ࡱ> q bjbjt+t+ AAҐm]@0ZZZ4hJ .!5Z"<':<'(d'd'?(f:D?$ ZB?(?(BB HZZd'd'"HHHB Zd'Zd'***0*ZZBHHN\2ZZ d'"YjE4World Trade OrganizationWT/DS179/R 22 December 2000(00-5484)Original: English UNITED STATES ANTI-DUMPING MEASURES ON STAINLESS STEEL PLATE IN COILS AND STAINLESS STEEL SHEET AND STRIP FROM KOREA Report of the Panel The report of the Panel on United States - Anti-Dumping Measures on Stainless Steel Plate in Coils and Stainless Steel Sheet and Strip from Korea is being circulated to all Members, pursuant to the DSU. The report is being circulated as an unrestricted document from 22 December 2000 pursuant to the Procedures for the Circulation and Derestriction of ϲʹ Documents (WT/L/160/Rev.1). Members are reminded that in accordance with the DSU only parties to the dispute may appeal a panel report. An appeal shall be limited to issues of law covered in the Panel report and legal interpretations developed by the Panel. There shall be no ex parte communications with the Panel or Appellate Body concerning matters under consideration by the Panel or Appellate Body. Note by the Secretariat: This Panel Report shall be adopted by the Dispute Settlement Body (DSB) within 60 days after the date of its circulation unless a party to the dispute decides to appeal or the DSB decides by consensus not to adopt the report. If the Panel Report is appealed to the Appellate Body, it shall not be considered for adoption by the DSB until after the completion of the appeal. Information on the current status of the Panel Report is available from the ϲʹ Secretariat. TABLE OF CONTENTS Page  TOC \o "1-5" \p " " I. INTRODUCTION  PAGEREF _Toc497638106 \h 1 II. FACTUAL ASPECTS  PAGEREF _Toc497638107 \h 2 A. Plate  PAGEREF _Toc497638108 \h 2 B. Sheet  PAGEREF _Toc497638109 \h 3 III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS  PAGEREF _Toc497638110 \h 4 A. Korea  PAGEREF _Toc497638111 \h 4 B. United States  PAGEREF _Toc497638112 \h 5 IV. arguments of the parties and third parties  PAGEREF _Toc497638113 \h 5 V. INTERIM REVIEW  PAGEREF _Toc497638114 \h 5 vi. findings 8 A. GENERAL REMARKS  PAGEREF _Toc497638115 \h 8 B. ALLEGED "DOUBLE CONVERSION" OF CERTAIN HOME MARKET SALES PRICES  PAGEREF _Toc497638116 \h 9 1. Factual background  PAGEREF _Toc497638117 \h 9 2. Claims under Article 2.4.1 of the AD Agreement  PAGEREF _Toc497638118 \h 9 (a) Arguments of the parties  PAGEREF _Toc497638119 \h 9 (b) Evaluation by the Panel  PAGEREF _Toc497638120 \h 10 (i) Does Article 2.4.1 prohibit unnecessary currency conversions?  PAGEREF _Toc497638121 \h 10 (ii) Did the United States properly determine that the local sales were made in won?  PAGEREF _Toc497638122 \h 11 (iii) Did the United States perform unnecessary currency conversions in violation of Article 2.4.1 of the AD Agreement?  PAGEREF _Toc497638123 \h 20 3. Claims under Article 2.4 of the AD Agreement ("fair comparison")  PAGEREF _Toc497638124 \h 21 (a) Arguments of the parties  PAGEREF _Toc497638125 \h 21 (b) Evaluation by the Panel  PAGEREF _Toc497638126 \h 21 4. Claims under Article X:3(a) of GATT 1994 and Article 12 of the AD Agreement  PAGEREF _Toc497638127 \h 21 (a) Arguments of the parties  PAGEREF _Toc497638128 \h 21 (b) Evaluation by the Panel  PAGEREF _Toc497638129 \h 22 (i) The Plate investigation  PAGEREF _Toc497638130 \h 22 (ii) The Sheet investigation  PAGEREF _Toc497638131 \h 24 C. TREATMENT OF UNPAID SALES  PAGEREF _Toc497638132 \h 24 1. Factual background  PAGEREF _Toc497638133 \h 24 2. Claims under Article 2.4 ("allowances")  PAGEREF _Toc497638134 \h 24 (a) Arguments of the parties  PAGEREF _Toc497638135 \h 24 Page (b) Evaluation by the Panel  PAGEREF _Toc497638136 \h 26 (i) Was the DOC's treatment of unpaid sales in respect of POSAM part of the construction of the export price?  PAGEREF _Toc497638137 \h 26 (ii) Was the DOC's adjustment for unpaid sales in respect of sales through unaffiliated importers a permissible allowance for a difference affecting price comparability?  PAGEREF _Toc497638138 \h 28 (iii) Is Korea's claim regarding the DOC's adjustment for unpaid sales in respect of sales through POSAM to construct an export price within the Panel's terms of reference?  PAGEREF _Toc497638139 \h 31 (iv) Is the DOC's adjustment for unpaid sales in respect of sales through POSAM to construct an export price consistent with Article 2.4, fourth sentence, of the AD Agreement?  PAGEREF _Toc497638140 \h 33 3. Claims under Article 2.4 ("fair comparison")  PAGEREF _Toc497638141 \h 37 (a) Arguments of the parties  PAGEREF _Toc497638142 \h 37 (b) Evaluation by the Panel  PAGEREF _Toc497638143 \h 37 D. MULTIPLE AVERAGING  PAGEREF _Toc497638144 \h 37 1. Factual background  PAGEREF _Toc497638145 \h 37 2. Claim under Article 2.4.2 of the AD Agreement  PAGEREF _Toc497638146 \h 38 (a) Arguments of the parties  PAGEREF _Toc497638147 \h 38 (b) Evaluation by the Panel  PAGEREF _Toc497638148 \h 39 (i) Does Article 2.4.2 prohibit multiple averaging?  PAGEREF _Toc497638149 \h 39 (ii) Was the use of multiple averaging permissible in these investigations?  PAGEREF _Toc497638150 \h 40 3. Claim under Article 2.4.1 44 (a) Arguments of the parties  PAGEREF _Toc497638152 \h 44 (b) Evaluation by the Panel  PAGEREF _Toc497638153 \h 44 4. Claim under Article 2.4 ("fair comparison")  PAGEREF _Toc497638154 \h 45 (a) Arguments of the parties  PAGEREF _Toc497638155 \h 45 (b) Evaluation by the Panel  PAGEREF _Toc497638156 \h 46 E. OTHER CLAIMS BY KOREA  PAGEREF _Toc497638157 \h 46 1. Claims under Article X of GATT 1994 and Articles 6 and 12 of the AD Agreement  PAGEREF _Toc497638158 \h 46 2. Claims under Article VI of GATT 1994 and Article 1 of the AD Agreement  PAGEREF _Toc497638159 \h 47 VII. CONCLUSIONS AND RECOMMENDATION  PAGEREF _Toc497638160 \h 47 A. CONCLUSIONS  PAGEREF _Toc497638161 \h 47 B. RECOMMENDATION AND SUGGESTION  PAGEREF _Toc497638162 \h 48 Page ANNEX 1 SUBMISSIONS OF KOREA Annex 1-1 First Submission of Korea 50 Annex 1-2 Oral Statement of Korea at the First Meeting of the Panel 101 Annex 1-3 Written Questions from Korea to the United States at the First Meeting of the Panel 116 Annex 1-4 Responses of Korea to Questions Posed by the Panel and by the United States at the First Meeting of the Panel 120 Annex 1-5 Second Submission of Korea 145 Annex 1-6 Oral Statement of Korea at the Second Meeting of the Panel 196 Annex 1-7 Responses of Korea to Questions Posed by the Panel at the Second Meeting of the Panel 214 ANNEX 2 SUBMISSIONS OF THE UNITED STATES Annex 2-1 First Submission of the United States 228 Annex 2-2 Oral Statement of the United States at the First Meeting of the Panel 275 Annex 2-3 Written Questions from the United States to Korea at the First Meeting of the Panel 285 Annex 2-4 Responses of the United States to Questions Posed by the Panel and by Korea at the First Meeting of the Panel 286 Annex 2-5 Second Submission of the United States 314 Annex 2-6 Oral Statement of the United States at the Second Meeting of the Panel 332 Annex 2-7 Responses of the United States to Questions Posed by the Panel at the Second Meeting of the Panel 342 ANNEX 3 SUBMISSIONS OF THE THIRD PARTIES Annex 3-1 First Submission of the European Communities 355 Annex 3-2 First Submission of Japan 360 Annex 3-3 Oral Statement of the European Communities at the First Meeting of the Panel 369 Annex 3-4 Oral Statement of Japan at the First Meeting of the Panel 372 INTRODUCTION On 30 July 1999, Korea requested consultations with the United States regarding the preliminary and final determinations of the United States Department of Commerce ("DOC") on imports of stainless steel plate in coils ("Plate") from Korea, dated 4 November 1998 and 31March1999, respectively, and the preliminary and final determinations of the DOC on imports of stainless steel sheet and strip in coils ("Sheet") from Korea, dated 4 January 1999 as amended 26January 1999 and 8 June 1999, respectively. Korea made its request pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the "Dispute Settlement Understanding" or "DSU"), Article XXIII:1 of the General Agreement on Tariffs and Trade 1994 ("GATT 1994"), and Article 17.3 of the Agreement on Implementation of Article VI of GATT 1994 (the "Anti-Dumping Agreement" or "AD Agreement"). The United States and Korea held consultations on 17September1999, but failed to reach a mutually satisfactory solution. On 14 October 1999, Korea requested the establishment of a panel with the standard terms of reference set out in Article 7 of the DSU. Korea made its request pursuant to Article 6 of the DSU, Article XXIII:2 of GATT 1994 and Article 17.5 of the AD Agreement. In that request, Korea identified the United States measures at issue as the anti-dumping duty order on imports of Plate from Korea, dated 21 May 1999, including actions by the DOC preceding this measure, such as the preliminary and final determinations of the DOC dated 4 November 1998 and 31 March 1999, respectively, and the anti-dumping duty order on imports of Sheet from Korea, dated 27 July 1999, including actions by the DOC preceding this measure, such as the preliminary and final determinations of the DOC dated 4 January 1999 as amended 26January 1999 and 8 June 1999, respectively. At its meeting on 19 November 1999, the Dispute Settlement Body ("DSB") established a panel pursuant to the above request. At that meeting, the parties to the dispute agreed that the Panel should have standard terms of reference. The terms of reference were: "To examine, in light of the relevant provisions of the covered agreements cited by Korea in document WT/DS179/2, the matter referred to the DSB by Korea in that document, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements". The European Communities and Japan reserved their rights as third parties to the dispute. On 24 March 2000, the Panel was constituted as follows: Chairman: Mr. Jos Antonio S. Buencamino Members: Mr. G. Bruce Cullen Ms. Enie Neri de Ross The Panel met with the parties on 13-14 June 2000 and 12-13 July 2000. It met with the third parties on 14 June 2000. The Panel submitted its interim report to the parties on 9 November 2000. The Panel submitted its final report to the parties on 14 December 2000. FACTUAL ASPECTS This dispute concerns the imposition of definitive anti-dumping duties by the DOC on imports of Plate and Sheet from Korea. The DOC imposed definitive duties on Plate and Sheet through separate proceedings. Plate On 31 March 1998, a number of U.S. steel companies and U.S. steel workers' associations filed an anti-dumping application with the DOC alleging that imports of Plate from Korea and five other countries were being exported to the United States at less than their fair value and that such imports were materially injuring an industry in the United States. The DOC received supplemental information from the petitioners in April 1998. On 27April1998, the DOC published a notice announcing the initiation of an anti-dumping investigation on imports of Plate from Korea and the five other countries concerned. The period of investigation selected by the DOC for the purpose of determining whether dumping had occurred went from 1 January 1997 through 31December 1997. On May 27 1998, the DOC issued investigation questionnaires to two Korean companies, including Pohang Iron and Steel Company ("POSCO"). POSCO replied to Section A of the investigation questionnaire on 1 July 1998 and to Sections B through D of that same questionnaire on 20 July 1998. Additionally, in July, August, September and October 1998, POSCO submitted replies to supplemental questionnaires. In turn, the petitioners filed comments with respect to POSCO's submissions in July, August and September 1998. On 4November 1998, the DOC published a preliminary affirmative dumping determination, and instructed the U.S. Customs Service to require a cash deposit or the posting of a bond on imports of Plate from Korea, equal to the calculated dumping margins (2.77% for both POSCO and all the other Korean exporters). In November-December 1998, the DOC verified the sales data and the cost data submitted by POSCO. POSCO submitted revised sales data on 30 November 1998. Additionally, both POSCO and the petitioners filed case briefs on 26 January 1999, commenting on the preliminary determination, and rebuttal briefs, commenting on the case briefs, on 2 February 1999. On 31March1999, the DOC published a final affirmative dumping determination, and instructed the U.S. Customs Service to continue requiring a cash deposit or the posting of a bond on imports of Plate from Korea, equal to the calculated dumping margins (16.26% for both POSCO and all the other Korean exporters).  On 4 May 1999, the United States International Trade Commission informed the DOC of its final affirmative injury determination concerning imports of Plate from the six investigated countries, including Korea. Following this notification, on 21 May 1999 the DOC published an anti-dumping duty order with respect to imports of Plate from these countries, setting a cash deposit rate for imports of Plate from Korea equal to the dumping margins arrived at by the DOC in its final determination (16.26% for both POSCO and all the other Korean exporters). Sheet On 10 June 1998, a number of U.S. steel companies and U.S. steel workers' associations filed an anti-dumping application with the DOC alleging that imports of Sheet from Korea and seven other countries were being exported to the United States at less than their fair value and that such imports were materially injuring an industry in the United States. The DOC received supplemental information from the petitioners in June 1998. On 13July1998, the DOC published a notice announcing the initiation of an anti-dumping investigation on imports of Sheet from Korea and the seven other countries concerned. The period of investigation selected by the DOC for the purpose of determining whether dumping had occurred went from 1 April 1997 through 31 March 1998. On 3 August 1998, the DOC issued investigation questionnaires to five Korean companies: POSCO, Inchon Iron and Steel Co., Ltd ("Inchon"), Taihan Electric Wire Co., Ltd. ("Taihan"), Sammi Steel Co., Ltd., and Dai Yang Metal Co., Ltd. On 21 September 1998, the DOC selected three mandatory respondents for the investigation, including POSCO. POSCO replied to Section A of the investigation questionnaire on 8 September 1998 and Sections B through D of that same questionnaire on 23 September 1998. Additionally, POSCO submitted replies to supplemental questionnaires in November 1998. In turn, the petitioners filed comments with respect to POSCO's submissions in October 1998. On 4January1999, the DOC published a preliminary affirmative dumping determination, and instructed the U.S. Customs Service to require a cash deposit or the posting of a bond on imports of Sheet from Korea, equal to the calculated dumping margins (12.35% for POSCO, 0% for Inchon, 58.79% for Taihan, and 12.35% for all the other Korean exporters). On 28 December 1998, POSCO filed a brief before the DOC alleging that the Department had made "significant ministerial errors" in the calculation of POSCO's dumping margin for the purpose of the preliminary determination (signed on 17 December 1998 and made available to parties thereafter). On 26 January 1999, after reviewing these allegations, the DOC published an amendment to its preliminary determination, which revised the cash deposit rate for POSCO to 3.92%. In December 1998 and February-March 1999, the DOC verified the cost data and the sales data submitted by POSCO. POSCO submitted revised sales data on 8 March 1999. Additionally, both POSCO and the petitioners filed case briefs on 15 April 1999, commenting on the preliminary determination, and rebuttal briefs, commenting on the case briefs, on 21 April 1999. A public hearing was held on 26 April 1999. On 8June1999, the DOC published a final affirmative dumping determination, and instructed the U.S. Customs Service to continue requiring a cash deposit or the posting of a bond on imports of Sheet from Korea, equal to the calculated dumping margins (12.12% for POSCO, 0% for Inchon, 58.79% for Taihan, and 12.12% for all the other Korean exporters).  On 19 July 1999, the United States International Trade Commission informed the DOC of its final affirmative injury determination concerning imports of Sheet from three of the eight investigated countries, including Korea. Following this notification, on 27 July 1999 the DOC published an anti-dumping duty order with respect to imports of Sheet from these three countries, setting a cash deposit rate for imports of Sheet from Korea equal to the dumping margins arrived at by the DOC in its final determination (12.12% for POSCO, 0% for Inchon, 58.79% for Taihan, and 12.12% for all the other Korean exporters). PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS Korea Korea respectfully requests the Panel to find that the U.S. anti-dumping measures at issue, including actions preceding those measures, are inconsistent with the following provisions of the ADAgreement and GATT1994: ArticleVI:1 of GATT1994 and Article2.4 of the AD Agreement, which permit adjustments to be made only for differences that are demonstrated to affect price comparability; Article2.4 of the AD Agreement, which also requires the investigating authorities to make a fair comparison of the export price and the normal value; Article2.4.1 of the AD Agreement, which permits alterations to the standard price comparison methodology to account for currency movements only when the exporting countrys currency is appreciating against the importing countrys currency; Article2.4.1 of the AD Agreement, which also permits currency conversions only when such conversions are required; Article2.4.2 of the AD Agreement, which requires that the calculation of dumping margins be based on a comparison of a single average normal value to a single average of prices of all comparable export transactions; Articles6.1, 6.2, and 6.9 of the AD Agreement, which require the investigating authorities to give exporters notice of all essential facts in order to provide them with a full and ample opportunity to defend their interests; Article12.2 of the AD Agreement, which requires the investigating authorities to provide a full explanation of the reasons for their determinations; ArticleX:3(a) of GATT1994, which requires each ϲʹ Member to administer its laws, regulations, decisions, and rulings in a uniform, impartial, and reasonable manner; and ArticleVI of GATT1994 and Article1 of the AD Agreement, which only permit anti-dumping measures to be imposed in the circumstances provided for in ArticleVI and pursuant to investigations conducted in accordance with the AD Agreement. Therefore, Korea requests that the Panel find that: (i) the United States has nullified or impaired a benefit accruing to Korea, directly or indirectly, under the ϲʹ Agreements; and (ii) the United States is impeding the achievement of the objectives of the ϲʹ Agreements. Korea further requests that the Panel recommend that the United States bring its anti-dumping measures against Plate and Sheet from Korea into conformity with the ϲʹ AD Agreement and GATT1994. Specifically, Korea requests that the Panel suggest that the United States revoke the anti-dumping duty orders concerning Plate and Sheet from Korea. United States The United States respectfully requests the Panel to find that the actions of the United States in conducting the investigations at issue were in conformity with the requirements of the ADAgreement and GATT 1994. The United States further requests that, should the Panel agree with Korea on the merits of the case, the Panel nonetheless should reject Koreas request to revoke the anti-dumping duty orders concerning Plate and Sheet from Korea, and make a general recommendation and suggestions for implementation, consistent with the DSU and established GATT/ϲʹ practice. arguments of the parties and third parties With the agreement of the parties, the Panel has decided that, in lieu of the traditional descriptive part of the Panel report setting forth the arguments of the parties, the parties' submissions will be annexed in full to the Panel report. Accordingly, the parties' first and second written submissions and oral statements, along with their written responses to questions, are attached at Annex1 (Korea) and Annex2 (the United States). The written submissions and oral statements of the third parties are attached at Annex 3. V. INTERIM REVIEW The United States did not make any comments on the interim report. Korea did however offer a number of comments on the interim report, as discussed below. Neither party requested an interim review meeting. Korea considers that the Panel misread the discussion of local sales in the Final Determination in Plate. The interim report assumes that the DOC made a factual determination that the local sales were denominated in won rather than in dollars. The Final Determination however does not address the issue of denomination at all. Moreover, the interim report appears to read the Plate Final Determination as if the DOC made a factual determination that local sales were paid in won using the exchange rate prevailing on the date of invoice. Once again, no such determination was made. Although the DOC did say that the customer pays in won, it did not say how many won were paid or what exchange rate was used to calculate the amount of won paid. This confusion may result from a misunderstanding about the significance of a charge to the sales ledger. There is no connection between the exchange rate that applies to the sales ledger charge and the exchange rate that applies to the payment. Korea considers that this incorrect understanding of the factual determinations made by the DOC led the Panel to a line of reasoning that is not relevant to the issues presented. Therefore, Korea requests that paragraphs 6.19 - 6.31 be revised to reflect the absence of a factual determination that the exchange rate was fixed as of the time of invoice. Korea considers that, in the absence of such a factual determination, there is no basis for upholding the DOCs double conversion methodology in the Plate case. The Panel recognizes that the Final Determination in Plate does not contain an unambiguous determination that the amount of won paid was based upon the dollar/won exchange prevailing at the time of invoice. It is however clear from the Determination as a whole that the DOC believed that the won amounts initially reported to the DOC amounts which were equivalent to the dollar amount invoiced converted to won at the exchange rate prevailing on the date of invoice were the amounts actually paid. Thus, the DOC summarized the arguments of the parties as reflecting a choice between calculating normal value "based upon the US dollar price at which the local sales were invoiced" or using "the won prices the customers actually pay". In examining this question, the DOC compared POSCO's internal exchange rate on the date of invoice not only with the DOC's "market" exchange rate on the date of invoice but also with DOC's market exchange rate on the date of payment, and concluded that they were dissimilar. The DOC noted that this contrasted with the situation in Roses from Colombia, where "the Department verified that the payment in pesos reflected the market exchange rate at the date of payment" (emphasis added).  Thus, both the issue posed and the manner in which it was addressed indicate the DOC's belief that the won amount paid was calculated based upon the exchange rate prevailing as of the date of invoice. Given POSCO's questionnaire responses which initially reported a won invoiced amount and never suggested that the won amount paid differed from the amount invoiced the DOC's belief was in our view eminently reasonable. Thus, we have not except in para. 6.9 made the changes requested by Korea. Korea argues that, in Paragraph6.29, the interim report notes an admitted error by the DOC in the Plate case, namely, the comparison of POSCOs internal exchange rate to the wrong U.S. exchange rate. Nevertheless, the interim report considers that this admitted error does not give rise to an inconsistency with the AD Agreement. In so doing, the interim report overlooks the fact that this admitted error vitiates one of the three reasons given in the Final Determination for the double conversion, in fact, the reason identified by the United States as the primary basis for the double conversion. Moreover, the interim report appears to accept, sub silentio, the notion of harmless error, an approach inconsistent with that taken by another recent panel. We disagree with Korea. In our view, the factual error committed by the DOC does not undermine the validity of the DOC's resolution of this issue. Nor do we see any inconsistency between our ruling here and that in Guatemala Cement II. The issue in that dispute was whether certain violations of the AD Agreement failure to provide timely notice of initiation, to provide an appropriate public notice and to timely provide the text of the application were harmless. Here, the question is rather whether certain factual errors vitiate a determination, thus giving rise to a violation. Korea contends that the interim report is incorrect in treating as a question of fact the issue whether the DOC adjusted for the unpaid sales as part of constructing the export price or as an adjustment to the export price (paras. 