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United States - Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India - AB-2014-7 - Report of the Appellate Body
日期:2014/12/08
作者:The Appellate Body
文件編號:WT/DS436/AB/R
附件下載:WTDS436ABR.doc
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United States – COUNTERVAILING MEASURES ON CERTAIN
HOT-ROLLED CARBON STEEL FLAT PRODUCTS FROM INDIA

AB-2014-7

Report of the Appellate Body

 


Table of Contents

 

1            Introduction.. 17

1.1        Panel proceedings. 17

1.2        Appellate proceedings. 21

2            Arguments of the Participants and Third Participants. 22

2.1        Claims of error by India – Appellant. 22

2.1.1      The Panel's terms of reference. 22

2.1.1.1   ......................................... The meaning of the word "initiated" in India's panel request 22

2.1.1.2   ........................................... Relevance of prejudice and questions during consultations. 23

2.1.1.3   .............................................................................................. Completion of the analysis. 24

2.1.2      Public Body. 24

2.1.2.1   Interpretation and application of Article 1.1(a)(1) of the SCM Agreement: Public Bodies. 25

2.1.2.2   ....................................................................................................... Article 11 of the DSU. 26

2.1.2.3   .............................................................................................. Completion of the analysis. 27

2.1.3      Financial contribution. 28

2.1.3.1   ...................................................................................................... Captive mining rights. 28

2.1.3.2   ........................................................................................................................ SDF loans. 30

2.1.4      Benefit – "As such" claims. 32

2.1.4.1   Assessment of the adequacy of remuneration for government-provided goods required under Article 14(d) of the SCM Agreement 32

2.1.4.2   Exclusion of government prices as benchmarks under the US benchmarking mechanism   33

2.1.4.3   .............. Use of world market prices under Tier II of the US benchmarking mechanism.. 34

2.1.4.4   The Panel's failure to assess two grounds of India's "as such" claim against the US benchmarking mechanism.. 36

2.1.4.5   Mandatory use of "as delivered" prices as benchmarks under the US benchmarking mechanism   38

2.1.5      Benefit – "As applied" claims. 41

2.1.5.1   The USDOC's determination that the NMDC provided iron ore for less than adequate remuneration  41

2.1.5.2   The USDOC's determination that the GOI provided iron ore for less than adequate remuneration through its grant of captive mining rights. 45

2.1.5.3   The USDOC's determination that SDF loans conferred a benefit within the meaning of Article 14(b) of the SCM Agreement 46

2.1.6      Specificity. 47

2.1.6.1   ............................................................. Discrimination in favour of "certain enterprises". 47

2.1.6.2   .............................. The meaning of the phrase "limited number of certain enterprises". 48

2.1.6.3   ................................................................................... Provision of goods and specificity. 49

2.1.7      Facts available. 50

2.1.7.1   ...................................................... Interpretation of Article 12.7 of the SCM Agreement 50

2.1.7.2   .......................................................................................... The Panel's "as such" finding. 51

2.1.7.3   ...................................................................................... The Panel's "as applied" finding. 52

2.1.8      New subsidy allegations. 53

2.2        Arguments of the United States – Appellee. 55

2.2.1      The Panel's terms of reference. 55

2.2.1.1   ......................................... The meaning of the word "initiated" in India's panel request 55

2.2.1.2   ........................................... Relevance of prejudice and questions during consultations. 56

2.2.1.3   ..................................................................................... Completion of the legal analysis. 56

2.2.2      Public Body. 57

2.2.2.1   Interpretation and application of Article 1.1(a)(1) of the SCM Agreement: Public Bodies. 57

2.2.2.2   ....................................................................................................... Article 11 of the DSU. 59

2.2.2.3   ..................................................................................... Completion of the legal analysis. 60

2.2.3      Financial contribution. 61

2.2.3.1   ...................................................................................................... Captive mining rights. 61

2.2.3.2   ........................................................................................................................ SDF loans. 62

2.2.4      Benefit – "As such" claims. 64

2.2.4.1   Assessment of the adequacy of remuneration for government-provided goods required under Article 14(d) of the SCM Agreement 64

2.2.4.2   Exclusion of government prices as benchmarks under the US benchmarking mechanism   65

2.2.4.3   .............. Use of world market prices under Tier II of the US benchmarking mechanism.. 67

2.2.4.4   The Panel's failure to assess two grounds of India's "as such" claim against the US benchmarking mechanism.. 69

2.2.4.5   Mandatory use of "as delivered" benchmarks under the US benchmarking mechanism.. 71

2.2.5      Benefit – "As applied" claims. 73

2.2.5.1   The USDOC's determination that the NMDC provided iron ore for less than adequate remuneration  73

2.2.5.2   The USDOC's determination that the GOI provided iron ore for less than adequate remuneration through its grant of captive mining rights. 77

2.2.5.3   The USDOC's determination that SDF loans conferred a benefit within the meaning of Article 14(b) of the SCM Agreement 78

2.2.6      Specificity. 79

2.2.6.1   ............................................................. Discrimination in favour of "certain enterprises". 79

2.2.6.2   .............................. The meaning of the phrase "limited number of certain enterprises". 80

2.2.6.3   ................................................................................... Provision of goods and specificity. 81

2.2.7      Facts available. 82

2.2.7.1   ...................................................... Interpretation of Article 12.7 of the SCM Agreement 82

2.2.7.2   ........................................................................................ The Panel's "as such" findings. 83

2.2.7.3   ..................................................................................... The Panel's "as applied" findings. 84

2.2.8      New subsidy allegations. 85


2.3        Claims of error by the United States – Other appellant. 87

2.3.1      Public Body. 87

2.3.2      Cross-cumulation. 90

2.3.2.1   Interpretation of Article 15.3 and Articles 15.1, 15.2, 15.4, and 15.5 of the SCM Agreement 90

2.3.2.2   ....................................................................................................... Article 11 of the DSU. 92

2.4        Arguments of India – Appellee. 93

2.4.1      Public Body. 93

2.4.2      Cross-cumulation. 94

2.4.2.1   Interpretation of Article 15.3 and Articles 15.1, 15.2, 15.4, and 15.5 of the SCM Agreement 95

2.4.2.2   ....................................................................................................... Article 11 of the DSU. 96

2.5        Arguments of the third participants. 97

2.5.1      Australia. 97

2.5.2      Canada. 98

2.5.3      China. 99

2.5.4      European Union. 104

2.5.5      Saudi Arabia. 109

3            Issues Raised in This Appeal. 112

4            ANALYSIS OF THE APPELLATE BODY. 114

4.1        Article 1.1(a)(1) of the SCM Agreement – Public body. 114

4.1.1      Introduction. 114

4.1.2      The legal standard for determining whether an entity is a public body under Article 1.1(a)(1) of the SCM Agreement 115

4.1.2.1   ....................................................................................... Arguments by the participants. 116

4.1.2.2   ..................................................................................... Preliminary issue raised by India. 117

4.1.2.3   .................................................................. The interpretation of the term "public body". 117

4.1.3      Whether the Panel erred in its analysis of the USDOC's determination that the NMDC is a public body  121

4.2        The Panel's preliminary ruling on its terms of reference. 128

4.3        Article 1.1(a)(1) of the SCM Agreement – Financial contribution. 128

4.3.1      Captive mining rights. 128

4.3.1.1   ........................................................................................................ The Panel's findings. 128

4.3.1.2   Whether the GOI's grant of mining rights constitutes a provision of goods within the meaning of Article 1.1(a)(1)(iii) of the SCM Agreement 129

4.3.1.3   ................................. Whether the Panel acted inconsistently with Article 11 of the DSU. 132

4.3.2      SDF loans. 134

4.3.2.1   ........................................................................................................ The Panel's findings. 134

4.3.2.2   .................................................................................................. India's claims on appeal 135

4.3.2.3   ....................................................................... Article 1.1(a)(1)(i) of the SCM Agreement 136

4.3.2.4   Whether SDF loans constitute direct transfers of funds within the meaning of Article 1.1(a)(1)(i) of the SCM Agreement 139

4.4        Article 14 of the SCM Agreement – Benefit. 140

4.4.1      "As such" claims under Article 14(d) of the SCM Agreement 140

4.4.1.1   .................................................................................................................... Introduction. 140

4.4.1.2   Whether Article 14(d) of the SCM Agreement requires separate analyses of "adequacy of remuneration" and of "benefit". 142

4.4.1.3   India's claims concerning the use of benchmarks under the US benchmarking mechanism   147

4.4.1.4   India's claims concerning the mandatory use of "as delivered" prices under the US benchmarking mechanism.. 163

4.4.2      "As applied" claims under Article 14(d) of the SCM Agreement 173

4.4.2.1   .................................... India's claims concerning the provision of iron ore by the NMDC. 173

4.4.2.2   ............................. India's claims concerning captive mining rights for iron ore and coal 186

4.4.2.3   ............................................................................... India's claims concerning SDF loans. 189

4.5        Article 2 of the SCM Agreement – Specificity. 193

4.5.1      The Panel's findings. 193

4.5.2      India's challenge to the Panel's finding regarding de facto specificity. 195

4.5.2.1   ...................... Use of a subsidy programme by a limited number of certain enterprises. 197

4.5.2.2   Whether the first factor of Article 2.1(c) requires a finding of discrimination between "certain enterprises" and other, similarly situated enterprises. 200

4.5.2.3   ................................................................ Provisions of goods and findings of specificity. 202

4.6        Article 12.7 of the SCM Agreement. 205

4.6.1      India's claim that the Panel erred in its interpretation of Article 12.7 of the SCM Agreement 205

4.6.1.1   ........................................................................................................ The Panel's findings. 206

4.6.1.2   ...................................................... Interpretation of Article 12.7 of the SCM Agreement 207

4.6.1.3   .................................................................................. Evaluation of India's claim of error 212

4.6.2      Whether the Panel erred under Article 11 of the DSU in ascertaining the meaning of Section 1677e(b) of the US Statute and Section 351.308(a)-(c) of the US Regulations. 214

4.6.2.1   ........................................................................................................ The Panel's findings. 215

4.6.2.2   ...................................... Evaluation of India's claim of error under Article 11 of the DSU. 216

4.6.3      Completion of the legal analysis of whether the measure at issue is "as such" inconsistent with Article 12.7 of the SCM Agreement 220

4.6.3.1   .................................................................................................................... Introduction. 220

4.6.3.2   The text of Section 1677e(b) of the US Statute and Section 351.308(a)-(c) of the US Regulations  221

4.6.3.3   Other evidence relating to the meaning and construction of Section 1677e(b) of the US Statute and Section 351.308(a)-(c) of the US Regulations. 224

4.6.3.4   ...................................................................................................................... Conclusion. 228

4.6.4      The consistency of the measure with Article 12.7 of the SCM Agreement "as applied" – Use of the highest non-de minimis subsidy rate. 229

4.6.4.1   Whether the Panel applied an "unnecessary burden of proof" in respect of India's claim on the use of highest non-de minimis subsidy rates. 229

4.6.4.2   ............................................................................................... Evaluation of India's claim.. 230

4.6.5      Whether the Panel acted inconsistently with its obligations under Article 11 of the DSU in finding that India had failed to make a prima facie case in respect of its claim that the 2013 sunset review violated Article 12.7 of the SCM Agreement 232

4.6.5.1   ............................................................................................... Evaluation of India's claim.. 233

4.7        New subsidy allegations. 234

4.7.1      Introduction. 234

4.7.2      The Panel's findings. 235

4.7.3      Review of the Panel's analysis of India's claims under Articles 11.1, 13.1, 21.1, 21.2, 22.1, and 22.2 of the SCM Agreement 237

4.7.3.1   Applicability of Articles 11, 13, 21, and 22 of the SCM Agreement to the examination of new subsidy allegations in administrative reviews. 237

4.7.3.2   Whether the Panel erred in rejecting India's claims that the examination by the USDOC of new subsidy allegations in administrative reviews is inconsistent with Articles 11.1, 13.1, 21.1, 21.2, 22.1, and 22.2 of the SCM Agreement 243

4.7.3.3   ................ Whether the Panel acted inconsistently with Articles 11 and 12.7 of the DSU. 246

4.7.4      Conclusion. 247

4.8        Cumulative assessment of imports in countervailing duty investigations. 247

4.8.1      Claims under Article 15 of the SCM Agreement 247

4.8.1.1   ........................................................................................................ The Panel's findings. 247

4.8.1.2   .................................................................................... Article 15 of the SCM Agreement 249

4.8.1.3   ......................................................................................... Review of the Panel's analysis. 252

4.8.2      Claims under Article 11 of the DSU. 255

4.8.2.1   ......................................................... The Panel's findings regarding Section 1677(7)(G) 255

4.8.2.2   ........................................................................................... Arguments raised on appeal 255

4.8.2.3   ...................................................... Review of the Panel's analysis of Section 1677(7)(G) 256

5            Findings And Conclusions. 261

 

ANNEX 1      NOTIFICATION OF AN APPEAL BY INDIA. 265

ANNEX 2  NOTIFICATION OF AN OTHER APPEAL BY THE UNITED STATES  281

ANNEX 3  PROCEDURAL RULING BY THE APPELLATE BODY  283


ABBREVIATIONS USED IN THIS REPORT

 

Abbreviation

Description

Anti-Dumping Agreement

Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994

DSB

Dispute Settlement Body

DSU

Understanding on Rules and Procedures Governing the Settlement of Disputes

f.o.b

free on board

GATT 1994

General Agreement on Tariffs and Trade 1994

GOI

Government of India

Hoda Report

National Mineral Policy, Report of the High Level Committee (December 2006), attached to 2006 New Subsidy Allegations (Tata) (Panel Exhibit USA-71)

JPC

Joint Plant Committee

JSW

Jindal Steel Works

NMDC

National Mineral Development Corporation

OTR

Off-the-road

Panel Report

Panel Report, United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India (WT/DS436/R)

PSNR

Permanent sovereignty over one's natural resources

SCM Agreement

Agreement on Subsidies and Countervailing Measures

SDF

Steel Development Fund

SOCB

State-owned commercial bank

Tata

Tata Steel Limited

TPS

Target Plus Scheme

US Tariff Act

United States Tariff Act of 1930, Public Law No. 1202-1527, 46 Stat. 741

US Regulations

United States Code of Federal Regulations, Title 19, Volume 3, Chapter III, Part 351

US Statute

United States Code, Title 19, Chapter 4, Subtitle IV

USDOC

US Department of Commerce

USITC

US International Trade Commission

VMPL

Vijayanagar Minerals Pvt. Ltd.

Working Procedures

Working Procedures for Appellate Review, WT/AB/WP/6, 16 August 2010

WTO

World Trade Organization

WTO Agreement

Marrakesh Agreement Establishing the World Trade Organization


CASES CITED IN THIS REPORT

Short title

Full case title and citation

Australia – Apples

Appellate Body Report, Australia – Measures Affecting the Importation of Apples from New Zealand, WT/DS367/AB/R, adopted 17 December 2010, DSR 2010:V, p. 2175

Australia – Salmon

Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, p. 3327

Brazil – Desiccated Coconut

Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut, WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, p. 167

Brazil – Retreaded Tyres

Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/AB/R, adopted 17 December 2007, DSR 2007:IV, p. 1527

Canada – Aircraft

Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft, WT/DS70/AB/R, adopted 20 August 1999, DSR 1999:III, p. 1377

Canada – Aircraft

Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft, WT/DS70/R, adopted 20 August 1999, upheld by Appellate Body Report WT/DS70/AB/R, DSR 1999:IV, p. 1443

Canada – Aircraft
(Article 21.5 – Brazil)

Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft – Recourse by Brazil to Article 21.5 of the DSU, WT/DS70/AB/RW, adopted 4 August 2000, DSR 2000:IX, p. 4299

Canada – Autos

Appellate Body Report, Canada – Certain Measures Affecting the Automotive Industry, WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, DSR 2000:VI, p. 2985

Canada – Continued Suspension

Appellate Body Report, Canada – Continued Suspension of Obligations in the EC – Hormones Dispute, WT/DS321/AB/R, adopted 14 November 2008, DSR 2008:XIV, p. 5373

Canada – Dairy

Appellate Body Report, Canada – Measures Affecting the Importation of Milk and the Exportation of Dairy Products, WT/DS103/AB/R, WT/DS113/AB/R and Corr.1, adopted 27 October 1999, DSR 1999:V, p. 2057

Canada – Dairy
(Article 21.5 – New Zealand and US)

Appellate Body Report, Canada – Measures Affecting the Importation of Milk and the Exportation of Dairy Products – Recourse to Article 21.5 of the DSU by New Zealand and the United States, WT/DS103/AB/RW, WT/DS113/AB/RW, adopted 18 December 2001, DSR 2001:XIII, p. 6829

Canada – Dairy
(Article 21.5 – New Zealand and US II)

Appellate Body Report, Canada – Measures Affecting the Importation of Milk and the Exportation of Dairy Products – Second Recourse to Article 21.5 of the DSU by New Zealand and the United States, WT/DS103/AB/RW2, WT/DS113/AB/RW2, adopted 17 January 2003, DSR 2003:I, p. 213

Canada – Periodicals

Appellate Body Report, Canada – Certain Measures Concerning Periodicals, WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, p. 449

Canada – Renewable Energy /
Canada – Feed-in Tariff Program

Appellate Body Reports, Canada – Certain Measures Affecting the Renewable Energy Generation Sector / Canada – Measures Relating to the Feed-in Tariff Program, WT/DS412/AB/R / WT/DS426/AB/R, adopted 24 May 2013

Chile – Price Band System (Article 21.5 – Argentina)

Appellate Body Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products – Recourse to Article 21.5 of the DSU by Argentina, WT/DS207/AB/RW, adopted 22 May 2007, DSR 2007:II, p. 513

China – Auto Parts

Appellate Body Reports, China – Measures Affecting Imports of Automobile Parts, WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, adopted 12 January 2009, DSR 2009:I, p. 3

China – Autos (US)

Panel Report, China – Anti-Dumping and Countervailing Duties on Certain Automobiles from the United States, WT/DS440/R and Add.1, adopted 18 June 2014

China – Broiler Products

Panel Report, China - Anti-Dumping and Countervailing Duty Measures on Broiler Products from the United States, WT/DS427/R and Add.1, adopted 25 September 2013

China – GOES

Appellate Body Report, China – Countervailing and Anti-Dumping Duties on Grain Oriented Flat-Rolled Electrical Steel from the United States, WT/DS414/AB/R, adopted 16 November 2012, DSR 2012:XII, p. 6251

China – GOES

Panel Report, China – Countervailing and Anti-Dumping Duties on Grain Oriented Flat-Rolled Electrical Steel from the United States, WT/DS414/R and Add.1, adopted 16 November 2012, upheld by Appellate Body Report WT/DS414/AB/R, DSR 2012:XII, p. 6369

China – Rare Earths

Appellate Body Reports, China – Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum, WT/DS431/AB/R / WT/DS432/AB/R / WT/DS433/AB/R, adopted 29 August 2014

China – Raw Materials

Appellate Body Reports, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted 22 February 2012, DSR 2012:VII, p. 3295

Dominican Republic – Import and Sale of Cigarettes

Appellate Body Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted 19 May 2005, DSR 2005:XV, p. 7367

EC – Asbestos

Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos‑Containing Products, WT/DS135/AB/R, adopted 5 April 2001, DSR 2001:VII, p. 3243

EC – Bed Linen

Appellate Body Report, European Communities – Anti‑Dumping Duties on Imports of Cotton‑Type Bed Linen from India, WT/DS141/AB/R, adopted 12 March 2001, DSR 2001:V, p. 2049

EC – Bed Linen
(Article 21.5 – India)

