WT/DS371/RW2  
 
12 July 2019 
(19-4559) Page: 1/164 
  Original: English  
 
  
THAILAND – CUSTOMS A ND FISCAL MEASURES O N CIGARETTES  
FROM THE PHILIPPINES   
SECOND RECOURSE TO A RTICLE 21.5 OF THE D SU BY THE PHILIPPINES   
REPORT  OF THE PANEL  
 
 WT/DS371/RW2  
 
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  TABLE OF CONTENTS  
 
1   INTRODUCTION  ................................ ................................ ................................ ........  17 
1.1   Prior proceedings in DS371  ................................ ................................ .......................... 17 
1.2   Complaint by the Philippines  ................................ ................................ ........................ 18 
1.3   Panel establishment and composition  ................................ ................................ ............ 19 
1.4   Panel proceedings  ................................ ................................ ................................ .......20 
1.4.1    General  ................................ ................................ ................................ .................. 20 
1.4.2    Third-party access to the confidential Final Report, submissions and exhibits in the first 
recourse to Article  21.5 ................................ ................................ ................................ ......20 
1.4.3    The Philippines' request for copies of communications between Indonesian and Thai 
government officials  ................................ ................................ ................................ ........... 21 
1.4.3.1    Thailand's objection to the Philippines' letter of 24 September 2018  ............................ 21 
1.4.3.2    The Philippines' DSU Article 13 request of 19 October 2018  ................................ ........ 23 
1.4.4    Thailand's objection concerning the Panel's terms of reference  ................................ ......24 
2   FACTUAL ASPECTS ................................ ................................ ................................ ..... 25 
2.1   Introduction  ................................ ................................ ................................ ............... 25 
2.2   PMTL and the relevant Thai government agencies  ................................ ........................... 25 
2.3   The measures challenged in this proceeding  ................................ ................................ ..26 
3   PARTIES' REQUEST S FOR FINDINGS AND R ECOMMENDATIONS  ................................  26 
4   ARGUMENTS OF THE  PARTIES  ................................ ................................ ...................  28 
5   ARGUMENTS OF THE  THIRD PARTIES  ................................ ................................ ........  28 
6   INTERIM REVIEW  ................................ ................................ ................................ ...... 28 
7   FINDINGS  ................................ ................................ ................................ .................  29 
7.1   Initial consideratio ns ................................ ................................ ................................ ...29 
7.1.1    Introduction  ................................ ................................ ................................ ............ 29 
7.1.2    General framework for the Panel's analysis  ................................ ................................ .29 
7.1.2.1    General principles of interpretation and standard of review  ................................ ........ 29 
7.1.2.2    Reliance on the Report in the Philippine s' first recourse to Article 21.5.  ........................ 31 
7.1.3    Issues relating to jurisdiction and admissibility  ................................ ............................ 35 
7.1.3.1    The nexus between the Charges/NoAs and DSB recommendations and rulings  ............. 35 
7.1.3.1.1    Introduction  ................................ ................................ ................................ ......35 
7.1.3.1.2    Findings in the first re course to Article 21.5  ................................ ........................... 36 
7.1.3.1.3    The 2002 -2003 Charges and the 1,052 revised NoAs  ................................ .............. 37 
7.1.3.1.4    Conclusion  ................................ ................................ ................................ ........ 39 
7.1.3.2    Thailand's allegations of "illegal acts" by PM Indonesia  ................................ .............. 39 
7.1.3.3    The Philippines' alternative claims under Article 7.1 of the CVA  ................................ ...42 
7.1.3.3.1    Introduction  ................................ ................................ ................................ ......42 
7.1.3.3.2    Main arguments of the parties  ................................ ................................ ............. 43 
7.1.3.3.3    Analysis by the Panel  ................................ ................................ .......................... 44 
7.1.3.3.3.1    General considerations  ................................ ................................ ..................... 44 WT/DS371/RW2  
 
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  7.1.3.3.3.2    Article 6.2 of the DSU  ................................ ................................ ...................... 46 
7.1.3.3.3.3    Timeliness of the Philippines' alternative claim  ................................ .................... 50 
7.1.3.3.4    Conclusion  ................................ ................................ ................................ ........ 54 
7.1.3.4    The Philippines' standing to challenge measures concerning PMTL's imports from 
Indonesia  ................................ ................................ ................................ .......................... 54 
7.1.4    Relevance of the presumption of good faith on the part of Thailand and its authorities  .....55 
7.1.4.1    Introduction  ................................ ................................ ................................ ......... 55 
7.1.4.2    Relevance of the presumption of good faith to accepting the veracity o f Thailand's 
representations ................................ ................................ ................................ .................. 56 
7.1.4.3    Relevance of the presumption of good faith to the interpretation of CVA obligations  ......59 
7.1.4.4    Conclusion  ................................ ................................ ................................ ........... 63 
7.2   The Thai authorities' reliance on the information in the CK -21A forms  ............................... 63 
7.2.1    Introduction  ................................ ................................ ................................ ............ 63 
7.2.2    The nature of the cost information reported in the CK -21A forms  ................................ ...64 
7.2.3    The circumstances surrounding the Thai authorities' reliance on the CK -21A forms  .......... 69 
7.2.4    Conclusion  ................................ ................................ ................................ .............. 76 
7.3   The 2002 -2003 Criminal Charges  ................................ ................................ ................. 76 
7.3.1   General  ................................ ................................ ................................ .................. 76 
7.3.1.1    Factual description of the Charges ................................ ................................ ........... 76 
7.3.1.1.1    The prior assessments of the entries at issue  ................................ ......................... 76 
7.3.1.1.2    Events culminating in the Charges  ................................ ................................ ........ 77 
7.3.1.1.3    Section 27 of the Customs Act  ................................ ................................ ............. 78 
7.3.1.1.4    The content of the Charges and the Annex  ................................ ............................ 79 
7.3.1.1.5    The explanation of how the "actual" value/price was determined  .............................. 80 
7.3.1.1.6    The criminal proceedings  ................................ ................................ ..................... 81 
7.3.1.2    Claims and order of analysis  ................................ ................................ ................... 81 
7.3.1.3    Claims not pursued  ................................ ................................ ............................... 82 
7.3.2    Existence of a challengeable measure ................................ ................................ ......... 83 
7.3.2.1    Introduction  ................................ ................................ ................................ ......... 83 
7.3.2.2    Main arguments of the parties  ................................ ................................ ................ 84 
7.3.2.3    Analysis by the Panel  ................................ ................................ ............................. 85 
7.3.2.3.1    General considerations  ................................ ................................ ........................ 85 
7.3.2.3.2    Existence of a distinct measure  ................................ ................................ ............ 88 
7.3.2.3.3    Existence of a determination for purposes of the CVA  ................................ ............. 89 
7.3.2.3.4    Speculation on future measures or events  ................................ ............................. 90 
7.3.2.3.5    The issues of making a prima facie  case an d conducting a de novo  review  ................ 91 
7.3.2.4    Conclusion  ................................ ................................ ................................ ........... 92 
7.3.3    Applicability of the CVA to the Charges  ................................ ................................ .......93 
7.3.3.1    Introduction  ................................ ................................ ................................ ......... 93 
7.3.3.2    Main arguments of the parties  ................................ ................................ ................ 94 
7.3.3.3    Analysis by the Panel  ................................ ................................ ............................. 96 WT/DS371/RW2  
 
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  7.3.3.3.1    General considerations  ................................ ................................ ........................ 96 
7.3.3.3.2    The agency that filed the Charges  ................................ ................................ ........ 97 
7.3.3.3.3    The meaning of the Charges  ................................ ................................ ..............  103 
7.3.3.3.3.1    Introduction  ................................ ................................ ................................ .. 103 
7.3.3.3.3.2    The issues in dispute  ................................ ................................ .....................  104 
7.3.3.3.3.3    The issue of the "actual price" as merely an approximate reference value .............  108 
7.3.3.3.3.4    The issue of the "actual price" as the "price actually paid or payable" ...................  112 
7.3.3.3.3.5    Conclusion  ................................ ................................ ................................ .... 115 
7.3.3.3.4    The consequences of the Charges  ................................ ................................ ...... 115 
7.3.3.3.5    The "intention to defraud" aspect of the Charges  ................................ ..................  119 
7.3.3.4    Conclusion  ................................ ................................ ................................ .........  120 
7.3.4    Claims u nder Articles 1.1 and 1.2(a) , second sentence, and Articles 6 and 7  of the CVA  . 120 
7.3.4.1    Introduction  ................................ ................................ ................................ ....... 120 
7.3.4.2    Analysis by the Panel  ................................ ................................ ...........................  121 
7.3.4.2.1   General considerations  ................................ ................................ ......................  121 
7.3.4.2.2    Claims under Article 1.1 and Article 1.2(a), second sentence  ................................ . 123 
7.3.4.2.2.1    Claim under Article 1.2(a), second sentence  ................................ .....................  123 
7.3.4.2.2.2    Alternative claim under Article 1.1  ................................ ................................ ... 126 
7.3.4.2.3    Claims under Article 6.1 and/or Article 7.1 ................................ ..........................  126 
7.3.4.2.3.1    Claim under Article 6.1 ................................ ................................ ...................  126 
7.3.4.2.3.2    Alternative claim under Article 7.1  ................................ ................................ ... 128 
7.3.4.3    Conclusion  ................................ ................................ ................................ .........  129 
7.3.5    Claim regarding sequential application of valuation methods  ................................ ....... 130 
7.3.5.1    Introduction  ................................ ................................ ................................ ....... 130 
7.3.5.2    Main arguments of the parties  ................................ ................................ ..............  130 
7.3.5.3    Analysis by the Panel  ................................ ................................ ...........................  131 
7.3.5.3.1    General considerations  ................................ ................................ ......................  131 
7.3.5.3.2    Review of the 2002 -2003 Charges  ................................ ................................ ...... 132 
7.3.5.4    Conclusion  ................................ ................................ ................................ .........  134 
7.3.6    Claim under Article 1.2(a), third sentence, of the CVA  ................................ ................  134 
7.3.6.1    Introduction  ................................ ................................ ................................ ....... 134 
7.3.6.2    Main arguments of the parties  ................................ ................................ ..............  135 
7.3.6.3    Analysis by the Panel  ................................ ................................ ...........................  136 
7.3.6.3.1    General considerations  ................................ ................................ ......................  136 
7.3.6.3.2    The applicability of Article 1.2(a), third sentence, to the Public Prosecutor  ...............  138 
7.3.6.3.3    The communications between the DSI and PMTL  ................................ ..................  139 
7.3.6.4    Conclusion  ................................ ................................ ................................ .........  143 
7.3.7    Article XX of the GATT 1994  ................................ ................................ ....................  143 
7.3.7.1    Introduction  ................................ ................................ ................................ ....... 143 
7.3.7.2    Main arguments of the parties  ................................ ................................ ..............  144 WT/DS371/RW2  
 
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  7.3.7.3    Analysis by the Panel  ................................ ................................ ...........................  145 
7.3.7.3.1    Applicability of Article XX of the GATT 1994 to the CVA  ................................ .........  145 
7.3.7.3.2    Justification under Article XX(a) or XX(d)  ................................ ............................  148 
7.3.7.4    Conclusion  ................................ ................................ ................................ .........  150 
7.4   The 1,052 revised Notices of Assessment (NoAs)  ................................ ..........................  150 
7.4.1    Introduction  ................................ ................................ ................................ ..........  150 
7.4.2    Main arguments of the parties  ................................ ................................ .................  151 
7.4.3    Analysis by the Panel  ................................ ................................ .............................  153 
7.4.3.1    General considerations  ................................ ................................ ........................  153 
7.4.3.2    The termination of the measures  ................................ ................................ ..........  156 
7.4.3.3    Reintroduction of the same or materially similar measures  ................................ ....... 161 
7.4.3.4    The practical value of additional findings in the event of reintroduction  ......................  162 
7.4.4    Conclusion  ................................ ................................ ................................ ............  163 
8   CONCLUSIONS AND RECOMMENDATIONS  ................................ ...............................  164  
 
 WT/DS371/RW2  
 
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  LIST OF ANNEXES  
ANNEX  A 
PANEL DOCUMENTS  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  4 
Annex A -2 Interim Review  10 
ANNEX B  
ARGUMENTS OF THE PAR TIES 
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of the Philippines  58 
Annex  B-2 Integrated executive summary of the arguments of Thailand  81 
ANNEX C  
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  C-1 Integrated executive summary of the arguments of the European Union  107 
Annex  C-2 Integrated executive summary of the arguments of Indonesia  112 
Annex  C-3 Integrated executive summary of the arguments of Japan  115 
Annex  C-4 Integrated executive summary of the arguments of the United States  117 
 
  WT/DS371/RW2  
 
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  WTO CASES CITED IN T HIS REPORT  
Short title  Full case title and citation  
Argentina – Textiles and 
Apparel  Panel Report, Argentina – Measures Affecting Imports of Footwear, 
Textiles, Apparel and Other Items , WT/DS56/R , adopted 22 April 1998, as 
modified by Appellate Body Report WT/DS56/AB/R, DSR 1998:III, p. 1033  
Australia – Apples  Appellate Body Report, Australia – Measures Affecting the Importation of 
Apples from New Zealand , WT/DS3 67/AB/R , adopted 17 December 2010, 
DSR 2010:V, p. 2175  
Australia – Salmon  Panel Report, Australia – Measures Affecting Importation of Salmon , 
WT/DS18/R  and Corr.1, adopted 6 November 1998, as modified by 
Appellate Body Report WT/DS18/AB/R, DSR 1998:VIII, p. 3407  
Australia – Tobacco Plain 
Packaging (Cuba)  Panel Report, Australia – Certain Measures concerning Trademarks, 
Geographical Indications and other  Plain Packaging Requirements 
applicable to Tobacco Products and Packaging , WT/DS458/R , Add.1 and 
Suppl.1, adopted 27 August 2018  
Brazil – Aircraft (Article 22.6 – 
Brazil)  Decision by the Arbitrator, Brazil – Export Financing Programme for 
Aircraft – Recourse to Arbitration by Brazil under Article 22.6 of the DSU 
and Article 4.11 of the SCM Agreement , WT/DS46/ARB , 28 August 2000, 
DSR 2002:I, p. 19  
Brazil – Desiccated Coconut  Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut , 
WT/DS22/AB/R , adopted 20 March 1997, DSR 1997:I, p. 167  
Canada – Aircraft  Appellate Body Report, Canada – Measures Affecting the Export of Civilian 
Aircraft , WT/DS70/AB/R , adopted 20 August 1999, DSR 1999:III, p. 1377  
Canada – Aircraft Credits and 
Guaran tees (Article 22.6 – 
Canada)  Decision by the Arbitrator, Canada – Export Credits and Loan Guarantees 
for Regional Aircraft – Recourse to Arbitration by Canada under Article 
22.6 of the DSU and Article 4.11 of the SCM Agreement , WT/DS222/ARB , 
17 February 20 03, DSR 2003:III, p. 1187  
Canada – Continued 
Suspension  Panel Report, Canada – Continued Suspension of Obligations in the EC – 
Hormones Dispute , WT/DS321/R  and Add.1 to Add.7, adopted 14 
November 2008, as modified by Appellate Body Report WT/DS321/AB/R, 
DSR 2008:XV, p. 5757  
Canada – Wheat Exports and 
Grain Imports  Appellate Body Report, Canada – Measures Relating to Exports of Wheat 
and Treatment of Importe d Grain , WT/DS276/AB/R , adopted 27 
September 2004, DSR 2004:VI, p. 2739  
China – Broiler Products  Panel Report, China − Anti-Dumping and Countervailing Duty Measures on 
Broiler Products from the United States , WT/DS427/R  and Add.1, adopted 
25 September 201 3, DSR 2013:IV, p. 1041  
China – Electronic Payment 
Services  Panel Report, China – Certain Measures Affecting Electronic Payment 
Services , WT/DS413/R  and Add.1, adopted 31 August 2012, DSR 2012:X, 
p. 5305  
China – GOES  Panel Report, China – Countervailing and Anti -Dumping Duties on Grain 
Oriented Flat -Rolled Electrical Steel from the United States , WT/DS414/R  
and Add.1, adopted 16 November 2012, upheld by Appellate Body Report 
WT/DS414/AB/R, DSR 2012:XII, p. 6369  
China – Intellectual Property 
Rights  Panel Report, China – Measures Affecting the Protection and Enforcement 
of Intellectual Property Rights , WT/DS3 62/R, adopted 20 March 2009, DSR 
2009:V, p. 2097  
China – Publications and 
Audiovisual Products  Appellate Body Report, China – Measures Affecting Trading Rights and 
Distribution Services for Certain Publications and Audiovisual 
Entertainment Products , WT/D S363/AB/R , adopted 19 January 2010, DSR 
2010:I, p. 3  
China – Rare Earths  Appellate Body Reports, China – Measures Related to the Exportation of 
Rare Earths, Tungsten, and Molybdenum , WT/DS431/AB/R  / 
WT/DS432/AB/R  / WT/DS433/AB/R , adopted 29 August 2014, D SR 
2014:III, p. 805  
China – Rare Earths  Panel Reports, China – Measures Related to the Exportation of Rare Earths, 
Tungsten, and Molybdenum , WT/DS431/R  and Add.1 / WT/DS432/R  and 
Add.1 / WT/DS433/R  and Add.1, adopted 29 August 2014, upheld by 
Appellate Body Reports WT/DS431/AB/R / WT/DS432/AB/R / 
WT/DS433/AB/R, DSR 2014:IV, p. 1127  WT/DS371/RW2  
 
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  Short title  Full case title and citation  
China – Raw Materials  Appellate Body Reports, China – Measures Related to the Exportation of 
Various Raw Materials , WT/DS394/AB/R  / WT/DS395/AB/R  / 
WT/DS398/AB/R , adopted 22 February 2012, DSR 2012:VII, p. 3295  
China – Raw Materials  Panel Reports, China – Measures Related to the Exportation of Various Raw 
Materials , WT/DS394/R , Add.1 and Corr.1 / WT/DS395/R , Add.1 and 
Corr.1 / WT/DS398/R , Add.1 and Corr.1, adopted 22 February 2012, as 
modified by Appellate Body Reports WT/DS394/AB/R / WT/DS395/AB/R / 
WT/DS398/AB/R, DSR 2012:VII, p. 3501  
Colombia – Ports of Entry  Panel Report, Colombia – Indicative Prices an d Restrictions on Ports of 
Entry , WT/DS366/R  and Corr.1, adopted 20 May 2009, DSR 2009:VI, p. 
2535 
Colombia – Textiles  Appellate Body Report, Colombia – Measures Relating to the Importation of 
Textiles, Apparel and Footwear , WT/DS461/AB/R and Add.1, adopted 22 
June 2016, DSR 2016:III, p. 1131  
Colombia – Textiles (Article 
21.5 – Colombia/Panama)  Panel Report, Colombia – Measures Relating to the Importation of Textiles, 
Apparel and Footwear – Recourse to Article 21.5 of the DSU by Colombia  / 
Colombia – Measures Relating to the Importation of Textiles, Apparel and 
Footwear – Recourse to Article 21.5 of the DSU by Panama , WT/DS461/RW  
and Add.1, circulated to WTO Members 5 October 2018 [ appealed by 
Panama 20 November 2018 ] 
Dominican Republic – Import 
and Sale of Cigarettes  Panel Report, Dominican Republic – Measures Affecting the Importation 
and Internal Sale of Cigarettes , WT/DS302/R , adopted 19 May 2005, as 
modified by Appellate Body Report WT/DS302/AB/R, DSR 2005:XV, p. 
7425 
Dominican Republic – 
Safeguard Measures  Panel Report, Dominican Republic – Safeguard Measures on Imports of 
Polypropylene Bags and Tubular Fabric , WT/DS415/R , WT/DS416/R , 
WT/DS417/R , WT/DS418/R , and Add.1, adopted 22 February 2012, DSR 
2012:XIII, p. 6775  
EC – Approval and Marketing 
of Biotech Products  Panel Reports, European Communities – Measures Affecting the Approval 
and Marketing of Biotech Products , WT/DS291/R , Add.1 to Add.9 and 
Corr.1 / WT/DS292/R , Add.1 to Add.9 and Corr.1 / WT/DS293/R , Add.1 to 
Add.9 and Corr.1, adopted 21 November 2006, DSR 2006:III, p. 847  
EC – Asbestos  Panel Report, European Communities – Measures Affecting Asbestos and 
Asbestos -Containing Products , WT/DS135/R  and Add.1, adopted 5 April 
2001, as modified by Appellate Body Report WT/DS135/AB/R, DSR 
2001:VIII, p. 3305  
EC – Bananas III  Appellate Body Report, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas , WT/DS27/AB/R , adopted  25 
September 1997, DSR 1997:II, p. 591  
EC – Bananas III  
(Article  21.5 – Ecuador II / 
US) Appellate Body Reports, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Second Recourse to 
Article  21.5 of the DSU by Ecuador , WT/DS27/AB/RW2/ECU , adopted 11 
December 2008, and Corr.1 / European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Article  21.5 of 
the DSU by the United States , WT/DS27/AB/RW/USA  and Corr.1, adopted 
22 December 20 08, DSR 2008:XVIII, p.  7165 
EC – Bananas III  
(Article  21.5 – US) Panel Report, European Communities – Regime for the Importation, Sale 
and Distribution of Bananas – Recourse to Article  21.5 of the DSU by the 
United States , WT/DS27/RW/USA  and Corr.1, adopted 22 December 2008, 
upheld by Appellate Body Report WT/DS27/AB/RW/USA, DSR 2008:XIX, 
p. 7761 
EC – Bed Linen  Panel Report, European Communities – Anti-Dumping Duties on Imports of 
Cotton -Type Bed Linen from India , WT/DS141/R , adopted 12 March 2001, 
as modified by Appellate Body Report WT/DS141/AB/R, DSR 2001:VI, 
p. 2077 
EC – Bed Linen  
(Article  21.5 – India)  Panel Report, European Communities – Anti-Dumping Duties on Imports of 
Cotton -Type Bed Linen from India – Recourse to Article  21.5 of the DSU  by 
India, WT/DS141/RW , adopted 24 April 2003, as modified by Appellate 
Body Report WT/DS141/AB/RW, DSR 2003:IV, p.  1269 
EC – Fasteners (China)  Appellate Body Report, European Communities – Definitive Anti -Dumping 
Measures on Certain Iron or Steel Fasteners from China , WT/DS397/AB/R , 
adopted 28 July 2011, DSR 2011:VII, p. 3995  WT/DS371/RW2  
 
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  Short title  Full case title and citation  
EC – Fasteners (China)  Panel Report, European Communities – Definitive Anti -Dumping Measures 
on Certain Iron or Steel Fasteners from China , WT/DS397/R  and Corr.1, 
adopt ed 28 July 2011, as modified by Appellate Body Report 
WT/DS397/AB/R, DSR 2011:VIII, p. 4289  
EC – IT Products  Panel Reports, European Communities and its member States – Tariff 
Treatment of Certain Information Technology Products , WT/DS375/R  / 
WT/DS376/R  / WT/DS377/R , adopted 21 September 2010, DSR 2010:III, 
p. 933  
EC – Salmon (Norway)  Panel Report, European Communities – Anti-Dumping Measure on Farmed 
Salmon from Norway , WT/DS337/R , adopted 15 January 2008, and Corr.1, 
DSR 2008:I, p. 3  
EC – Seal Products  Appellate Body Reports, European Communities – Measures Prohibiting the 
Importation and Marketing of Seal Products , WT/DS400/AB/R  / 
WT/DS401/AB/R , adopted 18 June 2014, DSR 2014:I, p. 7  
EC – Selected Customs 
Matters  Appellate Body Report, European Communities – Selected Customs 
Matters , WT/DS315/AB/R , adopted 11 December 2006, DSR 2006:IX, p. 
3791 
EC – Trademarks and 
Geographical Indications  Panel Reports,  European Communities – Protection of Trademarks and 
Geographi cal Indications for Agricultural Products and Foodstuffs , 
WT/DS290/R (Australia)  / WT/DS174/R (US), adopted 20 April 2005, DSR 
2005:VIII, p. 3499 / DSR 2005: X, p. 4603 
EC – Tube or Pipe Fittings  Appellate Body Report, European Communities – Anti-Dumping Duties on 
Malleable Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/AB/R , 
adopted 18 August 2003, DSR 2003:VI, p. 2613  
EC – Tube or Pipe Fittings  Panel Report, European Communities – Anti-Dumping Duties on Malleable 
Cast Iron Tube or Pipe Fittings f rom Brazil , WT/DS219/R , adopted 18 
August 2003, as modified by Appellate Body Report WT/DS219/AB/R, DSR 
2003:VII, p. 2701  
EC and certain member States 
– Large Civil Aircraft  Appellate Body Report, European Communities and Certain Member States 
– Measures Affecting Trade in Large Civil Aircraft , WT/DS316/AB/R , 
adopted 1 June 2011, DSR 2011:I, p. 7  
EC and certain member States 
– Large Civil Aircraft  Panel Report, European Communities and Certain Member States – 
Measures Affecting Trade in Large Civ il Aircraft , WT/DS316/R, adopted 
1 June 2011, as modified by Appellate Body Report, WT/DS316/AB/R , DSR 
2011:II, p.  685 
EU – Energy Package  Panel Report, European Union and its member States – Certain Measures 
Relating to the Energy Sector , WT/DS476/R  and Add.1, circulated to WTO 
Members 10 August 2018 [appealed by the European Union 21 September 
2018]  
EU – Fatty Alcohols 
(Indonesia)  Appellate Body Report, European Union – Anti-Dumping Measures on 
Imports of Certain Fatty Alcohols from Indon esia, WT/DS442/AB/R  and 
Add.1, adopted 29 September 2017  
EU – Footwear (China)  Panel Report, European Union – Anti-Dumping Measures on Certain 
Footwear from China , WT/DS405/R , adopted 22 February 2012, DSR 
2012:IX, p. 4585  
EU – PET (Pakistan)  Appellate Body Report, European Union – Countervailing Measures on 
Certain Polyethylene Terephthalate  from Pakistan , WT/DS486/AB/R  and 
Add.1, adopted 28 May 2018  
EU – PET (Pakistan)  Panel Report, European Union – Countervailing Measures on Certain 
Polyethylene Terephthalate  from Pakistan , WT/DS486/R , Add.1 and Corr.1, 
adopted 28 May 2018, as modified by Appellate Body Report 
WT/DS486/AB/R  
EU – Poultry Meat (China)  Panel Report, European Union – Measures Affecting Tariff Concessions on 
Certain Poultry Meat Products , WT/DS492/R  and Add.1, adopted 19 April 
2017 
Guatemala – Cement I  Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding 
Portland Cement from Mexico , WT/DS60/AB/R , adopt ed 25 November 
1998, DSR 1998:IX, p. 3767  
Guatemala – Cement II  Panel Report, Guatemala – Definitive Anti -Dumping Measures on Grey 
Portland Cement from Mexico , WT/DS156/R , adopted 17 November 2000, 
DSR 2000:XI, p. 5295  WT/DS371/RW2  
 
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  Short title  Full case title and citation  
India – Patents (US)  Appellate Body Report, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R , adopted 16 January 1998, 
DSR 1998:I, p. 9  
India – Solar Cells  Panel Report, India – Certain Measures Relating to Solar Cells and Solar 
Modules , WT/DS456/R  and Add.1, adopted 14 October 2016, as modified 
by Appellate Body Report WT/DS456/AB/R, DSR 2016:IV, p. 1941  
Indonesia – Autos  Panel Report, Indonesia – Certain Measures Affecting the Automobile 
Industry , WT/DS54/R , WT/DS55/R , WT/DS59/R , WT/DS64/R , Corr.1 and 
Corr.2, adopted 23 July 1998, and Corr.3 and Corr.4, DSR 1998:VI, p. 
2201 
Indonesia – Chicken  Panel Report, Indonesia – Measures Concerning the Importation of Chicken 
Meat and Chicken Products , WT/DS484/R  and Add.1, adopted 22 
November 2017  
Indonesia – Iron or Steel 
Products  Appellate Body Report, Indonesia – Safeguard on Certain Iron or Steel 
Products , WT/DS490/AB/R , WT/DS496/AB/R , and Add.1, adopted 27 
August 2018  
Indonesia – Iron or Steel 
Products  Panel Report, Indonesia – Safeguard on Certain Iron or Steel Products , 
WT/DS490/R , WT/DS496/R , and Add.1, adopted 27 August 2018, as 
modified by Appellate Body Report WT/DS490/AB/R, WT/DS496/AB/R  
Japan – Apples (Article 21.5 – 
US) Panel Report, Japan – Measures Affecting the Importation of Apples – 
Recourse to Article 21.5 of the DSU by the United States , WT/DS245/RW , 
adopted 20 July 2005, DSR 2005:XVI, p. 7911  
Japan – DRAMs (Korea)  Panel Report, Japan – Countervailing Duties on Dynamic Random Access 
Memories from Korea , WT/DS336/R , adopted 17 December 2007, as 
modified by Appellate Body Report WT/DS336/AB/R, DSR 2007:VII, p. 
2805 
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure o n Imports 
of Certain Dairy Products , WT/DS98/AB/R , adopted 12 January 2000, DSR 
2000:I, p. 3  
Korea – Dairy Panel Report, Korea – Definitive Safeguard Measure on Imports of Certain 
Dairy Products , WT/DS98/R  and Corr.1, adopted 12 January 2000, as 
modified by Appellate Body Report WT/DS98/AB/R, DSR 2000:I, p. 49  
Korea – Radionuclides (Japan)  Appellate Body Report, Korea – Import Bans, and Testing and Certification 
Requirements for Radionuclides , WT/DS495/AB/R and Add.1, circulated to 
WTO Members 11 April 2019  
Mexico – Corn Syrup (Article 
21.5 – US) Appellate Body Report, Mexico – Anti-Dumping Investigation of High 
Fructose Corn Syrup (HFCS) from the United States – Recourse to Article 
21.5 of the  DSU by the United States , WT/DS132/AB/RW , adopted 21 
November 2001, DSR 2001:XIII, p. 6675  
Morocco - Hot-Rolled Steel 
(Turkey)  Panel Report, Morocco – Anti-dumping Measures on Certain Hot -Rolled 
Steel from Turkey , WT/DS513/R  and Add.1, circulated to WTO Members 31 
October 2018 [appealed by Morocco 20 November 2018]  
Russia – Commercial Vehicles  Appellate Body Report,  Russia – Anti-Dumping Duties on Light Commercial 
Vehicles from Germany and Italy , WT/DS479/AB/R  and Add.1, adopted 9 
April 2018  
Russia – Commercial Vehicles  Panel Report, Russia – Anti-Dumping Duties on Light Commercial Vehicles 
from Germany and Italy , WT/DS479/R  and Add.1, adopted 9 April 2018, as 
modified by Appellate Body Report WT/DS479/AB/R  
Russia – Railway Equipment  Panel Report, Russia – Measures Affecting the Importation of Railway 
Equipment and Parts Thereof , WT/DS499/R  and Add.1, circulated to WTO 
Members 30 July 2018 [ appealed by Ukraine 27 August 2018 ] 
Russia – Tariff Treatment  Panel Report, Russia – Tariff Treatment of Certain Agricultural and 
Manufacturing Products , WT/DS485/R , Add.1, Corr.1, and Corr.2, adopted 
26 September 2 016, DSR 2016:IV, p. 1547  
Thailand – Cigarettes 
(Philippines)  Appellate Body Report, Thailand – Customs and Fiscal Measures on 
Cigarettes from the Philippines , WT/DS371/AB/R , adopted 15 July 2011 , 
DSR 2011:IV, p. 2203  
Thailand – Cigarettes 
(Philippines)  Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from 
the Philippines , WT/DS371/R , adopted 15 July 2011, as modified by 
Appellate Body Report WT/DS371/AB/R , DSR 2011:IV, p. 2299  WT/DS371/RW2  
 
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  Short title  Full case title and citation  
Thailand – Cigarettes 
(Philippines) (Article 21.5 – 
Philippines)  Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from 
the Philippines  – Recourse to Article 21.5 of the DSU by the Philippines , 
WT/DS371/RW  and Add.1, circulated to WTO Members 12 November 2018 
[appealed by Thailand 9 January 2019 ] 
US – 1916 Act  Appellate Body Report, United States – Anti-Dumping Act of 1916 , 
WT/DS136/AB/R , WT/DS162/AB/R , adopted 26 September 2000, DSR 
2000:X, p. 4793  
US – 1916 Act (Japan)  Panel Report,  United States – Anti-Dumping Act of 1916, Complaint by 
Japan , WT/DS162/R  and Add.1, adopted 26 September 2000, upheld by 
Appellate Body Report WT/DS136/AB/R, WT/DS162/AB/R, DSR 2000:X, p. 
4831 
US – Carbon Steel  Panel Report, United States – Countervailing Duties on Certain Corrosion -
Resistant Carbon Steel Flat Products from Germany , WT/DS213/R  and 
Corr.1, adopted 19 December 2002, as modified by Appellate Body Report 
WT/DS213/AB/R, DSR 2002:IX, p. 3833  
US – Carbon Steel  Appellate Body Report , United States – Countervailing Duties on Certain 
Corrosion -Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R  and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 
3779 
US – Clove Cigarettes  Panel Report, United States – Measures Affecting the Production and Sale 
of Clove Cigarettes , WT/DS406/R , adopted 24 April 2012, as modified by 
Appellate Body Report WT/DS406/AB/R, DSR 2012:XI, p. 5865  
US – Continued Suspension  Panel Report, United States – Continued Suspension of Obligations in the 
EC – Hormones Dispute , WT/DS320/R  and Add.1 to Add.7, adopted 14 
November 2008, as modified by Appellate Body Report WT/DS320/AB/R, 
DSR 2008:XI, p. 3891  
US – Continued Zeroing  Appellate Body Report, United States – Continued Existence and 
Applicati on of Zeroing Methodology , WT/DS350/AB/R , adopted 19 
February 2009, DSR 2009:III, p. 1291  
US – COOL (Article 22.6 – 
United States)  Decisions by the Arbitrator, United States – Certain Country of Origin 
Labelling (COOL) Requirements – Recourse to Article 2 2.6 of the DSU the 
United States , WT/DS384/ARB  and Add.1 / WT/DS386/ARB  and Add.1, 
circulated to WTO Members 7 December 2015, DSR 2015:XI, p. 5877  
US – Countervailing and Anti -
Dumping Measures (China)  Appellate Body Report, United States – Countervailing and Anti -Dumping 
Measures on Certain Products from China , WT/DS449/AB/R  and Corr.1, 
adopted 22 July 2014, DSR 2014:VIII, p. 3027  
US – Countervailing Duty 
Investigation on DRAMS  Panel Report, United States – Countervailing Duty Investigation on 
Dynamic Random Access Memory Semiconductors (DRAMS) from Korea , 
WT/DS296/R , adopted 20 July 2005, as modified by Appellate Body Report 
WT/DS296/AB/R, DSR 2005:XVII, p. 8243  
US – FSC (Article 21.5 – EC) Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations " – Recourse to Article 21.5 of the DSU by the European 
Communities , WT/DS108/AB/RW , adopted 29 January 2002, DSR 2002:I, 
p. 55 
US – Gasoline  Panel Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/R , adopted 20 May 1996, as modified by 
Appellate Body Report WT/DS2/AB/R, DSR 1996:I, p. 29  
US – Lamb  Appellate Body Report, United States – Safeguard Measures on Imports of 
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia , 
WT/DS 177/AB/R , WT/DS178/AB/R , adopted 16 May 2001, DSR 2001:IX, 
p. 4051  
US – Large Civil Aircraft (2nd 
complaint)  Panel Report, United States – Measures Affecting Trade in Large Civil 
Aircraft (Second Complaint) , WT/DS353/R , adopted 23 March 2012, as 
modified by Appellate Body Report WT/DS353/AB/R, DSR 2012:II, p. 649  
US – Large Civil Aircraft (2nd 
complaint) (Article 21.5 – EU) Panel Report, United States – Measures Affecting Trade in Large Civil 
Aircraft (Second Complaint) – Recourse to Article 21.5 of the DSU by the 
European Union , WT/DS353/RW  and Add.1, circulated to WTO Members 9 
June 2017  [appealed by the European Union 29 June 2017]  
US – Oil Country Tubular 
Goods Sunset Reviews  Appellate Body Report, United States – Sunset Reviews o f Anti -Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R , 
adopted 17 December 2004, DSR 2004:VII, p. 3257  WT/DS371/RW2  
 
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  Short title  Full case title and citation  
US – Poultry (China)  Panel Report, United States – Certain Measures Affecting Imports of 
Poultry from China , WT/DS392/R , adopted 25 October 2010, DSR 2010:V, 
p. 1909  
US – Section 110(5) Copyright 
Act Panel Report, United States – Section 110(5) of the US Copyright Act , 
WT/DS160/R , adopted 27 July 2000, DSR 2000:VIII, p. 3769  
US – Section 211 
Appropriations Act  Panel Report, United States – Section 211 Omnibus Appropriations Act of 
1998, WT/DS176/R , adopted 1 February 2002, as modified by Appellate 
Body Report WT/DS176/AB/R, DSR 2002:II, p. 683  
US – Shrimp  Appellate Body Report, United States – Import Prohibition of Certain 
Shrimp and Shrimp Products , WT/DS58/AB/R , adopted 6 November 1998, 
DSR 1998:VII, p. 2755  
US – Shrimp  Panel Report, United States – Import Prohibition of Certain Shrimp and 
Shrimp Products , WT/DS58/R  and Corr.1, adopted 6 November 1998, as 
modified by Appellate Body Report WT/DS58/AB/R, DSR 1998:VII, p. 2821  
US – Shrimp (Viet Nam)  Panel Report, United States – Anti-Dumping Measures on Certain Shrimp 
from Viet Nam , WT/DS404/R , adopted 2 September 2011 , DSR 2011:X, p. 
5301 
US – Softwood Lumber IV  Appellate Body Report, United States – Final Countervailing Duty 
Determination with Respect to Certain Softwood Lumber from Canada , 
WT/DS257/AB/R , adopted 17 February 2004, DSR 2004:II, p. 571  
US – Softwood Lumber IV 
(Article 21.5 – Canada)  Appellate Body Report, United States – Final Countervailing Duty 
Determination with Respect to Certain Softwood Lumber from Canada – 
Recourse by Canada to Article 21.5 of the DSU , WT/DS257/AB/RW , 
adopted 20 Decemb er 2005, DSR 2005:XXIII, p. 11357  
US – Softwood Lumber VI 
(Article 21.5 – Canada)  Appellate Body Report, United States – Investigation of the International 
Trade Commission in Softwood Lumber from Canada – Recourse to Article 
21.5 of the DSU by Canada , WT/DS277/AB/RW , adopted 9 May 2006, and 
Corr.1, DSR 2006:XI, p. 4865  
US – Stainless Steel (Mexico)  Panel Report, United States – Final Anti -Dumping Measures on Stainless 
Steel from Mexico , WT/DS344/R , adopted 20 May 2008, as modified by 
Appellate Body Report WT/DS344/AB/R, DSR 2008:II, p. 599  
US – Steel Safeguards  Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Certain Steel Products , WT/DS248/AB/R , WT/DS249/AB/R , 
WT/DS251/AB/R , WT/DS252/AB/R , WT/DS253/ AB/R, WT/DS254/AB/R , 
WT/DS258/AB/R , WT/DS259/AB/R , adopted 10 December 2003, DSR 
2003:VII, p. 3117  
US – Tuna II (Mexico)  Panel Report, United States – Measures Concerning the Importation, 
Marketing and Sale of Tuna and Tuna Products , WT/DS381/R,  adopted 13 
June 2012, as modified by Appellate Body Report WT/DS381/AB/R, DSR 
2012:IV, p. 2013  
US – Upland Cotton (Article 
21.5 – Brazil)  Appellate Body Report, United States – Subsidies on Upland Cotton – 
Recourse to Article 21.5 of the DSU by Brazil , WT/DS267/AB/RW , adopted 
20 June 2008, DSR 2008:III, p. 809  
US – Zeroing (Japan) (Article 
21.5 – Japan)  Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews – Recourse to Article 21.5 of the DSU by Japan , 
WT/DS322/AB/RW , adopted 31 August 2009, DSR 2009:VIII, p. 3441  
 
 
  WT/DS371/RW2  
 
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  TABLE OF ABBREVIATIONS  
Abbreviation  Description  
ACWL/Commerce Letters  Advisory Centre on WTO Law  opinion of 21 May 2012 and related letter of 22 
January 2014 from the Thai Ministry of Commerce to Thailand 's Attorney 
General  
Anti-Dumping Agreement  Agreement on Implementation of Article VI of the General Agreement on 
Tariffs and Trade 1994  
BoA Board of Appeals  
November 2012 BoA Ruling  Board of Appeals Ruling No. GorOr 112/2555/Por9/2555(3.1) of 16 November 
2012 
2003-2006 Charges  The Charges, Case Black No. Or. 185/2559, 18 January 2016  
2002-2003 Charges  The Charges, Case Black No. Or. 232/2560, 26 January 2017  
Customs Act  Customs Act B.E. 2469 (1926), as amended  
CVA Agreement on Implementation of Article VII of the General Agreement on 
Tariffs and Trade 1994  
DGCE  Indonesian Directorate General of Customs and Excise  
DSB Dispute Settlement Body  
DSI Department of Special  Investigation  
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes  
GAAP  Generally Accepted Accounting Principles  
GATT 1994  General Agreement on Tariffs and Trade 1994  
HJE Harga Jual Exeran  
ILC Articles on State 
Responsibility  International Law Commission, Articles on Responsibility of States for 
Internationally Wrongful Acts, adopted by the ILC at its fifty -third session, in 
2001, published in Yearbook of the International Law Commission, 2 001, Vol. 
II, Part Two  
King Power  King Power International Co. Ltd.  
Ministerial Decision  Ministerial Decision Regarding Cases Where Customs Administrations Have 
Reasons to Doubt the Truth or Accuracy of the Declared Value  
MoA DSI, Memorandum of Allegations , dated 22 September 2016  
Nairobi Convention  International Convention on Mutual Administrative Assistance for the 
Prevention, Investigation and Repression of Customs Offences (signed in 
Nairobi, 9 June 1977, entered into force 2 1 May 1980)  
NoAs Notices of Assessment  
P&GE  Profits and General Expenses  
PM Indonesia  Philip Morris Indonesia (also referred to as PTPMI)  
PMTL  Philip Morris (Thailand)  Limited  (also referred to as PM Thailand)  
PM Philip Morris  
PMPMI  Philip Morris Philippines Manufacturing Inc.  
Revised Kyoto Convention  International Convention on the Simplification and Harmonization of  
Customs Procedures , done at Kyoto, 18 May 1973, 950 UNTS 269, as  
amended by the Protocol of Amendment to the International Convention  
on the Simplification and Harmonization of Customs Procedures , done  
at Brussels, 26 June 1999, 2370 UNTS 27  
September 2012 BoA Ruling  Board of Appeals Ruling No. GorOr 81/2555/Por7/2555(4.1) and cover letter 
No. GorKor 0519(8) (GotOr), 12 September 2012  
THB Thai baht  
TTM Thailand Tobacco Monopoly  
USD United States dollar  WT/DS371/RW2  
 
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  Abbreviation  Description  
Vienna Convention  Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 
UN Treaty Series, Vol. 1155, p. 331  
WTO World Trade Organization  
WTO Agreement  Marrakesh Agreement Establishing the World Trade Organization  
 
 
  WT/DS371/RW2  
 
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  EXHIBITS CITED IN TH IS REPORT  
 
Exhibit 
Number  Full Title  
PHL-8-B Customs Act (No. 17), B.E. 2543 (2000) (English translation)  
PHL-13-B DSI, Memorandum of Allegation s, 22 September 2016 (English translation)  
PHL-14-B The Criminal Court, Charges, Case Black No. Or. 232/2560, 26 January 2017 (English translation)  
PHL-16-B The Reward Giving to Offender Suppression Act. B.E. 2498 (1946) (English translation)  
PHL-21-B BoA Ruling, No. GorOr 112/2555/Por9/2555(3.1) and cover letter No. GorKor 0519(8)/(GorOr)/118, 
16 November 2012 (English translation)  
PHL-32-B Central Tax Court Ruling, 29 October 2014 (English translation)  
PHL-34-B Custom  Act B.E. 2469 (1926) (as amended to (No. 22) B.E. 2557 (2014)) (English translation)  
PHL-98-B Customs Act (No. 11), B.E. 2490 (1947) (English translation)  
PHL-99-B Criminal Code, Section 4 of the Amendment Act of the Criminal Code (No. 6) B.E. 2526 (1983) 
(English translation)  
PHL-240-B Sample Notices of Assessment (English translation)  
PHL-241-B TTM Position Paper, 16 November 2017 (English translation)  
PHL-243-B Letter from the Public Prosecutor to PMTL, 8 December 2016 (English translation)  
PHL-244-B Supreme Court decision on Nov 2012 BoA Ruling of 7 May 2018, 28 December 2017 (English 
translation)  
PHL-246-B Thai Customs Act B.E. 2560, 14 May 2017 (English translation)  
PHL-247-B Letter from PMTL to the Director General of the Customs Departme nt, 14 December 2017 (English 
translation)  
PHL-248-B a Sample PMTL appeal against the NoAs to the BoA, 26 December 2017 (English translation)  
PHL-249-B Sample PMTL appeal against the NoAs to the Excise Department, 28 December 2017 (English 
translation)  
PHL-250-B Letter from the Customs Department to PMTL, 10 January 2018 (English translation)  
PHL-253-B Letter from the DSI to PMTL, 3 June 2011 (English translation)  
PHL-254-B Letter from the DSI to PMTL, 11 September 2013 (English translati on) 
PHL-255-B Witness statement of Dr. Joko Wiyono, 20 April 2012 (English translation)  
PHL-256-B Witness statement of Eka Siswani, 3 May 2012 (English translation)  
PHL-257-B Letter from the DSI to PMTL, 21 August 2015 (English translation)  
PHL-258-B 
REV T&G statement, 11 September 2015 (English translation)  
PHL-259-B Decree of the Minister of Finance of the Republic of Indonesia No. 89/KMK.05/2000, 29 March 2000 
(English translation)  
PHL-260-B Decision of the Director General of Customs an d Excise No. KEP -17/BC/2000 (English translation)  
PHL-263-B Indonesian Law on Excise, Law No. 11/1995 (English translation)  
PHL-264 Example Form CK -21A 
PHL-265-B Decision of the Director General of Customs and Excise No. KEP 19/BC/1997 (English translation)  
PHL-273-B Annex to the 2002 -2003 Charges, 26 January 2017 (English translation)  
PHL-275-B Letter from PMTL requesting clarification of the MOA, 7 October 2016 (English translation)  
PHL-276-B Letter from the DSI to PMTL, 3 November 2016 (English translation)  
PHL-277-B Letter from PMTL to the Public Prosecutor, 14 November 2016 (English translation)  
PHL-279-B Request for Fair Treatment and Justice, 4 February 2011 (English translation)  
PHL-280-B Letter on evidence and witnesses in relation to CK -21A, 26 September 2013 (English translation)  
PHL-281-B Letter from PMTL to the DSI, 4 May 2012 (English translation)  
PHL-282-B Letter from PMTL to the Public Prosecutor, 28 October 2016 (English translation)  
PHL-292-B Letter from PMTL to the Customs Department, 4 May 2018 (English Translation)  
PHL-293-B Letter from the Customs Department to PMTL, 28 May 2018 (English Translation)  
PHL-295-B Official Statement from the Indonesian Ministr y of Law and Human Rights dated 13 May 2016 
(English translation)  WT/DS371/RW2  
 
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  Exhibit 
Number  Full Title  
PHL-296-B BOA Ruling, 30 August 2018 (English Translation)  
THA-55 Kyoto Convention on the Simplification and Harmonization of Customs Procedures, Chapter 2  
THA-57 Letter from the Thai Customs Department to PMTL, 21 March 2018  
THA-58 Letter from the Thai Customs Department to PMTL, 23 March 2018  
THA-59 Statement by the Director -General of the Thai Customs Department  
THA-67-B Letter from the Director -General of the Customs Department t o PMTL, 21 August 2018 (English 
Translation)  
THA-68 Communication from the World Customs Organization to Thailand's Director of Customs Standards 
and Procedure Bureau, 6 July 2018  
THA-78 Article 10 of Ley Orgánica de Represión del Contrabando 12/1995 (Organic Act on the Repression of 
Smuggling 12/1995)  
THA-80 ASEAN Treaty on Mutual Legal Assistance in Criminal Matters 2004  
THA-81-B Act on Mutual Assistance in Criminal Matters B.E. 2535 (1992) (English translation)  
THA-82-B Regulation of the Central Authority on Providing and Seeking Assistance in Criminal Matters B.E. 
2537 (1994), (English translation)  
THA-84 Thai Criminal Code B.E. 2499 (1956)  
THA-85 Memorandum from the Commissioner of the Philippines' Bureau of Customs, 2018-06-18, 14 June 
2018 
 
 
 
 
  WT/DS371/RW2  
 
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  1  INTRODUCTION  
1.1  Prior proceedings in DS371  
1.1.  This is the Philippines ' second recourse to Article 21.5 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes (DSU)  concern ing the alleged failure by Thailand 
to comply with the Dispute Settlement Body 's (DSB) recommendations and rulings in the original 
proceeding in Thailand – Customs and Fiscal Measures on  Cigarettes from the Philippines . 
1.2.  In the original proceeding, the Philippi nes challenged various measures relating to cigarettes 
imported into Thailand by Philip Morris (Thailand ) Limited (PMTL). These included: (1 ) delays by 
Thailand 's Board of Appeals (BoA) in resolving appeals brought by PMTL challenging t he Thai 
Customs Department 's rejection of  PMTL's transaction value s for 210 entries of cigarette s over the 
period 2002 -2003; (2 ) the Thai Customs Department 's determination of customs value for 118 
entries ove r the period 2006 -2007; and (3 ) several measures relati ng to Thailand 's Value -Added 
Tax (VAT) regime as applied to domestic and imported cigarettes.1 
1.3.  In its first recourse to Article 21.5 of the DSU, the Philippines challenged three sets of measures  
taken by Thai authorities after the adoption of the panel and  Appellate Body reports in the original 
proceeding. The three sets of measures included :  
a. A ruling by the BoA issued in November 2012. The BoA compared PMTL 's profit and general 
expenses (P&GE) rate with an industry benchmark  P&GE range that the BoA calcul ated. 
The BoA found that PMTL 's P&GE rate fell outside of that range, and on that basis 
concluded that the price paid by PMTL for 210 entries of cigarettes between 2002 -2003 
was influenced by the relationship between the buyer and seller. The BoA rejected the 
customs value as declared by PMTL, and proceeded to determine a higher customs value 
using the so -called deductive method. The Philippines challenged multiple aspects of the 
November 2012 BoA Ruling itself, and alleged several  procedural violations, under the 
Agreement on Implementation of Article VII of the General Agre ement on Tariffs and Trade 
1994 (CVA).  
b. A set of criminal charges filed in January 2016 by the Public Prosecutor against PMTL and  
seven of its employees . The Ch arges allege d that PMTL under -declared the customs values 
for 272  entries of cigarettes between 2003 -2006. The Philippines challenged the substance 
of Charges under the CVA, as well as an alleged disclosure  of PMTL 's confidential 
information to Thai newspa pers the day after the Charges were filed.  
c. The Ministry of Finance 's administration of the VAT regime for cigarettes. Under this 
regime, PMTL was required to  notify the average actual market price of its cigarettes in 
Thailand for the purpose of determini ng the base for co llecting the VAT  on those cigarettes. 
The Philippines challenged this notification requirement, including the required timing of 
the notification and the government 's refusal to publish an unwritten rule allegedly 
followed in implementing  this requirement.  
1.4.  Regarding the November 2012 BoA Ruling , the Panel found that:  
a. The BoA violated Articles  1.1 and 1.2(a) of the CVA by rejecting PMTL's declared 
transaction value s without a valid basis, because the BoA 's comparison of PMTL 's P&GE 
rate with the industry P&GE range constructed by the BoA was flawed in a manner that 
rendered it ina pt to reveal whether the relationship between PMTL and PM Indonesia2 
                                                
1 For a list of the findings made by the panel and the Appellate Body in the original proceeding, 
Thailand's declared measures taken to comply, and the three sets of measures that were challenged by the 
Philippines in its first recourse to Article 21.5, see Panel Report, Thailand – Cigarettes (Philippines)  
(Article  21.5 – Philippines) , paras. 1.2 -1.9. 
2 The full name of PM Indonesia is PT Philip Morris Indonesia (with "PT" being an acronym for a term 
that represents a limited liability company in Indonesia). In the Panel R eport in the first recourse to 
Article  21.5, the Panel referred to the importer in Thailand by the acronym "PMTL". The Panel also used an 
acronym to refer to Philip Morris Philippines Manufacturing Inc. (i.e. "PMPMI"). The Panel referred to the 
producer/se ller based in Indonesia as "PM Indonesia", rather than using the acronym "PTPMI", only to avoid a 
 WT/DS371/RW2  
 
- 18 - 
 
  influenced the price . Furthermore, the BoA failed to communicate its grounds for  
considering that the relationship influenced the price and thereby failed  to give PMTL an 
opportunity to respond.  
b. The Bo A violated  Article 5.1(a)(i), (ii) and (iv) of the CVA , when  applying the deductive 
method to determine an alternative customs value, b y failing to deduct appropriate 
amounts in respect of P&GE, transport costs and provincial taxes payable .  
c. The BoA violated  Article 11.3 of the CVA by failing to provide sufficient reasons for its 
decision in the Ruling , and also violated Article 16 of the  CVA by failing to provide a timely 
explanation of how the customs value was determined, following the importer 's request 
for an explanation.  
1.5.  Regarding the Charges , the Panel  found that:  
a. The Charges violated  Articles 1.1 and 1.2(a) of the CVA because they  reject ed the 
importer 's declared transactio n values without a valid basis. In particular, the Public 
Prosecutor 's use of a duty -free operator 's prices as a benchmark  was not apt to reveal 
whether the relationship between the importer and the seller  influe nced the price.  
b. The Charges determined a revised customs value on a basis that was inconsistent with the 
customs valuation rules in Articles  2.1 and/or 3.1 of the CVA.  
c. The Philippines did not demonstrate that  Thai officials were  responsible for disclosing 
PMTL's import prices to the media contrary to Article 10 of the CVA.  
1.6.  Regarding the VAT notification requirement, the Panel found that:  
a. Thailand violated Article X:1 of the General Agreement on Tariffs and Trade 1994 (GATT 
1994) by adopting an administrative ruling of general application without publishing it.  
b. Thailand violated Article X:3(a) of the GATT 1994, because it administered its Revenue 
Code provisions in an unreason able manner by imposing on cigarette importers a VAT 
notification requirement with which it was impossible to ensure compliance and which 
exposed importers to potential consequences of non -compliance.  
c. Thailand violated Article III:4 of the GATT 1994 by acc ording to imported products less 
favourable treatment than that accorded to like domestic products.  
1.7.  The Report of the Panel in the first recourse to Article 21.5 was circulated on 12 November 
2018. On 9 January 2019, Thailand filed an appeal .3  
1.2  Complaint b y the Philippines  
1.8.  This second recourse to Article 21.5  was initiated by a request for consultations by the 
Philippines dated 21 February 20184, made  pursuant to Articles  4 and 21.5 of the DSU, Article XXII:1 
of the GATT 1994 , Article 19 of the CVA, and par agraph 1 of the Understanding between the 
Philippines and Thailand of 1 June 2012 regarding Procedures under Articles 21 and 22 of the DSU 
(Sequencing Agreement ).5  
                                                
potentially confusing proliferation of acronyms. In their submissions in this proceeding, the parties use the 
abbreviation "PTPMI" when referring to PM Indone sia. In order to align the terminology used here with that 
already used in the Panel Report in the first recourse to Article 21.5, the Panel will refer to the producer/seller 
based in Indonesia as "PM Indonesia".   
3 See WT/DS371/27.  
4 See WT/DS371/21/Rev.1 , which replaced and superseded an earlier request for consultations dated 
6 July 2017.  
5 WT/DS371/16.  
 WT/DS371/RW2  
 
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  1.9.  In its request for consultations, the Philippines identified two distinct sets of measures  that 
were taken by Thailand after the establishment and composition of the Panel in the first recourse to 
Article 21.5 : 
a. Charges filed by the Public Prosecutor against PMTL and one of its former employees on 
26 January 2017, in respect of 780 entri es6 of cigarettes imp orted over the period 2002 -
2003 (the 2002 -2003 Charges) ; and  
b. 1,052 revised Notices of Assessm ent ("NoAs") that PMTL received in November 2017 from 
Thailand 's Customs Department, rejecting  PMTL's declared transaction values, and 
determ ining revised customs valu es, for 1,052 entries of cigarettes imported over the 
period 2001 -2003 (the 1,052 revised NoAs) .  
1.10.   Both the 2002-2003 Charges and the 1,052 revised NoAs rest on the same basis, namely the 
calculation, by the Thai Department of Special Investigation (DSI) , of the "actual " price/ value of 
PMTL's imports of cigarettes over the 2001 -2003 period . Whereas the 2003 -2006 Charges at issue 
in the first r ecourse to Article 21.5 alleged that PMTL under -declared its customs values by reference 
to the selling price of a duty -free operator (King Power), t he DSI is said to have calculated the 
"actual " price/value of the entries subject to the 2002 -2003 Charges  based on certain pricing and 
cost information reported by the producer and seller of the cigarettes at is sue, PM Indonesia, to  
Indonesian tax authorities in the CK-21A form.7 The 2002-2003 Charges refer to the "actual price " 
of the cigarettes imported by P MTL, whereas the 1,052 revised NoAs refer to the "actual value " of 
those cigarettes.  
1.3  Panel establishment and composition  
1.11.   The Philippines and Thailand held consultations on 12 March 2018. On 14 March 2018, the 
Philippines requested the establishment of a c ompliance panel with standard terms of reference, 
pursuant to Articles  6 and 21.5 of the DSU, Article XXIII of the GATT  1994, Article 19 of the CVA, 
and paragraph 1 of the Sequencing Agreement.8 At its meeting on 27 March 2018, the DSB 
established a second  compliance panel to examine the matter raised by the Philippines in document 
WT/DS371/22.9 
1.12.   The Panel 's terms of reference are the following:  
To examine, in the light of the relevant provisions of the covered agreements cited by 
the parties to the dispute, the matter referred to the DSB by the Philippines in document 
WT/DS371/22 and to make such findings as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements.10 
                                                
6 In its panel request, the Philippines indicates that the Charges cover 779 entries. (Panel request, 
paras. 18 and 19.) In its first written submission,  the Philippines clarified that the Charges cover 780 entries, 
including 779 entries that overlap with the 1,052 revised NoAs, and one additional entry which does not. (See 
e.g. Philippines' first written submission, paras. 9, 28, and 69.) Thailand has not  taken issue with this 
correction. The Panel has reviewed the Charges, and they indeed state that "[t]he incidents in the above 
Clauses 2.1 -2.780 constituted 780 offenses". (The Criminal Court, Charges, Case Black No. Or. 232/2560, 
26 January 2017 (English  translation), (Exhibit PHL -14-B), p. 2.) The Annex to the Charges likewise presents 
data on 780 entries. (Annex to the 2002 -2003 Charges, 26 January 2017 (English translation), (Exhibit PHL -
273-B).) 
7 The Panel provides detailed information on the nature of the CK -21A form in the context of its findings 
in Section 7.2 (The Thai authorities' reliance on the information in the CK -21A forms) of the Report. During the 
proceeding, the Philippines raised doubts about whether Thailand had actually received the in formation 
contained in CK -21A forms from Indonesia. In its comments on the draft descriptive part of the Report, the 
Philippines considered it appropriate to reflect these doubts by suggesting that the paragraphs containing the 
Panel's description of Thail and's reliance on information obtained from Indonesian authorities be qualified with 
phrases and terms such as "is said to have", "said to be", "asserted" and "allegedly". The Panel considers this 
to be the more neutral formulation for purposes of the desc riptive part, and has made this change. The Panel 
elaborates on this issue below in Section 7.1.4.2 (Relevance of the presumption of good faith to accepting the 
veracity of Thailand's representations).  
8 WT/DS371/22.  
9 WT/DSB/M/410.  
10 WT/DS371/23.  
 WT/DS371/RW2  
 
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  1.13.   On 9 May 2018, the parties agreed that the panel would be composed as follows11: 
Chairperson:  Mr Thomas Cottier  
 
Members:   Mr Alvaro Espinoza  
   Mr Alvaro Hansen  
 
1.14.   Australia, China, Colombia, the European Union, India, Indonesia, Japan, the Russian 
Federation, Singapore, and the United Sta tes notified their interest in participating in the Panel 
proceedings as third parties.  
1.4  Panel proceedings  
1.4.1   General  
1.15.   The Panel adopted its Working Procedur es and a partial timetable on 24 May 2018, based on 
the drafts jointly proposed by the parties.12 
1.16.   The Panel held its substantive meeting with the parties on 29 -30 October 2018, including a 
session with the third parties which took place on 30 October 2018. On 7 January 2019 , the Panel 
issued the descriptive part of its Report to the parties. The Panel issued its Interim Report to the 
parties on 4 March  2019. The Panel issued its Final Report to the parties on 23 April 201 9. 
1.17.   The Panel was confronted with a number of contentious procedural issues during the 
proceeding. These included the issue of third -party access to the confidential Final Report, 
submissions and exhibits in the first recourse to Article 21.5; several issues arising from the 
Philippines' request for copies of communications between Indonesian and Thai government officials; 
and Thailand's request that the Panel decline to rule on certain legal claims that, in its view, were 
not adequately specified in the panel request or raised in a timely manner. The Panel ruled on the 
first two sets of issues during the proceeding, and those rulings are recapitulated in relevant part 
below. The Panel recalls the procedural aspects of Thailand's terms of reference objections below, 
and addresses the  substance of those objections below in Section 7.1.3.3 (The Philippines' 
alternative claims under Article 7. 1 of the CVA) . 
1.4.2   Third-party access to the confidential Final Report , submissions and exhibits  in the 
first recourse to Article  21.5 
1.18.   The Final Report of the Panel in the Philippines ' first recourse to Article 21.5 was issued to the 
parties on 12 March 2018. At that time, the  Secretariat informed the parties that it expected that 
the Final Report would not be translated and circulated before t he last quarter of 2018 .  
1.19.   On 15 May 2018,  the Philippines requested that  the Members participating as third parties in 
this second recourse to A rticle 21.5 of the DSU be granted access to the co nfidential Final Report 
prior to its circulation . On 24 May 2018, the Panel issued a procedural ruling gr anting the Philippines ' 
request. The Panel elaborated the  reaso ns for granting the request in its procedural ruling, which it 
circulated to the DSB on 1  June 2018.13  
1.20.   On 29 May 2018, Thailand suggested tha t it would be in line with the Panel 's procedural ruling 
if the part ies were to assume the obligation to provide to third parties, up on request, copies of all 
the parties ' submissions and exhibits from the first recourse to Article 21.5.  Thailand suggested that 
the Panel amend its Working Pro cedures to that effect, and the Philippines responded  that it had no 
                                                
11 As Mr Roberto Carvalho de Azevêdo and Mr Richard Gottlieb, both original panellists, were no longer 
available, they were replaced in the first recourse to Article 21.5 by Mr Thomas Cottier and Mr Alvaro Espinoza, 
respectively.  
12 The Panel's Working Procedures,  as amended on 30 May 2018, are reproduced in Annex A -1.  
13 WT/DS371/24. The Panel also annexed its ruling to the Report of the Panel in the first recourse to 
Article 21.5. See Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , Annex A -3.  
 WT/DS371/RW2  
 
- 21 - 
 
  objection to Thailand 's proposal.14 On 30 May  2018, the Panel amended its Working Procedures to 
include the language proposed by Thailand.15  
1.4.3   The Philippines ' request for copies of communic ations between Indonesian and Thai 
government officials  
1.4.3.1   Thailand 's objection to the Philippines ' letter of 24 September 2018  
1.21.   As indicated above, the 2002 -2003 Charges and the 1,052 revised NoAs contain figures on 
the "actual price " and "actual value " of PMTL's imports of cigarettes over the 2001 -2003 period that 
the Thai authorities are said to have calculated using pricing and cost information reported by 
PM Indonesia  to the Indonesian tax authorities in the CK -21A form. In a set of pre -hearing written 
questions sent to the parties on 17  September 2018, the Panel sought clarification of certain issues 
relating to the Thai authorities ' asserted reliance on the pricing and cost information reported by PM 
Indonesia to Indonesian tax authorities in the CK -21A form. The timetable adopted by the Panel 
provided that the parties would  submit their written responses to those questions on 8 October 
2018.  
1.22.   On 24  September 2018, the Philippines sent a letter t o Thailand, copied to the Panel, 
expressing its hope that, when Thailand responded to the Panel 's questions, it would "provid[e]  
copies of its communications with Indonesia to establish how Indonesia described the relevant CK -
21A information, as well as the CK -21A forms ". On 25  September 2018, Thailand objected  that the 
Philippines ' letter  "submits additional comments not contempla ted in the Panel 's timetable ", and 
requested the Panel "to exclude the Philippines ' letter from the Panel 's record and not to take the 
comments made in that letter into consideration during the course of this compliance proceeding ".  
1.23.   In a communication dat ed 27  September 2018,  the Panel informed the parties that:  
In response to Thailand 's request, the Panel hereby confirms that any substantive 
comments that a party wishes to make on the factual or legal issues in dispute will be 
taken into account by the Pa nel only insofar as those comments are made in the context 
of a written or oral submission that is scheduled according to the timetable, in the 
context of an unscheduled submission that the Panel has previously granted leave to 
file, or in the context of p rocedural request addressed to the Panel.  
The Panel notes that the Philippines ' letter of 24 September 2018 is addressed to 
Thailand, and not to the Panel. The letter is forward -looking, and concerns information 
that, in the Philippines ' view, Thailand cou ld usefully provide in its responses to the 
Panel 's questions due on 8 October 2018. At this time, the Philippines has made no 
request, pursuant to Article 13 of the DSU, that the Panel seek from Thailand the 
information referenced in the Philippines ' letter of 24 September 2018.  
Accordingly, the Panel expects that, insofar as the Philippines wishes for the Panel to 
take into consideration any of the comments contained in the Philippines ' letter of 
24 September 2018, the Philippines will proceed to make tho se comments in the context 
of its responses to the Panel 's questions due on 8 October 2018 or in its oral submissions 
at the meeting with the Panel, and/or in the context of a future request, made pursuant 
to Article 13 of the DSU, that is addressed to the  Panel. If the Philippines does so, then 
                                                
14 The Philippines stated that, while it had no  objection to amending the Working Procedures as 
suggested by Thailand, such amendment was not a necessary pre -condition for the parties granting the third 
parties access to their submissions and exhibits from the first compliance proceeding. In this regar d, the 
Philippines observed that either party could simply include its submissions and exhibits from the first 
compliance proceedings as exhibits to its submissions in this second compliance proceeding (which the 
Philippines itself had already done in conn ection with its first written submission).  
15 The Panel accepted Thailand's proposed amendment primarily for administrative reasons, to avoid the 
parties resubmitting all of their submissions and exhibits from the first recourse to Article 21.5 as new exhib its 
in this second recourse to Article 21.5. As communicated to the parties on 30  May 2018, the result of the 
amendment to the Working Procedures was that if either party referred to an exhibit or submission from the 
first compliance panel proceeding, that  party was not required to resubmit a copy of that exhibit or submission 
to the Panel or the other party; however, if any third party requested that a party provide it with a copy of a 
submission or exhibit from the first compliance panel proceeding, that party would provide it directly to the 
requesting third party.  WT/DS371/RW2  
 
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  Thailand 's request of 25 September 2018 will be rendered moot; and if not, then the 
comments made in the Philippines ' letter of 24 September 2018 will not be taken into 
account by the Panel in its resolution of the matter before it.  
1.24.   On 1 October 2018, Thailand sent an email to the Panel indicating its dissatisfaction with the 
Panel 's response. Thailand stated that it had requested the Panel ( 1) "to exclude the Philippines ' 
letter from the record "; and ( 2) "not to take the comments made in that letter into consideration 
during the course of this compliance proceeding ". Thailand indicated that the Panel 's communication 
of 27 September 2018 addressed only the second point, and  that it was "ambiguous from the Panel 's 
communication whether the Philippines ' letter would be immediately removed from the record ". 
Thailand requested the Panel "to address [its] request to exclude the Philippines ' letter from the 
record ". 
1.25.   The Panel resp onded with a communication dated 9 October 2018, following the receipt of 
the parties ' written responses to the pre -hearing questions. In that communication, t he Panel 
informed  the parties  that it understood its prior communication to fully and efficiently  dispose of the 
matter raised by Thailand in its email request of 25 September 2018. The Panel further observed 
that Thailand 's initial request had by that time  "become moot, as a consequence of the Philippines 
reiterating the substantive comments initially made in its letter of 24 September 2018 in its 
comments on Panel question No. 143 ". However, the Panel clarified that:  
[A]s regards Thailand 's request that the Panel "exclude the Philippines ' letter from the 
record and not to take the comments ma de in that letter into consideration during the 
course of this compliance proceeding ", the Panel refrained from specifically addressing 
the italicized element of Thailand 's request in the interest of economy of expression. It 
was not clear that this senten ce embodied two distinct requests, as Thailand maintains 
in its follow -up email request of 1  October  2018. The Panel did not consider it essential 
to clarify the intended meaning of Thailand 's email request, and whether this sentence 
presents two ways of s aying the same thing, because in any event the practical effect 
of declaring that the letter was "excluded from the record " would be the same as the 
Panel 's confirmation that "the comments made in the Philippines ' letter of 
24 September  2018 will not be ta ken into account by the Panel in its resolution of the 
matter before it " except and insofar as the Philippines makes them in the context of a 
subsequent authorized submission or procedural request addressed to the Panel. In 
both scenarios, it would mean th at the Panel would not take into account the substantive 
comments made in that letter. Thus, in the interest of disposing of the matter raised in 
the most economical way, the Panel did not consider it necessary or useful for its 
communication to engage in a discussion of this aspect of th e sentence referred to 
above.  
However, in the light of Thailand 's subsequent insistence that we specifically rule on 
this aspect of its request, and its statement that it is "ambiguous from the Panel 's 
communication whether  the Philippines ' letter would be immediately removed from the 
record ", we consider it necessary to clarify that t he Panel did not and will not exclude 
the Philippines ' letter of 24  September  2018 from the official record of this dispute 
settlement proceeding. It appears that Thailand is requesting the Panel to remove the 
electronic and paper copies of the letter from the official record of the dispute. We note 
that, in the light of Rule 25(2)(c) of the Working Procedures for Appellate Review, it is 
doubtful that a panel could instruct the Secretariat to remove the electronic and paper 
copies of any party correspondence from the official record of a dispute.16 However, 
even assuming for the sake of argument that there may be circumstances in which a 
panel would have the authority to exclude a document from the record in the manner 
suggested by Thailand, there is no requirement in WTO dispute settlement practice that 
a panel  rule that a document be removed from "the record " of a panel proceeding as a 
pre-condition for the panel excluding the contents of a document submitted to a panel 
                                                
16 (footnote original ) Indeed, in the event that either party were to appeal the manner in which the 
Panel has disposed of Thailand's request, deleting the Philippines' letter of 24 September 2018 from the official 
record of the dispute would arguably violate the parties' due process rights insofar as it would hinder the 
Appellate Body's ability to meaningfully review whether the Panel committed any error of law or legal 
interpretation.   
 WT/DS371/RW2  
 
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  from its consideration of the matter before it. As one panel has recently observed, "the 
mere fact that exhibits submitted by parties may form part of the panel record in no 
way implies any judgment by the Panel on the relevance, accuracy or value of their 
contents to the issues before the Panel ".17  
1.26.   In its opening oral statement at the substantiv e meeting with the parties, Thailand expressed  
its dissatisfaction with the Panel 's response.  Specifically, Thailand stated that it had "due process 
concerns " with the Panel 's response to the Philippines ' actions, which in Thailand 's view "failed (i) to 
state that the Parties are expected to follow the Working Procedures; (ii) to recognize that the 
Philippines did not do so in this respect; and (iii) to take any steps to correct the Philippines ' 
failure ".18 Thailand did not make any further request to the Panel , on this issue  and the Panel did 
not consider that there was any further issue to resolve in this connection .  
1.4.3.2   The Philippines ' DSU Article 13 request of 19 October 2018   
1.27.   On 19 October 2018, the Philippines submitted a request for the Panel to exerci se its authority 
under Article 13 of the DSU. The Philippines explains that its request was prompted by two factors. 
First, the Philippines had become aware of an official statement from the Indonesian government 
relating to Thailand 's request for CK -21A i nformation, in which the Indonesian government stated 
that it had been unable to provide, amongst others, PM Indonesia 's the CK -21A information for the 
period 1999 -2003. Second, the Philippines considered anomalous certain features of the "sample 
calculati on" provided in Exhibit THA -74, which was submitted by Thailand with its responses to the 
Panel 's questions on 8 October 2018. In its request of  19 October 2018, the Philippines requested 
that the Panel seek, in advance of the meeting with the parties scheduled for 29 October 2018, the 
following information from Thailand:  
a. Copies of PM Indonesia 's CK-8 or CK -21A information from the period 2001 -2003 for 
Marlboro and L&M brands obt ained from the Government of Indonesia, if any, and copies 
of communications from the Government of Indonesia, in which the CK -8 or CK -21A 
information was provided to Thailand;  
b. Copies of the "cigarette cost structure of PT Philip Morris Indonesia obtained  from the 
Indonesian government " referenced in Thailand 's first written submission, if that 
information is different from the information identified above, together with copies of 
communications from the Government of Indonesia in which this information  was provided 
to Thailand; and  
c. Copies of the evidentiary basis for Thailand 's "sample calculation " provided in Exhibit THA -
74.  
1.28.   On 22 October 2018, the Panel invite d Thailand to respond to the Philippines ' request in 
advance of the substantive meeting if Thailand so wished, but noted that Thailand was not required 
to do so in view of the limited timeframe. The Panel indicated that both parties would have the 
opportunity to address the issues raised by the Philippines ' request at the meeting, when deliverin g 
their opening statements, when asking or responding to associated questions to one another, and/or 
when responding to any associated oral questions from the Panel. The Panel indicated that it would 
rule on the Philippines ' request at or following the mee ting with the parties, once it was satisfied 
that both parties have had a full and meaningful opportunity to express their views.   
1.29.   At the substantive meeting, Thailand indicated that it would be willing to provide all the 
requested information to the Phili ppines and to the Panel, on the  condition that the Panel adopt  
special procedures to protect the confidentiality of the information. At the end of the meeting, the 
parties indicated that they would aim to resolve the issue bilaterally through agreed proced ures by 
1 November 2018.  The parties informed the Panel in writing , on 1 November, that they had consulted 
bilaterally and expressed that, regrettably, they had not been able to reach agreement. Each party 
proposed a different set of confidentiality procedures for the Panel 's consideration, along with their 
respective explanations of and argumentation on their points of disagreement.  
                                                
17 (footnote original ) Panel Report, Russia – Railway Equipment , para. 7.210.  
18 Thailand's opening statement at the meeting of the Panel, para. 2.2.  WT/DS371/RW2  
 
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  1.30.   On 2 November 2018, the Panel informed the parties of its decision to decline the Philippines ' 
request  that the Panel exercise its authority pursuant to Article 13 of the DSU to seek the further 
information identified by the Philippines regarding the CK -21A forms , and that the Panel  therefore 
consider ed it unnecessary to mediate the parties ' disagreement o n the scope of any ancillary 
confidentiality procedures.  The Panel 's communication indicated that it would elaborate on the 
reasons in the Report, but explained that : 
… Article 13 of the DSU is entitled "Right to Seek Information ". Article  13.1 states that  
"[a] Member should respond promptly and fully to any request by a panel for such 
information as the panel considers necessary and appropriate. " The text of Article 13.1 
refers to information that is "necessary ", and several panels have declined to exercise 
their authority under Article 13 to request information that, while potentially relevant, 
did not appear "necessary " for the Panel to make an objective assessment of the matter 
before it.19 
Having carefully considered the Philippines ' request, and the views of  both parties, the 
Panel does not consider that access to the information referred to by the Philippines is 
necessary for the Panel to make an objective assessment of the matter before it. In this 
regard, the Panel notes that the Philippines ' claims under the CVA are premised on the 
understanding that the Thai authorities relied on the pricing/cost information reported 
by PM Indonesia in the CK -21A forms to determine the "actual price " in the [2002-2003] 
Charges and the "actual value " in the 1,052 revised N oAs, and that Thailand has 
repeatedly represented to the Panel that this understanding is correct. The Panel further 
notes the Philippines confirmation at the hearing, reiterated in its communication to the 
Panel dated 1 November 2018, that the information  it identifies would serve to 
substantiate assertions that Thailand  has made, but that the information is not 
necessary for the Philippines to make its own prima facie  case. 
1.4.4   Thailand 's objection concerning  the Panel 's terms of reference  
1.31.   In its opening sta tement at th e meeting of the Pane l on 29 October 2018 , the P hilippines 
stated that the Charges and the 1,052 revised NoAs are inconsistent with  Articles 1.1, 1.2(a), 6 and 
7 of the CVA. Thailand reacted to the Philippines ' opening statement by  objecting  to the reference  
to a claim of inconsistency under Article 7. Thailand stated that it was too late for the Philippines to 
raise a claim under Article 7, and that in any event the vague reference to Article 7 in the panel 
request does not meet the minimum requirements of Article 6.2 of the DSU. At the meeting, t he 
Philippines expressed i ts disagreement on both points and added that it had already raised this claim 
in its earlier submissions, and indicated that if Thailand wish ed to raise this objection it should 
provide its views in writing.  
1.32.   On 2 November 2018, Thailand filed a communication regarding the scope of the claims 
advanced by the Philippines. In this commun ication, Thailand elaborated on its argument that no 
claim un der Article 7 had been presented in a timely manner, and was in any event not specified in 
the panel request as required by Article 6.2 of the DSU. The Panel invited the Philippines to submit 
its response on 22 November 2018, along with its written respons es to the post -hearing questions, 
and afforded each party the opportunity to submit a second round of comments after that. Thailand 
did not request that the Pa nel rule on this issue before the issuance of the Report.  
1.33.   In its comments on the draft descripti ve part, Thailand requested that the Panel reflect that 
no claim under Article 7 appeared in the concluding paragraphs of the Philippines' first and second 
written submissions where it made its request for legal findings.20 In its comments on the draft 
descriptive part, the Philippines requested that the Panel reflect that it has made a second alternative 
claim under Article 7.1, namely that " Thailand violated Article 7 by determining the customs value 
under Article 7 without having followed, in a sequential  manner, the hierarchy of methods provided 
for in the CVA".21 In their subsequent comments, both parties objected to one another's requests.  
                                                
19 (footnote original ) See e.g. Panel Reports, EC – Seal Products , para. 7.79. See also Panel Report , 
US-– Large Civil Aircraft (2nd complaint) , para. 7.23, and Panel Report, Australia – Tobacco Pla in Packaging 
(Cuba) , para. 1.75.  
20 Thailand's comments on the draft descriptive part, paras. 2.5 -2.6. 
21 Philippines' comments on the draft descriptive part, para. 15. WT/DS371/RW2  
 
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  1.34.   The Panel addresses these terms of reference issues below in Section 7.1.3.3 (The Philippines' 
alternative claims un der Article 7.1 of the CVA) . 
2  FACTUAL ASPECTS  
2.1  Introduction  
2.1.  This section identifies the entities  whose actions are at issue in this dispute , including the 
foreign and domestic companies involved in the Thai cigarette market, and relevant Thai government 
agencies. It then broadly identifies the measures at issue  in this d ispute. A  more detailed assessment 
of the facts, including the background and content  of the challenged measures, will be provided in 
the context of the Findings in Section 7 of this Report.  
2.2  PMTL and the relevant Thai government agencies  
2.2.  PMTL operates in Thailand as a branch of fice of a US corporation.22 PMTL is the exclusive 
importer of Philip  Morris cigarettes in Thailand,  including the Marlboro  and L&M brands, which PMTL 
distributes to wholesalers and retailers.23 PMTL currently imports virtually all of its cigarettes from a 
related supplier based in the Philippines, referred to as Philip Morris Philippines Manufacturing Inc. 
(PMPMI ).24 PMTL previously imported cigarettes from a related supplier based in Indonesia, i.e. PM 
Indonesia . The two sets of measures at issue in this proc eeding concern imports that took place in 
the period  2001-2003 d uring which  PMTL imported its cigarettes from PM Indonesia .25  
2.3.  The Thai Customs Department, which is part of Thailand 's Ministry of Finance, is the agency 
authorized under Thai law to determine  the value of goods for customs purposes.26 The BoA , an 
authority within the Customs Department, hears appeals from importers or exporters in relation to 
initial customs valuation decisions by the Customs Department.27 
2.4.  As discussed in the first recourse to Article 21.5, i n the Thai  cigarette  market, PMTL competes 
with an entity formerly known as the Thail and Tobacco Monopoly (TTM), known now as the Tobacco 
Authority of Thailand.28 TTM, which in and of itself is not a relevant agency for purposes o f the 
measures and claims in this second recourse to Article 21.5,  is owned and operated by Thailand 's 
Ministry of Finance , the same  agency authorized under Thai law to determine the value of goods for 
customs purposes. TTM enjoys a monopoly over the produ ction of cigarettes in Thailand, and is the 
dominant force in the Thai cigarette market. As TTM explains in a 2017 position paper, it "has 
maintained its market share of 79% over all other competitors (which a re foreign cigarette 
companies) ".29  
2.5.  The DSI and the Thai Public Prosecutor are different agencies within the central government 
with responsibilities relating to the investigation and prosecution of criminal offences.30 Their 
respective mandates extend to the investigation and prosecution of criminal of fences under 
Section  27 of the Thai Customs Act, which criminalizes acts "to avoid or attempt to avoid the 
payment … of any duties … with the intention to defraud the government tax of His Majesty the King 
which must be paid for such goods ".31 The DSI , which is a unit within the Ministry of Justice , assumes 
                                                
22 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 2.2; Philippines' 
first written submission, footnote 1.  
23 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 2.2; Philippines' 
first written submission, footnote 1.  
24 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 2.2; Philippines' 
first written submission, footnote 1.  
25 Philippines' first written submission, para. 10.  
26 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 2.4.  
27 Panel Report, Thailand  – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 2.4.  
28 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 2.3; Philippines' 
first written submission, para. 3.   
29 TTM Position Paper, 16 November 2017 (English translation), (Exhibit PHL -241-B), p. 3.  
30 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 2.5.  
31 Panel Rep ort, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 2.5.  
 WT/DS371/RW2  
 
- 26 - 
 
  the investigative function32, and the Public Prosecutor is responsible for the prosecution of criminal 
offences.33  
2.3  The measures challenged in this proceeding  
2.6.  The measures at issue in this second compliance  panel proceeding , which were issued after the 
establishment and  composition o f the Panel in the first recourse to Article 21.5,  are the following:  
a. the Charges filed by the Public Prosecutor against PMTL and one of its former employees 
on 26 January 2017, in respect of 780 entries of cigarettes imported in 2002 -2003, 
including:  
i. various substantive aspects of the customs va luation determination allegedly reflected 
in the C harges; and  
ii. a procedural aspect  relating to the Charges , specifically  the Public Prosecutor 's alleged 
failure to communicate to PMTL , before  the issuance of the Charges , its grounds for 
considering that the relationship between the buyer and seller influenced the price and 
provide an opportunity to PMTL to respond to those grou nds. 
b. the 1,052 revised NoAs  that PMTL received in November 2017 from Thailand 's Customs 
Department, rejecting PMTL 's declared transaction values, and determining revised 
customs values, for 1,052  entries  of cigarettes imported over the period 2001 -2003, 
including : 
i. various substantive aspects of the customs valuation determination reflected in the 
revised NoAs; and 
ii. various procedural aspects relating to the revised NoAs, including the Customs 
Department 's alleged failure to communicate to PMTL , before  the issuance of the 
revised NoAs,  its grounds for considering that the relationship between the buyer and 
seller influenced the price and provide an opportunity to PMTL to respond to those 
grounds, and the Customs Department 's alleged failure  to provide , after issuance of 
the revised NoAs,  a sufficient  explanation to PMTL, in writing, as to how t he customs 
value was determined.  
2.7.  While the  2002-2003 Charges and the 1,052 revised NoAs  rest on the same asserted basis 
(i.e. pricing and cost information said to be reported by PM Indonesia to Indonesian tax authorities 
in the CK -21A form), they  are distinct measures , issued by differen t organs and on different dates. 
The Charges were filed by the Public Prosecutor  in January 20 17, while the NoAs were issued by the 
Customs Department in November 2017 . Of the 780 entries covered by the Charges, 779 are also 
subject to the revised NoAs, but the revised NoAs cover 273 additional  entries  not subject to the 
Charges .  
3  PARTIES ' REQUESTS  FOR FINDINGS AND RE COMMENDATIONS  
3.1.  The Philippines requests the Panel to find as follows:  
a. the "actual price " in the  2002-2003 Charges and the  "actual value " in the 1,052 revised 
NoAs reflect the Thai authorities ' rejection of PMTL 's transaction values and t heir 
determination of revised customs values allegedly based on the information reported by 
PM Indonesia to Indonesian tax authorities in excise tax form CK -21A, and this violates  
the following provisions of the CVA : 
i. Article 1.1 and the substantive obligation in Ar ticle 1.2(a), second sentence, because 
the Thai authorities ' rejection of PMTL 's transaction values based on the information 
                                                
32 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 2.5.  
33 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 2.5.  WT/DS371/RW2  
 
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  in the CK -21A form s constitutes a failure to conduct a proper examination of  the 
circumstances surround ing the sale ; 
ii. Article 1.1 and the procedural obligation in Article 1.2(a), third sentence, because the 
Thai authorities failed to communicate to PMTL the  grounds for considering that its 
relationship to PM Indonesia influenced its transaction values, and c onsequently failed 
to give PMTL an opportunity to respond to those grounds;  
iii. Articles 2 to 634, because after rejecting PMTL 's transaction values the Thai authorities 
proceeded to determine revised customs value s based on Article 6, without following, 
in a s equential manner, the hierarchy of methods for valuation provided for in the 
CVA;  
iv. Article 6.1 by determining revised customs values inconsistently with the requirements 
of that provision;  
v. alternatively, insofar as the Thai authorities used the customs val uation method in 
Article 7 to determine the value of PMTL 's goods, as opposed to determining a revised 
customs value on the basis of Article 6, the 2002-2003 Charges and the 1,052 revised 
NoAs are inconsistent with Article 7 .135; 
b. regarding the 1,052 revised  NoAs specifically , the Customs Department violated the 
procedural obligation in Article 16 by failing to provide an adequate explanation of how 
the customs value was determined following a written request by PMTL.  
3.2.  Thailand requests the Panel to  reject al l the Philippines ' claims, on the basis that : 
a. the Philippines ' alternative claim under Article 7.1 of the CVA is not properly before the 
Panel because this claim  was not raised  in a timely manner  or adequately specified in the 
panel request ; 
b. the Panel should not assess the merits of the Philippines 's claims regarding the 2002-2003 
Charges, because:  
i. there is insufficient information  concerning the se Charges to allow the Philippines to 
make a prima facie case by identifying the precise content of that mea sure;  
ii. the CVA is not applicable to the se Charges because the Public Prosecutor is not part of 
Thailand 's "customs administration ", and because t he Charges allege "customs fraud " 
and do not determine "the value of goods " and are not "for the purpose of lev ying 
ad valorem  duties of customs " in the sense of Article 15.1(a) of the CVA ;  
c. even if the CVA is applicable to the 2002-2003 Charges, there is no inconsistency with the 
CVA obligations at issue because:  
i. the Public Prosecutor did not violate Article 1.2(a) , second sentence, by rejecting 
PMTL's declared transaction values based on the information said to be reported by 
PM Indonesia to Indonesian tax authorities in excise tax form CK -21A; 
ii. the Public Prosecut or was not subject to the procedural obligation in Article 1.2(a), 
third sentence, and in any event the Thai authorities did sufficiently communicate to 
PMTL the  grounds for considering that its relationship to PM Indonesia influenced its 
transaction value s, and gave PMTL an opportunity to respond to those grounds;   
                                                
34 The Philippines states that "[i]f Thailand applied Article 7, it further violated the sequential ordering 
obligations by skipping the methodology in Article 6, without explanation". (Philippines' response to Panel 
question No. 157, para. 265. ) As noted above, in its comments on the draft descriptive part, the Philippines 
requested that this additional, alternative claim be reflected here. Thailand objected. The Panel addresses this 
issue in paragraph 7.53.  
35 The Panel recalls that, as indicate d above, the Philippines' additional alternative claim under 
Article  7.1 is the subject of an objection by Thailand.  WT/DS371/RW2  
 
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  iii. the circumstances of the present case are such that none of the alternative methods 
in Articles 2 , 3 or 5 could be used to determine revised customs value s for PMTL 's 
imports ;  
iv. the Public Prosec utor applied the computed value method to determine revised 
customs values with "a reasonable flexibility " as permi tted under Article 7 of the CVA;  
d. even if  the Panel were to find that the Charges fall within the scope of , and are inconsistent 
with, the pro visions of the CVA , they are justified under the  general exceptions of 
Articles  XX(d) and XX(a) of the GATT 1994;  
e. the 1,052  revised NoAs were withdrawn before the Panel was established, and therefore 
the Panel should decline to rule on them ; 
f. if the Panel elects to  rule on some or all of the 1,052 revised NoAs, then :  
i. Thailand 's arguments in respect of the CVA-consistency of the Charges apply mutatis 
mutandis  to the Philippi nes' corresponding claims regarding the  NoAs; and  
ii. the Philippines has failed to demonstrate that Thailand has acted inconsistently with  
Article 16 because , following the request by PMTL, the Thai Customs Department 
sufficiently explained t he grounds for issui ng the NoAs.  
4  ARGUMENTS OF THE PAR TIES  
4.1.  The arguments of the parties are reflected in their executive summaries, provided to the Panel 
in accordance with paragraph  31 of the Working Procedures adopted by the Pan el (see Annexes B -1 
and B -2). 
5  ARGUMENTS OF THE THIR D PARTIES  
5.1.  The arguments of the European Union, Indonesia, Japan, and the United States  are reflected 
in their executive summaries, provided in accordance with paragraph 32 of the Working Procedures 
adopted by the Panel (see Annexes C -1, C-2, C-3, and C -4).36 Australia, China, Colombia, India, the 
Russian Federation, and Singapore did not make a written submission or oral statement to the Panel.  
6  INTERIM REVIEW  
6.1.  On 4 March 2019, the Panel issued its Interim Report to the parties. On 18 March 2019 , the 
Philippines and Thailand each submitted written requests for the Panel to review aspects of the 
Interim Report. On 1  April 2019 , each party submitted comments on the other's requests  for review. 
Neither party requested an interim review meeting.  
6.2.  The parties' requests made at the interim review stage as well as the Panel's discussion and 
disposition of those requests are set out in Annex A -2. 
 
