WTO | WTO analytical index: Guide to WTO Law and Practice - Agreement on Sanitary and Phytosanitary Measures

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> Preamble
> Article 1
> Article 2
> Article 3
> Article 4
> Article 5
> Article 6
> Article 7
> Article 8
> Article 9
> Article 10
> Article 11
> Article 12
> General Issues
> Relationship with other WTO Agreements
> Annex A
> Annex B
> Annex C

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I. Preamble back to top

A. Text of the Preamble

Members,

Reaffirming that no Member should be prevented from adopting or enforcing measures necessary to protect human, animal or plant life or health, subject to the requirement that these measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between Members where the same conditions prevail or a disguised restriction on international trade;

Desiring to improve the human health, animal health and phytosanitary situation in all Members;

Noting that sanitary and phytosanitary measures are often applied on the basis of bilateral agreements or protocols;

Desiring the establishment of a multilateral framework of rules and disciplines to guide the development, adoption and enforcement of sanitary and phytosanitary measures in order to minimize their negative effects on trade;

Recognizing the important contribution that international standards, guidelines and recommendations can make in this regard;

Desiring to further the use of harmonized sanitary and phytosanitary measures between Members, on the basis of international standards, guidelines and recommendations developed by the relevant international organizations, including the Codex Alimentarius Commission, the International Office of Epizootics, and the relevant international and regional organizations operating within the framework of the International Plant Protection Convention, without requiring Members to change their appropriate level of protection of human, animal or plant life or health;

Recognizing that developing country Members may encounter special difficulties in complying with the sanitary or phytosanitary measures of importing Members, and as a consequence in access to markets, and also in the formulation and application of sanitary or phytosanitary measures in their own territories, and desiring to assist them in their endeavours in this regard;

Desiring therefore to elaborate rules for the application of the provisions of GATT 1994 which relate to the use of sanitary or phytosanitary measures, in particular the provisions of Article XX(b)(1);

(footnote original) 1 In this Agreement, reference to Article XX(b) includes also the chapeau of that Article.

Hereby agree as follows:

B. Interpretation and Application of the Preamble

1. "international standards, guidelines and recommendations"

1. In 1995, the Codex Alimentarius Commission, the International Office of Epizootics, and the Secretariat of the International Plant Protection Convention provided the SPS Committee with lists of international standards they had adopted.(1)

2. The precautionary principle

2. With respect to the "precautionary principle" invoked by the European Communities in support of its claim in EC - Hormones that it had complied with Article 5.1 of the SPS Agreement, the Appellate Body declined to take a position on the status of the precautionary principle in international law:

"The status of the precautionary principle in international law continues to be the subject of debate among academics, law practitioners, regulators and judges. The precautionary principle is regarded by some as having crystallized into a general principle of customary international environmental law. Whether it has been widely accepted by Members as a principle of general or customary international law appears less than clear. We consider, however, that it is unnecessary, and probably imprudent, for the Appellate Body in this appeal to take a position on this important, but abstract, question. We note that the Panel itself did not make any definitive finding with regard to the status of the precautionary principle in international law and that the precautionary principle, at least outside the field of international environmental law, still awaits authoritative formulation".(2)

3. On the relationship between the "precautionary principle" and the SPS Agreement, the Appellate Body also noted the following four elements, one of which concerned the Preamble to the SPS Agreement:

"First, the principle has not been written into the SPS Agreement as a ground for justifying SPS measures that are otherwise inconsistent with the obligations of Members set out in particular provisions of that Agreement. Secondly, the precautionary principle indeed finds reflection in Article 5.7 of the SPS Agreement. We agree, at the same time, with the European Communities, that there is no need to assume that Article 5.7 exhausts the relevance of a precautionary principle. It is reflected also in the sixth paragraph of the preamble and in Article 3.3. These explicitly recognize the right of Members to establish their own appropriate level of sanitary protection, which level may be higher (i.e., more cautious) than that implied in existing international standards, guidelines and recommendations. Thirdly, a panel charged with determining, for instance, whether 'sufficient scientific evidence' exists to warrant the maintenance by a Member of a particular SPS measure may, of course, and should, bear in mind that responsible, representative governments commonly act from perspectives of prudence and precaution where risks of irreversible, e.g. life-terminating, damage to human health are concerned. Lastly, however, the precautionary principle does not, by itself, and without a clear textual directive to that effect, relieve a panel from the duty of applying the normal (i.e. customary international law) principles of treaty interpretation in reading the provisions of the SPS Agreement".(3)

II. Article 1 back to top

A. Text of Article 1

Article 1: General Provisions

1. This Agreement applies to all sanitary and phytosanitary measures which may, directly or indirectly, affect international trade. Such measures shall be developed and applied in accordance with the provisions of this Agreement.

2. For the purposes of this Agreement, the definitions provided in Annex A(4) shall apply.

3. The annexes are an integral part of this Agreement.

4. Nothing in this Agreement shall affect the rights of Members under the Agreement on Technical Barriers to Trade with respect to measures not within the scope of this Agreement.

B. Interpretation and Application of Article 1

1. Paragraph 1

(a) Scope of the SPS Agreement

(i) General

4. The Panel on EC - Hormones identified two elements in order for a measure to fall under the SPS Agreement:

"According to Article 1.1 of the SPS Agreement, two requirements need to be fulfilled for the SPS Agreement to apply: (i) the measure in dispute is a sanitary or phytosanitary measure; and (ii) the measure in dispute may, directly or indirectly, affect international trade".(5)

(ii) Measures of a provincial government

5. In Australia - Salmon (Article 21.5 - Canada), with respect to a measure taken by a provincial government (Tasmania), the Panel held that in the light of Article 13, measures taken by a non-central government body of Australia fell under the scope of the SPS Agreement:

"Article 13 of the SPS Agreement provides unambiguously that: (1) 'Members are fully responsible under [the SPS] Agreement for the observance of all obligations set forth herein'; and (2) 'Members shall formulate and implement positive measures and mechanisms in support of the observance of the provisions of this Agreement by other than central government bodies'. Reading these two obligations together, in light of Article 1.1 of the SPS Agreement referred to earlier, we consider that sanitary measures taken by the Government of Tasmania, being an 'other than central government' body as recognized by Australia, are subject to the SPS Agreement and fall under the responsibility of Australia as WTO Member when it comes to their observance of SPS obligations".(6)

(iii) Measures in existence since before the entry into force of the SPS Agreement

6. In EC - Hormones, in discussing the applicability of the SPS Agreement to a measure which was enacted before the entry into force of the Agreement, the Appellate Body held that the SPS Agreement would apply to situations or measures that had not ceased to exist, unless the SPS Agreement revealed a contrary intention. Furthermore, the Appellate Body noted that certain measures of the SPS Agreement "expressly contemplate applicability to SPS measures that already existed on 1 January 1995":

"We addressed the issue of temporal application in our Report in Brazil - Measures Affecting Desiccated Coconut and concluded on the basis of Article 28 of the Vienna Convention that:

Absent a contrary intention, a treaty cannot apply to acts or facts which took place, or situations which ceased to exist, before the date of its entry into force.