Appellate Body Report, European Communities – Anti‑Dumping Duties on Imports of Cotton‑Type Bed Linen from India – Recourse to Article 21.5 of the DSU by India, WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, p. 965

EC – Chicken Cuts

Appellate Body Report, European Communities – Customs Classification of Frozen Boneless Chicken Cuts, WT/DS269/AB/R, WT/DS286/AB/R, adopted 27 September 2005, and Corr.1, DSR 2005:XIX, p. 9157

EC – Countervailing Measures on DRAM Chips

Panel Report, European Communities – Countervailing Measures on Dynamic Random Access Memory Chips from Korea, WT/DS299/R, adopted 3 August 2005, DSR 2005:XVIII, p. 8671

EC – Export Subsidies on Sugar

Appellate Body Report, European Communities – Export Subsidies on Sugar, WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, adopted 19 May 2005, DSR 2005:XIII, p. 6365

EC – Fasteners (China)

Appellate Body Report, European Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China, WT/DS397/AB/R, adopted 28 July 2011, DSR 2011:VII, p. 3995

EC – Hormones

Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, p. 135

EC – Poultry

Appellate Body Report, European Communities – Measures Affecting the Importation of Certain Poultry Products, WT/DS69/AB/R, adopted 23 July 1998, DSR 1998:V, p. 2031

EC – Sardines

Appellate Body Report, European Communities – Trade Description of Sardines, WT/DS231/AB/R, adopted 23 October 2002, DSR 2002:VIII, p. 3359

EC – Seal Products

Appellate Body Reports, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/AB/R / WT/DS401/AB/R, adopted 18 June 2014

EC – Selected Customs Matters

Appellate Body Report, European Communities – Selected Customs Matters, WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX, p. 3791

EC – Tube or Pipe Fittings

Appellate Body Report, European Communities – Anti‑Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/AB/R, adopted 18 August 2003, DSR 2003:VI, p. 2613

EC and certain member States – Large Civil Aircraft

Appellate Body Report, European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted 1 June 2011, DSR 2011:I, p. 7

India – Patents (US)

Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, p. 9

Japan – Agricultural Products II

Appellate Body Report, Japan – Measures Affecting Agricultural Products, WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, p. 277

Japan – Apples

Appellate Body Report, Japan – Measures Affecting the Importation of Apples, WT/DS245/AB/R, adopted 10 December 2003, DSR 2003:IX, p. 4391

Japan – DRAMs (Korea)

Appellate Body Report, Japan – Countervailing Duties on Dynamic Random Access Memories from Korea, WT/DS336/AB/R and Corr.1, adopted 17 December 2007, DSR 2007:VII, p. 2703

Japan – DRAMs (Korea)

Panel Report, Japan – Countervailing Duties on Dynamic Random Access Memories from Korea, WT/DS336/R, adopted 17 December 2007, as modified by Appellate Body Report WT/DS336/AB/R, DSR 2007:VII, p. 2805

Korea – Alcoholic Beverages

Appellate Body Report, Korea – Taxes on Alcoholic Beverages, WT/DS75/AB/R, WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:I, p. 3

Korea – Commercial Vessels

Panel Report, Korea – Measures Affecting Trade in Commercial Vessels, WT/DS273/R, adopted 11 April 2005, DSR 2005:VII, p. 2749

Korea – Dairy

Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, p. 3

Korea – Procurement

Panel Report, Korea – Measures Affecting Government Procurement, WT/DS163/R, adopted 19 June 2000, DSR 2000:VIII, p. 3541

Mexico – Anti‑Dumping Measures on Rice

Appellate Body Report, Mexico – Definitive Anti‑Dumping Measures on Beef and Rice, Complaint with Respect to Rice, WT/DS295/AB/R, adopted 20 December 2005, DSR 2005:XXII, p. 10853

Mexico – Anti‑Dumping Measures on Rice

Panel Report, Mexico – Definitive Anti‑Dumping Measures on Beef and Rice, Complaint with Respect to Rice, WT/DS295/R, adopted 20 December 2005, as modified by Appellate Body Report WT/DS295/AB/R, DSR 2005:XXIII, p. 11007

Mexico – Corn Syrup
(Article 21.5 – US)

Appellate Body Report, Mexico – Anti‑Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSU by the United States, WT/DS132/AB/RW, adopted 21 November 2001, DSR 2001:XIII, p. 6675

Philippines – Distilled Spirits

Appellate Body Reports, Philippines – Taxes on Distilled Spirits, WT/DS396/AB/R / WT/DS403/AB/R, adopted 20 January 2012, DSR 2012:VIII, p. 4163

Thailand – H‑Beams

Appellate Body Report, Thailand – Anti‑Dumping Duties on Angles, Shapes and Sections of Iron or Non‑Alloy Steel and H‑Beams from Poland, WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII, p. 2701

US – Anti-Dumping and Countervailing Duties (China)

Appellate Body Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WT/DS379/AB/R, adopted 25 March 2011, DSR 2011:V, p. 2869

US – Anti-Dumping and Countervailing Duties (China)

Panel Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WT/DS379/R, adopted 25 March 2011, as modified by Appellate Body Report WT/DS379/AB/R, DSR 2011:VI, p. 3143

US – Carbon Steel

Appellate Body Report, United States – Countervailing Duties on Certain Corrosion‑Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779

US – Carbon Steel

Panel Report, United States – Countervailing Duties on Certain Corrosion‑Resistant Carbon Steel Flat Products from Germany, WT/DS213/R and Corr.1, adopted 19 December 2002, as modified by Appellate Body Report WT/DS213/AB/R, DSR 2002:IX, p. 3833

US – Carbon Steel (India)

Panel Report, United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India, WT/DS436/R and Add.1, circulated to WTO Members 14 July 2014

US – Clove Cigarettes

Appellate Body Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/AB/R, adopted 24 April 2012, DSR 2012: XI, p. 5751

US – Continued Suspension

Appellate Body Report, United States – Continued Suspension of Obligations in the EC – Hormones Dispute, WT/DS320/AB/R, adopted 14 November 2008, DSR 2008:X, p. 3507

US – Continued Zeroing

Appellate Body Report, United States – Continued Existence and Application of Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009, DSR 2009:III, p. 1291

US – Corrosion‑Resistant Steel Sunset Review

Appellate Body Report, United States – Sunset Review of Anti‑Dumping Duties on Corrosion‑Resistant Carbon Steel Flat Products from Japan, WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, p. 3

US – Corrosion‑Resistant Steel Sunset Review

Panel Report, United States – Sunset Review of Anti‑Dumping Duties on Corrosion‑Resistant Carbon Steel Flat Products from Japan, WT/DS244/R, adopted 9 January 2004, as modified by Appellate Body Report WT/DS244/AB/R, DSR 2004:I, p. 85

US – Countervailing and Anti‑Dumping Measures (China)

Appellate Body Report, United States – Countervailing and Anti-Dumping Measures on Certain Products from China, WT/DS449/AB/R and Corr.1, adopted 22 July 2014

US – Countervailing Duty Investigation on DRAMS

Appellate Body Report, United States – Countervailing Duty Investigation on Dynamic Random Access Memory Semiconductors (DRAMS) from Korea, WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI, p. 8131

US – Countervailing Duty Investigation on DRAMS

Panel Report, United States – Countervailing Duty Investigation on Dynamic Random Access Memory Semiconductors (DRAMS) from Korea, WT/DS296/R, adopted 20 July 2005, as modified by Appellate Body Report WT/DS296/AB/R, DSR 2005:XVII, p. 8243

US – Countervailing Measures on Certain EC Products

Appellate Body Report, United States – Countervailing Measures Concerning Certain Products from the European Communities, WT/DS212/AB/R, adopted 8 January 2003, DSR 2003:I, p. 5

US – FSC

Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations", WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, p. 1619

US – Gambling

Appellate Body Report, United States – Measures Affecting the Cross‑Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted
20 April 2005, DSR 2005:XII, p. 5663 (Corr.1, DSR 2006:XII, p. 5475)

US – Gasoline

Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, p. 3

US – Hot‑Rolled Steel

Appellate Body Report, United States – Anti‑Dumping Measures on Certain Hot‑Rolled Steel Products from Japan, WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, p. 4697

US – Lamb

Appellate Body Report, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX, p. 4051

US – Lamb

Panel Report, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177/R, WT/DS178/R, adopted 16 May 2001, as modified by Appellate Body Report WT/DS177/AB/R, WT/DS178/AB/R, DSR 2001:IX, p. 4107

US – Large Civil Aircraft (2nd complaint)

Appellate Body Report, United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint), WT/DS353/AB/R, adopted 23 March 2012, DSR 2012:I, p. 7

US – Lead and Bismuth II

Appellate Body Report, United States – Imposition of Countervailing Duties on Certain Hot‑Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom, WT/DS138/AB/R, adopted 7 June 2000, DSR 2000:V, p. 2595

US – Line Pipe

Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea, WT/DS202/AB/R, adopted 8 March 2002, DSR 2002:IV, p. 1403

US – Oil Country Tubular Goods Sunset Reviews

Appellate Body Report, United States – Sunset Reviews of Anti‑Dumping Measures on Oil Country Tubular Goods from Argentina, WT/DS268/AB/R, adopted 17 December 2004, DSR 2004:VII, p. 3257

US – Section 211 Appropriations Act

Appellate Body Report, United States – Section 211 Omnibus Appropriations Act of 1998, WT/DS176/AB/R, adopted 1 February 2002, DSR 2002:II, p. 589

US – Section 301 Trade Act

Panel Report, United States – Sections 301‑310 of the Trade Act of 1974, WT/DS152/R, adopted 27 January 2000, DSR 2000:II, p. 815

US – Shrimp

Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, p. 2755

US – Softwood Lumber IV

Appellate Body Report, United States – Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, WT/DS257/AB/R, adopted 17 February 2004, DSR 2004:II, p. 571

US – Softwood Lumber IV

Panel Report, United States – Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, WT/DS257/R and Corr.1, adopted 17 February 2004, as modified by Appellate Body Report WT/DS257/AB/R, DSR 2004:II, p. 641

US – Softwood Lumber VI (Article 21.5 – Canada)

Appellate Body Report, United States – Investigation of the International Trade Commission in Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada, WT/DS277/AB/RW, adopted 9 May 2006, and Corr.1, DSR 2006:XI, p. 4865

US – Stainless Steel (Mexico)

Appellate Body Report, United States – Final Anti‑Dumping Measures on Stainless Steel from Mexico, WT/DS344/AB/R, adopted 20 May 2008, DSR 2008:II, p. 513

US – Steel Safeguards

Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003, DSR 2003:VII, p. 3117

US – Tyres (China)

Appellate Body Report, United States – Measures Affecting Imports of Certain Passenger Vehicle and Light Truck Tyres from China, WT/DS399/AB/R, adopted 5 October 2011, DSR 2011:IX, p. 4811

US – Upland Cotton

Appellate Body Report, United States – Subsidies on Upland Cotton, WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, p. 3

US – Upland Cotton

Panel Report, United States – Subsidies on Upland Cotton, WT/DS267/R, Add.1 to Add.3 and Corr.1, adopted 21 March 2005, as modified by Appellate Body Report WT/DS267/AB/R, DSR 2005:II, p. 299

US – Upland Cotton (Article 21.5 – Brazil)

Appellate Body Report, United States – Subsidies on Upland Cotton – Recourse to Article 21.5 of the DSU by Brazil, WT/DS267/AB/RW, adopted 20 June 2008, DSR 2008:III, p. 809

US – Wheat Gluten

Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Wheat Gluten from the European Communities, WT/DS166/AB/R, adopted 19 January 2001, DSR 2001:II, p. 717

US – Wool Shirts and Blouses

Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, and Corr.1, DSR 1997:I, p. 323

US – Zeroing (EC)

Panel Report, United States – Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing"), WT/DS294/R, adopted 9 May 2006, as modified by Appellate Body Report WT/DS294/AB/R, DSR 2006:II, p. 521

 


PANEL EXHIBITS CITED IN THIS REPORT

Exhibit No.

Short title (if any)

Description

IND-4

Statement of Administrative Action

Uruguay Round Agreements Act, Statement of Administrative Action, H.R. Doc. No. 103-316 (1994)

IND-7

2001 AR Issues and Decision Memorandum

USDOC, Issues and Decision Memorandum: Final Results of the Countervailing Duty Investigation, Certain Hot-Rolled Carbon Steel Flat Products from India (C‑533‑821) for the period 01/04/1999‑31/03/2000 (21 September 2001)

IND-9

USITC Final Determinations

USITC, Hot Rolled Steel Products from Argentina and South Africa, Investigations Nos. 701‑TA‑404 (Final) and 731-TA-898 and 905 (Final), Publication 3446 (August 2001)

IND-15A

 

United States Steel Corporation, Letter dated 2 May 2005 to USDOC alleging additional government subsidies (Essar) in Certain Hot-Rolled Carbon Steel Flat Products from India (C-533-821)

IND-15B

 

United States Steel Corporation, Letter dated 29 June 2005 in response to USDOC request for clarification regarding new subsidy allegations (Essar) of 2 May 2005 in Certain Hot-Rolled Carbon Steel Flat Products from India (C‑533-821)

IND-17

2004 AR Preliminary Results

USDOC, Notice of Preliminary Results of Countervailing Duty Administrative Review: Certain Hot‑Rolled Carbon Steel Flat Products from India (C-533-821) for the period 01/01-31/12/2004, United States Federal Register, Vol. 71, No. 6 (10 January 2006), pp. 1512‑1519

IND-24

 

United States Steel Corporation, Letter dated 23 May 2007 alleging additional government subsidies (Ispat) in Certain Hot-Rolled Carbon Steel Flat Products from India (C-533-821)

IND-25

 

United States Steel Corporation, Letter dated 23 May 2007 alleging additional government subsidies (JSW) in Certain Hot-Rolled Carbon Steel Flat Products from India (C‑533‑821)

IND-26

 

United States Steel Corporation, Letter dated 23 May 2007 alleging additional government subsidies (Tata) in Certain Hot-Rolled Carbon Steel Flat Products from India (C-533-821)

IND-27

 

United States Steel Corporation, Letter dated 23 May 2007 alleging additional government subsidies (Essar) in Certain Hot-Rolled Carbon Steel Flat Products from India (C-533-821)

IND-32

2006 AR Preliminary Results

USDOC, Certain Hot‑Rolled Carbon Steel Flat Products from India: Notice of Preliminary Results of Countervailing Duty Administrative Review (C‑533‑821) for the period 01/01-31/12/2006, United States Federal Register, Vol. 73, No. 6 (9 January 2008), pp. 1578‑1599

IND-33

2006 AR Issues and Decision Memorandum

USDOC, Issues and Decision Memorandum: Final Results of Administrative Review, Certain Hot-Rolled Carbon Steel Flat Products From India (C‑533‑821) for the period 01/01-31/12/2006, 7 July 2008

IND-37

 

USDOC, Certain Hot-Rolled Carbon Steel Flat Products from India: Notice of Preliminary Results and Partial Rescission of Countervailing Duty Administrative Review (C-533-821) for the period 01/01-31/12/2007, United States Federal Register, Vol. 73, No. 250 (30 December 2008), pp. 79791‑79802

IND-38

2007 AR Issues and Decision Memorandum

USDOC, Issues and Decision Memorandum: Final Results and Partial Rescission of Countervailing Duty Administrative Review, Certain Hot-Rolled Carbon Steel Flat Products from India (C-533-821) for the period 01/01-31/12/2007, 29 April 2009

IND-47

Hyosung Corporation v. United States

United States Court of International Trade, Hyosung Corporation v. United States, 2011 WL 1882519 (CIT) (31 March 2011)

IND-48

Rhone Poulenc, Inc. v. United States

United States Court of Appeals for the Federal Circuit, Rhone Poulenc, Inc. v. The United States, 899 F.2d 1185 (Fed. Cir. 1990) (27 March 1990)

IND-49A

Mueller Comercial de Mexico v. United States

United States Court of International Trade, Mueller Comercial de Mexico v. United States, 807 F.Supp.2d 1361 (CIT 2011) (16 December 2011)

IND-49B

Essar Steel Ltd v. United States

United States Court of Appeals for the Federal Circuit, Essar Steel Limited v. United States, 678 F.3d 1268 (Fed. Cir. 2012) (27 April 2012)

IND-54B

 

Supreme Court of India, Tata Iron and Steel Co. Ltd. v. Collector of Central Excise, Jamshedpur (2002) 8 SCC, pp. 338-351

IND-57

 

Essar Steel Limited, Response dated 12 April 2005 to USDOC questionnaire of 3 February 2005 in administrative review of Certain Hot-Rolled Carbon Steel Flat Products from India (C‑533-821) for the period 01/01-31/12/2004

IND-58

2005 GOI Supplemental Questionnaire Response for 2004 AR

Government of India, Response dated 2 September 2005 to USDOC supplemental questionnaire of 3 August 2005 in administrative review of Certain
Hot-Rolled Carbon Steel Flat Products from India (C‑533‑821) for the period 01/01‑31/12/2004

IND-59

2007 GOI Questionnaire Response for 2006 AR

Government of India, Response dated 23 April 2007 to USDOC questionnaire in administrative review of Certain Hot-Rolled Carbon Steel Flat Products from India (C‑533-821) for the period 01/01‑31/12/2006

IND-61

 

Government of India, Response dated 8 February 2008 to USDOC supplemental questionnaire of 11 January 2008 in administrative review of Certain Hot-Rolled Carbon Steel Flat Products from India (C-533-821) for the period 01/01‑31/12/2006

IND‑65

2007 Tata Questionnaire Response for 2006 AR

Tata Steel Limited, Response dated 1 November 2007 to USDOC Countervailing Duty New Subsidies Allegations Questionnaire 27 September 2007 in administrative review of Certain Hot‑Rolled Carbon Steel Flat Products from India (C‑533-821) for the period 01/01‑31/12/2006

IND-67

 

Tata Steel Limited, Response dated 8 February 2008 to USDOC supplemental questionnaire of 11 January 2008 in administrative review of Certain Hot-Rolled Carbon Steel Flat Products from India (C-533-821) for the period 01/01‑31/12/2006

IND-68A

 

Tata Steel Limited, Expert Statement of Professor James Otto on behalf of Tata Steel Limited in administrative review of Certain Hot-Rolled Carbon Steel Flat Products from India (C-533-821) for the period 01/01-31/12/2006 (6 November 2007)

IND-68B

 

Tata Steel Limited, Additional Statement of James Otto on Ore Royalties on behalf of Tata Steel Limited in administrative review of Certain Hot-Rolled Carbon Steel Flat Products from India (C‑533-821) for the period 01/01-31/12/2006 (28 November 2007)

IND-70

Tata Verification Report

Tata Steel Limited, Certification of Service of Verification Exhibits and Minor Corrections identified by the USDOC in Countervailing Duty Investigation of Certain Hot-Rolled Carbon Steel Flat Products from India (C-533-831) for the period 01/01‑31/12/2006 (17 March 2008)

IND-71

 

Table of relevant USDOC determinations regarding the application of "adverse facts available" provisions in administrative reviews

IND‑72‑1(2)

 

DPE Guidelines, Chapter IX: Navratna/Miniratna Status of PSUs, section 1, "Turning selected public sector enterprises into global giants – grant of autonomy"

IND-72-2(1)

 

DPE Guidelines, Chapter IX: Navratna/Miniratna Status of PSUs, section 5, "Financial and operational autonomy for profit making public sector enterprises – Mini-Ratnas"

USA-4

 

Countervailable subsidy – Benefit conferred, United States Code, Title 19, Chapter 4, Subtitle IV, Section 1677(5)(E)

USA-12

 

Determinations on basis of facts available, United States Code, Title 19, Chapter 4, Subtitle IV, Section 1677e

USA-13

 

