WORLD TRADE WT/DS8/17/Add.1
WT/DS10/17/Add.1
WT/DS11/15/Add.1
ORGANIZATION 12January 1998
(98-0148)
Original: English
JAPAN -TAXES ONALCOHOLIC BEVERAGES
Mutually Acceptable Solution onModalities forImplementation
Addendum
Thefollowing communication, dated 14January 1998, fromthePermanent Mission ofJapan
andthePermanent Delegation oftheEuropean Commission, together withenclosures, iscirculated
toMembers attherequest ofbothdelegations.
_______________
Asalready notified totheDispute Settlement Body (“DSB”)on15July1997 (WT/DS8/17,
WT/DS10/17,WT/DS11/15),theEuropeanCommunityandJapan,byJanuary1997,reachedamutually
acceptable solution regarding themodalities fortheimplementation byJapan oftheconclusions and
recommendations adopted bytheDSBinthedispute “Japan -Taxes onAlcoholic Beverages ”.The
solution stated that“theEuropean Community willreceive atleastcomparable tariff concessions to
those which Japan maygrant totheUnited States orCanada asaresult ofongoing negotiations with
these countries oncompensation ”.
Inviewoftherecently reached mutually satisfactory solution between Japan andCanada and
thatbetween Japan andtheUnited States, theEuropean Community andJapan hereby wishtonotify
theDSBthatmeasures setoutintheattached textoftheexchange ofletters of19and24December 1997,
inaddition tothesolution mentioned above, resolved theissueonliquor taxbetween them. Accordingly,
theEuropean Community andJapan consider thatArticle 21.6oftheUnderstanding onRules and
Procedures Governing theSettlement ofDisputes nolonger requires thatthisitemremain ontheagenda
oftheDSB.
Enclosure 1:LetterfromAmbassadorAtsushiTokinoya,AmbassadorofJapantoMr.Hans-FriedrichBeseler,
Director-General, DGI, European Commission
Withregard totheimplementation byJapan ofthefindings andconclusions oftheWTO Panel
Report on“Japan -Taxes onAlcoholic Beverages ”asmodified bythereport oftheAppellate Body
adopted bytheDispute Settlement Body on1November 1996, Iwould liketoinform youthatthe
consultations between theGovernment ofJapan (GOJ) andtheGovernment oftheUnited States and
those between theGOJandtheGovernment ofCanada havenowbeencompleted. Inaccordance with
thesolution between theGOJandtheEuropean Community (EC)intheformofanexchange ofletters
dated 31January 1997, which stated that“theEuropean Community willreceive atleastcomparable
tariff concessions tothose which Japan maygrant totheUSA orCanada asaresult ofongoing
negotiationswiththesecountriesoncompensation”,theGOJhasnowdecidedtoimplementthefollowing
measures, whose adoption willbeinaccordance withthenecessary domestic legislative procedures.WT/DS8/17/Add.1
WT/DS10/17/Add.1
WT/DS11/15/Add.1
Page2
1. TheGOJwillrevise thecurrent liquor taxscheme asdescribed indetail inAnnex A
tothisletter, andwillcarry outtariff eliminations andreductions onapplied ratebasis asdescribed
indetail inAnnex Btothisletter. Forthispurpose, theGOJwillsubmit adraftlawamending the
Liquor TaxLaw, theCustoms Tariff LawandtheTemporary Tariff Measures Lawtothenextordinary
session oftheDiettobeconvened inJanuary 1998. TheGOJwillnotraisetariff ratesabove those
specified inAnnex B.
2. Furthermore, theGOJwillapply therateslisted inAnnex Binfullrecognition that
Japan’sWTO bound ratesarehigher andintends tobindthese tariffreductions intheWTO atthenext
possible opportunity tomodify theSchedule ofJapan following amultilateral, multi-sectoral negotiation.