We agree with the Panel that the SPS Agreement would apply to situations or measures that did not cease to exist, such as the 1981 and 1988 Directives, unless the SPS Agreement reveals a contrary intention. We also agree with the Panel that the SPS Agreement does not reveal such an intention. The SPS Agreement does not contain any provision limiting the temporal application of the SPS Agreement, or of any provision thereof, to SPS measures adopted after 1 January 1995. In the absence of such a provision, it cannot be assumed that central provisions of the SPS Agreement, such as Articles 5.1 and 5.5, do not apply to measures which were enacted before 1995 but which continue to be in force thereafter. If the negotiators had wanted to exempt the very large group of SPS measures in existence on 1 January 1995 from the disciplines of provisions as important as Articles 5.1 and 5.5, it appears reasonable to us to expect that they would have said so explicitly. Articles 5.1 and 5.5 do not distinguish between SPS measures adopted before 1 January 1995 and measures adopted since; the relevant implication is that they are intended to be applicable to both. Furthermore, other provisions of the SPS Agreement, such as Articles 2.2, 2.3, 3.3 and 5.6, expressly contemplate applicability to SPS measures that already existed on 1 January 1995."(7)

7. In coming to the conclusion referred to in paragraph 6 above, the Appellate Body also referred to Article XVI:4 of the WTO Agreement:

"Finally, we observe, more generally, that Article XVI.4 of the WTO Agreement stipulates that:

Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements.

Unlike the GATT 1947, the WTO Agreement was accepted definitively by Members, and therefore, there are no longer 'existing legislation' exceptions (so-called 'grandfather rights').

We are aware that the applicability, as from 1 January 1995, of the requirement that an SPS measure be based on a risk assessment to the many SPS measures already in existence on that date, may impose burdens on Members. It is pertinent here to note that Article 5.1 stipulates that SPS measures must be based on a risk assessment, as appropriate to the circumstances, and this makes clear that the Members have a certain degree of flexibility in meeting the requirements of Article 5.1."(8)

(b) Relationship between paragraph 1(a) and 1(b) of Annex A

8. In Australia - Salmon, the Panel examined whether an Australian prohibition of imports of dead salmon was a "sanitary measure" within the meaning of paragraph 1(b) of Annex A of the SPS Agreement. While the definition in paragraph 1(a) of Annex A focuses on measures intended to protect animal or plant life or health from risks arising as a result of pests and diseases, paragraph 1(b) speaks of measures intended to protect human or animal life or health from disease-causing organisms contained in food, beverages or feedstuffs. The Panel held:

"In the circumstances at hand, we consider that the definition of a 'sanitary measure' in paragraph 1(a) encompasses the coverage sought by Australia under the definition in paragraph 1(b). The definition in paragraph 1(a) deals with risks arising from 'the entry, establishment or spread of pests, diseases ... or disease-causing organisms' in general. In the context of disease-causing organisms, the definition in paragraph 1(b) is limited in the sense that it only addresses risks arising from 'disease-causing organisms in foods, beverages or feedstuffs' (hereafter also referred to as food-borne risks). We are of the view that, even though both definitions of a 'sanitary measure' invoked by Australia might be applicable to the measure in dispute, the objectives for which that measure is being applied are more appropriately covered by the definition in paragraph 1(a). These objectives have been clearly expressed by Australia on several occasions."(9)

III. Article 2 back to top

A. Text of Article 2

Article 2: Basic Rights and Obligations

1. Members have the right to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of this Agreement.

2. Members shall ensure that any sanitary or phytosanitary measure is applied only to the extent necessary to protect human, animal or plant life or health, is based on scientific principles and is not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5.

3. Members shall ensure that their sanitary and phytosanitary measures do not arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail, including between their own territory and that of other Members. Sanitary and phytosanitary measures shall not be applied in a manner which would constitute a disguised restriction on international trade.

4. Sanitary or phytosanitary measures which conform to the relevant provisions of this Agreement shall be presumed to be in accordance with the obligations of the Members under the provisions of GATT 1994 which relate to the use of sanitary or phytosanitary measures, in particular the provisions of Article XX(b).

B. Interpretation and Application of Article 2

1. Paragraph 2

(a) "maintained without sufficient scientific evidence"

9. In EC - Hormones, the Appellate Body referred to the requirement of "sufficient scientific evidence" as part of a "balance" contained in the SPS Agreement:

"The requirements of a risk assessment under Article 5.1, as well as of 'sufficient scientific evidence' under Article 2.2, are essential for the maintenance of the delicate and carefully negotiated balance in the SPS Agreement between the shared, but sometimes competing, interests of promoting international trade and of protecting the life and health of human beings."(10)

10. In EC - Hormones, the Appellate Body, when addressing the relationship between the precautionary principle and the SPS Agreement, noted as follows:

"[A] panel charged with determining, for instance, whether 'sufficient scientific evidence' exists to warrant the maintenance by a Member of a particular SPS measure may, of course, and should, bear in mind that responsible, representative governments commonly act from perspectives of prudence and precaution where risks of irreversible, e.g. life-terminating, damage to human health are concerned".(11)

11. Also, with respect to the discussion over the precautionary principle in EC - Hormones, see also paragraphs 2-3 above.