Determinations on the basis of the facts available, United States Code of Federal Regulations, Title 19, Vol. 3, Chapter III, Part 351, Section 351.308

USA-14

Final Rule on Antidumping and Countervailing Duties

USDOC, Antidumping Duties; Countervailing Duties: Final Rule, United States Federal Register, Vol. 62, No. 96 (19 May 1997), pp. 27296 and 27339‑27341

USA-15

 

USDOC, Final Affirmative Countervailing Duty Determination: Certain Cut-to-Length Carbon-Quality Steel Plate from Indonesia, United States Federal Register, Vol. 64, No. 249 (29 December 1999), pp. 73155-73164

USA-17

 

USDOC, Issues and Decision Memorandum: Final Determination in the Countervailing Duty Investigation of Stainless Steel Bar From Italy (C-475-830) (15 January 2002), pp. 1 and 15‑19

USA-19

 

USDOC, Issues and Decision Memorandum: Final Results of Countervailing Duty Administrative Review: Certain In-shell Pistachios from the Islamic Republic of Iran (C-507-501) (6 September 2005)

USA-47

 

USDOC, Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, United States Federal Register, Vol. 72, No. 22 (2 February 2007), pp. 5005-5007

USA-66

2004 GOI Verification Report

USDOC, Verification of Questionnaire Responses Submitted by the Government of India in Countervailing Duty Administrative Review of Certain Hot-Rolled Carbon ("HRC") Steel Flat Products from India (C‑533‑821), for the period 01/01-31/12/2004 (3 January 2006), pp. 1‑9

USA-69

2004 New Subsidy Allegations (Essar)

United States Steel Corporation, Letter dated 2 May 2005 alleging additional government subsidies (Essar) in Certain Hot-Rolled Carbon Steel Flat Products from India (C-533-821)

USA-71

2006 New Subsidy Allegations (Tata)

United States Steel Corporation, Letter dated 23 May 2007 alleging additional government subsidies (Tata) in Certain Hot-Rolled Carbon Steel Flat Products From India (C-533-821)

USA-74

2001 Investigation Verification Report of GOI Responses

USDOC, Verification of the Questionnaire Responses Submitted by the Government of India (GOI) in Countervailing Duty Investigation of Certain Hot-Rolled Carbon Steel Flat Products from India (C-533-821), for the period 01/01-31/12/2001 (17 July 2001)

USA‑75

2001 GOI Supplemental Questionnaire Response

Government of India, Response dated 20 March 2001 to USDOC supplemental questionnaire in Countervailing Duty Investigation of Certain Hot-Rolled Carbon Steel Flat Products from India (Section 701 Investigation) (C‑533-821)

USA-78

 

National Steel Corporation and United States Steel Corporation, Letter dated 19 May 2003 alleging additional government subsidies (Essar) in Certain Hot-Rolled Carbon Steel Flat Products from India (C‑533-821)

USA-80

 

USDOC, Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, United States Federal Register, Vol. 68, No. 14 (22 January 2003), pp. 3009-3011

USA-81

 

USDOC, Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, United States Federal Register, Vol. 70, No. 19 (31 January 2005), pp. 4818-4820

USA-82

 

USDOC, Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, United States Federal Register, Vol. 73, No. 18 (28 January 2008), pp. 4829‑4831

USA-114

2004 GOI Verification Report

USDOC, Verification of the Questionnaire Responses Submitted by the Government of India in Countervailing Duty Administrative Review of Certain Hot-Rolled Carbon ("HRC") Steel Flat Products from India (C‑533‑821) for the period 01/01-31/12/2004 (3 January 2006)

USA-118

 

Essar Steel Ltd., Response dated 14 November 2007 to USDOC supplemental questionnaire of 6 November 2007 in Certain Hot‑Rolled Carbon Steel Flat Products from India (C‑533‑821), including attachments and internal Exhibit 1, table of "2006 iron ore prices in the Japanese market", sourced from Tex Report

USA-119

 

Essar Steel Ltd., Response dated 21 November 2008 to USDOC fourth supplemental questionnaire  in Certain Hot-Rolled Carbon Steel Flat Products from India (C‑533‑821), including attachments and internal Exhibit 4, table of "2007 iron ore prices in the Japanese market", sourced from Tex Report

 


World Trade Organization

Appellate Body

 

 

United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India

 

India, Appellant/Appellee

United States, Other Appellant/Appellee

 

Australia, Third Participant

Canada, Third Participant

China, Third Participant

European Union, Third Participant

Saudi Arabia, Third Participant

Turkey, Third Participant

 

AB-2014-7

 

Appellate Body Division:

 

Ramírez-Hernández, Presiding Member

Bhatia, Member

Graham, Member

 

 

 

1  Introduction

1.1.  India and the United States each appeals certain issues of law and legal interpretations developed in the Panel Report, United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India[1] (Panel Report). The Panel was established[2] to consider a complaint by India[3] with respect to the imposition, by the United States, of countervailing duties on certain hot-rolled carbon steel flat products from India.

1.1  Panel proceedings

1.2.  India challenged two types of measures related to the imposition by the United States of countervailing duties on imports of certain hot-rolled carbon steel flat products from India, namely: (i) the relevant legislation; and (ii) the specific determinations leading to the imposition of countervailing duties. First, India brought claims against certain provisions of the United States Tariff Act of 1930[4] (US Tariff Act) as codified in the United States Code, Title 19, Chapter 4, Subtitle IV (US Statute)[5], and of the United States Code of Federal Regulations, Title 19, Volume 3, Chapter III, Part 351 (US Regulations).[6] Second, India challenged several measures related to the United States' original investigation initiated in December 2000, the 2002, 2004, 2006, 2007, and 2008 administrative reviews, and the 2006 sunset review. For both these types of measures, India also challenged their amendments, replacements, implementing acts, or any other related measure in connection with them.[7] The measures at issue in this dispute are set forth in greater detail at paragraphs 2.1 and 2.2 of the Panel Report.

1.3.  India claimed that the US measures were inconsistent with several of the obligations under the Agreement on Subsidies and Countervailing Measures (SCM Agreement), the General Agreement on Tariffs and Trade 1994 (GATT 1994), and the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement). These obligations pertain to the determination of the existence of a subsidy, specificity, initiation of investigations, evidence, requirements for consultations, calculation of benefit, determination of injury, imposition and collection of anti‑dumping duties, review of countervailing duties, and public notice requirements.[8] In addition, pursuant to Article 19 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), India requested the Panel to suggest two specific ways for the United States to bring its measures into conformity with the three Agreements: (i) that the United States repeal or amend the impugned provisions of the law; and (ii) that the United States withdraw the countervailing duty on hot-rolled carbon steel flat products from India.[9] India's claims and requests for findings and recommendations are set forth in greater detail at paragraphs 3.1 and 3.2 of the Panel Report.

1.4.  On 3 May 2013, the United States submitted to the Panel two requests for preliminary rulings concerning the consistency of India's panel request with Article 6.2 of the DSU. The United States' first request concerned India's claim under Article 11 of the SCM Agreement, which was set out in India's panel request as follows: "[T]he determinations made, and the countervailing measures imposed, by the United States are inconsistent with … Article 11 of the [SCM Agreement] because no investigation was initiated or conducted to determine the effects of new subsidies included in the administrative reviews".[10] The United States argued that India's claims relating to the alleged initiation of an investigation despite the insufficiency of evidence in the domestic industry's written application, as contained in India's first written submission, fell outside the Panel's terms of reference. The United States' second request concerned India's claim that the United States' 2013 sunset review was inconsistent with Article 12.7 of the SCM Agreement. The United States argued that, because India had not explicitly referred to the 2013 sunset review in its panel request, India's claim in this respect fell outside the Panel's terms of reference. On 21 May 2013, in advance of the first substantive meeting of the Panel with the parties, India provided a written response to the United States' requests for preliminary rulings. On 16 August 2013, the Panel issued preliminary rulings to the parties to the dispute. The contents of the Panel's preliminary rulings are reproduced in Section 1.3.3 of the Panel Report.

1.5.  The Panel Report was circulated to Members of the World Trade Organization (WTO) on 14 July 2014. With respect to the United States' requests for preliminary rulings, the Panel found that:

a.      the 2013 sunset review was within the Panel's terms of reference;

b.     India's claim that the United States acted inconsistently with Article 11.1 of the SCM Agreement by failing to "initiate" an investigation into new subsidies was within the Panel's terms of reference; and

c.      India's claims that the United States acted inconsistently with Articles 11.1, 11.2, and 11.9 of the SCM Agreement in connection with the alleged initiation of an investigation, despite the insufficiency of evidence in the domestic industry's written application, fell outside the Panel's terms of reference.[11]

1.6.  In connection with the provision of high-grade iron ore by the National Mineral Development Corporation (NMDC), the Panel upheld two of India's claims. These claims related to the determination of specificity by the US Department of Commerce (USDOC), and its methodology in the calculation of benefit to the recipients. Specifically, the Panel found that the United States acted inconsistently with:

a.      Article 2.1(c) of the SCM Agreement by failing to take account of all the mandatory factors in its determination of de facto specificity regarding the NMDC[12]; and

b.     Article 14(d) of the SCM Agreement by failing to consider the relevant domestic pricing information for use as Tier I benchmarks[13], in respect of which the United States sought to rely on ex post rationalization.[14]

1.7.  In connection with the Captive Mining of Iron Ore Programme and the Captive Mining of Coal Programme[15], the Panel upheld three claims by India. These claims related to, inter alia, the USDOC's appreciation of the evidence, its determination that the Government of India (GOI) provided a financial contribution by providing iron and coal for less than adequate remuneration, and its methodology in the calculation of benefit to the recipients. In particular, the Panel found that the United States acted inconsistently with:

a.      Article 12.5 of the SCM Agreement, by failing to determine the existence of the Captive Mining of Iron Ore Programme on the basis of accurate information[16];

b.     Article 1.1(a)(1)(iii) of the SCM Agreement, by determining without sufficient evidentiary basis that the GOI granted Tata Steel Limited (Tata) a financial contribution in the form of a captive coal mining lease under the Captive Mining of Coal Programme/Coal Mining Nationalization Act[17]; and

c.      Article 14(d) of the SCM Agreement, in connection with the USDOC's rejection of certain domestic pricing information when assessing benefit in respect of mining rights for iron ore.[18]

1.8.  Additionally, the Panel upheld several more of India's claims. These claims related to, inter alia, the US International Trade Commission's (USITC) assessment of injury including its use of cross-cumulation[19], its application of "facts available", and its failure to observe its public notice obligations. In particular, the Panel found that the United States acted inconsistently with:

a.      Article 15.3 of the SCM Agreement, with respect to Section 1677(7)(G) of the US Statute "as such" and "as applied" in the original investigation at issue, in connection with the "cross‑cumulation" of the effects of imports that are subject to a countervailing duty investigation with the effects of imports that are not subject to simultaneous countervailing duty investigations[20];

b.     Articles 15.1, 15.2, 15.4, and 15.5 of the SCM Agreement, with respect to Section 1677(7)(G) of the US Statute "as such" and "as applied" in the original investigation at issue, in connection with injury assessments based on, inter alia, the volume, effects, and impact of non-subsidized, dumped imports[21];

c.      Article 12.7 of the SCM Agreement, by applying "facts available" devoid of any factual foundation in connection with several determinations concerning Jindal Steel Works (JSW), Vijayanagar Minerals Pvt. Ltd. (VMPL), and Tata[22]; and

d.     Article 22.5 of the SCM Agreement, by failing to provide adequate notice of the USDOC's consideration of certain in-country benchmarks when assessing benefit conferred by the NMDC's sales of iron ore.[23]

1.9.  However, the Panel rejected several of India's claims. These claims related to, inter alia, the USDOC's appreciation of the evidence, its assessment of adequacy of remuneration and its determination of benefit, its assessment of "prevailing market conditions" within the meaning of Article 14(d) of the SCM Agreement, its determination of whether the Steel Development Fund (SDF) constituted a public body, its examination of new subsidy allegations in the conduct of administrative reviews, and the USITC's assessment of injury. Specifically, the Panel rejected India's claims that the United States acted inconsistently with:

a.      Article 14(d) of the SCM Agreement, with respect to Section 351.511(a)(2)(i)‑(iii) of the US Regulations "as such"[24];

b.     Articles 14(d), 19.3, and 19.4 of the SCM Agreement, with respect to Section 351.511(a)(2)(iv) of the US Regulations "as such"[25];

c.      Articles 1.1(a)(1), 1.1(b), 2.4, 14(d), and the chapeau of Article 14 of the SCM Agreement, in connection with the provision of high-grade iron ore by the NMDC[26];

d.     Articles 1.1(a)(1)(iii), 1.1(b), and 14(d) of the SCM Agreement, in connection with the Captive Mining of Iron Ore Programme and the Captive Mining of Coal Programme[27];

e.     Articles 1.1(a)(1), 1.1(a)(1)(i), 1.1(b), 14(b), and the chapeau of Article 14 of the SCM Agreement in connection with the SDF[28];

f.       Articles 15.1, 15.2, 15.3, 15.4, and 15.5 of the SCM Agreement, in connection with Sections 1675a(a)(7) and 1675b(e)(2) of the US Statute "as such", and in connection with Section 1675a(a)(7) of the US Statute "as applied" in the sunset review at issue[29];

g.     Articles 15.1 and 15.4 of the SCM Agreement in connection with the USITC's evaluation of certain economic factors in its injury determination[30];

h.     Article 12.7 of the SCM Agreement, in connection with Section 1677e(b) of the US Statute and Section 351.308(a), (b), and (c) of the US Regulations "as such"[31];

i.        Article 12.7 of the SCM Agreement, in connection with the application of "facts available" concerning: (i) the USDOC's "rule" to use the highest non-de minimis subsidy rate; and (ii) several of the USDOC's determinations[32];

j.       Articles 11.1, 13.1, 21.1, 21.2, 22.1, and 22.2 of the SCM Agreement, in connection with the examination of new subsidy allegations in the administrative reviews at issue[33]; and

k.      Article 22.5 of the SCM Agreement, by failing properly to explain in the public notices the reasons for rejecting: (i) the interested parties' argument relating to the treatment of SDF levies; and (ii) the use of NMDC export prices as a price benchmark.[34]


1.10.  Finally, the Panel exercised judicial economy in respect of India's claims under:

a.      Articles 2.1(c) and 2.4 of the SCM Agreement, in connection with the USDOC's determination that the Captive Mining of Iron Ore Programme is de facto specific[35];

b.     Article 2.1(a) and (b) of the SCM Agreement, in connection with the USDOC's determination that the Captive Mining of Coal Programme/Coal Mining Nationalization Act is de jure specific[36];

c.      Article 22.5 of the SCM Agreement, in connection with the USDOC's public notice concerning: (i) the GOI's grant of captive coal mining rights to Tata; and (ii) the de facto specificity of the Captive Mining of Iron Ore Programme[37]; and

d.     Articles 10, 19.3, 19.4, 32.1, and 32.5 of the SCM Agreement, Article VI of the GATT 1994, and Article XVI:4 of the WTO Agreement, in connection with India's consequential claims.[38]

1.11.  Pursuant to Article 19.1 of the DSU, having found that the United States acted inconsistently with certain provisions of the SCM Agreement, the Panel recommended that the United States bring its measures into conformity with its obligations under that Agreement. Given the complexities to which implementation may give rise, the Panel declined India's request to exercise its discretion under the second sentence of Article 19.1 to suggest ways in which the United States might implement the recommendation.[39]

1.2  Appellate proceedings

1.12.  On 8 August 2014, India notified the Dispute Settlement Body (DSB), pursuant to Articles 16.4 and 17 of the DSU, of its intention to appeal certain issues of law covered in the Panel Report and certain legal interpretations developed by the Panel, and filed a Notice of Appeal[40] and an appellant's submission pursuant to Rule 20 and Rule 21, respectively, of the Working Procedures for Appellate Review[41] (Working Procedures). On 13 August 2014, the United States notified the DSB, pursuant to Articles 16.4 and 17 of the DSU, of its intention to appeal certain issues of law covered in the Panel Report and certain legal interpretations developed by the Panel, and filed a Notice of Other Appeal[42] and an other appellant's submission pursuant to Rule 23 of the Working Procedures.

1.13.  On 11 August 2014, the United States requested the Appellate Body Division hearing the appeal to extend the deadline for filing the United States' appellee's submission in this appeal by seven calendar days, to 2 September 2014, due to the size and complexity of India's appeal. On 12 August 2014, the Division invited India and the third parties to comment in writing, no later than 15 August 2014, on the United States' request. India and the European Union provided comments. India requested that any extension of the deadline for the United States to file its appellee's submission be equally granted to India. The European Union requested the Division, if it accepted the United States' request, to consequently extend the deadline for third participants to file their notifications and written submissions. On 19 August 2014, the Division issued a Procedural Ruling to the participants and third parties in respect of the United States' request. The Division decided, pursuant to Rule 16 of the Working Procedures, to extend the date for filing the appellees' submissions to 1 September 2014. Consequently, the Division also decided to extend the date for filing the third participants' written submissions and notifications to 3 September 2014. This Procedural Ruling is attached to this Report as Annex 3.

1.14.  On 1 September 2014, India and the United States each filed an appellee's submission.[43] On 3 September 2014, five third participants (Australia, Canada, China, the European Union, and Saudi Arabia) each filed a third participant's submission.[44] On the same day, Turkey notified its intention to appear at the oral hearing as a third participant.[45]

1.15.  The oral hearing in this appeal was held on 24-26 September 2014. The participants each made an opening oral statement. Four third participants (Australia, Canada, China, and Saudi Arabia) made oral statements. The participants and third participants responded to questions posed by the Members of the Appellate Body Division hearing the appeal.

1.16.  By letter dated 6 October 2014, the Chair of the Appellate Body notified the Chair of the DSB that the Appellate Body would not be able to circulate its report within the 60-day period stipulated in Article 17.5 of the DSU, or within the 90-day period pursuant to the same provision. The Chair of the Appellate Body explained that this was due to scheduling issues arising from the substantial workload in the Appellate Body in the second half of 2014 including: (i) the request for the extension of the deadlines for filing the appellees' and third participants' submissions in this appeal; (ii) the fact that the Appellate Body comprised only six Members when the appeal was filed; (iii) the overlap in the composition of the Divisions hearing the different appeals during this period; (iv) the number and complexity of the issues raised in these and concurrent appeal proceedings; and (v) the additional time required for translation of the report for circulation in all three official languages. Consequently, the Chair of the Appellate Body informed the Chair of the DSB that the report in this appeal would be circulated no later than 8 December 2014.

2  Arguments of the Participants and Third Participants

2.1  Claims of error by India – Appellant

2.1.1  The Panel's terms of reference

2.1.  India requests the Appellate Body to reverse the Panel's preliminary ruling that the claims in Sections XII.C.1 and XII.C.2 of India's first written submission to the Panel were outside the Panel's terms of reference. India further requests the Appellate Body to complete the analysis in respect of these claims on appeal. India's appeal in this regard is contingent on the Appellate Body rejecting its appeal that the sale of high-grade iron ore by the NMDC does not constitute an actionable subsidy under the SCM Agreement.

2.2.  In its appellant's submission, India claims that the Panel acted inconsistently with Article 11 of the DSU, and erred in its application of Article 6.2 of the DSU, by failing to address the meaning of the term "initiated" in India's panel request. India also claims that the Panel acted inconsistently with Article 11 of the DSU by failing to take into account: (i) the fact that the United States did not suffer prejudice by the alleged lack of clarity of the panel request; and (ii) certain questions circulated during consultations.

