THAILAND – CUSTOMS AND FISCAL MEASURES ON CIGARETTES FROM THE PHILIPPINES
Document: Notification of an Appeal by Thailand 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
Date: 23 February 2011
Document codes: WT/DS371/8
Complainant: Philippines
Respondent: Thailand
Third parties: Australia, China, EU, India, Taiwan, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. 13, 10  Customs valuationArt. X:3, II:1(b), II:3  GATT 1994Art. 2, 3, 4, 5, 6, 7, 1.1, 1.2  Customs valuationArt. VII:1, VII:2, VII:5  GATT 1994Art. 16  Customs valuationArt. X:1, III:2, III:4  GATT 1994

THAILAND – CUSTOMS AND FISCAL MEASURES ON CIGARETTES
FROM THE PHILIPPINES

Notification of an Appeal by Thailand

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 22 February 201 1, from the Delegation of Thailand, is being
circulated to Members.

 Pursuant to Articles 16.4 and 17 of the Understanding on Rules and Procedures Governing
the Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate Review ,
Thailand hereby notifies the Dispute Settlement Body of its decision to appeal to the Appellate Body
certain issues of law and legal interpre tation covered in the Panel Report entitled (), which was circulated on
15 November 2010 (the "Panel Report"). Pursuant to Rules 20(1) and 21(1) of the Working
Procedures for Appellate Review , Thailand is simultaneously filing this Notice of Appeal and its
Appellant's Submission with the Appellate Body Secretariat.

 As described below, Thailand appeals certain of the Panel's findings on measures related to
Thailand's Value Added Tax ("VAT") regime for ci garettes, as well as Thailand's regime for the
acceptance of guarantees to secure the importer’s ul timate liability for customs duties pending final
determination of the customs value of imported goods.

 Thailand seeks review by the Appellate Body of the following errors of law and legal
interpretation by the Panel in the Panel Report:

I. The Panel's finding under Article III:2 of the GATT 1994

1. The Panel erred in law in finding a violatio n of Article III:2, first sentence, of the
GATT 1994, not on the basis of the fiscal burdens imposed on imported a nd domestic products under
Thai VAT law, but solely on the basis of the administrative requirements of Thailand's VAT system
and the consequences of non-compliance with those requirements.
1 The administrative requirements
of Thailand’s VAT system and the consequences of non-compliance are measures that fall within the
scope of Article III:4, not Article III:2, first sentence, of the GATT 1994.

1 See Panel Report, paras. 6.98-6.120, paras. 7.568-7.644, and para. 8.3(b). This appeal does not
include the Panel's separate finding under Article III:2, first sentence, in paragraphs 7.567 and 8.3(a) of the
Panel Report.

2. Even if the Panel were correct to address th e administrative requirements of Thai VAT law
under Article III:2, first sentence, of the GATT 1994, th e Panel erred in law in finding a violation of
Article III:2 solely on the basis of administrativ e requirements whereby resellers must file a VAT
form declaring and offsetting their VAT credits a nd liabilities on re-sales of imported cigarettes for
each month and whereby VAT credits are granted onl y with respect to actual, documented purchases
of goods such as imported cigarettes.
2 These requirements cannot, as a matter of law, lead to taxation
of imported products in excess of that imposed on domestic products within the meaning of
Article III:2, first sentence.

II. The Panel's finding under Articles III:4 and XX(d) of the GATT 1994

3. The Panel erred in law in finding that certain additional administrative requirements for re-
sales of imported cigarettes amounted to less favourab le treatment of imported products within the
meaning of Article III:4 of the GATT 1994 on the basi s of a finding solely that these administrative
requirements could potentially affect the compe titive position of imported cigarettes that is not
supported by its factual analysis and findings.3

4. The Panel erred in law in rejecting Thailand's defence under Article XX(d) of the GATT 1994
to the Philippines' claim under Article III:4 on the ground that it had already found the measures with
respect to which Thailand asserted the defence (the a dditional administrative requirements for re-sales
of imported cigarettes) to be inconsis tent with Article III:4 of the GATT 1994. 4 Instead, the Panel
should have looked first at whether the laws with respect to which Thailand sought to achieve
compliance were otherwise consistent with the GATT 1994.5

5. The Panel erred in law by accepting and relying on evidence that was submitted at the last
opportunity for the parties to submit their views to the Panel and that was the only evidence to support
one aspect of the Panel's finding under Article III:4 and upon which Thaila nd had no opportunity to
comment.6 The Panel acted inconsistently with Artic le 11 of the DSU and paragraph 15 of its
Working Procedures and also failed to protect Thailand's due process right s by accepting and relying
on this evidence.7

III. The Panel's finding under Article X:3(b) of the GATT 1994

6. The Panel erred in law in finding that the pr ovisional step of accepting a guarantee in the
circumstances provided for in Article 13 of the Agreement on Implementation of Article VII of the
General Agreement on Tariffs and Trade 1994 ("CVA" ) constitutes an "administrative action relating
to customs matters" within the meaning of and subjec t to a right of review under Article X:3(b) of the
GATT 1994.8

2 See Panel Report, paras. 6.98-6.120; paras. 7.613-7.637; and 8.3(b).
3 See Panel Report, paras. 7.724-7.738 and para. 8.3(c).
4 See Panel Report, paras. 7.749-7.758.
5 See Panel Report, paras. 7.738 and para. 8.3(c).
6 See Panel Report, paras. 6.122-6.128, paras. 7.684-7.704, and para. 8.3(c).
7 See Panel Report, paras. 6.122-6.128, paras. 7.684-7.704, and para. 8.3(c).
8 See Panel Report, paras. 7.1016-7.1053 and para. 8.4(g).

7. Even if the Panel were correct that the acceptance of a guarantee under Article 13 of the CVA
constitutes an "administrative action relating to customs matters" within the meaning of
Article X:3(b), the Panel erred in law in finding th at providing a right of review of the taking of a
guarantee at the time of the final determination of duty liability cannot satisfy the obligation in
Article X:3(b).9

Thailand respectfully requests the Appellate Body to reverse the findings of the Panel
identified in this Notice of Appeal.