WT/DS162/R/Add.1 Page 12
The United States argues that, although the panel report in United States - Non‑Rubber Footwear mentions the "executive authority", the panel's decision did not turn on which branch of government enforced the measure.39 In fact, the United States is not aware of any panel report having considered this question. Neither Japan nor the European Communities offer any reason why the mandatory/non‑mandatory distinction should not apply to measures which are enforced through the judicial branch. The European Communities argues that courts are charged with interpreting legislation, not with exercising discretion in respect of legislation. However, the EC does not address the fact that, in interpreting legislation, the court is applying the legislation just as the executive branch would had it been charged with the legislation's enforcement (putting aside the criminal provisions of the 1916 Act for which the executive branch is charged with enforcing).
Thus, for the United States, the question again becomes: is there room in the application of the law for the government authority to act in a WTO‑consistent manner? This is the fundamental test that has been applied in all cases considering the mandatory/discretionary distinction and there is no reason not to apply it when the judicial branch is charged with the application of a measure.40 Indeed, in applying the discretionary/mandatory distinction in United States ‑ Superfund, the panel found that legislation explicitly directing action inconsistent with GATT 1947 principles did not mandate inconsistent action so long as it provided the possibility for authorities to avoid such action.
The United States recalls that the European Communities attempts to distinguish the United States ‑ Tobacco case as involving domestic legislation that was "incomplete", (meaning that the agency had not yet promulgated its regulations). In that case, the panel considered whether a term in a statute could be interpreted by the relevant government authorities (which happen to be executive branch authorities) in a WTO‑consistent manner. Thus, the only distinction is again that executive branch authorities were involved instead of judicial branch authorities.
In the view of the United States, there is no reason not to apply the same principle in the present case. The focus in a mandatory/discretionary analysis should not be on which branch of government is applying the law, but whether there is room in the application of the law for the relevant government authorities to act in a WTO‑consistent manner. This is consistent with the presumption against conflicts between international and national laws. In the instant case, the United States has shown that, not only is there room for such an interpretation, as a matter of fact, the law has been so interpreted. Accordingly, the present Panel should find that the 1916 Act, as such, is WTO‑consistent.41
The United States also points out that there is a separate reason, solely applicable to the criminal context, for viewing the 1916 Act as non-mandatory legislation. The Department of
39 The United States notes that the panel mentions the executive authority in the context of explaining that legislation may be challenged as such (before actual application) if it mandates inconsistent action.
40 In response to an observation by Japan that in the present case the US Administration does not appear to possess the power to secure uniform, WTO‑consistent interpretation of the 1916 Act because the enforcement mechanism is up to US courts, the United States argues that the relevant question is not which branch of government is acting, but whether the law mandates a violation.
41 In response to a question of Japan regarding what measures are available for the US Administration to secure that all domestic laws be interpreted in line with international treaties in the US court system, the United States notes that in cases where the United States is itself a party to a civil or criminal litigation (acting through the Department of Justice), it has direct responsibility for ensuring that its own claims and actions comport with US laws and obligations, including international obligations, and for informing the court of such considerations. In addition, where appropriate, the Department of Justice can seek to intervene in a private civil litigation in order to protect a federal government interest. The Department of Justice does not routinely intervene in private civil litigation, however, and it remains a matter of judgment when and before which courts it should be done.