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ARB.5.1 General back to top
ARB.5.1.1 Japan — Alcoholic Beverages II, para. 11
(WT/DS8/15, WT/DS10/15, WT/DS11/13)
… Article 21(3)(c) of the DSU also stipulates, however, that
the “reasonable period of time” may be shorter or longer than 15
months, depending upon the “particular circumstances”. The term, “particular
circumstances”, is not defined in the DSU.
ARB.5.1.2 Japan — Alcoholic Beverages II, para. 27
(WT/DS8/15, WT/DS10/15, WT/DS11/13)
As stated in Article 3(2) of the DSU, the dispute settlement
system of the WTO is a central element in providing security and
predictability to the multilateral trading system. Therefore, all WTO
Members have a strong interest in prompt compliance with and full
implementation of the recommendations and rulings of the DSB. This
interest is clearly reflected in the provisions of the DSU, and
in particular in Article 21(3)(c), which stipulates that a “reasonable
period of time” for implementation should not exceed 15 months unless
there are “particular circumstances” justifying a longer or shorter
period. In this case, I am not persuaded that the “particular
circumstances” advanced by Japan and the United States justify a
departure from the 15-month “guideline” either way. …
ARB.5.1.3 Australia —
Salmon, para. 38
(WT/DS18/9)
It has been pointed out that the arbitrator is not obliged to grant
15 months as the reasonable period for implementation in all cases. “Particular
circumstances” justifying a longer or shorter period must be taken
into account on a case-by-case basis. In the present case, there are
certain considerations which persuade me that the reasonable period of
time should be significantly less than 15 months. …
ARB.5.1.4 Chile — Alcoholic Beverages, para. 39
(WT/DS87/15, WT/DS110/14)
The concept of reasonableness, which is, of course, built into the
notion of “a reasonable period of time” for implementation,
inherently involves taking into account the relevant circumstances. In
some cases these circumstances may be singular or few in number but in
other cases they may be multiple. Determination of a “reasonable
period of time” is not, in principle, appropriately carried out by
ascribing decisive or exclusive relevance to one single or even a few a
priori factors and eschewing consideration of everything else as
non-pertinent. …
ARB.5.1.5 Canada — Pharmaceutical Patents, para. 48
(WT/DS114/13)
The “particular circumstances” mentioned in Article 21.3 are,
therefore, those that can influence what the shortest period possible
for implementation may be within the legal system of the implementing
Member. Conceivably, several such “particular circumstances”,
depending on the facts, could be relevant to a case such as the one
before me.
ARB.5.1.6 Canada — Pharmaceutical Patents, para. 52
(WT/DS114/13)
… There may well be other “particular circumstances” that may
be relevant to a particular case. However, in my view, the “particular
circumstances” mentioned in Article 21.3 do not include factors
unrelated to an assessment of the shortest period possible for
implementation within the legal system of a Member. Any such unrelated
factors are irrelevant to determining the “reasonable period of time”
for implementation. For example, as others have ruled in previous
Article 21.3 arbitrations, any proposed period intended to allow for the
“structural adjustment” of an affected domestic industry will not be
relevant to an assessment of the legal process. The determination of a
“reasonable period of time” must be a legal judgement based on an
examination of relevant legal requirements.
ARB.5.1.7 Canada — Autos, paras. 54-55
(WT/DS139/12, WT/DS142/12)
Canada has placed great emphasis on the “significant implications”
that implementation of the DSB’s recommendations in this case will
have for the “administration of Canada’s customs regime”. …
Regardless of Canada’s specific argument on this issue, I wish to
emphasize that factors unrelated to an assessment of the shortest period
of time possible for a Member to implement, within its legal system, the
recommendations and rulings of the DSB in a particular case are
irrelevant to determining the “reasonable period of time” under
Article 21.3(c) of the DSU. While it might be more convenient for Canada
to implement the DSB’s recommendations in this case on the same
timeline as it has planned for the reform of its customs administration
regime, this factor is not relevant in determining the “shortest
period possible” within Canada’s legal system for implementation of
the DSB’s recommendations. … the determination of the “reasonable
period of time” for implementation must be a legal judgment based on
an examination of relevant legal requirements.
ARB.5.1.8 US — 1916 Act, para. 40
(WT/DS136/11, WT/DS162/14)
The United States also urges me to take account of the “additional
special circumstances” involved in this case, that is, the need for a
period of transition to a new President, a new Administration, and a new
Congress, and the accompanying shifts in the balance of power between
the two principal political parties in the United States. Even allowing
for these unusual circumstances, I note that what is significant for the
case at hand is that the first session of the 107th United States
Congress has been in progress since 3 January 2001. It is, therefore,
possible for the United States to introduce a legislative proposal and
have it passed by the Congress as speedily as possible, using, as I have
stated earlier, all the flexibility available within its normal
legislative procedures.
ARB.5.1.9 Canada — Patent Term,
paras. 59-60
(WT/DS170/10)
While Canada invokes the controversial character of any amendment to
its Patent Act which will have an impact on the Canadian health
care system, the United States emphasizes that under Canada’s
parliamentary system, the Government of Canada controls the majority in
both Houses of Parliament, the House of Commons and the Senate.
According to the United States, with this majority, the government
controls the legislative process, and sets the timetable for both Houses
of Parliament from start to finish; the Government of Canada can
essentially pass any legislation it wishes in whatever time it likes.
It may well be possible that Canada’s political system and the
actual distribution of seats among the political parties in Canada’s
Parliament facilitate the passage of legislative initiatives taken by
the present Canadian government. I am, however, very reluctant to take
these factors into account in determining the “reasonable period of
time”. These factors vary from country to country, and from
constitution to constitution. Even within a given country, they will
change over time. In addition, their evaluation will often be difficult
and highly speculative. I also note that such factors have never been
considered as “particular circumstances” in any of the earlier
awards under Article 21.3(c) of the DSU. Thus, the political factors
mentioned in the preceding paragraph, and invoked by the United States
in support of its request for a “reasonable period of time” of six
months, are not relevant to my task.
ARB.5.1.10 Chile — Price Band System, para. 34
(WT/DS207/13)
Article 21.3(c) provides for an arbitrator a “guideline” of a
maximum of 15 months from the date of adoption of the panel and
Appellate Body reports when establishing a “reasonable period of time”
for implementation. Notwithstanding this “guideline”, I must
ultimately be informed, as Article 21.3(c) instructs, by the “particular
circumstances” of a given case, which may counsel in favour of shorter
or longer periods. …
ARB.5.1.11 Japan — DRAMs (Korea) (Article 21.3(c)), para. 51
(WT/DS336/16)
… due process is a flexible concept to be applied to the specific
requirements of the case — in this case, the process of implementing
DSB rulings. A balance must be struck between respecting due process
rights of interested parties and the promptness required in
implementation. In determining that balance, I note that considerable
opportunity was already afforded to interested parties to participate in
the original investigation conducted by the [Japan’s investigating
authorities]. It seems then that it would be appropriate to provide a
shorter time to such interested parties in the context of an
investigation that is far more limited in scope, and which has been
initiated to implement DSB recommendations and rulings.
ARB.5.1.12 Colombia —
Ports of Entry (Article 21.3(c)), para.
87
(WT/DS366/13)
… I do not attribute significance to steps such as the
implementation of the revised measures into Colombia’s computerized
system of customs control and the training of DIAN officials to
familiarize them with the revised customs control mechanism. These
particular steps seem consequential, rather than prerequisites, to the
enactment of Colombia’s modified measures. In this context, I concur
with the statement of the arbitrator in Canada — Pharmaceutical
Patents that “the determination of a ‘reasonable period of time’
must be a legal judgement based on an examination of relevant legal
requirements” for the enactment of the implementing measures. Colombia’s
component steps of incorporating its revised measures into computerized
system of customs control and the training of officials in the new
system, are merely derivative, or consequential, upon the completion of
the legal process necessary to the enactment of the implementing
measures, and thus, in my view, do not justify a longer period of time
for implementation.
ARB.5.2 Actions taken since DSB adoption of
report(s) back to top
ARB.5.2.1 US — Section 110(5) Copyright Act, para. 46
(WT/DS160/12)
… Article 21.3(c) makes clear that the “reasonable period of time”
for implementation is measured as from the “date of adoption of a
panel or Appellate Body report”. I recall that Article 21.1
establishes that “prompt compliance” is essential in order to ensure
effective resolution of disputes to the benefit of all Members. Clearly,
timeliness is of the essence. Thus, an implementing Member must use the
time after adoption of a panel and/or Appellate Body report to begin to
implement the recommendations and rulings of the DSB. Arbitrators will
scrutinize very carefully the actions an implementing Member takes in
respect of implementation during the period after adoption of a panel
and/or Appellate Body report and prior to any arbitration proceeding. If
it is perceived by an arbitrator that an implementing Member has not
adequately begun implementation after adoption so as to effect “prompt
compliance”, it is to be expected that the arbitrator will take this
into account in determining the “reasonable period of time”.
ARB.5.2.2 Chile — Price Band System, paras. 43, 45
(WT/DS207/13)
… A Member’s obligation to implement the recommendations and
rulings of the DSB is triggered by the DSB’s adoption of the relevant
panel and/or Appellate Body reports. Although Article 21.3 acknowledges
circumstances where immediate implementation is “impracticable”,
in my view the implementation process should not be prolonged through a
Member’s inaction (or insufficient action) in the first months
following adoption. In other words, whether or not a Member is able to complete
implementation promptly, it must at the very least promptly commence
and continue concrete steps towards implementation. Otherwise,
inaction or dilatory conduct by the implementing Member would exacerbate
the nullification or impairment of the rights of other Members caused by
the inconsistent measure. It is for this reason that arbitral awards
under Article 21.3(c) calculate “reasonable period[s] of time” as
from the date of adoption of panel and/or Appellate Body reports. …
…
…I realize the value of thorough pre-legislative activities,
particularly so as to ensure passage of final legislation and thereby
achieve “full implementation”. I also recognize that consultations,
discussions and deliberations, by their very nature, are indeterminate
and cannot be subject to arbitrary time limits, particularly because the
extensiveness of these activities may change with each measure in issue.
Nevertheless, for purposes of calculating a “reasonable period of time”
under Article 21.3(c), such activities should not be assumed to be
without reasonable limits. I do not suggest that Chile’s
pre-legislative activities in this case should necessarily have
concluded by this time; but, in my view, this phase should reasonably
have proceeded further than it has.
ARB.5.2.3 EC — Chicken Cuts, para. 66
(WT/DS269/13, WT/DS286/15)
… The European Communities acknowledged during the oral hearing
that, four months after the adoption of the recommendations and rulings
of the DSB, it had not yet taken any concrete steps toward
implementation by formulation of the proposed Regulation. Based on the
European Communities’ submission, all that seems to have occurred thus
far is internal discussions within the European Communities. Mere
discussion is not implementation. There must be something more to
evidence that a Member is moving toward implementation. I therefore
agree with Brazil and Thailand that this failure to commence
implementation of the DSB’s recommendations and rulings is a factor
that I should take into account in determining the reasonable period of
time for implementation.
