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WTO ANALYTICAL INDEX: SANITARY AND PHYTOSANITARY MEASURES Agreement on Sanitary and Phytosanitary Measures |
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> Preamble
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Article 5: Assessment of Risk and Determination of the Appropriate Level of Sanitary or Phytosanitary Protection 1. Members shall ensure that their sanitary or phytosanitary measures are based on an assessment, as appropriate to the circumstances, of the risks to human, animal or plant life or health, taking into account risk assessment techniques developed by the relevant international organizations.
2. In the assessment of risks, Members shall take into account available scientific evidence; relevant processes and production methods; relevant inspection, sampling and testing methods; prevalence of specific diseases or pests; existence of pest- or disease-free areas; relevant ecological and environmental conditions; and quarantine or other treatment.
3. In assessing the risk to animal or plant life or health and determining the measure to be applied for achieving the appropriate level of sanitary or phytosanitary protection from such risk, Members shall take into account as relevant economic factors: the potential damage in terms of loss of production or sales in the event of the entry, establishment or spread of a pest or disease; the costs of control or eradication in the territory of the importing Member; and the relative cost-effectiveness of alternative approaches to limiting risks.
4. Members should, when determining the appropriate level of sanitary or phytosanitary protection, take into account the objective of minimizing negative trade effects.
5. With the objective of achieving consistency in the application of the concept of appropriate level of sanitary or phytosanitary protection against risks to human life or health, or to animal and plant life or health, each Member shall avoid arbitrary or unjustifiable distinctions in the levels it considers to be appropriate in different situations, if such distinctions result in discrimination or a disguised restriction on international trade. Members shall cooperate in the Committee, in accordance with paragraphs 1, 2 and 3 of Article 12, to develop guidelines to further the practical implementation of this provision. In developing the guidelines, the Committee shall take into account all relevant factors, including the exceptional character of human health risks to which people voluntarily expose themselves.
6. Without prejudice to paragraph 2 of Article 3, when establishing or maintaining sanitary or phytosanitary measures to achieve the appropriate level of sanitary or phytosanitary protection, Members shall ensure that such measures are not more trade-restrictive than required to achieve their appropriate level of sanitary or phytosanitary protection, taking into account technical and economic feasibility.(3)
(footnote original) 3 For purposes of paragraph 6 of Article 5, a measure is not more trade-restrictive than required unless there is another measure, reasonably available taking into account technical and economic feasibility, that achieves the appropriate level of sanitary or phytosanitary protection and is significantly less restrictive to trade.
7. In cases where relevant scientific evidence is insufficient, a Member may provisionally adopt sanitary or phytosanitary measures on the basis of available pertinent information, including that from the relevant international organizations as well as from sanitary or phytosanitary measures applied by other Members. In such circumstances, Members shall seek to obtain the additional information necessary for a more objective assessment of risk and review the sanitary or phytosanitary measure accordingly within a reasonable period of time.
8. When a Member has reason to believe that a specific sanitary or phytosanitary measure introduced or maintained by another Member is constraining, or has the potential to constrain, its exports and the measure is not based on the relevant international standards, guidelines or recommendations, or such standards, guidelines or recommendations do not exist, an explanation of the reasons for such sanitary or phytosanitary measure may be requested and shall be provided by the Member maintaining the measure.(107)
94. With regards to the role of panels in reviewing whether an SPS measure is based on a risk assessment, the Panels on EC — Hormones, in a finding not addressed by the Appellate Body, stated: “[I]t is for the European Communities to submit evidence before the Panel that its measures are based on a risk assessment; it is not for the Panel itself to conduct its own risk assessment on the basis of scientific evidence gathered by the Panel or submitted by the parties during the Panel proceedings.”(108) 95. The Panel on Australia — Salmon, in a finding not addressed by the Appellate Body, made a similar statement, holding that it did not attempt to conduct its own risk assessment, but merely examined and evaluated evidence: “[W]e stress that in examining this case we did not attempt (nor are we, in our view, allowed) to conduct our own risk assessment or to impose any scientific opinion on Australia. We only examined and evaluated the evidence — including the information we received from the experts advising the Panel — and arguments put before us in light of the relevant WTO provisions and, following the rules on burden of proof set out above, based our findings on this evidence and these arguments.”(109) 96. The Appellate Body on Japan — Apples considered it unnecessary to express its view on the question of whether the conformity of a risk assessment with Article 5.1 should be evaluated solely against the scientific evidence available at the time of the risk assessment, as Japan had failed to establish that the Panel utilized subsequent scientific evidence in evaluating the risk assessment at issue.(110) (b) “based on” an assessment of the risks (i) Taking into account risk assessment techniques 97. In EC — Hormones, the Panel had held that the European Communities’ measure was in violation of Article 5.1 since “the European Communities did not provide any evidence that the studies … or the scientific conclusions reached therein ‘have actually been taken into account by the competent EC institutions either when it enacted those measures (in 1981 and 1988) or at any later point in time’” (emphasis original).(111) The Appellate Body characterized this “minimum procedural element” as “some subjectivity … present in certain individuals” and disagreed with this standard: “We are bound to note that, as the Panel itself acknowledges, no textual basis exists in Article 5 of the SPS Agreement for such a ‘minimum procedural requirement’. The term ‘based on’, when applied as a ‘minimum procedural requirement’ by the Panel, may be seen to refer to a human action, such as particular human individuals ‘taking into account’ a document described as a risk assessment. Thus, ‘take into account’ is apparently used by the Panel to refer to some subjectivity which, at some time, may be present in particular individuals but that, in the end, may be totally rejected by those individuals. We believe that ‘based on’ is appropriately taken to refer to a certain objective relationship between two elements, that is to say, to an objective situation that persists and is observable between an SPS measure and a risk assessment. Such a reference is certainly embraced in the ordinary meaning of the words ‘based on’ and, when considered in context and in the light of the object and purpose of Article 5.1 of the SPS Agreement, may be seen to be more appropriate than ‘taking into account’. We do not share the Panel’s interpretative construction and believe it is unnecessary and an error of law as well.
Article 5.1 …. only requires that the SPS measures be ‘based on an assessment, as appropriate for the circumstances …’. The ‘minimum procedural requirement’ constructed by the Panel, could well lead to the elimination or disregard of available scientific evidence that rationally supports the SPS measure being examined. This risk of exclusion of available scientific evidence may be particularly significant for the bulk of SPS measures which were put in place before the effective date of the WTO Agreement and that have been simply maintained thereafter.”(112) (ii) Rational relationship between the SPS measure and the risk assessment 98. The Appellate Body on EC — Hormones held that the requirement of Article 5.1 — that an SPS measure be “based on” a risk assessment — was a substantive requirement that “there be a rational relationship between the measure and the risk assessment”: “We consider that, in principle, the Panels’ approach of examining the scientific conclusions implicit in the SPS measure under consideration and the scientific conclusion yielded by a risk assessment is a useful approach. The relationship between those two sets of conclusions is certainly relevant; they cannot, however, be assigned relevance to the exclusion of everything else. We believe that Article 5.1, when contextually read as it should be, in conjunction with and as informed by Article 2.2 of the SPS Agreement, requires that the results of the risk assessment must sufficiently warrant — that is to say, reasonably support — the SPS measure at stake. The requirement that an SPS measure be ‘based on’ a risk assessment is a substantive requirement that there be a rational relationship between the measure and the risk assessment.
