WT/DS453/R  
 
30 September 2015  
(15-5027)  Page: 1/266  
  Original: Spanish  
 
  
  
 
ARGENTINA - MEASURES RELATING TO TRADE 
IN GOODS AND SERVICES 
REPORT OF THE PANEL 
 WT/DS453/R 
 
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  TABLE OF CONTENTS 
1   INTROD UCTION  ........................................................................................................ 14  
1.1   Complain t by Panama ............................................................................................... 14 
1.2   Panel establishm ent and comp osition .......................................................................... 14 
1.3   Panel proceedings ..................................................................................................... 14 
2   FACTUAL ASPECTS ..................................................................................................... 15  
2.1   Introduction ............................................................................................................. 15 
2.2   Decree No. 589/2 013 ................................................................................................ 15 
2.3   The measures at issue ............................................................................................... 17 
2.3.1   Intr oducti on ..........................................................................................................  17 
2.3.2   Measure 1: Withholding tax on payments of interest or remuneration ............................ 18 
2.3.3   Measure 2: Presumption of unjustified increase in wealth ............................................ 19 
2.3.4   Measure 3: Transaction valuation based on transfer prices ........................................... 20 
2.3.5   Measure 4: Payment received ru le for the allocation of expenditure ............................... 20 
2.3.6   Measure 5: Requirements re lating to reinsu rance services ........................................... 21 
2.3.7   Measure 6: Requirements for access to the Argentine capital market ............................. 24 
2.3.8   Measure 7: Requirements for the registrati on of branches............................................ 25 
2.3.9   Measure 8: Foreign exch ange authorizatio n requirement ............................................. 26 
2.4   Factua l context ........................................................................................................ 26 
2.4.1   Intr oducti on ..........................................................................................................  26 
2.4.2   Relevant Argentine legislation applicable to coop erative countries ................................. 26 
2.4.2.1   Presumption of unjus tified increase in wealth .......................................................... 26 
2.4.2.2   Valuation of transa ctions ...................................................................................... 27 
2.4.2.3   Rule for the al location of expenditure ..................................................................... 28 
2.4.2.4   Requirements for th e registration of branches ......................................................... 28 
2.4.2.5   Foreign exchange authorization requirement ........................................................... 29 
2.4.3   Global Forum on Transparency and Exchange of Information for Tax Purposes ................ 30 
2.4.4   Financial Action  Task Forc e (FATF) ........................................................................... 31 
3   PARTIES' REQUESTS FOR FI NDINGS AND RECO MMENDATIONS ................................ 32  
4   ARGUMENTS OF  THE PARTIES ................................................................................... 34  
5   ARGUMENTS OF TH E THIRD PA RTIES ........................................................................ 34  
6   INTERIM REVIEW ...................................................................................................... 34  
6.1   Introduction ............................................................................................................. 34 
6.2   The question of whether measur e 5 covers retroce ssion services ..................................... 35 
6.3   Panama's claims under  Article II:1 of  the GATS ............................................................ 35 
6.4   Panama's claims under Article XVII of the GATS ............................................................ 36 
6.5   Argentina's defence under Article XIV(c) of the GATS ..................................................... 36 
6.6   Argentina's defence under Article XIV(d) of the GATS .................................................... 36 WT/DS453/R 
 
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  6.7   Argentina's defence under paragraph 2(a) of the Annex on Financial Services (the 
prudential ex ception) ....................................................................................................... 36 
6.8   Panama's claims under Article I:1 of the GATT 1994 ...................................................... 37 
6.9   Argentina's request for editorial and typographical amendments ...................................... 37 
7   FIND INGS ................................................................................................................. 37 
7.1   Preliminary issues ..................................................................................................... 37 
7.1.1   The question of whether Panama raised  a new issue in its firs t written submission .......... 38 
7.1.2   Aspects of measure 5 incl uded in our term s of refe rence ............................................. 40 
7.1.2.1   In troducti on ....................................................................................................... 40 
7.1.2.2   Development and amendment of measure 5 ........................................................... 40 
7.1.2.3   The relevant legal provision .................................................................................. 41 
7.1.3   The question of whether meas ure 5 covers retroc ession services .................................. 44 
7.2   Order of  analysis ...................................................................................................... 47 
7.3   Findings under the GATS ........................................................................................... 50 
7.3.1   The question of whether the GATS is applicable to the measures at issue ....................... 50 
7.3.1.1   Main arguments of the parties ............................................................................... 50 
7.3.1.2   Assessment by the Panel ...................................................................................... 52 
7.3.2   Panama's claims under  Article II:1 of  the GATS .......................................................... 61 
7.3.2.1   Main arguments of the parties ............................................................................... 61 
7.3.2.2   Assessment by the Panel ...................................................................................... 66 
7.3.3   Panama's claims under Articl es XVI:1 and XVI:2 of the GATS ..................................... 106  
7.3.3.1   Main arguments of the parties ............................................................................. 106  
7.3.3.2   Assessment by the Panel .................................................................................... 109  
7.3.4   Panama's claims under  Article XVII of  the GATS ....................................................... 118  
7.3.4.1   Main arguments of the parties ............................................................................. 118  
7.3.4.2   Assessment by the Panel .................................................................................... 120  
7.3.5   Argentina's defence under Article XIV(c) of  the GATS ................................................ 136  
7.3.5.1   Main arguments of the parties ............................................................................. 136  
7.3.5.2   Assessment by the Panel .................................................................................... 145  
7.3.6   Argentina's defence under Article XIV(d) of the GATS ................................................ 185  
7.3.6.1   Main arguments of the parties ............................................................................. 185  
7.3.6.2   Assessment by the Panel .................................................................................... 188  
7.3.7   Argentina’s defence under paragraph 2(a) of the Annex on Financial Services 
("prudential exception") .................................................................................................. 188  
7.3.7.1   Main arguments of the parties ............................................................................. 188  
7.3.7.2   Assessment by the Panel .................................................................................... 195  
7.4   Findings under the GATT 1994 .................................................................................. 224  
7.4.1   Intr oduction  ........................................................................................................ 2 24 
7.4.2   Panama’s claims under Article I:1 of the GATT 1994 ................................................. 224  
7.4.2.1   Main arguments of the parties ............................................................................. 224  
7.4.2.2   Assessment by the Panel .................................................................................... 228  WT/DS453/R 
 
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  7.4.3   Panama’s claims under Article III:4 of the GATT 1994 ............................................... 240  
7.4.3.1   Main arguments of the parties ............................................................................. 240  
7.4.3.2   Assessment by the Panel .................................................................................... 242  
7.4.4   Panama’s claims under Article XI:1 of the GATT 1994 ............................................... 242  
7.4.4.1   Main arguments of the parties ............................................................................. 242  
7.4.4.2   Assessment by the Panel .................................................................................... 244  
7.4.5   Argentina’s defence under Article XX(d) of the GATT 1994 ......................................... 246  
7.4.5.1   Main arguments of the parties ............................................................................. 246  
7.4.5.2   Assessment by the Panel .................................................................................... 246  
8   CONCLUSIONS AND RECOMMENDATIONS ............................................................... 246  
APPENDIX 1. – ARGENTINA'S SCHE DULE OF SPECIFIC COMMITMENTS 
(GATS/SC/4) OF 15 APRIL 1994 .................................................................................. 249  
 
 WT/DS453/R 
 
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  LIST OF ANNEXES 
ANNEX A 
WORKING PROCEDURES OF THE PANEL 
Contents Page 
Annex A Working Procedures of the Panel A-1 
ANNEX B 
ARGUMENTS OF THE PARTIES 
PANAMA 
Contents Page 
Annex B-1 First part of the executive su mmary of the arguments of Panama B-2 
Annex B-2 Second part of the executive summary of the arguments of Panama B-16 
 
 
ARGENTINA 
Contents Page 
Annex B-3 First part of the executive su mmary of the arguments of Argentina B-31 
Annex B-4 Second part of the executive summary of the arguments of Argentina B-44 
ANNEX C 
ARGUMENTS OF THIRD PARTIES 
Contents Page 
Annex C-1 Executive summary of the arguments of the Kingdom of Saudi Arabia C-2 
Annex C-2 Executive summary of the arguments of Brazil C-4 
Annex C-3 Executive summary of the arguments of the United States C-6 
Annex C-4 Executive summary of the arguments of the European Union C-11 
 WT/DS453/R 
 
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  CASES CITED IN THIS REPORT 
Short title Full case title and citation 
Argentina – Hides and Leather Panel Report, Argentina – Measures Affecting th e Export of Bovine Hides and 
Import of Finished Leather , WT/DS155/R and Corr.1, adopted 
16 February 2001 
Argentina – Import Measures Appellate Body Reports, Argentina – Measures Affecting the Importation of 
Goods , WT/DS438/AB/R / WT/DS444/AB /R / WT/DS445/AB/R, adopted 
26 January 2015 
Argentina – Import Measures Panel Reports, Argentina – Measures Affectin g the Importation of Goods , 
WT/DS438/R and Add.1 / WT/DS444/R and Add.1 / WT/DS445/R and Add.1, 
adopted 26 January 2015, as modified (WT/DS438/R) and upheld 
(WT/DS444/R / WT/DS445/R) by Appellate Body Reports WT/DS438/AB/R / WT/DS444/AB/R / WT/DS445/AB/R 
Argentina – Textil es and Apparel  Appellate Body Report, Argentina – Measures Affect ing Imports of Footwear, 
Textiles, Apparel and Other Items , WT/DS56/AB/R and Corr.1, adopted 
22 April 1998 
Australia – Salmon  Appellate Body Report, Australia – Measures Affecting Importation of 
Salmon , WT/DS18/AB/R, adopted 6 November 1998 
Brazil - Retreaded Tyres Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded 
Tyres , WT/DS332/AB/R, adopted 17 December 2007 
Canada — Aircraft  Appellate Body Report, Canada – Measures Affecting the Export of Civilian 
Aircraft , WT/DS70/AB/R, adopted 20 August 1999 
Canada — Autos  Appellate Body Report, Canada – Certain Measures Affecting the Automotive 
Industry , WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000 
Canada — Autos  Panel Report, Canada – Certain Measures Affe cting the Automotive Industry , 
WT/DS139/R, WT/DS142/R, adopted 19 June 2000, as modified by Appellate Body Report WT/DS139/AB/R, WT/DS142/AB/R 
Canada — Periodicals  Appellate Body Report, Canada – Certain Measures Concerning Periodicals , 
WT/DS31/AB/R, adopted 30 July 1997 
Canada — Wheat Exports and 
Grain Imports Appellate Body Report, Canada – Measures Relating to Exports of Wheat and 
Treatment of Imported Grain , WT/DS276/AB/R, adopted 27 September 2004  
Canada – Wheat Exports and 
Grain Imports  Panel Report, Canada – Measures Relating to Exports of Wheat and 
Treatment of Imported Grain , WT/DS276/R, adopted 27 September 2004, 
upheld by Appellate Body  Report WT/DS276/AB/R 
Chile — Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products , WT/DS207/AB/R, adopted 
23 October 2002 
China — Auto Parts Panel Reports, China – Measures Affecting Imports of Automobile Parts , 
WT/DS339/R, Add.1 and Add.2 / WT/DS340/R, Add.1 and Add.2 / 
WT/DS342/R, Add.1 and Add.2, adopted 12 January 2009, upheld 
(WT/DS339/R) and as modified (WT/DS340/R / WT/DS342/R) by Appellate 
Body Reports WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R 
China — Electronic Payment 
Services Panel Report, China – Certain Measures A ffecting Electronic Payment 
Services , WT/DS413/R and Add.1, adopted 31 August 2012 
China — Publications and 
Audiovisual Products Panel Report, China – Measures Affecting Trad ing Rights and Distribution 
Services for Certain Publications an d Audiovisual Entertainment Products , 
WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by 
Appellate Body Report WT/DS363/AB/R 
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 WT/DS453/R 
 
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  Short title Full case title and citation 
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 
Colombia — Ports of Entry Panel Report, Colombia – Indicative Prices and Restrictions on Ports of 
Entry , WT/DS366/R and Corr.1, adopted 20 May 2009 
Dominican Republic – Import 
and Sale of Cigarettes Appellate Body Report, Dominican Republic – Measures Affecting the 
Importation and Internal Sale of Cigarettes , WT/DS302/AB/R, adopted 
19 May 2005 
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 
EC — Asbestos  Appellate Body Report, European Communities – Measures Affecting 
Asbestos and Asbestos -Containing Products , WT/DS135/AB/R, adopted 
5 April 2001 
EC — Asbestos  Panel Report, European Communities – Measur es 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 
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 
EC — Bananas III (Ecuador)  Panel Report, European Communities – Regime  for the Importation, Sale 
and Distribution of Banana s, Complaint by Ecuador , WT/DS27/R/ECU, 
adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R 
EC – Bananas III (US)  Panel Report, European Communities – Regime  for the Importation, Sale 
and Distribution of Bananas, Complaint by the United States , 
WT/DS27/R/USA, adopted 25 September 1997, as modified by Appellate 
Body Report WT/DS27/AB/R 
EC — Bananas III 
(Guatemala and Honduras)  Panel Report, European Communities – Regime  for the Importation, Sale 
and Distribution of Bananas, Co mplaint by Guatemala and Honduras , 
WT/DS27/R/GTM, WT/DS27/R/HND, adopted 25 September 1997, as modified by Appellate Bo dy Report WT/DS27/AB/R 
EC — Bananas III (Mexico)  Panel Report, European Communities – Regime  for the Importation, Sale 
and Distribution of Bana nas, Complaint by Mexico , WT/DS27/R/MEX, 
adopted 25 September 1997, as modified by Appellate Body Report 
WT/DS27/AB/R 
EC — Commercial Vessels Panel Report, European Communities – Meas ures Affecting Trade in 
Commercial Vessels , WT/DS301/R, adopted 20 June 2005 
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 
EC — Tariff Preferences Panel Report, European Communities – Conditio ns for the Granting of Tariff 
Preferences to Developing Countries , WT/DS246/R, adopted 20 April 2004, 
as modified by Appellate Body Report WT/DS246/AB/R 
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding 
Portland Cement from Mexico , WT/DS60/AB/R, adopted 25 November 1998 
India – Autos Panel Report, India – Measures Affecting the Automotive Sector , 
WT/DS146/R, WT/DS175/R, and Corr.1, adopted 5 April 2002 
India – Quantitati ve Restrictions Panel Report, India – Quantitative Restrictions  on Imports of Agricultural, 
Textile and Industrial Products , WT/DS90/R, adopted 22 September 1999, 
upheld by Appellate Body  Report WT/DS90/AB/R 
Japan – Alcoholic Beverages II Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996 WT/DS453/R 
 
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  Short title Full case title and citation 
Korea — Various Measures on 
Beef Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled 
and Frozen Beef , WT/DS161/AB/R, WT/DS169/AB/R, adopted 
10 January 2001 
Korea – Various Measures on 
Beef Panel Report, Korea – Measures Affecting Im ports of Fresh, Chilled and 
Frozen Beef , WT/DS161/R, WT/DS169/R, adopted 10 January 2001, as 
modified by Appellate Body Report WT/DS161/AB/R, WT/DS169/AB/R 
Mexico – Taxes on Soft Drinks Appellate Body Report,  Mexico – Tax Measures on  Soft Drinks and Other 
Beverages , WT/DS308/AB/R, adopted 24 March 2006 
Mexico – Telecoms Panel Report, Mexico – Measures Affecting Telecommunications Services , 
WT/DS204/R, adopted 1 June 2004 
Thailand – Cigarettes 
(Philippines) Appellate Body Report, Thailand – Customs and Fiscal Measures on 
Cigarettes from the Philippines , WT/DS371/AB/R, adopted 15 July 2011 
US — Carbon Steel  Appellate Body Report, United States – Countervai ling Duties on Certain 
Corrosion-Resistant Carbon Stee l Flat Products from Germany , 
WT/DS213/AB/R and Corr.1, adopted 19 December 2002 
US – Clove Cigarettes Appellate Body Report, United States – Measures Affecting the Production 
and Sale of Clove Cigarettes , WT/DS406/AB/R, adopted 24 April 2012 
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 
US – Continued Suspension Appellate Body Report, United States – Continued Suspension of Obligations 
in the EC – Hormones Dispute , WT/DS320/AB/R, adopted 
14 November 2008 
US – COOL Appellate Body Reports, United States – Certain Country of Origin Labelling 
(COOL) Requirements , WT/DS384/AB/R / WT/DS386/AB/R, adopted 
23 July 2012 
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 
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 
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border 
Supply of Gambling and Betting Services , WT/DS285/AB/R, adopted 
20 April 2005 
US – Gambling Panel Report, United States – Measures Affecting the Cross-Border Supply of 
Gambling and Betting Services , WT/DS285/R, adopted 20 April 2005, as 
modified by Appellate Bo dy Report WT/DS285/AB/R 
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R, adopted 20 May 1996 
US – Offset Act 
(Byrd Amendment) Appellate Body Report, United States – Continued Dumping and Subsidy 
Offset Act of 2000 , WT/DS217/AB/R, WT/DS234/AB/R, adopted 
27 January 2003 
US — Poultry (China) Panel Report, United States – Certain Measures  Affecting Imports of Poultry 
from China , WT/DS392/R, adopted 25 October 2010 
US — Section 211 Appropriations  
Act Appellate Body Report, United States – Section 211 Omnibus Appropriations 
Act of 1998 , WT/DS176/AB/R, adopted 1 February 2002 
US — Shrimp  Appellate Body Report, United States – Import Proh ibition of Certain Shrimp 
and Shrimp Products , WT/DS58/AB/R, adopted 6 November 1998 
US - Shrimp (Article 21.5 - 
Malaysia)  Appellate Body Report, United States – Import Proh ibition of Certain Shrimp 
and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia , 
WT/DS58/AB/RW, adopted 21 November 2001 
US – Shrimp (Thailand) Panel Report, United States – Measures Relating to Shrimp from Thailand , 
WT/DS343/R, adopted 1 August 2008, as modified by Appellate Body Report 
WT/DS343/AB/R / WT/DS345/AB/R WT/DS453/R 
 
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  Short title Full case title and citation 
US – Softwood Lumber IV Appellate Body Report, United States – Final Countervailing Duty 
Determination with Respect to Ce rtain Softwood Lumber from Canada , 
WT/DS257/AB/R, adopted 17 February 2004 
US — Tuna II (Mexico) Appellate Body Report, United States – Measures Concerning the 
Importation, Marketing and Sale  of Tuna and Tuna Products , 
WT/DS381/AB/R, adopted 13 June 2012 
US — Upland Cotton Panel Report, United States – Subsidies on Upland Cotton , WT/DS267/R, 
Add.1 to Add.3 and Corr.1, adopted 21 March 2005, as modified by Appellate Body Report WT/DS267/AB/R 
US – Wool Shirts and Blouses  Appellate Body Report, United States – Measure A ffecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R, adopted 23 May 1997, 
and Corr.1 
US – Zeroing (EC) 
(Article 21.5 – EC) Appellate Body Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") – Recourse to Article 21.5 of the DSU by the European Communities , WT/DS294/AB/RW and Corr.1, 
adopted 11 June 2009 
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 
 WT/DS453/R 
 
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  EXHIBITS REFERRED TO IN THIS REPORT 
Exhibit Short title Full title 
ARG-5 OECD, Harmful Tax 
Competition – An Emerging Global Issue  (1998)   OECD, Harmful Tax Competition – An Emerging Global 
Issue, 1998 
ARG-6 OECD, Towards Global Tax 
Co-operation (2000) OECD, Towards Global Tax Co-operation. Report to the 
2000 Ministerial Council Meeting and Recommendations 
by the Committee on Fiscal Affairs. Progress in 
Identifying and Eliminating Harmful Tax Practices 
ARG-7 OECD, 2001 Report OECD, The OECD's Project on Harmful Tax Practices: 
The 2001 Progress Report 
ARG-8 Note from the Minister of the 
Economy and Finance of 
Panama to the 
Secretary-General of the OECD 
(2002) Note from the Minister of the Economy and Finance of 
Panama to the Secretary-General of the OECD, 
15 April 2002 
ARG-9 OECD, 2004 Report OECD, The OECD's Project on Harmful Tax Practices: 
The 2004 Progress Report 
ARG-10 Global Forum, A Process for 
Achieving a Global Level 
Playing Field (2004) OECD, A Process for Achievin g a Global Level Playing 
Field, Global Forum on Taxation, Berlin, 3-4 June 2004 
ARG-14 G-20, Declaration, Summit on 
Financial Markets and the World Economy (2008) G-20, Declaration, Summit on Financial Markets and 
the World Economy, 15 November 2008 
ARG-15 G-20, Leader's Statement 
(2009) G-20, Leader's Statement, The Pittsburgh Summit, 
24-27 September 2009 
ARG-17 OECD, Global Forum, Moving 
Forward on the Global Standards of Transparency and Exchange of Information for 
Tax Purposes (2009) OECD, Global Forum, Moving Forward on the Global 
Standards of Transparency and Exchange of Information for Tax Purposes, Mexico, 1-2 September 2009 
ARG-19 G-20, Cannes Summit Final 
Declaration: Building our 
Common Future  (2011) G-20, Cannes Summit Final Declaration: Building our 
Common Future: Renewed Collective Action for the 
Benefit of All, 2011 
ARG-20 G-20, Leaders Declaration 
(2012) G-20, Leaders Declaration, Los Cabos, Mexico, 2012 
ARG-21 Action Plan on Base Erosion 
and Profit Shifting (2013) OECD, Action Plan on Base Erosion and Profit Shifting, 
2013 
ARG-22 OECD, Addressing Base Erosion 
and Profit Shifting (2013) OECD, Addressing Base Erosion and Profit Shifting 
(BEPS), 2013 
ARG-24 OECD, Behind the Corporate 
Veil – Using Corp orate Entities 
for Illicit Purposes (2001) OECD, Behind the Corporat e Veil – Using Corporate 
Entities for Illicit Purposes, 2001 
ARG-25 FATF, The FATF 
Recommendations (2012) FATF, International Standards on Combating Money 
Laundering and the Financing of Terrorism & Proliferation, The FATF Recommendations, February 2012  
ARG-26 GAFISUD, Recomendaciones 
del GAFI (2012) GAFISUD, Estándares Internacionales sobre la Lucha 
contra el Lavado de Activos y el Financiamiento del 
Terrorismo y la Proliferación, Las Recomendaciones del 
GAFI, February 2012 
ARG-32 Law on concealment and 
laundering of money of criminal 
origin  Law No. 25.246 of 5 May 2000 on concealment and 
laundering of money of criminal origin  WT/DS453/R 
 
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  Exhibit Short title Full title 
ARG-36 Global Forum, Tax 
Transparency 2013 Global Forum on Transparency and Exchange of 
Information for Tax Purposes,  Tax Transparency 2013: 
Report on Progress, 2013 
ARG-40 Global Forum, Terms of 
Reference (2010) OECD, Global Forum on Transparency and Exchange of 
Information for Tax Purposes,  Terms of Reference to 
Monitor and Review Progress Towards Transparency and Exchange of Information for Tax Purposes, 2010 
ARG-41 OECD, Tax Co-operation 2009 
– Towards a level playing field OECD, Tax Co-operation 2009 – Towards a level playing 
field - 2009 Assessment by the Global Forum on 
Transparency and Exchange of Information 
ARG-44 AFIP,  Offshore companies – 
Fraudulent manœuvres and 
harmful tax planning  Federal Administration of  Public Revenue (AFIP), 
Sociedades Off-shore – Maniobras fraudulentas y 
planificación fiscal nociva  (Offshore companies – 
Fraudulent manœuvres and harmful tax planning), 2013 
ARG-47 SSN Resolution 
No. 38.284/2014 Resolution No. 38.284 of the National Insurance 
Supervisory Authority (SSN) of 21 March 2014 
ARG-64 IGJ Resolution No. 1/2014 General Resolution No. 1/2014 of the General Justice 
Inspectorate (IGJ) of 8 April 2014 
ARG-71 Communication "C" No. 65366 Communication "C" No. 65366 of the Central Bank of 
the Argentine Republic of 26 February 2014 
ARG-75 Communication "A" No. 5237 Communication "A" No. 5237 of the Central Bank of the 
Argentine Republic of 28 October 2011 
ARG-85 G-20 Statement on 
Transparency and Exchange of 
Information for Tax Purposes 
(2004) G-20 Statement on Transparency and Exchange of 
Information for Tax Purposes, 21 November 2004 
ARG-87 G-20 Declaration, Saint 
Petersburg Summit (2013) G-20 Declaration,  Saint Petersburg Summit, 
5-6 September 2013 
ARG-88 ASSAL, General solvency 
criteria – Reinsurance 
operations  Latin American Association of Insurance Supervisors 
(ASSAL), Criterios generales de solvencia – 
Operaciones de reaseguro  (General solvency criteria – 
Reinsurance operations), August 1999 
ARG-90 G-20 Toronto Summit 
Declaration (2010) G-20 Toronto Summit Declaration, 26-27 June 2010 
ARG-94 ITIO, Leveling the playing field 
(2005) International Trade and Investment Organization 
(ITIO), Leveling the playing field, OECD Global Tax 
Forum, Melbourne, 15-16 November 2005 
ARG-114 Communiqué, Meeting of 
Finance Ministers and Central Bank Governors (2009) Communiqué, Meeting of Fina nce Ministers and Central 
Bank Governors, United Kingdom, 2009 
ARG-128 Meeting of G-20 Finance 
Ministers and Central Bank 
Governors (2014) Meeting of G-20 Finance Ministers and Central Bank 
Governors, Cairns, 20-21 September 2014 
ARG-135 SSN Resolution 
No. 38.708/2014 Resolution No. 38.708 of the National Insurance 
Supervisory Authority (SSN) and the Annex thereto: General Regulations for Insurance Activities (RGAA), of 6 November 2014 
ARG-140 IAIS, Systemic Risk and the 
Insurance Sector (2009) International Association of Insurance Supervisors 
(IAIS),  Systemic Risk and the Insurance Sector, 
25 October 2009 
PAN-1 RIG  (Implementing Regulations 
for the Gains Tax Law)   Decree No. 1344 of 19 November 1998 establishing the 
Implementing Regulations for the Gains Tax Law 
PAN-19 Argentina - Schedule of 
Specific Commitments Argentina - Schedule of Specific Commitments, 
GATS/SC/4, 15 April 1994 WT/DS453/R 
 
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  Exhibit Short title Full title 
PAN-35 Mapfre Foundation, An 
Introduction to  Reinsurance MAPFRE Foundation, An Introduction to Reinsurance, 
https://www.mapfre.com/doc umentacion/publico/i18n/
catalogo_imagenes/grupo.cmd?path=1074274 (http://www.mapfre.com/documentacion/publico/i18n/
catalogo_imagenes/grupo.cmd?path=1062314 )   
PAN-47 Note by the WTO Secretariat 
on economic needs tests 
(2001) Note by the WTO Secretariat on economic needs tests, 
S/CSS/W/118, 30 November 2001 
PAN-83 Constitutional Principles on Tax 
Matters Principios de Derecho Constitucional Argentino en 
Materia Tributaria (Principles of Argentine Constitutional 
Law on Tax Matters)  
PAN-3 / ARG-35 Decree No. 589/2013 Decree No. 589 of the Federal Administration of Public 
Revenue (AFIP) of 27 May 2013 
PAN-3 / ARG-37 AFIP Resolution 
No. 3.576/2013 General Resolution No. 3.576 of the Federal 
Administration of Public Revenue (AFIP) of 27 December 2013 
PAN-4 / ARG-42 Gains Tax Law (LIG) Law No. 20.628 on Gains Tax of 29 December 1973 
PAN-9 / ARG-45 Law on Tax Procedure (LPT) Law No. 11.683 on Tax Procedure of 13 July 1998 
PAN-34 / ARG-43  Law on Commercial Companies 
(LSC) Law No. 19.550 on Commercial Companies of 
3 April 1972 
PAN-36 / ARG-27 SSN Resolution 
No. 35.615/2011 Resolution No. 35.615 of the National Insurance 
Supervisory Authority (SSN) of 11 February 2011 
PAN-40 / ARG-48 SSN Resolution 
No. 35.794/2011 Resolution No. 35.794 of the National Insurance 
Supervisory Authority (SSN) of 19 May 2011 
PAN-45 / ARG-39 2001 Guidelines Guidelines for the Scheduling of Specific Commitments 
under the General Agreement on Trade in Services (GATS) - Adopted by the Council for Trade in Services on 23 March 2001, S/L/92 
PAN-46 / ARG-79 1993 Guidelines Scheduling of Initial Commitments in Trade in Services: 
Explanatory Note, MTN.GNS/W/164, 3 September 1993 
PAN-48 / ARG-49 Capital Market Law Law No. 26.831 on the Capital Market of 
27 December 2012 
PAN-58 / ARG-50 CNV Rules 2013 Rules of the National Securities Commission, New Text 
2013 (Title XI), approved by means of General 
Resolution No. 622 
PAN-62 / ARG-33 IGJ Resolution No. 7/2005 General Resolution No. 7 of the General Justice 
Inspectorate (IGJ) of 25 August 2005 (Book III, Title III) 
PAN-67 / ARG-69 Communication "A" No. 4662 Communication "A" No. 4662 of the Central Bank of the 
Argentine Republic of 11 May 2007 
PAN-68 / ARG-70 Communication "A" No. 4692 Communic ation "A" No. 4692 of the Central Bank of the 
Argentine Republic of 31 July 2007 
PAN-71 / ARG-31 Communication "A" No. 4940 Communication "A" No. 4940 of the Central Bank of the 
Argentine Republic of 12 May 2009 WT/DS453/R 
 
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  ABBREVIATIONS USED IN THIS REPORT 
Abbreviation Description 
AEOI Automatic Exchange of Information  
AFIP Federal Public Revenue Administration 
AML/CFT Anti-money laundering/Combating the financing of terrorism 
ASSAL Association of Latin American Insurance Supervisors 
BCRA Central Bank of the Argentine Republic 
BEPS Base Erosion and Profit Shifting   
CDD Customer due diligence 
CNV National Securities Commission 
Cooperative country Country cooperatin g for tax transparency purposes  
DSB Dispute Settlement Body 
DSU Understanding on Rules and Procedures  Governing the Settlement of Disputes 
EOIR Exchange of information on request  
FATF Financial Action Task Force 
FSRB FATF-style regional body  
G-20 Group of Twenty 
GAFILAT Financial Action Task Fo rce of Latin America  
GATS General Agreement on Trade in Services 
GATT 1994 General Agreement on Tariffs and Trade 1994  
Global Forum Global Forum on Transparency an d Exchange of Information for Tax Purposes  
IAIS International Association of Insurance Supervisors 
ICJ International Court of Justice 
IGJ General Justice Inspectorate 
IMF International Monetary Fund 
IOSCO Organization of Securities Commissions  
LIG Gains Tax Law  
LPT Law on Tax Procedure 
LSC Law on Commercial Companies 
MFN Most Favoured Nation 
MULC Single Free Foreign Exchange Market  
Non-cooperative country Country not cooperating for tax transparency purposes  
N.T. 2013 New Text of 2013 CNV Rules  
OECD Organisation for Economic Co-operation and Development 
PRP Peer review process  
RAE Real Academia Española  [Spanish Royal Academy] 
RIG Regulation to the Gains Tax Law  
SSN National Insurance Supervisory Authority  
TBT Agreement Agreement on Technical Barriers to Trade 
WTO World Trade Organization 
Vienna Convention Vienna Convention on the Law of Treaties  
 WT/DS453/R 
 
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  1  INTRODUCTION 
1.1  Complaint by Panama 1.1.  On 12 December 2012, Panama requested consultations with Argentina pursuant to Article 4 
of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), 
Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and Article XXII of 
the General Agreement on Trade in Services (GATS) with respect to the measures and claims set out below.
1 
1.2.  Consultations were held in Geneva on 5 February 2013 but failed to resolve the dispute.2 
1.2  Panel establishment and composition 1.3.  On 13 May 2013, Panama requested the esta blishment of a panel pursuant to Article 6 
of the DSU, with standard terms of reference.
3 At its meeting on 25 June 2013, 
the Dispute Settlement Body (DSB) established a panel pursuant to the request of Panama in 
document WT/DS453/4, in accordance with Article 6 of the DSU.4 
1.4.  The Panel's terms of reference are the following: 
To examine, in the light of the relevant pr ovisions of the covered agreements cited by 
the parties to the dispute, the matter refe rred to the DSB by Panama in document 
WT/DS453/4 and to make such findings as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements.5 
1.5.  On 30 October 2013, Panama requested the Director-General to determine the composition 
of the Panel, pursuant to Article 8.7 of the DSU. On 11 November 2013, the Director-General 
accordingly composed the Panel as follows: 
Chairperson:  Mr Pierre Pettigrew 
Members: Mr Gonzalo de las Casas 
Mr Rodrigo Valenzuela 
1.6.  Australia, Brazil, China, Ecuador, the Eu ropean Union, Guatemala, Honduras, India, Oman, 
the Kingdom of Saudi Arabia, Singapore, and the United States notified their interest in participating in the Panel proceedings as third parties.
6 
1.3  Panel proceedings 
1.7.  On 12 December 2013, after consultation with the parties, the Panel adopted its Working 
Procedures7 and timetable, which were subsequently revised on 24 March and 23 May 2014, 
respectively. 
1.8.  The Panel held a first substantive meetin g with the parties on 23 and 24 September 2014. 
A session with the third parties took place on 24 September 2014. The Panel held a second substantive meeting with the parties on 27 and 28 January 2015. On 27 March 2015, the Panel 
issued the descriptive part of its Report to the pa rties. The Panel issued its Interim Report to the 
parties on 22 May 2015. The Panel issued its Final Report to the parties on 30 June 2015. 
                                               
1 Panama's request for consultations (WT/DS453/1). 
2 Panama's request for the establishment of a panel (WT/DS453/4). 
3 Panama's request for the establishment of a panel. 
4 See the Minutes of the Meeting of the Dispute Settlement Body held in the Centre William Rappard on 
25 June 2013 (WT/DSB/M/333). 
5 Constitution of the Panel established at the request of Panama (WT/DS453/5), para. 2. 
6 Constitution of the Panel establishe d at the request of Panama, para. 5. 
7 See the Working Procedures of the Panel in Annex A. WT/DS453/R 
 
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  2  FACTUAL ASPECTS 
2.1  Introduction 2.1.  This dispute concerns eight financial, taxa tion, foreign exchange and registration measures 
imposed by Argentina, mostly
8 on services and service suppliers from countries which Argentina 
terms "countries not cooperating for tax transparency purposes"9 (hereinafter, non-cooperative 
countries).10 The classification of a country as a "country cooperating for tax transparency 
purposes" (hereinafter, cooperative country) is provided for in Decree No. 589/2013.11 
2.2.  In this section of the Report, the Panel will begin by describing Decree No. 589/2013, which 
is the common denominator for the eight measures challenged by Panama. The eight measures at issue will then be described, together with their broader factual context, which includes the relevant Argentine legislation applicable to cooperative countries, the tax transparency standards 
of the Global Forum on Transparency and Exchange  of Information for Tax Purposes (hereinafter, 
the Global Forum) and the recommendations of the Financial Action Task Force (FATF). 
2.3.  Where the parties disagree on any factual i ssue that needs to be resolved, the Panel will 
address it in its findings. 
2.2  Decree No. 589/2013 2.4.   Decree No. 589/2013 is the key element of  the eight measures challenged by Panama 
inasmuch as they all refer to services and service suppliers
12 of countries not classified as 
cooperative under the said Decree.13 
2.5.  Decree No. 589/2013, which is not one of the measures at issue, lays down the requirements 
for Argentina to grant a country, dominion, jurisdiction, territory, associate State or special tax 
regime the status of cooperative country.14 Article 1 of the Decree stipulates as follows in 
relevant part: 
Article 1 – ... 
Countries, dominions, jurisdictions, territories, associate States or special tax regimes 
which have signed with the Government of the ARGENTINE REPUBLIC an agreement on exchange of tax information or a convention for the avoidance of international 
double taxation with a broad information exchange clause shall be considered 
cooperative for tax transparency purposes, provided that there is an effective exchange of information. 
This status shall lapse in cases where the signed agreement or convention is 
denounced or becomes inoperative for any reason of nullity or termination governing 
international agreements or if it is found that there is a lack of effective exchange of information. 
A country may also be recognized as cooperative for tax transparency purposes if the 
government concerned has initiated the required negotiations with the Government of the ARGENTINE REPUBLIC with a view to signing an agreement on exchange of tax 
                                               
8 Panama has claimed that two of the eight measures at issue (measures 2 and 3 described below) also 
affect trade in goods. 
9 The Panel notes that, in its arguments, Panama refers to "beneficiary countries" and "excluded 
countries" when referring to what Argentina calls "c ooperative countries" and "n on-cooperative countries", 
respectively. The Panel has, however, decided to use the terminology employed in Decree No. 589/2013. 
10 Certain requirements in measure 5 (requirements relating to reinsura nce services) apply to all foreign 
countries, whether cooperative or non-cooperative. 
11 Decree No. 589 of the Federal Public Revenue Administration of 27 May 2013 (Decree No. 589/2013), 
(Exhibits PAN-3 / ARG-35). 
12 See footnote 8 above. 
13 See footnote 10 above. 
14 Decree No. 589/2013 replaces the references to "countries with low or no taxes" contained in the 
Gains Tax Law and in the Regulation thereto with "count ries not considered 'cooperative for tax transparency 
purposes'". See Article 1 of Decree No. 589/2013, (Exhibits PAN-3 / ARG-35). WT/DS453/R 
 
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  information or a convention for the avoidance of international double taxation with a 
broad information exchange clause. 
The agreements and conventions referred to in this Article shall as far as possible 
comply with the international standards on transparency adopted by the Global Forum 
on Transparency and Exchange of Information for Tax Purposes so that by virtue of 
the application of their domestic rules, the respective countries, dominions, jurisdictions, territories, associate States or special tax regimes with which such 
agreements or conventions have been signed may not invoke banking, stock market 
or any other form of secrecy in response to specific requests for information from the ARGENTINE REPUBLIC. 
The FEDERAL PUBLIC REVENU E ADMINISTRATION, an autonomous body within the 
MINISTRY OF THE ECONOMY AND PUBLIC FINANCE, shall establish the criteria for 
determining whether or not there is effective exchange of information and the necessary requirements for initiating negotiations on the signing of the 
aforementioned agreements and conventions. 
2.6.  Article 2 of Decree No. 589/2013 empowers the Federal Public Revenue Administration (AFIP) 
"to draw up the list of countries, dominions, jurisdictions, territories, associate States and special 
tax regimes considered cooperative for tax transparency purposes, to publish it on its website 
(http://www.afip.gob.ar) and to keep the publication up to date in accordance with the provisions 
of this Decree".
15 According to Argentina, this list is updated annually at the beginning of the fiscal 
year.16 
2.7.  At the time of issuing this Report to the pa rties, the list of countries considered by Argentina 
to be cooperative continues to be the one published on the AFIP website on 1 January 2014 pursuant to AFIP's General Resolution No. 3.576/2013
17 and comprises the following countries: 
Albania, Andorra, Angola, Anguilla, Armenia, Arub a, Australia, Austria, Azerbaijan, Bahamas, 
Belgium, Belize, Bermuda, Bolivia, Brazil, British Virgin Islands, Canada, Cayman Islands, Chile, China, Colombia, Costa Rica, Croatia, Cuba, Curaçao, Czech Republic, Denmark, Dominican 
Republic, Ecuador, El Salvador, Estonia, Faroe Isla nds, Finland, France, Georgia, Germany, Ghana, 
Greece, Greenland, Guatemala, Guernsey, Haiti, Holy See, Honduras, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Ja maica, Japan, Jersey, Kazakhstan, Kenya, Republic 
of Korea, Kuwait, Latvia, Liechtenstein, Lit huania, Luxembourg, Macao, Macedonia, Malta, 
Mauritius, Mexico, Moldova, Monaco, Monten egro, Montserrat, Morocco, Netherlands, New 
Zealand, Nicaragua, Nigeria, Norway, Panama, Paraguay, Peru, Philippines, Poland, Portugal, 
Qatar, Romania, Russia, San Marino, Saudi Arabia , Singapore, Sint Maarten, Slovakia, Slovenia, 
South Africa, Spain, Sweden, Switzerland, T unisia, Turks and Caicos Islands, Turkey, 
Turkmenistan, Ukraine, United Arab Emirates , United Kingdom, United States, Uruguay, 
Venezuela, and Viet Nam. 
2.8.  Pursuant to Article 1 of AFIP Resolution No. 3.576/2013, these cooperative countries are 
classified into three categories: (a) cooperative countries which have signed a double taxation convention or an information exchange agreement, with a positive assessment of effective exchange of information; (b) cooperative countries with which a double taxation convention or 
information exchange agreement has been signed but it has not been possible to assess effective 
exchange; and (c) cooperative countries with which the process of negotiating or ratifying a double taxation convention or information ex change agreement has been initiated.
18 
                                               
15 Article 2(b) of Decree No. 589/2013, (Exhibits PAN-3 / ARG-35). 
16 Argentina's response to Panel questions No. 9(b) , para. 14, and No. 10(b)(i i) and opening statement 
at the second meeting of the Panel, para. 41. At the second substantive meeting, Argentina stated that "[i]n view of Panama's current position of not negotiat ing an agreement with Argent ina, the AFIP is reviewing 
whether to maintain this country's [P anama's] status as a country cooper ating for tax transparency purposes. 
This review is part of the ongoing adjustment to include and remove co untries from the list of cooperative 
countries in this year's update, in accordance with the criteria laid down in the legislation". See Argentina's opening statement at the second meeting of the Panel, paras. 42 and 43. 
17 General Resolution No. 3.576 of the Federal Public Revenue Administration (AFIP Resolution 
No. 3.576/2013), of 27 December 2013, (Exhibits PAN-3 / ARG-37). 
18 AFIP Resolution No. 3.576/2013. (Exhibits PAN-3 / ARG-37). WT/DS453/R 
 
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  2.3  The measures at issue 
2.3.1  Introduction 2.9.  Panama challenges the following eight measures in this dispute
19: 
Measure No. Description 
1 Tax treatment in the collection of gains tax on  certain transactions involving non-cooperative 
countries (hereinafter withholding tax on payments of interest  or remuneration)  
2 Tax treatment imposed on entry of funds fro m non-cooperative countries (hereinafter 
presumption of unjustified increase in wealth) 
3 Valuation of transactions with persons from non-cooperative countries 
(hereinafter transaction valuation based on transfer prices) 
4 Criteria for applying deductions (hereinafter payment received rule20 for the allocation of 
expenditure)  
5 Measures affecting trade in rein surance and retrocession services21 
(hereinafter requirements rela ting to reinsurance services) 
6 Measures affecting trade in financial instrument s (hereinafter requirem ents for access to the 
Argentine capital market)  
7 Requirements for the registration  of companies, branches and shareholders of certain foreign 
service suppliers (hereinafter requiremen ts for the registration of branches)  
8 Measures affecting the repatriation of investme nts (hereinafter foreign exchange authorization 
requirement)  
 
2.10.  The eight measures challenged by Panama and described below reflect the distinction between cooperative and non-cooperative co untries established by Decree No. 589/2013.
22 For 
example, the withholding tax on payments of interest or remuneration (measure 1), the 
presumption of unjustified increase in wealth (measure 2), transaction valuation based on transfer prices (measure 3) and the payment received rule  for the allocation of expenditure (measure 4) 
contain explicit references to "jurisdictions wi th low or no taxes", a reference that has been 
replaced by "jurisdictions not considered 'cooperative for tax transparency purposes'", pursuant to Decree No. 589/2013. In the case of measure 2,  whose legal basis is the unnumbered article 
following Article 18 of the Law on Tax Procedure (LPT), there is a specific link to the Gains Tax Law 
(LIG) in the text of this provision. 
2.11.  The requirements relating to reinsurance services (measure 5) and access to the Argentine 
capital market (measure 6) contain a specific reference to Decree No. 589/2013. As regards the 
requirements for the registration of branches  (measure 7), Article 192 of IGJ Resolution 
No. 7/2005 of the General Justice Inspectorate (IGJ) refers to "jurisdictions considered to have low or no taxes". The wording of this Article was up dated by Article 1 of IGJ Resolution No. 1/2014, 
which introduces the expression "countries, dominions, jurisdictions, territories, associate States 
and special tax regimes considered non-cooperative for tax transparency purposes".
23 Lastly, the 
foreign exchange authorization requirement (m easure 8) in Communication "A" 4940 of the 
Central Bank of the Argentine Republic (BCRA) refe rs to "dominions, jurisdictions, territories or 
associate States included in the list in Decree No. 1.344/98 regulating the Gains Tax Law 
                                               
19 Panama's request for the establishment of panel. 
20 Argentina also refers to this rule as the "pay ment received rule". See Argentina's first written 
submission, Explanatory Annex No. 1, para. 109. Panama, for its part, refers to the measure in abbreviated 
form as the rule on "deduction of costs at the time of payment". See Panama's second written submission, 
paras. 2.498, 2.524, 2.525-2.527, 2.533, 2.535, 2.540, 2.542, 2.544 and 2.571. 
21 The parties disagree on the inclusion of retrocession services within the scope of measure 5. The 
Panel will address this matter in its findings. 
22 We recall that certain requirem ents in measure 5 (requirements re lating to reinsurance services) 
apply to all foreign countries, whether cooperativ e or non-cooperative. See footnote 10 above. 
23 General Resolution No. 1/2014 of the General Just ice Inspectorate, of 8 April 2014 (IGJ Resolution 
No. 1/2014), (Exhibit ARG-64). WT/DS453/R 
 
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  No. 20.628 and amendments thereto". This expressi on was replaced by means of Communication 
"C" 65366 of the BCRA, which introduces the terminology specific to Decree No. 589/2013.24 
2.12.  Below we shall examine the eight measures at issue. 2.3.2  Measure 1: Withholding tax on pa yments of interest or remuneration 
2.13.  Measure 1 consists of a legal presumption that payments made to creditors
25 located in 
non-cooperative countries as consideration for the granting of credits or loans or the placement of funds abroad represent a net gain of 100% for the purpose of determining the tax base for gains 
tax. Argentina applies this measure pursuant to Article 93(c) of the LIG
26, which stipulates as 
follows in relevant part: 
When beneficiaries abroad are paid amounts under the headings indicated below, a 
net gain shall be presumed against any evidence to the contrary: 
(c) Interest or remuneration paid on credits, loans or placements of funds of any 
origin or type obtained abroad: 
1. Forty-three per cent (43%) when the borrower or loan or fund recipient is an 
entity governed by Law No. 21.526 or if the transactions involve the financing of 
imports of depreciable movables – except automobiles – provided by the suppliers. 
The presumption established in this section shall also apply if the borrower is one of 
the other persons covered by Article 49 of this Law, a natural person or undivided 
estate, provided that the creditor is a banking or financial entity based in a jurisdiction not considered to have no or low taxes
27 in accordance with the rules in this Law and 
its implementing regulations or in a jurisdiction that has signed an information 
exchange agreement with the Argentine Re public and also, by application of its 
domestic rules, may not involve banking, stock market or any other form of secrecy in response to request for information from the competent tax authority. The financial 
entities covered by this paragraph are thos e subject to supervision by the respective 
central bank or equivalent institution. 
The same treatment shall apply if the interest or remuneration consists of debt bonds 
presented in countries with which there is a reciprocal agreement on protecting 
investment, provided that their registration in the Argentine Republic, in accordance with the provisions of Law No. 23.576 and the amendments thereto, takes place within two (2) years following their issuance. 
2. One hundred per cent (100%) when the borrower or loan or fund recipient is a 
person covered by Article 49 of this Law, excluding the entities governed by Law No. 21.526 and amendments thereto, a natural person or undivided estate, and the 
creditor does not meet the conditio n and requirement specified in the 
second paragraph of the preceding section. 
2.14.  Accordingly, the rule presumes, against an y possibility of evidence to the contrary, a net 
gain in the case of interest or remuneration paid  on credits, loans or placements of funds of any 
origin or type obtained abroad. In order to determine the tax base for purposes of the gains tax, the rule determines the percentage to be applied according to whether the creditor
28 delivering the 
service to the Argentine consumer is located in a cooperative or non-cooperative country: (i) if the 
creditor is located in a cooperative country, the net gain is presumed to be 43%; (ii) if, on the 
                                               
24 Communication "C" No. 65366 of the Central Bank of the Argentine Republic, of 26 February 2014 
(Communication "C" No. 65366), (Exhibit ARG-71). 
25 Panama specifies that "[t]his category includes se rvices provided by banks or financial entities in 
[non-cooperative] countries to consumers in Argentin a which are not banking or financial entities". See 
Panama's first written submission, para. 4.9. See also first written submission, para. 4.10. 
26 Law No. 20.628 on Gains Tax, of 29 December 1973 (Gains Tax Law), (Exhibits PAN-4 / ARG-42). 
27 "Countries with low or no taxes" should be understood to mean non-cooperative countries. See 
footnote 14 above. 
28 See footnote 25 above. WT/DS453/R 
 
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  other hand, the creditor is located in a non-cooperative country, the presumed net gain is 100%. 
On these bases, Argentina applies a rate of 35% in both cases.29 
2.15.  The presumption of a net gain of 100% only applies when the recipient of the credit or loan 
or the investor of the funds is a person covered by Article 49 of the LIG, a natural person or an 
undivided estate, but not if it is a financial entity governed by Law No. 21.526.30 
2.16.  The measure applies to interest or remunera tion paid on credits, loans or placements of 
funds of any origin or type obtained abroad.31 Argentina points out that "[t]he compensation, cost 
recovery, commissions and similar payments which creditors may receive as a result of or when 
granting loans or credits or placing funds in the country are covered by the same regime as is applicable to the corresponding interest."
32 
2.3.3  Measure 2: Presumption of unjustified increase in wealth 
2.17.  Measure 2 consists of the presumption of unj ustified increase in wealth applicable to any 
entry of funds – for the benefit of Argentine taxpayers – from non-cooperative countries in the context of an ex officio determination of the taxable subject matter by the AFIP for the purpose of 
gains tax. Argentina applies this measure pursuant to the unnumbered article added after 
Article 18 of the Law on Tax Procedure (LPT).
33 This article provides as follows: 
In the case of funds from countries with low or no taxes34 - as indicated in Article 15 
of the Gains Tax Law (consolidated text of 1997 and amendments thereto) – 
irrespective of their nature or purpose or the type of transaction involved, it shall be considered that such funds constitute unjustified increases in wealth for the local borrower or recipient. 
Unjustified increases in wealth referred to in the preceding paragraph amounting to 
over TEN PER CENT (10%) in the form of  income disposed of or consumed as 
non-deductible expenditure, represent net gains during the financial year in which 
they occur, for the purposes of determining the gains tax and, where applicable, the 
basis for estimating the taxable transactions omitted from the respective marketing year in terms of value added and internal taxes. 
Notwithstanding the provisions in the pr eceding paragraphs, the Federal Public 
Revenue Administration shall consider as justified such entries of funds as are conclusively proven by the interested party to have originated from activities actually carried out by the taxpayer or by a third pa rty in those countries or from placements 
of duly declared funds. 
2.18.  This presumption of unjustified increase in wealth, therefore, affects gains "irrespective of 
their nature or purpose or the type of transact ion involved" and may be rebutted if the taxpayer 
"conclusively proves that the funds originated from  activities actually carried out by the taxpayer 
or by a third party in those countries or from placements of duly declared funds".
35 
                                               
29 Article 91 of the LIG, (Exhibits PAN-4 / ARG-42). 
30 We note that, in Panama's opinion, if the borrower is  an Argentine bank or financial entity, there is no 
difference in treatment pursuant to Article 93(c)(1), first sentence, of the LIG. See Panama's first written 
submission, footnote 68 and Exhibits PAN-4 / ARG-42. 
31 Pursuant to Article 91 of the LIG, Argentine natural or legal persons which pay taxable profits to 
beneficiaries abroad act as withholding agents for the tax.  For beneficiaries abroad, th e tax withheld is a single 
and final payment and fully discharges their ta x obligation. See Exhibits PAN-4 / ARG-42. 
32 Argentina's first written submission, Explanatory Annex No. 1.1, para. 14. 
33 Law No. 11.683, consolidated text of 1978, and amendments thereto, approved by Decree 
No. 821/1998 of 13 July 1998, published in the Official Journal of the Argentine Republic on 20 July 1998 (Law on Tax Procedure), (Exhibits PAN-9 / ARG-45). Panama refers to the Law on Tax Procedure (Law 
No. 11.683, consolidated text of 1978, and amendments thereto, approved by Decree No. 821/1998 of 13 July 1998) as Law No. 11.683 on Tax Procedure, of 13 July 1998. See Exhibits PAN-9 / ARG-45. 
34 "Countries with low or no taxes" should be understood to mean non-cooperative countries. See 
footnote 14 above. 
35 Unnumbered article added after Article 18 of the LPT, (Exhibits PAN-9 / ARG-45). WT/DS453/R 
 
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  2.3.4  Measure 3: Transaction valu ation based on transfer prices 
2.19.  Measure 3 consists of applying methods for valuing transactions based on transfer prices in 
order to determine the tax base for the gains tax payable by Argentine taxpayers. The measure provides that this valuation method applies to transactions between Argentine taxpayers
36 and 
persons from non-cooperative countries i rrespective of whether they are related.37 Argentina 
applies this measure pursuant to Article 8, fifth paragraph, and Article 15, second paragraph, of the LIG.
38 The relevant parts of these two provisions are reproduced below: 
Article 8 
Operations covered by this article that are conducted with natural or legal persons 
domiciled, incorporated or located in countries with low or no taxes39 shall not be 
considered as consistent with normal arm's-length market practices or prices, in which 
case the rules of the aforementioned Article 15 shall apply. 
Article 15 
Where stable institutions domiciled or located in the country or companies covered by 
subparagraphs (a) and (b) and trust funds referred to in the subparagraph added 
after subparagraph (d) of the first paragraph of Article 49, respectively, conduct transactions with natural or legal persons domiciled, incorporated or located in 
countries with low or no taxes
40, as referred to exhaustively in the regulations, such 
transactions shall not be considered to be in line with normal arm's-length market practices or prices. 
2.20.  Accordingly, in order to determine the net gain subject to gains tax of Argentine taxpayers' 
transactions between the latter and persons domiciled, incorporated or located in non-cooperative 
countries shall be valued following the rules and procedures for transfer prices between related parties. 
2.3.5  Measure 4: Payment received ru le for the allocation of expenditure 
2.21.  Measure 4 also concerns determination of the tax base for gains tax payable by Argentine 
taxpayers. In this instance, the measure consists of applying the rule of payment received when 
allocating expenditure for transactions between Argentine taxpayers and persons from 
non-cooperative countries. Argentina applies this measure pursuant to the last paragraph of Article 18 of the LIG
41, which provides as follows: 
In the case of outlays by local companies which result in profits of Argentine source 
for foreign persons or entities with which these companies are related or for persons 
or entities located, incorporated, based or domiciled in jurisdictions with low or no 
                                               
36 Specifically, the second paragraph of Article 15 of the LIG refers to "stable establishments domiciled 
or located in the country or companies covered by subpara graphs (a) and (b) and the trust funds referred to in 
the subparagraph added after subparagraph (d) of the firs t paragraph of Article 49". The companies covered by 
subparagraphs (a) and (b) are those which meet the following requirements: "(a) Having a genuine presence in the territory of residence, having then a commercial establishment where the business is managed and meeting the legal requirements on incorporation and registration and the submission of accounting statements. The assets, risks and functions assumed by the internat ional intermediary must be  commensurate with the 
volume of business; (b) their main activity must not co nsist of receiving unearned income or of intermediation 
in marketing goods from or to the Argentine Republic or with other members of the economically related 
group". With regard to the trust funds mentioned in the second paragraph of Article 15, the regulations mention "trust funds in which the trustor is a benefi ciary, except for financia l trust funds or where the 
trustor-beneficiary is a person covered by  Title V". See Exhibits PAN-4 / ARG-42. 
37 The measure concerns transactions with "natural or  legal persons domiciled, incorporated or located" 
in non-cooperative countries. See the seco nd paragraph of Article 15 of the LIG. 
38 Gains Tax Law, (Exhibits PAN-4 / ARG-42). 
39 "Countries with low or no taxes" should be understood to mean non-cooperative countries. See 
footnote 14 above. 
40 "Countries with low or no taxes" should be understood to mean non-cooperative countries. See 
footnote 14 above. 
41 Gains Tax Law, (Exhibits PAN-4 / ARG-42). WT/DS453/R 
 
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  taxes42, the allocation to the tax balance may only be made at the time of payment or 
in any of the cases covered by the sixth paragraph of this Article or, in their absence, if one of the situations indicated arises within the period allowed for submission of the sworn declaration that the respective outlay has been accrued. 
2.22.  Accordingly, outlays by Argentine entities which constitute profits of Argentine source for 
persons located, incorporated, based or domiciled in non-cooperative countries shall be allocated to the fiscal year in which payment for the transaction actually takes place (payment received 
rule). 
2.3.6  Measure 5: Requirements re lating to reinsurance services 
2.23.  Measure 5 consists of Argentina's imposition on foreign service suppliers and service 
suppliers of non-cooperative countries of requirements  that they must meet in order to be able to 
gain access to Argentina's reinsurance services market.
43 This measure is applied pursuant to SSN 
Resolution No. 35.615/201144, as indicated by Panama in its request for the establishment of a 
panel.45 
2.24.  SSN Resolution No. 35.615/201146 has been developed and amended on several occasions: 
(i) in May 2011, by means of Article 4 of SSN Resolution No. 35.794/201147, which develops 
point 19 of Annex I to SSN Resolution No. 35.615/2011; (ii) in March 2014, by means of SSN 
Resolution No. 38.284/201448, which replaces points 18 and 20(f) of Annex I to SSN Resolution 
No. 35.615/2011; and (iii) in November 2014, by means of SSN Resolution No. 38.708/2014, which, according to Argentina, provides for a regulatory reform of the reinsurance sector.
49 
2.25.  Points 18, 19 and 20(f) of SSN Resolution  No. 35.615/2011 as set out by Panama in its 
first written submission, hence, prior to the amendment introduced in March 2014 by means of 
SSN Resolution No. 38.284/2014, read as follows: 
Point 18 of Annex I to SSN Resolution No. 35.615/2011 
No authorization may be given to branches of foreign companies based in countries 
where the rate of gains or similar tax is less than twenty per cent (20%) or where 
domestic legislation imposes secrecy in regard to the corporate structure of legal 
persons, or in jurisdictions, territories or States with low or no taxes, so-called "tax 
havens", and/or countries or territories that do not cooperate in the global fight against money laundering and terrorist financing offences according to the criteria defined by the Financial Action Task Force (FATF). 
Point 19 of Annex I to SSN Resolution No. 35.615/2011 
The National Insurance Supervisory Author ity, by means of a special reasoned 
resolution on certain reinsurance transactions duly specified by the requesting insurer, 
may allow authorized entities to carry out insurance operations in the country, enter 
into reinsurance contracts with foreign reinsurance entities which conduct their operations from their head office when the magnitude or characteristics of the ceded 
risks make it impossible to cover such reinsurance transactions on the national 
reinsurance market. The request shall be submitted prior to entering into the contract and shall be accompanied by all the evidence needed to justify the special criterion. 
                                               
42 "Countries with low or no taxes" should be understood to mean non-cooperative countries. See 
footnote 14 above. 
43 The Panel will address the question of whether retr ocession services are cove red by measure 5 in its 
findings. 
44 Resolution No. 35.615 of the National Insurance Supervisory Authority, of 11 February 2011 (SSN 
Resolution No. 35.615/2011), (Exhibits PAN-36 / ARG-27). 
45 Panama's request for the establishment of a panel, pp. 5 and 6. 
46 SSN Resolution No. 35.615/2011, (Exhibits PAN-36 / ARG-27). 
47 Resolution No. 35.794 of the National Insurance Supervisory Authority, of 19 May 2011 (SSN 
Resolution No. 35.794/2011), (Exhibits PAN-40 / ARG-48). 
48 Resolution No. 38.284 of the National Insurance Supervisory Authority, of 21 March 2014 (SSN 
Resolution No. 38.284/2014), (Exhibit ARG-47). 
49 Argentina's responses to Panel questions No. 61, para. 3; No. 64, para. 2; and No. 66(a), para. 1. WT/DS453/R 
 
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  Point 20(f) of Annex I to SSN Resolution No. 35.615/2011 
No authorization for registration as foreign reinsurance entities accepting reinsurance 
transactions from their country of origin may be given to establishments based in countries where the rate of gains or similar tax is less than twenty per cent (20%) or 
where domestic legislation imposes secrecy in regard to the corporate structure of 
legal persons, or in jurisdictions, territories or States with low or no taxes, so-called "tax havens", and/or countries or territories that do not cooperate in the global fight 
against money laundering and terrorist financing offences according to the criteria 
defined by the Financial Action Task Force (FATF). 
2.26.  Accordingly, the wording of points 18 and 20(f) of Annex I to SSN Resolution 
No. 35.615/2011 prior to the March 2014 amendment imposed a ban on the supply of reinsurance 
services by (i) branches of companies in countries not cooperating for the purposes of tax 
transparency and the global fight against money laundering and terrorist financing offences according to the criteria defined by the FATF (point 18); and (ii) reinsurance establishments which 
deliver their services from their country of origin which is a non-cooperating country for the 
purposes of tax transparency and the global fight against money laundering and terrorist financing offences according to the criteria defined by the FATF (point 20(f)). 
2.27.  Point 19 of Annex I to SSN Resolution No. 35.615/2011, however, provides that the SSN 
may authorize reinsurance contracts with foreign reinsurance establishments which conduct their operations from their head office if the reinsurance operations cannot be covered on the national reinsurance market, because of the scale or the characteristics of the risks ceded. 
2.28.  On 19 May 2011, Argentina issued SSN Resolution No. 35.794/2011, which develops the 
provisions in point 19 of Annex I to SSN Resolution No. 35.615/2011. Article 4 of this Resolution, in particular, provides as follows: 
Article 4 of SSN Resolution No. 35.794/2011 
For the purposes of point 19 of Annex I to SSN Resolution No. 35.615, it is stipulated 
that individual risks exceeding US$50,000,000 (FIFTY MILLION UNITED STATES 
DOLLARS) may be reinsured with the reinsura nce entities mentioned in point 20 of the 
aforementioned regulations ("approved reinsurers"), for that portion which exceeds the aforementioned amount. 
2.29.  Consequently, Article 4 of SSN Resolution No. 35.794/2011 develops point 19 of Annex I to 
SSN Resolution No. 35.615/2011 by stipulating that reinsurance with foreign reinsurance entities 
which conduct their operations from their head office may be authorized provided that the individual risks exceed US$50,000,000 (fifty millio n United States dollars). In such cases, the 
reinsurance will be "for that portion wh ich exceeds the aforementioned amount". 
2.30.  On 25 March 2014, the date on which Panama submitted its first written submission, 
Argentina published SSN Resolution No. 38.284/2014, Articles 1 and 2 of which order the 
replacement of the text of points 18 and 20(f) of Annex I to SSN Resolution No. 35.615/2011, 
respectively, by the text set out below: 
ARTICLE 1: Replace point 18 of ANNEX I to SSN Resolution No. 35.615/2011 by 
the following: 
"Branches of foreign companies must prove that the parent company: 
(a) Has been incorporated and registered in countries, dominions, jurisdictions, 
territories or associate States considered 'cooperative for tax transparency purposes', 
in accordance with the provisions of Decree No. 589/2013 and supplementary 
regulations. 
If the parent company of the branch of the foreign company has not been 
incorporated and registered in accordance with the terms of the preceding paragraph, 
it must prove that it is subject to the control and supervision of a body which fulfils WT/DS453/R 
 
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  functions similar to those of the NATI ONAL INSURANCE SUPERVISORY AUTHORITY, 
and with which a memorandum of understanding on cooperation and exchange of information has been signed. 
(b) Has been incorporated and registered in countries, dominions, jurisdictions, 
territories or associate States that cooperate in the global fight against money 
laundering and terrorist financing offences in accordance with the criteria defined in the public documents issued by the FINANCIAL ACTION TASK FORCE (FATF). 
If the parent company of the branch of the foreign company has not been 
incorporated and registered in accordance with the terms of the preceding paragraph, 
the assessment of the request for authorization shall be subject to enhanced due diligence, proportionate to the risks, and the counter-measures indicated in 
Recommendation 19 of the FINANCIAL ACTION TASK FORCE (FATF) and the 
Interpretive Note thereto may be applied." 
ARTICLE 2 - Replace subparagraph (f) of point 20 of ANNEX I to SSN Resolution 
No. 35.615 by the following: 
"(f) Prove that they have been incorporated and registered in: I. Countries, dominions, jurisdictions, territories or associate States considered 
'cooperative for tax transparency purposes', in accordance with the provisions of 
Decree No. 589/2013 and supplementary regulations. 
If they have not been incorporated and regi stered in accordance with the terms of the 
preceding paragraph, they must prove th at they are subject to the control and 
supervision of a body which fulfils functions similar to those of the NATIONAL 
INSURANCE SUPERVISORY AUTHORITY, and with which a memorandum of understanding on cooperation and exchange of information has been signed. 
II. They have been incorporated and register ed in countries, dominions, jurisdictions, 
territories or associate States that cooperate in the global fight against money laundering and terrorist financing offences in accordance with the criteria defined in 
the public documents issued by the FINANCIAL ACTION TASK FORCE (FATF). 
If they have not been incorporated and regi stered in accordance with the terms of the 
preceding paragraph, the assessment of the request for authorization shall be subject 
to enhanced due diligence, proportionat e to the risks, and the counter-measures 
indicated in Recommendation 19 of the FI NANCIAL ACTION TASK FORCE (FATF) and 
the Interpretive Note thereto may be applied." 
2.31.  Point 19 of Annex I to SSN Resolution No. 35.615/2011 and Article 4 of SSN Resolution 
No. 35.794/2011 were not affected by this amendment introduced by SSN Resolution 
No. 38.284/2014. 
2.32.  Accordingly, following the amendment of Ma rch 2014, points 18 and 20(f) of Annex I to SSN 
Resolution No. 35.615/2011 provide that foreign suppliers of reinsurance services may be 
authorized to accept reinsurance operations from their country of origin (point 20(f)) or through a branch in Argentina (point 18) provided that they  meet the following requirements: (i) Prove that 
they have been incorporated and registered in cooperative countries (in the case of branches, this 
proof applies to the parent company); and (ii) prove that they have been incorporated and 
registered in countries that cooperate in the global fight against money laundering and terrorist financing offences in accordance with the criteria defined in the public documents issued by the 
FATF (in the case of branches, such proof relates to the parent company). 
2.33.  If incorporation and registration of service suppliers in a cooperative country is not proven, 
points 18 and 20(f) provide that they must pr ove that they are subject to the control and 
supervision of a body (i) which fulfils functions similar to those of the National Insurance 
Supervisory Authority; and (ii) with which a memorandum of understanding on cooperation and exchange of information has been si gned. If it is not proven that they have been incorporated and WT/DS453/R 
 
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  registered in countries that cooperate in the global fight against the money laundering and 
terrorist financing offences in accordance with the criteria defined by the FATF, points 18 and 20(f) provide that the assessment of the request for authorization shall be subject to enhanced due 
diligence, proportionate to the risks, and that the counter-measures indicated in Recommendation 
19 of the FATF and the Interpretive Note thereto may be applied. 
2.34.  On 6 November 2014, Argentina issued  SSN Resolution No. 38.708/2014 approving the 
General Regulations of the Insurance Business.
50 According to Argentina, SSN Resolution 
No. 38.708/2014 provides for regulatory reform of the reinsurance sector.51 Argentina explains 
that this Resolution includes in its "Annex in point 2.1.1 … the whole body of legislation that was previously contained in the following Re solutions: No. 35.615, No. 35.726, No. 35.794, 
No. 36.266, No. 36.332, No. 36.859 and No. 38.284".
52 
2.3.7  Measure 6: Requirements for a ccess to the Argentine capital market 
2.35.  Measure 6 consists of imposing requirements on stock market intermediaries53 for them to 
be able to engage in transactions ordered by persons from non-cooperative countries. Argentina 
applies this measure pursuant to Title XI ("Prevention of money laundering and financing of 
terrorism"), Section III, Article 5 of the Rules of the National Securities Commission (CNV)54, which 
provides as follows: 
All the persons indicated in Article 1 above55 may only engage in transactions 
involving the public offering of negotiable  securities, forward contracts, futures or 
options of any nature or other financial instruments or products, when they are conducted or ordered by persons incorporated, domiciled or residing in dominions, 
jurisdictions, territories or associate States included in the list of cooperative countries 
set forth in Article 2, subparagraph (b), of Decree No. 589/2013. 
If such persons are not included in the above-mentioned list and in their home 
jurisdiction have the status of intermediaries registered with an entity under the 
control and supervision of a body fulfilling functions similar to those of the Commission, such transactions shall go forward only if it is certified that the 
aforementioned body in their home juri sdiction has signed a memorandum of 
understanding on cooperation and exchange of information with the NATIONAL SECURITIES COMMISSION. 
2.36.  Consequently, the following requirements mu st be met for a stock market intermediary in 
Argentina to engage in transactions involving the public offering of negotiable securities, forward 
contracts, futures or options of any nature, or other financial instruments or products, when conducted or ordered by persons incorporated, domiciled or residing in non-cooperative countries: 
(i) the persons incorporated, domiciled or residing in non-cooperative countries that give the order 
to the stock market intermediary must have the stat us of intermediaries registered with an entity 
under the control and supervision of a body fulf illing functions similar to those of the Argentine 
C N V ;  a n d  ( i i )  t h e  b o d y  i n  q u e s t i o n  m u s t  h a v e  s i g n e d  a  m e m o r a n d u m  o f  u n d e r s t a n d i n g  o n  
cooperation and exchange of information with the Argentine CNV. 
                                               
50 Article 1 of SSN Resolution No. 38.708/2014, (Exhibit ARG-135). 
51 Argentina's responses to Panel questions No. 61, para. 3; No. 64, para. 2; and No. 66(a), para. 1. 
52 Argentina's response to Panel question No. 66(a), f ootnote 25. Argentina clarif ies in response to this 
question from the Panel that "[a]lthough the aforementi oned SSN Resolution No. 38.708 does not specifically 
mention SSN Resolution No. 38.284, it should be understood that, in the first place, it has been tacitly repealed 
as it is a resolution partially amending SSN Resolution No. 35.615 and hence follows the fortunes of the main Resolution, to which it made amendments. Secondly, the text of Resolution No. 38.284 was incorporated into the new Regulation". 
53 "Stock market intermediaries" me ans the persons indicated in Article 1 of the Rules of the National 
Securities Commission (CNV), including "bargaining agen ts, liquidation and compensa tion agents, distribution 
and placement agents, and collective investment management agents". See Exhibits PAN-58 / ARG-50. 
54 Rules of the National Securities Commission, New Text 2013 (Title XI), approved by General 
Resolution No. 622 (CNV Rules 2013), (Exhibits PAN-58 / ARG-50). 
55 See footnote 53 above. WT/DS453/R 
 
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  2.3.8  Measure 7: Requirements fo r the registration of branches 
2.37.  Measure 7 consists of imposing additional  requirements on branches of companies from 
non-cooperative countries for the purpose of regi stration in the Public Trade Register of the 
Autonomous City of Buenos Aires. Argentina maintains this measure pursuant to Article 192 of IGJ 
Resolution No. 7/200556, which reads in relevant part: 
The General Justice Inspectorate shall closely review compliance with the 
requirements of Article 188, subpara graph 3, subsections (b) and (c)57 by companies 
which, without being offshore or from offshore jurisdictions, have been set up, 
registered or incorporated in jurisdictions considered as having low or no taxes58 
and/or classified as not collaborating in the fight against "money laundering" and transnational crime. 
Accordingly: 
1. Certification that the company is effectively engaged in economically significant 
business activities in the place where it was set up, registered or incorporated and/or 
in third countries shall be required, for which the company may have to provide: 
(a) The relevant documents showing its latest approved accounting statements; (b) A deed describing the main operations conducted during the financial year to 
which the accounting statements correspond or during the immediately preceding year 
if the accounting frequency is less, indicating the dates, parties, purpose and economic volume concerned, to be signed by the competent authority in the country of origin or by an officer of the company possessing duly accredited status and 
authority; 
(c) The deeds of ownership of the non-current (fixed) assets or the contracts 
conferring operating rights in such assets, if the document referred to in subparagraph 
(b) is considered insufficient; 
(d) Any other document deemed necessary for the purposes indicated. 2. Information in addition to that indica ted in subparagraph 3 of 188 may be required 
for the purpose of obtaining personal particulars of the partners with a view to 
verifying their background, including information on their economic and tax status. 
                                               
56 General Resolution No.7 of the General Justice In spectorate (IGJ), of 25 August 2005 (IGJ Resolution 
No. 7/2005), (Exhibits PAN-62 / ARG-33). 
57 Subparagraphs 3(b) and 3(c) of Article 188 of  IGJ Resolution No. 7/2005 provide as follows: 
The following shall be submitted for the purpose of the registration provided for in Article 118, third paragraph, of Law No. 19.550: … 3. The documents from abroad drawn up by an official of the company whose representative 
authority must be attested therein and authen ticated by a notary or  government official, 
certifying: … … (b) That it has one or more agencies, branches or representative offices operating outside the Republic and/or non-current (fixed ) assets or operating rights in such assets belonging to third 
parties and/or holdings in other companies not subject to public offering and/or habitually 
conducts investment transactions on stock exchange s or securities markets as provided for in its 
corporate purpose; (c) Particulars of the persons who are partners at the time of the decision to request registration, 
indicating for each partner as a minimum their firs t name and surname or title, domicile or head 
office, identity card or  passport number or registration, auth orization or incorporation details, 
and the number of shares and votes and their percentage of the registered capital. This 
documentation need not be submitted if the personal particulars of the partners are in line with 
the requirement in subparagraph 2(a) and are a ccompanied by a statement of their means of 
livelihood by the company official referred to  at the beginning of this subparagraph. 
See IGJ Resolution No. 7/2005, (Exhibits PAN-62 / ARG-33). 
58 "Countries with low or no taxes" should be understood to mean non-cooperative countries. See 
footnote 14 above. WT/DS453/R 
 
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  If the jurisdictions referred to in this Article are "offshore" jurisdictions, Article 193 
shall apply. 
2.38.  Accordingly, apart from the requirements applicable to companies in cooperative countries, 
branches of companies set up, registered or incorporated in non-cooperative countries shall be 
required to prove "that the company is effectively engaged in economically significant business 
activities in the place where it was set up, registered or incorporated and/or in third countries", for which the IGJ may require additional documents. The IGJ may also request additional documents 
in order to verify the records of the company's partners. 
2.3.9  Measure 8: Foreign exch ange authorization requirement 
2.39.  Measure 8 consists of imposing on service suppliers from non-cooperative countries the 
requirement to obtain prior authorization from the Central Bank of the Argentine Republic (BCRA) 
in order to be able to repatriate their direct  investments. Argentina maintains this measure 
pursuant to Communication "A" 4940, Section I of the BCRA
59, which provides the following: 
Prior authorization from the Central Bank shall be required for access to the foreign 
exchange market in order to purchase foreign currency for the repatriation of direct 
and portfolio investments by non-residents covered by points 1.13 and 1.14 of Communication "A" 4662, amended by Communication "A" 4692, respectively, if the 
beneficiary abroad is a natural or legal person residing or incorporated or domiciled in 
dominions, jurisdictions, territories or associate States included in the list in Decree No. 1.344/98 regulating the Gains Tax Law No. 20.628 and amendments thereto. 
2.40.  This means that prior authorization from the BCRA is needed in order to repatriate the 
investment "when the beneficiary abroad is a natural or legal person residing or incorporated or 
domiciled in" a non-cooperative country. 
2.4  Factual context 
2.4.1  Introduction 
2.41.  In this section we outline certain topics which, although they do not form part of the 
measures at issue, have been addressed by th e parties in their submissions and may be of 
relevance for the purposes of this Panel's findings. 
2.4.2  Relevant Argentine legislation applicable to cooperative countries 
2.42.  The purpose of this section is to describe the relevant legislation applicable to cooperative 
countries in respect of the matters regulated by measures 2, 3, 4, 7 and 8 applicable to 
non-cooperative countries. For measures 1, 5 and 6, the treatment accorded to cooperative 
countries is set out in the text of the measures challenged by Panama.
60 
2.4.2.1  Presumption of unjus tified increase in wealth 
2.43.  The Argentine regulation applicable to determining the taxable subject matter for Argentine 
taxpayers is contained in Article 11 of the LPT, which provides that it is the taxpayers themselves, through their sworn declarations, who determine what is subject to taxation.
61 If no sworn 
declarations have been submitted or those submi tted are contested, the AFIP shall determine the 
taxable subject matter ex officio. This ex officio de termination may be made directly, as a result of 
certain knowledge of the taxable su bject matter, or by estimation.62 In the latter case, Article 18 
                                               
59 Communication "A" No. 4940 of the Central Bank of the Argentine Republic, of 12 May 2009 
(Communication "A" No. 4940), (Exhibits PAN-71 / ARG-31). 
60 See paras. 2.13, 2.30 and 2.35 above. 
61 Article 11 of the LPT provides that "[t]he determination and collection of taxes under this Law shall be 
based on sworn declarations to be su bmitted by those responsi ble for paying taxes in the form and within the 
time-limits to be established by the FEDERAL PUBLIC REVENUE ADMINISTRATION". See the Law on Tax 
Procedure, (Exhibits PAN-9 / ARG-45). 
62 In this connection, Article 16 of the LPT provides as follows: WT/DS453/R 
 
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  of the LPT applies, which contains the presumptions  to be used by the AFIP when estimating the 
taxable subject matter ex officio, and section (f) of which includes the presumption of unjustified 
increase in wealth.63 
2.44.  We recall that measure 2, contained in the unnumbered article added after Article 18 of the 
LPT, presumes that any entry of funds from non-cooperative countries constitutes an unjustified 
increase in wealth – a presumption which may be rebutted if the taxpayer "conclusively proves that the funds originated from activities actually carried out by the taxpayer or by third parties in 
those countries or from placements of duly declar ed funds" – as explained in section 2.3.3 above. 
2.4.2.2  Valuation of transactions 2.45.  Article 14 of the LIG establishes as a rule that transactions between an Argentine taxpayer 
and a foreigner shall be considered arm's-length transactions "if their services and conditions are 
in line with normal arm's-length market practices".
64 Where that is not the case, such services and 
conditions shall be governed by the provisions of  Article 15 of the LIG, which empowers the AFIP 
"to determine the net taxable income by using averages, indices or coefficients established for this 
purpose on the basis of the performance of indepe ndent companies engaged in the same or similar 
activities". 
2.46.  As regards profits earned from exporting goods produced, manufactured, processed or 
purchased in Argentina, the second paragraph of Article 8 of the LIG provides that "the net profit 
shall be established by deducting from the selling price the cost of the goods, transport and insurance costs to the destination, commission and sales costs and costs incurred in the Argentine Republic as necessary in order to obtain the taxabl e profit". In such cases, Article 8 provides that 
the rules and procedures contained in Article 15 of  the LIG shall apply when the transactions are 
with related persons or entities and the prices and conditions are not in line with arm's-length market practices.
65 
2.47.  We recall that measure 3 in Article 8, paragraph 5 and Article 15, paragraph 2 of the LIG 
prescribes the application of methods for valuing transactions with persons from non-cooperative countries based on transfer prices in order to determine the basis of assessment for gains tax 
payable by Argentine taxpayers, as described in section 2.3.4 above. 
                                                                                                                                               
If no sworn declarations have been submitted or those submitted are contested, the FEDERAL 
PUBLIC REVENUE ADMINISTRATION shall determine ex officio the taxable subject matter or the 
tax loss carry forward, where applicable, and asse ss the corresponding tax, either directly, as a 
result of certain knowledge of the tax object, or by estimation if the known elements only allow 
the existence and amount of the tax to be presumed. See the Law on Tax Procedure, (Exhibits PAN-9 / ARG-45). 
63 Article 18(f) of the LPT: "Unjus tified increases in wealth are: 
(1) In the case of gains tax: Net profits determined by an amount correspondi ng to unjustified increases in wealth, plus 
TEN PER CENT (10%) under the head ing of income disposed of or consumed as non-deductible 
expenditure. (2) In the case of  value added tax: 
Amounts of omitted sales determined according to the sum total of the elements stemming from the preceding point. In these circumstances, payment of the tax shall not give rise to any tax credit. (3) The method described in point 2 shall apply to the corresponding internal tax headings." See the Law on Tax Procedure (LPT), (Exhibits PAN-9 / ARG-45). 
64 The third paragraph of Article 14 of the LIG provides as follows: 
Transactions between a stable institution, as refe rred to in subparagraph (b) of Article 69 -. or a 
company or trust fund covered by subparagraphs  (a) and (b) and the subparagraph added after 
subparagraph (d) of Article 49 – respectively, and related persons or entities incorporated, 
domiciled or located abroad shall, for all purpos es, be considered as being between independent 
parties if their services and cond itions are in line with normal arm's-length market practices, 
except in the cases covered by subparagraph (m) of Article 88 -. When such services and conditions are not in line with ar m's-length market practices, they  shall be adapted in accordance 
with the provisions of Article 15 -. 
See (Exhibits PAN-4 / ARG-42). See also Panama's first written submission, para. 4.210 and Argentina's 
first written submissi on, Explanatory Annex No. 1.3, para. 90. 
65 Paragraph 4 of Article 8 of the LIG, (Exhibits PAN-4 / ARG-42). WT/DS453/R 
 
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  2.4.2.3  Rule for the allocation of expenditure 
2.48.  Article 18 of the LIG provides that expend iture, in the same way as profits, shall be 
allocated to the fiscal year in which it accrues.66 Accordingly, the " accrual " rule is considered to be 
the general rule for allocating income and expenditure "for third category income67".68 
2.49.  We recall that measure 4 in the last paragraph of Article 18 of the LIG provides for 
application of the rule of payment received when allocating expenditure for transactions between Argentine taxpayers and persons from non-cooper ative countries, as described in section 2.3.5 
above. 
2.4.2.4  Requirements for the registration of branches 2.50.  Article 118 of Law No. 19.550 on Commercial Companies (LSC), applicable to companies 
incorporated abroad, specifies the requirements to be met by a foreign company "[i]n order to 
engage in the customary exercise of the acts includ ed in its social purpose, set up a branch or any 
other form of permanent representative office".
69 One of these requirements is to register the 
company incorporated in Argentina. In the Autono mous City of Buenos Aires, companies must be 
registered in the Public Trade Register of the Ci t y  o f  B u e n o s  A i r e s ,  w h i c h  i s  g o v e r n e d  b y  I G J  
Resolution No. 7/2005.70 Article 188 of this IGJ Resolution, when referring to the registration 
requirement in Article 118 of the LSC, specifies the documents which companies incorporated 
abroad must submit in order to be registered: 
Certificate proving the existence of the company and that it is not subject to 
liquidation or any legal proceedings involving restrictions on its assets and/or activities
71; 
                                               
66 Article 18 of the LIG: "… the profits referred to in Article 49 shall be attributed to the tax year in 
which the accounting year in which they are accrued ends . … The above provisions on the allocation of profits 
shall apply correlatively to the allocation of expenditure, unless otherwise provided." See Exhibits PAN-4 / ARG-42. 
67 Third category income is that described in Article 18 of the LIG as "the profits referred to in 
Article 49" of the LIG. The types of income listed in Ar ticle 49 of the LIG are considered third category income, 
namely: 
(a) Income received by the persons listed in Article 69 -. (b) All income earned from any other type of co mpany incorporated in the country or single 
person enterprises located there. (c) Income earned from acting as commission agent, auctioneer, consignee or other trade auxiliaries not specifically included in the fourth category. 
(d) Income earned from lots for urban planning purposes, income from building and sale of 
property under the regime of Law No. 13512. Income earned from trust funds in which the trus tor is a beneficiary, ex cept in the case of 
financial trust funds or when the trustor-benefici ary is a person covered by Title V (Incorporated 
by Law 25063, Article 4). (e) Other income not includ ed in other categories. 
Compensation in cash or kind, per diem, etc. re ceived when carrying out activities covered by 
this Article shall also be considered income if it exceeds the amount deemed reasonable by the Directorate-General of Taxation for th e reimbursement of expenses incurred. 
Where the professional or official activity refe rred to in Article 79 is supplemented by a business 
activity or vice versa (sanatoriums, etc.), the total income earned from all these activities shall be considered third category income. See Exhibits PAN-4 / ARG-42. 
68 Panama's first written submission, para. 4.300; Argentina's first written submission, Explanatory 
Annex No. 1.4, para. 110. See also Argentina's first wr itten submission, Explanatory Annex No. 1.4, para. 119 
(referring to the work of César Halladjian " El tratamiento en el impuesto a las ganancias desde la óptica del 
prestatario: condiciones APRA la deducción del gasto " [Treatment of gains tax from the standpoint of the 
borrower], Práctica y Actualidad Tributaria, Errepar, XIII, December 2006). 
69 Article 118 of Law No. 19.550 lays down three requirements: (1) prove the existence of the company 
in accordance with its country's legislation; (2) establish a domicile in Argentina, complying with the publication and registration required by law for companies incorporated in Argentina; (3) justify the decision to establish the representative office and designate the pers on to be responsible for it . In the case of branches, 
the assigned capital must also be specified, if this is required by special laws. See the Law on Commercial 
Companies, (Exhibits PAN-34 / ARG-43). 
70 IGJ Resolution No. 7/2005, (Exhibits PAN-62 / ARG-33). 
71 Article 188.1 of IGJ Resolution No. 7/2005, (Exhibits PAN-62 / ARG-33). WT/DS453/R 
 
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  Documents from abroad containing (a) the contract or deed of incorporation of the 
company and amendments thereto; (b) decision  of the governing body deciding to set 
up the seat, branch or permanent representative office in Argentina; (c) date of closure of its financial books; (d) head office in the Autonomous City of Buenos Aires; 
(e) capital allocated – if applicable; and (f) designation of the representative, who 
must be a natural person
72; 
Documents from abroad drawn up by an officer of the company proving (a) that in the 
place it was set up, incorporated or registered, there is no ban or restriction on the 
company engaging in all its activities or the most important among them; (b) that it has one or more agencies, branches or representative offices in operation and/or non-current (fixed) assets or operating rights in assets belonging to third parties 
and/or holdings in other companies not subject to public offering and/or habitually 
conducts investment transactions on stock exchanges or securities markets as provided for in its corporate purpose; and (c) particulars of the persons who are 
partners at the time of the decision to request registration
73; 
Original proof of the publication requir ed by Article 118, third paragraph, 
subparagraph (2) of Law No. 19.550 if it is a joint stock company, a limited liability 
company or a company of a type not covere d by the laws of the Argentine Republic, 
specifying (a) with regard to the branch, agency or representative office, its head office, assigned capital where applicable and the date of closure of its financial books; (b) with regard to the representative, his/her personal data, established special 
domicile, period of representation if applicable, restrictions on mandate, if any, and 
nature of activities if more than one repres entative is designated; and (c) with regard 
to the company abroad, the information indicated in Article 10, subparagraphs (a) and 
(b) of Law No. 19.550 in respect of the ar ticles of incorporation and amendments 
thereto, if any, in effect at the time of the request for registration
74; 
Document signed by the designated repres entative, authenticated by a notary or 
personally ratified prior to registration, in which the representative (a) provides 
his/her personal data; (b) indicates the site of the head office; and (c) the establishes a special domicile within the area of the Autonomous City of Buenos Aires.
75 
2.51.  We recall that measure 7 in Article 192 of IGJ Resolution No. 7/200576 imposes additional 
requirements on branches of companies from non- cooperative countries for their registration in 
the Public Trade Register, as described in section 2.3.8 above. 
2.4.2.5  Foreign exchange authorization requirement 
2.52.  Point 1.13 of Communication "A" 466277, as amended by Communication "A" 4692, provides 
that prior authorization by the BCRA is not needed "in order to purchase foreign currency for transfer abroad if the transactions are conducted by or correspond to payments in the country … of 
repatriation of direct investment in the non-financial private sector, in companies that do not 
control local financial institutions and/or in immovable property", provided that the investment has remained in Argentina for a minimum of 365 consecutive days.
78 
2.53.  Point 4 of Communication "A" 4662 provides that, before proceeding with transactions 
exempt from prior authorization by the BCRA, the en tities authorized to deal in foreign exchange 
must meet certain requirements.79 In this connection, Communication "A" 5237 includes as a 
                                               
72 Article 188.2 of IGJ Resolution No. 7/2005, (Exhibits PAN-62 / ARG-33). 
73 Article 188.3 of IGJ Resolution No. 7/2005, (Exhibits PAN-62 / ARG-33). 
74 Article 188.4 of IGJ Resolution No. 7/2005, (Exhibits PAN-62 / ARG-33). 
75 Article 188.5 of IGJ Resolution No. 7/2005, (Exhibits PAN-62 / ARG-33). 
76 IGJ Resolution No. 7/2005, (Exhibits PAN-62 / ARG-33). 
77 Communication "A" No. 4662, (Exhibits PAN-67 / ARG-69). 
78 Point 1.13 of Communication "A" No. 4662, as amended by Communication "A" No. 4692, specifies 
the circumstances that may give rise to repatriation , namely: sale of the dire ct investment, definitive 
liquidation of the direct investment, capital reduction decided by the local company, and refund of irrevocable 
contributions by the local company. See Exhibits PAN-68 / ARG-70. 
79 The following are the requirements laid down in point 4 of Communication "A" No. 4662: 
(a) verification of the purpose declared for access to the foreign exchange market; (b) possession of WT/DS453/R 
 
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  requirement for access to the local foreign exchange market for the repatriation of direct 
investment "proof of the entry of funds throug h the local foreign exchange market for all new 
investment derived from new contributions or purchases of shares in local companies and real estate effected in foreign currency as of 28 October 2011 by the foreign investor". Point 4 of this 
BCRA Communication adds that the "transactions for the repatriation of direct investment which 
are subject to the established requirements but ca nnot be shown to be compliant therewith at the 
date of access to the local foreign exchange market must have prior authorization from the 
Central Bank".
80 
2.54.  We recall that measure 8, in Communication "A" No. 4940, Section I, of the BCRA requires 
service suppliers from non-cooperative countries to obtain prior authorization from the BCRA in order to be able to repatriate their direct in vestments, as described in section 2.3.9 above. 
2.4.3  Global Forum on Transparency and Exchange of Information for Tax Purposes 
2.55.  The Global Forum is an intergovernmental body which emerged – under another name – 
within the Organisation for Economic Co-operation and Development (OECD) in 2001 and which in 
2009, after being reorganized, adopted its current title. It is open to any jurisdiction, whether or 
not a member of the OECD, which commits to implementing the Global Forum's tax transparency and information exchange standards and agrees to take part in the peer review process (PRP). 
These reviews are currently the Global Forum's main activity.
81 
2.56.  According to the Global Forum's 2014 report on progress, it has 123 members composed of 
122 jurisdictions and the European Union.82 Of the 123 members, 97 are also Members of the 
WTO. The WTO does not have observ er status in the Global Forum.83 
2.57.  The Global Forum's terms of reference co nsist of promoting rapid implementation of tax 
transparency standards among its members. In part icular, it undertakes to ensure application of 
the international "Exchange of information on request" standard, or EOIR for short.84 According to 
the EOIR standard, there should be exchange – up on request – of foreseeably relevant information 
for carrying out the provisions of a tax convention or for the administration or enforcement of the domestic tax laws of a requesting party.
85 By October 2014, 89 jurisdictions members of the 
Global Forum had undertaken to implement a ne w international standard between 2017 and 2018 
                                                                                                                                               
documents proving that the resident debtor has had ac cess to the foreign exchange market for the purpose 
and amount paid to the non-resident of the country (in cases of payment in the country for imports, services, 
income and other current transfers from abroad and commercial and financial debts abroad); (c) sworn 
declaration by the customer or his/he r representative in the country stating that there has been no previous 
transfer for the same transaction; (d) assurance that  the funds received have not been used for other 
investment in the country from the date  they were paid in the country for the purpose declared until the date 
of access to the local foreign exchange  market; (e) certificate of prior se ttlement of such payments on the 
foreign exchange market in cases where, as a result of the sale of the investment or the payment of the credit, 
part or all of the payments have been  received in foreign currency; (f) po ssession (on the part of the authority 
authorized to conduct foreign exchange  dealings) of all the elements needed to certify the reasonableness and 
authenticity of the transaction and the documents required under foreign exchange regulations; and (g) verification of compliance with the other applicable foreign exchange regulations. See Exhibits PAN-67 / 
ARG-69. 
80 Communication "A" No. 5237, (Exhibit ARG-75). 
81 Global Forum on Transparency and Exch ange of Information for Tax Purposes, Tax Transparency – 
2014 – Report on Progress , p. 24. 
82 Global Forum on Transparency and Exch ange of Information for Tax Purposes, Tax Transparency – 
2014 – Report on Progress , p. 17. 
83 The observers include the African Tax Administration Forum, the Asian Development Bank, the 
Caribbean Community (CARICOM), the Commonwealth Secret ariat, the European Bank for Reconstruction and 
Development, the European Investment Bank, the Inter-American Development Bank, the International Finance Corporation, the International Monetary Fund , the United Nations, the World Bank and the World 
Customs Organisation (WCO). See Global Forum on Transparency and Exchange of Information for Tax 
Purposes, Tax Transparency – 2014 – Report on Progress , pp. 48 and 77. 
84 Global Forum on Transparency and Exch ange of Information for Tax Purposes, Tax Transparency – 
2014 – Report on Progress , p. 24. 
85 Global Forum on Transparency and Exch ange of Information for Tax Purposes, Tax Transparency – 
2014 – Report on Progress , p. 25. WT/DS453/R 
 
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  to complement the EOIR standard86: this is a global standard on automatic (and reciprocal) 
exchange of financial account information, or AEOI for short.87 
2.58.  The PRP is voluntary and evaluates the capaci ty of each Global Forum member's jurisdiction 
to comply with the international EOIR standard.88 The process consists of two phases: (i) phase 1 
reviews the legal framework of the jurisdiction conc erned in the light of the EOIR standard; and (ii) 
phase 2 looks into the review of application of th e EOIR standard in practice in the jurisdiction 
concerned. Argentina completed both phases of the PRP in June 2012 and is now classified as 
"largely compliant" with the EOIR international standard.89 Panama comes under the category of 
jurisdictions unable to move to phase 2, given that it has not amended its regulatory framework in the light of the recommendations arising from phase 1, carried out in 2010. 
2.59.  The Global Forum lacks the power to impose sanctions on jurisdictions which do not apply 
tax transparency standards. Nor, to date has it issued any recommendations to its members either 
on the potential adoption of special defensive measures to counter non-application of its tax transparency standard.
90 I t  s h o u l d  b e  p o i n t e d  o u t ,  h o w e v e r ,  that both the OECD and the G-20 
have recognized the importance of defensive measures relating to tax transparency as a way of 
protecting public revenue and creating a level playing field.91 
2.4.4  Financial Action Task Force (FATF) 
2.60.  The Financial Action Task Force (FATF) is  an intergovernmental body established in 1998 by 
its member jurisdictions. Its mandate is to set standards and promote effective implementation of 
legal, regulatory and operational measures for combating money laundering, financing of terrorism and the proliferation of weapons of mass destructio n, among other threats to the integrity of the 
financial system.
92 Currently, 34 jurisdictions are members, together with the Gulf Cooperation 
Council and the European Commission. Argentina is an FATF member, but Panama is not.93 
2.61.  The FATF Recommendations are recognized as the international standard against money 
laundering and the financing of terrorism.94 The text of these recommendations in force at the 
time of drafting this Report is that of 2012. The measures established in the FATF Recommendations must be applied by all its members and by the FATF-Style Regional Bodies 
                                               
86 Global Forum on Transparency and Exch ange of Information for Tax Purposes, Tax Transparency – 
2014 – Report on Progress , p. 81. 
87 According to the AEOI (automatic exchange of in formation) standard, the exchange will be on a 
regular basis (for example, yearly) and will cover a previously defined type of information. Argentina is one of the jurisdictions that will commence the first phase of this exchange of information in 2017. Panama is one of 
the jurisdictions that has not yet indicated whether it will commence this exchange in 2017 or 2018 or has not 
yet committed to this automatic exchange. See Global Fo rum on Transparency and Exchange of Information for 
Tax Purposes, Tax Transparency – 2014 – Report on Progress , p. 38. 
88 Global Forum on Transparency and Exch ange of Information for Tax Purposes, Tax Transparency – 
2013 – Report on Progress , (Exhibit ARG-36), p. 17. 
89 In phase 2, each of the components of the EOIR st andard is given one of the following classifications: 
compliant, largely compliant, partially compliant or non-compliant. See Global Forum on Transparency and Exchange of Information for Tax Purposes, Tax Transparency – 2013 – Report on Progress , (Exhibit ARG-36), 
pp. 17 and 20. 
90 Argentina's response to Pane l question No. 46(a), para. 2. 
91 Argentina's response to Panel question No . 46(a), para. 4 (citing the 2000 OECD report Towards 
Global Tax Co-operation , (Exhibit ARG-6), available at http://www.oecd.org/tax/transparency/44430257.pdf  
(exhibit provided in English; Spanish text available at 
http://www.ief.es/recursos/publica ciones/libros/informes_OCDE.aspx ). See also Argentina's response to Panel 
question No. 46(a), paras. 5, 6 and 9 (referring to OECD, OECD's Project on Harmful Tax Practices, The 2001 
Progress Report , (Exhibit ARG-7), available at http://www/oecd.org/ctp/harmful/2664450.pdf (exhibit provided 
in English; Spanish text available at http://www.ief.es/r ecursos/publicaciones/li bros/informes_OCDE.aspx ); 
Communiqué , Meeting of Finance Ministers and Central Bank Governors, UK, 2009, (Exhibit ARG-114); OECD, 
OECD's Project on Harmful Tax Practices, The 2004 Progress Report , (Exhibit ARG-9), available at 
http://www/oecd.org/ctp/harmful/2664450.pdf (exhibit provided in English; Spanish text available at http://www.ief.es/recursos/publica ciones/libros/informes_OCDE.aspx ); and Argentina's response to Panel 
question No. 71 (citing OECD, Towards a Level Playing Field, Global Forum on Taxation, Berlin, 3-4 June 2004, 
Exhibit ARG-10, para. 28). 
92 FATF, International Standards on Combating Mone y Laundering and the Financing of Terrorism and 
Proliferation – The FATF Recommendations (FATF Recommendations), February 2012, (Exhibit ARG-25), p. 7. 
93 http://www.fatf-gafi.org/pages /aboutus/membersandobservers . 
94 FATF, FATF Recommendations, (Exhibit ARG-25), p. 7. WT/DS453/R 
 
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  (FSRBs), including the Financial Action Task Force of Latin America (GAFILAT), previously known 
as GAFISUD, of which Argentina and Panama are members.95 
2.62.  Implementation of the FATF Recommendations is assessed rigorously through mutual 
evaluation processes and by the IMF and the Wo rld Bank on the basis of the FATF's common 
assessment methodology.96 
3  PARTIES' REQUESTS FOR FI NDINGS AND RECOMMENDATIONS 
3.1.  Panama requests that the Panel find that: 
a. Measure 1 (withholding tax on payments of interest or remuneration) is inconsistent with 
Argentina's obligations under Article II:1 of the GATS inasmuch as it alters the conditions of competition between like services and service suppliers by according less favourable treatment to services and service suppliers of non-cooperative countries.
97 
b. Measure 2 (presumption of unjustified increase in wealth) is inconsistent with 
Argentina's obligations under: 
i. Article II:1 of the GATS, inasmuch as it constitutes a disincentive to contracting 
services that imply a transfer of funds from non-cooperative countries, thus 
modifying the conditions of competition and according less favourable treatment to services and service suppliers of non-cooperative countries than that granted to like 
services and service suppliers of cooperative countries; 
ii. Article XVII of the GATS, inasmuch as it constitutes a disincentive to contracting 
services that imply a transfer of funds from non-cooperative countries, thus altering the conditions of competition between like services and service suppliers of Argentina 
and those of non-cooperative countries; 
iii. Article I:1 of the GATT 1994, inasmuch as the advantage, favour, privilege or 
immunity accorded to payments received from cooperative countries for exports to 
those countries is not accorded to exports of like products to non-cooperative 
countries (which entail payments from non-cooperative countries).
98 
c. Measure 3 (transaction valuation based on transfer prices) is inconsistent with 
Argentina's obligations under: 
i. Article II:1 of the GATS, inasmuch as it creates disincentives that imply less 
favourable treatment for services and service suppliers from non-cooperative countries; 
ii. Article XVII of the GATS, inasmuch as, with regard to the full commitments made by 
Argentina on national treatment, it leads to a disincentive to purchase or contract from suppliers of non-cooperative countries, placing them in a less favourable 
position than like domestic suppliers; 
iii. Article I:1 of the GATT 1994, inasmuch as imports/exports of products from/to 
cooperative countries may be valued as transactions in line with normal market 
practices or prices, unlike imports/exports from/to non-cooperative countries, which 
are subject to the transfer pricing valuation regime; 
                                               
95 GAFISUD – International Standards on Combating Money Laundering and the Financing of Terrorism 
and Proliferation, FATF Recommendations, February 2012, (Exhibit ARG-26). See also http://www.gafilat.org/content/observadores. 
96 FATF, FATF Recommendations, (Exhibit ARG-25), p. 8. 
97 Panama's first written submission, para. 5.1.a; second written submission, para. 3.1.a. See also 
Panama's request for establis hment of a panel, p. 2. 
98 Panama's first written submission , para. 5.1.b; second written submission, para. 3.1.b. See Panama's 
request for esta blishment of a panel, p. 3. WT/DS453/R 
 
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  iv. Article III:4 of the GATT 1994, inasmuch as the measure places products imported 
from non-cooperative countries in a less favourable position than that of like domestic products; and 
v. Alternatively, Article XI:1 of the GATT 1994, inasmuch as the measure establishes 
limiting conditions on the import/export of products from/to non-cooperative 
countries.
99 
d. Measure 4 (payment received rule for the allocation of expenditure) is inconsistent with 
Argentina's obligations under: 
i. Article II:1 of the GATS, inasmuch as it li mits the possibility of deducting payments 
for services provided by service suppliers of non-cooperative countries, according them less favourable treatment than that accorded to like service suppliers of 
cooperative countries; and 
ii. Article XVII of the GATS, inasmuch as, with regard to the full commitments made by 
Argentina on national treatment, the current restriction on deducting payments for 
services provided by service suppliers of non-cooperative countries accords them less 
favourable treatment than that accorded to domestic like services and service suppliers.
100 
e. Measure 5 (requirements relating to reinsurance and retrocession services)101 is 
inconsistent with Argentina's obligations under: 
i. Article II:1 of the GATS, inasmuch as access to the Argentine reinsurance market for 
suppliers of non-cooperative countries is subject to compliance with conditions, and 
this gives rise to uncertainty that alters the conditions of competition between 
reinsurance service suppliers of non-cooperative countries and those of cooperative countries
102; 
ii. Article XVI:1 and XVI:2(a) of the GATS, inasmuch as Argentina restricts the number 
of foreign service suppliers and accords them treatment less favourable than that specified in its Schedule of Commitments.
103 
f. Measure 6 (requirements for access to the Argentine capital market) is inconsistent with 
Argentina's obligations under Article II:1 of the GATS, inasmuch as it accords to service suppliers of non-cooperative countries seekin g access to the Argentine capital market in 
                                               
99 Panama's first written submission, para. 5.1.c; second written submission, para. 3.1.c. See also 
Panama's request for establishment of  a panel, pp. 4 and 5. It should be pointed out, however, that in 
Panama's request for establishment of a panel, reference is made to Article II:2 instead of Article II:1 of the 
GATS, owing to a typographical error. 
100Panama's first written submission, para. 5.1.d; se cond written submission, para. 3.1.d. See also 
Panama's request for establis hment of a panel, p. 5. 
101 The changes to measure 5 and their impact on the Pa nel's terms of reference, as well as the disputed 
inclusion of retrocession services in this measure, will be addressed in the section of the Report containing the Panel's findings. 
102 Panama's second written submission, para. 2.612. It should be pointed that Panama indicates that, 
although SSN Resolution No. 38.284/2014 amended SSN Re solution No. 35.615/2011 in March 2014 by lifting 
the ban on access to the Argentine reinsurance market by  service suppliers of non-cooperative countries, the 
discrimination persists and, therefore, Panama's claims under Article II:1 of the GATS are maintained. See Panama's response to Panel question No. 60. 
103 Panama's first written submission, para. 5.1.e; second written submission, para. 3.1.e. See also 
Panama's request for establishment of a panel, p. 6. It should be pointe d out in this connection that Panama 
has indicated that it withdraws its claims under Articl es XVI:2(a) and XVI:1 of the GATS in respect of the 
supply of reinsurance services by suppliers of non-coop erative countries under mode 3 (point 18 of Annex I to 
SSN Resolution No. 35.615/2011) and mode 1 (point 20(f) of Annex I to SSN Resolution No. 35.615/2011). 
Likewise, Panama has emphasized that it maintains its claims "under Article XVI of the GATS in respect of 
point 19 of Annex I to SSN Resolution No. 35.615". See Panama's response to Panel question No. 60. WT/DS453/R 
 
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  order to provide their services treatment less favourable than that accorded to like 
service suppliers of cooperative countries.104 
g. Measure 7 (requirements for the registration of branches) is inconsistent with 
Argentina's obligations under Article II:1 of the GATS, inasmuch as it establishes 
additional requirements which alter the conditions of competition and accords less 
favourable treatment to service suppliers of non-cooperative countries compared to service suppliers of cooperative countries.
105 
h. Measure 8 (foreign exchange authorization requirement) is inconsistent with Argentina's 
obligations under Article II:1 of the GATS, inasmuch as it accords service suppliers of non-cooperative countries seeking to repatriate their investments in Argentina less favourable treatment than that accorded to like service suppliers of non-cooperative 
countries.
106 
3.2.  Panama further requests, pursuant to Article 19.1 of the DSU, that: 
a. The Panel recommend that Argentina bring its measures into conformity with its WTO 
obligations107, and that 
b. The Panel make suggestions regarding implementation of the recommendations made 
pursuant to the authority given by the second sentence of Article 19.1 of the DSU108 
and, more concretely, suggest "the elimination of the less favourable treatment of the 
goods and services" of non-cooperative countries as the most appropriate way of bringing the challenged measures into conformity with Argentina's obligations under the GATS and the GATT 1994.
109 
3.3.  Argentina requests that the Panel reject Panama's claims in this dispute in their entirety.110 
4  ARGUMENTS OF THE PARTIES 4.1.  The arguments of the parties are reflecte d in their executive summaries, provided to the 
Panel in accordance with paragraph 20 of th e Working Procedures adopted by the Panel 
(see Annexes B-1 and B-2). 
5  ARGUMENTS OF THE THIRD PARTIES 
5.1.  The arguments of the Kingdom of Saud i Arabia, Brazil, the United States and the 
European Union are reflected in their executive summaries provided to the Panel in accordance 
with paragraph 21 of the Working Procedures adopted by the Panel (see Annexes C-1, C-2, C-3 and C-4). Australia, China, Ecuador, Guatemala, Honduras, India, Oman and Singapore did not 
submit written arguments to the Panel. 
6  INTERIM REVIEW 6.1  Introduction 
6.1.  On 22 May 2015, the Panel submitted its Interim Report to the parties. On 5 June 2015, 
Panama informed the Panel that it did not intend to request a review of any precise aspects of the Interim Report. Argentina did submit a written re quest for the review of precise aspects of the 
                                               
104Panama's first written submission, para. 5.1.f; se cond written submission, para. 3.1.f. See also 
Panama's request for establis hment of a panel, p. 7. 
105 Panama's first written submission, para. 5.1.g; second written submission, para. 3.1.g. See also 
Panama's request for establis hment of a panel, p. 6. 
106 Panama's first written submission, para. 5.1.h; second written submission, para. 3.1.h. See also 
Panama's request for establis hment of a panel, p. 7. 
107 Panama's first written submission, para. 5. 2; second written submission, para. 3.1. 
108 Panama's first written submission, para. 5. 3; second written submission, para. 3.1. 
109 Panama's first written submission, para. 5. 4; second written submission, para. 3.1. 
110 Argentina's first written submission, para. 756; second written submission, para. 102. WT/DS453/R 
 
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  Interim Report. Neither party requested an interim review meeting. On 12 June 2015, Panama 
submitted comments on Argentina's request for review. 
6.2.  In accordance with Article 15.3 of the DSU, this section of the Report contains the Panel's 
response to Argentina's request, made at the interim review stage, that precise aspects of the 
Report should be reviewed. The Panel modified aspects of its Report in the light of the parties' 
comments where it considered it appropriate, as  explained below. The Panel also corrected a 
number of typographical and other non-substantive errors, including those identified by Argentina. 
References to sections, paragraph numbers and footnotes in this section relate to the 
Interim Report. Where appropriate, references to the paragraphs and footnotes to the Panel Report to be circulated to Members are included. 
6.2  The question of whether measur e 5 covers retrocession services 
6.3.  With regard to paragraph 7.37, Argentina requests the inclusion of part of its response to 
Panel question No. 64. Argentina argues that the Panel had not added this response to the paragraph despite having addressed the question of retrocession services and the scope of the 
Note contained in Chapter III of SSN Resolution No. 35.615. Panama makes no objection in this 
regard. The Panel notes that paragraph 7.37 does include part of Argentina's response to this question from the Panel, as indicated in footnote 149. Nevertheless, the Panel sees no impediment 
to expanding the summary of Argentina's response to Panel question No. 64, as reflected below in 
paragraph 7.37 of its Report. 
6.3  Panama's claims under Article II:1 of the GATS 6.4.  With regard to paragraph 7.45, Argentina co nsiders that there is an error of syntax in the 
Spanish text of the paragraph's second sentence and suggests alternative wording. Panama has no 
objections in this regard. The Panel notes that the text in question is in the third sentence of paragraph 7.45. To avoid confusion, the Panel ha s modified the wording of that sentence in 
paragraph 7.45 of its Report. 
6.5.  Concerning paragraphs 7.142 and 7.280, Argentina requests that additional text be included 
to reflect the scope of its arguments. Panama considers that the text added by Argentina is 
repetitive because it is already contained in paragraph 7.141. The Panel agrees with Panama that 
the inclusion of all of the text suggested by Arge ntina could be redundant. Accordingly, the Panel 
will complete the first sentence of paragraph 7.141 of its Report along the lines of the relevant text in Argentina's first written submission. The Panel considers, however, that the text of 
paragraph 7.280 should not be modified because it refers solely to the no less favourable 
treatment obligation in Article II:1 of the GATS. 
6.6.  With regard to paragraph 7.164, and footnotes 324 and 325 in particular, Argentina requests 
the inclusion of references to its responses to Panel questions. Panama makes no objection in this 
regard. The Panel considers Argentina's request to be pertinent and therefore adds the references 
requested to footnotes 325 and 326 of its Report. 
6.7.  Regarding paragraph 7.189, and footnote 361 in particular, Argentina requests the Panel to 
add another paragraph to the reference in this footnote. Panama makes no objection in this regard. The Panel accepts the request and, therefore, modifies footnote 362 of its Report. 
6.8.  With reference to paragraph 7.355, Argentina requests the addition of a sentence and 
accompanying footnote explaining its position wi th respect to the application of the GATS to 
measure 8. Panama makes no objection in this regard. The Panel considers that the second sentence of paragraph 7.355 already adequately reflects Argentina's position in this respect. 
Nevertheless, the Panel deems it useful to supplement the relevant references in footnote 528 of 
its Report. 
6.9.  With regard to paragraphs 7.280, 7.296, 7.305, 7.313, 7.325, 7.333, 7.343 and 7.355, 
Argentina considers that its arguments have not been reproduced in full and asks the Panel to add 
an identical phrase (and the corresponding footnote ) on the relevance of the legitimate regulatory 
distinctions, for the purpose of examining no less favourable treatment, to each and every one of 
the aforementioned paragraphs. Panama makes no objection in this regard. The Panel notes that WT/DS453/R 
 
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  the reference cited by Argentina in the footnote it wishes to add refers to an entire section of its 
first written submission (Section III.D), without specifying any paragraph in particular, and to paragraph 7.142 of the Panel's Report. The Panel considers that this paragraph adequately reflects Argentina's arguments in this respect and that it is therefore not necessary to repeat them, as 
requested by Argentina. 
6.10.  As regards paragraphs 7.292, 7.301, 7.309, 7.319, 7.329, 7.339, 7.351 and 7.360, 
Argentina asks that the last sentence of these paragr aphs in relation to the updating of the list of 
cooperative countries be modified. Panama considers that such a change is not appropriate 
because the wording proposed by Argentina refers to the way in which the Panel assessed the facts and not to Argentina's arguments. The Panel shares Panama's view and does not therefore consider it appropriate to make the modifications suggested by Argentina. 
6.4  Panama's claims under Article XVII of the GATS 
6.11.  With reference to paragraph 7.524, Argentina requests that the text of the Panel's 
conclusion be modified. Panama considers that the modification requested by Argentina is of 
dubious value from the syntactical standpoint even  though it is not opposed to changes in the 
wording of this paragraph to make it easier to understand. The Panel understands the confusion which its conclusion might cause because of the us e of the terminology of Article XVII ("treatment 
no less favourable") and agrees with Argentina on the need to make the modification requested. 
The Panel is therefore modifying paragraph 7.524 of its Report. 
6.5  Argentina's defence under Article XIV(c) of the GATS 
6.12.  As regards paragraph 7.526, Argentina requests that a sentence be added concerning the 
Panel's findings under Article XVII of the GATS. Panama objects to such an insertion because 
Argentina is proposing to add a finding by the Panel to a paragraph which explains Argentina's arguments on its defence under Article XIV(c) of the GATS. The Panel agrees with Panama and 
hence does not consider the modification requested by Argentina to be pertinent. 
6.13.  With regard to paragraphs 7.635, 7.636 and 7.639, Argentina requests modifications to the 
text in order to clarify the principle of tax equality. Panama is opposed because it considers that in 
these paragraphs the Panel is examining an ex hibit submitted by Panama and Argentina is 
attempting to introduce an assessment of the facts that differs from that of the Panel. The Panel agrees with Panama and hence does not consider the modifications requested by Argentina to be pertinent. 
6.14.  Concerning paragraph 7.753, and footnote 916 in particular, Argentina requests that the 
reference be completed in order to reflect fully its arguments on the designation of countries that have initiated negotiations on the signature of a tax information exchange agreement as 
cooperative countries. Panama makes no objection in this regard. The Panel sees no problem in 
adding the reference requested and therefore amends footnote 918 of its Report. 
6.6  Argentina's defence under Article XIV(d) of the GATS 
6.15.  With respect to paragraphs 7.780 and 8.5, Argentina requests the Panel to modify the 
explanation of its conclusion on the irrelevance of the analysis of Argentina's defence under Article XIV(d) of the GATS. Panama makes no objections in this regard. The Panel agrees with Argentina on the relevance of the suggested ch ange to these paragraphs, but prefers to use 
slightly different language to that proposed. Th e Panel therefore modifies paragraphs 7.780 and 
8.5 of its Report. 
6.7  Argentina's defence under paragraph 2(a)  of the Annex on Financial Services (the 
prudential exception) 
6.16.  As regards paragraph 7.781 and footnote 949, Argentina requests that the wording of this 
paragraph be modified to clarify the scope of Arge ntina's defence in relation to measures 5 and 6 
under the prudential exception. Argentina also requ ests that the existing reference in footnote 949 
be supplemented. Panama does not object to th is. The Panel therefore considers the suggested WT/DS453/R 
 
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  changes by Argentina to be pertinent and thus modifies paragraph 7.781 and footnote 951 of its 
Report. 
6.17.  With regard to paragraph 7.787, Argentina requests the addition of its arguments under the 
prudential exception in relation to the claims under Articles XVI:1 and XVI:2(a) of the GATS. 
Panama considers that this amendment interrupts the flow of the text. The Panel considers the 
amendment proposed by Argentina in order to complete its arguments to be pertinent and therefore adds a new paragraph 7.788 to its Report. 
6.18.  In connection with paragraph 7.898 and footnote 1129, Argentina requests that "to 
guarantee the integrity of the market" be included as a prudential reason for measure 5. Panama makes no comments in this regard. The Panel accepts Argentina's suggestion and therefore amends paragraph 7.899.   and footnote 1134 of its Report. 
6.19.  With regard to paragraph 7.900, Argentina requests that a reference be added in a footnote 
where the Panel cites the Association of Latin American Insurance Supervisors (ASSAL). Panama makes no objection in this regard. The Panel ag rees to Argentina's request and includes a new 
footnote 1140 in its Report. 
6.8  Panama's claims under Article I:1 of the GATT 1994 
6.20.  Concerning paragraph 7.960, Argentina requests the Panel to clarify its position with regard 
to the nature of measure 2. Panama does not make any comments in this regard. The Panel 
accepts Argentina's suggestion and therefore modifies paragraph 7.961, adding footnote 1215 to its Report. 
6.21.  With regard to paragraph 7.967 and footnote 1228, Argentina requests the Panel to 
complete the references in footnote 1228 of its Interim Report. Panama does not make any 
comments in this regard. The Panel accepts Ar gentina's suggestion and therefore amends 
footnote 1236 of its Report. 
6.22.  As regards paragraph 7.985, Argentina requests the Panel to modify its reading of certain 
case law. Panama objects to the modification suggested by Argentina, which it does not consider to be pertinent. The Panel considers that the modi fication requested by Argentina alters the Panel's 
reading of the case law in question and therefor e rejects the modification of this paragraph. 
6.23.  Argentina requests the Panel to amend certain terms in paragraphs 7.988 and 7.996. 
Panama objects to the change suggested by Ar gentina, considering it unnecessary. The Panel 
considers that the changes proposed by Argentina are appropriate as they make the Panel's 
reasoning clearer. The Panel therefore amen ds paragraphs 7.989 and 7.997 of its Report. 
6.24.  As regards paragraph 7.989, Argentina requests the inclusion of a footnote so that its 
arguments on the requirement to keep supporting documents for transactions are reflected in full. 
Panama submits no comments in this regard. Th e Panel accepts Argentina's request and therefore 
inserts footnote 1264 in its Report. 
6.9  Argentina's request for editor ial and typographical amendments 
6.25.  Argentina requests a series of editorial an d typographical amendments to paragraphs 7.191, 
7.244 and 7.621, 7.568, 7.617, 7.869 (and footnote 1084) and 7.1054. Panama does not object to Argentina's request regarding the aforemention ed paragraphs. The Panel accepts Argentina's 
request in respect of most of the aforemention ed paragraphs, except for the references to 
Article 15 of the LIG for practical reasons, and paragraph 7.191 the wording of which remains 
unchanged for grammatical reasons. 
7  FINDINGS 
7.1  Preliminary issues 
7.1.  Before starting to examine the various claims submitted by Panama and the defence put 
forward by Argentina, the Panel wishes to clarify the scope of its terms of reference in these WT/DS453/R 
 
