European Communities - Customs Classification of Certain Computer Equipment (WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R) (WT/DS62/R, WT/DS67/R, WT/DS68/R): Report of the Appellate Body

Summary

INTRODUCTION

The European Communities appeals from certain issues of law covered in the Panel Report, European Communities - Customs Classification of Certain Computer Equipment (the “Panel Report”) and certain legal interpretations developed by the Panel in that Report. The Panel was established to consider complaints by the United States against the European Communities, Ireland and the United Kingdom concerning the tariff treatment of Local Area Network (“LAN”) equipment and personal computers with multimedia capability (“PCs with multimedia capability”). The United States claimed that the European Communities, Ireland and the United Kingdom accorded to LAN equipment and/or PCs with multimedia capability treatment less favourable than that provided for in Schedule LXXX of the European Communities (“Schedule LXXX”) and, therefore, acted inconsistently with their obligations under Article II:1 of the General Agreement on Tariffs and Trade 1994 (the “GATT 1994”).

The Panel Report was circulated to the Members of the World Trade Organization (the “WTO”) on 5 February 1998. The Panel reached the conclusion that:

… the European Communities, by failing to accord imports of LAN equipment from the United States treatment no less favourable than that provided for under heading 84.71 or heading 84.73, as the case may be, in Part I of Schedule LXXX, acted inconsistently with the requirements of Article II:1 of GATT 1994.

The Panel made the following recommendation:

The Panel recommends that the Dispute Settlement Body request the European Communities to bring its tariff treatment of LAN equipment into conformity with its obligations under GATT 1994.

On 24 March 1998, the European Communities notified the DSB of its intention to appeal certain issues of law covered in the Panel Report and legal interpretations developed by the Panel, pursuant to paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), and filed a Notice of Appeal with the Appellate Body, pursuant to Rule 20 of the Working Procedures for Appellate Review (the “Working Procedures”). On 3 April 1998, the European Communities filed an appellant's submission. On 20 April 1998, the United States filed an appellee's submission and on the same day, Japan filed a third participant's submission.