ARB.5.2.4 Colombia — Ports of Entry (Article 21.3(c)), paras.
79-80
(WT/DS366/13)
… I should take into account any action or inaction by Colombia in
the period of time comprised between the date of adoption of the Panel
Report by the DSB and the initiation of these arbitration proceedings
when determining the reasonable period of time for implementation.
Since the adoption of the Panel Report, Colombia has established an
Inter- Institutional Working Group (Grupo de Trabajo
Interinstitucional), composed of representatives of the Ministry of
Trade, Industry and Tourism, and of the DIAN, to evaluate how to
implement the recommendations and rulings of the DSB. This initiative,
in my opinion, goes beyond mere “internal discussions”, as argued by
Panama, insofar as it establishes an institutional framework responsible
for proposing and coordinating an administrative plan of action for
implementation. As noted by a previous arbitrator, “consultations
within governmental agencies are typically a concomitant of lawmaking in
contemporary polities”, and therefore should be taken into account
when fixing the reasonable period of time for implementation. Therefore,
I consider the work of such Inter-Institutional Working Group relevant
to my determination.
ARB.5.3 Complexity of implementing measures
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ARB.5.3.1 US — 1916 Act, para. 36
(WT/DS136/11, WT/DS162/14)
At the oral hearing, I enquired whether, although it is not within
the mandate of an arbitrator to determine or suggest the precise means
of implementation, it is necessary for the arbitrator to know the scope
and complexity of the implementing measure, as distinguished from the
complexity of the Member’s legislative process, in order to assess the
“reasonable period of time” required to put in place the proposed
implementing measure. … The United States explained, however,
that regardless of the complexity of the legislation required to
implement the rulings and recommendations of the DSB, this would be
taken care of through the normal legislative process, and the United
States does not argue for or seek any additional time on the basis of
the scope, content or complexity of the implementing legislation in this
case. In view of the explicit acknowledgement of the United States that
it is not relying on the complexity of the implementing legislation as a
particular circumstance to justify or lengthen the period of time needed
for implementation in this case, it is not necessary for me to examine
this issue.
ARB.5.3.2 Canada — Pharmaceutical Patents, para. 50
(WT/DS114/13)
Likewise, the complexity of the proposed implementation can be
a relevant factor. If implementation is accomplished through extensive
new regulations affecting many sectors of activity, then adequate time
will be required to draft the changes, consult affected parties, and
make any consequent modifications as needed. On the other hand, if the
proposed implementation is the simple repeal of a single provision of
perhaps a sentence or two, then, obviously, less time will be needed for
drafting, consulting, and finalizing the procedure. To be sure,
complexity is not merely a matter of the number of pages in a proposed
regulation; yet it seems reasonable to assume that, in most cases, the
shorter a proposed regulation, the less its likely complexity.
ARB.5.3.3 US — Hot-Rolled Steel, para. 30
(WT/DS184/13)
… I do not believe that an arbitrator acting under Article 21.3(c)
of the DSU is vested with jurisdiction to make any determination of the
proper scope and content of implementing legislation, and hence do not
propose to deal with it. The degree of complexity of the contemplated
implementing legislation may be relevant for the arbitrator, to the
extent that such complexity bears upon the length of time that may
reasonably be allocated to the enactment of such legislation. But the
proper scope and content of anticipated legislation are, in principle,
left to the implementing WTO Member to determine.
ARB.5.3.4 US — Offset Act (Byrd Amendment), para. 60
(WT/DS217/14, WT/DS234/22)
Similarly, the need to distinguish, in the light of Panel and the
Appellate Body findings in this dispute, between WTO-consistent and WTO-inconsistent
implementation options would appear to be the typical content, and
concomitant aspect, of every legislative process aiming at implementing
recommendations and rulings of the DSB. I do agree with previous
arbitrators that, in principle, the complex nature of implementing
measures can be a relevant factor for the determination of the
reasonable period of time. Nevertheless, I do not believe that the need
to take into account international treaty obligations in the process of
drafting implementing legislation, in and of itself, gives rise to the
kind of complexity that would warrant additional time for
implementation. Each and every piece of legislation enacted with
a view to implementing recommendations and rulings of the DSB must be
designed and drafted in the light of the implementing Member’s rights
and obligations under the covered agreements. If the need to distinguish
between WTO consistent and WTO-inconsistent implementation options were
to qualify, per se, as “complexity”, and, therefore, were to
give rise to “particular circumstances” relevant for the
determination of the reasonable period of time, then every implementation
measure under consideration in proceedings pursuant to Article 21.3(c)
would have to be considered complex. In other words, “complexity”
would not be a “particular circumstance”; rather, it would be a
standard aspect of every implementation.
ARB.5.3.5 US — Gambling,
paras. 46-47
(WT/DS285/13)
… I attach some significance to the fact that, as the United States
explained at the oral hearing, the field of internet gambling is one
that is highly regulated in the United States. A myriad of
interconnected and overlapping laws apply to these activities, including
state and federal laws, and criminal and civil statutes. For this
reason, a careful examination of how proposed legislation will impact
the existing regulatory regime will be a necessary part of the process
of adopting implementing legislation in this dispute.
I am also conscious of the fact that any legislation adopted by the
United States will inevitably … bear on questions of public morals and
public order. It seems to me that, within the field of public morals and
public order, only prohibitions are simple. In other words, to the
extent that the United States may consider authorizing any form of
internet gambling or wagering, this will increase the complexity of any
legislative solution. The more such activities are authorized, the
greater lengths the legislator will have to go to in order to ensure
that sufficient safeguards are in place to make the system consistent
with, and acceptable under, prevailing standards of public morals and
public order. This is, in my view, separate from the question of
contentiousness. However, the United States has not, in this proceeding,
explained in any precise manner how it intends to implement the
recommendations and rulings of the DSB. … In the absence of any
more specific information from the United States on this issue, I do not
consider the fact that the legislative activity called for in this case
will inevitably touch on questions of public morals and public order to
be a “particular circumstance” affecting my determination of the
reasonable period of time.
ARB.5.3.6 US — Stainless Steel (Mexico) (Article 21.3(c)),
paras. 60-61
(WT/DS344/15)
… For the United States, compliance in this case is complex, mainly
because terminating simple zeroing in periodic reviews would imply
changes in its duty assessment methodology. …
In principle, the elimination of simple zeroing in periodic reviews
is distinct from the issue of the “allocation of antidumping duties
among the importers for assessment purposes”. The former can clearly
be carried out by administrative means. In the real world, because it
involves imposition of differing levels of financial liability among the
importers, depending on the circumstances, the latter may be easier to
bring about on a durable basis by a legislative enactment. In the real
world too, however, the elimination of simple zeroing in periodic
reviews is closely related to the issue of the allocation of final
anti-dumping duties among importers; implementation of the former might
well be tied to reaching satisfactory resolution of the complexities of
allocation of anti-dumping duties among the importers. Accordingly, the
technical complexities of allocation of duties among importers cannot
casually be disregarded but, to the contrary, may legitimately be
considered a particular circumstance affecting the determination of a
reasonable time for abolition of the methodology of simple zeroing in
periodic reviews. …
ARB.5.3.7 Colombia — Ports of Entry (Article 21.3(c)), para. 97
(WT/DS366/13)
… I am not persuaded that modifying different provisions of the
same legal instruments cannot be done with the same legal process
regardless of whether it concerns a few or many provisions of that legal
instrument. To the contrary, the fact that amendments to the WTO-inconsistent
measures may impact other provisions of the legal instruments in which
they are contained seems to be part and parcel of any regulatory
decision-making process.
ARB.5.4 Complexity of implementation process
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ARB.5.4.1 EC — Bananas III, para. 19
(WT/DS27/15)
The Complaining Parties have not persuaded me that there are “particular
circumstances” in this case to justify a shorter period of time than
stipulated by the guideline in Article 21.3(c) of the DSU. At the same
time, the complexity of the implementation process, demonstrated by the
European Communities, would suggest adherence to the guideline, with a
slight modification, so that the “reasonable period” of time for
implementation would expire by 1 January 1999.
ARB.5.4.2 EC — Hormones, para. 39
(WTDS26/15, WT/DS48/13)
… It would not be in keeping with the requirement of prompt compliance
to include in the reasonable period of time, time to conduct studies or
to consult experts to demonstrate the consistency of a measure
already judged to be inconsistent. That cannot be considered as
“particular circumstances” justifying a longer period than the
guideline suggested in Article 21.3(c). This is not to say that the
commissioning of scientific studies or consultations with experts cannot
form part of a implementation process in a particular case. However,
such considerations are not pertinent to the determination of the
reasonable period of time.
ARB.5.4.3 EC — Hormones,
paras. 41-42
(WTDS26/15, WT/DS48/13)
To grant the European Communities a further two years, from the date
of adoption by the DSB of the Appellate Body Report and Panel Reports,
to conduct the risk assessment that was required as of 1 January 1995
would not be consistent with the provisions of the DSU requiring prompt
compliance with DSB recommendations and rulings, nor with the
obligations of the European Communities under the SPS Agreement.
For the foregoing reasons, it would not be proper to include in the
reasonable period of time granted to the European Communities under
Article 21.3(c) of the DSU, an initial phase of two years for the
conduct and completion of scientific studies to determine if there is a
risk to human health from hormone-treated beef.
ARB.5.4.4 US — 1916 Act, para. 38
(WT/DS136/11, WT/DS162/14)
In my view, factors such as the volume of legislation brought before
the United States Congress, and the high percentage of bills that never
become law, are not relevant to my determination of the “reasonable
period of time” for implementation of the recommendations and rulings
of the DSB in this case. Information of this nature may be of general
interest in examining how a legislative system operates in practice, not
only in the United States, but in many other countries as well. What is
relevant for my determination in this case is the treaty obligations
explicitly undertaken by Members pursuant to the covered agreements. …
In view of these fundamental obligations assumed by the Members of
the WTO, factors such as the volume of legislation proposed, and the
high percentage of bills that never become law, cannot be considered to
extend the period of time needed for implementation. As for the argument
that legislation passed by the United States Congress is usually passed
at the end of the legislative session, this again may be the usual
practice in the United States Congress, but it is not the outcome of a
legal requirement. Where an international treaty obligation is required
to be complied with in the shortest period of time possible, as in this
case, this cannot be a relevant consideration for extending the period
of implementation.
ARB.5.4.5 US — 1916 Act, para. 39
(WT/DS136/11, WT/DS162/14)
Turning to the complexity of the United States’ legislative
process, I note that the United States has explained, in sufficient
detail, the multiple and time-consuming steps involved in the enactment
of legislation within the specific context of the legislative system of
the United States. It is generally accepted that certain of these steps
are not required by law, and that the majority of these steps are not
subject to compulsory minimum time limits. In other words, the United
States’ legislative process, while complex, is characterized by a
considerable degree of flexibility. That this flexibility is exercised
to achieve the prompt passage of legislation when this is considered
necessary and appropriate is revealed by the fact that bills have been
passed by the United States Congress within short periods of time, using
its “normal” legislative process. The United States has stated that
it “will make every effort to promptly implement the DSB’s
recommendations and rulings” in this case. Since this is a case where
the United States has to enact a piece of legislation to bring it into
compliance with its international treaty obligations under the covered
agreements, the United States Congress may reasonably be expected to use
all the flexibility available within its normal legislative procedures
to enact the required legislation as speedily as possible.
