The Committee notes that the provisions of Article 8.5 cannot be viewed strictly in
isolation, insofar as they form an integrated part of the whole of Part IV of the
Agreement. In this regard, the Committee recognizes the importance of the review procedure
under Article 8.4 and the seriousness with which Members are expected to treat it. In
particular, to the extent that Members may have questions about the consistency of a
notified programme with the conditions and criteria provided for in the provisions of
Article 8.2, the Committee would expect Members to make full and substantive use of the
procedures under Article 8.4 in order to clarify all relevant questions regarding a
notified programme. In the same vein, the Committee notes that, pursuant to Article 8.3, a
Member which is notifying a programme is required to provide sufficiently precise
information to enable other Members to evaluate the consistency of the programme with the
relevant conditions and criteria of Article 8.2. The Committee would, therefore, expect
notifying Members to cooperate as fully as possible in responding to the questions of
other Members in the course of the Article 8.4 review procedure.In short, the
Committee exhorts all Members to participate constructively and in good faith in the
notification and review process provided for in paragraphs 3 and 4 of Article 8 so as to
resolve any questions and concerns about notified programmes at the earliest opportunity.
Where appropriate, it is recognized that such efforts encompass the possibility of
concerned Members consulting informally prior to requesting arbitration in order to avoid
unnecessary arbitration requests. Finally, without prejudice to Members’ rights as
provided for under Article 8.5, the Committee notes that: (i) the interests of
clarity, predictability and greater legal certainty would be best served if arbitration
requests involving Committee determinations under Article 8.4 (or the failure of the
Committee to make a determination) were made as soon as practicable following the
conclusion of the procedure set forth in Article 8.4; and (ii) arbitration procedures
would be facilitated if requesting Members fully identify and describe those issues which
were not raised during the Article 8.4 procedure.
Procedures
The Committee
on Subsidies and Countervailing Measures hereby decides, pursuant to the decision of the
General Council of 31 January 1995 (WT/GC/M/1), to adopt the following procedures for use
in binding arbitration conducted pursuant to Article 8.5 of the Agreement on Subsidies and
Countervailing Measures. These procedures shall not add to or detract from the existing
rights and obligations of Members under the Agreement on Subsidies and Countervailing
Measures or under any other WTO Agreement.
I.
REQUESTS FOR ARBITRATION
1. Any Member
wishing to request arbitration under Article 8.5 shall address a written request to that
effect to the Chairman of the Committee on Subsidies and Countervailing Measures
("the Committee"). The request shall include:
(a) the basis
for the request, i.e. a determination by the Committee under Article 8.4, a failure by the
Committee to make such a determination, and/or the violation in individual cases of
subsidization of the conditions set out in a subsidy programme notified under Article 8.3;
(b) the
specific questions to be addressed by the arbitration body, as related to requirements
under the provisions of Article 8.2, and a statement of the position taken by the Member
requesting the arbitration with respect to each such question;
(c) a brief
summary of the information on which the request is based.
2. Any
request for arbitration shall be circulated immediately to the Members.
3. Without
prejudice to the right of any Member to request arbitration, Members should take into
account the need to avoid undue multiplication of arbitration proceedings in respect of
the same programme, and should therefore avail themselves of the procedures under
paragraph 4 for becoming Parties, or the procedures under paragraph 17 for becoming Third
Parties, to an arbitration.
4. In order
to become Parties to the arbitration proceeding, other Members shall have a period of 15
days after the date of circulation of the request for arbitration to provide the Chairman
of the Committee with a communication which shall conform with the requirements for
requests for arbitration set forth in paragraph 1. Any such communication shall be
circulated immediately to the Members.
5. During the
30-day period referred to in paragraph 10, Parties also may agree, subject to the
provisions of Section VI, to any supplemental or alternative procedures for arbitration
under Article 8.5 to those specified herein, provided that such supplemental or
alternative procedures are not incompatible with Article 8.5. Any such supplemental or
alternative procedures shall be promptly notified to the Members. In the event that there
is no agreement by all Parties on such supplemental or alternative procedures, the
procedures specified herein shall apply exclusively and in full.
II.
REFERRAL TO ARBITRATION
6. As soon as
the composition of the arbitration body has been decided, a notice to that effect shall be
circulated promptly to the Members.
7. For
purposes of Article 8.5, the date of circulation of the notice under paragraph 6 shall be
deemed to be the date on which the matter is referred to the arbitration body.
III.