12. In Japan - Agricultural Products II, with respect to the term "sufficient" in Article 2.2, the Appellate Body required an "adequate relationship between two elements":

"The ordinary meaning of 'sufficient' is 'of a quantity, extent, or scope adequate to a certain purpose or object'. From this, we can conclude that 'sufficiency' is a relational concept. 'Sufficiency' requires the existence of a sufficient or adequate relationship between two elements, in casu, between the SPS measure and the scientific evidence.

The context of the word 'sufficient' or, more generally, the phrase 'maintained without sufficient scientific evidence' in Article 2.2, includes Article 5.1 as well as Articles 3.3 and 5.7 of the SPS Agreement".(12)

13. After an examination of the context of the term "sufficient", contained in Article 2.2 of the SPS Agreement, the Appellate Body disagreed with Japan about a standard of "patent insufficiency":

"We do not agree with Japan's proposition that direct application of Article 2.2 of the SPS Agreement should be limited to situations in which the scientific evidence is 'patently' insufficient, and that the issue raised in this dispute should have been dealt with under Article 5.1 of the SPS Agreement. There is nothing in the text of either Articles 2.2 or 5.1, or any other provision of the SPS Agreement, that requires or sanctions such limitation of the scope of Article 2.2".(13)

14. The Appellate Body then established that Article 2.2 requires "a rational or objective relationship between the SPS measure and the scientific evidence":

"[W]e agree with the Panel that the obligation in Article 2.2 that an SPS measure not be maintained without sufficient scientific evidence requires that there be a rational or objective relationship between the SPS measure and the scientific evidence. Whether there is a rational relationship between an SPS measure and the scientific evidence is to be determined on a case-by-case basis and will depend upon the particular circumstances of the case, including the characteristics of the measure at issue and the quality and quantity of the scientific evidence".(14)

15. In Japan - Agricultural Products II, the Appellate Body addressed the relationship between the requirement of sufficient scientific evidence under Article 2.2 and Article 5.7:

"[I]t is clear that Article 5.7 of the SPS Agreement, to which Article 2.2 explicitly refers, is part of the context of the latter provision and should be considered in the interpretation of the obligation not to maintain an SPS measure without sufficient scientific evidence. Article 5.7 allows Members to adopt provisional SPS measures '[i]n cases where relevant scientific evidence is insufficient' and certain other requirements are fulfilled. Article 5.7 operates as a qualified exemption from the obligation under Article 2.2 not to maintain SPS measures without sufficient scientific evidence. An overly broad and flexible interpretation of that obligation would render Article 5.7 meaningless."(15)

16. The Panel on Japan - Agricultural Products II had limited its finding of violation of Article 2.2 to only four of the eight products at issue (on the ground that in respect of the other four products, the United States had not adduced sufficient evidence to raise a prima facie case). The Appellate Body agreed with the Panel and rejected the United States' claim that the Panel had imposed on it an erroneous burden of proof:

"[W]e disagree with the United States that the Panel imposed on the United States an impossible and, therefore, erroneous burden of proof by requiring it to prove a negative, namely, that there are no relevant studies and reports which support Japan's varietal testing requirement. In our view, it would have been sufficient for the United States to raise a presumption that there are no relevant studies or reports. Raising a presumption that there are no relevant studies or reports is not an impossible burden. The United States could have requested Japan, pursuant to Article 5.8 of the SPS Agreement, to provide 'an explanation of the reasons' for its varietal testing requirement, in particular, as it applies to apricots, pears, plums and quince. Japan would, in that case, be obliged to provide such explanation. The failure of Japan to bring forward scientific studies or reports in support of its varietal testing requirement as it applies to apricots, pears, plums and quince, would have been a strong indication that there are no such studies or reports. The United States could also have asked the Panel's experts specific questions as to the existence of relevant scientific studies or reports or it could have submitted to the Panel the opinion of experts consulted by it on this issue. The United States, however, did not submit any evidence relating to apricots, pears, plums and quince".(16)

17. The Panel on Japan - Agricultural Products II emphasized that in reviewing whether the measure at issue was being maintained without sufficient scientific evidence, it would not conduct its own risk assessment:

"To determine whether or not the varietal testing requirement is maintained without sufficient scientific evidence ... we need to refer to the opinions we received from the experts advising the Panel. We recall that these expert opinions are opinions on the evidence submitted by the parties. We are not empowered, nor are the experts advising the Panel, to conduct our own risk assessment".(17)

2. Paragraph 3

(a) Interpretation of paragraph 3

18. The Panel on Australia - Salmon (Article 21.5 - Canada) identified three elements necessary to find a violation of Article 2.3:

"[T]hree elements, cumulative in nature, are required for a violation of this provision:

(1) the measure discriminates between the territories of Members other than the Member imposing the measure, or between the territory of the Member imposing the measure and that of another Member;

(2) the discrimination is arbitrary or unjustifiable; and

(3) identical or similar conditions prevail in the territory of the Members compared."(18)

19. In Australia - Salmon (Article 21.5 - Canada), while the Panel found no violation of Article 2.3(19), it also stated that Article 2.3 prohibits not only discrimination between similar products, but also between different products:

"[W]e are of the view that discrimination in the sense of Article 2.3, first sentence, may also include discrimination between different products, e.g. not only discrimination between Canadian salmon and New Zealand salmon, or Canadian salmon and Australian salmon; but also discrimination between Canadian salmon and Australian fish including non-salmonids".(20)

(b) Relationship with Article 5.5

20. In the context of examining the European Communities' measure at issue in the light of Article 5.5, the Appellate Body in EC - Hormones made the following statement with respect to Article 2.3:

"It is well to bear in mind that, after all, the difference in levels of protection that is characterizable as arbitrary or unjustifiable is only an element of (indirect) proof that a Member may actually be applying an SPS measure in a manner that discriminates between Members or constitutes a disguised restriction on international trade, prohibited by the basic obligations set out in Article 2.3 of the SPS Agreement".(21)

