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VI.
Article 5
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A. Text of
Article 5
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.(51)
B. Interpretation and Application of
Article 5
1. Paragraph
1
(a)
“risk assessment”
(i) General
52. The Appellate Body in EC
– Hormones, when addressing the requirements under
Article 3.3, 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, 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”.(52)
53. In EC – Hormones,
the Appellate Body 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.(53)
The Panel describes the latter as ‘non-scientific’ and as
pertaining to ‘risk management’ rather than to ‘risk
assessment’.(54) 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.”(55)
(ii) Definition
of the term “risk”
54. Referring to the first of the
two definitions of “risk assessment” in paragraph 4 of
Annex A, the Panel on Australia – Salmon in a finding
with which the Appellate Body later expressly agreed
(56) ,
considered the two types of risk contained therein:
“Examining
the definition of risk assessment applicable to the measure at
issue, i.e., the ‘evaluation of the likelihood of entry,
establishment or spread of a pest or disease within the territory of
an importing Member according to the sanitary or phytosanitary
measures which might be applied, and of the associated potential
biological and economic consequences’, we consider, first of all,
that the risk thus to be assessed includes (1) the risk of ‘entry,
establishment or spread’ of a disease and (2) the risk of the
‘associated potential biological and economic consequences’.
When we refer hereafter to the risk related to a disease, this risk
thus includes the risk of entry, establishment or spread of that
disease as well as the biological and economic consequences
associated therewith.
…In this dispute,
the measure at issue is intended to protect animal health as a
sanitary measure defined in paragraph 1(a) of Annex A and is to
be based on a risk assessment in the sense of the first definition
in paragraph 4 of Annex A. According to this first definition
in paragraph 4, such risk assessment has to take into account
risks arising not only from the ‘entry, establishment or spread of
a pest or disease’, but also from the ‘associated biological and
economic consequences’.”
(57)
(iii) Definition
of the term “risk assessment”
55. The Panel on Australia –
Salmon (Article 21.5 – Canada) rejected the interpretation
of “risk assessment” put forward by Canada, the
complaining party. The Panel held that a requirement that
Members assess risk “according to the [sanitary] measures
which might be applied” could not be read into the
definition of “risk assessment”; rather, the
requirement of a linkage between the risk assessment on the one
hand, and the final measure and the necessity to use such
measure on the other, were to be derived from other provisions
of the SPS Agreement:
“Canada’s
claim … raises the question of whether the definition of risk
assessment as such, requiring Members to assess risk ‘according
to the [sanitary] measures which might be applied’, can be construed
so as to include the obligation to make the link between the
assessment, the measures finally selected and the necessity to
use these measures in order to achieve the [appropriate level of
sanitary or phytosanitary protection]. We find it difficult to read
such a requirement into paragraph 4 of Annex A.
In our view, the
rights and obligations in respect of these linkages are set out not
in the definition of risk assessment itself – which logically precedes
the selection of measures – but, inter alia, in the
obligation to base sanitary measures on a risk
assessment in Article 5.1 and to ensure that sanitary measures
are not more trade-restrictive than required to achieve the
[appropriate level of sanitary or phytosanitary protection] in the
sense of Article 5.6. To examine these questions of relationship
between the risk assessment, the measures selected and the
[appropriate level of sanitary or phytosanitary protection] under the
definition of risk assessment – as Canada … seem[s] to do --
would, in our view, run the risk of adding to or diminishing the more
specific rights and obligations of Members set out in other SPS
obligations, contrary to Article 19.2 of the DSU.