2.1.1.1  The meaning of the word "initiated" in India's panel request

2.3.  India argues that the Panel erred in its construction of the term "initiated", as used in India's panel request. India recalls that paragraph 12(f)(i) of its panel request stated that "no investigation was initiated or conducted", in violation of Article 11 of the SCM Agreement[46], and Sections XII.C.1 and XII.C.2 of its first written submission referred to "initiating investigation[s] … [without] sufficient evidence", in violation of Articles 11.1, 11.2, and 11.9 of the SCM Agreement.[47] In India's view, the term "initiated" is defined as a term of art in footnote 37 of the SCM Agreement to mean a "procedural action by which a Member formally commences an investigation as provided in Article 11". Thus, the term "initiated" in India's panel request should be construed in the light of that definition, such that the phrase "no investigation was initiated or conducted" should be understood to mean "such investigations not being commenced and performed in a manner 'provided in Article 11' of the SCM agreement".[48] According to India, such reading of its panel request would automatically cover violations of Articles 11.1, 11.2, and 11.9 of the SCM Agreement, including the commencement of investigations without sufficient evidence.

2.4.  India submits that, although its panel request referred to Article 11 of the SCM Agreement only generally, the interlinked nature of its provisions and their common relationship to the initiation and conduct of investigations means that its panel request was sufficient to present the problem clearly in relation to all of the provisions of Article 11, except Articles 11.6, 11.8, 11.10, and 11.11. India's decision to limit its claims in its first written submission to Articles 11.1, 11.2, and 11.9 of the SCM Agreement should not influence the construction of its panel request. In India's view, by failing to examine the meaning of the term "initiated" as set out in India's panel request, the Panel failed to apply correctly the legal standard under Article 6.2 of the DSU to the facts of this case.

2.5.  Furthermore, India argues that the Panel failed to conduct an objective assessment because the Panel, "[i]n a mere footnote", dismissed India's claim in relation to the meaning of the term "initiated".[49] In India's view, in order to discharge its duties under Article 11 of the DSU, the Panel should have, first, examined whether the term "initiated" should be construed in the light of the definition provided in footnote 37 of the SCM Agreement, and, second, should have examined whether the claims in Sections XII.C.1 and XII.C.2 of India's first written submission were captured by that definition.

2.1.1.2  Relevance of prejudice and questions during consultations

2.6.  India argues that the Panel erred by failing to apply the findings of the Appellate Body in Korea – Dairy and of the panel in US – Lamb. India recalls its argument before the Panel that, pursuant to the Appellate Body's finding in Korea – Dairy, an assessment of compliance with Article 6.2 of the DSU must take into account whether the ability of the respondent to defend itself was actually prejudiced by an alleged defect in the panel request. In India's view, the United States "merely asserted" that it sustained prejudice, but offered no supporting particulars.[50] According to India, in rejecting India's argument, the Panel failed to assess the relevance and implications of the Appellate Body's finding in Korea – Dairy in relation to its argument.

2.7.  India further recalls its argument before the Panel that, based on the panel's finding in
US – Lamb, one of the "attendant circumstances" to consider in assessing whether a panel request complies with Article 6.2 is the consultations held between the parties, including the written questions circulated for that purpose.[51] In India's view, therefore, the Panel should have taken into account the questions circulated by India during the consultations stage in construing its panel request. India contends that the Panel mistakenly relied on the Appellate Body report in
US – Upland Cotton in finding that it could not refer to events that had occurred at the consultations stage of the dispute.[52] According to India, unlike the panel in US – Lamb, the Appellate Body in US – Upland Cotton was not dealing with the relevance of what took place during consultations in the context of Article 6.2 of the DSU, and the Appellate Body in that case was not seized with the question of harmoniously applying Article 6.2 of the DSU with Article 4.6 of the DSU.[53]

2.8.  India submits that prior adopted findings of the Appellate Body and panels form part of the acquis of the WTO system and, unless cogent reasons permit, a subsequent panel cannot disregard such earlier findings.[54] Thus, in order to discharge its duties under Article 11 of the DSU, the Panel should have considered and assessed the relevance and implications of such findings, and should have justified its failure to apply those findings with cogent reasons.[55]

2.1.1.3  Completion of the analysis

2.9.  India requests the Appellate Body to complete the analysis of the claims in Sections XII.C.1 and XII.C.2 of its first written submission to the Panel in the event that it reverses the Panel's preliminary ruling under appeal.

2.10.  In India's view, there are sufficient undisputed facts on the record and factual findings by the Panel to facilitate completion of the analysis. In particular, India's claims relate to the sufficiency of evidence contained in the application of the domestic industry for the initiation of investigations into two specific subsidy programmes. The presence of that application on the panel record provides a sufficient basis on which to assess compliance with Articles 11.1, 11.2, and 11.9 of the DSU.

2.11.  According to India, during the 2004 administrative review, the USDOC initiated an investigation into the alleged sale of high-grade iron ore by the NMDC for less than adequate remuneration. However, an examination of the relevant documents and evidence provided by the domestic industry reveal that the domestic industry did not allege that the NMDC is a "public body" selling high-grade iron ore for less than adequate remuneration, but, rather, alleged that the imposition of an export restraint on iron ore resulted in low-priced inputs to steel producers.[56] According to India, this means that the application contained no evidence in respect of sales by the NMDC for less than adequate remuneration. In respect of the Target Plus Scheme (TPS), India asserts that the documents and evidence submitted by the domestic industry made no allegations in respect of that alleged programme.[57]

2.12.  Thus, according to India, the omission by the domestic industry to provide any evidence on these two alleged subsidy programmes means that the United States violated Articles 11.1 and 11.2 of the SCM Agreement by initiating investigations without sufficient evidence, and violated Article 11.9 of the SCM Agreement by failing to terminate the investigations promptly in the absence of sufficient evidence.

2.13.  On that basis, the Appellate Body should complete the analysis and find that the United States acted inconsistently with Article 11.1, 11.2, and 11.9 of the SCM Agreement.

2.1.2  Public Body

2.14.  India alleges that the Panel erred when it rejected India's claims that the USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement in determining that the NMDC constitutes a "public body". India contends that the Panel's findings were based on a flawed legal interpretation of Article 1.1(a)(1) of the SCM Agreement and that the Panel failed to make an objective assessment of the matter before it, as required under Article 11 of the DSU. India requests the Appellate Body to reverse the Panel's findings upholding the USDOC's determination that the NMDC is a "public body". India also requests the Appellate Body to complete the legal analysis and to find that the USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement in determining that the NMDC is a "public body".

2.1.2.1  Interpretation and application of Article 1.1(a)(1) of the SCM Agreement: Public Bodies

2.15.  Referring to the meaning of the term "public body" as clarified by the Appellate Body in US – Anti‑Dumping and Countervailing Duties (China), India submits that the Panel misunderstood the findings of the Appellate Body in that dispute and thus erred when it construed the term "public body" to mean any entity that is "meaningfully controlled" by a government.

2.16.  India refers to the Appellate Body report in US – Anti‑Dumping and Countervailing Duties (China) to argue that, for an entity to be a "public body" within the meaning of Article 1.1(a)(1), it must have the power to regulate, control, or supervise individuals or otherwise restrain the conduct of "private bodies".[58] In addition, India claims that a "public body" must also be able to entrust or direct a "private body" – i.e. give responsibility to, or exercise authority over a "private body". India further alleges that the Panel erroneously considered proof of "meaningful control" to be a "necessary and sufficient" condition in order to establish that an entity is a public body, and points out that the Panel's entire evaluation "revolves around whether GOI had 'meaningful control' over NMDC".[59] India observes, however, that the Appellate Body did not refer to the exercise of "meaningful control" as a substitute to the test of "governmental authority to perform [a] governmental function".[60] Rather, the Appellate Body found that evidence that the government is exercising "meaningful control" over an entity and its conduct may, in certain circumstances, be considered relevant in inferring that the entity is exercising governmental authority.[61]

2.17.  India submits that the Panel erred in its application of Article 1.1(a)(1) of the SCM Agreement to the determinations made by the USDOC in the underlying investigation, by failing to examine if the USDOC had considered whether the NMDC performed governmental functions. Specifically, the Panel should have examined if the USDOC considered whether the NMDC: (i) was vested with the power and authority to perform governmental functions; (ii) had the power and authority to direct or entrust a private body; and (iii) was in fact exercising governmental functions. Furthermore, India contends that the Panel erred in its application of Article 1.1(a)(1) by giving a dispositive role to the existence of "meaningful control". India adds that the Panel wrongly relied on the United States' assertion that the NMDC was "governed by the Ministry of Steel"[62], without providing an adequate explanation as to how such "governance" demonstrates that the government exercised meaningful control. India argues, in the alternative, that the Panel erred in finding that the GOI's alleged involvement in the NMDC's board of directors together with the government ownership of the NMDC was sufficient to fulfil the requirements of "meaningful control", as was referred to by the Appellate Body in US – Anti‑Dumping and Countervailing Duties (China).[63]

2.18.  Furthermore, India submits that the Panel erred in finding that the involvement of the GOI in the appointment of the NMDC's directors was "more 'substantive' or 'meaningful' than mere shareholding".[64] According to India, shareholding and appointment of directors are "necessarily indistinguishable from each other"[65] as they are "merely two sides of the same coin".[66] That being the case, a finding of government shareholding and the government's concomitant right to appoint directors cannot be sufficient, taken alone, to support a finding that an entity is a public body. Thus, according to India, the USDOC's determination that the NMDC is a public body was based solely on the GOI's shareholding, given that the appointment of directors could not be considered separate and additional to shareholding. India maintains that, in reaching its finding, the Panel's reliance on the Appellate Body's finding in US – Anti‑Dumping and Countervailing Duties (China) was misplaced. This is because the Appellate Body's findings concerned the appointment of chief executives rather than of a board of directors, and, in any event, the Appellate Body relied on other factors in support of its findings.[67]

2.1.2.2  Article 11 of the DSU

2.19.  India also claims that the Panel failed to comply with its obligation to make an objective assessment of the matter before it, as required under Article 11 of the DSU. In this respect, India identifies four discrete errors in the Panel's review of the evidence underlying the USDOC's finding that the NMDC is a "public body". Specifically, India contends that the Panel: (i) disregarded an admission made by the United States in the context of the panel proceedings in
US – Anti‑Dumping and Countervailing Duties (China); (ii) relied on an ex post rationalization of the USDOC's "public body" determination; (iii) ignored certain evidence regarding the GOI's involvement in the appointment of directors of the NMDC; and (iv) failed to assess properly evidence regarding the NMDC's status as a Miniratna or Navratna company.

2.20.  First, India challenges the Panel's acceptance of the United States' assertion that, in finding the NMDC to be a "public body", the USDOC considered factors other than the GOI's shareholding in the NMDC. India contends that, by accepting the United States' assertion on this point, the Panel improperly disregarded an admission allegedly made by the United States in the panel proceedings in US – Anti-Dumping and Countervailing Duties (China). According to India, the United States admitted that, in the investigation under challenge in that dispute, the USDOC considered the shareholding of the GOI "as the sole factor" relevant for its "public body" determinations, "without reference to any more factors".[68] India submits that admissions made by a party on a specific fact in prior WTO dispute settlement proceedings are relevant in subsequent disputes[69], and argues, therefore, that the Panel ought to have considered the alleged admission of the United States rather than "disregarding it outright".

2.21.  Second, India argues that the Panel improperly upheld the USDOC's determination on the basis of ex post facto explanations provided by the United States in the panel proceedings. India posits that the USDOC's reference to the NMDC being "governed by" the GOI was at the root of the Panel's rejection of India's claim. Yet, India argues, the term "governed by" is not defined in any of the determinations under challenge. Rather, the United States explained what the term actually meant for the first time during the panel proceedings. India argues that reliance by a panel on supplementary information in this way results in a standard of review falling short of what is required by Article 11 of the DSU. Further, India contends that evidence on the record before the USDOC was irrelevant to the Panel's consideration, unless it formed part of the evaluation or determination of the USDOC itself. According to India, in order to rely on such evidence, the United States would have had to demonstrate that the USDOC had actually considered and evaluated that evidence, and that such evaluation was reflected in the USDOC's determination at issue.

2.22.  Third, assuming that the United States' explanations of the meaning of the term "governed by" are not deemed to constitute ex post facto rationalizations, India submits that the Panel disregarded material evidence in finding that the United States actually relied on something other than government shareholding. In support of its contention, India recalls that the term "governed by" was defined by the United States by reference to three factors: (i) evidence of GOI involvement in the board of directors of the NMDC; (ii) the "administrative control" of the NMDC by the GOI; and (iii) evidence in the 2007 administrative review that the GOI appointed seven of the 13 directors of the NMDC. India then points to the following evidence that it sees as contradicting this proposition and which the Panel allegedly failed to consider.

2.23.  India argues that, as the interested parties pointed out during the investigation, the majority of the directors whose appointment the GOI was allegedly involved in were all independent. However, the USDOC never considered this to be a relevant factor in the analysis. Furthermore, although the USDOC itself distinguished between the GOI "appointing" two directors and having mere "approval power" over the appointment of seven other directors, it never sought further information or examined the difference between the two. In India's view, the USDOC's "disregard and disinterest" in further examining such information can be explained by its statements of law that "majority ownership of an input supplier qualifies it as a government authority within the meaning of [19 USC § 1677(5)(D)(i))]" and that "[a]nalyzing additional factors is not necessary absent information that calls into question whether government ownership does not mean government control".[70] India claims that the Panel relied on isolated statements from the Issues and Decision Memorandum for the 2007 administrative review[71] (2007 AR Issues and Decision Memorandum), giving the appearance that the USDOC actually fully considered the GOI's involvement in the selection of the board of directors of the NMDC.

2.24.  Second, India refers to an alleged admission by the United States before the Panel that "administrative control" was not used in its determinations. According to India, administrative control is not an independent factor because the United States equates the notion of "administrative control" with "governed by", which in turn is equated with ownership and appointment of board of directors. India posits, however, that the Panel referred to the notion of "administrative control" as if it were "something unique and additional".[72] India submits that an objective assessment of the facts in the underlying investigation should have led the Panel to discard administrative control as a relevant factor in reaching its determination.

2.25.  Third, according to India, the USDOC's reference to the appointment of board directors was only to reject arguments raised by interested parties that the GOI did not control the board of directors, and was not an independent factor supporting the USDOC's finding. India submits that the Panel erred, therefore, by concluding that the USDOC considered something more than government shareholding in the 2004 and 2006 administrative reviews in the underlying investigation.

2.26.  Finally, India argues that the Panel erred by ruling on whether the NMDC's status as a Miniratna or Navratna company during certain periods meant that it could not be a "public body". Instead of making "a finding on the implication of 'Miniratna' or 'Navaratna' status of NMDC", the Panel should have considered only the USDOC's "failure" to evaluate the evidence before it.[73] Therefore, India claims, the Panel made a finding on a matter not before it, "in direct breach of its function under Article 11 of the DSU".[74]

2.1.2.3  Completion of the analysis

2.27.  In the event that the Appellate Body reverses the Panel's finding upholding the USDOC's determination that the NMDC is a "public body", India requests the Appellate Body to complete the analysis and find that the USDOC acted inconsistently with Article 1.1(a)(1) of the SCM Agreement in determining that the NMDC is a "public body". India notes that the factual findings of the Panel and the undisputed facts on record constitute a sufficient basis for the Appellate Body to complete the analysis.

2.28.  India maintains that the USDOC's determination that the NMDC is a public body is inconsistent with Article 1.1(a)(1) because the USDOC relied solely on the GOI's shareholding in the NMDC to support its finding. India recalls the argument of the United States before the Panel that the USDOC considered something beyond just the GOI's shareholding because the determination also refers to the NMDC as being "governed by" the GOI. India contends that the explanations provided by the United States on the term "governed by" are, at best, ex post facto clarifications that cannot be considered at this stage of the proceedings, and that even those ex post facto explanations are contrary to the evidence on record. India points out that the USDOC foreclosed any arguments regarding the composition of the board of directors and the fact that they were "independent directors". India further notes that it is undisputed on the record that the GOI pointed to the Miniratna status of the NMDC, which grants the latter significant autonomy in conducting its affairs.

2.29.  India further argues that the determination reveals that the USDOC failed to determine if the NMDC was vested with the power and authority to perform governmental functions, or to direct or control a private body, or was in fact performing governmental functions. Specifically, even assuming that the GOI had a significant role to play in the appointment of the NMDC's board of directors, there was nothing in the USDOC's determination to support a finding that this would amount to the GOI exercising meaningful control over the NMDC. India recalls that, in
US – Anti‑Dumping and Countervailing Duties (China), the Appellate Body suggested "the possibility of a government's exercise of meaningful control as a proxy … may indicate, on a case‑to-case basis, the existence of 'governmental authority to perform governmental function'".[75] According to India, the USDOC ought to have examined whether any alleged control meant that the NMDC performed governmental functions on behalf of the GOI. India submits that the USDOC performed no such examination and, instead, applied a straightforward presumption that the alleged existence of potential control of the NMDC by the GOI was sufficient for a "public body" determination.

2.1.3  Financial contribution

2.1.3.1  Captive mining rights

2.30.  India claims that the Panel erred in finding that the USDOC's determination that India provided goods through the grant of mining rights for iron ore and coal is not inconsistent with Article 1.1(a)(1)(iii) of the SCM Agreement. India principally contends that Article 1.1(a)(1)(iii) does not cover grants for which the beneficiaries have to engage in significant intervening acts to make a good available for use or enjoyment. India requests the Appellate Body to find that the Panel erred in the interpretation and application of Article 1.1(a)(1)(iii), and that the Panel failed to discharge its duty under Article 11 of the DSU. India further requests the Appellate Body to reverse the Panel's finding and to complete the legal analysis and find that the United States acted inconsistently with Article 1.1(a)(1)(iii) of the SCM Agreement in determining that the grant of mining rights for iron ore and coal is a financial contribution.

2.31.  India recalls that, in US – Softwood Lumber IV, the Appellate Body rejected Canada's contention that the meaning of the term "provides" in Article 1.1(a)(1)(iii) should be limited to the "supplying" or "giving" of goods or services, and cannot be broadly interpreted to mean "making available".[76] India also notes, however, that the Appellate Body warned that the meaning of the term "provides" cannot be stretched to its extreme. India adds that the Appellate Body emphasized the need to ensure that only governmental actions that bear a "reasonable proximate connection" to the use or enjoyment of the goods in question could be covered under Article 1.1(a)(1)(iii).[77]

2.32.  India considers that the relevant context also supports this conclusion. India argues that the term "contribution" in the chapeau of Article 1.1(a)(1) normally refers to a "gift or payment to a common fund or collection" or "the part played by a person or thing in bringing about a result or helping something to advance", and that the use of the term "financial" makes it clear that the contribution in question must be related to monetary resources or providing funding.[78] Furthermore, the word "by" means that there is a specific action that is to be undertaken by the government or any public body and that this specific action involves "contributing" something of economic value.[79] India adds that the presence of the phrase "i.e. where" clarifies that the four subparagraphs under Article 1.1(a)(1) are all meant to explain the situations or conditions as to when a financial contribution by a government or a public body is deemed to exist under the SCM Agreement. In India's view, it is therefore clear from this context that the "goods or services" referred to in Article 1.1(a)(1)(iii) correspond to the "financial contribution" referred to in the chapeau, and that the specific action undertaken by the government or public body must be "providing" the "goods" such that the governmental action itself, rather than the intervening acts of non-governmental bodies, directly results in the provision of the goods.

