JAPAN V EUROPEAN ECONOMIC COMMUNITY
In June 1987, the EEC included in its anti-dumping regulation a provision intended to prevent the circumvention of anti-dumping duties on finished products through the importation of parts or materials for use in the assembly or production of like finished products within the EEC. The provision . . . states, inter alia, that
"Definitive anti-dumping duties may be imposed ... on products that are introduced into the
commerce of the Community after having been assembled or produced in the Community,
. . .
- the value of parts or materials used in the assembly or production operation and originating in
the country of exportation of the product subject to the anti-dumping duty exceeds the value
of all other parts or materials used by at least 50%."
. . .
Japan considers . . .
-the duties . . . to be inconsistent with the EEC's obligations under Articles I and II or III . . .
The EEC considers . . . itself to be justified by Article XX(d). Japan disagrees that Article XX(d) justifies the measures at issue.
. . .
The Panel noted that the anti-circumvention duties are levied . . . "on products that are introduced into the commerce of the Community after having been assembled or
produced in the Community". The duties are thus imposed, as the EEC explained before the Panel, not on imported parts or materials but on the finished products assembled or produced in the EEC. They are not imposed conditional upon the importation of a product or at the time or point of importation.
The EEC considers that the anti-circumvention duties should, nevertheless, be regarded as customs
duties imposed "in connection with importation" within the meaning of Article II:1(b). The main
arguments the EEC advanced in support of this view were: firstly, that the purpose of these duties was
to eliminate circumvention of anti-dumping duties on finished products and that their nature was
identical to the nature of the anti-dumping duties they were intended to enforce; and secondly, that the
duties were collected by the customs authorities under procedures identical to those applied for the collection of customs duties, formed part of the resources of the EEC in the same way as customs duties and related to parts and materials which were not considered to be "in free circulation" within the EEC.
In the light of the above facts and arguments, the Panel first examined whether the policy purpose of a charge is relevant to determining the issue of whether the charge is imposed in "connection with importation" within the meaning of Article II:1(b).
The text of Articles I, II, III and the Note to
Article III refers to charges "imposed on importation", "collected ... at the time or point of importation"
and applied "to an imported product and to the like domestic product". The relevant fact, according to
the text of these provisions, is not the policy purpose attributed to the charge but rather whether the
charge is due on importation or at the time or point of importation or whether it is collected internally.
This reading of Articles II and III is supported by their drafting history and by previous panel reports
(e.g. BISD 1S/60; 25S/49, 67). . . .
The Panel further noted that the policy purpose of charges is frequently difficult to determine
objectively. Many charges could be regarded as serving both internal purposes and purposes related to
the importation of goods. Only at the expense of creating substantial legal uncertainty could the policy
purpose of a charge be considered to be relevant in determining whether the charge falls under
Article II:1(b) or Article III:2. The Panel therefore concluded that the policy purpose of the charge is
not relevant to determining the issue of whether the charge is imposed in "connection with importation"
within the meaning of Article II:1(b).
. . .
. . .
In the light of the above, the Panel found that the anti-circumvention duties are not levied "on or
in connection with importation" within the meaning of Article II:1(b), and consequently do not
constitute customs duties within the meaning of that provision.
. . .
The Panel proceeded to examine the anti-circumvention duties in the light of Article III:2, first sentence, according to which
"the products of the territory of any contracting party imported into the territory of any other contracting party shall not be subject, directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products."
. . .
The Panel therefore found that the anti-circumvention duties on the finished products subject imported parts and materials indirectly to an internal charge in excess of that applied to like domestic products and that they are consequently contrary to Article III:2, first sentence.
. . .
The Panel proceeded to examine whether Article XX(d), which the EEC did invoke, can justify the imposition of the anti-circumvention duties. The Panel noted that the relevant part of Article XX(d) provides that
... "nothing in this Agreement shall be construed to prevent the adoption or enforcement by any
contracting party of measures:
(d) necessary to secure compliance with laws or regulations which are not inconsistent with the
provisions of this Agreement ..."
. . .
. . .
The Panel noted that the anti-circumvention duties do not serve to enforce the payment of anti-dumping duties. The Panel could, therefore, not establish that the anti-circumvention duties "secure compliance with" obligations under the EEC's anti-dumping regulations. The Panel concluded for these reasons that the duties could not be justified under Article XX(d).