WT/DS497/15  
 
9 January 2020  
(20-0186) Page: 1/3 
  Original: English  
 
BRAZIL  – CERTAIN MEASURES CON CERNING TAXATION AND  CHARGES  
UNDERSTANDING BETWEE N BRAZIL  AND JAPAN REGARDING PROCEDURES   
UNDER ARTICLES 21 AN D 22 OF THE DSU  
The following communication, dated 27 December 2019 , from the delegation of Brazil  and the 
delegation of Japan  to the Chairperson of the Dispute Settlement Body, is circulated at the request 
of these delegations.  
 
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Brazil and Japan would like to inform the Dispute Settlement Body of the at tached "Agreed 
Procedures under Articles 21 and 22 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes" between Brazil and Japan with respect to the dispute Brazil － Certain 
Measures Concerning Taxation and Charges (WT/DS497) .  
 
We request that you please circulate the attached agreement to the Members of the Dispute 
Settlement Body.  
 
 
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  WT/DS497/15  
 
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  Agreed Procedures under Articles 21 and 22 of the Understanding on Rules and Procedures 
governing the Settlement of Disputes  
Brazil － Certain Measures Concerning Taxation and Charges (WT/DS497)  
The Dispute Settlement Body ("DSB") adopted its recommendations and rulings in the dispute 
Brazil  － Certain Measures Concerning Taxation and Charges  (WT/DS497) on 11 January 2019.  
 
Pursu ant to Article 21.3(b) of the Understanding on Rules and Procedures Governing the Settlement 
of Disputes ("DSU"), Brazil and Japan agreed that the reasonable period of time to implement the 
recommendations and rulings of the DSB in this dispute shall be el even (11) months and twenty  (20) 
days, expiring on 31 December 2019. With regard to the subsidies that were found to be prohibited, 
Brazil and Japan agreed that, for the purposes of Article 4 of the Agreement on Subsidies and 
Countervailing Measures ( "SCM Agreement "), the time period within which these measures must be 
withdrawn would be five (5) months and ten (10) days from the date of adoption of the 
recommendations and rulings of the DSB, which expired on 21 June 2019 (WT/DS497/13).  
 
Brazil and Japan (c ollectively, "the Parties") have agreed on the following procedures for the 
exclusive purposes of this dispute. They are designed to facilitate the resolution of the dispute and 
reduce the scope for procedural disputes and are without prejudice to either P arty's views on the 
correct interpretation of the DSU, and without prejudice to any other arrangements that may be 
agreed separately among the parties:  
 
1. Should Japan consider that the situation described in Article 21.5 of the DSU exists, Japan will 
request that Brazil enter into consultations with Japan. The Parties agree to hold such consultations 
within 15 days from the date of receipt of the request. A fter this 15 -day period has elapsed, Japan 
may request the establishment of a panel pursuant to Article 21.5 of the DSU at any time.  
2. At the first DSB meeting at which Japan's request for the establishment of an Article 21.5 
panel appears on the agenda, Bra zil shall accept the establishment of that panel.  
3. The Parties shall cooperate to enable the Article 21.5 panel to circulate its report within 
90 days of the panel's establishment, excluding such time during which the panel's work may be 
suspended pursuant to Article 12.12 of the DSU.  
4. Either Party may request the DSB to adopt the report of the Article 21.5 panel at a 
DSB meeting held at least 20 days after the circulation of the report to the Members unless either 
Party appeals the report.  
5. In the event that a division of the Appellate Body can be composed to hear this dispute upon 
an appeal of the Article 21.5 panel report, the Parties shall cooperate to enable the Appellate Body 
to circulate its report to the Members within 90 days from the date of notificat ion of the appeal to 
the DSB. Further, either Party may request the DSB to adopt the reports of the Appellate Body and 
of the Article 21.5 panel (as modified by the Appellate Body report) at a DSB meeting held within 
30 days of the circulation of the Appel late Body report to the Members.  
6. Japan may request authorization to suspend concessions or other obligations pursuant to 
Article 22.2 of the DSU and to adopt countermeasures pursuant to Article 4.10 of the 
SCM Agreement, in the event that the DSB rules as a result of a proceeding under Article 21.5 of 
the DSU that a measure taken to comply with the recommendations and rulings does not exist or is 
inconsistent with a covered agreement.   This is without prejudice to Brazil's right to refer the matter 
to arbi tration in accordance with Article 22.6 of the DSU.  
7. If Japan requests authorization to suspend concessions or other obligations pursuant to 
Article  22.2 of the DSU and to adopt countermeasures pursuant to Article 4.10 of the 
SCM Agreement, Brazil shall hav e the right to object under Article 22.6 of the DSU to the level of 
suspension of concessions or other obligations and/or claim that the principles and procedures set 
forth in Article 22.3 of the DSU have not been followed. In the event of such objection, the matter 
will be referred to arbitration pursuant to Article 22.6 of the DSU.  WT/DS497/15  
 
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  8. The Parties will cooperate to enable the arbitrator under Article 22.6 of the DSU to circulate 
its decision within 60 days of the referral to arbitration.  
9. If any of the origina l panelists is not available for either the Article 21.5 compliance panel or 
the Article 22.6 arbitration (or both), or any person serving in such proceeding becomes unavailable 
to serve, the Parties will promptly consult on a replacement, and either Party  may request the 
Director -General of the WTO to appoint, within ten days of being so requested, a replacement for 
the proceeding or proceedings in which a replacement is required. If an original panelist is 
unavailable to serve in either of the proceedings , or a person serving in such proceeding becomes 
unavailable to serve, the Parties will further request that, in making this appointment, the 
Director -General seek a person who will be available to act in both proceedings.  
10. The Parties will continue to coop erate in all matters related to these agreed procedures and 
agree not to raise any procedural objection to any of the steps set out herein. If, during the 
application of these procedures, the Parties consider that a procedural aspect has not been properly 
addressed in these procedures, they will endeavor to find a solution within the shortest time possible 
that will not affect the other aspects and steps agreed herein.  
 
 
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