II. FACTUAL ASPECTSA. PRODUCTS AT ISSUE2.1 This dispute concerns retreaded tyres which are produced by reconditioning used tyres by stripping the worn tread from a used tyre's skeleton (casing) and replacing it with new material in the form of a new tread and, sometimes, new material covering also parts or all of the sidewalls.2.2 Retreaded tyres can be produced through a number of different methods all encompassed by the generic term "retreading." These methods are: (i) top-capping, which consists in replacing only the tread; (ii) re-capping, which entails replacing the tread and part of the sidewall; and (iii) remoulding or "bead to bead" method, which consists of replacing the tread and the sidewall including all or part of the lower area of the tyre.282.3 There are different types of retreaded tyres which correspond to the different types of casings used to produce them, namely: passenger car retreaded tyres, commercial vehicle retreaded tyres, aircraft retreaded tyres and other. Under international standards, passenger car tyres may be retreaded only once.29 By contrast, commercial vehicle and aircraft tyres may be retreaded more than once.(…)B. MEASURES AT ISSUE302.5 On 17 November 2005, the European Communities requested the establishment of a panel in relation to the following measures of Brazil:3128 See UNECE Regulation No. 108 (1998): Uniform Provisions Concerning the Approval for the Production of Retreaded Pneumatic Tyres for Motor Vehicles and their Trailers and UNECE Regulation No. 109 (1998): Uniform Provisions Concerning the Approval for the Production of Retreaded Pneumatic Tyres for Commercial Vehicles and Their Trailers, Exhibits EC-6 and 7 and BRA-2 and 3, para. 2.37.29 See UNECE Regulation No. 108 (1998), para. 6.2.30 The text of Brazilian laws and regulations is based on translations provided by Brazil in its exhibits as clarified in light of Brazil's answer to panel question No. 1. In its answer to this question, Brazil indicated, inter alia, that the Portuguese term "reformados" should be translated as "reconditioned or retreaded tyres", the term "recauchutagem" as "recapping", "remoldagem" as "remolding", and "recapagem" as "top-capping".31 WT/DS332/4. 64(a) The imposition of an import ban on retreaded tyres, notably by virtue of Portaria 14 of 17 November 2004 of the Secretariat of Foreign Trade of the Brazilian Ministry of Development, Industry and International Commerce (SECEX) that prohibits the issuance of import licenses for retreaded tyres.(b) The adoption of a set of measures banning the importation of used tyres, which are sometimes applied against imports of retreaded tyres. In a footnote to this paragraph, the European Communities identifies the following measures banning the importation of used tyres: Portaria No. 8 of the Department of Foreign Trade Operations (DECEX) of 13 May 1991; Portaria DECEX 18 of 19 July 1992; Portaria 138-N of the Brazilian Institute of the Environment and of Renewable Resources (IBAMA) of 22 December 1992; Portaria 370 of the Ministry of Industry, Commerce and Tourism (MICT) of 28 November 1994; Interministerial Portaria 3 of 12 September 1995 of the Ministry of Industry, Commerce and Tourism and of the Ministry of the Economy; Resolution 23 of the National Council of the Environment (CONAMA) of 12 December 1996, and CONAMA Resolution 235 of 7 January 1998.(…)(e) The exemption of retreaded tyres imported from other MERCOSUR countries from the import ban by means of Portaria SECEX 14 of 17 November 2004 and from the above-mentioned financial penalties by virtue of Presidential Decree No. 4592 of 11 February 2003, in response to the ruling of a MERCOSUR panel established at the request of Uruguay.2.6 The European Communities also noted that for each of the measures referred to above, its request also covers any amendments, replacements, extensions, implementing measures or other related measures.(…)4. Exemption of MERCOSUR countries from the import ban and the fines2.13 After the adoption of Portaria SECEX 8/2000, the first measure explicitly banning the importation of "retreaded tyres", Uruguay requested, on 27 August 2001, the initiation of arbitral proceedings under MERCOSUR against this Brazilian measure. On 9 January 2002, the MERCOSUR arbitral tribunal decided that the import ban on retreaded tyres imposed by Portaria SECEX 8/2000 was incompatible with MERCOSUR Decision 22/2000, which requires MERCOSUR partners not to introduce new restrictions to commerce among themselves.2.14 Following this arbitral award, Brazil eliminated the ban for remoulded tyres imported from MERCOSUR countries by means of Portaria SECEX 2 of 8 March 2002. Article 1 of Portaria SECEX 2/2002 provides:"Art. 1. The import license for remoulded tyres is hereby authorized, classified under NCM codes 4012.1100, 4012.1200, 4012.1300 and 4012.1900, when proceeding from MERCOSUR member States under the Economic Complementation Agreement no. 18."322.15 This exception was maintained in Portaria SECEX 17 of 1 December 2003, and it is currently contained in Article 40 of Portaria SECEX 14/2004, transcribed above.32 Exhibit BRA-78. See also Exhibit EC-41. 65(…)VII. FINDINGSA. THE BAN ON THE IMPORTATION OF RETREADED TYRES
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