21. In Australia - Salmon, the Appellate Body elaborated on the relationship between Articles 2.3 and 5.5:

"We recall that the third - and decisive - element of Article 5.5, discussed above, requires a finding that the SPS measure which embodies arbitrary or unjustifiable restrictions in levels of protection results in 'discrimination or a disguised restriction on international trade'. Therefore, a finding of violation of Article 5.5 will necessarily imply a violation of Article 2.3, first sentence, or Article 2.3, second sentence. Discrimination 'between Members, including their own territory and that of others Members' within the meaning of Article 2.3, first sentence, can be established by following the complex and indirect route worked out and elaborated by Article 5.5. However, it is clear that this route is not the only route leading to a finding that an SPS measure constitutes arbitrary or unjustifiable discrimination according to Article 2.3, first sentence. Arbitrary or unjustifiable discrimination in the sense of Article 2.3, first sentence, can be found to exist without any examination under Article 5.5."(22)

22. With respect to Article 5.5, see paragraphs 102-115 below.

3. Relationship with other Articles of the SPS Agreement

23. In EC - Hormones, with respect to the Panel's decision to examine a claim under Articles 3 and 5 before a claim under Article 2(23), the Appellate Body indicated a preference for beginning the analysis with Article 2:

"We are, of course, surprised by the fact that the Panel did not begin its analysis of this whole case by focusing on Article 2 that is captioned 'Basic Rights and Obligations', an approach that appears logically attractive. We recall the reading that we have given above to Articles 2 and 5 - that Article 2.2 informs Article 5.1, and that similarly Article 2.3 informs Article 5.5 - but believe that further analysis of their relationship should await another case."(24)

24. In Australia - Salmon, where Articles 2, 3 and 5 were at issue, the Panel decided to commence its analysis under Article 5, because (1) Canada, the complaining party, focused initially on this provision with respect to its claims and (2) the provisions under Article 5 "provide for more specific and detailed rights and obligations" than Article 2. The Appellate Body did not address this issue:

"[E]ven if we were to start our examination of this dispute under Article 3, we would in any event be referred to and thus still need to address Articles 2 and 5. To conduct our examination of this case in the most efficient manner, we shall, therefore, first address Articles 2 and 5 ... Since in this particular case, (1) Canada itself first presents its claims under Article 5, before addressing those under Article 2, and (2) the provisions invoked by Canada under Article 5 (i.e., Articles 5.1, 5.2, 5.5 and 5.6) all provide for more specific and detailed rights and obligations than the 'Basic Rights and Obligations' set out in rather broad wording in the provisions invoked by Canada under Article 2 (i.e., Articles 2.2 and 2.3), we consider it more appropriate in the circumstances of this dispute to first deal with Canada's claims under Article 5".(25)

25. In Japan - Agricultural Products II, however, claims were made under Articles 2, 5, 7 and 8 and the Panel began its examination with Article 2. The Appellate Body did not address this issue.(26)

26. In Australia - Salmon (Article 21.5 - Canada), Canada alleged the violation of Articles 2, 5, 6 and 8. Similarly to the original Panel, the Article 21.5 Panel started its examination with Article 5.(27)

27. In Australia - Salmon, the Appellate Body concluded that a violation of Article 5.1 also implied an inconsistency with Article 2.2:

"[B]y maintaining an import prohibition on fresh, chilled or frozen ocean-caught Pacific salmon, in violation of Article 5.1, Australia has, by implication, also acted inconsistently with Article 2.2 of the SPS Agreement."(28)

28. In Japan - Agricultural Products II, with respect to the relationship between Articles 2.2 and 5.7, the Panel stated:

"We recall that Article 2.2 provides for an alternative to the requirement not to maintain phytosanitary measures without sufficient scientific evidence, namely to adopt provisional measures in accordance with Article 5.7."(29)

29. The Panel on Japan - Agricultural Products II further stated that a measure consistent with Article 5.7 cannot be found inconsistent with Article 2.2:

"[B]efore we can find... whether or not Article 2.2 is violated in this dispute - we recall that Article 2.2 provides that "Members shall ensure that any ... phytosanitary measure ... is not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5" (emphasis added). We note that Japan invokes Article 5.7 in support of its varietal testing requirement. We therefore need to examine next whether the varietal testing requirement is a measure meeting the requirements in Article 5.7. If the varietal testing requirement meets these requirements, we cannot find that it violates Article 2.2."(30)

IV. Article 3 back to top

A. Text of Article 3

Article 3: Harmonization

1. To harmonize sanitary and phytosanitary measures on as wide a basis as possible, Members shall base their sanitary or phytosanitary measures on international standards, guidelines or recommendations, where they exist, except as otherwise provided for in this Agreement, and in particular in paragraph 3.

2. Sanitary or phytosanitary measures which conform to international standards, guidelines or recommendations shall be deemed to be necessary to protect human, animal or plant life or health, and presumed to be consistent with the relevant provisions of this Agreement and of GATT 1994.

3. Members may introduce or maintain sanitary or phytosanitary measures which result in a higher level of sanitary or phytosanitary protection than would be achieved by measures based on the relevant international standards, guidelines or recommendations, if there is a scientific justification, or as a consequence of the level of sanitary or phytosanitary protection a Member determines to be appropriate in accordance with the relevant provisions of paragraphs 1 through 8 of Article 5.(2) Notwithstanding the above, all measures which result in a level of sanitary or phytosanitary protection different from that which would be achieved by measures based on international standards, guidelines or recommendations shall not be inconsistent with any other provision of this Agreement.

(footnote original) 2 For the purposes of paragraph 3 of Article 3, there is a scientific justification if, on the basis of an examination and evaluation of available scientific information in conformity with the relevant provisions of this Agreement, a Member determines that the relevant international standards, guidelines or recommendations are not sufficient to achieve its appropriate level of sanitary or phytosanitary protection.

4. Members shall play a full part, within the limits of their resources, in the relevant international organizations and their subsidiary bodies, in particular the Codex Alimentarius Commission, the International Office of Epizootics, and the international and regional organizations operating within the framework of the International Plant Protection Convention, to promote within these organizations the development and periodic review of standards, guidelines and recommendations with respect to all aspects of sanitary and phytosanitary measures.

5. The Committee on Sanitary and Phytosanitary Measures provided for in paragraphs 1 and 4 of Article 12 (referred to in this Agreement as the "Committee") shall develop a procedure to monitor the process of international harmonization and coordinate efforts in this regard with the relevant international organizations.

