US — Carbon Steel (India), Recourse to article 21.5 of the DSU by India

Abbreviation	Description
CIT	Court of International Trade
COMPAS	commercial policy analysis system
Covered Agreements	The covered Agreements of the WTO
CVD	countervailing duty
DSB	Dispute Settlement Body
DSU	Understanding on Rules and Procedures Governing the Settlement of Disputes
Essar	Essar Steel India Limited
GATT 1994	General Agreement on Tariffs and Trade 1994
GOI	Government of India
ISPAT	Ispat Industries Limited
JPC	Joint Plant Committee
JSW	JSW Steel Limited
LTAR	less than adequate remuneration
MMDR Act	Mines and Minerals (Development and Regulation) Act
MML	Mysore Minerals Limited
NMDC	National Mineral Development Corporation
POI	Period of investigation
POR	Period of review
SCM Agreement	Agreement on Subsidies and Countervailing Measures
SDF	Steel Development Fund
Tata	Tata Iron and Steel Co Limited
URAA	Uruguay Round Agreements Act
USC	United States Code
USDOC	United States Department of Commerce
USITC	United States International Trade Commission
USTR	United States Trade Representative
Vienna Convention	Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679
WTO	World Trade Organization

1.1.

This compliance dispute concerns India's claims against measures taken by the United States to comply with the recommendations and rulings of the Dispute Settlement Body (DSB) in the original proceeding in United States – Countervailing Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India.

1.2.

On 5 June 2017, India requested consultations with the United States pursuant to paragraph 1 of the Agreement between India and the United States dated 6 May 2016 concerning "Agreed Procedures under Articles 21 and 22 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU)".¹

1.3.

Consultations were held on 13 July 2017 and 4 October 2017. These consultations failed to resolve the dispute.

1.4.

On 29 March 2018, India requested the establishment of a panel pursuant to Articles 6 and 21.5 of the DSU, Article XXIII of the General Agreement on Tariffs and Trade 1994 (GATT 1994), and Article 30 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) with standard terms of reference.² At its meeting on 27 April 2018, the DSB referred this dispute to the original panel in accordance with Article 21.5 of the DSU.

1.5.

The Panel's terms of reference are the following:

To examine, in the light of the relevant provisions of the covered Agreements cited by the parties to the dispute, the matter referred to the DSB by India in document WT/DS436/18 and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those Agreements.³

1.6.

In accordance with Article 21.5 of the DSU, the Panel was composed on 25 May 2018 as follows:

Chairperson: Mr Hugh McPhail

Members: Mr Anthony Abad

Mr Hanspeter Tschaeni

1.7.

Canada, China, Egypt, the European Union, Japan, and the Russian Federation notified their interest in participating in the Panel proceedings as third parties.

1.8.

After consultation with the parties, the Panel adopted its Working Procedures⁴ and timetable on 27 June 2018. The Panel subsequently revised its timetable on 24 September 2018 and 14 February 2019.

1.9.

The Panel held its substantive meeting with the parties on 30 and 31 January 2019. A session with the third parties took place on 31 January 2019. The Panel issued its Interim Report to the parties on 12 July 2019. The Panel issued its Final Report to the parties on 4 October 2019.

2.1.

This compliance dispute concerns the imposition by the United States of countervailing duties (CVDs) on imports of certain hot‑rolled carbon steel flat products from India. India has challenged the following measures, and their amendments, replacements, implementing acts (as identified in India's panel request), or any other related measure in connection with them:

a. Original Investigation:

i. Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Countervailing Determination With Final Antidumping Duty Determinations: Certain Hot‑Rolled Carbon Steel Flat Products From India: 66 FR 20240‑01, April 20, 2001.

ii. Issues and Decision Memorandum – Final Results of the Countervailing Duty Investigations: Certain Hot‑Rolled Carbon Steel Flat Products From India, 66 ITADOC 49635, September 21, 2001.

iii. Final Affirmative Countervailing Duty Determination: Certain Hot‑Rolled Carbon Steel Flat Products From India, 66 FR 49635‑01, September 28, 2001.

iv. Injury Determination: Hot Rolled Steel Products from China, India, Indonesia, Kazakhstan, Netherlands, Romania, South Africa, Taiwan, Thailand, and Ukraine, 701‑TA‑405‑408 and 731‑TA‑899‑904 and 906‑908, Pub. 3468, United States International Trade Commission (USITC), November 2001.

v. Amended Final Results of Countervailing Duty Orders: Certain Hot‑Rolled Carbon Steel Flat Products From India and Indonesia, 66 FR 60198‑01, December 3, 2001.

vi. Countervailing Duty Order in the Investigation: Certain Hot Rolled Carbon Steel Flat Products from India, January 8, 2002.

b. Administrative Review: period of review (POR) April 20, 2001 through December 31, 2002

i. Preliminary Results of Countervailing Duty Administrative Review: Certain Hot‑Rolled Carbon Steel Flat Products from India, 69 FR 907‑01, January 7, 2004.

ii. Issues and Decision Memorandum – Final Results of the Countervailing Duty Investigation: Certain Hot‑Rolled Carbon Steel Flat Products From India, 69 ITADOC 26549, May 6, 2004.

iii. Final Results of Countervailing Duty Administrative Review: Certain Hot‑Rolled Carbon Steel Flat Products from India, 69 FR 26549‑01, May 13, 2004.

c. Administrative Review: POR January 1, 2004 through December 31, 2004

i. Preliminary Results of Countervailing Duty Administrative Review: Certain Hot‑Rolled Carbon Steel Flat Products from India, 71 FR 1512‑01, January 10, 2006.

ii. Issues and Decision Memorandum – Final Results of Administrative Review of the Countervailing Duty Order: Certain Hot‑Rolled Carbon Steel Flat Products from India, 71 ITADOC 28665, May 10, 2006.

iii. Final Results of Countervailing Duty Administrative Review: Certain Hot‑rolled Carbon Steel Flat Products from India, 71 FR 28665‑01, May 17, 2006.

d. Sunset Review:

i. Issues and Decision Memorandum – Final Results of Expedited Sunset Reviews of the Countervailing Duty Orders: Certain Hot‑Rolled Carbon Steel Flat Products from Argentina, India, Indonesia, South Africa, and Thailand, 71 ITADOC 70960, December 7, 2006.

ii. Final Results of the Expedited Five‑Year (Sunset) Reviews of the Countervailing Duty Orders: Certain Hot‑Rolled Carbon Steel Flat Products from Argentina, India, Indonesia, South Africa, and Thailand, 71 FR 70960‑03, December 7, 2006.

iii. Injury Determination – Hot Rolled Steel Products from China, India, Indonesia, Kazakhstan, Argentina, Romania, South Africa, Taiwan, Thailand, and Ukraine, 701‑TA‑ 404‑408 and 731‑TA‑898‑902 and 904‑908 (Review), Pub. 3956, USITC, October 2007.

iv. Continuation of Antidumping Duty and Countervailing Duty Orders – Certain Hot‑Rolled Carbon Steel Flat Products from India, Indonesia, the People's Republic of China, Taiwan, Thailand, and Ukraine, 72 FR 73316‑03, December 27, 2007.

e. Administrative Review: POR January 1, 2006 through December 31, 2006

i. Preliminary Results of Countervailing Duty Administrative Review: Certain Hot‑Rolled Carbon Steel Flat Products from India, 73 FR 1578‑02, January 9, 2008.

ii. Issues and Decision Memorandum – Final Results of Countervailing Duty Administrative Review: Certain Hot‑Rolled Carbon Steel Flat Products From India, 73 ITADOC 40295, July 7, 2008.

iii. Final Results of Countervailing Duty Administrative Review: Certain Hot‑Rolled Carbon Steel Flat Products From India, 73 FR 40295‑02, July 14, 2008.

f. Administrative Review: POR January 1, 2007 through December 31, 2007

i. Preliminary Results of Countervailing Duty Administrative Review: Certain Hot‑Rolled Carbon Steel Flat Products from India, 73 FR 79791‑01, December 30, 2008.

ii. Issues and Decision Memorandum – Final Results of Countervailing Duty Administrative Review: Certain Hot‑Rolled Carbon Steel Flat Products from India, 74 ITADOC 20923, April 29, 2009.

iii. Final Results of Countervailing Duty Administrative Review: Certain Hot‑Rolled Carbon Steel Flat Products from India, 74 FR 20923‑01 May 6, 2009.

g. Administrative Review: POR January 1, 2008 through December 31, 2008

i. Preliminary Results of Countervailing Duty Administrative Review: Certain Hot‑Rolled Carbon Steel Flat Products from India, 75 FR 1496‑01, January 11, 2010.

ii. Issues and Decision Memorandum – Final Results of Countervailing Duty Administrative Review: Certain Hot Rolled Carbon Steel Flat Products from India, 75 ITADOC 43488, July 19, 2010.

iii. Final Results of Countervailing Duty Administrative Review – Certain Hot Rolled Carbon Steel Flat Products from India, 75 FR 43488‑01, July 26, 2010.

h. In relation to the proceedings by the United States Department of Commerce (USDOC):

i. Certain Hot‑Rolled Carbon Steel Flat Products from India: Notice of Commencement of Compliance Proceedings Pursuant to Section 129 of the Uruguay Round Agreements Act (URAA), 80 FR 57336 dated September 23, 2015.

ii. Section 129 Proceeding: United States – Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436): Preliminary Determination of Facts Available dated March 17, 2016.

iii. Section 129 Proceeding: United States – Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436): Preliminary Determination on Other Issues dated March 18, 2016.

iv. Preliminary Determination – No Change: Section 129 Proceeding: United States – Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436) dated April 21, 2016 (DS436‑2004 and DS436‑2007).

v. Calculations for Preliminary Determination: JSW Steel Limited (JSW) ‑ Section 129 Proceeding: United States – Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436) dated April 21, 2016 (DS436‑2006).

vi. Calculations for Preliminary Determination: Tata Iron and Steel Co. Limited (Tata) ‑ Section 129 Proceeding: United States – Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436) dated April 21, 2016 (DS436‑2008).

vii. Final Determination ‑ Section 129 Proceeding: United States ‑ Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436) dated April 14, 2016.

viii. Calculations for Final Determination: Essar Steel India Limited (Essar) ‑ Section 129 Proceeding: United States – Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436) dated April 21, 2016 (DS436‑2006).

ix. Calculations for Final Determination: Essar Steel India Limited (Essar) ‑ Section 129 Proceeding: United States – Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436) dated April 21, 2016 (DS436‑2007).

x. Calculations for Final Determination: Ispat Industries Limited (ISPAT) ‑ Section 129 Proceeding: United States – Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436) dated April 21, 2016 (DS436‑2006).

xi. Calculations for Final Determination: JSW Steel Limited (JSW) ‑ Section 129 Proceeding: United States – Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436) dated April 21, 2016 (DS436‑2006).

xii. Calculations for Final Determination: Tata Steel Ltd. (Tata) ‑ Section 129 Proceeding: United States – Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436) dated April 21, 2016 (DS436‑2006).

xiii. Calculations for Final Determination: Tata Steel Ltd. (Tata) ‑ Section 129 Proceeding: United States – Countervailing Duty Measures on Certain Hot‑Rolled Carbon Steel Flat Products from India (WTO/DS436) dated April 21, 2016 (DS436‑2008).

xiv. Certain Hot‑Rolled Carbon Steel Flat Products from India: Implementation of Determinations Under Section 129 of the URAA, 81 FR 27412 dated May 6, 2016.

xv. Amended cash deposit instructions for certain hot‑rolled carbon steel flat products from India pursuant to the final determination under Section 129 (C‑533‑821) dated May 13, 2016.

i. In relation to the proceedings by the USITC:

i. Letter from the Chairman of the USITC to United States Trade Representative (USTR) Ambassador dated October 23, 2015.

ii. Hot‑Rolled Steel Products from India; Scheduling of a Countervailing Duty Proceeding Under the URAA, Investigation No. 701–TA–405 (Section 129 Consistency Determination), USITC, 80 FR 75132, dated December 1, 2015.

iii. Hot‑rolled Steel products from India, Investigation No. 701‑TA‑405 (Section 129 Consistency Determination), USITC, Publication 4599 dated March 7, 2016.

j. Others:

i. Section 19 United States Code (USC) 1677 (7)(G)(iii).⁵

ii. Dispute Settlement Body, Minutes of the Meeting dated 21 July 2016, WT/DSB/M/383, dated October 11, 2016.

3.1.

India requests the Panel to find that:

a. The United States' failure to amend or repeal 19 USC § 1677(7)(G)(iii)⁶ is inconsistent with the DSB recommendation in this dispute as well as Articles 15.1, 15.2, 15.3, 15.4, and 15.5 of the SCM Agreement.

b. The United States' determination regarding the existence of a financial contribution is inconsistent with Article 1.1(a)(1) of the SCM Agreement.

c. The United States determination regarding de facto specificity of "sale of high grade iron ore by [National Mineral Development Corporation]", "Mining rights of Iron Ore" and "Mining of Coal" is inconsistent with Articles 2.1(c) and 2.4 of the SCM Agreement.

d. The United States' failure to provide a notice of information which it required from India and rejection of information voluntarily submitted by India during Section 129 Determination is inconsistent with Article 12.1 of the SCM Agreement.

e. The United States' failure to inform India and all interested parties of the essential facts under consideration which form the basis for the decision as to whether to apply definitive measures is inconsistent with Article 12.8 of the SCM Agreement.

f. The exclusion of and the failure to adequately explain the exclusion of (i) available in‑country benchmarks for iron ore; and (ii) National Mineral Development Corporation (NMDC)'s export prices, as benchmarks, when determining benefit conferred by the alleged programmes titled "sale of high grade iron ore by NMDC" and "Mining rights of Iron Ore" is inconsistent with the chapeau to Article 14 and Article 14(d) of the SCM Agreement.

g. The continued imposition of CVDs against the Steel Development Fund (SDF) programme without accounting for the borrower's cost in obtaining loans under that programme is inconsistent with the chapeau of Article 14 and Article 14(b) of the SCM Agreement.

h. The United States' failure to consider the existence of a link or relationship or explanatory force between the import of the alleged subsidized imports and the price of the domestic like products is inconsistent with Articles 15.1 and 15.2 of the SCM Agreement.

i. The United States' failure to examine and evaluate the existence of a link or relationship or explanatory force between the alleged subsidized imports and the state of the domestic industry is inconsistent with Articles 15.1 and 15.4 of the SCM Agreement.

j. The erroneous examination of causal link by the United States is inconsistent with Articles 15.1 and 15.5 of the SCM Agreement.

k. The unilateral termination of the CVD rate agreed between JSW and the USDOC in the Amended Final Results of Countervailing Duty Administrative Review Pursuant to Court Decision, 75 FR 80455 dated 22 December 2010 and between Tata and the USDOC in the Amended Final Results of Countervailing Duty Administrative Review Pursuant to Court Decision, 76 FR 77775 dated 14 December 2011 is inconsistent with Article 19.3 of the SCM Agreement.

l. The continued imposition of CVD against new subsidy programmes pursuant to Section 129 Determination pertaining to 2004, 2006, 2007, and 2008 administrative reviews (ARs) is inconsistent with Articles 21.1 and 21.2 of the SCM Agreement.

m. The imposition of CVD against "Mining rights of Iron Ore" and "Mining of Coal" is inconsistent with Articles 21.1 and 21.2 of the SCM Agreement.

n. As a consequence of the inconsistencies mentioned hereinabove, the measures are inconsistent with Article 10 of the SCM Agreement and Article VI of the GATT 1994.

3.2.

India requests the Panel to find that the United States has failed to comply with the recommendations and rulings of the DSB.

3.3.

The United States requests that the Panel find that the United States has complied with the recommendations and rulings of the DSB and that the United States' measures taken to comply are not inconsistent with the SCM Agreement or the GATT 1994. The United States further requests that the Panel reject India's claims to the contrary.

4.1.

The arguments of the parties are reflected in their executive summaries that were provided to the Panel in accordance with paragraph 23 of the Working Procedures, as adopted by the Panel (see Annexes B‑1 and B‑2).

5.1.

The arguments of Canada, China, Egypt, the European Union and Japan are reflected in their executive summaries in accordance with paragraph 26 of the Working Procedures (see Annexes C‑1, C‑2, C‑3, C‑4, and C‑5).⁷

6.1.

On 12 July 2019, the Panel issued its Interim Report to the parties. On 26 July 2019, India and the United States submitted their written requests for review. In addition to its written request, the United States also requested that the Panel hold an interim review meeting with the parties in particular in respect of paragraphs 7,305 to 7,319 of the Interim Report. On 9 August 2019, India and the United States submitted comments on each other's requests for review of those "precise aspects of the interim report" for which no interim review meeting was requested. The Panel held an interim review meeting with the parties on 19 August 2019 with respect to those "precise aspects of the interim report" for which the United States had requested that meeting. On the same day, India requested the opportunity to provide written comments in response to the United States' oral statement at the interim review meeting.⁸ In its response dated 20 August 2019, the United States requested that the Panel reject India's request or, alternatively, allow the United States to comment on India's comments.⁹ On 21 August 2019, the Panel informed the parties of its decision to allow them to file additional written comments. India filed its written comments on 26 August 2019; the United States submitted its comments on 29 August 2019. The requests made at the interim review stage as well as the Panel's discussion and disposition of those requests are set out in Annex A-3.

7.1.

Article 3.2 of the DSU provides that the WTO dispute settlement system serves to clarify the existing provisions of the covered Agreements "in accordance with customary rules of interpretation of public international law". It is generally accepted that the principles codified in Articles 31 and 32 of the Vienna Convention on the Law of Treaties are such customary rules.¹⁰

7.2.

Panels generally are bound by the standard of review set forth in Article 11 of the DSU, which provides, in relevant part, that:

[A] panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered Agreements.

7.3.

The Appellate Body has stated that the "objective assessment" to be made by a panel reviewing an investigating authority's determination is to be informed by an examination of whether the authority provided a reasoned and adequate explanation as to: (a) how the evidence on the record supported its factual findings; and (b) how those factual findings supported the overall determination.¹¹

7.4.

The Appellate Body has also stated that a panel reviewing an investigating authority's determination may not undertake a de novo review of the evidence or substitute its judgment for that of the investigating authority. At the same time, a panel must not simply defer to the conclusions of the investigating authority. A panel's examination of those conclusions must be "in‑depth" and "critical and searching".¹²

7.5.

A panel must limit its examination to the evidence that was before the authority during the course of the investigation and must take into account all such evidence submitted by the parties to the dispute.¹³ In that regard, a panel may be called upon to respond to allegations by a complainant concerning the significance of record evidence that the investigating authority allegedly ignored, or on which it placed insufficient weight, or from which it drew incorrect inferences, or that there was no record evidence that could have possibly substantiated its conclusion.¹⁴ The fact that an investigating authority has not cited every piece of record evidence which negates – or substantiates – these kinds of allegations does not mean that a panel is prevented from considering such evidence to test the veracity of such allegations. A panel's review of the record evidence in order to establish the veracity of such allegations, and thus determine whether the complainant has demonstrated sufficiently that the authority's conclusions were not reasoned and adequate, does not amount to a de novo review of the record evidence.¹⁵

7.6.

Likewise, a panel's examination of whether an investigating authority's conclusions were reasoned and adequate is not necessarily limited to the pieces of evidence expressly relied upon by the authority in its establishment and evaluation of the facts in arriving at a particular conclusion.¹⁶ Rather, a panel may also take into consideration other pieces of evidence that were on the record and that are connected to the explanation provided by the investigating authority in its determination. This flows from the principle that investigating authorities are not required to cite or discuss every piece of supporting record evidence for each fact in the Final Determination.¹⁷ However, since a panel's review cannot be de novo, ex post rationalizations unconnected to the investigating authority's explanation – even when founded on record evidence – cannot form the basis of a panel's finding that the authority's conclusion was reasoned and adequate.¹⁸

7.7.

We also note that not every error made or questionable inference drawn by an investigating authority in its treatment of a given piece of evidence will necessarily rise to the level of a violation of an obligation of the WTO Agreements. Rather, a panel's evaluation of whether an investigating authority's explanation is "reasoned and adequate" requires an assessment of the totality of evidence relied upon by an investigating authority to justify its reasoning on a given point.¹⁹

7.8.

The general principles applicable to the allocation of the burden of proof in WTO dispute settlement require that a party claiming a violation of a provision of a WTO Agreement must assert and prove its claim.²⁰ Therefore, India bears the burden of demonstrating that the challenged measures are inconsistent with the WTO Agreements. In the context of Article 21.5 proceedings, this includes demonstrating that the United States did not take measures to comply with the DSB recommendation in the original dispute or, if it did, that such measures are not consistent with the WTO Agreements. A complaining party will satisfy its burden when it establishes a prima facie case, namely a case which, in the absence of effective refutation by the defending party, requires a panel, as a matter of law, to rule in favour of the complaining party.²¹ It is generally for each party asserting a fact to provide proof thereof.²²

7.9.

In the present dispute, the United States objects that a number of India's claims are outside of the scope of compliance proceedings under Article 21.5 of the DSU. We therefore provide an overview of the general principles governing the scope of compliance proceedings under Article 21.5 of the DSU as relevant to the present dispute, while addressing each of the United States' specific objections as they arise in the subsequent sections in light of these general principles.

7.10.

Article 21.5 of the DSU provides, in relevant part:

Where there is disagreement as to the existence or consistency with a covered Agreement of measures taken to comply with the recommendations and rulings [of the DSB] such dispute shall be decided through recourse to these dispute settlement procedures, including wherever possible resort to the original panel.²³

7.11.

Panels and the Appellate Body have explained that the purpose of Article 21.5 is to provide for expedited procedures to determine whether a Member has properly implemented the recommendations and rulings of the DSB in the dispute.²⁴ The Appellate Body has made clear that, compared to the original panel proceedings, Article 21.5 proceedings "do not concern just any measure".²⁵ The mandate of a panel established under Article 21.5 is limited to an examination of "measures 'taken to comply' with the recommendations and rulings" of the DSB.²⁶ These are "measures which have been, or which should be, adopted by a Member to bring about compliance with the recommendations and rulings of the DSB".²⁷ Thus, the scope of Article 21.5 proceedings depends on: (a) the existence of relevant recommendations and rulings of the DSB; and (b) the existence (or otherwise) of measures taken to comply with those recommendations and rulings.

7.12.

The scope of a panel's jurisdiction with respect to what measures and claims it may consider in an Article 21.5 compliance proceeding has been addressed by a number of panels and the Appellate Body, and several fundamental principles have emerged from these decisions and are also relevant for the case before us. On the one hand, in the interests of ensuring prompt and thorough verification of compliance and due process for the complainant, it is now accepted that nothing in Article 21.5 limits the scope of a compliance panel's mandate to considering only certain claims in relation to, or certain aspects of, a measure taken to comply. In other words, a measure taken to comply with the DSB's recommendations and rulings is "a new and different measure" that must be examined in its totality, and an Article 21.5 panel must, in principle, examine all claims of inconsistency regarding the new measure, including those claims that are new and different from those raised in the original proceeding.²⁸ Thus, a complainant can challenge all aspects of a new measure taken to comply, not only those aspects related to issues covered by the original proceeding.²⁹

7.13.

On the other hand, a compliance panel proceeding is not an opportunity to "re‑litigate" issues that were addressed, or that could have been addressed, in the original proceeding.³⁰ The Appellate Body has concluded that, in the context of a compliance proceeding, a complainant may be precluded from bringing the same claim with respect to an aspect of the respondent's measure that is unchanged from the original dispute.³¹ We agree with the Appellate Body's conclusion and adopt it as our own in the current proceedings. An unchanged aspect of the original measure that the respondent did not have to change, and did not change, in complying with the recommendations and rulings of the DSB should thus not be susceptible to challenge in a compliance proceeding.³² This limitation is pertinent to two circumstances of particular relevance to the present dispute.

7.14.

First, this limitation applies when a complainant could have challenged the unchanged measure (or unchanged aspect thereof) in the original proceeding but chose not to.³³ By definition, a claim that a complainant could have made in the original proceedings – but did not – will relate to a matter that did not give rise to recommendations and rulings of the DSB. Such a claim would therefore not involve a "measure taken to comply" with recommendations and rulings of the DSB that is susceptible to challenge in compliance proceedings under Article 21.5.³⁴ However, a complainant can bring a new claim in compliance proceedings that it could have brought in the original proceedings – but did not – if the claim pertains to an aspect that is integral to the steps taken by the investigating authority to comply with the rulings and recommendations of the DSB.³⁵ Therefore, the possibility to challenge an element of the measure at issue for the first time in compliance proceedings, even if that element may not have changed, hinges on the "critical question" of whether such an element forms "an integral part of the measure taken to comply".³⁶

7.15.

Second, this limitation applies when an issue is decided on the merits against the complainant in the original proceedings, such as when the complainant challenged the unchanged measure (or aspect thereof) in the original proceeding but failed to establish a prima facie case.³⁷ Otherwise, a complainant could use Article 21.5 proceedings as a "second chance" to reargue a claim that has been decided on the merits in an adopted report.³⁸ The Appellate Body has treated differently, however, cases in which claims against aspects of a measure were not decided on the merits in the original proceedings. This is because such claims, despite having been brought in the original proceeding, are not covered by the recommendations and rulings of the DSB in respect of that proceeding.³⁹ Accordingly, the Appellate Body has entertained in compliance proceedings certain claims that had been raised in original proceedings but on which no ruling on the meritsof the claims had been rendered.⁴⁰ One example is where the Appellate Body has reversed panel findings but has not been able to complete the legal analysis.⁴¹ Similarly, the Appellate Body has permitted claims to be reasserted in compliance proceedings when the exercise of judicial economy has caused a claim to remain unresolved in the original proceedings without a decision on the merits having been rendered.⁴² Thus, compliance proceedings cannot be used to "re‑open" issues that were decided on the merits in the original proceedings.⁴³ But claims against aspects of a measure that are not decided on the merits in the original proceedings are not covered by recommendations and rulings of the DSB and thus can be reasserted in compliance proceedings.⁴⁴

7.16.

India requests the Panel to find that the USDOC's determination regarding the existence of a "financial contribution" through the provision of high-grade iron ore by the National Mineral Development Corporation (NMDC) for less than adequate remuneration (LTAR) is inconsistent with Article 1.1(a)(1) of the SCM Agreement due to a number of errors in its determination that the NMDC constitutes a "public body". These alleged errors are as follows. First, India submits that the USDOC erred in identifying the alleged "governmental function" performed by the NMDC.⁴⁵ Second, India submits that the USDOC erred in its treatment of evidence concerning the NMDC's so‑called "Miniratna status", according to which the NMDC is said to operate autonomously on commercial principles.⁴⁶ Third, India submits that the USDOC erred in its findings regarding the export restrictions applying to the NMDC and the significance of these to the "public body" determination.⁴⁷ Finally, India submits that the USDOC made an incorrect factual finding that the NMDC's Directors appointed by the Government of India (GOI) hold price negotiations for the sale of iron ore.⁴⁸ These are largely standalone allegations of error that relate to individual aspects of the USDOC's "public body" determination. The United States contends that, taken as a whole, the Panel should find the USDOC's "public body" determination to be "reasoned and adequate", and that India has not established that the conclusions reached by the USDOC were such that an unbiased and objective investigating authority could not have reached.⁴⁹

7.17.

