KOREA – TAXES ON ALCOHOLIC BEVERAGES
Document: Status Report by Korea
Date: 17 January 2000
Document codes: WT/DS75/18; WT/DS84/16
Complainant: EU
Respondent: South Korea
Third parties: Canada, Mexico
Dispute stage: Appellate Body
Agreements cited: Art. III:2  GATT 1994

KOREA – TAXES ON ALCOHOLIC BEVERAGES
Status Report by Korea
The following communication, dated 14 January 2000, from the Permanent Mission of Korea
to the Dispute Settlement Body, is circulated pursuant to Article 21.6 of the DSU.
Status Report on the Implementation of the Recommendations and Rulings
in the Dispute regarding
Korea - Taxes on Alcoholic Beverages
Pursuant to paragraph 6 of Article 21 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes (the "DSU"), Korea hereby submits a status report in writing on
the implementation of the rulings and recommendations of the Dispute Settlement Body (the "DSB")
in Korea - Taxes on Alcoholic Beverages adopted at its meeting on 17 February 1999.
Korea recalls that the DSB ruled that soju (diluted and distilled), whiskies, brandies, cognac,
rum, gin, vodka, tequila, liqueurs and ad-mixtures are directly competitive or substitutable products,
and recommended that Korea bring its Liquor Tax Law and the Education Tax Law into conformity
with its obligations under the GATT 1994. Korea also recalls that the arbitration, held under
paragraph 3(c) of Article 21 of the DSU, awarded on 4 June 1999 an implementation period of
11 months and two weeks, which is due to expire on 31 January 2000.
In order to comply with the rulings and recommendations of the DSB, Korea has amended the
Liquor Tax Law and the Education Tax Law to impose flat rates of 72% liquor tax and 30% education
tax on all distilled alcoholic beverages including soju (diluted and distilled) on a non-discriminatory
basis. The table showing the changes in tax ra tes is attached herewith. The National Assembly
passed these amendments on 7 December 1999 which entered into force on 1 January 2000, one
month ahead of the expiry of the reasonable period of time determined through the arbitration. The
related presidential decree has also been amended and has taken effect on 1 January 2000. With the
entry into force of these amendments to the Liquor Tax Law and the Education Law and the related
presidential decree, Korea considers that it has fully implemented the DSB’s rulings and
recommendations in this case.
In accordance with paragraph 6 of Article 21 of the DSU, Korea requests that this status
report be circulated to Members of the WTO and that the matter be included in the agenda of the DSB
meeting scheduled on 27 January 2000.

Attachment
Table : Changes in Tax Rates
Liquor Tax
Before amendment After amendment
 Soju
- Distilled soju 50%
- Diluted soju 35%
Whiskies 100%
Brandies 100%
Liqueurs 50%
General distilled alcoholic beverages 80%
Soju
- Distilled soju 72%
- Diluted soju 72%
Whiskies 72%
Brandies 72%
Liqueurs 72%
General distilled alcoholic beverages 72%
Education Tax
Before amendment After amendment
Liquor tax applied at rates
of 80% and above 30%
Liquor tax applied at rates
below 80% 10%
Liquor tax applied at rates
above 70% 30%
Liquor tax applied at rates
of 70% and below 10%