B. Interpretation and Application of Article 3

1. General

(a) Object of Article 3

30. In EC - Hormones, the Appellate Body held that the object and purpose of Article 3 was to promote the harmonization of national SPS measures:

"In generalized terms, the object and purpose of Article 3 is to promote the harmonization of the SPS measures of Members on as wide a basis as possible, while recognizing and safeguarding, at the same time, the right and duty of Members to protect the life and health of their people. The ultimate goal of the harmonization of SPS measures is to prevent the use of such measures for arbitrary or unjustifiable discrimination between Members or as a disguised restriction on international trade, without preventing Members from adopting or enforcing measures which are both 'necessary to protect' human life or health and 'based on scientific principles', and without requiring them to change their appropriate level of protection".(31)

31. The Panel on Australia - Salmon referred to Article 3 in the context of its analysis under Article 5.6:

"Given the repeated reference made in the SPS Agreement to the relevant international organizations, in this dispute the OIE [International Office of Epizootics], and the recommendations they produce (e.g., Articles 3.1 and 5.1), as well as to the more general objective of harmonization (e.g., Articles 3.4 and the sixth preamble), we consider that appropriate weight should be given to [the] opinion on Option 5 [i.e., evisceration of the fish, proposed by the OIE]".(32)

2. Paragraph 1

32. The Panel on Australia - Salmon held with respect to standards developed by the International Office of Epizootics (OIE):

"[T]he SPS Agreement (paragraph 3(b) of Annex A) explicitly directs us to the OIE and the standards, guidelines and recommendations it develops ... The fact that the OIE Code is subject to revision or the way it has been adopted in our view does not change its validity for our purposes".(33)

33. In 1995, the Codex Alimentarius Commission, the International Office of Epizootics, and the Secretariat of the International Plant Protection Convention provided the SPS Committee with lists of international standards they had adopted.(34) With respect to this list of international standards, see paragraph 1 above.

(a) "based on"

34. In EC - Hormones, the Appellate Body reversed the Panel's finding that Article 3.2 "equates measures based on international standards with measures which conform to such standards".(35) The Appellate Body first drew a distinction between the terms "based on" and "conform to":

"In the first place, the ordinary meaning of 'based on' is quite different from the plain or natural import of 'conform to'. A thing is commonly said to be 'based on' another thing when the former 'stands' or is 'founded' or 'built' upon or 'is supported by' the latter. In contrast, much more is required before one thing may be regarded as 'conform[ing] to' another: the former must 'comply with', 'yield or show compliance' with the latter. The reference of 'conform to' is to 'correspondence in form or manner', to 'compliance with' or 'acquiescence', to 'follow[ing] in form or nature'. A measure that 'conforms to' and incorporates a Codex standard is, of course, 'based on' that standard. A measure, however, based on the same standard might not conform to that standard, as where only some, not all, of the elements of the standard are incorporated into the measure."(36)

35. In reversing the Panel's finding that the measures "based on" international standards are to be equated with measures "conforming to" international standards, the Appellate Body, after distinguishing between the ordinary meaning of these two terms, as referred to in paragraph 34 above, noted that these two terms were used in different provisions of the SPS Agreement and rejected the view that such different usage of terms was "merely inadvertent":

"In the second place, 'based on' and 'conform to' are used in different articles, as well as in differing paragraphs of the same article. Thus, Article 2.2 uses 'based on', while Article 2.4 employs 'conform to'. Article 3.1 requires the Members to 'base' their SPS measures on international standards; however, Article 3.2 speaks of measures which 'conform to' international standards. Article 3.3 once again refers to measures 'based on' international standards. The implication arises that the choice and use of different words in different places in the SPS Agreement are deliberate, and that the different words are designed to convey different meanings. A treaty interpreter is not entitled to assume that such usage was merely inadvertent on the part of the Members who negotiated and wrote that Agreement. Canada has suggested the use of different terms was 'accidental' in this case, but has offered no convincing argument to support its suggestion. We do not believe this suggestion has overturned the inference of deliberate choice."(37)

36. Finally, the Appellate Body in EC - Hormones held that the Panel's interpretation of the term "based on" was not in accordance with the object and purpose of Article 3, which the Appellate Body held was to harmonize SPS measures in the future:

"In the third place, the object and purpose of Article 3 run counter to the Panel's interpretation. That purpose, Article 3.1 states, is '[t]o harmonize [SPS] measures on as wide a basis as possible ...'. The preamble of the SPS Agreement also records that the Members '[d]esir[e] to further the use of harmonized [SPS] measures between Members on the basis of international standards, guidelines and recommendations developed by the relevant international organizations ...'. (emphasis added) Article 12.1 created a Committee on Sanitary and Phytosanitary Measures and gave it the task, inter alia, of 'furtherance of its objectives, in particular with respect to harmonization' and (in Article 12.2) to 'encourage the use of international standards, guidelines and recommendations by all Members'. It is clear to us that harmonization of SPS measures of Members on the basis of international standards is projected in the Agreement, as a goal, yet to be realized in the future. To read Article 3.1 as requiring Members to harmonize their SPS measures by conforming those measures with international standards, guidelines and recommendations, in the here and now, is, in effect, to vest such international standards, guidelines and recommendations (which are by the terms of the Codex recommendatory in form and nature) with obligatory force and effect. The Panel's interpretation of Article 3.1 would, in other words, transform those standards, guidelines and recommendations into binding norms. But, as already noted, the SPS Agreement itself sets out no indication of any intent on the part of the Members to do so. We cannot lightly assume that sovereign states intended to impose upon themselves the more onerous, rather than the less burdensome, obligation by mandating conformity or compliance with such standards, guidelines and recommendations. To sustain such an assumption and to warrant such a far-reaching interpretation, treaty language far more specific and compelling than that found in Article 3 of the SPS Agreement would be necessary".(38)

37. In the context of reversing the Panel's finding that the term "based on" was equivalent to the term "conform to", the Appellate Body also reversed the Panel's finding on the allocation of the burden of proof under Article 3:

"Under Article 3.1 of the SPS Agreement, a Member may choose to establish an SPS measure that is based on the existing relevant international standard, guideline or recommendation. Such a measure may adopt some, not necessarily all, of the elements of the international standard. The Member imposing this measure does not benefit from the presumption of consistency set up in Article 3.2; but, as earlier observed, the Member is not penalized by exemption of a complaining Member from the normal burden of showing a prima facie case of inconsistency with Article 3.1 or any other relevant Article of the SPS Agreement or of the GATT 1994."(39)

