WT/DS472/17  
 
9 January 2020  
(20-0174) Page: 1/3 
  Original: English  
 
BRAZIL  – CERTAIN MEASURES CON CERNING TAXATION AND  CHARGES  
UNDERSTANDING BETWEE N BRAZIL  AND THE EUROPEAN UNION  REGARDING  
PROCEDURES UNDER ART ICLES 21 AND 22 OF T HE DSU   
AND ARTICLE 4 OF THE  SCM AGREEMENT  
The following communication, dated 23 December 2019 , from the delegation of Brazil  and the 
delegation of the European Union  to the Chairperson of the Dispute Settlement Body, is circulated 
at the request of these delegations.  
 
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The European Union and Brazil would like to inform the Dispute Settlement Body of the attached 
"Agreed Procedures under Articles 21 and 22 of the Dispute Settlement Understanding and Article 4 
of the Agreement on Subsidies and Countervailing Measures " between the European Union and Brazil 
with respect to the dispute Brazil － Certain Measures Concerning Taxation and Charges  (DS472).  
 
We request that you please circulate the attached agreement to the Members of the Dispute 
Settlement Body.  
 
 
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  WT/DS472/17  
 
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  Brazil — Certain Measures Concerning Taxation and Charges (DS472)  
 
Agreed Procedures under Articles 21 and 22 of the Dispute Settlement Understanding  
and Article 4 of the Agreement on Subsidies and Countervailing Measures  
 
The Dispute Settlement Body ( "DSB") adopted its recommendations and rulings in the dispute 
Brazil  — Certain Measures Concerning Taxation and Charges  (DS472) on 11 January 2019.  
 
Pursuant to Article 21.3(b) of the Understanding on Rules and Procedures Governing the Settlement 
of Disputes ( "DSU"), the European Union ( "EU") and Brazil agreed that the reasonable period of time 
("RPT") to implement the DSB recommendations and rulings would be 11 months and 20 days, 
expiring on 31 December 2019 (WT/DS472/15). With regard to the subsidi es that were found to be 
prohibited, Brazil and the European Union agreed that, for the purposes of Article 4 of the Agreement 
on Subsidies and Countervailing Measures ( "SCM Agreement "), the time period within which these 
measures must be withdrawn would b e five (5) months and ten (10) days from the date of adoption 
of the recommendations and rulings of the DSB, which expired on 21 June 2019.  
 
In order to facilitate a satisfactory solution to the dispute through the implementation of the 
DSB recommendations  and rulings and the withdrawal of the prohibited subsidies, the EU and Brazil 
(referred to collectively as "the Parties ") have agreed on the following procedures for the exclusive 
purposes of this dispute, which are designed to reduce the scope for proced ural disputes and are 
without prejudice to either party 's views on the correct interpretation of the DSU:  
 
1. Should the EU consider that the situation described in Article 21.5 of the DSU exists, the 
EU may request consultations with Brazil. The Parties agre e to hold such consultations within 20  days 
from the date of receipt of the request. Brazil and the EU agree that at the end of this round of 
consultations, should either party so state, the parties will consider that the consultations have failed 
to settl e the dispute. After this 20 -day period has elapsed, the EU may request the establishment of 
a panel pursuant to Article 21.5 of the DSU at any time.  
2. At the first DSB meeting at which the EU 's request for the establishment of an Article 21.5 
panel appears  on the agenda, Brazil shall accept the establishment of that panel.  
3. The parties shall cooperate to enable the Article 21.5 panel to circulate its report within 
90 days from the panel 's establishment, excluding such time during which the panel 's work may b e 
suspended pursuant to Article 12.12 of the DSU.  
4. Either party may request the DSB to adopt the report of the Article 21.5 panel at a 
DSB meeting held at least 20 days after the circulation of the report to the Members unless either 
party appeals the repor t.  
5. In the event of an appeal of the Article 21.5 panel report, the parties shall cooperate to enable 
the Appellate Body to circulate its report to the Members within 90 days from the date of notification 
of the appeal to the DSB. Further, either party may  request the DSB to adopt its recommendations 
and rulings at a DSB meeting held within 30 days of the circulation of the Appellate Body report to 
the Members.  
6. The parties are discussing the procedural consequences that may arise because of the 
blockage of appointments of persons to serve on the Appellate Body and will endeavour to enter into 
a separate procedural agreement that preserves the availability of appeal review in this case on the 
basis of Article 25 DSU.  
7. The EU may request authorization to suspen d concessions or other obligations pursuant to 
Article 22.2 of the DSU and to adopt countermeasures pursuant to Article 4.10 of the 
SCM Agreement, in the event that the DSB rules, as a result of a proceeding under Article 21.5 of 
the DSU, that a measure ta ken to comply does not exist or is inconsistent with a covered agreement.  
Brazil shall not assert that the EU is precluded from obtaining such DSB authorization because its 
request was made outside the time period specified in the first sentence of Articl e 22.6 of the DSU. 
This is without prejudice to Brazil 's right to have the matter referred to arbitration in accordance 
with Article 22.6 of the DSU.  WT/DS472/17  
 
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  8. If the EU requests authorization to suspend concessions or other obligations pursuant to 
Article  22.2 of t he DSU including Article 4.10 of the SCM Agreement, Brazil shall have the right to 
object under Article 22.6 of the DSU, to the level of suspension of concessions or other obligations 
and/or claim that the principles and procedures set forth in Article 22. 3 of the DSU have not been 
followed. In the event of such objection, the matter will be referred to arbitration pursuant to 
Article  22.6 of the DSU and/or Article 4.11 of the SCM Agreement.  
9. The parties will cooperate to enable the arbitrator under Article 22.6 of the DSU to circulate 
its decision within 60 days of the referral to arbitration.  
10. If any of the original panellists is not available for either the Article 21.5 compliance panel or 
the Article 22.6 arbitration (or both), or any person serving in su ch proceeding becomes unavailable 
to serve, the parties will promptly consult on a replacement, and either party may request the 
Director General of the WTO to appoint, within ten days of being so requested, a replacement for 
the proceeding or proceedings in which a replacement is required. If an original panellist is 
unavailable to serve in either of the proceedings, or a person serving in such proceeding becomes 
unavailable to serve, the parties will further request that, in making this appointment, the 
Director  General seek a person who will be available to act in both proceedings.  
11. The parties will continue to cooperate in all matters related to these agreed procedures and 
agree not to raise any procedural objection to any of the steps set out herein. If,  during the 
application of these procedures, the parties consider that a procedural aspect has not been properly 
addressed in these procedures, they will endeavour to find a solution within the shortest time 
possible that will not affect the other aspects and steps agreed herein.  
 
 
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