We do not believe that a risk assessment has to come to a monolithic conclusion that coincides with the scientific conclusion or view implicit in the SPS measure. The risk assessment could set out both the prevailing view representing the ‘mainstream’ of scientific opinion, as well as the opinions of scientists taking a divergent view. Article 5.1 does not require that the risk assessment must necessarily embody only the view of a majority of the relevant scientific community. … In most cases, responsible and representative governments tend to base their legislative and administrative measures on ‘mainstream’ scientific opinion. In other cases, equally responsible and representative governments may act in good faith on the basis of what, at a given time, may be a divergent opinion coming from qualified and respected sources. By itself, this does not necessarily signal the absence of a reasonable relationship between the SPS measure and the risk assessment, especially where the risk involved is lifethreatening in character and is perceived to constitute a clear and imminent threat to public health and safety”(113) (iii) Determination of relationship on “a case-by-case” basis 99. The Appellate Body on EC — Hormones also noted that determination of the presence or absence of that relationship can only be done on a case-by-case basis, after account is taken of all considerations rationally bearing upon the issue of potential adverse health effects.(114) 100. The Appellate Body on EC — Hormones, when addressing the requirements under Article 3.3, also considered the object and purpose of Article 3 and of the SPS Agreement as a whole and noted its “belief that compliance with Article 5.1 was intended as a countervailing factor in respect of the right of Members to set their appropriate level of protection … The requirements of a risk assessment under Article 5.1, … 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.”(115) 101. In Australia — Salmon, the Appellate Body held that the presence of unknown and uncertain elements did not affect the requirements of Articles 5.1, 5.2 and 5.3: “[T]he existence of unknown and uncertain elements does not justify a departure from the requirements of Articles 5.1, 5.2 and 5.3, read together with paragraph 4 of Annex A, for a risk assessment. We recall that Article 5.2 requires that ‘in the assessment of risk, Members shall take into account available scientific evidence’. We further recall that Article 2, entitled ‘Basic Rights and Obligations’, requires in paragraph 2 that ‘Members shall ensure that any sanitary … measure … is based on scientific principles and is not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5’.”(116) (ii) Concept of risk assessment versus risk management 102. The Appellate Body on EC — Hormones rejected the distinction between “risk assessment” and “risk management” used by the original Panel in its findings under Article 5.1: “The Panel observed that an assessment of risk is, at least with respect to risks to human life and health, a ‘scientific’ examination of data and factual studies; it is not, in the view of the Panel, a ‘policy’ exercise involving social value judgments made by political bodies.(117) The Panel describes the latter as ‘non-scientific’ and as pertaining to ‘risk management’ rather than to ‘risk assessment’.(118) We must stress, in this connection, that Article 5 and Annex A of the SPS Agreement speak of ‘risk assessment’ only and that the term ‘risk management’ is not to be found either in Article 5 or in any other provision of the SPS Agreement. Thus, the Panel’s distinction, which it apparently employs to achieve or support what appears to be a restrictive notion of risk assessment, has no textual basis. The fundamental rule of treaty interpretation requires a treaty interpreter to read and interpret the words actually used by the agreement under examination, and not words which the interpreter may feel should have been used.”(119) (iii) Three aspects of risk assessment 103. In Australia — Salmon, the Appellate Body identified three aspects of a risk assessment: “On the basis of [the] definition [prescribed in the first part of paragraph 4 of Annex A], we consider that, in this case, a risk assessment within the meaning of Article 5.1 must:
(1) identify the diseases whose entry, establishment or spread a Member wants to prevent within its territory, as well as the potential biological and economic consequences associated with the entry, establishment or spread of these diseases;
(2) evaluate the likelihood of entry, establishment or spread of these diseases, as well as the associated potential biological and economic consequences; and
(3) evaluate the likelihood of entry, establishment or spread of these diseases according to the SPS measures which might be applied.”(120) (iv) Completing the analysis of a risk assessment 104. The Panel on Australia — Salmon found that the Australian heat treatment requirement was not “based on” a risk assessment within the meaning of Article 5.1, because the Final Report (the risk assessment) made “no substantive assessment of the risk or the risk reduction related to the heat requirements in effect imposed by the measure at issue” … but stated that “there is insufficient data on whether or not heat treatment inactivates the disease agents in dispute”. (121) The Appellate Body, reversed this finding(122) and completed the analysis by examining whether the import prohibition on fresh, chilled and frozen salmon was based on a risk assessment. It found that the 1996 Final Report did not fulfil the requirements needed to constitute a “risk assessment” within the meaning of Article 5.1:(123) “Applying our three-pronged test set out in paragraph 128 above, to the 1996 Final Report in order to determine whether that Report meets the requirements of a risk assessment within the meaning of Article 5.1 and the first definition in paragraph 4 of Annex A, we note that the Panel found that the 1996 Final Report identifies the diseases whose entry, establishment or spread Australia wants to prevent as well as the potential biological and economic consequences associated with the entry, establishment or spread of such diseases. The Panel, therefore, concluded that ‘the 1996 Final Report meets the first requirement of a risk assessment’.(124) We agree with the Panel.
With regard to the second requirement for a risk assessment of the type applicable in this case … We believe … that on the basis of the facts found by the Panel, it could, and should, have come to the conclusion that the 1996 Final Report does not contain the ‘evaluation of the likelihood of entry, establishment or spread’ of the diseases of concern ‘and of the associated potential biological and economic consequences’ as required by paragraph 4 of Annex A of the SPS Agreement. As we have already emphasized, some evaluation of the likelihood is not enough.(125)
… We turn now to the third requirement of a risk assessment … We agree with the Panel that the measures which might be applied are those which reduce the risks of concern, and are referred to in the 1996 Final Report as risk reduction factors …On the basis of its factual findings, the Panel should have come to the conclusion that the 1996 Final Report does not fulfil the third requirement for the type of risk assessment applicable in this case, i.e., it does not contain the required evaluation of the likelihood of entry, establishment or spread of the diseases of concern according to the SPS measures which might be applied. We recall that, contrary to the Panel, we consider that some evaluation of the likelihood is not enough.(126)
We conclude, on the basis of the factual findings made by the Panel and the requirements for a risk assessment as set forth above, that the 1996 Final Report meets neither the second nor the third requirement for the type of risk assessment applicable in this case, and, therefore, that the 1996 Final Report is not a proper risk assessment within the meaning of Article 5.1 and the first definition in paragraph 4 of Annex A.”(127) 105. Regarding the definition of risk assessment within the meaning of Annex A paragraph 4, see Section XVI.B.2 below. (v) Scope of the risk assessment Assessment of each individual substance 106. In EC — Hormones, the Appellate Body upheld the Panel’s finding that “there was no risk assessment with regard to MGA”(128), one of the six growth hormones at issue, stating that “[i]n other words, there was an almost complete absence of evidence on MGA in the panel proceedings.”(129) On this point, the Panels had explained that “one of the basic principles of a risk assessment appears to be that it needs to be carried out for each individual substance.”(130) 107. The Panel on Australia — Salmon held that studies on one particular product category could be relevant for a risk assessment in respect of another product category: “We do, however, agree with Australia that some of the evidence, assessments and conclusions contained in the 1996 Final Report might be relevant for the risk assessment to be carried out (or relied upon) for the other categories of salmon products and that, therefore, a completely new risk assessment for these other categories of salmon products might not be necessary”.(131) (vi) Studies not sufficiently specific to the case at hand 108. The Appellate Body on EC — Hormones also rejected certain studies submitted by the European Communities as risk assessment for the purpose of Article 5.1, holding that these studies were general and “not sufficiently specific to the case at hand”: “[The studies submitted by the respondent] constitute general studies which do indeed show the existence of a general risk of cancer; but they do not focus on and do not address the particular kind of risk here at stake — the carcinogenic or genotoxic potential of the residues of those hormones found in meat derived from cattle to which the hormones had been administered for growth promotion purposes — as is required by paragraph 4 of Annex A of the SPS Agreement. Those general studies, are in other words, relevant but do not appear to be sufficiently specific to the case at hand”.(132) (vii) Who should carry out the risk assessment? 109. In EC — Hormones, the Appellate Body addressed the question of whether a Member should carry out its own risk assessment for a SPS measure: “Article 5.1 does not insist that a Member that adopts a sanitary measure shall have carried out its own risk assessment … The SPS measure might well find its objective justification in a risk assessment carried out by another Member, or an international organization”.(133) (viii) Format of the risk assessment 110. The Panel on Australia — Salmon held that a risk assessment need not be an official government report: “We note that these reports do not form part of Australia’s formal risk assessment nor represent Australia’s official government policy. However, to the extent they constitute relevant available scientific information which was submitted to the Panel, we consider it our task to take this evidence into account. We consider that, for purposes of our examination, the scientific and technical content of these reports and studies is relevant, not their administrative status (i.e., whether they are official government reports or not).
