DISPUTE SETTLEMENT

DS: Korea — Import Bans, and Testing and Certification Requirements for Radionuclides

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: 22 February 2018
Appellate Body Report circulated: 11 April 2019

  

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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 Japan.

On 21 May 2015, Japan requested consultations with Korea regarding: (a) import bans on certain food products; (b) additional testing and certification requirements regarding the presence of certain radionuclides; and (c) a number of alleged omissions concerning transparency obligations under the SPS Agreement. Korea's measures were adopted subsequent to the accident at the Fukushima Daiichi nuclear power plant in March 2011.

Japan claims that the measures are inconsistent with:

  • Articles 2.2, 2.3, 4, 5.1, 5.2, 5.5, 5.6, 5.7, 5.8, 7, and 8, paragraphs 1 and 3 of Annex B, and paragraphs 1(a), 1(c), 1(e) and 1(g) of Annex C, of the SPS Agreement; and
     
  • Article XXIII:1 of the GATT 1994.

On 11 June 2015, Chinese Taipei requested to join the consultations.

 

Panel and Appellate Body proceedings

On 20 August 2015, Japan requested the establishment of a panel. At its meeting on 31 August 2015, the DSB deferred the establishment of a panel.

At its meeting on 28 September 2015, the DSB established a panel. China, the European Union, Guatemala, India, New Zealand, Norway, the Russian Federation, Chinese Taipei and the United States reserved their third-party rights.

On 27 January 2016, Japan requested the Director-General to compose the panel. On 8 February 2016, the Director-General composed the panel.

On 5 August 2016, the Chair of the panel informed the DSB that the panel expected to issue its final report to the parties in June 2017, in accordance with the timetable adopted after consultation with the parties. On 29 May 2017, the Chair of the panel informed the DSB that, due to the complex procedural and factual nature of the case as well as scheduling conflicts, and after consultations with the parties, the panel expected to issue its final report to the parties in early October 2017. On 28 September 2017, the Chair of the panel informed the DSB that, due to the complex procedural and factual nature of the case as well as scheduling conflicts, and after consultations with the parties, the panel expected to issue its final report to the parties in October 2017. In its communication, the Chair also informed the DSB that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation depends on completion of translation.

On 22 February 2018, the panel report was circulated to Members.

This dispute concerns Korea's imposition of import bans and additional testing and certification requirements for radionuclide content following the Fukushima Dai-ichi Nuclear Power Plant accident on Japan's north-eastern coast on 11 March 2011. The measures affect imports of food products from Japan. Korea responded to the Fukushima Dai-ichi Nuclear Power Plant accident in Japan, in 2011, by imposing a variety of import control measures on Japanese products. The measures included import bans on specific fishery products from certain Japanese prefectures (product-specific bans) which were later extended to all fishery products from certain Japanese prefectures (blanket import ban) and testing and certification requirements on certain Japanese products.

The initial product-specific import bans mirrored internal restrictions imposed by Japan following the accident. However, as Japanese authorities began to lift their own restrictions on certain products from certain prefectures, the Korean ones remained. In this dispute, Japan challenged the Korean product-specific bans imposed in 2012 on Pacific Cod from 5 prefectures in Japan: Aomori, Fukushima, Ibaraki, Iwate and Miyagi prefectures, and on Alaska Pollock from Fukushima.

In 2013, Korea also imposed a blanket import ban on all Japanese fishery products from the following 8 prefectures: Aomori, Chiba, Fukushima, Gunma, Ibaraki, Iwate, Miyagi, and Tochigi. Japan challenged this ban with respect to 28 of its fishery products affected by this measure.

Prior to the accident Korea imposed random at-the-border testing for all imports for the presence of caesium or iodine within its tolerance levels. Shortly after the accident in 2011, Korea imposed certain additional testing requirements for Japanese products. These included requiring pre-export caesium and iodine content certificates for products from certain prefectures, testing all Japanese import consignments at-the-border for caesium and iodine, and imposing a requirement for testing for additional radionuclides if trace amounts of caesium or iodine were detected in non-fishery and livestock products. The requirement to test for additional radionuclides (additional testing requirements) was extended to fishery products in 2013. Of these measures, Japan challenged before the Panel the additional testing requirements.

