Page353
ANNEX 2
UNDERSTANDING ONRULES AND PROCEDURES
GOVERNING THE SETTLEMENT OFDISPUTES
Members hereby agree asfollows:
Article 1
Coverage andApplication
1. Therules andprocedures ofthisUnderstanding shallapply todisputes brought pursuant to
theconsultation anddispute settlement provisions oftheagreements listed inAppendix 1tothis
Understanding(referredtointhisUnderstandingasthe"coveredagreements").Therulesandprocedures
ofthisUnderstanding shallalsoapply toconsultations andthesettlement ofdisputes between Members
concerning theirrights andobligations under theprovisions oftheAgreement Establishing theWorld
Trade Organization (referred tointhisUnderstanding asthe"WTO Agreement") andofthis
Understanding taken inisolation orincombination withanyother covered agreement.
2. Therulesandprocedures ofthisUnderstanding shallapply subject tosuchspecial oradditional
rules andprocedures ondispute settlement contained inthecovered agreements asareidentified in
Appendix 2tothisUnderstanding. Totheextent thatthere isadifference between therules and
procedures ofthisUnderstanding andthespecial oradditional rules andprocedures setforth in
Appendix 2,thespecial oradditional rules andprocedures inAppendix 2shallprevail. Indisputes
involving rulesandprocedures under more thanonecovered agreement, ifthere isaconflict between
special oradditional rulesandprocedures ofsuchagreements under review, andwhere theparties to
thedispute cannot agree onrulesandprocedures within 20daysoftheestablishment ofthepanel, the
Chairman oftheDispute Settlement Body provided forinparagraph 1ofArticle 2(referred tointhis
Understanding asthe"DSB"), inconsultation withtheparties tothedispute, shalldetermine therules
andprocedures tobefollowed within 10daysafterarequest byeither Member. TheChairman shall
beguided bytheprinciple thatspecial oradditional rulesandprocedures should beusedwhere possible,
andtherules andprocedures setoutinthisUnderstanding should beusedtotheextent necessary to
avoid conflict.
Article 2
Administration
1. TheDispute Settlement Body ishereby established toadminister these rules andprocedures
and,except asotherwise provided inacovered agreement, theconsultation anddispute settlement
provisions ofthecovered agreements. Accordingly, theDSBshallhavetheauthority toestablish panels,
adopt panel andAppellate Body reports, maintain surveillance ofimplementation ofrulings and
recommendations, andauthorize suspension ofconcessions andother obligations under thecovered
agreements. Withrespect todisputes arising under acovered agreement which isaPlurilateral Trade
Agreement, theterm"Member" asusedherein shallreferonlytothose Members thatareparties to
therelevant Plurilateral Trade Agreement. Where theDSBadministers thedispute settlement provisions
ofaPlurilateralTradeAgreement,onlythoseMembersthatarepartiestothatAgreementmayparticipate
indecisions oractions taken bytheDSBwithrespect tothatdispute.Page354
2. TheDSBshallinform therelevant WTO Councils andCommittees ofanydevelopments in
disputes related toprovisions oftherespective covered agreements.
3. TheDSBshallmeet asoften asnecessary tocarry outitsfunctions within thetime-frames
provided inthisUnderstanding.
4. Where therulesandprocedures ofthisUnderstanding provide fortheDSBtotakeadecision,
itshalldosobyconsensus.1
Article 3
General Provisions
1. Members affirm theiradherence totheprinciples forthemanagement ofdisputes heretofore
appliedunderArticlesXXIIandXXIIIofGATT1947,andtherulesandproceduresasfurtherelaborated
andmodified herein.
2. Thedispute settlement system oftheWTO isacentral element inproviding security and
predictability tothemultilateral trading system. TheMembers recognize thatitserves topreserve
therightsandobligationsofMembersunderthecoveredagreements,andtoclarifytheexistingprovisions
ofthose agreements inaccordance withcustomary rulesofinterpretation ofpublic international law.
Recommendations andrulings oftheDSBcannot addtoordiminish therights andobligations provided
inthecovered agreements.
3. Theprompt settlement ofsituations inwhich aMember considers thatanybenefits accruing
toitdirectly orindirectly under thecovered agreements arebeing impaired bymeasures taken byanother
Member isessential totheeffective functioning oftheWTO andthemaintenance ofaproper balance
between therights andobligations ofMembers.
4. Recommendations orrulings made bytheDSB shall beaimed atachieving asatisfactory
settlement ofthematter inaccordance withtherights andobligations under thisUnderstanding and
under thecovered agreements.
5. Allsolutions tomatters formally raised under theconsultation anddispute settlement provisions
ofthecovered agreements, including arbitration awards, shallbeconsistent withthose agreements
andshallnotnullify orimpair benefits accruing toanyMember under those agreements, norimpede
theattainment ofanyobjective ofthose agreements.
6. Mutuallyagreedsolutionstomattersformallyraisedundertheconsultationanddisputesettlement
provisions ofthecovered agreements shall benotified totheDSB andtherelevant Councils and
Committees, where anyMember mayraiseanypoint relating thereto.
7. Before bringing acase,aMember shallexercise itsjudgement astowhether action under these
procedures would befruitful. Theaimofthedispute settlement mechanism istosecure apositive
solution toadispute. Asolution mutually acceptable totheparties toadispute andconsistent with
thecovered agreements isclearly tobepreferred. Intheabsence ofamutually agreed solution, the
firstobjective ofthedispute settlement mechanism isusually tosecure thewithdrawal ofthemeasures
concerned ifthese arefound tobeinconsistent withtheprovisions ofanyofthecovered agreements.
Theprovision ofcompensation should beresorted toonlyiftheimmediate withdrawal ofthemeasure
1TheDSB shall bedeemed tohave decided byconsensus onamatter submitted foritsconsideration, ifnoMember,
present atthemeeting oftheDSB when thedecision istaken, formally objects totheproposed decision.Page355
isimpracticableandasatemporarymeasurependingthewithdrawalofthemeasurewhichisinconsistent
withacovered agreement. Thelastresort which thisUnderstanding provides totheMember invoking
thedispute settlement procedures isthepossibility ofsuspending theapplication ofconcessions orother
obligations under thecovered agreements onadiscriminatory basisvis-à-vis theotherMember, subject
toauthorization bytheDSBofsuchmeasures.
8. Incases where thereisaninfringement oftheobligations assumed under acovered agreement,
theaction isconsidered prima facietoconstitute acaseofnullification orimpairment. Thismeans
thatthereisnormally apresumption thatabreach oftheruleshasanadverse impact onother Members
parties tothatcovered agreement, andinsuchcases, itshallbeuptotheMember against whom the
complaint hasbeenbrought torebut thecharge.
9. Theprovisions ofthisUnderstanding arewithout prejudice totherights ofMembers toseek
authoritative interpretation ofprovisions ofacovered agreement through decision-making under the
WTO Agreement oracovered agreement which isaPlurilateral Trade Agreement.
10. Itisunderstood thatrequests forconciliation andtheuseofthedispute settlement procedures
should notbeintended orconsidered ascontentious actsandthat,ifadispute arises, allMembers will
engage inthese procedures ingoodfaithinaneffort toresolve thedispute. Itisalsounderstood that
complaints andcounter-complaints inregard todistinct matters should notbelinked.
11. ThisUnderstanding shallbeapplied onlywithrespect tonewrequests forconsultations under
theconsultation provisions ofthecovered agreements made onorafterthedateofentry intoforce
oftheWTO Agreement. With respect todisputes forwhich therequest forconsultations wasmade
under GATT 1947 orunder anyother predecessor agreement tothecovered agreements before the
dateofentry intoforce oftheWTO Agreement, therelevant dispute settlement rulesandprocedures
ineffect immediately prior tothedateofentry intoforce oftheWTO Agreement shallcontinue to
apply.2
12. Notwithstanding paragraph 11,ifacomplaint based onanyofthecovered agreements isbrought
byadeveloping country Member against adeveloped country Member, thecomplaining party shall
havetheright toinvoke, asanalternative totheprovisions contained inArticles 4,5,6and12of
thisUnderstanding, thecorresponding provisions oftheDecision of5April 1966(BISD 14S/18), except
thatwhere thePanel considers thatthetime-frame provided forinparagraph 7ofthatDecision is
insufficient toprovide itsreport andwiththeagreement ofthecomplaining party, thattime-frame may
beextended. Totheextent thatthere isadifference between therules andprocedures ofArticles 4,
5,6and12andthecorresponding rules andprocedures oftheDecision, thelatter shallprevail.