                                                
36 Paragraph 32 of the Working Procedures provides that " If a third -party submission and/or oral 
statement does not exceed six pages in tot al, this may serve as the executive summary of that third party's 
arguments." Indonesia submitted a third -party submission of less than six pages, and this also serves as the 
executive summary of its arguments.   
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  7  FINDINGS  
7.1  Initial considerations  
7.1.1   Introducti on  
7.1.  The Philippines ' complaint in this proceeding, initiated under Article 21.5 of the DSU, concerns 
the alleged failure by Thailand to comply with the DSB 's recommendations and rulings in the original 
proceeding in Thailand – Customs and Fiscal Measures o n Cigarettes from the Philippines  (DS371) .37  
7.2.  In Sectio n 1 above, the Panel recalled the  findings of the Panel in the first recourse to 
Article  21.5 of the DSU, recapitulated the procedural requests and rulings that arose  during  the 
present  proceeding, and set out  the two sets of measures challenged by the Philippines  in this 
proceeding. In Section  2 above , the Panel  identified the relevant governmental and corporate 
entities implicated by the measures, and in Section 3 the Panel  set forth the parties ' requests for 
findings in relation to those measures.  
7.3.  Before turning to its analysis of the measures at issue in this  second recourse to Article 21.5, 
the Panel will begin by recalling the observations made in the Report in the first recourse to 
Article  21.5 regarding the general principles of interpretation and standard of review applicable to 
the CVA, and supplement th at discussion to explain how it takes that Report into account in its 
analysis of the issues in this second recourse to Article 21.5. These are foundational issues, as the y 
inform the Panel 's approach to many of the other issues raised in this proceeding, including for 
example its approach to the question of whether there is a sufficiently close nexus between the 
measures at issue in this dispute and the DSB 's recommendations and rulings.  
7.4.  After setting out this general framework for its analysis, the Panel  will then  proceed to  address 
four issues relating to jurisdiction and admissibility , namely : (1) whether the 2002 -2003 Charges 
and 1,052 revised NoAs have a sufficiently close nexus to the DSB 's recommendations and rulings  
to fall within the scope  of this Article 21.5 compliance proceeding ; (2) the relevance of Thailand 's 
assertions of "illegal acts " allegedly committed by PM Indonesia to the admissibility of the Philippines ' 
claims; ( 3) whether the Philippines ' alternative  claim s of inconsistency under Article 7.1 of the CVA  
were adequately identified in the Panel request , and raised in a timely manner  during the proceeding ; 
and (4 ) the Philippines ' standing to challenge measures that exclusively concern PMTL 's imports 
from another WTO Member, i.e. Indonesia. Each of these issues relate s in one way or another to 
jurisdiction or admissibility, and as such are threshold issues that are appropriately addressed before 
turning to the merits of the case.  
7.5.  The Panel will then addre ss the relevance of the presumption of good faith on the part of 
Thailand and its authorities in relation to two issues : (1) the Philippines ' doubts as to the veracity  of 
Thailand 's representations that its authorities calculated the actual price/value of PMTL's imports 
based on the pricing and cost information reported by PM Indonesia in the CK -21A form; and ( 2) 
the interpretation of CVA obligations. The first issue is fundamental, given that the basic predicate 
of most of the Philippines ' claims, many of Thailand 's substantive defences, and much of the Panel 's 
own analysis is that Thai authorities had access to and relied on the pricing and cost information 
reported by the producer and seller of the cigarettes at issue, PM  Indonesia, to In donesian tax 
authorities in the CK -21A form. The second issue is also horizontal in nature, and relates back to the 
general principles of interpretation and standard of review applicable to the CVA . Thus, these issues 
are also  properly  addressed up front.  
7.1.2   General framework for the Panel 's analysis  
7.1.2.1   General p rinciples of interpretation and standard of review  
7.6.  In its Report in the first recourse to Article 21.5, the Panel stated that it remained "ever mindful 
of the function and institutional role of a compliance panel under Article  21.5 of the DSU ", and 
                                                
37 See Panel Report, Thailand –Cigarettes (Philippines) , WT/DS371/R , adopted 15 July 2011, as modified 
by Appellate Body Report WT/DS371/AB/R ; and Appellate Body Report, Thailand – Cigarettes (Philippines) , 
WT/DS371/AB/R , adopted 15 July 2011.  
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  therefore consider ed that "the starting point for our inte rpretation of the terms of the CVA are the 
findings of the panel and the Appellate Body that were made in the original proceeding, and which 
were adopted by the DSB in the context of the ordinary dispute settlement process ".38 The Panel 
stated that it agree d with the parties a nd third parties that it was not , strictly speaking, "bound " to 
follow the legal interp retations of the original panel; however, the Panel stated that it also shared  
the view that, "in the interests of ensuring security and predictabili ty in dispute settlement and the 
finality of the DSB 's recommendations and rulings, there is an expectation that, absent compelling 
reasons, compliance panels will make findings consistent with those made by the original panel in 
the same dispute ".39 The Panel recalled the Appellate Body 's statement that "doubts could arise 
about the objective nature of an Article  21.5 panel 's assessment if, on a specific issue, that panel 
were to deviate from the reasoning in the original panel report in the absence o f any change in the 
underlying evidence in the record and explanations given ".40  
7.7.  The Panel then noted that it was  presented with a number of interpretative issues that the 
original panel was not required to resolve.41 It recalled that Article 3.2 of the DSU  states that the 
WTO dispute settlement system serves to "clarify the existing provisions of those agreements in 
accordance with customary rules of interpretation of public international law ", and confirmed that 
the "customary rules of interpretation of pu blic international law " referred to by the DSU include 
Articles 31, 32 and 33 of the Vienna Convention on the Law of Treaties (the Vienna Convention). 
The Panel noted that Article 31(1) of the Vienna Convention provides that "[a] treaty shall be 
interprete d in good faith in accordance with the ordinary meaning to be given to the terms of the 
treaty in their context and in the light of its object and purpose ".42  
7.8.  The Panel then observed that w here the terms of the CVA are generally -worded and do not 
prescribe  any particular means or methodology that must be followed in discharging a substantive 
and procedural obligation contained therein, it would  proceed on the understanding that the 
domestic customs authorities involved in customs valuation "enjoy a margin o f discretion regarding 
the means or methodology that they choose to follow, within the parameters laid down in the 
applicable treaty provisions, read in their context and in the light of the object and purpose of the 
CVA".43 The Panel observed that this  understanding "derives from the manner in which the Appellate 
Body and previous panels have approached generally -worded obligations that do not prescribe a 
particular means or methodology for conducting the analysis, or making the determinations provided 
for in the WTO agreement in question ".44 The Panel also noted that the Philippines accepted  that the 
CVA "does not prescribe a specific process for customs authorities to follow " when conducting an 
examination of the circumstances of sale and that, as a consequ ence, the customs authority "has a 
degree of discretion in deciding how to conduct its examination ".45 
7.9.  The Panel noted that Article  14 of the CVA provides that the interpretative notes in Annex I to 
the CVA "form an integral part " of the CVA, and that the provisions of the CVA are "to be read and 
applied in conjunction with " those notes. It recalled the original panel 's view that although 
commentaries by the Technical Committee on Customs Valuation are "not legally binding upon the  
parties", they may be "instructive and can provide guidance on the interpretation of the Customs 
Valuation Agreement, especially since it is the WTO Members that make up the Technical 
Committee ".46  
7.10.   The Panel  also referred to the Decision of the Committee on Customs Valuation Regarding 
Cases Where Customs Administrations Have Reasons to Doubt the Truth or Accuracy of the Declared 
Value (the Decision)47, and recalled that the original panel found guidance in the Decision to confirm 
                                                
38 Panel Report, Thailand – Cigarettes (Phi lippines)  (Article 21.5 – Philippines) , para. 7.80.  
39 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.80.  
40 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 103.  
41 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.81.  
42 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.81.  
43 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.82.  
44 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.82.  
45 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.82.  
46 Panel Report, Thailand – Cigarettes ( Philippines)  (Article 21.5 – Philippines) , para. 7.83 (referring to 
Panel Report, Thailand – Cigarettes (Philippines) , footnote 650).  
47 See Committee on Customs Valuation, Decision Regarding Cases Where Customs Administrations 
Have Reasons to Doubt the Tru th or Accuracy of the Declared Value, G/VAL/1, 27 April 1995, and Minutes of 
the Committee Meeting of 12 May 1995, G/VAL/M/1, 11 August 1995. The Decision was adopted pursuant to 
 WT/DS371/RW2  
 
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  its understanding of certai n CVA obligations.48 Furthermore, the Panel observed that the parties 
were of the view that the Decision is, or could potentially qualify as, a "subsequent agreement 
between the parties regarding the interpretation of the treaty or the application of its pr ovisions " 
within the meaning of Article 31(3)(a) of the Vienna Convention.49  
7.11.   With respect to the standard of review , the Panel noted the absence of any disagreement that 
Article 11 of the DSU sets forth the standard of review in respect of both the GATT 19 94 and the 
CVA (the two agreements invoked by th e Philippines in the first recourse to Article 21.5 ).50 The Panel 
recalled that, u nder Article 11, a panel 's mandate is to "make an objective assessment of the matter 
before it, including an objective assessment of the facts of the case and the applicability of and 
conformity with the relevant covered agreements, and make such other findings as will assist the 
DSB in making the recommendations or in giving the rulings provided for in the covered 
agreeme nts". 
7.12.   The Panel recalled t he original panel 's explanation  that the standard of review under the CVA 
requires a panel to "critically  examine a domestic authority 's explanation 'in depth, and in the light 
of the facts before the panel '"51, and its reliance on  the Appellate Body 's statement that an "objective 
assessment under Article 11 of the DSU must be understood in the light of the obligations of the 
particular covered agreement at issue in order to derive the more specific contours of the appropriate 
stand ard of review. "52 The Panel also recalled the original panel 's statement that it would there fore 
make an objective assessment of the matter "in light of the relevant obligations " invoked.53 The 
Panel recalls that it conducted a more detailed analysis of cert ain aspects of its standard of review 
when assessing the BoA's examination of the circumstances of sale under Articles 1.1 and 1.2(a) of 
the CVA.54 
7.1.2.2   Reliance on the Report in the Philippines ' first recourse to Article 21.5.  
7.13.   There is a degree of overlap betw een the issues raised in this proceeding and the issues 
already addressed by the Panel in the first recourse to Article 21.5. This overlap is a consequence of 
certain similarities between the challenged measures, the Philippines ' claims, and Thailand 's 
defences. Like the 2003 -2006 Charges at issue in the Philippines ' first recourse to Article 21.5, it 
was the Public Prosecutor that filed the 2002 -2003 Charges , following an investigation and 
recommendation by the DSI ; and like the 2003 -2006 Charges, the  2002-2003 Charges  allege that 
PMTL violated Section 27 of the Thai Customs Act by declaring a "false price " for Marlboro  and L&M 
cigarettes contr ary to the "actual price ", with the intention to defraud the government of taxes and 
customs duties. The Phili ppines claims, a s it did in respect of the 2003 -2006 Charges,  that the Pubic 
Prosecutor has again violated Articles 1.1 and 1.2(a) of the CVA by rejecting PMTL 's transaction 
values without a valid basis, and that its determination of the "actual price " again violates the 
applicable valuation rules in Articles 2 through 7 of the CVA.  In response, Thailand presents an 
argument that resembles the "ripeness " argument  that it raised in the first recourse to Article 21.5  
regarding the 2003 -2006 Charges , and once again argues that in any event the CVA does not apply 
to the Charges , and that any inconsistency with the CVA is justified under the general exceptions of 
Articles XX(d) and (a) of the GATT 1994.  
7.14.   Despite the similarity of some of the issues raised in the Philippines ' first and second recourse 
to Article 21.5, there are also some obvious and important  differences between the relevant 
measures, the Philippines ' claims, and Thailand 's defences. First, the two sets of Charges rest on 
                                                
the invitation in the Ministerial  Decision Regarding Cases Where Customs Admi nistrations Have Reasons to 
Doubt the Truth or Accuracy of the Declared Value (the Ministerial Decision).  
48 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.84 (referring to 
Panel Report, Thailand – Cigarettes (Phili ppines) , para. 7.172, footnotes 564 and 582).  
49 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.84.  
50 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.85.  
51 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.86 (referring to 
Panel Report, Thailand – Cigarettes (Philippines) , para. 7.104, in turn quoting Appellate Body Report, 
US - Lamb , para. 106).  
52 Panel Report, Thailand – Cigarettes (Phil ippines) , para. 7.71 (quoting Appellate Body Report, 
US - Countervailing Duty Investigation on DRAMS , para. 184).  
53 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.72.  
54 Panel Report, Thailand – Cigarettes (Philippines) (Article 21.5 – Philippines) , paras. 7.108 -7.121. See 
also paragraphs 7.146 -7.147.  
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  differen t factual bases: whereas the 2003 -2006 Charges at issue in the first recourse to Article 21.5 
compared PMTL 's declared transacti on values with  the prices of King P ower, a Thai duty -free 
operator55, the 2002-2003 Charges at issue in this proceeding allegedly compare PMTL's decla red 
transaction values with a value constructed on the basis of certain pricing and cost information that 
PM Indonesia reported  to the Indonesian excise tax authorities in a n administrative form known as 
form CK -21A.56 Second, and partly as a consequence of the fact that these two different comparisons 
reflect two differe nt methods of customs valuation which imp licate different valuation rules in Articles 
2 to 7, the Philippines pursues different substantive and procedural legal claims. Third, Thailand 's 
central argument in response  to the merits of the Philippines ' claims – which is that its authorities 
were ent itled to assume that the pricing and cost information provided to it by the authorities of the 
exporting Member (in this case, Indonesia) was accurate and reliable – also raises a novel defence .  
7.15.   Given these differences , the Panel considers that it is self -evident that its  findings in the first 
recourse to Article 21.5 concerning the 2003 -2006 Charges cannot simply be transposed to the 
2002-2003 Charges at issue in this proceeding , insofar as some of the relevant facts and/or legal 
claims are different .57 Thailand has stressed  this point, stating that "while the issues in the two 
Article 21.5 proceedings may be similar, they are by no means identical, especially with respect to 
the facts " and that it "would be incorrect, therefore, to conclude t hat the Philippines has made a 
prima facie  case only because the issues addressed in these Article 21.5 proceedings are similar to 
those in the first Article 21.5 proceedings ".58 The Philippines does not appear to have suggested 
otherwise; to the contrary, a significant portion of the Philippines ' first written submission is devoted 
to a discussion of the factual circumstances specific to the 2002 -2003 Charges, and as noted above 
it claims that the Public Prosecutor 's determinations of revised customs values  in the two sets of 
Charges raise two different sets of issues that are governed by two different sets of valuation rules 
in Articles 2 to 7 of the CVA.  
7.16.   Having said this , and bearing in mind that the Panel  is not strictly bound by any legal findings 
and reasoning contained in its Report in the first recourse to Article 21.5, there is  nothing in the DSU 
that would require this Panel to treat all the legal and interpretative issues raised in this second 
recourse to Article 21.5 as matters of first impression. Article 11 of the DSU mandates the Panel to 
make an "objective assessment of the matter ". The notion of objectivity e mbraces considerations of 
consistency and coherence.59 The Panel's  findings and legal interpretations in the first recourse to 
Article 21.5 already carefully took into account and addressed all of the legal arguments presented 
to it by the parties and third  parties in the context of the first recourse to Article 21.5.  It would 
arguably be capricious, not objective, for the Panel to be swayed to change its earlier legal findings 
and reasoning on the basis of the same arguments that it found unpersuasive in th e first recourse 
to Article 21.5, considering that this second recourse to Article 21.5 is part of the same dispute as 
the first recourse to Article 21.5, is between the same disputing parties, and is being adjudicated by 
a compliance panel composed of the  same individuals . Accordingly, in the light of Article 11 of the 
DSU the Panel  consider s that it has  a duty to re -examine any earlier findings and reasoning only in 
the light of any new arguments presented by the parties or third parties in this second re course to 
Article 21.5 . 
7.17.   In response to a question from the Panel, the Philippines agrees that i nsofar as issues of law 
or legal interpretation arise in this second recourse to Article 21.5 that are the same issues of law 
or legal interpretation that were a lready ruled on by the Panel in the first recourse to Article 21.5 , 
and except and insofar as a party develops novel legal arguments that were not addressed in the 
findings and reasoning of the Panel Report in the first recourse to Article 21.5 or identifies one or 
more distinguishing factual circumstances relating to the measures at issue , the Panel could 
incorporate by reference (and would not be required to restate) the relevant findings and reasoning 
                                                
55 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.653 -7.656.  
56 In addition to these differences, the two sets of Charges relate to imports over two different time 
periods (i.e. 2003 -2006 and 2002 -2003), and they also involved two different sellers (i.e. the Philip Morris 
subsidiary located in the Philippines over the 2003 -2006 period, and PM Indonesia over the 2002 -2003 period).  
57 As the European Unio n puts it, "such incorporation will only suffice if the legal issues at stake are 
comparable and the factual basis for the conclusions is sufficiently similar". (European Union's response to 
Panel question No. 10 to third parties, para. 4.)  
58 Thailand's fi rst written submission, para. 3.3.  
59 See e.g. Appellate Body Reports, US – Upland Cotton (Article 21.5 – Brazil) , paras. 294 -295; EC and 
certain member States – Large Civil Aircraft , para. 894; and Russia – Commercial Vehicles , paras. 5.81 -5.82. 
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  from the Panel Report in the first recourse t o Article 21.5.60 In response to the same question, 
Thailand ostensibly disagrees, arguing that the Panel "cannot comply with its duty under Article 11 
by merely incorporating by reference the findings and reasoning of the first compliance panel ".61 
However,  Thailand argues that this is so because the parties "have put forth different arguments 
and evidence " in the two proceedings , and it emphasizes that the two cases involve "different 
claims ", "different measures ", and "different facts ".62 The Panel agrees a nd reiterates that it is 
axiomatic that, insofar as the first and second compliance panel proceedings involve different 
arguments and evidence (and different claims, measures and facts), then the Panel 's legal findings 
and reasoning from the former cannot simply be transposed to the latter.  
7.18.   Article 3.2 of the DSU states that the WTO dispute settlement system serves to "clarify the 
existing provisions of those agreements in accordance with customary rules of interpretation of 
public international law ". Insofar as the Panel considered there to be any inconsistency between its 
legal findings and reasoning in the first recourse to Article 21.5 and the terms of the CVA interpreted 
in accordance with customary rules of interpretation, the Panel would have no choi ce but to reject 
its earlier legal findings and reasoning. However, t he legal findings and reasoning of the Panel in the 
first recourse to Article 21.5 already reflect the Panel 's analysis of how the relevant CVA provisions 
are to be interpreted in accorda nce with the customary rules of interpretation reflected in Articles 
31, 32 and 33 of the Vienna Convention. There has been no amendment to the terms of the CVA 
since the Panel finalized its Report. As a consequence, in the absence of any novel legal argum ents 
being put forward by the parties or third parties based on those customary rules of interpretation, 
the Panel remains of the view that the  legal interpretations it developed are presumptively correct 
under those customary rules of interpretation. Acco rdingly, Article 3.2 of the DSU does not require 
the Panel to treat all issues of law and legal interpretation that arise in this proceeding as matters 
of first impression.  
7.19.   The Panel understands that some Members hold to the view that WTO panels should follow 
prior interpretations by default unless there is a reason not to (i.e. t he cogent reasons standard), 
whereas other Members hold to the view that WTO panels should reach their own interpretations 
more independently, and follow prior  interpretations only insofar as they are found to align and be 
assessed as persuasive (i.e. the persuasiveness standard). These different points of view have been 
reflected in the submissions made by the third parties in this proceeding. The fact that thi s Panel 
would be predisposed to consider the findings it made in the first recourse to Article 21.5 as still 
being persuasive , in the absence of novel arguments or circumstances demonstrating otherwise , 
implies no view on the precedential value of other panel and Appellate Body reports more generally.  
It only reflects the Panel's assessment of how Articles 11 and 3.2 of the DSU apply in the 
circumstances of successive proceedings, raising the same or similar legal issues, argued before two 
panels comprised of the same three individuals, in the compliance phase of the same overall WTO 
dispute between the same parties.  
7.20.   Article 12.7 of the DSU provides that the report of a panel "shall set out the findings of fact, 
the applicability of relevant provisions and t he basic rationale behind any findings and 
recommendations that it makes ". If a panel considers that t he legal reasoning set forth in an earlier 
panel or Appellate Body report is persuasive and correct, it i s under no obligation to restate or 
extensively q uote from that analysis  in order to comply with its duty under Article 12.7; i t may 
instead employ the technique of incorporation by reference.63 
                                                
60 Philipp ines' response to Panel question No. 126, para. 1.  
61 Thailand's response to Panel question No. 126, para. 1.7.  
62 Thailand's response to Panel question No. 126, paras. 1.2 -1.4.  
63 In Mexico – Corn Syrup (Article  21.5 – US), the Appellate Body explained th at "a panel's 'basic 
rationale' might be found in reasoning that is set out in other documents, such as in previous panel or 
Appellate Body reports – provided that such reasoning is quoted or, at a minimum, incorporated by reference". 
(Appellate Body Repor t, Mexico – Corn Syrup (Article  21.5 – US), para. 109.) In EU – Footwear (China) , the 
panel was presented with claims and arguments on one of the measures that were largely the same as those 
presented by the same parties on the same issue in EC – Fasteners  (China) , and explained that:  
In these circumstances, we see nothing to be gained, and a potential for confusion, were we to 
state our conclusions and analysis, which were the same as those of the panel in EC – Fasteners 
(China) , in different terms in this report. We have therefore taken the route of adopting that 
panel's analysis and conclusions as our own, with additional reasoning of our own when 
necessary to address arguments not made before that panel. When the same parties present the 
 WT/DS371/RW2  
 
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  7.21.   The Panel sees a potential for confusion if in this second recourse to Art icle 21.5 it were to 
present its analysis and conclusions in terms different from those of the Panel Report in the first 
recourse to Article 21.5, insofar as it is confronted with the same or similar issues raised in the first 
recourse to Article 21.5. The Panel  recall s and fully agree s with the observation made by the 
Philippines, when describing the standard of review under the CVA in the context of the first recourse 
to Article 21.5 , that "the use of the same terminology to describe the same legal requirem ents is 
essential to promoting the objectives of security and predictability ", and that "when different panels 
use different terminology to describe the same requirements, in particular within a single dispute, 
the divergence of terminology undermines those objectives, and creates confu sion".64 The Panel 
therefore consider s that insofar as it i s confronted with a legal issue that was already considered in 
the Panel Report in the first recourse to Article 21.5, and insofar as  it sees no compelling reason to 
deviate from a prior interpretat ion, the Panel  may employ the technique of incorporation by 
reference to avoid repetition and improve the readability of this Report . 
7.22.   As noted above, Thailand ostensibly disagrees and states that  the Panel "cannot comply with 
its duty under Article 11 by merely incorporating by reference the findings and reasoning of the first 
compliance panel ".65 However, it would appear that Thailand 's concerns do not relate per se to the 
formal technique of incorporation by reference, but rather to the prospect of the Pa nel ignoring 
material differences between the measures, claims and defences in the first and second compliance 
proceedings and blindly transposing its findings from the former to the latter. In that vein, Thailand 
observes that the compliance panel in Mexico – Corn Syrup (Article  21.5 – US) "did not merely 
incorporate the reasoning and fi ndings of the original panel ", but instead "cited to parts of the panel 
report discussing the legal relationship betw een the provisions at issue " and "nevertheless still 
examined the anti -dumping redetermination in light of the parties ' arguments with respect to that 
specific measure ".66 Similarly, Thailand points out that in EC – Footwear  (China)  the complaining 
party brought identical claims, in respect of the same measure,  that had already been ruled on in 
EC – Fasteners (China) .67  
7.23.   For greater clarity, the Panel is  not suggesting that these or any other past case would support 
this Panel short-circuiting the analysis required, by blindly transposing its findings on the 2003 -2006 
Charges to the 2002 -2003 Charges without conduct ing a proper assessment of the measures at 
issue in this proceeding. Instead , the Panel refers to these cases above as support for the more 
limited proposition that, if a panel concludes that the analys is of an earlier panel is persuasive and 
correct, and if the panel decides t o adopt the same reasoning, then it is under no obligation to 
restate or extensively quote from that analysis. It may comply with its duty under Article 12.7 of 
the DSU by employin g the techniqu e of incorporation by reference to avoid repetition, and thereby 
improve the readability of the Report. Indeed, the Panel observes that Thailand has employed 
essentially the same technique when incorporating by reference certain sections of its submissions 
from the first recourse to Article 21.5.68  
7.24.   In sum, the Panel takes the legal findings and reasoning by the panel and the Appellate Body 
in the original proceeding, and in the Report of the Panel in the first recourse to Article 21.5, as the 
point of departure for its analysis of the legal issues in this case. Insofar as there are one or more 
factual circumstances relating to the measures at issue in this second recourse to Article 21.5  that 
materially distinguish them from the me asures at issue in the first recourse to Article 21.5, and 
insofar as the legal claims are different, then the Panel cannot simply transpose its findings and 
reasoning from the Report in the first recourse to Article 21.5.  However, i nsofar as issues of law  or 
legal interpretation arise in this second recourse to Article 21.5 that are the same issues of law or 
                                                
same claims and arguments concerning the same measure in two successive disputes, as here, if 
it finds the analysis and conclusions of the first panel persuasive and correct, we see no reason 
for the second panel to restate that analysis and co nclusions. (Panel Report, EU – Footwear 
(China),  para. 6.5.)  
Similarly, the panels in China – Rare Earths stated, in the context of addressing a legal issue that 
had already been addressed by the panel and the Appellate Body in China – Raw Materials , that  they 
saw " nothing that would be gained if we were to reproduce all of the reasoning of the panel and 
Appellate Body in China – Raw Materials in the context of responding to the specific arguments 
presented by China in this dispute". (Panel Reports, China – Rare Earths , para. 7.60.)  
64 Philippines' response to Panel question No. 4, para. 60.  
65 Thailand's response to Panel question No. 126, para. 1.7.  
66 Thailand's response to Panel question No. 126, para. 1.5.  
67 Thailand's response to Panel question No. 12 6, para. 1.4.  
68 See e.g. Thailand's first written submission, para. 3.8.  WT/DS371/RW2  
 
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  legal interpretation that were already ruled on by the Panel in the first recourse to Article 21.5, this 
Panel  may focus its re -examination on any novel legal arguments presented by the parties or third 
parties in the context of this second  recourse to Article 21.5.  If the Panel concludes that the legal 
findings and reasoning of the panel in the first recourse to Article 21.5 remain persuasive and corre ct, 
and decides t o adopt the same reasoning, the Panel considers that it is under no obligation to restate 
or extensively quote from that analysis; it may instead employ the technique of incorporation by 
reference.  
7.1.3   Issues relating to jurisdiction and admis sibility  
7.1.3.1   The nexus between the Charges/NoAs and DSB recommendations and rulings  
7.1.3.1.1   Introduction  
7.25.   Article  21.5 of the DSU provides, in relevant part:  
Where there is disagreement as to the existence or consistency with a covered 
agreement of measures taken to comply  with the recommendations and rulings [of the 
DSB] such dispute shall be decided through recourse to these dispute settlement 
procedures, inc luding wherever possible resort to the original panel.  
7.26.   The Panel  recall s that t he scope of Article 21.5 is not limited to "measures taken to comply " 
that the responding Member identifies as such: the scope of Article 21.5 proceedings extends beyond 
such "declared " measures taken to comply to include other measures that share a sufficiently "close 
nexus " with one or more declared measures taken to comp ly, or with the DSB 's recommendations 
and rulings.69 The Panel further recalls that this assessment is typically based on an assessment of 
"the timing , nature,  and effects  of the various measures ".70 The Panel elaborated further on the 
applicable legal stand ard for the "close nexus " analysis in its Report in the first compliance 
proceeding, and it is not necessary to repeat that discussion here.71  
7.27.   The Philippines has challenged two sets of measures in this second recou rse to Article 21.5, 
namely (1 ) the 2002 -2003 Charges, and ( 2) the 1,052 revised NoAs. Both the Charges and the 
revised NoAs rest on the same basis, namely the DSI 's calculation of the "actual " value of PMTL 's 
imports of cigarettes said to be based on pricin g and cost information reported by PM Indonesia to 
Indonesian tax authorities in excise tax form CK -21A.  
7.28.    It is uncontested that both challenged measures are specifically identified in the Philippines ' 
request for  the establishment of a panel, in accordance wit h the requirements of Article 6.2 of the 
DSU. The Philippines argues that both of these measures share a "close nexus " with the DSB 's 
recommendations and rulings in the or iginal proceedings, and with certain of Thailand 's declared 
measures taken to comply .72 While Thailand submits that the  Panel  "must make an independent 
determination of whether the 2002 -2003 Charges share a close nexus with the DSB 
recommendations and rulings and Thailand 's declared measure taken to comply, rather than simply 
applying the f irst compliance panel 's finding mutatis mutandis "73, it does not dispute that both of 
the measures at issue in this second recourse to Article 21.5 fall within the scope of this Article 21.5 
compliance proceeding as "measures taken to comply ". 
7.29.   The Panel  agrees that it must make an independent determination of whether the 2002 -2003 
Charges share a sufficiently close nexus with the DSB recommendations and rulings and Thailand 's 
declared measure taken to comply. It is well established that a panel is entitled t o consider the issue 
of its jurisdiction on its own initiative, and must satisfy itself of its jurisdiction in any dispute that 
comes before it.74 The Panel will begin by recal ling the reasoning that led it to find that the 2003 -
                                                
69 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.504.  
70 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para . 7.508 (referring to 
Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para. 77 (emphasis added)).  
71 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , Section 7.1.2.1 (The 
scope of Article 21.5 complian ce proceedings) and Section 7.3.3 (Close nexus).  
72 Philippines' first written submission, paras. 126 -151, and 369 -379.  
73 Thailand's response to Panel question No. 127, para. 1.8.  
74 Appellate Body Reports, US – 1916 Act , footnote 30; Mexico – Corn Syrup (Article  21.5 – US), 
para. 36; EC and certain member States – Large Civil Aircraft , para. 791.  WT/DS371/RW2  
 
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  2006 Charges shared a suffic iently close nexus with certain of Thailand 's measures taken to comply, 
and will then examine the relevant connections that exist between the 1,052 revised NoAs and the 
2002-2003 Charges, on the one hand, and the DSB recommendations and rulings and Thailand 's 
declared measure s taken to comply , on the other hand.  
7.1.3.1.2   Findings in the first  recourse to Article 21.5  
7.30.   In the first recourse to Article 21.5, the Panel found that the 2003 -2006 Charges (covering 
272 entries running from July 2003 to June 2006) shared a sufficiently close nexus with t he matters 
covered by the BoA 's Rulin g of 12 Sept ember 2012 (covering 118 entries running from June 2006 
through to September 2007).75 This September 2012 BoA Ruling was one of Thailand 's declared 
measures taken to comply, and it revised an earlier valuation of the entries at issue conducted by 
the Thai C ustoms which had been found to be inconsistent with relevant CVA obligations in the 
original proceeding.  
7.31.   The Panel found, for reasons elaborated in detail in the Report76, that the 2003 -2006 Charges 
and the September 2012 BoA Ruling (and/or the original cu stoms valuation determination that it 
reversed) shared the following set of connections:  
a. both involved the same importer (PMTL);  
b. both involved the same exporter (PM  Philippines Manufacturing Inc. );  
c. both involved the sam e importing country (Thailand);  
d. both involved the same expo rting country (the Philippines);  
e. both involved the same product,  brands and producer ( Marlboro and L&M cigarettes 
produced by PM  Philippines Manufacturing Inc. );  
f. both involved the same transaction values, imported under the same supply contract ;  
g. leaving aside whether the 2003 -2006 Charges constitute a "customs valuation 
determinations " for purposes of the CVA, both measures were related to the valuation of 
goods for purposes of levying ad valorem  duties on PMTL 's imports of Marlboro  and L&M 
cigarettes;  
h. while the measures were taken by different Thai governmental agencies (i.e. the Public 
Prosecutor  and the BoA ), both agencies had potentially overlapping functions in the area 
of customs valuation ; 
i. both measures related to a comparison between  PMTL's declared transaction values and 
King Power 's prices ; and  
j. while the two measures covered two different groups of entries over different time periods, 
these groups of entries immediately preceded/followed each other, such that, taken  
together, they comprised a continuous sequence of all entries over the period July 2003 
to September 2007 . 
7.32.   In addition to these connections relating to the nature  of the measures, the Panel considered 
the timing and effects of the Charges. With regard to timing , the Panel observed that the 2003 -2006 
Charges were issued on 18 January 2016, which post -dated both the expiry of Thailand 's reasonable 
period of time to implement the DSB 's recommendations and rulings (15 May 2012), as well as the 
                                                
75 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , Section 7.3.3 (Close 
nexus).  
76 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , Section 7.3.3.3.2 .3 
(Close nexus > Nature).  
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  adoption by Thai land of the relevant declared measure taken to comply (12 September 2012).77 
Regarding the effect  of the Charges , the Panel concluded that t he 2003-2006 Charges had the 
potential to circumvent Thailand 's compliance with the CVA achieved through th e September 2012 
BoA Ruling, notwithstanding that the Charges had  no legal effect on the September 2012 BoA Ruling 
or the entries subject to that ruling .78  
7.1.3.1.3   The 2002 -2003 Charges and the 1,052 revised NoAs  
7.33.   The 2002 -2003 Charges and the 1,052 revised NoAs at i ssue in this second recourse to Article 
21.5 (hereinafter, for brevity, "the Charges/NoAs at issue ") concern cigarettes that PMTL imported 
from PM Indonesia. Therefore, instead of asking the Panel to find that these measures share a close 
nexus with the Se ptember 2012 BoA Ruling, which concerned PMTL 's imports from PM Philippines 
Manufacturing Inc. (PMPMI), the Philippines seeks to demonstrate their "close nexus " to a BoA Ruling 
that concerned entries that took place over the period when PMTL imported its c igarettes from PM 
Indonesia. This Ruling also covered 206 of the same entries that are covered by the Charges/NoAs 
at issue. Specifically, the Philippines refers to the November 2012 BoA Ruling that was the subject 
of the Panel 's findings in the first reco urse to Article 21.5. The Panel recalls that  the Philippines is 
free to demonstrate the existence of a "close nexus " between the Charges and either the September 
2012 BoA Ruling, or the November 2012 BoA Ruling .79  
7.34.   For purposes of reviewing the connections between the measures at issue in this proceeding 
and the November 2012 BoA Ruling, the Panel recalls that t he 2002 -2003 Charges are a set of 
criminal charges filed by the Public Prosecutor against PMTL and one of its former employees on 
26 January 2017, alleging that PMTL declared a "false price " contrary to the "actual price " in respect 
of 780 shipments of cigarettes imported in 2002 -2003 from PM Indonesia. The Panel recall s that the 
1,052 revised NoAs that PMTL  subsequently received in Nov ember 2017 from Thailand 's Customs 
Department rejected  PMTL's declared transaction values  for 1,052 shipments of cigarettes imported 
over the period 2001 -2003, including 779 of the 780 shipments covered by the 2002 -2003 Charges. 
The 1,052 revised NoAs dete rmined revised customs valu es using the same "actual prices " found by 
the DSI, which also served as the basis for the 2002 -2003 Charges.  
7.35.   The Panel is satisfied that the Charges/NoAs at issue share the same set of connections with 
the November 2012 BoA Rul ing as the 2003 -2006 Charges did with the September 2012 BoA Ruling, 
insofar as:  
a. both involve the same importer (PMTL)  
b. both involve the same exporter (PM Indonesia);  
c. both involve the same importing country (Thailand);  
d. both involve the same exporting count ry (Indonesia);  
e. both involve the same product, brands and producer ( L&M / Marlboro cigarettes and PM 
Indonesia);  
f. both involve entries with the same transaction values, imported under the same supply 
contract;  
g. leaving aside whether the 2002 -2003 Charges co nstitute "customs valuation 
determinations " for purposes of the CVA, both measures relate to the valuation of goods 
for purposes of levying ad valorem  duties on PMTL 's imports of Marlboro  and L&M 
cigarettes; and  
                                                
77 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , Section 7.3.3.3.2. 2 
(Close nexus > Timing).  
78 Panel Report, Thailand – Cigarettes (Phi lippines)  (Article 21.5 – Philippines) , Section 7.3.3.3.2.4 
(Close nexus > Effects) . 
79 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.505.  WT/DS371/RW2  
 
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  h. while the 2002 -2003 Charges and the November 2012 BoA Ruling were taken by different 
Thai governmental agencies (i.e. the Public Prosecutor  and the BoA ), both agencies have 
potentially overlapping functions in the area of customs valuation .  
7.36.    There are thr ee differences between the set of connections that exist between the 
Charges/NoAs at issue and the November 2012 BoA Ruling, as compared with the set of connection s 
that existed between the 2003 -2006 Charges with the September 2012 BoA Ruling. However, non e 
of these differences attenuates the nexus that exists between the Charges/NoAs at issue and the 
November 2012 BoA Ruling. In fact, as elaborated below, the first and second differences establish 
additional connections between these measures.  
7.37.   The first d ifference is that t he Thai Customs Department issued the 1,052 revised NoAs based 
on the DSI 's calculation of the "actual " values, and which also served as the basis for the 2002 -2003 
Charges filed by the Public Prosecutor. The Panel in the first recourse to Article 21.5 stated that t he 
nexus that it found to exist  between the 2003-2006 Charges and t he BoA Ruling in question was 
"more attenuated than it would otherwise be if both measures were taken by the same Thai 
government agencies "; however, the Panel considered that "the Public Prosecutor and the BoA have 
potentially overlapping functions in the area of customs valuation, at least to the extent that, in 
discharging their respective mandates, both agencies have made assessments as to whether PMTL 's 
declared transaction values should be accepted or not, with corresponding assessments as to the 
amount in ad valorem duties that PMTL should have paid to the Thai government ".80 The fact that 
the Thai Customs Department issued the 1,052 revised NoAs on the basi s of the exact same 
information and calculations underlying the 2002 -2003 Charges confirms that the Customs 
Department, the DSI and Public Prosecutor have potentially overlapping functions in the area of 
customs valuation . Indeed, it further suggests that there is a degree of coordination with respect to 
their respective actions.  
7.38.   The second difference between the set of connections that exist between the Charges/NoAs 
at issue and the November 2012 BoA Ruling, as compared with the set of connections between the 
2003-2006 Charges and the September 2012 BoA Ruling at issue in the firs t recourse to Article 21.5, 
concerns the relationship that exists between the entries covered by the Charges/NoAs at issue and 
the November 2012 BoA Ruling. Specifically, t he 780 entries covered by the 2002-2003 Charges 
include 206 of the 210 entries subje ct to the November 2012 BoA Ruling , and 208 of those 210 
entries are also covered by the 1,052 revised NoAs. These  206 entries have thus been addressed in 
all three WTO proceedings in this dispute, in the context of the  following sets of measures: ( 1) the 
BoA's protracted delay in addressing the value of these entries (original proceedings); ( 2) the 
November 2012 BoA Ruling (first compliance proceedings); and ( 3) the Charges/NoAs at issue in 
this second recourse to Article 21.5 . The foregoing establishes th at the Charges/NoAs at issue and 
the November 2012 BoA Ruling share a further connection, in terms of overlapping entries, that did 
not exist with respect to the 2003 -2006 Charges and the September 2012 BoA Ruling.  
7.39.   The third  difference between the set of connections that exist between the Charges/NoAs at 
issue and the November 2012 BoA Ruling, as compared with the set of connections that existed 
between the 2003 -2006 Charges with the September 2012 BoA Ruling, is the apparent lack of any 
connection between  the grounds  relied on in the 2002 -2003 Charges and the November 2012 BoA 
Ruling. T he Panel in the first recourse to Article 21.5 noted  that "the Charges, like the original 
recommendations and rulings of the DSB implemented by the BoA in its September 2012  Ruling, 
both entailed reference to, and comparison of some kind with, the duty free prices of King Power ".81 
The Charges/NoAs at issue are based on a comparison between PMTL 's declared transaction values 
and a higher , "actual"  price calculated by the Thai authorities based on pricing and cost information 
reported by PM Indonesia, to the Indonesian excise tax authorities, in form CK -21A. There is no 
indication that either the November 2012 BoA Ruling, nor any of the original measures subject to 
the DSB recommendations and rulings, nor any other declared measure taken to comply, involved 
any k ind of reference to pricing and cost information reported by PM Indonesia to the Indonesian 
excise tax authorities  in the CK-21A form. That does not sever the nexus between the Charges/NoAs 
at issue and the November 2012 BoA Ruling: as the Panel in the first recourse to Article 21.5 stated,  
                                                
80 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philipp ines), para. 7.553.  
81 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.553.  
 WT/DS371/RW2  
 
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  "there does not need to be perfect and exact identity between all of the grounds underlying the two 
measures in order for there t o be a 'close nexus '".82  
7.40.   In terms of timing , the 2002 -2003 Charges at issue in this second recourse to Article 21.5 
were issued in January 2017 , and the 1,052 revised NoAs were issued to PMTL in November 2017 . 
Therefore, as with the 2003 -2006 Charges at is sue in the first recourse to Article 21.5, the issuance 
of the Charges /NoAs at issue  post-dates both the expiry of the reasonable period of time for 
implementation of the DSB 's recommendations and rulings (which ended in May 2012), and 
Thailand 's adoption of two declared measures taken to comply (September and November 2012 BoA 
Rulings).  In the first recourse to Article 21.5, the Panel identified a further nexus in timing, focusing 
on the timing of certain events culminating in the Charges and the original DSB recommendations 
and rulings (including the fact that when the DSI recommended for a second time that 2003-2006 
Charges be filed, in August 2011, this took place only one month after the DSB 's recommendations 
and rulings were adopted ).83 In this second r ecourse to Article 21.5, Thailand states, without further 
elaboration, that "certain important facts surrounding the 02 -03 Charges and the 03 -06 Charges are 
different, " and that "[f]or example, the sequence of events leading to the 02 -03 Charges is relevant 
to the timing of the measures at issue ".84 Insofar as Thailand is suggesting that there is some 
important aspect of the timing of the events that led to the 2002 -2003 Charges (and/or 1,052 
revised NoAs) that serves to distinguish them for purposes of the "close nexus " analysis, the Panel 
fails to see what the relevant factual difference is.  
7.41.   Regarding consideration of effects , the Panel concluded that t he 2003-2006 Charges had the 
potential to circumvent Thailand 's compliance with the CVA achieved th rough th e September 2012 
BoA Ruling, notwithstanding that the Charges had  no legal effect on the September 2012 BoA Ruling 
or the entries subject to that ruling . The same considerations apply a fortiori  to the Charges/NoAs 
at issue, considering that they b oth actually revise the customs values for entries that were subject 
to the November 2012 BoA Ruling, and this Ruling was one of Thailand 's declared measures taken 
to comply.  
7.1.3.1.4   Conclusion  
7.42.   Based on the foregoing, the Panel is satisfied that the 1,052 revised  NoAs and the 2002 -2003 
Charges share the same set of connections  with the November 2012 BoA Ruling  as the 2003 -2006 
Charges did with the DSB 's rulings and recommendations and Thailand 's declared measures taken 
to comply, such that the Panel 's finding of the existence of a sufficiently "close nexus " in the first 
recourse to Article 21.5 applies mutatis mutandis  to the 2002 -2003 Charges at issue in this second 
recourse to Article 21.5. The Panel  therefore concludes that each  of the measures at issue in this 
second recourse to Article 21.5 is properly characterized as an undeclared "measure  taken to 
comply ", and thus falls within the jurisdiction of the Panel. As noted at the outset, Thailand has not 
argued otherwise.  
7.1.3.2   Thailand 's allegations of "illegal acts " by PM Indonesia  
7.43.   In the context of advancing its interpretation of Article 1.2(a) of the CVA, Thailand asserted 
in its first written submission that the Philippines "cannot base its claims of violation against Thailand 
on the basis of an admit ted illegal act of [PM Indonesia] in a foreign jurisdiction ".85 According to 
Thailand, the "admitted illegal act " in question was PM Indonesia 's decision to knowingly report costs 
and profits in the CK -21A form that, according to the Philippines, were "fabricated arithmetical 
'plugs '"86 that were "arbitrary " and "fictitious ", and which "did not – and could not – represent the 
actual costs and prof its of the producer and the other parties in the supply chain ".87 
                                                
82 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.536. If it were 
otherwise, it would lead to the abs urd result that if a Member determined the customs value of certain goods 
on the basis of a comparison that was subsequently found to be inconsistent with the obligations in Articles 1 
to 7 of the CVA, a Member's subsequent determination of the customs val ue of those same goods would not 
fall within the scope of Article 21.5 review unless it replicated precisely the same error.  
83 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.516.  
84 Thailand's response to Panel ques tion No. 127, para. 1.9.  
85 Thailand's first written submission, para. 3.48.  
86 Philippines' first written submission, para. 414.  
87 Philippines' first written submission, para. 237.  
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  7.44.   Thailand formulated this aspect of its argument in terms that could be understood as relating 
to the admissibility of the Philippines ' claims.88 Furthermore, Thailand sought to find support fo r this 
aspect of its argument on the basis of international jurisprudence that seems to concern the 
inadmissibility of certain types of claims  and defences . Specifically, Thailand referred to the 
Permanent Court of International Justice's statement in the Factory at Chorzów  case that "one party 
cannot avail himself of the fact that the other has not fulfilled some obligation …  if the former party 
has, by some illegal act, prevented the latter from fulfilling the obligation in question ".89 Thailand 
referred t o other public international law authorities, including arbitral decisions, for the related 
propositions and maxims that "an unlawful act cannot serve as the basis of an action in law "; that 
"[a] State may not invoke its own illegal act to diminish its own  liability "; and "the most 
exceptionable of all principles" is that "he who does wrong shall  be at liberty to plead his own illegal 
conduct on other occasions as a partial excuse ".90  
7.45.   The Philippines responded that this aspect of Thailand 's argumentation "does not posit a 
general interpretation of Article 1.2(a) that applies in all cases ", but instead "posits a supposed legal 
bar to a WTO claim with the applicability of that legal bar premised on the facts of a particular case, 
i.e., an 'illegal act ' by the importer ".91 The Philippines indicated that it doubted whether Thailand 's 
proposed legal bar has any basis in WTO law, as it appears to attribute to a WTO Member the legal 
consequences of an "illegal act " allegedly committed by an importer .92 In any event, the Philippines 
considered that the Panel need not decide whether Thailand 's proposed legal bar has any basis in 
WTO law, because Thailand has failed to show that the importer and/or the producer committed any 
"illegal act ".93 
7.46.   In its second  written submission, Thailand did not specifically address the Philippines ' 
observation that this line of argument appear s to posit a legal bar to the admissibility of the claims, 
rather than any general interpretation of the CVA. To the contrary, Thailand  reiterated the same 
argument94, and formulated it in terms that implied that the commission of an "illegal act " by PM 
Indonesia was a ground for rejecting the Philippines ' claims that was distinct from Thailand 's 
argument relating to the interpretation of the CVA underlying the Philippines ' claims. Specifically, 
Thailand submitted that the Philippines ' claim should be rejected "not only  because it is based on 
flawed interpretations  of the CVA, but also, and more importantly , because it is based on the 
Philippines ' open admission that [PM Indonesia], a related company of PMTL, committed an illegal 
act under Indonesian law ".95 The same distinction was reflected in Thailand 's statement that "good 
faith" interpretation under the Vienna Convention "does not allow the Philippines to base a claim of 
                                                
88 For instance, Thailand reiterated that "a good faith interpretation must not allow parties to claim a 
violation of a CVA provision based on an illegal act of the company whose products were valued", and that "the 
Philippines cannot assert a claim of viola tion against Thailand on the basis of admitted illegal acts committed in 
Indonesia". (Thailand's first written submission, paras. 3.79 and 3.175.)  
89 Thailand's first written submission, para. 3.75 (referring to Permanent Court of International Justice, 
Factory at Chorzów (Germany v. Poland) (Jurisdiction), 1927, PCIJ Series A, No. 9, p. 31).  
90 Thailand's first written submission, para. 3.74 -3.76 (refe rring to B. Cheng, General Principles of Law 
as applied by International Courts and Tribunals, (Stevens and Sons, Ltd., 1953), Chapter 4, p. 149 and 155).  
91 Philippines' second written submission, para. 89. (emphasis added)  
92 Philippines' second written s ubmission, para. 90.  
93 Philippines' second written submission, para. 92. In its first written submission, Thailand specified in 
several places that the illegal acts in question were committed by PM Indonesia (see paras. 1.5, 3.47, 3.48, 
3.175, 4.3(c)). How ever, in its first written submission, Thailand also referred to the illegal act "of the company 
whose products were valued" (paras. 3.79), and of "the entity whose merchandise was valued" (para. 3.96). 
Thailand has also occasionally referred more broadly,  without qualification, to "Philip Morris" (e.g. Thailand's 
response to Panel question No. 164(a), para. 3.13, quoted in paragraph 7.49 below). The Panel does not 
understand Thailand's varying formulations to imply that in its view it was the importer, PMT L, that was the 
entity that engaged in the alleged "illegal act". However, the Philippines understood the reference to "the 
company whose products were being valued" to mean the PMTL, i.e. the importer (Philippines' second written 
submission, paras. 86 and  98), and thus proceeded to formulate some of its rebuttal arguments on this issue 
on the premise that Thailand was alleging illegal acts by "the importer", or "the importer (and/or the 
producer)". As a result, there is a degree of misalignment between the  parties' arguments on which Philip 
Morris entity/entities is/are implicated by Thailand's arguments regarding an alleged "illegal act". However, this 
issue is immaterial the Panel's disposition of the matter before it.  
94 Thailand reiterated that a "good f aith" interpretation "precludes WTO Members from bringing a claim 
under this provision that is based on illegal acts committed by either the importer or one of its affiliated 
companies", and recalled the "recognized concepts of international law" set forth  in its first written submission. 
(Thailand's second written submission, para. 3.52.)  
95 Thailand's second written submission, para. 3.52. (emphasis added)  
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  violation of the CVA on admitted illegal acts of its main stakeholder ", and that "[i]n any event,  the 
Philippines ' claims should be dismissed as they are based on flawed understandings  of the relevant 
CVA obligations. "96 In the request for findings set forth at the end of Thailand 's second written 
submission, Thailand appeared to again distinguish its argument regarding "illegal acts " from its 
arguments on the interpretation of the CVA, stating that "the Panel must reject the Philippines ' 
claims as they are premised on incorrect legal interpretations  of the CVA provisions and because the 
Philippines ' claims are based on admitted illegal acts committed by PMTL 's related company in 
Indonesi a."97 The implication of these statements is that its argumentation regarding the alleged 
"illegal acts " was not part of its argumentation regarding the interpretation  of the CVA.  
7.47.   Furthermore, Thailand 's first and second written submissions did not articula te any clear 
connection between its general interpretation of the CVA, and the question of whether PM Indonesia 
committed an "illegal act ". Thailand 's interpretation of the CVA is basically that the authorities in the 
importing country may assume the accur acy and truthfulness of information provided by the 
exporting country 's authorities and/or by the foreign producer or importer. However, the Panel notes 
that if that is correct, it would hold true regardless of whether any provision of inaccurate or 
untrut hful information is "illegal ", wrongful, or justified. Thailand did not explain why an appraisal 
of the legality of PM Indonesia 's conduct in reporting inaccurate figures would have any bearing on 
the question of whether the Thai authorities were entitled to assume that the information was 
accurate and to rely on it; nor did Thailand explain why the argument that its authorities were 
entitled to assume in good faith that the information reported by PM Indonesia in the CK -21A form s 
was an accurate r eflection of PM Indonesia 's pricing and cost figures would require, as a 
corollary,  characterizing PM Indonesia 's conduct in terms of illegality, wrongfulness, or bad faith. 
The Panel considers that the lack of clarity as to what the one has to do with the  other further 
reinforces the impression that Thailand 's arguments regarding the alleged "illegal act ", while 
ostensibly made in support of Thailand 's general interpretation of the CVA, might also be construed 
as an argument relating to the admissibility o f the claims.  
7.48.   The Panel put several questions to Thailand aimed at clarifying the nature and relevance of 
its arguments regarding the alleged "illegal acts " committed by PM Indonesia. In its responses to 
questions, Thailand reiterated that "Thailand is not alleging anyth ing", was "simply referring to and 
describing the Philippines' own arguments regarding the Indonesian data", and "uses the term 'illegal 
act' to paraphrase the Philippines' own argument regarding the content of these forms".98 Thailand 
made two further important, interrelated clarifications. First, Thailand clarified that this line of 
argument is not distinct from its argument regarding the interpretation of the CVA, which as noted 
above is basically that the authorities of the importing country should have the right to assume that 
the information provided by the exporting country 's authority is accurate and truthful. In response 
to questions from the Panel, Thailand has clarified that this aspect of its argumentation is not to be 
construed as raising any iss ue concerning the admissibility of the Philippines ' claims, whether in 
terms of the Factory at Chorzów principle99, estoppel100, the clean hands doctrine101, Article  3.10 of 
the DSU102, or otherwise. Second, and perhaps most importantly, Thailand clarified that its 
argumentation regarding the proper interpretation of the CVA also "does not hinge on characterizing 
PM Indonesia 's actions as illegal acts under Indonesian law ".103  
7.49.   Based on t he foregoing, the Panel considers that it is sufficiently clear that Thailand is not 
arguing that the Philippines ' claims are inadmissible by virtue of any alleged "illegal act " on the part 
of PM Indonesia, and that Thailand 's other argumen tation also  does not actually depend on or entail 
characterizing PM Indonesia 's conduct as illegal under Indonesian law. The Panel understands that 
                                                
96 Thailand's second written submission, para. 3.115. (emphasis added)  
97 Thailand's second written sub mission, para. 4.13(c). (emphasis added)  
98 Thailand's response to Panel question Nos. 133 and 134, para. 3.4. In its second written submission, 
Thailand had already responded to the Philippines' contention that Thailand's allegations of "illegal conduct" a re 
"wholly unsubstantiated" by stating that "is not the party asserting these facts", but "is merely citing what the 
Philippines repeatedly and openly states in its submissions before this Panel". (Thailand's second written 
submission, para. 3.58.)  
99 Thailand's response to Panel question No. 131.  
100 Thailand's response to Panel question No. 132.  
101 Thailand's response to Panel question No. 164(a).  
102 Thailand's response to Panel question No. 164(a).  
103 Thailand's response to Panel question No. 165(a), para. 3.2 3. See also Thailand's response to Panel 
question No. 164(b), para. 3.21.  
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  Thailand , despite clarifying that its argumentation regarding the proper interpretation of the CVA 
"does not hinge on charac terizing PM Indonesia's actions as illegal acts under Indonesian law",  is of 
the view that what matters "is that the inaccuracy was not caused by some external factor outside 
the control of Philip Morris ", but rather "was created knowingly and voluntarily by Philip Morris itself " 
and that the Philippines is faulting Thailand for "relying on information that suffers from inaccuracies 
that are of Philip Morris ' own making ".104 The Panel address es this argumen t in the context of Section 
7.2, when assessing whether the Thai authorities were entitled to assume that the information 
reported by PM Indonesia in the CK -21A form s was accurate and truthful , and concludes that as 
result of the regulatory constraints mandated by Indonesian excise tax law (i. e. an external factor 
outside the control of PM Indonesia), the CK -21A forms could not represent PM Indonesia's actual 
costs and profits, and necessarily erred on the side of overstating the actual costs and profits of PM 
Indonesia and other parties involv ed in the supply chain .  
7.1.3.3   The Philippines ' alternative claims under Article 7.1 of the CVA  
7.1.3.3.1   Introduction  
7.50.   The Philippines understands that the Thai authorities ' determination of the "actual " value of 
PMTL's imports is governed by, and inconsistent with, the rules in Article 6 of the CVA concerning 
the computed value method of customs valuation. Thailand submits that insofar as the CVA applies 
to the 2002 -2003 Charges and the "actual price " is considered to be a determination of the revised 
customs value, the WTO-consistency of  that aspect of  the 2002-2003 Charges must be assessed 
under Article 7 and not Article 6. In response, the Philippines makes the alternative claim that, 
insofar as it is found that the Thai authorities resorted to  the customs valuation me thod in Article 7 
to determine the value of PMTL 's goods, as opposed to determining a revised customs value on the 
basis of Article 6, the 2002 -2003 Charges and the 1,052 revised NoAs are inconsistent with 
Article  7.1.  
7.51.   At the substantive meeting, Thailand argued that this  alternative  claim under Article 7.1 falls 
outside of the scope of the Panel 's terms of reference, because it is not adequately identified in the 
Philippines ' panel request, and also because the Philippines failed to advance said c laim and the 
relevant arguments supporting it in a timely manner in these proceedings. The parties engaged in 
two rounds of written submissions on this  terms of reference issue following the substantive 
hearing.105  
7.52.   An additional issue arose in the context o f the parties' comments on the draft descriptive part 
of the Report. In its comments , the Philippines  stated that it was seeking not one but two alternative 
findings of violation from the Panel in respect of its claims under Article 7.1 of the CVA in respe ct of 
the 2002 -2003 Charges and the 1,052 NoAs, with the second  one being  that "Thailand violated 
Article 7 by determining the customs value under Article 7 without having followed, in a sequential 
manner, the hierarchy of methods provided for in the CVA".106 The Philippines stated that "[i]n 
essence, should the Panel find that Thailand used Article 7 to determine the value of PM Thailand 's 
goods, the Philippines ' sequencing claim includes Articles 2 to 7, and not just Articles 2 to 6. "107 
Thailand responded to  this comment by arguing that nowhere in its prior submission "did the 
Philippines indicate that it had made a second claim under Article 7 which related to Thailand 's 
alleged failure to follow the sequential order of valuation methods "108, and that "the Philippines ' 
comments on the Panel 's draft descriptive part is the first time that the Philippines advances a second 
claim under Article 7 ".109 Thailand submitted that "[t]he Philippines ' attempt to raise new claims at 
this extremely late sta ge of the proceedings must be rejected by the Panel. "110  
7.53.   The Panel considers that it is unnecessary to rule on that additional issue. Under the CVA, 
there is an obligation to sequentially apply the customs valuation methods set out in Articles 2 to 7 
when d etermining a revised customs value. In Section 7.3.5 (Claim regarding sequential application 
of valuation methods) below , the Panel finds that the Philippines has made a prima facie  case, which 
                                                
104 Thailand's response to Panel question No. 164(a), para. 3.13.  
105 See Section 1.4.4 above.  
106 Philippines' comments on the descriptive part, para. 1 5. 
107 Philippines' comments on the d escriptive part, para. 15.  
108 Thailand's response to the Philippines' comments on the draft descriptive part, para. 2.17.  
109 Thailand's response to the Philippines' comments on the draft descriptive part, para. 2.18.  
110 Thailand's response to the Philippines ' comments on the draft descriptive part, para. 2.18.  WT/DS371/RW2  
 
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  Thailand has not rebutted, that the Public Prosecutor did not adhere to the obligation to sequentially 
apply the customs valuation methods set out in Articles 2 to 7  when determining a revised customs 
value . The Panel  reach es that finding without ruling on whether the P ublic Prosecutor used Article 6 
(or instead Arti cle 7)  to de termine a revised customs value, an d without ruling on  whether the 
customs value could have been determined on the basis of Article 6  (insofar as it was Article 7 that 
was instead used) . In the light of the foregoing , the Panel cons iders it unnecessary to resolve the 
parties' disagreement  about whether the Philippines' claim that the Public Prosecutor violated the 
obligation to sequentially apply the customs valuation methods in Articles 2 to 7 when determining 
a revised customs value is most  accurately characterized as a claim of violation that includes just 
Articles 2 to 6, or rather a claim of violation that includes Articles 2 to 7, or their disagreement as 
to whether, insofar as it is more accurately characterized in terms of the latter, the aspect of that 
claim pertaining to Article 7 would fall within the scope of the Panel's terms of reference. Accordingly, 
the Panel does not consider this issue further.  
7.1.3.3.2   Main arguments of the parties  
7.54.   Thailand argues that the Philippines ' panel request , by referring to "Article 7 " without 
specifying which subparagraph (s) and obligation (s) are  at issue, fails to meet the requirements of 
Article 6.2 of the DSU. According to Thailand, a complainant  is required to refer clearly to the 
particular subparagrap h(s) and obligation (s) that it considers to have been violated and to make a 
clear link between the specific obligation (s) at issue and the relevant aspects of the challenged 
measure, and a failure to do so in a panel request cannot be corrected in a subse quent submission.111 
Thailand contends that "the Philippines referred generally to Article 7 without specifying which of the 
three paragraphs of Article 7, or which of the seven subsections of paragraph 2 of Article 7, if any, 
it considered to have been viol ated".112 This general reference to Article 7 of the CVA  is inadequate 
to provide a summary of the legal basis of the complaint sufficient to present the problem clearly as 
required under Article 6.2 of the DSU given  that "Article 7 contains three sub -paragr aphs with 
multiple obligations " and that "there  are considerable differences between the se sub-paragraphs "113 
of Article 7. In this connection, Thailand points out that "Article 7.1  addresses  flexibility in the use 
of the methodologies in Articles 2 -3 and 5 -6 of the CVA " while, "[i]n contrast, Article 7.2 contains 
prohibitions on the use of seven different valuation methodologies ", and "Article 7.3 contains certain 
procedural obligations ".114 Moreover, Thailand adds that the generic phrase "[Thailand failed to 
comply with] the relevant valuation rules " contained in the Philippines ' panel request is "overly 
vague " as it does not specify which valuation rule (s) of Articles 2, 3, 4, 5, 6 or 7 it ref ers to115 and 
the Philippines ' panel request fails to plainly connect the challenged measure with the individual 
provisions of the CVA invoked by the Philippines.116 
7.55.   Thailand further argues that even if the Philippines ' alternative  claim under Article 7.1 were 
to fall within the Panel 's terms of reference, it is not properly before the Panel on account of the 
Philippines ' failure to pursue it in a timely manner. Thailand submits  that the Philippines did not 
advance any claims and arguments under Article 7 of th e CVA either in its first or second written 
submission s, and therefore cannot be said to have properly made a prima facie  case under any 
obligation of Article 7. Moreover,  Thailand observes that in its responses to pre -hearing questions 
from the Panel regarding the relationship between Articles 6 and 7 of the CVA, the Philippines omitted 
to make any claims or seek findings with respect to Article 7 ; and that even if it had,  "answers to 
questions from a panel should not be considered as an opportunity fo r a complainant to make a 
prima facie case for the first time ".117 Thailand considers that it is far too late for the Philippines to 
raise claims under Article 7 in its opening statement at the substantive meeting with the parties , 
given that "at the time it  prepared its first written submission (and, presumably, its request for the 
establishment of the panel), the Philippines had in its possession all of the information on which it 
appeared to rely during the hearing with respect to Article 7 of the CVA ".118 Entertaining the 
                                                
111 Thailand's first submission on the scope of the claims, para. 2.11.  
112 Thailand's second submission on the scope of the claims, para. 2.20.  
113 Thailand's second submission on the scope of the claims, p ara. 2.25  
114 Thailand's second submission on the scope of the claims, para. 2.26.  
115 Thailand's second submission on the scope of the claims, para. 2.26  
116 Thailand's second submission on the scope of the claims, para. 2.28.  
117 Thailand's first submission on the scope of the claims, paras. 2.5 and 2.9.  
118 Thailand's first submission on the scope of the claims, paras. 2.7.  
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  Philippines ' claim  under Article 7.1  would in Thailand 's view  run contrary to the requirements of due 
process owed to it.119  
7.56.   The Philippines submits that the reference to Article 7 in its panel request, when read with 
the narrative text, com plies with the requirement in Article 6.2 of the DSU to provide "a brief 
summary of the legal basis of the complaint sufficient to present the problem clearly ". In the 
Philippines ' view, "Article 6.2 of the DSU does not prescribe that a complainant must id entify the 
specific obligation at issue by identifying, using numerals , the individual subparagraph at issue. 
A Panel request may also identify the specific obligation using words ".120 In this respect, the 
Philippines recalls that its panel request states "that each of the measures at issue is inconsistent 
with Articles 2, 3, 4, 5, 6, and 7 of the CVA because, among other s, Thailand failed to comply with 
the relevant valuation rules in establishing the alleged 'actual values ' of the imported goods ".121 In 
the Philippines ' view, the words "relevant valuation rules " have the effect of i ndicating that the 
Philippines brings a claim of inconsistency with Article 7.1 given that the valuation ru les that an 
authority may use are only set forth in the first paragraph of Article 7.122 The Philippines also clarifies 
that, unlike what is asserted by Thailand, it does not make any claims under Article 7.2 of the CVA , 
but rather relies on this provision  only as context for its claims under Articles 1.1. 1.2(a), 6.1 and 
7.1 of the CVA.123  
7.57.   The Philippines also argues that it presented a timely prima facie  case under Article 7.1. The 
Philippines submits that it has done "nothing more than respond to Thailand 's own shifting position ", 
and that its own due process rights have been undermined by  "the consistent failure of Thailand 's 
authorities to explain their determinations, coupled with Thailand 's own shifting, ambiguous, and 
misleading assertions in these proc eedings ".124 The Philippines states that "as soon as it became 
clear that Thailand was invoking the flexibilities in Article 7.1 " and was alleging that "its measures 
might even fall under Article 7.1 ", the Philippines first set forth arguments under Article 7.1 in its 
second written submission, and later invoked its  claims under that provision in its response to the 
Panel 's questions.125 The Philippines explains that it could not pursue a claim under Article 7.1 from 
the outset, i.e. in its first written submis sion, because it did not have the necessary information for 
doing so, that is, the information that the Thai authorities had been unable to make a determination 
under Article 6 and had resorted to Article 7. According to the Philippines,  "prior to the response to 
the Panel 's pre -hearing questions, Thailand had never previously stated, in clear terms, that its 
customs valuation determinations were made under Article 7, and that its authorities had not been 
able to apply Article 6 ".126  
7.1.3.3.3   Analysis by the Pane l 
7.1.3.3.3.1   General considerations  
7.58.   Article  6.2 of DSU provides in relevant part:  
The request for the establishment of a panel shall be made in writing. It shall indicate 
whether consultations were held, identify the specific measures at issue and provide a 
brief su mmary of the legal basis of the complaint sufficient to present the problem 
clearly.  
7.59.   The requirements under Article  6.2 to identify the specific measure(s) at issue and provide a 
brief summary of the legal basis of the complaint sufficient to present the problem clearly are central 
to the establishment of the jurisdiction of the panel. The "specific measure " identified in a panel 
request is the "object of the challenge ", or, more precisely, "the measure that is alleged to be causing 
                                                
119 Thailand's first submission on the scope of the claims, paras. 2.6 -2.8; Thailand's second submission 
on the  scope of the claims, para. 2.13.  
120 Philippines' first submission on the scope of the claims, para. 43.  
121 Philippines' first submission on the scope of the claims, para. 45.  
122 Philippines' first submission on the scope of the claims, paras. 45 -47. 
123 Philippines' first submission on the scope of the claims, para.48.  
124 Philippines' first submission on the scope of the claims, para. 49.  
125 Philippines' first submission on the scope of the claims, para. 54.  
126 Philippines' first submission on the scope of  the claims, paras. 52 -53; Philippines' second submission 
on the scope of the claims, para. 58.  
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  the violation of an obl igation contained in a covered agreement ".127 The "legal basis " of the complaint 
or the "claim ", in contrast, is the "specific provision of the covered agreement that contains the 
obligation alleged to be violated ".128 Both elements constitute the "matter refe rred to the DSB ", 
which forms the basis of the panel 's terms of reference under Article  7.1 of the DSU.129 Thus, in 
defining the scope of the dispute, Article  6.2 serves the function of establishing and delimiting the 
panel 's jurisdiction.130 
7.60.   The Appellate  Body has repeatedly held that, in order for a panel request to comply with the 
requirement under Article  6.2 of the DSU to provide a summary of the legal basis of the complaint, 
the panel request must, at a minimum, list the articles of the covered agreements  claimed to have 
been violated.131 While the listing of treaty provisions is a necessary minimum prerequisite, there 
may be situations where this may not be sufficient to present the problem clearly, as in instances 
where the articles contain multiple and/or  distinct obligations.132 Also, in cases where the panel 
request challenges a number of measures on the basis of multiple WTO provisions, providing "a brief 
summary of the legal basis of the complaint sufficient to present the problem clearly may depend 
on w hether it is sufficiently clear which 'problem ' is caused by which measure or group of 
measures ".133 Additionally, the panel request must also "plainly connect the challenged measure(s) 
with the provision(s) of the covered agreements claimed to have been inf ringed ".134 Whether or not 
a general reference to a treaty provision will be adequate to meet the requirement of sufficient 
clarity  under Article  6.2 is to be examined on a case -by-case basis, taking into account the extent 
to which such reference sheds light on the nature of the obligation at issue.135 Thus, the Appellate 
Body has reiterated that the determination of whether a panel re quest is "sufficiently precise " 
requires the scrutiny of the panel request "as a whole, and on the basis of the language used ".136  
7.61.   While the identification of a claim in a panel request is a necessary prerequisite  for a Panel to 
rule on that claim, it is no t always a sufficient condition  as other considerations might need to be 
taken into account . In some circumstances, a panel may be precluded from ruling on a claim, even 
where it is included in the panel request, if the complainant does not articulate the claim in a clear 
and timely manner in its subsequent submissions. In such circumstances, the basis for the panel 
being precluded from ruling on the claim is not that it falls outside of its terms of reference, but 
rather that doing so  would be inconsistent  with the requirements of due process owed to the 
respondent. Indeed, both parties in this dispute seem to share that understanding, as they have 
framed their arguments regarding the timeliness of the Philippines ' claim under Article 7.1 of the 
CVA in term s of due process.137 
7.62.   The Panel notes that t here is no requirement in the DSU or in WTO practice for arguments on 
all claims relating to the matter referred to the DSB to be set out in a complaining party 's first written 
submission to the panel.138 The panel pr ocess is a dynamic one where  claims by the parties become 
                                                
127 Appellate  Body Report, EC – Selected Customs Matters , para. 130.  
128 Appellate  Body Report, EC – Selected Customs Matters , para. 130.  
129 Appellate  Body Report,  EC and certain member States – Large Civil Aircraft , para. 639 (referring to 
Appellate  Body Reports, Guatemala – Cement I , paras. 72 and 73; US – Carbon Steel , para. 125; US – 
Continued Zeroing , para. 160; US – Zeroing (Japan) (Article  21.5 – Japan) , para . 107; and Australia – Apples , 
para. 416).  
130 Appellate  Body Reports, Brazil – Desiccated Coconut , p. 22, DSR 1997:I, p. 186; US – Continued 
Zeroing , para. 161; and EC and certain member States – Large Civil Aircraft , para. 640.  
131 Appellate  Body Reports, Korea – Dairy , paras. 123 and 124 (referring to Appellate  Body Reports, 
Brazil – Desiccated Coconut , p. 22, DSR 1997:I, p. 186; EC – Bananas III , paras. 145 and 147; and India –
Patents (US) , paras.  89, 92, and 93); US – Carbon Steel , para. 130.  
132 Appellate  Body Report, Korea – Dairy , para. 124.  
133 Appellate  Body Reports, China – Raw Materials , para. 220.  
134 Appellate  Body Reports, China – Raw Materials , para. 220 (referring to Appellate  Body Report, 
US – Oil Country Tubular Goods Sunset Reviews , para.  162).  
135 Appellate  Body Report, US – Carbon Steel , para. 130 (referring to Appellate  Body Report, Korea – 
Dairy , para. 124).  
136 Appellate  Body Report, EC and certain member States – Large Civil Aircraft , para. 641 (referring to 
Appellate  Body Reports, US – Carbon St eel, para. 127; US – Oil Country Tubular Goods Sunset Reviews , 
paras.  164 and 169; US – Continued Zeroing , para. 161; and US – Zeroing (Japan) (Article  21.5 – Japan) , 
para. 108).  
137 Thailand's first submission on the scope of the claims, para. 2.6; Philippines' first submission on the 
scope of the claims, paras. 57 -66. 
138 Appellate Body Report, EC – Bananas III, para. 145.  
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  refined and elaborated through arguments and counter -arguments.139 The case law offers various 
examples of panels having to deal with evolving and shifting argumentation by a party.140 In cases 
where en tirely new lines of argumentation emerge at an advanced stage of the proceeding, 
adjudicators have sometimes ensured due process by allowing the other party to respond with an 
additional submission.141 
7.63.   In some cases, however, panels or the Appellate Body hav e found that considerations of due 
process precluded consideration of a claim that was not raised or supported by any arguments until 
a late stage of the proceeding. In EC – Fasteners (China)  the Appellate Body found that the panel 
erred in ruling on a claim under Article 6.5 of the Anti -Dumping Agreement  notwithstanding that it 
was identified in the panel request, and thus within the Panel 's terms of reference. After reviewing 
the manner in which the particular claim was pursued  by the complaining party , the Appellate Body 
explained that:  
[T]he Panel record shows that China asserted its claim … only in response to questions 
from the Panel, and articulated this claim only after the parties had provided the Panel 
with written submi ssions and had attended a substantive meeting. We do not find that 
assertions made so late in the proceedings, and only in response to questioning by the 
Panel, can comply with either Rule 4 of the Panel 's Working Procedures, or the 
requirements of due pro cess of law. The late assertion of a claim …, and the absence of 
proper argumentation and of the provision of relevant evidence in support of this 
assertion, demonstrates that the European Union was not called upon to respond to 
China 's claim under Article  6.5.142 
7.64.   The Panel recalls that a similar issue  arose in the original proceeding in this dispute.143 The 
Philippines introduced a claim under Article 4 of the CVA in its written responses to a second set of 
questions from the panel , submitted  after the second substantive meeting. Prior to that point, while 
Article 4 was explicitly listed in the panel req uest, the Philippines had consistently maintained the 
position that Article 4 was not relevant to its claim relating to valuation methodologies under Articles 
5 and 7 and had neither specifically referenced a violation of Article 4, nor provided evidence o r 
specific arguments to demonstrate a violation of that provision. Given the absence of reference to 
or arguments concerning Article  4 until the last stage of the p anel proceedings and the Philippines ' 
prior statements  on the irrelevance of Article 4 throu ghout the proceeding, the panel found that the 
Philippines ' claim under Article 4 was "neither timely nor specific enough to warrant its inclusion in 
the Philippines ' request for findings and recommendations ".144 
7.65.   The Panel considers the two main issues raise d by Thailand to be the consistency, or lack 
thereof, of the Philippines ' claim under Article 7.1 with Article 6.2 of the DSU as well the timeliness 
of this claim. The Panel will analyse these issues in turn.  
7.1.3.3.3.2   Article 6.2 of the DSU  
7.66.   The panel request states  that the 1,052 revised NoAs and the 2002-2003 Charges "are 
inconsistent with … Articles 2, 3, 4, 5, 6 and 7 of the CVA, because, among others, Thailand failed 
to comply with the relevant valuation rules in establishing the alleged 'actual values ' of the i mported 
goods ".145 The issue raised by Thailand 's objection is whether this item of the panel request suffices 
to "provide a brief summary of the legal basis of the complainant sufficient to present the problem 
clearly " for purposes of Article 6.2. Thailand does not take issue with the fact that the panel request 
simultaneously identifies all of these CVA provisions covering all of the alternative valuation methods 
under the CVA; rather, Thailand 's objection is confined to the fact that the reference to Article 7 
                                                