ARB.5.4.6 Chile — Price Band System, para. 38
(WT/DS207/13)
Chile identifies a “pre-legislative” phase followed by an
extensive lawmaking procedure through which any law implementing the DSB’s
recommendations and rulings must pass. The multi-step process of
legislating, which involves the participation of several legislative
committees with at least two rounds of review (“general” and “specific”,
as labelled by Chile) by not only those committees, but also by each
house of Congress itself, highlights the complexity of the process Chile
will undergo during implementation. …
ARB.5.4.7 Chile — Price Band System, para. 39
(WT/DS207/13)
… I am also conscious of the fact that most steps in Chile’s
lawmaking procedure, while required by law, are not subject to statutory
or constitutional time limits. Therefore, there appears to be a certain
amount of “flexibility” within the normal legislative process,
particularly in terms of steps such as the “general discussions” and
Presidential endorsement, that Chile may fairly be expected to utilize
in good faith so that it may promptly develop a new law repealing or
modifying the PBS and otherwise ensure that it conforms with its WTO
obligations.
ARB.5.4.8 Chile — Price Band System, para. 42
(WT/DS207/13)
The absence of a requirement under Chile’s laws to engage in
pre-legislative consultations is not sufficient, in my view, to dismiss
the relevance of such consultations for purposes of this Article 21.3(c)
arbitration. As other arbitrators have noted, and as Chile has
emphasized, the consultation phase is important for laying the
foundation upon which a proposed law passes through the legislative
process. Although not mandated by law, consultations within government
agencies as well as with the affected sectors of society are typically a
concomitant of lawmaking in contemporary polities, and such
consultations should be taken into account when fixing a “reasonable
period of time” for implementation.
ARB.5.4.9 Chile — Price Band System, para. 52
(WT/DS207/13)
Nevertheless, the relevant laws of Chile, namely, the Constitution
and Law 18.918, appear to enable Chile to resort to this “extraordinary”
legislative procedure when proposing a law to modify the PBS. Because of
the significant passage of time since adoption of the panel and
Appellate Body reports in this case, and the lack of progress made thus
far in implementing the recommendations and rulings of the DSB, Chile
may itself decide to resort to the “urgency procedure” at certain
stages of the legislative process. Chile recognizes that it must
implement those recommendations and rulings in good faith towards other
Members of the WTO. It must therefore do everything it reasonably can to
act expeditiously in this process of implementation. Perhaps this will
call for Chile to invoke its “urgency procedure”. Perhaps it will
not. On the facts of this case and the evidence before me, I believe
that whether and at what stages Chile utilizes the “urgency procedure”
are questions for Chile to determine for itself. But, whatever it does,
Chile must implement the recommendations and rulings of the DSB
promptly.
ARB.5.4.10 US — Offset Act (Byrd Amendment), para. 64
(WT/DS217/14, WT/DS234/22)
I am aware that the component steps of the United States’
legislative process, as pointed out by the United States, are numerous
and potentially time-consuming. However, I note that legislative bills
have been passed by the United States Congress within short periods of
time; for instance, the CDSOA itself appears to have been passed in a
period of only 25 days. Moreover, the United States has described itself
as a “strong advocate … of prompt compliance”. Finally, I
also agree with the arbitrators in US — Section 110(5) Copyright
Act and in US — 1916 Act, respectively, who noted that,
where the United States is obliged to enact a piece of legislation in
order to bring itself into compliance with its obligations under an
international treaty, the United States Congress may be expected to take
advantage of the flexibility available within the legislative procedures
to implement such legislation as speedily as possible.
ARB.5.4.11 EC — Tariff Preferences, para. 53
(WT/DS246/14)
To start with the European enlargement, the European Communities
argues that considerable time will be needed to translate into the 20
official languages certain instruments connected with implementation. I
agree that this circumstance is likely to increase the period of time
reasonably required to complete certain steps in the implementation
process. Therefore, I have taken this into account in my determination.
I also agree with the European Communities that, if a member State of
the European Union requested verification that the Council adopted the
implementing regulation by a qualified majority representing at least
62% of the population of the European Union, this could add to the time
required for implementation.
ARB.5.4.12 EC — Tariff Preferences, para. 54
(WT/DS246/14)
I turn to the election of a new European Parliament in June 2004 and
the commencement of a new Commission on 1 November 2004. According to
the European Communities’ estimates, the Commission will complete its
proposal on a Council regulation modifying the Drug Arrangements, and
that proposal will be transmitted to the European Parliament, in October
2004. The fact that a new Commission takes charge on 1 November 2004
would not appear to increase the time required to complete that
proposal. Similarly, if the Commission’s proposal is transmitted to
the European Parliament in October 2004, this should allow sufficient
time for the European Parliament to become “operational” before it
examines the proposal.
ARB.5.5 Relevance of contentiousness
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ARB.5.5.1 Chile — Alcoholic Beverages, para. 43
(WT/DS87/15, WT/DS110/14)
Two aspects of the Chilean legislative process may be usefully noted.
One is the set of practices designated as the “pre-legislative”
phase of the law-making process in Chile, during which phase a specific
revised tax scheme is developed and proposed on the basis of
consultations and technical assessments. These consultations will
include discussions aimed at building and organizing the broad support
necessary for the adoption of the proposed bill, by both Chambers of the
National Congress. The duration of this “pre-legislative” phase may
differ from bill to bill; no maximum period is set by law but it is
clearly an important phase if the success of the legislative effort is
important. …
ARB.5.5.2 Canada — Pharmaceutical Patents, para. 58
(WT/DS114/13)
… I see nothing in this proposed regulatory change that can be
described as complex. What is more, in this case, comments from the
public could not be expected to result in much alteration of the one
substantive sentence of Canada’s proposed regulatory change, which
merely repeals the existing regulation. After all, how many other ways
could this one sentence be written? Likewise, in this case, any
consideration of any changes that might conceivably be needed in the
solitary substantive sentence of the proposed regulatory change could
not be expected to take very long. … If this proposed
regulatory change were more complex, I might reach a different
conclusion. Yet it is not complex at all. And, given the sheer
simplicity of the wording, function and purpose of this proposed
regulation, I consider it implausible that this particular
implementation step in this case should take as much time as claimed by
Canada.
ARB.5.5.3 Canada — Pharmaceutical Patents, para. 60
(WT/DS114/13)
… I see nothing in Article 21.3 to indicate that the supposed
domestic “contentiousness” of a measure taken to comply with a WTO
ruling should in any way be a factor to be considered in determining a “reasonable
period of time” for implementation. …
ARB.5.5.4 US — Section 110(5) Copyright Act,
paras. 41-42
(WT/DS160/12)
… one of the factors listed by the United States as support for the
period it has proposed is not relevant for the determination of a “reasonable
period of time” for implementation. The United States refers to the
“controversy” surrounding the legislation, and the “divergent
views of stakeholders”. …
… any argument as to the “controversy”, in the sense of
domestic “contentiousness”, regarding the measure at issue is not
relevant. … While I agree that this is an important issue, I do not
see how it will add any additional time to the legislative
process, as the content of the legislation effecting
implementation is precisely the issue that Congress will decide through
its normal procedures.
ARB.5.5.5 Canada — Patent Term, para. 49
(WT/DS170/10)
I now turn to Canada’s main argument in support of its request for
a “reasonable period of time” of 14 months and two days. I recall
Canada’s observation that the required amendment of its Patent Act will
have an economic impact on Canada’s health care system, so that it can
be expected that there will be significant debate which is likely to be
divisive, and that, therefore, the Government of Canada will have to
carefully manage the legislative process. …
ARB.5.5.6 Canada — Patent Term, para. 53
(WT/DS170/10)
The issue raised by Canada is of great importance, both from the
point of view of the implementation of recommendations and rulings of
the DSB, that is, the respect of international treaty obligations, and
from the point of view of fundamental principles of the democratic
process. I do not believe, however, that I have to decide the
controversy between the parties for the implementation through
legislation in general. My only task is to determine the “reasonable
period of time” for the case before me. My reasoning, therefore,
applies to this case only.
ARB.5.5.7 Canada — Patent Term, para. 58
(WT/DS170/10)
The treatment of existing patents which benefit from a longer period
of protection than the period prescribed by Article 33 of the TRIPS
Agreement may be highly controversial and closely connected
politically with the amendment of Article 45 of the Canadian Patent
Act. However, as I have already said, this issue is outside the
strict boundaries of the implementation of the recommendations and
rulings of the DSB. Consequently, the “contentiousness” of this
issue is certainly not a “particular circumstance” which I should
take into account in determining the “reasonable period of time” in
the present case. Therefore, Canada cannot invoke legislative choices
and the likely divisiveness of the debate in the Canadian Parliament to
justify its request for a “reasonable period of time” of 14 months
and two days.
ARB.5.5.8 US — Hot-Rolled Steel, para. 38
(WT/DS184/13)
… Even so, it does not seem unreasonable to infer that the formal
proceedings are likely to be carried out with more dispatch in view of
the “pre-legislative”, informal consultations already undertaken. In
Chile — Taxes on Alcoholic Beverages — Arbitration under Article
21.3(c) of the DSU (“Chile — Alcoholic Beverages”), the
Arbitrator noted that the “pre-legislative” phase is “an important
phase if the success of the legislative effort is important”.
ARB.5.5.9 Chile — Price Band System, paras. 47-48
(WT/DS207/13)
… it has been rightly said that “[a]ll WTO disputes are ‘contentious’
domestically at least to some extent; if they were not, there would be
no need for recourse by WTO Members to dispute settlement.” Simple
contentiousness may thus not be a sufficient consideration under Article
21.3(c) for a longer period of time.
Nevertheless, the facts of this dispute, as identified by Chile and
uncontested by Argentina, raise special concerns that warrant my taking
them into account in my determination. I am of the view that the PBS is
so fundamentally integrated into the policies of Chile, that domestic
opposition to repeal or modification of those measures reflects, not
simply opposition by interest groups to the loss of protection, but also
reflects serious debate, within and outside the legislature of Chile,
over the means of devising an implementation measure when confronted
with a DSB ruling against the original law. In the light of the
longstanding nature of the PBS, its fundamental integration into the
central agricultural policies of Chile, its price-determinative
regulatory position in Chile’s agricultural policy, and its intricacy,
I find its unique role and impact on Chilean society is a relevant
factor in my determination of the “reasonable period of time” for
implementation.