Article 4
Consultations
1. Members affirm theirresolve tostrengthen andimprove theeffectiveness oftheconsultation
procedures employed byMembers.
2Thisparagraph shallalsobeapplied todisputes onwhich panel reports have notbeen adopted orfullyimplemented.Page356
2. EachMemberundertakestoaccordsympatheticconsiderationtoandaffordadequateopportunity
forconsultation regarding anyrepresentations made byanother Member concerning measures affecting
theoperation ofanycovered agreement taken within theterritory oftheformer.3
3. Ifarequest forconsultations ismade pursuant toacovered agreement, theMember towhich
therequest ismade shall, unless otherwise mutually agreed, reply totherequest within 10daysafter
thedateofitsreceipt andshallenter intoconsultations ingood faithwithin aperiod ofnomore than
30daysafterthedateofreceipt oftherequest, withaviewtoreaching amutually satisfactory solution.
IftheMember doesnotrespond within 10daysafterthedateofreceipt oftherequest, ordoesnot
enterintoconsultations within aperiod ofnomorethan30days, oraperiod otherwise mutually agreed,
afterthedateofreceipt oftherequest, thentheMember thatrequested theholding ofconsultations
mayproceed directly torequest theestablishment ofapanel.
4. Allsuchrequests forconsultations shallbenotified totheDSBandtherelevant Councils and
Committees bytheMember which requests consultations. Anyrequest forconsultations shall be
submitted inwriting andshallgivethereasons fortherequest, including identification ofthemeasures
atissue andanindication ofthelegalbasis forthecomplaint.
5. Inthecourse ofconsultations inaccordance withtheprovisions ofacovered agreement, before
resorting tofurther action under thisUnderstanding, Members should attempt toobtain satisfactory
adjustment ofthematter.
6. Consultations shallbeconfidential, andwithout prejudice totherights ofanyMember inany
further proceedings.
7. Iftheconsultations failtosettle adispute within 60daysafterthedateofreceipt oftherequest
forconsultations, thecomplaining party mayrequest theestablishment ofapanel. Thecomplaining
party mayrequest apanel during the60-day period iftheconsulting parties jointly consider that
consultations havefailed tosettle thedispute.
8. Incases ofurgency, including those which concern perishable goods, Members shallenter
intoconsultations within aperiod ofnomore than10daysafterthedateofreceipt oftherequest.
Iftheconsultations havefailed tosettle thedispute within aperiod of20daysafterthedateofreceipt
oftherequest, thecomplaining party mayrequest theestablishment ofapanel.
9. Incases ofurgency, including those which concern perishable goods, theparties tothedispute,
panels andtheAppellate Body shallmake every effort toaccelerate theproceedings tothegreatest
extent possible.
10. During consultations Members should givespecial attention totheparticular problems and
interests ofdeveloping country Members.
11. Whenever aMember other thantheconsulting Members considers thatithasasubstantial trade
interest inconsultations being heldpursuant toparagraph 1ofArticle XXIIofGATT 1994, paragraph 1
ofArticle XXII ofGATS, orthecorresponding provisions inother covered agreements4,suchMember
3Where theprovisions ofanyother covered agreement concerning measures taken byregional orlocalgovernments or
authorities within theterritory ofaMember contain provisions different from theprovisions ofthisparagraph, theprovisions
ofsuch other covered agreement shall prevail.
4Thecorresponding consultation provisions inthecovered agreements arelisted hereunder: Agreement onAgriculture,
Article 19;Agreement ontheApplication ofSanitary andPhytosanitary Measures, paragraph 1ofArticle 11;Agreement
onTextiles andClothing, paragraph 4ofArticle 8;Agreement onTechnical Barriers toTrade, paragraph 1ofArticle 14;Page357
maynotify theconsulting Members andtheDSB, within 10daysafterthedateofthecirculation of
therequest forconsultations under saidArticle, ofitsdesire tobejoined intheconsultations. Such
Member shall bejoined intheconsultations, provided thattheMember towhich therequest for
consultations wasaddressed agrees thattheclaim ofsubstantial interest iswell-founded. Inthatevent
theyshallsoinform theDSB. Iftherequest tobejoined intheconsultations isnotaccepted, the
applicantMembershallbefreetorequestconsultationsunderparagraph1ofArticleXXIIorparagraph1
ofArticle XXIII ofGATT 1994, paragraph 1ofArticle XXII orparagraph 1ofArticle XXIII ofGATS,
orthecorresponding provisions inother covered agreements.
Article 5
Good Offices, Conciliation andMediation
1. Good offices, conciliation andmediation areprocedures thatareundertaken voluntarily ifthe
parties tothedispute soagree.
2. Proceedings involving goodoffices, conciliation andmediation, andinparticular positions taken
bytheparties tothedispute during these proceedings, shallbeconfidential, andwithout prejudice to
therights ofeither party inanyfurther proceedings under these procedures.
3. Good offices, conciliation ormediation mayberequested atanytimebyanyparty toadispute.
They maybegin atanytimeandbeterminated atanytime. Once procedures forgood offices,
conciliation ormediation areterminated, acomplaining party maythenproceed witharequest for
theestablishment ofapanel.
4. When good offices, conciliation ormediation areentered intowithin 60daysafterthedate
ofreceipt ofarequest forconsultations, thecomplaining party mustallow aperiod of60daysafter
thedateofreceipt oftherequest forconsultations before requesting theestablishment ofapanel. The
complaining party mayrequest theestablishment ofapanel during the60-day period iftheparties to
thedispute jointly consider thatthegoodoffices, conciliation ormediation process hasfailed tosettle
thedispute.
5. Iftheparties toadispute agree, procedures forgood offices, conciliation ormediation may
continue while thepanel process proceeds.
6. TheDirector-General may, acting inanexofficio capacity, offer good offices, conciliation
ormediation withtheviewtoassisting Members tosettle adispute.
Agreement onTrade-Related Investment Measures, Article 8;Agreement onImplementation ofArticle VIofGATT 1994,
paragraph 2ofArticle 17;Agreement onImplementation ofArticle VIIofGATT 1994, paragraph 2ofArticle 19;Agreement
onPreshipment Inspection, Article 7;Agreement onRules ofOrigin, Article 7;Agreement onImport Licensing Procedures,
Article6;AgreementonSubsidiesandCountervailingMeasures,Article30;AgreementonSafeguards,Article14;Agreement
onTrade-Related Aspects ofIntellectual Property Rights, Article 64.1; andanycorresponding consultation provisions in
Plurilateral Trade Agreements asdetermined bythecompetent bodies ofeach Agreement andasnotified totheDSB.Page358
Article 6
Establishment ofPanels
1. Ifthecomplaining partysorequests, apanel shallbeestablished atthelatest attheDSBmeeting
following thatatwhich therequest firstappears asanitemontheDSB'sagenda, unless atthatmeeting
theDSBdecides byconsensus nottoestablish apanel.5
2. Therequest fortheestablishment ofapanel shallbemade inwriting. Itshallindicate whether
consultations were held, identify thespecific measures atissue andprovide abriefsummary ofthe
legalbasis ofthecomplaint sufficient topresent theproblem clearly. Incasetheapplicant requests
theestablishment ofapanel withotherthanstandard terms ofreference, thewritten request shallinclude
theproposed textofspecial terms ofreference.
Article 7
Terms ofReference ofPanels
1. Panelsshallhavethefollowingtermsofreferenceunlessthepartiestothedisputeagreeotherwise
within 20daysfrom theestablishment ofthepanel:
"Toexamine,inthelightoftherelevantprovisionsin(nameofthecoveredagreement(s)
cited bytheparties tothedispute), thematter referred totheDSB by(name ofparty) in
document ...andtomake suchfindings aswillassist theDSBinmaking therecommendations
oringiving therulings provided forinthat/those agreement(s)."
2. Panels shalladdress therelevant provisions inanycovered agreement oragreements citedby
theparties tothedispute.