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  proceedings. We shall begin by examining the claim made by Argentina in its first written 
submission according to which Panama, in its first written submission, allegedly brought up a new dispute, different from the one that was the subject of its request for consultations. 
7.2.  We shall continue with two questions that concern one of the measures at issue, measure 5 
(requirements relating to reinsurance services). The Panel considers, in particular, that it should 
pronounce itself on what aspects of measure 5 fall within its terms of reference and whether or not retrocession services are included in this measure. 
7.3.  We shall commence by examining whether, as asserted by Argentina, Panama raised a new 
issue in its first written submission. 
7.1.1  The question of whether Panama raised  a new issue in its first written submission 
7.4.  In its first written submission, Argentina alleges that "[i]n its first written submission, 
Panama decided to bring up a new dispute, diff erent from the one that was the subject of the 
request for consultations".
111 According to Argentina, the disp ute that was the subject of the 
request for consultations "referred to  'certain measures imposed by Argentina that affect trade in 
goods and services. These measures only apply to trade conducted with specific countries listed in 
Decree No. 1344/1998 as amended by Decree No. 1037/00, which include Panama (hereinafter the 'listed countries')".
112 Even though Argentina does not appear to argue anything more in this 
respect, we consider that this matter should be clarified. 
7.5.  It is our understanding that this allegation by Argentina refers to the fact that the request for 
consultations (and the panel request) mentions Decree No. 1344/1988, as amended by Decree No. 1037/2000, which regulated the distinction between cooperative and non-cooperative 
countries
113, before being replaced by Decree No. 598/2013, which is the Decree that currently 
regulates this distinction. Panama refers to the latter in its written submissions and other pleadings. 
7.6.  We shall therefore consider whether this ch ange in the reference to the system regulated by 
Decree No. 1037/2000, which came to be regulated by Decree No. 589/2013 in the period between the request for consultations (and the pa nel request) and the submissions presented by 
Panama, means that Panama brought up "a new dispute, different from the one that was the 
subject of the request for consultations".
114 
7.7.  We begin by considering what the change in the Argentine regulations involved. In the 
first instance, Argentina excluded countries from its general regime by means of a positive 
exclusion system, in other words, those countries specifically mentioned in a list were excluded 
from the general treatment habitually granted by Argentina and were, therefore, made subject to 
the eight measures at issue in this dispute. Non-cooperative countries were listed in Decree 
No. 1344/1998.115 This was the situation at the time the Panel was established.116 At that time, 
Panama was one of the non-cooperative countries. 
7.8.  However, in early 2014, after this Panel had been established117 and composed118, Argentina 
amended Decree No. 1344/1998119, introducing a negative exclusion system such that only the 
countries included in a list – cooperative countries – would receive general treatment. Argentina thus moved from a system of positive exclusion lists (i.e. listing non-cooperative countries) to one 
                                               
111 Argentina's first written submission, para. 13. 
112 Argentina's first written submission, para. 13. (emphasis original) 
113 We recall that the term used in Decree No. 1344/1998, as amended by Decree No. 1037/2000, is 
"countries with low or no taxes". Decree No. 589/2013 replaces this term by "countries not considered 'cooperative for tax transparency purposes'" . See Exhibits PAN-1 and PAN-3 / ARG-35. 
114 Argentina's first written submission, para. 13. 
115 Decree No. 1344 establishing the Regulation to the Gains Tax Law, of 19 November 1998 (RIG), 
(Exhibit PAN-1). 
116 See para. 1.3 above. 
117 See para. 1.3 above. 
118 See para. 1.5 above. 
119 Decree No. 589/2013, amended Argentina's positive list system by replacing the 
seventh unnumbered article incorporated by Decree No. 1037/2000 after Article 21 of the RIG by a rule which defines countries considered cooperat ive for tax transparency purposes. WT/DS453/R 
 
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  of negative exclusion lists (listing cooperative countries). The list of cooperative countries in effect 
at the time its first written submission was presented included Panama, so it was not excluded from general treatment as it had been at the time of the request for consultations (and the establishment of this Panel). 
7.9.  We therefore agree with Argentina that the regulations governing determination of the 
categories of cooperative and non-cooperative countries in effect at the time of the request for consultations (and the panel request) were not the same as those referred to by Panama in its 
first written submission (and in its subsequent arguments). We shall now consider whether this 
change signifies, as Argentina claims, that Panama  has brought up a new and different dispute. By 
"new dispute" we understand that Argentin a means a new "matter referred to the DSB". 
7.10.  The legal provision governing what a "matter referred to the DSB" consists of is Article 7.1 
of the DSU.
120 This provision specifically refers to the document containing the panel request, 
governed by Article 6.2 of the DSU.121 The Appellate Body has explained that the "matter" consists 
of two elements: the measures at issue and the legal basis of the complaint.122 
7.11.  We recall that Decree No. 589/2013 is not a measure at issue. As explained in section 2.2 
above, however, Decree No. 589/2013 is the key element of the eight measures challenged by Panama because they all include the distinct ion between cooperative and non-cooperative 
countries established pursuant to that Decree. 
7.12.  In our view, this key role is the same as that performed by its predecessor, Decree 
No. 1037/2000, which is mentioned in the request for consultations and the panel request, although in that case the measures referred to the list of non-cooperative countries contained 
therein. 
7.13.  The foregoing leads us to the following conc lusions. On the one hand, as it does not concern 
measures at issue or obviously, the legal basis of the complaint, it is not possible to conclude that 
Panama's reference to Decree No. 589/2013 in its first written submission means that the matter 
has changed and that there is a new dispute. On the other hand, if we analyse the change that occurred in Argentina's regulations as a result of Decree No. 589/2013, this consists simply of the 
transition from a system of positive exclusion to one of negative exclusion. In other words, there is 
still one group of cooperative countries versus another group of non-cooperative countries. One additional element to be taken into account is th at this change in Argentina's legislation did not 
involve any change to the substance of the eight measures at issue, but merely adjustments of 
form to replace references to "jurisdictions with low or no taxes" in Decree No. 1037/2000 by 
"jurisdictions not considered 'cooperative for tax transparency purposes'" in Decree No. 589/2013.
123 
7.14.  We therefore consider that the change to the rules governing the system for deciding which 
countries are cooperative or non-cooperative did not involve any substantive change in the formulation of the eight measures at issue and, consequently, does not mean that in its first 
written submission Panama brought up "a new dispute, different from the one that was the subject 
of the request for consultations". Likewise, bearin g in mind our terms of reference, we consider 
that the change in this legislation does not prev ent us from examining the eight measures at issue 
in the light of the system introduced by De cree No. 589/2013 inasmuch as it distinguishes 
between cooperative and non-cooperative countries. 
                                               
120 Article 7.1 of the DSU provides as follows: 
Panels shall have the following terms of refe rence unless the parties to the dispute agree 
otherwise within 20 days from the establishment of the panel: 
"To examine, in the light of the relevant provisions in (name of the covered agreement(s) 
cited by the parties to the dispute), the matter  referred to the DSB by (name of party) in 
document ... and to make such findings as will assist the DSB in making the recommendations or in giving the rulings pr ovided for in that/those agreement(s)." 
121 See paragraph 7.23 below. 
122 Appellate Body report, Guatemala – Cement I , para. 72. 
123 Decree No. 589/2013 replaces the references to "countries with low or no taxes" contained in the 
Gains Tax Law and the Regulation thereto by "countries  'not considered cooperative for tax transparency 
purposes'". Article 1 of Decree No. 589/2013, (Exhibits PAN-3 and ARG-35). WT/DS453/R 
 
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  7.15.  In view of the foregoing, we conclude that the replacement of Decree No. 1344/1998, as 
amended by Decree No. 1037/2000, by Decree No. 589/2013 does not prevent us from examining 
the eight measures at issue in the light of  the system introduc ed by Decr ee No. 589/2013 
inasmuch as it distinguishes between cooperative and non-cooperative countries. 
7.1.2  Aspects of measure 5 included in our terms of reference 
7.1.2.1  Introduction 7.16.  Measure 5 has been the subject of develo pment and legislative amendments which occurred 
before and after the establishment of this Panel. In this section, we shall examine these changes 
and decide to what extent they are relevant for the purposes of our terms of reference. 
7.1.2.2  Development and amendment of measure 5 7.17.  In its panel request, Panama states that measure 5 is applied pursuant to SSN Resolution 
No. 35.615/2011.
124 In its first written submission, Panama also refers to SSN Resolution 
No. 35.794/2011, which is not mentioned in its panel request. As explained in the descriptive part of this Report
125, Article 4 of SSN Resolution No. 35.794/2011 develops point 19 of Annex I to SSN 
Resolution No. 35.615/2011, allowing cross-border su pply (mode 1) of reinsurance services in the 
Argentine market for individual risks exceeding US$50 million but only for the portion which exceeds that amount.
126 In response to a question from the Panel, both parties agreed that SSN 
Resolution No. 35.794/2011 is a relevant legal instrument for evaluating the measure challenged 
by Panama and thus forms part of this Panel's terms of reference.127 
7.18.  On 21 March 2014, after this Panel had been established, Argentina amended SSN 
Resolution No. 35.615/2011 by means of SSN Resolution No. 38.284/2014, replacing points 18 
and 20(f) of Annex I to SSN Resolution No. 35.615/2011.128 The new wording of these points, as 
amended, is explained in detail in th e descriptive part of this Report.129 In its second written 
submission, Panama explains that its panel request identified SSN Resolution No. 35.615/2011 and 
"any possible amendments, extensions or additions", for which reason, in its opinion, the 
amendment to SSN Resolution No. 35.615/2011 in troduced by SSN Resolution No. 38.284/2014 
forms part of this Panel's terms of reference.130 Consequently, as of its second written submission, 
Panama adapted its arguments with respect to this measure, taking into account the amendments 
introduced by SSN Resolution No. 38.284/2014. Argentina, for its part, does not object to the inclusion of SSN Resolution No. 38.284/2014 in the Panel's terms of reference and refers to this Resolution in its arguments.
131 
7.19.  On 6 November 2014, Argentina adopted SSN Resolution No. 38.708/2014 which, according 
to Argentina, provides for a regulatory reform of the reinsurance sector.132 In its responses to 
questions from the Panel in connection with the second substantive meeting, Argentina explained 
that point 2.1.1 of the Annex to this Resolution  includes the rules contained in SSN Resolutions 
Nos. 35.615, 35.726, 35.794, 36.266, 36.332, 36.859 and 38.284.133 In its comments on 
                                               
124 Panama's request for the establishment of a panel, pp. 5 and 6. 
125 See paras. 2.28-2.29 above. 
126 Panama's second written submission, paras. 2.585 and 2.586. See also SSN Resolution 
No. 35.794/2011, (Exhibits PAN-40 / ARG-48). 
127 Panama's response to Panel question No. 61 and Argentina's response to the same question. 
128 See para. 2.30 above. 
129 See para. 2.30 above. 
130 Panama's second written submission, para. 2.576 (referring to its request for the establishment of a 
panel, p. 7). 
131 We note that Argentina was in fact the first to me ntion this Resolution when clarifying that "in order 
to adapt the regulations on reinsurance to the new rule established by Decree No. 589/2013, the SSN issued Resolution No. 38.284/2014, which partly amends Resolution No. 35.615/2011, challenged by Panama as of 25 March 2014". See Argentina's first written submission, para. 411. 
132 Argentina's response to Panel questions Nos. 61, 64 and 66. 
133 Argentina's response to Panel question No. 66(a), f ootnote 25. Argentina clarif ies in response to this 
question from the Panel that "[a]lthough the aforementi oned SSN Resolution No. 38.708 does not specifically 
mention SSN Resolution No. 38.284, it should be understood that, in the first place, it has been tacitly repealed 
as it is a resolution partially amending SSN Resolution No. 35.615 and hence follows the fortunes of the main 
Resolution, to which it made amendments. Secondly, the text of Resolution No. 38.284 was incorporated into the new Regulation". WT/DS453/R 
 
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  Argentina's responses relating to the second su bstantive meeting, Panama did not challenge the 
explanation given by Argentina, nor did it request the Panel to include SSN Resolution No. 38.708/2014 in its terms of reference. The Pane l, therefore, will not consider this latest 
amendment in its analysis of Panama's claims relating to measure 5.
134 
7.20.  We therefore identify the two legal instruments which develop or amend SSN Resolution 
No. 35.615/2011, which are not mentioned in the panel request and which, according to Panama's arguments, form part of our terms of reference: SSN Resolution No. 35.794/2011 and SSN 
Resolution No. 38.284/2014. 
7.21.  Although Argentina is not opposed to the inclusion of these instruments in our terms of 
reference, given that the identification of the me asure is of key relevance to our jurisdiction, we 
are duty bound to examine whether the measures at issue have been identified with sufficient 
precision, in the light of Article 6.2 of the DSU
135, to enable both Resolutions to be included in our 
terms of reference, as is requested by Panama. 
7.22.  Before considering the appropriateness of including these provisions in our terms of 
reference, we begin by examining the relevant legal provision. 
7.1.2.3  The relevant legal provision 7.23.  Article 6.2 of the 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 summary of the legal basis of the complaint sufficient to present the problem clearly. 
7.24.  The language of Article 6.2 of the DSU reveals "two key requirements" that a complainant 
must satisfy in its panel request, namely, the identification of the specific measures at issue, and the provision of a brief summary of the legal basis of the complaint (i.e. the claims) that is 
sufficient to present the problem clearly.
136 This provision, therefore, serves a "pivotal function"137 
in WTO dispute settlement by defining "the scope of the dispute between the parties, thereby establishing and delimiting the panel's jurisdic tion and serving the due process objective of 
notifying the respondent and third parties of the nature of the case".
138 As stated by the Appellate 
Body in US – Carbon Steel , compliance with the requirements of Article 6.2 "must be determined 
on the merits of each case, having considered th e panel request as a whole, and in the light of 
attendant circumstances".139 The Appellate Body added in this connection that the examination of 
the panel request must be based "on its face as it existed at the time of its filing".140 
7.25.  In the present case, our examination focuses on compliance with the first key requirement 
in respect of the two measures not included in the panel request but which, in principle, develop or 
amend one of the measures included in the request. 
                                               
134 In any event, the Panel points out that the ev idence on this new SSN Resolution No. 38.708/2014 
was included on the record of these proceedings after the second substantive meeting, so the parties had no 
opportunity to put forward thei r arguments in this regard. 
135 Appellate Body Report, US – Carbon Steel , para. 123. We also recall that the Appellate Body has 
clarified that "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". See Appellat e Body Report, US – 1916 Act , footnote 30. We agree with the panel in US – Upland Cotton 
that the specific identification of the measures at issue is a question which goes to our jurisdiction and does not 
depend on whether a party re quests a ruling in a timely manner. See Panel Report, US – Upland Cotton , 
para. 7.153. 
136 Appellate Body Report, China – Raw Materials , para. 219. Article 6.2 of the DSU also requires that 
the panel request be made in writing and in dicate whether any consultations were held. 
137 Appellate Body Report, China – Raw Materials , para. 219. 
138 Appellate Body Report, Argentina – Import Measures , para. 5.39 (citing A ppellate Body Report, 
US - Countervailing and Anti-Dumping Measures (China) , paras. 4.6 and 4.7). 
139 Appellate Body Report, US – Carbon Steel , para. 127. 
140 Appellate Body Report, Argentina – Import Measures , para. 5.48 (citing Appe llate Body Report, 
US - Countervailing and Anti-Dumping Measures (China) , para. 4.9). WT/DS453/R 
 
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  7.26.  The Appellate Body has explained that, in order for changes introduced into a measure after 
establishment of a panel to be considered as part of its terms of reference, such changes must not 
have altered the "essence" of the measure. The Ap pellate Body considered that "[i]f the terms of 
reference in a dispute are broad enough to include amendments to a measure … and if it is 
necessary to consider an amendment in order to secu re a positive solution to the dispute … then it 
is appropriate to consider the measure as amended in coming to a decision in a dispute."141 
7.27.  In this connection, as pointed out by Panama with regard to SSN Resolution 
No. 38.284/2014, its panel request refers to "any possible amendments, extensions or additions". 
We shall therefore examine whether this referenc e to "any possible amendments, extensions or 
additions" is sufficient for the changes introduced by SSN Resolution No. 35.794/2011 and SSN Resolution No. 38.284/2014 to be considered within our terms of reference, in the light of the 
circumstances of this case in particular, and whether the resolutions in question do not alter the 
essence of SSN Resolution No. 35.615/2011. 
7.28.  We start by examining the relationship  between SSN Resolution No. 35.794/2011 and SSN 
Resolution No. 35.615/2011. As explained in the descriptive section
142, Article 4 of SSN Resolution 
No. 35.794/2011, in particular, provides as follows: 
For the purposes of point 19 of Annex I to SSN Resolution No. 35.615, it is stipulated 
that individual risks exceeding US$50,000,000 (FIFTY MILLION UNITED STATES 
DOLLARS) may be reinsured with the reinsura nce entities mentioned in point 20 of the 
aforementioned regulations ("approved reinsurers"), for that portion which exceeds the aforementioned amount. 
7.29.  We note that this provision, which contains an explicit reference to point 19 of Annex I to 
SSN Resolution No. 35.615/2011, develops this point by introducing the magnitude of the 
individual risk which may be reinsured with foreign reinsurance entities: US$50,000,000 
(fifty million United States dollars). Article 4 also  provides that the reinsurance shall be "for that 
portion which exceeds the aforementioned amount". It is our understanding that this development 
does not alter the "essence" of measure 5 because it  continues to regulate the cross-border supply 
of reinsurance services, in other words, the delivery of a service in the same sector, and through 
the same mode of supply (i.e. cross-border supply or mode 1). 
7.30.  As regards the relationship between SSN Resolution No. 38.284/2014 and SSN Resolution 
No. 35.615/2011, the text of the former stipulates in relevant part: 
ARTICLE 1: Replace point 18 of ANNEX I to SSN Resolution No. 35.615/2011 by the 
following: 
"Branches of foreign companies must prove that the parent company: 
(a) Has been incorporated and registered in countries, dominions, jurisdictions, 
territories or associate States considered to be 'cooperative for tax transparency purposes', in accordance with the provisions of Decree No. 589/2013 and 
supplementary regulations. 
If the parent company of the branch of the foreign company has not been 
incorporated and registered in accordance with the terms of the previous paragraph, it must prove that it is subject to the cont rol and supervision of a body which fulfils 
functions similar to those of the NATI ONAL INSURANCE SUPERVISORY AUTHORITY, 
and with which a memorandum of understanding on cooperation and exchange of information has been signed. 
(b) Has been incorporated and registered in countries, dominions, jurisdictions, 
territories or associate States that cooperate in the global fight against money laundering and terrorist financing offences, in accordance with the criteria defined in 
the public documents issued by the FINANCIAL ACTION TASK FORCE (FATF). 
                                               
141 Appellate Body Report, Chile – Price Band System , para. 144. (emphasis original) 
142 See para. 2.28 above. WT/DS453/R 
 
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  If the parent company of the branch of the foreign company has not been 
incorporated and registered in accordance with the terms of the preceding paragraph, 
the assessment of the request for authorization shall be subject to enhanced due diligence, proportionate to the risks, and the counter-measures indicated in 
Recommendation 19 of the FINANCIAL ACTION TASK FORCE (FATF) and the 
Interpretive Note thereto may be applied." 
ARTICLE 2 - Replace subparagraph (f) of point 20 of ANNEX I to SSN Resolution 
No. 35.615 by the following: 
"(f) Prove that they have been incorporated and registered in: I. Countries, dominions, jurisdictions, territories or associate States considered 
'cooperative for tax transparency purposes', in accordance with the provisions of 
Decree No. 589/2013 and supplementary regulations. 
If they have not been incorporated and regi stered in accordance with the terms of the 
preceding paragraph, they must prove th at they are subject to the control and 
supervision of a body which fulfils functions similar to those of the NATIONAL 
INSURANCE SUPERVISORY AUTHORITY, and with which a memorandum of understanding on cooperation and exchange of information has been signed. 
II. They have been incorporated and register ed in countries, dominions, jurisdictions, 
territories or associate States that cooperate in the global fight against money laundering and terrorist financing offences in accordance with the criteria defined in the public documents issued by the FINANCIAL ACTION TASK FORCE (FATF). 
If they have not been incorporated and regi stered in accordance with the terms of the 
preceding paragraph, the assessment of the request for authorization shall be subject 
to enhanced due diligence, proportionat e to the risks, and the counter-measures 
indicated in Recommendation 19 of the FI NANCIAL ACTION TASK FORCE (FATF) and 
the Interpretive Note thereto may be applied." 
7.31.  We note that Articles 1 and 2 of the aforem entioned Resolution replace the text of points 18 
and 20(f) of Annex I to SSN Resolution No. 35.615/2011. The remainder of SSN Resolution 
No. 35.615/2011 remains unchanged, except for the development introduced by SSN Resolution No. 35.794/2011. 
7.32.  As explained in the descriptive part of this  Report, the new text of points 18 and 20(f) of 
SSN Resolution No. 35.615/2011 lifts the ban on supplying reinsurance services through 
cross-border trade and commercial presence for entities of countries that do not cooperate for the purposes of tax transparency and the global fight against money laundering and terrorist financing 
offences according to the FATF's criteria. Instead, the new text of points 18 and 20(f) provides for 
the possibility of supplying such services provided  that the parent companies of the branches of 
companies of non-cooperative countries (mode 3) and the reinsurance entities that deliver their 
services directly from non-cooperative countries (mode 1) comply with certain requirements. It is 
our understanding that such an amendment made by means of SSN Resolution No. 38.284/2014 does not alter the "essence" of measure 5 becaus e it continues to regulate the delivery of the 
same service in the same sector and through the same modes of supply. 
7.33.  Consequently, we consider it appropriate for us to rule on measure 5, as developed by 
Article 4 of SSN Resolution No. 35.794/2011 and in  accordance with the amendment introduced by 
SSN Resolution No. 38.284/2014 in order to "secure a positive solution to the dispute" and to 
make "sufficiently precise recommendations and rulings so as to allow for prompt compliance".
143 
Furthermore, as we have already indicated, the parties to this dispute do not object to our doing so.
144 
                                               
143 Appellate Body Report, Chile – Price Band System , para. 143. 
144 See paras. 7.20-7.21 above. WT/DS453/R 
 
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  7.34.  In the light of the foregoing, we conclude that measure 5, as developed by Article 4 of SSN 
Resolution No. 35.794/2011 and in accordance with  the amendment introduced by SSN Resolution 
No. 38.284/2014, forms part of this Panel's terms of reference. 
7.1.3  The question of whether meas ure 5 covers retrocession services 
7.35.  We shall now consider the scope of the services covered by measure 5. The parties 
disagree, in particular, on the scope of measure 5 with regard to retrocession services. On the one hand, Panama considers that such services are governed by measure 5 and relies in this regard on 
a note contained in Chapter III of SSN Resolution No. 35.615/2011, which provides that 
"[h]ereinafter, the scope of the terms reinsurance and reinsurer shall extend to the terms retrocession and retrocessionaire at all levels" for the purposes of that Resolution.
145 We recall that 
only points 18, 19 and 20(f) in Chapter IV of Annex I to SSN Resolution No. 35.615/2011 are part 
of measure 5. According to Panama, the note applies to the whole of SSN Resolution 
No. 35.615/2011.146 
7.36.  Argentina, on the other hand, in its first written submission, contends that retrocession 
services are not included within the scope of measur e 5, as "the retrocession  regime … is regulated 
in SSN Resolution No. 35794, which was not contested by Panama in this case".147 This statement, 
however, appears to contradict Argentina's response to a question from the Panel in which it 
explains, in connection with measure 5, that the "measure identified by Panama refers specifically 
to the delivery of reinsurance and retrocession services"148 and confirms that "Argentina considers 
that, by virtue of the measure identified by Panama in its panel request …, SSN Resolution No. 35794 forms part of the Panel's terms of reference".
149 
7.37.  Despite the foregoing, in response to a question from the Panel, Argentina explained that 
the note contained in Chapter III of Annex I to SSN Resolution No. 35.615/2011 only applies to that Chapter, which deals exclusively with intermediaries.
150 Argentina explains that Chapter III, 
including the aforementioned note, was entirely incorporated into SSN Resolution No. 35.615/2011 
by SSN Resolution No. 36.266/2011. Thus, according to Argentina, the content of this note does 
not inform the provisions of Chapter IV, which include the relevant points in relation to measure 5. 
7.38.  Our work, therefore, consists of decidi ng whether the note contained in Chapter III of 
Annex I to SSN Resolution No. 35.615/2011 informs not only the provisions of Chapter III but also 
those which compose measure 5 and which are included  in Chapter IV. The scope of that note will, 
therefore, determine whether retrocession services fall within the scope of measure 5. 
7.39.  In US – Carbon Steel , the Appellate Body clarified what elements a panel must examine in 
order to determine the meaning of the municipal la w and indicated that those elements vary from 
one case to another.151 The Appellate Body explained that, whereas in some cases the text of the 
relevant legislation may suffice to clarify the scope and meaning of the relevant legal instruments, 
in other cases the complainant will also need to support its understanding of the scope and meaning of such legal instruments with "evidence of the consistent application of such laws, the 
                                               
145 Panama's first written submission, footnote 311 (citing Exhibit PAN-36). 
146 Panama contends that "according to the Note co ntained in Chapter III of SSN Resolution No. 35.615 
… 'the scope of the terms reinsurance and reinsurer exte nds to the terms retrocession  and retrocessionaire at 
all levels', for the purposes of that Resolution . See Panama's first written submission, footnote 311 (citing 
Exhibit PAN-36). (emphasis added) 
147 Argentina's first written submission, para. 443. (footnote omitted) 
148 Argentina's response to Panel question No. 61. 
149 Argentina's response to Panel qu estion No. 61. (footnote omitted) 
150 Argentina's response to Panel question No. 64. 
151 The Appellate Body found as follows: 
The party asserting that another party's municipal law, as such, is inconsistent with relevant 
treaty obligations bears the burden of introducing evidence as to the scope and meaning of such law to substantiate that assertion. Such evidence will typically be produced in the form of the text of the relevant legislation or legal instrume nts, which may be supported, as appropriate, by 
evidence of the consistent application of such laws, the pronouncements of domestic courts on 
the meaning of such laws, the opinions of legal experts and the writings of recognized scholars. The nature and extent of the evidence required to satisfy the burden of proof will vary from case 
to case. 
See Appellate Body Report, US – Carbon Steel , para. 157. (footnote omitted) See also Appellate Body 
Report, US – Countervailing and Anti-Dumping Measures (China) , para. 4.92. (footnote omitted) WT/DS453/R 
 
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  pronouncements of domestic courts on the meaning of such laws, the opinions of legal experts and 
the writings of recognized scholars".152 In the present case, Panama has only provided us with the 
text of the Argentine legislation in question. We shall therefore consider whether the actual 
wording of the legislation is sufficiently clear to  determine whether measure 5 covers retrocession 
services. 
7.40.  We start by considering the note at the beginning of Chapter III of Annex I to SSN 
Resolution No. 35.615/2011153, which, as we have already stated, stipulates the following: 
CHAPTER III. INTERMEDIARIES 
(Chapter replaced by Article 1 Resolution  No. 36.266/2011 of the National Insurance 
Supervisory Authority, O.J. 23/11/2011) 
Note: Hereinafter the scope of the terms rein surance and reinsurer shall extend to the 
terms retrocession and retrocessionaire at all levels. 
7.41.  We observe that the note in question is pl aced just below the title of Chapter III which, by 
its own terms, is intended to regulate intermediaries, and below a clarification in brackets 
concerning the latest regulatory developments affecting Chapter III. We also observe that the 
Chapter in question is found within the Regulatory Framework for Reinsurance contained in Annex I to SSN Resolution No. 35.615/2011, which only consists of four chapters. After 
Chapter III, entitled "Intermediaries", there is only one more chapter, Chapter IV, entitled 
"General Provisions", in which the provisions composing measure 5 are to be found. 
7.42.  The Panel notes that the terms retrocession and retrocessionaire are not defined in SSN 
Resolution No. 35.615/2011. Among the exhibits furnis hed by the parties, we find a definition of 
the concept of retrocession in the "Introduction to Reinsurance" of the MAPFRE Foundation. This 
document defines retrocession as "reinsurance ceded by a reinsurer to another insurance or reinsurance company in order to release a part of the risks it has written and, in this way, 
stabilizing its results and homogenizing its liabilities. It is reinsurance for the reinsurer".
154 
7.43.  In considering the wording of the note at  the beginning of Chapter III, we understand that 
the pertinent question is the interpretation of the words " en adelante " (hereinafter). The 
Diccionario panhispánico de dudas of the Spanish Royal Academy defines " en adelante " as " a partir 
del momento que se toma como referencia " [from the moment taken as reference].155 We see that 
the note in question does not limit the extens ion of the scope of the terms reinsurance and 
reinsurer to the terms retrocession and retrocessionaire at all levels. The note could, for example, 
explicitly limit this extension to the purposes of Chapter III or some of its provisions. Accordingly, 
the note in itself appears to indicate that it applies to Annex I as from the moment it appears in the text, which would give cause to think that it could also include Chapter IV. In this connection, 
Panama's interpretation that this note applies to the whole of SSN Resolution No. 35.615/2011, 
which would also include the chapters preceding Chapter III, does not appear to us to be correct. On the contrary, the note in question applies "hereinafter", in other words, from the moment it 
appears in the text of SSN Resolution No. 35.615/2011. We therefore have to decide whether the 
note applies only up to the end of Chapter III or, on the contrary, whether "hereinafter" also means that it applies to the provisions in Chapter IV and, hence, measure 5. 
7.44.  In order to resolve this question, we deem it useful to examine the title of Chapter III, 
which is "Intermediaries". In our view, the location of this note below the title and not in another 
part of the text indicates that its purpose is to sh ed light on the subject dealt with in this Chapter, 
                                               
152 Appellate Body Report, US – Carbon Steel , para. 157. In US – Countervailing and Anti-Dumping 
Measures (China) , referring to its report in US – Carbon Steel , the Appellate Body explained that 
"in determining the meaning of municipal law, a panel may need to evaluate several elements, including the text of the law on its face, the pronouncements of domestic courts, and the pr actice of administering 
agencies". See Appe llate Body Report, US – Countervailing and Anti-Dumping Measures (China) , para. 4.92.  
153 Annex I to SSN Resolution No. 35.615/2011 contains the "Regulatory Framework for Reinsurance", 
as established by Article 1 of that Resolution. See SSN Resolution No. 35.615/2011, (Exhibits PAN-36 / 
ARG-27). 
154 MAPFRE Foundation, Introduction to reinsurance, (Exhibit PAN-35), p. 18. 
155 Diccionario panhispánico de dudas , 1st edition, Real Academia Española (Santillana, 2005), available 
at http://lema.rae.es/dpd/?key=adelante . WT/DS453/R 
 
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  namely, "intermediaries", from the moment (hereinafter) it appears in the text. We thus consider 
that the note in question applies to Chapter III an d Chapter IV inasmuch as it concerns regulation 
of the activities of "intermediaries". It is our opinion that this focus would make possible an harmonious interpretation of Chapters III and IV. Accordingly, although we agree with Argentina 
that the extension of the scope of the terms reinsurance and reinsurance to include the terms 
retrocession and retrocessionaire at all levels pursuant to the note is limited to regulation of the intermediaries
156, we do not share its view that this conclusion would restrict the note to 
Chapter III. 
7.45.  Indeed, Chapter IV also includes provisio ns which mention the term "intermediary". As an 
example, point 10, entitled "Additional informatio n" refers to the solvency of the "registered 
intermediary". A reading of Chapter IV in its entirety shows that it does not include rules governing 
the registration of intermediaries. On the other hand, points 5 and 8 of Chapter III do include rules 
governing the registration of intermediaries in th e Register kept for the purpose by the Argentine 
National Insurance Supervisory Authority. In our view, in order to be able to understand the 
meaning of the concept of "registered intermediary" in point 10 of Chapter IV, it is necessary to 
look at the rules governing the registration of intermediaries in Chapter III. The inclusion of the reference to a "registered intermediary" in Chapter IV leads us to consider that the logical 
conclusion would be that the intermediaries referred to in relation to reinsurance in the general 
provisions of Chapter IV are the same as those regulated by Chapter III. We do not think it 
reasonable to interpret the note in a way which would suggest that Chapter III regulates the registration of intermediaries in respect of reinsurance and retrocession services, pursuant to the 
note, while Chapter IV applies only to intermediaries registered in accordance with Chapter III in 
respect of reinsurance services, excluding those registered in accordance with Chapter III in respect of retrocession services. 
7.46.  The note in question therefore informs th e provisions in Chapter IV, whose purpose is to 
regulate the activities of intermediaries. Consequently, in order to determine whether the note applies to the provisions of Chapter IV which compose measure 5, we need to ascertain whether 
the purpose of those provisions is to re gulate the activities of intermediaries. 
7.47.  First of all, we note that the "intermediar ies" referred to in both Chapter III and Chapter IV 
are not, in fact, direct suppliers of reinsuranc e or retrocession services. They are "agents" 
(referred to in point 6(l)(a) of Annex I to SSN Resolution No. 35.615/2011 and "brokers" 
(specifically mentioned in the preamble and points 5(d) and 5(f) of Annex I to SSN Resolution 
No. 35.615/2011, as well as in Annex II). In this connection, one of the preambular paragraphs specifically provides that "it is necessary to establish an appropriate regulatory framework for 
reinsurance brokers".
157 
7.48.  This is not the case, however, for the provisions composing measure 5. Point 18 of Annex I 
to SSN Resolution No. 35.615/2011 concerns "branches of foreign companies", while points 19 and 
20(f) of the same Resolution refer to "foreign reinsurance entities". In both cases, the provisions 
composing measure 5 regulate entities which provide reinsurance services directly. 
7.49.  Secondly, and as background to this discussion, we note that SSN Resolution 
No. 35.794/2011, Article 4 of which forms part of the Panel's terms of reference158, establishes a 
specific regulatory framework for the direct supply  of retrocession services, which differs from the 
provisions on reinsurance services in points 18, 19 and 20(f) of SSN Resolution No. 35.615/2011.
159 
7.50.  In the light of the foregoing, we conclude that measure 5 applies only to reinsurance 
services and does not, therefore, cover retrocession services. 
                                               
156 Argentina's response to Panel question No. 64. 
157 SSN Resolution No. 35.615/2011, (Exhibits PAN-36 / ARG-27). 
158 See the decision of the Panel in this regard in para. 7.33 above. 
159 Argentina's first written submission, paras. 443-446; and Argentina's response to Panel question 
No. 18. WT/DS453/R 
 
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  7.2  Order of analysis 
7.51.  Having established the boundaries of measure 5 in relation to our terms of reference, and 
before continuing with the claims put forwar d by Panama and the related defence arguments 
invoked by Argentina, we shall consider the order of our analysis. 
7.52.  As we explain in the descriptive part of this Report, in its panel request Panama presented 
claims under the GATS and the GATT 1994 relating to eight measures applied by Argentina. Panama considers that each of the challenged measures violates one or more specific provisions of 
the GATS and/or the GATT 1994. The provisio ns invoked by Panama under the GATS are 
Articles II:1, XVI:1, XVI:2(a) and XVII. Under the GATT 1994, Panama alleges that certain measures are inconsistent with Articles I:1, III:4 and XI:1. 
7.53.  In its defence, Argentina replies, inter alia, that its measures are justified by the exceptions 
relating to services in Articles XIV(c) and XIV( d) of the GATS and paragraph 2(a) of the GATS 
Annex on Financial Services, which contains the so-called "prudential exception"; as well as the exception in Article XX(d) of the GATT 1994 with regard to the claims under this Agreement.
160 
7.54.  The possibility that a measure may be inconsistent with the GATS and the GATT 1994 at the 
same time has already been accepted by the Appellate Body in previous disputes. Indeed, the Appellate Body considered that obligations under the GATS and the GATT 1994 may coexist
161 and 
that a measure may fall simultaneously within the scope of both Agreements, even though the 
specific aspects of the measure that are to be examined under each Agreement may differ.162 
7.55.  One issue we must resolve in regard to the legal claims is whether there is a specific 
sequence to be followed when examining Panama's  claims and Argentina's response. Inasmuch as 
Panama made claims under both the GATS and the GATT 1994, the first thing we have to decide is 
whether we should start our analysis by examin ing the claims made under the GATS or those 
made under the GATT 1994. We note that both pa rties began their arguments with the claims and 
corresponding defences under the GATS, before turning to the claims and defences under the 
GATT 1994. Once it is decided which Agreement to examine first, we have to settle the order of precedence of the provisions to be considered under each Agreement. 
7.56.  Together with the decision on which prov isions of which Agreement are to be examined 
first, we also face the task of deciding on the approach to be followed in our analysis. Panama urges us to examine its claims and Argentina's corresponding defences separately in relation to each measure at issue, which would lead us to repe at a large part of our analysis. In its view, this 
approach would give the Panel a better understanding of the facts and would help it to identify the 
relevance of the legal arguments. Panama also raised considerations of due process, arguing that it has requested findings, rulings, recommendations and, where applicable, suggestions for each of 
the measures at issue.
163 Argentina considers that, in view of the nature of Panama's claims in this 
dispute, it would be appropriate for the Panel to follow the order of analysis proposed by Panama.
164 
7.57.  We start by considering the order of analysis  that we must follow with regard to the claims 
under the GATS and the GATT 1994. As we have already indicated, both parties commence their arguments by referring to Panama's claims under  the GATS. We see no problem in following the 
order proposed by the parties, particularly bearing in mind that Panama's claims under the GATS 
are more numerous and cover all the measures at issue. 
7.58.  As is explained in detail in section 7.3.1 be low, even though Panama contends that the eight 
measures at issue are covered by the GATS, Argentina maintains that Panama has not established 
a prima facie case that the measures at issue are covered by the GATS as it has not proved that 
                                               
160 Argentina's first written submission, paras. 237-400, 551-568 and 745-751. See also first written 
submission, Explanatory Annex No. 2, paras. 52-73. 
161 Appellate Body Report, Canada – Periodicals , p. 20 (confirming the statement of the Panel; see Panel 
Report, Canada – Periodicals , para. 5.17). 
162 Appellate Body Report, EC – Bananas III , para. 221. 
163 Panama's response to Panel question No. 5. 
164 Argentina's response to Panel question No. 5. WT/DS453/R 
 
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  there is "trade in services" within the meaning of Article I:2 of the GATS.165 We shall therefore 
begin by examining as a threshold issue whether the GATS is applicable to each of the eight 
measures at issue.166 Should this be the case, we would continue our analysis by examining 
Panama's claims under the GATS, followed by Argentina's defences under the same Agreement. 
After completing our analysis under the GATS, we would address Panama's claims and Argentina's 
corresponding defences under the GATT 1994. 
7.59.  As regards the order of analysis of Panama's claims under the GATS and the corresponding 
defences, the parties' arguments have as a rule dealt first with the claims regarding 
most-favoured-nation treatment (Article II:1) and,  depending on the measure, national treatment 
(Article XVII), followed, where appropriate, by claims relating to market access (Articles XVI:1 and XVI:2(a)). Following on from the corresponding claim, the parties' arguments, where relevant, 
have concerned the exceptions invoked by Argentina under Articles XIV(c) and XIV(d) of the GATS 
and paragraph 2(a) of the Annex on Financial Services (the so-called "prudential exception"). 
7.60.  If we examine the various provisions invoked by Panama under the GATS, we see how 
Article II of the GATS contains a general obligation, applicable to all the sectors covered by the 
GATS. On the other hand, the other provisions in voked by Panama under the GATS, Articles XVI 
and XVII, contain obligations that only concer n the sectors and subsectors included in the 
Members' Schedules of Commitments, under the modes indicated, and subject to the "terms, 
limitations and conditions" (for Article XVI) and "conditions and qualifications" (for Article XVII) set out in the Schedules of Commitments. The order foll owed by the parties therefore appears to us to 
be appropriate. 
7.61.  After examining the claims under the GATS, we shall turn to the defences put forward by 
Argentina. We also think it appropriate to follow the order proposed by the parties and to commence our analysis of these defences under Article XIV(c), followed by Article XIV(d) of the 
GATS, inasmuch as the latter defence has been invoked in the alternative.
167 We shall go on to 
examine the "prudential exception" in paragraph 2(a) of the Annex on Financial Services hereunder. 
7.62.  As regards the order of analysis of Pana ma's claims under the GATT 1994, the question of 
the order of precedence would arise only in relati on to measure 3 (transaction valuation based on 
transfer prices), as Panama has made only one claim in relation to measure 2 (presumption of unjustified increase in wealth) under Article I:1 of the GATT 1994. As regards measure 3, Panama 
has put forward claims of inconsistency with Articles I:1 and III:4 and, in the alternative, under 
Article XI:1 of the GATT 1994. 
7.63.  Concerning the order of analysis between  Articles I:1 and III:4 of the GATT 1994, we note 
that both provisions contain two different expressions of the fundamental principle of 
non-discrimination: most-favoured-nation treatment (Article I:1) and national treatment (Article III:4). We do not find in the text of these two provisions or in the case law any indication 
of the existence of a relationship between them wh ich would determine the order of analysis to be 
f o l l o w e d .  W e  m u s t  b e a r  i n  m i n d  t h a t  t h e  o r d e r  w e  c h o o s e  m a y  a l s o  h a v e  a n  i m p a c t  o n  t h e  potential to apply judicial economy when making our determinations in this case.
168 Nonetheless, 
the difference in the nature of the two provisions means that a finding of violation of the MFN 
treatment obligation does not result in securing a positive solution to the dispute with regard to 
the national treatment obligation. The order of prec edence does not, therefore, in principle, have 
an impact in terms of the exercise of judicial economy. Consequently, there do not appear to be 
any reasons preventing the Panel from following the order of analysis indicated by the complaining 
party, which consists in first examining the claim under Article I:1 and then the claim under Article III:4 of the GATT 1994. After our analysis  under Article III:4 of the GATT 1994 has been 
                                               
165 Argentina's first written submission, paras. 139-141. 
166 This sequence appears to us to coincide with the comments of the Appellate Body in Canada – Autos . 
In that dispute, the parties disagr eed on whether the measures in question were covered by the GATS. The 
Appellate Body indicated that "… here, the fundamental structure and logic of Ar ticle I:1, in relation to the rest 
of the GATS, require that determination of whether a me asure is, in fact, covered by the GATS must be made 
before the consistency of that measure with any substantive obligation of the GATS can be assessed". See 
Appellate Body Report, Canada – Autos , para. 151. (emphasis original) 
167 Argentina's first written submission, paras. 353-400. 
168 Panel Report, India – Autos , para. 7.161. WT/DS453/R 
 
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  completed and only if we find that measure 3 is not inconsistent with that provision, we shall 
examine the claim under Article XI:1, which has been submitted in the alternative. 
7.64.  Once the claims under the GATT 1994 have been examined and if there is a finding of 
inconsistency with Articles I:1, III:4 or, alternativ ely, XI:1 of the GATT 19 94, we shall examine the 
defence put forward by Argentina under Article XX(d) of the GATT 1994. 
7.65.  After our order of analysis has been decided in relation to the order of precedence of claims 
and defences, it remains for us to decide whether we shall undertake this analysis measure by 
measure, i.e., analyse all the relevant claims and defences under the GATS and the GATT 1994 
presented in connection with a single measure at issue; or, on the contrary, if we shall examine each of the provisions invoked by Panama in respect of all the measures it has challenged, as the case may be. 
7.66.  The Panel has carefully reviewed the reasons put forward by Panama for proceeding 
measure by measure. In the circumstances of this dispute, where there are claims common to more than one measure, including a principal claim under Article II:1 of the GATS which concerns 
all the measures at issue, we are not convinced that the measure-by-measure approach suggested 
by Panama would contribute to a better understanding of the facts or help to identify the relevance of the legal arguments in comparison with the claim-by-claim approach. Nor do we consider that a 
claim-by-claim approach would have an effect  on due process in the terms proposed by Panama 
since, in our opinion, it would not prevent find ings being reached for each of the measures at 
issue, as Panama has requested. What does concern us, on the other hand, is preparing excessively long and repetitive findings if we were, for example, to analyse Panama's claims under 
Article II:1 of the GATS separately for each of the eight measures. This would lead us to our 
repeating our analysis over and over again, as the complainant has done in its second written submission or, to avoid this, introducing an excessive number of cross references, which would 
complicate the reading and understanding of the text. 
7.67.  In our view, our task will be fulfilled more effectively if we opt for a claim-by-claim analysis 
in which, after establishing the legal standard to be applied in our interpretation of a specific 
provision, we then apply it to our examination of the consistency of each of the measures 
challenged with that provision. The same proced ure would apply when examining the defences put 
forward by Argentina. The Panel recalls that it has the autonomy to decide on the order of its 
analysis
169 and, therefore, may opt for an order that is different to the one proposed by Panama. 
In our view, the interpretation or correct application of the legal provisions concerned does not 
require a measure-by-measure examination of Panama's claims and the corresponding defences.
170 
7.68.  We therefore begin our analysis with th e threshold question of whether the GATS is 
applicable to the measures at issue. 
                                               
169 The Appellate Body recognized this autonomy in Canada – Wheat Exports and Grain Imports when it 
stated that "[a]s a general principle, panels are free to st ructure the order of their analysis as they see fit. In 
so doing, panels may find it useful to take account of  the manner in which a claim is presented to them by a 
complaining Member." See Appellate Body Report, Canada – Wheat Exports and Grain Imports , para. 126. 
170 Appellate Body Report, US – Zeroing (EC)  (Article 21.5 – EC) , para. 277. In India – Autos , the panel 
clarified that the order of analysis co uld also have an impact on the exercise of judicial economy. See in this 
connection Panel Report, India – Autos , para. 7.161. WT/DS453/R 
 
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  7.3  Findings under the GATS 
7.3.1  The question of whether the GATS is applicable to the measures at issue 7.3.1.1  Main arguments of the parties 7.3.1.1.1  Panama 
7.69.  Panama asserts that the GATS is applicable to the eight measures at issue.
171 As regards 
the applicable legal standard under Article I:1 of the GATS, Panama asserts that in order to determine whether a measure "affect[s] trade in services" two key legal questions have to be 
examined, namely: (i) whether there is "trade in se rvices" within the meaning of Article I:2 of the 
GATS; and (ii) whether the measure "affect[s]" su ch trade in services within the meaning of 
Article I:1 of the GATS.
172 As regards the first question, Panama argues that "trade in services" is 
defined as the "supply of a service" through one of the four modes specified in subparagraphs (a) 
to (d) of Article I:2 of the GATS. Consequently, for trade in services to exist a service must be 
supplied under one of the four modes.173 As far as the second question is concerned, Panama 
contends that the word "affect", in its ordinary  meaning, denotes a measure that has "an effect 
on" a service, which implies a "broad scope of application". According to Panama, nothing in the 
GATS suggests that its scope is limited.174 
7.70.  Panama considers that Argentina's argument to the effect that Panama has failed to 
demonstrate that there is effective trade between  Panama and Argentina has no legal support in 
the text of the GATS. In Panama's opinion, neit her Articles I and XXVIII of the GATS nor the case 
law make application of the GATS conditional in all cases on the exhaustive enumeration of each and every one of the services possibly affected by a measure. According to Panama, imposing such 
a requirement would run counter to the object and purpose of the GATS. Panama considers that, 
as there may exist measures of a cross-cutting nature which affect a whole range of services or even all services on which a Member has made a commitment (for example, a general ban on 
setting up branches in the national territory), it would not be necessary to require that the 
applicability of the GATS be subject to separate id entification of each and every one of the services 
that might be affected by such a measure. Panama also points out that, in its first written 
submission, Argentina submitted a table of the se rvices and modes of supply relevant to this 
dispute, which, in Panama's opinion, shows that  Argentina has fully understood the scope of its 
claims in connection with trade in services.
175 
7.71.  According to Panama, accepting Argentina's argument would mean that any illegal measure 
would be immune from the disciplines of the GATS , because in preventing effective transactions 
between the complaining party's suppliers and th e defending party's consumers, the GATS would 
never be applicable.176 Panama adds that the context provided by other GATS rules and the history 
of its negotiation show that it was the negotiators'  intention to give the GATS the broadest possible 
scope and it also recalls that the Appellate Body has already stated that nothing in the GATS suggests that its scope is limited.
177 
7.72.  Panama argues that Argentina's pretension to require proof of effective transactions is 
based on an erroneous reference to the Appellate Body Reports in Canada – Autos and EC – 
Bananas III  inasmuch as, in both cases, the Appellate Body did not establish a general rule that 
the existence of specific transactions binding on the complainant had to be proven as a 
requirement for applicability of the GATS, but examin ed specific factual situations relating to the 
specific markets in question. Panama points out that the Appellate Body's reference in Canada – 
Autos to whether there is "trade in services" has to be understood as an obligation to explain 
                                               
171 Panama's first written submission, paras. 4.13 and 4.14 (measure 1); 4.106-4.109 (measure 2); 
4.245 (measure 3); 4.308 (measure 4); 4.336 and 4.337 (measure 5); 4.393-4.395 (measure 6); 4.418-4.420 (measure 7); and 4.446-4.448 (measure 8). 
172 Panama's first written submission, para. 4.13; and second written submission, para. 2.28. 
173 Panama's first written submission, pa ra. 4.13 (citing Appellate Body Report, Canada – Autos , 
para. 156). 
174 Panama's first written submission, para. 4. 13 (referring to Appellate Body Reports, Canada – Autos , 
para. 155, and EC – Bananas III , para. 220). 
175 Panama's second written submission, paras. 2.10 and 2.11. 
176 Panama's second written submission, paras. 2.12 and 2.13. 
177 Panama's second written submission, paras. 2.15-2.17. WT/DS453/R 
 
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  which services and modes of supply would be relevant in the light of the actual measure being 
challenged. In Panama's opinion, the fact that there are suppliers in the complaining Member which, at the time of the dispute, are supplyin g the services in question to consumers in the 
respondent Member is one element that could assist  such identification, but it is not a requirement 
for application of the GATS.
178 In any event, Panama states that, even accepting Argentina's 
contention for the sake of argument, it has presented proof of the specific impact on Panama's service suppliers, as regards both the servic es supplied and the modes of supply used. 
7.73.  Panama maintains that, while Argentina admi ts that the coverage of the GATS extends to 
potential suppliers, it is unable to explain what would be the difference between the effect of the measures on potential suppliers – which it does consider acceptable – and the "theoretical effect" of the measures on the same type of suppliers. Pa nama claims that Argentina's argument is purely 
rhetorical as there is no way of showing the effect on potential suppliers which, by definition, are 
not present on the market in question, other than  by means of a theoretical explanation of how 
the measures in question exert their effects. In any event, Panama contends that it has explained, 
measure by measure, how each of them has an effect on the services and service suppliers in 
question, and has put before the Panel for its consideration evidence concerning the actual effect on certain service suppliers. According to Panama, its rights as a WTO Member are being seriously 
affected and it cannot accept that observance of the most-favoured-nation clause by Argentina is 
made subject to compliance with certain conditions imposed unilaterally.
179 
7.74.  With regard to the foreign exchange authorization requirement (measure 8), Panama 
considers that it has an ex ante impact on business planning in Argentina because it affects the 
decision on whether to establish a commercial presence in Argentina. Panama argues that, 
although the additional requirement for repatriation of investments does not directly affect the inflow of investment into Argentine territory, by affecting the outflow of such investment the 
measure has an effect on the business planning of any company and on the decision to supply 
services through a commercial presence in Argentina.
180 
7.3.1.1.2  Argentina 
7.75.  Argentina contends that Panama has not established a prima facie case that the measures 
at issue are covered by the GATS as it has not shown that there is "trade in services" within the meaning of Article I:2 of the GATS
181 and puts forward its claims purely on the basis of the 
"theoretical" effect of the measures at issue on alleged services and service suppliers of 
non-Panamanian origin.182 
7.76.  According to Argentina, Panama has not provided sufficient evidence to show that there is 
trade in any of these services under the modes of supply identified. Referring to the Appellate 
Body Report in Canada – Autos , Argentina considers that Panama has the obligation to prove that 
the relevant services are supplied to the territory of the Argentine Republic from the territory of 
Panama, in the case of mode 1, or by a service supplier of Panamanian origin through a 
commercial presence in Argentina, in the case of mode 3. It is Argentina's opinion that, even if the 
threshold for application of the GATS could be es tablished on the basis of services and service 
suppliers of an origin other than that of the complainant, Panama has failed to show that there is trade in any of the relevant services in the modes of supply identified. Argentina considers that 
Panama's case is based solely on the theoretical impact of the measures at issue on trade in 
services; an impact which Panama has not even shown to exist.
183 
7.77.  Argentina argues that, since Panama has failed to show that the relevant services are 
actually supplied through cross-border trade (mode 1) or commercial presence (mode 3), Panama 
has not demonstrated that there is trade in services that might be "affected" by the measures challenged in this dispute. Argentina recognizes that the Appellate Body has taken a broad view of 
what constitutes a measure "affecting trade in services" and that at least one panel has held that 
                                               
178 Panama's second written submission, paras. 2.20-2.24; and response to Panel question No. 24. 
179 Panama's second written submission, paras. 2.25-2.27. 
180 Panama's second written submission, paras. 2.780 and 2.783. 
181 Argentina's first written submission, paras. 139-141. 
182 Argentina's second written submission, para. 14. 
183 Argentina's first written submission, paras. 143 and 144 (citing Appellate Body Report, Canada – 
Autos , para. 157); and opening statement at the fi rst meeting of the Pa nel, paras. 23-27. WT/DS453/R 
 
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  GATS coverage extends to potential service suppliers. Argentina explains, however, that it is not 
aware of any dispute in the GATS context in whic h any Member has attacked a national regulatory 
system on the basis of its theoretical effect on potential service suppliers. In Argentina's opinion, allowing a Member to invoke the GATS solely on the basis of the theoretical effect of the measures 
in question could have serious repercussions.
184 
7.78.  With regard to measure 8, Argentina ar gues that the foreign exchange authorization 
requirement is not covered by the GATS. Accord ing to Argentina, the measures affecting the 
repatriation of investment are not directly related to  trade in services and, therefore, do not affect 
trade in services within the meaning of Articles I:1 and XXVIII of the GATS. In Argentina's view, this measure does not affect the establishment of a company in the country or the delivery of services by that company, but implies closer scrutiny of access to the local foreign exchange 
market for the transfer of equity funds invested in the country if it is decided to repatriate them.
185 
7.3.1.2  Assessment by the Panel 7.3.1.2.1  Introduction 
7.79.  Panama has submitted a number of claims under the GATS with regard to the eight 
measures at issue, contending that that Agreement applies to all of them.
186 Argentina, however, 
argues that Panama has not established a prima facie case that the measures at issue are covered 
by the GATS as it has not demonstrated that ther e is "trade in services" within the meaning of 
Article I:2 of the GATS.187 
7.80.  As we also explained in section 7.2 above, in order to determine whether the GATS is the 
agreement which covers the eight measures at issue specifically and in more detail, we must first 
examine whether the GATS is applicable to each of them. To do so, in the manner established by 
the Appellate Body, as a preliminary matter we shall examine the question of the applicability of the GATS to the measures at issue before evaluating their consistency with the substantive 
obligations invoked by Panama.
188 
7.81.  We start by examining the relevant legal provision. 7.3.1.2.2  The relevant legal provision 
7.82.  Article I of the GATS, entitled Scope and Definition , provides as follows: 
1. This Agreement applies to measures by Members affecting trade in services. 2. For the purposes of this Agreement, trade in services is defined as the supply of 
a service: 
(a) from the territory of one Member into the territory of any other Member; 
(b) in the territory of one Member to the service consumer of any other Member; 
                                               
184 Argentina's first written submission, paras. 144 and 145. 
185 Argentina's first written submission, Explanatory An nex No. 2, paras. 27-35;  and response to Panel 
question No. 71. 
186 We note that Panama does not put forward separate  claims under Article I:1 of the GATS in respect 
of that Agreement's application to the challenged meas ures. Nevertheless, Panama discusses the application of 
the GATS in the context of its arguments under Articles II  and XVII of the GATS. Both provisions require, as a 
first step, that the complaining party prove that the challenged measure is "covered by this Agreement" 
(Article II) or affects the supply of services, as required by Article XVII ("in respect of  all measures affecting 
the supply of services"). 
187 Argentina's first written submission, paras. 141-143. 
188 In Canada – Autos , the parties disagreed on whether the me asures at issue were covered by the 
GATS. The Appellate Body indicated that "… here, the fund amental structure and logic of Article I:1, in relation 
to the rest of the GATS, require that  determination of whether a measure is, in fact, co vered by the GATS must 
be made before the consistency of that measure with any substantive obligation of the GATS can be assessed". 
See Appellate Body Report, Canada – Autos , para. 151. (emphasis original) WT/DS453/R 
 
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  (c) by a service supplier of one Member, through commercial presence in the 
territory of any other Member; 
(d) by a service supplier of one Member, through presence of natural persons of a 
Member in the territory of any other Member. 
3. For the purposes of this Agreement: 
(a) "measures by Members" means measures taken by: (i) central, regional or local governments and authorities; and 
(ii) non-governmental bodies in the exercise of powers delegated by central, 
regional or local governments or authorities; 
In fulfilling its obligations and commitments  under the Agreement, each Member shall 
take such reasonable measures as may be available to it to ensure their observance 
by regional and local governments and authorities and non-governmental bodies 
within its territory; 
(b) "services" includes any service in any sector except services supplied in the 
exercise of governmental authority; 
(c) "a service supplied in the exercise of governmental authority" means any 
service which is supplied neither on a commercial basis, nor in competition with one or 
more service suppliers. 
7.3.1.2.3  The legal standard under Article I of the GATS 7.83.  We recall that, in Canada – Autos , the Appellate Body identified two key legal issues which a 
complainant must establish in order to prove that a measure is covered by the GATS: 
"[T]wo key legal issues must be examined to determine whether a measure is one 
"affecting trade in services": first, whether there is "trade in services" in the sense of Article I:2; and, second, whether the measure in issue "affects" such trade in services 
within the meaning of Article I:1.
189 
7.84.  Guided by this finding by the Appellat e Body, we shall successively examine whether 
Panama has proved that (i) there is "trade in serv ices" in the sense of Article I:2 of the GATS, and 
(ii) whether the measure at issue "affect[s]" such trade in services within the meaning of 
Article I:1 of the GATS. 
7.3.1.2.3.1  First question: Whether there is "trade in services" in the sense of 
Article 1:2 of the GATS 
7.85.  We note that the main reason for the di spute between the parties concerns this first key 
legal issue of the legal standard established by the Appellate Body in Canada – Autos . Argentina 
claims that the complainant must demonstrate that there is effective trade in services, either 
between the complainant and the respondent or  between other Members and the respondent.190 At 
the first substantive meeting, Argentina raised the possibility of showing the existence of potential 
trade in services but, in that case, Argentina considers that the complainant has to identify specific 
services and service suppliers duly attributable to a Member, in one or more of the four modes of 
supply and in respect of which it has been show n that they are potentially affected by the 
measures at issue.191 
                                               
189 Appellate Body Report, Canada – Autos , para. 155. 
190 Argentina's first written submission, paras. 143 and 144. See also Argentina's response to Panel 
question No. 24(a)(i). 
191 Argentina's response to Panel question No. 24(a)(i). WT/DS453/R 
 
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  7.86.  Panama responds that Argentina's interpretation of this first element is erroneous as the 
requirement of the existence of effective trade has no legal basis in the text of the GATS.192 
Panama asserts that the Appellate Body's reference to  whether "there is 'trade in services'" should 
be understood as a need to identify the relevant services and modes of supply in the light of the 
specific measure challenged. In Panama's opinion, the fact of whether or not there are service 
suppliers of the complaining Member which, at the time of the dispute, are supplying the services 
concerned to consumers in the defending Member does not prevent the relevant "trade in services" 
from being identified. Panama argues that Argentina's interpretation could lead to the absurd 
result that, even if a measure has the specific obje ctive of regulating trade in service "X" and does 
in fact regulate such trade, it would have to be demonstrated in addition that "there is 'trade in services'" in order for the GATS to be applicable.
193 
7.87.  We recall that the relevant text of the GATS stipulates that the Agreement "applies to 
measures by Members affecting trade in services" (Article I:1 of the GATS) and defines "trade in services" as "the supply of a service" through fo ur modes of supply (Article I:2 of the GATS). 
Pursuant to Article XXVIII(c) of the GATS, the ex pression "measures by Members affecting trade in 
services" covers measures in respect of: (i) the purchase, payment or use of a service; (ii) the access to and use of, in connection with the supply of a service, services which are required by 
those Members to be offered to the public genera lly; and (iii) the presence, including commercial 
presence, of persons of a Member for the supply of  a service in the territory of another Member. 
7.88.  In our view, it cannot be inferred from th e wording of Article I:1 that the GATS is only 
applicable between two Members when there are ac tual flows of services between them or when 
"suppliers of specific services attributable" to a Member seek to supply services in the market of 
the defending Member. The ordinary meaning of Arti cle I:1 of the GATS rather indicates that the 
GATS applies to measures which affect "trade in services", defined in the following subparagraph 
as the supply of services through four modes. The wording of Article I:1, therefore, does not refer 
to measures that specifically affect actual services and service suppliers of the complaining Member or of any other Member.
194 
7.89.  By way of context, we note that, according to Article XVII, paragraph 1, of the GATS, the 
Article applies to "all measures affecting the supply of services", irrespective of whether service suppliers of the complaining party are engaged in trade or seeking to engage in trade with the 
Member applying the measure.
195 Likewise, paragraph 3 of the Article requires consideration of 
whether a measure "modifies the conditions of competition in favour of services or service 
suppliers of the Member compared to like services or service suppliers of any other Member". In our view, the context afforded by Article XVII in dicates that the analysis must hinge on the 
conditions of competition and not on the actual effects on specific service suppliers. We agree with 
one of the third parties that the WTO obligations  protect equality of competitive opportunities 
rather than actual trade volumes.
196 
7.90.  The existing case law with regard to trade in goods appears to support this approach. With 
reference to the GATT 1994, the Appellate Body  confirmed in an early decided case that: 
"[I]t is irrelevant that 'the trade effects' of the tax differential between imported and 
domestic products, as reflected in the volumes of imports, are insignificant or even 
non-existent; Article III [of the GATT 1994] protects expectations not of any particular 
trade volume but rather of the equal competitive relationship between imported and domestic products."
197 
7.91.  We note also that Article XXIII:1 of th e GATS, which is the dispute settlement provision 
applicable to disputes arising in relation to the GATS, stipulates as follows: 
                                               
192 Panama's second written submission, para. 2.13. 
193 Panama's second written submission, paras. 2.20-2.24 and response to Panel question No. 24. 
194 United States' third-pa rty submission, para. 4. 
195 We note that the United States makes the same analysis. See United States' third-party submission, 
para. 4. 
196 European Union's third-party su bmission, paras. 39 and 40 (referri ng to Appellate Body Reports, EC 
– Seal Products , paras. 5.82 and 5.87; Japan – Alcoholic Beverages II , p. 16 and US – FSC (Article 21.5 – EC) , 
para. 215; and Panel Reports, US – Clove Cigarettes , paras. 7.348-7.445 (in relation to Article 2.1 of the 
TBT Agreement) and EC – Bananas III (US) , para. 7.320 (in relation to Article XVII of the GATS)). 
197 Appellate Body Report, Japan – Alcoholic Beverages II , p. 16. WT/DS453/R 
 
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  "I f  a n y  M e m b e r  s h o u l d  c o n s i d e r  t h a t  a n y  o t h e r  M e m b e r  f a i l s  t o  c a r r y  o u t  i t s  
obligations or specific commitments  under this Agreement, it may with a view to 
reaching a mutually satisfactory resolution  of the matter have recourse to the DSU." 
(emphasis added) 
7.92.  Accordingly, the context afforded by Ar ticle XXIII:1 of the GATS indicates that Members 
have broad discretion when reporting to the DSB to claim alleged violations of the GATS. A complainant may resort to the DSB if it "considers" that another Member "fails to carry out its 
obligations or specific commitments" under the GA TS. Article XXIII of the GATS does not contain 
any other condition and does not, therefore, require that non-compliance with the said obligations or commitments have trade effects for the complainant. 
7.93.  We note that in EC – Bananas III , in language similar to that used in Article XXIII of the 
GATT 1994
198, the Appellate Body emphasized that "a Member has broad discretion in deciding 
whether to bring a case against another Member under the DSU" and agreed with the Panel 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 or indirectly."199 In our view, this 
reasoning also applies in the context of the GATS. 
7.94.  Accordingly, we agree with the posi tion expressed by one of the third parties200 that 
acceptance of Argentina's argument that Panama must identify "actual" services and service suppliers operating in the Argentine market and being affected by the challenged measures would mean adding a requirement to Article I:1 of the GA TS rather than treating it as an additional 
element of evidence. Furthermore, Argentina's argument would lead to an absurd situation in 
which the GATS would apply to measures provided that there is actual trade in services but would not apply to the most trade-restrictive measures, that is, bans on supplying services, which, by 
their very nature, prevent actual flows of services. We believe that such an outcome would serve 
to weaken the GATS and would clearly be contrary  to the object and purpose of the Agreement, 
whose preamble states, inter alia , that Members wish "to establish a multilateral framework of 
principles and rules for trade in services with a view to the expansion of such trade under 
conditions of transparency and progressive liberalization …". 
7.95.  Nor do we share Argentina's interpretation of the Appellate Body Report in Canada – 
Autos .
201 Like Panama, we understand that, in Canada – Autos , the Appellate Body did not 
establish a general rule that the existence of specific transactions between the complainant and 
the respondent has to be proved but ruled on th e factual situation in the market in question.202 We 
also note that none of the four subsequent Pa nels which adjudicated disputes under the GATS 
required the complaining party to prove the existence of specific transactions between the 
complainant and the respondent (or between the latter and other Members).203 Such precedents 
confirm, in our view, that none of these Panels interpreted the Appellate Body Report in Canada – 
                                               
198 Article XXIII:1 of the GATT 1994 provides as follows: "If any contracting party should consider that 
any benefit accruing to it directly or indirectly under th is Agreement is being nullified or impaired or that the 
attainment of any objective of th e Agreement is being impeded …". 
199 Appellate Body Report, EC – Bananas III , paras. 135 and 136 (referring to Panel Reports in that 
dispute, para. 7.50). 
200 United States' third-party submission, paras. 4 and 6. 
201 In that dispute, the parties disagreed as to whether the measure at issue – namely, exemption from 
import duty on motor vehicles covered by the GATT 1994 – could also affect the supply of distribution services and thus be covered by the GATS. When considering whet her there was "trade in services", the Appellate Body 
referred to the definitions of  "trade in services" in Article I:2, note d that the mode concerned was defined in 
Article I:2(c), namely, mode 3, and also recalled the de finition of commercial presence in Article XXVIII(d). 
Subsequently, the Appellate Body found that the complainan ts had identified the relevant sector on the basis of 
the Central Product Classification (CPC) and the respondent had not denied that there was a commercial presence on the part of the complainant's service supp liers on its territory. The Appellate Body concluded, 
therefore, that "the 'trade in servic es' here in issue is wholesale trade services of motor vehicles supplied by 
service suppliers of certain Members through commercial  presence in Canada". S ee Appellate Body Report, 
Canada – Autos , paras. 156 and 157. 
202 Panama's second written submission, para. 2.20. 
203 Two Panels ( US – Gambling  and China – Publications an d Audiovisual Products ) made a summary 
examination of the applicability of  the GATS, and two other Panels ( Mexico – Telecoms and China –  Electronic 
Payment Services ) did not examine this question at all. WT/DS453/R 
 
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  Autos as requiring the complainant to prove the existenc e of "actual" transactions as a prerequisite 
for determining application of the GATS. 
7.96.  In fact, in justifying the measures at issue in this dispute, Argentina itself appears to admit 
that there is – or there may be – trade in se rvices between Argentina and other WTO Members – 
including Panama. For example, Argentina explains at the beginning of its first written submission 
that "[t]he defensive anti-abuse measures such as those at issue in this dispute" are "essential tools for … equalizing the conditions of competition on the international market for financial and 
other services".
204 Accordingly, if Argentina considers it necessary to apply defensive anti-abuse 
measures to "equaliz[e] the conditions of competition on the international market for financial and other services", it is because, in the first place, such trade in services with Argentina exists – or may exist. 
7.97.  The Panel notes that, for each of the eigh t measures at issue, Panama has identified the 
relevant services and modes of supply.
205 The information in this regard is shown in the following 
table: 
No. Description Services and modes affected 
1 Withholding tax on 
payments of interest or remuneration   Claim under Article II:1 of the GATS  
MODE SECTOR Mode 1
206  Lending, credit services (CPC 8113) and those involving 
placement of funds in Argentina207 
 
2 Presumption of 
unjustified increase 
in wealth   Claim under Article II:1 of the GATS 
MODE SECTOR  
Mode 1208 All sectors of services where supply or delivery requires 
the entry of funds into Argentina209 
 
 Claim under Article XVII of the GATS  
MODE SECTOR 
Mode 1210 Maritime and air transport insurance services 
and reinsurance and re trocession services211 
 
                                               
204 Argentina's first written submission, para. 10. 
205 See in particular Panama's second written submission, paras. 2.90 and 2.91 (measure 1); 
paras. 2.254 and 2.255 (measure 2); paras. 2.401-2.403 (measure 3); paras. 2.507 and 2.508 (measure 4); paras. 2.594 and 2.595 (measure 5); paras. 2.692-2.694 (measure 6); para. 2.730 (measure 7); paras. 2.776-2.779 (measure 8). Moreover, Panama has also provided examples of actual supply by suppliers from Panama and/or non-cooperative countries for vari ous measures. See in particular Panama's second 
written submission, paras. 2.93-2.99 (measure 1); paras. 2.256-2.261 (measure 2); paras. 2.405 and 2.406 (measure 3). 
206 Panama's second written submission, para. 2.91. 
207 Originally Panama stated that these were clas sified in sector 7.B (s ee Panama's first written 
submission, para. 4.30). Argentina clarified that the br oad meaning of this term covers "deposits and other 
forms of attracting funds from financial institutions" (which are identified as services in provisional CPC codes 8115–8119), "or [receiving funds from] other sources (issue and placement of negotiable bonds, trust securities of financial trust funds, etc.)". See Pa nama's second written submission, para. 2.91 (referring 
to Argentina's first written submission , Explanatory Annex No. 1, para. 15). 
208 Panama's second written submission, para. 2.249. 
209 Panama considers this sector to be a general category. Panama also mentions that lending, 
insurance and reinsurance, and retroces sion services, as specific services, confirm the existence of the general 
category. See Panama's second written submission, para. 2.254. 
210 Panama's first written submission, para. 4.152. See also Panama's second written submission, 
para. 2.303. 
211 Panama's first written submission, paras. 4.133 and 4.152. See also Panama's second written 
submission, para. 2.304. WT/DS453/R 
 
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  No. Description Services and modes affected 
3 Transaction valuation 
based on transfer prices   
 Claim under Article II:1 of the GATS  
MODE SECTOR Modes 1 and 2
212 All services213 
 
 Claim under Article XVII of the GATS  
MODE SECTOR Modes 1 and 2
214 All services on which Argentina undertook full national 
treatment commitments under modes 1 and 2215 
4 Payment received 
rule for the allocation 
of expenditure   Claim under Article II:1 of the GATS  
MODE SECTOR 
Mode 1216  All services whose paymen t generates revenue of 
Argentine source for the service supplier217 
 
 Claim under Article XVII of the GATS  
MODE SECTOR 
Mode 1218 Services whose payment gene rates revenue of Argentine 
source for the service supplier and for which Argentina 
adopted a full commitment under mode 1219 
 
5 Requirements 
relating to reinsurance services   Claim under Article II:1 of the GATS  
MODE SECTOR Modes 1 and 3
220 Reinsurance services221  
 
 Claim under Articles XVI:1 and XVI:2(a) of the GATS  
MODE SECTOR Mode 1
222 Reinsurance services223  
 
                                               
212 Panama's second written submission, paras. 2.402 and 2.413. 
213 Panama's second written submission, paras. 2.398 and 2.401. 
214 Panama's second written submission, paras. 2.402 and 2.413. 
215 Panama's second written submission, footnote 420:  
In mode 1, the only sectors in which Argentina did not undertake national treatment 
commitments are the following: life, accident an d health insurance services; non-life insurance 
services; acceptance of deposits  and other repayable funds from th e public; lending of all types, 
including consumer credit, mortgage credit, fact oring and financing of co mmercial transactions; 
financial leasing with a purchase option; al l payment and money tr ansmission services; 
guarantees and commitments; tr ading for own account or for account of customers on the 
money market (cheques, bills, certificates of deposit, etc.), foreig n exchange, derivative 
products, including, but not limited to, futures and options, exchange rate and interest rate 
instruments, such as swaps, fo rward interest-rate agreements, et c., transferable securities and 
other negotiable instruments and financial assets, including bullion; participation in issues of all kinds of securities, including underwriting and plac ement as agent (whether publicly or privately) 
and provision of services related to such issu es; money broking; asset management; settlement 
and clearing services for financia l assets; new financial services. In mode 2, the only sectors in 
which Argentina did not undertake national tr eatment commitments are the following: life, 
accident and health insurance se rvices; non-life insurance servic es; and new financial services" 
(emphasis original).  See Argentina's Schedule of Specific Commitments, (Exhibit PAN-19). 
216 Panama's second written submission, paras. 2.507 and 2.516. 
217 Panama presents this category as a general servic es category which would co ver services referred to 
in Title V of the LIG, including lending, consumer credit and other services involving the placement of funds. See Panama's second written submission, paras. 2.507 and 2.516. 
218 Panama's second written submission, paras. 2.507 and 2.516 . 
219 Panama's second written submission, paras. 2.507 and 2.516. By way of example, Panama mentions 
insurance services (provisional CPC 81293) and rein surance services (provisional CPC 81299*); financial 
consultancy services (provisional CPC 8131 or 8133); technical consultancy or other consultancy services provided from abroad (including management consulting services (provisional CPC 865)). See Panama's second written submission, para. 2.538. 
220 Panama's second written submission, para. 2.595. See also second written submission, para. 2.594. 
221 Panama's second written submission, para. 2.595. See also second written submission, para. 2.594. 
In this connection, we recall that the Panel has concluded that measure 5 does not cover retrocession services. 
See section 7.1.4 above. 
222 Panama's second written submission, para. 2.615. 
223 Panama's second written submission, para. 2.615. In this connection, we recall that the Panel has 
concluded that measure 5 does not cover retr ocession services. See section 7.1.4 above. WT/DS453/R 
 
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  No. Description Services and modes affected 
6 Requirements for 
access to the 
Argentine capital 
market   Claim under Article II:1 of the GATS  
MODE SECTOR 
Mode 1224 Portfolio management services225 
 
7 Requirements for the 
registration of branches   Claim under Article II:1 of the GATS  
MODE SECTOR Mode 3
226 All sectors227 
 
8 Foreign exchange 
authorization 
requirement   Claim under Article II:1 of the GATS  
MODE SECTOR 
Mode 3228 All sectors (except for financial services)229 
 
 
7.98.  In the light of the foregoing, the Panel considers that Panama has demonstrated that the 
eight measures at issue apply to services supplie d pursuant to Article I:2 of the GATS and that 
Panama has therefore demonstrated that there is trade in services within the meaning of Article I:2 of the GATS. 
7.3.1.2.3.2  Second question: Whether the measures in question "affect" trade in 
services within the meaning of Article I:1 of the GATS 
7.99.  We continue our analysis with the second key legal issue under the legal standard 
established by the Appellate Body in Canada – Autos , namely, whether the challenged measures 
"affect" trade in services within the meaning of Article I:1 of the GATS. 
7.100.  We recall that Panama argues that, as stated by the Appellate Body in EC – Bananas III , 
Article I:1 of the GATS ensures the broadest possible coverage of the Agreement precisely because 
of its reference to measures that "affect" trade in services. The GATS thus not only covers measures which directly "govern" or "regulate" trade in services, but also any other type of 
measure which, even if it has been designed for other purposes (such as trade in goods) 
nevertheless "affects" trade in services.
230 
7.101.  Argentina responds that, inasmuch as Panama has failed to prove that the relevant 
services are supplied from the territory of Panama – or of any other Member – to the territory of 
Argentina through modes 1 and 3, Panama has not shown that there is trade in relevant services 
and modes which may be "affected" by the measures challenged in this dispute.231 Argentina puts 
forward separate and additional arguments for me asure 8 and claims that the repatriation of 
investments is not directly related to trade in services and, therefore, does not affect trade in 
services within the meaning of Articles I:2 and XXVIII of the GATS. Argentina concludes that 
measure 8 is not covered by the GATS.232 
7.102.  The Panel recalls that in EC – Bananas III , the Appellate Body considered that no 
measures are excluded a priori from the scope of the GATS. A ccording to the Appellate Body, 
The scope of the GATS encompasses any measur e of a Member to the extent it affects 
the supply of a service regardless of whether such measure directly governs the 
                                               
224 Panama's second written submission, para. 2.692. See also second written submission, paras. 2.694 
and 2.695. 
225 Panama's second written submission, para. 2.692. See also second written submission, paras. 2.694 
and 2.695. 
226 Panama's second written submission, para. 2.730. 
227 Panama's second written submission, para. 2.730. 
228 Panama's second written submission, para. 2.787. See also second written submission, para. 2.790. 
229 Panama's second written submission, para. 2.787. See also second written submission, para. 2.790. 
230 Panama's first written submission, para. 4. 13; response to Pane l question No. 24(b). 
231 Argentina's first written submission, para. 144. 
232 Argentina's first written submission, Ex planatory Annex No. 2, paras. 27-41. WT/DS453/R 
 
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  supply of a service or whether it regulates other matters but nevertheless affects 
trade in services.233 
7.103.  As regards the term "affect", the Appellate Body explained that: 
In our view, the use of the term "affecting" reflects the intent of the drafters to give a 
broad reach to the GATS. The ordinary me aning of the word "affecting" implies a 
measure that has "an effect on", which indicates a broad scope of application. This interpretation is further reinforced by the conclusions of previous panels that the term 
"affecting" in the context of Article III of the GATT is wider in scope than such terms 
as "regulating" or "governing".
234 
7.104.  According to Argentina, Panama failed to prove this second issue inasmuch as it did not 
demonstrate that there is trade in services and did not identify "specific" Panamanian service 
suppliers.235 As we concluded above, for the purposes of establishing application of the GATS to 
the measures at issue, Article I:1 of the GATS  does not require the complainant to prove the 
existence of specific services or service suppliers, or the existence of actual transactions. We also 
note that, except as concerns measure 8, to which we shall refer later, Argentina does not appear 
to deny that the measures at issue "affect" trade in services. Indeed, on various occasions Argentina explains that the rationale for the measures at issue is to equalize the conditions of 
competition between, on the one hand, services an d service suppliers of Argentina and/or other 
cooperative countries and, on the other, serv ices and service suppliers of non-cooperative 
countries. 
7.105.  For example, by arguing that the defe nsive anti-abuse measures are necessary to 
"equaliz[e] the conditions of competition on the international market for financial and other 
services"
236, Argentina acknowledges not only that there is – or there may be – trade in services in 
these sectors, but also that, by equalizing the conditions of competition on the international 
market for services, these measures govern – or at least affect – trade in these services. At the 
Panel's first meeting with the parties, Argentina stated that "at the time the Agreement on Services was negotiated … during the Uruguay Ro und, the right of Members to adopt [defensive 
tax measures against non-cooperative jurisdictions] was totally and clearly understood by 
them".
237 At the same meeting, Argentina explained th at "[t]he criteria on the basis of which 
Argentina distinguishes between cooperative and non-cooperative jurisdictions are the objective 
reflection of intractable and fundamental regulato ry differences between the services and service 
suppliers of cooperative jurisdictions and those of non-cooperative jurisdictions".238 Likewise, in its 
second written submission, Argentina explicitly recognizes that measures 5 and 6 – those on access to the Argentine reinsurance services market and to the Argentine capital market – affect 
the supply of financial services, that is, trade in financial services within the meaning of Article I:2 
of the GATS. In Argentina's words: 
First of all, the measures in question undoubtedly affect "the supply of financial 
services" within the meaning of paragraph 1(a) of the Annex on Financial Services. In 
fact, both "reinsurance and retrocession" services and the trade in "transferable securities" are specifically listed in the definitions of financial services in paragraph 5(a) of the Annex on Financial Services.
239 
7.106.  In our view, such arguments show that, for Argentina itself, the purpose of the measures 
at issue is to govern or – at least – to "affect" service suppliers of other Members that supply 
                                               
233 Appellate Body Report, EC – Bananas III , para. 217 (citing Panel Reports, EC – Bananas III 
(Ecuador) , para. 7.285; EC – Bananas III (Mexico) , para. 7.285; and EC – Bananas III (United States) , 
para. 7.285). 
234 Appellate Body Report, EC – Bananas III , para. 220. 
235 See Argentina's first written submission, para. 140 ("It is with regard to the first element of this 
proof [as to whether there is 'trade in services' within the meaning of Ar ticle I:2 of the GATS] that Panama's 
first written submission is flawed") (referring to Appe llate Body Report, Canada – Autos, para. 155). 
236 Argentina's first written submissi on, para. 10. See para. 7.96 above. 
237 Argentina's opening statement at the first meeting of the Panel, para. 18. See also opening 
statement at the first meeting of the Panel, paras. 34- 36 (referring to the Chairm an's Statement, Informal 
Meeting of the Group of Negotiations on Services, 10 December 1993, MTN.GNS/49, p. 2). 
238 Argentina's opening statement at the first meeting of the Panel, para. 12. 
239 Argentina's second written submission, para. 85. WT/DS453/R 
 
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  services in Argentina and, consequently, such measures adopted by Argentina "affect" the supply 
of services within the meanin g of Article I:1 of the GATS. 
7.107.  The Panel notes that Argentina presents separate and additional arguments with regard to 
measure 8. As explained in the descriptive section240, measure 8 consists of imposing on service 
suppliers from non-cooperative countries the requirement to obtain prior authorization from the 
BCRA in order to be able to repatriate their direct investments. Argentina applies this measure pursuant to BCRA Communication "A" 4940, Section I.
241 
7.108.  Argentina contends that the prior authorization from the BCRA to repatriate investments, 
as imposed by measure 8, is not covered by the GA TS as it is not directly related to trade in 
services and, therefore, does not affect trade in  services within the meaning of Articles I:1 and 
XXVIII of the GATS. In Argentina's view, the meas ure does not affect the establishment of a 
company in the country or the delivery of services  by such a company, but implies closer scrutiny 
of access to the local foreign exchange market fo r the transfer of equity funds invested in the 
country if it is decided to repatriate them.242 
7.109.  Panama responds that the foreign exchange authorization requirement has an ex ante  
impact on business planning in Argentina because it affects the decision on establishing a commercial presence in Argentina. Panama argues  that, although the additional requirement for 
the repatriation of investments does not directly affect the inflow of investment into Argentine 
territory, by affecting the outflow of such invest ment the measure has an effect on the business 
planning of any company and on the decision to supply services through a commercial presence in Argentina. Panama argues that in Argentina – Import Measures, the panel found that Argentina's 
requirements on operators to refrain from repatriating profits when their level of exports is not 
sufficient to compensate for their imports "have a limiting effect on imports". In Panama's view, if the restrictions on repatriation affect the import of goods, they all the more affect foreign service 
suppliers which establish a commercial presence in Argentina.
243 
7.110.  The Panel notes that, judging by its terms, Communication "A" 4940 requires that prior 
authorization from the BCRA be obtained "when the beneficiary abroad is a natural or legal 
person". Pursuant to Article XXVIII(d) of the GATS, "'commercial presence' means any type of 
business or professional establishment, including through (i) the constitution, acquisition or maintenance of a juridical person … within the territory of a Member for the purpose of supplying a service". The wording of Communication "A" 4940 sh ows that the foreign exchange authorization 
requirement applies, inter alia , to service suppliers which, having established a commercial 
presence
244 in Argentina, possibly decide to withdraw from the Argentine market and, hence, to 
repatriate their investment. 
7.111.  The Panel also recalls that, pursuant to  Article XXVIII(c) of the GATS, "measures by 
Members affecting trade in services include measures  in respect of …. (iii) the presence, including 
commercial presence, of persons of a Member for th e supply of a service in the territory of another 
Member". In Spanish, the term " referente a " ("in respect of") is defined as "[q]ue refiere o que 
expresa relación a algo " [referring or expressing a relationship to something].245 We thus consider 
that the concept of "measures … affecting trade in services" covers measures related to the "constitution" or "acquisition" of a legal person within the territory of a Member for the purpose of 
supplying a service. In our view, this is the case for the foreign exchange authorization 
requirement. 
                                               
240 See paras. 2.39 and 2.40 above. 
241 Communication "A" 4940, (Exhibits PAN-71 / ARG-31). 
242 Argentina's first written submission, Explanatory An nex No. 2, paras. 27-35;  and response to Panel 
question No. 71. 
243 Panama's second written submission, paras. 2.780, 2.783 and 2.784 (citing Panel Report, Argentina 
– Import Measures , para. 6.259). 
244 Article XXVIII(d) of the GATS defines "commercial pr esence" as "any type of business or professional 
establishment, including through: (i) the constitution, acquisition or maintenance of a juridical person, or 
(ii) the creation or maintenance of a branch or a repres entative office, within the te rritory of a Member for the 
purpose of supplying a service". 
245 Diccionario de la Lengua Española , 23rd edition, Real Academia Española  (Espasa Calpe, 2014), 
Vol. II, p. 1875. WT/DS453/R 
 
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  7.112.  The fact that this requirement does not apply at the time of establishing a commercial 
presence in Argentina but rather at the time of withdrawing the investment from the Argentine market does not prevent this requirement from be ing related to the supply of services through 
commercial presence, in accordance with the definition of this mode in Article I:2 of the GATS. 
Indeed, such a measure may have an impact on a service supplier's decision to invest in the 
market or, in the terms of the GATS, to establish a commercial presence. In our view, a measure which, for example, totally prohibits repatriation of  invested capital at the time of withdrawal from 
the market would most likely influence the supplier's decision as to whether or not to establish a 
commercial presence in that market. It is our view that a determination which implies leaving outside the scope of the GATS those measures which apply at the time when a legal person 
withdraws from a market could open up a breach in the Agreement, as it would mean that 
measures which influence the decision to set up in the territory of a Member would not be covered 
by the Agreement. For the foregoing reasons, we co nsider that measure 8 affects trade in services 
in the sense of Article I:1 and is thus covered by the GATS. 
7.113.  In the light of the foregoing, the Panel concludes that the eight measures at issue "affect" 
trade in services within the meaning of Article I:1 of the GATS. 
7.3.1.2.4  Conclusion 
7.114.  Having determined that Panama has demonstrated that there is trade in services and that 
the eight measures at issue in this dispute "affect trade in services" within the meaning of Article I:1 of the GATS, the Panel finds that the GATS is applicable to measure 1 (withholding tax on payments of interest or remuneration), meas ure 2 (presumption of unjustified increase in 
wealth), measure 3 (transaction valuation based on  price transfers), measure 4 (payment received 
rule for the allocation of expenditure), measure 5 (requirements relating to reinsurance services), 
measure 6 (requirements for access to the Argentine capital market), measure 7 (requirements for 
the registration of branches) and measure 8 (f oreign exchange authorization requirement). 
7.115.  We therefore proceed to examine Panama's claims under the GATS, starting with those 
made under Article II of that Agreement. 
7.3.2  Panama's claims under Article II:1 of the GATS 
7.3.2.1  Main arguments of the parties 7.3.2.1.1  Panama 7.116.   Panama claims that the eight measures at issue are inconsistent with Article II:1 of the 
GATS because they accord less favourable trea tment to services and service suppliers of 
non-cooperative countries than that accorded to like services and service suppliers of cooperative 
countries.
246 
7.117.  As regards the arguments as to whether the measures at issue fall within the scope of 
Article II:1 of the GATS, we refer to section 7.3.1 above. 
7.118.  With regard to whether the services and service suppliers concerned by the measures at 
issue are like, Panama claims that the regulatory distinction established by the Argentine 
measures at issue is based solely and exclus ively on the origin of the service supplier.247 Panama 
argues that in situations such as the present one, where the regulatory distinction is based 
exclusively on the origin, as established in the text of the measure itself248, the likeness is 
presumed and there is no need to make casuistic demonstrations that the services and/or service 
suppliers are like or to examine the competitiv e relationship between services and service 
                                               
246 Panama's first written submission, paras. 5.1.a, 5.1.b(i), 5.1.c(i), 5.1.d(i), 5.1.e(i), 5.1.f, 5.1.g 
and 5.1.h. 
247 Panama's first written submission, paras. 4.16-4.18, 4.34, 4.110, 4.112, 4.156-4.158, 4.246, 4.256, 
4.309, 4.317, 4.339, 4.397, 4.422-4.423 and 4.449. See also second written submission, paras. 2.30, 2.38, 
2.42, 2.54, 2.602. 2.697, 2.733 and 2.787. 
248 Panama's response to Panel question No. 32. WT/DS453/R 
 
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  suppliers.249 Panama bases itself on the statement in this regard made by the panel in China – 
Publications and Audiovisual Products . According to that panel, when origin is the only factor on 
which a measure bases a difference of treatment be tween suppliers, the service suppliers are like, 
provided there will, or can, be domestic and foreign suppliers that under the measure are the 
same in all material respects except for origin.250 
7.119.  Panama adds that the existence of reasons (whether or not legitimate) justifying the 
distinction between service suppliers according to their origin is not relevant to the determination 
of their likeness.251 Panama considers that, if they exist, such reasons must be examined under 
the exemptions to the GATS.252 
7.120.  Even though in Panama's view the distinct ion between service suppliers in this dispute is 
based exclusively on their origin, Panama considers that, if the Panel wishes to examine the 
likeness of service suppliers in more detail, it could resort, not without first making certain 
adjustments, to the four traditional likeness criteria used in trade in goods: the nature of the services, their purpose, consumer preferences,  and any possible governmental classification.
253 In 
any event, Panama fails to understand how the existence or non-existence of an agreement on the 
exchange of tax information could have an impact on any of these four criteria254 and considers 
that to accept this fact would imply making the likeness analysis subject to the unilateral will of 
each Member.255 
7.121.  Contrary to the view expressed by Argentina, Panama asserts that the regulatory 
background is a factor external to the service supplier and could only be relevant insofar as it is perceived by the market and, hence, affects the competitive relationship between suppliers.
256 
Argentina's interpretation, on the other hand, would entail a likeness assessment based on the 
"aims and effects" of the regulations, an approa ch that has repeatedly been rejected by the 
Appellate Body.257 In Panama's opinion, the regulatory objectives of the measure should not be 
taken into account in like likeness analysis.258 
7.122.  As to whether the measures at issue accord less favourable treatment to like services and 
service suppliers, Panama contends that the challenged measures accord less favourable 
treatment to services and service suppliers of non-cooperative countries compared to that 
accorded to like services and service suppliers of cooperative countries because they modify the 
conditions of competition to the detriment of services and service suppliers of non-cooperative countries vis-à-vis  like suppliers of cooperative countries.
259 
7.123.  Panama considers that, in order to examine whether there is less favourable treatment 
under Article II of the GATS, it is not necessary to assess whether the detrimental effect of a measure stems exclusively from a legitimate regulatory distinction.
260 
7.124.  Panama also considers that, contrary to what is stated by Argentina, the existence of less 
favourable treatment should not be examined be fore and after having examined the "likeness" 
                                               
249 Panama's response to Panel question No. 33. S ee also responses to Panel questions Nos. 27 and 28 
(citing Panel Report, Canada – Wheat Exports and Grain Imports , para. 6.164). 
250 Panama cites Panel Report, China – Publications and Audiovisual Products , para. 7.975. 
251 Panama's second written submission, paras. 2.46 and 2.47; and response to Panel question No. 28. 
252 Panama's second written submission, paras. 2.128, 2.274, 2.421, 2.522 and 2.608; and response to 
Panel question No. 29. 
253 Panama's second written submission, paras. 2.131, 2.276, 2,524 and 2.604. See also responses to 
Panel questions Nos. 23, 30 and 69. 
254 Panama's response to Panel question No. 69. 
255 Panama's responses to Panel questions Nos. 29 and 69. 
256 Panama's second written submission, paras. 2.266, 2.412, 2.515, 2.701, 2.735 and 2.789. See also 
response to Panel question No. 31. 
257 Panama's second written submission, paras. 2.129, 2.275, 2.422, 2.523 and 2.605. 
258 Panama's response to Panel question No. 29. 
259 Panama's first written submission, paras. 4.36-4.41, 4.113-4.127, 4.247- 4.248, 4.310- 4.311, 
4.340-4.343, 4.398-4.403, 4.424-4.436 and 4.450-4.457. 
260 Panama's second written submission, paras. 2.73, 2.612, 2.706, 2.744 and 2.796 (referring to its 
response to Panel question No. 41, which in  turn refers to Appellate Body Report, EC – Seal Products , 
para. 5.125). WT/DS453/R 
 
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  element.261 According to Panama, the legal standard enshrined in the case law indicates that the 
likeness element should be examined before ex amining the less favourable treatment element.262 
7.125.  More specifically, as regards the existence of no less favourable treatment for each of the 
measures at issue, Panama asserts in relation to measure 1 that payments for services rendered 
by service suppliers from non-cooperative countries are subject to a heavier tax burden than that 
imposed on payments for services contracted with suppliers of cooperative countries.263 Panama 
considers that this heavier tax burden on payments for services rendered by suppliers of 
non-cooperative countries "nullifies equality of competitive conditions in the Argentine market" 
between services and service suppliers of coop erative countries and like services and service 
suppliers of non-cooperative countries, thus resulting in less favourable treatment of the latter.264 
7.126.  With regard to measure 2, Panama claims that the services rendered from non-cooperative 
countries entail a heavier burden on the consum er of the service as the AFIP presumes an 
unjustified increase in wealth. This presumption would have to be rebutted by the consumer by 
presenting the relevant documents proving the existence of a legitimate transaction.265 Panama 
claims that, in the first place, this measure discourages the consumption of services provided by 
suppliers of non-cooperative countries because it represents an administrative burden and generates a tax risk. In Panama's opinion, even if  the consumer of the service successfully rebuts 
the presumption, its mere existence in itself implies less favourable treatment for non-cooperative 
service suppliers inasmuch as it raises the possibility that a negative determination may be made. Secondly, Panama points out that the consumer has to take additional steps (the presentation of the documents to rebut the presumption), which are not required if services are contracted from 
like service suppliers of cooperative countries. For all these reasons, Panama considers that the 
measure accords less favourable treatment to services and service suppliers of non-cooperative countries.
266 
7.127.  As far as measure 3 is concerned, Panama asserts that application of this valuation regime 
involves additional charges for those Argentine taxpayers who decide to contract with service suppliers of non-cooperative countries. According to Panama, this more burdensome regime would 
not apply if the Argentine taxpayer contracted services from a supplier situated in a cooperative 
country.
267 In Panama's opinion, this additional requirement clearly modifies the conditions of 
competition to the detriment of services and service suppliers of non-cooperative countries as contracting them becomes more burdensome in comp arison with services and service suppliers of 
cooperative countries. Panama thus considers that Argentina accords to services and service 
suppliers of non-cooperative countries treatment less favourable than that accorded to like services and service suppliers of cooperative countries.
268 
7.128.  With regard to measure 4, Panama contends that "for Argentine taxpayers, purchasing 
services from persons in [non-cooperative countries] involves a clear tax, accounting and economic disadvantage in terms of the allocation of expenditure", inasmuch as expenditure 
incurred with suppliers of non-cooperative countries may only be allocated to the time of payment 
of the service and not to the period in which the obligation accrues, as is the case for service suppliers of cooperative countries. Panama considers that the disincentive generated by the "distortion of accounting-tax management" as a result of applying this measure modifies the 
conditions of competition between foreign like services and service suppliers and accords less 
favourable treatment to service suppliers of non-cooperative countries in comparison with that accorded to like service suppliers of cooperative countries.
269 
7.129.  Concerning measure 5 following the March 2014 amendment, Panama contends that 
Argentina allows suppliers of cooperative countries to provide reinsurance services through 
                                               
261 Panama's second written submission, para. 2.56. 
262 Panama's second written submission, para. 2.63. 
263 Panama's first written submission, para. 4.37; and second written submission, para. 2.139. 
264 Panama's first written submission, para. 4.38. 
265 Panama's first written submission, para. 4.114. 
266 Panama's first written submission, paras. 4.118, 4.119, 4.124 and 4.126; and second written 
submission, paras. 2.280 and 2.281, and 2.285. 
267 Panama's first written submission, para. 4.247; and second written submission, para. 2.426. 
268 Panama's first written submission, para. 4.248; and second written submission, para. 2.427. 
269 Panama's first written submission, paras. 4.310 and 4.311; and second written submission, 
paras. 2.532 and 2.533. WT/DS453/R 
 
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  cross-border trade (mode 1) or commercial presence (mode 3), while it establishes conditions for 
the supply of such services by service suppliers of non-cooperative countries. These conditions are 
that the entity (or its parent company) supplyin g the service must be subject to the control and 
supervision of an institution which fulfils functions similar to those of the SSN and with which a 
memorandum of understanding has been signed.270 Panama considers that the less favourable 
treatment takes the form of the uncertainty surrounding compliance with the conditions laid down, which entails an impairment of the conditions of competition.
271 
7.130.  With regard to measure 6, Panama claims that there is less favourable treatment for 
suppliers of portfolio management services as the restrictions applicable to stock market intermediaries place them at a disadvantage vis-à-vis  like service suppliers of cooperative 
countries. This is so because registered intermediaries (which provide stockbroking services) may 
only conduct transactions on the Argentine capita l market if these are ordered by persons from 
cooperative countries.
272 In Panama's opinion, the measure "limits the investment options of 
portfolio managers of the [non-cooperative] countries" by restricting their access to essential 
auxiliary services such as stockbroking. Panama contends that the measure gives portfolio 
management service suppliers of cooperative countries an advantage that is not extended immediately and unconditionally to like suppliers of non-cooperative countries.
273 
7.131.  As regards measure 7, Panama alleges that the mere fact that there is an additional 
requirement for branches of companies from non-cooperative countries "is a significant sign" of the existence of less favourable treatment.
274 Panama maintains that less favourable treatment is 
given to service suppliers of non-cooperative countries as the required certification that the 
company is effectively engaged in economically significant business activities in the place where it 
was incorporated (i) limits the development of certain kinds of business which involve the parallel creation of several commercial establishments, and (ii) entails an additional administrative 
burden.
275 
7.132.  Concerning measure 8, Panama considers that the mere fact that the regulations impose 
an additional requirement (prior authorization from the BCRA) indicates that there is less 
favourable treatment.276 Panama contends that this regulation, by restricting the repatriation of 
direct investments, discourages the establishment of service suppliers of non-cooperative countries.
277 P anama ad d s  that the  re s tric tion  is  c om p ound ed  b y unc e rtainty a s  to whe the r the  
BCRA will ultimately authorize access to the Single Free Foreign Exchange Market (MULC). In 
Panama's opinion, this discretionary power to grant authorization for access to the MULC also has 
negative repercussions for service suppliers of non-cooperative countries vis-à-vis  like service 
suppliers of cooperative countries.278 Panama states that the fact of bearing an additional 
administrative burden (the request for auth orization from the BCRA) and the uncertainty 
surrounding the authorization process places suppliers of non-cooperative countries at a competitive disadvantage compared to like service suppliers of cooperative countries.
279 
7.133.  With regard to the question of whether no less favourable treatment is immediately and 
unconditionally accorded to like services and service suppliers, Panama asserts that measure 1 establishes a condition for according to service suppliers of non-cooperative countries the more favourable treatment accorded to cooperative countries. This condition is that the home 
jurisdiction of the supplier must have signed  an agreement on information exchange with 
Argentina and that, by application of its domestic regulations, it may not invoke banking, stock market or any other form of secrecy in response to a request for information.
280 As regards 
                                               
270 Panama's second written submission, para. 2.610. 
271 Panama's second written submission, para. 2.612. 
272 Panama's first written submission, paras. 4.398 and 4.399. 
273 Panama's first written submission, para. 4.402 (footnote  original) Title XI, Section III, Article 5 of the 
Rules of the CNV (Exhibit PAN-58). 
274 Panama's second written submission, para. 2.739 (citing Appellate Body Report, Thailand – 
Cigarettes (Philippines) , para. 138). See also first written submission, para. 4.417. 
275 Panama's first written submission, para. 4.425. 
276 Panama's first written submission, para. 4.445. See also second written submission, para. 2.792. 
277 Panama's first written submission, para. 4.451. (footnote original) Point 1.13 of Communication "A" 
4662, amended by point 1 of Communicatio n "A" 4692 (Exhibits PAN-67 and PAN-68). 
278 Panama's first written submission, paras. 4.453 and 4.454. 
279 Panama's first written submission, para. 4.455. 
280 Panama's first written submission, para. 4.41. WT/DS453/R 
 
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  measures 5 and 6, Panama contends that conditions are imposed on service suppliers of 
non-cooperative countries in order to be eligible for access to a benefit. In the case of measure 5, the benefit consists of access to the Argentine reinsurance market, while for measure 6 it consists of access to the Argentine securities market. In Panama's opinion, the granting of benefits may not 
be made subject to any condition, so the very existence of a condition conduces to the conclusion 
that the measure is inconsistent with Article II:1 of the GATS.
281 
7.3.2.1.2  Argentina 
7.134.  Argentina maintains that the eight measures at issue are not inconsistent with Article II:1 
of the GATS inasmuch as Panama has not established a prima facie case that the GATS applies to 
these measures or that the treatment accord ed to services and service suppliers of 
non-cooperative countries is less favourable than that accorded to like services and service 
suppliers of cooperative countries.282 Argentina also contends that, even if Panama had established 
a prima facie case of less favourable treatment, it has not established a prima facie case that the 
services and service suppliers are like.283 
7.135.  Regarding the arguments as to whether the measures at issue fall within the scope of 
Article II:1 of the GATS, we refer back to section 7.3.1 above. 
7.136.  With regard to whether the services and service suppliers concerned by the measures at 
issue are like, Argentina asserts that the regula tory differences between the service suppliers 
being compared are relevant to the likeness determination inasmuch as they affect the way in which suppliers operate on the market.
284 Argentina considers that the Appellate Body's 
jurisprudence on trade in goods to the effect that regulatory differences are relevant to likeness to 
the extent that "they have an impact on the competitive relationship between and among the 
products concerned"285 is applicable to the GATS.286 Argentina also asserts that these regulatory 
differences are relevant to the likeness analysis "even though these differences are not fully 
reflected in the market" and "even when these regulatory differences do not affect the essential 
features of the service".287 In any event, Argentina states that, in this case, the regulatory 
differences between suppliers of the services in question affect the way in which the supplier 
supplies the service and thus affect the competitive relationship.288 
7.137.  Argentina claims that the cooperative or non-cooperative nature of a jurisdiction is "an 
essential feature of the service which consumers of  services are seeking when they choose to do 
business in a non-cooperative jurisdiction".289 Argentina thus considers that exchange of tax 
information is a feature of the services and service suppliers that is reflected in the conditions of 
competition.290 Argentina argues that, if Panama wished to rebut its argument, it would have to 
prove that the regulatory distinction applied by the measure at issue does not affect the 
commercial or regulatory characteristics of the services or service suppliers.291 
7.138.  Argentina contends that the origin of a service or service supplier is a relevant factor in 
determining likeness as it may affect the characteristics of the service supplier.292 In this 
connection, Argentina clarifies that it does not rule out the possibility of there being situations 
where the principle of origin is applicable, even though this is not the case in this dispute as the measures at issue are objectively related to th e services and service suppliers in question.
293 In 
any event, Argentina considers that the de jure/de facto distinction developed by the case law in 
                                               
281 Panama's first written submission, para. 4.402; and second written submission, paras. 2.611 and 
2.705. 
282 Argentina's first written submission, Sections III and III.A. 
283 Argentina's first written submission, Section III.B. 
284 Argentina's response to Panel question No. 31. 
285 Argentina refers to Appellate Body Report, US – Clove Cigarettes , para. 119. 
286 Argentina's first written submission, para. 185. 
287 Argentina's response to Panel question No. 29. See also Argentina's first written submission, 
para. 187 and response to Panel question No. 31. 
288 Argentina's first written submission, paras. 188 and 210. See also response to Panel question No. 33. 
289 Argentina's first written submission, para. 210. 
290 Argentina's second written submission, para. 9. See also response to Panel question No. 71. 
291 Argentina's second written submission, para. 35. 
292 Argentina's second written submission, paras. 10, 24 and 34. 
293 Argentina's first written submission, para. 196; and response to Panel question No. 32(a). WT/DS453/R 
 
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  relation to trade in goods cannot be directly appl ied to the GATS since Articles I and III of the 
GATT 1994 only refer to "like products" whereas the GATS refers to "like services and service suppliers".
294 
7.139.  Likewise, Argentina asserts that the use of the conjunction "and" in the expression "like 
services and service suppliers" in Articles II and XV II of the GATS indicates that likeness should be 
assessed taking into account the relevant characteristics of both the services and the service suppliers.
295 In Argentina's opinion, this is because the characteristics of a service are often 
inseparable from the characteristics of the supplier.296 
7.140.  As regards whether the measures at issue accord no less favourable treatment to like 
services and service suppliers, Argentina contends that the differential treatment existing in this dispute is the result of its adherence to effective tax information exchange rules in effect at 
international level. Argentina maintains that, in principle, these standards may be adopted by any 
Member.
297 
7.141.  Argentina considers that Panama has not established a prima facie case that services and 
service suppliers of Panamanian origin receive less favourable treatment compared to like services 
and service suppliers of any other country or of Argentine origin. This is because Argentina has designated Panama as a cooperative jurisdiction.
298 In this connection, Argentina contends that the 
services and service suppliers which should be compared in order to determine the existence of no 
less favourable treatment within the meaning of Ar ticle II of the GATS are, on the one hand, those 
of the complaining Member and, on the other, like services and service suppliers of any other Member which allegedly receive more favourable treatment.
299 
7.142.  Argentina asserts that the expression "treatment no less favourable" in Article II (and 
Article XVII) of the GATS should be interpreted in the same way as in Article 2.1 of the Agreement on Technical Barriers to Trade (TBT Agreement), that is, in the sense that there is no less 
favourable treatment if the negative impact of the measure on the conditions of competition in the 
Argentine market for services and service suppliers of non-cooperative countries "stems exclusively from a legitimate regulatory distinction".
300 
7.143.  Moreover, Argentina asserts that the re gulatory distinction between cooperative and 
non-cooperative jurisdiction is a legitimate one and that the challenged measures are based on internationally recognized objective criteria which can be met by any Member.
301 
7.144.  Argentina submits no arguments concerning the granting of no less favourable treatment 
immediately and unconditionally  under Article II of the GATS. 
7.3.2.2  Assessment by the Panel 7.3.2.2.1  Introduction 
7.145.  The question before the Panel is whether the eight measures at issue are inconsistent with 
Article II:1 of the GATS. In response to Panama's claims, Argentina asserts that its measures are not inconsistent with Article II:1 of the GATS as Panama has not established a prima facie case 
that the GATS is applicable to those measures, th at the services and service suppliers are like or 
that there is less favourable treatment.
302 
                                               
294 Argentina's second written submission, paras. 24, 26 and 31. 
295 Argentina's first written submission, para. 184. Ho wever, it should be pointed out that Argentina 
does not consider it necessary for th e Panel to decide whether the likeness analysis should be conducted on a 
cumulative basis (taking into account both the servic e and the service supplier) or on a disjunctive basis 
(taking into account the service or the service supplier) . See Argentina's first written submission, footnote 131. 
296 Argentina's first written submission, paras. 182-184; and second written submission, para. 33. 
297 Argentina's first written submission, para. 196. 
298 Argentina's first written submission, paras. 165 and 166. 
299 Argentina's first written submission, paras. 149 and 154. 
300 Argentina's first written submission, paras. 228 and 229. 
301 Argentina's first written submission, paras. 231 and 232. 
302 Argentina's first written submission, Sections III, III.A and III.B. WT/DS453/R 
 
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  7.146.  We shall start by examining the wording of  Article II:1 of the GATS in order to establish 
the applicable legal standard, taking into account the paucity of case law in this respect. Bearing this in mind, we shall then determine whether the eight measures at issue violate this provision.
303 
7.3.2.2.2  The relevant legal provision 
7.147.  Article II:1 of the GATS provides as follows: 
With respect to any measure covered by this Agreement, each Member shall accord 
immediately and unconditionally to services and service suppliers of any other 
Member treatment no less favourable than that it accords to like services and service 
suppliers of any other country. 
7.148.  Article II:1 enshrines the general princi ple of most-favoured-nation (MFN) treatment, 
imposing a general and unconditional obligation to grant MFN treatment, which applies irrespective 
of whether there are specific commitments in the sector(s) in question. This MFN treatment 
obligation applies to all service sectors, unless a Member has registered MFN exemptions in the 
Annex on Article II Exemptions, as provided in Article II:2 of the GATS.304 We note that Argentina 
has not registered any relevant MFN exemption in the instant case. 
7.3.2.2.3  The legal standard under Article II:1 of the GATS 
7.149.  The wording of Article II:1 of the GATS suggests that, in order to make a prima facie  case, 
Panama must demonstrate that: (i) first, the measures at issue are covered by Article II:1 of the 
GATS; (ii) second, the relevant services and service suppliers are "like"; and (iii) third, the measures at issue accord "immediately and unconditionally" "treatment no less favourable" to like services and service suppliers. 
7.150.  We turn to a separate analysis of whether Panama has complied with these requirements. 
7.3.2.2.3.1  First requirement: whether the me asures at issue are covered by Article II:1 
of the GATS 
7.151.  Regarding compliance with this first element, we refer to section 7.3.1 above, in which we 
conclude that, having determined that Panama has demonstrated that there is "trade in services" and that the eight measures at issue in this dispute "affect" trade in services within the meaning of 
Article I:1 of the GATS, the Panel finds that the GATS is applicable to these measures. Panama 
has, therefore, complied with the first requirement of proving that the eight measures at issue are 
covered by the GATS. 
7.152.  We therefore continue by examining the second requirement, namely, whether Panama 
has proved that services and service suppliers of cooperative and non-cooperative countries are 
like. 
7.3.2.2.3.2  Second requirement: whether the services and service suppliers are like 
7.153.  We recall that Panama claims that the re gulatory distinction established by the Argentine 
measures at issue is based solely and exclusively on the origin of the service supplier
305 and that, 
                                               
303 We find the statement by the Appellate Body in Canada – Autos to be particularly useful as regards 
how a panel should address analysis of the consistency of a measure with Article II:1 of the GATS. According 
to the Appellate Body, after having re sponded positively to the threshold questions of whether there is "trade 
in services" and whether the measure under review "affects" trade in services, a panel should interpret the text of this article. Once it ha s been interpreted, the panel must make "factual findings as to treatment of services 
and service suppliers … [in dispute]" and, as a last step, a pply its interpretation of Article II:1 to the facts as it 
found them. See Appellate Body Report, Canada – Autos , paras. 170 and 171. 
304 Article II:2 provides as follows: 
A Member may maintain a measure inconsistent wi th paragraph 1 provided that such a measure 
is listed in, and meets the conditions of, the Annex on Article II Exemptions. 
305 Panama's first written submission, paras. 4.16-4.18, 4.34, 4.110, 4.112, 4.156-4.158, 4.246, 4.256, 
4.309, 4.317, 4.339, 4.397, 4.422- 4.423, and 4.449. See also second written submission, paras. 2.30, 2.38, 2.42, 2.54, 2.602. 2.697, 2.733 and 2.787. WT/DS453/R 
 
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  consequently, there is no need to make casuistic demonstrations that the services and/or service 
suppliers are like or to examine the competitiv e relationship between services and service 
suppliers.306 
7.154.  Argentina, for its part, argues that the regulatory differences between the service suppliers 
being compared are relevant to the likeness determination inasmuch as they affect the way in 
which suppliers operate on the market.307 Argentina also disagrees with Panama regarding the 
transposition to the GATS of the de jure/de facto distinction developed in the case law in relation 
to trade in goods. In this connection, Argentina maintains that this distinction cannot be directly 
applied to the GATS as the GATS refers to "like services and service suppliers", whereas Articles I 
and III of the GATT 1994 refer only to "like products".308 
7.155.  We shall commence our analysis of the likeness requirement under Article II:1 of the GATS 
by referring to the dearth of existing jurisprude nce on trade in services, which would serve as a 
guide in our interpretative exercise. The first of the few disputes in which the question of "likeness" was addressed in connection with the GATS was EC – Bananas III . In that case, the 
panel, in a finding that was not subsequently exam ined on appeal, considered relevant "the nature 
and the characteristics" of the services in ques tion when determining likeness. The panel also 
concluded that, to the extent that entities pr ovide such like services, they are like service 
suppliers.
309 
7.156.  As regards the likeness of service suppliers, in Canada – Autos the panel followed the 
approach taken in EC – Bananas III and considered that "to the extent that the service suppliers 
concerned supply the same services, they should be considered 'like' for the purpose of this 
case".310 The same approach was subsequently followed by the panel in China – Publications and 
Audiovisual Products, in its likeness examination under Article XVII of the GATS. In that dispute, in 
which the parties did not contest the likeness of the service suppliers, the panel concluded that 
when the "only factor" on which a measure bases a difference of treatment between domestic and 
foreign suppliers is "origin", the likeness requirement is met. Specifically, the panel found as follows: 
When origin is the only factor on which a measure bases a difference of treatment 
between domestic service suppliers and foreign suppliers, the "like service suppliers" requirement is met, provided there will, or can, be domestic and foreign suppliers that under the measure are the same in all material respects except for origin.
311 
7.157.  Panama referred to this element of case la w on several occasions, arguing that, in the case 
before us, the difference in treatment is based exclusively on the origin of the service suppliers and, therefore, likeness must be presumed.
312 
7.158.  In China – Publications and Audiovisual Products , however, the panel also pointed out that: 
[I]n cases where a difference of treatment is not exclusively linked to the origin of 
service suppliers, but to other factors, a more detailed analysis would probably be 
required to determine whether service suppliers on either side of the dividing line are, 
or are not, "like".313 
7.159.  The panel focused precisely on these "other factors" in China – Electronic Payment 
Services . In that dispute, the panel undertook a more detailed analysis of likeness, considering 
                                               
306 Panama's response to Panel question No. 33. S ee also responses to Panel questions Nos. 27 and 28 
(citing Panel Report, Canada – Wheat Exports and Grain Imports, para. 6.164). 
307 Argentina's response to Panel question No. 31 
308 Argentina's second written submission, paras. 26 and 31. 
309 Panel Report, EC – Bananas III , para. 7.322. 
310 Panel Report, Canada – Autos , para. 10.248. 
311 Panel Report, China – Publications and Audiovisual Products , para. 7.975 (citing Panel Reports, 
Canada – Wheat Exports and Grain Imports , paras. 6.164-6.167 and Argentina – Hides and Leather , 
paras. 11.168 and 11.169). (footnote omitted) 
312 Panama's first written submission, paras. 4.16, 4.110, 4.149, 4.246, 4.256, 4.265, 4.277- 4.278, 
4.309, 4.317, 4.339, 4.397, 4.423 and 4.449; and second written submission, paras. 2.30, 2.32, 2.38, 2.45, 
2.297-2.298, 2.600-2.601, 2.697, 2.733 and 2.787. 
313 Panel Report, China – Publications and Audiovisual Products , para. 7.975. WT/DS453/R 
 
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  that the difference in treatment was not exclusively linked to the origin of the service suppliers but 
to "other factors".314 After examining the ordinary meaning of  the term "like" and the context of 
the expression "like services" in Article XVII of the GATS, the panel concluded that "like services 
are services that are in a competitive relationsh i p  w i t h  e a c h  o t h e r  ( o r  w o u l d  b e  i f  t h e y  w e r e  
allowed to be supplied in a particular market)".315 
7.160.  We agree with the panel in China – Electronic Payment Services that interpretation of the 
expression "like services and service suppliers" should be based on the ordinary meaning of its 
terms, taking into account the context of Article II itself, as well as other provisions of the GATS. 
Consequently, we see no obstacle to using the sa me likeness interpretation as that used by the 
panel in China – Electronic Payment Services , even though it was developed in relation to 
Article XVII of the GATS. 
7.161.  In our view, the likeness analysis under Article II of the GATS does not differ from the 
likeness analysis under Article XVII of the GATS in the sense that it requires an approach based on 
the competitive relationship. Although the Appellate Body has exercised caution with regard to the 
direct transposition to Article II of all interp retations developed under Article XVII of the GATS316, 
we consider the context afforded by this provision to be useful inasmuch as the Appellate Body has 
transposed interpretations developed under  Article XVII to Article II of the GATS.317 Indeed, not 
only is the term to be interpreted the same but the context afforded by the term "treatment no 
less favourable" also informs the likeness determination in both cases. This has also been the view of previous panels and the Appellate Body in connection with Article III:4 of the GATT 1994 and Article 2.1 of the TBT Agreement. 
7.162.  While we are aware of the risks involved in directly transposing the case law of other 
covered agreements to the GATS
318, we are of the view that, in the context of a likeness 
determination, there are sufficient elements in common in these three Agreements to make it 
possible to adopt an interpretation of likeness ba sed on the competitive relationship between the 
relevant services and service suppliers. In our view, this approach does not prevent us taking into account the specific characteristics of trade in services, including in particular the intangible nature 
of services and the existence of four modes of supply.
319 
7.163.  Taking as a starting point the competitiv e relationship between the services and service 
suppliers, we continue our likeness analysis taking into account the particular circumstances of our case
320 and considering all the arguments and evidence that pertain to the competitive relationship 
between the services and service suppliers being compared.321 Like the parties, we understand 
that the likeness analysis under Article II:1 of the GATS concerns, on the one hand, services and service suppliers of non-cooperative countries and, on the other, services and service suppliers of 
cooperative countries. We recall that this distinct ion is reflected in each and every one of the 
measures at issue by virtue of the provisions of Decree No. 589/2013.
322 
7.164.  As we have already seen, Panama considers that origin is the only reason for the 
differences in treatment and therefore requests us to apply the presumption of likeness based on 
                                               