We begin our assessment of these allegations of error by setting out the legal standard applicable to "public body" determinations. We then provide an overview of the legal and evidentiary background to the USDOC's finding that the NMDC constitutes a "public body" – that is, the evidence and inferences that the USDOC accepted and rejected, and the legal standard that it applied. It is useful to trace this background in full at the outset of our assessment, given that India's allegations of error pertain to discrete and distinct aspects of the USDOC's "public body" determination. This is followed by our evaluation of each of India's allegations of error regarding the USDOC's "public body" determination.

7.18.

Article 1.1(a)(1) of the SCM Agreement provides that a subsidy shall be deemed to exist if a financial contribution is provided by a government or any public body within the territory of a Member. The particular conduct of the government or public body must fall within any of the subparagraphs (i) to (iii) in Article 1.1(a)(1), or pursuant to subparagraph (iv), a government or public body may make payments to a funding mechanism, or otherwise entrust or direct a private body to carry out one or more of the type of functions illustrated in subparagraphs (i) to (iii).⁵⁰

7.19.

The Appellate Body has explained that a public body within the meaning of Article 1.1(a)(1) "must be an entity that possesses, exercises or is vested with governmental authority".⁵¹ In evaluating whether an entity is a public body, a relevant enquiry is whether "an entity is vested with authority to exercise governmental functions".⁵² The Appellate Body has further explained that "[w]hether the conduct of an entity is that of a public body must in each case be determined on its own merits, with due regard being had to the core characteristics and functions of the relevant entity, its relationship with the government, and the legal and economic environment prevailing in the country in which the investigated entity operates".⁵³ In addition, "just as no two governments are exactly alike, the precise contours and characteristics of a public body are bound to differ from entity to entity, State to State, and case to case".⁵⁴ We find the Appellate Body's reasoning persuasive, and shall be guided by it in our own objective assessment of the matter.

7.20.

Different types of evidence may be relevant to show that a government has bestowed authority on a particular entity, including such as when a statute or legal instrument expressly vests authority in an entity.⁵⁵ Absent express statutory delegation of governmental authority, evidence that an entity is in fact exercising governmental functions may serve as evidence that the entity in question possesses or has been vested with governmental authority, particularly when the evidence points to a sustained and systematic practice.⁵⁶

7.21.

The Appellate Body has also observed that "evidence that a government exercises meaningful control over an entity and its conduct may serve, in certain circumstances as evidence that the relevant entity possesses governmental authority and exercises such authority in the performance of governmental functions".⁵⁷ The Appellate Body has cautioned, however, that "the mere ownership or control over an entity by a government, without more, is not sufficient to establish that the entity is a public body".⁵⁸ Rather, "where evidence shows that the formal indicia of government control are manifold, and there is also evidence that such control has been exercised in a meaningful way, then such evidence may permit an inference that the entity concerned is exercising governmental authority".⁵⁹

7.22.

In the original proceedings in the present dispute, the Appellate Body shed further light on its interpretation of "public body" and the evidentiary standard for "meaningful control" in its explanation of how the Panel erred:

[T]he Panel erred in its substantive interpretation of Article 1.1(a)(1) by construing the term "public body" to mean any entity that is "meaningfully controlled" by a government. …

… the Panel did not analyse, in our view, the question of whether the GOI in fact exercisedcontrol over the NMDC and its conduct. Nor did the Panel assess whether the USDOC had properly established that the NMDC "possesses, exercises or is vested with governmental authority", and is therefore a public body. …

The Panel reviewed some indicia of control by the GOI (such as shareholding and the GOI's involvement in the selection of directors), but did not address the question of whether there was evidence that the NMDC was performing governmental functions on behalf of the GOI.⁶⁰

In view of these remarks, we recognize that it is not sufficient for an investigating authority to show than an entity is "meaningfully controlled" by a government for the purposes of a "public body" finding. Rather, it must also be shown that the entity is performing a governmental function, such that the entity is vested with, exercises, or possesses governmental authority.⁶¹ Such determinations are necessarily case‑by‑case.⁶² In terms of the process for identifying "governmental functions", we agree with the Appellate Body that "it may be relevant to consider 'whether the functions or conduct are of a kind that are ordinarily classified as governmental in the legal order of the relevant Member'" and "the classification and functions of entities within WTO Members generally".⁶³

7.23.

A further matter of interpretation raised in this dispute concerns the significance of an entity acting autonomously, or in commercial ways, to the "meaningful control" evidentiary standard and to the "public body" legal standard generally. The evidence on an entity's autonomy from a government may shed light on their relationship, but it does not ipso facto disqualify the entity from constituting a "public body". Rather, as just mentioned, "statutory delegation" – that is, the delegated capacity to operate autonomously – is one means of proving a "public body".⁶⁴ In the original proceedings, the Appellate Body considered that the USDOC's failure to "discuss" the "evidence on record regarding … Miniratna" – according to which, the NMDC was allegedly conferred with "enhanced autonomy"⁶⁵ – manifested an error because such evidence "could have been relevant" to the question of meaningful control.⁶⁶ For the Appellate Body, the failure to discuss such evidence reflected the application of an incorrect legal standard by the USDOC.⁶⁷ The Appellate Body did not indicate that this evidence would be necessarily dispositive to an affirmative or negative "public body" finding. Thus, we do not accept that an entity acting autonomously necessarily disqualifies it from constituting a "public body".⁶⁸ On the contrary, the delegation of autonomy by a government to an entity could in some circumstances indicate that it constitutes a "public body".

7.24.

Further, we do not accept that an entity acting in commercial ways disqualifies it from being a "public body".⁶⁹ The SCM Agreement includes provisions in relation to the benefit analysis which foreshadow explicitly that the entities regulated by the SCM Agreement (including "public bodies") could be operating on commercial principles.⁷⁰ However, that does not mean that whether an entity acts commercially – or uncommercially – is irrelevant to the "public body" analysis.⁷¹ For instance, if an entity's practice is not profit‑maximising, or if it is structurally incapable of acting in profit‑maximising ways, this could corroborate other evidence from which it can be inferred that the entity is performing a governmental function.⁷² Beyond that, in the absence of any direct textual guidance in the SCM Agreement on the role of commercial or non‑commercial conduct in identifying a "public body", it would be imprudent to affix rigid rules as to how evidence regarding such conduct should be treated in a given "public body" determination. Rather, it is a matter for an investigating authority to determine the proper role and probative weight of the evidence regarding commercial or non‑commercial conduct in a given case, and to justify its findings on such evidence through a reasoned and adequate explanation.

7.25.

We make a further observation regarding the evidentiary standard for proving "meaningful control" and for satisfying the legal test for "public body" determinations generally. The interpretation of any provision of the SCM Agreement must leave intact an investigating authority's ability to arrive at a negative or affirmative determination. A legal interpretation that imposes an evidentiary burden on an investigating authority that is impossible to satisfy in practice would not be consonant with the text and structure of the SCM Agreement.⁷³ Moreover, an evidentiary standard for proving "public body" that differentiates, in practice, between Members whose governments tend to control their entities through formal and publicly‑documented methods vis‑à‑vis those who tend to control their entities through informal or undocumented methods would not be consonant with the proper interpretation of that term. If such an evidentiary standard were applied, it could lead to the term "public body" having a different scope in practice for different Members.⁷⁴ This would frustrate the underlying objective of interpreting terms in treaties, namely to arrive at the common intention of the parties.⁷⁵

7.26.

Finally, in order to be able to provide a reasoned and adequate explanation of their conclusions on the existence of a "public body", the Appellate Body has stated that investigating authorities are "under an obligation to actively seek out information relevant to the analysis".⁷⁶ This does not mean that Article 1.1(a)(1) of the SCM Agreement embeds a standalone obligation to seek and accept evidence. Nothing in the text of Article 1.1(a)(1) justifies the existence of such a standalone obligation. Rather, the presence of sufficient evidence on the record is a corollary of an investigating authority being able to undertake the evaluation necessary to comply with the legal standard for a substantive obligation. If an investigating authority does not possess sufficient evidence on the record to reach a determination, it may need to seek or accept additional evidence in order to be capable of providing a "reasoned and adequate" explanation that satisfies the requirements of a substantive obligation. However, it does not follow that there is a standalone obligation in Article 1.1(a)(1) to seek or accept evidence separate from the basic requirement to provide a "reasoned and adequate" explanation.

7.27.

We now set out the legal and evidentiary background to the USDOC's determination that the NMDC comprises a "public body" under Article 1.1(a)(1) of the SCM Agreement.

7.28.

It is useful to trace this background in full at the outset, given that India's allegations of error pertain to discrete and distinct aspects of the USDOC's "public body" determination. By setting out this background, we seek to contextualize our subsequent assessment of each of India's allegations of error. This is an important aspect of our assessment because, on the one hand, the United States submits that India's claims are focused too narrowly on individual inferences or pieces of evidence.⁷⁷ India's view, on the other hand, is that the USDOC engaged in "selective reading of available evidence and rejected the information which did not support its pre‑determined conclusions" and engaged in a biased and unobjective assessment of evidence.⁷⁸

7.29.

We do not draw any conclusions at this stage. However, we do make a number of observations as we recount the legal and evidentiary background to the USDOC's determination. These observations seek to contextualize this background in light of the Appellate Body's legal and evidentiary standard for "public body" determinations described in section 7.2.2. These observations are without prejudice to our subsequent evaluation of India's allegations, and should not be taken to imply any conclusions.⁷⁹

7.30.

We begin in this section by recounting the legal standard and elements of evidence relied upon by the USDOC in its Preliminary Determination that the NMDC comprises a "public body". We then set out the legal and evidentiary arguments that the GOI made in rebuttal to the Preliminary Determination. Finally, we set out how the USDOC responded to these rebuttals, and explain the legal and evidentiary basis for its Final Determination.

7.31.

In its Preliminary Determination, the USDOC explained that it was "revising the analysis underlying these four determinations in accordance with findings in the relevant reports adopted by the WTO Dispute Settlement Body (DSB)"⁸⁰, and explained its understanding of the applicable "public body" DSB finding as follows:

The AB found that the Department did not provide a reasoned and adequate explanation of its basis for finding the NMDC to be a public body within the meaning of Article 1.1(a) of the SCM Agreement. The AB explained that a determination of whether an entity performs a government function is dependent on the entity's position in the legal structure of the country in question, and found that the Department did not adequately analyze the extent to which the GOI exercised meaningful control over the NMDC and its conduct.⁸¹

7.32.

The USDOC assessed certain evidence and reached the following Preliminary Determination:

Because the NMDC is exploiting public resources on the behalf of the Indian government, the owner of the resources, the Department preliminarily determines the GOI exercises meaningful control over the NMDC, which is vested with government authority in performing a government function in India. Therefore, we preliminarily determine that the NMDC is a government authority within the meaning of section 771(5)(B) of the Act, and thus a public body within the meaning of Article 1.1(a)(1) of the SCM Agreement.⁸²

7.33.

It is apparent from these extracts that the legal standard that the USDOC sought to apply for its "public body" determination was whether the NMDC was vested with governmental authority in India. The USDOC was guided in this regard by whether the NMDC performed a governmental function and whether the GOI exercised of meaningful control over the NMDC.

7.34.

The evidence cited by the USDOC for its Preliminary Determination that the NMDC constituted a "public body" included that: (a) 98.38% of the NMDC was owned by the GOI; (b) the GOI appoints, or has approval power over, a majority of the board of directors; (c) the GOI owns all the mineral resources on behalf of the Indian public and has the final approval of the granting of mining leases for iron ore, which meant that "it is a function of the government of India to arrange for the exploitation of public assets, in this case iron ore"; (d) the NMDC's website indicated that it was established specifically by the GOI to perform part of that governmental function; (e) the NMDC's website also stated that it was under the "administrative control" of the Ministry of Steel and the GOI; and (f) a Ministry of Steel official described the NMDC as a "strategic company which was monitored and reviewed by the government because it provided a specific service to the Indian public".⁸³ The USDOC considered that the NMDC's Board of Directors acts on the "GOI's behalf in the day‑to‑day operations of the NMDC", and that "in the legal order of India, the NMDC performs a government function".⁸⁴

7.35.

In respect of the USDOC's discussion of the evidence regarding the NMDC's Miniratna status in the Preliminary Determination, it is useful to extract the full passage:

The website further states that NMDC was accorded the status of a "Public Sector Company by the GOI [Miniratna] in 'A' category in its categorisation of Public Enterprises." No further evidence on the record defines the [Miniratna] categorization, nor does any further evidence refer to the GOI's "Ratna" designations for companies. The evidence on the record shows that the GOI treated the NMDC as a public sector company, and was significantly involved in its day‑to‑day operations, as explained further below. This constitutes further evidence that the GOI treated the NMDC as a public entity.⁸⁵

7.36.

We note that the parties contest how to understand the USDOC's treatment of Miniratna status, and we also note that India contests the veracity and significance of the evidence cited in paragraph 7.34 particularly when viewed against other evidence. Without prejudice to our evaluation of India's specific claims below, we observe that the evidence cited by the USDOC reflects the type and nature of evidence that can be relevant to demonstrating that an entity is a "public body", as elaborated above in section 7.2.2. This includes, for instance, evidence that an entity is performing a function that is governmental in the legal order of the investigated Member, and evidence that the government is meaningfully controlling the entity through significant involvement in its day‑to‑day operations.

7.37.

The GOI submitted a case brief dated 28 March 2016 that responded to the USDOC's Preliminary Determination.⁸⁶ This case brief contained "new factual information" according to the USDOC, including in relation to whether the NMDC constituted a "public body".⁸⁷ The USDOC rejected the GOI's case brief because it contained this "new factual information".⁸⁸ The GOI resubmitted a case brief dated 31 March 2016 which omitted that information.⁸⁹ This procedural history is relevant because it relates to whether the "new factual information" was properly on the record of investigation, and therefore whether – and to what extent – this information may be considered by the Panel. For present purposes, we use the case brief dated 31 March 2016 as our primary point of reference, without prejudice to our discussion below on the status of the "new factual information".

7.38.

In response to the Preliminary Determination, the GOI submitted that the USDOC had "not engaged in any analysis to explain how and why the NMDC 'possess[es], exercise[s] or [sic] [is] vested with government authority'"⁹⁰, and thus failed to satisfy the requisite legal standard.⁹¹ In terms of the evidence relied on by the USDOC, the GOI submitted that the USDOC "has come to the conclusion that the GOI was involved in the 'day‑to‑day operations' of NMDC based on the GOI's shareholding, the power to appoint and nominate the board of directors, and the reference on the NMDC's website indicating that the NMDC is under 'administrative control' of the GOI", and that these were mere "formal indicia of control" and insufficient for a "public body" determination.⁹²

7.39.

The GOI also submitted that the evidence "actually supports the conclusion that 8 of the 12 directors, i.e. a majority, are not government appointees and have no allegiance to the GOI inasmuch as their salaries are from the profits of NMDC" as opposed to the GOI.⁹³ This was based on the evidence that four directors were appointed by the Public Enterprise Selection Board (an independent body within the GOI's Department of Public Enterprises), and another four directors were outside part‑time directors whose functions were as experts.

7.40.

Further, the GOI submitted that other evidence indicated that eight "independent non‑executive Directors [are] required to comply with the corporate governance norms of the national stock markets regulator".⁹⁴ This meant that those directors "were independent of the GOI", and that the "GOI cannot be said to have had a majority in, or control over, NMDC's board".⁹⁵ The GOI also argued that the evidence that the NMDC conducted iron ore price negotiations based on commercial principles and without interference from the Ministry of Steel rebutted the USDOC's conclusion that the GOI was involved in the day‑to‑day operations of the NMDC.⁹⁶ In particular, the GOI pointed to evidence that the NMDC Chairman and a subset of Directors were directly involved in price negotiations and took into account factors such as international price increases, net sales realization, and a comparison with the landed cost of comparable imports of iron ore.⁹⁷

7.41.

In respect of Miniratna status, the GOI rejected the USDOC's finding that there was no evidence on record as to its meaning and scope⁹⁸, and instead quoted its supplemental questionnaire response in the 2004 administrative review:

How is the government involved in the daily operations of NMDC?

… It is a [Miniratna] Category I Company, which gives it, enhanced autonomy with regard to investment decisions and personnel matters... [.]⁹⁹

7.42.

On the basis of this quotation, the GOI submitted that "the fact that NMDC has [Miniratna] status has been placed on record and the GOI has asserted that as a result, NMDC has 'enhanced autonomy'".¹⁰⁰ The Panel observes at this juncture that the quotation relied upon by the GOI suggests that the NMDC's "enhanced autonomy" is not plenary. Rather, it is confined "to investment decisions and personnel matters". The picture of the NMDC's autonomy being confined is augmented by another passage in the GOI's case brief that quotes the GOI's supplemental questionnaire response in the 2004 administrative review, namely that:

NMDC is operating in a commercial, market driven de‑regulated environment and conducts its operations and businesses on commercial principles. It enjoys freedom in its day‑to‑day operations. Except for certain personnel related matters and investment decisions over specified limits, it takes its own decisions with the approval of its Board. All commercial matters are dealt with by the company on its own.¹⁰¹

Although this passage asserts that the NMDC enjoyed "freedom in its day‑to‑day operations", it explains that this freedom was curtailed "for certain personnel related matters and investment decisions over specified limits". This accords to some extent with the GOI's explanation that the "enhanced autonomy" accorded by Miniratna is limited to only certain areas (namely "personnel related matters and investment decisions").¹⁰²

7.43.

We also observe that the above extract quoted by the GOI in its case brief is followed subsequently in the GOI's supplemental questionnaire response in the 2004 administrative review with the additional explanation that:

As stated above the government's shareholding in NMDC is over 98% but the ownership of the mines vests with the company. The Government of India is involved in setting broad guidelines for the administrative functioning of the companies in the public sector like NMDC. Investment decisions, over certain specified limits, also require government approval. Beyond this, these companies have full operational, commercial and functional autonomy. Besides such companies are required to enter into annual memorandums of understanding with the government wherein annual performance parameters and targets are agreed to. The government monitors the performance of these companies, during the year, against these parameters and targets.¹⁰³

This explanation clarifies further what is meant by the NMDC's "freedom in its day‑to‑day operations" and its "autonomy". In particular, the NMDC operates autonomously only within parameters that have been set by the GOI, and which are monitored by the GOI for compliance.¹⁰⁴ Further, there are areas where the NMDC has no autonomy, namely "[i]nvestment decisions, over certain specified limits", which "require government approval". These apparent limitations on the NMDC's autonomy are an important aspect of the evidence on this point, to which we will return.

7.44.

In terms of the legal implications of Miniratna status, the GOI submitted in its case brief that "since the [Miniratna] status of NMDC is not a fact in dispute, this forms an integral part of the relationship between the GOI and NMDC and this is governmental policy that ensures that companies like NMDC operate as independent corporate entities, on commercial principles", which in turn rebuts the USDOC's conclusion that the GOI meaningfully controlled the NMDC.¹⁰⁵ For the GOI, if the USDOC did not consider there to be sufficient record evidence to substantiate this implication of Miniratna status, then the USDOC was "under an obligation to have sought out the required clarifications or information to properly investigate this aspect in a reasonable and objective manner".¹⁰⁶

7.45.

In its Final Determination, the USDOC responded to these submissions of the GOI and added a number of aspects of evidence to its determination that the NMDC constituted a public body.

7.46.

In respect of the GOI's contention regarding the NMDC's price negotiations, the USDOC noted that "[t]he directors, not NMDC staff members, hold negotiations with customers to discuss price and quantity", and "[t]he chairman approves negotiation and then contracts are submitted to the Board for ratification".¹⁰⁷ For the USDOC, "[t]his demonstrates that the board members, particularly the chairman, which is appointed by the GOI, are not mere observers but active and involved in the day‑to‑day operations of the NMDC on the GOI's behalf".¹⁰⁸ Further, in response to the GOI's argument that the NMDC's prices were set commercially, the USDOC pointed to evidence that: (a) the NMDC Chairman had recommended an export ban on high-grade iron ore (except when exported under long term contracts), which was in line with the GOI policy; and (b) export restrictions had been applied to the NMDC. In particular, the USDOC cited page 185 of the Dang Report, in which the NMDC Chairman is recorded as stating:

NMDC is exporting iron ore only to meet its commitment under long term contract. …

Government should re‑examine the whole issue of export of iron ore. He suggested that except long term contract, export of iron ore should not be allowed. …

There is a shortage in supply of iron ore which is reflected in terms of its rising prices.¹⁰⁹

7.47.

We observe that other passages of the Dang Report also record views expressed by the NMDC on these matters, including that the "[e]xport of lump ore should be discouraged to meet the domestic demand", and that "[t]he raw material being natural reserves should be available adequately for the domestic industry and exports should not be at the cost of domestic industry".¹¹⁰ In that regard, we note that the USDOC stated that the NMDC Chairman's recommendation to the Dang Report on export restrictions was "in line with governmental policies".¹¹¹ The USDOC did not attach a reference to that statement. We nonetheless observe that the record evidence from a report prepared by and for the GOI suggests that "it is the GOI's intention to restrict exports of iron ore with Fe content higher than 64 per cent, with a view to ensuring that the exports do not take place at the cost of supplies to domestic steel producers".¹¹² This appears to show a degree of alignment between the NMDC's rationale for export restrictions and the GOI's policy rationale for export restrictions.

7.48.

The USDOC also cited page 8 of the Verification Report in concluding that "[c]ontrary to the GOI's assertion that prices are determined by the supply and demand of the market, NMDC described at verification that there are export restrictions in place", which includes in relevant part:

Officials [of the NMDC] explained that the Export Bulletin is a cap on what is allowed to be exported; however, the mine has never reached this cap. The export restriction begins if exports exceed or approach 6.8 MT; the official explained that the mine only exports between 4‑5 MT. Other mines do not have this restriction limit. We asked why this mine has a restriction and the others do not. The official explained that the Bailadila mines are very rich in Fe content … As a result of this high Fe content, the government does not want all of it to be exported[.]

Iron ore of +64 is one of these products and thus can only be exported by a special trading company, the [Metals and Minerals Trading Corporation of India]. … The Ministry of Commerce monitors the export of high grade through the MMTC … [.]¹¹³

7.49.

The picture that emerges from this aspect of the Verification Report and the aspect of the Dang Report extracted earlier¹¹⁴ is as follows. Not only did the NMDC Chairman recommend certain export restrictions on high-grade iron ore to the GOI, but he also indicated that the NMDC itself only exported high‑grade iron ore to meet the commitments under long term contracts. The NMDC's rationale for exporting iron ore only to meet such commitments appears to have been that "exports should not be at the cost of domestic industry".¹¹⁵ The GOI also imposed export caps on the NMDC's exports of high‑grade iron ore, and for substantially the same rationale as articulated by the NMDC, but the NMDC never reached those GOI‑mandated caps. Thus, the NMDC's export of high-grade iron ore only to meet commitments under long term contracts – and its recommendation that the GOI adopt such a limitation – appears to reflect a stricter limitation in practice than the existing GOI‑mandated export caps.

7.50.

Against this evidentiary background, and also in light of the evidence that the NMDC was monitored by the GOI as a "strategic company" whose "GOI‑appointed directors" conducted price negotiations, the USDOC considered that "the conditions of the market are being influenced by the GOI's policy considerations and actions … rather than by the activity of unfettered participants in a private market".¹¹⁶

7.51.

The USDOC also addressed the GOI's submissions regarding the NMDC's Miniratna status. It found that "the GOI does not point to supporting record evidence that shows that this categorization reflects 'enhanced autonomy' on the part of the NMDC".¹¹⁷ We recall at this juncture that the evidence cited in the GOI's case brief pertained to the "enhanced autonomy with regard to investment decisions and personnel matters", and not to "enhanced autonomy" generally.¹¹⁸ The USDOC also "disagree[d] that the record was deficient regarding NMDC's [Miniratna] status as it related to NMDC's autonomy".¹¹⁹

7.52.

The USDOC concluded in its Final Determination that "the record shows that NMDC's management and day‑to‑day operations remained under the control of the GOI, and that NMDC provided a governmental function in the legal order of India", and therefore "the NMDC possesses, exercises, or is vested with governmental authority".¹²⁰

7.53.

Without prejudice to our evaluation of India's specific claims below, we observe that, as with the Preliminary Determination, the evidence cited in the Final Determination reflects the type and nature of evidence that can be relevant to demonstrating a "public body" (see further section 7.2.2 above). In particular, the evidence that the NMDC Chairman was appointed by a GOI body and took steps to advocate a position on exports that aligned with governmental policy and appeared to diverge from profit‑maximising behaviour¹²¹ gives rise to a reasonable inference that the government is exercising "meaningful control" over the entity through its appointee. Likewise, the evidence that this same Chairman supervises price negotiations with customers warrants the inference that the government is involved in the day‑to‑day operations of the NMDC through its appointee, and thus that the GOI exercises "meaningful control" over the NMDC.

7.54.

This inference is corroborated by the evidence cited by the USDOC that the NMDC perceived itself as being under the "administrative control" of the GOI, together with the evidence cited by the USDOC that the GOI perceived the NMDC as being a "strategic compan[y]" that provides a "specific service to the people". The GOI contended that the inference of "meaningful control" was rebutted by the "enhanced autonomy" of the NMDC. However, by the GOI's own description, this "autonomy" was limited to "investment decisions and personnel matters". Thus, the alleged "autonomy" did not pertain to the areas where the USDOC found evidence of governmental involvement in the operations of the entity, namely the NMDC's price negotiations and the application of export restrictions.¹²² This, in turn, elucidates the USDOC's comment that "the record was [not] deficient regarding NMDC's [Miniratna] status as it related to NMDC's autonomy". We also recall that the GOI's own questionnaire response indicated that the NMDC's autonomy was exercised within parameters that were set annually, and monitored regularly, by the GOI. These aspects of the questionnaire were confirmed in the USDOC's Verification Report.¹²³ Accordingly, the record evidence on the scope and nature of the autonomy enjoyed by the NMDC did not necessarily warrant the inference that the GOI was not involved in the conduct of the NMDC.

7.55.