3. Inestablishing apanel, theDSBmayauthorize itsChairman todrawuptheterms ofreference
ofthepanel inconsultation withtheparties tothedispute, subject totheprovisions ofparagraph 1.
Theterms ofreference thusdrawn upshallbecirculated toallMembers. Ifother thanstandard terms
ofreference areagreed upon, anyMember mayraiseanypoint relating thereto intheDSB.
Article 8
Composition ofPanels
1. Panels shallbecomposed ofwell-qualified governmental and/or non-governmental individuals,
including persons whohaveserved onorpresented acasetoapanel, served asarepresentative of
aMember orofacontracting party toGATT 1947orasarepresentative totheCouncil orCommittee
ofanycovered agreement oritspredecessor agreement, orintheSecretariat, taught orpublished on
international trade laworpolicy, orserved asasenior trade policy official ofaMember.
2. Panel members should beselected withaviewtoensuring theindependence ofthemembers,
asufficiently diverse background andawidespectrum ofexperience.
5Ifthecomplaining party sorequests, ameeting oftheDSB shall beconvened forthispurpose within 15daysofthe
request, provided thatatleast10days'advance notice ofthemeeting isgiven.Page359
3. Citizens ofMembers whose governments6areparties tothedispute orthirdparties asdefined
inparagraph 2ofArticle 10shallnotserve onapanel concerned withthatdispute, unless theparties
tothedispute agree otherwise.
4. Toassist intheselection ofpanelists, theSecretariat shall maintain anindicative listof
governmental andnon-governmental individuals possessing thequalifications outlined inparagraph
1,from which panelists maybedrawn asappropriate. Thatlistshall include theroster ofnon-
governmental panelists established on30November 1984(BISD 31S/9), andotherrosters andindicative
listsestablished under anyofthecovered agreements, andshallretain thenames ofpersons onthose
rosters andindicative listsatthetimeofentry intoforce oftheWTO Agreement. Members may
periodically suggest names ofgovernmental andnon-governmental individuals forinclusion onthe
indicative list,providing relevant information ontheirknowledge ofinternational tradeandofthesectors
orsubject matter ofthecovered agreements, andthose names shallbeadded tothelistuponapproval
bytheDSB. Foreachoftheindividuals onthelist,thelistshallindicate specific areas ofexperience
orexpertise oftheindividuals inthesectors orsubject matter ofthecovered agreements.
5. Panels shallbecomposed ofthreepanelists unless theparties tothedispute agree, within 10days
fromtheestablishment ofthepanel, toapanel composed offivepanelists. Members shallbeinformed
promptly ofthecomposition ofthepanel.
6. TheSecretariat shallpropose nominations forthepanel totheparties tothedispute. Theparties
tothedispute shallnotoppose nominations except forcompelling reasons.
7. Ifthere isnoagreement onthepanelists within 20daysafterthedateoftheestablishment of
apanel, attherequest ofeither party, theDirector-General, inconsultation withtheChairman ofthe
DSBandtheChairman oftherelevant Council orCommittee, shalldetermine thecomposition ofthe
panel byappointing thepanelists whom theDirector-General considers mostappropriate inaccordance
withanyrelevant special oradditional rules orprocedures ofthecovered agreement orcovered
agreements which areatissue inthedispute, afterconsulting withtheparties tothedispute. The
Chairman oftheDSBshallinform theMembers ofthecomposition ofthepanel thusformed nolater
than10daysafterthedatetheChairman receives sucharequest.
8. Members shallundertake, asageneral rule,topermit theirofficials toserve aspanelists.
9. Panelists shallserve intheirindividual capacities andnotasgovernment representatives, nor
asrepresentatives ofanyorganization. Members shalltherefore notgivethem instructions norseek
toinfluence them asindividuals withregard tomatters before apanel.
10. When adispute isbetween adeveloping country Member andadeveloped country Member
thepanel shall, ifthedeveloping country Member sorequests, include atleastonepanelist from a
developing country Member.
11. Panelists 'expenses, including travel andsubsistence allowance, shallbemetfromtheWTO
budget inaccordance withcriteria tobeadopted bytheGeneral Council, based onrecommendations
oftheCommittee onBudget, Finance andAdministration.
6Inthecasewhere customs unions orcommon markets areparties toadispute, thisprovision applies tocitizens ofall
member countries ofthecustoms unions orcommon markets.Page360
Article 9
Procedures forMultiple Complainants
1. Where more thanoneMember requests theestablishment ofapanel related tothesamematter,
asingle panel maybeestablished toexamine these complaints taking intoaccount therights ofall
Membersconcerned.Asinglepanelshouldbeestablishedtoexaminesuchcomplaintswheneverfeasible.
2. Thesingle panel shallorganize itsexamination andpresent itsfindings totheDSBinsuch
amannerthattherightswhichthepartiestothedisputewouldhaveenjoyedhadseparatepanelsexamined
thecomplaints areinnowayimpaired. Ifoneoftheparties tothedispute sorequests, thepanel shall
submit separate reports onthedispute concerned. Thewritten submissions byeachofthecomplainants
shallbemade available totheothercomplainants, andeachcomplainant shallhavetherighttobepresent
when anyoneoftheother complainants presents itsviews tothepanel.
3. Ifmore thanonepanel isestablished toexamine thecomplaints related tothesame matter,
tothegreatest extent possible thesame persons shallserve aspanelists oneachoftheseparate panels
andthetimetable forthepanel process insuchdisputes shallbeharmonized.
Article 10
Third Parties
1. Theinterests oftheparties toadispute andthose ofother Members under acovered agreement
atissue inthedispute shallbefullytaken intoaccount during thepanel process.
2. AnyMember having asubstantial interest inamatter before apanel andhaving notified its
interest totheDSB(referred tointhisUnderstanding asa"third party") shallhaveanopportunity
tobeheard bythepanel andtomake written submissions tothepanel. These submissions shallalso
begiven totheparties tothedispute andshallbereflected inthepanel report.
3. Third parties shallreceive thesubmissions oftheparties tothedispute tothefirstmeeting of
thepanel.
4. Ifathird party considers thatameasure already thesubject ofapanel proceeding nullifies
orimpairs benefits accruing toitunder anycovered agreement, thatMember mayhaverecourse to
normal dispute settlement procedures under thisUnderstanding. Such adispute shallbereferred to
theoriginal panel wherever possible.
Article 11
Function ofPanels
Thefunction ofpanels istoassist theDSB indischarging itsresponsibilities under this
Understanding andthecovered agreements. Accordingly, apanel should make anobjective assessment
ofthematter before it,including anobjective assessment ofthefactsofthecaseandtheapplicability
ofandconformity withtherelevant covered agreements, andmake suchother findings aswillassist
theDSBinmaking therecommendations oringiving therulings provided forinthecovered agreements.
Panels should consult regularly withtheparties tothedispute andgivethem adequate opportunity to
develop amutually satisfactory solution.Page361
Article 12
Panel Procedures
1. Panels shallfollow theWorking Procedures inAppendix 3unless thepanel decides otherwise
afterconsulting theparties tothedispute.
2. Panel procedures should provide sufficient flexibility soastoensure high-quality panel reports,
while notunduly delaying thepanel process.
3. Afterconsultingthepartiestothedispute,thepanelistsshall,assoonaspracticableandwhenever
possible within oneweek afterthecomposition andterms ofreference ofthepanel havebeenagreed
upon, fixthetimetable forthepanel process, taking intoaccount theprovisions ofparagraph 9of
Article 4,ifrelevant.
4. Indetermining thetimetable forthepanel process, thepanel shallprovide sufficient timefor
theparties tothedispute toprepare theirsubmissions.
5. Panels should setprecise deadlines forwritten submissions bytheparties andtheparties should
respect those deadlines.
6. Eachpartytothedispute shalldeposit itswritten submissions withtheSecretariat forimmediate
transmission tothepanel andtotheother party orparties tothedispute. Thecomplaining party shall
submit itsfirstsubmission inadvance oftheresponding party'sfirstsubmission unless thepanel decides,
infixing thetimetable referred toinparagraph 3andafterconsultations withtheparties tothedispute,
thattheparties should submit their firstsubmissions simultaneously. When there aresequential
arrangements forthedeposit offirstsubmissions, thepanel shallestablish afirmtime-period forreceipt
oftheresponding party'ssubmission. Anysubsequent written submissions shall besubmitted
simultaneously.