… Whether or not this evidence is part of official Australian government policy does not, in our mind, change the scientific weight to be given to it”.(134) (ix) Relevance of the timing of publication of risk assessment 111. With respect to the risk assessment requirement for SPS measures enacted before the entry into force of the SPS Agreement, the Panel on EC — Hormones noted: “[Article 5.1] does not prevent that with respect to a sanitary measure enacted before the entry into force of the SPS Agreement, the risk assessment is carried out or invoked after the entry into force of that Agreement (and thus after the enactment of the sanitary measure in question). However, the fact that a sanitary measure may be enacted before the entry into force of the SPS Agreement does not mean that, once the SPS Agreement entered into force, there is no obligation for the Member in question to base that measure on a risk assessment.”(135) 112. The Panel on Australia — Salmon while addressing Canada’s complaint that Australia’s measure was maintained without any form of risk assessment added in this respect: “Article 5.1 does not qualify — either in terms of application in time or product coverage — the substantive obligation imposed on all WTO Members to base their sanitary measures on a risk assessment. … We note Australia’s statement that its policy of allowing imports of salmon products heat-treated in accordance with the 1988 Conditions will be reviewed and that for these purposes an import risk analysis is scheduled. It is possible that this risk analysis provides a rational basis for the measure at issue. However, as of today and on the basis of the risk assessment before us, we do not detect such basis.”(136) 113. In Australia — Salmon (Article 21.5 — Canada), Canada claimed that the new Australian measures could not be said to be based on a risk assessment, because the 1999 Import Risk Analysis (IRA) (the Australian risk assessment for the amended measure) was only published in its final form on 12 November 1999, i.e. after the publication of the new measures which had occurred on 19 July 1999. The Panel rejected this argument as follows: “We note that the final form of the 1999 IRA, though only edited and published in book form on 12 November 1999, is still dated July 1999 and that … the amendments made in the final 1999 IRA ‘do not alter the substance or the conclusions of the report as announced on 19 July’.
On these grounds, we find that the fact that the 1999 IRA was only published in final form subsequent to the date the new sanitary measures were taken, does not, in this case, preclude the measures from being based on the 1999 IRA. All substantive elements of the risk assessment we looked at earlier were already included in the draft 1999 IRA of July 1999, i.e. before the new measures were taken.”(137) (x) Identifying the SPS measure 114. The Panel on Australia — Salmon defined the sanitary measure enacted by Australia to be an import prohibition on, inter alia, fresh, chilled and frozen salmon. The Panel then went on to state that the measure effectively imposed heat treatment “as a sanitary solution to the risk posed by the importation of salmon” and concluded that “these two perspectives [the import prohibition on fresh, chilled and frozen salmon and the heat treatment requirement] are two sides of a single coin: a consequence of Australia’s sanitary requirement that salmon be heattreated before it can be imported, is that imports of fresh, chilled and frozen salmon are prohibited”.(138) The Appellate Body disagreed with this characterization of the Australian measure: “In our view, the SPS measure at issue in this dispute can only be the measure which is actually applied to the product at issue. The product at issue is fresh, chilled or frozen salmon and the SPS measure applicable to fresh, chilled or frozen salmon is the import prohibition set forth in QP86A. The heat-treatment requirement provided for in the 1988 Conditions applies only to smoked salmon and salmon roe, not to fresh, chilled or frozen salmon.
We also do not share the Panel’s view that the import prohibition and the heat-treatment requirement are ‘two sides of the same coin’. Smoked salmon and fresh, chilled or frozen salmon are different products and the SPS measures applied to each are not ‘two sides of the same coin’. We agree with Australia that it is not a consequence of the requirement that smoked salmon be heat-treated that imports of fresh, chilled or frozen salmon are prohibited. Imports of fresh, chilled or frozen salmon are prohibited as a direct consequence of the application of QP86A, and this prohibition has not been revoked, but has, in fact, been continuously maintained since 1975. We likewise do not share the Panel’s view that the 1996 Requirements apply to fresh, chilled or frozen salmon. These requirements clearly apply only to imports of small amounts of smoked salmon.”(139) (xi) Evaluation of risk in a risk assessment (“Zero risk”) 115. The Panel on Australia — Salmon held that “a risk assessment, on which to base an import prohibition in accordance with Article 5.1, cannot be premised on the concept of ‘zero risk’. Otherwise, all import prohibitions would be based on a risk assessment since there is a risk (i.e., a possibility of an adverse event occurring), however remote, associated with most (if not all) imports”.(140) On appeal, the Appellate Body emphasized the distinction between risk assessment under Article 5.1 and the determination, by a Member, of its own appropriate level of protection: “[I]t is important to distinguish — perhaps more carefully than the Panel did — between the evaluation of ‘risk’ in a risk assessment and the determination of the appropriate level of protection. As stated in our Report in European Communities — Hormones, the ‘risk’ evaluated in a risk assessment must be an ascertainable risk; theoretical uncertainty is ‘not the kind of risk which, under Article 5.1, is to be assessed.’ This does not mean, however, that a Member cannot determine its own appropriate level of protection to be ‘zero risk’.”(141) (xii) No threshold level of risk required 116. In EC — Hormones, the Appellate Body addressed the European Communities’ appeal that the original Panel was “in effect requiring a Member carrying out a risk assessment to quantify the potential for adverse effects on human health”.(142) The Appellate Body elaborated on the term “scientifically identified risk” that the Panel had employed and the notion of “theoretical uncertainty” in the context of Article 5.1. The Appellate Body indicated that Article 5.1 does not address theoretical uncertainty: that is to say, “uncertainty that theoretically always remains since science can never provide absolute certainty that a given substance will not ever have adverse health effects”: “It is not clear in what sense the Panel uses the term scientifically identified risk’. The Panel also frequently uses the term ‘identifiable risk’(143), and does not define this term either. The Panel might arguably have used the terms ‘scientifically identified risk’ and ‘identifiable risk’ simply to refer to an ascertainable risk: if a risk is not ascertainable, how does a Member ever know or demonstrate that it exists? In one part of its Reports, the Panel opposes a requirement of an ‘identifiable risk’ to the uncertainty that theoretically always remains since science can never provide absolute certainty that a given substance will not ever have adverse health effects.(144) We agree with the Panel that this theoretical uncertainty is not the kind of risk which, under Article 5.1, is to be assessed. In another part of its Reports, however, the Panel appeared to be using the term ‘scientifically identified risk’ to prescribe implicitly that a certain magnitude or threshold level of risk be demonstrated in a risk assessment if an SPS measure based thereon is to be regarded as consistent with Article 5.1.(145) To the extent that the Panel purported to require a risk assessment to establish a minimum magnitude of risk, we must note that imposition of such a quantitative requirement finds no basis in the SPS Agreement. A panel is authorized only to determine whether a given SPS measure is ‘based on’ a risk assessment. As will be elaborated below, this means that a panel has to determine whether an SPS measure is sufficiently supported or reasonably warranted by the risk assessment.”(146) 117. In Japan — Apples, the Appellate Body agreed with the Panel that “scientific prudence” displayed by the experts in this case did not relate to the “theoretical uncertainty” that is inherent in the scientific method: “The comments of the Panel in response to the argument of the United States on ‘theoretical risk’ should be viewed in their appropriate context. … We understand that the ‘scientific prudence’ displayed by the experts in this case related to risks that might arise from radical changes in Japan’s current system of phytosanitary controls, taking into account Japan’s island environment and climate. The scientific prudence displayed by the experts did not relate to the ‘theoretical uncertainty’ that is inherent in the scientific method and which stems from the intrinsic limits of experiments, methodologies, or instruments deployed by scientists to explain a given phenomenon. Therefore, we agree with the Panel that the scientific prudence displayed by the experts should not be ‘completely assimilated’ to the ‘theoretical uncertainty’ that the Appellate Body discussed in EC — Hormones as being beyond the purview of risks to be addressed by measures subject to the SPS Agreement …”(147) (d) “as appropriate to the circumstances” 118. When addressing the applicability of the SPS Agreement to measures adopted before the entry into force of the WTO Agreement the Appellate Body on EC — Hormones noted that the phrase “as appropriate to the circumstances” provides for a certain degree of flexibility: “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.”(148) 119. The Panel on Australia — Salmon held that the phrase “as appropriate to the circumstances” created the possibility “to assess the risk, on a case-by-case basis, in terms of product, origin and destination, including, in particular, country-specific situations”: “Following Article 5.1, a risk assessment needs to be ‘appropriate to the circumstances’. Answering a Panel question in this respect, Canada is of the view that the circumstances thus referred to are the source of the risk (e.g., an animal pathogen or a chemical contaminant) and the subject of the risk (i.e., whether it is to human, animal or plant life or health). For Australia, the phrase ‘as appropriate to the circumstances’ confers a right and obligation on WTO Members to assess the risk, on a case by case basis, in terms of product, origin and destination, including, in particular, country specific situations. We agree that both interpretations may be covered by the term ‘as appropriate to the circumstances’. In our view, also the OIE risk assessment techniques as well as the scientific opinions we gathered, may shed light on what is a risk assessment ‘appropriate to the circumstances’.”