Beruflich Dokumente
Kultur Dokumente
ANBARASAN SUBRAMANIAN
11IP60002
Summary
PARTIES
COMPLAINANTS
RESPONDENT AGREEMENT
17 SEPTEMBER 1998
18 JANUARY 1999 17 FEBRUARY 1999
Measure at issue:
Korea's tax regime for alcoholic beverages, which imposed different tax rates for various categories of distilled spirits.
Product at issue:
SOJU
distilled beverage native to Korea Soju was first distilled around the 13th century Jinro is the largest manufacturer of soju. Substitutable to whisky, brandy, rum, gin, vodka, tequila, liqueurs and ad-mixtures
Panel finding
soju (both diluted and distilled), is directly competitive and substitutable with the imported distilled alcoholic beverages that were in issue, namely, whisky, brandy, rum, gin, vodka, tequila, liqueurs and ad-mixtures. Korea has taxed the imported products in a dissimilar manner and that the tax differential was more than de minimis, and is applied so as to afford protection to domestic production. The Panel therefore concluded that Korea had violated Article III:2 of GATT 1994.
Minimal amounts of domestic support that are allowed even though they distort trade up to 5% of the value of production for developed countries, 10% for developing.
At the DSB meeting on 19 March 1999, Korea informed the DSB that it was considering options for implementation of the DSBs recommendations. On 9 April 1999, the two complainants separately requested, pursuant to Article 21.3(c) of the DSU, that the reasonable period of time for Korea to implement the recommendations of the DSB be determined by arbitration. On 23 April 1999, the three parties to the dispute jointly informed the DSB that they had agreed on the appointment of an arbitrator for the determination of the reasonable period of time for implementation, and also that they had agreed that the arbitrator issue his arbitration award no later than 7 June 1999. On 4 June 1999, the arbitrator determined the reasonable period of time to be 11 months and two weeks. i.e. until 31 January 2000.
At the DSB meeting on 27 January 2000, Korea stated that it considered to have fully implemented the DSBs rulings and recommendations by amending its 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 on a non-discriminatory basis.
Short title
Japan Taxes on Alcoholic Beverages Japan Taxes on Alcoholic Beverages Japan Taxes on Alcoholic Beverages Korea, Republic of Taxes on Alcoholic Beverages Korea, Republic of Taxes on Alcoholic Beverages Chile Taxes on Alcoholic Beverages Chile Taxes on Alcoholic Beverages Chile Taxes on Alcoholic Beverages Armenia Measures Affecting the Importation and Internal Sale of Cigarettes and Alcoholic Beverages
Complainant
European Communities Canada United States European Communities United States European Communities United States European Communities Ukraine
Date
21 June 1995 7 July 1995 7 July 1995 2 April 1997 23 May 1997 4 June 1997 11 Dec 1997 15 Dec1997
imported products and the domestic products are directly competitive or substitutable products which are in competition with each other; directly competitive or substitutable imported and domestic products are not similarly taxed; and dissimilar taxation of the directly competitive or substitutable imported domestic products is applied so as to afford protection to domestic production.
the
the
of Proof
of Proof
under Article III:2, second sentence, only with respect to products for which a prima facie case had been made out on the basis of evidence presented.
a presumption would be inconsistent with the rules on the burden of proof because it would prematurely shift the burden of proof to the defending party.
The Appellate Body found that it was not inappropriate to consider the competitive conditions in the relevant market, as manifested in the cross-price elasticity in particular.
In the Korea Alcoholic Beverages dispute The Appellate Body developed the above finding Cross-price elasticity as one means of examining a market involve an assessment of latent demand. Such studies attempt to predict the change in demand that would result from a change in the price of a product following, inter alia, from a change in the relative tax burdens on domestic and imported products
Latent, extant and potential demand In the Korea Alcoholic Beverages dispute The Appellate Body considered directly competitive or substitutable implies that the competitive relationship between products is not to be analysed exclusively by reference to current (actual) consumer preferences
suggests a degree of proximity in the competitive relationship between the domestic and the imported products. The word directly does not, however, prevent a panel from considering both latent and extant demand.
Advertising activities
Channels of distribution Price relationships cross price elasticities Other charecteristics
similarly taxed
de minimis standard
In the Japan Alcoholic Beverages II dispute The Appellate Body draw a distinction between the term not similarly taxed and the term so as to afford protection to domestic production The very magnitude of the dissimilar taxation in a particular case may be evidence of such a protective application, as the Panel rightly concluded in this case
Thank
you