2.33.  India contends that the grant of mining rights is a situation where the government does not really "provide" the mineral in question, because "significant efforts, risks and investment have to be undertaken by the miner to actually make the mineral available for use or enjoyment".[80] In India's view, the Panel applied a "but for" test instead of a reasonably proximate connection test, whereby the Panel considered that, "but for" the government's granting of the rights, mining companies could not have used or enjoyed the mineral in the first place. However, this logic would apply equally to other governmental acts, such as allowing the mining company to be registered as a legal person within domestic law, or to be able to transact in the domestic legal framework through registration procedures in the domestic tax system, or to own or lease equipment or vehicles for mining or transportation. India maintains that this results in the very "slippery slope" that the Appellate Body sought to avoid in US – Softwood Lumber IV when it clarified the need to show a reasonable proximate connection under Article 1.1(a)(1)(iii).[81]

2.34.  India submits that there is no reasonably proximate relationship between the grant of mining rights, on the one hand, and the availability of the mined iron ore or coal, on the other hand. India recalls the panel's finding, in US – Softwood Lumber IV, that the "right to harvest standing timber" is not severable from "standing timber".[82] There was therefore no intervening act in US – Softwood Lumber IV between granting the "right to harvest standing timber" and "standing timber". This is not the case with mining, India argues, because the connection between the grant of mining rights and the provision of the mineral itself is severed by a series of significant actions performed by the beneficiary at its own risk and cost. India further contends that, unlike the harvesting rights for timber, the exploitation of a mining right, apart from involving considerable expenses incurred in procurement of the right itself, also involves costs of labour, exploration, extraction, and a number of industrial processes that make the minerals marketable and usable.

2.35.  India notes the Panel's consideration that India's argument – regarding the remoteness of the mining lease and the extraction of mined material – would create legal uncertainty. India argues that the Panel's concern was "entirely exaggerated"[83] since the SCM Agreement is filled with provisions that reflect a certain amount of subjectivity in application. In addition, both the panel and the Appellate Body are required to interpret and apply the covered agreements in accordance with customary rules of international law, and where such interpretation imposes the need for a case‑by‑case analysis, the panel and Appellate Body "must not cower away from such requirements citing alleged legal uncertainty".[84] India argues, therefore, that a panel "cannot cite difficulties in application to simply dilute this very requirement into redundancy".[85]

2.36.  India also claims that the Panel erred under Article 11 of the DSU in not giving appropriate consideration to India's evidence relating to the amount of royalty paid to the GOI and the GOI's lack of control over the extraction process. India maintains that, despite the Panel's statements to the contrary, India had explained the significance of mining rights constituting only about 9% of the total price of the mined ore. Recalling its view that there is no proximate linkage in this case between the grant of mining rights and the use or enjoyment of the mined mineral, India points to the significance of the intervention of other acts of extraction, crushing, grinding, separation, and classification that are undertaken by the beneficiary. In that respect, the "most credible proof of existence and importance of such intervening processes is the fact that the royalties paid for the mining rights only account for 9.03% and it is the remaining 90.97% cost incurred by the miner, which makes the ore usable or marketable".[86] India recalls the evidence of cost allocation submitted before the Panel, which, in its view, presents an accurate image of how insufficient the government grant of mining rights is. This is highly relevant in assessing whether there is a "reasonable proximate connection" between the grant of mining rights and the use or enjoyment of the mined mineral. India therefore concludes that the Panel failed in its duty under Article 11 of the DSU by refusing to evaluate India's explanation and ultimately rejecting it as irrelevant.

2.1.3.2  SDF loans

2.37.  India claims that the Panel erred in finding that the USDOC's determination that the SDF Managing Committee provided direct transfers of funds is not inconsistent with Article 1.1(a)(1)(i) of the SCM Agreement. India contends that the SDF loans do not constitute a "direct transfer" of funds because the loan proceeds were transferred by an intermediary entity that is not the government or a public body. India requests the Appellate Body to find that the Panel erred in the interpretation and application of Article 1.1(a)(1)(i). India further requests the Appellate Body to reverse the Panel's findings and to complete the legal analysis and find that the United States acted inconsistently with Article 1.1(a)(1)(i) of the SCM Agreement in determining that the SDF loans are a "financial contribution".

2.38.  India argues that, despite the fact that its claim was based on the interpretation of the terms "direct" and "transfer" in Article 1.1(a)(1)(i), the Panel never provided an interpretation in accordance with customary rules of international law. India maintains that, if an action is "direct", the action and its consequence should be immediately connected or linked, without involving any intermediary or intervening agency. India argues that this is supported by the context of the provision and the preamble to Article 1.1(a)(1), which, India argues, indicate that a financial contribution consists of a specific action that is to be undertaken by the government or any public body. India further contends that the use of the phrase "i.e. where" highlights that what is covered is the action undertaken by the government, and that it is this action that should actually include or contain the fund transfer. India maintains that, where the action undertaken by the government is only decision-making on the issuance or terms of the transfer, it precedes the actual transfer of the funds by an intermediary or intervening agency and therefore is not a government practice that involves the direct transfer of funds.

2.39.  India also finds contextually significant the absence of the word "direct" in other subparagraphs of Article 1.1(a)(1), which suggests, in its view, that Article 1.1(a)(1)(i) is not intended to cover indirect transfers of funds. This implication becomes crucial when read in the light of the language in Article 1.1(a)(1)(iv) relating to situations where a government "entrusts or directs a private body to carry out … the type of functions illustrated in (i)". India notes that the Appellate Body has interpreted "direction" as referring to situations where a government exercises its authority, including some degree of compulsion, over a private body, and "entrustment" as referring to situations in which a government gives responsibility to a private body. Thus, whereas subparagraph (i) deals with governmental actions directly providing a financial contribution, subparagraph (iv) deals with governmental actions indirectly providing a financial contribution through the direct action of a private body. Consequently, where a government takes the decision that it is an intermediate private body or agency who issues a loan on certain terms or waives a loan already issued, the scenario is addressed under Article 1.1(a)(1)(iv). India argues that the Panel's interpretation, however, renders Article 1.1(a)(1)(iv) of the SCM Agreement inutile, because the Panel considered that, where a government takes the decision to issue a loan, this would be a direct transfer of funds even if the actual funds are transferred by a private entity such as the Joint Plant Committee (JPC). In India's view, if this understanding were correct, subparagraph (iv) would not need to exist.

2.40.  India further argues that the SCM Agreement reflects a delicate balance between those Members that seek to impose more disciplines on the use of subsidies and those that seek to impose more disciplines on the application of countervailing measures. In addition, the negotiating history of the SCM Agreement indicates that the words used to create the definition of a subsidy were carefully chosen. According to India, the list contained in Article 1.1(a)(1) is exhaustive and the conditions prescribed therein reflect the delicate balance the drafters intended to achieve. Any attempt "to circumvent the conditions in Article 1.1(a)(1)(iv) by subsuming the concept within Article 1.1(a)(1)(i) cannot be permitted".[87] Therefore, India contends, the Panel's interpretation is contrary to the object and purpose of the SCM Agreement.

2.41.  India recalls the Panel's finding that the JPC formally administered the disbursement and collection of funds, and the day-to-day operations of the SDF. According to India, evidence that was before the USDOC shows that the issuance and administration of loans provided under the SDF was supervised by the JPC and, therefore, that it was the JPC that transferred the funds. Thus, there is no direct link between the "governmental practice" of the SDF Managing Committee and the transfer of funds to the participating members because there was an intervening agency between the actions of the SDF Managing Committee and the recipients. Accordingly, India contends, the issuance of SDF loans is not a governmental practice that involves a "direct" transfer of funds for the purposes of Article 1.1(a)(1)(i).

2.42.  In addition, India argues that the issuance of SDF loans cannot amount to a "transfer of funds" within the meaning of Article 1.1(a)(1)(i). India considers that the ordinary meaning of the phrase "transfer of funds" would require a person to convey the title over money or financial resources to another person. Therefore, the "transfer of funds" only refers to situations where the government gives up the rights and interests it has over the funds in question, while simultaneously creating the rights and interests over the funds in favour of the beneficiaries. According to India, "[u]nless the 'government' incurs a financial charge on its own account, such that the funds being transferred would have otherwise been at the disposal of the government but for the alleged 'transfer' in question, there cannot be a financial contribution under Article 1.1(a)(1)(i) of the SCM Agreement."[88]

2.43.  India contrasts the use of the term "transfer" in Article 1.1(a)(1)(i) with the use of the term "provides" in Article 1.1(a)(1)(iii). In India's view, the term "provides" is much wider in that it means to "make available" or "put at the disposal of".[89] Thus, "[h]ad the drafters intended sub‑paragraph (i) to cover any governmental action that may ultimately lead to funds being made available or accessible to beneficiaries, a broader term such as 'provides' would have been used."[90] India also refers to the preambular language in Article 1.1(a)(1), and in particular to the indication that each of the subparagraphs relate to a "financial contribution by a government or any public body". India argues that the use of the term "financial" makes it clear that the contribution in question must relate to resources capable of being valued monetarily, and that such a financial contribution has to be "by" a government or public body. India thus considers that subsidies intended to be covered in Article 1.1(a)(1)(i) are to be drawn from government sources of revenue and result in a charge on the public account.

2.44.  India considers that its understanding of Article 1.1(a)(1)(i) is confirmed by the negotiating history of the SCM Agreement. India points to various statements, including those by the Group of Experts on the Calculation of the Amount of a Subsidy, which considered that "subsidies exist where the government exercises its authority to impose tax and to expend revenue, whether directly or through delegation of its taxing and authority."[91] In India's view, subsidies have generally been linked directly to the taxation function of the government and monetary resources or contributions derived from this taxation function must be owned and under the complete control of the government. India submits that "it is this understanding that is reflected in Article 1.1(a)(1)(i) … and hence, a direct transfer of funds by a government must involve financial contributions from out of public funds or involve a charge on the public account."[92]

2.45.  India contends that the Panel's only basis for rejecting India's claim is the fact that the SDF Managing Committee was instrumental, because of its role as decision-maker regarding the issuance, terms, and waivers of SDF loans, in transferring those funds from the SDF to the loan beneficiaries. India maintains, however, that it is an admitted fact that the funds were garnered for the SDF only through the JPC, which is a private body. India asserts that there was no finding by the USDOC or the Panel that the SDF funds were actually owned by the government or that the release of these funds resulted in a charge on the public account. Furthermore, the decision to add an extra element to the price of steel products towards the SDF was made by the JPC, which is majority controlled by participating steel plants. In India's view, all of these indicators point to the conclusion that the SDF funds were not government funds and that the SDF was financed solely by producer levies and other non-governmental sources. India also points to the holding by the Supreme Court of India that the JPC did not have the power to tax; the SDF levy was not a tax; but rather consisted of producer funds; the SDF levy was only an element of price added to the ex works price; and the ultimate beneficiaries of this added element were the steel plants themselves. Both the Panel and the United States disregarded these features of the SDF programme. India concludes that the mere instrumental role played by the SDF Managing Committee in issuing the SDF loans do not ipso facto make the SDF loans a direct 'transfer' of funds under Article 1.1(a)(1)(i) of the SCM Agreement.

2.1.4  Benefit – "As such" claims

2.46.   India appeals the Panel's conclusion that the US benchmarking mechanism for assessing the adequacy of remuneration for government-provided goods, as reflected in Section 351.511(a)(2)(i)-(iv) of the US Regulations, is not inconsistent with Article 14(d) of the SCM Agreement.[93] India claims that, in making its findings, the Panel incorrectly interpreted and applied Article 14(d), and acted inconsistently with its mandate under Article 11 of the DSU. India requests the Appellate Body to reverse the Panel's conclusion and find that the US benchmarking mechanism, as reflected in Section 351.511(a)(2)(i)-(iv), is inconsistent with Article 14(d) of the SCM Agreement. India also requests the Appellate Body to find, as a necessary consequence, that the United States acted inconsistently with Article 14(d) in the underlying countervailing duty investigation at issue.[94]

2.1.4.1  Assessment of the adequacy of remuneration for government-provided goods required under Article 14(d) of the SCM Agreement

2.47.  India appeals the Panel's dismissal of its claim that the US benchmarking mechanism, reflected in Section 351.511(a)(2)(i)-(iii) of the US Regulations, is inconsistent with Article 14(d) of the SCM Agreement because it fails to require, in every case, that the adequacy of remuneration for government‑provided goods be assessed from the perspective of the government provider, prior to assessing whether a benefit has been conferred on a recipient. In rejecting India's claim, the Panel erred in its interpretation of Article 14(d), and acted inconsistently with its duty under Article 11 of the DSU.

2.48.  India asserts that, in finding that a determination of inadequate remuneration from the perspective of the recipient necessarily results in a finding of benefit within the meaning of Article 14(d), the Panel incorrectly interpreted the first sentence of Article 14(d). Noting that the first sentence of Article 14(d) refers to the terms "benefit" and "remuneration", India submits that the fact that separate terms are used implies that, conceptually, "benefit" and "remuneration" are not the same. Moreover, the text of Article 14(d) does not state that a benefit is conferred on a recipient "each and every time" that remuneration is found to be inadequate. The presence of the term "unless" in the first sentence of Article 14(d), as well as the phrase "shall not be considered as conferring a benefit unless", implies that, without establishing that the government provided the good in question for less than adequate remuneration, there can be no benefit conferred on a recipient of that good. This does not suggest, however, that inadequacy of remuneration must always result in a determination of benefit. In other words, inadequacy of remuneration under Article 14(d) is necessary, but not always sufficient, to establish that a benefit, within the meaning of that provision, has been conferred on a recipient of government-provided goods.[95]

 


2.49.  India submits that the Panel erred in its interpretation of Article 14(d) of the SCM Agreement in finding that the adequacy of remuneration for government provided-goods is to be assessed from the perspective of the recipient, rather than the government provider. Noting that the first sentence of Article 14(d) refers to "the provision of goods or services … by a government", India considers that the text and context of Article 14(d) support its contention that the adequacy of remuneration must be assessed from the perspective of the government provider. Moreover, because "benefit", under Article 14(d), is determined from the perspective of the recipient, it is "logical" that the adequacy of remuneration for government-provided goods be assessed from the perspective of the government provider. If the remuneration is found to be inadequate, the investigating authority would then have to assess whether a benefit has been conferred on the recipient. India considers that the Panel's conclusion that adequacy of remuneration need not be assessed separately from, and prior to, assessing whether a benefit has been conferred on the recipient is contrary to "the ordinary and contextual understanding" of the first sentence of Article 14(d).[96]

2.50.  India considers further that the Panel's interpretation of Article 14(d) suffers from inherent contradictions. First, India sees a contradiction between, on the one hand, the Panel's statement that "remuneration" and "benefit" relate to "different notions" and, on the other hand, the Panel's conclusion that a finding of inadequate remuneration necessarily results in a finding of benefit. Second, India considers that the Panel's interpretation of the term "remuneration" to mean "the sum that is paid for the good provided by the government"[97] does not reconcile with its finding that Article 14(d) does not require separate analyses of "adequacy of remuneration" and of "benefit". India questions how one can logically assess the adequacy of remuneration paid to the government from the perspective of any entity other than the government. Third, India considers that, if a competitor's price is adopted to determine simultaneously both the adequacy of remuneration and the amount of benefit conferred (by assessing whether if the government price is less than the benchmark), there would be no difference between the "standards" applicable to each concept. This, argues India, would result in "circularity" in the first sentence of Article 14(d).[98]

2.51.   For these reasons, India requests the Appellate Body to reverse the Panel's finding that, under Article 14(d) of the SCM Agreement, Members are not required to assess the adequacy of remuneration for government-provided goods from the perspective of the government provider, prior to assessing the quantum of benefit conferred on a recipient. Instead, the Appellate Body should find that Article 14(d) requires an assessment of the adequacy of remuneration actually received by the government provider of goods prior to determining the quantum of benefit received by the recipient. India further requests the Appellate Body to find that the US benchmarking mechanism, as reflected in Section 351.511(a)(2)(i)-(iii) of the US Regulations, is inconsistent with Article 14(d) of the SCM Agreement because it does not require, in every case, that the adequacy of remuneration for government-provided goods be assessed from the perspective of the government provider, prior to assessing the amount of benefit conferred on a recipient. It follows, submits India, that the Appellate Body must also find that the United States acted inconsistently with Article 14(d) of the SCM Agreement by applying its benchmarking mechanism in the underlying investigations concerning the sale of iron ore by the NMDC and the GOI's grant of captive mining rights for iron ore and coal.

2.1.4.2  Exclusion of government prices as benchmarks under the US benchmarking mechanism

2.52.  India notes that it had argued before the Panel that the US benchmarking mechanism is inconsistent with Article 14(d) of the SCM Agreement because, under Tier I of that mechanism, the United States simply rejects government prices that do not emanate from competitive government auctions. India submits that the Panel found that "government transactions and prices can be presumptively and conclusively ignored" in the assessment of "prevailing market conditions" under Article 14(d).[99] In making this finding, the Panel erred in its interpretation of Article 14(d).

2.53.  Noting that the first sentence of Article 14(d) states that the provision of goods by a government is not to be considered as conferring a benefit unless proved otherwise, India contends that the direct implication of this is that Article 14(d) does not permit investigating authorities to reject presumptively the government price under challenge as not being market driven. Yet the Panel, contrary to Article 14(d), simply assumed that all government prices are ipso facto presumed to cater to public policy objectives and, hence, can be disregarded for the purposes of Article 14(d). India considers that the Panel's interpretation renders the first sentence of Article 14(d) otiose. Moreover, Article 14(d) is concerned with the market on an "as is" basis, and therefore does not permit government prices to be disregarded in the analysis of benefit. In this regard, the Appellate Body found, in US – Softwood Lumber IV, that the term "market conditions" in Article 14(d) does not refer to a market undistorted by the government's financial contribution.[100] In addition, the Panel's interpretation of Article 14(d) fails to account for the implications of the Appellate Body's findings, in US – Anti-Dumping and Countervailing Duties (China), that governmental loans cannot ipso facto be rejected as "non-commercial".[101] This means that there is no presumption that government prices are ipso facto unusable as benchmarks for assessing benefit under Article 14(d). Instead, investigating authorities are required to establish whether government presence or influence in the relevant market causes distortions that render the relevant government prices unusable.

2.54.  For the above reasons, India requests the Appellate Body to reverse the Panel's finding that government prices can be presumptively rejected by investigating authorities as potential benchmarks under Article 14(d) of the SCM Agreement. Because this finding led the Panel to reject India's claim that Section 351.511(a)(2)(i)-(ii) of the US Regulations is inconsistent with Article 14(d), India further requests the Appellate Body to find that Section 351.511(a)(2)(i)-(ii) is inconsistent with Article 14(d) because it presumptively excludes government prices that do not emanate from competitive government auctions as benchmarks under Tiers I and II of the US benchmarking mechanism. In addition, India requests the Appellate Body to find that the USDOC's "presumptive and conclusive" rejection of NMDC export prices as a relevant benchmark for assessing the adequacy of remuneration in respect of iron ore provided by the NMDC is inconsistent with Article 14(d) of the SCM Agreement.[102]

2.1.4.3  Use of world market prices under Tier II of the US benchmarking mechanism

2.55.  India claims that the Panel erred in rejecting its claim that the US benchmarking mechanism is inconsistent with Article 14(d) of the SCM Agreement because it permits the use of world market prices as benchmarks under Tier II of the US benchmarking mechanism without requiring the USDOC to first exhaust fully all sources of in-country benchmarks. India argues that, in rejecting its claim, the Panel acted inconsistently with its duties under Articles 11 and 12.7 of the DSU, and erred in its interpretation and application of Article 14(d) of the SCM Agreement.