… In any event,
we prefer to address this question of relationship between the
measures selected and the risk assessment under the obligation to base
measures on a risk assessment pursuant to Article 5.1
rather than under the very definition of risk assessment referred to
in the same provision.”(58)
56. In
Australia – Salmon, the Appellate Body identified three aspects
of a risk assessment pursuant to the first part of paragraph 4 of Annex
A of the SPS Agreement:
“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.”(59)
57. The
Panel on Australia – Salmon stated that where several diseases
were involved in the risk assessment, such risk assessment at least had
to identify risk on a disease specific basis. The Panel also referred to
the Appellate Body’s findings in EC – Hormones:
“[G]iven the
definition of risk assessment applicable in this case (the ‘evaluation
of the likelihood of entry, establishment or spread of a ... disease’,
in the singular form), a risk assessment for the measure at issue in
this dispute at least has to identify risk on a disease
specific basis, i.e., it has to identify the risk for any given
disease of concern separately, not simply address the overall risk
related to the combination of all diseases of concern. … The experts
advising the Panel on this issue confirmed this. In the EC –
Hormones case as well, both the panels and the Appellate Body
required some degree of specificity for a risk assessment - or a study
or report allegedly part thereof - to be in accordance with the
requirements imposed in Article 5.1.”(60)
58. In
Australia – Salmon, the Appellate Body recalled its finding in EC
– Hormones where it had distinguished between the terms “potential” and
“probability”. Finding that the term “likelihood” was synonymous with the term
“probability”, the Appellate Body disagreed with the Panel’s
finding that a risk assessment required only some evaluation of
the likelihood or probability:
“We note that
the first definition in paragraph 4 of Annex A speaks about the
evaluation of ‘likelihood.’ In our report in European
Communities – Hormones, we referred to the dictionary meaning of
‘probability’ as ‘degrees of likelihood’ and ‘a thing that
is judged likely to be true’, for the purpose of distinguishing the
terms ‘potential’ and ‘probability’. For the present purpose,
we refer in the same manner to the ordinary meaning of ‘likelihood’,
and we consider that it has the same meaning as ‘probability’. On
this basis, as well as on the basis of the definition of ‘risk’
and ‘risk assessment’ developed by the Office international des
épizooties (‘OIE’) and the OIE Guidelines for Risk Assessment,
we maintain that for a risk assessment to fall within the meaning of
Article 5.1 and the first definition in paragraph 4 of Annex A,
it is not sufficient that a risk assessment conclude that there is a possibility
of entry, establishment or spread of diseases and associated
biological and economic consequences. A proper risk assessment of this
type must evaluate the ‘likelihood’, i.e., the ‘probability’,
of entry, establishment or spread of diseases and associated
biological and economic consequences as well as the ‘likelihood’,
i.e., ‘probability’, of entry, establishment or spread of diseases
according to the SPS measures which might be applied.
We note that,
although the Panel stated that the definition of a risk assessment
for this type of measure requires an ‘evaluation of the likelihood’,
for the purpose of satisfying the second and third requirements, it
subsequently was hesitant in applying these requirements, by stating
or suggesting in paragraphs 8.80, 8.83, 8.89 and 8.91, that some
evaluation of the likelihood or probability would suffice. We
consider this hesitation unfortunate. We do not agree with the Panel
that a risk assessment of this type needs only some
evaluation of the likelihood or probability. The definition of this
type of risk assessment in paragraph 4 of Annex A refers to ‘the
evaluation of the likelihood’ and not to some evaluation of
the likelihood. We agree, however, with the Panel’s statements in
paragraph 8.80 that the SPS Agreement does not require
that the evaluation of the likelihood needs to be done
quantitatively. The likelihood may be expressed either
quantitatively or qualitatively. Furthermore, we recall, as does the
Panel, that we stated in European Communities – Hormones
that there is no requirement for a risk assessment to establish a
certain magnitude or threshold level of degree of risk. ”(61)
59. With
respect to the second definition of “risk assessment”
contained in paragraph 4 of the Annex A, the Appellate Body in Australia
– Salmon noted that while the first definition speaks of “likelihood”, the second definition speaks of
“potential” for adverse effects:
“We note
that the first type of risk assessment in paragraph 4 of Annex A is
substantially different from the second type of risk assessment
contained in the same paragraph. While the second requires only the
evaluation of the potential for adverse effects on human or
animal health, the first type of risk assessment demands an
evaluation of the likelihood of entry, establishment or
spread of a disease, and of the associated potential biological and
economic consequences. In view of the very different language used
in paragraph 4 of Annex A for the two types of risk assessment, we
do not believe that it is correct to diminish the substantial
differences between these two types of risk assessments, as the
European Communities seems to suggest when it argues that ‘the
object, purpose and context of the SPS Agreement
indicate that no greater level of probability can have been intended
for the first type of risk assessment than for the second type, [as
b]oth types can apply both to human life or health and to animal or
plant life or health’. (Third participant’s submission of the
European Communities, para. 7).”(62)
(iv)
Timing of a “risk
assessment”
60. 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”.(63)
61. The
Panel on Australia – Salmon 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”.(64)
(v) Methodology of risk assessment
62. In
EC – Hormones, with respect to the methodology for a risk
assessment under the second definition of paragraph 4 of Annex A of the SPS
Agreement, the Panels stated that “ … in this dispute, a risk
assessment carried out in accordance with the SPS Agreement should (i) identify
the adverse effects on human health (if any) arising from the
presence of the hormones at issue when used as growth promoters in
meat or meat products, and (ii) if any such adverse effects exist, evaluate
the potential or probability of occurrence of these
effects”.(65) The Appellate Body did not disagree with the finding of
the Panel on EC – Hormones referred to in paragraph 62, but
cautioned against equating the terms “potential” and “probability”:
“Although the
utility of a two-step analysis may be debated, it does not appear to
us to be substantially wrong. What needs to be pointed out at this
stage is that the Panel’s use of ‘probability’ as an alternative
term for ‘potential’ creates a significant concern. The ordinary
meaning of ‘potential’ relates to ‘possibility’ and is
different from the ordinary meaning of ‘probability’. ‘Probability’
implies a higher degree or a threshold of potentiality or possibility.
