Japan – Countervailing Duties on Dynamic Random Access Memories from Korea (WT/DS336): Report of the Appellate Body

Summary

INTRODUCTION

Japan and Korea each appeals certain issues of law and legal interpretation developed in the Panel Report, Japan – Countervailing Duty Investigation on Dynamic Random Access Memories from Korea (the “Panel Report”). The Panel was established to consider a complaint by Korea concerning the imposition of countervailing duties by Japan on imports of dynamic random access memories (“DRAMs”) from Korea.

The countervailing duty investigation in this case was initiated by Japan on 4 August 2004, in response to an application submitted by Elpida Memory, Inc. (“Elpida”) and Micron Japan, Ltd. (“Micron”). The Korean company investigated was Hynix Semiconductor, Inc. (“Hynix”). Japan's investigating authorities (the “JIA”) sent questionnaires to a number of parties, including the Government of Korea (the “GOK”), Hynix, and certain Korean financial institutions. The period of investigation for determining the existence of subsidies was 1 January to 31 December 2003, while the period of investigation for determining injury was 1 April 2001 to 31 March 2004.

On 21 October 2005, the JIA informed the GOK and the parties involved in the proceeding of the essential facts under consideration (the “Essential Facts”), pursuant to Article 12.8 of the Agreement on Subsidies and Countervailing Measures (the “SCM Agreement”). In the Essential Facts, the JIA found that certain debt-restructuring programmes entered into by Hynix and its creditors (the “Restructurings”) in October 2001 and December 2002 were countervailable subsidies and calculated a countervailing duty rate of 27.2 per cent on imports of DRAMs from Korea, manufactured by Hynix.

The JIA provided the GOK and the parties involved in the proceedings with the opportunity to submit comments and rebuttals on the Essential Facts. In the JIA's final determination dated 20 January 2006 (the “Final Determination”), the JIA confirmed the findings set out in the Essential Facts. Annexed to the Final Determination were these Essential Facts (“JIA's Final Determination, Annex 1 (Essential Facts)”) and the JIA's response to the comments and rebuttals that had been submitted (“JIA's Final Determination, Annex 3 (Rebuttals and Surrebuttals)”).