[III]. THE OFFICIAL NOTIFICATION NO.

21/2019 IS IN ACCORDANCE WITH

ARTICLE III:8(a) OF GATT.

The counsel humbly submits that the reduction of annual electricity bill and allocation of land
vide Official Notification No. 21/2019 (hereinafter ‘Notification’) accords favourable
treatment to data centres using domestic technologies. However, these incentives fall within
the ambit of Article III:8(a) which stipulates the exception for governing the procurement of
products by governmental agencies. In the present case the data is being procured by the
Government of Anduin for the implementation of Social Credit Plan.

Article III:8(a) is a derogation of the National Treatment obligations dealt in Article III. 1 Local
content requirements which supports domestic firms constitute derogation of national
treatment. The measure i.e. Notification is a local content requirement. Since, local content
measures are the policies imposed by the government to give incentives which require the firms
to use domestically manufactured goods or supplied services to operate in an economy.2

The counsel humbly submits that the measure for procurement of data under the Social Credit
Plan and the data localisation norms under The Act are not mutually exclusive. Large
information intermediaries such as social media firms provide communication platform to
millions of users globally and generally observe the laws of the country where they have
physical operations.3 This connotes that countries hosting intermediary data centres and offices
have claim of jurisdiction over the data stored in their ‘territory’.4 Thus, the foreign social
media firms such as B-connected having local offices are hosted by Anduin and the
government of Anduin through The Act had jurisdiction over the data stored in the country.
Through the Social Credit Plan, they procured certain types of data which they deem fit for the
assessment of “social standing” of refugees5. Thus, the Social Credit Plan should not be
assessed without The Act and the official notification following after The Act as they are
connected with each other.

1
Appellate Body Report, Canada - Certain Measures Affecting The Renewable Energy Generation Sector, para.
5.56, WTO Doc. WT/DS412/AB/R (adopted May 6, 2013).
2
Hannah Deringer, Fredrik Erixon, Philipp Lamprecht & Erik van der Marel, The Economic Impact of Local
Content Requirements: A Case Study of Heavy Vehicles, ECIPE OCASSIONAL PAPER, Jan. 2018, at 4.
3
Tatevik Sargsyan, Data Localization and the Role of Infrastructure for Surveillance, Privacy, and Security,
Int. J. Commun. 2221, 2224 (2016)
4
Id.
5
Clarification, Question 41.
[A]. THE IMPORTED AND CONCERNED DOMESTIC PRODUCTS FULFILLS THE
REQUISITES OF ARTICLE III:8(a).

It is contended that Article III:8(a) "becomes relevant only if there is discriminatory treatment
of foreign products that are covered by the obligations in Article III". 6 To determine
discriminatory treatment between foreign and domestic products, likeness and competitive
relationship is required to analysed.7 The counsel humbly submits that the subsequent segment
deals with the likeness [A.1]. discriminatory treatment and competitive relationship [A.2].
between imported and domestic concerned products.

[A.1]. The Imported and Domestic Concerned Products are Like Products.

The determination of whether products are ‘like products’ is, fundamentally, a determination
about the nature and extent of the competitive relationship between and among those products
in a particular market. Likeness is determined by a holistic consideration of certain criteria.8 In
the case of Argentina Financial Services9, the Appellate Body provided a basic approach for
analysing ‘likeness’ in the context of trade in goods. The counsel humbly contends that to
provide a ‘fair assessment’ of different elements that constitute a ‘like product’, the
interpretation should be examined on a case-by-case basis. This will involve an individual,
discretionary judgement considering various characteristics of the products.10

Therefore, it is of important to note that the foreign and domestic equipment for data centres
had same end uses [A.1.1] and consumers’ perception along with behaviour in respect to the
product is also same [A.1.2].

[A.1.1]. The end uses of products.