On the basis of the foregoing, we observe that the legal standard that the USDOC sought to apply for its "public body" determination was whether the NMDC was vested with governmental authority in India. The USDOC was guided in this regard by whether the NMDC performed a governmental function and whether the GOI exercised meaningful control over the NMDC. We also observe that the evidence relied upon by the USDOC was of a nature and type that can be relevant to "public body" determinations. The inferences drawn by the USDOC from that evidence appear on their face to be reasonable and mutually reinforcing. This does not mean that the USDOC's explanation was necessarily "reasoned and adequate", and thus consistent with Article 1.1(a)(1) of the SCM Agreement.¹²⁴ Rather, we reiterate that our observations in this section are intended only to provide background and context to our evaluation of India's specific allegations of error and the United States' rebuttals, to which we now turn.

7.56.

India claims that the USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement by concluding that mining is a "governmental function" in India.¹²⁵ We disagree. India relies on an incorrect legal standard that would require the USDOC to show that mining is both: (a) classified as a governmental function in the legal order of India; and (b) normally classified as "governmental" within other WTO Members.¹²⁶ To require an investigating authority to make such a showing would be to apply an impossible evidentiary standard.¹²⁷ Moreover, this proposed legal standard does not comport with the standard articulated by the Appellate Body.¹²⁸

7.57.

India also argues that the record evidence of a governmental function was confined only to the approval of mining leases, and not to the activity of mining iron ore.¹²⁹ In our view, this is an overly formalistic distinction. The USDOC determined that it is a function of the GOI to arrange for the exploitation of public assets including iron ore¹³⁰, relying principally on the evidence in the Dang Report that the GOI owns all mineral resources and is responsible for approving mining leases.¹³¹ The USDOC also relied on the fact that the NMDC was established by the GOI to mine iron ore, which a GOI official had described as performing a "service to the people".¹³² In our view, it was reasonable for the USDOC to conclude from this evidence that it is a function of the GOI to arrange for the exploitation of iron ore. The fact that the USDOC did not rely upon evidence that the GOI itself was undertaking mining is not dispositive. The grant of a right or lease to an entity to extract a good can be tantamount to providing that good to the entity.¹³³ Therefore, it would be unduly narrow to construe the "governmental function" in this case as providing leases or rights to the good, rather than as encompassing the exploitation of the good. The Appellate Body has stated that the determination of "whether a particular conduct is that of a public body must be made by evaluating the core features of the entity and its relationship to government in the narrow sense".¹³⁴ Contrary to India's argument, the USDOC's determination was not based only on whether the particular conduct of mining iron ore comprised a "governmental function". Rather, the USDOC evaluated this conduct as part of its examination of the relationship between the NMDC and the GOI, including by referring to the fact that the GOI established an entity (the NMDC) – in which it continued to hold a 98% ownership stake – for the very purpose of undertaking mining.¹³⁵ Indeed, the USDOC's determination was not that the conduct of mining iron ore alone comprised a "governmental function", but was instead the "arrang[ing] of the exploitation" of iron ore, including through owning the resource, granting leases to the resource, and establishing the NMDC as a government-owned entity to exploit the resource.¹³⁶

7.58.

India also argued that the "SCM Agreement [is] intended to apply only when entities operate in the public realm", whereas the NMDC was set up by the government to operate in the "private realm".¹³⁷ For India, entities operating in the "private realm" cannot be said to be performing a "governmental function", since "the Appellate Body has evolved the test of 'governmental functions' as a tool to determine areas that do not concern the 'public realm'".¹³⁸ According to India, "setting‑up commercial enterprises like NMDC involve the government operating in the private realm and such commercial enterprises cannot be considered to be 'public bodies'".¹³⁹ We disagree. The SCM Agreement is directed at facilitating remedies to injury incurred by the domestic industry as a result of certain types of governmental interventions in markets. This presupposes that such interventions are occurring in "realms" where markets are operating and other enterprises can be harmed. There is thus no basis for inferring a distinction between "public" and "private" realms for the purposes of the SCM Agreement.

7.59.

In summary, the USDOC sought to ascertain whether the NMDC "provided a governmental function in the legal order of India".¹⁴⁰ The USDOC relied on evidence regarding the GOI's legal ownership of the resource in question and the legal tools deployed by the GOI (i.e. granting leases and establishing the NMDC) for the development of the resource. This provided a sufficient evidentiary basis for the USDOC's conclusion that "it is a function of the government of India to arrange for the exploitation of public assets, in this case iron ore" and that the "NMDC provided a governmental function in the legal order of India."¹⁴¹ India has not demonstrated that the USDOC acted inconsistently with Article 1.1(a)(1) by reaching this conclusion.¹⁴²

7.60.

India pursued two alternative grounds¹⁴³ on which the USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement in its treatment of NMDC's Miniratna status, and the GOI's assertion that the NMDC possessed "enhanced autonomy" as an implication of that status:

a. the USDOC erred by failing to accord "due significance" to the existing record evidence regarding the implications of Miniratna status¹⁴⁴; and

b. the USDOC erred by failing to seek further evidence and clarifications regarding the implications of Miniratna status, and likewise by failing to accept the voluntarily‑submitted evidence on that point.¹⁴⁵

7.61.

India argued that the Appellate Body "pointed to the failure of the USDOC in not evaluating the implication of NMDC's [Miniratna] … status", and that the USDOC was therefore "forced to consider this factor by the Appellate Body" as part of the reinvestigation.¹⁴⁶ According to India, it was therefore insufficient for the USDOC to decline to consider the legal implications of Miniratna status on the grounds of insufficient record evidence. Either the USDOC should have accounted for the "enhanced autonomy" flowing from Miniratna status in its evaluation, or, if the USDOC doubted the assertion of "enhanced autonomy", it should have sought and accepted further evidence.¹⁴⁷

7.62.

The United States responds that the Appellate Body reports on which India relies to infer a "duty to seek or accept evidence" are unrelated to Article 1.1(a)(1) of the SCM Agreement, nor does the text of that provision impose such a duty.¹⁴⁸ Further, the DSB ruling¹⁴⁹ in the present dispute did not call for additional evidence to be sought. Thus, for the United States, the USDOC was justified in limiting its evaluation of Miniratna status to the existing record evidence. For the United States, this evidence suggested that the conferral of Miniratna status did not displace an inference of meaningful control. Instead, the United States contends that the evidence of Miniratna status corroborated other evidence of the GOI's involvement in the NMDC's operations.¹⁵⁰

7.63.

Our analysis of the parties' arguments proceeds on the basis of the existing record evidence, and not the "new factual information" that the GOI submitted as part of its rejected case brief (see above paragraph 7.37). We address the proper role and significance of this "new factual information" later in our analysis.

7.64.

An initial matter where the parties disagree concerns how the USDOC used the evidence of Miniratna status in its determination. India contends that the USDOC simply disregarded the evidence of Miniratna status.¹⁵¹ By contrast, the United States considers that the USDOC found that the existing record evidence regarding Miniratna status demonstrated sufficiently that Miniratna status did not accord the NMDC with a generalized "enhanced autonomy".¹⁵² Rather, for the United States, the evidence of Miniratna status supported the USDOC's determination that the NMDC was a "public body".¹⁵³

7.65.

We agree with the United States' reading of the USDOC's determination. We accept that the USDOC may have simply disregarded evidence of the legal implications of Miniratna status in the Preliminary Determination.¹⁵⁴ However, the USDOC did not simply disregard this evidence in the Final Determination. Rather, the USDOC stated in the Final Determination that it "disagrees that the record was deficient regarding NMDC's [Miniratna] status as it related to NMDC's autonomy".¹⁵⁵ This indicates to us that the USDOC assessed the record evidence concerning the NMDC's autonomy, including the evidence to which the GOI had referred in its case brief, as part of its Final Determination, and concluded that the record was not deficient on that point.¹⁵⁶ The USDOC also stated that "the GOI does not point to supporting record evidence that shows that this categorization reflects 'enhanced autonomy' on the part of the NMDC".¹⁵⁷ When viewed against the evidence to which the GOI had referred in its case brief, this statement does not suggest that the USDOC disregarded the alleged "enhanced autonomy" conferred by Miniratna status. Rather, this conclusion is indicative of the USDOC having reviewed the record evidence and having found it showed that the NMDC's autonomy was confined in certain ways, and thus did not possess a generalized "enhanced autonomy". We also agree with the United States' understanding that the USDOC used Miniratna status as corroborating evidence for its "public body" determination. In particular, the USDOC explained in its Preliminary Determination that this status showed "that the GOI treated the NMDC as a public sector company" and that "[t]his constitutes further evidence that the GOI treated the NMDC as a public entity".¹⁵⁸ On the basis of this understanding of the USDOC's determination, we now evaluate India's two alternative grounds.

7.66.

We turn now to India's first ground, namely that the USDOC failed to accord "due significance" to the existing record evidence demonstrating that "enhanced autonomy" flowed from Miniratna status. In terms of the "significance" that the USDOC should have accorded to Miniratna status, India argues that this "evidence proves that Government of India did not in fact exercise meaningful control over the NMDC as an entity and over its conduct and that NMDC was an autonomous entity".¹⁵⁹ As we have just recounted, the USDOC did not use Miniratna status in that way, but instead made two other findings. First, the USDOC found that the record evidence did not substantiate the "enhanced autonomy" that India now claims to have been an implication of Miniratna status. Second, the "significance" actually ascribed by the USDOC to Miniratna status was that it corroborated its "public body" determination because it "showed that the GOI treated the NMDC as a public sector company".¹⁶⁰ Against that background, the question before us is whether the USDOC provided reasoned and adequate explanations for those two findings, or instead, whether the USDOC was required to treat Miniratna status as rebutting "meaningful control", as contended by India.

7.67.

In respect of the USDOC's first finding, we consider that the USDOC had a sufficient evidentiary basis for concluding that "the GOI does not point to supporting record evidence that shows that this categorization reflects 'enhanced autonomy' on the part of the NMDC".¹⁶¹ The existing record evidence – including that which the GOI had relied upon in its case brief – showed that the "autonomy" conferred by Miniratna status was: (a) confined to certain investment and personnel matters¹⁶²; and (b) periodically delimited by the GOI through "annual performance parameters and targets".¹⁶³ Further, the spheres in which the record evidence indicated that the NMDC operated autonomously due to Miniratna status – namely, "investment and personnel" matters¹⁶⁴ – are different to the spheres where the USDOC found evidence of "meaningful control" by the GOI – namely, price negotiations and export restrictions.¹⁶⁵ Thus, the fact that the NMDC may have accrued a degree of autonomy in certain areas through Miniratna status – namely "investment and personnel" matters – does not clearly rebut the inference that the GOI exercised "meaningful control" over the NMDC in other areas, contrary to India's contention. Further, any such autonomy subsisted only within parameters that had already been set through annual memoranda with the GOI.¹⁶⁶ In that regard, we affirm our earlier observation that the record evidence on the scope and nature of the autonomy enjoyed by the NMDC does not warrant an inference that the GOI was not involved in the conduct of the NMDC.¹⁶⁷

7.68.

In respect of the USDOC's second finding, we consider that the USDOC had a sufficient evidentiary basis for concluding that Miniratna status "constitutes further evidence that the GOI treated the NMDC as a public entity".¹⁶⁸ We note that this finding did not form the core of the USDOC's "public body" determination.¹⁶⁹ It was, at most, peripheral corroborating evidence. Nonetheless, the fact that the NMDC "was accorded the status of a 'Public Sector Company by the GOI [Miniratna] in 'A' category in its categorisation of Public Enterprises'"¹⁷⁰ corroborates the evidence cited by the USDOC that the GOI viewed the NMDC as a public entity that "provides a specific service to the people".¹⁷¹ In view of that role, a GOI official had described the NMDC as a "strategic compan[y]".¹⁷² This, in turn, supported other evidence regarding the importance that the GOI placed on the NMDC, such as that the GOI set annual parameters and targets for the NMDC which were regularly monitored.¹⁷³ Further, we do not consider it incongruous for the USDOC to have found, on the one hand, that the NMDC was subject to "meaningful control" by the GOI in certain ways, while also finding, on the other hand, that the designation as a Miniratna company (with its attendant degree of autonomy and apparent parliamentary/governmental supervision¹⁷⁴) corroborated a finding of "public body". This is because the record evidence suggests that, in the factual circumstances of the present case, the exercise of "meaningful control" and the grant of a degree of autonomy through Miniratna status could plausibly coexist.¹⁷⁵

7.69.

We therefore conclude that India has not demonstrated that the USDOC failed to give "due significance" to Miniratna status, nor that the USDOC failed to provide reasoned and adequate explanations for its findings on Miniratna status and the autonomy that it allegedly conferred.¹⁷⁶

7.70.

We turn now to India's alternative ground for challenging the USDOC's treatment of Miniratna status and the GOI's assertion that the NMDC possessed "enhanced autonomy" through that status, namely that the USDOC erred by failing to seek further evidence and clarifications regarding the implications of Miniratna status, and likewise by failing to accept the voluntarily‑submitted evidence on that point.¹⁷⁷

7.71.

India's alternative argument is premised on its understanding that the USDOC declined to take into account the assertion that Miniratna status conferred "enhanced autonomy" on the basis that the record evidence from 2004‑2007 did not contain sufficient information substantiating that assertion.¹⁷⁸ By failing to seek such information and rejecting information submitted voluntarily, India claims that the USDOC violated Article 1.1(a)(1) of the SCM Agreement.¹⁷⁹

7.72.

We disagree with the premise of India's argument concerning the basis on which the USDOC rejected the allegation of "enhanced autonomy" conferred by Miniratna status. As we have explained earlier¹⁸⁰, the USDOC did not reject the assertion of "enhanced autonomy" from Miniratna status due to a paucity of evidence. Rather, when read against the broader evidentiary background and the submissions made by the GOI in its case brief, it is apparent that the USDOC considered there to be sufficient record evidence concerning Miniratna status which contradicted the assertion of a generalized "enhanced autonomy", and which instead pointed to a confined autonomy that did not rebut the inference of "meaningful control" by the GOI. As we have explained earlier, the USDOC had a sufficient evidentiary basis for adopting this position.¹⁸¹

7.73.

We also disagree with India's contention that Article 1.1(a)(1) of the SCM Agreement embeds a "duty"/"obligation" to both seek and accept evidence.¹⁸² We acknowledged earlier that, if an investigating authority does not possess sufficient evidence on the record to reach a determination, it may need to seek or accept additional evidence in order to be capable of providing a "reasoned and adequate" explanation that satisfies the requirements of a substantive obligation.¹⁸³ However, it does not follow that there is a standalone obligation in Article 1.1(a)(1) to seek or accept evidence separate from the basic requirement to provide a "reasoned and adequate" explanation. In view of our conclusion at paragraph 7.69 we likewise conclude that India has not demonstrated that the USDOC needed to seek and accept additional evidence on the legal implications of Miniratna status in order to be capable of providing a "reasoned and adequate" explanation for its "public body" determination.

7.74.

India additionally argued that the USDOC was required to seek and accept evidence on Miniratna status (and its legal implications) because the USDOC was "forced to consider this factor by the Appellate Body" in the original proceedings, but had declined to do so in the reinvestigation due to insufficient record evidence on this factor.¹⁸⁴ Again, we disagree with the premise that the USDOC dismissed the relevance of Miniratna status due to a paucity of record evidence. We also disagree that the relevant DSB ruling "forced [the USDOC] to consider this factor", including by seeking and accepting additional evidence. The Appellate Body did not suggest that Miniratna status was necessarily relevant or dispositive (nor more probative than other elements of evidence), but rather, that the failure to discuss such evidence reflected the application of an incorrect legal standard by the USDOC.¹⁸⁵ Accordingly, the DSB ruling required the USDOC to provide an explanation that reflects the application of the correct legal standard, which would include a discussion of the kinds of evidence relevant to that legal standard, such as Miniratna status and its legal implications.¹⁸⁶ Beyond that, the DSB ruling did not prescribe explicitly that additional evidence would be required for the USDOC to apply the correct legal standard, nor that there was anything especially probative about the evidence of Miniratna status – other than that it was pertinent to questions of the relationship between the GOI and NMDC, which was the correct legal standard to be applied.¹⁸⁷ As we have explained above¹⁸⁸, the existing record evidence provided the USDOC with a sufficient evidentiary basis for considering that the record was not deficient regarding Miniratna status. The NMDC was not endowed with a generalized "enhanced autonomy", and any autonomy exercised by the NMDC was confined in such a way that it did not rebut other evidence indicating "meaningful control" of the NMDC by the GOI.

7.75.

Finally, we address the matter of the "new factual information" contained in the GOI's rejected case brief to the extent it pertains to India's claim under Article 1.1(a)(1) of the SCM Agreement. According to the United States, the "new factual information" was rejected because it was considered untimely.¹⁸⁹ In turn, the submission of this information was considered untimely because "[t]he information contained in the GOI's case brief's exhibits and arguments were not placed on the record of the administrative reviews that cover these [Section 129] proceedings."¹⁹⁰ In response to questions from the Panel, the United States explained that:

[T]he GOI's rejected case brief was kept on the record, "solely for the purposes of establishing and documenting the basis for rejecting the document." However, the arguments and exhibits contained within the document were not eligible for consideration because the USDOC's regulations prohibit the agency from using rejected information. Therefore, the content of the rejected case brief was not information on the record.¹⁹¹

7.76.

Although the "new factual information" was technically on the record, the key point is that, according to the United States, the USDOC was legally precluded from having regard to this information in its investigation. The oft‑used formulation of a panel's standard of review under the SCM Agreement is that "a panel must examine whether, in the light of the evidence on the record, the conclusions reached by the investigating authority are reasoned and adequate".¹⁹² The "new factual information" cannot be said to be "on the record" for this purpose. This is because the conclusions of the USDOC were not reached in light of that information, since the USDOC was legally precluded from considering that information.

7.77.

India contended that the Panel could permissibly take the "new factual information" into account.¹⁹³ For India, "the evidence was already on record and within the knowledge of the United States".¹⁹⁴ India explained that the corresponding exhibits had been submitted in the original panel proceedings, and also that some of the information could be found in weblinks that had been provided in the underlying investigations, while other aspects of the information pertained to concepts, terms, or evidence that the USDOC had itself referenced in its own documents and determinations.¹⁹⁵ None of the reasons offered by India rebut the proposition that the "new factual information" was not on the record for the purpose of the USDOC's evaluation, and thus is not permissibly within the purview of this Panel's evaluation. To find otherwise would be to invite an impermissible de novo review – that is, to take into account new evidence that was not before the investigating authority for the purposes of its evaluation.¹⁹⁶

7.78.

India has not demonstrated that the USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement on either of its alternative grounds relating to the USDOC's treatment of Miniratna status and the GOI's assertion that the NMDC possessed "enhanced autonomy" as an implication of that status. This is because the existing record evidence provided a sufficient foundation for the USDOC to reject the proposition that the NMDC was endowed with a generalized "enhanced autonomy". Instead, the autonomy enjoyed by the NMDC was confined in ways that meant that this autonomy did not rebut the inference of "meaningful control" of the NMDC by the GOI. In view of that conclusion, there is no basis for finding that the USDOC was required to seek or accept additional evidence on Miniratna status and its legal implications in order to be capable of providing a reasoned and adequate explanation for its "public body" determination under Article 1.1(a)(1), nor can such a basis be found in the relevant DSB ruling. Finally, we find that the "new factual information" was not on the record of investigation for the purpose of the USDOC's evaluation, and thus is not within the purview of our evaluation in these proceedings.

7.79.

India claims that the USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement by concluding that the Chairman of the NMDC recommended export restrictions on iron ore in accordance with GOI policy, and that export restrictions influenced the market for high‑grade iron ore.¹⁹⁷ India argues that the export restrictions were a mandatory measure of general application, as opposed to a measure voluntarily undertaken by the NMDC.¹⁹⁸ India also cautions against attributing, to the NMDC itself, the Chairman's recommendation regarding export restrictions. India instead contends that "the Chairman of NMDC occupied another position in another governmental committee" when he made that recommendation.¹⁹⁹

7.80.

The United States responds that the record evidence demonstrates that the export restrictions were applied only by the NMDC because it was the sole entity that mined the particular type of iron ore that was subject to those restrictions.²⁰⁰ In any event, the United States contends that it is immaterial whether the export restrictions were limited to the NMDC. Rather, the key point was that the Chairman actively recommended such restrictions, suggesting that the "NMDC's board members were not merely observers, but active participants working daily to effectuate the GOI's policies".²⁰¹

7.81.

The relevant passage of the USDOC's explanation is worth extracting in full:

Further, the record shows that the chairman of NMDC, in line with governmental policies and as part of the Expert Group on Preferential Grants of Mining Leases, recommended that except for long term contracts, the export of iron ore not be allowed. Contrary to the GOI's assertion that prices are determined by the supply and demand of the market, NMDC described at verification that there are export restrictions in place for high‑grade iron ore with a high Fe content. … We find that the prices from the NMDC do not represent prevailing market conditions in India because the conditions of the market are being influenced by the GOI's policy considerations and actions, as described above, rather than by the activity of unfettered participants in a private market.²⁰²

7.82.

It is apparent from this passage that the USDOC used the evidence of the NMDC Chairman's recommendation on export restrictions to infer that he was acting in line with governmental policies, and that the USDOC used the application of export restrictions to rebut the GOI's assertion in its case brief that the NMDC's prices were determined commercially based on supply and demand.²⁰³ India argues that both of these inferences were unwarranted²⁰⁴, and we address each in turn.

7.83.

The NMDC Chairman clearly recommended to the Expert Group that the export of iron ore not be allowed except under long term contracts: "[g]overnment should re‑examine the whole issue of export of iron ore. He suggested that except long term contract, export of iron ore should not be allowed".²⁰⁵ This aspect of the USDOC's explanation is taken almost verbatim from the Dang Report (the Expert Group's report), and we do not understand the parties to dispute the fact that this recommendation was made. However, India seems to suggest that the Chairman was not participating in the Expert Group in his capacity as the NMDC Chair or reflecting NMDC positions.²⁰⁶ This suggestion cannot be sustained. The evidence clearly demonstrates otherwise.²⁰⁷ Further, the NMDC itself made substantially the same submission to the Expert Group, as recorded in the Dang Report: "[e]xport of lump ore should be discouraged to meet the domestic demand".²⁰⁸

7.84.

The evidence also shows that the NMDC Chairman's recommendation was, as described by the USDOC, "in line with governmental policies". The GOI applied a policy of restricting exports of high‑grade iron ore, and likewise, the NMDC Chairman was recommending restricting exports of iron ore.²⁰⁹ Further, as we have observed earlier²¹⁰, the rationale articulated by the NMDC Chairman (and the NMDC itself) for restricting iron ore aligns with the record evidence on the policy rationale of the GOI for restricting iron ore, namely to ensure that exports do not take place at the cost of supplies to domestic steel producers.²¹¹ Thus, we consider that the USDOC had a sufficient evidentiary basis for using the NMDC Chairman's recommendation on export restrictions to infer that he was acting in line with governmental policies in that regard.

7.85.

We note that India contended that the "NMDC presented arguments to the committee which were most commercially advantageous to NMDC like any other private enterprise would do".²¹² However, India does not point to any record evidence that export restrictions on the NMDC's own product would be commercially advantageous to the NMDC. Rather, the NMDC Chairman's own statement to the Expert Group was that "[t]here is a shortage in supply of iron ore which is reflected in term of its rising prices".²¹³ Export restrictions would have the intended effect of arresting that shortage, and the consequent rise in prices of iron ore.²¹⁴ The NMDC extracts and sells iron ore. We therefore reject India's contention that the NMDC Chairman's recommendation of export restrictions (and the NMDC's similar recommendations) "merely reflect the advocacy and arguments by NMDC, as any other private player would".²¹⁵ Rather, the NMDC's advocacy of export restrictions evokes the observation of another panel in the analogous context of Article 1.1(a)(iv) of the SCM Agreement: "[t]he fact that private parties act in a strange or not commercially reasonable manner can form part of the proof that someone was requiring these private parties to act in this abnormal way."²¹⁶

7.86.

We turn now to the USDOC's reliance on the application of export restrictions to rebut the GOI's assertion in its case brief that the NMDC's prices were determined commercially based on supply and demand. India raises a number of matters before us that were not addressed explicitly by the USDOC in the passage from its determination that we extracted above. In particular, the USDOC did not address explicitly the question that India now raises as to whether the relevant export restrictions were "a legal mandate applied by the GOI to all iron ore exporters" and whether "the NMDC voluntarily decided to not export iron ore".²¹⁷ Nor did the USDOC address the question that India now raises as to whether the conclusion that market conditions in India were influenced by the export restrictions is a "mere assertion" by the USDOC unsupported by any evidence on record.²¹⁸

7.87.

Although the USDOC did not discuss these matters explicitly in its determination, it is apparent that they are addressed in the evidence and exhibits cited by the USDOC in its explanation on export restrictions extracted above, as well as by other corroborating record evidence. Page 185 of the Dang Report, which was cited by the USDOC²¹⁹, records the NMDC Chairman as stating that: "NMDC is exporting iron ore only to meet its commitment under long term contract".²²⁰ India contends that this was simply a factual observation, rather than indicative of the NMDC itself imposing an export restriction.²²¹ However, the NMDC Chairman's statement must be read in context. It appears alongside a recommendation that the GOI adopt an export restriction of an identical character to that reflected in the NMDC Chairman's statement. It also appears alongside the articulation of a rationale for adopting such a restriction by both the NMDC Chairman and the NMDC itself.²²² This context suggests that the NMDC was purposive in "exporting iron ore only to meet its commitment under long term contract", and that it was not, for instance, a mere coincidence that the NMDC's exports were "only to meet its commitment under long term contract".

7.88.

The significance of this lies in the fact that, according to the exhibit cited by the USDOC, the volume of relevant NMDC exports under long term contracts was consistently lower than the GOI‑mandated export caps.²²³ Thus, not only was the NMDC advocating that the GOI adopt an export restriction on its own product that was stricter than the existing GOI‑mandated export caps, but moreover, the NMDC seems to have purposively set its exports at a level that happened to be below this cap (namely, exports only to meet commitments under long term contracts). Therefore, whilst India invites us to consider that "it is not the case that the NMDC voluntarily decided to not export iron ore"²²⁴, the record evidence suggests the contrary. To this extent, we agree with the United States that "the fact that the NMDC never reached the cap does not reveal the export restriction to have had no effect", but rather, "the fact that the NMDC stayed within this export limit would only serve to corroborate the USDOC's finding that this export restriction was closely monitored and enforced by the GOI".²²⁵

7.89.