6.62 to 6.70). There is no dispute between the parties as to what the DOC did: The DOC calculated a bad debt expense for the unpaid sales and made an adjustment to all of POSCOs export sales to account for that expense. The only question is how to characterize this adjustment. That characterization is a question of law. In order to preserve the current balance in the ϲʹ system between acceptance of factual determinations and review of legal conclusions, Korea submits that a panel should not unduly defer to the investigating authoritys own characterization of its actions. Rather, a panel should determine as a factual question what actually happened and then should determine as a legal question, based on an objective, functional analysis, which provisions of the AD Agreement are most applicable to the factual situation. Korea therefore requests that we treat this as a legal question, with conforming changes to the ensuing analysis. We do not agree with Korea. Our task as a Panel is to review the determinations of the DOC and to establish, as a matter of fact, the bases on which it acted. As the determinations and underlying analysis memoranda indicated that the actions in question were taken as part of the construction of the export price, the consistency of those actions with the AD Agreement must be assessed against the provisions relating to such construction. Korea argues that the interim report in para. 6.123 addresses issues not properly before the Panel for decision. Moreover, Korea does not consider that the reasoning in Paragraph6.123 is sufficient to justify an inference that multiple averaging is permitted by the AD Agreement in the circumstances suggested in that Paragraph and, particularly, in Footnote 123. Accordingly, Korea suggests that the Panel delete all of paragraph 6.123, except for the first sentence. Alternatively, Korea suggests that the Panel keep the first two sentences of Paragraph6.123 and replace the rest of the paragraph with the following: We express no opinion as to whether the Anti-Dumping Agreement permits the use of multiple averaging in that factual circumstance. We decline to make the change requested by Korea. Paragraph 6.123 is an essential part of our findings and is necessary in order to make clear why the DOC's actions were inconsistent with the AD Agreement and to provide guidance in respect of implementation. Korea argues that the interim report generally follows the common practice of panels of declining to decide issues that are considered unnecessary to resolution of the dispute, typically because a measure has been found inconsistent with one provision of a ϲʹ Agreement and the panel considers it unnecessary to analyse the measures consistency with a second provision. However, the interim report inexplicably departs from this practice in two respects. After finding that the United States use of multiple averaging in the Plate and Sheet investigations was inconsistent with the requirement of Article2.4.2, the interim report continues to analyse the consistency of multiple averaging with Article 2.4.1 (in Paragraphs 6.128 - 6.131) and with the fair comparison requirement of Article 2.4 (in Paragraphs 6.134 - 6.136). In the interests of judicial economy, and judicial consistency, Korea requests that these paragraphs be replaced in their entirety by paragraphs declining to address these unnecessary issues. 5.11 We decline to make the changes suggested by Korea. We recognize that we might well have exercised judicial economy in respect of these claims. Having addressed them in the interim report, however, we do not see what interest would now be served by excising our conclusions from the final report. To the contrary, their inclusion could prove of some utility depending the course of any possible appeal. In response to comments by Korea, we have also made certain minor changes to paragraphs 6.3, 6.22, 6.24, 6.27, 6.51, 6.66, 6.68, 6.111 and 6.120. Additional typographical and other minor changes were made to paragraphs 1.7, 6.33, 6.68, 6.69, 6.79, 6.84, 6.97, 6.105, 6.106, 6.119, 6.125 and 7.8. VI. FINDINGS A. GENERAL REMARKS In reviewing the United States' final measures imposing the anti-dumping duties at issue in this dispute, we keep in mind the applicable principles concerning the burden of proof and the standard of review in disputes under the AD Agreement. In ϲʹ dispute settlement proceedings, the burden of proof with respect to a particular claim or defense rests with the party that asserts such claim or defence. In the context of the present dispute, this means that Korea is obliged to present a prima facie case of violation of the relevant Articlesof the ADAgreement. In this regard, the Appellate Body has stated that ". . . a prima facie case is one which, in the absence of effective refutation by the defending party, requires a panel, as a matter of law, to rule in favour of the complaining party presenting the prima facie case". Thus, where Korea presents a prima facie case in respect of a claim, it is for the United States to provide an "effective refutation" of Korea's evidence and arguments, by submitting its own evidence and arguments in support of the assertion that it has complied with its obligations under the ADAgreement. Assuming evidence and arguments are presented on both sides, it is then our task to weigh and assess that evidence and those arguments in order to determine whether Korea has established that the United States acted inconsistently with its obligations under the ADAgreement. Article17.6of the ADAgreement sets out a special standard of review for disputes arising under that Agreement. With regard to factual issues, Article17.6(i) provides: "(i) in its assessment of the facts of the matter, the panel shall determine whether the authorities' establishment of the facts was proper and whether their evaluation of those facts was unbiased and objective. If the establishment of the facts was proper and the evaluation was unbiased and objective, even though the panel might have reached a different conclusion, the evaluation shall not be overturned;" Assuming that we conclude that the establishment of the facts with regard to a particular claim in this case was proper, we then may consider whether, based on the evidence before the DOC at the time of the determination, an unbiased and objective investigating authority evaluating that evidence could have reached the conclusions that the DOC reached on the matter in question. With respect to questions of the interpretation of the ADAgreement, Article17.6(ii) provides: "(ii) the panel shall interpret the relevant provisions of the Agreement in accordance with customary rules of interpretation of public international law. Where the panel finds that a relevant provision of the Agreement admits of more than one permissible interpretation, the panel shall find the authorities' measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations." Thus, in considering those aspects of the United States' determinations which stand or fall depending on the interpretation of the ADAgreement itself rather than or in addition to the analysis of facts, we first interpret the provisions the ADAgreement. As the Appellate Body has repeatedly stated, panels are to consider the interpretation of the ϲʹ Agreements, including the ADAgreement, in accordance with the principles set out in the Vienna Convention on the Law of Treaties (Vienna Convention). Thus, we look to the ordinary meaning of the provision in question, in its context, and in light of its object and purpose. Finally, we may consider the preparatory work (the negotiating history) of the provision, should this be necessary or appropriate in light of the conclusions we reach based on the text of the provision. We then evaluate whether the United States' interpretation is one that is "permissible" in light of the customary rules of interpretation of international law. B. ALLEGED "DOUBLE CONVERSION" OF CERTAIN HOME MARKET SALES PRICES 1. Factual background The claims addressed in this section of our report relate to the treatment by the DOC of certain sales by POSCO in the Korean market in both the Plate and Sheet investigations. These sales, which we will refer to as "local sales", are ordered and invoiced in US dollars, but are paid in Korean won. Some shipping invoices and all tax invoices relating to these sales also reflect a won price, using a calculation based upon the Korean Exchange Bank's exchange rate as of the date of invoice. The won price is recorded in POSCO's accounting records. As local sales are made pursuant to letters of credit, payment is made some months after invoice date; the parties disagree as to what the record in the two investigations shows with respect to the basis for the won amounts actually paid. POSCO reported local sales in won in its initial questionnaire responses (the questionnaire response in the Sheet investigation also reported dollar amounts "for ease of verification"). In subsequent supplemental questionnaire responses, however, POSCO modified its home market sales listings to report local sales in dollars. In legal briefs submitted to the DOC in both investigations, POSCO argued that the DOC should calculate normal value on the basis of the US dollar price at which local sales were invoiced. The petitioners disagreed. In its final determinations in the Plate and Sheet investigations, the DOC used as the basis for its calculation of the normal value the won prices recorded in POSCO's accounting records. The DOC converted these won prices to US dollars at the exchange rate prevailing on the date of certain US sales. 2. Claims under Article 2.4.1 of the AD Agreement (a) Arguments of the parties Korea considers that the DOC performed a "double conversion" of local sales by converting the dollar amounts appearing in the invoices into won at one exchange rate and converting them back into dollars at a different exchange rate. In Korea's view, Article 2.4.1 of the AD Agreement permits currency conversions only when such conversions are "required", i.e., when there is no other reasonable alternative. Korea considers that the "double conversion" by the DOC was unnecessary, as it could simply have used the original dollar prices in the invoices. Accordingly, the DOC's "double conversion" of local sales departed from the requirement of Article 2.4.1 that currency conversions be performed only when required.  The United States argues that the phrase "[w]hen the comparison under paragraph 4 requires a conversion of currencies" in Article 2.4.1 establishes the condition under which the rules that follow will apply, but it cannot be read to require that currency conversions be avoided in any particular circumstances, particularly where the transaction occurs in a foreign currency. In any event, the United States considers that it made no "double conversion" of local sales in these investigations. Rather, the DOC made a proper factual determination that the local sales were won transactions as reported by POSCO in its questionnaire responses. The DOC simply converted those won amounts into dollars consistent with the methodology established in Article 2.4.1. (b) Evaluation by the Panel Does Article 2.4.1 prohibit unnecessary currency conversions? Korea alleges that the DOC performed an unnecessary "double conversion" of certain home market sales prices, in violation of Article 2.4.1, which in Korea's view permits the conversion of currencies only when such conversions are "required". As a threshold matter, therefore, we must consider whether Article 2.4.1 permits the conversion of currencies only when required or, expressed another way, whether Article 2.4.1 prohibits unnecessary currency conversions. Our starting point in respect of this issue is of course the text of the relevant provisions of the AD Agreement. Article 2.4.1 provides that: "When the comparison under paragraph 4 requires a conversion of currencies, such conversion should be made using the rate of exchange on the date of sale8, provided that when a sale of foreign currency on forward markets is directly linked to the export sale involved, the rate of exchange in the forward sale shall be used. Fluctuations in exchange rates shall be ignored and in an investigation the authorities shall allow exporters at least 60 days to have adjusted their export prices to reflect sustained movements in exchange rates during the period of investigation. (emphasis added). __________________________________________ 8[Footnote omitted] Article 2.4.1 sets forth rules with respect to the conversion of currencies to be applied "[w]hen the comparison under paragraph 4 requires a conversion of currencies . . . ." While Article2.4.1 does not spell out the precise circumstances under which currency conversions are to be avoided, we consider that it does establish a general and in our view, self-evident - principle that currency conversions are permitted only where they are required in order to effect a comparison between the export price and the normal value. We note that a contrary interpretation would call into doubt the utility of the introductory clause of Article 2.4.1. If the drafters had not intended to establish a rule that currency conversions be performed only when required, they could easily have drafted Article2.4.1 to provide that "Currency conversions should be made using the rate of exchange on the date of sale ." Further, such an interpretation could result in the unusual situation where currency conversions that were required in order to perform a comparison under Article 2.4 would be subject to the rules set forth in Article 2.4.1, but unnecessary currency conversions could be performed without regard to the rules of Article 2.4.1. We need not here arrive at any general understanding as to when currency conversions are or are not required within the meaning of Article 2.4.1, nor do we express any view regarding Korea's "reasonable alternative" test. Rather, we consider it sufficient to conclude, for the purposes of this dispute, that currency conversion is not "required", and would thus not be permissible under Article2.4.1, in instances where the prices being compared are already in the same currency. We do not understand the United States to contest that it would be inconsistent with Article2.4.1 to perform a currency conversion in a case where the prices to be compared were already in the same currency. While the United States initially disputed that Article 2.4.1 prohibits unnecessary currency conversions, it subsequently appears to have acknowledged that Article 2.4.1 would not permit currency conversions in a case where the sales to be compared were already in the same currency. Thus, the United States explained at the second meeting of the Panel that: "A review of the submissions confirms that there is no real disagreement over the meaning of the relevant provisions of Article 2.4.1. Korea and the United States agree that if the sales used to establish normal value are in a different currency than the export price sales, conversion at the rate in effect on the date of sale was appropriate, and if the sales are in the same currency, no conversion is necessary or appropriate." (emphasis added) Did the United States properly determine that the local sales were made in won? As discussed above, Korea claims that the DOC unnecessarily converted certain dollar-denominated sales in the Korean market into won at one exchange rate and converted them back into dollars in order to compare them to dollar-denominated export sales at a different exchange rate. It follows from our discussion in the previous section of this Report that such an unnecessary "double conversion" would be inconsistent with Article 2.4.1 of the AD Agreement. The question remains whether the DOC in fact made such an impermissible "double conversion". The United States considers that the sales in question were properly found to have been made in won, such that a conversion to dollars was necessary in order to compare those prices to dollar-denominated export prices. In other words, the United States denies that it performed a "double conversion" in respect of local sales. This issue is a critical one to our inquiry, as the existence of a "double conversion" is a necessary predicate to Korea's claim. To the extent that Korea is correct, the United States acted in a manner inconsistent with Article 2.4.1; to the extent that the United States is correct, then the factual predicate underlying Korea's claim is without basis and Korea's claim must fail. (i) standard of review In examining this issue, we must first consider the issue of the proper standard of review to be applied in reviewing the DOC's determination. The United States considers that whether the sales in question were in dollars or won is a question of fact. Accordingly, the Panel should assess pursuant to Article 17.6(i) whether the DOC's establishment of the facts was proper and whether its evaluation of those facts was unbiased and objective. Korea by contrast argues that the determination in question was not a factual determination, because there were no facts in dispute. As noted in Section VI.A, above, Article 17.6 sets forth the standard of review to be applied by a panel when examining a matter under the AD Agreement. It is evident from the text of Article 17.6 that the standard of review to be applied by panels depends upon the nature of the question before it. The relevant standard to be applied when considering questions of law, i.e., the interpretation of the AD Agreement, is set forth in Article 17.6(ii). The standard to be applied in reviewing determinations of an investigating authority in respect to questions of fact is set forth in Article 17.6(i). Thus, the question before us is whether that determination is one of fact and thus subject to the standard of review set forth in Article 17.6(i). Korea's view appears to be that Article 17.6(i) applies only in respect of the establishment of certain objectively-ascertainable underlying facts, e.g., did the invoices express the sales values in terms of dollars or won, in what currency payment was made, etc. We consider that this interpretation does not however coincide with the language of Article 17.6(i). That Article speaks not only to the establishment of the facts, but also to their evaluation. Therefore, the Panel must check not merely whether the national authorities have properly established the relevant facts but also the value or weight attached to those facts and whether this was done in an unbiased and objective manner. This concerns the according of a certain weight to the facts in their relation to each other; it is not a legal evaluation. In this case, it is generally true that the underlying facts on the basis of which the DOC considered whether the sales in question were made in dollars or won are not disputed (although we will see that there is substantial disagreement between the parties about one key underlying factual issue). We consider, however, that the DOC's determination that the sales in question were made in won was a factual determination in as much as it represents a determination made on the basis of the evaluation of certain facts and does not involve the interpretation of provisions of the AD Agreement. In light of the above, we consider that the task before us is to examine whether an unbiased and objective investigating authority evaluating the evidence before the DOC in the Plate and Sheet investigations could properly have determined that the local sales in question were made in won rather than in dollars. Given the nature of the arguments before us, we recall that pursuant to Article 17.5(ii) of the AD Agreement we are to examine the matter based upon "the facts made available in conformity with appropriate domestic procedures to the authorities of the importing Member". Finally, we note that this dispute relates to two separate investigations, and that the facts before the DOC differ. Thus we will review the determinations of the DOC in these two investigations separately. (ii) The Plate Investigation In order to evaluate whether an unbiased and objective investigating authority could properly have determined that the local sales in the Plate investigation were made in won rather than dollars, we must first consider in detail the determination of the DOC and the evidence that was before the DOC at the time it made its determination. The arguments of the parties and conclusions of the DOC on the issue of local sales are addressed in detail in the final determination in the Plate investigation. We will quote from this determination at length: "Comment 10. Local letter of credit sales. . . . . [R]espondent maintains that its calculation of normal value should be based on the US dollar price at which the local sales were invoiced. Respondent states that local customers pay POSCO in Korean won based on the US dollar invoiced price. Moreover, respondent notes that it reported the US dollar price for local sales consistent with the Department's requirement and practice. Respondent explains that in Fresh Cut Roses from Colombia, the respondent also invoiced home market sales in US dollars but like POSCO, received payment from the customer in the home market currency, pesos in that case. . . . . POSCO states that in this case, the Department accepted the US prices for the calculation of the normal value . . . . Respondent contends that not using the US dollar value in its calculation of normal value in this investigation could have a potentially significant distortive effect on the margin. [Petitioners] object to POSCO's request to use nominal dollar prices for home market customers. Instead, they recommend that the Department use the won prices that the customers actually pay. They argue that it would be bad policy to use nominal prices in the margin analysis. Further, they continue that even if the Department were to find that in some instances use of the nominal price is warranted, the facts in this case do not support such a methodology. Petitioners allege that the Fresh Cut Roses from Colombia case cited by POSCO differs from this case in several important respects. Specifically, in Fresh Cut Roses from Colombia: (a) the effect of inflation in Colombia was being taken into account in the Department's cost of production analysis and costs were being converted to dollars; (b) the Department stated that it had verified that the payment in pesos had reflected the prevailing dollar/peso exchange rate at the time of payment; and (c) all home market sales were invoiced in dollars and paid in pesos . . . . In contrast, they note that the Department did not verify whether the exchange rates used were proper. Finally, they note that in this case, home market sales were also quoted in won. Therefore, because the Department has not accounted for inflation and did not verify the dollar won exchange rates used, petitioners argue that POSCO's dollar prices are meaningless because POSCO's customers pay in won. Department's Position. . . . [W]e disagree with Respondent that the Department should use the US dollar invoiced price for the purposes of calculating normal value. Based upon the facts of the record, as discussed below, we find that it is more appropriate to use the won price in which the customer pays. For HM sale number 1, POSCO provided an internal document which showed the exchange rates used by POSCO to convert US dollar prices into Korean won prices for the month of November 1997. . . . . The record indicates that although customers are invoiced in US dollars (for HM Channel 2 sales the shipping invoice also shows the won price), the customer pays in won not US dollars, and the sales value of the merchandise is charged to the sales ledger in won, based on the aforementioned exchange rate. . . . Moreover, a comparison of the internal exchange rate used by POSCO to the market exchange rate used by the Department shows that the two exchange rates are quite dissimilar (See Analysis Memorandum). We note that this is in contrast to Fresh Cut Roses from Colombia in which the Department verified that the payment in pesos reflected the market exchange rate at the date of payment . . . . Therefore, for the final determination, we have used the won price for home market sales. On the basis of this discussion, we can perceive the core issue faced by the DOC and the manner in which it resolved it. It will be recalled that POSCO initially reported local sales to be won sales but subsequently reported them in dollars. In considering how to treat these sales, the DOC had before it evidence that local sales were ordered and invoiced in dollars (and, on some invoices, also in won) but paid in won. The question it faced was whether it should consider the sale to be a sale in dollars in the amount shown on the invoice (such that no currency conversion would be required) or a sale in won based upon the amount charged to the sales ledger. The DOC concluded that use of the won amount was appropriate because the customers paid in won, the merchandise was charged to the sales ledger in won, and the exchange rate used by POSCO to calculate the won equivalent of the dollar amount was dissimilar to the "market" exchange rate used by the DOC. The heart of Korea's argument that these sales should have been treated as dollar rather than won sales is clearly stated in its first submission: "As discussed in the Statement of Facts, POSCO had a significant quantity of "local sales" of both SSPC and SSSS during the investigation periods. These "local sales" were negotiated and invoiced in US dollars, but the payments were made in Korean won. Significantly, to ensure that payment accurately reflected the actual dollar value of the sales, the amount of the Korean won payment for these "local sales" was not fixed at the time of the sales negotiation or at the time of invoice. Instead, the payment in Korean won was determined by applying the market exchange rate (as announced by the official Korean Exchange Bank) for the date of [payment] to the US dollar amount shown on the invoice. Thus, the economic reality is that the final payment for these sales is determined by the US dollar amount shown on the invoice, and not by the Korean won amount recorded in POSCO's accounting records at the time of invoice. In economic terms these "local sales" are equivalent to sales that are invoiced and paid in US dollars.