Japan challenged Korea's import bans and additional testing requirements as being inconsistent with provisions of the SPS Agreement relative to: discrimination (Article 2.3), more trade restrictive than required (Article 5.6), transparency (Article 7 and Annex B), and SPS approval procedures (Article 8 and Annex C). Japan requested the Panel to find that, with respect to the import bans and the additional testing requirements:

  1. Korea's blanket import ban on 28 fisheries products, and Korea's additional testing requirements, are inconsistent with Articles 2.3 because they arbitrarily and unjustifiably discriminate against Japanese products, and they constitute a disguised restriction on international trade;
  2. Are inconsistent with Article 5.6 of the SPS Agreement as the measures are more trade restrictive than required;
  3. Korea failed to comply with the transparency requirements in Article 7 and paragraphs 1 and 3 of Annex B to the SPS Agreement as Korea's announcements of the imposition of these measures via press releases posted on government websites was not sufficient to comply with the obligation in Annex B(1) of the SPS Agreement, and that Korea's Enquiry Point's responses to two requests for documents and answers from Japan did not fulfil Korea's obligations under Annex B(3);
  4. Korea's additional testing requirements are inconsistent with Article 8 and paragraphs 1(a), 1(c), 1(e) and 1(g) of Annex C to the SPS Agreement.

The Panel found that the measures at issue were SPS measures within the meaning of Article 1.1 and Annex A(1)(b) of the SPS Agreement and determined that Korea had not shown that these measures fall within the scope of Article 5.7 of the SPS Agreement. The Panel found that Japan had not demonstrated that Korea acted inconsistently with its obligations under Article 8 and Annex C of the SPS Agreement with respect to the adoption and maintenance of the 2011 and 2013 additional testing requirements. The Panel found that Korea's 2011 additional testing requirements and 2012 product-specific import bans were neither discriminatory nor more trade-restrictive than required when adopted. However, the Panel found that the maintenance of these measures as well as the adoption and maintenance of the 2013 additional testing requirements was inconsistent with Korea's obligations under Articles 2.3 and 5.6 of the SPS Agreement. The Panel also found that Korea failed to comply with its transparency obligations under Article 7 and Annex B of the SPS Agreement with respect to the publication of all the measures and the duties of its SPS Enquiry Point. Specifically, the Panel's findings were:

  1. Korea's 2011 additional testing requirements and 2012 product-specific import bans were not more trade-restrictive than required when adopted.
  2. At the time of the Panel's establishment in September 2015, the 2011 additional testing requirements and 2012 product-specific import bans were maintained in a manner inconsistent with Article 5.6 of the SPS Agreement because they were more trade-restrictive than required.
  3. The 2013 additional testing requirements were adopted and maintained in a manner inconsistent with Article 5.6 of the SPS Agreement because they were and are more trade-restrictive than required.
  4. The blanket import ban (with the exception of the ban on Pacific cod originating from Fukushima and Ibaraki) was adopted in a manner inconsistent with Article 5.6 of the SPS Agreement because it was more trade-restrictive than required.
  5. The maintenance of the blanket import ban, with respect to all 28 fishery products from all 8 prefectures is maintained in a manner inconsistent with Article 5.6 of the SPS Agreement because it is more trade-restrictive than required.
  6. The 2013 additional testing requirements and the blanket import ban with respect to the 27 fishery products subject to Japan's claim from the 8 prefectures and Pacific cod from 6 prefectures, i.e. excluding Pacific cod from Fukushima and Ibaraki, were inconsistent with Article 2.3, first sentence of the SPS Agreement and, as a consequence, with Article 2.3, second sentence, when Korea adopted them.
  7. By maintaining the product-specific and blanket import bans on the 28 fishery products from the 8 prefectures and the 2011 and 2013 additional testing requirements on Japanese products, Korea acted inconsistently with Article 2.3, first sentence of the SPS Agreement and, as a consequence with Article 2.3, second sentence.
  8. Japan failed to establish that Korea acted inconsistently with the provisions of Annex C(1), subparagraphs (a), (c), (e) and (g) and, as a consequence, with Article 8 of the SPS Agreement with respect to the adoption and maintenance of the 2011 and the 2013 additional testing requirements.
  9. Korea acted inconsistently with Annex B(1), and as a consequence Article 7 of the SPS Agreement, with respect to the publication of all of the challenged measures.
  10. Korea's SPS Enquiry Point's failure to respond at all to Japan's follow-up query in conjunction with its earlier failure, is sufficient to establish that Korea acted inconsistently with the obligation in Annex B(3) and as a consequence Article 7 of the SPS Agreement.