PARTIES TO THE ARBITRATION PROCEEDING
8. The
Parties to the arbitration proceeding shall be the Member which has notified the subsidy
programme in question, the Member which requests the arbitration, and any other Member
which has become a Party to the arbitration in accordance with paragraph 4.
IV.
COMPOSITION OF THE ARBITRATION BODY
9. The
arbitration body shall consist of three arbitrators, unless the Parties agree to a
different uneven number.
10. The
members of the arbitration body and its president shall be appointed by agreement of the
Parties. If the Parties do not reach agreement within 30 days after the date of
circulation of the request for arbitration, unless the Parties agree on a longer period,
any Party may request the Director-General of the WTO to appoint, in consultation with the
Chairman of the Committee, the arbitrator or arbitrators not yet appointed. Such
appointment shall be made, after consultation with the Parties, within 10 days of the
request to the Director-General.
11. Except as
the Parties otherwise agree, the arbitrators shall not be citizens of any of the Parties
or Third Parties to the arbitration proceeding.
12. The
arbitrators shall be chosen from among persons with relevant legal, economic, financial or
technical expertise, including expertise in the Agreement on Subsidies and Countervailing
Measures, with respect to the matter referred to the arbitration body.
13. Based
upon nominations put forward by delegations and approved by the Committee, the Secretariat
shall maintain an indicative list of qualified persons from which arbitrators may be
selected. This list shall include an identification of each person's academic and/or
professional background and qualifications.
14. Where a
Party to an arbitration is a developing country Member, the arbitration body shall, if the
developing country Member so requests, include at least one arbitrator from a developing
country Member.
V.
TERMS OF REFERENCE OF THE ARBITRATION BODY
15. If a
request for arbitration pertains to a determination of the Committee under Article 8.4, or
a failure of the Committee to make such a determination, the arbitration body shall
determine, in light of the specific questions raised under paragraphs 1 and 4 by the
Parties to the arbitration, whether the subsidy programme notified under Article 8.3 does
not meet the conditions and criteria of Article 8.2.
16. If a
request for arbitration pertains to alleged violation in individual cases of the
conditions set out in a subsidy programme notified under Article 8.3, the arbitration body
shall determine, in light of the specific questions raised under paragraphs 1 and 4 by the
Parties to the arbitration, whether or not individual cases of subsidization violate the
conditions set out in the subsidy programme notified under Article 8.3. If a Party so
requested under paragraph 1 or 4, the arbitration body also shall determine whether
the programme in question does not meet the conditions and criteria of Article 8.2.
VI.
THIRD PARTIES
17. A Member
not wishing to become a Party to the arbitration, but wishing instead to participate in
the arbitration on a limited basis, shall have a period of 20 days after the date of
circulation of the request for arbitration to inform the Chairman of the Committee in
writing that it wishes to become a Third Party to the arbitration proceeding. A Third
Party may intervene only with respect to specific questions raised by Parties.
18. A Member
that has informed the Committee under paragraph 17 of its interest to participate as a
Third Party in the arbitration proceeding shall have the right to make a written
submission to the arbitration body and to receive copies of written submissions of the
Parties to the arbitration proceeding, shall have an opportunity to be heard at meetings
of the arbitration body, and shall otherwise have the right to participate in the
arbitration proceeding as specified elsewhere in these procedures. A Third Party may not
participate in the selection of arbitrators or in the establishment of the arbitration
body's working procedures.
VII.
WORKING PROCEDURES
19. The
arbitration proceedings shall be conducted on the basis of written submissions and
documents. The Parties and Third Parties to the arbitration proceedings shall make written
submissions within time periods to be determined by the arbitration body after
consultation with the Parties. The arbitration body shall decide whether further written
submissions are necessary and shall fix a period of time for such submissions after
consulting the Parties.
20. The
arbitration body also may hold meetings with the Parties and shall hold one such meeting
if any Party so requests at an appropriate stage of the proceedings. Any such meeting
normally shall include Third Parties. If in exceptional circumstances the arbitration body
holds a meeting with Parties only, the arbitration body also shall, upon request of a
Third Party, hold one session for Third Parties to present their views, at which Parties
shall have the right to be present. Written texts of the oral statements made by Parties
and Third Parties shall be submitted to the arbitration body, and shall consist only of
the information and views actually presented orally.
VIII.
PROCESS
21. The
proceedings of the arbitration body shall be confidential. Written submissions to the
arbitration body shall be treated as confidential. The arbitration body and all Parties
and Third Parties to a proceeding shall treat as confidential any information submitted to
the arbitration body which the submitter has designated as confidential. Nothing in these
procedures shall preclude a Party or a Third Party to an arbitration from disclosing
statements of its own positions to the public.