[footnote omitted] This argument that the transactions in economic terms were dollar transactions because the amount of Korean won actually paid was established by converting the dollar amount invoiced by the exchange rate at the time of payment, rather that at the time of invoice is repeated frequently by Korea in its submissions. We consider that the reasoning advanced by Korea is compelling. The issue in the Plate investigation whether the local sales in question were dollar or won sales arose because the invoices were expressed in dollars but the payments were made in won. Thus, if the amount of won actually paid was based on the dollar amount identified in the invoice at the market rate of exchange on the date of payment (which, because the local sales in question were letter of credit sales, came some months after the date of invoice), then the controlling amount would be the dollar amount appearing in the invoice. This was in fact a key element in the reasoning of the DOC in Fresh Cut Roses from Colombia, an anti-dumping investigation cited by both the petitioners and respondents in the Plate investigation and discussed by the DOC in its final determination, as quoted above. In that case, the DOC "established that respondent invoiced its home market customers in US dollars and received the equivalent value in pesos at the date of payment".(emphasis added) The DOC "found it appropriate that respondent's home market sales were reported in dollar value since the dollar value was the currency in which the sales transactions were made. Furthermore, since home market sales were transacted in dollars and the payments made, although in pesos, were based on constant dollar value, there is no distortion." Korea's argument, however, is dependent upon a particular factual predicate: that the amount of won actually paid in respect of local sales was determined by applying the market rate of exchange at the time of payment to the dollar amount stated in the invoice. Korea asserts, and the United States does not appear now to dispute, that the amounts paid were established based upon the application as of the date of payment of exchange rates established by the Korean Exchange Bank. The DOC was not however aware at the time of its final determination in the Plate investigation that this was the case. Rather, it is evident to us that the DOC considered at the time of its final determination that the actual won amount paid was the amount charged to the sales ledger, which in turn was derived by converting the dollar amount invoiced to won at the Korean Exchange Bank exchange rate prevailing at the time of invoice, and that there was no evidence in the record suggesting to the contrary. In response to a question from the Panel, Korea acknowledges that "it is unaware of any evidence in the record of the Plate case that indicates that POSCO specifically informed the DOC that the amount paid in won differed from the converted won amounts shown in the invoice." It contends however that, once POSCO had informed the DOC that local sales were denominated in dollars, the burden was on the DOC to ask for the necessary information. We consider this argument to be unpersuasive. This is not a case where the DOC did not know the actual won amounts paid and did not bother to ask. Rather, POSCO in its initial questionnaire reported local sales in won, and the amount reported was the invoiced amount rather than the in most cases probably substantially higher amount actually paid. Even after POSCO reported dollar prices for the local sales and argued that those dollar prices should be used in place of the won prices, it never corrected the initial misimpression that the won amount reported was the amount actually paid. Finally, the DOC did not become aware at verification that the won amounts paid might be different from the won amounts charged to the sales ledger because customers paid on a rolling basis such that verification of payments on an individual basis was not possible. We now turn to a review of the DOC's determination on this issue in light of the facts as understood by the DOC on the basis of the record before it. As the DOC explained in its determination, it had verified certain local sales. For these sales, while the customers were invoiced in dollars (and sometimes also in won), payment was made in won, and the value of the merchandise was charged to the sales ledger in won, based upon the exchange rate prevailing on the date of invoice. The Plate final analysis memorandum that underlies the final determination indicates that the date of payment for these sales however was some months later. In other words, the record before the DOC indicated that the won amount the customer would pay on a given date was fixed some months earlier based upon the won/dollar exchange rate prevailing on the earlier date, irrespective of subsequent changes in the dollar/won exchange rate. The DOC's determination then notes that the exchange rate used by POSCO on the earlier date did not correspond to the market exchange rate used by the DOC. Again, the Plate final analysis memorandum indicates that the DOC was comparing POSCO's exchange rate on the date of invoice both to the DOC's exchange rate on that date and to its exchange rate on the date of payment. The determination notes that "this is in contrast to Fresh Cut Roses from Colombia in which the Department verified that the payment in pesos reflected the market exchange rate at the date of payment" (emphasis added). In short, the DOC concluded that local sales were made in won because the amount to be paid was fixed in won on the date of invoice irrespective of subsequent movements in the won/dollar exchange rate between the date of invoice and the date of payment. In challenging the DOC's determination, Korea emphasizes an admitted error by the DOC regarding benchmark exchange rates. Specifically, although the DOC stated that it was comparing POSCO's internal exchange rates to US Federal Reserve exchange rates, it mistakenly compared POSCO's internal exchange rates which were in fact the Korean Exchange Bank's official rates to certain adjusted exchange rates prepared by the DOC on the basis of three-month rolling averages. This error however does not detract from the essential fact as perceived by the DOC at the time it made its determination based upon the record before it that the won price was determined as of the date of invoice and remained fixed irrespective of any subsequent changes in the won/dollar exchange rate between the date of invoice and the date of payment. Korea also has emphasized that the order sheets for local sales, which were verified by the DOC, reflect a dollar amount but no won amount. Korea contends that this supports its view that local sales were negotiated as well as invoiced in dollars. While the fact that order sheets showed sales in dollars and not in won might be a relevant consideration in other circumstances, the fact remains that based on the record as placed before the DOC a won amount was fixed at the date of invoice and this won amount was controlling as to the amount to be paid several months later. We recall in any event that in this investigation the DOC determined that the date of invoice rather than the date of order confirmation was the "date of sale" because it was at the time of invoice that POSCO established the material terms of sale. In support of this view, POSCO had argued that "all POSCO's sales were subject to change between order and shipment".  Thus, the fact that the orders for local sales were expressed in dollars is in our view less than conclusive as to whether the sales were won or dollar sales. For the foregoing reasons, we conclude that an unbiased and objective investigating authority evaluating the evidence before the DOC in the Plate investigation could properly have determined that the local sales in question were made in won. (iii) The Sheet Investigation We now consider whether an unbiased and objective investigating authority evaluating the evidence before the DOC in the Sheet investigation could properly have determined that the local sales were made in won rather than dollars. The arguments of the parties and the conclusions of the DOC are set forth in some detail in the DOC's final determination: "Respondent argues that the Department should calculate normal value for "local" sales made in the home market based on the US dollar price at which those sales were invoiced. Local sales are sales of subject merchandise to home market customers who will further process the merchandise into non-subject products for export. Respondent maintains that although POSCO is paid in Korean won, the amount of payment is based on the US dollar invoiced price. Respondent contends that because POSCO's local sales are denominated and invoiced in US dollars, the invoiced prices do not require conversion to won for US comparison purposes, and that the conversion of the US dollar price to won and then back to dollars is not only unnecessary, but would significantly distort the margin. Respondent cites to . . . Roses from Columbia [sic] . . ., noting that the Department agreed and accepted the US prices for sales invoiced in US dollars, notwithstanding that the respondent received payment from the customer in the home market currency. Respondent argues that in the final determination in SSPC from Korea, the Department's concern was that POSCO's customers paid for sales in won, the sales amounts were recorded in won in POSCO's accounting records, and that the exchange rates utilized by POSCO to determine the won equivalents were different from those exchange rates used by the Department. Respondent contends that the fact that payment is made in won is irrelevant, since both the contract and the invoice reflect a US dollar price, and that sales are converted to won for the purposes of consistency with POSCO's accounting records, which are maintained in won. Petitioners claim that the use of the dollar value for local sales in the home market would be inappropriate, given that POSCO receives payment in won. Petitioners distinguish this case from Roses from Columbia [sic] by noting that in that case, the Department was factoring in the effects of inflation in the cost-of-production analysis, costs were converted into dollars; the payments in local currencies had reflected the prevailing exchange rate, and all home market sales had been invoiced in dollars and paid in pesos. Petitioners further contend that in Roses from Columbia [sic], the decision to use US dollar-based prices was presumably made for convenience and consistency, as costs were also dollar-denominated. Petitioners further note that the disparity between the exchange rates reflected in the price conversion and the rates used by the Department is too great to reconcile, and is in contrast to the situation in Roses from Columbia [sic]. Petitioners argue that the use of a constant index such as the dollar is used by the Department in the face of currency depreciation or significant deflation, and should not be applied selectively to reduce a dumping margin. Department's position. We agree with petitioners. First, we believe that respondent's reliance on Roses from Columbia [sic] is misplaced. In that case, all prices and costs, both in the home market and in the U.S., were dollar denominated, and the exchange rates reflected in the dollar to peso conversion coincided with the exchange rates used by the Department. Given these facts, the use of dollar-denominated prices provided consistency throughout the Department's analysis in that case. Neither of these facts are present in the instant case. At verification, we found that local sales are the only sales made in the home market that are expressly linked to a dollar value, but that the sale is ultimately a won-denominated sale. Additionally, the vast majority of the costs incurred for home market and US sales are denominated and paid by POSCO in won. . . . Finally, as we note above, there is a disparity between exchange rates reflected in POSCO's accounting records and those used by the Department . . . . Although the sales are linked to a dollar value, there is no question that the respondent pays in won, and therefore, the use of the dollar-denominated gross unit price for local letter of credit sales in the home market is unwarranted. In addition, in recent cases involving POSCO (e.g., SSPC from Korea and Carbon Steel from Korea 3rd Review), the Department has used the won-denominated price for local letter of credit sales in the home market because we found that, as in the instant case, the local sales were paid in won and recorded in POSCO's accounting records in won, and the exchange rates used by POSCO were dissimilar from those used by the Department. . . (emphasis added). On its face, the issue before the DOC in the Sheet investigation was similar to that in the Plate investigation. As in the Plate investigation, the issue before the DOC in Sheet was whether it should use the dollar-invoiced price for local sales or whether it should use the won price which was charged to the sales ledger and reflected in the tax and certain shipping invoices. There was however in our view a significant factual difference between the two investigations. As previously discussed, the record in the Plate investigation suggested that the won prices initially reported by POSCO represented the won amounts actually paid. In the Sheet investigation, on the other hand, the DOC verified, and recorded in its Verification Report, that the won amounts reported by POSCO were not in fact the amounts actually paid: "Observation [xxxx](HM#1) This observation represented a local sale from POSCO to [xxxxxx], which involved a recognized loss on foreign currency exchange. We tied the individual sale from POSCO's order sheet to a cumulative shipping list/invoice and tax invoice. As local sales are dollar-denominated, and paid in won equivalents, POSCO records the sale in its won equivalent, reflected in the tax invoice to the customer. On payment, the exchange rate is determined based on the rates given to POSCO by Korean Exchange Bank for Inward Remittance. For this sale, POSCO recognized an exchange rate loss of [xxxx]. This difference between the recorded sales amount and payment amount is reflected in the "Foreign Exchange Currency Loss of Transaction for Local Sales" account. We examined all journal entries, ledgers, bank documents, and publicly available information (re: Korea Exchange Bank, Foreign Exchange Rates), and found no discrepancies." On the basis of this Verification Report, it seems clear to us that the DOC in the Sheet investigation was fully aware that the won amounts reported by POSCO in respect of local sales were in fact different from the won amounts actually paid. The United States argues that "the only suggestion that [the invoiced and paid] amounts differed came late in the proceeding amid conflicting information". It contends that POSCO only reported the invoice price and neither informed the United States nor claimed that the amount paid differed from the amount invoiced. We note however that, unlike in the Plate investigation, POSCO in the Sheet investigation reported dollar amounts ("for ease of verification") in addition to won amounts in its initial questionnaire response. This triggered a supplemental questionnaire from the DOC in response to which POSCO provided information suggesting that the won price paid was not the same as that invoiced. More importantly, the sales verification report quoted above was dated 6 April 1999 and related to a verification performed in February. It thus predated the final determination in the Sheet investigation by several months. Moreover, the Verification Report quoted above does not suggest a hint of doubt about the manner in which local sales were handled. A page extracted from POSCO's accounts and attached to the Verification Report listed dozens of exchange rate losses related to local sales. At this point, therefore, the record clearly showed that the amount of won actually paid in the case of local sales differed from the amount initially reported by POSCO and appearing on POSCO's tax invoices. In light of the foregoing, it is difficult to understand the basis for the DOC's statement, in its final determination, that, "[a]t verification, we found that local sales are the only sales made in the home market that are expressly linked to a dollar value, but that the sale is ultimately a won-denominated sale." Leaving aside that we can locate no such "finding" in the Verification Report, we are convinced that an unbiased and objective investigating authority could not so find on the basis of the facts before it in the Sheet case. As we have seen, it was clear from the record in the Sheet investigation that the won price which the DOC considered to be the price in which local sales were denominated was in no sense controlling. Rather, the won amount ultimately paid would be determined by converting the dollar amount appearing on the invoice into won at the rate of exchange prevailing on the date of payment. Thus, the dollar amount appearing on the invoices was controlling, while the won equivalent appearing on the tax and certain shipping invoices and noted in POSCO's accounts played no role in determining the amount the purchaser ultimately would pay. As explained above, we agree with Korea that there is no logical basis under these circumstances to consider that the sales in question were denominated in won. In its determination, and before this Panel, the United States has emphasized that there were differences between the exchange rates used by POSCO and the market exchange rates relied upon by the DOC. We agree that the DOC might have been entitled to disregard the dollar prices stated in the invoices if the won amounts actually paid had been based on fictitious or inaccurate exchange rates, as this would have indicated that the economic value of the transactions was not in fact determined in dollars at all. In this case, however, the DOC verified, and the United States does not now dispute, that the "internal exchange rates" used by POSCO were in fact the official exchange rates published by the Korea Exchange Bank. Further, we consider that the differences between the Korea Exchange Bank rates and the Federal Reserve rates cited in the Sheet investigation are not the result of fictitious or inaccurate exchange rates, but merely reflect the existence of a 14-hour time difference between New York and Seoul. For the foregoing reasons, we conclude that an unbiased and objective investigating authority evaluating the evidence before the DOC in the Sheet investigation could not properly have determined that the local sales in question were made in won. Did the United States perform unnecessary currency conversions in violation of Article 2.4.1 of the AD Agreement? As discussed above, we have concluded that the DOC did not err in considering that the local sales in question in the Plate case were denominated in won rather than in dollars. Therefore the factual predicate underlying Korea's claim under Article 2.4.1 that the DOC performed an unnecessary "double conversion" in respect of those sales is without foundation. To the contrary, having properly treated the sales in question as having been made in won, the DOC made only a single conversion, from won to dollars. Accordingly, we conclude that, in the Plate investigation, the United States did not act inconsistently with Article 2.4.1. With respect to the Sheet investigation, we have concluded that the DOC's factual determination that the local sales in question were won-denominated sales was in error. In our view, the DOC improperly treated sales that were denominated in dollars as won sales. We have further concluded that it would be inconsistent with Article 2.4.1 to undertake currency conversions in instances where the prices being compared were in the same currency. It being undisputed that in this case the export prices in question were also in dollars, we conclude that, in the Sheet investigation, the United States acted inconsistently with Article 2.4.1. Claims under Article 2.4 of the AD Agreement ("fair comparison") Arguments of the parties Korea asserts that the "double conversion" of local sales from dollars to won and back to dollars was inconsistent with a "fair comparison" requirement in the chapeau of Article 2.4. In Korea's view, the conversion of these sales from dollars to won at the exchange rate prevailing as of the date of the home market sale, and their re-conversion from won to dollars at a different exchange rate prevailing as of the date of a corresponding US sale, unfairly penalised POSCO for changes in the exchange rate between these two dates that were beyond its control. Korea further contends that as a result of this double conversion at different rates, the United States compared the export price to an inflated normal value. The United States contends that it made a proper factual determination that the local sales were made in won, and that it made a single conversion of those won sales to dollars. Evaluation by the Panel Although Korea expresses its fair comparison claim in slightly different ways at different points in its submissions, it is clear that this claim, like Korea's claim under Article 2.4.1, relies upon the existence of a "double conversion" i.e., the conversion of dollar-denominated prices into won at one exchange rate and the conversion back into dollars at a different exchange rate. We have concluded that, in the Plate investigation, no such "double conversion" occurred, because the DOC properly determined that the sales in question were denominated in won. Accordingly, we find that the United States did not act inconsistently with any "fair comparison" requirement under Article 2.4 in the Plate investigation. In respect of the Sheet investigation, we note that this Panel "need only address those claims which must be addressed in order to resolve the matter in issue in this dispute". Having concluded that the United States acted inconsistently with its specific obligations with respect to currency conversion under Article 2.4.1 in the Sheet investigation by performing unnecessary currency conversions in respect of local sales, we do not consider it necessary to examine Korea's claim that those double conversions breached a more general "fair comparison" requirement under Article 2.4 of the AD Agreement. 