139 Panel Report, India – Patents (US) , para. 7.13.  
140 See e.g. Panel Reports, EC – Bed Linen (Article 21.5 – India) , para. 6.28; US – Clove Cigarettes , 
paras. 7.84ff; US – Shrimp (Viet Nam) , para. 7.170; and EC – Salmon (Norway) , para. 7.609. See Appellate 
Body Report, EU – Fasteners (China ), paras. 433 -434. 
141 See e.g . Decision by the Arbitrator, Canada – Aircraft Credits and Guarantees (Article 22.6 
– Canada) , para. 2.16; Panel Report, Australia – Salmon , paras. 8.22ff.  
142 Appellate Body Report, EC – Fasteners (China) , para. 574. See also Panel Report, 
Morocco  — Hot Rolled Steel (Turkey) , para. 7.64.  
143 Panel Report, Thailand — Cigarettes (Philippines) , paras. 7.271 -7.278.  
144 Panel Report, Thailand — Cigarettes (Philippines) , para. 7.278.  
145 WT/DS371/22, paras. 14 and 20.  
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  does not specify which of its subparagraphs and obligations is at issue. On that basis, Thailand 
argues that the reference to Article 7 does not meet the requirements of Article 6.2, and therefore 
the Philippines ' alternative claim under Article 7.1 falls outside of the panel 's terms of reference.  
7.67.   The Panel considers that in cases where the complaining party is unable to obtain from the 
respondent certain information regarding the content of the measures at issue , this will naturally 
have a bearing on the degree of specificity that could reasonably be expected in identifying the legal 
basis for the complaint for purposes of Article 6.2 of the DSU. The Appellate Body has confirmed 
that this is so with respect to th e degree of specificity expected with respect to the identification of 
the specific measures at issue146, and the Panel sees no reason why the same logic would not apply 
in the context of assessing whether a panel request identifies "the legal basis of the c omplaint 
sufficient to present the problem clearly ".147 In the Panel 's view, while a complainant must always 
comply with this requirement, regardless of any difficulties it faces in obtaining relevant information, 
such difficulties in obtaining relevant info rmation may be highly germane to the appraisal of what is 
"sufficient " to present the problem "clearly" in the circumstances of a particular case.  
7.68.   Turning to the circumstances of this case, it is not in dispute that the Thai authorities provided 
PMTL with very limited information on how they established the "actual value " in the NoAs, and on 
how they established the "actual price " in the 2002 -2003 Charges. The Thai authorities did not 
inform PMTL of the customs valuation method used to determine those custo ms values at the time 
that the 2002 -2003 Charges were issued, or at the time when the NoAs were sent. Following a 
request for information from PMTL, the Thai Customs Department did provide PMTL with limited 
information regarding the basis for determining t he "actual value " in the NoAs, but that information 
still fell short of specifying the exact customs valuation method that was used. PMTL 's similar request 
for an explanation sent to the Public Prosecutor received no response from the latter. It appears to  
be an uncontested fact that, at the time the Philippines prepared its panel request, neither PMTL nor 
the Philippines had been told by the Thai authorities specifically which (if any) of the customs 
valuation methods in Articles 2 through 7 of the CVA was  used to calculate the "actual value " in the 
NoAs and the "actual price " in the 2002 -2003 Charges.  
7.69.   The lack of information regarding the customs valuation method used is expressly reflected 
in the panel request. It states  in relevant part that the NoAs provide that the DSI calculated the 
"actual value " on the basis of documents completed by PM Indonesia, which were obtained from the 
Indonesian government, "but provide[d] no further explanation on the valuation methodology ".148 
The panel request likewise states that "neither the 2002 -2003 Charges nor the annex state the basis 
for the conclusions that the declared prices are 'false' and that the declared prices should be replaced 
by alternative 'actual ' customs values ".149 It is in this context that the panel request proceeds to 
state that 1,052 revised NoAs and the 2002 -2003 Charges "are inconsistent with (…) Articles 2, 3, 
4, 5, 6 and 7 of the CVA, because, among others, Thailand failed to comply with the relevant 
                                                
146 In EC and certain member States – Large Civil Aircraft , the Appellate Body stated that "[w]hether a 
measure can be identified in conformity with the requirements of Article 6.2 may, as is the case here, depend 
on the extent to which that measure is specified in the public domain." The Appellate Body stated that it did 
"not understand Article 6.2 to impose a standard that renders it more difficult to challenge a measure simply 
because information in the public domain concerning that measure is of a general character", and that "the 
lack of specifi cation in the public domain should not shield this particular measure from challenge simply 
because greater detail in the form of, for example, an identifiable programme name was publicly available in 
respect of the other measures". The Appellate Body note d that in the circumstances of that case, "it is still not 
clear to us what additional degree of specificity could reasonably have been expected regarding the 
identification of R&TD funding allocated through the French Government's budgetary process", and concluded 
that "[t]aking into account the public information that existed regarding the French R&TD funding at the time 
of the United States' panel request", the description set out therein "was sufficiently precise" to establish that 
the funding challenge d by the United States was within the Panel's terms of reference. (Appellate Body Report, 
EC and certain member States – Large Civil Aircraft , para. 648.)  
147 In EU – Energy Package , the panel recalled the Appellate Body's analysis above, and stated that 
"[w]e similarly consider that, a complainant's ability to 'provide a brief summary of the legal basis of the 
complaint in order to present the problem clearly' might be affected by t he availability of relevant information 
in the public domain. In our view, it may well be open to a complainant to argue, with due substantiation, that 
information pertinent to its claim was not publicly available and that, as a consequence, its ability to  comply 
with the requirements of Article 6.2 of the DSU was affected." (Panel Report, EU – Energy Package , 
para. 7.213.)  
148 WT/DS371/22, para. 11.  
149 WT/DS371/22, para. 19.  
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  valuation rule s in establishing the alleged 'actual values ' of the imported goods ".150 This is followed 
by a claim under Article 16, on the basis that "Thailand has failed to provide, upon written request, 
a written explanation as to how the customs values of the imported  goods were determined ".151 
7.70.   The Panel considers that in some cases, a panel request that claims a violation of "the relevant 
valuation rules " under all of the different alternative customs valuation methods set forth in Articles  2 
through 7 would not suffice to identify the legal basis of the complaint in a manner "sufficient to 
present the problem clearly ". The reason is that each of Articles 2 (identical goods), 3 (similar 
goods), 5 (deductive value method), and 6 (computed valu e method) provide s for a specific and 
distinct valuation method, and the relationship between these provisions and methods is such that 
the determination of a revised customs value generally cannot be subject to two or more of these 
provisions  simultaneous ly, let alone all of them. Further more, while Article 7 (reasonable flexib ility) 
is, by its nature,  slightly different from other provisions  in that it  allows the use of the valuation 
methods laid down in Articles  1 through 6 with a reasonable flexibility,  it also applies to the exclusion 
of the other methods.152  
7.71.   Having said that, in the circumstances of this case it is not clear what additional degree of 
specificity could reasonably have been expected from the Philippines in terms of identifying the 
"releva nt valuation rules " in Articles 2 through  7 with sufficient  precision, taking into account the 
limited information that was communicated to it regarding the basis for calculating the "actual " 
value/price in the challenged measures.  Therefore, the Panel is not persuaded that the Philippines 
was required to specify which one of the different customs valuation methods in Articles 2 through 
7 constituted the basis of its claim. It sufficed for the panel request to state that the 2002 -2003 
Charges "are inconsist ent with … Articles 2, 3, 4, 5, 6 and 7 of the CVA", without further specification 
as to which of one of these different articles was applicable.  A fortiori , if such specification was not 
required at the level of these different articles, then the Panel is not persuaded that the Philippines 
had to go even further and specify which of the three subparagraphs and obligations within Article  7 
it was invoking.153  
7.72.   For the foregoing reasons, the Panel considers that it is unnecessary to proceed with an  
analysis of whether it is sufficiently clear from the panel request which obligation(s) in Article 7 
would be the one(s) at issue, if the "relevant valuation rules" were those found in Article 7, as 
opposed to Articles 2, 3, 5 or 6 of the CVA. Assuming arguendo  that it is necessary to continue 
further in assessing Thailand 's objection  that the Philippines failed to identify the specific paragraph 
of Article 7 , the Panel consider s that in the circumstances of this case it is sufficiently clear that the 
Philippines ' general reference to "Article 7 " in the panel request would cover a claim under 
Article  7.1. The panel request does not identify any specific paragraph(s) of Article 7 , but this 
becomes apparent from a consideration of the irrelevance of Article 7 .3 in this case, and the nature 
of the interrelationship between Articles 7.1 and 7.2.  
7.73.   The Panel notes that Article 7 of the CVA has three subparagraphs.154 Article 7 .1 is a general 
provision which provides that if the customs value of the imported goods cannot be determined 
under the provisions of Articles 1 through 6, it shall be determined "using reasonable means 
consistent with the principles and general provisions of this Agreement and of Articl e VII of GATT 
1994 and on the basis of data available in the country of importation ". Article 7.2 is the more specific 
provision, as it specifies seven specific bases for customs valuation that are prohibited (e.g. 
minimum customs values), and that may not  be used when applying reasonable flexibilities under 
Article 7.1. The third paragraph then sets forth the procedural obligation that, if the importer so 
requests, it "shall be informed in writing of the customs value determined under the provisions of 
this Article and the method used to determine such value ". 
                                                
150 WT/DS371/22, paras. 14 (second bullet) and 20 (second bullet).  
151 WT/DS371/22, par as. 14 (second bullet) and 20 (third bullet).  
152 Panel Report, Thailand — Cigarettes (Philippines) , para. 7.285.  
153 The Panel notes that the Philippines' panel request in the first recourse to Article 21.5 also advanced 
multiple alternative claims under mut ually exclusive CVA provisions in respect of the 2003 -2006 Charges. 
Specifically, it made alternative claims that the determination of the "actual price" in those Charges was 
inconsistent with Article 2.1, Article 3.1, and Articles 7.1. and 7.2.  
154 The text  of Article 7 is reproduced below at paragraph 7.350.  
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  7.74.   The Panel considers that Article 7.3 is not relevant to the Philippines ' complaint in the 
circumstances of this case.155 As the original panel noted, "the request for information under 
Article  7.3 would  become possible only if the importer was already aware at the time of requesting 
that the customs authority had relied on a valuation method under Article 7. "156 In this case, Article  7 
was raised for the first time by Thailand in the context of this panel proceeding, and the Thai 
authorities never gave any indication to PMTL that they had relied on a valuation method under 
Article 7. Accordingly, there would have been no basis for PMTL to make the kind of request 
contemplated in Article 7.3, and it made no such request. Consequently, there would be no basis for 
the Philippines to make a claim under Article 7.3, or for Thailand to read the reference to Article 7 
as embracing such a claim. This reading is further reinforced by the fact that the ensuing bullet in 
the panel request specifically alleges a violation of the procedural obligation in Article 16 , which is 
similar if not identical to the procedural obligation in Article 7.3.157 It follows that, in the 
circumstances of this case, the general reference to A rticle 7 can only be construed as a reference 
to Article 7.1. and/or Article 7.2.  
7.75.   The Panel considers that the relationship between Article 7.1 and 7.2 is such that a customs 
valuation determination could be claimed to violate Article 7.1 without necessar ily violating any 
provision of Article 7.2. The reason is that subparagraphs (a) through (g) of Article 7.2 do not 
necessarily exhaust the universe of customs valuation bases that are not "reasonable " or "consistent 
with the principles and general provisio ns" of Articles 1 to 7. Accordingly, there could be a stand -
alone claim that a customs valuation determination violates Article 7.1. However, the Panel observes 
that the seven bases for customs valuation identified in subparagraphs (a) through (g) are 
categorically prohibited, which in and of itself implies that they cannot be "reasonable " or "consistent 
with the principles and general provisions " within the meani ng of Article 7.1. This conclusion is 
reinforced by the content of those enumerated bases, which include several bases for customs 
valuation that are inherently prohibited by the basic principles and general provisions of the CVA , 
such as the reliance on m inimum customs values, and "arbitrary or fictitious values ". This suggests 
that any customs valuation determination that is considered to violate Article 7.2 would likely also 
be considered to violate Article 7.1.  
7.76.   Based on this understanding of the relati onship between provisions of Articles 7.1 and 7.2, it 
follows that a claim under the more general provisions of Article 7.1 would not necessarily imply a 
claim under the more specific provisions of Article 7.2, but that a claim under the more specific 
provisions of the latter should almost always be accompanied by, and may presuppose, a violation 
of the general provision of Article 7.1. Based on the foregoing, the Panel considers that the reference 
to Article 7 in the panel request embraces at least a claim  under Article 7.1.  
7.77.   This conclusion is not altered by certain considerations relating to the concise narrative that 
accompanies the listing of Articles 2 to 7 in the panel request. As indicated above, the Philippine s' 
panel request states that the Thai aut horities acted inconsistently with Articles 2 to 7 because they 
"failed to comply with the relevant valuation rules in establishing the alleged 'actual values ' of the 
imported goods ". In this respect, Thailand contends that the phrase "relevant valuation r ules", as 
used in the panel request,  is generic and overly vague , and could cover "not only the various sub -
paragraphs of Article 7, but also all other provisions in Part I of the CVA (that is, Articles 1 – 17)" 
which is titled "Rules on Customs Valuation ".158 The Philippines  argues that Article 7 .1 is the only 
provision setting  forth "affirmative " valuation rules that an authority may use in establishing the 
customs value, and that the phrase "relevant valuation rules " can therefore only refer to that 
paragraph and no other paragraph.159 The Panel is not persuaded by that argument, and considers 
that the phrase "relevant valuation rules " as used in the Philippines ' panel request could  reasonably 
be understood as referring not only to the valuation rules contained in Article 7 .1, but also those 
contained in Article 7.2 . Having said this, the fact that the language of the Philippines ' panel request 
may be read as also referring  to Article 7.2 does not alter the conclusion that the reference to 
                                                
155 The Panel notes that in some prior cases that raised the issue of whether a general reference to a 
provision allowed for the identification of the relevant claims, panels and the Appellate Body have r easoned by 
process of elimination. See e.g. Appellate Body Report, US — Countervailing and Anti -Dumping Measures 
(China) , para. 4.22.  
156 Panel Report, Thailand — Cigarettes (Philippines) , para. 7.394.  
157 Panel Report, Thailand — Cigarettes (Philippines) , para. 7.393.  
158 Thailand's second submission on the scope of the claims, para. 2.26.  
159 Philippines' second submission on the scope of the claims, para. 30.  
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  Article  7 includes a claim under Article 7.1.160 In sum, the Panel considers that, read in light of the 
accompanyi ng narrative, the reference to Article 7 of the CVA necessarily encompasses a claim under 
Article 7.1 of the CVA, whether or not it also encompasses a claim under Article 7.2.  
7.78.   In the light of the fo regoing,  the Panel concludes that the relevant item of the  panel request 
suffices to "provide a brief summary of the legal basis of the complainant sufficient to present the 
problem clearly " for purposes of Article 6.2, and that the Philippines ' alternative claim under 
Article  7.1 falls within  the Panel 's terms of reference.  
7.1.3.3.3.3   Timeliness of the Philippines ' alternative claim  
7.79.   Thailand maintains that even to the extent that any claims by the Philippines under Article 7 
of the CVA could be said to validly be within the Panel 's terms of reference, the Philippines  has in 
any case failed to advance such claims in a timely manner and cannot therefore be considered to 
have made a timely prima facie case in this respect. As the Panel understands it,  in Thailand 's view, 
the Philippines was in possession of enough inform ation, from the beginning of the dispute, to be 
able to raise claims  under Article 7 in its panel request, and develop arguments in support of its 
claims in  its first and second written submissions , but the Philippines failed to do so.  For its part, the 
Philippines responds that it : (1) included a claim under Article 7.1 in its panel request;  (2) set forth 
supporting arguments in its second written submission, and indicates  that it had not been able to 
do so earlier, that is in its first written submission,  because at that time "the available evidence did 
not warrant making arguments under Article 7.1 "161, and ( 3) asserted in its responses to the Panel 's 
questions that the Panel could address claims under both Articles 6 and 7 because both provisions 
were part of the Panel 's terms of reference.162 
7.80.   The Panel recalls  that, as explained above, despite an adequate identification of a claim in a 
panel request, a panel may refrain from ruling on that claim in circumstances where it is shown that 
doing so would have  the effect of breaching the requirements of due process owed to the respondent. 
This could be the case where , as a result of the complainant failing to articulate the claim in a clear 
and timely manner, the respondent is not afforded a meaningful opportun ity to respond adequately 
to the claim . The Panel will sequentially consider the following questions on which  the parties appear 
to disagree: first, when was the Philippines in a position to advance a claim and rais e arguments 
under Article 7.1? S econd, at  what stage of these proceedings did the Philippines actually raise its 
claim under Article 7.1  and advance relevant supporting arguments ? Addressing these questions will 
enable the Panel to assess whether the Philippines raising its claim and advancing it s arguments in 
the manner that it did resulted in Thailand being deprived of a meaningful opportunity to respond 
and thereby violating Thailand 's due process rights.   
7.81.   The Panel recalls the following chronology of events which form the factual background 
pertaining to the evolution of the Philippines ' claims regarding Articles 6 and 7 in this proceeding:  
a. After the issuance of the MoA leading to the 2002 –2003 Charges on 22 September 
2016, and also after the issuance of the 1,052 revised NoAs on 29 November 2 017, 
PMTL wrote to the relevant authorities (the DSI and the Public Prosecutor for the 
                                                
160 In US — Countervailing and Anti -Dumping Measures (China) , the panel request alleged a violation of 
"Article 19" of the SCM Agreement, without identifying which of its four subparagraphs and obligations was at 
issue. The panel considered that Articles 19.1 and 19.2 were irrelevant, and that the two "potentially relevant 
obligations" were those set forth in Articles 19.3 and 19.4. The panel then proceeded to infer from certain 
elements of the panel request that Article 19.4 should also be excluded from consideration. On appeal, the 
Appellate Body upheld the panel's finding that the respondent could reasonably  infer from the reference to 
Article 19 that the complaining party was making a claim under Article 19.3, but the Appellate Body disagreed 
with the panel's conclusion that the reference to Article 19 could not be read as potentially also extending to 
Article 19.4. The Appellate Body did not consider it necessary to resolve the question of whether the reference 
to Article 19 covered only Article 19.3, or also Article 19.4. Evidently, the Appellate Body did not consider the 
lack of resolution of that question  an impediment to the conclusion that the reference to Article 19 included, at 
minimum, a claim under Article 19.3. (See Appellate Bod Report, US — Countervailing and Anti -Dumping 
Measures (China) , para. 4.43 -4.44.)  
161 Philippines' second submission on the scope of the claims, para. 48.  
162 Philippines' first submission on the scope of the claims, para. 50.  
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  Charges and the Customs Department for the revised NoAs)163, requesting in each 
instance explanations as to the reasons behind the rejection of the transaction values 
and the basis for calculating the alternative actual customs values. In their respective 
responses to PMTL 's letters, the DSI and the Public Prosecutor on the one hand164, and 
the Customs Department on the other hand165, do not appear to have provided any of 
the explanations requested by PM TL. 
b. In its panel request, the Philippines stated that the 1,052 revised NoAs and the 2002 -
2003 Charges are inconsistent with, inter alia , the relevant valuation rules in Articles 2 
to 7 of the CVA because Thailand failed to comply with the relevant valuation rules in 
establishing the alleged actual values.166 
c. In its first written submission, the Philippines argued that both the Customs Department 
and the Public Prosecutor violated Article 6 of the CVA by determining the actual 
customs value through improper use of the co mputed value method.167 The Philippines 
referred to the obligation in Article 7.1 and 7.2 as relevant context for its claims under 
Articles 1.2(a) and 6, but did not assert any separate, alternative claim of violation 
under Article 7.168 
d. In response to the Phi lippines ' claim and arguments concerning Article 6, Thailand 
responded , in its first written submission, that its authorities  determined the customs 
value by "appl[ying] the computed value method" with "a reasonable flexibility " 
provided for under Article 7, and that "by acting consistently with Article 7.1 of the CVA, 
the Prosecutor [and the Customs Department] [did] not contravene Article 6 of the 
CVA".169 Thailand responded to Philippines ' claims regarding the sequential application 
of customs valuation me thods that "none of the alternative methods in Articles 2 -5 could 
be used to determine customs value "170, implying that any revised value had been 
determined under Article 6, and not Article 7.  
e. In response to Thailand raising Article 7, the Philippines argued in its second written 
submission, that it is impermissible to import the "reasonable flexibility " of Article 7 into 
Article 6, and in any event neither the Public Prosecutor nor the Customs Department 
used "reasonable flexibility " in determining the customs value.171 The Philippines still 
understood Thailand to be arguing that the "reasonable flexibility " of Article 7 could be 
imported into Article 6, and thus developed these arguments in the c ontext of advancing 
its claim of inconsistency under Article 6.172 
f. In its second written submission, Thailand restated its position that the 2002 -2003 
Charges "are not inconsistent with Article 6 because the method of valuation used by 
                                                
163 In relation to the 2002 -2003 Charges, PMTL sent letters to the DSI on 7 and 28 October 2016 and to 
the Public Prosecutor on 14 November 2016. In relatio n to the 1,052 revised NoAs, PMTL wrote to the Customs 
Department on 14 December 2017 and 25 January 2018.  
164 In relation to the 2002 -2003 Charges, the DSI in its response to PMTL dated 3 November 2016 
stated that its legal actions against PMTL were lawful and directed PMTL to the Public Prosecutor for further 
information; and the Public Prosecutor in its response to PMTL dated 8 December 2016 indicated that the 
matter was under review. (Letter from the DSI to PMTL, 3 November 2016 (English translation), (Ex hibit PHL -
276-B); and Letter from the Public Prosecutor to PMTL, 8 December 2016 (English translation), (Exhibit PHL -
243-B)) 
165 In relation to the 1,052 revised NoAs, the Customs Department, in its response of 10 January 2018, 
indicated that the "[DSI] prep ared the table summarizing the CIF prices … for the Customs Department to 
assess the value and calculate the taxes and duty which were not fully paid" and advised PMTL to inquire 
directly from DSI for relevant information. (Letter from the Customs Departme nt to PMTL, 10 January 2018 
(English translation), (Exhibit PHL -250-B).) 
166 WT/DS371/22, paras. 14 and 20.  
167 Philippines' first written submission, sections IV.B.4 and V.B.5.  
168 Philippines' first written submission, paras. 213 and 256, and footnotes 160 and 199.  
169 Thailand's first written submission, section 3.4.4.  
170 Thailand's first written submission, para. 3.102; Thailand's second written submission, para. 3.74. 
(emphasis add ed) 
171 Philippines' second written submission, sections III.B.3 and IV.C.3.  
172 Philippines' second written submission, para. 205.  
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  the Public Prosecutor falls under Article 7 of the CVA ".173 Thailand reiterated its 
arguments as to why, in its view, the Public Prosecutor "applied the computed value 
method with a reasonable flexibility that consists of relying on information provided by 
Indonesian authorities without subsequently verifying it ".174 On that basis, Thailand 
concluded that the Panel should find that the 20 02-2003 Charges "are not inconsistent 
with Article 6 of the CVA ".175 
g. In a set of written questions which the Panel sent to the parties in advance of the 
hearing, the Panel solicited the parties ' views on the appropriateness of the Panel 
making alternative findings under Articles 6 and 7 and the scope of the parties ' claims 
and defences under those provisions:  
i. In its responses to these questi ons, the Philippines affirmed that ( 1) there are 
fundamental obligations regarding the required nature and quality of cost and 
profit information used for customs valuation purposes that "apply equally to 
determinations made under Articles 1.1, 1.2(a), 6 a nd 7", and that the CK -21A 
information "cannot be a basis for a proper valuat ion under Article 6 (or 
Article  7)"176; (2) the Thai authorities rejected PMTL 's (declared) transaction 
values, and/or determined a revised customs value, based on "the price of goods 
on the domestic market of the country of exportation " within the meaning of 
Article  7.2(c)177; and ( 3) as the Panel 's terms of refe rence included claims under 
both Articles 6 and 7 of the CVA and as the Philippines had made and argued a 
claim under each provision, the Panel could make alternative findings under the 
two provisions if it considers that it is unclear which of these two provisions was 
applied.178  
ii. In response to a question asking Thailand to clarify whether its arguments on the 
"reasonable flexibility " in Article 7 should be taken to mean that Thailand was 
acknowledging that any customs valuation determination reflected in the 
measures was incons istent with Article 6, Thailand stated that "the valuation 
decision was made under Article 7.1.  The WTO -consistency of the valuation must 
be assessed under Article 7.1, not Article 6 ."179 
h. At the substantive meeting of 29 October 2018, the Philippines stated in its opening and 
closing statements that the 1,052 revised NoAs and the 2002 -2003 Charges violate 
Articles 1.1, 1.2(a), 6, and 7 of the CVA and explained, inter alia , that the flexibilities 
in Article 7.1 do not extend to allowing the use of the valuatio n methods prohibited in 
Article 7.2.180 This led Thailand to object, at the hearing, to the Philippines ' reference 
to a claim under Article 7, on the grounds that it was untimely and not adequately 
specified in the panel request.  
7.82.   Thus, the first  indication that the Thai authorities may have used Article 7 as the basis for 
valuing the imported goods , or otherwise considered Article 7 relevant,  appeared in Thailand 's first 
written submission. Prior to that point, all that had been explained to the importer was that the 
determination of the actual values was based on "the cigarette cost structure of PT Philip Morris 
Indonesia ". In the Panel 's view, it is difficult to see in this explanation any indication on the part of 
the Thai authorities that they  had resorted to Article 7.1, such that that the Philippines would have 
been provided with a basis for asserting a claim and supporting arguments under that provision , 
separate from its claim and supporting arguments under Article 6 . In these circumstances , the 
Philippines cannot reasonably be said to have been in a position to assert a claim and advance 
arguments under Article 7.1 at the time it submitted its first w ritten submission.  
                                                
173 Thailand's second written submission, para. 3.79.  
174 Thailand's second written submission, para. 3.79.  
175 Thailand's second written submission para. 3.81.  
176 Philippines' response to Panel question No. 141, paras. 115 and 117.  
177 Philippines' response to Panel question No. 146.  
178 Philippines' response to Panel  question No. 157.  
179 Thailand's response to Panel question No. 156, para. 8.1.  
180 Philippines' opening statement at the meeting of the Panel, paras. 84 -88; and closing statement at 
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  7.83.   After being made aware through Thailand 's first written submission that Thailand was relying 
on Article 7.1, the Philippines, in its second written submission, objected to Thailand 's reliance on 
Article 7.1  by claiming that the "specific flexibility " invoked by Thailand does not fall within the 
meaning of "reasonable flexibili ty" as envisaged by Article 7 , and the Philippines provided  detailed 
arguments  as to why Thailand 's customs valuation determinations could not be justified under Article 
7.1. It did so in the context of setting out its claim under Article 6 . Specifically,  in section III.B.3 of 
its second written submission, the Philippines first  set out its interpretation of the term "reasonable 
flexibility " by formulating what it views as the proper legal standard under Article 7. The Philippines 
then proceed ed to apply the legal standard  to the facts of this case  in order to reach the conclusion 
that, by relying on CK -21A information that was not subsequently verified in terms of its accuracy, 
the Thai Customs Department did not use "reasonable flexibility " within the mea ning of Article 7.   
7.84.   While recognizing that the Philippines presented these detailed arguments on Article 7.1 in 
the context of substantiating its claim under Article 6, apparently on the understanding that 
Thailand 's argumentation aimed to read the flexibi lities of Article 7 into Article 6, t he Panel considers 
that it would be putting form over substance to conclude that section III.B.3 of the Philippines ' 
second written submission is not tantamount to a properly articulated and argued claim of  
inconsisten cy with Article 7.1. That th is claim and its supporting arguments are made by the 
Philippines in the context of demonstrating that the Customs Department violated Article  6, as 
highlighted by Thailand181, does not, in the Panel 's view, take away from the fact  that they purport 
to demonstrate , on an arguendo  basis and in the alternative, that the customs valuation 
determinations reflected in the 2002 -2003 Charges and the 1,052 revised NoAs are also not 
consistent with the methodology in Article 7.1. Moreover,  while the Philippines does not explicitly 
request  the Panel  to make findings in respect of its claim under Article 7 in its second written 
submission, it subsequently reaffirms in its written responses to questions from the Panel  that since 
it had made and argued claims  under  both Articles 6 and 7, the Panel could make alternative findings 
under each provision.182 In the light of the foregoing, the Panel con siders  that the Philippines  
effectively  asserted its claim under Article 7.1  and adduced supporting arguments in its second 
written submission, which was the earliest possible opportunity for doing so, and  reaffirmed its 
request for alternative findings under that provision in its responses to questions from the Panel.  
7.85.   The Panel has explained above that a respondent 's due process right would be breached, inter 
alia, in situations where the respondent is not afforded an opportunity to respond to a claim raised 
against it. In the circumstances of this  case, the Panel does not consid er that Thailand 's due process 
rights would be violated if the Panel were to rule on  the Philippines ' alternative claim under Article 
7.1 of the CVA. As the Panel has made clear above, the Philippines has adequately included in its 
panel request a claim un der Article 7 , which the Philippines asserted and supported with arguments 
in its second written submission, and which the Philippines clarified  was an alternative claim that 
could be the subject of alternative findings by the Panel.   
7.86.   While it may  in gener al be desirable that  a complainant assert all claims and  advance all 
pertinent arguments in its first written submission so as to allow the respondent  to respond to them 
as early as possible, nothing  in the DSU or in WTO practice requires this in all cases . In the 
circumstances of this case, the Philippines was arguably not in any position to do so.  Of greater 
importance, however, is the fact that  Thailand still had ample opportunity to address the Philippine 's 
detailed argumentation under Article 7.1  in its own second written submission, in its responses to 
the pre -hearing written questions from the Panel, at the hearing  with the Panel , and in its responses 
to the Panel 's post -hearing questions . In these circumstances, the Pan el is of the view that Thailand 's 
due process rights would not be breached  if it were to entertain the Philippines ' alternative claim 
under Article 7.1 . Indeed, it was Thailand, not the Philippines, that sought to rely on Article 7 in the 
first place.  
7.87.   This conclusion is reinforced by  another consideration. There has been a persistent ambiguity 
in Thailand 's position, apparently linked to its uncertainty as to whether there is any clear binary 
distinction between the methods under Articles 6 and 7,  and as a result  it is actually still not  clear 
whether it is of the view that any customs valuation determination made by its authorities was made 
on the basis of Article 6, or instead on the basis of Article 7. In its responses to the post -hearing 
questions sent by the Panel, Thailand formulate d its position in terms that circled back to the idea 
                                                
181 Thailand's second submission on the sc ope of the claims, para. 2.14.  
182 Philippines' response to Panel question No. 157.  
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  that any revised customs value was determined on the basis o f Article 6, incorporating the 
reasonable flexibilities of Article 7. It state d that the authorities "applied the computed method under 
Article 6, taking advantage of the flexibilities allowed under Article 7.1 "183; and that as it "has 
previously explained, the values were calculated on the basis of the methodology in Article 6, using 
the flexibilities allowed  under Article 7.1 ".184 In its comments on the Interim Report, Thailand stated 
that it "repeatedly (and accurately) described the determination as having been made using the 
Article 6 method as a base and using the flexibilities under Article 7", and "made clear that it was 
for the Panel to deci de whether, as a legal matter, such a determination should be characterized as 
made under Article 6 or Article 7" .185 Given the way that Thailand's arguments on this issue have 
unfolded – including its apparent uncertainty of the existence of any clear binar y distinction between 
the methods under Articles 6 and 7 – the Panel does not consider that Thailand 's due process rights 
would be violated if the Panel were to rule on the Philippines' alternative claim under Article 7.1 of 
the CVA.  
7.1.3.3.4   Conclusion  
7.88.   For these reasons, leaving aside whether the Thai authorities ' determination of the "actual " 
value /price  of PMTL 's imports is governed, as claimed by the Philippines, by the provisions of Article  6 
of the CVA concerning the computed value method or is instead  determined using the reasonable 
flexibilities prov ided for  in Article 7 as Thailand seems to assert , the Panel concludes that the 
Philippines ' alternative claim under Article 7.1 falls within the Panel 's terms of reference, and is 
properly before the Pane l.  
7.1.3.4   The Philippines ' standing to challenge measures concerning PMTL 's imports from 
Indonesia  
7.89.   While some of the measures at issue in the original proceeding and the first recourse to Article 
21.5 concerned imports into Thailand from the Philippines , the me asures at issue in this proceeding 
relate exclusi vely to cigarettes that PMTL import ed from Indonesia. The Panel asked Thailand 
whether it accepts that the Philippines has standing t o challenge the measures , notwithstanding tha t 
they pertain exclusively to entries that PMTL imported into Thailand from the supplier based in 
Indonesia. Thailand responded that "this is a matter for the Panel to resolve concerning its 
jurisdiction, in light of the existing jurisprudence ".186 In the light of Thailand 's response, and given 
that a p anel must  consider on its own initiative any issues of jur isdiction , and any other issues of a 
"fundamental nature"187, the Panel address es this issue below.  
7.90.   The Appellate Body in EC – Bananas III  considered the issue of whether the United States, 
which did not at the time export bananas,  had "standing " to bring a claim under the GATT a gainst 
the European Communities.  The Appellate Body observed that "neither Article 3.3 nor 3.7 of the 
DSU nor any other provision of the DSU contain any explicit requirement that a Member must have 
a 'legal interest ' as a prerequisite for requesting a panel ", and further stated that it did "not accept 
that the need for a 'legal interest ' is implied in the DSU ".188 The Appellate Body further considered 
that there was no general rule under international law requiring that a complaining party must have 
a "legal interest "189, and that the language of both Article XXIII:1 of the GA TT 1994 and Article 3.7 
of the DSU suggests that a Member "has broad discretion in deciding whether to bring a  case against 
another Member under the DSU ".190  
                                                
183 Thailand's response to Panel question No. 167, para. 4.2.  
184 Thailand's response to Panel question No. 169, para. 5.4.  
185 Thailand's request to review the Interim Report, par a. 2.12.  
186 Thailand's response to Panel question No. 159, para. 1.3.  
187 The Appellate Body has referred to "certain issues of a fundamental nature" that a panel must deal 
with, if necessary on its own motion, in order to satisfy itself that it has the "aut hority" to proceed. (Appellate 
Body Report, Mexico – Corn Syrup (Article 21.5 – United States) , para. 36.) As the Appellate Body has 
observed with respect to jurisdictional issues in particular, "it is a widely accepted rule that an international 
tribunal is entitled to consider the issue of its own jurisdiction on its own initiative, and to satisfy itself that it 
has jurisdiction in any case that comes before it". ( Appellate Body Report, US – 1916 Act , footnote 30) See 
also Decision by the Arbitrator, US – COOL (Article 22.6 – United States) , paras. 2.6-2.7. 
188 Appellate Body Report, EC – Bananas III , para.  132. 
189 Appellate Body Report, EC – Bananas III , para.  133.  
190 Appellate Body Report, EC – Bananas III , paras.  134-135. 
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  7.91.   In any event, the Appellate Body then stated its view that , on the facts of the case, the United 
States was "justified in bringing its claims under the GATT  1994 in this case ", taking into account 
that "[t]he United States is a producer of bananas, and a potential export interest by the United 
States cannot be excluded ".191 The Appellate Body added that "[t]he internal market of the United 
States for bananas could be affected by the EC banana regime, in particular, by the effects of that 
regime on world supplies and world prices of bananas ".192 The Appellate Body also agreed with the 
panel 's statement that "with the increased interdependence of the global economy, ... Members 
have a greater stake in enforcing WTO rules than in the past since any deviation from  the negotiated 
balance of rights and obligations is more likely than ever to affect them, directly o r indirectly ".193  
7.92.   In several subsequent proceedings where similar issues were raised, panels have concluded 
that the complaining Member had the requisite interest to initiate proceedings despite the apparent 
absence of any exports of the product(s) at issue to the territory  of the responding Member. For 
example, in Colombia – Ports of Entry , the panel ruled that "Panama currently produces apparel for 
export, has stated its interest in exporting domestically produced footwear and other apparel in the 
future, and stated its potential  to manufacture textiles in the future. In the Panel 's view, Panama 
has sufficiently demonstrated its interest in a determination of rights and obligations under the WTO 
Agreement. "194 
7.93.   The measures at issue relate to the valuation of goods for purpose s of levying ad valorem  
duties on PMTL 's imports of Marlboro  and L&M cigarettes.  PMTL currently imports substantial 
volumes of Marlboro  and L&M cigarettes  into Thailand from the Philippines. These imports are 
subjected to customs valuation determination s by the Thai authorities on a recurring basis. Thus, 
any measure that relates to customs valuation practices affecting  the Thai importer that now sources 
from the Philippines has the very real potential to affect future exports of cigarettes from the 
Philipp ines to Thailand. Insofar as these measures threaten the continued viability of PMTL 's 
operations in Thailand, then they have the potential to end  or otherwise impair  exports of cigarettes 
from the Philippines to Thailand.195  
7.94.   The Panel  further note s that the parties ' claims and defences relating to the 2002 -2003 
Charges in this proceeding could be said to be inextricably interwoven with their arguments relating 
to the 2003 -2006 Charges at issue in the first compliance proceeding, which cover imports from the 
Philippines. In EC – Bananas III , the Appellate Body 's analysis of the United States ' standing to 
challenge the EC measures at issue appeared to accord some weight to the fact that  "there is no 
challenge here to the standing of the United States u nder the GATS, and that the claims under the 
GATS and the GATT 1994 relating to the EC import licensing regime are inextricably interwoven in 
this case ".196 
7.95.   The Panel concludes that these factual circumstances more than suffice to establish that the 
Philippi nes has standing to challenge the 2002 -2003 Charges and the 1,052 revised NoAs, 
notwithstanding that they concern imports into Thailand from Indonesia , and not the Philippines .  
7.1.4   Relevance of the presumption of good faith on the part of Thailand and its 
authorities  
7.1.4.1   Introduction  
7.96.   In the original proceeding, the panel stated that it presumed good faith on the part of Thailand 
and its authorities. It referred to prior pronouncements that panels should "assume that WTO 
Members will perform their treaty obligations in good faith, as th ey are required to do by the WTO 
                                                
191 Appellate Body Report, EC – Bananas III , para.  136. 
192 Appellate Body Report, EC – Bananas III , para. 136.  
193 Appellate Body Report, EC – Bananas III , para. 136 (referring to Panel Reports, EC – Bananas III , 
para. 7.50).  
194 Panel Report, Colombia – Ports of  Entry , para. 7.329. See also Panel Reports, EC – Bananas III 
(Article 21.5 – US), para. 7.34; and Korea – Dairy , para.  7.13. 
195 As the Philippines puts it, "[a]lthough the entries at issue in these proceedings are historical, the 
measures target an importe r that now sources from the Philippines. The latest measures threaten the viability 
of the importer's operations in Thailand, and leave the Philippines with no choice but to initiate these second 
compliance proceedings." (Philippines' first written submiss ion, para. 10.)  
196 Appellate Body Report, EC – Bananas III , para. 137.  
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  Agreement and by international law "197, and that it "is implicit from the duty to perform treaty 
obligations in good faith that a party to an international agreement should be deemed to have acted 
in good faith in the perform ance of its treaty obligations ".198  
7.97.   The panel 's analysis of several issues was informed by consideration of good faith. It referred 
to "good faith " efforts in the context of the interactions between the importer and the customs 
administration199, and t o the presumption of good faith in the context of assessing the likelihood of 
a respondent reintroducing a withdrawn measure.200 It also referred to the presumption of good 
faith on the part of Thai authorities in the context of assessing the likelihood of their administering 
regulations in a biased manner, and concluded that  "[i]n the absence of solid evidence to prove the 
contrary, there is no reason to assume that TTM directors, who are Thai government officials, would 
act in contradiction to their WTO obl igations. "201  
7.98.   The concept of good faith also figured prominently in the Panel Report in the first recourse to 
Article 21.5. Most notably, the Panel addressed at some length Thailand 's argument that the 
Philippines failed to engage in WTO dispute settlement procedures in "good faith " as required by 
Article 3.10 of the DSU when it submitted a legal opinion prepared by Thailand 's defence counsel.202 
As with the original panel, it also referred to good faith efforts in the context of the interactions 
between the i mporter and the customs administration.203 
7.99.   In its submissions in this second recourse to Article 21.5, Thailand has argued that i t is entitled 
to a presumption that it will perform it s WTO obligations in good faith, and it has stressed that CVA 
obligations m ust be interpreted in good faith.  There are two issues related to the presumption of 
good faith on the part of Thailand and its authorities that the Panel considers would be best 
addressed at the outset because of their fundamental nature . These are addressed below.  
7.1.4.2   Relevance of the presumption of good faith to accepting the  veracity  of Thailand 's 
representations  
7.100.   The Philippines ' claims under the CVA are premised on the understanding that the Thai 
authorities relied on pricing and cost information reported by PM Indonesia in the CK -21A form s to 
determine the "actual price " in the 200 2-2003 Charges and the "actual value " in the 1,052 revised 
NoAs. Thailand has repeatedly represented to the Panel that its authorities did indeed rely on the 
pricing and cost information reported by PM Indonesia in the CK -21A forms to determine the "actual 
price" in the 2002 -2003 Charges and the 1,052 revised NoAs . In the course of the proceeding the 
Philippines raised doubts about whether Thailand had actually received all the information contained 
in CK-21A forms  from Indonesia. However, t he Philippines accepts that Thailand "had certain  pricing 
and cost information  reported by PM Indonesia to the Indonesian government in CK -21A forms" , 
and that "[a]lthough the precise nature of this information is unclear, the evidence shows that this 
information enabled Thailand to construct aggregate production costs, based on the  producer's HJE 
retail selling price, the Indonesian taxes due on that price, and a standard amount for the costs and 
profits of others in the supply chain".204 
7.101.   The Philippines ' doubts about the nature of the CK -21A information received arose from its 
discov ery of  an official statement from Indonesia 's Ministry of Law and Human Rights relating to 
                                                
197 Panel Report, Thailand – Cigarettes (Philippines) , footnote 448 (referring to Panel Report, Argentina 
– Textiles and Apparel , para. 6.14.)  
198 Panel Report, Thailand – Cigarettes (Philippines) , footnote 1543 (referring to Panel Report, US – 
Continued Suspension , para. 7.317.)  
199 Panel Report, Thailand – Cigarettes (Philippines) , paras. 7.172 and 7.176.  
200 Panel Report, Thailand – Cigarettes (Philippines) , footnote 448 (ref erring to Panel Report, Argentina 
– Textiles and Apparel , para. 6.14.)  
201 Panel Report, Thailand – Cigarettes (Philippines) , footnote 1543.  
202 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , Section 7.1.3 (The 
ACWL/Commerce letters and lawyer -client privilege), including in particular paras. 7.29, 7.32, 7.34, 7.41, 
7.49, and 7.56.  
203 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.106, 7.250, 
7.308, 7 .309, 7.332, and footnote 439.  
204 However, the Philippines "does not accept, without evidence, that Thailand had access to all of the 
information reported by the Indonesian producer in any CK -21A form from the relevant period". (Philippines' 
request to revi ew the Interim Report, paras. 72 and 75.)  
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  Thailand 's request for CK -21A information.205 The Ministry 's statement describes, in some detail, the 
information that the Government of Indonesia was, and was no t, able to share with Thailand. It 
specifically states that Indonesia could not provide Thailand with PM Indonesia 's CK-21A information 
for Marlboro , for 1999 -2003, because the documents had been destroyed  pursuant to Indonesia 's 
10-year record -keeping req uirements.206 In the Philippines ' view, the Ministry 's statement raises 
questions about the information that Thailand purportedly obtained fro m the Government of 
Indonesia. These doubts motivated the Philippines ' request that the Panel exercise its discretio n, 
pursuant to Article 13 of the DSU, to ask Thailand to provide copies of the CK -21A information, and 
related communications, that the Indonesian officials allegedly provided to their Thai counterparts.  
7.102.   After hearing from the parties on this issue at the  substantive meeting, the Panel informed 
the parties of its decision to decline the Philippines ' request that the Panel exercise its authority 
pursuant to Article 13 of the DSU to seek the further information identified by the Philippi nes 
regarding the CK -21A forms, and that the Panel therefore consider ed it unnecessary to mediate the 
parties ' disagreement on the scope of any ancillary confidentiality procedures.207 In that 
communication, the Panel indicated in general terms why it did not consider that acces s to the 
information referred to by the Philippines is necessary for the Panel to make an objective assessment 
of the matter before it, but noted that it would elaborate on the reasons in the Report.  
7.103.   The Panel elaborates its reasons as follows. First, as already indicated in its earlier 
communication, the Philippines ' own claims under the CVA are premised on the understanding that 
the Thai authorities relied on pricing  and cost information reported by PM Indonesia in the CK -21A 
forms to determine the "actual price " in the 2002 -2003 Charges and the "actual value " in the 1,052 
revised NoAs, and Thailand has repeatedly represented to the Panel that this understanding is 
correct. Consistent with this understanding, the Philippines confirmed that the copies o f the CK -21A 
information and related communications would only serve to substantiate assertions that Thailand  
has made, but that the information is not necessary for the Philippines to make its own prima facie  
case.  
7.104.   The Panel did not consider it necessary  to exercise its authority to verify factual issues that 
are not in dispute between the parties. While a panel 's conclusions on questions of law, legal 
interpretation and the proper legal characterization of measures are not controlled by the concurring 
positions or shared assumptions of the parties208, with regard to questions of fact "[i]t is usual 
practice for domestic and international legal tribunals, including GATT panels, to consider that, if a 
party admits a particular fact, the judge may be entitled to consider such fact as accurate. "209 In 
this connection, the Panel notes that the present case is distinguishable from Canada – Aircraft . In 
that case, Canada chose to defend its challenged measures only on the question of export 
contingency, and presented  no defence on the issue of subsidization, and argued that the panel was 
wrong to request the production of evidence in respect of the issue of subsidization as it related  to 
a defence that Canada had not made. The panel explained that it was appropriate t o seek information 
on subsidization because Canada had expressly stated that it did not admit that the relevant 
measures constituted subsidies.210 In the  present case, in contrast, Thailand has confirmed, 
repeatedly, that the Philippines is correct in its as sertion that the Thai authorities relied on the 
information contained in the CK -21A forms to determine the "actual " price/value of PMTL 's imports.  
7.105.   Having said that, the Panel ' decision not to request documentation verifying the veracity of 
Thailand 's assertions was not based solely on the fact that Thailand 's representations aligned with 
                                                
205 Official Statement from the Indonesian Ministry of Law and Human Rights dated 13 May 2016 
(English translation), (Exhibit PHL -295-B). 
206 Official Statement from the Indonesian Ministry of Law and Human Rights date d 13 May 2016 
(English translation), (Exhibit PHL -295-B), para. 4.  
207 See section 1.4.3.2 above.  
208 See e.g. Appellate Body Reports, Brazil – Taxation , para. 5.171; Panel and Appellate Body Reports, 
Indonesia – Iron or Steel Products (Viet Nam) , paras. 7.10 and 5.33, respectively.   
209 Panel Report, US – Shrimp , para. 7.15. This is not to suggest either that the absence of a 
disagreement between the parties on a question of fact is always controlling, or that the usual practice of 
accepting undisputed facts pre cludes a panel from seeking evidence of that fact, or from making further 
inquiries. The Appellate Body has observed that "a panel is not precluded from objectively determining the 
accuracy of a factual assertion even when it is not disputed between the pa rties". (Appellate Body Report, 
Korea – Radionuclides (Japan) , para. 5.181.)  
210 Panel Report, Canada – Aircraft , paras. 9.79 -9.83.  
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  the assumptions underlying the Philippines ' own claims. Rather, in the light of the presumption of 
good faith on the part of Thailand, the Panel accepts the veracity  of Thailand 's representations that 
its authorities received pricing and cost information reported by PM Indonesia in the CK -21A forms . 
The Panel considers it useful to elaborate briefly on this point given the Philippines ' continued doubts 
about the Thai authorities ' access to the CK -21A information.211 
7.106.   Article 3.10 of the DSU establishes that "all Members will engage in these procedures in good 
faith in an effort to resolve the dispute ". The Panel considers that a Member would clearly fall short 
of engaging in WTO dispute settlement procedures in "good faith " if, as either a complaining or 
responding party, it were to fabricate evidence o r misrepresent facts of which it possesses exclusive 
knowledge in such a way as to induce a panel to rely on those representations for the purpose of 
making findings that rest on an incorrect factual basis.212 Accordingly, the Panel considers that the 
presum ption that Members engage in WTO dispute settlement procedures in good faith establishes 
a high threshold for questioning the veracity of  such factual representations. This understanding is 
consistent with the approach taken by panels in previous cases, in cluding in the context of a range 
of issues relating to anti -dumping and subsidy measures  involving information solely in the 
possession of the responding Member .213  
7.107.   The Panel has carefully considered the contents of the official statement from Indonesia 's 
Ministry of Law and Human Rights relating to Thailand 's request for CK -21A information , submitted 
by the Philippines as Exhibit PHL -295-B. In this case, Thailand has repeatedly represented that its 
authorities had access to and relied on the p ricing and cost information reported by PM Indonesia in 
the CK -21A forms. Thailand also offered to provide copies of the documents that it had received 
from Indonesia, subject to mutually agreed confidentiality procedures. After the Panel invited 
Thailand to respond to  the issue raised by the Philippines, it explained that Indonesia retained the 
data collected from the forms CK -21A in its databases. Specifically, Thailand explained that:  
a. Thailand is a party to the ASEAN Treaty on Mutual Legal Assistance in Criminal Matt ers 
2004214, which is enacted into Thai law in the Act on Mutual Assistance in Criminal 
Matters B.E. 2535  (1992), as amended in B.E. 2559 (2016)215, and the Regulation of 
the Central Authority on Providing and Seeking Assistance in Criminal Matters B.E. 2537  
(1994).216  
b. Since 2008, Thailand has sought and received the information pertinent to this case 
under the ASEAN Treaty through several mutual assistance requests to the government 
of Indonesia for certain documents, including CK -21A and CK -8 forms, the price 
structure forms, and related laws and regulations with respect to PMTL 's imports of 
cigarettes. Thailand states that it also collected information from "other sources " at that 
time.  
                                                
211 As noted earlier, in its comments on the draft descriptive part of the Report, the Philippines 
considered it appropriate to reflect these doubts by suggesting that the paragraphs containing the Panel's 
description of Thailand's reliance on information obta ined from Indonesian authorities be qualified with phrases 
and terms such as "is said to have", "said to be", "asserted" and "allegedly". The Philippines recalled that 
"although Thailand asserted that this CK -21A information served as the basis for its 'ac tual price' and 'actual 
value', it declined to provide any evidence to support that assertion, despite the Philippines invitation for 
Thailand to do so", and that "[f]ollowing the discovery of the statement by the Government of Indonesia 
contained in Exhib it PHL -295, doubts emerged as to whether Thailand had, in fact, received the alleged CK -21A 
information from Indonesia." (Philippines' comments on the descriptive part of the Panel Report, paras. 6 -7.) 
212 See e.g. Panel Report, US – 1916 Act (Japan) , footno te 422; Panel Report, EC – Asbestos , footnote 3 
to paragraph 7.2.  
213 See e.g. Panel Report, EC – Bed Linen , para. 6.216; Panel Report, EC — Tube or Pipe Fittings , 
para. 7.47; Appellate Body Report, EC — Tube or Pipe Fittings , paras. 122 -128; Appellate Body Report, Russia 
— Commercial Vehicles , paras. 5.120 -5.137; Panel Report, EC – Fasteners (China) , para. 7.214 and footnote 
473; Appellate Body Report, EC – Fasteners (China) , paras. 439 -454; Decision by the Arbitrator, Brazil – 
Aircraft (Article 22.6 – Brazil), para. 2.10 and footnote 15; Panel Report, US – Large Civil Aircraft (2nd 
complaint) (Article 21.5 – EU), para. 7.180 and 8.660.  
214 ASEAN Treaty on Mutual Legal Assistance in Criminal Matters 2004, (Exhibit THA -80). 
215 Act on Mutual Assistance in Crimina l Matters B.E. 2535 (1992) (English translation), (Exhibit THA -
81-B). 
216 Regulation of the Central Authority on Providing and Seeking Assistance in Criminal Matters 
B.E. 2537 (1994), (English translation), (Exhibit THA -82-B). 
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  c. Thailand received responses to these requests in 2010 and 2016 , in which Indonesia 
provided the requested information. In the later responses, Indonesia indicated that 
CK-21A and CK -8 forms were normally destroyed after 10 years; however, Indonesia 
retained the data collected from the forms CK -21A in its databases and was  able to 
share that information in those responses.  
d. To sum up, Thailand obtained the information on which it relied to reconstruct the CIF 
prices contained in Exhibit THA -74 (BCI) from the original source documents and the  
Indonesian government 's own data base of records containing information from those 
forms.217  
7.108.   In these circumstances, and in the light of the presumption of good faith on the part of 
Thailand, the Panel accepts the veracity  of Thailand 's representations  regarding its access to 
information r eported by PM Indonesia in the CK -21A forms . Accordingly, the remainder of the Panel 's 
analysis proceeds on the understanding that the Thai authorities received pricing and cost 
information reported by PM Indonesia in the CK -21A forms, and determined the "actual price " in the 
2002-2003 Charges and the "actual value " in the 1,052 revised NoAs on that basis.  
7.1.4.3   Relevance of the presumption of good faith to the interpretation of CVA 
obligations  
7.109.   Thailand argues that the presumption of good faith on the part of the  Thai authorities (and 
customs authorities in general) sho uld inform the interpretation and application of  CVA obligations  
in cases where the authorities rely, without any further scrutiny, on a company's pricing and cost 
information obtained from foreign governments . The Philippines states that it accepts that a Member 
enjoys a rebuttable presumption that it complies in good fa ith with its treaty obligations218, but 
disagrees with the conclusions that Thailand argues should be drawn from this presumption. In  this 
section, the Panel addresses some of the parties ' arguments on the interpretative consequences that 
flow from the presumption of good faith on the part of customs authorities.  
7.110.   First, Thailand states that an interpretation of CVA obligations that pr esumes good faith on 
the part  of customs authorities in the importing country means that an interpreter "should assume 
that the authority of the importing country will do everything possible to rely on accurate 
information " for customs valuation purposes .219 The Philippines responds that Thailand is wrong  
insofar as it is arguing that the Panel must assume , as an interpretive matter, that an authority has 
in fact  done "everything possible " to meet its CVA obligations .220 
7.111.   The Panel does not understand Thailand 's argument to be that the Panel should simply 
assume, in the face of opposing evidence, that its authorities in fact did everything possible to ensure 
that their determination of the transaction value, examination of the circumstances of sale, and/or 
determ ination of a revised customs value complied with CVA obligations. Insofar as that is what 
Thailand is arguing, then the Panel would disagree for all of the reasons presented by the Philippines 
in rebutting that argument. Rather, the Panel reads Thailand 's argument in conjunction with its wider 
argument that a customs authority enjoys a considerable margin of discretion when determining an 
"all cost plus a profit " benchmark under Paragraph 3 of the Interpretative Note, and need not follow 
to the letter other  CVA disciplines governing the calculation of costs and profit or "the long list of 
obligations suggested by the Philippines ".221 When read in conjunction with that wider argument 
relating to discretion, the Panel understands Thailand to essentially be makin g the point that the 
relevant CVA obligations at issue should be interpreted in a way that preserves and does not hinder 
this discretion, and that one of the reasons why the existence of such discretion is appropriate is 
that a customs authority cannot be presumed to abuse this discretion – rather, it should be assumed 
that the authority of the importing country "will do everything possible to rely on accurate 
information " for customs valuation purposes.   
                                                
217 Thailand's opening statement,  paras. 3.45 -3.49. 
218 Philippines' second written submission, para. 113.  
219 Thailand's first written submission, paras. 3.78 and 3.96.  
220 Philippines' second written submission, paras. 110 -118. 
221 Thailand's first written submission, para. 3.85.  
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  7.112.   Insofar as this reflects a correct understanding of Thailand 's point, the Panel finds it 
unobjectionable. Further above222, the Panel already recalled its general understanding that w here 
the terms of the CVA are generally -worded and do not prescribe any particular means or 
methodology that must be followed i n discharging a substantive and procedural obligation contained 
therein, it would  proceed on the understanding that the domestic customs authorities involved in 
customs valuation "enjoy a margin of discretion regarding the means or methodology that they 
choose to follow, within the parameters laid down in the applicable treaty provisions, read in their 
context and in the light of the object and purpose of the CVA ".223 The Panel observed that this  
understanding "derives from the manner in which the Appellate B ody and previous panels have 
approached generally -worded obligations that do not prescribe a particular means or methodology 
for conducting the analysis, or making the determinations provided for in the WTO agreement in 
question ".224 The Panel considers that  this interpretative approach may also be grounded in a 
presumption of good faith on the part of the domestic authorities whose conduct is regulated by 
those obligations.  
7.113.   Second, Thailand argues that a good faith interpretation of the CVA  should not impose 
"excessive restrictions " on an authority 's "ability to gather information on a producer 's costs and 
profits ".225 The Philippines considers that Thailand 's argument is  confused , because nothing in the 
Philippines ' interpretation would "impose excessive restrictions on the authority 's ability to gather 
information on the  producer 's cost and profits " given that the  Philippines ' position is the CVA "obliges  
an authority to gather actively information on the producer 's costs and profits ".226 
7.114.   The P anel agrees with the general proposition that CVA obligations should not be interpreted 
in a manner that imposes "excessive restrictions " on an authority 's ability to gather information 
necessary to determine the customs value of an importer 's goods, wheth er in the context of 
gathering information relating to a producer 's costs and profits or otherwise. Leaving aside the 
question of what types of restrictions are properly characterized as "excessive ", and whether it is 
necessary to invoke a presumption of g ood faith to sustain the proposition that CVA obligations 
should not be interpreted in a way that imposes excessive restrictions on customs authority, the 
general proposition is unobjectionable.  
7.115.   Indeed, this proposition is already clearly reflected in the Panel 's analysis of several issues 
in the first recourse to Article 21.5 in relation to the Philippines ' claims under both the CVA and the 
GATT 1994. For example, the Panel considered that it "would indeed be an excessive burden to 
impose on a customs authority a requirement to independently identify and examine any and all 
'valid commercial reasons ' that might explain why a particular company is loss -making ", and 
explained how an au thority could proceed  to resolve this kind of issue throug h a process of 
consultation with the importer.227 In this regard, the Panel considered that it would be fully consistent 
with the requirements of the e xamination required by Article 1.2(a) that a customs authority "may 
consider that a company should be exclu ded from the comparator group on the basis that it is loss -
making, and communicate this position to the importer, thereby allowing the importer to explain 
why, in its view, certain companies should nonetheless be included in the comparator group despite 
their loss -making status ".228  
7.116.   Similar considerations informed the Panel 's interpretation of the provisions of the GATT 1994 
which were at issue. For example, in the context of interpreting the pu blication obligation in 
Article  X:1, the Panel considered that:  
[I]mportant limitations are inherent in the concept of an "administrative ruling ". Of 
particular relevance in this case, we consider that for a pronouncement or unwritten 
practice to meet the threshold of qualifying as an "administrative ruling " subject to  the 
publication requirement in Article X:1, it must differ from, or add to, or significantly 
elaborate on published laws, regulations, and rulings. Were it otherwise, Members would 
                                                
222 See paragrap h 7.8 above.  
223 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.82.  
224 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.82.  
225 Thailand's first written submission, para. 3.79.  
226 Philippines' second written submission, paras. 119 -121. 
227 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.171.  
228 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.171.  
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  have to publish, inter alia , every permissible form and modality for compl ying with laws 
and regulations falling within the scope of Article X:1. In our view, an unduly broad 
interpretation of the kinds of measures covered by Article X:1 would entail unduly 
burdensome and unrealistic consequences for Members … .229 
7.117.   Thus, the Panel  considers that CVA obligations should not be interpreted in a manner that 
imposes "excessive restrictions " on an authority 's ability to gather information necessary to 
determine the customs value of an importer 's goods, whether in the context of information relating 
to a producer 's costs and profits or otherwise. The Panel considers this to be an unremarkable 
proposition, and one that is already reflected in the Panel 's own analysis of various issues in first 
recourse to Article 21.5 . 
7.118.   Finally, the  Panel considers Thailand 's argument that under a "good faith " interpretation of 
the CVA, an authority should have "the right to assume  that the information provided by the 
exporting country 's authority is accurate and truthful "230, and it should not be faul ted in a situation 
where a producer would "intentionally submit fabricated information to authorities in the country of 
exportation and, on that basis, later claim that the authority in the country of importation acted 
arbitrarily by relying on that same i nformation ".231 According to the Philippines, Thailand is wrong in 
arguing that a "good faith " interpretation allows a customs administration to "assume " that 
information provided by authorities of the exporting country is reliable for customs valuation 
purposes.232 
7.119.   The Panel 's findings in the fi rst recourse to Article 21.5 confirm that the authority in the 
importing country often has no choice but to rely on the information provided  to it and that the 
importer thus bears a responsibility to provide it with the  information necessary to conduct its 
analysis, and that a customs authority cannot be faulted for relying on the information that the 
importer does, or does not, provide to it. For example, in the course of its analysis of the Philippines ' 
claim under Art icle 1.2(a), second sentence, the Panel stated that because the parties did not dispute 
that a comparison of P&GE rates is, in principle, a valid indicator of whether the relationship 
influenced the price, it considered that any obligation on a customs aut hority to take into account 
additional  information "will depend on the information provided by the importer to the customs 
authority in the context of the consultations ", and that the authority would be under an obligation 
to address such evidence or infor mation only "where an importer provides certain evidence or 
information that is relevant to the examination of the circumstances of sale, be it quantitative or 
qualitative ".233 The Panel proceeded to provide the following illustration:  
For instance, it may be the case that, in examining the circumstances of sale, a customs 
authority considers that the relationship influenced the price on the basis of a purely 
quantitat ive assessment which is in itself a valid indicator, or is suggestive, of whether 
the relationship influenced the price. Once the customs authority has communicated its 
grounds to the importer, as required under Article 1.2(a), third sentence, the importer 
may respond by providing qualitative evidence that is relevant to the examination of 
the circumstances of sale (either directly related to the customs authority 's quantitative 
methodology, or unrelated to that methodology but still relevant to a determination of 
whether the relationship between the buyer and seller influenced the price). In  such a 
situation, if the customs authority failed to take into account such information the 
customs authority would essentially be failing to conduct an examination of the 
circumstances of sale that is apt to reveal whether the relationship influenced the  price. 
However, in a situation where the importer does not provide any relevant qualitative 
information, it would be fully consistent with the requirements of Article 1.2(a) for the 
customs authority to reject the declared transaction value on the basis o f its initial 
grounds.234 
                                                
229 Panel Report,  Thailand – Cigarettes (Philippines) (Article 21.5 – Philippines) , para. 7.886.  
230 Thailand's first written submission, para. 3.79.  
231 Thailand's first written submission, paras. 3.79 -3.80. 
232 Philippines' second written submission, paras. 122 -133. 
233 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.234.  
234 Panel Report, Thailand – Cigarettes (Philippi nes) (Article 21.5 – Philippines) , footnote 592. (emphasis 
original)  
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  7.120.   In the context of its analysis of the Philippines ' claims under Article 5, the Panel similarly 
confirmed that "if an importer fails to provide relevant information to substantiate a requested 
deduction under Article  5.1, the customs  authority cannot be found to have acted inconsistently with 
Article 5.1 for not making the deduction. "235 In this respect, the Panel considered that an "importer 
may, practically speaking, 'waive ' its rights in a particular set of circumstances ".236 In a pass age that 
is highly pertinent to Thailand 's point, the Panel stated that:  
[W]e consider that the customs authority must make its deduction on the basis of the 
information provided by the importer. Furthermore, in a situation where the customs 
authority has doubts about the information provided by the importer, then, in 
accordance with the consultative nature of the process, the customs authority should 
communicate its doubts to the importer and invite the importer to submit additional 
information. We note th at it may so happen that an importer declines to submit the 
necessary evidence, despite a good faith effort by the customs authority to consult with 
the importer. It is entirely plausible that an importer may elect  not to supply such 
information. Furthermo re, in such a situation the importer may explicitly inform the 
customs valuation authority that it does not intend to supply such information. We do 
not consider that a customs authority can be found to have acted inconsistently with its 
obligations under Article 5 in such a situation.  
… the importer itself must approach the customs valuation process in good faith. If an 
importer intends to request (and substantiate) a particular deduction, it must do so 
within a reasonable period of time, sufficient to ena ble the customs authority to operate 
efficiently and effectively. A customs authority could not be found to have acted 
inconsistently with Article 5 for failing to make a deduction in a situation where an 
importer utilizes the flexibilities of the consulta tive customs valuation process to delay 
or frustrate the customs authority 's own rights under the CVA.237 
7.121.   Thus, the Panel agrees in principle that an authority should have "the right to assume  that 
the information provided by the exporting country 's authorit y is accurate and truthful "238, and it 
should not be faulted in a situation where a producer would " intentionally submit fabricated 
information to authorities in the country of exportation and, on that basis, later claim that the 
authority in the country of importation acted arbitrarily by relying on that same information ".239 This 
understanding may be related to considerations of good faith: like the original panel, the Panel in 
the first recourse to Article 21.5 considered that the process of examining the ci rcumstances of sale 
under Article 1.2(a) resembles that of consultation "as both the importer and the customs 
administration respectively need to make a good faith effort on the one hand to provide relevant 
information and on the other hand to provide a reasonable opportunity to the importer to submit 
information and review the information provided in reaching a final determination ".240  
7.122.   However, nothing in the Panel's prior findings implies that an authority could disregard 
relevant information a nd explanations provided by the importer as to the accuracy of information 
before a customs authority. For example , the Panel made clear that when a customs authority 
considers that the relationship influenced the price on the basis of an assessment "which  is in itself 
a valid indicator, or is suggestive"  of whether the relationship influenced the price , if the importer 
responds by providing other evidence that is relevant, in "such a situation, if the customs authority 
fail[s] to take into account such inf ormation the customs authority would essentially be failing to 
conduct an examination of the circumstances of sale that is apt to reveal whether the relationship 
influenced the price".241 
7.123.   The Panel also finds unobjectionable the principle that there are limi tations on the extent to 
which a party may invoke a claim or defence based on factual circumstances that it was responsible 
for creating. Thailand invokes the Factory at Chorzów  case and other international authorities that 
                                                
235 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.307.  
236 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.30 7. 
237 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.308 -7.309.  
238 Thailand's first written submission, para. 3.79.  
239 Thailand's first written submission, paras. 3.79 -3.80. 
240 Panel Report, Thailand – Cigarettes (Phi lippines) , paras. 7.171 -7.172. Panel Report, Thailand – 
Cigarettes (Philippines) (Article 21.5 – Philippines) , para. 7.250.  
241 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , footnote 592.  
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  reflect this equitable maxim242, but the same notion is already to some extent implicit in, and 
assumed by, the Panel's analysis in the first recourse to Article 21.5. For example, in the context of 
its assessment of the Philippines' claim under Article 10 of the CVA  regarding the disclosu re of PMTL's 
confidential information to the media , the Panel concluded that the information concerning PMTL's 
transaction values retained the status of "confidential information", notwithstanding their prior 
disclosure to the press by Thai government offi cials. The Panel reasoned:  
In our view, the prior unauthorized disclosure of PMTL's confidential business 
information by Thai officials does not change the status of that information to non -
confidential, precisely because that prior disclosure was made wit hout PMTL's 
permission. To find otherwise would entail giving an unduly broad meaning to what is 
meant by information "in the public domain", and could lead to the consequence that a 
Member's prior WTO -inconsistent disclosure of business confidential infor mation gives 
it licence to do so again.243 
7.1.4.4   Conclusion  
7.124.   In sum, in the light of the presumption of good faith on the part of Thailand, the Panel 
accepts the veracity  of Thailand's representations regarding its access to the information reported 
by PM Indonesia  in the CK -21A forms. Regarding Thailand's arguments concerning  the relevance of 
good faith to the interpretation of the CVA, the Panel considers that each of the specific points 
considered above, which i n one way or another ostensibly relate to the conseq uences of a 
presumption of good faith to the interpretation and application of CVA obligations, relate to more 
general issues that have already been adequately clarified through the Panel's prior interpretations 
of the CVA. The Panel appreciates that  varying nomenclature can be used to reiterate  the same 
concepts and principles244, but r ather than approaching the disputed points as matters of first 
impression pertaining to interpretative consequences flowing from the presumption of good faith, 
the Panel grounds its analysis in its existing interpretations of the CVA. The Panel sees a potential 
for confusion if, in this second recourse to Article 21.5, it were to present its analysis and conclusion s 
using different terminology and legal concepts to describ e the same general legal requirements 
already articulated in the Report in the first recourse to Article 21.5, or to imply that a different set 
of requirements apply in cases where the authorities rely on pricing and cost information obtained 
from foreign governments . 
7.2  The Thai authorities ' reliance on the information in the CK -21A forms  
7.2.1   Introduction  
7.125.   Both the 2002 -2003 Charges and the 1,052 revised NoAs rest on the same basis, namely 
the calculation, by the DSI, of the actual price/value of PMTL 's imports o f cigarettes over the 2001 -
2003 period. The DSI calculated th is price/value  based on certain pricing and cost information 
reported by the producer and seller of the cigarettes at issue, PM  Indonesia, to Indonesian tax 
authorities in the CK -21A form.  
7.126.   The Philippines advances distinct substantive claims under Articles 1.1, 1.2(a) second 
sentence, 6 and 7 of the CVA, and requests distinct findings in respect of each of its substantive 
claims. In addition, the Philippines has set out its legal claims rega rding the 2002 -2003 Charges and 
1,052 revised NoAs in separate sections of its submissions, notwithstanding that its legal claims and 
supporting arguments are largely identical.  
7.127.   However,  the Philippines considers that the Thai authorities ' reliance on the  CK-21A forms 
violate fundamental CVA principles over an "overarching nature " regarding the required "nature and 
quality of cost and profit information used for customs valuation purposes [that] apply equally to 
                                                
242 See above, paragraph 7.44.  
243 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.770.  
244 See e.g. Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , footnote 1033 
(observing that "the preclusion doctrine is not unique to WTO dispute settlement proceedings, and iterations of 
the same doctrine, albeit with varying nomenclature, can be found in various jurisdictions. For instance, the 
doctrine of res ju dicata, which prevents parties from re -litigating certain matters previously raised before a 
court or a tribunal, is conceptually similar to the preclusion doctrine.")  
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  determinations made under Articles 1.1, 1.2( a), 6 and 7 "245, and its distinct claims under these 
provisions are all founded on essentially the same objections to the Thai authorities ' reliance on the 
information in the CK -21A forms. In the Philippines ' view, these fundamental problems should lead 
the Panel to find that the customs valuation determinations reflected in the 2002 -2003 Charges and 
1,052 revised NoAs are inconsistent with these CVA obligations, regardless of whether the Thai 
authorities made a customs valuation determination governed by Art icle 1.1, Article 1.2(a) second 
sentence, Article 6, and/or Article 7.  
7.128.   According to the Philippines, the fundamental deficiencies that underlie its various legal 
claims include "that the relevant cost information was not reliable; that the Thai authoritie s knew 
that the information was questionable, both because it was questionable on its face and because the 
importer made submissions to that effect; and, the authorities nonetheless did nothing whatsoever 
to review the reliability of the information ".246 Thailand acknowledges that the information that its 
authorities relied upon "was not subsequently verified in terms of its accuracy"247, but maintains 
that PM Indonesia must be blame d for any inaccuracies in the CK -21A information, and that in the 
particular circumstances of this case,  its authorities were entitled to assume that it was accurate 
and truthful .  
7.129.   The Panel will  address  the fundamental factual premises of the Philippines ' legal claims  
below , before turning to those specific legal claims. The Panel will refer back to these  findings later 
in the context of its analysis of the Philippines ' specific legal claims.  
7.2.2   The nature  of the cost information reported in the CK -21A forms  
7.130.   The Panel will first consider  the alleged inaccuracy of the information reported in the CK -21A 
forms, and in particular whether the Philippines has established that , as a result of the regulatory 
constraints mandated by Indonesian excise tax law at the ti me that PM Indonesia completed the CK -
21A forms, the costs and profits reported by PM Indonesia in these forms were overstated and "did 
not – and could not – represent the actual costs and profits of the producer and the other parties in 
the supply chain ".248 Thailand counters that  the Philippines ' assertion regarding these Indonesian 
regulatory constraints "should not be considered or accepted " by the Panel for several reasons, one 
of which is that the Panel "cannot make findings that would call into questio n the WTO -consistency 
of Indonesia 's laws or how they are administered ".249  
7.131.   The Panel notes that the Philippines has the burden of substantiating its assertion that as a 
result of the regulatory constraints mandated by Indonesian excise tax law, the CK-21A forms could 
not represent PM Indonesia 's actual costs and profits, and necessarily err ed on the side of overstating 
the actual costs and profits of PM  Indonesia  and other parties involved in the supply chain. Thus, 
the Panel will begin by reviewing the Philippines ' exposition of the operation of the Indonesian excise 
tax system for tobacco products and the form CK -21A, and will then consider Thailand's  rebuttal 
arguments.  
7.132.   The Philippines explains that under the Indonesian excise tax law that was in force in 2001 -
2003, the excise tax on tobacco products was payable by the producer, when products left the 
factory gate, even though the tax was ostensibly  due on the retail sale.250 The G overnment of 
Indonesia thereby  centralized the collection of excise ta x in the hands of the producer (as opposed 
to the many retailers) and also collected the tax in advance of the retail sale.251 This excise tax base 
for tobacco products sold in Indonesia was known as the "Harga Jual Exeran " or "HJE", which 
translated means "retail selling price " (RSP) .252  
                                                
245 Philippines' response to Panel question No. 141, para. 115.  
246 Philippines' second wri tten submission, para. 118.  
247 Thailand's first written submission, para. 3.110.  
248 Philippines' first written submission, para. 237.  
249 Thailand's first written submission, para. 3.99.  
250 Philippines' first written submission, para. 107, referring to Indones ian Law on Excise, Law No. 
11/1995 (English translation), (Exhibit PHL -263-B), Article 7.  
251 Philippines' first written submission, para. 107.  
252 Philippines' first written submission, footnote 74, referring to Decree of the Minister of Finance of the 
Republ ic of Indonesia No. 89/KMK.05/2000, 29 March 2000 (English translation), (Exhibit PHL -259-B), Article 
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  7.133.   As elaborated below, t he HJE functioned as a maximum retail selling price .253 It was set with 
a view to achieving tax revenue targets set annually by the Government of Indonesia.254 The 
maximum retail price was governed by regula tions that aimed to ensure that it was high enough to 
meet those tax revenue targets.255  
7.134.    The HJE was fixed by the Directorate General of Customs and Excise (DGCE), the Indones ian 
excise tax authority, according to the size of the producer and the type and brand of tobacco 
product.256 The producer was responsible for obtaining an HJE for a given product and, when it 
launched a new product, was required to obtain an HJE even before it began t o manufacture the 
new product.257 After a product was launched, if the average actual retail sales price exceeded the 
HJE for a product, or if the DGCE increased the minimum HJE above the level of the HJE currently 
assigned for a product, the producer had to seek an increased HJE.258  
7.135.   In ord er to obtain an HJE from the DGCE, a producer submitted a proposed HJE for the 
approval of the DGCE.259 The producer was required to do so before it began manufacturing a new 
product for sale in Indonesia.260 When the DGCE approved a requested HJE, this figure  became the 
excise tax base for that product.261 This application for an HJE for a particular product was 
accompanied by administrative form CK -21A, entitled "Calculation of the Retail Selling Price of 
Domestic Tobacco Products ".262  
7.136.   In completing form CK -21A form, a producer had to fill in a series of pre -established rows in 
the form in which the producer ostensibly reported to DGCE purported "costs" and "profits " of all 
parties in the supply chain, leading from the producer to the retailer. Specifically, form  CK-21A 
contained a series of line -items relating to:  
a. the producer 's costs of production, which included pre -established rows for (1) mix 
tobacco; (2) cut cloves; (3) sauce; (4) filter; (5) wrapper; (6) glass paper; (7) pack 
paper, including printing cost ; (8) aluminum foil paper; (9) outside label; (10) pressed 
paper and box; (11) glue material; (12) costs of rolling, grinding and cutting; (13) costs 
of packaging, pressing and boxing; (14) sale/transportation costs; (15) company costs; 
(16) other costs;  
b. the domestic excise tax and VAT due on the product (based on the requested HJE);  
c. the producer 's profits; and,  
                                                
2; Witness statement of Dr. Joko Wiyono, 20 April 2012 (English translation), (Exhibit PHL -255-B), p. 2; and 
Witness statement of Eka Siswani, 3 May 2012 (English translation), (Exhibit PHL -256-B), p. 2.  
253 Philippines' response to Panel question No. 146, para. 162, and Decree of the Minister of Finance of 
the Republic of Indonesia No. 89/KMK.05/2000, 29 March 2000 (English translation), (Exhibit PHL -259-B), 
Article 8(1). In its third -party submission, Indonesia states along the same lines that "The translation of "HJE" 
into English would be "retail selling price". However, although the GOI fixed the minimum tax base (HJE), it did 
not fix the actual selling p rice. Sellers could sell tobacco products at any price. When we refer to the HJE in this 
submission, we refer to the tax base." (Indonesia's third -party written submission, footnote 7.)  
254 Indonesia's third -party written submission, paras. 4 -5, referring to  Law No. 15 of 2017, Article 1(4).  
255 Indonesia's third -party written submission, para. 10, referring to Decree of the Minister of Finance of 
the Republic of Indonesia No. 89/KMK.05/2000, 29 March 2000 (English translation), (Exhibit PHL -259-B).  
256 Philippines' first written submission, para. 105, referring to Decree of the Minister of Finance of the 
Republic of Indonesia No. 89/KMK.05/2000, 29 March 2000 (English translation), (Exhibit PHL -259-B). 
257 Philippines' first written submission, para. 107,  referring to Indonesian Law on Excise, Law No. 
11/1995 (English translation), (Exhibit PHL -263-B), Article 7.  
258 Philippines' first written submission, para. 107, referring to Decree of the Minister of Finance of the 
Republic of Indonesia No. 89/KMK.05/200 0, 29 March 2000 (English translation), (Exhibit PHL -259-B), 
Article  8(1). 
259 Philippines' first written submission, para. 108, referring to Decision of the Director General of 
Customs and Excise No. KEP -17/BC/2000 (English translation), (Exhibit PHL -260-B), Article 2.  
260 Philippines' first written submission, para. 108, referring to Indonesian Law on Excise, Law No. 
11/1995 (English translation), (Exhibit PHL -263-B), Article 7 and Witness statement of Dr. Joko Wiyono, 
20 April 2012 (English translation), (Ex hibit PHL -255-B), p. 4.  
261 Philippines' first written submission, para. 108, Decree of the Minister of Finance of the Republic of 
Indonesia No. 89/KMK.05/2000, 29 March 2000 (English translation), (Exhibit PHL -259-B), Article 2.  
262 See Example Form CK -21A, ( Exhibit PHL -264).  
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  d. a single item to cover the costs and profits of other parties in the supply chain (i.e.,  
distributor/agent/retailer).263 
7.137.   With respect to this last item, the applicable regulation provided that figures reported for 
parties other than the producer could not be less than 10 percent of the total.264 Moreover, when 
reporting figures in form CK -21A, a producer was required to ensure that the reported figures  for 
the apparent "costs" (including taxes) and "profits " of all parties in the supply chain added up, in 
total, to the requested HJE.265  
7.138.   While the reported profit  and cost figures had to add up to the requested HJE, that same 
HJE had to be set at a level t hat exceeded certain thresholds prescribed by regulation, including but 
not limited  to the actual sales price. More specifically, the Philippines identified the following 
regulatory requirements imposed by Indonesian excise tax law:  
a. the requested HJE had t o exceed the prescribed minimum HJE fixed by the DGCE for the 
particular category of tobacco product;  
b. the requested HJE had to exceed the actual  retail sales price  that would be charged by 
retailers for the producer 's product in question;  and 
c. the requested HJE  also had to exceed the previously approved HJE of any other products 
in the same cigarette categor y manufactured by the producer.266 
7.139.   The Philippines asserts that, as a result of the figures reported in the CK -21A form having 
to add up to the to tal HJE being requested, coupled with proposed HJE having to exceed these 
regulatory thresholds and requirements and be set prior to the start of manufacturing, the costs and 
profits reported by PM Indonesia to Indonesia did not – and could not – represent  the actual costs 
and profits of the producer and the other parties in the supply chain; rather, they would necessarily 
be inaccurate, and err towards overstating the actual costs and profits incurred by PM Indonesia.  
7.140.   In its first written submission, the Philippines explained the above points with reference to 
Indonesian laws and regulations, which it has provided as exhibits to the Panel. The relevant laws 
and regulations governing the administration of Indonesia 's excise tax referenced by the Philippines  
include Indonesian Law on Excise, Law No. 11/1995267, the Decree of the Minister of Finance of the  
Republic of Indonesia No. 89/KMK.05/2000, dated 29 March 2000268, the Decision of the Director 
General of Customs and Excise No. KEP -17/BC/2000269, and the Decisi on of the Director General of 
Customs and Excise No. KEP 19/BC/1997.270 The Philippines also provided an example of the CK-
21A form.271 
7.141.   The operation of these regulatory requirements was further elaborated  in the two expert 
statements, which PMTL obtained and provided to the DSI in 2012, by Joko Wiyono, a former Director 
of the DGCE, and Eka Siswani, a practicing Indonesian -qualified lawyer with expertise in Indonesian 
                                                
