WTO - Armenia appears to impose a lower tax rate on domestic tobacco products than those imported from the Ukraine..

September 21, 2010 - For the first time since Ukraine became World Trade Organization (WTO) member, it has requested that the WTO Dispute Settlement Body establish a panel to settle a dispute with Armenia over less favorable conditions for the import of Ukrainian tobacco and alcohol than those of national origin.

According to the WTO, Ukraine asks that this request be placed on the agenda of the next meeting of the WTO Dispute Settlement Body that will take place on September 21, 2010. According to Ukraine, it was impossible to resolve the dispute through consultations. (ARMENIA – MEASURES AFFECTING THE IMPORTATION AND
, 7/22/2010)

"In case a country refuses from consultations or does not start them, a WTO member that has placed a request for the consultations has the right, under Article 4.3 of the Understanding on Rules and Procedures Governing the Settlement of Disputes, to immediately request the establishment of a panel to settle a dispute," Andrii Zablotskyi, an associate from the Volkov Koziakov & Partners law firm, told Interfax-Ukraine. He also said that following examination, the panel issues recommendations to the county which has violated the WTO agreements under which the country should bring its legislation in line with the WTO standards.

Ukraine alleged that Armenia's law "On Presumptive Tax for Tobacco Products" of March 24, 2000, levies discriminatory internal taxes on imported tobacco products and is therefore in violation of Article III of the GATT 1994 and paragraph 1.2 of Armenia's Protocol of Accession to the WTO. Moreover, the law imposes customs duties on such imported tobacco products at a rate of 24%, which is higher than Armenia's WTO bound rate of 15%.

Armenia - Legislative documents which contain articles regulating tobacco related issues.

Reference: Ukraine requests World Trade Organization to settle tobacco dispute with Armenia, KyivPost.com, 9/21/2010.

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