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World Trade Organization (WTO) Appellate Body Report: Dominican Republic-Measures Affecting the Importation and Internal Sale of Cigarettes*

Published online by Cambridge University Press:  27 February 2017

Eliza Patterson
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Type
Judicial and Similar Proceedings
Information
International Legal Materials , Volume 44 , Issue 4 , July 2005 , pp. 921 - 946
Copyright
Copyright © American Society of International Law 2005

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Footnotes

**

Eliza Patterson is a Harvard Law School graduate. She is a Fulbright Scholar to be based in China later this year.

*

This note was first published on the ASIL's website as an ASIL Insight, available at<http://www.asil.org/insights/2005/O5/insightsO5O517.html> © American Society of International Law.

References

1 Dominican Republic-Measures Affecting the Importation and Internal Sale of Cigarettes. WT/DS302/AB/R.

2 The alternative constructed by the Panel and agreed to by the AB was for the government to provide tax stamps to foreign exporters, so that those tax stamps could be affixed on cigarette packets in the course of their own production process, prior to importation.

* Due to the substantial length of the original document and ILM's space constraints, the editors of ILM have decided to reproduce an excerpt of the decision, which will begin with Chapter III, “Issues Raised in This Appeal.”

* Decision available on the WTO website: http://www.wto.org/english/tratop_e/dispu_e/302abr_e.pdf

41 Panel Report, paras. 7.198 and 8.1(e).

42 Ibid., paras. 7.232, 7.233 and 8.1(e).

43 Ibid., para. 7.215.

44 Panel Report, para. 7.215.

45 Ibid., para. 7.226.

46 Ibid.

47 Ibid.

48 Ibid., para. 7.228.

49 Thus, tax stamps would be affixed on cigarette packets in the course of the foreign manufacturer's production process and prior to importation into the Dominican Republic.

50 Given its conclusion that the tax stamp requirement is not “necessary” under Article XX(d), the Panel considered that it did not need to analyze consistency of the measure with the chapeau of Article XX.

51 Dominican Republic's appellant's submission, para. 30 (referring to Appellate Body Report, Korea-Various Measures on Beef para. 164).

52 Ibid., para. 31.

53 Dominican Republic's appellant's submission, para. 30.

54 Ibid., para. 45.

55 Honduras’ appellee's submission, para. 37.

56 Ibid., para. 65.

57 The new decree was enacted after the issuance of the Panel Report to the parties on 20 October 2004. We also referred to the enactment of the new decree in paragraph 14 of this Report.

58 Appellate Body Report, US-Gasoline, p. 22, DSR 1996:1, 3, at 20.

59 Appellate Body Report, Korea-Various Measures on Beef, para. 157.

60 Appellate Body Report, Korea-Various Measures on Beef, para. 164.

61 Ibid., para. 165 (quoting GATT Panel Report, US – Section 337, para. 5.26).

62 Appellate Body Report, EC - Asbestos, para. 170.

63 Ibid.,, para. 172 (quoting Appellate Body Report, Korea-Various Measures on Beef, paras. 166 and 163).

64 Ibid., para. 172 (quoting Appellate Body Report, Korea-Various Measures on Beef, para. 162).

65 Appellate Body Report, US - Gambling, para. 306.

66 Ibid., para. 307.

67 Ibid., para. 308.

68 Panel Report, para. 7.217.

69 Panel Report, para. 7.215.

70 Ibid.

71 Ibid.

72 Ibid., para. 7.210.

73 Ibid., para. 7.226.

74 Ibid.

75 Panel Report, para. 7.228.

76 Ibid., para. 7.229.

77 Dominican Republic's appellant's submission, para. 79.

78 Dominican Republic's appellant's submission, para. 79.

79 Prior to EC-Hormones, an Article 11 claim was raised on appeal in US - Wool Shirts and Blouses, but that claim dealt solely with “whether Article 11 of the DSU entitles a cons- plaining party to a finding on each of the legal claims it makes to a panel”. (Appellate Body Report, US - Wool Shirts and Blouses, p. 17, DSR 1997:1, 323, at 338) As such, the claim did not challenge the panel's “assessment of the facts of the case”. In addition, in Canada-Periodicals, the appellant raised Article 11 when challenging the panel's reliance on a “hypothetical example” to make a determination of “like products” under Article 111:2 of the GATT 1994. (Appellate Body Report, Canada-Periodicals, p. 5, DSR 1997:1, 449, at 452) The Appellate Body, however, made no ruling as to the panel's compliance with Article 11. (Ibid., pp. 20-23, DSR 1997:1, 449, at 465-468)

