Honduras challenged the Dominican Republic's general measures relating to import and sale of imported cigarettes, including a stamp requirement, import surcharges, foreign exchange fees, a consumption tax, and a bond requirement. A WTO Panel found that the stamp requirement, the transitional surcharge, the foreign exchange fee, and the selective consumption tax each violated international trade law. However, the Panel found that Honduras did not demonstrate that the bond requirement imposed on cigarette importers violates international trade law.
Honduras v. Dominican Republic, WT/DS302/P/R, World Trade Organization (WTO) Panel Report (2004).
Tobacco companies or front groups may challenge any legislative or regulatory measure that affects their business interests. Unlike public interest litigation, these cases seek to weaken health measures. These cases frequently involve the industry proceeding against the government. For example, a group of restaurant owners challenging a smoke free law as unconstitutional.
Governments may bring complaints before intergovernmental bodies on tobacco-related issues. For example, one country may complain that another country’s tax regime discriminates against its exported tobacco products. In some cases, a treaty may allow a private party to file a complaint against a government before an intergovernmental body.
A violation of the right to carry on trade, business, or profession of a person’s choice. This right may also be called the right to free enterprise or economic freedom. The industry may argue that a business should be able to conduct its business without government regulation, including whether or not to be smoke free.
A claim of an infringement of any international trade agreement, including General Agreement on Tariffs and Trade (GATT), Technical Barriers to Trade (TBT), Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), or bilateral treaties.
Regulatory measures may lead to an increase in illegal sales, such as counterfeit products. The industry may also argue that such illicit trade will reduce tobacco tax revenue.
Type of Tobacco Product
None
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
"In order to determine whether the requirement that importers and domestic producers of cigarettes must post a bond accords less favourable treatment to imported cigarettes than to like domestic products, the Panel is guided by the statement from the Appellate Body in the sense that the assessment should focus on examining "whether a measure modifies the conditions of competition in the relevant market to the detriment of imported products". In this respect, the Panel finds that the bond requirement is applied in an equal manner, both formally and in practice, to domestic and imported cigarettes. The Panel considers that Honduras has not demonstrated how the identical treatment accorded to domestic and imported cigarettes in respect of the bond requirement modifies the conditions of competition to the detriment of imported products. In conclusion, the Panel considers that Honduras has failed to establish that the bond requirement imposed by the Dominican Republic accords less favourable treatment to imported cigarettes than that accorded to the like domestic products, in a manner inconsistent with Article III:4 of the GATT 1994."
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
Honduras challenged the Dominican Republic's general measures relating to import and sale of imported cigarettes, including a stamp requirement, import surcharges, foreign exchange fees, a consumption tax, and a bond requirement. A WTO Panel found that the stamp requirement, the transitional surcharge, the foreign exchange fee, and the selective consumption tax each violated international trade law. However, the Panel found that Honduras did not demonstrate that the bond requirement imposed on cigarette importers violates international trade law.