ARGENTINA – MEASURES AFFECTING THE EXPORT OF BOVINE HIDES AND THE IMPORT OF FINISHED LEATHER
Document: Request for the Establishment of a Panel by the European Communities
Date: 4 June 1999
Document codes: WT/DS155/2
Complainant: EU
Respondent: Argentina
Third parties: U.S.
Dispute stage: Consultation
Agreements cited: Art. XI:1, X:3(a), III:2  GATT 1994

ARGENTINA – MEASURES AFFECTING THE EXPORT OF BOVINE HIDES
AND THE IMPORT OF FINISHED LEATHER
Request for the Establishment of a Panel by the European Communities
The following communication, dated 31 May 1999 from the Permanent Delegation of the
European Delegation to the Chairman of the Dispute Settlement Body, is circulated pursuant to
Article 6.2 of the DSU.
On behalf of the European Communities, I have the honour to request the establishment of a
Panel pursuant to Article XXIII of the General Agreement on Tariffs and Trade (GATT 1994) and
Article 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes
regarding the following measures maintained by Argentina :
(1) the de facto export prohibition on raw and semi tanned bovine hides, which is
implemented in particular though the authorization granted by the Argentinean
authorities to the Argentinean tanning industry to participate in customs control
procedures of hides before export (Resolution of the National Customs
Administration No. 2235/96 of 27 June 1996 or any law or administrative regulation
amending or replacing it);
(2) the “additional VAT” of nine per cent raised on the import of products into its
territory (Articles 1 and following of General Resolution DGI 3431/91, and Article 1
of General Resolution DGI 3975/95 of 3 April 1995 or any law or administrative
regulation amending or replacing them); and
(3) the “advance profit tax” based on the price of the imported goods imposed on
operators when importing goods into Argentina (Presidential Decree 1076/92 of
30 June 1992 and Resolution DGI 3955/95 or any law or administrative regulation
amending or replacing them).
On 23 December 1998, the European Communities requested consultations with Argentina
with a view to reach a mutually satisfactory solution of the matter. The request was circulated in
document dated 4 January 1999. Such consultations, which were held on
5 February 1999 in Geneva, have allowed a better understanding of the respective positions, but have
not led to a satisfactory resolution of the matter.
In the European Communities view, the Argentinean measures enumerated hereabove are not
in conformity with the Republic of Argentina’s obligations under GATT 1994, and in particular:

- Article XI:1 of GATT 1994, which, inter alia , prohibits Members to institute or
maintain prohibition to the export of products destined for the territory of any other
Member. Factual evidence shows that the Argentinean export regime for raw and
semi-tanned bovine hides operates as a de facto export prohibition. Therefore, the
European Communities request the panel to consider that this export prohibition
constitutes a breach of Article XI:1 of GATT 1994.
- Article X:3(a) of GATT 1994 which, inter alia, imposes the obligation on Members to
administer laws and regulations pertaining to requirements on exports in a uniform
and impartial manner. Personnel appointed by the Argentinean Chamber for the
tanning industry, which has an obvious interest in preventing exports, are authorized
to assist the Argentinean customs authorities in carrying out customs controls of raw
and semi-tanned bovine hides before exports. Therefore, the European Communities
request the panel to consider that, apart from being part of the export regime designed
to make exports of hides impossible, this measure constitutes in itself a violation of
Article X:3(a) of GATT 1994.
- Article III:2 of GATT 1994 which provides that products of the territory of any
Member which are imported into the territory of any other member shall not be
subject to internal taxes in excess to those applied to like domestic products.
(a) Argentina applies an “additional VAT” of nine per cent on imported products.
In practice this means that the VAT rate for imported goods is thirty per cent
instead of twenty one per cent for goods purchased on the domestic market.
The VAT-rate for imported goods is thus discriminatory when compared to
the rate applied on domestic sales. Therefore, the European Communities
request the panel to find that the additional VAT is a violation of the national
treatment principle enshrined in Article III:2 of GATT 1994.
(b) Operators who import foreign goods into Argentina must pay an “advance
turnover tax” of three per cent of the price of the goods, which implies a
discrimination in favour of Argentinean input material for the manufacture
and finished consumer goods. Therefore, the European Communities request
the panel to find that this “advance turnover tax” also constitutes a violation of
Article III:2 of GATT 1994.
The European Communities consider that reference to the above legal bases does not rule out
recourse to any other pertinent provision of the WTO Agreement and of the Agreements annexed to it.
The European Communities request that the pane l be established with the standard terms of
reference as provided for in Article 7 of the DSU.
The European Communities ask that this request be placed on the agenda for the next meeting
of the Dispute Settlement Body.