6
Appellate Body Report, Canada - Certain Measures Affecting The Renewable Energy Generation Sector, para.
5.63, WTO Doc. WT/DS412/AB/R (adopted May 6, 2013)
7
Appellate Body Report, Argentina – Financial Services, para. 6.22, WTO Doc. WT/DS453/AB/R (adopted
Apr. 14, 2016)
8
Appellate Body Report, European Communities – Measures Affecting Asbestos and Products Containing
Asbestos, para. 101-103, WTO Doc. WT/DS135/AB/R (adopted Mar.12, 2001)
9
Appellate Body Report, Argentina – Financial Services, para. 6.30,WTO Doc. WT/DS453/AB/R (adopted Apr.
14, 2016).
10
Appellate Body Report, Japan – Taxes on Alcoholic Beverages-II, para. 47, WTO Doc. WT/DS8/AB/R
(adopted Oct. 4, 1996).
It is submitted that the criterion of end use of products is based on the product’s capability of
performing the same, or similar, functions.11 The equipment had the sole purpose of furnishing
adequate infrastructure for the establishment of data centre. Thus, it is important to note that
end use of products, which is, “establishment of data centres”, remains same for both imported
equipment and domestically produces equipment.12

[A.1.2]. Consumers may use domestic and imported products interchangeably.

It is contended that consumers’ perception and behaviour is established by the extent to which
consumers are willing to use the products to perform their functions i.e. end use of product.13
Consumers’ i.e., social media firms in this case, use the product for similar purpose which is,
building the data centres. Since the purpose of using the equipment is same it indicates the will
of consumers to choose between imported or domestically produced like products.

[A.2]. The Measure accords Favourable Treatment to Domestic data centre equipment.
The Notification required every data centre to use 50 percent of domestically produced
equipment in order to avail certain benefits including exemption on annual electricity bill and
allocation of favourable land in colder regions. The measure therefore, affected the competitive
relationship between the domestic and foreign equipment used for data centres by supporting
the domestic equipment through the Notification.

[B]. THE MEASURE BROUGHT INTO EFFECT VIDE NOTIFICATION NO. 21/2019
FALLS UNDER THE SCOPE OF ARTICLE III:8(A) OF GATT.

"Article III:8(a) establishes a derogation from the national treatment obligation of Article III
for government procurement activities falling within its scope. Measures satisfying the
requirements of Article III:8(a) are not subject to the national treatment obligations set out in
other paragraphs of Article III.”14

11
Appellate Body Report, European Communities – Measures Affecting Asbestos and Products Containing
Asbestos, para. 117, WTO Doc. WT/DS135/AB/R (adopted Mar.12, 2001).
12
Moot Proposition, para. 27.
13
Appellate Body Report, European Communities – Measures Affecting Asbestos and Products Containing
Asbestos, para. 117, WTO Doc. WT/DS135/AB/R (adopted Mar.12, 2001).
14
Appellate Body Report, Canada - Certain Measures Affecting The Renewable Energy Generation Sector, para.
5.56, WTO Doc. WT/DS412/AB/R (adopted May 6, 2013)
To justify the implementation of Article III:8(a), the Appellate Body in Canada - Renewable
Energy has provided issues to be dealt with. These issues will be addressed by the counsel in
the form of three questions which are: -

[Q.1] Whether the challenged measures can be characterized as 'laws, regulations or

requirements governing procurement';

[Q.2] Whether the challenged measures involve 'procurement by governmental agencies'; and

[Q.3] Whether any 'procurement' that exists is undertaken 'for governmental purposes and not
with a view to commercial resale or with a view to use in the production of goods for
commercial sale'.15

[B.1] The Measure is a Requirement Governing Procurement.

