Question:
My company is headquartered in Country A and specializes in producing alcoholic beverages. When exporting this product to Country B, I discovered that the special consumption tax I am required to pay is higher than the tax applied to similar alcoholic products produced in Country B. I believe I am being discriminated against. Can I file a complaint against Country B at the WTO?
Answer
You may initiate a procedure to file a complaint against Country B at the WTO; however, you cannot do this as an individual company. According to Article 3.3 of the DSU (Understanding on Rules and Procedures Governing the Settlement of Disputes), a private enterprise does not have the direct right to bring a case. Instead, the government or competent authority of Country A, where your company is headquartered, must represent you and submit the complaint to the WTO Dispute Settlement Body (DSB).
The dispute falls under the scope of the GATT 1994 Agreement because it involves tangible goods—alcohol—and domestic tax policies. Specifically, Country B may be violating the National Treatment (NT) obligation under Article III of GATT 1994 by imposing a higher special consumption tax on imported products than on “like” domestic products. The determination of “likeness” depends on factors such as physical characteristics, intended use, and consumer preferences. If your product is considered “like” or in direct competition with domestic alcoholic products in Country B, imposing a higher tax constitutes a breach of the NT principle.
Furthermore, the special consumption tax is considered a domestic tax and thus falls within the application of Article III of GATT 1994. Therefore, if these conditions are met, you have a valid basis to request that the government of Country A initiate a WTO complaint against Country B for discriminatory taxation.
Consultation: International commercial law services
