Page 620 - MANUAL OF SOP

Relevant Wto Jurisprudence

contribution' and 'benefit', was intended specifically to prevent the
countervailing of benefits from any sort of (formal, enforceable) government
measures, by restricting to a finite list the kinds of government measures
that would, if they conferred benefits, constitute subsidies. The negotiating
history confirms that items (i)-(iii) of that list limit these kinds of measures to
the transfer of economic resources from a government to a private entity.
Under subparagraphs (i)- (iii), the government acting on its own behalf is
effecting that transfer by directly providing something of value – either
money, goods, or services – to a private entity. Subparagraph (iv) ensures
that the same kinds of government transfers of economic resources, when
undertaken through explicit delegation of those functions to a private entity,
do not thereby escape disciplines."

24.115. In US – Carbon Steel (India), (DS-436) the Appellate Body referred to
its findings in US – Anti-Dumping and Countervailing Duties (China) and recalled
that "the mere ownership or control over an entity by a government, without more,
is not sufficient to establish that the entity is a public body". The Appellate Body
added:
"In determining whether or not a specific entity is a public body, it may be
relevant to consider 'whether the functions or conduct are of a kind that
are ordinarily classified as governmental in the legal order of the relevant
Member.' The […] classification and functions of entities within WTO
Members generally may also bear on the question of what features are
normally exhibited by public bodies.
24.116. In US – Tax Incentives, the Appellate Body elaborated on the role of
Article 3 of the SCM Agreement. It clarified that the "granting of subsidies is not,
in and of itself, prohibited under the SCM Agreement; nor does the granting of
subsidies constitute, without more, an inconsistency with that Agreement". It
further added:

"Only subsidies contingent upon export performance within the meaning
of Article 3.1(a) (commonly referred to as export subsidies), or contingent
upon the use of domestic over imported goods within the meaning of
Article 3.1(b) (commonly referred to as import substitution subsidies), are
prohibited per se under Article 3 of the SCM Agreement. In any event,
subsidies, if specific, are disciplined under Part III of the SCM Agreement,

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