Accordingly, India's contention that the GOI‑mandated export caps were a measure of general application is not relevant. The evidence in the exhibits referred to by the USDOC suggests that regardless of the GOI‑mandated export caps, the NMDC itself purposively exported iron ore only to meet its commitments under long term contracts, which happened to be consistently lower than those caps. Additionally, the NMDC's apparent rationale for exporting iron ore only to meet its commitments under long term contracts aligned with the GOI's policy rationale for its own export caps.²²⁶ We therefore disagree with India's argument that "export restrictions imposed by [GOI] are of no relevance to the determination of whether NMDC is a public body". Rather, we consider it relevant – as did the USDOC²²⁷ – that the GOI maintained a measure on the basis of a policy rationale which appears to have been advocated by the NMDC Chairman and which appears to have been emulated by the NMDC in limiting exports only to meet commitments under long term contracts. We also recall, in this regard, that the NMDC Chairman was appointed by a GOI body, and the NMDC itself was 98% owned by the GOI and described itself as being under the "administrative control"²²⁸ of the GOI.²²⁹ Against that evidentiary background, the USDOC had a sufficient basis for concluding that the "export restrictions in place for high‑grade iron ore" contradicted the GOI's assertion that the NMDC's prices were set "by the supply and demand of the market", and for instead inferring from these export restrictions that "the conditions of the market are being influenced by the GOI's policy considerations and actions".²³⁰

7.90.

For the same reasons, we reject India's contention that "[t]he conclusion that market conditions in India were influenced by the export restrictions is … a mere assertion by USDOC unsupported any evidence on record".²³¹ The aforementioned record evidence supports the inference that the NMDC was purposive in limiting its iron ore exports, with the underlying rationale reflected in the following statements of the NMDC Chairman and the NMDC as recorded in the Dang Report:

NMDC is exporting iron ore only to meet its commitment under long term contract. …

Government should re‑examine the whole issue of export of iron ore. He suggested that except long term contract, export of iron ore should not be allowed. …

There is a shortage in supply of iron ore which is reflected in terms of its rising prices.

Export of lump ore should be discouraged to meet the domestic demand. …

The raw material being natural reserves should be available adequately for the domestic industry and exports should not be at the cost of domestic industry.²³²

7.91.

It is apparent from these extracts that the NMDC Chairman (and the NMDC as an entity) articulated that the very purpose of limiting iron ore was to affect market conditions, particularly as they related to domestic supply. Thus, contrary to India's argument, there is record evidence to support the USDOC's assertion that market conditions were being influenced by GOI policy considerations, including through export restrictions.²³³ India appears to suggest that, to the extent that the USDOC did not itself explicitly cite certain evidence, it is "ex post facto rationalization, and thus, irrelevant for the purposes of present proceedings".²³⁴ We disagree. As we have stated earlier, an investigating authority need not cite explicitly all the evidence that supports its conclusion on a given point.²³⁵ Further, we note that it was India who raised the question in the present proceedings concerning whether and how the NMDC was involved in export restrictions that could affect market conditions, and what the record evidence did or did not demonstrate in that regard.²³⁶

7.92.

For the foregoing reasons, we conclude that India has not demonstrated that the USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement by finding that the Chairman of the NMDC recommended export restrictions on iron ore in accordance with GOI policy, and that export restrictions influenced the market for high‑grade iron ore.

7.93.

India claims that the USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement by incorrectly finding, as a matter of fact, that the NMDC's Directors appointed by the GOI hold price negotiations for the sale of iron ore.²³⁷ In particular, India argues that the USDOC engaged in the following errors in concluding that "[d]irectors (who are appointed by the GOI) hold price negotiations for the sale of iron ore": (a) the USDOC found that price negotiations are carried out by the "Board [of Directors]", whereas the record evidence indicates they were undertaken by a "Committee of Directors"; (b) at least four Directors are not appointed by the GOI and there is no record evidence cited by the USDOC as to the size or composition of the "Committee of Directors", which means it is at least plausible that price negotiations were carried out by non‑GOI‑appointed/independent Directors; and (c) in any case, the USDOC did not address the importance of the obligation on Directors to act independently in accordance with "corporate norms".²³⁸ In rebuttal, India supplemented these arguments with additional evidence and argumentation seeking to demonstrate that the NMDC Board was, in fact, independent of the GOI.²³⁹

7.94.

The United States responded that the key point of the USDOC's explanation was that the Directors, not the staff, held price negotiations, and that the GOI‑appointed Chairman had approval power over such negotiations. For the United States, these conclusions can be drawn irrespective of whether price negotiations were undertaken by a "Committee" of Directors or the "Board" of Directors. In respect of the "corporate governance norms", the United States contends that there was no record evidence to support this assertion, and in any case, that fact was outweighed by the totality of evidence showing meaningful control by the GOI.²⁴⁰

7.95.

In light of India's allegation of error, the question before us is whether the USDOC made a factual error in concluding, in India's words, that "[d]irectors (who are appointed by the GOI) hold price negotiations for the sale of iron ore".²⁴¹ The relevant passage of the USDOC's explanation that India challenges is as follows:

The directors, not NMDC staff members, hold negotiations with customers to discuss price and quantity. The chairman approves negotiation and then contracts are submitted to the Board for ratification. This demonstrates that the board members, particularly the chairman, which is appointed by the GOI, are not mere observers but active and involved in the day‑to‑day operations of the NMDC on the GOI's behalf.²⁴²

7.96.

The principal evidence relied upon by the USDOC to justify this explanation is from the GOI Verification Report, as follows:

The NMDC official also explained that the directors hold negotiations with customers where they discuss the price and quantity of the contracts. These negotiations are approved by the chairman and then are submitted to the Board for ratification. Each contract is included on a list that is ratified by the Board, as every pricing contract must be ratified by the entire Board. The NMDC official explained that at a minimum, Board meetings are held once a quarter.²⁴³

7.97.

The evidence with which India now seeks to rebut the USDOC's explanation is from the GOI's questionnaire response in the 2004 administrative review, as follows:

In accordance with Board approved policy the Chairman and the Managing Director of NMDC constitutes a Committee of Directors to carry our negotiations with various domestic customers on price fixation. …

As explained above, a Committee of Directors carries out negotiations with various customers and finalizes the prices.²⁴⁴

7.98.

Contrary to India's argument²⁴⁵, there is nothing inherently inconsistent between these aspects of evidence. Both explain a price negotiation process in which the Chairman and Directors are actively involved. Both aspects of evidence largely corroborate the USDOC's conclusion that "[t]his demonstrates that the board members, particularly the chairman, which is appointed by the GOI, are not mere observers but active and involved in the day‑to‑day operations of the NMDC on the GOI's behalf".²⁴⁶

7.99.

We note that India does not challenge the USDOC's findings regarding the fact that certain Directors were appointed by GOI bodies.²⁴⁷ Rather, India seems to suggest that, since the price negotiations were conducted by a subset of Directors (i.e. the Committee), and since the USDOC itself acknowledged that some of the Directors were not appointed by GOI bodies, it is at least possible that the price negotiations were conducted by those Directors not appointed by GOI bodies.²⁴⁸ This argument is unconvincing. Even if India is correct that the "Committee" was comprised of Directors not appointed by GOI bodies, the evidence shows that the process was led by the Chairman (who was appointed by a GOI body), and was subsequently subject to approval by the Board²⁴⁹, which the USDOC found to comprise a majority of Directors appointed by GOI bodies.²⁵⁰ Thus, in line with the USDOC's finding, the Directors appointed by GOI bodies were involved in the price negotiations regardless of the composition or role of the "Committee of Directors" that India relies upon.

7.100.

India also argued that the USDOC failed to give "sufficient credence to the 'independence' of the directors that are appointed as per corporate norms, even though this was also made clear on record in the 2004 [administrative review]"²⁵¹, citing a passage in the GOI's questionnaire response that "[t]he Board also has 8 positions of independent non‑executive Directors required to comply with the corporate governance norms of the national stock markets".²⁵² Again, however, this argument and evidence is unconvincing because it relates only to the "independent non‑executive Directors". India has not demonstrated that it relates to the Directors appointed by GOI bodies²⁵³, who the USDOC found to comprise a majority of the Board, and we recall that India does not challenge this finding.²⁵⁴

7.101.

We note that India made certain arguments regarding the Board's independence in rebuttal to arguments by the United States. We do not delay in addressing these arguments of India because they do not support India's original claim that the USDOC made a factual error in finding that "[d]irectors (who are appointed by the GOI) hold price negotiations for the sale of iron ore".²⁵⁵

7.102.

For the foregoing reasons, we conclude that India has not demonstrated that the USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement by incorrectly finding, as a matter of fact, that the NMDC's Directors appointed by the GOI hold price negotiations for the sale of iron ore.²⁵⁶

7.103.

We have evaluated each of India's allegations of error. As we have explained in the foregoing sections, India has not demonstrated to the Panel on the basis of these allegations of error that the USDOC had acted inconsistently with Article 1.1(a)(1) of the SCM Agreement. Therefore, our overall conclusion is that India has not demonstrated that the USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement.

7.104.

India requests the Panel to find that the USDOC's determination of a benchmark for ascertaining whether the NMDC's sales of high‑grade iron ore conferred a benefit is inconsistent with Article 14(d) of the SCM Agreement as a result of a number of errors regarding three potential sources of benchmarking data: the Tata price quote, an association price chart, and the NMDC's export prices.

7.105.

These alleged errors are as follows. First, India submits that the USDOC applied an incorrect legal standard in preferring "actual transaction prices" to identify a benchmark under Article 14(d).²⁵⁷ Second, India submits that the USDOC failed to explain why it considered the association price chart and the Tata price quote – which we refer to collectively as the "domestic pricing information" – to be "not actual prices".²⁵⁸ Third, India submits that the USDOC failed to carry out an objective assessment of domestic pricing information, particularly in relation to the terms of sale, the identities of the selling or buying parties, and the destination for the transactions.²⁵⁹ Fourth, India submits that the USDOC failed to provide a reasoned and adequate explanation as to why the Tex Report prices were a more appropriate benchmark than the domestic pricing information.²⁶⁰ Fifth, India submits that the USDOC erred in rejecting the Tata price quote on the basis of its designation as confidential information. Sixth, India submits that the USDOC erred in its rejection of the NMDC's export prices as an appropriate benchmark under Article 14(d). India also contends that these errors violate the chapeau of Article 14 of the SCM Agreement.

7.106.

The United States responds that the USDOC analysed the three potential sources of benchmarking data referred to by India, and determined that these three sources were not appropriate benchmarking sources.²⁶¹ This was because they were not shown to consist of market‑determined prices and did not reflect prevailing market conditions in India. For the United States, these determinations were supported by positive record evidence, and were thus consistent with both the chapeau of Article 14 and Article 14(d) of the SCM Agreement, as well as the recommendations and rulings of the DSB.²⁶² The United States also contends that one of India's claims or arguments is outside the scope of the present proceedings under Article 21.5 of the DSU.

7.107.

We begin our assessment of India's allegations of error by setting out the legal standard applicable to identifying benchmarks for "benefit" determinations under Article 14(d) of the SCM Agreement. We then evaluate each of these allegations of error regarding the USDOC's rejection of the three aforementioned sources of benchmarking data.

7.108.

Article 14(d) of the SCM Agreement deals with situations in which the financial contribution in the sense of Article 1.1(a)(1)(iii) of the SCM Agreement is in the provision of goods or services or the purchase of goods by a government. It sets out a framework²⁶³ for investigating authorities in determining whether the provision of goods or services in question confers a benefit on the recipient. Specifically, the provision of a good by a government:

[S]hall not be considered as conferring a benefit unless the provision is made for less than adequate remuneration[.] … The adequacy of remuneration shall be determined in relation to prevailing market conditions for the good or service in question in the country of provision or purchase (including price, quality, availability, marketability, transportation and other conditions of purchase or sale).

7.109.

The Appellate Body has established that determining the benefit conferred by a subsidy involving the provision of a good for LTAR requires a comparison between the terms on which the good in question is provided to the producers/exporters under investigation and the terms "that would have been available to [those producers/exporters] on the market".²⁶⁴ Article 14(d) establishes that the standard for determining whether goods were provided to producers/exporters for LTAR is whether they were provided on terms more advantageous than those available in the market. The focus of the analysis is on the "adequacy of the remuneration" received by the government: if it is inadequate, i.e. lower than the market remuneration for the goods in question, a benefit is deemed to have been conferred on the recipient of the goods.²⁶⁵

7.110.

An analysis of whether remuneration is "less than adequate" and thus confers a benefit in the sense of Article 1.1(b) involves a comparator or benchmark, i.e. the "adequate" remuneration, with which the price paid by the producer/exporter for the goods in question can be compared. Since terms on the market in the country of provision are the relevant standard for the comparison, Article 14(d) requires investigating authorities to determine and use a benchmark which relates to the prevailing market conditions in the country of provision.²⁶⁶ The last sentence of Article 14(d) sets out an illustrative list of prevailing market conditions which may be relevant in undertaking the necessary comparison between the terms on which the good was provided by the government and the benchmark used by the authority, "including price, quality, availability, marketability, transportation and other conditions of purchase or sale" for the goods in question.

7.111.

We agree with the Appellate Body's view that "prevailing market conditions" in Article 14(d) "consist of generally accepted characteristics of an area of economic activity in which the forces of supply and demand interact to determine market prices".²⁶⁷ It follows that any benchmark for comparison purposes in determining the adequacy of remuneration must consist of market‑determined prices for the same or similar goods in the country of provision.²⁶⁸ Accordingly, prices established in accordance with the prevailing market conditions for the same or similar goods in the country of provision are presumed to be an adequate benchmark. They are the "starting‑point"²⁶⁹ of any analysis carried out in this context.²⁷⁰ This implies that, before resorting to an alternative benchmark, an investigating authority must determine whether market prices in the country of provision can be used as a benchmark to establish whether the recipient has benefitted from the financial contribution in question.²⁷¹ If not, an investigating authority must adequately explain its decision before proceeding to determine an alternative benchmark.²⁷² In the original proceedings, the Appellate Body clarified that the ability to have recourse to out‑of‑country prices:

[D]oes not suggest that an investigating authority may have easy recourse to out‑of‑country prices. … [T]he obligation under Article 14 to calculate the amount of subsidy in terms of the benefit to the recipient encompasses a requirement to conduct a sufficiently diligent investigation into, and solicitation of, relevant facts, and to base a determination on positive evidence on the record. To our minds, it is only once an investigating authority has properly complied with its obligation to investigate whether there are in‑country prices that reflect prevailing market conditions in the country of provision that it may, consistently with Article 14(d) of the SCM Agreement, use alternative benchmarks.²⁷³

7.112.

There is no defined, exhaustive set of circumstances in which an authority may resort to an out‑of‑country benchmark.²⁷⁴ One circumstance identified in US – Softwood Lumber IV is where it is established that in‑country prices are unreliable or unavailable due to government predominance in the market as a provider of goods.²⁷⁵ Further, in the original proceedings, the Appellate Body stated:

[W]e do not consider that in‑country prices may not be used to determine a benchmark only where such prices are distorted as a result of governmental intervention in the market. Indeed, there may be other circumstances where an investigating authority would not be required to use in‑country prices to determine a benchmark for the purposes of Article 14(d), for example, where information pertaining to in‑country prices cannot be verified so as to determine whether they are market determined in accordance with the second sentence of Article 14(d). As we see it, to find that an investigating authority is precluded from using alternative benchmarks in these situations would be contrary to a proper interpretation of Article 14(d).²⁷⁶

7.113.

With the foregoing understanding in mind, we now turn to the parties' arguments in relation to the proper legal standard for the identification of an appropriate benchmark under Article 14(d) of the SCM Agreement.

7.114.

India claims that the USDOC acted inconsistently with Article 14(d) of the SCM Agreement by rejecting the domestic pricing information solely because it did not reflect "actual" transactions.²⁷⁷ India argues that the Appellate Body concluded in the original proceedings that Article 14(d) does not require the use of actual transaction prices.²⁷⁸ For India, based on the Appellate Body's ruling, the USDOC's reinvestigation "was expected" to consider any market‑determined prices, including e.g. non‑actual prices.²⁷⁹

7.115.

The United States disagrees that the lack of actual transaction prices was the "sole reason" for the USDOC's determination, pointing instead to other reasons that impugned the reliability of the domestic pricing information.²⁸⁰ Further, the United States disagrees that Article 14(d) requires the use of domestic data not based on actual sales. Rather, contrary to India's arguments on the Appellate Body's reasoning on that point, the United States contends that the Appellate Body has recognized that actual transaction prices should be used over provisional/notional prices as the primary benchmark.²⁸¹

7.116.

It is apparent that the parties disagree as to the legal standard actually applied by the USDOC. For India, the USDOC applied a legal standard in which the "sole reason" for rejecting the domestic pricing information was because it was not "actual".²⁸² For the United States, the USDOC applied a legal standard in which the domestic pricing information was rejected on the basis that it was not reliable since it did not contain actual market determined transactions.²⁸³ According to the United States, this assessment included – but was not limited to – the "non‑actual"²⁸⁴ character of the domestic pricing information.²⁸⁵

7.117.

We therefore begin by ascertaining the legal standard that the USDOC applied, as revealed through its determinations, before examining whether that standard comports with our understanding of Article 14(d) as set out above.²⁸⁶

7.118.

As the USDOC explained, its "preferred benchmark … is an observed market price from actual transactions within the country under investigation … because such prices generally would be expected to reflect most closely the prevailing market conditions of the purchaser under investigation."²⁸⁷ On that basis, the USDOC set out to "first determine whether there are market prices from actual sales transactions that can be used to determine whether [the] NMDC sold high grade iron ore for [LTAR]".²⁸⁸ In respect of the association price chart, the USDOC found that the 2006 prices – that is, the prices corresponding with the period of investigation (POI) – were "provisional, i.e., not final, and thus not actual transaction prices".²⁸⁹ The USDOC also considered that "the GOI is unable to point to any evidence to contradict the Department's determination that these provisional or estimated prices are not reliable for benchmarking purposes".²⁹⁰ The USDOC noted in particular that "[i]t is not clear the selling or the buying party [sic] and whether the destination is domestic or export".²⁹¹ The USDOC made similar observations with respect to the Tata price quote, namely that "there is insufficient information on the record to determine what the price represents", noting in particular that "[i]t is unclear as to whether it is a price quote or an actual transaction price", and further, that "[t]he record also does not identify the purchaser" and "[t]here is no information on the record identifying what or who the entity is". The USDOC had applied similar considerations in its Preliminary Determination:

With respect to the association chart, the data provided therein, with three exceptions, does not identify the entities selling the iron ore. In addition, there was no record evidence to show that the prices are for completed sales transactions as opposed to a notional price list or prices estimates. The association chart is simply a page of data with no explanation of the information contained in the document. Therefore the Department is unable to rely on the chart for benchmarking purposes due to the fact that the record does not contain enough information on how the list prices were determined, what parties were involved in determining the prices and if the prices are actual iron ore transactions during the POR.

…

With regard to the March 4, 2006 Tata price quote there is insufficient information on the record to determine what the price represents. It is unclear whether it is a price quote or an actual transaction price. The record also does not identify the purchaser. There is no information on the record identifying what or who the entity is.²⁹²

7.119.

Based on the foregoing, we find that the legal standard applied by the USDOC in rejecting the domestic pricing information was whether the data was reliable as evincing market‑determined prices. The USDOC indicated a preference for completed sales transactions in that regard, because these will more reliably evince market‑determined prices.²⁹³ The USDOC also looked for other information that might indicate that the data reliably evinced market‑determined prices despite exhibiting a "notional", "estimated" or "provisional" character, namely the destination of the transaction (domestic or for export), the identities of the transacting parties, and the terms of sale.

7.120.

We turn now to whether the USDOC's legal standard comports with what is required by the legal standard under Article 14(d) of the SCM Agreement. We consider it permissible under Article 14(d) for the USDOC to have treated what it considered to be "notional", "provisional" and "estimated" prices with caution. This is because, if a putative price is unfinalized and subject to continuing negotiation in a market, the interaction between market forces has not yet fully taken place for such transactions.²⁹⁴ Likewise, if the "price" is merely an estimate²⁹⁵ of what actual prices may be, as opposed to being the direct result of a completed sales transaction, it will be unlikely to constitute direct evidence of the interaction between market forces. Pricing data based on "notional", "provisional" and "estimated" prices, therefore, may not be indicative of "prevailing" market conditions under Article 14(d). By their nature, they are not direct evidence of actual instances where market conditions have prevailed to produce a price through a completed, arms‑length sales transaction. In saying this, we do not suggest that "non‑actual" prices should be precluded from being used under Article 14(d) as indicative of "prevailing market conditions". They may represent the only available record evidence²⁹⁶, or there may be other evidence indicating that they reflect the full interaction between market forces despite not being "actual" or finalized prices.²⁹⁷

7.121.

In a context where price quotes or estimates may not be indicative of "market‑determined" prices because they are not the direct result of an interaction between market forces or because they are unfinalized and may change through a process of negotiation between a buyer and seller, we consider it permissible under Article 14(d) for the USDOC to have required additional information in order to be satisfied that such pricing data is nonetheless reliable and market‑determined. Such information could indicate that these "non‑actual" prices are indeed close approximations of "market‑determined" prices, or could have enabled the USDOC to verify with the transacting parties what the pricing data actually represents.²⁹⁸ Where these kinds of additional details are lacking, we consider it permissible under Article 14(d) for the USDOC to have rejected such pricing information as not reliable in evincing market‑determined prices.

7.122.

India suggests that the Appellate Body's findings in the original proceedings support its argument that the USDOC applied an incorrect legal standard.²⁹⁹ We disagree. The key point for the Appellate Body in the original proceedings was whether the benchmark chosen "is a market‑determined price reflective of prevailing market conditions in the country of provision".³⁰⁰ In our view, when confronted with pricing information that it considered to have a "notional", "estimated" or "provisional" character, the USDOC acted reasonably in probing whether such information was "market‑determined". Further, the Appellate Body recognized in the original proceedings that in‑country prices need not be used "where information pertaining to in‑country prices cannot be verified so as to determine whether they are market determined in accordance with the second sentence of Article 14(d)".³⁰¹ As illustrated earlier³⁰², the USDOC sought to verify whether the information it considered to be "notional", "estimated" or "provisional" was "market‑determined" through other information, and found this to be lacking. In our view, therefore, the USDOC acted in a manner that is consistent with the Appellate Body's findings in the original proceedings.

7.123.

In summary, India has not demonstrated how the USDOC erred in the legal standard it applied when evaluating the domestic pricing information. As the United States contends, the focus of the USDOC was on whether the domestic pricing information reliably evinced market‑determined prices.³⁰³ The USDOC's conclusion was that the information pertained to "notional", "estimated" or "provisional" prices as opposed to "completed sales transactions" and that this impugned the reliability of the information, together with an absence of other information that could have verified whether these prices were market‑determined despite their "notional", "estimated" or "provisional" character.³⁰⁴

7.124.

We therefore find that India has not demonstrated that the USDOC applied an incorrect legal standard, and thus acted inconsistently as a matter of law, with Article 14(d) of the SCM Agreement.

7.125.

India claims that the USDOC acted inconsistently with Article 14(d) of the SCM Agreement by failing to undertake an objective examination of, and explain sufficiently, the basis for rejecting the prices in the association price chart as not representing actual transactions.³⁰⁵ India argues that the association price chart "specifically states that these are prices of iron ore and not notional prices or price estimates", and that the prices for "financial years 2004‑05 and 2005‑06 are undisputedly actual prices".³⁰⁶ India also submits that other details, including the identities of some of the transacting parties and the nature of the product transacted, substantiate these as actual transaction prices.

7.126.

The United States responds that the chart clearly designates the 2006 prices as "provisional", which corresponds to the period of investigation for the review in question (1 January‑31 December 2006).³⁰⁷ The United States also explains that the absence of other information on, e.g. terms of sale, contributed to the USDOC's consideration that the domestic pricing information did not reliably evince market‑determined prices.³⁰⁸

7.127.

In view of India's claim, the question before us is whether it was reasonable for the USDOC to conclude, in relation to the association price chart, that:

[T]here was no record evidence to show that the prices are for completed sales transactions as opposed to a notional price list or prices estimates.³⁰⁹

[T]he GOI is unable to point to any evidence to contradict the Department's determination that these provisional or estimated prices are not reliable for benchmarking purposes.³¹⁰

7.128.

It is useful at this stage to distinguish between the 2005‑2006 prices and 2006‑2007 prices in the association price chart. This is because the 2006‑2007 prices are designated clearly as "P" for "provisional", whereas the 2005‑2006 prices are not designated in that way. In response to a question from the Panel, India stated that it "accepts that the designation 'p' for 'provisional' is in respect of 2006‑07 prices and does not reflect actual, or completed, sales transactions".³¹¹ Accordingly, we do not consider that the USDOC erred to the extent that it concluded that the 2006‑2007 prices were "provisional" or "estimated" prices.

7.129.

Turning to the 2005‑2006 prices, during the substantive meeting with the parties, in response to a question of the Panel³¹², India stated that these prices:

[A]re actual transaction prices, but certainly, we would say that they cannot be disaggregated because the single price chart only shows, for the entire year, what must be an average price from various mines with various terms of sale what are the various prices that have been indicated …

… it must be [an] average of actual prices because it is not one particular customer to whom from one mine it is sold. It is an aggregation of the various prices sold from a particular mine to various customers, but it is an average actual price.

7.130.

India subsequently confirmed that the prices in the association price chart, including the 2005‑2006 prices, are not individual transaction prices but are averages for the relevant period described.³¹³

7.131.

Based on this understanding of what the 2005‑2006 prices represent, we see nothing erroneous in the USDOC's finding that they were "a notional price list or price[] estimates".³¹⁴ The figures listed in the chart were not real prices. They did not themselves represent the direct outcome of the interaction between market forces that resulted in a completed sales transaction. Rather, they were averages that sought to reflect what the price would be (or, indeed, was) across the listed time period. These figures were thus "notional"³¹⁵ prices, insofar as they were averages that aggregated the various prices paid by various customers on the basis of various terms of sale over a certain time period, according to India's own explanation, as opposed to themselves being the price that was actually paid in a completed sales transaction.

7.132.

Further, the underlying data may have been derived from actual transactions, but the figures listed in the chart were an average of various prices that, according to India, could not be disaggregated.³¹⁶ This is significant for several reasons.

7.133.

First, the time period that the notional 2005‑2006 pricing data represented only overlapped with the first quarter of the POI. Therefore, it was not possible to isolate from the association price chart the portion of data reflected in the notional 2005‑2006 pricing data that matched the POI. This diminishes the utility of the notional 2005‑2006 pricing data substantially, because the association price chart shows large variations between these averaged notional data as between 2004‑2005, 2005‑2006, and 2006‑2007.³¹⁷ Against a background of price volatility, the inability to disaggregate the notional 2005‑2006 pricing data made it impossible to verify whether that data reflected prevailing market conditions during the POI. In this regard, we find it reasonable for the USDOC to have concluded that it was "unable to rely on the chart for benchmarking purposes due to the fact that the record does not contain enough information on how the list prices were determined, what parties were involved in determining the prices and if the prices are actual iron ore transactions during the POR."³¹⁸

7.134.

