires a Member, on its own initiative, to conduct a review of injury to the domestic industry (as well as of dumping) "where warranted." According to the first sentence of Paragraph 2:

The authorities shall review the need for the continued imposition of the duty, where warranted, on their own initiative....204

According to the third sentence of Paragraph 2:

If, as a result of the review under this paragraph, the authorities determine that the anti-dumping duty is no longer warranted, it shall be terminated immediately.

4.303.
In DRAMs from Korea, circumstances clearly "warranted" an injury review by the US Government. For three consecutive years, the US Government, itself, had found that no dumping existed. The logical consequence of this finding is that no injury caused by dumping could have occurred during this same three-year period--if there is no dumping, there is no injury and, of course, the duty is not necessary. But, even if the authorities had been justified in concluding that a resumption of dumping was likely, they made no determination as to whether a resumption of injury--after three years of no injury--was likely. After concluding that for three years no injury was occurring as a result of dumping, the authorities had an obligation on their own initiative (it was "warranted") to investigate whether injury as well as dumping would be likely to resume if the order were revoked. Paragraph 2 of Article 11 required a separate determination regarding injury and the US Government failed to comply with this requirement and thereby violated Article 11.
4.304.
Furthermore, the ITC, the US agency that conducts injury investigations, does not even have the authority to conduct such a review so as to be able to meet its obligation under Paragraph 2 of Article 11. Quite simply, the United States has failed to implement this requirement of Paragraph 2 of Article 11 and this, too, is a violation of the AD Agreement.
4.305.
Korea, in response to a question from the Panel,205 further argued as follows:
4.306.
The Korean Government’s understanding is that the Respondents requested revocation under Section 353.25(a) (2) and not Section 207.45(a) for a number of reasons. In the United States, after the original investigation is complete, the procedure shifts away from the ITC. The DOC is the entity that conducts the administrative reviews. Having been found not to be dumping by the Department for three consecutive reviews, covering three-and-one-half years, the Respondents presumably thought that revocation pursuant to the DOC’s regulation was basically a formality, as it is in most cases.
4.307.
In any case, as the title of Section 353.25(a) is "Revocation based on absence of dumping," this regulation is the more appropriate regulation. The ITC, of course, does not have a regulation providing for revocation based upon an absence of dumping. Instead, Section 207.45(a) is the ITC’s "changed circumstances" review regulation--it presumes that dumping is occurring, but allows a respondent to demonstrate that market circumstances have changed such that the dumping no longer is causing injury. (The DOC also has a changed circumstances regulation, at Section 353.25(d).)
4.308.
The United States suggests that the Respondents should have pursued a changed circumstances review at the DOC and/or the ITC. The United States thus continues to attempt to improperly burden the Respondents. The United States implies that the fact that they did not seek such a review somehow undermines Korea’s case. But this is not true. The DOC’s regulations provide specifically for "Revocation based on absence of dumping," and, as Korea has demonstrated, even if that regulation complied with the AD Agreement (which it does not), the Respondents met its requirements and were denied revocation only because of bias and the Secretary of Commerce’s unfettered discretion in these matters. The implication of the United States that, had Respondents requested changed circumstances reviews, the United States would have revoked the order, is baseless given the DOC’s conduct in this case. Also, it is another attempt by the United States to shirk its Article 11 obligations to self-initiate where warranted.
4.309.
Finally, in its response to Korea’s claims that the United States improperly failed to initiate a changed circumstances injury review (or dumping review), which clearly was warranted, the United States apparently is attempting improperly to conflate two of the obligations of Article 11.2--the obligation to self-initiate where warranted and the obligation to provide for initiation upon request under certain circumstances. As stated above, the Government supposes that the companies did not request an ITC review because they understood that the ITC injury provision applies where a company is dumping, but nonetheless is seeking revocation on the basis that, due to "changed circumstances" in the market, the dumping no longer is injuring the domestic industry. Thus, this provision is not appropriate here. (Moreover, based on U.S. procedure, Respondents would have had no cause to do so until after the DOC denied revocation.)
4.310.
The U.S. position on this point demonstrates, in general, the poverty of the U.S. position. In this case, what would the ITC have examined? Korea’s argument is not changed circumstances but revocation based on no dumping and no injury caused by dumping. In this context, what is the relevance of a change in market conditions?
4.311.
Also, the United States conveniently fails to note that its suggestion would have imposed on the Korean companies the burden of establishing "changed circumstances sufficient to warrant the institution of a review investigation." 19 C.F.R. § 207.45(a). In other words, simply to obtain a review that might, possibly, result in revocation, the companies would have had to meet a burden of proof that Article 11 does not allow a Member to assign to a company to obtain revocation itself. The companies then, of course, would have had to meet an even greater and more improper burden to obtain revocation. Thus, even the procedure for simply requesting an injury review under 19 C.F.R. 207.45(a) violates Article 11.2.
4.312.
With this argument, the United States apparently has conceded that Korea is correct that the United States improperly places the burden of proof on the responding companies. Perhaps more importantly, under Article 11.2, the United States was required to self-initiate an injury investigation "where warranted," a standard that certainly was met here, where for over 3 years the Department found no dumping, and thus the injury finding from the original investigation was stale and no longer applicable.
4.313.
Korea, in response to another question from the Panel,206 also made the following arguments:
4.314.
If the Department fails to revoke, the ITC must self-initiate, because three consecutive reviews of no dumping is the strongest possible evidence that, at the very least, the ITC’s original finding of injury by reason of dumping is no longer valid and that an injury review is necessary.