(149) (ii) Does not waive duty of risk assessment 120. The Panel on Australia — Salmon held that the phrase “as appropriate to the circumstances” did not alleviate the duty to base a measure on a risk assessment: “As to the product coverage of Article 5.1, the reference contained in Article 5.1 to base sanitary measures on an assessment ‘as appropriate to the circumstances’ cannot, in our view, annul or supersede the substantive obligation resting on Australia to base the sanitary measure in dispute (irrespective of the products that measure may cover) on a risk assessment. We consider that the reference ‘as appropriate to the circumstances’ relates, rather, to the way in which such risk assessment has to be carried out.(150) Only Article 5.7 allows for an exception to the obligation to base sanitary measures on a risk assessment.”(151) (e) Taking into account risk assessment techniques (i) Mention of scientific studies in preambular sections of the domestic directives 121. The Appellate Body on EC — Hormones disagreed with the Panel’s finding that certain scientific studies were not taken into consideration, inter alia, because these studies were not mentioned in the preambles to the relevant European Communities’ directives: “In the course of demanding evidence that EC authorities actually ‘took into account’ certain scientific studies, the Panel refers to the preambles of the EC Directives here involved. The Panel notes that such preambles did not mention any of the scientific studies referred to by the European Communities in the panel proceedings. Preambles of legislative or quasi-legislative acts and administrative regulations commonly fulfil requirements of the internal legal orders of WTO Members. Such preambles are certainly not required by the SPS Agreement; they are not normally used to demonstrate that a Member has complied with its obligations under international agreements. The absence of any mention of scientific studies in the preliminary sections of the EC Directives does not, therefore, prove anything so far as the present case is concerned”.(152) (f) Relationship with other paragraphs of Article 5 122. For discussion on the risk factors to be taken into account, see Section VI.B.2(a) below. 123. On the relationship between Articles 5.1 and 5.5, the Panel on Australia — Salmon stated that “the obligations contained in Article 5.1 (risk assessment) and Article 5.5 are complementary, not mutually exclusive. We consider, therefore, that a WTO Member cannot justify the inconsistency with one Article on the ground that such inconsistency avoids an additional inconsistency with another Article.”(153) (g) Relationship with other Articles 124. As relates to the applicability of the SPS Agreement to measures adopted before 1 January 1995 and measures adopted since, see paragraph 5 above. (a) Risk factors to be taken into account (i) Risk ascertainable by scientific and non scientific processes 125. With respect to the risk factors to be examined in the context of a risk assessment, the Appellate Body on EC — Hormones agreed with the Panel’s emphasis of the scientific nature of risk assessment, but added a qualification on the nature of the “risk”: “The listing in Article 5.2 begins with ‘available scientific evidence’; this, however, is only the beginning. We note in this connection that the Panel states that, for purposes of the EC measures in dispute, a risk assessment required by Article 5.1 is ‘a scientific process aimed at establishing the scientific basis for the sanitary measure a Member intends to take’.(154) To the extent that the Panel intended to refer to a process characterized by systematic, disciplined and objective enquiry and analysis, that is, a mode of studying and sorting out facts and opinions, the Panel’s statement is unexceptionable. However, to the extent that the Panel purports to exclude from the scope of a risk assessment in the sense of Article 5.1, all matters not susceptible of quantitative analysis by the empirical or experimental laboratory methods commonly associated with the physical sciences, we believe that the Panel is in error. Some of the kinds of factors listed in Article 5.2 such as ‘relevant processes and production methods’ and ‘relevant inspection, sampling and testing methods’ are not necessarily or wholly susceptible of investigation according to laboratory methods of, for example, biochemistry or pharmacology. Furthermore, there is nothing to indicate that the listing of factors that may be taken into account in a risk assessment of Article 5.2 was intended to be a closed list. It is essential to bear in mind that the risk that is to be evaluated in a risk assessment under Article 5.1 is not only risk ascertainable in a science laboratory operating under strictly controlled conditions, but also risk in human societies as they actually exist, in other words, the actual potential for adverse effects on human health in the real world where people live and work and die.”(155) (ii) Risks arising from control of compliance with certain requirements 126. Having held that “risk assessment” did not only refer to the risk ascertainable in a science laboratory operating under strictly controlled conditions, the Appellate Body on EC — Hormones considered that, for instance, risks arising from difficulties of control of compliance with certain requirements could be taken into account in the context of a risk assessment: “It should be recalled that Article 5.2 states that in the assessment of risks, Members shall take into account, in addition to ‘available scientific evidence’, ‘relevant processes and production methods; [and] relevant inspection, sampling and testing methods’. We note also that Article 8 requires Members to ‘observe the provisions of Annex C in the operation of control, inspection and approval procedures …’. The footnote in Annex C states that ‘control, inspection and approval procedures include, inter alia, procedures for sampling, testing and certification’. We consider that this language is amply sufficient to authorize the taking into account of risks arising from failure to comply with the requirements of good veterinary practice in the administration of hormones for growth promotion purposes, as well as risks arising from difficulties of control, inspection and enforcement of the requirements of good veterinary practice.”(156) (iii) Risks arising from abuse of controlled substances not to be excluded on an a priori basis 127. The Appellate Body on EC — Hormones added a caveat to its finding referred to in paragraphs 126 above. It held that risks arising from the potential abuse of controlled substances in practice need not necessarily be taken into account in each and every case; it explained that its findings in paragraphs 126 above were to be interpreted as meaning that such types of risk should not be excluded a priori: “[T]he SPS Agreement requires assessment of the potential for adverse effects on human health arising from the presence of contaminants and toxins in food. We consider that the object and purpose of the SPS Agreement justify the examination and evaluation of all such risks for human health whatever their precise and immediate origin may be. We do not mean to suggest that risks arising from potential abuse in the administration of controlled substances and from control problems need to be, or should be, evaluated by risk assessors in each and every case. When and if risks of these types do in fact arise, risk assessors may examine and evaluate them. Clearly, the necessity or propriety of examination and evaluation of such risks would have to be addressed on a case-by-case basis. What, in our view is a fundamental legal error is to exclude, on an a priori basis, any such risks from the scope of application of Articles 5.1 and 5.2.”(157) (b) Relationship with other Articles 128. In Australia — Salmon, the Appellate Body agreed(158) with the finding of the Panel, whereby the Panel held that a violation of Article 5.1 or 5.2 would imply a violation of the more general provision of Article 2.2: “Articles 5.1 and 5.2 — in the words of the Appellate Body in EC — Hormones when dealing with the relationship between Articles 2.3 and 5.5 — ‘may be seen to be marking out and elaborating a particular route leading to the same destination set out in’ Article 2.2. Indeed, in the event a sanitary measure is not based on a risk assessment as required in Articles 5.1 and 5.2, this measure can be presumed, more generally, not to be based on scientific principles or to be maintained without sufficient scientific evidence. We conclude, therefore, that if we find a violation of the more specific Article 5.1 or 5.2 such finding can be presumed to imply a violation of the more general provisions of Article 2.2. We do recognize, at the same time, that given the more general character of Article 2.2 not all violations of Article 2.2 are covered by Articles 5.1 and 5.2.”(159) 129. In assessing risk and determining the measure to be applied, the Appellate Body on Australia — Salmon noted that the presence of unknown and uncertain elements does not affect the requirements under Article 5.3. See paragraph 101 above. 130. The Panel on EC — Hormones, in a finding not reviewed by the Appellate Body, held that Article 5.4 was of an hortatory nature: “Guided by the wording of Article 5.4, in particular the words ‘should’ (not ‘shall’) and ‘objective’, we consider that this provision of the SPS Agreement does not impose an obligation. However, this objective of minimizing negative trade effects has nonetheless to be taken into account in the interpretation of other provisions of the SPS Agreement.”(160) (b) Relationship with other paragraphs of Article 5 131. In Australia — Salmon, the Appellate Body determined that the SPS Agreement contains an implicit obligation that WTO Members determine their appropriate level of protection.(161) See paragraph 151 below. 132. While examining whether Australia imposed different levels of protection in respect of “different situations” in the sense of Article 5.5, the Panel addressed an argument made by Australia, the responding party, that for a situation to be so compared, a risk assessment in respect of it would need to have been carried out. The Panel emphasized that it could not conduct its own risk assessment, but rather had to weigh the evidence before it: “We cannot conduct our own risk assessment. Nor do we attempt to do so in this report. The fact that one of the experts advising the Panel stated that ‘if you are trying to say which [of two products] is the most risky, then you need to know something about and possibly do a full assessment for [the other] product’ and that ‘it would be sensible to assess that which you have prioritized initially to have the highest risk first, but until you have done the risk assessment, you actually cannot be sure you have got that right’, does not change our position. Nor do we disagree with these statements. Indeed, for a scientist to say with scientific certainty that one product represents a higher risk than the other, there may be a need to have two, more or less, complete sets of data, including two risk assessments. And even on that basis a scientist would probably not be able to state with absolute certainty that one product is riskier than the other. Our mandate is different. We are not asked to make a scientific risk comparison nor to state with scientific certainty that one product is riskier than the other. We can only weigh the evidence put before us and, on the basis of the rules of burden of proof we adopted, including the use of factual presumptions, decide whether sufficient evidence is before us — evidence which has not been rebutted — in order to state that it can be presumed that one product is riskier than the other.”