DISPUTE SETTLEMENT

DS: Russian Federation — Measures on the Importation of Live Pigs, Pork and Other Pig Products from the European Union

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

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Current status

 

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Key facts

Short title:
Complainant:
Respondent:
Third Parties:
Agreements cited:
(as cited in request for consultations)
Request for Consultations received:
Panel Report circulated: 19 August 2016
Appellate Body Report circulated: 23 February 2017

  

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Latest document

  

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by the European Union

On 8 April 2014, the European Union requested consultations with the Russian Federation concerning certain measures adopted by the Russian Federation affecting the importation of live pigs and their genetic material, pork, pork products and certain other commodities from the European Union, purportedly because of concerns related to cases of African swine fever.

The European Union claims that the measures at issue are inconsistent with:

  • Articles 2.2, 2.3, 3.1, 3.2, 3.3, 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7, 6.1, 6.2, 6.3, 7, 8, Annex B, and Annex C of the SPS Agreement; and
     
  • Articles I:1, III:4 and XI:1 of the GATT 1994.

On 27 June 2014, the European Union requested the establishment of a panel. At its meeting on 10 July 2014, the DSB deferred the establishment of a panel.

 

Panel and Appellate Body proceedings

At its meeting on 22 July 2014, the DSB established a panel. Australia, China, India, Japan, Korea, Norway, Chinese Taipei and the United States reserved their third-party rights. Subsequently, Brazil and South Africa reserved their third-party rights. On 13 October 2014, the European Union requested the Director-General to compose the panel. On 23 October 2014, the Director-General composed the panel.

Following the resignation of a member of the panel on 30 October 2014, and pursuant to a request from the European Union on 3 November 2014, the Director-General appointed a new member of the panel on 6 November 2014. Following the resignation of a member of the panel on 26 November 2014, and pursuant to a request from the European Union on 28 November 2014, the Director-General appointed a new member of the panel on 4 December 2014.

On 22 April 2015, the Chair of the panel informed the DSB that the panel expected to issue its final report to the parties by February 2016, in accordance with the timetable adopted after consultation with the parties. On 7 January 2016, the Chair of the panel informed the DSB that in light of modifications to the timetable, as well as of the scale and complexity of the dispute, the Panel expected to issue its final report to the parties by early April 2016.

On 19 August 2016, the panel report was circulated to Members.

This dispute concerns SPS measures imposed by Russia between January and September 2014 on imports of pigs, pork and other pig products from the European Union relating to outbreaks of African swine fever (ASF) in the European Union. Russia imposed an EU-wide import ban, as well as individual import bans in respect of products originating in four EU member States: Estonia, Latvia, Lithuania and Poland (EU member State bans).

The European Union challenged the EU-wide ban and the EU member State bans, as being inconsistent with provisions of the SPS Agreement relative to: harmonization (Articles 3.1, 3.2, and 3.3), adaptation to regional conditions (Articles 6.1, 6.2, and 6.3), SPS approval procedures (Article 8 and Annex C), the scientific basis of the measures (Articles 5.1, 5.2, 5.7 and 2.2), the application of SPS measures (Articles 5.3, 5.4, and 5.6), discrimination (Articles 2.3 and 5.5), and transparency (Articles 7 and Annex B).

Russia argued that the EU member State bans conform to the relevant international standards (pursuant to Article 3.2), and are therefore presumed to be consistent with the relevant provisions of the SPS Agreement. In the alternative, Russia argued that it had objectively rejected the European Union's suggested disease free areas, and therefore the EU member State bans are not inconsistent with Russia's obligations under the SPS Agreement.

Russia argued that the EU-wide ban is not an SPS measure. Russia argued that, in the alternative, if the Panel were to consider it to be so, it conforms to the extent possible to the relevant international standards (pursuant to Article 3.1), and Russia was justified in adopting the EU-wide ban as a provisional measure (pursuant to Article 5.7). On these grounds, Russia argued that the EU-wide ban is not inconsistent with Russia's obligations under the SPS Agreement. Russia also argued that it did not apply its SPS measures in a discriminatory manner.

The Panel found that claims in respect of the EU-wide and the EU member State bans were within its terms of reference. The Panel also found that the EU-wide ban and each of the EU member State bans are SPS measures within the meaning of Annex A(1) of the SPS Agreement.