38. On the Panel's finding that "for a sanitary measure to be based on an international standard ..., that measure needs to reflect the same level of sanitary protection as the standard" (emphasis original)(40), the Appellate Body in EC - Hormones noted as follows:

"It appears to us that the Panel reads much more into Article 3.3 than can be reasonably supported by the actual text of Article 3.3. Moreover, the Panel's entire analysis rests on its flawed premise that 'based on', as used in Articles 3.1 and 3.3, means the same thing as 'conform to' as used in Article 3.2. As already noted, we are compelled to reject this premise as an error in law. The correctness of the rest of the Panel's intricate interpretation and examination of the consequences of the Panel's litmus test, however, have to be left for another day and another case".(41)

(b) "where they exist"

39. With respect to the phrase "international standards ... where they exist" referred to in Article 3.1, the Panel on EC - Hormones noted as follows:

"Article 3.1 unambiguously prescribes that '... Members shall base their sanitary ... measures on international standards ... where they exist ...' (emphasis added). Paragraph 3 of Annex A of the SPS Agreement states equally clearly that the international standards mentioned in Article 3:1 are 'for food safety, the standards ... established by the Codex Alimentarius Commission relating to ... veterinary drug ... residues ...' (emphasis added). No other conditions are imposed in the SPS Agreement on the relevance of international standards for the purposes of Article 3. Therefore, as a panel making a finding on whether or not a Member has an obligation to base its sanitary measure on international standards in accordance with Article 3.1, we only need to determine whether such international standards exist. For these purposes, we need not consider (i) whether the standards reflect levels of protection or sanitary measures or the type of sanitary measure they recommend, or (ii) whether these standards have been adopted by consensus or by a wide or narrow majority, or (iii) whether the period during which they have been discussed or the date of their adoption was before or after the entry into force of the SPS Agreement".(42)

40. In Australia - Salmon, with respect to the phrase "international standards ... where they exist" in the context of animal health, the Panel held that even if no international standards existed for the entire range of fish diseases at issue, this fact did not signify that an international standard applying to only one of the diseases at issue could not be relevant in the case before it:

"Paragraph 3(b) of Annex A to the SPS Agreement indicates that the international standards, guidelines or recommendations referred to in Article 3 for animal health (the concern at issue in this dispute) are those developed under the auspices of the International Office of Epizooties ('OIE'). Both parties agree that the International Aquatic Animal Health Code adopted by the OIE in 1995 ('OIE Code') provides international guidelines on a disease-by-disease basis. However, they also agree that as of today no relevant OIE guideline exists which deals with salmon on a product specific basis. Moreover, both parties also agree that OIE guidelines do not exist for all of the 24 diseases of concern to Australia. Therefore, even if we were to examine first, if and how many relevant international guidelines exist and second address the question of whether Australia deviates from these guidelines, we would thereafter still need to examine either (1) in the event Australia does deviate from any such guidelines contrary to Article 3, whether the measure in dispute could not be based on Australia's concern for any of the other diseases for which no international guideline exists (in casu, under Articles 2 and 5); or (2) in the event Australia's measure is based on and/or conforms to any such guidelines, whether that part of the measure for which no guidelines exist, is consistent with the provisions of the SPS Agreement other than Article 3 (in casu, Articles 2 and 5). In this respect, we are of the view, however, that the fact that in this case no international guidelines exist for all 24 diseases of concern does not mean that an international guideline which applies to only one of these diseases cannot be relevant (or, according to the language of Article 3.1, does not 'exist') for the measure at issue".(43)

3. Paragraph 2

41. In EC - Hormones, the Appellate Body, in the context of addressing the burden of proof under the SPS Agreement, stated the following in respect of the presumption in Article 3.2:

"The presumption of consistency with relevant provisions of the SPS Agreement that arises under Article 3.2 in respect of measures that conform to international standards may well be an incentive for Members so to conform their SPS measures with such standards. It is clear, however, that a decision of a Member not to conform a particular measure with an international standard does not authorize imposition of a special or generalized burden of proof upon that Member, which may, more often than not, amount to a penalty".(44)

42. In EC - Hormones, the Appellate Body also clarified the meaning of Article 3.2 in discussing the relationship between paragraphs 1, 2 and 3 of Article 3. See paragraph 50 below.

43. Further, the Appellate Body, in interpreting the term "based on" contained in Article 3.1, noted certain requirements for a measure to "conform to" an international standard and that the presumption in Article 3.2 is a rebuttable one. See paragraph 34 above.

4. Paragraph 3

44. In EC - Hormones, the Appellate Body held that the "right of a Member to establish its own level of sanitary protection under Article 3.3 of the SPS Agreement is an autonomous right and not an 'exception' from a 'general obligation' under Article 3.1".(45) In this respect, see also the excerpts from the Appellate Body report referenced in paragraph 50 below.

45. On the different requirements contained in Article 3.3, the Appellate Body in EC - Hormones, distinguished between two different conditions, but ultimately held that Article 3.3 was not "a model of clarity in drafting and communication" and that the distinction between the two conditions was "more apparent than real":

"The right of a Member to define its appropriate level of protection is not, however, an absolute or unqualified right. ...

...

Article 3.3 is evidently not a model of clarity in drafting and communication. The use of the disjunctive 'or' does indicate that two situations are intended to be covered. These are the introduction or maintenance of SPS measures which result in a higher level of protection:

(a) 'if there is a scientific justification'; or

(b) 'as a consequence of the level of ... protection a Member determines to be appropriate in accordance with the relevant provisions of paragraphs 1 through 8 of Article 5'.

It is true that situation (a) does not speak of Articles 5.1 through 5.8. Nevertheless, two points need to be noted. First, the last sentence of Article 3.3 requires that 'all measures which result in a [higher] level of ... protection', that is to say, measures falling within situation (a) as well as those falling within situation (b), be 'not inconsistent with any other provision of [the SPS] Agreement'. 'Any other provision of this Agreement' textually includes Article 5. Secondly, the footnote to Article 3.3, while attached to the end of the first sentence, defines 'scientific justification' as an 'examination and evaluation of available scientific information in conformity with relevant provisions of this Agreement ...'. This examination and evaluation would appear to partake of the nature of the risk assessment required in Article 5.1 and defined in paragraph 4 of Annex A of the SPS Agreement.