4. Claims under Article X:3(a) of GATT 1994 and Article 12 of the AD Agreement Arguments of the parties Korea contends that the double conversion methodology employed by the DOC was unreasonable and departs from established practice without adequate explanation, and is thus inconsistent with the uniform and reasonable administration of the anti-dumping laws required by Article X:3(a) of GATT 1994. Korea argues that the double conversion of local sales in these investigations was an unprecedented departure from the established policy of the DOC as reflected in various investigations including Roses from Colombia to accept charges in the currency in which they are made. In particular, the factual distinctions made by the DOC between the investigations at issue in this dispute and Roses do not withstand scrutiny. In addition, the United States acted unreasonably by penalizing exporters for differences between official Korean and US exchange rates that existed because of a time difference between Korea and New York. Korea further argues that, by providing incorrect and irrelevant arguments to justify its departure from the standard methodology, the United States failed to provide the statement of reasons required by Article 12.2 of the ADAgreement. In the view of the United States, Korea in effect argues that Article X provides for panel review of the consistency of any action by a Member with its own domestic law, regulation or practice. However, the task of a panel under the DSU is to review the consistency of a Member's actions with a covered agreement. Further, as observed by the Appellate Body in EC - Bananas, Article X:3 does not address the consistency of particular administrative rulings, but rather the administration of such rulings. In this dispute, Korea's complaint focuses on the anti-dumping rulings in the Plate and Sheet investigations themselves, and not on the administration of those rulings. In any event, the United States disputes that Roses from Colombia reflects US practice. Roses was a single case exception to US practice, not the rule. The facts in these investigations differ significantly from those in Roses, and no subsequent case has followed the position taken in Roses. Evaluation by the Panel (i) The Plate investigation Article X:3(a) of the GATT 1994 provides as follows: "Each contracting party shall administer in a uniform, impartial and reasonable manner all its laws, regulations, decisions and rulings of the kind described in paragraph 1 of this Article." In considering Korea's claim under Article X:3(a), we first note the contention of the UnitedStates that Korea is challenging the DOC's anti-dumping rulings in these investigations while ArticleX:3(a) permits challenges only to the administration of those rulings. It is of course clear from the text of Article X:3(a) that that provision relates to the administration of laws, regulations, decisions and rulings, and not to the laws, regulations, decisions and rulings themselves. Korea's claim however is not that the DOC's anti-dumping determinations were rulings which the UnitedStates administered in a manner inconsistent with Article X:3(a), but rather that the UnitedStates administered its anti-dumping laws and regulations in a manner inconsistent with that Article. Thus, we must consider whether the alleged departure of the United States from alleged established policy in these investigations represents a breach of the United States' obligation to administer those laws and regulations in a uniform and reasonable manner. We note at the outset of our examination that we have grave doubts as to whether ArticleX:3(a) can or should be used in the manner advocated by Korea. As the United States correctly points out, the ϲʹ dispute settlement system "serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements". It was not in our view intended to function as a mechanism to test the consistency of a Member's particular decisions or rulings with the Member's own domestic law and practice; that is a function reserved for each Member's domestic judicial system, and a function ϲʹ panels would be particularly ill-suited to perform. An incautious adoption of the approach advocated by Korea could however effectively convert every claim that an action is inconsistent with domestic law or practice into a claim under the ϲʹ Agreement. In any event, we do not consider that the DOC in this investigation committed the "unprecedented departure" from "established policy" alleged by Korea such that its behaviour was either non-uniform or unreasonable. In our view, the requirement of uniform administration of laws and regulations must be understood to mean uniformity of treatment in respect of persons similarly situated; it cannot be understood to require identical results where relevant facts differ. Nor do we consider that the requirement of reasonable administration of laws and regulations is violated merely because, in the administration of those laws and regulations, different conclusions were reached based upon differences in the relevant facts. Applying these considerations to the case at hand, we recall that the core issue in the Plate investigation was the factual question whether local sales were denominated in dollars or in won. The resolution of this issue obviously depended heavily on the facts as determined by the DOC. Thus, assuming that Roses from Colombia reflected an "established policy" by the United States, we consider that the United States properly distinguished the Plate investigation from Roses as a factual matter. Our reasons for this conclusion are stated in detail in paragraphs  REF _Ref497714154 \n \h 6.21 -  REF _Ref497714178 \n \h 6.31 of this Report. Finally, while we recognize that the exchange rates used by POSCO as of date of sale differed from those used by the DOC for the date of sale both as a result of a difference in time zones and as a result of errors in the selection of a comparable exchange rate by the DOC, the DOC understood on the basis of the record before it that the amount of payment was determined on the basis of the exchange rate on the date of sale. This difference would have existed even if the DOC had used the same Korean Exchange Bank rates as those relied upon by POSCO. Finally, we note Korea's view that the United States failed to provide a statement of reasons for its departure from Roses as required by Article 12.2 of the AD Agreement. We recall in this respect that Article 12.2 requires a Member in its preliminary and final determinations to set forth "in sufficient detail the findings and conclusions reached on all issues of fact and law considered material by the investigating authorities" and to "refer to the matters of fact and law which have led to arguments being accepted or rejected", including a "full explanation of the reasons for the methodology used in the establishment and comparison of the export price and the normal value under Article 2." In our view, Korea has not asserted or established that the United States failed to provide the statement of reasons for its actions required by Article 12.2. Rather, Korea challenges the substantive adequacy of that statement of reasons. We have however already addressed this substantive issue at length above. For the foregoing reasons, we conclude that the United States did not act inconsistently with Article X:3(a) of GATT 1994 and Article 12.2 of the AD Agreement in respect of its treatment of "local sales". The Sheet investigation In respect of the Sheet investigation, we note that this Panel "need only address those claims which must be addressed in order to resolve the matter in issue in this dispute". Having concluded that the United States acted inconsistently with its specific obligations with respect to currency conversion under Article 2.4.1 in the Sheet investigation by performing unnecessary currency conversions in respect of local sales, we do not consider it necessary to examine Korea's claim that those double conversions breached the requirements of Article X:3(a) of GATT 1994 and Article 12 of the AD Agreement. C. TREATMENT OF UNPAID SALES 1. Factual background The claims addressed in this section of our report relate to the treatment by the DOC of sales to a company that subsequently declared bankruptcy. During the period of investigation in both the Plate and Sheet investigations, POSCO made a significant number of sales to a US customer which, for purposes of confidentiality, we will refer to as the ABC Company. All such sales were made on credit through Pohang Steel America Corporation ("POSAM"), a POSCO subsidiary located in the United States. The ABC Company subsequently declared bankruptcy, and did not pay for those sales. POSAM issued negative invoices with respect to these sales, and reflected the non-payment in its accounting records by showing a credit to accounts receivable and a debit to sales, thereby reversing the entries that recorded the sales. There was no evidence in the record that POSCO had any knowledge at the time of sale that ABC Company was in a precarious financial situation. In the preliminary determination in the Plate investigation, the DOC excluded these sales from its margin analysis, because it determined that the sales were "atypical and not part of POSCO's normal business practice". In the final determinations in both investigations, however, the DOC included the sales in question in its margin analysis and treated the unpaid amounts as "direct selling expenses". The DOC allocated these direct selling expenses over all US sales. In respect of sales made directly to unaffiliated purchasers in the United States, the DOC added the allocated amount of these direct selling expenses to the normal value. In respect of US sales made through POSAM, the DOC subtracted the allocated amount of these direct selling expenses from the price charged by POSAM to unaffiliated customers in the United States. 2. Claims under Article 2.4 ("allowances") Arguments of the parties Korea claims that the DOC's treatment of the amounts unpaid by ABC Company as "direct selling expenses" is an adjustment not permitted by Article 2.4 of the AD Agreement. In Korea's view, Article 2.4 permits adjustments only to account for differences that affect prices. The cost of unpaid sales is not one of the five factors deemed by Article 2.4 to affect price comparability. In particular, the term "conditions and terms of sale" refers to the agreed-upon bundle of rights and obligations under a sales agreement, and failure to pay amounts due is not a "condition" or "term" of a contract but is rather a breach of a contract. Nor do the unpaid amounts represent an "other difference . . . demonstrated to affect price comparability" within the meaning of Article2.4. Because POSCO did not know that a particular customer would fail to pay at the time it set its prices, the subsequent failure to pay did not affect the prices that POSCO set. In any event, the allocation by the DOC of the cost of unpaid sales of ABC Company over all US sales to all customers is inconsistent with Article2.4 because the failure of one company to pay did not affect the price comparability of sales to other customers who did pay for their purchases. The United States considers that its treatment of the cost of unpaid sales was consistent with Article 2.4. The United States first notes that certain US sales were made through the associated importer POSAM. For these sales it constructed an export price by deducting from the price charged to the first independent buyer in the United States the expenses and profits associated with the transaction between that buyer and the associated importer, including an allocated portion of the bad debt expense. In respect of these sales, therefore, the bad debt expense was not an adjustment to export price under the "due allowance" provision of Article 2.4, but rather a deduction made to construct an export price under Article 2.3. The United States maintains that, because Korea has made no claim under Article 2.3, the methodology used by the DOC to construct an export price is not before the Panel. In any event, the United States acted consistently with Article 2.3 in deducting an allocated portion of the bad debt expense when constructing the export price because the bad debt expense was a "cost[] . . . incurred between importation and resale". In respect of those sales for which it did make adjustments, the United States contends that bad debt represents a "difference in conditions and terms of sale" for which due allowance shall be made pursuant to Article 2.4. In the United States' view, the term "differences in conditions and terms of sale" encompasses differences in costs associated with the terms of the sales contract and other expenses that are directly related to the sale, i.e., but for the sale the expense would not be incurred. The United States considers that whenever a seller sells on credit, it accepts a credit expense, including any bad debt that may result from the sale. As in the case of a warranty, the expense is part of the bargain and but for the sale the expense would not be incurred. As for the amount of the bad debt allowance, the United States considers that the only practicable method for making such allowances is based on the exporter's actual expense during the period of investigation. The UnitedStates does not rely on the reference in Article 2.4 to "other differences" demonstrated to affect price comparability as a basis for its adjustment, but neither does it concede that bad debt could not be treated as such an "other difference". Korea disputes the United States' view that, in respect of sales made through the associated importer POSAM, the bad debt expense was not an adjustment to export price but was rather a deduction made to construct an export price. In Korea's view, it is clear that the adjustment was not made to construct the export price because the DOC made the same adjustment to all US sales, whether or not they were made through an associated importer. Further, the DOC's determinations refer to the adjustment as one for "direct selling expenses", which under US law signifies that the DOC determined that a "circumstance of sale" adjustment equivalent in US law to an adjustment under Article 2.4 was appropriate. In any event, Korea considers that an adjustment for non-payment is not a permissible adjustment for purposes of constructing an export price because it is not a cost incurred "between importation and resale" and because an item may properly be included as an adjustment for purposes of constructing an export price only if it is the type of item that might reasonably be included in an unaffiliated importer's mark-up. Evaluation by the Panel Was the DOC's treatment of unpaid sales in respect of POSAM part of the construction of the export price? As discussed above, Korea claims that the DOC's treatment of unpaid sales was an adjustment for differences affecting price comparability pursuant to the third sentence of Article 2.4 which was inconsistent with the requirements of that provision. The United States has responded that, in respect of those sales made through POSAM, its treatment of unpaid sales did not represent an adjustment to export price pursuant to the third sentence of Article 2.4 but was rather one aspect of the construction of an export price pursuant to Article 2.3. This issue is important for two reasons. First, if the United States' treatment of unpaid sales in respect of POSAM was one aspect of the construction of the export price, we must consider whether claims relating to construction of the export price are within the Panel's terms of reference. Second, it is clear that a Member's actions regarding the construction of an export price are subject to different rules than a Member's actions with respect to the making of allowances for differences affecting price comparability. Thus, we must as a threshold matter determine whether the DOC's treatment of unpaid debt in respect of sales through POSAM was one aspect of the construction of the export price. In addressing this issue, we must of course look to what the DOC actually did during these investigations. This is a factual issue that we must resolve on the basis of the DOC's final determinations and on the publicly available final analysis memoranda which are cross-referenced in those determinations. Turning first to the Plate investigation, the DOC stated the following in its Final Determination: "For US sales made through POSAM, we calculated CEP [constructed export price] based on packed prices to unaffiliated customers in the United States . . . . In accordance with section 772(d)(1) of the Act, we deducted those selling expenses associated with economic activity occurring in the United States, including direct selling expenses (credit costs, bank charges, and US commissions) and indirect selling expenses. Also, we made an adjustment for CEP profit in accordance with section 772(d)(3) of the Act." (emphasis added). Although the Final Determination does not specifically mention the unpaid sales, it is clear from the final analysis memorandum that the amount for unpaid sales was included in the "direct selling expenses" which were deducted in order to calculate the constructed export price. The Final Determination in the Sheet investigation is more explicit. It states that: "For US sales made through POSAM, we calculated CEP based on packed prices to unaffiliated customers in the United States . . . . In accordance with section 772(d)(1) of the Act, we deducted those selling expenses associated with economic activity occurring in the United States. In addition, we deducted a per unit direct selling expense to account for bad debt losses incurred by POSAM for sales made to a bankrupt customer. . . . Also, we made an adjustment for CEP profit in accordance with section 772(d)(3) of the Act. Once again, the final analysis memorandum confirms that the amount for unpaid sales was deducted from the price charged to the first unaffiliated purchaser as part of the construction of the export price. These determinations and underlying memoranda demonstrate that, in the case of sales through POSAM, the DOC deducted an allocated portion of the unpaid sales as part of its construction of the export price. We note in this respect that the provision of US law on the basis of which the DOC made these deductions, section 772(d) of the Act, is entitled "Additional Adjustments to Constructed Export Price", applies exclusively in the CEP context, and, as made clear by implementing regulations, only for adjustments for expenses associated with commercial activities occurring in the United States. By contrast, adjustments for differences between the normal value and the export price or constructed export price in respect of, inter alia, taxation, physical characteristics, quantities, level of trade and "other differences in the circumstances of sale" are made to the normal value pursuant to section 773 of the Act. Korea contends that the DOC's reference to "direct selling expenses" was a "signal" that the DOC had decided to make a circumstances of sale adjustment, which Korea equates to an allowance for differences affecting price comparability under the third sentence of Article 2.4. We note however that Section 772(d) of the Act identifies "expenses that result from, and bear a direct relationship to the sale", i.e., direct selling expenses, as one category of expense for which adjustment shall be made in the construction of an export price. Thus, we cannot agree that the DOC's reference to "direct selling expenses" means that the allowances for unpaid sales in respect of sales through POSAM must be deemed to be adjustments for circumstances of sale. Our conclusion on this point is a limited one, relating to a specific factual question: was the DOC's deduction of an amount for unpaid sales in respect of sales through POSAM performed as an element in the construction of an export price? Having answered this question in the affirmative, we agree with the United States that the DOC's actions in respect of those sales must be measured against the provisions of the AD Agreement relating to the construction of the export price, or not at all. The foregoing conclusion does not of course imply a view about whether the DOC's actions were consistent with the provisions of the AD Agreement regarding construction of an export price. That is an issue to be taken up only after a consideration as to whether such claims are within the Panel's terms of reference. Nor does it mean that the DOC's adjustments for unpaid sales in respect of sales through unaffiliated importers should be measured against the provisions relating to construction of the export price. As discussed below, the ϲʹ-consistency of these adjustments must be measured against the provisions of the AD Agreement governing adjustments for differences affecting price comparability. It is to the latter issue that we now turn. Was the DOC's adjustment for unpaid sales in respect of sales through unaffiliated importers a permissible allowance for a difference affecting price comparability? As we have seen, Korea claims that the AD Agreement allows adjustments only for "differences which are . . . demonstrated to affect price comparability" within the meaning of Article2.4, and that because the non-payment by ABC company of certain sales was not such a difference, the adjustments made by the DOC were inconsistent with that Article. Although the United States contends, and we have found, that in its treatment of sales through affiliated importer POSAM the DOC was constructing an export price, the United States does not dispute that the ϲʹ-consistency of its adjustments with respect to sales to unaffiliated buyers must be assessed by reference to the "due allowance" provision cited by Korea.  