It thus appears that here the Panel introduces a quantitative
dimension to the notion of risk.”(66)
63. 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”.(67)
The Appellate Body elaborated on the term “scientifically
identified risk” which the Panel had employed:
“It is not
clear in what sense the Panel uses the term ‘scientifically
identified risk’. The Panel also frequently uses the term ‘identifiable
risk’ ,(68) 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.(69) 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.
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.”(70)
64. In
EC – Hormones, the Appellate Body upheld the Panel’s finding
that “there was no risk assessment with regard to MGA”,(71) 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.”(72) 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.”(73)
65. While
the Panel on EC – Hormones had held that a risk assessment
would have to be carried out for each individual substance at issue, 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”.(74)
66. In
EC – Hormones, the Appellate Body addressed the question
whether a Member must carry out a risk assessment by itself for its 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”.(75)
67. 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”.(76)
(b)
“as appropriate to the
circumstances”
68. When
addressing the applicability of the SPS Agreement to measures
adopted before the entry into force of the WTO Agreement, the
Appellate Body in 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”.(77)
69. 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.(78) Only
Article 5.7 allows for an exception to the obligation to base
sanitary measures on a risk assessment”.(79)
70. The
Panel further 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’ ”.(80)
(c)
“based on an assessment …
of the risks”
71. 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).(81) 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
does not insist that a Member that adopts a sanitary measure shall
have carried out its own risk assessment. It only requires that the
SPS measures be ‘based on an assessment, as appropriate for the
circumstances ...’. The SPS measure might well find its objective
justification in a risk assessment carried out by another Member, or
an international organization. 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.”(82)
72. The
Appellate Body also disagreed with the Panel in 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.”(83)
73. The
Appellate Body in EC – Hormones furthermore 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”. However, the Appellate Body cautioned that a “risk assessment” need not come to a
“monolithic
conclusion”:
“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 life-threatening in
character and is perceived to constitute a clear and imminent threat
to public health and safety. Determination of the presence or absence
of that relationship can only be done on a case-to-case basis, after
account is taken of all considerations rationally bearing upon the
issue of potential adverse health effects”.(84)
74. 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”.(85)
75. 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 heat-treated before it can be imported, is
that imports of fresh, chilled and frozen salmon are prohibited”.(86)
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.”(87)
76. 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 … On the contrary, the 1996 Final Report itself
states that there is insufficient data on whether or not heat treatment
inactivates the disease agents in dispute”.(88)
The Appellate Body, however, reversed this finding, because it found –
as referred in paragraph 75 above – that the measure within the
Panel’s term of reference was the import prohibition of fresh, chilled
and frozen salmon, and not the heat treatment requirement.(89)
The Appellate Body then completed the Panel’s analysis and examined
whether the Australian import prohibition on fresh, chilled and frozen
salmon was based on a risk assessment. The Appellate Body found that the
1996 Final Report did not fulfil the requirements needed to constitute a
“risk assessment” within the meaning of Article 5.1.(90)
77. 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”.(91)
(d) Standard of review
78. As
to the role of Panels in reviewing whether an SPS measure is based on a
risk assessment, the Panel 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”.(92)
79. 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”.(93)
80. When
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”.(94)
2.