314 Panel Report, China – Electronic Payment Services , para. 7.697. 
315 Panel Report, China – Electronic Payment Services , para. 7.700. 
316 In this connection, the Appellate Body stated that "provisions elsewhere in the GATS relating to 
national treatment obligations, and previous GATT practice relating to the interpretation of the national treatment obligation of Article III of  the GATT 1994 are not necessarily rele vant to the interpretation of 
Article II of the GATS". See Appellate Body Report, EC – Bananas III , para. 231. 
317 For example, the Appellate Body held that Articles II and XVII of the GATS cover both de jure and 
de facto discrimination. See A ppellate Body Report, EC – Bananas III , paras. 233 and 234. 
318 In this connection, the panel in China – Electronic Payment Services warned of the risks of directly 
transposing case law on likeness under the GATT 1994 to the area of trade in services. See Panel Report, China 
– Electronic Payment Services , para. 7.698. 
319 Panel Report, China – Electronic Payment Services , para. 7.698. 
320 Panel Report, China – Electronic Payment Services , para. 7.701. 
321 It should be pointed out that this statement was made in a context in which the Panel considered 
that the difference in treatment was not exclusively linked  to origin and, therefore, examined in detail the 
relationship of this difference in treatm ent to "other factors". See Panel Report, China – Electronic Payment 
Services , para. 7.702. (footnote omitted) 
322 See section 2.2 above. We recall that Article 1 of Decree No. 589/2013 provides for the replacement 
of the references to "countries with  low or no taxes" by "countries no t considered as 'cooperating for tax 
transparency purposes'". See exhibits PAN-3 / ARG-35. WT/DS453/R 
 
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  origin applicable under the GATT 1994.323 Argentina considers that this presumption cannot be 
transposed directly to the GATS context becaus e Articles II and XVII of the GATS, unlike their 
counterparts in the case of goods, refer to "like services and service suppliers".324 Argentina 
considers that the issue is not just one of the orig in of the service or service supplier, but also has 
to do with the characteristics which are intrinsically linked to the origin of the said service or 
supplier.325 These characteristics are defined, inter alia , by aspects of the regulatory framework in 
their countries of origin that affect the supply of the services. More specifically, Argentina refers in 
this dispute to the aspects of the regulatory framework relating to tax transparency.326 
7.165.  We agree with Argentina that the presumption of likeness based on origin applicable in the 
context of the GATT 1994 is not directly transp osable to the context of the GATS because the 
reference to "like services and service suppliers" in the GATS has no equivalent in the GATT 1994, 
which only refers to "like products". As the Panel explained in China – Electronic Payment Services , 
therefore, we have to determine whether the diffe rence in treatment may also be due to "other 
factors".327 To that end, we shall first examine wh ether the difference in treatment between 
cooperative and non-cooperative countries is due to origin. If we conclude that this difference is 
not due exclusively to origin, we shall continue our analysis by examining whether there is also another factor or "other factors" linked to the difference in treatment between services and service 
suppliers of non-cooperative countries and services  and service suppliers of cooperative countries. 
7.166.  As regards the origin rule, as we have already mentioned, the eight measures challenged 
by Panama distinguish between services and serv ice suppliers of cooperative and non-cooperative 
countries. In our view, the mere fact that differe ntial treatment is accorded depending on whether 
or not a country is included in a list is closely linked to origin. This implies that any service supplier 
based in Panama – or in any other country cons idered by the Argentine authorities to be a 
cooperative country – is subject to the same treatment because it is based in that country. We 
therefore consider that the difference in treatment between cooperative and non-cooperative 
countries inherent in the eight measures at issue is due to origin. However, even though the origin rule is applied in the form of a list of cooperative countries, it is not origin per se which determines 
that certain countries are on the list and others  not, but the regulatory framework inextricably 
linked to such origin. This raises a doubt as  to whether the difference in treatment between 
cooperative and non-cooperative countries inherent in the eight measures at issue is based exclusively o n  o r i g i n ,  a s  a s s e r t e d  b y  P a n a m a ,  o r  w h e t h e r  t h e r e  i s  a l s o  s o m e  " o t h e r  f a c t o r "  
explaining the difference in treatment, as we shall consider below. 
7.167.  We recall that Panama contends that, when  discrimination according to origin is already 
established in the law itself, there is no need to examine any other factor in order to determine the 
likeness of services and service suppliers.
328 Argentina responds that the origin of a service or 
service supplier is a relevant factor for determining likeness inasmuch as it may affect the characteristics of the service supplier.
329 Argentina does not rule out the possibility of there being 
situations where the principle of origin is applicable, but contends that this is not the case in this 
dispute as the measures at issue are objectively related to the services and service suppliers in question.
330 In any event, Argentina considers that the de jure/de facto distinction developed by 
the case law in relation to trade in goods cannot be directly applied to the GATS since Articles  I 
and III of the GATT 1994 only refer to "like" prod ucts, whereas the GATS refers to "like services 
and service suppliers".331 
7.168.  Given that there are doubts regarding th e existence of "other factors", we shall follow 
previous case law on trade in services and turn to consider whether, in addition to origin, there are 
                                               
323 See Panama's first written submission, paras. 4.16-4.18, 4.34, 4.110, 4.112, 4.156-4.158, 4.246, 
4.256, 4.309, 4.317, 4.339, 4.397, 4.422-4.423, and 4.449. See also second written submission, paras. 2.30, 2.38, 2.42, 2.54, 2.602. 2.697, 2.733 and 2.787. 
324 Argentina's second written submission, paras. 26 and 31. 
325 Argentina's first written submission, paras. 185-210. See also second written submission, paras. 9, 
10, 24, 26, 31 and 34; and responses to Panel questions Nos. 29, 31, 32 and 71. 
326 Argentina's second written submission, para. 9. See also response to Panel question No. 71. 
327 Panel Report, China – Electronic Payment Services , para. 7.697. 
328 Panama's response to Panel question No. 29. 
329 Argentina's second written submission, paras. 10, 24 and 34. 
330 Argentina's first written submission, para. 196; and response to Panel question No. 32. 
331 Argentina's second written submission, paras. 26 and 31. WT/DS453/R 
 
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  other factors relevant to the examination of the li keness of services and service suppliers in this 
dispute. 
7.169.  The main difficulty we encounter in determining whether the difference in treatment is 
solely and exclusively based on origin lies in the fact that, in order to make such a determination, 
difference in treatment based on "other factors" has to be set aside and, in the context of the 
GATS, it is not specified what "other factors" are to be examined.332 
7.170.  The only panel which has to date examined this question is the one in China – Electronic 
Payment Services .333 In its analysis of "other factors", the panel exercised caution when 
transposing the traditional likeness criteria of the GATT 1994 to the GATS because of the 
"important dissimilarities" between the two Agreements. In particular, the panel highlighted differences regarding the intangible nature of serv ices, their supply through four different modes, 
and the ways in which trade in services is conducted and regulated.
334 In order to try to identify 
the "other factors" to be considered when determining the likeness of the relevant services, the panel turned to the context of the expression "lik e services" provided by Article XVII of the GATS. 
The panel indicated, more generally, that a likeness determination should be made on a 
case-by-case basis
335 and be based on "arguments and evidence that pertain to the competitive 
relationship of the services being compared".336 
7.171.   As regards the likeness of service suppliers, the panel in China – Electronic Payment 
Services established that there is a presumption that service suppliers are like "if, and to the 
extent that, they provide like services", even th ough, depending on the circumstances, a "separate 
inquiry into the 'likeness' of the suppliers may be called for".337 In essence, the panel focused on 
the similar description of activities by the suppl iers and the fact that they were perceived as 
competitors in the same market338 and concluded that the relevant service suppliers in that 
dispute were like "at least to the extent that they provide 'like' services".339 
7.172.  The panel in China – Electronic Payment Services stated, in line with what had been 
established by previous panels and the Appellate Body, that any determination of likeness must be made on a case-by-case basis.
340 We therefore turn to examine whet her, in this dispute, there are 
"other factors" to be considered and, if that is the case, whether they have any impac t on the 
competitive relationship of the services and service suppliers concerned. 
7.173.  In this dispute, the parties have devoted part of their meetings with the Panel and their 
submissions to discussing a question that we might treat as one of those "other factor(s)" referred 
to by the panel in China – Electronic Payment Services. Argentina, in particular, contends that the 
distinction established by Decree No. 589/2013 reflects a regulatory difference that has to be taken into account by the Panel as an "other factor".
341 This "other factor" would be the possibility 
of access by Argentina to tax information on foreign suppliers. We note that this is not the case for 
Panama, which has cooperative country status despite having denied that it initiated negotiations 
                                               
332 The panel in China – Publications and Audiovisual Products left the door open to consideration of 
"other factors" in the likeness an alysis, indicating that "in cases where a difference of treatment is not 
exclusively linked to the origin of service suppliers, but to other factors, a more  detailed analysis would 
probably be required ". See Panel Report, China – Publications and Audiovisual Products , para. 7.975. 
333 Although it considered the possibili ty of "other factors", the panel in China – Publications and 
Audiovisual Products did not consider it necessary to address this aspect. 
334 Panel Report, China – Electronic Payment Services , para. 7.698. 
335 Panel Report, China – Electronic Payment Services , para. 7.701. 
336 Panel Report, China – Electronic Payment Services , 7.702. (footnote original) This is also consistent 
with the criterion adopted in relation to goods. See Appellate Body Reports, EC – Asbestos , paras. 99 and 103; 
and Philippines – Distilled Spirits , footnote 211. 
337 Panel Report, China – Electronic Payment Services , para. 7.705. The Panel based itself on Panel 
Report, EC – Bananas III , para. 7.322. 
338 Panel Report, China – Electronic Payment Services , para. 7.706. 
339 Panel Report, China – Electronic Payment Services , para. 7.708. 
340 See, for example, Appellate Body Reports, EC – Asbestos , para. 101 and Japan – Alcoholic 
Beverages II , p. 20 (in relation to the GATT 1994) and Panel Report, China – Electronic Payment Services , 
paras. 7.701 and 7.705 (in relation to trade in services). 
341 Argentina's response to Panel question No. 29. WT/DS453/R 
 
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  with Argentina on the signing of a tax information exchange agreement and, thus, on the effective 
exchange of information with Argentina.342 
7.174.  Argentina maintains that this factor corresponds to an "objective basis" on which to 
establish the distinction.343 Argentina also emphasizes that the need to examine (or not examine) 
"other factors" in the determination of likeness "has to be established in each case, depending on: 
(a) the nature of the services in question, and (b) the particular circumstances of the case".344 
7.175.  Panama considers that the expression "other factors" should refer to factors that are 
"neutral as to origin" and that the "other factor" identified by Argentina does not fall within this 
category. As an example of a factor that is neutral as to origin, it refers to the case of China – 
Electronic Payment Services , in which the differences in treatment related to whether one 
company in particular (China UnionPay (CUP)) was or was not the domestic or foreign supplier.345 
7.176.  In the case before us, the "other factor " identified by one of the parties (access to tax 
information on foreign service suppliers) is of a regulatory nature. We therefore deem it useful to recall what was stated by the panel in EC – Asbestos  and, more recently, in US – Clove Cigarettes . 
In our view, this Appellate Body case law is of particular relevance to this case as in both those 
disputes the Appellate Body addressed the regulato ry concerns of Members in the determination of 
likeness to the extent that these a ffect the competitive relationship.
346 In this connection, we note 
that regulatory concerns play a key role in the scope of the GATS as this Agreement refers not 
only to services but also to service suppliers. To this must be added the fact that the GATS regulates four modes of supply, two of which (modes 1 and 2) refer to service suppliers outside the territory of the Member "importing" the service and are thus subject to the regulations of that 
other Member. 
7.177.  In EC – Asbestos , in the context of Article III:4 of  the GATT 1994, the Appellate Body 
recognized that the examination of certain regula tory concerns (such as the risk posed to human 
health by the product in question) could be relevant "in assessing the competitive relationship  in 
the marketplace  between allegedly 'like' products"
347, and, ultimately, in determining likeness. In 
that dispute, the risks posed by asbestos to human health were examined in relation to two of the 
likeness criteria traditionally used under the GATT 1994: the physical properties of the product and 
consumers' tastes and habits.348 
7.178.  In US – Clove Cigarettes , the Appellate Body did not consider that the concept of "like 
products" in Article 2:1 of the TBT Agreement "lends  itself to distinctions between products that 
are based on the regulatory objectives of a measure".349 According to the Appellate Body, 
consideration of the objectives of a measure would distort the comparison under the "no less favourable treatment" analysis. The Appellate Body nevertheless indicated that this approach does 
not mean that the regulatory concerns underlying the measures at issue play no role in the 
determination of likeness. Following the lines set out in EC – Asbestos , the Appellate Body found 
that "regulatory concerns and considerations may play a role in applying certain of the 'likeness' 
criteria (that is, physical characteristics and consumer preferences) and, thus, in the determination 
of likeness".
350 The Appellate Body clarified that regulatory concerns play a role in determining 
likeness "[t]o the extent that they are relevant to the examination of certain 'likeness' criteria and 
are reflected in the products' competitive relationship".351 
7.179.  Applying the Appellate Body's reasoning to our case, it appears to us that the possibility 
for Argentina to have access to tax information on foreign suppliers may be considered to be an "other factor" to be taken into account in our likeness analysis, provided that it is reflected in the 
competitive relationship between services and service suppliers of cooperative and 
non-cooperative countries. This being said, it lies with Argentina to prove that this "other factor" 
                                               
342 Panama's response to Panel question No. 7. 
343 Argentina's response to Panel question No. 32(b). 
344 Argentina's response to Panel question No. 29. 
345 Panama's response to Panel question No. 28. 
346 Appellate Body Reports, EC – Asbestos , para. 115; and US – Clove Cigarettes , para. 119. 
347 Appellate Body Report, EC – Asbestos , para. 115 (emphasis original). 
348 Appellate Body Report, EC – Asbestos , para. 113. 
349 Appellate Body Report, US – Clove Cigarettes , para. 116. 
350 Appellate Body Report, US – Clove Cigarettes , paras. 116-117. 
351 Appellate Body Report, US – Clove Cigarettes , para. 120. WT/DS453/R 
 
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  affects the competitive relationship between se rvices and service suppliers, for example, by 
showing its effect on the characteristics of  the service and consumers' preferences. 
7.180.  According to Argentina, in the instant case, the fact that the service suppliers may or may 
not be situated in jurisdictions subject to the effe ctive exchange of information is a characteristic 
that is directly reflected in the conditions of competition on the market.352 Argentina contends that 
the different regulatory context in which services and service suppliers of cooperative and non-cooperative countries find themselves as rega rds the exchange of tax information affects the 
way in which the supplier supplies the service, and thus affects the competitive relationship.
353 
Argentina sees lack of transparency and effective exchange of information as the main competitive advantage for services and service suppliers originating from non-cooperative countries
354, and 
this is also acknowledged by Panama.355 
7.181.  As we explained in the descriptive part, the distinction made by Argentina is a function of 
its access (or lack of access) to tax information on service suppliers. According to Argentina's claims, the possibility of access to tax information falls into the following two categories: 
cooperative countries (there is access to tax information) and non-cooperative countries (there is 
no access to tax information). 
7.182.  Decree No. 589/2013 lays down the conditions for a country to be considered cooperative, 
namely: (i) to have signed with Argentina an agreement on exchange of tax information or a 
convention on avoidance of international double  taxation with a broad information exchange 
clause, provided that there is effective exchange of information; or (ii) to have initiated with Argentina the negotiations necessary for concluding such an agreement and/or convention.
356 If 
one of these requirements is not met, the country is considered to be non-cooperative.357 
7.183.  In looking at how Decree No. 589/2013 has been implemented in practice, we note that 
the current list of cooperative countries includes countries that have not signed a double taxation 
convention or an information exchange agreemen t and with which there is no exchange of tax 
information, as well as countries which have in fact concluded such conventions or agreements and which, therefore, exchange tax information. Let us take, for example, the cases of Panama and 
Germany. These two countries belong to the ca tegory of cooperative countries. Argentina has 
signed a double taxation agreement with Germany, which has been in force since 25 November 1979
358, giving it access to tax information.359 In the case of Panama, however, 
Argentina has no access to tax information as it has not signed any agreement on exchange of tax 
information with Panama. We also note that various countries which have initiated negotiations 
have a different status. For example, both Panama and Hong Kong (China) have initiated negotiations but neither of the two exchanges tax information with Argentina as there is no 
agreement or convention in force to cover such exchange.
360 While Panama has the status of 
cooperative country, however, Hong Kong (China) is still considered a non-cooperative country.361 
                                               
352 Argentina's second written submission, para. 9. 
353 Argentina's first written submission, paras. 188 and 210. See also response to Panel question No. 33. 
354 Argentina's second written submission, para. 46. 
355 Argentina's first written submission, pa ras. 49-51 (referring to Exhibit ARG-8). 
356 Article 1 of Decree No. 589/2013, (Exhibits PAN-3 / ARG-35). 
357 We note, however, that AFIP Resolution No. 3.576/2013, "adopted in exercise of the powers 
conferred by Article 2(b) of Decree No. 589" exhibits slight differences in comparison with Decree No. 589/2013. On the one hand, Article 1 of this Resolution establishes three categories of cooperative country: "(a) cooperative countries which have signed a double taxation convention or information exchange 
agreement, with a positive assessment of effective exchange of info rmation; (b) cooperative countries with 
which a double taxation convention or information exch ange agreement has been si gned but it has not been 
possible to assess effective exchange; and (c) cooperativ e countries with which the process of negotiating or 
ratifying a double taxation convention or information exchange agreement has been initiated". We also note 
that the third category refers to initiation of the negotiation or ratification process, whereas Decree No. 589/2013 refers only to negotiation. See AFIP Resolution No. 3.576/2013, (Exhibits PAN-3 / ARG-37). 
358 Amending Protocol in force sinc e 30 June 2011. See Argentina's response to Panel question No. 13. 
359 Germany signed the OECD Convention on Mutual Ad ministrative Assistance in Tax Matters, to which 
Argentina is a party, on 3 November 2011, although it ha s not yet entered into force.  See Argentina's response 
to Panel question No. 13. 
360 Argentina's first written submission, paras. 131 and 132; and responses to Panel questions 
Nos. 10(b)(i) and 10(b)(ii). The other countries with which Argentina has initiated negotiations since Decree No. 589/2013 entered into force and which do not appear on the current list of cooperative countries are WT/DS453/R 
 
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  7.184.  This factual situation makes it extremely difficult for us to make the comparison we need 
to make for an examination of likeness, especia lly when considering "other factor(s)" that are 
relevant. Nor has Argentina indicated to us how such a comparison is to be made taking into account this factual situation. We consider that the current circumstances make it impossible for 
us to compare relevant services and service suppliers in order to evaluate relevant "other 
factor(s)" in addition to their origin. 
7.185.  Accordingly, having concluded that the difference in treatment between cooperative and 
non-cooperative countries inherent in the eight measures at issue is due to origin, we consider 
that Panama has proved that services and serv ice suppliers of cooperative and non-cooperative 
countries are like by reason of origin. 
7.186.  In the light of the foregoing, we find that, for the purposes of the claims made by Panama 
under Article II:1 of the GATS, the services and se rvice suppliers of cooperative countries are like 
the services and service suppliers of non-cooperative countries. 
7.3.2.2.3.3  Third requirement: Whether the measures at issue do not immediately and 
unconditionally accord treatment no less favourable to like services and service 
suppliers 
7.187.  We continue our analysis with the third requirement of the legal standard under Article II:1 
of the GATS, namely, whether Panama has proved that the measures at issue do not "immediately 
and unconditionally" accord "treatment no less favourable" to like services and service suppliers. We shall start by examining whether the measures at issue accord no less favourable treatment to the like services and service suppliers we have just identified. Next, if there is no less favourable 
treatment, we shall consider whether such treatment is accorded immediately and unconditionally. 
7.188.  Before beginning our analysis, however, we think it necessary to clarify a matter raised by 
Argentina with regard to the terms of comparison to be used in determining the existence of no 
less favourable treatment: whether the treatment accorded to the complaining Member is that 
which should be the subject of comparison in a no less favourable treatment determination or whether it should be the treatment accorded to any other Member even when it is not the 
treatment given to the complaining Member. 
(a) Whether the treatment accorded to the complaining Member is that which 
should be the subject of comparison  in a no less favourable treatment 
determination  
7.189.  One of Argentina's principal arguments regarding the "treatment no less favourable" 
element of Article II:1 of the GATS concerns th e status of the complainant as a cooperative 
country. Argentina argues that Panama has not established a prima facie case that services and 
service suppliers of non-cooperative countries receive less favourable treatment since Panama 
enjoys cooperative country status. According to Argentina, this status as a cooperative country means that Panama receives the most favourable treatment.
362 
7.190.  In Argentina's opinion, "the reference to services and service suppliers of any other 
Member in Articles II and XVII should be underst ood as a reference to the specific services and 
service suppliers originating in the complaining Member"363, which are allegedly those which 
receive less favourable treatment. The treatmen t they receive should be compared with the 
treatment accorded to "the services and service suppliers that are the subject of the complaint", 
whether domestic (in the case of claims under Arti cle XVII of the GATS) or of another origin (in the 
case of claims under Article II of the GATS).364 
                                                                                                                                               
Belarus, Cameroon, Côte d'Ivoire, Cy prus, Gabon and Gibraltar. See Argent ina's response to Panel question 
No. 10(b)(i), para. 5. 
361 Argentina claims that the reason why Hong Kong (China) is not on th e list of cooperative countries is 
because the list is updated at the beginning of each fiscal year. We note, however, that the list was not updated at the beginning of the 2015 fiscal year. See Arge ntina's response to Panel question No. 10(b)(ii). 
362 Argentina's first written submission, paras. 165 and 166. 
363 Argentina's first written submission, para. 154. 
364 Argentina's first written submission, para. 149. WT/DS453/R 
 
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  7.191.  Panama disagrees with Argentina and contends that "[t]he ordinary meaning of the terms 
'any other Member' [in Articles II and XVII of the GATS] and 'that other Member' [in 
Article XXVIII(f) of the GATS] is cl early not the 'complaining Member'".365 Panama adds that "the 
benchmark for determining the existence of trade in services and the mode of supply is the 
presence/absence of the supplier in the defending Member ."366 Panama also indicates that 
Article 3.8 of the DSU provides that the nullification or impairment presumed once a measure's inconsistency with WTO obligations has been found refers to " other Members  party to the covered 
agreement" and not to the complaining Member.
367 Furthermore, it points out that Article XXIII of 
the GATS provides that a Member may have recourse to the DSU if it "considers that any other Member fails to carry out its obligations or spec ific commitments" under the GATS, without at all 
mentioning that the effects of the alleged non-compliance by any other Member must be borne by 
the complaining Member.
368 In any event, Panama clarifies that it has proved the existence of 
negative effects on Panamanian suppliers during the period in which Panama was considered a non-cooperative country.
369 
7.192.  In our view, determining the existence of less favourable treatment does not necessarily 
imply comparing the treatment given to services and service suppliers of the complaining Member. Although it is true that in most disputes the complaining Member is the Member affected by the 
allegedly less favourable treatment accorded by the respondent, we recall that in EC – Bananas III 
the Appellate Body determined that no provision of the DSU contains any requirement on the need for the complainant to have a "legal interest or right", as shown below: 
We agree with the Panel 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". We do not accept that the need for a "legal interest" is implied in the DSU or in any other provision of the WTO 
Agreement . It is true that under Article 4.11 of the DSU, a Member wishing to join in 
multiple consultations must have "a substantial trade interest", and that under Article 10.2 of the DSU, a third party must have "a substantial interest" in the matter 
before a panel. But neither of these provisions in the DSU, nor anything else in the 
WTO Agreement , provides a basis for asserting that parties to the dispute have to 
meet any similar standard.
370 
7.193.  The Appellate Body also indicated that Members have broad discretion in deciding whether 
to bring a case against another Member under the DSU and they have to judge whether such 
action would be fruitful.371 
7.194.  The Appellate Body's statement in Canada – Autos  also appears relevant to us in respect of 
the comparison required under Article II:1 of the GA TS. The Appellate Body held that "[t]he text of 
Article II:1 requires, in essence, that treatment by  one Member of 'services and services suppliers' 
of any other Member be compared with treatment of  'like' services and service suppliers of 'any 
other country'".372 
7.195.  In the dispute before us, we note that Panama currently has cooperative status. Panama 
nonetheless indicates that when it requested the establishment of a panel it had the status of a non-cooperative country
373 and it was only after the establishment of this Panel that Argentina 
                                               
365 Panama's second written submission, para. 2.59. 
366 Panama's second written submission, para. 2.59. (emphasis original) 
367 Panama's second written submission, para. 2.61. (emphasis original) 
368 Panama's second written submission, paras. 2.61 and 2.62. 
369 Panama's second written submission, para. 2.62. 
370 Appellate Body Report, EC – Bananas III , para. 132. (footnote omitted; emphasis original) 
371 Appellate Body Report, EC – Bananas III , para. 135. 
372 Appellate Body Report, Canada – Autos , para. 171. 
373 The terminology used by Panama in its panel request is "listed countries". By "listed countries", 
Panama means all those WTO Members listed in Decree No. 1344/98, as amended by Decree No. 1037/00. We recall that the list mentioned by Panama was amended after the entry into force of Decree No. 589/2013, Article 1 of which replaces the seventh unnumbered article incorporated by Decree No. 1037/00 following 
Article 21 of the Regulations to the LIG, consolidated text of 1997 and amendments thereto, approved by 
Article 1 of Decree No. 1344/98 and amendments thereto. See Panama's request for the establishment of a panel, and Decree No. 589/2013, (Exhibits PAN-3 / ARG-35). WT/DS453/R 
 
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  changed its status to that of a cooperative jurisdiction.374 Taking into account the Appellate Body's 
case law in EC – Bananas III , we do not consider that that change in Panama's status affects its 
right to bring a complaint under the DSU. At the same time, we do not consider that we should interfere in the broad discretion enjoyed by Panama to decide whether to bring a complaint against 
another Member under the DSU and whether such complaint would be fruitful for it. 
7.196.  Bearing in mind the foregoing, we conclude  that the submission of claims under Article II:1 
of the GATS does not require that the allegedly le ss favourable treatment that is the subject of the 
complaint must refer to the complaining party in this dispute, i.e. Panama. 
(b) Whether the measures at issue do not accord treatment no less favourable to 
like services and service suppliers  
7.197.  After examining this preliminary issue, we turn to consider whether Panama has proved 
that the measures at issue do not accord "treatment no less favourable" to like services and 
service suppliers. We shall start by interpreting  the expression "treatment no less favourable" 
within the meaning of Article II:1 of the GATS. In th e light of our interpretation of this expression, 
we shall then proceed to determine whether the eight measures in relation to which Panama has 
put forward claims under Article II of the GATS gr ant treatment no less favourable to services and 
service suppliers of non-cooperative countries comp ared to the treatment accorded to like services 
and service suppliers of cooperative countries. 
7.198.  We note that Article II:1 of the GATS does not define the concept of "treatment no less 
favourable". Nor does the scant jurisprudence on this provision provide us with a definition of this concept even though, as we pointed out earlier, the Appellate Body in Canada – Autos indicated 
that Article II:1 of the GATS "requires, in essenc e, that treatment by one Member of 'services and 
services suppliers' of any other Member be compared  with treatment of 'like' services and service 
suppliers of 'any other country'".
375 
7.199.  The parties have engaged in an intense debate on the interpretation of the phrase 
"treatment no less favourable" under Article II:1 of the GATS and, in particular, on the possibility of transposing to the GATS context the Appellate Body case law on the relevance of legitimate 
regulatory distinctions in relation to "treatment no less favourable" under Article 2.1 of the 
TBT Agreement. 
7.200.  Argentina's proposal asserts that the conclusions reached by the Appellate Body in 
US - Clove Cigarettes on Article 2.1 of the TBT Agreement are applicable to the interpretation of 
"treatment no less favourable" in Articles II and XVII of the GATS.
376 Argentina considers, in 
particular, that a "measure does not accord 'less favourable treatment' if the detrimental impact on imports 'stems exclusively from legitimate regulatory distinctions'".
377 Argentina emphasizes 
that the interpretation of the expression "treat ment no less favourable" in Article 2.1 of the 
TBT Agreement, as developed by the Appellate Body in US – Clove Cigarettes, was made in the 
light of the object and purpose of the TBT Agreem ent, which is "to strike a balance between, on 
the one hand, the objective of trade liberalizati on and, on the other hand, Members' right to 
regulate'".378 Argentina considers that this approach is also applicable to interpretation of the 
expression "treatment no less favourable" in the context of Articles II and XVII of the GATS, inasmuch as the preamble to the GATS itself "expressly recognizes that the object and purpose of 
the Agreement is to promote the progressive liberalization of trade in services at the same time as 
confirming Members' right to regulate services in order to meet national policy objectives".
379 
Argentina asserts that this balance between liberalization and regulation is to be found in the 
provisions of the GATS and, by way of  example, cites Articles VI and VII.380 In the light of the 
foregoing, Argentina states that "the term 'treatment no less favourable' in Articles II and XVII 
                                               
374 Panama's second written submission, para. 2.62. 
375 Appellate Body Report, Canada – Autos , para. 171. 
376 Argentina's first written submission, paras. 225 and 226. 
377 Argentina's first written submission, paras. 225 and 226 (citing Appellate Body Report, US – Clove 
Cigarettes , para. 175). 
378 Argentina's first written submission, para. 225 (citing Appellate Body Report, US – Clove Cigarettes , 
para. 174). 
379 Argentina's first written submission, para. 226. 
380 Argentina's first written submission, para. 227. WT/DS453/R 
 
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  must be interpreted as having the same meaning as the term 'treatment no less favourable' in 
Article 2.1 of the TBT Agreement".381 
7.201.  Argentina asks us to proceed in the manner indicated by the Appellate Body in US - Clove 
Cigarettes , that is, to "carefully scrutinize the particular circumstances of the case, that is, the 
design, architecture, revealing structure, operation,  and application of the technical regulation at 
issue, and, in particular, whether that technical regulation is even-handed", in order to determine 
whether the detrimental impact on services and service suppliers of non-cooperative countries in 
the Argentine market stems from a legitimate regulatory distinction.382 Argentina considers that its 
measures differentiate on the basis of a legitimate regulatory distinction which is "the ability of the national tax authorities to obtain tax information from other jurisdictions", and are in line with internationally recognized objective criteria, for which reason the treatment they prescribe for 
services and service suppliers of non-cooperative countries does not constitute less favourable 
treatment in comparison with that accorded to like services and service suppliers of cooperative countries.
383 
7.202.  Panama considers that Argentina's argument is "erroneous" and is not based on the case 
law cited by Argentina or on the conclusions of the Appellate Body in EC – Seal Products .384 
Panama contends that the case law in relation to Article 2.1 of the TBT Agreement cannot simply 
be extrapolated to the context of the GATT 1994 or  the GATS inasmuch as it was developed taking 
into account the specific context of that provision. Panama also points out that the interpretation of "treatment no less favourable" developed in US – Clove Cigarettes  also had other relevant 
aspects, such as the fact that the TBT Agreement has no provision containing general exceptions, 
similar to Article XX of the GATT 1994.
385 
7.203.  Panama considers that its position is borne out by the Appellate Body's statement in EC – 
Seal Products  that there is no legal reason why "the legal standards for similar obligations – such 
as Articles I and III:4 of the GATT 1994, on the one hand, and Article 2.1 of the TBT Agreement, 
on the other hand – must be given identical meanings".386 Panama argues that the contextual 
differences which gave rise to diverse interpretations of the expression "treatment no less 
favourable" in relation to the TBT Agreement, on  the one hand, and the GATT 1994, on the other, 
also apply as between the TBT Agreement and the GATS. Panama mentions in this connection the 
existence of Article XIV of the GATS, which contains general exceptions similar to those in Article XX of the GATT 1994 and which, therefore, excludes transposition of the interpretation 
developed under Article 2.1 of the TBT Agreement to Articles II and XVII of the GATS. Panama 
concludes that "[i]n the context of Articles II:1 and XVII of the GATS, there is 'less favourable 
treatment' when the conditions of competition ar e modified, without it being necessary to examine 
the existence of a legitimate regulatory distinction".
387 
7.204.  From the parties' arguments, we note that, certainly, the expression "treatment no less 
favourable" in Article II:1 of the GATS is also to be found in Article 2.1 of the TBT Agreement and 
Article III:4 of the GATT 1994, as well as in Ar ticle XVII of the GATS. We consider that these 
provisions may constitute a relevant context when interpreting the expression "treatment no less favourable" under Article II:1 of the GATS. Neverthe less, before turning to the context, we recall 
that Article 31.1 of the 1969 Vienna Convention on  the Law of Treaties states that the starting 
point for an interpretative exercise is the "the ordinary meaning to be given to the terms of the 
treaty".
388 Article 31.1 of the Vienna Convention adds that the basis of interpretation shall be not 
only the ordinary meaning of the terms but also "t heir context and in the light of [the treaty's] 
object and purpose". This was reiterated by the Appellate Body in EC – Asbestos when it observed 
that the same term389 present in several provisions "must be  interpreted in light of the context, 
                                               
381 Argentina's first written submission, para. 228. 
382 Argentina's first written submission, para. 230 (citing Appellate Body Report, US – Clove Cigarettes , 
para. 182). 
383 Argentina's first written submission, paras. 231, 232, 235 and 236. 
384 Panama's second written submission, para. 2.68. 
385 Panama's second written submission, para. 2.69. 
386 Panama's second written submission, para. 2.71 (referring to Appellate Body Report, EC – Seal 
Products , para. 5.123). 
387 Panama's second written submission, para. 2.72. See also second written submission, para. 2.73. 
388 Vienna Convention on the Law of Treaties (Vienna Convention), done at Vienna on 23 May 1969, 
United Nations document A/CONF.39/27. 
389 The expression to be interpreted in EC – Asbestos  cited in this quotation was "like products". WT/DS453/R 
 
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  and of the object and purpose, of the provision at issue, and of the object and purpose of the 
covered agreement in which the provision appears."390 We shall thus start with the ordinary 
meaning of the terms composing the expression "treatment no less favourable". 
7.205.  We turn to the dictionary of the Spanish Royal Academy for the definition of the ordinary 
meaning of the Spanish terms " trato" (treatment), " menos " (less), and " favorable " (favourable).391 
"Trato " (treatment) is defined as " acción y efecto de tratar " (action and effect of treating).392 
"Tratar" (to treat) is to be understood as meaning "[ p]roceder con una persona de determinada 
manera, de obra o de palabra " (deal with a person in a certain way, in deed or in word).393 If we 
look at the ordinary meaning of the term " menos " (less), we find that "[a]nte adjetivos o 
adverbios, indica que el grado de la propiedad que expresan es bajo en comparación con otro 
explícito o sobrentendido " (before adjectives or adverbs, indicates that the degree of property they 
express is low in comparison with another explicit or implied degree).394 Lastly, " favorable " 
(favourable) means " que favorece " (which favours).395 "Favorecer " (to favour) has been defined as 
"[d]ar o hacer un favor " (give or do a favour), " favor" (favour) being understood to mean " honra, 
beneficio, gracia " (honour, benefit or kindness).396 From the ordinary meaning of the terms, it can 
be seen that the expression "treatment no less favourable" refers to the action of not granting a benefit to some in smaller measure than to others. Let us nevertheless place this ordinary 
meaning within its context and in the light of the object and purpose of the treaty in which the 
expression is to be found, as provided by Article 31.1 of the Vienna Convention. 
7.206.  The Panel notes that both parties, in developing their arguments on interpretation of the 
expression "treatment no less favourable", have st ressed the important role played by the context, 
making special reference to the interpretation of the same concept in Article 2.1 of the 
TBT Agreement by the Appellate Body in US – Clove Cigarettes . In fact, as indicated by Panama, 
the Appellate Body itself, in EC – Seal Products, underlined the importance of the context to the 
interpretation when it stated that "it is the spec ific context of Article 2.1 of the TBT Agreement … 
that supports a reading that Article 2.1 does not operate to prohibit a priori  any restriction on 
international trade".
397 
7.207.  We agree with the parties on the need to look at the context of the expression "treatment 
no less favourable" when interpreting it in accordance with Article 31.1 of the Vienna Convention, and we shall now do this. First, we shall address the immediate context of the expression, shaped by the actual terms of Article II, before examinin g its broader context, comprising other provisions 
of the GATS, as well as other covered agreements. 
7.208.  We draw attention to the text of Article II:1, which states: 
With respect to any measure covered by this Agreement, each Member shall accord 
immediately and unconditionally to services and service suppliers of any other 
Member treatment no less favourable than that it accords to like services and service suppliers of any other country. 
                                               
390 Appellate Body Report, EC – Asbestos , para. 88. 
391 We nevertheless recall that, as stated by the Appellate Body, "dic tionaries alone are not necessarily 
capable of resolving complex questions of interpretation" but "are important guides to, but not dispositive of, the meaning of words appearing in tr eaties". See Appellate Body Report, China – Publications and Audiovisual 
Products , para. 348 (referring to Appellate Body Reports, US – Gambling , para. 164; US – Softwood 
Lumber IV , para. 59; Canada – Aircraft , para. 153; EC – Asbestos , para. 92; and US – Offset Act (Byrd 
Amendment) , para. 248. 
392 Diccionario de la Lengua Española , 23rd edition, Real Academia Española  (Espasa Calpe, 2014), 
Vol. II, p. 2165. 
393 Diccionario de la Lengua Española , 23rd edition, Real Academia Española  (Espasa Calpe, 2014), 
Vol. II, p. 2165. 
394 Diccionario de la Lengua Española , 23rd edition, Real Academia Española  (Espasa Calpe, 2014), 
Vol. II, p. 1446. 
395 Diccionario de la Lengua Española , 23rd edition, Real Academia Española  (Espasa Calpe, 2014), 
Vol. I, p. 1015. 
396 Diccionario de la Lengua Española , 23rd edition, Real Academia Española  (Espasa Calpe, 2014), 
Vol. I, p. 1015. 
397 Appellate Body Report, EC – Seal Products , para. 5.124 (cited in Panama's second written 
submission, para. 2.71). (emphasis original; footnote omitted) WT/DS453/R 
 
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  7.209.  In reading this text, we note two aspects in particular which we consider relevant to the 
interpretation of "treatment no less favourable". The first is the broad scope of the obligation under Article II of the GATS, which applies "[w]ith respect to any measure covered by this Agreement". The second aspect is the reference to services and service suppliers in the text of the 
provision. We shall explain below to what extent  these two aspects can inform the interpretative 
exercise we are conducting. 
7.210.  As regards the first aspect, we observe that the scope of the GATS is very broad inasmuch 
as it applies to "measures by Members affecting trade in services".
398 Article XXVIII(a) of the GATS 
defines the term "measure" as "any measure by a Member, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form". The extent of the scope is amplified by the fact that case law has indicated that the term "affecting" should be 
interpreted to mean having "'an effect on', which indicates a broad scope of application".
399 The 
broad scope of the Agreement is also reflected in the fact that in the GATS trade in services is defined as the supply of a service through four modes
400, two of which provide that service 
suppliers may be located outside the territory of the Member "importing" the service.401 
7.211.  The second relevant aspect mentioned above is the reference not only to services but also 
to service suppliers. We consider that this mention of services and service suppliers is particularly 
significant, especially if we draw a comparison  with other agreements such as the GATT 1994 or 
the TBT Agreement, which only refer to products an d not to producers. Accordingly, below we shall 
go into further detail concerning the implications that this reference to service suppliers may have when interpreting the expression "treatment no less favourable". 
7.212.  As we have just stated, the "treatment no less favourable" obligation in Article II:1 of the 
GATS concerns both like services and service su ppliers. In our view, this reference to service 
suppliers is linked to the nature of the services and, thus, to the nature of the actual trade in 
them. Their intangible nature, and the relationship established between the consumer and the 
supplier of the service and, in turn, between the service and its supplier, give services some very special features which differentiate them from g oods and which, in our opinion, have a decisive 
influence on their production, marketing and use. In our view, this immediate context afforded by 
the actual text of Article II:1 of the GATS, in th e light of the special features of services and the 
importance given to suppliers of services
402, appears to indicate that the regulatory framework in 
which service suppliers operate may in certain circumstances be relevant in the context of the 
GATS since it has a direct impact on the service through the natural or legal person supplying the 
service. In this respect, it appears to us that  the determination of the specific aspects of the 
regulatory framework to be considered when examining "treatment no less favourable" can only be 
made on a case-by-case basis. 
7.213.  This position would appear to be supported by the preamble to the GATS. We note in 
particular that the fourth recital of the GATS sp ecifically recognizes "the right of Members to 
regulate, and to introduce new regulations, on the supply of services within their territories in 
order to meet national policy objectives and, given asymmetries existing with respect to the degree of development of services regulations in  different countries, the particular need of 
developing countries to exercise this right". More over, the third recital of the GATS mentions the 
need to achieve higher levels of liberalization of trade, "while giving due respect to national policy 
objectives". 
                                               
398 Article I:1 of the GATS. See section 7.3.1 above. 
399 Appellate Body Report, EC – Bananas III , para. 220. 
400 Article I:2 of the GATS envisages four modes of supply: 
(a) from the territory of one Member in to the territory of any other Member; 
(b) in the territory of one Member to th e service consumer of any other Member; 
(c) by a service supplier of one Member, through co mmercial presence in the territory of any other 
Member; (d) by a service supplier of one Member, through presence of natural pers ons of a Member in the 
territory of any other Member. 
401 We refer to supply of a service from the territor y of one Member into the territory of any other 
Member (mode 1) and supply in the territory of one Member to the serv ice consumer of any other Member 
(mode 2). 
402 We note in this connection that the GATS refers to service supplier s in many provisions, for example, 
Articles IV:2, V:6, VII:1 and VII:3, VIII:5 and IX:1. WT/DS453/R 
 
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  7.214.  This respect for national policy objectives reflected in the preamble to the GATS seems to 
have its counterpoint in the preamble itself and, in particular, in the second and fifth recitals of the GATS. These refer to the creation of the GATS "with a view to the expansion of … trade [in 
services] under conditions of transparency and progressive liberalization and as a means of 
promoting the economic growth … and the developm ent …" and to the importance of facilitating 
"the increasing participation of developing countries … and the expansion of their service exports including, inter alia , through the strengthening of their domestic services capacity". This balance 
between liberalization of trade in services and respect for national policy objectives is also 
reflected in Article XIX of the GATS, which provides that "[t]he process of liberalization shall take place with due respect for national policy object ives and the level of development of individual 
Members". 
7.215.  We do not find in the preamble or in Article XIX of the GATS any definition or enumeration 
of "national policy objectives" on the basis of which Members may exercise their right to regulate the supply of services in their territory. These ob jectives could perhaps relate to the situations 
covered by the general exceptions of Article XIV of  the GATS, namely: protection of public morals 
and public order; protection of human, animal or plant life or health; compliance with laws or regulations which are not inconsistent with the GATS; equitable or effective imposition or collection 
of direct taxes in respect of services or servic e suppliers of other Members or cases of double 
taxation. Nevertheless, these situations, relatively few in themselves
403,  are not reflected in the 
preamble to the GATS. Nor are they reflected in the preamble, the security exceptions in 
Article XIV bis of the GATS or other provisions such as  paragraph 2(a) of the Annex on Financial 
Services, which contains the so-called "prudential exception". In our view, equating the national 
policy objectives mentioned in the preamble and in Article XIX of the GATS with the situations covered by the few general exceptions would mean that any regulation adopted "in order to meet 
national policy objectives" would necessarily be a violation of the basic principle of 
non-discrimination and would require justification under Articles XIV and XIV bis. In our view, if this were the case, the drafters of the GATS would have included it in the wording of the 
Agreement. 
7.216.  We therefore consider that, although the ri ght of Members to regulate in accordance with 
their national policy objectives in the context of the GATS cannot be seen as an unlimited right, it 
should not be confined to the objectives set out in Articles XIV and XIV bis. As stated in the 
preamble to the GATS itself, this right recognized in the Agreement finds it counterpoint in the 
express desire of the signatories to the Agreement to expand trade in services under conditions of 
transparency and progressive liberalization and as a means of promoting economic growth and 
development. 
7.217.  It is our understanding that Members' right to regulate in accordance with their national 
policy objectives, as enshrined in the preamble to the GATS, confirms the relevance of the 
regulatory framework established to meet these objectives in the area of trade in services. 
7.218.  We continue our interpretative exercise by examining the context afforded by another 
provision of the GATS containing the expression "treatment no less favourable": Article XVII of the GATS on the principle of nation al treatment. Unlike Article II of the GATS, paragraph 3 of 
Article XVII defines what is considered treatment less favourable in the context of this provision as 
follows: 
Formally identical or formally different trea tment … [which] modifies the conditions of 
competition in favour of services or service suppliers of the Member compared to like 
services or service suppliers of any other Member. 
7.219.  Consequently, "[t]his treatment is to be assessed in terms of the 'conditions of 
competition' between like services and services suppliers".
404 
7.220.  As already mentioned, although the Appe llate Body has exercised caution regarding the 
direct transposition of all interpretations deve loped under Article XVII to Article II of the GATS405, 
                                               
403 In fact, if we take Article XX of the GATT 1994 as a benchmark, which has often been used in 
interpreting the Article XIV exceptions because of its si milar wording, we see that the list of exceptions in 
Article XX is much longer. 
404 Panel Report, China – Publications and Audiovisual Products , para. 7.978. WT/DS453/R 
 
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  we consider the context afforded by this provision to be useful inasmuch as the Appellate Body has 
transposed interpretations developed under Article XVII to Article II of the GATS.406 We find no 
impediment to using the definition of "treatment no less favourable" in Article XVII in the context of Article II of the GATS. As in EC – Bananas III , in which the Appellate Body established that 
Articles II and XVII of the GATS cover both de jure and de facto discrimination, even though only 
Article XVII does so explicitly, we consider that in Article II, the concept of "treatment no less 
favourable" also hinges on the "conditions of competition", even though this is not explicitly 
stated. The context afforded by the interpretation s of "treatment no less favourable" developed by 
the Appellate Body in connection with the GATT 1994 and the TBT Agreement, in our view, support 
this affirmation. We therefore turn now to ex amine them as part of the broader context of 
Article II of the GATS. 
7.221.  As regards the context provided by other covered Agreements, the parties urge us to take 
into account the interpretation of "treatment no less favourable" developed by the Appellate Body in relation to Articles I:1 and III:4 of the GATT 1994 and Article 2.1 of the TBT Agreement.
407 
These provisions read: 
Article I 
General Most-Favoured-Nation Treatment 
1. With respect to customs duties and charges of any kind imposed on or in 
connection with importation or exportation or imposed on the international transfer of payments for imports or exports, and with  respect to the method of levying such 
duties and charges, and with respect to all rules and formalities in connection with 
importation and exportation, and with respect to all matters referred to in paragraphs 
2 and 4 of Article III, any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall 
be accorded immediately and unconditionally  to the like product originating in or 
destined for the territories of all other contracting parties. 
Article III 
National Treatment on Internal Taxation and Regulation 
4. The products of the territory of any contracting party imported into the territory of 
any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and 
requirements affecting their internal sale, offering for sale, purchase, transportation, 
distribution or use. The provisions of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the 
economic operation of the means of transport and not on the nationality of the 
product. 
Article 2 
Preparation, Adoption and Application of Technical Regulations by 
Central Government Bodies  
1. Members shall ensure that in respect of  technical regulations, products imported 
from the territory of any Member shall be accorded treatment no less favourable than 
that accorded to like products of national origin and to like products originating in any 
other country. 
                                                                                                                                               
405 See footnote 316 above. 
406 See footnote 317 above. 
407 Panama refers to Articles I an d III:4 of the GATT 1994, while Argentin a focuses on Article 2.1 of the 
TBT Agreement. See Panama's  first written submission, paras. 4.20 and 4.26; and Argentina's first written 
submission, paras. 225 and 226. WT/DS453/R 
 
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  7.222.  As regards Article  I:1 of the GATT 1994, Panama considers that it should be taken into 
account when interpreting Article II of the GATS.408 According to Panama, "[i]n the light of the 
context afforded by the provisions on MFN treatment in the GATT, especially Article I:1, it is to be 
understood that, in respect of services, the expression 'treatment no less favourable' in Article II:1 
of the GATS refers to each Member's obligation to accord to the services and service suppliers of 
any other Member, any advantage  which creates  more favourable competitive opportunities for 
like services and like service suppliers of any other country".409 In Panama's opinion, this 
interpretation is supported by the case law de veloped under Article III of the GATT 1994, which 
also refers to the cond itions of competition.410 
7.223.  We note that Article I:1 of the GATT 1994 does not specifically mention the words 
"treatment no less favourable". As we see from the wording of the provision, what is granted 
"immediately and unconditionally" in this case is "any advantage, favour, privilege or immunity". 
In any event, as Article I of the GATT 1994 , like Article II of the GATS, contains the 
most-favoured-nation treatment obligation, it will be  useful to us in the interpretative exercise we 
are undertaking. In this connection, we point out th at previous panels linked the word "advantage" 
to the existence of "'more favourable competitiv e opportunities'" or [which] affect the commercial 
relationship between products of different origins".411 In our view, this follows the approach we 
took previously when highlighting the reference to modification of the conditions of competition in 
Article XVII of the GATS. 
7.224.  The two other provisions we are examining as context (Article III:4 of the GATT 1994 and 
Article 2:1 of the TBT Agreement) do include the expression "treatment no less favourable". In 
Article III:4 of the GATT 1994, no less favourable treatment is mentioned in connection with the 
national treatment obligation in relation to domestic regulations. Although Article II of the GATS refers to the most-favoured-nation treatment obligation and not the national treatment obligation, 
we consider that Article III:4 could offer a useful context as it contains the expression to be 
interpreted.
412 A s  i n d i c a t e d  b y  A r g e n t i n a ,  w e  a l s o  f i n d  t h i s  e x p r e s s i o n  i n  A r t i c l e  2 . 1  o f  t h e  T B T  
Agreement, which deals with national treatment and most-favoured-nation obligations. 
7.225.  The principal common feature we identify  in Article II of the GATS and in these two 
provisions is the text. The three provisions use the expression "treatment no less favourable".413 It 
should be noted, however, that, as we mentioned previously, the fact that the actual wording is the same does not necessarily indicate that identical meaning is to be attributed to this 
expression
414, so we shall move forward with our analysis noting how the concept of "treatment no 
less favourable" has been interpreted in Articles III:4 of the GATT 1994 and 2.1 of the TBT Agreement in the light of the context provided by their respective Agreements and to what extent 
these interpretations can inform our approach under Article II of the GATS. 
7.226.  With regard to Article III:4 of the GATT 1994, the Appellate Body has determined that 
there is less favourable treatment if "a measure modifies the conditions of competition in the 
relevant market to the detriment of imported products".
415 In Thailand - Cigarettes (Philippines) , 
the Appellate Body clarified that "there must be in every case a genuine relationship between the measure at issue and its adverse impact on competitive opportunities for imported versus like domestic products".
416 We also find this idea in EC – Seal Products , in which the Appellate Body 
explained that there is less favourable treatment if, after assessing "the implications of the 
contested measure for the equality of competitive conditions between imported and like domestic products" the conclusion is "that the measure has a detrimental impact on the conditions of 
competition for like imported products".
417 
                                               
408 Panama's first written submission, para. 4.20. 
409 Panama's first written submission, para. 4.22. (emphasis original) 
410 Panama's first written submission, para. 4.23. 
411 Panel Reports, Colombia – Ports of Entry , para. 7.341; and US – Poultry (China) , para. 7.415 (citing 
Panel Report, EC – Bananas III (Guatemala / Honduras ), para. 7.239). 
412 Panama's first written submission, para. 4.26. 
413 In the case of Article III:4 of the GATT 1994, the exact wording is "…  shall be accorded treatment no 
less favourable…". 
414 See para. 7.204 above. 
415 Appellate Body Report, Korea – Various Measures on Beef , para. 137. (emphasis original) 
416 Appellate Body Report, Thailand – Cigarettes (Philippines) , para. 134. 
417 Appellate Body Report, EC – Seal Products , para. 5.116. WT/DS453/R 
 
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  7.227.  In connection with Article 2.1 of the TBT Agreement, the Appellate Body stated that, in 
order to determine whether there is less favourable treatment, it must be determined "whether the technical regulation at issue modifies the conditions of competition in the market of the regulating Member to the detriment of the group of imported products vis-à-vis  the group of like 
domestic products" and whether this detrimental impact stems exclusively from a legitimate 
regulatory distinction.
418 As stated by the Appellate Body in US – Clove Cigarettes : 
[W]here the technical regulation at issue does not de jure discriminate against 
imports, the existence of a detrimental impact on competitive opportunities for the 
group of imported vis-à-vis  the group of domestic like products is not dispositive of 
less favourable treatment … Instead, a panel must further analyse whether the detrimental impact on imports stems exclusively from a legitimate regulatory 
distinction rather than reflecting discrimination against the group of imported 
products. In making this determination, a panel must carefully scrutinize the particular circumstances of the case, that is, the design, architecture, revealing 
structure, operation, and application of the technical regulation at issue, and, in 
particular, whether that technical regulation  is even-handed, in order to determine 
whether it discriminates against the group of imported products.
419 
7.228.  As we have already seen in relation to Article II of the GATS, one of the aspects which 
differentiates it from the other covered agreem ents is the reference to "service suppliers".420 
Whereas the agreements relating to goods refer on ly to "products" (and not to "producers"), the 
no less favourable treatment affects both services and suppliers of services. We consider that this 
difference between the GATS, on the one hand, and the GATT 1994 and the TBT Agreement, on 
the other, has a decisive influence on the use we can make of the interpretations developed in these Agreements in the GATS context. 
7.229.   Another important aspect that we consider it necessary to highlight is the existence of a 
general exceptions clause both in Article XX of the GATT 1994 and in Article XIV of the GATS, 
although we note that fewer exceptions are lis ted under Article XIV of the GATS than under 
Article XX of the GATT 1994. This is not the case for the TBT Agreement, in which there is no 
similar provision. We recall that this was precisely one of the aspects taken into account by the Appellate Body when interpreting the expression "treatment no less favourable" in Article 2.1 of the TBT Agreement.
421 
7.230.  We nevertheless note some similarities between the GATS and the TBT Agreement as far 
as the importance of the regulatory element in b o t h  A g r e e m e n t s  i s  c o n c e r n e d .  W e  f i n d  i n  t h e  
preambles to both Agreements recognition of Member s' right to regulate with a view to achieving 
certain objectives. On the one hand, the sixth recital of the TBT Agreement contains an "explicit 
recognition of Members' right to regulate in order to pursue certain legitimate objectives"422, a 
right which, as stated by the Appellate Body, is curtailed by the provision in the fifth recital, which 
states that "unnecessary obstacles to international trade" must not be created.423 On the other 
hand, as already explained, the fourth recital of the GATS explicitly recognizes "the right of Members to regulate, and to introduce new regulations, on the supply of services within their territories in order to meet national policy obje ctives and … the particular need of developing 
countries to exercise this right". The third recital,  in turn, refers to the need to achieve higher 
levels of liberalization of trade in services "while giving due respect to national policy objectives". 
7.231.  Having examined the context of the expression "treatment no less favourable" in 
Article II:1 of the GATS, which comprises provisions  of the Agreement itself and interpretations of 
this expression developed under other covered agreements, we have reached the conclusion that we cannot ignore the reference to "service suppliers" in Article II:1 of the GATS when defining the 
concept of "treatment no less favourable", since they are also covered by the 
                                               
418 Appellate Body Report, US – Clove Cigarettes , paras. 180 and 181. We point out that in that dispute 
the panel's analysis of treatment no less favourable focused on the national treatment obligation under Article 2.1 of the TBT Agreement. This provision also contains the most-favoured-nation obligation. 
419 Appellate Body Report, US – Clove Cigarettes , para. 182. 
420 Service suppliers are also referred to in Article XVII of the GATS. 
421 Appellate Body Report, US – Clove Cigarettes , para. 101. See also Appellate Body Report, US – Clove 
Cigarettes , para. 109. 
422 Appellate Body Report, US – Clove Cigarettes , para. 94. 
423 Appellate Body Report, US – Clove Cigarettes , para. 95. WT/DS453/R 
 
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  most-favoured-nation treatment obligation. Accordin gly, we do not think that the interpretations 
developed under Articles III:4 of the GATT 1994 an d 2.1 of the TBT Agreement can be transposed 
directly to Article II:1 of the GATS. 
7.232.  We realize that the mention of service suppliers might lead the interpreter, in the light of 
the specific circumstances of each dispute, to take other aspects into account in its interpretation 
of "treatment no less favourable", for example, the relevant regulatory aspects concerning service suppliers which have an impact on the conditions of competition. Consideration of these regulatory 
aspects could, depending on the case, mean that certain regulatory distinctions between service 
suppliers established by a Member do not necess arily constitute "treatment … less favourable" 
within the meaning of Article II:1 of the GATS. 
7.233.  It is our understanding that this view appears to be confirmed by the object and purpose 
of the GATS, as set out in its preamble. It is the preamble to the GATS which refers to a balance 
between the objective of expanding trade in conditions of transparency and progressive liberalization, on the one hand, and, on the other,  the right of Members to regulate the supply of 
services in their territories and to establish new regulations in this regard in order to meet national 
policy objectives.
424 
7.234.  We consider likewise that the element concerning the conditions of competition should also 
be taken into account in our interpretation of "treatment no less favourable" under Article II:1 of 
the GATS, just as it is present in Article XVII of the GATS and in Articles I:1 and III:4 of the GATT 1994 and Article 2.1 of the TBT Agreement. 
7.235.  Below, we shall transpose this approach to the circumstances of the case before us in 
order to determine, measure by measure, whether Argentina accords treatment no less favourable 
to services and service suppliers of non-cooperat ive countries compared to the treatment given to 
services and service suppliers of cooperative countries. To this end, we shall first determine 
whether Argentina accords different treatment to these two categories of services and service 
suppliers and then go on to examine whether this treatment is less favourable for like services and 
service suppliers of non-cooperative countries. In this connection, we consider that, in order to 
determine whether treatment is less favourable, it must be assessed whether the measure 
modifies the conditions of competition. We also consider that, in this particular case, such an assessment has to take into account regulatory aspects relating to services and service suppliers that may affect the conditions of competition; in particular, whether Argentina is able to have 
access to tax information on foreign suppliers. In this connection, applying to this dispute the 
statement of the Appellate Body in Thailand – Cigarettes (Philippines) and US – COOL, we consider 
that the assessment of the design, structure and operation of the measures at issue also forms 
part of our examination.
425 Otherwise, we would not be fulfilling our duty to scrutinize carefully the 
particular circumstances of this case. 
(i) Whether the measures at issue accord different treatment to services and 
service suppliers of non-cooperative countries compared to the treatment 
accorded to like services and servic e suppliers of cooperative countries 
7.236.  We shall begin by examining whether the measures at issue treat services and service 
suppliers of non-cooperative countries differently from like services and service suppliers of 
cooperative countries. The Panel notes that both Panama and Argentina have recognized that the 
measures at issue differentiate on the basis of whether the country of origin of the service and 
service supplier is a cooperative or non-cooperative country.426 The Panel notes that the actual 
text of the challenged Argentine provisions occasionally shows the different treatment accorded to 
                                               
424 See paras. 7.213 and 7.214 above. 
425 Appellate Body Reports, Thailand – Cigarettes (Philippines) , para. 134; and US – COOL , para. 269. 
We note that this statement by the Appellate Body was in relation to the assessment of claims under Article III:4 of the GATT 1994 (in the case of Thailand – Cigarettes (Philippines) ) and Article 2.1 of the TBT 
Agreement (in the case of US – COOL )). 
426 With the exception of certain requir ements that form part of measure 5. We refer in particular to the 
requirements maintained under point 19 of Annex I to SSN Resolution No. 35.615/2011 and Article 4 of SSN Resolution No. 35.794/2011. See Panama's first written submission, paras. 4.35, 4.113, 4.256, 4.311, 4.340, 
4.398, 4.424 and 4.450; second written submission, paras. 2.134, 2.415, 2.517, 2.583, 2.602, 2.698, 2.734, 
2.738 and 2.791; and Argentina's first written submission, paras. 102, 109-110, 112, 123, 125, 196, 202-203, 347, 360-362, 364-365, 369, 373-374, 393, and 396-398. WT/DS453/R 
 
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  services and service suppliers of cooperative and non-cooperative countries.427 Below we shall see 
what constitutes the different treatment envisaged in each of the measures challenged by Panama. 
1. Whether Argentina accords diffe rent treatment under measure 1 
7.237.  As explained in section 2.3.2 above, measure 1 consists of a legal presumption that 
payments made to banks or financial institutions located in non-cooperative countries as 
consideration for the granting of credits or loans or the placement of funds from abroad represent 
a net gain of 100% for the suppliers for the purpose of determining the tax base for gains tax. This 
presumption, which allows no evidence to the contrary, is established in Article 93(c) of the LIG.428 
7.238.  The Panel notes that Article 93(c) of the LIG also covers the treatment accorded when the 
banking or financial institution supplying the service to the Argentine taxpayer is based in a cooperative country. In such cases, the presumed net gain is no longer 100% but 43%. We point 
out that the rate applicable to net gains in both cases is the same, namely, 35%. 
7.239.  Consequently, the different treatment accorded to service suppliers of cooperative 
countries and like service suppliers of non-cooperative countries arises from the specific terms of 
Article 93(c) of the LIG. 
2. Whether Argentina accords diffe rent treatment under measure 2 
7.240.  As explained in section 2.3.3 above, meas ure 2 consists of the presumption of unjustified 
increase in wealth applicable to any entry of funds – for the benefit of Argentine taxpayers – from 
non-cooperative countries in the context of an ex officio determination of the taxable subject matter by the AFIP for the purpose of gains tax. This presumption may be rebutted provided that "it is conclusively shown that the funds originated from activities actually carried out by the 
taxpayer or by a third party in those countries or from placements of duly declared funds". 
Argentina applies this measure pursuant to the unnumbered article added after Article 18 of the LPT.
429 
7.241.  As we indicated when examining the factual context of this measure, the legal 
presumptions in Article 18 of the LPT, which apply to Argentine taxpayers, come into play when the AFIP estimates the tax base ex officio because the taxpayer has not submitted a sworn 
declaration or the declaration is challengeable.
430 The presumption of unjustified increase in wealth 
in subparagraph (f) of Article 18 of the LPT does not provide for any distinction according to the source of the funds. The unnumbered article adde d after Article 18 of the LPT, however, under 
which the measure at issue is applied, does refer specifically to entries of funds from 
non-cooperative countries, which automatically generate for Argentine taxpayers receiving them a 
presumption that they constitute unjustified increases in wealth.
431 
7.242.  We thus note that, in principle, the concept of unjustified increase in wealth in Article 18 of 
the LPT may be applicable to any entry of funds, whether from an Argentine or foreign person and, 
in the latter case, it does not matter whether the funds come from a cooperative or a non-cooperative country. Article 18 of the LPT also  provides for the possibility of rebutting the 
presumptions it contains. We note, however, that in this dispute, the measure at issue challenged 
by Panama does not refer to the presumption of unjustified increase in wealth provided for in subparagraph (f) of Article 18 of the LPT, but to th e presumption of unjustified increase in wealth 
provided for in the unnumbered article added after Article 18 of the LPT, which applies 
automatically to income from non-cooperative countries, "irrespective of its nature or purpose or 
the type of transaction involved".
432 This provision, therefore, is  an exception to the rule of 
                                               
427 This is the case for measures 1, 5 and 6. 
428 Gains Tax Law, (Exhibits PAN-4 / ARG-42). 
429 Law on Tax Procedure, (Exhibits PAN-9 / ARG-45). 
430 See section 2.4.2.2 above. 
431 The result of applying this presumption is a higher  tax base when paying the tax. In this connection, 
the second paragraph of the unnumbered article added foll owing Article 18 of the LPT provides that "unjustified 
increases in wealth … plus ten per cent (10%) as income disposed of or consumed as non-deductible 
expenditure represent net gains during the financial year  in which they occur, for the purpose of determining 
gains tax …". 
432 Panama's second written submission, para. 2.284. WT/DS453/R 
 
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  self-assessment of taxable subject matter by Argentin e taxpayers, a rule that will not apply if the 
funds come from a non-cooperative country. 
7.243.  We therefore consider that Argentina accords different treatment to like services and 
service suppliers from cooperative and non-cooper ative countries inasmuch as the entry of funds 
from one or the other country will have different consequences for Argentine taxpayers when 
determining the tax base for gains tax. Whereas, when funds enter from cooperative countries, the AFIP will apply the general rule of self-assessment of the taxable subject matter, only resorting to 
ex officio determination if the taxpayer has not submitted a sworn declaration or this is 
challenged; in the case of funds entering from non-cooperative countries, the AFIP will automatically determine the taxable subject matter ex officio, applying the presumption of unjustified increase in wealth. Likewise, in our view, the fact that this presumption may be 
rebutted by the taxpayer does not affect the fact that the treatment Argentina accords to like 
services and service suppliers of cooperative and non-cooperative countries is different. 
3. Whether Argentina accords diffe rent treatment under measure 3 
7.244.  As we explained in section 2.3.4 above, measure 3 consists of applying methods for 
valuing transactions based on transfer pricing in order to determine the tax base for gains tax payable by Argentine taxpayers. Argentina applies this measure pursuant to Article 15.2 of the 
LIG.
433 
7.245.  Previously we indicated that Article 14 of  the LIG establishes the rule that transactions 
between an Argentine taxpayer and a foreign person shall be considered as arm's-length transactions "if their services and conditions are in line with normal arm's-length market 
practices".
434 If this is not the case, the valuation will be governed by the provision in Article 15 of 
the LIG, which refers to the use by the AFIP of "averages, indices or coefficients … based on the 
performance of independent companies engaged in identical or similar activities" in order to 
determine the taxable net profit. 
7.246.  The measure at issue provides that transactions between Argentine taxpayers and persons 
of non-cooperative countries "shall not be considered consistent with normal arm's-length market 
practices or prices". We observe, therefore, that irrespective of whether the parties to the 
transaction are related, the fact that one of the parties is domiciled, incorporated or located in a non-cooperative country means that the transaction will be valued on the basis of the rules of Article 15 of the LIG and not on the "normal market price", as is the case for arm's-length 
transactions. 
7.247.  In our view, the measure at issue provides different treatment for like services and service 
suppliers of cooperative and non-cooperative countr ies inasmuch as the rules of Article 15 of the 
LIG always apply provided that one of the parties is from a non-cooperative country, whereas 
these rules will only apply to cooperative countries if their services and conditions are not in line with normal arm's-length market practices. The rule does not thus envisage that transactions 
between Argentine taxpayers and persons from non-cooperative countries might be in line with 
normal arm's-length market practices, and presumes in every case that they are related. 
7.248.  This leads us to conclude that the treatm ent accorded to services and service suppliers of 
cooperative countries is different from that accorded to like services and service suppliers of 
non-cooperative countries. 
4. Whether Argentina accords diffe rent treatment under measure 4 
7.249.  As explained in section 2.3.5 above, meas ure 4 consists of applying the payment received 
rule when allocating expenditure for transactio ns between Argentine taxpayers and persons from 
non-cooperative countries. Argentina applies this measure pursuant to the last paragraph of Article 18 of the LIG.
435 
                                               
433 As regards the claims under the GATT 1994, Panama indicates that measure 3 is applied pursuant to 
Article 8.5 of the LIG. See the Gain s Tax Law, (Exhibits PAN-4 / ARG-42). 
434 See section 2.4.2.3 above. 
435 Gains Tax Law, (Exhibits PAN-4 / ARG-42). WT/DS453/R 
 
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  7.250.  In explaining the factual context for measure 4, it was indicated that the accrual  rule is 
considered to be the general rule for allocating income and expenditure.436 
The measure at issue, however, provides that when an Argentine taxpayer's expenditure constitutes income from an Argentine source for persons located, incorporated, based or domiciled 
in non-cooperative countries, it must be allocated to the tax year in which the payment was 
executed ( payment received rule). It should be pointed out that this allocation of expenditure does 
not necessarily occur in the same tax year as that in which the payment obligation accrues. 
7.251.  Although it is true that the payment received rule is not exclusively restricted to the 
allocation of expenditure constituting income from an Argentine source for persons located, incorporated, based or domiciled in non-cooperative countries
437, we note differences in approach 
in the Argentine rule. This is because it is not permitted to allocate expenditures which constitute 
income for persons in non-cooperative countries on the basis of the accrual rule, irrespective of 
whether the Argentine taxpayer and the person receiving the income of Argentine source are related. However, in cases of allocation of expenditures constituting income for persons in 
cooperative countries, the Argentine taxpayer may apply the accrual rule, provided that there is no 
relationship with the foreign person to which the income accrues. 
7.252.  We thus consider that the treatment accorded to services and service suppliers of 
cooperative countries is different to that accorded to like services and service suppliers of 
non-cooperative countries. 
5. Whether Argentina accords diffe rent treatment under measure 5 
7.253.  As explained in section 2.3.6 above, for the purposes of the claims under Article II:1 of the 
GATS, measure 5 consists of Argentina's imposition on service suppliers of non-cooperative 
countries of requirements that they must meet in  order to be able to gain access to Argentina's 
reinsurance services market. Argentina maintains this measure pursuant to points 18 and 20(f) of 
Annex I to SSN Resolution  No. 35.615/2011.
438 
7.254.  As can be seen from the actual wording of two of the provisions implementing measure 5 
(points 18 and 20(f) of Annex I to Resolution SSN No. 35.615/2011, amended by SSN Resolution  
No. 38.284/2014), Argentina accords different treatment according to whether or not the suppliers 
of reinsurance services are incorporated and registered in cooperative countries. For example, if a foreign company does not prove that it
439 or its parent company440 is incorporated and registered 
in a cooperative country, it must prove that: (i) the foreign company or its parent company is 
subject to the control and supervision of a body fulfilling functions similar to those of the SSN; and 
(ii) that this control and supervisory body to which the foreign company or its parent company is subject has signed a memorandum of understanding  on cooperation and exchange of information 
with the SSN. 
7.255.  We consider that it is obvious, in the light of the text of points 18 and 20(f) of Annex I to 
SSN Resolution No. 35.615/2011, that the treatment accorded to service suppliers of cooperative 
countries is different to that accorded to like service suppliers of non-cooperative countries. 
6. Whether Argentina accords diffe rent treatment under measure 6 
7.256.   As explained in section 2.3.7 above, me asure 6 consists of imposing requirements on 
stock market intermediaries
441 for them to be able to engage in transactions ordered by persons 
                                               
436 See section 2.4.2.4 above. 
437 For example, Article 18 of the LIG itself, in its last paragraph, provides that the payment received 
rule shall also apply to cases of "outlays by local co mpanies which result in profits of Argentine source for 
persons or entities abroad with which these companies are related". 
438 SSN Resolution No. 35.615/2011, (Exhibits PAN-36 / ARG-27). 
439 In the case of cross- border supply (mode 1). 
440 In the case of supply throug h commercial presence (mode 3). 
441 "Stock market intermediaries" me ans the persons indicated in Article 1 of the Rules of the National 
Securities Commission (CNV), and including "bargaining agents, liquidation and compensation agents, 
distribution and placement agents, and coll ective investment management agents". WT/DS453/R 
 
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  from non-cooperative countries. Argentina maintains this measure pursuant to Title XI, Section III, 
Article 5 of the Rules of the National Securities Commission (CNV).442 
7.257.  Title XI, Section III, Article 5 of the CNV's Rules allows Argentine stock market 
intermediaries to engage in transactions conducted or ordered by persons incorporated, domiciled 
or residing in non-cooperative countries in connection with the public offering of negotiable 
securities, forward contracts, futures or options of any nature, or other financial instruments or products provided that two requirements are met: (i) the persons incorporated, domiciled or 
residing in non-cooperative countries that give the order to the stock market intermediary must 
have the status of intermediaries registered with an entity under the control and supervision of a body fulfilling functions similar to those of the Ar gentine CNV; and (ii) the body in question must 
have signed a memorandum of understanding on cooperation and exchange of information with 
the Argentine CNV.
443 However, Argentine stock market intermediaries are not subject to these 
requirements when they engage in transactions conducted or ordered by persons from cooperative countries 
7.258.   In the light of the text of Title XI, Sect ion III, Article 5 of the CNV's Rules, we conclude 
that the treatment accorded to services and servic e suppliers of cooperative countries is different 
from that accorded to like services and service suppliers of non-cooperative countries. 
7. Whether Argentina accords diffe rent treatment under measure 7 
7.259.   As explained in section 2.3.8 above, measure 7 consists of the alleged imposition of 
additional requirements on branches of companies from non-cooperative countries for the purpose o f  r e g i s t r a t i o n  i n  t h e  P u b l i c  T r a d e  R e g i s t e r  o f  t h e  A u t o n o m o u s  C i t y  o f  B u e n o s  A i r e s .  A r g e n t i n a  
maintains this measure pursuant to Article 192 of IGJ Resolution No. 7/2005.
444 
7.260.  We note that one of the main points in dispute between the parties in relation to this 
measure concerns whether, as asserted by Panama, Article 192 of IGJ Resolution No. 7/2005 
imposes additional requirements on companies of non-cooperative countries or, on the contrary, 
as claimed by Argentina, the "additional requirements" of Article 192 are required of all companies, whether of cooperative or non-cooperative countries, in those cases in which the IGJ 
considers that the documents furnished do not provide evidence that the company is effectively 
engaged in economically significant business activities.
445 In this connection, Argentina contends 
that the assessment of the requirements under Article 188 responds to the need to check whether a foreign company (from a cooperative or non-cooperative country) is engaged in such 
activities.
446 
7.261.  Below we shall examine whether, as asserted by Argentina, it does not differentiate 
between foreign companies wishing to set up in Argentina and it applies both Article 188 and 
Article 192 of IGJ Resolution No. 7/2005 to all foreign companies, irrespective of whether they are 
from a cooperative or a non-cooperative country.447 
7.262.  We shall first focus on the title of the two provisions, before going into their wording. 
Article 188 is entitled "First registration. Requirements" and Article 192 is entitled "Companies 
from jurisdictions with low or no taxes or not cooperating in the fight against 'money laundering' and transnational crime". At first sight, we note  that Article 188 lays down some requirements 
concerning the first registration of companies, whereas Article 192 focuses on a specific category 
of foreign companies, namely, those "from jurisdictions with low or no taxes or not collaborating in 
the fight against 'money laundering' and transnational crime". 
7.263.  If we now look at the text of Article 188, we see that the requirements indicated in the title 
concern the "registration covered by Article 118, third paragraph, of Law No. 19.550". Article 118 
of Law No. 19.550, as we have already seen, concerns firms incorporated abroad. We thus note that the requirements of Article 188 concern the firs t registration of foreign firms, irrespective of 
                                               
442 CNV Rules, (Exhibits PAN-58 / ARG-50). 
443 See paras. 2.35-2.36 above. 
444 IGJ Resolution No. 7/2005, (Exhibits PAN-62 / ARG-33). 
445 Argentina's first written submission, paras. 608, 624, 630-631, 651 and 656. 
446 Argentina's first written submission, paras. 618 and 628. 
447 Argentina's first written submission, paras. 626 and 631. WT/DS453/R 
 
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  whether they are from cooperative or non-cooperative countries. This means that the exemption 
from the requirements set out of Article 188 according to which the IGJ may "where warranted, grant exemption from certain formalities when it is well-known and public knowledge that the company is effectively engaged in economically significant business activities abroad and that its 
management is also located there" applies to companies from both cooperative and 
non-cooperative countries. 
7.264.  We now examine Article 192 of IGJ Resoluti on No. 7/2005, a provision which, according to 
Argentina, applies to all foreign firms. First of a ll, as we have already noted, Argentina's position 
appears questionable to us in the light of the title of this provision, which only refers to "companies from jurisdictions with low or no taxes or not collaborating in the fight against 'money laundering' and transnational crime". We fail to see on what basis a provision bearing this title 
could apply to any type of company other than those mentioned in its title. 
7.265.  We note that Article 192 of IGJ Resolution No. 7/2005 requires the IGJ to consider 
compliance with a series of requirements "restrictively" when the type of company indicated in its 
title is being registered. These requirements are set out in section 3, subsections (b) and (c) of 
Article 188 of IGJ Resolution No. 7/2005, namely: do cuments proving (i) that it has one or more 
agencies, branches or representative offices operating outside the Republic and/or non-current 
(fixed) assets or operating rights in such assets belonging to third parties and/or holdings in other 
companies not subject to public offering and/or habitually conducts investment transactions on the stock markets or securities markets indicated in its corporate purpose (subsection (b)); and (ii) particulars of the persons who are partners at the time of the decision to request registration 
(subsection (c)).
448 As provided in Article 192 of IGJ Resolution No. 7/2005, this restrictive 
assessment entails the submission of additional documents. 
7.266.  In the light of the foregoing, we do not co nsider that, as asserted by Argentina, Article 192 
of IGJ Resolution No. 7/2005 applies to foreign firms of cooperative countries. As can be seen from 
the title and wording of Articles 188 and 192 of IGJ Resolution No. 7/2005, Article 188 applies to any foreign company, whereas Article 192 applies only to foreign companies "from jurisdictions 
with low or no taxes and not collaborating in the fight against 'money laundering' and 
transnational crime". 
7.267.  Consequently, we conclude that companies from non-cooperative countries receive 
different treatment as regards registration in the Public Trade Register of the Autonomous City of 
Buenos Aires compared to the treatment accorded to companies from cooperative countries, 
inasmuch as the Argentine law only provides for restrictive assessment of the requirements contained in Article 188.3(c) and 188.3(f) of IGJ Resolution No. 7/2005 in the case of companies 
from non-cooperative countries.
449 
8. Whether Argentina accords diffe rent treatment under measure 8  
7.268.  As explained in section 2.3.9 above, measur e 8 consists of imposing on service suppliers of 
non-cooperative countries the requirement to obtain  prior authorization from the BCRA in order to 
be able to repatriate their direct investments. Argentina maintains this measure pursuant to Communication "A" 4940, Section I, of the BCRA.
450 
7.269.  The first difference we note between the parties concerns the scope of the requirement on 
prior authorization from the BCRA. While Panama contends that this requirement applies only to 
service suppliers of non-cooperative countries, Argentina asserts that it also applies to service suppliers of cooperative countries if they do not meet certain conditions. 
7.270.  In the descriptive part of this Report  we indicated that Section I of Communication 
"A" 4940 establishes the prior authorization requir ement for repatriating investment "when the 
beneficiary abroad is a natural or legal person residing, incorporated or domiciled in" a 
non-cooperative country. This requirement is an exception to the rule of not requiring prior 
                                               
448 Article 188.3 of IGJ Resolution No. 7/2005, (Exhibits PAN-62 / ARG-33). 
449 We note that the restrictive a ssessment of the requirements ment ioned above could apply to foreign 
companies established, registered or incorporated in cooperative countries if these countries are not considered 
to be collaborating in the fight against money laundering and transnational crime. 
450 Communication "A" No. 4940, (Exhibits PAN-71 / ARG-31). WT/DS453/R 
 
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  authorization for such repatriation set out in point 1.13 of Communication "A" 4662, as amended 
by Communication "A" 4692. We also noted, however, that there are other instances of repatriation of investment which require prior authorization from the BCRA. These are the situations covered by point 4 of Communication "A" 5237, which provides that "transactions for 
the repatriation of direct investment which are subject to the established requirements but cannot 
be shown to be compliant therewith at the date of access to the local foreign exchange market must have prior authorization from the Central Bank". One of the established requirements is 
contained in point 1 of the same Communication.
451 Point 4 of Communication "A" 4662 lays down 
other requirements to be met by entities authoriz ed to deal in foreign exchange before they can 
engage in transactions exempt from prior authorization.452 
7.271.  Consequently, from a reading of points 1 and 4 of Communication "A" 5237 in conjunction 
with point 4 of Communication "A" 4662, it is clear that the requirement of prior authorization 
from the BCRA is not limited to repatriation of foreign direct investment in the non-financial private sector on the part of service suppliers of non-cooperative countries but may also apply to cases 
involving service suppliers of cooperative countries. 
7.272.  We note that when a natural or legal person residing, incorporated or domiciled in a 
non-cooperative country wishes to repatriate direct  investment of the type indicated in point 1.13 
of Communication "A" 4662, it will have to obtain prior authorization from the BCRA, irrespective 
of compliance with the relevant requirements in Argentine legislation. This is not the case for repatriation of direct investment by natural or legal persons residing, incorporated or domiciled in a cooperative country, which, in principle, do not have to obtain prior authorization, unless they do 
not comply with any of the requirements laid down in the law. 
7.273.  The Panel, therefore, finds that the treatm ent accorded to service suppliers of cooperative 
countries is different to that accorded to like service suppliers of non-cooperative countries. 
(ii) Whether the measures at issue do not accord treatment no less 
favourable to services and service supp liers of non-cooperative countries in 
comparison with the treatment acco rded to like services and service 
suppliers of cooperative countries 
7.274.  As mentioned above, once we have determined whether the treatment Argentina accords 
to services and service suppliers of non-cooperative countries is different from that accorded to like services and service suppliers of cooperative countries, we shall go on to examine whether this 
different treatment constitutes treatment no less favourable within the meaning of Article II:1 of 
the GATS. 
7.275.  We recall that the mere formal difference of treatment between relevant services and 
service suppliers is "neither necessary, nor sufficient" to prove the existence of less favourable 
treatment.
453 
                                               
451 The requirement laid down in point 1 of Communication "A" 5237 consists of "proof of the entry of 
funds through the local foreign exchange market for all new investment derived from new contributions or 
purchases of shares in local companies and real esta te, effected in foreign currency as of this date 
[28 October 2011] by the foreign investor". See Exhibit ARG-75. 
452 The following are the requirements establishe d in point 4 of Communication "A" No. 4662: 
(a) Verification of the purpose declared for access to the foreign exchange ma rket; (b) Possession of 
documents proving that the resident debtor has had ac cess to the foreign exchange market for the purpose 
and amount paid to the non-resident of the country (in cases of payment in the coun try, for imports, services, 
income and other current transfers from abroad and commercial and financial debts abroad); (c) Sworn 
declaration by the customer or his/he r representative in the country stating that there has been no previous 
transfer for the same transaction; (d) Assurance that  the funds received have not been used for other 
investment in the country from the date  they were paid in the country for the purpose declared until the date 
of access to the local foreign exchange  market; (e) Certificate of prior se ttlement of such payments on the 
foreign exchange market in cases where, as a result of sa le of the investment or payment of the credit, part or 
all of the payments have been made in foreign currency; (f) Possession (on the part of the authority authorized 
to conduct foreign exchange dealings) of all elements needed to certify the reasonableness and authenticity of 
the transaction and the documents required under fore ign exchange regulations; and (g) Verification of 
compliance with the other applicable foreign exchan ge regulations. See Exhibits PAN-67 / ARG-69. 
453 Appellate Body Report, EC – Seal Products , para. 5.101 (citing Appellate Body Report US – Clove 
Cigarettes , para. 177 (referring in turn to Appellate Body Reports, Korea – Various Measures on Beef , WT/DS453/R 
 
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  7.276.  We shall therefore examine whether the meas ures modify the conditions of competition to 
the detriment of services and service suppliers of non-cooperative countries. We recall that, for the purposes of this analysis, we have considered that , in this dispute, there is an additional element 
that must be taken into account in our analysis: the possibility for Argentina to access tax 
information on foreign suppliers. 
7.277.  Our analysis will therefore also examin e the effects on the conditions of competition 
caused by the design and operation of the measures at issue. 
1. Whether Argentina accords trea tment no less favourable under 
measure 1 
7.278.  As we saw when examining whether or not there is different treatment
454, measure 1 
consists of a legal presumption that payments made to banks or financial institutions located in 
non-cooperative countries as consideration for the granting of foreign credits or loans or the 
placement of funds from abroad represent a net ga in of 100% for the suppliers for the purpose of 
determining the tax base for gains tax.455 This presumption allows no evidence to the contrary. 
7.279.  Panama considers that this measure creates a tax disadvantage for service suppliers of 
non-cooperative countries inasmuch as the tax burden on them is heavier than that on like service suppliers of cooperative countries.
456 According to Panama, this distinction for purposes of 
establishing the tax base, all other conditions being equal, results in less favourable treatment of 
service suppliers from non-cooperative countries, whose tax base is higher as a result of the application of the measure. For Panama, the measure modifies the conditions of competition to the detriment of service suppliers from non-cooperative countries because it has a negative impact on 
their profitability.
457 
7.280.  Argentina considers that the treatment accorded to Panamanian services and service 
suppliers is not less favourable as Panama appears on the list of cooperative countries.458 
7.281.  We note that, in regard to the payment of an identical sum as consideration for the 
granting of credits or loans or the placement of funds from abroad, application of the measure at 
issue results in an increase in the tax base for gains tax if the payment goes to service suppliers of 
non-cooperative countries. 
7.282.  We therefore consider that, as a result of  measure 1, service suppliers of non-cooperative 
countries bear a heavier tax burden that has a negative impact on their profitability in the Argentine market and, consequently, modifies the conditions of competition between suppliers of 
cooperative countries and suppliers of non-cooper ative countries on the Argentine market, to the 
detriment of the latter. 
7.283.  We note, however, one other factor that cannot be ignored when analysing no less 
favourable treatment under Article II:1 of the GATS in the case before us and which directly 
affects the supply of services on the Argentine market, and may modify the conditions of competition on that market. This factor concerns the possibility for Argentina to have access to tax 
information on foreign suppliers providing services in Argentina. 
7.284.  In this dispute, Argentina contends th at the establishment of differential treatment 
between service suppliers of cooperative jurisdic tions and service suppliers of non-cooperative 
jurisdictions is the direct consequence of access or lack of access to tax information.
459 We note 
that the obligation to exchange tax information applies only to parties which have concluded an 
agreement on exchange of tax information or a convention on the avoidance of international 
                                                                                                                                               
para. 137) and Thailand – Cigarettes (Philippines) , para. 128 (referring in turn  to Appellate Body Report, EC – 
Asbestos , para. 100))). 
454 See para. 7.237 above. 
455 Argentina maintains this measure pursuant to Article 93(c) of the LIG, (Exhibits PAN-4 / ARG-42). 
456 Panama's first written submission, para. 4.37; and second written submission, para. 2.139. 
457 Panama's first written submission, para. 4.38; and second written submission, para. 2.134. 
458 Argentina's first written submission, paras. 165 and 166. 
459 Argentina's second written submission, para. 76.  See also responses to Panel questions Nos. 49 
and 71. WT/DS453/R 
 
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  double taxation with a broad exchange of info rmation clause and it has entered into force. 
According to Argentina, access to tax information is key in this dispute because measure 1, like the other measures challenged by Panama, is a defensive measure to combat risks to Argentina's fiscal and tax system arising from harmful tax competition generated by service suppliers from 
jurisdictions with which there is no exchange of information for tax transparency purposes.
460 
7.285.  We have already seen that Decree No. 589/2013, which we consider to be inherent in each 
and every one of the measures at issue because it  is the key piece of legislation defining their 
design and operation, establishes the conditions for a country to be considered cooperative, 
namely: (i) to have signed an agreement with Argentina on exchange of tax information or a convention on avoidance of international double  taxation with a broad information exchange 
clause, provided that there is effective exchange of information; or (ii) to have initiated with 
Argentina the negotiations necessary for concluding such an agreement and/or convention. In the 
latter case, the AFIP will be the body responsible for determining whether the necessary conditions for initiating negotiations have been met.
461 
7.286.  We note that, as regards the criterion for initiating the process of negotiating a double 
taxation convention or an information exchan ge agreement, there is no formal mechanism 
allowing effective exchange of information between Argentina and the country with which it is 
negotiating. Argentina, nonetheless, grants cooperative status to countries in the negotiating 
process with respect to which it has no access to tax information because no agreement or convention exists. Leaving aside the dispute between the parties as to whether Panama complied with this requirement and did, in fact, initiate negotiations
462, this would be the case of Panama, 
for example, which is considered by Argentina to be a cooperative country but has not signed any 
of the agreements provided for in Decree No. 589 /2013. This means that the jurisdictions with 
which Argentina is in the process of negotiating agreements on exchange of tax information should 
be considered cooperative, despite the fact that Argentina continues to have no access to tax 
information, the exchange of which is the raison d'être  of its defensive measures. 
7.287.  Argentina states that the reason why it grants cooperative country status to countries with 
which it is negotiating a double taxation convention or information exchange agreement is "to 
promote this type of cooperation" in view of "the tax authorities' expectation that they will be able 
to have access to tax information on the transactions conducted with natural or legal persons domiciled, established or located in cooperative countries".
463 
7.288.  We also note that countries which are in a similar situation as regards access to tax 
information by Argentina are treated differently. For example, according to Argentina, negotiations have begun on a double taxation convention or information exchange agreement with Panama and 
Hong Kong (China).
464 As no agreement has been signed with those two jurisdictions, there is, in 
principle, no exchange of tax information betw een them and Argentina. Panama, however, has 
cooperative country status, whereas Hong Kong (China) does not.465 
7.289.  Looking at the list of cooperative countries, we also see that countries in different 
situations as regards the exchange of tax information are treated in the same way by Argentina. Let us take the cases of Panama and Germany by wa y of example. Both belong to the category of 
cooperative countries. Argentina signed a double taxation agreement with Germany that has been 
                                               
460 Argentina's first written submission, paras. 1, 16 and 31. 
461 Article 1 of Decree No. 589/2013, (Exhibits PAN-3 / ARG-35). 
462 We recall that Panama contends that it never initiated negotiations with Argentina, whereas 
Argentina asserts that such negotiations were initiated in November 2013. See Argentina's first written submission, paras. 131 and 132; Panama's response to Pa nel question No. 7(a); and Argentina's response to 
Panel question No. 10(c). 
463 Argentina's response to Panel question No. 9(a). 
464 Argentina's first written submission, paras. 131 and 132; and responses to Panel questions 
Nos. 10(b)(i) and 10(b)(ii). Other countries with which Argentina has initiated negotiations since Decree No. 589/2013 entered into force and which do not appear on the current list of cooperative countries are Belarus, Cameroon, Côte d'Ivoire, Cy prus, Gabon and Gibraltar. See Argent ina's response to Panel question 
No. 10(b)(i), para. 5. 
465 Argentina claims that the reason why Hong Kong (China) is not on th e list of cooperative countries is 
because the list is updated at the beginning of each fiscal year. We note, however, that the list was not updated at the beginning of the 2015 fiscal year. See Arge ntina's response to Panel question No. 10(b)(ii). WT/DS453/R 
 
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  in force since 25 November 1979466, giving it access to tax information.467 In the case of Panama, 
however, Argentina has no access to tax information since it has not signed any agreement on exchange of tax information with Panama. 
7.290.  In the light of the examples we have just given, it is obvious that the way in which 
Argentina classifies countries as cooperative or non-cooperative is not consistent with the 
possibility for Argentina to have access to tax information. We believe that this lack of consistency is directly attributable to the design of Decree No. 589/2013, which establishes the mechanism for 
classifying the two categories of countries. The examples mentioned above show that: (i) 
Argentina treats countries with which it has signed tax information exchange agreements in the same way as countries with which it has not signed such agreements; and (ii) Argentina accords different treatment to countries with which it has initiated negotiations on signing such 
agreements. 
7.291.  To the above must be added the question  of the updating of the list of cooperative 
countries. The current list, as indicated in the descriptive part of this report, is the one published 
on the AFIP's website on 1 January 2014 pursuant to AFIP Resolution No. 3.576/2013.
468 This list 
has not been updated at the time of distribution of  this Report to the parties, despite Argentina's 
assertion that the list is updated at the beginning of each fiscal year.469 This system of annual 
updating may also cause distortion in the treatment accorded to certain countries compared to 
others in the same situation. This is the case, for example, for countries such as Belarus, Cameroon, Côte d'Ivoire, Cyprus, Gabon, Gibraltar and Hong Kong (China) which, despite allegedly 
being in the same situation as Panama, as they are negotiating a tax information exchange 
agreement with Argentina, are not considered to be cooperative jurisdictions because the 
negotiations were initiated after Decree No. 589/2013 had entered into force.
470 Panama, however, 
is still on the list of cooperative countries despite having denied that it initiated negotiations with 
Argentina on the signing of a tax information exchange agreement or an international double 
taxation convention with a broad information exchange clause.471 P a n a m a ' s  d e n i a l  t h a t  
negotiations have been initiated suggests that there has still not been any such exchange of 
information.472 
7.292.  In view of the foregoing, we consider th at the design of measure 1, pursuant to Decree 
No. 589/2013, establishes different treatment according to whether the services and service suppliers are from cooperative or non-cooperative countries. This difference in treatment is not 
based, as Argentina argues, on whether or not Argentina has access to tax information. This can 
be seen from the fact that countries that are in the process of negotiating an agreement on exchange of tax information have cooperative st atus even though the agreement has not been 
concluded and there is thus no formal mechanism for e xc hang ing  informati on. T o this  mus t b e 
added the operation of the list of cooperative countries drawn up by Argentina, which results in unequal treatment of jurisdictions in the process of negotiating an agreement, since some are on 
the list whilst others continue to await the updating of the list. 
7.293.  We therefore find that the design and operation of measure 1, pursuant to Decree 
No. 589/2013, create distortions which modify the conditions of competition to the detriment of 
                                               
466 Amending Protocol in force sinc e 30 June 2011. See Argentina's response to Panel question No. 13. 
467 On 3 November 2011, Germany signed the OECD Convention on Mutual Administrative Assistance in 
Tax Matters, to which Argentina is a pa rty, although it has not yet entered into force. See Argentina's response 
to Panel question No. 13. 
468 AFIP Resolution No. 3.576/2013, (Exhibits PAN-3 / ARG-37). 
469 Article 2 of Decree No. 589/2013 provides that th e AFIP shall update th e list of cooperative 
countries, without specifying the period icity for such updating. Argentina has explained that it is updated at the 
beginning of each fiscal year. This is in line with the provision in Article 3 of AFIP Resolution No. 3.576/2013, which refers to the "list published by [AFIP] in effect at the beginning of  each fiscal year", (Exhibits PAN-3 / 
ARG-37). See Argentina's responses to Panel question s No. 9(b), para. 14, and No. 10(b)(ii), and opening 
statement at the second meeting of the Panel, para. 41. At the second meeting of the Panel, Argentina stated 
that "in view of Panama's current position of not negotiating an agreement with Argentina, the AFIP is reviewing whether to maintain this country's [Panama's]  status as a cooperative co untry for tax transparency 
purposes. This review is part of the ongoing adjustment to include and remove countries from the list of 
cooperative countries in this year's update, in accordance with the criteria laid down in the legislation". See Argentina's opening statement at the second meeting of the Panel, paras. 42 and 43. 
470 Argentina's response to Panel question No. 10(b)(i), para. 5. 
471 Panama's response to Panel question No. 7(a). 
472 Panama's response to Panel question No. 7(a). WT/DS453/R 
 
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  services and service suppliers of non-cooperative countries and, thus, accord them less favourable 
treatment than that accorded to like services and service suppliers of cooperative countries. 
2. Whether Argentina accords trea tment no less favourable under 
measure 2 
7.294.  As we have already stated, measure 2 consists of the presumption of unjustified increase 
in wealth applicable to any entry of funds from non-cooperative countries received by an Argentine 
taxpayer.473 
7.295.  Panama contends that the very existence of this presumption of unjustified increase in 
wealth applicable to entries of funds from non-cooperative countries constitutes less favourable treatment for services and service suppliers of non-cooperative countries because it implies an additional requirement for Argentine taxpayers (t hat of having to rebut the presumption) that 
would not apply if the taxpayer had contracted services (which give rise to the entry of funds) 
from a service supplier of a cooperative country.
474 
7.296.  As in the case of the previous measure, Argentina argues that the treatment accorded to 
Panamanian services and service suppliers is not less favourable as Panama appears on the list of 
cooperative countries.475 
7.297.  The Panel notes that the unnumbered articl e added after Article 18 of the LPT determines 
(i) the type of funds covered by that provision; (ii) the nature of the legal presumption provided 
therein; and (iii) the treatment given to unjustified increases in wealth. In the first place, as regards the funds falling within the scope of th e unnumbered article added after Article 18 of the 
LPT, the Panel highlights the broad scope of the provision, inasmuch as it refers to entries of funds 
from non-cooperative countries "irrespective of their nature or purpose or the type of transaction 
involved". In other words, the rule applies to any transaction which generates an entry of funds from those countries. This means that the transmit tal of funds earned from the supply of a service 
to an Argentine taxpayer by a supplier from a non-cooperative country would fall within the scope 
of this provision.
476 Secondly, as regards the nature of the presumption established by this 
provision, the Panel points out that the presum ption may be rebutted if "the interested party 
conclusively proves that [the entries of funds] originated from activities actually carried out by the 
taxpayer or by a third party in those countries or  from placements of funds duly declared funds". 
In that case, the increase in wealth will be co nsidered justified. Lastly, with regard to the 
treatment accorded to increases in wealth deem ed to be unjustified, th e unnumbered article added 
after Article 18 of the LPT provides that such in creases plus 10% "under the heading of income 
disposed of or consumed as non-deductible expenditure" shall be considered net gains for the purposes of determining gains tax and "where app licable [represent] the basis for estimating the 
taxable transactions omitted from the respective  marketing year in terms of value added and 
internal taxes". Classifying an entry of funds as an unjustified increase in wealth automatically involves an increase in the tax base for gains tax. 
7.298.  We agree with Panama that this legal presumption involves an additional requirement for 
taxpayers who contract for services with suppliers of non-cooperative countries and who seek to justify the entry of funds obtained through such services. We note that the additional requirement of having to rebut the legal presumption stipulated in the unnumbered article added after 
Article 18 of the LPT may deter Argentine taxpayers from entering into contracts with suppliers of 
non-cooperative countries, since they know that such contracts automatically trigger the legal presumption of unjustified increase in wealth. We consider that this disincentive entails a 
competitive advantage for service suppliers of cooperative countries, whose services are not 
affected by this legal presumption. We also consider that, quite apart from the difficulty implicit in 
                                               
473 See section 2.3.3 above. 
474 Panama's first written submission, para. 4.126; and second written submission, para. 2.281. 
475 Argentina's first written submission, paras. 165 and 166. 
476 According to Panama, such entries of funds could,  for example, originate from: (i) loans granted by 
suppliers of financial services established in a no n-cooperative country for ta x transparency purposes; 
(ii) compensation for dama ge under an insurance, reinsurance or retrocession contract taken out by an 
Argentine resident with an insurance company situated  in a non-cooperative count ry for tax transparency 
purposes; or (iii) compensation for damage under a mari time or air transport insurance contract taken out by 
an Argentine resident with an insu rance company situated in a non-coop erative country for tax transparency 
purposes. See Panama's first written submission, paras. 4.57 and 4.58. WT/DS453/R 
 
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  rebutting the presumption and the greater or lesse r success of such a rebuttal by the Argentine 
taxpayer, the mere existence of this presumptio n places service suppliers from non-cooperative 
countries in a less favourable position than like service suppliers of cooperative countries, as the Argentine taxpayer is asked to take an additional step (to prove conclusively "that [the entries of 
funds] originated from activities actually carried out by the taxpayer or by a third party in those 
countries or from placements of duly declared funds"). 
7.299.  We believe that our position is supported in the GATT 1994 case law which, even though it 
cannot be considered directly applicable within the GATS framework, can provide valuable 
guidance for our analysis. For example, in Thailand – Cigarettes (Philippines) , in which the 
Appellate Body stated that "the mere fact that the additional administrative requirements are imposed on imported cigarettes, and not on lik e domestic cigarettes, provides, in itself, a 
significant indication that the conditions of competition are adversely modified to the detriment of 
imported cigarettes".
477 We find that, in the case of measure 2, there is an "additional 
requirement" that affects only certain services provided by service suppliers of non-cooperative 
countries. 
7.300.  On a preliminary basis, therefore, we conclude that there is less favourable treatment for 
service suppliers of non-cooperative countries, and this imposes on Argentine taxpayers the 
additional burden of rebutting the presumption. Nevertheless, as in the case of measure 1, our 
analysis must take account of the regulatory framework resulting from the signature or non-signature of tax information exchange agreements, that is, the possibility for Argentina to access tax information on foreign service suppliers providing services in Argentina through one of 
the four modes of supply provided for in the GATS. 
7.301.  As in the case of measure 1, however, the design and operation of measure 2, pursuant to 
Decree No. 589/2013, create distortions with regard to (i) granting cooperative status to 
jurisdictions which have not signed an agreemen t and which, therefore, are not subject to the 
exchange of tax information with Argentina; and (ii) the updating of the list of cooperative countries. Indeed, the design of measure 2 establishes differential treatment according to whether 
the services and service suppliers are from cooperative or non-cooperative countries. This 
differential treatment, pursuant to Decree No. 589/2013, is not based, as Argentina argues, on whether or not Argentina has access to tax information. This can be seen from the fact that countries which are in the process of negotiating a tax information exchange agreement have 
cooperative status even though the agreement has not been signed and there is thus no formal 
mechanism for exchanging information. To this must be added the operation of the list of cooperative countries drawn up by Argentina, which results in unequal treatment of jurisdictions in 
the process of negotiating an agreement, since some are on the list while others continue to await 
the updating of the list.
478 
7.302.  We therefore find that the design and operation of measure 2, pursuant to Decree 
No. 589/2013, create distortions which modify the conditions of competition to the detriment of 
services and service suppliers of non-cooperative countries and, thus, accord them less favourable treatment than that accorded to like services and service suppliers of cooperative countries. 
3. Whether Argentina accords trea tment no less favourable under 
measure 3 
7.303.  Measure 3 contested by Panama concerns the application of the transfer pricing regime in 
valuing transactions between Argentine taxpayers and persons in non-cooperative countries.
479 
7.304.  Panama argues that the use of the transfer pricing regime "implies administrative 
requirements, economic charges and tax contingencies"480 which alter the conditions of 
competition to the detriment of services and service suppliers of non-cooperative countries.481 
                                               
477 Appellate Body Report, Thailand – Cigarettes (Philippines) , para. 138. 
478 See paras. 7.284-7.291 above. 
479 See section 2.3.4 above. 
480 Panama's first written submission, para. 4.247. See second written submission, paras. 2.425 and 
2.426. 
481 Panama's first written submission, para. 4.248; and second written submission, para. 2.428. WT/DS453/R 
 
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  7.305.  Argentina, as was the case for the previous measures, argues that the treatment accorded 
to Panamanian services and service suppliers is not less favourable, since Panama is included in the list of cooperative countries.
482 
7.306.  When an Argentine taxpayer conducts a transaction with a person in a cooperative 
country, the valuation of the transaction is based on the value agreed between the parties, unless 
the parties are related, in which case the transfer pricing regime applies.483 On the other hand, 
transactions between Argentine taxpayers and persons domiciled, established or located in 
non-cooperative countries are not considered to be "in line with normal arm's-length market 
practices or prices".484 In such cases, Argentine law requires that the transfer pricing regime apply 
as if it were a transaction between related parties, irrespective of whether the relationship actually exists. Consequently, transactions between Argentine taxpayers and service suppliers of 
non-cooperative countries are automatically valued using the transfer pricing regime.
485 
7.307.  We thus note that the Argentine taxpayer has no option but to follow this regime when 
valuing transactions with service suppliers of non-cooperative countries. This is specified in 
Article 15 of the LIG, which stipulates that, where stable institutions domiciled or located in 
Argentina or certain companies and trust funds conduct transactions "with natural or legal persons domiciled, established or located in countries with low or no taxes …, [such transactions] shall not 
be considered to be in line with normal arm's-length market practices or prices". It should also be 
noted that both Panama and Argentina consider that the transfer price valuation regime is a more burdensome method of valuation for the taxpayer as it "requires more work" than other methods.
486 
7.308.  Consequently, the fact that this valuation regime involves higher costs for Argentine 
taxpayers enables us to conclude on a preliminary basis that this measure alters the conditions of competition to the detriment of service suppliers of non-cooperative countries as it deters 
Argentine taxpayers from entering into contracts with them. 
7.309.  As was the case for measures 1 and 2, however, the design and operation of measure 3, 
pursuant to Decree No. 589/2013, create distortions with regard to (i) granting cooperative status 
to jurisdictions which have not signed an agreem ent and which, therefore, are not subject to the 
exchange of tax information with Argentina; and (ii) the updating of the list of cooperative countries. Indeed, the design of measure 3 establishes differential treatment according to whether the services and service suppliers are from cooperative or non-cooperative countries. This 
differential treatment, pursuant to Decree No. 589/2013, is not based, as Argentina argues, on 
whether or not Argentina has access to tax information. This can be seen from the fact that countries which are in the process of negotiating a tax information exchange agreement have 
cooperative status even though the agreement has not been signed and there is thus no formal 
mechanism for exchanging information. To this must be added the operation of the list of cooperative countries drawn up by Argentina, which results in unequal treatment of jurisdictions in 
the process of negotiating an agreement, as some are on the list, while others continue to await 
the updating of the list.
487 
7.310.  We therefore find that the design and operation of measure 3, pursuant to Decree 
No. 589/2013, create distortions which modify the conditions of competition to the detriment of 
services and service suppliers of non-cooperative countries and, thus, accord them less favourable 
treatment than that accorded to like services and service suppliers of cooperative countries. 
                                               
482 Argentina's first written submission, paras. 165 and 166 
483 See section 2.4.2.3 above. 
484 Article 15.2 of the LIG, (Exhibits PAN-4 / ARG-42). 
485 A similar rule is determined in Article 8 of the LIG in connection with "earnings from the export of 
goods produced, manufactured, treated or purchase d in the country". See exhibits PAN-4 / ARG-42. 
486 Argentina's first written submission, para. 104.  See also Panama's first written submission, 
paras. 4.218 and 4.238. 
487 See paras. 7.284-7.291 above. WT/DS453/R 
 
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  4. Whether Argentina accords trea tment no less favourable under 
measure 4 
7.311.  Pursuant to measure 4, Argentine companies which enter into a contract with a service 
supplier of a non-cooperative country may only deduct expenditure incurred by the transaction 
from their tax base for gains tax when the expenditure is carried out, i.e., when the payment 
arising from the transaction is executed.488 
7.312.  Panama argues that the application of this rule means that Argentine taxpayers that 
contract with service suppliers of non-cooperative countries bear a heavier tax burden because 
their tax base will be higher as a result of not being able to deduct expenditure at the time at which the contractual obligation is generated. 
7.313.  Argentina argues that the treatment accorded to Panamanian services and service 
suppliers is not less favourable as Panama is included in the list of cooperative countries.
489 
7.314.  First of all, the Panel observes that th e measure at issue does not prevent deduction of 
expenditure by the Argentine taxpayer. In the ca se of both the accrual rule and the payment 
received rule, the expenses incurred by the Argentine taxpayer may be deducted from the latter's 
tax base. In our view, what changes from one rule to the other is the time at which the expenses 
are allocated, that is, whether the expenses are allocated to the fiscal year in which the obligation 
accrues or the fiscal year in which the outlay or payment occurs, and the accrual and payment of 
the obligation may or may not take place in the same fiscal year. Consequently, we agree with Argentina that the rule applied to transactions with service suppliers of non-cooperative countries does not prevent deduction of expenditure by Argentine companies.
490 
7.315.  In view of the foregoing, the Panel's an alysis will focus on determining whether this 
possible time difference in allocating expenses constitutes less favourable treatment for service suppliers of non-cooperative countries compared to the treatment arising from the rule applicable 
to transactions with service suppliers of cooperative countries. 
7.316.  In this connection, we note that the amount to be allocated in the fiscal year of accrual or 
the fiscal year of payment will be the same, give n that the expenditure effected by the company 
when contracting services from suppliers in non-cooperative countries in order to obtain revenue 
does not vary. We consider, however, that the real value of this amount diminishes with the passage of time, since money depreciates over  time through the effect of inflation. 
7.317.  We also agree with Panama that the application of this measure may create an additional 
burden for companies as it may oblige them to make adjustments in their accounts to reflect the 
two rules for allocating expenses. We have alre ady referred in this connection to the GATT 1994 
case law and, in particular, to the Thailand – Cigarettes (Philippines)  dispute, in which the 
Appellate Body considered that the existence of additional requirements for certain products and 
not others may constitute a "significant indication" that the conditions of competition have been modified to the detriment of the group of prod ucts affected by the additional requirement.
491 
7.318.  We consider that the effects of the measur e at issue in terms of the reduced value of the 
expenses deducted and the possible additional cost s linked to modifying accounting procedures as 
a result of applying two cost allocation rules (one for transactions with service suppliers of cooperative countries – the accrual rule – and the other for transactions with service suppliers of 
non-cooperative countries – the payment received rule) may serve to deter Argentine companies 
from contracting services with suppliers in non-cooperative countries. This would lead us to conclude, on a preliminary basis, that the treatmen t accorded to services and service suppliers of 
non-cooperative countries is less favourable than that accorded to like services and service 
suppliers of cooperative countries. 
7.319.  As in the case of measures 1, 2 and 3, however, the design and operation of measure 4, 
pursuant to Decree No. 589/2013, create distortions with regard to (i) granting cooperative status 
                                               
488 See section 2.3.5 above. 
489 Argentina's first written submission, paras. 165 and 166. 
490 Argentina's first written submission, Explanatory Annex No. 1, para. 127. 
491 See para. 7.299 above. WT/DS453/R 
 
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  to jurisdictions which have not signed an agreem ent and which, therefore, are not subject to the 
exchange of tax information with Argentina; and (ii) the updating of the list of cooperative countries. Indeed, the design of measure 4 establishes differential treatment according to whether the services and service suppliers are from cooperative or non-cooperative countries. This 
differential treatment, pursuant to Decree No. 589/2013 is not based, as Argentina argues, on 
whether or not Argentina has access to tax information. This can be seen from the fact that countries which are in the process of negotiating a tax information exchange agreement have 
cooperative status even though the agreement has not been signed and there is thus no formal 
mechanism for exchanging information. To this must be added the operation of the list of cooperative countries drawn up by Argentina, which results in unequal treatment of jurisdictions in the process of negotiating an agreement, since some  are included in the list while others continue 
to await the updating of the list.
492 
7.320.  We therefore find that the design and operation of measure 4, pursuant to Decree 
No. 589/2013, create distortions which modify the conditions of competition to the detriment of 
services and service suppliers of non-cooperative countries and, thus, accord them less favourable 
treatment than that accorded to like services and service suppliers of cooperative countries. 
5. Whether Argentina accords trea tment no less favourable under 
measure 5 
7.321.  As regards the claims under Article II:1 of the GATS, measure 5 consists in the 
enforcement of compliance with certain requ irements by branches of companies from 
non-cooperative countries which supply their services through commercial presence (mode 3) and 
by companies in non-cooperative countries which supply reinsurance services through cross-border 
supply (mode 1) in order to be able to gain access to the Argentine reinsurance services market. 
7.322.  Points 18 and 20(f) of Annex I to SSN Resolution No. 35.615/2011, following the 
March 2014 amendment, provide that foreign supplie rs of reinsurance services may be authorized 
to accept reinsurance from their country of origin (point 20(f)) or from a branch in Argentina (point 18) provided that they comply with tw o requirements which, according to Argentina
493, are 
cumulative: 
(1) Prove that they have been incorporated and registered in countries "cooperating 
for tax transparency purposes" in accordance with the provisions of Decree No. 589/2013 and supplementary regulations (in the case of branches, such proof 
relates to the parent company)
494; 
(2) Prove that they have been incorporated and registered in countries that 
collaborate in the global fight against the money laundering and terrorist financing 
offences in accordance with the criteria defined in the public documents issued by the 
FATF (in the case of branches, such proof relates to the parent company).495 
7.323.  Measure 5 itself provides that, if suppliers  of services via mode 1 or mode 3 do not prove 
that they have been incorporated and registered in a country cooperating for tax transparency 
purposes, they must show that they are subject to  the control and supervision of a body (i) which 
fulfils functions similar to those of the SSN, and (ii) with which a memorandum of understanding on cooperation and exchange of information has been signed.
496 Measure 5 also provides that, if 
suppliers of services via mode 1 or mode 3 do not prove that they have been incorporated and 
registered in a country collaborating in the global fight against money laundering and terrorist financing offences in accordance with the crit eria defined by the FATF, the assessment of the 
request for authorization shall be subject to enhanced due diligence, proportionate to the risks, 
and the counter-measures indicated in Recommendation 19 of the FATF and the Interpretive Note thereto may be applied.
497 
                                               
492 See paras. 7.284-7.291 above. 
493 Argentina's response to Panel question No. 63. 
494 Points 18(a) and 20(f)(I) of Annex I to SSN Resolution No. 35.615/2011, (Exhibit ARG-27). 
495 Points 18(b) and 20(f)(II) of Annex I to SSN Resolution No. 35.615/2011, (Exhibit ARG-27). 
496 Points 18(a) and 20(f)(I) of Annex I to SSN Resolution No. 35.615/2011, (Exhibit ARG-27). 
497 Points 18(b) and 20(f)(II) of Annex I to SSN Resolution No. 35.615/2011, (Exhibit ARG-27). WT/DS453/R 
 
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  7.324.  Panama, which only challenges the requirements on cooperation for tax transparency 
purposes498, argues that compliance with these conditions laid down in paragraphs (a) and (I) of 
points 18 and 20(f) of SSN Resolution No. 35.615/ 2011 is the only way available to suppliers of 
reinsurance services from non-cooperative countries to gain access to the Argentine market for 
such services through cross-border supply (mode 1) or commercial presence (mode 3).499 In its 
opinion, the imposition of these conditions causes uncertainty for suppliers of reinsurance services from non-cooperative countries, which face a change in the conditions of competition in the 
Argentine market.
500 
7.325.  Argentina, as was the case for the other measures at issue, argues that the treatment 
accorded to Panamanian services and service suppliers is not less favourable, since Panama is included in the list of cooperating countries.
501 
7.326.  According to the provisions of points 18 and 20(f) of Annex I to SSN Resolution 
No. 35.615/2011 with regard to cooperation for tax transparency purposes, we note that the following are the situations which may be faced by foreign suppliers of reinsurance services 
seeking to enter the Argentine reinsurance market: 
a. Suppliers of reinsurance services from cooperative countries In this case, no requirements would apply to access to the Argentine reinsurance 
services market through cross-border supply (mode 1) or commercial presence 
(mode 3). 
b. Suppliers of reinsurance services from non-cooperative countries In this case, access to the Argentine reinsurance market through mode 1 and mode 3 
for these suppliers is conditional upon compliance with the two requirements 
mentioned above: (i)  that the supplier (or its parent company) is subject to the control and supervision of a body which fulfils functions similar to those of the SSN, 
and (ii) that the body in question has signed a memorandum of understanding on 
cooperation and exchange of information with the SSN. 
7.327.  On the basis of this classification, we note  that the measure does not require that suppliers 
from cooperative countries should be subject to th e control and supervision of a body which fulfils 
functions similar to those of the SSN or that th e body in question has signed a memorandum of 
understanding on cooperation and exchange of information in order to have access to the Argentine reinsurance market. This does not mean , however, that they are not subject to other 
conditions derived from their cooperative (or non-cooperative) status for the purposes of the fight 
against money laundering and financing of terrori sm in the FATF framework, a question which 
Panama does not address in its submissions.
502 
7.328.  As a preliminary matter, we consider that the imposition of market access conditions on 
suppliers of non-cooperative countries modifies th e conditions of competition to the detriment of 
those suppliers in comparison with like service suppliers of cooperative countries, which may have 
access to the Argentine reinsurance services market via mode 1 and mode 3 without having to 
comply with these two requirements. 
7.329.  As in the case of measures 1, 2, 3 and 4,  however, the design and operation of measure 5, 
pursuant to Decree No. 589/2013, create distortions with regard to (i) granting cooperative status 
to jurisdictions which have not signed an agreem ent and which, therefore, are not subject to the 
                                               
498 Panama's first written submission, paras. 4.341 and 4.342; and second written submission, 
paras. 2.610 and 2.611. 
499 Panama's second written submission, para. 2.610. 
500 Panama's second written submission, para. 2.612. 
501 Argentina's first written submission, paras. 165 and 166. 
502 As we have indicated, the asse ssment of requests for authori zation of suppliers from countries 
cooperating for tax transparency purposes but not in the fight against money laundering and financing of 
terrorism shall be subject to "enhanc ed due diligence, proportionate to the risks", and the counter-measures 
indicated in Recommendation 19 of the FATF and th e Interpretive Note thereto may be applied. See 
para. 7.323 above. WT/DS453/R 
 