In examining this claim, therefore, we first consider the relevant provisions of the ADAgreement. Article 2.4 of the AD Agreement provides as follows: "A fair comparison shall be made between the export price and the normal value. This comparison shall be made at the same level of trade, normally at the exfactory level, and in respect of sales made at as nearly as possible the same time. Due allowance shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sale, taxation, levels of trade, quantities, physical characteristics, and any other differences which are also demonstrated to affect price comparability.7 In the cases referred to in paragraph3, allowances for costs, including duties and taxes, incurred between importation and resale, and for profits accruing, should also be made. If in these cases price comparability has been affected, the authorities shall establish the normal value at a level of trade equivalent to the level of trade of the constructed export price, or shall make due allowance as warranted under this paragraph. The authorities shall indicate to the parties in question what information is necessary to ensure a fair comparison and shall not impose an unreasonable burden of proof on those parties." (emphasis added) _______________________ 7 It is understood that some of the above factors may overlap, and authorities shall ensure that they do not duplicate adjustments that have been already made under this provision. The third sentence of Article 2.4 identifies five specific categories of "differences which affect price comparability": differences in conditions and terms of sale, taxation, levels of trade, quantities, and physical characteristics. The United States does not assert that the cost of unpaid sales represents a difference in taxation, levels of trade, quantities or physical characteristics. The United States does contend, however, that the allowances it made here were for "differences in conditions and terms of sale". It considers that a permissible interpretation of differences in "conditions and terms of sale" encompasses differences in costs associated with the terms of the sales contract and other expenses that are directly related to the sale, i.e., but for the sale the expense would not be incurred. In the United States' view, bad debt is an expense directly related to the payment terms of the contract, because whenever a seller sells on credit he accepts a credit expense, which includes any bad debt that may result from the sale. Korea responds that "conditions and terms of sale" are the agreed upon bundle of rights and obligations created by the sales agreement, and that no contract contains terms authorizing a customer to go bankrupt and refuse to pay. We do not consider that the phrase "differences in conditions and terms of sale", interpreted in accordance with customary rules of interpretation of public international law, can be understood to encompass differences arising from the unforeseen bankruptcy of a customer and consequent failure to pay for certain sales. In this respect, we note that Article 2.4 refers to the "terms and conditions of sale". Although of course both words "term" and "condition" have many meanings, both are commonly used in relation to contracts and agreements. Thus, "term" is defined, inter alia, to mean "conditions with regard to payment for goods or services", while "condition" is defined, inter alia, as "a provision in a will, contract, etc., on which the force or effect of the document depends". Thus, we consider that, read as a whole, the phrase "conditions and terms of sale" refers to the bundle of rights and obligations created by the sales agreement, and "differences in conditions and terms of sale" refers to differences in that bundle of contractual rights and obligations. Thus, to the extent that there are, for example, differences in payment terms in the two markets, a difference in the conditions and terms of sale exists. The failure of a customer to pay is not a condition or term of sale in this sense, however. Rather, non-payment involves a situation where the purchaser has violated the "conditions and terms of sale" by breaching its obligation to pay for the merchandise in question. We perceive no textual basis for the United States' effort to characterize all differences in costs associated with the terms of the contract and expenses directly related to the sale as "differences in terms and conditions of sale". The United States contends that "conditions" of sale can be read in this context to mean the "mode or state of being" of sales, such that "differences in conditions and terms of sale" include the "mode or circumstances" under which sales are made. Assuming this interpretation to be a permissible one, it might allow for adjustments for "differences in conditions and terms of sale" in cases where the contractual provisions governing sales in the two markets were identical but the seller was aware from circumstances existing at the time of sale that those provisions would likely entail different costs. Thus to take an example often cited by the United States in this dispute, a seller might extend identical warranties in different markets or to different customers, knowing in advance that the costs related to those warranties in one market would likely be higher than in the other. Similarly, a seller might extend sales on the same credit terms in two different markets or to two different customers in the awareness that the risk of default and thus the likely costs associated with the extension of credit would be higher in one case than in the other. However, we fail to see how the fact that a customer who has purchased on credit subsequently went bankrupt and failed to pay for his purchases could be deemed a "circumstance under which sales are made", at least in a case such as this one where the seller had no knowledge of the precarious financial situation of the purchaser. We consider that an examination of the context in which the phrase "differences in conditions and terms of sale" is used supports our understanding of the ordinary meaning of this phrase. We recall that Article 2.4 identifies "differences in conditions and terms of sale" as one of several "differences which affect price comparability". Thus, the notion of price comparability informs our interpretation of "differences in conditions and terms of sale". In our view, the requirement to make due allowance for differences that affect price comparability is intended to neutralise differences in a transaction that an exporter could be expected to have reflected in his pricing. A difference that could not reasonably have been anticipated and thus taken into account by the exporter when determining the price to be charged for the product in different markets or to different customers is not a difference that affects the comparability of prices within the meaning of Article 2.4. This reinforces our view that the phrase "differences in conditions and terms of sale" cannot permissibly be interpreted to encompass an unanticipated failure of a customer to pay for certain sales. In the latter phases of the proceeding, and in response to a question from the Panel, the UnitedStates contended that its methodology for the treatment of bad debt was simply a practical way to address differing levels of risks between markets in cases where sales are made on credit. As our previous discussion suggests, we agree with the United States that a difference in risk of non-payment between markets that was known at the time of sale might represent a difference for which due allowance could properly be made under Article 2.4. Nor do we preclude that actual bad debt experience during the period of investigation might be evidence relevant to establishing the existence of such a difference. The United States did not however treat actual experience with respect to levels of unpaid sales as evidence of different levels of risk in the two markets in these investigations. Rather, it stated that it was the DOC's practice to treat bad debt as a direct selling expense when the expense was incurred in respect of the subject merchandise. Thus, even assuming that the US methodology was somehow intended to address differences in risk of non-payment, we do not accept the proposition that the existence of a higher level of non-payment in one market than in another during the period of investigation may be deemed to demonstrate the existence of such differences in risk and thus represent a permissible adjustment for "differences in conditions and terms of sale". We note that the United States does not appear to argue that the adjustment made by the DOC in these investigations is justified on the basis that it represented an adjustment for "other differences which are also demonstrated to affect price comparability." Nevertheless, taking into account the ambiguity of the United States' position on this question, and in the interests of achieving a full resolution of this dispute, we conclude that, for the reasons set forth in paragraph  REF _Ref497726477 \n \h 6.77 above, the adjustment in question in this dispute could not be justified as an adjustment for "other differences which are also demonstrated to affect price comparability". For the foregoing reasons, we conclude that the DOC's adjustment for unpaid sales through unaffiliated importers was not a permissible due allowance for differences affecting price comparability and was thus inconsistent with the third sentence of Article 2.4 of the AD Agreement. Is Korea's claim regarding the DOC's adjustment for unpaid sales in respect of sales through POSAM to construct an export price within the Panel's terms of reference? In the preceding section, we concluded that the DOC's adjustment for unpaid sales in respect of sales through unaffiliated purchasers was not a permissible due allowance for differences affecting price comparability and was thus inconsistent with the third sentence of Article 2.4 of the ADAgreement. We also concluded, however, that the DOC's adjustment for unpaid sales in respect of sales by POSCO through its affiliated US importer POSAM was not an adjustment for differences affecting price comparability but was rather one aspect of the construction of an export price, the ϲʹ-consistency of which must therefore be measured against the provisions governing such construction. Before considering the substantive issue, however, we must first consider whether claims regarding the construction of the export price are within this Panel's terms of reference. The United States contends that, because Korea has made no claim under Article 2.3 of the AD Agreement, the DOC's decision to construct an export price and the methodology it employed to do so are not issues before this Panel. The United States considers that, while the fourth sentence of Article 2.4 provides guidance on how to construct the export price, it uses non-mandatory language. Thus, a claim that the construction of an export price is in violation of the AD Agreement must be based on Article 2.3. Korea, citing the Appellate Body report in Argentina - Footwear, responds that the fact that Article 2.4 specifically refers to Article 2.3 should be sufficient to bring Article 2.3 within the Panel's terms of reference. In any event, Korea asserts that it has not claimed that Article 2.3 establishes a separate basis for a finding that the United States acted inconsistently with the AD Agreement. Rather, Korea has addressed Article 2.3 merely to refute a defense offered by the United States. Finally, Korea considers that the rules governing the methodology used to construct an export price are found in the fourth sentence of Article 2.4, not in Article 2.3. In considering this issue, we note first that Korea's request for establishment of a panel, which represents the basis for our terms of reference, contains no mention whatsoever of Article 2.3 of the AD Agreement, nor of Article 2 generally. Rather, it refers exclusively to Articles 2.1 and 2.4. It is well established that a panel may not, consistent with Article 6.2 of the DSU, consider a claim of violation of a treaty provision which has not been identified in the request for establishment underlying the panel's terms of reference. Nor do we consider that a claim of violation of Article 2.3 would be within this Panel's terms of reference merely because Article 2.4 makes a reference to Article 2.3. We recall however Korea's statement that it has not claimed that Article 2.3 establishes a separate basis for a finding that the United States acted inconsistently with the AD Agreement. Thus, the question before us is not whether a claim under Article 2.3 is within our terms of reference. Nor does the United States anywhere in its submissions suggest that a claim under Article 2.4 regarding treatment of bad debt in respect of construction of the export price is not within the Panel's terms of reference. Rather, the issue as framed by the parties relates to the nature of the obligations, if any, imposed by Article 2.4 in respect of the construction of an export price. This is an issue relating to the substance of Korea's claim, not to its admissibility. Is the DOC's adjustment for unpaid sales in respect of sales through POSAM to construct an export price consistent with Article 2.4, fourth sentence, of the AD Agreement? As is evident from the preceding section, the parties to this dispute disagree as to what obligations, if any, Article 2.4 imposes in respect of the construction of the export price. In considering this question, we must of course turn first to the relevant provisions of the AD Agreement. Article 2.1 of the AD Agreement provides as follows: "For the purposes of this Agreement, a product is to be considered as being dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country. Article 2.3 of the AD Agreement provides as follows: "In cases where there is no export price or where it appears to the authorities concerned that the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported products are first resold to an independent buyer, or if the products are not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as the authorities may determine." (emphasis added) Article 2.4 of the AD Agreement provides as follows: "A fair comparison shall be made between the export price and the normal value. This comparison shall be made at the same level of trade, normally at the exfactory level, and in respect of sales made at as nearly as possible the same time. Due allowance shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sale, taxation, levels of trade, quantities, physical characteristics, and any other differences which are also demonstrated to affect price comparability.7 In the cases referred to in paragraph3, allowances for costs, including duties and taxes, incurred between importation and resale, and for profits accruing, should also be made. If in these cases price comparability has been affected, the authorities shall establish the normal value at a level of trade equivalent to the level of trade of the constructed export price, or shall make due allowance as warranted under this paragraph. The authorities shall indicate to the parties in question what information is necessary to ensure a fair comparison and shall not impose an unreasonable burden of proof on those parties." (emphasis added). _____________________ 7 It is understood that some of the above factors may overlap, and authorities shall ensure that they do not duplicate adjustments that have been already made under this provision. In our view, both Article 2.3 and Article 2.4 play an important role in respect of the construction of export prices. When determining whether dumping exists, Article 2.1 usually requires a comparison of the export price with the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country. Article 2.3, however, authorizes a Member to construct the export price where, inter alia, the actual export price is unreliable because of association between the exporter and the importer. As discussed in section VI.C.2.(b)(i), it was pursuant to this authorization that the DOC disregarded the export price charged by POSCO to its affiliated importer POSAM in these investigations and instead constructed the export price. Further, Article 2.3 specifies that the export price may be constructed on the basis of the price at which the imported products are first resold to an independent buyer. It is clear from this language that, while the price charged to the first independent buyer is a starting-point for the construction of an export price, it is not itself the constructed export price. Nor does Article 2.3 itself contain any guidance regarding the methodology to be employed in order to construct the export price. Rather, the only rules governing the methodology for construction of an export price are set forth in Article 2.4 of the ADAgreement, which provides that, "[i]n the cases referred to in paragraph 3, allowances for costs, including duties and taxes, incurred between importation and resale, and for profits accruing, should also be made." Although the United States repeatedly refers to these allowances as "Article 2.3 adjustments", the provision governing these allowances is found in Article 2.4 and it is therefore evident to us that a claim regarding the appropriateness of allowances made to construct an export price may be made pursuant to that Article. The United States contends that, because Article 2.4 provides that allowances for costs and profits "should" be made in constructing an export price, that provision is not mandatory, and that this provision of Article 2.4 therefore does not provide a basis for claim of violation. We cannot agree. The term "should" in its ordinary meaning generally is non-mandatory, i.e., its use in this sentence indicates that a Member is not required to make allowance for costs and profits when constructing an export price. We believe that, because the failure to make allowance for costs and profits could only result in a higher export price and thus a lower dumping margin the ADAgreement merely permits, but does not require, that such allowances be made. Korea does not however assert that the DOC failed to make allowance for all costs and profits. Rather, as discussed below, Korea asserts that the DOC made allowances in constructing the export price which can not be justified as allowances "for costs . . . incurred between importation and resale". In our view, that the ADAgreement does not require such allowances does not mean that a Member is free to make any allowances it desires, including allowances not specified in this provision. To the contrary, we view this sentence as providing an authorization to make certain specific allowances. We therefore consider that allowances not within the scope of that authorization cannot be made. If a Member were free to make any additional allowances it desired, there would be no effective disciplines on the methodology for construction of an export price and the provision in question would in our view be reduced to inutility. Thus, we conclude that it would be inconsistent with Article 2.4 of the ADAgreement to make allowances in the construction of the export price that are not within the scope of the authorization found in that Article. Our conclusion that Article 2.4 contains binding obligations regarding the scope of the permissible allowances that can be made in constructing an export price does not mean that we equate allowances for differences which affect price comparability with allowances relating to the construction of the export price. Rather, the third sentence of Article 2.4 requires due allowance to be made for differences affecting price comparability, while the fourth sentence provides that in the cases referred to in paragraph 3 i.e., when constructing an export price allowance for certain costs and profits should also be made. Finally, the fifth sentence of Article 2.4 makes clear that allowances relating to the construction of the export price could in fact reduce price comparability, such that one of several compensating steps should be taken. For all these reasons, it is clear to us that allowances in respect of construction of the export price are separate and distinct from allowances for differences which affect price comparability and are governed by different substantive rules. With the foregoing in mind, the question before us can be simply posed: was the deduction from the price charged by POSAM to independent purchasers of an allocated amount of the unpaid sales an allowance for "costs, including duties and taxes, incurred between importation and resale" such that it was authorized by the fourth sentence of Article 2.4? It seems reasonably clear, and the parties do not dispute, that non-payment by ABC company represents a "cost" within the meaning of Article 2.4. They do not agree, however, as to whether that cost was incurred between importation and resale. In this respect, Korea argues that non-payment does not occur between importation and resale but rather occurs only after resale. The United States responds that the reference to costs incurred "between importation and resale" cannot be a mere temporal limitation as that would be inconsistent with the object and purpose of Article 2.3, which is to construct a reliable export price to the associated importer. Rather, the United States considers that this provision distinguishes between costs incurred in connection with the import transaction and those incurred in connection with the resale. It is the view of the United States that price is equal to cost plus profit, therefore the deduction from the resale price of all costs and profits associated with the resale leads to the effective price between the exporter and the associated importer for the transaction. In considering this question, we note that Article 2.4 uses the word "between". That term is defined to mean, inter alia, "[i]n the interval separating two points of time, events, etc.". Thus, the phrase costs "incurred between importation and resale" in its ordinary meaning is most naturally read to refer to costs that were incurred between the date of importation and the date of resale. Under this reading, it might be difficult to conclude that a cost incurred after the date of resale was a cost incurred "between importation and resale". We are cognizant, however, that dictionary definitions can only take the interpreter so far, and that in interpreting a provision of a treaty we must take into account both context and object and purpose. As discussed above, it is clear that the purpose of allowances to construct an export price is not to insure price comparability per se. Rather, an export price is constructed, and the appropriate allowances made, because it appears to the investigating authorities that the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or third party. By working backwards from the price at which the imported products are first resold to an independent buyer, it is possible to remove the unreliability. Thus, we agree with the United States that the purpose of these allowances is to construct a reliable export price to use in lieu of the actual export price or, as expressed by the EC as third party, to arrive at the price that would have been paid by the related importer had the sale been made on a commercial basis. Read in light of this object and purpose, we recognize that costs related to the resale transaction but not incurred in a temporal sense between the date of importation and resale could as a general matter be considered to be "incurred between importation and resale" and thus deducted in order to construct an export price. Nor do we preclude that an amount to cover the risk of non-payment might be considered to be such a cost. We do not believe, however, that this interpretation of costs "incurred between importation and resale" can be stretched to include costs that not only were not incurred in an accounting sense until after the date of resale but which were entirely unforeseen at that time. In this regard, we observe that, while we agree with the United States that as a general principle a related importer may be expected to establish price based on costs plus profit, a price certainly cannot be expected to reflect an amount for costs that were entirely unforeseen at the time the price was set. To deduct costs which not only were incurred after the date of resale but which were entirely unforeseen at that time would not result in a "reliable" export price in the sense of the price that would have been paid by the related exporter had the sale been made on a commercial basis. Applying this principle to the case at hand, it is clear that the costs arising from the failure of ABC company were incurred in a temporal sense after the date of resale. Further, the unpaid sales in these investigations, which represented a substantial share of total sales of subject merchandise in the United States during the periods of investigation, arose as a result of the unforeseen bankruptcy of a single customer. We further note the admission of the United States that "[t]here was no evidence in either case that POSCO had any knowledge at the time of sale that ABC company was in a precarious financial situation". Thus, it is clear that these costs not only were incurred after the date of resale but were entirely unforeseen as of that date. Under these circumstances, we do not consider the amount for unpaid sales deducted by the United States in constructing an export price was a cost "incurred between importation and resale" within the meaning of Article 2.4 of the AD Agreement. Claims under Article 2.4 ("fair comparison") Arguments of the parties Korea also claims the DOC's actions in respect of unpaid sales were inconsistent with the "fair comparison" requirement of Article 2.4. In Korea's view, the adjustments made by the DOC in respect of unpaid sales violated this requirement because non-payment is not a "difference affecting price comparability" for which adjustment may be made under Article 2.4. Korea further considers the DOC's treatment of unpaid debt was inconsistent with the "fair comparison" requirement because it is fundamentally unfair to penalize an exporter for an event that it could not have anticipated and that was beyond its control. In addition, Korea considers that the inclusion of the unpaid sales to the ABC Company in the calculation of the export price was inconsistent with the "fair comparison" requirement. In this respect, Korea considers that the unpaid sales in question were atypical, and that, where the inclusion of atypical sales would distort the results, their inclusion is unfair. The United States considers that whether a comparison is "fair" within the meaning of Article 2.4 can only be judged in light of the explicit methodological requirements of that Article. The adjustment performed by the DOC was a permissible Article 2.4 adjustment for differences in terms and conditions of sale and was therefore fair. As for Korea's view that the DOC was required to exclude unpaid sales as "atypical", the United States considers that it is Article 2.1, not Article 2.4, which addresses the question what sales are to be used to establish export price and normal value. Thus, Article 2.4 does not require the exclusion of "atypical" sales when determining export price. Evaluation by the Panel In the previous section of this Report, we have found that the United States's treatment of bad debt in the Plate and Sheet investigations was inconsistent with its obligations under