World Trade Organization

Jul 12th 2015, 20:19 in International Law
Is there any litigation against Armenia in the framework of the WTO legal system.


Law Firm

ELL Partnership CJSC

Jul 12th 2015, 20:21
Since her admission (23, November 2001) the Republic of Armenia has been obliged to be a respondent at the World Trade Organization (WTO) for the first time. The application was brought by another member of the WTO – Ukraine, and this had been the first time also for Ukraine to be involved in a dispute settlement procedure and bring an application against another member.
On 20 July 2010, Ukraine requested consultations with Armenia pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes and Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994), regarding Armenia's measures affecting the importation and internal sale of cigarettes and alcoholic beverages.
The problem was that Armenia's law “On Presumptive Tax for Tobacco Products” levies discriminatory internal taxes on imported tobacco products, defining higher taxes on imported products.
Ukraine alleged that this was in violation of Article III of the GATT 1994 and Armenia's obligations under the provisions of paragraph 1.2 of the Protocol on the Accession of the Republic of Armenia to the WTO (WT/L/506, 17 December 2002) insofar as it incorporates by reference the commitments set out in paragraph 72 of the Report of the Working Party on the Accession of the Republic of Armenia to the WTO (WT/ACC/ARM/23, 26 November 2002), which provides as follows:
"[From the date of accession, Armenia would apply its domestic taxes, including value-added and excise taxes, in a non-discriminatory manner consistent with Articles I and III of the GATT 1994....]"
Besides the tax policy, the Applicant found that there was discrimination also in the field of custom duties, as Armenia imposed higher custom payments on imported tobacco products, which was in violation of Article II:1(a&b, first sentence) of the General Agreement on Tariffs and Trade (1994).
As it concerns the excise tax, the Law "On Excise Tax" applied excise tax on imported alcoholic beverages at rates, which were substantially higher than those applied on like domestic products, which was in violation paragraphs 72 and 70 of the Report of the Working Party on the Accession of the Republic of Armenia to the WTO.
Ukraine found that it was impossible to resolve the dispute through consultations and requested for the establishment of a panel in 02, October 2010.

As an answer, Armenia said that she hoped to intensify bilateral consultations with Ukraine and was thus not in a position to agree to the establishment of a panel, the right, which she had.
But if the Applicant asks for a panel of judges to be set up for the second time, Armenia cannot block that from happening.

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