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  exchange of tax information with Argentina; and (ii) the updating of the list of cooperative 
countries. Indeed, the design of measure 5 establishes differential treatment according to whether the services and service suppliers are from cooperative or non-cooperative countries. This differential treatment, pursuant to Decree No. 589/2013 is not based, as Argentina argues, on 
whether or not Argentina has access to tax information. This can be seen from the fact that 
countries which are in the process of negotiating a tax information exchange agreement have cooperative status even though the agreement has not been signed and, there is thus no formal 
mechanism for exchanging information. To this must be added the operation of the list of 
cooperative countries drawn up by Argentina, which results in unequal treatment of jurisdictions in the process of negotiating an agreement, since some  are included in the list while others continue 
to await the updating of the list.
503 
7.330.  We therefore find that the design and operation of measure 5, pursuant to Decree 
No. 589/2013, create distortions which modify the conditions of competition to the detriment of 
services and service suppliers of non-cooperative countries and, thus, accord them less favourable 
treatment than that accorded to like services and service suppliers of cooperative countries. 
6. Whether Argentina accords trea tment no less favourable under 
measure 6 
7.331.  As we have already mentioned, measure 6 consists of imposing requirements on Argentine 
stock market intermediaries for them to be able to engage in transactions conducted or ordered by persons from non-cooperative countries.
504 
7.332.  Panama argues that the imposition of these market access conditions deters Argentine 
consumers from contracting services (such as investment portfolio management services) provided 
by suppliers subject to these conditions, i.e., service suppliers of non-cooperative countries, as they do not have access to all financial centres, including the Argentine market. According to 
Panama, this means that the Argentine customer incurs additional costs because it has to contract 
with another investment portfolio manager who does have access to the Argentine market through Argentine stock market intermediaries.
505 
7.333.  Argentina, as was the case for the other measures at issue, argues that the treatment 
accorded to Panamanian services and service suppliers is not less favourable, since Panama is included in the list of cooperative countries.
506 In any event, Argentina adds that the measure does 
not constitute an absolute prohibition, as asserted by Panama, but allows transactions conducted 
or ordered by persons incorporated, domiciled or residing in non-cooperative countries to proceed 
provided that they meet the two conditions specif ied in Article 5 of the Consolidated Text of the 
CNV.507 
7.334.  We wish first of all to address the question of the services affected by this measure. 
Panama claims that, although the measure at issue, as contained in Title XI, Section III, Article 5 of the Rules of the CNV, does not explicitly refer to portfolio management services, the measure 
affects the cross-border supply of such services as it imposes obligations on authorized 
intermediaries "whose service is essential for portfolio managers". In Panama's view, "the stock market intermediation service is an essential aux iliary service for the effective delivery of portfolio 
management services".
508 The measure at issue therefore affects the supply "of portfolio 
management services to Argentine customers through mode 1".509 Argentina did not object to this 
statement by Panama. In fact, Argentina identified portfolio management services in its first written submission when summarizing the services and modes of supply which Argentina considers 
to be affected by the meas ures challenged by Panama.
510 
                                               
503 See paras. 7.284-7.291 above. 
504 See section 2.3.7 above. 
505 Panama's second written submission, para. 2.706. 
506 Argentina's first written submission, paras. 165 and 166. 
507 Argentina's first written submission, para. 491. 
508 Panama's first written submission, para. 4.387. 
509 Panama's first written submission, para. 4.394. 
510 Argentina's first written submission, para. 142. WT/DS453/R 
 
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  7.335.  We note that both parties agree that suppliers of portfolio management services from 
non-cooperative countries only have access to the Argentine capital market if they comply with the two conditions specified in Title XI, Section III, Article 5 of the CNV's Rules. We also note that such access to the Argentine capital market is necessarily effected through stock market 
intermediaries
511, which are the ones that proceed with transactions in relation to the public 
offering of negotiable securities, forward contracts, futures or options of any kind and other financial instruments or products. We see no need to determine whether stock market 
intermediation services really are auxiliary services for portfolio management services, as asserted 
by Panama, in order to conclude that the measure at issue has an impact on the cross-border supply of portfolio management services to Argentine consumers by service suppliers of 
non-cooperative countries. We therefore consider that the services at issue under measure 6 are 
portfolio management services. 
7.336.  Having addressed the question of the serv ice affected by the measure at issue, we shall 
focus on whether the treatment accorded by measur e 6 is less favourable to service suppliers of 
non-cooperative countries. In this connection, we have noted that imposition of conditions on 
access to the Argentine capital market through stock market intermediaries only affects service suppliers of non-cooperative countries. We consider that the mere imposition of these 
requirements modifies the conditions of competition to the detriment of service suppliers from 
non-cooperative countries as, in the eyes of the consumer, they do not have the same ease of access to the Argentine capital market. 
7.337.  Like Panama, we also believe that the im position of these conditions on Argentine stock 
market intermediaries may discourage the contra cting of services provided by suppliers of 
non-cooperative countries, since the latter do not have access to the Argentine market (whereas service suppliers of cooperative countries do have such access) and thus may make it necessary to 
contract the services of some other supplier which does have access to the Argentine market, 
generating additional costs for Argentine consumers. 
7.338.  This leads us to the preliminary conclusi on that the treatment accorded to services and 
service suppliers of non-cooperative countries is less favourable than that accorded to like services 
and service suppliers of cooperative countries. 
7.339.  As in the case of measures 1, 2, 3, 4 and 5, however, the design and operation of 
measure 6, pursuant to Decree No. 589/2013, create distortions with regard to (i) granting 
cooperative status to jurisdictions which have not signed an agreement and which, therefore, are 
not subject to the exchange of tax information with  Argentina; and (ii) the updating of the list of 
cooperative countries. Indeed, the design of measure 6 establishes differential treatment 
according to whether the services and service su ppliers are from cooperative or non-cooperative 
countries. This differential treatment, pursuant to Decree No. 589/2013 is not based, as Argentina argues, on whether or not Argentina has access to tax information. This can be seen from the fact 
that countries which are in the process of negotiating a tax information exchange agreement have 
cooperative status even though the agreement has not been signed and there is thus no formal 
mechanism for exchanging information. To this must be added the operation of the list of cooperative countries drawn up by Argentina, which results in unequal treatment of jurisdictions in 
the process of negotiating an agreement, since some are included in the list while continue to 
await the updating of the list.
512 
7.340.  We therefore find that the design and operation of measure 6, pursuant to Decree 
No. 589/2013, create distortions which modify the conditions of competition to the detriment of 
services and service suppliers of non-cooperative countries and, thus, accord them less favourable treatment than that accorded to like services and service suppliers of cooperative countries. 
                                               
511 We recall that "stock market intermediaries" me ans the persons indicated in Article 1 of the CNV's 
Rules, including "bargaining agents, liquidation and co mpensation agents, distribu tion and placement agents, 
and collective investment management agents". See footnote 53 above. 
512 See paras. 7.284-7.291 above. WT/DS453/R 
 
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  7. Whether Argentina accords trea tment no less favourable under 
measure 7 
7.341.  Measure 7, as we explained above, relates to the registration requirements applicable to 
companies from non-cooperative countries wishing to register in the Autonomous City of Buenos 
Aires.513 
7.342.  Panama contends that the imposition of additional requirements makes the business model 
consisting of simultaneous establishment in several countries more problematic because at the 
outset it deters service suppliers of non-coop erative countries from setting up in Argentina.514 
7.343.  Argentina, once again, argues that the treatment accorded to Panamanian services and 
service suppliers is not less favourable as Panama is included in the list of cooperative countries.515 
In response to Panama's argument that the IGJ exercises discretionary authority in assessing 
compliance with the requirements, Argentina states that this discretionary authority is inherent in 
the exercise of its administrative functions.516 
7.344.  We have already seen that Argentina imposes different treatment on companies from 
non-cooperative countries, since it applies to them Article 192 of IGJ Resolution No. 7/2005, 
which, as indicated in its title, is not applicable to companies from cooperative countries. 
7.345.  We understand that the IGJ may evaluate more or less restrictively compliance with the 
requirements stipulated in Article 188 on the part of a company from a cooperative country in the 
light of the particular circumstances of each case, being able to request additional documents similar to those provided for in Article 192 if considered necessary. We do not consider, however, that our analysis of the measure at issue requires us to examine the more or less strict 
assessment by the IGJ of compliance with the requirements laid down in Article 188. 
7.346.  Nor do we consider that the fact that the exemption from furnishing the documents 
provided for in Article 188 may apply to non-cooperative countries alters the fact that the legal 
mandate given to the IGJ in Article 192 to "appraise restrictively compliance with the requirements 
of Article 188, section 3, subsections (b) and (c)" refers exclusively to companies from countries not cooperating for the purposes of tax transparency and the fight against money laundering and 
transnational crime. 
7.347.  We do not consider, as claimed by Panama, that the requirement to prove that the 
company is effectively engaged in economically significant business activities applies only to companies from non-cooperative countries.
517 In this connection, we note that the exemption 
provided for in Article 188, which applies to any foreign company, may apply "in cases where it is 
well-known and public knowledge that the company is effectively engaged in economically significant business activities abroad and that its management is also located there" This concords 
with Argentina's statement that the assessment of whether the documents submitted by the 
foreign company in accordance with Article 188 are sufficient is conducted in relation to two aspects: whether the company is effectively engaged in economically significant business activities 
and its place of central management.
518 We therefore consider that, in assessing compliance with 
the requirements of Article 188, the IGJ also seeks to determine whether the company is effectively engaged in economically significant business activities, as asserted by Argentina.
519 
7.348.  Even though the details that the document ation requested is intended to ascertain are the 
same in both Article 192 and subsections (b) and (c) of Article 188.3, we cannot ignore the IGJ's 
mandate under Article 192 to assess compliance with the said requirements restrictively in the case of companies from countries not cooperatin g for the purposes of tax transparency and the 
fight against money laundering and transnational crime. 
                                               
513 See section 2.3.8 above. 
514 Panama's second written submission, paras. 2.742 and 2.743. 
515 Argentina's first written submission, paras. 165 and 166. 
516 Argentina's first written submission, para. 620. 
517 Panama's first written submission, paras. 4.425 and 4.431; and second written submission, 
para. 2.738. 
518 Argentina's first written submission, para. 627. 
519 Argentina's first written submission, para. 630. WT/DS453/R 
 
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  7.349.  In our view, the fact that the IGJ assesses compliance with these requirements 
restrictively modifies the conditions of competition to the detriment of companies from non-cooperative countries compared to those from cooperative countries as it may create disincentives to the registration of companies fr om non-cooperative countries, which face exposure 
to closer scrutiny on the part of the IGJ, and it may mean that a larger number of documents are 
required. The fact that most companies register successfully
520 does not eliminate the disincentives 
caused by the treatment stipulated in Article 192 of IGJ Resolution No. 7/2005. 
7.350.  Having regard to the foregoing, we reac h the preliminary conclusion that the restrictive 
assessment by the IGJ of certain requirements n eeded for the registration of companies from 
non-cooperative countries modifies the conditions of competition to the detriment of the latter, placing them in a less favourable position than like service suppliers from cooperative countries. 
7.351.  As was the case for measures 1, 2, 3, 4, 5 and 6, however, the design and operation of 
measure 7, pursuant to Decree No. 589/2013, create distortions with regard to (i) granting cooperative status to jurisdictions which have not signed an agreement and which, therefore, are 
not subject to the exchange of tax information with  Argentina; and (ii) the updating of the list of 
cooperative countries. Indeed, the design of measure 7 establishes differential treatment according to whether the services and service su ppliers are from cooperative or non-cooperative 
countries. This differential treatment, pursuant to Decree No. 589/2013 is not based, as Argentina 
argues, on whether or not Argentina has access to tax information. This can be seen from the fact that countries which are in the process of negotiating a tax information exchange agreement have cooperative status even though the agreement ha s not been signed and there is therefore no 
formal mechanism for exchanging information. To this must be added the operation of the list of 
cooperative countries drawn up by Argentina, which results in unequal treatment of jurisdictions in the process of negotiating an agreement, since some  are included in the list while others continue 
to await the updating of the list.
521 
7.352.  We therefore find that the design and operation of measure 7, pursuant to Decree 
No. 589/2013, create distortions which modify the conditions of competition to the detriment of 
services and service suppliers of non-cooperative countries and, thus, accord them less favourable 
treatment than that accorded to like services and service suppliers of cooperative countries. 
8. Whether Argentina accords trea tment no less favourable under 
measure 8 
7.353.  As we have already seen, measure 8 consists of the requirement imposed on natural or 
legal persons from non-cooperative countries to obtain prior authorization from the BCRA in order to repatriate direct investments from Argentina.
522 
7.354.  Panama argues that the requirement to ob tain prior authorization from the BCRA to allow 
service suppliers to repatriate their direct investments, which "only applies" to service suppliers of non-cooperative countries
523 creates uncertainty, deterring service suppliers of non-cooperative 
countries from setting up in Argentina.524 Panama considers that this requirement imposes an 
additional administrative burden and, in turn, leads to a risk that the authorization will be refused or given too late.
525 In this connection, Panama highlights the discretionary authority surrounding 
approval of the application by the BCRA and the waiting times which a supplier has to face before 
repatriation takes place.526 
7.355.  Argentina, for its part, argues that the treatment accorded to Panamanian services and 
service suppliers is not less favourable, since Panama is included in the list of cooperative 
countries.527 Argentina adds that it does not consider that the repatriation of investment is covered 
                                               
520 Argentina's first written submission, para. 648. 
521 See paras. 7.284-7.291 above. 
522 See section 2.3.9 above. 
523 Panama's first written submission, para. 4.438. See also first written submission, paras. 4.449, 
4.450 and 4.453; and second written submission, para. 2.793. 
524 Panama's second written submission, paras. 2.794 and 2.795. 
525 Panama's second written submission, para. 2.795. 
526 Panama's second written submission, para. 2.793. 
527 Argentina's first written submission, paras. 165 and 166. WT/DS453/R 
 
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  by the GATS and that it does not affect the su pply of any service inasmuch as it is a "prior 
verification requirement" for access to the Argentine foreign exchange market.528 Nevertheless, 
Argentina contends that the requirement of prior authorization from the BCRA in order to repatriate foreign direct investment in the non-financial private sector applies to suppliers of both 
cooperative and non-cooperative countries whenever certain conditions are not met.
529 Argentina 
adds that the applications for prior authorization submitted so far have not been rejected530 and 
the time-frame for granting authorization is a reas onable one in accordance with the transparency 
requirements of the GATS, the complexity of the transactions and the requirements of the 
competent authorities.531 Lastly, Argentina denies that repatriation of investment is subject to the 
discretionary authority of the BCRA as it will be  authorized when the prescribed conditions are 
met.532 
7.356.  First of all, we note that, pursuant to Section I of Communication "A" 4940, the prior 
authorization requirement automatically applies to the repatriation of direct investment in the non-financial sector when the beneficiary of the repatriation is a natural or legal person from a 
non-cooperative country, irrespective of whether the other requirements laid down in Argentina's 
legislation for this type of transaction have been met. This automaticity appears to us at the outset to place persons from non-cooperative countries in a less favourable position than those from 
cooperative countries, as the rule in point 1. 13 of Communication "A" 4940, on exemption from 
this requirement can in no event be applied to them. 
7.357.  To the above must be added the fact that , as stated by Panama, the prior authorization 
application in itself implies an additional administrative burden to be borne in any event by 
persons from non-cooperative countries wishing to repatriate their direct investment in the 
non-financial sector. We recognize that any application not only entails a certain cost in terms of the time required
533 but also a risk that it may ultimately be rejected, which may generate 
disincentive to establishment for suppliers from non-cooperative countries. 
7.358.  We understand that any business decision  involving investment abroad is based on a 
survey of the market receiving the investment, which covers not only the terms of entry for the 
investment but also its treatment post-establishment, including its withdrawal from the country. 
This includes consideration of not only the formalities for applying for authorization, but also the risks which rejection of the application entails and the time that elapses between the application and the final decision by the BCRA. The fact that no application has so far been rejected, as 
asserted by Argentina, may give foreign investors an indication of the BCRA's customary practice, 
but does not prevent us from considering, in the light of the foregoing, that the measure challenged by Panama may have the potential effect of discouraging certain investments by 
service suppliers of non-cooperative countries, which find themselves automatically made subject 
to a requirement that does not apply automatically to like service suppliers of cooperative countries. 
7.359.  We therefore consider, on a preliminary ba sis, that the requirement of prior authorization 
from the BCRA imposed in respect of repatriation of direct investment in the non-financial sector when the beneficiary is a person from a non-cooperative country modifies the conditions of competition to the detriment of the latter, placin g them in a less favourable position than like 
service suppliers from cooperative countries. 
7.360.  As was the case for measures 1, 2, 3, 4, 5, 6 and 7, however, the design and operation of 
measure 8, pursuant to Decree No. 589/2013, create distortions with regard to (i) granting 
cooperative status to jurisdictions which have not signed an agreement and which, therefore, are 
not subject to the exchange of tax information with  Argentina; and (ii) the updating of the list of 
cooperative countries. Indeed, the design of measure 8 establishes differential treatment 
according to whether the services and service su ppliers are from cooperative or non-cooperative 
countries. This differential treatment, pursuant to  Decree No. 589/2013, is not based, as Argentina 
                                               
528 Argentina's first written submission, para. 124 and Explanatory Annex No. 2, paras. 27-29 and 41. 
529 Argentina's first written submission, Expl anatory Annex No. 2, paras. 38 and 42. 
530 Argentina's first written submission, para. 124 and Explanatory Annex No. 2, paras. 39 and 41. 
531 Argentina's first written submission , Explanatory Annex No. 2, para. 41. 
532 Argentina's first written submission , Explanatory Annex No. 2, para. 43. 
533 This cost in temporal terms covers the time need ed to prepare the application for prior authorization 
and, in particular, the time that elap ses between submission of the application and its acceptance or rejection. WT/DS453/R 
 
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  argues, on whether or not Argentina has access to tax information. This can be seen from the fact 
that countries which are in the process of negotiating a tax information exchange agreement have cooperative status even through the agreement has not been signed and there is thus no formal 
mechanism for exchanging information. To this must be added the operation of the list of 
cooperative countries drawn up by Argentina, which results in unequal treatment of jurisdictions in 
the process of negotiating an agreement, since some  are included in the list while others continue 
to await the updating of the list.
534 
7.361.  We therefore find that the design and operation of measure 8, pursuant to Decree 
No. 589/2013, create distortions which modify the conditions of competition to the detriment of 
services and service suppliers of non-cooperative countries and, thus, accord them less favourable treatment than that accorded to like services and service suppliers of cooperative countries. 
(iii) Conclusion 
7.362.  In the light of the foregoing, we find that Panama has demonstrated that the 
eight measures at issue do not accord "treatment no less favourable" to services and service 
suppliers of non-cooperative countries compared to the treatment accorded to like services and 
service suppliers of cooperative countries. 
(c)  Whether the treatment no less favo urable is accorded immediately and 
unconditionally to like services and service suppliers  
7.363.  Having concluded that the eight measures at issue do not accord treatment no less 
favourable to like services and service suppliers of cooperative and non-cooperative countries, we do not believe it necessary to pursue our analysis by addressing the question of whether 
non-existent "treatment no less favourable" is accorded immediately and unconditionally to like 
services and service suppliers. 
7.3.2.2.4  Conclusion 
7.364.  Firstly, we have concluded that Panama has demonstrated that the eight measures at 
issue in this dispute are covered by the GATS. 
7.365.  Next, we have concluded that Panama has demonstrated that, in the context of the eight 
measures at issue, services and service suppliers of cooperative and non-cooperative countries are 
like by reason of origin. In this respect, we also conclude that Argentina has not persuaded us that the exchange of tax information is an "other factor" that is reflected in the competitive relationship between services and service suppliers of cooperative and non-cooperative countries. 
7.366.  We have also concluded that Panama has demonstrated that the eight measures at issue 
do not accord "treatment no less favourable" to services and service suppliers of non-cooperative countries in comparison with the treatment accorded to like services and service suppliers of 
cooperative countries, which is why we have not considered it necessary to pursue our analysis by 
addressing the question of whether non-existent "treatment no less favourable" is accorded immediately and unconditionally to like services and service suppliers. 
7.367.  In the light of the foregoing, the Panel finds that measure 1 (withholding tax on payments 
of interest or remuneration), measure 2 (presu mption of unjustified increase in wealth), 
measure 3 (transaction valuation based on transfer  prices), measure 4 (payment received rule for 
the allocation of expenditure), measure 5 (requirements relating to reinsurance services), 
measure 6 (requirements for access to the Argentine capital market), measure 7 (requirements for 
the registration of branches) and measure 8 (for eign exchange authorization requirement) are 
inconsistent with Article II:1 of the GATS because they do not immediately and unconditionally 
accord to services and service suppliers from non-cooperative countries treatment no less 
favourable than that accorded to like services and service suppliers from cooperative countries. 
                                               
534 See paras. 7.284-7.291 above. WT/DS453/R 
 
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  7.3.3  Panama's claims under Articles XVI:1 and XVI:2 of the GATS 
7.3.3.1  Main arguments of the parties 7.3.3.1.1  Panama 7.368.  Panama claims that measure 5 is inconsistent with Articles XVI:1 and XVI:2(a) of the GATS 
because Argentina restricts the number of foreign service suppliers and accords them treatment 
less favourable than that specified in its Schedule of Commitments.
535 Because of the changes 
made to this measure, which are explained in sections 2.3.6 and 7.1.3 above, Panama has 
indicated that it withdraws its claims under Articl es XVI:1 and XVI:2(a) of the GATS in respect of 
the supply of reinsurance services by suppliers from non-cooperative countries via mode 3 (point 18 of Annex I to SSN Resolution No. 35.615/2011) and mode 1 (point 20(f) of Annex I to SSN Resolution No. 35.615/2011). Panama has also em phasized that it maintains its claims "under 
Article XVI of the GATS in relation to point 19 of Annex I to SSN Resolution 35.615/2011".
536 In 
this section we include a summary of all Panama's arguments in relation to its claims under Articles XVI:1 and XVI:2 of the GATS. 
7.369.  In Panama's opinion, Argentina undertook commitments on market access under modes 1 
(cross-border supply) and 3 (commercial presence) in  relation to the reinsurance and retrocession 
sector.
537 As regards the cross-border supply mode (mode 1), Panama claims that, by inscribing 
"None" in the market access column under mode 1, Argentina made a full commitment for this 
mode.538 Concerning supply through commercial presence (mode 3), Panama states that the 
limitation entered ("Authorization of the establishment of new entities is suspended") concerns Argentina's capacity to authorize the establishment of new entities. Panama claims that the 
ordinary meaning of this entry only covers temporary suspension of authorizations for the 
establishment of new entities in Argentina for the purpose of providing reinsurance services, a 
suspension that was in force on 15 April 1994, the date on which the Schedule was adopted. Given 
that SSN Resolution No. 13.828/1977, which was in force on 15 April 1994, was repealed in 1998 
by SSN Resolution No. 25.804/1998, Panama consider s that the limitation in Argentina's Schedule 
ceased to have effect from the moment the granti ng of authorizations for the establishment of new 
entities was reinstated, i.e. from 1 October 1998 onwards.
539 Accordingly, Panama concludes that 
the total ban imposed by Argentina on the supply of reinsurance services through commercial presence on the part of service suppliers from no n-cooperative countries – pursuant to point 18 of 
Annex I to SSN Resolution No. 35.615/2011 – is inconsistent with Argentina's commitments in this 
sector and mode of supply because it corresponds to a zero quota, falling within the scope of 
Article XVI:2(a) of the GATS.
540 
7.370.  With regard to mode 1, Panama points out that, pursuant to point 20(f) of Annex I to SSN 
Resolution No. 35.615/2011, service suppliers of non-cooperative countries are prohibited from 
supplying reinsurance services in the cross-border mode. According to Panama, this prohibition, for reasons of nationality, on supplying a service for which a specific commitment has been made 
is equivalent to a zero quota falling within  the scope of Article XVI:2(a) of the GATS.
541 
7.371.  Panama also indicates that, although suppliers from cooperative countries are not subject 
to this ban on the cross-border supply of re insurance services, they are subject to certain 
limitations. More specifically, Panama explains that foreign suppliers of reinsurance services from 
cooperative countries operating solely from their head office may only provide their services to 
consumers located in the Argentine market in two situations: (i) pursuant to point 19 of Annex I to SSN Resolution No. 35.615/2011, "when the magnitude or particular characteristics of the ceded 
risks make it impossible for [the] reinsurance operations to be covered on the Argentine 
                                               
535 Panama's second written submission, para. 3.1.e(ii). 
536 See Panama's response to Panel question No. 60. 
537 The Panel recalls that, in section 7.1.4 above, it re ached the conclusion that retrocession services are 
not included in measure 5 contested by Panama. We will therefore refer only to "reinsurance services" in the 
remainder of this section. 
538 Panama's first written submission, paras. 4.367 and 4.368 (citing Panel Report, US – Gambling, 
para. 6.279). 
539 Panama's first written submission, paras. 4.369-4.374. 
540 Panama's first written submission, paras. 4.380 and 4.381 (citing Appellate Body Report, US – 
Gambling , para. 237). 
541 Panama's first written submission, para. 4.376. WT/DS453/R 
 
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  reinsurance market", and (ii) pursuant to Article 4 of SSN Resolution No. 35.794/2011, in cases 
where the individual risks exceed US$50,000,0 00 and "for that portion which exceeds the 
aforementioned amount". According to Panama, this measure amounts to a "limitation on the number of service suppliers … in the form of … th e requirements of an economic needs test ", 
within the meaning of Article XVI:2(a) of the GATS.
542 
7.372.  Panama contends that these measures are inconsistent with Article XVI:1 of the GATS as 
well because they accord suppliers from non-cooperative countries treatment less favourable than 
that provided in Argentina's Schedule of Commitments.543 
7.373.  In its second written submission, Panama notes that Argentina amended SSN Resolution 
No. 35.615/2011 by means of SSN Resolution No. 38.284/2014, on the same day that Panama presented its first written submission, namely, 25 March 2014. This SSN Resolution 
No. 38.284/2014 amends two points in SSN Resolution No. 35.615/2011 on which Panama had 
submitted claims, namely, points 18 and 20(f) of Annex I to the Resolution, and maintains differential treatment for reinsurance service suppliers according to their origin, both for mode 1 
and for mode 3. Panama argues that, given that  it had identified SSN Resolution No. 35.615/2011 
in its panel request as the instrument whereby Argentina maintained its measures on reinsurance services inconsistent with the GATS and had indicated that "the scope of [this] request … covers … 
any possible amendments, extensions or additions where applicable"
544, Argentina's amendment 
forms part of this Panel's terms of reference.545 
7.374.  Panama claims that point 19 of Annex I to SSN Resolution No. 35.615/2011 and Article 4 
of SSN Resolution No. 35.794/2011 are still in force and observes that Argentina itself admits that 
it does not allow full access to its reinsurance market, but only "partial" access. Panama asserts 
that Argentina's legislation does not allow the cross-border supply of reinsurance services unless there is an economic need therefor, which cons titutes a limitation "on the number of service 
suppliers … in the form of … the requirements of an economic needs test", within the meaning of 
Article XVI:2(a) of the GATS. Panama claims that the WTO Secretariat Note on economic needs tests, to which the Appellate Body has referred on occasion, gives as an example of limitation by 
means of an economic needs test measures that allow insurance takers "to seek insurance cover 
from foreign-based suppliers to the extent that coverage is not available domestically". In Panama's opinion, this example almost identically reflects what is provided in point 19 of Annex I to SSN Resolution No. 35.615/2011. Panama argues that the Secretariat Note indicates that the 
quantitative nature of measures in the form of economic needs tests means that these are 
measures "based on criteria the fulfilment of which is beyond the control of the affected service supplier". According to Panama, by allowing the cross-border supply of reinsurance services solely 
for that portion of the individual risks exce eding US$50 million, Article 4 of SSN Resolution 
No. 35.794/2011 establishes a criterion the fulfilment of which is clearly "beyond the control" of the foreign reinsurer.
546 
7.375.  Panama claims that Argentina took advantage of Panel question No. 76 in order to set out 
for the first time its response to Panama's claim relating to point 19 of Annex I to SSN Resolution No. 35.615/2011. Panama considers that Argentina's response clearly exceeds the scope of the Panel's question. Panama stresses that Argentina had not previously mentioned, for example, the 
economic needs tests on which Panama developed detailed arguments in its two written 
submissions. According to Panama, Argentina's response cannot be accepted because it would run counter to what has been stated by the Appellate Body regarding the division of panel proceedings 
                                               
542 Panama's first written submission, paras. 4.376-4.379 (referring to point 19 of Annex I to SSN 
Resolution No. 35.615/2011), (Exhibits PAN-36 / ARG-27); Article 4 of SSN Resolution No. 35.794/2011, (Exhibits PAN-40 / ARG-48); and the 1993 Scheduling Guidelines, which include as an example of a limitation on the number of service suppliers a "[l]icense for a new restaurant based on an economic needs test". See 
"Scheduling of Initial Commitments in Trade in  Services: Explanatory Note" (1993 Guidelines), 
MTN.GNS/W/164 of 3 September 1993, (Exhibits PAN-46 / ARG-79), para. 6(a), point 1). 
543 Panama's first written submission, paras. 4.376 and 4.379; and second written submission, 
para. 2.631. 
544 Panama's second written submission, para. 2.576 (referring to its request for the establishment of a 
panel, p. 7). 
545 Panama's second written submission, paras. 2.575-2.583. 
546 Panama's second written submission, paras. 2.628-2 .630 (referring to the Note by the Secretariat, 
Economic Needs Tests , S/CSS/W/118 of 30 November 2001, (Exhib it PAN-47); and Appellate Body Report, US 
– Gambling , footnote 269). WT/DS453/R 
 
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  into phases and the purpose of rule 8 of this Pa nel's Working Procedures. Panama contends that it 
would affect its right of defence inasmuch as within the seven-day period it did not have a proper opportunity for weighing up, rebuttal and defence of its position. Panama insists that it was not able to discuss these arguments with Argentina and the Panel at any meeting, in accordance with 
the principles of due process, procedural immedi acy and oral presentation. Panama claims that 
accepting these belated arguments of Argentina would also affect the rights of third parties, which have not been able to examine or comment on Argentina's position in relation to Panama's claim 
under Article XVI of the GATS. Panama contends that, in the light of Article 11 of the DSU, the 
Panel should take due precautions to prevent eith er of the parties from taking advantage of the 
opportunity afforded by the Panel to clarify arguments in order to present its case for the first time. In Panama's view, Argentina has not proved that there are any intervening facts or grounds 
justifying the presentation of arguments and new evidence at this stage of the proceedings.
547 
7.3.3.1.2  Argentina 7.376.  In its first written submission, Argentina cl aims that Panama's description of the Argentine 
measure does not correspond to the true situation because Argentina's regulatory framework for 
reinsurance has been modified.
548 
7.377.  As regards the supply of reinsurance services through commercial presence (mode 3), 
Argentina claims that point 18 of Annex I to SSN Resolution No. 35.615/2011, as amended by SSN 
Resolution No. 38.284/2014, does not prohibit service suppliers of non-cooperative countries from providing reinsurance services in Argentina through commercial presence, but allows them to do so provided that they are subject to the regulatory  supervision of a body similar to the SSN, with 
which there is exchange of information.
549 
7.378.  According to Argentina, to this must be added the fact that the limitation recorded under 
mode 3 in the reinsurance services sector is still in force as Argentina has not amended its 
Schedule of Commitments in accordance with Article XXI of the GATS. Argentina argues that, 
because of this limitation, authorization to establish new entities has been suspended, which means that the establishment of new entities will only be possible insofar as the SSN evaluates the 
merits of exemption from suspension in each particular case. Argentina does not consider that, as 
claimed by Panama, the term "is suspended" can be read in such a way as to suggest that the suspension of authorization to establish new reinsurers in Argentina is limited temporarily. Argentina considers that, irrespective of any amendment to its domestic legislation, the limitation 
recorded under mode 3 remains in force, thus gi ving Argentina the right to suspend authorization 
for the establishment of new reinsurers.
550 
7.379.  With reference to the cross-border supply of reinsurance services (mode 1), Argentina 
claims that, pursuant to point 20(f) of Annex I to SSN Resolution No. 35.615/2011, as amended 
by SSN Resolution No. 38.284/2014, service supp liers of non-cooperative countries are not 
prohibited from supplying cross-border reinsurance services. Argentina explains that the new 
wording of point 20(f), pursuant to SSN Resolution No. 38.284/2014, provides that entities located 
in non-cooperative jurisdictions may be authorized to supply cross-border reinsurance or retrocession services in Argentina provided that it is certified that they are subject to the regulatory supervision of an entity similar to the SSN, with which there is exchange of 
information.
551 Furthermore, Argentina argues that it is also not the case that point 19 of Annex I 
to SSN Resolution No. 35.615/2011 prohibits the cross-border supply of reinsurance services from central offices (mode 1), but makes it subject to certain conditions. Argentina explains in particular 
that point 19 of Annex I to SSN Resolution No. 35.615/2011 (elaborated by Article 4 of SSN 
Resolution No. 35.794/2011) provides for the participation of foreign firms in the supply of reinsurance services through mode 1 partially and for the amount in excess of what is considered 
to be a threshold for certain types of insured ri sk, normally defined as "major risks". Argentina 
justifies this partial limitation on the grounds of strengthening the domestic reinsurance market 
                                               
547 Panama's comments on Argentina' s response to Panel question No. 76 (citing Appellate Body Report, 
Argentina – Textil es and Apparel , para. 79). 
548 Argentina's first written submission, para. 407. 
549 Argentina's first written submission, para. 431. 
550 Argentina's first written submission, paras. 476-479; and second written submission, paras. 56-58. 
551 Argentina's first written submission, paras. 435 and 436; and second written submission, paras. 54 
and 55. WT/DS453/R 
 
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  and increasing control so as to avoid fraudulent practices.552 Argentina claims that the large 
number of foreign reinsurance firms currently providing reinsurance and retrocession services in Argentina corroborates the absence of any "limitations on the number of service suppliers" within the meaning of Article XVI:2(a) of the GATS.
553 
7.380.  Moreover, Argentina points out that the retrocession regime is governed by SSN Resolution 
No. 35.794/2011, which was not challenged by Panama in this dispute. According to Argentina, not only are retrocession services not limited by any regulatory provision but, in practice, are mostly 
supplied by foreign firms.
554 
7.381.  At the second substantive meeting of the parties with the Panel, Argentina claimed that 
the measure contested is not inconsistent with Articles XVI:1 and XVI:2(a) of the GATS because it is not covered by those obligations. According to Argentina, Article XVI:2(a) refers exclusively to 
limitations on the number of service "suppliers". The measure challenged by Panama, however, is 
not aimed at limiting the number of reinsurance service "suppliers" but at regulating reinsurance "operations". Argentina contends that, if a measur e does not limit the number of service suppliers 
per se , it falls outside the scope of Article XVI:2(a) of the GATS. Argentina claims that, in the 
unlikely event that the Panel were to consider that measure 5 relates to service "suppliers", Argentina has already explained that it is a qualitative measure and thus also falls outside the 
scope of Article XVI:2(a) of the GATS, which covers measures of a quantitative nature.
555 
7.3.3.2  Assessment by the Panel 7.3.3.2.1  Introduction 7.382.  The issue before the Panel is whether measure 5 is inconsistent with Articles XVI:1 and 
XVI:2(a) of the GATS because, as claimed by Panama, it limits the number of foreign service 
suppliers by requiring an economic needs test and, consequently, accords them treatment less 
favourable than that specified in Argentina's Schedule of Commitments.
556 Argentina, for its part, 
responds that measure 5 does not apply to service "suppliers" and is therefore not covered by 
Article XVI:2(a) of the GATS. It contends that, in  the event that the Panel were to consider that 
the measure is covered by Article XVI:2(a), Argentina considers that it is a qualitative measure.557 
7.383.  As explained in section 2.3.6 above, me asure 5 has been the subject of elaboration and 
amendments occurring before and after the establis hment of this Panel. We recall our decision to 
rule on measure 5 as elaborated by SSN Reso lution No. 35.794/2011 and in accordance with the 
amendment introduced by SSN Resolution No. 38.284/2014.558 
7.384.  The changes to measure 5 led Panama to reduce the scope of its claims under 
Articles XVI:1 and XVI:2(a) of the GATS.559 In particular, in view of the amendment of points 18 
and 20(f) of Annex I to SSN Resolution No. 35.615/2011 by SSN Resolution No. 38.284/2014 and 
the resulting disappearance of the absolute prohibition initially provided for by those points, 
Panama confirmed to the Panel that it was withdrawing its claims under Articles XVI:1 and XVI:2(a) of the GATS with regard to the supply of reinsurance services through modes 1 and 3 by 
suppliers from non-cooperative countries.
560 Panama pointed out, however, that the economic 
                                               
552 Argentina's first written submission, paras. 456-458. 
553 Argentina's second written submission, para. 55. 
554 Argentina's first written submission, paras. 443 and 449. 
555 Argentina's opening statement at the second meeting of the Panel, para. 21. 
556 Panama's second written submission, para. 3.1.e(ii) 
557 See footnote 555 above. 
558 See section 7.1.3 above. 
559 In its first written submission, Panama put forward claims under Articles XVI:1 and XVI:2(a) of the 
GATS in relation to points 18, 19 (developed by Article 4 of SSN Resolution No. 35.794/2011) and 20(f) of SSN Resolution No. 35.615/2011. Points 18 and 20(f) established prohibitions on the supply of reinsurance services 
through mode 3 and mode 1, respectively. Point 19, developed by Articl e 4 of SSN Resolution 
No. 35.794/2011, limits the supply of reinsurance services through mode 1 to situations in which the individual risks exceed US$50 million, but only for the portion that exceeds this amount. See Panama's first written submission, section 4.5.3. 
560 Panama confirmed that it maintains the claims under Article II:1 of the GATS in relation to points 18 
and 20(f) of Annex I to SSN Resolution No. 35.615/2011. The Panel examined these claims in section 7.3.2.2 
above. See Panama's second written submission, para. 2.587. WT/DS453/R 
 
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  needs test requirement, which applied to all foreign suppliers pursuant to point 19 of Annex I to 
SSN Resolution No. 35.615/2011 (as elaborated by  Article 4 of SSN Resolution No. 35.794/2011) 
had not been amended and Panama therefore main tained its claims under Articles XVI:1 and 
XVI:2(a) of the GATS. In this connection, Panama asserts that Argentina limits cross-border access 
(mode 1) to the Argentine reinsurance market to situations in which the individual risks exceed 
US$50 million, and only for the portion that exceeds this amount.561 
7.385.  In the light of the foregoing, the Panel wi ll confine its analysis solely to Panama's claims 
under Articles XVI:1 and XVI:2(a) of the GATS with respect to point 19 of Annex I to SSN 
Resolution No. 35.615/2011, as developed by Article 4 of SSN Resolution No. 35.794/2011. Consequently, when we allude to measure 5 in this section on Panama's claims under Articles XVI:1 and XVI:2(a), we shall be referring  only to point 19 of Annex I to SSN Resolution 
No. 35.615/2011, as developed by Article 4 of SSN Resolution No. 35.794/2011. 
7.386.  We shall begin by examining the wording of Articles XVI:1 and XVI:2(a) of the GATS. 
7.3.3.2.2  The relevant legal provisions 
7.387.  Article XVI of the GATS, entitled "Market Access", provides in relevant part: 
1. With respect to market access through the modes of supply identified in 
Article I, each Member shall accord services and service suppliers of any other 
Member treatment no less favourable than that provided for under the terms, 
limitations and conditions agreed and specified in its Schedule.
8 
2. In sectors where market-access commitments are undertaken, the measures which a Member shall not maintain or adopt either on the basis of a regional 
subdivision or on the basis of its entire territory, unless otherwise specified in its 
Schedule, are defined as: 
(a) limitations on the number of service su ppliers whether in the form of numerical 
quotas, monopolies, exclusive service suppliers or the requirements of an economic 
needs test; 
 _______________ 
8 If a Member undertakes a market-access commitme nt in relation to the supply of a service 
through the mode of supply referred to in subpara graph 2(a) of Article I and if the cross-border 
movement of capital is an essential part of the service itself, that Member is thereby committed t o  a l l o w  s u c h  m o v e m e n t  o f  c a p i t a l .  I f  a  M e mber undertakes a market-access commitment in 
relation to the supply of a service through the mo de of supply referred to in subparagraph 2(c) of 
Article I, it is thereby committed to allow related transfers of capital into its territory.
 
7.388.  In US – Gambling , the Appellate Body explained that Article XVI of the GATS "sets out 
specific obligations for Members that apply insofar as a Member has undertaken 'specific market 
access commitments' in its Schedule".562 The Appellate Body also clarified the function of the 
paragraphs of this provision cited by Panama: 
The first paragraph of Article XVI obliges Members to accord services and service 
suppliers of other Members "no less favourable  treatment than that provided for under 
the terms, limitations and conditions agreed and specified in its Schedule." The second paragraph of Article XVI defines, in six sub-paragraphs, measures that a Member, 
having undertaken a specific commitment, is not to adopt or maintain, "unless 
otherwise specified in its Schedule".
563 
7.389.  Panama's claims under Articles XVI:1 and XVI:2(a) raise the question of the relationship 
between the two paragraphs of Article XVI with a view to deciding the order the Panel should 
follow in its analysis. For example, in China – Publications and Audiovisual Products , the panel 
                                               
561 Panama's response to Panel question No. 60. 
562 Appellate Body Report, US – Gambling , para. 214. 
563 Appellate Body Report, US – Gambling , para. 214. WT/DS453/R 
 
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  decided to begin by examining whether the respondent's Schedule contained a relevant specific 
commitment in accordance with the specific subparagraph of Article XVI:2 concerned, before examining the measure's consistency with Article XVI:1 of the GATS.
564 The panel's reasoning was 
as follows: 
Paragraph 1 of Article XVI sets out the general principle that a Member must accord to 
services and service suppliers of other Members treatment no less favourable than that specified under the "terms, limitations and conditions" contained in its schedule. 
Paragraph 2 is more specific. It defines, in six sub-paragraphs, the measures that a 
Member, having inscribed a specific sectoral commitment, must not adopt or maintain "unless otherwise specified in its Schedule". … Under Article XVI, a Member undertakes a minimum standard of treatment, and is thus free to maintain a market 
access regime less restrictive than set out in its schedule, as confirmed in paragraph 1 
which refers to a standard of "no less favourable" treatment. … 
The wording of Article XVI indicates that we must next examine the precise terms of 
China's Schedule to determine whether, with respect to the services at issue, there is 
a market access commitment and, if so, what are the "terms, limitations and conditions" entered with respect to those commitments.
565 
7.390.  In China – Electronic Payment Services , the panel followed the same approach.566 We see 
no reason to depart from the approach adopted by previous panels and will, therefore, commence 
our analysis with Panama's claim under Article XVI:2(a) of the GATS.  
7.3.3.2.3  The question of whether measure 5 is inconsistent with Article XVI:2(a) of 
the GATS 
7.3.3.2.3.1  The legal standard und er Article XVI:2(a) of the GATS 
7.391.  In US – Gambling , the Appellate Body defined the legal standard to be followed under 
Article XVI:2 of the GATS. In examining Article XVI: 2, in particular its subparagraphs (a) and (c), 
the Appellate Body explained: 
This text suggests that Antigua was required to make its prima facie case by first 
alleging that the United States had undertaken a market access commitment in its 
GATS Schedule; and, secondly, by identify ing, with supporting evidence, how the 
challenged laws constitute impermissible "limitations" falling within Article XVI:2(a) or XVI:2(c).
567 
7.392.  Applying this reasoning to the present dispute, in order to establish a prima facie case of  
violation of Article XVI:2(a) of the GATS, Panama w ill be required (i) first, to prove that Argentina 
undertook relevant market access commitments in its Schedule annexed to the GATS; and (ii) 
second, to specify, with supporting evidence, how measure 5 constitutes an "impermissible 
limitation" within the meaning of  Article XVI:2(a) of the GATS. 
7.393.  We turn to examine separately whether Panama has complied with these two 
requirements. 
(a) First requirement: Whether Argentin a undertook specific commitments under 
mode 1 in relation to the "reinsurance services" subsector  
7.394.  We start by recalling that it is for Panama to prove that Argentina undertook market 
access commitments in relation to reinsurance services. In this connection, we note that Panama 
                                               
564 Panel Report, China – Publications and Audiovisual Products , para. 7.1353. 
565 Panel Report, China – Publications and Audiovisual Products , paras. 7.1353 and 7.1354. 
566 See Panel Report, China – Electronic Payment Services , para. 7.511. 
567 Appellate Body Report, US – Gambling , para. 143. Subsequently, the panels in China – Publications 
and Audiovisual Products and China – Electronic Payment Services followed the same approach. See Panel 
Reports, China – Publications and Audiovisual Products, para. 7.1354 and China – Electronic Payment Services, 
para. 7.511. WT/DS453/R 
 
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  has identified the commitments undertaken by Argentina in the sectors and modes of supply set 
out below568: 
Sector or subsector  Limitations on market access  Limitations on national treatment  
(c) Reinsurance and 
retrocession services 
(CPC 81299*)  (1) None (2) None (3) Authorization of the establishment 
of new entities is suspended 
(4) Unbound, except as indicated in the 
horizontal section  (1) None 
(2) None (3) None 
(4) Unbound, except as indicated in the 
horizontal section 
 
(emphasis added) 
7.395.  According to Article XX:3 of the GATS, Members' Schedules of Specific Commitments are 
an integral part of the GATS and their meaning th erefore has to be determined in accordance with 
the rules of interpretation of the Vienna Convention.569 
7.396.  As we see in the extract from its Schedu le of Commitments reproduced above, Argentina 
inscribed "None" in the "Limitations on market access" column with regard to mode 1 (cross-border supply). 
7.397.  Panama claims that, having inscribed "None"  in this column, Argent ina must maintain "full 
market access" within the meaning of the GATS, i.e., it must not apply any of the six limitations and measures set out in Article XVI:2, including subparagraph (a), which is relevant for the purposes of this dispute. According to Panama, this inscription means that Argentina has made a 
full market access commitment for the supply of reinsurance services in cross-border mode.
570 
7.398.  Argentina appears to agree as it acknowledges that its Schedule of Specific Commitments 
includes a full commitment under mode 1 for the supply of reinsurance services.571 
7.399.  The Panel notes that the GATS does not contain any specific definition of the word "None". 
In US – Gambling , the Appellate Body explained that the word "None" in the market access column 
means that the Member concerned "has undertake n to provide full market access, within the 
meaning of Article XVI, in respect of the services included within the scope of" its commitment in 
the subsector concerned.572 The Appellate Body concluded that "[i]n so doing, [the United States] 
has committed not to maintain any of the types of measures listed in the six sub-paragraphs of Article XVI:2".
573 
7.400.  In the light of the foregoing, the Panel concludes that, having inscribed "None" in the 
"Limitations on market access" column, Argentina has made a full specific commitment under mode 1 for "reinsurance services". This means that Argentina has undertaken not to maintain any 
                                               
568 Argentina's Schedule of Specific Commitments,  document GATS/SC/4, (Exhibit PAN-19), p. 12. 
569 In US – Gambling , the Appellate Body stated: 
In the context of the GATS, Article XX:3 explicitly provides that Members' Schedules are an "integral 
part" of that agreement. Here, too, the task of identifying the meaning of a concession in a GATS 
Schedule, like the task of interpreting any other treaty text, involves identifying the common 
intention of Members. Like the Panel—and, indeed, both the participants—we consider that the meaning 
of the United States' GATS Schedule  must be determined according to the rules codified in Article 31 
and, to the extent appropriate, Article 32 of the Vienna Convention. 
Appellate Body Report, US – Gambling , para. 160 (footnotes omitted, emphasis original). 
570 Panama's first written submission, paras. 4.367 and 4.368. 
571 Argentina's second written submission, para. 54 (" With regard to mode 1,  in which Argentina has 
undertaken full market access co mmitments for reinsu rance and retrocession services …"). 
572 Appellate Body Report, US – Gambling , para. 215. In a footnote, the Appellate Body emphasized that 
"the opposite of the notation [is] 'Unbound', which me ans that a Member undertakes no specific commitment". 
See Appellate Body Report, US – Gambling , footnote 257. (emphasis original) 
573 Appellate Body Report, US – Gambling , para. 215. WT/DS453/R 
 
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  of the six measures covered by any of the subpar agraphs of Article XVI:2, including, therefore, 
subparagraph (a), for this mode and this sector. 
(b) Second requirement: Whether meas ure 5 constitutes an impermissible 
limitation on the cross-border supply of re insurance services within the meaning of 
Article XVI:2(a) of the GATS  
7.401.  We continue by examining the second requirement, namely, whether, as claimed by 
Panama, point 19 of Annex I to SSN Resolution No. 35.615/2011, as elaborated by Article 4 of 
SSN Resolution No. 35.794/2011, constitutes an im permissible limitation on the cross-border 
supply (mode 1) of reinsurance services within the meaning of Article XVI:2(a) of the GATS. 
7.402.  Argentina maintains in this connection that Article XVI:2(a) of the GATS is not applicable 
to measure 5 because that provision refers solely to limitations on the number of service 
"suppliers", whereas the rule challenged by Panama governs reinsurance "operations".574 In any 
event, if the Panel were to consider that measure 5 applies to service "suppliers", Argentina maintains that the measure imposes qualitative requirements and thus falls outside the scope of 
Article XVI:2(a) of the GATS.
575 
7.403.  The Panels notes that the parties' arguments raise two distinct questions with regard to 
the scope of Article XVI:2(a) of the GATS: (i) whether measure 5 governs service "suppliers" 
within the meaning of Article XVI:2(a); and (ii) assuming that this is the case, whether the 
measure constitutes a limitation on the "number of suppliers" of services within the meaning of Article XVI:2(a) of the GATS. 
7.404.  Before examining these two questions, we should like to deal with a procedural issue 
raised by Panama in relation to part of Argentina's argument rebutting Panama's claim under 
Article XVI:2(a) of the GATS. 
(i) Procedural issue raised by Panama 
7.405.  Panama claims that Argentina's counter-arguments concerning point 19 of Annex I to SSN 
Resolution No. 35.615/2011 cannot be accepted by this Panel because they arrived too late. Panama contends that, by accepting them, we would be affecting its right of defence inasmuch as 
within the seven-day period it did not have a proper opportunity to weigh and rebut the arguments 
put forward by Argentina or to fully defend its position. Panama also considers that it did not have the opportunity to discuss these arguments with Argentina and the Panel at any meeting, in accordance with the principles of due process, procedural immediacy and oral presentation.
576 
7.406.  We note that Argentina succinctly addressed Panama's claims concerning the inconsistency 
of measure 5 with Article XVI:2(a) of the GATS in  its first written submission. It then put forward 
an additional argument at the Panel's second su bstantive meeting, and subsequently developed its 
argument in response to question No. 76 from the Panel at the second substantive meeting.577 
7.407.  We also note that Panama had the opportunity to comment on Argentina's response to 
Panel question No. 76 at the second substantive meeting and also within the seven-day period 
provided in the Panel's timetable. However, Panama opted only to request the Panel to ignore 
Argentina's response for reasons of due process. Nor did Panama ask the Panel for additional time to respond to the argument put forward by Argentina in its response to our question. 
                                               
574 Argentina's opening statement at the second meeting of the Panel,  para. 21 and response to Panel 
question No. 76.. 
575 Argentina's opening statement at the second meeting of the Panel,  para. 21 and response to Panel 
question No. 76. 
576 Panama's comments on Argentina' s response to Panel question No. 76 (citing Appellate Body Report, 
Argentina – Textil es and Apparel , para. 79). 
577 Argentina's response to Panel question No. 76. WT/DS453/R 
 
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  7.408.  We agree that due process is an essential feature of the WTO's dispute settlement 
mechanism.578 This does not mean, however, that Panama's right to due process would be 
infringed if we accept Argentina's arguments in response to one of our questions. Although it would have been preferable for Argentina to submit its arguments relating to the application of 
Article XVI:2(a) of the GATS to measure 5 at an earlier stage of the proceedings, Panama had an 
opportunity to respond to Argentina's legal arguments concerning the measure in question. Panama could have commented on those arguments at the second substantive meeting and/or in 
its comments on Argentina's responses to the Pane l's questions after the Panel's second meeting. 
Panama could also have requested more time in which to comment on these arguments if it had considered that more time was needed. 
7.409.  As to the case law and the provisions invoked by Panama – rule 8 of the Working 
Procedures for these proceedings and Article 11 of the DSU -, we note that these refer to the 
submission of evidence, not legal arguments. Nor do we share Panama's view that "the parties' arguments should be presented in their written su bmissions", since such a procedure would reduce 
to irrelevance the holding of substantive meetings with the parties, which are an essential part of 
panels' working procedures and precisely embody the principles of procedural immediacy and oral presentation mentioned by Panama. 
7.410.  In the light of the foregoing, the Panel refuses Panama's request that it should reject 
Argentina's arguments in response to Panel question No. 76. 
(ii) Whether measure 5 applies to serv ice "suppliers" within the meaning of 
Article XVI:2(a) of the GATS 
7.411.  We continue our analysis by examining whether measure 5 applies to service "suppliers" 
within the meaning of Article XVI:2(a) of th e GATS. For this purpose, we shall focus on 
determining what is the scope of the concept of service "suppliers" covered by Article XVI:2(a) in 
order to be able to decide whether measure 5 is covered by this legal provision. 
7.412.  We start by looking at the wording of Article XVI:2(a) of the GATS, which provides: 
(a) limitations on the number of service su ppliers whether in the form of numerical 
quotas, monopolies, exclusive service suppliers or the requirements of an economic 
needs test. 
7.413.  This provision thus refers to limitations on the number of service suppliers. In order to 
understand the scope of this provision, we deem it useful to refer to its context and, in particular, 
the other subparagraphs of Article XVI:2 of the GATS. 
7.414.  In addition to subparagraph (a), Article XVI:2 has five other subparagraphs which provide 
as follows: 
(b) limitations on the total value of service transactions or assets in the form of 
numerical quotas or the requirement of an economic needs test; 
(c) limitations on the total number of service operations or on the total quantity of 
service output expressed in terms of designat ed numerical units in the form of quotas 
or the requirement of an economic needs test; 
(d) limitations on the total number of natural persons that may be employed in a 
particular service sector or that a service supplier may employ and who are necessary 
for, and directly related to, the supply of a specific service in the form of numerical 
quotas or the requirement of an economic needs test; 
(e) measures which restrict or require specific types of legal entity or joint venture 
through which a service supplier may supply a service; and 
                                               
578 In fact, "[d]ue process protecti on guarantees that the proceedings are conducted with fairness and 
impartiality, and that one party is not unfairly disadvan taged with respect to other parties in a dispute." See 
Appellate Body Report, US – Continued Suspension , para. 433. WT/DS453/R 
 
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  (f) limitations on the participation of foreign capital in terms of maximum 
percentage limit on foreign shareholding or the total value of individual or aggregate 
foreign investment. 
7.415.  The chapeau of Article XVI:2 states that the purpose of subparagraphs (a) to (f) is to 
define "sectors where market-access commitments are undertaken, the measures which a Member 
shall not maintain or adopt …". As indicated by the Appellate Body in US – Gambling : 
The chapeau thus contemplates circumstances in which a Member's Schedule 
includes a commitment to allow market access, and points out that the function of the 
sub-paragraphs in Article XVI:2 is to define certain limitations that are prohibited unless specifically entered in the Member's Schedule.
579 
7.416.  If we look at the wording of the first fo ur subparagraphs ((a)-(d)), we see that they share 
similar language in that all refer to types of quantitative limitations on market access. Certainly, 
only the subject of the limitation changes. In this regard, subparagraph (a), which is the one with which we are concerned, refers to ""the number of service suppliers", subparagraph (b) to "the 
total value of service transactions or assets", subparagraph (c) to "the total number of service 
operations or … the total quantity of service output" and subparagraph (d) to "the total number of natural persons that may be employed in a particul ar service sector or that a service supplier may 
employ and who are necessary for, and directly related to, the supply of a specific service". 
7.417.  The fifth subparagraph, (e), "covers measures which restrict or require specific types of 
legal entity or joint venture through which a service supplier may supply a service"; and the sixth subparagraph, (f), refers to limitations on the participation of foreign capital.
580 
7.418.  We agree with previous panels that the six types of measure form a closed or exhaustive 
list, as indicated in the chapeau of Article XVI:2, by providing that the six measures listed below "are defined as".
581 The word " definir " (to define) means "[ f]ijar con claridad, exactitud y precisión 
el significado de una palabra o la naturaleza de una persona o cosa "582 (to establish clearly, 
exactly and precisely the meaning of a word or the nature of a person or thing). In our view, the 
list of measures in the six subparagraphs of Article XVI:2 is not only exhaustive but also fulfils the 
function of establishing clearly, exactly and precis ely the types of limitation on market access that 
are prohibited and hence may not be maintained or adopted in those sectors where a Member had adopted specific commitments, unless it has specifically mentioned this possibility in its Schedule.
583 This function is key because it enables Members wishing to undertake specific 
commitments on market access, as well as all the other Members, to understand precisely the 
scope of such commitments. Bearing in mind that, in sectors where they make specific commitments, Members have the right to maintain one (or more) of these six limitations provided 
that they are inscribed in their Schedules, the function of the list of measures, "to establish clearly, 
exactly and precisely", compels Members to define  and identify clearly and exactly the scope of 
such limitations – and hence the scope of the specific commitment they have made. 
7.419.  Turning our focus to subparagraphs (a) to (d), which refer to the quantitative limitations 
on market access, we note that they explicitly identify the elements to be regulated, namely, "the number of service suppliers", "the total value of se rvice transactions or assets", "the total number 
of service operations or … the total quantity of  service output" and "the total number of natural 
persons" that may be employed in a service sector or by a service supplier. On its face, the text of 
                                               
579 Appellate Body Report, US – Gambling , para. 233. (emphasis original) 
580 Appellate Body Report, US – Gambling , para. 214. In that Report, the Appellate Body drew a 
distinction between the first four subparagraphs and the last two subparagraphs ("The first four 
sub-paragraphs concern quantitative limitations on ma rket access; the fifth sub-paragraph covers measures 
that restrict or require specific types of legal enti ty or joint venture through which a service supplier may 
supply a service; and the sixth sub-paragraph identifies limitations on the participation of foreign capital."). 
581 Panel Reports, China – Publications and Audiovisual Products , para. 7.1353, China – Electronic 
Payment Services , para. 7.629. See also Panel Report, US – Gambling , para. 6.298. 
582 Diccionario de la Lengua Española , 23rd edition, Real Academia Española  (Espasa Calpe, 2014), 
Vol. I, p. 716. 
583 Regarding the scope of Article XVI:2, see also Panel Report, China – Electronic Payment Services, 
para. 7.652 ("Unlike Article XVII, however, the scope of the market access obligation does not extend generally 
to 'all measures affecting the supply of services'. Instead, it applies to  six carefully defined categories of 
measures of a mainly quantitative nature."). WT/DS453/R 
 
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  the subparagraphs in question leads us to conclu de that subparagraphs (a) to (d) of Article XVI 
only cover those elements which are explicitly mentioned in them. Indeed, even if it were 
conceivable that there might be some other el ement distinct from the four identified in 
subparagraphs (a) to (d), whose market access could hypothetically be limited quantitatively, such 
an element would not form part of the limitations regulated by Article XVI:2 because it was not 
identified by the drafters. In this regard, we cons ider that an interpretation of Article XVI:2 which 
made it applicable to measures that do not, on their face, regulate any of the four elements 
covered by subparagraphs (a) to (d) would unduly broaden the scope of Article XVI of the GATS 
and thus the scope of Members' specific commitments. 
7.420.  One other important element to be borne in mind is that any interpretation of Article XVI:2 
of the GATS must give effect to each of the six subparagraphs of the provision. We do not exclude 
the possibility that, in practice, a measure whic h regulates, for example, the number of service 
operations, within the meaning of subparagraph (c), may have the indirect effect of limiting the number of service suppliers. Similarly, measures aimed at limiting the total value of transactions 
or assets (subparagraph (b)) or the total number of natural persons that may be employed in a 
particular service sector (subparagraph (d)) could also have the effect of indirectly limiting the number of service suppliers. In this regard, it co uld be argued that the limitations covered by 
subparagraphs (b), (c) and (d) of Article XVI:2 could in practice result in an indirect limitation on 
the number of suppliers even if these measures, on their face, specifically regulate the total value 
of assets, the number of operations or the total number of natural persons that may be employed 
in a particular sector, respectively. Consequent ly, broadening the scope of subparagraph (a) of 
Article XVI:2 to cover measures which, by quantita tively limiting any of the elements regulated by 
subparagraphs (b), (c) or (d), indirectly give rise to a quantitative limitation on service suppliers, would deprive subparagraphs (b, (c) and (d) of an "effet utile". Ultimately, each measure could be 
reduced to a limitation on the number of suppliers. We consider that such an interpretation would 
run counter to an effective interpretation of the GATS. 
7.421.  In the light of foregoing, we consider that subparagraphs (a) to (d) of Article XVI:2 cover 
measures intended specifically to limit the number or value of "service suppliers" (subparagraph 
(a)), "service transactions or assets (subparagraph (b)), "service operations or … the total quantity of service output (subparagraph (c)) or "natural persons that may be employed in a particular service sector or that a service supplier may em ploy and who are necessary for, and directly 
related to, the supply of a specific service" (subparagraph (d)). Any measure which only has the 
indirect effect of limiting any of the elements  covered by subparagraphs (a) to (d) would not 
therefore be covered by that subparagraph.
584 
7.422.  Our interpretation of Article XVI:2 is cons istent with the object and purpose of the GATS, 
as reflected in its preamble, which confirms Members' intention to liberalize trade in services "under conditions of transparency and progressive liberalization".
585 At the same time, it 
underlines "the right of Members to regulate, and to introduce new regulations, on the supply of 
services … in order to meet national policy objectives …".586 
7.423.  The preamble confirms that Members wished  to liberalize trade in services transparently 
and progressively. In those sectors where they have made specific commitments, Members are 
authorized to maintain the limitations listed in su bparagraphs (a) to (d) of Article XVI:2, provided 
that they have recorded them in their Schedules specifically and transparently. In addition, the right to regulate is an essential pillar of the progressive liberalization of trade in services which, 
according to Article XIX of the GATS "shall take place with due respect for national policy 
objectives". Members retain the right to regulate in order to meet their national policy objectives, subject to the relevant GATS disciplines, Article VI in particular, including in those sectors where 
they have made specific commitments under Article XVI of the GATS. 
                                               
584 We note that in US – Gambling , the Panel considered that measures which referred expressly to 
service suppliers also regulated services operations because, according to the Panel, they "effectively" 
prohibited the supply of services (see Panel Report, US – Gambling , para. 6.361). For the reasons expressed 
earlier, this Panel does not agree with the reasoning of the panel in US – Gambling.  
585 Second recital of the GATS. 
586 Fourth recital of the GATS. WT/DS453/R 
 
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  7.424.  On that basis and with a focus on subparagraph (a), the Panel considers that a measure 
will be covered by Article XVI:2(a) of the GATS if  it regulates "service suppliers" as such, that is, 
when the measure is aimed at persons in their capacity as service suppliers. 
7.425.  Article XXVIII(g) of the GATS defines the term "service supplier" as "any person that 
supplies a service".587 In turn, Article XXVIII(j) of the GATS  states that "'person' means either a 
natural person or a juridical person". Basing ourselves on these definitions, we consider that Article XVI:2(a) covers measures whose purpose is to limit the number of persons, natural or 
legal, supplying a service. 
7.426.  We shall now consider whether measure 5 is a measure whose purpose is to limit the 
number of natural or legal persons supplying a service. We recall in this connection that point 19 of Annex I to SSN Resolution No. 35.615/2011 specifically provides that: 
19. The NATIONAL INSURANCE SUPERVISORY AUTHORITY, by means of a special 
reasoned resolution on certain reinsurance transactions duly specified by the requesting insurer, may allow authorized entities to carry out insurance operations in 
the country, enter into reinsurance contracts with foreign reinsurance entities which 
conduct their operations from their head office when the magnitude and characteristics of the ceded risks make it impossible to cover such reinsurance 
operations on the national reinsurance market. The request shall be submitted prior to 
entering into the contract and shall be accompanied by all the evidence needed to justify the exception. 
7.427.  This provision was subsequently developed by Article 4 of SSN Resolution 
No. 35.794/2011, which provides as follows: 
For the purposes of point 19 of Annex I to SSN Resolution No. 35.615, it is stipulated 
that individual risks exceeding US$50,000,000 (FIFTY MILLION UNITED STATES 
DOLLARS) may be reinsured with the reinsura nce entities mentioned in point 20 of the 
aforementioned regulations ("approved reinsurers"), for that portion which exceeds the aforementioned amount. 
7.428.  The Panel notes that the text of point 19 of Annex I to SSN Resolution No. 35.615/2011 
refers to "… certain reinsurance operations duly  specified by the requesting insurer" and to 
situations in which it is "… impossible to cover such reinsurance operations on the national reinsurance market". Article 4 of SSN Resolution No. 35.794/2011, which develops point 19 of 
Annex I to SSN Resolution No. 35.615/2011, regulates "individual risks exceeding US$50,000,000 
…". On their face, therefore, both provisions regulate "reinsurance operations" or "individual risks", but do not specifically regulate any natural or legal person supplying reinsurance services (in this 
case, from their country of origin). In other words,  the provisions cited by Panama do not regulate 
reinsurance service suppliers as such, but rather, in any event, the operations which reinsurers 
established outside Argentina may conduct with Argentine insurance companies. 
7.429.  In the light of the foregoing, the Pa nel finds that measure 5 is not covered by 
Article XVI:2(a) of the GATS because it does not regulate service suppliers within the meaning of this provision. 
(iii) Whether measure 5 constitutes a limitation on the "number of service 
suppliers" within the meaning of Article XVI:2(a) of the GATS 
7.430.  Having concluded that Article XVI:2(a) of the GATS is not applicable to measure 5 because 
it does not regulate service suppliers within the meaning of this provision, the Panel refrains from 
examining whether measure 5 constitutes a limitation on the number of suppliers within the 
meaning of Article XVI:2(a) of the GATS. 
                                               
587 A footnote to subparagraph (g) of Article XXVIII of the GATS provides that: "Where the service is not 
supplied directly by a juri dical person but through other forms of comm ercial presence such as a branch or a 
representative office, the service supplier (i.e. the juri dical person) shall, nonetheless, through such presence 
be accorded the treatment provided for service supp liers under the Agreement. Such treatment shall be 
extended to the presence through which the service is su pplied and need not be extended to any other parts of 
the supplier located outside the territory where the service is supplied." WT/DS453/R 
 
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  7.3.3.2.3.2  Conclusion 
7.431.  In the light of the foregoing, the Panel dismisses Panama's claim under Article XVI:2(a) of 
the GATS because measure 5 (requirements relating to reinsurance services) is not covered by that provision inasmuch as it does not regulate service suppliers within the meaning of 
Article XVI:2(a) of the GATS. 
7.3.3.2.4  The question of whether measur e 5 is inconsistent with Article XVI:1 
of the GATS 
7.432.  We shall now examine Panama's claim under Article XVI:1 of the GATS. We recall in this 
regard that Panama claims that Argentina accords to foreign suppliers of reinsurance services treatment less favourable than that specified in its Schedule, inconsistently with Article XVI:1 of the GATS inasmuch as the limitation on access to Argentina's reinsurance services market via 
mode 1, by requiring an economic needs test, is inconsistent with Article XVI:2(a) of the said 
Agreement.
588 Argentina responds that measure 5 is not inconsistent with Article XVI:1 of the 
GATS because it is not covered by that provision.589 
7.433.  The Panel notes that Panama only puts forward arguments relating to its claims of 
violation of Article XVI:2(a), without developing se parate and additional arguments in regard to its 
claim under Article XVI:1 of the GATS. In fact, Panama appears to argue that there is a violation of 
Article XVI:1 as a consequence of the violation of Article XVI:2 of the GATS.590 
7.434.  In the absence of a separate argument by Panama concerning the inconsistency of 
measure 5 with Article XVI:1, we consider that Panama has not established a prima facie case of 
inconsistency in respect of its claim under Article XVI:1 of the GATS. 
7.3.3.2.4.2  Conclusion 
7.435.  In the light of the foregoing, the Panel di smisses Panama's claim under Article XVI:1 of the 
GATS in respect of measure 5 (requirements relating to reinsurance services) because Panama has 
not established a prima facie case of inconsistency in this regard. 
7.3.4  Panama's claims under  Article XVII of the GATS 
7.3.4.1  Main arguments of the parties 
7.3.4.1.1  Panama 
7.436.  Panama claims that measure 2 (presumption of unjustified increase in wealth), measure 3 
(transaction valuation based on transfer prices) and measure 4 (payment received rule for the allocation of expenditure) are inconsistent with  Article XVII of the GATS because they accord 
services and service suppliers of non-cooperative countries treatment less favourable than that 
accorded by Argentina to its own like services and like service suppliers.
591 
7.437.  As regards Argentina's commitments under measure 2, Panama claims that Argentina 
undertook full national treatment commitments in the sectors of maritime and air transport 
insurance, reinsurance and retrocession for the cr oss-border mode of supply (mode 1). As regards 
Argentina's commitments in relation to measures 3 and 4, in its first written submission Panama 
claims that Argentina undertook full national treatment commitments under the cross-border 
supply mode (mode 1) for all sectors in its Schedule of Commitments, except for a series of financial services.
592 In its second written submission, in connection with measure 3, Panama adds 
that Argentina has undertaken full national treatment commitments in these sectors, not only for 
                                               
588 Panama's second written submission, para. 2.631. 
589 Argentina's opening statement at the second meeting of the Panel, para. 21. 
590 Panama's first written submission, paras. 4.376, 4.379, 4.381 and 4.382; and second written 
submission, para. 2.631. 
591 Panama's first written submission , paras. 5.1(b)(ii), 5.1(c)(ii) an d 5.1(d)(ii); and second written 
submission, paras. 3.1(b)(ii), 3.1(c)(ii) y 3.1(d)(ii). 
592 Panama's first written submission, paras. 4.152-4.153, 4.254 and 4.315. WT/DS453/R 
 
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  cross-border supply (mode 1), but also for Argentine consumers travelling abroad to receive a 
service (mode 2).593 
7.438.  As to whether the measures affect the relevant modes of supply and service sectors, 
Panama argues that measure 2 affects the supply and use of these services, since the presumption 
of unjustified increase in wealth affects the amounts of money that the service supplier (the 
insurer or reinsurer) pays to the consumer of the service (the insured) in the event of damage or other circumstances covered by the insurance contract.
594 For measure 3, Panama claims that the 
measure affects the "sale" (within the meaning of Article XXVIII(b) of the GATS) of services by 
suppliers of non-cooperative countries and, in the light of Article XXVIII(c), the measure affects the "purchase" or "use" of such services by Arge ntine consumers, both in Argentina (mode 1) and 
in the territory of the country in question (mode 2).
595 As regards measure 4, Panama contends 
that the measure affects the supply of services  which generate revenue of Argentine source 
because it has an impact on the perception of the consumer/taxpayer when conducting transactions with suppliers of a particular origin. It  therefore affects the "delivery" of such services 
in the terms of Article XXVIII(b) of the GATS, as we ll as the "use" of the services in the terms of 
Article XXVIII(c)(i) of the GATS.
596 
7.439.  As regards the existence of less favourable treatment, Panama argues that measures 2, 3 
and 4 accord less favourable treatment to services and service suppliers of non-cooperative 
countries in comparison with the treatment accorded to Argentine like services and service suppliers. In these three cases, the presumption of likeness between national services and/or 
service suppliers and foreign services and/or serv ice suppliers is confirmed because the sole basis 
for the differential treatment is the origin of the service and/or service supplier. As regards 
measure 2, the presumption of likeness is confirmed by the fact that the country of provenance of 
the funds is the only triggering element for the pr esumption that the funds in question constitute 
an unjustified increase in wealth. In the case of measure 3, Panama explains that it derives from a 
regulatory distinction that depends solely on the place of origin or source of the services. Likewise, measure 4 derives from a regulatory distinction based solely on the place in which the person 
receiving the payments, i.e. the service supplier, is located, domiciled and/or incorporated.
597 
Panama contends that there is no other criterion differentiating between services and service suppliers under measures 2, 3 and 4. Accordingly, and in line with previous case law, the likeness of service suppliers from non-cooperative countries and domestic service suppliers is confirmed. 
Panama claims that there are, or may be, service suppliers of non-cooperative countries which are 
the same as Argentine service suppliers in every respect except origin.
598 
7.440.  As regards measure 2, Panama claims that there is treatment less favourable because the 
measure imposes a heavier tax burden on consumers of the service, which entails a disincentive to 
contract with service suppliers from non-cooperat ive countries, thereby modifying the conditions of 
competition to the detriment of the latter. Accord ing to Panama, the fact that the purchase of 
maritime or air transport insurance services and reinsurance or retrocession services offered by 
suppliers from non-cooperative countries legally imposes a tax contingency associated with the presumption of an unjustified increase in weal th, places these services at a disadvantage vis-à-vis  
potential Argentine consumers. Given the disparit y of treatment between one and the other type 
of service, the consumer's decision will be pr ejudiced against contracting services offered by 
service suppliers from non-cooperative countries. According to Panama, one option for the consumer would be to contract the services offered by suppliers located in Argentina, which would 
avoid the presumption of unjustified increase in wealth and, hence, the potential evidentiary and 
tax burdens. Panama asserts that the decision taken by the consumer has a direct impact on the service supplier's opportunities to compete. In such circumstances, Panama considers that the 
challenged measure clearly modifies the conditions of competition to the detriment of services and 
service suppliers of non-cooperative countries.
599 In Panama's view, the mere risk that the 
                                               
593 Panama's second written submission, para. 2.433. Panama points out that the following were the 
only sectors on which Argentina did not undertake na tional treatment commitments under mode 2: life, 
accident and health insuranc e services; non-life insuranc e services and new financial services. See Argentina's 
Schedule of Specific Commitments, (Exhibit PAN-19). 
594 Panama's first written submission, para. 4.154; and second written submission, para. 2.304. 
595 Panama's second written submission, para. 2.434. 
596 Panama's second written submission, para. 2.539. 
597 Panama's first written submission, paras. 4.157, 4.256 and 4.317. 
598 Panama's second written submission, paras. 2.305, 2.435 and 2.540. 
599 Panama's first written submission, paras. 4.160-4.167; and second written submission, para. 2.306. WT/DS453/R 
 
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  presumption will be applied, irrespective of whethe r it can be rebutted or not, alters the conditions 
of competition to the detriment of like services and service suppliers from non-cooperative countries. Panama adds that the very design and structure of the measure in question modifies the conditions of competition in such a way as to accord less favourable treatment to services and 
service suppliers of non-cooperative countries.
600 
7.441.  With regard to measure 3, Panama contends that this measure accords less favourable 
treatment to like services and service suppliers of non-cooperative countries in comparison with 
like services and service suppliers of Argentine origin because it implies administrative 
requirements, economic burdens and significant ta x contingencies, whereas purchasing the same 
services from a supplier located in Argentina does not involve the same requirements, economic burdens and tax contingencies. This implies modification of the conditions of competition between 
like services and service suppliers of non-cooperative countries and those of national origin.
601 
7.442.  Concerning measure 4, Panama claims that the measure accords services and service 
suppliers of non-cooperative countries treatment less favourable than that accorded to like 
services and service suppliers of national origin. Panama asserts that, for Argentine taxpayers, in 
the context of admissible deductions from gains ta x, the purchase of services from persons in 
non-cooperative countries involves a problem in managing their accounts and tax matters. The 
measure in question imposes the rule for allocation of expenses based on the time at which the 
payment of obligations under the service contract is  made, instead of the basic principle of accrual 
which governs the general accounting of commercial companies in Argentina. This special rule undermines opportunities for these services to compete in comparison with like services supplied 
by domestic service suppliers, whose payments may continue to be allocated on the basis of the 
accrual rule. Panama explains that measure 4 may alter the net taxable profit of Argentine taxpayers, thereby creating a disincentive for Ar gentine companies in their relations with service 
suppliers situated in non-cooperative countries. In Panama's opinion, this impairs the ability of 
service suppliers from non-cooperative countries to compete on equal terms with like services and service suppliers of national origin.
602 
7.443.  Panama alleges that Argentina has submitted its arguments under Articles II:1 and XVII of 
the GATS collectively and for all the measures at issue at the same time. According to Panama, this creates confusion because Panama submitted claims under Article II:1 of the GATS with regard to the eight measures at issue, but only submitted claims under Article XVII of the GATS in 
relation to three specific measures, namely, the presumption of unjustified increase in wealth 
(measure 2), the requirement of transaction valuat ion based on transfer prices (measure 3) and 
the payment received rule for the allocation of expenditure to the time of payment (measure 4).
603 
7.3.4.1.2  Argentina 
7.444.  Argentina has not presented specific arguments in relation to Article XVII of the GATS. As 
regards the questions of "likeness" and "treatment no less favourable", Argentina put forward the 
same arguments for Articles II and XVII of the GATS.604 Accordingly, we refer back to Argentina's 
arguments presented in section 7.3.2.1.2 above. 
7.3.4.2  Assessment by the Panel 7.3.4.2.1  Introduction 
7.445.  The question before the Panel is whether measure 2 (presumption of unjustified increase in 
wealth), measure 3 (transaction valuation based on transfer prices) and measure 4 (payment 
                                               
600 Panama's first written submission, paras. 4.168 and 4.169 (referring to Appellate Body Reports, 
Thailand – Cigarettes (Philippines) , para. 130; and US – Section 211 Appropriations Act , para. 268); and 
second written submission, para. 2.307. 
601 Panama's first written submission, paras. 4.257 and 4.258; and second written submission, 
para. 2.436. 
602 Panama's first written submission, para. 4.318; and second written submission, para. 2.541 
(referring to its response to Panel question No. 42). 
603 Panama's second written submission, para. 2.290. 
604 Argentina's first written submission, paras. 147-236; second written submission, paras. 16-51; and 
opening statement at the second meeting of the Panel, paras. 2-20. WT/DS453/R 
 
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  received rule for the allocation of expenditure) are inconsistent with Article XVII of the GATS. In 
response to Panama's claims, Argentina states that its measures are not inconsistent with Article XVII of the GATS because Panama has not established a prima facie case that the GATS is 
applicable to these measures, that the services and service suppliers are like, or that there is 
treatment less favourable.
605 
7.446.  We shall start by examining the wording of  Article XVII of the GATS in order to establish 
the applicable legal standard. From this perspective, we shall then determine whether measures 2, 
3 and 4 violate this provision. 
7.3.4.2.2  The relevant legal provision 7.447.  Article XVII, entitled "National Treatment", provides as follows: 
1. In the sectors inscribed in its Schedule, and subject to any conditions and 
qualifications set out therein, each Member shall accord to services and service 
suppliers of any other Member, in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and 
service suppliers.
10 
2. A Member may meet the requirement of  paragraph 1 by according to services 
and service suppliers of any other Member, either formally identical treatment or 
formally different treatment to that it accords to its own like services and service 
suppliers. 
3. Formally identical or formally different treatment shall be considered to be less 
favourable if it modifies the conditions of competition in favour of services or service 
suppliers of the Member compared to like services or service suppliers of any other 
Member. 
_______________ 
10 Specific commitments assumed under this Article shall not be construed to require any 
Member to compensate for any in herent competitive disadvantage s which result from the foreign 
character of the relevant se rvices or service suppliers . 
7.3.4.2.3  The legal standard under Article XVII of the GATS 
7.448.  The Panel recalls that previous panels applied a legal standard consisting of three 
requirements in order to determine whether a Member's measure is inconsistent with Article XVII of the GATS. Those panels considered that, in or der to substantiate a claim that a measure is 
inconsistent with Article XVII of the GATS, a complainant must establish a prima facie  case with 
respect to the following three requirements: (i ) that the respondent has assumed a national 
treatment commitment in the relevant sector(s) or mode(s) of supply, taking into account any conditions and qualifications, or limitations set out in its Schedule of Commitments; (ii) that the 
measure in question "affect[s] the supply of services" in the relevant sector(s) and mode(s); and 
(iii) that the measure does not accord to the services and service suppliers of any other Member treatment no less favourable than that accorded by Argentina to its own like services and service 
suppliers.
606 
7.449.  Following the approach taken by those panels, we shall commence by examining whether 
Panama has demonstrated that Argentina undertook specific commitments on the services and 
modes cited by Panama in respect of measures 2, 3 and 4. Next, we shall determine whether 
Panama has demonstrated that measures 2, 3 and 4 "affect […] trade in services" in the sectors and modes concerned. Lastly, we shall examine whether Panama has demonstrated that measures 2, 3 and 4 accord services and service suppliers of non-cooperative countries treatment 
less favourable than that accorded by Argentina to its own like services and service suppliers. 
                                               
605 Argentina's first written submission, Sections III, III.A and III.B. 
606 Panel Reports, China – Electronic Payment Services , para. 7.641; China – Publications and 
Audiovisual Products , para. 7.944; and EC – Bananas III , para. 7.314. WT/DS453/R 
 
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  7.3.4.2.3.1  First requirement: whether Arge ntina has assumed specific commitments in 
the sectors and modes cited by Panama in respect of measures 2, 3 and 4 
7.450.  We start by examining whether Panama has proved that Argentina made commitments on 
national treatment in the relevant sectors and modes in respect of measures 2, 3 and 4, taking 
into account any limitations included in its Schedule. We first examine whether Panama has 
complied with this first requirement in respect of measure 2. 
(a) Whether Argentina has assumed spec ific commitments in the sectors and 
modes indicated by Panama in respect of measure 2  
7.451.  Panama claims that Argentina has assumed specific commitments in respect of measure 2 
in relation to (i) maritime and air transport insurance services; and (ii) reinsurance and retrocession services.
607 The relevant mode of supply in both cases is mode 1. Panama considers 
that Argentina made a full national treatment commitment for both sectors because it inscribed 
the word "None" in the national treatment column under mode 1.608 Like Panama, we understand 
that Argentina has not denied that it made full specific national treatment commitments in these 
two sectors under mode 1.609 
7.452.  We note that the relevant part of Argentina's Schedule of Commitments610 lists the 
following commitments: 
Sector or subsector Limitations on national treatment 
- Maritime and air transport 
insurance services (CPC 81293) (1) None 
(2) None (3) None (4) Unbound, except as indicated in the horizontal section 
(c) Reinsurance and retrocession 
services (CPC 81299*) (1) None 
(2) None 
(3) None 
(4) Unbound, except as indicated in the horizontal section 
(emphasis added) 
7.453.  We note that, as indicated by Panama, Argentina has inscribed "None" in its Schedule of 
Specific Commitments in the "Limitations on national treatment" column in respect of mode 1 (cross-border supply). We also note that Argentina has inscribed no limitation under mode 1 in the horizontal section (the so-called "horizontal commitments") of its Schedule of Commitments. 
7.454.  In section 7.3.3.2.3 above, we indicated that the GATS does not contain a specific 
definition of the term "None". Basing ourselves on previous case law, we conclude that, by 
inscribing the word "None" in the "Limitations on market access" column, Argentina undertook a 
full specific commitment under mode 1 on "Reinsurance services". We thus conclude that 
Argentina has undertaken not to maintain any of the six measures included in any of the subparagraphs of Article XVI:2 and,  hence, subparagraph (a) for this mode and this sector. In our 
view, when it is inscribed in the national tr eatment column, the word "None" has the same 
implications with regard to the national treatment obligation established in Article XVII of the GATS. That is to say, the word "None" indicates that Argentina has set out no limitations on national treatment in this mode.
611 As far as the supply of services through mode 1 in the 
"Maritime and air transport insurance services" and "Reinsurance and retrocession services" 
sectors is concerned, therefore, the notation "N one" in the national treatment column indicates 
that Argentina has undertaken to accord full national treatment. Such national treatment extends 
                                               
607 Panama's first written submission, para. 4.152; and second written submission, paras. 2.302 and 
2.303. 
608 Panama's first written submission, para. 4.153. 
609 Panama's second written submission, para. 2.303. 
610 Argentina's Schedule of Specific Commitments, GA TS/SC/4, 15 April 1994, (Exhibit PAN-19), p. 12, 
and Appendix 1 to this Report. 
611 The panel in China – Publications and Audiovisual Products  came to the same conclusion regarding 
the meaning of the word "None" in the national treatment column. See Panel Report, China – Publications and 
Audiovisual Products , paras. 7.951 and 7.1056. WT/DS453/R 
 
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  to "all measures affecting the supply of services",  which is the scope of Article XVII as defined in 
that provision.612 
(b) Whether Argentina has assumed specific commitments in the sectors and 
modes indicated by Panama in respect of measure 3  
7.455.  We next examine whether, as Panama claims, Argentina made specific commitments in 
respect of measure 3. We note in this connection that, initially, Panama asserted that the relevant mode of supply affected is "predominantly cross-border trade" (mode 1)
613 in relation to all sectors 
in its Schedule of Commitments, except for a series of financial services.614 Later, in response to a 
question from the Panel, Panama clarified that  measure 3 "covers and affects" the supply of 
cross-border services (mode 1) and the supply of services through consumption in the territory of 
other Members (mode 2).615 
7.456.  Like Panama, we understand that Argentina has not denied that it made specific 
commitments in the sectors and modes cited by Panama.616 In fact, in its first written submission, 
Argentina confines itself to indicating that "from [the first] written submission [of Panama] it can 
be inferred that Panama considers relevant, at least, the following services and modes of supply", 
and refers to modes 1 and 2 in respect of measure 3.617 
7.457.  We turn to determining whether Argentina has assumed specific commitments in respect 
of measure 3 in the modes and sectors claimed by Panama. 
7.458.  We note in this connection that, in its panel request, in relation to measure 3, Panama 
referred to "services or … suppliers domiciled, inco rporated or located in the listed countries …"), 
i.e. to services supplied from, and suppliers located in, the territory of another Member. Panama's 
panel request therefore potentially covers both mode 1 and mode 2, inasmuch as the common 
feature of both these modes is that the service supplier "is not present in the territory of the 
Member" which "imports" the service.618 Consequently, we conclude that modes 1 and 2 are the 
relevant modes of supply in respect of measure 3 for the purposes of our examination. 
7.459.  We next consider whether Panama has identified the sectors in which, in its opinion, 
Argentina undertook specific commitments in its Schedule. We note that, in its first written 
submission, Panama claims that "except as regards certain specific services in the financial 
services sector", Argentina undertook full national treatment commitments" in all the sectors in its Schedule".
619 Then, referring to Argentina's Schedule of  Commitments, in a footnote, Panama lists 
those sectors for which Argentina did not assume national treatment commitments in mode 1 
instead of listing those for which Argentina did make commitments. The fo llowing are the sectors 
listed by Panama: 
[L]ife, accident and health insurance services; non-life insurance services; acceptance 
of deposits and other repayable funds from the public; lending of all types including 
consumer credit, mortgage credit, factoring and financing of commercial transactions; financial leasing services with a purchase option; payment and money transmission 
services; guarantees and commitments; trading on own account or for clients in 
money market instruments (cheques, bills, certificates of deposit, etc.), foreign exchange, derivative products, including, but not limited to, futures and options, exchange rate and interest rate instrument s, such as swaps, forward interest-rate 
agreements, etc., transferable securities and other negotiable instruments and 
financial assets, including bullion; participation in issues of all kinds of securities, including under-writing and placement as agent (whether publicly or privately) and 
                                               
612 See in this connection Panel Report, China – Electronic Payment Services , para. 7.651. 
613 Panama's first written submission, para. 4.254; see also first written submission, para. 4.315. 
614 Panama's first written submission, para. 4.254 and footnote 252; and second written submission, 
para. 2.433 and footnote 420. 
615 See Panama's response to Panel question No. 21; and second written submission, para. 2.433. 
616 Panama's second written submission, para. 2.433. 
617 Argentina's first written submission, para. 142. 
618 See the 1993 Guidelines, (Exhibits PAN-46 / ARG-79), para. 18; and Guidelines for the Scheduling of 
Specific Commitments under the General Agreement on Tr ade in Services (GATS), adopted by the Council for 
Trade in Services on 23 March 2001 (2001 Guidelines ), S/L/92, (Exhibits PAN-45 / ARG-39), para. 26. 
619 Panama's first written submission, para. 4.254. WT/DS453/R 
 
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  provision of services related to such issues; money broking; asset management; 
settlement and clearing services for financial assets; new financial services.620 
7.460.  In its second written submission, with regard to measure 3, Panama claims that Argentina 
has made full commitments on national treatment for "all sectors in its Schedule in modes 1 and 
2". In a footnote, in addition to once again listing the services for which Argentina did not 
undertake specific commitments under mode 1, it adds with regard to mode 2 that "the only sectors in which Argentina did not make national treatment commitments are the following: life, 
accident and health insurance services; non-life insurance services; and new financial services".
621 
7.461.  One question that arises is whether the way in which Panama refers to the sectors in which 
it claims that Argentina has undertaken commitments suffices to comply with the requirement to prove that Argentina has assumed specific commitments within the meaning of Article XVII of the 
GATS. Panama did not specify the sectors for which Argentina made national treatment 
commitments under modes 1 and 2. Panama opted for a negative enumeration, i.e. a list of the sectors in which Argentina did not make such commitments. Although in our opinion it would have 
been advisable for Panama to identify precisely those sectors for which Argentina did make specific 
commitments, we consider that the information provided by Panama is sufficient for Argentina to understand which sectors are concerned and, ther efore, the scope of Panama's claims under 
Article XVII of the GATS. To this must be added the fact that Argentina has not made 
any comment in this regard. We therefore accept Panama's negative list for the purposes of identifying the sectors covered by Argentina's sp ecific commitments on national treatment under 
modes 1 and 2. 
7.462.  Another point to be clarified is whether Panama's claims under Article XVII of the GATS 
also cover the commitments on telecommunications which Argentina undertook when ratifying the fourth Protocol contained in Supplement 1 to Argentina's Schedule. This document "supplements 
the section on Telecommunications Services on  pages 9 to 11 of document GATS/SC/4".
622 We 
note that Panama did not refer to these commitments or to Supplement 1 to Argentina's Schedule, either in its panel request or in its various submissions. We also note that Argentina makes no 
comment in this regard. In addition, this Supplement is not on the record on this case. This leads 
us to conclude that Panama's claims under Ar ticle XVII of the GATS do not extend to the 
telecommunications commitments contained in this Supplement. 
7.463.  In the light of the foregoing, with regard to mode 1, we conclude that the relevant services 
for which Argentina made a full national treatment commitment include all the services for which 
Argentina inscribed the word "None" in that mode. These services include all the sectors listed in Argentina's Schedule of Commitments
623, except for the telecommunications services included in 
Supplement 1 to that Schedule624 and the following sectors: 
[L]ife, accident and health insurance services; non-life insurance services; acceptance 
of deposits and other repayable funds from the public; lending of all types including 
consumer credit, mortgage credit, factoring and financing of commercial transactions; 
financial leasing services with a purchase option; payment and money transmission services; guarantees and commitments; trading on own account or for clients in money market instruments (cheques, bills, certificates of deposit, etc.), foreign 
exchange, derivative products, including, but not limited to, futures and options, 
exchange rate and interest rate instrument s, such as swaps, forward interest-rate 
agreements, etc., transferable securities and other negotiable instruments and 
financial assets, including bullion; participation in issues of all kinds of securities, 
including under-writing and placement as agent (whether publicly or privately) and provision of services related to such issues; money broking; asset management; 
settlement and clearing services for financial assets; new financial services.
625 
                                               
620 Panama's first written submission, para. 4.254, footnote 252. 
621 Panama's second written submission, para. 2.433, footnote 420. 
622 Argentina's Schedule of Specific Commitments,  Supplement 1, GATS/SC/4/Suppl.1, 11 April 1997. 
623 See Appendix 1 to this Report. 
624 See footnote 622 above. 
625 Panama's first written submission, footnote 252; and second written submission, footnote 420. WT/DS453/R 
 
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  7.464.  As regards mode 2, the relevant services for which Argentina made a full national 
treatment commitment include all the services for which Argentina has inscribed the word "None" in that mode. These include all the services inscribed in Argentina's Schedule of Commitments
626, 
except for the telecommunications services included in Supplement 1 to that Schedule627 and the 
following sectors: "Life, accident and health in surance services; non-life insurance services; and 
new financial services".628 
(c) Whether Argentina has assumed specific commitments in the sectors and 
modes indicated by Panama in respect of measure 4  
7.465.  Panama also claims that Argentina assumed specific commitments in respect of 
measure 4. In this connection, Panama asserts that Argentina made full national treatment commitments under the cross-border mode of suppl y (mode 1) for the vast majority of service 
sectors included in its Schedule.
629 This also appears to be Argentina's assessment.630 
7.466.  We proceed to determine whether Argentina assumed specific commitments in respect of 
measure 4 in the mode and sectors claimed by Panama. 
7.467.  As regards the mode of supply, we note that Panama refers to full commitments ("None") 
on national treatment under mode 1 which Argentina has inscribed "in the vast majority of service sectors included in its Schedule of Commitments".
631 Like Panama, we note that Argentina has not 
denied the existence of such commitments.632 
7.468.  We shall now consider whether Panama has identified the sectors for which, in its opinion, 
Argentina made a full commitment ("None") under mode 1 in the "Limitations on national treatment" column of its Schedule. We note that, as is the case for measure 3, Panama initially 
refers to all sectors except for certain financial se rvices. In its second written submission, referring 
to Argentina's Schedule of Commitments, in a footnote
633 Panama lists those sectors for which 
Argentina did not assume full national treatment commitments in mode 1 instead of listing those 
for which Argentina did make commitments. This list of sectors is identical to the sectors not 
covered by measure 3. As was the case for measure 3, we accept Panama's negative list for the purposes of identifying the sectors covered by Argentina's specific commitments on national 
treatment under mode 1. For the same reasons that we explained in relation to measure 3, we 
a l s o  c o n s i d e r  t h a t  P a n a m a ' s  c l a i m s  u n d e r  A r t i c l e  X V I I  o f  t h e  G A T S  d o  n o t  e x t e n d  t o  t h e  telecommunications commitments contained in Supplement 1 to Argentina's Schedule. 
7.469.  In the light of the foregoing, with regard to mode 1, we conclude that the relevant services 
for which Argentina made a full national treatment commitment include all the services for which 
Argentina inscribed the word "None" for that mode. These include all the service sectors inscribed in Argentina's Schedule of Commitments in document GATS/SC/4
634, except for the 
telecommunications services included in Supplement 1 to that Schedule635 and the following 
sectors: 
[L]ife, accident and health insurance services; non-life insurance services; acceptance 
of deposits and other repayable funds from the public; lending of all types including 
consumer credit, mortgage credit, factoring and financing of commercial transactions; financial leasing services with a purchase option; payment and money transmission services; guarantees and commitments; trading on own account or for clients in 
money market instruments (cheques, bills, certificates of deposit, etc.), foreign 
exchange, derivative products, including, but not limited to, futures and options, exchange rate and interest rate instrument s, such as swaps, forward interest-rate 
agreements, etc., transferable securities and other negotiable instruments and 
                                               
626 See Appendix 1 to this Report. 
627 See footnote 622 above. 
628 Panama's second written submission, footnote 420. 
629 Panama's first written submission, para. 4.315. 
630 Argentina's first written submission, para. 142. 
631 Panama's second written submission, para. 2.538. 
632 Panama's second written submission, para. 2.538. 
633 Panama's first written submission, para. 4.315 and footnote 305. 
634 See Appendix 1 to this Report. 
635 See footnote 622 above. WT/DS453/R 
 
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  financial assets, including bullion; participation in issues of all kinds of securities, 
including under-writing and placement as agent (whether publicly or privately) and provision of services related to such issues; money broking; asset management; settlement and clearing services for financial assets; new financial services.
636 
(d) Conclusion  
7.470.  In the light of the foregoing, the Panel concludes that Panama has proved that Argentina 
made specific commitments in the services and modes cited by Panama in respect of measures 2, 
3 and 4. 
7.471.  We continue our analysis with an exam ination of whether Panama has complied with the 
second requirement under the legal standard for Article XVII of the GATS, i.e., whether Panama has proved that measures 2, 3 and 4 "affect trade in services" in the sectors and modes 
concerned. 
7.3.4.2.3.2  Second requirement: Whether me asures 2, 3 and 4 "affect […] the supply of 
services" in the sectors and modes concerned 
7.472.  Panama claims that measures 2, 3 and 4 affect the supply of services under mode 1. 
Panama also argues that measure 3 affects the supply of services under mode 2 as well.
637 As we 
explained earlier, Argentina did not submit separate  additional arguments under Article XVII of the 
GATS with respect to whether measures 2, 3 and 4 "affect" the supply of services within the 
meaning of that provision. We recall, however, that Argentina has contended that Panama has failed to make a prima facie  case to show that the GATS applies to the eight measures at issue 
within the meaning of Article I:1 of the GATS.
638 
7.473.  We must therefore determine whether, as claimed by Panama, measures 2, 3 and 4 "affect 
the supply of services" in the sectors and modes conc erned. To resolve this issue, we consider it 
relevant to refer to our findings on the applicatio n of the GATS to the eight measures at issue. In 
this connection, we recall that in section 7.3.1.2 of our Report, we found that Panama had proved 
that there is "trade in services" and that the eight measures at issue in this dispute "affect" trade in services within the meaning of Article I:1 of the GATS. 
7.474.  Although under Article I:1 of the GATS we  examined whether the eight measures at issue 
(and thus measures 2, 3 and 4) affect "trade" in services, whereas our analysis under Article XVII of the GATS focuses on whether measures 2, 3 and 4 affect the "supply" of services, we consider these findings to be relevant because the concepts of "trade in services" and "supply of services" 
are closely linked. Indeed, Article I of the GATS en titled "Scope and Definition" in its paragraph 2 
defines the concept of "trade in services" as the "supply of a service" through one of the four modes of supply identified in that provision. If we have found that measures 2, 3 and 4 "affect 
trade in services", therefore, the logical conclusion is that they also affect the "supply of services" 
in the sectors and modes concerned. 
7.475.  This is also the position expressed by  the parties, which agree that the concept of 
measures "affect[ing] the supply of services" within the meaning of Article XVII of the GATS refers 
to the trade in services defined in Article I:1 of the GATS.
639 
7.476.  Consequently, having found in section 7.3.1.2 above that Panama has proved that the 
eight measures at issue "affect[…] trade in services" within the meaning of Article  I:1 of the GATS, 
we conclude that Panama has proved that measures 2, 3 and 4 "affect[…] the supply of services" 
within the meaning of Article XVII of the GATS. 
7.477.  We continue our analysis by examining whether Panama has complied with the third 
requirement under the legal standard of Article XVII of the GATS, i.e., whether Panama has proved 
that measures 2, 3 and 4 do not accord to se rvices or service suppliers of non-cooperative 
                                               
636 Panama's first written submission, footnote 252; and second written submission, footnote 420. 
637 Panama's first written submission, paras. 4.154,  4.255 and 4.316; and second written submission, 
paras. 2.304, 2,434 and 2.539. 
638 Argentina's first written submission, paras. 139-146; and second written submission, para. 14. 
639 Responses of the parties to Panel question No. 40. WT/DS453/R 
 
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  countries treatment no less favourable than that which Argentina accords to its own like services 
and like service suppliers. 
7.3.4.2.3.3  Third requirement: Whether measur es 2, 3 and 4 do not accord to services 
and service suppliers of non-cooperative co untries treatment no less favourable than 
that which Argentina accords to its ow n like services and service suppliers 
7.478.  Panama claims that measures 2, 3 and 4 accord less favourable treatment to services and 
service suppliers of non-cooperative countries in comparison with the treatment accorded to 
Argentine like services and service suppliers. According to Panama, in the three cases the 
presumption of likeness between Argentine services and/or service suppliers and foreign services and/or service suppliers has been confirmed because the only basis for differential treatment is the origin of the service and/or service supplier. Pana ma contends that measure 2 places a heavier tax 
burden on consumers of the service, which enta ils a disincentive to contracting with service 
suppliers from non-cooperative countries, thus modifying the conditions of competition to the detriment of services and service suppliers of non-cooperative countries. Panama also considers 
that measure 3 implies administrative requirements, economic burdens and significant tax 
contingencies which alter the conditions of competition to the detriment of services and service suppliers of non-cooperative countries.
640 Lastly, Panama argues that measure 4 creates additional 
accounting problems for Argentine taxpayers, depriving services and service suppliers of non-
cooperative countries of opportunities to compete and, impairing equality of opportunities to compete between them and domestic services and service suppliers.
641 
7.479.  We recall that Argentina put forward its arguments on the "likeness" of services and 
service suppliers and "treatment no less favourable" collectively in relation to Articles II and XVII 
of the GATS. We shall therefore refer to section 7.3.2.1.2 above, in which Argentina's arguments concerning Article II:1 of the GATS are set out. 
7.480.  In order to examine this third requirement,  we must determine whether, as is claimed by 
Panama, measures 2, 3 and 4 do not accord services or service suppliers of non-cooperative countries "treatment no less favourable" than that accorded to Argentine "like services and service 
suppliers. We shall start with the question of "likene ss" given that, if they are not like, there will be 
no need to examine whether Argentina accords se rvices and service suppliers of non-cooperative 
countries "treatment no less favourable" than that accorded to Argentine like services and service suppliers. 
(a) Whether the services and service supp liers of non-cooperative countries are 
like Argentine services and service suppliers  
7.481.  We note that both Panama and Argentina consider that their arguments on likeness 
developed under Article II are also applicable under Article XVII of the GATS. For example, 
Panama maintains that domestic services and service suppliers are like those of non-cooperative countries because the only basis for differential treatment is the origin of the service and/or 
service supplier.
642 Argentina, for its part, argues that the regulatory differences between the 
service suppliers being compared are relevant for determining their likeness to the extent that they affect the way suppliers operate in the market.
643 
7.482.  We recall that we considered the question of the likeness of services and service suppliers 
when we examined Panama's claims under Article II:1 of the GATS.644 On that occasion, we 
concluded that the services and service suppliers of cooperative countries were like the services 
and service suppliers of non-cooperative countries.645 
                                               
640 Panama's first written submission, paras. 4-160-4.169, 4.257 and 4.258; and second written 
submission, paras. 2.306 and 2.436. 
641 Panama's first written submission, paras. 4.317 and 4.318; and second written submission, 
para. 2.541 (referring to its response to Panel question No. 42). 
642 Panama's first written submission, paras. 4.157,  4.256 and 4.317; and second written submission, 
paras. 2.305, 2.435 and 2.540. 
643 Argentina's response to Panel question No. 31. 
644 See section 7.3.2.2.3.3 above. 
645 See paras. 7.185-7.186 above. WT/DS453/R 
 
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  7.483.  Unlike our examination under Article II:1 of the GATS, in which the services and service 
suppliers being compared were those of cooperative and non-cooperative countries, in the case of Article XVII of the GATS, the appropriate comparison for determining likeness must be made between Argentine services and service suppliers , on the one hand, and services and service 
suppliers of non-cooperative countries on the other. Panama asks us to confine our comparison to 
services and service suppliers of non-cooperative countries and Argentine like services and like service suppliers.
646 As we indicate below, Argentina, for its part, does not appear to object to this 
comparison. 
7.484.  We note that Article XVII of the GATS obliges Members, in this case, Argentina, to accord 
treatment no less favourable to the services and service suppliers "of any other Member". This comparison does not therefore require a comparison of Argentine services and service suppliers 
with the universe of services and service suppliers of all other WTO Members. 
7.485.  We also note that, for the purposes of this dispute, there are two relevant groups of 
Members as a result of applying Decree No. 589/2013, namely, cooperative and non-cooperative 
countries. Panama's claims focus on the allegedly less favourable treatment which Argentina 
accords solely to services and service suppliers of non-cooperative countries. 
7.486.  We likewise note that the treatment provided for in the relevant Argentine legislation is the 
same for transactions by Argentine taxpayers with Argentine service suppliers and with service 
suppliers of cooperative countries. This is because, in both cases, Argentina is able to access tax information on the service suppliers concerned. Consequently, the rules described in sections 2.4.2.2 and 2.4.2.4 as applying to cooperative co untries in respect of presumption of unjustified 
increase in wealth and the allocation of expenditure are those applicable to Argentine taxpayers 
with regard to Argentine services and service suppliers. As to the valuation of transactions, there is no difference in treatment for transactions between Argentine taxpayers and Argentine service 
suppliers or those from cooperative countries, provided that they are consistent with normal 
arm's-length market practices. In that case, they would not be subject to the special price 
determination requirements provided for in Article 15 of the LIG. In this connection, we note that 
the treatment provided for in Argentina's legislation with regard to the valuation of transactions is 
the same for transactions by Argentine taxpayers with Argentine service suppliers and with service suppliers of cooperative countries. 
7.487.  We thus consider that, for the purposes of comparison under Article XVII of the GATS, 
Argentine services and service suppliers are subjec t to the same treatment accorded by Argentine 
legislation to services and service suppliers from cooperative countries. We understand that Argentina also agrees that its services and service suppliers would be comparable to services and 
service suppliers of cooperative countries as it relates its arguments under Article XVII of the GATS 
to its arguments under Article II:1, where we sa w that the comparison was between services and 
service suppliers of cooperative countries and those of non-cooperative countries.
647 In connection 
with Panama's claims under Article XVII, Argentin a also refers to an argument developed under 
Article XIV(c) of the GATS. Argentina refers in particular to the difference between Argentine domestic services and service suppliers and services and service suppliers of non-cooperative countries as regards access to information and the exercise of control and supervision by the tax 
authorities in enforcing Argentina's tax laws and regulations. The resulting difference in regulatory 
treatment finds expression in a similar manner to the difference in treatment governing services and service suppliers of cooperative and non-cooperative countries for the same purposes.
648 
7.488.  In the light of the foregoing, having found that services and service suppliers of 
cooperative countries are like those of non-cooperative countries, we consider that our likeness finding under Article II:1 of the GATS can be transposed to the scope of Article XVII of the GATS. 
                                               
646 Panama's first written submission, paras. 5.1(b)(ii), 5.1(c)(ii) y 5.1(d)(ii); and second written 
submission, paras. 3.1(b)(ii), 3.1(c)(ii) y 3.1(d)(ii). 
647 For Argentina, "[t]he categories  of services and service supplie rs are those that originate in 
jurisdictions which adhere to the international standa rds of transparency and effective exchange of tax 
information, and those that do not". See Ar gentina's first written submission, p. 69. 
648 Argentina's first written submission, paras. 345-351. WT/DS453/R 
 
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  7.489.  We thus conclude that Argentine services and service suppliers are like the services and 
service suppliers of non-cooperative countries for the purposes of our analysis of Article XVII of the GATS. 
(b) Whether the treatment accorded to services and service suppliers of 
non-cooperative countries is "treatment no  less favourable" than that accorded to 
Argentine like services and service suppliers  
7.490.  Having made a finding of likeness between the relevant services and service suppliers, we 
must now examine whether measures 2, 3 and 4 accord to services and service suppliers of 
non-cooperative countries "treatment no less favourable" than that accorded to Argentine like services and service suppliers. 
7.491.  We recall that Article XVII:3 of the GATS provides that: 
Formally identical or formally different treatment shall be considered to be less 
favourable if it modifies the conditions of competition in favour of services or service suppliers of the Member compared to like services or service suppliers of any other 
Member. 
7.492.  Accordingly, "[t]his treatment is to be asse ssed in terms of the 'conditions of competition' 
between like services and services suppliers".
649 
7.493.  We note that, like Article II of the GATS, Article XVII of the GATS refers not only to "like 
services" but also to "like service suppliers". For the reasons explained above in connection with our analysis of "treatment no less favourable" under Article II of the GATS
650, we understand that 
the reference to service suppliers may also lead the interpreter, depending on the specific 
circumstances of each dispute, to take other aspects into account when interpreting "treatment no 
less favourable" in the context of Article XVII, for example, the relevant regulatory aspects 
concerning service suppliers which have an impact on the conditions of competition. Consideration 
of these regulatory aspects could, depending on th e case, mean that certain regulatory distinctions 
between service suppliers established by a Member do not necessarily constitute "treatment less favourable" within the meaning of Article XVII of the GATS. 
7.494.  On the basis of the provisions of Arti cle XVII:3 of the GATS and in the light of our 
interpretation of the concept "treatment no le ss favourable" developed under Article II of the 
GATS
651, we shall now determine whether measures 2, 3 and 4 stipulate different treatment for 
services and service suppliers of non-cooperative countries compared to that accorded to 
Argentine like services and service suppliers. Subsequently, we shall examine whether this 
treatment is less favourable for like services and service suppliers of non-cooperative countries. In this connection, it is our understanding that, in order to determine whether treatment is less 
favourable, it must be assessed whether the measure modifies the conditions of competition in 
favour of Argentine services or service suppliers in comparison with like services or like service suppliers of non-cooperative countries. Moreover, we  consider that, in the present case, such an 
assessment has to take into account regulatory aspects concerning the services and service 
suppliers that might affect the conditions of competition. We refer, in particular, to the possibility for Argentina to access tax information on the relevant service suppliers. 
(i) Whether the treatment accorded to services and service suppliers of 
non-cooperative countries is different to that accorded to Argentine like 
services and service suppliers 
7.495.  As regards whether measures 2, 3 and 4 accord different treatment to services and service 
suppliers from non-cooperative countries in comparison with that accorded to Argentine like 
                                               
649 Panel Report, China – Publications and Audiovisual Products , para. 7.978. See also Panel Report, 
China – Electronic Payment Services , para. 7.687. 
650 See section 7.3.2.2.3.4 above. 
651 We recall that the Appellate Body exercised caution concerning the direct transposition to Article II of 
the GATS of all interpretations develo ped under Article XVII. Ne vertheless, we consider the context provided by 
Article II:1 to be useful as the Appellate Body has tr ansposed interpretations deve loped under Article XVII to 
Article II of the GATS. See Appellate Body Report, EC – Bananas III, para. 231. WT/DS453/R 
 
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  services and service suppliers, we consider that our findings of different treatment under 
Article II:1 of the GATS also apply under Article XVII of the GATS. As we have already indicated, the reason for this is that the treatment accorded  by Argentina to Argentine services and service 
suppliers is the same as that accorded to services and service suppliers of cooperative countries. 
We recall our conclusions in this regard below. 
7.496.  As regards measure 2, in section 7.3.2.2.3.4 above
652, we concluded that Argentina 
accords different treatment to like services  and service suppliers of cooperative and 
non-cooperative countries inasmuch as the entry of funds from one or the other country will have 
different consequences for Argentine taxpayers when determining the tax base for gains tax. Whereas when funds enter from cooperative countries, the AFIP will apply the general rule of self-assessment of the taxable subject matter, only resorting to ex officio determination when the 
taxpayer has not submitted a sworn declaration or wh en this is challengeable; in the case of funds 
entering from non-cooperative countries, the AFIP will automatically determine the taxable subject 
matter ex officio, applying the presumption of unjustified increase in wealth. Likewise, we 
concluded that the fact that this presumption may be rebutted by the taxpayer does not affect the 
fact that the treatment Argentina accords to like services and service suppliers of cooperative and 
non-cooperative countries is different. In the case before us, when an Argentine taxpayer receives 
funds from an Argentine service supplier, the AFIP will apply the general rule of self-assessment of 
the taxable subject matter (as in the case of the entry of funds from cooperative countries), resorting to ex officio assessment only if the taxpayer has not presented a sworn declaration or this is challengeable. 
7.497.  With regard to measure 3, in section 7.3.2.2.3.4 above
653, we concluded that Argentina 
accords different treatment to like services  and service suppliers of cooperative and 
non-cooperative countries inasmuch as the rules in Article 15 of the LIG are always applied, 
provided that one of the parties is from a non- cooperative country, whereas these rules will only 
be applied to transactions with service suppliers from cooperative countries if the terms and conditions of such transactions are not in line with normal arm's-length market practices. The rule 
does not thus envisage that transactions between Argentine taxpayers and persons from 
non-cooperative countries might be in line with normal arm's-length market practices, and presumes in every case that they are related. On the other hand, in transactions between Argentine taxpayers and Argentine service suppliers, it  will be considered that these are consistent 
with normal arm's-length market practices. 
7.498.  As far as measure 4 is concerned, in section 7.3.2.2.3.4 above
654, we concluded that 
Argentina accords different treatment to like services and service suppliers from cooperative and 
non-cooperative countries because, although it is true that the payment received rule is not 
exclusively restricted to the allocation of expe nses by the Argentine taxpayer, which constitute 
income from an Argentine source for persons located, incorporated, based or domiciled in 
non-cooperative countries655, we note differences of criterion in the Argentine rule. This is because 
Argentine taxpayers are not permitted to allocate expenses which constitute income for persons in non-cooperative countries on the basis of the accrual rule, irrespective of whether the Argentine 
taxpayer and the person receiving the income of Argentine source are related. However, in cases 
of allocation of expenses constituting income for persons in cooperative countries, the Argentine 
taxpayer may apply the accrual rule, provided that there is no relationship between the taxpayer 
and the foreign person to which the income accrues. Likewise, when an Argentine taxpayer 
allocates expenses which constitute income for Argentine persons (service suppliers), the taxpayer 
may apply the accrual rule, provided that there is no rela tionship between the taxpayer and the 
person receiving the income. 
7.499.  We therefore conclude that measures 2, 3 and 4 establish different treatment for services 
and service suppliers of non-cooperative countries in comparison with that accorded to Argentine like services and service suppliers. 
                                               
652 See paras. 7.240-7.243 above. 
653 See paras. 7.244-7.248 above. 
654 See paras. 7.249-7.252 above. 
655 For example, Article 18 of the LIG itself, in its last paragraph, provides that the payment made rule 
shall also apply to cases of "outlays by local companies which result in profits of Argentine source for foreign 
persons or entities with which these companies are related". See the Gains Tax Law, (Exhibits PAN-4 / ARG-42). WT/DS453/R 
 
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  (ii) Whether the treatment accorded to  services and service suppliers of 
non-cooperative countries is "treatment no less favourable" than that accorded to 
Argentine like services and service suppliers 
7.500.  Concerning whether the treatment accorded to services and service suppliers of 
non-cooperative countries is "treatment no less favourable" than that accorded to Argentine like 
services and service suppliers, we also consider  that there are aspects of the analysis we 
developed under Article II:1 which are applicable under Article XVII of the GATS. As we indicated 
when addressing the question of different treatm ent, the reason is that Argentina accords the 
same treatment to Argentine services and service suppliers as that accorded to those from cooperative countries. We recall in this connection that the treatment in question "is to be assessed in terms of the 'conditions of competit ion' between like services and service suppliers".
656 
7.501.  In this connection, it is useful to recall that, in the case of measure 2, our preliminary 
conclusion of treatment less favourable under Article II:1 results from the fact that Argentine taxpayers who contract services with suppliers of non-cooperative countries and who wish to 
justify the entry of funds earned from obtaining su ch services have to bear an additional burden, 
namely to rebut the presumption of unjustified increase in wealth.
657 This burden is not imposed 
automatically when the transaction is conducte d between Argentine taxpayers, i.e., when an 
Argentine taxpayer receives funds from an Argentine service supplier.658 
7.502.  In the case of measure 3, we consider that application of the transfer pricing regime for 
the valuation of transactions, irrespective of whether or not there is a relationship between the parties to the transaction, implies higher costs for those Argentine taxpayers that engage in 
transactions with service suppliers of non-cooperative countries. Such costs do not have to be 
incurred if the transaction is between an Argentine taxpayer and an Argentine service supplier.
659 
7.503.  In the case of measure 4, we consider that the time difference in the deduction of 
expenditure, which has an effect in terms of redu ced value of the expenditure deducted, as well as 
the possible additional costs caused by more complex accounting as a result of simultaneously applying two rules for the allocation of expenditure, would lead us to the preliminary conclusion 
that the treatment accorded to services and serv ice suppliers of non-cooperative countries is less 
favourable than that accorded to Argentine like services and service suppliers, inasmuch as, in the latter case, Argentine taxpayers do not have to incur those additional costs when obtaining services from Argentine service suppliers.
660 
7.504.  Referring back to our findings in connection with Article II:1 of the GATS, therefore, we 
consider on a preliminary basis that measures 2, 3 and 4 do not accord treatment no less favourable to services and service suppliers of non-cooperative countries in comparison with that 
accorded to Argentine like services and service suppliers. 
7.505.  As in our analysis under Article II:1 of the GATS, we also consider that there is one 
important factor that cannot be ignored in any analysis of no less favourable treatment under 
Article XVII of the GATS and which has a direct im pact on the supply of services in the Argentine 
market and may modify the conditions of competition in that market. This factor is the regulatory framework which allows the Argentine authorities access to tax information on foreign service 
                                               
656 Panel Report, China – Publications and Audiovisual Products , para. 7.978. See also Panel Report, 
China – Electronic Payment Services , para. 7.687. 
657 See para. 7.300 above. 
658 We recall that there is a presumption concerning unjustified increases in wealth which the AFIP may 
apply in order to estimate the taxable subject matter ex officio in cases of transactions between Argentine taxpayers or between an Argentine taxpayer and a service supplier from a cooperative country. This 
presumption is provided for in Article 18(f)  of the LPT. See section 2.4.2.2 above. 
659 We point out that Article 33 of the LPT on verifica tion and supervision empowers the AFIP to require 
taxpayers to keep supporting documents needed for veri fication of the taxpayer's tax situation, such as 
accounts ledgers or special registers,  vouchers and any other documents concerning the taxpayers' operations, 
etc. This Article also provides that all accounting entr ies must be backed up by the corresponding proof. See 
the Law on Tax Procedure, (Exhibits PAN-9 / ARG-45). 
660 See para. 7.318 above. We point out that, although the accrual rule is the general rule for allocating 
income and expenditure and applies to expenditure under transactions between Argentine taxpayers or 
between an Argentine taxpayer and a person from a cooper ative country, Article 18 of the LIG provides that, in 
certain cases, expenditure is not allocated to the fiscal year in which it was accrued. WT/DS453/R 
 
