wto dispute settlement procedures introduction - … settlement in the wto: aims – securing...

WTO Dispute Settlement

Procedures

Introduction

Dispute Settlement in the WTO:

AimsAims

– Securing compliance with the covered

Agreements

– Preserving the rights and obligations of

Members under the covered agreements

A brief reminder: A brief reminder:

Dispute Settlement under GATT 1947Dispute Settlement under GATT 1947

•• Articles XXII and XXIII of GATT 1947Articles XXII and XXIII of GATT 1947

• nullification and impairment

• violation/ “non-violation”

Practice under GATT 1947

Key features of the WTO dispute settlement system

An integrated systemAn integrated system

A quasiA quasi--judicial Naturejudicial Nature

• Compulsory jurisdiction

• Detailed procedures and deadlines

• Quasi-automaticity in the proceedings

• Panel and Appellate review


ObjectivesObjectives

to secure a “positive solution” to disputes

(Art. 3.7 DSU)

through a mutually agreed solution if possible…

……If not, recourse to panel process If not, recourse to panel process

……or alternative modes of dispute resolutionor alternative modes of dispute resolution


ScopeScope

•• An integrated An integrated

systemsystem:

• Applies to all the WTO multilateral agreements (Appendix 1)

• A single set of rules for all disputes (Art 23)

• Only a few special or additional rules in some

covered agreements (Appendix 2)


Main playersMain players

•• The Parties: WTO Members onlyThe Parties: WTO Members only

•• The DSB (all the Members)The DSB (all the Members)

•• The Panel ( 3 or 5 panelists, ad hoc) The Panel ( 3 or 5 panelists, ad hoc)

•• AB (7 persons)AB (7 persons)

•• WTO SecretariatWTO Secretariat


The DSB The DSB

Trade Policy Review Body General Council Dispute Settlement Body

Ministerial Conference

DSB CHAIRPERSON (2004):

Ambassador Amina Mohamed (Kenya)

Dispute Settlement in the WTO:The DSB (II)DSB (II)

• Specific decision-making rules: “reverse

consensus” applies to key decisions:

- establishment of panels

- adoption of panel and AB reports

- authorization of “retaliation”


Main stagesMain stages

•• Consultation phaseConsultation phase

•• Panel reviewPanel review

•• [AB review][AB review]

•• Adoption of report(s) by the DSBAdoption of report(s) by the DSB

•• ImplementationImplementation

Good offices,

conciliation and mediation

possible at any moment


Procedures

Consultations and panel procedures


Main stagesMain stages

•• Consultation phaseConsultation phase

•• Panel reviewPanel review

•• [AB review][AB review]

•• Adoption of report(s) by the DSBAdoption of report(s) by the DSB

•• ImplementationImplementation

Good offices,

conciliation and mediation

possible at any moment


Consultations (I)Consultations (I)

� Request made by one or more Members to another Member

� Confidential process among the parties

� “attempt to obtain a satisfactory adjustment of the matter”

(Article 4 of the DSU)


Consultations (II)Consultations (II)

The request for The request for

consultationsconsultations

(Art. 4.4 DSU)(Art. 4.4 DSU)

• Indicates the reasons for the request: – identification of the

measures

– legal basis for complaint

• Addressed to the Member concerned, with copy to DSB and relevant Councils and Committees

• Circulated to Members as document “WT/DSxxx/1”


Consultations (III)Consultations (III)

Joining in Joining in consultationsconsultations

(Article 4.11 DSU)(Article 4.11 DSU)

� Possible if :

- Consultations requested under Article XXII of GATT (or corresponding provision)

- Substantial trade interest

� To be accepted if Member requested to consult agrees that well-founded

� Acceptance notified to parties and DSB

Deadline: within 10 days of circulation

of request for

consultations


Consultations (IV)Consultations (IV)

� Requirement to respond to the request within 10 days and enter into consultations in good faith within 30 days

� If consultations succeed in resolving the matter: notification of mutually agreed solution

� If consultations fail to resolve the matter after 60 days .....

