. /.  WORLD TRADE  
ORGANIZATION  WT/DS302/9 
7 February 2005  
 (05-0517) 
 Original:   English 
  
DOMINICAN REPUBLIC – MEASURES AFFECTING THE IMPORTATION 
AND INTERNAL SALE OF CIGARETTES 
 
Notification of an Other Appeal by Honduras
 
under Article 16.4 and Article 17 of the Understanding on Rules  
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 23(1) of the Working Procedures for Appellate Review  
   The following notification, dated 7 February 2005, from the Delegation of Honduras, is being 
circulated to Members. 
 
_______________ 
 
  Pursuant to Rule 23 of the Appellate Body 's Working Procedures for Appellate Review, 
Honduras hereby notifies its decision to appeal to th e Appellate Body certain issues of law covered in 
the Panel Report Dominican Republic – Measures Affecting the Importation and Internal Sale of 
Cigarettes , WT/DS302/R, (the "Panel Report") and certa in legal interpretati ons developed by the 
Panel in that Report.    Honduras seeks appellate review of:  
 
a) the Panel's findings and conclusion set out in paragraphs 7.291-7.294 that there are 
tax liabilities in addition to the Selective Consumption Tax that the bond requirement 
secures;   
b) the Panel's findings and conclusion, set out  in paragraphs 7.297-7.301 of the Panel 
Report, that it was not demonstrated that the fixed amount of the bond accords to 
imported cigarettes treatment less favourable than that accorded to domestic 
cigarettes; 
c) the Panel's findings and conclusion, set out  in paragraphs 7.306-7.308 of the Panel 
Report, that the difference in timing of the payment of the Selective Consumption 
Tax between domestic producer s and importers in connection with the bond is not a 
matter within the Panel’s terms of reference; and  
d) the Panel’s conclusion, set out in paragr aphs 7.310-7.311, that Honduras had failed to 
establish that the bond requirement accords less favourable treatment to imported 
cigarettes than that accorded to the like domestic products. 
 The above findings and conclusions ar e based on the following legal errors:  
 
− the Panel did not make an objective assessment of the matter before it, namely, 
Honduras's challenge to the bond requiremen t on its face, because it examined the 
"application" of the bond requirement, contrary to Article 11 of the Understanding on WT/DS302/9 
Page 2  
 
Rules and Procedures Governing the Settlement of Disputes  ("DSU") (paras. 7.291 – 
7.294 of the Panel Report); 
− the Panel erred in examining the market conditions in the Dominican Republic in 
order to determine the consistency of the bond requirement with Article III:4 of the 
General Agreement on Tariffs and Trade 1994  ("GATT") (paras. 7.297 – 7.301 of the 
Panel Report); 
− the Panel’s error was compounded by the f act that the Panel made unsubstantiated 
assumptions with respect to the per-unit cost of the bond fee for importers, did not determine the per-unit cost of the bond f ee for domestic producers and did not make 
the comparison between the per-unit cost s for importers and domestic producers 
(paras. 7.297 – 7.301 of the Panel Report); 
− the Panel erred in its finding that a difference in costs for importers of posting the 
bond do not alter the conditions of compe tition in the Dominican Republic’s market 
and, therefore, do not create less favourable treatment for imported products within 
the meaning of Article III:4 of the GATT (p aras. 7.297 – 7.301 of the Panel Report); 
− the Panel failed to make a finding that im porters face an additional burden compared 
to domestic producers, even though only im porters have to post the bond and pay the 
Selective Consumption Tax upon importation, which is contrary to the requirement of 
Article III:4 of the GATT, (paras. 7.292 – 7.294 of the Panel Report); and  
− the Panel erred in characterising the difference in timing of the payment of the 
Selective Consumption Tax in connection with the posting of the bond as a separate claim which was not within the terms of re ference of the Panel (paras. 7.306 – 7.308 
of the Panel Report).  
 Honduras requests the Appellate Body to rever se or modify, where appropriate, the findings 
or conclusions of the Panel.  The provisions of the WTO Agreement that Honduras considers the 
Panel to have erroneously interp reted or applied are Article III:4 of the GATT and Article 11 of the 
DSU.   
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