263 Philippines' first written submission, para. 109, referring to the Example Form CK -21A, (Exhibit PHL -
264).  
264 Philippines' first written submission, para. 110, referring to Decision of the Director General of 
Customs and Excise No. KEP 19/BC/1997 (English translation), (Exhibit PHL -265-B); and Witness statement of 
Dr. Joko Wiyono, 20 April 2012 (English translation), (Exhibit PHL -255-B), p. 4.  
265 Philippines' first written submission, para. 111, referring to Decision of the Director Gener al of 
Customs and Excise No. KEP -17/BC/2000 (English translation), (Exhibit PHL -260-B), Article 2; and Example 
Form CK -21A, (Exhibit PHL -264).  
266 Philippines' first written submission, para. 112, referring to Decision of the Director General of 
Customs and Excise No. KEP -17/BC/2000 (English translation), (Exhibit PHL -260-B), Article 9; and Decree of 
the Minister of Finance of the Republic of Indonesia No. 89/KMK.05/2000, 29 March 2000 (English translation), 
(Exhibit PHL -259-B), Articles 8(1) and (2).  
267 Indon esian Law on Excise, Law No. 11/1995 (English translation), (Exhibit PHL -263-B). 
268 Decree of the Minister of Finance of the Republic of Indonesia No. 89/KMK.05/2000, 29 March 2000 
(English translation), (Exhibit PHL -259-B). 
269 Decision of the Director Gener al of Customs and Excise No. KEP17/BC/2000 (English translation), 
(Exhibit PHL -260-B). 
270 Decision of the Director General of Customs and Excise No. KEP 19/BC/1997 (English translation), 
(Exhibit PHL -265-B).  
271 Example Form CK -21A, (Exhibit PHL -264).  
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  excise tax law. In their statements, t hese two experts explained the consequence of these 
requirements on the figures contained in the CK -21A form. Both explain that the figures contained 
therein were "estimates ", or "approximations ": 
a. The Wiyono statement characterizes these figures as "the ma nufacturer 's estimated  
values of the components " which constituted the proposed retail selling price.272 The 
statement explains that there was no requirement that the DGCE consider "the 
estimated costs, profit and taxes "273 listed in the CK -21A form, and that it was well 
aware that the form did "not consist of actual costs ".274 The statement indicates that "it 
was common knowledge at the DGCE that manufacturers would 'plug -in' numbers to 
show their justification for a proposed  HJE above the 'minimum HJE' required by the 
DGCE".275 The statement contrasts "actual costs " with "the approximate values " in the 
form.276 In the context of explaining why the figures cannot be relied upon to compute 
a revised customs value, the statement aga in states that the data in the form "is based 
on estimates ".277 The statement noted that CK -21A forms "clearly lacked sufficient 
details to allow verification against a company's GAAP compliant accounts"278 and the 
DGCE had "no procedure or methodology" to ver ify the reported information.279 Further, 
the statement also explains that the information in form CK -21A did not account for 
"differences" in costs and profits as between goods sold domestically and for export.280 
b. The Siswani statement likewise confirms that as part of its application for an approved 
retail selling price, the manufacturer submitted the CK -21A form set ting out the 
proposed retail selling price which comprised "its estimated production, marketing and 
distribution costs "281; and the Siswani stateme nt confirms that because the CK -21A 
form was prepared well in advance of production of the cigarettes at issue, it contained 
"estimated " costs and could not contain "actual cost information ".282 The Siswani 
statement concludes by observing that the CK -21A fo rm was repealed in 2008, after 
which the application for a n approved retail selling price no longer requires "estimated 
manufacturing costs, local taxes or profits " as an attachment to the application.  
7.142.   In its third -party submission, Indonesia also confirm s various aspects of the Philippines ' 
description of its tax system. Among other things, Indonesia confirms that the HJE was set to ensure 
that tax revenue targets were met, and that the DGCE was not interested in verifying whether the 
reported CK -21A figures reflected a producer 's actual cos ts and profits.  It characterized the figures 
reported in form CK -21A as a "pre-calculation ".283  
7.143.   The Philippines further explained how the figures reported in the CK -21A forms were not 
merely inaccurate, but necessarily overstated the actual costs and profit s of PM Indonesia and other 
parties in the supply chain. It points out that "if the Indonesian regulations required (1) that 'costs' 
and 'profits ' reported in form CK -21A add up to the HJE, and (2) that the HJE had to exceed the 
actual [Retail Selling Pric e], then, as a matter of logic , the CK -21A 'costs' and 'profits ' necessarily  
overstate the actual costs and profits "284; the Philippines added that "[f]urther compounding this 
necessary overstatement is the requirement that the requested HJE exceed a prescri bed minimum, 
determined on the basis of Indonesia 's excise tax revenue targets ", and "the requirement that the 
                                                
272 Witness statement of Dr. Joko Wiyono, 20 April 2012 (English translation), (Exhibit PHL -255-B) p. 3, 
para. 5.2. (emphasis original)  
273 Witness statement of Dr. Joko Wiyono, p. 3, para. 5.3.  
274 Witness statement of Dr. Joko Wiyono, p. 4, para. 5.5(a).  
275 Witness statement of Dr. Joko Wiyono, p. 4, para. 5.5(a)(iii).  
276 Witness statement of Dr. Joko Wiyono, p. 4, para. 5.5(c).  
277 Witness statement of Dr. Joko Wiyono, p. 6, para. 7.2(a).  
278 Witness statement of Dr. Joko Wiyono, p. 4.  
279 Witness statement of Dr. Jo ko Wiyono, p. 3.  
280 Witness statement of Dr. Joko Wiyono, p. 4.  
281 Witness statement of Eka Siswani, 3 May 2012 (English translation), (Exhibit PHL -256-B), p. 2, 
para. 4.3.  
282 Witness statement of Eka Siswani, p. 2, para. 4.3.  
283 Indonesia's third -party subm ission, para. 9. See also Witness statement of Dr. Joko Wiyono, pp. 1 
and 4.  
284 Philippines' response to Panel question No. 144, para. 152. (emphasis original)  
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  requested HJE exceed the assigned HJE of any other products in the same cigarette category 
manufactured by the producer ".285 
7.144.   The Philippines explai ned more concretely that, in the period 2000 -2003, to meet revenue 
collection targets, the Government of Indonesia raised the HJE by 69.5 percent. It then states the 
consequences with reference to Exhibit THA -74, in which Thailand provided a sample of how it 
calculated the actual price/value using the information reported in the CK -21A forms:  
Because Thailand used the HJE as the starting point to construct PTPMI 's "costs", the 
company 's costs move in lockstep with the HJE. The supposed "costs" are simply a 
residual amount or "plug" that moves in tandem with the HJE. Thus, just like the HJE, 
PTPMI 's "costs" seemingly also jump by 69.5 per cent in just two years.286 However, 
this apparent jump in PTPMI 's costs is simply an arithmetic consequence of Thailand 's 
decision to construct PTPMI 's costs by "pegging " them to the HJE.287  
7.145.   The Panel considers that in the absence of effective refutation, the above explanation suffices 
to establish that as a result of the regulatory constraints mandated by Indonesia n excise tax law, 
the CK -21A forms could not represent PM Indonesia 's actual costs and profits, and necessarily erred 
on the side of overstating the actual costs and profits of PM Indonesia  and other parties involved in 
the supply chain. Furthermore, nothi ng in this description suggests to the Panel that PM Indonesia, 
by reporting the information that it did in the CK -21A form, engaged in conduct that could be 
characterized as involving an "illegal act"288 under Indonesian law , or systematically or intentiona lly 
"deceived "289 the Indonesian au thorities.  
7.146.   Thailand does not specifically contest any particular aspect of the Philippines ' description of 
Indonesian law, supported by evidence in the form of the relevant Indonesian laws and regulations, 
and expert testim ony. However, Thailand presents several lines of argument, cast at a higher level 
of generality, as to why the Philippines has not substantiated its assertion that the information 
reported in the CK -21A forms was necessarily inaccurate. Thailand suggests t hat if PM Indonesia 
reported inaccurate information it was because it freely chose to do so.290  
7.147.   First, Thailand submits that the Philippines ' assertion that the information reported by 
manufacturers in form CK -21A was necessarily inaccurate as a result of t he operation of Indonesia 's 
tax system should not be "considered or accepted " by the Panel, because that assertion implies that 
Indonesia 's tax system was in violation of Article X:3(a) of the GATT 1994, and the Panel "cannot 
make findings that would call into question the WTO -consistency of Indonesia 's laws or how they 
are administered ".291 Thailand suggests that the Panel is not in a position to make findings on the 
regulatory requirements identified by the Philippines, "unless and until they have been  properly 
challenged and found to be inconsistent in WTO dispute settlement proceedings ".292 In response to 
a question from the Panel, Thailand reiterates the idea that because "the Philippines has not 
challenged Indonesia 's method of determining the tax bas e of cigarettes in the WTO ", it follows that 
"Indonesia 's method, and reporting requirements, enjoy a presumption of WTO consistency ".293 The 
Philippines responds by stating that with "this absurd argument, Thailand seems to be engaged in 
an effort to distra ct attention from the shortcomings in its own measures", and clarifying that "[f]or 
the record, the Philippines makes no such allegations about Indonesian law".294 
7.148.   The Panel fully agrees that Indonesia 's measures cannot be presumed to have been 
administered in an unreasonable manner under Article X:3(a). In the light of the Panel 's relevant 
findings under Article X:3(a) in the first recourse to Article 21.5, the Panel accepts the premise that 
                                                
285 Philippines' response to Panel question No. 144, para. 152.  
286 (footnote original ) The "Cost" in line 9 in Exhibit THA -74 increases from 1870.36 (first row) to 
3170.56 (last row) in the period 1 November 2000 – 30 December 2003, which is an increase of 69. 5 per cent. 
See Exhibit THA -74. 
287 Philippines' opening statement at the meeting of the Panel, para. 77.  
288 Thailand's first written submission, paras. 1.5, 3.47, 3.48, 3.79, 3.96, and 3.175.  
289 Thailand's first written submission, paras. 3.47 and 3.80.  
290 Thailand's response to Panel question Nos. 133 and 134, para. 3.7.  
291 Thailand's first written submission, para. 3.99.  
292 Thailand's first written submission, para. 3.99.  
293 Thailand's response to Panel question Nos. 133 and 134, para. 3.8.  
294 Philippines' sec ond written submission, para. 107.  
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  it would be prima facie  inconsistent with Article X:3(a) if Indones ia had imposed regulatory 
requirements on PM Indonesia that were impossible to comply with, and exposed the producer to 
legal jeopardy as a consequence of that non -compliance.295 However, this does not cast doubt on 
the Philippines ' factual assertion, which is substantiated with evidence in the form of the relevant 
Indonesian laws and regulations and expert testimony, that the figures reported in the CK -21A form 
could not reflect the actual costs or profits of PM Indonesia. Rather, relying on the  presumption that 
Indonesia would not impose impossible legal requirements in violation of Article X:3(a) serves to 
contradict Thailand 's own assumption, which is unsubstantiated by any concrete evidence or 
argumentation, that PM Indonesia was obliged  to provide accura te figures when reporting its pricing 
and cost information in the CK -21A form.   
7.149.   Additionally, Thailand asserts that "[u]nder Indonesian law, [PM Indonesia] had a legal 
obligation to provide truthful and accurate information "296, and that "there is a general obligation to 
provide accurate information on such government forms ".297 Thailand states that its authorities 
assumed that "there is no provision under Indonesian law that allows private entities to legally 
submit inaccurate information "298, and states  that "the Philippines was unable to identify such a 
provision [of Indonesian law] during the hearing ".299  
7.150.   The Panel notes that Thailand does not identify any  specific  provision of Indonesian law  to 
substantiate the above assertion  or respond to the Philipp ines' description of how the regulatory 
requirements discussed above necessarily result in the inclusion of inaccurate figures in the CK -21A 
form. The Panel has no difficulty with the proposition that there is a general obligation to provide 
truthful infor mation in the co ntext of government forms, but this does not mean or imply that there 
cannot be government forms that, in certain contexts and prepared for certain purposes, call for 
rough estimates or approximations. The requirement as to the level of acc uracy d epends on the 
nature of the information provided, the purpose for which it was provided, and the regulatory context 
in which it was provided. As a simple hypothetical example  to illustrate this point , reporting figures 
that understate one 's annual s alary in an income tax form in a way that triggers a reduced tax 
liability is not necessarily the same thing as providing approximate arrival and departure dates when 
applying for a travel visa months in advance of making a holiday booking. The provision o f "proxy 
costs" in the CK -21A form , made pursuant to the regulatory requirements as described by the 
Philippines and its experts  and in keeping with the context and purpose of that governmental form , 
cannot be equated with lying, deception, or illegality.  
7.151.   Based on the foregoing, the Panel concludes that, as a result of the regulatory constraints 
mandated by Indonesian excise tax law, the  figures in the  CK-21A forms could not represent PM 
Indonesia 's actual costs and profits, and necessarily err ed on the side of overstating the actual costs 
and profits of PM  Indonesia  and other parties involved in the supply chain . 
7.2.3   The circumstances surrounding the Thai authorities ' reliance on  the CK-21A forms  
7.152.   Another fundamental premise of the Philippines ' case i s that the Thai authorities knew, or 
should have known, that the information in the CK -21A forms was inaccurate. According to the 
Philippines, the content, purpose and format of the information reported in the CK -21A forms, and 
the fact that it was not pro vided by the importer or producer, all raised serious questions about its 
accuracy, relevance and reliability for Thailand 's customs valuation purposes.300 It asserts that the 
                                                
295 The Panel recalls that in the first recourse to Article 21.5, the Philippines challenged a VAT 
notification requirement, arising under Notification 187 and Order Por. 145 -2555, obliging importers of 
cigarettes to notify  in June of each year the "average actual market price" as of the date of notification. The 
Panel concluded that the importer could not know the "average actual market price" on the date of notification, 
and thus was unable to ensure that it complied with the VAT notification requirement, and that this exposed 
cigarette importers to the potential consequences of non -compliance, all of which gave rise to a violation of 
Article X:3(a). (Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philipp ines), paras. 7.924 and 
7.935.)  
296 Thailand's second written submission, para. 3.65.  
297 Thailand's response to Panel question Nos. 133 and 134, para. 3.4.  
298 Thailand's response to Panel question No. 165(a) -(c), para. 3.24.  
299 Thailand's response to Panel ques tion No. 165(a) -(c), para. 3.24.  
300 Philippines' first written submission, paras. 252ff.  
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  Thai authorities "knew that the information was questionable, both because it was questionable on 
its face and because the importer made submissions to that effect ".301 
7.153.   Thailand counters that its authorities had "the right to assume that the information provided 
by the exporting country 's authority is accurate and truthful "302, and stress es the particular 
circumstances  surrounding the provision of the CK -21A information to the Thai authorities . The 
notable circumstances identified by Thailand are that the CK -21A information was provided by PM 
Indonesia to the Indonesian tax authorities as pa rt of tax filings required under the law303; that it 
was furnished to Thai officials by the Government of Indonesia304; that it was  reasonable to presume 
that under Indonesian law, PM Indonesia had a legal obligation to provide truthful and accurate 
informatio n305; that Indonesian authorities had already processed and relied on this informa tion for 
collecting local taxes306; and that the Thai authorities had no way of independently verifying PMTL's  
characterization of Indonesia's tax system .307 
7.154.   The Panel agrees with Thailand that the authorities in an importing country are not required 
to start their examination from a "presumption that information provided by foreign governments is 
not accurate, or e ven worse, that producers knowingly submitted fabricated information", and 
accepts that this would "impose excessive restrictions on the authority's ability to gather information 
on the producer's costs and profits".308 The Panel is inclined to agree with Th ailand that in principle 
the customs authorities  in an importing country have "the right to assume that the information 
provided by the exporting country 's authority is accurate and truthful "309, and based on that 
assumption may regard such information as "p resumptively reliable"310 in terms of its accuracy.  
7.155.   However, such an assumption can only operate as that, i.e. rebuttable presumption, and 
does not entitle an authority to deem information to be accurate without taking into account relevant 
explanations subsequently provided by the importer.  As already recalled further above, it may be 
the case that, in examining the circumstances of sale, a customs authority considers that the 
relationship influenced the  price on the basis of an assessment " which is in itse lf a valid indicator, 
or is suggestive ", of whether the rela tionship influenced the price; however, if the  importe r respond s 
by providing other evidence that is relevant, in " such a situation, if the customs authority fail [s] to 
take into account such info rmation the customs authority would essentially be failing to conduct an 
examination of the circumstances of sale that is apt to reveal whether the relationship influenced 
the price ".311 In this case, the record of communications from PMTL to the DSI and the Public 
Prosecutor  shows  that PMTL repeatedly informed the DSI and Public Prosecutor that the pricing and 
cost information reported in the CK -21A forms did not represent PM Indonesia 's actual costs and 
profits , and could not be relied upon for customs v aluation purposes without violating the CVA.  
7.156.   According to the Philippines, at some point in early 2011, the DSI informed PMTL of its 
suspicions that PMTL had under -declared customs values on entries in 2001 -2003 based on CK-21A 
excise tax forms obtained f rom the Government of Indonesia.312 From the record of communications 
before the Panel, it appears that this information led PMTL to provide a detailed response, and also 
to obtain and submit the two expert statements.  The Panel has reviewed these communicat ions 
made by PMTL to the DSI and Public Prosecutor regarding the unsuitability of the information 
reported in the CK -21A forms, and summarizes them below.  
                                                
301 Philippines' second written submission, para. 118.  
302 Thailand's first written submission, para. 3.79.  
303 Thailand's response to Panel question No. 164, para. 3.11.  
304 Thailand's response to Panel question No. 164, para. 3.11.  
305 Thailand's second written submission, para. 3.65.  
306 Thailand's second written submission, para. 3.65. Elsewhere, Thailand refers to "the specific situation 
of information provided by foreign gov ernments that has already been used to collect taxes in that foreign 
country". (Thailand's second written submission, para. 3.67.)  
307 Thailand likewise maintains that, in the context of this WTO dispute settlement proceeding, it has no 
way of independently verifying the Philippines' characterizations of Indonesia's excise tax system. (Thailand's 
response to Panel question No. 134, para. 3.7.)  
308 Thailand's first written submission, para. 3.79.  
309 Thailand's first written submission, para. 3.79.  
310 Thailand's response to Panel question No. 164, para. 3.15.  
311 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , footnote 592.  
312 Philippines' first written submission, para s. 95-96. 
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  7.157.   On 4 February 2011, PMTL sent a letter to the DSI in which PMTL made a "Request for Fair 
Treatment a nd Justice ".313 In this letter, PMTL states that it "understands that the DSI has formed 
the view that the retail selling prices set out in the so -called Form CK -21A are comparable to PM 
Thailand 's declared customs values and therefore evidence to show that PM Thailand 's import prices 
declared to Thai Customs are incorrect ".314 The letter then proceeds to set out a brief explanation of 
"why, for the purposes of Thai customs valuation law, the information and retail selling prices 
contained in Form CK -21A are no t relevant to an assessment of the values declared as the import 
prices by PM Thailand, and, most importantly, why it is unlawful and against customs valuation 
principles to compare the retail selling prices of products manufactured in Indonesia for sale i n the 
Indonesian domestic market (CK21 -A values) with the declared customs values of products 
manufactured in Indonesia and exported to Thailand for resale in the Thailand domestic market (PM 
Thailand 's customs values) ".315 After setting forth this explanati on, the letter states, "[t]o obtain 
confirmation that the form and the information contained in the form have nothing to do with 
customs valuation in respect of the products sold by the Indonesian manufacturer and imported by 
PM Thailand, you can ask the above -mentioned Indonesian authority to verify the above 
explanation. "316 
7.158.   On 3 June 2011, the DSI sent a letter to PMTL 's attorney, recalling an earlier meeting held 
on 14 March 2011 during which it was "agreed to discuss the possibility with PMTL regard ing 
submission for the DSI team 's consideration of Form CK -21A, which provides details about 
calculation of the domestic retail selling prices of tobacco products of the manufacturer in 
Indonesia ".317 The letter states that "a reasonable time has elapsed ", and proposes a meeting "to 
confirm information and submit the above -mentioned documents to the DSI team ".318 
7.159.   On 4 May 2012, counsel for PMTL responded by sending two witness statements to the DSI 
to "support the facts asserted in the said Request for Fair Tre atment and Justice ".319 These two 
statements concerned t he operation of Indonesia 's excise tax system for tobacco products in the 
period 2001 -2003, including the role of administrative form CK -21A.320 As noted earlier, t he two 
statements were prepared  by: (1) Joko Wiyono, a former Director of the Directorate General of 
Customs and Excise, the Indonesian excise tax authority responsible for administering Indonesian 
excise tax; and (2) Eka Siswani, a practicing Indonesian -qualified lawyer with expertise  in 
Indonesian excise tax law. Each statement provides a detailed explanation of  why the figures 
reported in CK -21A forms were not an accurate and reliable reflection of PM Indonesia 's actual costs 
and profits and, therefore, why the information in the form s was not  suitable for Thailand 's customs 
valuation purposes.  
7.160.   The record before the Panel includes an exchange of letters between PMTL and the DSI 
regarding the CK -21A forms  over a period of years . In these letters, PMTL repeatedly articulates the 
reasons  why the information in the CK -21A forms is not relevant to the determination of PMTL 's 
customs values, and the DSI repeatedly requests that PMTL provide it with copies of all of the CK -
21A forms:  
a. On 11 September 2013, the DSI sent a letter to PMTL 's attorney, recalling an earlier 
meeting held on 28 June 2011 during which it was confirmed that PMTL had been 
notified "of DSI 's request for documents about the cost prices of cigarettes (i.e., CK -
21A forms) but the Company still had to provide the reques ted documents ".321 The 
letter states that "considerable time has elapsed without your submission of the 
documents about the cost prices of cigarettes (CK -21 forms) to DSI ", and to "please 
expedite your process of submitting such documents ".322  
                                                
313 Request for Fair Treatment and Justice, 4 February 2011 (English translation), (Exhibit PHL -279-B).  
314 Request for Fair Treatment and Justice, p.  1.  
315 Request for Fair Treatment and Justice, p. 2.  
316 Request for Fair Treatment and Justice, p. 4.  
317 Letter from the DSI to PMTL, 3 June 2011 (English translation), (Exhibit PHL -253-B), p. 1.  
318 Letter from the DSI to PMTL, 3 June 2011 (English translation), (Exhibit PHL -253-B), p. 1.  
319 Letter from PMTL to the DSI, 4 May 2012 (English translation), (Exhibit P HL-281-B), p. 1.  
320 Witness statement of Dr. Joko Wiyono, 20 April 2012 (English translation), (Exhibit PHL -255-B); 
Witness statement of Eka Siswani, 3 May 2012 (English translation), (Exhibit PHL -256-B). 
321 Letter from the DSI to PMTL, 11 September 2013 (E nglish translation), (Exhibit PHL -254-B), p. 1.  
322 Letter from the DSI to PMTL, 11 September 2013 (English translation), (Exhibit PHL -254-B), p. 1.  
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  b. On 26 September  2013, counsel for PMTL responded that "after June 28, 2011 (the date 
referred to by you), by letters dated May 4 and 10, 2012, we have submitted to you the 
statements made by two witnesses in relation to Forms CK 21 -A to clarify facts about 
the cost price s of cigarettes as declared to the Indonesian authorities by Philip Morris 
Indonesia ".323 The letter resubmitted the same two witness statements again.  
c. On 21 August 2015, the DSI sent a letter to PMTL requesting that the latter submit the 
so-called CK -8 documents, another form related to the CK -21A forms that was 
submitted to the Indonesian authorities by the exporter upon exportation.324 The letter 
proposed "a person who can give explanation of the details of such document be 
assigned to meet with and give  statements to " a DSI official.325  
d. In response, counsel for PMTL provided a statement on 11 September 2015 recalling 
that, as set out in the expert witness statements provided, "it is not possible under Thai 
law to compare the declared customs value with th e retail selling price, such as the HJE, 
in the exporting country ".326 It reiterated that "[t]he hypothetical HJE is not relevant to 
exported goods, as explained in the expert witness statement of Dr Joko Wiyono, 
himself a former Director of the DGCE, which was submitted by the Company to the 
DSI on May 4, 2012. "327  
7.161.   On 22 September 2016, i.e. a decade after launching its initial investigation and 13 -16 years 
after the entries at issue  cleared Thai Customs , the DSI issued a Memorandum of Allegations ( "MoA") 
against PMTL.328 One former employee of PMTL was informed of the allegations by way of a second 
Memorandum of Allegations, dated 7 October 2016.  Although the MoA dated 22 September 2016 
compared  the "false" transaction values to the supposed "actual " prices of the imported goods, it 
did not explain or provide any further information on the grounds for doubting PMTL 's declared 
transaction values, or the basis upon which the "actual " customs values  were determined. This 
prompted PMTL to send a "request for fair treatment and justice " to the Public Prosecutor, on 
28 October 2018, after the DSI had issued the MoA. In that request to the Public Prosecutor, PMTL 
recalled that the information in the CK -21A form s could not be used to determine a customs value 
for its imports into Thailand, explaining that:  
While it is unclear from the Memorandum of Allegations on which basis the DSI rejected 
PMTL's declared customs values and which valuation method (if any) was used to 
determine the DSI 's view of the customs va lue, PMTL understands that the DSI has 
raised a concern about information contained in Form CK -21A, which was a form 
previously required of the manufacturer in Indonesia by the Indonesian Customs and 
Excise Department. For locally produced tobacco products  the Indonesian manufacturer 
was required to provide details of the prescribed components that are used to determine 
the Retail Selling Price (known as the HJE) for all tobacco products to be sold in the 
Indonesian domestic market. This form was required f or all locally manufactured 
tobacco products irrespective of whether the product would be sold domestically or 
exported.  
The HJE reflected what the domestic retail selling price would be if the goods were sold 
in Indonesia and was not the same as the manu facturers selling price to PMTL. The HJE 
comprised numerous additional costs and charges that are only relevant to a sale in the 
domestic market (e.g. Indonesian excise tax and the manufacturer 's and Indonesian 
distributors ' profits).  
It is possible that t he DSI may have mistakenly formed the view tha t the Form CK -21A 
includes values which should be used as PMTL 's declared customs values and therefore 
evidence to show that PMTL 's import prices declared to Thai Customs Department are 
incorrect. For the reaso ns explained and as clearly stipulated in Thai and international 
                                                
323 Letter on evidence and witnesses in relation to CK -21A, 26 September 2013 (English translation), 
(Exhibit  PHL-280-B), p. 1.  
324 Letter from the DSI to PMTL, 21 August 2015 (English translation), (Exhibit PHL -257-B), p. 1.  
325 Letter from the DSI to PMTL, 21 August 2015 (English translation), (Exhibit PHL -257-B), p. 1.  
326 T&G statement, 11 September 2015 (English translation), (Exhibit PHL -258-B REV), p. 2.  
327 T&G statement, 11 September 2015 (English translation), (Exhibit PHL -258-B REV), p. 2.  
328 DSI, Memorandum of Allegation s, 22 September 2016 (English translation), (Exhibit PHL -13-B). WT/DS371/RW2  
 
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  customs valuation laws, a domestic retail sales value in the country of export, such as 
the HJE, cannot be used to reject or stipulate (i.e. replace) an importer 's declared 
customs value in a nother country.  
In this regard, PMTL submitted to the DSI two Indonesian expert opinions, from Eka 
Wahyuning Siswani, dated 3 May 2012, and from Drs Joko Wiyono, dated 20 April 2012 
(Attachment 2) by the cover letter dated May 10, 2012, as well as PMTL 's own request 
for fair treatment dated February 4, 2011 (Attachment 3) and written explanation dated 
September 24, 2015 (Attachment 4) explaining the background to the CK -21A and a 
similar Form CK -8 as well as why, for the purposes of customs valuation law, the 
information and retail selling prices contained in Forms CK -21A and CK -8 are not 
relevant to an assessment of the values declared as the import prices by PMTL, and, 
most importantly, why it is unlawful and against customs valuation principles to 
compar e the retail selling prices of products manufactured in Indonesia for sale in the 
Indonesian domestic market (CK -21A values) with the declared customs values of 
products manufactured in Indonesia and exported to Thailand for resale in the Thailand 
domestic  market (PMTL 's customs values).329 
7.162.   In the light of the foregoing, the Panel considers that the DSI and Public Prosecutor had no 
basis upon which to assume that the CK -21A information was reliable for the purpose of determining 
the customs value of the ciga rettes imported by PMTL, in the light of PMTL's repeated written 
explan ations as to why it was not. Furthermore, for the reasons set forth below, none of the specific 
circumstances identified by Thailand would justify the Thai authorities disregarding  the explanations 
and additional information subsequently provided by PMTL to the Thai authorities . 
7.163.   First, th e fact that PM Indonesia itself provided the CK -21A information to the Indonesian 
tax authorities does not, in the light of the explana tions provided by PMTL and its experts to the 
Thai authorities, sustain an assumption that the figures reported therein are correct. To the contrary, 
the fact that the figures were provided by PM Indonesia itself means that that PM Indonesia and 
PMTL, the affiliated importer, would have been uniquely well positioned to explain to the Thai 
authorities whether and if so why the information reporte d was inaccurate. I nsofar as Thailand's 
arguments are to be taken as suggesting that PM Indonesia or PMTL were som ehow estopped from 
subsequently disputing the accuracy of the information because that information originated from PM 
Indonesia , there is nothing in the CVA or the findings of the original or first compliance panel to 
sustain the  suggestion  that an importe r is somehow barred from pointing out errors or inaccuracies 
in the information that it previously submitted  or, as in the case with respect to the CK -21A 
information, that an affiliated company/producer previously submitted to another government for 
purpo ses unrelated to customs valuation . 
7.164.   Second, the fact that the CK -21A information was furnished to Thai officials by the 
Government of Indonesia did not entitle the Thai authorit ies to deem it to be accurate and  disregard 
the explanations and additional information subsequently provided by PMTL  to the Thai authorities 
explaining why it was not. There is nothing in the CVA to suggest that information provided by a 
foreign government is exempted from th e general provisions requiring an authority  to examine the  
information before it.330 Furthermore, the Panel finds force in the Philippines' argument that if 
exporting countries, like Indonesia, knew that the importing country would "blindly" rely on any 
information provided, "this might have a chilling effect on th e willingness of the exporting country 
                                                
329 Letter from PMTL to the P ublic Prosecutor, 28 October 2016 (English translation), (Exhibit PHL -
282-B). 
330 As Japan observed in its oral statement, the third sentence of the CVA Article 1.2(a) stipulates that 
"[i]f, in the light of information provided by the importer or otherwise , the customs administration has grounds 
for considering that the relationship influenced the price, it shall communicate its grounds to the importer and 
the importer shall be given a reasonable opportunity to respond” (emphasis added). Japan notes that this  
sentence allows the customs administration of an importing Member to use information provided by the 
customs administration of other Members, including, but not limited to, an exporting Member. Japan further 
observes that t here "is no provision which dist inguishes such information provided by the customs 
administrations of other Members from information provided by the importer. Nor is there a provision which 
exempts such information from examination by the customs administration of an importing Member und er 
Article 1.2(a)." (Japan's third party statement, para. 9.)  
 WT/DS371/RW2  
 
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  to provide information, given that it is unlikely to be itself well -placed to judge the suitability of the 
information for the particular purposes of the importing country".331 
7.165.   Third, the fact that it may have been  reasonable to pre sume that PM Indonesia had a legal 
obligation to provide truthful and accurate information  in government forms would also not entitle 
the Thai authorities to disregard the detailed explanations and additional information subsequently 
provided by PMTL  to the Thai authorities . In this regard,  the Panel detects a significant unexplained 
tension within the internal logic of Thailand's argumentation. On the one hand, Thailand maintains 
that its authorities were entitled to presume that PM Indon esia had a legal obligation to provide 
truthful and accurate information, and suggests that this presumption entitled the Thai authorities 
to disregard the detailed information provided by PMTL as to why the information reported in the 
CK-21A forms was not  an accurate reflection of its  costs. On the other hand, Thailand accepts that 
its authorities relied on pricing and cost information reported by PM Indonesia in the CK -21A forms 
to reach the conclusion that PMTL and PM Indonesia engaged in customs fraud, in violation of Section 
27 of the Thai Customs Act, by declaring false prices to the Thai authorities for imports of cigarettes 
over the period 2002 -2003. Thus, the Thai authorities appeared to rely on the presumption that PM 
Indonesia would never report i naccurate prices in a government form provided to the Indonesian 
excise tax authorities to reach the conclusion that PM Indonesia and PMTL reported inaccurate prices 
in the customs forms provided to the Thai customs authorities .  
7.166.   Fourth, Thailand emphasise s that it was reasonable for the Thai authorities to assume the 
accuracy of the information reported in the CK -21A forms because the Indonesian authorities had 
already processed and relied on the CK -21A information for collecting taxes . The Panel considers  
that i nsofar as PMTL's explanations to the DSI and Public Prosecutor would have implied that PM 
Indonesia engaged in tax fraud by reporting information that resulted in it paying less tax than it 
should have, the DSI and Public Prosecutor might have had s olid grounds for being deeply sceptical 
of PMTL's explanations.332 However, as a preliminary point, the collection of Indonesian excise taxes 
were not based on the breakdown of the pricing and cost information reported in the CK -21A form, 
but rather on the H JE proposed by the producer and approved by the DGCE. But more  fundamentally, 
for the reasons already given further above, the regulatory constraints mandated by Indonesian 
excise tax law at the time (e.g. that the HJE had to exceed the prescribed minimum HJE fixed by 
the DGCE for the particular category of tobacco product) resulted in an overstatement  of PM 
Indonesia's cos ts and profits. Thus, PMTL's explanation implied that, as a consequence of the 
regulatory requirements already discussed, PM Indonesia paid more in taxes to the Government of 
Indonesia than PM Indonesia would have paid if the HJE had been based on PM's  actual  costs and 
profits. In these circumstances, it is not clear why the Thai authorities would assume the accuracy 
of the i nformation reported in the CK -21A forms on the basis that the Indonesian authorities had 
already processed and relied on the CK -21A information for collecting local taxes.  
7.167.   Furthermore, the same unexplained tension in the internal logic of Thailand's argume ntation 
resurfaces . The relevant Thai authorities , i.e. the Customs Department and its BoA,  had themselves 
already processed and relied on the information provided by PMTL in the context of previously 
determining the customs values of the imports at issue.333 Accordingly, if the DSI and Public 
Prosecutor had actually proceeded on the basis of an assumption that information provided by PMTL 
was accurate and truthful, especially where prior assessments of taxes and customs duties owed 
had been carried out on th e basis of that information, this would not have led them to the conclusion 
that PMTL under -declared its customs values, fraudulently and dishonestly, to avoid the payment of 
the full import duties due on the actual price of goods.  Thus, Thailand's argumen t appears to assume 
that its authorities' could have regarded the Indonesian  authorities ' decision to collect taxes based 
on certain information reported by PM Indonesia as establish ing the accuracy of that information, 
                                                
331 Philippines' second written submission, para. 132. Thailand argues that the Philippines has adduced 
no evidence of such a chilling effect, but the Panel does not consider that this addresses t he issue raised by the 
Philippines' argument. The Philippines' has not argued that there has in fact been such a chilling effect, but 
rather that there could be such a chilling effect if it were the case that authorities in exporting countries 
considered t hat authorities in importing countries would rely on information provided without conducting any 
examination of its accuracy or reliability. This is an argument laying out a hypothetical scenario, not a factual 
assertion in respect of which evidence would need to be adduced.  
332 The Panel recalls that in the first recourse to Article 21.5, it countenanced against lightly presuming 
that a producer or importer would have engaged in tax fraud. See Panel Report, Thailand – Cigarettes 
(Philippines)  (Article 21.5 – Philippines) , para. 7.362 and footnote 820.  
333 See below, paragraph 7.175.   WT/DS371/RW2  
 
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  without according any weight to the Thai authorities' decision to collect customs duties and related 
taxes based on certain other information reported by PMTL and PM Indonesia.  
7.168.   Fifth, Thailand suggests that its authorities had no way of independently verifying PMTL's 
characterization of Ind onesia's tax system.  However, t he Panel does not see how  the Thai authorities' 
lack of kn owledge about the CK -21A forms c ould serve as a basis for relying on that same 
information, and  deem ing it to be accurate in disregard of the information subsequently provided by 
PMTL explaining why it was not.  The Panel recalls that it was the Thai authorities that decided to 
value PMTL's imports on the basis of costing information reported by PM Indonesia in the context of 
Indonesian tax forms. Furthermore, it is not clear why the Thai authorities, having obtained this 
information from the Indonesian authorities, could not have sought to follow up on PMTL's invitation 
to contact relevant Indonesian authorities to corroborate its explanations. In its letter of 4 Februar y 
2011 to the DSI, PMTL stated that "[t]o obtain confirmation that the form and the information 
contained in the form have nothing to do with customs valuation in respect of the products sold by 
the Indonesian manufacturer and imported by PM Thailand, you can ask the above -mentioned 
Indonesian authority to verify the above explanation. "334 
7.169.   In addition to these particular factual circumstances, which the Panel considers to be 
unavailing, Thailand has sought to justify the Thai authorities' disreg ard of the Joko and Siswani 
expert statements  as follows:  
The Philippines mentions repeatedly that PMTL provided expert reports to Thai 
authorities explaining why PM Indonesia's information reported in form CK -21A is not 
suitable for purposes of customs va luation in Thailand. However, the Philippines' expert 
reports do not explain how, in these circumstances, could Thai authorities have 
overcome the problem of the alleged inaccuracy. It would be naïve to think that the 
alleged inaccuracy could be overcome s imply by requiring PMTL to voluntarily provide 
information on its own costs and profits. Moreover, the Philippines' expert reports do 
not provide the accurate information on costs and profits that would be necessary for 
Thailand to properly apply the "cost  plus profit" benchmark.  
7.170.   In the Panel's view, the principal difficulty with this argument is that it appears to assume 
that the Thai authorities were entitled to rely on the compute d value method of customs valuation 
for purposes of examining the circumsta nces of sale, and/or determining a revised customs value. 
It is thus worth recalling that the primary basis for determining the customs value is the transaction 
value; that the fact that the buyer and seller are related is not in itself grounds for regardi ng the 
transaction value as unacceptable; that it is only where the authorities determine, on the basis of a 
proper examination of the circumstances of sale, that the relationship influenced the price that they 
may proceed to determine the customs value on  an alternative method; and that those methods 
must then be applied sequentially, such that the determination of a revised customs value on the 
basis of the computed value method is only permissible where the customs value cannot be 
determined on the basis  of any of the preceding methods. Further, even if a customs authority 
determines that the customs value cannot be determined under Articles 2 -5, recourse to Article 6 
may raise difficulties. For example, Article 6.2 of the CVA clarifies that a foreign pro ducer cannot be 
compelled to provide its accounting records. If Article 6 is not available, an authority can resort to 
the fall -back method under Article 7.  Thus, the Thai authorities could have overcome the problem 
of the alleged inaccuracy of the costing  information reported in the CK -21A forms by accepting 
PMTL's transaction values, or if they had other grounds for doubting the acceptability of those values, 
by determining the customs value on the basis of a different method of customs valuation.  
7.171.   In the light of the foregoing the Panel  is of the view  that, while there may  be cases in which 
the customs authority in the importing country is entitled to assume that pricing and cost information 
obtained from a foreign governmen t is accurate and truthful, in this case  the DSI and Public 
Prosecutor had no basis upon which to assume that the CK-21A information was reliable in the light 
of PMTL's repeated written explanations as to why it was not.  
                                                
334 Request for Fair Treatment and Justice, 4 February 2011 (English translation), (Exhibit PHL -279-B), 
p. 4.  WT/DS371/RW2  
 
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  7.2.4   Conclusion  
7.172.   The Panel concludes that : (1) as result of the regulatory constraints mandated by Indonesian 
excise tax law, the CK -21A forms could not represent PM Indonesia 's actual costs and profits, and 
necessarily erred on the side of overstating the actual costs and profits of PM Indonesia  and o ther 
parties involved in the supply chain ; and (2) there may  be cases in which the customs authority in 
the importing country is entitled to assume that pricing and cost information obtained from a foreign 
government is accurate and truthful, but in the ci rcumstances of this case the DSI and Public 
Prosecutor had no basis upon which to assume that the CK-21A informatio n was reliable in the light 
of PMTL's repeated written explanations as to why it was not .  
7.3  The 2002 -2003 Criminal Charges  
7.3.1   General  
7.3.1.1   Factual des cription of the Charges  
7.173.   This section  provides a brief general factual description of the 2002-2003 Charges. It begins 
with the events that culminated in the Public Prosecutor issuing them on 26 January 2017, and then 
sets out the legal basis for the Charg es under Thai law, the content of the Charges and their Annex, 
and relevant events subsequent to the issuance of the Charges . The Panel will not repeat its earlier 
factual findings on the Thai authorities ' reliance on the CK -21A forms to determine the "actual price " 
and actual value  in the 2002 -2003 Charges and the 1,052 revised NoAs  respectively .335  
7.3.1.1.1   The prior assessments of the entries at issue  
7.174.   Between January 2002 and July 2003, PMTL imported into Thailand 780 entries of Marlboro  
and L&M cigarettes from In donesia. PMTL 's declared transaction values for each of these entries was 
in the range of THB 7.35-7.70 per pack for Marlboro  cigarettes, and THB 6.13-6.55 per pack for 
L&M cigarettes.336  
7.175.   The customs values of the 780 entries were all  assessed by other Thai government agencies 
other than the DSI based either on those agencies' acceptance of PMTL's declared transaction values, 
or based on the application of the deductive method pu rsuant to A rticle 5 of the CVA. Different sets 
of entries were subject to different decisions, made at different points in time. The following table337 
provides information on these other decisions made by Thai Customs Department, its BoA, and/or 
the Supreme Court:  
Num ber of entries, 
brand(s), and period 
covered by previous 
decision(s)  Decision(s) and  
customs value(s) asse ssed Entry Nos. in the 
Annex to the 
Charges  
573 entries of Marlboro  and 
L&M cigarettes imported 
between 3 May 2000 and 28 
December 2002  
Out of these 573 entries, 
321 entries of L&M 
cigarettes imported between 
22 January 2002 and 28 
December 2002 are subject 
to the Charges.  • in the first instance, the Customs Department 
rejected PMTL's declared transaction values, and 
assessed a higher customs value  
• in a series of three BoA rulings is sued on 30 
September 2004, 26 July 2005, and 19 June 
2006, the BoA: (i) accepted PMTL's declared 
transaction values for 467 entries of  L&M 
cigarettes; and (ii) revised the Customs 
Department's assessed values downwards for 106 
entries of Marlboro  cigarette s  Charges Nos. 1 -321 
210 entries of Marlboro  
imported between 8 January • in the first instance, the Customs Department 
rejected PMTL's declared transaction values, and 
assessed a higher cus toms value  Charges Nos. 322 -
527 
                                                
335 See Section 7.2 (The Thai authorities' reliance on the  information in the CK -21A forms).  
336 See DSI, Memorandum of Allegation s, 22 September 2016 (English translation), (Exhibit PHL -13-B); 
Philippines' first written submission, para. 345.  
337 This table is based on the information provided by the Philippines in response to Panel question 
No. 160, and by Thailand in its comments on the Philippines' response.  
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  Num ber of entries, 
brand(s), and period 
covered by previous 
decision(s)  Decision(s) and  
customs value(s) asse ssed Entry Nos. in the 
Annex to the 
Charges  
2002 and 28 December 
2002  
206 entries of Marlboro  
cigarettes imported between 
22 January 2002 and 28 
December 2002 are subject 
to the Charges, the rest are 
outside the scope of the 
Charges  • the BoA Ruling of 16 November 2012 revised the 
Customs Department's assessed values upwards 
(to THB 9.30/pack338)  
• on appeal by PMTL, the Tax Court ruled on 29 
October 2014 that both the initial rejection of 
transaction value and the subsequent Bo A 
decision were unlawful339 
• on appeal by the Customs Department, the 
Supreme Court ruled on 28 December 2017 (read 
on 7 May 2018) that the BoA decision was not 
unlawful, but amended the BoA Ruling by 
deducting a P&GE rate of 15.05% for PMTL, 
rather than the 12.44% (revising the THB 
9.30/pack downwards, but no exact figure 
provided)340 
• the Customs Department must now take action to 
implement this ruling, which will take the form of 
revised customs valuation determinations that 
may result in the issuance of new N oAs 
60 entries of Marlboro  and 
L&M cigarettes imported 
between 1 January 2003 – 
19 February 2003  
All of these entries are 
subject to the Charges  • the Customs Department rejected PMTL's 
declared transaction values, and assessed a 
higher customs value  
• PMTL did not pursue the appeal because of 
commercial reasons  Charges Nos. 528 -
557, 560 -561, 564, 
567-568, 672 -693, 
696-697 and 699  
193 entries of Marlboro  and 
L&M imported after 10 
March 2003341 (up to 2006)  
All of these entries are 
subject to the Charges  • the Customs Department accepted PMTL's 
transaction values THB 7.35-7.70 (i.e. USD 
9.71/1000 sticks) (Marlboro ) / THB 6.13-6.55 
(i.e. USD 7.35/1000 sticks) (L&M) Charges Nos. 558 -
559, 562 -563, 565 -
566, 569 -671, 694 -
695, 698, 700 -780 
 
7.3.1.1.2   Events culminating in the Charges  
7.176.   In August 2006, the DSI launched two criminal investigations into allegations that PMTL had 
evaded customs duties and internal taxes by under -declaring the customs values of c ertain historical 
entries. O ne of these investigations covered approximately 1 ,094 entries of cigarettes imported from 
Indonesia over the period March 2000 to August 2003.  The other  investigation  concerned entries 
imported over the period between 2003 and 2007, and  culminated in the Charges filed in January 
2016 which are the subject of the first recourse to Article 21.5. When the original panel was 
established in 2008, the DSI investigation was still ongoing and had not yet arrived at any conclusion 
on whether to recommend prosecutio n.  
7.177.   On 22 September 2016, i.e. a decade after launching its initial investigation and 13 -16 years 
after the entries at issue  cleared Thai Customs , the DSI issued a Memorandum of Allegations ( "MoA") 
against PMTL.342 One former employee of PMTL was informed of  the allegations by way of a second 
Memorandum of Allegations, dated 7 October 2016.  In the MoA  dated 22 September 2016 , the DSI 
alleged that PMTL committed offences under Section 27  of the Customs Act of Thailand (B.E. 2469 
                                                
338 BoA Ruling, No. GorOr 112/2555/Por9/2555(3.1) and cover letter No. GorKor 0519(8)/(Go rOr)/118, 
16 November 2012 (English translation), (Exhibit PHL -21-B), p. 3. In the first recourse to Article 21.5, the 
Panel found that this BoA Ruling was inconsistent with several provisions of the CVA.  
339 Central Tax Court Ruling, 29 October 2014 (Englis h translation), (Exhibit PHL -32-B), p. 18.  
340 Supreme Court decision on Nov 2012 BoA Ruling of 7 May 2018, 28 December 2017 (English 
translation), (Exhibit PHL -244-B). 
341 At paragraph 77 of its first written submission, the Philippines stated that the Custom s Department 
accepted the declared transaction values for entries that cleared customs after 10 March 2003. Based on the 
text of the Annex to the 2002 -2003 Charges (Exhibit PHL -273-B), it appears that 67 entries cleared customs 
after 10 March 2003.  
342 DSI, Memorandum of Allegation s, 22 September 2016 (English translation), (Exhibit PHL -13-B). 
 WT/DS371/RW2  
 
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  (1926)) (the "Customs Act "), and Section 83 of the Thai Criminal Code and  Section 4 of the 
Amendment Act of the Criminal Code (No. 6) B.E. 2526 (1983)  (the "Criminal Code "). More 
specifically, the DSI alleged that , over the period October 2001 through to August 2003, PMTL 
imported 897 e ntries of Marlboro  and L&M cigarettes , and that "the price of the imported articles  … 
was declared for the calculation of import duty by fraudulently and dishonestly using false price 
lower than the actual price in order to avoid the payment of import duty and to pay lower import 
duty than the one to be paid according to the actual price of goods ".343 The MoA based this conclusion 
on a comparison between: (1) PMTL 's declared transact ion values, referred to as the "false" price; 
and (2) alternative,  "actual " customs values  referred to as the "actual " price.  
7.178.   Although the MoA compared  the "false" transaction values to the supposed "actual " prices 
of the imported goods, it did not explain or provide any further information on the grounds for 
doubting P MTL's declared transaction values, or the basis upon which the "actual " customs values  
were determined. The MoA included the following figures on the "actual " customs price, and the total 
government revenue lost as a result of the alleged under -declaration : 
The prices of Marlboro in all import entries were declared at USD 8.50 and USD 9.71 
per50 packs (1,000 cigarettes), which was calculated into Thai currency at the then 
exchange rate to be THB 7.35 to THB 7.70 per1 pack (20 cigarettes) for each period of 
importation. The prices of L&M in all import entries were declared at USD 7.35 per50 
packs (1,000 cigarettes), which was calculated into Thai currency at the then exchange 
rate to be THB 6.13 to THB 6.55 per1 pack (20 cigarettes). For the actual prices of 
goods which should have been declared for the payment of import duty at such time, 
Marlboro cigarette was THB 9.133353715 t o THB 16.70387976 per 1pack 
(20 cigarettes) according to the import period and exchange rate whereby L&M was THB 
7.561466 to THB 13.9 932672 per 1 pack (20 cigarettes) according to the import period 
and exchange rate.  
The above fraudulent acts caused the payments of customs tax and import duty for 
Marlboro and L&M cigarettes in all import entries to be lower than the actual amount 
and th e shortage amount was THB 8,684,393,280.12.  
7.179.   On 26 January 2017, the Public Prosecutor filed the 2002 -2003 Charges against PMTL an d 
one of its former employees. The competent crimina l court accepted and issued the C harges on the 
same day.344 The Charges cover  780 entries of Marlboro  and L&M cigarettes imported from Indonesia 
between January 2002 and July 2003. In respect of these entries of Marlboro  and L&M cigarettes by 
PMTL, the Charges allege that offences have been committed under Section 27 of the Customs Act, 
as well as other offences that are consequential to a violation of Section 27.345  
7.3.1.1.3   Section 27 of the Customs Act  
7.180.   As the Panel expla ined in Section  7.3.1.1.2 (Section 27 of the Customs Act) of its Report in 
the first recourse to Article 21.5, Section 27 of the Customs Act makes it a crime to avoid or attempt 
to avoid the payment of any customs duties with the intention to defraud the government of th e 
customs duties and taxes which must be paid for such goods. The English translation of Section 27 
submitted by the Philippines reads as follows346, with relevant terms highlighted:  
                                                
343 DSI, Memorandum of Allegation s, 22 September 2016 (English translation), (Exhibit PHL -13-B). 
344 The Criminal Court, Charges, Case Black No. Or. 232/2560, 26 January 2 017 (English translation), 
(Exhibit PHL -14-B). 
345 The other alleged violations are: Section 115 quater of Custom Act B.E. 2469 (1926) (as amended to 
(No. 22) B.E. 2557 (2014)) (English translation), (Exhibit PHL -34-B); Section 3 of the Customs Act (No. 11),  
B.E. 2490 (1947) (English translation), (Exhibit PHL -98-B); Section 10 of the Customs Act (No. 17), B.E. 2543 
(2000) (English translation), (Exhibit PHL -8-B); Sections 83 and 91 of the Criminal Code, Section 4 of the 
Amendment Act of the Criminal Code (No . 6) B.E. 2526 (1983) (English translation), (Exhibit PHL -99-B); 
Sections 4, 5, 6, 7, 8 and 9 of The Reward Giving to Offender Suppression Act. B.E. 2498 (1946) (English 
translation), (Exhibit PHL -16-B). 
346 In the first recourse to Article 21.5, the Panel r eferred to the English translation submitted by the 
Philippines for the reasons set forth in footnote 980 of its Report. In this second recourse to Article 21.5, 
Thailand again submits its own English translations of certain Thai government documents alrea dy submitted 
by the Philippines, e ven though Thailand "does not consider that there are any substantive differences between 
 WT/DS371/RW2  
 
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  Any person who shall import or bring into the Kingdom any uncustomed, restr icted, or 
prohibited goods, or any goods which have not been duly passed through the Customs; 
or shall export or take out of the Kingdom any such goods; or shall assist in any way in 
importing or exporting such goods; or shall, without official authority, remove or assist 
in removing any such goods from any ship, wharf, godown, warehouse, place of 
security, or store; or shall harbour, keep, or conceal, or permit or cause to be 
harboured, kept, or concealed, any such goods; or shall be in any way concerned i n 
carrying, removing, or dealing with such goods; or shall be in any way concerned in any 
evasion or attempted evasion of any duties of Customs , or of any of the laws and 
restrictions relating to the importation, exportation, landing, warehousing, and deli very 
of goods with intent to defraud His Majesty 's Government of any duties due on such 
goods  or to evade any prohibition or restriction of or applicable to such goods; shall for 
each offence be liable to a fine equal to quadruple the duty -paid value of th e goods , or 
imprisonment for a period not exceeding ten years, or both fine and imprisonment.  
7.181.   Thus, Section 27 of the Customs Act makes it a criminal offense to evade the payment of 
"duties on Customs ", with the intention to "defraud the government " of the  "duties " that are "due 
on such goods ". It further provides that the "fine" for such offense shall be four times the "duty-paid 
value of the goods ". 
7.3.1.1.4   The content of the Charges and the Annex  
7.182.   The Charges set forth the allegation that PMTL and one of its form er employees violated 
Section 27 of the Customs Act by declaring a "false price " for Marlboro  and L&M cigarettes contrary 
to the "actual price ", with the intention to defraud the government of taxes and customs duties.347 
The Charges repeat this allegation in the context of providing particulars on each of the 780 entries 
of Marlboro  and L&M cigarettes set forth therein. For each of those 780 entries, the Charges identify 
the "actual price " and state that "the Exhibit atta ched to the Complaint ", or the "Annex " as referred 
to by the parties,  shows the details "with respect to the Number of Import Entry, details and quantity 
of cigarettes for each brand, price per pack of cigarettes falsely and jointly declared by the two 
Defendants, actual price of cigarettes for each brand, amount of tax and duty under customs law 
that the two Defendants and others were liable to pay, and the price of goods including the duty ".  
7.183.   The penalties following a conviction u nder Section 27 of the Cu stoms Act  could include the 
imprisonment of one of PMTL 's former employees, and the payment of fines by PMTL in an amount 
that shall equal four times the duty -paid value. Under the new Customs Act, in the event of a 
conviction, Section 243 provides for the  imposition of "a fine from one half but not exceeding four 
times of the duty additionally payable ".348 The Annex to the 2002 -2003 Charges calculates the deficit 
                                                
Thailand's and the Philippines' translations". Thailand requests that the Panel "use and refer to Thailand's 
translations in its pro ceedings and report", as there "is no a priori reason why the Panel should refer to the 
Philippines' translations simply because the Panel received them first", and as "this is a dispute involving Thai 
measures, the Panel should, a priori, refer to Thailan d's own translations of its own measures". According to 
Thailand, this "will also assist the relevant Thai officials in reading and understanding the Panel's report. The 
Philippines retains the right to object to any of Thailand's translations." (Thailand' s first written submission, 
footnote 13.)  
The Panel recalls that paragraph 16 of its Working Procedures establishes a procedure for the parties to 
object to translations submitted by one another. It is not clear that it would be consistent with the purpos e of 
paragraph 16 to rely on the English translations submitted by Thailand, in the absence of any objection from 
Thailand as to the accuracy of the translations already submitted by the Philippines (and/or putting the onus on 
the Philippines to object). H owever, it is unnecessary to dwell on that issue, because the Panel Report in the 
first recourse to Article 21.5 already presents English translations of certain provisions and terms in the Thai 
Customs Act that are relevant in this second recourse to Arti cle 21.5. The Panel sees  an obvious potential for 
confusion if the Panel in this second recourse to Article 21.5 were to rely on different English translations of 
provisions in the Thai Customs Act that differ from the English translations of the same provisions already 
contained in the Panel Report in the first recourse to Article 21. 5. In addition, Thailand has not explained how 
the use of Thailand's English translations would assist the relevant Thai officials in reading and understanding 
the Panel's Report, in the absence of any substantive differences between Thailand's and the Phi lippines' 
translations.  
347 The Criminal Court, Charges, Case Black No. Or. 232/2560, 26 January 2017 (English translation), 
(Exhibit PHL -14-B). 
348 Thai Customs Act B.E. 2560, 14 May 2017 (English translation), (Exhibit PHL -246-B). See Philippines' 
first wri tten submission, para. 348; Thailand's first written submission, footnote 159.  
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  duty payable on the imports, which amounts to THB 108,928,466 (approximately USD 3.4 
million).349 Thus, the maximum fine, therefore, would amount to four times the deficit duty payable 
(i.e. USD 13.6 million). The Charges also request the Court to order "the payment of a bounty to 
the informant according to the law ". 
7.184.   There were more entries covered in the DSI investigation than in the 2002 -2003 Charges 
because of the 15 -year statute of limitation contained in Section 95(2) of the Thai Criminal Code.350 
Thailand explains that this provision applies in the following manner to the facts of this case351: the 
DSI investigation, which started in August 2006, originally covered 1,094 entries imported from 
Indonesia between 1 March 2000 and 26 August 2003; the MoA, dated 22 September 2016, 
mentions all 1,094 entries because it is required to inform the accus ed of the entire set of entries 
for which the DSI originally considered whether there was any wrongdoing; however, by the time 
the MoA was filed, the statute of limitations had expired for some entries, reducing the number of 
entries subject to the DSI 's case to 897 entries imported from 9 October 2001 to 26 August 2003. 
Finally, when the Public Prosecutor issued the 2002-2003 Charges on 26 January 2017, the statute 
of limitations had expired for a further set of entries, reducing the number of entries subj ect to the 
Charges to 780 entries dated from 22 January 2002 to 28 July 2003.  
7.3.1.1.5   The explanation of how the "actual " value/price was determined  
7.185.   The Charges themselves do not specify what the "actual price " refers to or how it was 
calculated, but  as explained below,  the Thai authorities subsequently offered some clarification to 
PMTL in the context of explaining the basis for the "actual value " in the NoAs.  
7.186.   After the DSI issued its MoA on 22 September 2016,  PMTL sought clarification regarding  the 
basis for the determination of the "actual " value therein. Specifically, o n 7 October 2016, PMTL wrote 
to the DSI, requesting that the DSI explain, among other things, the basis for the valuation of the 
"actual" val ue of goods and which method of customs valuation was employed in the allegation, as 
well as the reasons why the transaction value was rejected .352 PMTL stated that without the 
information that it requested, it was "unable to understand the allegation and un able to give 
statements in defending the case".353 On 3 November 2016, the DSI responded by informing PMTL 
that if it "wish[ed] to obtain the information which [it] stated in the letters that [it] sent to the 
Special Investigation Officers as mentioned above, please contact and coordinate with the public 
prosecutor ".354  
7.187.   On 14 November 2016, PMTL addressed the same questions to the Public Prosecutor, with 
respect to the MoA.355 PMTL received no response.356 There is no information before the Panel on 
whether PMTL sought any further explanation following the issuance of the Charges in January 
2017.357 
7.188.   Although the 2002 -2003 Charges do not p rovide any indication of the factual basis for the 
"actual price ", certain information can be gleaned from the Customs Department 's explanation 
regarding the basis used to determine the "actual value " set out  in the 1,052 NoAs. To recall, o n 
29 November 20 17, Thailand issued 1,052 revised NoAs covering customs entries imported between 
                                                
349 Annex to the 02 -03 Charges, 26 January 2017 (English translation), (Exhibit PHL -273-B). 
350 Section 95(2) of the Thai Criminal Code B.E. 2499 (1956), (Exhibit THA -84). 
351 Thailan d's response to Panel question No. 158, para. 1.1.  
352 Letter from PMTL requesting clarification of the MOA, 7 October 2016 (English translation), 
(Exhibit  PHL-275-B), p. 3.  
353 Letter from PMTL requesting clarification of the MOA, 7 October 2016 (English tran slation), 
(Exhibit  PHL-275-B), p. 1.  
354 Letter from the DSI to PMTL, 3 November 2016 (English translation), (Exhibit PHL -276-B). 
355 Letter from PMTL to the Public Prosecutor, 14 November 2016 (English translation), (Exhibit PHL -
277-B). 
356 Philippines' first written submission, para. 354.  
357 In its comments on the Interim Report, the Philippines states that "As the Panel indicates in 
paragraph 7.191, on 24 July 2017, the Public Prosecutor successfully obtained a court order preventing 
information regarding the 02-03 Charges from being shared with the Philippines and, hence, the Panel. Due to 
this far -reaching non -disclosure order, the Philippines was unable to provide the Panel with information on any 
additional efforts made by PM Thailand to clarify the basis f or the determination of the "actual price" in the 
02-03 Charges. Nor can the Philippines indicate whether, if such efforts were made, they were successful." 
(Philippines' request to review the Interim Report, para. 117.)  
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  January 2001 and July 2003. The revised NoAs demanded payment of THB 25,480,317,518 
(approxima tely USD 800  million)  within 30 days. Under the "reason for assessment " for each NoA, 
the Customs Department stated that "[f]rom the investigation of the Department of Special 
Investigation, it was found that the actual value " was a specified amount per pack (varying by NoA), 
and that was "calculated from the cigarette cost structure o f PT Philip Morris Indonesia obtained 
from the Indonesian government ".358 On 14 December 2017, PMTL sent a letter to the Customs 
Department requesting an explanation of the customs valuation determinations in the 1,052 revised 
NoAs.359 In a letter of 10 Januar y 2018, the Customs Department responded to PMTL 's request for 
an explanation of the customs valuation determinations as follows:  
[T]he Department of Special Investigation had conducted an investigation into Philip 
Morris (Thailand) Limited in the case of importation of Marlboro and L&M cigarettes from 
Indonesia by fa lse declaration to evade duty. The Director General of the Department 
of Special Investigation recommended for prosecution an offence under Section 27 of 
the Customs Act B.E. 2469 (1926), incor porating Section 83 of the Criminal Code and 
Section 20 of the Criminal Procedure Code. The Attorney General issued a prosecution 
order in  a black case No. Or.232/2560. The Customs Department was informed of the 
case status to proceed with relevant actions . In this regard, the Department of Special 
Investigation prepared the table summarizing the CIF prices of Marlboro and L&M 
cigarettes for the Customs Department to assess the value and calculate the taxes and 
duty which were not fully paid. The informatio n of prices in this case is taken care of by 
the Department of Special Investigation. If you wish to know relevant information, [you] 
can inquire directly from the Department of Special Investigation.360 
7.189.   The reasons given by the Customs Department are relevant to the 2002 -2003 Charges 
because 779 of the 780 entries subject to the 2002 -2003 Charges were also covered by the 1,052  
revised NoAs, and the "actual  value " that the Customs Department determined for  those overlapping 
779 entries subject to the NoAs is identical to the "actual price " that the Public Prosecutor determined 
for the purpose of the 2002 -2003 Charges, and that the DSI determined in the MoA. Thus, when the 
Customs Department stated that the "actual " values reflected in the 1,052 revised NoAs were 
"calculated from the cigarette cost structure of PT Philip Morris Indonesia obtained from the 
Indonesian government ", that means that the same is true of the "actual " prices  reflected in the 
2002-2003 Charges.  
7.3.1.1.6   The criminal proceedings  
7.190.   There are ongoing  proceedings before the Thai Criminal Court relating to the Charges . The 
parties indicate d that the trial was expected to begin in late 2018 and would  last until early 2019, 
with a decision from the cour t due shortly thereafter.361 
7.191.   On 24 July 2017, the Public Prosecutor successfully obtained a court order preventing 
information regarding the 2002 -2003 Charges from being shared with third parties  to the criminal 
proceedings , including the Philippines. The no n-disclosure order is far -reaching and covers every 
aspect of the proceedings. For example, PMTL cannot share with any third party – including the 
Philippines and the Philippines ' WTO counsel – any part of the case record, including: ( 1) the charge 
documen ts; (2) court orders (including the non -disclosure order itself) and other formal procedural 
documents; ( 3) the submissions made by either party to the court on any topic; and, 
(4) documentary evidence submitted by either party.362  
7.3.1.2   Claims and order of analy sis 
7.192.   The parties ' requests for findings in relation to the Charges are set out in greater detail in 
Section 3 of the Report. As reflected there, the Philippines ' claims and Thailand 's defences raise 
                                                
358 Sample Notices of Assessment (Eng lish translation), (Exhibit PHL -240-B). 
359 Letter from PMTL to the Director General of the Customs Department, 14 December 2017 (English 
translation), (Exhibit PHL -247-B).  
360 Letter from the Customs Department to PMTL, 10 January 2018 (English translation),  (Exhibit PHL -
250-B).  
361 Philippines' first written submission, para. 341; Thailand's first written submission, paras. 3.39 -3.40. 
362 Philippines' first written submission, para. 362.  
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  numerous  issues. In this section, the Panel will briefly set out the consi derations that inform the 
order of analysis of those claims and defences. For the most part, the Panel 's order of analysis 
reflects the order of analysis in the parties ' submissions.  
7.193.   The Panel will begin with Thailand 's argument that the 2002 -2003 Charges  contain 
insufficient information to allow the identification of the precise content of any conduct that coul d be 
declared WTO -inconsistent. The Philippines submits  that this argument  is essentially a "re-
packaging " of Thailand 's "ripeness " argument from t he first recourse to Article 21.5 .363 Leaving aside 
that characterization,  there is undoubtedly  a significant degree of overlap and repetition between 
the argument that Thailand makes i n this case, and its argument from  the firs t recourse to Article 
21.5 tha t was formulated in terms of "ripeness ". In the first recourse to Article 21.5 , Thailand 
characterized the "ripeness " issue as one going to the Panel 's competence, and presented it  as a 
threshold issue to be resolved prior to addressing the applicability o f the CVA to the Charges.364 
Thailand follows a similar approach in its submissions in this second recourse to Article 21.5. In the 
first recourse to Article 21.5, the Panel addressed this argument as a threshold issue, prior to 
addressing the applicabili ty of the CVA to the Charges. The Panel will follow the same approach, with 
a view to harmonizing the structure of its analysis with that of the Panel Report in the first recourse 
to Article 21.5 .  
7.194.   The Panel will then proceed to address the applicability of t he CVA to the Charges. In that 
connection, the Panel will first address Thailand 's argument that the 2002 -2003 Charges are not 
subject to the CVA on the grounds that the  Public Prosecutor is not part of Thailand 's "customs 
administration ". The Panel will t hen address Thailand 's additional arguments that t he 2002 -2003 
Charges are not subject to the CVA on the grounds that  the Charges do not meet the first or second 
elements of the definition of "customs valuation " in Article 15.1(a) of the CVA. The Panel will also 
consider Thailand's additional comments relating to the "intention to defraud" aspect of the Charges.  
7.195.   After add ressing the above issues relating to the applicability of the CVA to the 2002 -2003 
Charges, the Panel will turn  to the Philippines ' claims that  the 2002-2003 Charges are inconsistent 
with the  CVA obligations  invoked by the Philippines . In the context of ad dressing the Philippines ' 
claims, the Panel will refer back, as necessary, to its earlier factual findings on the Thai authorities ' 
reliance on the CK -21A forms to determine the "actual price ".365  
7.196.   Finally, the Panel will address Thailand 's defence under Article XX of the GATT 1994 . 
Thailand 's defence under Article XX of the GATT 1994 in this second recourse to Article 21.5 raises 
the same two main issues  that arose in the first recourse to Article 21.5 . First, whether Article XX is 
available to justify a vio lation of the CVA. If so, the second issue is whether Thailand has 
demonstrated that the aspects of the Charges giving rise to the inconsistency with the CVA are 
justified under either Article XX(d) or Article XX(a).  
7.3.1.3   Claims not pursued  
7.197.   The Philippines ' panel request contains a number of claims  in respect of the 2002 -2003 
Charges , some of which it has elected not to pursue in this proceeding. In its panel request, the 
Philippines claimed that different aspects of the Charges are inconsistent with several dis tinct 
obligations in the CVA and the GATT 1994. The Philippines has pursued its claims under Art icles 1.1 
and 1.2(a) of the CVA (including both the substantive obligation in the second sentence and the 
procedural obligation in the third sentence366), and its claims under Articles 2 to 7 of the CVA. 
However, the Philippines did not pur sue its claims that were included in the panel request under 
Article 16 of the CVA, or under Article III:2 of the GATT 1994.367 
                                                
363 Philippines' second written submission, paras. 243, 292, and 305.  
364 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.459.  
365 See Section 7.2 (The Thai authorities' reliance on the information in the CK -21A forms).  
366 The Panel recalls that in the first recourse to Article 21.5, the Philippines' panel request included a 
claim under Article 1.2(a), third sentence, in relation to the 2003 -2006 Charges; however, the Philippines did 
not pursue that claim in the course of t he proceeding. (See Panel Report, Thailand – Cigarettes (Philippines)  
(Article 21.5 – Philippines) , para. 7.463.)  
367 Panel request, para. 20, third and fourth bullets. The Philippines has pursued its parallel claim under 
Article 16 of the CVA in relation t o the 1,052 revised NoAs.  
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  7.198.   In its first written submission, the Phili ppines observes that the 2002 -2003 Charges "invoke 
the provisions of a Thai law that provides for the payment of a 'bribe' to informants who facilitate 
the prosecution of certain offences ".368 The Philippines states that the relevant provisions of Thai 
law p rovide that an informant is entitled to receive a "bounty " or "bribe" amounting to 30 percent 
of the potential fine, and therefore the "informant " is personally eligible to receive approximately 
USD 4.1 million in the event of PMTL 's conviction.369 The Panel  notes that in this second recourse to 
Article 21.5, the Philippines has not requested that the Panel make any finding that the alleged 
"bribes " or "rewards " are inconsistent with the CVA. Thus, as was the case in the first recourse to 
Article 21.5, the Pa nel is not called upon to make findings as to the WTO -consistency of Thailand 's 
"bribes " and "rewards " scheme.370 
7.3.2   Existence of a challengeable measure  
7.3.2.1   Introduction  
7.199.   In the first recourse to Article 21.5, Thailand argued that the 2003-2006 Charges were not 
a matter "ripe" for adjudication in WTO dispute settlement proceedings , because they constitute d 
merely an allegation of criminal conduct, and not a judgment by the Criminal Court. In this 
connect ion, Thailand submitted that: (1 ) the 2003 -2006 Charges were inseparable from the criminal 
proceedings that they triggered ; (2) the 2003 -2006 Charges did not represent a customs valuation 
"determination " for the purposes of t he CVA ; and (3) the Philippines ' claims directed at the Charges 
were effectively seeking "an abstract ruling on hypothetical future measures ", namely on the 
outcome of the  then ongoing criminal court proceedings.371 The Panel found that it was not precluded 
from considering the WTO -consistency of the Charges on the basis of a "ripeness doctrine ", because 
the Charges constitute d a distinct measure for purposes of WTO dispute settlement, because they 
were a determination for purposes of the CVA, and because an assessment of the WTO -consistency 
of the Charges d id not require the Panel to engage in speculation on future measures or events, 
notwithstanding that no judgment ha d been rendered by the Criminal Court.372  
7.200.   In this second recourse to Article 21.5, Thailand argues that due to the insufficient factual 
information contained in the 2002 -2003 Charges, it is impossible to identify the precise content of 
any conduct in the Charges that could be declared WTO -consistent or WTO -inconsistent and, as a 
consequence,  the Philippines cannot  make a prima facie  case of inconsistency under the CVA .373 
Moreover, were the Panel to examine the CVA -consistency of a conduct whose precise content has 
not yet materialized or of facts not yet confirmed by the Thai criminal court, t he Panel would be 
substituting its own judgement for the competent authority 's judgment and thereby engaging in a 
de novo review.  
7.201.   The Philippines submits that it is able to make, and has made, a prima facie case that the 
2002-2003 Charges are inconsistent with the CVA374 and adds that Thailand 's argument "re-
packages " its "ripeness " argument raised in the first recourse to Article 21.5.375  
7.202.   The Panel will begin with a summary of the main arguments of the parties. The Panel will 
then analyse the issues raised th rough the same analytical framework used by it in the context of 
the first recourse to Article 21.5. As indicated above, the Panel considered that the salient issues 
are: (1) whether the Charges are a distinct  measure for purposes of WTO dispute settlement ; 
(2) whether the Charges constitute a "determination " for the purposes of the CVA; and (3) whether 
the Panel can make findings on the WTO -consistency of the Charges without engaging in speculation 
as to when or how the ongoing criminal proceedings before the Criminal Court may be concluded, 
and without issuing abstract rulings on hypothetical future measures.376 The Panel will then examine 
whether a different conclusion would be arrived at if it were to analyse the issue before it in terms 
                                                
368 Philippines' first written submission, para. 350.  
369 Philippines' first written submission, para. 351.  
370 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.464.  
371 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.558.  
372 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.606.  
373 Thailand's first written submission, paras. 3.26 -3.43; second w ritten submission, paras.  3.40-3.48; 
opening statement at the meeting of the Panel, paras. 3.24 -3.28. 
374 Philippines' second written submission, paras. 290 -317. 
375 Philippines' second written submission, paras. 243, 292, and 305.  
376 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.575.  
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  of the legal conce pts that Thailand urges the Panel to apply, namely the Philippines being unable to 
make a "prima facie case" or the Panel engaging in a "de novo review ".  
7.3.2.2   Main arguments of the parties  
7.203.   Thailand submits that the 2002 -2003 Charges do not contain sufficient factual information 
to allow the Philippines to make a prima facie  case of inconsistency under the CVA.377 Thailand recalls 
that under the standard of review of Article 11 of the DSU, pane ls are required to make an objective 
assessment of the facts of the case and the applicability of and conformity with the relevant covered 
agreements and that this standard, according to the Appellate Body, constitutes neither de novo  
review as such, nor t otal deference.378 Thailand argues that because a panel cannot conduct a de 
novo review and must critically examine the authority 's explanation in depth, a complaining party 
can make a prima facie  case only if the "precise content " of the measure, at the tim e of the panel 's 
examination, "reflects a conduct that is inconsistent with the CVA ".379 In other words, Thailand states 
that "if a panel were to examine the CVA -consistency of a conduct whose precise content has not 
yet materialized or of facts not yet conf irmed, that panel would risk conducting a de novo 
examination " as it would be substituting its own judgement for the authority 's judgement with 
respect to the fact and "would also risk making predictions about events or measures taken 
subsequent to the ado ption of the challenged measure ".380 
7.204.   Thailand submits that "[t]he veracity and reliability of the arguments put before this Panel 
by the Philippines regarding the information provided by the Indonesian government is a factual 
matter that has not yet been ful ly addressed or resolved by any Thai governmental agency or Thai 
court".381 Specifically, PMTL 's assertion that "the costs reported to the Indonesian government are 
its own 'fabricated plugs ' and, therefore, cannot be used by Thailand for customs valuation p urposes 
… is a factual assertion that has not been addressed yet by Thailand 's Criminal Court ".382 Therefore, 
"one cannot expect that the criminal charges will contain final determinations of the factual 
circumstances "383, which means that "there is not enough information to identify the precise content 
of any conduct that could be declared WTO -consistent or WTO -inconsistent ".384 Thailand clarifies 
that "it is not arguing that there is no measure in the sense of Article 6.2 of the DSU. Rather, the 
amount an d clarity of information available makes it impossible for the Philippines to make a prima 
facie case in respect of the 02 -03 charges ".385 
7.205.   Moreover, Thailand claims that, were the Panel to examine the Philippines ' claims in light of 
the unconfirmed facts, "it would necessarily engage in a de novo  review of these facts " as "it would 
'conduct [] its own assessment, relying on its own judgment ' of the facts before the Thai criminal 
court" thereby in effect "substituting its judgment for that of the Thai Criminal Court "386 and pre -
empting the analysis to be conducted by the Thai criminal court.387 Additionally, an examination of 
the CVA -consistency of the 2002 -2003 Charges "would force the Panel to make predictions about 
the outcome of the Criminal Court 's assessment o f the facts, the same type of analysis against which 
the first Article 21.5 panel and the Appellate Body have previously cautioned ".388 
7.206.   The Philippines submits that it has made a prima facie  case that the 2002 -2003 charges are 
inconsistent with the CVA.389 Thailand's argument that "a lack of factual information in the charges 
means that 'the precise content of the measure ' is uncertain " and the ensuing result that the 
"Philippines cannot make a prima facie case unless the Panel undertakes a de novo review " is 
                                                
377 Thailand's first written submission, para. 3.26; second written submission, para. 3.40.  
378 Thailand's first written submission, para. 3.27.  
379 Thailand's first written submission, para. 3 .29. 
380 Thailand's first written submission, para. 3.30.  
381 Thailand's first written submission, para. 3.36.  
382 Thailand's first written submission, para. 3.41.  
383 Thailand's first written submission, para. 3.37.  
384 Thailand's first written submission, para. 3. 38. 
385 Thailand's first written submission, para. 3.42.  
386 Thailand's first written submission, para. 3.39.  
387 Thailand's first written submission, para. 3.40.  
388 Thailand's first written submission, para. 3.41 . 
389 Philippines' second written submission, paras.  290–317. 
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  incorrect.390 The Philippines asserts that "[t]here is nothing uncertain … about 'the precise content 
of the  measure'. "391 
7.207.   The Philippines recalls that "where a customs administration fails to provide a reasoned and 
adequate explanation for its customs valuation determinations, a panel has no option but to find 
that the competent authority has not performed the analysis correctly ".392 More concretely, the 
Philippines contends that it has "made a prima facie  case of CVA -inconsistency  by showing that the 
Public Prosecutor rejected the transaction values and determined alt ernative actual values using 
CK-21A information that was not fit for use under the CVA".393 In these circumstances, the 
Philippines asserts, the Panel would not be conducting a de novo review, because it would simply be 
reviewing the customs valuation determinations made by the Public Prosecutor.394 Rather, "[t]he 
Panel would only undertake a de novo  review if it made its own determination , under Article 1.2(a) , 
whether the transactions values are  acceptable and/or if it determined its own alternative customs 
values ".395 
7.208.   The Philippines further recalls that the Panel in the first recourse to Article 21.5 ruled that it 
could make findings on the WTO -consistency of the 2003 -2006 Charges without engagin g in 
speculation on future measures or events and held that the 2003 -2006 Charges  were intended to 
have legal effects and legal status in and of themselves; involved a final decision, and not a 
provisional or intermediate step; and were a defined and forma l act taken by an organ of the Thai 
state.396 In this connection, the Philippines points out that Thailand has not explained "how the 
2002-2003 Charges are substantively different from the [2003 -2006] Charges, such that these 
findings do not apply ".397 The Phi lippines asserts that both sets of Charges  reject the transaction 
value on the basis of a comparison with alternative "actual " customs values; were adopted by the 
Public Prosecutor, alleging an offense under Section 27 of the Customs Act; are "intended to have 
legal effect under Thai Law ", and "have legal status in and of themselves "; involve "a final decision " 
and "a defined for mal act " by the Public Prosecutor; and are not "provisional " or "intermediate " 
steps.398 In the Philippines ' view, Thailand 's argument that "the 02 -03 charges are based on 
'unclear ', 'unexamined ', '[un]verified ' and 'insufficient ' information "399 and Thailand 's acceptance 
"that these 'unclear ' facts constitute Thailand 's only evidence  supporting the 02 -03 Charges "400 is 
"deeply troubling " considering the serious and dire ct legal consequences that the C harges entail: 
the accused becoming subject to the mandatory j urisdiction of the criminal court; being required to 
appear before the court to answer the Charges and attend the hearings relating to the Charges; 
having to apply for and pay bail to secure temporary release during the proceedings; having an 
officially re corded indictment and accusations, and having to pay the costs of a defence for criminal 
proceedings.401 
7.3.2.3   Analysis by the Panel  
7.3.2.3.1   General considerations  
7.209.   In the first recourse to Article 21.5, Thailand claimed that the 2003 –2006 Charges 
constituted merely an al legation of criminal conduct, not a judgment by the Criminal Court, and on 
that basis Thailand argued that those charges were not a matter "ripe" for adjudication in WTO 
dispute settlement proceedings. The Panel noted that the concept of "ripeness " does no t appear 
explicitly in any of the covered agreements, and indicated that it was unaware of any panel or 
Appellate Body report that has conducted an analysis of the admissibility or merits of a claim in 
terms of a "ripeness " doctrine.402 Rather than framing the analysis in terms of an "undefined " and 
                                                
