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Adopted 21 March 2017
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Complainant European Union
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Respondent Russian Federation
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Third Parties Australia, Brazil, China, India, Japan, the Republic of Korea, Norway, South Africa, Chinese Taipei, and the United States
Measures at Issue
This dispute arose after African Swine Fever (ASF), a highly contagious disease of pigs, was detected in four member States of the European Union (EU) and Russia stopped accepting imports of pigs and pig products from the EU. The EU presented claims with respect to two measures: (i) the ‘EU-wide ban’, consisting of Russia's ban on the importation of the products at issue from the entire EU; and (ii) the ‘country-specific import bans’ imposed by Russia on imports from the four EU member States – Estonia, Latvia, Lithuania, and Poland.Footnote 1 There were two categories of products at issue: ‘treated products’ (finished products subject to a treatment that ensures destruction of ASF) and ‘non-treated products’ (products including live pigs, and raw meat preparations). Treated products were not subject to the EU-wide ban. The EU brought multiple claims under the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement).
Main Adopted Findings of the Panel and Appellate Body
At the outset, the Appellate Body agreed with the Panel that the EU-wide ban was attributable to Russia and that Russia's terms of accession to the WTO did not limit the Panel's assessment of the EU's claims.Footnote 2 The Panel considered both the EU-wide ban and the country-specific bans to be SPS measures within the meaning of Annex A(1) of the SPS Agreement.Footnote 3
Articles 6.1, 6.2, and 6.3 of the SPS Agreement (Regionalization of SPS measures)
The Appellate Body upheld the Panel's findings that, pursuant to Article 6.3, the EU had provided the ‘necessary evidence’ to ‘objectively demonstrate’ to Russia that there were areas within the EU and within Estonia, Lithuania, and Poland that were ASF-free and likely to remain so. However, the EU had failed to demonstrate that the ASF-free areas within Latvia were likely to remain so.Footnote 4 For this reason, according to the Appellate Body, the Panel erred under Article 6.1 in finding that Russia failed to adapt the ban on imports from Latvia. Nevertheless, the Panel's overall conclusion of inconsistency with Article 6.1 did stand, given the Panel's finding that Russia ‘failed to adapt the ban’ to the SPS characteristics of areas within Russia.Footnote 5 The Appellate Body disagreed with the Panel's interpretation of the obligation to ‘recognize’ the concept of regionalization under Article 6.2. According to the Panel, Article 6.2 imposes an obligation to acknowledge the concept of regionalization as an ‘abstract idea’. However, the Appellate Body considered it an obligation to ‘render operational’ the concepts of pest- or disease-free areas and areas of low pest or disease prevalence. Therefore, it reversed the Panel's finding that Russia acted consistently with Article 6.2, although it could not complete the legal analysis.Footnote 6
Articles 3.1 and 3.2 of the SPS Agreement (International Standards)
The Panel considered that the relevant international standards for the purpose of this dispute were articulated in the Terrestrial Code under the auspices of the World Organization for Animal Health. The Panel noted that, with respect to non-treated products, the Terrestrial Code calls for members to allow for the possibility of recognition of ASF-free status on a country or zone basis. In the Panel's view, Russia's EU-wide ban on non-treated products contradicted the relevant international standard, and therefore could not be considered to be ‘based on’ that standard for purposes of Article 3.1.Footnote 7 Similarly, the Panel considered that the bans on imports from Estonia, Lithuania, and Poland could not be considered to be ‘based on’ the relevant international standard under Article 3.1.Footnote 8 However, since the EU did not provide Russia with the necessary evidence to demonstrate that areas in Latvia were likely to remain ASF-free, the Panel understood the Terrestrial Code to be the basis for the ban on imports from Latvia, in a manner consistent with Article 3.1.Footnote 9 With respect to treated products, the Panel noted that the Terrestrial Code permits the trading of pork products that have been processed in an approved establishment to ensure the destruction of ASF. Russia's total bans were therefore found not to be ‘based on’ the relevant international standards in a manner inconsistent with Article 3.1.Footnote 10
Article 8 and Annex C of the SPS Agreement (Control, Inspection and Approval Procedures)
The Panel considered that Russia's process of consideration of the EU's request for the recognition of ASF-free areas within the EU constituted ‘procedures’ falling within the scope of Article 8 and Annex C(1).Footnote 11 With respect to both the EU-wide ban and the country-specific bans, the Panel found that Russia made a number of requests that went beyond the information that was necessary for the procedure at issue. Consequently, it concluded that Russia formulated information requirements that were not ‘limited to what [was] necessary’ for the procedure at issue, thus breaching Annex C(1)(c).Footnote 12 The Panel also found that the procedure at issue was undertaken and completed with ‘undue delay’, thus in a manner inconsistent with Annex C(1)(a), first clause.Footnote 13 In light of these findings, the Panel concluded that Russia failed to comply with Article 8.Footnote 14 The Panel found, however, that the EU had not satisfied its burden of demonstrating that Russia's procedures provided less favourable treatment to imported products than to like domestic products in a manner inconsistent with Annex C(1)(a), second clause.Footnote 15 According to the Panel, the EU also failed to make a prima facie case of inconsistency with the communication obligation under Annex C(1)(b).Footnote 16
