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Complainant
Respondent
PARTIES
European Communities
United States
AGREEMENTS
GATT Arts. I, II:1(a) and II:1(b)
DSU Arts. 3.7, 21.5 and 22
TIMELINE OF THE DISPUTE
Establishment of Panel
Circulation of Panel Report
16 June 1999
17 July 2000
Circulation of AB Report
Adoption
11 December 2000
10 January 2001
• Measure at issue: Increased bonding requirements imposed on 3 March 1999 before the issuance of the Art. 22.6
Arbitrator decision on the level of concessions to be suspended (6 April 1999), which was related to the alleged
European Communities' failure to implement EC – Bananas .
• Product at issue: Certain imports from the European Communities.
• GATT Art. I: The Panel found that the bonding requirements violated the most-favoured-nation principle of
Art. I as it only applied to imports from the European Communities.
• GATT Art. II: The Appellate Body reversed the Panel majority's finding that the bonding requirements violated
Art. II:1(a) and II:1(b), first sentence, because the Panel's finding was related to the later measure (100 per cent tariff duties) that the United States had imposed subsequent to the Art. 22.6 Arbitration's decision, which was outside the Panel's terms of reference in this case. The Panel also found that the interest charges, costs and fees in connection with the additional bonds requirements violated Art. II:1(b), second sentence, as the requirements resulted in increased costs.
• DSU Arts. 3.7, 22.6, 23.1 and 23.2(c): Having found that the bonding requirements, as a prima facie "suspension of concessions or other obligations" without prior DSB authorization, violated DSU Arts. 3.7, 22.6 and 23.2(c), the Panel concluded that the United States failed to follow the DSU rules and thus violated Art. 23.1 prohibiting unilateral determinations on the WTO-consistency of a measure. The Appellate Body upheld the Panel's finding of a DSU Art. 3.7 violation, as, if a Member violated Arts. 22.6 and 23.2(c), it also acted contrary to Art. 3.7.
• DSU Arts. 21.5 and 23.2(a): The Appellate Body upheld the Panel's finding that the United States violated
Art. 21.5 by imposing the bonding requirements, which constituted a unilateral determination of WTOinconsistency of the EC's implementing measure in relation to the EC – Bananas case. However, the Appellate
Body reversed the Panel's finding on the violation of Art. 23.2(a), as the European Communities had neither specifically claimed nor provided evidence or arguments in support of the measure's inconsistency with
Art. 23.2(a) and, thus, failed to establish a prima facie case of violation of Art. 23.2(a).
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• Expired measure and panel recommendation: The Appellate Body found that the Panel erred in recommending that a measure, which it had found no longer existed, be brought into conformity.
1 United States – Import Measures on Certain Products from the European Communities
2 Other issues addressed in this case: terms of reference (measure at issue); adequacy of panel request (DSU Art. 6.2, Art. 23 claims); determination of WTO-consistency of a measure (Arts. 21.5, 22.6); DSB authorization to suspend concessions and its effects; claim on violations of the DSU and DSB meeting rules; separate opinion by a panellist.
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