• Copy the reference
  • Tutorial video
Source(s) of the information:

Lawyers, other representatives, expert(s), tribunal’s secretary

Report of the Panel

CASES CITED IN THIS REPORT

Short titleFull case title and citation
Argentina – Hides and Leather Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and Import of Finished Leather, WT/DS155/R and Corr.1, adopted 16 February 2001
Argentina – Import Measures Appellate Body Reports, Argentina – Measures Affecting the Importation of Goods, WT/DS438/AB/R / WT/DS444/AB/R / WT/DS445/AB/R, adopted 26 January 2015
Argentina – Import Measures Panel Reports, Argentina – Measures Affecting the Importation of Goods, WT/DS438/R and Add.1 / WT/DS444/R and Add.1 / WT/DS445/R and Add.1, adopted 26 January 2015, as modified (WT/DS438/R) and upheld (WT/DS444/R / WT/DS445/R) by Appellate Body Reports WT/DS438/AB/R / WT/DS444/AB/R / WT/DS445/AB/R
Argentina – Textiles and Apparel Appellate Body Report, Argentina – Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/AB/R and Corr.1, adopted 22 April 1998
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998
Brazil ‑ Retreaded Tyres Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/AB/R, adopted 17 December 2007
Canada — Aircraft Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft, WT/DS70/AB/R, adopted 20 August 1999
Canada — Autos Appellate Body Report, Canada – Certain Measures Affecting the Automotive Industry, WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000
Canada — Autos Panel Report, Canada – Certain Measures Affecting the Automotive Industry, WT/DS139/R, WT/DS142/R, adopted 19 June 2000, as modified by Appellate Body Report WT/DS139/AB/R, WT/DS142/AB/R
Canada — Periodicals Appellate Body Report, Canada – Certain Measures Concerning Periodicals, WT/DS31/AB/R, adopted 30 July 1997
Canada — Wheat Exports and Grain Imports Appellate Body Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, WT/DS276/AB/R, adopted 27 September 2004
Canada – Wheat Exports and Grain Imports Panel Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, WT/DS276/R, adopted 27 September 2004, upheld by Appellate Body Report WT/DS276/AB/R
Chile — Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products, WT/DS207/AB/R, adopted 23 October 2002
China — Auto Parts Panel Reports, China – Measures Affecting Imports of Automobile Parts, WT/DS339/R, Add.1 and Add.2 / WT/DS340/R, Add.1 and Add.2 / WT/DS342/R, Add.1 and Add.2, adopted 12 January 2009, upheld (WT/DS339/R) and as modified (WT/DS340/R / WT/DS342/R) by Appellate Body Reports WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R
China — Electronic Payment Services Panel Report, China – Certain Measures Affecting Electronic Payment Services, WT/DS413/R and Add.1, adopted 31 August 2012
China — Publications and Audiovisual Products Panel Report, China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by Appellate Body Report WT/DS363/AB/R
China — Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted 22 February 2012
China – Raw Materials Panel Reports, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/R, Add.1 and Corr.1 / WT/DS395/R, Add.1 and Corr.1 / WT/DS398/R, Add.1 and Corr.1, adopted 22 February 2012, as modified by Appellate Body Reports WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R
Colombia — Ports of Entry Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry, WT/DS366/R and Corr.1, adopted 20 May 2009
Dominican Republic – Import and Sale of Cigarettes Appellate Body Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted 19 May 2005
Dominican Republic – Import and Sale of Cigarettes Panel Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS302/AB/R
EC — Asbestos Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos‑Containing Products, WT/DS135/AB/R, adopted 5 April 2001
EC — Asbestos Panel Report, European Communities – Measures Affecting Asbestos and Asbestos‑Containing Products, WT/DS135/R and Add.1, adopted 5 April 2001, as modified by Appellate Body Report WT/DS135/AB/R
EC — Bananas III Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997
EC — Bananas III (Ecuador) Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Complaint by Ecuador, WT/DS27/R/ECU, adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R
EC – Bananas III (US) Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Complaint by the United States, WT/DS27/R/USA, adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R
EC — Bananas III (Guatemala and Honduras) Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Complaint by Guatemala and Honduras, WT/DS27/R/GTM, WT/DS27/R/HND, adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R
EC — Bananas III (Mexico) Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Complaint by Mexico, WT/DS27/R/MEX, adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R
EC — Commercial Vessels Panel Report, European Communities – Measures Affecting Trade in Commercial Vessels, WT/DS301/R, adopted 20 June 2005
EC — Seal Products Appellate Body Reports, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/AB/R / WT/DS401/AB/R
EC — Tariff Preferences Panel Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/R, adopted 20 April 2004, as modified by Appellate Body Report WT/DS246/AB/R
Guatemala – Cement I Appellate Body Report, Guatemala – Anti‑Dumping Investigation Regarding Portland Cement from Mexico, WT/DS60/AB/R, adopted 25 November 1998
India – Autos Panel Report, India – Measures Affecting the Automotive Sector, WT/DS146/R, WT/DS175/R, and Corr.1, adopted 5 April 2002
India – Quantitative Restrictions Panel Report, India – Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products, WT/DS90/R, adopted 22 September 1999, upheld by Appellate Body Report WT/DS90/AB/R
Japan – Alcoholic Beverages II Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996
Korea — Various Measures on Beef Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001
Korea – Various Measures on Beef Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/R, WT/DS169/R, adopted 10 January 2001, as modified by Appellate Body Report WT/DS161/AB/R, WT/DS169/AB/R
Mexico – Taxes on Soft Drinks Appellate Body Report, Mexico – Tax Measures on Soft Drinks and Other Beverages, WT/DS308/AB/R, adopted 24 March 2006
Mexico – Telecoms Panel Report, Mexico – Measures Affecting Telecommunications Services, WT/DS204/R, adopted 1 June 2004
Thailand – Cigarettes (Philippines) Appellate Body Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS371/AB/R, adopted 15 July 2011
US — Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain Corrosion‑Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R and Corr.1, adopted 19 December 2002
US – Clove Cigarettes Appellate Body Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/AB/R, adopted 24 April 2012
US – Clove Cigarettes Panel Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/R, adopted 24 April 2012, as modified by Appellate Body Report WT/DS406/AB/R
US – Continued Suspension Appellate Body Report, United States – Continued Suspension of Obligations in the EC – Hormones Dispute, WT/DS320/AB/R, adopted 14 November 2008
US – COOL Appellate Body Reports, United States – Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/AB/R / WT/DS386/AB/R, adopted 23 July 2012
US – Countervailing and Anti‑Dumping Measures (China) Appellate Body Report, United States – Countervailing and Anti‑Dumping Measures on Certain Products from China, WT/DS449/AB/R and Corr.1, adopted 22 July 2014
US – FSC (Article 21.5 – EC) Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations" – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/AB/RW, adopted 29 January 2002
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross‑Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005
US – Gambling Panel Report, United States – Measures Affecting the Cross‑Border Supply of Gambling and Betting Services, WT/DS285/R, adopted 20 April 2005, as modified by Appellate Body Report WT/DS285/AB/R
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996
US – Offset Act (Byrd Amendment) Appellate Body Report, United States – Continued Dumping and Subsidy Offset Act of 2000, WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003
US — Poultry (China) Panel Report, United States – Certain Measures Affecting Imports of Poultry from China, WT/DS392/R, adopted 25 October 2010
US — Section 211 Appropriations Act Appellate Body Report, United States – Section 211 Omnibus Appropriations Act of 1998, WT/DS176/AB/R, adopted 1 February 2002
US — Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998
US ‑ Shrimp (Article 21.5 ‑ Malaysia) Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia, WT/DS58/AB/RW, adopted 21 November 2001
US – Shrimp (Thailand) Panel Report, United States – Measures Relating to Shrimp from Thailand, WT/DS343/R, adopted 1 August 2008, as modified by Appellate Body Report WT/DS343/AB/R / WT/DS345/AB/R
US – Softwood Lumber IV Appellate Body Report, United States – Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, WT/DS257/AB/R, adopted 17 February 2004
US — Tuna II (Mexico) Appellate Body Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, adopted 13 June 2012
US — Upland Cotton Panel Report, United States – Subsidies on Upland Cotton, WT/DS267/R, Add.1 to Add.3 and Corr.1, adopted 21 March 2005, as modified by Appellate Body Report WT/DS267/AB/R
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, and Corr.1
US – Zeroing (EC) (Article 21.5 – EC) Appellate Body Report, United States – Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing") – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS294/AB/RW and Corr.1, adopted 11 June 2009
US – 1916 Act Appellate Body Report, United States – Anti‑Dumping Act of 1916, WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000

CASES CITED IN THIS REPORT

ExhibitShort titleFull title
ARG‑5 OECD, Harmful Tax Competition – An Emerging Global Issue(1998) OECD, Harmful Tax Competition – An Emerging Global Issue, 1998
ARG‑6 OECD, Towards Global Tax Co‑operation (2000) OECD, Towards Global Tax Co‑operation. Report to the 2000 Ministerial Council Meeting and Recommendations by the Committee on Fiscal Affairs. Progress in Identifying and Eliminating Harmful Tax Practices
ARG‑7 OECD, 2001 Report OECD, The OECD's Project on Harmful Tax Practices: The 2001 Progress Report
ARG‑8 Note from the Minister of the Economy and Finance of Panama to the Secretary‑General of the OECD (2002) Note from the Minister of the Economy and Finance of Panama to the Secretary‑General of the OECD, 15 April 2002
ARG‑9 OECD, 2004 Report OECD, The OECD's Project on Harmful Tax Practices: The 2004 Progress Report
ARG‑10 Global Forum, A Process for Achieving a Global Level Playing Field (2004) OECD, A Process for Achieving a Global Level Playing Field, Global Forum on Taxation, Berlin, 3‑4 June 2004
ARG‑14 G‑20, Declaration, Summit on Financial Markets and the World Economy (2008) G‑20, Declaration, Summit on Financial Markets and the World Economy, 15 November 2008
ARG‑15 G‑20, Leader's Statement (2009) G‑20, Leader's Statement, The Pittsburgh Summit, 24‑27 September 2009
ARG‑17 OECD, Global Forum, Moving Forward on the Global Standards of Transparency and Exchange of Information for Tax Purposes (2009) OECD, Global Forum, Moving Forward on the Global Standards of Transparency and Exchange of Information for Tax Purposes, Mexico, 1‑2 September 2009
ARG‑19 G‑20, Cannes Summit Final Declaration: Building our Common Future(2011) G‑20, Cannes Summit Final Declaration: Building our Common Future: Renewed Collective Action for the Benefit of All, 2011
ARG‑20 G‑20, Leaders Declaration (2012) G‑20, Leaders Declaration, Los Cabos, Mexico, 2012
ARG‑21 Action Plan on Base Erosion and Profit Shifting (2013) OECD, Action Plan on Base Erosion and Profit Shifting, 2013
ARG‑22 OECD, Addressing Base Erosion and Profit Shifting (2013) OECD, Addressing Base Erosion and Profit Shifting (BEPS), 2013
ARG‑24 OECD, Behind the Corporate Veil – Using Corporate Entities for Illicit Purposes (2001) OECD, Behind the Corporate Veil – Using Corporate Entities for Illicit Purposes, 2001
ARG‑25 FATF, The FATF Recommendations (2012) FATF, International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, The FATF Recommendations, February 2012
ARG‑26 GAFISUD, Recomendaciones del GAFI (2012) GAFISUD, Estándares Internacionales sobre la Lucha contra el Lavado de Activos y el Financiamiento del Terrorismo y la Proliferación, Las Recomendaciones del GAFI, February 2012
ARG‑32 Law on concealment and laundering of money of criminal origin Law No. 25,246 of 5 May 2000 on concealment and laundering of money of criminal origin
ARG‑36 Global Forum, Tax Transparency 2013 Global Forum on Transparency and Exchange of Information for Tax Purposes,Tax Transparency 2013: Report on Progress, 2013
ARG‑40 Global Forum, Terms of Reference (2010) OECD, Global Forum on Transparency and Exchange of Information for Tax Purposes,Terms of Reference to Monitor and Review Progress Towards Transparency and Exchange of Information for Tax Purposes, 2010
ARG‑41 OECD, Tax Co‑operation 2009 – Towards a level playing field OECD, Tax Co‑operation 2009 – Towards a level playing field ‑ 2009 Assessment by the Global Forum on Transparency and Exchange of Information
ARG‑44 AFIP,Offshore companies – Fraudulent manœuvres and harmful tax planning Federal Administration of Public Revenue (AFIP), Sociedades Off‑shore – Maniobras fraudulentas y planificación fiscal nociva (Offshore companies – Fraudulent manœuvres and harmful tax planning), 2013
ARG‑47 SSN Resolution No. 38,284/2014 Resolution No. 38,284 of the National Insurance Supervisory Authority (SSN) of 21 March 2014
ARG‑64 IGJ Resolution No. 1/2014 General Resolution No. 1/2014 of the General Justice Inspectorate (IGJ) of 8 April 2014
ARG‑71 Communication "C" No. 65366 Communication "C" No. 65366 of the Central Bank of the Argentine Republic of 26 February 2014
ARG‑75 Communication "A" No. 5237 Communication "A" No. 5237 of the Central Bank of the Argentine Republic of 28 October 2011
ARG‑85 G‑20 Statement on Transparency and Exchange of Information for Tax Purposes (2004) G‑20 Statement on Transparency and Exchange of Information for Tax Purposes, 21 November 2004
ARG‑87 G‑20 Declaration, Saint Petersburg Summit (2013) G‑20 Declaration,Saint Petersburg Summit, 5‑6 September 2013
ARG‑88 ASSAL, General solvency criteria – Reinsurance operations Latin American Association of Insurance Supervisors (ASSAL), Criterios generales de solvencia – Operaciones de reaseguro (General solvency criteria – Reinsurance operations), August 1999
ARG‑90 G‑20 Toronto Summit Declaration (2010) G‑20 Toronto Summit Declaration, 26‑27 June 2010
ARG‑94 ITIO, Leveling the playing field (2005) International Trade and Investment Organization (ITIO), Leveling the playing field, OECD Global Tax Forum, Melbourne, 15‑16 November 2005
ARG‑114 Communiqué, Meeting of Finance Ministers and Central Bank Governors (2009) Communiqué, Meeting of Finance Ministers and Central Bank Governors, United Kingdom, 2009
ARG‑128 Meeting of G‑20 Finance Ministers and Central Bank Governors (2014) Meeting of G‑20 Finance Ministers and Central Bank Governors, Cairns, 20‑21 September 2014
ARG‑135 SSN Resolution No. 38,708/2014 Resolution No. 38,708 of the National Insurance Supervisory Authority (SSN) and the Annex thereto: General Regulations for Insurance Activities (RGAA), of 6 November 2014
ARG‑140 IAIS, Systemic Risk and the Insurance Sector (2009) International Association of Insurance Supervisors (IAIS),Systemic Risk and the Insurance Sector, 25 October 2009
PAN‑1 RIG(Implementing Regulations for the Gains Tax Law) Decree No. 1344 of 19 November 1998 establishing the Implementing Regulations for the Gains Tax Law
PAN‑19 Argentina ‑ Schedule of Specific Commitments Argentina ‑ Schedule of Specific Commitments, GATS/SC/4, 15 April 1994
PAN‑35 Mapfre Foundation, An Introduction to Reinsurance MAPFRE Foundation, An Introduction to Reinsurance, https://www.mapfre.com/documentacion/publico/i18n/catalogo_imagenes/grupo.cmd?path=1074274 (http://www.mapfre.com/documentacion/publico/i18n/catalogo_imagenes/grupo.cmd?path=1062314)
PAN‑47 Note by the WTO Secretariat on economic needs tests (2001) Note by the WTO Secretariat on economic needs tests, S/CSS/W/118, 30 November 2001
PAN‑83 Constitutional Principles on Tax Matters Principios de Derecho Constitucional Argentino en Materia Tributaria (Principles of Argentine Constitutional Law on Tax Matters)
PAN‑3 / ARG‑35 Decree No. 589/2013 Decree No. 589 of the Federal Administration of Public Revenue (AFIP) of 27 May 2013
PAN‑3 / ARG‑37 AFIP Resolution No. 3,576/2013 General Resolution No. 3,576 of the Federal Administration of Public Revenue (AFIP) of 27 December 2013
PAN‑4 / ARG‑42 Gains Tax Law (LIG) Law No. 20,628 on Gains Tax of 29 December 1973
PAN‑9 / ARG‑45 Law on Tax Procedure (LPT) Law No. 11,683 on Tax Procedure of 13 July 1998
PAN‑34 / ARG‑43 Law on Commercial Companies (LSC) Law No. 19,550 on Commercial Companies of 3 April 1972
PAN‑36 / ARG‑27 SSN Resolution No. 35,615/2011 Resolution No. 35,615 of the National Insurance Supervisory Authority (SSN) of 11 February 2011
PAN‑40 / ARG‑48 SSN Resolution No. 35,794/2011 Resolution No. 35,794 of the National Insurance Supervisory Authority (SSN) of 19 May 2011
PAN‑45 / ARG‑39 2001 Guidelines Guidelines for the Scheduling of Specific Commitments under the General Agreement on Trade in Services (GATS) ‑ Adopted by the Council for Trade in Services on 23 March 2001, S/L/92
PAN‑46 / ARG‑79 1993 Guidelines Scheduling of Initial Commitments in Trade in Services: Explanatory Note, MTN.GNS/W/164, 3 September 1993
PAN‑48 / ARG‑49 Capital Market Law Law No. 26,831 on the Capital Market of 27 December 2012
PAN‑58 / ARG‑50 CNV Rules 2013 Rules of the National Securities Commission, New Text 2013 (Title XI), approved by means of General Resolution No. 622
PAN‑62 / ARG‑33 IGJ Resolution No. 7/2005 General Resolution No. 7 of the General Justice Inspectorate (IGJ) of 25 August 2005 (Book III, Title III)
PAN‑67 / ARG‑69 Communication "A" No. 4662 Communication "A" No. 4662 of the Central Bank of the Argentine Republic of 11 May 2007
PAN‑68 / ARG‑70 Communication "A" No. 4692 Communication "A" No. 4692 of the Central Bank of the Argentine Republic of 31 July 2007
PAN‑71 / ARG‑31 Communication "A" No. 4940 Communication "A" No. 4940 of the Central Bank of the Argentine Republic of 12 May 2009

ABBREVIATIONS

AbbreviationDescription
AEOI Automatic Exchange of Information
AFIP Federal Public Revenue Administration
AML/CFT Anti‑money laundering/Combating the financing of terrorism
ASSAL Association of Latin American Insurance Supervisors
BCRA Central Bank of the Argentine Republic
BEPS Base Erosion and Profit Shifting
CDD Customer due diligence
CNV National Securities Commission
Cooperative country Country cooperating for tax transparency purposes
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
EOIR Exchange of information on request
FATF Financial Action Task Force
FSRB FATF‑style regional body
G‑20 Group of Twenty
GAFILAT Financial Action Task Force of Latin America
GATS General Agreement on Trade in Services
GATT 1994 General Agreement on Tariffs and Trade 1994
Global Forum Global Forum on Transparency and Exchange of Information for Tax Purposes
IAIS International Association of Insurance Supervisors
ICJ International Court of Justice
IGJ General Justice Inspectorate
IMF International Monetary Fund
IOSCO Organization of Securities Commissions
LIG Gains Tax Law
LPT Law on Tax Procedure
LSC Law on Commercial Companies
MFN Most Favoured Nation
MULC Single Free Foreign Exchange Market
Non‑cooperative country Country not cooperating for tax transparency purposes
N.T. 2013 New Text of 2013 CNV Rules
OECD Organisation for Economic Co‑operation and Development
PRP Peer review process
RAE Real Academia Española [Spanish Royal Academy]
RIG Regulation to the Gains Tax Law
SSN National Insurance Supervisory Authority
TBT Agreement Agreement on Technical Barriers to Trade
WTO World Trade Organization
Vienna Convention Vienna Convention on the Law of Treaties

1 INTRODUCTION

1.1 Complaint by Panama

1.1.
On 12 December 2012, Panama requested consultations with Argentina pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and Article XXII of the General Agreement on Trade in Services(GATS) with respect to the measures and claims set out below.1
1.2.
Consultations were held in Geneva on 5 February 2013 but failed to resolve the dispute.2

1.2 Panel establishment and composition

1.3.
On 13 May 2013, Panama requested the establishment of a panel pursuant to Article 6 of the DSU, with standard terms of reference.3 At its meeting on 25 June 2013, the Dispute Settlement Body (DSB) established a panel pursuant to the request of Panama in document WT/DS453/4, in accordance with Article 6 of the DSU.4
1.4.
The Panel's terms of reference are the following:

To examine, in the light of the relevant provisions of the covered agreements cited by the parties to the dispute, the matter referred to the DSB by Panama in document WT/DS453/4 and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.5

1.5.
On 30 October 2013, Panama requested the Director‑General to determine the composition of the Panel, pursuant to Article 8.7 of the DSU. On 11 November 2013, the Director‑General accordingly composed the Panel as follows:

Chairperson: Mr Pierre Pettigrew

Members: Mr Gonzalo de las Casas

Mr Rodrigo Valenzuela

1.6.
Australia, Brazil, China, Ecuador, the European Union, Guatemala, Honduras, India, Oman, the Kingdom of Saudi Arabia, Singapore, and the United States notified their interest in participating in the Panel proceedings as third parties.6

1.3 Panel proceedings

1.7.
On 12 December 2013, after consultation with the parties, the Panel adopted its Working Procedures7 and timetable, which were subsequently revised on 24 March and 23 May 2014, respectively.
1.8.
The Panel held a first substantive meeting with the parties on 23 and 24 September 2014. A session with the third parties took place on 24 September 2014. The Panel held a second substantive meeting with the parties on 27 and 28 January 2015. On 27 March 2015, the Panel issued the descriptive part of its Report to the parties. The Panel issued its Interim Report to the parties on 22 May 2015. The Panel issued its Final Report to the parties on 30 June 2015.