the third sentence of Article 2.4 (in respect of its allowances for differences affecting price comparability) and under the fourth sentence of Article 2.4 (in respect of allowances to construct an export price). We note that "a panel need only address those claims which must be addressed in order to resolve the matter in issue in the dispute". Having concluded that the United States acted inconsistently with its specific obligations under the third and fourth sentences of Article 2.4 in respect of allowances, we do not consider it necessary to examine Korea's claims that the United States' treatment of bad debt breached a more general "fair comparison" requirement under Article 2.4 of the AD Agreement. MULTIPLE AVERAGING Factual background The claims addressed in this section of our report relate to the division of the POI for the purpose of calculating the overall margin of dumping in the Plate and Sheet investigations into two averaging periods to take into account a major devaluation of the Korean won in the period November-December 1997. In the preliminary determinations in both investigations, the DOC used a single averaging period covering the whole POI to calculate the margin of dumping. In the final determinations, however, the DOC divided the POI into two sub-periods, corresponding to the pre- and post-devaluation periods. The DOC calculated a weighted average margin of dumping for each sub-period. When combining the margins of dumping calculated for the sub-periods to determine an overall margin of dumping for the entire POI, the DOC treated sub-periods where the average export price was higher than the average normal value as sub-periods of zero dumping. Claim under Article 2.4.2 of the AD Agreement Arguments of the parties Korea argues that Article 2.4.2 prohibits the comparison of multiple averages with multiple averages. Korea contends that Article 2.4.2 obligates a Member to either (i) compare a single weighted average normal value with a single weighted average export price, or (ii) compare individual home market transactions to individual export transactions. Korea considers that this conclusion is mandated by the reference in Article 2.4.2 to "a weighted average", i.e., one average, not two averages. It is confirmed by the reference to "all comparable export transactions" in Article 2.4.2, as there can only be one average if it takes into account all data. In these investigations the DOC acted inconsistently with Article 2.4.2 because it did not compare a single weighted-average normal value with a single weighted average export price, but rather divided the POI into sub-periods and calculated a separate dumping margin for each sub-period. The United States responds that, while Article 2.4.2 provides that margins of dumping be based upon a comparison of an average of normal value prices with an average of the prices for export transactions, the transactions included in these averages must be "comparable". The reason for this limitation is that the inclusion in the averages to be compared of sales that are not comparable could result in a dumping margin based upon factors not related to dumping. The United States notes that Article 2.4.2 is subject to the provisions of Article 2.4, which requires that normal value and export price be compared "at the same level of trade . . . in respect of sales made at as nearly as possible the same time" and that allowance be made for, inter alia, differences in physical characteristics. Thus, a Member may create multiple averages in order to ensure that comparisons are not distorted by averaging of non-comparable transactions, such as transactions involving different models or at different levels of trade. The United States considers that the DOC's conclusion that the collapse of the won rendered transactions before and after the devaluation "not comparable" is a permissible interpretation of the term as used in Article 2.4.2. In stating that comparisons should be "in respect of sales made at as nearly as possible the same time", Article 2.4 recognizes that time is a fundamental aspect of comparability. In fact, Article 2.4.2 could permissibly be interpreted as expressing a preference for daily averages, an approach that would be similar to the transaction-by-transaction methodology approved by Article 2.4.2. In the absence of evidence to the contrary, the DOC presumes sales made within a one-year period to be sufficiently close in time to satisfy the "same time" requirement of Article 2.4. Where facts indicate that changes within the year have the potential to affect comparability, however, the DOC will divide the POI into sub-periods. As the dollar values of pre- and post-devaluation home market sales were sharply different, the DOC permissibly determined that sales before and after the devaluation were not comparable and that it was therefore appropriate to divide the POI into sub-periods and calculate a margin of dumping for each such sub-period. Korea disputes the United States' view that the depreciation of Korea's currency rendered pre- and post-devaluation sales non-comparable such that the use of multiple averaging is appropriate. Korea considers that substantive limitations in the AD Agreement on the transactions that can be compared define the transactions that are "comparable". There are however no provisions of the ADAgreement that limit the transactions that may be included in comparisons due to movements in exchange rates. Article 2.4.1 addresses exchange rates, but does not establish a limit on which exchange rates may be comparable. Nor does the Article 2.4 requirement that comparisons be made "in respect of sales made at as nearly as possible the same time" justify multiple averaging in the case of exchange rate movements. Korea considers that, in the case of average to average comparisons, this provision requires only that sales in each market should, on average, have been made at the same time in order to be considered comparable. Evaluation by the Panel Does Article 2.4.2 prohibit multiple averaging? Korea's first claim regarding the use by the DOC of multiple averaging is based upon Article2.4.2 of the AD Agreement. Article 2.4.2 provides as follows: "Subject to the provisions governing fair comparison in paragraph4, the existence of margins of dumping during the investigation phase shall normally be established on the basis of a comparison of a weighted average normal value with a weighted average of prices of all comparable export transactions or by a comparison of normal value and export prices on a transactiontotransaction basis. A normal value established on a weighted average basis may be compared to prices of individual export transactions if the authorities find a pattern of export prices which differ significantly among different purchasers, regions or time periods, and if an explanation is provided as to why such differences cannot be taken into account appropriately by the use of a weighted averagetoweighted average or transactiontotransaction comparison." In considering this claim, we first make clear that we do not consider that Article 2.4.2 prohibits the use of multiple averaging per se, as Korea's first submission could be taken to suggest. To the contrary, Article 2.4.2 provides that the existence of dumping shall normally be established "on the basis of a comparison of a weighted average normal value with a weighted average of all comparable export transactions" (emphasis added). The inclusion of the word "comparable" is in our view highly significant, as in its ordinary meaning it indicates that a weighted average normal value is not to be compared to a weighted average export price that includes non-comparable export transactions. It flows from this conclusion that a Member is not required to compare a single weighted average normal value to a single weighted average export price in cases where certain export transactions are not comparable to transactions that represent the basis for the calculation of the normal value. We recall Korea's view that the reference in the singular to "a weighted average normal value" means that the use of multiple averages is prohibited. In our view, however, the reference in the singular to "a weighted average normal value" means simply that there must be a single weighted average normal value and export price in respect of comparable transactions. It does not mean that a Member is required to compare a single weighted average normal value to a single weighted average export price in cases where some of the export transactions are not comparable to the transactions that represent the basis for the normal value. An examination of the context of the provision in question and of its object and purpose in our view provide further support for the above conclusion. The chapeau of Article 2.4 states that "[a] fair comparison shall be made between the export price and the normal value." Whatever the relationship of the fair comparison language of the chapeau to the specific requirements of Article 2.4 an issue of dispute between the parties it is evident to us that the provisions of Article 2.4.2 must be read against the background of this basic principle. In fact, the provisions of Article 2.4.2 itself are "subject to the provisions governing fair comparison in paragraph 4." An interpretation of Article 2.4.2 that required a Member to compare transactions that were not comparable would run counter to this basic principle. Accordingly, we conclude and by the later phases of this dispute the parties agreed that Article 2.4.2 does not preclude the use of multiple averages per se. Rather, Article 2.4.2 requires a Member to compare a single weighted average normal value to a single weighted average export price in respect of all comparable transactions. A Member may however use multiple averages in cases where it has determined that non-comparable transactions are involved. Was the use of multiple averaging permissible in these investigations? Having established that the use of multiple averages is permissible where transactions are not "comparable", the question remains whether the DOC was justified in determining in these investigations that multiple averaging was appropriate. In considering this question, we must first consider the explanation provided by the DOC in these two investigations for its decision to divide the POI into two sub-periods. In the Plate final determination, the DOC explained its decision to divide the POI into two periods as follows: "[W]e agree with petitioners that separate averaging periods should be used. Under Section 777A(d)(1)(A) of the Act, the Department has wide latitude in calculating the average prices used to determine whether sales at less than fair value exist. More specifically, under 19 CFR 351.414(d)(3), the Department may use averaging periods of less than the POI when normal value, export price, or constructed export price varies significantly over the POI. In the instant case, NV (in dollars) in the last two months of the POI differs significantly from NV earlier in the POI due primarily to a significant change in the underlying dollar value of the won. In this case, the change is evidenced by the precipitous drop in the won's value that began in November 1997 and continued through the end of the POI without a quick, significant rebound. In the span of two months, the won's value decreased by more than 40 per cent in relation to the dollar. Consequently, it was appropriate to use two averaging periods to avoid the possibility of a distortion in the dumping calculation. Moreover, we disagree with respondent's claim that the use of averaging periods is dependent upon a change in a respondent's selling practices. In the final determination of certain preserved mushrooms from Indonesia, the Department stated that, 'in addition to changes in selling practices, we believe that we should also consider other factors, such as prolonged large changes in exchange rates, in determining whether it is appropriate to use more than one averaging period." See Notice of Final Determination of Sales at Less than Fair Value: Preserved Mushrooms from Indonesia, 63 FR 72268, 72272 (December 31, 1998). Therefore, we have used two averaging periods for the final determination: January through October and November through December, 1997." (emphasis added). The Sheet final determination contains an explanation for the DOC's determination that closely parallels that in the Plate final determination. The DOC found that: "Under section 777A(d)(1)(A) of the Act, the Department has broad authority to use a number of methodologies in calculating the average prices used to determine whether sales at less than fair value exist. More specifically, under 19 CFR 351.414(d)(3), the Department may use averaging periods of less than the POI when normal value, export price, or constructed export price varies significantly over the POI. In this investigation, in the last five months of the POI, NV (in dollars) differed significantly from NV earlier in the POI, due primarily to a significant change in the underlying dollar value of the won, evidenced by the precipitous drop in the won's value that began in November 1997 and continued through December 1997. In the span of two months, the won's value decreased by more than 40 per cent in relation to the dollar. Consequently, it is appropriate to use two averaging periods to avoid the possibility of a distortion in the dumping calculation. Moreover, we disagree with respondent's claim that the use of averaging periods is dependent upon change in a respondent's selling practices. In the final determination of certain preserved mushrooms from Indonesia, the Department stated that 'in addition to changes in selling practices, we believe that we should also consider other factors, such as prolonged large changes in exchange rates, in determining whether it is appropriate to use more than one averaging period." See Notice of Final Determination of Sales at Less than Fair Value: Preserved Mushrooms from Indonesia, 63 FR 72268, 72272 (December31,1998). Therefore, for both POSCO and Inchon, we have used two averaging periods for the final determination: January through October 1997 and November 1997 through March 1998." (emphasis added). It is evident from the DOC's determinations in these investigations that the DOC's decision to divide the POI into two sub-periods was based on the authority granted it by regulation to use multiple averaging periods in cases where "normal values, export prices or constructed export prices differ significantly over the course of the period of investigation." It is further clear that the determination to use sub-periods in these investigations was based exclusively upon the DOC's conclusion that the normal value in the latter part of the POIs in these investigations, expressed in dollars, differed significantly from the normal value in the earlier part of the POIs. Accordingly, the question before us is whether the existence of significant differences in normal value over the course of an investigation, by itself, is a sufficient basis to conclude that export and home market transactions at different points in the POI are not comparable such that the use of multiple averages is permissible under Article 2.4.2 of the AD Agreement. The United States does not of course assert that differences in price between export transactions and normal value are in and of themselves differences which would render such transactions non-comparable within the meaning of Article 2.4.2. Obviously, the purpose of Article 2 as a whole is to provide a methodology for determining whether a product is dumped, i.e., whether the export price is less than the normal value. Thus, to decline to compare transactions because they were made at different prices would defeat the entire purpose of the exercise. Rather, the United States asserts that the existence of differences in the timing of sales in the home market and the export market render transactions non-comparable, at least in cases where there are significant differences in the normal value, export price or constructed export price over the course of the investigation. In examining this question, we first note that the term "comparable" has been defined to mean "able to be compared (with)". This definition however does not cast great light on the meaning of the term as used in Article 2 of the AD Agreement. Thus, we consider it useful to turn to the context in which this term appears. In this respect, we agree with the parties that the meaning of the term "comparable" as used in Article 2.4.2 can best be established by an examination of other provisions of Article 2 of the AD Agreement that address the issue of comparability. We further note that the chapeau to Article 2.4 provides that the comparison between the export price and the normal value shall be made "in respect of sales made at as nearly as possible the same time". Thus, we consider it clear that the timing of sales may have implications in respect of the comparability of export and home market transactions. This does not mean, however, that where an average to average comparison methodology is used, individual home market and export sales that are not made at the same time necessarily are not comparable and thus cannot be included in the weighted averages. To the contrary, it is in the very nature of an average to average comparison that, for example, transactions made at the beginning of the averaging period in the export market will be made at a different moment in time than sales in the home market made at the end of averaging period. If the drafters had considered that this situation would necessarily give rise to a problem of comparability, surely they would not have explicitly authorized the use of averaging in Article 2.4.2. Thus we consider that, in the context of weighted average to weighted average comparisons, the requirement that a comparison be made between sales made at as nearly as possible the same time requires as a general matter that the periods on the basis of which the weighted average normal value and the weighted average export price are calculated must be the same. The United States argues, in effect, that the "same time" requirement of Article 2.4 implies a preference for shorter rather than longer averaging periods. In our view, however, the US argument proves too much. If the requirement to compare sales at "as nearly as possible the same time" means that sales within an averaging period covering a POI are not comparable, then a Member presumably would be obligated to break a POI into as many sub-periods as possible. Yet to interpret the word "comparable", when combined with the requirement that sales be compared "at as nearly as possible the same time", to obligate Members to perform numerous average to average comparisons based on the shortest possible time periods would in effect read the Article 2.4.2 authorization to perform average to average comparisons out of the AD Agreement, leaving Members with only the second option, the comparison of normal values and export prices on a transaction-by-transaction basis. We do not preclude that there may be factual circumstances where the use of multiple averaging periods could be appropriate in order to insure that comparability is not affected by differences in the timing of sales within the averaging periods in the home and export markets. We note that, where changes in normal value, export price or constructed export price during the course of the POI are combined with differences in the relative weights by volume within the POI of sales in the home market as compared to the export market, the use of weighted averages for the entire POI could indicate the existence of a margin of dumping that did not reflect the situation at any given moment within the POI. In this situation a Member might in our view be justified in concluding that differences in timing of sales in the home and export markets give rise to a problem of comparability that could be addressed through multiple averaging periods. We recall however that this situation only arises where two elements a change in prices and differences in the relative weights by volume within the POI of sales in the home market as compared to the export market exist. Thus, while a change in normal value, export price or constructed export price may be a necessary condition for the conclusion that the passage of time affects comparability in the case of an average-to-average comparison, the existence of such a change is not in itself a sufficient condition to conclude that the export transactions are not comparable to the normal value. Turning to the case at hand, we recall that the DOC's determination to use sub-periods in these investigations was based exclusively upon its conclusion that the normal value in the latter phase of the POIs in these investigations, expressed in dollars, differed significantly from the normal value in the earlier phase of the POIs. There is no suggestion in the DOC's determinations or in the final analysis memoranda underlying them that the reason for the DOC's decision to divide up the POI was based upon the existence of a difference in the relative weights by volume of sales within the POI between the home and export markets. In light of the foregoing discussion, we do not consider that this represented a permissible determination of non-comparability. Accordingly, we conclude that the United States' use of multiple averaging periods in these investigations was inconsistent with the requirement of Article 2.4.2 to compare "a weighted average normal value with a weighted average of all comparable export transactions". Claim under Article 2.4.1 Arguments of the parties Korea observes that the DOC used multiple averaging periods to account for the depreciation of the Korean won during the POI in these two investigations. Korea contends however that Article 2.4.1 is the only provision of the AD Agreement that addresses exchange rates or the permissible modification to the dumping calculation methodology to account for exchange rate fluctuations. Article 2.4.1 sets forth special rules that apply to situations when the exporting country's currency has been appreciating. However, Article 2.4.1 does not permit any adjustment to the dumping calculations to account for a depreciation of the exporting country's currency. Consequently, because the DOC adopted a multiple-averaging methodology in these investigations to account for the depreciation of the Korean won, it was inconsistent with the requirement of Article 2.4.1 that the price comparisons not be modified to account for depreciation in the exporting country's currency. The United States responds that Article 2.4.1 provides guidance to Members in selecting the exchange rates for use in anti-dumping investigations. The issue raised by Korea, although precipitated by a currency situation, relates to the DOC's construction of averages under Article 2.4.2, rather than its selection of exchange rates under Article 2.4.1. Thus, Article 2.4.1 does not address the currency conversion problem faced by the United States in these investigations and is not relevant to the issue raised by Korea. Evaluation by the Panel Article 2.4.1 of the AD Agreement provides as follows: "When the comparison under paragraph 4 requires a conversion of currencies, such conversion should be made using the rate of exchange on the date of sale8, provided that when a sale of foreign currency on forward markets is directly linked to the export sale involved, the rate of exchange in the forward sale shall be used. Fluctuations in exchange rates shall be ignored and in an investigation the authorities shall allow exporters at least 60 days to have adjusted their export prices to reflect sustained movements in exchange rates during the period of investigation. ____________________ 8 Normally, the date of sale would be the date of contract, purchase order, order confirmation, or invoice, whichever establishes the material terms of sale. In our view, Article 2.4.1 relates to the selection of exchange rates to be used where currency conversions are required. It establishes a general rule conversion should be made using the rate of exchange on the date of sale and an exception to this general rule for sales on forward markets. It also establishes special rules in the case of fluctuations and sustained movements in exchange rates. We note Korea's view that the requirements of the second sentence of Article 2.4.1 prescribe specific results, rather than describing a method for selecting exchange rates. It appears to us, however, that, read in context, these special rules also relate to the selection of exchange rates, and not to the construction