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  suppliers. Unlike our analysis under Article II:1, which, by its nature, called for a comparison of 
MFN treatment, there is an important aspect to be examined in relation to measures 2, 3 and 4 (and the other measures challenged by Panama) under Article II:1 but which we do not consider applies to examination of "treatment no less favourable" under Article XVII. We refer to the 
distortions caused by the design and operation of measures 2, 3 and 4 pursuant to Decree 
No. 589/2013 with regard to the granting of cooperative status to jurisdictions which have not signed a tax information exchange agreement and the discretionary authority governing the 
updating of the list of cooperative countries. 
7.506.  We recall in this connection that Argentina considers that according service suppliers 
different treatment is a direct result of access or no access to tax information.
661 What we 
observed in our analysis under Article II:1 of the GATS is that countries in a similar situation as 
regards Argentina's access to tax information on their service suppliers do not fall into the same 
category. For example, Panama and Hong Kong (China) have not signed a tax information exchange agreement with Argentina, and yet Panama is considered cooperative and Hong Kong 
(China) is considered non-cooperative. We also observed that countries classified in the same 
category find themselves in different situations as far as Argentina's access to tax information is 
concerned. By way of example, we mentioned th e case of Panama and Germany. Both countries 
appear on the list of cooperative countries, although Germany has signed a tax information 
exchange agreement with Argentina and Panama has not. 
7.507.  We do not see that Decree No. 589/2013 cr eates such distortions when comparing service 
suppliers from cooperative countries and Argentine service suppliers. In this case, Argentina has 
access to tax information on its taxpayers, which include its service suppliers, whereas it has no 
access to tax information on suppliers from non-cooperative countries. 
7.508.  In any event, after concluding that th e distortions in the design and operation of 
measures 2, 3 and 4 noted under Article II:1 of the GATS are not relevant in the context of 
Article XVII of the GATS, we consider it appropriat e to pursue our analysis in order to ascertain 
whether our preliminary conclusions on less favourable treatment are confirmed after examining 
the impact on competitive conditions of the possibility for Argentina to access tax information on 
service suppliers. 
7.509.  The first point to be highlighted in this respect is that both Panama and Argentina 
acknowledge that lack of tax transparency (caused by failure to exchange tax information) has an 
impact on the conditions of competition in which Argentine service suppliers and service suppliers 
of non-cooperative countries operate in the Argentine market. Indeed, in its commitment to accepting the principles of "Transparency" and "Effective exchange of tax information", Panama 
states that "it considers essential that implemen tation of the initiative proposed by the OECD 
guarantee fairness and non-discrimination among all countries and jurisdictions … with which the Republic of Panama competes substantially on international markets in supplying international 
services, especially financial and business services".
662 Argentina, for its part, refers in particular 
to the fact that measures 2, 3 and 4, like the other measures at issue, are "essential tools for equalizing the conditions of competition on the international market for financial and other services".
663 This idea of equalizing the conditions of competition is also mentioned by Panama in a 
letter to the Secretary-General of the OECD, which st ates that "the principles of transparency and 
the exchange of effective information … should be developed within parameters of fairness and non-discrimination; in other words, a 'level playing field'".
664 We find support for Argentina's 
statement concerning the importance of access to tax information in order to equalize the 
conditions of competition in many documents of the G-20 and the OECD. For example, in 2000, we 
                                               
661 See para. 7.140 above. Although Argentina puts this  argument forward in relation to the comparison 
between service suppliers from cooperative and non-cooper ative countries, we consider that the reason given 
to justify the different treatment (access to tax info rmation) is equally valid for the comparison between 
Argentine service suppliers and those from non-cooper ative countries. See Argentina's second written 
submission, para. 76. See also first written submissi on, para. 125 and responses to Panel questions Nos. 49 
and 71. 
662 Note from Panama's Minister of the Economy and Finance to the Secretary-General of the OECD, 
15 April 2002, (Exhibit ARG-8), para. 4. 
663 Argentina's first written submission, para. 10. 
664 Note from Panama's Minister of the Economy and Finance to the Secretary-General of the OECD, 
15 April 2002, (Exhibit ARG-8), last paragraph. WT/DS453/R 
 
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  see that the OECD emphasized the role of defensive measures in neutralizing the competitive 
advantages derived from the lack of transpar ency in certain non-cooperative jurisdictions.665 
7.510.  In this connection, in a 2004 report, the Global Forum explained that the objective of the 
global level playing field was to achieve high  standards of transparency and exchange of 
information so as to allow fair and equitable competition among all countries: 
In developing proposals, the members of the Sub-Group [delegated to make 
recommendations to the Global Forum on the occasion of the Berlin Global Forum in 
June 2004] were guided by the objective of the global level playing field: to achieve 
high standards of transparency and information exchange in a way that is fair, equitable and permits fair competition between all countries, large and small, OECD and non-OECD.
666 
7.511.  According to the OECD, in its 2009 document entitled " Towards a level playing field" , all 
countries should comply with these standards so that competition among them takes place on the basis of legitimate commercial considerations rather  than on the basis of lack of transparency or 
effective exchange of information: 
All countries, regardless of their tax systems, should meet such standards so that 
competition takes place on the basis of legitimate commercial considerations rather 
than on the basis of lack of transparency  or the lack of effective exchange of 
information. A decade on since the Global Forum's establishment, the goal of a level playing field is both closer and more relevant than ever.
667 
7.512.  Another more recent example can be found in a 2013 report on erosion of the tax base 
and the transfer of company profits,  in which the OECD explains that: 
Every jurisdiction is free to set up its corporate tax system as it chooses. States have 
the sovereignty to implement tax measures that raise revenues to pay for the 
expenditures they deem necessary. An impo rtant challenge relates to the need to 
ensure that tax does not produce unintended and distortive effects on cross-border trade and investment nor that it distorts competition and investment within each 
country by disadvantaging domestic player s. In a globalised world where economies 
are increasingly integrated, domestic tax systems designed in isolation are often not aligned with each other, thus creating r oom for mismatches. As already mentioned, 
these mismatches may result in double taxation and may also result in double 
non-taxation. In other words, these mismatches may in effect make income disappear 
for tax purposes. This leads to a reduction of the overall tax paid by all parties involved as a whole. Although it is often difficult to determine which of the countries 
involved has lost tax revenue, it is clear that collectively the countries concerned lose 
tax revenue. Further, this undermines competition , as some businesses, such as those 
which operate cross-border and have access to  sophisticated tax expertise, may profit 
from these opportunities and have unintended competitive advantages  compared with 
other business, such as small and medium-sized enterprises, that operate mostly at the domestic level.
668 (emphasis added) 
                                               
665 Argentina's first written submission, paras.  40 and 41 (referring to the OECD Report, Towards Global 
Tax Co-operation - Report to the 2000 Ministerial Coun cil Meeting and Recommendations by the Committee on 
Fiscal Affairs, OECD 2000,  (Exhibit ARG-6), pp. 5 and 6, available at 
http://www.oecd.org/tax/transparency/44430257.pdf  (exhibit provided in English; Spanish text available at 
http://www.ief.es/recursos/publica ciones/libros/informes_OCDE.aspx ). 
666 International Trade and Inve stment Organization (ITIO), Leveling the playing field, OECD Global Tax 
Forum, Melbourne, 15-16 November 2005  (referring to para. 3 of the Repo rt, which was adopted at the Berlin 
Global Forum in June 2004), (Exhibit ARG-94), p. 4. 
667 OECD, Tax Cooperation 2009 – Towards a level playing field, 2009, ( Exhibit ARG-41), p. 9 (exhibit 
provided in English; Spanish translation by the WTO Secretariat). 
668 OECD, Addressing base erosion and profit shifting, (Exhibit ARG-22), p. 39, available at 
http://www.oecd.org/tax/addressing-base-erosion-and-profit-shifting-9789264192744-en.htm  (exhibit 
provided in English; Spanish text available at: http://www.oecd-ilibrary.org/taxa tion/abordando-la-erosion-de-
la-base-imponible-y-la-deslocalizacion-de-beneficios_9789264201224-es ). WT/DS453/R 
 
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  7.513.  Another key concept linking the regulatory  element we are examining under "treatment no 
less favourable" to the conditions of competition is the expression "harmful tax competition ". In 
our view, the use of this expression in the competen t international fora (in the OECD it has been in 
use since the mid-1990s669) highlights the obvious link between access to tax information (tax 
transparency) and the conditions of competition. 
7.514.  Thus, a central issue in this dispute is whether the exchange of tax information between 
Argentina and non-cooperative jurisdictions constitutes a regulatory aspect that modifies the 
conditions of competition on the Argentine market in such a way that it converts different and, in 
principle, less favourable treatment into "treatment no less favourable". In other words, whether the exchange of tax information means that measur es 2, 3 and 4 do not modify the conditions of 
competition in favour of Argentine services and service suppliers in comparison with like services 
and like service suppliers of non-cooperative countries. 
7.515.  It is our understanding that measures 2, 3 and 4 are intended to "level a playing field" 
which, as confirmed by the OECD and the G-20, is "not level" because of the lack of tax 
transparency caused by the absence of exchange of tax information. From the pronouncements of 
the competent international fora, we understand that what measures 2, 3 and 4 do, rather than giving Argentine services and service suppliers an  advantage, is to neutralize an "unintended 
competitive advantage"
670 enjoyed by non-cooperative jurisdictions owing to the lack of exchange 
of tax information with Argentina on their suppliers. This advantage is not available to Argentine service suppliers, whose tax information can be obtained by the Argentine authorities. 
7.516.  In connection with the idea of "competitive advantage" expressed in the preceding 
paragraph, we note that the text of Article XVII:3 of the GATS states that, in order for "treatment 
no less favourable" to exist, the measure must not modify the conditions of competition in favour 
of the  services or service suppliers of the Member (in this case, Argentina). Previously, when 
interpreting the expression "treatment no less favourable" under Article II:1 of the GATS, we 
examined the ordinary meaning of the word " favorable " (favourable) and found that "favorable"  
means " que favorece " (which favours)
671, and that " favorecer" has been defined as "[ d]ar o hacer 
un favor " (give or do a favour), "favour"  (favour) being understood to mean " honra, beneficio, 
gracia " [honour, benefit or kindness].672 We therefore understand that Article XVII:3 of the GATS 
refers to any modification of the conditions of competition which "favours" Argentine services or service suppliers or which consists of any type of  "favour" for such services and service suppliers. 
In our view, taking into account the implications for the conditions of competition resulting from 
the absence of tax transparency referred to in numerous statements and reports by the OECD and 
the G-20, we do not consider that measures 2, 3 and 4 "favour" or grant any type of "favour" to 
Argentine services and service suppliers in comparison with like services and like service suppliers 
of non-cooperative countries, as explained below. 
7.517.  As we explained above, measure 2 consists  of the presumption of unjustified increase in 
wealth applicable to any entry of funds – for the benefit of Argentine taxpayers – from 
non-cooperative countries in the context of an ex officio determination of the taxable subject matter by the AFIP for the purpose of gains tax.
673 This presumption may be rebutted provided 
that "it is conclusively proved that [the entries of funds] originated from activities actually carried 
out by the taxpayer or by a third party in those countries or from placements of duly declared 
funds". We do not see how a presumption that can be rebutted by proving that the transaction effectively took place can modify the conditions of competition in favour of Argentine services and 
service suppliers because Argentine taxpayers are ab le to free themselves of this burden. We also 
recall that, in Article 18(f) of the LPT, there is a presumption of unjustified increase in wealth 
                                               
669 OECD, Harmful Tax Competition  – An Emerging Global Issue , 1998, (Exhibit ARG-5). 
670 Term used by the OECD in its Report entitled Addressing base erosion and profit shifting, 
(Exhibit ARG-22), p. 39, available at http://www.oecd.org/tax /addressing-base-erosio n-and-profit-shifting-
9789264192744-en.htm  (exhibit provided in English; Spanish text available at: http://www.oecd-
ilibrary.org/taxation/abordando-la-erosion-de-la-base-imponible-y-la-deslocalizacion-de-
beneficios_9789264201224-es ) 
671 Diccionario de la Lengua Española , 23rd edition, Real Academia Española  (Espasa Calpe, 2014), 
Vol. I, p. 1015. 
672 Diccionario de la Lengua Española , 23rd edition, Real Academia Española  (Espasa Calpe, 2014), 
Vol. I, p. 1015. 
673 Argentina applies this measure pursuant to the unn umbered article added afte r Article 18 of the LPT, 
(Exhibits PAN-9 / ARG-45). WT/DS453/R 
 
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  which applies to Argentine taxpayers working with Argentine suppliers. Accordingly, the concept of 
unjustified increase in wealth is not a tool used exclusively by the Argentine authorities in respect of non-cooperative jurisdictions, but is in the form of an instrument used to respond to the existence of certain situations which the Argentine authorities perceive to be a risk for the tax 
collection system, with the lack of tax transparency  being the trigger in the case of transactions 
between Argentine taxpayers and service suppliers of non-cooperative countries. It does not appear to us to be a measure that gives domestic service suppliers a competitive advantage. 
7.518.  In the case of measure 3 we do not think either that the application of a different method 
for valuing transactions (based on transfer prices) modifies the conditions of competition in favour 
of Argentine services and service suppliers.
674 First of all, because the objective of applying the 
transfer pricing regime to the valuation of transactions is to determine the market value of the 
transaction and not to distort it artificially to the benefit or detriment of one of the parties to the 
transaction. To this must be added the fact that  there are other situations in which the Argentine 
authorities perceive a risk to the tax collection system and prescribe application of this method to 
transactions involving Argentine suppliers and those from cooperative countries. In this 
connection, as a general rule, the first paragraph of Article 15 of the LIG provides that "[w]hen the type of operations or the organizational procedures of the companies make it impossible to 
determine exactly the income of Argent ine source, the FEDERAL PUBLIC REVENUE 
ADMINISTRATION, an autonomous body within the MINISTRY OF THE ECONOMY AND PUBLIC WORKS AND SERVICES may determine the net taxa ble income by using averages, indices or 
coefficients established for this purpose on the basis of the performance of independent companies 
engaged in the same or similar activities".
675 We thus see a response to a risk and not the granting 
of an advantage to domestic suppliers. 
7.519.  As regards measure 4, consisting of application of the payment received rule when 
allocating expenditure for transactions between Argentine taxpayers and persons of 
non-cooperative countries676, we have already indicated that in every case the Argentine taxpayer 
may deduct expenses, the main difference being the time at which the deduction is made. We do 
not therefore think that the measure results in modification of the conditions of competition in 
favour of Argentine services and service suppliers in comparison with those of non-cooperative 
countries since in both cases the deduction is made. The difference in treatment reflects the risk perceived by Argentina to its tax collection system as a result of the lack of tax transparency. 
7.520.  We find the context afforded by Article III of the GATT 1994 to be particularly relevant; it 
contains the same obligation provided for in Article XVII (national treatment). In Japan – Alcoholic 
Beverages II , the Appellate Body explained that "Article  III protects expectations … of the equal 
competitive relationship between imported and domestic products".
677 In Canada – Publications , 
the Appellate Body reiterated that "[t]he fundam ental purpose of Article III of the GATT 1994 is to 
ensure equality of competitive conditions between imported and like domestic products".678 We 
consider that, as is the case for Article III of th e GATT 1994, the objective of Article XVII of the 
GATS is to ensure equal conditions of competition between Argentine services and service suppliers and those of non-cooperative countries. 
7.521.  In our view, measures 2, 3 and 4 are desi gned precisely to guarantee that the competitive 
relationship between Argentine services and service suppliers and those of any other Member (in 
this case, non-cooperative countries) is on an equal footing. We agree with the opinion expressed in other international fora such as the OECD and the G-20 on the effect of harmful tax practices on 
the conditions of competition. It is precisely these effects on the conditions of competition caused 
by the lack of tax transparency which prompted these fora to envisage the adoption of defensive measures whose objective is not to place domestic services and service suppliers in a more 
advantageous position but rather to address risks caused by the lack of tax transparency in their 
respective markets. Consequently, we do not consider that measures 2, 3 and 4 modify the conditions of competition in favour of Argentine like services and service suppliers. 
                                               
674 Argentina applies this measure pursuant to Ar ticle 15.2 of the LIG, (Exhibits PAN-4 / ARG-42). 
675 Gains Tax Law, (Exhibits PAN-4 / ARG-42). 
676 Argentina applies this measure pursuant to the last paragraph of Article 18 of the LIG, 
(Exhibits PAN-4 / ARG-42). 
677 Appellate Body Report, Japan – Alcoholic Beverages II , p. 15. 
678 Appellate Body Report, Canada – Periodicals , p. 17. WT/DS453/R 
 
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  (c) Conclusion  
7.522.  In the light of the foregoing, the Panel concludes that Panama has not proved that 
measures 2, 3 and 4 do not accord "treatment no less favourable" to services and service suppliers of non-cooperative countries in comparison with that accorded to Argentine like services and 
service suppliers. 
7.3.4.2.4  Conclusion 7.523.  Having concluded, in the first place, that Panama has proved that Argentina made specific 
commitments on the services and modes cited by Pa nama in respect of measures 2, 3 and 4, we 
went on to conclude that Panama has proved that measures 2, 3 and 4 "affect[..] the supply of services" within the meaning of Article XVII of the GATS. 
7.524.  We have also concluded that Panama has proved that Argentine services and service 
suppliers are like services and service suppliers of non-cooperative countries for the purposes of 
our analysis of Article XVII of the GATS. Lastly, we have concluded that Panama has not proved that measures 2, 3 and 4 do not accord services and service suppliers of non-cooperative countries 
"treatment no less favourable" than that accorded to Argentine "like services and service 
suppliers". 
7.525.  In the light of the foregoing, we find th at measure 2 (presumption of unjustified increase 
in wealth), measure 3 (transaction valuation based on transfer prices) and measure 4 (payment 
received rule for the allocation of expenditure) are not inconsistent with Article XVII of the GATS 
because they accord to services and service supp liers of non-cooperative countries treatment no 
less favourable than the treatment accorded to Argentine like services or like service suppliers, in 
respect of the relevant services and modes on which Argentina undertook specific commitments. 
7.3.5  Argentina's defence under Article XIV(c) of the GATS 7.3.5.1  Main arguments of the parties 
7.3.5.1.1  Argentina 
7.526.  In the event that the Panel finds that six of the eight measures (measures 1 to 4, 7 and 8) 
are inconsistent with the GATS provisions cited by Panama, Argentina invokes the exception in 
Article XIV(c) of the GATS. 
7.527.  Specifically, Argentina contends that its defensive tax measures are "necessary to secure 
compliance" with Argentina's tax laws and regulations within the meaning of Article XIV(c) of the GATS, including the "prevention of deceptive and fraudulent practices" (subparagraph (i)) 
commonly associated with transactions with non-cooperative tax jurisdictions. Argentina maintains 
that it has followed the recommendations of the OECD's Global Forum in establishing a comprehensive regulatory framework to address the risks posed by harmful tax competition to the 
integrity and stability of its tax system. Argentina argues that measures such as the withholding 
tax on payments of interest or remuneration (measure 1), the presumption of unjustified increase in wealth (measure 2), transaction valuation based on transfer prices (measure 3), the payment 
received rule for the allocation of expendit ure (measure 4) and the requirements for the 
registration of branches (measure 7) are widely accepted in the Global Forum's initiative as appropriate regulatory responses to address the ha rmful effects of tax jurisdictions which do not 
cooperate in the collection of taxes and compliance with the tax laws of third parties.
679 
7.528.  In response to Panama's second written submission, Argentina argues that it is not obliged 
to prove that the measures in question refer to  "the prevention of deceptive and fraudulent 
practices" under Article XIV(c)(i) of the GATS beca use the list of measures in subparagraphs (i) to 
(iii) of Article XIV(c) is illustrative. Accordingly, in its opinion, any measure intended to secure 
                                               
679 Argentina's first written submission, paras. 244-248 (referring to OECD, Harmful Tax Competition – 
An Emerging Global Issue , OECD, 1998, (Exhibit ARG-5), and OECD, OECD's Project on Harmful Tax Practices, 
The 2004 Progress Report , (Exhibit ARG-9), available at http://www.oecd.org/tax/harmful/30901115.pdf 
(exhibit provided in English; Spanish text available at http://www.ief.es/recursos/publica ciones/libros/informes_OCDE.aspx ). WT/DS453/R 
 
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  compliance with laws and regulations consistent with the GATS may be justified pursuant to 
Article XIV(c), irrespective of whether or not it is covered by subparagraphs (i)-(iii).680 
7.529.  Argentina claims that in transactions with non-cooperative jurisdictions it is not possible for 
Argentina's authorities to determine who are the real  beneficiaries of the profits of entities located 
in those jurisdictions. Nor is it possible for the Argentine authorities to determine the real value of 
the transaction and independently to obtain access to any other information relevant to establishing whether a particular transaction involving the participation of such jurisdictions has 
been conducted for a legitimate purpose or whether it is fraudulent or deceptive in the sense that 
its only purpose is to evade taxes in Argentina. According to Argentina, similar risks do not arise in respect of transactions involving jurisdictions that have concluded information exchange agreements with Argentina's tax authorities because, in such cases, the AFIP has independent 
access to information on the beneficial owner of the legal persons located in the cooperative 
jurisdiction, as well as information enabling it to determine the transaction value of operations with such jurisdictions.
681 
7.530.  Argentina claims that all models for tax agreements, whether those of the United Nations 
or the OECD, include a provision enabling the tax authorities to exchange information. In Argentina's opinion, this is recognition that a country's ability to enforce its own tax laws is greater 
when there is effective exchange of information.
682 Argentina contends that a financial centre 
which decides not to adopt high standards of transparency and effective exchange of information should not be permitted to benefit from that decision.
683 
7.531.  Argentina claims that its defensive tax measures (measures 1, 2, 3, 4 and 7) were adopted 
in order to secure compliance with laws and regulations which are in themselves consistent with 
the GATS and are similar to the tax measures widely adopted by WTO Members. Argentina's 
legislation on the determination and imposition of income tax secures compliance with the Gains 
Tax Law (LIG). The additional information requirements for setting up branches of foreign 
companies in Buenos Aires secure compliance with Article 118.3 of the Law on Commercial Companies (LSC) and Article 188 of IGJ Resolution No. 7/2005.
684 The requirement of 
authorization for the repatriation of investment (measure 8) is designed to secure compliance with 
Articles 20, 20 bis and 21 of Law No. 25.246 on Concealment and Laundering of Money of Criminal 
Origin in Argentina.685 
7.532.  At the second meeting of the Panel, Argent ina reiterated that measures 1, 2, 3 and 4 are 
designed to secure compliance with the LIG in the case of income which Argentina has determined 
to be taxable. Argentina argues that Articles 1,  2, 5, 17, 80, 91, 92, 127, 129 and 130 of the LIG 
establish rules which determine the earnings subject to taxation in Argentina, and Argentina's 
defensive tax measures are intended to secure compliance with these. Measures 1, 2, 3 and 4 are 
therefore designed to secure compliance with th e aforementioned articles of the LIG, which 
operate in a regulatory framework that includes this Law and the regulations thereto, the 
administration and implementation of which are necessarily linked to the body of rules which also 
includes the LPT (Articles 33, 38, 39, 45 and 46 in particular) and the Criminal Tax Law (Articles 1, 2 and 6 in particular) and is based on the constituti onal principles enshrined in Articles 4, 16, 17 
and 75.2 of the National Constitution of the Argentine Republic. Argentina reiterates that 
measure 7 is designed to secure compliance with Article 118.3 of the LSC and Article 188 of IGJ 
                                               
680 Argentina's opening statement at the second meeting of the Panel, para. 29. 
681 Argentina's first written submission, paras. 249-253. 
682 Argentina's first written submission, para. 254 (citing OECD, OECD's Project on Harmful Tax 
Practices, The 2001 Progress Report , (Exhibit ARG-7), available at 
http://www/oecd.org/ctp/harmful/2664450.pdf (exhibit provided in English; Spanish text available at http://www.ief.es/recursos/publica ciones/libros/informes_OCDE.aspx )). 
683 Argentina's first written submission, para. 255 (citing OECD, OECD's Project on Harmful Tax 
Practices, The 2001 Progress Report , (Exhibit ARG-7), available at 
http://www/oecd.org/ctp/harmful/2664450.pdf (exhibit provided in English; Spanish text available at 
http://www.ief.es/recursos/publica ciones/libros/informes_OCDE.aspx )). 
684 Argentina's first written submission, paras. 264-267. 
685 Argentina's first written submission, paras. 334-338. WT/DS453/R 
 
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  Resolution No. 7/2005, and measure 8 to secure compliance with Articles 20, 20 bis and 21 of Law 
No. 25.246 on Concealment and Laundering of Money of Criminal Origin in Argentina.686 
7.533.  Argentina claims that it has explained the "circumstances and problems" which led to the 
adoption of the measures at issue, and has su bmitted substantial evidence on the types of 
transaction between Argentine taxpayers and non-cooperative jurisdictions which result in the 
artificial erosion of the tax base in Argentina.687 
7.534.  Argentina argues that its defensive tax measures are "necessary" to secure compliance 
with its tax laws and regulations. According to Argentina, the defensive tax measures 1, 2, 3, 4 
and 7 considerably lessen the risks of tax evasion,  tax avoidance and fraud as they eliminate the 
possible tax benefits which Argentine taxpayers would gain from the simulation of transactions with related companies based in non-cooperative countries, conducted exclusively for the purpose 
of avoiding the payment of tax in Argentina. Such tax measures constitute a "global strategy" to 
address the risks posed by the harmful tax practices of non-cooperative countries. Argentina argues that the defensive tax measures at issue adequately serve to make an important 
contribution to securing compliance with Argentina's tax laws and rules, and are designed 
individually or in an overall policy context to  address the risks posed by harmful tax practices.
688 
Measure 8 is needed to secure compliance with the laws and regulations preventing concealment 
and laundering of money of criminal origin and makes an important contribution to the objective of 
securing compliance with these laws and regulations as it is in line with international standards on the prevention of money laundering adopted within the FATF framework.
689 
7.535.  Argentina argues that the objective of prot ecting its tax collection system against the risks 
posed by the harmful tax practices of non-cooperative countries is an interest of the utmost 
importance. Argentina claims that, in the past , both panels and the Appellate Body have 
recognized the importance of the fight agains t tax evasion and of guaranteeing the proper 
implementation of tax laws and regulations.690 Argentina argues that the degree of importance of 
protecting the collection of tax revenue and application of Argentina's tax system against the risks caused by the harmful tax practices of non-cooperative countries has been confirmed by the Global 
Forum's work. According to Argentina, Panama recognized the importance of the fight against the 
effects of harmful tax practices when it acceded to the OECD's Global Forum on tax matters and made a commitment to the principles of transparency and effective exchange of tax information.
691 
Argentina also claims that the objective of preven tion against the risks posed by the laundering of 
money of criminal origin is an interest of the utmost importance.692 
7.536.  Argentina claims that its defensive tax measures are not excessively restrictive on trade in 
financial services by service suppliers from non-cooperative countries inasmuch as they do not 
prohibit these suppliers from providing services in Argentina. Rather, the defensive tax measures 
at issue generally reflect the application of pres umptions in order to determine the tax base for 
transactions with entities located in non-cooperative countries. In most cases, the Argentine 
taxpayer can rebut these presumptions by furnishing the necessary information.693 Argentina 
claims that measure 8 is the least trade-restrictive measure for the purposes of securing compliance with the obligations imposed by Argentine law to combat the risks posed by the 
                                               
686 Argentina's second written submission, paras. 71 and 72; and opening statement at the second 
meeting of the Panel, paras. 26 and 27. 
687 Argentina's opening statement at the second meeting of the Panel,  para. 28 (referring to Federal 
Administration of Public Revenue, Offshore Companies – Fraudulent Ma noeuvres and Harmful Tax Planning, 
2013, Exhibit ARG-44). 
688 Argentina's first written submission, paras. 276, 287 and 288; second written submission, para. 73; 
and opening statement at the second me eting of the Panel, paras. 31 and 32. 
689 Argentina's first written submission, paras. 328, 334-338. 
690 Argentina's first written submission, paras. 289-292 (citing Appellate Body Report, Dominican 
Republic – Import and Sale of Cigarettes, para. 7.215; and Panel Report, Argentina – Hides and Leather , 
para. 11.307). 
691 Argentina's first written submission, paras. 293 and 294 (citing the OECD Report, Towards Global 
Tax Co-operation , Report to the 2000 Ministerial Council Meeting and Recommendations by the Committee on 
Fiscal Affairs, OECD 2000, (Exhibit ARG-6), available at http://www.oecd.org/tax/transparency/44430257.pdf  
(exhibit provided in English; Spanish text available at 
http://www.ief.es/recursos/publica ciones/libros/informes_OCDE.aspx) ; and Note from Panama’s Minister of the 
Economy and Finance to the Secretary-General of the OECD, 15 April 2002, (Exhibit ARG-8). 
692 Argentina's first written submission, para. 339. 
693 Argentina's first written submission, paras. 297 and 298. WT/DS453/R 
 
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  laundering of money of criminal origin. Argentina argues that measure 8 neither prevents nor 
discourages the establishment of branches of comp anies incorporated in non-cooperative countries 
but makes repatriation of their direct investments subject to verification of the "transparency of the operation". According to Argentina, the measure does not impede the supply of services which 
a company may provide.
694 
7.537.  Argentina argues that it is Panama's responsibility to present WTO-consistent measures 
that are "reasonably available" alternatives to the defensive tax measures challenged in this 
dispute. According to Argentina, any alternative to the defensive tax measures in question must 
not be prohibitively expensive as the Argentine authorities have limited resources with which to secure compliance with tax legislation.
695 Likewise, any alternative measure proposed by Panama 
must ensure at least the same level of protec tion against the risks posed by fraudulent tax 
practices as that afforded by the defensive tax measures being challenged. According to Argentina, 
the conclusion of agreements on mutual exchange of information is the internationally established means of addressing this type of situation an d is reasonably available to the counterpart. 
Argentina considers that measures of a corrective nature do not, a priori , ensure that level of 
protection.
696 Argentina claims that Panama has not even suggested an alternative measure and, 
when it attempts to do so, the alternative suggested consists of withdrawing the measure 
challenged.697 
7.538.  Argentina argues that its defensive tax measures are applied in accordance with the 
chapeau of Article XIV(c) of the GATS. Argentina asserts that the distinction made by Argentina's defensive tax measures between service suppliers of cooperative and non-cooperative countries 
cannot be seen as "arbitrary" or unjustifiable" sinc e these two categories of supplier pose different 
levels of risk for compliance with Argentina's tax legislation. In addition, Argentina contends that the differences between cooperative and non-cooperative countries reflected in Argentina's 
defensive tax measures are based on internationally  recognized rules of the Global Forum and the 
OECD, to which Panama has made a commitment, and they can therefore hardly be considered "arbitrary or unjustifiable". Argentina claims that, when Panama joined the Global Forum, Panama 
asked its fellow members in the Forum to apply a coordinated scheme of defensive tax measures 
to all jurisdictions which do not adhere to the st andards on transparency and effective exchange of 
tax information. Argentina contends that that is precisely what it is doing through the measures at issue in this dispute.
698 
7.539.  Argentina also claims that the reason for the distinction between cooperative and 
non-cooperative countries in Decree No. 589/2013 concerns Argentina's ability to access the information needed to secure compliance with its laws and regulations. Accordingly, if a country 
has concluded an agreement on effective exchange of tax information with Argentina or has 
started negotiations for this purpose, Argentina considers that there is little risk that it will not be able to have access to the information needed to determine whether the transaction in question 
reflects legitimate commercial purposes. According to Argentina, in most cases, the possibility of 
initiating negotiations acts as a sufficient incentive to encourage the conclusion of this type of agreement. Consequently, from the point of view of  the risk that the Argentine authorities will not 
have access to the information needed to secure compliance with Argentina's laws and regulations, 
these two categories of country are undoubtedly not in a similar situation.
699 Argentina thus 
considers that its capacity to designate as cooperative those countries that have participated in good faith in negotiations aimed at signing an agreement on exchange of tax information reflecting 
the standards of the Global Forum is not equivalent to an arbitrary or unjustifiable distinction, 
since it neither impairs nor is contrary to Argentina's objective of securing compliance with its legislation.
700 
7.540.  Argentina argues that, if this Panel finds that Panama has established a violation of 
Article XVII of the GATS, Argentina's defensive tax measures challenged by Panama as regards national treatment under Article XVII of the GATS (measures 2, 3 and 4) are "necessary to secure 
                                               
694 Argentina's first written submission, paras. 342 and 343. 
695 Argentina's first written submission, paras. 308-312 (referring to Appellate Body Report, Brazil – 
Retreaded Tyres , para. 171; and Panel Report, Argentina – Hides and Leather , para. [11.305]). 
696 Argentina's first written submission, paras. 313 and 314; and second written submission, para. 74. 
697 Argentina's opening statement at the second meeting of the Panel, para. 35. 
698 Argentina's first written submission, paras. 315-326. 
699 Argentina's second written submission, paras. 75-77; and response to Panel question No. 49. 
700 Argentina's opening statement at the second meeting of the Panel, para. 36. WT/DS453/R 
 
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  compliance" with Argentina's tax laws and regulations within the meaning of Article XIV(c) of the 
GATS, including the "prevention of deceptive and fraudulent practices" commonly associated with transactions with non-cooperative tax jurisdictions. Argentina considers that it has shown that its defensive measures (measures 1, 2, 3, 4, 7 and 8) are justified under Article XIV(c) of the GATS 
and are applied consistently with its chapeau. Arge ntina argues that this proof and the reasons set 
forth also pertain to Panama's claims on national  treatment. This is because the difference that 
exists between Argentine services and service suppliers and the services and service suppliers of 
non-cooperative countries as regards access to information and exercise of control and supervision 
by the tax authorities in order to secure compliance with Argentina's tax laws and regulations (and the resulting difference in regulatory treatment) manifests itself in a way similar to the difference between services and service suppliers of cooper ative and non-cooperative countries for the same 
purposes.
701 
7.541.  According to Argentina, nothing in the text of Article XIV(c) of the GATS require s a 
defending Member to invoke this defence separa t e l y  f o r  e a c h  c l a i m  o f  v i o l a t i o n  m a d e  b y  t h e  
complaining Member, and in China – Auto Parts  the panel suggested nothing to the contrary. 
Argentina contends that Panama's reference to the China – Auto Parts dispute is out of place 
because in that dispute the panel, in substance,  considered whether China had proved that its 
measures were needed to secure compliance with laws and regulations within the meaning of that 
provision, despite having criticized China's collective presentation of arguments.702 
7.3.5.1.2  Panama 7.542.  Panama argues that Argentina put forward a common defence in relation to a series of 
measures, without justifying each of them individually. Panama contends, in particular, that 
Argentina submitted a single defence based on Article XIV(c)(i) of the GATS in respect of measures 1 to 4 and considers that, in its collective defence, Argentina has combined arguments 
concerning the violation of Article II:1 and Article XVII of the GATS on some of the four measures 
taken together. Panama claims that in China – Auto Parts , the presentation of a combined defence 
relating to different violations of WTO law led the panel to question the defence's validity. In the 
present case, Panama considers that this lack of clarity not only affects its ability to understand 
Argentina's defence clearly, but also the Panel's assessment, and even the effective participation 
of third parties.
703 
7.543.  According to Panama, Argentina is not seeking compliance with its domestic law but rather 
an international policy objective, namely, the conclusion of a maximum number of information 
exchange agreements so as to expand the AFIP's prerogatives. In Panama's opinion, Argentina is 
using its domestic law as a means of exerting pressure on non-cooperative countries. Panama 
contends that by attacking the so-called "harmful tax practices" of non-cooperative countries, 
Argentina is trying to make these countries align themselves with standards applied by Argentina in its international relations with other countries. According to Panama, the requirement of this 
type of "compliance" is not covered by Article XIV(c)(i) of the GATS.
704 
7.544.  Panama claims that, even if the purpose of the measures were to secure compliance with 
the rules of domestic law, Argentina does not identify the specific obligation(s) with which these measures allegedly seek to secure compliance and also fails to explain how the various measures 
in question have been designed as compliance mechanisms. According to Panama, Argentina does 
not specify which situations of non-compliance led to the introduction of the measures and does not describe what type of unlawful practices or conduct violating domestic law it is sought to 
combat with each of the measures in question. Panama claims that Argentina does not explain 
how less favourable treatment in tax and administrative matters can lead to effective compliance with its legislation.
705 
                                               
701 Argentina's first written submission, paras. 345-351. 
702 Argentina's second written submission, paras. 66-70 (citing Panel Report, China – Auto Parts , 
para. 7.285). 
703 Panama's opening statement at the first meeting of the Panel,  para. 48 (citing Panel Report, China – 
Auto Parts , para. 7.287); and second written submission, paras. 2.169-2.171 and 2.310-2.311. 
704 Panama's opening statement at the fi rst meeting of the Panel, para. 49. 
705 Panama's opening statement at the first meeting of the Panel, paras. 50 and 51. WT/DS453/R 
 
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  7.545.  Panama considers that there are alternative mechanisms that can be used to secure 
compliance with Argentine law in a less trade-restrictive manner without entailing the discrimination and inconsistency of the measures in question. According to Panama, there is no reason why the instances of fraud involving Argentine taxpayers differ depending on the 
counterpart's location. Panama claims that the so-called information exchange agreements could 
be effective in adopting corrective measures ex post  but in no way prevent fraud ex ante . In 
Panama's opinion, trying to justify measures which seek the disclosure of registers and individual 
accounts of a confidential nature is contrary to the spirit of Article XIV(c)(ii) of the GATS, which 
precisely seeks to protect such confidential information.
706 
7.546.  Panama argues that Argentina's explanation of how the measures in question secure 
compliance with laws and regulations which in themselves are not inconsistent with the GATS is 
insufficient and flawed.707 
7.547.  As regards the identification of laws or re gulations that are not inconsistent with the GATS, 
Panama argues that, in its first written submission, Argentina made only a general reference to the 
LIG without citing any specific provision. Accord ing to Panama, this means that any regulatory 
instrument other than the LIG lies outside the Panel's remit and Argentina cannot present new evidence regarding this matter.
708 Panama claims that Argentina has not proved that the LIG is a 
law "relating to the prevention of deceptive an d fraudulent practices" within the meaning of 
Article XIV(c)(i) of the GATS. Panama asserts that the LIG establishes the gains tax and all the components needed to apply it, so it is not a law "relating to the prevention of deceptive and 
fraudulent practices". According to Panama, Argentina is pursuing diverse tax or economic policy 
o b j e c t i v e s  o r  i s  a t t e m p t i n g  t o  f o l l o w  r e c o m m e n d a t i o n s  o r  c o n s i d e r a t i o n s  s u g g e s t e d  i n  a n  
international standard; according to Panama, this is not in keeping with the purpose protected by Article XIV(c)(i) of the GATS.
709 
7.548.  Panama contends that a mere reference to a law or regulation is not sufficient. According 
to Panama, Argentina should have identified specific provisions or obligations of the LIG on the prevention of deceptive or fraudulent practices.  Panama argues that there is no LIG provision 
linked to the prevention of practices which might in any way resemble practices that are the 
subject of Argentina's concern (the so-called self-loans, the transmittal and entry of funds from non-cooperative countries, transaction valuation based on transfer prices, or the allocation of expenditure to the time of payment).
710 Panama also argues that the relevant provision of the law 
or regulation with which it is sought to achieve compliance through the measure cannot be the 
same rule which gives purpose to the measure in question, as this would result in a circular justification.
711 
7.549.  With regard to measures 1 to 4, Panama has stated its opposition to Argentina's attempt 
during the second meeting of the Panel to rectify its inappropriate invocation of Article XIV(c)(i) of the GATS. According to Panama, the inclusion of numerous provisions, not only from the LIG but 
also from other Argentine regulations and even its National Constitution, broadens the scope of its 
defence and affects Panama's procedural rights. Panama considers that Argentina has not even explained how the measures in question are intended to secure compliance with each and every one of the new provisions invoked.
712 
7.550.  As regards measure 7, Panama argues that Argentina's mere assertions regarding the laws 
or regulations with which Article 192 of IGJ Resolution No. 7/2005 seeks to secure compliance do not equate to proof.
713 Concerning measure 8, Panama argues that the domestic rules and 
regulations which form part of the defending Member's national legal order cannot be international 
rules. Consequently, Argentina's argument that its measure is necessary in order to secure 
                                               
706 Panama's opening statement at the fi rst meeting of the Panel, para. 52. 
707 Panama's second written submission, para. 2.178. 
708 Panama's second written submission, paras. 2.179 and 2.180. 
709 Panama's second written submission, paras. 2.181-2.184, 2.319-2.322, 2.326, 2.445-2.446, 2.449, 
2.549, 2.552, 2.753, 2.800 and 2.802. 
710 Panama's second written submission, paras. 2.186-2.192, 2.323-2.324, 2.447, 2.550, 2.552 
and 2.801. 
711 Panama's second written submission, para. 2.551. 
712 Panama's closing statement at the se cond meeting of the Panel, para. 5. 
713 Panama's second written submission, paras. 2.751 and 2.752. WT/DS453/R 
 
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  compliance with international standards of transparency is without foundation under 
Article XIV(c)(i) of the GATS.714 
7.551.  Panama argues that Argentina has not proved  that the LIG is consistent with the GATS. It 
considers that the LIG is in itself inconsistent with the GATS, particularly with Articles II and XVII, 
as can be seen from Panama's numerous claims.715 According to Panama, Argentina has also failed 
to explain how Articles 118 of Law No. 19.550 on Commercial Companies and 188 of IGJ Resolution No. 7/2005 are consistent with the GATS.
716 In the case of measure 8, Argentina has 
not explained why Law No. 25.246 on Concealment and Laundering of Money of Criminal Origin 
should be considered consistent with the GATS.717 
7.552.  Panama argues that Argentina has not shown how measures 1 to 4 secure compliance with 
the LIG. Panama alleges that, without having determined the specific LIG provision with which the 
measure in question seeks to secure compliance, it is not possible to assess to what degree the 
measure is intended to achieve this purpose.718 According to Panama, Argentina does not 
satisfactorily explain the circumstances which led to introduction of the measure.719 Panama 
alleges that Argentina's concern focuses on a very special situation in the case of measures 1 to 4 
and that the scope of each of these four me asures goes beyond the concern in question.720 As 
regards measures 7 and 8, Panama claims that Argentina did not present any argument to show 
that these measures are intended to secure compliance with the laws and regulations cited by 
Argentina.721 
7.553.  Regarding measures 1 to 4, Panama argues that the level of contribution of each measure 
should be determined according to the objective it is sought to achieve, namely, compliance with 
the LIG. As it has not been shown that the practices mentioned violate any specific provision of the 
LIG, and thus no specific objective has been established for achieving compliance with measures 1 to 4, it is not possible to assess whether these measures make a contribution with regard to a 
compliance objective not identified by Argentina. Panama concludes, therefore, that Argentina has 
not been able validly to establish that measures 1 to 4 make a material contribution to an objective of compliance with the LIG.
722 
7.554.  Concerning measure 7, Panama recalls that Argentina argues that discrimination in the 
registration of branches makes an important contribution to compliance with Argentina's tax legislation, but does not explain how requesting additional information only from companies of non-cooperative countries helps to secure compliance with Articles 118 of the LSC and 188 of IGJ 
Resolution No. 7/2005, which apply to all companies, irrespective of their origin. Nor does 
Argentina indicate how the measure contributes to ensuring that branches of companies from cooperative countries "have a legitimate commercial purpose" and are not "mere vehicles for 
simulated transactions".
723 A s  t o  m e a s u r e  8 ,  P a n a m a  c l a i m s  t h a t  A r g e n t i n a  o n l y  c i t e s  t h r e e  
provisions of Law No. 25.246 on Concealment and Laundering of Money of Criminal Origin and 
does not explain how imposing the requiremen t of prior authorization from the BCRA for 
repatriation to non-cooperative countries helps to secure compliance.724 
7.555.  With regard to measures 1 to 4 and 7, Panama clarifies that it does not contest the value 
placed by Argentina on protecting its tax collecti on system against the risks posed by harmful tax 
practices on the part of non-cooperative jurisdictions. However, Panama considers that there are 
other interests of prime importance such as that of observing the rule of law in tax matters. 
Panama argues that, whereas Argentina's interest in collecting taxes is of the utmost importance, it has to be interpreted in conjunction with the interest of the Argentine citizen, resident or 
economic operator who trusts that tax measures will fall within the parameters of strict compliance 
                                               
714 Panama's second written submission, para. 2.800. 
715 Panama's second written submission, paras. 2.197-2.198, 2.329, 2.451 and 2.554. 
716 Panama's second written submission, para. 2.754. 
717 Panama's second written submission, para. 2.802. 
718 Panama's second written submission, paras. 2.200-2.201, 2.330, 2.224, 2.452 and 2.555. 
719 Panama's second written submission, para. 2.330. 
720 Panama's second written submission para. 2.20 4. Panama put forward the same argument with 
regard to measure 2 (para. 2.332), measure 3 (para. 2.453) and measure 4 (para. 2.556). 
721 Panama's second written submission, paras. 2.755 and 2.802. 
722 Panama's second written submission, paras. 2.211, 2.337, 2.456 and 2.559. 
723 Panama's second written submission, para. 2.759. 
724 Panama's second written submission, para. 2.803. WT/DS453/R 
 
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  with the law and tax equality. According to Panama, protecting Argentine citizens and taxpayers is 
of the utmost importance, especially in view of the issues of a criminal nature related to the AFIP's 
utilization of private information.725 In the case of measure 8, Panama claims that Argentina has 
not identified the interest protected.726 
7.556.  Panama argues that measures 1 to 4 have an impact on transactions that are not the 
subject of Argentina's concern and these measures , therefore, go beyond what is necessary to 
meet Argentina's concerns.727 Panama adds that, as far as measure 1 is concerned, the irrefutable 
nature of the presumption has no raison d'être when it can be shown that the transaction is not an 
"insider loan" or was conducted at arm's length.728 As to measure 7, Panama claims that Argentina 
confines itself to observing that Article 192 of IGJ Resolution No. 7/2005 "does not prohibit the establishment of branches of companies incorporated in {} non-cooperative jurisdictions in Buenos 
Aires", as if that alone proved that the measure is not restrictive. In Panama's opinion, the fact 
that a prohibition is a measure still more restrictive than that contained in Article 192 of IGJ Resolution No. 7/2005 does not lessen the fact that the imposition of additional registration 
requirements on companies from non-cooperative countries restricts and impedes such companies' 
capacity to establish a commercial presence in the city of Buenos Aires.
729 As regards measure 8, 
Panama contends that no type of evidence accompanies Argentina's statements that the foreign 
exchange measure is the least trade-restrictive measure.730 
7.557.  In connection with measure 1, Panama argues that the discriminatory withholding tax 
should not apply to transactions where it is cert ain that the borrower and the lender are not "the 
same person" according to the "insider loan" criteria clearly established by law. Even in 
transactions between related persons, there is no reason to apply discriminatory withholding if it 
can be shown that the transactions genuinely reflect actual conditions in the market. In this respect, in Panama's opinion, there is no reason for the presumption to be irrefutable. Panama 
considers that, in the case of related persons which have not been able to prove that the 
transactions reflect actual conditions in the market, Argentina has at its disposal the transfer pricing regime under Article 15 of the LIG (except for its second paragraph) and other relevant 
provisions of the RIG, which would enable prices similar to market prices to be established.
731 
7.558.  As far as measures 2, 3 and 4 are concerned, Panama argues that Argentina could and 
should have adopted a measure solely intended to assuage Argentina's specific concern and not one which has restrictive effects on perfectly legal transactions that do not fit the scenario that 
preoccupies Argentina.
732 
7.559.  Panama claims that there is an alternative measure less restrictive than measure 7. 
According to Panama, Argentina itself argues in its first written submission that "companies 
incorporated in jurisdictions 'not cooperating for tax transparency purposes' are required to 
provide the same documents as those incorporated in jurisdictions cooperating for tax transparency purposes" and asserts that the requirement in Article 192 of IGJ Resolution 
No. 7/2005 for companies of non-cooperative countries "is equivalent to the requirements 
provided for in Article 188" of IGJ Resolution No. 7/2005. Panama contends that, if this is the case, Article 192 of IGJ Resolution No. 7/2005 is totally superfluous. According to Panama, eliminating 
this discriminatory provision, which targets only companies from non-cooperative countries, would 
be a less restrictive alternative and would not be prohibitively costly.
733 
7.560.  Panama argues that, even allowing that measures 1 to 4, 7 and 8 could be justified 
provisionally under Article XIV(c) of the GATS , they constitute a means of arbitrary and 
unjustifiable discrimination between countries that are in similar situations for the purposes of tax 
transparency and exchange of information. Panama claims that the more favourable treatment 
                                               
725 Panama's second written submission, paras. 2.222-2.225, 2.341-2.343, 2.461-2.462, 2.561, 2.760 
and 2.761. 
726 Panama's second written submission, para. 2.803. 
727 Panama's second written submission, paras, 2.218, 2.339-2.340, 2.458-2.460 and 2.560. 
728 Panama's second written submission, paras. 2.219 and 2.220. 
729 Panama's second written submission, para. 2.758. 
730 Panama's second written submission, para. 2.803. 
731 Panama's second written submission, paras. 2.226-2.228. 
732 Panama's second written submission, paras. 2.344, 2.463 and 2.562. 
733 Argentina's second written submission, para. 2.762 (referring to Argentina's first written submission, 
paras. 614 and 616). WT/DS453/R 
 
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  accorded by Argentina is based on the list of countries cooperating with Argentina. By exclusion, 
the less favourable treatment accorded by Argentina concerns all those jurisdictions that are not on this list and that are described as "non-cooperative" for the same purposes. Panama notes that the distinction between countries based on cooperation with Argentina is unilateral, discretionary 
and political; it disregards criteria developed in international fora, prejudges certain countries, and 
ignores their individual efforts aimed at greater tax transparency and cooperation in exchanging 
information. 
7.561.  In response to Argentina's argument that, in distinguishing between cooperative and 
non-cooperative countries, Argentina is promoting universal adoption of the Global Forum's standards, Panama states that, in fact, Argentina disregards in part the findings of the Global Forum with respect to the situation of various countries as regards compliance with tax 
transparency and exchange of information standard s. Panama asserts, for example, that Argentina 
excludes from the "cooperative countries" category jurisdictions such as Bahrain and Hong Kong (China) which, in the opinion of the Global Forum itself, are in the same situation as Argentina 
with regard to tax transparency and exchange of information. Moreover, Argentina includes in the 
list of "cooperative countries" jurisdictions which, in the opinion of the Global Forum, do not meet the institution's basic standards in that regard. 
7.562.  According to Panama, the criterion for being considered a cooperative country, which 
relates to the initiation of negotiations with Argentina with a view to concluding an agreement on exchange of information, is unrelated to the exis tence of actual conditions in the other country 
which facilitate transparency and exchange of in formation with Argentina. In Panama's view, the 
desire to negotiate does not imply that the country in question has a legal, administrative, tax, 
banking confidential information protection framework, which makes cooperation possible. 
7.563.  Panama stresses what it regards as the arbitrariness of the rule on initiation of 
negotiations, stating that the opening of such negotiations is subject to Argentina's discretion and 
there is no established procedure in its regulations enabling non-cooperative countries to initiate negotiations with a view to their inclusion in the list of cooperative countries. Further, Panama 
points out that the regulations also do not dete rmine the intervals at which the list is to be 
updated.
734 
7.564.  Panama also argues that, even if the restriction were provisionally justified under 
Article XIV(c)(i) of the GATS, measures 1 to 4 constitute a disguised restriction on trade in 
services because their scope is broader than that relating to the concern that gave rise to the 
measure.735 
7.565.  Panama argues additionally that, even if  the Panel were to conclude that measure 8 is 
provisionally justified under Article XIV(c)(i) of the GATS, Argentina has failed to demonstrate that 
the measure is applied in conformity with the chap eau of that article. Panama wishes to emphasize 
that, in its first written submission, Argentina di d not put forward any argument on the chapeau of 
Article XIV in relation to the measure concerning repatriation of investment. Panama claims that, 
in any case, in its view, the Argentine measure on repatriation of investment is applied in a way which "constitute[s] a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail", inconsistently with the chapeau of Article XIV(c)(i) of the GATS. 
7.566.  Panama shares the concern expressed by the European Union regarding the discretionary 
authority with which Argentina designates countries as "cooperative for tax transparency purposes" and considers that this raises the question of whether the Argentine measures are really 
applied in conformity with the chapeau of Articl e XIV(c)(i) of the GATS. Panama claims that the 
"effective exchange of information" referred to by  Argentina may not occur even when the service 
suppliers are from cooperative countries, since the mere initiation of negotiations with Argentina 
does not guarantee the existence of the instruments needed to ensure the effective receipt of 
information. Panama contends that Argentina itself has recognized that it considers as cooperative 18 countries with which it has initiated negotiations and with which no agreement on exchange of information is in force. 
                                               
734 Panama's second written submission, paras. 2.230-2.236, 2.345, 2.464, 2.563 and 2.764. 
735 Panama's second written submission, paras. 2.237, 2.346, 2.465 and 2.564. WT/DS453/R 
 
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  7.567.  According to Panama, measure 8 imposes th e requirement of prior authorization from the 
BCRA on companies from non-cooperative countries  (for example, Egypt and Oman), with which 
the effective exchange of information is just as absent as with countries deemed cooperative with which Argentina has not yet signed any agreement guaranteeing such exchange (for example, El 
Salvador, Honduras and the Philippines). Panama points out that Argentina is not consistent in 
drawing up its list, since countries which have not initiated negotiations with Argentina are included in the list of cooperative countries (this being the case for Panama), while countries which 
have allegedly initiated negotiations with Argentina will continue to be regarded as 
non-cooperative while waiting for Argentina to update its list (for example, Cyprus or Hong Kong (China)).
736 
7.3.5.2  Assessment by the Panel 
7.3.5.2.1  Introduction 
7.568.  The issue placed before the Panel is whether, as Argentina claims, measure 1 (withholding 
tax on payments of interest or remuneration), me asure 2 (presumption of unjustified increase in 
wealth), measure 3 (transaction valuation based on transfer prices), measure 4 (payment received 
rule for the allocation of expenditure), measure 7 (requirements for the registration of branches) 
and measure 8 (foreign exchange authorization requirement) are covered by the exception in 
Article XIV(c) of the GATS, "including its subparagraph (i)".737 In response, Panama not only calls 
into question this coverage, but also the validi ty of the alleged "colle ctive" or "combined" 
presentation of Argentina's defence under Articl e  X I V ( c )  o f  t h e  G A T S  w i t h  r e g a r d  t o  t h e  s i x  
measures. 
7.569.  We start by examining the two preliminar y questions relating to the defence put forward 
by Argentina under Article XIV(c) of the GATS. 
7.3.5.2.2  Preliminary questions relating to the defence put forward by Argentina 
7.3.5.2.2.1  The question of whether the wa y in which Argentina presents its defence 
under Article XIV(c) of the GATS is admissible 
7.570.  Panama asks us to reject Argentina's defence under Article XIV(c) of the GATS in relation 
to the six measures concerned because it was pres ented as a "combined" or "collective" defence 
"without trying to justify each of them individually".738 Panama claims that, faced with a similar 
situation in which the respondent had presented a general defence with respect to various violations of WTO law, the panel in China – Auto Parts indicated that "[i]t is not for the Panel to 
advance or presume specific arguments or analysis for a claim made by a party to the dispute". 
Panama urges us to follow the same reasoning as the panel in China – Auto Parts  and asserts that, 
because of its general nature and lack of precision, we should dismiss Argentina's defence under 
Article XIV(c) of the GATS. According to Panama, an objective assessment of the matter under 
Article 11 of the DSU implies in this case refraining from "presum[ing] specific arguments or analysis" which Argentina did not present. Panama argues that, given the uncertainty of its 
collective arguments and bearing in mind that Arge ntina has the burden of proving the merits of 
the justification it claims, we have no option but to find that the measures in question cannot be justified under Article XIV(c) of the GATS.
739 
7.571.  Argentina responds that Panama's reference to China – Auto Parts is out of place because, 
despite criticism of the way in which China presented its arguments, the panel in that dispute 
assessed, in substance, whether China had shown that its measures met the requirements of Article XX(d) of the GATT 1994. Moreover, Argentin a explains, the criticism of China by the panel 
in that dispute was exclusively concerned with the fact that the underlying measures with which 
China allegedly secured compliance were different, depending on whether the Panel found a 
                                               
736 Panama's second written submission, paras. 2.805-2.808. 
737 Argentina's first written submission, paras. 244 and 328; and opening statement at the second 
meeting of the Panel, para. 29. 
738 Panama's opening statement at the fi rst meeting of the Panel, para. 48. 
739 Panama's opening statement at the first meeting of the Panel,  para. 48; and second written 
submission, paras. 2.170-2.171, 2.311-2.312, 2.439, 2.544, and 2.749 (citing Panel Report, China – Auto 
Parts, para. 7.287). WT/DS453/R 
 
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  violation of Article II or Article III of the GATT 1994. Argentina argues that in the present dispute, 
on the contrary, the measures with which compliance with its laws and regulations is secured are the same, irrespective of whether the Panel finds a violation of Article II:1 or Article XVII of the GATS. Argentina contends that nothing in the text of Article XIV(c) requires a defending Member 
to invoke its defence separately for each claim of violation put forward by a complaining Member 
and in China – Auto Parts  the panel did not suggest the contrary. For Argentina, this means that 
Panama's argument lacks merit and it urges us to reject Panama's objection.
740 
7.572.  Argentina also maintains that Panama's criticism refers exclusively to the way in which 
Argentina decided to frame its arguments and that, therefore, Panama is mistaken in affirming that Argentina invoked a collective defence for the measures justified under Article XIV(c) of the GATS. Argentina explains that, in order to avoid unn ecessary repetition and in the interests of the 
Panel's efficiency and of Secretariat resources, Argentina refrained from repeating the arguments 
for each of the elements of the "weighing and balancing" test when they were common to all the 
measures. According to Argentina, this is also true for the element relating to the importance of 
the interests or for the analysis in the context of the chapeau of Article XIV, for example. 
Argentina contends that, whenever the arguments were different, Argentina established the relevant elements of the test separately and individually for each measure.
741 
7.573.  Consequently, as a preliminary matter, we must focus on whether, as proposed by 
Panama, we should dismiss Argentina's defence under Article XIV(c) of the GATS because of the way in which it was presented. We begin precisely by examining the way in which Argentina presented its defence. 
7.574.  We note that, in its first written submission, Argentina structures its arguments by dividing 
them into two groups: on the one hand, it develops arguments for five of the six measures defended under Article XIV(c) of the GATS (measures 1, 2, 3, 4 and 7) and, on the other, it 
develops its arguments for measure 8 separately. As regards measures 1, 2, 3, 4 and 7, although 
Argentina discusses certain elements together, it also develops separate arguments for each measure. For example, in its first written submission, Argentina discusses separately each 
measure's contribution to its legitimate objectives
742, as well as the trade-restrictive aspects.743 
Argentina also makes a distinction in the light of the provision invoked by Panama, that is, the arguments developed under Article XIV(c) of the GATS appear initially only to concern the claims under Article II:1 of the GATS. Then, in a later part of its written submission, Argentina extends all 
the arguments developed previously in relation to Ar ticle XIV(c) of the GATS to the claims relating 
to Article XVII of the GATS, which only concern measures 2, 3 and 4. In its second written submission, Argentina deals with measures 1, 2, 3, 4, 7 and 8 together, except as regards 
Argentina's arguments with respect to the laws or regulations which it is sought to enforce, where 
Argentina provides a separate explanation for each measure. Argentina also explains that the measures it uses to secure compliance with its laws and regulations are the same, irrespective of 
whether the Panel finds a violation of Article II:1 or Article XVII of the GATS. 
7.575.  We do not therefore agree with Panama that Argentina has presented a "collective" or 
"combined" defence for measures 1, 2, 3, 4, 7 and 8 "without trying to justify each of them individually". Perhaps Argentina could have presented its arguments under Article XIV(c) of the 
GATS differently, but this does not mean that it is obliged to follow the approach chosen by 
Panama. We recall that Panama organized its arguments in its written submissions measure by measure, i.e. an analysis of all the relevant claims and defences under the GATS (and the 
GATT 1994) presented in relation to a single measure at issue. As we have already indicated
744, 
this way of organizing its arguments causes Panama to repeat the same arguments over and over again in different parts of its second written submission. This is so precisely because, as Argentina 
contends, there are numerous elements common to several of the measures. 
                                               
740 Argentina's second written submission, paras. 66-70 (citing Panel Report, China – Auto Parts, 
para. 7.285). 
741 Argentina's response to Panel question No. 79, pa ras. 1 and 2. Argentina re fers in particular to 
paras. 278-286 and 297-304 of its first written submission where it explains for each measure its contribution to the objective pursued and its de gree of trade restrictiveness. 
742 Argentina's first written submission, paras. 278-286. 
743 Argentina's first written submission, paras. 297-304. 
744 See para. 7.66 above. WT/DS453/R 
 
- 147 - 
 
  7.576.  In any event, even though Argentina's defence may be qualified as "combined" or 
"collective", we note that both in China – Auto Parts745 and in Colombia – Ports of Entry746, two 
disputes in which the respondents put forward thei r defence of various measures collectively, the 
panels assessed that defence despite their criticism and reservations in this respect. Accordingly, 
assuming that Argentina has presented a "collective" defence, quod non , the Panel considers that, 
contrary to Panama's contention, this would not be sufficient reason to dismiss Argentina's defence out of hand. 
7.577.  In the light of the foregoing, we shall examine Argentina's defence under Article XIV(c) of 
the GATS with regard to measures 1, 2, 3, 4,  7 and 8. Where there are elements common to the 
measures at issue concerned, we shall examine these elements collectively. 
7.3.5.2.2.2  The question of whether Argent ina's defence is limited to the laws and 
regulations indicated in subparagraph (i) of Article XIV(c) of the GATS 
7.578.  The second preliminary question we must address is whether the defence presented by 
Argentina is limited to the types of laws and regulations covered by subparagraph (i) of 
Article XIV(c) of the GATS. 
7.579.  Panama raises a general objection relating to Argentina's invocation of subparagraph (i) of 
Article XIV(c) of the GATS. Panama contends in th is regard that Argentina should be consistent 
with this option and refer only to securing compliance with laws and regulations on the prevention 
of deceptive and fraudulent practices or ways of dealing with the effects of a default on services 
contracts.
747 
7.580.  Argentina disagrees with Panama and argues that it is not obliged to prove separately that 
the measures concerned refer to "the prevention  of deceptive and fraudulent practices" under 
subparagraph (i) of Article XIV(c) of the GATS. According to Argentina, this is because the list of measures in subparagraphs (i) to (iii) of Article XIV(c) is illustrative and not exhaustive. 
Consequently, any measure intended to secure co mpliance with laws and regulations consistent 
with the GATS may be justified pursuant to Article XIV(c), irrespective of whether or not it is covered by subparagraphs (i) to (iii). Argentina argues that Article XIV does not contain any 
limitation a priori with regard to the types of GATS-consistent "laws and regulations" with which it 
is sought to secure compliance.
748 
7.581.  The Panel notes that Argentina does not appear to argue that the relevant laws and 
regulations are exclusively concerned with "the prevention of deceptive and fraudulent 
practices…". In its first written submission, for example, Argentina explains that its defensive tax 
measures "have been implemented to 'secure compliance' with its own laws and regulations by imposing taxes, including the prevention of 'deceptive and fraudulent practices'".
749 Likewise, in its 
                                               
745 In China – Auto Parts , the panel noted that, initially, in its justification of the measures under 
Article XX(d), China did not distinguish whether the just ification referred to a possible finding of inconsistency 
with Article III or Article II of the GATT 1994. After the se cond substantive meeting, in  response to a question 
from the panel, China changed its posi tion and clarified that the Article XX(d) analysis shou ld be different 
depending on whether a violation was found under Article III or Article II of the GATT 1994. The panel, noting that China had not distinguished its Article XX(d) arguments on the possible violation of Article III from those concerning Article II until specifically asked to do so by the panel, questioned "from the outset the validity of China's defence under Article XX(d)". The panel nevert heless considered that it was not for the panel "to 
advance or presume specific arguments or analysis for a claim made by a party to the dispute" and therefore 
went on to examine China's defence. See Panel Report, China – Auto Parts , paras. 7.283-7.287 . 
746 In Colombia – Ports of Entry , the panel noted that the respondent  had presented a "general defence" 
under Article XX(d) of the GATT 1994, in the sense that Colombia referred collectively to various requirements of the measure concerning ports of entry which cons tituted the basis of Panama's claims under several 
provisions of the GATT 1994. The panel noted that Colombia had not presented evidence to demonstrate how each of the requirements at issue "as the object of a separate claim, [was] individually necessary to secure 
compliance". Bearing in mind the appr oach decided by Colombia for presen ting its defence, the panel decided 
to "address Colombia's global defence that the ports of  entry measure is justified as necessary to secure 
compliance with the relevant laws or regulations by considering the requirements under the ports of entry 
measure collectively, without attempting to evaluate the individual contribution of each requirement in the ports of entry measure". See Panel Report, Colombia – Ports of Entry , paras. 7.502-7.508. 
747 Panama's second written submission, paras. 2.153, 2.180, 2.320-2.322, 2.445, 2.549 and 2.753. 
748 Argentina's opening statement at the second meeting of the Panel, para. 29. 
749 Argentina's first written submission, para. 262. (emphasis added) WT/DS453/R 
 
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  subsequent submissions to the Panel, Argentina did not refer again to subparagraph (i) but rather 
focused its arguments on subparagraph (c) of Article XIV in general.750 
7.582.  In any event, we agree with the panel in US – Gambling  that Article XIV(c) contains an 
illustrative list of laws or regulations "which are not inconsistent with the provisions" of the GATS. 
On this premise, the panel considered that laws and regulations other than those in subparagraphs 
(i) to (iii) may be relied upon in justifying a GATS-inconsistent measure under subparagraph (c) provided that those other laws and regulations ar e consistent with the provisions of the GATS.
751 It 
should be noted that the Appellate Body reached a similar conclusion regarding the list in 
Article XX(d) of the GATT 1994.752 
7.583.  The Panel therefore agrees with Argentina that Article XIV(c) "does not contain any 
limitation a priori  with regard to the types of 'laws and re gulations' consistent with the GATS with 
which a Member may seek to secure compliance".753 Accordingly, the Panel will not assess whether 
Argentina has proved that the relevant "laws or regulations" are related to "the prevention of deceptive and fraudulent practices", provided that it considers that Argentina has proved that the 
relevant measures secure compliance with laws and regulations that are not inconsistent with the 
provisions of the GATS. 
7.3.5.2.3  The relevant legal provision 
7.584.  Article XIV(c) of the GATS provides in relevant part: 
Article XIV 
General Exceptions 
Subject to the requirement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between countries 
where like conditions prevail, or a disguised restriction on trade in services, nothing in this Agreement shall be construed to prev ent the adoption or enforcement by any 
Member of measures: 
[…] (c) necessary to secure compliance with laws or regulations which are 
not inconsistent with the provisions of this Agreement including those relating to: 
(i) the prevention of deceptive and frau dulent practices or to deal with the 
effects of a default on services contracts; 
(ii) … 
[…] 
7.585.  In US – Gambling , the Appellate Body elaborated on the analogy between Article XIV of 
the GATS and Article XX of the GATT 1994, expl aining that the former stipulated general 
exceptions under the GATS in a similar way to the latter under the GATT 1994. The Appellate Body 
concluded that its previous decisions under Article XX of the GATT 1994 were relevant to the analysis of Article XIV of the GATS: 
Article XIV of the GATS sets out the general exceptions from obligations under that 
Agreement in the same manner as does Article XX of the GATT 1994. Both of these provisions affirm the right of Members to pursue objectives identified in the paragraphs of these provisions even if, in doing so, Members act inconsistently with 
                                               
750 Argentina's opening statement at the first meeting of the Panel, para. 41; second written submission, 
paras. 66-78; and opening statement at the second meeting of the Panel, paras. 24-36. 
751 Panel Report, US – Gambling , para. 6.540. 
752 Appellate Body Report, Mexico – Taxes on Soft Drinks , para. 70. 
753 Argentina's opening statement at the second meeting of the Panel, para. 29. WT/DS453/R 
 
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  obligations set out in other provisions of the respective agreements, provided that all 
of the conditions set out therein are satisfied. Similar language is used in both provisions, notably the term "necessary" and the requirements set out in their respective chapeaux. Accordingly, like the Panel, we find previous decisions under 
Article XX of the GATT 1994 relevant for our analysis under Article XIV of the GATS.
754 
7.586.  The analogy between the two pr ovisions led the Appellate Body in US – Gambling to use in 
its examination of Article XIV of the GATS the same "two-tier analysis" already used in relation to 
Article XX of the GATT 1994. Thus, Article XIV of th e GATS provides for an analysis in two stages: 
(i) first, the Panel must determine whether the measure falls within the scope of one of the subparagraphs of Article XIV of the GATS; and (ii) after having found that the measure at issue is 
justified under one of the subparagraphs of Ar ticle XIV of the GATS, the Panel must examine 
whether this measure satisfies the requirements laid down in the introductory clause or chapeau of 
Article XIV of the GATS.
755 
7.587.  We shall therefore first examine whether me asures 1, 2, 3, 4, 7 and 8 are provisionally 
justified under subparagraph (c) of Article XIV, that is, whether they are "necessary to secure 
compliance with laws or regulations" of Argentina "which are not inconsistent with the provisions of [the GATS]". Only if we find that measures 1, 2, 3, 4, 7 and 8 are provisionally justified under 
Article XIV(c), shall we proceed to examine whether those measures satisfy the requirements of 
the chapeau of Article XIV, that is, whether they "are [not] applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in services". 
7.588.  In conducting this examination, we take into account the Appellate Body's observations in 
EC – Seal Products according to which the general exceptions (in that case, Article XX of the 
GATT 1994) apply to "measures" that are to be analysed under the subparagraphs and the 
chapeau, not to any inconsistency with the GATT 1994 that might arise from such measures. With 
reference to its report in Thailand – Cigarettes (Philippines) , the Appellate Body pointed out that 
the analysis of the Article XX(d) defence in that  case should focus on the "differences in the 
regulation of imports and of like domestic produc ts" giving rise to the finding of less favourable 
treatment under Article III:4 of the GATT 1994. The Appellate Body concluded that the aspects of 
a measure to be justified under the subparagraphs of Article XX are those that give rise to the finding of inconsistency under the GATT 1994.
756 The same conclusion could be applied to our 
analysis under Article XIV(c) of the GATS. Our analysis of measures 1, 2 3, 4, 7 and 8 under 
Article XIV(c) of the GATS will therefore focus on the aspects of the measures that have given rise 
to the findings of inconsistency with Article II:1 of the GATS, particularly those aspects concerning 
the design and operation of measures 1, 2, 3, 4, 7 and 8 pursuant to Decree No. 589/2013. 
                                               
754 Appellate Body Report, US – Gambling , para. 291. (footnotes omitted) 
755 Appellate Body Report, US – Gambling , para. 292 (referring to its Reports in US – Shrimp , para. 147 
and US – Gasoline , pp. 20-21 and 25). 
756 The Appellate Body reasoned as follows: 
We begin by noting that the general exceptions of  Article XX apply to "measures" that are to be 
analysed under the subparagraphs and chapeau, not to any inconsistency with the GATT 1994 that 
might arise from such measures. In US – Gasoline , the Appellate Body clarifie d that it is not a panel's 
legal conclusions of GATT-inconsistency that must  be justified under Article XX, but rather the 
provisions of a measure that are infringing the GATT 1994. See Appellate Body Report, EC – Seal Products , para. 5.185 (referring to Appellate Body Report, US – 
Gasoline , pp. 12 and 13). 
In Thailand – Cigarettes (Philippines) , the Appellate Body indicated that the analysis of the Article XX(d) 
defence in that case should focus on the "differences in  the regulation of imports an d of like domestic products" 
giving rise to the finding of less favourable treatment un der Article III:4. The aspects of the measure that have 
to be justified under the subparagraphs of Article XX are thus those giving rise to the finding of inconsistency 
under GATT 1994. See Appellate Body Report, Thailand – Cigarettes (Philippines) , para. 177. WT/DS453/R 
 
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  7.3.5.2.4  The question of whether measures 1,  2, 3, 4, 7 and 8 fall under Article XIV(c) 
of the GATS 
7.3.5.2.4.1  The legal standard und er Article XIV(c) of the GATS 
7.589.  We note that one part of the wording of Article XIV(c) of the GATS ("necessary to secure 
compliance with laws or regulations which are not inconsistent with the provisions of this 
Agreement") is very similar to that of Article XX(d) of the GATT 1994, which provides as follows: 
Article XX 
General Exceptions 
Subject to the requirement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, 
nothing in this Agreement shall be construe d to prevent the adoption or enforcement 
by any contracting party of measures: 
[…] 
(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 Article II 
and Article XVII, the protection of pate nts, trademarks and copyrights, and the 
prevention of deceptive practices. 
7.590.  In view of the similar wording of Articl e XIV(c) of the GATS and Article XX(d) of the 
GATT 1994, and bearing in mind the co nclusions of the Appellate Body in US – Gambling  to the 
effect that previous decisions under Article XX of the GATT 1994 are relevant to the analysis of 
Article XIV of the GATS
757, we shall be guided by these decisions where relevant for our analysis. 
7.591.  In this connection, we note that in Korea – Various Measures on Beef , the Appellate Body 
set forth the legal standard to be followed under Article XX(d) of the GATT 1994: 
For a measure … to be justified provisionally under paragraph (d) of Article XX, two 
elements must be shown. First, the measure must be one designed758 to "secure 
compliance" with laws or regulations that are not themselves inconsistent with some 
provision of the GATT 1994. Second, the measure must be "necessary" to secure such compliance. A Member who invokes Article XX(d) as a justification has the burden of demonstrating that these two requirements are met.
759 
7.592.  We agree with the panel in US - Gambling760 that the legal standard set forth by the 
Appellate Body in Korea – Various Measures on Beef is relevant to our analysis of Argentina's 
defence under Article XIV(c) of the GATS. 
7.593.  In order to justify its measures successfully under subparagraph (c) of Article XIV, 
therefore, Argentina should first demonstrate that measures 1, 2, 3, 4, 7 and 8 are designed to 
secure compliance with the relevant Argentine la ws and regulations that are not in themselves 
inconsistent with the GATS; and secondly, that these measures are "necessary" to secure such 
compliance. 
7.594.  We start by examining the first element of the legal standard. 
                                               
757 Appellate Body Report, US – Gambling , para. 291. (footnotes omitted) 
758 The Panel points out that the original text of the Appellate Body Report in English uses the term 
"designed to secure compliance ". In our view, the words " diseñada para " are closer to the original English than 
the terms " destinada a " used in the official translation We note that the parties use bo th terms indifferently 
"diseñada para " and " destinada a " in Spanish). 
759 Appellate Body Report, Korea – Various Measures on Beef , para. 157. See also Appellate Body 
Report, Thailand – Cigarettes (Philippines) , para. 177. 
760 Appellate Body Report, US – Gambling , paras. 6.536 and 6.537 and footnote 990. WT/DS453/R 
 
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  (a) First element: Whether the measures are designed to secure compliance with 
laws and regulations that are not in themselves inconsistent with the GATS  
7.595.  In examining whether a measure is designed to secure compliance with laws and 
regulations within the meaning of Article XX(d) of  the GATT 1994, previous panels considered that 
the Member invoking such a defence must (i) id entify the laws and regulations with which the 
challenged measure is intended to secure compliance, and prove that (ii) those laws and regulations are not in themselves inconsistent with WTO law; and (iii) that the measure challenged 
is designed to secure compliance with those laws or regulations.
761 
7.596.  We will follow the previous panels' approach, adapting it where necessary to the text of 
Article XIV(c) of the GATS. We begin by examin ing whether Argentina has duly identified the 
relevant laws and regulations for the purposes of its defence under Article XIV(c) of the GATS. 
(i) Whether Argentina has identified th e laws or regulations with which the 
challenged measures are intended to se cure compliance within the meaning of 
subparagraph (c) of Article XIV 
7.597.  In its first written submission, Argentina explained that measures 1, 2 3 and 4 are 
designed to secure compliance with the LIG "pursuant to which taxable income in Argentina is determined".
762 At the second substantive meeting with the Panel, Argentina specified that 
measures 1 to 4 are designed to secure compliance with Articles 1, 2, 5, 17, 80, 91, 92, 127, 129 
and 130 of the LIG, which "operate in a regulato ry framework that includes this Law and the 
regulations thereto, the administration and implementation of which are necessarily linked to the body of rules which also includes the LPT (Art icles 33, 38, 39, 45 and 46 in particular) and the 
Criminal Tax Law (Articles 1, 2 and 6 in particular) and is based on the constitutional principles 
enshrined in Articles 4, 16, 17 and 75 (second pa ragraph) of the National Constitution of the 
Argentine Republic.
763 Argentina also maintains that measure 7 secures compliance with 
Article 118.3 of Law No. 19.550 on Commercial Companies (LSC) and Article 188 of IGJ Resolution 
No. 7/2005.764 As regards measure 8, Argentina states that it secures compliance with Law 
No. 25.246 on Concealment and Laundering of Mone y of Criminal Origin in Argentina, and 
Articles 20, 20 bis and 21 thereof in particular.765 
7.598.  Panama objects to the way in which Argentina has sought to identify the relevant laws and 
regulations for the purposes of its defence under Article XIV(c) of the GATS. Initially, Panama argued that a mere reference to a law or regulation, or even a chapter of such a law or regulation, 
is not sufficient, and this should lead a panel to  conclude that the respondent erred in putting 
forward its defence. According to Panama, Argentina should have identified specific provisions or obligations in the LIG on the prevention of deceptive or fraudulent practices.
766 As regards 
measure 7, Panama argues that Argentina's mere affirmations regarding the laws or regulations 
with which Article 192 of IGJ Resolution No. 7/2005 seeks to secure compliance do not equate to proof.
767 Concerning measure 8, Panama argues that the domestic rules and regulations which 
form part of the defending Member's national legal order cannot be international rules. Therefore, 
the argument that the measure is necessary to secure compliance with international standards on transparency is without foundation under Article XIV(c) of the GATS.
768 
                                               
761 Panel Reports, Colombia – Ports of Entry , para. 7.514; and US – Shrimp (Thailand) , para. 7.174. See 
also Appellate Body Report, Korea – Various Measures on Beef , para. 157. 
762 Argentina's first written submission, para. 264. See also first written submission, para. 265; and 
second written submission, para. 71. 
763 Argentina's opening statement at the second meeting of the Panel, para. 26. 
764 Argentina's first written submission, para. 266; second written submission, para. 72; and opening 
statement at the second meeting of the Panel, para. 27. 
765 Argentina's first written submission, paras. 334-337; second written submission, para. 72; and 
opening statement at the second meeting of the Panel, para. 27. 
766 Panama's opening statement at th e first meeting of the Panel, para . 50; second written submission, 
paras. 2.186 and 2.187. Panama refers to the Appellate Body Report, Thailand – Cigarettes (Philippines) , 
para. 179 and footnote 271. Panama puts forward the same argument with regard to measure 2 (para. 2.323), 
measure 3 (para. 2.447), measure 4 (para. 2.550) and measure 8 (para. 2.801). 
767 Panama's second written submission, para. 2.752. 
768 Panama's second written submission, para. 2.800. WT/DS453/R 
 
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  7.599.  Panama also objects to the inclusion of several provisions, not only from the LIG but also 
from other Argentine regulations, and even its National Constitution, at the Panel's second meeting because, in its opinion, it broadens the scope of Argentina's defence and affects Panama's procedural rights. Panama also argues that Argentina has not explained how the measures in 
question are intended to secure compliance with each and every one of the new provisions invoked 
in Argentina's opening statement at the second meeting of the Panel.
769 
7.600.  Before turning to consider whether Argentina identified the relevant laws and regulations 
for the purpose of its defence under Article XIV(c) of the GATS, we shall respond to Panama's 
objection to Argentina's late identification of the specific provisions in the instruments referred to previously and the inclusion of new instruments, and to what extent this affects its procedural rights. 
7.601.  As we have already emphasized, due process is an essential feature of the WTO dispute 
settlement system.
770 In our view, the fact that Argentina referred to new instruments and specific 
provisions of the instruments identified as relevant "laws or regulations" at the second meeting is 
not extemporaneous, although it would have been desirable for Argentina to have done so earlier 
in the proceedings. We consider that a complaining party cannot expect the defending party invoking an exception to present its entire defence in its first written submission. Although the 
defending party should endeavour to present its defence in the most comprehensive manner 
possible, it should also have the opportunity to react to the rebuttal presented by the complaining 
party in its second written submission and at the second meeting. Bearing in mind that in WTO panel procedures, the parties present their second  written submissions simultaneously, the panel's 
second meeting with the parties represents the first opportunity the defending party has to 
challenge the rebuttal submission of the complaining party. 
7.602.  To this must be added the opportunity to respond to Argentina's arguments and to its 
responses to Panel questions. Indeed, in its op ening statement at the first substantive meeting 
with the Panel, Panama argued that Argentina "does not identify the specific obligation or obligations with which the measures in question allegedly seek to secure compliance". Panama 
develops this argument in its second written submission, criticizing Argentina, inter alia , for having 
made a mere reference to the LIG without specifying the relevant provisions.
771 Panama also 
argues that Argentina only refers to the LIG and does not mention any other law or regulation under Argentine legislation.
772 
7.603.  The Panel therefore considers that by specif ying the provisions of the LIG and citing other 
instruments at the second meeting, Argentina was responding to Panama's arguments. One of the purposes of the second meeting is precisely to respond to the arguments contained in the other 
party's second written submission. The Panel also considers that Panama had the opportunity to 
defend its position and to respond to Argentina' s arguments relating to the LIG, the LPT, the 
Criminal Tax Law and the National Constitution. Panama could have made known its arguments at 
the second meeting. Panama did not, however, make any statement in this regard at the second 
meeting, except to present a complaint in its closing statement with regard to the broadening of the scope of Argentina's defence.
773 Nor did Panama request more time in which to comment on 
the arguments presented by Argentina at the second meeting. We also note that in its comments 
on Argentina's response to a question from the Panel at the second substantive meeting, Panama 
                                               
769 Panama's closing statement at the second meeting of the Panel, para. 5. See also Panama's 
comments on Argentina's response to Panel question No. 82. In those comments, Panama claims that Argentina's arguments in its response to Panel questi on No. 82 are "extemporaneous". According to Panama, 
"the references to ot her regulations under Argentine law [i.e. other than the LIG] at this stage of the 
proceedings deprive Panama and third parties of the opportunity to defend  their position properly". Panama 
also argues that the inadmissibilit y of Argentina's request is made ev en more obvious by the fact that 
Argentina has produced no evidence on the text of the various rules which it is invoking at this stage. 
770 In fact "[d]ue process protecti on guarantees that the proceedings  are conducted with fairness and 
impartiality, and that one party is not unfairly disadvan taged with respect to other parties in a dispute". See 
Appellate Body Report, US – Continued Suspension , para. 433. 
771 Panama's opening statement at th e first meeting of the Panel, para . 50; second written submission, 
paras. 2.180, 2.323, 2.447 and 2.550. 
772 Panama's second written submission, para. 2.179. 
773 Panama's closing statement at the second meeting of the Panel, para. 5. The Panel recalls that in US 
– Gambling , the respondent only presented its defence for the first time in its second written submission and 
the Appellate Body considered that the complaining pa rty had had the opportunity to rebut the respondent's 
arguments. See Appe llate Body Report, US – Gambling , paras. 274-276. WT/DS453/R 
 
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  essentially put forward procedural arguments, but it could have taken the opportunity to respond 
to the substantive arguments presented by Argentina in its response as well.774 
7.604.  Although we consider that the reference to specific provisions of instruments previously 
indicated and the reference to new instruments at the second substantive meeting did not affect 
Panama's procedural rights, this does not mean that we shall not consider carefully whether 
Argentina has "identified" laws and regulations within the meaning of subparagraph (c) of Article XIV of the GATS. 
7.605.  The Panel notes that the instruments with which Argentina seeks to secure compliance are 
the same for measures 1, 2, 3 and 4, namely, the LIG, the LPT, the Criminal Tax Law and the National Constitution. With regard to measures 7 and 8, Argentina refers to different instruments. We start by examining whether Argentina has duly identified the relevant laws and regulations for 
the purposes of its defence under Article XIV(c) of the GATS in relation to measures 1 to 4 and will 
then examine whether it has done the same in relation to measures 7 and 8. 
1. Whether Argentina has "identified" laws and regulations within the 
meaning of subparagraph (c) of Article XIV in respect of measures 1 to 4 
7.606.  The Panel observes that in its first and second written submissions Argentina only refers to 
the LIG as a "law or regulation" with which measures 1 to 4 seek to secure compliance. At the 
second meeting, Argentina mentioned three additional instruments, namely: the LPT, the Criminal 
Tax Law and the National Constitution. At that meeting, Argentina also identified various provisions in those four instruments.
775 
7.607.  The concept of "laws and regulations"  was examined by the Appellate Body in Mexico – 
Taxes on Soft Drinks , which concluded that those terms "cover rules that form part of the 
domestic legal system of a WTO Member".776 All the instruments mentioned by Argentina form 
part of Argentina's domestic legal system. 
7.608.  We point out that Argentina has provided th e text of the LIG, as well as that of the LPT.777 
As regards the Criminal Tax Law (Law No. 24.769), Ar gentina only cites the wording of Article 1 in 
its response to a Panel question.778 As far as the National Constitution is concerned, Argentina has 
not provided the text. We note, however, that in its second written submission Panama refers to 
various constitutional principles and provides an exhibit citing various provisions of Argentina's 
National Constitution.779 
7.609.  In our view, when "identifying" laws or re gulations with which the measures at issue seek 
to secure compliance within the meaning of Article XIV(c) of the GATS, it is not enough to refer to 
them or to their provisions; the respondent must pr ovide their texts, either by way of an exhibit or 
by citing their wording in its submissions. It does not appear reasonable to us, however, to require 
a party to present an exhibit that is already in our record. Accordingly, even though Argentina has 
not provided them, we shall take into account the provisions of the National Constitution cited by Argentina, provided that they are contained in the Panel's record
780, in order to examine 
Argentina's defence. This is not the case for the Criminal Tax Law whose text has not been 
provided by Argentina and is not in our record, with the exception of Article 1, the wording of 
which is provided by Argentina in its response to Panel question No. 82. 
                                               
774 Panama's comments on Argentina's response to Panel question No. 82. 
775 Argentina's opening statement at the second meeting of the Panel, para. 26. See also Argentina's 
response to Panel question No. 82. 
776 The Appellate Body added that "l aws and regulations" also include "rules deriving from international 
agreements that have been incorporated into the domestic  legal system of a WTO Memb er or have direct effect 
according to that WTO Member's legal system". See Appellate Body Report, Mexico – Taxes on Soft Drinks , 
para. 79. 
777 Gains Tax Law, (Exhibits PAN-4 / ARG-42); Law on Tax Procedure (Exhibits PAN-9 / ARG-45). 
778 Argentina's response to Panel question No. 82. 
779 Panama's second written submission, paras. 2.223 and 2.342 (referring to Exhibit PAN-83, 
"Constitutional principles on tax matters"). 
780 The following are the provisions of Argentina's Nati onal Constitution contained in full or in part in 
Exhibit PAN-83: Articles 4, 16, 17, 19, 52 and 75. WT/DS453/R 
 
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  7.610.  In the light of the foregoing, and as far as measures 1 to 4 are concerned, we consider 
that Argentina has identified the following laws and regulations within the meaning of Article XIV(c): the LIG, the LPT, Article 1 of th e Criminal Tax Law and those provisions of the 
National Constitution contained in our record. 
7.611.  We turn to examine whether Argentina has duly "identified" the relevant "laws and 
regulations" in the case of measures 7 and 8. 
2. Whether Argentina has "identified" the laws and regulations 
within the meaning of subparagraph (c) of Article XIV in respect of 
measures 7 and 8 
7.612.  We note that since its first written submission Argentina has referred to Article 118.3 of 
Law No. 19.550 on Commercial Companies (LSC) and Article 188 of IGJ Resolution No. 7/2005 as 
the "laws and regulations" with which measure 7
781 seeks to secure compliance. 
7.613.  According to Argentina, measure 8 seeks to secure compliance with Law No. 25.246 on 
Concealment and Laundering of Money of Criminal Origin, particularly Articles 20, 20 bis and 21 
thereof.782 Argentina did not identify additional instruments at a subsequent stage of the 
proceedings as "laws or regulations" relevant to measures 7 and 8. We also note that, contrary to what Panama appears to assert
783, Argentina does not contend that measure 8 is justified in order 
to secure compliance with international standards. 
7.614.  As is the case of the instruments identified  in relation to measures 1 to 4, the instruments 
to which Argentina refers in relation to measures 7 and 8, namely, the LSC, IGJ Resolution No. 7/2005 and Law No. 25.246 on Concealment and Laundering of Money of Criminal Origin, form 
part of Argentina's legal system and are therefor e "laws and regulations" within the meaning of 
Article XIV(c) of the GATS. 
7.615.  As we explained earlier, in order to determine whether these laws and regulations have 
been "identified" within the meaning of Article XIV(c) of the GATS it is not enough to refer to them 
or to their provisions; the respondent must provide their texts, either by means of an exhibit or by 
setting out their wording in its submissions. We note that Argentina has provided us with the text 
of Article 118.3 of the LSC and Article 188 of IGJ Resolution No. 7/2005 in relation to 
measure 7
784, as well as Articles 20, 20 bis and 21 of Law No. 25.246 on Concealment and 
Laundering of Money of Criminal Origin in relation to measure 8.785 
3. Conclusion 
7.616.  In the light of the foregoing, the Panel co nsiders that Argentina has identified the laws and 
regulations with which it seeks to secure compliance by means of measures 1, 2, 3, 4, 7 and 8 within the meaning of Article XIV(c) of the GATS. 
(ii) Whether the laws or regulation s identified are not in themselves 
inconsistent with the provisions of the GATS786 
7.617.  We continue our analysis by examining whether the laws and regulations identified by 
Argentina, namely, Articles 1, 2, 5, 17, 80, 91, 92, 127, 129 and 130 of the LIG, Articles 33, 38, 
39, 45 and 46 of the LPT, Article 1 of the Crim inal Tax Law, the provisions of the National 
Constitution contained in our record, Article 118.3 of the LSC, Article 188 of IGJ Resolution 
                                               
781 Argentina's first written submission, para. 266; second written submission, para. 72; and opening 
statement at the second meeting of the Panel, para. 27. 
782Argentina's first written submission, paras. 334 and 337; second written submission, para. 72; and 
opening statement at the second meeting of the Panel, para. 27. 
783 Panama's second written submission, para. 2.800. 
784 Law on Commercial Companies, (Exhibits PAN-34 / ARG-43); and IGJ Resolution No. 7/2005, 
(Exhibits PAN-62 / ARG-33). 
785 Law No. 25.246 on Concealment and Laundering of Money of Criminal Origin, (Exhibit ARG-32). 
786 We note that the text of Article XIV(c) of the GATS  refers to the provisions "of this Agreement", so it 
is our understanding that inconsistency must  be examined in relation to the GATS. WT/DS453/R 
 
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  No. 7/2005 and Articles 20, 20 bis and 21 of Law No. 25.246 on Concealment and Laundering of 
Money of Criminal Origin are not in themselves inconsistent with the provisions of the GATS. 
7.618.  Argentina argues that its defensive tax measures, similar to those adopted by other WTO 
Members, have been devised to secure compliance with laws and regulations which are in 
themselves consistent with the GATS. According to Argentina, measures 1 to 4 and measure 7 are 
fully consistent with the GATS.787 Argentina also claims that measure 8 is designed "to secure 
compliance" with laws and regulations established in accordance with the international 
recommendations on preventing the concealment and laundering of money of criminal origin.788 
7.619.  Panama responds that Argentina has not shown that the LIG is consistent with the GATS 
and asserts that it is in itself inconsistent with the GATS, especially Articles II:1 and XVII, as can be seen from Panama's numerous claims.
789 Panama also claims that Argentina has also failed to 
explain why Articles 118 of the LSC and 188 of IGJ Resolution No. 7/2005 and Law No. 25.246 on 
Concealment and Laundering of Money of Criminal Origin should be considered consistent with the GATS.
790 
7.620.  The Panel agrees with Panama that it is Argentina's responsibility to prove that its 
measures meet the conditions necessary for the defence invoked. In this connection, we recall that on several occasions the Appellate Body has emphasized that the legislation of a defending 
Member shall be considered WTO-consistent until proven otherwise.
791 
7.621.  Beginning our examination with the LIG and the LPT, we note that Panama has made 
claims of inconsistency with regard to certain measures that are applied pursuant to specific provisions found in these two instruments. Panama challenges in particular measure 1 
(withholding tax on payments of interest or remuneration, maintained pursuant to Article 93(c) of 
the LIG); measure 2 (presumption of unjustified in crease in wealth, maintained by virtue of the 
unnumbered article added after Article 18 of the LPT); measure 3 (transaction valuation based on 
transfer prices, maintained pursuant to Article 15.2 of the LIG); and measure 4 (payment received 
rule for the allocation of expenditure, maintained pursuant to Article 18 of the LIG). Panama has not therefore challenged these two instruments as a whole. We also note that Panama has not 
challenged any provision of the Criminal Tax Law or Argentina's National Constitution. 
7.622.  We recall that in sections 7.3.2.2.4 and 7.3.4.2.4 above we concluded that measures 1, 2, 
3 and 4 are inconsistent with Article II:1 of the GATS. This does not mean that the GATS inconsistency of certain provisions of the LIG and the LPT results in the GATS inconsistency of the 
other provisions of these two instruments. 
7.623.  As regards the laws and regulations cited in relation to measure 7, the Panel notes that 
Panama has not challenged any provision of the LSC. Panama challenges the requirements for the 
registration of branches, maintained pursuant to Article 192 of IGJ Resolution No. 7/2005, and 
Argentina refers to Article 188 of the same Resolution as a relevant "law or regulation". The Panel has found that the measure challenged by Panama and maintained by virtue of Article 192 of IGJ 
Resolution No. 7/2005 is inconsistent with Article II:1 of the GATS. Panama has not, however, put 
forward any claims of inconsistency in relation to other provisions of IGJ Resolution No. 7/2005 and the inconsistency of one provision of IGJ Re solution No. 7/2005 does not mean that the other 
provisions of this instrument are also GATS-inconsistent. 
7.624.  Lastly, we recall that we have concluded that the foreign exchange authorization 
requirement (measure 8), maintained by virtue of Section I of Communication "A" 4940 is inconsistent with Article II:1 of the GATS. Pana ma has not, however, challenged Law No. 25.246 
on Concealment and Laundering of Money of Criminal Origin, which Argentina cites as a "law or 
regulation" with which measure 8 seeks to secure compliance. 
                                               
787 Argentina's first written submission, para. 267. 
788 Argentina's first written submission, para. 328. 
789 Panama's second written submission, paras. 2. 197 and 2.198. See also second written submission, 
paras. 2.329, 2.451 and 2.554. 
790 Panama's second written submission, paras. 2.754 and 2.802. 
791 Appellate Body Report, US – Carbon Steel , para. 157. See also Appellate Body Reports, 
Dominican Republic – Import  and Sale of Cigarettes , para. 111, and US – Gambling , para. 138. WT/DS453/R 
 
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  7.625.  The Panel recalls that a Member's legislation shall be presumed WTO-consistent until 
proven otherwise. In our view, the findings of in consistency of certain provisions of the LIG, the 
LPT and IGJ Resolution No. 7/2005 do not mean that  the other provisions of these instruments are 
also inconsistent with the GATS.792 The Panel therefore considers that it is not necessary to 
undertake a detailed examination of the instruments and/or provisions invoked by Argentina in 
order to establish whether they are consistent with the GATS. 
7.626.  In the light of the foregoing, the Panel co ncludes that, for the purposes of its analysis of 
Argentina's defence under subparagraph (c) of Article XIV of the GATS, Argentina has identified 
laws and regulations which "are not inconsistent with the provisions of [the GATS]". 
(iii) Whether the measures in question  are designed to secure compliance 
with the laws or regulations identified by Argentina that are not in 
themselves inconsistent with the GATS 
7.627.  We continue our examination of whether measures 1, 2, 3, 4, 7 and 8 are designed to 
secure compliance with the laws and regulations identified by Argentina. 
7.628.  In Mexico – Taxes on Soft Drinks , the Appellate Body explained that the words "to secure 
compliance" refer to two types of measure which a Member may justify under subparagraph (d) of 
Article XX of the GATT 1994. According to the Ap pellate Body, these words "relate to the design793 
of the measures sought to be justified".794 The Appellate Body considered that "a measure can be 
said to be designed 'to secure compliance' even  if the measure cannot be guaranteed to achieve 
its result with absolute certainty".795 Applying this conclusion of the Appellate Body to the similar 
language used in Article XIV(c) of the GATS, we proceed to determine whether measures 1, 2, 3, 
4, 7 and 8 are "designed to" secure compliance with the laws and regulations identified by 
Argentina, even if it is not possible to guarantee that they will achieve that result with absolute certainty.
796 We start with measures 1 to 4. 
1. Whether measures 1 to 4 are "des igned to secure compliance" with 
the laws and regulations identified 
7.629.  We note that Argentina argues that measures 1 to 4 are designed to secure compliance 
with the LIG, under which the tax base for Argentine taxpayers' gains tax is determined. Argentina 
asserts that these defensive tax measures were devi sed to lessen the risk of artificial erosion of 
the tax base through deceptive and fraudulent transactions between Argentine taxpayers and entities located in non-cooperative jurisdictions. Argentina also maintains that measure 3 in 
particular, which increases the information requirements for transactions with non-cooperative 
jurisdictions, ensures compliance with the LIG, which establishes the general transfer pricing 
regime. This regime's overall objective is to determine the accuracy of the value of transactions 
between related parties, thereby preventing fraudulent and simulated transactions which have as 
their sole purpose to evade taxes and/or transfer  profits to non-cooperative jurisdictions where 
there is a lack of tax transparency.
797 
7.630.  Panama responds that Argentina does not explain how such measures secure compliance 
with the LIG. In its opinion, the failure to specify the particular LIG provision with which it is sought to secure compliance means that it is not possible to assess properly to what extent the measure is designed to achieve that compliance objective.
798 Panama contends that, for each of 
                                               
792 The Panel points out that in Colombia – Ports of Entry the panel reached the same conclusion in a 
similar situation. See Panel Report, Colombia – Ports of Entry , para. 7.530 . 
793 As we indicated earlier, in the English text of the Appellate Body Report, the word "design" is used, 
which should be translated into Spanish as " diseño ". Likewise, the Appellate Body re fers to "measures designed 
to secure compliance". In the Spanish version of our analysis, therefore, we shall use the words " diseño " and 
"diseñado para " because we consider that they are closer to th e original English text of the Appellate Body 
Report. See footnote 758 above. 
794 Appellate Body Report, Mexico – Taxes on Soft Drinks , para. 72. 
795 Appellate Body Report, Mexico – Taxes on Soft Drinks , para. 74. 
796 The Panel also recalls that it now has to assess whether the measures in question are designed to 
secure compliance with the relevant laws and regulations. The Panel is not now assessing to what extent the 
measures in question contribute to complian ce with the relevant laws and regulations. 
797 Argentina's first written submission, paras. 264 and 265; second written submission, para. 71. 
798 Panama's second written submission, paras. 2.199, 2.330, 2.452 and 2.555. WT/DS453/R 
 
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  the measures 1 to 4, Argentina's concern focuses on  a very specific situation (for example, insider 
loans) and that the measure's scope goes beyond that concern.799 Panama claims that Argentina 
has not shown how the practices referred to by Arge ntina allegedly violate the LIG and, therefore, 
Panama concludes that the measure is not "designed" to secure the compliance in question.800 
Panama contends that it is important to draw a distinction between tax evasion and avoidance, 
because although evasion is illegal, avoidance is legal.801 Panama also argues that Argentina's real 
concern focuses on the possibility of tax evasion and not so much on avoidance. Panama argues 
that Argentina only invoked the LIG, which does not regulate the offence of tax evasion as such. 
According to Panama, Argentina's failure to refer to the rules governing tax evasion issues is an irremediable error.
802 
7.631.  Panama also argues that Argentina does not adequately explain the circumstances or 
problems which led to the introduction of measure 1 (withholding tax on payments of interest or 
remuneration) and measure 2 (presumption of unjustified increase in wealth).803 
7.632.  We turn now to examine the content of th e laws and regulations identified by Argentina. 
We begin with the provisions of the LIG identifi ed by Argentina. The LIG establishes the general 
framework governing the collection of gains tax.  Its first two articles define the subjects 
(Article 1)804 and the object of the tax, i.e. the taxable "gains" (Article 2).805 Article 5 of the LIG 
enshrines the principle of source or territoriality as the criterion for attribution of the taxable 
subject matter, according to which any sums originating in activities conducted within Argentine territory, by either Argentine or foreign service suppliers, are deemed to be gains of Argentine source.
806 Article 17 of the LIG defines the net gains subject to the tax and Article 80 the 
deductions permitted.807 Article 91 of the LIG provides that  the net profits earned by foreign 
suppliers are subject to a tax of 35%, which mu st be withheld and paid to the AFIP by the 
                                               
799 Panama's second written submission, paras. 2.204, 2.331-2.333, 2.453, 2.556 and 2.557. 
800 Panama's second written submission, paras. 2.207 and 2.334. 
801 Panama's second written submission, para. 2.193. 
802 Panama's comments on Argentina's response to Panel question No. 82. 
803 Panama's second written submission, paras 2.202 and 2.330. 
804 Article 1 of the LIG provides as follows: 
All gains ( ganancias ) earned by natural or legal persons are subject to the emergency levy 
established by this Law. The persons referred to in the preceding paragrap h who are resident in the country shall pay tax 
on all their gains earned in th e country or abroad, and may cred it against the tax governed by 
this Law the sums actually paid under analogous levies on their activities abroad, up to an 
amount not exceeding the increased tax obligation resulting from inclusion of the gains earned abroad. Non-residents shall pay tax only on their gains from Argentine sources, in  accordance with the 
provisions of Title V. 
Undivided estates are taxpayers in accordance with the provisions of Article 33. See the Gains Tax Law, (Exhibit PAN-4). See also Exhibit ARG-42. 
805 Article 2 of the LIG provides as follows: 
For the purposes of this Law, without prejudice to the special provisions in each category, and, even 
when not specified therein, gains are: (1) yields, income or enrichments subject to a periodicity that implies the permanence of the source producing them and th eir authorization; 
(2) yields, income, profits or enrichments, whether or not complying with the conditions of the previous paragraph, which are earned by the responsible pers ons referred to in Article 69 and all those derived 
from other companies, enterprises or single-person businesses, unless, though not in the case of the taxpayers covered by in Article 69, they carry out ac tivities indicated in subparagraphs (f) and (g) of 
Article 79 and they are not supplemented by a commercial  operation, in which case the provisions of the 
previous paragraph shall be applicable; (3) the profits earned from the disposal of deprec iable movables, regardless of the person who earns 
them. See the Gains Tax Law, (Exhibit PAN-4). See also Exhibit ARG-42. 
806 Article 5 of the LIG provides as follows:  
In general and without prejudice to the special provisions of the following articles, gains of Argentine source are those derived from assets situated, placed or used economically in the Republic, from the performance in the territory of th e Nation of any act or activity susceptible of 
producing profits, or of action s occurring within the limits of the same regardless of the 
nationality, domicile or residence of the holder or  of the parties intervening in the operations, or 
the place where the contracts are concluded. 
See the Gains Tax Law, (Exhibits PAN-4 / ARG-42). 
807 Gains Tax Law, (Exhibits PAN-4 / ARG-42). WT/DS453/R 
 
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  Argentine taxpayer.808 The 35% rate is applied to the presumed net gain (Article 92). Articles 127, 
129 and 130 of the LIG define the "gains of foreign source" taxable in Argentina. These three articles are a necessary complement to Articles 1 and 2 of the LIG, which establish the obligation for Argentine residents to pay tax on all the gains earned in Argentina or abroad.
809 
7.633.  The LPT810 lays down the methods for collecting taxes in Argentina, including procedures to 
ensure verification (Article 33), violations and applicable sanctions (Articles 38 and 39). Article 38 
defines the procedures and sanctions applicable in cases of non-compliance with the obligation to 
submit sworn declarations (including those on gains subject to the LIG), which constitute the initial 
basis for determining the taxes payable by the Argentine taxpayer. Article 39 establishes sanctions for non-compliance with formal obligations by the taxpayer, for example, keeping documentary 
evidence of transactions or furnishing data required by the AFIP in order to control international 
operations. The LPT also provides for sanctions for omission and tax fraud (Articles 45 and 46). 
Article 45 establishes sanctions for cases where the sworn declaration is either not submitted or is inaccurate, while Article 46 establishes sanctions for any person engaging in tax fraud through 
misleading declarations or wilful concealment.
811 
7.634.  Article 1 of the Criminal Tax Law, the only provision identified by Argentina, provides that 
"any obligor who, by means of misleading declarations, wilful concealment or any other scheme or 
deception, by action or omission evades all or so me of the taxes payable to the national treasury, 
the provincial treasury or the Autonomous City of Buenos Aires, shall be punished by a term of imprisonment of two (2) to six (6) years provid ed that the amount evaded exceeds the sum of 
four hundred thousand pesos ($400,000) for each tax and for each financial year, even in the case 
of spot taxes or a fiscal period of less than one (1) year". 
7.635.  The provisions of its National Constitution identified by Argentina
812 refer to various tax 
principles.813 According to Article 16 of the Argentine National Constitution "[a]ll its inhabitants are 
equal before the law … Equality is the basis of taxation".814 In the commentary in the second 
column entitled "Synthesis", it is explained that the principle of equality of taxation means that the 
law "shall ensure the same treatment for persons in analogous situations"815 Accordingly, equality 
refers to each taxpayer's capacity to pay: taxpayers with equal capacity to pay must pay the same 
tax. Moreover, Articles 4 and 75.2 determine that taxes are fixed by congressional law and are an essential source of financing for the State.
816 Likewise, Article 17, declaring the inviolability of 
private property, confirms that only Congress may levy the taxes mentioned in Article 4 of the 
Constitution. 
7.636.  From our examination of the laws and regulations identified by Argentina, we may 
conclude that the LIG, the LPT, the relevant se ction of the Criminal Tax Law and the National 
Constitution form the backbone of the regulatory framework for collecting taxes in Argentina. The 
                                               
808 Article 91 of the LIG, in part, provides as follows:  
When net profits of any category are paid to companies, enterprises or any other beneficiary 
abroad, with the exception of divi dends and profits of the persons to which items 1, 2, 3, 6 and 7 
of subparagraph (a) of Article 69 refer, as well as  the profits of the establishments included in 
subparagraph (b) of the same Article, whoever pa ys them must withhold and transfer to the 
Federal Public Revenue Administration, an autono mous body within the Mi nistry of the Economy 
and Public Works and Services, as sole and final payment, thirty five % (35%) of such profits. 
See the Gains Tax Law, (Exhibit PAN-4). See also Exhibit ARG-42. 
809 See the Gains Tax Law, (Exhibits PAN-4 / ARG-42). 
810 Law on Tax Procedure, (Exhibits PAN-9 / ARG-45). 
811 Article 46 of the LPT provides the following: "Any one who, by means of misl eading declarations or 
wilful concealment, by action or omis sion defrauds the Treasury, shall be punishable by a fine of TWO (2) up to 
TEN (10) times the amount of the tax evaded". See the Law on Tax Procedure, (Exhibits PAN-9 / ARG-45). 
812 We recall that we are only cons idering the provisions of the National Constitution found in Exhibit 
PAN-83 ("Constitutional Principles on Tax Matters"). 
813 Panama's second written submission paras. 2.223 and 2.342 (referring to Exhibit PAN-83, 
"Constitutional Principles on Tax Matters"). This document cites relevant constitutional provisions on tax matters and comments on each of them. 
814 Constitutional Principles on Tax Matters, (Exhibit PAN-83), p. 3. 
815 Constitutional Principles on Tax Matters, (Exhibit PAN-83), p. 3. 
816 Pursuant to Article 75.2 of the Argentine National Constitution, Congress is empowered "[t]o levy 
indirect taxes as a power concurrent  with the provinces. To levy dire ct taxes for a specified term and 
proportionally equal throughout the na tional territory, provided that the defence, common security and general 
welfare of the State so require it." See Constitutional Principles on Tax Matters, (Exhibit PAN-83), p. 3. 
(emphasis original) WT/DS453/R 
 
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  National Constitution in particular obliges the Argentine National Congress and the Government to 
levy taxes equitably, according to each taxpayer's capacity to pay. The relevant parts of the LIG 
and the LPT develop the tax principles established in the Argentine National Constitution. They thus oblige the competent authorities to levy tax on the earnings of natural and legal persons 
resident in Argentina according to their capacity to pay, ensuring that taxpayers with equal 
capacity pay the same amount of tax. 
7.637.  In our view, measures 1 to 4 are designed to secure compliance with the overall objective 
of the LIG, which is to collect the gains tax owed  by Argentine taxpayers. They are also designed 
to secure compliance with certain key provisions of the LIG. As Argentina explains, measures 1 to 4 were established to prevent fraudulent and simulated transactions whose ultimate objective is to evade taxes and/or transfer profits to jurisdiction s where there is a lack of tax transparency. In 
other words, these measures enable the Argentine authorities to determine whether transactions 
with non-cooperative jurisdictions have a legitimate commercial purpose or are simply aimed at evading the payment of taxes in Argentina. Thus, by making transactions with a high risk of 
evasion subject to additional information requir ements (measures 2, 3 and 4) or higher tax 
(measure 1), these measures discourage harmful tax practices and enable the authorities to ensure that Argentine residents are taxed "on all their gains earned in the country or abroad", as 
provided in Article 1 of the LIG. By reducing  the opportunities for conducting fraudulent 
transactions, measures 1 to 4 are also designed to secure compliance with Article 5 of the LIG, which considers earnings from activities performe d in Argentine territory, by either Argentine or 
foreign service suppliers, to be gains of Argentine source (and thus subject to taxation in 
Argentina). 
7.638.  Measures 1 to 4 are also designed to se cure compliance with the LPT. For example, the 
measures enable Argentina's tax authorities to prevent the use of transactions with service 
suppliers from non-cooperative countries to defraud the treasury by means of misleading 
declarations or wilful concealment, which is prec isely the goal pursued by Article 46 of the LPT. 
This would also be the case for the offence defined in Article 1 of the Criminal Tax Law. 
7.639.  Their design also makes it easier to secure compliance with the relevant provisions of 
Argentina's National Constitution, especially Article 16 promoting tax equality, which provides that taxpayers with the same contributive capacity must pay the same tax. Consequently, by mitigating the risks of tax evasion, measures 1 to 4 contribute to ensuring that, given equal contributive 
capacity, honest taxpayers do not pay higher taxes than dishonest taxpayers.
817 
7.640.  With regard to Panama's argument that a distinction has to be made between tax evasion 
and tax avoidance, we consider that such a distinction is not relevant for the purposes of 
Argentina's defence under Article XIV(c) of the GATS. Indeed, it is sufficient for Argentina to 
demonstrate that measures 1 to 4 are designed to secure compliance with its regulations and laws, including those established to prevent tax avoidance.
818 
                                               
817 The prejudicial effect of harmfu l tax practices on taxpayers has been recognized in the relevant 
international fora. See, for example OECD, OECD's Project on Harmful Tax Practices, The 2001 Progress 
Report , (Exhibit ARG-7), para. 2 ("[u]ltimately, taxpayer confidence in the integrity and fairness of the tax 
system, and in government in general, declines as honest taxpayers feel  that they shoulder a greater share of 
the tax burden and that government cannot effect ively enforce its own tax laws", available at 
http://www/oecd.org/ctp/harmful/2664450.pdf  (exhibit provided in Englis h; Spanish text available at 
http://www.ief.es/recursos/publica ciones/libros/informes_OCDE.aspx ); G-20 Statement on Transparency and 
Exchange of Information for Tax Purposes, 21 November 2004, (Exhibit ARG-85), p. 1, ("[l]ack of access to 
information in the tax field has significant adverse effects.  It allows some to escape tax that is legally due and 
is unfair to citizens that comply with the tax laws (exhibit provided in English; Spanish translation by the WTO Secretariat); and OECD Addressing base erosion and profit shifting, (Exhibit ARG-22 ), p. 50, available at 
http://www.oecd.org/tax/addressing-base-erosion-and-profit-shifting-9789264192744-en.htm  (exhibit 
provided in English; Spanish text available at: http://www.oecd-ilibrary.org/taxa tion/abordando-la-erosion-de-
la-base-imponible-y-la-deslocalizacion-de-beneficios_9789264201224-es ) ("if other taxpayers (including 
ordinary individuals) think that multinational corporations can legally avoid paying income tax it will undermine 
voluntary compliance by all taxpayers – upon which modern tax administration depends."). 
818 We note in this regard that the evidence provided by Argentina indicates that in the relevant 
international fora both tax evasion and tax avoidance are considered to be problematic practices that should be 
combated and eliminated. For example, in 2013, the G-20 stated: "Cross-border tax evasion and avoidance 
undermine our public finances and our people's trust in  the fairness of the tax system. Today, we endorsed 
plans to address these problems and committed to take steps to change our rules to tackle tax avoidance, WT/DS453/R 
 
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  7.641.  We therefore disagree with Panama's claim that measures 1 to 4 are not designed to 
secure compliance with the LIG because the LIG "does not regulate the offence of tax evasion".819 
We consider that, despite not "defining" tax offences, the LIG is relevant as a law or regulation with which the measures at issue seek to secure compliance. If we were to follow Panama's 
argument that only "laws or regulations" that "def ine offences" can be relevant for the purposes of 
applying Article XIV(c) of the GATS, we would considerably diminish the scope of the "laws or 
regulations" that may be relevant under this provision. Panama's approach could have as a 
consequence that only criminal laws or regulations could be considered relevant "laws or 
regulations" for the purposes of applying Article XIV(c) of the GATS. The Panel considers, on the 
contrary, that the concept of "laws or regulations" within the meaning of Article XIV(c) also covers laws and regulations that establish obligations to be met in the jurisdiction of the Member invoking 
the provision. More specifically, laws or regulations that define offences are only relevant to the 
extent that there is a prior obligation that must be met. 
7.642.  In the light of the foregoing, the Panel considers that Argentina has demonstrated that 
measures 1, 2, 3 and 4 are designed to secure co mpliance with the relevant provisions of the LIG, 
the LPT, the Criminal Tax Law and the National Constitution of Argentina. 
7.643.  We now examine whether measures 7 and 8 are designed to secure compliance with the 
laws and regulations identified by Argentina. 
2. Whether measures 7 and 8 are "designed to secure compliance" with 
the laws and regulations identified 
7.644.  With regard to measure 7, Argentina claims that it ensures compliance with Articles 118.3 
of Law No. 19.550 on Commercial Companies (LSC) and 188 of IGJ Resolution No. 7/2005, which 
require proof of the legitimacy of commercial activities from the parent company in the home jurisdiction for the purpose of establishing branches in the City of Buenos Aires.
820 In the case of 
measure 8, Argentina maintains that it is a measure necessary for securing compliance with Law 
No. 25.246 on Concealment and Laundering of Money of  Criminal Origin in the area of prevention 
of money laundering. According to Argentina, the request for prior authorization in order to sell 
foreign currency to non-residents for the repatriation of direct investment enables the banking 
entity to place on record that it has verified th e documentation submitted by the customer in order 
to approve the type of investment declared, an d that the funds used for the purchase of the 
foreign currency transfer come from the sale within the country of the assets realized, as well as 
the reasonableness and authenticity of the transaction.821 
7.645.  In connection with measure 7, Panama responds that Argentina did not put forward any 
argument to show that this measure is designed to secure compliance with Articles 118 of the LSC 
and 188 of IGJ Resolution No. 7/2005, and that it effectively does so. According to Panama, 
Argentina neither identified nor submitted evidence  regarding the fraudulent or deceptive practices 
that are explicitly contrary to Articles 118 of  the LSC and 188 of IGJ Resolution No. 7/2005 and 
which it is sought to prevent or mitigate through Article 192 of IGJ Resolution No. 7/2005.822 
Panama argues that Argentina has also provided no explanation of how measure 8 is intended to secure compliance with Law No. 25.246 on Concealment and Laundering of Money of Criminal Origin.
823 
                                                                                                                                               
harmful practices, and aggressive tax planning." See the G-20 Declaration, Saint Petersburg Summit, 
5-6 September 2013, (Exhibit ARG-87), p. 4 (exhibit provided in English; Spanish translation by the WTO Secretariat). We also note that the multilateral Counci l of Europe/OECD Convention on Mutual Assistance in 
Tax Matters condemns both tax evasion and tax avoida nce: "The Council of Europe/OECD Convention on 
Mutual Administrative Assistance in Tax Matters was de veloped jointly by the Council of Europe and the OECD 
to provide for all possible forms of ad ministrative co-operation between states in the collection and assessment 
of taxes, in particular with a view to combatin g tax avoidance and evasion." See the OECD Report, Tax 
Co-operation 2009: Towards a Level Playing Field , (Exhibit ARG-41), p. 346 (exhibit provided in English; 
Spanish translation by the WTO Secretariat). 
819 Panama's comments on Argentina's response to Panel question No. 82. 
820 Argentina's first written submission, para. 266; and second written submission, para. 72. 
821 Argentina's first written submission, paras. 328 and 329 and Explanatory Annex No. 2, para. 52; and 
second written submission, para. 72. 
822 Panama's second written submission, paras. 2.755 and 2.756. 
823 Panama's second written submission, para, 2.802. WT/DS453/R 
 