7. Where theparties tothedispute havefailed todevelop amutually satisfactory solution, the
panel shallsubmit itsfindings intheform ofawritten report totheDSB. Insuchcases, thereport
ofapanel shallsetoutthefindings offact,theapplicability ofrelevant provisions andthebasicrationale
behind anyfindings andrecommendations thatitmakes. Where asettlement ofthematter among the
parties tothedispute hasbeenfound, thereport ofthepanel shallbeconfined toabriefdescription
ofthecaseandtoreporting thatasolution hasbeenreached.
8. Inorder tomake theprocedures more efficient, theperiod inwhich thepanel shallconduct
itsexamination, fromthedatethatthecomposition andterms ofreference ofthepanel havebeenagreed
upon untilthedatethefinalreport isissued totheparties tothedispute, shall, asageneral rule,not
exceed sixmonths. Incases ofurgency, including those relating toperishable goods, thepanel shall
aimtoissue itsreport totheparties tothedispute within three months.
9. When thepanel considers thatitcannot issueitsreport within sixmonths, orwithin threemonths
incases ofurgency, itshallinform theDSBinwriting ofthereasons forthedelay together withan
estimate oftheperiod within which itwillissue itsreport. Innocaseshould theperiod from the
establishment ofthepanel tothecirculation ofthereport totheMembers exceed ninemonths.
10. Inthecontext ofconsultations involving ameasure taken byadeveloping country Member,
theparties mayagree toextend theperiods established inparagraphs 7and8ofArticle 4.If,after
therelevant period haselapsed, theconsulting parties cannot agree thattheconsultations haveconcluded,
theChairman oftheDSBshalldecide, afterconsultation withtheparties, whether toextend therelevant
period and,ifso,forhowlong. Inaddition, inexamining acomplaint against adeveloping countryPage362
Member,thepanelshallaccordsufficienttimeforthedevelopingcountryMembertoprepareandpresent
itsargumentation. Theprovisions ofparagraph 1ofArticle 20andparagraph 4ofArticle 21arenot
affected byanyaction pursuant tothisparagraph.
11. Where oneormore oftheparties isadeveloping country Member, thepanel'sreport shall
explicitly indicate theforminwhich account hasbeentaken ofrelevant provisions ondifferential and
more-favourable treatment fordeveloping country Members thatformpartofthecovered agreements
which havebeenraised bythedeveloping country Member inthecourse ofthedispute settlement
procedures.
12. Thepanel maysuspend itswork atanytimeattherequest ofthecomplaining party foraperiod
nottoexceed 12months. Intheevent ofsuchasuspension, thetime-frames setoutinparagraphs
8and9ofthisArticle, paragraph 1ofArticle 20,andparagraph 4ofArticle 21shallbeextended
bytheamount oftimethatthework wassuspended. Ifthework ofthepanel hasbeensuspended for
more than12months, theauthority forestablishment ofthepanel shalllapse.
Article 13
Right toSeekInformation
1. Each panel shallhavetherighttoseekinformation andtechnical advice from anyindividual
orbody which itdeems appropriate. However, before apanel seeks suchinformation oradvice from
anyindividual orbodywithin thejurisdiction ofaMember itshallinform theauthorities ofthatMember.
AMember should respond promptly andfullytoanyrequest byapanel forsuchinformation asthe
panel considers necessary andappropriate. Confidential information which isprovided shallnotbe
revealed without formal authorization fromtheindividual, body, orauthorities oftheMember providing
theinformation.
2. Panels mayseekinformation fromanyrelevant source andmayconsult experts toobtain their
opinion oncertain aspects ofthematter. Withrespect toafactual issueconcerning ascientific orother
technical matter raised byaparty toadispute, apanel mayrequest anadvisory report inwriting from
anexpert review group. Rules fortheestablishment ofsuchagroup anditsprocedures aresetforth
inAppendix 4.
Article 14
Confidentiality
1. Panel deliberations shallbeconfidential.
2. Thereports ofpanels shallbedrafted without thepresence oftheparties tothedispute inthe
lightoftheinformation provided andthestatements made.
3. Opinions expressed inthepanel report byindividual panelists shallbeanonymous.Page363
Article 15
Interim Review Stage
1. Following theconsideration ofrebuttal submissions andoralarguments, thepanel shallissue
thedescriptive (factual andargument) sections ofitsdraftreport totheparties tothedispute. Within
aperiod oftimesetbythepanel, theparties shallsubmit theircomments inwriting.
2. Following theexpiration ofthesetperiod oftimeforreceipt ofcomments from theparties
tothedispute, thepanel shallissueaninterim report totheparties, including boththedescriptive sections
andthepanel'sfindings andconclusions. Within aperiod oftimesetbythepanel, aparty maysubmit
awritten request forthepanel toreview precise aspects oftheinterim report prior tocirculation of
thefinalreport totheMembers. Attherequest ofaparty, thepanel shallholdafurther meeting with
theparties ontheissues identified inthewritten comments. Ifnocomments arereceived from any
party within thecomment period, theinterim report shallbeconsidered thefinalpanel report and
circulated promptly totheMembers.
3. Thefindings ofthefinalpanel report shallinclude adiscussion ofthearguments made atthe
interim review stage. Theinterim review stage shallbeconducted within thetime-period setoutin
paragraph 8ofArticle 12.
Article 16
Adoption ofPanel Reports
1. Inorder toprovide sufficient timefortheMembers toconsider panel reports, thereports shall
notbeconsidered foradoption bytheDSBuntil20daysafterthedatetheyhavebeencirculated to
theMembers.
2. Membershavingobjectionstoapanelreportshallgivewrittenreasonstoexplaintheirobjections
forcirculation atleast10dayspriortotheDSBmeeting atwhich thepanel report willbeconsidered.
3. Theparties toadispute shallhavetherighttoparticipate fullyintheconsideration ofthepanel
report bytheDSB, andtheirviews shallbefullyrecorded.
4. Within 60daysafterthedateofcirculation ofapanel report totheMembers, thereport shall
beadopted ataDSBmeeting7unless aparty tothedispute formally notifies theDSBofitsdecision
toappeal ortheDSBdecides byconsensus nottoadopt thereport. Ifaparty hasnotified itsdecision
toappeal, thereport bythepanel shallnotbeconsidered foradoption bytheDSBuntilaftercompletion
oftheappeal. Thisadoption procedure iswithout prejudice totherightofMembers toexpress their
views onapanel report.
7Ifameeting oftheDSBisnotscheduled within thisperiod atatimethatenables therequirements ofparagraphs 1and4
ofArticle 16tobemet,ameeting oftheDSB shall beheldforthispurpose.Page364
Article 17
Appellate Review
Standing Appellate Body
1. Astanding Appellate Body shallbeestablished bytheDSB. TheAppellate Body shallhear
appeals from panel cases. Itshallbecomposed ofseven persons, three ofwhom shallserve onany
onecase. Persons serving ontheAppellate Body shall serve inrotation. Such rotation shall be
determined intheworking procedures oftheAppellate Body.
2. TheDSBshallappoint persons toserve ontheAppellate Body forafour-year term, andeach
person maybereappointed once. However, theterms ofthree oftheseven persons appointed
immediately aftertheentry intoforce oftheWTO Agreement shallexpire attheendoftwoyears,
tobedetermined bylot.Vacancies shallbefilled astheyarise. Aperson appointed toreplace aperson
whose termofoffice hasnotexpired shallholdoffice fortheremainder ofthepredecessor 'sterm.
3. TheAppellateBodyshallcomprisepersonsofrecognizedauthority,withdemonstratedexpertise
inlaw,international trade andthesubject matter ofthecovered agreements generally. They shallbe
unaffiliated withanygovernment. TheAppellate Body membership shallbebroadly representative
ofmembership intheWTO. Allpersons serving ontheAppellate Body shallbeavailable atalltimes
andonshort notice, andshallstayabreast ofdispute settlement activities andother relevant activities
oftheWTO. They shallnotparticipate intheconsideration ofanydisputes thatwould create adirect
orindirect conflict ofinterest.