Second, the inability to disaggregate the notional 2005‑2006 pricing data made it impossible to verify whether the transactions on which the data were based were market‑determined. For instance, it would not have been possible to test whether the sales were at arm's‑length, or whether they involved related‑party transactions or government procurement.³¹⁹ The USDOC referred to this problem when it explained that "the record does not contain enough information on how the list prices were determined, [and] what parties were involved in determining the prices".³²⁰

7.135.

Based on India's explanation that figures in the association price chart were averages as earlier described, and that these averages could not be disaggregated to be tailored to the POI or to be tested against whether the transactions on which they were based were market‑determined, we consider it reasonable for the USDOC to have concluded that "these provisional or estimated prices are not reliable for benchmarking purposes".³²¹ We reject, as factually inaccurate, India's contention that the association price chart "specifically states that these are prices of iron ore and not notional prices or price estimates".³²²

7.136.

We finally note that India suggests that the USDOC erred because, during the reinvestigation, it did "not indicate[] what type of additional information would have proved that the price contained in the chart is actual transaction price".³²³ However, as India's own explanation above demonstrates, the figures in the association price chart did not themselves represent actual transaction prices. Rather, the figures were averages, and it was not possible to disaggregate these averages to identify actual transaction prices. Thus, we cannot find fault with the USDOC for failing to indicate to the interested parties what additional information would have demonstrated that the association price chart contained actual prices, when it is apparent that the USDOC had already arrived at the correct conclusion that the figures in the association price chart comprised "a notional price list or prices estimates", and when it is also apparent that these figures cannot be disaggregated to derive their underlying actual transaction data. We also note that India clarified in response to a question from the Panel that it did not pursue a claim in relation to the association price chart on the basis of "insufficiency of evidence as a reason to reject various arguments raised by India and for its refusal to comply with the recommendations and rulings of the DSB".³²⁴

7.137.

For the foregoing reasons, we find that India has not demonstrated that the USDOC acted inconsistently with Article 14(d) of the SCM Agreement by failing to undertake an objective examination of, and explain sufficiently, the basis for rejecting the prices in the association price chart as not representing actual transactions.³²⁵

7.138.

India claims that the USDOC acted inconsistently with Article 14(d) of the SCM Agreement because its treatment of the terms of sale, the identities of the transacting parties, and the destination for the transaction, was not based on an objective examination.³²⁶ India challenges both the relevance and accuracy of the USDOC's assessment of these variously‑lacking elements in the domestic pricing information.³²⁷

7.139.

The United States acknowledges that the USDOC's determination "inadvertently stated that the association chart did not include whether the destination was domestic and export, and had intended to include this observation with respect to the price quote".³²⁸ The United States also acknowledges that the finding that the Tata price quote failed to identify the purchaser was "inadvertently placed", and was instead intended to refer to the association chart.³²⁹ However, the United States points to the "totality of circumstantial evidence" in respect of these factors.³³⁰

7.140.

As we have explained above³³¹, price quotes, estimates and "notional" prices may not be indicative of "market‑determined" prices because they may not represent the direct result of an interaction between market forces or because they are unfinalized and may change through a process of negotiation between a buyer and seller. We therefore considered it permissible under Article 14(d) for the USDOC to have required additional information in order to be satisfied that such prices are nonetheless reliable and market‑determined. This included information on the destination of the transaction (domestic or for export), the identities of the transacting parties, and the terms of sale. We disagree with India to the extent it contends that these details are irrelevant.³³² On the contrary, identifying whether a transaction is domestic or for export is essential to understanding whether the transaction reflects an in‑country price. Likewise, identifying the transacting parties can be important to ensuring that the price is reliably market‑determined in a context where it is known that "public bodies" are participating in a market and also where it is known that the same entity could be both buying and selling iron ore.³³³ It is also self‑evident that an understanding of the terms of sale of a transaction can shed light on whether those terms are market‑determined. The text of Article 14(d) of the SCM Agreement makes clear that the "adequacy of remuneration shall be determined in relation to prevailing market conditions for the good or service in question in the country of provision or purchase (including price, quality, availability, marketability, transportation and other conditions of purchase or sale)".³³⁴

7.141.

We accept India's argument that there were a number of deficiencies in the USDOC's assessment of these factors. The United States acknowledges this. In respect of the association price chart, however, we have already concluded that its pricing data could not be disaggregated to reveal whether it was based on transactions that were market‑determined, nor to match the POI.³³⁵ Our conclusion in that regard was based on India's own explanation of what the figures in the association price chart represent. Therefore, we cannot impugn the USDOC for deficiencies that were ultimately immaterial to ascertaining whether the association price chart reliably evinced market‑determined prices.

7.142.

Turning to the Tata price quote, we likewise accept India's argument that there were a number of deficiencies in the USDOC's assessment of these factors, but again they were immaterial. The evidence shows unambiguously that the prices reflected in this evidence were not yet finalized and potentially subject to continuing negotiation: "Sub[ject]: Revision in price … We would like to inform you that to align with the market price, we have revised the rate of sized iron ore … All other terms and conditions will remain unchanged … Please acknowledge and confirm acceptance of the same".³³⁶ The plain text of this evidence shows that the price was only an offer by the seller, which had not yet been accepted by the putative buyer. The deficiencies identified by India in the USDOC's assessment do not alter the clear implication that this price could not yet be said to be "market determined", that is, it did not yet reflect the interaction between forces of supply and demand to yield a final transaction price. It was therefore permissible for the USDOC to reject this evidence as not indicative of "prevailing market conditions" under Article 14(d) of the SCM Agreement.

7.143.

For the foregoing reasons, India has not demonstrated that the USDOC acted inconsistently with Article 14(d) of the SCM Agreement on the basis that its treatment of the terms of sale, the identities of the transacting parties, and the destination for the transaction, was not based on an objective examination.³³⁷

7.144.

India advances two alternative arguments that the USDOC erred by rejecting the Tata price quote. First, India contends that there was no basis for declining to use this data despite its proprietary designation.³³⁸ Alternatively, India submits that the USDOC was not bound under the SCM Agreement to accept Tata's claim of confidentiality, and should rather have examined whether Tata's request was warranted and sought further information in this regard.³³⁹

7.145.

We have already found that the USDOC had sufficient alternative grounds to reject the Tata price quote as a benchmarking source.³⁴⁰ We therefore do not consider it necessary to the effective resolution of this dispute to address India's above‑mentioned arguments, nor the United States' arguments in rebuttal and objection under Article 6.2 of the DSU.

7.146.

India argues that the Tex Report does not reflect "actual" prices³⁴¹, and that additional explanation by the USDOC was required to account for prima facie similarities between the Tex Report – whose pricing data the USDOC accepted – and the association price chart, which was rejected.³⁴²

7.147.

The similarities between these pieces of evidence are clear³⁴³: one document is entitled "Prices of Iron Ore", the other "Iron Ore Prices"; one document designated certain prices as "Provisional", the other is headed "Price Negotiations"; both documents appear to lack comprehensive details on terms of sale³⁴⁴ and the identity of purchasers.

7.148.

The USDOC did not discuss these prima facie similarities in its explanation, possibly because these aspects of the Tex Report were not called into question during the reinvestigation.³⁴⁵ Rather, in its Final Determination, the USDOC concluded that "in the absence of suitable Tier I prices, we correctly derived a benchmark in the Other Issues Preliminary Determination using Tier II prices from Australia, as listed in the Tex Report".³⁴⁶ The USDOC cited the 2004, 2006, and 2007 final results in support of that conclusion. These determinations indicate that GOI officials gave evidence that the Tex Report listed Indian prices from "concluded negotiations"³⁴⁷, and that the reported Australian prices flowed from "concluded talks".³⁴⁸ Although the USDOC indicated that the Tex Report "reports on world‑wide price negotiations for high‑grade iron ore"³⁴⁹, it understood the reported prices to be "negotiated iron ore prices"³⁵⁰, as opposed to prices subject to continuing negotiation.³⁵¹

7.149.

Thus, the USDOC clearly took the view that the Tex Report prices pertain to actual, completed sales transactions. Not only was this understanding not called into question in the underlying investigation (nor in the reinvestigation), but the GOI and other producers appeared to treat the Tex Report evidence in the underlying investigation as a reliable indicator of market‑determined prices.³⁵² For instance, the record evidence demonstrates that, in response to a request from the USDOC for "a copy of any price lists the GOI or the NMDC uses to base its negotiations on prices", the GOI responded that "[t]he price of NMDC iron ore during 2005‑06 onwards are decided based on the FOB prices of NMDC iron ore as appearing in the Tex Report".³⁵³

7.150.

India now argues that the "GOI submitted Tex Report prices in the questionnaire because the USDOC requested Tex Report price information" and "the fact that the GOI responded to the specific question of the USDOC to provide Tex Report price neither prejudices GOI's stand that such price information was 'not actual transaction prices' nor enhances its reliability as 'market determined price'".³⁵⁴ However, the USDOC also requested that "[i]f you … have questions concerning the Tex Report, please contact the officials in charge"³⁵⁵, to which the GOI responded without questions³⁵⁶, but by indicating that "[t]he NMDC iron ore lump and fines prices published in the Tex Report are f.o.b. prices in US $ per DLT (Dry long ton)".³⁵⁷ Other record evidence demonstrated that the Tex Report data was relied upon by the GOI, NMDC, and exporters as "function[ing] as a guideline for international iron ore prices".³⁵⁸ Accordingly, unlike the "non‑actual" character of the Tata price quote and the association price chart, additional details to ascertain the nature or veracity of the Tex Report data do not appear to have been warranted.

7.151.

Finally, we note that India's argument regarding the Tex Report is premised on an incorrect understanding of the USDOC's reason for rejecting the domestic pricing information. India's argument is premised on its understanding that the "sole reason" for rejecting the domestic pricing information was because it was not "actual".³⁵⁹ However, we found earlier that the correct understanding is that the USDOC rejected the domestic pricing information on the basis of whether the data was reliable as evincing market‑determined prices.³⁶⁰ Thus, India is misplaced in contending that whether the Tex Report prices were "actual" or "non‑actual" is determinative.³⁶¹ Rather, the key question is whether the USDOC had a reasonable basis for inferring that the Tex Report data reliably evinced market‑determined prices. In view of the material set out above³⁶², including how the GOI and interested parties appeared to treat the Tex Report in the underlying investigations, we consider that the USDOC did have a reasonable basis for drawing such an inference. By contrast, as we found earlier³⁶³, the USDOC had a reasonable basis for concluding in respect of the association price chart that "these provisional or estimated prices are not reliable for benchmarking purposes".³⁶⁴ Accordingly, India has not demonstrated that the USDOC failed to make an objective assessment by failing to explain why the Tex Report is more appropriate than the domestic pricing information despite being affected by the same issues that affected the domestic pricing information.³⁶⁵

7.152.

In view of this conclusion, we do not consider it necessary to address the United States' objection under Article 21.5 of the DSU to India's submissions on the Tex Report, nor India's response in that regard (including India's argument that this allegation of error does not comprise a separate claim).³⁶⁶

7.153.

India argues that, based on the Appellate Body's ruling in the original proceedings, the USDOC was permitted only to reject the NMDC's export price on the basis of positive evidence rather than an inference that using the NMDC's export price would result in using the financial contribution itself as the benchmark.³⁶⁷ Further, India argues that the USDOC failed to properly explain why it relied on the NMDC's export price in the 2004 administrative review, but rejected it in the 2006 administrative review.³⁶⁸

7.154.

The United States disagrees with India's understanding of the Appellate Body's findings, and argues that the USDOC was permitted to exclude NMDC export prices on the basis that these prices emanated from the same government‑related entity at issue.³⁶⁹ The United States also argues that the USDOC provided additional analysis demonstrating that the NMDC export price was distorted by GOI involvement, namely the GOI's export restraints.³⁷⁰ Finally, the United States submits that the USDOC adequately explained that its change in approach between the 2004 and 2006 reviews regarding the NMDC export price was a refinement in approach rather than a change in methodology.³⁷¹

7.155.

We begin by setting out our understanding of the USDOC's explanation for rejecting the NMDC's export prices as a benchmarking source. We then set out our understanding of the circumstances under which it is legally permissible to reject a putative public body's export prices as a benchmark under Article 14(d) of the SCM Agreement. We follow this with our evaluation of the USDOC's explanation in light of our understanding of Article 14(d).

7.156.

In the Preliminary Determination, the USDOC determined that the NMDC constituted a "public body", and therefore that "using the NMDC prices at issue (e.g. the iron ore prices the NMDC charged to Japanese buyers during the POR) would be unreliable and would result in an inadequate comparison."³⁷² The USDOC recognized that the Appellate Body found in the original proceedings that investigating authorities cannot presumptively exclude the prices of government‑related entities from the consideration of appropriate benchmarks under Article 14(d) of the SCM Agreement.³⁷³ However, the USDOC understood the Appellate Body's finding in this regard to be limited to government‑related entities that were not providing the financial contribution at issue, and thus excluded the very "public body" under investigation.³⁷⁴

7.157.

In its Final Determination, in response to the GOI's case brief, the USDOC engaged in further discussion of the Appellate Body's findings in the original proceedings. It reaffirmed its conclusion that the Appellate Body's reasoning supported excluding the prices of the NMDC as the putative "public body" at issue.³⁷⁵ The USDOC also elaborated upon how its finding that the NMDC constituted a "public body" justified its determination to exclude its export prices, explaining that "[t]he manner in which the NMDC is owned and controlled further supports the Department's decision not use its export prices as the basis for the Tier II benchmark".³⁷⁶ For instance, the USDOC noted how the GOI sought to exercise "meaningful control" over the NMDC through export restrictions.³⁷⁷ The USDOC also noted that the NMDC's Board of Directors – a majority of whom it had found to be appointed by GOI bodies – "were directly involved in the price negotiations with potential foreign buyers", and that "GOI appointed directors at the NMDC … set export prices".³⁷⁸ The USDOC also referred to its "public body" determination in finding that "the NMDC's export prices are set with GOI policy considerations".³⁷⁹ In summary, the USDOC determined not to use the NMDC's export prices as a potential benchmarking source because the NMDC constituted a "public body", and therefore that "using the NMDC prices at issue (e.g. the iron ore prices the NMDC charged to Japanese buyers during the POR) would be unreliable and would result in an inadequate comparison"³⁸⁰, as evidenced by the grounds on which the USDOC reached its "public body" determination.

7.158.

We turn now to the circumstances in which it is permissible for an investigating authority to reject the export prices of the putative "public body" as a benchmarking source under Article 14(d). India and the United States point to differing aspects of the Appellate Body's Report in the original proceedings to argue that the Appellate Body's findings support³⁸¹ – or, alternatively, do not support³⁸² – the use of the NMDC's export prices in identifying a benchmark under Article 14(d). In our view, the Appellate Body did not address this question directly in the original proceedings.³⁸³ We therefore address this question afresh.

7.159.

We note that, by the time an investigating authority is called upon to examine a public body's export prices as a potential benchmarking source, it has already moved to out‑of‑country benchmarks. This is because, if reliable and market‑determined data from in‑country transactions were available, there would be no need to rely on a public body's export prices. If there is positive record evidence in a given case that the putative "public body's" export prices are reliable and market‑determined despite emanating from the "public body" at issue³⁸⁴, it would not be unreasonable for an investigating authority to consider those prices amongst the other available sources of out‑of‑country benchmarks. However, if the assessment of whether an entity is a "public body" has revealed evidence that its participation in export markets is being influenced by governmental policy considerations as opposed to commercial considerations, it would be reasonable for an investigating authority to disregard that entity's prices in favour of other out‑of‑country benchmarks.

7.160.

More generally, in the absence of any positive evidence that the putative public body's export prices are reliable and market‑determined, we consider it reasonable for an investigating authority to infer that the relationship between price and domestic cost pressures may no longer be reliable for that entity. This is because, when the "financial contribution" at issue involves the provision of goods by a "public body", the putative "public body" might be selling goods domestically at below market rates, which could suggest that its domestic pricing strategy is not being determined exclusively by market forces. In such circumstances, contrary to preferring the export prices of that "public body", it would seem reasonable to consider that – absent record evidence to the contrary – other out‑of‑country evidence would be preferable. This is because the reliability of such other evidence would be untainted by non‑commercial pricing strategies of "public bodies" selling domestically at below market rates.

7.161.

We now evaluate the USDOC's explanation in light of this understanding of the circumstances in which Article 14(d) permits investigating authorities to reject the export prices of a putative "public body". As part of our assessment of India's claims under Article 1.1(a)(1) of the SCM Agreement, we found that the USDOC had a sufficient evidentiary basis for concluding that the "export restrictions in place for high‑grade iron ore" contradicted the GOI's assertion that the NMDC's prices were set "by the supply and demand of the market", and for instead inferring from these export restrictions that "the conditions of the market are being influenced by the GOI's policy considerations and actions".³⁸⁵ With that in mind, it was clearly reasonable for the USDOC to conclude in light of its "public body" determination that "using the NMDC prices at issue (e.g. the iron ore prices the NMDC charged to Japanese buyers during the POR) would be unreliable and would result in an inadequate comparison".³⁸⁶ Indeed, as we have already explained³⁸⁷, the USDOC recounted much of the evidence from its "public body" finding in its Final Determination rejecting the NMDC's export prices as a benchmarking source.³⁸⁸

7.162.

India contends that the USDOC erroneously concluded that the NMDC's export price to Japan was the "financial contribution" at issue, and thus its reliance on the Appellate Body's reasoning was misplaced.³⁸⁹ We disagree. As stated above³⁹⁰, we do not consider that the Appellate Body has expressed a view on the specific situation of the export prices of an entity found to be a "public body". Moreover, the USDOC's focus was on the reliability of the entity engaging in the transaction, not the transaction itself. For instance, the USDOC quoted the Appellate Body's statement that "prices on record of government‑related entities other than the entity providing the financial contribution at issue also need to be considered to assess whether they are market determined and can therefore form part of a proper benchmark".³⁹¹ The focus in the USDOC's extract of the Appellate Body's reasoning is clearly on the reliability of the entity.³⁹² We thus do not agree with India that the USDOC erroneously relied on the Appellate Body's reasoning by treating the NMDC's sales to Japan as the "financial contribution" at issue.

7.163.

India also contends that "[t]he USDOC has ignored the explicit observation of the Appellate Body that unreliability of a price as a benchmark must be proven on the basis of evidence by the investigating authority".³⁹³ Again, we disagree. As we have explained above³⁹⁴, the USDOC recounted evidence from its "public body" determination which indicated that the NMDC's participation in export markets was influenced by GOI policy considerations. For the same reason, we disagree with India's contention that "USDOC has ignored the observation of the Appellate Body that whether a price may be relied upon for benchmarking purposes under Article 14(d) is not a function of its source but, rather, whether it is a market‑determined price reflective of prevailing market conditions".³⁹⁵ As part of its "public body" determination, and as we have reviewed above, the USDOC examined the NMDC's participation in export markets and found it to be influenced by GOI policy considerations as opposed to unfettered participations in a market.³⁹⁶ We likewise reject India's contention that "there is no evidence presented by the USDOC that directly leads to the conclusion that NMDC export prices were 'set with the GOI policy considerations'."³⁹⁷ We have already examined such evidence in detail. As our examination showed, India is incorrect to suggest that "[t]he USDOC has not demonstrated based on evidence as to how such export restriction influenced the price of exports of iron ore so as to make it unviable as a benchmark".³⁹⁸ Our examination also showed that India is incorrect to suggest that the USDOC did not have a sufficient basis for inferring that the GOI was not involved in the NMDC's export price³⁹⁹, and that the NMDC's export price was determined by commercial considerations.⁴⁰⁰

7.164.

Finally, we address India's argument that the USDOC has not explained adequately why the USDOC accepted the NMDC's export price in the 2004 review, but rejected it in subsequent reviews.⁴⁰¹ We note that the Appellate Body drew particular attention to this factor in its finding of error in the original proceedings: "[w]e do not see that the USDOC provided in its determination a reasoned and adequate explanation as to why the benchmark data that it relied on, namely, world market prices from Australia and Brazil, is more appropriatethan the benchmark data that it had previously relied on but subsequently excluded, namely, the NMDC's export prices at issue".⁴⁰² In the reinvestigation, the USDOC explained that the failure to exclude the NMDC's export prices in the 2004 administrative review was because "no party had squarely addressed the issue of whether it was appropriate for the Department to include export prices charged by the NMDC in the calculation of the Tier II benchmark", but that "further consideration" of the matter in subsequent reviews had revealed that "the NMDC export prices contained in the Tex Report constituted prices from the very provider of the financial contribution at issue".⁴⁰³ We consider it reasonable for the USDOC to have corrected an error from an earlier investigation by excluding the NMDC's export price, particularly in light of the evidence regarding the influence of the GOI on the NMDC's participation in export markets. In our view, this change in approach did not reflect a radical departure from the USDOC's previous practice or methodology, and did not necessitate any additional justification by the USDOC beyond the explanation that it provided.⁴⁰⁴

7.165.

In light of the above, we conclude that India has not demonstrated that the USDOC acted inconsistently with Article 14(d) of the SCM Agreement by rejecting the NMDC's export prices as a benchmarking source.

7.166.

We have evaluated India's allegations of error in relation to the three potential sources of benchmarking data that were rejected by the USDOC. In respect of each allegation, we found that India has not demonstrated that the USDOC acted inconsistently with Article 14(d) of the SCM Agreement. Our overall conclusion, therefore, is that India has not demonstrated that the USDOC acted inconsistently with Article 14(d) of the SCM Agreement. In view of that conclusion, we do not consider it necessary for the effective resolution of this dispute to address India's claims under the chapeau of Article 14 of the SCM Agreement.

7.167.

India claims that the USDOC acted inconsistently with Article 14(b) of the SCM Agreement by failing to account for the borrower's cost in obtaining loans under the Steel Development Fund (SDF) programme.⁴⁰⁵ The USDOC did not reconsider the matter of borrower's costs under the SDF programme in its reinvestigation. Rather, India's challenge pertains to the USDOC's explanation in the 2006 administrative review.⁴⁰⁶ The United States objects that India's claim in this regard is outside of the scope of these compliance proceedings under Article 21.5 of the DSU.⁴⁰⁷

7.168.

We begin our evaluation of India's claim by assessing the United States' objection. We first set out the relevant procedural background to India's claim, before explaining our understanding of Article 21.5 as applicable to the United States' objection. We then apply that understanding to the United States' objection.

7.169.

The relevant procedural background is as follows. In the original proceedings, the Panel rejected India's factual claim "that SDF levies should have been treated as the producers' own funds", as well as India's legal claim that "investigating authorities are required to take account of the costs incurred by recipients in participating in the scheme under which the loans are provided".⁴⁰⁸ The Appellate Body overturned the Panel's finding on India's legal claim, and held instead that Article 14(b) requires an examination of "the total cost of the investigated loan … to the loan recipient".⁴⁰⁹ The Appellate Body did not consider it necessary to address India's challenge under Article 11 of the DSU against the Panel's factual finding on the SDF levies⁴¹⁰, and attempted but ultimately declined to complete the legal analysis.⁴¹¹ There was thus no DSB ruling of a violation by the United States on India's claim in this regard in the original proceedings, and the USDOC did not re‑evaluate the SDF loan/levies in its reinvestigation.⁴¹² Despite the matter not being re‑evaluated by the USDOC in its Preliminary Determination, the GOI did not raise it in its case brief in response. Indeed, no interested party raised this matter in the USDOC's reinvestigation.⁴¹³ India now seeks to make essentially the same claim in the present compliance proceedings that it made in the original proceedings, namely that the USDOC erred under Article 14(b) of the SCM Agreement by failing to account of the borrower's cost in obtaining loans under the SDF programme.⁴¹⁴

7.170.

We turn now to our understanding of Article 21.5 of the DSU as relevant to the present objection. As we have elaborated earlier⁴¹⁵, compliance proceedings under Article 21.5 cannot be used to "re‑open" issues that were decided on the merits in the original proceedings.⁴¹⁶ This would disrupt the finality of DSB rulings, contrary to Article 17.14 of the DSU.⁴¹⁷ But claims against aspects of a measure that are not decided on the merits in the original proceedings are not covered by DSB rulings and thus can be reasserted in compliance proceedings to the extent that this would not disrupt the finality of a DSB ruling.⁴¹⁸ For instance, this can occur when the Appellate Body reverses a panel's findings but does not complete the legal analysis, resulting in no DSB ruling.⁴¹⁹

7.171.

We now apply this understanding of the scope of Article 21.5 of the DSU to the United States' objection against India's claim. The United States' case is that there was no finding of inconsistency in the original proceedings relating to the USDOC's finding of benefit conferred by the SDF programme in the 2006 administrative review, and thus no DSB ruling with which the United States was required to comply.⁴²⁰ India responds that "there is a clear finding of the Appellate Body that loans obtained by the recipients cannot be determined to confer benefit in accordance with Article 14(b) without taking into account the costs incurred by such recipient in obtaining the loan", and the United States was "required to implement the recommendation and ruling of the DSB emanating from such finding".⁴²¹ In view of the parties' disagreement in this regard, we are called upon to ascertain what was adopted by the DSB in respect of India's claim on this matter in the original proceedings. In its "Findings and Conclusions" section, the Appellate Body stated:

For the reasons set out in this Report, the Appellate Body:

…

d. with respect to the Panel's "as applied" findings regarding benefit under Article 14 of the SCM Agreement:

v. reverses the Panel's finding, in paragraph 7,313 of the Panel Report, rejecting India's claim as it relates to the USDOC's determination that loans provided under the SDF conferred a benefit within the meaning of Articles 1.1(b) and 14(b) of the SCM Agreement, and finds that it is unable to complete the legal analysis[.]⁴²²

7.172.

Thus, there was no finding that the USDOC had acted inconsistently. However, the "Findings and Conclusions" section is not the only portion of the report that is "adopted" by the DSB. Rather, the "report" is adopted as a whole pursuant to Article 17.14 of the DSU. Likewise, the "Findings and Conclusions" section is qualified by the introductory chapeau "[f]or the reasons set out in this Report". The Appellate Body's reason for reversing the Panel's finding of inconsistency, as articulated in its adopted Report, was due to an error of legal interpretation by the Panel.⁴²³ In particular, the Appellate Body found that "the Panel improperly excluded consideration of a borrower's costs in assessing the cost of a loan programme to the recipient for purposes of a benchmark analysis, and that the Panel therefore erred in finding that Article 14(b) does not require the USDOC to take into account the costs incurred by SDF loan recipients in obtaining SDF loans".⁴²⁴ The Appellate Body's reversal of the Panel's finding in paragraph 7,313 of the Panel Report⁴²⁵ must be read in that context. Although India brought a separate challenge under Article 11 of the DSU against the Panel's factual finding on the SDF levies⁴²⁶, the Appellate Body declined to rule on that.⁴²⁷ Thus, the following factual finding of the Panel was not overturned in the Appellate Body Report:

As a factual matter, we do not agree that SDF levies should have been treated as the producers' own funds. SDF levies were rather collected from consumers, through an addition to the steel producers' ex‑works prices, and then remitted directly to the SDF. Since the levies were collected from consumers and always destined for the SDF, steel producers would not have been able to obtain interest by investing those funds elsewhere.⁴²⁸

7.173.