80 Appellate Body Report, EC-Hormones, para. 133.

81 Ibid., para. 132.

82 Appellate Body Report, EC-Asbestos, para. 161. See also, for example, Appellate Body Report, EC - Tube or Pipe Fittings, para. 125; Appellate Body Report, EC-Bed Linen (Article 21.5-India), paras. 170, 177, and 181; Appellate Body Report, EC-Sardines, para. 299; Appellate Body Report, Korea - Alcoholic Beverages, paras. 161-162; Appellate Body Report, Japan – Agricultural Products II, paras. 141 - 142; Appellate Body Report, US-Wheat Gluten, para. 151;Appellate Body Report, Australia - Salmon, para. 266; and Appellate Body Report, Korea-Dairy, para. 138.

83 Appellate Body Report, Australia-Salmon, para. 267.

84 Appellate Body Report, EC - Asbestos, para. 161.

85 Appellate Body Report, EC - Hormones, para. 133.

86 Appellate Body Report, EC - Asbestos, para. 177 (quoting Appellate Body Report, Korea - Alcoholic Beverages, para. 161).

87 Ibid., para. 159 (quoting Appellate Body Report, US – Wheat Gluten, para. 151).

88 See, for example, Appellate Body Report, EC-Bed Linen (Article 21.5 - India), para. 170; Appellate Body Report, USCarbon Steel, para. 142 (quoting Appellate Body Report, US-Wheat Gluten, para. 151).

89 Dominican Republic's appellant's submission, para. 83. See also ibid., paras. 84-85.

90 Apart from Memo DAT-No. 46, Exhibit DR-8 submitted by the Dominican Republic to the Panel comprises a compilation of documents providing information on a batch of alcoholic beverages seized in a commercial establishment in July 2001.

91 Dominican Republic's appellant's submission, para. 87.

92 Ibid., para. 89.

93 Exhibit DR-29 submitted by the Dominican Republic to the Panel contains information on a batch of garlic and alcoholic beverages seized in March 2002.

94 Dominican Republic's appellant's submission, para. 91.

95 Panel Report, para. 7.223.

96 Ibid.

97 Ibid.

98 Appellate Body Report, EC - Hormones, para. 133.

99 Dominican Republic's appellant's submission, para. 87.

100 Ibid., para. 88.

101 Dominican Republic's appellant's submission, para. 88.

102 Panel Report, para. 7.223.

103 Appellate Body Report, Australia-Salmon, para. 267.

104 Dominican Republic's appellant's submission, para. 89.

105 Panel Report, para. 7.224.

106 The Dominican Republic made this clarification in response to our questioning at the oral hearing. According to the Dominican Republic, Exhibits DR-8 and DR-29 relate to “tax evasion, smuggling, and forgery of tax stamps with respect to alcohol products”. (Dominican Republic's appellant's submission, para. 79)

107 Panel Report, para. 7.226.

108 Ibid., para. 7.310.

109 Ibid., para. 7.311.

110 Ibid., para. 7.234; the amount of the bond is RD$5 million for both importers and domestic producers: Article 14 of Decree 79-03, Exhibit HOND-4 submitted by Honduras to the Panel. The Panel noted that “ [according to the evidence provided by Honduras, in the specific case of the importer of cigarettes from that country, the annual fee charged by the insurance company that issued the bond was RD$84,000 (approximately US$1,873)”. (Ibid., para. 7.299)

