Thailand – Customs and Fiscal measures on cigarettes
from the Philippines
Second
Recourse to Article 21.5 of the DSU by the Philippines
Report OF THE PANEL
TABLE OF
CONTENTS
1 Introduction.. 17
1.1 Prior proceedings in DS371. 17
1.2 Complaint by the Philippines. 18
1.3 Panel establishment and composition. 19
1.4 Panel proceedings. 20
1.4.1
General 20
1.4.2
Third-party access to the confidential Final Report, submissions and exhibits
in the first recourse to Article 21.5. 20
1.4.3 The Philippines' request for copies of
communications between Indonesian and Thai government officials. 21
1.4.3.1 Thailand's
objection to the Philippines' letter of 24 September 2018. 21
1.4.3.2 The Philippines' DSU Article 13
request of 19 October 2018. 23
1.4.4
Thailand's objection concerning the Panel's terms of reference. 24
2 Factual
aspects. 25
2.1 Introduction. 25
2.2 PMTL and the relevant Thai government
agencies. 25
2.3 The measures challenged in this
proceeding. 26
3 Parties'
requests for findings and recommendations. 26
4 Arguments of
the parties. 28
5 Arguments of
the third parties. 28
6 Interim review.. 28
7 Findings. 29
7.1 Initial considerations. 29
7.1.1 Introduction. 29
7.1.2 General framework for the Panel's analysis. 29
7.1.2.1 General
principles of interpretation and standard of review. 29
7.1.2.2 Reliance on the Report in the
Philippines' first recourse to Article 21.5. 31
7.1.3
Issues relating to jurisdiction and admissibility. 35
7.1.3.1 The nexus between the Charges/NoAs and
DSB recommendations and rulings. 35
7.1.3.1.1
Introduction. 35
7.1.3.1.2 Findings in the first recourse to Article 21.5. 36
7.1.3.1.3 The 2002-2003 Charges and the 1,052 revised NoAs. 37
7.1.3.1.4 Conclusion. 39
7.1.3.2 Thailand's
allegations of "illegal acts" by PM Indonesia. 39
7.1.3.3 The
Philippines' alternative claims under Article 7.1 of the CVA. 42
7.1.3.3.1
Introduction. 42
7.1.3.3.2 Main arguments of the parties. 43
7.1.3.3.3 Analysis
by the Panel 44
7.1.3.3.3.1
General considerations. 44
7.1.3.3.3.2
Article 6.2 of the DSU. 46
7.1.3.3.3.3
Timeliness of the Philippines' alternative claim.. 50
7.1.3.3.4
Conclusion. 53
7.1.3.4 The Philippines' standing to
challenge measures concerning PMTL's imports from Indonesia. 54
7.1.4 Relevance of the presumption of good faith
on the part of Thailand and its authorities. 55
7.1.4.1
Introduction. 55
7.1.4.2 Relevance of the presumption of good faith to
accepting the veracity of Thailand's representations. 56
7.1.4.3 Relevance of the presumption of good faith to the
interpretation of CVA obligations. 59
7.1.4.4 Conclusion. 62
7.2 The Thai authorities' reliance on the
information in the CK-21A forms. 63
7.2.1
Introduction. 63
7.2.2
The nature of the cost information reported in the CK-21A forms. 64
7.2.3
The circumstances surrounding the Thai authorities' reliance on the CK-21A
forms. 69
7.2.4
Conclusion. 75
7.3 The 2002-2003 Criminal Charges. 75
7.3.1
General 75
7.3.1.1 Factual description of the Charges. 75
7.3.1.1.1 The prior assessments of the
entries at issue. 75
7.3.1.1.2 Events culminating in the
Charges. 77
7.3.1.1.3 Section 27 of the Customs Act 78
7.3.1.1.4 The content of the Charges
and the Annex. 79
7.3.1.1.5 The
explanation of how the "actual" value/price was determined. 79
