Tobacco Import Row with Thailand Elevated to WTO

Source from:  Business World 01/28/2016

The Philippines has brought to the attention of the World Trade Organization (WTO) the inconsistency of Thailand's actions relating to the rulings issued by the agency on the importation of imported cigarettes.

"Despite the repeated statements to this Body that it 'will take steps to ensure' the WTO-consistency of its actions, Thailand has just filed criminal charges against an importer of Philippine cigarettes for the alleged under-declaration of customs value," the Philippines said in a statement submitted to the WTO.

"The circumstances surrounding the prosecution demonstrate a very close relationship to the circumstances surrounding the measures at issue in the original WTO proceedings. Specifically, the original WTO proceedings and the prosecution involve the same importer into Thailand, the same exporter, the same exporting country, the same product, the same declared customs values for the same brands, and the same circumstances of sale," it added.

The Philippines said that the original WTO proceedings and the prosecution involve the same type of legal determination -- that is, a determination by Thailand that importer under-declared customs values of Philippines goods.

"To determine what it considers to be the proper customs value, Thailand has used, as the basis for the prosecution, a WTO-inconsistent method that Thailand initially relied upon in the original panel proceedings but then expressly abandoned as the grounds for its valuation decisions," it said. "The WTO panel ruled that Thailand enjoyed no legitimate grounds to reject the customs values it now subjects to criminal prosecution."

It said the prosecution involves an attempt by Thailand to criminalize declared customs values that the original panel in the dispute ruled should not be rejected, "through the resurrection of a WTO-inconsistent valuation method that Thailand itself abandoned in the original proceedings in the dispute."

"The Philippines is also concerned with a series of further compliance issues that remain outstanding, nearly four years after Thailand was to have fully complied with this Body's recommendations and rulings," the Philippines said.

In response, Thailand said it "has taken all actions necessary to implement the [dispute settlement board's] recommendations and rulings in this dispute. We would therefore like to refer to our previous Statements we have made here."

The latest exchange before the WTO's settlement body on Jan 25 follows a statement made by the Philippines in November last year pointing to Thailand's non-compliance with WTO rulings.

In a statement submitted to the WTO's dispute settlement body on Nov. 25, the Philippines said it is "deeply concerned" about two issues that undermine the recommendations and rulings relating to Thailand custom's treatment of imported cigarettes, and the resulting agreement between the two countries.

"First, the Philippines remains deeply concerned with the Thai Attorney-General's decision to prosecute the importer of Philippine cigarettes for alleged under-declaration of customs value," the statement reads.

"Second, the Philippines is also deeply concerned about a separate Thai BoA [Customs Board of Appeals] ruling rejecting transaction value for 20 entries from Indonesia that were covered by the rulings and recommendations in the original proceedings in this dispute," it says.

The complaint stemmed from concerns first raised by the country in February 2008 that highlighted a number of Thai fiscal and customs measures affecting cigarettes from the Philippines.

The measures include Thailand's customs valuation practices, excise tax, health tax, TV tax, value-added tax regime, retail licensing requirements and import guarantees imposed upon cigarette importers. The Philippines claimed that Thailand administers these measures in violation of provisions under the 1994 General Agreement on Tariffs and Trade (GATT).

The Philippines made separate claims about various Thai customs valuation measures affecting cigarette imports. It also claimed that Thailand's ad valorem excise tax, health tax and TV tax, on both imported and domestic cigarettes, are inconsistent with a GATT provision that requires the publication of trade laws and regulations of general application. Enditem