WTO Panels Rule Against U.S. "High Value" Continuous Bond Requirement for Certain Shrimp from Thailand and India

(In 2006, Thailand and India each requested WTO DSPs, contesting the "high value" continuous bond amount¹ imposed on importers of certain shrimp from Thailand and India.

India further contested certain amendments and clarifications to U.S. Customs and Border Protection (CBP) Directive 099 3510-004, which provided a process for adding additional coverage to an importer's continuous bond for special categories of merchandise subject to antidumping (AD) or countervailing (CV) duties that involve elevated collection risks, which CBP had only applied to certain shrimp.)

U.S. Application of "High Value" Continuous Bonds Inconsistent with WTO/GATT

The separate panels upheld claims by both India and Thailand that the U.S.' application of the enhanced or "high value" continuous bond requirement to the subject shrimp from India and Thailand is inconsistent with certain WTO/General Agreement on Tariffs and Trade (GATT) provisions.

The India DSP further determined that other U.S. practices were inconsistent with WTO/GATT provisions, including: (i) the application of the "high value" continuous bond requirement to subject shrimp from India prior to the imposition of the AD order; and (ii) the failure to notify the amended CBP continuous bond directive to certain WTO/GATT committees.

Both Panels Recommend U.S. Bring Measures Into Conformity with WTO/GATT

Both panels recommended that the U.S. bring its measures into conformity with its WTO/GATT obligations.

¹Importers of shrimp from Thailand and India were required to maintain a continuous entry bond in the amount of the applicable AD duty margin multiplied by the value of shrimp imported by the importer in the preceding year.

(See ITT's Online Archives or 11/01/06 news, 06110105, for BP summary of CBP's updated information on setting continuous bond amounts for special categories of AD/CV merchandise, with links to previous summaries on a 2004 amendment and 2005 clarification to CBP Directive 099 3510-004.

(See ITT's Online Archives or 12/11/06 news, 06121135, for BP summary of a GAO report on CBP's application of the revised continuous bond policy to imports of shrimp.)

See ITT's Online Archives or 10/17/06 news, 06101715, for BP summary of the USTR seeking comments on Thailand's request for a WTO DSP regarding certain shrimp from Thailand.

See ITT's Online Archives or 01/10/07 news, 07011025, for BP summary of the USTR seeking comments on India's request for a WTO dispute panel regarding certain shrimp from India.)

WTO press release on the shrimp panel reports, with links to the full reports and dispute summaries, which include rulings on other issues such as "zeroing" (searchable by DS number, i.e. DS343 (Thailand) and DS345 (India), dated 02/29/08) available at http://www.wto.org/english/news_e/news_e.htm

CBP Amendment to Bond Directive 099 3510-004 for Certain Merchandise Subject to AD/CV Duty Cases (dated 07/09/04) available at http://www.cbp.gov/xp/cgov/import/cargo_summary/bonds/07082004.xml

Clarification to July 9, 2004 Amended Monetary Guidelines for Setting Bond Amounts for Special Categories of Merchandise Subject to AD and/or CV Duty Cases available at http://www.cbp.gov/linkhandler/cgov/import/cargo_summary/bonds/bond_clarification.ctt/bond_clarificaiton.doc

CBP Directive "Monetary Guidelines for Setting Bond Amounts" (Directive No. 099 3510-004, issued 07/23/91) available at http://cbp.gov/linkhandler/cgov/toolbox/legal/directives/3510-004.ctt/3510-004.txt