The Panel Report was adopted by the DSB as modified by the Appellate Body Report⁴²⁹, which did not, in turn, modify this factual finding of the Panel.⁴³⁰ We thus understand that this factual finding of the Panel Report was adopted by the DSB, and stands as an adopted aspect of the DSB ruling on India's claim in the original proceedings.⁴³¹ Our review of the merits of India's case in the present proceedings suggests that India contests the substance of the aforementioned factual finding by the Panel.⁴³² Accordingly, there is a real prospect that permitting India's claim would disrupt the finality of the DSB ruling on this factual finding. We therefore conclude that India's claim under Article 14(b) is not within the scope of the present compliance proceedings under Article 21.5 of the DSU.

7.174.

We nonetheless address the merits of India's claim to "provide [a] sufficient factual basis to allow the Appellate Body to complete the analysis, if necessary".⁴³³ In particular, we reaffirm the Panel's factual finding in the original proceedings, based on the following review of the USDOC's explanation in the 2006 administrative review and the evidence submitted by the GOI.

7.175.

The evidence submitted by the GOI in the underlying investigation presents the following picture. When the SDF was established in 1978, the main producers of steel at the time were subject to price controls by the GOI.⁴³⁴ Specifically, these main steel producers were members of a "Joint Plant Committee" (JPC), which the GOI had established in 1971 to determine and fix the prices of the main producers of steel.⁴³⁵ In 1978, the GOI authorized the JPC to require its members to add an element to their ex mine price (already subject to price controls) for the purposes of funding the SDF.⁴³⁶ This extra pricing element was compulsory⁴³⁷ and collected by the main steel producers⁴³⁸ – presumably from consumers (or whoever was paying the price)⁴³⁹ – and remitted to the SDF within a 90 day timeframe.⁴⁴⁰ The SDF served as a mechanism initiated by the GOI to provide finance to the main steel producers (i.e. members of the JPC).⁴⁴¹

7.176.

Turning to the USDOC's explanation, it characterized the funds collected by the main steel producers as "levies paid by steel consumers [that] were indeed compulsory and were designed to benefit Indian steel producers".⁴⁴² The USDOC disagreed that the funds collected by the main producers represented their "own funds", but rather that they "are analogous to tax revenues collected from consumers as mandated by the GOI".⁴⁴³ The USDOC specifically found "that the levies originated from producer price increases that were mandated and determined by the JPC."⁴⁴⁴ The USDOC noted further that "[i]n order to create the SDF, the GOI, acting through the JPC, mandated steel price increases which were earmarked for the SDF", and that "[s]teel producers collected this price increase, which was paid by steel consumers in India, and these additional funds were then placed into the SDF as a source of concessional financing for the Indian steel industry."⁴⁴⁵

7.177.

The USDOC's explanation thus correlates with the evidence submitted by the GOI regarding the nature of the SDF programme, particularly on the following key aspects: (a) the main steel producers participated in the SDF programme; (b) the SDF raised funds through adding a fixed price element to the ex mine price of steel to be paid (i.e. by consumers), which was in turn collected by the main steel producers and remitted to the SDF; and (c) the ex mine price of steel was itself fixed by the JPC, which was controlled by the GOI, and which the producers could not themselves raise.

7.178.

India's suggestion that "steel producers are voluntarily contributing funds derived from price increase[s] to the SDF and therefore it is a cost to such loan recipient steel producers"⁴⁴⁶ is not supported by the evidence recounted above.⁴⁴⁷ While participation in the SDF was itself not required by the GOI⁴⁴⁸, we note that all main steel producers participated⁴⁴⁹, and more importantly, that the price increase to fund the SDF was mandatorily applied after being decided by the JPC.⁴⁵⁰ Further, no evidence has been brought to our attention which suggests that the price increase to fund the SDF was an amount that the main producers could otherwise have used themselves. On the contrary, the main producers were not permitted to otherwise modify their ex mine prices beyond the fixed levels.⁴⁵¹ Therefore, it would be incorrect to infer that the levies collected by the main steel producers represented amounts that they could have invested elsewhere for other purposes.⁴⁵² Further, it would be incorrect to infer that the funds collected through the levies were the producers' "own funds" in a context where the only permissible basis for collecting those funds was for transmittal to the SDF within 90 days. Rather, as a discrete pricing component that added to the ex mine price (which, we recall, was already fixed by the JPC), it was reasonable for the USDOC to characterize the SDF levy as a cost incurred by consumers. Thus, contrary to India's argument, the SDF levy does not appear to reflect a "cost incurred by the SDF loan recipients in obtaining loans"⁴⁵³, nor does it represent the "pooling the collective 'profits' of the participating steel enterprises".⁴⁵⁴ We recognize that an investigating authority is required to take into account all of the borrower's costs associated with obtaining a loan when identifying an appropriate benchmark under Article 14(b).⁴⁵⁵ However, for the reasons set out above, we conclude that the USDOC was not required to make adjustments to its benefit benchmark under Article 14(b) to accommodate the SDF levy as an entry cost incurred by the loan recipients. We consider it immaterial that the USDOC's assessment in that regard was made within the rubric of its "financial contribution" determination as opposed to its "benefit" determination.⁴⁵⁶

7.179.

In its reinvestigation, the USDOC provided fresh determinations regarding the specificity of three subsidy programmes, namely the NMDC's sales of high‑grade iron ore, the provision of leases to mine iron ore, and the provision of leases to mine coal.⁴⁵⁷

7.180.

The fresh determination for the NMDC's sales of high‑grade iron ore arose from the Panel's finding in the original proceedings that Article 2.1(c) expressly required that "account shall be taken" of "the length of time that the relevant [subsidy] programme has been in operation"⁴⁵⁸, and that the USDOC's determination had omitted any indication that this factor had been considered, either implicitly or explicitly.⁴⁵⁹ The fresh determination for the other two subsidy programmes arose from the Panel's finding in the original proceedings that there was insufficient factual evidence to demonstrate their existence as subsidies in the first place under Articles 1.1(a)(iii) and 12.5 of the SCM Agreement.

7.181.

India now claims that the USDOC erred in its reinvestigation by arriving at the conclusion that each of these three subsidy programmes were de facto specific under Article 2.1(c) of the SCM Agreement. We address below each of India's three separate claims.

7.182.

India claims that the USDOC acted inconsistently with the final sentence of Article 2.1(c) of the SCM Agreement by failing to identify a "subsidy programme" and the "length of time during which that subsidy programme has been in operation".⁴⁶⁰ The United States objects under Article 21.5 of the DSU that India's claim is outside the scope of the present compliance proceedings.⁴⁶¹ We address that matter first.

7.183.

The United States argues that India could have challenged the identification of the "subsidy programme" in the original WTO proceedings, but did not.⁴⁶² For the United States, the DSB ruling required the USDOC to take into account the mandatory "length of time" factor under Article 2.1(c), but did not require a reassessment of the "subsidy programme" at issue.⁴⁶³ In response to a question from the Panel, India clarified that there is no aspect of its argument on the identification of a "subsidy programme" that is unconnected from its claim on the "length of time" factor.⁴⁶⁴ Accordingly, India is not challenging the identification of a "subsidy programme" independently, but only to the extent that it forms part of its claim regarding the "length of time" factor. Since there was a DSB ruling in the original proceedings that the USDOC failed to account for the "length of time" factor for the NMDC's sales of high‑grade iron ore and thus acted inconsistently with Article 2.1(c) of the SCM Agreement, we reject the United States' objection under Article 21.5 of the DSU, whilst also taking note of the limited manner in which India pursues its argument on the identification of a "subsidy programme". In particular, we understand India to argue that the USDOC failed to identify the "subsidy programme" sufficiently to enable a consideration of the "length of time" factor.⁴⁶⁵

7.184.

We also reject the United States' argument that India cannot challenge the identification of the "subsidy programme" under the third sentence of Article 2.1(c).⁴⁶⁶ India's submission in that regard is not independent from its claim under the third sentence on the "length of time" factor.⁴⁶⁷

7.185.

We turn now to the substance of India's claim. The parties differ as to what needs to be demonstrated, as a matter of law, under Article 2.1(c) of the SCM Agreement. India's case is that an investigating authority can only ascertain whether a subsidy programme has been "use[d] … by a limited number of certain enterprises" in light of the "length of time during which that subsidy programme has been in operation" after having made "two identifications".⁴⁶⁸ First, the investigating authority must identify the "subsidy programme".⁴⁶⁹ This involves evaluating whether a "plan or scheme" exists pursuant to which the subsidy at issue was provided.⁴⁷⁰ Second, the investigating authority must identify the length of time during which the subsidy programme has been in operation.⁴⁷¹ This involves ascertaining when the programme was established and how long subsidies have been provided pursuant to that programme.⁴⁷²

7.186.

The United States responds that Article 2.1(c) has a "fact‑driven nature", wherein the analysis required is flexible and can vary according to the factual scenario at issue.⁴⁷³ For the United States, "evidence regarding the nature and scope of a subsidy program may be found in a wide variety of forms and often may already have been identified and determined to exist in the process of ascertaining the existence of the subsidy at issue under Article 1.1", particularly where the programme at issue is unwritten.⁴⁷⁴

7.187.

As an initial matter, therefore, we are called upon to address whether, as a matter of law, Article 2.1(c) calls for a prescriptive analysis comprising the explicit identification of a "subsidy programme" and its overall duration, or alternatively, whether Article 2.1(c) reflects a more flexible legal standard that can be satisfied by citing evidence from which it can be inferred that a "programme" exists and that it has been operating for a certain period of time.

7.188.

We note that the text of Article 2.1(c) of the SCM Agreement – and specifically its third sentence – does not prescribe any particular method or analytical process for identifying a "subsidy programme" and "the length of time during which [it] has been in operation".⁴⁷⁵ The context of the provision suggests that the function of identifying these aspects is, inter alia, to inform the evaluation of whether a subsidy is de facto specific due to "use of a subsidy programme by a limited number of certain enterprises".⁴⁷⁶ The rationale for taking into account the "length of time during which the subsidy programme has been in operation" in that regard is because, if the programme has been operating only for a short period of time, its use by a limited number of enterprises may not be indicative of specificity but rather a mere reflection of it being short‑lived.⁴⁷⁷

7.189.

In view of the function and rationale for identifying the "subsidy programme" at issue and its "length of time", we conclude that the investigating authority's analytical process must be sufficient to enable it to ascertain whether a subsidy is de facto specific due to the "use of a subsidy programme by a limited number of certain enterprises", or instead, whether that limited use can be explained by the programme being short‑lived.⁴⁷⁸ There are a number of facets that would logically form part of that analytical process. First, the analysis would need to ascertain whether the "programme" has been operating for a certain period of time such that its limited use by certain enterprises is not due simply to it being short‑lived.⁴⁷⁹ Second, the consideration of whether there is a "programme" which is capable of being "use[d]" by certain enterprises over a certain period of time suggests that the subsidy in question is part of some systematic activity⁴⁸⁰ that has some duration (be it long or short), as distinct from the isolated provision of a non‑recurring subsidy.⁴⁸¹ Beyond that, however, Article 2.1(c) does not prescribe a particular method or analytical process for identifying the existence of a "subsidy programme" for the purposes of taking into account the "length of time" factor.⁴⁸² Since the USDOC explicitly considered the "length of time" factor for the NMDC's sales of high‑grade iron ore, we are not confronted in respect of this subsidy programme by the question of whether an unwritten "implicit" consideration can suffice under Article 2.1(c).

7.190.

We turn now to the USDOC's explanation. The USDOC relied on three pieces of evidence to account for the "length of time of the operation of the subsidy programme" in its broader evaluation of whether the NMDC's sales of high‑grade iron ore were specific due to their "limited use by certain enterprises". In view of the limited usefulness of one of those pieces of evidence⁴⁸³, we focus on the other two pieces of evidence relied upon by the USDOC in its explanation.

7.191.

The first piece of evidence relied on by the USDOC was the fact that the NMDC was established "in 1958 with the objective of developing all minerals other than coal, petroleum oil and atomic minerals".⁴⁸⁴ India contends that this evidence merely conflates the establishment of the granting authority with the existence of a broader subsidy "programme". It is true that the USDOC did not cite evidence or arrive at a conclusion that the NMDC was established specifically to provide domestic subsidies through selling high‑grade iron ore for LTAR. However, the United States points to record evidence showing that the NMDC's sales of iron ore was "consistent with the strategic objectives and plan of the Indian Government", particularly evidence relating to the importance that the GOI placed on the domestic availability of iron ore for the purposes of fostering domestic steel consumption.⁴⁸⁵ The United States argues that this evidence – which was relied upon in (or otherwise connected to⁴⁸⁶) the USDOC's "public body" determination – can now be used to augment the USDOC's assessment of the "subsidy programme" at issue. We recall, in that regard, that the Appellate Body has recognized that "the relevant 'subsidy programme', under which the subsidy at issue is granted, often may already have been identified and determined to exist in the process of ascertaining the existence of the subsidy at issue under Article 1.1", including that it has existed for a certain period of time.⁴⁸⁷ In such instances, an investigating authority does not need to repeat the aspects of its evaluation in determining the existence of the "subsidy" under Article 1.1 when subsequently determining the existence and duration of the "subsidy programme" under Article 2.1(c).⁴⁸⁸ On that basis, we consider it appropriate to take into account relevant evidence and explanations of the USDOC regarding its "public body" determination as part of our examination of whether the USDOC has adequately considered that a "subsidy programme" existed for some minimum period of time under Article 2.1(c).

7.192.

We consider, in turn, that the USDOC's discussion of the NMDC as a "public body" indicates that it considered the NMDC's sales of iron ore to be "consistent with the strategic objective and plan of the Indian Government", and hence comprised a "systematic activity" that evinces the existence of a "programme" that endured over a certain period of time.⁴⁸⁹ In particular, the USDOC discussed its Verification Report in which a GOI official described the NMDC as "provid[ing] a specific service to the people" and is therefore "monitored and reviewed by the government, as [it is] viewed as [a] strategic compan[y]" by the GOI.⁴⁹⁰ Additionally, the USDOC discussed the NMDC Chairman's recommendation as part of the Dang Report that "except [for] long term contract, export of iron ore should not be allowed".⁴⁹¹ We likewise recall that the NMDC recommended that "[e]xport of lump ore should be discouraged to meet domestic demand", and that "[t]he raw material being natural reserves should be available adequately for the domestic industry and exports should not be at the cost of [the] domestic industry".⁴⁹² As we have found earlier, these aspects of the "public body" determination provided a sufficient evidentiary basis for the USDOC to infer that the NMDC's supply of high‑grade iron ore was affected by GOI policy considerations.⁴⁹³ This evidence implies a strategic motivation behind the NMDC's domestic sales of iron ore that extends beyond a mere repetition of transactions by the NMDC for LTAR.

7.193.

The second piece of evidence relied on by the USDOC was the fact that the investigated producers received the subsidy at issue over the course of a number of review investigations occurring in successive years, namely in 2004, 2006, and 2007.⁴⁹⁴ India argues that the USDOC's reliance on evidence of the NMDC's sale of iron ore to certain producers is not sufficient to demonstrate that the "length of time" factor was addressed properly.⁴⁹⁵ We need not resolve in this dispute whether such evidence is alone sufficient. Rather, we consider that the provision of individual subsidies over a number of years can permissibly corroborate other evidence that a "subsidy programme" persisted over a period of time, thus demonstrating that the "limited use" of the subsidy was not merely due to the programme being short lived.

7.194.

The sufficiency of the evidence relied upon by the USDOC must also be considered in light of the context of its assessment⁴⁹⁶: namely, the nature of the putative subsidy programme as an unwritten measure involving the "provision of goods"⁴⁹⁷, and the nature of determinations of de facto specificity (as opposed to de jure specificity).⁴⁹⁸ In particular, this context means that the assessment will often be made in the absence of direct documentary evidence that the programme's use is confined to a "limited number of certain enterprises". In such a context, we consider that the USDOC's reliance on the two aforementioned facts formed a sufficient evidentiary basis for taking into account the length of time during which the subsidy programme has been in operation as part of the broader assessment of whether the subsidy is de facto specific due to the "use of a subsidy programme by a limited number of certain enterprises". We therefore conclude that India has not demonstrated that the USDOC acted inconsistently with Article 2.1(c) of the SCM Agreement in its assessment of the "length of time" factor for the NMDC's sales of high‑grade iron ore.

7.195.

India claims that the USDOC acted inconsistently with Articles 1.2, 2.1(c), and 2.4 of the SCM Agreement in its finding that the "leases to mine iron ore" programme is de facto specific. First, India points to a "contradiction" between the USDOC's explanation and the United States' submissions in the present proceedings.⁴⁹⁹ In particular, according to India, the USDOC found that the leases were provided to both steelmakers⁵⁰⁰and standalone miners, whereas the United States now submits that the leases were limited to steelmakers.⁵⁰¹ Second, India argues that the USDOC failed to address the fact that the law governing mining leases established objective criteria under which all applicants were treated equally.⁵⁰² For India, this was corroborated by record evidence showing that steel producers were not favoured over independent miners of iron ore either in terms of allocation of rights or the payment of royalties.⁵⁰³

7.196.

The United States responds that "the USDOC relied on substantial record evidence that India had a mining leases for iron ore program under which mining rights were granted to Indian steel and mining companies through leases, and that those steel companies represented limited users of the iron ore."⁵⁰⁴ The United States rejects India's suggestion of a "contradiction" between its submissions and the USDOC's explanation.⁵⁰⁵ Rather, both its submissions and the USDOC's explanation rely on the provision of leases to mine iron ore being limited to two industries, specifically steelmakers and mining companies.⁵⁰⁶ The finding that the "use of the iron ore from leases is limited to steel companies" was a factual matter demonstrating that the inherent characteristics of iron ore make it limited to steelmakers as an input for producing steel, as opposed to reflecting the de facto specificity determination in and of itself.⁵⁰⁷ In relation to India's argument that the applicable law provides that mining leases are based on objective criteria, the United States argues first that this is irrelevant to findings of de facto specificity, and second that the record evidence shows that the use of iron ore was limited to steel producers – both as a function of its inherent utility to those producers, and as a function of an explicit GOI strategy to channel iron ore to domestic steel producers.⁵⁰⁸

7.197.

An important dimension of the parties' dispute under this claim is that the Preliminary Determination defined the subsidy programme at issue as the "direct provision of a good" to "Indian [steelmakers] in exchange for a per unit fee"⁵⁰⁹, whereas the Final Determination expanded the finding of the "limited users" of the subsidy programme from domestic steelmakers alone to domestic steelmakers and standalone miners.⁵¹⁰

7.198.

India refers to a "contradiction" between the USDOC's explanation that mining leases for iron ore were limited to steelmakers and standalone miners, on the one hand, and the United States' submissions in the present proceedings that they were limited to steelmakers.⁵¹¹ This contradiction is apparent between the USDOC's Preliminary Determination and Final Determination. The Preliminary Determination defined the subsidy programme at issue as the "direct provision of a good" to "Indian [steelmakers] in exchange for a per unit fee".⁵¹² The USDOC then found there to be de facto specificity in its Preliminary Determination on the basis of limited use by Indian steelmakers, since the inherent use of iron ore is for steel production and the GOI pursued a strategy of directing iron ore to its domestic steelmakers.⁵¹³ In the Final Determination, the USDOC expanded its finding of the "limited users" from domestic steelmakers alone to domestic steelmakers and standalone miners.⁵¹⁴ However, the USDOC did not adjust any of its other findings from the Preliminary Determination regarding its definition of the subsidy programme (including the entities using the programme, i.e. steelmakers) and the rationale for its "limited use" finding.⁵¹⁵

7.199.

The USDOC's failure to make adjustments to other aspects of its de facto specificity determination when switching from "limited use" by steelmakers to "limited use" by steelmakers and standalone miners results in a number of internal contradictions in its reasoning. First, the USDOC defined the "subsidy programme" at issue as the "direct provision" of iron ore to steelmakers through the provision of iron ore mining leases to steelmakers.⁵¹⁶ By limiting the "subsidy programme" to steelmakers in this way, it is not possible for the programme to be used by other entities. Accordingly, it does not make sense for the USDOC to proceed to find "limited use" of this programme by a second industry not covered by the programme, i.e. standalone miners. Second, the USDOC's rationale for its "limited use" finding pertained to the inherent use of iron ore as an input for steel, together with the pursuit by the GOI of a strategy of directing iron ore to domestic steelmakers.⁵¹⁷ This may explain an inherent limitation (and therefore specificity) in the use of the leases for mining iron ore by domestic steelmakers, but it does not explain the limitation in the use of these leases by standalone miners. Standalone miners did not use the mining leases to produce steel, but rather to extract and sell iron ore, both domestically and for export.⁵¹⁸ Thus, "limited use" of the mining leases for iron ore on the basis of their inherent use for domestic steel production by the recipient enterprises does not substantiate a "limited use" finding for standalone miners.

7.200.

In summary, the USDOC included standalone miners within the category of "a limited number of certain enterprises" under Article 2.1(c)⁵¹⁹, but did not include standalone miners within the category of entities that could "use" the "subsidy programme" under Article 2.1(c).⁵²⁰ Further, the USDOC's rationale for the "limitation" of the programme to "certain enterprises" pertained only to the use of the programme by domestic steelmakers, and not by standalone miners.⁵²¹

7.201.

We recognize that there could be several plausible bases on which the USDOC could have sought to justify a "limited use" finding in respect of both domestic steelmakers and standalone miners. In its Final Determination, however, the USDOC reiterated its rationale from the Preliminary Determination that "iron ore's inherent characteristics makes the use of iron ore limited to steel companies as an input for producing steel".⁵²² This rationale was despite the USDOC's finding that standalone miners comprised an additional industry to whom the leases were granted⁵²³, and despite its finding that a significant portion of the iron ore granted under the leases may have been exported (i.e. used by standalone miners for export rather than for sale to domestic steelmakers).⁵²⁴

7.202.

The United States has not reconciled these aspects of the USDOC's explanation before us. On one hand, the United States argued that the USDOC's determination was based on "limited use" by "two industries, specifically steel producers and mining companies".⁵²⁵ On the other hand, the United States' maintained that the "use of the iron ore from leases is limited to steel companies".⁵²⁶ We agree with India that there is no explanation in the USDOC's determination setting out a rationale for the limited nature of the programme at issue vis-à-vis "standalone mining companies", as distinct from steelmakers.⁵²⁷

7.203.

For all of the foregoing reasons, we are unable to conclude that the USDOC provided a reasoned and adequate explanation for its finding that the mining leases for iron ore programme was de facto specific under Article 2.1(c) of the SCM Agreement. We therefore find that the USDOC acted inconsistently with Article 2.1(c) of the SCM Agreement in finding that the mining leases for iron ore programme was de facto specific. In view of this conclusion, we do not consider it necessary for the effective resolution of this dispute to address India's claims under Articles 1.2 and 2.4 of the SCM Agreement on this point.

7.204.

India claims that the USDOC acted inconsistently with Articles 1.2, 2.1(c), and 2.4 of the SCM Agreement by making "no attempt … to consider the economic diversification in India and the length of time [of] the two subsidy programs", despite proceeding to find de facto specificity.⁵²⁸ India's case is simply that a "perusal" of the USDOC's determination reveals no consideration of these factors.⁵²⁹ India rejects the suggestion that these factors could have been considered implicitly as evinced by other aspects of the determination, arguing instead that this would be tantamount to ex post reasoning, and further, that the context afforded by the public notice requirements in Article 22 of the SCM Agreement suggest that the USDOC must "determine" and "publish" its findings on these points.⁵³⁰

7.205.

The United States makes an Article 21.5 objection against India's claim that the USDOC erred by failing to take into account the mandatory "length of time" and "extent of the diversification" factors under Article 2.1(c) for these two subsidy programmes.⁵³¹ We briefly address this objection first. The United States correctly notes that India could have challenged these matters in the original proceedings, but did not.⁵³² Indeed, India made these claims in respect of other subsidy programmes in the original proceedings, but not in respect of the present two subsidy programmes.⁵³³ However, the United States' objection fails for the following reason. The Panel's findings of violation regarding these two subsidy programmes in the original proceedings were based on the absence of sufficient evidence to demonstrate theirexistence.⁵³⁴ Thus, in order to implement the DSB ruling, the USDOC was required to undertake its investigation afresh as to whether these putative subsidy programmes actually existed and, in turn, satisfied each of the legal elements necessary to permit the application of CVDs. This included an analysis of whether those programmes were specific under Article 2.1. Indeed, in the original proceedings the Panel exercised judicial economy over India's specificity claims⁵³⁵ regarding these two programmes for the very reason that the DSB ruling would require a reconsideration of specificity in any event.⁵³⁶ Thus, the United States' objection fails.

7.206.

Turning to the merits of India's claim, the United States rebuts that India's claim is "generic and unsupported", and in any case, the extent of diversification of India's economy was considered in the determination of the specificity of another subsidy programme (the NMDC's sales of iron ore), and the length of time of the mining leases for coal programme was considered as part of the timing of the conferral of the coal lease to Tata.⁵³⁷ For the United States, the requirement to "account" for these factors is sufficiently broad as to cover instances where these factors have been considered implicitly, and further, where these factors are not relevant in a given case, they need not be discussed explicitly.⁵³⁸

7.207.

We now evaluate the merits of India's claim that the USDOC failed (made "no attempt") to consider the "extent of diversification" and "length of time" factors under Article 2.1(c). In light of India's claim and the United States' rebuttal, the issue before us is whether the USDOC's determination reveals that it did in fact consider these mandatory factors to the extent required by Article 2.1(c) in the particular circumstances of these subsidy programmes.

7.208.

Since the parties diverge on what it means to consider the "extent of diversification" and "length of time" factors under Article 2.1(c), we begin by addressing what investigating authorities are required to do under that provision, including whether an unwritten "implicit" consideration can suffice. The relevant portion of Article 2.1(c) states:

In applying this subparagraph, account shall be taken of the extent of diversification of economic activities within the jurisdiction of the granting authority, as well as of the length of time during which the subsidy programme has been in operation.⁵³⁹

7.209.

