WT/DS162/R/Add.1 Page 125
For the reasons set out above, the European Communities supports Japan's claims that the 1916 Act is neither consistent with nor justified by any of the WTO provisions mentioned above.
1. Violation of Article VI of the GATT 1994 and the Anti‑Dumping Agreement
According to India, Article VI of the GATT 1994 establishes the only GATT-compatible means of dealing with dumping. Three steps are envisaged in this Article. Firstly, what constitutes dumping; secondly, what conditions must be fulfilled for the application of remedial measures; and thirdly, what steps a Member can take once dumping has been established. As regards this third step, Article VI:2 provides for the levying of anti‑dumping duties. It is therefore clear that under Article VI the concerned Members can levy anti‑dumping duties provided that the material injury to the domestic industry is established and the procedures as laid down are followed. Hence Article VI clearly establishes that the application of anti‑dumping duties shall be the sole and only means authorized by the GATT 1994 to deal with the problem of dumped imports.
India notes, however, that, under the 1916 Act, the United States can apply measures other than anti‑dumping duties – for example, civil liability for damages and/or criminal penalties.397 Thus the very purpose and intent of Article VI and that of the Anti‑Dumping Agreement is thwarted. The remedial measures provided for by the 1916 Act are treble damages and/or criminal penalties, including fines and/or imprisonment. These remedies are not duties and do not therefore fall into the type of measures allowed under the multilateral anti‑dumping rules to counter dumping practices.
India recalls that the United States has tried to justify these 1916 Act remedies under footnote 24 of Article 18.1 of the Anti‑Dumping Agreement. The footnote provides: "This is not intended to preclude action under other relevant provisions of GATT 1994, as appropriate." But the United States has failed to cite any GATT 1994 provision under which the 1916 Act remedies could be justified. It has merely stated that the 1916 Act "measure is a fortiori consistent with the GATT 1994", if it is not regulated by the GATT 1994. It may be noted that a footnote cannot override the main provision. The provision in this case, Article 18.1, is so worded that the Members cannot take any "specific action […] except in accordance with the provisions of GATT 1994 […]". Thus the US argument that the GATT 1994 does not regulate the measure is not correct. The GATT 1994 in fact prohibits any measure (including the measures under the 1916 Act) other than the anti‑dumping duty, unless it is in accordance with the GATT 1994 and the Anti‑Dumping Agreement.
India notes that the United States has also argued that the use of the phrase "may" levy an anti‑dumping duty in Article VI:2 does not preclude the use of other remedies for dumping. This argument is not valid. Article VI of the GATT 1994 was specifically incorporated to address the problems of dumping and provides for the levying of anti‑dumping duties as the sole remedy. It would be totally unacceptable if Members could not only impose anti‑dumping duties, but also such other civil or criminal penalties as are prescribed by the 1916 Act. The word "may" in Article VI:2 endows the Members with discretionary authority whether or not to invoke the remedial action in case of dumping. However, if the Member concerned decides to take action, it must be by way of imposing anti‑dumping duties only. Clearly therefore, the 1916 Act violates Article VI:2 of the GATT 1994 as well as Article 18.1 of the Anti‑Dumping Agreement.
397 India notes, in this regard, that the 1916 Act can be invoked and has been invoked over the years by complaining parties desirous of using the judicial remedies offered by it as an alternative and/or supplement to the Antidumping Act of 1921 and later US anti‑dumping legislation.