On balance, we agree with the Panel's finding that although the European Communities has established for itself a level of protection higher, or more exacting, than the level of protection implied in the relevant Codex standards, guidelines or recommendations, the European Communities was bound to comply with the requirements established in Article 5.1. We are not unaware that this finding tends to suggest that the distinction made in Article 3.3 between two situations may have very limited effects and may, to that extent, be more apparent than real. Its involved and layered language actually leaves us with no choice".(46)

46. Based on its analysis of Article 3.3 referenced in paragraph 45 above, the Appellate Body in EC - Hormones concluded that

"[T]he Panel's finding that the European Communities is required by Article 3.3 to comply with the requirements of Article 5.1 is correct".(47)

47. In Japan - Agricultural Products II, with respect to "scientific justification", the Appellate Body noted as follows:

"In our opinion, there is a 'scientific justification' for an SPS measure, within the meaning of Article 3.3, if there is a rational relationship between the SPS measure at issue and the available scientific information".(48)

5. Paragraph 5

48. With respect to the procedures to monitor the process of international harmonization, see paragraphs 170-171 below.

6. Relationship between paragraphs of Article 3

49. The Panel on EC - Hormones identified a relationship of rule and exception between paragraphs 1, 2 and 3 of Article 3. The Appellate Body disagreed:

"It appears to us that the Panel has misconceived the relationship between Articles 3.1, 3.2 and 3.3, a relationship discussed below, which is qualitatively different from the relationship between, for instance, Articles I or III and Article XX of the GATT 1994. Article 3.1 of the SPS Agreement simply excludes from its scope of application the kinds of situations covered by Article 3.3 of that Agreement, that is, where a Member has projected for itself a higher level of sanitary protection than would be achieved by a measure based on an international standard."(49)

50. The Appellate Body in EC - Hormones distinguished the meaning of paragraphs 1, 2 and 3 in the following terms:

"Under Article 3.2 of the SPS Agreement, a Member may decide to promulgate an SPS measure that conforms to an international standard. Such a measure would embody the international standard completely and, for practical purposes, converts it into a municipal standard. Such a measure enjoys the benefit of a presumption (albeit a rebuttable one) that it is consistent with the relevant provisions of the SPS Agreement and of the GATT 1994.

Under Article 3.1 of the SPS Agreement, a Member may choose to establish an SPS measure that is based on the existing relevant international standard, guideline or recommendation. Such a measure may adopt some, not necessarily all, of the elements of the international standard. The Member imposing this measure does not benefit from the presumption of consistency set up in Article 3.2; ...

Under Article 3.3 of the SPS Agreement, a Member may decide to set for itself a level of protection different from that implicit in the international standard, and to implement or embody that level of protection in a measure not 'based on' the international standard. The Member's appropriate level of protection may be higher than that implied in the international standard. The right of a Member to determine its own appropriate level of sanitary protection is an important right".(50)

7. Relationship with other Articles of the SPS Agreement

51. With respect to the relationship between Articles 3 and Articles 2 and 5, see paragraphs 23-24 above.

V. Article 4 back to top

A. Text of Article 4

Article 4: Equivalence

1. Members shall accept the sanitary or phytosanitary measures of other Members as equivalent, even if these measures differ from their own or from those used by other Members trading in the same product, if the exporting Member objectively demonstrates to the importing Member that its measures achieve the importing Member's appropriate level of sanitary or phytosanitary protection. For this purpose, reasonable access shall be given, upon request, to the importing Member for inspection, testing and other relevant procedures.

2. Members shall, upon request, enter into consultations with the aim of achieving bilateral and multilateral agreements on recognition of the equivalence of specified sanitary or phytosanitary measures.

B. Interpretation and Application of Article 4

(a) Decision on equivalence:

(i) Concept of equivalence

52. At its meeting of 26 October 2001, the SPS Committee adopted a Decision on the Implementation of Article 4 ("Decision on Equivalence").(51) The Preamble of the Decision on Equivalence notes that equivalence requires "acceptance of alternative measures that meet an importing Member's appropriate level of sanitary or phytosanitary protection", but not duplication or "sameness" of measures. Paragraph 1 of the Decision on Equivalence provides:

"1. Equivalence can be accepted for a specific measure or measures related to a certain product or categories of products, or on a systems-wide basis. Members shall, when so requested, seek to accept the equivalence of a measure related to a certain product or category of products. An evaluation of the product-related infrastructure and programmes within which the measure is being applied may also be necessary.(52) Members may further, where necessary and appropriate, seek more comprehensive and broad-ranging agreements on equivalence. The acceptance of the equivalence of a measure related to a single product may not require the development of a systems-wide equivalence agreement."

(ii) Explanation of SPS measures taken by importing Member

53. In order to facilitate the implementation of the provisions of Article 4, the Decision on Equivalence describes the elements to be included in an explanation of the sanitary and phytosanitary measures taken by an importing Member, when so requested by an exporting Member:

"2. In the context of facilitating the implementation of Article 4, on request of the exporting Member, the importing Member should explain the objective and rationale of the sanitary or phytosanitary measure and identify clearly the risks that the relevant measure is intended to address. The importing Member should indicate the appropriate level of protection which its sanitary or phytosanitary measure is designed to achieve(53). The explanation should be accompanied by a copy of the risk assessment on which the sanitary or phytosanitary measure is based or a technical justification based on a relevant international standard, guideline or recommendation. The importing Member should also provide any additional information which may assist the exporting Member to provide an objective demonstration of the equivalence of its own measure."

(iii) Procedure for the recognition of equivalence

54. The Decision on Equivalence provides for a number of requirements and recommendations regarding the procedure to be followed for the recognition of equivalence:

"3. An importing Member shall respond in a timely manner to any request from an exporting Member for consideration of the equivalence of its measures, normally within a six-month period of time.

4. The exporting Member shall provide appropriate science-based and technical information to support its objective demonstration that its measure achieves the appropriate level of protection identified by the importing Member. This information may include, inter alia, reference to relevant international standards, or to relevant risk assessments undertaken by the importing Member or by another Member. In addition, the exporting Member shall provide reasonable access, upon request, to the importing Member for inspection, testing and other relevant procedures for the recognition of equivalence.