2 FACTUAL ASPECTS

2.1 Introduction

2.1.
This dispute concerns eight financial, taxation, foreign exchange and registration measures imposed by Argentina, mostly8 on services and service suppliers from countries which Argentina terms "countries not cooperating for tax transparency purposes"9 (hereinafter, non‑cooperative countries).10 The classification of a country as a "country cooperating for tax transparency purposes" (hereinafter, cooperative country) is provided for in Decree No589/2013.11
2.2.
In this section of the Report, the Panel will begin by describing Decree No589/2013, which is the common denominator for the eight measures challenged by Panama. The eight measures at issue will then be described, together with their broader factual context, which includes the relevant Argentine legislation applicable to cooperative countries, the tax transparency standards of the Global Forum on Transparency and Exchange of Information for Tax Purposes (hereinafter, the Global Forum) and the recommendations of the Financial Action Task Force (FATF).
2.3.
Where the parties disagree on any factual issue that needs to be resolved, the Panel will address it in its findings.

2.2 Decree No. 589/2013

2.4.
Decree No589/2013 is the key element of the eight measures challenged by Panama inasmuch as they all refer to services and service suppliers12 of countries not classified as cooperative under the said Decree.13
2.5.
Decree No589/2013, which is not one of the measures at issue, lays down the requirements for Argentina to grant a country, dominion, jurisdiction, territory, associate State or special tax regime the status of cooperative country.14 Article 1 of the Decree stipulates as follows in relevant part:

Article 1 –...

Countries, dominions, jurisdictions, territories, associate States or special tax regimes which have signed with the Government of the ARGENTINE REPUBLIC an agreement on exchange of tax information or a convention for the avoidance of international double taxation with a broad information exchange clause shall be considered cooperative for tax transparency purposes, provided that there is an effective exchange of information.

This status shall lapse in cases where the signed agreement or convention is denounced or becomes inoperative for any reason of nullity or termination governing international agreements or if it is found that there is a lack of effective exchange of information.

A country may also be recognized as cooperative for tax transparency purposes if the government concerned has initiated the required negotiations with the Government of the ARGENTINE REPUBLIC with a view to signing an agreement on exchange of tax information or a convention for the avoidance of international double taxation with a broad information exchange clause.

The agreements and conventions referred to in this Article shall as far as possible comply with the international standards on transparency adopted by the Global Forum on Transparency and Exchange of Information for Tax Purposes so that by virtue of the application of their domestic rules, the respective countries, dominions, jurisdictions, territories, associate States or special tax regimes with which such agreements or conventions have been signed may not invoke banking, stock market or any other form of secrecy in response to specific requests for information from the ARGENTINE REPUBLIC.

The FEDERAL PUBLIC REVENUE ADMINISTRATION, an autonomous body within the MINISTRY OF THE ECONOMY AND PUBLIC FINANCE, shall establish the criteria for determining whether or not there is effective exchange of information and the necessary requirements for initiating negotiations on the signing of the aforementioned agreements and conventions.

2.6.
Article 2 of Decree No589/2013 empowers the Federal Public Revenue Administration (AFIP) "to draw up the list of countries, dominions, jurisdictions, territories, associate States and special tax regimes considered cooperative for tax transparency purposes, to publish it on its website (http://www.afip.gob.ar) and to keep the publication up to date in accordance with the provisions of this Decree".15 According to Argentina, this list is updated annually at the beginning of the fiscal year.16
2.7.
At the time of issuing this Report to the parties, the list of countries considered by Argentina to be cooperative continues to be the one published on the AFIP website on 1 January 2014 pursuant to AFIP's General Resolution No3,576/201317 and comprises the following countries: Albania, Andorra, Angola, Anguilla, Armenia, Aruba, Australia, Austria, Azerbaijan, Bahamas, Belgium, Belize, Bermuda, Bolivia, Brazil, British Virgin Islands, Canada, Cayman Islands, Chile, China, Colombia, Costa Rica, Croatia, Cuba, Curaçao, Czech Republic, Denmark, Dominican Republic, Ecuador, El Salvador, Estonia, Faroe Islands, Finland, France, Georgia, Germany, Ghana, Greece, Greenland, Guatemala, Guernsey, Haiti, Holy See, Honduras, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Jamaica, Japan, Jersey, Kazakhstan, Kenya, Republic of Korea, Kuwait, Latvia, Liechtenstein, Lithuania, Luxembourg, Macao, Macedonia, Malta, Mauritius, Mexico, Moldova, Monaco, Montenegro, Montserrat, Morocco, Netherlands, New Zealand, Nicaragua, Nigeria, Norway, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Qatar, Romania, Russia, San Marino, Saudi Arabia, Singapore, Sint Maarten, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Tunisia, Turks and Caicos Islands, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Venezuela, and Viet Nam.
2.8.
Pursuant to Article 1 of AFIP Resolution No3,576/2013, these cooperative countries are classified into three categories: (a) cooperative countries which have signed a double taxation convention or an information exchange agreement, with a positive assessment of effective exchange of information; (b) cooperative countries with which a double taxation convention or information exchange agreement has been signed but it has not been possible to assess effective exchange; and (c) cooperative countries with which the process of negotiating or ratifying a double taxation convention or information exchange agreement has been initiated.18

2.3 The measures at issue

2.3.1 Introduction

2.9.
Panama challenges the following eight measures in this dispute19:

Measure No.Description
1 Tax treatment in the collection of gains tax on certain transactions involving non‑cooperative countries (hereinafter withholding tax on payments of interest or remuneration)
2 Tax treatment imposed on entry of funds from non‑cooperative countries (hereinafter presumption of unjustified increase in wealth)
3 Valuation of transactions with persons from non‑cooperative countries (hereinafter transaction valuation based on transfer prices)
4 Criteria for applying deductions (hereinafter payment received rule20 for the allocation of expenditure)
5 Measures affecting trade in reinsurance and retrocession services21 (hereinafter requirements relating to reinsurance services)
6 Measures affecting trade in financial instruments (hereinafter requirements for access to the Argentine capital market)
7 Requirements for the registration of companies, branches and shareholders of certain foreign service suppliers (hereinafter requirements for the registration of branches)
8 Measures affecting the repatriation of investments (hereinafter foreign exchange authorization requirement)

2.10.
The eight measures challenged by Panama and described below reflect the distinction between cooperative and non‑cooperative countries established by Decree No589/2013.22 For example, the withholding tax on payments of interest or remuneration (measure 1), the presumption of unjustified increase in wealth (measure 2), transaction valuation based on transfer prices (measure 3) and the payment received rule for the allocation of expenditure (measure 4) contain explicit references to "jurisdictions with low or no taxes", a reference that has been replaced by "jurisdictions not considered 'cooperative for tax transparency purposes'", pursuant to Decree No589/2013. In the case of measure 2, whose legal basis is the unnumbered article following Article 18 of the Law on Tax Procedure (LPT), there is a specific link to the Gains Tax Law (LIG) in the text of this provision.
2.11.
The requirements relating to reinsurance services (measure 5) and access to the Argentine capital market (measure 6) contain a specific reference to Decree No589/2013. As regards the requirements for the registration of branches (measure 7), Article 192 of IGJ Resolution No7/2005 of the General Justice Inspectorate (IGJ) refers to "jurisdictions considered to have low or no taxes". The wording of this Article was updated by Article 1 of IGJ Resolution No1/2014, which introduces the expression "countries, dominions, jurisdictions, territories, associate States and special tax regimes considered non‑cooperative for tax transparency purposes".23 Lastly, the foreign exchange authorization requirement (measure 8) in Communication "A" 4940 of the Central Bank of the Argentine Republic (BCRA) refers to "dominions, jurisdictions, territories or associate States included in the list in Decree No1,344/98 regulating the Gains Tax Law No20,628 and amendments thereto". This expression was replaced by means of Communication "C" 65366 of the BCRA, which introduces the terminology specific to Decree No589/2013.24
2.12.
Below we shall examine the eight measures at issue.

2.3.2 Measure 1: Withholding tax on payments of interest or remuneration

2.13.
Measure 1 consists of a legal presumption that payments made to creditors25 located in non‑cooperative countries as consideration for the granting of credits or loans or the placement of funds abroad represent a net gain of 100% for the purpose of determining the tax base for gains tax. Argentina applies this measure pursuant to Article 93(c) of the LIG26, which stipulates as follows in relevant part:

When beneficiaries abroad are paid amounts under the headings indicated below, a net gain shall be presumed against any evidence to the contrary:

(c) Interest or remuneration paid on credits, loans or placements of funds of any origin or type obtained abroad:

1. Forty‑three per cent (43%) when the borrower or loan or fund recipient is an entity governed by Law No. 21,526 or if the transactions involve the financing of imports of depreciable movables – except automobiles – provided by the suppliers.

The presumption established in this section shall also apply if the borrower is one of the other persons covered by Article 49 of this Law, a natural person or undivided estate, provided that the creditor is a banking or financial entity based in a jurisdiction not considered to have no or low taxes27 in accordance with the rules in this Law and its implementing regulations or in a jurisdiction that has signed an information exchange agreement with the Argentine Republic and also, by application of its domestic rules, may not involve banking, stock market or any other form of secrecy in response to request for information from the competent tax authority. The financial entities covered by this paragraph are those subject to supervision by the respective central bank or equivalent institution.

The same treatment shall apply if the interest or remuneration consists of debt bonds presented in countries with which there is a reciprocal agreement on protecting investment, provided that their registration in the Argentine Republic, in accordance with the provisions of Law No. 23,576 and the amendments thereto, takes place within two (2) years following their issuance.

2. One hundred per cent (100%) when the borrower or loan or fund recipient is a person covered by Article 49 of this Law, excluding the entities governed by Law No. 21,526 and amendments thereto, a natural person or undivided estate, and the creditor does not meet the condition and requirement specified in the second paragraph of the preceding section.

2.14.
Accordingly, the rule presumes, against any possibility of evidence to the contrary, a net gain in the case of interest or remuneration paid on credits, loans or placements of funds of any origin or type obtained abroad. In order to determine the tax base for purposes of the gains tax, the rule determines the percentage to be applied according to whether the creditor28 delivering the service to the Argentine consumer is located in a cooperative or non‑cooperative country: (i) if the creditor is located in a cooperative country, the net gain is presumed to be 43%; (ii) if, on the other hand, the creditor is located in a non‑cooperative country, the presumed net gain is 100%. On these bases, Argentina applies a rate of 35% in both cases.29
2.15.
The presumption of a net gain of 100% only applies when the recipient of the credit or loan or the investor of the funds is a person covered by Article 49 of the LIG, a natural person or an undivided estate, but not if it is a financial entity governed by Law No21,526.30
2.16.
The measure applies to interest or remuneration paid on credits, loans or placements of funds of any origin or type obtained abroad.31 Argentina points out that "[t]he compensation, cost recovery, commissions and similar payments which creditors may receive as a result of or when granting loans or credits or placing funds in the country are covered by the same regime as is applicable to the corresponding interest."32

2.3.3 Measure 2: Presumption of unjustified increase in wealth

2.17.
Measure 2 consists of the presumption of unjustified increase in wealth applicable to any entry of funds – for the benefit of Argentine taxpayers – from non‑cooperative countries in the context of an ex officio determination of the taxable subject matter by the AFIP for the purpose of gains tax. Argentina applies this measure pursuant to the unnumbered article added after Article 18 of the Law on Tax Procedure (LPT).33 This article provides as follows:

In the case of funds from countries with low or no taxes34 ‑ as indicated in Article 15 of the Gains Tax Law (consolidated text of 1997 and amendments thereto) – irrespective of their nature or purpose or the type of transaction involved, it shall be considered that such funds constitute unjustified increases in wealth for the local borrower or recipient.

Unjustified increases in wealth referred to in the preceding paragraph amounting to over TEN PER CENT (10%) in the form of income disposed of or consumed as non‑deductible expenditure, represent net gains during the financial year in which they occur, for the purposes of determining the gains tax and, where applicable, the basis for estimating the taxable transactions omitted from the respective marketing year in terms of value added and internal taxes.

Notwithstanding the provisions in the preceding paragraphs, the Federal Public Revenue Administration shall consider as justified such entries of funds as are conclusively proven by the interested party to have originated from activities actually carried out by the taxpayer or by a third party in those countries or from placements of duly declared funds.

2.18.
This presumption of unjustified increase in wealth, therefore, affects gains "irrespective of their nature or purpose or the type of transaction involved" and may be rebutted if the taxpayer "conclusively proves that the funds originated from activities actually carried out by the taxpayer or by a third party in those countries or from placements of duly declared funds".35

2.3.4 Measure 3: Transaction valuation based on transfer prices

2.19.
Measure 3 consists of applying methods for valuing transactions based on transfer prices in order to determine the tax base for the gains tax payable by Argentine taxpayers. The measure provides that this valuation method applies to transactions between Argentine taxpayers36 and persons from non‑cooperative countries irrespective of whether they are related.37 Argentina applies this measure pursuant to Article 8, fifth paragraph, and Article 15, second paragraph, of the LIG.38 The relevant parts of these two provisions are reproduced below:

Article 8

Operations covered by this article that are conducted with natural or legal persons domiciled, incorporated or located in countries with low or no taxes39 shall not be considered as consistent with normal arm's‑length market practices or prices, in which case the rules of the aforementioned Article 15 shall apply.

Article 15

Where stable institutions domiciled or located in the country or companies covered by subparagraphs (a) and (b) and trust funds referred to in the subparagraph added after subparagraph (d) of the first paragraph of Article 49, respectively, conduct transactions with natural or legal persons domiciled, incorporated or located in countries with low or no taxes40, as referred to exhaustively in the regulations, such transactions shall not be considered to be in line with normal arm's‑length market practices or prices.

2.20.
Accordingly, in order to determine the net gain subject to gains tax of Argentine taxpayers' transactions between the latter and persons domiciled, incorporated or located in non‑cooperative countries shall be valued following the rules and procedures for transfer prices between related parties.

2.3.5 Measure 4: Payment received rule for the allocation of expenditure

2.21.
Measure 4 also concerns determination of the tax base for gains tax payable by Argentine taxpayers. In this instance, the measure consists of applying the rule of payment received when allocating expenditure for transactions between Argentine taxpayers and persons from non‑cooperative countries. Argentina applies this measure pursuant to the last paragraph of Article 18 of the LIG41, which provides as follows:

In the case of outlays by local companies which result in profits of Argentine source for foreign persons or entities with which these companies are related or for persons or entities located, incorporated, based or domiciled in jurisdictions with low or no taxes42, the allocation to the tax balance may only be made at the time of payment or in any of the cases covered by the sixth paragraph of this Article or, in their absence, if one of the situations indicated arises within the period allowed for submission of the sworn declaration that the respective outlay has been accrued.

2.22.
Accordingly, outlays by Argentine entities which constitute profits of Argentine source for persons located, incorporated, based or domiciled in non‑cooperative countries shall be allocated to the fiscal year in which payment for the transaction actually takes place (payment received rule).

2.3.6 Measure 5: Requirements relating to reinsurance services

2.23.
Measure 5 consists of Argentina's imposition on foreign service suppliers and service suppliers of non‑cooperative countries of requirements that they must meet in order to be able to gain access to Argentina's reinsurance services market.43 This measure is applied pursuant to SSN Resolution No35,615/201144, as indicated by Panama in its request for the establishment of a panel.45
2.24.
SSN Resolution No35,615/201146 has been developed and amended on several occasions: (i) in May 2011, by means of Article 4 of SSN Resolution No35,794/201147, which develops point 19 of Annex I to SSN Resolution No35,615/2011; (ii) in March 2014, by means of SSN Resolution No38,284/201448, which replaces points 18 and 20(f) of Annex I to SSN Resolution No35,615/2011; and (iii) in November 2014, by means of SSN Resolution No38,708/2014, which, according to Argentina, provides for a regulatory reform of the reinsurance sector.49
2.25.
Points 18, 19 and 20(f) of SSN Resolution No35,615/2011 as set out by Panama in its first written submission, hence, prior to the amendment introduced in March 2014 by means of SSN Resolution No38,284/2014, read as follows:

Point 18 of Annex I to SSN Resolution No. 35,615/2011

No authorization may be given to branches of foreign companies based in countries where the rate of gains or similar tax is less than twenty per cent (20%) or where domestic legislation imposes secrecy in regard to the corporate structure of legal persons, or in jurisdictions, territories or States with low or no taxes, so‑called "tax havens", and/or countries or territories that do not cooperate in the global fight against money laundering and terrorist financing offences according to the criteria defined by the Financial Action Task Force (FATF).

Point 19 of Annex I to SSN Resolution No. 35,615/2011

The National Insurance Supervisory Authority, by means of a special reasoned resolution on certain reinsurance transactions duly specified by the requesting insurer, may allow authorized entities to carry out insurance operations in the country, enter into reinsurance contracts with foreign reinsurance entities which conduct their operations from their head office when the magnitude or characteristics of the ceded risks make it impossible to cover such reinsurance transactions on the national reinsurance market. The request shall be submitted prior to entering into the contract and shall be accompanied by all the evidence needed to justify the special criterion.

Point 20(f) of Annex I to SSN Resolution No. 35,615/2011

No authorization for registration as foreign reinsurance entities accepting reinsurance transactions from their country of origin may be given to establishments based in countries where the rate of gains or similar tax is less than twenty per cent (20%) or where domestic legislation imposes secrecy in regard to the corporate structure of legal persons, or in jurisdictions, territories or States with low or no taxes, so‑called "tax havens", and/or countries or territories that do not cooperate in the global fight against money laundering and terrorist financing offences according to the criteria defined by the Financial Action Task Force (FATF).

2.26.
Accordingly, the wording of points 18 and 20(f) of Annex I to SSN Resolution No35,615/2011 prior to the March 2014 amendment imposed a ban on the supply of reinsurance services by (i) branches of companies in countries not cooperating for the purposes of tax transparency and the global fight against money laundering and terrorist financing offences according to the criteria defined by the FATF (point 18); and (ii) reinsurance establishments which deliver their services from their country of origin which is a non‑cooperating country for the purposes of tax transparency and the global fight against money laundering and terrorist financing offences according to the criteria defined by the FATF (point 20(f)).
2.27.
Point 19 of Annex I to SSN Resolution No35,615/2011, however, provides that the SSN may authorize reinsurance contracts with foreign reinsurance establishments which conduct their operations from their head office if the reinsurance operations cannot be covered on the national reinsurance market, because of the scale or the characteristics of the risks ceded.
2.28.
On 19 May 2011, Argentina issued SSN Resolution No35,794/2011, which develops the provisions in point 19 of Annex I to SSN Resolution No35,615/2011. Article 4 of this Resolution, in particular, provides as follows:

Article 4 of SSN Resolution No. 35,794/2011

For the purposes of point 19 of Annex I to SSN Resolution No. 35,615, it is stipulated that individual risks exceeding US$50,000,000 (FIFTY MILLION UNITED STATES DOLLARS) may be reinsured with the reinsurance entities mentioned in point 20 of the aforementioned regulations ("approved reinsurers"), for that portion which exceeds the aforementioned amount.

2.29.
Consequently, Article 4 of SSN Resolution No35,794/2011 develops point 19 of Annex I to SSN Resolution No35,615/2011 by stipulating that reinsurance with foreign reinsurance entities which conduct their operations from their head office may be authorized provided that the individual risks exceed US$50,000,000 (fifty million United States dollars). In such cases, the reinsurance will be "for that portion which exceeds the aforementioned amount".
2.30.
On 25 March 2014, the date on which Panama submitted its first written submission, Argentina published SSN Resolution No38,284/2014, Articles 1 and 2 of which order the replacement of the text of points 18 and 20(f) of Annex I to SSN Resolution No35,615/2011, respectively, by the text set out below:

ARTICLE 1: Replace point 18 of ANNEX I to SSN Resolution No. 35,615/2011 by the following:

"Branches of foreign companies must prove that the parent company:

(a) Has been incorporated and registered in countries, dominions, jurisdictions, territories or associate States considered 'cooperative for tax transparency purposes', in accordance with the provisions of Decree No. 589/2013 and supplementary regulations.

If the parent company of the branch of the foreign company has not been incorporated and registered in accordance with the terms of the preceding paragraph, it must prove that it is subject to the control and supervision of a body which fulfils functions similar to those of the NATIONAL INSURANCE SUPERVISORY AUTHORITY, and with which a memorandum of understanding on cooperation and exchange of information has been signed.

(b) Has been incorporated and registered in countries, dominions, jurisdictions, territories or associate States that cooperate in the global fight against money laundering and terrorist financing offences in accordance with the criteria defined in the public documents issued by the FINANCIAL ACTION TASK FORCE (FATF).