390 Philippines' second written submission, para. 294.  
391 Philippines' second written submission, para. 295.  
392 Philippines' second written submission, para. 299.  
393 Philippines' second written submission, para. 301.  
394 Philippines' second written submission, para. 303.  
395 Philippines' second written submission, para. 304.  
396 Philippines' second written submission, para. 307.  
397 Philippines' second written submission, para. 308.  
398 Philippines' second written submission, para. 308.  
399 Philippines' second written submission, para. 312.  
400 Philippines' second written submission, para. 312.  
401 Philippines' second written submission, paras. 313 –314. 
402 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.569.  WT/DS371/RW2  
 
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  "novel " ripeness doctrine, the Panel opted to analyse Thailand 's arguments using the more precise 
standards reflected in the covered agreements and WTO jurisprudence.  
7.210.   In this connection, and  as already noted above, the Panel identified three distinct questions 
raised by Thailand 's ripeness arguments: (1) whether the Charges were a distinct  measure for 
purposes of WTO dispute settlement; ( 2) whether the Charges constitute d a "determination " for the 
purposes of the CVA; and ( 3) whether the Panel could  make findings on the WTO -consistency of the 
Charges without engaging in speculation as to when or how the ongoing criminal proceedings before 
the Criminal Court would  be concluded, and without issu ing abstract rulings on hypothetical future 
measures . The Panel then addressed Thailand 's ripeness argument by answering these questions.  
7.211.   In this second recourse to Article 21.5, Thailand couches its argument in terms that are 
divorced from the analytical framework developed by the Panel in the first recourse to Article 21.5. 
Thailand appears t o reframe the same issue in terms of whether  or not  there is "insufficient 
information " contained "in" or "concerning " the 2002 -2003 Charges to allow the Philippines to 
identify the "precise content " of that measure in order to "make a prima facie case". In its written 
submissions, Thailand employs variable terminology when developing this argument. As noted, 
Thailand sometimes states that there is insufficient informa tion "in" the Charges, and sometimes 
formulates its argument in terms of there being insufficient information concerning the facts 
underlying the Charges. Thailand sometimes states that there has been no "determination "403 of the 
facts, and in other instance s states that the factual circumstances surrounding the 2002 -2003 
Charges which underpin the Philippines ' claims and arguments have not been "confirmed " by the 
Criminal Court. These appear to be alternative ways of formulating the proposition that the Charges 
do not amount to, and no Thai court or agency has yet made, any "determination " of the relevant 
facts, and thus the Charges do not constitute a "determination " for purposes  of the CVA.  The Panel 
also observe s that, unlike its argumentation in the first recourse to Article 21.5, Thailand 's 
arguments in this second recourse to Article 21. 5 are formulated in a manner that stresses the well-
established concepts of "a prima facie  case" and the impermissibility of the Panel conducting a 
"de novo review ".  
7.212.   The Panel appreciates that Thailand 's arguments in this second recourse to Article 21.5 and 
its arguments in the first recourse to Article 21.5 are not, in terms of form, expresse d in an identical 
manner. Indeed, Thailand appears to have gone to some lengths to formulate its arguments in this 
proceeding in a manner that is divorced not only from the analytical framework developed by the 
Panel in the first proceeding, but also from the manner in which Thailand formulated its own 
arguments in that proceeding. Indeed, the Panel notes that there is not a single reference to 
"ripeness " in Thailand 's submissions in this proceeding. However, a careful examination of both sets 
of arguments leads us to conclude that the substance of Thailand 's argument that the 2002 –2003 
Charges do not contain sufficient factual information to allow the Philippines to make a prima facie  
case of inconsistency raise s in essence  the same issues raised by the "ripeness " argument advanced 
by Thailand in relation to the 2003 –2006 Charges, and already addressed – in considerable detail – 
by the Panel in the first recourse to Article 21.5. In other words, the Panel does not consider that 
Thailand has  developed a subst antively novel legal argument different in substance from its 
"ripeness " argument made in the first recourse to Article 21.5.  
7.213.   The Panel considers the similarity between Thailand 's arguments in the first recourse to 
Article 21.5 and its arguments in this second recourse to Article 21.5 to lie in the fact that both sets 
of arguments fundamentally rest on the same premise, that is, Thailand 's assertion that until the 
Charges have been addressed by the Criminal Court and a judgment has been issued, the C harges 
may not be the subject of an examination of WTO -consistency by a panel. As the Panel understand s 
it, in both the first recourse to Article 21.5 and now in this second recourse to Article 21.5, Thailand 
posits that the existence of pending criminal p roceedings, or the lack of a judgement by the Criminal 
Court, constitutes a bar to the Panel 's examination of the Charges. In the first recourse to Article 
21.5, Thailand argued that, absent a judgment by the Criminal Court the 2003 –2006 Charges 
themselves  remained merely an "allegation " of criminal conduct and therefore "a WTO panel has no 
basis on which to evaluate the outcome of the matter at this point ".404 In this second recourse to 
Article 21.5, Thailand maintains that there has been no "determination " of the facts underlying the 
                                                
403 See e.g. Thailand's first written submission, paras. 3.2, 3.31, 3.37 -3.38, and 3.40.  
404 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.561 (referring to 
Thailand's first written submission, para. 6.73).  
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  Philippines ' claims, and that the "factual assertions " contained in the 2002 -2003 Charges thus 
remain "unconfirmed ", insofar as they have not been addressed by Thailand 's Criminal Court, which 
ultimately results in the Charges l acking enough information to identify the precise content of any 
conduct that could be declared WTO -consistent or WTO -inconsistent.405  
7.214.   Additionally, the Panel sees a  further point of similarity  between Thailand 's arguments in the 
first recourse to Article 2 1.5 and Thailand 's arguments in this second recourse to  reside in the 
consequence s that Thailand claims would result from the panel examining the Charges. As will be 
recalled,  in the first  recourse to  Article 21.5, Thailand argued that the "Philippines [wa s] seeking an 
abstract ruling on hypothetical future measures "406 and that if a pane l were to adjudicate the CVA -
consistency of the C harges it would be "put[ting] itself in the place of a domestic tribunal and 
mak[ing] a determination that is within the juri sdiction of that tribunal before the tribunal itself has 
a chance to make its ruling ".407 In the current proceeding, by claiming that examining the CVA -
consistency of the 2002 -2003 Charges would result in the Panel "making predictions about the 
outcome of th e Criminal Court 's assessment of the facts "408 and "substituting its judgment for that 
of the Thai Criminal Court "409, Thailand appears to be reiterating in very similar terms the same 
argument  that it raised in the first recourse to Article 21.5.  
7.215.   Thailand 's argument that there is "insufficient information " contained in, or concerning, the 
2002-2003 Charges also seems to prompt the same question that the Panel asked Thailand to clarify 
in the first recourse to Article 21.5  in relation to its "ripeness " argument . In the first recourse to 
Article 21.5, the Panel asked Thailand to clarify whether it was arguing that the 2003 -2006 Charges 
did "not contain sufficient in formation to discern exactly what is being alleged and exact ly what are 
the grounds for that allegation, such that there is not sufficient information in the content  of the 
Charges to assess their consistency with the CVA, and in that sense the Charges are not "ripe" for 
adjudication ". In response, Thailand first specified  that it was rather arguing that the making of an 
allegation of possible customs fraud cannot be ripe for adjudication by a WTO panel before all of the 
evidence has been heard and there has been a determination by the criminal court that fraud actu ally 
took place , and Thailand then clarified that it was not arguing that the 2003 -2006 Charges contained 
insufficient information to discern the grounds for the accusation of customs fraud.410 
7.216.   In this second recourse  to Article 21.5 , Thailand has framed its  argumentation in terms that 
could be construed that it is now making that argument with respect to the 2002 -2003 Charges (i.e. 
"insufficient information " to discern what is being alleged and the grounds for that allegation). 
Indeed, the Philippines appear ed to construe  Thailand's argument  to be that , in the absence of an 
adequate explanation of the basis for the customs valuation determination, the Philippines cannot 
make its case.411 More specifically, i n its second written submission, the Philippines understood 
Thailand to be making the argument that there is a  lack of explanation in the 2002-2003 Charges 
that makes it impossible to discern exactly what is being alleged in the Charges , and exactly what 
are the grounds for that allegation , such that the Philippines cannot make a prima facie case. 
Furthermore, in its responses to the first set of questions posed by the Panel, Thailand states that 
its argument that "because of the absence of sufficient infor mation, the [20]02-[20]03 Charges do 
not contain sufficiently clear information on which to conclude that the Public Prosecutor acted in a 
WTO-inconsistent manner " stands  in "contrast[] with the 03 -06 Charges that were challenged in the 
first compliance pr oceedings, which the Panel found to contain sufficient information to be 
adjudicated under the CVA ".412  
7.217.   The Panel notes, however, that in its second written submission  Thailand clarifies that the 
Philippines ' inability to make a prima facie  case does not hinge on any alleged "absence of an 
explanation " in the 2002 -2003 Charges and that the 2002 -2003 Charges do contain an explanation 
                                                
405 Thailan d's first written submission, paras. 3.37, 3.38, and 3.41.  
406 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.562 (referring to 
Thailand's first written submission, para. 6.81).  
407 Panel Report, Thailand – Cigarettes ( Philippines)  (Article 21.5 – Philippines) , para. 7.562 (referring to 
Thailand's opening statement at the meeting of the Panel, paras. 27 -28). 
408 Thailand's first written submission, para. 3.41.  
409 Thailand's first written submission, para. 3.39.  
410 Panel Repo rt, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.604 (referring to 
Thailand's response to Panel question No. 100(a), p.26).  
411 Philippines' second written submission, paras. 298 -300. 
412 Thailand's response to Panel question No. 1 35, para. 3.11.  
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  as to the reasons and facts that support the decision to bring criminal charges against PMTL.413 
According to Thailand, the reaso n for bringing criminal charges against PMTL is the rejection by the 
Thai authorities of PMTL 's declared transaction values ba sed on a comparison of those values with  
an "actual price ", which was calculated using pricing and cost information contained in the CK -21A 
forms.414 On this basis, the Panel once again does not understand  Thailand to be arguing that there 
is insufficient information  in, or concerning, the 2002 -2003 Charges  to discern exactly what is being 
alleged , and exactly what are th e grounds for that allegation. Therefore, the Philippines ' argument 
concerning the lack of explanation in the 2002 -2003 Charges would appear to be a rebuttal to an 
argument that Thailand is not making.  
7.218.   Based on the foregoing , the Panel 's analysis proceeds  on the understanding that Thailand 
accepts  that there is sufficient factual informati on regarding the allegation that is made  in the  2002-
2003 Charges , and the basis  for that allegation.  Specifically, the allegation is that PMTL evaded the 
payment of cust oms duties owed by declaring a "false price" which was lower than the "actual price", 
and the basis for that allegation was the determination of the "actual price" on the basis of the 
information reported by PM Indonesia to the Indonesian excise tax author ities in the CK -21A form.  
7.219.   Accordingly, considering that Thailand 's arguments in this proceeding are essentially the 
same as Thailand 's argument s in the first recourse to Article 21.5, the Panel will follow the same 
analytical framework that it developed an d applied in the first recourse to Article 21.5 and assess 
Thailand 's arguments by analysing the following three questions: (1) whether the 2002-2003 
Charges are a distinct  measure for purposes of WTO dispute settlement; (2) whether the 2002-2003 
Charges c onstitute a "determination " for the purposes of the CVA; and (3) whether the Panel can 
make findings on the WTO -consistency of the 2002-2003 Charges without engaging in speculation 
as to when or how the ongoing criminal proceedings before the Criminal Court would  be concluded, 
and without issuing abstract rulings on hypothetical future measures . The Panel will examine these 
questions in in the same order as they are addressed in the Report i n the first recourse to 
Article  21.5. 
7.3.2.3.2   Existence of a distinct measure  
7.220.   In the first recourse to Article 21.5, the Panel explained that "any act or omission attributable 
to a WTO Member can be a measure of that  Member for purposes of dispute settlement proceedings " 
and Thailand did not dispute that the 2003 –2006 Charges were a "measure " within the meaning of 
Article 6.2.415 Thailand, however, contended that because the Charges were not a "distinct " measure, 
or wer e inseparable, from the rest of the criminal proceedings that were triggered by the Charges, 
they could not be analysed separately or in isolation from those proceedings. The Panel 
acknowledged that the DSI investigation, the Charges, the subsequent crimin al proceedings, and 
the eventual outcome of those proceedings could all be said to "form part of a continuum of events 
and measures that are all inextricably linked ".416 The Panel, however, concluded that the 2003 -2006 
Charges had  their own direct legal cons equences, which made them "'operate ' in 'some concrete 
way in [their] own right ' as 'an instrument with a functional life of its own '" and with an "autonomous 
status ".417 
7.221.   The Panel held that the 2003 -2006 Charges had the direct legal consequences of: (1 ) the 
accused becoming subject to the mandatory jurisdi ction of the criminal court; (2 ) the accused being 
required to appear before the court to answer the Charges and attend the hearin gs relating to the 
Charges; (3 ) the accused having to apply for and pay bail  to secure temporary release during the 
proceedings; ( 4) the accused having an officially recorded indictment and accusations; and ( 5) the 
accused having to pay the costs of a defence for criminal proceedings. Finally, the Panel noted that 
the Charges exposed the accused to  negative reputational effects.418  
                                                
413 Thailand's second written submission, paras. 3.45 -3.46. 
414 The Panel has examined the manner in which the Thai authorities relied on the CK -21A information 
to determine the "actual price" above, in Section 7.2 (The Thai authorities' relian ce on the information in the 
CK-21A forms).  
415 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.576 -7.577. 
(referring to Appellate Body Report, US – Corrosion -Resistant Steel Sunset Revie w, para. 81).  
416 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.581.  
417 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.580.  
418 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.580.  WT/DS371/RW2  
 
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  7.222.   The Panel notes that while Thailand argues that there has been no "determination " of 
whether the alleged facts concerning the 2002 -2003 Charges took place, and consequently that the 
Philippines is precluded from identifying the "precise content " of any  measure  that could be found 
to be WTO -inconsistent, Thailand does not explicitly rei terate its argument that the Charges are 
inseparable from the rest of the criminal proceedings including the outcome of the criminal 
proceedings. In its written submissions, Thailand clarified that it is not arguing that there is no 
"measure " in the sense of Article 6.2. In this connection, it may be noted that in the context of the 
first recourse to Article 21.5, Thailand stated that it never disputed that the 2003 -2006 Charges 
were a "measure ". However, Thailand nonetheless argued that the fact that the 2 003-2006 Charges 
were a "measure " did not mean that they could be analysed as a measure distinct  from the 
proceedings that they triggered.  
7.223.   In the Panel 's view, an objective comparison between the 2002 -2003 Charges and the 2003 -
2006 Charges reveals that no thing in their nature or in their substance would prima facie  distinguish 
the two sets of Charges for the purposes of the Panel 's assessment of whether they constitute a 
distinct  measure for purpose of WTO dispute settlement. Both sets of Charges were issu ed 
subsequent to, and on the basis of, recommendations resulting from a criminal investigation by the 
DSI; both sets of Charges allege the violation by PMTL of Section 27 of the Customs Act; and both 
sets of Charges were filed by the same state organ, i.e.  the Public Prosecutor, and were accepted 
and issued by the same judicial body, the Criminal Court. Given that the 2002 –2003 Charges are 
similar in nature and substance to the 2003 –2006 Charges, it then follows that the 2002 –2003 
charges also entail the sa me legal consequences which, as explained in the first recourse to Article 
21.5, give them the status of an "autonomous " instrument that "operates " in "some concrete way 
in its own right " vis-à-vis the remaining steps or actions in the criminal proceedings , including the 
final ruling by the Criminal Court.  
7.224.   Additionally, Thailand has not identified any basis for distinguishing the 2002 -2003 Charges 
from the 2003 -2006 Charges  in the Panel 's assessment of whether the Charges constitute a distinct 
measure for p urpose of WTO dispute settlement . With a view to clarifying Thailand 's position, the 
Panel asked Thailand whether it accepts that the 2002 -2003 Charges constitute a distinct  measure, 
and if no t, whether Thailand could identify any basis for distinguishing the 2002 -2003 Charges from 
the 2003 -2006 Charges so as to allow the Panel to find, without contradicting its prior findings 
regarding the 2003 -2006 Charges, that the 2002 -2003 Charges are not a  distinct measure for 
purposes of WTO dispute settlement. In response, Thailand merely restates that its arguments with 
respect to the 2002 -2003 Charges are different from the arguments it made in relation to the 2003 -
2006 Charges in the first recourse to Article 21.5, and urges the Panel not  to address Thailand 's 
arguments in these compliance proceedings "through prism of the same three questions it analysed 
Thailand 's ripeness argument in the first compliance proceedings ".419 For the reasons already stated,  
the Panel  disagree s. 
7.225.   Thus, b ased on the foregoing  the Panel  conclude s that the 2002-2003 Charges , like the 
2003-2006 Charges at issue in the first recourse to Article 21.5,  constitute a distinct measure for 
purposes of WTO dispute settlement. The Panel hereby incorporate s by reference th e reasoning in 
Section 7.3.4.3.2  (Existence of a distinct 'measure ') of the Panel Report in the firs t recourse to Article 
21.5.  
7.3.2.3.3   Existence of a determination for purposes of the CVA  
7.226.   The Panel recalls that in the first recou rse to Article 21.5, Thailand argued that because the 
2003-2006 Charges were "a mere accusation of wrong -doing, they [did] not represent a customs 
valuation 'determination ' for the purposes of the CVA ". Among other things, Thailand argued that 
the 2003 -2006 Charges did not meet the threshold of a "determination " in the ordinary sense of the 
term, one dictionary definition of which is "the settlement of a suit or controversy by the authoritative 
decision of a judge or arbiter ".420 In responding to Thailand 's argument the Panel anchored its 
reasoning in the consistent line of cases interpreting the term "determination " by the Appellate 
Body.421 On this basis, the Panel reasoned that the Charges represented "the determinate opinion " 
                                                
419 Thailand's response to Panel question No. 135, para. 3.13.  
420 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.586 (referring to 
Thailand's responses to Panel question No. 3 8(b) and (c)).  
421 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.591.  
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  or "determinate conclusion " of the Public Prosecutor422, and the "final decision ", and not a 
"provisional " or "intermediate " step, "arrived at " again by the Public Pros ecutor, that PMTL acted in 
violation of Section 27; and for the purpose of prosecuting an offence under Section 27, the issuance 
of the Charges constitutes a "determination ".423 The Panel therefore concluded that the 2003 -2006 
Charges constituted a "determin ation" for purposes of the CVA.  
7.227.   In this second recourse to Article 21.5, Thailand appears to raise a similar line of argument. 
Specifically, Thailand repeatedly couches its argumentation in terms of the absence of a 
"determination " of the facts. Thus, Thai land variously states that the Philippines cannot sustain its 
claim that, through 2002 -2003 the Charges, "Thailand has made a 'determination ' of customs value 
when it has merely initiated a process to determine whether customs fraud took place "424, and that 
"one cannot expect that the criminal charges will contain final determinations  of the factual 
circumstances ".425  
7.228.   In the Panel 's view, an objective comparison between the 2002 -2003 Charges and the 2003 -
2006 Charges reveals that nothing in their nature or in their substance would prima facie  distinguish 
the two sets of Charges for the purposes of assessing  of whether they involve a "determination " for 
the purposes of the CVA. As the Panel has outlined above, the nature and substance of the 2002 -
2003 Charges re semble those of the 2003-2006 Charges.426 Like the 2003 -2006 Charges in the first 
recourse to Article 21.5, the Panel  consider s that the 2002 -2003 Charges, too, represent the "final 
decision " or "determinate conclusion ", and not an intermediate act, by the Public Prosecutor that 
PMTL acted in violation of Section 27 of the Customs Act. This "final decision " by the Public Prosecutor 
is taken for the purpose, and with the clear intention, of triggering criminal proceedings  aimed at 
prosecuting an offence under Section 27. Although Thailand clarifies that these facts will 
subsequently have to be clarified or confirmed by the Thai Criminal Court, the Panel does not see 
this subsequent step by the Criminal Court as attenuating  the prior distinct "determination " by the 
Public Prosecutor that PMTL has contravened Section 27 and the ensuing decision to file charges in 
order to prosecute this offence.  
7.229.   Furthermore, the Panel notes that Thailand in its submissions does not point to a ny fact that 
would serve as a basis for distinguishing the 2002 -2003 Charge s from the 2003 -2006 Charges for 
purposes of assessing  whether the Charges constitute a "determination " for purpose of the CVA . 
With a view to clarifying Thailand 's position, the Pa nel asked Thailand whether it accepts that the  
2002-2003 Charges constitute a "determination ", and if no t, whether Thailand could identify any 
basis for distinguishing the 2002 -2003 Charges from the 2003 -2006 Charges so as to allow the Panel 
to find, witho ut contradicting its prior findings regarding the 2003 -2006 Charges, that the 2002 -
2003 Charges are not a "determination " for purposes of the CVA. In response, Thailand merely 
restates that its arguments with respect to the 2002 -2003 Charges are different from the arguments 
it made in relation to the 2003 -2006 Charges in the first recourse to Article 21.5, and urges the 
Panel not  to "address Thailand 's arguments in these compliance proceedings through prism of the 
same three questions it analysed Thailand 's ripeness argument in the first compliance 
proceedings ".427 For the reasons already stated, the Panel disagree s.  
7.230.   Based on the foregoing,  the Panel  consider s that the 2002-2003 Charges , like the 2003 -
2006 Charges at issue in the first recourse to Article 21.5,  constitute a "determination " for purposes 
of the CVA.  The Panel hereby incorporate s by reference th e reasoning in Section 7.3.4.3.3  (Existence 
of a "determination " for purposes of the CVA) o f the Panel Report in the firs t recourse to Article 21.5.  
7.3.2.3.4   Speculation on future measures or events  
7.231.   In the first recourse to Article 21.5, Thailand argued that "panels should not engage in 
exercises in speculation to predict either when or how a matter before it may be concluded and 
                                                
422 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.590.  
423 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.595.  
424 Thailand's first written submission, para. 3.31.  
425 Thailand's first written submission, para. 3.37. (emphasis added)  
426 As already noted above, both sets of Charges were issued subsequent to, and on the basis of , 
recommendations resulting from a criminal investigation by the DSI; both sets of Charges allege the violation 
by PMTL of Section 27 of the Customs Act; and both set of Charges were filed by the same state organ, i.e. the 
Public Prosecutor, and were accep ted and issued by the same judicial body, the Criminal Court.  
427 Thailand's response to Panel question No. 135, para. 3.13.  
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  should not issue abstrac t rulings on hypothetical future measures ", such as the outcome of pending 
criminal proceedings , and that "an abstract ruling on hypothetical future measures is not necessary 
nor helpful to the resolution of this dispute ".428 While the Panel agreed with the general proposition  
that panels should not engage in such speculation, the Panel considered that in the circumstances 
of that case, it would not need to engage in speculation on future measures or events in order to 
make findings on the WTO -consistency of the 2003-2006 Charges because the Charges were "a 
defined and formal act, taken by an organ of the Thai Sate, on a date certain in the past " and an 
assessment of the content and meaning of the Charges did "not necessitate " making "predictions 
about events or measures taken subsequent to the issuance of the Charges  on 18 January 2016 ".429 
7.232.   In this second recourse to Article 21.5, Thailand appears to be reiterating the same 
argument, in almost identical terms, when it states that examining the CVA -consistency of  the 2002-
2003 Charges would force the Panel to make predictions about the outcome of the Criminal Court 's 
assessment of the facts .430 However, in its submissions, Thailand asserts that this is so, without 
engaging at all with the Panel 's prior analysis of this point, and without elaborating on why or how 
an assessment of the content and meaning of the 2002-2003 Charges would  necessitate  making 
predictions about events or measures taken subsequent to the issuance of the Charges .  
7.233.   In the Panel 's view, an objective comparison between the 2002 -2003 Charges and the 2003 -
2006 Charges reveals that nothing in their nature or in their substance w ould prima facie  serve to 
distinguish the two sets of Charges for the purposes of assessing  whether an examination of the 
Charges would necessarily require speculating about future events or measures. In these 
circumstances, the Panel considers, as it did in relation to the 2003 -2006 Charges, that the 2002 -
2003 Charges are a "defined and formal act, taken by an organ of the Thai state, on a date certain 
in the past ", an act which was completed on the day the 2002 -2003 Charges were issued , i.e. 
26 January 20 17 and which is "distinct " from the subsequent criminal court proceedings or their 
outcome. Furthermore, the Panel sees no indication in the Philippines ' arguments that would suggest 
that the Philippines is relying on events or measures subsequent to the C harges to establish the 
WTO-inconsistency of the Charges. Bearing these considerations in mind, the Panel holds the view 
that an assessment of the content and meaning of the 2002-2003 Char ges does not necessitate that 
it make predictions about events or me asures taken subsequent to the issuance of the Charges.  
7.234.   Additionally, Thailand does not appear to raise, in its submissions, any basis for 
distinguishing the 2002 -2003 Charges from the 2003 -2006 Charges in this respect . With a view to 
clarifying Thailand 's position, the Panel asked Thailand whether there is any basis for the Panel to 
distinguish the 2002 -2003 Charges from the 2003 -2006 Charges so as to allow the Panel to find, 
without contradicting its prior findings regarding the 2003 -2006 Charges, that th e Panel cannot rule 
on the WTO -consistency of the 2002 -2003 Charges without engaging in speculation on future 
measures or events. In response, Thailand merely restates that its arguments with respect to the 
2002-2003 Charges are different from the argument s it made in relation to the 2003 -2006 Charges 
in the first recourse to Article 21.5, and urges the Panel not to address Thailand 's arguments in 
these compliance proceedings "through prism of the same three questions it analysed Thailand 's 
ripeness argumen t in the first compliance proceedings ".431 For the reasons already stated, the Panel  
disagrees.  
7.235.   On the basis of the foregoing, the Panel  considers that, as was the case with respect to the 
2003-2006 Charges at issue in the first recourse to Article 21.5, it  can make findings on the WTO -
consistency of the 2002-2003 Charges without engaging in speculation on future measures or 
events. The Panel hereby incorporate s by reference th e reasoning in Section 7.3.4.3.4  (Speculation 
on future measures or events ) of the Panel Report in the firs t recourse to Article 21.5.  
7.3.2.3.5   The issues of making a prima facie  case and conducting a de novo  review  
7.236.   As already explained, in this second recourse to Article 21.5 Thailand seeks to reframe the 
issue in terms of whether ther e is "insufficient information " contained "in" or "concerning " the 2002 -
2003 Charges to allow the Philippines to "make a prima facie case" by identifying the "precise 
                                                
428 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.598 (referring to 
Thailand's first written submission, paras. 6.64 and 6.70).  
429 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.604.  
430 Thailand's first written submission, para. 3.41.  
431 Thailand's response to Panel question No. 135, para. 3.13.  WT/DS371/RW2  
 
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  content " of that measure. Thailand 's arguments are formulated in a manner that stresses the well-
established concepts of "a prima facie case" and the impermissibility of the Panel conducting a 
"de novo review ".  
7.237.   Based on the Panel 's reading of Thailand 's submissions, it appears that the fundamental 
premise at the root of Thailand 's argument is that the 2002 -2003 Charges  do not constitute a 
"determination " for purposes of the CVA . For instance, Thailand states that "the 2002 -2003 Charges 
do not constitute a final determination  regarding PMTL 's customs values, and therefore, their co ntent 
cannot yet reflect any WTO -inconsistent conduct "432; and that, through the 2002 -2003 Charges, 
Thailand has merely initiated "a process to determine whether the customs fraud took place " rather 
than "a determination  of customs value ".433 In developing thi s argument, Thailand clarifies that the 
Charges do not contain "final determinations  of the factual circumstances " and this means that, at 
present, there is not enough information to identify the "precise content " of any conduct that could 
be declared WTO -consistent or WTO -inconsistent .434 According to Thailand, it follows from the 
absence of any such "determination " that if the Panel were to rule on the Philippines ' claims 
concerning the 2002-2003 Charges, the Panel would necessarily conduct an impermissible "de novo  
review " as the Panel "would have to examine facts and to reach conclusions, specifically, as to 
whether customs fraud took place even before a Thai court has made this determination ".435  
7.238.   Therefore, it appears that the essence of Thailand 's argumentation is premised on the 
proposition that because there is no ruling of the Criminal Court, and hence no confirmation of the 
factual matters, there can be no "determination ".436 While Thailand seeks to reframe the issue in 
terms of the Philippines ' ability to make "a prima facie case" and the impermissibility of the Panel 
conducting a "de novo review ", its arguments in connection with those concepts appear to be 
inextricably linked to the premis e that the Charges do not reflect, or entail , any customs valuation 
"determination ". The Panel already concluded above that the 2002 -2003 Charges do constitute a 
"determination " for purposes of the C VA. Accordingly, even if the Panel reframed the issue in the 
manner suggested by Thailand, the outcome would be no different: the Panel would find, as a result 
of the 2002 -2003 Charges constituting a "determination ", that there is "sufficient information " 
contained "in" or "concerning " the 2002 -2003 Charges to allow the Philippines to "make a prima 
facie case" by identifying the "precise content " of that measure, and that the Panel can rule on the 
WTO-consistency of the Charges without engaging in an impermissi ble "de novo review ".  
7.239.   Having said this, the Panel sees  no reason to reframe the issue in terms of whether there is 
"insufficient information " contained "in" or "concerning " the 2002 -2003 Charges to allow the 
Philippines to "make a prima facie case" by ide ntifying the "precise content " of that measure, or in 
terms of the Panel engaging in "de novo review ". As explained at the outset437, the Panel  sees a 
potential for  confusion if it were to present its analysis and conclusions in terms different from those 
of the Panel Report in the first recourse to Article 21.5, insofar as it is confronted with the same or 
similar issues raised in the first recourse to Article 21.5.   
7.3.2.4   Conclusion  
7.240.   For the reasons set forth above, the Panel find s, as it did in relation t o the 2003 -2006 
Charges in the first recourse to Article 21.5, that it is not precluded from considering the WTO -
consistency of the 2002 -2003 Charges, because they constitute a distinct "measure " for purposes 
of WTO dispute settlement , they constitute a "determination " for purposes of the CVA , and because 
                                                
432 Thailand's f irst written submission, para. 3.2; and second written submission, para. 3.40. (emphasis 
added)  
433 Thailand's first written submission, para. 3.31. (emphasis added)  
434 Thailand's first written submission, paras. 3.37 -3.38. (emphasis added)  
435 Thailand's secon d written submission, para. 3.40. (emphasis added)  
436 Thailand further explains that the Philippines' claim that the cost information reported to the 
Indonesian authorities by PM Indonesia cannot be used by Thailand for customs valuation purposes is a 
"factual assertion" or "factual matter" that has not been "addressed" or "resolved" by Thailand's Criminal 
Court, and therefore remains "unexamined" and "unconfirmed" or that the "veracity" or "reliability" of the 
factual assertions underpinning the Philippines ' claim can only be confirmed by way of a ruling of the Criminal 
Court. (Thailand's first written submission, paras. 3.36 and 3.41) The Panel understands this "confirmation" of 
the factual assertions to be the "determination" that is lacking in the Charges , the absence of which, in the 
view of Thailand, makes it impossible to identify the precise content of any conduct that could be declared 
WTO-consistent or WTO -inconsistent.  
437 See Section 7.1.2.2 (Reliance on the Report in the Philippines' first recourse to Article 21.5).  WT/DS371/RW2  
 
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  an assessment of the WTO -consistency of the Charges does not require the Panel to engage in 
speculation on future measures or events, notwithstanding that no judgment has been rendered by 
the Cri minal Cour t. Refram ing the issue in terms of whether there is "insufficient information " 
contained "in" or "concerning " the 2002 -2003 Charges to allow the Philippines to "make a prima 
facie case" by identifying the "precise content " of that measure, or whether an as sessment of the 
WTO-consistency of the Charges would require the Panel to engage in a "de novo review " would not 
change  the outcome.  
7.3.3   Applicability of the CVA to the Charges  
7.3.3.1   Introduction  
7.241.   Articles 1 through 7 of the CVA provide  for methods of determining the customs value of 
imported goods. Article 15.1(a) of the CVA defines the "customs value of imported goods " as "the 
value of goods for the purposes of levying ad valorem  customs duties on imported goods ". As with 
the 2003 -2006 Cha rges at issue in the first recourse to Article 21.5, the 2002 -2003 Charges filed by 
the Public Prosecutor set forth the allegation that PMTL violated Section  27 of the Customs Act by 
declaring a "false price " for Marlboro  and L&M cigarettes contrary to the  "actual price ", with the 
intention to defraud the government of taxes and customs duties. Pursuant to Section 27 of the 
Customs Act, the penalties upon conviction may include the imprisonment of one of PMTL 's former 
employees, and the payment of fines by PMTL.  
7.242.   In the first recourse to Article 21.5, Thailand argued that the CVA was inapplicable to the 
2003-2006 Charges. Thailand argued th at this was the case because: ( 1) the CVA only applies to 
measures taken by a "customs administration ", which the Public  Prosecutor is not a part of ; (2) the 
2003-2006 Charges did not satisfy the first element of the definition of "customs valuation " in 
Article  15.1(a) of the CVA, as they did not determine "the value of goods " imported by PMTL and 
the references to the "actual prices " contained in the Annex to the 2003 -2006 Charges only served 
to establish a possible benchmark for a fine in the event of a conviction for customs fraud; ( 3) the 
Charges did not satisfy the second element of th e definition of "customs valuation " in Article 15.1(a), 
as they were not "for purposes of l evying ad valorem  duties "; and ( 4) allegations under Section 27 
of the Customs Act have at their core the element of an "intention to defraud " the government, 
which is neither found nor regulated in Articles 1 through 7 of the CVA.  
7.243.   The Panel individually addressed each of these arguments in  its Report in the  first recourse 
to Article 21.5 .438 For the detailed reasons set forth in its Report, the Panel concluded that: ( 1) "the 
obligations in Articles 1, 2 and 3 of the CVA invoked by the Philippines in this case apply to any 
organ of the state that makes a 'customs valuation ' determination ", and it was therefore "unable to 
agree with Thailand that the CVA is inapplicable to the Charges on the grounds that they were issued 
by the Public Prosecutor, which is not a part of the 'customs administration '"439; (2) the 2003 -2006 
Charges did determine "the value of goods " imported by PMTL, finding  that "[b]ased on … the plain 
meaning  of the Charges and their Annex, … the Charges 'fix or determine the monetary value of 
PMTL's imported cigarettes ' for the purpose of customs valuation, and that they do so on the basis 
of King Power 's prices"440; (3) the Public Prosecutor 's determination of the monetary worth or price 
of PMTL's imported goods for the purpose of determining the amount of the ad valorem  customs 
duties that should have been levied  on these goods, in the context of an allegation that PMTL 
declared false prices in order to evade customs duties, suffice d to establish that this valuation was 
made "for the purposes of levying  ad valorem customs  duties on imported goods "441; and ( 4) in line 
with the Appellate Body 's analysis in US – 1916 Act , the obligations in Articles 1 to 7 of the CVA 
applied  to the customs valuation aspect of the Charges, despite the fact that the measure at issue 
include d an additional aspect not regulated by the CVA, i.e. the "intention to defraud ".442 
                                                
438 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , Section 7.3.5 
(Applicability of the CVA to the Charges).  
439 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.644. The Panel 
added that "[h]aving reached that conclusion, we consider it unnecessary to reach any definitive conclusion on 
the scope of the term 'customs administration'".  
440 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines ), para. 7.664.  
441 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.762.  
442 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.683  
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  7.244.   In this second recourse to Article 21.5, t he Philippines submits that the CVA a pplies to the 
2002-2003 Charges.443 It maintains that the 2002 -2003 Charges and their Annex, like the 2003-
2006 Charges and their Annex, determine the monetary value of PMTL 's imported goods for the 
purposes of calculating the amount of ad valorem customs duties due on those goods  in the sense 
of Article 15.1(a) of the CVA .444  
7.245.   Thailand argues that the CVA does not apply to the 2002 -2003 Charges.445 The Panel 
understands Thailand to argue that: (1) the CVA is inapplicable to the 2002 -2003 Charges because 
the Public Prosecutor is not a part of Thailand 's "customs administration "446; (2) the 2002 -2003 
Charges do not satisfy the first element of the definition of "customs valuation " in Article 15.1(a) of 
the CVA, because the reference to the "actual price " in the 2002 -2003 Charges is to be understood 
as merely establishing an approximate value of the goods made in the context of setting out the 
accusation that PMTL 's declared price is not  the price actually paid, and merely identifying a possible 
benchmark for a fine447; (3) the 2002 -2003 Charges do not satisf y the second element of 
Article  15.1(a), because they ar e not "for purposes of levying ad valorem  duties "448; and ( 4) the 
Appellate Body ' findings in US -1916 Act  do not support the conclusion that the CVA applies to 
measures that have, as their core element, the "intention to defraud " the government.449 
7.3.3.2   Main arguments of the parties  
7.246.   Thailand argues that the CVA does not apply to the 2002 -2003 Charges because the Pub lic 
Prosecutor is not part of Thailand 's "customs administration ". Thailand reiterates its argument, made 
in the first recourse to Article 21.5, that the disciplines of the CVA apply only to WTO Members ' 
"customs administration ", and recalls that the CVA "contains multiple references to 'customs 
administration ' when explaining the organ of the state to which CVA disciplines apply ".450 Thailand 
incorporates its arguments from the first compliance proceeding451, and emphasizes that the Revised 
Kyoto Convention of  the World Customs Organization (WCO) provides a definition of "Customs " 
which confirms that entities responsible for enforcing criminal offences, such as the Public 
Prosecutor, are not considered part of "customs ".452 Thailand also refers to a letter from t he WCO 
Secretariat to Thailand dated 6 July 2018 that, in Thailand 's view, confirms that the Public Prosecutor 
is not a part of the "customs administration ".453 
7.247.   Thailand argues that the 2002 -2003 Charges do not determine "the value of goods " imported 
by PMTL  in the sense of the first element of Article 15.1(a). Thailand recalls that at paragraph 7.649 
of its Report in the first recourse to Article 21.5, the Panel stated, in the context of determining 
whether the 2003 -2006 Charges involved a determination of "the value of goods " imported by PMTL, 
that the Panel would have been inclined to agree with Thailand and answer that question in the 
negative if Thailand had been able to substantiate "its interrelated assertions that the Charges allege 
customs fraud based  on a determination that the price that PMTL declared  to have paid to PMPMI 
was not the actual  price that was paid to PMPMI, and that the references to King Power 's prices in 
the Annex merely serve as a possible benchmark for the purposes of a fine and not as a basis for 
determining the actual customs value of PMTL 's imported goods ". In its first written submission, 
Thailand argues that in this case, the 2002 -2003 Charges accuse PMTL of declaring an import value 
that is not the price actually paid b y the  buyer to the seller, and therefore constitute the kind of 
"customs fraud " that the Panel in the first recourse to Article 21.5 said , at paragraph 7.6 49 of its 
                                                
443 Philippines' second written submission, paras. 2 11-289. 
444 Philippines' first written submission, paras. 380 -410; second written submission, paras. 265 -289; 
opening statement at the meeting of the Panel, paras. 30 -58. 
445 Thailand's first written submission, paras. 3.4 -3.25; second written submission, para s. 3.3-3.39; 
opening statement at the meeting of the Panel, paras. 3.1 -3.23.  
446 Thailand's first written submission, paras. 3.4 -3.9; second written submission, para. 3.3.  
447 Thailand's first written submission, paras. 3.10 -3.25; second written submission, paras. 3.4 -3.39.  
448 Thailand's opening statement at the meeting of the Panel, pa ras. 3.16 -3.19.  
449 Thailand's opening statement at the meeting of the Panel, para. 3.20.  
450 Thailand's first written submission, para. 3.4.  
451 Thailand's first written submission, para. 3.4 (referring to Thailand's first written submission in the 
first com pliance proceedings, para. 6.29; Thailand's response to Panel question No. 48).  
452 Thailand's first written submission, paras. 3.5 -3.7. 
453 Thailand's second written submission, para. 3.3 (referring to a Communication from the World 
Customs Organization to Th ailand's Director of Customs Standards and Procedure Bureau, 6 July 2018, 
(Exhibit  THA-68)). 
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  Report, that it was inclined to agree fell outside of the scope of application of the CVA.454 In the 
course of the proceeding, Thailand also developed other arguments on the first element of 
Article  15.1(a), as elaborated below in paragraphs 7.286 -7.287.  
7.248.   Thailand argue s that the 2002 -2003 Charges do not satisf y the second element of 
Article  15.1(a) of being "for the purposes of levying ad valorem  customs duties " because neither the 
accusation nor the related penalty have any "direct repercussion " for455, or "direct connection " to456, 
the amount of the ad valorem  duties levied. Thailand disagrees with the Pa nel's finding, in the first 
recourse to Article 21.5, that the terms "for the purposes of levying ad valorem  duties " embrace 
"any determination of the value of imported goods for the purpose of determining the amount of 
ad valorem  duties due ".457 Thailand submits that, for a valuation measure to satisfy the second 
element of Article 15.1(a), it cannot be an abstract determination of the amount of customs duties 
that are "due" or that "should have been paid ".458 Rather , the valuation measure "must be  made for 
the calculation of duties that are to be collected from the importer ".459 Thailand submits that the 
approach taken by the panel in Colombia – Ports of Entry supports its narrower interpretation.460 
Thailand notes, as examples of measures that entail a valuation of imported goods that are not 
adopted with the purpose of levying ad valorem  customs duties, risk assessment tools based on 
reference values or minimum values and guarantees to secure the payment of customs duties 
ultimately levied.461 
7.249.   The Phili ppines recalls that in the first recourse to Article 21.5, the Panel already carefully 
considered and rejected Thailand 's argument that the CVA did not apply to criminal charges because 
they were issued by the Public Prosecutor, which is not part of Thaila nd's "customs 
administration ".462 The Philippines recalls the Panel 's finding that the CVA applies to any government 
entity that makes a customs val uation determination, as set forth in Article 15.1(a) of the CVA, and 
submits that there is "no basis for Thai land's new argument that the CVA narrows the scope of the 
term 'customs administration ' using the definition of 'Customs ' in the Revised Kyoto Convention ".463 
In this regard, the Philippines considers that "[a] WTO adjudicator cannot incorporate into a WTO 
covered agreement a definition from a non -WTO treaty, without an appropriate textual basis in the 
WTO agreement itself. "464  
7.250.   With respect to the first element of Article 15.1(a), the Philippines maintains that the 2002 -
2003 Charges and their Annex, like the 2003 -2006 Charges and their Annex,  fix or determine the 
monetary value of PM TL's imported cigarettes, because they establish the alleged "actual " or "found " 
price for each of the 780 entries , and compare the "declared " price against the higher "actual " price. 
The Philippines points out that "every single substantive clause of the 02 -03 Charges refers to the 
'actual ' prices of the imported goods ", and that the "Annex similarly provides exact figures for the 
'actual ' or 'found ' price for each of the 780 e ntries ".465 In response to Thailand 's assertion that the 
2002-2003 Charges do not determine any customs value for the imported goods, the Philippines 
submits that Thailand "entirely fails to explain the nature of the 'actual price ' that it determined ".466 
In response to Thailand 's repeated citation to the Panel 's statement that "an allegation of customs 
fraud could be made without ever seeking to determine the customs value o f the importer 's goods ", 
the Philippines states that what this Panel 's statement means is that "the fact that not all  cases of 
customs fraud involve a customs valuation determination subject to the CVA does not mean that the 
CVA never  applies to cases of fraud ".467 The Philippines raises several grounds for rejecting 
Thailand 's assertion that the Charges concern "customs fraud ", and Thailand 's initial assertion that 
the references to the "actual price " in the Charges should be read as a reference to the "price actually 
                                                
454 Thailand's first written submission, paras. 3.10 -3.25.  
455 Thailand's opening statement at the meeting of the Panel, paras. 3.16 and 3.19.  
456 Thailand's response to Panel question No. 171(a), para. 6.27.  
457 Thailand's opening statement at the meeting of the Panel, paras. 3.15 -3.16. 
458 Thailand's response to Panel question No. 171(a), para. 6.9.  
459 Thailand's response to Panel question No. 171(a), para. 6.9.  
460 Thailan d's response to Panel question No. 171(a), paras. 6.4 -6.10. 
461 Thailand's opening statement at the substantive meeting of the Panel, paras. 3.16 –3.18. 
462 Philippines' second written submission, paras. 255 -260. 
463 Philippines' second written submission, para. 264.  
464 Philippines' second written submission, para. 263.  
465 Philippines' first written submission, para. 404.  
466 Philippines' opening statement at the meeting of the Panel, para. 35.  
467 Philippines' opening statement at the meeting of the Panel, para. 56 .  
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  paid or payable ".468 In any event, the Philippines argues th at even if the 2002 -2003 Charges are 
understood as alleging "customs fraud " in the sense that PMTL 's declared value was not the "price 
actually paid or payable ", this would constitute a customs valuation determination to which the CVA 
would apply.469  
7.251.   As reg ards the second element of Article 15.1(a), the Philippines maintains that the 2002 -
2003 Charges and their Annex, like the 2003 -2006 Charges and their Annex, calculate exactly the 
amount of taxes and ad valorem  customs duties purportedly "underdeclared " and/or "underpaid " – 
that is, "due" – on each entry. The Philippines observes that every single clause of the 2002 -2003 
Charges refers to the "amount of tax and [ ad valorem  customs] duty under customs law that the 
two Defendants and others were liable to pay "470, and thus establish es the amount of ad valorem  
duties that, to use the Panel 's words, "should have been collected " from the importer.471 The 
Philippines argues, in respo nse to Thailand, that the Panel 's interpretation of the words "for purposes 
of levying ad valorem  duties " does not lead to the consequence that risk assessment tools based on 
reference values or minimum values, or guarantees to secure the payment of custom s duties 
ultimately levied, constitute "customs valuation determinations " subject to the obligations in 
Article  1 through 7.472 
7.3.3.3   Analysis by the Panel  
7.3.3.3.1   General considerations  
7.252.   As already indicated above, in the first recourse to Article 21.5, the Panel separat ely 
addressed Thailand 's arguments concerning the non -applicability of the CVA based on: ( 1) the 
agency that filed the Charges; ( 2) the meaning of the Charges; ( 3) the consequences of the Charges; 
and (4) the "intention to defraud " aspect of the Charges. B efore doing so, the Panel reviewed several 
general considerations pertaining to  the applicability of the CVA to criminal measures concerning 
customs fraud which may be useful to recall for the purposes of the present case.  
7.253.   The Panel first observed that as a matter of treaty interpretation, the absence of treaty 
language qualifying the scope of application of an obligation to a particular sphere of municipal law 
suggests that the obligation may, in principle, apply to any measure taken in the context of a ny 
sphere of municipal law, including criminal law.473 The Panel then noted that previous dispute 
settlement panels had reviewed the WTO -consistency of measures taken in the sphere of criminal 
law, and set forth its understanding that those prior cases estab lish that "the legal framework to be 
applied by a panel does not change when the measure at issue is adopted in the sphere of a Member 's 
criminal law ".474 
7.254.   The Panel also observed that it was common ground between the parties that there is nothing 
in the text  of the CVA that prevents Members – developing or developed – from taking tough 
enforcement measures against customs fraud.475 With regard to the concept of "customs fraud ", the 
Panel then explained that, in the context of customs valuation, the concept of c ustoms fraud 
concerns the situation in which the customs value declared  by the  importer does not represent the 
"price actually paid o r payable ".476 The Panel explained that this understanding of customs fraud is 
consistent with Article 17 of the CVA477; the "Decision of the Committee on Customs Valuation 
adopted pursuant to the Ministerial Decision Regarding Cases Where Customs Administrations Have 
                                                
468 Philippines' second written submission, paras. 276 -286.  
469 Philippines' opening statement at the meeting of the Panel, paras. 45 -58.  
470 Philippines' first written submission, para. 406.  
471 Philippines' first written submission, para. 408.  
472 Philippines' comments on Thailand's response to Panel question No. 171(a), paras. 189 -198.  
473 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.619.  
474 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.620 -622 
(referring to  Panel Report, US – 1916 Act, paras. 6.178 -6.181; Panel Report, US – Gambling , paras. 6.499 -
6.509, 6.515 -6.533, and 7.3 -7.4; Panel Report, China – Intellectual P roperty Rights , paras. 2.2, 7.500 -7.501 
and 7.669; Appellate Body Reports, China – Measures Affecting Automobile Parts , footnote 244; US – Softwood 
Lumber IV (Article 21.5 – Canada) , para. 82; US – Softwood Lumber IV , para. 56).  
475 The Panel notes the Philippines' agreement on this point. (See Philippines' comments on Thailand's 
response to Panel question No. 75).  
476 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.631.  
477 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.624.  
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  Reasons to Doubt the Truth or Accuracy of the Declared Value "478; paragraph 8.3 of the Doha 
Ministerial Decision on Implementation -Related Issues of 14 November 2001479; Article 1(c) of the 
WCO's International Convention on Mutual Administrative Assistance for the Prevention, 
Investigation and Repression of Customs Offences (the Nairobi Convention)480; and prior WTO case 
law.481 
7.3.3.3.2   The agency that filed the Charges  
7.255.   The Panel will begin by considering whether the Charges fall outside of the scope of the CVA 
by virtue of the agency that issued them. More specifically, the question the Panel is called upon to 
resolve is whether the CVA is inapplicable to the Charges because they were issued by an organ of 
the State that is not part of the "customs administration " in the narrow sense of the term.  
7.256.   In the first recourse to Article 21.5, the Panel was likewise called upon to consider "whether 
the CVA is inapplicable to the Charges because they were issued by an organ of the State that is not 
part of the 'customs administration '".482 The Panel reasoned that "there would have to be a clear 
and explicit indication in the text of the CVA limit ing its applicability to a narrow subset of 
government officials to sustain Thailand 's interpretation ", given both the customary international 
law rules of State responsibility and broad concept of a challengeable "measure " that apply in the 
context of WTO dispute settlement proceedings, and in light of the fact that none of the covered 
agreements contains any general scope and coverage provision limiting its applicability to particular 
government agencies within a Member.483 The Panel then found that there was no such indication in 
the text of the CVA and noted the following: the absence of any general scope and coverage provision 
in the CVA and the broad language of Article 19484; the fact that the substantive CVA obligations 
which were at issue (Articles 1.1, 1.2(a), second sentence, 2.1, and 3.1 of the CVA) use the passive 
voice and are silent on who is applying the methodology485; the nature of the numerous references 
in the text of the CVA to the "customs administration "486; and  the fact that the consequences of 
finding that the CVA only applies to customs valuation determinations made by the "customs 
administration " would be inconsistent with the object and purpose of the CVA.487 The Panel also 
noted the fact that all third partie s that expressed a view on this point rejected Thailand 's 
interpretation of the CVA.488  
7.257.   In the first recourse to Article 21.5, the Panel took no definite position on the precise 
meaning of the term "customs administration ", or on the question of whether the  Public Prosecutor 
is part of the "customs administration ". The Panel did not take a position on those issues because it 
rejected the underlying premise that the substantive CVA obligations invoked by the Philippines 
apply only to those state organs that a re a part of the "customs administration ". Specifically, the 
Panel concluded that the substantive CVA obligations invoked by Philippines "apply to any organ of 
the state that makes a 'customs valuation ' determination ", and was therefore "unable to agree wi th 
Thailand that the CVA is inapplicable to the Charges on the grounds that they were issued by the 
Public Prosecutor, which is not a part of the 'customs administration '".489 The Panel concluded its 
analysis by stating that, having reached the conclusion th at it did, the Panel considered it 
"unnecessary to reach any definitive conclusion on the scope of the term 'customs 
administration '".490  
                                                
478 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.625 -7.626.  
479 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.627 -7.628.  
480 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.629.  
481 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.630.  
482 Panel Report, Thailand – Cigarettes (Philippin es) (Article 21.5 – Philippines) , para. 7.633.  
483 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.635 -7.638.  
484 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.638.  
485 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.639 -7.640.  
486 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.641.  
487 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.642.  
488 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.643.  
489 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.644.  
490 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.644. The Panel 
notes that it followed a consistent approach when it refrained from defining the terms "customs administration" 
in the context of examining the Philippines' claims, regarding the BoA,  under the procedural obligations in 
Article 1.2(a), third sentence, and Article 16: in assessing the applicability of those procedural obligations to 
the BoA, the Panel proceeded on the basis that the BoA is "formally part" of the Thai Customs Department,  and 
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  7.258.   In this second recourse to Article 21.5, Thailand requests that the Panel re -examine the 
same issue, and uphold Thailan d's argument that the CVA is inapplicable to the Charges because 
they were issued by the Public Prosecutor, which is not a part of the "customs administration ". In 
support of its argument, Thailand states that it reiterates its arguments from the first recourse to 
Article 21.5. It also sets forth two considerations that were not specifically addressed b y the Panel 
in its reasoning. The Panel  will begin by examining whether Thailand 's general and specific legal 
arguments warrant the Panel reversing its prior findings and reasoning, or making additional findings 
beyond those already set forth in the earlier Report. The Panel will  then examine whether those 
findings, which focused specifically on the substantive CVA obligations invoked by the Philippin es in 
the first recourse to Article 21.5, extend to the different set of CVA provisions at issue in this second 
recourse to Article 21.5.  
7.259.   Beginning with Thailand 's general arguments, Thailand states in its first written submission 
that it "reiterates its argument made in the first compliance proceedings that the disciplines of the 
CVA apply only to WTO Members ' 'customs administration '"491, and "incorporates into this 
submission its arguments from the first compliance proceedings in this respect ".492 The Panel  already 
addressed those arguments, in detail, in its Report in the first re course to Article 21.5. In the absence 
of any novel arguments that would warrant a re -examinat ion of this issue by the Panel,  nothing is 
to be gained by the Panel setting forth its  reasoning again, or restating its reasoning in diffe rent 
terms. Accordingly, the Panel will not repeat the analysis that it  already set forth in the first recourse 
to Article 21.5, and summarized further above.  
7.260.   Therefore, the Panel does  not consider it n ecessary to develop any additional reasoning 
beyond that already set forth in the Report in the first recourse to Article 21.5 . Indeed , the factual 
configuration of this case further corroborates the reasoning of the Panel in that Report as it  provide s 
a concrete, real -world example of the type of scenario that the Panel cautioned might arise if 
Thailand 's restrictive interpretation of the scope of the CVA was adopted. The consequence of 
Thailand 's position regarding the non -applicability of the CVA to measures taken by organs which 
are not part of the "customs administration " is that the CVA obligations at issue would apply to the 
1,052 revised NoAs issued by the Customs Department in November 2017, but those obligations 
would not apply to the 2002 -2003 Charges issued by the Public Prosecutor in January 2017, 
notwithstanding that both  the revised NoAs and the Charges  rest on the same basis (i.e. the DSI 's 
calculation of the "actual " value of PMTL 's imports of cigarettes based on the cost information in 
excise tax form CK -21A) and that both cover overlapping entries.493 Therefore, the facts of this case 
are a variation of the hypothetical situation that the Panel alluded to i n the first recourse to 
Article  21.5, when it expressed its concern that:  
If Thaila nd were correct that the CVA only applies to customs valuation determinations 
made by the "customs administration ", Members could easily evade their CVA 
obligations. A Member 's customs administration and law enforcement agency could each 
undertake a valuat ion decision for exactly the same purposes, namely, to establish the 
value of goods that should have been used for the purposes of levying customs duties 
due on goods at or following the time of their importation. However, while the CVA 
would apply to the Member 's customs administration 's actions in initially valuing the 
goods, it would not apply when the value is re -assessed by a law enforcement agency. 
We agree with the Philippines that such an interpretation would render the CVA 
meaningless because Membe rs could evade their CVA obligations simply by having a 
different agency re -assess the values initially determined by the customs 
administration. We consider that the object and purpose of the covered agreements 
should guide us to avoid interpretations tha t would enable Members to "circumvent " or 
"evade " their obligations.494 
7.261.   The Panel thus considers that the factual configuration of this case vividly illustrate s how the 
object and purpose of the CVA could be undermined if its substantive obligations were fou nd to be 
                                                
is therefore part of the "customs administration" in "the narrowest understanding of this term". (Panel Report, 
Thailand – Cigarettes (Philippines) (Article 21.5 – Philippines) , paras. 7.258, footnote 651, and para. 7.419.)  
491 Thailand's first written submission, para. 3.4.  
492 Thailand's first written submission, para. 3.8.  
493 Thailand's response to Panel question No. 138.  
494 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.642.  
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  inapplicable to customs valuation determinations made in the criminal law enforcement context. The 
Panel further notes that, in addition to opening the door for Members to evade their CVA obligations, 
it would conflict with the CVA 's preambular objectives of promoting "uniformity " in the 
implementation of WTO customs valuation rules, and the establishment of "valuation procedures of 
general application ", to find that the substantive obligations in the CVA apply to some state organs 
but not others.495 
7.262.   The Panel does not understand Thailand to argue that the inapplicability of CVA obligations 
to customs valuation determinations made in the criminal law context means that such 
determinations could be made without any reasoned basis or fact ual evidence. Rather, the Panel 
understands the implication of Thailand's argument to be that such determinations would be subject 
to a different set of rules, procedures and legal concepts, derived from criminal law or some other 
legal framework . However,  Thailand does not specify exactly what these norms would be, or from 
which sources of law this parallel regime would be derived.  While Thailand does argue that it is 
criminal law that would be applicable, s pecifically S ection 27  of its Customs Act , Thaila nd does not 
explain what methodolog (ies) would be  used to arrive at the customs valuation determinations 
required to apply that provision, and more specifically to determine the amounts "due" for purposes 
of Section 27 . In the Panel's view, such a dichotom y of methods would further undermine the 
objective of promoting uniformity in the implementation of customs valuation rules, and undermine 
the effectiveness of the CVA.  
7.263.   In addition to its more general reiteration/incorporation of its earlier arguments, Th ailand 
specifically reiterates an argument that was not explicitly addressed by the Panel in the first recourse 
to Article 21.5. According to Thailand, the term "customs administration " in the CVA shou ld be 
interpreted in accordance with the definition of "Customs " contained in the Revised Kyoto 
Convention, and  the Public Prosecutor does not meet the elements of the Revised Kyoto Convention 's 
definition of "Customs ". The definition is found in Chapter 2 of the General Annex to that Convention, 
which contains a set of provisions applicable to all the customs procedures and practices referred to 
in the Convention (see Article 1 of the Revised Kyoto Convention ). The definition states that 
"Customs " means "the Government Service which is responsible for the administration of Customs 
law and the collection of duties and taxes and which also has the responsibility for the application of 
other laws and regulations relating to the importation, exportatio n, movement or storage of 
goods ".496  
7.264.   In line with the approach that is already explained earlier497, the Panel considers that it is 
appropriate for the Pa nel to confine the scope of any  re-examination  of its reasoning or findings  to 
any novel arguments presented by Thailand (or any third party) in the context of this second 
recourse to Article 21.5. While the Philippines refers to Thailand 's argument relating to the Revised 
Kyoto Convention as a "new argument "498, it is not – Thaila nd made the same argument in the first 
recourse to Article 21.5.499 However, the Panel did not specifically address Thailand 's argument in 
its reasoning. Given that Thailand n ow reiterates this argument, the Panel consider s it useful to spell 
out why it was unnecessary to specifically address that argument to resolve the issue before the 
Panel.  
7.265.   The Panel agree s with Thailand insofar as it is arguing that the definition of "Customs " 
contained in the Revised Kyoto Convention is relevant to the interpretation o f the same term in the 
                                                
495 The Panel refers to the third, four th and sixth recitals of the CVA preamble. These state:  
Recognizing  the importance of the provisions of Article VII of GATT  1994 and desiring to 
elaborate rules for their application in order to provide greater uniformity and certainty in their 
implementat ion;  
Recognizing  the need for a fair, uniform and neutral system for the valuation of goods for 
customs purposes that precludes the use of arbitrary or fictitious customs values;  
… 
Recognizing  that customs value should be based on simple and equitable cr iteria 
consistent with commercial practices and that valuation procedures should be of general 
application without distinction between sources of supply;  
 
496 Kyoto Convention on the Simplification and Harmonization of Customs Procedures, Chapter 2, 
(Exhibit THA -55). 
497 See Section 7.1.2.2 (Reliance on the Report in the Philippines' first recourse to Article 21.5).  
498 Philippines' second written submission, para.  261. 
499 Thailand's comments on the Philippines' response to Panel question No. 92, p. 25.  
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  CVA and other covered agreements, and may thus be taken into account as one element that may 
be relevant to the interpretation of that te rm in the context of the CVA. The Panel  recall s that in the 
original proceeding the panel and th e Appellate Body actually relied on the above definition of 
"Customs " to inform the meaning of "customs matters " in the context of Articl e X:3(b) of the GATT 
1994. The Panel  notes that several other panels and the Appellate Body itself have also referred 
either to this definition of "Customs ", or to other definitions contained in the Revised Kyoto 
Convention, for the purpose of interpreting related terms in the covered agreements.500 The Panel 
considers that the Revised Kyoto Convention may in principle be regarded as a "relevant rule of 
international law applicable in the relations between the parties"  within the meaning of Article 
31(3)(c) of the Vienna Convention , and that even if the number of contracting p arties would be 
considered not to meet any requisite threshold501, it still sheds light on the ordinary meaning of 
certain terms used in the CVA, and would at a minimum constitute a relevant "supplementary means 
of interpretation" under Article 32 of the Vie nna Convention.502 
7.266.   However, even assuming arguendo  that Thailand is correct that the definition of "Customs " 
contained in the Revised Kyoto Convention is relevant to the interpretation of the term "customs 
administration " in the context of the CVA, and even assuming further that this definition  supports a 
restrictive interpretation of the terms "customs administration " in the CVA, this would still not alter 
the Panel 's existing conclusion or analysis. As recalled above  at paragraph 7.257 , the Panel did not 
take a position on the meaning of the terms "customs administration " in the CVA, but instead simply 
rejected the underlying premise that the CVA obligations invoked by the Philippines apply only to 
those state organs that are a part of the "customs administration ". Specifically, the Panel concluded 
that the substantive CVA obligations invoked by Philippines "apply to any organ of the state that 
makes a 'customs valuation' determination", and was therefore "unable to agree with Thailand t hat 
the CVA is inapplicable to the Charges on the grounds that they were issued by the Public Prosecutor, 
which is not a part of the 'customs administration'".503 This reasoning, i.e. that the substantive CVA 
obligations at issue apply to any organ of the st ate that makes a "customs valuation" determination 
irrespective of whether that organ forms part of the "customs administration",  rendered moot 
Thailand 's argument regarding the definition of "Customs " in the Revised Kyoto Convention and 
obviated any reaso n for the Panel to specifically address that definition in the reasoning. The Panel 
sees no reason to go further than the Panel in the first recourse to Article 21.5 did in seeking to 
define the term "customs administration " in the context of the CVA. Ther e is no obligation upon a 
panel to make findings on every argument put forward by the parties in support of their respective 
cases, insofar as acceptance or rejection of an argument would not alter the conclusion arrived at.504  
                                                
500 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.1027; Appellate Body Report, Thailand – 
Cigarettes (Philippines) , para. 193. See also Panel Report, China – Auto Parts , para. 7.139 (in the context of 
interpreting the terms "ordinary customs duties" in Article II of the GATT 1994); and Panel Report, Indonesia – 
Chicken , footnote 776 (relying on the definition of "transhipment" in the Revised Kyoto Conventio n).  
501 The Revised Kyoto Convention currently has 116 Contracting Parties, including the Philippines and 
Thailand. The Appellate Body has observed that the meaning of the term "the parties" in Article  31(3)(c) of the 
Vienna Convention  "has in recent years been the subject of much academic debate and has been addressed by 
the ILC", and noted that " one must exercise caution in drawing from an international agreement to which not 
all WTO Members are party". ( Appellate Body Report, EC and certain member States – Large Civil Aircraft, 
paras. 844 -845.)  
502 There are past examples of panels and the Appellate Body having recourse to other international 
conventions and instruments to inform the ordinary meaning of certain terms, including certain terms 
contained in the covered agreements. See e.g. Appellate Body Report, US – Shrimp , para. 130 (interpreting 
the terms "exhaustible natural resources" in Article XX(g) of the GATT 1994 in the light of the United Nations 
Convention on the Law of the Sea,  the Convention on Biological Diversity, Agenda 21, and the Resolution on 
Assistance to Developing Countries adopted in conjunction with the Convention on the Conservation of 
Migratory Species of Wild Animals); and Appellate Body Report, US – FSC (Article 21.5 – EC), paras. 141 -143 
(interpreting the concept of "foreign -source income" in footnote 59 of the SCM Agreement taking into account 
certain widely recognized principles of taxation that emerge from international instruments in the field of 
taxation, in cluding the United Nations Model Tax Convention, the OECD Model Tax Convention, and a range of 
bilateral tax treaties, and multilateral agreements adopted by member States of the Andean Community and 
the Caribbean Community). Indeed, as already noted earli er, the Panel in the first recourse to Article 21.5 
referred to Article 1(c) of the WCO Nairobi Convention in the context of clarifying what is generally understood 
by the concept of "customs fraud". (Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – 
Philippines) , para. 7.629.)  
503 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.644.  
504 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 6.6 -6.7. 
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  7.267.   In addition to its argument b ased on the definition of "Customs " contained in Chapter 2 of 
the General Annex to the Revised Kyoto Convention, Thailand has also submitted a copy of a letter 
from the WCO Secretariat. The letter is addressed to Thailand, and is dated 6 July 2018. In Thai land's 
view, the WCO Letter confirms that the Public Prosecutor is not a part of the "customs administration " 
for purposes of the CVA .505 The WCO letter states that it was provided to Thailand in response to a 
request, from Thailand, for clarification on: ( 1) the phrase "the Government Service which is 
responsible for the administration of the Customs law and the collection of duties and taxes… ", as 
mentioned in Chapter 2 of the General Annex to the Revised Kyoto Convention; and ( 2) whether the 
Department of Special Investigation can be considered as a "Customs Administration " under the 
CVA. The letter states that:  
In response to the points you raise, neither the [Revised Kyoto Convention] nor the 
[CVA] provides further guidance on this question. However, in the opinion of WCO, it is 
normally the Customs department which has responsibility and the competence in 
matters relating to the interpretation and application of technical Customs issues, such 
as Customs valuation. We assume tha t DSI is not part of the Thai Customs Department; 
on that basis DSI would not, in our opinion, be considered as a "Customs administration " 
in the context of the Agreement.506 
The letter then states that "[u]ltimately, it is a matter for a national decision t o be made in this 
regard, taking into account national legislation ", and proceeds to quote the following guidance from 
the Glossary of International Customs Terms : 
1. This term [Customs] is also used when referring to any part of the Customs 
Service or its  main or subsidiary offices.  
2. This term is also used adjectivally in connection with officials of the Customs, 
duties and taxes or control on goods, or any other matter within the purview of 
the Customs (Customs officer, Customs duties, Customs office, Customs 
declaration).507 
7.268.   The Philippines responds that the Panel should attach no weight to the WCO Letter.508 It 
points out that it is not clear if the letter expresses the official position of the WCO or merely the 
views of the official that signed the lette r. It further notes that the letter references earlier 
correspondence between Thailand and the WCO which has not been provided by Thailand. The 
Philippines also questions whether the WCO was aware of the context of Thailand 's question, and 
notes that the W CO Secretariat does not have access to the submissions before the Panel. While the 
Philippines does not agree with certain statements made in the WCO Letter, the Philippines also 
considers that the letter fails to support Thailand 's position as it merely o pines that "it is normally  
the Customs department which has responsibility and the competence in matters relating to the 
interpretation and application of technical Customs issues, such as customs valuation ", and states 
that it "assumes " that the DSI is no t "formally part of the Customs department ". 
7.269.   The Panel does not exclude the possibility that the WCO Secretariat 's view on the scope of 
certain terms used in both the CVA and certain conventions administered by the WCO, including the 
term "customs ", might assist a panel in arriving at the correct interpretation of those terms.509 
                                                
505 Thailand's second writ ten submission, para. 3.3.  
506 Communication from the World Customs Organization to Thailand's Director of Customs Standards 
and Procedure Bureau, 6 July 2018, (Exhibit THA -68), p. 1.  
507 Communication from the World Customs Organization to Thailand's Directo r of Customs Standards 
and Procedure Bureau, 6 July 2018, (Exhibit THA -68), p. 2.  
508 Philippines' response to Panel question No. 137(b).  
509 There are past examples of panels engaging in such consultation. For example, the panel in China – 
Auto Parts sought clarifications from the WCO Secretariat on certain issues relating to the "Revised Kyoto 
Convention on the Simplification and Harmonization of Customs Procedures" and the WCO's "Glossary of 
International Customs Terms." These questions touched upon the mea ning of certain terms used in both in 
conventions administered by the WCO and in the GATT 1994, including the terms "on or in connection with 
importation" in Article II:1(b) of the GATT 1994. (See Panel Report, China – Auto Parts , Annex C -3.) In EC — 
Appro val and Marketing of Biotech Products, the panel stated that it " requested several international 
organizations (Codex, FAO, the IPPC Secretariat, WHO, OIE, the CBD Secretariat and UNEP) to identify 
materials (reference works, glossaries, official documents  of the relevant international organizations, including 
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  However, even assuming arguendo  that Thailand is correct in construing the WCO Secretariat 's letter 
of 6 July 2018 as supporting a restrictive interpretation of the notion of "custom s administration " in 
the CVA, which the Panel doubts for the reasons identified by the Philippines above , this would still 
not alter the Panel 's conclusion or analysis. As already explained, the Panel rejected the underlying 
premise that the CVA obligations invoked by the Philippines apply only to those state organs that 
are a part of th e "customs administration " in the narrow sense of the term . The Panel 's rationale 
stands , and for the same reason that it is not necessary to further consider the definition of 
"Customs " found in Chapter 2 of the General Annex to the Revised Kyoto Convention, it is not 
necessary to further consider the WCO Letter, and the opinion reflected therein on whether the DSI 
falls within the scope of the term "customs admini stration ".510  
7.270.   For the foregoing reasons, the Panel conclude s that Thailand has not presented any legal 
arguments that would warrant the Panel either reversing its prior findings and reasoning, or making 
additional findings beyond those already set forth in the earlier Report. The Panel hereby 
incorporate s by reference th e reasoning in Section 7.3.5.3.2  (The agency that filed the Charges) o f 
the Panel Report in the firs t recourse to Article 21.5  
7.271.   The Panel  now turn s to the question of whether its prior finding s equally extend to the 
provisions at issue in the present proceeding. It is necessary to consider this question because in 
the first recourse to Article 21.5, the Panel limited its findings to the specific obligations invoked by 
the Philippines in relatio n to the 2003 -2006 Charges. The Panel found that those obligations apply 
generally to "customs valuation determination[s] " attributable to a Member. The CVA obligations 
which were at issue included the obligations in Article 1.1, Article 1.2(a) second sent ence, Article 
2.1, and Article  3.1 of the CVA. In this second recourse to Article 21.5, the substantive  CVA 
obligations at issue again include the obligations in Articles 1.1 and 1.2(a), second sentence, but 
they also include the substantive obligations in Articles 6 and 7, as well as the obligation to 
sequentially apply the customs valuation methods in Art icles 2 to 7. In addition to these substantive  
obligations, the Philippines also brings a claim under the specific procedural  obligation in Article 
1.2(a), third sentence. Accordingly, the Panel must examine whether those findings, which focused 
specifical ly on the substantive CVA obligations invoked by the Philippines in the first recourse to 
Article 21.5, extend to the different set of CVA provisions at issue in this second recourse to 
Article  21.5. 
7.272.   Beginning with the substantive  CVA obligations at issue in this second recourse to Article 
21.5, the use of the passive voice in Articles 1.1. and 1.2(a) (second sentence) was already explained 
by the Panel in the first recourse to Article 21.5.511 The Panel notes that the text of Articles 6 and 7 
likewise set fo rth obligations that are silent on who is applying the methodology. The text of these 
provisions contains no reference to the "customs administration ". Thus, Article 6.1 uses the passive 
voice when it states that the customs value of imported goods under t he provisions of that Article 
"shall be based on computed value ", and then proceeds to explain what computed value "shall 
consist of "; and Article 7 uses the passive voice when it states that "the customs value shall be 
determined using reasonable means co nsistent with the principles and general provisions of this 
                                                
conventions, standards and guidelines, etc.) that might aid us in determining the ordinary meaning of certain 
terms used in the definitions provided in Annex A to the SPS Agreement ". (Panel Reports, EC — Approval and 
Marketing of Biotech Products , paras. 7.96.) In several cases involving the interpretation of conventions that 
are administered by WIPO and incorporated by reference into the TRIPS Agreement, panels have requested the 
WIPO Secretariat to p rovide information relevant to the interpretation of the provisions at issue. (See e.g. 
Panel Reports, US – Section 110(5) Copyright Act , para. 4.1; US – Section 211 Appropriations Act , paras. 
8.11-8.13; EC – Trademarks and Geographical Indications , paras. 2.16 -2.18; China – Intellectual Property 
Rights , paras. 2.7 -2.9; and Australia – Tobacco Plain Packaging (Cuba) , paras. 1.63 -1.65.) Finally, in 
Dominican Republic – Import and Sale of Cigarettes , the panel sought and relied upon the opi nion of the IMF 
as to whether a foreign exchange fee applied by the Dominican Republic constituted an "exchange restriction" 
within the meaning of Article XV: 9(a) of the GATT 1994. (Panel Report, Dominican Republic – Import and Sale 
of Cigarettes , paras. 7.143 -7.145.)  
510 The Panel notes that the question addressed in the WCO letter is whether the DSI (not the Public 
Prosecutor) is part of Thailand's "customs administration".  
511 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.639. The Panel 
observed that Article 1.1 uses the passive voice in stating that "[t] he customs value of imported goods shall be 
the transaction value, that is the price actually paid or payable for the goods when sold for export to the 
country of im portation", provided that "the buyer and seller are not related, or where the buyer and seller are 
related, that the transaction value is acceptable for customs purposes under the provisions of paragraph 2". 
The Panel observed that the first and second sen tences of Article 1.2(a) are likewise formulated in the passive 
voice.  WT/DS371/RW2  
 
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  Agreement ". There is likewise no reference to the "customs administration " in the first section of the 
General Note to the Interpretative Notes to the CVA, entitled "Sequential Application of Valu ation 
Methods ". Paragraph  2 thereof uses the passive voice when it states that if goods cannot be valued 
using the transaction value, the customs value "is to be determined by proceeding sequentially 
through the succeeding Articles to the first such Articl e under which the customs value can be 
determined ". Accordin gly, the Panel consider s that its  finding and reasoning from the first recourse 
to Article 21.5 necessarily extends and applies to the above -mentioned substantive  obligations at 
issue in this disp ute. These substantive obligations, like the substantive obligations considered in 
the first recourse to Article 21.5, apply to any organ of the state that makes a "customs valuation " 
determination.  
7.273.   The Panel addresses the procedural obligation in Art icle 1.2(a), third sentence, in Section 
7.3.6  below, in the context of examining the Philippines ' claim under that provi sion. As elaborated 
further below in the context of examining that specific claim, the Panel concludes that the procedural 
obligation in Art icle 1.2(a), third sentence, applies to the Public Prosecutor, but that the nature of 
the information and the "grounds" to be communicated in the context of a criminal investigation 
may be different from the nature of the information and the "grounds" to b e communicated in the 
context of a typical customs valuation within the institutional framework of a "customs 
administration" in the narrow sense of the term.  
7.274.   Based on the foregoing, the Panel find s that the obligations in Articles 1.1, 1.2(a), second 
sentence, and the relevant custom valuation rules in Articles 2 to 7 apply to any organ of the state 
that makes a "customs valuat ion" determination, and reject s Thailand 's argument that the CVA is 
inapp licable to the Charges because they were issued by the Public Prosecutor, which is not a part 
of the "customs administration ". Having reached th at conclusion, the Panel again find s it 
unnecessary to reach any definitive conclusion on the scope of the  term "customs administration " in 
the context of the CVA.  
7.3.3.3.3   The meaning of the Charges  
7.3.3.3.3.1   Introduction  
7.275.   The Panel recall s that Article 15.1(a) of the CVA defines the "customs value of imported 
goods " as "the value of goods for the purposes of levying ad valorem  customs duties on imported 
goods ", and that the panel in Colombia – Ports of Entry  relied on Article 15.1(a) to define the 
constituent elements that must be present for an action to constitute a "customs valuation " 
determination subject to the obligations in t he CVA.512 The Panel further recall s that in the first 
recourse to Article 21.5, the parties agreed that this is the applicable legal standard, and that for 
the Charges to be subject to the CVA, both of the following elements of the definition of "customs 
valuation " reflected in Article 15.1(a) must be present: ( 1) determining the monetary worth or price 
of imported goods ( 2) for the purposes of levying  ad valorem customs duties.513  
7.276.   In the first recourse to Article 21.5, Thailand argued that the 2003 -2006 Char ges did not 
satisfy the first element of the definition of "customs valuation " in Article 15.1(a) of the CVA, as they 
did not determine "the value of goods " imported by PMTL. Thailand maintained that the references 
to the "actual prices " contained in the Annex to the 2003 -2006 Charges only served to establish a 
possible benchmark for a fine in the event of a conviction for customs frau d. Thailand also argued 
that t he Ch arges did not satisfy the second element of the definition of "customs  valuation " in 
Article  15.1(a), as they were not "for purposes of l evying ad valorem  duties ".  
7.277.   The Panel was not persuaded by Thailand 's arguments. As regards the first element in Article 
15.1(a ), the Panel explained, in S ection 7.3.5.3.3 (The meaning of t he Charges), why the 2003 -
2006 Charges did determine "the value of goods " imported by PMTL. As regards the second element 
of Article 15.1(a ), the Panel explained, in S ection 7.3.5.3.4 (The consequences of the Charges), why 
the Public Prosecutor 's determina tion of the monetary worth or price of imported goods of PMTL for 
the purpose of determining the amount of the ad valorem  customs duties that should have been 
                                                
512 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.646 -7.647 
(referring to Panel Report, Colombia – Ports of Entry , paras. 7.81, 7.83, and 7.84).  See also, more recently, 
Panel Report, Colombia – Textiles (Article 21.5 – Colombia/Panama) , para. 7.599.  
513 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.647.  WT/DS371/RW2  
 
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  levied on goods imported by PMTL was made "for the purposes of levying  ad valorem customs duties 
on imported goods ". 
7.278.   In this second recourse to Article 21.5, Thailand reiterates similar arguments in connection 
with the 2002 -2003 Charges. Thailand 's arguments are based on Article 15.1(a), and it has explained 
that it "does not allege that the CVA has a  special 'carve out ' for allegations of customs fraud, for 
which a different legal standard applies instead of Article 15.1(a) of the CVA "; rather, its "contention 
on the applicability of the CVA is grounded directly in Article 15.1(a) ".514 Thailand further explains 
that its arguments in this proceeding relating to "customs fraud " are tantamount to, and "nothing 
else tha[n] another way of illustrating why the 02 -03 Charges do no t meet both elements of 
Article  15.1(a) of the CVA ".515  
7.279.   The Panel 's analysis is likewise grounded in the elements of Article 15.1(a). As it did in its 
prior Report in relation to the 2003 -2006 Charges, the Panel will separately and sequentially make 
an assessment of whether the 2002 -2003 Charges ( 1) determin e the moneta ry wort h or price of 
imported goods (2 ) for the purposes of levying  ad valorem customs duties.  
7.280.   In this section, the Panel will consider whether the 2002-2003 Charges seek to determine 
the monetary value of PMTL 's imported c igarettes in a way that meets the  first element of Article 
15.1(a). This point of disagreement between the parties requires the Panel  to resolve certain issues 
relating to the meaning of the Charges  filed by the Public Prosecutor, and in particular how the 
reference to the "actual price " is to be understood in the context of the 2002 -2003 Charges and their 
Annex. As elaborated below, the parties ' arguments raise two issues.  
7.3.3.3.3.2   The issues in dispute  
7.281.   As the parties have formulated certain of their arguments in this proceeding by reference to 
the Panel 's reasoning regarding the 2003 -2006 Charges in the first recourse to Article 21.5, the 
Panel begins by briefly summarizing that reasoning. It then sets forth the evolution of the parties ' 
arguments regarding how the "actual price" is to be understood in this proceeding, with a view to 
identifying and disentangling the two main issues in dispute.  
7.282.   In the first recourse to Article 21.5, the Panel was likewise called upon to consider  the 
meaning of the 2003 -2006 Charges, and in particular what the "actual price " referred to. Regarding 
the 2003 -2006 Charges, Thailand argued that there was no "valuation of goods ", because those 
Charges did not actually seek to "fix or determine the monetary value of PMTL 's imported cigarettes ". 
Thailand essentially argued that although the 2003 -2006 Charges expressly compared PMTL 's 
declared or "false" price with the "actual price " based on the prices of the duty -free operator King 
Power, this was to be understood as alleging that the transaction va lue declared by PMTL was not 
the actual price that PMTL paid to PM PMI, and that the reference to the "actual price " in the 2003 -
2006 Charges and their Annex merely served the purpose of providing a possible benchmark to the 
Criminal Court to impose fines i n the event of a conviction.516 Thailand 's argument was that the 
reference to the "actual price " did not actually constitute any attempt to determine a revised customs 
value within the scope of Articles 2 through 7 of the CVA. In other words, Thailand stress ed that 
"the Charges do not determine or even attempt to determine what should  be the 'true' or 'correct ' 
or 'actual ' customs value ".517 
7.283.   At the outset of its analysis of this issue, the Panel stated at paragraph 7.649 that it would 
be inclined to agree with Thailand that the Charges would fall outside of the scope of application of 
the CVA "if Thailand were to substantiate its interrelated assertions that the Charges allege customs 
fraud based on a determination that the price that PMTL declared to have paid to PMPMI was not 
the actual price that was paid to PMPMI, and that the references to King Power 's prices in the Annex 
merely serve as a possible benchmark for the purposes of a fine and not as a basis for determining 
the act ual customs value of PMTL 's imported goods ".518 In the course of its analysis, and in line with 
                                                