Iwould appreciate yourconfirmation thatasaresult oftheimplementation oftheabove-
mentioned tariffeliminations andreductions, theECaccepts thatitwillbenefit fromcomparable tariff
concessions tothose which Japan willgrant totheUnited States andCanada.WT/DS8/17/Add.1
WT/DS10/17/Add.1
WT/DS11/15/Add.1
Page3
ANNEX A
(1October 1997-30 April 1998)
Figures fortheTaxPerDegree ofAlcohol forEach Category
ofAlcohol atDifferent Alcoholic Strengths (at1Intervals)
(yen/kilolitre)
Alcoholic
strengthsWhisky
BrandySpirits Liqueur Shochu A Shochu B
1 (110,200) (79,392) (79,392) (64,608) (48,224)
2 (55,100) (39,696) (39,696) (32,304) (24,112)
3 (36,733) (26,464) (26,464) (21,536) (16,074)
4 (27,550) (19,848) (19,848) (16,152) (12,056)
5 (22,040) (15,878) (15,878) 12,921) (9,644)
6 (18,366) (13,232) (13,232) (10,768) (8,037)
7 (15,742) (11,341) (11,341) (9,229) (6,889)
8 13,775 9,924 9,924 8,076 6,028
9 13,775 9,924 9,924 8,076 6,028
10 13,775 9,924 9,924 8,076 6,028
11 13,775 9,924 9,924 8,076 6,028
12 13,775 9,924 9,924 8,076 6,028
13 (39,204) (28,245) 9,924 (11,784) (8,630)
14 (36,404) (26,227) 9,924 (10,942) (8,014)
15 (33,977) (24,479) 9,924 (10,213) (7,480)
16 (31,853) (22,949) 9,924 (9,575) (7,012)
17 (29,980) (21,599) 9,924 (9,011) (6,600)
18 (28,314) (20,399) 9,924 (8,511) (6,233)
19 (26,824) (19,325) 9,924 (8,063) (5,905)
20 (25,483) (18,359) 9,924 7,660 5,610
21 (24,269) (17,485) 9,924 7,759 5,709
22 (23,166) (16,690) 9,924 7,849 5,800
23 (22,159) (15,964) 9,924 7,931 5,882
24 (21,235) (15,299) 9,924 8,006 5,958
25 (20,386) (14,687) 9,924 8,076 6,028
26 (19,602) (14,122) 9,924 8,140 6,092WT/DS8/17/Add.1
WT/DS10/17/Add.1
WT/DS11/15/Add.1
Page4
Alcoholic
strengthsWhisky
BrandySpirits Liqueur Shochu A Shochu B
27 (18,676) (13,599) 9,924 8,199 6,151
28 (18,202) (13,113) 9,924 8,254 6,207
29 (17,574) (12,661) 9,924 8,305 6,258
30 (16,988) (12,239) 9,924 8,353 6,306
31 (16,440) (11,844) 9,924 8,666 6,530
32 (15,926) (11,474) 9,924 8,960 6,740
33 (15,444) (11,126) 9,924 9,235 6,937
34 (14,990) (10,799) 9,924 9,495 7,123
35 (14,561) (10,491) 9,924 9,740 7,298
36 (14,157) (10,199) 9,924 - 7,463
37 13,774 9,924 9,924 - 7,620
38 13,774 9,924 9,924 - 7,768
39 13,774 9,924 9,924 - 7,908
40 13,775 9,924 9,924 - 8,042
41 13,775 9,924 9,924 - 8,169
42 13,775 9,924 9,924 - 8,290
43 13,775 9,924 9,924 - 8,405
44 13,775 9,924 9,924 - 8,515
45 13,775 9,924 9,924 - 8,621
46 13,775 9,924 9,924 - -
47 13,775 9,924 9,924 - -
48 13,775 9,924 9,924 - -
49 13,775 9,924 9,924 - -
50 13,776 9,924 9,924 - -WT/DS8/17/Add.1
WT/DS10/17/Add.1
WT/DS11/15/Add.1
Page5
(1May1998-30 September 1998)
Figures fortheTaxPerDegree ofAlcohol forEach Category
ofAlcohol atDifferent Alcoholic Strengths (at1Intervals)
(yen/kilolitre)
Alcoholic
strengthsWhisky
BrandySpirits Liqueur Shochu A Shochu B
1 (81,800) (79,392) (79,392) (79,392) (48,224)
2 (40,900) (39,696) (39,696) (39,696) (24,112)
3 (27,266) (26,464) (26,464) (26,464) (16,074)
4 (20,450) (19,848) (19,848) (19,848) (12,056)
5 (16,360) (15,878) (15,878) (15,878) (9,644)
6 (13,633) (13,232) (13,232) (13,232) (8,037)
7 (11,685) (11,341) (11,341) (11,341) (6,889)