4. Only parties tothedispute, notthirdparties, mayappeal apanel report. Third parties which
havenotified theDSBofasubstantial interest inthematter pursuant toparagraph 2ofArticle 10may
make written submissions to,andbegiven anopportunity tobeheard by,theAppellate Body.
5. Asageneral rule,theproceedings shallnotexceed 60daysfromthedateaparty tothedispute
formally notifies itsdecision toappeal tothedatetheAppellate Body circulates itsreport. Infixing
itstimetable theAppellate Body shalltakeintoaccount theprovisions ofparagraph 9ofArticle 4,
ifrelevant. When theAppellate Body considers thatitcannot provide itsreport within 60days, it
shallinform theDSBinwriting ofthereasons forthedelay together withanestimate oftheperiod
within which itwillsubmit itsreport. Innocaseshalltheproceedings exceed 90days.
6. Anappeal shallbelimited toissues oflawcovered inthepanel report andlegalinterpretations
developed bythepanel.
7. TheAppellate Body shallbeprovided withappropriate administrative andlegal support as
itrequires.
8. Theexpenses ofpersons serving ontheAppellate Body, including travel andsubsistence
allowance, shallbemetfromtheWTO budget inaccordance withcriteria tobeadopted bytheGeneral
Council, based onrecommendations oftheCommittee onBudget, Finance andAdministration.
Procedures forAppellate Review
9. Working procedures shallbedrawn upbytheAppellate Body inconsultation withtheChairman
oftheDSBandtheDirector-General, andcommunicated totheMembers fortheirinformation.Page365
10. Theproceedings oftheAppellate Body shallbeconfidential. Thereports oftheAppellate
Body shallbedrafted without thepresence oftheparties tothedispute andinthelightoftheinformation
provided andthestatements made.
11. Opinions expressed intheAppellate Body report byindividuals serving ontheAppellate Body
shallbeanonymous.
12. TheAppellate Body shalladdress eachoftheissues raised inaccordance withparagraph 6
during theappellate proceeding.
13. TheAppellate Body mayuphold, modify orreverse thelegalfindings andconclusions ofthe
panel.
Adoption ofAppellate Body Reports
14. AnAppellate Body report shallbeadopted bytheDSBandunconditionally accepted bythe
parties tothedispute unless theDSBdecides byconsensus nottoadopt theAppellate Body report within
30daysfollowing itscirculation totheMembers.8Thisadoption procedure iswithout prejudice to
therightofMembers toexpress theirviews onanAppellate Body report.
Article 18
Communications withthePanel orAppellate Body
1. There shallbenoexpartecommunications withthepanel orAppellate Body concerning matters
under consideration bythepanel orAppellate Body.
2. Written submissions tothepanel ortheAppellate Body shallbetreated asconfidential, but
shallbemade available totheparties tothedispute. Nothing inthisUnderstanding shallpreclude
aparty toadispute fromdisclosing statements ofitsownpositions tothepublic. Members shalltreat
asconfidential information submitted byanother Member tothepanel ortheAppellate Body which
thatMember hasdesignated asconfidential. Aparty toadispute shallalso,uponrequest ofaMember,
provide anon-confidential summary oftheinformation contained initswritten submissions thatcould
bedisclosed tothepublic.
Article 19
Panel andAppellate Body Recommendations
1. Where apanel ortheAppellate Body concludes thatameasure isinconsistent withacovered
agreement, itshallrecommend thattheMember concerned9bring themeasure intoconformity with
thatagreement.10Inaddition toitsrecommendations, thepanel orAppellate Body maysuggest ways
inwhich theMember concerned could implement therecommendations.
8Ifameeting oftheDSBisnotscheduled during thisperiod, suchameeting oftheDSBshallbeheldforthispurpose.
9The"Member concerned" istheparty tothedispute towhich thepanel orAppellate Body recommendations aredirected.
10With respect torecommendations incases notinvolving aviolation ofGATT 1994 oranyother covered agreement,
seeArticle 26.Page366
2. Inaccordance withparagraph 2ofArticle 3,intheirfindings andrecommendations, thepanel
andAppellate Body cannot addtoordiminish therights andobligations provided inthecovered
agreements.
Article 20
Time-frame forDSBDecisions
Unlessotherwiseagreedtobythepartiestothedispute,theperiodfromthedateofestablishment
ofthepanel bytheDSBuntilthedatetheDSBconsiders thepanel orappellate report foradoption
shallasageneral rulenotexceed ninemonths where thepanel report isnotappealed or12months
where thereport isappealed. Where either thepanel ortheAppellate Body hasacted, pursuant to
paragraph 9ofArticle 12orparagraph 5ofArticle 17,toextend thetimeforproviding itsreport,
theadditional timetaken shallbeadded totheabove periods.
Article 21
Surveillance ofImplementation ofRecommendations andRulings
1. Prompt compliance withrecommendations orrulings oftheDSBisessential inorder toensure
effective resolution ofdisputes tothebenefit ofallMembers.
2. Particular attention should bepaidtomatters affecting theinterests ofdeveloping country
Members withrespect tomeasures which havebeensubject todispute settlement.
3. AtaDSBmeeting heldwithin 30days11afterthedateofadoption ofthepanel orAppellate
Body report, theMember concerned shallinform theDSBofitsintentions inrespect ofimplementation
oftherecommendations andrulings oftheDSB. Ifitisimpracticable tocomply immediately with
therecommendations andrulings, theMember concerned shallhaveareasonable period oftimein
which todoso.Thereasonable period oftimeshallbe:
(a) theperiod oftimeproposed bytheMember concerned, provided thatsuchperiod is
approved bytheDSB; or,intheabsence ofsuchapproval,
(b) aperiod oftimemutually agreed bytheparties tothedispute within 45daysafterthe
dateofadoption oftherecommendations andrulings; or,intheabsence ofsuch
agreement,
(c) aperiod oftimedetermined through binding arbitration within 90daysafterthedate
ofadoption oftherecommendations andrulings.12Insucharbitration, aguideline for
thearbitrator13should bethatthereasonable period oftimetoimplement panel or
AppellateBodyrecommendationsshouldnotexceed15monthsfromthedateofadoption
ofapanel orAppellate Body report. However, thattimemaybeshorter orlonger,
depending upon theparticular circumstances.
11Ifameeting oftheDSBisnotscheduled during thisperiod, suchameeting oftheDSBshallbeheldforthispurpose.
12Iftheparties cannot agree onanarbitrator within tendaysafterreferring thematter toarbitration, thearbitrator shall
beappointed bytheDirector-General within tendays, after consulting theparties.
13Theexpression "arbitrator" shall beinterpreted asreferring either toanindividual oragroup.Page367
4. ExceptwherethepanelortheAppellateBodyhasextended,pursuanttoparagraph9ofArticle12
orparagraph 5ofArticle 17,thetimeofproviding itsreport, theperiod fromthedateofestablishment
ofthepanel bytheDSBuntilthedateofdetermination ofthereasonable period oftimeshallnotexceed
15months unless theparties tothedispute agree otherwise. Where either thepanel ortheAppellate
Body hasacted toextend thetimeofproviding itsreport, theadditional timetaken shallbeadded to
the15-month period; provided thatunless theparties tothedispute agree thatthere areexceptional
circumstances, thetotaltimeshallnotexceed 18months.
5. Where there isdisagreement astotheexistence orconsistency withacovered agreement of
measures taken tocomply withtherecommendations andrulings suchdispute shallbedecided through
recourse tothesedispute settlement procedures, including wherever possible resort totheoriginal panel.
Thepanel shallcirculate itsreport within 90daysafterthedateofreferral ofthematter toit.When
thepanel considers thatitcannot provide itsreport within thistimeframe, itshallinform theDSB
inwriting ofthereasons forthedelay together withanestimate oftheperiod within which itwillsubmit
itsreport.
6. TheDSBshallkeepunder surveillance theimplementation ofadopted recommendations or
rulings. Theissue ofimplementation oftherecommendations orrulings mayberaised attheDSB
byanyMember atanytimefollowing theiradoption. Unless theDSBdecides otherwise, theissue
ofimplementation oftherecommendations orrulings shallbeplaced ontheagenda oftheDSBmeeting
aftersixmonths following thedateofestablishment ofthereasonable period oftimepursuant to
paragraph 3andshallremain ontheDSB'sagenda untiltheissue isresolved. Atleast10daysprior
toeachsuchDSBmeeting, theMember concerned shallprovide theDSBwithastatus report inwriting
ofitsprogress intheimplementation oftherecommendations orrulings.