514 Thailand's response to Panel question No. 171(a), pa ra. 6.20.  
515 Thailand's response to Panel question No. 171(a), para. 6.20.  
516 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.648.  
517 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para s. 7.612, 7.631, 
and 7.686.  
518 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.649.  
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  that clarification, the Panel agreed with Thailand that "an allegation of customs fraud could be made 
without ever seeking to determine the customs value of the i mporter 's goods, " and that the making 
of such accusation "does not necessarily presuppose that the authorities would have engaged in a 
customs valuation determination in order to reach the conclusion that the declared transaction value 
was not 'truthful or  accurate '".519 Thus, t he Panel accepted that an allegation of customs fraud might 
be made without necessarily determining the monetary worth or price of imported goods, and that 
if Thailand 's assertions about the meaning of the 2003 -2006 Charges were true t his would suggest 
that the Charges did not meet the f irst element of Article 15.1(a).   
7.284.   However, the Panel ultimately rejected Thailand 's assertions regarding the meaning of the 
2003-2006 Charges. The Panel explained that the text of the 2003 -2006 Charges a lleged that PMTL 
failed to comply with Section 27 of the Customs Act by declaring a "false price " for Marlboro  and 
L&M cigarettes contrary to the "actual price ".520 The Panel concluded, based on the plain meaning 
of the Charges and their Annex, that the Char ges did "fix or determine the monetary value of PMTL 's 
imported cigarettes " for purposes of customs valuation.521 The Panel found that Thailand 's reading 
of the Charges could not be supported by the actual text of the instrument, when it was read in 
conjunction with its accompanying Annex, with the domestic legal framework in which the Charges 
were situated, or with the events culminating in the C harges.522  
7.285.   In this second recourse to Article 21.5, the Philippines maintains that the 2002 -2003 Charges 
and their Annex, like the 2003 -2006 Charges and their Annex,  fix or determine the monetary value 
of PMTL's imported cigarettes, because they establish t he alleged "actual " or "found " price for each 
of the 780 entries , and compare the "declared " price against the higher "actual " or "found " price. 
The Philippines points out that "every single substantive clause of the 02 -03 Charges refers to the 
'actual ' prices of the imported goods ", and that the "Annex similarly provides exact figures for the 
'actual ' or 'found ' price for each of the 780 entries ".523 According to the Philippines, this "actual 
value " is the revised customs value which the Thai authorities calculated on the basis of Article 6 of 
the CVA after having determined that the price actually paid or payable was influenced by the 
relationship between PMTL and PM Indonesia. In other words, the P hilippines understands that t he 
2002-2003 Charges reject transaction values and calculate alternative "actual " customs values, 
using the computed value method in Article 6, and on the basis of information in Indonesian  excise 
tax form CK -21A.524 
7.286.   Thailand dis agrees with both aspects of this understanding of the Charges. Thailand 's 
position on how the reference to the "actual price " is to be understood in the context of the 2002 -
2003 Charges has unfolded in the course of the proceeding, as follows:  
a. In the cont ext of arguing that the CVA does not apply to the Charges  as this measure 
constitutes an allegation of customs fraud , Thailand argued in its first written submission 
that PM TL's declared value was not the price that PMTL actually paid to PM Indonesia 
for the goods .525 The Panel notes that this argument  implies that the reference to the 
higher "actual price " in the Charges was "the price actually paid or payable " in the sense 
of Article 1.1 of the CVA . 
b. Also in its fir st written submission, Thailand presented alternative arguments assuming 
arguendo  that the CVA applies to the Charges. As part of these alternative arguments, 
Thailand responded to the Philippines ' claims under Articles 1.1 and 1.2(a) by arguing 
that the Thai authorities were justified in rejecting the price PMTL paid to PM Indonesia 
as the basis for valuing the goods because the authorities found that this price  was 
influenced by the relationship between PM Indonesia and PMTL526, and by suggesting  
that the C harges reflect a revised customs value computed consistently with Article s 
                                                
519 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.659.  
520 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.661.  
521 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.661.  
522 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.653 -7.664.  
523 Philippines' first written submission, para. 404.  
524 See e.g. Philippines' first written submission, section V.A.4 ("The 02 -03 Charges reject transaction 
values and calculate alternative "actual" customs values on the basis of information in Indonesian excise tax 
form CK -21A")  
525 Thailand's first written sub mission, paras. 1.4, 3.19, 3.22, and 4.3(a).  
526 Thailand's first written submission, para. 3.91.  
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  6.1 and/or 7.1 of the CVA .527 The Panel notes that this argument presupposes that the 
Thai authorities assumed  that the declared price was the price actually paid or payable, 
and that  the "actual price " in the Charges refers to the revised customs value 
determined in accordance with Article s 6.1 and/or 7.1, and does not represent "the price 
actually paid or payable" .  
c. In its second written submission,  in the context of arguing that the  CVA does not apply 
to the Charges,  Thailand clarified that "the reference to 'actual value ' [in the 2002 -2003 
Charges] refers to the price actually paid or payable for the goods in question "528 and 
not to "alternative " values as alleged by the Philippines , and explained that i ts 
contradictory assertions made in the context of rebutting the Philippines ' claims under 
Article s 1.2(a) and 6 were to be construed as arguments in the alternative .529 The Panel 
notes that this cla rification implies that the reference to the higher "actual price" in the 
Charges was "the price actually paid or payable" in the sense of Article 1.1 of the CVA, 
and that the authorities never proceeded to examine the circumstances of sale under 
Article 1 .2(a), or to determine a revised customs value under Articles 6.1 and/or 7.1.  
d. In its response to Panel question No. 139, Thailand confirmed that "the 02 -03 Charges 
allege that the transaction value declared by PMTL was not the price actually paid "530, 
but Th ailand then submits  that the Char ges do not determine the "price actually paid or 
payable " for the goods in the sense of Article 1.1 of the CVA, or any other revised 
customs value,  because the Charges are an accusati on of customs fraud, and in cases 
of cus toms fraud the authorities are not necessarily required to determine "the correct 
customs value "531 and "need not calculate exactly the price actually paid ".532 The Panel 
notes that this argument implies that the "actual price" does not refer to either the 
transaction value or a revised customs value , but without specifying what the "actual 
price" refers to .  
e. In its opening oral statement at the meeting of the Panel, Thailand stated that in cases 
where penalties for customs frau d are determined by reference to the value of the 
goods, the value of the goods "is a simple benchmark for a penalty " and not "a customs 
valuation de termination "533; and i n response to Panel question Nos. 166 and 167, 
Thailand stated that its position is tha t the reference to the "actual price " in the 2002 -
2003 Charges refers to a determination by Thai authorities of a possible benchmark for 
the imposition of a fine that does not represent any determination by Thai authorities 
of the price actually paid or pa yable by PMTL to PM Indonesia, or of the revised value 
that was determined after concluding that the price actually paid or payable was 
influenced by the relationship between PMTL and PM Indonesia.534 The Panel notes that 
this argument implies  that the "actu al price" does not reflect a determination of the 
"price actually paid or payable", or a revised customs value determined pursuant to 
Articles 6.1 and/or 7.1.  
7.287.   In the light of Thailand 's clarifications, the Panel understands Thailand 's position to be that  
the 2002 -2003 Charges do not satisfy the first element of the definition of "customs valuation " in 
Article 15.1(a) of the  CVA for two related but independent reasons:  
a. First, because the reference to the "actual price " in the 2002 -2003 Charges is to be 
understood as merely establishing an "approximate "535 value of the goods in the context 
of setting out the accusation that PMTL 's declared price is not  the price actually paid536, 
and for the limited and distinct purpose of identifying a possible benchmark for a fine537, 
                                                
527 Thailand's first written submission, paras. 3.105 and 3.110 -3.111.  
528 Thailand's second written submission, para. 3.14.  
529 Thailand's second written submissio n, paras. 3.15 -3-16.  
530 Thailand's response to Panel question No. 139, para. 4.3.  
531 Thailand's response to Panel question No. 139, para. 4.7.  
532 Thailand's response to Panel question No. 139, para. 4.9.  
533 Thailand's opening statement at the meeting of the Panel, para. 3.11.  
534 Thailand's response to Panel question No. 167, para. 4.4.  
535 Thailand's response to Panel question No. 171(a), para. 6.15.  
536 Thailand's response to Panel question No. 171(a), para. 6.22.  
537 Thailand's response to Panel question Nos. 16 6 and 167(a), and No. 171(a), para. 6.28.  
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  and for either of these purposes it is "unnecessary to quantify the exact amount "538 of 
the price actually paid or a revised customs value .539 In making this argument, Thailand 
relies on the Panel 's statement, at pa ragraph 7.659 of its Report  in the first recourse to 
Article 21.5 , that "an allegation of customs fraud could be made without ever seeking 
to determine the customs value of the importer 's goods, " and that the making of such 
accusation "does not necessarily  presuppose that the authorities would have engaged 
in a customs valuation determination in order to reach the conclusion that the declared 
transaction value was not 'truthful or accurate '".540 
b. Second, even if the Charges are read as fixing or determining th e actual and exact 
monetary value of PMTL 's imported cigarettes, which in Thailand 's view they do not, the 
2002-2003 Charges accuse PMTL of declaring an import value that is not the price 
actually paid b y the buyer to the seller, and therefore constitute the kind of measure 
taken against "customs fraud " that the Panel in the first recourse to Article 21.5 said, 
at paragraph 7.649 of its Report, that it was inclined to agree fell outside of the scope 
of application of  the CVA.541 Thailand argues that the Panel 's clarification at paragraph 
7.649 "is of the utmost importance as it provides guidance on the possible limits of the 
scope of application of the CVA "542, and states that it seeks to "apply[] the first 
Article  21.5 p anel's standards and analysis to the facts of this case ".543  
7.288.   Finally, the Panel understands Thailand 's arguments made in the context of rebutting the 
Philippines ' claims regarding the rejection of the transaction value and the determination of a revised 
customs value, to be "alternative arguments " based  on the arguendo  assumption that the Thai 
authorities rejected PMTL 's transaction values, and determined a revised customs value.544  
7.289.   Based on the foregoing, the Panel understands the parties to disagree on two different issues 
as to how the reference to the "actual price " is to be understood in the context of the 2002 -2003 
Charges and their Annex. According to the Philippines: (1 ) the "actual price " in the 2002 -2003 
Charges is to be understood in the same way th at the Panel understood the reference to the "actual 
price" in the context of the 2003 -2006 Charges, namely as  fixing or determining the actual and exact 
monetary value of PMTL 's imported cigarettes; and (2 ) this "actual price " is the revised customs 
value which the Thai authorities calculated on the basis of Article 6 of the CVA after having 
determined that the price actually paid or payable was influenced by the relationship between PMTL 
and PM Indo nesia. According to Thailand : (1) as a threshold matter the reference to the "actual 
price" in the 2002 -2003 Charges does not fix or determine the actual and exact monetary value of 
PMTL's imported cigarettes  as it is merely an "approximate " value of the goods made for the more 
limited and distinct purposes of  setting out the accusation that PMTL 's declared price is not  the price 
actually paid  and identifying a possible benchmark for a fine , for which it is unnecessary to quantify 
the exact amount ; and (2 ) if the "actual price " does fix or determine the actual and exact monetary 
value of PMTL 's imported cigarettes , it refers to the "price actually paid or payable " for the goods in 
question , and not to "alternative " value  as alleged by the Philippines , for the purpose of establishing 
that PMTL's declared  import value is not the price actually paid b y the buyer to the seller, and 
therefore  the 2002 -2003 Charges  constitute the kind of measure taken against "customs fraud " that 
the Panel in the first recourse to Article 21.5 said, at paragraph 7.649 of its Report, that it was 
inclined to agree fell outside of the scope of application of the CVA.  
7.290.   The Panel  will first consider the question of whether the reference to the "actual price " in the 
2002-2003 Charges fixes or determines the actual and exact monetary value of PMTL 's imported 
cigarettes, as the Philippines contends, or is instead merely an "approximate " value included for 
other purposes, as Thailand contends. The Panel  will then ad dress the second disputed issue , which 
is whether the "actual price " is to be understood as a revised customs valuation following the 
rejection of the transaction value, as the Philippines contends, or instead refers to the "price actually 
paid or payable " as Thailand contends. In addressing these two issues, the Panel  will follow the 
                                                
538 Thailand's response to Panel question No. 171(a), para. 6.22.  
539 Thailand's first written submission, paras. 3.10 -3.25; second written submission, paras. 3.4 -3.39.  
540 Panel Report, Thailand – Cigarettes (Philipp ines) (Article 21.5 – Philippines) , para. 7.659.  
541 Thailand's first written submission, paras. 3.10 -3.25.  
542 Thailand's first written submission, para. 3.17.  
543 Thailand's first written submission, para. 3.18.  
544 Thailand's second written submission, paras . 3.15 -3-16; response to Panel question No. 139, 
para. 4.11, and No. 167(a), para. 4.2; opening statement at the meeting of the Panel, para. 3.29.  
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  applicable principles for resolving the meaning and content of municipal legal instruments as set 
forth in the Report in the first recourse to Article 21.5.545  
7.3.3.3.3.3   The issue of the "actual price " as merely an  approximate reference value  
7.291.   Beginning with the first disputed issue , the Panel observe s that the text of the 2002 -2003 
Charges alleges that PMTL violated Section 27 of the Customs Act by declaring a "false price " for 
Marlboro  and L&M cigarettes contrary to the "actual price ". As with the 2003 -2006 Charges546, they 
do not elaborate on whether PMTL declared a "false" price in the sense that it was contrary to the 
"actual price " that PMTL paid  or payable  to PM Indonesia, or rather a "false" price that was contrary 
to an "actual price " determined, using another benchmark , as the price to be used for customs 
valuation. However, as with the 2003 -2006 Charges, the terms of the 2002 -2003 Charges make 
clear tha t PMTL 's declaring of a "false price " contrary to the "actual price " is the act giving rise to 
the offense. There is no specific reference to any "fine" in the Charges.   
7.292.   On the other hand, for each of the 780 entries at issue, there is a clause whic h: (1) states 
that for the particular entry at issue, the defendants declared a "false" value, and gives the price 
corresponding to PMTL 's declared price paid or payable, that was "contrary to the actual price and 
against the law of customs ", and specifies with a nother higher figure what that "actual price " was; 
(2) refers to "the Exhibit attached to the Complaint " for, inter alia , the "price per pack of cigarette 
falsely and jointly declared " by the defendants, and the "actual price of cigarettes for each brand "; 
(3) then concludes that "[t]he two Defendants and others committed such for the importation of the 
goods into the Kingdom in order to avoid the full payment of tax and duty, which constituted the 
actions of being involved in any manner to avoid or attempt to avoid the payment of customs tax or 
duties … with the intention to defraud the government tax of His Majesty the King, which was the 
violation of law ".547 Thus, the Charges refer to these elements as the "acts" that "constituted " the 
crime. In each of these respects, there is no difference between the 2003 -2006 Charges and the 
2002-2003 Charges.  
7.293.   As with the 2003 -2006 Charges, the 2002 -2003 Charges repeat for each of the 780 entries 
at issue that "the Exhibit attached to the Complaint " shows the de tails with respect to price per pack 
of cigarettes "falsely " declared, and the "actual price " of cigarettes of each brand. The attachment 
to the Charges, referred to by the parties as the "Annex "548 to the Charges, provides information on 
the 780 entries at issue in the form of a table.  For each of the 780 entries, Columns 2 through 5 of 
the table provide information on the date and time of importation; the import entry number; the 
imported goods ( Marlboro  or L&M); and the number of boxes/packs of cigarettes included in that 
entry. Columns 6 and 7 provide information and exact figures on the "declared " and the "found " 
prices, as follows:  
a. Column 6 specifies the "declared price " by PMTL. The figures contained in Column 6 
indicate that PMTL's declared transaction  values for each of these entries was in the 
range of THB 7.35-7.70 per pack for Marlboro  cigarettes, and THB 6.13-6.55 per pack 
for L&M cigarettes.549 These figures on the "declared price " in the Annex correspond to 
the "false price " in the Charges.  
b. Column 7 of the Annex specifies the alleged "found price ". In contrast to the 
corresponding column in the Annex to the 2003 -2006 Charges, which expressly 
indicated that the "found "/"actual " price was the "price of goods imported by King 
Power", Column 7 of the Annex to the 2002 -2003 Charges does not specify what the 
"found " price refers to.  
c. Column 8 then calculates the "Amount underdeclared ". Based on the difference between 
the prices in Columns 6 and 7, i.e. between the "declared price " paid by PMTL and the 
"found price ", it provides this information on an entry -by-entry basis. Thus, the Annex 
                                                
545 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.650 -7.652.  
546 Panel  Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.653.  
547 The Criminal Court, Charges, Case Black No. Or. 232/2560, 26 January 2017 (English translation), 
(Exhibit PHL -14-B). 
548 Annex to the 2002 -2003 Charges, 26 January 2017  (English translation), (Exhibit PHL -273-A). 
549 See DSI, Memorandum of Allegation s, 22 September 2016 (English translation), (Exhibit PHL -13-B); 
Philippines' first written submission, para. 345.  WT/DS371/RW2  
 
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  provides a comparison between PMTL 's declared transaction values and the "found 
price", with the stated "Amount underdeclared " based on the precise  difference between 
the two.  
d. Column 9, 10 and 11 then calculates the exact "declared ", "found ", and "underpaid " 
amounts for import duties, excise tax, VAT, and an earmarked tax paid to the Thai 
Health Promotion Found.  
e. The last row of the table indicates, among other figures, that  the difference between 
the "declared price " and the "found price ", i.e. the "Amount underdeclared ", was THB 
2.178 billion. On that basis, and applying the ad valorem  rate of 5% to the "Amount 
underdeclared ", it calculates a figure of THB 108.9 million in "underpaid " import duties 
(and corresponding amounts for the three sets of additional taxes).  
7.294.   Thus, like the 2003 -2006 Charges, the 2002 -2003 Charges specify in exact detail both the 
"false" price and the "actual price ", and they also calculate the exact amount of the ad valorem  
customs duties that should have been paid by PMTL. Each of the 780 clauses of the 2002 -2003 
Charges refers to the "amount of tax and [ ad valorem  customs] duty under customs law that the 
two Defendants and others were liable to pay ", and calculates that "amount ", in precise numerical 
terms, using the "actual price " as the tax base.550 Like the 2003 -2006 Charges, the Annex to the 
2002-2003 Charges compares the "declared " (or "false") price against the higher "actual " (or 
"found ") price, and calculates exactly the amount of taxes and ad valorem  customs duties 
purportedly "underdeclared " and/or "underpaid " on each entry, by reference to the difference 
between the "false" transaction value and the "actual " (or "found ") price. Accordingly, like the 2003 -
2006 Charges, the plain meaning of the text of the 2002-2003 Charges and the Annex fixes the 
monetary value  of the imported goods and, on that basis, calculates the amount of ad valorem  
customs duties due on those goods.  
7.295.   Regarding  Thailand 's assertion that the "actual price " is simply an approximate reference 
value that only serves to establish a possible bench mark for a fine in the event of a conviction for 
customs fraud, the Panel is unpersuaded for essentially the same reasons that it was not persuaded 
by Thailand 's assertion that this is how the "actual price " should be understood in the context of the 
2003-2006 Charges. As already noted, t here is no specific reference to any "fine" in the Charges 
and the "actual price " is not synonymous therewith. But more fundamentally, and as the Panel found 
when addressing the same issue in the context of the 2003 -2006 Ch arges:  
We agree with the Philippines more generally that "[b]efore the Public Prosecutor can 
establish any penalty (such as a fine), the Public Prosecutor must first establish that the 
elements of the alleged crime are present, because these provide the ne cessary 
justification for establishing the penalty " and that "[l]ogically, a penalty for the 
commission of a crime can be considered only after the substantive elements of the 
crime itself have been established ". The domestic legal framework in which the C harges 
and the Annex are situated, and in the context of which they must be read, also includes 
Section 158(5) of the Criminal Procedure Code. Section 158(5), to which both parties 
have made reference, provides that "a charge must contain 'all the acts alleged to have 
been committed by the accused, all the facts and particulars regarding the time and 
place of such acts, and the persons or articles concerned which are reasonably sufficient 
to give the accused a clear un derstanding of the charge '."551 
7.296.   Thailand argues that although the reference to the "actual value " in the 2002 -2003 Charges 
refers to the "price actually paid or payable " for the goods in question552, the Charges cannot be 
understood as reflecting any customs v aluation determination, and thus the reference to  the "actual 
value" is not a determination of  the "price actually paid or payable " in the sense of Article 1.1 of the 
CVA.553 That is so, Thailand argues, because "alleging that a price is not the price actua lly paid is 
                                                
550 The Criminal Court, Charges, Case Black No. Or. 232/2560, 26 January 2017 (English translation), 
(Exhibit PHL -14-B). (emphasis added)  
551 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.655. (fn s 
omitted)  
552 Thailand's  second written submission, para. 3.14.  
553 Thailand's response to Panel question No. 139, para. 4.4.  
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  not the same as determining the correct customs value ".554 Referring to the statement by the Panel 
at paragraph 7.659 of its Report in the first recourse to Article 21.5, Thailand reasons that:  
This type of determination does not require an asse ssment of the customs value of 
imported merchandise. As acknowledged by the panel, "[w]e further agree with 
Thailand that an allegation of customs fraud could be made without ever seeking to 
determine the customs value of the importer 's goods, and the maki ng of such accusation 
does not necessarily presuppose that the authorities would have engaged in a customs 
valuation determination in order to reach the conclusion that the declared transaction 
value was not 'truthful or accurate '". In making this statemen t, the panel referred to 
Thailand 's example illustrating why, from a practical perspective, an accusation of 
customs fraud does not require a determination of the value of the imported goods. In 
this sense, an accusation of customs fraud would fall outside  the scope of the CVA.555 
7.297.   The Panel remains of the view  it expressed in the first recourse to Article 21.5  that there are 
circumstances in which "an allegation of customs fraud could be made without ever seeking to 
determine the customs value of the importer 's goods, and the making of such accusation does not 
necessarily presuppose that the authorities would have engaged in a customs valuation 
determination in order to reach the conclusion that the declared transaction value was not 'truthful 
or accurate '".556 The Panel also remains of the view that these general considerations apply equally 
in the context of Section 27 of the Customs Act, and does not consider that in order to establish the 
constituent elements of an offence, the terms of Section 27 always requ ire that the authorities 
engage in customs valuation determinations, such that any and all Charges brought pursuant to 
Section 27 necessarily fall within the purview of the CVA.557 The Panel also continues to accept 
Thailand 's explanation that Section 158(5) of the Criminal Procedure does not have the effect of 
requiring that, for any charges alleging an offense under Section 27, they must "lay out what the 
correct value would have been had the alleged offence not occurred ".558 
7.298.   Thus, the Panel acknowledged that there are circumstances in which a determination of 
customs fraud could  be made without ever seeking to determine the customs value of the importer 's 
goods, and that the making of an accusation of customs fraud does not necessarily  presuppose that 
the authorities would have engaged in a customs valuation determination in order to reach the 
conclusion that the declared transaction value was not "truthful or accurate ". To illustrate how that 
could be, the Panel gave an exampl e of a particular set of circumstances in which that might be the 
case.559 However, the Panel manifestly did not say, or suggest, that as a general rule an allegation 
of customs fraud can never  involve any determination of the customs value of the goods. Nor  did 
the Panel suggest that where an allegation of customs fraud expressly reflects a determination of 
the "price actually paid or payable ", that determination is one to which the CVA is inapplicable on 
account of the fact that there might be other circums tances in which there is an allegation of customs 
fraud in which no such determination is made.  
7.299.   In other words, the fact that there may be circumstances in which an allegation of customs 
fraud could be made without ever seeking to determine the customs va lue of the importer 's goods 
does not imply that this will always be the case . Accordingly, there is no  presumption that whenever 
there is a determination of the customs value based on the "price actually paid or payable ", such 
determination must automatica lly be deemed to be an exercise in which the authorities are not 
                                                
554 Thailand's response to Panel question No. 139, para. 4.7.  
555 Thailand's response to Panel question No. 139, para. 4.5. See also paragraph 4.9. (fn s omitted)  
556 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.659.  
557 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21. 5 – Philippines) , para. 7.660.  
558 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.660.  
559 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.659. The panel 
Report in Colombia – Textiles (Article 21.5 – Colombia/Panama)  was circulated after the Report in the first 
recourse to Article 21.5 was finalized and issued to the parties. In the context of discussing guarantees aimed 
at securing payment in situations of suspected under -invoicin g, the panel stated that " there is an element of 
uncertainty inherent in any valuation dispute, since it is not known at the start of the dispute what the final 
determination will be. This situation makes it difficult to be more precise at the time of sett ing the amount of 
the bond. The Panel appreciates that in the event of a dispute concerning the value of goods when there is a 
suspicion of under -invoicing, it is understandable that the amount of the bond be calculated on the basis of a 
reference value". (Panel Report, Colombia – Textiles (Article 21.5 – Colombia/Panama) , para. 7.232.) The 
Panel agrees.  
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  making a determination of the "price actually paid or payable " within the meaning of Article 1.1.  The 
Panel recalls that the 2002 -2003 Charges brought against PMTL allege that PMTL failed to comply 
with Section 27 by declaring a "false price " for Marlboro  and L&M cigarettes contrary to the "actual 
price", and they specify in exact detail both the "actual price ", and the basis for determining that 
"actual price ". 
7.300.   Furthermore, as the Panel indic ated already in the first recourse to Article 21.5, a reading of 
the terms of the Charges and their accompanying Annex in the context of Section 2 of the Customs 
Act reinforces the conclusion that the "actual price " referred to in the Charges necessarily involves 
a customs valuation determination, which a fortiori  includes a determination of the "value of the 
goods " in the sense of the first element of Article 15.1(a). The Panel stated that:  
Section 2 of the Customs Act sets out definitions of terms that appear throughout the 
Act, and confirms that the terms "customs price " and "price" carry the same meaning 
as one another, which "in the case of importation, means price of goods for the purpose 
to collect duty ".560 It further provides that the "price of goods for the purpose to collect  
duty" should be in accordance with one of six different benchmarks corresponding to 
Articles 1 -7 of the CVA. We recall that Section 27 provides a benchmark for the purpose 
of calculating a  fine, which is that, in the event of a conviction, PMTL shall for each 
offence be liable for a fine equal to quadruple "the duty -paid value of the goods ". In 
response to a question from the Panel, Thailand confirms that, under its position that 
the Annex merely sets forth a benchmark for a fine, the Annex still reflects "the Public 
Prosecutor 's view that King Power 's purchase prices are equivalent to the duty -paid 
value of the goods within the meaning of Section 27 ".561 
7.301.   Finally, the Panel does not see how Th ailand 's assertions regarding the meaning of the 
Charges – that the "actual price " in the 2002 -2003 Charges is to be understood as merely 
establishing an "approximate " reference value of the goods for which it is "unnecessary to quantify 
the exact amount "562 – can be reconciled with the content of the 1,052 revised NoAs . The figures 
presented in the revised NoAs as the "actual value " used by the Thai Customs for determining the 
customs duties due in respect of the 779 entries covered by both sets of measures  are the same 
figures found in the Charges under "actual price ". In the context of the 1,052 revised NoAs, the 
"actual value " is undoubtedly not a n "approximate " reference value, and cannot be understood as 
anything other than the result  of the Thai authorities ' exercise of  quantify ing the exact value of the 
goods at issue.563 The NoAs reflected the final determination of the value of  the goods at issue made 
by the Thai Customs Department, not some intermediate or provisional step in respect of which the 
use of an approximate reference value might be conceivable  or acceptable . The inescapable 
conclusion is that both the 1,052 revised N oAs and the Charges fix or determine the monetary valu e 
of PMTL 's imported cigarettes . 
7.302.   Based on the foregoing, the Panel concludes that, like 2003 -2006 Charges, the  "actual price " 
in the  2002-2003 Charges prima facie  fixes or determines the monetary value of PMTL 's imported 
cigarettes, and  cannot be construed as merely an approximate reference value as asserted by 
Thailand.  
                                                
560 (footnote original ) Emphasis added. Thailand argues that Section 103 of the Customs Act is the 
relevant provision for the calculation of a criminal fine,  and that therefore Section 103, and not Section 2, is 
the correct context for understanding the term "price" as used in the Charges. (Thailand's second written 
submission, para. 3.118 -3.120) We agree with the Philippines that it is clear from the terms of  the Charges 
that they refer to the "price" for the purpose of establishing the constituent elements of the crime under 
Section 27 of the Customs Act, not "for the purpose of fixing the amount of any fine or penalty". (Philippines' 
response to Panel questi on No. 33, paras. 261 -274.) Accordingly, we agree with the Philippines that Section 2, 
and not Section 103, is the relevant provision of the Customs Act for the purpose of understanding the term 
"price" as used in the Charges.  
561 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.662. (fns 
omitted)  
562 Thailand's response to Panel question No. 171(a), para. 6.22.  
563 Thailand accepts that, in issuing the 1,052 revised NoAs, the Customs Department made customs 
valuation deter minations that are subject to Thailand's  procedural and substantive obligations under the CVA. 
(Thailand's response to Panel question No. 163(a).)  WT/DS371/RW2  
 
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  7.3.3.3.3.4   The issue of  the "actual price " as the "price actually paid or payable "  
7.303.   Having found that the reference to the "actual price" in the 2002 -2003 Charges fixes or 
determines the actual and exact monetary value of PMTL's imported cigarettes,  the Panel now turns 
to assess the question of whether the references to the "actual price " in the Charges and their Annex 
refer to the "price actua lly paid or payable " for the imports at issue, as Thailand maintains, or 
whether they refer instead to a revised customs value that does not call into question the price 
actually paid or payable by PMTL, as the Philippines maintains. The Panel recalls that  Thailand made 
this argument in the alternative.  
7.304.   The 2003 -2006 Charges at issue in the first recourse to Article 21.5 explicitly stated that the 
"actual price " which they contained was a reference to the prices of King Power, the duty -free 
operator, which was the benchmark that the Thai authorities relied upon to reject PMTL 's transaction 
values for purposes of customs valuation. As regards the 2003 -2006 Charges, Thailand asserted 
that they too were to be understood as alleging customs fraud, in the sense t hat the price declared 
by PMTL was not the price actually paid or payable to PMPMI. However, Thailand never suggested 
that the "actual price " was the "price actually paid or payable " in the case of the transactions at 
issue between PMTL and PMPMI, which wo uld have amounted to saying that PMTL 's purchase prices 
happened to be identical to King Power prices. What Thailand argued was that this reference to King 
Power 's prices did not constitute any attempt to determine a revised customs value within the scope 
of Articles 2 through 7 of the CVA, and was rather merely a possible benchmark for determining a 
penalty in the event that the Court convicted PMTL of violation Section 27. As already noted, the 
Panel found that Thailand 's reading of the Charges could not be supported by the actual text of the 
instrument, when it is read in conjunction with its accompanying Annex, the domestic legal 
framework in which the Charges were situated, and the events culminating in the Charges.  
7.305.   In the Panel 's view, the circumstance s surrounding the 2002 -2003 Charges suggest that the 
"actual price " in the 2002 -2003 Charges refers to a revised customs value calculated using the 
computed value methodology under Article 6 and/or the flexibilities under Article 7 of the CVA, and 
not, as Thailand suggests, a determination of the "price actually paid or payable " for the goods in 
question. While the 2002 -2003 Charges are not free of ambiguity on this point, the Panel considers 
that each of the considerations that Thailand refers to in suppor t of its position actually point in the 
opposite direction.  
7.306.   First, Thailand suggests that because the 2002 -2003 Charges allege that PMTL committed 
an offence of customs fraud under Section 27 of Thailand 's Customs Act, this is an indication that 
the Charg es accuse PMTL of declaring an import value that is not the price actually paid b y the buyer 
to the seller564, and that the "actual price " in the Charges refers to the latter.565 However,  for the 
reasons that follow the Panel considers that t he nature and legal basis of the C harges brought against 
PMTL by the Public Prosecutor do not permit concluding that the "actual price " reflects a 
determination of the price actually paid or payable by PMTL to PM Indonesia.  
7.307.   The 2003-2006 Charges alleged the same offense  under the same provision of Thai law 
(Section 27  of the Customs Act ), and the Panel found that the 2003-2006 Charges used the term 
"actual price " to refer  not to the price actually paid  or payable, but to a benchmark and revised 
customs value used for the  purpose of rejecting the price paid by PMTL to PM PMI as a basis for 
customs valuation. The same entity (the Public Prosecutor) prepared and filed both sets of Charges, 
and both are based on the same investigations and prosecution recommendations made by t he same 
entity (the DSI). It may not be inconceivable that the responsible Thai authorities could have used 
the term "actual price " in a completely different sense in the two sets of Charges; however, that 
abstract possibility alone is not sufficient to di stinguish the 2002 -2003 Charges from the 2003 -2006 
Charges. Because the two sets of Charges are based on the same provision and were brought by 
the same Thai entity, only one year apart from one another, and dealing with the same importer , 
the Panel 's unde rstanding of the term "actual price " in the context of the 2003 -2006 Charges may 
be relevant, and taken into account, to understand how t he same Thai authorities bringing another 
Charges under Section 27 used the same term – i.e., the "actual price " – in the context of the 2002 -
2003 Charges.  
                                                
564 Thailand's first written submission, para. 3.19.  
565 Thailand's second written submission, para. 3.14.  
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  7.308.   Second, Thailand argues that the nature of the information used to calculate the "actual 
price", namely the exporter 's own declaration of its costs and profits to its own government as 
reported in the CK -21A forms, is an indication that the authorities were seeking to determine the 
"price actually paid or payable " by PMTL to PM Indonesia.566 However, for the reasons that follow 
the Panel considers that t he pricing and cost information used by the Thai authorities to calculate  
the "actual price " also does not serve as an indication that the Thai authorities  were seeking to 
discover the price actually paid or payable by PMTL to PM Indonesia. In the Panel 's view, the nature 
of the pricing and cost informat ion relied upon by the Thai authorities  rather  suggests that they were 
constructing a benchmark  value,  and not attempting to discover the "price actually paid or payable " 
between two parties . 
7.309.   As the European Union observes in its third -party submission, "cost structure information 
received from the Indonesian government … would qualify as meta -data rather than as actual prices 
paid in Thailand ".567 In its response to a question from the Panel asking it to explain exactly how it 
determined the actual price on the basis of the information in CK -21A, Thailand confirms that it used 
the information in the CK -21A forms to  "calculate [] a constructed  CIF price ".568 Specifically, Thailand 
states that its authorities proceeded as follows:  "Thailand obtained the cost of pr oduction by 
subtracting from the retail price the following: excise tax, value -added tax, and profits for agents 
and distributors. Once the cost was obtained, Thailand added an amount for freight and insurance, 
which gave a CIF price per pack in Rupiahs (I ndonesia 's currency). This amount was then converted 
to Thai baht using the applicable exchange rates. "569 
7.310.   As explained by Thailand, its constructed CIF price based on data of the type reflected in the 
CK-21A forms constitutes a constructed benchmark value. Such data is not directly related to the 
transactions at issue, whereas the very notion of "transaction v alue" is inherently transactional . 
Moreover, as the Philippines points out, there is no necessary relationship between a producer 's 
costs and profits and its selling price in particular transactions.570 As the European Union puts it, "i f 
the cost information  in CK-21A were to prove the price actually paid, it would in the European Union 's 
understanding, need to relate to the actual transactions at stake. If it relates to Philip Morris ' cost 
structure more generally, it rather serves to establish abstract benc hmark prices which by definition 
cannot be the price actually paid. "571 
7.311.   Additionally, the Panel notes that P aragraph 3 of the Interpretative Note to Article 1.2 
envisages that when an examination of the circumstances of sale finds that the "price actually pa id 
or payable " (the transaction value) is inadequate to ensure recovery off all costs plus a 
representative profit, this could support a determination that the price paid was influenced by the 
relationship between the parties. Contrary to what Thailand 's argument seems to suggest, such a 
finding does not in itself imply that the declared price was not "the price actually paid or payable ", 
and that the importer committed customs fraud.  
7.312.   In any event, the Panel considers that even if the reference to the "actual price " in the 2002 -
2003 Charges is understood as a determination of the "price actually paid or payable ", this would 
                                                
566 Thailand's first written submission, paras. 3.20 -3.21; second written submission, para. 3.11. 
Thailand states that "where the transaction value reported by the importer  into Thailand appears to reflect very 
different values than might be expected based on the exporter's  declarations of costs and profits to the 
Indonesian government, any reasonable authority would have grounds to suspect that the declared transaction 
value does not reflect the price actually paid or payable". (Thailand's second written submissio n, para. 3.4.)  
567 European Union's third -party submission, para. 24.  
568 Thailand's response to Panel question No. 143, para. 5.3. (emphasis added)  
569 Thailand's response to Panel question No. 143, para. 5.2. The Panel notes that there is a degree of 
ambiguit y surrounding Thailand's explanations as to the manner in which the Thai authorities calculated the 
CIF price. Commenting on Thailand's statement that its authorities had proceeded by "subtracting from the 
retail sales price" the specified taxes and profit s, the Philippines argued that this meant that Thailand used a 
deductive calculation, working backwards "from the retail price", in a way that inconsistent with both Article 
7.2(c) and 7.3(d). (Philippines' opening statement at the meeting of the Panel, pa ras. 69 -76.) In response to a 
question from the Panel asking Thailand to respond, Thailand stated that its authorities had calculated the CIF 
price on the basis of the pricing and cost information reported by PM Indonesia in the CK -21A forms, and 
"[t]he fa ct that these costs figures can also be revealed by subtracting from the retail price certain 
expenditures … does not imply that Thailand calculated the constructed CIF price on the basis of the retail price 
in Indonesia within the meaning of Article 7.2(c )." (Thailand's response to Panel question No. 169, para. 5.4.)  
570 Philippines' response to Panel question No. 140, para. 91.  
571 European Union's response to Panel question No. 14(b) to third parties, para. 15.  
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  still reflect a customs valuation determination subject to the disciplines in Article 1.1 of the CVA. 
There is nothing in the ordinary meaning of the terms of Article 1.1 to suggest that an authority has 
a free hand to determine the "price actually paid or payable ". Furthermore , it would be contradictory 
for the CVA to establish that the "primary basis for customs value under this Agreeme nt is 
'transaction value ' as defined in Article 1 "572, and then find that the same CVA does not apply to the 
authorities ' determination of the transaction value (i.e. the "price actually paid or payable "). The 
Panel does not see any legal basis for, or the logic in, the view that an authority 's determination of 
the "price actually paid or payable " under Article 1.1 is a matter to which the CVA does not apply.  
The Panel notes that neither party, nor any third party, has ar gued that an authority has a free hand 
in determining the price actually paid or payable.573  
7.313.   Thailand argues that the 2002 -2003 Charges accuse PMTL of declaring an import value that 
is not the price actually paid b y the buyer to the seller, and therefore constitute the kind of "customs 
fraud" that the Panel stated that it was inclined to agree fell outside of the scope of application of 
the CVA.574 In Thailand 's view, if a measure concerns "customs fraud ", then it follows that it  does 
not determine "the monetary worth or price of imported goods for the purposes of levying ad valorem  
customs duties ".575 Thailand repeatedly asserts that the 2002 -2003 Charges fall outside of the scope 
of the CVA simply because they allege "customs frau d", and imputes that view to the Panel on the 
basis of what the Panel said in paragraph 7.649 of the Report.576  
7.314.   Contrary to Thailand 's reading, the Panel did not say that the CVA would not have applied if 
Thailand had been able to substantiate its assertion  "that the allegation against PMTL relates to 
customs fraud as previously defined by the panel ". The Panel stated that it would have been inclined 
to agree with Thailand that the CVA would not apply to the challenged measure if, as Thailand had 
asserted, t he allegation against PMTL relates to customs fraud as previously defined by the panel, 
and if it did not determine the actual customs value of the imported goods . It was in response to 
Thailand 's core assertion that "the Charges do not determine or even a ttempt to determine what 
should  be the 'true' or 'correct ' or 'actual ' customs value "577 that the Panel stated:  
We would be inclined to agree with Thailand that the Charges fall outside of the scope 
of application of the CVA if Thailand were to substantiate its interrelated assertions that 
the Charges allege customs fraud based on a determination that the price that  PMTL 
declared  to have paid to PMPMI was not the actual  price that was paid to PMPMI, and 
that the references to King Power 's prices in the Annex merely serve as a possible  
benchmark for the purposes of a fine and not as a basis for determining the actual 
customs value of PMTL 's imported goods .578 579 
7.315.   The wording of this statement is clear. However, in its interim review comments in the first 
recourse to Article 21.5, Thailand made comments on paragraphs 7.681 and 7.682 that seemed to 
assume that paragraph 7.64 9 contained the broad statement that the CVA would not apply insofar 
as the declared transaction value is not the price actually paid or payable.580 The Philippines 
                                                
572 CVA, General Introductory Commentary, para. 1.  
573 Parties' responses to Panel question No. 142; European Union's response to Panel question No. 15 to 
third parties; United States' response to Philippines' question No. 1 to third parties.  
574 Thailand's first written submission, paras. 3.10 -3.25.  
575 Thailand's first written submission, para. 3.23.  
576 See e.g. Thailand's first written submission, para. 3.16 (stating that "[a]s part of its reasoning, the 
panel clarified that, in the specific circumstances of the 03 -06 charges, the CVA would not have appl ied if 
Thailand had been able to substantiate its assertions that the allegation against PMTL relates to customs fraud 
as previously defined by the panel"); opening statement at the meeting of the Panel, para. 3.7 (asserting that 
"[t]he Panel stated, in no  uncertain terms, that it "would be inclined to agree with Thailand that the Charges 
fall outside the scope of the CVA" should Thailand be able to demonstrate that Charges allege customs fraud as 
previously defined by the Panel.")  
577 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.612, 7.631, 
and 7.686.  
578 (footnote original ) The Panel need not decide, and therefore does not decide, whether in such 
circumstances the domestic authorities may still be subject to the proc edures elaborated in the Decision 
Regarding Cases Where Customs Administrations Have Reasons to Doubt the Truth or Accuracy of the Declared 
Value.  
579 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.649. (emphasis 
added) 
580 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 6.39.  
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  considered that the statement in paragraph 7.649 was unnecessary obiter dicta , and expressed the 
concern, in the light of Thailand 's apparent misreading of that statement, that  Thailand 's "reliance 
upon this statement at the first opportunity " illustrates "the dangers of the Panel 's approach " in 
making this obiter  statement.581 The Panel explained t hat it retained this statement because the 
circumstances addressed by the Panel were those put forth by Thailand as part of its argumentation 
as to the meaning of the 2003 -2006 Charges.582 However, the Panel clarified that:  
[P]aragraph 7.649 does not make a blanket statement that the CVA does not apply to 
any circumstance when the declared transaction value is not the price actually paid or 
payable. Rather, the text states that we would 'be inclined to agree ' with Thailand that 
the Charges fall outside of the  scope of application of the CVA if Thailand were to 
substantiate its "interrelated assertions " that (i) "the Charges allege customs fraud 
based on a determination that the price that PMTL declared  to have paid to PMPMI was 
not the actual  price that was paid to PMPMI ", and that (ii) "the references to King 
Power 's prices in the Annex merely serve as a possible benchmark for the purposes of 
a fine " and (iii) not "as a basis for determining the actual  customs value of PMTL 's 
imported goods ".583 (emphasis original)  
7.316.   Additionally, the Panel notes that it reiterated, in the context of responding to Thailand 's 
interim review comments on paragraphs 7.681 and 7.682, that "contrary to what Thailand 's 
comment mig ht be taken to imply, paragraph 7.649 does not make a blanket statement that the 
CVA does not apply when the declared transaction value is not the price actually paid or payable ".584 
Furthermore, the Panel notes that it  made certain other statements in its R eport that assume the 
applicability of the CVA to measures combatting customs fraud, insofar as such measures reflect a 
customs valuation determination. For instance, in the context of its analysis under  Article XX of the 
GATT 1994, the Panel stated that "measures taken by a Member to combat customs fraud will not 
run afoul of the obligations contained in the CVA unless such measures are premised on a false 
customs value that was determined inconsistently with the provisions of the CVA ."585  
7.317.   In conclusion, th e Panel concludes that the "actual price " does not refer to the "price actually 
paid or payable ", as Thailand maintains, but is rather a revised customs value determined by the 
DSI and Public Prosecutor. In any event, the Panel considers that even if the reference to the "actual 
price" in the 2002 -2003 Charges is understood as a determination of the "price actually paid or 
payable", this would still reflect a customs valuation determination subjec t to the disciplines in 
Article  1.1 of the CVA.  
7.3.3.3.3.5   Conclusi on  
7.318.   The Panel finds that the 2002 -2003 Charges meet the first element  of the definition of 
"customs valuation " in Article 15.1(a) of the CVA as understood by the Panel in the first recourse to 
Article 21.5. L ike 2003 -2006 Charges, the 2002 -2003 Charges fix  or determine the monetary valu e 
of PMTL 's imported cigarettes by determining the "actual price " of the 780 entries of cigarettes.  
7.3.3.3.4   The consequences of the Charges  
7.319.   The Panel will now turn to Thailand 's argument that the  2002-2003 Charges do not satisfy 
the second element of Article 15.1(a), because they are not "for purposes of levying ad valorem  
duties  of customs ". Thailand made a similar argument in the first recourse to Article 21.5, when it 
argued that the 2003 -2006 Charges did not meet the second elem ent of Article 15.1(a) because 
they would only result in criminal fines and penalties, and would  not result in border measures 
levying ad valorem  customs duties on imported goods .586 The Panel noted that Thailand 's argument 
essentially relate d to the consequ ences that may follow from the Charges587, and for that reason 
                                                
581 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 6.39.  
582 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 6.34.  
583 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 6.34.  
584 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 6.39.  
585 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.756. (emphasis 
added)  
586 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.613, 7.668.  
587 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.665.  
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  addressed this argument in S ection 7.3.5.3.4 under the heading, "The consequences of the 
Charges ".  
7.320.   The Panel considers it useful to recall Thailand 's arguments on this issue in the first recours e 
to Article 21.5. Thailand refer red to the ordinary meaning of the term "levy", and submit ted that 
"the second element is satisfied only if the valuation of the goods has the purpose of collecting 
charges imposed at the border on goods entering the country ".588 Thailand state d that "[n]owhere 
in the Charges does the Public Prosecutor indicate that the criminal accusations against PM Thailand 
shall be the basis for levying ad valorem customs duties ".589 Thailand further submit ted that the 
customs duties o n the 272 entries have already been levied and paid; hence, all matters relating to 
the customs valuation and levying of ad valorem  customs duties for these 272 entries had 
concluded.590 Furthermore, Thailand pointed  out that, as a matter of Thai law, neithe r the Public 
Prosecutor nor the Criminal Court has the legal power to value imported goods for the purposes of 
levying ad valorem  customs duties.591 According to Thailand, if a fine were imposed, it would "have 
no effect on the customs duties that [were] alr eady paid by PM Thailand with respect to these 
272 entries "592, and the potential criminal fine at issue "would not be a charge levied at the border 
on goods entering Thailand ".593 
7.321.   The Panel rejected Thailand 's restrictive interpretation of the terms "for purp oses of levying 
ad valorem  duties of customs on imported goods ". The Panel concluded that by  their plain terms, 
the 2003-2006 Charges read in conjunction with their Annex determine d the monetary worth or 
price of imported goods of PMTL "for the purpose of determining the amount of the ad valorem  
customs duties that should have been paid by PMTL ".594 The Panel read the terms "for the purposes 
of levying ad valorem  duties " in the context of Article 15.1(a) "as embracing any determination of 
the value of imported goods for the purpose of determining the amount of ad valorem  duties due on 
those imported goods ".595 The Panel explained why it did  not consider that the applicability of the 
CVA to the Charges turn ed on the meanin g of the term "levying "596, and observed that Thailand 's 
interpretation of Article 15.1(a) was  "contradicted by various provisions of the CVA which establish 
that customs duties are not necessarily 'levied on the border ', either in physical or temporal 
terms ".597 The Panel also explained that if Thailand were correct in its argument that the CVA only 
applies to customs valuation determinations that result in the actual  levying of ad valorem  customs 
duties, "Members could very easily evade their CVA obligations ".  
7.322.   Thus, the Panel based its interpretation on the ordinary meaning of the terms of 
Article  15.1(a) read in their context and in the light of the CVA 's object and purpose as required by 
Article 31(1) of the Vienna Convention. The Panel also took note of ho w Thailand 's arguments on 
this point evolved in the first recourse to Article 21.5, stating that:  
It appears to us that Thailand distances itself from the restrictive interpretation of 
Article  15.1(a) that would lead to this consequence. In response to a q uestion from the 
Panel, Thailand accepted the proposition that if an agency values imported goods for 
the purpose of determining the amount of the ad valorem  customs duties (and excise 
tax) that should have been paid at the time of importation, this would not cease to 
constitute the valuation of goods "for the purposes of levying  ad valorem customs 
duties " if it results in a fine.598 
7.323.   In its first and second written submissions  in this second recourse to Article 21.5 , Thailand 
argued that the CVA is inapplicable to the 2002 -2003 Charges because the Public Prosecutor is not 
part of the "customs administration ", and because the 2002 -2003 Charges are the kind of measure 
                                                
588 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.613.  
589 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.613.  
590 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.613.  
591 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.613.  
592 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.613 . 
593 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.613.  
594 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.667.  
595 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21 .5 – Philippines) , para. 7.669.  
596 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.669.  
597 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.670.  
598 Panel Report, Thailand – Cigaret tes (Philippines)  (Article 21.5 – Philippines) , para. 7.671 (referring to 
Thailand's response to Panel question No. 105).  
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  taken against "customs fraud " that the Panel indica ted did not involve a determination of the 
"customs value of imported goods " in the sense of the first element of Article 15.1(a). However, in 
its opening statement at the meeting of the Panel, Thailand reverted back to its argumentation on 
the second elem ent of Article 15.1(a), and argued that the Panel was wrong to reject Thailand 's 
interpretation of the terms "for purposes of levying ad valorem  duties " in Article 15.1(a).599  
7.324.   Thailand argue s that the terms "for purposes of levying ad valorem  duties of cust oms on 
imported goods " only embrace measures that that have a "direct repercussion " for600, or "direct 
connection " to601, the amount of the ad valorem  duties levied. Thailand submits that, for a valuation 
measure to satisfy the second element of Article 15.1(a ), it "must be made for the calculation of 
duties that are to be collected  from the importer "602, and cannot be an abstract determination of the 
amount of customs duties that are "due" or that "should have been paid ".603 At the hearing and in 
its responses to the post -hearing questions from the Panel, Thailand maintained that it is the 
interpretation and application of the second  element of Article 15.1(a) that actually constitutes the 
"key issue " concerning the applicabil ity of the CVA to the 2002-2003 Charges.604  
7.325.   In developing this argument, Thailand reiterates some of the same points that it made, and 
which the Panel 's reasoning already addressed, in the first recourse to Article 21.5. For instance, 
Thailand states that i n the case of the entries covered by the Charges, "the ad valorem  duties were 
calculated, levied and paid years ago ".605 It refers, as it did in the first recourse to Article 21.5, to 
the analysis by the panel in Colombia – Ports of Entry .606 It observes, as i t did in the first recourse 
to Article 21.5, that a fine is not the same as a customs duty, and that to conclude otherwise would 
lead to the conclusion that fines would be subject to all obligations under the GATT 1994 including 
tariff bindings. The Panel considers that its reasoning in the Report i n the first recourse to Article  21.5 
sufficiently addresses these points, and that there is no reason to repeat that analysis or dwell 
further on these points here.  
7.326.   The Panel does not consider it necessary to de velop any additional reasoning beyond that 
already set forth in the Report in the first recourse to Article 21.5. In fact, the factual configuration 
of this case further corroborates the reasoning of the Panel in that Report as it provides a  concrete, 
real-world example of the type of scenario that the Panel cautioned might arise if Thailand 's 
restrictive interpretation of the scope of the second element of Article 15.1(a) of the CVA was 
adopted. The consequence of Thailand 's position is that the CVA obliga tions at issue would apply to 
the 1,052 revised NoAs issued by the Customs Department in November 2017, but those obligations 
would not apply to the 2002 -2003 Charges issued by the Public Prosecutor in January 2017, 
notwithstanding that both  the revised No As and the Charges  rest on the same basis (i.e. the DSI 
calculation of the "actual " value of PMTL 's imports of cigarettes based on the cost information in 
excise tax form CK -21A) and that both cover overlapping entries.607 Therefore, the facts of this case 
are a variation of the hypothetical situation that the Panel alluded to i n the first recourse to 
Article  21.5, when it expressed its concern that if Thailand 's restrictive interpretation of the second 
element of Article 15.1(a) were adopted, then:  
A Member 's customs administration and law enforcement agency could each undertake 
a valuation decision for exactly the same purposes, namely, to establish the value of 
goods that should have been used for the purposes of levying customs duties due on 
goods a t or following the time of their importation. However, while the CVA would apply 
to the Member 's valuation actions in initially valuing the goods, it would not apply when 
the value is re -assessed a second time, after the goods have passed the border. We 
agree with the Philippines that s uch an interpretation would render the CVA worthless, 
because Members could evade their CVA obligations simply by having a law enforcement 
agency re -assess the values initially determined by the customs administration.608 
                                                
599 Thailand's opening statement at the meeting of the Panel, paras. 3.16 -3.19.  
600 Thailand's opening statement at the meeting of the Pa nel, paras. 3.16 and 3.19.  
601 Thailand's response to Panel question No. 171(a), para. 6.27.  
602 Thailand's response to Panel question No. 171(a), para. 6.9. (emphasis added)  
603 Thailand's response to Panel question No. 171(a), para. 6.9.  
604 Thailand's respons e to Panel question No. 171(a), para. 6.11.  
605 Thailand's response to Panel question No. 171(a), para. 6.27.  
606 Thailand's response to Panel question No. 171(a), paras. 6.4 -6.10. 
607 Thailand's response to Panel question No. 138.  
608 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.671.  WT/DS371/RW2  
 
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  7.327.   It is also important to clarify that, c ontrary to what Thailand 's arguments in this case seem 
to imply, the Panel 's interpretation of the words "for purposes of levying ad valorem  duties " does 
not lead to the consequence that approximate reference values used f or risk assessment or 
guarantees  to secure  the payment of customs duties are themselves  "customs valuation  
determinations " that must be calculated in accordance with the customs valuation rules in Article 1 
through 7.  The reason is that the use of such reference values for these purposes would typically 
not reflect any determination of the monetary worth or price of imported goods  in a way that would 
meet the first element of Article  15.1(a); and as a consequence  of not meeting the first element of 
Article 15.1(a) , they would not be able to serve as the basis for determining the amount of customs 
duties that were  or are actual ly due from the importer, in the sense of the amount of customs duties 
that should have been or should be collected from the importer, in a way that would satisfy the 
second element of Article  15.1(a).  
7.328.   To elaborate, risk-assessment tools based on "referen ce" or "minimum " values are 
established for the purpose of identifying suspicious imports: these do not, in any way, determine 
the amount of ad valorem  customs duties actually due.609 As for gua rantees, the wording of 
Article  13 of the CVA makes it clear tha t they serve the purpose of securing potential future liability 
for duties that might  be due; a guarantee does not serve the purpose of determining the amount of 
ad valorem  customs duties actually due.  As the original panel explained, the determination of the 
amount of a guarantee is not undertaken for the levying  of ad valorem  duties "due", because a 
guarantee is "not the final determination of a customs value of a good ".610  
7.329.   Thus, t he problem with Thailand 's argument is that it presupposes that approximate 
reference values used for risk assessment or guarantees  to secure the payment of customs duties 
entail a determination of  the monetary worth or price of imported goods that suffices to meet the 
first element of Article  15.1(a)611; and based on  that premise, Thailand then argues that it is 
necessary to develop a restrictive interpretation of the second element of Article 15.1(a) ( "for 
purposes of levying ad valorem  duties of customs on imported goods ") to avoid the absurd result 
that such values wo uld have to be determined in accordance with the customs valuation rules in 
Articles 1 to 7 (which would defeat the purpose of relying on such values in the first place).612 For 
the foregoing reasons, the Panel does not agree with the first underlying premis e of this reasoning. 
The Panel hereby incorporates by reference the reasoning in Section 7.3.5.3.4 (The consequences 
of the Charges) of its Report in the first recourse to Article 21.5.  
7.330.   Based on the foregoing, the Panel finds that the second element of Art icle 15.1(a) is also 
satisfied , and thus reaches the overall conclusion that the 2002 -2003 Charges meet both elements 
of the definition of "customs valuation " in Article 15.1(a) of the CVA as understood by the Panel in 
the first recourse to Article 21.5: (1) like 2003 -2006 Charges, the 2002 -2003 Charges fix or 
determine the monetary valu e of PMTL 's imported cigarettes by determining the "actual price " of 
the 780 entries of cigarettes; and ( 2) like 2003 -2006 Charges, the 2002 -2003 Charges rely on this 
"actual price " for the purpose of determining the amount of ad valorem  duties that were due, and 
that should have been paid by the importer at the time of importation, on those imported goods .  
                                                
609 Thailand explains that "[t]hese tools, which are known as 'valuation databases' or 'reference values', 
are widely used by countries around the world and are recommended by the World Customs Organization. The 
WTO Technical Committee on Customs Valuation ha s noted that 'the use of a national valuation database as a 
risk assessment tool' was among the list of measures mentioned in the Control Handbook prepared by the 
World Customs Organization. Even the Philippines maintains a system of 'reference values' for  a wide range of 
products, whereby further customs controls are applied whenever the declared import values fall below the 
reference values." (Thailand's response to Panel question No. 171(a), para. 6.12 (referring to Committee on 
Customs Valuation, Minute s of the meeting of 8 May 2007, G/VAL/M/43, p . 10).)   
610 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.1041. The Appellate Body confirmed this 
determination in paragraphs 215 -216 of its report.  
611 Thailand's response to Panel question No. 171(a), para. 6.13.  
612 In Colombia – Textiles (Article 21.5 – Colombia/Panama) , the panel stated, at paragraphs 7.608 -609 
of its Report, that it did " not find any provision in the text of the relevant articles of the Customs Valuation 
Agreement that requires a Member's  customs authorities to use the valuation methods established in Articles 
1, 2, 3, 5, 6 and 7 of the Agreement in order to determine the coverage of a guarantee that permits goods to 
be withdrawn. … t he provision of a valuation dispute guarantee must be requested, by definition, before the 
final value of the goods has been clarified in accordance with the valuation methods established in the above -
mentioned Articles."  
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  7.3.3.3.5   The "intention to defraud " aspect of the Charges  
7.331.   The Panel now briefly considers  Thailand 's comments on the relevance of the Appellate Body ' 
findings in US -1916 Act  to the question of whether the CVA applies to measures that have, as their 
core element, the "intention to defraud " the government. While Thailand comments o nly in 
passing613, the Panel addresses Thailand 's comment in the interest of clarifying the context and 
purpose for which the Panel relied on that reasoning in the Report i n the first recourse to Article  21.5. 
7.332.   Section 27 of the Customs Act makes it a crimina l offense to evade the payment of "duties 
on Customs ", with the intention to "defraud the government " of the "duties " that are "due on such 
goods ". Thus,  as explained by the Panel in the first recourse to Article 21.5,  there are two constituent 
elements to the offence under Section 27 of the Customs Act, and to the allegations made  against 
PMTL in the Charges: (1 ) the first element of the allegation is tha t PMTL did not pay the customs 
duties due on the imported goods ( actus reus ); and ( 2) the second element of the allegation is that 
PMTL did so with the intention to defraud ( mens rea ).614 In the first recourse to Article 21.5, Thailand  
argue d that even if the Charges contain ed a "customs valuation " determination  that satisfied both 
the first and second elements of Article 15.1(a) , the CVA should nonetheless be found to be 
inapplicable to the customs valuation aspect of the Charges as a consequence of the non -applicability 
of the CVA to the "intention to defraud " aspect of the Charges.615 As Thailand put it , "even if the 
Charges were to qualify as 'customs valuation ', the Charges would still fall outside the scope of the 
CVA because the Charges relate to a crimin al accusation that focuses on whether PM Thailand had 
the intention to defraud the government ".616  
7.333.   The Panel was not persuaded by Thailand 's argument that the CVA would be inapplicable to 
the "customs valuation " aspect of the Charges covered by Article 15.1(a) of the CVA as a 
consequence of the non -applicability of the CVA to the "intention to defraud " aspect of the Charges.  
As explained in greater detail in the Report617, the Panel noted that it is a general principle of WTO 
law that, "insofar as a WTO obligation is by its terms applicable to the particular aspect of a domestic 
measure being challenged, it does not become inapplicable to that aspect as a consequence of the 
same measure containing other aspects that are not regulated by t hat WTO obligation ".618 Against 
this background, the Panel held that the additional "intent " element under Section 27 of the Customs 
Act did not exclude the application of the CVA. To this end, the Panel referred to the Appellate Body 's 
finding in US – 1916 Act , which found that, because the measure at issue in those proceedings – 
the United Stat es' Anti-Dumping Act of 1916 – contained the constituent elements of dumping, it 
was subject to the Anti-Dumping Agreement , notwithstanding that it also contained a requirement 
that conduct be undertaken with a particular "intent ".619  
7.334.   In this second recours e to Article 21.5, Thailand expresses its disagreement with the Panel 's 
reliance on the Appellate Body 's analysis in US – 1916 Act . According to Thailand, the Appellate 
Body correctly indicated that a measure cannot be excluded from the scope of WTO law si mply 
because that measure has components that are not regulated by WTO law. However, Thailand states 
that "[i]n the case of criminal charges of customs fraud, however, neither component of the measure 
is covered by the CVA ".620 Therefore, in Thailand 's view, because the Charges  pertain to customs 
fraud and  do not meet the first or second element of Article 15.1(a), they are, in their entirety, not 
covered by the CVA and "the reference to the Appellate Body 's findings in US – 1916 Act in the 
Panel 's reaso ning is equally misplaced ".621 
7.335.   The Panel agrees with Thailand that if the 2003 -2006 Charges had not met the two elements 
in Article 15.1(a) of the CVA, then they would not reflect a "customs valuation " determination subject 
to Articles 1 to 7 of the CVA. The CVA could not be made applicable to the Charges by virtue of any 
reasoning in US – 1916 Act . In that sense, it would indeed be "misplaced " to rely on the Appellate 
                                                
613 Thailand's opening statement at the substantive meeting, para. 3.20.  
614 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.674.  
615 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.614, 7.674 and 
7.676.  
616 Panel Re port, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.614 and 7.676 
(referring to Thailand's response to Panel question No. 47(b), p. 45.)  
617 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7 .677-7.683.  
618 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.677.  
619 Appellate Body Report, US – 1916 Act , paras. 131 -132. 
620 Thailand's opening statement at the substantive meeting, para. 3.20.  
621 Thailand's opening  statement at the substantive meeting, para. 3.20.  WT/DS371/RW2  
 
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  Body's findings in US – 1916 Act  to reach the conclusion that the CVA applies to the Charge s even 
when  both elements in Article 15.1(a) of the CVA were not met. However, contrary to what might 
be implied by Thailand 's comments in this proceeding, the Panel did not refer to the reasoning in 
US – 1916 Act  for that purpose  and in that sense .  
7.336.   As explained above, it was Thailand that argued that even if the Charges met both elements 
of Article 15.1(a), they would still not be subject to the CVA by virtue of the additional "intention to 
defraud " aspect of the Charges. Thailan d argued that this was so because that aspect of the Charges 
is not regulated by the CVA. The Panel addressed this argument, separately from and only after 
having addressed, the question of whether the Charges met the two elements of Article 15.1(a). In 
the context of addressing that separate argument, the Appellate Body 's reasoning in US – 1916 Act  
was relied on because of its  pertinen ce. Insofar as Thailand 's comments on that aspect of the Panel 's 
reasoning are to be construed , in this second recourse to Article 21.5,  as a reiteration of the 
argument that the Panel was responding to  in the first recourse to Article 21.5 , the Panel hereby 
incorporates by reference the reasoning in Section 7.3.5.3.5 (The 'intention to defraud ' aspect of 
the Charges ) of the P anel Report in the first recourse to Article 21.5.  
7.3.3.4   Conclusion  
7.337.   Based upon the findings above, the Panel concludes that the substantive obligations relating 
to customs valuation in Articles 1 to 7 of the CVA apply to  2002-2003 the Charges.   
7.3.4   Claims under Art icles 1.1 and 1.2(a) , second sentence, and Articles 6 and 7 of the 
CVA 
7.3.4.1   Introduction  
7.338.   In the first recourse to Article 21.5, the Panel found that the 2003 -2006 Charges were 
inconsistent with Articles 1.1 and 1.2(a) of the CVA because they reject ed PMTL's dec lared 
transaction values without a valid basis, and in particular that the Public Prosecutor acted 
inconsistently with Article 1.2(a), second sentence, by not engaging in an examination of the 
circumstances of sale that was apt to reveal whether the relati onship between PMTL and PMPMI 
influenced the price paid by PMTL. The Panel additionally found that the 2003-2006 Charges were 
inconsistent with Article 2.1(a) and (b)  of the CVA , or in the alternative  Article 3.1(a) and (b) of the 
CVA, because they improperly treat ed the purchase prices of duty -free operator (King Power) as 
transaction values for "identical " or "similar " goods .622 The Panel did not consider it necessary to 
resolve whether the revised cus toms value was based on Article 2 (iden tical goods) or instead 
Article  3 (similar goods) of the CVA, and made findings of inconsistency  in the alternative .  
7.339.   In this second recourse to Article 21.5 , the P hilippines similarly  claims that the 2002 -2003 
Charge s violate Articles 1.1 and 1.2(a) of the CVA , because they reject PMTL's declared transacti on 
values without a valid basis, and that the revised customs value violates the applicable CVA 
obligations governing the use of the computed value benchmarks. The P hilippines understands the 
relevant CVA rules to be those set forth in Article 6, but also makes an alternative claim in respect 
of Article 7. It argues that the Thai authorities' comparison of PMTL 's declared transaction values 
with the benchmark price  that the Thai authorities construc ted on the basis of pricing and cost 
information reported by PM  Indonesia in the CK -21A forms is inconsistent with the CVA,  regardless 
of whether it was relied upon  for the purpose of determining: (1) whether the transaction  value was 
influenced by the relationship between the buyer and the seller pursuant to Article 1.2(a), second 
sentence, of the CVA; or (2) the "price actually paid or payable " within the meaning of Article  1.1 of 
the CVA; and/or  (3) a revised customs value  based on Article  6 of the CVA; or (4) a revised customs 
value based on Article 7 of the CVA.623 
7.340.   The Panel has already addressed the fundamental premises underlying the Philippines'  
claims. In Section 7.2 (The Thai authorities' reliance on the information in  the CK -21A forms) above, 
the Panel concluded that (1) as result of the regulatory constraints mandated by Indonesian excise 
tax law, the CK -21A forms could not represent PM Indonesia's actual costs and profits, and 
necessarily erred on the side of oversta ting the actual costs and profits of PM Indonesia  and other 
                                                
622 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , Section 7.3.6 
(Consistency of the Charges with CVA disciplines) and para. 8.2.  
623 Philippines' response to Panel question N o. 141, paras. 113 -118. WT/DS371/RW2  
 
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  parties involved in the supply chain;  and (2) there may be cases in which the customs authority in 
the importing country is entitled to assume that pricing and cost information obtained from a foreign 
government is accurate and truthful, but in this case the DSI and Public Prosecutor had no basis 
upon which to ass ume that the CK-21A information was reliable in the light of PMTL's repeated 
written explanations as to why it was not.  
7.341.   Although the Panel has upheld these premises, this does not necessarily dispose of the 
Philippines' claims under the substantive CVA pro visions referred to above. That is because the Panel 
must still consider the matter before it in the light of the particular legal standards that arise under 
the substantive obligations in Articles 1.1 and 1.2(a) second sentence, and under Articles 6 and 7  of 
the CVA. The parties disagree on several issues relating to the interpretation of these legal 
standards, some of which the Panel has already addressed earlier in its analysis.624 The Panel will 
address these issues to the extent necessary to reach a conc lusion on the CVA -consistency of the 
2002-2003 Charges.  
7.3.4.2   Analysis by the Panel  
7.3.4.2.1   General considerations  
7.342.   Article 1.1  of the CVA states that:  
The customs value of imported goods shall be the transaction value, that is the price 
actually paid or payable for t he goods when sold for export to the country of importation 
adjusted in accordance with the provisions of Article 8…   
7.343.   Subparagraph 1.1(d) includes the relevant proviso that the customs value of imported goods 
shall be the transaction value ( that is the pri ce actually paid or payable ) provided that "the buyer 
and seller are not related, or where the buyer and seller are related, that the transaction value is 
acceptable for customs purposes under the provisions of paragraph 2 ". PMTL and PM Indonesia are 
"related"625, and thus it would a priori  be WTO-consistent for the Thai authorities to reject PMTL's  
declared transaction value if it were deemed unacceptable pursuant to Article 1.2.  
7.344.   Article 1.2(a) of the CVA elaborates two distinct but related obligations, in its second and 
third sentences. It states that:  
In determining whether the transaction value is acceptable for the purposes of 
paragraph 1, the fact that the buyer and the seller are related within the meaning of 
Article 15 shall not in itself be grounds f or regarding the transaction value as 
unacceptable. In such case the circumstances surrounding the sale shall be examined 
and the transaction value shall be accepted provided that the relationship did not 
influence the price. If, in the light of informatio n provided by the importer or otherwise, 
the customs administration has grounds for considering that the relationship influenced 
the price, it shall communicate its grounds to the importer and the importer shall be 
given a reasonable opportunity to respond . If the importer so requests, the 
communication of the grounds shall be in writing.  
7.345.   Thus, Article 1.1 provides that, in principle, a customs authority must use the transaction 
value of the imported goods as the customs value. Article 1.1(d) read in conju nction with 
Article  1.2(a) clarifies that this applies also in situations in which the buyer and the seller are related, 
unless it is established that the relationship influenced the price. If a customs authority has doubts 
as to whether the relationship b etween the buyer and seller affecte d the price, then under 
Article  1.2(a), second sentence, the customs authority must examine the circumstances surrounding 
                                                
624 See Section 7.1.4.3 above (Relevance of the presumption of good faith to the interpretation of CVA 
obligations).  
625 The Panel recalls the original panel's finding that "[t]he Philippines agrees that PM Thailand and PM 
Philippines are related within the meaning of Article 15.4(f) of the Customs Valuation Agreement, because they 
are both directly or indirectly controlled by a third person, PM International." (Panel Report, Thailand – 
Cigarettes (Philippines) , footnote 460)  
 WT/DS371/RW2  
 
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  the sale, and the customs authority may reject the transaction value if it establishes that the 
relationship influenced the price.  
7.346.   The CVA does not prescribe the methodology that the customs administration must use to 
conduct its examination of the circumstances of sale  for purposes of Article 1.2(a) . In that respect, 
paragraph 3 of the Interpretative Note to Article 1.2 provides a non -exhaustive list of "example[s] " 
of how the examination may be conducted.626 Each of these examples contemplates a comparison 
between some aspect of the circumstances of the transaction under  consideration, and some 
comparator or benchmark. Paragraph 3 envisages that one such comparator or benchmark could be 
a comparison of declared transaction value with a constructed price based on "all costs plus a profit ". 
Thus, a comparison between the tr ansaction value and a properly established "cost-plus" benchmark 
can shed light on whether the relationship between the buyer and seller influenced the price. 
Specifically, if the transaction value is lower than such a benchmark, this would suggest the pro ducer 
is selling to the buyer at a price insufficient to cover the costs of production for the goods, plus 
profits, and that would be an indication  that the price may have been influenced by the relationship 
between the parties (unless there is some valid commercial reason for the failure to recover costs 
and make a profit).  
7.347.   Article 6 of the CVA provides an alternative basis for customs valuation based on a cost -
plus, or computed value, methodology. It is the penultimate methodology in the hierarchy set out  
in Articles 2 to 7 of the CVA; and an administration may only have recourse to Article 6 if it cannot 
calculate customs value using the methodologies set out in Articles 1 to 5. Article 6 provides for the 
calculation of a computed value, based on the sum of: (1) the cost of producing the imported goods; 
(2) an amount for profit and general expenses; and (3) the cost or value of all other expenses 
necessary to reflect the valuation option chosen by the Member under paragraph 2 of Article 8. The 
Interpretati ve Note to Article 6 also incorporates certain aspects of Article 8, which provides further 
detail on the specific costs that must be included in a computed value.  
7.348.   The text of Article 6.1 reads as follows:  
The customs value of imported goods under the pro visions of this Article shall be based 
on a computed value. Computed value shall consist of the sum of:  
(a) the cost or value of materials and fabrication or other processing employed 
in producing the imported goods;  
(b) an amount for profit and general expenses equal to that usually reflected 
in sales of goods of the same class or kind as the goods being valued which are 
made by producers in the country of exportation for export to the country of 
importation;  
(c) the cos t or value of all other expenses necessary to reflect the valuation 
option chosen by the Member under paragraph 2 of Article 8.  
7.349.   Paragraphs 1 through 8 of the Interpretative Note to Article 6 elaborate in detail on certain 
aspects of the computed value meth od. Notably, paragraph 2 of the Interpretative Note  mandates 
that: 
The "cost or value " referred to in paragraph  1(a) of Article  6 is to be determined on the 
basis of information relating to the production of the goods being valued supplied by or 
on behalf of the producer. It is to be based upon the commercial accounts of the 
producer, provided that such accounts are consistent with the generally accepted 
accounting principles applied in the country where the goods are produced.  
                                                
626 The thre e examples of an examination of the circumstances of sale given in Paragraph 3 of the 
Interpretative Note to Article 1.2(a) are: (1) if the price had been settled in a manner consistent with the 
normal pricing practices of the industry in question; (2) if the price had been settled in a manner consistent 
with the way the seller settles prices for sales to buyers who are not related to the seller; and (3) where it is 
shown that the price is adequate to ensure recovery of all costs plus a profit which is repr esentative of the 
firm's overall profit realized over a representative period of time (e.g. on an annual basis) in sales of goods of 
the same class or kind.  WT/DS371/RW2  
 
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  7.350.   Article 7 of t he CVA provides  for reasonable flexibilities in the event that the customs value 
cannot be determined on the basis of any of the preceding methods. The text of Article 7 reads as 
follows:  
1. If the customs value of the imported goods cannot be determined under the 
provis ions of Articles 1 through 6, inclusive, the customs value shall be determined 
using reasonable means consistent with the principles and general provisions of this 
Agreement and of Article VII of GATT 1994 and on the basis of data available in the 
country of importation.  
2. No customs value shall be determined under the provisions of this Article on the 
basis of:  
(a) the selling price in the country of importation of goods produced in such 
country;  
(b) a system which provides for the acceptance for custo ms purposes of the 
higher of two alternative values;  
(c) the price of goods on the domestic market of the country of exportation;  
(d) the cost of production other than computed values which have been 
determined for identical or similar goods in accordanc e with the provisions 
of Article 6;  
(e) the price of the goods for export to a country other than the country of 
importation;  
(f) minimum customs values; or  
(g) arbitrary or fictitious values.  
3. If the importer so requests, the importer shall be inform ed in writing of the 
customs value determined under the provisions of this Article and the method used to 
determine such value . 
7.3.4.2.2   Claims under Article 1.1 and Article 1.2(a), second sentence  
7.351.   The Panel will first consider the Philippines's claims that the 200 2-2003 Charges violate 
Article 1.1 and 1.2(a), second sentence, by rejecting PMTL's declared transaction values without any 
valid basis. The Philippines argues that the Thai authorities' comparison of PMTL's declared 
transaction values with the benchmark p rice that the Thai authorities constructed on the basis of 
pricing and cost information reported by PM Indonesia in the CK -21A forms is inconsistent with the 
CVA, regardless of whether it was relied upon for the purpose of determining: (1) whether the 
transaction value was influenced by the relationship between the buyer and the seller pursuant to 
Article 1.2(a), second sentence, of the CVA; or (2) the "price actually paid or payable" within the 
meaning of Article 1.1 of the CVA.  
7.3.4.2.2.1   Claim under  Article 1.2(a), second sentence   
7.352.   The parties disagree on several issues relating to the legal standard under Article 1.2(a), 
second sentence, in the context of an examination of the circumstances of sale that involves a 
benchmark price based on the computed value  of the goods. In general, the disputed issues relate 
to how much leeway and discretion an authority has, and whether some or all of the specific 
requirements of Article 6 (or other CVA provisions and interpretative notes that are not expressly 
cross-refere nced in Article 1.2(a) ) apply, if not directly then as relevant interpretative context, for 
the examination of the circumstances of sale under Article 1.2(a).  
7.353.   In its first written submission, the Philippines argues that where a customs authority relies 
on a benchmark price based on the computed value of the goods for the purpose of its examination 
of the circumstanc es of sale under Article 1.2(a), it is legally obliged to respect a number of rules.  WT/DS371/RW2  
 
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  In its view, these rules limit  a customs authority's discre tion, and inform the interpretation of the 
phrase "all costs plus a profit", which is found  in the last sentence of paragraph 3 of the Interpretative 
Note to Article 1.2(a). The Philippines offers the following interpretation:  
a. an examination of the circums tances of sale must involve a process of consultation627;  
b. the "detailed rules" of Article 6 of the CVA and its Interpretative Notes, which regulate the 
construction of a cost -plus value also known as the "computed value", are important 
context in interpreti ng and apply ing Paragraph 3 of the Int erpretative Note to 
Article  1.2628;  
c. in accordance with Article 8, the cost -plus benchmark under Paragraph 3 of the 
Interpretative Note to Article 1.2 must also include costs of containers, packing, materials, 
tools, die s, engineering, development, artwork, etc.629;  
d. the information considered in the cost -plus benchmark in Paragraph 3 of the Interpretative 
Note to Article 1.2 must follow the Generally Accepted Accounting Principles (GAAP) 
because of an overarching obligation to do so as reflected in the GAAP Interpretative 
Note630;  
e. based on Paragraphs 2 and 5 the Interpretati ve Note to Article 6, for the determination of 
the cost -plus benchmark under Paragraph 3 of the Interpretative Note to Article 1.2, 
authorities must use only (1) information that relates to goods being valued, that was 
(2) provided by or on behalf of the producer and (3) based on comm ercial accounts of the 
producer631; 
f. finally, on the use of "objective and accurate information", the Philippines also proposes 
to incor porate the standards reflected in  "[n]umerous other CVA provisions", namely 
Articles 2.1(b), 3.1(b), 7.2, Paragraph 5 of the Interpretative Note to Articles 2.1(b) and 
3.1(b), Paragraph 11 of the Interpretative Note to Article 5, Paragraph 1 of the 
Interpr etative Note to Article 8.1(b)(iv), Article 8.3, Paragraph 1 of the Interpretative Note 
to Article 8.3, Article 17, and Paragraph 6 of Annex III.632  
7.354.   Thailand  responds that this is a "wish list" that lacks any textual support in the CVA.633 It 
emphasizes that Paragraph 3 of the Interpretative Note to Article 1.2(a) "provides no guidance on 
how to apply the test of 'adequate to ensure recovery of all costs plus a profit'" .634 It recalls the 
Panel's reflection of the parties' agreement, in the first recourse to Art icle 21.5, that Article 1.2(a) 
"does not prescribe a specific process for customs authorities to follow", and that the customs 
authority "has a degree of discretion in deciding how to conduct its examination".635 Thailand also 
relies on the Panel's conclusio n in the first recourse to Article 21.5 that the "essential requirement 
under Article 1.2(a), second sentence, is that an examination of circumstances of sale must be apt 
to reveal whether the relationship between the buyer and seller influenced the price" .636 Thailand  
refers to the Panel's statement that "[g]iven the discretion that the CVA accords to the customs 
authority in determining its approach to examining the circumstances of sale", the Panel did "not 
consider it appropriate to indicate in the abstra ct any specific principles, beyond those articulated 
above, that would bind a customs authority in any and all situations".637 In the light of the foregoing, 
Thailand argues that the "a uthorities need not follow to the letter other CVA disciplines governing 
the c alculation of costs and profit", and " certainly need not follow the long list of obligations 
suggested by the Philippines" .638  
                                                
627 Philippines' first written submission, paras. 164 -168. 
628 Philippines' first written submission, paras. 182 –188. 
629 Philippines' first written submission, paras. 189 –194. 
630 Philippines' first written submission, paras. 195 –205. 
631 Philippines' first written submission, paras. 206 –212. 
632 Philippines' first written submission, paras. 213 –215. 
633 Thailand's first written submission, para. 3.56.  
634 Thailand's first written submission, para. 3.68.  
635 Thailand's first written submission, para. 3.83.  
636 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.107.  
637 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.105.  
638 Thailand's first written submission, para. 3.85.  WT/DS371/RW2  
 