2.56.  India notes that the Panel understood India's argument to be that out-of-country benchmarks may only be used in situations where the market in the country of provision is distorted due to the predominant role of the government provider in that market. India claims that the Panel understood its argument in a very narrow manner, and ignored India's argument that the measure at issue effectively permits the USDOC to use out-of-country benchmarks without exhausting all possible sources of in-country benchmarks. Thus, India contends that it had effectively challenged the use of world market prices as benchmarks under Tier II of the US benchmarking on two different grounds. First, the US benchmarking mechanism is inconsistent with Article 14(d) because it permits recourse to out-of-country benchmarks in situations other than where the market in the country of provision is distorted due to the predominant role played by government in the market. Second, the US benchmarking mechanism is inconsistent with Article 14(d) because it permits recourse to out-of-country benchmarks without requiring the USDOC to first exhaust all possible sources of in-country benchmarks. India claims that the Panel ignored the latter ground of its claim. In India's view, the Panel's assessment falls short of the standard imposed on panels under Article 11 of the DSU.

2.57.  India also challenges, under Articles 11 and 12.7 of the DSU, the Panel's finding that Article 14(d) of the SCM Agreement permits recourse to an out-of-country benchmark in "other situations" besides where the market in the country of provision is distorted as a result of governmental interference in that market. The Panel failed to provide basic guidelines to determine what these "other situations" are, and therefore failed to provide a basic rationale for its findings as required by Article 12.7 of the DSU, "read with" Article 11 of the DSU.[103]

2.58.  Furthermore, India challenges the Panel's interpretation of Article 14(d) of the SCM Agreement as permitting recourse to an out‑of‑country benchmark in "other situations" besides where the market in the country of provision is distorted by governmental interference in that market. According to India, the Panel failed to appreciate the implications of previous panel and Appellate Body reports in interpreting Article 14(d). These previous reports highlight the exceptional nature of the circumstances in which out-of-country benchmarks may be used under Article 14(d). In US – Softwood Lumber IV and US – Anti‑Dumping and Countervailing Duties (China), the Appellate Body did not endorse the use of out-of-country benchmarks in circumstances unrelated to governmental interference in the relevant market. India emphasizes that all these cases involved situations of governmental interference in the market to varying degrees, including where the government (i) is the predominant supplier of the goods in question in the market, (ii) is the only suppliers of the particular goods in the country, or (iii) administratively controls all of the prices for the goods in the country. In US – Anti‑Dumping and Countervailing Duties (China), the Appellate Body considered the predominant role of the government in the market as the "very limited" circumstance in which the investigating authorities may use a benchmark other than private prices in the country of provision.[104] For India, this does not permit authorities to use out-of-country benchmarks simply because a limited set of in-country benchmarks are unavailable.[105]

2.59.  India also challenges the Panel's rejection of its claim that the US benchmarking mechanism is inconsistent with Article 14(d) of the SCM Agreement because it does not require, in every case, that Tier II benchmarks be adjusted to reflect prevailing market conditions in the country of provision. India submits that, in rejecting its claim, the Panel acted inconsistently with Article 11 of the DSU, and erred in its application of Article 14(d) of the SCM Agreement.

2.60.   India notes that the Panel rejected its claim on the basis that, because the US statutory provision, implemented by the US Regulations setting forth the US benchmarking mechanism, requires that the adequacy of remuneration for government-provided goods be assessed in relation to the prevailing market conditions in the country of provision, Tier II benchmarks applied pursuant to the implementing Regulation must, in law, also relate to the prevailing market conditions in the country of provision. Noting that the specific measure challenged by India is the US Regulations setting forth the US benchmarking mechanism, rather than the overarching statutory provision that they implement, India argues that the Panel acted inconsistently with Article 11 by ignoring the plain text and meaning of the specific measure at issue. In addition, the Panel violated Article 11 of the DSU by simply accepting the United States' assertions about the meaning and implications of the overarching statutory provision implemented by the US Regulations setting forth the US benchmarking mechanism.[106]

2.61.  Furthermore, India recalls the Appellate Body's finding that, where proxies such as prices for similar goods quoted on world markets are used as benchmarks under Article 14(d), investigating authorities are under an obligation to ensure that the resulting benchmark relates or refers to, or is connected with, prevailing market conditions in the country of provision.[107] India emphasizes that, because market conditions are not presumed to be the same inside and outside the country of provision, Members are mandated to make necessary adjustments to ensure that out-of-country benchmarks selected for the purpose of assessing benefit under Article 14(d) reflect prevailing market conditions in the country of provision. India argues that there is no presumption that market conditions prevailing outside a Member can relate to, refer to, or be connected with, prevailing market conditions in the country of provision. According to India, the Appellate Body, in US – Softwood Lumber IV, acknowledged that it may be close to impossible to adjust out‑of‑country benchmarks to reflect prevailing market conditions in the country of provision.[108] India highlights, in addition, that countervailing duties are not intended to countervail differences in comparative advantages between countries. By not requiring adjustments to ensure that out‑of‑country benchmarks reflect prevailing market conditions in the country of provision, the challenged measure does not account for comparative advantages that a Member may have. India therefore contends that, in rejecting its above claim, the Panel erred in its application of Article 14(d) of the SCM Agreement, because neither the US Regulations, nor the overarching statutory provision that they implement, mandate the need to make adjustments in the case of Tier II benchmarks.

2.62.  For these reasons, India requests the Appellate Body to reverse the Panel's finding that the use of world market prices as Tier II benchmarks under the US benchmarking mechanism is consistent with Article 14(d) of the SCM Agreement, and to find, instead, that the US benchmarking mechanism is inconsistent with Article 14(d) because: (i) it requires the use of out‑of-country benchmarks without first establishing that the market in question is distorted by governmental interference in that market; (ii) it requires the use of out-of-country benchmarks without first exhausting all possible sources of in-country benchmarks; and (iii) it does not require that Tier II benchmarks be adjusted to reflect prevailing market conditions in the country of provision. In India's view, it follows that the Appellate Body must also find that the USDOC's determinations of benefit in the underlying countervailing duty investigation concerning the provision of iron ore by the NMDC and the GOI's grant of captive mining rights for iron ore and coal are inconsistent with Article 14(d) of the SCM Agreement.

2.1.4.4  The Panel's failure to assess two grounds of India's "as such" claim against the US benchmarking mechanism

2.63.  India appeals the Panel's assessment of India's claim that the US benchmarking mechanism, as reflected in Section 351.511(a)(2)(i)-(iii) of the US Regulations, is inconsistent with Article 14(d) of the SCM Agreement. India recalls that it submitted six "different grounds" before the Panel in support of its claim that the US benchmarking mechanism is inconsistent with Article 14(d).[109] These grounds focused on different aspects of Article 14(d) and are "akin to six different sub-claims" that the Panel was required to assess independently. However, India submits, the Panel failed to assess two of the six grounds submitted by India and thereby acted inconsistently with its duty under Article 11 of the DSU.[110]

2.64.  First, India notes that, on the basis of the text of the second sentence of Article 14(d), and a comparison with Articles 14(b) and 14(c) of the SCM Agreement, India had argued before the Panel that a government price in accordance with "commercial considerations" cannot constitute remuneration that is "less than adequate" within the meaning of Article 14(d). Second, India notes that it had argued before the Panel that the US benchmarking mechanism is inconsistent with Article 14(d) because it permits a government price that is "adequate" under Tier III of the US benchmarking mechanism to be rejected on the basis of the application of benchmarks under Tiers I and II of that mechanism. According to India, the Panel failed to evaluate either of these arguments independently and, instead, dismissed them on the basis of its rejection of India's argument that, under Article 14(d), the adequacy of remuneration must be assessed from the perspective of the government provider before assessing whether a benefit has been conferred on the recipient.[111]

2.65.  India requests the Appellate Body to examine the above two grounds for its claim and to find that the US benchmarking mechanism is inconsistent with Article 14(d) of the SCM Agreement. With respect to the first of these grounds, India requests the Appellate Body to find that Article 14(d) does not permit investigating authorities to determine the existence of "benefit" merely because a government price is less than a certain benchmark price. India requests the Appellate Body to further find that, where an investigating authority finds a difference between the government price and a certain benchmark price, the investigating authority is under an obligation to assess whether the difference in price is justified by "commercial considerations". In support of this argument, India relies on the text of the second sentence of Article 14(d), as well as the context provided by the other subparagraphs of Article 14, and Article XVII:1(b) of the GATT 1994. The second sentence of Article 14(d) states that the adequacy of remuneration shall be determined "in relation to prevailing market conditions" for the good or service in question in the country of provision. In India's view, the text of Article 14(d) thus necessarily limits the relevant market to only the "goods in question" and the "country of provision".[112]

2.66.  Turning to the context provided by other subparagraphs of Article 14, India submits that it is clear that determinations under Article 14(b) or (c) have to be made using a rigid comparison, and the existence of a benefit is established once there is a difference in the amounts being compared. By contrast, Article 14(d) does not state that the provision of goods confers a benefit if there is a difference between, on the one hand, the amount paid by the recipient for the goods provided by the government and, on the other hand, the amount the recipient would have to pay to obtain the same goods on the market. Instead, by using the phrases "in relation to" and "prevailing market conditions", Article 14(d) implies a much broader and more comprehensive analysis using the "prevailing market conditions" as the framework, rather than as a "rigid" comparison. The substantial differences in the structure, language, and approaches of Articles 14(b) and 14(c), on the one hand, and Article 14(d), on the other hand, suggest that, under the latter provision, a given amount of "remuneration" for government-provided goods may be "adequate", even if there is a difference between the government price and the price for similar goods transacted between private parties in the relevant market.[113]

2.67.  India points to further context found in Article XVII:1(b) of the GATT 1994. Noting that price, quality, availability, marketability, transportation, and other conditions of purchase or sale are all factors to be taken into account in determining whether the purchases or sales of a state trading enterprise are in accordance with "commercial considerations" under Article XVII:1(b), India submits that "the duplication of the very same factors"[114] in Article 14(d) shows equivalence in the concepts underlying Article XVII:1(b) of the GATT 1994 and Article 14(d) of the SCM Agreement. Thus, prices set in accordance with "commercial considerations" would be prices reflective of the supply and demand of both sellers and buyers in the market. Moreover, the "prevailing market conditions" cannot be anything other than those arising from enterprises engaged in the purchase and sale of goods based on considerations and factors that are characteristic of commerce and trade. Thus, in India's view, an assessment of whether prices are set in "accordance with commercial considerations" cannot be any different from an assessment of whether a given price is "less than adequate" with respect to "prevailing market conditions".[115]

2.68.  Accordingly, India argues that, when properly interpreted, the second sentence of Article 14(d) has a "far wider import than a mere minimalist price-benchmark" comparison. While it may not be incorrect for an investigating authority to start its examination by using a private price as a benchmark, it is certainly incorrect for the investigating authority to stop its analysis with such comparison. Instead, if this comparison shows a difference between prices, the investigating authority is bound to examine further whether "commercial considerations" explain this difference. India maintains, therefore, that the US benchmarking mechanism is inconsistent with Article 14(d) because it does not require, in every case, a determination of whether the government acts in accordance with commercial considerations and has provided goods for adequate remuneration when assessed in relation to prevailing market conditions in the country of provision.[116]

2.69.  Turning to the second ground that the Panel failed to evaluate, India submits that the use of the phrase "shall not be considered as conferring a benefit unless" in Article 14(d) means that, unless proven otherwise, the provision of goods by a government is not considered to confer a benefit. Thus, the "logical corollary" to the first sentence of Article 14(d) is that, where the "remuneration" for government-provided goods is "adequate" under a method consistent with Article 14(d), such remuneration cannot be considered as conferring a benefit. Noting that, under Tier III of the US benchmarking mechanism, the USDOC examines whether the government price for the relevant good is consistent with "market principles", India contends that, because the Tier III methodology is itself consistent with Article 14(d) of the SCM Agreement, a price that is "adequate" under that methodology cannot become inadequate as a result of the application of benchmarks under Tiers I and II of the US benchmarking mechanism. India submits that, for this reason, the "hierarchical approach" that characterizes the US benchmarking mechanism is inconsistent with Article 14(d).[117]

2.70.  For these reasons, India requests the Appellate Body to find that the Panel acted inconsistently with Article 11 of the DSU by failing to evaluate separately two of the grounds on which it rested its claim that the US benchmarking mechanism, as reflected in Section 351.511(a)(2)(i)-(iii) of the US Regulations, is inconsistent with Article 14(d) of the SCM Agreement. India further requests the Appellate Body to examine these grounds, complete the analysis, and find that the US benchmarking mechanism is inconsistent with Article 14(d). In India's view, it follows as a "necessary consequence" that the Appellate Body must find that the United States acted inconsistently with Article 14(d) of the SCM Agreement in the underlying countervailing duty investigation concerning the provision of iron ore by the NMDC and the GOI's grant of captive mining rights for iron ore and coal.

2.1.4.5  Mandatory use of "as delivered" prices as benchmarks under the US benchmarking mechanism

2.71.  India appeals the Panel's finding that the mandatory use of "as delivered" prices as benchmarks under Section 351.511(a)(2)(iv) of the US Regulations is not inconsistent with Article 14(d) of the SCM Agreement. India submits that, in reaching this finding, the Panel acted inconsistently with its duty under Article 11 of the DSU, and erred in its interpretation and application of Article 14(d).

2.72.  India advances two claims under Article 11 of the DSU in relation to the Panel's above finding. First, India takes issue with the Panel's statement that India had conflated the term "prevailing market conditions", in Article 14(d), with the contractual terms and conditions of the government provision under investigation. Contrary to the Panel's statement, India's case before the Panel was that the term "conditions of sale", within the meaning of Article 14(d), refers to the "general or common stipulation"[118] present in contracts for the provision of the relevant goods in the country of provision. The Panel read India's submissions out of context, and construed India's claim "so narrowly" that the "very claim" made by India was altered. In so doing, India asserts, the Panel effectively engaged in an assessment of a matter that was not before it, and thereby acted inconsistently with Article 11 of the DSU.[119]

2.73.  Second, India claims that the Panel acted inconsistently with Article 11 of the DSU by failing to apply its own interpretation of Article 14(d) to its assessment of India's claim. India recalls that, in the course of rejecting India's claim, the Panel interpreted Article 14(d) and found that the terms "prevailing market conditions" and "conditions of sale" relate to "the general conditions of the relevant market, in the context of which market operators engage in sales transactions".[120] The Panel did not, however, make a finding on whether the sale of a good in the market generally on an ex works basis constitutes one of such "general conditions". India argues that a finding on this specific issue would have "materially affected"[121] the Panel's decision to reject India's claim. This is because, if the fact that a given good in the market is being sold generally on an ex works basis constitutes one of the "general conditions" referred to by the Panel, then, determining the adequacy of remuneration on an "as delivered" basis, in every case, would result in disregarding "prevailing market conditions" where the good in question is generally sold on an ex works basis in the country of provision. Thus, in its assessment of India's claim against the mandatory use of "as delivered" prices under the US benchmarking mechanism, the Panel was required to apply its interpretation of Article 14(d) to that measure. India alleges that, by not doing so, the Panel failed to assess the claim that was before it and, therefore, acted inconsistently with Article 11 of the DSU.

2.74.  For India, the Panel's rejection of its claim against the mandatory use of "as delivered" prices under the US benchmarking mechanism was partly based on the Panel's erroneous interpretation that government prices can ipso facto be rejected under Article 14(d) of the SCM Agreement. India notes that it has challenged this interpretation of the Panel in the context of its claim regarding the exclusion of government prices as benchmarks under the US benchmarking mechanism. For the same reasons advanced in relation to that claim, India submits that the Panel erred in rejecting its claim on the basis that government prices can ipso facto be rejected under Article 14(d).[122]

2.75.  India further notes that it had argued before the Panel that the use of "as delivered" out‑of‑country prices as benchmarks under the US benchmarking mechanism nullifies the comparative advantage of the country of provision in terms of being able to provide the goods in question locally. India notes that the Panel rejected this argument based on the alleged existence of an import transaction in the underlying investigation, which, in the Panel's view, meant that import transactions necessarily relate to prevailing market conditions in India. However, India argues that the alleged existence of one import transaction in the underlying investigation only justifies the use of "as delivered" prices in one isolated circumstance, whereas India's claim relates to the adjustment of out‑of‑country benchmarks to reflect delivery charges in all circumstances. Thus, India maintains that the Panel failed to provide a "basic rationale" to justify its rejection of India's claim concerning the countervailing of "comparative advantages" and, therefore, acted inconsistently with its mandate under Article 11 of the DSU, "read with" Article 12.7 of the DSU.

2.76.  According to India, in rejecting its above argument, the Panel also erred in its interpretation and application of Article 14(d). The "underlying premise" on which the Panel rejected its argument is that import transactions reflect prevailing market conditions in the country of provision. Based on that premise, the Panel concluded that the existence of even a single import transaction, inclusive of all delivery and import charges, "necessarily" relates to prevailing market conditions in India. The Panel thus conflated the term "prevailing market conditions" with the existence of import transactions. Yet, as the Panel itself recognized, "prevailing market conditions" relate to the general conditions of the relevant market, in the context of which market operators engage in sales transactions. Noting that the Appellate Body has considered that Article 14(d) demands an examination of the entire market, accounting for both sides of the transaction (i.e. demand and supply), India submits that the Panel's premise places a disproportionate emphasis on import transactions. However, where there is domestic supply for the good in question, as well as one or more import transactions for that good, the "prevailing market conditions" in the country of provision can only be determined by comprehensively accounting for both types of transactions. The measure under challenge forecloses any such examination. India therefore submits that the premise on which the Panel rejected its claim is "fundamentally flawed" and "ignores the ordinary understanding" of Article 14(d).[123]

2.77.  For the above reasons, India requests the Appellate Body to reverse the Panel's finding that the mandatory use of "as delivered" prices under the US benchmarking mechanism is not inconsistent with Article 14(d) of the SCM Agreement. Further, India requests the Appellate Body to complete the legal analysis and find that the mandatory use of "as delivered" benchmarks, provided for under Section 351.511(a)(2)(iv) of the US Regulations, is inconsistent with Article 14(d). In India's view, it follows as a "necessary consequence" that the Appellate Body must also find that the United States acted inconsistently with Article 14(d) of the SCM Agreement in the underlying countervailing duty investigation concerning the provision of iron ore by the NMDC and the GOI's grant of captive mining rights for iron ore and coal. India advances the following arguments in support of its request for completion of the analysis.

2.78.   India submits that the fact that goods are sold generally in the market in question on an ex works or "as delivered" basis is a "condition of sale" and hence one of the "prevailing market conditions" referred to in Article 14(d). In support of this interpretation of Article 14(d), India first notes that, in its ordinary sense, the term "condition" refers to a rule or a decision that one must agree to, sometimes forming part of a contract or a formal agreement[124]; it also refers to a stipulation or a prerequisite in a contract, or a will or any legal instrument, constituting the essence of the instrument.[125] Therefore, India submits that the term "conditions of sale", as it appears in Article 14(d), refers to the general or common stipulation present in contracts for the provision of the goods in question in the country of provision.

2.79.  In addition, India notes that these conditions in commercial contracts materially alter the rights and liabilities of the parties to the transaction. This implies that the United States cannot assess the adequacy of remuneration for government‑provided goods using "as delivered" benchmarks in all cases. Instead, there must be an evaluation of whether the sale of a good on an "as delivered" basis is actually one of the "conditions of sale" prevailing in the relevant market. Under the US benchmarking mechanism, the adequacy of remuneration for government-provided goods is assessed using "as delivered" prices as benchmarks, irrespective of the "conditions of sale" prevailing in the country of provision. In India's view, this is inconsistent with the ordinary meaning of the second sentence of Article 14(d).

