. /.  WORLD TRADE  
ORGANIZATION   
WT/DS406/6 
10 January 2012  
 
(12-0103) 
 Original:   English 
  
 
UNITED STATES – MEASURES AFFECTING THE PRODUCTION 
AND SALE OF CLOVE CIGARETTES 
 
Notification of an Appeal by the United States 
under Article 16.4 and Article 17 of the Understanding on Rules 
and Procedures Governing the Settlement of Disputes (DSU), 
and under Rule 20(1) of the Working Procedures for Appellate Review  
 
  The following notification, dated 5 January 2012 , from the Delegation of the United States, is 
being circulated to Members. 
 
_______________ 
 
 
Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes  ("DSU") and Rule 20 of the Working Procedures for Appellate Review , the 
United States hereby notifies its decision to appeal  to the Appellate Body certain issues of law 
covered in the Report of the Panel in United States – Measures Affecting the Production and Sale of 
Clove Cigarettes  (WT/DS406/R) ("Panel Report") and certain legal interpretations developed by the 
Panel. 
 
1. The United States seeks review of the Pane l's conclusion that Section 907(a)(1)(A) of the 
Family Smoking Prevention and Tobacco Control Act (the "Tobacco Control Act"),
1 is inconsistent 
with Article 2.1 of the Agreement on Technical Barriers to Trade  (the "TBT Agreement").2  T h e  
United States appeals this finding based on a series of  erroneous legal interpre tations developed by the 
Panel, and on failure by the Panel to make an objective assessment of the facts of the case as called 
for by Article 11 of the DSU. 
 2. The United States seeks review of the Panel's finding that clove cigarettes and menthol cigarettes are like products.
3  In making this erroneous findi ng, the Panel erred in its legal 
interpretation of Article 2.1 by excluding, a priori , evidence related to particular criteria and failing to 
analyze each criteria completely.4  Specifically the Panel erred by failing to perform a complete 
analysis of the end-uses5 of clove cigarettes and menthol cigarettes and failing to perform a complete 
analysis of consumer tastes and habits.6  In developing this faulty lega l interpretation, the Panel also 
acted inconsistently with Article 11 of the DSU by failing to make an objective assessment of the 
facts in the case by refusing to consider certa in evidence related consumer tastes and habits.7 
                                                      
1The Tobacco Control Act was adopted June 2009 an d it went into effect September 2009 as an 
amendment to the Federal Food, Drug and Cosmetic Act, 21 U.S.C. §387g(a)(1)(A). 
2See, e.g. , Panel Report, paras. 7.293, 8.1(b). 
3See, e.g. , Panel Report, para. 7.248. 
4See, e.g. , Panel Report, paras. 7.116, 7.119, 7.197-199, 7.206, 7.209-210, 7.214, 7.230-231. 
5See, e.g. , Panel Report, paras. 7.197-199. 
6See, e.g. , Panel Report, paras. 7.116, 7.119, 7.206-7.232. 
7See, e.g. , Panel Report, para. 7.210. WT/DS406/6 
Page 2  
 
  3. The United States also seeks review of the Panel's finding that Section 907(a)(1)(A) accords 
less favorable treatment to imported clove cigarettes.
8  In making this finding, the Panel erred in its 
legal interpretations that the only products to be compared are imported clove cigarettes and domestic 
menthol cigarettes,9 and that the effect of Section 907(a)(1)(A) on U.S. production can be assessed by 
looking only at what products were on the market at the time the measure went into effect.10  The  
Panel also erred by applying an incorrect legal framework to assess whether the alleged detriment to 
the competitive conditions for clove cigarettes coul d be explained by factors or circumstances 
unrelated to the foreign origin of the products.11  In developing these fau lty legal interpretations, the 
Panel also acted inconsistently with Article 11 of  the DSU by failing to make an objective assessment 
of the facts of the case in finding that at the time of the ban, there were no domestic cigarettes with 
characterizing flavors other than menthol cigarettes,12 and that Section 907(a)(1)(A) imposes no costs 
on any U.S. entity.13 
 4. The United States seeks review by the Appella te Body of the Panel's conclusion and related 
findings that by not allowing an interval of no l ess than six months between the publication and the 
entry into force of Section 907(a)(1)(A), the United St ates acted inconsistently with Article 2.12 of the 
TBT Agreement.
14  This conclusion is in error and is ba sed on erroneous findings on issues of law and 
legal interpretations with respect to  Article 2.12 of the TBT Agreement.15 
 5. Finally, the United States also makes a conditio nal appeal regarding the Panel's legal analysis 
with respect to Indonesia's claims under Article 2. 2 of the TBT Agreement.  Should Indonesia seek 
review by the Appellate Body of the Panel's findings with respect to Indonesia's claims under 
Article 2.2, the United States seeks review by the Appellate Body of the Pa nel's finding that it could 
draw upon jurisprudence develope d under Article XX(b) of the General Agreement on Tariffs and 
Trade 1994  when assessing the consistency of Section 907(a)(1)(A) with the requirement that 
technical regulations "not be more trade-r estrictive than necessary to fulfill a legitimate 
objective …".
16  While the United States agrees with th e ultimate conclusion in the Panel Report 
regarding Indonesia's claims under Article 2.2 of th e TBT Agreement, the United States considers the 
Panel's analysis on this particular aspect to be  based on erroneous findings on issues of law and 
related legal interpretations with respect  to Article 2.2 of the TBT Agreement. 
 
__________  
                                                      
8See, e.g. , Panel Report, para. 7.292. 
9See, e.g. , Panel Report, paras. 7.274, 7.277. 
10See, e.g. , Panel Report, para. 7.289. 
11See, e.g. , Panel Report, paras. 7.269, 7.286-7.291. 
12See, e.g. , Panel Report, para. 7.289. 
13See, e.g. , Panel Report, para. 7.289. 
14See e.g. , Panel Report, paras. 7.595, 8.1(h). 
15See e.g. , Panel Report, paras. 7.561-7.595. 
16Panel Report, paras. 7.351-7.369.