If the parent company of the branch of the foreign company has not been incorporated and registered in accordance with the terms of the preceding paragraph, the assessment of the request for authorization shall be subject to enhanced due diligence, proportionate to the risks, and the counter‑measures indicated in Recommendation 19 of the FINANCIAL ACTION TASK FORCE (FATF) and the Interpretive Note thereto may be applied."

ARTICLE 2 ‑ Replace subparagraph (f) of point 20 of ANNEX I to SSN Resolution No. 35,615 by the following:

"(f) Prove that they have been incorporated and registered in:

I. Countries, dominions, jurisdictions, territories or associate States considered 'cooperative for tax transparency purposes', in accordance with the provisions of Decree No. 589/2013 and supplementary regulations.

If they have not been incorporated and registered in accordance with the terms of the preceding paragraph, they must prove that they are subject to the control and supervision of a body which fulfils functions similar to those of the NATIONAL INSURANCE SUPERVISORY AUTHORITY, and with which a memorandum of understanding on cooperation and exchange of information has been signed.

II. They have been incorporated and registered in countries, dominions, jurisdictions, territories or associate States that cooperate in the global fight against money laundering and terrorist financing offences in accordance with the criteria defined in the public documents issued by the FINANCIAL ACTION TASK FORCE (FATF).

If they have not been incorporated and registered in accordance with the terms of the preceding paragraph, the assessment of the request for authorization shall be subject to enhanced due diligence, proportionate to the risks, and the counter‑measures indicated in Recommendation 19 of the FINANCIAL ACTION TASK FORCE (FATF) and the Interpretive Note thereto may be applied."

2.31.
Point 19 of Annex I to SSN Resolution No35,615/2011 and Article 4 of SSN Resolution No35,794/2011 were not affected by this amendment introduced by SSN Resolution No38,284/2014.
2.32.
Accordingly, following the amendment of March 2014, points 18 and 20(f) of Annex I to SSN Resolution No35,615/2011 provide that foreign suppliers of reinsurance services may be authorized to accept reinsurance operations from their country of origin (point 20(f)) or through a branch in Argentina (point 18) provided that they meet the following requirements: (i) Prove that they have been incorporated and registered in cooperative countries (in the case of branches, this proof applies to the parent company); and (ii) prove that they have been incorporated and registered in countries that cooperate in the global fight against money laundering and terrorist financing offences in accordance with the criteria defined in the public documents issued by the FATF (in the case of branches, such proof relates to the parent company).
2.33.
If incorporation and registration of service suppliers in a cooperative country is not proven, points 18 and 20(f) provide that they must prove that they are subject to the control and supervision of a body (i) which fulfils functions similar to those of the National Insurance Supervisory Authority; and (ii) with which a memorandum of understanding on cooperation and exchange of information has been signed. If it is not proven that they have been incorporated and registered in countries that cooperate in the global fight against the money laundering and terrorist financing offences in accordance with the criteria defined by the FATF, points 18 and 20(f) provide that the assessment of the request for authorization shall be subject to enhanced due diligence, proportionate to the risks, and that the counter‑measures indicated in Recommendation 19 of the FATF and the Interpretive Note thereto may be applied.
2.34.
On 6 November 2014, Argentina issued SSN Resolution No38,708/2014 approving the General Regulations of the Insurance Business.50 According to Argentina, SSN Resolution No38,708/2014 provides for regulatory reform of the reinsurance sector.51 Argentina explains that this Resolution includes in its "Annex in point 2.1.1 … the whole body of legislation that was previously contained in the following Resolutions: No35,615, No35,726, No35,794, No36,266, No36,332, No36,859 and No38,284".52

2.3.7 Measure 6: Requirements for access to the Argentine capital market

2.35.
Measure 6 consists of imposing requirements on stock market intermediaries53 for them to be able to engage in transactions ordered by persons from non‑cooperative countries. Argentina applies this measure pursuant to Title XI ("Prevention of money laundering and financing of terrorism"), Section III, Article 5 of the Rules of the National Securities Commission (CNV)54, which provides as follows:

All the persons indicated in Article 1 above55 may only engage in transactions involving the public offering of negotiable securities, forward contracts, futures or options of any nature or other financial instruments or products, when they are conducted or ordered by persons incorporated, domiciled or residing in dominions, jurisdictions, territories or associate States included in the list of cooperative countries set forth in Article 2, subparagraph (b), of Decree No. 589/2013.

If such persons are not included in the above‑mentioned list and in their home jurisdiction have the status of intermediaries registered with an entity under the control and supervision of a body fulfilling functions similar to those of the Commission, such transactions shall go forward only if it is certified that the aforementioned body in their home jurisdiction has signed a memorandum of understanding on cooperation and exchange of information with the NATIONAL SECURITIES COMMISSION.

2.36.
Consequently, the following requirements must be met for a stock market intermediary in Argentina to engage in transactions involving the public offering of negotiable securities, forward contracts, futures or options of any nature, or other financial instruments or products, when conducted or ordered by persons incorporated, domiciled or residing in non‑cooperative countries: (i) the persons incorporated, domiciled or residing in non‑cooperative countries that give the order to the stock market intermediary must have the status of intermediaries registered with an entity under the control and supervision of a body fulfilling functions similar to those of the Argentine CNV; and (ii) the body in question must have signed a memorandum of understanding on cooperation and exchange of information with the Argentine CNV.

2.3.8 Measure 7: Requirements for the registration of branches

2.37.
Measure 7 consists of imposing additional requirements on branches of companies from non‑cooperative countries for the purpose of registration in the Public Trade Register of the Autonomous City of Buenos Aires. Argentina maintains this measure pursuant to Article 192 of IGJ Resolution No7/200556, which reads in relevant part:

The General Justice Inspectorate shall closely review compliance with the requirements of Article 188, subparagraph 3, subsections (b) and (c)57 by companies which, without being offshore or from offshore jurisdictions, have been set up, registered or incorporated in jurisdictions considered as having low or no taxes58 and/or classified as not collaborating in the fight against "money laundering" and transnational crime.

Accordingly:

1. Certification that the company is effectively engaged in economically significant business activities in the place where it was set up, registered or incorporated and/or in third countries shall be required, for which the company may have to provide:

(a) The relevant documents showing its latest approved accounting statements;

(b) A deed describing the main operations conducted during the financial year to which the accounting statements correspond or during the immediately preceding year if the accounting frequency is less, indicating the dates, parties, purpose and economic volume concerned, to be signed by the competent authority in the country of origin or by an officer of the company possessing duly accredited status and authority;

(c) The deeds of ownership of the non‑current (fixed) assets or the contracts conferring operating rights in such assets, if the document referred to in subparagraph (b) is considered insufficient;

(d) Any other document deemed necessary for the purposes indicated.

2. Information in addition to that indicated in subparagraph 3 of 188 may be required for the purpose of obtaining personal particulars of the partners with a view to verifying their background, including information on their economic and tax status.

If the jurisdictions referred to in this Article are "offshore" jurisdictions, Article 193 shall apply.

2.38.
Accordingly, apart from the requirements applicable to companies in cooperative countries, branches of companies set up, registered or incorporated in non‑cooperative countries shall be required to prove "that the company is effectively engaged in economically significant business activities in the place where it was set up, registered or incorporated and/or in third countries", for which the IGJ may require additional documents. The IGJ may also request additional documents in order to verify the records of the company's partners.

2.3.9 Measure 8: Foreign exchange authorization requirement

2.39.
Measure 8 consists of imposing on service suppliers from non‑cooperative countries the requirement to obtain prior authorization from the Central Bank of the Argentine Republic (BCRA) in order to be able to repatriate their direct investments. Argentina maintains this measure pursuant to Communication "A" 4940, Section I of the BCRA59, which provides the following:

Prior authorization from the Central Bank shall be required for access to the foreign exchange market in order to purchase foreign currency for the repatriation of direct and portfolio investments by non‑residents covered by points 1.13 and 1.14 of Communication "A" 4662, amended by Communication "A" 4692, respectively, if the beneficiary abroad is a natural or legal person residing or incorporated or domiciled in dominions, jurisdictions, territories or associate States included in the list in Decree No. 1,344/98 regulating the Gains Tax Law No. 20,628 and amendments thereto.

2.40.
This means that prior authorization from the BCRA is needed in order to repatriate the investment "when the beneficiary abroad is a natural or legal person residing or incorporated or domiciled in" a non‑cooperative country.

2.4 Factual context

2.4.1 Introduction

2.41.
In this section we outline certain topics which, although they do not form part of the measures at issue, have been addressed by the parties in their submissions and may be of relevance for the purposes of this Panel's findings.

2.4.2 Relevant Argentine legislation applicable to cooperative countries

2.42.
The purpose of this section is to describe the relevant legislation applicable to cooperative countries in respect of the matters regulated by measures 2, 3, 4, 7 and 8 applicable to non‑cooperative countries. For measures 1, 5 and 6, the treatment accorded to cooperative countries is set out in the text of the measures challenged by Panama.60

2.4.2.1 Presumption of unjustified increase in wealth

2.43.
The Argentine regulation applicable to determining the taxable subject matter for Argentine taxpayers is contained in Article 11 of the LPT, which provides that it is the taxpayers themselves, through their sworn declarations, who determine what is subject to taxation.61 If no sworn declarations have been submitted or those submitted are contested, the AFIP shall determine the taxable subject matter ex officio. This ex officio determination may be made directly, as a result of certain knowledge of the taxable subject matter, or by estimation.62 In the latter case, Article 18 of the LPT applies, which contains the presumptions to be used by the AFIP when estimating the taxable subject matter ex officio, and section (f) of which includes the presumption of unjustified increase in wealth.63
2.44.
We recall that measure 2, contained in the unnumbered article added after Article 18 of the LPT, presumes that any entry of funds from non‑cooperative countries constitutes an unjustified increase in wealth – a presumption which may be rebutted if the taxpayer "conclusively proves that the funds originated from activities actually carried out by the taxpayer or by third parties in those countries or from placements of duly declared funds" – as explained in section 2.3.3 above.

2.4.2.2 Valuation of transactions

2.45.
Article 14 of the LIG establishes as a rule that transactions between an Argentine taxpayer and a foreigner shall be considered arm's‑length transactions "if their services and conditions are in line with normal arm's‑length market practices".64 Where that is not the case, such services and conditions shall be governed by the provisions of Article 15 of the LIG, which empowers the AFIP "to determine the net taxable income by using averages, indices or coefficients established for this purpose on the basis of the performance of independent companies engaged in the same or similar activities".
2.46.
As regards profits earned from exporting goods produced, manufactured, processed or purchased in Argentina, the second paragraph of Article 8 of the LIG provides that "the net profit shall be established by deducting from the selling price the cost of the goods, transport and insurance costs to the destination, commission and sales costs and costs incurred in the Argentine Republic as necessary in order to obtain the taxable profit". In such cases, Article 8 provides that the rules and procedures contained in Article 15 of the LIG shall apply when the transactions are with related persons or entities and the prices and conditions are not in line with arm's‑length market practices.65
2.47.
We recall that measure 3 in Article 8, paragraph 5 and Article 15, paragraph 2 of the LIG prescribes the application of methods for valuing transactions with persons from non‑cooperative countries based on transfer prices in order to determine the basis of assessment for gains tax payable by Argentine taxpayers, as described in section 2.3.4 above.

2.4.2.3 Rule for the allocation of expenditure

2.48.
Article 18 of the LIG provides that expenditure, in the same way as profits, shall be allocated to the fiscal year in which it accrues.66 Accordingly, the "accrual" rule is considered to be the general rule for allocating income and expenditure "for third category income67".68
2.49.
We recall that measure 4 in the last paragraph of Article 18 of the LIG provides for application of the rule of payment received when allocating expenditure for transactions between Argentine taxpayers and persons from non‑cooperative countries, as described in section 2.3.5 above.

2.4.2.4 Requirements for the registration of branches

2.50.
Article 118 of Law No19,550 on Commercial Companies (LSC), applicable to companies incorporated abroad, specifies the requirements to be met by a foreign company "[i]n order to engage in the customary exercise of the acts included in its social purpose, set up a branch or any other form of permanent representative office".69 One of these requirements is to register the company incorporated in Argentina. In the Autonomous City of Buenos Aires, companies must be registered in the Public Trade Register of the City of Buenos Aires, which is governed by IGJ Resolution No7/2005.70 Article 188 of this IGJ Resolution, when referring to the registration requirement in Article 118 of the LSC, specifies the documents which companies incorporated abroad must submit in order to be registered:

Certificate proving the existence of the company and that it is not subject to liquidation or any legal proceedings involving restrictions on its assets and/or activities71;

Documents from abroad containing (a) the contract or deed of incorporation of the company and amendments thereto; (b) decision of the governing body deciding to set up the seat, branch or permanent representative office in Argentina; (c) date of closure of its financial books; (d) head office in the Autonomous City of Buenos Aires; (e) capital allocated – if applicable; and (f) designation of the representative, who must be a natural person72;

Documents from abroad drawn up by an officer of the company proving (a) that in the place it was set up, incorporated or registered, there is no ban or restriction on the company engaging in all its activities or the most important among them; (b) that it has one or more agencies, branches or representative offices in operation and/or non‑current (fixed) assets or operating rights in assets belonging to third parties and/or holdings in other companies not subject to public offering and/or habitually conducts investment transactions on stock exchanges or securities markets as provided for in its corporate purpose; and (c) particulars of the persons who are partners at the time of the decision to request registration73;

Original proof of the publication required by Article 118, third paragraph, subparagraph (2) of Law No. 19,550 if it is a joint stock company, a limited liability company or a company of a type not covered by the laws of the Argentine Republic, specifying (a) with regard to the branch, agency or representative office, its head office, assigned capital where applicable and the date of closure of its financial books; (b) with regard to the representative, his/her personal data, established special domicile, period of representation if applicable, restrictions on mandate, if any, and nature of activities if more than one representative is designated; and (c) with regard to the company abroad, the information indicated in Article 10, subparagraphs (a) and (b) of Law No. 19,550 in respect of the articles of incorporation and amendments thereto, if any, in effect at the time of the request for registration74;

Document signed by the designated representative, authenticated by a notary or personally ratified prior to registration, in which the representative (a) provides his/her personal data; (b) indicates the site of the head office; and (c) the establishes a special domicile within the area of the Autonomous City of Buenos Aires.75

2.51.
We recall that measure 7 in Article 192 of IGJ Resolution No7/200576 imposes additional requirements on branches of companies from non‑cooperative countries for their registration in the Public Trade Register, as described in section 2.3.8 above.

2.4.2.5 Foreign exchange authorization requirement

2.52.
Point 1.13 of Communication "A" 466277, as amended by Communication "A" 4692, provides that prior authorization by the BCRA is not needed "in order to purchase foreign currency for transfer abroad if the transactions are conducted by or correspond to payments in the country … of repatriation of direct investment in the non‑financial private sector, in companies that do not control local financial institutions and/or in immovable property", provided that the investment has remained in Argentina for a minimum of 365 consecutive days.78
2.53.
Point 4 of Communication "A" 4662 provides that, before proceeding with transactions exempt from prior authorization by the BCRA, the entities authorized to deal in foreign exchange must meet certain requirements.79 In this connection, Communication "A" 5237 includes as a requirement for access to the local foreign exchange market for the repatriation of direct investment "proof of the entry of funds through the local foreign exchange market for all new investment derived from new contributions or purchases of shares in local companies and real estate effected in foreign currency as of 28 October 2011 by the foreign investor". Point 4 of this BCRA Communication adds that the "transactions for the repatriation of direct investment which are subject to the established requirements but cannot be shown to be compliant therewith at the date of access to the local foreign exchange market must have prior authorization from the Central Bank".80
2.54.
We recall that measure 8, in Communication "A" No4940, Section I, of the BCRA requires service suppliers from non‑cooperative countries to obtain prior authorization from the BCRA in order to be able to repatriate their direct investments, as described in section 2.3.9 above.

2.4.3 Global Forum on Transparency and Exchange of Information for Tax Purposes

2.55.
The Global Forum is an intergovernmental body which emerged – under another name – within the Organisation for Economic Co‑operation and Development (OECD) in 2001 and which in 2009, after being reorganized, adopted its current title. It is open to any jurisdiction, whether or not a member of the OECD, which commits to implementing the Global Forum's tax transparency and information exchange standards and agrees to take part in the peer review process (PRP). These reviews are currently the Global Forum's main activity.81
2.56.
According to the Global Forum's 2014 report on progress, it has 123 members composed of 122 jurisdictions and the European Union.82 Of the 123 members, 97 are also Members of the WTO. The WTO does not have observer status in the Global Forum.83
2.57.
The Global Forum's terms of reference consist of promoting rapid implementation of tax transparency standards among its members. In particular, it undertakes to ensure application of the international "Exchange of information on request" standard, or EOIR for short.84 According to the EOIR standard, there should be exchange – upon request – of foreseeably relevant information for carrying out the provisions of a tax convention or for the administration or enforcement of the domestic tax laws of a requesting party.85 By October 2014, 89 jurisdictions members of the Global Forum had undertaken to implement a new international standard between 2017 and 2018 to complement the EOIR standard86: this is a global standard on automatic (and reciprocal) exchange of financial account information, or AEOI for short.87
2.58.
The PRP is voluntary and evaluates the capacity of each Global Forum member's jurisdiction to comply with the international EOIR standard.88 The process consists of two phases: (i) phase 1 reviews the legal framework of the jurisdiction concerned in the light of the EOIR standard; and (ii) phase 2 looks into the review of application of the EOIR standard in practice in the jurisdiction concerned. Argentina completed both phases of the PRP in June 2012 and is now classified as "largely compliant" with the EOIR international standard.89 Panama comes under the category of jurisdictions unable to move to phase 2, given that it has not amended its regulatory framework in the light of the recommendations arising from phase 1, carried out in 2010.
2.59.
The Global Forum lacks the power to impose sanctions on jurisdictions which do not apply tax transparency standards. Nor, to date has it issued any recommendations to its members either on the potential adoption of special defensive measures to counter non‑application of its tax transparency standard.90 It should be pointed out, however, that both the OECD and the G‑20 have recognized the importance of defensive measures relating to tax transparency as a way of protecting public revenue and creating a level playing field.91

2.4.4 Financial Action Task Force (FATF)

2.60.
The Financial Action Task Force (FATF) is an intergovernmental body established in 1998 by its member jurisdictions. Its mandate is to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, financing of terrorism and the proliferation of weapons of mass destruction, among other threats to the integrity of the financial system.92 Currently, 34 jurisdictions are members, together with the Gulf Cooperation Council and the European Commission. Argentina is an FATF member, but Panama is not.93
2.61.
The FATF Recommendations are recognized as the international standard against money laundering and the financing of terrorism.94 The text of these recommendations in force at the time of drafting this Report is that of 2012. The measures established in the FATF Recommendations must be applied by all its members and by the FATF-Style Regional Bodies (FSRBs), including the Financial Action Task Force of Latin America (GAFILAT), previously known as GAFISUD, of which Argentina and Panama are members.95
2.62.
Implementation of the FATF Recommendations is assessed rigorously through mutual evaluation processes and by the IMF and the World Bank on the basis of the FATF's common assessment methodology.96

3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS

3.1.
Panama requests that the Panel find that:

a. Measure 1 (withholding tax on payments of interest or remuneration) is inconsistent with Argentina's obligations under Article II:1 of the GATS inasmuch as it alters the conditions of competition between like services and service suppliers by according less favourable treatment to services and service suppliers of non‑cooperative countries.97

b. Measure 2 (presumption of unjustified increase in wealth) is inconsistent with Argentina's obligations under:

i. Article II:1 of the GATS, inasmuch as it constitutes a disincentive to contracting services that imply a transfer of funds from non‑cooperative countries, thus modifying the conditions of competition and according less favourable treatment to services and service suppliers of non‑cooperative countries than that granted to like services and service suppliers of cooperative countries;

ii. Article XVII of the GATS, inasmuch as it constitutes a disincentive to contracting services that imply a transfer of funds from non‑cooperative countries, thus altering the conditions of competition between like services and service suppliers of Argentina and those of non‑cooperative countries;

iii. Article I:1 of the GATT 1994, inasmuch as the advantage, favour, privilege or immunity accorded to payments received from cooperative countries for exports to those countries is not accorded to exports of like products to non‑cooperative countries (which entail payments from non‑cooperative countries).98

c. Measure 3 (transaction valuation based on transfer prices) is inconsistent with Argentina's obligations under:

i. Article II:1 of the GATS, inasmuch as it creates disincentives that imply less favourable treatment for services and service suppliers from non‑cooperative countries;

ii. Article XVII of the GATS, inasmuch as, with regard to the full commitments made by Argentina on national treatment, it leads to a disincentive to purchase or contract from suppliers of non‑cooperative countries, placing them in a less favourable position than like domestic suppliers;

iii. Article I:1 of the GATT 1994, inasmuch as imports/exports of products from/to cooperative countries may be valued as transactions in line with normal market practices or prices, unlike imports/exports from/to non‑cooperative countries, which are subject to the transfer pricing valuation regime;

iv. Article III:4 of the GATT 1994, inasmuch as the measure places products imported from non‑cooperative countries in a less favourable position than that of like domestic products; and

v. Alternatively, Article XI:1 of the GATT 1994, inasmuch as the measure establishes limiting conditions on the import/export of products from/to non‑cooperative countries.99

d. Measure 4 (payment received rule for the allocation of expenditure) is inconsistent with Argentina's obligations under:

i. Article II:1 of the GATS, inasmuch as it limits the possibility of deducting payments for services provided by service suppliers of non‑cooperative countries, according them less favourable treatment than that accorded to like service suppliers of cooperative countries; and

ii. Article XVII of the GATS, inasmuch as, with regard to the full commitments made by Argentina on national treatment, the current restriction on deducting payments for services provided by service suppliers of non‑cooperative countries accords them less favourable treatment than that accorded to domestic like services and service suppliers.100

e. Measure 5 (requirements relating to reinsurance and retrocession services)101 is inconsistent with Argentina's obligations under:

i. Article II:1 of the GATS, inasmuch as access to the Argentine reinsurance market for suppliers of non‑cooperative countries is subject to compliance with conditions, and this gives rise to uncertainty that alters the conditions of competition between reinsurance service suppliers of non‑cooperative countries and those of cooperative countries102;

ii. Article XVI:1 and XVI:2(a) of the GATS, inasmuch as Argentina restricts the number of foreign service suppliers and accords them treatment less favourable than that specified in its Schedule of Commitments.103

f. Measure 6 (requirements for access to the Argentine capital market) is inconsistent with Argentina's obligations under Article II:1 of the GATS, inasmuch as it accords to service suppliers of non‑cooperative countries seeking access to the Argentine capital market in order to provide their services treatment less favourable than that accorded to like service suppliers of cooperative countries.104

g. Measure 7 (requirements for the registration of branches) is inconsistent with Argentina's obligations under Article II:1 of the GATS, inasmuch as it establishes additional requirements which alter the conditions of competition and accords less favourable treatment to service suppliers of non‑cooperative countries compared to service suppliers of cooperative countries.105

h. Measure 8 (foreign exchange authorization requirement) is inconsistent with Argentina's obligations under Article II:1 of the GATS, inasmuch as it accords service suppliers of non‑cooperative countries seeking to repatriate their investments in Argentina less favourable treatment than that accorded to like service suppliers of non‑cooperative countries.106

3.2.
Panama further requests, pursuant to Article 19.1 of the DSU, that:

a. The Panel recommend that Argentina bring its measures into conformity with its WTO obligations107, and that

b. The Panel make suggestions regarding implementation of the recommendations made pursuant to the authority given by the second sentence of Article 19.1 of the DSU108 and, more concretely, suggest "the elimination of the less favourable treatment of the goods and services" of non‑cooperative countries as the most appropriate way of bringing the challenged measures into conformity with Argentina's obligations under the GATS and the GATT 1994.109

3.3.
Argentina requests that the Panel reject Panama's claims in this dispute in their entirety.110

4 ARGUMENTS OF THE PARTIES

4.1.
The arguments of the parties are reflected in their executive summaries, provided to the Panel in accordance with paragraph 20 of the Working Procedures adopted by the Panel (see Annexes B‑1 and B‑2).