7.3.1.1.6 The criminal proceedings. 81
7.3.1.2 Claims and order of analysis. 81
7.3.1.3 Claims not pursued. 82
7.3.2
Existence of a challengeable measure. 82
7.3.2.1 Introduction. 82
7.3.2.2 Main arguments of the parties. 83
7.3.2.3 Analysis by the Panel 85
7.3.2.3.1 General considerations. 85
7.3.2.3.2 Existence of a distinct measure. 88
7.3.2.3.3 Existence of a determination for
purposes of the CVA. 89
7.3.2.3.4 Speculation on future measures
or events. 90
7.3.2.3.5 The issues of making a prima facie case and conducting a de novo
review. 91
7.3.2.4 Conclusion. 92
7.3.3
Applicability of the CVA to the Charges. 92
7.3.3.1 Introduction. 92
7.3.3.2 Main arguments of the parties. 93
7.3.3.3 Analysis by the Panel 95
7.3.3.3.1 General considerations. 95
7.3.3.3.2 The agency that filed the
Charges. 96
7.3.3.3.3 The meaning of the Charges. 102
7.3.3.3.3.1 Introduction. 102
7.3.3.3.3.2 The issues in dispute. 103
7.3.3.3.3.3 The issue of the "actual
price" as merely an approximate reference value. 107
7.3.3.3.3.4 The issue of the "actual
price" as the "price actually paid or payable" 111
7.3.3.3.3.5 Conclusion. 114
7.3.3.3.4 The consequences of the Charges. 115
7.3.3.3.5 The "intention to
defraud" aspect of the Charges. 118
7.3.3.4 Conclusion. 119
7.3.4
Claims under Articles 1.1 and 1.2(a), second sentence, and Articles 6 and 7 of
the CVA. 119
7.3.4.1 Introduction. 119
7.3.4.2 Analysis by the Panel 120
7.3.4.2.1 General considerations. 120
7.3.4.2.2 Claims under Article 1.1 and
Article 1.2(a), second sentence. 122
7.3.4.2.2.1 Claim under Article 1.2(a),
second sentence. 123
7.3.4.2.2.2 Alternative claim under
Article 1.1. 125
7.3.4.2.3 Claims under Article 6.1 and/or Article
7.1. 126
7.3.4.2.3.1 Claim under Article 6.1. 126
7.3.4.2.3.2 Alternative claim under
Article 7.1. 127
7.3.4.3 Conclusion. 128
7.3.5
Claim regarding sequential application of valuation methods. 129
7.3.5.1 Introduction. 129
7.3.5.2 Main arguments of the parties. 129
7.3.5.3 Analysis by the Panel 130
7.3.5.3.1 General considerations. 130
7.3.5.3.2 Review of the 2002-2003 Charges. 131
7.3.5.4 Conclusion. 133
7.3.6
Claim under Article 1.2(a), third sentence, of the CVA. 133
7.3.6.1 Introduction. 133
7.3.6.2 Main arguments of the parties. 134
7.3.6.3 Analysis by the Panel 135
7.3.6.3.1 General considerations. 135
7.3.6.3.2 The applicability of Article
1.2(a), third sentence, to the Public Prosecutor 137
7.3.6.3.3 The communications between
the DSI and PMTL. 138
7.3.6.4 Conclusion. 142
7.3.7
Article XX of the GATT 1994. 142
7.3.7.1 Introduction. 142
7.3.7.2 Main arguments of the parties. 143
7.3.7.3 Analysis by the Panel 144
7.3.7.3.1 Applicability of Article XX of
the GATT 1994 to the CVA. 144
7.3.7.3.2 Justification under Article
XX(a) or XX(d) 147
7.3.7.4 Conclusion. 149
7.4 The 1,052 revised Notices of Assessment
(NoAs) 149
7.4.1
Introduction. 149
7.4.2
Main arguments of the parties. 150
7.4.3
Analysis by the Panel 152
7.4.3.1 General considerations. 152
7.4.3.2 The termination of the measures. 155
7.4.3.3 Reintroduction of the same or
materially similar measures. 159
7.4.3.4 The practical value of additional
findings in the event of reintroduction. 161
7.4.4
Conclusion. 162
8 Conclusions
and recommendations. 163