7.514

Therefore， the standard of compliance with Article 61 is the minimum internationally agreed standard set out in that Article. The minimum standard in Article 61 does not defer to China's domestic practice on the definition of criminal liability and sanctions for other wrongful acts in areas not subject to international obligations under the TRIPS Agreement， unless it so states. For example， the second sentence refers to "crimes of a corresponding gravity" which might refer to domestic practice in other areas. However， the first sentence of Article 61 does not make any such reference.

7.515

For the above reasons， the Panel confirms its view at paragraphs 0 to 0 above that the first sentence of Article 61 of the TRIPS Agreement imposes an obligation. The Panel willow turn to the terms used in that provision， read in context and in light of the object and purpose of the Agreement， to determine the scope and content of that obligation. (Iv)Scope of the Obligation

7.516 The terms of the obligation in the first sentence of Article 61 of the TRIPS Agreement are that Members shall "provide for criminal procedures and penalties to be applied". That obligation applies to "willful trademark counterfeiting or copyright piracy on commercial scale". Within that scope， there are no exceptions. The obligation applies to all acts of willful trademark counterfeiting or copyright piracy on a commercial scale.

7.517 The Panel recalls its conclusion at paragraph 0 above that， in China， acts of trademark and copyright infringement falling below the applicable thresholds are not subject to criminal procedures and penalties. The issue that arises is whether any of those acts of infringement constitute "willful trademark counterfeiting or copyright piracy on a commercial scale" within the meaning of the first sentence of Article 61. This requires the Panel to consider the interpretation of that phrase.

7.518 The Panel notes that the first sentence of Article 61 contains no fewer than four limitations on the obligation that it sets forth. These define the scope of the relevant obligation and are not exceptions. The first limitation is that the obligation applies to trademarks and copyright rather than to all intellectual property rights covered by the TRIPS Agreement. The fourth sentence of Article 61 gives Members the option to criminalize other infringements of intellectual property rights， in particular where they are committed willfully and on a commercial scale. Despite the potential gravity of such infringements， Article 61 creates no obligation to criminalize them.

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