WT/DS497/7  
 
6 October 2017  
(17-5368) Page: 1/1 
  Original: English  
 
 
BRAZIL – CERTAIN MEASURES CON CERNING TAXATION AND  CHARGES  
NOTIFICATION OF AN  OTHER APPEAL BY JAPA N UNDER ARTICLE 16.4  AND ARTICLE 17  
OF THE UNDERSTANDING  ON RULES AND PROCEDU RES GOVERNING  
THE SETTLEMENT OF DI SPUTES (DSU), AND UN DER RULE 23 OF  
THE WORKING PROCEDURES F OR APPELLATE REVIEW  
The following communication, dated 3 October 2017 , from the delegation of Japan , is being 
circulated to Members.  
 
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Pursuant to Article 16.4 and Article 17 of the Understanding on Rules and Procedure s Governing 
the Settlement of Disputes  ("DSU") and Rule 23 of the Working Procedures for Appellate Review , 
Japan hereby notifies its decision to appeal to the Appellate Body certain issues of law covered in 
the Panel Report in Brazil – Certain Measures Con cerning Taxation and Charges  (WT/DS497/R) 
and certain legal interpretations developed by the Panel in this dispute.  
In particular, Japan seeks review by the Appellate Body of the Panel 's findings that it did not need 
to review the WTO -consistency of the ch allenged INOVAR -AUTO and ICT programmes under an 
"in-house " scenario.  The Panel 's findings to this effect are in error and are based on an erroneous 
interpretation and application of Article 11 of the DSU, by erroneously exercising judicial economy 
not to extend findings to the so -called "in-house " scenario.  Alternatively, the Panel failed to 
provide "coherent reasoning as required under Article 11 of the DSU. The paragraphs relating to 
these errors include paragraphs 6.11, 7.302, 7.308, 7.314 and 7.749 of the Panel Report.  
Japan respectfully requests the Appellate Body to reverse and modify the related findings, 
conclusions and recommendations of the Panel.  Moreover, to the extent that it reverses the Panel 's 
findings in this respect, Japan also requests t hat the Appellate Body complete the legal analysis by 
extending the Panel 's findings regarding the "outsourcing " scenario to the "in-house " scenario, and 
finding that the accreditation and production step requirements under the INOVAR -AUTO 
programme and IC T programmes "as a whole " – i.e., under both the "outsourcing " and "in-house " 
scenarios – are inconsistent with Article III:4 of the GATT 199 4 and Article 3.1(b) of the 
SCM Agreement.  
In the alternative, should the Appellate Body consider that the Panel did not exercise judicial 
economy, Japan respectfully requests the Appellate Body to review, pursuant to Article 17.6 of 
DSU, the legal interpretations developed by the Panel and modify,  pursuant to Article 17.13 of the 
DSU, the findings contained in paragraphs 7.298 -7.314 and 7.746 -7.751 of the Report, to the 
extent that they may be understood as referring solely to the "outsourcing " scenario, and clarify 
that the Panel 's findings of the  WTO-inconsistency of the challenged INOVAR -AUTO programme 
and ICT programmes are indeed not limited to the "outsourcing " scenario, but that the Panel made 
a finding with respect to the accreditation requirement under INOVAR -AUTO programme as a 
whole, as w ell as the production -step requirements of the ICT programmes as a whole. To this 
end, Japan also requests that the Appellate Body complete the analysis, where appropriate.  
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