2.80.  India submits that "the sole objective" of requiring comparisons to be made at an "as delivered" level is to "arbitrarily increase" the benchmark price to a higher level so that benefit is established even in situations where no benefit has actually been conferred. Where the USDOC adopts out-of-country benchmarks (import prices under Tier I or world market prices under Tier II) to assess the adequacy of remuneration for government-provided goods, an affirmative determination of "benefit" is a foregone conclusion, because international freight and import duties are almost always higher than domestic freight and local taxes. India maintains that this cannot be a reasonable and good faith understanding of Article 14(d) of the SCM Agreement.[126]

2.81.  India further submits that the use of "as delivered" prices as benchmarks is inconsistent with the Appellate Body's finding, in US – Softwood Lumber IV, that Article 14(d) cannot be used to countervail "comparative advantages" of Members.[127] Specifically, the use of "as delivered" out‑of-country price benchmarks provided for under the US benchmarking mechanism effectively countervails comparative advantages of the country of provision. The use of "as delivered" import prices under Tier I, or "as delivered" world market prices under Tier II, of the US benchmarking mechanism creates the "hypothetical situation"[128] that the good in question is not available in the country of provision. Thus, the measure at issue presumes that, under the "prevailing market conditions" in the country of provision, users of the relevant good would necessarily import the good at a price inclusive of international freight, import duties, and all other delivery charges. However, India contends, in a given set of facts, there may actually be no import transactions of this nature in the country of provision, and, even if such transactions exist, they could occupy a significantly small percentage of the entire supply-demand matrix in the country of provision. Therefore, India reiterates that, where out-of-country benchmarks are used under the US benchmarking mechanism, the adjustment of these benchmarks to include all delivery charges, as if the good were generally imported, nullifies the comparative advantage of the country of provision in terms of being able to provide the goods in question locally.[129]

2.1.5  Benefit – "As applied" claims

2.1.5.1  The USDOC's determination that the NMDC provided iron ore for less than adequate remuneration

2.82.  In relation to the USDOC's determination that the NMDC provided iron ore for less than adequate remuneration, India appeals the Panel's findings concerning: (i) the ex post rationale put forward by the United States to justify the USDOC's rejection of certain domestic pricing information as Tier I benchmarks for assessing the adequacy of remuneration for iron ore provided by the NMDC; (ii) the USDOC's use of "as delivered" prices from Australia and Brazil as benchmarks for assessing the adequacy of remuneration for iron ore provided by the NMDC; and (iii) the USDOC's rejection of certain NMDC export prices as Tier II benchmarks in the 2006, 2007, and 2008 administrative reviews. India claims that, in making its findings, the Panel erred in its interpretation and application of Article 14(d), the chapeau of Article 14, and Articles 12.1, 12.4, and 12.7 of the SCM Agreement. Moreover, the Panel acted inconsistently with its duty under Article 11 of the DSU. India requests the Appellate Body to reverse the challenged Panel findings and find instead that, in determining that the NMDC provided iron ore for less than adequate remuneration, the United States acted inconsistently with Article 14(d) and the chapeau of Article 14 of the SCM Agreement. Moreover, because the USDOC used the benchmarks that it had selected for the NMDC investigation in the investigation concerning the GOI's grant of captive mining rights for iron ore and coal, India requests the Appellate Body to find that the USDOC's determinations that the GOI provided iron ore and coal for less than adequate remuneration are also inconsistent with Article 14(d) of the SCM Agreement.[130]

2.1.5.1.1  The Panel's findings concerning the USDOC's rejection of certain domestic pricing information

2.83.  India notes that the Panel found that the explanation put forward by the United States for the USDOC's rejection of the domestic pricing information as Tier I benchmarks constitutes ex post rationalization and, on that basis, the Panel found that the USDOC's failure to consider the domestic pricing information at issue was inconsistent with Article 14(d), and therefore Article 1.1(b), of the SCM Agreement. Noting that the Panel proceeded to consider, and make findings on, the ex post rationalizations that the United States had put forward, India argues that the Panel assessed a matter that was not before it, and thereby acted inconsistently with its mandate under Article 11 of the DSU. In this regard, the Appellate Body has established that a panel can examine only information contained in the record and the explanations given by the investigating authority in its published report.[131] Thus, India submits that any ex post rationalization offered in these Panel proceedings was information that fell outside the Panel's jurisdiction.

2.84.  India therefore requests the Appellate Body to declare moot the Panel's findings and observations in respect of the ex post rationalization put forward by the United States. In the event that the Appellate Body declines this request, India requests the Appellate Body to examine the findings made by the Panel on the merits of the ex post rationalization advanced by the United States, and find that, in making these findings, the Panel erred in its interpretation and application of Articles 12.1, 12.4, 12.7, and 14 of the SCM Agreement.[132] India advances the following four arguments in support of its requests.

2.85.  First, India asserts that the Panel erred in its interpretation of Article 14(d) in finding that the United States can ipso facto reject information concerning sales identified as having been made by government-owned entities as relevant benchmarks. According to India, this Panel finding clearly relates to the Panel's earlier finding that prices of government-owned enterprises can be rejected as benchmarks for assessing the adequacy of remuneration in respect of government-provided goods. However, India contends, the prices of the alleged government providers covered in the price charts submitted by the GOI and Tata[133] were not under challenge and, therefore, ought not to have been rejected by the USDOC in determining Tier I benchmarks for assessing the adequacy of remuneration for iron ore provided by the NMDC.

2.86.  India further asserts that, in finding that the USDOC would have been entitled to reject the price quote submitted by Tata[134] as a Tier I benchmark on the basis that it did not specify the exact percentage of iron ore content, the Panel erred in applying Articles 12.1, 12.7, and 14 of the SCM Agreement. India submits that, by harmoniously construing Article 14(d) with Articles 12.1 and 12.7 of the SCM Agreement, the USDOC could have used the price quote in determining a benchmark by determining the iron ore content on the basis of "facts available". Moreover, insofar as Article 12 of the SCM Agreement as a whole embodies due process rights of the interested parties, at a minimum, the United States had an obligation to identify the alleged defects in the information submitted on record such that the interested parties could have provided clarifications or sought to correct any alleged defects. In fact, the price quote in question formed part of the Tata Verification Report[135], and the United States therefore had every conceivable opportunity to verify this data and seek all possible clarifications. In failing to do so, India submits that the United States violated the due process obligations under Article 12.

2.87.  India additionally submits that, in finding that an investigating authority is not required to determine price benchmarks on the basis of information that is not shown to pertain to actual transactions, the Panel erred in interpreting Articles 12.1 and 14 of the SCM Agreement. The Panel's finding that Article 14 provides investigating authorities with sufficient discretion to disregard pricing information that does not pertain to actual transactions creates an unreasonable burden by requiring interested parties to file prices of actual transactions. India submits that pricing information from actual transactions is confidential, as recognized by Article 12.4 of the SCM Agreement. Thus, a given exporter would not have access to information pertaining to sales transactions of other parties where this exporter has purchased its entire supply through the alleged subsidy. In India's view, this leaves the exporter "at the mercy of" the investigating authority.[136]

2.88.  Finally, India submits that, in finding that the USDOC was not required to use the price quote submitted by Tata for the purpose of determining a Tier I benchmark because Tata had claimed confidentiality with respect to this price quote, the Panel erred in applying Articles 12.4, 12.1, and 14 of the SCM Agreement. India argues that Article 12.1, "read with" Article 14, requires investigating authorities to use confidential information at least in favour of the party providing such information. Thus, even assuming that the price quote in question was confidential information of Tata, Article 12.4 of the SCM Agreement does not preclude the use of such confidential information for Tata itself. Furthermore, it is not disputed that the benchmarks that were used to assess the adequacy of remuneration in respect of iron ore provided by the NMDC were also applied by the USDOC in determining the adequacy of remuneration in respect of the GOI's grant of captive mining rights for iron ore to Tata. In addition, in the 2008 administrative review and the 2013 sunset review, the provision of iron ore by the NMDC to Tata was also countervailed on the basis of adverse facts available. Thus, the price quote submitted by Tata ought to have been used throughout the investigation to calculate the existence and amount of benefit allegedly obtained by Tata through the GOI's grand of captive mining right for iron ore. This price quote should also have been used in the 2008 administrative review and the 2013 sunset review to calculate the benefit allegedly obtained by Tata through the provision of iron ore by the NMDC. Accordingly, the Panel's finding is "an erroneous application" of Articles 12.4, 12.1, and 14 of the SCM Agreement.[137]

2.1.5.1.2  The USDOC's use of "as delivered" prices from Australia and Brazil as benchmarks

2.89.  India appeals the Panel's finding that the use of "as delivered" prices from Australia and Brazil as benchmarks for assessing the adequacy of remuneration in respect of iron ore provided by the NMDC is consistent with Article 14(d) of the SCM Agreement. According to India, in making this finding, the Panel acted inconsistently with its duty under Article 11 of the DSU, and erred in its interpretation and application of Article 14(d).

2.90.  India challenges, under Article 11 of the DSU, the Panel's reliance on a statement made by NMDC officials to support its finding that Australian and Brazilian prices for iron ore, adjusted for delivery to steel producers in India, indicate what a steel producer in India would be "willing to pay", and thus necessarily relate to the prevailing market conditions in India. India claims that "the Panel assumed that the reference to 'willing to pay to import' necessarily implies a reference to the final payment for the import inclusive of ocean freight, import duties and other delivery charges."[138] The Panel's reference to an isolated statement on the record to infer that the use of delivered prices of imported iron ore was appropriate disregards and contradicts actual evidence on the record. India highlights that the statements referred to by the Panel were never referred to by the USDOC in its findings in the underlying investigation. Thus, the Panel re-evaluated the record of the investigation, and justified the USDOC's determination on a basis that the USDOC itself had not referred to in its determination. According to India, this in itself suffices to establish that the Panel acted inconsistently with Article 11 of the DSU.

2.91.  In any event, India points to evidence on the record that, in its view, contradicts the Panel's assessment. According to India, a questionnaire response from the GOI, in the context of the 2006 administrative review, establishes that "the domestic prices for iron ore were determined by NMDC based on its export price for iron ore (F.O.B.) to Japan as published in the Tex Report, after accounting for currency conversion and rail freight, port charges etc."[139] Thus, the NMDC's sales of iron ore to Japan competed with sales of iron ore from Australia and, therefore, the NMDC's f.o.b. export prices were comparable to Australian f.o.b. prices. Because the NMDC's export prices were used to determine the NMDC's domestic prices, these domestic prices are "indirectly comparable to Australian prices as well".[140] Thus, the statement by NMDC officials that the NMDC took into account what steel producers were willing to pay to import, could have been a reference not to delivered import prices, but rather to the ex mine or the f.o.b. prices of imported iron ore.[141]

2.92.  Moreover, India submits that the Panel's "assumption" that NMDC officials were referring to the delivered prices of imported iron ore is "illogical".[142] In this regard, India contends that "every single market participant, including NMDC and purchasers of iron ore", would be aware that the costs of procuring iron ore from Australia or Brazil would be significantly higher than procuring it locally, as a result of the costs of ocean freight, international insurance, and applicable import duties. In addition, evidence on the record establishes that import transactions were minimal, and that the NMDC itself was not catering to the entire market for iron ore in India. This evidence highlights that the NMDC also competes with local players and, therefore, in its pricing policy, had to account for the prices charged by other domestic suppliers. In India's view, therefore, the Panel erroneously assumed that the NMDC's pricing policy was only dictated by the "delivered prices" of imported iron ore.

2.93.  In the light of the above, India asserts that the Panel's reference to an isolated statement by NMDC officials to infer that the use of "as delivered" prices from Australia and Brazil as benchmarks was appropriate under Article 14(d) disregards material evidence on the record. Thus, India submits that the Panel acted inconsistently with its duty under Article 11 of the DSU.[143]

2.94.  India further contends that the Panel erred in its interpretation and application of Article 14(d) in finding that the "as delivered" prices from Australia and Brazil reflect "prevailing market conditions" in India. In India's view, the term "prevailing market conditions" refers to the conditions prevailing in the market in general, as opposed to isolated acts of individual players in the market in question. Thus, the assessment of "prevailing market conditions" for countries having both import and domestic transactions for a particular good will depend on a qualitative and quantitative analysis of both types of transactions. The mere fact that one steel producer procured iron ore from Brazil in one isolated transaction in which it paid an "as delivered" price for the iron ore cannot be expanded into the generic conditions applicable to the market in India. Similarly, the Panel's reliance on a statement by NMDC officials that the NMDC allegedly prices iron ore based on what steel producers are willing to pay to import iron ore does not mean that all suppliers of iron ore in the market behaved in such a manner. In addition, India reiterates that evidence on the record shows that there were other domestic suppliers of iron ore in India, and that iron ore was not being supplied on an "as delivered" basis. Moreover, evidence on the record demonstrates that imports of iron ore are not physically able to enter the domestic market because foreign ships are too large for India's ports. This implies that there were a large number of transactions in India where the price for iron ore was not an "as delivered" price, and that the "as delivered" prices for iron ore did not constitute a "prevailing market condition" in India, within the meaning of Article 14(d). Thus, India argues that the Panel's reliance on "isolated import transactions" involving payment for iron ore on an "as delivered" basis to establish that these transactions reflected "prevailing market conditions" in India was based on an incorrect understanding of the term "prevailing market conditions" in Article 14(d).[144]

2.95.  Finally, India contends that the Panel erred in its interpretation of Article 14(d) in finding that the use of "as delivered" prices of iron ore from Australia and Brazil did not countervail India's comparative advantage in terms of its ability to supply the domestic demand for iron ore. India notes that its case before the Panel was that India had a comparative advantage whereby users of iron ore could procure iron ore locally without "having to suffer the costs and risks associated with" importing the good from a different country, and that the use of "as delivered" benchmarks countervailed this comparative advantage since it created the hypothetical scenario that iron ore does not exist in India, forcing Indian steel producers to import it.[145] India submits that the Panel dismissed its claim concerning the countervailing of India's comparative advantage through the use of "as delivered" benchmarks also on the basis of an isolated import transaction from Brazil by one steel producer, and an isolated statement by NMDC officials that the NMDC prices its iron ore based on what steel producers are willing to pay to import iron ore. India asserts that the Panel's dismissal of its claim concerning the countervailing of India's comparative advantage was thus also based on an erroneous interpretation of Article 14(d) of the SCM Agreement.[146]

2.1.5.1.3  The USDOC's rejection of NMDC export prices as Tier II benchmarks

2.96.  India appeals the Panel's dismissal of India's claim that the USDOC's exclusion of NMDC export prices from India to Japan as Tier II benchmarks, in the 2006, 2007, and 2008 administrative reviews, for assessing the adequacy of remuneration for iron ore provided by the NMDC is inconsistent with Article 14(d) and the chapeau of Article 14 of the SCM Agreement. In dismissing this claim, the Panel erred in its interpretation and application of Article 14(d), and failed to assess objectively India's claim under the chapeau of Article 14.

2.97.  India submits that the Panel's finding – made in the context of India's "as such" challenge against the US benchmarking mechanism – that government prices can be presumptively rejected as benchmarks under Article 14(d) led the Panel to reject India's claim concerning the USDOC's rejection of the NMDC's export prices as Tier II benchmarks. Because the Panel erred in finding that government prices can be presumptively rejected as benchmarks under Article 14(d), India requests the Appellate Body to find that the Panel erred in its interpretation and application of Article 14(d) in finding that the rejection of the NMDC's export prices as Tier II benchmarks is consistent with that provision.

2.98.  Finally, India submits that the Panel failed to assess objectively India's claim against the requirements of the chapeau of Article 14, and therefore did not assess whether the USDOC "adequately explained" its inconsistent treatment of the NMDC's export prices in the 2004 administrative review, on the one hand, and in the 2006, 2007, and 2008 administrative reviews, on the other hand.[147] Specifically, the Panel was required to evaluate whether the USDOC, clearly and intelligibly, and in a manner that could be easily understood and discerned, explained adequately why the NMDC export prices at issue did not constitute Tier II (world market price) benchmarks under Section 351.511(a)(2)(ii) of the US Regulations.[148] India therefore requests the Appellate Body to find that the Panel erred in "understanding and applying" the requirements of the chapeau of Article 14. Moreover, India further requests the Appellate Body to complete the legal analysis and find that the United States acted inconsistently with the chapeau of Article 14 because of the USDOC's rejection of the NMDC's export prices as a relevant benchmark.[149]

2.1.5.2  The USDOC's determination that the GOI provided iron ore for less than adequate remuneration through its grant of captive mining rights

2.99.  India appeals the Panel's finding that the USDOC's determination that the grant of mining rights for iron ore and coal by India conferred a benefit is not inconsistent with Article 14(d) of the SCM Agreement. According to India, the USDOC relied on a notional pricing methodology that was inconsistent with the requirement to assess whether there was "adequate remuneration" within the meaning of Article 14(d). India also contends that the Panel acted inconsistently with Article 11 of the DSU by failing to assess India's claim that the USDOC's benefit assessment was not in accordance with a good faith interpretation of Article 14(d). India requests the Appellate Body to reverse the Panel's findings, and to complete the legal analysis and find that the United States acted inconsistently with Article 14(d) in determining benefit for the GOI's grant of captive mining rights by comparing iron ore and coal prices with a "notional price" for extracted iron ore and coal.[150]

2.100.  India submits that the USDOC established that the remuneration received by the GOI was based on a price for the extracted mineral that included the cost of extraction, the royalty rate, and a notional reasonable profit. This "notional" price was then compared to a Tier II, out‑of‑country benchmark that was adjusted for freight and delivery charges. India maintains that the USDOC determined the benefit for an upstream product by comparing the extraction cost with an out‑of‑country benchmark, both of which pertained to a downstream product.

2.101.  India argues that, since Article 14(d) requires an assessment as to the adequacy of remuneration, such remuneration cannot be anything other than the actual amount received by the GOI. India considered several definitions of the word "remuneration", and found that they closely resemble the definitions provided by the Appellate Body in US – Softwood Lumber IV, consisting of "reward, recompense; payment, pay".[151] According to the Appellate Body, "a benefit is conferred when a government provides goods to a recipient and, in return, receives insufficient payment or compensation for those goods."[152] India contends that, in the case of mining rights, the only amount paid by the miner to the GOI is the royalty, and it is therefore the adequacy of these mining rights that is to be examined under Article 14(d) of the SCM Agreement.

2.102.  India argues that extracted iron ore and coal are the results of the activities of Indian miners, and that any such expenditure cannot be attributed to the GOI as the latter's remuneration. To do otherwise would result in an affirmative finding of benefit in every case of a grant of extraction rights because the compensation to the government for taking the risk associated with extraction is not factored into the equation employed by the USDOC. India further maintains that the USDOC could have, instead, used an alternative methodology that it employs for benefit determinations in the context of providing electricity, land leases, or water, where it determines whether the government price is set in accordance with market principles. Such a methodology is consistent with Article 14(d) of the SCM Agreement. India suggests that the reason such a methodology was not applied by the USDOC was that uncontested evidence on the Panel record showed the royalty rates charged by the GOI to be at similar levels as those charged by other WTO Members. India referred to an expert statement it had introduced before the Panel showing that India's pricing policies in respect of iron ore and coal were "consistent with market principles", and "not significantly lower than other ore producing nations".[153]

2.103.  In addition, India contends that the Panel erred in rejecting India's claim that the USDOC's methodology for determining benefit is inconsistent with a good faith interpretation of Article 14(d) of the SCM Agreement. According to India, "a good faith obligation flows through the text of [an] entire treaty including each and every article of a treaty, which is the subject matter of interpretation before a Panel".[154] By rejecting its claim as being outside the Panel's terms of reference, the Panel erred in refusing to assess India's claim that the USDOC's methodology is not in accordance with a good faith interpretation of Article 14(d). India therefore maintains that the Panel failed to assess the matter before it, as required by Article 11 of the DSU.

