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WT/DS162/R/Add.1 Page 101

anywhere near a finding of liability under the 1916 Act - and only on a default basis, as a consequence of discovery problems the District Court concluded that the defendant would be liable only for sales at prices below its own average variable costs.343  Thus, as these cases establish, a showing that a defendant made sales at prices below average variable cost is required in order to establish 1916 Act liability, but is not required to establish primary line liability under the RobinsonPatman Act.344



Japan contends that the 1916 Act violates the United States' obligations under Article XI of the GATT 1994 because it establishes impermissible import "prohibitions or restrictions other than duties, taxes or other charges".345  


According to Japan, to establish a violation of Article XI, the complaining party must show (i) that the 1916 Act is an "other measure" maintained by the United States, (ii) that the measure makes "restrictions other than duties, taxes or other charges" effective, and (iii) that the measure is applied on the "importation" of products into the United States.  Each of these elements is demonstrated below.


Japan asserts, first, that the 1916 Act unquestionably is a measure within the meaning of Article XI of the GATT 1994.  It is a statute of the United States with binding effect.346  


Japan argues, second, that the 1916 Act imposes "restrictions other than duties, taxes or other charges", thereby making the restrictions effective.  Specifically, the 1916 Act provides for "a fine not exceeding $5,000, or imprisonment not exceeding one year, or both" as penalties.  In addition, a person injured by a violation may recover treble damages and the cost of the suit, including a reasonable attorney’s fee.  Obviously, "imprisonment not exceeding one year" is neither a tax, nor

343 The United States refers to Helmac II, Op. Cit., p. 583.  The United States notes that the European Communities "contests the importance given by the US to the Helmac II case."  For the United States, this position is somewhat surprising, inasmuch as requiring a showing of sales at prices below average variable cost in 1916 Act cases helps to ensure that the 1916 Act is more favourable to importers than the RobinsonPatman Act is to domestic firms.  In any event, the European Communities does not provide any support for this position other than the suggestion that  requiring a showing of sales at prices below average variable costs is not consistent with the court’s decision in Helmac I.

344 The United States notes that, as the European Communities indicates, in Helmac I the District Court indicated that the 1916 Act applies to offers to sell, as well as to consummated sales, while the RobinsonPatman Act applies to consummated sales.  Contrary to the view of the European Communities, however, that determination does not diminish the difficulty of establishing liability under the 1916 Act, relative to the RobinsonPatman Act.  Under the 1916 Act, the plaintiff still must show that the offers to sell were made "commonly and systematically," while as few as two sales may serve as a basis for liability under the RobinsonPatman Act.  

345 Article XI:1 states:

"No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licenses or other measures, shall be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party."

346 Japan refers to, e.g., Japan - Trade in Semi-conductors, adopted on 4 May 1988, BISD 35S/116, paras. 104-09 (hereinafter "Japan – Semi-conductors") (finding, according to Japan, that "measure" as used in Article XI is a broad word encompassing not only laws and regulations, but also certain "non-mandatory requests").

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