(162) (b) Cumulative elements of Article 5.5 133. In EC — Hormones, the Appellate Body considered the three elements of Article 5.5 and held that these elements were cumulative in nature. It emphasized in particular, that the third element, should be demonstrated positively and independently of the second element: “The first element is that the Member imposing the measure complained of has adopted its own appropriate levels of sanitary protection against risks to human life or health in several different situations. The second element to be shown is that those levels of protection exhibit arbitrary or unjustifiable differences (‘distinctions’ in the language of Article 5.5) in their treatment of different situations. The last element requires that the arbitrary or unjustifiable differences result in discrimination or a disguised restriction of international trade. We understand the last element to be referring to the measure embodying or implementing a particular level of protection as resulting, in its application, in discrimination or a disguised restriction on international trade. …
We consider the above three elements of Article 5.5 to be cumulative in nature; all of them must be demonstrated to be present if violation of Article 5.5 is to be found. In particular, both the second and third elements must be found. The second element alone would not suffice. The third element must also be demonstrably present: the implementing measure must be shown to be applied in such a manner as to result in discrimination or a disguised restriction on international trade. The presence of the second element — the arbitrary or unjustifiable character of differences in levels of protection considered by a Member as appropriate in differing situations — may in practical effect operate as a ‘warning’ signal that the implementing measure in its application might be a discriminatory measure or might be a restriction on international trade disguised as an SPS measure for the protection of human life or health. Nevertheless, the measure itself needs to be examined and appraised and, in the context of the differing levels of protection, shown to result in discrimination or a disguised restriction on international trade.”(163) (c) “appropriate level of protection” (i) Legal status of the first part of Article 5.5 134. In EC — Hormones, with respect to the first part of Article 5.5, the Appellate Body held that the statement of the goal of consistency did not establish a legal obligation of consistency of appropriate levels of protection. Rather, only certain types of inconsistencies were to be avoided: “The objective of Article 5.5 is formulated as the ‘achieving [of] consistency in the application of the concept of appropriate level of sanitary or phytosanitary protection’. Clearly, the desired consistency is defined as a goal to be achieved in the future. To assist in the realization of that objective, the Committee on Sanitary and Phytosanitary Measures is to develop guidelines for the practical implementation of Article 5.5, bearing in mind, among other things, that ordinarily, people do not voluntarily expose themselves to health risks. Thus, we agree with the Panel’s view that the statement of that goal [consistency] does not establish a legal obligation of consistency of appropriate levels of protection. We think, too, that the goal set is not absolute or perfect consistency, since governments establish their appropriate levels of protection frequently on an ad hoc basis and over time, as different risks present themselves at different times. It is only arbitrary or unjustifiable inconsistencies that are to be avoided.”(164) (ii) “distinctions in the levels of protection in different situations” 135. The Panel on EC — Hormones found that the “different situations” that can be compared under Article 5.5 were situations “where the same substance or the same adverse health effect is involved”.(165) On appeal, the Appellate Body stated: “Clearly, comparison of several levels of sanitary protection deemed appropriate by a Member is necessary if a panel’s inquiry under Article 5.5 is to proceed at all. The situations exhibiting differing levels of protection cannot, of course, be compared unless they are comparable, that is, unless they present some common element or elements sufficient to render them comparable. If the situations proposed to be examined are totally different from one another, they would not be rationally comparable and the differences in levels of protection cannot be examined for arbitrariness.”(166) 136. In Australia — Salmon, the Appellate Body held that comparable situations under Article 5.5 were those where either the same or a similar disease, or where the same biological and economic consequences were involved: “Situations which involve a risk of entry, establishment or spread of the same or a similar disease have some common elements sufficient to render them comparable under Article 5.5. Likewise, situations with a risk of the same or similar associated potential biological and economic consequences also have some common elements sufficient to render them comparable under Article 5.5. We, therefore, consider that for ‘different’ situations to be comparable under Article 5.5, there is no need for both the disease and the biological and economic consequences to be the same or similar.”(167)
Level of protection as reflected in SPS Measures 137. The Panel on Australia — Salmon, addressed the question of how to ascertain the level of sanitary protection chosen by a Member. The Panel found that this level of sanitary protection will be reflected in the sanitary measure itself, but noted that “imposing the same sanitary measure for different situations does not necessarily result in the same level of protection”.(168) The Appellate Body did not disagree with these statements in particular, but reversed the Panel’s related findings, because it disagreed with the statement by the Panel that “the level of protection implied or reflected in a sanitary measure or regime imposed by a WTO Member can be presumed to be at least as high as the level of protection considered to be appropriate by that Member.”(169) 138. In response to Australia’s argument that a “situation” cannot be compared under Article 5.5 if no risk assessment has been made in respect of it, the Panel on Australia — Salmon, in a finding not reviewed by the Appellate Body, found that since Australia had a sanitary regime to address situations in respect of which no risk assessment existed, a level of protection existed: “[W]e consider that even though Australia has not yet conducted import risk analyses for the other products compared under Article 5.5, Australia does, nevertheless, have a level of protection it considers to be appropriate for these other products. Australia currently has a sanitary regime, imposing specific sanitary measures or refraining from such regulation, for these other products. This sanitary regime (whether or not specific measures are enacted) reflects a level of protection. To have a specific level of protection, there is no need to first complete a risk assessment … Article 5.5 directs us to compare for different situations the related levels of protection as they are currently considered to be appropriate by Australia and this whether or not the sanitary measures enacted to achieve that level are based on a risk assessment. Of course, such comparison would be easier and more accurate if for both situations an appropriate risk assessment were available. However, according to Article 5.5 and our mandate set out in Article 11 of the DSU (to make an ‘objective assessment of the matter before [us], including an objective assessment of the facts of the case’), we are called upon in this case to make this comparison and to do so on the basis of the evidence before us.”(170) (iii) “Arbitrary or unjustifiable” distinctions in levels of protection 139. The Panel on EC — Hormones found arbitrary or unjustifiable distinction in the level of protection in the European Communities’ regulation in that while the European Communities prohibited added natural hormones with respect to beef, it did not attempt to limit naturally occurring hormones.(171) The Appellate Body disagreed: “We do not share the Panel’s conclusions that the above differences in levels of protection in respect of added hormones in treated meat and in respect of naturally occurring hormones in food, are merely arbitrary and unjustifiable. We consider there is a fundamental distinction between added hormones (natural or synthetic) and naturally-occurring hormones in meat and other foods. In respect of the latter, the European Communities simply takes no regulatory action; to require it to prohibit totally the production and consumption of such foods or to limit the residues of naturally-occurring hormones in food, entails such a comprehensive and massive governmental intervention in nature and in the ordinary lives of people as to reduce the comparison itself to an absurdity.”(172) (iv) Distinctions which “result in discrimination or a disguised restriction on international trade” Factors that result in a disguised restriction on international trade 140. The Panel on Australia — Salmon found three “warning signals” and three “other factors more substantial in nature” with respect to the issue of whether there was a disguised restriction on trade arising from the distinct levels of protection existing in Australia. The three warning signals that the Panel indicated were: (1) “the arbitrary character of the Differences in levels of protection”(173); (2) “the rather substantial difference in levels of protection”(174); and (3) its earlier “two findings of inconsistency (with both Article 5.1 and 2.2)” which make it “seem that the measure at issue constitutes an import prohibition, i.e., a restriction on international trade, ‘disguised’ as a sanitary measure”.