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Dispute Settlement SystemDispute settlement is a central piece of the WTO system. It makes trade rules more effective since in case a Member considers that a benefit accruing to it has been nullified or impaired by another Member, it may seek proper enforcement of the rules through the dispute settlement system. When speaking of "dispute settlement system", reference is made to a "panel", i.e. a kind of tribunal which decides on the case through rulings and recommendations which parties to the dispute must observe. Rules for the settlement of disputes under the WTO are contained in the Dispute Settlement Understanding ('DSU'). The DSU was negotiated during the Uruguay Round. Prior to the Uruguay Round, the framework for the dispute settlement was exclusively constituted from Articles XXII and XXIII of GATT. The negotiation of a specific agreement for the settlement of disputes is a great achievement in the history of the GATT/WTO. The DSU sets out in detail the procedure and the timetable which must be followed in case of disputes, which makes the dispute settlement mechanism more transparent and predictable. It also makes it impossible for a Member to block the adoption of rulings or recommendations. The negotiation of the DSU was central in view of the increasing number and the increasing complexity of the disputes.
According to Article XXIII GATT, recourse to the dispute settlement system may be made in case a country considers that "a benefit accruing to it directly or indirectly is being nullified or impaired". It is not necessary that a violation actually takes place to have recourse to the dispute settlement system. Traditionally, a distinction is made between violation complaints and non-violation complaints. Non-violation complaints are cases where a benefit is considered to be nullified or impaired by the conduct of another Member, without violation of an Agreement taking place. Needless to say, in most cases, disputes concern violations of a WTO Agreement. For example, in the various disputes concerning anti-dumping measures, complaints are made on the basis of alleged violations of the AD Agreement. The procedure for the dispute settlement is detailed in the DSU. The procedure starts necessarily with consultations between parties to a dispute. If consultations fail, the complaining party can request to the Dispute Settlement Body (DSB), which consists of all WTO Members, the establishment of a panel of experts to consider the dispute. The Panel is composed of three experts, called "panellists" which are chosen by the secretariat in consultation with the members to the dispute. The Panel should normally transmit its final report to the parties within six months from the establishment of the Panel. Each litigating party is entitled to appeal the findings of the Panel before the Appellate Body. Appeals can only concern points of law or legal interpretation included in the Panel's report. The Appellate Body can uphold, modify or reverse the Panel's findings and conclusions. The proceedings before the Appellate Body shall normally not exceed 60 days from the date a party formally notifies its decision to appeal a panel's report, and in any case never 90 days. The reports of the Panel and/or Appellate Body containing recommendations will be adopted by the DSB. The Member concerned should ensure prompt compliance with the recommendations or rulings of the DSB regarding the dispute. If the "losing" party fails to comply with the rulings or recommendations within the reasonable period determined, parties to the dispute have to enter into bilateral negotiations in order to find a mutually-acceptable compensation. If, no solution for compensation has been agreed by the parties, the "winning" party may request the DSB to give it the authorisation to suspend concessions or obligation vis-à-vis the "losing" party. Office of the General Counsel
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