Right to request the establishment of a panel

Dispute Settlement in the WTO:Consultations – Overview

MUTUALLY AGREEDSOLUTION

REQUEST FOR THEESTABLISHMENT

OF A PANEL

Failure to settle the dispute( 60 days from receipt of

request for consultations)

Entry into consultations within 30 days They do not enter into consultations within 30 days

Reply within 10 days Requested Member does not reply

Request for Consultations


Panel Procedures Panel Procedures -- overviewoverview

Circulation of panel report to Members

Panel proceedings(see details below)

Composition of the panel(Proposals by Secretariat - DG nomination if necessary)

Establishment of the panel(reverse consensus applies at second meeting)

Panel procedures (I):

Establishment of PanelsEstablishment of Panels

The request for panel The request for panel establishmentestablishment

(Article 6 DSU)

- identify the specific

measures at issue

- brief summary of the

legal basis (claims)

Establishment of the panel: reverse consensus

(at second meeting)

Panel procedures (II):Third parties

Expression of third Expression of third party interestparty interest:

• “substantial interest” in the

matter

Article 10 DSU

Rights of third parties:

-receive the first written submissions

- make written submissions to the Panel

- Right to be heard by the Panel

Panel procedures (III):

Terms of ReferenceTerms of Reference

Terms of reference:Terms of reference:(Art. 7 DSU)

–– Standard terms of Standard terms of

referencereference

–– Special terms of Special terms of

referencereferenceImportance of the request for

establishment of the panel!

(Ex: Guatemala – Cement I)

Panel procedures (IV):Multiple complaints

Whenever feasible :

AA single panelsingle panel to examine more than

one request relating to the same matter

If not feasible:

distinct panels with distinct panels with same persons as same persons as panelists and panelists and harmonization of harmonization of timetime--tablestables, if possible

Ex.: US – Continued Dumping

and Subsidy Offset Act of

2000 (‘Byrd Amendment’)

WT/DS217 and WT/DS234

Panel Procedures (V): Panel Procedures (V):

Panel compositionPanel composition

“well-qualified government and/or non-governmental individuals”

- no nationals of parties or third parties (unless parties agree)

- rules of conduct

Secretariat proposals

- indicative list of panelists

- “compelling reasons” for rejection

If no agreement: nomination by DG upon request of either

party

(Article 8 DSU)

Panel Procedures (VI): Panel Procedures (VI):

Function of panelsFunction of panels

““ ... ... a panel should make an objective assessment

of the matter before it, including an objective

assessment of” ::

- the facts of the case

- the applicability of the relevant covered agreements

- conformity with the relevant covered agreements

Article 11 DSU

Panel procedures (VII):

Right to seek information

• Right to seek information (Art. 13 DSU)

• Issue: “Amicus Curiae” briefs

• Expert review groups (Appendix 4 DSU)

Panel Procedures (VIII): Timetable

Final report circulated to all Members

Final report issued to parties

Interim review

Issuance of the interim report to the parties

Issuance of descriptive partof the report to the parties

Second substantive meeting with the parties

Receipt of written rebuttalsof the parties

First substantive meeting with the parties and third partiesThird party session

Receipt of first written submissions of the parties

Panel Procedures (IX): Panel Procedures (IX):

The panel reportThe panel report

The panel report should contain:

– the findings of fact

– the applicability of the relevant provisions

– the basic rationale behind any findings and

recommendations that it

makes

(Article 12.7 DSU)

Structured in two parts:

- Descriptive part

(parties’ arguments)

- Findings and

conclusions

PanelPanel Procedures (X): TimeframesProcedures (X): Timeframes

General rule: 6 months from

composition/terms of reference to issuance of

final report of the Panel to

the parties (Article 12.8 DSU)

….Unless the Panel cannot!!(Article 12.9 DSU)

General rule: 9 months

from establishment of Panel

to consideration of report for

adoption (if no appeal)

12 months where report is appealed (Article 20 DSU)

Recap of main stages so far

DSB adopts Panel / Appellate Report(s)

Appellate Review andReport Issued(60-90 days)

Report circulated to Members(9 months from establishment of panel)

Panel review and report issued to parties(6 months from panel composition)

Composition of the panel

Panel establishedby DSB

Consultations(60 days)


Procedures

Appellate Review


Appellate Review Appellate Review

Standing Appellate Body, appointed by the DSB

7 members

Appeal only available on issues of law and legal interpretations


Appellate ReviewAppellate Review

Rules applicable to Appellate Review:

– Dispute Settlement Understanding

(Article 17; Article 16.4; Articles 1, 3, 18

and 19)

– Working Procedures for Appellate Review

• Divisions of 3

• Collegiality (Exchange of Views)

• Confidentiality

• Strict Time Frame


Features of Appellate ReviewFeatures of Appellate Review


Appellate Procedures Appellate Procedures

Circulation of the Report

Exchange of Views

Oral Hearing

Written Submissions

Notice of Appeal

• What can the Appellate Body do?