Regarding the claims on harmonization, the Panel found that the bans on imports of the products at issue from Estonia, Latvia, Lithuania, and Poland do not “conform to” the relevant OIE international standards and thus are inconsistent with Article 3.2 of the SPS Agreement. The Panel also found that the EU-wide ban, as well as the bans on imports of products treated to ensure destruction of ASF (treated products) from Estonia, Latvia, Lithuania, and Poland and on imports of products not treated to ensure destruction of ASF (non-treated products) from Estonia, Lithuania, and Poland are not “based on” the OIE standards and are thus inconsistent with Russia's obligation to “base” its SPS measures on international standards, pursuant to Article 3.1 of the SPS Agreement. Moreover, the Panel found that the ban on non-treated products from Latvia is “based on” the relevant international standards and is thus consistent with Article 3.1 of the SPS Agreement.

In respect of adaptation to regional conditions, the Panel found that Russia recognizes the concepts of pest- or disease-free areas and areas of low pest or disease prevalence in respect of ASF, and therefore, the EU-wide ban and the EU member State bans are not inconsistent with Russia's obligations under Article 6.2 of the SPS Agreement. The Panel also found that as at 11 September 2014, the European Union provided to Russia the necessary evidence to objectively demonstrate, pursuant to Article 6.3 of the SPS Agreement, that there are: (i) areas within the EU territory outside Estonia, Latvia, Lithuania, and Poland, which are free of ASF and are likely to remain so; as well as (ii) areas within Estonia, Latvia, Lithuania, and Poland that are free of ASF and are likely to remain so. However, the EU failed to provide to Russia the necessary evidence to objectively demonstrate that there are areas within Latvia that are likely to remain ASF-free. The Panel also found that Russia did not adapt the EU-wide ban and the bans on products from Estonia, Latvia, Lithuania, and Poland to the SPS characteristics of the areas from where the products originated nor to the ASF-related characteristics in Russia. Nor did Russia perform a risk assessment on which it could base its evaluation of the relevant elements to determine the SPS characteristics of the areas from which the products at issue originate. Therefore, the EU-wide ban and the bans on the imports of the products at issue from Estonia, Latvia, Lithuania, and Poland are inconsistent with Article 6.1 of the SPS Agreement.

Regarding Russia's SPS approval procedures, the Panel found that Russia's process of consideration of the request for recognition of ASF-free areas within the EU, including the four affected member States, falls within the scope of Article 8 and Annex C(1) of the SPS Agreement; and Russia required information that was not limited to what is necessary for the procedure at issue, thus breaching Annex C(1)(c), and completed the procedure with undue delay, thus breaching Annex C(1)(a), with the result that the procedure is also inconsistent with Article 8 of the SPS Agreement.

In respect of the scientific basis of the measures, the Panel found that the EU-wide ban and the EU member State bans do not fulfill the conditions to qualify as provisional measures pursuant to Article 5.7. The qualified exemption from the obligations in Articles 5.1, 5.2 and 2.2 of the SPS Agreement is thus not available to Russia. The Panel also found that Russia did not base the measures at issue on a risk assessment within the meaning of the SPS Agreement, thus breaching Articles 5.1 and 5.2. Moreover, the Panel found that as Russia has failed to rebut the presumption of inconsistency of the measures with Article 2.2 raised by the finding of violation of Articles 5.1 and 5.2, the measures are thus inconsistent with Article 2.2 of the SPS Agreement.

Regarding the application of the SPS measures, the Panel found that the EU-wide ban and the EU member State bans are inconsistent with Article 5.3 of the SPS Agreement because, by not basing the measures on a risk assessment, Russia could not have taken into account the relevant economic factors listed in Article 5.3 when assessing the risks of entry and spread of ASF. The Panel also found that the EU-wide ban and the EU member State bans are inconsistent with Article 5.6 of the SPS Agreement because they are significantly more trade restrictive than required to achieve Russia's appropriate level of protection (ALOP). In light of this and the lack of rebuttal by Russia of the presumption of inconsistency with Article 2.2 arising from a finding of inconsistency with Article 5.6, the Panel found the measures to be inconsistent with Article 2.2 of the SPS Agreement.

