Document: Panel Report
Date: 16 August 2005
Document codes: WT/DS302/17
Complainant: Honduras
Respondent: Dominican
Third parties: Chile, China, EU, El Salvador, Guatemala, Nicaragua, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. III:2, III:4, X:3(a), X:1, II:1, XI:1, XV  GATT 1994

ANNEX I

Geneva, 16 August 2005

Mr. John Lockhart

'
Centre William Rappard

‘Rue de Lausanne 154 —
1211 Geneva 21

Dominican Republic — Measures Affecting the Importation and Internal Sale of Cigarettes

Sir,

Arbitration under Article 21.3(c) of the DSU

The Dominican Republic and Honduras have mutually agreed that the reasonable
periods of time for the. Dominican Republic to implement the recommendations and
rulings of the Dispute Settlement Body (the "DSB") in Dominican Republic — Measures
Affecting the Importation and Internal Sale of Cigarettes (WT/DS202) are as follows:

1.

[oe)

In respect of the finding of the Panel specified in paragraph 8.1(b) of the
Panel Report relative to the transitional surcharge for economic
stabilisation, found to be inconsistent with the provisions of Article II:1(b)
of the GATT 1994, the Dominican Republic shall immediately bring the
measure into. conformity with its obligations under the GATT 1994.

In respect of the finding of the Panel specified in paragraph 8.1(e) of the
Panel Report relative to the requirement that a tax stamp be affixed to all
cigarette packets in its termitory and under the supervision of the local tax
authorities, found to be mconsistent with Article II:4 of the GATT 1994,
the Dominican Republic shall immediately bring the measure into
conformity with its obligations under the GATT 1994.

In respect of the finding of the Panel specified in paragraph 8.1(c) of the
Panel Report relative to the foreign exchange fee, found to be inconsistent
with the provisions of Article I:1(b) of the GATT 1994, the Dominican
Republic shall bring the measure into conformity within twenty four (24)

“months from 19 May 2005, the date of the adoption of the Panel and

Appellate Body Reports.

In respect of the measures that have to be brought into conformity immediately
(the measures referred to in paragraphs 8.1(b) and 8.1(e) of the Panel Report, ie., the
transitional surcharge for economic stabilisation and the requirement that a tax stamp be
affixed to all cigarette packets in the territory of the Dominican Republic and under the
supervision of the local tax authorities), the Dominican Republic and Honduras have
likewise agreed that Honduras may, at its discretion, exercise its nights under Article 21.5
or Article 22.6 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes (the "DSU") at anytime starting sixty (60) days from the date of this
notification, without prejudice to the rights of Honduras relative to the bringing into
conformity of the measure referred to in paragraph 8.1(c) of the Panel Report, i.e., the
foreign exchange fee.

In addition to the foregoing, the Dominican Republic and Honduras have also
agreed that the Dominican Republic shall forthwith desist from requiring importers of
cigarettes to post the bond referred to in paragraph 8.1(f) of the Panel Report.

The Dominican Republic and Honduras respectfully request the Arbitrator to
issue such rulings reflecting this agreement as he may deem appropriate in the
circumstangeg

Yours sincerely,

Homero Herfiandez
Ambassador

Pe iN anent Mission of Honduras Permanent Mission of the
Dominican Republic

cc: HELE. Mr. Eirik Glenne
Chairman, Dispute Settlement Body
World Trade Organization
Rue de Lausanne 154
1211 Geneva 21