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Word Format - US - FSC, Article 215 II (AB)

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Word Format - US - FSC, Article 215 II (AB)

    WORLD TRADE WT/DS108/AB/RW2

    13 February 2006 ORGANIZATION

    (06-0580)

     Original: English

    UNITED STATES TAX TREATMENT FOR

    "FOREIGN SALES CORPORATIONS"

    SECOND RECOURSE TO ARTICLE 21.5 OF THE DSU

    BY THE EUROPEAN COMMUNITIES

    AB-2005-9

    Report of the Appellate Body

     WT/DS108/AB/RW2

     Page i

I. Introduction ........................................................................................................................... 1

    II. Arguments of the Participants and the Third Participants ........................................................ 6

    A. Claims of Error by the United States Appellant ....................................................... 6

    1. Panel's Terms of Reference ........................................................................... 6

    2. Article 4.7 of the SCM Agreement and Article 21.5 of the DSU ..................... 8

    B. Arguments of the European Communities Appellee ............................................... 10

    1. Panel's Terms of Reference ......................................................................... 10

    2. Article 4.7 of the SCM Agreement and Article 21.5 of the DSU ................. 12

    C. Claims of Error by the European Communities Other Appellant ........................... 14

    D. Arguments of the United States Appellee ............................................................... 15

    E. Arguments of the Third Participants ........................................................................ 17

    1. Australia ..................................................................................................... 17

    2. Brazil .......................................................................................................... 18 III. Issues Raised in This Appeal ................................................................................................ 19

    IV. Panel's Terms of Reference .................................................................................................. 19

    V. Article 4.7 of the SCM Agreement and Article 21.5 of the DSU .......................................... 25

    VI. European Communities' Conditional Appeals ....................................................................... 34 VII. Findings and Conclusions .................................................................................................... 35

ANNEX I Notification of an Appeal by the United States

ANNEX II Notification of an Other Appeal by the European Communities

ANNEX III Request for the Establishment of a Panel by the European Communities

WT/DS108/AB/RW2

    Page ii

    CASES CITED IN THIS REPORT

Brazil Aircraft Appellate Body Report, Brazil Export Financing Programme for Aircraft

    (Article 21.5 Canada) Recourse by Canada to Article 21.5 of the DSU, WT/DS46/AB/RW, adopted 4

    August 2000, DSR 2000:VIII, 4067

    Canada Aircraft Appellate Body Report, Canada Measures Affecting the Export of Civilian (Article 21.5 Brazil) Aircraft Recourse by Brazil to Article 21.5 of the DSU, WT/DS70/AB/RW,

    adopted 4 August 2000, DSR 2000:IX, 4299

    EC Bananas III Appellate Body Report, European Communities Scheme for the Importation,

    Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997,

    DSR 1997:II, 591

    EC Bed Linen Appellate Body Report, European Communities Anti-Dumping Duties on (Article 21.5 India) 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, 965

    Mexico Corn Syrup Appellate Body Report, Mexico Anti-Dumping Investigation of High Fructose (Article 21.5 US) 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, 6675

    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, 3779

     US FSC Appellate Body Report, United States Tax Treatment for "Foreign Sales

    Corporations", WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, 1619

     US FSC Panel Report, United States Tax Treatment for "Foreign Sales Corporations",

    WT/DS108/R, adopted 20 March 2000, as modified by Appellate Body Report,

    WT/DS108/AB/R, DSR 2000:IV, 1675

    US FSC Appellate Body Report, United States Tax Treatment for "Foreign Sales (Article 21.5 EC) Corporations" Recourse to Article 21.5 of the DSU by the European

    Communities, WT/DS108/AB/RW, adopted 29 January 2002, DSR 2002:I, 55

    US FSC Panel Report, United States Tax Treatment for "Foreign Sales Corporations" (Article 21.5 EC) Recourse to Article 21.5 of the DSU by the European Communities,

    WT/DS108/RW, adopted 29 January 2002, as modified by Appellate Body

    Report, WT/DS108/AB/RW, DSR 2002:I, 119

    US FSC Panel Report, United States Tax Treatment for "Foreign Sales Corporations"

    (Article 21.5 EC II) Second Recourse to Article 21.5 of the DSU by the European Communities,

    WT/DS108/RW2, 30 September 2005

    US FSC Decision by the Arbitrator, United States Tax Treatment for "Foreign Sales (Article 22.6 US) Corporations" Recourse to Arbitration by the United States under Article 22.6

    of the DSU and Article