of averages. Rather, the permissibility of the use of multiple averaging is an issue addressed by Article 2.4.2. Even if Article 2.4.1 were not restricted to the issue of the selection of exchange rates, we find nothing in that Article that would prohibit a Member from addressing, through multiple averaging, a situation arising from a currency depreciation. Korea contends, and the United States does not dispute, that the provision of Article 2.4.1 requiring Members to allow exporters sixty days to adjust their export prices to sustained movements in exchange rates applies only in the case of currency appreciation, and not in the case of currency depreciation. Assuming that the parties are correct in this regard, the requirement that a Member take certain actions in the case of currency appreciation does not in our view mean that Members are prohibited from taking any action to address a situation arising from a currency depreciation. For the foregoing reasons, we conclude that the United States' use of multiple averaging periods in these investigations was not inconsistent with Article 2.4.1 of the AD Agreement. Claim under Article 2.4 ("fair comparison") Arguments of the parties Korea contends that, in these investigations, US petitioners in essence claimed that anti-dumping orders were needed to protect them from an increase in imports after the devaluation of the Korea won. In these circumstances, a fair analysis of whether POSCO engaged in injurious dumping must focus on or at an absolute minimum, include pricing data after the devaluation of the won. Yet that pricing data was effectively excluded from the DOC's price comparisons by the multiple averaging methodology. In other words, the DOC's multiple averaging methodology resulted in a finding of dumping based solely on pre-devaluation sales. This methodology was however inconsistent with the injury analysis, which found injury based primarily on post-devaluation imports. The methodology was thus inconsistent with the fair comparison requirement of Article 2.4. The United States considers that Korea's argument has no bearing on the question of whether the United States properly constructed averages for comparison purposes under Article 2.4.2, or even whether the United States made a fair comparison under Article 2.4. Even if Korea's argument were relevant to the issue of the consistency of the measures with Article 3 of the AD Agreement, Korea did not raise a claim under Article 3 in its request for panel review. Consequently, this issue is outside the Panel's terms of reference, and must be disregarded. Evaluation by the Panel Korea contends that the averaging methodology used in these investigations was inconsistent with the United States' obligations to perform a "fair comparison" because the allegations of injury by petitioners, and the analysis of injury by the US International Trade Commission's, focused on post-devaluation imports. We cannot agree. In our view, the consistency of a determination of dumping with Article 2, including with any "fair comparison" requirement under Article 2.4, cannot depend upon how that determination is used in the context of an analysis of injury pursuant to Article 3. In this respect, we note that the final determination of injury in these investigations, as in all US anti-dumping proceedings, was not even made until well after the date of the final determination of dumping. Surely, a determination of dumping that was consistent with the provisions of Article 2 when it was made could not be rendered inconsistent by reason of the manner in which that determination was used for purposes of a subsequent injury analysis. Korea's argument in effect is that the DOC's use of multiple averaging masked the fact that there was no dumping after the devaluation, while the United States' injury determination was based precisely on injury suffered in the post-devaluation period. We note however that such a situation could easily arise whenever an investigating authority uses an average-to-average comparison methodology, and irrespective of whether it uses multiple averaging, because an average-to-average methodology informs only as to whether on average during the POI there was dumping, not whether there was dumping at any given moment in time within that POI. Thus, the issue raised by Korea relates not to the consistency of the calculation methodology with Article 2, but rather to whether a Member is somehow required by Article 3.5 to take account of the circumstances underpinning the final margin of dumping when considering whether "dumped imports are, through the effects of dumping, as set forth in paragraphs 2 and 4, causing injury". Korea has not however asserted any claim under Article 3.5 in its submissions, nor would such a claim be within our terms of reference. For the foregoing reasons, we conclude that the United States' use of multiple averaging periods in these investigations was not inconsistent with the first sentence of the chapeau of Article 2.4 of the AD Agreement ("fair comparison"). OTHER CLAIMS BY KOREA Claims under Article X of GATT 1994 and Articles 6 and 12 of the AD Agreement In addition to its claims under Article 2 of the AD Agreement, Korea has advanced a variety of claims pursuant to Article X:3(a) of the GATT 1994 and Articles 6.1, 6.2, 6.9 and 12.2 of the ADAgreement. In section VI.A.4 of this Report, having found that the United States did not act inconsistently with the relevant provisions of Article 2.4 in respect of the alleged "double conversion" of certain home market sales in the Plate investigation, we have proceeded to address Korea's claims under the above provisions. In respect of the other aspects the DOC's methodology in the Plate and Sheet investigations, however, we have found violations of Article 2 of the AD Agreement. Under these circumstances, we do not consider it necessary to address Korea's additional claims under the above provisions. Claims under Article VI of GATT 1994 and Article 1 of the AD Agreement Korea has also asserted that the United States has acted inconsistently with Article VI of the GATT 1994 and Article 1 of the AD Agreement, "which only permit anti-dumping measures to be imposed in the circumstances provided for in Article VI and pursuant to investigations conducted in accordance with the Anti-Dumping Agreement". We note that Korea's claims in respect of these two articles are dependent claims, i.e., Korea argues that because certain provisions of the AD Agreement have been violated, Article VI of the GATT 1994 and Article 1 of the AD Agreement are consequently violated. Because of their dependent nature, we can perceive of no useful purpose that would be served by ruling on these claims. Accordingly, we do not consider it necessary to address them. CONCLUSIONS AND RECOMMENDATION CONCLUSIONS In light of the findings above, we conclude that, with respect to "local sales": (a) the United States in the Plate investigation did not act inconsistently with its obligations under Article 2.4.1, Article 2.4 chapeau ("fair comparison"), and Article12.2 of the ADAgreement nor with its obligations under Article X:3(a) of GATT 1994; (b) the United States in the Sheet investigation acted inconsistently with Article 2.4.1 of the AD Agreement by performing a currency conversion that was not required. We further conclude that, with respect to the treatment of unpaid sales, the United States: (a) acted inconsistently with its obligations under Article 2.4 chapeau of the AD Agreement in both the Plate and Sheet investigations by making allowances in respect of sales through unaffiliated importers which were not permissible allowances for differences affecting price comparability; (b) acted inconsistently with its obligations under Article 2.4 chapeau of the AD Agreement in both the Plate and Sheet investigations by making allowances in respect of sales through an affiliated importer which were not permissible allowances in the construction of the export price for costs incurred between importation and resale. With respect to multiple averaging, we conclude that: (a) the United States' use of multiple averaging periods in the Plate and Sheet investigations was inconsistent with the requirement of Article 2.4.2 to compare "a weighted average normal value with a weighted average of all comparable export transactions"; (b) The United States' use of multiple averaging periods in the Plate and Sheet investigations was not inconsistent with Article 2.4.1 of the AD Agreement; (c) The United States' use of multiple averaging periods in the Plate and Sheet investigations was not inconsistent with the first sentence of the chapeau of Article 2.4 of the AD Agreement ("fair comparison"). Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed under a covered agreement, the action is considered prima facie to constitute a case of nullification or impairment of benefits under that agreement. Accordingly, we conclude that, to the extent that the United States has acted inconsistently with the provisions of the AD Agreement, it has nullified or impaired benefits accruing to Korea under that Agreement. RECOMMENDATION AND SUGGESTION In accordance with Article 19.1 of the DSU, we therefore recommend that the Dispute Settlement Body request that the United States brings its definitive anti-dumping duties on imports of stainless steel plate and sheet from Korea into conformity with the AD Agreement. Korea requests that the Panel suggest, pursuant to Article 19.1 of the DSU, that the UnitedStates revoke its anti-dumping orders on stainless steel plate and sheet from Korea. In support of its request, Korea identifies prior panel reports under the ϲʹ and Tokyo Round AD Agreements in which panels have suggested revocation of an anti-dumping order. Korea considers that Article 1 of the ADAgreement, which provides that "[a] anti-dumping measure shall be applied only under he circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated and conducted in accordance with the provisions of this Agreement", precludes the possibility that the United States could bring the anti-dumping measures into conformity without revocation. The United States considers that Korea seeks to convert the Panel's discretionary mechanism for suggesting ways that a Member could implement its recommendation into a device for obtaining a specific remedy that is inconsistent with established GATT/ϲʹ practice and the DSU. Further, it is impossible for the Panel to know whether a dumping analysis that conformed to the Panel's decision would result in a zero or de minimis margin such that revocation would be necessary in order to bring the measures into conformity. Finally, the United States considers that Korea's broad interpretation of Article 1 of the AD Agreement to require revocation of an anti-dumping measure regardless of the nature or magnitude of the violation would render meaningless the provision of Article 19.1of the DSU that the Member bring the measure into conformity. In considering Korea's request, we note first that Article 19.1 of the DSU gives this Panel the clear authority to "suggest ways in which the Member concerned could implement the recommendations". Thus, we do not accept the United States' proposition that a suggestion that a Member withdraw an anti-dumping measure would be inconsistent with the DSU. Nor do we consider that such a recommendation would be inconsistent or consistent with "established practice", as only a handful of ϲʹ panels under the AD Agreement have even addressed a request for a suggestion to revoke. Rather, we consider that Article 19.1 of the DSU allows but does not require a panel to make a suggestion where it deems it appropriate to do so. That we have the authority under Article 19.1 of the DSU to suggest revocation of an anti-dumping measure does not mean that we must or should do so in a given case. To the contrary, the ADAgreement is comprised of eighteen separate articles and innumerable obligations. Thus, violations of the AD Agreement may take many different forms and have different implications for the anti-dumping measure in question. In our view, Korea's contention that Article 1 of the AD Agreement dictates that any violation of the AD Agreement, irrespective of its nature and severity, requires the revocation of the anti-dumping measure is unsustainable. Although we do not agree that such an interpretation would render Article 19.1 of the DSU a nullity in the strict legal sense, we do believe that, had the drafters intended to deviate from the general rule of Article 19.1 and require revocation of anti-dumping measures in all cases of a violation, they would have manifested that intention through a special or additional dispute settlement provision in Article 17 of the AD Agreement. Turning to the case at hand, we recall that Korea's claims related to the determinations of the DOC regarding the margin of dumping. While we have found those determinations inconsistent with the AD Agreement in a number of respects, we cannot say that, had the DOC acted consistently with the AD Agreement, it would not have found the existence of dumping. Under these circumstances, while there can be little doubt that revocation would be one way that the United States could implement our recommendation, we are not prepared to conclude at this time that it is the only way to do so. Accordingly, we decline Korea's request to suggest that the United States revoke the anti-dumping duties at issue in this dispute.  WT/DS179/1.  WT/DS179/2.  WT/DS179/3.  Initiation of Antidumping Duty Investigations: Stainless Steel Plate in Coils from Belgium, Canada, Italy, Republic of South Africa, South Korea, and Taiwan, Federal Register Vol. 63, No. 80, at pages 20580-20585. Korea Exhibit 3.  Notice of Preliminary Determination of Sales at Less than Fair Value: Stainless Steel Plate in Coils from the Republic of Korea ("Preliminary Determination on Plate"), Federal Register Vol. 63, No. 213, at page 59536. Korea Exhibit 4.  In what follows, we only make reference to POSCO's participation in the investigation since Korea is not challenging the actions taken by the DOC with respect to the other Korean company.  Preliminary Determination on Plate, at page 59536. Korea Exhibit 4.  Preliminary Determination on Plate, at page 59539. Korea Exhibit 4.  Notice of Final Determination of Sales at Less than Fair Value: Stainless Steel Plate in Coils from the Republic of Korea ("Final Determination on Plate"), Federal Register Vol. 64, No. 61, at page 15444. Korea Exhibit 11.  Final Determination on Plate, at page 15456. Korea Exhibit 11  Antidumping Duty Orders: Certain Stainless Steel Plate in Coils from Belgium, Canada, Italy, the Republic of Korea, South Africa and Taiwan ("Anti-Dumping Duty Order on Plate"), Federal Register Vol. 64, No. 98, at page 27756. Korea Exhibit 13.  Anti-Dumping Duty Order on Plate, at page 27757. Korea Exhibit 13.  Initiation of Antidumping Duty Investigations: Stainless Steel Sheet and Strip in Coils from France, Germany, Italy, Japan, Mexico, South Korea, Taiwan, and the United Kingdom, Federal Register Vol. 63, No.133, at pages 37521-37528. Korea Exhibit 15.  Notice of Preliminary Determination of Sales at Less than Fair Value: Stainless Steel Sheet and Strip in Coils from South Korea ("Preliminary Determination on Sheet"), Federal Register Vol. 64, No. 1, at page 139. Korea Exhibit 16.  In what follows, we only make reference to POSCO's participation in the investigation since Korea is not challenging the actions taken by the DOC with respect to the other Korean companies.  Preliminary Determination on Sheet, at page 137, Korea Exhibit 16.  Preliminary Determination on Sheet, at page 147, Korea Exhibit 16.  Notice of Amended Preliminary Determination of Sales at Less than Fair Value: Stainless Steel Sheet and Strip in Coils from Korea, Federal Register, Vol. 64, No. 16, at page. 3930. Korea Exhibit 18.  Notice of Final Determination of Sales at Less than Fair Value: Stainless Steel Sheet and Strip in Coils from the Republic of Korea ("Final Determination on Sheet"), Federal Register Vol. 64, No. 109, at page 30665. Korea Exhibit 24.  Final Determination on Sheet, at page 30688. Korea Exhibit 24.  Notice of Antidumping Duty Order: Stainless Steel Sheet and Strip in Coils from the United Kingdom, Taiwan and South Korea ("Anti-Dumping Duty Order on Sheet"), Federal Register Vol. 64, No. 143, at page 40556. Korea Exhibit 26.  Anti-Dumping Duty Order on Sheet, at pages 40556-40557. Korea Exhibit 26.  The DOC statement that "it is more appropriate to use the won price in which the customer actually pays" is not entirely clear. Similarly, the import of the statement that "the customer pays in won not US dollars, and the sales value of the merchandise is charged to the sales ledger in won, based on the aforementioned exchange rate [i.e., the exchange rate on the date of invoice]", depends upon whether the final clause regarding exchange rates relates only to the sales ledger or also to the amounts paid.  See para 6.22, infra.  Guatemala Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico, WT/DS156/R, para. 8.22, adopted 17 November 2000.  United States Measure Affecting Imports of Woven Wool Shirts and Blouses from India ("UnitedStates Shirts and Blouses"), Appellate Body Report, WT/DS33/AB/R, adopted 23May 1997, p. 14.  European Communities Measures Concerning Meat and Meat Products ("EC Hormones"), Appellate Body Report, WT/DS26/AB/RWT/DS48/AB/R, adopted 13 February 1998, para. 104.  We note that this is the same standard as that applied by the Panel in Mexico Anti-Dumping Investigation of High Fructose Corn Syrup, Report of the Panel, WT/DS132/R, adopted 24 February 2000, which, in considering whether the Mexican investigating authorities had acted consistently with Article5.3 in determining that there was sufficient evidence to justify initiation, stated (para. 7.95): "Our approach in this dispute will be to examine whether the evidence before SECOFI at the time it initiated the investigation was such that an unbiased and objective investigating authority evaluating that evidence could properly have determined that sufficient evidence of dumping, injury and causal link existed to justify initiation."  Korea Exhibit 7, pp. 3-6; Korea Exhibit 20, pp. 3-6.  Korea also claimed, in footnote 142 to its first submission, that the United States breached Article2.4.1, which provides in its relevant part that currency conversions "should be made using the rate of exchange on the date of sale", by using the exchange rate on the date of sale for export (US) sales, rather than the exchange rate on the date of sale of the local sales themselves, when converting the won prices of local sales to dollars. (First Submission of Korea, para. 4.68, footnote 142, Annex 1-1). In response to a question from the Panel regarding this argument, however, Korea indicated that it was not necessary for the Panel to address the meaning of the word "should" in Article 2.4.1, because Korea was not arguing that the DOC was required to use a particular exchange rate, but rather that the DOC performed currency conversions that were not required. (Responses of Korea to Questions posed by the Panel and the United States at the first meeting of the Panel, Annex 1-4, Question 12 on currency conversion). Given this statement, and Korea's failure to pursue this issue elsewhere in its submissions, we conclude that Korea abandoned this putative claim. In any event, we note that Korea's request for establishment of a panel focuses exclusively on the issue of an unnecessary double conversion. (See WT/DS179/2). Thus, we doubt that any such claim would be within our terms of reference.  Oral Statement of the United States at the Second Meeting of the Panel, para. 48, Annex 2-6.  Final Determination on Plate, at pages 15455-15456, Korea Exhibit 11.  The original Korean submission referred to "date of sale". Korea however informed the Panel that his was a typographical error and that the reference should be to the "date of payment". Responses of Korea to Questions Posed by the Panel and by the United States. (Question 6 on currency conversion, Annex 1-4).  First submission of Korea, para. 4.64, Annex 1-1.  See First submission of Korea, paras. 3.51-3.53, Annex 1-1; Oral statement of Korea at the First meeting of the Panel, paras. 60-61, Annex 1-2; Second submission of Korea, paras. 128, 139-140, Annex 1-5; Oral statement at the second meeting of the Panel, paras. 81-84, Annex 1-6.  And sometimes also in won. See paragraph  REF _Ref497709894 \n \h 6.5, supra.  60 Fed. Reg. 6980, 7006 (6 February 1995). Korea Exhibit 52.  Ibid.  Responses of Korea to Questions Posed by the Panel at the Second Meeting of the Panel, (Questionon currency conversion, Annex 1-6).  Ibid. POSCO informed the DOC in its initial questionnaire response that it had "reported the actual invoiced price per metric ton in Korean Won. In the home market, POSCO made local letter of credit sales ("local sales")[footnote omitted] and domestic sales. All sales were paid in Korean Won and have been recorded in Korean Won on the database." US Exhibit 21.  When submitting revised data in response to a supplemental questionnaire in August 1998, POSCO noted that it had in addition made some "minor corrections", and had, inter alia, "added the US dollar sales price for local sales, as reflected on the invoices, for reference purposes". US Exhibit 38. Subsequently, in a supplemental questionnaire response on 16 October 1998, POSCO submitted a revised home market database to the DOC. It explained that "[t]he home market sales listing has also been modified to report local sales and related charges in the currency in which the sales and associated charges were incurred, i.e., US dollars, consistent with the Department's long-standing practice. [footnote omitted]. In POSCO's prior submissions, both the won and US dollar prices were reported for local sales." US Exhibit 43. In its case brief, POSCO pursued its argument that the price of local sales was negotiated and invoiced in US dollars. POSCO pointed to an exhibit collected by the DOC during verification as evidence that the order sheets for local sales reflected only dollar prices. POSCO further argued that "[l]ocal customers pay POSCO in Korean Won based on the US dollar invoiced price." (POSCO's arguments in this brief are summarized in the portion of the Final Determination quoted above). At no point in this brief, however, did POSCO indicate to the DOC that the won amount it had reported to the DOC initially, which appeared in the tax invoices, and which was based upon the application of the exchange rate prevailing on the date of invoice, differed from the won amount actually paid. Korea Exhibit 7, pp. 3-6. Nor does the petitioner's case brief indicate any awareness of this fact. To the contrary, the petitioner repeatedly asks the DOC to use "the won prices that POSCO's customers actually pay". Korea Exhibit 10, p. 1.  Responses of Korea and of the United States to Questions Posed by the Panel at the Second Meeting of the Panel. (Question 2 on currency conversion, Annexes 1-7 and 2-7).  It should be noted that, at the request of POSCO and over the opposition of the petitioners, the DOC found that the date of sale was the date of invoice and not the date of order. The DOC so found because there were changes in price for a significant proportion of shipments between the date of order and the date of invoice. Final Determination on Plate, p.15449, Korea Exhibit 11.  Memorandum to File re: Analysis for the final determination in the investigation of stainless steel plate in coils from Korea Pohang Iron and Steel Company, 19 March 1999 ("Plate Final Analysis Memorandum"), Korea Exhibit 12. This Memorandum was placed in the public file and is referenced in the Final Determination on Plate. The precise dates specified in the Memorandum are confidential information.  Ibid.  Final Determination on Plate, p. 15456, Korea Exhibit 11.  Final Determination on Plate, Korea Exhibit 11.  Final Determination in Sheet, p. 30678, Korea Exhibit 24.  Sheet Sales Verification Report, 6 April 1999, p. 14, Korea Exhibit 19.  Responses of the United States to Questions Posed by the Panel at the Second Meeting of the Panel, (Question 2 on currency conversion, Annex 2-7).  US Exhibit 41, pp. B-21, B-22.  POSCO stated that "[p]ayment is received on a letter of credit basis in dollars as well. Payment is booked in won with the difference in the exchange rate on the date sale and the date of payment recorded as a transaction gain or loss." US Exhibit 42. It is unclear why POSCO indicated that payment was received in dollars. However, the DOC determined, and POSCO did not subsequently dispute, that payment was in fact made in won.  