WORLD TRADE
ORGANIZATIONWT/DS227/1
6 March 2001
(01-1082)
Original:  Spanish
PERU – TAXES ON CIGARETTES
Request for Consultations by Chile
The following communication, dated 1 March 2001, from the Permanent Mission of Chile to
the Permanent Mission of Peru and to the Chairman of the Dispute Settlement Body, is circulated in
accordance with Article 4.4 of the DSU.
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My authorities have instructed me to reques t consultations with the Government of Peru
pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes and Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994)
regarding the differential taxation of cigarettes introduced by Supreme Decree No. 158-99.
By virtue of the authority granted under Article 61 of the new text of the General Sales Tax
and Selective Consumption Tax Law, Supreme Decree No. 158-99-EF of 25 September 1999
modifies appendices III and IV of that Law, which identify the goods subject to the selective
consumption tax.  Article 1B of the said Supreme Decree amends the tax applied to cigarettes made of
dark tobacco, cigarettes made of standard bright tobacco and cigarettes made of premium bright
tobacco, setting a different specific tax for each one of these categories of cigarettes ranging fromS/0.025 to S/0.100 per unit.
The difference in the amount of the tax appears to be contingent only on the number of
countries in which the different commercial brands of cigarettes are marketed – more than three or
less than three – a criterion which is a source of concern for my Government, since it could signifydiscrimination against imported cigarettes, from Chile for example, which, being marketed in more
than three countries, are subject to a higher tax than local brand cigarettes.  This situation, which is
damaging to Chilean cigarette exports to Peru, could constitute a violation of the GATT 1994 – in
particular, but not necessarily exclusively, of Article III.2 of the GATT 1994 – and of a repeated
Appellate Body jurisprudence in this area.
The Government of Chile looks forward to receiving a prompt reply from your Government
to this request for consultations and to setting a mutually convenient date on which to hold them.
My Government reserves the right to raise other factual or legal claims in the course of the
consultations.
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