In respect of claims pertaining to discrimination, the Panel found that Russia's measures are inconsistent with Article 2.3, first sentence, of the SPS Agreement because they arbitrarily and unjustifiably discriminate between Members where identical or similar conditions prevail. The Panel also found that Russia's measures are inconsistent with Article 2.3, second sentence, because they are applied in a manner which constitutes a disguised restriction on international trade. The Panel exercised judicial economy with respect to the European Union's claims under Article 5.5.

The Panel declined to rule on claims on transparency due to the EU's failure to establish a prima facie case.

On 23 September 2016, the Russian Federation notified the DSB of its decision to appeal to the Appellate Body certain issues of law and legal interpretations in the panel report. On 28 September 2016, the European Union notified the DSB of its decision to cross-appeal.

On 21 November 2016, upon expiry of the 60-day period provided for in Article 17.5 of the DSU, the Appellate Body informed the DSB that the circulation date of the Appellate Body report in this appeal will be communicated to the participants and third participants shortly after the oral hearing, in the light of scheduling of parallel appeals, and shortage of staff in the Appellate Body Secretariat. On 16 December 2016, the Appellate Body informed the DSB that it expected to circulate the Appellate Body report in this appeal no later than 23 February 2017.

On 23 February 2017, the Appellate Body report was circulated to Members.

Following outbreaks of African swine fever (ASF) in certain regions of the European Union in 2014, Russia imposed restrictions on the importation of live pigs, pork, and certain pig products from the European Union. In particular, Russia adopted country-specific bans on imports of the products at issue from Estonia, Latvia, Lithuania, and Poland, which suffered ASF outbreaks, as well as a ban on imports of these products from all EU member States (the “EU-wide ban”).

Russia appealed the Panel findings that the EU-wide ban is a measure attributable to Russia, and that there was no limitation, in Russia's terms of accession to the WTO, on the Panel's assessment of the European Union's claims in respect of the ban. Russia further challenged certain Panel findings under Articles 6.3 and 6.1 of the SPS Agreement. First, it claimed that the Panel erred in finding European Union had provided the necessary evidence to objectively demonstrate to Russia that certain areas within the European Union's territory were, and were likely to remain, ASF-free. Second, Russia alleged that the Panel erred in finding that Russia had failed to adapt the ban on imports from Latvia to the ASF situation of areas within the Latvian territory. The European Union, for its part, appealed the Panel's finding that Russia recognizes the concepts of pest- or disease free areas and areas of low pest or disease prevalence in respect of ASF, and that the measures at issue are, therefore, n not inconsistent with Article 6.2 of the SPS Agreement.

The attribution of the EU-wide ban to Russia

Concerning Russia's claims as to the attribution of the EU-wide ban, the Appellate Body considered that the measure at issue consisted of Russia's decision to deny the importation of the products at issue from the whole European Union. The Appellate Body noted that the basis for the EU-wide ban stemmed from the requirement, set out in the bilateral veterinary certificates agreed with the European Union, that the entire European Union be free from ASF for a period of at least three years. However, according to the Appellate Body, the fact that the basis for the ban may not have been set out in Russian law does not alter the conclusion that the action of restricting imports of the products at issue is attributable to Russia. The Appellate Body further considered that the Panel was not barred from reviewing the WTO consistency of the EU-wide ban due to commitments set out in Russia's terms of accession to the WTO. Irrespective of the commitment in Russia's terms of accession regarding which veterinary certificate would be operative in the conduct of certain trade to Russia from other WTO Members, Russia remains under an ongoing obligation, pursuant to Article 6 of the SPS Agreement, to adapt its measures to regional SPS characteristics. Therefore, the Appellate Body upheld the Panel's findings that the EU-wide ban is a measure attributable to Russia, and that there was no limitation, in Russia's terms of accession to the WTO, on the Panel's assessment of the European Union's claims in respect of the ban.