2.1.5.3  The USDOC's determination that SDF loans conferred a benefit within the meaning of Article 14(b) of the SCM Agreement

2.104.  India appeals the Panel's finding that the USDOC's determination that the issuance of SDF loans conferred a benefit is not inconsistent with Articles 1.1(b) and 14(b) of the SCM Agreement. India principally contends that the Panel failed to appreciate that the benchmark used under Article 14(b) must be comparable to the terms of loans provided under the SDF. India further contends that the Panel acted inconsistently with Article 11 of the DSU in disregarding material evidence on the Panel record relating to the manner in which consumers paid for increased levies on steel products. India requests the Appellate Body to reverse the Panel's findings in this regard and to complete the legal analysis and find that the United States acted inconsistently with Articles 1.1(b) and 14(b) of the SCM Agreement by determining that a benefit was conferred in respect of SDF loans.

2.105.  India notes that Article 14(b) requires a comparison of the amounts paid on a loan with those paid on a "comparable commercial loan". India submits that a proper understanding of the term "comparable commercial loan" would have led the Panel to agree with India that the deposits made by the participating steel producers to become eligible for SDF loans had to be accounted for in the benefit analysis. In accordance with the guidance from the Appellate Body in
US – Anti‑Dumping and Countervailing Duties (China), the benchmark to be chosen must have a similar structure as the loan under challenge. India observes that the decision of the Supreme Court of India that it had introduced before the Panel categorically states that "steel producers who did not contribute to the SDF program in the first place cannot obtain the SDF loans".[155] Thus, in order to ensure that the comparable commercial loan incorporates a similar structure as well, the United States should first have considered using loans that have a similar entry fee. According to India, the United States is not permitted to use a benchmark loan that is so markedly different from the government loan in question that it renders redundant the term "comparable" in Article 14(b).

2.106.  India adds that the existence of an entry deposit into a loan programme significantly affects the rate at which loans would later be disbursed using the same funds. Under normal market and commercial conditions in this scenario, commercial players would expect a lower rate of interest. India further contends that, although the USDOC could have made relevant adjustments to the benchmark, it is undisputed that it did not make any such adjustments to the benchmark in the underlying investigation at issue.

2.107.  India also maintains that the Panel disregarded material evidence on the Panel record relating to the manner in which consumers paid for increased levies on steel products. In particular, the Panel's assessment fails to consider the Supreme Court of India's decision that "the SDF program was not open to those who did not make investments into the fund in the first place".[156] This decision, India argues, is a relevant domestic interpretative tool in determining the features of the SDF loans. The decision of the Supreme Court shows that "the SDF levy was on the producers; and the ultimate beneficiaries of this added element were the steel plants themselves, i.e. the fund was not open to other steel producers."[157] Had the Panel been correct in that the SDF funds were consumer levies managed by the government, the SDF loans would have been open to all steel producers. India considers, however, that participating steel members had a right over the SDF funds, where others did not. Specifically, it is only the participating steel producers who had any title or interest to the SDF funds because it was their decision to create and contribute to the fund. Moreover, "it was the private entities who decided to increase prices of their products so as to direct this additional element of price to create the SDF fund".[158] In India's view, therefore, the SDF funds were akin to collective "profits" of the participating steel enterprises. India argues that the Panel did not refer to this evidence in its Report, and therefore did not objectively assess the facts and evidence before it, as required under Article 11 of the DSU.

2.1.6  Specificity

2.108.  India claims that the Panel erred in finding that the USDOC's determination that the sale of iron ore by the NMDC is specific is not inconsistent with Articles 1.2 and 2.1(c) of the SCM Agreement. India requests the Appellate Body to reverse the Panel's findings in this regard and to complete the legal analysis and find that the United States acted inconsistently with Article 2.1(c) of the SCM Agreement in determining that the sale of iron ore by the NMDC is de facto specific. India further requests that, in the event that the Appellate Body finds that the United States acted inconsistently with Article 2.1(c), the Appellate Body must also find that the United States acted inconsistently with Article 2.4 of the SCM Agreement. India adds that the violation of Article 2.4 follows from the United States' failure to substantiate with positive evidence that the NMDC sold iron ore to a limited number of certain enterprises.

2.1.6.1  Discrimination in favour of "certain enterprises"

2.109.  India considers that the Panel's finding, that Article 2.1(c) did not require an examination of whether the programme de facto discriminates between "certain enterprises" and other similarly situated enterprises, is self-contradictory. On the one hand, the Panel recognized that "the specificity determination under both Articles 2.1(a) and 2.1(c) is about '… existence of a restriction on access to the subsidy, in the sense that the subsidy is available to [certain enterprises], but not to others'."[159] Yet, on the other hand, "the Panel [held] that the test of 'specificity' is not about 'discrimination'."[160] In this regard, India considers that the fact that a subsidy is being given to some but not to other entities is exactly how one would normally define discrimination. India further submits that these "other" entities that are denied the subsidy would have to be "like" the "certain enterprises" that are granted the subsidy.

2.110.  India argues that its position is supported by the text and context of Article 2.1 of the SCM Agreement. Article 2.1(a) "impliedly suggests that the 'other' entities which are denied access to the subsidy are otherwise 'like' enough for them to have got that subsidy as well".[161] Similarly, under Article 2.1(b), if the objective criteria or conditions of a subsidy privilege "certain enterprises" over "others", a determination of non-specificity cannot be reached. India submits that, since Article 2.1(c) applies in the same context and within the same analytical framework, this logic would extend to this provision as well.


2.111.  India finds support for its position in the Appellate Body report in US – Large Civil Aircraft (2nd complaint), where the Appellate Body concluded that the inquiry under Article 2.1(c) "requires a panel to examine the reasons as to why the actual allocation of 'amounts of subsidy' differs from an allocation that would be expected to result if the subsidy were administered in accordance with the conditions for eligibility for that subsidy".[162] India emphasizes that the Appellate Body's analysis involved a comparative approach between the expected allocation of the subsidy in the ordinary course and the actual allocation of the subsidy in practice. Even when there was a de facto disparity in the way in which the subsidy was allocated, the Appellate Body explored whether this position could have been justified nonetheless on a logical basis. In India's view, had evidence in this regard been presented, the United States in that dispute could have demonstrated that the programme was in fact, not specific. India submits that the Appellate Body's reasoning highlights a comparative approach underlying the de facto specificity analysis, requiring an examination of factors that would explain or justify why only a few entities de facto benefited from the subsidy. This examination, according to India, is an analysis of whether or not there is de facto discrimination.

2.112.  With respect to the underlying investigation at issue in this dispute, India argues that the sale of iron ore by the NMDC is neutral from the perspective of governmental instruments and actions. Moreover, the sale of iron ore by the NMDC is potentially available only to users of iron ore. Thus, India contends that "there is no recorded disparity between the expected allocation and the actual allocation of the subsidy – the USDOC does not record that among the various users of iron ore, iron ore was sold by NMDC only to a limited number of them."[163] India highlights that those who were allegedly denied this iron ore, i.e. non-users of iron ore, are clearly not "like" users of iron ore. Thus, the non‑existence of iron ore sales to non-users of iron ore does not justify a finding of de facto specificity under Article 2.1(c). Accordingly, India considers that the United States did not demonstrate that the sale of iron ore was limited to only a few entities but not to others who were similarly situated from an eligibility perspective but were not provided iron ore, as required by Article 2.1(c). India further claims that this requirement relates to the overall object and purpose of disciplining trade‑distorting subsidies. As India argues, "[t]he sale of iron ore to persons who would in the ordinary course of business purchase iron ore, cannot be trade distortive in nature".[164]

2.1.6.2  The meaning of the phrase "limited number of certain enterprises"

2.113.  Under its second line of argumentation, India submits that the Panel erred in interpreting the phrase "limited number of certain enterprises" in Article 2.1(c) of the SCM Agreement. India observes that the term "limited number" is preceded by "use … by" and, therefore, Article 2.1(c) clearly focuses on the users of the subsidy programme being limited in number. Moreover, the term "limited number" is followed by the term "of certain enterprises". The word "of", in its ordinary sense, is used to denote a "sub‑set – super-set" relationship between "limited number" and "certain enterprises". Thus, in India's view, when understood in the light of the earlier inference that the provision deals with a "limited number" of "users", it is evident that these "limited number" of users form a sub-set of "certain enterprises". Additionally, India considers that the term "certain enterprises" in Article 2.1(c) refers to the person or persons or group of persons that benefit from the subsidy programme.

2.114.  India submits that, in rejecting its claim, the Panel ignored these significant inferences from the text of Article 2.1(c) because it concluded that the relevant category for the required numerical exercise is the category of "certain enterprises". India emphasizes that, on the contrary, the relevant category for the numerical exercise is the users of the programme within the category of "certain enterprises". In particular, according to the United States' own determination, the "certain enterprises" in this case are the "users of iron ore".[165] As a result, Article 2.1(c) requires the United States to have demonstrated that the alleged NMDC programme was being used by a limited number of entities within the set of "users of iron ore". In India's view, the United States, however, did not conduct any such analysis and thus, its specificity determination is not justified under Article 2.1(c).

2.1.6.3  Provision of goods and specificity

2.115.  Under its third line of argumentation, India contends that the Panel erred in finding that a government provision of goods can be de facto specific merely based on the "inherent limitations" on use of the goods provided. India contends that, under the Panel's interpretation, investigating authorities can determine the provision of goods to be de facto specific to certain enterprises even if this arises only based on the inherent limitations of the goods. In India's view, the Panel's interpretation creates redundancy in the SCM Agreement, given that it permits the investigating authority to find specificity as a matter of course, diluting the requirements enshrined in Articles 1.2 and 2.1. In particular, under the Panel's interpretation, "[i]f an authority is permitted to determine de facto specificity based on the inherent characteristics of the goods provided by a government, all government provisions of goods that amount to a subsidy under Article 1.1(a)(1)(iii) would ipso facto be de facto specific in every case."[166] Thus, according to India, the Panel's interpretation renders Article 2.1(c) inutile in the context of the subsidy programmes covered by Article 1.1(a)(1)(iii).

2.116.  Next, India addresses the Panel's statement that there are goods that can be provided to an "indefinite number" of certain enterprises, and are thus not specific, such as oil, gas, and water. India contends that the Panel's examples are not correct. Oil and gas need not be required in all industries in the economy, where the energy required is obtained through electricity. Water also is not a raw material required to manufacture all products in the economy. In any event, India considers that these are examples of goods that constitute "general infrastructure" within the meaning of Article 1.1(a)(1)(iii), and thus do not amount to a financial contribution.

2.117.  India further submits that the "absurdity"[167] of the Panel's interpretation is clear from the application of the specificity requirement by the United States in the underlying investigation. In particular, India points out that the purchase of iron ore from the NMDC is open to any person willing to pay the market consideration sought by the NMDC. However, the good in question in this case is iron ore, which by its inherent nature cannot be used by all industries. According to the Panel's interpretation, the only circumstance in which the provision of iron ore will not be specific under Article 2.1 is when the NMDC forcibly provides iron ore even to those industries that do not have the capability to consume or otherwise make use of iron ore. Consequently, India argues that the United States' understanding, upheld by the Panel, results in the automatic and mechanistic application of the specificity requirement, thereby robbing it of its value and purpose.

2.118.  In addition, India argues that the Panel erred in dismissing its argument that the negotiating history supports the position that an affirmative finding of de facto specificity will not be reached merely based on the inherent characteristics of the goods in question. According to India, the negotiating history of Article 2 of the SCM Agreement indicates that there was no consensus among the negotiators on the issue of determining specificity based solely on the inherent characteristics of the goods. Consequently, India emphasizes that "Article 2.1(c) of the SCM Agreement cannot be interpreted in a manner that would indirectly incorporate into the treaty what the negotiators could not originally agree on."[168] India therefore submits that the Panel erred by failing to accept this inference from the negotiating history.

2.119.  Finally, India claims that the Panel acted inconsistently with its obligation under Article 11 of the DSU because it failed to record and evaluate the "cogent reasons" offered by India for not following certain findings set out in the panel report in US – Softwood Lumber IV. According to India, the Panel based its conclusion regarding de facto specificity under Article 2.1(c) of the SCM Agreement solely on the findings in US – Softwood Lumber IV, despite the fact that India had submitted that such findings could not be relied upon in this case for various reasons. India argues that, although the Panel had every discretion to disagree with India and issue a finding that the "cogent reasons" offered by India were not sufficient to depart from an earlier view, the Panel could not ignore material submissions placed on the record by India. On this basis, India contends that the Panel's failure to record and evaluate the "cogent reasons" offered by India violates the due process rights of India in a manner inconsistent with Article 11 of the DSU.

2.1.7  Facts available

2.120.  India requests the Appellate Body to reverse the Panel's finding that the measure at issue, Section 1677e(b) of the US Statute and Section 351.308(a)-(c) of the US Regulations, is not inconsistent, "as such" and "as applied", with Article 12.7 of the SCM Agreement. India submits that the Panel erred in its interpretation of Article 12.7 of the SCM Agreement and, even if the Panel's interpretation is upheld, the Panel nonetheless failed to apply the correct legal standard for construing municipal law, and consequently failed to take into account material evidence in reaching its "as such" finding, contrary to Article 11 of the DSU. Furthermore, India claims that the Panel erred in finding that the application of a "rule" on highest non-de minimis subsidy rates in numerous instances does not give rise to "as applied" inconsistencies with Article 12.7. India also asserts that the Panel acted inconsistently with Article 11 of the DSU in finding that India failed to make a prima facie case in respect of its claim that the 2013 sunset review is inconsistent with Article 12.7 of the SCM Agreement. India requests the Appellate Body to complete the legal analysis in respect of both its "as such" and "as applied" claims under Article 12.7 and find that the measure at issue is inconsistent "as such" and "as applied" with Article 12.7 of the SCM Agreement.

2.1.7.1  Interpretation of Article 12.7 of the SCM Agreement

2.121.  India claims that the Panel erred in rejecting its interpretation of Article 12.7 of the SCM Agreement. India asserts that, based on a correct interpretation of Article 12.7, only the most fitting or appropriate facts determined by way of an "evaluative, comparative assessment" of all available evidence can be used, and that Article 12.7 cannot be used to punish or penalize non‑cooperation.[169] India argues that, although both its and the Panel's views on the interpretation of Article 12.7 stem from the findings of the panel and the Appellate Body in Mexico – Anti‑Dumping Measures on Rice, the Panel's view represents an incomplete and inaccurate understanding of those findings.

2.122.  In India's view, the Appellate Body's findings in Mexico – Anti-Dumping Measures on Rice indicate that both Article 12.7 of the SCM Agreement and Article 6.8 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement) are part of the due process requirements embodied in each agreement, and are intended to fulfil the very same objective and cannot be interpreted in a "markedly different" manner.[170] In particular, India argues that the Appellate Body actually applied the very same standard for both Article 6.8 of the Anti-Dumping Agreement and Article 12.7 of the SCM Agreement in that case, and further, that the Appellate Body upheld the panel's approach in that case that both provisions were contravened for the very same reasons.[171] In India's view, the Panel failed to account for these aspects of the Mexico – Anti-Dumping Measures on Rice rulings when finding that the interpretation of Article 12.7 advanced by India, which was based on the panel's finding in Mexico – Anti-Dumping Measures on Rice, is applicable only to Article 6.8 of the Anti-Dumping Agreement and not to Article 12.7 of the SCM Agreement.

2.123.  India argues that, contrary to the Panel's finding, the absence in the SCM Agreement of an equivalent to Annex II to the Anti-Dumping Agreement does not result in the general standards applicable under Article 12.7 of the SCM Agreement to be different to those under Article 6.8 of the Anti-Dumping Agreement.[172] India points out that the first sentence of Article 6.8 of the Anti‑Dumping Agreement and of Article 12.7 of the SCM Agreement are identical, and argues that, based on a detailed review of Annex II to the Anti-Dumping Agreement, nothing in Annex II prescribes any standard by which an investigating authority is required to select from among the many alternatives that may exist to fill a gap. Therefore, the Panel's reliance on the absence in the SCM Agreement of an equivalent to Annex II to the Anti-Dumping Agreement as a basis for prescribing a "markedly different" standard for Article 12.7 of the SCM Agreement from that in Article 6.8 of the Anti-Dumping Agreement was "erroneous and misplaced".[173]

2.124.  India argues that the understanding that Article 12.7 of the SCM Agreement and Article 6.8 of the Anti-Dumping Agreement refer to the very "same general requirements" has been consistently applied by panels in China – GOES, China – Broiler Products, and China – Autos (US).[174] India further argues that the Ministerial Declaration on Dispute Settlement Pursuant to the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 or Part V of the Agreement on Subsidies and Countervailing Measures supports the view that similar standards are to be applied across similar provisions in the Anti-Dumping Agreement and in the SCM Agreement.

2.125.  Finally, India submits that comparatively evaluating all the available facts should logically be part of the standard articulated by the Panel, which refers to the need to account for all substantiated facts on the record and ensure that only information that can "reasonably" replace the missing information is used. India argues that, as part of that standard, a panel would need to determine what a "reasonable" replacement for the missing information would be, taking account of all substantiated facts on the record. In India's view, it is unclear how an assessment of what is "reasonable", after having taken into account all substantiated facts on the record, is different than comparatively evaluating all the available facts with a view to selecting the best information.

2.1.7.2  The Panel's "as such" finding

2.126.  India appeals the Panel's rejection of India's "as such" claim under Article 12.7 of the SCM Agreement on the ground that the Panel failed to meet the requirements of Article 11 of the DSU by applying an incorrect standard for construing municipal law, and by consequently disregarding material evidence on its operation in reaching its finding. This claim is conditional upon the Appellate Body rejecting India's claim that the Panel erred in interpreting Article 12.7 of the SCM Agreement.

2.127.  India argues that the legal standard by which a Member's municipal law is to be construed involves, in addition to the text of the measure itself, a consideration of "other domestic interpretive tools", such as judicial interpretations and the legislative history. Thus, the Panel was correct in starting its analysis with the text of the law in question, namely, Section 1677e(b) of the US Statute and Section 351.308(a)-(c) of the US Regulations, but should have proceeded further to examine other evidence submitted relating to the construction of the measure. India therefore argues that the Panel erred in failing to consider the evidence placed on the record by India, namely, an excerpt of the Statement of Administrative Action, decisions issued by the Federal Circuit and the Court of International Trade (as well as the United States' failure to contest India's reliance on these), determinations of the USDOC, and a data sheet covering 245 USDOC determinations under the measure at issue.

2.128.  In India's view, these domestic interpretative tools demonstrate that Section 1677e(b) of the US Statute and Section 351.308(a)-(c) of the US Regulations do not require the USDOC to take into account all substantiated facts and are not intended to provide a reasonable replacement for the missing information. Rather, India submits that the evidence it submitted demonstrates that Section 1677e(b) of the US Statute and Section 351.308(a)-(c) of the US Regulations actually require adverse inferences to be drawn in each and every case of non‑cooperation, so as to "penalize" the non-cooperating party.[175] India asserts that this evidence is very clearly material, and that the Panel's disregard of this evidence violates Article 11 of the DSU.[176]

2.129.  India requests the Appellate Body to complete the legal analysis and find that the measure at issue is inconsistent, "as such", with Article 12.7 of the SCM Agreement.[177] India argues that, on the basis of a correct interpretation of Article 12.7, there are three separate and independent


grounds for demonstrating an inconsistency with Article 12.7, namely, that the measure at issue: (i) does not require the use of facts that are most fitting or most appropriate, but instead requires the use of information that is adverse to the non-cooperating party so as to penalize that party; (ii) enables the use of adverse facts without engaging in an evaluative, comparative assessment of all the available evidence; and (iii) enables a punitive application of the facts available standard whereby, as a matter of rule in this case,