On 9 April 2018, Korea notified the DSB of its decision to appeal to the Appellate Body certain issues of law and legal interpretations in the panel report. On 16 April 2018, Japan notified the DSB of its decision to cross-appeal.

On 8 June 2018, the Appellate Body informed the DSB that it would not be able to circulate the Appellate Body report in this appeal by the end of the 60-day period, nor within the 90-day time-frame provided for in Article 17.5 of the DSU. The Appellate Body referred to the substantially enhanced workload it faced in 2018, the existence of several appeals proceeding in parallel, and the increasing overlap in the composition of the Divisions hearing the different appeals owing to the vacancies on the Appellate Body. The Appellate Body also referred to the scheduling issues arising from these circumstances, the number and complexity of the issues raised in this and concurrent appellate proceedings, together with the demands that these concurrent appeals place on the WTO Secretariat's translation services, and the shortage of staff in the Appellate Body Secretariat.

On 11 April 2019, the Appellate Body report was circulated to Members.

Article 5.6 of the SPS Agreement: “more trade-restrictive than required”

In relation to Korea's claim that the Panel erred in its application of Article 5.6, Korea argued that the Panel disregarded Korea's appropriate level of protection (ALOP) by assessing Japan's proposed alternative measure against an incorrect standard. The Appellate Body noted that the Panel accepted Korea's ALOP as one consisting of quantitative and qualitative elements. To the Appellate Body, the Panel's analysis of the alternative measure proposed by Japan effectively focused only on the quantitative element of Korea's ALOP. The Appellate Body concluded that, having identified all elements of Korea's ALOP, the Panel erred by not accounting for all of these elements in its assessment under Article 5.6. The Appellate Body thus reversed the Panel's finding that Korea's measures were inconsistent with Article 5.6 for being more trade-restrictive than required to achieve Korea's ALOP.

Article 2.3 of the SPS Agreement: non-discrimination

In relation to Korea's challenge on appeal under Article 2.3, Korea argued, inter alia, that the Panel erred in finding that “similar conditions prevail” in Japan and other Members. To Korea, the Panel erroneously treated the risk present in products as the only relevant “condition” under Article 2.3, to the exclusion of conditions in the territories of different Members.

The Appellate Body found that the Panel erred in its interpretation of Article 2.3 by considering that relevant “conditions” under this provision may be exclusively limited to “the risk present in products”, to the exclusion of other conditions, including territorial conditions, that have the potential to affect the products at issue. Regarding the Panel's application of Article 2.3, the Appellate Body considered that the Panel effectively relied on actual contamination levels in food products without reconciling its findings as to pertinent territorial conditions affecting the potential for contamination of food. To the Appellate Body, the analysis under Article 2.3 entails consideration of all relevant conditions in different Members, including territorial conditions that may not yet have manifested in products but are relevant in light of the regulatory objective and specific SPS risks at issue. The Appellate Body thus reversed the Panel findings under Article 2.3. In light of the reversal, the Appellate Body did not consider it necessary to address Korea's additional claims of error regarding arbitrary or unjustifiable discrimination, and whether Korea's measures constitute disguised restrictions on international trade.

Article 5.7 of the SPS Agreement: provisional measures

In relation to Korea's claim that the Panel erred in finding that Korea's measures do not fulfil the requirements of Article 5.7, Korea argued that these findings were outside the Panel's terms of reference. The Appellate Body noted that, before the Panel, Japan had not made a claim of inconsistency under Article 5.7. The Appellate Body also noted that Korea did not invoke Article 5.7 as a defence. Rather, Korea referred to this provision as relevant context to the Panel's assessment of Japan's claims under other provisions of the SPS Agreement. Thus, the Appellate Body considered that, by making these findings under Article 5.7, the Panel exceeded its mandate, thereby acting inconsistently with Articles 7.1 and 11 of the DSU. For this reason, the Appellate Body declared the Panel's findings under Article 5.7 moot and of no legal effect.