ARB.5.5.10 US — Offset Act (Byrd Amendment), para. 61
(WT/DS217/14, WT/DS234/22)
I do not mean to suggest that I am of the view that the dispute
between the United States and the eleven Complaining Parties in US —
Offset Act (Byrd Amendment) does not involve important questions
under WTO law. Moreover, I am fully aware of the high level of economic
and political interest in this particular dispute, as evidenced by the
significant number of WTO Members involved in all stages of this
dispute, including in these arbitration proceedings. Nevertheless, “complexity”
of implementing legislation as a particular circumstance, within the
meaning of Article 21.3(c), is a legal criterion, to be examined
without regard for political contentiousness or other non-legal factors
that may surround a measure at issue. I am precluded, by my mandate
under Article 21.3(c), from giving consideration to these non-legal
factors.
ARB.5.5.11 EC — Tariff Preferences, para. 56
(WT/DS246/14)
I am not persuaded by the statements of the European Communities that
the particular nature of the Drug Arrangements within the GSP scheme and
the development policy of the European Communities warrants any increase
in the reasonable period of time for implementation. Although a
modification to the Drug Arrangements may well be described as “politically
sensitive”, this factor does not distinguish the Drug Arrangements
from any other measure that is likely to be the subject of a WTO
dispute. The measure examined in Chile — Price Band System was
quite different. That measure had a “unique … impact on Chilean
society” (that is, the society of the implementing Member); “domestic
opposition” to its repeal or modification reflected “serious debate,
within and outside the legislature of Chile, over the means of devising
an implementation measure” and “not simply opposition by interest
groups to the loss of protection”.
ARB.5.5.12 US — Stainless Steel (Mexico) (Article 21.3(c)),
para. 62
(WT/DS344/15)
… Issues relating to Presidential and Congressional elections and
the transition to a new President, a new Administration, and a new
Congress, or the controversial character of required changes in the
domestic legal system, have arisen in previous arbitrations. Like those
arbitrators, I believe that the implementation process — particularly
an administrative one — should begin forthwith upon adoption of the
DSB recommendations and rulings and be completed after the new
Administration and Congress take office.
ARB.5.5.13 Colombia —
Ports of Entry (Article 21.3(c)), para.
103
(WT/DS366/13)
… Colombia has not established in what way the indicative prices
mechanism and the ports of entry measure operate as “essential pillars”
of the regulatory regime it adopted to combat under-invoicing,
smuggling, and contraband. Even if this were the case, Colombia has not
demonstrated how the relative importance of these measures in its
overall customs control and enforcement framework for combating
under-invoicing, smuggling, and contraband impact the implementing
process in a manner that justifies the assessment of a longer reasonable
period of time for implementation.
ARB.5.6 Means of implementation
back to top
ARB.5.6.1 Australia —
Salmon, paras. 31, 33
(WT/DS18/9)
A certain difficulty arises in this case because of the divergent
views of the parties as to what constitutes implementation. …
…
Clearly, what constitutes a “reasonable period of time” depends
upon the action which Australia takes under its legal system to
implement the recommendations and rulings of the DSB. If implementation
is effected by means of an administrative decision to repeal or modify
the measure at issue or by means of a permit granted by the Director of
Quarantine, the length of time needed to carry out such a process would
be different from what it would be if Australia were to conduct a series
of risk assessments.
ARB.5.6.2 Australia —
Salmon, para. 38
(WT/DS18/9)
… Both parties also agree that the process involved in bringing the
measure in dispute into conformity with Australia’s obligations under
the SPS Agreement is an administrative, not a legislative,
process. As pointed out by the arbitrator in European Communities —
Hormones, when implementation can be effected by administrative
means, the reasonable period of time should be “considerably shorter
than 15 months”.
ARB.5.6.3 Canada — Pharmaceutical Patents, para. 49
(WT/DS114/13)
For example, if implementation is by administrative means,
such as through a regulation, then the “reasonable period of time”
will normally be shorter than for implementation through legislative means.
It seems reasonable to assume, unless proven otherwise due to unusual
circumstances in a given case, that regulations can be changed more
quickly than statutes. To be sure, the administrative process can
sometimes be long; but the legislative process can oftentimes be longer.
ARB.5.6.4 Canada — Pharmaceutical Patents, para. 51
(WT/DS114/13)
In addition, the legally binding, as opposed to the
discretionary, nature of the component steps leading to implementation
should be taken into account. If the law of a Member dictates a
mandatory period of time for a mandatory part of the process needed to
make a regulatory change, then that portion of a proposed period will,
unless proven otherwise due to unusual circumstances in a given case, be
reasonable. On the other hand, if there is no such mandate, then a
Member asserting the need for a certain period of time must bear a much
more imposing burden of proof. …
ARB.5.6.5 US — Hot-Rolled Steel, para. 32
(WT/DS184/13)
The temporal relationship between the legislative and the
administrative implementing actions is an important consideration in the
present arbitration. The United States and Japan agree that the
relationship is not necessarily a linear, sequential one and that some
administrative actions may well be taken, or at least commenced,
concurrently with the initiation of the legislative implementing effort.
ARB.5.6.6 Chile — Price Band System, footnote 86 to para. 33
(WT/DS207/13)
… I note that both parties in this arbitration argue that new
legislation is necessary for implementation of the recommendations and
rulings of the DSB, and therefore, appear to agree that “immediate”
compliance by Chile is impracticable. The impracticability of Chile’s
immediate compliance has not been raised as an issue for decision in
this arbitration.
ARB.5.6.7 Chile — Price Band System,
paras. 36-37
(WT/DS207/13)
… Whether elimination of the PBS, in so far as it impacts upon the
relevant products, is the “only appropriate” means of implementation
(as opposed to a modification of the PBS) is not an issue for decision
in this arbitration. As discussed above, the focus of my inquiry and
determination relates to the period of time needed to implement
the recommendations and rulings of the DSB, not to the manner in
which Chile intends to implement them. …
The fact that an Article 21.3(c) arbitration focuses on the period of
time for implementation, however, does not render the substance of the
implementation, that is, the precise means or manner of implementation,
immaterial from the perspective of the arbitrator. In fact, the more
information that is known about the details of the implementing measure,
the greater the guidance to an arbitrator in selecting a reasonable
period of time, and the more likely that such period of time will fairly
balance the legitimate needs of the implementing Member against those of
the complaining Member. Nevertheless, the arbitrator should still avoid
deciding what a Member must do for proper implementation. …
ARB.5.6.8 Chile — Price Band System, para. 38
(WT/DS207/13)
… I find the intricacy of the lawmaking process relevant to my
determination, and I agree with the observation of previous arbitrators
that implementation through legislation is likely to require a longer
time for implementation than administrative rulemaking or other
exclusively Executive action.
ARB.5.6.9 US — Offset Act (Byrd Amendment), para. 57
(WT/DS217/14, WT/DS234/22)
… As a general rule, absent evidence to the contrary,
implementation by legislative measures will, more often than not,
require a longer period of time than implementation by means of
administrative measures. …
ARB.5.6.10 US — Offset Act (Byrd Amendment), para. 59
(WT/DS217/14, WT/DS234/22)
I do not consider the existence of numerous options to implement the
recommendations and rulings of the DSB, as invoked by the United States,
to be relevant to my determination of the “reasonable period of time”
for implementation of the recommendations and rulings of the DSB. The
weighing and balancing of the respective merits of various legislative
alternatives is one of the key functions and aspects of any legislative
process. The mere fact that implementation of the recommendations and
rulings of the DSB necessitates the choice between several, or even a
large number of, alternative options is generally not, in my view, in
and of itself, a particular circumstance that would inform my
determination of the shortest period possible to implement the
recommendations and rulings of the DSB in this case.
ARB.5.6.11 EC — Tariff Preferences, para. 42
(WT/DS246/14)
It is not unusual for domestic or other legal systems to follow
procedural conventions that are not explicitly mandated by legal
instruments. Moreover, I find relevant that the Council has sought an
opinion from the European Parliament and the ECOSOC before adopting the
great majority of regulations related to the European Communities’ GSP
scheme over the years. The European Communities has also suggested that
the consequences of failing to seek such opinions in the present
implementation process would be a matter to be determined by the Court
of Justice of the European Communities. It appears, therefore, that
adoption of the regulation in question without seeking opinions from the
European Parliament and the ECOSOC would be an “extraordinary”
procedure. I agree with previous arbitrators that implementing Members
are not required to adopt “extraordinary legislative procedures” in
every case. In my view, seeking the opinions of the European Parliament
and the ECOSOC should be included in determining the reasonable period
of time for implementation.
ARB.5.6.12 EC — Tariff Preferences, para. 51
(WT/DS246/14)
I note that the Arbitrator in Korea — Alcoholic Beverages determined
that it was reasonable to include in the reasonable period of time the
“thirty-day grace period for enforcement of certain … instruments”
provided in a Korean statute. The Arbitrator in EC — Bananas III also
appears to have taken into account the European Communities’ statement
that “any change in legislation which directly affects the customs
treatment of products in connection with importation or exportation,
enters into force either on 1 January or 1 July of the relevant year”
in determining the reasonable period of time in that dispute. In the
present case, I regard the administrative practice of the European
Communities, as it pertains to advance publication of tariff changes and
the date on which such changes take effect, as a relevant factor in
determining the reasonable period of time for implementation.
ARB.5.6.13 US — Oil Country Tubular Goods Sunset Reviews, para.
26
(WT/DS268/12)
… the nature of the steps to be taken for implementation has a
bearing on the “reasonable period of time” required to fully
implement the recommendations and rulings of the DSB. The implementation
may require amendments to laws or regulations that may involve
legislative action, or it may require amendments to administrative
guidelines or procedures that may not involve such action.
Implementation may also involve only the remedying of the deficiencies
in a particular determination. Previous arbitration awards under Article
21.3(c) have recognized that when implementation requires legislative
action, the “reasonable period of time” required may be longer than
in cases where only administrative action is required to amend
guidelines or procedures or to remedy the deficiencies in particular
determinations. …
ARB.5.6.14 US — Oil Country Tubular Goods Sunset Reviews, para.
50
(WT/DS268/12)
The United States considers that the waiver provisions of the USDOC
Regulations must first be amended to bring them into conformity with the
DSB’s recommendations and rulings, and that only after the amended
regulations are issued could they be applied to a new determination to
remedy the “as applied” violation in this dispute. In this regard, I
note two aspects of this dispute: first, one of the reasons for the
Panel finding the “as applied” violation was that WTO-inconsistent
waiver provisions were applied to Argentine exporters other than Siderca;
and, second, an amendment of the waiver provisions of the USDOC
Regulations is in any event required to remedy the “as such”
violations in this dispute. The United States has explained why it
considers an in seriatim approach to be necessary in this case to
ensure that the redetermination is in conformity with its own legal
system. …
ARB.5.6.15 US — Gambling, para. 35
(WT/DS285/13)
It is by now well established that a key determinant of the
reasonable period of time for implementation is the nature of the
implementing action that is to be taken. Legislative action will, as a
general rule, require more time than regulatory rulemaking, which in
turn will normally need more time than implementation that can be
achieved by means of an administrative decision.