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  7.355.   The Panel notes that in the context of the first recourse to Article 21.5, it relied on other 
CVA provisions, inclu ding the Interpretative Notes to Articles 5 and 6, as relevant interpretative 
context when reviewing the BoA's examination of the circumstances of sale under Article 1.2(a). In 
that case, the authority's examination of the circumstances of sale involved a benchmark relating to 
PMTL's "profits and general expenses" ("P&GE"), and the Panel found that the obligations in Article 
6 regarding this same term were "instructive " in informing the legal standard under Article 1.2(a). 
The Panel explained that:  
We reco gnize that the methodology for conducting a computed value calculation 
pursuant to Article 6 differs from an examination of the circumstances of sale pursuant 
to Article 1.2(a), second sentence. Nevertheless, this guidance in the context of a 
computed valu e calculation strongly suggests that similar considerations should be 
taken into account in conducting an examination of the circumstances of sale under 
Article 1.2(a), where such an examination involves a comparison of P&GE rates, given 
that the interpret ative note directly governs a determination of a proxy P&GE rate to be 
used in determining customs value.639 
7.356.   Having said that, the Panel considers it unnecessary to resolve the parties' disagreement 
over the extent to which the detailed rules in Article 6 go verning the computed value method , and 
other CVA provisions referred to by the Philippines,  should inform the examination of the 
circumstances of sale under Article 1.2(a) based on a cost -plus benchmark.  The reason is that both 
parties agree that an author ity's examination of the circumstances of sale under Article 1.2(a) must, 
at minimum, be apt to reveal whether the relationship between the buyer and  seller influenced the 
price. In the circumstances of this case, the nature of the information contained in  the CK -21A form 
and the manner in which the Thai authorities relied on that information clearly did not meet that 
minimum standard , regardless of whether other CVA provisions are taken into account as context.  
7.357.   First, the Panel has found that, as result o f the regulatory constraints mandated by 
Indonesian excise tax law, the  figures in the  CK-21A forms could not represent PM Indonesia's actual 
costs and profits, and necessarily erred on the side of overstating the actual costs and profits of PM 
Indonesia  and other parties involved in the supply chain.640 The Panel accepts that a comparison 
between the transaction value and a properly established cost -plus benchmark can shed light on 
whether the relationship between the buyer an d seller influenced the price, b ecause if  the transaction 
value is lower than such a benchmark, this would suggest the producer is selling to the buyer at a 
price insufficient to cover the costs of production for the goods, plus profits.  However, the validity 
of this means of examining the circumstances of sale depends on the cost -plus benchmark being 
properly established, so that it provides an accurate and reliable reflection of the producer's costs 
and profits.  
7.358.   Second, the Panel found  that in the circumstances of this case, the DSI and Public Prosecutor 
had no basis upon which to assume that the CK-21A information was reliable in the light of PMTL's 
repeated written explanations as to why it was not.641 Thailand acknowledges that the inf ormation 
that its authorities relied upon "was not subsequently verified in terms of its accuracy" .642 The 
original panel has clarified that when the customs authorities receive relevant information from an 
importer, the requirement to conduct an "examinatio n" of the circumstance s of sale requires " an 
active, critical review and consideration of the information before them ".643 As recalled earlier, in 
the first recourse to Article 21.5, the Panel explained that "i f the customs authority failed to take 
into acco unt" relevant information provided by the importer, " the customs authority would 
essentially be failing to conduct an examination of the circumstances of sale that is apt to reveal 
whether the relationship influenced the price ".644 
7.359.   Based on the foregoing, th e Panel finds that i nsofar as the Thai authorities relied on pricing 
and cost information  reported by PM Indonesia to the Indonesian tax authorities  in the CK-21A forms 
                                                
639 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.165.  
640 See Section 7 .2.2 (The nature of the cost information reported in the CK -21A forms).  
641 See Section 7.2.3 (The circumstances surrounding the Thai authorities' reliance on the CK -21A 
forms).  
642 Thailand's first written submission, para. 3.110.  
643 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.171.  
644 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , footnote 592.  
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  for the purpose of determining  whether the transaction value was influenced by the rela tionship 
between the buyer and the seller, this determination was inconsistent with Article 1.2(a), sec ond 
sentence, which entails a consequential violation of Article 1.1.645 
7.3.4.2.2.2   Alternative claim under  Article 1.1  
7.360.   As discussed at length earlier in the context of the Panel 's analysis of the meaning of the 
2002-2003 Charges, the parties have different understandings of what the "actual price " refers to.646 
For the reasons set forth earlier, the Panel consider s that t he circumstances surrounding the 2002 -
2003 Charges suggest that the Philippines has demonstrated prima facie  that the "actual price " in 
the 2002 -2003 Charges refers to the revised customs value that was calculated using the computed 
value methodology under Ar ticles 6 and/or 7 of the CVA, and not, as Thailan d suggests, a 
determination of the "price actually paid or paya ble" for the goods in question. However , the facts 
are not entirely clear on this point, and the Panel makes the following alternative finding u nder 
Article 1.1, based on the arguendo  assumpt ion that the 2002-2003 Charges determine the "price 
actually paid or payable ". 
7.361.   The Panel consider s that an  authority enjoys a margin of di scretion in how it determines the 
"price actually paid or payable " within the meaning of Article 1.1, just as the authority enjoys a 
margin of discretion in how it conducts its "examination of the circumstances of sale " in the context 
of Article 1.2(a). The existence of certain parallels in the minimum requiremen ts for each provision 
does not mean that the methods of enquiry used under Article 1.2(a) are equally appropriate under 
Article 1.1.647 However, t he obligations in Article s 1.1 and 1.2(a), second sentence, are interrelated 
in a way that make s it illogical fo r an investigating authority to be free to disregard the minimum 
requirements of the examination under Article 1.2(a) when seeking to determine the "price actually 
paid or payable" under Article 1.1. In this regard, it bears recalling that Article 1.2(a) a nd Article 1.1 
not only comprise part of the same article, but are interrelated such that a violation of Article 1.2(a) 
necessary implies a violation of Article 1.1. Thus, the Panel considers that the chosen means or 
methodology must be capable of, and sui table for, revealing whether the  declared transa ction price 
corresponds to the "price actually paid or payable". Accordingly, the Panel's reasoning above 
regarding the claim under Article 1.2(a) second sentence applies mutatis mutandis .  
7.362.   Based on the foreg oing, the Panel finds that insofar as the Thai authorities relied on pricing 
and cost information  reported by PM Indonesia to the Indonesian tax authorities  in the CK-21A forms 
for the purpose of determining  the "price actually paid or payable" , this was i nconsistent with 
Article  1.1 of the CVA.  
7.3.4.2.3   Claims under Article 6.1 and/or Article 7.1 
7.3.4.2.3.1   Claim under Article 6.1  
7.363.   The Panel understands Thailand's position to be that any revised customs value determined 
by the Thai authorities was determined on the basis of the reasonable flexibilities in Article 7, and 
not on the basis of the detailed rules set forth in Article 6. T hailand appears to implicitly acknowledge 
that this determination would not satisfy the detailed requirements of Article 6, if that were the 
applicable provision (which, in its view, it is not).648  
7.364.   The Panel notes that Article 6 and its related Interpretati ve Notes establish a number of 
detailed rules regarding the use of computed values, which potentially raise a number of 
interpretative issues. These issues include the extent to which the authorities in the importing 
country can obtain a producer's cost in formation from third parties, rather than directly from the 
producer itself. In this connection, Paragraph 1 of the Interpretative Note to Article 6 states that the 
                                                
645 Panel Report, Thailand – Cigarettes (Philippines) (Article 21.5 – Philippines) , para. 7.103 (stating 
that "[t]here is no disagreement between the parties that if the BoA's examination of the circumstances of sale 
was not in accordance with the substantive requirements contained in the second sentence of Article 1.2(a), 
then it would automatically entail a cons equential violation of Article 1.1. In accordance with the findings of the 
original panel, we proceed on that basis.")  
646 See Section 7.3.3.3.3 (The meaning of the Charges).  
647 See Philippines' response to Panel question No. 142; the European Union's respons e to Panel 
question No. 15 to third parties.  
648 Thailand's response to Panel question No. 156.  WT/DS371/RW2  
 
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  computed value method will "generally be limited to those cases where … the producer is pre pared 
to supply to the authorities of the country of importation the necessary costings", and Paragraph 2 
provides that the "cost or value" is to be determined on the basis of information relating to the 
production the goods being valued "supplied by or on  behalf of the producer". However, Paragraph 
6 of the Interpretative Note contemplates that there could be cases in which "information other than 
that supplied by or on behalf of the producer is used"; and the wording of Paragraph 6 further 
envisages that,  in such cases, the confidentiality provisions of Article 10 may prevail over the 
importer's right to be informed of the source, data used and related calculations.  
7.365.   While recognizing the importance of these issues , the Panel conside rs it unnecessary to 
engage in a comprehensive interpretation of the requirements of Article 6 in the circumstances of 
this case. The reason is that both parties seem to agree that an authority's examination of the 
circumstances of sale under Article 1.2(a) must, at minimum, be based on the producer's actual 
costs, and that when applying Article 6, the authority in the importing country is under an obligation 
to verify the accuracy of those costs. In the  circumstances of this case, the nature of t he CK -21A 
information and the Tha i authorities' examination of that information clearly did not meet that 
minimum standard, regardless of whether other detailed requirements of Article 6 were complied 
with.  
7.366.   First, the Panel has found that, as result of the regulatory constraints mandated  by 
Indonesian excise tax law, the CK -21A forms could not represent PM Indonesia's actual costs and 
profits, and necessarily erred on the side of overstating the actual costs and profits of PM Indonesia  
and other parties involved in the supply chain.649 There may well be circumstances in which the 
information before an authority justifies the use of estimated costs650, or in which judgement must 
be exercised in the context of allocating costs across different product lines.651 However, t he Panel 
does not understa nd Thailand to argue that the "costs" relied upon under Article 6 for the purpose 
of determining a revised customs value could include cost figures that are known to overstate the 
actual costs of the producer. The Panel considers it abundantly clear form t he text of Article 6 and 
the wider context of the CVA that the " [t]he object [of Article 6] is to find the actual figures  relating 
to the production of the imported goods being valued ".652  
7.367.   Second, the Panel found that in the circumstances of this case, the DSI and Public Prosecutor 
had no basis upon which to assume that the CK-21A information was reliable in the light of PMTL's 
repeated written explanations as to why it was not.653 The Panel u nderstands Thailand to accept 
that, when applying Article 6, the authority in the importing country is under an obligation to verify 
the accuracy of those costs. This understanding stems from Thailand's argument that  "[t]he specific 
flexibility is that the  Public Prosecutor relied on information that, although it was provided by [PM 
Indonesia] to Indonesian authorities, was not subsequently verified in terms of its accuracy ".654 The 
logical implication of Thailand's argument is that subsequent verification in  terms of the accuracy of 
the information would have been required pursuant to Article 6.655  
                                                
649 See Section 7.2.2 (The nature of the cost information reported in the CK -21A forms).  
650 According to Sherman and Glashoff, "[i]n some circumstances, so -called 's tandard costs' estimated 
in advance of actual production may be the most appropriate or even the only available basis for use in 
customs valuation, as they often are in making commercial pricing decisions." ( Saul L. Sherman and Hinrich 
Glashoff, Customs Va luation: Commentary on the GATT Customs Valuation Code  (ICC Publishing S.A./Kluwer 
Law and Taxation Publishers, 1988) , p. 228.)  
651 The Appellate Body has addressed the meaning of "costs associated with the production and sale of 
the product under considerat ion" in the first sentence of Article 2.2.1.1 of the Anti -Dumping Agreement. The 
Appellate Body found that these treaty terms refer to costs incurred by the investigated exporter or producer 
that correspond to or reproduce the costs "that have a genuine re lationship" with the production and sale of 
the specific product under consideration. (Appellate Body Report, EU – Biodiesel , paras. 6.22 and 6.30.)  
652 Saul L. Sherman and Hinrich Glashoff, Customs Valuation: Commentary on the GATT Customs 
Valuation Code  (ICC Publishing S.A./Kluwer Law and Taxation Publishers, 1988) , p. 228.  
653 See Section 7.2.3 (The circumstances surrounding the Thai authorities' reliance on the CK -21A 
forms).   
654 Thailand's first written submission, para. 3.110.  
655 The Panel notes that Thai land's position is not entirely clear. The Panel asked Thailand whether its 
argument under Article 7 meant that it "accepts that, insofar as the Public Prosecutor determined a revised 
customs value (i.e. assuming arguendo  that there was a determination of a revised customs value at all, as 
opposed to a determination only of "the price actually paid or payable"), it was determined in a manner 
inconsistent with Article 6 of the CVA". Thailand responded that because the valuation was made under 
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  7.368.   Based on the foregoing, the Panel finds that insofar as the Thai authorities relied on pricing 
and cost information  reported by PM Indonesia to the Indonesian tax a uthorities  in the CK-21A forms 
for the purpose of determining  a revised customs value using the computed value method under 
Article 6, this was inconsistent with Article 6 of the CVA.  
7.3.4.2.3.2   Alternative claim under Article 7.1  
7.369.   Thailand maintains that the detailed rules in  Article 6 are inapplicable to any  determination 
of the rev ised customs value in this case , because  any such  determination applied the computed 
value method with "a reasonable flexibility " as permitted by Article 7.  
7.370.   The Panel accepts that there could be cases in which a customs authority determines a 
revised customs value on the basis of a computed value method that deviates from the strict 
requirements of Article 6. The Panel is mindful of Article 7.2(d), which provides that no customs 
value shall be determined on the basis of the cost of production "other than computed values which 
have been determined for identical or similar goods in accordance with the provisions of Article 6". 
However, the Panel does not read this language to mean that  no deviation from the strict rules of 
Article 6 is ever permissible; rather, A rticle 7.2(d) appears to envisage that in appropriate cases the 
rules of Article 6 may be applied with reasonable flexibility, but clarifies that any computed values 
must noneth eless relate either to identical goods, as defined in Article 15.2(a), or to similar goods, 
as defined in Article 15.2(b).  
7.371.   While recognizing that there could be cases in which a customs authority uses Article 7 to 
determine a revised customs value on the basis of a computed value method that deviates from the 
strict requirements of Article 6, the Panel agrees with the Philippines that it is unnecessary to decide 
"on the precise scope or extent of the flexibilities that are available " to a customs administr ation, 
under Article 7 of the CVA, in calculating a computed value.656 The reason is that any determination 
made pursuant to Article 7 must, at minimum, use "reasonable means consistent with the principles 
and general provisions of this Agreement", and canno t be determined on the basis of "arbitrary or 
fictitious values". In the circumstances of this case, the nature of the information contained in the 
CK-21A form s and the manner in which the Thai authorities relied on that information clearly did not 
meet these minimum standard s. Secondly, and contrary to Thailand's argument, the reasonable 
flexibilities of Article 7.1 do not extend to exempting an authority from engaging in proper 
consultation with the importer and/or allowing it to rely on information witho ut verifying its accuracy.  
7.372.   First, t he Panel has found that  the nature of the information contained in the CK -21A form s 
was such  that the Thai authorities' chosen means or methodology was in capable of, and unsuitable 
for, revealing whether the relationship between PMTL and PM Indonesia influenced the price , or 
whether the declared trans action price corresponds to the price actually paid or payable. The Panel 
considers that, a fortiori , reliance on such information to determine a revised customs value for 
PMTL's imported cigarettes cannot be  a "reasonable means consistent with the principles and general 
provisions" of the CVA. Furthermore, the Panel considers that its finding that the CK -21A forms could 
not represent PM Indonesia's actual costs an d profits, and necessarily erred on the side of overstating 
the actual costs and profits of PM Indonesia  and other parties involved in the supply chain, is 
tantamount to characterizing the figures relied upon by the Thai authorities as "arbitrary or fictit ious" 
values in the sense of Article 7.2(g) of the CVA.  
7.373.   Second, Thailand's argumentation under Article 7.1 is that "[t]he specific flexibility is that 
the Public Prosecutor relied on information that, although it was provided by [PM Indonesia] to 
Indonesi an authorities, was not subsequently verified in terms of its accuracy".657 The Panel 
understands Thailand to be arguing that the process of consultation discussed at length by the 
original panel and the Panel in the first recourse to Article 21.5, which is normally required in the 
context of applying Article 6, may be dispensed with in certain circumstances in the context of using 
"reasonable flexibility" under Article 7. However, insofar as this is what Thailand is arguing, it 
appears to contradict  the find ings of the original  panel , which suggested  that this consultative 
                                                
Article  7.1, th is meant that the valuation decision must only be assessed under Article 7.1 and would not mean 
that it was inconsistent with Article 6. (Thailand's response to Panel question No. 156, para. 8.1.)  
656 Philippines' response to Panel question No. 170, para. 32 .  
657 Thailand's first written submission, para. 3.110.  WT/DS371/RW2  
 
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  process is part and parcel of "using reasonable means consistent with the principles and general 
provisions of this Agreement". Specifically, the panel stated that:  
Although the first sente nce of paragraph 2 refers to "value under the provisions of Article 
2 or 3", we consider that the spirit of the Customs Valuation Agreement envisaged under 
this paragraph, namely the determination of customs value through a process of 
consultation between the customs administration and importer , equally applies to other 
valuation methods. The phrase "using reasonable means consistent with the principles 
and general provisions of this Agreement" in Article 7.1 also supports this view. As the 
Philippines subm its, while the importer is the party that typically possesses relevant 
information for a deductive calculation, it is the customs authority that knows the 
specific information necessary to accept the requested deductions. Viewed in this light, 
it is diffic ult to conceive that the drafters of the Agreement would have intended a 
process of consultation between the customs administration and importer to be limited 
solely to the valuation process under Article 2 or 3.658 
7.374.   The Panel in the first recourse to Article  21.5 agreed, and proceeded on the understanding 
that "the obligation to conduct consultations is integral to the manner in which the customs authority 
applies the deductive value method".659 
7.375.   Based on the foregoing, the Panel finds that insofar as the Thai a uthorities relied on pricing 
and cost information  reported by PM Indonesia to the Indonesian tax authorities  in the CK-21A forms 
for the purpose of determining  a revised customs value using the reasonable flexibilities under 
Article  7, this was inconsistent with Article 7 of the CVA.  
7.3.4.3   Conclusion  
7.376.   In sum, the Panel finds that it was improper for the DSI and the Public Prosecutor  to rely on 
pricing and cost information  reported by PM Indonesia to the Indonesian tax authorities  in the CK-
21A forms for purposes of determining the customs value of PMTL 's imports into Thailand, regardless 
of whether it was relied upon  for the purpose of determining: (1) whether the transaction value was 
influenced by the relationship between the buyer and the s eller pursuant to Article 1.2(a), sec ond 
sentence, of the CVA;  or (2) the "price actually paid or payable" within the meaning of Article 1.1 of 
the CVA; and/or (3) a revised customs value based on Article  6 of the CVA; or (4) a revised customs 
value based on Article 7  of the CVA. The Panel finds that by doing so, the 2002 -2003 Charges reflect 
a customs valuation determination that is inconsistent with Article 1.1 and Article 1.2(a), second 
sentence, insofar as it is a determination that the price actually p aid or payable was influenced by 
the relationship between PMTL and PM Indonesia; with the substantive obligations in Article 1.1  
insofar as it is a determination of "the price actually paid or payable"; with Article 6, insofar as it is 
a determination of a revised customs value based on the computed value method; and/or with Article 
7, insofar as it is a determination of a revised customs value on the basis of the reasonable 
flexibilities provided for in that provision.   
7.377.   In the absence of any contemporaneous explanation from the Thai authorities, it is 
impossible to say with any certainty which of these determinations was made. However, it ultimately 
makes no difference to the Panel's assessment . Regardless of which of th ese types of alternative 
determinations the "actual price" is supposed to represent, the Panel reaches the same conclusion  
of WT O-inconsistency, for essentially the same reasons . Therefore, th e Panel considers it 
unnecessary to rule on which of these alter native determinations the "actual price" represents  in the 
context of the 2002 -2003 Charges.660  
                                                
658 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.327. (emphasis original)  
659 Panel Report, Thailand – Cigarettes (Philippines) (Article 21.5 – Philippines) , para. 7.3 37. 
660 The Panel followed a similar course in the first recourse to Article 21.5, when it found that the 
2003-2006 Charges reflected a revised customs value that was inconsistent with Articles 2 and/or 3 of the 
CVA. Although that revised customs value could only  be based on one of these provisions, the Panel considered 
it unnecessary to rule on whether the Public Prosecutor used the method in Article 2, or instead Article 3. Thus, 
the Panel made alternative findings. (Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – 
Philippines) , paras. 7.728 and 7.731.)  
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  7.3.5   Claim regarding sequential application of valuation methods  
7.3.5.1   Introduction  
7.378.   As the Panel observed in the first recourse to Article 21.5, " the CVA elaborates on the 
rudimentary provisions of Article VII by establishing a comprehensive system for customs valuation, 
comprising a series of multiple different steps and methods subject to detailed rules governing their 
sequential application ".661 One of the fundamental and i ntegral rules of this system is the obligation 
to respect the sequential order of application of the methods in Articles 1 through 7.  
7.379.   In the first recourse to Article 21.5, the Panel found that the 2003 -2006 Charges rejected 
PMTL's transaction values unde r Articles 1.1 and 1.2(a), and then determined a revised value on the 
basis of the Articles 2 and/or 3 of the CVA. While the Panel found this customs valuation 
determination to be flawed and rest on an invalid basis, it appeared to follow the sequential 
application of customs valuation methods. The Panel was not presented with any claim or issue 
regarding the sequential application of customs valuation methods in connection with either of the 
measures at issue, i.e. the 2003 -2006 Charges or the November 201 2 BoA Ruling.662 
7.380.   In this second recourse to Article 21.5, the Philippines claims that the 2002 -2003 Charges 
reject PMTL's tran saction values under Articles 1.1 and 1.2(a), and determine a revised value on the 
basis of Article s 6 and/or 7 of the CVA. In addit ion to its claims of violations under these provisions, 
which the Panel has already considered and upheld, the Philippines claims that the Thai authorities 
did not respect the sequential application of customs valuation methods by jumping directly to the 
computed value method under Article 6 without first seeking to use th e valuation methods in 
Articles  2, 3 or 5.663 
7.381.   Thailand accepts that the customs valuation methods in Articles 1 to 7 must be applied 
sequentially, but submits that the present case involves special circumstances in which none of the 
prior alternative methods in Articles 2, 3 or 5 could be used to dete rmine the customs value of 
PMTL's imports.664 
7.3.5.2   Main arguments of the parties  
7.382.   According to the Philippines, the Public Prosecutor "failed to provide any explanation for 
jumping directly to a computed value under Article 6, and not using the methods in Article s 2, 3 and 
5".665 The Philippines recalls that, according to the panel findings in the original proceeding and the 
first recourse to Article 21.5, where a customs administration has not provided a reasoned and 
adequate explanation to support its determinatio n, "the panel has no option  but to find that the 
[customs administration] has not performed the analysis correctly ".666 In response to Thailand's 
assertion that none of the prior methods could be used, the Philippines submits that Thailand 
engages in "a n imp roper and unsubstantiated ex post justification of the Public Prosecutor 's 
actions ".667 It submits that Thailand has been unable to substantiate  its alleged justification  by 
reference to documents from the record of the customs  valuation determination, and t hat the ex 
post nature of its alleged justification is exemplified by Thailand's reliance on the findings of the 
                                                
661 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.752.  
662 With regard to the BoA Ruling, the Panel noted that while "[u]nder Article 4 of the CVA, c ustoms 
value may only be determined under the provisions of Article 5 if the customs value cannot be determined 
under the provisions of Articles 1, 2 or 3", the Philippines did "not raise any issue or claim with respect to the 
fact that, having rejected th e transaction value under Article 1.2(a) of the CVA, the BoA proceeded to 
determine the customs value on the basis of the methodology set forth in Article 5, as opposed to determining 
an alternative customs value on the basis of Article 2 or Article 3." (P anel Report, Thailand – Cigarettes 
(Philippines)  (Article 21.5 – Philippines) , para. 7.75 and footnote 254.)  
663 Philippines' first written submission, paras. 474 -489; second written submission, paras. 333 -336. 
664 Thailand's first written submission, paras. 3.101 -3.103; second written submission, paras. 3.74 -
3.77. 
665 Philippines' first written submission, para. 482.  
666 Philippines' first written submission, para. 483 (referring to Panel Report, Thailand – Cigarettes 
(Philippines)  (Article 21.5 – Philippines) , para. 7.117, citing Appellate Body Report, US – Steel Safeguards , 
para. 303 (emphasis added), and Panel Report, Thailand – Cigarettes (Philippines) , footnote 499.) See also 
Philippines' responses to Panel question Nos. 152 -153. 
667 Philippines' second written  submission, para. 333.  
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  Panel in the first recourse to Article 21.5; the Philippines observes that t he Public Prosecutor could 
not have relied on these findings  in bri nging the Charges , because they came out nearly one year 
after the 2002-2003 Charges were issued.668 
7.383.   In addition, the Philippines notes that PMTL never requested, under Article 4, the reversal of 
the sequential ordering as between Article 5 (deductive value)  and Article 6 (computed value), to 
the contrary, and that in a letter to the Public Prosecutor on 28 October 2016, PMTL insisted that 
the deductive valuation method should precede  the computed valuation method.669 Furthermore, 
the Philippines states that the Public Prosecutor's decision to use a computed value under Article 6 
"stands in stark contrast" to Thailand's historic approach to valuation of PMTL's imported goods, 
because "for the past 15 yea rs, the Customs  Department and its BoA have rejected the transaction 
value from time to time and,  after consultation with the importer, have uniformly  applied the 
deductive valuation  methodology under Article 5  of the CVA".670  
7.384.   Thailand denies that the Public Prosecutor ac ted inconsistently with Articles 2 to 6, on the 
basis that the "present case involves special circumstances, in which none of the alternative methods 
in Articles 2 -5 could be used to determine a customs value ".671 Thailand elaborates that because 
PMTL is the  only major cigarette importer in Thailand, this places the authorities in "the unusual 
situation of not having sufficient previously determined customs values for identical or similar 
goods ", and the determination that the declared value is insufficient t o ensure the recovery of costs 
plus a reasonable profit means that the deductive method under Article 5 "is not appropriate either 
because it would simply result in determining the same CIF price that was previously determined to 
have been affected by the relationship between the exporter and the importer ".672  
7.385.   In this regard, Thailand submits that the Panel 's findings in the first recourse to Article 21.5 
made clear that "it is virtually impossible to identify an appropriate amount for profit and general 
expenses in the Thai market other than PMTL 's own ratio "673 and "the extensive debate before the 
first compliance panel illustrates the many difficulties in establishing an appropriate P&GE ratio for 
PMTL's imports ".674 Thailand elaborates that "[t]he issues concerning the lack of other importers of 
cigarettes, the difficulties in establishing a comparison group, and the relative size of PMTL compared 
to other market participants all create substantial difficulties in the deductive value method to  
analyse PMTL ", and that "[i]n the light of these difficulties, it cannot be unreasonable to move on to 
the next approach ".675  
7.3.5.3   Analysis by the Panel  
7.3.5.3.1   General considerations  
7.386.   The first  section of the General Note to the Interpretative Notes to the CVA , entitl ed 
"Sequential Application of Valuation Methods ", explains that these six methods are to be applied in 
sequence. Paragraph 1 of the general Interpretative Note on 'Sequential Application of Valu ation 
Methods' states that "[t]he methods of valuation are set  out in a seq uential order of application". 
Paragraph 2 adds that, when goods cannot be valued using the transaction value, the value "is to 
be determined by proceeding sequentially through the succeeding Articles to the first such Article 
under which the customs value can be determined ".  
7.387.   The sequential ordering of valuation methods is also expressly reflected in the text of 
Articles  2, 3, 4, and 7 of the CVA. The introductory clause of each provision sets forth this 
requirement. Article 2 opens with the w ords "[i]f the customs value of the imported goods cannot 
be determined under the provisions of Article 1", and continues by setting forth an alternative 
valuation method that may be applied in the event the condition in the first clause is met. Article 3 
has the same introductory clause, ending with a reference to "Articles 1 and 2", and then sets forth 
the next valuation method. Article 4 of the CVA provides that the customs value may only be 
                                                
668 Philippines' second written submission, para. 336.  
669 Philippines' first written submission, paras. 484 -486.  
670 Philippines' first written submission, para. 487.  
671 Thailand's first written submission, para. 3.102.  
672 Thailand's fi rst written submission, para. 3.102.  
673 Thailand's first written submission, para. 3.102.  
674 Thailand's second written submission, para. 3.77.  
675 Thailand's second written submission, para. 3.77.  WT/DS371/RW2  
 
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  determined under the provisions of Article 5 if the customs val ue "cannot be determined " under the 
provisions of Articles 1, 2 or 3, and that unless the importer requests otherwise, the method in 
Article 6 can  be applied only if the customs value "cannot be determined" under Article 5. The 
opening words of Article 7.1  provide that recourse to the flexibilities of that provision may be used 
"[i]f the customs value of the imported goods cannot be determined under the provisions of Articles 
1 through 6". Furthermore, although there is no express provision that the sequent ial ordering of 
the methods in Articles 1 to 6 should be followed again in the context of having recourse to the 
reasonable flexibilities in Article 7.1, the Technical Committee on Customs Valuation has 
recommended that, where reasonably possible, this seq uence should also be observed in applying 
Article 7.676 
7.388.   The requirement  to adhere to the hierarchical order of the sequential valuation methods is 
a legal obligation, and the failure to comply with that obligation would constitute an independent 
basis for finding a violation of the CVA. As highlighted by the original panel, "[i]f a customs authority 
decides to reject the transaction value, another valuation method must be used by observing the 
sequential order of the methods stipulated in Articles  2, 3, 5, 6 and 7. "677  
7.389.   The fundamental nature of this obligation finds further ref lection through the manner in 
which it informs the application of other CVA provisions, including the nature and the content of the 
explanation that must be provided pursuant to Article 16. When defining the legal standard under 
Article 16 of the CVA, the original panel explained that, similarly to the legal standard under 
Article  1.2(a), third sentence, an explanation under Article 16 "must be sufficient to make clear and 
give details of how the customs value of the importer 's goods was determined, includi ng the basis 
for rejecting the transaction value and other valuation methods that sequentially precede the method 
actually used by the customs authorities. "678 
7.3.5.3.2   Review of the 2002 -2003 Charges  
7.390.   In this case, there is no direct, contemporaneous or documentary e vidence as to whether 
the Thai authorities sought to apply the methods of customs valuation sequentially. Under the 
applicable standard of review, it is not for a panel to decide which of the six recognized customs 
valuation method(s) should have been used  in relation to a particular set of imports.  However, the 
Panel considers that in the circumstances of this case, it can assess whether one or more of the 
customs valuation methods in Articles 2, 3 or 5 of the CVA could have been used to value PMTL's 
impor ts, without engaging in a de novo  review beyond the scope of its mandate.679  
7.391.   The Panel recalls that a given method (e.g. Article 6) can be used only if the customs value 
"cannot be determined" under the preceding method (i.e. Article 5). Thus, it stands to reason that 
the stronger the basis for considering that the customs value of certain imported goods could have 
been determined using the preceding method, then the stronger the basis for considering that an 
                                                
676 Technical Committee on Customs Valuation, Advisory Opinion 12 .2, "Hierarchical Order in Applying 
Article 7", 16 September 1983, reproduced in Saul L. Sherman and Hinrich Glashoff, Customs Valuation: 
Commentary on the GATT Customs Valuation Code  (ICC Publishing S.A./Kluwer Law and Taxation Publishers, 
1988), Annex II I/A. 
677 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.154.  
678 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.240.  
679 In a case involving the review of a customs valuation determination by the domestic authorities, the 
applicable stan dard of review may confine the scope of a panel's analysis to the reasons communicated to the 
importer in the contemporaneous explanation(s) provided to the importer, and/or to the information forming 
part of the record of the determination. In such cases,  if the written determination fails to adequately explain 
how the authority addressed an issue that it was required to consider, that may compel a panel to find that the 
issue in question was not properly examined and refuse to consider an y ex post  rationalizations. (Panel Report, 
Thailand – Cigarettes (Philippines) (Article 21.5 – Philippines) , paras. 7.108 -7.121. See also paragraphs 7.146 -
7.147.) However, neither the MoA nor the 2002 -2003 Charges purport to provide any explanation of the 
customs v aluation methodology that was applied to determine the "actual price". For this reason, the Panel is 
not persuaded by the Philippines' argument that under the applicable standard of review, the absence of any 
direct, contemporaneous or documentary evidence  as to whether the Thai authorities sought to apply the 
methods of customs valuation sequentially in relation to the 2002 -2003 Charges compels the Panel to conclude 
that the Thai authorities failed to comply with the obligation to apply the methods of cust oms valuation 
sequentially.  
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  authority's decision entailed a violation of the obligation to sequentially apply the customs valuation 
methods.  
7.392.   In this case, there is evidence that the Public Prosecutor could have determined the customs 
value of PMTL's imported cigarettes using the deductive method in Article 5. It is an uncontested 
fact that, as asserted by the Philippines, for the past 15 years, on all occasions where the Customs 
Department and its B oA have rejected PMTL's  transaction value s, they have, afte r consultation with 
PMTL, uniformly applied the deductive methodology under Article 5 .680 Indeed, as discussed earlier, 
the customs values of all of the 780 entries subject to the 2002 -2003 Charges had previously been 
determined by Thai Customs or its BoA, which used either the transaction value or the deductive 
method under Article  5 as the basis for valuing the entries at issue.681 It appears that t he Thai 
Customs and its BoA have never before relied on the computed value method under Article 6 to 
determine the value of any of PMTL's imports  of Marlboro  or L&M cigarettes from Indonesia or the 
Philippines .  
7.393.   The Panel notes that Thailand lists "special circumstances" that, in its view, justify the 
conclusion that the customs value of PMTL's imports into Thailand cannot be determined using any 
of the methods in Ar ticles 2, 3 or 5 . Yet without further elaboration,  that conclusion appears to be 
contradicted by 15 years of practice of the Thai Customs Department and the BoA. The 
circumstances now described by Thailand as "special circumstances" would appear to be no d ifferent 
from those prevailing during that period of 15 years.  
7.394.   Furthermore, the Panel considers that it is worth clarifying that in neither the original panel 
proceeding nor the first recourse to Article 21.5 did the Philippines challenge the Customs 
Department's reliance on the use of the deductive method in Article 5 to value its imports; to the 
contrary, the Philippines only challenged the  specific  P&GE rate determined by the BoA for purposes 
of the November 2012 BoA Ruling. The Panel's own findings wer e also confined to this specific 
challenge by the Philippines.682 In the context of reviewing the BoA's determination, the Panel 
addressed certain difficulties that were "specific to an examination that relied on a comparison of 
PMTL's P&GE rates with an ind ustry benchmark group ", and observed that the CVA contemplates 
other methods of customs valuation .683 However, the Panel never stated that this rendered the 
deductive method of customs valuation impossible to apply in the specific circumstances of PMTL's 
imports into Thailand, and stated inter alia that:  
[W]e do not wish to suggest that a customs authority is precluded  from ever conducting 
an examination of the circumstances of sale on the basis of a comparison of P&GE rates 
in situations where the market ci rcumstances do not allow for a perfect apples -to-apples 
comparison between companies being compared. It is conceivable that a particular 
market situation could be such that any  examination of the circumstances of sale will 
suffer from certain limitations. In such a situation, certain shortcomings in the 
methodology may be permissible to the extent that they are controlled for in a 
reasonable and appropriate manner, in order to ensure that the chosen methodology is 
as apt as possible under the circumstances.  As indicated above, shortcomings in the 
comparison may not give rise to an inconsistency with Article 1.2(a) insofar as relevant 
and identifiable differences that would affect the comparison are taken into account. We 
return to this issue in the context o f addressing the manner in which the BoA determined 
the industry benchmark P&GE range, and also the manner in which the BoA compared 
PMTL's P&GE rates with th at benchmark P&GE  range .684 
7.395.   Thus, there is no direct, contemporaneous or documentary evidence indica ting that the Thai 
authorities sought to apply the methods of customs valuation sequentially. As set forth above, there 
are strong indications that the Thai authorities  did not respect the sequential application of customs 
                                                
680 Parties' response to Panel question No. 153.  
681 See above paragraph 7.175.  
682 Philippines' second written submission, paras. 168 -169. The Philippines requested that the Panel 
"clarify this important point in its ruling to avoid  the Customs Department (or any other Thai authority) 
subsequently asserting, in Thai domestic proceedings, that the Panel found that the Customs Department (or 
any other Thai authority) cannot determine a proper P&GE rate for PM Thailand under Article 5".  (Philippines' 
second written submission, para. 170.)  
683 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.154.  
684 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.156. (fn 
omitted)  WT/DS371/RW2  
 
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  valuation methods by jumping dire ctly to computed value under Article 6 without first seeking to 
use the valuation methods in Articles 2, 3 or 5.  Thailand has asserted that there were "special 
circumstances" establishing that PMTL's imports could not be valued under Articles 2, 3 or 5, bu t its 
arguments are not elaborated, and appear to be contradicted by 15 years of practice of the Thai 
Customs Department and the BoA.  
7.396.   The Panel therefore considers that the Philippines has made a prima facie case that the 
Public Prosecutor failed to follo w the sequential ordering of customs valuation methods provided for 
in Articles 2 to 7 of the CVA when determining the revised customs value , and the Panel considers 
that Thailand has not rebutted this prima facie case. To the contrary, the Panel notes tha t, in the 
context of advancing its arguments under Article XX of the GATT 1994, Thailand has also stated that 
"[i]t would be unreasonable to expect the Public Prosecutor to go through all the sequential steps in 
the CVA when the evidence it is confronted w ith leads him to suspect that the importer engaged in 
fraudulent activities ".685 
7.397.   To avoid any misunderstanding, the Panel's finding and reasoning does not imply that the 
Customs Department and the BoA's longstanding practice of applying the deductive method in 
Article  5 to value PMTL's imports of Marlboro  and L&M cigarettes precludes any Thai authority from 
ever having recourse to the computed value method in Article 6, or making use of the reasonable 
flexibilities in Article 7. Notwithstandi ng that the CVA itself recognizes that the use of Article 6 
"present[s] certain difficulties"686 (which partly explain why it falls last in the hierarchy of distinct 
methods), it is not inconceivable that the Thai authorities could provide a reasoned explana tion as 
to why the methods in Articles 2, 3 and 5 (and/or 6 itself) are not applicable to value PMTL's imports. 
In this case, however, that kind of reasoned explanation is missing.  
7.3.5.4   Conclusion  
7.398.   The Panel finds that the Public Prosecutor  acted inconsistently  with the obligation to 
sequentially apply the customs  valuation methods in Articles 2 through 7  when it determin ed the 
revised customs value s of PMTL's imported goods.  
7.3.6   Claim under Article 1.2(a), third sentence, of the CVA  
7.3.6.1   Introduction  
7.399.   In the first rec ourse to Article 21.5, the Panel upheld the Philippines ' argument that the 
procedural obligation in Article 1.2(a), third sentence, applies to the BoA, and its claim that the BoA 
acted inconsistently with this obligation by not communicating its grounds fo r considering that the 
relationship between PMTL and PM Indonesia influenced the price, sufficiently for PMTL to 
meaningfully respond.687 The Philippines did not pursue any similar claim in respect of the 2003 -
2006 Charges.  
7.400.   In this second recourse to Article 21.5, the Philippines claims, in connection with the 2002 -
2003 Charges, that the Public Prosecutor failed to comply with the p rocedural obligation in 
Article  1.2(a), third sentence, to communicate the grounds for doubting  the declared transaction 
value to PMTL and provide it with an opportunity to respond.688 In the Philippines ' view, the Public 
Prosecutor is subject to this obligation, and it was not discharged by the communications between 
the DSI and PMTL regarding the CK -21A forms.  
7.401.   Thailand responds  that the Public Prosecutor is not subject to the procedural obligation in 
Article 1.2(a) third sentenc e.689 In addition, Thailand states  that it is of the view that the DSI 
                                                
685 Thailand's first written submission, para. 3.150. In response to a question from the Panel asking 
whether this meant that Thailand was saying that the Public Prosecutor did not adhere to the sequential 
ordering of customs valuation methods, Thailand sta ted that this statement should not be so construed. 
(Thailand's response to Panel question No. 154.)  
686 CVA, General Introductory Commentary, paragraph 3.  
687 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.278.  
688 Philippines' first written submission, paras. 496 -516; second written submission, paras. 344 -350. 
689 Thailand's first written submission, paras. 3.112 -3.116; second written submission, paras. 3.82 -
3.87; response to Panel question No. 151.  
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  communicated its grounds to PMTL and that PMTL was giv en a reasonable opportunity to respond, 
and that the Public Prosecutor was not required to repeat the process previously conducted by the 
DSI prior to filing the 2002-2003 Charges.690 
7.3.6.2   Main arguments of the parties  
7.402.   As for the applicability of Article 1.2(a), third sentence, to the Public Prosecutor, the 
Philippines recall s the Panel 's finding that the substantive obligations in Articles 1 to 7 of the CVA 
apply to any state organ that engages in customs valuation, and suggests that much of the Panel 's 
reasoning would also extend to the procedural obligation in Article 1.2(a), third sentence.691 It also 
explains that the procedural and substantive obligations in Article 1.2(a) "work together, as an 
integrated package ", such that the Public Prosecutor could not be subject to the substantive 
obligation without being subject to the procedural obligation.692 The Philippines also highlights, as 
context, that under the Ministerial Decision Regarding Cases Where Customs Administrat ions Have 
Reasons to Doubt the Truth or Accuracy of the Declared Value,  when a customs authority assesses 
potentially fraudulent declarations by an importer "it is subject to procedural obligations that are 
very similar to those in Article1.2(a) " which und erscores that the pr ocedural obligations in 
Article  1.2(a) apply in the case of customs valuation assessments with a criminal dimension.693 
7.403.   In its first written submission, t he Philippines accepts that the DSI informed PMTL that it had 
obtained copies of the CK -21A forms and had doubts or suspicions based on these forms to the 
effect that the importer had under -declared the customs values on entries in 2001 -2003.694 
However, the Philippines considers that the DSI did not discharge the obligation in Article 1 .2(a), 
third sentence, because it communicated only limited information, at an early stage of the 
investigation, never communicated to PMTL how it assessed the information received from PMTL 
regarding the CK -21A information, and did not communicate whether  the CK -21A information 
constituted the grounds for the DSI 's allegation in the formal MoA issued on 22 September 2016.695 
Furthermore, the Philippines argues that the Public Prosecutor is an entity distinct from the DSI that 
made its own distinct customs va luation determination, and was thus required to adequately 
communicate its grounds for doubting the declared transaction value prior to issuing the 2002 -2003 
Charges in January 2017.696 
7.404.   In its first and second written submissions, Thailand 's response to the Philippines ' claim 
under Article 1.2(a), third sentence, is confined to arguing that procedural obligations of the CVA 
cannot apply to the Public Prosecutor . Thailand submits that this is so because "there are certain 
features of criminal procedures which prevent the application of the CVA procedural obligations "697, 
and that this "is the case, for example, of the obligation to consult with the importer, which would 
be incompatible with the principle in criminal law that the accused has the right to remain si lent".698 
In response to a question from the Panel, Thailand elaborates on the basis for its view that customs 
fraud investigations do not follow the same timeframes or procedures as customs valuation 
examinations which are carried out at the moment of custo ms clearance.699 Thailand adds that even 
if the procedural and substantive obligations in the CVA are "closely entwined ", that does not erase 
the distinction between them.700 Thailand also considers that the reference to paragraph 1 of the 
                                                
690 Thailand's seco nd written submission, paras. 3.21 –3.39; response to Panel question No. 151, 
paras.  6.13-6.14. 
691 Philippines' first written submission, para. 502.  
692 Philippines' first written submission, paras. 503 -506.  
693 Philippines' first written submission, para. 507.  
694 Philippines' first written submission, paras. 95 -96. In its subsequent submissions, the Philippines 
argued that the evidence casts doubt on its earlier understanding that the DSI had obtained copies of those 
forms, but nonetheless shows that the DSI had  access to certain pricing and cost information submitted by the 
Indonesian producer to the Indonesian government in CK -21A forms. See paragraph 7.100 above.  
695 Philippines' response to Panel question No. 151, paras. 229 -239.  
696 Philippines' response to Pan el question No. 151, paras. 240 -245. 
697 Thailand's first written submission, para. 3.113.  
698 Thailand's first written submission, para. 3.113.  
699 Thailand's response to Panel question No. 150.  
700 Thailand's second written submission, para. 3.85.  
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  Ministerial Decision  is unavailing, because an enquiry into customs fraud is not subject to the CVA 
or the Ministerial Decision.701 
7.405.   In response to a question from the Panel, Thailand states that, even assuming arguendo  
that the procedural obligation in Article 1.2(a), third sen tence, applies  in the context of customs 
fraud, the DSI did communicate its grounds to PMTL and PMTL was given a reasonable opportunity 
to respond702, and the Public Prosecutor and the Customs Department were not required to repeat 
the process previously conducted by the DSI prior to filing the 2002-2003 Charges.703  
7.3.6.3   Analysis by the Panel  
7.3.6.3.1   General considerations  
7.406.   As explained above, Article 1.1 of the CVA prov ides that, in principle, a customs authority 
must use the transaction value of the imported goods as the customs value. Article 1.1(d) read in 
conjunction with Article 1.2(a) clarifies that this applies also in situations in which the buyer and the 
seller are related, unless it is established that the relationship influenced the price. The third and 
fourth sentences of Article 1.2(a) of the CVA state that:  
If, in the light of information provided by the importer or otherwise, the customs 
administration has grounds for considering that the relationship influenced the price, it 
shall communicate its grounds to the importer and the importer shall be given a 
reasonable opportunity to respond. If the importer so requests, the communication of 
the grounds shall be  in writing.  
7.407.   Regarding the requirement to communicate "grounds " to the importer, the original panel 
considered that the term "grounds " means the "reasons for considering ".704 The original panel also 
noted that, where an importer has provided information and  evidence to the customs authority, "the 
grounds for [the customs authority 's] consideration that the relationship between the buyer and the 
seller influenced the price must be linked to that concerned evidence so as to assist the importer in 
understanding  the authority 's consideration ".705 Additionally, the original panel stated that it was 
neither "necessary [n]or useful … to define the exact extent and scope of 'grounds ' to be provided 
under Article  1.2(a) as they may vary depending on the factual circumst ances presented in each 
case."706  
7.408.   However, the original panel explained that:  
[I]n order for the importer to have a reasonable opportunity to respond to the customs 
authorities ' consideration … the importer must not be left to guess the reasons for the 
customs authorities ' consideration. The right of the importer to have "a reasonable 
opportunity to respond " under Article  1.2(a) would lose its meaning unless the importer 
is informed of at least the reason(s) why the customs authority continues to question 
the acceptability of the transaction value despite the evidence and information 
presented or otherwise in the possession of the customs authority until that point.707 
                                                
701 Thailand's  second written submission, paras. 3.21 –3.39; response to Panel question No. 150, 
paras.  6.2-6.3.  
702 Thailand's response to Panel question No. 151, para. 6.13.  
703 Thailand's response to Panel question No. 151, para. 6.14.  
704 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.218. This interpretation is consistent with 
the Spanish and French versions of the CVA, which refer to "razones" and "motifs" respectively. In the Spanish 
version, Article 1.2(a) states that "[s]i, por la información obten ida del importador o de otra fuente, la 
Administración de Aduanas tiene razones para creer que la vinculación ha influido en el precio, comunicará 
esas razones al importador y le dará oportunidad razonable para contestar." In the French version, Article 
1.2(a) states that "Si, compte tenu des renseignements fournis par l'importateur ou obtenus d'autres sources, 
l'administration des douanes a des motifs de considérer que les liens ont influencé le prix, elle communiquera 
ses motifs à l'importateur et lui don nera une possibilité raisonnable de répondre."  
705 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.220.  
706 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.214.  
707 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.214.  
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  7.409.   The original panel highlighted the importance of giving the importer the opportunity to 
respo nd, because "while customs authorities are responsible for providing a 'reasonable opportunity ' 
to the importer to provide information, once given this opportunity, importers are in principle liable 
for supplying the customs authorities with information th at would indicate that the relationship did 
not influence the price. "708 In this respect, the original panel emphasized that, "[t]o the extent that 
Thai Customs was presented with certain evidence, the grounds for its consideration that the 
relationship betw een the buyer and the seller influenced the price must be linked to that concerned 
evidence so as to assist the importer in understanding the authority 's consideration. "709 
7.410.   After recalling these general interpretations, the Panel in the first recourse to Art icle 21.5 
concluded:  
In short, to comply with the third sentence of Article 1.2(a), a customs authority must 
give the importer sufficient information regarding the authority 's grounds for doubting 
the transaction value, such that the importer is able to meaningfully respond to those 
grounds. Additionally, the customs authority must give the importer an opportunity to 
respond.710  
7.411.   In the context of addressing the Philippines ' claim under Article 1.2(a), third sentence, 
regarding the November 2012 BoA Ruling,  the Panel linked this procedural obligation to the general 
principle of due process of law, to the wider objectives of the CVA, and  to closely related CVA 
obligations comprising relevant context:  
[T]he obligation s in Article 1.2(a), third sentence, to co mmunicate the grounds to an 
importer and provide a reasonable opportunity to respond are consistent with due 
process. Indeed, it could be contrary to the CVA 's object and purpose of providing for a 
"fair, uniform and neutral " system of valuation if a custo ms authority 's examination of 
the circumstances of sale, whether initially or at the point of appeal, provided no 
opportunity for the importer to provide relevant information to the customs authority in 
order to inform its determination. We understand that  Thailand may even agree on this 
point, given its insistence that PMTL was given "repeated full opportunities to provide 
information " to the BoA. In our view, as a consequence of the consultative nature of an 
examination of the circumstances of sale under Article 1.2(a), second sentence, the 
obligations under the second and third sentences of Article 1.2(a) are necessarily 
related. Indeed, certain of our findings above emphasize the importance of the customs 
authority adequately consulting with the importer , in assessing whether the customs 
authority acted inconsistently with Article 1.2(a), second sentence.  
Furthermore, we consider that the nature of the obligations in Article 1.2(a) third 
sentence serve s the same objective as Article 16 of the CVA, which, as the original panel 
stated, is to "enable[] importers and foreign governments to effectively exercise their 
respective rights under Articles 11 and 19 of the Customs Valuation Agreement when 
requesting domestic reviewing tribunals, courts and WTO panels to determine whether 
the manner or means of valuation by a customs authority was consistent with the 
importing Member 's WTO obligations ".711 
7.412.   The parties do not contest the legal standard described above. The parties disagree on two 
main issues. First, whethe r the obligations contained in Article 1.2(a), third sentence, apply in the 
context of investigations into customs fraud, and to customs valuation determinations made by 
entities such as the DSI and the Public Prosecutor . Second, in the event such obligati ons do apply 
to those entities , whether the DSI and/or Public Prosecutor satisfied those obligations.   
                                                
708 Panel Rep ort, Thailand – Cigarettes (Philippines) , para. 7.170 (referring to Case Study 10.1 on the 
application of Article 1.2 of the Customs Valuation Agreement by the WTO Technical Committee on Customs 
Valuation).  
709 Panel Report, Thailand – Cigarettes (Philippine s), para. 7.220.  
710 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.254.  
711 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.259 -7.260. 
(fn omitted)  
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  7.413.   The Panel notes that Thailand has not elaborated at all on the second point, or responded to 
any of the arguments presented by the Philippines as to why the obligation in Article 1.2(a) was not 
discharged by the communications between the DSI and PMTL regarding the CK -21A forms. 
However, for the reasons set forth in analogous circumstances in the c ontext of a claim under 
Article  16 in the first recourse to  Article 21.5, the Panel must independent ly and objectively address 
the evidence before it to determine whether the Philippines has met its burden of proof.712 
7.3.6.3.2   The applicability of Article 1.2(a), third sentence, to the Public Prosecutor  
7.414.   The Panel recalls th at in the first recourse to Article 21.5, it was unnecessary to rule on 
whether the procedural obligation in Article 1.2(a), third sentence, applies to the Public Prosecutor, 
because the Philippines elected not to pursue any claim under Article 1.2(a), third sentence, in 
relation to the 2003-2006 Charges. As a consequence, the Panel stated that:  
This means that the Panel need not, and indeed may not, examine the consistency of 
the Charges with the procedural obligat ion in Article 1.2(a), third sentence, of the CVA. 
As a consequence, it is not necessary for us to rule on whether, and if so how, the 
obligation in Article 1.2(a), third sentence, would apply in the context of criminal 
charges relating to customs valuatio n, or on how that procedural obligation would be 
informed by the terms of the "Decision Regarding Cases where Customs Administrations 
Have Reasons to Doubt the Truth or Accuracy of the Declared Value ". Nor is it necessary 
for us to resolve the question of whether the DSI 's April 2009 Memorandum of Allegation 
could be characterized as a document that "communicates " the "grounds " to the 
importer.713 
7.415.   While the Panel did not rule on this question, elsewhere in its analysis it identified a series 
of different cons iderations that cumulatively led the Panel to conclude that the substantive CVA 
obligations at issue apply to any organ of the state that makes a "customs valuation " 
determination.714 Many  of those considerations, including general principles of state respon sibility, 
would equally support the conclusion that the procedural obligation in Article 1.2(a), third sentence, 
applies to state organs that are not part of the "customs administration " in the narrow sense of the 
term.  Furthermore, the Panel considers tha t the procedural and sub stantive obligations in 
Article  1.2(a) are integrally related to one another, and both are integrally linked to the obligation 
in Article 1.1, such that the Public Prosecutor could not be subject to the general obligation in 
Article  1.1, and to the substantive obligation in Article 1.2(a) second sentence, without also being 
subject to the procedural obligation  in the third sentence of that same provision . Finally , as recalled 
further above, in the context of addressing the Philippine s' claim under Article 1.2(a), third sentence, 
regarding the November 2012 BoA Ruling, the Panel linked this procedural obligation to the general 
principle of due process of law, to the wider objectives of the CVA, and to the int errelated obligation 
in Art icle 1.2(a), second sentence.715 For these rea sons, the Panel considers that the procedural 
obligation in Article 1.2(a), third sentence, applies to any entity making a customs valuation 
determination that is subject to the obligation in Article 1.2(a), second sentence.  
7.416.   The Panel agrees with Thailand that it is  necessary to give careful consideration to the 
practicalities of superimposing CVA procedural obligations onto entities involved in criminal 
investigations into customs fraud . The Panel recalls that in reaching its finding that the BoA is subjec t 
to the procedural obligation in Article 1.2(a), third sentence, the Panel did exactly that: it carefully 
considered whether any practical difficulties would arise from subjecting the BoA to that obligation, 
and expressly reserved judgment on whether and if so how that procedural obligation would apply 
in respect of other appellate tribunals, stating that it s analysis proceeded by "[a]ssuming for the 
sake of argument that the procedures of Article 1.2(a) might not be adaptable or appropriate in the 
context  of some appellate tribunals ".716 The Panel conducted a very similar analysis when assessing 
the applicability of the procedural obligation in Article 16 to an appeals tribunal such as the BoA.717  
                                                
712 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.431 and 
footnote 942.  
713 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.463.  
714 As summarized above, in Section 7.3.3.3.2 (The agency that filed the Charges ). 
715 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.259.  
716 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.261.  
717 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.421.  WT/DS371/RW2  
 
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  7.417.   In the Panel's view, these considerations also pertain to the manner in which the procedural 
obligation may be discharged. In other words, the Panel considers that the procedural obligation in 
Article 1.2(a), third sentence, applies to any entity making a customs valuation determination, but 
that the nature of the agency and the circumstances in which a determination was made could be 
highly germane to the appraisal of whether or not the obligation was discharged. Furthermore, if 
there were circumstances in  which it was impossible for entities that do not form part of the "customs 
administration" in the narrow sense of the term to comply with the p rocedural obligation in 
Article  1.2(a), third sentence, without violating other rules, such as the right to rema in silent, then 
it would apply mutatis mutandis . Here again, there is a degree of balance inherent in the CVA.718 
7.418.   The Panel does not consider it is necessary or advisable to attempt to specify, in the abstract, 
the extent to which the procedural obligations in the CVA, including the one articulated in the third 
sentence of Article 1.2(a), may be discharged in different ways in the context of diverse factual 
configurations. In this regard, the Panel recalls the original panel's view that it is  neither "necessa ry 
[n]or useful … to define the exact extent and scope of 'grounds ' to be provided under Article  1.2(a) 
as they may vary depending on the factual circumstances presented in each case. "719 That 
observation holds true in general, and carries particular force w hen applying CVA procedural 
obligations to entities outside of the narrow definition of a "customs administration".  
7.419.    In the light of the foregoing, the Panel c oncludes that the procedural obligation  in 
Article  1.2(a), third sentence, applies to the Public Prosecutor. However, the Panel considers that 
the nature of the information and the "grounds" to be communicated in the context of a criminal 
investigation may be different from the nature of the information an d the "grounds" to be 
communicated in the context of a typical customs valuation within the institutional framework of a 
"customs administration" in the narrow sense of the term.  
7.3.6.3.3   The communications between the DSI and PMTL  
7.420.   In this proceeding, the Philippi nes claims that the Public Prosecutor acted inconsistently with 
Article 1.2(a), third sentence, by not communicating its grounds to PMTL for considering that the 
relationship between the parties influenced the declared transaction value. As with the other claims 
submitted by the Philippines in relation to the 2002 -2003 Charges, this claim concerns the Thai 
authorities ' reliance on information obtained from CK -21A forms. The Panel has already found that 
the Thai authorities ' reliance on pricing and cost info rmation reported by PM Indonesia in the CK -
21A forms to determine the customs value of PMTL 's cigarettes imported into Thailand violates 
multiple substantive  CVA requirements arising under Article 1.1, Article 1.2(a) second sentence, 
Article 6, and /or Article 7.  In reaching that finding under these provisions, the Panel concluded that, 
inter alia , both the DSI and the Public Prosecutor disregarded the detailed explanations and expert  
statements that PMTL provided ( and then repeatedly reiterated ) as to why t he information reported 
in the CK -21A forms could not be used to determine the customs value  of its imported cigarettes.  
7.421.   To recall, a s described in greater detail earlier720, the record shows that at some point in 
early 2011, the DSI apparently informed PMT L of its suspicions that PMTL had under -declared 
customs values on entries in 2001 -2003 based on CK-21A excise tax forms obtained fr om the 
Government of Indonesia. That led PMTL to provide a detailed response, and also to obtain and 
submit the two expert s tatements that have already been referred to. More specifically:  
                                                
718 The Panel notes that Annex III, paragraph 6 of the CVA provides that Members, "subject to their 
national laws and procedures," have the right to expect the "full cooperation" of importers in enquiries 
"concerning the truth or accuracy" of statements, docu ments, and declarations presented to them for customs 
valuation purposes. If "the right to expect the full cooperation of importers" in such enquiries is "subject to" 
each Member's "national laws and procedures", and those national laws or procedures refle ct the principle that 
the accused has the right to remain silent in the context of criminal procedures, this could adequately address 
any incompatibility that might arise from finding that the procedural obligation in Article 1.2(a) third sentence, 
and/or the corresponding procedural obligation in the Ministerial Decision Regarding Cases Where Customs 
Administrations Have Reasons to Doubt the Truth or Accuracy of the Declared Value,  is applicable to criminal 
procedures.  
719 Panel Report, Thailand – Cigarettes  (Philippines) , para. 7.214.  
720 See Section 7.2.3 (The circumstances surrounding the Thai authorities' reliance on the CK -21A 
forms).  
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  a. On 4 February 2011, PMTL sent a letter to the DSI in which PMTL made a "Request for 
Fair Treatment and Justice ".721 The letter states that it "understands that the DSI has 
formed the view that the retail selling prices set out in the so -called Form CK -21A are 
comparable to PM Thailand 's declared customs values and therefore evidence to show that 
PM Thailand 's import prices declared to Thai Customs are incorrect ".722 
b. On 4 May 2012, counsel for  PMTL sent two witness statements to the DSI to "support the 
facts asserted in the said Request for Fair Treatment and Justice ". 
c. The record before the Panel includes an exchange of letters between PMTL and the DSI 
regarding the CK -21A forms  over a period o f years . In these letters, PMTL repeatedly 
articulates the reasons why the information in the CK -21A forms is not relevant to the 
determination of PMTL 's customs values, and the DSI repeatedly requests that PMTL 
provide it with copies of all of the CK -21A forms.  
d. On 28 October 2016, after the DSI had issue d the MoA and before the Public Prosecutor 
filed the Charges on 26 January 2017, PMTL sent a letter to the Public Prosecutor recalling 
why the information in the CK -21A form s could not be used to determine a customs value 
for its imports into Thailand.  
7.422.   In these circumstances, the Panel considers that the fundamental flaw on the part of the 
DSI and the Public Prosecutor was not so much a failure to communicate and provide PMTL with an 
opportunity to respond t o the grounds for doubting the acceptability of the declared transaction 
value, but rather the Thai authorities ' repeated disregard of the information provided by PMTL after 
the DSI communicated the grounds for doubting the transaction value. In the Panel 's view, this 
shortcoming therefore pertains more to the substantive obligation in Article 1.2(a), second sentence, 
concerning the duty to conduct a proper examination of the circumstances of sale, than it does to 
the procedural obligation in Article 1.2(a) , third sentence.  
7.423.   The Panel has considered the Philippines ' argument that the DSI and Public Prosecutor "did 
not communicate to the importer how it assessed the importer 's information, in particular the two 
expert reports "; and subsequently did not "clearly indicate to the importer how it evaluated the 
information submitted by the importer, including the sufficiency of the information submitted ".723 
Indeed, the evidence shows that  the Thai authorities never communicated to PMTL how they 
assessed the informat ion received from PMTL regarding the CK -21A information, and the Panel also 
considers that they were under a legal obligation to do so, prior to making a customs valuation 
determination, insofar as they considered that information insufficient to address t heir concerns. 
However, the Panel considers that such an obligation arises in the context of the process of 
consultation under Article 1.2(a), second sentence. As the original panel stated, in a passage 
subsequently referred to and relied upon by the Panel  in the first recourse to Article 21.5 in the 
context of its formulation of the legal standard under the second sentence of Article 1.2(a):  
[I]n order to properly examine the circumstances of a given transaction, the customs 
authority must clearly indicate  to the importer how it evaluates the information 
submitted by the importer, including the insufficiency of the information submitted and, 
if necessary and feasible, any further particular type of information that may help them 
assess the validity of the t ransaction value.724 
7.424.   In support of its claim under Article 1.2(a), third sentence, the Philippines observes that the 
DSI did not indicate "whether, and if so how, the DSI had used the CK -21A information to calculate 
an alternative customs value for the imported goods being valued, given that the form dealt with 
goods being sold in Indonesia "725, and further notes that the MoA subsequently issued on 
                                                
721 Request for Fair Treatment and Justice, 4 February 2011 (English translation), (Exhibit PHL -279-B).  
722 Request for Fair Treatment and Justice, 4 February 2011 (English translation), (Exhibit PHL -279-B), 
p. 1.  
723 Philippines' response to Panel question No. 151, paras. 230 -234.  
724 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.164  (referred to in Panel Report, Thailand – 
Cigarettes (Philippines) (Art. 21.5 – Philippines) , at para. 7.106 ).  
725 Philippines' response to Panel question No. 151, para. 220.  
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  22 September 2016 did not state  any grounds in respect of the allegations.726 Here again the Panel 
is sympathet ic to the Philippines ' due process concerns, but considers that this alleged shortcoming 
would be more germane to an assessment of a claim under Article 16 of the CVA. This provision , 
which was discussed at some length in both the first recourse to Article  21.5727 as well as in the 
original proceeding728, establishes the obligation to provide, upon request, an explanation "as to how 
the customs value of the importer 's goods was determined " once the relevant authorities have made 
a customs valuation determinatio n. The Philippines has asserted that PMTL directed such requests 
to both the DSI and the Public Prosecutor, and received no satisfactory response from the DSI and 
no response at all from the Public Prosecutor.729 However, the Philippines has not pursued a cl aim 
under Article 16 with respect to the 2002 -2003 Charges.730 
7.425.   The Panel has also considered the Philippines ' argument that "[t]he DSI investigation did not 
meet the standard in Article 1.2(a) (third sentence) " because "the DSI 's intimation of [its] early 
doubts came too early in the investigation to constitute the DSI 's grounds under Article 1.2(a) "; and 
provided "only limited information ".731 As a general consideration, the Panel considers that it is 
reasonable to expect that the nature of the information and  the "grounds " communicated in the 
context of a criminal investigation may be different from the nature of the information and the 
"grounds " communicated in the context of a typical customs valuation within the institutional 
framework of a "customs adminis tration " in the narrow sense of the term. In this regard, the Panel 
recalls the original panel 's view that it is  neither "necessary [n]or useful … to define the exact extent 
and scope of 'grounds ' to be provided under Article  1.2(a) as they may vary depending on the factual 
circumstances presented in each case. "732 As to the information coming "too early " in the 
investigation, the Panel recalls that t he record before it includes an exchange of letter s between 
PMTL and the DSI regarding the CK -21A forms  spanning a period of years . As to the DSI 
communicating only "limited information ", the Panel considers that regardless of whether the 
information that the DSI communicated to PMTL regarding the CK -21A forms was limited, the record 
establishes that it was sufficient to put PMTL in a position to provide the detailed response that it 
did, including the two expert statements that have already been referred to. Thus, the purpose of 
Article 1.2(a), third sent ence, which is  to "ensure that importers be given a reasonable opportunity 
to provide information that would indicate that the relationship did not influence the price "733, 
appears to have been achieved.  
7.426.   In this connection, the circumstances of this case ar e materially distinguishable in several 
respects from the circumstances that led the Panel to find a violation of Article 1.2(a), third sentence, 
in respect of the November 2012 BoA Ruling in the first recourse to Article 21.5. In respect of the 
BoA, the P anel observed that Thailand had "not submitted any evidence or exhibits to demonstrate 
that the grounds for the BoA 's consideration were communicated to PMTL (for instance, Thailand 
has not submitted as exhibits the letters which, in its view, evidence PMT L's awareness that the BoA 
was conducting a comparison of P&GE rates )"734; in this case, however, there is evidence on the 
record of the repeated exchanges between the DSI and PMTL specifically concerning the CK -21A 
forms. In respect of the BoA  in the first recourse to Article 21.5 , the Panel agreed with the Philippines 
that insofar as letters between the BoA and PMTL showed that PMTL was aware that the BoA 's 
customs valuation determination involved consideration of PMTL 's P&GE rate, they wou ld not have 
made PMTL aware that the BoA was undertaking an examination of the circumstances of sale based 
on a comparison of PMTL 's P&GE rate with the P&GE rates of comparable companies735; in this case, 
                                                
726 Philippines' response to Panel question No. 151, paras. 221 -222. 
727 Panel Report, Thailand – Cigarettes (Philippin es) (Article 21.5 – Philippines) , paras. 7.407 -7.434.  
728 Panel Report,  Thailand – Cigarettes (Philippines) , paras. 7.224 -7.266.  
729 See paragraph 7.187.  
730 The Philippines has pursued a claim under Article 16 in respect of the 1,052 revised NoAs.  
731 Philippine s' response to Panel question No. 151, paras. 209, 230 and 232.  
732 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.214.  
733 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.171.  
734 Panel Report, Thailand – Cigarettes (Philippines)  (Articl e 21.5 – Philippines) , para. 7.275.  
735 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.276, where the 
Panel explained that "the Philippines directly contradicts Thailand's characterization of these letters as evidenc e 
of PMTL's awareness that the BoA was conducting a comparison of P&GE rates. The Philippines explains that, in 
previous appeals from that period, the BoA had tested the transaction values by performing a "deductive value 
calculation", which included in th e methodology a deduction for P&GE. Thus, through the exchange of letters 
discussed by Thailand, the Philippines understood that the BoA intended to use this same method, and not that 
a different test would be conducted based on a comparison of PMTL's P&GE  rate with the P&GE rates of 
comparable companies."  
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  however, the communications show that PMTL was aware  and stated that i t understood , as far back 
as February 2011, that "the DSI has formed the view that the retail selling prices set out in the so -
called Form CK -21A are comparable to PM Thailand 's declared customs values and therefore 
evidence to show that PM Thailand 's import prices declared to Thai Customs are incorrect ".736 In 
respect of the BoA, the Panel found that, taking into account the evidence before it, the BoA did not 
commu nicate its ground s "sufficiently for PMTL to meaningfully respond "737; in this ca se, however, 
the record shows that PMTL was able to provide a detailed response, and to obtain and submit the 
two expert statements, on the unsuitability of relying on the CK -21A forms to determine the customs 
value of its imports.   
7.427.   The Panel is also not p ersuaded by the Philippines ' further argument  that, even if the DSI 's 
investigatio n complied with Article 1.2(a), third sentence , the Public Prosecutor was necessarily 
required to communicate these same grounds again prior to issuing the 2002 -2003 Charges.738 
Beginning with the text of Article 1.2(a), third sentence, the wording of this provision does not 
directly speak to the question of whether "each time  a distinct customs valuation determination is 
made, the grounds must be adequately communicated by the customs administration that is 
responsible for making the determination ".739 While the Panel did not directly rule on this issue in 
the context of the first recourse to Article 21.5, the Panel considered that, when analysing how the 
procedural obligation in Article 1.2(a), third sentence, would apply to a series of two or more 
successive customs valuation determinations by different entities, it would be pertinent to consider 
whether the later determination(s) were based on issues, evidence or grounds that we re distinct 
from those already communicated to the importer in the context of the earlier determination.740 The 
Panel 's analysis appears to be consistent with the approach taken by prior panels in determining 
whether Article 6.9 of the Anti -Dumping Agreement  requires an authority to disclose the "essential 
facts" again prior to making the final determination if it did so prior to making the preliminary 
determination.741 
7.428.   The Panel is not suggesting that either the DSI or the Public Prosecutor considered 
themselves to be subject to the obligation in Article 1.2(a), third sentence, or that they sought to 
communicate their concerns regarding the CK -21A forms to PMTL with a view to providing it with an 
opportunity to respond in the spirit of Articl e 1.2(a), third sentence. The Panel has already found, 
based on the evidence on record, that the DSI and the Public Prosecutor disregarded PMTL 's 
                                                
736 Request for Fair Treatment and Justice, 4 February 2011 (English translation), (Exhibit PHL -279-B), 
p.1. 
737 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.278.  
738 Philippines' response to Panel question No. 152, para. 241.  
739 Philippines' response to Panel question No. 152, para. 241.  
740 In the first recourse to Article 21.5, Thailand accepted that the procedural obligation in Article 1.2(a), 
third sentence, applied i n the context of the initial customs valuation determination made by the Customs 
Department, but argued that it did not apply in the context of an appeal of that determination before the BoA. 
In the context of addressing that issue, the Panel reasoned that  "if the issues and evidence are different  at the 
appellate stage than during the initial determination, then the procedural requirements of Article 1.2(a) may 
take on particular importance". In addition, when explaining the risk of circumvention that woul d exist if 
appellate tribunals such as the BoA were not subject to this procedural obligation, the Panel contemplated a 
scenario in which a customs authority could make an initial rejection of the customs value on WTO -inconsistent 
grounds, while respecting  the requirements of the third sentence, and on appeal the appellate tribunal could 
reject the transaction value " on entirely distinct grounds from the original determination", without consulting 
the importer (i.e. without notifying the importer of its grounds for considering rejection of the transaction 
value, and without giving the importer an opportunity to respond to those grounds). The Panel  expressed the 
view that, in these circumstances, i.e. in which the issues, evidence and grounds involved in successive 
determinations were different, then finding Article 1.2(a), third sentence, to be inapplicable to the later -in-time 
determination would undermine the purpose of this obligation, which is to "ensure that importers be given a 
reasonable opportunity to provide information that would indicate that the relationship did not influence the 
price". (Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.264 -7.265.)  
741 Article 6.9 of the Anti -Dumping Agreement provides that " The authorities shall, before a final 
determination is made, inform all interested parties of the essential facts under consideration which form the 
basis for the decision whether to apply definitive measures.  Such disclosure should take place in sufficient time 
for the parties to defend their interests." It is thus similar to the obligation in Article 1.2(a), third sentence, 
both in terms of what it requires and the general due process objective that it serves. In Guatemala – Cement 
II, the panel found that " disclosure of the 'essential facts' forming the basis of a preliminary determination is 
clearly inadequate in circumstances where the factual basis of the provisional measure is significantly different 
from the factual basis of the definitive measure". (Panel Report, Guatemala – Cement II , para. 8.228 
(emphasis added))  
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  explanations regarding the CK -21A forms. The DSI 's motivation in repeatedly seeking copies of 
CK-21A forms fro m PMTL appears to have just been simply  the desire  to obtain copies of those 
documents, not PMTL 's explanations of the unreliability of the information therein. Notwithstanding, 
and whatever the DSI 's motivations were in requesting that PMTL provide it wit h copies of the CK -
21A forms, those requests served to communicate the DSI 's grounds for doubting the acceptability 
of the declared transaction values, and gave PMTL an opportunity to respond.  
7.429.    Based on the foregoing, having found that Thai authorities we re under an obligation to 
communicate  to and provide PMTL with an opportunity to respond to the grounds for doubting the 
acceptability of the declared transaction value prior to issuing the 2002 -2003 Charges, the Panel 's 
assessment of the evidence on the r ecord leads it to conclude that the DSI sufficiently discharged 
that obligation.  
7.3.6.4   Conclusion  
7.430.   The Panel finds that the Public Prosecutor did not violate the procedural obligation in Article 
1.2(a), third sentence, because prior to the issuance of the 2002 -2003 Charges the DSI had already 
sufficiently communicated its grounds for considering that the relationship between PMTL and PM 
Indonesia influenced the price, and PMTL responded . 
7.3.7   Article XX of the GATT 1994  
7.3.7.1   Introduction  
7.431.   In the first recourse to Article 2 1.5, Thailand argue d that, insofar as the 2003-2006 Charges 
were inconsistent with the provisions o f the CVA, they were justified under Article XX(d) of the GATT 
1994 as measures "necessary to secure compliance with laws or regulations " and also under Article 
XX(a) as  measures "necessary to protect public morals ".742 The Panel found that the general 
exceptions in Article XX of the GATT 1994 are not applicable to the obligations in the CVA, and 
therefore the aspects of the Charges giving ri se to the inconsistency with Thailand 's obligations 
under the CVA could not  be justified under Article s XX(a) or (d) of the GATT 1994 .743  
7.432.   In this second recourse to Article 21.5, Thailand similarly argues that the 2002-2003 Charges 
are justified under Articles XX(a) and XX(d) of the GATT 1994.744 Thailand reiterates its arguments 
on why Article XX of the GATT 1994 applies to violations of the CVA745; maintains that any 
inconsistency with the CVA arising from the 2002 -2003 Charges is "necessary to secure compl iance 
with laws or regulations " under Article XX(d)746, and is also "necessary to protect public morals " 
within the meaning of Article XX(a)747; and also argues, as it did in respect of the 2003 -2006 
Charges, that the 20 02-2003 Charges are applied consistently with the requirements of the chapeau 
of Article XX.748  
7.433.   The Philippines submits that the Charges are not justified under Article XX of the 
GATT  1994.749 The Philippines observes that Thailand 's attempt "to re-litigate this issue " before the 
Panel may relate to Thailand's appeal in the first recourse to Article 21.5 .750 Recalling that the Panel 
addressed the merits of Thailand 's defence under Article XX(d) and XX (a) of the GATT 1994  in the 
first recourse to Art icle 21.5 only in "a limited manner ", the Philippines encourages the Panel "to 
                                                
742 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippi nes), para. 7.732.  
743 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.761.  
744 Thailand's first written submission, paras. 3.117 -3.173; second written submission, paras.  3.88-
3.113; oral statement, paras. 3.31 -3.38. In response to a question from the Panel, Thailand clarified that its 
defence under Articles XX(d) and XX(a) of the GA TT 1994 applies only to the 2002 -2003 Charges. (Thailand's 
response to Panel question No. 163(c), para. 2.13.)  
745 Thailand's first written submission, paras. 3123 -3.139.  
746 Thailand's first written submission, paras. 3.140 -3.152.  
747 Thailand's first written s ubmission, paras. 3.153 -3.164.  
748 Thailand's first written submission, paras. 3.165 -3.173.  
749 Philippines' second written submission, paras. 351 -413. 
750 Philippines' second written submission, para. 352.  
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  address these issues in these second compliance proceedings more fully, in order to assist the 
Appellate Body further in understanding the issues, in the event of an appeal ".751  
7.3.7.2   Main arguments of the parties  
7.434.   As a threshold issue, Thailand disag rees with the finding by the Panel in the first recourse to 
Article 21.5 that Article  XX of the GATT 1994 is not available to justify inconsistencies with the 
CVA.752 Thailand indicates  that it respectfully disagrees with the P anel's analysis , and requests this 
Panel "to consider this issue carefully and to reach a different conclusion ".753 Thailand reiterates its 
arguments that there is a sufficient textual basis for finding that Article XX app lies to the CVA, based 
on the title of , and preamble to , the CVA and the reference to customs enforcement in Article  XX(d); 
Thailand also reiterates its arguments that it would be absurd if Article XX was available to justify 
an inconsistency with Article VII of th e GATT but not the CVA, and that  the CVA must reflect a 
balance between a Member 's obligations and its right to prosecute customs fraud.754  
7.435.   Thailand argues, a s it did in the first recourse to Article 21.5 , that the Charges are 
provisionall y justifi ed under Article XX(d)  because the y are "necessary to secure compliance " with 
Section 27 of the Customs Act.755 Thailand also reiterates its argument that the Charges are designed 
to protect "public morals " within the meaning of Article XX(a) because they "fight smuggling and 
contraband by prosecuting customs fraud ", which as Thailand noted in the first recourse to 
Article  21.5 "represents a real concern for Thailand ".756 With respect to the "necessity " of any 
inconsistencies with the CVA relating to the Charges, Thailand submi ts, in relation to both 
Article  XX(d) and XX(a), that "in order to fulfil the important objec tive of combatting customs fraud, 
the Public Prosecutor had to follow rules that differ from customs valuation rules " regarding issues 
like cooperation with the importer and the sequential application of customs valuation methods . 
Thailand further submits that the Charges are not trade -restrictive.757 
7.436.   Thailand argues that the Charges satisfy the requirements of the chapeau of Article XX of 
the GATT 1994.758 Thailand submits that "just like with respect to the 03 -06 Charges at issue in the 
first compliance proce edings, there is no indication that the 02 -03 Charges are applied in an arbitrary 
or unjustifiable discriminatory manner, or as a disguised restriction on international trade ".759 
7.437.   The Philippines maintains  that Article XX of the GATT 1994 does not apply to j ustify violations 
of the CVA.760 The Philippines submits that there is no sufficient textual basis to make Article XX 
applicable to the CVA.761 The Philippines submits that Thailand 's reiteration of other arguments 
already rejected by the Panel in the first re course to Article 21.5 is also unavailing, including 
Thailand 's argument that the inapplicability of Article XX to the CVA would lead to an absurd result 
as a consequence of the applicability of Article XX to Article VII of the GATT 1994, and Thailand 's 
argument that Article XX must apply to the CVA since this is the only way to establish a "balance " 
between a Members ' obligations and a Members ' right to regulate.762 
7.438.   Regarding Article XX(d), the Philippines submits, as it did in the first recourse to Arti cle 21.5, 
that the  2002-2003 Charges are not "designed " or "necessary " to secure compliance with 
Section  27.763 The Philippines again emphasizes that, in seeking justification under Article XX, 
Thailand must demonstrate why the specific aspect of the measure  that is WTO -inconsistent is 
necessary to secure compliance.764 The Philippines reiterates that Section 27 seeks to enforce 
Section 10bis of the Customs Act, which requires, according to the Philippines, that "the correct 
                                                
751 Philippines' second written submission, para. 353.  
752 Thailand's first written submission, paras. 3.123 -3.139.  
753 Thailand's first written submission, para. 3.121.  
754 Thailand's first written submission, para. 3.123 -3.139.  
755 Thailand's first written submission, paras. 3.140 -3.152.  
756 Thailand's first written s ubmission, para. 3.160.  
757 Thailand's first written submission, paras. 3.149 -3.151, and 3.162 -3.163.  
758 Thailand's first written submission, paras. 3.165 -3.173.  
759 Thailand's first written submission, para. 3.168.  
760 Philippines' second written submission, par as. 354 -366. 
761 Philippines' second written submission, paras. 357 -359. 
762 Philippines' second written submission, paras. 360 -366. 
763 Philippines' second written submission, paras. 376 -392. 
764 Philippines' second written submission, paras. 374 and 398.  
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  amount of the duties owed [be] calculated on the basis of an assessment of the 'price' – that is, the 
customs value  - of the goods ".765 The Philippines insists that "[e]nforcement of the correct amount 
of custom duties owed depends on establishing a correct … customs value "766, and that "[l]ogic ally, 
there can never be a circumstance where an incorrect customs valuation decision is 'necessary ' to 
ensure the collection of the correct amount of customs duties. "767 On the same basis, the Philippines 
submits that "[t]he WTO -inconsistent customs valuati on in the 02 -03 Charges is … incapable  of 
securing compliance with Section 27 "768, and "there is simply no relationship  between, on the one 
hand, the WTO-inconsistent customs valuation  in the 02 -03 Charges and Thailand 's fight against 
smuggling and contraband, on the other ".769 As in the first recourse to Article 21.5, t he Philippines 
submits that the Charges are not "designed " or "necessary " to prot ect public morals under 
Article  XX(a), for the same reasons that they are not justified under Article XX (d).770 
7.439.   Finally, the Philippines submits, as it did in the first recourse to Article 21.5, that the  2002-
2003 Charges constitute a "disguised restriction " on trade, and therefore fail to meet the 
requirements of the chapeau of Article XX.771 The Philippines re iterates that PMTL is the largest 
importer of cigarettes into Thailand, and that the potential fines of USD 2.35 billion threaten "the 
very survival of [PMTL] , and hence the Philippines ' exports of cigarettes to Thailand ".772 The 
Philippines recalls that Th ailand 's Ministry of Finance owns TTM, which enjoys a monopoly over the 
production of cigarettes in Thailand, and "[has] complain[ed] to the Thai authorities regarding the 
erosion of its competitive position  by imports ".773 The Philippines suggests that "[a]n objective 
survey of the repeated actions impugned in the DS371 proceedings, as well as the broader context 
of this dispute, leads inexorably to the view that Thailand has engaged in a consistent pattern of 
disguised restrictions on trade, ever since the Thai market was opened to import competition in 
1991. "774 
7.3.7.3   Analysis by the Panel  
7.440.   Thailand 's defence under Article XX of the GATT 1994 raises two main issues. First, whether 
Article XX is available to justify a violation of the CVA. If so, the second issue is  whether Thailand 
has demonstrated that the aspects of the Charges giving rise to the inconsistency w ith the CVA are 
justified under either Article s XX(d) or XX(a). The Panel addresses these issues in turn.775  
7.3.7.3.1   Applicability of Article XX of the GATT 1994 to the CVA  
7.441.   The Panel recalls that Article XX of the GATT 1994 reads in relevant part:  
General Exceptions  
Subject to the requirement that such measures are not applied in a manner which would 
constitute a means of arbitrary or unjustifiable discriminat ion between countries where 
the same conditions prevail, or a disguised restriction on international trade, nothing in 
this Agreement shall be construed to prevent the adoption or enforcement by any 
contracting party of measures:  
(a) necessary to protect public morals;  
                                                