5 ARGUMENTS OF THE THIRD PARTIES

5.1.
The arguments of the Kingdom of Saudi Arabia, Brazil, the United States and the European Union are reflected in their executive summaries provided to the Panel in accordance with paragraph 21 of the Working Procedures adopted by the Panel (see Annexes C‑1, C‑2, C‑3 and C‑4). Australia, China, Ecuador, Guatemala, Honduras, India, Oman and Singapore did not submit written arguments to the Panel.

6 INTERIM REVIEW

6.1 Introduction

6.1.
On 22 May 2015, the Panel submitted its Interim Report to the parties. On 5 June 2015, Panama informed the Panel that it did not intend to request a review of any precise aspects of the Interim Report. Argentina did submit a written request for the review of precise aspects of the Interim Report. Neither party requested an interim review meeting. On 12 June 2015, Panama submitted comments on Argentina's request for review.
6.2.
In accordance with Article 15.3 of the DSU, this section of the Report contains the Panel's response to Argentina's request, made at the interim review stage, that precise aspects of the Report should be reviewed. The Panel modified aspects of its Report in the light of the parties' comments where it considered it appropriate, as explained below. The Panel also corrected a number of typographical and other non‑substantive errors, including those identified by Argentina. References to sections, paragraph numbers and footnotes in this section relate to the Interim Report. Where appropriate, references to the paragraphs and footnotes to the Panel Report to be circulated to Members are included.

6.2 The question of whether measure 5 covers retrocession services

6.3.
With regard to paragraph 7.37, Argentina requests the inclusion of part of its response to Panel question No64. Argentina argues that the Panel had not added this response to the paragraph despite having addressed the question of retrocession services and the scope of the Note contained in Chapter III of SSN Resolution No35,615. Panama makes no objection in this regard. The Panel notes that paragraph 7.37 does include part of Argentina's response to this question from the Panel, as indicated in footnote 149. Nevertheless, the Panel sees no impediment to expanding the summary of Argentina's response to Panel question No64, as reflected below in paragraph 7.37 of its Report.

6.3 Panama's claims under Article II:1 of the GATS

6.4.
With regard to paragraph 7.45, Argentina considers that there is an error of syntax in the Spanish text of the paragraph's second sentence and suggests alternative wording. Panama has no objections in this regard. The Panel notes that the text in question is in the third sentence of paragraph 7.45. To avoid confusion, the Panel has modified the wording of that sentence in paragraph 7.45 of its Report.
6.5.
Concerning paragraphs 7,142 and 7,280, Argentina requests that additional text be included to reflect the scope of its arguments. Panama considers that the text added by Argentina is repetitive because it is already contained in paragraph 7,141. The Panel agrees with Panama that the inclusion of all of the text suggested by Argentina could be redundant. Accordingly, the Panel will complete the first sentence of paragraph 7,141 of its Report along the lines of the relevant text in Argentina's first written submission. The Panel considers, however, that the text of paragraph 7,280 should not be modified because it refers solely to the no less favourable treatment obligation in Article II:1 of the GATS.
6.6.
With regard to paragraph 7,164, and footnotes 324 and 325 in particular, Argentina requests the inclusion of references to its responses to Panel questions. Panama makes no objection in this regard. The Panel considers Argentina's request to be pertinent and therefore adds the references requested to footnotes 325 and 326 of its Report.
6.7.
Regarding paragraph 7,189, and footnote 361 in particular, Argentina requests the Panel to add another paragraph to the reference in this footnote. Panama makes no objection in this regard. The Panel accepts the request and, therefore, modifies footnote 362 of its Report.
6.8.
With reference to paragraph 7,355, Argentina requests the addition of a sentence and accompanying footnote explaining its position with respect to the application of the GATS to measure 8. Panama makes no objection in this regard. The Panel considers that the second sentence of paragraph 7,355 already adequately reflects Argentina's position in this respect. Nevertheless, the Panel deems it useful to supplement the relevant references in footnote 528 of its Report.
6.9.
With regard to paragraphs 7,280, 7,296, 7,305, 7,313, 7,325, 7,333, 7,343 and 7,355, Argentina considers that its arguments have not been reproduced in full and asks the Panel to add an identical phrase (and the corresponding footnote) on the relevance of the legitimate regulatory distinctions, for the purpose of examining no less favourable treatment, to each and every one of the aforementioned paragraphs. Panama makes no objection in this regard. The Panel notes that the reference cited by Argentina in the footnote it wishes to add refers to an entire section of its first written submission (Section III.D), without specifying any paragraph in particular, and to paragraph 7,142 of the Panel's Report. The Panel considers that this paragraph adequately reflects Argentina's arguments in this respect and that it is therefore not necessary to repeat them, as requested by Argentina.
6.10.
As regards paragraphs 7,292, 7,301, 7,309, 7,319, 7,329, 7,339, 7,351 and 7,360, Argentina asks that the last sentence of these paragraphs in relation to the updating of the list of cooperative countries be modified. Panama considers that such a change is not appropriate because the wording proposed by Argentina refers to the way in which the Panel assessed the facts and not to Argentina's arguments. The Panel shares Panama's view and does not therefore consider it appropriate to make the modifications suggested by Argentina.

6.4 Panama's claims under Article XVII of the GATS

6.11.
With reference to paragraph 7,524, Argentina requests that the text of the Panel's conclusion be modified. Panama considers that the modification requested by Argentina is of dubious value from the syntactical standpoint even though it is not opposed to changes in the wording of this paragraph to make it easier to understand. The Panel understands the confusion which its conclusion might cause because of the use of the terminology of Article XVII ("treatment no less favourable") and agrees with Argentina on the need to make the modification requested. The Panel is therefore modifying paragraph 7,524 of its Report.

6.5 Argentina's defence under Article XIV(c) of the GATS

6.12.
As regards paragraph 7,526, Argentina requests that a sentence be added concerning the Panel's findings under Article XVII of the GATS. Panama objects to such an insertion because Argentina is proposing to add a finding by the Panel to a paragraph which explains Argentina's arguments on its defence under Article XIV(c) of the GATS. The Panel agrees with Panama and hence does not consider the modification requested by Argentina to be pertinent.
6.13.
With regard to paragraphs 7,635, 7,636 and 7,639, Argentina requests modifications to the text in order to clarify the principle of tax equality. Panama is opposed because it considers that in these paragraphs the Panel is examining an exhibit submitted by Panama and Argentina is attempting to introduce an assessment of the facts that differs from that of the Panel. The Panel agrees with Panama and hence does not consider the modifications requested by Argentina to be pertinent.
6.14.
Concerning paragraph 7,753, and footnote 916 in particular, Argentina requests that the reference be completed in order to reflect fully its arguments on the designation of countries that have initiated negotiations on the signature of a tax information exchange agreement as cooperative countries. Panama makes no objection in this regard. The Panel sees no problem in adding the reference requested and therefore amends footnote 918 of its Report.

6.6 Argentina's defence under Article XIV(d) of the GATS

6.15.
With respect to paragraphs 7,780 and 8.5, Argentina requests the Panel to modify the explanation of its conclusion on the irrelevance of the analysis of Argentina's defence under Article XIV(d) of the GATS. Panama makes no objections in this regard. The Panel agrees with Argentina on the relevance of the suggested change to these paragraphs, but prefers to use slightly different language to that proposed. The Panel therefore modifies paragraphs 7,780 and 8.5 of its Report.

6.7 Argentina's defence under paragraph 2(a) of the Annex on Financial Services (the prudential exception)

6.16.
As regards paragraph 7,781 and footnote 949, Argentina requests that the wording of this paragraph be modified to clarify the scope of Argentina's defence in relation to measures 5 and 6 under the prudential exception. Argentina also requests that the existing reference in footnote 949 be supplemented. Panama does not object to this. The Panel therefore considers the suggested changes by Argentina to be pertinent and thus modifies paragraph 7,781 and footnote 951 of its Report.
6.17.
With regard to paragraph 7,787, Argentina requests the addition of its arguments under the prudential exception in relation to the claims under Articles XVI:1 and XVI:2(a) of the GATS. Panama considers that this amendment interrupts the flow of the text. The Panel considers the amendment proposed by Argentina in order to complete its arguments to be pertinent and therefore adds a new paragraph 7,788 to its Report.
6.18.
In connection with paragraph 7,898 and footnote 1129, Argentina requests that "to guarantee the integrity of the market" be included as a prudential reason for measure 5. Panama makes no comments in this regard. The Panel accepts Argentina's suggestion and therefore amends paragraph 7,899 and footnote 1134 of its Report.
6.19.
With regard to paragraph 7,900, Argentina requests that a reference be added in a footnote where the Panel cites the Association of Latin American Insurance Supervisors (ASSAL). Panama makes no objection in this regard. The Panel agrees to Argentina's request and includes a new footnote 1140 in its Report.

6.8 Panama's claims under Article I:1 of the GATT 1994

6.20.
Concerning paragraph 7,960, Argentina requests the Panel to clarify its position with regard to the nature of measure 2. Panama does not make any comments in this regard. The Panel accepts Argentina's suggestion and therefore modifies paragraph 7,961, adding footnote 1215 to its Report.
6.21.
With regard to paragraph 7,967 and footnote 1228, Argentina requests the Panel to complete the references in footnote 1228 of its Interim Report. Panama does not make any comments in this regard. The Panel accepts Argentina's suggestion and therefore amends footnote 1236 of its Report.
6.22.
As regards paragraph 7,985, Argentina requests the Panel to modify its reading of certain case law. Panama objects to the modification suggested by Argentina, which it does not consider to be pertinent. The Panel considers that the modification requested by Argentina alters the Panel's reading of the case law in question and therefore rejects the modification of this paragraph.
6.23.
Argentina requests the Panel to amend certain terms in paragraphs 7,988 and 7,996. Panama objects to the change suggested by Argentina, considering it unnecessary. The Panel considers that the changes proposed by Argentina are appropriate as they make the Panel's reasoning clearer. The Panel therefore amends paragraphs 7,989 and 7,997 of its Report.
6.24.
As regards paragraph 7,989, Argentina requests the inclusion of a footnote so that its arguments on the requirement to keep supporting documents for transactions are reflected in full. Panama submits no comments in this regard. The Panel accepts Argentina's request and therefore inserts footnote 1264 in its Report.

6.9 Argentina's request for editorial and typographical amendments

6.25.
Argentina requests a series of editorial and typographical amendments to paragraphs 7,191, 7,244 and 7,621, 7,568, 7,617, 7,869 (and footnote 1084) and 7.1054. Panama does not object to Argentina's request regarding the aforementioned paragraphs. The Panel accepts Argentina's request in respect of most of the aforementioned paragraphs, except for the references to Article 15 of the LIG for practical reasons, and paragraph 7,191 the wording of which remains unchanged for grammatical reasons.

7 FINDINGS

7.1 Preliminary issues

7.1.
Before starting to examine the various claims submitted by Panama and the defence put forward by Argentina, the Panel wishes to clarify the scope of its terms of reference in these proceedings. We shall begin by examining the claim made by Argentina in its first written submission according to which Panama, in its first written submission, allegedly brought up a new dispute, different from the one that was the subject of its request for consultations.
7.2.
We shall continue with two questions that concern one of the measures at issue, measure 5 (requirements relating to reinsurance services). The Panel considers, in particular, that it should pronounce itself on what aspects of measure 5 fall within its terms of reference and whether or not retrocession services are included in this measure.
7.3.
We shall commence by examining whether, as asserted by Argentina, Panama raised a new issue in its first written submission.

7.1.1 The question of whether Panama raised a new issue in its first written submission

7.4.
In its first written submission, Argentina alleges that "[i]n its first written submission, Panama decided to bring up a new dispute, different from the one that was the subject of the request for consultations".111 According to Argentina, the dispute that was the subject of the request for consultations "referred to 'certain measures imposed by Argentina that affect trade in goods and services. These measures only apply to trade conducted with specific countries listed in Decree No1344/1998 as amended by Decree No1037/00, which include Panama (hereinafter the 'listed countries')".112Even though Argentina does not appear to argue anything more in this respect, we consider that this matter should be clarified.
7.5.
It is our understanding that this allegation by Argentina refers to the fact that the request for consultations (and the panel request) mentions Decree No1344/1988, as amended by Decree No1037/2000, which regulated the distinction between cooperative and non‑cooperative countries113, before being replaced by Decree No598/2013, which is the Decree that currently regulates this distinction. Panama refers to the latter in its written submissions and other pleadings.
7.6.
We shall therefore consider whether this change in the reference to the system regulated by Decree No1037/2000, which came to be regulated by Decree No589/2013 in the period between the request for consultations (and the panel request) and the submissions presented by Panama, means that Panama brought up "a new dispute, different from the one that was the subject of the request for consultations".114
7.7.
We begin by considering what the change in the Argentine regulations involved. In the first instance, Argentina excluded countries from its general regime by means of a positive exclusion system, in other words, those countries specifically mentioned in a list were excluded from the general treatment habitually granted by Argentina and were, therefore, made subject to the eight measures at issue in this dispute. Non‑cooperative countries were listed in Decree No1344/1998.115 This was the situation at the time the Panel was established.116 At that time, Panama was one of the non‑cooperative countries.
7.8.
However, in early 2014, after this Panel had been established117 and composed118, Argentina amended Decree No1344/1998119, introducing a negative exclusion system such that only the countries included in a list – cooperative countries – would receive general treatment. Argentina thus moved from a system of positive exclusion lists (i.e. listing non‑cooperative countries) to one of negative exclusion lists (listing cooperative countries). The list of cooperative countries in effect at the time its first written submission was presented included Panama, so it was not excluded from general treatment as it had been at the time of the request for consultations (and the establishment of this Panel).
7.9.
We therefore agree with Argentina that the regulations governing determination of the categories of cooperative and non‑cooperative countries in effect at the time of the request for consultations (and the panel request) were not the same as those referred to by Panama in its first written submission (and in its subsequent arguments). We shall now consider whether this change signifies, as Argentina claims, that Panama has brought up a new and different dispute. By "new dispute" we understand that Argentina means a new "matter referred to the DSB".
7.10.
The legal provision governing what a "matter referred to the DSB" consists of is Article 7.1 of the DSU.120 This provision specifically refers to the document containing the panel request, governed by Article 6.2 of the DSU.121 The Appellate Body has explained that the "matter" consists of two elements: the measures at issue and the legal basis of the complaint.122
7.11.
We recall that Decree No589/2013 is not a measure at issue. As explained in section 2.2 above, however, Decree No589/2013 is the key element of the eight measures challenged by Panama because they all include the distinction between cooperative and non‑cooperative countries established pursuant to that Decree.
7.12.
In our view, this key role is the same as that performed by its predecessor, Decree No1037/2000, which is mentioned in the request for consultations and the panel request, although in that case the measures referred to the list of non‑cooperative countries contained therein.
7.13.
The foregoing leads us to the following conclusions. On the one hand, as it does not concern measures at issue or obviously, the legal basis of the complaint, it is not possible to conclude that Panama's reference to Decree No589/2013 in its first written submission means that the matter has changed and that there is a new dispute. On the other hand, if we analyse the change that occurred in Argentina's regulations as a result of Decree No589/2013, this consists simply of the transition from a system of positive exclusion to one of negative exclusion. In other words, there is still one group of cooperative countries versus another group of non‑cooperative countries. One additional element to be taken into account is that this change in Argentina's legislation did not involve any change to the substance of the eight measures at issue, but merely adjustments of form to replace references to "jurisdictions with low or no taxes" in Decree No1037/2000 by "jurisdictions not considered 'cooperative for tax transparency purposes'" in Decree No589/2013.123
7.14.
We therefore consider that the change to the rules governing the system for deciding which countries are cooperative or non‑cooperative did not involve any substantive change in the formulation of the eight measures at issue and, consequently, does not mean that in its first written submission Panama brought up "a new dispute, different from the one that was the subject of the request for consultations". Likewise, bearing in mind our terms of reference, we consider that the change in this legislation does not prevent us from examining the eight measures at issue in the light of the system introduced by Decree No589/2013 inasmuch as it distinguishes between cooperative and non‑cooperative countries.
7.15.
In view of the foregoing, we conclude that the replacement of Decree No1344/1998, as amended by Decree No1037/2000, by Decree No589/2013 does not prevent us from examining the eight measures at issue in the light of the system introduced by Decree No589/2013 inasmuch as it distinguishes between cooperative and non‑cooperative countries.

7.1.2 Aspects of measure 5 included in our terms of reference

7.1.2.1 Introduction

7.16.
Measure 5 has been the subject of development and legislative amendments which occurred before and after the establishment of this Panel. In this section, we shall examine these changes and decide to what extent they are relevant for the purposes of our terms of reference.

7.1.2.2 Development and amendment of measure 5

7.17.
In its panel request, Panama states that measure 5 is applied pursuant to SSN Resolution No35,615/2011.124 In its first written submission, Panama also refers to SSN Resolution No35,794/2011, which is not mentioned in its panel request. As explained in the descriptive part of this Report125, Article 4 of SSN Resolution No35,794/2011 develops point 19 of Annex I to SSN Resolution No35,615/2011, allowing cross‑border supply (mode 1) of reinsurance services in the Argentine market for individual risks exceeding US$50 million but only for the portion which exceeds that amount.126 In response to a question from the Panel, both parties agreed that SSN Resolution No35,794/2011 is a relevant legal instrument for evaluating the measure challenged by Panama and thus forms part of this Panel's terms of reference.127
7.18.
On 21 March 2014, after this Panel had been established, Argentina amended SSN Resolution No35,615/2011 by means of SSN Resolution No38,284/2014, replacing points 18 and 20(f) of Annex I to SSN Resolution No35,615/2011.128 The new wording of these points, as amended, is explained in detail in the descriptive part of this Report.129 In its second written submission, Panama explains that its panel request identified SSN Resolution No35,615/2011 and "any possible amendments, extensions or additions", for which reason, in its opinion, the amendment to SSN Resolution No35,615/2011 introduced by SSN Resolution No38,284/2014 forms part of this Panel's terms of reference.130 Consequently, as of its second written submission, Panama adapted its arguments with respect to this measure, taking into account the amendments introduced by SSN Resolution No38,284/2014. Argentina, for its part, does not object to the inclusion of SSN Resolution No38,284/2014 in the Panel's terms of reference and refers to this Resolution in its arguments.131
7.19.
On 6 November 2014, Argentina adopted SSN Resolution No38,708/2014 which, according to Argentina, provides for a regulatory reform of the reinsurance sector.132 In its responses to questions from the Panel in connection with the second substantive meeting, Argentina explained that point 2.1.1 of the Annex to this Resolution includes the rules contained in SSN Resolutions Nos35,615, 35,726, 35,794, 36,266, 36,332, 36,859 and 38,284.133 In its comments on Argentina's responses relating to the second substantive meeting, Panama did not challenge the explanation given by Argentina, nor did it request the Panel to include SSN Resolution No38,708/2014 in its terms of reference. The Panel, therefore, will not consider this latest amendment in its analysis of Panama's claims relating to measure 5.134
7.20.
We therefore identify the two legal instruments which develop or amend SSN Resolution No35,615/2011, which are not mentioned in the panel request and which, according to Panama's arguments, form part of our terms of reference: SSN Resolution No35,794/2011 and SSN Resolution No38,284/2014.
7.21.
Although Argentina is not opposed to the inclusion of these instruments in our terms of reference, given that the identification of the measure is of key relevance to our jurisdiction, we are duty bound to examine whether the measures at issue have been identified with sufficient precision, in the light of Article 6.2 of the DSU135, to enable both Resolutions to be included in our terms of reference, as is requested by Panama.
7.22.
Before considering the appropriateness of including these provisions in our terms of reference, we begin by examining the relevant legal provision.