ARB.5.6.16 US — Gambling, paras. 36, 40-41
(WT/DS285/13)
… Antigua contends that the United States can implement, in part,
through executive action, and in part through legislative action. With
respect to what Antigua characterizes as the supply of “non-sports
related and horseracing” gambling and betting services, Antigua argues
that the United States can, and should, implement the recommendations
and rulings of the DSB through the issuance of an executive order by the
United States President that would clarify that the supply of such
services from Antigua is not prohibited under the Wire Act, the Travel
Act or the IGBA. As regards the supply of “other sports-related”
gambling and betting services, Antigua accepts that legislative change
will be necessary in order to clarify whether and how the Wire Act, the
Travel Act and the IGBA apply to these activities.
…
In asking me to draw this distinction, therefore, Antigua is
effectively asking me to make a ruling concerning the meaning and scope
of application of United States municipal law. I do not consider that it
forms part of my mandate to do so, given that the findings of the Panel
and the Appellate Body make no such distinction.
Because I do not rule on whether the distinction asserted by Antigua
exists, I need not, in this proceeding, resolve the issue of whether it
is permissible for an arbitrator under Article 21.3(c) of the DSU to
determine more than one reasonable period of time for implementation.
…
ARB.5.6.17 US — Gambling,
paras. 42-43
(WT/DS285/13)
Having declined to rule on the distinction on which Antigua bases its
assertion that the United States could undertake two separate methods of
implementation, I need not consider the reasonable period of time that
would be necessary for implementation by means of an executive order. I
turn, instead, to the question of the reasonable period of time needed
for the United States to implement by legislative means.
… Antigua suggested that even if I were to consider that the United
States enjoys the discretion to decide to implement by legislative
means, … the United States should be required to “pay the price”
for having chosen a “complicated, more lengthy way” of implementing
rather than another available method that would be shorter. … I need
not decide whether a Member’s decision to opt for one means of
implementation (legislative) notwithstanding that another, more rapid
means of implementation has been demonstrated to be available, could
affect the determination of the reasonable period of time for
implementation under Article 21.3(c) of the DSU.
ARB.5.6.18 EC — Export Subsidies on Sugar, para. 69
(WT/DS265/33, WT/DS266/33, WT/DS283/14)
… the choice of the method of implementation rests with the
implementing Member. However, the implementing Member does not have an
unfettered right to choose any method of implementation. Besides being
consistent with the Member’s WTO obligations, the chosen method must
be such that it could be implemented within a reasonable period of time
in accordance with the guidelines contained in Article 21.3(c).
Objectives that are extraneous to the recommendations and rulings of the
DSB in the dispute concerned may not be included in the method if such
inclusion were to prolong the implementation period. Above all, it is
assumed that the implementing Member will act in “good faith” in the
selection of the method that it deems most appropriate for
implementation of the recommendations and rulings of the DSB.
ARB.5.6.19 EC — Export Subsidies on Sugar, paras. 78-79
(WT/DS265/33, WT/DS266/33, WT/DS283/14)
… the Complaining Parties submitted an exhibit indicating three
instances where the management committee delivered its opinion before
the Council adopted the relevant regulation. The European
Communities responds that, although the management committee may be
invited by the Commission to deliver its opinion before the Council
regulation has been adopted, this, nevertheless, remains an
extraordinary procedure in the practice of the European Communities’
institutions.
I agree with previous arbitrators that an implementing Member is not
required to adopt “extraordinary legislative procedures” in every
case. In this respect, I am not persuaded by the argument of the
Complaining Parties that, although the instances cited by them are few,
the flexibility suggested by them should not be regarded as “extraordinary”.
In this respect, I take note of the requirement that the opinion of the
management committee would have to be sought again in the event that the
Council, in adopting the regulation, modified the original Commission
proposal.
ARB.5.6.20 EC — Export Subsidies on Sugar, paras. 93-95
(WT/DS265/33, WT/DS266/33, WT/DS283/14)
… The European Communities argues that the Council regulation under
discussion must enter into force on 1 July 2006 because “it is an
established legislative practice that regulations which must be
implemented by the customs authorities should be published at least six
weeks before their entry into force and take effect from 1 January, or
exceptionally, from 1 July”. This practice is based on a Council
resolution from 1974. …
In response, the Complaining Parties have submitted two tables
showing 33 Council and Commission regulations that, according to the
Complaining Parties, “appear to fall within the [European Communities’]
description of the Council’s long-standing practice”; however, in
the case of these regulations, the alleged European Communities’
practice was not followed, in that the relevant regulations did not
enter into force on 1 January or 1 July, and were not published six
weeks prior to their entry into force. …
In my view, the statistical information submitted by the Complaining
Parties suggests that a degree of flexibility exists with respect to the
practice alleged by the European Communities. I am aware that the
arbitrator in EC — Tariff Preferences regarded this
administrative practice of the European Communities as a relevant factor
in determining the reasonable period of time for implementation.
However, unlike in that case, the Complaining Parties have presented
clear evidence that the practice has not been followed in a number of
instances. The European Communities has not explained why, in this
particular case, the European Communities cannot make use of the
flexibility it appears to have with respect to this particular
administrative practice.
ARB.5.6.21 EC — Export Subsidies on Sugar, para. 96
(WT/DS265/33, WT/DS266/33, WT/DS283/14)
With respect to the European Communities’ argument that there is a
“well established legislative practice” that significant changes to
the rules of a CMO should take effect from the start of the following
marketing year, I note that the European Communities has not directed my
attention to any factual evidence in support of this claim. In contrast,
the Complaining Parties have submitted evidence that casts doubt on the
existence of the “legislative practice” in the form of a table with
ten Council amendments to existing CMOs that, according to the
Complaining Parties, did not take effect at the start of the marketing
year. I am therefore of the view that the European Communities has not
discharged its burden of proof with respect to this issue. Therefore,
the alleged “legislative practice” that “significant changes to
the rules of a common market organization should take effect … from
the start of the following marketing year” is not a “particular
circumstance …” that I propose to take into account in
determining the reasonable period of time.
ARB.5.6.22 EC — Chicken Cuts,
paras. 51-52
(WT/DS269/13, WT/DS286/15)
With respect to the first step of the European Communities’
proposed means of implementation, I observe at the outset that the
action envisaged — the classification decision of the Harmonized
System Committee of the WCO — is outside the lawmaking
procedures of the European Communities. In considering this proposed
first step, I note, first of all, that disputes that give rise to WTO
dispute settlement under the DSU focus exclusively on “measures taken”
by a Member, and that, accordingly, a measure that is the subject of a
challenge in WTO dispute settlement must be “attributable” to that
Member. Because measures so challenged originate in the decision-making
organs of a WTO Member’s own legal system, an arbitrator under Article
21.3(c) may reasonably expect that implementation would ordinarily be
achieved by means entirely within the implementing Member’s lawmaking
procedures. In that ordinary situation, a Member’s prerogative to
select the means of implementation is particularly strong, and it is
appropriate in that situation for an arbitrator to refrain from
questioning whether another, perhaps shorter, means of implementation is
available within that legal system.
The situation is not the same, however, where, as here, a Member
seeks to implement recommendations and rulings of the DSB by
decision-making processes outside its domestic legal order.
Recourse to such external processes will not ordinarily form part of the
implementation of the recommendations and rulings of the DSB.
Accordingly, as I see it, the mere assertion by a Member of the need for
recourse to such external decision-making processes as part of an
implementation proposal is not entitled to the same deference as in the
case of an implementation procedure that is entirely within that Member’s
domestic legal system. Instead, in my view, an implementing Member
seeking to go outside its domestic decision-making processes bears the
burden of establishing that this external element of its proposed
implementation is necessary for, and therefore indispensable to, that
Member’s full and effective compliance with its obligations under the
covered agreements by implementing the recommendations and rulings of
the DSB.
ARB.5.6.23 EC — Chicken Cuts, para. 67
(WT/DS269/13, WT/DS286/15)
… I recognize that the Commission engages in a “law-making”
function, and thereby acts in a manner similar to legislatures when
enacting a Regulation amending Additional Note 7. In my view, however,
this, alone, does not render the process legislative such that
additional time may be required for implementation. Previous
arbitrations have highlighted that implementation achieved through
administrative processes generally requires less time than implementing
legislation. This distinction is premised on the fact that
administrative action generally may be accomplished solely by one
institution (often the Executive Branch) of the implementing Member,
whereas legislative action generally requires the participation of
additional institutions (typically at least the Legislative Branch — likely to have slower, more deliberative processes
— possibly in
conjunction with the Executive Branch as well). The implementation steps
proposed by the European Communities under Community law are expected to
be accomplished exclusively by the Commission, without involvement by
the Council or the European Parliament. I therefore do not consider
these steps to be “legislative” in the sense in which I believe that
term has come to be understood in the context of arbitrations under
Article 21.3(c). Accordingly, I must take into account in my
determination the administrative nature of the proposed
implementation process.
ARB.5.6.24 EC — Chicken Cuts, para. 79
(WT/DS269/13, WT/DS286/15)
… not all of the actions identified by the European Communities are
required under Community law when passing a Commission Regulation. In
some instances, this may suggest that those actions not required by law
are to be given less weight in my determination of the reasonable period
of time. In other instances, however, the fact that a certain action is
not mandated does not mean that such action is irrelevant to my
determination. In this respect, I note, in particular, that certain
procedures and time-frames, while not mandated, are based on standard
practice as the European Communities has substantiated with relevant
evidence. While WTO Members will, unquestionably, always want to ensure
that they are complying fully with all of their WTO obligations by
implementing adverse WTO rulings as quickly as possible in their own
legal systems, ordinarily their standard practices in those systems
should suffice.
ARB.5.6.25 Japan — DRAMs (Korea) (Article 21.3(c)), para. 27
(WT/DS336/16)
… In assessing whether the means chosen by the Member is consistent
with the recommendations and rulings of the DSB, I must consider whether
the implementing action falls within the range of permissible actions
that can be taken in order to implement the DSB’s recommendations and
rulings. This does not mean that I am permitted to determine the
consistency with WTO law of the measure taken to comply. This can
only be judged in Article 21.5 proceedings. Article 21.3(c) arbitrations
are distinct and concern by when implementation must take place.
In making this determination, the means of implementation available to
the Member concerned is a relevant consideration.
ARB.5.6.26 Brazil — Retreaded Tyres (Article 21.3(c)), para. 68
(WT/DS332/16)
… implementing Members have usually proposed either legislative or
regulatory means to implement DSB recommendations and rulings. However,
I do not consider that implementation through the judiciary can be a
priori excluded from the range of permissible action that can be
taken to implement DSB recommendations and rulings and bring about
compliance with a Member’s obligations under the covered agreements.
The degree of government control may well be different with respect to
the executive, the legislative, and the judiciary branches of power.
Implementation action, whether it is taken by the legislature, or the
judiciary, may not be executed in the way envisaged by the government.