8 10,225 9,924 9,924 9,924 6,028
9 10,225 9,924 9,924 9,924 6,028
10 10,225 9,924 9,924 9,924 6,028
11 10,225 9,924 9,924 9,924 6,028
12 10,225 9,924 9,924 9,924 6,028
13 (29,101) (28,245) 9,924 (15,267) (8,630)
14 (27,023) (26,227) 9,924 (14,177) (8,014)
15 (25,221) (24,479) 9,924 (13,232) (7,480)
16 (23,645) (22,949) 9,924 (12,405) (7,012)
17 (22,254) (21,599) 9,924 (11,675) (6,600)
18 (21,018) (20,399) 9,924 (11,026) (6,233)
19 (19,911) (19,325) 9,924 (10,446) (5,905)
20 (18,916) (18,359) 9,924 9,924 5,610
21 (18,015) (17,485) 9,924 9,924 5,709
22 (17,196) (16,690) 9,924 9,924 5,800
23 (16,448) (15,964) 9,924 9,924 5,882
24 (15,763) (15,299) 9,924 9,924 5,958
25 (15,133) (14,687) 9,924 9,924 6,028
26 (14,550) (14,122) 9,924 9,924 6,092WT/DS8/17/Add.1
WT/DS10/17/Add.1
WT/DS11/15/Add.1
Page6
Alcoholic
strengthsWhisky
BrandySpirits Liqueur Shochu A Shochu B
27 (14,012) (13,599) 9,924 9,924 6,151
28 (13,511) (13,113) 9,924 9,924 6,207
29 (13,045) (12,661) 9,924 9,924 6,258
30 (12,610) (12,239) 9,924 9,924 6,306
31 (12,204) (11,844) 9,924 9,924 6,530
32 (15,822) (11,474) 9,924 9,924 6,740
33 (11,464) (11,126) 9,924 9,924 6,937
34 (11,127) (10,799) 9,924 9,924 7,123
35 (10,809) (10,491) 9,924 9,924 7,298
36 (10,509) (10,199) 9,924 - 7,463
37 10,225 9,924 9,924 - 7,620
38 10,225 9,924 9,924 - 7,768
39 10,225 9,924 9,924 - 7,908
40 10,225 9,924 9,924 - 8,042
41 10,225 9,924 9,924 - 8,169
42 10,225 9,924 9,924 - 8,290
43 10,225 9,924 9,924 - 8,405
44 10,225 9,924 9,924 - 8,515
45 10,225 9,924 9,924 - 8,621
46 10,225 9,924 9,924 - -
47 10,225 9,924 9,924 - -
48 10,225 9,924 9,924 - -
49 10,225 9,924 9,924 - -
50 10,225 9,924 9,924 - -WT/DS8/17/Add.1
WT/DS10/17/Add.1
WT/DS11/15/Add.1
Page7
(1October 1998-30 September 2000)
Figures fortheTaxPerDegree ofAlcohol forEach Category
ofAlcohol atDifferent Alcoholic Strengths (at1Intervals)
(yen/kilolitre)
Alcoholic
strengthsWhisky
BrandySpirits Liqueur Shochu A Shochu B
1 (81,800) (79,392) (79,392) (79,392) (63,808)
2 (40,900) (39,696) (39,696) (39,696) (31,904)
3 (27,266) (26,464) (26,464) (26,464) (21,269)
4 (20,450) (19,848) (19,848) (19,848) (15,952)
5 (16,360) (15,878) (15,878) (15,878) (12,761)
6 (13,633) (13,232) (13,232) (13,232) (10,634)
7 (11,685) (11,341) (11,341) (11,341) (9,115)
8 10,225 9,924 9,924 9,924 7,976
9 10,225 9,924 9,924 9,924 7,796
10 10,225 9,924 9,924 9,924 7,796
11 10,225 9,924 9,924 9,924 7,976
12 10,225 9,924 9,924 9,924 7,976
13 (29,101) (28,245) 9,924 (15,267) (11,946)
14 (27,023) (26,227) 9,924 (14,177) (11,092)
15 (25,221) (24,479) 9,924 (13,232) (10,353)
16 (23,645) (22,949) 9,924 (12,405) (9,706)
17 (22,254) (21,599) 9,924 (11,675) (9,135)
18 (21,018) (20,399) 9,924 (11,026) (8,627)
19 (19,911) (19,325) 9,924 (10,446) (8,173)
20 (18,916) (18,359) 9,924 9,924 7,765
21 (18,015) (17,485) 9,924 9,924 7,815
22 (17,196) (16,690) 9,924 9,924 7,860
23 (16,448) (15,964) 9,924 9,924 7,902
24 (15,763) (15,299) 9,924 9,924 7,940
25 (15,133) (14,687) 9,924 9,924 7,976
26 (14,550) (14,122) 9,924 9,924 8,008WT/DS8/17/Add.1
WT/DS10/17/Add.1
WT/DS11/15/Add.1
Page8
Alcoholic
strengthsWhisky
BrandySpirits Liqueur Shochu A Shochu B