...

7. When considering a request for recognition of equivalence, the importing Member should analyze the science-based and technical information provided by the exporting Member on its sanitary or phytosanitary measures with a view to determining whether these measures achieve the level of protection provided by its own relevant sanitary or phytosanitary measures."(54)

Accelerated procedure

55. Paragraph 5 of the Decision on Equivalence provides that "[t]he importing Member should accelerate its procedure for determining equivalence in respect of those products which it has historically imported from the exporting Member."(55)

56. In order to clarify paragraph 5 (and paragraph 6) of the Decision on Equivalence, the SPS Committee adopted another Decision at its meeting on 7-8 November 2002 ("the 7-8 November 2002 Decision")(56). In the latter Decision the SPS Committee notes that the importance of knowledge based on historic trade reasons has been fully recognized by other international organizations and international agencies:

"This information and experience, if directly relevant to the product and measure under consideration, should be taken into account in the recognition of equivalence of measures proposed by the exporting Member. In particular, information already available to the importing Member should not be sought again with respect to procedures to determine the equivalence of measures proposed by the exporting Member."(57)

57. In its 7-8 November 2002 Decision, the SPS Committee requests the Interim Commission on Phytosanitary Measures (ICPM) to take into consideration both the Decision on Equivalence and the Decision clarifying certain aspects of it:

"3. The Committee draws the attention of the Interim Commission on Phytosanitary Measures (ICPM) to the Decision on Equivalence (G/SPS/19), and to the above clarification with respect to Paragraph 5 of the Decision. The Committee requests that the ICPM take into consideration the Decision and this clarification in its future work on judgement of equivalence with regard to sanitary measures to address plant pests and diseases."(58)

Duty not to interrupt or suspend imports

58. Paragraph 6 of the Decision on Equivalence(59) establishes that "a request by an exporting Member for recognition of the equivalence of its measures with regard to a specific product [by an importing Member] shall not be in itself a reason to disrupt or suspend on-going imports from that Member of the product in question."(60)

59. The 7-8 November 2002 Decision of the SPS Committee clarifies paragraph 6 of the Decision on Equivalence as follows:

"[S]ince a request for recognition of equivalence does not in itself alter the way in which trade is occurring, there is no justification for disruption or suspension of trade. If an importing Member were to disrupt or suspend trade solely because it had received a request for an equivalence determination, it would be in apparent violation of its obligations under the SPS Agreement (e.g. under Article 2)."(61)

60. Also in relation to paragraph 6 of the Decision on Equivalence, the 7-8 November 2002 Decision of the SPS Committee provides, however, that a request for recognition of equivalence does not preclude an importing Member from taking measures necessary to achieve the appropriate level of protection:

"[A] request for recognition of equivalence does not impede the right of an importing Member to take any measure it may decide is necessary to achieve its appropriate level of protection, including in response to an emergency situation. However, if the decision to impose some additional control measure were to coincide with consideration by the same Member of a request for recognition of equivalence, this might lead an exporting Member whose trade is affected to suspect that the two events were linked. To avoid any misinterpretation of this kind, the Committee recommends that the importing Member should give an immediate and comprehensive explanation of the reasons for its action in restricting trade to any other Members affected, and that it should also follow the normal or emergency notification procedures established under the SPS Agreement."(62)

Paragraph 7 of G/SPS/19/Add.1 draws the attention of Office International des Epizooties and ICPM to this further clarification.

(iv) Technical assistance

61. Paragraph 8 of the Decision on Equivalence provides further that, in line with Article 9 of the SPS Agreement, Members shall give full consideration to requests for appropriate technical assistance to facilitate the implementation of Article 4, especially when those requests come from developing countries:

"In accordance with Article 9 of the Agreement on the Application of Sanitary and Phytosanitary Measures, a Member shall give full consideration to requests by another Member, especially a developing country Member, for appropriate technical assistance to facilitate the implementation of Article 4. This assistance may, inter alia, be to help an exporting Member identify and implement measures which can be recognized as equivalent, or to otherwise enhance market access opportunities. Such assistance may also be with regard to the development and provision of the appropriate science-based and technical information referred to in paragraph 4, above."(63)

(v) International cooperation outside the WTO

62. In order to improve international cooperation in this sphere outside the WTO, paragraph 9 of the Decision on Equivalence advises active participation of Members in the ongoing work in the Codex Alimentarius Commission and in any work related to equivalence undertaken by the Office International des Epizooties and in the framework of the International Plant Protection Convention.

63. Paragraph 10 of the Decision on Equivalence outlines a number of actions to be taken by the SPS Committee in this regard

"10. The Committee on Sanitary and Phytosanitary Measures recognizes the urgency for the development of guidance on the judgement of equivalence and shall formally encourage the Codex Alimentarius Commission to complete its work with regard to equivalence as expeditiously as possible. The Committee on Sanitary and Phytosanitary Measures shall also formally encourage the Office International des Epizooties and the Interim Commission on Phytosanitary Measures to elaborate guidelines, as appropriate, on equivalence of sanitary and phytosanitary measures and equivalence agreements in the animal health and plant protection areas. The Codex Alimentarius Commission, the Office International des Epizooties and the Interim Commission on Phytosanitary Measures shall be invited to keep the Committee on Sanitary and Phytosanitary Measures regularly informed regarding their activities relating to equivalence."(64)

(vi) Notification

64. In accordance with paragraph 12 of the Decision on Equivalence, Members should regularly inform the SPS Committee of their experiences concerning the implementation of Article 4. In particular, the Decision encourages Members to inform the SPS Committee of the successful conclusion of any bilateral equivalence agreement.(65) As regards the notification procedures, see paragraph 150 below.

(b) Specific programme for the further implementation of Article 4

65. Paragraph 13 of the Decision on Equivalence asks the SPS Committee to develop a specific programme to further the implementation of Article 4, paying particular attention to the problems encountered by developing country Members.(66) At the Doha Ministerial Conference, Members also instructed the SPS Committee to develop the same specific programme.(67) At its meeting of 21 March 2002, the SPS Committee adopted a specific programme for the further implementation of Article 4.(68) The programme established the timetable and the agendas of the meetings for the discussion of the Decision on Equivalence.

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