111 Ibid., para. 7.282.

112 Panel Report, para. 7.292.

113 Ibid.

114 Ibid.

115 Letter from the Director-General of Internal Taxes, Exhibit DR-12 submitted by the Dominican Republic to the Panel.

116 Panel Report, paras. 7.291 and 7.293.

117 Ibid., para. 7.301.

118 Honduras’ other appellant's submission, para. 60.

119 Ibid., para. 63.

120 Honduras’ other appellant's submission, para. 63.

121 Ibid., para. 33; Panel Report, paras. 7.299-7.300.

122 Honduras’ other appellant's submission, paras. 30-42.

123 Ibid., para. 44.

124 Ibid., para. 45.

125 Panel Report, para. 7.300; Honduras’ other appellant's submission, paras. 48-54.

126 Appellate Body Report, Korea - Various Measures on Beef, para. 137. (original emphasis)

127 Appellate Body Report, EC-Asbestos, para. 100.

128 The bond of RD$5 million represents approximately US$110,000.

129 Article 14 of Decree 79-03, Exhibit HOND-4 submitted by Honduras to the Panel.

130 We note that in Korea - Various Measures on Beef, the Appellate Body stated: A formal difference in treatment between imported and like domestic products is … neither necessary, nor sufficient, to show a violation of Article 111:4. (Appellate Body Report, Korea-Various Measures on Beef, para. 137)

131 Panel Report, para. 7.294.

132 Ibid., para. 7.292.

133 Ibid., para. 7.293.

134 Ibid., para. 7.294.

135 Honduras’ other appellant's submission, para. 70.

136 Appellate Body Report, Korea-Various Measures on Beef, para. 137.

137 Before the Panel, Honduras suggested that “since two domestic manufacturers have a higher market share than the importer of Honduran cigarettes, the per unit cost of the bond (the result of dividing the cost of the bond by the number of cigarettes sold) would be higher for imported cigarettes than for domestic cigarettes.” (Panel Report, para. 7.295)

138 Honduras’ other appellant's submission, para. 33; Panel Report, paras. 7.299-7.300.

139 Panel Report, para. 7.295.

140 Ibid., para. 7.299.

141 Panel Report, para. 7.300.

142 Supra, para. 96 of this Report.

143 See Panel Report, para. 7.284.

144 Panel Report, para. 7.285.

145 Ibid., para. 7.291.

146 Ibid., para. 7.292.

147 Ibid., para. 7.293.

148 Ibid., para. 7.294.

149 Honduras’ other appellant's submission, para. 14 (referring to Appellate Body Report, US-Corrosion-Resistant Steel Sunset Review, para. 82).

150 Ibid., para. 22.

151 Appellate Body Report, Chile-Price Band System, para. 172.

152 Appellate Body Report, Guatemala-Cement I, para. 73.

153 Appellate Body Report, Chile-Price Band System, para. 173.

154 See for example, Appellate Body Report, US-1916 Act, paras. 60-61; and Appellate Body Report, US – Corrosion Resistant Steel Sunset Review, para. 82.

155 See Honduras’ other appellant's submission, paras. 3 and 14.

156 Panel Report, para. 7.286.

157 Ibid., para. 7.292.

158 Ibid., para. 7.293.

159 Honduras’ other appellant's submission, para. 22.

160 Ibid., para. 23. (emphasis added)

161 Appellate Body Report, US-Wheat Gluten, para. 151.

162 Appellate Body Report, US-Carbon Steel, para 157. (footnote omitted)

163 Exhibit DR-12 submitted by the Dominican Republic to the Panel.

164 See Panel Report, para. 7.291 (referring to Exhibit DR-12 submitted by the Dominican Republic to the Panel).

165 See Panel Report, paras. 7.268 and 7.284.

166 Ibid., para. 7.268.

167 Panel Report, para. 7.293.

168 Ibid., paras. 7.307-7.308.

169 Ibid., para. 7.308.

170 Ibid.

171 Honduras’ other appellant's submission, paras. 76-81.

172 Appellate Body Report, US-Carbon Steel, para. 125. (original emphasis; footnote omitted)

173 See, for example, Appellate Body Report, US-Carbon Steel, para. 171.

174 Appellate Body Report, EC-Bananas III, para. 141.

175 See Request for Establishment of a Panel by Honduras, WTV DS302/5, 9 December 2003.

176 Panel Report, para. 7.286.

177 Appellate Body Report, EC-Poultry, para. 135.

178 Dominican Republic's appellee's submission, para. 79.

179 Panel Report, para. 7.307.

180 Supra, paras. 14 and 63 of this Report.