(b) Response by the United States

4.315.
The following are the United States' arguments in response to Korea's claim:
4.316.
Korea argues that the United States was obligated to conduct an "injury review" pursuant to Article 11.2 of the AD Agreement. According to Korea, an inquiry into whether a "resumption of injury... was likely" was "warranted" because Respondents had gone three years without dumping. Korea also asserts that the United States lacks the ability to comply with Article 11.2 because the ITC lacks the authority under United States law to conduct this type of review. As with Korea’s other claims, these too fail.
4.317.
First, the ITC’s authority to self-initiate a review of its injury determination is expressly provided for in section 751(b) of the Act207 and section 207.45(c) of its regulations.208 Secondly, Respondents never asked the ITC to exercise its authority in this regard. No one, including Korea, ever raised this issue until after the DOC issued the Final Results Third Review. As a result, this Panel lacks an adequate factual and legal record to review under Articles 17.5 and 17.6 of the AD Agreement. Lastly, as the complaining party, Korea bears the burden of coming forward with evidence to support its claim. To support its claim that a review of the injury question was "warranted," Korea must present evidence which shows: (i) that injury to the domestic industry in the United States was not likely "to continue or recur if the duty were removed or varied," and (ii) that the responsible investigating authority in the United States was in possession of this information a reasonable period of time before Korea instituted the present action.209 Korea has done neither. All it has done is cite to the fact that Respondents were found not to be dumping during a three-year period when the order was in existence.210
4.318.
The United States, in response to a question from the Panel,211 further argued as follows:
4.319.
A Member is required to self-initiate a review only "where warranted." In this case, Korea has not asserted that anything, other than an absence of dumping for three years, indicated that an injury review was "warranted" within the meaning of Article 11.2.
4.320.
Evidence that dumping has stopped does not, in and of itself, indicate that an injury review is "warranted" under Article 11.2. For one thing, a lack of current dumping does not necessarily indicate a change in the relevant market conditions. Rather, a Respondent may simply have changed its pricing practices in response to the issuance of the anti-dumping order or may even have ceased or curtailed its exports because of an inability to compete at a fairly traded price.
4.321.
It also is not enough to claim, as Korea does, that injury has stopped subsequent to the issuance of an order. First of all, the AD Agreement recognizes that this may be the case in a particular situation; that is why Article 11.2 calls for evidence that the injury is not likely to "recur." It also explains why the test turns on what will happen if the "duty were removed or varied." In other words, the drafters of Article 11.2 assumed that in some, but not necessarily all cases, maintenance of the order will remedy injury.
4.322.
In short, a self-initiated review of injury is "warranted" within the meaning of Art. 11.2 when a Member is in possession of information which bears on what the condition of the industry would be after an anti-dumping order is "removed or varied." Evidence limited exclusively to a Respondent’s pricing practices during the existence of the order misses the mark because it says next to nothing about the condition of the industry if the duty is removed or varied. Under section 751(b), interested parties also have the opportunity to request a review of the ITC’s injury determination.

(c) Rebuttal arguments made by Korea

4.323.
Korea makes the following arguments in rebuttal to the United States responses:
4.324.
The United States asserts that for a self-initiated review to be warranted:

Korea must present evidence which shows that injury to the domestic industry in the United States was not likely "to continue or recur if the duty were removed or varied."

4.325.
As this statement demonstrates, even in the context of the standard for simply initiating a self-initiated review, the United States seeks to impose on a Respondent the burden of "show[ing] that injury... was not likely to continue or recur...."