~ Findings and Conclusions (Recommendation)

~ Uphold, modify or reverse the findings and

conclusions of panels

~ No remand authority, but it may

“complete the legal analysis”


Content and circulation of AB ReportContent and circulation of AB Report


Procedures

Implementation

Implementation - Overview

Compliance Disagreement on compliance No compliance

Surveillance by DSB

Implementation within reasonable period of time(If required: arbitration to determine RPT)

DSB adopts report(s)"Recommendations and rulings"

The DSB recommendationsThe DSB recommendations

• If violation: recommendation that the the

MemberMember bring the measures into bring the measures into

conformityconformity

(Art. 19 DSU)

• If no violation but nullification or

impairment:

Mutually satisfactory adjustmentMutually satisfactory adjustment (Art.

26 DSU)

Statement of intentionsStatement of intentions

Within 30 days of adoption of report, Member concerned informs the DSB of its intentionsintentionsin respect of implementation of the recommendations and rulings

(Art. 21.3 DSU)

The The ““RPTRPT””

• Preferably, immediate compliance

• If necessary: Determination of “reasonable period of reasonable period of

timetime” for implementation (Art. 21.3 DSU) :

• proposed by Member and approved by DSB, or

• mutually agreed by the parties, or

• determined through arbitrationarbitration

Guideline: 15 months from the date of

adoption (Art. 21.3(c))

Compliance proceedings

•• Is it properly implementedIs it properly implemented??

If there is disagreement: If there is disagreement: (Art. 21.5 DSU)(Art. 21.5 DSU)

–– Compliance panel (original panel Compliance panel (original panel preferred)preferred)

–– Circulation of the report: 90 daysCirculation of the report: 90 days

Temporary remedies (I)Temporary remedies (I)

Compensation: Compensation: (Art. 22 DSU)

– voluntary

– negotiated

– compatible with WTO Agreements

If no compensation agreed within 20 days after expiry of reasonable period of time…. “Suspension of concessions”

Temporary remedies (II)Temporary remedies (II)

Suspension of concessionsSuspension of concessions::

• same sector/other sector/other agreement(Art. 22.3 DSU)

• level of suspension: “equivalent to the level of

nullification or impairment” (Art. 22.4 DSU)

• authorization to suspend: within 30 days of

expiry of reasonable period of time (Art. 22.6 DSU)

• arbitration on: level of suspension or on

principles of Art. 22.3 DSU

Implementation issues

DSB authorization for suspension of concessions

If requested: Arbitration on level of suspension and principles

If compensation is not agreed: Request for DSB authorization for suspension of concessions

If the Member concerned has NOT complied: Negotiations to agree mutually satisfactorycompensation

Compliance proceedings(referral to original panel)

Surveillance of Implementation Surveillance of Implementation --

RecapRecap

• Statement of intentions (Art. 21.3 DSU)

• Status reports on implementation (Art. 21.6 DSU)

• If Member fails to bring measure into conformity within reasonable period of time, possibility of temporary measures : compensationcompensation or “suspension suspension of concessionsof concessions” (retaliation)

Developing Countries (I)Developing Countries (I)

•• Specific provisions for developing countriesSpecific provisions for developing countries:– composition of panels (Art. 8.10 DSU),

– consultations (Art. 4. 10 DSU),

– panels procedures (Art. 12. 10 and 12.11 DSU)

– DSB shall pay particular attention to matters affecting developing countries interest (Art. 21.2 DSU)

– DSB shall take into account the trade coverage of the measures complained and their impact on the economy of the developing country (Art. 21.8 DSU)

•• Legal assistanceLegal assistance (Art. 27.2 DSU)

Developing Countries (II)Developing Countries (II)

