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Selected Customs Matters

Key Facts
Short Title: EC — Selected Customs Matters
Respondent: European Communities
Third Parties: Argentina; Brazil; China; Chinese Taipei; Hong Kong; Japan; Korea; India; Australia;
Complaintant(s): United States;
Dispute Number: DS315
Link to Dispute Site: http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds315_e.htm
Dispute Subject(s): Customs Matters;
Dispute Status: Concluded
Complaint by the United States.

On 21 September 2004, the United States requested consultations with the European Communities concerning the Communities' administration of laws and regulations pertaining to the classification and valuation of products for customs purposes and its failure to institute tribunals or procedures for the prompt review and correction of administrative action on customs matters.

According to the request for consultations from the United States, the non-uniform administration by the European Communities of laws, regulations, judicial decisions and administrative rulings pertaining to the classification and valuation of products for customs purposes and to requirements, restrictions or prohibitions on imports results in disparate administration among the member States of these customs measures in a number of respects, including differences in the classification and valuation of goods.

Furthermore, the United States claims that EC law provides that EC member States are responsible for the implementation of appeals procedures. It is claimed, therefore, that appeals procedures vary from member State to member State, and the ability to obtain review of a customs decision by a tribunal of the European Communities is possible only after an importer or other interested party has exhausted review by national administrative and/or judicial tribunals.

The United States considers the foregoing manner of administering the laws, regulations and related measures and the foregoing arrangement to be inconsistent with the EC's obligations under Articles X:1, X:3(a) and (b) of GATT 1994.

On 6 October 2004, Australia, Japan and Brazil requested to join the consultations. On 7 October 2004, Argentina, Chinese Taipei and India requested to join the consultations. On 13 January 2005, the United States requested the establishment of a panel. At its meeting on 25 January 2005, the DSB deferred the establishment of a panel. At its meeting on 21 March 2005, the DSB established the panel. Australia, Brazil, China and Chinese Taipei reserved their third party rights. On 22 March 2005, Hong Kong, China reserved its third party rights. On 24 March 2005, Korea reserved its third party rights. On 30 March 2005, Japan reserved its third party rights. On 31 March 2005, Argentina and India reserved their third party rights.

On 17 May 2005, the United States requested the Director-General to compose the panel. On 27 May 2005, the Director-General composed the panel.

On 24 November 2005, the Chairman of the Panel informed the DSB that it would not be possible for the Panel to complete its work in six months as the Panel was still considering the legal and factual matters raised in this dispute, and that the Panel hoped to complete its work by the end of March 2006.

On 16 June 2006, the Panel report was circulated to Members. The Panel found that:

* the European Communities had violated Article X:3(a) in three cases involving tariff classification and customs valuation;

* the European Communities had not violated Article X:3(a) in five cases in the areas of tariff classification, customs valuation and customs procedures; and

* the United States had not proved that the European Communities had violated Article X:3(a) in 11 cases in the areas of tariff classification, customs valuation and customs procedures.

The Panel also found that the European Communities had not acted inconsistently with the requirements of Article X:3(b) of the GATT 1994.

On 14 August 2006, the United States notified its intention to appeal certain issues of law and legal interpretations developed by the Panel. On 10 October 2006, the Chairman of the Appellate Body informed the DSB that it would not be able to circulate its report within the 60-day period due to the time required for completion and translation of the report. The Appellate Body expected to complete its work no later than 13 November 2006.

On 13 November 2006, the Appellate Body report was circulated to Members. The Appellate Body:

* reversed the Panel's findings that the "measure at issue" for purposes of a claim under Article X:3(a) of the GATT 1994 must necessarily be "the manner of administration that is allegedly non-uniform, partial and/or unreasonable" and found instead that the specific measures at issue identified in the panel request were the Community Customs Code, the Implementing Regulation, the Common Customs Tariff, and the TARIC, as administered collectively;

* reversed the Panel's finding that the United States was precluded from challenging the European Communities' system of customs administration as a whole or overall and the Panel's finding that it was precluded from considering the United States' argument that the "design and structure" of the European Communities' system of customs administration necessarily result in a violation of Article X:3(a) of the GATT 1994;