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  7.646.  As regards measure 7, we note that Section XV of the LSC824, which includes Article 118, 
concerns companies incorporated abroad. Article 118.3 of the LSC establishes various requirements which a company incorporated abroad must meet when setting up in Argentina, such as proving that the company complies with the laws of its country, establishing domicile in 
Argentina or showing good cause for the decisi on to create the representative office, and 
designating the person to be responsible for running it. In turn, IGJ Resolution No. 7/2005 
establishes various requirements for the registration of companies incorporated abroad. Article 188 
of this Resolution specifies the requirements to  be met for registering a foreign company under 
Article 118.3 of the LSC. This provision describ es the documentation and type of information 
required for the purpose of registering a foreign company in Argentina (notably, the particulars of the partners, the amount of the assets etc.).
825 Consequently, the additional information required 
of companies located in non-cooperative jurisdictions intending to set up branches in the City of 
Buenos Aires, pursuant to Article 192 of IGJ Resolution No. 7/2005 under which measure 7 is 
maintained, enables the Argentine authorities to obtain the relevant information for the purpose of 
applying Article 118.3 of the LSC and Article 188 of IGJ Resolution No. 7/2005. 
7.647.  As regards measure 8, Argentina has argued that it is designed to secure compliance with 
Law No. 25.246 on Concealment and Laundering of Money of Criminal Origin826, which establishes 
rules to combat money laundering. Articles 20, 20 bis and 21, cited by Argentina, refer to the duty 
to inform the Financial Intelligence Unit (UIF). In particular, the various persons required to report to the UIF are identified (Article 20), the content of the reporting duty is defined (Article 20 bis) 
and other related obligations are established (f or example, the obligation for the persons 
concerned to collect relevant information from their clients). The BCRA is expressly identified as a 
person subject to the duty to report to the UIF.  In our view, by requiring the BCRA to conduct 
closer scrutiny of transfers to non-cooperative jurisdictions in order to ensure that the operations 
concerned, are of genuine origin, Communication "A" 4.940, Section I, under which measure 8 is 
maintained, is designed to secure compliance with Law No. 25.246 on Concealment and Laundering of Money of Criminal Origin. These additional information requirements enable the 
Argentine authority, for example, to verify the identi ty of the person obliged to report to the UIF in 
situations where the requested authority fails to provide this information, as in the case of the authorities of a country which does not exchange information with Argentina. Measure 8, therefore, makes it possible to verify that the repatriation of capital does not cover up a money 
laundering operation. 
7.648.  Taking the above into account, the Panel considers that Argentina has demonstrated that 
measure 7 is designed to secure compliance with the relevant provisions of Law No. 19.550 on 
Commercial Companies (LSC) and IGJ Resolution No. 7/2005, and that measure 8 is designed to 
secure compliance with the relevant provisions  of Law No. 25.246 on Concealment and Laundering 
of Money of Criminal Origin. 
3. Relevance of the prevailing circumstances at the time of 
implementing measures 1, 2, 3, 4, 7 and 8 
7.649.  We recall that previous panels have taken into account the prevailing circumstances at the 
time of implementing measures when assessing whether these were designed to secure 
compliance with laws and regulations under Article XX(d) of the GATT 1994.
827 We consider that 
such analysis is also relevant to our an alysis under Article XIV(c) of the GATS. 
7.650.  We note that Argentina has presented eviden ce of the existence of fraudulent tax practices 
between Argentine taxpayers and non-cooperative ju risdictions. These practices involve "offshore" 
companies based in non-cooperative jurisdictions, including Panama. The fraudulent manoeuvres documented by the AFIP include the use of such co mpanies as owners of intangible assets of an 
economic group, to which royalties or usage fees are payable; the supply of intra-group services; 
intermediation in buying and selling transactions and the simulation of financial loans. The AFIP found that Argentine residents participate in "offshore" companies located in Panama without informing the Argentine tax authorities and use those companies to evade tax. The AFIP also 
                                               
824 Law on Commercial Companies, (Exhibits PAN-34 / ARG-43). 
825 IGJ Resolution No. 7/2005 (Exhibits PAN-62 / ARG-33). 
826 Law on Concealment and Laundering of Money of Criminal Origin, (Exhibit ARG-32). 
827 Panel Reports, Korea – Various Measures on Beef , paras. 655-658; China – Auto Parts , 
paras. 7.309-7.312; and Colombia – Ports of Entry , paras. 7.542 and 7.543. WT/DS453/R 
 
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  described the effects that harmful tax planning can have, including the possibility of laundering 
money through non-externalized operations and lowering the tax base. The AFIP indicates, 
inter alia,  that investigative work led to the detection of 2,699 Argentine taxpayers with companies 
abroad, of which 27.26% were companies resident in Panama. The Argentine authorities identified 
1,542 Argentine taxpayers who did not externalize th eir participation in "offshore" companies. The 
document also indicates that "the AFIP filed requests with the Republic of Panama for exchange of information through diplomatic channels, none of which received a response" from Panama.
828 The 
Panel therefore considers that the evidence submitted by Argentina demonstrates that transactions 
with entities located in non-cooperative jurisdicti ons make tax evasion possible because the lack of 
transparency characterizing such jurisdictions facilitates manoeuvres intended to evade taxes in Argentina. 
7.651.  We also note that the efficacy of defensive tax measures, such as the measures at issue in 
the present case, in preserving the integrity of national tax systems has been recognized in the 
relevant international fora, in particular the OECD and the G-20. Argentina has provided ample 
evidence of the recognition by these fora of th e important role of defensive tax measures as a 
means of protecting public revenue. 
7.652.  For example, mention should be made of a 1998 OECD report which identifies the ways in 
which harmful tax practices affect the economy and the tax systems of other countries, proposes 
criteria for determining whether a particular jurisdiction may be considered a "tax haven", and identifies defensive measures that countries may take to deal with harmful tax competition.
829 
Likewise, another OECD report of 2000 makes the following recommendation: 
The Committee [on Fiscal Affairs] recommends a general framework within which 
Member countries can implement a common approach to restraining harmful tax competition. This framework will facilitate the ability of countries to take defensive 
measures swiftly and effectively against jurisdictions that persist in their harmful tax 
practices. Defensive measures are important so that the adverse impacts from uncooperative jurisdictions can be addressed and so that these jurisdictions do not 
gain a competitive advantage over co-operative jurisdictions. In the application of the 
co-ordinated defensive measures, no distinction shall be made between jurisdictions that are dependencies of OECD countries and those that are not. These defensive 
measures would be at the discretion of countries and taken under their domestic 
legislation or under tax treaties. Moreover, each country may choose to enforce the 
defensive measures in a manner that is proportionate and prioritised according to the degree of harm that a particular jurisdiction has the potential to inflict, and taking into 
account the effectiveness of its existing defensive measures.
830 
7.653.  An OECD report of 2001 acknowledges the be nefits of exchanging information between tax 
authorities in order to halt harmful tax practices and notes that "a framework of coordinated 
defensive measures is a means by which countries with similar concerns can support each other's 
efforts to counter the effects of harmful tax practices".831 Another OECD report of 2004 discusses 
the importance of guaranteeing a coordinated appr oach to the application of defensive measures 
against non-cooperative jurisdictions, indicating that it is not "possible to produce an exhaustive or 
exclusive list of measures that might be used" and identifies some possible defensive measures.832 
                                               
828 AFIP, Offshore companies – Fr audulent manœuvres and harmful tax planning, (Exhibit ARG-44). 
829 Argentina's first written subm ission, paras. 17-29; and OECD, 1998 Report, Harmful Tax Competition 
– An Emerging Global Issue , (Exhibit ARG-5), Chapter 2. 
830 OECD, Towards Global Tax Co-operation – Report to the 2000 Ministerial Council meeting and 
Recommendations by the Committ ee on Fiscal Affairs, OECD, 2000, (Exhibit ARG-6), para. 33, available at 
http://www.oecd.org/tax/harmful/2090192.pdf (exhibit provided in English; Spanish text available at: http://www.ief.es/recursos/publica ciones/libros/informes_OCDE.aspx ). See also Argent ina's first written 
submission, paras. 40 and 41. 
831 OECD, The OECD's Project on Harmful Tax Practices : The 2001 Progress Report , (Exhibit ARG-7), 
para. 47, available at http://www/oecd.org/ctp/harmful/2664450.pdf (exhibit provided in English; Spanish text available at http://www.ief.es/recursos/publicaciones/libros/informes_OCDE.aspx ). See also Argentina's first 
written submission, paras. 44-48. 
832 OECD, The OECD's Project on Harmful Tax Practices : The 2004 Progress Report , (Exhibit ARG-9), 
para. 30, available at http://www.oecd.org/tax/harmful/30901115.pdf  (exhibit provided in English; Spanish WT/DS453/R 
 
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  7.654.  We note that, at their meeting held in Pittsburgh in November 2009, the members of the 
G-20 reiterated their commitment "to maintain the momentum in dealing with tax havens, and agreed that they were "ready to use countermeasures against tax havens from March 2010".
833 
Likewise, the lack of transparency in non-cooperat ive jurisdictions has been identified as a factor 
that can encourage money laundering and therefore justifies the application of defensive 
measures. In the same Declaration, the G-20 reaffirmed their commitment "to maintain the momentum in dealing with … money laundering".
834 
(iv) Conclusion 
7.655.  In the light of the foregoing, the Panel considers that Argentina has proved to its (the 
Panel's) satisfaction that measures 1, 2, 3 and 4 are designed to secure compliance with the relevant provisions of the LIG, the LPT, the Criminal Tax Law and Argentina's National 
Constitution. The Panel also considers that Argentina has proved to its (the Panel's) satisfaction 
that measure 7 is designed to secure compliance with the relevant provisions of Law No. 19.550 on Commercial Companies (LSC) and IGJ Resolution No. 7/2005, and that measure 8 is designed 
to secure compliance with the relevant provisions of Law No. 25.246 on Concealment and 
Laundering of Money of Criminal Origin. 
7.656.  Consequently, the Panel will now examine whether measures 1, 2, 3, 4, 7 and 8 are 
"necessary" to secure compliance with th e aforementioned laws and regulations. 
(b) Second element: Whether the measures are "necessary" to secure compliance 
with the laws and regulations identified by Argentina  
(i) The standard of "necessity" 
7.657.  Having found that measures 1, 2, 3, 4, 7 and 8 are designed to secure compliance with the 
laws and regulations identified by Argentina, we begin our analysis of the second element of the 
legal standard set out in Article XIV(c) of the GATS, namely, whether measures 1, 2, 3, 4, 7 and 8 
are "necessary" to secure compliance with the said instruments in Argentina's legislation. 
7.658.  When examining the concept of "nece ssary" in the context of subparagraph (a) of 
Article XIV of the GATS, the Appellate Body in US – Gambling  defined the standard of "necessity" 
as an "objective" standard and urged panels to assess the "necessity" of the measure before them 
independently and objectively, taking into account the structure and application of the measures and all the evidence in the record. The Appellate Body noted that: 
[T]he standard of "necessity" provided for in the general exceptions provision is an 
objective  standard. To be sure, a Member's characterization of a measure's objectives 
and of the effectiveness of its regulatory approach – as evidenced, for example, by 
texts of statutes, legislative history, and pronouncements of government agencies or 
officials – will be relevant in determining whether the measure is, objectively, 
"necessary". A panel is not bound by these characterizations, however, and may also find guidance in the structure and operatio n of the measure and in contrary evidence 
proffered by the complaining party. In any event, a panel must, on the basis of the 
evidence in the record, independently and objectively assess the "necessity" of the measure before it.
835 (emphasis original) 
7.659.  In EC – Seal Products , the Appellate Body summarized its previous decisions on the 
necessity standard as follows: 
                                                                                                                                               
text available at http://www.ief.es /recursos/publicaciones/ libros/informes_OCDE.aspx ). See also Argentina's 
first written submission, para. 55. 
833 Argentina's first written submis sion, para. 72 (referring to the G-20, Leaders' Statement, The 
Pittsburgh Summit , 24-27 September 2009, (Exhibit ARG-15), para. 15). ("We are committed to maintain the 
momentum in dealing with tax havens, money launderi ng, proceeds of corruption, terrorist financing, and 
prudential standards.") (exhibit provided in English; Spanish translation by the WTO Secretariat). 
834 Argentina's first written submis sion, para. 72 (referring to the G-20, Leaders' Statement, The 
Pittsburgh Summit , 24-27 September 2009, (Exhibit ARG-15), para. 15). 
835 Appellate Body Report, US – Gambling , para. 304. (footnote omitted) WT/DS453/R 
 
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  As the Appellate Body has explained, a necessity analysis involves a process of 
"weighing and balancing" a series of factors,  including the importance of the objective, 
the contribution of the measure to that obje ctive, and the trade-restrictiveness of the 
measure.836 The Appellate Body has further explained that, in most cases, a 
comparison between the challenged measure and possible alternatives should then be 
undertaken.837 838 
7.660.  In EC – Seal Products , the Appellate Body also recalled that: 
As the Appellate Body has stated, "[i]t is on the basis of this 'weighing and balancing' 
and comparison of measures, taking into account the interests or values at stake, that a panel determines whether a measure is 'necessary' or, alternatively, whether another, WTO-consistent measure is 'reasonably available' [to the Member 
concerned]".
839 Such an analysis, the Appellate Body has observed, involves a 
"holistic" weighing and balancing exercise "that involves putting all the variables of the equation together and evaluating them in relation to each other after having 
examined them individually, in order to reach an overall judgement".
840 841 
7.661.  The Panel will therefore assess whether me asures 1, 2, 3, 4, 7 and 8 are "necessary" 
within the meaning of Article XIV(c) of the GATS, being guided by these comments of the 
Appellate Body. The Panel will take into account (a) the importance of the objective pursued; (b) 
the measure's contribution to that objective; and (c ) the trade-restrictiveness of measures 1, 2, 3, 
4, 7 and 8. We shall then turn to examine whethe r it is feasible to make a comparison between 
measures 1, 2, 3, 4, 7 and 8 and possible alternatives. 
1. The importance of the objective pursued 
7.662.  We proceed to assess the importance of th e objective pursued by the laws and regulations 
with which measures 1, 2, 3, 4, 7 and 8 are designed to secure compliance. 
7.663.  In the Panel's opinion, it can be seen from Argentina's arguments that with respect to 
measures 1, 2, 3, 4 and 7 the objective pursued is to "protect the tax collection system against the risks posed by the harmful tax practices of non- cooperative jurisdictions for tax transparency 
purposes".
842 With respect to measure 8, Argentina claims that the objective of preventing the 
risks posed by laundering money of criminal origin is an interest of the utmost importance.843 
The objective pursued in the case of measures 1, 2, 3, 4 and 7 
 
7.664.  As we have already explained, the objective of measures 1, 2, 3, 4 and 7 is "to protect the 
tax collection system against the risks posed by the harmful tax practices of jurisdictions that are non-cooperative for tax transparency purposes".
844 We note in this connection that previous panels 
have acknowledged the importance of protecting the tax revenue system, including the prevention 
                                               
836 (Footnote original) Appellate Body Reports, Korea – Various Measures on Beef , para. 164; US – 
Gambling , para. 306; and Brazil – Retreaded Tyres , para. 182. 
837 (Footnote original) Appellate Body Report, US – Gambling , para. 307 (referring to Appellate Body 
Report, Korea – Various Measures on Beef , para. 166). See also Appellate Body Report, US – Tuna II (Mexico) , 
para. 321 (referring to Appellate Body Report,  US – Gambling , para. 307). In the context of Article 2.2 of the 
TBT Agreement, the Appellate Body stated that "[i]n mo st cases, a comparison of the challenged measure and 
possible alternative measures should be  undertaken". (Appellate Body Report, US – Tuna II (Mexico) , 
para. 322.) The Appellate Body then proceeded to identify circumstances in which comparison with possible alternative measures may not be required, for instance, when the challenged measure is not trade restrictive, 
or when it makes no contribution to the objective. (Ibid., footnote 647 to para. 322). 
838 Appellate Body Report, EC – Seal Products , para. 5.169. 
839 (Footnote original) Appellate Body Report, US – Gambling , para. 307 (referring to Appellate Body 
Report, Korea – Various Measures on Beef , para. 166). 
840 (Footnote original) Appellate Body Report, Brazil – Retreaded Tyres , para. 182. 
841 Appellate Body Report, EC – Seal Products , para. 5.214. 
842 Argentina's first written submission, para. 289. 
843 Argentina's first written submission, paras. 333 and 339. 
844 Argentina's first written submission, para. 289. WT/DS453/R 
 
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  of tax evasion.845 We agree with those previous panels that  protecting the national tax system is a 
question of primordial importance for any count ry, and particularly for a developing country. 
7.665.  We also note that the importance of protecting national tax collection systems, particularly 
in developing countries and, consequently, the need for measures to facilitate transparency and 
the exchange of information as a way of combating tax evasion, have been recognized as a priority 
at the international level for more than 15 ye ars. In a 2000 report, for example, the OECD 
discussed the harmful effects of tax competition, explaining: 
The goal is to secure the integrity of tax systems by addressing the issues raised by 
practices with respect to mobile activities that unfairly erode the tax bases of other countries and distort the location of capital and services. Such practices can also cause undesired shifts of part of the tax burden to less mobile tax bases, such as 
labour, property, and consumption, and increase administrative costs and compliance 
burdens on tax authorities and taxpayers … the project is about ensuring that the burden of taxation is fairly shared and that tax should not be the dominant factor in 
making capital allocation decisions. … Tax base erosion as a result of harmful tax 
practices can be a particularly serious threat to the economies of developing countries. The project will, by promoting a co-operative framework, support the 
effective fiscal sovereignty of countries over the design of their tax systems.
846 
7.666.  In 2004, participants in the Global Forum emphasized the crucial importance of ensuring 
that countries can obtain from other countries the information necessary to enforce their own tax laws: 
… to facilitate the creation of an environment in which all significant financial centres 
meet the high standards of transparency and effective exchange of information on 
both criminal and civil taxation matters. This is vital to ensuring that countries can 
obtain from other countries the information necessary to enforce their own tax laws, 
to ensuring that financial centres that meet such standards are not unduly disadvantaged by doing so, and to ensuring th at financial centres that meet such high 
standards are and remain fully integrated into the international financial system and 
the global community. Any significant financia l centre that decides not to adopt high 
standards of transparency and effective exchange of information must not be permitted to profit from that decision.
847 
7.667.  The same year, the Ministers of Financ e and Central Bank Governors of G-20 members 
reaffirmed their commitment to enhancing good gove rnance and fighting illicit use of the financial 
system in all its forms: 
                                               
845 In Argentina – Hides and Leather , the panel recognized the importance of the fight against tax 
evasion in Argentina: 
We are satisfied that Argentina has adduced argument  and evidence sufficient to raise a presumption 
that the contested measures, in their general desi gn and structure, are "necessary" even on the 
European Communities' reading of th at term. Argentina stresses the fact  that tax evasion is common in 
its territory and that, against this background of low levels of tax compliance, tax authorities cannot expect to improve tax collection primarily through th e pursuit of repressive enforcement strategies (e.g. 
aggressive criminal prosecution of tax offenders). In those circumstances, Argentina maintains, tax 
authorities must direct th eir efforts towards preventing tax evas ion from occurring in the first place. 
See Panel Report, Argentina – Hides and Leather , para. 11.305. 
Likewise, in Dominican Republic – Import and Sale of Cigarettes , the panel considered: 
The Panel finds no reason to question the Dominican Republic's assertions in the sense that the collection of tax revenue (and, conversely, the preven tion of tax evasion) is a most important interest 
for any country and particularly  for a developing country such  as the Dominican Republic. 
See Panel Report, Dominican Republic – Import  and Sale of Cigarettes , para. 7.215, upheld by the 
Appellate Body in Dominican Republic – Import  and Sale of Cigarettes , para. 71. 
846 OECD, Towards Global Tax Co-operation - Report to the 2000 Ministerial Council Meeting and 
Recommendations by the Committ ee on Fiscal Affairs, OECD 2000, (Exhibit ARG-6), p. 5, available at 
http://www.oecd.org/tax/transparency/44430257.pdf  (exhibit provided in English; Spanish translation 
available at http://www.ief.es/recursos/publicaciones/libros/informes_OCDE.aspx ). See Argentina's first 
written submission, para. 35. 
847 OECD, A Process for Achieving a Gl obal Level Playing Field , Global Forum on Taxation, Berlin 
3-4 June 2004, (Exhibit ARG-10), para. 28 (exhibit provided  in English; Spanish translation by Argentina). See 
Argentina's first written submission, para. 58; an d response to Panel ques tion No. 71, para. 2. WT/DS453/R 
 
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  Consequently, we are committed to transparency and exchange of information for tax 
purposes. We regard this as vital to enhance fairness and equity in our societies and to promote economic development. … Financial systems must respect commercial confidentiality, but confidentiality should not be allowed to foster illicit activity. Lack of 
access to information in the tax field has significant adverse effects. It allows some to 
escape tax that is legally due and is unfair to citizens that comply with the tax laws. It distorts international investment decisions which should be based on legitimate 
commercial considerations rather than the circumvention of tax laws. The G-20 
therefore regards it as a mark of good international citizenship for countries to eliminate practices that restrict or frustrate the ability of another country to enforce its chosen system of taxation. … We call on all countries with financial centres to 
adopt and implement the high standards articulated by the OECD so that we can move 
towards an international financial system that is free of distortions created through lack of transparency and lack of effective exchange of information in tax matters. It is 
important that countries which do meet these standards have confidence that they will 
not be disadvantaged and that financial centres in countries that choose not to meet these standards will not benefit from that choice.
848 
7.668.  In 2009, within the Global Forum fr amework, 70 jurisdictions and international 
organizations reiterated "… the need of governments to protect their tax bases from non-compliance with their tax laws …".
849 In the same year, the G-20 "welcome with satisfaction" 
the expansion of the Global Forum, whose main focus "will be to improve tax transparency and 
exchange of information so that countries can fully enforce their tax laws to protect their tax 
base".850 
7.669.   More recently, in 2012, the OECD started work on the tax planning techniques used by 
multinationals to minimize their tax burden by tr ansferring profits to countries where there is no 
corporate tax or only low levels of income tax ("BEPS" Action Plan851). In a 2013 report, the OECD 
concluded as follows: 
What is at stake is the integrity of the corporate income tax. A lack of response would 
further undermine competition, as some businesses, such as those which operate cross-border and have access to sophisticated tax expertise, may profit from BEPS opportunities and therefore have unintended competitive advantages compared with 
enterprises that operate mostly at the dome stic level. … Finally, if other taxpayers 
(including ordinary individuals) think that multinational corporations can legally avoid paying income tax it will undermine voluntary compliance by all taxpayers – upon 
which modern tax administration depends.
852 
7.670.  In September 2014, the G-20 confirmed the importance of assisting developing countries 
to protect and increase their tax bases: 
                                               
848 G-20 Statement on Transparency and Exch ange of Information for Tax Purposes , 
21 November 2004, (Exhibit ARG-85) (exhibit provid ed in English; Spanish translation by the WTO 
Secretariat). 
849 OECD Global Forum, Moving Forward on the Glob al Standards of Transparency and the Exchange of 
Information for Tax Purposes , Mexico, 1-2 September 2009, (Exhibit ARG-17), p. 1 
850 Argentina's first written submission, para. 72 (citing the G-20 Leaders' Statement, The Pittsburgh 
Summit , 24-27 September 2009, (Exhibit ARG-15), para. 15). 
851 "BEPS" is the acronym for "Bas e Erosion and Profit Shifting". 
852 OECD, Addressing base erosion and profit shifting, (Exhibit ARG-22), p. 50, available at 
http://www.oecd.org/tax/addressing-base-erosion-and-profit-shifting-9789264192744-en.htm  (exhibit 
provided in English; Spanish text available at: http://www.oecd-ilibrary.org/taxa tion/abordando-la-erosion-de-
la-base-imponible-y-la-deslocalizacion-de-beneficios_9789264201224-es ). See also Argentina's first written 
submission, paras. 79-82. Argentina also cites the Action Plan on Base Erosion and Profit Shifting (BEPS ), 
(Exhibit ARG-21). In the Action Plan, the OECD explains that BEPS "undermines the integrity of the tax system, 
as the public, the media and some taxpayers deem reported low corporate taxes to be unfair", noting that this is a special concern in developing countries, where "the lack of tax revenue leads to critical under-funding of public investment that could help promote economic growth". See the Action Plan on Base Erosion and Profit 
Shifting (BEPS ), (Exhibit ARG-21), p. 8 (exhibit provided in English; Spanish translation available at 
http://www.oecd-ilibrary.org/taxation/plan-de-accion-con tra-la-erosion-de-la-base-imponible-y-el-traslado-de-
beneficios_9789264207813-es). See also Argentina's first written submission, para. 82. WT/DS453/R 
 
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  We are strongly committed to a global response to cross-border tax avoidance and 
evasion so that the tax system supports growth-enhancing fiscal strategies and economic resilience. … We endorse the fi nalised global Common Reporting Standard 
for automatic exchange of tax information on a reciprocal basis which will provide a 
step-change in our ability to tackle and dete r cross-border tax evasion. We will begin 
exchanging information automatically between each other and with other countries by 2017 or end-2018, subject to the completion of necessary legislative procedures. We 
call on all financial centres to make this commitment by the time of the Global Forum 
meeting in Berlin, to be reported at the Brisbane Summit, and support efforts to monitor global implementation of the new global standard. … We will continue to take practical steps to assist developing countries preserve and grow their revenue bases 
and stand ready to help those that wish to participate in automatic information 
exchange.
853 
7.671.  The foregoing statements show us the support at the international level for protection of 
national tax collection systems against harmful tax practices, including tax evasion. In our view, 
these statements confirm that the objective, interest or value at stake in this dispute in respect of measures 1, 2, 3, 4 and 7 is of vital importance. 
The objective pursued in respect of measure 8 
 
7.672.  As regards measure 8, we recall that the objective pursued is prevention of the risks posed by money laundering transactions.
854 As in the previous case, the importance of this objective has 
been acknowledged by previous panels, for example, in US – Gambling , where it was emphasized 
that protecting society against the threat of money laundering is an interest that is important in the highest degree.
855 
7.673.  In our view, the evidence provided by Argentina confirms that combating money 
laundering is an internationally-established priori ty shared by many countries, both developed and 
developing. By way of example, the mandate of the FAFT, whose functioning we described in 
section 2.4.4 above, is to establish standards an d promote the effective implementation of legal, 
regulatory and operational measures for combating money laundering, the financing of terrorism and the proliferation of weapons of mass destruction, as well as other related threats to the integrity of the financial system. The FAFT's Recommendations set out "essential measures" which 
its member jurisdictions (including Argentina) should have in place, inter alia, to "combat money 
laundering and terrorist financing …".
856 
7.674.  In a 1998 report, the OECD expressed its concern at non-transparent administrative 
practices because they encourage money laundering: 
Because non-transparent administrative practices as well as an inability or 
unwillingness to provide information not only allow investors to avoid their taxes but 
also facilitate illegal activities, such as tax evasion and money laundering, these 
factors are particularly troublesome. … The most obvious consequence of the failure to provide information is that it facilitates tax evasion and money laundering. Thus, these factors are particularly harmful characteristics of a tax haven and, as discussed 
later, of a harmful preferential tax regime.
857 
7.675.  In a report in 2001, the OECD refers to the FAFT's opinion for the period 1998-1999 on 
"Money Laundering Typologies", according to which "problems in obtaining information from 
certain jurisdictions on the beneficial owners  of shell companies, international business 
                                               
853 Meeting of G-20 Finance Ministers and Central Bank Governors , Cairns, 20-21 September 2014, 
(Exhibit ARG-128), p. 2 (exhibit provided in Engl ish; Spanish translation by the WTO Secretariat). 
854 Argentina's first written submission, para. 339. 
855 Panel Report, US – Gambling , paras. 6.492 and 6.493. 
856 FATF, FATF Recommendations, (E xhibit ARG-25), p. 7. The FATF Recommendations were revised for 
the second time in 2003, and "have been endorsed by over 180 countries, and are universally recognized as 
the international standard for anti-money laundering and countering the financing of terrorism". 
857 OECD, Harmful Tax Competition – An Emerging Global Issue , 1998, (Exhibit ARG-5), para. 53 
(exhibit provided in English; translatio n into Spanish by the WTO Secretariat). WT/DS453/R 
 
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  corporations (IBCs), and offshore trusts were the primary obstacles in investigating transnational 
laundering activities".858 
7.676.  The evidence provided by Argentina show s that the need to combat money laundering is 
also one of the concerns of the G-20.859 
7.677.  Panama does not deny the importance attached by Argentina to protecting its tax 
collection system against harmful tax practices. Panama claims, however, that other interests of considerable importance also exist, for example, the rule of law and the principle of equality in tax 
matters. According to Panama, Argentina's interest in collecting taxes has to be interpreted in 
conjunction with the citizen's interest in tax measur es that obey these principles of conformity with 
statute and equality.
860 
7.678.  The Panel considers that the fact that there may be "other interests of considerable 
importance" does not lessen the importance of the interest or value which Argentina is seeking to 
achieve. Secondly, we understand that Panama's argument suggests that the rule of law and the principle of equality in tax matters are contrary to, or at least irreconcilable with, Argentina's 
interest in protecting its tax collection system against harmful tax practices. We do not agree with 
Panama. In accordance with the rule of conformity with statute enshrined in the National Constitution ("No inhabitant of the Nation shall be obliged to perform what the law does not 
demand nor deprived of what it does not prohibit"), no one is obliged to pay a tax that has not 
been imposed by law.
861 We consider that the corollary of the rule of conformity with statute in tax 
matters is that taxpayers must pay their taxes in accordance with tax legislation. The principle of tax equality requires that taxpayers with equal capacity to pay should pay the same tax. 
Accordingly, in our opinion, the principles of co nformity with statute and equality in tax matters 
require a government to act against harmful tax practices. Indeed, as the OECD explains, "[u]ltimately, taxpayer confidence in the integrity and fairness of the tax system, and in 
government in general, declines as honest taxpayer s feel that they shoulder a greater share of the 
tax burden and that government cannot effectively enforce its own tax laws".
862 In our view, the 
principles of conformity with statute and tax equality are not "other interests" but form an inherent 
part of the interest or common value of ensuring the integrity of the national tax collection system 
and, consequently of protecting it against the risks posed by harmful tax practices of non-cooperative jurisdictions. 
7.679.  In line with the approach of the panel in Dominican Republic – Import and Sale of 
Cigarettes
863, we consider that we have no reason to question Argentina's assertions to the effect 
that the "prevention of tax evasion and the proper application of its tax legislation are interests of maximum importance".
864 The Panel also agrees with Argentina that "the objective of preventing 
the risks posed by operations to launder money of criminal origin is an interest of the utmost 
importance".865 The Panel considers that this objective is even more vital for a developing country 
such as Argentina. 
7.680.  We recall that, commenting on the relative importance of relevant common interests or 
values, the Appellate Body noted that "[t]he more vital or important those common interests or 
                                               
858 OECD, Behind the Corporate Veil – Using Corporate Entities for Illicit Purposes , 2001, 
(Exhibit ARG-24), p. 19 (c iting the FAFT report, Money Laundering Typologies , 1998-1999, p. 19). 
859 See, for example, G-20, Declaration, Summit on Financial Markets and the World Economy , 2008, 
(Exhibit ARG-14), Action Plan to Implement Principles for Reform , p.4; G-20, Leaders' Statement, The 
Pittsburgh Summit , 24-27 September 2009, (Exhibit ARG-15), para. 15; G-20, Cannes Summit Final 
Declaration: Building our Commo n Future: Renewed Collective Ac tion for the Benefit of All , 2011, 
(Exhibit ARG-19), paras. 35 and 86; Leaders' Declaration , Los Cabos, México, 2012, (Exhibit ARG-20), 
para. 49; G-20 Toronto Summit Declaration , 26-27 June 2010, (Exhibit ARG-90), para. 22. 
860 Panama's second written submission, paras. 2.222-2.223, 2.341-2.342, 2.461, 2.561, 2.760 and 
2.761. 
861 Constitutional Principles on Tax Matters, (Exhibit PAN-83), p. 2. 
862 OECD, OECD's Project on Harmful Tax Practices, The 2001 Progress Report , (Exhibit ARG-7), para. 2, 
available at http://www/oecd.org/ctp/harmful/2664450.pdf (exhibit provided in English; Spanish text available at http://www.ief.es /recursos/publicaciones/ libros/informes_OCDE.aspx ). 
863 Panel Report, Dominican Republic – Import  and Sale of Cigarettes , para. 7.215, upheld by the 
Appellate Body in Dominican Republic – Import  and Sale of Cigarettes , para. 71. 
864 Argentina's first written submission, para. 295. 
865 Argentina's first written submission, p. 103. WT/DS453/R 
 
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  values are, the easier it would be to accept as 'necessary' a measure designed as an enforcement 
instrument".866 
7.681.  In fact, the Panel considers that the common interests or values at stake are particularly 
important. In any country, tax collection is an indispensable source of revenue to ensure the 
functioning of the State and the various government services to citizens. Protection of the national 
tax base guarantees the viability of a country's pu blic finances and, by extension, its economy and 
financial system. The risks posed by harmful tax practices867 are even more important for 
developing countries because they deprive their public finances of financial resources vital to 
promoting their economic development and implemen ting their domestic policies. Lastly, there can 
be no doubt that combating money laundering, which fits in with the fight against drug trafficking and terrorism, is a priority for the international community and thus also for Argentina. 
7.682.  The Panel concludes, therefore, that the protection of its tax collection system and the 
fight against harmful tax practices and money laundering are objectives, interests or values of the utmost importance for Argentina. 
2. The contribution of measures 1, 2, 3, 4, 7 and 8 to achieving the 
objectives pursued 
7.683.  We continue our analysis with the contribution made by measures 1, 2, 3, 4, 7 and 8 to 
achieving the objectives pursued. 
7.684.  In Brazil – Retreaded Tyres , the Appellate Body determined various principles which 
govern evaluation of a measure's contribution in  the context of Article XX of the GATT 1994. The 
Appellate Body explained in particular: 
A contribution exists when there is a genui ne relationship of ends and means between 
the objective pursued and the measure at issue. To be characterized as necessary, a measure does not have to be indispensable. However, its contribution to the 
achievement of the objective must be material, not merely marginal or insignificant, 
especially if the measure at issue is as trade restrictive as an import ban. Thus, the contribution of the measure has to be weighe d against its trade restrictiveness, taking 
into account the importance of the interests or the values underlying the objective 
pursued by it.
868 
7.685.  We recall that, in the Appellate Body's opinion, "[t]he greater the contribution, the more 
easily a measure might be considered to be 'necessary'."869 The Appellate Body also confirmed 
that the analysis of the contribution "can be do ne either in quantitative or qualitative terms".870 
The choice of a methodology for evaluating the contribution of a measure "is a function of the nature of the risk, the objective pursued, and the level of protection sought. It ultimately also 
depends on the nature, quantity, and quality of evidence existing at the time the analysis is 
made".
871 
7.686.  As regards the importance of the measure's contribution, compared to the other 
components of the "necessity calculus", in EC – Seal Products, the Appellate Body explained that a 
measure's contribution is "only one component of the necessity calculus": 
A measure's contribution is thus only one component of the necessity calculus under 
Article XX. This means that whether a measure is "necessary" cannot be determined 
by the level of contribution alone, but will depend on the manner in which the other 
factors of the necessity analysis, including a consideration of potential alternative 
                                               
866 Appellate Body Report, Korea - Various Me asures on Beef , para. 162. 
867 The expression "harmful tax practices" covers tax evasion, avoidance and fraud. 
868 Appellate Body Report, Brazil – Retreaded Tyres , para. 210. See also the Appellate Body Report, EC 
– Seal Products , para. 5.210. 
869 Appellate Body Report, Korea – Various Measures on Beef , para. 163. 
870 Appellate Body Report, Brazil – Retreaded Tyres , para. 146. See also Appellate Body Report, EC – 
Seal Products , para. 5.211. 
871 Appellate Body Report, Brazil – Retreaded Tyres , para. 145. See also Appellate Body Report, EC – 
Seal Products , para. 5.210. WT/DS453/R 
 
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  measures, inform the analysis. It will also depend on the nature, quantity, and quality 
of evidence, and whether a panel's analysis is performed in quantitative or qualitative terms. Indeed, the very utility of examining the interaction between the various factors of the necessity analysis, and conducting a comparison with potential 
alternative measures, is that it provides a means of testing these factors as part of a 
holistic weighing and balancing exercise, whether quantitative or qualitative in nature. The flexibility of such an exercise does not allow for the setting of pre-determined 
thresholds in respect of any particular factor. If the level of contribution alone cannot 
determine whether a measure is necessary or not, we do not see that mandating in advance a pre-determined threshold level of contribution would be instructive or warranted in a necessity analysis. The Appellate Body's approach in Brazil – Retreaded 
Tyres  is consonant with an assessment of the contribution of a measure as one 
element of a holistic necessity analysis under Article XX. It is also consistent with our understanding that the EU Seal Regime, even if it were highly trade-restrictive in 
nature, could still be found to be "necessary" within the meaning of Article XX(a), 
subject to the result of a weighing an d balancing exercise under the specific 
circumstances of the case and in the light of the particular nature of the measure at 
issue.
872 
7.687.  It is therefore our understanding that the criterion of the measure's contribution to 
achieving the goal pursued is no more important than the other factors of the necessity analysis in determining whether a measure is necessary. 
7.688.  We first examine the design, structure and operation of the measures in question. We shall 
focus in particular on determining whether there is an ends and means relationship between the objective pursued and the measures in question. Given the nature of the evidence and the 
arguments of the parties, the Panel considers it more pertinent to conduct a qualitative analysis. 
7.689.  We recall that the objective of measures 1, 2, 3, 4 and 7 is to protect Argentina's tax 
collection system in accordance with its relevant laws and regulations. As to measure 8, the 
objective pursued is to prevent money laundering. We also recall that both the erosion of the 
Argentine tax collection system caused by harmful tax practices and money laundering are shielded by lack of transparency and the ab sence of exchange of information between tax 
authorities. In the case of cooperative jurisd ictions, the Argentine authority has access to 
information on the actual beneficiaries of transact ions and is therefore able to determine whether 
the transaction has a legitimate commercial purpose. In the case of non-cooperative jurisdictions, the Argentine tax authority has no access to information and is thus not able to identify the 
beneficial owner of a transaction. 
Contribution of measure 1 to achieving the objective pursued 
 
7.690.  We recall that, as described in section 2.3.2 above, measure 1 consists of a legal 
presumption that, for the purposes of determining the tax base for the gains tax payable by the service suppliers, payments made to banks or financial entities located in non-cooperative countries as consideration for the granting of credits or loans or the placement of funds from 
abroad represent a net gain of 100% for such service suppliers. Pursuant to Article 93(c) of the 
LIG, Argentina's tax authorities presume, against any evidence to the contrary, a net gain in the case of interest or remuneration paid as consideration for credits, loans or placements of funds of 
any origin or nature from abroad. In order to determine the tax base for gains tax purposes, the 
rule defines the percentage applicable according to whether the bank or financial entity that has supplied the service to the Argentine consumer is located in a cooperative or non-cooperative 
country: (i) if it is located in a cooperative country, a net gain of 43% is presumed; (ii) if, on the 
other hand, it is located in a non-cooperative country, the presumed net gain is 100%. On these bases, Argentina applies a rate of 35% in both cases. This means that for every 100 units (of any currency) transmitted abroad for the purposes mentioned above, the entity granting the loan pays 
15.05% tax if it is located in a cooperative jurisdiction and 35% if it is located in a non-cooperative 
jurisdiction. 
7.691.  Argentina explains that measure 1 counters a practice commonly used by Argentine 
taxpayers, namely, the simulation of loans from related offshore financial entities (insider loans). 
                                               
872 Appellate Body Report, EC – Seal Products , para. 5.215 (footnotes omitted). WT/DS453/R 
 
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  In our view, the evidence presented by Argentina sh ows that the simulation of financial loans is a 
practice used by Argentine taxpayers to evade tax.873 By taxing the profits earned from loans, 
credits or placements of funds from non-cooperative jurisdictions at a higher rate than that on the same services supplied from cooperative jurisdictions, measure 1 contributes to protecting the tax 
base since it serves to (i) discourage the undeclared outflow of capital; and (ii) discourage false 
payment of interest (on insider loans) which can then be deducted from gains tax by Argentine taxpayers. 
7.692.  We therefore consider that measure 1 contributes to safeguarding Argentina's tax 
collection system inasmuch as it prevents harmfu l tax practices, in particular the undeclared 
outflow of capital and so-called insider loans from financial entities related to Argentine taxpayers and located in non-cooperative countries. 
Contribution of measure 2 to achieving the objective pursued 
 
7.693.   As to measure 2, described in section 2.3.3 above, we recall that it applies to any entry of 
funds in favour of Argentine taxpayers from non-cooperative countries in connection with an 
ex officio determination of the taxable subject matter by the AFIP for gains tax purposes. Under this measure, it is presumed that the funds received from entities located in non-cooperative 
jurisdictions constitute "unjustified increases in wealth" for the purpose of determining the tax 
base in Argentina. Argentina explains that the pu rpose of this measure is to prevent undeclared 
funds or income that should have been subject to tax in Argentina but was transferred to non-cooperative jurisdictions from being repatriated to Argentina through simulated transactions 
between the same beneficial owners or related parties.
874 
7.694.  We note that the presumption may be rebutted, i.e. that a taxpayer who proves that the 
income subject to tax originated from lawful activi ties (exports, for example) is released from the 
presumption of unjustified increase in wealth. This measure therefore allows Argentina's tax 
authorities to obtain the information necessary to determine the true nature of a transaction with a jurisdiction that does not furnish information on the identity of the service supplier. In our view, 
the existence of this presumption discourages tax evasion by Argentine taxpayers (ex ante  effect), 
as it makes it more difficult to repatriate any funds surreptitiously transferred by those taxpayers to non-cooperative jurisdictions (for example, to  bank accounts in non-cooperative jurisdictions). 
In this way, the measure also contributes to combating the erosion of Argentina's tax base. 
7.695.  We therefore consider that measure 2 contributes to safeguarding Argentina's tax 
collection system inasmuch as it enables the Argentine authority to obtain the information necessary to ensure that a transaction between  an Argentine taxpayer and a service supplier 
located in a non-cooperative jurisdiction has a legitimate purpose, to adjust the taxpayer's tax 
base and to restore tax equality with taxpayers for which the Argentine authority has all the necessary information. 
Contribution of measure 3 to achieving the objective pursued 
 
7.696.  Measure 3, as described in section 2.3.4 above, consists of applying methods for valuing transactions based on transfer prices in order to  determine the tax base for gains tax payable by 
Argentine taxpayers. The measure consists in the application, at the option of the Argentine 
taxpayer, of one of the methods for valuing transact ions provided for in the regulations, and this 
involves additional information requirements and the calculation of transactions for the Argentine 
taxpayer in the case of transactions with persons in non-cooperative countries. This separate 
valuation method enables the Argentine authorities to determine the real value of transactions with non-cooperative jurisdictions.
875 
7.697.  We therefore consider that measure 3 contributes to safeguarding Argentina's tax 
collection system inasmuch as it enables the Argentine authorities to obtain the information 
                                               
873 AFIP, Offshore Companies – Frau dulent Manoeuvres and Harmful Tax Planning, (Exhibit ARG-44), 
p. 2. 
874 Argentina's first written submission, para. 280; an d opening statement at the second meeting of the 
Panel, para. 31. 
875 Argentina's first written submission, para. 282; an d opening statement at the second meeting of the 
Panel, para. 31. WT/DS453/R 
 
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  necessary to determine, in particular, whether the operation takes place between related parties 
and its real value. It also contributes to discouraging ex ante harmful tax practices similar to those mentioned in the preceding paragraphs and to protecting Argentina's tax base by correctly identifying the value of transactions and the expenses which are legitimately tax-deductible. 
Contribution of measure 4 to achieving the objective pursued 
 
7.698.   Measure 4, as described in section 2.3.5 above, relates, like measures 1, 2, 3, to the 
determination of the tax base for gains tax payable by Argentine taxpayers. In this case, the 
measure consists of applying the "payment received rule" when allocating expenses for transactions between Argentine taxpayers and pe rsons in non-cooperative countries. Under this 
measure, outlays by Argentine entities which constitute profits of Argentine source for persons 
located, incorporated, based or domiciled in non-cooperative countries must be allocated to the 
fiscal year in which payment for the transaction actually takes place. Argentina explains that, contrary to the general rule of "accrual", the payment received rule enables the tax benefits from 
simulated transactions to be eliminated.
876 Measure 4 thus enables the Argentine authorities to 
ensure that there has actually been a payment co rresponding to the expenditure deducted by the 
Argentine taxpayer from its tax base. 
7.699.  We note that, in both cases, the expenditure effected may be deducted from the 
taxpayer's tax base; the difference is the time at which it may be deducted, i.e. the time at which the expenditure has been accrued, on the one ha nd, or the time of payment, on the other. 
Application of the time of payment as the criterion for determining the expenses deductible from 
taxable income does not prevent the expenditure from being deducted and can be resolved by 
submitting a sworn declaration of payment for the expenditure.
877 
7.700.  We therefore consider that measure 4 contributes to safeguarding Argentina's tax 
collection system inasmuch as it prevents simulated transactions with service suppliers in 
non-cooperative jurisdictions. 
Contribution of measure 7 to achieving the objective pursued 
 
7.701.  Measure 7, as described in section 2.3.8 above, consists of imposing additional requirements on branches of companies from non-cooperative jurisdictions for purposes of registration in the Public Trade Register of the Autonomous City of Buenos Aires. Apart from the 
requirements applicable to companies of cooperative countries, branches of companies 
established, registered or incorporated in non-cooperative countries must show "that the company is effectively engaged in economically significant business activities in the place where it was set 
up, registered or incorporated and/or in third countries", for which the General Justice 
Inspectorate (IGJ) may require additional documentation. The IGJ may also request additional documentation in order to verify th e records of the company's partners. 
7.702.  Hence, on its face, this measure enables th e Argentine authorities to verify that a company 
established in a non-cooperative country is effectively engaged in activities in its country of origin and has not been set up in that country simply to facilitate tax evasion in Argentina ("shell company"). 
7.703.  We therefore consider that measure 7 contributes to safeguarding Argentina's tax 
collection system inasmuch as it seeks to verify that branches of foreign companies setting up in the City of Buenos Aires have a legitimate commercial purpose, have genuine activities, and have 
not been set up by companies related to Argentin e taxpayers solely for the purpose of simulating 
transactions with Argentine taxpayers through which the latter may generate fictitious costs or tax credits and thereby improperly reduce the ba se for calculating their obligatory taxes. 
Contribution of measure 8 to achieving the objective pursued 
 
7.704.  Measure 8, as described in section 2.3.9 above, consists of imposing the requirement to obtain prior authorization from the BCRA in order to  be able to repatriate direct investment when 
                                               
876 Argentina's first written submission, para. 284; an d opening statement at the second meeting of the 
Panel, para. 31. 
877 Argentina's first written submission, para. 301. WT/DS453/R 
 
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  the beneficiary abroad (natural or legal person) is in a non-cooperative country. This measure 
applies to the repatriation of investments by non-residents to a non-cooperative jurisdiction and enables the BCRA to verify the genuineness of a repa triation of capital. It can thus be verified 
whether the operation involves an actual repatriation of investment and not disguised outflow of 
capital or foreign currency. 
7.705.  We therefore consider that measure 8 contributes to preventing money laundering 
operations inasmuch as it makes it compulsory to declare, inter alia , the origin of the funds to be 
repatriated for the purpose of preventing such operations. 
Conclusion 
 
7.706.  In our view, measures 1, 2, 3, 4 and 7 individually contribute to protecting Argentina's tax 
collection system and to ensuring the collection of taxes in accordance with the relevant laws and 
regulations. 
7.707.  Measure 1 contributes to safeguarding Argentina's tax collection system inasmuch as it 
prevents harmful tax practices, especially the und eclared outflow of capital and so-called insider 
loans from financial entities related to Argentine taxpayers and located in non-cooperative countries. 
7.708.  Measure 2 contributes to safeguarding Argentina's tax collection system inasmuch as it 
enables the Argentine authorities to obtain the information necessary to ensure that a transaction between an Argentine taxpayer and a service supplier located in a non-cooperative jurisdiction has a legitimate purpose. This measure also makes it po ssible to adjust the tax base of the taxpayer in 
question and to restore tax equality with taxpayers for which the Argentine authority has all the 
necessary information. 
7.709.  Measure 3 contributes to safeguarding Argentina's tax collection system inasmuch as it 
enables the Argentine authorities to obtain the information necessary to determine, in particular, 
whether the operations is between related parties and its actual value. The measure also helps to discourage ex ante harmful tax practices similar to those mentioned in the preceding paragraphs 
and to protect Argentina's tax base by correctly identifying the value of transactions and the 
expenses that are legitimately tax-deductible. 
7.710.  Measure 4 contributes to safeguarding Argentina's tax collection system inasmuch as it 
prevents simulated transactions with service suppliers in non-cooperative jurisdictions. 
7.711.  Measure 7 contributes to safeguarding Argentina's tax collection system inasmuch as it 
seeks to verify that branches of foreign companies setting up in the City of Buenos Aires have a legitimate commercial purpose, have genuine activities, and have not been set up by companies 
related to Argentine taxpayers solely for the purpose of simulating transactions with Argentine 
taxpayers through which the latter may generate fictitious costs or tax credits and thereby improperly reduce the base for calculating their obligatory taxes. 
7.712.  Measure 8, for its part, contributes to preventing money laundering operations inasmuch 
as it makes it compulsory to declare, inter alia , the origin of funds to be repatriated for the 
purpose of preventing such operations. 
7.713.  At the same time, measures 1, 2, 3, 4 and 7 have an ex ante effect by preventing and 
deterring various harmful tax practices. For exam ple, the mere fact of the existence of such 
measures, which act as tools for detecting fraudulent manoeuvres, may influence the future behaviour of taxpayers and dissuade them from resorting to such practices. This has a positive 
effect also for honest Argentine taxpayers because they can see that those that engage in illegal 
manoeuvres do not benefit from impunity and that the State, through defensive tax measures, ensures tax equality between Argentine taxpayers. We agree with the OECD that the mere 
existence of such measures helps to "educate" taxpayers.
878 Measure 8 also has an ex ante  effect 
                                               
878 OECD, Addressing base erosion and profit shifting , (Exhibit ARG-22), p. 37, available at 
http://www.oecd.org/tax/addressing-base-erosion-and-profit-shifting-9789264192744-en.htm  (exhibit 
provided in English; Spanish text available at: 
http://www.oecd-ilibrary.org/taxation/abordando-la-ero sion-de-la-base-imponible-y-la-deslocalizacion-de-beneWT/DS453/R 
 
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  by preventing money laundering operations. Measures 1, 2, 3, 4, 7 and 8, therefore, contribute to 
safeguarding Argentina's tax collection system and preventing money laundering. 
7.714.  The Panel also considers that it should not disregard the contribution made by measures 1, 
2, 3, 4 and 7, operating in conjunction , in the context of a comprehensive policy pursued by 
Argentina to ensure the collection of taxes in accordance with its relevant laws and regulations. 
The application of a single measure would not make sense in terms of combating harmful tax practices, given that these may utilize various different channels. In our view, this combined effect 
of the measures concerned corresponds to more than the simple sum of each measure taken 
separately. 
7.715.  It also appears significant to us that, in the relevant international fora (especially the 
OECD and the G-20), the use of defensive measures has been recognized as a legitimate tool 
which countries may utilize to protect their tax systems and prevent harmful tax practices. In this 
respect, the evidence presented by Argentina shows that transactions with non-cooperative jurisdictions pose a greater risk of tax evasion. It also shows that it is precisely the lack of 
transparency prevailing in such jurisdictions (security of anonymity) which attracts taxpayers 
wishing to evade tax in their countries of reside nce. We find evidence of recognition at the 
international level that preventive/defensive measur es which foster tax transparency contribute to 
securing compliance with the tax legislation in force, and thus to protecting the integrity of tax 
collection systems. It can be seen from the evidence submitted by Argentina that the OECD considers that such measures are "potentially useful to neutralise the deleterious effects of harmful tax practices".
879 In addition, the examples provided by the OECD show that Argentina's measures 
in this dispute are in line with those envisaged by the OECD. 
                                                                                                                                               
ficios_9789264201224-es). ("Such deterrence strategies include, for example, influencing taxpayers through 
the issuance of public rulings, applyi ng promoter penalties, imposing additi onal reporting obligations, as well as 
implementing effective mass communication strategies".) 
879 An OECD report explains: 
As noted above, the possible defens ive measures that might be co-ordinated must remain flexible. It is 
not, therefore, possible to produce an exhaustive or exclusive list of measures that might be used . 
Based on the identification of some measures currently in use in OECD member countries and 
non-OECD economies, a number of measures have been identified as being potentially useful to 
neutralise the deleterious effects of harmful tax practices . These defensive measures are: 
- The use of provisions having the effect of disallowing any de duction, exemption, credit or other 
allowance in relation to all substantial payments made to persons located in countries or jurisdictions engaged in harmful tax practices except where the taxpayer is able to establish satisfactorily that such payments do not exceed an arm's length amo unt and correspond to bona fide transactions . 
- The use of thin capitalisation provisions restrict ing the deduction of interest payments to persons 
located in jurisdictions engaged in harmful tax practices. 
- The use of legislative or administrative provisions having the effect of requiring any resident who 
makes a substantial payment to a person located in a country or jurisdiction engaged in a harmful tax practice, enters into a transaction with such a person , or owns any interest in such a person to report 
that payment, transaction or ownership to the tax authorities, such requirement being supported by 
substantial penalties for inaccurate report ing or non-reporting of such payments. 
- The use of legislative provisions allowing the taxation of residents on amounts corresponding to 
income that benefits from harmful ta x practices that is earned by entities established abroad in which 
these residents have an in terest and that would otherwise be subj ect to substantially lower or deferred 
taxes . 
- The denial of the exemption method or modification of the credit method. Where a country levies no or 
nominal tax on most of the income arising therein because of the existence of harmful tax practices, it may not be appropriate for such income to receive an exemption otherwise intended to relieve double 
taxation. Member countries that pe rmit foreign tax credits may wish to modify those rules to prevent 
the pooling of income benefiting from harmful tax practices with other income. In addition, such 
countries may wish to implement systems to verify the amounts claimed actually constitute creditable taxes. - The use of legislative provisions ensuring that withholding taxes at a minimum rate apply to all payments of dividends, interest and royalties made to beneficial owners benefiting from harmful tax 
practices . 
- The use of provisions for special audit and enforcement programs to co-ordinate enforcement activities 
involving entities and transactions related to countries and jurisdictions engaged in harmful tax practices. 
- Terminating, limiting and not entering into tax treaties. Participating countries could adopt, and make 
public, a policy of not entering into tax conventions with countries and jurisdictions involved in harmful 
tax practices. Those that are parties to conventions with such countries and jurisdictions may wish to WT/DS453/R 
 
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  7.716.  Another OECD report which deals with ways of countering the incentives to evade taxes 
and explains the usefulness of measures which act ex ante  to deter taxpayers from evading tax is 
a 2013 report entitled  Addressing Base Erosion and Profit Shifting . In this report, the OECD 
explains that: 
Measures that negate or reduce the tax benefit sought, as well as initiatives aimed at 
influencing taxpayer's and third parties' behaviours, are of obvious relevance in the area of corporate tax planning. In practice, there are a variety of anti-avoidance 
strategies that countries use to ensure the fairness and effectiveness of their 
corporate tax system. These strategies often focus on deterring, detecting and responding to aggressive tax planning. Deterrence strategies generally aim at 
deterring taxpayers from taking an aggressive position. Such deterrence strategies 
include, for example, influencing taxpayers through the issuance of public rulings, 
applying promoter penalties, imposing additional reporting obligations, as well as implementing effective mass communication strategies. Detection strategies aim to 
ensure the availability of timely, targeted and comprehensive information, which 
traditional audits alone can no longer deliver. The availability of such information is important to allow governments to identify risk areas in a timely manner and be able 
to quickly decide whether and how to respond, thus providing increased certainty to 
taxpayers. 
In terms of response strategies, the ultimate objective of anti-avoidance measures is 
often not only to counter behaviour perceived as inappropriate but also to influence 
future behaviour. In other words, anti-avoidance measures are fundamental policy 
prohibitions to engage in certain planning and/or to obtain certain results.
880 
7.717.  In the light of the foregoing, the Panel concludes that measures 1, 2, 3, 4, 7 and 8 
contribute to achieving the objectives pursued. 
3. The degree of trade restrictiveness of measures 1, 2, 3, 4, 7 and 8 
7.718.  We turn to an examination of the degree of restriction of measures 1, 2, 3, 4, 7 and 8. The 
Panel notes, firstly, that none of the measures in  question, i.e. measures 1, 2, 3, 4, 7 and 8, 
entails a ban on trade in services in the sectors and modes concerned. 
                                                                                                                                               
take appropriate measures to ensure that these conventions are limited or terminated. Alternatively, 
participating countries could consider that all existing or proposed treaties with a country or jurisdiction 
engaging in harmful tax practices contain a limitation of benefits clause which would prevent the benefits of the treaty from being claimed by third co untry residents who had no real connection with the 
country or jurisdiction. With respect to terminating an existing treaty, it  is recognized that such action 
has important implications which go beyo nd the revenue impact of the treaty. 
See OECD, The OECD's Project on Harmful Tax Practices, The 2004 Progress Report , (Exhibit ARG-9), 
para. 30, available at http://www/oecd.org/ctp/harmful/2664450.pdf (exhibit provided in English; Spanish text available at http://www.ief.es/recursos/publicaciones/libros/informes_OCDE.aspx ). (emphasis added) 
880 The OECD mentions various measures to combat tax avoidance which, in its opinion, are "most 
relevant": 
 General anti-avoidance rules or doctrines , which limit or deny the availability of undue tax 
benefits, for example, in situations where transact ions lack economic substance or a non-tax business 
purpose;  Controlled foreign company rules (CFC) , under which certain base eroding or "tainted" income 
derived by a non-resident controlled entity is attributed to and taxed currently to the domestic 
shareholders regardless of whether the income has been repatriated to them; 
 Thin capitalisation and other rules limiting interest deductions , which disallow the deduction of 
certain interest expenses when, e.g. the debt-to-equity ratio of the debtor is considered to be 
excessive;  Anti-hybrid rules , which link the domestic tax treatment with the tax treatment in that foreign 
country thus eliminating the possibility for mismatches; 
 Anti-base erosion rules , which impose higher withholding taxe s on, or deny the deductibility of, 
certain payments ( e.g. those made to entities located in certain jurisdictions). 
See OECD, Addressing  Base Erosion and Profit Shifting , (Exhibit ARG-22), pp. 37 and 38, available at 
http://www.oecd.org/tax/addressing-base-erosion-and-profit-shifting-9789264192744-en.htm  (exhibit 
provided in English; Spanish text available at: http://www.oecd-ilibrary.org/taxa tion/abordando-la-erosion-de-
la-base-imponible-y-la-deslocalizacion-de-beneficios_9789264201224-es ). (emphasis original) WT/DS453/R 
 
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  7.719.  We recall that measure 1 results in a higher tax on profits derived from certain services 
(loans, credits or other services involving the placement of funds in Argentina) provided by suppliers located in non-cooperative jurisdictions. There is an irrefutable presumption of enrichment, in the sense that consumers in Argentina that engage in a transaction with an entity 
located in a non-cooperative country shall be requir ed to pay a higher tax even when they are in a 
position to show that the purpose of the operation is not to evade taxes in Argentina (for example, that it is a genuine loan and not an "insider loan"). The effect of measure 1 is that, for 
hypothetically the same type of service, the supp lier from a non-cooperative jurisdiction will pay 
more gains tax on its transactions in Argentina than a supplier from a cooperative jurisdiction. This is not, therefore, a ban on trade in services but a measure that could potentially deter trade with non-cooperative countries by imposing higher taxes. 
7.720.  Measure 2 consists of a rebuttable presum ption that enables the Argentine authorities to 
obtain additional information on certain transactions. We understand and accept Argentina's explanation that it has access to relevant tax information from those jurisdictions with which it has 
signed an agreement on the exchange of ta x information. On the other hand, the same 
information is not automatically available in non-cooperative jurisdictions. We also note that Argentine taxpayers may avoid the tax effects of this measure by providing the additional 
information required. We do not therefore consider  that measure 2 entails a very high level of 
trade restriction. 
7.721.  Measures 3 and 4 also enable the Argentine authorities to obtain additional information on 
certain transactions. These measures do not prevent the conduct of transactions but make them 
subject to certain requirements. For example, meas ure 3 results in the imposition of an accounting 
method which implies a greater burden for Argentine taxpayers in their transactions with suppliers of non-cooperative countries
881 but at no time does it prevent them from carrying out the 
transaction. The situation is similar with regard to measure 4, where we see that the rule 
applicable to Argentine taxpayers conducting transactions with service suppliers from non-cooperative countries does not prevent them de ducting the value of the transaction from their 
tax base, but simply defers the deduction to the fiscal year in which payment takes place, instead 
of the time of accrual. However, we also do not consider that measures 3 and 4 imply a very high level of trade restriction. 
7.722.  Measure 7 consists of imposing additional requirements on branches of companies from 
non-cooperative countries for registration in the Public Trade Register of the Autonomous City of 
Buenos Aires. This measure also enables the Argentine authority to obtain information to which it has no access when dealing with companies related to a non-cooperative jurisdiction.
882 
Accordingly, the burden of providing the informatio n required does not appear to us to represent a 
significant obstacle to international trade in services. 
7.723.  Measure 8 comes into play when the serv ice supplier withdraws from the Argentine market 
and repatriates its investment. This measure requires service suppliers from non-cooperative 
countries established in Argentine territory for a period of 365 days or more to seek prior authorization from the BCRA in order to repatriate their investment. Argentina claims that this measure implies closer scrutiny by the BCRA but this cannot prevent the repatriation of direct 
investments if they meet the prescribed conditions. Argentina indicates that, to date, all requests 
have received prior authorization.
883 Panama has not disputed these facts, but claims that 
Argentina does not provide any type of evidence in support of its statements.884 The burden of 
providing the information required by the BCRA when repatriating investment does not appear to 
us to represent a significant barrier to international trade in services. 
7.724.  From the foregoing, it can be seen that measure 1 may have a potentially restrictive 
impact on trade in services inasmuch as it is a presumption that cannot be rebutted by the 
Argentine taxpayer, not even if the legitimacy of  the transaction can be proved. In the case of 
measure 2, we note that its restrictive impact on international trade in services is less, since Argentine taxpayers can be released from the presumption provided that they can prove that the 
funds were earned from activities that they actually carried out or that were carried out by a third 
                                               
881 See para. 7.307 above. 
882 Argentina's first written submission, paras. 126 and 127. 
883 Argentina's first written submission, Expl anatory Annex No. 2, paras. 41 and 43. 
884 Panama's second written submission, para. 2.803. WT/DS453/R 
 
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  party, or else that the funds had been duly declared. For measure 3, we consider that the impact 
on international trade in services is also limited inasmuch as, although it entails a different accounting methodology in order to determine the market value of the transactions, which may attract higher tax, at no time does it prevent such transactions. Likewise, we do not see that 
measure 4 places significant obstacles in the way of transactions with non-cooperative countries, 
as its effect is to defer the deduction of expenses arising from such transactions for Argentine taxpayers until the time payment is made, but in no way prevents them from deducting the costs 
incurred. As regards measure 7, this requires additional information in order to prove the 
legitimacy of the commercial activities of the parent company in its home jurisdiction for any branch wishing to establish a commercial presence in the City of Buenos Aires. Measure 8 also 
involves supplying information to the Argentine authorities in order to verify the legitimacy of a 
transaction; it seems to us important to bear in mind also that this measure reflects the FAFT's 
recommendations.
885 
7.725.  We stress that none of these measures pr events the supply of services by service suppliers 
from non-cooperative countries if the transactions have legitimate purposes. It seems to us, 
therefore, that these measures, except for measure 1, have relatively little restrictive impact on international trade in services. Even in the case of measure 1, the effect on international trade in 
services is not equivalent to a ban. 
7.726.  Panama argues that measures 1, 2, 3 and 4 affect transactions with non-cooperative 
jurisdictions which are not a subject of concern for Argentina but which are nevertheless affected by the measures. We understand that Panama is referring to legitimate transactions with 
non-cooperative jurisdictions. We do not share Panama's opinion in this regard. Indeed, the 
measures in question have to cover all transactions because they apply ex ante  and their purpose 
is to detect fraudulent transactions. If the Argentine authorities could distinguish ex ante between 
transactions with a legitimate purpose and those which involve fraudulent manoeuvres, the 
measures in question would not be necessary. 
7.727.  We recall that the Appellate Body has explained that "[a] measure with a relatively slight 
impact upon imported products might more easily be considered as 'necessary' than a measure 
with intense or broader restrictive effects".
886 In the case before us, the design of the measures 
and the evidence in our record does not permit us to conclude that measures 1, 2, 3, 4, 7 and 8 have a significant distortive effect on international trade in services. The Panel therefore considers 
that measures 1, 2, 3, 4, 7 and 8 have a limited restrictive effect on international trade in services. 
7.728.  Having examined factors such as the importance of the objective, the measure's 
contribution to achieving the objective and the de gree of trade restrictiveness of the measure, we 
now examine whether we can make a comparison between measures 1, 2, 3, 4, 7 and 8 and 
possible alternative measures.
887 This will enable us to determine whether there are other 
GATS-consistent measures reasonably available to Argentina.888 
4. Possible alternative measures to measures 1, 2, 3, 4, 7 and 8 
7.729.  We start by recalling that, according to the Appellate Body, it is for Panama, as the 
complaining Member, to identify possible alternatives to Argentina's measures 1, 2, 3, 4, 7 and 8.
889 As we explained above, the Appellate Body has also clarified that an alternative measure 
must be "reasonably available" to the responding  Member and must preserve for the Member the 
right to achieve the same desired level of protection with respect to the objective pursued: 
                                               
885 The FAFT indicates in relation to "higher-risk countries", that "[f]inancial institutions should be 
required to apply enhanced due diligence measures to bu siness relationships and transactions with natural and 
legal persons, and financial institutions, from countries for which this is called for by the FATF. The type of enhanced due diligence measures applied should be effective and proportionate to the risks." See the FATF Recommendations, (Exhibit ARG-25), p. 19. See also Argentina's first written submission, Explanatory Annex No. 2, para. 48. 
886 Appellate Body Report, Korea – Various Measures on Beef , para. 163. 
887 See Appellate Body Report, EC – Seal Products , para. 5.214 (referring to Appellate Body Report, 
EC – Seal Products , para. 5.169) 
888 See Appellate Body Report, EC – Seal Products , para. 5.214 (referring to Appellate Body Reports, 
US – Gambling , para. 307; and Korea – Various Measures on Beef , para. 166). 
889 Appellate Body Reports, US – Gambling , para. 309; and Brazil – Retreaded Tyres , para. 156. WT/DS453/R 
 
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  The requirement, under Article XIV(a), that a measure be "necessary"—that is, that 
there be no "reasonably available", WTO-consistent alternative—reflects the shared understanding of Members that substantive GATS obligations should not be deviated from lightly. An alternative measure may be found not to be "reasonably available", 
however, where it is merely theoretical in nature, for instance, where the responding 
Member is not capable of taking it, or where the measure imposes an undue burden on that Member, such as prohibitive costs or substantial technical difficulties. 
Moreover, a "reasonably available" alternative measure must be a measure that would 
preserve for the responding Member its right to achieve its desired level of protection with respect to the objective pursued under paragraph (a) of Article XIV.
890 
7.730.  Only if the complaining party identifies alternative measures consistent with GATS 
provisions and achieving the same level of protection with respect to the objective pursued must 
the responding party demonstrate why it does not consider the alternative measure proposed by the complainant to be appropriate.
891 
7.731.  It is thus for Panama to identify possible alternative measures reasonably available to 
Argentina that would enable Argentina to ensure the collection of taxes in Argentina, in accordance with its tax legislation, and that they do not involve additional risks of harmful tax practices or 
money laundering. 
7.732.  With regard to measures 1, 2 and 3, Panama basically argues that Argentina could take 
measures that target only the problem Argentina wishes to address, but do not affect all transactions, especially lawful ones.
892 We note, in the first place, that Panama has not specifically 
described what type of measure reasonably available to Argentina could be applied to transactions 
that are the subject of Argentina's concern, that is, transactions which cover up harmful tax practices. In fact, by their very nature, transactions which cover up tax evasion manoeuvres are 
not readily identifiable as such and the tax authorities therefore must have the means to identify 
them. Consequently, measures which would be applicable solely to transactions that constitute tax evasion could only be ex post measures. Nevertheless, in order to identify any unlawful transaction 
in the first instance, other measures are needed, operating ex ante, to enable the tax authorities 
to identify those transactions that are lawful and those that are not. 
7.733.  With regard to measure 1, going beyond  the argument we have just expounded, Panama 
contends that the presumption "need not be irrebuttable".
893 It is our understanding that Panama 
is suggesting that an alternative measure for Argentina would be to transform the irrebuttable 
presumption provided for in Article 93(c) of the LIG into a rebuttable presumption. Although we 
consider that the possibility of rebutting a presumption could result in a lesser degree of trade 
restriction than in the case of an irrebuttable presumption, it is difficult for us to reconcile this 
argument of Panama's with its challenge to the rebuttable presumption in measure 2. Panama also argues that for transactions between related person s, Argentina "has available to it the transfer 
pricing regime under Article 15 of the LIG (except for its second paragraph), and other relevant 
provisions in the RIG, which would allow prices similar to market prices to be determined".
894 In 
any event, Panama does not explain how Argentina could achieve the same level of protection against the risk of tax evasion. In particular, Pana ma does not explain how, based on "Article 15 of 
the LIG (except for the second paragraph) … and other provisions in the RIG", Argentina could 
obtain information on a service supplier located in a non-cooperative jurisdiction in order to prevent the risk of tax evasion. 
7.734.  As regards measures 2 and 3, Panama puts forward no alternative measure, beyond 
stating, as we have already seen, that Argentina could take measures directed solely at unlawful transactions. 
                                               
890 Appellate Body Report, US – Gambling , para. 308. See also Appellate Body Report, Brazil – 
Retreaded Tyres , para. 156. (footnotes omitted) 
891 Appellate Body Report, US – Gambling , para. 311; and Brazil – Retreaded Tyres , para. 156. 
(footnotes omitted) 
892 Panama's second written submission, paras. 2.226 (measure 1); 2.344 (measure 2); and 2.463 
(measure 3). 
893 Panama's second written submission, para. 2.227. 
894 Panama's second written submission, para. 2.228. WT/DS453/R 
 
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  7.735.  With regard to measure 4, we note that Panama does not propose measures which could 
constitute alternatives reasonably available to Ar gentina and be less trade-restrictive. In the case 
of measure 7, Panama proposes as an alternative the elimination of this regulatory provision.895 In 
our view, this is equivalent to not proposing any alternative measure.896 Lastly, Panama does not 
propose possible alternatives to measure 8 either. 
7.736.  The Panel therefore concludes that Panama has not identified any specific measure 
reasonably available to Argentina, that is less trade-restrictive and able to achieve the same level 
of protection in respect of the objective pursued as measures 1, 2, 3, 4, 7 and 8. 
(ii) Conclusion 
7.737.  The Panel now has to weigh and balance the importance of the common interests or values 
protected by the laws or regulations in question , the contribution of the measures to securing 
compliance with these laws or regulations, and the effect of the measures on trade in services. In 
weighing these three factors, we must also bear in mind that no reasonably available alternative measures have been identified that would permit achievement of the same level of protection as 
measures 1, 2, 3, 4, 7 and 8. 
7.738.  The Panel has found that the protection of  its tax collection system and the fight against 
harmful tax practices and money laundering are interests or values of the utmost importance for 
Argentina. We have also concluded that measures 1, 2, 3, 4, 7 and 8 contribute to achieving the 
objective pursued. We have also considered that measures 1, 2, 3, 4, 7 and 8 have a limited restrictive effect on international trade in services. 
7.739.  In addition, we have found that Panama has not identified any measure reasonably 
available to Argentina and less trade-restrictive that Argentina could take in order to achieve the 
same objectives, that is, to achieve the same level of tax collection and, as regards measure 8, achieve the same level of protection against money laundering. 
7.740.  In the light of the foregoing, the Panel concludes on a preliminary basis that measures 1, 
2, 3, 4, 7 and 8 are "necessary to secure comp liance with laws or regulations which are not 
inconsistent" with the GATS within the meaning of  subparagraph (c) of Article XIV of the GATS. We 
now proceed to examine whether measures 1, 2, 3, 4, 7 and 8 comply with the requirements of 
the chapeau of Article XIV of the GATS. 
(c) Third element: Whether measures 1,  2, 3, 4, 7 and 8 comply with the 
requirements of the chapeau of Article XIV of the GATS  
7.741.  Having found that measures 1, 2, 3, 4, 7 and 8 are provisionally justified under 
subparagraph (c) of Article XIV of the GATS, we shall now consider whether they comply with the requirements laid down in the chapeau of that provision, which states: 
Subject to the requirement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in services, nothing in 
this Agreement shall be construed to prev ent the adoption or enforcement by any 
Member of measures… 
7.742.  Recently, in EC – Seal Products , in connection with the chapeau of Article XX of the 
GATT 1994, which has very similar wording, the Appellate Body stated that "it imposes additional 
disciplines on measures that have been found to violate an obligation under the GATT 1994, but 
that have also been found to be provisionally just ified under one of the exceptions set forth in the 
subparagraphs of Article XX of the GATT 1994".
897 The Appellate Body explained that the chapeau 
imposes these additional disciplines "by requiring that measures not be 'applied in a manner which 
                                               
895 Panama's second written submission, para. 2.762. 
896 In Colombia – Ports of Entry , the panel considered that when the alternative measure proposed by 
the complainant consists of producing the same result as would be obtained if the panel were to uphold any of 
its claims, it is not considered that the complainant ha s identified any reasonably available specific measure. 
See Panel Report, Colombia – Ports of Entry , para. 7.611. 
897 Appellate Body Report, EC – Seal Products , para. 5.296. WT/DS453/R 
 
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  would constitute a means of arbitrary or unjustifiable discrimination between countries where the 
same conditions prevail, or a disguised restriction on international trade'."898 
7.743.  As regards the function of the chapeau, in EC – Seal Products , the Appellate Body indicated 
that: 
The function of the chapeau of Article XX of  the GATT 1994 is to prevent the abuse or 
misuse of a Member's right to invoke the exceptions contained in the subparagraphs of that Article.
899 In that way, the chapeau operates to preserve the balance between 
a Member's right to invoke the exceptions of Article XX, and the rights of other 
Members to be protected from conduct proscribed under the GATT 1994.900 Achieving 
this equilibrium is called for "so that neither of the competing rights will cancel out the other and thereby distort and nullify or impa ir the balance of rights and obligations 
constructed by the Members themselves".
901 As the Appellate Body stated in US – 
Gasoline , the burden of demonstrating that a measure provisionally justified under 
one of the exceptions of Article XX does not constitute an abuse of such an exception 
under the chapeau rests with the party invoking the exception.902 The Appellate Body 
explained that this is "a heavier task than that involved in showing that an exception … encompasses the measure at issue."
903904 
7.744.  In US – Gambling , the Appellate Body explained that the chapeau of Article XIV of the 
GATS refers to "the application of a measure already found by the Panel to be inconsistent with 
one of the obligations under the GATS but falling within one of the paragraphs of Article XIV".905 In 
EC – Seal Products , the Appellate Body clarified that: 
Although this suggests that the focus of the inquiry is on the manner in which the 
measure is applied , the Appellate Body has noted that whether a measure is applied  in 
a particular manner "can most often be discerned from the design, the architecture, 
and the revealing structure of a measure".906 It is thus relevant to consider the 
design, architecture, and revealing structure of a measure in order to establish whether the measure, in its actual or expected application, constitutes a means of 
arbitrary or unjustifiable discrimination between countries where the same conditions 
prevail. This involves a consideration of "both substantive and procedural requirements" under the measure at issue.
907 ,908 (emphasis original) 
7.745.  We note that the chapeau of Article XIV of the GATS describes in terms very similar to 
those of Article XX of the GATT 1994 the existenc e of three types of situation relating to the 
application of measures that may give rise to inconsistency with the said chapeau: (i) arbitrary discrimination between countries where like conditions prevail; (ii) unjustifiable discrimination 
between countries where like conditions prevail; or (iii) a disguised restriction on trade in services. 
In disputes under Article XX of the GATT 1994, the first two situations (i.e. arbitrary discrimination 
                                               
898 Appellate Body Report, EC – Seal Products , para. 5.296. 
899 (Footnote original) Appellate Body Report, US – Gasoline , p. 22. 
900 (Footnote original) Appellate Body Report, US – Shrimp , para. 156. 
901 (Footnote original) The Appellate Body, in US – Shrimp , stated that: 
The task of interpreting and applying the chapeau is, hence, essentially the delicate one of locating and marking out a line of equilibrium between the right of a Member to invoke an 
exception under Article XX and the rights of the other Members under varying substantive provisions (e.g., Article XI) of the GATT 1994, so that neither of the competing rights will cancel out the other and thereby distort and nullify or impair the balance of rights and obligations 
constructed by the Members themselves in that Agreement. Appellate Body Report, US – Shrimp , para. 159 
902 (Footnote original) Appellate Body Report, US – Gasoline , pp. 22-23. 
903 (Footnote original) Appellate Body Report, US – Gasoline , p. 23. 
904 Appellate Body Report, EC – Seal Products , para. 5.297. 
905 Appellate Body Report, US – Gambling , para. 339 (citing Appellate Body Report, US – Gasoline ) 
(emphasis original). We recall that the text of the chapeau of Article XIV of the GATS is drafted in terms virtually identical to the chapeau of Article XX of the GATT 1994. Accordingly, the case law developed under Article XX of the GATT 1994 is relevant for our analysis. 
906 (Footnote original) Appellate Body Report, Japan – Alcoholic Beverages II , p. 29. 
907 (Footnote original) Appellate Body Report, US – Shrimp , para. 160. 
908 Appellate Body Report, EC – Seal Products , para. 5.302. WT/DS453/R 
 
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  or unjustifiable discrimination) have often been addressed together.909 The existence of one of 
these situations suffices to conclude that a measure cannot be justified under Article XX of the GATT 1994.
910 
7.746.  Bearing in mind this guidance from the Appellate Body, we shall examine whether the 
application of the measures in question constitutes "a means of arbitrary or unjustifiable 
discrimination between countries where like conditions prevail". In US – Shrimp , the Appellate 
Body indicated that in order for a measure to be applied in a manner which constitutes "arbitrary 
or unjustifiable discrimination between countries where the same conditions prevail", three 
elements must exist: (i) the application of the measure must result in discrimination; (ii) the discrimination must be arbitrary or unjustifiable in character; and (iii) this discrimination must occur between countries where the same conditions prevail.
911 As the Appellate Body declared in 
Brazil – Retreaded Tyres , "t]he assessment of these factors … was part 
of an analysis that was directed at the cause, or the rationale, of the discrimination".912 
7.747.  We shall accordingly examine whether measures 1, 2, 3, 4, 7 and 8 are applied in such a 
manner as to discriminate between services and service suppliers of non-cooperative countries and 
like services and service suppliers of cooperative countries (MFN obligation under Article II:1 of the GATS). 
7.748.  In order to conduct this examination of the measure's application, we shall be guided by 
the Appellate Body's statement in EC – Seal Products . As already indicated, in that dispute the 
Appellate Body determined that "whether a measure is applied  in a particular manner 'can most 
often be discerned from the design, the architec ture, and the revealing structure of a measure'".
913 
Consequently, below we shall examine "the design , the architecture, and the revealing structure" 
of measures 1, 2, 3, 4, 7 and 8 "in order to establish whether the measure, in its actual or expected application, constitutes a means of arbitrary or unjustifiable discrimination between 
countries where the same conditions prevail".
914 
7.749.  We have found that measures 1, 2, 3, 4,  7 and 8 distinguish between services and service 
suppliers of cooperative and non-cooperative countries. This distinction is made pursuant to 
Decree No. 589/2013, which we consider inherent in each and every one of the measures at issue 
as it is the key piece of legislation which defines their design and operation. 
7.750.  Article 1 of Decree No. 589/2013 establishes that cooperative countries are countries 
which (i) have signed with Argentina an agreement on the exchange of tax information or a 
convention to avoid international double taxation  with a broad exchange of information clause, 
provided that information is effectively exchanged; or (ii) have initiated negotiations with Argentina for the purpose of signing such an agreement or convention. In the latter case, the AFIP 
shall be the body responsible for determining whether the conditions necessary for the initiation of 
negotiations have been met.
915 
7.751.  We note that the text of Decree No. 589/2013 provides that a country may be considered 
"cooperative" not only when it has signed a tax information exchange agreement with Argentina 
and relevant information is effectively being exchanged, but also when it has initiated negotiations  
with Argentina. However, we ob serve that Argentina has no access to tax information from 
countries with which it is negotiating. Argentina itself appears to acknowledge this when it states 
that the objective of granting cooperative status to those countries with which it is negotiating is 
to encourage the conclusion of such agreements.916 We fail to see, therefore, how Argentina can 
                                               
909 See, for example, Appellate Body Reports, US – Gasoline , US – Shrimp (Article 21.5 – Malaysia), 
US – Gambling , and Brazil – Retreaded Tyres; and Panel Reports, US – Gambling , EC – Tariff Preferences , EC – 
Asbestos  and Brazil – Retreaded Tyres . 
910 Appellate Body Report, US – Shrimp , para. 184. 
911 Appellate Body Report, US – Shrimp , para. 150. 
912 Appellate Body Report, Brazil – Retreaded Tyres , para. 225. (footnote omitted) 
913 Appellate Body Report, EC – Seal Products , para. 5.302 (citing Appellate Body Report, Japan – 
Alcoholic Beverages II , p. 29). (emphasis original) 
914 Appellate Body Report, EC – Seal Products , para. 5.302. We point out that Article XIV of the GATS 
refers to "like conditions", whereas the GATT 1994 refers to "the same conditions". 
915 Decree No. 589/2013, (Exhibits PAN-3 / ARG–35). 
916 Argentina's second written submission, para. 76. See also Argentina's response to Panel question 
No. 12(b) and opening statement at the second meeting of the Panel, para. 36. WT/DS453/R 
 
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  systematically have access to the information necessary to prevent harmful tax practices or money 
laundering without the existence of an information exchange agreement. 
7.752.  In our view, it is not simply a question of Argentina not having access to the tax 
information of countries with which it is negotiating. Indeed, to this must be added the fact that, 
during the negotiations, the negotiating countries are not subject to the requirements laid down in 
measures 1, 2, 3, 4, 7 and 8. This means that th e Argentine authorities are not able to ensure the 
legitimacy of transactions with suppliers from th ese countries, even though the lack of access to 
information means that these countries represent a risk for Argentina's tax system. The mere fact 
of initiating and conducting negotiations does not enable Argentina to meet its objectives of ensuring tax collection and combating harmful tax practices or money laundering. In fact, it could be argued that this situation is counterproductive with regard to the achievement of these 
objectives. We therefore agree with Panama that the mere initiation of negotiations – without the 
certainty of concluding an agreement – does not constitute a sufficient mechanism to ensure the effective exchange of information and compliance with Argentine legislation.
917 
7.753.  We are not convinced that, as contende d by Argentina, the fact of designating as 
cooperative countries those with which negotiations have been initiated in good faith with a view to signing an information exchange agreement pr omotes the objectives of such agreements and 
encourages the rapid conclusion of an agreement.
918 It appears to us, on the contrary, that a 
country which has the status of cooperative country despite failing to transmit the information sought by the Argentine authorities does not really have any incentive rapidly to conclude an agreement obliging it to exchange the relevant tax information. 
7.754.  The relations between Panama and Argent ina illustrate this problem. As explained by 
Argentina, Panama was included "as of 1 January 2014 as 'a cooperative country for tax transparency purposes' in the context of Decr ee No. 589/2013 and the RG AFIP [3576]/2013, after 
having initiated negotiations on signing an agreement on the exchange of information for tax 
purposes in November 2013 …".
919 In other words, up to 31 December 2013, Argentina considered 
Panama to be a "country with low or no taxes"920 and, accordingly, applied defensive tax measures 
to it. From 1 January 2014 onwards, Argentina ceased to apply these defensive tax measures to 
Panama as it had initiated negotiations with Panama in November 2013.921 Nevertheless, it would 
appear there was no change as regards Argentina's access to tax information from Panama, despite Panama's new status: Argentina still has no access to such information.
922 
7.755.  Consequently, the Argentine authorities' application of the initiation of negotiations rule for 
granting cooperative country status creates distortions within the category of cooperative countries itself, since Argentina includes within that category both countries with which it effectively 
exchanges information (for example, Germany) and countries with which there is no exchange (as 
is the case for Panama). In turn, these distortions are reflected in the application of measures 1, 2, 3, 4, 7 and 8, as they are imposed on no n-cooperative countries in application of Decree 
No. 589/2013. 
7.756.  Together with this situation, we also note distortions in relation to the updating of the list. 
We recall that, pursuant to Article 2 of Decree No. 589/2013, the AFIP is empowered to draw up the list of cooperative countries and to keep it up  to date. According to Argentina, this updating 
takes place annually at the beginning of the fiscal year.
923 At the time of circulating this Report to 
the parties, the list of countries which Argentina considers to be cooperative continues to be the one published on the AFIP's website on 1 January 2014. Panama, despite have repeatedly stated 
that "it has not initiated negotiations on concluding an agreement on exchange of tax 
                                               
917 Panama's opening statement at the fi rst meeting of the Panel, para. 54. 
918 Argentina's opening statement at the second meeting of the Panel, para. 36. See also response to 
Panel question No. 9(a). 
919 Argentina's response to Panel question No. 10(c) and (d). 
920 Decree No. 589/2013 replaced this term by "country not considered 'cooperative for tax 
transparency purposes'". 
921 Argentina's response to Panel question No. 10(c) and (d). 
922 We understand that Panama's refusal to acknowledge that it has initiated negotiations with a view to 
signing an agreement on the exchange  of information appears to indicate that Panama has not exchanged 
information with Argentina. See Panama's  response to Panel question No. 7. 
923 Argentina's opening statement at the second meeting of the Panel, paras. 41-43. WT/DS453/R 
 
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  information"924, remains on the list of cooperative countries. However, other countries with which 
Argentina initiated negotiations in 2014 (namely, Belarus, Cameroon, Côte d'Ivoire, Cyprus, Gabon, Gibraltar and Hong Kong (China))
925 still do not have cooperative country status and are 
therefore subject to Argentina's defensive tax measures. 
7.757.  We also note that the European Union has expressed doubts about the "apparent 
discretion" with which Argentina designates cooperative jurisdictions for the purpose of applying the chapeau of Article XIV of the GATS. The Euro p e a n  U n i o n  c l a i m s  t h a t  " t h e  d i s c r e t i o n  o f  
Argentina's authorities does not seem to be curtailed by established criteria provided in law nor do 
the distinctions drawn by Argentina appear to be linked to the regulatory objective. Rather, from 
Argentina's own description of how Panama was first considered to be a non-cooperating country … and is designated as a cooperating jurisdiction as of 1 January 2014, it appears that Argentina is 
not necessarily making distinctions on the basis of international standards or effective tax 
cooperation on a bilateral basis".
926 
7.758.  In this context, Panama criticizes Argentina for excluding from the "cooperative countries" 
category jurisdictions such as Bahrain and Hong Kong (China) which, in the opinion of the Global 
Forum itself, are in the same situation as Argentina as regards compliance with the tax transparency and information exchange standards of that organization. Moreover, Argentina 
includes in the list of "cooperative countries" jurisdictions which, in the opinion of the Global 
Forum, do not yet meet its basic standards (for  example, Luxembourg and the British Virgin 
Islands).
927 Panama's argument does not appear to us to be relevant. Argentina's objective is to 
exchange tax information. The key factor in enabling Argentina to exchange tax information is 
signature of an agreement on the exchange of tax information with a jurisdiction, not the Global 
Forum's classification or categorization of the jurisdiction. Thus, the fact that a country is "in the same situation" as Argentina according to the Forum's criteria (that is, at the same "peer review" 
stage) does not necessarily mean that the country is exchanging information with Argentina.
928 
Likewise, the fact that a country does not comply with the Global Forum's basic standards does not mean that it does not exchange tax information with Argentina if it has signed an information 
exchange agreement with Argentina.
929 Again, the distortion has its origin in the discretionary 
authority which governs the updating of the list, which is expressed in practice in the imposition of measures 1, 2, 3, 4, 7 and 8, which apply to non-cooperative countries pursuant to Decree No. 589/2013. 
7.759.  We also find it difficult to reconcile the application of these measures, pursuant to Decree 
No. 589/2013, with the transparency and inform ation exchange standards established by the 
Global Forum itself. The "Terms of Reference" fo r the Global Forum's Peer Review Process which 
represent, in particular, "the standards and key elements against which jurisdictions' legal and 
administrative framework and actual implementati on of the standards will be assessed" explain 
that: 
Exchange of information for tax purposes is effective when reliable information, 
foreseeably relevant to the tax requirements of a requesting jurisdiction is available, 
or can be made available, in a timely manner and there are legal mechanisms that enable the information to be obtained and exchanged. It is helpful, therefore, to 
conceptualize transparency and exchange of information as embracing three basic 
components: 
                                               
924 Panama's response to Panel question No. 7. 
925 Argentina's response to Panel question No. 10(b)(ii). 
926 European Union's third-party submission, para. 121 (Spanish translation by the WTO Secretariat). 
927 Panama's response to Panel question No. 1 (referring to Exhibits PAN-3 and ARG-2). 
928 It can be seen from the actual  terms of reference of the Global Forum that the exchange of 
information essentially has a legal basis: "The legal authority to exchange information may be derived from bilateral or multilateral mechanisms ( e.g. double tax conventions, tax information exchange agreements, the 
Joint Council of Europe/OECD Convention on Mutual Admi nistrative Assistance in Tax Matters) or arise from 
domestic law." See Global Forum, Terms of Reference to Monitor and Review Progress Towards Transparency 
and Exchange of Information for Ta x Purposes (Terms of Reference) , OECD, 2010, (Exhibit ARG-40), para. 14 
(exhibit provided in English; Spanish translation by the WTO Secretariat). Paragraph C.2 of this document 
provides: "The jurisdictions' network of information exchange mechanisms should cover all relevant partners". 
929 In fact, countries which do not yet comply with the Forum's standards have an interest in signing 
agreements, since this is one of the criteria taken in to account by the Forum when evaluating its Members' 
level of compliance with the Forum's standards. WT/DS453/R 
 
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   availability of information 
 appropriate access to the information, and 
 the existence of exchange of information mechanisms. 
In other words, the information must be available , the tax authorities must have 
access to the information, and there must be a basis for exchange . If any of these 
elements are missing, information exchange will not be effective.930 
7.760.  As regards the "essential elements" of exch ange of information, the Global Forum explains 
that exchange of information mechanisms should "provide for effective exchange of information and should be in force; where agreements have been signed, jurisdictions must take all steps 
necessary to bring them into force expeditiously".
931 Accordingly, the Global Forum lays emphasis 
on the exchange of information having a legal basis which guarantees effective exchange. The mere prospect – whether near or remote – of ob taining such information because negotiations on 
an information exchange agreement have been initiated (including negotiations initiated in good 
faith between Argentina and another country) does not appear to be in line with the standard 
established by the Global Forum. 
7.761.  From the foregoing, we conclude that, in granting cooperative country status to countries 
with which it is negotiating a tax information exchange agreement, without having in force an 
agreement that allows effective exchange of such information, Argentina is applying measures 1, 2, 3, 4, 7 and 8 in a manner that is counterproduc tive with regard to the objective it has itself 
declared in order to justify the distinction between cooperative and non-cooperative countries. We 
recall that this objective is "the ability … to have access to the information necessary to secure compliance with Argentina's laws and regulations".
932 This situation leads us to the statement by 
the Appellate Body in Brazil – Retreaded Tyres  in the sense that the absence of a relationship 
between the measures and the objectives indicates that the measures discriminate in an "arbitrary 
or unjustifiable" way.933 For example, jurisdictions in different situations as regards Argentina's 
access to information are classified in the same category; and jurisdictions in a similar situation as 
regards Argentina's access to information are placed in different categories. We also consider that 
the annual updating of the list leads to discriminatory treatment between jurisdictions in the same situation. In both cases, we consider that the di stortions caused by the design and application of 
Decree No. 589/2013 are carried over to the application of measures 1, 2, 3, 4, 7 and 8 because 
Decree No. 589/2013 is an inherent part of them. 
7.762.  Consequently, we conclude that the application of measures 1, 2, 3, 4, 7 and 8 constitutes 
arbitrary and unjustifiable discrimination within the meaning of the chapeau of Article XIV of the 
GATS. 
7.763.  Taking into account the above, the Pane l concludes that Argentina has not demonstrated 
that the measures at issue are applied in accordance with the chapeau of Article XIV of the GATS. 
7.3.5.2.5  Conclusion 
7.764.  In the light of the foregoing, we find that measure 1 (withholding tax on interest or 
remuneration payments), measure 2 (presumption of unjustified increase in wealth), measure 3 
(transaction valuation based on transfer prices), measure 4 (payment received rule for the 
allocation of expenditure), measure 7 (requirement s for the registration of branches) and measure 
8 (foreign exchange authorization requirement) ar e not covered by the exception in Article XIV(c) 
of the GATS because their application constitutes arbitrary or unjustifiable discrimination within the 
meaning of the chapeau of Article XIV of the GATS. 
                                               
930 Global Forum, Terms of Reference , OECD 2010, (Exhibit ARG-40), paras. 8 and 9 (footnotes omitted, 
emphasis original) (exhibit provided in English; Spanish translation by the WTO Secretariat). 
931 Global Forum, Terms of Reference , OECD 2010, (Exhibit ARG-40), para. C.1.8, p. 8 (exhibit provided 
in English; Spanish translation by the WTO Secretariat). 
932 Argentina's second written submission, para. 76. 
933 Appellate Body Report, Brazil – Retreaded Tyres , para. 232. WT/DS453/R 
 
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  7.3.6  Argentina's defence unde r Article XIV(d) of the GATS 
7.3.6.1  Main arguments of the parties 7.3.6.1.1  Argentina 7.765.  Argentina claims that its defensive tax measures in respect of Panama's national treatment 
claims under Article XVII of the GATS (measures 2, 3 and 4) are justified, alternatively, under 
Article XIV(d) of the GATS, as measures which establish " that the difference in treatment is aimed 
at ensuring the equitable or effective imposition or  collection of direct taxes in respect of services 
or service suppliers of other Members ".
934 
7.766.  Argentina claims that the defensive tax measures provided for in the LIG and the LPT 
"impose a difference in treatment that ensures the equitable or effective imposition or collection of direct taxes in respect of services or service su ppliers of other Members" within the meaning of 
Article XIV(d) of the GATS, including footnote 6 to subparagraph (d). Argentina contends that, as 
can be seen from Panama's description, Argentina's defensive tax measures have been established to impose different treatment that ensures the equitable or effective imposition or collection of 
direct taxes in respect of services or service suppliers from countries not cooperating for tax 
transparency purposes. Argentina claims that their very objective means that each of measures 2, 3 and 4 apply different treatment to transactions by Argentine taxpayers which involve service 
suppliers in non-cooperative countries in order to ensure the equitable and/or effective imposition 
and/or collection of the gains tax on the transactions in which they are involved. This is because these measures are applied in order to ensure im position or payment of the tax, or for both 
reasons, in Argentine territory and to prevent ta x avoidance or evasion and so protect Argentina's 
tax base. The different treatment is based on reco gnition of the difference existing as regards the 
impossibility of determining the tax base for gains tax when Argentine taxpayers engage in transactions with service suppliers located in non-cooperative countries, as the Argentine tax 
authorities do not have the necessary tax information.
935 
7.767.  Argentina argues that measures 2 and 4 are designed to secure compliance with the LIG, 
according to which taxable income is determined in Argentina. These defensive tax measures have 
been created to ensure the imposition and/or collection of gains tax and to protect the tax base, 
and to mitigate the risk of their artificial erosion and of avoidance and evasion manoeuvres between Argentine taxpayers and related entities located in non-cooperative jurisdictions. In 
Argentina's opinion, measure 3 accords different treatment to transactions with service suppliers 
of non-cooperative countries in order to ensure the effective imposition of gains tax in the absence 
of tax information that would make it possible to verify whether the valuations of transactions reflect actual operations which "determine, allocate or divide income, profits, gains, losses, 
deductions or credits of resident persons or bran ches, or between related persons or branches of 
the same person", safeguarding Argentina's tax ba se under the general transfer pricing regime in 
Argentine law. Argentina points out that its defensive tax measures have been created to accord 
different treatment with the objective of "ensuring the equitable and/or effective imposition and/or 
collection of gains tax". Argentina claims that these measures are in themselves consistent with the GATS and are similar to the tax measures widely adopted by WTO Members.
936 
7.768.  Argentina claims that its defensive tax measures are "necessary" to establish a "difference 
in treatment [which is] aimed at ensuring the equitable or effective imposition or collection of 
direct taxes in respect of services or service su ppliers of other Members". According to Argentina, 
each of the defensive tax measures challenged by Panama is capable of contributing notably – and 
does in fact contribute - to guaranteeing the equita ble or effective imposition or collection of direct 
taxes in respect of services or service suppliers of other Members, and also of preventing tax avoidance or evasion and safeguarding Argentina's tax base. Argentina argues that the difference 
in treatment of domestic transactions with Argentine taxpayers and transactions between 
Argentine taxpayers and entities located in non-cooperative tax jurisdictions is justified because the latter represent a greater risk of tax evasion, tax avoidance and fraud, since it is not possible for the Argentine authorities to determine whether the transaction has a legitimate commercial 
purpose or whether it is solely aimed at avoiding payment of tax in Argentina. According to 
                                               
934 Argentina's first written submission, para. 355. (emphasis original) 
935 Argentina's first written submission, paras. 356-361. 
936 Argentina's first written submission, paras. 363-365. WT/DS453/R 
 
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  Argentina, its defensive tax measures considerably reduce these risks inasmuch as they eliminate 
the potential tax benefits Argentine taxpayers could derive from simulated transactions carried out solely to avoid paying gains tax in Argentina and the consequent erosion of the tax base. Argentina reiterates that the defensive tax measures in question constitute a "global strategy" 
against the risks posed by the harmful tax practices of non-cooperative jurisdictions.
937 
7.769.  As to the degree of importance of the in terests protected by the defensive tax measures, 
Argentina contends that the objective of securing its tax collection system against the risks posed 
by the harmful tax practices of non-cooperative jurisdictions is an interest of the utmost 
importance. Argentina recalls that transactions between taxpayers and entities located in non-cooperative jurisdictions represent a greater ri sk of tax evasion, tax avoidance and erosion of 
Argentina's tax base because the Argentine authorities do not have independent access to 
information on the identity of the beneficial ow ners of the foreign entities and have no access 
either to information on the real value of the transactions in question. By reducing the opportunities for the occurrence of this type of de ceptive and fraudulent transaction, the defensive 
tax measures in question reinforce the overriding interest of protecting Argentina's tax system 
against the risks posed by the harmful tax practi ces of non-cooperative jurisdictions. Argentina 
reiterates that the level of importance of protecting tax collection and the application of 
Argentina's taxation system against the risks posed by the harmful tax practices of 
non-cooperative tax jurisdictions is corroborated by the work of the Global Forum.
938 
7.770.  Argentina argues that the defensive tax measures in question are not excessively 
restrictive on trade in financial services provided by service suppliers in non-cooperative tax 
jurisdictions.939 Regarding this aspect, Argentina refers to the statement in connection with its 
defence under Article XIV(c) of the GATS.940 
7.771.  Argentina concludes that there is no single factor that works against the conclusion that 
measures 2, 3 and 4 are covered by subparagraph (d) of Article XIV.941 
7.772.  Argentina argues that measures 2, 3 and 4 are applied in accordance with the chapeau of 
Article XIV of the GATS. The different treatment of taxpayers established by Argentina's defensive 
tax measures for gains tax purposes in relation to domestic transactions and transactions involving 
Argentine taxpayers and service suppliers of non-cooperative jurisdictions can hardly be seen as "arbitrary" or "unjustifiable". From the point of view of the Argentine tax authorities, these two 
categories of transaction entail different levels of risk in order "to ensure the equitable or effective 
imposition and collection of direct taxes in Argentina in accordance with its tax legislation". While 
in the case of suppliers in Argentina, the Argentine tax authorities are able to obtain the information necessary "to ensure the equitable and effective imposition and collection of direct 
taxes", in the case of suppliers from non-cooperative jurisdictions, the Argentine tax authorities 
are not able to obtain this information. According to Argentina, this difference has a negative effect on its capacity "to ensure the equitable or effective imposition and collection of direct taxes" and 
protect the integrity of its tax base.
942 
7.773.  Argentina contends that the difference in treatment of taxpayers for the purposes of gains 
tax in transactions involving service suppliers in Argentina and transactions involving Argentine taxpayers and service suppliers of non-cooperative jurisdictions, as reflected in Argentina's 
defensive tax measures, is based on the internationally recognized rules of the Global Forum and 
the OECD, to which, moreover, Panama has committed itself. Argentina concludes that the reason or motive for the different treatment attributed by the rules to service suppliers in Argentina 
vis-à-vis  service suppliers of non-cooperative jurisdictions is directly related to the legitimate 
purpose of "ensuring the equitable or effective imposition or collection of direct taxes in respect of services or service suppliers of other Members" in the light of the greater risks which transactions 
with non-cooperative jurisdictions entail in respect of effective collection, the risks of tax evasion 
                                               
937 Argentina's first written submission, paras. 367-371. 
938 Argentina's first written submission, paras. 381-384. 
939 Argentina's first written submission, paras. 386 and 387. 
940 See para. 7.536 above. 
941 Argentina's first written submission, para. 389. 
942 Argentina's first written submission, paras. 392-395. WT/DS453/R 
 
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  and avoidance, the transfer of pr ofits and the protection of Argentina's tax base in comparison 
with domestic transactions.943 
7.3.6.1.2  Panama 7.774.  Panama notes that there is no jurisprudence establishing the manner in which this 
provision should be interpreted and applied in an actual case, but there is no reason not to apply 
by analogy the same approach as that used for the application of Article XIV(c)(i) of the GATS. Panama recalls that the requirements of the chapeau are the same for a defence under 
Article XIV(d) of the GATS. According to Panama, the party invoking this provision in an attempt to 
show cause for a measure violating Article XVII of  the GATS has the burden of proving that its 
measure falls within the scope of this rule. Panama considers that, in order to provisionally justify a measure under subparagraph (d) of Article XIV, the respondent must prove that it is a measure 
whose purpose is to ensure "the equitable or effective imposition or collection of direct taxes in 
respect of services or service suppliers of other Members". To do so, a respondent must: 
(i) identify the direct taxes; (ii) establish what it  considers to be equitable or effective imposition 
or collection [of those taxes] in respect of services and service suppliers of other Members; and 
(iii) demonstrate that the purpose of the measure is to ensure such imposition or collection.
944 
7.775.  Panama argues that identification of direct taxes refers to identification of taxes directly 
imposed on the person subject to the tax obligation. Direct taxes have to be distinguished from 
indirect taxes or any other form of taxation (inclu ding levies and tax contributions). As regards the 
second element, the respondent must prove that the measure in question relates to equitable or 
effective imposition or collection in respect of services or service suppliers of other Members, and 
identify what it considers to be equitable or effective in terms of tax collection or imposition. 
According to Panama, if a measure does not relate to imposition or collection in respect of services or service suppliers of other Members, it falls outside the scope of Article XIV(d) of the GATS. 
Panama contends that, in the third place, a re spondent must prove that the purpose of the 
measure is to ensure the equitable or effective collection or imposition in question. In order to do this, it must evaluate the specific purpose of the measure, whether it is contained in a rule, as well 
as its design, structure and architecture.
945 
7.776.  Panama argues that measures 2, 3 and 4 are not intended to ensure the collection of 
direct taxes in respect of services or service suppliers abroad. According to Panama, measure 2 not only affects the collection of the gains tax – a direct tax – but also VAT and internal taxes, 
which are indirect taxes.
946 Panama acknowledges that measure 3 is related to the imposition or 
collection of a direct tax, but argues that it is not related to the collection or imposition of taxes on services or service suppliers of other Members. A ccording to Panama, the purpose of this measure, 
as Argentina itself has indicated, is to determin e the accuracy of the actual value between related 
parties in order to prevent transactions whose purpose is to evade taxes and/or transfer profits to non-cooperative jurisdictions. Panama claims that the measure may produce effects and a possible 
increase in the tax collected from the consumer of the services, that is, the Argentine taxpayer, 
but that it is not related to the imposition or collection of gains tax "in respect of services and service suppliers of other Members". It thus appears that the measure does not relate to tax collection or imposition in respect of service suppliers of other Members. Panama argues that it is 
also not a measure concerning the collection or imposition of gains tax in respect of services of 
other Members because the imposition or collection of gains tax in respect of the services that are affected in mode 1 is governed by Articles 9 to 13 and Title V of the LIG. With regard to the 
services that might be affected in mode 2 – in asmuch as they are activities conducted outside 
Argentina – Panama notes that they are not taxed under the LIG pursuant to Article 5 of this Law.
947 Panama acknowledges that measure 4 is related to collection of a direct tax.948 
7.777.  Panama argues that measures 2, 3 and 4 ar e not related to the collection or imposition of 
tax on services or service suppliers of other Me mbers. These measures may have effects and make 
                                               
943 Argentina's first written submission, paras. 396-398. 
944 Panama's second written submission, paras. 2.350-2.353. 
945 Panama's second written submission, paras. 2.354-2.358. 
946 Panama's opening statement at th e first meeting of the Panel, para . 55; second written submission, 
paras. 2.360 and 2.361. 
947 Panama's opening statement at th e first meeting of the Panel, para . 56; second written submission, 
paras. 2.471 and 2.472. 
948 Panama's second written submission, para. 2.570. WT/DS453/R 
 
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  possible an increase in the tax collected from th e consumer of the services, namely, the Argentine 
taxpayer. None of these three measures, however, is  related to collection or imposition in respect 
of services or service suppliers of other Members.949 
7.778.  Panama argues that none of the measures 2, 3 and 4 is applied in accordance with the 
chapeau of Article XIV of the GATS. Accordin g to Panama, each of these three measures 
constitutes a means of arbitrary and unjustifiab le discrimination between countries in similar 
situations for the purposes of tax transparency and exchange of information. Panama contends 
that Argentina's distinctions based on the list of countries cooperating for purposes of tax 
transparency and exchange of information do not reflect impartial and neutral treatment of countries in similar situations in this context. Panama also claims that these measures are a disguised restriction on trade in the relevant services from non-cooperative countries between 
unrelated persons.
950 
7.3.6.2  Assessment by the Panel 7.779.  In this dispute, Argentina invokes Article XIV(d) of the GATS as an alternative to its 
principal defence presented under Article XIV(c) of the GATS in respect of Panama's claims under 
Article XVII in relation to measures 2, 3 and 4. 
7.780.  Given that we have found that measure 2 (presumption of unjustified increase in wealth), 
measure 3 (transaction valuation based on transfer  prices), and measure 4 (payment received rule 
for the allocation of expenditure) are not inconsis tent with Article XVII of the GATS inasmuch as 
they accord to services and service suppliers from non-cooperative countries treatment no less favourable than that accorded to Argentine like se rvices and like service suppliers, for the relevant 
services and modes on which Argentina made specific commitments, the Panel refrains from ruling 
on whether these measures are covered by the exception provided for in Article XIV(d) of the GATS. 
7.3.7  Argentina’s defence under paragraph 2(a) of the Annex on Financial Services 
("prudential exception") 
7.3.7.1  Main arguments of the parties 
7.3.7.1.1  Argentina 
7.781.  Argentina  claims that  in the event that  the Panel were to find measure 5 to be inconsistent 
with Articles II:1, XVI:1 and XVI:2(a) of the GATS and measure 6 to be inconsistent with Article II:1 of the GATS, its measures would be covered by paragraph 2(a) of the GATS Annex on 
Financial Services (the prudential exception).
951 
7.782.  With regard to the scope of the prudential ex ception, Argentina argues that paragraph 2(a) 
provides an exception for GATS-inconsistent measures that are taken for prudential or 
precautionary purposes.952 Argentina does not agree with Panama’s argument that the prudential 
exception only applies to "domestic regulation" measures taken under Article VI of the GATS. Argentina sees no textual basis for such a narrow interpretation and, on the contrary, considers 
that Panama’s position is in direct contradiction with the text of paragraph 2(a) of the Annex on 
Financial Services.
953 Furthermore, Argentina considers that the words "[n]otwithstanding any 
other provisions of the Agreement" clearly indicate  that paragraph 2(a) relates to any violation of 
the GATS, provided that it affects trade in services. Argentina considers this to be confirmed by 
the context of the second sentence of paragraph 2(a), which states that "[w]here such measures 
do not conform with the provisions of the Agreement", thereby indicating that the first sentence applies to measures which are otherwise inconsistent with some provision of the GATS. In 
                                               
949 Panama's second written submission, paras. 2.363, 2.471-2.472 and 2.571-2.572. 
950 Panama's second written submission, paras. 2.364-2.365, 2.474-2.475 and 2.573. With regard to 
the application of the chapeau of Article XIV to measures  2, 3 and 4, Panama also refers to the arguments it 
presented in relation to Argentina's defence under Article XIV(c). See paras. 7.560-7.565 above. 
951 Argentina’s first written submission, para. 551. See also Argentina’s response to Panel question 
No. 85(a). 
952 Argentina’s first written submission, para. 553. 
953 Argentina’s second written submission, para. 80. WT/DS453/R 
 
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  addition, Argentina considers that the reference to "[n]othing in the Agreement" in paragraph 2(b) 
of the Annex on Financial Services indicates that the prudential exception is broad in its scope and applies to violations of any of the provisions of the GATS.
954 
7.783.  With respect to the legal standard to be adopted under the prudential exception, Argentina 
argues that, in assessing its defence, the Panel should proceed in "three successive steps", 
namely:955 (i) establish whether the measure in question is a measure "affecting the supply of 
financial services" within the meaning of paragraph 1(a) of the GATS Annex on Financial Services; 
(ii) determine whether the measure has been taken "for prudential reasons" – Argentina considers 
that "this question requires the existence of a 'rational relationship' between the measure and its 
prudential objective"956; and (iii) determine whether the measure is being "used as a means of 
avoiding the Member’s commitments or obligations under the Agreement". With regard to this 
latter aspect of the proposed legal standard, Argentina asserts that the second sentence of the 
prudential exception performs the same function as the preamble to Article XIV of the GATS, i.e. to prevent abuse in the use of the exception.
957 Argentina explains that the second sentence of the 
prudential exception requires that WTO-inconsistent measures taken for prudential reasons not be, 
in actual fact, measures whose objective is to avoid the disciplines of the GATS.958 According to 
Argentina, this provision is aimed at determining whether the measure is genuinely being applied 
in a manner consistent with its prudential objective and not for the purpose of avoiding a 
Member’s commitments or obligations under the GATS.959 
7.784.  With respect to the first element of the proposed legal standard, Argentina recognizes that 
the measures in question are undoubtedly measures "affecting the supply of financial services" 
within the meaning of paragraph 1(a) of the Annex on Financial Services. In fact, both 
"reinsurance and retrocession services" and trading "transferable securities" are specifically mentioned in the definitions of financial services in paragraph 5(a) of the Annex on Financial 
Services.
960  
7.785.  With respect to the second element of the proposed legal standard, Argentina believes that 
a "prudential" measure, or one taken "for prudenti al reasons" within the meaning of the prudential 
exception, is a measure intended to prevent an outcome running counter to an objective 
previously established or envisaged by the corre sponding authority which could have adverse or 
pernicious consequences for the rights protected by that authority.961 According to Argentina, the 
first sentence of paragraph 2(a) of the Annex on Financial Services establishes a non-exhaustive 
list of measures that could serve prudential purposes; it does not contain a priori  any limitation on 
the kinds of measures that a WTO Member can adopt for prudential reasons. The scope of the GATS-inconsistent measures that could potentially  be subject to the prudential exception is 
therefore very broad.
962 For Argentina, it includes, at the very least, measures that protect the 
interests of consumers or the general public with respect to the provision of financial services, as well as measures that seek to ensure the integrity and stability of the financial system, such as 
measures aimed at preventing a run on the banks or the systemic failure of the financial 
institutions or at protecting the financial system against moral hazard.
963 According to Argentina, 
the two measures in question are preventive meas ures that seek to protect the insured and the 
consumers of financial services from risks that could undermine public confidence and affect the 
functioning of Argentina’s financial markets.964  
7.786.  For Argentina, another central feature of a prudential measure is its fitness for the purpose 
of preventing the event, or the effects resultin g therefrom, which the measure is intended to 
avoid. In this respect, measure 5 is directly and specifically related with the need to preserve, as 
fittingly as possible, the soundness of the Argentine financial system.965 For Argentina, in both 
                                               
954 Argentina’s second written submission, para. 81. 
955 Argentina’s second written submission, para. 79. 
956 Argentina’s second written submission, para. 79. 
957 Argentina’s first written submission, para. 556. 
958 Argentina’s first written submission, para. 556. 
959 Argentina’s second written submission, para. 79. 
960 Argentina’s second written submission, para. 85. 
961 Argentina’s first written submission, para. 560. 
962 Argentina’s first written submission, para. 554. 
963 Argentina’s first written submission, para. 555. 
964 Argentina’s second written submission, para. 86. 
965 Argentina’s second written submission, para. 89. WT/DS453/R 
 
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  cases, there is a rational relationship between the measure and its prudential objective, since both 
measures ensure the achievement of precautionary or prudential objectives established in relation to their respective sectors – reinsurance and the capital market.
966 Where measure 5 is concerned, 
Argentina points out that the recitals of SSN Resolution No. 35.615/2011 refer to the need to 
upgrade the control mechanisms designed to en sure the necessary solvency of insurers and 
reinsurers operating within the national territory and, moreover, the fairness and technical reasonableness of the respective contract conditions. The regulations establish additional 
requirements which compensate for the lack of direct and effective access to information.
967  
7.787.  Argentina considers that measure 5, for example, would normally be targeted at the 
reinsurance market to preserve the intrinsic nature of the insurance contract, which is based on a relationship of trust and good fait h between the insurer and the insured.
968 According to Argentina, 
in the event of the insolvency or failure of a foreign reinsurer, the policy holder in Argentina would 
be unable to collect its claim against that reinsurer, and the original insurer in Argentina would continue to be responsible for paying out claims made under the original insurance contract. 
Therefore, the collapse of the foreign reinsurer implies an additional burden on the financial 
capacity of the original insurer, which in its turn could lead to the failure of the original insurer and thus produce a "domino effect" in the Argentine insurance market.
969 Argentina argues that if the 
reinsurer is located in a non-cooperative jurisdiction, the Argentine authorities will not have access 
to information on, among other things, the effective ownership of the reinsurer, whether it is adequately capitalized, whether its sources of fund s are legitimate, or whether there is any risk of 
the transaction being used to launder money. Accordingly, transactions of this type expose the 
insurance markets in Argentina to greater systemic risk.
970 Argentina maintains that, for this 
reason, in imposing measures of a prudential nature that regulate the activity and certain aspects related to its inherent risks, the Argentine authority – SSN – has not only to protect the fiduciary 
relationship between the reinsurance company and the policy holders but also to preserve the 
soundness of the system, so as to ensure appropriate conditions for safeguarding insurance contracts and the fiduciary relationship be tween the companies and the policy holders. 
7.788.  In relation to measure 5, Argentina also invokes the prudential exception with respect to 
Panama’s claim under Article XVI of the GATS. Argentina considers that the requirement for insurers to pass on certain additional information to the SSN in order to be authorized to effect reinsurance operations with foreign reinsurance en tities, from their country of origin, where these 
operations correspond to individual risks amounting to less than US$50,000,000, establishes a 
reasonable threshold that contributes to the prud ential objective of strengthening the reinsurers 
operating within the national territory, by generating an active, sound and competitive domestic 
sector capable of confronting systemic risks and en suring the necessary solvency of the reinsurers 
developing there.
971 Argentina points out that measure 5 is a measure taken for the prudential 
reasons mentioned in paragraph 2(a) of the Annex on Financial Services, namely: (i) to ensure the 
integrity and stability of the financial system; (ii) the protection of policy holders or persons to 
whom a fiduciary duty is owed by a financial serv ice supplier; and (iii) the protection of investors 
and depositors.972 According to Argentina, a crisis in the insurance and reinsurance sector 
involving a loss of insurance or reinsurance capacity could quickly erupt and damage financial 
stability and the real economy.973 
7.789.  Where measure 6 is concerned, Argentina argues that the objective is "the protection of 
investors … [and] the integrity and smooth functioning of the Argentine capital market".974 
Argentina considers that it is essential for the smooth functioning of financial markets to safeguard 
the financial health of the securities intermediaries and protect investors from systemic failures involving financial intermediaries.
975 According to Argentina, securities operations with non-
cooperative jurisdictions expose the Argentine financ ial market to greater risk of systemic failure, 
since in transactions of this type the Argentine regulator is unable to obtain access to information 
                                               
966 Argentina’s first written submission, para. 567. 
967 Argentina’s first written submission, para. 568. 
968 Argentina’s first written submission, para. 561. 
969 Argentina’s second written submission, para. 87. 
970 Argentina’s second written submission, para. 88. 
971 Argentina’s response to Panel question No. 85(a). 
972 Argentina’s response to Panel question No. 85(a). 
973 Argentina’s response to Panel question No. 85(a). 
974 Argentina’s first written submission, para. 562. 
975 Argentina’s second written submission, para. 91. WT/DS453/R 
 
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  concerning the effective ownership of the party ordering the transaction and the legitimacy of the 
source of its funds, nor is it able to establish whether the foreign entity is subject to adequate supervision in its home jurisdiction. Argentina therefore maintains that securities transactions with entities located in non-cooperative jurisdictions pose risks that may not be present in transactions 
with entities located in cooperative jurisdictions, including risks of money laundering, tax evasion 
and non-payment of securities transactions.
976 
7.790.  Argentina does not agree with Panama’s interpretation that the Spanish term " cautelar " 
suggests the need to prove the existence of a "danger in delay" ( periculum in mora ). According to 
Argentina, the analogy with the requirements for the granting of precautionary measures by the 
domestic courts is inappropriate and neither does it follow from the text of the exception. In confirmation of this, Argentina makes reference to the equivalents of the Spanish term " cautelar " 
in English ( prudential ) and in French ( prudentielle ). Argentina considers that the ordinary meaning 
of the term " cautelar " suggests that the measures adopted under paragraph 2(a) of the Annex on 
Financial Services are preventive in nature and that nothing in the ordinary meaning of the word 
"cautelar " suggests that the risks which justify the adoption of the measure have to be imminent 
or might arise in the near future. On the contrary, as the financial crisis of 2008 showed, risks to the "integrity and stability of the financial system" are typically latent and extremely difficult to 
identify beforehand, making it practically impossible to deal with those risks by taking corrective 
measures. This is precisely why paragraph 2(a) of the Annex on Financial Services authorizes WTO Members to take measures for prudential reasons to deal with risks of a systemic nature ex 
ante.
977 
7.791.  With regard to the third element of the propos ed legal standard, Argentina argues that its 
reinsurance and securities regulations are not used as a means of avoiding its commitments or obligations under the GATS. These measures are aimed at countering systemic risks which only 
arise in connection with transactions involving entities located in non-cooperative jurisdictions and 
are not applied if there are no such risks. In both cases, the "access to information allows the 
regulatory authority to exercise effective supervision and control in order to prevent the capital 
market from becoming a vehicle for money laundering, tax evasion, market manipulation and 
abuse and other harmful practices and thus ensure the integrity of the financial system by reducing the systemic risk."
978 For example, securities transactions ordered or effected from non-
cooperative jurisdictions can be processed provided it can be shown that (i) the intermediary is 
subject to appropriate regulatory supervision within  the jurisdiction of origin, and that (ii) that 
body has concluded an information exchange agreement with the CNV.979 
7.792.  Finally, in relation to measure 5, Argentina stresses the proportionality of the measure 
with respect to the objective pursued.980 In this connection, Argentina points out that in the 
recitals of SSN Resolution No. 35.615/2011 themselves it is expressly stated "[t]hat, on the basis of the experience accumulated, it has been fo und necessary to upgrade the control mechanisms 
designed to ensure the necessary solvency of insu rers and reinsurers operating within the national 
territory and, moreover, the fairness and technical reasonableness of the respective contract conditions". Argentina argues that, as explained in the relevant section, the regulations establish additional requirements that compensate for the lack of direct and effective access to 
information.
981 
7.3.7.1.2  Panama 7.793.  Panama questions whether measures 5 an d 6 are covered by the prudential exception, 
arguing that Argentina has failed to establish that the two measures are justified under that 
provision.
982 Panama considers that paragraph 2(a) of the Annex on Financial Services "is in the 
nature of an exception", as is clear from its initial sentence "[n]otwithstanding any other provisions 
of the Agreement".983 Panama therefore considers that any WTO Member that seeks to justify the 
inconsistency of a measure under the prudential  exception bears the bu rden of proof and will 
                                               