765 Philippines' second written submission, para. 376. (emphasis original)  
766 Philippines' second written submission, para. 379.  
767 Philippines' second written submission, para. 389.  
768 Philippines' second written submission, para. 379.  
769 Philippines' second w ritten submission, para. 401.  
770 Philippines' second written submission, paras. 401 and 403.  
771 Philippines' second written submission, paras. 405 -413. 
772 Philippines' second written submission, paras. 409 and 412.  
773 Philippines' second written submission, para. 409.  
774 Philippines' second written submission, para. 410.  
775 As noted in the Report in the first recourse to Article 21.5, this order of analysis is  the one that the 
Appellate Body has instructed panels to follow. Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – 
Philippines) , footnote 1597 (referring to Appellate Body Report, China – Publications and Audiovisual Products , 
para. 214).  
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  … 
(d) necessary to secure compliance with laws or regulations which are not inconsistent 
with the provisions of this Agreement, including those relating to customs enforcement, 
the enforcement of monopolies operated under paragraph 4 of Arti cle II and Article 
XVII, the protection of patents, trade marks and copyrights, and the prevention of 
deceptive practices  
7.442.   In the first recourse to Article 21.5, t he Panel concluded that the general exceptions in 
Article XX of the GATT 1994 do not apply to the obligations in the CVA.776 The Panel began its 
analysis of this issue by recalling that the Appellate Body "has articulated and applied a standard 
'analytical approach ' that entails an agreement -by-agreement analysis that starts with the text of 
the cove red agreement in question, and which entails a 'thorough analysis of the relevant provisions ', 
on the understanding that the lack of an express textual reference is not dispositive in and of 
itself".777 The Panel proceeded to sequentially consider Thailand 's arguments regarding the title of 
the CVA778; the preamble of the CVA779; the reference to "customs enforcement " in Article XX(d)780; 
the alleged absurdity  that would result from  Article XX being applicable to violations of Article VII of 
the GATT but not to violations of the CVA781; and the need to strike a balance between the obligations 
assumed under the  CVA and the right to take measures to combat customs fraud.782 For the reasons  
set forth in its Report in the first recourse to Article 21.5, the Panel was not persuaded that Thailand 's 
arguments provided any basis to find that Article XX of the GATT 1994 is applicable to the CVA.  
7.443.   In this second recourse to Article 21.5, Thailand r equests that the Panel re -examine the 
same issue, and reverse its finding that Article XX is not applicable to the CVA. In line with the 
approach explained earlier783, the Panel will confine the scope of such re -examination to any novel 
arguments presented i n the context of this second recourse to Article 21.5.  
7.444.   The Panel's assessment is that Thailand 's submissions  on the applicability of Article XX of 
the GATT 1994 to the CVA mostly  express its disagreement with the reasoning of the Panel in the 
first recour se to Article 21.5 , without  presenting any novel arguments. First, Thailand reiterat es its 
argument that "there may be no direct reference in the CVA, but, as Thailand has explained, the 
CVA is 'closely intertwined ' with the GATT 1994 because it elaborates  rules for the application of the 
provisions of Article VII " as reflected in the preamble .784 Second, Thailand reiterates its arguments 
regarding the significance of the t itle of the CVA and elaborates on why Thailand "respectfully 
disagrees that its argumen ts before the first compliance panel were unduly formalistic or placed 
undue weight on the reference to Article VII in the title of the CVA " and that it may "just as readily 
be argued that it is overly formalistic " to reason as the Panel did .785 Third, Thailand recalls that it 
"also argued that, because of the nature of the relationship between the CVA and Article VII of the 
GATT 1994, it could lead to absurd situations if a Member could justify a violation of Article VII by 
invoking the exceptions in Article  XX, but it could not do so with respect to its obligations under the 
CVA, notwithstanding that the CVA implements the obligations in Article VII "; in this regard, Thailand 
explains why it does not find persuasive force in the Panel 's observation that the CVA contains rules 
that are different from and additional to Article VII, and also recalls the need to read the CVA and 
Article VII holistically, and the title and preamble of the CVA .786 Finally, Thailand recalls the Panel 's 
view that there is an inherent b alance in the CVA between the Member 's obligations and the 
Member 's right to regulate, and that this balance "finds reflection primarily through the relatively 
limited scope of the substantive and procedural obligations contained in the CVA "787, and then 
                                                
776 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.742 -7.757.  
777 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.744 (referring to 
Appellate Body Reports, China – Rare Earths , paras. 5.61 -5.63).  
778 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.748.  
779 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.749.  
780 Panel Report, Thailand – Cigarettes (Philipp ines) (Article 21.5 – Philippines) , para. 7.750.  
781 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.751 -7.753.  
782 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.754 -7.756.  
783 See Section 7.1.2.2 (Reliance on the Report in the Philippines' first recourse to Article 21.5).  
784 Thailand's first written submission, para. 3.124.  
785 Thailand's first written submission, para. 3.125 -3.128.  
786 Thailand's first written submission, paras. 3. 129-3.134 . 
787 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.756.  
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  Thailand reiterates that if the CVA applies to customs fraud "the necessary policy space to conduct 
criminal investigations and prosecutions can be situated only in the exceptions in Article XX ".788 
7.445.   In the absence of any novel arguments that would  warrant a further re -examination of this 
issue, the Panel agrees with the  European Union 's view that "the First Compliance Panel has already 
addressed sufficiently the arguments under Article XX of the GATT 1994, which it rightly considered 
inapplicable t o claims under the CVA ".789 The Panel will confine its discussion to offering the following 
two observations on how the parties ' arguments on a range of issues outside of the cont ext of 
Article  XX of the GATT 1994 in this case reinforce the legal findings an d reasoning on the non -
applicability of Article XX to the CVA already developed in the Panel 's Report in the first recourse to 
Article 21.5.  
7.446.   First, the Panel considers that the parties ' arguments in this case highlight the far -reaching 
consequences of finding that CVA obligations are subject to the general exceptions in Article XX of 
the GATT 1994. Some of the arguments that Thailand has advanced in support of its position on the 
applicability of Article XX of the GATT 1994 to the CVA ar e inextricably linked to the narrow subset 
of measures comprising criminal measures taken to prosecute allegations of customs fraud790, and 
Thailand invokes a defence under Article XX of the GATT 1994 only insofar the Panel finds that the 
2002-2003 Charges (as opposed to the 1,052 revised NoAs) are inconsistent with the substantive 
or procedural obligations of the CVA. However, as a matter of legal principle, if the obligations in the 
CVA are subject to the general exceptions in Article XX of the GATT, then i t would follow that any 
measure that violates any CVA obligation – and not merely a limited subset of penal measures 
related to customs fraud – could in principle be justified under Article XX of the GATT 1994.791 
Therefore, i f the Panel was to accept Thaila nd's argument that Article XX exceptions must apply to 
the CVA in order to allow Members "policy space "792 to deviate from CVA rules when conducting 
criminal investigations into customs fraud, it would see no a priori basis upon which to deny Members 
similar  policy space to deviate from CVA rules in a range of other situations, unrelated to penal 
measures related to customs fraud, in which they encounter other kinds of difficulties in applying 
the rules set forth in Articles 1 through 7 of the CVA.793 
7.447.   This is n ot to suggest that there is no reasonable flexibility under the CVA, and it brings the 
Panel to the second observation as to how the parties ' arguments ou tside of the context of Article  XX 
of the GATT 1994 in this case reinforce the legal findings and reas oning on the non -applicability of 
Article XX to the CVA already developed in the Panel 's Report in the first recourse to Article 21.5. 
Article 7 of the CVA was not at issue in the first recourse to Article 21.5, and that is one reason why 
the Panel did not  specifically discuss it when discussing the "inherent balance " in the CVA.794 
However, the Panel 's earlier discussion of this provision in the context of addressing the parties ' 
arguments relating to Article 7 is germane to the question of whether the gener al exceptions in 
                                                
788 Thailand's first written submission, paras. 3.137.  
789 European Union's third -party submission, para. 21. The Panel notes that none of the third parties 
have identified any novel argument, circumstance or legal development that would suggest a different 
conclusion regarding the applicability of Article XX of the GATT 1994 to the CVA. Japan states that it agrees 
with the conclusion of the first compliance panel that Article XX of the GATT 1994 is not available to justify 
measures that are found to be inconsistent with the CVA, and then reiterates the same argum ents that it 
presented on this point in the first recourse to Article 21.5. (Japan's third -party submission, paras. 3 -8.) 
790 These arguments include, most notably, Thailand's argument that Article XX of the GATT 1994 must 
be available to justify the CVA -inconsistent measures relating to customs enforcement because the text of 
Article XX(d) expressly refers to "customs enforcement", and Thailand's argument regarding the need to strike 
a balance between the obligations assumed under the  CVA and the right to ta ke measures to combat customs 
fraud.  
791 In this regard, the Panel fully agrees with Thailand when it says that "the question of the applicability 
of Article XX to the CVA cannot be resolved by examining a specific measure in a specific dispute. It should be  
considered in the abstract, and not in relation to the particular measure at issue before a panel."  (Thailand's 
first written submission, para. 3.138.)  
792 See e.g. Thailand's first written submission, paras. 3.130, 3.135, 3.136, 3.137, and 3.173.  
793 For ex ample, in the first recourse to Article 21.5, the Panel addressed Thailand's argument that the 
BoA encountered significant difficulties in identifying an appropriate comparison group within the Thai cigarette 
market. (see Panel Report, Thailand – Cigarette s (Philippines)  (Article 21.5 – Philippines) , paras. 7.153 -7.156 
and 6.14 -6.15.) In this proceeding, Thailand submits that, in its view, the Report in the first recourse to 
Article  21.5 "makes clear that it is virtually impossible to identify an appropriat e amount for profit and general 
expenses in the Thai market other than PMTL's own ratio". (Thailand's first written submission, para. 3.102.)  
794 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , paras. 7.756.  
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  Article XX of the GATT 1994 apply to the CVA. Article 7 envisages that there may be circumstances 
in which the value of imported goods cannot be determined under the provisions of Articles 1 through 
6, and already provides for the possibil ity that, in such circumstances, those methods may be applied 
with "a reasonable flexibility ".795 The existence of Article 7 and the reasonable flexibility that it 
provides for further underscore the inherent balance in the CVA.  
7.448.   In addition, the balance ref lected in the specific provisions of Article 7.1 and 7.2 is another 
indication that the drafters would not have intended for another layer o f general exceptions in 
Article  XX of the GATT 1994 to apply. The Panel recalls that Articles 1 through 7 of the CVA  establish 
a comprehensive system for customs valuation, comprising a series of multiple different steps and 
methods subject to detailed rules governing their sequential application.796 Article 7.1 mandates that 
the customs value must be determined using "reasonable means consistent with the general 
provisions of this Agreement and of Article VII of GATT 1994 and on the basis of data available in 
the country of importation ", but Article 7.2 then categorically prohibits any of the seven enumerated 
bases set forth in Article 7.2(a) through (g). Given the logic and structure of these rules, and the 
flexibility already provided for in Article 7.1,  interpolating the general exceptions in Article XX of the 
GATT 1994 into the CVA  would create additional policy spac e for Members to use  one or more of the 
valuation bases that go beyond the "reasonable flexibility " already provided for in Article 7.1, and/or 
which are categorically prohibited by the text of Article 7.2(a) through (g). In the Panel 's view, 
consideration  of the specific terms of Article 7 of the CVA suggests that subjecting the comprehensive 
system for customs valuation established in the CVA to the general exceptions in Article XX of the 
GATT 1994 would diminish Members ' obligations contrary to Articles 3.2 and 19.2 of the DSU.  
7.449.   The Panel concludes that the general  exceptions in Article XX of the GATT 1994 are not 
applicable to the obligations in the CVA.  The Panel hereby incorporate s by reference the reasoning 
in Section 7.3.7.3.1 (Applicability of Article XX of the GATT 1994 to the CVA) of the Panel Report in 
the firs t recourse to Article 21.5.  
7.3.7.3.2   Justification under Article XX(a) or XX(d)  
7.450.   Having found that the general exceptions in Ar ticle XX of the GATT 1994 are not applicable 
to the obligations in the CVA, the Panel in the first recourse to Article 21.5 observed that it was 
therefore unnecessary to examine whether the Charges are justified under Article XX(d) or XX(a) of 
the GATT 199 4.797 The Panel observed that in analogous circumstances, some other panels had 
nonetheless proceeded to make additional findings under Article XX to assist the Appe llate Body in 
the event that the finding on the non -applicability of Article XX  was reversed on appeal .798 However, 
the Panel stated that Thaila nd's defences under Article XX(d ) and XX(a) of the GATT 1994 essentially 
reiterate d its earlier argument that the Charges do not involve any customs valuation determination 
in the first place, and rested on the same factual premises that the Panel had already addressed in 
the context of addressing Thailand 's arguments regarding the applicability of the CVA to the 
Charges.799 Therefore, in the circumstances of the first recourse to Article 21.5, the Panel s aw no 
reason to proceed with any further assessment of the merits of Thailand 's defences under Article XX 
of the GATT 1994 .800 
7.451.   In their requests for review of the Interim Report in the first recourse to Article 21.5, both  
parties requested that the Panel reconsider its approach and make additional findings under 
Article  XX of the GATT 1994. For its part, Thailand disagree d with the Panel 's characterization that 
Thailand 's defences under Article XX( d) and XX (a) "essentially  reiterate " the argument that "the 
Charges do not involve any customs valuation determination in the first place, and that the reference 
to the King Power prices merely serves the purpose of providing a possible benchmark to the Criminal 
Court to impose fi nes in the event of a conviction ", and Thailand request ed the Panel to also address 
what Thailand referred to as "the specific facts and arguments " put forward by Thailand in relation 
to its defences under Article XX.801 The Philippines request ed that the Pa nel supplement the 
                                                
795 See paragraph 2 of the Interpretative Note to Article 7; Panel Report, Thailand – Cigarettes 
(Philippines) , para. 7.285.  
796 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.752.  
797 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.758.  
798 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.758.  
799 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.759.  
800 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 7.760.  
801 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 6.45.  
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  observations contained in paragraph 7.759 of the Report by explicitly stating the necessary 
consequence of its findings in paragraph 7.759  of the Report , which in the Philippines ' view is that 
the "aspect of the Charges that needs to be justified under Article XX " is not the use of King Power 's 
prices as a possible benchmark for the imposition of a fine, but, rather the Charges ' WTO-
inconsistent customs valuation. The Philippines further request ed the Panel to confirm that a WTO -
inconsistent customs valuation could never , by definition,  be "necessary " for the proper enforcement 
of Thailand 's customs laws.802 
7.452.   The Panel was not persuaded that there was any need to revise its characterization of 
Thailand 's argumentation under Article XX, to make the statements requested by the Philippines, or 
to make  any other findings on the merits of Thailand 's defences under Article  XX. In addressing 
these requests for review in relation to the Interim Report in the first recourse to Article 21.5, the 
Panel stated:  
Having carefully considered the parties ' requests,  we are not convinced that there is 
any reason to modify or add to the existing text of paragraph  7.759 . First, while we 
note that Thailand disagrees with our characterization of how its defences under Article 
XX(a) and (d) relate to its arguments regardin g the applicability of the CVA, and while 
we recognize and appreciate that it has made very detailed submissions elaborating its 
defences under Article XX(a) and (d), we are not persuaded that we have incorrectly or 
unfairly characterized its essential arg ument. Second, we understand the Philippines ' 
requests to be motivated by the concern that, if Thailand were to successfully appeal 
the Panel 's findings on the applicability of Article XX to the CVA, there may be 
insufficient findings on the record to comp lete the analysis as to whether the Charges 
are justified under Article XX. As already indicated in paragraphs 7.758  to 7.760 , we 
are not convinced that we need to make any additional factual findings, beyond those 
already made in earlier sections of its R eport, to assist the Appellate Body in completing 
the analysis under Article XX. Likewise, we do not see how the Appellate Body 's ability 
to complete the analysis would turn on the presence or absence, in our Report, of the 
particular statements requested by the Philippines. Accordingly, we have not revised 
paragraph 7.759 .803  
7.453.   As in the first recourse to Article 21.5, the question is whether the Panel should proceed to 
make additional findings on the merits of Thailand 's defences under Article XX of the GATT  1994. In 
this second recourse to Article 21.5, the Philippines encourages the Panel "to address these issues 
… more fully, in order to assist the Appellate Body further in understanding the issues, in  the event 
of an appeal ".804 However, the Philippines doe s not identify any distinguishing circumstances that 
would warrant this Panel adopting a different approach from that used in the first recourse to Article 
21.5 and making arguendo  findings on the merits of Thailand 's defences under Article XX(d) and 
XX(a) .  
7.454.   The Panel sees no distinguishing circumstances. Thailand 's defences under Article XX(d) and 
XX(a) of the GATT 1994 in this second recourse to Article 21.5, concerning the 2002 -2003 Charges, 
reiterate essentially the same arguments that the Panel has already addressed in the context of 
addressing whether the Charges contained insufficient information and the applicabili ty of the CVA, 
and in the context of addressing the  CVA-consist ency of the Charges. Specifically, Thailand reiterates  
its argument that the Charges are a mere allegation of customs fraud and not a final  
determination805, an argument that the Panel has alread y addressed in the context of examining 
Thailand 's argument concerning the "insufficient information " contained in the Charges. Thailand 
reiterates its argument that "it was reasonable to suspect ", and the Public Prosecutor "had 
reasonable grounds to assum e", that PMTL had engaged in customs fraud on the basis of the cost 
                                                
802 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 6.45. 
803 Panel Report, Thailand – Cigarettes (Philippines)  (Article 21.5 – Philippines) , para. 6.45.  
804 Philippines' second written submission, para. 353.  
805 In the context of arguing that the 2002 -2003 Charges are "necessary" under Article XX(d) and 
XX(a), T hailand also provides a reformulation of its earlier "ripeness" argument, stating that the 2002 -2003 
Charges filed by the Public Prosecutor "are a mere allegation of customs fraud", that "the Public Prosecutor's 
duty under Thai law is to present a file to the Court that provides it with sufficient support to commence a 
trial", and that it is "not its duty to make the final determination of whether the accused actually engaged in 
customs fraud or not". (Thailand's first written submission, para. 3.150.)  
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  information reported in form CK -21A806, an argument that the Panel has already thoroughly 
addressed in the context of assessing the CVA-consistency of the Thai authorities ' reliance on the 
cost information reported in the CK-21A forms. Thailand reiterates its argument that the procedural 
obligations in Article 1.2(a), third sentence, of the CVA cannot be applied in the context of criminal 
investigations807, an argument that it is not necessary to consider  in the context of Article XX because 
the Panel has found that the DSI discharged any obligation arising under that provision in res pect 
of the 2002 -2003 Charges.  In sum, the Panel considers that it need not make any additional factual 
findings to enable the Appellate Body to complete the analysis under Article XX(d) and (a) of the 
GATT 1994, because its earlier findings, set out in the previous Sections of this Report, are sufficient 
for those purposes.  
7.455.   The Panel therefore concludes that the dis puted issues under Article XX do not raise the 
kinds of factual issues on which further findings by the Panel would be a necessary precondition for 
the Appellate Body to complete the analysis under Article XX in the event that it reverses the Panel 's 
finding on the non -applicability of Article XX to the CVA. Accordingly, in the  circumstances of this 
case, the Panel sees no practical reason to further assess the merits of  Thailand 's defence s under 
Article XX of the GATT 1994 .808  
7.3.7.4   Conclusion  
7.456.   For these rea sons, the Panel finds, as it did in the first recourse to Article 21.5, that the 
general exceptions in Article XX of the GATT 1994 are not applicable to the obligations in the CVA, 
and therefore that the aspects of the 2002-2003 Charges giving rise to the inconsistency with 
Thailand 's obligations under the CVA cannot be justified under Article XX(a) or (d) of the GATT 1994.  
7.4  The 1,052 revised Notices of Assessment (NoAs)  
7.4.1   Introduction  
7.457.   In addition to its claims regarding the 2002 -2003 Charges, the Philippines challenges the 
CVA-consistency of 1,052 revised Notices of Assessment (NoAs) that PMTL received in November 
2017 from Thailand 's Customs Department. As with the Charges, the NoAs rejected PMTL 's declared 
transaction values, and determined revised customs v alues based on the cost and profit information 
reported by PM Indonesia to the Indonesian tax authorities in the CK -21A form. The NoAs cover 
1,052 entries of cigarettes imported over the period 2001 -2003, including 779 of the 780 entries 
covered by the 200 2-2003 Charges. For those overlapping entries, the "actual price " reflected in the 
NoAs is identical to the "actual price " reflected in the Charges. The NoAs demanded that the importer, 
PMTL, pay additional taxes and duties, a penalty and a surcharge in re lation to each of the entries 
covered.809 The total of these amounts, in respect of all entries, was THB 25,480,317,518 
(approximately USD 800 million).810  
7.458.   The Philippines brings almost identical legal claims under the CVA in respect of both the 
NoAs and the Charges, and its argumentation in support of those claims is also virtually identical. 
                                                
806 Thailand's first written submission, para. 3.150.  
807 Thailand's defences under Article XX(d) and XX(a) reiterate the argument that because "the CVA 
requires that the process of customs valuation should be carried out with the cooperation of the importer when 
the importer is affiliated to the exporter", this rule "cannot be applied in criminal investigations, because in 
criminal investigations the accused has the right to remain silent, which is the opposite of cooperating with the 
authority". (Thailand's first  written submission, para. 3.149.)  
808 At footnote 1624 of its Report, the Panel referred to  China – Raw Materials , China – Rare Earths , and 
India – Solar Cells  as examples of panels making additional factual findings under Article XX principally for the 
purpose of assisting the Appellate Body in the event of a reversal of their interpretation of Article XX on appeal. 
After the issuance of the Report in the first recourse to Article 21.5, the panel in EU – Energy Package followed 
a similar approach. In that case, the panel concluded that the European Union had not demonstrated that 
natural gas is a product "in short supply" in the European Union, within the meaning of Article XX(j) of the 
GATT 1994. However, the panel considered that in the circumstances of t hat case, it was appropriate "to follow 
the approach of certain previous panels in conducting a limited analysis and review so that the Appellate Body 
may have the benefit of our factual findings" related to certain other elements of the legal standard in 
Article  XX(j). (Panel Report, EU – Energy Package , para. 7.1354.)  
809 See sample Notices of Assessment, (English translation), (Exhibit PHL -240-B).  
810 Philippines' first written submission, para. 80.  
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  The only notable difference is that the Philippines brings an additional claim in relation to the NoAs, 
relating to the obligation in Article 16 of the CVA, that it does  not pursue in respect of the 2002 -
2003 Charges. Thailand states that its arguments in respect of the CVA -consistency of the 2002 -
2003 Charges apply mutatis mutandis  to the Philippines ' corresponding claims regarding the NoAs. 
In respect of the one additio nal procedural claim, Thailand submits that the Philippines has failed to 
demonstrate that Thailand has acted inconsistently with Article 16 because, following the request by 
PMTL, the Thai Customs Department sufficiently explained the grounds for issuing the NoAs.  
7.459.   As a threshold matter, Thailand requests the Panel to decline to rule on the NoAs because 
they were withdrawn before the Panel was established. In support of its request, Thailand submits 
that the NoAs have ceased to have legal effects as of the  dates of their withdrawal and that there is 
no risk of them being reintroduced, and in any event ruling on the NoAs would not provide a positive 
solution to the dispute.811 In response to Thailand 's request, the Philippines highlights some 
"uncertainties " arising from certain letters sent by the Thai Customs Department to PMTL to 
communicate the "withdrawal " or "termination " of the 1,052 revised NoAs.812 The Philippines 
underscores that the Panel must conduct its own objective assessment of the argumentation and 
evidence before it, and may not merely rely on Thailand 's representations regarding the alleged 
withdrawal of the measures and the alleged imposs ibility of their reintroduction.813 While the 
Philippines initially invite d the Panel not to rule on the NoAs subject to, and on the basis of, the 
Panel finding that Thailand has withdrawn the NoAs and that they will not be reintroduced814, it 
subsequently req uests the Panel to reject Thailand 's request with respect to at least a subset of the 
1,052 revised NoAs.815 
7.4.2   Main arguments of the parties  
7.460.   Thailand submits that "panels have a margin of discretion in deciding whether to make 
findings with respect to expired measures " and indicates that "on several occasions panels have 
used this authority to decide not to rule on a measure that was withdrawn before the establishment 
of the panel ".816 First, Thailand argues that ruling on the NoAs would do nothing to secure a po sitive 
solution to the dispute. Since PMTL requested the revocation of the NoAs and obtained that outcome 
prior to the establishment of the Panel, "[PMTL]/the Philippines cannot credibly argue that further 
action by the Panel is required to achieve a posit ive solution to this aspect of the dispute ".817 
Moreover, a ruling on the NoAs would not impose any implementation obligation on Thailand and 
could not be the basis for any claim of nullification or impairment by the Philippines. Thailand also 
adds that "to the extent that the legal and factual arguments put forward by the Philippines regarding 
the NoAs mirror very closely those regarding the 02 -03 Charges, a decision not to rule on the NoAs 
would not materially limit the Philippine 's case ".818 
7.461.   Second, Thailand  claims that there is no "clear evidence " that the NoAs will or even could be 
reintroduced.819 According to Thailand, because of the statute of limitations of 10 years under 
Section 21 of the Customs Act, the 1,052 revised NoAs should not have been issued in  the first place 
and cannot be reintroduced. Furthermore, 796 of those NoAs should not have been issued because 
they had already been the subject of final decisions by the BoA. Therefore, there is no legal basis 
under Thai law by which Thailand could reint roduce the withdrawn measure.820 Moreover, "the Panel 
should assume that WTO members will perform their WTO obligations in good faith consistently with 
Article 3.10 of the DSU and Article 26 of the Vienna Convention on the Law of Treaties ".821 
7.462.   Lastly, Thailand  argues that given that the NoAs have been withdrawn and have no further 
legal consequences, there are no "lingering effects ". In Thailand 's view while panels have also looked 
                                                
811 Thailand's first written submission, paras. 2.1 -2.53; Thailand's second written submission, 
paras.  2.1-2.43.  
812 Philippines' second written submission, paras. 14 -42. 
813 Philippines' response to Panel question No. 129.  
814 Philippines' second written submission, paras. 35 and 42.  
815 Philippines' opening statement  at the meeting of the Panel, para. 13.  
816 Thailand's first written submission, para. 2.17.  
817 Thailand's first written submission, para. 2.33.  
818 Thailand's first written submission, para. 2.33.  
819 Thailand's first written submission, para. 2.34.  
820 Thailand's  first written submission, para. 2.34.  
821 Thailand's first written submission, para. 2.35.  
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  at whether the expired measure at issue had any "lingering effects ", they have d one so only in a 
limited number of cases.822 Thailand explains that lingering effects were considered relevant for the 
particular context of subsidies, where the effects of a subsidy may continue to be felt in the market 
after the subsidy has been disbursed or a subsidy programme had expired or been withdrawn823; it 
notes that outside the particular context of subsidies, however, the possible continued effects of a 
measure that was terminated or expired prior to the establishment of the panel have not been 
accorded much significance in determining whether or not to rule.824 
7.463.   In response to Thailand 's request, the Philippines highlights some "uncertainties " arising 
from certain letters sent by the Thai Customs Department to PMTL to communicate the "withdrawal " 
or "termination " of the 1,052 revised NoAs. The Philippines notes that the Thai Customs Department 
has divided the 1,052 NoAs in two groups - one covering 796 NoAs and the other the remaining 256 
NoAs - and addresses them in the same manner. With respect to 79 6 NoAs, the Philippines first 
indicates that the letter of 21 March 2018 "cancelling " said NoAs on the grounds that they had 
already been the subject of a final decision by the BoA does not identify any specific provision of 
Thai law in support of that dec ision and does not appear to have been signed by an official with 
authority to bind the Customs Department.825 Furthermore, in its subsequent oral statement made 
during  the substantive meeting, the Philippines adds that the Panel must take into account addit ional 
facts relating to 208 of the 796 NoAs. The Philippines recalls that on 7 May 2018, the Supreme Court 
found that the BoA had improperly valued the 208 entries and, as a result, the Customs department 
must now take action to implement the Supreme Court 's decision.826 In these circumstances, the 
Philippines indicates that it wishes to avoid any possibility that Thailand, in implementing the 
Supreme Court 's decision, will reintroduce the customs valuation determinations made in the 208 
NoAs and "invites Tha iland to make explicit that it will comply with both the Panel 's findings on the 
208 entries and the Supreme Court ruling ".827 
7.464.   Second, as concerns the remaining 256 NoAs, the Philippines initially notes that the letter of 
23 March 2018 addressed by the Custo ms Department to PMTL in respect of these NoAs states that 
the Customs Department would "not proceed with the civil lawsuit to require [payment of] the taxes 
and duty shortage from [PMTL] ".828 The Philippines states that, based on this language, "it was 
unclear whether the 256 NoAs – including the customs valuation determinations they entail – 
continued to exist, but would not be enforced "829 or whether they had been "cancelled, terminated 
or revoked ".830 As a further point of uncertainty, the Philippines furthe r points to the letter dated 
13 June 2018 sent by the Permanent Mission of Thailand to the WTO to the Permanent Mission of 
the Philippines to the WTO, enclosing a statement from the Director -General of the Thai Customs 
Department dated 18  May 2018 to the ef fect that the 1,052 revised NoAs had been terminated.831 
In the Philippines ' view, the language used in the Director -General 's statement, which is that the 
256 NoAs were "terminated ", is inconsistent with the earlier letter of 23 March, concerning the same 
NoAs, which stated that the Customs Department would not "proceed with civil action to enforce 
payment of the 256 NoAs ". However, the Philippines subsequently points to the BoA 's ruling of 
30 August 2018 issued in the importer 's appeal regarding all 1,052 revised NoAs which states that 
the BoA is "revoking " the 256 NoAs. On the basis of this ruling, the Philippines indicates that it now 
accepts that the 256 NoAs have been definitively revoked but clarifies that their date of revocation 
is 30 August 2018, whi ch is several months after the Panel 's establishment.832  
7.465.   On account of these uncertainties, the Philippines states that it is "unable to withdraw 
voluntarily its complaint " regarding the NoAs.833 Despite these uncertainties, the Philippines 
indicates that "[in] the interests of security and predictability for the importer, [it] invites the Panel 
to confirm Thailand 's representations to this Panel regarding the [1,052 NoAs] and, in that event, 
                                                
822 Thailand's first written submission, para. 2.25.  
823 Thailand's first written submission, para. 2.25.  
824 Thailand's first written submission, para. 2.27.  
825 Philippines' second written submission, para. 19.  
826 Philippines' opening statement at the meeting of the Panel, para. 22.  
827 Philippines' opening statement at the meeting of the Panel, paras. 23 -28. 
828 Philippines' second written submission, para. 22.  
829 Philippines' second written submission, para. 22.  
830 Philippines' second written submission, para. 23  
831 Philippines' second written submission, para. 26.  
832 Philippines' opening statement at the meeting of the Panel, paras. 9 -13. 
833 Philippines' second written submission, paras. 35 and 42.  
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  not to rule on [them] on the basis that: first, Thailand has withdrawn them; and, second , there is 
no risk that Thailand will reintroduce [them], or the customs valuation methodology in [them] 
through subsequent actions to apply or enforce them ".834 However, during the meeting with the 
Panel, the Philip pines subsequently requested, in respect of the 256 NoAs, the Panel to reject 
Thailand 's request to decline to rule on the grounds that they were revoked after the Panel 's 
establishment.835 
7.4.3   Analysis by the Panel  
7.4.3.1   General considerations  
7.466.   At the outset, the Pan el recalls that the issue of expired, withdrawn, terminated, or 
revoked836 measures is not explicitly addressed by the DSU or any other WTO agreement. In the 
absence of any provision in the WTO agreements concerning expired measures, the Panel will turn 
to the existing WTO case law for guidance. This is not the first time that a panel has been confronted 
with the situation in which one or more of the measures at issue was allegedly withdrawn or 
terminated prior to or after the establishment of the panel.  
7.467.   There is no question, and it is undisputed by the parties, that the Panel has jurisdiction to 
rule on the 1,052 revised NoAs: they are specifically identified in the request for the establishment 
of the panel as required by Article 6.2 of the DSU, and for reasons already stated the Panel consider s 
that they have a sufficiently close nexus with the DSB 's recommendations and rulings and certain of 
Thailand 's declared measures taken to comply.837 The Appellate Body has observed that the DSU 
"nowhere provides tha t the jurisdiction of a panel terminates or is limited by the expiry of the 
measure at issue ".838 However, the fact that the Panel has jurisdiction to rule on the NoAs does not 
mean that it is legally  required to do so. As Thailand rightly notes, panels enjo y a margin of discretion 
in deciding whether to make findings with respect to expired measures. As recently reaffirmed by 
the Appellate Body in EU – PET (Pakistan) , "a panel has a margin of discretion in the exercise of its 
inherent adjudicative powers und er Article 11 of the DSU ", and that "[w]ithin this margin of 
discretion, it is for a panel to decide how it takes into account subsequent modifications to, or expiry 
or repeal of, the measure at issue ".839  
7.468.   In deciding whether to make findings on expired, te rminated, revoked, or repealed 
measures, panels have been guided by the general objective of securing a positive solution to the 
particular dispute. In some circumstances, panels have declined to make any findings on the 
challenged measure; in other circum stances, panels have made findings but refrained from making 
any recommendation; and in other circumstances, panels have made both findings and 
recommendations. Panels have attached importance to several different considerations, including 
most notably ( 1) whether the measure at issue was withdrawn prior to, or only after, the 
establishment of the panel by the DSB; ( 2) whether there was a risk of reintroduction of the same 
or materially similar measure; and ( 3) whether findings on the withdrawn measure woul d have any 
practical value for implementation in the light of other findings on materially similar measures. None 
of these three considerations is decisive in and of itself, and they do not necessarily exhaust the 
circumstances that panels may take into ac count when deciding how to exercise their discretion in 
                                                
834 Philippines' second written submission, paras. 35 and 42.  
835 Philippines' opening statement at the meeting of the Panel, paras. 13 -14. 
836 In the remainder of this section, the Panel uses "withdrawn", "terminated" or "revoked" 
interchangeably. These terms appear to be used interchangeably in the case law. In the original proceeding, 
the Panel drew an important distinction betw een measures that have "expired or ceased to exist" at the time of 
establishment (such as legislation) and measures that could be described as a "completed and final" act (such 
as individual customs valuation determinations that would by their nature, norm ally have been completed by 
the time such claims are brought before a WTO panel). (Panel Report, Thailand – Cigarettes (Philippines) , para. 
7.46.) The Panel fully agrees with the original panel's distinction, and its resulting decision to examine and 
make findings on individual customs valuation determinations that had been completed prior the establishment 
of the panel. (See Panel Report, Thailand – Cigarettes (Philippines) , paras. 7.40 -7.51.)  
837 See Section 7.1.3.1 (The nexus between the Charges/NoAs and D SB recommendations and rulings).  
838 Appellate Body Report, EC – Bananas III (Article 21.5 – Ecuador II / US) , para. 270 (See also Panel 
Report, Thailand – Cigarettes (Philippines) , para. 7.43).  
839 Appellate Body Report, EU – PET (Pakistan ), para. 5.19 (refe rring to Appellate Body Reports, EU – 
Fatty Alcohols (Indonesia) , para. 5.180; EC – Bananas III (Article 21.5 – Ecuador II / US) , para. 270. See also 
Panel Reports, US – Poultry (China) , para. 7.54; EC – IT Products , para. 7.165; and EC – Approval and 
Marketing of Biotech Product , para. 7.1650.  
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  respect of withdrawn measures. However, the Panel  consider s that these represent the main 
considerations that panels would take into account in most cases involving withdrawn measures, 
and they will s erve as the general framework for the Panel 's analysis. The Panel  briefly elaborate s 
on each of these considerations below.  
7.469.   Beginning with the timing of withdrawal, in many instances where expired measures arose 
in past cases, panels have paid particular a ttention to whether the measures in question had expired 
before or only after the panel 's establishment by the DSB. This has generated on the one hand a 
line of case law addressing measures that expired before panel establishment and on the other hand 
a line of case law addressing measures that expired after panel establishment. In respect of 
measures withdrawn before panel establishment, panel practice appears to heavily lean against 
making any findings840; in respect of measures withdrawn after panel establ ishment, panel practice 
appears to heavily lean towards panels making findings on such measures, but not making any 
recommendation pursuant to Article 19.1 of the DSU.841 The Appellate Body has recently confirmed 
the significance of this distinction. In EU – PET (Pakistan) , the panel drew this distinction. On appeal, 
the Appellate Body agreed, and stated that the respondent in that case appeared  "to overlook this 
temporal distinction " in the course of suggesting that the case -law showed "a mixed picture " 
regarding whether panels and/or the Appellate Body have made findings in cases where the measure 
at issue expired or was terminated before or during the WTO  proceedings.842 The Appellate Body 
found that the Panel did not err in "giving importance to the fact th at, in the present dispute, the 
measure expired after the DSB had established the Panel " and, in that situation, proceeding to make 
findings on the measure notwithstanding that it had expired.843  
7.470.   The Panel notes that, consistent with this practice, both the  Philippines and Thailand have 
focused their respective arguments on the timing of withdrawal of the NoAs. The Philippines explains 
that, with respect to the 1,052 revised NoAs, the Panel "is to make factual findings on whether some 
or all of the NoAs were  revoked before establishment, as Thailand alleges, or instead existed at the 
time of panel 's establishment " and indicates that "in previous disputes, panels have consistently 
made findings regarding measures that existed at establishment, even when they w ere revoked 
after establishment ".844 Similarly, Thailand has consistently argued that the Panel should decline to 
rule on the NoAs on the ground that they were terminated prior to the establishment of the Panel. 
Likewise, some of the third parties that expre ssed a view on this issue also appeared to acknowledge 
the relevance, depending on the circumstances of each case, of this distinction.845  
7.471.   While the timing of withdrawal is an important consideration, it is not necessarily dispositive 
of whether a panel sho uld exercise its discretion to make findings and/or recommendations. When 
deciding whether or not the aim of securing a positive solution warrants findings on a withdrawn 
measure, panels have also taken into account the likelihood that the respondent would  reintroduce 
the same measure846 or adopt another measure that may give rise to certain of the same, or 
"materially similar ", WTO inconsistencies.847 For instance, in Argentina – Textiles and Apparel , 
Argentina objected to the panel 's examination of the specif ic duties at issue, while the United States 
argued that there was a risk that Argentina would reintroduce the measure. The panel explained 
                                                
840 See e.g. Panel Reports, US – Gasoline , para. 6.19; China – Electronic Payment Services , paras. 
7.224 -7.229; EC – Approval and Marketing of Biotech Product , paras. 7.1651 -7.1654; Argentina – Textiles and 
Apparel , paras. 6.12-6.15; EU – Poultry Meat (China) , para. 7.168.  
841 Panel Reports, EU – PET (Pakistan), para. 7.13; US – Poultry (China) , para. 7.56; Indonesia – Autos , 
para. 14.9; US — Stainless Steel (Mexico) , paras. 7.46 -7.50;  EC – Approval and Marketing of Biotech Product , 
paras. 7.1655 – 7.1667. See also Appellate Body Report, EC – Bananas III (Article 21.5 – Ecuador II / US) , 
para. 273.  
842 Appellate Body Report, EU – PET (Pakistan ), para. 5.38. 
843 Appellate Body Report, EU – PET (Pakistan ), para. 5.39.  
844 Philippines' response to Panel question No. 162.  
845 In the European Union's view, the fact that the expiry or repeal took place after panel establishment, 
while not a "knock -out" criterion that would mandate making findings on  the expired measure on its own, may 
play a role in a panel's exercise of its discretion depending on the circumstances of each case and alongside 
other factors. (European Union's third -party submission, para. 13) The United States appears to frame the 
issue as one concerning a panel's terms of reference and states that the measures on which the panel makes 
findings must be measures that are in existence at the time of the establishment of the panel. (United States' 
response to Panel question No.17 to third  parties.)  
846 Panel Reports, Argentina – Textiles and Apparel , para. 6.14; US – Gasoline , para. 6.19; and China — 
Electronic Payment Services , para. 7.224.  
847 Appellate Body Report, EU – PET (Pakistan ), para. 5.40.  
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  that since there was no "clear evidence " that Argentina would re -introduce the specific duties at 
issue, it would not  address the relevant claims. It also noted that it could not be assumed that 
Argentina was trying to evade the panel 's consideration of the measure by withdrawing it and that 
it had to "assume that WTO Members will perform their treaty obligations in good  faith, as they are 
required to do by the WTO Agreement and by international law ".848 Likewise, in EEC – Apples  
(Chile  I), the panel ruled on a measure which due to its seasonal nature had been terminated prior 
to the establishment of  the panel's terms of reference849, apparently because of the risk that it could 
be reintroduced.850 
7.472.   The Panel further notes that, consistent with this past case law, both the Philippines and 
Thailand have also focused their respective arguments on the risk of  reintroduction of the same or 
materially similar measures. Throughout its submissions, the Philippines has consistently expressed 
its concern over the risk of reintroduction of the NoAs or "the possibility that [Thailand] may adopt 
a new and distinct meas ure that entails a similar WTO -inconsistent determination " and has sought 
assurances from Thailand that it will not act in such a manner.851 For its part, Thailand maintains 
that there is no risk of the NoAs being reintroduced and in any event the Philippine s has not provided 
"clear evidence " pointing to such risk, and that there is no reason to presume that any measure that 
Thailand might adopt to implement the Supreme Court ruling of May 2018 will rely on the pricing 
and cost information found in the CK -21A forms.852 As for the third parties, they appear to hold 
diverging views on the relevance of the risk of reintroduction in deciding whether to make findings 
on a terminated measure.853  
7.473.   In some other cases, panels appear to have accorded less weight to either of the foregoing 
considerations, and have focused more on whether making additional findings on the terminated 
measure would have any practical value for implementation in the light of its other findings on 
materially similar measures. For example, in the trade remedies and safeguards contexts, several 
panels have declined to make findings on distinct claims relating to provisional measures and 
preliminary determinations when they considered that similarities between the two sets of measures 
meant that thei r findings on the final duties and determinations would a fortiori  address any 
corresponding issues with the earlier measures.854 In Dominican Republic – Safeguard Measures , for 
instance, the panel observed that "insofar as the complainants [were to] succeed  in making the case 
that the impugned measures are inconsistent with any of the provisions of the covered agreements, 
that finding would affect both the impugned definitive measure and the provisional measure ".855 
Likewise, in cases involving laws or regulat ions amended in the course of the proceeding, panels 
have sometimes concluded that there would be no practical value in making findings on the earlier 
measure. In Russia – Tariff Treatment , for example, the panel concluded that its findings on the 
measure as amended were "sufficient to address the issues raised " by the complainant 's claims in 
respect of the precursor measure as it existed at the time of the panel 's establishment.856 In 
Colombia – Textiles , the panel made findings on replacement measures that were of the "same 
essence " as the repealed measures, and was of the view that making findings on the repealed 
measures therefore "would amount to a purely academic exercise ".857  
7.474.   This consideration, i.e. whether making additional findings on the terminated measure would 
have any practical value for implementation in the light of its other findings on materially similar 
                                                
848 Panel Report, Argentina – Textiles and Apparel , para. 6.14 (referring to Article 3.10 of the DSU and 
Article 26 of the Vienna Convention on the Law of Treaties).  
849 GATT Panel Report, EEC – Apples (Chile  I), para. 2.4.  
850 See Panel Report, US – Gasoline , para. 6.19 (referring to GAT T Panel Report, EEC – Apples (Chile  I)).  
851 Philippines' second written submission, paras. 35 and 42; opening statement at the meeting of the 
Panel, paras. 25 -28. 
852 Thailand's response to Panel question No. 161, paras. 2.5 -2.8. 
853 The European Union remarke d that the "most compelling reason for making findings despite expiry 
or repeal of the measure is the (real) risk of reintroduction of the measure, which is a matter for the 
complainant to substantiate" (European Union's third -party submission, para. 14). In contrast, in the United 
States' view, considering whether the Notices are likely to be reintroduced is not a useful approach, given that 
any measure would seem to be capable of being reintroduced, at least within the system of the Member at 
issue. (Unit ed States' third -party statement, para. 9)  
854 See e.g. Panel Reports, China – GOES , para. 7.423; China – Broiler Products , para. 7.326; Panel 
Report, Dominican Republic — Safeguard Measures , paras. 7.19 -7.21. 
855 Panel Report, Dominican Republic — Safeguard Measures , para. 7.22.  
856 Panel Report, Russia – Tariff Treatment , para. 7.169.  
857 Panel Report, Colombia – Textiles (Article 21.5 – Colombia / Panama) , paras. 7.112 and 7.114.  
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  measures, accords with the logic underlying the practice of judicial economy.858 It also comports 
with the Appellate Body 's view tha t among the powers that are inherent in a panel 's adjudicative 
function is "the authority of a panel to assess objectively whether the 'matter ' before it, within the 
meaning of Article 7.1 and Article 11 of the DSU, has been fully resolved or still require s to be 
examined ".859 Hence, where the "matter " before a panel can be fully resolved or examined on the 
basis of an examination of only those measures that are still in force, such examination obviates the 
need for that panel to address the expired measure, and any findings on the latter would not be 
necessary to secure a positive solution to the dispute.  
7.475.   The Panel also finds some reflection of this consideration in the arguments of the parties and 
third parties. For instance, Thailand states that "to the ex tent that the legal and factual arguments 
put forward by the Philippines regarding the NoAs mirror very closely " those regarding the 2002 -
2003 Charges, a decision by the Panel not to make findings on the NoAs "would not materially limit 
the Philippine 's case".860 While the Philippines stresses that the Panel 's findings on the Charges could 
not justify a decision to exercise judicial economy in respect of its parallel claims regarding the 
NoAs861, it "agrees that, as a matter of substance , the Panel 's reasoning regarding customs valuation 
determinations in the 02 -03 Charges would apply equally to the 1,052 NoAs, even if the Panel 
declines to rule on the NoAs ".862  
7.476.   In the light of the foregoing, the Panel will first review the information presented by the 
parties re garding the termination of the 1,052 revised NoAs. The Panel will then assess the likelihood 
of reintroduction by Thailand of the same NoAs or the adoption of another measure with the same 
or similar WTO inconsistencies. Finally, the Panel will consider wh ether findings on the NoAs would 
have any practical value for implementation in the light of other findings on the 2002 -2003 Charges.  
7.4.3.2   The termination of the measures  
7.477.   The Panel begins by recalling the following chronology of events which form the factual 
background pertaining to the termination of the 1,052 revised NoAs:  
a. PMTL received the 1,052 revised NoAs in November 2017 from Thailand 's Customs 
Department.  
b. On 14 December 2017, PMTL sent a letter to the Customs Department requesting an 
explanation of th e customs valuation determinations in the 1,052 revised NoAs.863 On 26 
and 28 December 2017, PMTL filed appeals against the NoAs to the BoA and the Excise 
Department on the grounds that: ( 1) the declared transaction values were the prices 
actually paid; ( 2) the revised NoAs were not issued within the period required by Thai law, 
i.e., three years from the date of the entry, as required under Section 19 of the Customs 
Act; and ( 3) the claims for payment were now time -barred under Thai law, under Section 
21 of the Customs Act.864  
                                                
858 As defined by the Appellate Body, judicial economy in WTO dispute settlement refers to "a panel 
refrain[ing] from making multiple findings that the same measure is inconsistent with various provision s when 
a single, or a certain number of findings of inco nsistency, would suffice to resolve the dispute". (Appellate Body 
Report, Canada – Wheat Exports and Grain Imports , para 133.)  
859 Appellate Body Report, EU – PET (Pakistan ), paras. 5.40 and 5.51.  
860 Thailand's first written submission, para. 2.33.  
861 Philippines' response to Panel question No. 162. The European Union likewise emphasizes that, 
pursuant to the concept of judicial economy, where a panel has found a measure inconsistent with one 
obligatio n, that panel may decline to rule on whether that measure is inconsistent with a second obligation that 
is the same or has a similar content as the first obligation because any such finding would not add anything of 
value to the recommendation or ruling to  be given in that particular case. The European Union stresses 
however that applying that concept of judicial economy to a situation in which there is one obligation and two 
similar measures (as opposed to one measure and two similar obligations as describ ed above) would appear to 
be a significant extension of the present understanding of the concept of judicial economy. (European Union's 
response to Panel question No. 18 to third parties, paras 3 -5) 
862 Philippines' response to Panel question No. 128, para. 10.  
863 Philippines' first written submission, para. 81 (referring to a Letter from PMTL to the Director General 
of the Customs Department, 14 December 2017 (English translation), (Exhibit PHL -247-B).)  
864 Philippines' first written submission, para. 81 (not ing that PMTL appealed the Notices on an entry -by-
entry basis, and referring to a Sample PMTL appeal against the NoAs to the BoA, 26 December 2017 (English 
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  c. On 21 February 2018, the Philippines filed a revised version of its request for consultations, 
which superseded an earlier request for consultations dated 6 July 2017. The revised 
request for consultations included claims relating to the  NoAs. Consultations were held on 
12 March 2018 during which, according to Thailand, "Thailand informed the Philippines 
that some or all of the NoAs would be withdrawn ".865 On 14 March 2018, the Philippines 
filed a request for the establishment of a panel.  
d. On 21 and 23 March 2018, the Thai Customs Department sent two letters to PMTL 
explaining, respectively, that the NoAs pertaining to 796 entries had been "revoked " on 
the grounds that the "[NoAs] had … [already] been assessed by a ruling of the Board of 
Appeals " which is a "final judgment " (21 March letter)866, and that, as concerns the 
remaining 256 NoAs, the Customs Department had "decided to terminate the [c]ivil 
[a]ction for collect[ing] the additional duties [and] taxes from [PMTL] " (23 March letter).867  
e. On 26 March 2018, the day before the DSB meeting at which this Panel was established, 
bilateral discussions that took place at the WTO between the Permanent Mission of 
Thailand and officials from the Government of the Philippines, during which, according  to 
Thailand, it "informed the Philippines ' officials that the NoAs had been withdrawn and that 
PMTL had been informed of this development ".868 
f. On 4 May 2018, PMTL wrote to the Director -General of the Customs Department inviting 
him to confirm, by countersig ning PMTL 's letter, "the cancellation of all 1,052 NoAs ".869  
g. On 7 May 2018, the Supreme Court found that the BoA had improperly valued 208 entries 
of the group of 796 NoAs, and overturned t he November 2012 BoA R uling.870 
h. On 28 May 2018, the Principal Advisor to the Director -General of the Thai Customs 
Department wrote to PMTL rei terating that the Customs had (1 ) "cancelled " 796 NoAs on 
21 March 2018 because they have already been ruled upon by the BoA, and ( 2) ordered, 
on 22 March 2018 "the cessation of the pr oceedings to collect taxes and duties " in respect 
of 256 NoAs because they are time -barred.871 
i. On 13 June 2018, the Permanent Mission of Thailand to the WTO wrote to the Permanent 
Mission of the Philippines to the WTO, attaching a statement from the Director -General of 
the Thai Customs Department, dated 18 May 2018, which stated that ( 1) the 796 NoAs 
were "revoked " and "ceased to have any legal standing or effect " on 21 March 2018 
because they had already been the subject of a ruling of the Board of Appeals w hich is 
final according to Section 47 of the Customs  Act B.E. 2560 (2017), and that ( 2) the 256 
NoAs were terminated, and ceased to have any legal standing or effect, on the grounds 
that "the limitation period of 10 years for civil action regarding these e ntries had 
passed ".872 
j. On 21 August 2018, Thailand sent a copy of the statemen t by the Director -General of 
18 May 2018 to PMTL.873 
                                                
translation), (Exhibit PHL -248-B); Sample PMTL appeal against the NoAs to the Excise Department, 28 
December 2017 (English translation), (Exhibit PHL -249-B).) 
865 Thailand's first written submission, para. 2.4.  
866 Letter from the Thai Customs Department to PMTL, 21 March 2018, (Exhibit THA -57), p.3.  
867 Letter from the Thai Customs Department to PMTL, 23 Mar ch 2018, (Exhibit THA -58), p.3.  
868 Thailand's first written submission, para. 2.6.  
869 Letter from PMTL to the Customs Department, 4 May 2018 (English Translation), (Exhibit PHL -292-
B). 
870 Supreme Court decision on Nov 2012 BoA Ruling of 7 May 2018, 28 Decembe r 2017 (English 
translation), (Exhibit PHL -244-B). 
871 Letter from the Customs Department to PMTL, 28 May 2018 (English Translation), (Exhibit PHL -293-
B). 
872 Statement by the Director -General of the Thai Customs Department, (Exhibit THA -59), p.4.  
873 Letter fro m the Director -General of the Customs Department to PMTL, 21 August 2018 (English 
Translation), (Exhibit THA -67-B). 
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  k. On 30 August 2018, the BoA issued a ruling in the importer 's appeal regarding all 1,052 
revised NoAs in which it indicated that i t was "striking out " the appeals pertaining to the 
group of 796 NoAs because the Customs Department had already "sent a letter to the 
[importer] cancelling the notices of assessment "; and revoking the 256 NoAs on the 
grounds that they were time-barred.874  
7.478.   As indicated above, Thailand, in formulating its request for the Panel not to rule on the 1,052 
revised NoAs, has divided them into two groups: one of 796 NoAs, and the other of 256 NoAs. 
Likewise, the Philippines in responding to Thailand 's request has followed the same order. The Panel 
will likewise take this grouping into account.  
7.479.   With respect to the 796 NoAs, the Panel notes that the Philippines, despite some initial 
uncertainty875, "appreciates that Thailand has taken a consistent line in  its communications to the 
importer and the Philippines "876 and the Philippines accepts that the 796 NoAs were withdrawn as of 
21 March 2018.877 Thus, there is no dispute that more than three quarters of the 1,052 revised NoAs 
were withdrawn prior to the estab lishment of the panel. As noted earlier, panel practice heavily leans 
against making any findings in such circumstances.  
7.480.   With respect to the group of 256 NoAs, the Philippines agrees with Thailand that they too 
have been terminated. While the Philippines had initially pointed to some "uncertainties "878 which 
led it to question whether the 256 NoAs had truly and definitively been terminated by Thailand, the 
Philippines subsequently indic ated that, in light of the BoA R uling of 30 August 2018 "[it] now accepts  
that the 256 NoAs have been definitively revoked ".879 However, the Philippines contends that these 
NoAs were revoked only on 30 August 2018, t he date of issuance of the BoA R uling on the importer 's 
appeal, "which is several months after the Panel 's establis hment " and that "[a]s a result the Panel 
should reject Thailand 's request for the Panel to decline to rule on the 256 NoAs ".880 Thailand 
maintains that the 256 NoAs were terminated as of 22 March 2018 which is before the establishment 
of the Panel and that o n this ground the Panel should decline to rule on them.  
7.481.   Having reviewed the evidence provided by the parties, the Panel considers that it is unclear 
exactly when the 256 revised NoAs were terminated. On the one hand, and as elaborated below, 
certain commun ications provided by the Thai authorities to PMTL, the Philippines and/or the Panel 
suggest that the 256 NoAs were terminated as of 22 March 2018.881 On the other hand, the BoA 
Ruling of 30 August 2018 can be read as suggesting that the 256 NoAs were not leg ally terminated 
prior to that time.  
7.482.   In a letter dated 21 March 2018, Thai Customs informed PMTL that 796 of the revised NoAs 
were thereby "revoked ". In a separate communication to PM TL dated 23 March 2018, Thai Customs 
addressed the remaining 256 entries, which it indicated it had decided to "terminate the Civil Action " 
for collection of the duties and taxes at issue. This letter, like the one concerning the 796 NoAs, 
                                                
874 BOA Ruling, 30 August 2018 (English Translation), (Exhibit PHL -296-B), paras. 2.1 -2.2. 
875 The Philippines expressed concern that the Thai C ustoms Department, in its 21 March Letter, failed 
to identify the specific provisions in Thai Law in support of the decision to cancel the 796 NoAs and that it was 
also not clear whether that letter was signed by an official with authority to bind the Cust oms Department. 
(Philippines' second written submission, para. 19.)  
876 Philippines' second written submission, para. 33.  
877 Philippines' opening statement at the meeting of the Panel, para.18.  
878 As points of uncertainty, the Philippines highlights (i)the fac t that the 23 March Letter from the 
Customs Department does not identify the specific provisions of Thai Law in support of the decision not to 
proceed with the civil lawsuit for collecting duties and taxes in respect of the 256 NoAs; (ii) the lack of clari ty 
as to whether the decision not to proceed with the civil lawsuit to collect duties in respect of the 256 NoAs - 
and the customs valuation determinations they entail - means that these NoAs would continue to exist, but 
would not be enforced; and (iii) th e fact that the letter of 13 June 2018 from the Thai Mission to the 
Philippine's mission - which contains a confirmation by the Director -General that the 256 NoAs have indeed 
been terminated - expressly states that it cannot be used in any domestic legal p roceedings before Thai courts 
or governmental agencies. (Philippines' second written submission, paras. 19, 22, 23, and 41.)  
879 Philippines' opening statement at the meeting of the Panel, para. 13.  
880 Philippines' opening statement at the meeting of the Pan el, paras. 13 -14. 
881 As the Panel understands it, based on the relevant evidence submitted by the parties, 22 March 2018 
is the date the cessation of collection of duties and taxes in respect of the 256 NoAs was ordered and became 
effective and 23 March 201 8 is the date appearing on the letter informing PMTL of this cessation.  
 WT/DS371/RW2  
 
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  referenced the le gal bases upon which PMTL had relied in its pending appeal of the NoAs. It reads 
in relevant part:  
The ground for appeal is that the Notices of Assessment had mostly been assessed by a ruling 
of the Board of Appeals and the Notices of Assessment were time -barred. Subsequently, Risk 
Management Division, Post -Clearance Audit Bureau has already revoked the Notices of 
Assessment which had been assessed by a ruling of the Board of Appeals covering 796 entries. 
… 
Post-Clearance Audit Bureau has considered the fac ts, the related laws and legislations and 
decided to terminate the Civil Action for collect the additional duties, taxes from Philip Morris 
(Thailand) Limited for the Notices of Assessment 256 entries. Enclosed herewith please find 
detailed information in the attachment.882  
7.483.   Thus, without specifying the legal provision(s) being applied, this letter made clear that Thai 
Customs had decided to terminate the civil action, and that it was taking this step in response to 
the legal grounds invoked by PMTL in its ap peal of the NoAs. Whereas the letter of 21 March indicated 
in unqualified terms that the NoAs are "revoked ", the second informed PMTL of the decision to 
terminate the civil action to collect duties.  
7.484.   The Thai authorities subsequently clarified, through a l etter of 13 June 2018883 and their 
submissions in this proceeding884, that it was on the basis of both Section 47 and Section 21 of the 
Thai Customs Act that the Customs Department decided to terminate the 796 NoAs and, and on the 
basis of Section 21 of the sa me Act that it decided not to collect duties and taxes in respect of the 
remaining 256 NoAs. Prior to that, on 28  May 2018, the Principal Advisor to the Director -General of 
the Thai Customs Department wrote to PMTL clarifying that the Customs had ( 1) "cancelled" 
796 NoAs on 21 March 2018 because they had already been ruled upon by the BoA, and ( 2) ordered, 
on 22 March 2018 "the cessation of the proceedings to collect taxes and duties " in respect of 256 
NoAs because they are "time-barred ".885 
7.485.   Moreover, Thailand has in several instances, including through its submissions in this 
proceeding, confirmed that the decision not to collect duties and taxes with respect to the 256 NoAs 
has in effe ct resulted in the NoAs being terminated.886 The Panel appreciates that a party 's assertions 
regarding the status of a measure in its domestic legal system are not dispositive of factual issues 
that arise before a panel, but considers it appropriate to accor d some weight to Thailand 's repeated, 
unqualified, and clear representations to this Panel as to the termination of the 1,052 revised NoAs. 
In this regard, the Panel recalls its statement, in the first recourse to Article 21.5 in the context of 
determining  the content of the practice followed in the administration of Thailand 's VAT regime, that:  
Additionally, insofar as the Philippines ' arguments relating to the content of the practice 
rely mostly on the reported statements of Thai officials, we cannot igno re, and must 
accord at least some weight to, the clear statements made by Thailand to the Panel in 
the course of this proceeding on the exact same issue , to the effect that the RRSP is 
accepted only to the extent that it reflects the average actual market price and that the 
Revenue Department reserves the right to verify whether the notified RRSP corresponds 
to the average actual market price.887 
7.486.   Finally, while Thailand has not acceded to PMTL 's request of 4  May 2018 that the Director -
General countersign PMTL 's letter as confirmation that the 256 NoAs had been terminated as of that 
time, Thailand has, through its subsequent letters of 13 June 2018 and 21  August  2018 addressed 
                                                
882 Letter from the Thai Customs Department to PMTL, 23 March 2018, (Exhibit THA -58), p.3.  
883 Statement by the Director -General of the Thai Customs Department, (Exhibit THA -59), p.4.  
884 Thailand's first written submission, paras. 2.12 -2.14; and second written submission, paras. 2.9, 
2.22, and 2.23.  
885 Letter from the Customs Department to PMTL, 28 May 2018 (English Translation), (Exhibit PHL -293-
B). 
886 Thailand's second written submission,  paras. 2.12 and 2.24.  
887 Panel Report, Thailand – Cigarettes (Philippines) (Article 21.5 – Philippines) , para. 7.883. (emphasis 
added)  WT/DS371/RW2  
 
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  respectively to the Philippines and to PMTL, explicitly made clear that the 256 NoAs had also been 
terminated. The statement provided by the Director -General reiterates and confirms that:  
A. First, 796 notices of assessment were revoked on 21 March 2018, because the entries 
at issue had already been subject to assessment following a previo us ruling of the Board 
of Appeals. Because the Board of Appeals had already issued a ruling, these notices 
should not have been issued according to Section 47 of the Customs Act B.E. 2560 
(2017) which states "A ruling of the Appeal Committee shall be final , made in writing 
and submitted to an appellant. " The revocation of these notices means that they no 
longer have any legal standing or effect as of the date of revocation.  
B. Second, the notices of assessment for the remaining 256 entries were terminated o n 
22 March 2018. They were issued on the basis of the import declarations issue more 
than 10 years prior to the issuance of the notices. Thus, the limitation period of 10 years 
for civil action regarding these entries had passed. As of the date of terminat ion, the 
256 notices of assessment ceased to have any legal standing or effect to collect 
additional duty under the Thai law.  
C. Philip Morris (Thailand) Limited received the information about the revocation  / 
termination of the 1,052 notices of assessmen t on 24 March 2018.888 
7.487.   The Panel considers that the exact wording of the letters transmitted to PMTL may not have 
been as perfectly clear as one might have hoped for, bearing in mind that they concern measures 
demanding approximately USD 800 million from PMT L. Having said that, these communications , 
which were provided by the Thai authorities to PMTL,  to the Philippines , and to the Panel , suggest 
that the 256 NoAs were withdrawn no later than 22 March 2018.  
7.488.   On the other hand, the BoA Ruling of 30 August 2018  can be read as suggesting that the 
256 NoAs were not legally revoked prior to that time. At the substantive meeting with the Panel at 
the end of September 2018, the Philippines highlighted that the BoA, in its Ruling, indicated that it 
was "striking out t he appeals " for the 796 NoAs because the Customs Department had already sent 
a letter to the importer cancelling these NoAs; whereas for the 256 NoAs, the BoA stated it was 
"revoking the assessments " without mentioning any prior communication to the import er by which 
these NoAs had already been cancelled. According to the Philippines, the BoA 's different treatment 
of the two sets of NoAs is highly revealing: while the Customs Department had consistently indicated 
in its letters that the 796 NoAs had been ca ncelled, terminated, or revoked, it had, until the BoA 
Ruling, never used similar language with respect to the 256 NoAs except in the statement of 13 June 
2018; rather, the Customs Department consistently expressed its commitment not to enforce 
payment of the 256 NoAs. In the Philippines ' view, it is the BoA Ruling of 30 August 2018 that 
revoked the 256 NoAs.889  
7.489.   The Panel considers that the contrasting formulations used by the Customs Department and 
the BoA with respect to the 256 NoAs as compared with the 7 96 NoAs casts a reasonable doubt on 
the exact date of revocation of these NoAs, and do not allow us to determine whether the 256 NoAs 
were withdrawn on 22 March 2018, i.e. prior this Panel 's establishment, or only on 30 August 2018, 
i.e. after the establis hment of this Panel.  In any event, however,  it is clear  that the 256 NoAs were 
terminated no later than 30 August 2018.   
7.490.   In sum, the Panel concludes that the Thai Customs Department terminated at least 796 of 
the 1,052 revised NoAs prior to the Panel 's establishment, and that Thai Customs may have also 
withdrawn the remaining 256 revised NoAs prior to the Panel 's establishment and in any event 
terminated them no later than 30 August 2018.  
                                                
888 Statement by the Director -General of the Thai Customs Department, (Exhibit THA -59), p.4.  
889 Philippines' opening stateme nt at the meeting of the Panel, paras. 9 -13. WT/DS371/RW2  
 
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  7.4.3.3   Reintroduction of the same or materially similar measures  
7.491.   The Panel r ecalls that due regard should be given to the likelihood of reintroduction of the 
same measure or adoption of another measure that may give rise to certain of the same, or 
materially similar, WTO inconsistencies by the respondent.  
7.492.   At the outset, the Panel  shares Thailand 's view that weight must be given to the presumption 
afforded to a Member that it will perform their WTO obligations in good faith. As the A ppellate Body 
has explained, a panel cannot assume that "one party is seeking to evade its obligations and will 
exercise its rights so as to cause injury to the other party ".890 In this case, that means that the Panel 
cannot presume that Thailand would withdraw, with a view to subsequently reintroducing, the 
revised NoAs so as to avoid scrutiny of  the WTO -consistency of these measures.  
7.493.   The Panel considers that the stated legal bas es for terminating the 1,052 revised NoAs would 
legally preclude the Thai authorities from reintroducing the same or materially similar NoAs. 
According to the Thai authori ties, the 1,052 revised NoAs have been terminated as follows: first, the 
796 NoAs were withdrawn on the grounds that they have already been  the subject of final rulings 
by the BoA pursuant to Section 47 of the Customs Act and that they are also time -barred  pursuant 
to Section 21 of the Customs Act; and subsequently, the remaining 256 NoAs were withdrawn on 
the grounds that they are also time -barred pursuant to Section 21 of the Thai Customs Act.891 These 
are the same grounds that PMTL invoked when it filed ap peals against the NoAs to the BoA and the 
Excise Department, i.e. it appealed on the grounds that they were not issued within the period 
required by Thai law, i.e., three years from the date of the entry, as required under Section 19 of 
the Customs Act, an d that the claims for payment were now time -barred under Thai law, under 
Section 21 of the Customs Act. Accordingly, any NoAs reissued in relation to the same entries as 
those covered by the 1,052 revised NoAs would a priori be in violation of these provis ions of the 
Thai Customs Act.  
7.494.   The Panel notes that the Philippines remains concerned with regards to the subset of 208 
entries - covered by the 796 NoAs - which the Supreme Court, in its ruling of 7 May 2018, found 
had been improperly valued by the BoA. Gi ven that Thailand must take action to implement the 
Supreme Court 's decision, the Philippines explains that it seeks to ensure that Thailand, in doing so, 
will not reintroduce the same customs valuation determinations made in the corresponding 208 NoAs 
or adopt a new measure that may give rise to certain of the same, or materially similar, WTO 
inconsistencies that are alleged in this dispute.892 The Philippines thus invites Thailand to "make 
explicit that … it will comply with both the Panel 's findings on the  208 entries and the Supreme Court 
ruling ".893 In response, Thailand indicates that it intends to comply with the Supreme Court ruling 
but clarifies that any action that the Customs Department might take to implement the Supreme 
Court ruling must be consider ed as a new and distinct measure from the NoAs. Thailand adds that 
it is entitled to a presumption that it will perform its WTO obligations in good faith.894  
7.495.    While the Panel appreciates the Philippines ' desire to avoid any possibility of new measures 
with the same, or materially similar, WTO inconsistencies being adopted, the Panel is unable to see 
any basis that would suggest that Thailand may act in such a manner in implementing the Supreme 
Court ruling of 7 May 2018. To recall, the Supreme Court ruling r eviews the November 2012 BoA 
Ruling in which the BoA rejected PMTL 's declared transaction values for 210 entries of Marlboro 
cigarettes (which include the 208 entries covered by the NoAs in the present proceeding) and 
determined the revised customs value b y using the "deductive value " method provided in Article 5 
of the CVA.895 The Supreme Court ruling upheld the BoA 's rejection of the transaction values, but 
found that the BoA, by deducting an incorrect amount for profits and general expenses (P&GE), had 
improperly determined the alternative deductive customs values. It is evident that the methodology 
and the main issue under scrutiny in the Supreme Court ruling, i.e. the deductive value method and 
the proper P&GE rate, are different from those at issue in th e NoAs, i.e. the computed value method 
and the pricing and cost information reported by PM Indonesia to the Indonesian tax authorities in 
                                                
890 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 326.  
891 Thailand's first written submission, para. 2.14.  
892 Philippines' opening statement at the meeting of the Panel, paras. 22 -27. 
893 Philippines' opening statement at the meeting of the Panel, para. 28.  
894 Thailand's response to Panel question No.161. paras. 2.5 -2.6. 
895 Panel Report, Thailand – Cigarettes (Philippines) (Article 21.5 – Philippines) , paras. 7.64 -7.65. 
 WT/DS371/RW2  
 
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  the CK -21A form s. Given these differences, the Panel is inclined to agree with Thailand that, logically, 
"the basis for any implementing measure regarding the 208 entries will clearly be different from the 
basis for issuing the NoAs at issue in this dispute "896 as such meas ure would be addressing a different 
set of issues regarding the application of the deductive value methodology under Article 5.  
7.496.   Moreover, the Panel notes that by virtue of the obligation to respect the sequential ordering 
of alternative valuation methods in Articles 2 to 7 of the CVA, a Member is allowed to resort to the 
computed value method under Article 6 (or permissible variation thereof under Article 7) only after 
it has been determined that the deductive value method under Article 5 (or, as appropria te, Article  6) 
cannot be used. Therefore, Thailand would first need to apply the deductive method, before turning 
to the computed value method only if the former cannot be used. While this does not definitively 
eliminate the risk that Thailand, in implemen ting the Supreme Court ruling, will use the computed 
value method in the same manner as in the 1,052 revised NoAs, it further reduces the possibility of 
it doing so in a CVA -inconsistent manner.  
7.497.   In sum, the Panel sees no positive evidence  upon which it co uld conclude that any future 
NoAs which the Thai Customs Department may issue, whether to implement the Supreme Court 
Ruling which modifies the November 2012 BoA Ruling or otherwise, would use either the same 
valuation methodology, or the same CK -21A infor mation, as was used in the 1,052 withdrawn NoAs.  
7.4.3.4   The practical value of additional findings in the event of reintroduction  
7.498.   The Panel now turns to the question of whether findings on the NoAs would have any 
practical value for implementation in the light of the Panel 's other findings on the 2002 -2003 
Charges. The Panel will separately consider the Philippines ' substantive and procedural claims.  
7.499.   The Panel is well aware that the 2002 -2003 Charges and the 1,052 revised NoAs are two 
formally distinct measures . However, as indicated above, the Charges and the NoAs rest on the 
same basis, namely the DSI 's calculation of the "actual " price/value of PMTL 's imports of cigarettes 
based on pricing and cost information reported by PM Indonesia to Indonesian tax author ities in the 
CK-21A form s. More importantly, this common basis forms the impugned conduct in both the NoAs 
and the Charges and has led to almost identical claims by the Philippines in respect of both measures. 
Additionally, the Panel also recalls the overl ap in the entries covered by the two measures: the NoAs 
cover 1,052 entries of cigarettes imported over the period 2001 -2003, including 779 of the 780 
entries covered by the 2002 -2003 Charges. In these circumstances, despite being two formally 
distinct mea sures, the Panel considers that its finding s on the Charges necessarily address the 
Philippines ' substantive claims concerning the other measure from the perspective of providing 
guidance on implementation. In these circumstances, making separate and addit ional findings on 
the CVA -consistency of the withdrawn NoAs would provide no guidance for implementation beyond 
the findings that the Panel has already made on the Philippines ' identical substantive claims in 
relation to the 2002 -2003 Charges.  
7.500.   The Panel further notes that while the 2002 -2003 Charges and the 1,052 revised NoAs are 
formally distinct measures, any new NoAs reintroduced by the Customs Department would also be 
formally distinct measures from the 1,052 withdrawn NoAs that would be the  subject of any findings. 
Thus, while any findings that the Panel were to make on the 1,052 revised NoAs would effectively 
address the WTO -consistency of any newly introduced NoAs that are the same or materially similar 
as the withdrawn 1,052 NoAs, such fi ndings would not do so to any greater extent than the Panel 's 
findings on the 2002 -2003 Charges already do. Whereas the Panel 's findings on the 2002 -2003 
Charges do not formally apply to either the 1,052 revised NoAs, or to any future NoAs reintroduced 
by the Thai Customs Department, as a matter of substance the Panel 's reasoning on the 2002 -2003 
Charges would be applicable  to any reintroduced NoAs as would any findings that the Panel made in 
respect of the 1,052 revised NoAs  if it were to decide to rule on  the latter . For purposes  of 
implementation  and/or the assessment of the WTO -consistency of any future NoAs reintroduced by 
the Customs Department , making findings on the 1,052 revised NoAs would have no additional 
practical value beyond the findings alrea dy made on the Philippines ' identical substantive claims in 
respect of the 2002 -2003 Charges.  
7.501.   The Panel recalls  that the 2002 -2003 Charges and the 1,052 revised NoAs were issued by 
different Thai agencies, but stresses the irrelevance of this fact to the question s of whether the 
                                                
896 Thailand's response to Panel question No.161, para. 2.5.  WT/DS371/RW2  
 
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  Panel 's findings on the 2002 -2003 Charges and the underlying reasoning may adequately a lso 
address the 1,052 revised NoAs , or whether additional and separate findings on the 1,052 revised 
NoAs would have practical value for implementation in general and for providing guidance on the 
WTO-consistency of any reintroduced NoAs in particular. The relevance and value  of the Panel 's 
findings on the 2002 -2003 for the 1,052 revised NoAs or any new NoAs that are materially similar 
are not attenuated by virtue of the fact that they were made in respect of a measure taken by a 
different agency, i.e. the Public Prosecutor . As the Panel has already elaborated in some detail, the 
substantive obligations in A rticles 1.1, 1.2(a), second sentence, and the relevant custom valuation 
rules in Articles 2 to 7 apply to any organ of the state that makes a "customs va luation " 
determination. The  CVA's preambular objectives promote "uniformity " in the implementation of WTO 
customs valuation rules, and "valuation procedures of general application ".897  
7.502.   Thus, t he identity and nature of a particular Thai agency involved in ma king a customs 
valuation determination on the basis of pricing and cost information contained in the CK -21A form s 
is generally irrelevant to the assessment of the CVA -consistency of such a determination. Thus, it 
would be redundant for the Panel to make se parate and additional findings on the revised NoAs for 
the mere reason that its equally relevant findings on the Charges were made in respect of measures 
taken by a different agency . The Panel  makes this clarification because it  is wary of the possibility 
that, if it were to make separate and additional findings on the NoAs issued by the Customs 
Department that are superfluous in the light of its findings on the 2002 -2003 Charges, this could be 
taken to imply that the identity and nature of the agency makin g a customs valuation determination 
is somehow relevant to the assessment of the CVA -consistency of that determination. It is not.  
7.503.   Thus, the Panel considers that any additional findings on the 1,052 revised NoAs would 
potentially have practical value only insofar as they addressed any claims that may be left 
unaddressed by the Panel 's findings on the 2002 -2003 Charges. In this regard, the Panel recalls that 
the Philippines has made a claim concerning Article 16 that it has not made in relation to the 2 002-
2003 Charges. The Panel also notes that its finding that the communications between the DSI and 
PMTL discharged any obligation under Article 1.2(a), third sentence, in relation to the 2002 -2003 
Charges issued in January 2017, does not resolve the Phili ppines ' claim under Article 1.2(a), third 
sentence, in relation to the Thai Customs Department and the issuance of the 1,052 revised NoAs 
in November 2017.  
7.504.   However, the Panel considers that there would be limited practical value in making additional 
stand -alone findings on the procedural claims under Articles 16 and 1.2(a), third sentence, in relation 
to the 1,052 revised NoAs. These claims concern procedural issues in respect of measures that have 
already been withdrawn.  The particular issues raised by th ese procedural claims essentially relate 
to the adequacy of the information that the Thai Customs Department conveyed to PMTL regarding 
the Customs Department's  reliance on a source of information – pricing and cost information 
reported by PM Indonesia in the CK -21A forms – which  the Panel has found is ab initio  inconsistent 
with the applicable CVA provisions, and which cannot be used as the basis for any future customs 
valuation determination of PMTL 's cigarettes imported into Thailand. The legal standards  in both of 
these procedural obligations have already been clarified and applied in both the first recourse to 
Article 21.5 as well as in the original proceeding. Taking all of these  circumstances  together , a 
separate and additional assessment of whether o r not the Thai Customs Department complied with 
the procedural obligations in Articles 16 and 1.2(a), third sentence, appears to be a largely academic 
issue.  
7.4.4   Conclusion  
7.505.   For the reasons set forth above, the Panel concludes that the Thai Customs Department 
terminated at least 796 of the 1,052 revised NoAs before DSB established the Panel; that the Thai 
Customs Department may have also withdrawn the remaining 256 revised NoAs prior to the Panel 's 
establishment, and in any event terminated them no later than 30  August 2018; that there is no 
reason to consider that any future NoAs which the Thai Customs Department may issue, whether to 
implement the Supreme Court Ruling which modifies the November 2012 BoA Ruling or otherwise, 
would use either the same valuation methodology, or the same CK -21A information, as was used in 
the withdrawn NoAs; that even if Thai Customs did reintroduce some or all of the NoAs using that 
same methodology and information, separate findings by the Panel concerning the WTO -consistency 
of the withdrawn NoAs would provide no guidance beyond the findings that the Panel has already 
                                                
897 See paragraph 7.261.  WT/DS371/RW2  
 
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  made on the Philippines ' identical substantive claims in relation to the 2002 -2003 Charges; and that, 
in the light of those findings above in this Report, the issue s raised by the Philippines ' procedural 
claims in relation to the revised NoAs are rendered largely academic .  
7.506.   Taken together, the foregoing considerations lead the Panel to decline to rule on the 1,052 
revised NoAs  that have now all be en terminated .  
8  CONC LUSIONS AND RECOMMEN DATIONS  
8.1.  Regarding the Charges filed by the Public Prosecutor on 26 January 201 7 concerning 780 
entries of Marlboro  and L&M cigarettes imported by PMTL between January 2002 and July 2003, the 
Panel  finds that the Philippines ' claims are admissible and fall within the scope of this compliance 
proceeding, and conclude s that: 
a. the 2002 -2003 Charges are inconsistent with Article 1.1 and /or the substantive obligation 
in Article 1.2(a), second sentence, of the CVA because the Public Prosecutor's  rejection of 
PMTL's declared transaction values based on pricing and cost information reported by PM 
Indonesia in the CK -21A forms constitutes a fail ure to conduct a proper examination of 
the circumstances surrounding the sale , and/or a proper determination of the price 
actually paid or payable;  
b. the 2002 -2003 Charges are inconsistent with Article 6.1 and/or Article 7.1 of the CVA, 
becau se the Public P rosecutor improperly rel ied on pricing and cost information reported 
by PM Indonesia in the CK -21A form s to determine the revised customs value of the 
imported goods;  
c. the Public Prosecutor acted inconsistently with the obligation to sequentially apply the  
customs valuation methods in Articles 2 through 7  of the CVA when it determined the 
revised customs values of PMTL's imported goods ; and  
d. the Public Prosecutor did not violate the procedural obligation in Article 1.2(a), third 
sentence, of the CVA because  prior to the issuance of the 2002 -2003 Charges the DSI had 
already sufficiently communicated the grounds for considering that the relationship 
between PMTL and PM Indonesia influenced the price, and PMTL responded.  
8.2.  The Panel declines to make findings on t he Philippines ' additional claims regarding  the 1,052 
revised Notices of Assessment  that PMTL  received in November 2017 from Thailand 's Customs 
Department, because most if not all of these NoAs were withdrawn prior to the establishment of the 
Panel by the DSB; there is no reason to expect that the Thai authorities would reintroduce the same 
or materially similar measures ; and any additional findings by the Panel on the NoAs would have 
limited practical value for implementation beyond the Panel 's other findi ngs on the 2002 -2003 
Charges.  
8.3.  Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations 
assumed under a covered agreement, the action is considered prima facie  to constitute a case of 
nullification or impairment. The Panel conclude s that, to the extent that the measures at issue are 
inconsistent with the Customs Valua tion Agreement , they have nullified or impaired benefits accruing 
to the Philippines under that agreement . 
8.4.  The Panel  therefore conclude s that Thailand has failed to implement the recommendations and 
rulings of the DSB to bring its measures into conformity wit h its obligations under the Customs 
Valuation Agreement . The recommendations and rulings of the DSB in the original pr oceeding in 
DS371 remain operative, t o the extent that Thailand has failed to comply with the m.  
__________