•• Reference to 1966 decisionReference to 1966 decision (Art. 3.12 DSU)

– Good Offices

– Information available upon request of DG

– Timeframe reduced to 60 days

•• LeastLeast--Developed Country MembersDeveloped Country Members -- LDCLDC ( Art. 24

DSU)

– Due restraint exercised in raising matters involving a LDC Member

– Due restraint exercised in asking compensation or seeking authorization to suspend concessions

– Good offices offered upon request of LDC Member


Negotiations for the Negotiations for the

clarification and clarification and

improvement of the DSUimprovement of the DSU

Before Doha: the DSU review(s)

• Pre-Seattle DSU review, intended for inclusion in Seattle agenda

• Pre-Doha proposals - the “co-sponsors’ text”

The Doha Mandate

Doha Declaration, paragraph 30:

– “improvements and clarifications of the DSU”

– Based on “work done thus far as well as

additional proposals”

– “aim to agree on improvements and

clarifications not later than May 2003”

Framework for the negotiations: the Special sessions of the DSB

– Established by the TNC in February 2002

– Chairman: Ambassador Balás (Hungary) (until Feb. 04); Ambassador Spencer (from March 04)

– Document series: TN/DS/….

The work programme until May 2003

• 42 proposals submitted - Diverse levels of ambition

• 13 Formal meetings and many informal meetings until May 2003

• 5 stages :

– General discussion

– Submission of proposals (target date: summer 2002)

– issue-by-issue discussion (completed in December 2002)

– specific proposals

– negotiation of draft text

The Doha Mandate - extension

• No agreed text by end of May 2003 –Chairman’s report and text (TN/DS/9)

• Extension of timeframe - General Council, 24 July 2003:

– Agreement to continue– Based on work to date, including proposals by

Members and Chairman’s text of May 2003

– aim to complete the work by May 2004

Second phase of negotiationsJuly 2003 to May 2004

– “Discussion of conceptual issues” - Mexican “diagnosis paper”

– Stock-taking meetings

– Group of 6/7 - informal contribution (job (04)52)

– Chairman’s report to the TNC, 30 June 2004 (TN/DS/10):

• Agreement to continue• No proposed target-date

• Recommendation adopted in “July Package” decision of 1 August 2004

Third phase of negotiationsAugust 2004 to present

– Linkages between the DSU negotiations and the rest of the DDA negotiations, even though outside the single

understanding

– Lack of substantive progress in the DDA negotiations have affected the pace of the DSU negotiations

– Intensification of work in 2006-2007, although the suspension of the DDA negotiations in July 2006 affected the DSU negotiations

– Work resumed in earnest in February 2007 after the resumption of the DDA negotiations

– Text-based negotiations

Negotiating Issues: Consultations

• Shorter consultation period?

• Enhancing the possibilities to join consultations?

Negotiating Issues: Panel

Establishment and composition

• Early establishment (at first meeting)?

• Permanent panelists?

Negotiating Issues: Panel phase (I)

• Enhanced third party rights

— Participation at all stages?

• “Transparency”

— publicly available submissions?

— Meetings open to the public?

— Amicus Curiae briefs?

Negotiating Issues: Panel phase (II)

• Streamlined procedures?

— Descriptive part

— Interim review

• Separate opinions?

• Referral of questions of interpretation to General Council?

• Increasing the number of Appellate Body Members?

• remand authority?

• more member control?

– suspension of appeal

– interim review

– partial adoption of reports

Negotiating Issues: Appellate Body

Negotiating issues: Compliance

proceedings

• Compliance panel proceedings

– Consultations required?

– Right to appeal?

• “Sequencing”: Compliance panel and retaliation,

which comes first?

Negotiating issues: Remedies (I)

• Strengthening compensation as an alternative to retaliation?

– front-loading the determination of the level of nullification and impairment

– Monetary compensation, MFN?

– Early right to compensation?

Negotiating issues: Remedies (II)

• Authorization to retaliate:

— retroactive determination?

— collective retaliation?

—Cross-retaliation?

— negotiable right?

• Carousel

• Termination of retaliation

Negotiating Issues: Remedies (III)

• Preventive measures?

• Doubling the amount of retaliation for developing countries?

• Retroactive remedies?