Yet the possibility of failure to achieve the intended compliance has
not been regarded by previous arbitrators as a reason to question the
permissibility of implementation by means of legislation, nor, in my
view, does it exclude judicial action from the range of a permissible
means of implementation. …
ARB.5.6.27 Brazil — Retreaded Tyres (Article 21.3(c)), para. 80
(WT/DS332/16)
Therefore, I agree with the arbitrator in EC —
Chicken Cuts that
“[r]ecourse to such external processes will not ordinarily form part
of the implementation of the recommendations and rulings of the DSB”,
and that recourse to external decision making “is not entitled to the
same deference as in the case of an implementation procedure that is
entirely within that Member’s domestic legal system”. In addition,
the arbitrator in EC — Tariff Preferences stated that “[t]he
mere fact that the European Communities has decided to incorporate the
task of implementation within the larger objective of reforming its
overall GSP scheme cannot lead to a determination of a shorter, or
longer, period of time.” Similarly, in this case, Brazil seems to
envisage negotiations on new MERCOSUR disciplines, which seems to
include a wider spectrum than the MERCOSUR exemption from the ban on
retreaded tyres at issue here. This is not to say that I would
discourage the Member concerned from consulting and coordinating with
its trading partners in advance of a modification of an import regime,
including in the context of implementing DSB recommendations and rulings
that may affect them. The question before me, however, is whether this
should be recognized as a “particular circumstance” that should be
factored into my calculation of the reasonable period of time. In
keeping with the premise set out by the arbitrator in EC — Chicken
Cuts, I am of the view that an implementing Member seeking to go
outside its domestic decision-making processes bears the burden of
establishing that “this external element of its proposed
implementation is necessary for, and therefore indispensable to, that
Member’s full and effective compliance with its obligations under the
covered agreements”.
ARB.5.7 Structural adjustment back to top
ARB.5.7.1 Indonesia —
Autos, para. 23
(WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12)
Indonesia also requests an additional period of nine months following
the issuance of its implementing measure (i.e., to 23 October 1999) as a
“transition” period to allow the affected companies/industries to
make structural adjustments. I do not view structural adjustments of
Indonesia’s affected industries as a “particular circumstance”
which may be taken into account under Article 21.3(c) of the DSU. In
virtually every case in which a measure has been found to be
inconsistent with a Member’s obligations under the GATT 1994 or any
other covered agreement, and therefore, must be brought into conformity
with that agreement, some degree of adjustment by the domestic industry
of the Member concerned will be necessary. This will be the case
regardless of whether the Member concerned is a developed or a
developing country. Structural adjustment to the withdrawal or the
modification of an inconsistent measure, therefore, is not a “particular
circumstance” that can be taken into account in determining the
reasonable period of time under Article 21.3(c).
ARB.5.7.2 Canada — Pharmaceutical Patents, para. 52
(WT/DS114/13)
… in my view, the “particular circumstances” mentioned in
Article 21.3 do not include factors unrelated to an assessment of
the shortest period possible for implementation within the legal system
of a Member. Any such unrelated factors are irrelevant to determining
the “reasonable period of time” for implementation. For example, as
others have ruled in previous Article 21.3 arbitrations, any proposed
period intended to allow for the “structural adjustment” of an
affected domestic industry will not be relevant to an assessment of the
legal process. The determination of a “reasonable period of time”
must be a legal judgement based on an examination of relevant legal
requirements.
ARB.5.7.3 Argentina —
Hides and Leather, para. 41
(WT/DS155/10)
It thus appears that the concept of compliance or implementation
prescribed in the DSU is a technical concept with a specific content:
the withdrawal or modification of a measure, or part of a measure, the
establishment or application of which by a Member of the WTO constituted
the violation of a provision of a covered agreement. Compliance within
the meaning of the DSU is distinguishable from the removal or
modification of the underlying economic or social or other conditions
the existence of which might well have caused or contributed to the
enactment or application of the WTO-inconsistent governmental measure in
the first place. Those economic or other conditions might, in certain
situations, survive the removal or modification of the non-conforming
measure; nevertheless, the WTO Member concerned will have complied with
the DSB recommendations and rulings and with its obligations under the
relevant covered agreement. To my mind, it is inter alia for the
above reason that the need for structural adjustment of the industry or
industries in respect of which the WTO-inconsistent measure was
promulgated and applied, has generally been regarded, in prior
arbitrations under Article 21.3(c) of the DSU, as not bearing
upon the determination of a “reasonable period of time” for
implementation of DSB recommendations and rulings.
ARB.5.7.4 EC — Export Subsidies on Sugar,
paras. 91-92
(WT/DS265/33, WT/DS266/33, WT/DS283/14)
I turn now to the European Communities’ contention that production
already undertaken before the dispute in EC — Export Subsidies on
Sugar was decided should be given consideration as a “particular
circumstance …”. More specifically, the European
Communities argues that “it would be appropriate to allow the European
Communities’ exporters to continue to export out of quota sugar until
1 January 2007 without being subject to the payment of the ‘surplus’
levies provided [for] in the Commission proposal”. The Complaining
Parties consider it unwarranted to grant an additional six months as a
transition period to enable the domestic industry to export the sugar it
has already produced. …
I agree with the views put forth by the Complaining Parties. In my
view, the European Communities effectively requests a transitional
period following the withdrawal or modification of a WTO-inconsistent
measure, so that the domestic industry may adjust to such withdrawal or
modification. As previous arbitrators have held, the perceived need for
such “structural adjustment” or phase-in periods for the domestic
producers does not constitute a “particular circumstance …”
within the meaning of Article 21.3(c) and, as such, cannot have an
impact on the determination of the reasonable period of time under that
provision. In my view, allowing such a transitional period would have
the effect of including in the reasonable period of time action that is
extraneous to implementation of the recommendations and rulings of the
DSB.
ARB.5.8 Economic and financial collapse
back to top
ARB.5.8.1 Indonesia —
Autos, para. 24
(WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12)
… Indonesia has indicated that in a “normal situation”, a
measure such as the one required to implement the recommendations and
rulings of the DSB in this case would become effective on the date of
issuance. However, this is not a “normal situation”. Indonesia is
not only a developing country; it is a developing country that is
currently in a dire economic and financial situation. Indonesia itself
states that its economy is “near collapse”. In these very particular
circumstances, I consider it appropriate to give full weight to matters
affecting the interests of Indonesia as a developing country pursuant to
the provisions of Article 21.2 of the DSU. I, therefore, conclude that
an additional period of six months over and above the six-month period
required for the completion of Indonesia’s domestic rulemaking process
constitutes a reasonable period of time for implementation of the
recommendations and rulings of the DSB in this case.
ARB.5.8.2 Argentina —
Hides and Leather, para. 49
(WT/DS155/10)
A final point that should be made is that to build into the concept
of a “reasonable period of time” to comply with DSB recommendations
and rulings, time or opportunity to control and manage economic or
social conditions which antedate or are contemporaneous with the
adoption of the WTO-inconsistent governmental measure, may, in the
generality of instances, be to defer to an indefinitely receding future
the duty of compliance. The implications for the multilateral trading
system as we know it today, of such an interpretation of “reasonable
period of time” for compliance are clear and far-reaching and ominous.
Such an interpretation would tend to reduce the fundamental duty of “immediate”
or “prompt” compliance to a figure of speech.
ARB.5.8.3 Argentina —
Hides and Leather, para. 51
(WT/DS155/10)
… I agree that under Article 21.2 of the DSU in conjunction with
Article 21.3(c), account may appropriately be taken of the circumstance
that the WTO Member which must comply with the DSB recommendations and
rulings is a developing country confronted by severe economic and
financial problems. That those problems in the case of Argentina are
real is not disputed, although there may be debate as to whether
Argentina’s economy is “near collapse”.
ARB.5.9 Economic impact of existing measure. See also Relevance
of contentiousness (ARB.5.5)
back to top
ARB.5.9.1 Canada — Patent Term,
paras. 46-48
(WT/DS170/10)
A second point of convergence between the parties concerns the
significance, under Article 21.3(c) of the DSU, of the economic
consequences of the expiry of certain patents during the “reasonable
period of time” for the implementation of the recommendations and
rulings of the DSB. I recall the United States’ assertion that, if
Canada is permitted to delay its implementation of the recommendations
and rulings of the DSB, thousands of patents will continue to expire “prematurely”,
causing irreparable harm to patent owners; on average, 1,149 patents
will fall into the public domain each month during 2001.
At the oral hearing, Canada accepted the statistics presented by the
United States, but submitted that they are misleading as they fail to
indicate whether or not the “prematurely” expiring patents have any
commercial significance. …
Canada advanced the argument about the small number of patents with
commercial value for the first time at the oral hearing. It is obvious
that this argument would raise a major procedural problem if the
commercial value of the patents expiring during the “reasonable period
of time” had any relevance as a “particular circumstance” for the
determination of the length of the “reasonable period of time” in
this case. However, in my view, this is not so. Measures taken by
Members, which are inconsistent with one of the covered agreements will,
naturally, or at least very often, cause irreparable harm to economic
operators who are nationals of other Members. In this respect,
violations of the TRIPS Agreement will generally not differ from
violations of one of the other covered agreements. The precise
assessment of damage caused to a group of economic operators or to
single individuals, or companies, may well be more difficult to evaluate
than in the present case. However, this does not distinguish the present
case from other cases involving violations of covered agreements for the
purposes of determining the “reasonable period of time”, under
Article 21.3(c). I note that this view corresponds to the position taken
by the United States at the oral hearing according to which the argument
of urgency was raised to provide context. The United States acknowledged
that the commercial value of the expiring patents is not relevant to the
determination of the shortest period possible, within the Canadian legal
system.
ARB.5.9.2 US — Offset Act (Byrd Amendment),
paras. 79-80
(WT/DS217/14, WT/DS234/22)
… economic harm suffered by foreign exporters does not, and cannot,
by definition, impact on what is the “shortest period possible within
the legal system of the Member to implement the recommendations and
rulings of the DSB”. The particular circumstances, within the meaning
of Article 21.3(c), can only be of such nature as will influence the
evolution and unfolding of the implementation process itself. Factors
external to the legislative process itself are of no relevance for the
determination of the reasonable period of time for implementation.
I do not wish to imply that economic harm, caused by the WTO-inconsistent
measure, to economic agents of the Complaining Parties, or any other WTO
Members, is irrelevant in the context of the implementation of the
recommendations and rulings of the DSB. Many WTO-inconsistent measures
will cause some form of economic harm to exporters of WTO Members.
However, the need, and urgency, to remove WTO-inconsistent measures, and
to remove the harm to economic agents caused by such measures, is, in my
view, already reflected in the principle of “prompt compliance”
under Article 21.1. The same concern, in my view, underlies the well
established principle, under Article 21.3(c), that the reasonable period
of time for implementation be the shortest time possible within the
legal system of the Member. Thus, it would be supererogatory, and
incongruous, to accord renewed consideration to the issue of economic
harm when determining the shortest period possible for implementation
within the legal system of the implementing Member.
ARB.5.10 Developing countries
back to top
ARB.5.10.1 Indonesia —
Autos, para. 24
(WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12)
… Indonesia is a developing country. In that context, I note that
Article 21.2 of the DSU requires that:
Particular attention should be paid to matters affecting the
interests of developing country Members with respect to measures which
have been subject to dispute settlement.