* upheld, albeit for different reasons, the Panel's interpretation that "the steps and acts of administration that pre-date or post-date the establishment of a panel may be relevant to determining whether or not a violation of Article X:3(a) of the GATT 1994 exists at the time of [panel] establishment";

* reversed the Panel's finding that, without exception, Article X:3(a) of the GATT 1994 always relates to the application of laws and regulations, but not to laws and regulations as such; but upheld the Panel's conclusions that substantive differences in penalty laws and audit procedures among the member States of the European Communities alone do not constitute a violation of Article X:3(a) of the GATT 1994;

* concluded that the Panel did not find that Article X:3(a) of the GATT 1994 requires uniformity of "administrative processes"; upheld the Panel's finding that the term "administer" in Article X:3(a) of the GATT 1994 may include administrative processes that put into effect the legal instruments of the kind described in Article X:1 of the GATT 1994; but reversed the Panel's finding that the administrative process leading to the tariff classification of blackout drapery lining amounts to non-uniform administration within the meaning of Article X:3(a) of the GATT 1994, and that the European Communities has violated Article X:3(a) of the GATT 1994 with respect to the tariff classification of blackout drapery lining;

* upheld the Panel's finding that "[t]he tariff classification of liquid crystal display monitors with digital video interface amounts to non-uniform administration within the meaning of Article X:3(a) of the GATT 1994";

* reversed the Panel's finding that "the European Communities does not administer its customs law concerning successive sales - in particular, Article 147(1) of the Implementing Regulation - in a uniform manner, in violation of Article X:3(a) of the GATT 1994"; and

* was unable to complete the analysis with respect to the United States' claim that the European Communities' system of customs administration as a whole or overall is not administered in a uniform manner, as required by Article X:3(a) of the GATT 1994;

* upheld the conclusion of the Panel that "Article X:3(b) of the GATT 1994 does not necessarily mean that the decisions of the judicial, arbitral or administrative tribunals or procedures for the review and correction of administrative action relating to customs matters must govern the practice of all the agencies entrusted with administrative enforcement throughout the territory of a particular [WTO] Member"; and

* with respect to Article XXIV:12 of the GATT 1994, found that the conditions on which the European Communities' appeal was predicated were not satisfied, and therefore did not consider it.

At its meeting on 11 December 2006, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report.

Panel Proceedings
Brief DateBrief Description
08/27/2010Summary of Vietnam’s First Written Submission
12/22/2005Answers of the United States of America to the Panel's Supplementary List of Questions Regarding Part III of the U.S. Second Oral Statement (pdf)
12/14/2005Comments of the United States on the Replies of the European Communities to the Questions of the Panel in Connection with the Second Substantive Meeting (pdf)
12/07/2005Answers of the United States to the Panel's Questions in Connection with the Second Substantive Meeting (pdf)
11/30/2005Executive Summary of the Closing Statement of the United States at the Second Meeting of the Panel (pdf)
11/30/2005Executive Summary of the Opening Statement of the United States at the Second Meeting of the Panel (pdf)
11/23/2005Closing Statement of the United States at the Second Meeting of the Panel (pdf)
11/22/2005Opening Statement of the United States at the Second Meeting of the Panel (pdf)
10/25/2005Executive Summary of the Second Written Submission of the United States (pdf)
10/18/2005Second Written Submission of the United States (pdf)
09/23/2005Answers of the United States to the European Communities' Questions in Connection with the First Substantive Meeting (pdf)
09/23/2005Answers of the United States to the Panel's Questions in Connection with the First Substantive Meeting (pdf)
09/14/2005Opening Statement of the United States at the First Panel Meeting (pdf)
07/19/2005Executive Summary of the First Written Submission of the United States (pdf)
07/12/2005First Written Submission of the United States (pdf)
Appeal Proceedings
Brief DateBrief Description
09/28/2006Opening Statement of the United States (pdf)
09/11/2006Appellee Submission of the United States (pdf)
08/21/2006Appellant Submission of the United States (pdf)