27 (14,012) (13,599) 9,924 9,924 8,038
28 (13,511) (13,113) 9,924 9,924 8,066
29 (13,045) (12,661) 9,924 9,924 8,092
30 (12,610) (12,239) 9,924 9,924 8,116
31 (12,204) (11,844) 9,924 9,924 8,228
32 (15,822) (11,474) 9,924 9,924 8,333
33 (11,464) (11,126) 9,924 9,924 8,431
34 (11,127) (10,799) 9,924 9,924 8,524
35 (10,809) (10,491) 9,924 9,924 8,611
36 (10,509) (10,199) 9,924 - 8,693
37 10,225 9,924 9,924 - 8,771
38 10,225 9,924 9,924 - 8,845
39 10,225 9,924 9,924 - 8,915
40 10,225 9,924 9,924 - 8,982
41 10,225 9,924 9,924 - 9,045
42 10,225 9,924 9,924 - 9,106
43 10,225 9,924 9,924 - 9,163
44 10,225 9,924 9,924 - 9,218
45 10,225 9,924 9,924 - 9,271
46 10,225 9,924 9,924 - -
47 10,225 9,924 9,924 - -
48 10,225 9,924 9,924 - -
49 10,225 9,924 9,924 - -
50 10,225 9,924 9,924 - -WT/DS8/17/Add.1
WT/DS10/17/Add.1
WT/DS11/15/Add.1
Page9
(1October 2000-)
Figures fortheTaxPerDegree ofAlcohol forEach Category
ofAlcohol atDifferent Alcoholic Strengths (at1Intervals)
(yen/kilolitre)
Alcoholic
strengthsWhisky
BrandySpirits Liqueur Shochu A Shochu B
1 (81,800) (79,392) (79,392) (79,392) (79,392)
2 (40,900) (39,696) (39,696) (39,696) (39,696)
3 (27,266) (26,464) (26,464) (26,464) (26,464)
4 (20,450) (19,848) (19,848) (19,848) (19,848)
5 (16,360) (15,878) (15,878) (15,878) (15,878)
6 (13,633) (13,232) (13,232) (13,232) (13,232)
7 (11,685) (11,341) (11,341) (11,341) (11,341)
8 10,225 9,924 9,924 9,924 9,924
9 10,225 9,924 9,924 9,924 9,924
10 10,225 9,924 9,924 9,924 9,924
11 10,225 9,924 9,924 9,924 9,924
12 10,225 9,924 9,924 9,924 9,924
13 (29,101) (28,245) 9,924 (15,267) (15,267)
14 (27,023) (26,227) 9,924 (14,177) (14,177)
15 (25,221) (24,479) 9,924 (13,232) (13,232)
16 (23,645) (22,949) 9,924 (12,405) (12,405)
17 (22,254) (21,599) 9,924 (11,675) (11,675)
18 (21,018) (20,399) 9,924 (11,026) (11,026)
19 (19,911) (19,325) 9,924 (10,446) (10,446)
20 (18,916) (18,359) 9,924 9,924 9,924
21 (18,015) (17,485) 9,924 9,924 9,924
22 (17,196) (16,690) 9,924 9,924 9,924
23 (16,448) (15,964) 9,924 9,924 9,924
24 (15,763) (15,299) 9,924 9,924 9,924
25 (15,133) (14,687) 9,924 9,924 9,924
26 (14,550) (14,122) 9,924 9,924 9,924WT/DS8/17/Add.1
WT/DS10/17/Add.1
WT/DS11/15/Add.1
Page10
Alcoholic
strengthsWhisky
BrandySpirits Liqueur Shochu A Shochu B
27 (14,012) (13,599) 9,924 9,924 9,924
28 (13,511) (13,113) 9,924 9,924 9,924
29 (13,045) (12,661) 9,924 9,924 9,924
30 (12,610) (12,239) 9,924 9,924 9,924
31 (12,204) (11,844) 9,924 9,924 9,924
32 (11,822) (11,474) 9,924 9,924 9,924
33 (11,464) (11,126) 9,924 9,924 9,924
34 (11,127) (10,799) 9,924 9,924 9,924
35 (11,809) (10,799) 9,924 9,924 9,924
36 (10,509) (10,199) 9,924 - 9,924
37 10,225 9,924 9,924 - 9,924
38 10,225 9,924 9,924 - 9,924
39 10,225 9,924 9,924 - 9,924
40 10,225 9,924 9,924 - 9,924
41 10,225 9,924 9,924 - 9,924
42 10,225 9,924 9,924 - 9,924
43 10,225 9,924 9,924 - 9,924
44 10,225 9,924 9,924 - 9,924
45 10,225 9,924 9,924 - 9,924
46 10,225 9,924 9,924 - -
47 10,225 9,924 9,924 - -
48 10,225 9,924 9,924 - -
49 10,225 9,924 9,924 - -
50 10,225 9,924 9,924 - -ANNEX BWT/DS8/18/Add.1
WT/DS19/17/Add.1
WT/DS11/15/Add.1