Although the language of this provision is rather general and does
not provide a great deal of guidance, it is a provision that forms part
of the context for Article 21.3(c) of the DSU and which I believe is
important to take into account here. … Indonesia is not only a
developing country; it is a developing country that is currently in a
dire economic and financial situation. Indonesia itself states that its
economy is “near collapse”. In these very particular circumstances,
I consider it appropriate to give full weight to matters affecting the
interests of Indonesia as a developing country pursuant to the
provisions of Article 21.2 of the DSU. I, therefore, conclude that an
additional period of six months over and above the six-month period
required for the completion of Indonesia’s domestic rule-making
process constitutes a reasonable period of time for implementation of
the recommendations and rulings of the DSB in this case.
ARB.5.10.2 Chile — Alcoholic Beverages, para. 44
(WT/DS87/15, WT/DS110/14)
Chile has also referred to Article 21.2, where the DSU, immediately
after stressing that “prompt compliance” with the recommendations
and rulings of the DSB is essential for the WTO dispute settlement
system, provides:
Particular attention should be paid to matters affecting the
interests of developing country Members with respect to measures which
have been subject to dispute settlement.
Chile has submitted that account must be taken of the specific
interests of Chile as the developing country Member whose measure has
been the subject of dispute settlement. However, Chile has not been very
specific or concrete about its particular interests as a developing
country Member nor about how those interests would actually bear upon
the length of “the reasonable period of time” to enact necessary
amendatory legislation.
ARB.5.10.3 Chile — Alcoholic Beverages, para. 45
(WT/DS87/15, WT/DS110/14)
It is not necessary to assume that the operation of Article 21.2 will
essentially result in the application of “criteria” for the
determination of “the reasonable period of time” — understood as
the kinds of considerations that may be taken into account — that would be “qualitatively” different for developed and for
developing country Members. I do not believe Chile is making such an
assumption. Nevertheless, although cast in quite general terms, because
Article 21.2 is in the DSU, it is not simply to be disregarded. As I
read it, Article 21.2, whatever else it may signify, usefully enjoins, inter
alia, an arbitrator functioning under Article 21.3(c) to be
generally mindful of the great difficulties that a developing country
Member may, in a particular case, face as it proceeds to implement the
recommendations and rulings of the DSB.
ARB.5.10.4 Chile — Price Band System,
paras. 55-56
(WT/DS207/13)
… I agree with the following statement by the arbitrator in Chile
— Alcoholic Beverages that “an arbitrator functioning under
Article 21.3(c) [must] be generally mindful of the great
difficulties that a developing country Member may, in a particular case,
face as it proceeds to implement the recommendations and rulings of the
DSB”. This arbitration is, however, the first arbitration under
Article 21.3(c) to include developing countries as both complainant and
respondent. The period of time for implementation of the
recommendations and rulings of the DSB in this case is thus a “matter …
affecting the interests” of both Members: the general difficulties
facing Chile as a developing country in revising its longstanding PBS,
and the burden imposed on Argentina as a developing country whose access
to the Chilean agricultural market is impeded by the PBS, contrary to
WTO rules.
Furthermore, Chile has not pointed to additional specific obstacles
that it faces as a developing country under present
circumstances. This is a matter which I should take into account in
evaluating whether a longer period of time may be needed for
implementation. The absence of presently existing, concrete difficulties
in Chile’s position as a developing country stands in contrast to
previous arbitrations, wherein Members have identified, not simply their
positions as developing countries, but also “severe” or “dire”
economic and financial situations existing at the time of the proposed
period of implementation. In contrast, the acuteness of Argentina’s
burden as a developing country complainant that has been successful in
establishing the WTO-inconsistency of a challenged measure, is amplified
by Argentina’s daunting financial woes at present. Accordingly, I
recognize that Chile may indeed face obstacles as a developing country
in its implementation of the recommendations and rulings of the DSB, and
that Argentina, likewise, faces continuing hardship as a developing
country so long as the WTO-inconsistent PBS is maintained. In the
unusual circumstances of this case, therefore, I am not swayed towards
either a longer or shorter period of time by the “[p]articular
attention” I pay to the interests of developing countries.
ARB.5.10.5 US — Offset Act (Byrd Amendment), para. 81
(WT/DS217/14, WT/DS234/22)
… I note that, by its wording, Article 21.2 does not distinguish
between situations where the developing country Member concerned is an
implementing or a complaining party. However, I also note that the
Complaining Parties have not explained specifically how
developing country Members’ interests should affect my determination
of the reasonable period of time for implementation. It is useful to
recall, once again, that the term “reasonable period of time” has
been consistently interpreted to signify the “shortest period possible
within the legal system of the Member”. Therefore, I have some
difficulty in seeing how the fact that several Complaining Parties are
developing country Members should have an effect on the determination of
the shortest period possible within the legal system of the United
States to implement the recommendations and rulings of the DSB in this
case.
ARB.5.10.6 US — Oil Country Tubular Goods Sunset Reviews, para.
52
(WT/DS268/12)
… for my determination of the reasonable period of time, Argentina
requests me to use as “context” the fact that Argentina is a
developing country Member. Having regard to the implementation process
involved in this dispute, I consider that, beyond the fundamental
requirement that the implementation process should be completed in the
shortest period possible within the legal and administrative system of
the United States, the “reasonable period of time” for
implementation is not affected by the fact that Argentina, as the
complaining Member, is a developing country.
ARB.5.10.7 US — Gambling, paras. 57, 59-60
(WT/DS285/13)
… For the United States, Article 21.2 can be relevant in an
arbitration to determine the reasonable period of time for
implementation only when it is the implementing Member that is a
developing country. … The fact that the complaining Member may
be a developing country cannot, in the view of the United States, have
any impact on such a determination.
…
On its face, … the text of Article 21.2 does not expressly limit
its scope of application to developing country Members as implementing,
rather than as complaining, parties to a dispute. Any such
limitation, if it exists, must therefore be found in the context and/or
object and purpose of this provision.
… The provision requires that “particular attention” be paid
to: (i) matters; (ii) affecting the interests of developing country
Members; (iii) with respect to the measures at issue. At first blush, it
is not clear whether the word “matters” in Article 21.2 has the same
meaning as elsewhere in the DSU, or whether it refers simply to the
subject matter covered by Article 21. In any event, it seems to me that
Article 21.2 contemplates a clear nexus between the interests of the
developing country invoking the provision and the measures at issue in
the dispute, as well as a demonstration of the adverse affects of such
measures on the interests of the developing country Member(s) concerned.
ARB.5.10.8 US — Gambling, para. 61
(WT/DS285/13)
… Article 21.2… is located within Article 21, which is entitled
“Surveillance of Implementation of Recommendations and Rulings”.
The second paragraph of Article 21, like the first, sets out a broad
principle that guides and informs the more specific paragraphs that
follow, including Article 21.3. Given that Article 21 contains a number
of additional paragraphs dealing with different aspects of surveillance
and implementation, it seems likely that Article 21.2 informs each of
the subsequent paragraphs in a different manner. Arguably, for example,
Article 21.2 could constitute a legislative expression of a factor that
is to constitute a “particular circumstance” to be taken into
account under Article 21.3(c). The last two paragraphs of Article 21 are
also, as Antigua pointed out at the oral hearing, of potential use in
interpreting the scope and role of Article 21.2. Each of those
provisions also deals with developing country Members of the WTO at the
stage of surveillance and implementation of DSB recommendations and
rulings. Yet, contrary to Article 21.2, both Article 21.7 and Article
21.8 expressly apply to the developing country Members that brought the
case, that is, to developing countries as complaining parties.
ARB.5.10.9 US — Gambling,
paras. 62-63
(WT/DS285/13)
The significance to be attached to this context, and the precise
nature of the relationship between Article 21.2 and Article 21.3(c), are
not issues that need be resolved in this arbitration. This is because,
in my view, Antigua has not satisfied the criteria expressly mentioned
in Article 21.2. … Antigua did not … provide specific data in
support of [its] arguments. Nor did Antigua seek to demonstrate any
clear relationship between the decline of its industry and the measures
which were subject to this dispute …
In the absence of any more specific evidence or elaboration of the
affected interests of Antigua and their relationship with the measures
at issue, I am not persuaded that the criteria referred to in Article
21.2 have been satisfied. For this reason, I need not consider further
the issue of the precise relationship between paragraphs 2 and 3 of
Article 21, nor how I might apply Article 21.2 so as to pay “particular
attention” to the interests of Antigua in fixing the reasonable period
of time for implementation by the United States in this dispute.
ARB.5.10.10 EC — Export Subsidies on Sugar, para. 81
(WT/DS265/33, WT/DS266/33, WT/DS283/14)
I do not question the need for the European Communities to consult
the ACP countries under the Cotonou Agreement on “measures which may
affect the interests of the ACP states”. However, the European
Communities has not demonstrated why this should have an impact so as to
require additional time for the European Communities to implement the
recommendations and rulings of the DSB. I observe, first, that
implementation by the European Communities in this dispute relates to
its export subsidy commitments under the Agreement on
Agriculture, whereas the ACP countries enjoy preferential market
access to the European Communities’ market. Secondly, the European
Communities did not provide sufficient information on what consultations
have taken place with the ACP countries, nor on past experience on how
consultations with ACP countries had an impact on the European
Communities’ legislative process. The European Communities has not
provided me with information sufficient to substantiate its assertion
that consultations with the ACP Countries will necessitate additional
time for implementation of the recommendations and rulings of the DSB.
ARB.5.10.11 EC — Export Subsidies on Sugar, para. 99
(WT/DS265/33, WT/DS266/33, WT/DS283/14)
… previous arbitrators have not explicitly resolved the question
whether the phrase “developing country Members” in Article 21.2
refers exclusively to the implementing Member, or whether it also
applies to developing country Members other than the implementing
Member such as, for instance, the complaining Member, third parties to
the dispute, or any developing country Member of the WTO. I consider
that Article 21.2 is to be interpreted as directing an arbitrator to pay
“[p]articular attention” to “matters affecting the interests” of
both an implementing and complaining developing country
Member or Members. I note that Brazil, the European Communities and
Thailand explicitly agree on this point. In arriving at this conclusion,
I agree with the arbitrator in US — Gambling that the text of
Article 21.2 does not limit its scope of application to an implementing
developing country Member. I also note that Articles 21.7 and 21.8 refer
to circumstances in which a “matter … has been raised by a
developing country Member” or “the case is one brought by a
developing country Member”; this suggests that, where the drafters of
the DSU wished to limit the scope of a provision to a particular
category or group of developing country Members, they did so expressly.
ARB.5.10.12 EC — Chicken Cuts, para. 82
(WT/DS269/13, WT/DS286/15)
… my determination of the reasonable period of time results from my
understanding of the shortest period of time possible in the
Community legal order for implementing the proposed Commission
Regulation amending Additional Note 7 to heading 02.10. Having arrived
at the shortest period of time possible, I consider that the reasonable
period of time for implementation is not additionally affected by the
fact that Brazil, as a complaining Member in this dispute, is a
developing country.