Article 7 and Annex B(1) to the SPS Agreement: publication obligations

Korea claimed that the Panel erred in its interpretation of Annex B(1) in finding that the publication of an SPS regulation must contain sufficient content such that the interested Member will know “the conditions (including specific principles and methods) that apply to its goods”. The Appellate Body considered that Members must ensure that an Annex B(1) publication be accessible to interested Members and contain sufficient information, including the product scope and the requirements of the adopted SPS regulation, to give the means to interested Members to become familiar with that SPS regulation. The Appellate Body modified the Panel's finding and found instead that whether an Annex B(1) publication needs to include the “specific principles and methods” may only be determined with reference to the specific circumstances of each case, such as the nature of the SPS regulation at issue, the products covered, and the nature of the SPS risks involved.

In relation to Korea's claim that the Panel erred in applying Annex B(1) to the blanket import ban, the Appellate Body agreed with the Panel that the press release at issue did not include the full product coverage of the measure. In relation to Korea's claim that the Panel erred in applying Annex B(1) to the 2011 and 2013 additional testing requirements, the Appellate Body agreed with the Panel that the press releases did not contain certain requirements of the measures. In relation to Korea's claim that the Panel erred in finding that Korea had not shown that interested Members would have known to look to certain websites for information on the challenged measures, the Appellate Body considered that, in light of the case presented by Japan, it was for Korea to provide some evidence or explanation regarding this question. Korea, however, had failed to do so. The Appellate Body thus upheld the Panel findings at issue.

Korea claimed that the Panel erred under Article 11 of the DSU in faulting Korea for not having provided archived versions of the webpages containing the press releases announcing the measures at issue. The Appellate Body noted that the Panel did not address in its analysis evidence on its record that could be indicative of the publication dates of the press releases. To the extent the Panel needed evidence on the publication dates of the press releases on websites, the Appellate Body considered that Article 11 of the DSU required the Panel to seek such evidence from both parties to the dispute and only then draw appropriate inferences. The Appellate Body thus found that the Panel acted inconsistently with Article 11 of the DSU.

Article 7 and Annex B(3) to the SPS Agreement: SPS enquiry points

Korea claimed that the Panel erred in its interpretation and application of Annex B(3) in finding that Korea acted inconsistently with this provision because its SPS enquiry point provided an incomplete response to one request for information by Japan and failed to respond to another. The Appellate Body considered that a single failure of an enquiry point to respond would not automatically result in an inconsistency with Annex B(3). That said, whether and the extent to which an enquiry point actually provides answers and documents are not irrelevant for an assessment under Annex B(3). To the Appellate Body, these elements inform an assessment of whether “one enquiry point exists which is responsible for the provision of answers to all reasonable questions from interested Members as well as for the provision of relevant documents” under Annex B(3). The Appellate Body thus reversed the Panel findings at issue.

Annex C(1)(a) to the SPS Agreement: presumption of likeness

Japan claimed that the Panel erred in its interpretation and application of Annex C(1)(a) in articulating the conditions for presuming likeness under this provision and in finding that Japanese products and Korean domestic products could not be presumed to be “like”. The Panel accepted that, in principle, likeness may be presumed for purposes of Annex C(1)(a), as it can be done under the GATT 1994 and the GATS when a measure distinguishes between products (or services and service suppliers) solely based on origin. The Appellate Body was not convinced that the Panel could have done so under the SPS Agreement without further analysis. Given that SPS measures are defined in Annex A(1) as measures applied to protect human, animal, or plant life or health or to prevent or limit certain damage, the question arises whether a procedure under Annex C(1)(a) is at all capable of distinguishing between products based exclusively on their origin. The Appellate Body, however, considered that the Panel correctly concluded that the measures in this case did not distinguish between products solely based on origin. Upholding the Panel findings at issue, the Appellate Body found that the Panel did not err in declining to presume that Japanese products and Korean domestic products are “like”.

Panel's treatment of evidence and selection of experts

Both Korea and Japan claimed on appeal that the Panel erred in its treatment of evidence when assessing Korea's measures under Articles 2.3 and 5.6 of the SPS Agreement. Korea also claimed that the Panel acted inconsistently under Article 11 of the DSU by appointing two experts in disregard of Korea's due process rights. The Panel had relied on these experts' responses in assessing Korea's measures under Articles 2.3, 5.6, and 5.7 of the SPS Agreement. Having reversed the Panel's findings under Articles 2.3 and 5.6, and having declared the Panel's findings under Article 5.7 moot and of no legal effect, the Appellate Body did not consider it necessary to examine further these claims of error on appeal.

 

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