DISPUTE SETTLEMENT

DS: Dominican Republic — Measures Affecting the Importation of Cigarettes

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

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(as cited in request for consultations)
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Summary of the dispute to date

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Consultations

Complaint by Honduras.

On 28 August 2003, Honduras requested consultations with the Dominican Republic concerning its measures which affect the importation of cigarettes.

Hondurasí request concerns three types of measures:

  • The manner in which the tax base is assessed for purposes of collection of the Selective Tax on Consumption regarding cigarettes, which in Hondurasí view creates a less favourable treatment for Honduran cigarettes than that received by like domestic products and by like products imported from third countries. This is inconsistent with the Dominican Republicís obligations under Articles III:2 and I:1 of GATT 1994;
     
  • The requirement that stamps must be affixed on the product inside the territory of the Dominican Republic and under supervision of its tax authorities, which in Hondurasí view creates a less favourable treatment for Honduran cigarettes than that received by like domestic products. This is also inconsistent with the Dominican Republicís obligations under Article III:4 of GATT 1994; and,
     
  • The requirement that importers, including importers of cigarettes, post a bond as a pre-requisite for importation, which in Hondurasí view creates a “charge” other than a custom duty, and is therefore inconsistent with the Dominican Republicís obligations under Article I:1(b) of GATT 1994. In another sense, it is also a “restriction” on the importation of cigarettes and therefore inconsistent with the Dominican Republicís obligations under Article XI:1 of GATT 1994.

Honduras claimed that such measures unduly restrict its exports to Dominican Republic and nullify or impair benefits accruing to Honduras under the WTO Agreement.

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