The counsel humbly put forth that a ‘Requirement’ is said to exist if the obligations are such
that an enterprise is legally bound to carry them out. It includes voluntarily acceptance to obtain
an advantage from the government.16 The Notification, released by the Government of Anduin
for the implementation of data localisation requirements, provided an exemption from payment
a part of annual electricity bill and provision of land in cooler regions of Anduin. In order to
avail these benefits, it was necessary to carry the obligations listed therein, including usage of
50 percent of domestic technology equipment. These incentives were accorded since the data
is procured for the Social Credit Plan which was mandatory.17

Article III:8(a) read in the context of the other paragraphs of Article III requires the product
procured and the product discriminated against to be in a competitive relation.18 The Appellate
Body in Canada – Renewable Energy case identified the ‘process and production method’
which constitute an examination of competitive relationship. 19 The present case is similar to
Canada – Renewable Energy case, where the procurement was of electricity and the various

15
Appellate Body Report, Canada - Certain Measures Affecting The Renewable Energy Generation Sector, para.
7.24-7.25, WTO Doc. WT/DS412/AB/R (adopted May 6, 2013)
16
Panel Report, India – Measures Affecting the Automotive Sector, para. 7.191, WTO Doc. WT/DS146/R
(adopted Dec. 21, 2001)
17
Moot proposition para. 31.
18
Holger Heystermeyer, The Legality of Local Content Measures under WTO Law, J.W.T. 553, 577, (June,
2014).
19
Aditya Sarmah, Renewable Energy And Article III:8(a) Of GATT: Reassessing The Environment- Trade
Conflict In Light Of The ‘Next Generation’ Cases, 9(2) TRADE L. & DEV. 314, 327-28 (2017)
measures were imposed on the ‘instruments of electricity generation’.20 Consequently the Panel
Report held that, the electricity purchased by the government was produced by the solar energy
GE (instruments of electricity generation) which constitutes a nexus between the two products
thus it comes within the ambit of Article III:8(a).21 In the present case the procurement was of
data and the measures were imposed upon the equipment of data centres thus it is obvious to
consider the equipment under the ambit of Article III:8(a).

[B.2]. The Measure Involves Procurement by Governmental agencies.

The Social Credit Plan aimed to procure data from various sources including governmental
database and social media providers to monitor the social behaviour of refugees in zones and
assign credit scores to them. The plan was introduced by the Ministry of Human Resources of
Anduin by releasing a White Paper detailing the Social Credit Plan. According to this document
the Social Credit Plan would be run by governmental agencies.22

[B.3]. The Measure Was Undertaken 'for Governmental Purposes and not with a view to
Commercial Resale or with a view to use in the Production of Goods for Commercial
sale'.
The Notification No. 21/2019 aimed to provide benefit to the social media firms using domestic
technology in the form of 5% rebate in annual electricity bill and allocation of land in colder
region. The counsel humbly submits that the Government of Anduin had no intention to sell
the data procured from the social media firms, rather it aimed to use the data to monitor the
social behaviour of refugees in the zones and assign credit scores to them. The credit scores
determined the character of an individual with respect to the allotment of citizenship in Anduin
under the Social Credit Plan.23 The Government also used the data to keep check on the
criminal activities such as fraud and embezzlement of funds, travelling in public transport
without tickets, leaving the zones without permission, engaging in criminal activities in the
zones, spreading fake news, and activities on social media.24 The procurement of data and the
surveillance over the social media platform became necessary when Anduin was placed on
high security alert in consequence of terrorist attacks. The Security Intelligence Unit confirmed
that the terrorist attacks in Anduin was panned through the internal messaging system of B-

20
Id. at 327
21
Id. at 328
22
Moot proposition para. 30
23
Id.
24
Id.
Connected. The above circumstances left Anduin no choice but to implement strict data
localization requirements and data procurement regulations to protect the security interests of
its country.

The counsel therefore sufficiently establishes that the measures brought in by the government
of Anduin through the Official Notification No.21/2019 was well within the scope of Article
III:8(a). This article deals with the procurement by government agencies for their own purposes
and not for commercial resale. Furthermore, the counsel has demonstrated that the foreign and
domestic equipment are like product and through the measure the domestic products are being
benefitted. Hence, the measure being utilised for the procurement of data under the Social
Credit Plan, is a derogation of national treatment and thus falls within the ambit of article
III:8(a) of GATT.