Articles 2.2, 5.1, 5.2, and 5.7 of the SPS Agreement (Risk Assessment and Scientific Evidence)
The Panel considered that the ‘relevant scientific evidence’ was sufficient for Russia to conduct a risk assessment appropriate to the circumstances in respect of the ASF situation in affected and non-affected EU member States.Footnote 17 Moreover, since Russia did not adopt the measures on the basis of ‘available pertinent information’, did not ‘seek to obtain the additional information necessary’, and did not review the measures ‘within a reasonable period of time’, the Panel concluded that the bans did not fall within the scope of the precaution provision in Article 5.7.Footnote 18 Given the fact that Russia undertook no risk assessment, the Panel also found that the import bans were inconsistent with Articles 5.1 and 5.2. Additionally, because Russia did not raise any arguments to rebut these findings of inconsistency, the Panel concluded that the import bans were inconsistent with Article 2.2.Footnote 19
Articles 5.3, 5.4, 5.6, and 2.2 of the SPS Agreement (Appropriate Level of Protection/ALOP and Measures More Trade Restrictive than Required)
In the Panel's view, the fact that Russia refused imports of the products at issue from the entire EU reflected a stringent standard of protection. On the other hand, the fact that ASF remained present in Russia called into doubt that Russia's ALOP could be considered as zero risk. On this basis, the Panel concluded that Russia's ALOP was ‘high or conservative’.Footnote 20 In the Panel's view, the EU did not prove that Russia failed to take into account the relevant economic factors listed in Article 5.3 when determining the measure to be applied. However, Russia did fail to take into account those factors when assessing the risk to animal life and health, and thus acted inconsistently with Article 5.3.Footnote 21 The Panel decided that, in light of the ‘hortatory nature’ of Article 5.4, it would not make findings with respect to whether Russia took into account the objective of ‘minimizing negative trade effects’ when determining its ALOP.Footnote 22 Under Article 5.6, the EU identified as alternative measures those derived from the application of the Terrestrial Code, which recommends trade from ASF-free countries/zones and trade of products that underwent specific treatments to destroy ASF. The Panel found that these measures were ‘reasonably available’ to Russia, achieved Russia's ALOP, and were ‘significantly less restrictive to trade’. With respect to non-treated products, the Panel found that EU-wide ban and the bans on imports from Estonia, Lithuania, and Poland were ‘more trade-restrictive than required’ and thus inconsistent with Article 5.6. However, the Panel concluded that the EU failed to demonstrate that the ban on imports from Latvia was inconsistent with this provision.Footnote 23 Regarding treated products, the Panel found that the four country-specific bans were inconsistent with Article 5.6.Footnote 24 Given that Russia failed to provide arguments or evidence to rebut the presumption of inconsistency with Article 2.2, the Panel concluded that Russia's import bans that were inconsistent with Article 5.6 were also inconsistent with Article 2.2 as they were applied beyond the extent ‘necessary to protect … animal life or health’.Footnote 25
Articles 2.3 and 5.5 of the SPS Agreement (Discrimination and Disguised Restriction on International Trade)
The Panel considered that the same or similar conditions prevailed in both the EU and in Russia, based on the existence of ASF in both Russian and EU territories. The Panel found that, by allowing domestic trade of the products at issue from ASF-free areas within Russia, and prohibiting imports of the same products from ASF-free areas within the EU, Russia's measures arbitrarily or unjustifiably discriminated between Members (including the territory of the Member imposing the measure) where the same conditions prevail. This amounted to a violation of the first sentence of Article 2.3.Footnote 26 In addition, given the lack of a risk assessment, the Panel was of the view that Russia's measures also constituted disguised restrictions on international trade, inconsistent with the second sentence of Article 2.3.Footnote 27 The Panel considered its findings under Article 2.3 to be enough to provide a solution of the matters of discrimination raised by the EU. Consequently, it considered it appropriate to exercise judicial economy in respect of the EU's claims under Article 5.5.Footnote 28
Article 7 and Annex B of the SPS Agreement (Notification and Publication of SPS Measures)
The Panel concluded that the EU had failed to demonstrate that the measures at issue qualified as generally applicable ‘laws, decrees or ordinances’ that would fall within the scope of Article 7 and Annex B(1) and, therefore, it was not necessary for the Panel to continue with its analysis.Footnote 29 In the alternative, the Panel considered it appropriate to exercise judicial economy given that the measures at issue were well known to the EU and no action by Russia at that stage would increase the transparency of these measures, in a timely manner, to the benefit of the EU or other WTO Members.Footnote 30
