PERU – ADDITIONAL DUTY ON IMPORTS OF CERTAIN AGRICULTURAL PRODUCTS REQUEST FOR THE ESTABLISHMENT OF A PANEL BY GUATEMALA
Document: REQUEST FOR THE ESTABLISHMENT OF A PANEL
Date: 14 June 2013
Document codes: WT/DS457/2
Complainant: Guatemala
Respondent: Peru
Third parties: Argentina, China, El Salvador, EU, India, U.S., Brazil, Ecuador, South Korea, Honduras, Colombia
Dispute stage: Appellate Body
Agreements cited: Art. 4.2  AgricultureArt. II:1, XI:1, X:1, X:3(a)  GATT 1994Art. 1, 2, 3, 5, 6, 7  Customs valuationArt. 3.8  Dispute Settlement Understanding (DSU)

PERU – ADDITIONAL DUTY ON IMPORTS OF
CERTAIN AGRICULTURAL PRODUCTS
REQUEST FOR THE ESTABLISHMENT OF A PANEL BY GUATEMALA
 The following communication, dated 13 June 2013, from the delegation of Guatemala
to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

On 12 April 2013, Guatemala requested consultations with Peru pursuant to Article 4
of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU),
Article 19 of the Agreement on Agriculture, Ar ticle 19 of the Agreement on Implementation
of Article VII of the General Agreement on Tariffs and Trade 1994 (Customs Valuation Agreement),
and Article XXIII of the General Agreement on Tariffs and Trade 1994 (GATT 1994), with respect
to the imposition by Peru of an additional duty on imports of certain agricultural products.

Guatemala and Peru held consultations on 14 and 15 May 2013. Unfortunately, these
consultations failed to resolve the dispute. Accordingly, Guatemala respectfully requests, pursuant
to Articles 4.7 and 6 of the DSU, Article 19 of the Agreement on Agriculture, Article 19
of the Customs Valuation Agreement, and Article XXIII:2 of the GATT 1994, that the
Dispute Settlement Body (DSB) establish a panel to examine this matter in light of the measure
and the claims set forth below.

1 THE MEASURE AT ISSUE
The measure at issue is the additional duty imposed by Peru on imports of certain
agricultural products, such as milk, maize, rice and sugar (hereinafter affected products).
The additional duty is characterized by the following:

(a) It has been in force since 22 June 2001.

(b) It consists of a levy that is variable and that is imposed in addition to the ordinary
customs duty.

(c) It applies to imports of the affected products "when the international reference prices
of such products are below certain floor price levels, and tariff rebates [apply] when
these reference prices are above certain ceiling price levels".

(d) It is determined by using a mechanism known as the "Price Band System" which,
in its turn, operates on the basis of two components: (i) a band made up of a floor
price and a ceiling price which, in accordance with the applicable regulations, reflect
the international price over the last 60 months for the different products concerned;
(ii) a c.i.f reference price, which is published every two weeks and which,
in accordance with the applicable regulations, reflects the average international
market price for the different products concerned.

(e) Both the price band and the c.i.f reference prices vary periodically as a result of the
application of certain formulas to the changing circumstances in the markets for the
products in question. The price band varies every six months, while the c.i.f reference
prices vary every two weeks. The relevant legislation does not provide the Peruvian
authorities with any margin for manoeuvre or discretion when it comes to applying
these formulas.

(f) The amount is specific, and is expressed in US dollars per metric tonne. The value
of goods submitted for clearance is not taken into consideration.

(g) It is payable upon importation of the affected products, together with the ordinary
customs duty and other import taxes on the affected products.

Guatemala believes that this measure is contained, essentially, in the following instruments:

(a) Supreme Decree No. 115-2001-EF, published in the Official Journal "El Peruano"
of 22 June 2001;

(b) Supreme Decree No. 124-2002-EF, published in the Official Journal "El Peruano"
of 17 August 2002;

(c) Supreme Decree No. 153-2002-EF, published in the Official Journal "El Peruano"
of 27 September 2002;

(d) Supreme Decree No. 174-2002-EF, published in the Official Journal "El Peruano"
of 15 November 2002;

(e) Supreme Decree No. 184-2002-EF, published in the Official Journal "El Peruano"
of 27 November 2002;

(f) Supreme Decree No. 197-2002-EF, published in the Official Journal "El Peruano"
of 30 December 2002;

(g) Supreme Decree No. 003-2006-EF, published in the Official Journal "El Peruano"
of 13 January 2006.