976 Argentina’s second written submission, para. 92. 
977 Argentina’s second written submission, para. 82. 
978 Argentina’s first written submission, para. 567. 
979 Argentina’s second written submission, para. 94. 
980 Argentina’s first written submission, para. 568. 
981 Argentina’s first written submission, para. 568. 
982 Panama’s second written submission, paras. 2.685-2.686 and 2.722. 
983 Panama’s second written submission, para. 2.636. WT/DS453/R 
 
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  therefore have to show that the measure m eets all the requirements of that provision.984 Panama 
argues that Argentina has failed to discharge its burden of proof under the prudential exception, has proposed a legal standard that omits relevant aspects and, in general, has disregarded the customary rules of interpretation of public international law.
985  
7.794.  With regard to the legal standard to be adopted under the prudential exception, Panama 
suggests that the following four elements need to be verified: (i) that the measure affects the supply of financial services; (ii) that the measure constitutes a "domestic regulation" and is 
covered by the prudential exception; (iii) that the measure has been adopted for "prudential 
reasons"; and (iv) that the measure in question is not being used as a means of avoiding commitments or obligations under the GATS.
986  
7.795.  Where the first element of the proposed legal standard is concerned, Panama considers 
that the respondent bears the burden of proving th at the measure it seeks to justify is covered by 
the Annex on Financial Services. It is therefore for the respondent to prove the Annex’s applicability in the light of the definitions established therein.
987  
7.796.  With regard to the second element of the legal standard, Panama considers that the 
respondent must prove that the measure in question qualifies as a "domestic regulation".988 
Panama considers that the heading "Domestic Regulation" of paragraph 2 of the Annex on 
Financial Services informs the interpretation of the prudential exception and confines it to the type 
of measures envisaged in Article VI of the GATS, which is also entitled "Domestic Regulation".989 
For Panama, Article VI of the GATS relates to domestic regulations such as the rules and procedures concerning qualifications, licences and technical standards.
990 Panama considers that it 
must be shown that the measure concerns a supplier’s technical standard, qualification or licence, 
of the kind related, for example, to the quality of  the service provided or the ability of the supplier 
to provide the service.991 Panama argues that an objective in terpretation of the GATS cannot give 
a divergent meaning to two provisions that exp licitly cover the same subject, unless the terms 
used are expressly intended to have a different meaning.992 According to Panama, a measure that 
does not qualify as a domestic regulation might be covered by other exceptions993, but would 
never fall within the scope of the prudential exception.994  
7.797.  With respect to the third element of the legal standard, Panama considers that the 
respondent has to show that the measure satisfies the requirements of the first sentence of the prudential exception, that is, that the domest ic regulation measure has been adopted "for 
prudential reasons".
995 Panama points out that the prudential exception mentions two "prudential 
reasons": (i) "the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier"; and (ii) "to ensure the integrity and stability of the 
financial system". Panama recognizes that although the list of reasons is not exhaustive, whatever 
the reason for its adoption the measure must, in any event, be precautionary or "prudential".
996  
7.798.  In analysing what constitutes a " motivo cautelar " (prudential reason), Panama points out 
that the ordinary meaning of the Spanish word " motivo " is "causa o razón que mueve para algo "997 
(moving cause or reason for something), while the word " cautelar " means " preventivo, 
precautorio ", "dicho de una medida o de una regla destinada a  prevenir la consecución de 
                                               
984 Panama’s second written submission paras. 2.633, 2.636, 2.637 and 2.708. 
985 Panama’s second written submission, para. 2.633. 
986 Panama’s second written submission, para. 2.637. 
987 Panama’s second written submission, para. 2.638. 
988 Panama’s second written submission, para. 2.651. 
989 Panama’s second written submission, para. 2.643. 
990 Panama’s second written submission, para. 2.645. 
991 Panama’s second written submission, para. 2.651. (footnote original) Panel Report, US – Gambling , 
para. 6.304. 
992 Panama’s second written submission, para. 2.643. 
993 Panama’s second written submission, para. 2.651. In  this paragraph Panama mentions Article XIV of 
the GATS, by way of example. 
994 Panama’s second written submission, para. 2.651. 
995 Panama’s second written submission, para. 2.652. 
996 Panama’s second written submission, para. 2.652. 
997 Panama’s second written submission, para. 2.653. (footnote original) Diccionario de la lengua 
española , Real Academia Española, 22nd edition, 2001, p. 1545.  WT/DS453/R 
 
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  determinado fin o precaver lo que pueda dificultarlo "998 (preventive, precautionary, said of a 
measure or rule intended to prevent a particular outcome or guard against that which might impede it). In its turn, the ordinary meaning of the Spanish verb " precaver " is "prevenir un riesgo, 
daño o peligro, para guardarse de él y evitarlo " (to forestall a risk, injury or danger, to protect 
oneself from it and avoid it).
999 Panama considers that it follows from these definitions that 
measures which are " cautelares " or taken " por motivos cautelares "1000 "are those adopted for a 
specific 'cause or reason', namely, 'to forestall a risk, injury or danger' that might materialize, in 
order thus to avoid it and safeguard legitimate interests".1001 Panama proposes that the term 
"medidas cautelares " (prudential measures) should be equated with " medidas provisionales " 
(provisional measures) because "within the context of public international law, Spanish-speaking jurists appear to use ' medidas provisionales ' as a synonym of, and interchangeably with, ' medidas 
cautelares '".
1002 Panama also makes reference to the French term " mesures conservatoires " 
(protective measures).1003 In addition, Panama bases itself on Article [41.1] of the Statute of the 
International Court of Justice (ICJ), which empowers the Court to indicate "any provisional 
measures which ought to be taken to preserve the respective rights of either party".1004 Panama 
considers that this article allows the Court to indicate "[ prudential ] measures only when [] 
considers that circumstances so require".1005 Panama points out that the ICJ believes that "one of 
the distinctive characteristics of these measures is their objective of preserving or protecting  the 
rights or legal interests at risk".1006  
7.799.  As previously mentioned, Panama argues that jurists specializing in different areas of the 
law agree that it would be right to adopt prudential measures if at least two requirements that 
follow from their legal nature are met: fumus boni iuris  and periculum in mora . The first 
requirement (likelihood of success on the merit of the case) calls for the claim to have a certain degree of plausibility, the actual existence of a ri sk and the possibility of its materialization. The 
second requirement (danger in delay) is related to the risk of an imminent legal injury being 
suffered as a consequence of a delay in the adoption of the measure. It is precisely the risk of imminent injury that generally lends prudential measures their urgent character.
1007 Furthermore, 
Panama considers that, since the existence of an imminent danger does not correspond to a 
permanent or structural situation, prudential measures are transitional, provisional or short-term 
                                               
998 Panama’s second written submission, para. 2.653. (footnote original) Diccionario de la lengua 
española , Real Academia Española, 22nd edition, 2001, p. 484.  
999 Panama’s second written submission, para. 2.653. (footnote original) Diccionario de la lengua 
española , Real Academia Española, 22nd edition, 2001, p. 1817.  
1000 Panama’s second written submission, para. 2.653. (footnote original) Like Argentina, Panama 
believes that "prudent ial" measures and measures taken for "prude ntial reasons" mean the same thing. (See 
Argentina’s first written submission, para. 560). In this connection, Panama observes that paragraphs 3 and 4 
of the Annex on Financial Services refer to "prudential measures" and "prudential issues", respectively, which would appear to confirm that the key word for the purpos es of the Annex on Financial Services is "prudential" 
rather than "reasons", "measures" or "issues".  
1001 Panama’s second written submission, para. 2.653. 
1002 Panama’s second written submission, para. 2.654. (footnote original) According to some authors, 
"[W]e say prudential measure , because we are not satisfied with the distinction made by the internationalists 
between prudential measures and provisional, interim or emergency measures, all of the latter being characteristic of the former" (Augusto  Mario Morello and Enrique Véscovi, " La eficacia de la justicia. Valor 
supremo del procedimiento, en  el área de la cautela ", Revista Uruguaya de Derecho Procesal, No. 4, 1984, 
p. 543.) See also Soledad Torrecuadrada García-Lozano, " La indicación de medidas cautelares por la Corte 
Internacional de Justicia: El asunto Breard (Paraguay contra Estados Unidos de América) ", Agenda 
Internacional, Instituto de Estudios Internacionales, p. 113. 
1003 Panama’s second written submission, para. 2.654. 
1004 Panama’s second written submission, para. 2.654. (emphasis original). 
1005 Panama’s second written submission, para. 2.654.  (emphasis original) (footnote original) Augusto 
Mario Morello and Enrique Véscovi, " La eficacia de la justicia. Valor supremo del procedimiento, en el área de la 
cautela ", Revista Uruguaya de Derecho Procesal, No. 4, 19 84, p. 165 (citing and translating into Spanish the 
Order of the ICJ of 10 May 1984, case of Nicaragua v. Un ited States of America (Req uest for the indication of 
provisional measures of 9 April 1984)). 
1006 Panama’s second written submission, para. 2.654. (emphasis original) (footnote original) 
Interhandel case, Order of 24 October 1957 in ICJ Reports  1957, pp. 110-112; and Passage through the Great 
Belt case (Finland v. Denmark), Order of 29 July 1991, in ICJ Reports  1991, p. 17.  
1007 Panama’s second written submission, para. 2.655. (footnote original) See, for example, Andrés 
Nogueira Muñoz, " Dos tipos de medidas provisionales en la juri sprudencia de la Corte Interamericana de 
Derechos Humanos ", Revista Derechos Humanos (2011), p. 3; Jake W Rylatt, " Provisional Measures and the 
Authority of the International Court of  Justice: Sovereignty vs. Efficiency ", Leeds Journal of Law & Criminology, 
Vol. 1 No. 1, p. 66; or Gabriel Hernández Villarreal, " Medidas cautelares en los procesos arbitrales, 
¿Taxatividad o enunciac ión de las cautelas? ", ISSN 0124-0579 (2007), pp. 189-190.  WT/DS453/R 
 
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  in nature. Thus, prudential measures can remain in place only for as long as the factual 
circumstances that justified their adoption continue to exist.1008 
7.800.  With respect to the two prudential reasons envisaged in the first sentence of the prudential 
exception, Panama considers that the first part, referring to the "protection of investors, 
depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service 
supplier" covers the protection of financial services consumers in general. Here, Panama makes a connection with the panel report in EC – Asbestos , where it is stated that "the notion of 'protection' 
[implies] the existence of a risk".
1009 For Panama this "fits in perfectly with the requirement of 
periculum in mora  for the adoption of prudential measures", because "for prudential measures to 
be adopted for the protection of financial services  consumers there must be a 'risk' of the supplier 
failing to fulfil its fiduciary duty and causing pecuniary injury to the consumer".1010  
7.801.  With regard to the second prudential reason, which consists in "ensur[ing] the integrity 
and stability of the financial system", Panama considers that this objective would cover measures aimed at preventing the imminent disintegration and destabilization of the financial system.
1011 
Panama maintains that this prudential reason cannot justify any type of measure relating to 
financial services which, in one way or another, has some relationship with the financial system. On the contrary, it ought to cover only measures directed at avoiding serious and systemic "risks" 
that might lead to a crisis affecting the structures of the financial system and a disruption in the 
smooth functioning of the economy.
1012 As was mentioned earlier, Panama recognizes that the list 
of prudential reasons in the prudential exception is non-exhaustive. In any event, the reasons for the measure should always be "prudential".
1013 Panama stresses that the prudential nature of the 
measure taken by the respondent, namely, that of prevention of a genuine risk that demands an 
urgent response, is the element that should be the "subject of closest scrutiny" by a panel. 
Panama considers that a panel cannot accept any re ason offered by the respondent without further 
examination. Panama observes that neither the GATS nor the Annex on Financial Services provides 
for special standards of review distinct from those laid down in Article 11 of the DSU. 
7.802.  Panama concludes its analysis of this el ement by pointing out that when a panel assesses 
whether the measure adopted by a Member is "for  prudential reasons" within the meaning of 
paragraph 2(a) of the Annex on Financial Services, it should examine whether there is a real risk of imminent injury if that measure is not adopted or if its adoption is delayed. Thus, for example, in the case of measures to protect consumers, ther e must be a risk of the financial service supplier 
failing to fulfil its obligations and causing pecuniary injury to the consumer. At the same time, in 
the case of measures to ensure the integrity and stability of the financial system, there must be a risk of financial instability that threatens the foundations of the financial system.
1014 
7.803.  With respect to the fourth element of the proposed legal standard, Panama argues that the 
purpose of the second sentence of paragraph 2(a) of the Annex on Financial Services is to limit the possibility of measures being freely taken for allegedly prudential reasons.
1015 For this condition to 
be satisfied, Panama considers that there must be a relationship of means and ends between the 
measure taken and the prudential objective pursued.1016 Panama agrees with Argentina that the 
academic literature has described the second senten ce of the prudential exception as equivalent to 
                                               
1008 Panama’s second written submission, para. 2.656. See also second written submission, para. 2.655. 
In making these arguments, Panama bases itself on Ar ticles 74.1, 74.2 and 76.1 of the ICJ Rules of Court. 
1009 Panama’s second written submission, para. 2.658 (citing Panel Report, EC – Asbestos , para. 8.170 
(emphasis original)).  
1010 Panama’s second written submission, para. 2.658. 
1011 Panama’s second written submission, para. 2.659. 
1012 Panama’s second written submission, para. 2.659. 
1013 Panama’s second written submission, para. 2.660.  Notwithstanding the above, in paragraph 2.654 
of its second written submission, Panama acknowledges that the prudential exception, in its English version, "refers to measures taken for prudential reasons. The ordinary meaning of  the word 'prudential' is '[p]ertaining 
or relating to prudence', '[w]hat is not exaggerated or  excessive'. Therefore, within the context of the GATS, 
'prudential measures' ( medidas cautelares ) have a certain connotation of prudence". See Panama’s second 
written submission, para. 2.654. 
1014 Panama’s second written submission, para. 2.661. 
1015 Panama’s second written submission, para. 2.662. 
1016 Panama’s second written submission, para. 2.708. WT/DS453/R 
 
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  a good faith obligation that requires a rational relationship of means and ends between the 
measure taken and the prudential objective pursued.1017  
7.804.   Panama argues that a prohibited or improper use is an abuse. Therefore, the prohibition 
on using prudential measures as a means of avoiding commitments and obligations is intended to 
prevent abuses. Moreover, it ensures that the righ t of Members to avail themselves of exceptions 
is exercised reasonably or prudently and in such a way as not to frustrate the rights accorded to other Members by the substantive rules of the GATS.
1018  
7.805.  Panama considers that in analysing compliance with the last part of the prudential 
exception a panel should examine whether the desi gn, structure and architecture of the measure 
(or its application in practice) correspond with the prudential reasons on which it is allegedly based. In other words, it should examine whether there is a genuine relationship of means and 
ends between the measure and its stated objectives.
1019 In this connection, Panama considers that 
if a measure is not suitable, fit or appropriate for achieving its presumed prudential objective, then 
it should be understood that its utilization is inconsistent (wholly or in part) with the objective 
pursued. In these circumstances, the use of a measure that does not match the purported 
prudential reason will not be underpinned by a pr udential reason. In the absence of a supporting 
prudential reason, such use (or part thereof) should  be treated as what it is: a means of avoiding 
commitments or obligations, and therefore prohibited under the second sentence of 
paragraph 2(a) of the Annex on Financial Services.1020  
7.806.  Panama considers that the analysis of this element should be based on an objective 
assessment.1021 In this connection, Panama makes various references to the Appellate Body 
Report in Japan – Alcoholic Beverages II and points out that in previous cases it has repeatedly 
been concluded that "[t]his is not an issue of intent"1022 and that the objective of a measure can 
most often "be discerned from the design, the ar chitecture, and the revealing structure" of the 
measure.1023  
7.807.  By way of example, Panama notes that "if a measure is not designed to protect financial 
services consumers and its application does not help to achieve that objective, it must be 
concluded that the relationship between means and ends required by the second sentence of 
paragraph 2(a) of the Annex on Financial Services does not exist".1024 Panama concludes that 
"consequently, it will be understood that the measure is being used as a means of avoiding 
commitments or obligations under the GATS and it will not be justified by the prudential 
exception".1025 
7.3.7.2  Assessment by the Panel 7.3.7.2.1  Introduction 
7.808.  The question submitted for consideration by the Panel is whether measure 5 (requirements 
relating to reinsurance services) and measure 6 (requirements for access to the Argentine capital market) are covered by paragraph 2(a) of the GATS Annex on Financial Services, as Argentina 
maintains.
1026 In response, Panama considers that Argentina has failed to prove that the two 
measures are covered by that provision.1027  
                                               
1017 Panama’s second written submission, para. 2.665. 
1018 Panama’s second written submission, para. 2.663 (referring to Appellate Body Report, US – 
Gambling , para. 339).  
1019 Panama’s second written submission, para. 2.664. 
1020 Panama’s second written submission, para. 2.665. 
1021 Panama’s second written submission, para. 2.666. 
1022 Panama’s second written submission, para. 2.666 (citing Appellate Body Report, Japan – Alcoholic 
Beverages II , p. 27). 
1023 Panama’s second written submission, para. 2.666 (citing Appellate Body Report, Japan – Alcoholic 
Beverages II , p. 29). 
1024 Panama’s second written submission, para. 2.666. 
1025 Panama’s second written submission, para. 2.666. 
1026 Argentina’s first written submission, para. 551. 
1027 Panama’s second written submission, paras. 2.685-2.686 and 2.722. WT/DS453/R 
 
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  7.809.  It should be stressed that this is the first time that a Member has invoked paragraph 2(a) 
of the Annex on Financial Services (i.e. the pr udential exception) in a WTO dispute. We will 
commence our analysis by establishing the legal standard which we consider appropriate under the prudential exception, before using it to determine whether measures 5
1028 and 6 are covered by 
paragraph 2(a) of the GATS Annex on Financial Services.  
7.810.  The starting point for our analysis is the wording of paragraph 2(a) of the Annex on 
Financial Services.  
7.3.7.2.2  The relevant legal provision 
7.811.  Paragraph 2(a) of the Annex on Financial Services reads as follows: 
2. Domestic Regulation (a) Notwithstanding any other provisions of the Agreement, a Member shall not be 
prevented from taking measures for prudential reasons, including for the protection of 
investors, depositors, policy holders or person s to whom a fiduciary duty is owed by a 
financial service supplier, or to ensure the integrity and stability of the financial 
system. Where such measures do not confor m with the provisions of the Agreement, 
they shall not be used as a means of avoiding the Member's commitments or obligations under the Agreement.  
7.812.  As pointed out in the introduction, this pr ovision has not been the subject of interpretation 
by the Appellate Body or previous panels. It theref ore falls to us to undertake the arduous task of 
interpreting it for the first time. Before proceeding to establish the legal standard which we consider appropriate under this provision, we deem it relevant to determine the nature of the 
provision with a view to ascertaining which party bears the burden of proof.  
7.3.7.2.3  The nature of paragraph 2(a) of the Annex on Financial Services. The burden 
of proof 
7.813.  As far as the nature of paragraph 2(a) of the Annex on Financial Services is concerned, 
both parties appear to regard this provision as an "exception".
1029  
7.814.  If we look at the Spanish text of paragraph 2(a) of the Annex on Financial Services, we see 
that it begins: "[ n]o obstante las demás disposiciones del [AGCS ]". Moreover, the first part of the 
second sentence of the paragraph states: "[ c]uando esas medidas no sean conformes a las 
disposiciones del Acuerdo ". In view of this wording, we agree with the parties that paragraph 2(a) 
constitutes a justification for measures that are inconsistent with the GATS and is therefore in the 
nature of an "exception". The English1030 and French1031 versions of the provision confirm our view.  
7.815.  Our conclusion is consistent with the categorization of this provision in the revised version 
of the Guidelines for the Scheduling of Specif ic Commitments under the General Agreement on 
Trade in Services (GATS), adopted by the Council for Trade in Services on 23 March 2001. In that 
                                               
1028 The Panel recalls that, in the case of measure 5, it has found that the aspects of this measure 
maintained by virtue of point 19 of Annex I to SSN Resolution No. 35.615/2011 and Article 4 of SSN Resolution No. 35.794/2011 are not inconsistent with Articles XVI:1 and XVI:2(a) of the GATS. Accordingly, it will not examine these aspects of measure 5 in the light of para graph 2(a) of the Annex on Financial Services. It will 
focus exclusively on the aspects of measure 5 maintained  by virtue of points 18 and 20(f) of Annex I to SSN 
Resolution No. 35.615/2011 (as amended by SSN Resolution No. 38.284/2014), which it has found to be inconsistent with Article II:1 of the GATS. See sections 7.3.3.2.3.2, 7.3.3.2.4.2 and 7.3.2.2.4 above. 
1029 Argentina’s first written submission, para. 553, and Panama’s second written submission, 
para. 2.636. We note that this also appears to be the opinion of several third parties. See European Union’s 
third-party submission, para. 128; United States’ third-party submission, para. 21; and United States’ and Brazil’s responses to Panel question No. 13. 
1030 In the English version, the first and second sent ences of paragraph 2(a) of the Annex on Financial 
Services begin as follows: " Notwithstanding any other provisions of the Agreement " … "[w]here such measures 
do not conform with the provisions of the Agreement ". 
1031 In the French version the first and second sentences of paragraph 2(a) of the Annex on Financial 
Services begin as follows: " Nonobstant toute autre disposition de l'Accord " … "[d]ans les cas où de telles 
mesures ne seront pas conformes aux dispositions de l'Accord ". WT/DS453/R 
 
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  document, in a section describing the "Exceptions" under the GATS, it is explained that "any 
prudential measure taken in accordance with paragraph 2(a) of the Annex on Financial Services constitutes an exception to the Agreement".
1032 This is the same language as that used in a 
previous Explanatory Note by the Secretariat entitled "Scheduling of Initial Commitments in Trade 
in Services" in which, in the course of explaining what should be recorded in a Schedule of Specific 
Commitments under the GATS, it is stated that "any prudential measure justifiable under paragraph 2.1 of the Annex on Financial Services constitutes an exception to the Agreement".
1033  
7.816.  Given that paragraph 2(a) of the Annex on Financial Services is in the nature of an 
exception, the burden of proof lies with Argent ina, which must therefore demonstrate that its 
measures 5 and 6 are covered by that provision.1034  
7.817.  We continue our work of interpretation by  examining what should be the requirements that 
constitute the legal standard under paragraph 2(a) of the Annex on Financial Services and which 
Argentina must demonstrate in order to shield its measures 5 and 6 under that provision.  
7.3.7.2.4  The legal standard under paragrap h 2(a) of the Annex on Financial Services 
7.818.  We note that paragraph 2(a) of the Annex on Financial Services consists of two sentences. 
The first sentence reads:  
Notwithstanding any other provisions of the Agreement, a Member shall not be 
prevented from taking measures for prudential reasons, including for the protection of 
investors, depositors, policy holders or person s to whom a fiduciary duty is owed by a 
financial service supplier, or to ensure the integrity and stability of the financial system.  
7.819.  Thus, the first sentence permits the adoption of measures "for prudential reasons" and 
includes a list of prudential reasons. The use of the term "including" (in Spanish " entre ellos ", in 
French " y compris ") shows that this is an indicative list.  
7.820.  The second sentence of paragraph 2(a) of the Annex on Financial Services stipulates that: 
Where such measures do not conform with th e provisions of the Agreement, they shall 
not be used as a means of avoiding the Member's commitments or obligations under 
the Agreement.  
7.821.  Thus, it can be inferred from the wording of paragraph 2(a) of the Annex on Financial 
Services that Argentina must demonstrate that two requirements have been met in order to avail itself of the exception, namely: (i) that the measure in question was taken for prudential reasons 
and (ii) that the measure is not being used as a means of avoiding its commitments or obligations 
under the GATS. In this connection, we note that both the parties and various third parties agree with this interpretation.
1035 
7.822.  Nevertheless, in addition to these two requirements, both parties and one of the third 
parties identify a preliminary requirement which must be demonstrated by the party invoking paragraph 2(a) of the Annex on Financial Services and which they derive from paragraph 1(a) of 
the Annex on Financial Services. This paragraph states that "[t]his Annex applies to measures 
affecting the supply of financial services". In their view, the party invoking the prudential 
                                               
1032 See the 2001 Guidelines, (Exhibits PAN-45 / ARG-39), para. 20.  
1033 See the 1993 Guidelines, (Exhibits PAN-46 / ARG-79), para. 13. We recall that in US – Gambling  the 
Appellate Body considered that this Explanatory Note constituted a supplementary means of interpretation under Article 32 of the Vienna Conv ention. See Appellate Body Report, US – Gambling , para. 197. 
1034 Appellate Body Report, US – Wool Shirts and Blouses , p. 14. 
1035 Argentina’s second written submission, para. 79; Panama’s second written submission, para. 2.637; 
European Union’s third-party submission, paras. 131 and 133, and response to Panel question No. 13, 
paras. 32 and 33; and United States’ re sponse to Panel question No. 13 (referring to its response to advance 
Panel question No. 7, paras. 12 and 16). WT/DS453/R 
 
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  exception must also demonstrate that the measure in question is a measure "affecting the supply 
of financial services".1036  
7.823.  We turn to consider whether, as the parties maintain, the legal standard established by 
paragraph 2(a) of the Annex on Financial Services requires Argentina to demonstrate that 
measures 5 and 6 are measures affecting the supply of financial services. 
7.824.   We note that paragraph 1(a) of the A nnex on Financial Services  provides as follows: 
ANNEX ON FINANCIAL SERVICES 
1. Scope and Definition 
       (a) This Annex applies to measur es affecting the supply of financial services. 
Reference to the supply of a financial service in this Annex shall mean the supply of a service as defined in paragraph 2 of Article I of the Agreement. 
7.825.  Thus, paragraph 1(a) defines the scope of the Annex on Financial Services as being 
confined to "measures affecting the supply of fi nancial services". In our view, paragraph 1(a) 
serves as context for the interpretation of paragr aph 2(a) of the same Annex. We therefore agree 
with the parties that for Argentina to be able to avail itself of the exception of paragraph 2(a) of 
the Annex on Financial Services, it must, in addition to meeting the other two requirements previously mentioned, demonstrate that measures 5 and 6 are "measures affecting the supply of 
financial services". 
7.826.  In addition to these three requirements, on  the basis of the heading of paragraph 2 of the 
Annex on Financial Services, which reads "Domes tic Regulation", Panama proposes a further 
preliminary requirement, namely, that the respondent must demonstrate that the measure 
constitutes a "domestic regulation".
1037 
7.827.  We next examine whether, as maintained by Panama, the legal standard established by 
paragraph 2(a) of the Annex on Financial Services requires Argentina to demonstrate that 
measures 5 and 6 are "domestic regulations". 
7.828.  Panama considers that "after proving that a measure falls within the scope of the Annex on 
Financial Services, a responding Member must prove that the measure in question qualifies as a 
'domestic regulation'".1038 For these purposes, Panama considers that it must be proven that the 
measure is "a supplier’s technical standard, qualification or licence, such as those 'relating to, for instance, the quality of the service supplied or the ability of the supplier to supply the service'".
1039 
Considering that the paragraph in which the prudenti al exception is established is preceded by the 
heading "Domestic Regulation", Panama refers to the previous rulings of the Appellate Body in 
order to affirm that this heading forms part of the text of the prudential exception and informs the interpretation of the prudential exception by conf ining it to the type of measures envisaged in 
Article VI of the GATS, also entitled "Domestic Regulation".
1040  
7.829.  Panama argues that an objective interpretation of the GATS "cannot give a divergent 
meaning to two provisions that explicitly cove r the same subject, unless the terms used are 
expressly intended to have a different meaning".1041 Moreover, Panama points out that other 
headings of the Annex on Financial Services are also directly correlated with specific articles of the GATS such as, for example, "Scope and Definition " (paragraph 1 of the Annex and Article I of the 
GATS); "Recognition" (paragraph 3 of the An nex and Article VII of  the GATS); "Dispute 
Settlement" (paragraph 4 of the Annex and Articl es XXII and XXIII of the GATS); and "Definitions" 
                                               
1036 Argentina’s second written submission, para. 85; Panama’s second written submission, para. 2.637; 
and European Union’s third-party submission, para. 129. 
1037 Panama’s second written submission, para. 2.651. 
1038 Panama’s second written submission, para. 2.651. 
1039 Panama’s second written submission, para. 2.651 (citing Panel Report, US – Gambling , 
para. 6.304). 
1040 Panama’s second written submission, paras. 2.640, 2.642 and 2.643 (citing Appellate Body Reports, 
China – Raw Materials , para. 320; US – Softwood Lumber IV , para. 93; and US – Carbon Steel , para. 67). 
1041 Panama’s second written submission, para. 2.643. WT/DS453/R 
 
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  (paragraph 5 of the Annex and Article XXVIII of the GATS). Panama therefore argues that "[g]iven 
the limited number of questions covered in the Annex, as compared with those covered by the GATS, it is obvious that the paragraphs of the Annex refer directly and solely to those specific areas of the GATS in which it was considered pertinent to establish additional provisions for 
financial services" and that "all matters on which no specific provision was established in the 
Annex continue to be governed solely by the general provisions of the GATS".
1042 Panama also 
draws attention to a statement by the United States during the Uruguay Round which, according to 
Panama, appears to acknowledge this, but is not in our record.  
7.830.  Argentina sees no textual basis for such a narrow interpretation and considers that 
Panama’s interpretation is in direct contradiction with the text of paragraph 2(a).1043 Argentina 
considers that the words "[n]otwithstanding any other provisions of the Agreement" clearly 
indicate that paragraph 2(a) refers to any violatio n of the GATS, provided that it affects the supply 
of services. Argentina considers that this is confirmed by the context of the second sentence of paragraph 2(a) beginning "[w]here such measures do not conform with the provisions of the 
Agreement", which "clearly indicates that the first sentence applies to measures which are 
otherwise inconsistent with some provision of the GATS". Likewise, Argentina considers that the reference to "[n]othing in the Agreement" in paragraph 2(b) of the Annex "also indicates that the 
prudential exception is broad in its scope and applies to violations of any of the provisions of the 
GATS".
1044 
7.831.  We note that the third parties which provided the Panel with input on this point consider 
that measures of any kind, not only those covered by Article VI of the GATS but also those 
addressed by other provisions of the GATS, ar e covered by paragraph 2(a) of the Annex on 
Financial Services.1045  
7.832.  Our starting point is the text of paragraph 2(a) of the Annex on Financial Services, which is 
reproduced in paragraph 7.811. We note that paragraph 2(a) contains two phrases which we find 
relevant: "[ n]o obstante las demás disposiciones del Acuerdo " ("[n]otwithstanding any other 
provisions of the Agreement") and "[ c]uando esas medidas no sean conformes a las disposiciones 
del Acuerdo " ("[w]here such measures do not conform wi th the provisions of the Agreement"). The 
Panel notes that both phrases refer to "provisions of the Agreement" in the plural and not to a single provision of the GATS. These references to  "other provisions of the Agreement" and "the 
provisions of the Agreement" appear to concern any measure that is inconsistent with the GATS. 
The French text (" Nonobstant toute autre disposition de l'Accord …[d]ans les cas où de telles 
mesures ne seront pas conformes aux dispositions de l'Accord ") seems to confirm this conclusion. 
Indeed, the reference to "any other provisions of the Agreement" (or " toute autre disposition de 
l'Accord "), which could be rendered in Spanish as " cualquier otra disposición del Acuerdo ", appears 
to indicate that the measures covered by paragraph 2(a) of the Annex on Financial Services are those which affect the supply of financial services, whatever their nature.  
7.833.  Likewise, the reference to "[ c]uando esas measures no sean conformes a las disposiciones 
del Acuerdo " ("[w]here such measures do not conform with the provisions of the Agreement"; 
"[d]ans les cas où de telles mesures ne seront pas conformes aux dispositions de l'Accord ") in the 
second sentence of paragraph 2(a) of the Annex on Financial Services appears to relate to 
measures which could be inconsistent with any provision of the GATS. 
7.834.  As we have explained, Panama bases its position on the fact that paragraph 2 of the Annex 
on Financial Services is headed "Domestic Regulation". As Panama also points out, in China – Raw 
Materials  the Appellate Body, citing previous reports, found the title of Article XI of the GATT 1994 
                                               
1042 Panama’s second written submission, para. 2.644. 
1043 Argentina’s second written submission, para. 80. 
1044 Argentina’s second written submission, para. 81. 
1045 According to the European Union, "[p]aragraph  2(a) provides an exception from all the GATS 
obligations" . Brazil points out that paragraph 2(a)  "enshrines a particular justification for GATS-inconsistent 
measures for prudential reasons". For its part, the Un ited States argues that "the prudential exception 
preserves the broad discretion of nati onal authorities to protect the financial system." See European Union’s 
third-party submission; para. 128; Brazil’s third-party submission, para. 18; and United States’ third-party submission, para. 21.  WT/DS453/R 
 
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  to be relevant for the purpose of interpreting its scope.1046 We agree with Panama regarding the 
relevance of the title of a provision for interpreting the terms of that provision. 
7.835.  We note that the GATS does not contain any definition of the expressions "domestic 
regulation" and "regulation". We also note that the expression "domestic regulation" appears as 
the title not only of paragraphs 2(a) and 2(b) of the Annex on Financial Services but also, as 
P a n a m a  p o i n t s  o u t ,  o f  A r t i c l e  V I  o f  t h e  G A T S .  A s  w e  h a v e  a l r e a d y  s e e n ,  P a n a m a  a r g u e s  t h a t  "domestic regulations" are the "type of measures envisaged in Article VI of the GATS". Panama 
also argues that the respondent must prove that the measure "concerns a supplier’s technical 
standard, qualification or licence", such as those "relating to, for instance, the quality of the service supplied or the ability of the supplier to supply the service". In arguing in this way, Panama appears to consider that the "domestic regulati on" to which both Article VI of the GATS and 
paragraph 2 of the Annex on Financial Services  refer includes only measures relating to 
qualifications, technical standards and licensing. 
7.836.  Panama’s arguments confront us with two separate issues: on the one hand, whether the 
reference to "domestic regulation" in the heading of paragraph 2 of the Annex on Financial 
Services has the same significance as the similar reference in the title of Article VI of the GATS; and, on the other, whether the concept of "domesti c regulation", referred to in Article VI of the 
GATS and also - according to Panama – in paragraph 2 of the Annex on Financial Services, covers 
only measures relating to qualifications, technical standards and licensing. We begin with the second issue.  
7.837.  A careful reading of Article VI of the GATS reveals that measures relating to qualifications, 
technical standards and licensing are mentioned only in paragraphs 4 and 5 of Article VI.
1047 
Paragraph 4 of Article VI establishes a negotiating mandate for the development of multilateral disciplines "[w]ith a view to ensuring that measures relating to qualification requirements and 
procedures, technical standards and licensing requirements do not constitute unnecessary barriers 
to trade in services". We note that such disci plines have not yet been agreed by Members. 
Paragraph 5 of Article VI is a transitional provision which stipulates that "[i]n sectors in which a 
Member has undertaken specific commitments, pe nding the entry into force of disciplines 
developed in these sectors pursuant to paragrap h 4, the Member shall not apply licensing and 
qualification requirements and technical standards that nullify or impair such specific commitments …". 
7.838.  The Panel also points out that Article VI refers to other "domestic regulations", such as 
"measures of general application affecting trade in services" (Article VI:1), "administrative decisions affecting trade in services" (Article VI:2 ) and "authorization … for the supply of a service" 
(Article VI:3). In other words, the universe  of "domestic regulation" is, for Article VI of the GATS 
itself, broader than that relating to technical standards, licensing and qualifications. For these reasons, it seems to us that Panama’s characterization of what constitutes a "domestic regulation" 
covered by Article VI of the GATS is erroneous. 
7.839.  Despite what we consider to be Panama’s erroneous characterization of "domestic 
regulation" under Article VI, it remains to be decided whether paragraph 2(a) of the Annex on Financial Services covers only measures that should be regarded as "domestic regulation" within 
the meaning of Article VI of the GATS.  
7.840.  As already mentioned, in our interpretative exercise we must take into account the 
heading of paragraph 2 of the Annex on Financ ial Services in interpreting the terms of 
                                               
1046 The Appellate Body explained:  
In addition, we note that Article XI of th e GATT 1994 is entitled "General Elimination of 
Quantitative  Restrictions". The Panel found that this title suggests that Article XI governs the 
elimination of "quantitative restrictions" generally.  We have previously referred to the title of a 
provision when interpreting the requirements within the provision. In the present case, we consider that the use of the word "quantitativ e" in the title of the provision informs the 
interpretation of the words "restriction" and "pro hibition" in Article XI:1 and XI:2. It suggests 
that Article XI of the GATT 1994 covers those prohibitions and restrictions that have a limiting effect on the quantity or amount of a product being imported or exported. 
See Appellate Body Report, China – Raw Materials , para. 320. (footnotes omitted) 
1047 Incidentally, we note that Article XVIII of the GATS (Additional Commitments) also refers to 
measures "regarding qualifications, standards or licensing matters". WT/DS453/R 
 
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  paragraph 2(a). We must also bear in mind that the Appellate Body has stated that "interpretation 
must give meaning and effect to all the terms of a treaty" and "[a]n interpreter is not free to adopt 
a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility".
1048 Accordingly, we must take care to av oid an interpretation of the scope of 
paragraph 2(a) of the Annex on Financial Services that renders useless or redundant the terms 
used in that provision or other provisions of the GATS.  
7.841.  If we interpret the wording of paragraph 2(a) of the Annex on Financial Services as 
referring solely to measures that constitute domestic regulation under Article VI of the GATS, we 
could be reducing to inutility the explicit reference to " las demás disposiciones del Acuerdo " ("any 
other provisions of the Agreement";  "toute autre disposition de l'Accord "), which appears to relate 
to any other provision of the GATS and not only to Article VI. Likewise, the references "[ c]uando 
esas measures no sean conformes a las disposiciones del Acuerdo " ("[w]here such measures do 
not conform with the provisions of the Agreement"; " [d]ans les cas où de telles mesures ne seront 
pas conformes aux dispositions de l'Accord ") would be reduced to "a provision", Article VI of the 
GATS. We find implausible Panama’s argument to the effect that the fact that the prudential 
exception covers only domestic regulations does not mean that it cannot justify violations of any provision of the GATS.
1049 Panama asserts, by way of example, that an absolute prohibition and a 
licensing system could both be inconsistent with the MFN treatment obligation of Article II:1 of the 
GATS. According to Panama, under such a scenario, only the licensing system would fall within the 
scope of the prudential exception.1050 In our view, this example of Panama does not make sense. 
We cannot see how a system that provides for the granting of a licence for supplying a service can 
exist if the supply of that service is absolutely prohibited.  
7.842.  In this connection, we recall that the Appellate Body has explained that the words used in 
a provision must be "interpreted in light of the context, and of the object and purpose, of the 
provision at issue, and of the object and purpos e of the covered agreement in which the provision 
appears".1051 According to the Appellate Body, although the meaning attributed to the same term 
in other provisions of the same agreement may also be relevant context, it need not be identical, 
in all respects, to those other meanings.1052  
7.843.  Accordingly, we now propose to examine the context of paragraph 2(a) of the Annex on 
Financial Services. We note that, as immediate context, paragraph 2 of the Annex on Financial Services includes a subparagraph (b), which reads as follows:  
2. Domestic Regulation 
… (b) Nothing in the Agreement shall be construed to require a Member to disclose 
information relating to the affairs and accounts of individual customers or any 
confidential or proprietary information in the possession of public entities. 
7.844.  Like paragraph 2(a), paragraph 2(b) is also headed "Domestic Regulation". This 
paragraph refers specifically to the right of Members to maintain the confidentiality of certain 
information. Like paragraph 2(a), paragraph 2(b) defines its scope with reference to "[n]othing in this Agreement" (" Ninguna disposición del Acuerdo "; "Aucune disposition de l'Accord "). Here again, 
if we interpret paragraph 2(b) as referring exclusively to domestic regulation under Article VI of 
                                               
1048 Appellate Body Report, US — Gasoline , p. 23 (footnotes omitted). See also Appellate Body Report, 
US — Offset Act (Byrd Amendment) , para. 271. In Japan – Alcoholic Beverages II , the Appellate Body 
considered that the principle of effectiveness ( ut res magis valeat quam pereat ) flowed from the general rule of 
interpretation set out in Article 31 of the Vienna Convention. See Appellate Body Report, Japan – Alcoholic 
Beverages , p. 12. 
1049 Panama’s response to Pane l question No. 50, p. 52. 
1050 Panama’s response to Panel question No. 50, p. 52. In its second written submission, Panama states 
that "[a] prohibition or a quota on the number of fore ign suppliers, for example, would not appear to be a 
domestic regulation, as would be, for ex ample, requirements on the verificati on of qualifications or procedures 
for handling applications for permission to practise".  See Panama’s second written submission, para. 2.645. 
1051 Appellate Body Report, EC – Asbestos , para. 88. See also Appellate Body Report, US – Clove 
Cigarettes, footnote 273. 
1052 Appellate Body Report, EC – Asbestos , para. 88. See also Appellate Body Report, US – Clove 
Cigarettes, footnote 273. WT/DS453/R 
 
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  the GATS, we could be curtailing the right of Memb ers to confidentiality, since that right would not 
exist in the case of measures that did not qualify as domestic regulations. 
7.845.  Panama points out that other headings of the Annex on Financial Services are also directly 
correlated with specific articles of the GATS, for example, "Scope and Definition" (paragraph 1 of 
the Annex and Article I of the GATS); "Recognition" (paragraph 3 of the Annex and Article VII of 
the GATS); "Dispute Settlement" (paragraph 4 of  the Annex and Articles XXII and XXIII of the 
GATS); and "Definitions" (paragraph 5 of the A nnex and Article XXVIII of the GATS). We do not 
share Panama’s view that there is an exact corre spondence between the headings of the different 
sections of the Annex on Financial Services and th e headings of the different articles of the GATS. 
For example, paragraph 4 of the Annex on Financial Services is headed "Dispute Settlement", a heading which does not appear in the same form in the text of the GATS. At best, the nearest 
approximation to this part of the Annex would be Article XXIII of the GATS, which is headed 
"Dispute Settlement and Enforcement".  
7.846.  Moreover, Panama argues that an objective interpretation of the GATS "cannot give a 
divergent meaning to two provisions that explicit ly cover the same subject, unless the terms used 
are expressly intended to have a different meaning".
1053 According to Panama, "[g]iven the limited 
number of questions covered in the Annex, as co mpared with those covered by the GATS, it is 
obvious that the paragraphs of the Annex refer dire ctly and solely to those specific areas of the 
GATS in which it was considered pertinent to establish additional provisions for financial services".
1054 It does not seem to us that in all the cases in which there may be a correlation 
between the headings of paragraphs of the Anne x and those of the provis ions of the GATS the 
matters dealt with are also identical. An obvious case is that of paragraph 2(b) of the Annex itself, 
which, as we have said, deals with the right of Members to maintain the confidentiality of certain information. Article VI of the GATS does not deal with questions concerning the disclosure of 
confidential information. These matters are addressed in Article III bis of the GATS.
1055  
7.847.  In the light of the foregoing, and for the sake of an interpretation that gives meaning to all 
the words of the treaty and does not reduce the words of paragraph 2 of the Annex on Financial 
Services to inutility or redundancy, we consider that the concept of "domestic regulation" in the 
heading of paragraph 2 of the Annex on Financial Services has a scope different from that of the similar concept in the heading of Article VI of the GATS. In our view, the text of paragraph 2(a) of 
the Annex on Financial Services (i.e. "[n]otwithstanding any other provisions of the Agreement" 
and "[w]here such measures do not conform with  the provisions of the Agreement") indicates a 
scope greater than that of Article VI of the GATS, as is confirmed by the immediate context 
afforded by paragraph 2(b). The Panel therefore considers that paragraph 2(a) of the Annex on 
Financial Services covers all types of measures affecting the supply of financial services within the 
meaning of paragraph 1(a) of the said Annex and not only those measures that could be characterized as "domestic regulations" within the meaning of Article VI of the GATS.  
7.848.  We would also like to express our concern with regard to the serious systemic implications 
of the narrow interpretation proposed by Panama. Indeed, such an interpretation would drastically 
reduce the scope of the prudential exception, sinc e it would provide an escape valve only for those 
"domestic regulations" which do not conform wi th Article VI of the GATS and not for those 
measures which may be covered by other provisions of the GATS (such as those relating to market 
access, national treatment or MFN treatment).  
7.849.  We agree with the concern expressed by some third parties in this dispute which also 
stress the broad policy space which this provision reflects.
1056 In particular, we find relevant the 
comment by the United States to the effect that Members’ broad conception of the prudential 
                                               
1053 Panama’s second written submission, para. 2.643. 
1054 Panama’s second written submission, para. 2.644. 
1055 Article III bis entitled "Disclosure of Confidential Information" states: 
Nothing in this Agreement shall require any Member to provide confidential information, the disclosure of which would impede law enforcemen t, or otherwise be contrary to the public 
interest, or which would prejudice legitimate co mmercial interests of pa rticular enterprises, 
public or private. 
1056 Brazil’s third-party submission, para. 20; United St ates’ response to Panel qu estion No. 13 (referring 
to its response to advance Panel question No. 7, para . 3). See also Council for Trade in Services, Special 
Session, "Report of the Meeting held on 3-6 Decemb er 2001", S/CSS/M/13, 26 February 2002, paras. 267, 
268, 271, 272, and 275, document cited by the United St ates in its response to Panel question No. 7.  WT/DS453/R 
 
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  exception informed the scope of the commitments and limitations that they negotiated and 
inscribed in their schedules of specific commitments and MFN exemptions lists.1057 Likewise, the 
European Union has stressed that this provision seems to have been left intentionally broad and notes that it is the result of a delicate compromi se. Therefore, a narrow interpretation of the scope 
of application of the provision or of the conditions under which the prudential exception can 
successfully be invoked would go against the balance of rights and obligations of the Agreement.
1058  
7.850.  The relevance of the role played by the broa d view of the prudential exception in delimiting 
the scope of the specific commitments and the consequent process of recording each Member’s limitations in their schedules of specific commi tments and lists of exemptions from the MFN 
principle appears to be confirmed by paragraph 13  of the previously mentioned Explanatory Note 
by the Secretariat entitled "Scheduling of Initial Co mmitments in Trade in Services". We recall that 
in explaining what should be inscribed in a sched ule of specific commitments under the GATS, this 
Note states that "any prudential measure justifiable under paragraph 2.1 of the Annex on Financial 
Services constitutes an exception to the Agreement and should not be scheduled".
1059  
7.851.  In view of the foregoing, we consider that to be able to shield its measures 5 and 6 under 
the prudential exception, Argentina needs to sati sfy three requirements: (i) that measures 5 and 6 
are measures "affecting the supply of financial services"; (ii) that measures 5 and 6 were taken 
"for prudential reasons"; and (iii) that measures 5 and 6 have not been used "as a means of avoiding [Argentina’s] commitments or obligations" under the GATS. 
7.852.  This order of analysis coincides with that  proposed by the parties and third parties which 
have provided the Panel with input on this issue.
1060 Although panels are not obliged to follow the 
order of analysis proposed by the parties1061, this Panel has no reservations about undertaking the 
interpretative analysis in the order proposed by the parties to this dispute. Therefore, the Panel 
will follow this order of analysis in exam ining whether measures 5 and 6 are covered by 
paragraph 2(a) of the Annex on Financial Services . We begin by examining the first requirement, 
namely, whether measures 5 and 6 are measures "affecting the supply of financial services". 
7.3.7.2.4.1  First requirement: Whether me asures 5 and 6 are measures "affecting the 
supply of financial services” 
7.853.  The first requirement that Argentina must meet is that its measures 5 and 6 are measures 
"affecting the supply of financial services" in accordance with paragraph 1(a) of the Annex on 
                                               
1057 United States’ response to Pa nel question No. 13 (referring to  its response to advance Panel 
question No. 7, para. 5).  
1058 European Union’s response to Pa nel question No. 13, para. 35.  
1059 See the 1993 Guidelines, (Exhibits PAN-46 / ARG-79), para. 13. We recall that in US – Gambling , 
the Appellate Body considered that this Explanatory Note constituted a supplementary means of interpretation  
under Article 32 of the Vienna Conv ention. See Appellate Body Report, US – Gambling , para. 197. Reference 
should also be made to paragraph 20 of the revised Guid elines adopted by the Council for Trade in Services on 
23 March 2001, which reproduces practically the entire text of paragraph 13 of the 1993 version. See the 2001 Guidelines, (PAN-45 / ARG-39), para. 20. 
1060 Argentina’s response to Panel question No. 50, pa ras. 1-3; Panama’s resp onse to Panel question 
No. 50; and European Union’s response  to Panel question No. 13, paras. 31-33. In this connection, we note 
that Panama considered that there was a fourth requirement which Argentina had to meet in order to demonstrate that a measure is covered by the prudenti al exception, namely, "that the measure constitutes a 
'domestic regulation'". See Panama’s second written submission, para. 2.637. The Panel considered that 
paragraph 2(a) of the Annex on Financia l Services covers all types of measur es affecting the supply of financial 
services within the meaning of paragraph 1(a) of the Annex and not only those measures  that can be characterized as "domestic regulation s" within the meaning of Article VI of the GATS. See paragraph 7.847 
above.  
1061 The freedom of panels to decide the order of thei r analysis was recognized by the Appellate Body in 
Canada – Wheat Exports and Grain Imports , where it stated that "[a]s a general principle, panels are free to 
structure the order of their analysis as they see fit.  In so doing, panels ma y find it useful to take account of 
the manner in which a claim is presented to them by  a complaining Member". Se e Appellate Body Report, 
Canada – Wheat Exports and Grain Imports , para. 126. This could be compared with the manner in which 
Argentina is presenting its defence, since it is Arge ntina that is invoking the prudential exception. In 
US - Zeroing (EC) (Article 21.5 – EC) , the Appellate Body recognized the po ssibility of panels opting for an 
order of analysis different from that suggested by the complaining party, "i n particular, when this is required 
by the correct interpretation of the or application of the legal provision at issue". See Appellate Body Report, 
US – Zeroing (EC) (Article 21.5 – EC) , para. 277.  WT/DS453/R 
 
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  Financial Services reproduced in paragraph 7.823. Thus, measures 5 and 6 must "affect" the 
supply of a particular type of services, namely, financial services.  
7.854.  With respect to what is meant by a measure "affecting" the supply of financial services, we 
recall that in EC – Bananas III , in discussing the scope of the GATS and, in particular, the 
interpretation of the words "measures by Members a ffecting trade in services" in Article I:1 of the 
GATS, the Appellate Body considered that:  
The ordinary meaning of the word "affecting" implies a measure that has "an effect 
on", which indicates a broad scope of application. This interpretation is further 
reinforced by the conclusions of previous panels that the term "affecting" in the context of Article III of the GATT 1947 is wider in scope than such terms as "regulating" or "governing".
1062 
7.855.  In our view, in determining whether the measure "affects" the supply of financial services 
within the meaning of paragraph 1(a) of the Annex on Financial Services, the Panel can be guided by this jurisprudence of the Appellate Body. This leads us to the view that the word "affecting" in 
paragraph 1(a) of the Annex on Financial Services has a broader scope than such terms as 
"regulating" or "governing" and therefore covers any measure that has "an effect on" the supply of financial services. 
7.856.  We recall that we have already conclude d that the eight measures at issue, and hence 
measures 5 and 6, are measures "affecting trade in services" within the meaning of Article I:1 of the GATS.
1063 Likewise, we have concluded that both measure 5 and measure 6 are inconsistent 
with Article II:1 of the GATS.1064 In our view, if a measure is covered by the GATS since it affects 
trade in services and has been found to be inconsistent with that Agreement, it must be 
considered to be a measure "affecting" the supply of services.1065 We must therefore establish 
whether the services whose supply is affected by measures 5 and 6 are "financial" in nature. 
7.857.  Argentina claims that the measures in question are measures "affecting the supply of 
financial services" within the meaning of paragraph 1(a) of the Annex on Financial Services because both "reinsurance and retrocession servic es" (regulated by measure 5) and the trading of 
"transferable securities" (regulated by measure 6) are specifically listed under the definitions of 
financial services in paragraph 5(a) of the Annex on Financial Services.
1066 We note that the 
services identified by Panama are reinsurance services1067 (for measure 5) and portfolio 
management services (for measure 6)1068, both financial in nature.1069 We also note that, before 
listing the "financial services" to which we have referred, paragraph 5 of the Annex on Financial 
Services defines the concept of "financial service" as "any service of a financial nature offered by a 
financial service supplier of a Member". It is therefore our understanding that all the services 
subsequently listed in paragraph 5 of the Annex are services of "a financial nature".  
7.858.  Consequently, we consider that both measure 5 and measure 6 are measures affecting the 
supply of financial services within the meaning of paragraph 1(a) of the Annex on Financial 
Services. We now proceed to examine whether Argentina has also demonstrated that measures 5 
and 6 are measures taken "for prudential reasons". 
                                               
1062 Appellate Body Report, EC – Bananas III , para. 220. 
1063 See section 7.3.1.2.4 above. 
1064 See section 7.3.2.2.4 above. 
1065 We also recall that in the context of the claims  under Article XVII of the GATS we found that the 
concept of measures "affectin g the supply of services" is closely link ed to the concept of "affecting trade in 
services", given that the concept of "t rade in services" is defined in Articl e I of the GATS as the "supply of a 
service" by means of one of the four modes of supply identified in that provision. See para. 7.474 above. 
1066 Argentina’s second written submission, para. 85. The Panel notes that the trading of transferable 
securities is covered by the serv ices cited in paragraph 5(a)(x) of  the Annex on Financial Services. 
1067 We recall that Panama also made claims in relati on to the retrocession serv ices sector but the Panel 
considered that these services are not cove red by measure 5. See section 7.1.4 above. 
1068 See paragraph 7.97 above. 
1069 Reinsurance services are mentioned in paragraph 5(a)(ii) of the Annex on Financial Services, while 
portfolio management services are co vered by the services indicated in paragraph 5(a)(xiii) of that Annex 
("Asset management, such as cash or portfolio manage ment, all forms of collective investment management, 
pension fund management, custodial,  depository and trust services"). WT/DS453/R 
 
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  7.3.7.2.4.2  Second requirement: Whether me asures 5 and 6 were taken for prudential 
reasons 
7.859.  Once it has been established that measures 5 and 6 affect the supply of financial services 
within the meaning of paragraph 1(a) of the Annex on Financial Services, the next requirement 
that Argentina must demonstrate is that measur es 5 and 6 were taken for prudential reasons. 
7.860.  The crux of the matter is therefore what  is meant by a measure taken "for prudential 
reasons". In this connection, we note that Panama uses the terms "measures taken for prudential 
reasons" and "prudential measures" as synonyms.1070 In a footnote in its second written 
submission, Panama observes in this respect that  paragraphs 3 and 4 of the Annex on Financial 
Services refer to "prudential measures" and "prudential issues", respectively, which, according to Panama, confirms that the key term for the purposes of the Annex on Financial Services is 
"prudential", and not so much the terms "reasons", "measures" or "issues".
1071 Argentina does not 
refer specifically to this question, but uses both terms without distinction.1072  
7.861.  The Panel is not convinced by this assertion of Panama nor is it convinced that the two 
concepts – "measures for prudential reasons" and "prudential measures" – signify the same thing 
or have the same effects. Firstly, we note that the prudential exception does not speak of "prudential measures" but of "measures for prudential reasons". We therefore consider that it is 
the reason which must be "prudential" and not the measure per se . The meaning of the two 
expressions cannot be the same and, in our opinion,  this is an important aspect to be borne in 
mind when interpreting this provision. In othe r words, the GATS does not seek to identify 
measures that could be characterized as specifically  prudential, such as those usually cited in the 
context of the standards defined by th e Basel Committee on Banking Supervision.
1073 Nor does 
paragraph 2(a) of the Annex on Financial Services refer to any international norm to be used as a guide when deciding on the nature of a measure in  the light of the Agreement. Rather, instead of 
exempting a specific type of measures from the obligations and commitments under the GATS, the 
exception makes it possible to exempt or exonerate any measure affecting the supply of financial services that has been taken " for prudential reasons ".  
7.862.  Contrary to what Panama suggests, we consider that the use made of expressions such as 
"prudential measures" and "prudential issues" in paragraphs 3 and 4 of the Annex on Financial Services, respectively, corresponds to actual provisions of the Annex and has a specific meaning whose interpretation is not at issue in this dispute. The interpretation proposed by Panama would 
run counter to an effective interpretation of paragraph 2(a) since it would not give meaning to the 
term "reasons" used in that provision. 
7.863.  Therefore, in answering the question of  what is meant by a measure being taken "for 
p r u d e n t i a l  r e a s o n s " ,  w e  c o n s i d e r  i t  u s e f u l  t o  d i v i d e  o u r  a n a l y s i s  i n t o  t w o  p a r t s :  f i r s t ,  w e  w i l l  
examine the meaning of the concept "prudential reasons" in paragraph 2(a) of the Annex on 
Financial Services; and second, we will analyse what is meant by a measure having been taken 
"for" prudential reasons.  
(a) The meaning of the concept of "prudential reasons" 
7.864.  We begin by analysing the meaning of the term " motivos cautelares " (prudential reasons) 
in the Spanish version of paragraph 2(a) of the Annex on Financial Services of the GATS.  
7.865.  The dictionary of the Spanish Royal Academy defines " motivo " (motive) as "[ q]ue mueve o 
tiene eficacia o virtud para mover; Causa o razón que mueve para algo "
1074 (that which moves or 
has efficacy or power to move; moving cause or reason for something) and " cautelar " (prudential) 
                                               
1070 Panama’s second written submission, para. 2.653 and footnote 624; and Argentina’s first written 
submission, para. 560. 
1071 Panama’s second written submission, footnote 624. 
1072 Argentina’s first written submission, para. 560. 
1073 See the "Core principles for effective banking su pervision", established by the Basel Committee on 
Banking Supervision, in particular Principles 14 to 29 relating to "prudential regulations and requirements" 
(September 2012 version, Spanish text can be viewed at: http://www.bis.org/publ/bcbs230_es.pdf ).  
1074 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. II, p. 1503. WT/DS453/R 
 
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  as "[p]reventivo, precautorio; Dicho de una measure o de una regla: Destinada a  prevenir la 
consecución de determinado fin o precaver lo que pueda dificultarlo "1075 ([p]reventive, 
precautionary; said of a measure or rule intended to prevent a particular outcome or guard against that which might impede it).  The same dictionary defines " preventivo " (preventive) as "[ q]ue 
previene "
1076 (that which prevents) and the verb " prevenir " as "[ p]reparar, aparejar y disponer con 
anticipación lo necesario para un fin; Prever, ver, conocer de antemano o con anticipación un daño o perjuicio; Precaver, evitar, estorbar o impedir al go; Advertir, informar o avisar a alguien de algo; 
Imbuir, impresionar, preocupar a alguien, induciéndole a prejuzgar personas o cosas; Anticiparse a 
un inconveniente, dificultad u objeción; Disponer con anticipación, prepararse de antemano para algo"
1077 ([p]repare, get ready, and provide in advanc e for that which is necessary for a purpose; 
foresee, see, be aware beforehand or in advance of possible harm or injury; guard against, avoid, 
hamper or hinder something; warn, inform or notify someone of something; imbue, impress or 
worry someone, thereby inducing him to prejudge  persons or things; anticipate an obstacle, 
difficulty or objection; make provision in advance or prepare for something beforehand). The 
definition of " precautorio " (precautionary) in the same dictionary is "[ q]ue precave o sirve de 
precaución "1078 ([t]hat which guards against or serves as a precaution). The definition of 
"precaver " (guard against, forestall) is "[ p]revenir un riesgo, daño o peligro, para guardarse de él 
y evitarlo "1079 ([t]o anticipate a risk, injury or danger, to protect oneself from it and avoid it). 
7.866.  As on previous occasions, we consider it  appropriate to refer to the ordinary meaning of 
the equivalent terms in the equally authentic Englis h and French versions of paragraph 2(a) of the 
Annex on Financial Services. The English version of  this paragraph refers to "prudential reasons". 
In the Shorter Oxford Dictionary , the word "prudential"  is defined as " [o]f, involving or 
characterized by prudence; exercising prudence, esp. in business affairs ".1080 In French, the words 
used are " raisons prudentielles ". The dictionary Le Petit Robert  does not define the word 
"prudentiel " but we do find the word " prudent " which is defined as "[ q]ui a, montre de la 
prudence” ( having or showing prudence).1081 The definition of " prudence " is "[a]ttitude d'esprit 
d'une personne qui, réfléchissant à la portée et aux conséquences de ses actes, prend ses 
dispositions pour éviter des erreurs, des malheurs possibles, s'abstient de tout ce qu'elle croit 
pouvoir être source de dommage "1082 ([a]ttitude of a person who, reflecting on the significance 
and consequences of his acts, takes steps to avoid mistakes and possible mishaps, and refrains from anything that might be a source of harm). 
7.867.  All these definitions, whatever the official language we examine, tend to characterize the 
expression "prudential reasons" (" motivos cautelares ", "raisons prudentielles ")  as "causes" or 
"reasons" of a "preventive" or "precautionary" natu re. In this respect, we note that Argentina and 
third parties such as Brazil and the United States also consider that the term "prudential" 
("cautelar ") should be interpreted in the sense of "precautionary".
1083 
7.868.  In our view, this understanding of the concept "prudential reasons" as referring to 
"preventive or precautionary reasons" finds suppor t in the list of prudential reasons set out in 
paragraph 2(a) of the Annex on Financial Services. In the Panel’s opinion, this list throws light on the type of "prudential reasons" envisaged in this paragraph. The list, which constitutes the 
immediate context for the concept "prudential reasons", follows the word "including" so that, as 
mentioned above
1084, the list of reasons should be regard ed as indicative and not exhaustive, 
unlike, for example, the subparagraphs of Article XIV of the GATS. We note that the parties and 
                                               
1075 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. I, p. 470. 
1076 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. II, p. 1783.  
1077 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. II, p. 1783.  
1078 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. II, p. 1770.  
1079 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. II, p. 1770.  
1080 Shorter Oxford English Dictionary, 6th edition, W.R. Trumble, A. Stevenson (editors) (Oxford 
University Press, 2007), p. 2386.  
1081 Dictionnaire de la Langue Française Le Petit Robert , (Dictionnaires Le Robert, 2000), p. 2033  
1082 Dictionnaire de la Langue Française Le Petit Robert , (Dictionnaires Le Robert, 2000), p. 2033. 
1083 United States’ third-party submission, footnote 13; and Brazil’s third-party submission, para. 18. 
1084 See para. 7.819 above. WT/DS453/R 
 
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  third parties that have commented on this provision are in agreement as regards the indicative 
and non-exhaustive nature of the list of prudential reasons included in the prudential exception.1085 
7.869.  The indicative list of prudential reasons in paragraph 2(a) of the Annex on Financial 
Services includes by way of example "the protec tion of investors, depositors, policy holders or 
persons to whom a fiduciary duty is owed by a financial service supplier" or "to ensure the 
integrity and stability of the financial system".1086 These examples are in themselves extremely 
broad and point to various aspects of prudential reasons – aspects that have to do, inter alia , with 
the protection of consumers of financial services broadly speaking or with the maintenance of the 
integrity and stability of the financial system. Being merely illustrative, the list contained in paragraph 2(a) could include other prudential reasons beyond those explicitly cited.
1087  
7.870.  In the Panel’s opinion, the meaning and importance that Members attach to these 
prudential reasons may vary over time, depending on  different factors, including the perception of 
t h e  r i s k  p r e v a i l i n g  a t  d i f f e r e n t  p o i n t s  i n  t i m e .  I n  t h i s  c o n n e c t i o n ,  w e  r e c a l l  t h a t  o n  v a r i o u s  occasions the Appellate Body has stated that Members, in applying concepts equally important for 
society, such as those covered by Article XX of the GATT 1994, are entitled to determine the level 
of protection they consider appropriate.
1088 This was also the conclusion of the panel in US – 
Gambling , with reference to other policy objectives under Article XIV of the GATS.1089 
7.871.  Although these statements were made in  the context of Articles XX of the GATT 1994 and 
XIV of the GATS, we believe that they also apply to  prudential reasons such as "the protection of 
investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier" or "the integrity and stability of the financial system" within the framework of 
paragraph 2(a) of the Annex on Financial Services. The nature and scope of financial regulation at 
different times reflect the knowledge, experience  and scales of values of governments at the 
moment in question. We therefore consider that WTO Members should have sufficient freedom to 
define the prudential reasons that underpin their measures, in accordance with their own scales of 
values. 
7.872.  In our view, this interpretation corresponds  to the object and purpose of the GATS, as set 
out in its own preamble, which recognizes "the right of Members to regulate, and to introduce new 
regulations, on the supply of services within their territories in order to meet national policy objectives".
1090 
                                               
1085 Argentina’s first written submission, para. 553, and response to Panel question No. 52; Panama’s 
response to Panel question No. 52; Brazil’s response to Panel question No. 14; United States’ response to advance Panel question No. 7; and European Union’s response to Panel question No. 14.  
1086 We note that it is not clear that the phrase "to ensure the integrity and stability of the financial 
system" is one of the possible prudential reasons, sinc e this expression is preceded by the conjunction "or" 
after a comma, which would appear to indicate that it co ncerns another type of meas ures in addition to those 
for "prudential reasons". Thus, the first sentence of the prudential exception could be understood as 
authorizing Members to take "measures for prudential re asons, including …, or to …". The same structure can 
be found in the authentic versions in  Spanish and French. However, the part ies and the third pa rties appear to 
consider that this is one more prudential reason. The Pa nel takes note of the relevant arguments of the parties 
and third parties, but does not consider it necessary to  examine these arguments any further since there is no 
need to resolve this issue for the purposes of the present dispute. 
1087 The United States expressed a similar view in its response to advance Panel question No. 7. 
1088 See Appellate Body Report, Korea – Various Measures on Beef , para. 176; and EC – Asbestos , 
para. 168. 
1089 The panel reasoned as follows: 
We are well aware that there may be sensitivities associated with the interpretation of the terms "public morals" and "public order" in the context of Article XIV. In the Panel's view, the content 
of these concepts for Members can vary in time and space, depending upon a range of factors, 
including prevailing social, cultural, ethical and religious values. Further, the Appellate Body has stated on several occasions that Members, in appl ying similar societal concepts, have the right to 
determine the level of protection that they consid er appropriate.  Although these Appellate Body 
statements were made in the context of Article XX of the GATT 1994, it is our view that such 
statements are also valid with respect to the prot ection of public morals and public order under 
Article XVI of the GATS. More pa rticularly, Members should be gi ven some scope to define and 
apply for themselves the concepts of "public mo rals" and "public order" in their respective 
territories, according to their own systems and scales of values. 
See Panel Report, US – Gambling , para. 6.461 (footnotes omitted).  
1090 Fourth recital of the GATS. WT/DS453/R 
 
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  7.873.  We therefore agree with the third parties concerning the evolutionary nature of the 
concept of "prudential reasons". Thus, for the Euro pean Union, the concept of "prudential reasons" 
is "of an intrinsically evolutionary nature", and the fact that Members have agreed on a non-exhaustive list of reasons is evidence of that. According to the European Union, as the recent 
financial crisis has revealed, it is not always possible to anticipate the consequences of turbulence 
in the financial markets or the financial system or to avoid them, and the prudential toolbox is in constant evolution, as is shown by the plethora  of recommendations made by the international 
financial organizations in recent years.
1091 According to the United States, as the financial crisis of 
2008 and its aftermath have amply demonstrated, the risks in the financial sector can evolve over time, on the basis of the changing circumstances in that sector, and have consequences that can threaten the entire economy and the well-being of nations.
1092 Likewise, Brazil argues that not only 
may measures be taken broadly to protect investors, depositors and the financial system as a 
whole, but may also be adopted in a precautionary manner.1093 According to Brazil, the prudential 
exception allows Members to act broadly and plan ahead, taking into account the fact that many of 
the threats to financial stability come from multiple and complex market factors, as shown by the 
financial crisis of 2008.1094 
7.874.  We also note that the international community has recognized that the build-up of financial 
risks can be hard to discern and address. In the words of the G-20:  
Policy-makers, regulators and supervisors, in some advanced countries, did not 
adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of 
domestic regulatory actions.
1095 
7.875.  Accordingly, our interpretation appears to be consistent with the concerns of the 
international community regarding the nature and impact of the financial risks and the consequent 
need to preserve sufficient flexibility when determining the prudential reasons to which the 
regulation should respond. 
7.876.  We note that Panama takes a view of "pru dential" different from that which we have just 
described. In this connection, we recall that Panama confuses the concept of "measures … for 
prudential reasons" with that of "prudential measures". As previously indicated, Panama considers that the prudential nature of the measure necessi tates the existence of at least two requirements: 
fumus boni iuris  and periculum in mora . According to Panama, the first requirement (appearance 
of good law) calls for the claim to have a certain amount of plausibility, the actual existence of a 
risk and the possibility of its materialization. The second requirement (danger in delay) is related to the risk of an imminent legal injury being suffered as a consequence of a delay in the adoption 
of the measure. It is the risk of imminent injury that bestows on prudential measures their 
generally urgent character.
1096 Panama maintains that there must be a risk whose materialization 
is imminent if the adoption of the measure is delayed.1097  
7.877.  We do not see in the text of paragraph 2(a) of the Annex on Financial Services any 
indication that the only prudential reasons envisaged are those which, as Panama argues, involve avoiding "a risk whose materialization is imminent if the adoption of the measure is delayed".
1098 
In fact, the indicative nature of the list of prudential reasons in paragraph 2(a) of the Annex on 
Financial Services on the one hand reflects the difficulty of having an exhaustive list of reasons 
capable of underpinning specific measures in the financial sector, and on the other denotes a desire to allow Members to adapt their measures in the financial sector to the changing and 
unpredictable nature of the risks that might aris e. Therefore, taking into account the ordinary 
meaning of the words "prudential reasons" and th e illustrative list of these reasons, there is 
nothing in the text of paragraph 2(a) to suggest this idea of "imminence". 
                                               
1091 European Union’s response to Panel question No. 13, para. 36. 
1092 United States’ response to Pa nel question No. 13 (referring to  its response to advance Panel 
question No. 7, para. 13). 
1093 Brazil’s third-party submission, para. 18. 
1094 Brazil’s third-party submission, para. 20. 
1095 G20, Declaration of the Summit on Financial Markets and the World Economy  (2008), 
(Exhibit ARG-14), para. 3 (exhibit provided in English and translated into Spanish by the WTO Secretariat). 
1096 Panama’s second written submission, para. 2.655. 
1097 Panama’s second written submission, para. 2.708. 
1098 Panama’s second written submission, para. 2.708. WT/DS453/R 
 
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  7.878.  In our view, it is important to understand that "systemic" problems may be incubating or 
gestating over the course of time and erupt rapi dly; hence the importance of being prepared for 
them in advance.1099 For example, in the particular case of the insurance sector, a situation of 
failure – and, ultimately, the possibility of contagion and financial instability, together with a threat 
to the protection of the consumers of these services – might be slow to emerge.1100 
7.879.  In the light of the foregoing, we conclude that the expression " motivos cautelares " 
(prudential reasons) refers to those "causes" or "reasons" that motivate financial sector regulators 
to act to prevent a risk, injury or danger that does not necessarily have to be imminent. 
(b) Measures taken "for" prudential reasons 
7.880.  Having determined the meaning of the term "prudential reasons", we continue our analysis 
by examining the question of when a measure is taken "for" prudential reasons. 
7.881.  We recall that Argentina argues that this step in the analysis under paragraph 2(a) of the 
Annex on Financial Services requires the determination of whether there is a "rational relationship" between the measure and its prudential objective.
1101 For Argentina, a measure taken "for  
prudential reasons " is a measure intended to avoid an outcome that conflicts with an objective 
established or envisaged by the corresponding au thority, which may have adverse or pernicious 
consequences for the rights protected by that authority.1102 Moreover, for Argentina, a central 
aspect of what makes a measure prudential has to do with its fitness for the purpose of preventing 
the event, or the effects resulting therefro m, which the measure is intended to avoid.1103 
7.882.  Panama considers that the measures must have been taken for a "specific cause or 
reason". According to Panama, it is the prudential  nature of the measure taken by the respondent 
that should be subjected to the closest scrutiny by a panel in this phase of the examination.1104 
Moreover, Panama maintains that when a panel assesses whether a measure taken by a Member is "for prudential reasons" within the meaning of paragraph 2(a) of the Annex on Financial 
Services, it should examine whether there is a real risk of imminent injury if that measure is not 
adopted or its adoption is delayed.
1105  
7.883.  We note that several third parties have commented on the sort of examination we should 
carry out in order to determine whether a measure has been taken for prudential reasons. The 
European Union agrees with the parties that the use of the preposition "for" implies a rational relationship of ends and means between the measure and the prudential reason.
1106 For the United 
                                               
1099 In this connection, we note that the third parties share this reading with the Panel with respect to 
the first sentence of paragraph 2(a) of the Annex on Financial Serv ices in the sense of allowing Members not 
only to respond to situations of im minent peril for the financial system but also to forese e sufficiently in 
advance the emergence of situations that pose a threat  to the financial system. Thus, Brazil argues that not 
only may the measures be taken broadly to protect invest ors, depositors and the fina ncial system as a whole, 
but may also be adopted in a precautionary manner. A ccording to Brazil, the prudential exception allows 
Members, instead of reacting to individual risks posed in specific sectors or areas of the financial world, to act 
broadly and plan ahead, since many of the threats to financial stability may come from multiple and complex 
factors in various markets, as the recent global financial crisis of 2008 proved. See Brazil's third-party submission, paras. 18 and 19. 
1100 The International Association of Insurance Supervis ors, the sector’s governin g body at world level, 
recognizes this possibility: 
[S]ystemic risk with a bearing on financial stability and the real economy posed by the insurance sector is of  a different nature because of  the insurance business model. 
In the insurance sector the time horizon plays a relevant role, for systemic problems tend 
to emerge over a longer time horizon than for banking. While banking failures may arise 
in a matter of hours or days, insurance failur es usually take months  or years, although 
loss of insurance capacity could emerge in week s, if insurers or reinsurers cease offering 
cover after serious problems are discovered.  See International Association of Insurance Supervisors, Systemic Risk and the Insurance  Sector , 
25 October 2009, (Exhibit ARG-140), para. 25 (exhibit provided in English and translated into Spanish by the WTO Secretariat). 
1101 Argentina’s second written submission, para. 79, and responses to Panel questions No. 53 and 87. 
1102 Argentina’s first written submission, para. 560. 
1103 Argentina’s second written submission, para. 89. 
1104 Panama’s response to Panel question No. 87.  
1105 Panama’s second written submission, para. 2.661. 
1106 The European Union offers the following explanation: WT/DS453/R 
 
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  States, the Member must, as an initial matter, identify a "prudential reason" "for" which the 
measure was taken.1107  
7.884.  Carrying out an appropriate examination to determine whether a measure has been taken 
for prudential reasons is no easy task. If we compare paragraph 2(a) of the Annex on Financial 
Services with the general exceptions of Articles XIV of the GATS and XX of the GATT 1994, we 
note that, unlike some of the subparagraphs of these provisions1108, the prudential exception does 
not require the measures to be "necessary". Hence it does not seem obvious to us a priori  that the 
text of paragraph 2(a) of the Annex on Financial Services justifies the imposition of a "necessity" 
test requiring the measure to be the least trade-rest rictive, as established within the context of the 
general exceptions of the GATT 1994 and the GATS. In  this respect, we agree with the parties and 
various third parties. For Argentina, the prudential exception does not justify the use of a 
"necessity" test or other more deferential standa rd, such as that stemming from the expression 
"relating to".1109 Panama does not refer to a "necessity" test, but considers that the measures 
must have been taken for a "specific cause or reason". According to Panama, it is the prudential  
nature of the measure taken by the respondent th at should be the subject of the closest scrutiny 
by a panel in this phase of the examination.1110 The European Union considers that, unlike many of 
the paragraphs in Article XX of the GATT 1994 and Article XIV of the GATS, which specify that the 
measure must be "necessary" for achieving the legitimate objective, paragraph 2(a) does not 
require that the measure should be the least trade-restrictive means of achieving the stated objective.
1111 According to the United States, the expression "for prudential reasons" neither 
requires nor permits an assessment of the extent to which the measure contributes to the 
realization of the end pursued.1112 
                                                                                                                                               
Unlike many of the paragraphs in Article XX of the GATT 1994 and XIV of the GATS, which 
specify that the measure must be "necessary" for achieving the legitimate objective, paragraph 2(a) does not require that the measure should be the least trade-restrictive means to 
achieve the stated objective. The use of the word  "for" in the phrase "measures for prudential 
reasons" signifies a means-ends relation between the measure and the prudential objective. Hence, the Member taking the measure at issue must demonstrate a rational relationship of ends and means between the objective and the measure at issue.  See European Union’s third-party submission, para. 132 (translated into Spanish by the WTO 
Secretariat). The European Union reiterates this ar gument in its response to Panel question No. 13. 
1107 The United States considers that: 
Thus, according to the text, for a Member’s measure to fall within the exception, the Member must, as an initial matter, identify a "prudential reason" "for" which the measure was "tak[en]".  These reasons are not exclusive; the exception makes clear that its scope is broad and encompasses other prudential reasons or consider ations beyond those expressly listed in the 
provision. See United States’ response to Panel question No . 13 (referring to its response to advance Panel 
question No. 7, para. 12) (translated into Spanish by the WTO Secretariat). 
1108 Namely, subparagraphs (a), (b) and (c) of Articl e XIV of the GATS and subparagraphs (a), (b) and 
(d) of Article XX of the GATT 1994. 
1109 For Argentina,  
[I]f the authors of the prudential exception ha d wanted that exception to be applied more 
strictly, they would have provided a less deferent ial standard, such as that  of 'necessity' which, 
according to the Appellate Body, ' is located … closer to the pole of indispensable than to … 
making a contribution to '. They could also have subjecte d the prudential exception to an 
intermediate level of deference, such as 'relating to', which, according to the Appellate Body, 
refers to measures which are ' primarily aimed at the conservation of exhaustible natural 
resources, within the meaning of Article XX(g) of the GATT '. However, the authors of the 
prudential exception agreed that the text of th at provision should be couched in the broadest 
possible terms, requiring only that the measure be taken 'for prudential reasons'. This language implies a very deferential standard, which requires the Panel to examine the prudential objectives of the measure and try to determine whether there is a rational relationship between those prudential objectives and the measure in question. See Argentina’s response to Panel question No. 53 (emphasis original). 
1110 Panama’s response to Panel question No. 87.  
1111 See footnote 1106 above. 
1112 In the response of the United States we find the following:  
By its terms and unlike the general exceptions, th e prudential exception provides that a measure 
must be taken "for prudential re asons".  That text neither requir es nor permits an assessment of 
"the extent to which the measure contributes to the realization of the end pursued", whether 
under a test related to "necessity", or whether the measure is "relating to" a particular end (e.g., 
"rational relationship" or "reasonableness" test).  Some of the general exceptions in GATT and GATS, for example, expressly require a measure to  be "necessary" to achieve a purpose, such WT/DS453/R 
 
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  7.885.  Nor does it seem to us that we can simply transpose the previous rulings by the Appellate 
Body with respect to Article XX(g) of the GATT 1994, which allow the adoption of inconsistent 
measures "relating to the conservation of … resour ces …". In this respect, we agree with Argentina 
that the prudential exception does not justify the use of a standard such as that stemming from 
the expression "relating to".1113  
7.886.  We must therefore proceed to interpret the text of paragraph 2(a) of the Annex on 
Financial Services on the basis of the ordinary mean ing of its terms, in their context, while taking 
into account the object and purpose of the GATS. 
7.887.  We note that the Spanish Royal Academy defines the preposition " por" (for), in its most 
relevant sense, as "[ d]enota causa " (denoting cause).1114 In English, the Shorter Oxford  dictionary 
defines the preposition " for" as "[ a]ffecting, with regard to, or in respect of " or " [h]aving (the thing 
mentioned) as a reason or cause ".1115 In French, the dictionary Le Petit Robert  defines the 
preposition " pour" as " destiné à (qqn, qqch.) " (intended for (someone, something)) or " à cause 
de" (because of"). Thus, the meaning is similar in all three languages.1116 
7.888.  A measure taken "for" prudential reasons would therefore be a measure with a prudential 
cause. This interpretation is reinforced by the meaning of the Spanish word " motivo ", which also 
suggests the "cause or reason" for something.  
7.889.  In this connection, Argentina’s interpretation – in proclaiming a "rational relationship" 
between the measure and its prudential objective1117 and that the measure must be fit for the 
purpose of preventing the event, or the effects re sulting therefrom, which the measure is intended 
to avoid1118 – seems to us to be in keeping with the idea derived from the meaning of the words 
"for" and "reasons" that in the measure’s design, structure and architecture there must be a 
rational relationship of cause and effect between the measure and the prudential reason for it. In this connection, we note that this is also, at least partially, the interpretation favoured by Panama. 
Certainly, Panama considers that the measures must have been taken for a "specific cause or 
reason". According to Panama, it is the prudential  nature of the measure taken by the respondent 
that should be the subject of the closest scrutin y by a panel in this phase of the examination.
1119 
7.890.  We do not agree with Panama’s interpretation that "prudential measures" should be 
transitional, provisional or short-term in nature1120 and therefore can remain in place only for as 
long as the factual circumstances that justified their adoption continue to exist.1121 Firstly, we 
recall that, as indicated earlier, the expression "prudential measures" does not appear as such in 
paragraph 2(a), since that paragraph refers to "measures for prudential reasons". Secondly, 
nothing in the ordinary meaning of the words "prudential reasons" conveys the idea of a time-limit, either for the reasons or for the measures. Finally, even if we were to accept that 
precautions are limited to situations of imminent danger, we cannot agree with Panama’s premise 
that the existence of "imminent" danger necessarily and solely calls for measures of a "transitional, provisional or short-term" nature.
1122 As a matter of principle, an "imminent" danger 
may give rise to long-lasting measures to avoid the recurrence of similar situations in the future. 
Therefore, in our opinion, the measures for pruden tial reasons envisaged in paragraph 2(a) of the 
Annex on Financial Services may be urgent measur es to confront an imminent risk, temporary or 
                                                                                                                                               
as:  "necessary" to protect public  morals or to maintain public  order; "necessa ry" to protect 
human, animal or plant life or health; or "nec essary" to ensure comp liance with laws or 
regulations that are not inconsistent with the agreement.  See United States’ response to Panel question No . 13 (referring to its response to advance Panel 
question No. 7, para. 14) (translated into Spanish by the WTO Secretariat). 
1113 See footnote 1109 above. 
1114 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. II, p. 1756. 
1115 Shorter Oxford English Dictionary , 6th edition, A. Stevenson (ed.) (Oxford University Press, 2007), 
p. 1010. 
1116 Dictionnaire de la Langue Française Le Petit Robert , (Dictionnaires Le Robert, 2000), p. 1959. 
1117 Argentina’s second written submission, para. 79. 
1118 Argentina’s second written submission, para. 89. 
1119 Panama’s response to Panel question No. 87.  
1120 Panama’s second written submission, para. 2.656. 
1121 Panama’s second written submission, para. 2.656. Panama bases these arguments on Articles 74.1, 
74.2 and 76.1 of the ICJ Rules of Court. 
1122 Panama’s second written submission, para. 2.656. WT/DS453/R 
 
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  provisional measures, or even permanent (or long-lasting) measures, which might be taken even 
in the absence of an imminent risk that would pr event fulfilment of one of the motives or reasons 
mentioned in that paragraph.1123 In our view, it is the nature of the situation that threatens a 
particular prudential objective that will dictate the nature of the measure. 
7.891.  Hence, it seems to us that the use of the word "for" in the phrase "measures for prudential 
reasons" denotes a rational relationship of cause and effect between the measure and the prudential reason. Thus, the Member taking the measure in question must demonstrate that in its 
design, structure or architecture there is a rational relationship of cause and effect between the 
measure it seeks to justify under paragraph 2(a) and the prudential reason provided. A central aspect of this rational relationship of cause and effect is the adequacy of the measure to the prudential reason, that is, whether the measure, through its design, structure and architecture, 
contributes to achieving the desired effect. Whether a measure has been taken "for prudential 
reasons", that is, whether there is a rational rela tionship of cause and effect between the measure 
and the reason, can only be determined on a case-by-case basis, taking account of the particular 
characteristics of each situation and each dispute. 
7.892.  We continue our analysis by examining whether Argentina has demonstrated that its 
measures 5 and 6 were taken for prudential reasons, that is, whether the reasons identified by 
Argentina qualify as "prudential" within the meaning of paragraph 2(a) of the Annex on Financial 
Services and, if so, whether there exists a rati onal relationship of cause and effect between 
measures 5 and 6 and their respective prudential reasons. We begin by examining measure 5. 
(c) Whether measure 5 was take n "for prudential reasons" 
7.893.  Argentina maintains that the prudential purpose for which measure 5 was taken was to 
protect the financial consumer, in its different variants, including insurance, from the distortions, manipulations and abusive situations that may arise precisely when the institution responsible for 
reinsuring a particular risk is not known, for lack of an effective exchange of information. 
According to Argentina, "[i]f the reinsurer is located in a non-cooperative jurisdiction, the Argentine authorities will not have access to information on, among other things, the effective 
ownership of the reinsurer, whether it is adequate ly capitalized, whether its sources of funds are 
legitimate, or whether there is any risk of the transaction being used to launder money. Thus, transactions of this type expose the insurance markets in Argentina to greater systemic risk."
1124 
According to Argentina, measure 5 responds to the need to preserve the integrity of the financial 
system insofar as the funds involved in many suspected money-laundering operations often come 
from countries which, precisely because they are non-cooperative for tax transparency purposes, draw a veil – intentionally or unintentionally – over information needed to carry out controls. 
Argentina argues that, where non-cooperative jurisdictions are concerned, it is impossible for the 
Argentine authority regulating securities to dete rmine whether the sources of funds are legitimate 
or whether the financial services supplier is subject to proper control and supervision by a 
regulatory body in its home jurisdiction. 
7.894.  Argentina claims that "another central aspect of a prudential measure has to do with its 
suitability for the purpose of prev enting the event, or the effect s resulting therefrom, which the 
measure is intended to avoid. In this respect, measure 5 is directly and specifically related to the 
need to preserve, as fittingly as possible, the soundness of the Argentine financial system".
1125 
Argentina explains that this is due to the import ance of the insurance sector – defined in broad 
terms and including companies operating in the reinsurance and retrocession segment – as the 
second largest institutional investor in the Argentine capital market.1126 Argentina explains that  
reinsurance and retrocession services enable the country’s insurers to transfer part of their 
                                               
1123 Moreover, we note that in other provisions of  the WTO Agreements, when the authors wanted to 
limit the scope of a provision to measures of a temporar y or urgent nature they di d so explicitly. Examples 
include Article XI:2(a) of the GATT 1994, which refers to "[E]xport prohibitions or restrictions temporarily applied" and Article XII of the GATT 1994, which in cludes expressions such as "imminent threat" 
(Article XII:2(a)), "parties … shall progressively relax [the application of restrictions under Article XII:2(a)] as such conditions improve … and shall eliminate the restrictions when conditions would no longer justify their institution or maintenance" (Article XII:2(b)). This provis ion, in its turn, specifies how to proceed "[i]f there is 
a persistent and widespread  application of import re strictions under this Article" (Article XII:5). 
1124 Argentina’s second written submission, para. 88. 
1125 Argentina’s second written submission, para. 89. 
1126 Argentina’s second written submission, para. 89. WT/DS453/R 
 
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  portfolio risk to third parties located in Argentina or abroad, thus freeing up additional capital to 
finance more insurance policies in Argentina. However, in the event of the insolvency or failure of a foreign reinsurer, the insured party in Argentina would be unable to collect its claim against that reinsurer, but would continue to be responsible for paying out claims under the original insurance 
contract. Therefore, the failure of the foreign re insurer presupposes an additional burden on the 
financial capacity of the original insurer, which in turn could lead to the failure of the original insurer and thus produce a "domino effect" on the Argentine insurance market.
1127 For this reason, 
the Argentine authority – SSN – has not only to protect the fiduciary relationship between the 
reinsurance company and the policy holders but also to preserve the soundness of the system, so as to ensure appropriate conditions for safeguarding insurance contracts and the fiduciary relationship between the companies and the policy holders.
1128 
7.895.  Argentina claims that measure 5 is duly proportional to the objective pursued.1129 
According to Argentina, in the recitals of SSN Resolution No. 35.615/2011 themselves it is expressly stated "[t]hat, on the basis of the expe rience accumulated, it has been found necessary 
to upgrade the control mechanisms designed to ensure the necessary solvency of insurers and 
reinsurers operating within the national territory and, moreover, the fairness and technical reasonableness of the respective contract conditions". Argentina points out that the regulations 
establish additional requirements, which compensate for the lack of direct and effective access to 
information.
1130 
7.896.  Panama replies that Argentina has not explained why its measure should be considered to 
have been taken "for prudential reasons". According to Panama, although Argentina maintains that 
its measure pursues the objective  of "safeguarding the financial consumer" and responds to the 
need "to preserve the integrity of the financial system", the vague and extremely general references to "distortions, manipulations and abusive situations" suffered by consumers and to 
"many suspected money-laundering operations" are far from constituting an adequate explanation 
of the specific risks that Argentina seeks to avoid by means of the measure relating to reinsurance services. Panama maintains that the mere assertion that a measure has been taken to protect 
consumers and the financial system cannot suffice to show that it is in fact a prudential 
measure.
1131 In Panama’s opinion, Argentina should have explained, for example, what would be 
the specific risk or risks to which the Argentine consumers would be exposed by contracting for reinsurance services with non-cooperative country suppliers, or what systemic risk created by non-
cooperative country reinsurers could affect the stability of the Argentine financial system, or how 
the imposition of "additional requirements" on  non-cooperative country reinsurers could be 
considered to be a measure designed to deal with and "mitigate the [existing] risks" by preventing 
them from materializing.
1132  
7.897.  Panama also doubts whether the necessary solvency of the reinsurance companies could 
be ensured by the existence of an agreement or memorandum of understanding between two 
government agencies. Panama does not understand how the risk that the Argentine consumer 
might not receive the agreed coverage because of the reinsurance company’s lack of funds is in any way forestalled or mitigated by the SSN’s ability to contact ex post facto  its counterpart in 
another jurisdiction once the risk has materialized. For Panama, to avoid the risk of insolvency 
ex ante, it is not necessary or effective to discriminate between reinsurance companies on the 
basis of their origin or impose conditions on the official counterparts of the SSN. According to Panama, what would be effective would be to apply control measures or impose minimum capital 
requirements on every reinsurance company, regardless of its origin.
1133 
7.898.  For the purpose of determining whether measure 5 was taken "for prudential reasons", the 
Panel will proceed in two stages. First, we will analyse whether the reasons identified by Argentina 
with respect to measure 5 are "prudential" within  the meaning of paragraph 2(a) of the Annex on 
Financial Services. That is to say, whether the issue is one of "causes" or "reasons" that prompt the regulatory authorities of the insurance sector to act to forestall a risk, injury or danger which, as previously mentioned, does not have to be imminent. If we find that there are "prudential 
                                               
1127 Argentina’s second written submission, para. 87. 
1128 Argentina’s second written submission, para. 90. 
1129 Argentina’s first written submission, para. 568. 
1130 Argentina’s first written submission, para. 568. 
1131 Panama’s second written submission, paras. 2.676 and 2.677. 
1132 Panama’s second written submission, para. 2.677. 
1133 Panama’s second written submission, para. 2.678. WT/DS453/R 
 
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  reasons", the next step will be to analyse whethe r the measure was taken "for" the said prudential 
reasons, that is, whether there exists a rational relationship of cause and effect between measure 5 and the prudential reasons identified by Argentina. 
(i) Whether the reasons identified by Argentina are "prudential" within the 
meaning of paragraph 2(a) of th e Annex on Financial Services 
7.899.  We recall that Argentina has identified the following prudential reasons for adopting 
measure 5, namely: as a precaution to protect the insured; to ensure the solvency of insurers and 
reinsurers; to guard against the systemic risk that might arise as a result of the insolvency and 
failure of reinsurance companies and lead to the collapse of direct insurance companies; and to guarantee the integrity of the market.
1134 
7.900.  We note first of all that, as Argentina points out, the recitals of SSN Resolution 
No. 35.615/2011 mention among its objectives the need to upgrade "the control mechanisms 
designed to ensure the necessary solvency of insu rers and reinsurers operating within the national 
territory and, moreover, the fairness and technical reasonableness of the respective contract 
conditions".1135  
7.901.  We also note that, as argued by Argent ina, reinsurance services  are vital for the smooth 
functioning of the insurance market.1136 In a document entitled "General Solvency Criteria. 
Reinsurance Operations", the Association of Latin American Insurance Supervisors (ASSAL) states 
that "[r]einsurance is an essential part of the insurance industry since, from a technical point of view, it enables the institutions to spread their risks adequately and, from a financial point of view, it expands their ability to underwrite risks by limiting their potential losses, particularly where the 
risks are high."
1137 Moreover, as is also argued by Argentin a, ensuring the solvency of the insurers 
and reinsurers is a sine qua non  condition for ensuring financial stability and preventing systemic 
risk.1138 This is confirmed by ASSAL, which points out that "in planning its surveillance activities 
the supervisory authority for the insurance industry should always pay due attention to the 
solvency and liquidity of the institutions".1139 ASSAL also explains that an insurance institution is 
exposed to solvency problems due to "[t]he foreign reinsurers to which it cedes risks: depending 
on their quality or 'security', it is feasible for them to encounter problems stemming from the 
failure to fulfil these transferred responsibilities, for which, in general, they lack the backing of 
technical reserves or minimu m liable equity capital".1140 
7.902.  Moreover, in a 2009 document of the Inte rnational Association of Insurance Supervisors, 
entitled "Systemic Risk and the Insurance Sector", it is indicated that "[s]ystemic risk may arise in 
the insurance sector when insurance market capacity declines or disappears. It could be caused by, for example, the failure of one or more in surers or by the withdrawal of insurance or 
reinsurance cover."
1141  Further on, in the same document, it is explained that one source of an 
insurance failure could be via reinsurance exposure: "A sudden failure of a reinsurer may cause direct insurers to lose protection for lines of direct insurance and thus come under financial 
stress."
1142  
7.903.  We note that Argentina makes a similar argument, pointing out that SSN Resolution 
No. 35.615/2011 is part of a series of "actions and measures taken to avoid reinsurer insolvency, 
                                               
1134 Argentina’s first written submission, para. 563; and second written submission, paras. 86-90. 
1135 Argentina’s first written submission, para. 568, and Exhibits PAN-36 / ARG-27. 
1136 Argentina’s second written submission, para. 87. 
1137 Association of Latin American Insurance Supe rvisors (ASSAL), General solvency criteria – 
Reinsurance operations, August 1999, (Exhibit ARG-88), para. 1. 
1138 Argentina’s second written submission, para. 87. 
1139 ASSAL, General solvency criteria – Reinsura nce operations, (Exhib it ARG-88), para. 16. 
1140 ASSAL, General solvency criteria – Reinsuranc e operations, (Exhibit ARG-88), para. 18(a). 
1141 See International Associatio n of Insurance Supervisors, Systemic Risk and the Insurance Sector , 
25 October 2009, (Exhibit ARG-140), para. 16 (exhibit provided in English and translated into Spanish by the WTO Secretariat). 
1142 See International Associatio n of Insurance Supervisors, Systemic Risk and the Insurance Sector , 
25 October 2009, (Exhibit ARG-140), para. 20 (exhibit provided in English and translated into Spanish by the WTO Secretariat). WT/DS453/R 
 
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  it being understood that the failure of an entity would affect the stability of the direct insurers and, 
in general, the insured and the injured parties".1143  
7.904.  In our view, in the light of the argume nts and evidence presented above, the reasons 
identified by Argentina with respect to measure 5 – to protect the insured, to ensure the solvency 
of insurers and reinsurers, and to avoid the possible  systemic risk of the insolvency and failure of 
direct insurance companies – are prudential in nature and in conformity with our interpretation of the expression "prudential reasons" in paragraph 2(a) of the Annex on Financial Services.  
7.905.  It remains to determine whether measure 5 was taken "for" these prudential reasons, that 
is, as we previously indicated, whether there is a rational relationship of cause and effect between the measure and these prudential reasons. We recall that a central aspect of this rational relationship of cause and effect is the adequacy of the measure to the prudential reason, that is, 
whether the measure contributes to achieving the desired effect. 
(ii) Whether measure 5 was taken for the prudential reasons identified by 
Argentina  
7.906.  As described in section 2.3.6 above, measur e 5 consists of the imposition of requirements 
on non-cooperative country service suppliers in order for them to be able to gain access to the Argentine reinsurance services market. Argentina maintains this measure under points 18 and 
20(f) of Annex I to SSN Resolution No. 35.615/2011.  
7.907.  According to the actual wording of tw o of the provisions under which measure 5 is 
maintained (paragraphs 18 and 20(f) of Annex I to SSN Resolution No. 35.615/2011 as amended 
by SSN Resolution No. 38.284/2014), Argentina imposes different treatment on reinsurance 
service providers depending on whether or not they  are established and registered in cooperative 
countries. Thus, if a foreign company is unable to show that it or its parent company is established and registered in a cooperative country, it must be shown that: (i) the foreign company or its 
parent company is subject to control and supervisio n by a body that performs functions similar to 
those of the SSN; and (ii) that the body in ques tion has signed a memorandum of understanding 
on cooperation and information exchange with the SSN. 
7.908.  It will be recalled that the conditions under which a country is considered to be 
"cooperative for tax transparency purposes " are laid down in Decree No. 589/2013. As explained in section 2.2 above, Decree No. 589/2013 establishes the following conditions for a country to be considered cooperative, namely: (i) to have signed with Argentina a tax information exchange 
agreement or an international double taxation convention with a broad information exchange 
clause, provided that the information is effectively exchanged; or (ii) to have initiated with Argentina the negotiations necessary for concluding such an agreement and/or convention.
1144 If 
neither of these requirements is met, the country is deemed to be non-cooperative.1145 
7.909.  At the beginning of our analysis, we expressed agreement with Argentina that a crisis in 
the insurance and reinsurance sector involving a loss of insurance or reinsurance capacity might 
occur within a short period of time and harm financial stability and the real economy.1146 As we 
                                               
1143 Argentina’s first written submission, para. 459. 
1144 Article 1 of Decree No. 589/2013, (Exhibit PAN-3 / ARG-35). 
1145 We note, however, that AFIP Resolution No. 3. 576/2013, "adopted in exercise of the powers 
conferred by Article 2(b) of Decree No. 589" exhibits slight differences in comparison with Decree No. 589/2013. On the one hand, Article 1 of this Resolution establishes three categories of cooperative country: "(a) cooperative countries which have signed a double taxation convention or information exchange 
agreement, with a positive assessment of effective exchange of info rmation; (b) cooperative countries with 
which a double taxation convention or information exch ange agreement has been si gned but it has not been 
possible to assess effective exchange; and (c) cooperativ e countries with which the process of negotiating or 
ratifying a double taxation convention or information exchange agreement has been initiated". We also note 
that the third category refers to initiation of the negotiation or ratification process, whereas Decree 
No. 589/2013 refers only to negotiation. See AFIP Resolution No. 3.576/2013, (Exhibits PAN-3 / ARG-37). 
1146 Argentina’s response to Pane l question No. 85, para. 22. WT/DS453/R 
 
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  saw above, the International Association of Insu rance Supervisors (IAIS) has expressed a similar 
view.1147  
7.910.  As this Panel has already stated1148, measures taken "for prudential reasons" include those 
that seek to look ahead and make the necessary arrangements in advance to achieve a certain 
prudential objective in the financial sector. In this respect, it seems to us that requesting relevant 
information from the regulatory authorities of other jurisdictions forms part of measures intended to look ahead and make the arrangements necessary to achieve a certain prudential objective in 
the financial sector, in this case to ensure the solvency of insurers and reinsurers and avoid the 
systemic risk that could arise from the insolvency and failure of direct insurance companies, as is 
argued by Argentina. In our view, having adequa te and timely information concerning the foreign 
reinsurance company is fundamental for the purpose of anticipating crises or systemic risks which, 
as we have seen, could be incubating in an imperceptible manner over time and suddenly erupt. 
Viewed from this standpoint, we understand the reasoning behind the requirement of information 
exchange between insurance supervisors in points 18(a) and 20(f) I) of Annex I to SSN Resolution 
No. 35.615/2011, which we find perfectly valid.  
7.911.  Nevertheless, as stated above, a central aspect of the rational relationship of cause and 
effect is the adequacy of the measure to the prudential reason, that is to say, whether the 
measure, through its design, structure and architecture, contributes to achieving the desired 
effect. We will consid er this aspect next. 
7.912.  We begin by noting that the determination as to who is "cooperative" and who is 
"non-cooperative" is made by applying Decree No. 589/2013. Decree No. 589/2013 establishes the 
conditions for a country to be considered cooperative, namely: (i) to have signed with Argentina a 
tax information exchange agreement or an international double taxation convention with a broad information exchange clause, provided that the information is effectively exchanged; or (ii) to 
have initiated with Argentina the negotiations necessary for concluding such an agreement and/or 
convention.
1149 If neither of these requirements is met, the country is deemed to be non-
cooperative.1150 
7.913.  In other words, Decree No. 589/2013 serves to determine not only those that are 
cooperative and exchange information but also, by default, those that are "non-cooperative" and whose companies will be required, under the second  paragraphs of points 18(a) and 20(f) I), to 
show that they are subject to control and supe rvision by a body: (i) which performs functions 
similar to those of the SSN, and (ii) with which the SSN has signed a memorandum of 
understanding on cooperation and information exchange. It is in the mechanism under Decree No. 589/2013 for determining who is cooperative and who is non-cooperative that we see, 
as explained below, a crucial problem. 
7.914.  Decree No. 589/2013 also authorizes the AFIP to "draw up a list of the countries, 
dominions, jurisdictions, territories, associate States and special tax regimes considered 
cooperative for tax transparency purposes, to pu blish it on its websit e (http://www.afip.gob.ar) 
and to keep that publication up to date". In fact, this list has practical effects. In the case of measure 5, inclusion in the list enables a reinsurance company of the country concerned automatically to meet the first requirement laid down in points 18(a) and 20(f) I) of Annex I to 
SSN Resolution No. 35.615/2011.  
7.915.  We note that the first criterion of Decree No. 589/2013 stipulates that, for a country to be 
considered a cooperative country, it must have signed with Argentina a tax information exchange 
agreement or an international double taxation convention with a broad exchange-of-information 
clause, provided that the information is effectiv ely exchanged. We also note that the Global 
Forum’s Standard C.1.8 in the section "Exchanging Information – Essential Elements" states that 
"[e]xchange of information mechanisms should provide for effective exchange of information and 
                                               
1147 See International Associatio n of Insurance Supervisors, Systemic Risk and the Insurance Sector , 
25 October 2009, (Exhibit ARG-140), para. 25 (exhibit provided in English and translated into Spanish by the WTO Secretariat). 
1148 See paragraphs 7.867 and 7.879 above . 
1149 Article 1 of Decree No. 589/2013, (Exhibits PAN-3 / ARG-35). 
1150 See footnote 1145 above. WT/DS453/R 
 
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  should … be in force; where agreements have been signed, jurisdictions must take all steps 
necessary to bring them into force expeditiously".1151  
7.916.  However, we note that, in the case of the criterion relating to the initiation of the 
negotiation of a double taxation convention or an information exchange agreement, there is no 
formal mechanism for the effective exchange of information between Argentina and the country 
with which it is negotiating. Argentina nonetheless grants cooperative country status to countries that are in the negotiating process, with respect to which it does not have access to tax 
information given that there is as yet no agreement or convention in place. Leaving aside the 
dispute between the parties as to whether Panama met this requirement and did, in fact, initiate negotiations
1152, this would be the case of Panama, for example, which Argentina considers to be a 
cooperative country, even though it has not signed any of the agreements provided for in 
Decree No. 589/2013.1153 This means that jurisdictions with which Argentina is in the process of 
negotiating tax information exchange agreements are considered cooperative despite the fact that Argentina continues to have no access to tax information, the exchange of which is the raison 
d’être  of its defensive measures. 
7.917.  The situation between Panama and Argentin a illustrates the consequences of using this 
criterion. As Argentina explains, Panama was included "as from 1 January 2014 as a 'cooperative 
country for tax transparency purposes' und er Decree No. 589/2013 and AFIP Resolution 
No. [3576]/2013, after negotiations to conclude an agreement on the exchange of information for tax purposes had been initiated as from November 2013 … ".
1154 That is to say that, up until 31 
December 2013, Argentina regarded Panama as a "non-cooperative" country. From 25 March 
2014,1155 by virtue of Panama’s inclusion in the list of cooperative countries from 1 January 2014, 
simply because Argentina considered that negotiations had been initiated, reinsurance companies established and registered in Panama were considered to be in compliance with the first of the 
requirements laid down by points 18(a) and 20(f) I) of Annex I to SSN Resolution 
No. 35.615/2011. In both cases, that is, both before 31 December 2013 and after 31 December 
2013, Panama did not exchange any kind of tax information with Argentina, as follows from 
Panama’s constant refusal during these proceedings to consider that it had initiated negotiations or 
that it intended to open negotiations with Argentina for the purposes of signing a tax information exchange agreement.
1156  
7.918.  Moreover, the use of this criterion of initia tion of negotiations (but without the existence of 
a formal agreement or effective information exchan ge), together with the periodicity with which 
the list of cooperative countries is updated, crea tes other problems. According to Argentina, this 
list is updated annually at the beginning of the fiscal year. At the time of distribution of this report 
to the parties, the list of countries that Argentina considers to be cooperative continues to be the 
one published on the AFIP web page on 1 January 2014. Panama, which, according to Argentina, initiated negotiations with Argentina in November 2013, is on the list of cooperative countries. 
However, other jurisdictions (Belarus, Cameroon, Côte d'Ivoire, Cyprus, Gabon, Gibraltar and 
Hong Kong (China)) with which Argentina initiated negotiations in the course of 2014
1157, still do 
not have the status of cooperative countries. In other words, these jurisdictions are in the same situation as Panama – they are negotiating, according to Argentina, but presumably not 
                                               
1151 See Global Forum, Terms of Reference  (2010), (Exhibit ARG-40), p. 8 (exhibit provided in English 
and translated into Spanish by the WTO Secretariat). 
1152 We recall that Panama maintains that it never initiated negotiations with Argentina, whereas 
Argentina asserts that these negotiations began in No vember 2013. See Panama’s response to Panel question 
No. 7(a); and Argentina’s response  to Panel question No. 10(c). 
1153 In this connection, it should be pointed out that the parties disagree as to whether negotiations on a 
double taxation convention or information exchange agreement were initiated. Whereas Argentina considers 
that the negotiations began in November 2013, Panama claims that these negotiations were never initiated. See Panama’s response to Panel question No. 7 and Ar gentina’s first written submission, paras. 131 and 132. 
1154 Argentina’s response to Panel qu estion No. 10(c) and (d), p. 21. 
1155 As previously mentioned, points 18 and 20(f) of SSN Resolution No. 35.615/2011 were amended by 
SSN Resolution No. 38.284/2014, which entered into force on 25 March 2014. Points 18 and 20(f) of Annex I to SSN Resolution No. 35.615/2011, as worded prior to the amendment of March 2014, established prohibitions on the supply of reinsurance services by  suppliers from non-cooperative countries via modes 1 and 
3. The amendment introduced by SSN Resolution No. 38.284/2014 eliminated that prohibition and made the supply of reinsurance services by suppliers from non-c ooperative countries conditiona l upon the satisfaction of 
certain requirements. See paras. 2.25-2.33 above. 
1156 Panama’s response to Pane l question No. 7, p. 12. 
1157 Argentina’s response to Panel question No. 10(b)(i), p. 21. WT/DS453/R 
 
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  exchanging information. However, given that Panama was included in the list, Panamanian 
reinsurance companies are treated differently, for the purposes of measure 5, from reinsurance 
companies established and registered in any of the other jurisdictions mentioned.  
7.919.  In view of the foregoing, we consider that measure 5, and in particular the fact that 
Argentina does not require relevant information from the insurance regulators of jurisdictions 
which are officially cooperative but have not concluded an information exchange agreement or effectively exchanged information, does not have a rational relationship of cause and effect with 
the prudential reasons identified by Argentina. 
7.920.  Hence we conclude that Argentina has not demonstrated that measure 5 was taken for 
prudential reasons within the meaning of paragraph 2(a) of the Annex on Financial Services.  
(d) Whether measure 6 was take n "for prudential reasons" 
7.921.  Argentina argues that measure 6 is intended to protect investors from the distortions, 
manipulations and abusive situations that occur when the beneficial owner of the securities operation is unknown for lack of an effective exchange of information
1158, and to preserve the 
integrity and smooth functioning of the Argentine capital market.1159 According to Argentina, 
securities operations with non-cooperative jurisdictions expose the Argentine financial market to increased risk of systemic failure, since in transactions of this kind the Argentine regulator is 
unable to obtain access to information about the effective ownership of the party ordering the 
transaction and the legitimacy of the source of its funds, and neither can it know whether the foreign entity is subject to appropriate supervision in its home jurisdiction. For this reason, Argentina maintains that securities transactions with entities located in non-cooperative 
jurisdictions pose risks which may not be present in transactions with entities located in 
cooperative jurisdictions, including risks of money laundering, tax evasion and non-payment for securities operations.
1160  
7.922.  Argentina argues that seeking transparen cy and knowledge of the beneficial owner of 
foreign legal persons is one of the ways of combating the above-mentioned threats. According to Argentina, this is why the FATF recommends that countries adopt measures to prevent the misuse 
of legal persons for money laundering or terrorist financing. Argentina maintains that countries 
should ensure that there is adequate, accurate an d timely information on the beneficial ownership 
and the control of legal persons that the competent authorities can obtain or have access to in a timely fashion.
1161  
7.923.  Argentina explains that prominent among the "preventive measures" that countries should 
impose on their financial institutions to achieve these various objectives are those relating to "customer due diligence", namely:
1162 identifying the customer and verifying the customer’s 
identity; identifying the beneficial owner and the ownership and control structure of the customer; 
and conducting ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the duration of that relationship to ensure that the transactions being 
conducted are consistent with the institution’s knowledge of the customer and their business and 
risk profile, including, where necessary, the source  of funds. Argentina argues that the purpose of 
these due diligence measures is twofold: first, to prevent the unlawful use of legal persons and 
other legal structures, by gaining a sufficient understanding of the customer to be able to properly 
assess the potential money laundering and terrorist financing risks associated with the business 
relationship; and second, to take appropriate steps to mitigate the risks.
1163 
7.924.  According to Argentina, in the case of transactions ordered by persons from non-
cooperative countries, as a consequence of the lack  of a tax information exchange agreement with 
Argentina or a memorandum of understanding on cooperation and information exchange with the 
CNV, it is impossible to ensure compliance with  any of the above-mentioned preventive measures. 
                                               
1158 Argentina’s first written submission, paras. 564-566. 
1159 Argentina’s first written submission, para. 562. 
1160 Argentina’s second written submission, para. 92. 
1161 Argentina’s response to Panel question No. 85( b), para. 11. See also the FATF Recommendations, 
(Exhibit ARG-25), Recommendations 24 and 25. 
1162 FATF, Recommendations, (Exhibit ARG-25), Recommendation 10. 
1163 FATF, Recommendations, (Exhibit ARG-25), Inte rpretive Note to Reco mmendation 10, p. 64. WT/DS453/R 
 
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  Likewise according to Argentina, in the case of non-cooperative countries, neither the stock market 
intermediaries (nor the CNV or any other government  agency) are assured of being able to identify 
the customer or the beneficial owner ordering the transactions, or who it is that stands behind them, as in the case of the customers of investment portfolio managers.
1164 Argentina points out 
that FATF Recommendation 10 itself explicitly states that if the financial institution is unable to 
comply with the due diligence measures in question it should not perform the requested transaction: 
Where the financial institution is unable to comply with the [customer due diligence 
measures] … it should be required not to open the account, commence business 
relations or perform the transaction; or shou ld be required to terminate the business 
relationship; and should consider making a suspicious transactions report in relation 
to the customer.1165 
7.925.  Argentina explains that the FATF methodology for assessing compliance with the said 
recommendation, established in 2013, reiterates the same requirement not to perform the 
transaction when the customer and/or beneficial owner and the ownership and control structure 
cannot be identified.1166 In this respect, the regulations of the CNV could not be more in keeping 
with what is required by the FATF. It is the international standards themselves which stipulate 
that, as a prudential measure, the institution should "not … perform the transaction", thus 
reinforcing compliance with the recommendation of the International Organization of Securities Commissions (IOSCO) to establish policies and procedures intended to minimize the risk of 
intermediaries being used as vehicles for money laundering. In questioning measures of this kind, 
Panama’s claim clashes head-on with the international efforts to safeguard the integrity of the 
financial system against the risks that stem from money laundering and with prudential regulation in general. 
7.926.  Argentina argues that IOSCO’s principles include one that calls on different jurisdictions to 
establish information exchange mechanisms that specify when and how to exchange public and non-public information with their domestic and foreign counterparts, which is precluded in the case 
of countries that do not comply with these international standards.
1167 According to Argentina, 
information exchange agreements are strongly recommended by IOSCO, which points out that 
such agreements make it possible to assist foreign regulators when evidence of a possible violation of the regulations lies outside th eir jurisdiction. According to Arge ntina, without such agreements, 
regulators such as the CNV lack the tools to carry out their regulatory tasks. Argentina cites the 
following paragraph from an IOSCO document: 
Securities regulators have long used information-sharing arrangements, typically 
known as memoranda of understanding or MOUs, to facilitate consultation, 
cooperation and the exchange of informatio n in securities enforcement matters. These 
enforcement MOUs permit regulators who suspect there has been a violation of their 
laws … to seek ad hoc assistance from their overseas counterparts when evidence of 
the possible violation may lie outside their jurisdictions.
1168  
7.927.  Argentina argues that, in accordance with international standards, countries should ensure 
that competent authorities such as the CNV can rapidly, constructively and effectively provide the 
widest range of international cooperation in relation to money laundering, associated predicate 
                                               
1164 Argentina’s response to Pane l question No. 85(b), para. 15. 
1165 Argentina’s response to Panel question No. 85(b) , para. 16 (referring to FATF Recommendations, 
(Exhibit ARG-25), Recommendation 10, p. [16]) (emphasis original). 
1166 Argentina’s response to Panel question No. 85(b) , para. 17 (referring to FATF, "Methodology for 
assessing technical compliance with the FATF Recommendations and the effectiveness of AML/CFT systems", 2013, p. 44, viewed at http://www.fatf-
gafi.org/media/fatf/documents/methodology/FATF%20Methodology%2022%20Feb%202013.pdf : "Where a 
financial institution is unable to comply with relevant CDD measures: (a) it should be required not to open the 
account, commence business relation s or perform the transaction; or sh ould be required to terminate the 
business relationship." 
1167 Argentina’s first written submission, para. 530. 
1168 See Argentina's response to Panel question  No. 85(b), para. 19 (referring to IOSCO, Principles 
Regarding Cross-Border Supervisory Cooperation – Final Report , May 2010, p. 31. 
http://www.iosco.org/library/pubdocs/pdf/IOSCOPD322.pdf ) (exhibit provided in English and translated into 
Spanish by the WTO Secretariat). WT/DS453/R 
 