7.1.2.3 The relevant legal provision

7.23.
Article 6.2 of the DSU provides in relevant part:

The request for the establishment of a panel shall be made in writing. It shall indicate whether consultations were held, identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly.

7.24.
The language of Article 6.2 of the DSU reveals "two key requirements" that a complainant must satisfy in its panel request, namely, the identification of the specific measures at issue, and the provision of a brief summary of the legal basis of the complaint (i.e. the claims) that is sufficient to present the problem clearly.136 This provision, therefore, serves a "pivotal function"137 in WTO dispute settlement by defining "the scope of the dispute between the parties, thereby establishing and delimiting the panel's jurisdiction and serving the due process objective of notifying the respondent and third parties of the nature of the case".138 As stated by the Appellate Body in US – Carbon Steel, compliance with the requirements of Article 6.2 "must be determined on the merits of each case, having considered the panel request as a whole, and in the light of attendant circumstances".139 The Appellate Body added in this connection that the examination of the panel request must be based "on its face as it existed at the time of its filing".140
7.25.
In the present case, our examination focuses on compliance with the first key requirement in respect of the two measures not included in the panel request but which, in principle, develop or amend one of the measures included in the request.
7.34.
In the light of the foregoing, we conclude that measure 5, as developed by Article 4 of SSN Resolution No35,794/2011 and in accordance with the amendment introduced by SSN Resolution No38,284/2014, forms part of this Panel's terms of reference.

7.1.3 The question of whether measure 5 covers retrocession services

7.35.
We shall now consider the scope of the services covered by measure 5. The parties disagree, in particular, on the scope of measure 5 with regard to retrocession services. On the one hand, Panama considers that such services are governed by measure 5 and relies in this regard on a note contained in Chapter III of SSN Resolution No35,615/2011, which provides that "[h]ereinafter, the scope of the terms reinsurance and reinsurer shall extend to the terms retrocession and retrocessionaire at all levels" for the purposes of that Resolution.145 We recall that only points 18, 19 and 20(f) in Chapter IV of Annex I to SSN Resolution No35,615/2011 are part of measure 5. According to Panama, the note applies to the whole of SSN Resolution No35,615/2011.146
7.36.
Argentina, on the other hand, in its first written submission, contends that retrocession services are not included within the scope of measure 5, as "the retrocession regime … is regulated in SSN Resolution No35794, which was not contested by Panama in this case".147 This statement, however, appears to contradict Argentina's response to a question from the Panel in which it explains, in connection with measure 5, that the "measure identified by Panama refers specifically to the delivery of reinsurance and retrocession services"148 and confirms that "Argentina considers that, by virtue of the measure identified by Panama in its panel request …, SSN Resolution No35794 forms part of the Panel's terms of reference".149
7.37.
Despite the foregoing, in response to a question from the Panel, Argentina explained that the note contained in Chapter III of Annex I to SSN Resolution No35,615/2011 only applies to that Chapter, which deals exclusively with intermediaries.150 Argentina explains that Chapter III, including the aforementioned note, was entirely incorporated into SSN Resolution No35,615/2011 by SSN Resolution No36,266/2011. Thus, according to Argentina, the content of this note does not inform the provisions of Chapter IV, which include the relevant points in relation to measure 5.
7.38.
Our work, therefore, consists of deciding whether the note contained in Chapter III of Annex I to SSN Resolution No35,615/2011 informs not only the provisions of Chapter III but also those which compose measure 5 and which are included in Chapter IV. The scope of that note will, therefore, determine whether retrocession services fall within the scope of measure 5.
7.39.
In US – Carbon Steel, the Appellate Body clarified what elements a panel must examine in order to determine the meaning of the municipal law and indicated that those elements vary from one case to another.151 The Appellate Body explained that, whereas in some cases the text of the relevant legislation may suffice to clarify the scope and meaning of the relevant legal instruments, in other cases the complainant will also need to support its understanding of the scope and meaning of such legal instruments with "evidence of the consistent application of such laws, the pronouncements of domestic courts on the meaning of such laws, the opinions of legal experts and the writings of recognized scholars".152 In the present case, Panama has only provided us with the text of the Argentine legislation in question. We shall therefore consider whether the actual wording of the legislation is sufficiently clear to determine whether measure 5 covers retrocession services.
7.40.
We start by considering the note at the beginning of Chapter III of Annex I to SSN Resolution No35,615/2011153, which, as we have already stated, stipulates the following:

CHAPTER III. INTERMEDIARIES

(Chapter replaced by Article 1 Resolution No. 36,266/2011 of the National Insurance Supervisory Authority, O.J. 23/11/2011)

Note: Hereinafter the scope of the terms reinsurance and reinsurer shall extend to the terms retrocession and retrocessionaire at all levels.

7.41.
We observe that the note in question is placed just below the title of Chapter III which, by its own terms, is intended to regulate intermediaries, and below a clarification in brackets concerning the latest regulatory developments affecting Chapter III. We also observe that the Chapter in question is found within the Regulatory Framework for Reinsurance contained in Annex I to SSN Resolution No35,615/2011, which only consists of four chapters. After Chapter III, entitled "Intermediaries", there is only one more chapter, Chapter IV, entitled "General Provisions", in which the provisions composing measure 5 are to be found.
7.42.
The Panel notes that the terms retrocession and retrocessionaire are not defined in SSN Resolution No35,615/2011. Among the exhibits furnished by the parties, we find a definition of the concept of retrocession in the "Introduction to Reinsurance" of the MAPFRE Foundation. This document defines retrocession as "reinsurance ceded by a reinsurer to another insurance or reinsurance company in order to release a part of the risks it has written and, in this way, stabilizing its results and homogenizing its liabilities. It is reinsurance for the reinsurer".154
7.43.
In considering the wording of the note at the beginning of Chapter III, we understand that the pertinent question is the interpretation of the words "en adelante" (hereinafter). The Diccionario panhispánico de dudas of the Spanish Royal Academy defines "en adelante" as "a partir del momento que se toma como referencia" [from the moment taken as reference].155 We see that the note in question does not limit the extension of the scope of the terms reinsurance and reinsurer to the terms retrocession and retrocessionaire at all levels. The note could, for example, explicitly limit this extension to the purposes of Chapter III or some of its provisions. Accordingly, the note in itself appears to indicate that it applies to Annex I as from the moment it appears in the text, which would give cause to think that it could also include Chapter IV. In this connection, Panama's interpretation that this note applies to the whole of SSN Resolution No35,615/2011, which would also include the chapters preceding Chapter III, does not appear to us to be correct. On the contrary, the note in question applies "hereinafter", in other words, from the moment it appears in the text of SSN Resolution No35,615/2011. We therefore have to decide whether the note applies only up to the end of Chapter III or, on the contrary, whether "hereinafter" also means that it applies to the provisions in Chapter IV and, hence, measure 5.
7.44.
In order to resolve this question, we deem it useful to examine the title of Chapter III, which is "Intermediaries". In our view, the location of this note below the title and not in another part of the text indicates that its purpose is to shed light on the subject dealt with in this Chapter, namely, "intermediaries", from the moment (hereinafter) it appears in the text. We thus consider that the note in question applies to Chapter III and Chapter IV inasmuch as it concerns regulation of the activities of "intermediaries". It is our opinion that this focus would make possible an harmonious interpretation of Chapters III and IV. Accordingly, although we agree with Argentina that the extension of the scope of the terms reinsurance and reinsurance to include the terms retrocession and retrocessionaire at all levels pursuant to the note is limited to regulation of the intermediaries156, we do not share its view that this conclusion would restrict the note to Chapter III.
7.45.
Indeed, Chapter IV also includes provisions which mention the term "intermediary". As an example, point 10, entitled "Additional information" refers to the solvency of the "registered intermediary". A reading of Chapter IV in its entirety shows that it does not include rules governing the registration of intermediaries. On the other hand, points 5 and 8 of Chapter III do include rules governing the registration of intermediaries in the Register kept for the purpose by the Argentine National Insurance Supervisory Authority. In our view, in order to be able to understand the meaning of the concept of "registered intermediary" in point 10 of Chapter IV, it is necessary to look at the rules governing the registration of intermediaries in Chapter III. The inclusion of the reference to a "registered intermediary" in Chapter IV leads us to consider that the logical conclusion would be that the intermediaries referred to in relation to reinsurance in the general provisions of Chapter IV are the same as those regulated by Chapter III. We do not think it reasonable to interpret the note in a way which would suggest that Chapter III regulates the registration of intermediaries in respect of reinsurance and retrocession services, pursuant to the note, while Chapter IV applies only to intermediaries registered in accordance with Chapter III in respect of reinsurance services, excluding those registered in accordance with Chapter III in respect of retrocession services.
7.46.
The note in question therefore informs the provisions in Chapter IV, whose purpose is to regulate the activities of intermediaries. Consequently, in order to determine whether the note applies to the provisions of Chapter IV which compose measure 5, we need to ascertain whether the purpose of those provisions is to regulate the activities of intermediaries.
7.47.
First of all, we note that the "intermediaries" referred to in both Chapter III and Chapter IV are not, in fact, direct suppliers of reinsurance or retrocession services. They are "agents" (referred to in point 6(l)(a) of Annex I to SSN Resolution No35,615/2011 and "brokers" (specifically mentioned in the preamble and points 5(d) and 5(f) of Annex I to SSN Resolution No35,615/2011, as well as in Annex II). In this connection, one of the preambular paragraphs specifically provides that "it is necessary to establish an appropriate regulatory framework for reinsurance brokers".157
7.48.
This is not the case, however, for the provisions composing measure 5. Point 18 of Annex I to SSN Resolution No35,615/2011 concerns "branches of foreign companies", while points 19 and 20(f) of the same Resolution refer to "foreign reinsurance entities". In both cases, the provisions composing measure 5 regulate entities which provide reinsurance services directly.
7.49.
Secondly, and as background to this discussion, we note that SSN Resolution No35,794/2011, Article 4 of which forms part of the Panel's terms of reference158, establishes a specific regulatory framework for the direct supply of retrocession services, which differs from the provisions on reinsurance services in points 18, 19 and 20(f) of SSN Resolution No35,615/2011.159
7.50.
In the light of the foregoing, we conclude that measure 5 applies only to reinsurance services and does not, therefore, cover retrocession services.

7.2 Order of analysis

7.51.
Having established the boundaries of measure 5 in relation to our terms of reference, and before continuing with the claims put forward by Panama and the related defence arguments invoked by Argentina, we shall consider the order of our analysis.
7.52.
As we explain in the descriptive part of this Report, in its panel request Panama presented claims under the GATS and the GATT 1994 relating to eight measures applied by Argentina. Panama considers that each of the challenged measures violates one or more specific provisions of the GATS and/or the GATT 1994. The provisions invoked by Panama under the GATS are Articles II:1, XVI:1, XVI:2(a) and XVII. Under the GATT 1994, Panama alleges that certain measures are inconsistent with Articles I:1, III:4 and XI:1.
7.53.
In its defence, Argentina replies, inter alia, that its measures are justified by the exceptions relating to services in Articles XIV(c) and XIV(d) of the GATS and paragraph 2(a) of the GATS Annex on Financial Services, which contains the so‑called "prudential exception"; as well as the exception in Article XX(d) of the GATT 1994 with regard to the claims under this Agreement.160
7.55.
One issue we must resolve in regard to the legal claims is whether there is a specific sequence to be followed when examining Panama's claims and Argentina's response. Inasmuch as Panama made claims under both the GATS and the GATT 1994, the first thing we have to decide is whether we should start our analysis by examining the claims made under the GATS or those made under the GATT 1994. We note that both parties began their arguments with the claims and corresponding defences under the GATS, before turning to the claims and defences under the GATT 1994. Once it is decided which Agreement to examine first, we have to settle the order of precedence of the provisions to be considered under each Agreement.
7.56.
Together with the decision on which provisions of which Agreement are to be examined first, we also face the task of deciding on the approach to be followed in our analysis. Panama urges us to examine its claims and Argentina's corresponding defences separately in relation to each measure at issue, which would lead us to repeat a large part of our analysis. In its view, this approach would give the Panel a better understanding of the facts and would help it to identify the relevance of the legal arguments. Panama also raised considerations of due process, arguing that it has requested findings, rulings, recommendations and, where applicable, suggestions for each of the measures at issue.163 Argentina considers that, in view of the nature of Panama's claims in this dispute, it would be appropriate for the Panel to follow the order of analysis proposed by Panama.164
7.57.
We start by considering the order of analysis that we must follow with regard to the claims under the GATS and the GATT 1994. As we have already indicated, both parties commence their arguments by referring to Panama's claims under the GATS. We see no problem in following the order proposed by the parties, particularly bearing in mind that Panama's claims under the GATS are more numerous and cover all the measures at issue.
7.58.
As is explained in detail in section 7.3.1 below, even though Panama contends that the eight measures at issue are covered by the GATS, Argentina maintains that Panama has not established a prima facie case that the measures at issue are covered by the GATS as it has not proved that there is "trade in services" within the meaning of Article I:2 of the GATS.165 We shall therefore begin by examining as a threshold issue whether the GATS is applicable to each of the eight measures at issue.166 Should this be the case, we would continue our analysis by examining Panama's claims under the GATS, followed by Argentina's defences under the same Agreement. After completing our analysis under the GATS, we would address Panama's claims and Argentina's corresponding defences under the GATT 1994.
7.59.
As regards the order of analysis of Panama's claims under the GATS and the corresponding defences, the parties' arguments have as a rule dealt first with the claims regarding most‑favoured‑nation treatment (Article II:1) and, depending on the measure, national treatment (Article XVII), followed, where appropriate, by claims relating to market access (Articles XVI:1 and XVI:2(a)). Following on from the corresponding claim, the parties' arguments, where relevant, have concerned the exceptions invoked by Argentina under Articles XIV(c) and XIV(d) of the GATS and paragraph 2(a) of the Annex on Financial Services (the so‑called "prudential exception").
7.60.
If we examine the various provisions invoked by Panama under the GATS, we see how Article II of the GATS contains a general obligation, applicable to all the sectors covered by the GATS. On the other hand, the other provisions invoked by Panama under the GATS, Articles XVI and XVII, contain obligations that only concern the sectors and subsectors included in the Members' Schedules of Commitments, under the modes indicated, and subject to the "terms, limitations and conditions" (for Article XVI) and "conditions and qualifications" (for Article XVII) set out in the Schedules of Commitments. The order followed by the parties therefore appears to us to be appropriate.
7.61.
After examining the claims under the GATS, we shall turn to the defences put forward by Argentina. We also think it appropriate to follow the order proposed by the parties and to commence our analysis of these defences under Article XIV(c), followed by Article XIV(d) of the GATS, inasmuch as the latter defence has been invoked in the alternative.167 We shall go on to examine the "prudential exception" in paragraph 2(a) of the Annex on Financial Services hereunder.
7.62.
As regards the order of analysis of Panama's claims under the GATT 1994, the question of the order of precedence would arise only in relation to measure 3 (transaction valuation based on transfer prices), as Panama has made only one claim in relation to measure 2 (presumption of unjustified increase in wealth) under Article I:1 of the GATT 1994. As regards measure 3, Panama has put forward claims of inconsistency with Articles I:1 and III:4 and, in the alternative, under Article XI:1 of the GATT 1994.
7.64.
Once the claims under the GATT 1994 have been examined and if there is a finding of inconsistency with Articles I:1, III:4 or, alternatively, XI:1 of the GATT 1994, we shall examine the defence put forward by Argentina under Article XX(d) of the GATT 1994.
7.65.
After our order of analysis has been decided in relation to the order of precedence of claims and defences, it remains for us to decide whether we shall undertake this analysis measure by measure, i.e., analyse all the relevant claims and defences under the GATS and the GATT 1994 presented in connection with a single measure at issue; or, on the contrary, if we shall examine each of the provisions invoked by Panama in respect of all the measures it has challenged, as the case may be.
7.68.
We therefore begin our analysis with the threshold question of whether the GATS is applicable to the measures at issue.

7.3 Findings under the GATS

7.3.1 The question of whether the GATS is applicable to the measures at issue

7.3.1.1 Main arguments of the parties

7.3.1.1.1 Panama

7.69.
Panama asserts that the GATS is applicable to the eight measures at issue.171 As regards the applicable legal standard under Article I:1 of the GATS, Panama asserts that in order to determine whether a measure "affect[s] trade in services" two key legal questions have to be examined, namely: (i) whether there is "trade in services" within the meaning of Article I:2 of the GATS; and (ii) whether the measure "affect[s]" such trade in services within the meaning of Article I:1 of the GATS.172 As regards the first question, Panama argues that "trade in services" is defined as the "supply of a service" through one of the four modes specified in subparagraphs (a) to (d) of Article I:2 of the GATS. Consequently, for trade in services to exist a service must be supplied under one of the four modes.173 As far as the second question is concerned, Panama contends that the word "affect", in its ordinary meaning, denotes a measure that has "an effect on" a service, which implies a "broad scope of application". According to Panama, nothing in the GATS suggests that its scope is limited.174
7.70.
Panama considers that Argentina's argument to the effect that Panama has failed to demonstrate that there is effective trade between Panama and Argentina has no legal support in the text of the GATS. In Panama's opinion, neither Articles I and XXVIII of the GATS nor the case law make application of the GATS conditional in all cases on the exhaustive enumeration of each and every one of the services possibly affected by a measure. According to Panama, imposing such a requirement would run counter to the object and purpose of the GATS. Panama considers that, as there may exist measures of a cross-cutting nature which affect a whole range of services or even all services on which a Member has made a commitment (for example, a general ban on setting up branches in the national territory), it would not be necessary to require that the applicability of the GATS be subject to separate identification of each and every one of the services that might be affected by such a measure. Panama also points out that, in its first written submission, Argentina submitted a table of the services and modes of supply relevant to this dispute, which, in Panama's opinion, shows that Argentina has fully understood the scope of its claims in connection with trade in services.175
7.71.
According to Panama, accepting Argentina's argument would mean that any illegal measure would be immune from the disciplines of the GATS, because in preventing effective transactions between the complaining party's suppliers and the defending party's consumers, the GATS would never be applicable.176 Panama adds that the context provided by other GATS rules and the history of its negotiation show that it was the negotiators' intention to give the GATS the broadest possible scope and it also recalls that the Appellate Body has already stated that nothing in the GATS suggests that its scope is limited.177
7.72.
Panama argues that Argentina's pretension to require proof of effective transactions is based on an erroneous reference to the Appellate Body Reports in Canada – Autos and EC – Bananas III inasmuch as, in both cases, the Appellate Body did not establish a general rule that the existence of specific transactions binding on the complainant had to be proven as a requirement for applicability of the GATS, but examined specific factual situations relating to the specific markets in question. Panama points out that the Appellate Body's reference in Canada – Autos to whether there is "trade in services" has to be understood as an obligation to explain which services and modes of supply would be relevant in the light of the actual measure being challenged. In Panama's opinion, the fact that there are suppliers in the complaining Member which, at the time of the dispute, are supplying the services in question to consumers in the respondent Member is one element that could assist such identification, but it is not a requirement for application of the GATS.178 In any event, Panama states that, even accepting Argentina's contention for the sake of argument, it has presented proof of the specific impact on Panama's service suppliers, as regards both the services supplied and the modes of supply used.
7.73.
Panama maintains that, while Argentina admits that the coverage of the GATS extends to potential suppliers, it is unable to explain what would be the difference between the effect of the measures on potential suppliers – which it does consider acceptable – and the "theoretical effect" of the measures on the same type of suppliers. Panama claims that Argentina's argument is purely rhetorical as there is no way of showing the effect on potential suppliers which, by definition, are not present on the market in question, other than by means of a theoretical explanation of how the measures in question exert their effects. In any event, Panama contends that it has explained, measure by measure, how each of them has an effect on the services and service suppliers in question, and has put before the Panel for its consideration evidence concerning the actual effect on certain service suppliers. According to Panama, its rights as a WTO Member are being seriously affected and it cannot accept that observance of the most‑favoured‑nation clause by Argentina is made subject to compliance with certain conditions imposed unilaterally.179
7.74.
With regard to the foreign exchange authorization requirement (measure 8), Panama considers that it has an ex ante impact on business planning in Argentina because it affects the decision on whether to establish a commercial presence in Argentina. Panama argues that, although the additional requirement for repatriation of investments does not directly affect the inflow of investment into Argentine territory, by affecting the outflow of such investment the measure has an effect on the business planning of any company and on the decision to supply services through a commercial presence in Argentina.180