ARB.5.10.13 Colombia —
Ports of Entry (Article 21.3(c)), para.
106
(WT/DS366/13)
… in a situation where both the implementing and the complaining
Member are developing countries, the requirement provided in Article
21.2 is of little relevance, except if one party succeeds in
demonstrating that it is more severely affected by problems related to
its developing country status than the other party. In this case, I do
not consider that either Colombia or Panama have demonstrated that the
challenges they face as developing countries are relatively more severe
than the ones faced by the other party.
ARB.5.11 Calendar of legislative body
back to top
ARB.5.11.1 US — Offset Act (Byrd Amendment), paras. 69-70
(WT/DS217/14, WT/DS234/22)
… The fact that at any given point in the Congressional schedule
there would be a “greater opportunity” to pass legislation than at
another point in time, is not a particular circumstance relevant for my
determination of the reasonable period of time for implementation in
this case. The obligation to implement promptly and, if impracticable to
do so immediately, then within a reasonable period of time, the
recommendations and rulings of the DSB is an international treaty
obligation of the United States; the specific content and meaning of
this international legal obligation cannot be affected by non-legal
considerations related to the United States Congressional schedule.
This is not to say that the schedule of the United States Congress
(or any other legislative body of any implementing Member) can never be
a relevant particular circumstance; for instance, previous arbitrators
have given consideration, in their determination of the reasonable
period of time for implementation, to circumstances where a draft bill
could not be introduced into Congress for a number of months because a
new Congress had not yet convened at the time when the arbitration was
initiated. However, these circumstances do not arise in the present
proceedings. The United States has not argued that it would not
be possible to pass the implementing legislation at another point in
time, for instance at the end of the Congressional session when the
majority of bills are enacted, or at any other time during the
Congressional session.
ARB.5.11.2 US — Gambling,
paras. 51-52
(WT/DS285/13)
The United States suggests that another “particular circumstance”
that has a strong influence on the passage of legislation within the
United States and that should, therefore, influence my determination in
this proceeding, is the Congressional schedule. …
I do not take the view that a legislature’s schedule is totally
irrelevant to the determination of the reasonable period of time for
implementation of the recommendations and rulings of the DSB. Rather, it
seems tome that this is a circumstance that may or may not be relevant
depending on the particular case. … In this case, I do not attach much
weight to this “particular circumstance”, for the reasons that
follow. The United States has taken the position that it would be
appropriate for the reasonable period of time to expire just before
Congress begins its August 2006 recess. … I note, in this respect,
that in addition to its August recess (the “Summer District Work
Period”), Congress takes a number of recesses of a week or more
throughout the year. In 2005, these include: a “Presidents Day
District Work Period” in February; a “Spring District Work Period”
in March/April around the time of Easter; a “Memorial Day District
Work Period” at the end of May/early June; and an “Independence Day
District Work Period” around the time of the 4th of July. In my view,
the United States’ argument that a recess period spurs legislative
action must apply in the same way to these recesses as it does to
Congress’ August recess and to the end of a session of Congress. Thus,
Congress has, throughout the year, a number of breaks that could serve
to push forward the legislative process.
ARB.5.12 Flexibility of implementation process
back to top
ARB.5.12.1 US — 1916 Act, para. 39
(WT/DS136/11, WT/DS162/14)
Turning to the complexity of the United States’ legislative
process, I note that the United States has explained, in sufficient
detail, the multiple and time-consuming steps involved in the enactment
of legislation within the specific context of the legislative system of
the United States. It is generally accepted that certain of these steps
are not required by law, and that the majority of these steps are not
subject to compulsory minimum time limits. In other words, the United
States’ legislative process, while complex, is characterized by a
considerable degree of flexibility. That this flexibility is exercised
to achieve the prompt passage of legislation when this is considered
necessary and appropriate is revealed by the fact that bills have been
passed by the United States Congress within short periods of time, using
its “normal” legislative process. The United States has stated that
it “will make every effort to promptly implement the DSB’s
recommendations and rulings” in this case. Since this is a case where
the United States has to enact a piece of legislation to bring it into
compliance with its international treaty obligations under the covered
agreements, the United States Congress may reasonably be expected to use
all the flexibility available within its normal legislative procedures
to enact the required legislation as speedily as possible.
ARB.5.12.2 Canada — Patent Term,
paras. 63-64
(WT/DS170/10)
Canada has described, in detail, in its written submission the
different steps of the legislative phase of its law making process. The
passage of legislation requires, in essence, three readings in both
Houses of the Canadian Parliament, that is, the House of Commons and the
Senate. The process includes an examination of the proposed legislation
by committees, which normally takes place between the second and the
third reading. Once the House of Commons has considered the bill, it is
sent to the Senate for its consideration. After approval by the Senate,
the bill is given Royal Assent by the Governor-General. The different
steps in this process and their sequence are clearly structured and
defined. With respect to timing and scheduling, however, the process is
flexible, as Canada acknowledged at the oral hearing. Use of this
flexibility does not require recourse to extraordinary procedures.
Following earlier arbitration awards, I consider this flexibility to be
an important element in establishing the “reasonable period of time”.
Ultimately, the “reasonable period of time” appears to be a
function of the priority which Canada attributes to the amendment of its
Patent Act in order to bring it into conformity with its
obligations under Article 33 of the TRIPS Agreement. I recognize
that in all democratic societies, legislative initiatives designed to
satisfy different needs and wishes compete with each other. I share,
however, the view expressed in a recent arbitration award concerning
another Member, which I adopt only to the extent that it fits the
present case concerning Canada; it seems to me that this is the type of
matter for which the Canadian Parliament should try to comply with the
international obligations of Canada as soon as possible, taking
advantage of the flexibility that it has in its normal legislative
procedures.
ARB.5.12.3 EC — Tariff Preferences, para. 36
(WT/DS246/14)
As several previous arbitrators have noted, flexibility in a Member’s
legislative system may enable the Member to effect a legislative
amendment in a shorter period of time than might otherwise be possible.
In the present case, India submits that the European Communities’
legislative system “is characterised by considerable flexibility”. I
agree, in the sense that no mandatory minimum time periods are imposed
for any particular step in the implementation process as outlined by the
European Communities. The European Communities has used this flexibility
to modify Regulation 2501 (modifying or extending the GSP scheme)
promptly in the past. I take into account, as a relevant matter, the
flexibility in the European Communities’ legislative system; but it
does not, of itself, determine the question of the reasonable period of
time for implementation.
ARB.5.12.4 US — Gambling, para. 50
(WT/DS285/13)
In my view, the need for prompt compliance means that it is incumbent
upon the United States to use the flexibility available in its
legislative process to ensure rapid implementation. The United States is
not, however, obliged to have recourse to extraordinary legislative
procedures.
ARB.5.12.5 EC — Export Subsidies on Sugar,
paras. 76-77
(WT/DS265/33, WT/DS266/33, WT/DS283/14)
The European Communities’ legislative system is characterized by
“considerable flexibility”, in the sense that no mandatory minimum
time periods are imposed for any particular step in the legislative
process as outlined by the European Communities. Furthermore, as
acknowledged by the European Communities, it is possible that certain
steps of the legislative process may proceed in parallel. Thus, for
instance, the European Communities agrees that the Council may start
deliberating a Commission proposal, which is still being considered by
the European Parliament and the EESC. …
I take note of the “flexibility” available that the Council could
begin its examination of the Commission proposal of 22 June 2005 before
it receives the opinions of the European Parliament and the EESC. This
could save some time as compared with the Council examining the
Commission proposal only after receiving the opinion of the European
Parliament and the EESC. I agree, however, with the European Communities
that, even if the Council has begun examination of the Commission
proposal prior to receiving the opinions of the European Parliament and
the EESC, it will still require time to consider these opinions after it
has received them. As the Arbitrator in EC — Tariff Preferences noted,
“[i]f no such time were provided for this, it would defeat the purpose
of seeking the opinions.”
ARB.5.13 Relevance of legislative action on other measures
back to top
ARB.5.13.1 US — Gambling, para. 48
(WT/DS285/13)
… I am … unable to determine whether Congress’ inability to
pass previous bills was related to their complexity — a relevant
particular circumstance — or to their contentiousness — something
that would not constitute a relevant particular circumstance for
purposes of my determination.
ARB.5.13.2 US — Gambling,
paras. 53-54
(WT/DS285/13)
Antigua emphasizes the speed with which the 109th Congress has passed
legislation to date, pointing out that this Congress adopted 15 measures
through 19 June 2005. …
… Given that the 109th Congress has only been in session for half a
year, it follows that any law that it has adopted during that time must
have been adopted in less than half a year. Taken in isolation, however,
that fact is not probative of the average length of time that it takes
to pass legislation, nor of the relationship between the content of
specific legislation and the length of time that is required for it to
be passed. In the absence of any additional context that would allow me
to evaluate the significance of the time taken to pass the 15 measures
cited by Antigua, I do not consider this to be a particular circumstance
relevant to my determination.
ARB.5.13.3 US — Gambling, para. 55
(WT/DS285/13)
Antigua also points to the fact that the United States Congress took
just five months to pass the 2000 amendments to the IHA. I take note of
this fact. Given that these amendments relate to the same field as the
one in which the United States intends to implement in this case, I
consider it relevant that Congress was able to act so expeditiously on a
prior occasion.
ARB.5.13.4 US — Stainless Steel (Mexico) (Article 21.3(c)),
para. 52
(WT/DS344/15)
… I recognize that both the legislative and administrative means of
implementation proposed by the United States fall within this range of
permissible means that are capable of achieving the elimination of
simple zeroing “as such” in periodic reviews. …
ARB.5.13.5 US — Stainless Steel (Mexico) (Article 21.3(c)),
para. 53
(WT/DS344/15)
… It is widely accepted that implementation through administrative
action usually takes a shorter period of time than implementation
through legislative action. In the light of the parties’ responses to
questioning at the oral hearing, I am not persuaded that the United
States is not in a position to eliminate the simple zeroing methodology
in periodic reviews by administrative action, or that legislative
implementation would necessarily be more effective than administrative
implementation. In these circumstances, I turn to the period of time
within which administrative action eliminating the methodology of simple
zeroing in periodic reviews could be completed.
ARB.5.14 Existence of previous disputes relevant for determination of
reasonable period of time back to top
ARB.5.14.1 US — Stainless Steel (Mexico) (Article 21.3(c)),
paras. 63-64
(WT/DS344/15)
Finally, Mexico points out that several WTO disputes resemble the
present dispute in that they also concern the simple zeroing
methodologies employed by the United States, and have led to DSB
recommendations and rulings on this issue. …
The disputes to which Mexico refers are indeed distinct from the
present one. Those disputes involved different complainants and were at
different procedural stages of WTO dispute settlement, including
proceedings under Article 21.5 of the DSU. Given this context, I
consider that the particular circumstances of those disputes should be
attributed limited relevance to my determination of the reasonable
period of time in this arbitration.
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