Thailand – Customs and fiscal Measures on Cigarettes from the Philippines, (WT/DS371/AB/R), Appellate Body Report issued on 17 June 2011, adopted on 15 July 2011

This dispute concerns a series of inter-related customs and internal tax measures taken by Thailand regarding cigarettes imported into Thailand from the Philippines by Philip Morris (PM) Thailand. According to the Philippines the Thai customs and tax measures have been both formulated and applied by Thailand in ways that serve to protect the interests of the State-owned monopoly producer of cigarettes, Thailand Tobacco Monopoly (TTM). In addition to protecting TTM's domestic cigarettes, for the Government of Manila the Thai measures are characterized by a lack of transparency that deprives the importer of the most basic information regarding the regulatory treatment of its goods, and also by chronic delays in decision-making. The Philippines alleged that Thai law discriminates between resellers of imported cigarettes and resellers of domestic cigarettes in a manner inconsistent with Article III:2 and Article III:4 of the GATT 1994. According to the Philippines, Thailand acts inconsistently with Article III:2, first sentence, because Thailand imposes VAT liability on imported cigarettes in excess of that applied to like domestic cigarettes through an exemption from VAT for resales of domestic cigarettes. The Philippines also claimed that Thailand acts inconsistently with Article III:4 because its VAT system accords less favourable treatment to imported cigarettes by imposing more onerous administrative requirements on resellers of imported cigarettes than on resellers of like domestic cigarettes.