22. A Party
or Third Party to an arbitration shall make available to all other Parties and Third
Parties its written submissions. A Party or a Third Party shall also, upon request of a
Member, provide a non-confidential summary of the information contained in its written
submissions that could be disclosed to the public. When providing a non-confidential
summary, a Party or Third Party will duly take into account the expeditious nature of
these proceedings.
23. There
shall be no ex parte communications with the arbitration body concerning matters
under consideration by the arbitration body.
24. Before
presenting its conclusions, the arbitration body shall provide to the Parties and Third
Parties a written summary of the information on which it intends to base its conclusions.
The arbitration body shall provide an opportunity for the Parties and Third Parties to
comment, within a time period to be established by the arbitration body, on the written
summary. Each Third Party shall have the right to comment only on those sections of the
written summary which pertain to the specific questions that that Third Party has
addressed.
25. The
arbitration proceedings shall take place at the seat of the World Trade Organization.
26. The WTO
Secretariat shall act as Secretariat to the arbitration body, and shall perform all
administrative functions necessary to assist the arbitration body, including the receipt
and circulation of communications related to arbitration requests, and the maintenance of
an organized permanent record for each arbitration proceeding.
IX.
INFORMATION BEFORE THE ARBITRATION BODY
27. The
arbitration body shall proceed on the basis of the information before it, to include such
of the following as exist and are relevant:
(a) the
notifications of the subsidy programme in question, and any yearly updates of such
notifications;
(b) the
findings of the Secretariat, the minutes of the Committee and the determination by the
Committee, as recorded during the procedure under Article 8.4;
(c) the
documents and arguments submitted to the Secretariat and the Committee in the procedure
under Article 8.4;
(d) the
record(s) of any previous arbitration(s) related to the same programme;
(e) any
information provided to the arbitration body by the Parties and Third Parties under these
procedures;
(f) any
information or technical advice obtained by the arbitration body under the provisions of
paragraphs 28, 29, and 30.
28. A Member
should respond promptly and fully to any request by an arbitration body for such
information as the arbitration body considers necessary and appropriate.
29. The
arbitration body shall have the right to seek information and technical advice from any
individual or body which it deems appropriate. However, before an arbitration body seeks
such information or technical advice from any individual or body within the jurisdiction
of a Member it shall inform the authorities of that Member.
30. The
Parties and Third Parties shall have full access to any requests for information or
technical advice under this or the preceding two paragraphs, as well as to any information
or technical advice obtained thereby. At the time that it requests information or
technical advice under this or the preceding two paragraphs, the arbitration body shall
obtain the agreement of the individual, body or Member to disclose to the Parties and
Third Parties all such information or technical advice. The Parties and Third Parties
shall treat as confidential any information or technical advice that an individual, body
or Member has designated as confidential. The arbitration body shall provide an
opportunity to the Parties and Third Parties to comment upon any information or technical
advice obtained under this or the preceding two paragraphs.
X.
RULES OF CONDUCT
31. As
provided in paragraph IV:1 of the Rules of Conduct for the Understanding on Rules and
Procedures Governing the Settlement of Disputes, the Rules of Conduct apply to arbitrators
acting pursuant to Article 8.5, and to those members of the Secretariat called upon to
assist in arbitration proceedings pursuant to Article 8.5. In addition, the Rules of
Conduct shall apply to any individual from whom any information or technical advice is
sought under paragraphs 28, 29 and 30 of these procedures.
XI.
CONCLUSIONS OF THE ARBITRATION BODY
32. The
conclusions of the arbitration body shall consist of a determination, in light of the
specific questions raised under paragraphs 1 and 4 by the Parties to the arbitration, of
whether the subsidy programme notified under Article 8.3 does not meet the conditions and
criteria of Article 8.2, and/or whether or not the individual cases of subsidization
violate the conditions set out in the subsidy programme notified under Article 8.3.
33. The
arbitration body shall present to the Members its conclusions and the reasons on which
those conclusions are based in the form of a single, collegial decision, within 120 days
from the date of circulation of the notice under paragraph 6.
34. These
conclusions shall be binding in accordance with Article 8.5.
XII.
REVIEW OF THESE PROCEDURES
35. Without
prejudice to Article 31 of the Agreement on Subsidies and Countervailing Measures, the
Committee shall, no later than five years after the adoption of these procedures, review
their operation, and may decide at that time on any modifications to them.
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