7.3.1.1.2 Argentina

7.75.
Argentina contends that Panama has not established a prima facie case that the measures at issue are covered by the GATS as it has not shown that there is "trade in services" within the meaning of Article I:2 of the GATS181 and puts forward its claims purely on the basis of the "theoretical" effect of the measures at issue on alleged services and service suppliers of non‑Panamanian origin.182
7.76.
According to Argentina, Panama has not provided sufficient evidence to show that there is trade in any of these services under the modes of supply identified. Referring to the Appellate Body Report in Canada – Autos, Argentina considers that Panama has the obligation to prove that the relevant services are supplied to the territory of the Argentine Republic from the territory of Panama, in the case of mode 1, or by a service supplier of Panamanian origin through a commercial presence in Argentina, in the case of mode 3. It is Argentina's opinion that, even if the threshold for application of the GATS could be established on the basis of services and service suppliers of an origin other than that of the complainant, Panama has failed to show that there is trade in any of the relevant services in the modes of supply identified. Argentina considers that Panama's case is based solely on the theoretical impact of the measures at issue on trade in services; an impact which Panama has not even shown to exist.183
7.77.
Argentina argues that, since Panama has failed to show that the relevant services are actually supplied through cross‑border trade (mode 1) or commercial presence (mode 3), Panama has not demonstrated that there is trade in services that might be "affected" by the measures challenged in this dispute. Argentina recognizes that the Appellate Body has taken a broad view of what constitutes a measure "affecting trade in services" and that at least one panel has held that GATS coverage extends to potential service suppliers. Argentina explains, however, that it is not aware of any dispute in the GATS context in which any Member has attacked a national regulatory system on the basis of its theoretical effect on potential service suppliers. In Argentina's opinion, allowing a Member to invoke the GATS solely on the basis of the theoretical effect of the measures in question could have serious repercussions.184
7.78.
With regard to measure 8, Argentina argues that the foreign exchange authorization requirement is not covered by the GATS. According to Argentina, the measures affecting the repatriation of investment are not directly related to trade in services and, therefore, do not affect trade in services within the meaning of Articles I:1 and XXVIII of the GATS. In Argentina's view, this measure does not affect the establishment of a company in the country or the delivery of services by that company, but implies closer scrutiny of access to the local foreign exchange market for the transfer of equity funds invested in the country if it is decided to repatriate them.185

7.3.1.2 Assessment by the Panel

7.3.1.2.1 Introduction

7.79.
Panama has submitted a number of claims under the GATS with regard to the eight measures at issue, contending that that Agreement applies to all of them.186 Argentina, however, argues that Panama has not established a prima facie case that the measures at issue are covered by the GATS as it has not demonstrated that there is "trade in services" within the meaning of Article I:2 of the GATS.187
7.80.
As we also explained in section 7.2 above, in order to determine whether the GATS is the agreement which covers the eight measures at issue specifically and in more detail, we must first examine whether the GATS is applicable to each of them. To do so, in the manner established by the Appellate Body, as a preliminary matter we shall examine the question of the applicability of the GATS to the measures at issue before evaluating their consistency with the substantive obligations invoked by Panama.188
7.81.
We start by examining the relevant legal provision.

7.3.1.2.2 The relevant legal provision

7.82.
Article I of the GATS, entitled Scope and Definition, provides as follows:

1. This Agreement applies to measures by Members affecting trade in services.

2. For the purposes of this Agreement, trade in services is defined as the supply of a service:

(a) from the territory of one Member into the territory of any other Member;

(b) in the territory of one Member to the service consumer of any other Member;

(c) by a service supplier of one Member, through commercial presence in the territory of any other Member;

(d) by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member.

3. For the purposes of this Agreement:

(a) "measures by Members" means measures taken by:

(i) central, regional or local governments and authorities; and

(ii) non‑governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;

In fulfilling its obligations and commitments under the Agreement, each Member shall take such reasonable measures as may be available to it to ensure their observance by regional and local governments and authorities and non‑governmental bodies within its territory;

(b) "services" includes any service in any sector except services supplied in the exercise of governmental authority;

(c) "a service supplied in the exercise of governmental authority" means any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers.

7.3.1.2.3 The legal standard under Article I of the GATS

7.83.
We recall that, in Canada – Autos, the Appellate Body identified two key legal issues which a complainant must establish in order to prove that a measure is covered by the GATS:

"[T]wo key legal issues must be examined to determine whether a measure is one "affecting trade in services": first, whether there is "trade in services" in the sense of Article I:2; and, second, whether the measure in issue "affects" such trade in services within the meaning of Article I:1.189

7.84.
Guided by this finding by the Appellate Body, we shall successively examine whether Panama has proved that (i) there is "trade in services" in the sense of Article I:2 of the GATS, and (ii) whether the measure at issue "affect[s]" such trade in services within the meaning of Article I:1 of the GATS.

7.3.1.2.3.1 First question: Whether there is "trade in services" in the sense of Article 1:2 of the GATS

7.85.
We note that the main reason for the dispute between the parties concerns this first key legal issue of the legal standard established by the Appellate Body in Canada – Autos. Argentina claims that the complainant must demonstrate that there is effective trade in services, either between the complainant and the respondent or between other Members and the respondent.190 At the first substantive meeting, Argentina raised the possibility of showing the existence of potential trade in services but, in that case, Argentina considers that the complainant has to identify specific services and service suppliers duly attributable to a Member, in one or more of the four modes of supply and in respect of which it has been shown that they are potentially affected by the measures at issue.191
7.86.
Panama responds that Argentina's interpretation of this first element is erroneous as the requirement of the existence of effective trade has no legal basis in the text of the GATS.192 Panama asserts that the Appellate Body's reference to whether "there is 'trade in services'" should be understood as a need to identify the relevant services and modes of supply in the light of the specific measure challenged. In Panama's opinion, the fact of whether or not there are service suppliers of the complaining Member which, at the time of the dispute, are supplying the services concerned to consumers in the defending Member does not prevent the relevant "trade in services" from being identified. Panama argues that Argentina's interpretation could lead to the absurd result that, even if a measure has the specific objective of regulating trade in service "X" and does in fact regulate such trade, it would have to be demonstrated in addition that "there is 'trade in services'" in order for the GATS to be applicable.193
7.87.
We recall that the relevant text of the GATS stipulates that the Agreement "applies to measures by Members affecting trade in services" (Article I:1 of the GATS) and defines "trade in services" as "the supply of a service" through four modes of supply (Article I:2 of the GATS). Pursuant to Article XXVIII(c) of the GATS, the expression "measures by Members affecting trade in services" covers measures in respect of: (i) the purchase, payment or use of a service; (ii) the access to and use of, in connection with the supply of a service, services which are required by those Members to be offered to the public generally; and (iii) the presence, including commercial presence, of persons of a Member for the supply of a service in the territory of another Member.
7.88.
In our view, it cannot be inferred from the wording of Article I:1 that the GATS is only applicable between two Members when there are actual flows of services between them or when "suppliers of specific services attributable" to a Member seek to supply services in the market of the defending Member. The ordinary meaning of Article I:1 of the GATS rather indicates that the GATS applies to measures which affect "trade in services", defined in the following subparagraph as the supply of services through four modes. The wording of Article I:1, therefore, does not refer to measures that specifically affect actual services and service suppliers of the complaining Member or of any other Member.194
7.89.
By way of context, we note that, according to Article XVII, paragraph 1, of the GATS, the Article applies to "all measures affecting the supply of services", irrespective of whether service suppliers of the complaining party are engaged in trade or seeking to engage in trade with the Member applying the measure.195 Likewise, paragraph 3 of the Article requires consideration of whether a measure "modifies the conditions of competition in favour of services or service suppliers of the Member compared to like services or service suppliers of any other Member". In our view, the context afforded by Article XVII indicates that the analysis must hinge on the conditions of competition and not on the actual effects on specific service suppliers. We agree with one of the third parties that the WTO obligations protect equality of competitive opportunities rather than actual trade volumes.196
7.90.
The existing case law with regard to trade in goods appears to support this approach. With reference to the GATT 1994, the Appellate Body confirmed in an early decided case that:

"[I]t is irrelevant that 'the trade effects' of the tax differential between imported and domestic products, as reflected in the volumes of imports, are insignificant or even non‑existent; Article III [of the GATT 1994] protects expectations not of any particular trade volume but rather of the equal competitive relationship between imported and domestic products."197

7.91.
We note also that Article XXIII:1 of the GATS, which is the dispute settlement provision applicable to disputes arising in relation to the GATS, stipulates as follows:

"If any Member should consider that any other Member fails to carry out its obligations or specific commitments under this Agreement, it may with a view to reaching a mutually satisfactory resolution of the matter have recourse to the DSU." (emphasis added)

7.92.
Accordingly, the context afforded by Article XXIII:1 of the GATS indicates that Members have broad discretion when reporting to the DSB to claim alleged violations of the GATS. A complainant may resort to the DSB if it "considers" that another Member "fails to carry out its obligations or specific commitments" under the GATS. Article XXIII of the GATS does not contain any other condition and does not, therefore, require that non‑compliance with the said obligations or commitments have trade effects for the complainant.
7.93.
We note that in EC – Bananas III, in language similar to that used in Article XXIII of the GATT 1994198, the Appellate Body emphasized that "a Member has broad discretion in deciding whether to bring a case against another Member under the DSU" and agreed with the Panel that "with the increased interdependence of the global economy,... Members have a greater stake in enforcing WTO rules than in the past since any deviation from the negotiated balance of rights and obligations is more likely than ever to affect them, directly or indirectly."199 In our view, this reasoning also applies in the context of the GATS.
7.94.
Accordingly, we agree with the position expressed by one of the third parties200 that acceptance of Argentina's argument that Panama must identify "actual" services and service suppliers operating in the Argentine market and being affected by the challenged measures would mean adding a requirement to Article I:1 of the GATS rather than treating it as an additional element of evidence. Furthermore, Argentina's argument would lead to an absurd situation in which the GATS would apply to measures provided that there is actual trade in services but would not apply to the most trade-restrictive measures, that is, bans on supplying services, which, by their very nature, prevent actual flows of services. We believe that such an outcome would serve to weaken the GATS and would clearly be contrary to the object and purpose of the Agreement, whose preamble states, inter alia, that Members wish "to establish a multilateral framework of principles and rules for trade in services with a view to the expansion of such trade under conditions of transparency and progressive liberalization …".
7.95.
Nor do we share Argentina's interpretation of the Appellate Body Report in Canada – Autos.201 Like Panama, we understand that, in Canada – Autos, the Appellate Body did not establish a general rule that the existence of specific transactions between the complainant and the respondent has to be proved but ruled on the factual situation in the market in question.202 We also note that none of the four subsequent Panels which adjudicated disputes under the GATS required the complaining party to prove the existence of specific transactions between the complainant and the respondent (or between the latter and other Members).203 Such precedents confirm, in our view, that none of these Panels interpreted the Appellate Body Report in Canada – Autos as requiring the complainant to prove the existence of "actual" transactions as a prerequisite for determining application of the GATS.
7.96.
In fact, in justifying the measures at issue in this dispute, Argentina itself appears to admit that there is – or there may be – trade in services between Argentina and other WTO Members – including Panama. For example, Argentina explains at the beginning of its first written submission that "[t]he defensive anti‑abuse measures such as those at issue in this dispute" are "essential tools for … equalizing the conditions of competition on the international market for financial and other services".204 Accordingly, if Argentina considers it necessary to apply defensive anti‑abuse measures to "equaliz[e] the conditions of competition on the international market for financial and other services", it is because, in the first place, such trade in services with Argentina exists – or may exist.
7.97.
The Panel notes that, for each of the eight measures at issue, Panama has identified the relevant services and modes of supply.205 The information in this regard is shown in the following table:

[SEE TABLE IN SOURCE DOCUMENT]

2

Presumption of unjustified increase in wealth

Claim under Article II:1 of the GATS

MODESECTOR
Mode 1208 All sectors of services where supply or delivery requires the entry of funds into Argentina209

Claim under Article XVII of the GATS

MODESECTOR
Mode 1210 Maritime and air transport insurance services and reinsurance and retrocession services211

3

Transaction valuation based on transfer prices

Claim under Article II:1 of the GATS
MODESECTOR
Modes 1 and 2212 All services213
Claim under Article XVII of the GATS
MODESECTOR
Modes 1 and 2214 All services on which Argentina undertook full national treatment commitments under modes 1 and 2215

4

Payment received rule for the allocation of expenditure

Claim under Article II:1 of the GATS
MODESECTOR
Mode 1216 All services whose payment generates revenue of Argentine source for the service supplier217
Claim under Article XVII of the GATS
MODESECTOR
Mode 1218 Services whose payment generates revenue of Argentine source for the service supplier and for which Argentina adopted a full commitment under mode 1219

5

Requirements relating to reinsurance services

Claim under Article II:1 of the GATS
MODESECTOR
Modes 1 and 3220 Reinsurance services221

Claim under Articles XVI:1 and XVI:2(a) of the GATS
MODESECTOR
Mode 1222 Reinsurance services223

6

Requirements for access to the Argentine capital market

Claim under Article II:1 of the GATS
MODESECTOR
Mode 1224 Portfolio management services225

7

Requirements for the registration of branches

Claim under Article II:1 of the GATS
MODESECTOR
Mode 3226 All sectors227

8

Foreign exchange authorization requirement

Claim under Article II:1 of the GATS
MODESECTOR
Mode 3228 All sectors (except for financial services)229

7.98.
In the light of the foregoing, the Panel considers that Panama has demonstrated that the eight measures at issue apply to services supplied pursuant to Article I:2 of the GATS and that Panama has therefore demonstrated that there is trade in services within the meaning of Article I:2 of the GATS.

7.3.1.2.3.2 Second question: Whether the measures in question "affect" trade in services within the meaning of Article I:1 of the GATS

7.99.
We continue our analysis with the second key legal issue under the legal standard established by the Appellate Body in Canada – Autos, namely, whether the challenged measures "affect" trade in services within the meaning of Article I:1 of the GATS.
7.100.
We recall that Panama argues that, as stated by the Appellate Body in EC – Bananas III, Article I:1 of the GATS ensures the broadest possible coverage of the Agreement precisely because of its reference to measures that "affect" trade in services. The GATS thus not only covers measures which directly "govern" or "regulate" trade in services, but also any other type of measure which, even if it has been designed for other purposes (such as trade in goods) nevertheless "affects" trade in services.230
7.101.
Argentina responds that, inasmuch as Panama has failed to prove that the relevant services are supplied from the territory of Panama – or of any other Member – to the territory of Argentina through modes 1 and 3, Panama has not shown that there is trade in relevant services and modes which may be "affected" by the measures challenged in this dispute.231 Argentina puts forward separate and additional arguments for measure 8 and claims that the repatriation of investments is not directly related to trade in services and, therefore, does not affect trade in services within the meaning of Articles I:2 and XXVIII of the GATS. Argentina concludes that measure 8 is not covered by the GATS.232
7.102.
The Panel recalls that in EC – Bananas III, the Appellate Body considered that no measures are excluded a priori from the scope of the GATS. According to the Appellate Body,

The scope of the GATS encompasses any measure of a Member to the extent it affects the supply of a service regardless of whether such measure directly governs the supply of a service or whether it regulates other matters but nevertheless affects trade in services.233

7.104.
According to Argentina, Panama failed to prove this second issue inasmuch as it did not demonstrate that there is trade in services and did not identify "specific" Panamanian service suppliers.235 As we concluded above, for the purposes of establishing application of the GATS to the measures at issue, Article I:1 of the GATS does not require the complainant to prove the existence of specific services or service suppliers, or the existence of actual transactions. We also note that, except as concerns measure 8, to which we shall refer later, Argentina does not appear to deny that the measures at issue "affect" trade in services. Indeed, on various occasions Argentina explains that the rationale for the measures at issue is to equalize the conditions of competition between, on the one hand, services and service suppliers of Argentina and/or other cooperative countries and, on the other, services and service suppliers of non‑cooperative countries.
7.105.
For example, by arguing that the defensive anti‑abuse measures are necessary to "equaliz[e] the conditions of competition on the international market for financial and other services"236, Argentina acknowledges not only that there is – or there may be – trade in services in these sectors, but also that, by equalizing the conditions of competition on the international market for services, these measures govern – or at least affect – trade in these services. At the Panel's first meeting with the parties, Argentina stated that "at the time the Agreement on Services was negotiated … during the Uruguay Round, the right of Members to adopt [defensive tax measures against non‑cooperative jurisdictions] was totally and clearly understood by them".237 At the same meeting, Argentina explained that "[t]he criteria on the basis of which Argentina distinguishes between cooperative and non‑cooperative jurisdictions are the objective reflection of intractable and fundamental regulatory differences between the services and service suppliers of cooperative jurisdictions and those of non‑cooperative jurisdictions".238 Likewise, in its second written submission, Argentina explicitly recognizes that measures 5 and 6 – those on access to the Argentine reinsurance services market and to the Argentine capital market – affect the supply of financial services, that is, trade in financial services within the meaning of Article I:2 of the GATS. In Argentina's words:

First of all, the measures in question undoubtedly affect "the supply of financial services" within the meaning of paragraph 1(a) of the Annex on Financial Services. In fact, both "reinsurance and retrocession" services and the trade in "transferable securities" are specifically listed in the definitions of financial services in paragraph 5(a) of the Annex on Financial Services.239

7.106.
In our view, such arguments show that, for Argentina itself, the purpose of the measures at issue is to govern or – at least – to "affect" service suppliers of other Members that supply services in Argentina and, consequently, such measures adopted by Argentina "affect" the supply of services within the meaning of Article I:1 of the GATS.
7.107.
The Panel notes that Argentina presents separate and additional arguments with regard to measure 8. As explained in the descriptive section240, measure 8 consists of imposing on service suppliers from non‑cooperative countries the requirement to obtain prior authorization from the BCRA in order to be able to repatriate their direct investments. Argentina applies this measure pursuant to BCRA Communication "A" 4940, Section I.241
7.108.
Argentina contends that the prior authorization from the BCRA to repatriate investments, as imposed by measure 8, is not covered by the GATS as it is not directly related to trade in services and, therefore, does not affect trade in services within the meaning of Articles I:1 and XXVIII of the GATS. In Argentina's view, the measure does not affect the establishment of a company in the country or the delivery of services by such a company, but implies closer scrutiny of access to the local foreign exchange market for the transfer of equity funds invested in the country if it is decided to repatriate them.242
7.109.
Panama responds that the foreign exchange authorization requirement has an ex ante impact on business planning in Argentina because it affects the decision on establishing a commercial presence in Argentina. Panama argues that, although the additional requirement for the repatriation of investments does not directly affect the inflow of investment into Argentine territory, by affecting the outflow of such investment the measure has an effect on the business planning of any company and on the decision to supply services through a commercial presence in Argentina. Panama argues that in Argentina – Import Measures, the panel found that Argentina's requirements on operators to refrain from repatriating profits when their level of exports is not sufficient to compensate for their imports "have a limiting effect on imports". In Panama's view, if the restrictions on repatriation affect the import of goods, they all the more affect foreign service suppliers which establish a commercial presence in Argentina.243
7.110.
The Panel notes that, judging by its terms, Communication "A" 4940 requires that prior authorization from the BCRA be obtained "when the beneficiary abroad is a natural or legal person". Pursuant to Article XXVIII(d) of the GATS, "'commercial presence' means any type of business or professional establishment, including through (i) the constitution, acquisition or maintenance of a juridical person … within the territory of a Member for the purpose of supplying a service". The wording of Communication "A" 4940 shows that the foreign exchange authorization requirement applies, inter alia, to service suppliers which, having established a commercial presence244 in Argentina, possibly decide to withdraw from the Argentine market and, hence, to repatriate their investment.
7.111.
The Panel also recalls that, pursuant to Article XXVIII(c) of the GATS, "measures by Members affecting trade in services include measures in respect of …. (iii) the presence, including commercial presence, of persons of a Member for the supply of a service in the territory of another Member". In Spanish, the term "referente a" ("in respect of") is defined as "[q]ue refiere o que expresa relación a algo" [referring or expressing a relationship to something].245 We thus consider that the concept of "measures … affecting trade in services" covers measures related to the "constitution" or "acquisition" of a legal person within the territory of a Member for the purpose of supplying a service. In our view, this is the case for the foreign exchange authorization requirement.
7.112.
The fact that this requirement does not apply at the time of establishing a commercial presence in Argentina but rather at the time of withdrawing the investment from the Argentine market does not prevent this requirement from being related to the supply of services through commercial presence, in accordance with the definition of this mode in Article I:2 of the GATS. Indeed, such a measure may have an impact on a service supplier's decision to invest in the market or, in the terms of the GATS, to establish a commercial presence. In our view, a measure which, for example, totally prohibits repatriation of invested capital at the time of withdrawal from the market would most likely influence the supplier's decision as to whether or not to establish a commercial presence in that market. It is our view that a determination which implies leaving outside the scope of the GATS those measures which apply at the time when a legal person withdraws from a market could open up a breach in the Agreement, as it would mean that measures which influence the decision to set up in the territory of a Member would not be covered by the Agreement. For the foregoing reasons, we consider that measure 8 affects trade in services in the sense of Article I:1 and is thus covered by the GATS.
7.113.
In the light of the foregoing, the Panel concludes that the eight measures at issue "affect" trade in services within the meaning of Article I:1 of the GATS.