(175) The three “other factors” were: (1) Australia was applying two different implementing measures to products which represented the same risk, leading to discrimination between salmon, on the one hand, and herring used as bait and live ornamental finfish on the other; (2) the change in conclusions in a preliminary report and in the final report one year later; and (3) the fact that Australia was imposing a very strict measure upon importation of salmon, but not similarly strict standards for the internal movement of salmon products within Australia. The Appellate Body agreed with the Panel with respect to the first two warning signals. On the first warning signal it added that “the Panel considered the arbitrary or unjustifiable character of Differences in levels of protection as a ‘warning signal’ for, and not as ‘evidence’ of, a disguised restriction on international trade”.(176) The Appellate Body was also in agreement with the Panel that the rather substantial difference in levels of protection should be treated as a separate (second) warning signal.(177) The Appellate Body also approved of the third “warning factor”. However, while it also agreed with the Panel on the second and third of the “other factors”, the Appellate Body held, with respect to the first of these “other factors”: “We believe that the first ‘additional factor’ should indeed be excluded from the examination of the third element of Article 5.5. All ‘arbitrary or unjustifiable distinctions’ in levels of protection will lead logically to discrimination between products, whether the products are the same (e.g., discrimination between imports of salmon from different countries or between imported salmon and domestic salmon) or different (e.g., salmon versus herring used as bait and live ornamental finfish). The first ‘additional factor’ is therefore not different from the first warning signal, and should not be taken into account as a separate factor in the determination of whether an SPS measure results in a ‘disguised restriction on international trade’.”(178) Applicability of GATT Articles III and XX jurisprudence 141. The Panel on EC — Hormones considered pertinent, in its analysis of the terms “discrimination” and “disguised restriction on international trade”, the Appellate Body’s jurisprudence under Articles III and XX of the GATT 1994. The Appellate Body disagreed with this finding: “We agree with the Panel’s view that ‘all three elements [of Article 5.5] need to be distinguished and addressed separately’.(179) We also recall our interpretation that Article 5.5 and, in particular, the terms ‘discrimination or a disguised restriction on international trade’, have to be read in the context of the basic obligations contained in Article 2.3, which requires that ‘sanitary … measures shall not be applied in a manner which would constitute a disguised restriction on international trade’. (emphasis added)
However, we disagree with the Panel on two points. First, in view of the structural differences between the standards of the chapeau of Article XX of the GATT 1994 and the elements of Article 5.5 of the SPS Agreement, the reasoning in our Report in United States — Gasoline, quoted by Panel, cannot be casually imported into a case involving Article 5.5 of the SPS Agreement. Secondly, in our view, it is similarly unjustified to assume applicability of the reasoning of the Appellate Body in Japan — Alcoholic Beverages about the inference that may be drawn from the sheer size of a tax differential for the application of Article III:2, second sentence, of the GATT 1994, to the quite different question of whether arbitrary or unjustifiable differences in levels of protection against risks for human life or health, ‘result in discrimination or a disguised restriction on international trade’.”(180) 142. The Appellate Body on EC Hormones explained its reluctance to apply its jurisprudence under Article III:2 of the GATT 1994 to Article 5.5 of the SPS Agreement by noting that while there was a “clear and linear relationship” between a tax differential and protection given to domestic products, no such clear relationship existed between differentials of levels of protection of human health and protection given to domestic products: “The differential involved in Japan — Alcoholic Beverages was a tax differential, which is very different from a differential in levels of protection. Unlike a differential in levels of protection, a tax differential is always expressed in quantitative terms and a significant tax differential in favour of domestic products will inevitably affect the competitiveness of imported products and thus afford protection to domestic products. There is a clear and linear relationship between a tax differential and the protection afforded to domestic products. There is, however, no such relationship between a differential in levels of human health protection and discrimination or disguised restriction on trade.”(181) Differences in levels of protection for comparable situations not sufficient 143. After making its findings referenced in paragraphs 141–142 above, the Appellate Body on EC — Hormones reversed the Panel’s finding that the EC measure in question constituted “discrimination or a disguised restriction on international trade”. The Appellate Body held with respect to the difference in levels of protection for certain comparable situations: “[T]he degree of difference, or the extent of the discrepancy, in the levels of protection, is only one kind of factor which, along with others, may cumulatively lead to the conclusion that discrimination or a disguised restriction on international trade in fact results from the application of a measure or measures embodying one or more of those different levels of protection. Thus, we do not think that the difference between a ‘no residues’ level and ‘unlimited residues’ level is, together with a finding of an arbitrary or unjustifiable difference, sufficient to demonstrate that the third, and most important, requirement of Article 5.5 has been met … Evidently, the answer to the question whether arbitrary or unjustifiable differences or distinctions in levels of protection established by a Member do in fact result in discrimination or a disguised restriction on international trade must be sought in the circumstances of each individual case.”(182) (d) “guidelines to further practical implementation …” 144. At its meeting of 21–22 June 2000, the SPS Committee adopted the Guidelines to Further the Practical Implementation of Article 5.5.(183) These guidelines address the objective of achieving consistency in the application of the concept of the appropriate level of protection.(184) (e) Relationship with other paragraphs of Article 5 145. On the relationship between Articles 5.1 and 5.5, see paragraph 123 above. (f) Relationship with other Articles 146. As relates to applicability of the SPS Agreement to measures adopted before 1 January 1995 and measures adopted since, see paragraph 6 above. 147. In Australia — Salmon, with respect to the structure of Article 5.6, the Appellate Body identified three separate elements and found that these elements applied cumulatively: “We agree with the Panel that Article 5.6 and, in particular, the footnote to this provision, clearly provides a threepronged test to establish a violation of Article 5.6. As already noted, the three elements of this test under Article 5.6 are that there is an SPS measure which:
(1) is reasonably available taking into account technical and economic feasibility;
(2) achieves the Member’s appropriate level of sanitary or phytosanitary protection; and
(3) is significantly less restrictive to trade than the SPS measure contested.
These three elements are cumulative in the sense that, to establish inconsistency with Article 5.6, all of them have to be met. If any of these elements is not fulfilled, the measure in dispute would be consistent with Article 5.6. Thus, if there is no alternative measure available, taking into account technical and economic feasibility, or if the alternative measure does not achieve the Member’s appropriate level of sanitary or phytosanitary protection, or if it is not significantly less trade-restrictive, the measure in dispute would be consistent with Article 5.6.”(185) 148. In Japan — Agricultural Products II, the Appellate Body confirmed the finding referenced in paragraph 147 above:(186) (b) “achieves the appropriate level of … protection” (i) Determining “appropriate level of … protection” as a “prerogative” of the Member concerned 149. The Appellate Body on Australia — Salmon emphasized that determining the appropriate level of protection is the prerogative of the Member concerned: “We do not believe that Article 11 of the DSU, or any other provision of the DSU or of the SPS Agreement, entitles the Panel or the Appellate Body, for the purpose of applying Article 5.6 in the present case, to substitute its own reasoning about the implied level of protection for that expressed consistently by Australia. The determination of the appropriate level of protection, a notion defined in paragraph 5 of Annex A … is a prerogative of the Member concerned and not of a panel or of the Appellate Body.”(187) 150. In Japan — Agricultural Products II, the Panel emphasized that it was up to Japan to determine its appropriate level of protection: “Both parties agree that it is up to Japan to determine its appropriate level of phytosanitary protection with respect to codling moth. We agree since the SPS Agreement (in paragraph 5 of Annex A) defines the ‘appropriate level of … phytosanitary protection’ as ‘[t]he level of protection deemed appropriate by the Member establishing a … phytosanitary measure to protect … plant life or health within its territory’(188), in casu, the level deemed appropriate by Japan.”(189) (ii) Implied or explicit level of protection 151. In Australia — Salmon, the question arose whether a WTO Member is obliged to determine, positively, its appropriate level of protection. While the Panel had held that no such obligation existed(190), the Appellate Body determined that such an obligation exists under the SPS Agreement, albeit only implicitly. However, it also held that where a Member fails to determine its appropriate level of protection, this level of protection can be established by a panel on the basis of existing relevant SPS measures: “We recognize that the SPS Agreement does not contain an explicit provision which obliges WTO Members to determine the appropriate level of protection. Such an obligation is, however, implicit in several provisions of the SPS Agreement, in particular, in paragraph 3 of Annex B, Article 4.1, Article 5.4 and Article 5.6 of the SPS Agreement …
We thus believe that the SPS Agreement contains an implicit obligation to determine the appropriate level of protection. We do not believe that there is an obligation to determine the appropriate level of protection in quantitative terms. This does not mean, however, that an importing Member is free to determine its level of protection with such vagueness or equivocation that the application of the relevant provisions of the SPS Agreement, such as Article 5.6, becomes impossible. It would obviously be wrong to interpret the SPS Agreement in a way that would render nugatory entire Articles or paragraphs of Articles of this Agreement and allow Members to escape from their obligations under this Agreement.