(h) Supreme Decree No. 121-2006-EF, published in the Official Journal "El Peruano"
of 20 July 2006;

(i) Circular No. INTA-CR.62-2002 of 26 Au gust 2002 of the National Technical
Customs Department;

(j) Circular No. INTA-CR.82-2002 of 5 Dece mber 2002 of the National Technical
Customs Department;

(k) Circular No. 002-2003-SUNAT/A of 28 February 2003 of the National Tax
Administration Supervisory Authority;

(l) Circular No. 010-2004-SUNAT/A of 10 September 2004 of the National Tax
Administration Supervisory Authority;

(m) Judgement No. 03041-A-2004 of the Tax Court, dated 14 May 2004;

(n) Judgement No. 02364-A-2007 of the Tax Court, dated 15 March 2007;

(o) The Supreme Decrees published semi-annually containing the customs tables for
determining the floor and ceiling prices of the price band;

(p) The Vice-Ministerial Resolutions published every two weeks containing
the c.i.f reference prices.

In addition to the instruments listed above, this request covers any other regulation,
instruction, administrative or judicial practice, methodology or guideline, whether currently in force
or adopted subsequently, that amends, supplements, develops, or is otherwise related
to the regulatory instruments expressly mentioned in this request.

2 LEGAL BASIS FOR THE COMPLAINT
The measure at issue is inconsistent with Peru's obligations under the
Agreement Establishing the World Trade Organization (WTO Agreement), and in particular,
with the following provisions:

 (a) Article 4.2 of the Agreement on Agriculture, since it is a variable import levy
and/or minimum import price, or at the very least, it constitutes a measure similar
to those two categories within the meaning of footnote 1 of the Agreement
on Agriculture, and such measures are prohibited under that provision;

 (b) Article II:1(a)and the second sentence of Article II:1(b) of the GATT 1994,
since the measure is a duty or charge other than an ordinary customs duty and is not
included in Peru's schedule of concessions; it was not in effect as at 15 April 1994,
nor does it appear to have been required on that date by any mandatory provision
of Peruvian law. In any case, the measure appears to be inconsistent
with paragraphs 1, 2, 3 and 4 of th e Understanding on the Interpretation
of Article II:1(b) of the General Agreement on Tariffs and Trade 1994, since Peru did
not record this levy in its schedule of concessions;

 (c) Article XI:1 of the GATT 1994, to the ex tent that the imposition of the additional
duty constitutes an import restriction by effectively establishing a system similar to
that of minimum import prices;

 (d) Article X:1 of the GATT 1994, to the extent that certain aspects of the measure are
not published, so that traders are prevented from becoming fully acquainted with
the measure. Among the aspects that are not published are: the components
and/or the means of determining the notion of "import costs" amounting to 3% that is
taken into consideration for determining th e additional duties; and the reason, basis
or formula for determining the adjustment factor of 1.107 for the floor price of sugar;

 (e) Article X:3(a) of the GATT 1994, since Peru does not administer the measure at issue
in conformity with the independent requirements of uniformity, impartiality
and reasonableness. Each of these violations is due, inter alia, to the fact that on
several occasions, Peru failed to apply the formula laid down in the relevant
regulations to determine the floor and ceiling prices and the customs tables relating to
those prices. What Peru did, in those cases, was to extend the validity of the customs
tables applicable during the previous period, without any justification or explanation of
this failure to apply its own regulations;

 (f) Articles 1, 2, 3, 5, 6 and 7 of the Cu stoms Valuation Agreement, to the extent that
the measure at issue is not based on a value determined with conformity with
the custom valuation methods laid down in those provisions, and is applied on the
basis of c.i.f reference prices that could qualify as "minimum customs values"
or "arbitrary or fictitious values " within the meaning of Article 7.2(b), 7.2(f)
and 7.2(g) of the Agreement on customs valuation.

Under Article 3.8 of the DSU, the measure at issue nullifies or impairs benefits accruing
to Guatemala under the various provisions mentioned in this request.

In view of the above considerations, Guatemala requests the DSB to establish a panel
to examine this matter with the standard terms of reference as set out in Article 7.1 of the DSU.
Guatemala asks that this request for the establishment of a panel be included in the agenda
of the DSB meeting scheduled for 25 June 2013.