7.3.1.2.4 Conclusion

7.114.
Having determined that Panama has demonstrated that there is trade in services and that the eight measures at issue in this dispute "affect trade in services" within the meaning of Article I:1 of the GATS, the Panel finds that the GATS is applicable to measure 1 (withholding tax on payments of interest or remuneration), measure 2 (presumption of unjustified increase in wealth), measure 3 (transaction valuation based on price transfers), measure 4 (payment received rule for the allocation of expenditure), measure 5 (requirements relating to reinsurance services), measure 6 (requirements for access to the Argentine capital market), measure 7 (requirements for the registration of branches) and measure 8 (foreign exchange authorization requirement).
7.115.
We therefore proceed to examine Panama's claims under the GATS, starting with those made under Article II of that Agreement.

7.3.2 Panama's claims under Article II:1 of the GATS

7.3.2.1 Main arguments of the parties

7.3.2.1.1 Panama

7.116.
Panama claims that the eight measures at issue are inconsistent with Article II:1 of the GATS because they accord less favourable treatment to services and service suppliers of non‑cooperative countries than that accorded to like services and service suppliers of cooperative countries.246
7.117.
As regards the arguments as to whether the measures at issue fall within the scope of Article II:1 of the GATS, we refer to section 7.3.1 above.
7.118.
With regard to whether the services and service suppliers concerned by the measures at issue are like, Panama claims that the regulatory distinction established by the Argentine measures at issue is based solely and exclusively on the origin of the service supplier.247 Panama argues that in situations such as the present one, where the regulatory distinction is based exclusively on the origin, as established in the text of the measure itself248, the likeness is presumed and there is no need to make casuistic demonstrations that the services and/or service suppliers are like or to examine the competitive relationship between services and service suppliers.249 Panama bases itself on the statement in this regard made by the panel in China – Publications and Audiovisual Products. According to that panel, when origin is the only factor on which a measure bases a difference of treatment between suppliers, the service suppliers are like, provided there will, or can, be domestic and foreign suppliers that under the measure are the same in all material respects except for origin.250
7.119.
Panama adds that the existence of reasons (whether or not legitimate) justifying the distinction between service suppliers according to their origin is not relevant to the determination of their likeness.251 Panama considers that, if they exist, such reasons must be examined under the exemptions to the GATS.252
7.120.
Even though in Panama's view the distinction between service suppliers in this dispute is based exclusively on their origin, Panama considers that, if the Panel wishes to examine the likeness of service suppliers in more detail, it could resort, not without first making certain adjustments, to the four traditional likeness criteria used in trade in goods: the nature of the services, their purpose, consumer preferences, and any possible governmental classification.253 In any event, Panama fails to understand how the existence or non‑existence of an agreement on the exchange of tax information could have an impact on any of these four criteria254 and considers that to accept this fact would imply making the likeness analysis subject to the unilateral will of each Member.255
7.121.
Contrary to the view expressed by Argentina, Panama asserts that the regulatory background is a factor external to the service supplier and could only be relevant insofar as it is perceived by the market and, hence, affects the competitive relationship between suppliers.256 Argentina's interpretation, on the other hand, would entail a likeness assessment based on the "aims and effects" of the regulations, an approach that has repeatedly been rejected by the Appellate Body.257 In Panama's opinion, the regulatory objectives of the measure should not be taken into account in like likeness analysis.258
7.122.
As to whether the measures at issue accord less favourable treatment to like services and service suppliers, Panama contends that the challenged measures accord less favourable treatment to services and service suppliers of non‑cooperative countries compared to that accorded to like services and service suppliers of cooperative countries because they modify the conditions of competition to the detriment of services and service suppliers of non‑cooperative countries vis‑à‑vis like suppliers of cooperative countries.259
7.123.
Panama considers that, in order to examine whether there is less favourable treatment under Article II of the GATS, it is not necessary to assess whether the detrimental effect of a measure stems exclusively from a legitimate regulatory distinction.260
7.124.
Panama also considers that, contrary to what is stated by Argentina, the existence of less favourable treatment should not be examined before and after having examined the "likeness" element.261 According to Panama, the legal standard enshrined in the case law indicates that the likeness element should be examined before examining the less favourable treatment element.262
7.125.
More specifically, as regards the existence of no less favourable treatment for each of the measures at issue, Panama asserts in relation to measure 1 that payments for services rendered by service suppliers from non‑cooperative countries are subject to a heavier tax burden than that imposed on payments for services contracted with suppliers of cooperative countries.263 Panama considers that this heavier tax burden on payments for services rendered by suppliers of non‑cooperative countries "nullifies equality of competitive conditions in the Argentine market" between services and service suppliers of cooperative countries and like services and service suppliers of non‑cooperative countries, thus resulting in less favourable treatment of the latter.264
7.126.
With regard to measure 2, Panama claims that the services rendered from non‑cooperative countries entail a heavier burden on the consumer of the service as the AFIP presumes an unjustified increase in wealth. This presumption would have to be rebutted by the consumer by presenting the relevant documents proving the existence of a legitimate transaction.265 Panama claims that, in the first place, this measure discourages the consumption of services provided by suppliers of non‑cooperative countries because it represents an administrative burden and generates a tax risk. In Panama's opinion, even if the consumer of the service successfully rebuts the presumption, its mere existence in itself implies less favourable treatment for non‑cooperative service suppliers inasmuch as it raises the possibility that a negative determination may be made. Secondly, Panama points out that the consumer has to take additional steps (the presentation of the documents to rebut the presumption), which are not required if services are contracted from like service suppliers of cooperative countries. For all these reasons, Panama considers that the measure accords less favourable treatment to services and service suppliers of non‑cooperative countries.266
7.127.
As far as measure 3 is concerned, Panama asserts that application of this valuation regime involves additional charges for those Argentine taxpayers who decide to contract with service suppliers of non‑cooperative countries. According to Panama, this more burdensome regime would not apply if the Argentine taxpayer contracted services from a supplier situated in a cooperative country.267 In Panama's opinion, this additional requirement clearly modifies the conditions of competition to the detriment of services and service suppliers of non‑cooperative countries as contracting them becomes more burdensome in comparison with services and service suppliers of cooperative countries. Panama thus considers that Argentina accords to services and service suppliers of non‑cooperative countries treatment less favourable than that accorded to like services and service suppliers of cooperative countries.268
7.128.
With regard to measure 4, Panama contends that "for Argentine taxpayers, purchasing services from persons in [non‑cooperative countries] involves a clear tax, accounting and economic disadvantage in terms of the allocation of expenditure", inasmuch as expenditure incurred with suppliers of non‑cooperative countries may only be allocated to the time of payment of the service and not to the period in which the obligation accrues, as is the case for service suppliers of cooperative countries. Panama considers that the disincentive generated by the "distortion of accounting‑tax management" as a result of applying this measure modifies the conditions of competition between foreign like services and service suppliers and accords less favourable treatment to service suppliers of non‑cooperative countries in comparison with that accorded to like service suppliers of cooperative countries.269
7.129.
Concerning measure 5 following the March 2014 amendment, Panama contends that Argentina allows suppliers of cooperative countries to provide reinsurance services through cross‑border trade (mode 1) or commercial presence (mode 3), while it establishes conditions for the supply of such services by service suppliers of non‑cooperative countries. These conditions are that the entity (or its parent company) supplying the service must be subject to the control and supervision of an institution which fulfils functions similar to those of the SSN and with which a memorandum of understanding has been signed.270 Panama considers that the less favourable treatment takes the form of the uncertainty surrounding compliance with the conditions laid down, which entails an impairment of the conditions of competition.271
7.130.
With regard to measure 6, Panama claims that there is less favourable treatment for suppliers of portfolio management services as the restrictions applicable to stock market intermediaries place them at a disadvantage vis‑à‑vis like service suppliers of cooperative countries. This is so because registered intermediaries (which provide stockbroking services) may only conduct transactions on the Argentine capital market if these are ordered by persons from cooperative countries.272 In Panama's opinion, the measure "limits the investment options of portfolio managers of the [non‑cooperative] countries" by restricting their access to essential auxiliary services such as stockbroking. Panama contends that the measure gives portfolio management service suppliers of cooperative countries an advantage that is not extended immediately and unconditionally to like suppliers of non‑cooperative countries.273
7.131.
As regards measure 7, Panama alleges that the mere fact that there is an additional requirement for branches of companies from non‑cooperative countries "is a significant sign" of the existence of less favourable treatment.274 Panama maintains that less favourable treatment is given to service suppliers of non‑cooperative countries as the required certification that the company is effectively engaged in economically significant business activities in the place where it was incorporated (i) limits the development of certain kinds of business which involve the parallel creation of several commercial establishments, and (ii) entails an additional administrative burden.275
7.132.
Concerning measure 8, Panama considers that the mere fact that the regulations impose an additional requirement (prior authorization from the BCRA) indicates that there is less favourable treatment.276 Panama contends that this regulation, by restricting the repatriation of direct investments, discourages the establishment of service suppliers of non‑cooperative countries.277 Panama adds that the restriction is compounded by uncertainty as to whether the BCRA will ultimately authorize access to the Single Free Foreign Exchange Market (MULC). In Panama's opinion, this discretionary power to grant authorization for access to the MULC also has negative repercussions for service suppliers of non‑cooperative countries vis-à-vis like service suppliers of cooperative countries.278 Panama states that the fact of bearing an additional administrative burden (the request for authorization from the BCRA) and the uncertainty surrounding the authorization process places suppliers of non‑cooperative countries at a competitive disadvantage compared to like service suppliers of cooperative countries.279
7.133.
With regard to the question of whether no less favourable treatment is immediately and unconditionally accorded to like services and service suppliers, Panama asserts that measure 1 establishes a condition for according to service suppliers of non-cooperative countries the more favourable treatment accorded to cooperative countries. This condition is that the home jurisdiction of the supplier must have signed an agreement on information exchange with Argentina and that, by application of its domestic regulations, it may not invoke banking, stock market or any other form of secrecy in response to a request for information.280 As regards measures 5 and 6, Panama contends that conditions are imposed on service suppliers of non‑cooperative countries in order to be eligible for access to a benefit. In the case of measure 5, the benefit consists of access to the Argentine reinsurance market, while for measure 6 it consists of access to the Argentine securities market. In Panama's opinion, the granting of benefits may not be made subject to any condition, so the very existence of a condition conduces to the conclusion that the measure is inconsistent with Article II:1 of the GATS.281

7.3.2.1.2 Argentina

7.134.
Argentina maintains that the eight measures at issue are not inconsistent with Article II:1 of the GATS inasmuch as Panama has not established a prima facie case that the GATS applies to these measures or that the treatment accorded to services and service suppliers of non‑cooperative countries is less favourable than that accorded to like services and service suppliers of cooperative countries.282 Argentina also contends that, even if Panama had established a prima facie case of less favourable treatment, it has not established a prima facie case that the services and service suppliers are like.283
7.135.
Regarding the arguments as to whether the measures at issue fall within the scope of Article II:1 of the GATS, we refer back to section 7.3.1 above.
7.136.
With regard to whether the services and service suppliers concerned by the measures at issue are like, Argentina asserts that the regulatory differences between the service suppliers being compared are relevant to the likeness determination inasmuch as they affect the way in which suppliers operate on the market.284 Argentina considers that the Appellate Body's jurisprudence on trade in goods to the effect that regulatory differences are relevant to likeness to the extent that "they have an impact on the competitive relationship between and among the products concerned"285 is applicable to the GATS.286 Argentina also asserts that these regulatory differences are relevant to the likeness analysis "even though these differences are not fully reflected in the market" and "even when these regulatory differences do not affect the essential features of the service".287 In any event, Argentina states that, in this case, the regulatory differences between suppliers of the services in question affect the way in which the supplier supplies the service and thus affect the competitive relationship.288
7.137.
Argentina claims that the cooperative or non‑cooperative nature of a jurisdiction is "an essential feature of the service which consumers of services are seeking when they choose to do business in a non‑cooperative jurisdiction".289 Argentina thus considers that exchange of tax information is a feature of the services and service suppliers that is reflected in the conditions of competition.290 Argentina argues that, if Panama wished to rebut its argument, it would have to prove that the regulatory distinction applied by the measure at issue does not affect the commercial or regulatory characteristics of the services or service suppliers.291
7.138.
Argentina contends that the origin of a service or service supplier is a relevant factor in determining likeness as it may affect the characteristics of the service supplier.292 In this connection, Argentina clarifies that it does not rule out the possibility of there being situations where the principle of origin is applicable, even though this is not the case in this dispute as the measures at issue are objectively related to the services and service suppliers in question.293 In any event, Argentina considers that the de jure/de facto distinction developed by the case law in relation to trade in goods cannot be directly applied to the GATS since Articles I and III of the GATT 1994 only refer to "like products" whereas the GATS refers to "like services and service suppliers".294
7.139.
Likewise, Argentina asserts that the use of the conjunction "and" in the expression "like services and service suppliers" in Articles II and XVII of the GATS indicates that likeness should be assessed taking into account the relevant characteristics of both the services and the service suppliers.295 In Argentina's opinion, this is because the characteristics of a service are often inseparable from the characteristics of the supplier.296
7.140.
As regards whether the measures at issue accord no less favourable treatment to like services and service suppliers, Argentina contends that the differential treatment existing in this dispute is the result of its adherence to effective tax information exchange rules in effect at international level. Argentina maintains that, in principle, these standards may be adopted by any Member.297
7.141.
Argentina considers that Panama has not established a prima facie case that services and service suppliers of Panamanian origin receive less favourable treatment compared to like services and service suppliers of any other country or of Argentine origin. This is because Argentina has designated Panama as a cooperative jurisdiction.298 In this connection, Argentina contends that the services and service suppliers which should be compared in order to determine the existence of no less favourable treatment within the meaning of Article II of the GATS are, on the one hand, those of the complaining Member and, on the other, like services and service suppliers of any other Member which allegedly receive more favourable treatment.299
7.142.
Argentina asserts that the expression "treatment no less favourable" in Article II (and Article XVII) of the GATS should be interpreted in the same way as in Article 2.1 of the Agreement on Technical Barriers to Trade (TBT Agreement), that is, in the sense that there is no less favourable treatment if the negative impact of the measure on the conditions of competition in the Argentine market for services and service suppliers of non‑cooperative countries "stems exclusively from a legitimate regulatory distinction".300
7.143.
Moreover, Argentina asserts that the regulatory distinction between cooperative and non‑cooperative jurisdiction is a legitimate one and that the challenged measures are based on internationally recognized objective criteria which can be met by any Member.301
7.144.
Argentina submits no arguments concerning the granting of no less favourable treatment immediately and unconditionally under Article II of the GATS.

7.3.2.2 Assessment by the Panel

7.3.2.2.1 Introduction

7.145.
The question before the Panel is whether the eight measures at issue are inconsistent with Article II:1 of the GATS. In response to Panama's claims, Argentina asserts that its measures are not inconsistent with Article II:1 of the GATS as Panama has not established a prima facie case that the GATS is applicable to those measures, that the services and service suppliers are like or that there is less favourable treatment.302
7.146.
We shall start by examining the wording of Article II:1 of the GATS in order to establish the applicable legal standard, taking into account the paucity of case law in this respect. Bearing this in mind, we shall then determine whether the eight measures at issue violate this provision.303

7.3.2.2.2 The relevant legal provision

7.147.
Article II:1 of the GATS provides as follows:

With respect to any measure covered by this Agreement, each Member shall accord immediately and unconditionally to services and service suppliers of any other Member treatment no less favourable than that it accords to like services and service suppliers of any other country.

7.148.
Article II:1 enshrines the general principle of most‑favoured‑nation (MFN) treatment, imposing a general and unconditional obligation to grant MFN treatment, which applies irrespective of whether there are specific commitments in the sector(s) in question. This MFN treatment obligation applies to all service sectors, unless a Member has registered MFN exemptions in the Annex on Article II Exemptions, as provided in Article II:2 of the GATS.304 We note that Argentina has not registered any relevant MFN exemption in the instant case.

7.3.2.2.3 The legal standard under Article II:1 of the GATS

7.149.
The wording of Article II:1 of the GATS suggests that, in order to make a prima facie case, Panama must demonstrate that: (i) first, the measures at issue are covered by Article II:1 of the GATS; (ii) second, the relevant services and service suppliers are "like"; and (iii) third, the measures at issue accord "immediately and unconditionally" "treatment no less favourable" to like services and service suppliers.
7.150.
We turn to a separate analysis of whether Panama has complied with these requirements.

7.3.2.2.3.1 First requirement: whether the measures at issue are covered by Article II:1 of the GATS

7.151.
Regarding compliance with this first element, we refer to section 7.3.1 above, in which we conclude that, having determined that Panama has demonstrated that there is "trade in services" and that the eight measures at issue in this dispute "affect" trade in services within the meaning of Article I:1 of the GATS, the Panel finds that the GATS is applicable to these measures. Panama has, therefore, complied with the first requirement of proving that the eight measures at issue are covered by the GATS.
7.152.
We therefore continue by examining the second requirement, namely, whether Panama has proved that services and service suppliers of cooperative and non‑cooperative countries are like.

7.3.2.2.3.2 Second requirement: whether the services and service suppliers are like

7.153.
We recall that Panama claims that the regulatory distinction established by the Argentine measures at issue is based solely and exclusively on the origin of the service supplier305 and that, consequently, there is no need to make casuistic demonstrations that the services and/or service suppliers are like or to examine the competitive relationship between services and service suppliers.306
7.154.
Argentina, for its part, argues that the regulatory differences between the service suppliers being compared are relevant to the likeness determination inasmuch as they affect the way in which suppliers operate on the market.307 Argentina also disagrees with Panama regarding the transposition to the GATS of the de jure/de facto distinction developed in the case law in relation to trade in goods. In this connection, Argentina maintains that this distinction cannot be directly applied to the GATS as the GATS refers to "like services and service suppliers", whereas Articles I and III of the GATT 1994 refer only to "like products".308
7.155.
We shall commence our analysis of the likeness requirement under Article II:1 of the GATS by referring to the dearth of existing jurisprudence on trade in services, which would serve as a guide in our interpretative exercise. The first of the few disputes in which the question of "likeness" was addressed in connection with the GATS was EC – Bananas III. In that case, the panel, in a finding that was not subsequently examined on appeal, considered relevant "the nature and the characteristics" of the services in question when determining likeness. The panel also concluded that, to the extent that entities provide such like services, they are like service suppliers.309
7.156.
As regards the likeness of service suppliers, in Canada – Autos the panel followed the approach taken in EC – Bananas III and considered that "to the extent that the service suppliers concerned supply the same services, they should be considered 'like' for the purpose of this case".310 The same approach was subsequently followed by the panel in China – Publications and Audiovisual Products, in its likeness examination under Article XVII of the GATS. In that dispute, in which the parties did not contest the likeness of the service suppliers, the panel concluded that when the "only factor" on which a measure bases a difference of treatment between domestic and foreign suppliers is "origin", the likeness requirement is met. Specifically, the panel found as follows:

When origin is the only factor on which a measure bases a difference of treatment between domestic service suppliers and foreign suppliers, the "like service suppliers" requirement is met, provided there will, or can, be domestic and foreign suppliers that under the measure are the same in all material respects except for origin.311

7.157.
Panama referred to this element of case law on several occasions, arguing that, in the case before us, the difference in treatment is based exclusively on the origin of the service suppliers and, therefore, likeness must be presumed.312
7.158.
In China – Publications and Audiovisual Products, however, the panel also pointed out that:

[I]n cases where a difference of treatment is not exclusively linked to the origin of service suppliers, but to other factors, a more detailed analysis would probably be required to determine whether service suppliers on either side of the dividing line are, or are not, "like".313