… we believe that in cases where a Member does not determine its appropriate level of protection, or does so with insufficient precision, the appropriate level of protection may be established by panels on the basis of the level of protection reflected in the SPS measure actually applied. Otherwise, a Member’s failure to comply with the implicit obligation to determine its appropriate level of protection — with sufficient precision — would allow it to escape from its obligations under this Agreement and, in particular, its obligations under Articles 5.5 and 5.6.”(191) 152. In Australia — Salmon, the Panel had found that “the level of protection implied or reflected in a sanitary measure or regime imposed by a WTO Member can be presumed to be at least as high as the level of protection considered to be appropriate by that Member.”(192) The Appellate Body disagreed with this statement, in particular because Australia had explicitly stated that its level of protection was different from the one reflected in its measure. The Appellate Body stressed that an explicit statement by a Member about its level of protection could not be questioned by a Panel or the Appellate Body. See paragraph 149 above. 153. The Appellate Body on Australia — Salmon, also emphasized the Differences between the “appropriate level of protection” and the SPS measure: “The ‘appropriate level of protection’ established by a Member and the ‘SPS measure’ have to be clearly distinguished.(193) They are not one and the same thing. The first is an objective, the second is an instrument chosen to attain or implement that objective.
It can be deduced from the provisions of the SPS Agreement that the determination by a Member of the ‘appropriate level of protection’ logically precedes the establishment or decision on maintenance of an ‘SPS measure’.
… The words of Article 5.6, in particular the terms ‘when establishing or maintaining sanitary … protection’, demonstrate that the determination of the level of protection is an element in the decision-making process which logically precedes and is separate from the establishment or maintenance of the SPS measure. It is the appropriate level of protection which determines the SPS measure to be introduced or maintained, not the SPS measure introduced or maintained which determines the appropriate level of protection. To imply the appropriate level of protection from the existing SPS measure would be to assume that the measure always achieves the appropriate level of protection determined by the Member. That clearly cannot be the case.”(194) (c) “significantly less restrictive to trade” 154. In Australia — Salmon, the Panel examined whether the measure at issue met the requirement of an alternative measure which is “significantly less restrictive to trade”.(195) The Panel found: “Canada argues that all four alternative options set out in the 1996 Final Report are significantly less trade restrictive. In its request for access to the Australian market, Canada examined in particular headless, eviscerated product and advocated that these products could be safely imported. We recall that the measure imposed by Australia (in effect, certain heat treatment requirements) prohibits the importation into Australia of fresh, chilled or frozen salmon, including the salmon products further examined. All four alternative options outlined above would allow imports of the salmon products further examined, albeit under specific conditions (e.g., the salmon products would have to be retail-ready fillets, eviscerated, headless or gilled, etc…). We consider that even imposing the most stringent of these specific conditions would still be significantly less restrictive to trade than an outright prohibition. As opposed to any of the other conditions, heat treatment actually changes the nature of the product and limits its use. Heat-treated salmon can obviously no longer be consumed as fresh salmon. Eviscerated, headless or filleted salmon, on the other hand, can either be consumed as fresh salmon or cooked salmon.(196) We consider, therefore, that Canada has raised a presumption that all four alternatives outlined in the 1996 Final Report are ‘significantly less restrictive to trade’ than the measure in dispute and that Australia has not rebutted this presumption.”(197) (d) “taking into account technical and economic feasibility” 155. The Panel on Australia — Salmon found that there existed alternatives to the Australian measure, as evidenced by the Australian report at issue, and found that nothing implied that any of these four alternatives would be technically or economically unfeasible.(198) The Appellate Body reversed this finding, because it had earlier found that the Panel had examined the wrong measure.(199) 156. The Panel on Australia — Salmon (Article 21.5 — Canada), while examining one of the four alternatives proposed by Canada, stated with respect to whether a measure was “reasonably available” within the meaning of footnote 3 in Article 5.6: “[S]ince one can assume that current Australian requirements are ‘reasonably available taking into account technical and economic feasibility’, also a regime without the consumer-ready requirements [the current Australian requirements] … would be so. Given that inspection and control to release from quarantine only product that meets the consumer-ready requirements would no longer be necessary, a regime without the consumer ready requirements would be even more reasonably available in the sense of Article 5.6.”(200) 157. With regard to the phrase “achieves [the Member’s] appropriate level of … protection” under Article 5.6, see Section VI.B.6(b) above. 158. In Japan — Agricultural Products II, concerning the issue of the burden of proof, the Appellate Body reversed the Panel’s findings on Article 5.6, holding that the Panel could not have made the finding at issue, because the United States as the complaining party had not made a relevant claim and, a fortiori, had not established a prima facie case. The Appellate Body then stressed that the investigative authority of a panel did not stretch so far as to “make the case for a complaining party”: “Pursuant to the rules on burden of proof set out above, we consider that it was for the United States [complainant] to establish a prima facie case that there is an alternative measure that meets all three elements under Article 5.6 in order to establish a prima facie case of inconsistency with Article 5.6. Since the United States did not even claim before the Panel that the ‘determination of sorption levels’ is an alternative measure which meets the three elements under Article 5.6, we are of the opinion that the United States did not establish a prima facie case that the ‘determination of sorption levels’ is an alternative measure within the meaning of Article 5.6.”(201) (iv) Relationship with other Articles 159. On the applicability of the SPS Agreement to measures adopted before 1 January 1995 and measures adopted since, see paragraph 6 above. 160. In Australia — Salmon, the Panel noted that “Article 5.6 must be read in context … an important part of the context of Article 5 is Article 2. We consider that Article 5.6 should, in particular, be read in light of Article 2.2”.(202) The Appellate Body reversed the Panel’s finding because it found that the Panel had examined the wrong measure.(203) The Panel on Japan — Agricultural Products II reached the same conclusion on the relationship between Articles 2.2 and 5.6, but the Appellate Body did not address this issue on appeal.(204) 161. In Japan — Agricultural Products II, the Panel noted that its “findings under Article 5.6 would stand even if the measure in dispute were not in violation of Article 2.2”.(205) It added that “even if we were to have found that Japan’s measure is maintained with sufficient scientific evidence in accordance with Article 2.2, we would then be called upon to examine whether the measure is consistent with Article 5.6.”(206) The Appellate Body did not specifically address this statement on appeal. 162. The Appellate Body on Japan — Agricultural Products II referred to Article 5.7 as a “qualified exemption”. See paragraph 36 above: “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.”(207) (i) Four cumulative requirements 163. In Japan — Agricultural Products II, the Appellate Body identified four requirements imposed upon a Member having recourse to this provision. The Appellate Body added that these four requirements are cumulative in nature: “Article 5.7 of the SPS Agreement sets out four requirements which must be met in order to adopt and maintain a provisional SPS measure. Pursuant to the first sentence of Article 5.7, a Member may provisionally adopt an SPS measure if this measure is:
(1) imposed in respect of a situation where ‘relevant scientific information is insufficient’; and
(2) adopted ‘on the basis of available pertinent information’.
Pursuant to the second sentence of Article 5.7, such a provisional measure may not be maintained unless the Member which adopted the measure:
(1) ‘seek[s] to obtain the additional information necessary for a more objective assessment of risk’; and
(2) ‘review[s] the … measure accordingly within a reasonable period of time’.
