GD/224
Thailand - Restrictions on Importation of and Internal Taxes on Cigarettes
Other titles
Thailand Cigarettes (Source: GATT Analytical Index)
Products at Issue
| Products at issue |
Cigarettes
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| Type of product |
Agricultural
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| Product sub-type |
Tobacco and tobacco products
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Related disputes
| GATT | |
| WTO |
Key legal aspects
| Legal basis |
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| Claims raised |
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| Defences raised |
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Adjudicators
| Type | Panel |
| Chairperson | Rudolf Ramsauer (Switzerland) |
| Other members | Pekka Huhtaniemi (Finland), Adrian Macey (New Zealand) |
| No of Pages (total / legal reasoning) | 34 |
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Timeline
| Request for consultations | |
| Request for establishment | |
| Establishment | |
| Composition | |
| Report | |
| Adoption of report |
Outcome
| Outcome of the proceedings |
Report adopted
|
| Additional Info | DS10/R (05/10/1990) Thailand – Restriction on Importation of and Import Taxes on Cigarettes – Report of the Panel: The United States requested the Panel to find that the cigarette import restrictions were inconsistent with Article XI:1 of the General Agreement and were not covered by any of the exceptions in the General Agreement, in particular Articles XI:2(c)(i) and XX(b), or by the provisions of Thailand's Protocol of Accession. It further requested the Panel to find that the taxes on cigarettes were contrary to the national treatment provisions of Article III. The Panel, noting that Thailand had not granted licences for the importation of cigarettes during the past 10 years, found that Thailand had acted inconsistently with Article XI:1. The Panel then examined Thailand's claim that its restrictions on the importation of cigarettes were necessary to enforce domestic marketing or production restrictions for leaf tobacco and cigarettes and that they were therefore justified by Article XI:2(c)(i). Since cigarettes could not be described as "leaf tobacco in an early stage of processing" because they had already undergone extensive processing and, moreover, were not intended for further processing, the Panel found that they were not among the products eligible for import restrictions under Article XI:2(c)(i). Having made this finding, the Panel did not consider it necessary to examine whether Thailand had met the other requirements of Article XI:2(c)(i). The Panel proceeded to examine whether Thai import measures affecting cigarettes, while contrary to Article XI:1, were justified by Article XX(b). The Panel noted that this provision clearly allowed contracting parties to give priority to human health over trade liberalization; however, for a measure to be covered by Article XX(b) it had to be "necessary". The Panel concluded from the above that the import restrictions imposed by Thailand could be considered to be "necessary" in terms of Article XX(b) only if there were no alternative measure consistent with the General Agreement, or less inconsistent with it, which Thailand could reasonably be expected to employ to achieve its health policy objectives. The Panel considered that there were various measures consistent with the General Agreement which were reasonably available to Thailand to control the quality and quantity of cigarettes smoked and which, taken together, could achieve the health policy goals that the Thai government pursues by restricting the importation of cigarettes. The Panel found therefore that Thailand's practice of permitting the sale of domestic cigarettes while not permitting the importation of foreign cigarettes was an inconsistency with the General Agreement not "necessary" within the meaning of Article XX(b). The Panel also found that the existing legislation clause in Thailand's Protocol of Accession did not exempt the restrictions on the importation of cigarettes from Thailand's obligations under the General Agreement. The Panel further found that regulations relating to the excise, business and municipal taxes on cigarettes are consistent with Thailand's obligations under Article III of the General Agreement. The Panel recommended that the contracting parties request Thailand to bring its application of Section 27 of the Tobacco Act into conformity with its obligations under the General Agreement. |