Negotiating issues: S & D

• For example:

—2 developing country panelists upon request?

—longer timeframes?

—Mandatory mediation, good offices and conciliation

—Development perspective

—Technical assistance

Negotiating issues: Timeframes

• Maintaining overall timeframes?

• Proposals for saving time in the proceedings

– establish panels at the first DSB meeting ?

– reduce consultations from 60 to 30 days?

– Extended timeframe for developing countries?

– pros and cons of “streamlining”

Negotiating issues: Chairman’s

Text; 28 May 2003

• Consultations:

– conditions for being joined in consultations

– consultations in LDC capitals

• Panel establishment and composition:

– Panel establishment at first meeting

– Developing country and LDC panelists


Text; 28 May 2003

• Panel proceedings:

– enhanced third-party rights

– “privileged” information

– reflection of S and D provisions


Text; 28 May 2003

• Appellate proceedings:

– flexibility in number of AB members

– interim review

– remand authority


Text; 28 May 2003

• Compliance proceedings

– clarification of sequence

– detailed procedures

• Early determination of level of N and I by

agreement of parties (after adoption of report)


Text; 28 May 2003

• Compensation

– no maximum timeframe for negotiating

– detailed procedures

• Suspension of concessions

– enhanced surveillance

– procedures for termination or revision


Text; 28 May 2003

• Litigation costs

• Technical assistance and capacity-building

• Strengths and Weaknesses of the DSU?

• What outcome for the negotiations?

Conclusion

A WTO Disputefrom A to Z:

US – Shrimp (WT/DS/58)

EC – Sardines (WT/DS/231)

The policy objective:

protecting sea turtles

Shrimps and turtles Shrimps and turtles –– The underlying issue

The conservation issue:

The greatest threat to turtle survival is drowning in shrimp trawl nets

Sea turtles are a highly migratoryspecies

Shrimps and turtles Shrimps and turtles –– The measures at issue

The measures at issue

•Section 609 of Public Law 101-162 prohibits the importinto the US of shrimp harvested using technology that might adversely affect sea turtles

•Exporters to the US must require their fishermen to use TEDs

•1996 Regulatory Guidelines detail comparability and certification criteria

A TED is a grip trapdoor installed inside a trawling net which allows shrimp to

pass to the back of the net while directing sea turtles and other unintentionally

caught large objects out of the net.

PartiesPanel

• Complainants: India, Malaysia, Pakistan and Thailand

• Respondent: United States

• Third Parties: Australia; Colombia; Costa Rica; Ecuador; El Salvador; the European Communities, Guatemala; Hong Kong, China; Japan; Mexico, Nigeria, the Philippines, Senegal, Singapore, Sri Lanka and Venezuela

Appellate Body

• Appellant: United States

• Appellees: India, Malaysia, Pakistan and Thailand

• Third Participants: Australia; Ecuador; the European Communities; Hong Kong, China; Mexico and Nigeria

Timeline

Consultations

Requested ......

Panel

• Requested: January-February 1997

• Established: February-April 1997

• Composed: 15 April 1997

• Report circulated: 15 May 1998

Appellate Body

• Notice of appeal: 13 July 1998

• Report circulated: 12 October 1998

• Adoption: 6 November 1998

The US The US -- Shrimp Case Shrimp Case ––

Basic elementsBasic elements

India, Malaysia, Pakistan and Thailand

(complainants)

• Import prohibition on shrimp is inconsistent with:

– Article XI

– Article I

• Article XX(b) and (g) could not be invoked

The US The US -- Shrimp Case: Shrimp Case:

ClaimsClaims

United States

(respondents)

• The measure is justified under Article XX (b) and (g)

On Article XX

•Unjustifiable discrimination: The measure discriminates between certified and non-certified countries

•Sequence of analysis: OK to begin with the “chapeau”

The US - Shrimp CasePanel findings

Procedural issue: Amicus Curiae

Cannot accept unsolicited information unless attached to a party’s submission

On Article XI

•US measure contrary

to the “no restriction”

requirement and thus inconsistent with

Article XI

ConclusionThe measure is

inconsistent with

Article XI and cannot be justified under

Article XX

On Article XX “chapeau”

•Discrimination in application: no room for inquiry into the appropriateness of exporters’ regulatory programmes