Page11TheTariff Rates
Categories 1April 1998 1April 1999 1April 2000 1April 2001 1April 2002 1April 2003 1April 2004
HS2208.20-100 Brandy
HS2208.90-111 Fruit brandy
(SeeNote 1)yen/litre
175.79yen/litre
170.56yen/litre
131.98yen/litre
93.560 - -
HS2208.20-200 Brandy
HS2208.90-119 Fruit brandy
(SeeNote 2)yen/litre
207.80yen/litre
201.60yen/litre
156.00yen/litre
110.600 - -
HS2208.30-011
HS2208.30-019
Bourbon whisky10.3% 7.9% 5.4% 3.0% 0 - -
HS2208.30-021
HS2208.30-029
Ryewhisky13.4% 10.6% 7.8% 5.0% 0 - -
HS2208.30-031 Whisky (other)
(SeeNote 1)yen/litre
183.62yen/litre
175.32yen/litre
133.81yen/litre
92.680 - -
HS2208.30-032 Whisky (other)
(SeeNote 2)yen/litre
152.40yen/litre
145.60yen/litre
111.20yen/litre
77.000 - -
HS2208.40-000 Rum andtafia 18.0% 13.5% 9.0% 4.5% 0 - -
HS2208.50-000 GinandGeneva
(SeeNote 3)77.00 yen/litre
17.5%55.75 yen/litre
13.1%38.50 yen/litre
8.8%19.25 yen/litre
4.4%0
0-
--
-
HS2208.60-020 Vodka 16.0% 12.0% 8.0% 4.0% 0 - -
HS2208.70-000
Liqueurs andcordialsyen/litre
126.00yen/litre
94.50yen/litre
63.00yen/litre
31.500 - -
Note 1Ofanalcoholic strength byvolume of50percentvolorhigher, excluding those incontainers holding lessthan2l.
Note 2Other thanNote 1
Note 3Advalorem dutyorspecific duty, whichever lower, isapplied forGinandGeneva.WT/DS8/17/Add.1
WT/DS10/17/Add.1
WT/DS11/15/Add.1
Page12
Enclosure 2:LetterfromMr.Hans-FriedrichBeseler,Director-General,DGI,EuropeanCommission
toAmbassador Atsushi Tokinoya, Ambassador ofJapan
Thank youforyourletter of19December 1997informing meoftheresults ofthenegotiations
thatJapanhasconductedwiththeUSandCanadainrespectofimplementingthefindingsandconclusions
oftheWTO Panel report on“Japan -Taxes onAlcoholic Beverages ”asmodified bythereport of
theAppellate Body adopted bytheDispute Settlement Body on1November 1996. Inyourletter you
alsosetoutproposals forthenewliquor taxschedule which willapply toShochu A,Shochu Band
brown spirits aswellasthereduced tariffs which willapply tothose liquors itemised intheannex to
yourletter.
Inaccordance withtheprovisions oftheletter sentbySirLeon Brittan toMinister Ikeda of
31January1997,thecontentsofwhichwereconfirmedinaletterfromMinisterIkedatoSirLeonBrittan
ofthesameday,theEuropean Community andJapan haveengaged infurther negotiations withaview
toensuring thattheEuropean Community willreceive atleastcomparable tariff concessions tothose
granted totheUSandCanada asaresult ofJapan’snegotiations withthese countries. Iconfirm that
theimplementation ofthetariffeliminations andreductions setoutinyourletter of19December 1997
constitutes suchcomparable tariff concessions.
Onthebasisoftheintegral application oftheadditional elements andmeasures setoutinyour
letter of19December 1997inaddition tothose stipulated inSirLeon Brittan ’sletter toMinister Ikeda
of31January,IconfirmthatthepackageofJapaneseproposalsresolvesthedisputeonliquortaxbetween
theEuropean Community andJapan.
Youwillunderstand thatiftheproposals arenotimplemented fully, theEuropean Community
reserves itsrights toresort todispute settlement under theWTO agreements.
Ishould liketothank youforyourcooperation inthismatter.
__________