UNITED STATES – TAX TREATMENT FOR

"FOREIGN SALES CORPORATIONS"

Recourse by the United States to Article 22.6 of the DSU

and Article 4.11 of the SCM Agreement

Constitution of the Arbitrator

Note by the Secretariat

1.         At the meeting of the Dispute Settlement Body on 28 November 2000, it was agreed that the matter raised by the United States in document WT/DS108/15 is referred to arbitration as required by Article 22.6 of the DSU and Article 4.11 of the SCM Agreement.

2.         Article 22.6 of the DSU provides as follows:

"When the situation described in paragraph 2 occurs, the DSB, upon request, shall grant authorization to suspend concessions or other obligations within 30 days of the expiry of the reasonable period of time unless the DSB decides by consensus to reject the request.  However, if the Member concerned objects to the level of suspension proposed, or claims that the principles and procedures set forth in paragraph 3 have not been followed where a complaining party has requested authorization to suspend concessions or other obligations pursuant to paragraph 3(b) or (c), the matter shall be referred to arbitration. Such arbitration shall be carried out by the original panel, if members are available, or by an arbitrator[1] appointed by the Director-General and shall be completed within 60 days after the date of expiry of the reasonable period of time.  Concessions or other obligations shall not be suspended during the course of the arbitration."