INTRODUCTION

Proceedings

On 23 July 2001, the European Communities (EC) and the United States (hereinafter also the “parties”) notified to the Dispute Settlement Body (DSB) their mutual agreement to resort to arbitration pursuant to Article 25 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (hereafter the “DSU”). The stated object of the arbitration was to determine the level of nullification or impairment of benefits to the European Communities as a result of the operation of Section 110(5)(B) of the US Copyright Act.

The parties have resorted to this arbitration further to the adoption by the DSB of the report of the panel which, at the request of the European Communities, reviewed the compatibility of Section 110(5) of the US Copyright Act, as amended by the Fairness in Music Licensing Act of 1998, with the Agreement on Trade-Related Aspects of Intellectual Property Rights. The conclusions and recommendations of the panel read as follows:

The parties requested the Chairman of the DSB to contact the original panelists in the dispute, to determine their availability to serve as arbitrators. The Chairperson of the original panel, Mrs. Carmen Luz Guarda and one Member, Mr. A. V. Ganesan, were no longer available.