7. Ifthematter isonewhich hasbeenraised byadeveloping country Member, theDSBshall
consider whatfurther action itmight takewhich would beappropriate tothecircumstances.
8. Ifthecaseisonebrought byadeveloping country Member, inconsidering whatappropriate
action might betaken, theDSB shall takeintoaccount notonlythetrade coverage ofmeasures
complained of,butalsotheirimpact ontheeconomy ofdeveloping country Members concerned.
Article 22
Compensation andtheSuspension ofConcessions
1. Compensation andthesuspension ofconcessions orother obligations aretemporary measures
available intheevent thattherecommendations andrulings arenotimplemented within areasonable
period oftime. However, neither compensation northesuspension ofconcessions orother obligations
ispreferred tofullimplementation ofarecommendation tobring ameasure intoconformity withthe
covered agreements. Compensation isvoluntary and,ifgranted, shallbeconsistent withthecovered
agreements.
2. IftheMember concerned failstobring themeasure found tobeinconsistent withacovered
agreement intocompliance therewith orotherwise comply withtherecommendations andrulings within
thereasonable period oftimedetermined pursuant toparagraph 3ofArticle 21,suchMember shall,
ifsorequested, andnolaterthantheexpiry ofthereasonable period oftime, enter intonegotiations
withanyparty having invoked thedispute settlement procedures, withaviewtodeveloping mutually
acceptable compensation. Ifnosatisfactory compensation hasbeenagreed within 20daysafterthe
dateofexpiry ofthereasonable period oftime, anyparty having invoked thedispute settlement
procedures mayrequest authorization fromtheDSBtosuspend theapplication totheMember concerned
ofconcessions orother obligations under thecovered agreements.Page368
3. Inconsidering whatconcessions orother obligations tosuspend, thecomplaining party shall
apply thefollowing principles andprocedures:
(a) thegeneral principle isthatthecomplaining party should firstseek tosuspend
concessions orother obligations withrespect tothesame sector(s) asthatinwhich
thepanel orAppellate Body hasfound aviolation orother nullification orimpairment;
(b) ifthatparty considers thatitisnotpracticable oreffective tosuspend concessions or
other obligations withrespect tothesamesector(s), itmayseektosuspend concessions
orother obligations inother sectors under thesame agreement;
(c) ifthatparty considers thatitisnotpracticable oreffective tosuspend concessions or
other obligations withrespect toother sectors under thesame agreement, andthatthe
circumstances areserious enough, itmayseektosuspend concessions orother
obligations under another covered agreement;
(d) inapplying theabove principles, thatparty shalltakeintoaccount:
(i) thetrade inthesector orunder theagreement under which thepanel or
Appellate Body hasfound aviolation orother nullification orimpairment, and
theimportance ofsuchtrade tothatparty;
(ii) thebroader economic elements related tothenullification orimpairment and
thebroader economic consequences ofthesuspension ofconcessions orother
obligations;
(e) ifthatpartydecides torequest authorization tosuspend concessions orotherobligations
pursuant tosubparagraphs (b)or(c),itshallstatethereasons therefor initsrequest.
Atthesame timeastherequest isforwarded totheDSB, italsoshallbeforwarded
totherelevant Councils andalso, inthecaseofarequest pursuant tosubparagraph (b),
therelevant sectoral bodies;
(f) forpurposes ofthisparagraph, "sector" means:
(i) withrespect togoods, allgoods;
(ii) withrespect toservices, aprincipal sector asidentified inthecurrent "Services
Sectoral Classification List" which identifies suchsectors;14
(iii) withrespect totrade-related intellectual property rights, eachofthecategories
ofintellectual property rights covered inSection 1,orSection 2,orSection 3,
orSection 4,orSection 5,orSection 6,orSection 7ofPartII,orthe
obligations under PartIII,orPartIVoftheAgreement onTRIPS;
(g) forpurposes ofthisparagraph, "agreement" means:
(i) with respect togoods, theagreements listed inAnnex 1AoftheWTO
Agreement, taken asawhole aswellasthePlurilateral Trade Agreements in
sofarastherelevant parties tothedispute areparties tothese agreements;
(ii) withrespect toservices, theGATS;
14Thelistindocument MTN.GNS/W/120 identifies eleven sectors.Page369
(iii) withrespect tointellectual property rights, theAgreement onTRIPS.
4. Thelevelofthesuspension ofconcessions orother obligations authorized bytheDSBshall
beequivalent tothelevelofthenullification orimpairment.
5. TheDSBshallnotauthorizesuspensionofconcessionsorotherobligationsifacoveredagreement
prohibits suchsuspension.
6. When thesituation described inparagraph 2occurs, theDSB, upon request, shall grant
authorization tosuspend concessions orother obligations within 30daysoftheexpiry ofthereasonable
period oftimeunless theDSBdecides byconsensus toreject therequest. However, iftheMember
concerned objects tothelevelofsuspension proposed, orclaims thattheprinciples andprocedures
setforthinparagraph 3havenotbeenfollowed where acomplaining party hasrequested authorization
tosuspend concessions orotherobligations pursuant toparagraph 3(b)or(c),thematter shallbereferred
toarbitration. Such arbitration shallbecarried outbytheoriginal panel, ifmembers areavailable,
orbyanarbitrator15appointed bytheDirector-General andshallbecompleted within 60daysafter
thedateofexpiry ofthereasonable period oftime. Concessions orother obligations shallnotbe
suspended during thecourse ofthearbitration.
7. Thearbitrator16acting pursuant toparagraph 6shallnotexamine thenature oftheconcessions
orotherobligationstobesuspendedbutshalldeterminewhetherthelevelofsuchsuspensionisequivalent
tothelevelofnullification orimpairment. Thearbitrator mayalsodetermine iftheproposed suspension
ofconcessions orother obligations isallowed under thecovered agreement. However, ifthematter
referred toarbitration includes aclaim thattheprinciples andprocedures setforthinparagraph 3have
notbeenfollowed, thearbitrator shallexamine thatclaim. Intheevent thearbitrator determines that
thoseprinciplesandprocedureshavenotbeenfollowed,thecomplainingpartyshallapplythemconsistent
withparagraph 3.Theparties shallaccept thearbitrator 'sdecision asfinalandtheparties concerned
shallnotseekasecond arbitration. TheDSBshallbeinformed promptly ofthedecision ofthearbitrator
andshalluponrequest, grantauthorization tosuspend concessions orotherobligations where therequest
isconsistent withthedecision ofthearbitrator, unless theDSBdecides byconsensus toreject therequest.
8. Thesuspension ofconcessions orother obligations shallbetemporary andshallonlybeapplied
untilsuchtimeasthemeasure found tobeinconsistent withacovered agreement hasbeenremoved,
ortheMember thatmustimplement recommendations orrulings provides asolution tothenullification
orimpairment ofbenefits, oramutually satisfactory solution isreached. Inaccordance withparagraph 6
ofArticle 21,theDSB shall continue tokeep under surveillance theimplementation ofadopted
recommendationsorrulings,includingthosecaseswherecompensationhasbeenprovidedorconcessions
orother obligations havebeensuspended buttherecommendations tobring ameasure intoconformity
withthecovered agreements havenotbeenimplemented.
9. Thedispute settlement provisions ofthecovered agreements maybeinvoked inrespect of
measures affecting theirobservance taken byregional orlocalgovernments orauthorities within the
territory ofaMember. When theDSBhasruled thataprovision ofacovered agreement hasnotbeen
observed, theresponsible Member shalltakesuchreasonable measures asmaybeavailable toitto
ensure itsobservance. Theprovisions ofthecovered agreements andthisUnderstanding relating to
15Theexpression"arbitrator" shall beinterpreted asreferring either toanindividual oragroup.