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  offences and terrorist financing. Argentina explains that countries should do so both spontaneously 
and upon request and that there should be a legal basis for providing cooperation. According to Argentina, FATF’s international recommendations in this respect are very clear and encourage countries to negotiate and sign memoranda of understanding with their foreign counterparts:
1169 
Should a competent authority need bilateral or multilateral agreements or 
arrangements, such as a Memorandum of Understanding (MOU), these should be 
negotiated and signed in a timely way with the widest range of foreign 
counterparts.1170  
7.928.  Panama argues that, since Argentina has sought to justify the restrictions on the 
reinsurance and capital markets concurrently under the prudential exception, its justification of the discriminatory measure affecting access to the Argentine capital market suffers from the same 
defects that Panama has already identified with respect to the measure relating to reinsurance 
services.
1171 According to Panama, the general references to "distortions, manipulations and 
abusive situations" suffered by consumers or to "many suspected money laundering operations" do 
not suffice clearly and understandably to explain the nature of the specific risks that Argentina 
seeks to guard against by means of the measure,  which discriminates between portfolio managers 
of different origins.1172  
7.929.  According to Panama, Argentina had a duty to explain what would be the specific risk to 
which Argentine consumers would be exposed by contracting for the services of an investment portfolio manager of some non-cooperative country, and how the imposition of the conditions envisaged in the CNV’s Rules is a measure designed to take into account and "mitigate the risks" 
created by managers of non-cooperative countries. According to Panama, Argentina has not 
explained how the alleged risks for consumers and the financial system in general can be prevented or guarded against ex ante  by imposing conditions not on the asset managers or the 
banking entities that operate in the Argentine market but on their governments.
1173  
7.930.  According to Panama, even if the Panel we re to consider that the prudential exception 
applies to the Argentine measure relating to the access of foreign portfolio managers to the 
securities market, paragraph 2(b) of the Annex on Financial Services of the GATS would not 
appear to allow measures such as those that Argentina seeks to impose.1174 For Panama, the aim 
of the Argentine measure is precisely to force other Members to disclose information to the Argentine Government, by making access of foreign portfolio managers to the Argentine market 
conditional on the negotiation and signat ure of information exchange agreements.
1175 Panama 
considers that the exception in paragraph 2(a) of the Annex on Financial Services of the GATS, when read in the light of paragraph 2(b), in no way makes it possible to justify measures of this 
kind.
1176 Panama therefore considers that Argentina has failed to meet its burden of proving that 
the measure relating to access to the Argentine capital market was taken "for prudential reasons" within the meaning of paragraph 2(a) of the Annex on Financial Services of the GATS.
1177  
(i) Whether the reasons identified by Argentina are "prudential" within the 
meaning of paragraph 2(a) of th e Annex on Financial Services 
7.931.  As with measure 5, for the purpose of determining whether measure 6 was taken "for 
prudential reasons", the Panel will proceed in two stages. First, we will analyse whether the 
reasons identified by Argentina with respect to measure 6 are "prudential" within the meaning of 
paragraph 2(a) of the Annex on Financial Services. That is to say, whether they are "causes" that motivate the financial sector regulators to act to prevent a risk, injury or danger which, as we 
have already said, does not have to be immine nt. If we determine that there are "prudential 
reasons", then, as the next step, we will analyse whether the measure was taken "for" those 
                                               
1169 Argentina’s response to Pane l question No. 85(b), para. 20. 
1170 See FATF, Recommendations, (Exhibit ARG-25), Recommendation 40, p. 31. 
1171 Panama’s second written submission, para. 2.714. 
1172 Panama’s second written submission, para. 2.714. 
1173 Panama’s second written submission, para. 2.715. 
1174 Panama’s second written submission, para. 2.716. 
1175 Panama’s second written submission, para. 2.716. 
1176 Panama’s second written submission, para. 2.716. 
1177 Panama’s second written submission, para. 2.717. WT/DS453/R 
 
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  prudential reasons, i.e., whether there is a rati onal relationship of cause and effect between 
measure 6 and the prudential reasons identified by Argentina. 
7.932.  We begin our analysis by noting that measure 6 forms part of the New Text of the CNV’s 
Rules (N.T. 2013) issued by the CNV under the regula tory powers conferred on it by Article 155 of 
Law No. 26.831 on the Capital Market, enacted on 27 December 2012.1178 This Law is regulated by 
N.T. 2013. Among the objectives of the Capital Market  Law, its first article mentions the following: 
"To strengthen the mechanisms for protecting and preventing abuses against small investors, 
within the framework of the protective function of consumer law". In our view, this objective 
relates specifically to investor protection (within the framework of the consumer protection function), as argued by Argentina.  
7.933.  Moreover, we note that Article 39 of the Capital Market Law, in dealing with negotiable 
securities trading systems, imposes upon them the obligation to "ensure the full effectiveness of 
the principles of investor protection, fairness, efficiency, transparency, non-fragmentation and reduction of systemic risk".
1179 All these objectives and principles are, in this Panel’s opinion, 
prudential reasons that may fall within the framework of paragraph 2(a) of the Annex on Financial 
Services.  
7.934.  We also note that the Capital Market Law empowers the CNV not only to regulate, 
supervise, inspect, monitor and sanction all persons that engage in activities related to the public 
offering of negotiable securities, but also to issue regulations for preventing money laundering and terrorist financing, which therefore appear, in this Panel’s opinion, to be additional prudential reasons that should inform the regulatory provisions of the Law.
1180 It is in this context that, in our 
opinion, Title XI of N.T. 2013, which heads measure 6 and is entitled "Prevention of Money 
Laundering and Terrorist Financing", should be understood. In our view, this confirms the Argentine argument that the prudential reasons of measure 6 include the prevention of money 
laundering and terrorist financing.
1181  
7.935.   The Panel also agrees with Argentina that the prevention of money laundering and 
terrorist financing strengthens the integrity and stability of the financial system. Argentina cites 
the International Monetary Fund (IMF), which considers that money laundering and terrorist 
financing can undermine the integrity and stability of the financial system and its institutions and destabilize a country’s finances and macroeconomy and, ultimately, global financial stability.
1182 As 
the IMF points out, the prevention of money la undering and terrorist financing strengthens the 
integrity of the financial system and macroeconomic stability at both national and international 
level.1183 According to Argentina, prominent among the numerous international initiatives adopted 
                                               
1178 Law No. 26.831 on the Capital Market of 27 December 2012 (Capital Market Law), 
(Exhibits PAN-48 / ARG-49). 
1179 Capital Market Law, (Exhibits PAN-48 / ARG-49). 
1180 See Article 19 of the Capital Market Law, in pa rticular its paragraphs (a), (c), (d) and (p), 
(Exhibits PAN-48 / ARG-49). 
1181 Argentina’s response to Pane l question No. 85(b), para. 21. 
1182 Argentina’s response to Panel question No. 85(b) , para. 7 (reproducing the following passage from 
an IMF publication):  
The international community has made the fight against money laundering and terrorist financing a priority. The IMF is especially concerned abou t the possible consequences money laundering, 
terrorist financing, and related cr imes have on the integrity and stability of the financial sector 
and the broader economy. These activities can undermine the integrity and stability of financial institutions and systems, discourage foreign investment, and distort international capital flows. They may have negative consequences for a co untry’s financial stability and macroeconomic 
performance, resulting in welfare losses, draini ng resources from more productive economic 
activities, and even have destabilizing spillover effects on the economies of other countries. In an increasingly interconnected world,  the negative effects of these activities are global, and their 
impact on the financial integrity and stability of countries is widely recognized … Strong AML/CFT 
[anti-money laundering and combating the financing of terrorism] regimes enhance financial sector integrity and stability, whic h in turn facilitate countries’ integration into the global financial 
system. They also strengthen governance and fi scal administration. The integrity of national 
financial systems is essential to financial sector and macroeconomic stability both at the national 
and international levels.  See IMF, "The IMF and the Fight Against Money Laundering and the Financing of Terrorism", 
5 September 2014 (English text available at: http://www.imf.org/external/np/exr/facts/aml.htm). 
1183 Argentina’s response to Panel question No. 85(b), para. 8 (where Argentina reproduces the following 
excerpt from an IMF publication in English): "Stron g AML/CFT [anti-money laun dering and combating the WT/DS453/R 
 
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  in pursuit of these objectives is the Financial Action Task Force  (FATF), which is recognized as the 
body primarily responsible for developing global standards for combating money laundering and terrorist financing.
1184 We find these arguments, as well as the IMF's assessment, convincing.  
7.936.  Moreover, as Argentina explains, the exchange of information is an objective promoted by 
the international community, within the contex t of the FATF and IOSCO, among others. The 
recommendations emanating from these organizations are aimed at preventing and/or discouraging commercial transactions when the customer or beneficial owner ordering the 
transactions, or those behind them, cannot be identified, as in the case of the customers of 
investment portfolio managers. In our view, it is  not necessary to reiterate Argentina’s arguments 
in this respect, which we find convincing.
1185  
7.937.  In our view, in the light of the argume nts and evidence submitted by Argentina, the 
reasons for measure 6, including investor protection, the reduction of systemic risk, and the 
prevention of money laundering and terrorist financing offences, are prudential in nature and in conformity with our interpretation of the expressi on "prudential reasons" in paragraph 2(a) of the 
Annex on Financial Services.  
7.938.  It remains to be determined whether meas ure 6 was taken "for" these prudential reasons, 
that is, as indicated above, whether the measure has a rational relationship of cause and effect 
with these prudential reasons. We recall that a central aspect of this rational relationship of cause 
and effect is the adequacy of the measure to the prudential reason, that is, whether the measure contributes to achieving the desired effect. 
(ii) Whether measure 6 was taken for the prudential reasons identified by 
Argentina  
7.939.  As we described in section 2.3.7 above, measure 6 consists in the imposition of 
requirements which stock market intermediaries1186 must meet in order to be able to carry out 
transactions ordered by persons from non-cooperative countries. Argentina maintains this measure 
under Title XI, Section III, Article 5 of the Rules of the National Securities Commission (CNV).1187  
7.940.  Title XI, Section III, Article 5 of the CNV Rules allows Argentine stock market 
intermediaries to pursue transactions undertaken or ordered by persons established, domiciled or 
resident in non-cooperative countries in the context of a public offering of negotiable securities, forward contracts, futures or options of any kind and other financial instruments and products provided that two requirements are met: (i) that the persons established, domiciled or resident in 
non-cooperative countries who place the order with the stock market intermediary have the status 
of intermediaries registered with an entity und er the control and supervision of a body that 
performs functions similar to those of Argentina’s CNV, and (ii) that this body has signed a 
memorandum of understanding on cooperation and information exchange with Argentina’s 
CNV.
1188 However, Argentine stock market intermediaries are not subject to these requirements 
when carrying out transactions undertaken or ordered by persons from cooperative countries. 
7.941.  It will be recalled that the conditions under which a country is considered to be 
"cooperative for tax transparency purposes" are laid down in Decree No. 589/2013. As explained 
                                                                                                                                               
financing of terrorism] regimes enhance financial sect or integrity and macroeconomic stability both on a 
national and international level". See IMF, Anti-money laundering and combating the financing of terrorism – 
Inclusion in surveillance and financial stability assessments , p. 6 (English text available at: 
http://www.imf.org/external/np/pp/eng/2012/121412a.pdf; translated into Spanish by the WTO Secretariat). 
1184 See Argentina’s response to Panel question No. 85( b), para. 8 (referring to IMF, "The IMF and the 
Fight Against Money Laundering and the Financing of Terrorism", 5 September 2014 (English text available at: https://www.imf.or g/external/np/ex r/facts/aml.htm ). 
1185 See footnote 1182 above; Argentina’s response to Panel question No. 85(b), paras. 9 and 10 
(referring to IOSCO, Objectives and Principles of Securities Regulation , May 2003, p. 16 (English text available 
at: http://www.iosco.org/library/pubdocs/pdf/IOSCOPD154.pdf ); and FATF Recommendations 
(Exhibit ARG-25), Recommendations 24 and 25. 
1186 The term "stock market intermediaries" is taken to mean the persons indicated in Article 1 of the 
CNV’s Rules, including "trading agents, settlement and clearing agents, distribution  and placement agents, and 
collective investment product management agents".  
1187 CNV Rules 2013, (Exhibits PAN-58 / ARG-50). 
1188 See section 2.3.7 above. WT/DS453/R 
 
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  in section 2.2 above, Decree No. 589/2013 establishes the following conditions for a country to be 
considered cooperative, namely: (i) to have signed with Argentina a tax information exchange agreement or an international double taxation convention with a broad information exchange 
clause, provided that the information is effectively exchanged; or (ii) to have initiated with 
Argentina the negotiations necessary for concluding such an agreement and/or convention.
1189 If 
neither of these requirements is met, the country is deemed to be non-cooperative.1190 
7.942.  As this Panel has already stated, the measures that can be taken for prudential reasons 
include those that seek to look ahead and make the necessary arrangements in advance to 
achieve a certain prudential objective in the financial sector. In this respect, it seems to us that requesting relevant information from the regulatory authorities of other jurisdictions forms part of actions designed to look ahead and make the arrangements necessary to achieve a certain 
prudential objective in the financial sector, in this case, investor protection, the reduction of 
systemic risk and the prevention of money laundering and terrorist financing offences. In particular, the effective availability of information about the identity of the customer or beneficial 
owner who orders or effects the transactions, or those that stand behind them, is, as we have 
seen, essential for preventing money laundering and terrorist financing offences. Viewed from this standpoint, we understand the reasoning behind the measure 6 requirement that when persons 
who order or effect operations through Argentin e stock market intermediaries come from non-
cooperative countries, they must show that (i) in their home jurisdiction, they have the status of 
intermediaries registered with an entity under th e control and supervision of a body that performs 
functions similar to those of Argentina’s CNV and (ii) that this body has signed a memorandum of 
understanding on cooperation and information exchan ge with Argentina’s CNV. However, as stated 
above, a central aspect of this rational relationship of cause and effect is the conformity of the measure itself with the prudential reason, that is, whether the measure, through its design, 
structure and architecture, contributes to achieving the desired effect. We will address this aspect 
below.  
7.943.  We note, first of all, that the determination as to those that are "cooperative" and those 
that are "non-cooperative" under measure 6 is based on the application of Decree No. 589/2013. 
In other words, the Decree serves to determine no t only those that are cooperative and exchange 
information but also, by default, those that are "non-cooperative" and on which the requirements 
mentioned in the previous paragraph are to be impo sed (that is, having to show (i) that in their 
home jurisdiction, they have the status of inte rmediaries registered with an entity under the 
control and supervision of a body that performs f unctions similar to those of Argentina’s CNV; and 
(ii) that the body in their home jurisdiction has signed a memorandum of understanding on 
cooperation and information exchange with Argentina’s CNV). As with measure 5, it is in the 
mechanism used by measure 6 for determining who is cooperative and who is not that we see a fundamental problem. The arguments we used in paragraphs 7.912-7.918 above  apply, mutatis 
mutandis , to measure 6.  
7.944.  In the light of the foregoing, we consider th at measure 6, in particular the fact that it does 
not impose specific requirements on persons who order or effect stock market operations in Argentina and come from jurisdictions which are officially cooperative but have not concluded an 
information exchange agreement or effectively exchanged information, does not have a rational 
relationship of cause and effect with the prudenti al reasons identified by Argentina. We therefore 
conclude that measure 6 was not adopted for the prudential reasons identified by Argentina.  
7.3.7.2.4.3  Third requirement: Whether me asures 5 and 6 have not been used "as a 
means of avoiding [Argentina’s] commitm ents or obligations" under the GATS 
7.945.  Having concluded that Argentina has failed to demonstrate that measures 5 and 6 were 
taken for prudential reasons within the meaning of paragraph 2(a) of the Annex on Financial 
Services, we consider it unnecessary to continue our examination under paragraph 2(a) of the Annex on Financial Services and, therefore, we will not examine whether Argentina has demonstrated that measures 5 and 6 have not b een used as a means of avoiding Argentina’s 
commitments or obligations under the GATS. 
                                               
1189 Article 1 of Decree No. 589/2013, (Exhibits PAN-3 / ARG-35). 
1190 See footnote 1145 above.  WT/DS453/R 
 
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  7.3.7.2.5  Conclusion 
7.946.  We have concluded that the reasons identified by Argentina in relation to measures 5 and 
6, respectively, are "prudential" reasons within the meaning of paragraph 2(a) of the Annex on Financial Services.  
7.947.  We have also concluded that measure 5, and in particular the fact that it does not require 
relevant information from the insurance regulators of jurisdictions that are officially cooperative but have not concluded an information exchange agreement or effectively exchanged information, 
does not have a rational relationship of cause and effect with the prudential reasons identified by 
Argentina.  
7.948.  Moreover, we have concluded that measure 6, and in particular the fact that it does not 
impose specific requirements on persons that order or effect stock market operations in Argentina 
and come from jurisdictions that are officially cooperative but have not concluded an information 
exchange agreement or effectively exchanged information, does not have a rational relationship of cause and effect with the prudential reasons identified by Argentina. 
7.949.  Accordingly, the Panel concludes that measure 5 (requirements relating to reinsurance 
services) and measure 6 (requirements for access to the Argentine capital market) are not covered by paragraph 2(a) of the Annex on Financial Services because they were not taken for prudential 
reasons within the meaning of that provision. 
7.4  Findings under the GATT 1994 7.4.1  Introduction 7.950.  In the present case, in addition to its claims under the GATS, Panama also challenges 
measures 2 and 3 under the GATT 1994. As explained in section 7.2 above, the possibility of a 
measure being simultaneously inconsistent with the GATS and the GATT 1994 has been accepted by the Appellate Body in previous disputes. We th erefore now turn to an examination of Panama’s 
claims under the GATT 1994.   
7.4.2  Panama’s claims under Article I:1 of the GATT 1994 
7.4.2.1  Main arguments of the parties 
7.4.2.1.1  Panama 
7.951.  Panama maintains that both measure 2 and measure 3 are inconsistent with Article I:1 of 
the GATT 1994.
1191 
7.952.  With respect to measure 2, Panama claims that the presumption of unjustified increase in 
wealth imposed by the unnumbered article added af ter Article 18 of the LPT qualifies as a "rule 
and formality in connection with exportation",1192 as well as a "charge imposed on the international 
transfer of payments" for exports1193 and is therefore covered by Article I:1 of the GATT 1994.  
7.953.  Panama maintains that the measure is  covered by the GATT 1994 since, although the 
measure affects the tax status of a buyer or seller of a product "with respect to a direct tax (e.g. gains tax), at the same time it affects aspects of the merchandise transactions (e.g. 
payments)".
1194 Panama explains that if the payment of direct taxes or the appearance of related 
tax contingencies is linked with the purchase or sale of certain products, those products will be implicitly affected by the rule governing the tax situation of the buyer or seller as the payer of a direct tax.
1195 Panama points out that the direct or indirect nature of the taxes linked with this 
measure is not a relevant aspect when analysing whether it falls within the scope of Article I:1 of 
                                               
1191 Panama’s request for the establishment of a panel, pp. 3 and 4.  
1192 Panama’s first written submission, para. 4.187. See also Panama’s respon ses to Panel questions 
Nos. 55 and 89.  
1193 Panama’s first written submission, para. 4.187. 
1194 Panama’s second written submission, para. 2.370. 
1195 Panama’s second written submission, para. 2.370. WT/DS453/R 
 
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  the GATT 1994.1196 Panama observes that the fact that a measure is contained in tax legislation 
that taxes wealth or imposes direct taxes is not an impediment to finding that the measure affects trade in goods. Panama relies on the US – FSC
1197 dispute, claiming that both the panel and the 
Appellate Body found that a measure which offered be nefits with respect to a direct tax influenced 
the decision-making of the taxpayer to the detrimen t of the imported product, in contravention of 
Article III:4 of the GATT.1198 
7.954.  In Panama’s opinion, measure 2 qualifies as a "rule and formality in connection with 
exportation".1199 Panama argues that the expression "all rules and formalities in connection with 
importation and exportation" in Article I:1 of  the GATT 1994 has been broadly interpreted by 
previous panels, which makes it possible to bring within the scope of this provision measures related to exports such as, for example, measure concerning payment for exports.
1200 Panama 
cites the panel report in US – Poultry (China) in s upport of its  argument that "this category of 
measures has a broad scope, since it encompasses not only measures directly related to the import or export process, but also those relating to other aspects of exportation or measures that 
affect export performance.
1201"1202 Panama maintains that the requirement or formality to keep the 
usual supporting documents for the transaction indicates that the measure is based on (and therefore linked with) the export process. Panama explains that the moment of declaration of the 
tax is irrelevant, as is the fact that the export operation has been completed before the 
presumption arises.
1203 Moreover, Panama observes that the fact that the requirement presumably 
has to be met in the same way by other exporters only goes to show that the measure is redundant and unnecessary.
1204 
7.955.  In its first written submission Panama also  claims that the presumption of an unjustified 
increase in wealth imposed by the unnumbered article following Article 18 of the LPT qualifies as a "charge imposed on the international transfer of payments" for exports.
1205 According to Panama, 
the fiscal consequences of a finding of unjustified increase in wealth constitute a "charge" insofar 
as they consist in the obligation to pay gains tax, VAT and internal taxes with respect to the international transfer of payments for exports.
1206 
7.956.  Panama asserts that this is the case for Argentine residents who export goods to non-
cooperative countries and who therefore receive payments as consideration which result in the application of the above-mentioned presumption. Panama maintains that the broad coverage accorded to the word "advantage" encompasses the fact that Argentine exporters who export to 
cooperative countries are not affected by the pr esumption of unjustified increase in wealth, 
whereas this presumption does apply to income received by exporters who export to non-cooperative countries.
1207  
7.957.  Panama argues that the products of no n-cooperative countries and those of cooperative 
countries may be considered "like" since they differ only in their origin.1208 Moreover, Panama 
claims that the advantage is not granted immediately and unconditionally to like products exported 
to non-cooperative countries.1209 
7.958.  Where measure 3 is concerned, Panama claims that the measure, which requires products 
imported from persons located in non-cooperative countries to be valued on the basis of the transfer pricing regime, is covered by Article I: 1 of the GATT 1994 because it is a rule connected 
with the determination of the tax base for an internal tax levied on the taxpayers who market the 
                                               
1196 Panama’s response to Panel question No. 89. 
1197 Panama refers to Appellate Body Report, US – FSC (Article 21.5 - EC), paras. 207-222. See 
Panama’s response to Panel question No. 55.  
1198 Panama’s response to Panel question No. 55. 
1199 Panama’s comments on Argentina’s response to Panel question No. 92. 
1200 Panama’s first written submission, para. 4.188. 
1201 (Footnote original) Panel Report, US – Poultry (China) , para. 7.410. 
1202 Panama’s response to Panel question No. 55. 
1203 Panama’s response to Panel question No. 55. 
1204 Panama’s comments on Argentina’s response to Panel question No. 92. 
1205 Panama’s first written submission, para. 4.187. 
1206 Panama’s first written submission, para. 4.190. 
1207 Panama’s first written submission, para. 4.193; and second written submission, para. 2.379. 
1208 Panama’s first written submission, paras. 4.196 and 4.197. 
1209 Panama’s first written submission, paras. 4.200 and 4.201. WT/DS453/R 
 
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  products and not on the products themselves. Panama considers that this measure would be 
covered by Article III:4 of the GATT 1994.1210 Alternatively, according to Panama, the measure is a 
rule or formality in connection with the importation or exportation of goods within the meaning of Article I:1 of the GATT 1994.
1211 
7.959.  As in the case of measure 2, Panama argues that the products of non-cooperative 
countries and those of cooperative countries may be considered to be "like" since they differ only 
in origin.1212  
7.960.  Panama maintains that the measure imposes additional requirements and charges on 
Argentine taxpayers which are not imposed on import and export transactions conducted with persons located in cooperative countries. According to Panama, for imports of goods from non-cooperative countries, subjection to the transfer pricing regime means additional declaration 
formalities, uncertainties, and costs involved in the collection, processing and assessing of 
information and the hiring of an accountant. Panama explains that none of this affects imports of like goods from cooperative countries.
1213 Panama argues that these latter goods receive an 
advantage, favour, privilege or immunity not extended to goods from non-cooperative countries. 
Hence, in Panama’s opinion, for those taxpayer s who decide to do business with persons from 
cooperative countries there is an advantage that is not extended to the services and service 
suppliers of non-cooperative countries, thereby al tering the conditions of competition to the 
detriment of the services and service suppliers of non-cooperative countries.1214  
7.4.2.1.2  Argentina 7.961.  For its part, Argentina asserts that measure 2 is not a "rule or formality in connection with 
exportation".
1215 In this respect, Argentina considers that measure 2 does not affect international 
trade in goods because the tax is declared only after the foreign trade operation has been completed.
1216 According to Argentina, taxing the weal th of the domestic taxpayer does not 
constitute an aspect of the import process or affect the actual imports.1217 Argentina explains that 
measure 2 imposes a method for the determination of the income liable to domestic taxation in Argentina and that the fact that this income may partly derive from import or export transactions 
does not imply that Argentina’s domestic tax measures are border measures subject to the 
disciplines of Article I:1 of the GATT 1994.
1218 Argentina bases its argument on the Appellate Body 
report in China – Auto Parts , according to which a "panel must then seek to identify the leading or 
core features of the measure at issue, those that define its 'centre of gravity' for purposes of 
characterizing the charge that it imposes as an ordinary customs duty or an internal charge."1219 
According to Argentina, the fact that part of the income taxable in Argentina may come from import or export operations does not suffice to sh ow that the "centre of gravity" of gains tax in 
Argentina is the importation or exportation of goods.
1220 For Argentina, measure 2 is part of the 
tax and therefore inseparable from it.1221  
7.962.  Argentina also questions whether the panel report in US – Poultry  (China)  serves to 
support the description of measure 2 as a "rule in connection with exportation". According to 
Argentina, in the present case the fact of being able to exercise the power of imposing a lawful tax on the wealth of all domestic taxpayers cannot be understood as "another aspect of exportation", particularly if the taxpayers can prove that the export operation has actually been completed. 
Moreover, Argentina explains that measure 2 does not affect the tax liability of the Argentine 
                                               
1210 The arguments of the parties relating to whethe r measure 3 is a measure covered by Article III:4 
are set out in section 7.4.3.1 below. 
1211 Panama’s first written submission, para. 4.263. 
1212 Panama’s first written submission, paras. 4.264 and 4.265; and second written submission, 
para. 2.479. 
1213 Panama’s first written submission, para. 4.241; and second written submission, para. 2.481. 
1214 Panama’s first written submission, paras. 4.266-4.268. 
1215 Argentina’s response to Panel question No. 92. 
1216 Argentina’s first written submission, para. 661. 
1217 Argentina’s first written submission, para. 671.  
1218 Argentina’s second written submission, para. 97. 
1219 Argentina’s second written submission, para. 97 (citing Appellate Body Report, China – Auto Parts , 
para. 171). 
1220 Argentina’s second written submission, para. 97. 
1221 Argentina’s comments on Panama’s response to Panel question No. 89. WT/DS453/R 
 
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  taxpayer or related contingencies with respect to the product exported. In Argentina’s opinion, the 
tax liability remains the same provided it is possible to demonstrate the origin of the payments received in connection with activities duly carried out. Argentina considers that Panama has not identified the negative effect on payment for exports to which it alludes or how it impacts on 
payment.
1222 Argentina also considers that the measures at issue in this case and those examined 
in US – Poultry (China) differ with regard to their "purpose, architecture and design, … context and 
… effect and scope", so that the analytical framework used by the panel in  US – Poultry (China) 
would not apply in the present dispute.1223 
7.963.  Argentina recalls that the panel in  US – Poultry (China)  believed that "the establishment 
and implementation of a rule by the FSIS is a pr erequisite for the importation of poultry products 
into the United States. We also recall that we have concluded that the effect of Section 727, which 
is a legislative provision, was to prohibit the importation of Chinese poultry products into the 
United States."1224 Argentina argues that measure 2 is not a "necessary condition" for the 
purchase or sale of a product. The measure does not have the effect of prohibiting, in any respect, 
sales of products from Argentina to Panama, so that it is not a prerequisite for being able to carry 
out an export operation. Nor do its effects result in a prohibition on exports of products to Panama.
1225  
7.964.  Argentina argues in its defence that neither does measure 2 qualify as a "charge imposed 
on the international transfer of payments" since it admits evidence to the contrary (rebuttable presumption) and the tax treatment affects the asse ts of the taxpayer and not the income derived 
from the international transaction per se .
1226 Moreover, Argentina recalls that the presumption 
becomes applicable once the export transaction has been completed, for the purpose of 
determining the tax base for gains tax.1227 Argentina points out that Panama has confined itself to 
asserting, in its second written submission, that measure 2 is covered by the expression "rules and 
formalities in connection with … exportation", without offering any arguments concerning the 
characterization of the measure as a "charge". In Argentina’s opinion, Panama’s argument for determining the inconsistency of the measure with Article I:1 of the GATT 1994 is not coherent 
since Panama describes measure 2 as a "rule or formality in connection with exportation" which 
has a negative effect on payment (and not as a "charge imposed on the international transfer of payments for … exports"), whereas in endeavouring  to prove that there is an advantage, Panama 
asserts that the measure imposes procedural and fiscal charges on the exporter.
1228 
7.965.  Argentina maintains that measure 2 does not generate an advantage, privilege or 
immunity for exporters who ship their products to cooperative countries, since they are also 
required to produce all the documentation necessary to carry out the export operation.1229 In this 
connection, Argentina points out that the measure does not discriminate between like products 
according to their destination and does not accord differential treatment on the basis of the destination of Argentine exports. According to Arge ntina, the destination of the product exported is 
not a variable that forms part of the measure. The measure is not related with the destination of 
the Argentine goods but rather with the assets of the Argentine taxpayer.
1230 
7.966.  Argentina believes that, in the context of export operations, Article I of the GATT 1994 
concerns the treatment accorded to the products destined for Panama and not the treatment 
accorded to the exporters of those products. Un der the legislation challenged by Panama, the 
presumption of unjustified increase in wealth is not necessarily triggered when products originating in Argentina are exported to Panama. The dest ination of the product exported is not the 
application variable used by the measure at issue, since that variable is the country of origin of the 
                                               
1222 Argentina’s response to Panel question No. 92. 
1223 Argentina’s response to Panel question No. 93. 
1224 Argentina’s response to Panel question No. 92 (citing Panel Report, US – Poultry (China), 
para. 7.409). In US – Poultry (China) the abbreviation FSIS stands for "F ood Safety and Inspection Service”. 
1225 Argentina’s response to Panel question No. 92. 
1226 Argentina’s first written submission, paras. 673 and 674. 
1227 Argentina’s first written submission, para. 675. 
1228 Argentina’s response to Panel question No. 92. 
1229 Argentina’s first written submission, para. 682; and response to Panel question No. 92. 
1230 Argentina’s response to Panel question No. 92. WT/DS453/R 
 
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  payments which accrue to the Argentine taxpayer, irrespective of the destination of the product 
exported.1231 
7.967.  Where measure 3 is concerned, Argentina considers that it imposes a method on the 
determination of the income subject to internal taxation in Argentina and that the fact that the 
i n c o m e  i n  q u e s t i o n  m a y  d e r i v e  i n  p a r t  f r o m  i m p o r t  o r  e x p o r t  t r a n s a c t i o n s  d o e s  n o t  i m p l y  t h a t  
Argentina’s domestic tax measures are border measures subject to the disciplines of Article I:1 of the GATT 1994.
1232 According to Argentina, this type of valuation is not a requirement, but applies 
when it is not possible to establish the international price for import or export operations.1233 
Argentina claims that the different requirements that may be imposed, depending on the entity 
with which the transaction is effected (cooperative or non-cooperative jurisdiction), "are not for the purpose of customs valuation and do not involve the granting of any advantage, favour, 
privilege or immunity with respect to customs duties or charges of any kind".
1234 
7.4.2.2  Assessment by the Panel 7.4.2.2.1  Introduction 
7.968.  The issue before the Panel is whether meas ure 2 (presumption of unjustified increase in 
wealth) and measure 3 (transaction valuation based on transfer prices) are inconsistent with Article I:1 of the GATT 1994.
1235 In reply to these claims made by Panama, Argentina asserts that 
the two measures are not covered by the legal provision in question.1236  
7.969.  We will begin by examining the wordin g of Article I:1 of the GATT 1994 in order to 
establish the legal standard applicable, taking into account the way in which it has been interpreted by previous panels and the Appellate Body. We will then proceed to determine whether 
measures 2 and 3 infringe that provision. 
7.4.2.2.2  The relevant legal provision 7.970.  Article I:1 of the GATT 1994 reads as follows: 
With respect to customs duties and charges of any kind imposed on or in connection 
with importation or exportation or imposed on the international transfer of payments for imports or exports, and with respect to the method of levying such duties and 
charges, and with respect to all rules and formalities in connection with importation 
and exportation, and with respect to all ma tters referred to in paragraphs 2 and 4 of 
Article III*, any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destin ed for any other country shall be accorded 
immediately and unconditionally to the like product originating in or destined for the 
territories of all other contracting parties. 
7.971.  In EC – Seal Products , the Appellate Body recalled that Article I:1 sets out a fundamental 
non-discrimination obligation under the GATT 1994
1237, which is "pervasive" and a "cornerstone of 
the GATT", as well as being "one of the pillars of the WTO trading system".1238  
                                               
1231 Argentina’s response to Panel question No. 92; and comments on Panama’s response to Panel 
question No. 89. 
1232 Argentina’s second written submission, para. 97. 
1233 Argentina’s first written submission, para. 690, (footnote original) Law on Gains Tax, text amended 
by Decree 649/97. ARG-42. 
1234 Argentina’s first written submission, para. 704. 
1235 Panama’s first written submission, paras. 5.1.b(iii) and 5.1.c(iii). 
1236 Argentina’s first written submission, paras. 668-687 and 696-706; and second written submission, 
para. 97. See also Argentina’s response to Panel questions Nos. 92 and 93. 
1237 Appellate Body Report, EC – Seal Products , para. 5.86. In Canada – Autos , the Appellate Body 
explained that the object and purpose of Article I:1 of the GATT 1994 is "to prohibit discrimination among like products originating in or destined for different count ries". Moreover, it noted that this prohibition of 
discrimination "also serves as an ince ntive for concessions, negotiated reciprocally, to be extended to all other 
Members on an MFN basis". See Appellate Body Report, Canada – Autos , para. 84.  
1238 Appellate Body Report,  EC – Seal Products , para. 5.86 (referring to Appellate Body Reports, Canada 
– Autos , para. 69; US – Section 211 Appropriations Act , para. 297; and EC – Tariff Preferences , para. 101). WT/DS453/R 
 
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  7.972.  In that same dispute, the Appellate Body summarized the existing case law in relation to 
the legal standard applicable to the examination of a claim under Article I:1 of the GATT 1994. Thus, the Appellate Body identified four elements that must be demonstrated in order to establish an inconsistency with Article I:1 of the GATT 1994:  
Based on the text of Article I:1, the following elements must be demonstrated to 
establish an inconsistency with that provision: (i) that the measure at issue falls within the scope of application of Article I:1; (ii) that the imported products at issue 
are "like" products within the meaning of Article I:1; (iii) that the measure at issue 
confers an "advantage, favour, privilege, or immunity" on a product originating in the territory of any country; and (iv) that the advantage so accorded is not extended "immediately" and "unconditionally" to "like" products originating in the territory of all 
Members. Thus, if a Member grants any advantage to any product originating in the 
territory of any other country, such advantage must be accorded "immediately and 
unconditionally" to like products originating from all other Members.
1239  
7.973.  Our analysis of Panama’s claims under Article I:1 of the GATT 1994 therefore begins by 
establishing whether measures 2 and 3 fall within th e scope of that provision. Only if they do may 
we extend our analysis to the other elements which make up the legal standard of Article I:1 of 
the GATT 1994. 
7.974.  From the wording of the provision it follow s that the following types of measures fall within 
its scope: (i) customs duties and charges of any kind imposed on or in connection with importation or exportation or imposed on the international transfer of payments for imports or exports; (ii) the 
method of levying such duties and charges; (iii) all rules and formalities in connection with 
importation and exportation; and (iv) all matters referred to in paragraphs 2 and 4 of Article III of the GATT 1994.
1240 
7.975.  In the case of measure 2, Panama first claimed that this measure "qualifies as a 'rule and 
formality in connection with exportation'"1241 and was so designed that it "imposes 'a charge on 
the international transfer of payments' for exports".1242 However, in its second written submission, 
Panama appears to focus solely on the consideration of this measure as a rule or formality in 
connection with exportation.1243  
7.976.  With regard to measure 3, Panama maintains that there are two ways in which this 
measure can be covered by Article I:1 of the GATT 1994: (i) by regarding it as a rule linked with 
the determination of the tax base for an internal tax that falls not on the products but on the 
taxpayers and is thus covered by Article III:4 of the GATT 1994 and, consequently, by Article I:1 
as well; or (ii) alternatively, by regarding the measure as a rule or formality in connection with 
importation or exportation within the meaning of Article I:1 of the GATT 1994.1244 
7.977.  Below, we examine each of these measures for the purpose of establishing whether they 
are covered by Article I:1 of the GATT 1994. 
7.4.2.2.3  The question of whether measure 2 is covered by Article I:1 of the GATT 1994 
7.978.  As previously explained, in support of it s claim under Article I:1 of the GATT 1994, Panama 
characterizes measure 2 as a "rule and formality in connection with exportation" or as a "charge imposed on the international transfer of payments for … exports".
1245 In order to determine 
whether measure 2 can be deemed to belong to one or both of these categories, we consider it 
relevant to recall the content of measure 2.  
7.979.  As described in detail in section 2.3.3 above, measure 2 consists of a presumption of 
unjustified increase in wealth applicable to any entry of funds "irrespective of its nature or 
                                               
1239 Appellate Body Report, EC – Seal Products , para. 5.86 (emphasis original). 
1240 Panel Report,  EC – Commercial Vessels , para. 7.80. 
1241 Panama’s first written submission, para. 4.187. 
1242 Panama’s first written submission, para. 4.190. 
1243 Panama’s second written submission, para. 2.373. 
1244 Panama’s first written submission, para. 4.263. 
1245 See para. 7.954 above.  WT/DS453/R 
 
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  category or the type of transaction involved" – for the benefit of Argentine taxpayers – coming 
from non-cooperative countries in the context of an ex officio  determination by the AFIP of the 
taxable subject matter for the purpose of gains ta x. This presumption can be rebutted if the 
taxpayer proves conclusively that the funds were ea rned from activities actually carried out by the 
taxpayer or by a third party in those countries or from placements of "duly declared funds". 
Argentina maintains this measure pursuant to the unnumbered article following Article 18 of the LPT.
1246 
7.4.2.2.3.1  Whether measure 2 is a rule an d formality in connection with exportation 
7.980.  Below, we examine whether Panama has demonstrated that measure 2 constitutes a rule 
and formality in connection with exportation with in the meaning of Article I:1 of the GATT 1994.  
7.981.  In accordance with the usual rules of inte rpretation of public international law, we first 
explore the ordinary meaning of the words " reglamento " and " formalidad " used in the Spanish 
text. The Spanish Royal Academy defines " reglamento " as "[ c]olección ordenada de reglas o 
preceptos, que por la autoridad competente se da para la ejecución de una ley o para el régimen 
de una corporación, una dependencia o un servicio " ([o]rdered collection of rules or precepts laid 
down by the competent authority for the implementation of a law or for the regulation of a corporation, agency or service) or "[ n]orma jurídica general y con rango inferior a la ley, dictada 
por una autoridad administrativa " (general legal rule of lower status than a law, issued by an 
administrative authority).
1247 The corresponding term used in the English text of Article I:1 of the 
GATT 1994 is "rules", which can be understood to mean "a principle, regulation, or maxim governing individual conduct; a principle governing scholarly or scientific procedure or method" or 
"a principle regulating practice or procedure; a dominant custom or habit. Also, accepted or 
prescribed principles, method, practice, custom"
1248, which appears to give the word a broad 
meaning as compared with the more formal definition of the Spanish Royal Academy, which makes 
reference to a type of legal rule that elaborates on a rule of higher standing. The term chosen for 
use in the French version, " réglementation " ("ensemble de règles, de règlements, de prescriptions 
qui concernent un domaine particulier " (set of rules, regulations, requirements relating to a 
particular area) or " action de réglementer " (act of regulating))1249 also appears to refer to 
instruments of a legal nature in general. In our view, the unnumbered article added after Article 18 of the LPT to maintain measure 2 can be characterized as a "rule", " reglamento ", or 
"réglementation ".  
7.982.  However, it does not appear that this legal provision can be characterized as a 
"formalidad " (formality), understood to mean "[ c]ada uno de los requisitos para ejecutar algo " 
(each of the requirements for carrying something out) or "[ m]odo de ejecutar con la exactitud 
debida un acto público " (way of correctly executing a public instrument).
1250 Our view appears to 
be confirmed by the panel in Argentina – Import Measures , which also investigated the ordinary 
meaning of the word "formality" in the context of Article VIII of the GATT 1994. The panel stated 
that the word "'formality' is [a] small point of practice that, though seemingly unimportant, must 
[usually] be observed to achieve a particular legal result." More generally, a "formality" is related to "[c]onformity to rules; propriety; rigid or merely conventional observance of forms".
1251 The 
ordinary meaning of the word " formalité " in French (" opération prescrite par la loi, la règle, et qui 
est liée à l'accomplissement de certains actes  (juridiques, administratifs, religieux) comme 
condition de leur validité ")1252 (operation prescribed by law or regulation and linked with the 
performance of certain acts (legal, administrative, religious) as a condition of their validity) also 
appears to confirm our view that measure 2 does not have the characteristics of a "formality". 
7.983.  Having concluded that measure 2 can be characterized as a "rule", we must now 
determine whether measure 2, insofar as it is a rule, is "in connection with exportation". Indeed, 
                                               
1246 Law on Tax Procedure, (Exhibits PAN-9 / ARG-45). 
1247 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. II, p. 1882. 
1248 Shorter Oxford English Dictionary , 6th edition, A. Stevenson (ed.) (Oxford University Press, 2007), 
p. 2628. 
1249 Dictionnaire de la Langue Française Le Petit Robert , (Dictionnaires Le Robert, 2000), p. 2140. 
1250 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. I, p. 1047. 
1251 Panel Report, Argentina – Import Measures , para. 6.432 (emphasis original; footnotes omitted). 
1252 Dictionnaire de la Langue Française Le Petit Robert , (Dictionnaires Le Robert, 2000), p. 1064. WT/DS453/R 
 
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  Article I:1 of the GATT 1994 does not apply to any rule but only to those "in connection with 
importation and exportation". As we have pointed out, Panama characterizes measure 2 as a "rule in connection with exportation".  
7.984.  The words " relativo a las … exportaciones " (in connection with … exportation) help to 
define the types of measures that must conform with the obligation not to grant "less favourable 
treatment" to like products. The ordinary meaning of the term " relativo a " is "[ q]ue guarda 
relación con alguien o con algo " (having a relationship with someone or something).
1253 If we 
examine the English version of this provision, we find that the term chosen by the negotiators is 
not "relating to" but "in connection with". The term "in connection with" performs a similar function in Article VIII:1 of the GATT 1994, where the types of measures subj ect to the disciplines of that 
provision are also defined. In China – Raw Materials , when interpreting similar terminology 
("imposed on or in connection with … exportatio n") in the context of Article VIII:1 of the GATT 
1994, the panel defined the word "connection" ( conexión ) as "[a] causal or logical relationship or 
association" and the verb "connect" ( conectar ) as "associate in occurrence or action".
1254 The panel 
considered that this terminology indicated that  Article VIII:1 of the GATT 1994 applied to the 
charges imposed at the time of ("on") or in association with ("in connection with") exportation.1255 
The panel explained that "[b]eyond temporal connotations, the phrase 'on or in connection with ... 
exportation' may also mean that fees or charges that are associated  with exportation, or that are 
linked or logically related to exportation, would fall within the scope of Article VIII".1256 We agree 
with that panel in considering that for a measure to be considered a rule "in connection with" exportation, there must be a certain association, link or logical relationship between the measure 
and the exports. 
7.985.  We note that in French the term used is " afférentes aux " which could be defined as " qui se 
rapporte aux"  (which relates to).
1257 Hence, in the French version of the Agreement, as in the 
English version, we encounter the idea that the measure must be associated, linked or have a 
logical relationship with exportation, which goes to confirm the interpretation indicated in the previous paragraph. 
7.986.  We also find support for this interpretation in measures that previous panels have 
considered to be included in the category of "rules and formalities in connection with importation" within the context of Article I:1 of the GATT 1994, for example, rules on the allocation of tariff 
quotas and import licensing procedures ( EC – Bananas III )
1258, advance import declaration, 
additional legalization fees and customs control requirements ( Colombia – Ports of Entry )1259, the 
rules and formalities for the revocation of counter vailing duties in the context of anti-dumping 
investigations ( US – Anti-Dumping and Countervailing Duties (China) )1260 or the measure that 
prohibited the use of funds to make it possible to import poultry from China ( US – Poultry 
(China) ), which we examine below. In all these cases, there was an association, link or logical 
relationship between the measure at issue and imports.  
7.987.  Argentina refers us to the Appellate Body report in China – Auto Parts , asserting that "a 
panel must then seek to identify the 'leading or core features' of the measure at issue, those that 
define its 'centre of gravity' for purposes of characterizing the charge that it imposes as an ordinary customs duty or an internal charge".
1261 We agree with Argentina that in this case also it 
is important to examine the core features that define the centre of gravity of measure 2 to 
establish whether there actually is such an association, link or logical relationship between the measure and exportation.  
7.988.  As already explained, measure 2 consists in a rebuttable presumption of an unjustified 
increase in wealth in the case of any entry of funds "irrespective of its nature or category or the 
                                               
1253 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. II, p. 1888. 
1254 Panel Report, China – Raw Materials , para. 7.822 (emphasis original). 
1255 Panel Report, China – Raw Materials , para. 7.823. 
1256 Panel Report, China – Raw Materials , para. 7.824 (emphasis original). 
1257 Dictionnaire de la Langue Française Le Petit Robert , (Dictionnaires Le Robert, 2000), p. 41. 
1258 Panel Report, EC – Bananas III , paras. 7.189, 7.221, 7.240 and 7.255.  
1259 Panel Report, Colombia – Ports of Entry , para. 7.342. 
1260 Panel Report, US – Anti-Dumping and Countervailing Duties (China) , para. 14.167. 
1261 Argentina’s second written submission, para. 97 (citing Appellate Body Report, China – Auto Parts , 
para. 171). WT/DS453/R 
 
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  type of transaction involved" – in favour of Ar gentine taxpayers – from non-cooperative countries. 
This presumption, for which the LPT provides, is a tool used by the AFIP in the context of an ex 
officio  determination of the tax base for the purpose of calculating the gains tax payable by 
Argentine taxpayers. We take tax base to mean th e monetary base to which the tax rate is applied 
for calculating the tax liability, in this case, with respect to gains tax.1262 Hence, measure 2 would 
be fiscal in nature, being a tool for calcul ating one of the elements of the tax.  
7.989.  We note that the measure 2 presumption operates in relation to "any" entry of funds, 
irrespective of its nature or category or the type  of transaction involved, so that it would not, a 
priori, be related, linked or logically associated wi th exports effected by the Argentine taxpayer. 
Although measure 2 does not rule out the possibility that, hypothetically, certain entries of funds from non-cooperative countries might derive from payments for goods exported by Argentine 
taxpayers, it does not seem to us that its ce ntre of gravity resides in the possible logical 
relationship, association or link with exportation. The presumption, which is rebuttable, is applied according to the geographical provenance of the funds and not according to whether or not they 
derive from export operations. In our view, the fact that, hypothetically, part of the income of an 
Argentine taxpayer subject to gains tax might come from payments for exports does not suffice to support the conclusion that measure 2 has, as a core feature or "centre of gravity", its 
relationship, linkage or association with exports made by the Argentine taxpayer. 
7.990.  We do not consider correct Panama's argument that the requirement to retain the usual 
supporting documents relating to the transaction in order to rebut the presumption of unjustified increase in wealth indicates that measure 2 is founded on (and linked with) the process of 
exportation.
1263 Measure 2 establishes a requirement applicable to all taxpayers in general, 
regardless of the activity that gives rise to the payments on which the tax in question is imposed.
1264 This is indicated by the unnumbered article following Article 18 of the LPT itself, in 
providing for the presumption to be applied to any entry of funds "irrespective of its nature or 
category or the type of transaction involved". 
7.991.  In defence of its position that a measure related to a direct tax (such as gains tax) can be 
regarded as a rule in connection with exportation, Panama cites the US – FSC  case.1265 Panama 
claims that both the panel in that dispute an d the Appellate Body found that a measure that 
conferred benefits with respect to a direct tax influenced the taxpayer’s decision-making to the 
detriment of the product imported, in cont ravention of Article III:4 of the GATT 1994.1266 From this 
precedent, Panama concludes that the fact that a measure is contained in fiscal legislation that 
levies a tax on assets or imposes direct taxes is no obstacle to it being found that that legislation affects trade in goods. According to Panama, if the measure that affects the tax status of a buyer 
or seller of a product "with respect to a direct tax (e.g. gains tax) simultaneously affects aspects of 
the goods transactions (e.g. payments), it is a measure that will be covered by the GATT".
1267  
7.992.  Firstly, we note that the precedent in qu estion concerns the interpretation of the words 
"affecting … use" in the context of Article III:4 of the GATT 1994, so that its relevance for the 
purposes of our discussion under Article I:1 is not obvious. Leaving this aside, we note that the measure at issue in US – FSC  consisted of the exemption from United States income tax of the 
part of the foreign-source income received by a foreign sales corporation that came from exports. 
                                               
1262 In "Constitutional Principles on Tax Matters  ", (Exhibit PAN-83), the elements of the taxable event 
are indicated, by way of illustration, as being: the subject, the object, the tax base, the tax rate, etc. In developing the theory of reservation to law in favour of  the State in tax matters, jurists have established the 
following fundamental elements of the tax: the obligor, the taxable event, the tax base and the tax rate. The obligor is the one who pays the tax, i.e. the taxpayer; the taxable event is that which gives rise to the tax liability (for example, income or profit); the tax base is  the expression of the taxable event in monetary terms, 
i.e. the base to which the relevant tax rate or percentage  is applied in order to calculate the tax liability. See 
Menéndez Moreno, Alejandro and others, Derecho Financiero y Tributario. Pa rte general. Lecciones de cátedra , 
2009, 10
th edition, p. 92, Editorial Lex Nova, Spain; and Romero-Flor, Luis María, La reserva de ley como 
principio fundamental del derecho tributario , in Derecho y Políticas Públicas , Vol. 15, No. 18, 
July-December 2013. 
1263 Panama’s comments on Argentina’s response to Panel question No. 92. 
1264 Article 33 of the LPT stipulates that all taxpayers must keep invoices for a period of ten years. See 
Argentina’s response to Panel question No. 92. 
1265 Panama refers to Appellate Body Report, US – FSC (Article 21.5 - EC) , paras. 207-222. See 
Panama’s response to Panel question No. 55. 
1266 Panama’s response to Panel question No. 55. 
1267 Panama’s second written submission, para. 2.370. WT/DS453/R 
 
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  These corporations were engaged in certain activities related to the sale of goods produced in the 
United States for export.1268 The centre of gravity of this measure, that is, the core feature that 
triggered the application of the tax exemption, was precisely exportation. As we have explained, we do not consider that this is the case with measure 2. 
7.993.  We note that Panama’s arguments concerning the characterization of measure 2 as a rule 
and formality in connection with exportation are mainly based on the panel report in US – Poultry 
(China) . According to Panama, it follows from this report that the category of "rule and formality in 
connection with exportation" has a broad scope, since it encompasses not only measures directly 
related to the process of importation or exportation, but also those measures which relate to other aspects of exportation or have an impact on actual exports.
1269  
7.994.  We recall that the measure at issue in US – Poultry (China)  prohibited the use of funds by 
the United States authorities to allow poultry products to be imported from China.1270 As Argentina 
points out, the decision of the United States au thorities concerning the equivalence of the Chinese 
sanitary measures in this respect was a prerequisite for the importation of the products into the 
United States. Hence the lack of funds for carry ing out such an examination had the effect of 
prohibiting the importation of Chinese poultry products into the United States.1271 In the light of 
these facts, the panel considered that the measure in  question, although it did not directly regulate 
imports of poultry products from China, had an impact on the actual imports since its immediate 
effect was to prohibit them.  
7.995.  We agree with Panama that the panel in US – Poultry (China) accorded a broad meaning to 
this category of measures covered by Article I:1 of the GATT 1994. Nevertheless, we consider that 
the broad interpretation adopted by that pane l does not mean that any measure that has a 
hypothetical or remote connection with importation or exportation can be considered to be covered by Article I:1 of the GATT 1994.  
7.996.  In this respect, it should be pointed out that, in US – Poultry (China) , the panel based itself 
on a previous case, India – Autos,  in interpreting the expression  "import restrictions" in the 
context of Article XI of the GATT 1994. The panel in India – Autos  explained that "import 
restrictions" within the meaning of Article XI of the GATT 1994 consisted of restrictions "with 
regard to" or "in connection with" the importation of the product. Therefore, the expression was not limited to measures which directly relate to the "process" of importation, but might also encompass measures which otherwise relate to other aspects of the importation of the product.
1272 
On the basis of this ruling in India – Autos , the panel in US – Poultry (China)  took a broad view of 
a rule in connection with importation according to which this expression covered measures related to aspects of importation over and above the process of importation per se . More particularly, that 
panel concluded that the measure at issue was "in connection with importation" because, although 
it did not relate specifically to the process of importation itself, it had an impact such that it prohibited actual importation. 
7.997.  In our view, this is not the case with the measure with which we are currently concerned. 
Measure 2 does not have the effect of prohibiting exportation nor does it seem to have an impact on actual exports, beyond the fact that there is a possibility that, on certain occasions, some of the 
income of an Argentine taxpayer might result from exports for which the payments come from 
non-cooperative countries, or some Argentine taxpayers might decide not to receive payments 
from non-cooperative countries so as not to be subject to measure 2. As we have already mentioned, what triggers the application of measure 2 is not the export operation but the entry of 
funds from non-cooperative countries, which could be the result of numerous situations or 
operations, including exportation to the countries in question.  
                                               
1268 Appellate Body Report, US – FSC , para. 11. 
1269 Panama’s response to Panel question  No. 55 (referring to Panel Report, US – Poultry (China) , 
para. 7.410).  
1270 The measure at issue was Section 727 of the 2009 Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriations Act which stipulated: "None of the funds made available in this Act may be used to establish or implement a rule allowing poultry products to be imported into the United States from the People's Republic of China". See Panel Report, US – Poultry (China), para. 2.2. 
1271 Argentina’s response to Panel question No. 92 (citing Panel Report, US – Poultry (China), 
para. 7.409). 
1272 Panel Report, India – Autos , para. 7.257. WT/DS453/R 
 
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  7.998.  We agree with Argentina that the difference between the measures analysed in US – 
Poultry (China)  and measure 2 with regard to their nature, design, structure, scope and effects 
makes it reasonable to assume that the analytical framework within which that panel examined the measure at issue, as well as its conclusions, cannot readily be transposed to the present 
dispute.
1273 
7.999.   If we were to opt for the interpretati on advocated by Panama, we would be broadening 
the scope of Article I:1 of the GATT 1994 to include a government measure that might 
hypothetically affect exports or imports. Indeed, such an interpretation might mean that any 
government measure would be covered by that provision if it were possible to prove a remote and hypothetical relationship with imports or expo rts. We believe that this would generate an 
expansion of the scope of Article I:1 that would result in an almost unlimited number of measures 
being encompassed by that provision, since it would cover every type of measure that had any 
sort of connection with the process of exportation or importation, however tenuous. 
7.1000.  The Panel therefore considers that Pana ma has failed to demonstrate that measure 2 
constitutes a "rule and formality in connection with exportation" within the scope of Article I:1 of 
the GATT 1994. 
7.4.2.2.3.2  Whether measure 2 is a charge imposed on the international transfer of 
payments for exports 
7.1001.  We turn to examine Panama’s claim that measure 2 is a "charge imposed on the 
international transfer of payments for exports" wi thin the meaning of Article I:1 of the GATT 1994. 
In this connection, we note that, in its first written submission, Panama briefly argues that the 
fiscal consequences of a finding of an unjustified increase in wealth constitute a "charge" insofar as 
they involve the payment of gains tax, VAT and internal taxes with respect to the international transfer of payments for exports.
1274 However, as Argentina points out, in its subsequent 
submissions and statements Panama does not return to this line of argument but concentrates on 
maintaining that measure 2 is a "rule or formality in connection with exportation". The Panel views Panama’s attitude as an abandonment of the line of argument in question. However, for 
precautionary reasons, we will examine whether measure 2 is a charge imposed on the 
international transfer of payments for exports, as Panama maintains in its first written submission.  
7.1002.  In this connection, Argentina claims that measure 2 does not qualify as a "charge 
imposed on the international transfer of payments" either, since it admits evidence to the contrary 
(rebuttable presumption) and the tax treatment af fects the assets of the taxpayer and not the 
actual income from the international transaction.
1275 Moreover, Argentina recalls that the 
presumption is applied once the export operation has been completed, for the purpose of 
determining the tax base for gains tax.1276  
7.1003.  We note that the Spanish Royal Academy defines the Spanish word " carga " (charge) as 
"[i]mpuesto o tributo ligado a una propiedad o a un estado y al uso que de estos se hace " ([t]ax or 
levy linked to a property or a situation and the use made thereof).1277 In the context of 
Article VIII:1 of the GA TT 1994, the panel in China – Raw Materials defined the  equivalent English 
term "charge" as "pecuniary burden, cost", "expen se", or "[a] price required or demanded for 
service rendered or goods supplied".1278  
7.1004.  However, Article I:1 of the GATT 1994 does  not govern any charge but only, according to 
the Spanish version, those " que gravan las transferencias internacionales de fondos efectuadas en 
concepto de pago de … exportaciones " (imposed on the international transfer of payment for … 
exports). The Spanish Royal Academy defines the verb " gravar " as "[ i]mponer un gravamen " ([t]o 
                                               
1273 Argentina’s response to Panel question No. 93. 
1274 Panama’s first written submission, para. 4.190. 
1275 Argentina’s first written submission, paras. 673 and 674. 
1276 Argentina’s first written submission, para. 675. 
1277 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. I, p. 438. 
1278 Panel Report, China – Raw Materials , para. 7.820. (footnote original) Shorter Oxford English 
Dictionary , 5th edition, L. Brown (editor) (Oxford University Press, 2002), Vol. 1, p. 382. WT/DS453/R 
 
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  impose a levy).1279 To fall within the scope of Article I:1 of the GATT 1994, that levy or charge 
must be imposed on the international transfer of payments for imports or exports. Panama 
maintains that, in the present case, the charge affects the international transfer of payments for exports.  
7.1005.  Our interpretation appears to be conf irmed by the English version which speaks of 
"charges"  "imposed on  the …  exportation". In the context of Article VIII:1, which also refers to 
"charges imposed on", the panel in China – Raw Materials defined the word "impose" as "put, 
apply, or bestow", "lay or inflict (a tax, duty, charge, obligation, etc.) (on or upon), esp. forcibly; 
compel compliance with".
1280 The English word "on" is defined as "[d]uring, or at some time during 
(a specified day or part of day); contemporaneously with (an occasion )", "in or at", "exactly at or 
j u s t  c o m i n g  u p  t o  ( a  s p e c i f i e d  t i m e ) ,  j u s t  b e f o r e  o r  a f t e r  i n  t i m e " ,  " o n  t h e  o c c a s i o n  o f  ( a n  
action)".1281 T h e r e f o r e ,  t o  f a l l  w i t h i n  t h e  s c o p e  o f  Article I:1 of the GATT 1994, the charge in 
question must be imposed on the international transfer of payments during, contemporaneously 
with or on the occasion of the said transfer. The French text " impositions … qui frappent les 
transferts internationaux de fonds " confirms this interpretation.  
7.1006.  According to Panama, the fiscal consequenc es of a finding of unjustified increase in 
wealth constitute a "charge" insofar as they lead to the payment of gains tax, VAT and internal 
taxes with respect to the international transfer of payments for exports. In our view, the measure 
at issue and hence what should constitute a "charge" are not the fiscal consequences of a finding of unjustified increase in wealth, i.e. the possibl e consequences of the application of measure 2. 
Our task is to determine whether measure 2 is a "charge". Measure 2 is a tool that takes the form 
of a presumption that the AFIP uses to calculate one of the elements of the gains tax, namely, the 
tax base, and is therefore fiscal in nature. It does not seem to us that it can be characterized as a "charge" as defined above, since the presumption challenged by Panama cannot be characterized 
as a "pecuniary burden, cost", "expense", or "[a] price required or demanded for service rendered 
or goods supplied ".
1282  
7.1007.  Even assuming that measure 2 could be considered a charge, we note that, in accordance 
with the wording of Article I:1 of the GATT 199 4, such a charge must be imposed on the 
international transfer of payments for exports. The presumption in question affects not the international transfer of payments but the assets of the taxpayer. In fact, the presumption is not applied during or on the occasion of the transfer of payments but at the time of calculating the tax 
on the gains of the Argentine taxpayer, irrespective  of the time at which the transfer took place. 
7.1008.  Consequently, the Panel considers that Panama has failed to demonstrate that measure 2 
constitutes a "charge imposed on the international transfer of payments for … exports" under 
Article I:1 of the GATT 1994. 
7.4.2.2.3.3  Conclusion 7.1009.  Having concluded that Panama has failed to demonstrate that measure 2 constitutes a 
"rule and formality in connection with exportation" or a "charge … imposed on the international 
transfer of payments for … exports" within the meaning of Article I:1 of the GATT 1994, the Panel 
does not consider it necessary to continue the analysis of Panama’s claim concerning the inconsistency of measure 2 with Article I:1 of the GATT 1994. 
7.1010.  In view of the foregoing, the Panel di smisses Panama’s claim under Article I:1 of the 
GATT 1994 because Panama has failed to demonstrate that measure 2 (presumption of unjustified increase in wealth) constitutes a "rule and formality in connection with … exports" or a "charge … 
imposed on the international transfer of payments for … exports" within the meaning of Article I:1 
of the GATT 1994.  
                                               
1279 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. I, p. 1124. 
1280 Panel Report, China – Raw Materials , para. 7.822. (footnote original) Shorter Oxford English 
Dictionary , 5th edition, L. Brown (editor) (Oxford University Press, 2002), Vol. 1, p. 1331. 
1281 Panel Report, China – Raw Materials , para. 7.822. (footnote original) Shorter Oxford English 
Dictionary , 5th edition, L. Brown (editor) (Oxford University Press, 2002), Vol. 2, p. 1996. 
1282 See para. 7.1002 above. WT/DS453/R 
 
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  7.4.2.2.4  The question of whether measure 3 is covered by Article I:1 of the GATT 1994 
7.1011.  We continue our analysis by examining the second measure challenged by Panama in 
relation to Article I:1 of the GATT 1994, namely , measure 3. As previously explained, Panama 
maintains that there are two ways in which this measure may be included under Article I:1 of the 
GATT 1994: (i) as a measure covered by Article III:4 of the GATT 1994; or (ii) alternatively, as a 
rule or formality in connection with importation and exportation within the meaning of Article I:1 of the GATT 1994.
1283 In order to determine whether measure 3 can be regarded as belonging to 
one or both of these categories, we consider it pertinent to recall the content of measure 3.  
7.1012.  As described in detail in section 2.3.4 above, measure 3 consists in the application of 
methods of transaction valuation based on transfer prices for the purpose of determining the tax base for the gains tax payable by Argentine taxpayers with respect to transactions effected with 
persons from non-cooperative countries. Therefore, like measure 2, measure 3 is a tool for 
determining the tax base for the gains tax payable by the Argentine taxpayer. As far as the claims under the GATT 1994 are concerned, Argentina maintains this measure by virtue of paragraph 5 of 
Article 8 of the LIG.
1284 
7.1013.  We will therefore begin by examining whether Panama has demonstrated that measure 3 
is covered by Article I:1 of the GATT 1994 as a matter referred to in Article III:4 of the GATT 
1994.  
7.4.2.2.4.1  Whether measure 3 is a matter re ferred to in Article III:4 of the GATT 1994 
7.1014.  Below, we examine whether measure 3 is a matter referred to in Article III:4 of the GATT 
1994. We begin by reproducing the text of that Article: 
The products of the territory of any contracting party imported into the territory of 
any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and 
requirements affecting their internal sale, offering for sale, purchase, transportation, 
distribution or use.  The provisions of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the 
economic operation of the means of transport and not on the nationality of the 
product. 
7.1015.  It follows from the wording of this provision that for a measure to be covered by 
Article III:4 of the GATT 1994 it must (i) consist of  a "law, regulation or requirement" and (ii) 
"affect[ing] the internal sale, offering for sale, purchase, transportation, distribution or use" of the 
products concerned.  
7.1016.  With regard to the first element, Panama claims that measure 3 is derived from a law, 
regulation or requirement since it stems from Articles 8, 14 and 15 of the LIG, in conjunction with 
Article 21 of the RIG and the articles incorpor ated after Article 21 of the RIG, and General 
Resolution No. 1122.
1285 Argentina does not appear to contest this point. In our view, the 
provisions cited by Panama fall within the ca tegory of laws, regulations or requirements. 
7.1017.  The main difference between the parties resides in the second element, namely, whether 
measure 3 "affect[s] the internal sa le, offering for sale, purchase, transportation, distribution or 
use" of the products. Taking into account the scope of Panama’s claims, our task is to examine 
whether measure 3 affects the sale, offering for sale, purchase or use of imported products.1286 
Below, we recall the existing precedents that we could use as a guide. 
7.1018.  In US – FSC (Article 21.5 – EC) , the Appellate Body determined that the measure at 
issue, under which a taxpayer seeking to obta in a tax exemption must "ensure that, in the 
manufacture of qualifying property, it does no t 'use' imported input products, whose value  
comprises more than 50 per cent of the fair market value of the end-product", "affected" the 
                                               
1283 Panama’s first written submission, para. 4.263. 
1284 Gains Tax Law, (Exhibits PAN-4 / ARG-42). 
1285 Panama’s first written submission, para. 4.276. 
1286 Panama’s first written submission, para. 4.281. WT/DS453/R 
 
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  internal use of the imported products because it created an incentive for a manufacturer not to use 
imported inputs.1287 In its analysis, the Appellate Body observed that the clause in which the word 
"affecting" appears – "in respect of all laws, regulations and requirements affecting their [the 
products’] internal sale, offering for sale, purchase , transportation, distribution or use" – serves to 
define the scope of application of Article III:4. The word "affecting" would therefore operate as a 
link between the identified types of government action (laws, regulations and requirements) and 
specific transactions, activities and uses relating to products in the marketplace ("internal sale, 
offering for sale, purchase, transportation, distribu tion or use"). The Appellate Body explained that 
it is, therefore, "not any 'laws, regulations and requirements'"  which are covered by Article III:4, 
but "only those which ' affect ' the specific transactions, activities and uses mentioned in that 
provision. Thus, the word 'affecting' assists in defining the types of measure that must conform to 
the obligation not to accord 'less favourable treatment' to like imported products, which is set out 
in Article III:4."1288  
7.1019.  The Appellate Body also considered that the word "affecting" performs a similar function 
in Article I:1 of the GATS1289 and referred to its findings in EC – Bananas III, where it stated that:  
[t]he ordinary meaning of the word "affecting" implies a measure that has "an effect 
on", which indicates a broad scope of application . This interpretation is further 
reinforced by the conclusions of previous panels that the term "affecting" in the 
context of Article III of the GATT is wider in scope than such terms as "regulating" or "governing".
1290 (emphasis added; footnote omitted) 
7.1020.  After referring to its previous report, the Appellate Body in US – FSC (Article 21.5 – EC) 
concluded that in view of the similar function of the identical word, "affecting", in Article III:4 of 
the GATT 1994, this word, in that provision, had a "broad scope of application".1291  
7.1021.  The panel in India – Autos  found that the "indigenization requirements" (requirements to 
use a minimum quantity of domestically produced parts) and the "trade balancing requirements" 
(requirements to export products equivalent in value to the products imported) created incentives for car manufacturers to purchase Indian parts and components rather than imported parts and 
components and, consequently, "affected" the intern al sale, offering for sale, purchase and use of 
imported parts and components in the Indian ma rket within the meaning of Article III:4 of the 
GATT 1994.
1292 The panel maintained that "the fact that a provision is not necessarily primarily 
aimed at regulating the offering for sale or use of the product on the domestic market is thus not 
an obstacle to its 'affecting' them".1293 
7.1022.  In a subsequent case, China – Auto Parts,  the Appellate Body, after referring to the 
above-mentioned reports, confirmed the panel’s finding1294 according to which the measures at 
issue created an incentive for manufacturers to limit their use of imported parts relative to 
                                               
1287 In paragraph 212 of its report in US – FSC (Article 21.5 of the DSU – EC) , the Appellate Body 
offered the following explanation: 
A manufacturer's use of imported  input products always counts against the 50% ceiling in the 
fair market value rule, while in contrast, the same manufacturer's use of like domestic input 
products has no such negative implication. 
1288 Appellate Body Report, US – FSC (Article 21.5 – EC), para. 208.   
1289 Appellate Body Report, US – FSC (Article 21.5 – EC), para. 209. 
1290 Appellate Body Report, EC – Bananas III , para. 220.  
1291 Appellate Body Report, US – FSC (Article 21.5 – EC), para. 210. 
1292 This panel reasoned that to meet the "indig enization requirement", car manufacturers had to 
purchase Indian parts and components rather than im ported goods. Where the trade balancing requirements 
are concerned, the panel thought that  they imposed an additional burd en on car manufacturing companies 
which imported parts (an obligation to export goods of equivalent value). The panel took the view that as the 
use of domestic parts by a manufacturer would not carry this burden, the trade balancing condition created an 
incentive to use domestic parts. See Panel Report, India – Autos , paras. 7.195-7.198 and 7.307-7.309. 
1293 Panel Report, India – Autos , para. 7.305. 
1294 The panel found that "the administrative proc edures imposed on any auto manufacturer using 
imported auto parts as well as the criteria set out in the measures, combined with the assessment of the 
charge which is based on the final assembly internally , create an incentive for auto manufacturers to use 
domestic auto parts instead of impo rted auto parts". See Panel Report, China – Auto Parts,  para. 7.257. WT/DS453/R 
 
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  domestic parts. The Appellate Body explained that these incentives "affect" the conditions of 
competition for imported auto parts on the Chinese internal market.1295  
7.1023.  Consequently, the precedents accord a broad meaning to the scope of application of 
Article III:4 of the GATT 1994 and indicate that that  provision also covers those measures which, 
even though their main objective is not to regulate the internal sale, offering for sale, purchase or 
use of the product, affect the conditions of compet ition of the products in question on the domestic 
market.  
7.1024.  In order to understand the scope of th e broad interpretation described above, we 
consider it appropriate to examine the measures at issue in the different cases concerned. We observe that the common denominator of these measures was the granting of all kinds of incentives to encourage the use of local products to the detriment of imports, that is, in such a 
way as to protect the domestic industry
1296, so that the measures were found to affect the 
conditions of competition in the domestic market. We note that in the case of all these measures there was an obvious link between the incentives an d the origin of the products in question. It was 
therefore logical and reasonable that these measur es, even though they did not directly regulate 
the internal sale, offering for sale, purchase, transportation, distribution or use of these products, should nevertheless have affected these activities because of the advantages they accorded to 
those who opted for the domestic product rather than the imported one.  
7.1025.  In our case, measure 3, judging from its own wording, does not appear to incorporate an 
incentive to encourage the use of local products to  the detriment of imports; in fact, it makes no 
mention of local or imported products. We recall that measure 3 consists of a tool used by the AFIP 
to calculate the tax base for the gains tax in situations in which the Argentine taxpayer has carried 
out transactions with persons established in non-cooperative countries. In these cases, measure 3 orders the use of the transfer price rules and proc edures between related parties, irrespective of 
whether such a relationship exists. 
7.1026.  The fact that measure 3 does not directly regulate the sale, purchase or use of imported 
products would not a priori  be an obstacle to its being able to "affect" those activities within the 
broad meaning of Article III:4, so that Argentina’s argument that measure 3 does not directly 
govern the conditions of purchase or sale of products would not be valid in this respect.
1297 
However, that is not to say that a broad interpretation of the term "to affect" implies that any measure can fall within the scope of Article III:4 of the GATT 1994. If we follow the pattern of 
previous cases, for measure 3 to fall within the scope of that provision, it would have to include a 
certain link with the imported or local products so that it could be established that it affected the conditions of competition of the imported products on the Argentine market.  
7.1027.  Panama argues that measure 3 affects the conditions of competition on the Argentine 
market because the onerous nature of transaction valuation based on the transfer pricing regime, 
due to its administrative and related fiscal consequences, makes it a measure that affects the 
decision-making process of the purchaser of import ed products and, ultimately, the sale. Panama 
also maintains that this measure affects the purchase and use of these imported products, since, given the obligatory onerousness of the measure, a buyer aware of the administrative burdens will 
obviously be discouraged from purchasing and then using products imported from non-cooperative 
countries.
1298  
7.1028.  We are unconvinced by Panama’s summary reasoning in this respect. In our view, the 
broad scope attributed in previous cases to the interpretation of the term "affect" does not mean 
that any measure that might hypothetically affect the conditions of competition of hypothetical 
products could be covered by Article III:4 of the GATT 1994. In this case, we do not consider it proven that, once products from non-cooperative countries have entered the Argentine market, 
                                               
1295 Appellate Body Report, China – Auto Parts , para. 195.  
1296 In this connection, we recall that the Appellate Body stated that "[i]t is well established that the 
general principle expressed in Article III:1 – that internal  measures should not be applied to afford protection 
to domestic production – informs the re st of Article III, including Article III:4. … Article III:4 is, itself, an 
expression of the principle set forth in Article III:1". See Appellate Body Report, EC – Seal Products , 
paras. 5.114 and 5.115 (referring to Appellate Body Report, Japan – Alcoholic Beverages II , p. 18). 
1297 Argentina’s first written submission, para. 712. 
1298 Panama’s responses to Panel questions No. 57 and 90. WT/DS453/R 
 
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  measure 3 affects the conditions of competition of imports from non-cooperative countries on the 
Argentine market in such a way that the domestic industry is protected. 
7.1029.  Consequently, the panel considers that Panama has failed to demonstrate that measure 3 
(transaction valuation based on transfer prices) falls within the scope of Article III:4 of the 
GATT 1994, and that it is therefore also no t covered by Article I:1 of the GATT 1994. 
7.1030.  We proceed now to examine Panama’s alternative argument, namely, whether measure 3 
is a rule and formality in connection with importation or exportation within the meaning of 
Article I:1 of the GATT 1994. 
7.4.2.2.4.2  Whether measure 3 is a rule and formality in connection with importation or 
exportation within the meaning of  Article I:1 of the GATT 1994 
7.1031.  We recall that measure 3 consists in th e application of transaction valuation methods 
based on transfer prices for the purpose of dete rmining the tax base for the gains tax payable by 
Argentine taxpayers, with respect to transactio ns effected with persons from non-cooperative 
countries. Accordingly, like measure 2, measure 3 is a tool for determining the tax base for the 
gains tax payable by the Argentine taxpayer. Arge ntina maintains this measure under paragraph 5 
of Article 8 of the LIG.1299 
7.1032.  With respect to the notion of "rule", we  refer to the conclusions of our examination of 
measure 2.1300 We therefore consider that paragraph 5 of  Article 8 of the LIG, by which measure 3 
is maintained, can be characterized as a "rule" (" reglamento ", "réglementation" ). However, as in 
the case of measure 2, it does not seem that such legal provisions can be characterized as "formalities", in the Spanish sense of "[ c]ada uno de los requisitos para ejecutar algo " (each of the 
requirements for carrying something out) or "[ m]odo de ejecutar con la exactitud debida un acto 
público " (way of correctly executing a public instrument).
1301 
7.1033.  We also refer to our conclusions in relation to measure 2, according to which for a 
measure to be regarded as a rule in connection with (" relativo a ") exportation (or importation), 
there must be a certain association, link or logical relationship between the measure and exportation (or importation).
1302 To establish whether there is such an association, link or logical 
relationship between measure 3 and exportation or importation, we will examine the core features 
that define the centre of gravity of the measure. 
7.1034.  However, we note that Panama has not explained how, in its view, measure 3 is "in 
connection with" importation or exportation. As it has not put forward any arguments in this 
respect, we conclude that Panama has failed to demonstrate that measure 3 is a rule and formality 
in connection with importation or exportation wi thin the meaning of Article I:1 of the GATT 1994. 
7.1035.  Consequently, the Panel refrains from making a finding in relation to Panama’s claim 
under Article I:1 of the GATT 1994. 
7.4.2.2.5  Conclusion  7.1036.  Having concluded that Panama has failed to demonstrate that measure 3 constitutes "a 
matter referred to in Article III:4" or "a rule and formality in connection with exportation or 
importation" within the meaning of Article I:1 of the GATT 1994, the Panel does not deem it necessary to continue the analysis of Panama’s claim concerning the inconsistency of measure 3 with Article I:1 of the GATT 1994.  
7.1037.  In view of the foregoing, the Panel di smisses Panama’s claim under Article I:1 of the 
GATT 1994, because Panama has failed to demonstrate that measure 3 (transaction valuation based on transfer prices) constitutes "a matter referred to in Article III:4" or "a rule and formality 
in connection with exportation or importation" wi thin the meaning of Article I:1 of the GATT 1994. 
                                               
1299 Gains Tax Law, (Exhibits PAN-4 / ARG-42). 
1300 See paras. 7.981 and 7.982 above. 
1301 Diccionario de la Lengua Española , 23rd edition, Real Academia Española (Espasa Calpe, 2014), 
Vol. I, p. 1047. 
1302 See paras. 7.984 and 7.985 above. WT/DS453/R 
 
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  7.4.3  Panama’s claims under Article III:4 of the GATT 1994  
7.4.3.1  Main arguments of the parties 7.4.3.1.1  Panama 7.1038.  Panama claims that measure 3 is inconsistent with Article III:4 of the GATT 1994
1303 
because making Argentine taxpayers subject to th e transfer pricing regime for the valuation of 
imported goods when sold by persons from non-cooperative countries means that those goods are accorded treatment less favourable than that granted to domestic goods sold by persons located in 
Argentina.
1304 
7.1039.  According to Panama, to be covered by this provision a measure does not have to govern 
the purchase or sale of products directly. What is important is to determine that (i) the measure is contained in a law, regulation or requirement, with in the meaning of Article III:4, and that (ii) it 
affects the sale, offering for sale, purchase or use of imported products. Panama claims that both 
requirements are met in relation to measure 3.
1305 
7.1040.  Panama claims that measure 3 is cove red by Article III:4 of the GATT 1994 since it 
derives from a law, regulation or requirement, inas much as it is based on Articles 8, 14 and 15 of 
the LIG, in conjunction with Article 21 of the RIG and the articles incorporated after Article 21 of 
the RIG, and General Resolution No. 1122.1306 According to Panama, measure 3 is "a measure 
linked with the determination of gains tax".1307 Panama argues that measure 3 is a measure that 
affects the internal sale, purchase or use of products on the Argentine market and that, accordingly, it falls within the scope of applicat ion of Article III:4 and, hence, Article I:1 of the 
GATT 1994. Panama explains that the onerous na ture of transaction valuation based on the 
transfer pricing regime, due to its administrative and related fiscal consequences, makes it a 
measure that affects the process of decision-makin g by the purchaser of imported products and, 
ultimately, the sale. Panama maintains that this measure also affects the purchase and use of the 
imported products, since, given the obligatory on erousness of the measure, a buyer aware of the 
administrative burdens will obviously be discour aged from purchasing and then using products 
imported from non-cooperative countries. Panama stresses that it is not a measure which imposes 
a tax, as such.
1308 
7.1041.  Panama argues that in previous case s the scope of Article III:4 of the GATT 1994 was 
understood to be broad and to cover all those measures that alter or could alter the conditions of competition in the marketplace. Panama cites the Appellate Body report in US – FSC  in order to 
argue that, as in the context of Article I:1 of th e GATS, the word "affect" in Article III:4 of the 
GATT 1994 denotes a measure that has "an effect on" and, therefore, the word "affecting" has "a broad scope of application".
1309 Moreover, Panama explains that, in China – Auto Parts , the 
Appellate Body considered that the measures at issue created incentives for the use of domestic 
parts since they imposed administrative procedures, and associated delays, on automobile manufacturers using imported parts. In the opinion of the Appellate Body, such incentives 
"affected" the conditions of competition for imported auto parts relative to domestic auto parts on 
the Chinese internal market.
1310 
7.1042.  Panama claims that, since the distinction is based on the origin of the products, the 
requirement of likeness between the imported and the domestic products is met.1311 Panama 
considers that a measure does not have to mention specific products as long as it affects 
importation within the framework of Article III:4 of the GATT 1994. In its opinion, if a measure 
distinguishes between import transactions on the basis of origin, the case law has established that 
                                               
1303 Request for the establishment of  a panel submitted by Panama.  
1304 Panama’s first written submission, para. 4.271. 
1305 Panama’s response to Panel question No. 57. 
1306 Panama’s first written submission, para. 4.276. 
1307 Panama’s first written submission, para. 4.263. 
1308 Panama’s response to Panel questions No. 57 and 90. 
1309 Panama’s response to Panel question  No. 90 (citing Appellate Body Report, US – FSC , para. 210). 
1310 Panama’s response to Panel question  No. 90 (citing Appellate Body Report, China – Auto Parts , 
para. 195). 
1311 Panama’s first written submission, paras. 4.277 and 4.278 (citing Panel Report, China – Publications 
and Audiovisual Products , para. 7.975). WT/DS453/R 
 
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  the measure affects like products.1312 In reply to Argentina’s argument to the effect that products 
imported from non-cooperative countries and those of domestic origin have "intrinsic differences", Panama argues that the criterion of product "liken ess" based on the origins indicated by Argentina 
in a politically established list in no way corresponds to "intrinsic differences" between the 
products.
1313  
7.1043.  According to Panama, the subjection of goods imported from persons located in non-
cooperative countries to the transfer pricing regi me imposes on the Argentine taxpayer additional 
administrative requirements, economic charges and tax contingencies not imposed on transactions 
involving goods of Argentine origin. In Panama’s opinion, because of their onerous nature for a purchaser in Argentina, these requirements and ch arges deprive the imported products of effective 
opportunities for competing in the Argentine market
1314 and therefore the measure in question 
accords products originating in or coming from non-cooperative countries treatment less 
favourable than that granted to like products of domestic origin.1315 
7.4.3.1.2  Argentina 
7.1044.  Argentina responds that Panama has failed to demonstrate that measure 3 is inconsistent 
with Article III:4 of the GATT 1994. According to Ar gentina, the transfer price regulations establish 
rules relating to the calculation of income subject to tax in Argentina in transactions between 
Argentine taxpayers and related parties located abroad. Argentina explains that this "measure lays 
down the criteria for establishing the true value of the transaction as if it were an 'arm's [length] 
transaction for the purposes of gains tax assessment and collection in Argentina".1316 In 
Argentina’s opinion, requesting detailed information with respect to the value of each transaction, 
like the estimation of alternative values derived from the application of the various methods of 
valuation provided for in Article 15 of the LIG, does not affect the internal sale, offering for sale, purchase, transportation, distribution or use of these products or alter the conditions of 
competition to the detriment of the imported products.
1317 
7.1045.  Argentina maintains that even assuming, for the sake of argument, that the transfer 
pricing regime is a measure that falls within the scope of Article III:4 of the GATT 1994, Panama 
has not identified the specific products affected by the measure challenged, so that it is not 
possible to assess their likeness with the domestic products.1318 Argentina argues that Panama has 
failed to demonstrate that the products in question  are "like" within the meaning of Article III:4 of 
the GATT 1994.1319 Argentina refers to the Appellate Body report in  US – Clove Cigarettes  in order 
to argue that the regulatory concerns underlying a measure may be relevant to the analysis of the 
likeness criteria under Article III:4 of the GATT 1994,  "'to the extent they have an impact on the 
competitive relationship between and among the products concerned'".1320 For Argentina, the 
regulatory concerns that led it to distinguish between cooperative and non-cooperative countries 
have a direct impact on the conditions of competition between the market products of the categories of countries in question, and for the same reasons it suggests that these products are 
not "like" within the meaning of Article III:4 of the GATT 1994.
1321  
7.1046.  Argentina argues that it is not enough to assert that measure 3 has an effect "in favour 
of" products of domestic origin to affirm that the measure accords "less favourable treatment", but that Panama should have shown that measure 3, linked to a direct tax applicable to all Argentine 
taxpayers, is applied to imported products in such a way as to protect the domestic industry.
1322  
                                               
1312 Panama’s second written submission, para. 2.485. 
1313 Panama’s second written submission, para. 2.486 (r eferring to Argentina’s first written submission, 
para. 721). 
1314 Panama’s first written submission, para. 4.279; and second written submission, para. 2.486. 
1315 Panama’s first written submission, para. 4.280. 
1316 Argentina’s second written submission, para. 99. 
1317 Argentina’s first written submission, para. 712; and second written submission, para. 99. 
1318 Argentina’s first written submission, paras. 718 and 719. 
1319 Argentina’s second written submission, para. 100. 
1320 Argentina’s second written submission, para. 100 (citing Appellate Body Report, US – Clove 
Cigarettes , para. 119) (emphasis original). 
1321 Argentina’s second written submission, para. 100. 
1322 Argentina’s comments on Panama’s response to Panel question No. 90. WT/DS453/R 
 
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  7.1047.  Argentina asserts that any differential tr eatment there may be derives from the intrinsic 
characteristics of the products and is not the resu lt of the application of the measure. Argentina 
points out that the requirements laid down for imported products are not "additional requirements" since they are aimed at obtaining adequate informat ion. As evidence of this, Argentina notes that 
these requirements also apply to domestic pr oducts in the case of related enterprises.
1323 
7.4.3.2  Assessment by the Panel 7.1048.  Given our conclusion in paragraph 7.1036 above, to the effect that Panama has failed to 
demonstrate that measure 3 is a matter referred to in Article III:4 of the GATT 1994, the Panel 
does not consider it necessary to continue the analysis of Panama’s claim relating to the inconsistency of measure 3 with Article III:4 of the GATT 1994. 
7.1049.  In view of the foregoing, the Panel di smisses Panama’s claim under Article III:4 of the 
GATT 1994 because Panama has failed to demonstrate that measure 3 (transaction valuation 
based on transfer prices) is a matter referred to in Article III:4 of the GATT 1994. 
7.4.4  Panama’s claims under Article XI:1 of the GATT 1994 
7.4.4.1  Main arguments of the parties 
7.4.4.1.1  Panama 7.1050.  Panama claims, alternatively to its cl aim under Article III:4 of the GATT 1994, that 
transaction valuation based on the transfer pricing regime is inconsistent with Article XI:1 of the 
GATT 1994.
1324 According to Panama, the measure in question is a restriction on the importation 
and exportation of goods within the meaning of Article XI:1 of the GATT 1994 because "the requirements, procedures and charges deriving from  the transfer pricing regime impose restrictive 
conditions on the importation and exportation of goods sold by persons located in [non-
cooperative] countries".
1325  
7.1051.  In response to Argentina’s argument that the requirement of transaction valuation based 
on transfer prices is in the nature of a tax an d hence is not covered by the GATS, Panama claims 
that the measure is based on methodological requirements, administrative formalities and costs even though it does not impose a tax as such. In Panama’s opinion, if Argentina’s assertion were 
correct, Argentina would be acknowledging that the measure is a tax measure and, as such, 
clearly covered by Article I:1 of the GATT 1994.
1326 According to Panama, measure 3 is "a measure 
linked with the determination of gains tax"1327 but is not a measure that qualifies as a customs 
duty, tax or other charge. The charges imposed by  measure 3 do not, as such, impose a tax but 
impose costs on the purchase of goods coming from or destined for non-cooperative countries, 
altering the decision-making process with respect to the purchase or sale of those products.1328  
7.1052.  Panama observes that the procedure imposed by measure 3 is complex1329 and does not 
necessarily lead to a clear solution. In Panama’s opinion, if taxpayers fail to meet the information 
requirements imposed by the regulations, th ey could be exposed to sanctions and fines.1330 
Panama points out that even compliance with the relevant requirements and procedures could give 
rise to corrections leading to an increase in the tax burden or sanctions of other kinds.1331 
According to Panama, given the complexities of the regime, the pragmatic alternative would be to avoid goods transactions with persons domiciled in non-cooperative countries and thus be spared 
                                               
1323 Argentina’s first written submission, paras. 721-723. 
1324 Panama’s request for the establ ishment of a panel, p. 4.  
1325 Panama’s first written submission, para. 4.291. See also Panama’s second written submission, 
para. 2.490. 
1326 Panama’s second written submission, para. 2.489 (r eferring to Argentina’s first written submission, 
para. 728). 
1327 Panama’s first written submission, para. 4.263. 
1328 Panama’s response to Panel questions No. 58 and 91. 
1329 Panama indicates that the procedure takes between 3 and 10 weeks. See Panama’s first written 
submission, para. 4.237. 
1330 Panama’s first written submission, para. 4.238. 
1331 Panama’s first written submission, para. 4.241. WT/DS453/R 
 
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  the fiscal, economic and administrative charges to which that option would give rise.1332 Hence 
Panama believes that measure 3 acts as a limiting condition on purchases (imports) and sales (exports), thereby constituting a restriction on the importation and exportation of goods.
1333 
7.4.4.1.2  Argentina 
7.1053.  Argentina claims that Panama has failed to show that measure 3 constitutes a measure 
maintained "on the importation" or "on the exportation" of any product under Article XI:1 of the GATT 1994. Argentina points out that the challenged measure does not fall within the scope of 
Article XI:1 since it is a tool for determining the tax base which, by its design, structure and 
architecture, takes the form of a tax.
1334 For Argentina, this measure imposes methods for 
determining income subject to internal taxation in Argentina. In its opinion, the fact that that income may derive in part from import or export transactions does not suggest that Argentina’s 
internal tax measures are border measures subject to the obligation under Article XI:1 of the GATT 
1994.
1335 Argentina recalls that Articles 8 and 15 of the LIG fall within the context of Chapter I 
"Subject and Object of the Tax", so that they are part of the tax insofar as they determine two of 
its basic elements. In Argentina’s opinion, it is not possible, as Panama contends, to separate the 
components of the tax, as if there could be a tax without a subject or object or a tax base.1336  
7.1054.  It is Argentina’s understanding that what Panama calls "methodological requirement" is 
that which defines the basis of assessment within the object of the tax, in accordance with the title 
of Chapter I of the LIG. Argentina refers to the exhibit " Principios Constitucionales en Materia 
Tributaria " (Constitutional Principles on Tax Matters) submitted by Panama (Exhibit PAN-83) and 
explains that the table in which the rule of law is summarized states that "there can be no tax 
without a legal basis" and that "in order to be imposed a tax must meet the formal requirements 
of a law" and that "the law must define the ta xable event and the elements thereof: subject, 
object, tax base and tax rate". For Argentina, this means that "the determination of the tax base is 
subject to a constitutionally enforced legality requirement that is inherent in the tax as such" and 
that "'tax' is nothing other than the conjunction of subject, object, tax base and tax rate". Therefore, Argentina argues, "tax as such", as defined by Panama, must be similarly understood. 
So measure 3 is excluded from the scope of Arti cle XI:1 of the GATT 1994 since that provision is 
not applicable with respect to taxes.
1337  
7.1055.  Argentina also claims that, in the event that the Panel might consider that the measure in 
question does not constitute a tax and is subjec t to Article XI:1 of the GATT 1994, Panama has 
failed to show that the measure constitutes a "limiting condition" within the meaning of 
Article XI:1 of the GATT 1994.1338 Argentina maintains that the measure does not constitute a 
"limiting condition" on importation given that it only operates once the products have entered the 
Argentine market and has a tax assessment and collection function.1339 It is the tax authorities, 
not the customs authorities, that verify compliance with the measure.1340 Moreover, Argentina 
claims that Panama has failed to show that this measure involves a restriction on importation 
and/or exportation that can be expressed in "quantitative terms".1341 
7.1056.  Argentina seeks support in the Appellate Body report in China – Auto Parts , according to 
which a panel should examine the "core features" of the measure in question, that is to say, those that define its "centre of gravity", in order to determine whether it is a border measure or an 
internal measure.
1342 Argentina argues that measure 3 is clearly aimed at determining the amount 
of income received by Argentine taxpayers with a view to assessing their internal taxes, separately from and independently of the duties or charges that may have been levied at the border when the 
goods were originally imported or exported. In Argentina’s opinion, the fact that part of the income 
                                               
1332 Panama’s first written submission, para. 4.284. 
1333 Panama’s second written submission, para. 2.490. 
1334 Argentina’s first written submission, paras. 728 and 731. 
1335 Argentina’s second written submission, para. 97. 
1336 Argentina’s response to Panel question No. 94. 
1337 Argentina’s response to Panel question No. 94. 
1338 Argentina’s first written submission, para. 727; and response to Panel question No. 94. 
1339 Argentina’s first written submission, para. 734. 
1340 Argentina’s first written submission, para. 735. 
1341 Argentina’s first written submission, para. 743. 
1342 Argentina’s second written submission, para. 97 (citing Appellate Body Report, China – Auto Parts , 
para. 171). WT/DS453/R 
 
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  subject to taxation in Argentina may come from import or export operations does not suffice to 
show that the "centre of gravity" of the taxes on income or profits in Argentina is the importation 
or exportation of goods.1343 Argentina maintains that Panama appears to agree with Argentina in 
this respect.1344 Argentina also relies on the panel report in Dominican Republic – Import and Sale 
of Cigarettes , according to which "not every measure affecting the opportunities for entering the 
market would be covered by Article XI, but only those measures that constitute a prohibition or restriction on the importation of products, i.e. those measures which affect the opportunities for 
importation itself." 
1345  
7.4.4.2  Assessment by the Panel 7.4.4.2.1  Introduction 7.1057.  The question placed before the Panel is whether, as Panama maintains, measure 3 is 
inconsistent with Article XI:1 of the GATT 1994. This is an alternative claim to that made under 
Article III:4 of the GATT 1994. As we have concluded that measure 3 is not covered by 
Article III:4, we now proceed to examine Panama’s alternative or subsidiary claim under 
Article XI:1 of the GATT 1994.  
7.1058.  As with Panama’s other claims under the GATT 1994, Argentina argues that the 
challenged measure does not fall within the scope of application of Article XI:1 of the 
GATT 1994.
1346 
7.1059.  We will begin by examining the text of Article XI:1 of the GATT 1994 in order to establish 
the legal standard applicable, taking into account the way in which it has been interpreted by previous panels and the Appellate Body. 
7.4.4.2.2  The relevant legal provision 
7.1060.  Article XI:1 of the GATT 1994 reads as follows: 
No prohibitions or restrictions other than duties, taxes or other charges, whether 
made effective through quotas, import or ex port licences or other measures, shall be 
instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of 
any product destined for the territory of any other contracting party.  
7.1061.  Thus, this provision seeks to eliminate prohibitions and restrictions (i) on the importation 
of any product of the territory of any other contracting party, or (ii) on the exportation or sale for export of any product destined for the territory of  any other contracting party. We note that the 
text of Article XI:1 provides for the elimination of prohibitions and restrictions "other than duties, 
taxes or other charges". In China – Raw Materials , the Appellate Body confirmed that "duties, 
taxes or other charges" were excluded from the scope of application of Article XI:1 of the GATT 
1994.
1347 
7.1062.   In that case the Appellate Body examined  the concepts of "prohibition" and "restriction". 
The Appellate Body pointed out that the word "prohibition" ( "prohibición ") is defined as "a legal 
ban on the trade or importation of a specified commodity"1348 and "restriction" ( "restricción ") is 
defined as "[a] thing which restricts someone or something, a limitation on action, a limiting condition or regulation"
1349 "and thus refers generally to something that has a limiting effect".1350 
                                               
1343 Argentina’s second written submission, para. 97. 
1344 Argentina’s second written submission, footnote 64 (referring to Panama’s first written submission, 
para. 4.263). 
1345 Argentina’s response to Panel question No. 94 (citing Panel Report, Dominican Republic – Import 
and Sale of Cigarettes, para. 7.261) . 
1346 Argentina’s first written submission, paras. 728 and 731. 
1347 Appellate Body Report, China – Raw Materials , para. 321.  
1348 Appellate Body Report, China – Raw Materials , para. 319 (referring to the Shorter Oxford English 
Dictionary , 6th edition, W.R. Trumble, A. Stevenson (editors) (Oxford University Press, 2007), Vol. 2, p. 2363). 
1349 Appellate Body Report, China – Raw Materials , para. 319 (referring to the Shorter Oxford English 
Dictionary , 6th edition, W.R. Trumble, A. Stevenson (editors) (Oxford University Press, 2007), Vol. 2, p. 2553). WT/DS453/R 
 
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  In previous cases, panels opted to accord a broad meaning to the concept of "restriction"1351, 
concluding that Article XI:1 is applicable to conditions which are "limiting" or have a "limiting effect".
1352 
7.1063.  The Appellate Body also noted that Article XI of the GATT 1994 is entitled "General 
Elimination of Quantitative Restrictions". After mentioning previous occasions on which reference 
had been made to the title of a provision in in terpreting the requirements laid down therein1353, it 
considered that the use of the word "quantitative" in the title of Article XI informs the 
interpretation of the terms "restriction" and "pro hibition". The Appellate Body concluded that the 
title "suggests that Article XI of the GATT 1994 cove rs those prohibitions and restrictions that have 
a limiting effect on the quantity or amount  of a product being imported or exported".1354  
7.1064.  We begin by examining whether measure 3 is covered by Article XI:1 of the GATT 1994. 
7.4.4.2.3  The question of whether measur e 3 is covered by Article XI:1 of the 
GATT 1994 
7.1065.  We recall that Panama claims that measure 3 is a restriction on the importation and 
exportation of goods. Before examining whether measure 3 constitutes a quantitative restriction, 
we will proceed to determine whether, as Argentina argues, this measure constitutes a tax, which would exclude it from the scope of Article XI:1 of  the GATT 1994 by virtue of the wording of the 
provision itself, which bans prohibitions and restrictions "other than duties, taxes or other 
charges". 
7.1066.  We agree with the panel in Brazil – Retreaded Tyres
1355 that to determine whether a 
measure falls within the types of measures covered by Article XI:1 of the GATT 1994 we must 
examine its nature.  
7.1067.  We recall that measure 3 consists in th e application of transaction valuation methods 
based on transfer prices for the purpose of dete rmining the tax base for the gains tax payable by 
Argentine taxpayers in connection with transactio ns effected with persons from non-cooperative 
countries. Therefore, measure 3 is a tool for determining the tax base for the tax on the gains of the Argentine taxpayer. Argentina maintains this measure under paragraph 5 of Article 8 of the 
LIG.
1356 As Argentina points out1357, both provisions come within the framework of Chapter I of the 
LIG entitled "Subject and Object of the Tax", so th at they form part of the provisions that govern 
two of the elements of a tax. As Argentina also points out (and as we have previously explained) the "Principios Constitucionales en Materia Tributaria " (Constitutional Principles on Tax Matters) 
specify that "there can be no tax without a legal basis" and that "the law must define the taxable 
event and the elements thereof: subject, object, tax base and tax rate".
1358 In our view, the 
nature of a tool used to calculate the tax base, that  is, one of the elements of gains tax, cannot, in 
the present case, be other than fiscal. Consequently, we consider that the fiscal nature of 
measure 3 excludes it from the scope of a pplication of Article XI:1 of the GATT 1994. 
7.4.4.2.4  Conclusion 
7.1068.  Having concluded that measure 3 is fiscal in nature and therefore is not covered by the 
disciplines of Article XI:1, the Panel does not consider it necessary to continue its analysis of Panama’s claim concerning the inconsistency of measure 3 with Article XI:1 of the GATT 1994. 
                                                                                                                                               
1350 Appellate Body Report, China – Raw Materials , para. 319.  
1351 Panel Report, India – Quantitati ve Restrictions , para. 5.128. 
1352 Panel Reports, India – Autos , para. 7.270; Colombia – Ports of Entry , paras. 7.233 and 7.234; Brazil 
– Retreaded Tyres , para. 7.371; and  Dominican Republic – Impo rt and Sale of Cigarettes , paras. 7.252 and 
7.258. 
1353 The Appellate Body in China – Raw Materials  refers to its reports in US – Softwood Lumber IV , 
para. 93, and  US – Carbon Steel , para. 67. 
1354 Appellate Body Report, China – Raw Materials , para. 320.  
1355 Panel Report, Brazil – Retreaded Tyres, para. 7.372. 
1356 Gains Tax Law, (Exhibits PAN-4 / ARG-42). 
1357 Argentina’s response to Panel question No. 94. 
1358 Constitutional Principles on Tax Ma tters, (Exhibit PAN-83), pp. 1 and 2. WT/DS453/R 
 
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  7.1069.  In view of the foregoing, the Panel dismisses Panama’s claim under Article XI:1 of the 
GATT 1994 because measure 3 (transaction valuatio n based on transfer prices), being fiscal in 
nature, is not covered by that provision. 
7.4.5  Argentina’s defence under Article XX(d) of the GATT 1994 
7.4.5.1  Main arguments of the parties 
7.4.5.1.1  Argentina 7.1070.  In the event that the Panel should find that Argentina acted inconsistently with 
Articles I:1, III:4 and XI:1 of the GATT 1994 with respect to the measures in question, Argentina 
argues that it has shown that its measures are justified under Article XX(d) of the GATT 1994. To this end, Argentina incorporates for reference the arguments it provided in relation to Article XIV(c) of the GATS as a basis for concludi ng that the treatment it applies to the entry of 
funds as an unjustified increase in wealth (measure 2) and its transaction valuation regime based 
on transfer price methodologies (measure 3) are "necessary to secure compliance with laws or 
regulations" within the meaning of Article XX(d) of the GATT 1994.
1359 
7.4.5.1.2  Panama 
7.1071.  In response to Argentina’s defence under Article XX(d) of the GATT 1994, Panama argues 
that Argentina has invoked that provision without even identifying the specific laws or regulations 
with which it is sought to secure compliance through the application of the transfer pricing regime. 
According to Panama, without this basis, it is impossible to establish whether the measure in question is intended, or necessary, to achieve the compliance objective protected under Article XX(d) of the GATT 1994.
1360  
7.1072.  Panama argues that the application of the presumption of unjustified increase in wealth 
(measure 2)1361 and the transfer pricing regime (measure 3)1362, on the basis of a list of 
cooperative countries that does not correspond to objective criteria with respect to countries that 
face like conditions with regard to tax transparency and information exchange, constitutes a 
means of arbitrary and unjustifiable discrimination between countries where like conditions prevail. 
7.4.5.2  Assessment by the Panel 
7.1073.  We recall that, in the event of measure 2 being found to be inconsistent with Article I:1 of 
the GATT 1994 and measure 3 inconsistent with Articles I:1, III:4 and/or XI:1 of the GATT 1994, Argentina invokes the exception under Article XX(d) of the GATT 1994 to justify both measures.
1363 Having dismissed Panama’s claims under Article I:1 of the GATT 1994 (in relation to 
measure 2 and measure 3) and under Articles III:4 and XI:1 of the GATT 1994 (in relation to 
measure 3), the Panel refrains from ruling on whether these measures are covered under the exception provided for in Article XX(d) of the GATT 1994. 
8  CONCLUSIONS AND RECOMMENDATIONS 
8.1.  As set out in greater detail above, the Panel finds that, with respect to the Panel’s terms of 
reference: 
a. the replacement of Decree No. 1344/1998, as amended by Decree No. 1037/2000, by 
Decree No. 589/2013 does not prevent us from examining the eight measures at issue in the light of the system introduced by Decree No. 589/2013, in which a distinction is made between cooperative and non-cooperative countries; 
                                               
1359 Argentina’s second written submission, para. 101. 
1360 Panama’s second written submission, paras. 2.384 and 2.493. 
1361 Panama’s second written submission, para. 2.385. 
1362 Panama’s second written submission, para. 2.493. 
1363 Argentina’s first written submission, para. 746. See also second written submission, para. 101. WT/DS453/R 
 
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  b. measure 5 (requirements relating to reinsurance services), as elaborated by Article 4 of 
SSN Resolution No. 35.794/2011 and in conformity with the amendment introduced by SSN Resolution No. 38.284/2014, forms part of the Panel’s terms of reference;  
c. measure 5 (requirements relating to reinsu rance services) covers only reinsurance 
services and therefore does not cover retrocession services. 
8.2.  With respect to the claims made by Panama under the GATS, the Panel finds as follows: 
a. having determined that Panama has demonstr ated that there is trade in services and 
that the eight measures at issue in the present dispute are measures "affecting trade in 
services" within the meaning of Article I:1 of the GATS, the GATS is applicable to 
measure 1 (withholding tax on payments of interest or remuneration), measure 2 (presumption of unjustified increase in wealth), measure 3 (transaction valuation based 
on transfer prices), measure 4 (payment receiv ed rule for the allocation of expenditure), 
measure 5 (requirements relating to reinsura nce services), measure 6 (requirements for 
access to the Argentine capital market), measure 7 (requirements for the registration of 
branches) and measure 8 (foreign ex change authorization requirement); 
b. measure 1 (withholding tax on payments of interest or remuneration), measure 2 
(presumption of unjustified increase in wealth), measure 3 (transaction valuation based 
on transfer prices), measure 4 (payment receiv ed rule for the allocation of expenditure), 
measure 5 (requirements relating to reinsura nce services), measure 6 (requirements for 
access to the Argentine capital market), measure 7 (requirements for the registration of branches) and measure 8 (foreign exchange au thorization requirement) are inconsistent 
with Article II:1 of the GATS because they do not accord, immediately and 
unconditionally, to services and service supp liers of non-cooperative countries treatment 
no less favourable than that which they accord to like services and service suppliers of 
cooperative countries; 
c. measure 2 (presumption of unjustified increase in wealth), measure 3 (transaction 
valuation based on transfer prices), and measure 4 (payment received rule for the 
allocation of expenditure) are not inconsistent with Article XVII of the GATS because 
they accord to services and service suppliers of non-cooperative countries treatment no less favourable than that which they accord to like Argentine services and service suppliers, in the relevant services and modes in which Argentina has undertaken specific 
commitments; 
d. measure 1 (withholding tax on payments of interest or remuneration), measure 2 
(presumption of unjustified increase in wealth), measure 3 (transaction valuation based 
on transfer prices), measure 4 (payment receiv ed rule for the allocation of expenditure), 
measure 7 (requirements for the registration of branches) and measure 8 (foreign exchange authorization requirement) ar e not covered under the exception of 
Article XIV(c) of the GATS because their application constitutes arbitrary and 
unjustifiable discrimination within the meaning of the chapeau  of Article XIV of the 
GATS; 
e. measure 5 (requirements relating to reinsurance services) and measure 6 (requirements 
for access to the Argentine capital market) are not covered by paragraph 2(a) of the 
Annex on Financial Services because they we re not taken for prudential reasons within 
the meaning of that provision. 
8.3.  Further in relation to Panama’s claims under the GATS, the Panel dismisses  Panama’s claim 
under Article XVI:2(a) of the GATS because me asure 5 (requirements relating to reinsurance 
services) is not covered by that provision, inasmuch as it does not regulate service suppliers within 
the meaning of Article XVI:2(a) of the GATS.  
8.4.  The Panel also dismisses  Panama’s claim under Article XVI:1 of the GATS with respect to 
measure 5 (requirements relating to reinsurance services) because Panama has failed to establish a prima facie  case of inconsistency in this respect. 
 
8.5.  Moreover, as we have found that measure 2 (presumption of unjustified increase in wealth), 
measure 3 (transaction valuation based on transfer prices) and measure 4 (payment received rule WT/DS453/R 
 
- 248 - 
 
  for the allocation of expenditure) are not inconsis tent with Article XVII of the GATS because they 
accord to services and service suppliers of non-cooperative countries treatment no less favourable than that which they accord to like Argentine services and service suppliers, in the relevant services and modes in which Argentina has undertaken specific commitments, the Panel refrains 
from ruling  on whether these measures are covered under the exception provided for in Article 
XIV(d) of the GATS. 
8.6.  With respect to Panama’s claims under the GATT 1994: 
a. the Panel dismisses  Panama’s claim under Article I:1 of the GATT 1994, because Panama 
has failed to demonstrate that measure 2 (presumption of unjustified increase in wealth) constitutes a "rule and formality in connection with exportation" or "a charge imposed on the international transfer of payments for … ex ports" within the meaning of Article I:1 of 
the GATT 1994; 
b. the Panel also dismisses  Panama’s claim under Article I:1 of the GATT 1994, because 
Panama has failed to demonstrate that measure 3 (transaction valuation based on 
transfer prices) constitutes "a matter referred to in Article III:4" or "a rule and formality 
in connection with exportation or importation" within the meaning of Article I:1 of the GATT 1994; 
c. likewise, the Panel dismisses  Panama’s claim under Article III:4 of the GATT 1994, 
because Panama has failed to demonstrate that measure 3 (transaction valuation based on transfer prices) is a matter referred to in Article III:4 of the GATT 1994; 
d. the Panel also dismisses  Panama’s claim under Article XI:1 of the GATT 1994, because 
measure 3 (transaction valuation based on transfer prices), being fiscal in nature, is not 
covered by that provision. 
8.7.  Finally, also with respect to Panama’s claims under the GATT 1994, having dismissed 
Panama’s claims under Article I:1 of the GATT 1994 (in relation to measure 2 – presumption of 
unjustified increase in wealth – and measure 3 – transaction valuation based on transfer prices) 
and Articles III:4 and XI:1 of the GATT 1994 (in relation to measure 3 – transaction valuation 
based on transfer prices), the Panel  refrains from ruling  on whether these measures are covered 
under the exception provided for in Article XX(d) of the GATT 1994. 
8.8.  In accordance with the provisions of Article 19.1 of the DSU, having found Argentina’s actions 
to be inconsistent with its obligations under Article II:1 of the GATS, we recommend that the DSB 
request Argentina to bring its measures into conformity with its obligations under the GATS. 
_______________ 
  
  WT/DS453/R  
 
- 249 - APPENDIX 1. – ARGENTINA'S SCHEDULE OF SPECIFIC COMMITMENTS (GATS/SC/4) OF 15 APRIL 1994 
(This is authentic in Spanish only) 
Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
I. HORIZONTAL COMMITMENTS  
ALL SERVICES INCLUDED IN 
THIS SCHEDULE    
 (3) Acquisition of land: unbound in frontier 
areas (150 km in land frontier areas and 50 km in coastal areas)   
 (4) Unbound, except for measures concerning 
the following categories of personnel: (4) Unbound, except for measures concerning 
the categories of personnel indicated in the market access column  
  Senior personnel 
 Managers: persons in an enterprise or 
organization who primarily direct a department or subdivision. They supervise and control the work of  other supervisory, 
professional or managerial staff. They have the authority to hire or dismiss personnel, recommend their hiring or dismissal or take other personnel action such as promotion or 
leave authorization. They exercise discretionary authority over day-to-day activities. Does not include first-line supervisors unless those supervised are 
professionals, nor em ployees who primarily 
perform tasks required for the provision of the service. 
    
  WT/DS453/R  
 
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Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
  Executives:   persons in the organization 
who primarily direct th e management of the 
organization.  They exercise wide latitude in decision-making and receive only supervision 
or direction from high-level executives, the board of directors or stockholders.  They do not directly perform tasks related to the provision of the service(s) of the organization  
 Specialists: persons in an enterprise or 
organization who possess knowledge at an advanced level of expertise and who possess proprietary knowledge of the organization's services, research equi pment, techniques or 
management. Independent professionals may be included in this category.    
  WT/DS453/R  
 
- 251 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
II. SECTOR SPECIFIC COMMITMENTS 
1. BUSINESS SERVICES 
 
A. Professional services 
   
 
(1), (3), (4) Persons seeking to provide 
professional services must obtain recognition of their professional degree, enrol in the relevant college and establish legal domicile in Argentina 
 Legal domicile: does not involve 
residence requirement   
(a) Legal services 
 (CPC 861) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(b) Accounting, auditing and 
book-keeping services 
 (CPC 862) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(d) Architectural services 
 (CPC 8671) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 252 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
(e) Engineerin g services 
 (CPC 8672) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
B. Computer and related 
services    
(a) Consultancy services 
related to the installation of computer hardware 
 (CPC 841) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(b) Software implementation 
services 
 (CPC 842) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(c) Data processing services 
 (CPC 843) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 253 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
(d) Database services 
 (CPC 844) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(e) Other 
 (CPC 845 + 849) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
F. Other business services    
(a) Advertising services 
 (CPC 871) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(b) Market research and 
public opinion polling services 
 (CPC 864) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 254 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
(c) Management consulting 
services 
 (CPC 865) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(h) Services incidental to 
mining 
 (CPC 833 + 5115) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(o) Building cleaning services 
 (CPC 874) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(s) Assembly or convention 
services 
 (CPC 87909*) (1) None 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 255 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
(t) Other 
 (CPC 8790) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
2. COMMUNICATION 
SERVICES    
B. Courier services 
 (CPC 7512) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
C. Telecommunication 
services    
(h) Electronic mail 
 (CPC 7523**) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(i) Voicemail 
 (CPC 7523**) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the   
  WT/DS453/R  
 
- 256 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
horizontal section horizontal section 
(j) On-line information and 
database retrieval 
 (CPC 7523**) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(k) Electronic data 
interchange services 
 (CPC 7523**) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(l) Enhanced/value-added 
facsimile services (including store and forward, store and retrieve) 
 (CPC 7523**) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(m) Code and protocol 
conversion 
 (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 257 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
(n) On-line information and/or 
data processing (including 
transaction processing) 
 (CPC 843**) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(o) Other 
 (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
3. CONSTRUCTION AND 
RELATED ENGINEERING SERVICES    
A. General construction work 
for buildings 
 (CPC 512) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
C. Assembly and erection of 
prefabricated 
constructions 
 (CPC 514 + 516) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 258 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
D. Building completion and 
finishing work 
 (CPC 517) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
E. Other 
 (CPC 511 + 515 + 518) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
4. DISTRIBUTION SERVICES    
 
B. Wholesale trade services 
 (CPC 622) (1) None 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
C. Retail trade services 
 (CPC 631 + 632) 
 6111 + 6113 + 6121 (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 259 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
D. Franchising services 
 (CPC 8929) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
7. FINANCIAL SERVICES1    
 
A. All insurance services and 
insurance-related services 
 
(a) Life, accident and health 
insurance services 
 (CPC 8121)  
 
 (1) Unbound  (2) Unbound  (3) Authorization of the establishment of new 
entities is suspended 
 (4) Unbound, except as indicated in the 
horizontal section  
 
 (1) Unbound  (2) Unbound  (3) None   (4) Unbound, except as indicated in the 
horizontal section  
(b) Non-life insurance services 
 (CPC 8129) (1) Unbound 
 (2) Unbound  (3) Authorization of the establishment of new 
entities is suspended 
 (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 (2) Unbound  (3) None   (4) Unbound, except as indicated in the 
horizontal section  
                                               
1 Processed data must remain in the country so as to be available for consultation by  the competent authority. This measure does  not prevent the data from also 
being transferred abroad.  
  WT/DS453/R  
 
- 260 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
 - Maritime and air 
transport insurance 
services 
  (CPC 8129(3) (1) None 
 
(2) None 
 (3) Authorization of the establishment of new 
entities is suspended 
 (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None   (4) Unbound, except as indicated in the 
horizontal section  
(c) Reinsurance and 
retrocession services 
 (CPC 81299*) (1) None 
 
(2) None  (3) Authorization of the establishment of new 
entities is suspended 
 (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None  (3) None   (4) Unbound, except as indicated in the 
horizontal section  
B. Banking and other 
financial services 
(excluding insurance)  Financial operations by the Government and 
State-owned enterprises are excluded from the conditions specified in this schedule; they may carry out their operations through the entities they designate.  In order to engage in stoc k market transactions it 
is necessary to be a member and share-holder of the Securities Exchange.   
(a) Acceptance of deposits 
and other repayable funds from the public 
 (CPC 81115-81119) (1) Unbound 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 261 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
(b) Lending of all types 
including consumer credit, 
mortgage credit, factoring 
and financing of 
commercial transactions 
 (CPC 81113) (1) Unbound 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(c) Financial leasing services 
 (CPC 8112) (1) Unbound 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
d) Payment and money 
transmission services 
 (CPC 81339**) (1) Unbound 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(e) Guarantees and 
commitments 
 (CPC 81199**) (1) Unbound 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 262 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
(f) Trading on own account or 
for clients, wh ether on an 
exchange or not, or in any 
other form, of the following: 
    
- Money market 
instruments (cheques, bills, certificates of 
deposit, etc.) 
 (CPC 81339**) (1) Unbound 
 (2) None  
(3) None 
 (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 (2) None  
(3) None 
 (4) Unbound, except as indicated in the 
horizontal section  
- Foreign exchange 
 (CPC 8133(3) (1) Unbound 
 (2) None  
(3) None 
 (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 (2) None  
(3) None 
 (4) Unbound, except as indicated in the 
horizontal section  
- Derivative products, 
including, but not limited to, futures 
and options 
 (CPC 81339**) (1) Unbound 
 (2) None 
 
(3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 (2) None 
 
(3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 263 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
- Exchange rate and 
interest rate 
instruments, such as 
swaps, forward interest-rate agreements, etc. 
 (CPC 81339*)  
(1) Unbound 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(1) Unbound 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
- Transferable 
securities 
 (CPC 81321*) (1) Unbound 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
- Other negotiable 
instruments and 
financial assets, including bullion 
 (CPC 81339**) (1) Unbound 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(g) Participation in issues of 
all kinds of securities, including underwriting and placement as agent (whether publicly or privately) and provision of services related to such issues 
 (CPC 8132) (1) Unbound 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 264 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
(h) Money broking 
 (CPC 81339**) (1) Unbound 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(i) Asset management, such 
as cash or portfolio 
management, all forms of 
collective investment management, pension fund management, custodial depository and trust services 
 (CPC 8119** + 81323*) (1) Unbound 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(j) Settlement and clearing 
services for financial 
assets, including securities, derivative products, and other negotiable instruments 
 (CPC 81339** or 
81319**) (1) Unbound 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 
(2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
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Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
(k) Advisory and other 
auxiliary financial services 
for any of the activities 
listed in Article IB of document MTN.TNC/W/50, including credit reference and analysis, investment and portfolio research and advice, and advice on acquisitions and on corporate restructuring and strategy. 
 (CPC 8131 or 8133) (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 
(2) None 
 (3) None  (4) Unbound, except as indicated in the 
horizontal section  
(l) Provision and transfer of 
financial information, financial data processing and related software by suppliers of other financial services 
 (CPC 8131) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
New financial services (1) Unbound 
 (2) Unbound  (3) Unbound  (4) Unbound, except as indicated in the 
horizontal section (1) Unbound 
 (2) Unbound  (3) None  (4) Unbound, except as indicated in the 
horizontal section   
  WT/DS453/R  
 
- 266 - Modes of supply: (1) Cross-border supply  (2) Consumption abroad   (3) Commercial presence  (4) Presence of natural persons  
Sector or subsector Limitations on market access Limi tations on national treatment Additional commitments 
9. TOURISM AND 
TRAVEL-RELATED SERVICES    
 
A. Hotels and restaurants 
(including catering) 
 (CPC 641/643) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
B. Travel agencies and tour 
operators services 
 (CPC 7471) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
C. Tourist guide services 
 (CPC 7472) (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
D. Other (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section (1) None 
 (2) None  (3) None  (4) Unbound, except as indicated in the 
horizontal section  
__________