•unjustifiable because– no serious negotiations before unilateral

ban

– certification process lacked flexibility

The US The US -- Shrimp CaseShrimp Case

Appellate Body findingsAppellate Body findings

Procedural Issues

Amicus Curiae

Notice of Appeal

On Article XX(g)

•reversed sequence of analysis

•“exhaustible natural resources”

•“relating to”conservation

•Art.XX(g)

ConclusionMeasure not justified under

Art.XX. Fell within paragraph

(g) but failed to meet

“chapeau” requirements

•Revised Guidelines for the Implementation of Section 609

•Original guidelines: certify countries only after they had shown that

they required the use of TEDs

•Under the Revised Guidelines:

– countries may apply for certification even if they do not require the use of TEDs

– must demonstrate implementation and enforcement of a "comparably effective" regulatory programme to protect sea turtles without the use of TEDs

– new practice takes “fully into account any demonstrated differences between the shrimp fishing conditions in the US and those in other nations”

The US The US -- Shrimp Case (Art. 21.5)Shrimp Case (Art. 21.5)The measure at issue

Parties

Panel

• Complainant: Malaysia

• Respondent: United States

• Third Participants: Australia, Canada, Ecuador, the European Communities, Hong Kong (China), India, Japan, Mexico, Pakistan and Thailand.

Appellate Body

• Appellant: Malaysia

• Appellees: United States

• Third Participants: Australia, the European Communities, Hong Kong (China), India, Japan, Mexico and Thailand

TimelinePanel• Requested: 12 October 2000

• Established: 23 October 2000

• Composed: 23 October 2000

• Circulated: 15 June 2001

Appellate Body

• Notice: 23 July 2001

• Circulated: 22 October 2001

• Adoption: 21 November 2001

The US The US -- Shrimp Case (Art. 21.5)Shrimp Case (Art. 21.5)

Malaysia

• Section 609 as currently applied

continued to violate Article XI

• The US is not entitled to impose any

prohibition before an international

agreement allowing it to do so has

been concluded

• On appeal, Malaysia claimed that

the panel erred in finding that the

US measure was applied in a

manner that no longer constituted a

means of “arbitrary or unjustifiable discrimination” under Art. XX.

United States

• The measure is not compatible with Article XI

• But it is justified under Article XX(g)

• The Revised Guidelines remedy all inconsistencies identified by the Appellate Body under the chapeau of Article XX

The US The US -- Shrimp Case (Art. 21.5)Shrimp Case (Art. 21.5)

Claims and argumentsClaims and arguments

On Article XX(g): The US measure is provisionally justified under Article XX(g)

The US The US -- Shrimp Case (Art. 21.5)Shrimp Case (Art. 21.5)Panel findings

CHAPEAU

The US met the negotiation effort criteria – The US demonstrated that it made serious good

faith efforts to conclude an international agreement on the protection and conservation of sea turtles.

The implementation measure is not rigid

– A Member seeking certification seems to have the possibility to demonstrate that its programme - even though not

requiring the use of TEDs, is comparable to that of the US.

The design, architecture and revealing structure of Section 609 together with the Revised Guidelines, as actually applied by the US authorities, demonstrate that the implementing measure does not constitute a disguised restriction on international trade.

NONO

NONO

NONOArbitrary Discrimination?

Unjustifiable discrimination?

Disguised restriction

on international trade?

Conclusion:: The measure is inconsistent with Article XI but is justified under Article XX

The US should have negotiated and concluded an international agreement before imposing an import ban

Conclusion: Conclusion: AB upheld the panel report

The US - Shrimp Case (Art. 21.5)Appellate Body findings

Because the measure

lacked flexibility, it

resulted in arbitrary or

unjustifiable

discrimination

Malaysia claims

AB rejected Malaysia’s claim and agreed with the panel that conditioning market access on the adoption of a programme comparable in effectiveness allows for sufficient flexibility

Appellate Body Replies

AB rejected Malaysia argument that avoiding arbitrary or unjustifiable discrimination required the conclusion of an international agreement

The policy objective:

consumer protection

EC EC –– Sardines Sardines –– The underlying issue

What’s in a name:

Which species of fish can

be called sardines and

be marketed under that

name

EC EC –– Sardines: Sardines: The measures at issue

The measure at issue

EC Regulation establishing commonmarketing standards for preserved sardines, including a specification that only productsprepared from Sardina Pichardus could be marketed/labelled as preserved sardines

Products at issue: Two species of sardines found in different waters – sardina

pilchardus walbaum found maily in Eastern North Atlantic, Mediterranean sea and the Black sea; and sardinops sagax sagax found mainly in the Eastern Pacific along the coasts of Chile and Peru.

