Statement of Facts

Alderaan and Coruscant are developed countries and members of WTO. Alderaan is home to
60% of the world’s Neodymium reserves; a key input material in PMG manufacturing i.e.
consumed domestically and is exported as well.

In 2015, in a WHO report, it was highlighted that neodymium mining carried important
health risks for humans, animals, and plants alike. Its extraction creates dust and toxic waste
that has a detrimental impact over air, water bodies, soil, and land inter alia. Thus, it decided
to move away from neodymium mining.

In 2016, the ‘Green Hope Strategy’ was unveiled which aims to make Alderaan a world
leader in sustainability and to shift away from extraction and export of basic commodities, in
particular neodymium. Subsequently, an export tax of 25% was imposed on all the
neodymium extracted in Alderaan, to encourage the windmill industry worldwide to reduce
their reliance on unsustainable and damaging raw materials such as neodymium. It also
started monitoring its exports of neodymium through export registration.

Special Electrix, Alderaan’s largest PMG producer and a worldwide PMG market player,
invested heavily in research and development to develop more efficient and less damaging
PMGs. In late 2017, it made a breakthrough when it was able to fully replace neodymium
with kyber, a mineral whose extraction has a limited impact on the environment and human
health. The new technology was named Saberlite. To meet the newly found kyber demand of
Special Electrix, Alderaan initiated discussions with Tatooine over extracting Tatooine’s
kyber reserves. In June 2018, Alderaan and Tatooine reached an understanding whereby
Tatooine would create a special development zone in the Jundland Wastes. The ownership of
the land of this zone would be sold to Alderaan and sold to Investerix. Alderaan agreed to
provide USD 1 billion to finance infrastructure investments to develop the zone. Investerix
would also transfer 5% of the profits derived from the zone to the government of Tatooine
while being responsible for ensuring security within the zone.

In early 2019, several industrial companies, domestic as well as foreign, purchased the rights
and installed production lines within the Jundland Special Development Zone. Following its
purchase of the land, Investerix has developed infrastructure and connectivity for the zone
and its business model was now to sell land use rights for $10 per square meter per year over
75 years. Then in January 2019, Special Electrix incorporated a fully-owned subsidiary,
namely Desertix, under Tatooine law which sought to purchase the full ownership of the land
from Investerix. This purchase was financed by Zurix Bank, a private bank in Alderaan in
which its government holds no share.
By January 2020, Desertix was able to start commercializing the SaberLite PMGs and
became an immediate success. This has attracted international rivalry as Coruscant is still
dependent on Neodymium exports of Alderaan, that have decreased following the non-
renewal of mining permits of some of its mining firms owing to the non-compliance of
criteria relating to public health, the environment, safety and operational standards. These
sustainable measures of Alderaan have irked the global PMG industry as Alderaan’s success
is contrasted to their failure to make a shift towards a more ecologically sustainable PMG
production strategy.

Identification of measures at issue-

The measures at issue include-

(i) the provision of land by Investerix to Desertix which Alderaan argues is not a
specific subsidy also, it is not contingent on export performance
(ii) the loan by Zurix Bank to Desertix which Alderaan argues is not a specific
subsidy and does not cause any serious prejudice
(iii) the systematic restriction of exports of neodymium which include Alderaan’s
non-renewal and refusal to grant new mining permits to neodymium mining
firms, export tax of 25% on all neodymium extracted in Alderaan, and export
monitoring of neodymium through export registration and other technical details
are justified.