16Theexpression "arbitrator" shall beinterpreted asreferring either toanindividual oragroup ortothemembers of
theoriginal panel when serving inthecapacity ofarbitrator.Page370
compensation andsuspension ofconcessions orother obligations apply incases where ithasnotbeen
possible tosecure suchobservance.17
Article 23
Strengthening oftheMultilateral System
1. When Members seektheredress ofaviolation ofobligations orothernullification orimpairment
ofbenefits under thecovered agreements oranimpediment totheattainment ofanyobjective ofthe
covered agreements, theyshall have recourse to,andabide by,therules andprocedures ofthis
Understanding.
2. Insuchcases, Members shall:
(a) notmake adetermination totheeffect thataviolation hasoccurred, thatbenefits have
been nullified orimpaired orthattheattainment ofanyobjective ofthecovered
agreements hasbeen impeded, except through recourse todispute settlement in
accordance withtherules andprocedures ofthisUnderstanding, andshallmake any
suchdetermination consistent withthefindings contained inthepanel orAppellate
Body report adopted bytheDSB oranarbitration award rendered under this
Understanding;
(b) follow theprocedures setforthinArticle 21todetermine thereasonable period oftime
fortheMember concerned toimplement therecommendations andrulings; and
(c) follow theprocedures setforth inArticle 22todetermine thelevelofsuspension of
concessions orotherobligations andobtain DSBauthorization inaccordance withthose
procedures before suspending concessions orother obligations under thecovered
agreements inresponse tothefailure oftheMember concerned toimplement the
recommendations andrulings within thatreasonable period oftime.
Article 24
Special Procedures Involving Least-Developed Country Members
1. Atallstages ofthedetermination ofthecauses ofadispute andofdispute settlement procedures
involving aleast-developed country Member, particular consideration shallbegiven tothespecial
situation ofleast-developed country Members. Inthisregard, Members shallexercise duerestraint
inraising matters under theseprocedures involving aleast-developed country Member. Ifnullification
orimpairmentisfoundtoresultfromameasuretakenbyaleast-developedcountryMember,complaining
parties shallexercise duerestraint inasking forcompensation orseeking authorization tosuspend the
application ofconcessions orother obligations pursuant tothese procedures.
2. Indispute settlement cases involving aleast-developed country Member, where asatisfactory
solution hasnotbeenfound inthecourse ofconsultations theDirector-General ortheChairman of
theDSBshall, uponrequest byaleast-developed country Member offertheirgoodoffices, conciliation
andmediation withaviewtoassisting theparties tosettle thedispute, before arequest forapanel
17Wheretheprovisionsofanycoveredagreementconcerningmeasurestakenbyregionalorlocalgovernmentsorauthorities
within theterritory ofaMember contain provisions different from theprovisions ofthisparagraph, theprovisions ofsuch
covered agreement shall prevail.Page371
ismade. TheDirector-General ortheChairman oftheDSB, inproviding theabove assistance, may
consult anysource which either deems appropriate.
Article 25
Arbitration
1. ExpeditiousarbitrationwithintheWTOasanalternativemeansofdisputesettlementcanfacilitate
thesolution ofcertain disputes thatconcern issues thatareclearly defined bybothparties.
2. Except asotherwise provided inthisUnderstanding, resort toarbitration shallbesubject to
mutual agreement oftheparties which shallagree ontheprocedures tobefollowed. Agreements to
resort toarbitration shallbenotified toallMembers sufficiently inadvance oftheactual commencement
ofthearbitration process.
3. Other Members maybecome party toanarbitration proceeding onlyupon theagreement of
theparties which haveagreed tohaverecourse toarbitration. Theparties totheproceeding shallagree
toabide bythearbitration award. Arbitration awards shallbenotified totheDSBandtheCouncil
orCommittee ofanyrelevant agreement where anyMember mayraiseanypoint relating thereto.
4. Articles 21and22ofthisUnderstanding shallapply mutatis mutandis toarbitration awards.
Article 26
1. Non-Violation Complaints oftheType Described inParagraph 1(b)ofArticle XXIII of
GATT 1994
Where theprovisions ofparagraph 1(b)ofArticle XXIII ofGATT 1994 areapplicable toa
covered agreement, apanel ortheAppellate Body mayonlymake rulings andrecommendations where
aparty tothedispute considers thatanybenefit accruing toitdirectly orindirectly under therelevant
covered agreement isbeing nullified orimpaired ortheattainment ofanyobjective ofthatAgreement
isbeing impeded asaresult oftheapplication byaMember ofanymeasure, whether ornotitconflicts
withtheprovisions ofthatAgreement. Where andtotheextent thatsuchparty considers andapanel
ortheAppellateBodydeterminesthatacaseconcernsameasurethatdoesnotconflictwiththeprovisions
ofacovered agreement towhich theprovisions ofparagraph 1(b)ofArticle XXIII ofGATT 1994
areapplicable, theprocedures inthisUnderstanding shallapply, subject tothefollowing:
(a) thecomplaining party shallpresent adetailed justification insupport ofanycomplaint
relating toameasure which doesnotconflict withtherelevant covered agreement;
(b) where ameasure hasbeenfound tonullify orimpair benefits under, orimpede the
attainment ofobjectives, oftherelevant covered agreement without violation thereof,
there isnoobligation towithdraw themeasure. However, insuchcases, thepanel
ortheAppellate Body shallrecommend thattheMember concerned make amutually
satisfactory adjustment;
(c) notwithstanding theprovisions ofArticle 21,thearbitration provided forinparagraph 3
ofArticle 21,upon request ofeither party, mayinclude adetermination ofthelevel
ofbenefits which havebeennullified orimpaired, andmayalsosuggest waysandmeans
ofreaching amutually satisfactory adjustment; suchsuggestions shallnotbebinding
upon theparties tothedispute;Page372
(d) notwithstanding theprovisions ofparagraph 1ofArticle 22,compensation maybe
partofamutually satisfactory adjustment asfinalsettlement ofthedispute.
2. Complaints oftheTypeDescribed inParagraph 1(c)ofArticle XXIII ofGATT 1994
Where theprovisions ofparagraph 1(c)ofArticle XXIII ofGATT 1994 areapplicable toa
covered agreement, apanel mayonlymake rulings andrecommendations where aparty considers that
anybenefit accruing toitdirectly orindirectly under therelevant covered agreement isbeing nullified
orimpaired ortheattainment ofanyobjective ofthatAgreement isbeing impeded asaresult ofthe
existence ofanysituation other thanthose towhich theprovisions ofparagraphs 1(a)and1(b)of
Article XXIII ofGATT 1994 areapplicable. Where andtotheextent thatsuchparty considers and
apanel determines thatthematter iscovered bythisparagraph, theprocedures ofthisUnderstanding
shallapply onlyuptoandincluding thepoint intheproceedings where thepanel report hasbeen
circulated totheMembers. Thedispute settlement rules andprocedures contained intheDecision
of12April 1989 (BISD 36S/61-67) shallapply toconsideration foradoption, andsurveillance and
implementation ofrecommendations andrulings. Thefollowing shallalsoapply:
(a) thecomplaining party shallpresent adetailed justification insupport ofanyargument
made withrespect toissues covered under thisparagraph;
(b) incases involving matters covered bythisparagraph, ifapanel finds thatcases also
involve dispute settlement matters otherthanthose covered bythisparagraph, thepanel
shallcirculate areport totheDSBaddressing anysuchmatters andaseparate report
onmatters falling under thisparagraph.
Article 27
Responsibilities oftheSecretariat
1. TheSecretariat shallhavetheresponsibility ofassisting panels, especially onthelegal, historical
andprocedural aspects ofthematters dealtwith, andofproviding secretarial andtechnical support.
2. While theSecretariat assists Members inrespect ofdispute settlement attheirrequest, there
mayalsobeaneedtoprovide additional legaladvice andassistance inrespect ofdispute settlement
todeveloping country Members. Tothisend,theSecretariat shallmake available aqualified legal
expert from theWTO technical cooperation services toanydeveloping country Member which so
requests. Thisexpert shallassist thedeveloping country Member inamanner ensuring thecontinued
impartiality oftheSecretariat.