7.159.
The panel focused precisely on these "other factors" in China – Electronic Payment Services. In that dispute, the panel undertook a more detailed analysis of likeness, considering that the difference in treatment was not exclusively linked to the origin of the service suppliers but to "other factors".314 After examining the ordinary meaning of the term "like" and the context of the expression "like services" in Article XVII of the GATS, the panel concluded that "like services are services that are in a competitive relationship with each other (or would be if they were allowed to be supplied in a particular market)".315
7.160.
We agree with the panel in China – Electronic Payment Services that interpretation of the expression "like services and service suppliers" should be based on the ordinary meaning of its terms, taking into account the context of Article II itself, as well as other provisions of the GATS. Consequently, we see no obstacle to using the same likeness interpretation as that used by the panel in China – Electronic Payment Services,even though it was developed in relation to Article XVII of the GATS.
7.161.
In our view, the likeness analysis under Article II of the GATS does not differ from the likeness analysis under Article XVII of the GATS in the sense that it requires an approach based on the competitive relationship. Although the Appellate Body has exercised caution with regard to the direct transposition to Article II of all interpretations developed under Article XVII of the GATS316, we consider the context afforded by this provision to be useful inasmuch as the Appellate Body has transposed interpretations developed under Article XVII to Article II of the GATS.317 Indeed, not only is the term to be interpreted the same but the context afforded by the term "treatment no less favourable" also informs the likeness determination in both cases. This has also been the view of previous panels and the Appellate Body in connection with Article III:4 of the GATT 1994 and Article 2.1 of the TBT Agreement.
7.162.
While we are aware of the risks involved in directly transposing the case law of other covered agreements to the GATS318, we are of the view that, in the context of a likeness determination, there are sufficient elements in common in these three Agreements to make it possible to adopt an interpretation of likeness based on the competitive relationship between the relevant services and service suppliers. In our view, this approach does not prevent us taking into account the specific characteristics of trade in services, including in particular the intangible nature of services and the existence of four modes of supply.319
7.163.
Taking as a starting point the competitive relationship between the services and service suppliers, we continue our likeness analysis taking into account the particular circumstances of our case320 and considering all the arguments and evidence that pertain to the competitive relationship between the services and service suppliers being compared.321 Like the parties, we understand that the likeness analysis under Article II:1 of the GATS concerns, on the one hand, services and service suppliers of non‑cooperative countries and, on the other, services and service suppliers of cooperative countries. We recall that this distinction is reflected in each and every one of the measures at issue by virtue of the provisions of Decree No589/2013.322
7.164.
As we have already seen, Panama considers that origin is the only reason for the differences in treatment and therefore requests us to apply the presumption of likeness based on origin applicable under the GATT 1994.323 Argentina considers that this presumption cannot be transposed directly to the GATS context because Articles II and XVII of the GATS, unlike their counterparts in the case of goods, refer to "like services and service suppliers".324 Argentina considers that the issue is not just one of the origin of the service or service supplier, but also has to do with the characteristics which are intrinsically linked to the origin of the said service or supplier.325 These characteristics are defined, inter alia, by aspects of the regulatory framework in their countries of origin that affect the supply of the services. More specifically, Argentina refers in this dispute to the aspects of the regulatory framework relating to tax transparency.326
7.165.
We agree with Argentina that the presumption of likeness based on origin applicable in the context of the GATT 1994 is not directly transposable to the context of the GATS because the reference to "like services and service suppliers" in the GATS has no equivalent in the GATT 1994, which only refers to "like products". As the Panel explained in China – Electronic Payment Services, therefore, we have to determine whether the difference in treatment may also be due to "other factors".327 To that end, we shall first examine whether the difference in treatment between cooperative and non‑cooperative countries is due to origin. If we conclude that this difference is not due exclusively to origin, we shall continue our analysis by examining whether there is also another factor or "other factors" linked to the difference in treatment between services and service suppliers of non‑cooperative countries and services and service suppliers of cooperative countries.
7.166.
As regards the origin rule, as we have already mentioned, the eight measures challenged by Panama distinguish between services and service suppliers of cooperative and non‑cooperative countries. In our view, the mere fact that differential treatment is accorded depending on whether or not a country is included in a list is closely linked to origin. This implies that any service supplier based in Panama – or in any other country considered by the Argentine authorities to be a cooperative country – is subject to the same treatment because it is based in that country. We therefore consider that the difference in treatment between cooperative and non‑cooperative countries inherent in the eight measures at issue is due to origin. However, even though the origin rule is applied in the form of a list of cooperative countries, it is not origin per se which determines that certain countries are on the list and others not, but the regulatory framework inextricably linked to such origin. This raises a doubt as to whether the difference in treatment between cooperative and non‑cooperative countries inherent in the eight measures at issue is based exclusively on origin, as asserted by Panama, or whether there is also some "other factor" explaining the difference in treatment, as we shall consider below.
7.167.
We recall that Panama contends that, when discrimination according to origin is already established in the law itself, there is no need to examine any other factor in order to determine the likeness of services and service suppliers.328 Argentina responds that the origin of a service or service supplier is a relevant factor for determining likeness inasmuch as it may affect the characteristics of the service supplier.329 Argentina does not rule out the possibility of there being situations where the principle of origin is applicable, but contends that this is not the case in this dispute as the measures at issue are objectively related to the services and service suppliers in question.330 In any event, Argentina considers that the de jure/de facto distinction developed by the case law in relation to trade in goods cannot be directly applied to the GATS since ArticlesI and III of the GATT 1994 only refer to "like" products, whereas the GATS refers to "like services and service suppliers".331
7.168.
Given that there are doubts regarding the existence of "other factors", we shall follow previous case law on trade in services and turn to consider whether, in addition to origin, there are other factors relevant to the examination of the likeness of services and service suppliers in this dispute.
7.169.
The main difficulty we encounter in determining whether the difference in treatment is solely and exclusively based on origin lies in the fact that, in order to make such a determination, difference in treatment based on "other factors" has to be set aside and, in the context of the GATS, it is not specified what "other factors" are to be examined.332
7.170.
The only panel which has to date examined this question is the one in China – Electronic Payment Services.333 In its analysis of "other factors", the panel exercised caution when transposing the traditional likeness criteria of the GATT 1994 to the GATS because of the "important dissimilarities" between the two Agreements. In particular, the panel highlighted differences regarding the intangible nature of services, their supply through four different modes, and the ways in which trade in services is conducted and regulated.334 In order to try to identify the "other factors" to be considered when determining the likeness of the relevant services, the panel turned to the context of the expression "like services" provided by Article XVII of the GATS. The panel indicated, more generally, that a likeness determination should be made on a case‑by‑case basis335 and be based on "arguments and evidence that pertain to the competitive relationship of the services being compared".336
7.171.
As regards the likeness of service suppliers, the panel in China – Electronic Payment Services established that there is a presumption that service suppliers are like "if, and to the extent that, they provide like services", even though, depending on the circumstances, a "separate inquiry into the 'likeness' of the suppliers may be called for".337 In essence, the panel focused on the similar description of activities by the suppliers and the fact that they were perceived as competitors in the same market338 and concluded that the relevant service suppliers in that dispute were like "at least to the extent that they provide 'like' services".339
7.172.
The panel in China – Electronic Payment Services stated, in line with what had been established by previous panels and the Appellate Body, that any determination of likeness must be made on a case‑by‑case basis.340 We therefore turn to examine whether, in this dispute, there are "other factors" to be considered and, if that is the case, whether they have any impact on the competitive relationship of the services and service suppliers concerned.
7.173.
In this dispute, the parties have devoted part of their meetings with the Panel and their submissions to discussing a question that we might treat as one of those "other factor(s)" referred to by the panel in China – Electronic Payment Services. Argentina, in particular, contends that the distinction established by Decree No589/2013 reflects a regulatory difference that has to be taken into account by the Panel as an "other factor".341 This "other factor" would be the possibility of access by Argentina to tax information on foreign suppliers. We note that this is not the case for Panama, which has cooperative country status despite having denied that it initiated negotiations with Argentina on the signing of a tax information exchange agreement and, thus, on the effective exchange of information with Argentina.342
7.174.
Argentina maintains that this factor corresponds to an "objective basis" on which to establish the distinction.343 Argentina also emphasizes that the need to examine (or not examine) "other factors" in the determination of likeness "has to be established in each case, depending on: (a) the nature of the services in question, and (b) the particular circumstances of the case".344
7.175.
Panama considers that the expression "other factors" should refer to factors that are "neutral as to origin" and that the "other factor" identified by Argentina does not fall within this category. As an example of a factor that is neutral as to origin, it refers to the case of China – Electronic Payment Services, in which the differences in treatment related to whether one company in particular (China UnionPay (CUP)) was or was not the domestic or foreign supplier.345
7.176.
In the case before us, the "other factor" identified by one of the parties (access to tax information on foreign service suppliers) is of a regulatory nature. We therefore deem it useful to recall what was stated by the panel in EC – Asbestos and, more recently, in US – Clove Cigarettes. In our view, this Appellate Body case law is of particular relevance to this case as in both those disputes the Appellate Body addressed the regulatory concerns of Members in the determination of likeness to the extent that these affect the competitive relationship.346 In this connection, we note that regulatory concerns play a key role in the scope of the GATS as this Agreement refers not only to services but also to service suppliers. To this must be added the fact that the GATS regulates four modes of supply, two of which (modes 1 and 2) refer to service suppliers outside the territory of the Member "importing" the service and are thus subject to the regulations of that other Member.
7.177.
In EC – Asbestos, in the context of Article III:4 of the GATT 1994, the Appellate Body recognized that the examination of certain regulatory concerns (such as the risk posed to human health by the product in question) could be relevant "in assessing the competitive relationshipin the marketplace between allegedly 'like' products"347, and, ultimately, in determining likeness. In that dispute, the risks posed by asbestos to human health were examined in relation to two of the likeness criteria traditionally used under the GATT 1994: the physical properties of the product and consumers' tastes and habits.348
7.178.
In US – Clove Cigarettes, the Appellate Body did not consider that the concept of "like products" in Article 2:1 of the TBT Agreement "lends itself to distinctions between products that are based on the regulatory objectives of a measure".349 According to the Appellate Body, consideration of the objectives of a measure would distort the comparison under the "no less favourable treatment" analysis. The Appellate Body nevertheless indicated that this approach does not mean that the regulatory concerns underlying the measures at issue play no role in the determination of likeness. Following the lines set out in EC – Asbestos, the Appellate Body found that "regulatory concerns and considerations may play a role in applying certain of the 'likeness' criteria (that is, physical characteristics and consumer preferences) and, thus, in the determination of likeness".350 The Appellate Body clarified that regulatory concerns play a role in determining likeness "[t]o the extent that they are relevant to the examination of certain 'likeness' criteria and are reflected in the products' competitive relationship".351
7.179.
Applying the Appellate Body's reasoning to our case, it appears to us that the possibility for Argentina to have access to tax information on foreign suppliers may be considered to be an "other factor" to be taken into account in our likeness analysis, provided that it is reflected in the competitive relationship between services and service suppliers of cooperative and non‑cooperative countries. This being said, it lies with Argentina to prove that this "other factor" affects the competitive relationship between services and service suppliers, for example, by showing its effect on the characteristics of the service and consumers' preferences.
7.180.
According to Argentina, in the instant case, the fact that the service suppliers may or may not be situated in jurisdictions subject to the effective exchange of information is a characteristic that is directly reflected in the conditions of competition on the market.352 Argentina contends that the different regulatory context in which services and service suppliers of cooperative and non‑cooperative countries find themselves as regards the exchange of tax information affects the way in which the supplier supplies the service, and thus affects the competitive relationship.353 Argentina sees lack of transparency and effective exchange of information as the main competitive advantage for services and service suppliers originating from non‑cooperative countries354, and this is also acknowledged by Panama.355
7.181.
As we explained in the descriptive part, the distinction made by Argentina is a function of its access (or lack of access) to tax information on service suppliers. According to Argentina's claims, the possibility of access to tax information falls into the following two categories: cooperative countries (there is access to tax information) and non‑cooperative countries (there is no access to tax information).
7.182.
Decree No589/2013 lays down the conditions for a country to be considered cooperative, namely: (i) to have signed with Argentina an agreement on exchange of tax information or a convention on avoidance of international double taxation with a broad information exchange clause, provided that there is effective exchange of information; or (ii) to have initiated with Argentina the negotiations necessary for concluding such an agreement and/or convention.356 If one of these requirements is not met, the country is considered to be non‑cooperative.357
7.183.
In looking at how Decree No589/2013 has been implemented in practice, we note that the current list of cooperative countries includes countries that have not signed a double taxation convention or an information exchange agreement and with which there is no exchange of tax information, as well as countries which have in fact concluded such conventions or agreements and which, therefore, exchange tax information. Let us take, for example, the cases of Panama and Germany. These two countries belong to the category of cooperative countries. Argentina has signed a double taxation agreement with Germany, which has been in force since 25 November 1979358, giving it access to tax information.359 In the case of Panama, however, Argentina has no access to tax information as it has not signed any agreement on exchange of tax information with Panama. We also note that various countries which have initiated negotiations have a different status. For example, both Panama and Hong Kong (China) have initiated negotiations but neither of the two exchanges tax information with Argentina as there is no agreement or convention in force to cover such exchange.360 While Panama has the status of cooperative country, however, Hong Kong (China) is still considered a non‑cooperative country.361
7.184.
This factual situation makes it extremely difficult for us to make the comparison we need to make for an examination of likeness, especially when considering "other factor(s)" that are relevant. Nor has Argentina indicated to us how such a comparison is to be made taking into account this factual situation. We consider that the current circumstances make it impossible for us to compare relevant services and service suppliers in order to evaluate relevant "other factor(s)" in addition to their origin.
7.185.
Accordingly, having concluded that the difference in treatment between cooperative and non‑cooperative countries inherent in the eight measures at issue is due to origin, we consider that Panama has proved that services and service suppliers of cooperative and non‑cooperative countries are like by reason of origin.
7.186.
In the light of the foregoing, we find that, for the purposes of the claims made by Panama under Article II:1 of the GATS, the services and service suppliers of cooperative countries are like the services and service suppliers of non‑cooperative countries.

7.3.2.2.3.3 Third requirement: Whether the measures at issue do not immediately and unconditionally accord treatment no less favourable to like services and service suppliers

7.187.
We continue our analysis with the third requirement of the legal standard under Article II:1 of the GATS, namely, whether Panama has proved that the measures at issue do not "immediately and unconditionally" accord "treatment no less favourable" to like services and service suppliers. We shall start by examining whether the measures at issue accord no less favourable treatment to the like services and service suppliers we have just identified. Next, if there is no less favourable treatment, we shall consider whether such treatment is accorded immediately and unconditionally.
7.188.
Before beginning our analysis, however, we think it necessary to clarify a matter raised by Argentina with regard to the terms of comparison to be used in determining the existence of no less favourable treatment: whether the treatment accorded to the complaining Member is that which should be the subject of comparison in a no less favourable treatment determination or whether it should be the treatment accorded to any other Member even when it is not the treatment given to the complaining Member.

(a) Whether the treatment accorded to the complaining Member is that which should be the subject of comparison in a no less favourable treatment determination

7.189.
One of Argentina's principal arguments regarding the "treatment no less favourable" element of Article II:1 of the GATS concerns the status of the complainant as a cooperative country. Argentina argues that Panama has not established a prima facie case that services and service suppliers of non‑cooperative countries receive less favourable treatment since Panama enjoys cooperative country status. According to Argentina, this status as a cooperative country means that Panama receives the most favourable treatment.362
7.190.
In Argentina's opinion, "the reference to services and service suppliers of any other Member in Articles II and XVII should be understood as a reference to the specific services and service suppliers originating in the complaining Member"363, which are allegedly those which receive less favourable treatment. The treatment they receive should be compared with the treatment accorded to "the services and service suppliers that are the subject of the complaint", whether domestic (in the case of claims under Article XVII of the GATS) or of another origin (in the case of claims under Article II of the GATS).364
7.191.
Panama disagrees with Argentina and contends that "[t]he ordinary meaning of the terms 'any other Member' [in Articles II and XVII of the GATS] and 'that other Member' [in Article XXVIII(f) of the GATS] is clearly not the 'complaining Member'".365 Panama adds that "the benchmark for determining the existence of trade in services and the mode of supply is the presence/absence of the supplier in the defending Member."366 Panama also indicates that Article 3.8 of the DSU provides that the nullification or impairment presumed once a measure's inconsistency with WTO obligations has been found refers to "other Members party to the covered agreement" and not to the complaining Member.367 Furthermore, it points out that Article XXIII of the GATS provides that a Member may have recourse to the DSU if it "considers that any other Member fails to carry out its obligations or specific commitments" under the GATS, without at all mentioning that the effects of the alleged non‑compliance by any other Member must be borne by the complaining Member.368 In any event, Panama clarifies that it has proved the existence of negative effects on Panamanian suppliers during the period in which Panama was considered a non‑cooperative country.369
7.192.
In our view, determining the existence of less favourable treatment does not necessarily imply comparing the treatment given to services and service suppliers of the complaining Member. Although it is true that in most disputes the complaining Member is the Member affected by the allegedly less favourable treatment accorded by the respondent, we recall that in EC – Bananas III the Appellate Body determined that no provision of the DSU contains any requirement on the need for the complainant to have a "legal interest or right", as shown below:

We agree with the Panel that "neither Article 3.3 nor 3.7 of the DSU nor any other provision of the DSU contain any explicit requirement that a Member must have a 'legal interest' as a prerequisite for requesting a panel". We do not accept that the need for a "legal interest" is implied in the DSU or in any other provision of the WTO Agreement. It is true that under Article 4.11 of the DSU, a Member wishing to join in multiple consultations must have "a substantial trade interest", and that under Article 10.2 of the DSU, a third party must have "a substantial interest" in the matter before a panel. But neither of these provisions in the DSU, nor anything else in the WTO Agreement, provides a basis for asserting that parties to the dispute have to meet any similar standard.370

7.193.
The Appellate Body also indicated that Members have broad discretion in deciding whether to bring a case against another Member under the DSU and they have to judge whether such action would be fruitful.371
7.194.
The Appellate Body's statement in Canada – Autos also appears relevant to us in respect of the comparison required under Article II:1 of the GATS. The Appellate Body held that "[t]he text of Article II:1 requires, in essence, that treatment by one Member of 'services and services suppliers' of any other Member be compared with treatment of 'like' services and service suppliers of 'any other country'".372
7.195.
In the dispute before us, we note that Panama currently has cooperative status. Panama nonetheless indicates that when it requested the establishment of a panel it had the status of a non‑cooperative country373 and it was only after the establishment of this Panel that Argentina changed its status to that of a cooperative jurisdiction.374 Taking into account the Appellate Body's case law in EC – Bananas III, we do not consider that that change in Panama's status affects its right to bring a complaint under the DSU. At the same time, we do not consider that we should interfere in the broad discretion enjoyed by Panama to decide whether to bring a complaint against another Member under the DSU and whether such complaint would be fruitful for it.
7.196.
Bearing in mind the foregoing, we conclude that the submission of claims under Article II:1 of the GATS does not require that the allegedly less favourable treatment that is the subject of the complaint must refer to the complaining party in this dispute, i.ePanama.

(b) Whether the measures at issue do not accord treatment no less favourable to like services and service suppliers

7.197.
After examining this preliminary issue, we turn to consider whether Panama has proved that the measures at issue do not accord "treatment no less favourable" to like services and service suppliers. We shall start by interpreting the expression "treatment no less favourable" within the meaning of Article II:1 of the GATS. In the light of our interpretation of this expression, we shall then proceed to determine whether the eight measures in relation to which Panama has put forward claims under Article II of the GATS grant treatment no less favourable to services and service suppliers of non‑cooperative countries compared to the treatment accorded to like services and service suppliers of cooperative countries.
7.198.
We note that Article II:1 of the GATS does not define the concept of "treatment no less favourable". Nor does the scant jurisprudence on this provision provide us with a definition of this concept even though, as we pointed out earlier, the Appellate Body in Canada – Autos indicated that Article II:1 of the GATS "requires, in essence, that treatment by one Member of 'services and services suppliers' of any other Member be compared with treatment of 'like' services and service suppliers of 'any other country'".375
7.199.
The parties have engaged in an intense debate on the interpretation of the phrase "treatment no less favourable" under Article II:1 of the GATS and, in particular, on the possibility of transposing to the GATS context the Appellate Body case law on the relevance of legitimate regulatory distinctions in relation to "treatment no less favourable" under Article 2.1 of the TBT Agreement.
7.200.
Argentina's proposal asserts that the conclusions reached by the Appellate Body in US ‑ Clove Cigarettes on Article 2.1 of the TBT Agreement are applicable to the interpretation of "treatment no less favourable" in Articles II and XVII of the GATS.376 Argentina considers, in particular, that a "measure does not accord 'less favourable treatment' if the detrimental impact on imports 'stems exclusively from legitimate regulatory distinctions'".377 Argentina emphasizes that the interpretation of the expression "treatment no less favourable" in Article 2.1 of the TBT Agreement, as developed by the Appellate Body in US – Clove Cigarettes, was made in the light of the object and purpose of the TBT Agreement, which is "to strike a balance between, on the one hand, the objective of trade liberalization and, on the other hand, Members' right to regulate'".378 Argentina considers that this approach is also applicable to interpretation of the expression "treatment no less favourable" in the context of Articles II and XVII of the GATS, inasmuch as the preamble to the GATS itself "expressly recognizes that the object and purpose of the Agreement is to promote the progressive liberalization of trade in services at the same time as confirming Members' right to regulate services in order to meet national policy objectives".379 Argentina asserts that this balance between liberalization and regulation is to be found in the provisions of the GATS and, by way of example, cites Articles VI and VII.380 In the light of the foregoing, Argentina states that "the term 'treatment no less favourable' in Articles II and XVII must be interpreted as having the same meaning as the term 'treatment no less favourable' in Article 2.1 of the TBT Agreement".381
7.201.
Argentina asks us to proceed in the manner indicated by the Appellate Body in US ‑ Clove Cigarettes, that is, to "carefully scrutinize the particular circumstances of the case, that is, the design, architecture, revealing structure, operation, and application of the technical regulation at issue, and, in particular, whether that technical regulation is even‑handed", in order to determine whether the detrimental impact on services and service suppliers of non‑cooperative countries in the Argentine market stems from a legitimate regulatory distinction.382 Argentina considers that its measures differentiate on the basis of a legitimate regulatory distinction which is "the ability of the national tax authorities to obtain tax information from other jurisdictions", and are in line with internationally recognized objective criteria, for which reason the treatment they prescribe for services and service suppliers of non‑cooperative countries does not constitute less favourable treatment in comparison with that accorded to like services and service suppliers of cooperative countries.383
7.202.
Panama