Article 6.3 of the SPS Agreement

The first sentence of Article 6.3 of the SPS Agreement stipulates that an exporting Member claiming that areas within its territory are pest- or disease-free or of low pest or disease prevalence shall provide the necessary evidence to objectively demonstrate to the importing Member that such areas are and are likely to remain so. The Appellate Body rejected Russia's contentions that Article 6.3 requires consideration of the evidence relied upon by the importing Member and contemplates a certain period of time for the importing Member to evaluate and verify the evidence provided by the exporting Member. The Appellate Body explained that the regionalization process set out in Article 6 of the SPS Agreement does require an importing Member to evaluate all the relevant evidence concerning the areas that an exporting Member claims are pest- or disease free or of low pest or disease prevalence. Articles 6.1 and 6.2 relate to this evaluation, as well as to the period of time that the importing Member may take to conduct it. Article 6.3, however, does not stipulate disciplines of the importing Member with regard to the evaluation of evidence, but rather addresses the duties applying to the exporting Member. Hence, the Appellate Body upheld the Panel's finding that the European Union had provided the necessary evidence to objectively demonstrate to Russia, pursuant to Article 6.3, that certain areas within the European Union's territory were, and were likely to remain, ASF-free.

The relationship between Articles 6.1 and 6.3 of the SPS Agreement

Article 6.1 of the SPS Agreement requires Members to ensure the adaptation of their measures to the SPS characteristics of the area from which a product originates and of the area to which the product is destined. The Appellate Body considered that an exporting Member's failure to provide the evidence necessary to objectively demonstrate, pursuant to Article 6.3 of the SPS Agreement, that areas within its territory are pest- or disease-free or of low pest or disease prevalence will, in many cases, have implications for the importing Member's ability to assess the SPS characteristics of such areas and to adapt its measures accordingly, as required by Article 6.1. A panel may, in certain specific situations, find that an importing Member failed to comply with Article 6.1 irrespective of the exporting Member's non-compliance with Article 6.3. However, the panel should provide reasoning explaining why the circumstances of the dispute warrant a finding that the importing Member acted inconsistently with Article 6.1. As the Panel did not provide such reasoning, the Appellate Body modified the Panel's finding that Russia did not adapt the ban on imports from Latvia to the SPS characteristics of areas within the Latvian territory. However, the Appellate Body also noted the Panel's unappealed finding that Russia had failed to adapt its measure to the SPS characteristics of areas within the Russian territory to which the products at issue are destined, and considered that finding to constitute a sufficient ground to affirm the Panel's conclusion that the ban on imports of the products at issue from Latvia is inconsistent with Article 6.1 of the SPS Agreement.

Article 6.2 of the SPS Agreement

Article 6.2 of the SPS Agreement requires that Members recognize the concepts of pest- or disease-free areas and areas of low pest or disease prevalence. The Appellate Body disagreed with the Panel's finding that Article 6.2 requires merely an acknowledgement of such concepts in the form of abstract ideas, and considered that the Panel erred in deeming itself precluded from taking into account in its analysis under Article 6.2 specific instances of recognition or non recognition of the concept of regionalization. Instead, the Appellate Body considered that Article 6.2 requires the importing Member to provide an effective opportunity for the exporting Member to make the claim, addressed to the importing Member, that areas within its territory are pest- or disease free or of low pest or disease prevalence and thus render operational the concepts of pest- or disease-free areas and areas of low pest or disease prevalence. This may be achieved through, individually or jointly: a provision in the regulatory framework; the very SPS measure at issue; and a practice of recognizing pest- or disease-free areas or areas of low pest or disease prevalence. All these elements may be relevant to assessing a Member's compliance with Article 6.2, depending on the circumstances of the case and the particular instruments at issue. On this basis, the Appellate Body reversed the Panel's finding that Russia recognizes the concepts of pest- or disease free areas and areas of low pest or disease prevalence in respect of ASF, and that therefore the measures at issue are not inconsistent with Article 6.2 of the SPS Agreement.

At its meeting on 21 March 2017, the DSB adopted the Appellate Body report and the panel report, as modified by the Appellate Body report.

 

Reasonable period of time

At the DSB meeting on 19 April 2017, the Russian Federation stated that it intended to implement the DSB's recommendations and rulings in a manner that respects its WTO obligations and that it would need a reasonable period of time to do so.

On 19 May 2017, the European Union and the Russian Federation informed the DSB that in order to allow sufficient time for them to discuss a mutually agreed period under Article 21.3(b) or for an arbitration under Article 21.3(c) of the DSU to be completed, they agreed to be flexible on the applicable deadlines.

On 2 June 2017, the European Union and the Russian Federation informed the DSB that they had agreed that the reasonable period of time to implement the DSB's recommendations and rulings would be 8 months and 15 days. Accordingly, the reasonable period of time is set to expire on 6 December 2017.

 

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