These four requirements are clearly cumulative in nature and are equally important for the purpose of determining consistency with this provision. Whenever one of these four requirements is not met, the measure at issue is inconsistent with Article 5.7.”(208) (b) “where relevant scientific evidence is insufficient” 164. Upholding the Panel’s finding that Japan’s phytosanitary measure at issue was not imposed in a situation “where relevant scientific evidence is insufficient”, the Appellate Body on Japan — Apples said that “relevant scientific evidence” will be “insufficient” within the meaning of Article 5.7 if the body of available scientific evidence does not allow, in quantitative or qualitative terms, the performance of an adequate assessment of risks as required under Article 5.1 and as defined in Annex A to the SPS Agreement: “[J]apan’s reliance on the opposition between evidence ‘in general’ and evidence relating to specific aspects of a particular subject matter is misplaced. The first requirement of Article 5.7 is that there must be insufficient scientific evidence. When a panel reviews a measure claimed by a Member to be provisional, that panel must assess whether ‘relevant scientific evidence is insufficient’. This evaluation must be carried out, not in the abstract, but in the light of a particular inquiry. The notions of ‘relevance’ and ‘insufficiency’ in the introductory phrase of Article 5.7 imply a relationship between the scientific evidence and something else. Reading this introductory phrase in the broader context of Article 5. of the SPS Agreement, which is entitled ‘Assessment of Risk and Determination of the Appropriate Level of Sanitary or Phytosanitary Protection’, is instructive in ascertaining the nature of the relationship to be established. Article 5.1 sets out a key discipline under Article 5, namely that ‘Members shall ensure that their sanitary or phytosanitary measures are based on an assessment … of the risks to human, animal or plant life or health’.(209) This discipline informs the other provisions of Article 5, including Article 5.7. We note, as well, that the second sentence of Article 5.7 refers to a ‘more objective assessment of risks’. These contextual elements militate in favour of a link or relationship between the first requirement under Article 5.7 and the obligation to perform a risk assessment under Article 5.1: ‘relevant scientific evidence’ will be ‘insufficient’ within the meaning of Article 5.7 if the body of available scientific evidence does not allow, in quantitative or qualitative terms, the performance of an adequate assessment of risks as required under Article 5.1 and as defined in Annex A to the SPS Agreement. Thus, the question is not whether there is sufficient evidence of a general nature or whether there is sufficient evidence related to a specific aspect of a phytosanitary problem, or a specific risk. The questions is whether the relevant evidence, be it ‘general’ or ‘specific’, in the Panel’s parlance, is sufficient to permit the evaluation of the likelihood of entry, establishment or spread of, in this case, fire blight in Japan.”(210) 165. The Appellate Body on Japan — Apples also rejected Japan’s interpretation of Article 5.7 through the concept of “scientific uncertainty”, and said that the application of Article 5.7 is triggered not by the existence of scientific uncertainty, but rather by the insufficiency of scientific evidence and these two concepts — “insufficiency of scientific evidence” and “scientific uncertainty” — are not interchangeable: “Japan challenges the Panel’s statement that Article 5.7 is intended to address only ‘situations where little, or no, reliable evidence was available on the subject matter at issue’(211) because this does not provide for situations of ‘unresolved uncertainty’. Japan draws a distinction between ‘new uncertainty’ and ‘unresolved uncertainty’(212), arguing that both fall within Article 5.7. According to Japan, ‘new uncertainty’ arises when a new risk is identified; Japan argues that the Panel’s characterization that ‘little, or no, reliable evidence was available on the subject matter at issue’ is relevant to a situation of ‘new uncertainty’.(213) We understand that Japan defines ‘unresolved uncertainty’ as uncertainty that the scientific evidence is not able to resolve, despite accumulated scientific evidence.(214) According to Japan, the risk of transmission of fire blight through apple fruit relates essentially to a situation of ‘unresolved uncertainty’.(215) Thus, Japan maintains that, despite considerable scientific evidence regarding fire blight, there is still uncertainty about certain aspects of transmission of fire blight. Japan contends that the reasoning of the Panel is tantamount to restricting the applicability of Article 5.7 to situations of ‘new uncertainty’ and to excluding situations of ‘unresolved uncertainty’; and that, by doing so, the Panel erred in law.(216)
We disagree with Japan. The application of Article 5.7 is triggered not by the existence of scientific uncertainty, but rather by the insufficiency of scientific evidence. The text of Article 5.7 is clear: it refers to ‘cases where relevant scientific evidence is insufficient’, not to ‘scientific uncertainty’. The two concepts are not interchangeable. Therefore, we are unable to endorse Japan’s approach of interpreting Article 5.7 through the prism of ‘scientific uncertainty’.”(217) (c) “seek to obtain additional information” 166. In Japan — Agricultural Products II, in respect of the third requirement under Article 5.7, the Appellate Body stated that the additional information to be sought must be “germane” to conducting a more objective risk assessment: “Neither Article 5.7 nor any other provision of the SPS Agreement sets out explicit prerequisites regarding the additional information to be collected or a specific collection procedure. Furthermore, Article 5.7 does not specify what actual results must be achieved; the obligation is to ‘seek to obtain’ additional information. However, Article 5.7 states that the additional information is to be sought in order to allow the Member to conduct ‘a more objective assessment of risk’. Therefore, the information sought must be germane to conducting such a risk assessment, i.e., the evaluation of the likelihood of entry, establishment or spread of, in casu, a pest, according to the SPS measures which might be applied. We note that the Panel found that the information collected by Japan does not ‘examine the appropriateness’ of the SPS measure at issue and does not address the core issue as to whether ‘varietal characteristics cause a divergency in quarantine efficacy’. In the light of this finding, we agree with the Panel that Japan did not seek to obtain the additional information necessary for a more objective risk assessment.”(218) (d) “review … within a reasonable period of time” 167. The Appellate Body on Japan — Agricultural Products II found that the “reasonable period of time” had to be established on a case-by-case basis: “In our view, what constitutes a ‘reasonable period of time’ has to be established on a case-by-case basis and depends on the specific circumstances of each case, including the difficulty of obtaining the additional information necessary for the review and the characteristics of the provisional SPS measure. In the present case, the Panel found that collecting the necessary additional information would be relatively easy. Although the obligation ‘to review’ the varietal testing requirement has only been in existence since 1 January 1995, we agree with the Panel that Japan has not reviewed its varietal testing requirement ‘within a reasonable period of time’.”(219) 168. In Japan — Apples, concerning Japan’s argument in the alternative under Article 5.7, which was made in the event that the Panel rejected Japan’s view that “sufficient scientific evidence” exists to maintain the measure within the meaning of Article 2.2, the Panel assigned the burden of proof to Japan. The Panel’s assignment of the burden of proof was not appealed.(220) “We understand Japan to be claiming that the phytosanitary measure at issue is justified under Article 5.7 ‘in the alternative’, should the Panel find that the measure is maintained without sufficient scientific evidence within the meaning of Article 2.2. We first note that arguing in the alternative is a well-established judicial practice and arguing a point in the alternative of another point often implies that there may be some contradictions between the two lines of argumentation if they were presented concurrently.
In this instance, we have determined above that Japan’s measure is maintained without sufficient scientific evidence within the meaning of Article 2.2, which is the circumstance in which Japan invokes Article 5.7 in the alternative and claims that this provisional measure has been in place since the date of entry into force of the SPS Agreement in 1995.
We will therefore now consider whether the measure at issue can be justified as a provisional measure within the meaning of Article 5.7 of the SPS Agreement. Before doing so, however, we find it relevant to recall that the burden is on Japan, as the party invoking Article 5.7 to make a prima facie case in support of its position.”(221) (f) Treatment of the precautionary principle 169. The Appellate Body on EC — Hormones noted the following concerning Article 5.7 and the precautionary principle: “[T]he 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 …”(222) (g) Relationship with other Articles 170. Regarding the relationship between Article 5.7 and Article 2.2, see paragraphs 35–37 above. 171. The Panel on EC — Hormones allocated the burden of proof to the responding party, where the responding party enacted a measure not based on an international standard. In doing so, the Panel based its finding partially upon Article 5.8. The Appellate Body disagreed and indicated that Article 5.8 is not intended to address the burden of proof problem: “Article 5.8 of the SPS Agreement does not purport to address burden of proof problems; it does not deal with a dispute settlement situation. To the contrary, a Member seeking to exercise its right to receive information under Article 5.8 would, most likely, be in a pre-dispute situation, and the information or explanation it receives may well make it possible for that Member to proceed to dispute settlement proceedings and to carry the burden of proving on a prima facie basis that the measure involved is not consistent with the SPS Agreement.”(223) (b) Relationship with other Articles 172. While discussing the burden of proof under Article 2.2, the Appellate Body on Japan — Agricultural Products II made reference to Article 5.8. See paragraph 17 above. 173. The Panel on Australia — Salmon discussed the relationship between Article 5 on the one hand, and Articles 2 and 3 on the other. See paragraphs 46–48 above. 174. Also, the Appellate Body in Japan — Agricultural Products II touched on the relationship of Article 5 with Articles 2.2 and 3.3. See Section III.B.1(a)(ii) above.
Footnotes: 107. See also paras. 4 and
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