We note first that the term "taking account" (in the active voice) is used to define and delimit the role played by these factors within the context of Article 2.1(c). The ordinary meaning of this term, as identified by panels in relation to Article 2.1(c)⁵⁴⁰, and by the Appellate Body in other contexts, refers to considering a matter along with other factors before reaching a decision.⁵⁴¹ While "taking account" of these factors is mandatory, this term does not prescribe a specific result or require a Member to conform to or act in accordance with a particular matter.⁵⁴²

7.210.

Since Article 2.1(c) does not prescribe the manner in which "account shall be taken" of these factors, past panels have concluded it can be sufficient for other aspects of a determination to demonstrate that "account was taken" of the matter. For instance, in US – Softwood Lumber IV, the panel found that:

While it is clear that the USDOC did not explicitly and as such address the extent of economic diversification in its Final Determination, we consider that in noting that "the vast majority of companies and industries in Canada does not receive benefits under these programmes", the USDOC showed that it had taken account of the extent of economic diversification in Canada and its provinces, i.e. the publicly known fact that the Canadian economy and the Canadian provincial economies in particular are diversified economies.⁵⁴³

7.211.

Other panels have likewise found that "taking into account the two factors in the final sentence of Article 2.1(c) need not be done explicitly", so long as there is some indication in the determination that the factors had been considered implicitly.⁵⁴⁴ Relatedly, it may be the case, as the United States contends, that one of these factors is simply irrelevant in a particular factual matrix.⁵⁴⁵ Even in such cases, there would still need to be an indication (implicit or explicit) that the investigating authority considered the factor and concluded it to be irrelevant.⁵⁴⁶ Such an indication could flow from the nature and implications of the investigating authority's reasoning on a given point, or may be self‑evident from the investigating authority's review of the record evidence or from the submissions of an interested party during the investigation. This can only be determined in light of the circumstances of a given case. One particular circumstance that would, in our view, attenuate the level of scrutiny required of an investigating authority concerns whether interested parties had explicitly questioned specificity with supporting evidence during the investigation on the basis of the short duration of the subsidy programme or the lack of diversity in the relevant economy.⁵⁴⁷ An investigating authority would ordinarily be expected to consider the matter explicitly when confronted with relevant evidence, whereas it would be reasonable to expect only limited or implicit analysis if the matter was not raised at all by interested parties during an investigation.

7.212.

We turn now to India's claim regarding the "extent of diversification" factor. It is uncontested that the USDOC's determination does not mention this factor in its de facto specificity determinations for the mining leases for coal programme and mining leases for iron ore programme.⁵⁴⁸ The question before us, therefore, is whether the USDOC's explicit consideration of this factor in relation to another subsidy programme (the NMDC's sale of iron ore) was sufficient to reveal an implicit consideration of this factor for the two programmes that India now challenges. We conclude that this was sufficient for two reasons.

7.213.

First, the nature of the "extent of diversification" factor is not specific to a given subsidy programme. Rather, the reason for taking this factor into account is because "where the extent of the underlying economic diversification is low, lack of diversification in the distribution of benefits would not by itself give rise to a finding of de facto specificity".⁵⁴⁹ Thus, as the United States points out⁵⁵⁰, the consideration of this factor involves a macroeconomic assessment of diversification, which need not vary as between subsidy programmes operating within the same economy.

7.214.

Second, the way in which the USDOC evaluated the "extent of diversification" factor in its determination was not programme‑specific, despite being situated within the "NMDC sales of iron ore" programme. The USDOC's starting point was, in general terms, that "the extent of diversification of economic activities would only be material or relevant when diversification of economic activities does not exist".⁵⁵¹ In examining whether "diversification of economic activities does not exist" in India, the USDOC's methodology was to consider the "economic statistics on India's industrial sector" in the annual reports of the Reserve Bank of India. Based on this data, the USDOC found there to be "diversification of the industrial sector in India as this sector is comprised of [nineteen] industries and economic activities".⁵⁵² Since the two subsidy programmes that India now challenges are likewise situated within "India's industrial sector"⁵⁵³, the methodology and explanation provided by the USDOC in respect of the "NMDC sales of iron ore" programme applies equally to the two present programmes. We also note that, during the reinvestigation, the GOI only raised the USDOC's failure to consider the "extent of diversification" factor in relation to the "NMDC sales of iron ore" programme. In that context, it is not unreasonable for the USDOC to have considered this generic factor only under the particular heading of the "NMDC sales of iron ore" programme.⁵⁵⁴

7.215.

We turn now to the "length of time" factor. It is useful to address the two subsidy programmes separately. We begin with the mining leases for coal programme. This programme was limited to the provision of a mining lease to Tata, and it is clear that the USDOC's determination examined the length of time over which this lease had extended. As the United States identifies, the determination tracks the history of this lease from its original grant by the Raja of Ramgarh in 1907, to the post‑independence affirmation of this grant by the Bihar Land Reform Act in 1950, to the exemption of the lease from renegotiation under the MMDR Act in 1957.⁵⁵⁵ Although not explicitly discussed within the rubric of de facto specificity and the "length of time" factor, we find this sufficient to demonstrate that the USDOC did consider the length of time over which the subsidy programme had been operating, at least implicitly. India has thus not demonstrated that the USDOC acted inconsistently with Article 2.1(c) of the SCM Agreement in this regard.

7.216.

We turn now to India's claim regarding the USDOC's consideration of the "length of time" factor for the mining leases for iron ore programme. India correctly notes that there is no explicit discussion in the USDOC's determination of the "length of time" during which this programme had been operating.⁵⁵⁶ For India, this shows that the USDOC did not, in fact, take the "length of time" factor into account.⁵⁵⁷ In response, the United States argued that:

With respect to the mining rights of iron ore program, the USDOC explained in its Section 129 Determinations that all mining rights are owned by the state governments and mining leases for iron ore are granted with approval from the GOI to the steel industry. It further noted that NMDC was "[i]ncorporated in 1958 as a fully Government of India owned public enterprise with the objective of developing all minerals other than coal, petroleum, and atomic minerals." Thus, contrary to India's assertions, the record evidence shows that the USDOC took into account the length of time the subsidy programs have been in operation.⁵⁵⁸

7.217.

The United States elaborated that:

The aim of a subsidy program becomes more evident as time progresses. In the context of the mining rights of iron program, and taking the inherent characteristics of iron ore into account – i.e., that the mineral is inherently limited to steel companies as an input for producing steel – the USDOC observed that it became more evident as time progressed that leases for mining rights of iron ore were limited to India's steel companies, including the NMDC. In light of this analysis in the USDOC's Section 129 Determinations, it is apparent that the USDOC took account of the length of time the mining rights of iron ore program has been in operation.⁵⁵⁹

7.218.

It is apparent from these extracts that three factors inform the United States' rebuttal: (a) the NMDC was established in 1958; (b) the use of iron ore is inherently limited to steel companies; and (c) the USDOC's observations regarding the then‑current and forecast demand for iron ore by domestic steelmakers.

7.219.

As we have indicated earlier, an assessment of the mandatory factors under Article 2.1(c) can be implicit⁵⁶⁰, and likewise they can potentially be addressed through other aspects of a determination⁵⁶¹, e.g. when identifying the features of the financial contribution at issue. Further, the fact that no interested party or interested Member raised this matter during the reinvestigation is relevant procedural context.⁵⁶² It informs the Panel's assessment of the level of scrutiny that was reasonably required of the USDOC in taking account of the length of time factor in its specificity determination for the mining leases for iron ore programme. We also note that, in the original proceedings, the Panel made the following remarks in respect of another subsidy programme on "inherent use", specificity, and the length of time factor:

We also note the United States' argument that the evidence underlying USDOC's specificity findings with respect to high-grade iron ore led to the conclusion that the issue of the duration of that programme's operation was not relevant to the subsidy programme at issue. The United States contends that because the USDOC found that "the actual recipient of the subsidy is limited to industries that use iron ore, including the steel industry, and is thus limited in number", no additional analysis of the duration of the subsidy was necessary. Since there is no statement to this effect in the USDOC's determinations, nor in any contemporaneous documentation, we are unable to take this argument into account when considering whether or not the USDOC complied with the requirements of Article 2.1(c).⁵⁶³

7.220.

In line with these remarks, we recognize that an "inherent use" rationale could render the "length of time" factor irrelevant or redundant in a given case.⁵⁶⁴ However, there must be some indication that this was the rationale of the investigating authority.⁵⁶⁵

7.221.

With these considerations in mind, we now address whether the USDOC could be said to have taken account of the "length of time" factor for the mining leases for iron ore programme. No material has been brought to our attention to suggest that the GOI or any interested party raised the issue of the "length of time" factor during the reinvestigation in respect of the mining leases for iron ore programme.⁵⁶⁶ This attenuates the level of scrutiny that was reasonably required of the USDOC in taking account of the length of time factor. However, there would still need to be some indication that this factor was, in fact, taken into account. While the United States draws attention to the date of establishment of the NMDC being 1958, we see nothing to indicate in the USDOC's discussion of this matter to suggest that it reflected an implicit consideration of the length of time of the mining leases for iron ore programme.⁵⁶⁷ There is simply no link drawn between that fact and the duration of the mining leases for iron ore programme. Likewise, the United States draws attention to the USDOC's observations regarding the then‑current and forecast demand for iron ore by domestic steelmakers, but again we cannot discern a link between this and an implicit consideration of the length of time of the mining leases for iron ore programme.⁵⁶⁸ Further, the United States makes reference to the "inherent use" nature of the USDOC's reasoning, but there is nothing in the USDOC's determination or any contemporaneous documentation which indicates that it found the "length of time" factor to be irrelevant because of the inherent use of iron ore.⁵⁶⁹ The United States' arguments on these points would therefore appear to reflect ex post reasoning in relation to the length of time factor under Article 2.1(c).

7.222.

We recognize that there was material before the USDOC regarding the length of time that the mining leases for iron programme had been operating. For instance, the GOI noted in its case brief that the alleged subsidy programme had been available to other entities in periods between 1999‑2000 and 2003‑2004, as well as 2004‑2005 and in the 2006 administrative review.⁵⁷⁰ The GOI also cited an exhibit⁵⁷¹, which in turn set out the mineral concession approvals that had been made by the Central Government.⁵⁷² This exhibit lists concessions to mine iron ore that had been approved over a period spanning 1999‑2008. Again, however, there is no indication that the USDOC took this material or any other relevant material into account as part of a consideration of the mandatory "length of time" factor for this subsidy programme under Article 2.1(c). It is uncontested that there is no explicit discussion of this factor in the USDOC's explanation, and nothing indicates to us that it was otherwise considered implicitly.

7.223.

We therefore find that the USDOC acted inconsistently with Article 2.1(c) of the SCM Agreement by failing to take account of the length of time during which the mining leases for iron ore programme had been in operation. In view of our conclusions in this Section, we do not consider it necessary for the effective resolution of this dispute to address India's claims under Articles 1.2 and 2.4 of the SCM Agreement.

7.224.

India claims that the USDOC acted inconsistently with Article 12.1 of the SCM Agreement by failing to: (a) notify interested parties of the information it required; (b) seek relevant information; and (c) reopen the record and accept information voluntarily provided.⁵⁷³ India's claim concerns the USDOC's treatment of two separate matters, namely the alleged "enhanced autonomy" granted to the NMDC through "Miniratna" status, and the proprietary Tata price quote. The text of Article 12.1 provides:

Interested Members and all interested parties in a countervailing duty investigation shall be given notice of the information which the authorities require and ample opportunity to present in writing all evidence which they consider relevant in respect of the investigation in question.

7.225.

It is uncontested that there was no finding of violation of Article 12.1 in the original proceedings. Therefore, there was no explicit DSB ruling that required the USDOC to reobserve the procedural protections under Article 12.1 as part of its Section 129 reinvestigation. Accordingly, the question before us is whether the DSB rulings somehow necessitated the seeking and acceptance of new evidence, thus re‑enlivening Article 12.1 in the USDOC's reinvestigation, despite the absence of an explicit DSB ruling in that regard.

7.226.

In respect of the Tata price quote, we have already found that the USDOC had a sufficient basis for rejecting this evidence as not reflecting "prevailing market conditions" under Article 14(d) of the SCM Agreement. We therefore exercised judicial economy over India's alternative claim regarding the confidentiality of the price quote.⁵⁷⁴ Since India's claim under Article 12.1 likewise relates to the confidentiality of the Tata price quote, we also exercise judicial economy over this claim. In respect of the legal implications of the NMDC's Miniratna status, we have already found that the DSB ruling did not prescribe explicitly that additional evidence would be required for the USDOC to apply the correct legal standard, nor that there was anything especially probative about the evidence of Miniratna status – other than that it was pertinent to questions of the relationship between the Government and NMDC, which was the correct legal standard to be applied.⁵⁷⁵ As we have explained above⁵⁷⁶, the existing record evidence provided the USDOC with a sufficient evidentiary basis for concluding that the NMDC was not endowed with a generalized "enhanced autonomy", and that any autonomy exercised by the NMDC was confined in such a way that it did not rebut other evidence indicating "meaningful control" of the NMDC by the GOI. We therefore see no basis arising from the DSB ruling to require the USDOC to reobserve Article 12.1 of the SCM Agreement and to thereby have imposed an obligation on the USDOC to allow the submission of the "new factual information" on Miniratna status.

7.227.

We note that India also argues that, regardless of whether the DSB ruling explicitly required new evidence to be sought and accepted in the reinvestigation, Article 21.4 of the SCM Agreement requires the observance of Article 12 in reviews. For India, this means that Article 12 applies to the Section 129 reinvestigation through Article 21.4, since it involved the reinvestigation of administrative reviews.⁵⁷⁷

7.228.

We have evaluated India's argument, and likewise the United States' rebuttal⁵⁷⁸, and we consider that the SCM Agreement does not refer to the steps that an investigating authority must take to implement DSB rulings or to the collection of evidence at that stage.⁵⁷⁹ It therefore does not prescribe anything particular in that regardIt does not explicitly preclude⁵⁸⁰, nor explicitly mandate⁵⁸¹, the reopening of the evidentiary record for the purposes of a reinvestigation. The key question pertains to what the DSB ruling required of the USDOC⁵⁸², and as we have found, India has not demonstrated that the DSB ruling in this case required the USDOC to reobserve Article 12.1 of the SCM Agreement in its Section 129 reinvestigation. We therefore conclude that India's claim under Article 12.1 regarding Miniratna status is not within the scope of the present compliance proceedings under Article 21.5 of the DSU.

7.229.

India claims that the USDOC acted inconsistently with Article 12.8 of the SCM Agreement by failing to disclose two "essential facts" in the Section 129 Preliminary Determination, which in turn inhibited the GOI's ability to defend its interests.⁵⁸³ India does not allege there to be a DSB ruling arising from a violation of Article 12.8 in the original proceedings. Rather, India's argument is that the USDOC's implementation of two other DSB rulings reactivated the procedural protections under Article 12.8, with which the USDOC failed to comply. First, India submits that the USDOC failed to mention the export restrictions on iron ore as a reason for rejecting the NMDC's export price as a benchmark under Article 14(d) in the Section 129 Preliminary Determination, despite relying on this fact in the Section 129 Final Determination. Second, India submits that the USDOC's Section 129 Preliminary Determination failed to analyse the mandatory "length of time" and "diversification" factors in relation to the NMDC's sale of high-grade iron ore, and instead addressed these for the first time in the Section 129 Final Determination.

7.230.

The United States responds that Article 12.8 does not require the disclosure of reasoning, nor does it prescribe the manner in which essential facts are to be disclosed.⁵⁸⁴ Thus, the disclosure of the fact regarding export restrictions on iron ore in a verification report in the 2004 administrative review sufficed to comply with Article 12.8⁵⁸⁵, despite not being linked to the rejection of the NMDC's export price as a benchmark.⁵⁸⁶ According to the United States, this fact was also disclosed in the Section 129 Preliminary Determination in relation to its analysis of the NMDC as a "public body" (insofar as the document containing this fact was cited).⁵⁸⁷ The United States likewise contends that the facts regarding the mandatory "diversification" and "length of time" factors were "disclosed" consistently with Article 12.8 by their inclusion on the record in the original investigation/reviews, despite not being linked to the USDOC's specificity analysis in the Section 129 Preliminary Determination.⁵⁸⁸ For the United States, the USDOC's disclosure of the essential facts at issue was sufficient to enable the GOI to defend its interests.⁵⁸⁹

7.231.

The text of Article 12.8 of the SCM Agreement provides:

The authorities shall, before a final determination is made, inform all interested Members and interested parties of the essential facts under consideration which form the basis for the decision whether to apply definitive measures. Such disclosure should take place in sufficient time for the parties to defend their interests.

7.232.

In light of the parties' arguments, we are called upon to resolve two main issues. The first issue is whether Article 12.8 applied afresh to the Section 129 reinvestigation. The second issue concerns the extent to which Article 12.8 requires an investigating authority to indicate how it intends to use the "essential fact" in question. Under the United States' approach, Article 12.8 does not contain such a requirement; rather, it is sufficient for an investigating authority to disclose the fact in relation to a different aspect of the determination, or through mentioning the fact in a verification report, or through placing the fact on the record.⁵⁹⁰ Under India's approach, Article 12.8 requires not only the disclosure of a given fact, but also the disclosure of an investigating authority's reliance on that fact, such that an interested party may defend its interests.⁵⁹¹

7.233.

Beginning with whether Article 12.8 of the SCM Agreement applied afresh to the Section 129 reinvestigation, the United States argues that the USDOC complied with this requirement in the underlying reviews/investigations, and thus did not need to again disclose the "essential facts under consideration" in the Section 129 reinvestigation.⁵⁹² The United States emphasizes that "from the outset of the Section 129 proceeding, India was aware that the USDOC was reevaluating and providing additional analysis concerning the record evidence from the proceedings at issue – the 2004, 2006, 2007, and 2008 administrative reviews – as a result of WTO‑inconsistent findings".⁵⁹³ India's response is that the Section 129 reinvestigation was a "separate investigation" vis‑à‑vis the underlying reviews/investigation, hence requiring the separate application of Article 12.8 to the reinvestigation.⁵⁹⁴ In support, India relies on the context afforded by Article 21.4 of the SCM Agreement, which requires the reapplication of the disciplines of Article 12 (including Article 12.8) to administrative and sunset reviews, as opposed to relying on the disclosure in the original investigation.⁵⁹⁵

7.234.

In our evaluation of India's claim under Article 12.1, we have already explained⁵⁹⁶ that the SCM Agreement does not refer to the steps that an investigating authority must take or to the collection of evidence when undertaking a reinvestigation to implement adverse DSB ruling.⁵⁹⁷ We consider that the same observation applies to an investigating authority's treatment of essential facts in such a reinvestigation.⁵⁹⁸ As with Article 12.1, nothing in the text of the SCM Agreement explicitly precludes or mandates the disclosure of essential facts under Article 12.8 for the purposes of a reinvestigation. That being the case, the key question pertains to what the DSB ruling required of the USDOC.

7.235.

The United States contends that when an investigating authority's consideration is limited to the same pool of record evidence as in the originally‑challenged investigation, there is no need to reobserve Article 12.8.⁵⁹⁹ We accept that this may sometimes be the case.

7.236.

However, if the DSB ruling requires a fresh factual evaluation of the same pool of record evidence, this may result in an investigating authority relying on different factual bases vis‑à‑vis the originally‑challenged investigation, thus necessitating a new disclosure of the essential facts that are under consideration for the purposes of Article 12.8.⁶⁰⁰ In our view, this was clearly the case in respect of the DSB rulings pertaining to India's present claim. With regard to the alleged failure to disclose the export restrictions on the NMDC's iron ore in the context of its benchmark determination, the USDOC's reinvestigation arose from a DSB ruling that the USDOC had failed to take into account certain evidence (the domestic pricing information).⁶⁰¹ With regard to the alleged failure to disclose the length of time and extent of diversification of the Indian economy in the context of its specificity determination, the USDOC's reinvestigation arose from a DSB ruling that the USDOC had failed to take those mandatory factors into account.⁶⁰² In both of these instances, the DSB rulings necessarily required a reconsideration of evidence, thus creating the potential for a different set of "essential facts" forming the basis of the determination in the Section 129 reinvestigation, and relatedly, generating a renewed basis for interested Members and interested parties to defend their interests.

7.237.

We therefore find that the USDOC was required to reapply Article 12.8 in the Section 129 reinvestigation in relation to the two matters identified by India. We now evaluate whether India has demonstrated that the USDOC acted inconsistently with Article 12.8 by failing to disclose the essential facts in relation to the two matters referred to by India. We begin our evaluation of India's claims with an overview of the legal standard under Article 12.8, before applying this to the alleged steps taken by the USDOC to "disclose" the "essential facts" that were "under consideration" in the Section 129 redetermination.

7.238.

We recall that the text of Article 12.8 of the SCM Agreement requires investigating authorities to "inform all interested Members and interested parties of the essential facts under consideration which form the basis for the decision whether to apply definitive measures". The second sentence of the provision indicates that one of the functions of such disclosure is to enable "the parties to defend their interests".⁶⁰³ This suggests that the manner of "disclosure" should suffice to discharge that function.⁶⁰⁴ Further, the context afforded by Article 12.3, which sets out interested parties' right to inspect the record, suggests that the disclosure under Article 12.8 requires something more than merely placing facts on the record of investigation.⁶⁰⁵ Beyond that, Article 12.8 does not prescribe the method of disclosure. We agree with the panel in Argentina – Ceramic Tiles that Article 12.8 can be "complied with in a number of ways" such as "through the inclusion in the record of documents – such as verification reports, a preliminary determination, or correspondence exchanged between the investigating authorities and individual exporters – which actually disclose to the interested parties the essential facts".⁶⁰⁶

7.239.

We also agree with the panel in that case that the disclosure must convey that the facts being disclosed "are anticipated by the authorities as being those which will form the basis for the decision whether to apply definitive measures".⁶⁰⁷ This is because Article 12.8 requires the disclosure of the essential facts that are "under consideration".⁶⁰⁸ Thus, the disclosure must somehow make the interested party aware that the "essential fact" is "under consideration" by the investigating authority as the authority proceeds towards a final determination.⁶⁰⁹ This does not mean that Article 12.8 requires the disclosure of the reasoning or legal rationale behind the investigating authority's consideration of the fact⁶¹⁰, nor the conclusions of the investigating authority.⁶¹¹ Rather, the focus of Article 12.8 is on the disclosure of the essential facts, and to that extent we agree with India that it is "intended to provide the interested parties with the necessary information to enable them to comment on the completeness and correctness of the facts being considered by the investigating authority, provide additional information or correct perceived errors, and comment on or make arguments as to the proper interpretation of 'those facts'".⁶¹²

7.240.

We now apply this understanding of Article 12.8 to the two aspects of the Section 129 reinvestigation challenged by India. We begin with India's allegation that the USDOC failed to disclose the fact that the GOI placed export restrictions on iron ore in the context of the USDOC's rejection of the NMDC's export prices as a benchmark under Article 14(d). We have already recounted above the procedural context in which this "fact" emerged in the USDOC's "benefit" analysis, and relatedly in the USDOC's "public body" analysis.⁶¹³ In short, the GOI sought to rebut the USDOC's Preliminary Determination of the NMDC as a "public body" by pointing to record evidence that the NMDC's prices were based on commercial considerations.⁶¹⁴ The USDOC examined the exhibits relied upon by the GOI, and found in relation to its "public body" determination that "[c]ontrary to the GOI's assertion that prices are determined by the supply and demand of the market, NMDC described at verification that there are export restrictions in place for high‑grade iron ore with a high Fe content".⁶¹⁵ These exchanges between the USDOC and GOI took place in the "public body" context. However, they are also significant to the USDOC's rejection of the NMDC's export prices in the "benefit" context. This is because the USDOC relied on its assessment of the NMDC as a "public body" to justify its rejection of the NMDC's export prices as a benchmark under Article 14(d) in the Preliminary Determination.⁶¹⁶ It is thus not surprising that this exchange between the GOI and USDOC on export restrictions also emerged in the USDOC's rejection of the NMDC's export prices as a benchmark in the Final Determination, given that the very character of the NMDC as a "public body" had been the USDOC's key consideration in the Preliminary Determination.

7.241.

Indeed, in our view, the USDOC's factual assessment of the NMDC as a "public body" and its rejection of the NMDC's export prices as distorted by the export restrictions are inherently linked.⁶¹⁷ The USDOC identified the potential unreliability of the NMDC's export prices – by virtue of it being the investigated public body – as the factual basis for rejecting those prices in the Preliminary Determination.⁶¹⁸ We consider this to be the "essential fact" that was "under consideration". The GOI in its case brief accepted that the Appellate Body had stated that the "export prices of NMDC need to be used with caution", and further quoted the Appellate Body as stating that an "investigating authority can[not] presume that the export price set by a government provider is inherently unreliable", but rather "[t]his must be proven on the basis of evidence that an investigating authority must examine so that it may base its determination on positive evidence on the record".⁶¹⁹ Thus, the GOI responded to the fact that the NMDC was the putative public body at issue, and more specifically, the fact that its export prices may be unreliable by virtue of its status as a "public body". The GOI's engagement suggests that these facts had been disclosed as the "essential facts" that were "under consideration" in respect of the NMDC's export prices.

7.242.

Further, as we have mentioned⁶²⁰, the same exhibit through which the GOI sought to demonstrate that the NMDC's prices were commercially determined also provided the evidence for the USDOC's finding in response that there were export restrictions applying to the NMDC's exports. When viewed in context, therefore, it was sufficiently clear to the GOI that potential distortions impacting the NMDC's export prices arising from its character as a "public body" were "under consideration" by the USDOC. In our view, the USDOC's reliance on evidence of such distortions in the very exhibit submitted by the GOI cannot manifest a violation of Article 12.8. Therefore, India has not demonstrated that the USDOC acted inconsistently with Article 12.8 of the SCM Agreement on this point.

7.243.

We turn now to the facts regarding the length of time of the NMDC's sales of iron ore, and the extent of diversification of the Indian economy, which we recall are mandatory factors to be taken into account as part of de facto specificity determinations under Article 2.1(c). The United States contends that the mere inclusion of these facts on the record was sufficient to "disclose" them under Article 12.8, in view of certain contextual considerations.⁶²¹ These contextual considerations were as follows: (a) due to the Panel's finding in the original proceedings that the USDOC erred by failing to discuss the length of time and extent of diversification factors, the GOI was aware that the USDOC would need to address those factors at some stage in the reinvestigation⁶²²; (b) these facts were disclosed in the originally‑challenged investigation, and India had the opportunity to comment at that stage⁶²³; and (c) India did in fact address the mandatory length of time and extent of diversification factors in its case brief in the Section 129 reinvestigation, demonstrating that it had the opportunity to defend its interests.⁶²⁴

7.244.