Ibid.  We note that the local sales issue was briefed by the parties and decided by the DOC well after this date.  The fact that local sales were entered into POSCO's accounts in won is in and of itself of little significance. As Korea points out, all sales including dollar-denominated US sales are entered into Korea's books in won, and it keeps all its accounts in that currency.  As the petitioners argued before the DOC, "a respondent could quote understated dollar prices [in the home market]and then use an artificially high exchange rate to collect the 'real' amount being charged in the local currency". (Korea Exhibit 23, p. 5). Even in this case, however, an investigating authority presumably would use the actual won amounts paid where that amount differed from the nominal won amount appearing on certain invoices.  Sheet Final Analysis Memorandum, Korea Exhibit 25; Responses of the United States to Questions Posed by the Panel the Second Meeting of the Panel, question 7 on currency conversion, Annex 2-7.  Sheet Final Analysis Memorandum, Korea Exhibit 25, p.3. The differences relied upon by the DOC were of less than one percentage point.  As Korea points out, the Federal Reserve rates are based on rates prevailing in New York City at 12:00p.m. Given the 14-hour time difference, the Federal Reserve rates for a given day are not established until nine hours after close-of-business (17:00) in Seoul. Thus, some difference between the exchange rates is inevitable.  United States Shirts and Blouses, supra, p. 19.  Korea also suggests in its first submission (para. 4.70) that the United States acted inconsistently with Articles6.1, 6.2 and 6.9 of the AD Agreement in its treatment of local sales. It does not however identify any specific basis for these claims. In its second submission, Korea indicates in general terms that the UnitedStates' alleged Article 6 violations in this dispute arise where the DOC agreed with respondents on key issues in the preliminary determination but reversed position in the final determination. In respect of the local sales issue, however, this factual situation did not exist, as local sales were erroneously excluded from the preliminary determination altogether. Thus, we do not consider that Korea has made a prima facie case of violation of Article 6 in respect of local sales.  There can be no doubt that the US anti-dumping laws and regulations are "laws" and "regulations" of general application "pertaining to . . . rates of duty, taxes or other charges, or to other requirements, restrictions or other prohibitions on imports or exports" within the meaning of Article X:1 of GATT 1994.  DSU Article 3.2.  It is for this reason that both Article X:3(b) of GATT 1994 and Article 13 of the AD Agreement require Members to maintain appropriate judicial, arbitral or administrative tribunals or procedures.  United States - Shirts and Blouses, supra, p. 19.  Responses of the United States to Questions Posed by the Panel at the First Meeting of the Panel, question 2 on treatment of unpaid sales, Annex 2-4.  See Plate Preliminary Analysis Memorandum, Korea Exhibit 5, p.3.  Final Determination on Plate, p. 15445, at Korea Exhibit 11.  Plate Final Analysis Memorandum, pp. 8-9, Korea Exhibit 12. The memorandum indicates that an "amount associated with unpaid bankrupt sales" was included in the direct selling expenses ("DIREXPU"). A formula under the title "Constructed Export Price ("CEP") Calculation" indicates that the amount for direct selling expenses was deducted from the gross unit price ("GRSUPRU") in order to derive a net price ("NETPRIU").  Final Determination on Sheet, p. 30668, Korea Exhibit 24 (emphasis added).  Sheet Final Analysis Memorandum, p. 9, Korea Exhibit 25.  Korea Exhibit 1, p. 469.  19 C.F.R. Section 351.402(b), Korea Exhibit 2.  Korea Exhibit 1, p. 470.  Compare 19 C.F.R. Section 351.410(c)(defining "direct selling expenses" for purposes of circumstance of sale adjustments to mean "expenses that result from, and bear a direct relationship to, the particular sale in question"). Thus, while the DOC made adjustments in identical amounts for unpaid sales when calculating the margin of dumping in respect of export price and constructed export price sales, this does not mean, as argued by Korea, that these adjustments had the same legal basis.  It is clear to us that, if the DOC's actions in constructing an export price were consistent with ϲʹ requirements regarding such construction, then the DOC's actions would be ϲʹ-consistent whether or not those actions could also have been justified as adjustments for differences affecting price comparability.  First submission of the United States, para. 81, Annex 2-1 ("When comparing that export price [i.e., the price charged by POSCO to independent buyers] to normal value, the United States made an adjustment to normal value to account for differences affecting price comparability that was consistent with Article 2.4.")  New Shorter Oxford English Dictionary, Oxford University Press, 1993, p. 3253. The United States apparently agrees that "terms" in Article 2.4 refers to contractual terms, as it states that an ordinary meaning of "terms of sale" is "the situations and conditions that define the nature and extent of the sales contract (e.g., quantity, delivery)". First Submission of the United States, para. 83, Annex 2-1.  Id., p. 472.  First Submission of the United States, para. 83, Annex 2-1. Like the dictionary relied on by the United States, the Shorter Oxford English Dictionary identifies "State, mode of being" as one broad definition of the word "condition" (the other broad category being "A convention, proviso, etc."). For example, one may speak of the "human condition", or note that a person is "in no condition" to do something. Read in context, however, we doubt that this alternative meaning is applicable in the context of Article 2.4.  We note however that such a situation might more properly be considered to be an "other difference . . . affecting price comparability".  The United States concedes that there was no evidence in the record in either investigation that POSCO had any knowledge at the time of sale that ABC company was in a precarious financial situation. Responses of the United States to Questions posed by the Panel at the First Meeting of the Panel, (Question 2 on treatment of unpaid sales at the first meeting of the Panel, Annex 2-4).  The parties disagree as to whether a "difference in conditions and terms of sale" is by definition a difference affecting price comparability or whether, having established that such a difference exists, it is still necessary to determine that such a difference affects price comparability in order to make an adjustment. See responses of Korea and the United States to Questions Posed by the Panel at the Second Meeting of the Panel, (Question 6 on treatment of unpaid sales, Annexes 1-7 and 2-7). This is not however an issue we need resolve in this dispute.  The United States appears to have a similar view. Thus, it states that "[s]elling expenses such as warranty costs and bad debt not only reflect conditions of sale in the market, they are also an element of price.[footnote omitted]. Therefore, differences in such selling expenses affect price comparability". First Submission of the United States, para. 84, Annex 2-1.  The United States contended that the risk of non-payment "may differ between the two markets being compared and thus have different effects on prices in the two markets. Because it is the only practical means and a method as reasonable as any other of making a due allowance for any such difference, we base the allowance on the company's actual bad debt experience in the two markets during the period of investigation.[footnote omitted] That is, we rely on the actual bad debt expenses the company recognizes with respect to each of the two markets being compared." Responses of the United States to Questions Posed by the Panel at the Second Meeting of the Panel. (Question 8 on bad debt, Annex 2-4).  Although in our view the existence of different levels of non-payment during prior periods would appear to be much more relevant.  Final Determination on Plate, p. 15448, at Korea Exhibit 11; Final Determination on Sheet, p. 30674, Korea Exhibit 24.  The United States contends that, "during the period of investigation, POSCO actually recognized greater bad debt expenses, as a proportion of sales, in the US market than in the Korean market. This evidence would indicate that POSCO should be charging higher prices in the US market than in the Korean market." In the absence of any evidence in the record that the level of non-payment in the US market was foreseeable or that the historical risk of non-payment was higher in the US than the Korean market, the conclusion that POSCO should have been charging higher prices in the US than in the Korean market seems unwarranted.  In response to a question from the Panel, the United States stated that "Because bad debt falls within the meaning of 'conditions and terms of sale', we have not relied on the reference in Article 2.4 to 'any other differences' demonstrated to affect price comparability. That does not constitute a concession that bad debt could not fall within 'other differences'". Responses of the United States to Questions Posed by the Panel at the First Meeting of the Panel, (Question 5 regarding unpaid debt, Annex 2-4).  In light of our conclusion on this issue, we need not address Korea's additional argument that the allocation by the DOC of the cost of unpaid sales of ABC Company over all US sales to all customers is inconsistent with Article 2.4 because the failure of one company to pay did not affect the price comparability of sales to other customers who did pay for their purchases.  Second Submission of the United States, para. 22, Annex 2-5.  Responses of the United States to Questions Posed by the Panel at the Second Meeting of the Panel, (Question 2 on unpaid sales, Annex 2-7).  Argentina Safeguard Measures on Imports of Footwear, Appellate Body Report, WT/DS121/AB/R, adopted 1 January 2000, para. 74.  Responses of Korea to Questions Posed by the Panel at the Second Meeting of the Panel, (Question 2 on unpaid sales, Annex 1-7).  WT/DS179/2.  Article 6.2 of the DSU provides that the request for the establishment of a panel "shall provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly." The Appellate Body has observed that: "Identification of the treaty provisions claimed to have been violated by the respondent is always necessary both for the purposes of defining the terms of reference of a panel and for informing the respondent and the third parties of the claims made by the complainant; such identification is a minimum prerequisite if the legal basis of the complaint is to be presented at all." Korea - Definitive Safeguard Measure on Imports of Certain Dairy Products, Appellate Body Report, WT/DS98/AB/R, adopted 12 January 2000, para. 124.  The issue identified by Korea in Argentina - Footwear related to Article 4.2(c) of the Agreement on Safeguards, which requires a Member to publish certain information "in accordance with Article 3" of that Agreement. The Appellate Body concluded that, in considering a claim under Article 4.2(c), the Panel was permitted, and in fact was obliged by Article 4.2(c), to take into account the provisions of Article 3 of that Agreement. The Appellate Body did not conclude that a claim under Article 3 was within the Panel's terms of reference.  E.g., Oral statement of the United States at the Second Meeting of the Panel, para. 19, Annex 2-6.  The United States' perception seems to be based on the assumption that there is a watertight separation between the provision relating to construction of the export price (Article 2.3) and that relating to comparison between export price/constructed export price and normal value (Article 2.4). It is evident from the face of the text, however, that the rules regarding allowances related to construction of the export price are found in the paragraph relating to comparison.  Responses of the United States to Questions Posed by the Panel at the Second Meeting of the Panel, (Question 2 on unpaid sales, Annex 2-7).  But see United States Tax Treatment for Foreign Sales Corporations, Appellate Body Report, WT/DS108/AB/R, adopted 20 March 2000, footnote 124.  It can be assumed that a Member will use this authorization where appropriate without being legally constrained to do so. By contrast, the AD Agreement provides that due allowance "shall" be made for differences affecting price comparability. Mandatory language is used here because the failure to make such allowances could generate or inflate dumping margins to the detriment of the interests of other Members.  That the use of the non-mandatory phrase "should" does not support the conclusion advanced by the United States can be confirmed by replacing "should" with another non-mandatory term, "may". That a Member "may" make certain allowances would indicate that the Member was authorized but not required to make those allowances. It does not follow, however, that the Member was free also to make any other allowances not within the scope of the authorization. Cf . United States Anti-Dumping Act of 1916, Appellate Body Report, WT/DS136/AB/R-WT/DS162/AB/R, adopted 26 September 2000, paras. 112-117 (that ArticleVI:2 of GATT 1994 makes imposition of anti-dumping duties permissive does not mean that a Member may impose measures other than anti-dumping duties to counteract dumping).  As the Appellate Boy stated in United States Standards for Reformulated and Conventional Gasoline, "[a]n interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to inutility." Appellate Body Report, WT/DS2/AB/R, adopted 20 May 1996, p. 23.  It is clear, and the United States does not dispute, that this deduction was not an allowance for "profits accruing".  The New Shorter Oxford English Dictionary, Oxford University Press, 1993, p. 221.  As the Appellate Body has noted, "dictionary meanings leave many interpretive questions open." Canada Measures Affecting the Export of Civilian Aircraft, Appellate Body Report, WT/DS70/AB/R, adopted 20 August 1999, para. 153.  Responses of the United States to Questions Posed by the Panel at the Second Meeting of the Panel, (Question 5 on unpaid sales, para. 27).  Oral Statement of the EC at the First Meeting of the Panel, para. 9, Annex 3-3.  In order to protect information for which Korea requests confidential treatment, we do not here identify the precise share of sales concerned.  The DOC found in both determinations that POSCO was not aware at the time of sale that the customer would declare bankruptcy. Final Determination on Plate, p. 15449, at Korea Exhibit 11; Final Determination on Sheet, p. 30674, at Korea Exhibit 24.  Responses of the United States to Questions Posed by the Panel at the First Meeting of the Panel, (Question 11 of the Panel on treatment of unpaid sales, Annex 2-4).  United States Shirts and Blouses, supra, p. 18.  We note that insertion of the word "comparable" into Article 2.4.2 represented the only modification to that Article between the date of the Draft Final Act and the text as adopted. See Draft Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, MTN.TNC/W/FA, 20 December 1991. This suggests that its inclusion was not merely incidental but reflected careful consideration by the drafters.  Korea considers that the chapeau to Article 2.4 creates a fair comparison requirement that is independent of the other requirements of Article 2.4. The United States contends that, while the first sentence of Article 2.4 establishes a requirement to make a "fair comparison", the remainder of Article 2.4 defines how such a comparison is made.  See Oral Statement of Korea at the Second Meeting of the Panel, para. 44, Annex 1-6 ("Article 2.4.2 does not require one average of every single home-market sale and another average of every single export sale. Rather, it requires a single average for all comparable transactions."); Second Submission of the United States, para. 43, Annex 2-5 ("Article 2.4.2 clearly permits creation of multiple averages where transactions are not comparable.")  Final Determination on Plate, p. 15452, Korea Exhibit 11.  Final Determination on Sheet, p. 30676, Korea Exhibit 24.  19 CFR Section 351.414(d)(3).  The New Shorter Oxford English Dictionary, Oxford University Press, p. 457.  We recall that Korea and the United States have identified other provisions of Article 2 that they agree justify the use of multiple averaging based, for example, on differences in level of trade and differences in physical characteristics. The United States also argues that it is appropriate to use multiple averaging in the case of hyperinflationary economies. These other forms of multiple averaging are not at issue in this dispute.  As an additional contextual argument, Korea argues that devaluation cannot be considered to affect comparability because there is no provision in the AD Agreement specifying that sales made at one exchange rate cannot be compared with sales at another exchange rate. Rather, the only provision of the AD Agreement that addresses exchange rates is Article 2.4.1, which the United States concedes does not establish a limit on what sales may be considered comparable. We do not however place any weight on Korea's argument in this respect. In our view and absent the unusual situation of multiple exchange rates there will at any given moment in time be only one exchange rate. Thus, any problem of comparability does not relate to exchange rates per se, but rather to differences in timing of sales. Thus it is on this issue that we focus.  The United States goes so far as to suggest that the AD Agreement could be interpreted as expressing a preference for daily averages. Second Submission of the United States, para. 47, Annex 2-5.  The United States' argument seems to be posited on its view that the best comparison for measuring dumping is a transaction-to-transaction comparison, and that average-to-average comparisons are a second-best approach allowed because of practical problems with the transaction-to-transaction methodology. See US answer to question 2 from the Panel posed at the second meeting of the Panel with the parties. We perceive no valid textual basis for such a conclusion, however. To the contrary, the AD Agreement sets forth two options for a comparison methodology average-to-average and transaction-to transaction and expresses no preference between them.  A particularly dramatic example of this situation would arise where, during a substantial portion of the POI, there were no sales in one of the two markets.  The combination of these two factors could even result in a situation where, although at any given moment in time throughout the POI, the exporter was charging an identical price (after all appropriate allowances had been made), a margin of dumping could nevertheless be found to exist. For example, imagine that there were two home market sales (HM-1 and HM-2) and two export sales (EX-1 and EX-2) during the POI. HM-1 and EX-1 occurred on day 1 and were both at a price of $10. HM-2 and EX-2 occurred on day 90 and were both at a price of $15. Thus, neither of the individual export transactions was dumped when compared to the simultaneous home market transactions. If all these sales were in the same volumes, then a weighted average to weighted average would also show no dumping. Assume however that HM-1 and EX-2 involved a volume of ten units, while HM-2 and EX-1 involved a volume of twenty units. In this case, the weighted average normal value would be (10 units x $10/unit) + (20 units x $15/unit) = $400/30 units = $13.33/unit. The weighted average export price would be (20 units x $10/unit) + (10 units x $15/unit) = $350/30 units = $11.27/unit. Thus, the weighted average margin of dumping would be 18 per cent.  As Korea explained, "[a]s long as the sales in both markets are spread in a similar manner throughout the period, the averaging process will result in an average home-market sale and an average export sale made, on average, at the same time. Thus, the averaging process necessarily takes care of the timing requirement of Article 2.4 (unless the sales in the two markets are weighted disproportionately in different parts of the period)." Oral Statement of Korea at the Second Meeting of the Panel, para. 58, Annex 1-6.  During the course of this dispute, the methodology used by the United States to derive a single dumping margin on the basis of the calculations for each sub-period was also placed at issue by Korea. In Korea's view, "splitting the period, calculating separate averages for the sub-periods, 'zeroing out' the negative averages and recombining the separate averages into an overall dumping margin were all part of a single methodology" described in Korea's request for establishment of a panel and thus within our terms of reference. In the view of the United States, the methodology challenged by Korea was limited to the division of the POI into two sub-periods and the calculation of separate weighted average normal values for each sub-period. See Responses of Korea and the United States to Questions Posed by the Panel at the Second Meeting of the Panel, question 1 on multiple averaging, Annexes 1-7 and 2-7. Korea further indicated, however, that "[i]f the Panel finds that it was improper for the United States to split the investigation periods . . . then zeroing simply disappears from this case". Ibid. Having so found, we need not further address this issue.  The provision relied upon by Korea is the language in Article 2.4.1 stating that, "in an investigation the authorities shall allow exporters at least 60 days to have adjusted their export prices to reflect sustained movements in exchange rates during the period of investigation". Korea is in effect asking us to read this provision to further say that "in an investigation the authorities shall take no actions to address currency depreciations". We can perceive no textual basis to imply such an additional rule into Article 2.4.1.  For that matter, even in cases where a transaction-to-transaction methodology is used, the final margin of dumping for a given exporter will not inform as to whether sales at any given moment during the POI were dumped.  We are not of course expressing any view here as to the proper interpretation of Article 3.5. We note in passing, however, that the use of multiple averaging periods in these investigations would have facilitated, rather than impeded, any such analysis, by making available information regarding the existence of dumping both pre- and post-devaluation.  Article 3 is nowhere mentioned in Korea's request for establishment of a Panel. See WT/DS179/3. It is well established that the identification of the relevant treaty provision is a "minimum prerequisite" under Article 6.2 of the DSU. See EC Bananas, supra at para.  REF _Ref497801304 \n \h 6.84.  First Submission of Korea, para. 5.7, last tiret, Annex 1-1.  The only exception involves Korea's claim of a violation of Article VI:1 in respect of due allowances for differences affecting price comparability. Korea however identified no basis for concluding that Article VI:1 imposes any obligation in this respect beyond that imposed by Article 2.4.1 of the AD Agreement.  Compare Guatemala Anti-Dumping Investigation Regarding Portland on Cement From Mexico, Report of the Panel, WT/DS60/R, para. 8.6, reversed on other grounds, WT/DS60/AB/R and Guatemala Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico, WT/DS156/R, para. 9.6, adopted on 17November 2000 (Panels suggest revocation in the context of a ϲʹ-inconsistent initiation) to United States Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMs) of One Megabit and Above from Korea, WT/DS99/R, para. 7.4, adopted 19 March 1999 (request for a suggestion to revoke was denied "in light of the range of possible ways in which we believe the [defendant] could appropriately implement" the recommendation).  Because, inter alia, Article 19.1 would of course continue to operate in disputes relating to measures other than anti-dumping measures.  Nor would it be appropriate for the Panel to try to recalculate the margin itself in light of its conclusions.  Cf. United States Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway, ADP/87, adopted 27 April 1994, para 596 (Panel under Tokyo Round AD Code declined to recommend revocation because "[I]t could not be presumed that a methodology of calculating dumping margins consistent with the Panel's findings on these aspects would necessarily result in a determination that no dumping existed . . . .") 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