PartiesPanel

• Complainants: Peru

• Respondent: European Communities

• Third Parties: Canada; Chile; Colombia; Ecuador; United States and Venezuela

Appellate Body

• Appellant: European Communities

• Appellees: Peru

• Third Participants: Canada; Chile; Ecuador; United States and Venezuela

Timeline

Consultations

Requested ......

Panel

• Requested: 7 June 2001

• Established: 24 July 2001

• Composed: 11 Sept 2001

• Report circulated: 29 May 2002

Appellate Body

• Notice of appeal: 28 June 2002

• Report circulated: 26 Sept 2002

• Adoption: 23 October 2002

The EC The EC -- Sardines Case Sardines Case ––

Basic elementsBasic elements

Peru(complainant)

• The EC’s regulation was a technical regulation and was not based on the relevant international standard and as such was inconsistent with:

– Articles 2.4, 2.2 &2.1 of the TBT Agreement

– Article III:4 of the GATT 1994

The EC The EC -- Sardines Case: Sardines Case:

ClaimsClaims

European Communities

(respondent)

• Only standards that have been adopted by consensus are “relevant”.

• Codex Stan 94 is not a "relevant international standard" because its product coverage is different from that of the EC Regulation.

On Article Art2.4•Codex Stan 94 was a relevant international standard; It was not‘ineffective’ or ‘inappropriate’ to fulfilthe ‘legitimate objective’ pursued by the EC’s regulation

CONCLUSION: EC’s Regulation wasinconsistent with Article 2.4 of the TBT Agreement

The EC - Sardines CasePanel findings

Burden of proof: As the party asserting the affirmative of a particular claim or

defence, the EC had the burden of proof in establishing that Codex Stan 94 was ineffective or inappropriate to

fulfil its legitimate objectives

On whether the EC’s measure was a technical

regulation

•The Panel referred to thethree criteria laid down by the Appellate Body in EC-Asbestos, namely (i) the document applied to an identifiable product or group of products; (ii) itlays down one or more product characteristics; (iii) compliance with theproduct charactersiticswas mandatory and heldthat it was a technicalregulation

•On the issue of which party bore the burden of proof, the AB reversed the ruling of the Panel and said that it was Peru which had to establish that the relevant international standard was not ‘ineffective’or’ ‘inappropriate’ to fulfil the legitimate objective pursued by the EC Regulation. •Peru had discharged that burden

The ECThe EC-- Sardines CaseSardines Case

Appellate Body findingsAppellate Body findings

Procedural Issues: Amicus Curiae

Held that it had the authority to accept amicus submissions from a private individual and from Morocco even though it did not participate as a third party in the panel proceedings. Did not, however, take them into account

On whether the EC’s Regulation was a technical regulation within the meaning of the TBT Agreement, the AB affirmed the Panel’s ruling

Article 2.4Upheld the panel’s ruling

that the EC’s Regulation

was not based on the

relevant international

standard

•EC Regulation No 1181/2003 of 2 July 2003 amended Council Regulation No 2136/89 laying down common marketing standards for preserved sardines for the Implementation of Section 609

•Notification of a mutually agreed solution to the DSB in July 2003 (WT/DS231/18; 29 July 2003)

“Preserved sardines" means products prepared from fish of the species Sardina pilchardus (« European Sardine »)

Preserved “sardine-type products" means products prepared from the other 20 species, including Sardinops sagax

•Preserved “sardine-type products" may be marketed in the EC under a trade description consisting of the word 'sardines' joined together with the scientific name of the species (“Sardines – Sardinops sagax”)

The EC The EC –– Sardines Case Sardines Case Notification of a Mutually agreed Notification of a Mutually agreed

SolutionSolution

wto dispute settlement procedures introduction - … settlement in the wto: aims – securing...

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