India's case is premised on its assertion that the USDOC failed to analyse the facts regarding: (a) the diversification of the industrial sector in India, and (b) the length of time for which the "provision of iron ore by NMDC programme was in operation, when assessing whether that programme was de facto specific".⁶²⁵ It is clear to us, however, that the USDOC's Preliminary Determination referred to the fact that the NMDC was established in 1958⁶²⁶, which was a key consideration in its "length of time" explanation.⁶²⁷ Likewise, the USDOC's Preliminary Determination referred to multiple industrial activities being undertaken in the Indian economy, including the development of "coal, petroleum oil and atomic minerals", as well as mining iron ore, and domestic steel production to serve increasing consumption "as the country builds out its infrastructure in the coming decades".⁶²⁸ This correlates to the facts ultimately relied upon by the USDOC in its Final Determination concerning the "diversification of the industrial sector in India" covering sectors such as "[n]on‑metallic mineral products", "[r]ubber, plastic, petroleum and coal", "[b]asic metal and alloy industries", and "[m]ining and [q]uarrying".⁶²⁹

7.245.

These facts were not assessed by the USDOC as part of a dedicated discussion of whether the NMDC's sales of high‑grade iron ore were de facto specific. However, in the circumstances of the present claim, we do not consider this to have been necessary in order to comply with Article 12.8 of the SCM Agreement. We recall in this regard that India's claim pertains to the disclosure of facts on the two mandatory factors under Article 2.1(c). This provision requires that "account be taken of" the two mandatory factors, but it is not prescriptive as to the manner in which this is carried out. Indeed, as we have explained earlier, an assessment of these factors can be implicit⁶³⁰, and likewise they can potentially be addressed through other aspects of a determination⁶³¹, e.g. when identifying the features of the financial contribution at issue. Against that background, the USDOC sufficiently disclosed the essential facts that were under consideration for the purposes of its de facto specificity analysis regarding the NMDC's sales of high‑grade iron ore through its reference to the aforementioned evidence in the Preliminary Determination. While these references were in aspects of the "public body" determination for the NMDC and the specificity determination for a different subsidy programme, we recall that Article 12.8 does not require the disclosure of an authority's legal reasoning. Rather, it requires the disclosure of the essential facts under consideration, such that an interested party or interested Member can defend its interests. As we have explained, the Preliminary Determination disclosed sufficiently that the USDOC was considering the fact that the NMDC had been operating as a miner of iron ore since 1958, and that the industrial sector in India was comprised of a number of different activities. It was open to the GOI or any interested party to contest the veracity, accuracy, or completeness of those facts, and seek to correct any errors in relation to those facts and how they were being understood.⁶³² We consider it significant, in that regard, that the GOI did indeed defend its interest by addressing the "length of time" and "extent of diversification" in its case brief.⁶³³ We thus conclude that India has not demonstrated that the USDOC acted inconsistently with Article 12.8 of the SCM Agreement on this point.

7.246.

For all of the foregoing reasons, we find that India has not demonstrated that the USDOC acted inconsistently with Article 12.8 of the SCM Agreement.

7.247.

India claims that the USDOC expanded the scope of the original CVD determination by including new subsidies in the 2004, 2006, and 2007 administrative reviews and in the Section 129 proceedings without showing the existence of a "close link or nexus" between those new subsidies and the ones examined in the original investigation. We will first address India's claims concerning the 2004 to 2007 administrative reviews, and then turn to India's "new subsidies" claim in relation to the USDOC's Section 129 Determination.

7.248.

In this section, we will examine India's claims concerning the alleged failure by the USITC to establish a "close link or nexus" between the subsidies investigated in the original determination and those investigated in the 2004 to 2007 administrative reviews. To do this, we will first summarise the unappealed panel findings in the original proceedings concerning the inclusion of "new subsidies" in the 2004 to 2007 administrative reviews, before turning to the parties' arguments and our evaluation of the matter.

7.249.

In the original proceedings, India claimed that the United States violated, inter alia, Articles 21.1 and 21.2 of the SCM Agreement by examining new subsidies allegations in administrative reviews.⁶³⁴ Before the original panel, India argued that administrative reviews are limited to the correction or re‑examination of the determinations related to subsidization and injury that already exist.⁶³⁵ Accordingly, India held the view that an investigating authority cannot review subsidy programmes that were not examined in the original investigation ("new subsidies"), in the context of an administrative review.⁶³⁶ The original panel rejected India's claim, finding that the scope of an administrative review is not necessarily limited to the specific subsidy programmes that had been formally examined in the original investigation. The panel explained that nothing in Article 21.1 suggests that the term "subsidization" does not encompass newly alleged subsidy programmes.⁶³⁷ Furthermore, the original panel found nothing in Articles 21.1 and 21.2 of the SCM Agreement that would require an investigating authority to consider only whether the original basis for the measure alone justifies the continued imposition of the duties.⁶³⁸ According to the original panel, if there is an allegation that new subsidy programmes benefit the product that was already subject to CVDs and these programmes are countervailable, interested parties may request the investigating authority to take these subsidies into account and to amend the duty level accordingly.⁶³⁹

7.250.

India did not appeal the panel's finding that an investigating authority may examine new subsidy allegations in administrative reviews, nor did it challenge the precise considerations that the USDOC took into account when deciding to examine the new subsidy allegations.⁶⁴⁰ The Appellate Body also confirmed that Articles 21.1 and 21.2 of the SCM Agreement permit an investigating authority to examine new subsidy allegations in the context of an administrative review.⁶⁴¹ In the context of an appeal by India concerning the applicability of inter alia Article 22 to the USDOC's review of new subsidy allegations, the Appellate Body however held that the types of new subsidies that could be properly examined in an administrative review are limited to those with a sufficiently close link or nexus with the subsidies examined in the original investigation.⁶⁴² According to the Appellate Body, several factors could be considered in that regard on a case‑by‑case basis.⁶⁴³ The Appellate Body did not examine whether the contested new subsidies were sufficiently linked with the subsidies investigated in the original investigation, as required by Article 21, because India had not raised any appeal under this provision.⁶⁴⁴

7.251.

In the original WTO proceedings, therefore, India did not specifically claim that the USDOC failed to establish the existence of a "sufficiently close link" or "nexus" between new subsidy programmes in the 2004, 2006, and 2007 administrative reviews and the subsidies that were the subject of the original investigation.

7.252.

India argues before this compliance Panel that the United States violated Articles 21.1 and 21.2 of the SCM Agreement by expanding the scope of the original investigation by 4 new programmes in the 2004 administrative review, 16 new programmes in the 2006 administrative review, and 3 new programmes in the 2007 administrative review.

7.253.

According to India, an investigating authority cannot initiate administrative reviews under Article 21 of the SCM Agreement for the first time against a new subsidy without establishing a "sufficiently close link" or "nexus" between this new subsidy programme and the subsidies that were the subject of the original investigation.⁶⁴⁵ India asserts that, to conclude that a sufficiently close link or nexus exists with the subsidies that constituted the subject of the original determination, an investigating authority should at least examine the following characteristics of "new subsidies": (a) the subsidy programme and its features; (b) the nature of the subsidy; (c) the granting authority of the subsidy; and (d) whether the new subsidy is a replacement programme.⁶⁴⁶ India contends that the USDOC in its Section 129 Determination failed to engage in that kind of exercise with respect to the new subsidy programmes examined in the 2004, 2006, and 2007 administrative reviews.⁶⁴⁷

7.254.

India acknowledges that it did not allege in its appeal which of the factors identified by the Appellate Body should have been considered by the USDOC when examining "new subsidies". In that regard, India argues that its appeal was limited in scope and that, therefore, it is not reagitating the same issue again.⁶⁴⁸ India maintains that the challenged elements are an integral part of the measure taken to comply, because the quantum of benefits accruing to the product concerned in the CVD investigation and subsequent reviews has been redetermined in the Section 129 proceedings. Therefore, India maintains that it is not precluded from challenging the new subsidies included in the 2004, 2006, and 2007 administrative reviews.⁶⁴⁹

7.255.

The United States objects that India is precluded from raising claims before a compliance panel against an unchanged aspect of a measure that was found to be WTO‑consistent in the original proceedings.⁶⁵⁰ In this regard, the United States notes that the original panel rejected India's claims against the examination of new subsidies in administrative reviews.⁶⁵¹ Furthermore, the United States notes that India did not ask the Appellate Body in the original proceedings to find that the USDOC acted in breach of Article 21 by failing to properly examine each of the new subsidy allegations at issue and cannot now bring claims that it should have raised before.⁶⁵² In addition, having failed to make a prima facie case in the original proceedings as regards aspects of a measure that remained unchanged, India cannot relitigate the same claim in compliance proceedings.⁶⁵³ Finally, the United States maintains that the USDOC was not required to analyse whether the new subsidy programmes in the administrative reviews had a sufficient link or nexus with the schemes examined in the original determination, because there was no DSB recommendation requiring such action.⁶⁵⁴ For these reasons, the United States requests the Panel to reject the new subsidies claims concerning the 2004, 2006, and 2007 administrative reviews.

7.256.

The key question is whether India can bring a claim in these compliance proceedings regarding the same subsidies and legal provisions as a claim that the Panel dismissed in the original proceedings, and that was not subsequently appealed.

7.257.

The United States' objection that India's claim was not properly brought in the context of these compliance proceedings is twofold. First, the United States argues that the alleged "new subsidies" examined in the 2004, 2006, and 2007 reviews are unchanged aspects of the original proceedings that were not found to be WTO‑inconsistent. Thus, the United States argues that India failed to make a prima facie case in the original proceedings and cannot relitigate the same claim regarding an unchanged element of the measure in compliance proceedings. Second, the United States argues that India had the opportunity to appeal the panel's findings of non‑inconsistency and opted not to do so. Accordingly, India should not be given an unfair second chance to raise the matter in the context of compliance proceedings. India's main response to the United States' objection, essentially, is that the USDOC redetermined in the compliance proceedings the quantum of benefits accruing to the product concerned and therefore India should not be precluded from challenging the "new subsidies" featuring in the 2004, 2006, and 2007 reviews.

7.258.

We disagree with the United States' argument that India is trying to relitigate the absence of a "sufficient nexus" between the new subsidies countervailed pursuant to the 2004 to 2007 administrative reviews and those examined in the original investigation. In fact, as the Appellate Body recognized, the "sufficient nexus" was not part of the scope of India's appeal. Nor could it be, since the notion of a "sufficiently close link or nexus" between the subsidies investigated in an administrative review and those subject to the original determination first emerged when the Appellate Body report in the original dispute was circulated. Therefore, India could not have raised it at that time. In other words, India cannot be attempting to re‑litigate an issue that it never litigated in the first place.

7.259.

The remainder of the United States' objection, however, is more pertinent. We note that India, in principle, could have appealed the panel's findings and did not. As discussed earlier⁶⁵⁵, unappealed panel findings that are adopted by the DSB must be regarded as the final resolution to a dispute between the parties in respect of the specific claim and the components of the measure that are the subject of that claim.⁶⁵⁶

7.260.

Before the original panel, India claimed that the inclusion of "new subsidies" in the 2004 to 2007 administrative reviews was inconsistent with Articles 21.1 and 21.2 of the SCM Agreement, arguing that the scope of administrative reviews should be limited to subsidies already subject to the original determination. The United States prevailed before the original panel and those findings were not appealed. However, India prevailed on certain other claims concerning the original determination and the administrative reviews. As a result, the USDOC and the USITC initiated Section 129 proceedings, with a view to bringing the measure(s) into conformity with the DSB recommendation. As the DSB recommendation did not concern the consideration of "new subsidies" in the 2004 to 2007 administrative reviews, however, the USDOC was entitled to consider that aspect of its previous determinations as not being WTO-inconsistent, hence not in need of being reassessed.

7.261.

The inclusion in the Section 129 Determination of the "new subsidies" previously investigated in the 2004 to the 2007 reviews is an unchanged aspect of the original measure reviewed in the original WTO proceedings, separable from the measure taken to comply with the DSB recommendation.⁶⁵⁷ As a result, this separable aspect of the original measure cannot and should not be reviewed for the first time by a compliance panel.

7.262.

We note that India could not have anticipated that the Appellate Body would elaborate a new test for the consistency of administrative reviews with Articles 21.1 and 21.2 of the SCM Agreement, suggesting that administrative reviews could only include those new subsidies having a sufficiently close link or nexus with the subsidies subject to the original determination. However, India still had the opportunity to appeal the panel's findings based on various other arguments and did not do so.

7.263.

A different conclusion would imply that the USDOC should have assumed that an aspect of a measure that was found to be WTO‑consistent in unappealed panel findings needed to be amended. Such conclusion would be highly questionable, and at odds with the role assigned by the Members to the WTO dispute settlement system as a central element in providing security and predictability to the multilateral trading system.⁶⁵⁸ Finally, we further note that, in practical terms, a finding of inconsistency at the compliance stage would have the effect of depriving the United States of a reasonable period of time to bring its measure into conformity, and would thus be excessively burdensome.⁶⁵⁹ For the foregoing reasons, we conclude that India's claim concerning the USDOC's investigation of "new subsidies" in the 2004 to 2007 administrative reviews is outside the scope of these compliance proceedings.

7.264.

In this section, we will examine India's claims concerning the alleged inclusion of "new subsidies" in the Section 129 proceedings, different from the subsidies investigated in the original determination and in subsequent administrative reviews. We will first provide an overview of the factual background, before turning to the parties' arguments and our evaluation of the matter.

7.265.

In the original dispute, the panel found that the USDOC did not have a sufficient basis to determine the existence of the "captive mining of iron ore" programme, and that the USDOC therefore acted inconsistently with Article 12.5 of the SCM Agreement.⁶⁶⁰ The panel also found that the USDOC's determination that GOI granted Tata a financial contribution in the form of a lease under the "captive mining of coal" programme lacked a sufficient evidentiary basis and was therefore inconsistent with Article 1.1(a)(1)(iii) of the SCM Agreement.⁶⁶¹

7.266.

The United States launched Section 129 proceedings to revise parts of the original CVD determination and subsequent reviews that were found to be WTO‑inconsistent by the panel and the Appellate Body in the original dispute. With specific regard to India's claim before us, the USDOC re‑evaluated two subsidy schemes on which the original panel had made findings of inconsistency. Since the parties disagree as to whether this exercise led to the investigation of two "new subsidies", distinct from the ones originally investigated in the 2006 administrative review, it is important to summarize the background of the Section 129 USDOC determination and of the underlying 2006 administrative review.

7.267.

In the 2006 administrative review, the USDOC found that the GOI's provision of mining rights of iron ore to Indian steel companies was a countervailable subsidy, because it constituted a good (iron ore) provided by a public entity (GOI) to steel makers for LTAR. The programme was described as the allocation of iron mines to steel makers so that they could extract iron ore (integral to the production of steel) without the intermediation of standalone miners, hence the adjective "captive". The USDOC found that the programme was de facto specific because of the predominant use of iron ore by the steel industry.⁶⁶² The USDOC found evidence of the existence of a national mineral policy in the Dang Report⁶⁶³and in the Hoda Report.⁶⁶⁴ The original panel found this determination to be inconsistent with Article 12.5 of the SCM Agreement, because the USDOC failed to determine the existence of the "captive mining of iron ore" programme on the basis of accurate information.⁶⁶⁵

7.268.

In the Section 129 proceedings, the USDOC re‑examined the record of the investigation and concluded that the provision of mining rights of iron ore was limited to two industries: steel producers and standalone miners. The USDOC relied on the same record evidence as in the 2006 administrative review and continued to characterize the investigated scheme as the provision of a good (iron ore) provided by a public entity (GOI) for LTAR. The USDOC, however, no longer found specificity on the basis of "predominant use" by steel companies, but instead on the limited number of users (steel producers and mining companies). Therefore, the USDOC concluded that the provision of "mining rights of iron ore" was de facto specific, and thus countervailable.⁶⁶⁶ The USDOC referred to the subsidy scheme as "captive mining of iron ore" in the preliminary Section 129 Determination⁶⁶⁷, and then changed the name to "mining rights of iron ore" in the final Section 129 Determination.⁶⁶⁸

7.269.

In the 2006 administrative review, the USDOC investigated the GOI's provision of coal to firms with captive mining rights for LTAR under the Nationalization Act of 1973. The original panel found that the USDOC lacked a "sufficient evidentiary basis" to conclude that Tata was granted a coal mining lease based on the above‑mentioned legislation.⁶⁶⁹ The original panel held:

We observe that there would appear to be sufficient evidence on the USDOC's record for a determination that Tata is presently mining coal under a lease that has validity in Indian law, and could therefore be attributed to the GOI. Provided the relevant requirements of the SCM Agreement are complied with, we see no reason why the provision of coal under that lease could not be countervailed. However, the USDOC's determination that the Coal Mining Nationalization Act/Captive Mining of Coal Programme is de jure specific would obviously not be relevant in this context.⁶⁷⁰

7.270.

In the Section 129 proceeding, the USDOC re‑examined the record evidence, and issued supplemental questionnaires to the interested parties, including the GOI and Tata. The USDOC concluded that the Raja of Ramgarh (the governmental authority at the time) granted Tata the coal mining lease in 1907. When India became independent in 1947, the GOI replaced the Raja of Ramgarh as the governmental authority. The USDOC further found that, under the Bihar Land Reform Act in 1950, the existing leases and subleases including the coal mining lease to Bakaro & Ramgur and the sublease to West Bokaro Ltd. (the predecessor to Tata) were deemed to have been leased by the State Government of Bihar to the leaseholder. The GOI then recognized the validity of all leases issued by the Raja of Ramgarh. Under the MMDR Act of 1957, the GOI became the only entity with the ability to provide leases, requiring that all new mining licences be obtained from the GOI. The USDOC also found that, pursuant to the MMDR Act of 1957, pre‑existing leaseholders could continue to hold their leases and did not need to renegotiate them with the GOI. In short, the USDOC found that the GOI legislated an exemption for pre‑existing leaseholders, allowing Tata to continue to hold the original coal mine lease and replacing the Raja of Ramgarh with the State Government of Bihar as the authority providing the lease.⁶⁷¹ The USDOC thus found that the GOI, in allowing Tata to retain its original lease, provided a financial contribution. The USDOC, based on the evidence before it, concluded that the program was de facto specific.

7.271.

India argues that the United States expanded the scope of Section 129 proceedings by including two new programmes that were not previously subject to the original determination: "mining rights of iron ore"; and "mining of coal".⁶⁷² India submits that an administrative review cannot examine for the first time a new subsidy that does not have a sufficiently close link or nexus with the subsidies countervailed in the original investigation.⁶⁷³ According to India, the USDOC was mandated to examine, at least, the following characteristics: (a) the subsidy programme and its features; (b) the nature of the subsidy; (c) the granting authority; and (d) whether the new subsidy is a replacement programme.⁶⁷⁴ India submits that the United States failed to engage in such an exercise. India thus argues that the "new subsidies" investigated and countervailed in the Section 129 proceedings are completely different from and broader in scope than the "captive mining of iron ore" and the "captive mining of coal", which were countervailed pursuant to the 2006 administrative review.⁶⁷⁵ India also contends that the granting authority for the subsidy programmes subject to the original investigation and the new subsidies investigated and countervailed in the Section 129 proceedings are different, and so is the nature of the subsidies.⁶⁷⁶

7.272.

The United States argues that the Panel should dismiss India's claims concerning the alleged investigation of two new subsidy schemes in the USDOC's Section 129 proceedings on three main grounds. First, the United States maintains that the USDOC did not investigate new subsidies in its Section 129 proceedings.⁶⁷⁷ According to the United States, the Section 129 Determination concerns programmes that were already investigated in the 2006 administrative review⁶⁷⁸, and the USDOC only re‑evaluated certain aspects of those programmes as a result of the original panel's findings.⁶⁷⁹ With regard to "mining rights of iron ore", the USDOC re‑examined the record evidence and decided that India had mining programmes for iron ore that were not limited to captive mining.⁶⁸⁰ The United States argues that the programme concerned the GOI's grant of mining leases of iron ore to the steel industry, which thereby benefitted the same product that was investigated in the original investigation (hot‑rolled carbon steel flat products).⁶⁸¹ In addition, the United States argues that the mining rights of the iron ore programme also involved the granting of a mining lease by the GOI, the government at issue in the original investigation, and benefitted the same product from the original investigation.⁶⁸² Concerning "mining of coal", the USDOC re‑evaluated the record evidence and issued a supplemental questionnaire to Tata and the GOI. Based on a re‑examination of the record evidence, the USDOC established the validity of Tata's coal mining lease.⁶⁸³

7.273.

Second, the United States argues that India has not demonstrated the absence of a "link" or "nexus" between the programmes investigated in the Section 129 proceedings and others that were investigated in the 2006 administrative review.⁶⁸⁴ According to the United States, India only made conclusory statements and failed to make a prima facie case of violation of Articles 21.1 and 21.2 of the SCM Agreement.⁶⁸⁵ Should the Panel consider the two programmes to be "new subsidies", the United States submits that its Section 129 Determination is consistent with Articles 21.1 and 21.2 of the SCM Agreement. According to the United States, the USDOC established the existence of a link or nexus between the "new subsidies" and the programmes investigated in the 2006 administrative review, because they involve the same government, the same responding companies, and the same products.⁶⁸⁶

7.274.

Third, the United States argues that India is proposing an unduly rigid standard to determine whether there exists a sufficiently close link or nexus between the "new" subsidies and the previously investigated ones.⁶⁸⁷ According to the United States, the evaluation should be made on a case‑by‑case basis, and different factors could be potentially taken into account according to the specific circumstances of the case.⁶⁸⁸

7.275.

The key question for this Panel is thus whether "mining rights of iron ore" and "mining of coal" constitute new subsidies, investigated for the first time in the Section 129 Determination.

Hugh McPhail	President
Anthony Abad	Member
Hanspeter Tschaeni	Member

US — Carbon Steel (India)

Documents of the case

Lawyers, other representatives, expert(s), tribunal’s secretary

Recourse to article 21.5 of the DSU by India – Report of the Panel

ABBREVIATIONS

1 INTRODUCTION

1.1 COMPLAINT BY INDIA

1.2 PANEL ESTABLISHMENT AND COMPOSITION

1.3 PANEL PROCEEDINGS

2 FACTUAL ASPECTS

3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS

4 ARGUMENTS OF THE PARTIES

5 ARGUMENTS OF THE THIRD PARTIES

6 INTERIM REVIEW

7 FINDINGS

7.1 GENERAL PRINCIPLES REGARDING TREATY INTERPRETATION, STANDARD OF REVIEW, AND BURDEN OF PROOF

7.1.1 Treaty interpretation

7.1.2 Standard of review

7.1.3 Burden of proof

7.1.4 The scope of compliance proceedings under Article 21.5 of the DSU

7.2 PUBLIC BODY: INDIA'S CLAIMS UNDER ARTICLE 1.1(A)(1) OF THE SCM AGREEMENT

7.2.1 Introduction

7.2.2 The legal and evidentiary standard applicable to the public body enquiry

7.2.3 The USDOC's determination on the NMDC as a public body

7.2.3.1 The USDOC's Preliminary Determination

7.2.3.2 The GOI's case brief in response

7.2.3.3 The USDOC's Final Determination

7.2.3.4 Conclusion

7.2.4 Whether the USDOC erred in its finding that the NMDC performs a governmental function within the legal order of India

7.2.5 Whether the USDOC erred in its assessment of the Miniratna status of the NMDC in respect of establishing "meaningful control" by the GOI

7.2.5.1 Whether the USDOC accorded "due significance" to record evidence on Miniratna status and its associated autonomy

7.2.5.2 Whether the USDOC erred by failing to seek or accept additional evidence on the legal implications of Miniratna status

7.2.5.3 Whether the "new factual information" can be taken into account by the Panel

7.2.5.4 Conclusion on Miniratna status

7.2.6 Whether the USDOC erred in relation to the export restraints applying to the NMDC

7.2.7 Whether the USDOC erred in finding that the Directors (appointed by the GOI) hold price negotiations for the sale of iron ore

7.2.8 Conclusion on India's claims under Article 1.1(a)(1) of the SCM Agreement

7.3 BENEFIT: INDIA'S CLAIMS UNDER ARTICLE 14(D) OF THE SCM AGREEMENT

7.3.1 The legal standard applicable to "benefit" determinations under Article 14(d) of the SCM Agreement

7.3.2 Whether the USDOC applied an incorrect legal standard in rejecting the domestic pricing information

7.3.3 Whether the USDOC erred in its factual finding that the data in the association price chart was "provisional or estimated"

7.3.4 Whether the USDOC erred because its examination of the domestic pricing information was neither objective nor based on coherent reasoning

7.3.5 Whether the USDOC erred by failing to explain adequately the reasons for rejecting the Tata price quote on the basis of disclosing confidential data

7.3.6 Whether the USDOC erred by failing to explain adequately its reliance on the prices reported in the Tex Report as the appropriate benchmark

7.3.7 Whether the USDOC erred by rejecting NMDC export prices in favour of Australian/Brazilian world prices

7.3.8 Conclusion

7.4 BENEFIT: INDIA'S CLAIMS UNDER ARTICLE 14(B) OF THE SCM AGREEMENT

7.5 SPECIFICITY: INDIA'S CLAIMS UNDER ARTICLE 2.1(C) OF THE SCM AGREEMENT

7.5.1 Whether the USDOC erred in its specificity assessment for the NMDC's sales of high‑grade iron ore

7.5.2 Whether the USDOC erred in its finding that mining leases for iron ore were de facto specific

7.5.3 Whether the USDOC erred in its consideration of mandatory factors under Article 2.1(c) in respect of "mining leases for iron ore" and "mining leases for coal"

7.6 SOLICITING AND ACCEPTING NEW EVIDENCE IN THE REINVESTIGATION: INDIA'S CLAIMS UNDER ARTICLE 12.1 OF THE SCM AGREEMENT

7.7 DISCLOSURE OF ESSENTIAL FACTS: INDIA'S CLAIMS UNDER ARTICLE 12.8 OF THE SCM AGREEMENT

7.8 NEW SUBSIDIES: INDIA'S CLAIMS UNDER ARTICLES 21.1 AND 21.2 OF THE SCM AGREEMENT

7.8.1 Introduction

7.8.2 India's "new subsidies" claims concerning the 2004, 2006, and 2007 administrative reviews

7.8.2.1 Original proceedings

7.8.2.2 The Panel's evaluation of India's claim regarding the inclusion of "new subsidies" in the 2004, 2006, and 2007 reviews

7.8.3 "New subsidies" in the Section 129 Determination

7.8.3.1 Factual background

7.8.3.2 The Panel's evaluation of India's "new subsidies" claims concerning the Section 129 proceedings