Paragraph 2
81. With
respect to the risk factors to be examined in the context of a risk
assessment, the Appellate Body in 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’. (95)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.”(96)
82. 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 in 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”.(97)
83. The
Appellate Body in EC – Hormones added a caveat to its finding
referred to in paragraphs 81-82 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 81-82 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.”(98)
84. 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”.(99)
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’.”(100)
85. 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.’ ”(101)
86. On
this issue, with respect to Article 5.7, see also paragraphs
113-119 below.
3. Paragraph 4
87. 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”.(102)
4. Paragraph 5
(a) General
88. At
its meeting of 21-22 June 2000, the SPS Committee adopted the Guidelines
to Further the Practical Implementation of Article 5.5.(103)
(b) Three elements of
Article 5.5
89. 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.”(104)
(c)
“appropriate level of
protection”
(i) Legal status of the first part
of Article 5.5
90. 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”.(105)
91. With
respect to statements on the phrase “achieves [the Member’s]
appropriate level of … protection” under Article 5.6, see
paragraphs 107-111 below.
(ii)
“distinctions in the
levels of protection in different situations”
92. The
Panel on EC – Hormones found that the “different
situations” which can be compared under Article 5.5 were
situations “where the same substance or the same adverse health
effect is involved”.(106)
Upon appeal, the Appellate Body stated as follows:
“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.”(107)
93. 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.”(108)
94. 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”.(109)
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”.(110)
95. 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”.(111)
(iii)
“Arbitrary
or unjustifiable” distinctions in levels of protection
96. 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.(112)
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.”(113)
(iv) Distinctions which
“result in discrimination or a disguised restriction on
international trade”
97. 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 GATT. 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’.(114)
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”.(115)
98. The
Appellate Body explained its reluctance to apply its jurisprudence under
Article III:2 of GATT 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.”(116)
99. After
making its findings referenced in paragraphs 97-98 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”.(117)
100. The
Panel on Australia – Salmon found three “warning
signals” and three “other factors more substantial in
nature” with respect to the issue 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”;(118)
(2) “the rather substantial difference in levels of
protection”;(119)
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”.(120)
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 of a preliminary report and of 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”. (121)The
Appellate Body also agreed with the Panel that the rather substantial
difference in levels of protection be treated as a separate (second)
warning signal. (122)The
Appellate Body also agreed with the Panel on the third “warning
factor”. While it also agreed with the Panel on the second and
third of the “other factors”, the Appellate Body held,
however, 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’.”(123)
(d) Guidelines
101. The Guidelines to Further the
Practical Implementation of Article 5.5, referenced in
paragraph 88 above, address the objective of achieving consistency
in the application of the concept of the appropriate level of
protection.(124)
5.
Paragraph 6
(a)
General
102. 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 three-pronged 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.”(125)
103. In
Japan – Agricultural Products II, the Appellate Body confirmed
the finding referenced in paragraph 102 above.(126)
104. 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’,(127) in casu,
the level deemed appropriate by Japan.”(128)
(b)
“reasonably available taking into account technical and economic
feasibility”
105. 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.(129)The
Appellate Body reversed this finding of the Panel, because it had
previously found that the Panel had examined the wrong measure.(130) The
Appellate Body went on to complete the analysis of the Panel, but
ultimately held that it could not do so because of the lack of a factual
background established by the Panel.(131)
106. The
Panel on Australia – Salmon (Article 21.5 – Canada),
with a focus of its examination on one of the four alternatives proposed
by Canada, stated with respect to whether a measure was “reasonably
available” within the meaning of 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.”(132)
(c)
“achieves the appropriate level of ... protection”
107. In
Australia – Salmon, 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:
“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, as ‘the level of protection deemed
appropriate by the Member establishing a sanitary … measure’, is a
prerogative of the Member concerned and not of a panel or of
the Appellate Body.”(133)
108. In
the Australia – Salmon dispute, the Appellate Body dealt with
the question of how an implicit level of protection can be inferred from
an SPS measure. 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.” 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 then went on to emphasize that the “appropriate level
of protection” and the SPS measure itself were distinct and that the
establishment of the appropriate level of protection logically precedes
the establishment or decision on maintenance of an SPS measure:
“The
‘appropriate level of protection’ established by a Member and the
‘SPS measure’ have to be clearly distinguished.(134)
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 | 