3. TheSecretariat shallconduct special training courses forinterested Members concerning these
dispute settlement procedures andpractices soastoenable Members 'experts tobebetter informed
inthisregard.Page373
APPENDIX 1
AGREEMENTS COVERED BYTHE UNDERSTANDING
(A) Agreement Establishing theWorld Trade Organization
(B) Multilateral Trade Agreements
Annex 1A: Multilateral Agreements onTrade inGoods
Annex 1B: General Agreement onTrade inServices
Annex 1C: Agreement onTrade-Related Aspects ofIntellectual Property Rights
Annex 2: Understanding onRules andProcedures Governing theSettlement ofDisputes
(C) Plurilateral Trade Agreements
Annex 4: Agreement onTrade inCivil Aircraft
Agreement onGovernment Procurement
International Dairy Agreement
International Bovine Meat Agreement
Theapplicability ofthisUnderstanding tothePlurilateral Trade Agreements shallbesubject
totheadoption ofadecision bytheparties toeachagreement setting outtheterms fortheapplication
oftheUnderstanding totheindividual agreement, including anyspecial oradditional rulesorprocedures
forinclusion inAppendix 2,asnotified totheDSB.Page374
APPENDIX 2
SPECIAL ORADDITIONAL RULES AND PROCEDURES
CONTAINED INTHE COVERED AGREEMENTS
Agreement Rules andProcedures
Agreement ontheApplication ofSanitary
andPhytosanitary Measures 11.2
Agreement onTextiles andClothing 2.14, 2.21, 4.4,5.2,5.4,5.6,6.9,
6.10, 6.11, 8.1through 8.12
Agreement onTechnical Barriers toTrade 14.2through 14.4, Annex 2
Agreement onImplementation ofArticle VI
ofGATT 1994 17.4through 17.7
Agreement onImplementation ofArticle VII
ofGATT 1994 19.3through 19.5, Annex II.2(f), 3,9,21
Agreement onSubsidies andCountervailing Measures 4.2through 4.12, 6.6,7.2through 7.10, 8.5,
footnote 35,24.4, 27.7, Annex V
General Agreement onTrade inServices XXII:3, XXIII:3
Annex onFinancial Services 4
Annex onAirTransport Services 4
Decision onCertain Dispute Settlement
Procedures fortheGATS 1through 5
Thelistofrulesandprocedures inthisAppendix includes provisions where onlyapartofthe
provision mayberelevant inthiscontext.
Anyspecial oradditional rulesorprocedures inthePlurilateral Trade Agreements asdetermined
bythecompetent bodies ofeachagreement andasnotified totheDSB.Page375
APPENDIX 3
WORKING PROCEDURES
l. InitsproceedingsthepanelshallfollowtherelevantprovisionsofthisUnderstanding.Inaddition,
thefollowing working procedures shallapply.
2. Thepanel shallmeetinclosed session. Theparties tothedispute, andinterested parties, shall
bepresent atthemeetings onlywhen invited bythepanel toappear before it.
3. Thedeliberations ofthepanel andthedocuments submitted toitshallbekeptconfidential.
Nothing inthisUnderstanding shallpreclude aparty toadispute fromdisclosing statements ofitsown
positions tothepublic. Members shalltreatasconfidential information submitted byanother Member
tothepanel which thatMember hasdesignated asconfidential. Where aparty toadispute submits
aconfidential version ofitswritten submissions tothepanel, itshallalso,uponrequest ofaMember,
provide anon-confidential summary oftheinformation contained initssubmissions thatcould be
disclosed tothepublic.
4. Before thefirstsubstantive meeting ofthepanel withtheparties, theparties tothedispute shall
transmit tothepanel written submissions inwhich theypresent thefactsofthecaseandtheirarguments.
5. Atitsfirstsubstantive meeting withtheparties, thepanel shallasktheparty which hasbrought
thecomplaint topresent itscase. Subsequently, andstillatthesame meeting, theparty against which
thecomplaint hasbeenbrought shallbeasked topresent itspoint ofview.
6. Allthirdparties which havenotified theirinterest inthedispute totheDSBshallbeinvited in
writing topresent theirviews during asession ofthefirstsubstantive meeting ofthepanel setaside
forthatpurpose. Allsuchthirdparties maybepresent during theentirety ofthissession.
7. Formalrebuttalsshallbemadeatasecondsubstantivemeetingofthepanel.Thepartycomplained
against shallhavetherighttotakethefloorfirsttobefollowed bythecomplaining party. Theparties
shallsubmit, prior tothatmeeting, written rebuttals tothepanel.
8. Thepanel mayatanytimeputquestions totheparties andaskthem forexplanations either in
thecourse ofameeting withtheparties orinwriting.
9. Theparties tothedispute andanythird party invited topresent itsviews inaccordance with
Article 10shallmake available tothepanel awritten version oftheiroralstatements.
10. Intheinterest offulltransparency, thepresentations, rebuttals andstatements referred toin
paragraphs 5to9shall bemade inthepresence oftheparties. Moreover, eachparty'swritten
submissions, including anycomments onthedescriptive partofthereport andresponses toquestions
putbythepanel, shallbemade available totheother party orparties.
11. Anyadditional procedures specific tothepanel.Page376
12. Proposed timetable forpanel work:
(a) Receipt offirstwritten submissions oftheparties:
(1) complaining Party: _______ 3-6weeks
(2) Party complained against: _______ 2-3weeks
(b) Date, timeandplace offirstsubstantive meeting
withtheparties; thirdparty session: _______ 1-2weeks
(c) Receipt ofwritten rebuttals oftheparties: _______ 2-3weeks
(d) Date, timeandplace ofsecond substantive
meeting withtheparties: _______ 1-2weeks
(e) Issuance ofdescriptive partofthereport totheparties: _______ 2-4weeks
(f) Receipt ofcomments bytheparties onthe
descriptive partofthereport: _______ 2weeks
(g) Issuance oftheinterim report, including the
findings andconclusions, totheparties: _______ 2-4weeks
(h) Deadline forparty torequest review ofpart(s) ofreport: _______ 1week
(i) Period ofreview bypanel, including possible
additional meeting withparties: _______ 2weeks
(j) Issuance offinalreport toparties todispute: _______ 2weeks
(k) Circulation ofthefinalreport totheMembers: _______ 3weeks
Theabove calendar maybechanged inthelightofunforeseen developments. Additional meetings
withtheparties shallbescheduled ifrequired.Page377
APPENDIX 4
EXPERT REVIEW GROUPS
Thefollowing rulesandprocedures shallapply toexpert review groups established inaccordance
withtheprovisions ofparagraph 2ofArticle 13.
1. Expert review groups areunder thepanel'sauthority. Their terms ofreference anddetailed
working procedures shallbedecided bythepanel, andtheyshallreport tothepanel.
2. Participation inexpert review groups shallberestricted topersons ofprofessional standing and
experience inthefieldinquestion.
3. Citizens ofparties tothedispute shallnotserve onanexpert review group without thejoint
agreement oftheparties tothedispute, except inexceptional circumstances when thepanel considers
thattheneedforspecialized scientific expertise cannot befulfilled otherwise. Government officials
ofparties tothedispute shallnotserve onanexpert review group. Members ofexpert review groups
shallserve intheirindividual capacities andnotasgovernment representatives, norasrepresentatives
ofanyorganization. Governments ororganizations shalltherefore notgivethem instructions with
regard tomatters before anexpert review group.
4. Expert review groups mayconsult andseekinformation andtechnical advice fromanysource
theydeem appropriate. Before anexpert review group seeks suchinformation oradvice fromasource
within thejurisdiction ofaMember, itshallinform thegovernment ofthatMember. AnyMember
shallrespond promptly andfullytoanyrequest byanexpert review group forsuchinformation as
theexpert review group considers necessary andappropriate.
5. Theparties toadispute shallhaveaccess toallrelevant information provided toanexpert review
group, unless itisofaconfidential nature. Confidential information provided totheexpert review
group shallnotbereleased without formal authorization fromthegovernment, organization orperson
providing theinformation. Where suchinformation isrequested from theexpert review group but
release ofsuchinformation bytheexpert review group isnotauthorized, anon-confidential summary
oftheinformationwillbeprovidedbythegovernment,organizationorpersonsupplyingtheinformation.
6. Theexpert review group shallsubmit adraftreport totheparties tothedispute withaview
toobtaining theircomments, andtaking them intoaccount, asappropriate, inthefinalreport, which
shallalsobeissued totheparties tothedispute when itissubmitted tothepanel. Thefinalreport
oftheexpert review group shallbeadvisory only.