The WTO Appellate Body has affirmed that the Russian Federation violated its WTO obligations by imposing an EU-wide ban on live pigs and pork products, in breach of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (the "SPS Agreement").
This dispute arose after African swine fever ("ASF") was detected in the swine herds of four EU countries: Estonia, Latvia, Lithuania and Poland. ASF, according to the EU, is "a lethal, infectious disease of pigs which is harmless to humans or other animals". Following what the EU claimed were "a few infected wild boars at the borders with Belarus", Russia closed its borders to imports of pigs and related products from the entire EU. It did so without conducting a risk assessment. The EU had a very strong case that this did not comply with the science-based rules of the SPS Agreement and the Panel repeatedly ruled against Russia’s actions. The Panel’s rulings were largely upheld on appeal.
This is one of a series of reports on WTO Panel or Appellate Body decisions.
Significance of Decision:
This Appellate Body decision focused on the principle of "regionalization" in the application of SPS measures. The "regionalization" disciplines of the Agreement provide for targeted SPS measures, i.e., the importing Member can apply necessary restrictions to products from the regions affected by pests or disease, while permitting trade to continue with areas unaffected by such problems. These rules are particularly compelling when trade is with a WTO Member as geographically vast as the EU.
One important aspect of this decision relates to the relatively limited role of WTO Panels when making certain findings under the SPS Agreement. Under SPS Article 6.3, exporting Members claiming that regions within their territories are "pest- or disease-free areas or areas of low pest or disease prevalence" must provide "necessary evidence" to "objectively demonstrate" this to the importing Member. The Appellate Body found that "a panel's review of compliance by the exporting Member with Article 6.3 must be limited to assessing whether the evidence provided by the exporting Member to the importing Member is of a nature, quantity, and quality sufficient to enable the importing Member’s authorities ultimately to make a determination as to the pest or disease status of the relevant areas within the exporting Member's territory". It stressed that "a panel is not called upon to determine for itself, based on the evidence provided by the exporting Member, whether the relevant areas are, and are likely to remain, pest- or disease free or of low pest or disease prevalence [original emphasis]".
The Appellate Body’s position on this issue is similar to the approach it took in earlier disputes on the restricted role of panels reviewing SPS measures. In its 2008 ruling in US/Canada – Continued Suspension, the Appellate Body chided the Panel because it "reviewed the scientific experts’ opinions and somewhat peremptorily decided what it considered to be the best science, rather than following the more limited exercise that its mandate required". Similarly, in its 2010 decision in Australia – Apples, the Appellate Body admonished that "a panel's task is to review a WTO Member's risk assessment and not to substitute its own scientific judgement for that of the risk assessor".
Yet while a WTO panel is not permitted to choose what it "considers to be the best science", this should not be mistaken for a standard of deference to national regulators on SPS issues. Indeed, as far back as its 1998 ruling in EC – Hormones, the Appellate Body stressed that the applicable standard is "neither de novo review as such, nor ‘total deference’, but rather the ‘objective assessment of facts’". Ultimately, the WTO-consistency of an SPS measure will hinge on whether it has a valid scientific basis. In the present case, both the Panel and the Appellate Body concluded that the Russian Federation’s ban fell short of this standard.
Key disciplines: adapting SPS measures to regional conditions
Article 6 of the SPS Agreement sets out specific rules for the adoption and application of SPS measures in the light of regional conditions of the exporting WTO Member.
- Article 6.1 obligates importing WTO Members to ensure that their SPS measures are "adapted to the sanitary or phytosanitary characteristics of the area - whether all of a country, part of a country, or all or parts of several countries - from which the product originated and to which the product is destined". In assessing the SPS characteristics of a region, Members must take into account factors such as "the level of prevalence of specific diseases or pests, the existence of eradication or control programmes, and appropriate criteria or guidelines which may be developed by the relevant international organizations".
- Article 6.2 adds that Members "shall, in particular, recognize the concepts of pest- or disease-free areas and areas of low pest or disease prevalence". Determination of such areas are to be based on factors such as "geography, ecosystems, epidemiological surveillance, and the effectiveness of sanitary or phytosanitary controls".
- Article 6.3 provides in part that exporting Members claiming that areas within their territories are "pest- or disease-free areas or areas of low pest or disease prevalence" must "provide the necessary evidence thereof in order to objectively demonstrate to the importing Member that such areas are, and are likely to remain, pest- or disease-free areas or areas of low pest or disease prevalence, respectively".
The Appellate Body stressed the close connection between these three provisions of SPS Article 6. It recalled its 2015 ruling in India – Agricultural Products, which found that the "main and overarching obligation" is set forth in the first sentence of Article 6.1. Under this provision, as noted above, Members must ensure that their measures are "adapted" to "the SPS characteristics of the areas from which the products at issue originate and to which they are destined". The Appellate Body indicated that the "[t]he remainder of Article 6 ‘elaborates’ on aspects of that obligation and sets forth ‘the respective duties that apply to importing and exporting Members in this connection’".
The Appellate Body reiterated that the requirement of importing Members to ensure that their SPS measures are adapted to regional SPS characteristics is "an ongoing obligation that applies upon adoption of an SPS measure as well as thereafter [original emphasis]". In other words, "Members are required to ensure adaptation both when adopting SPS measures and as they maintain them, and may be required to adjust such measures over time as the SPS characteristics of the relevant areas change". The "main and overarching obligation" of Article 6.1 is "further informed" by the factors set out in Article 6.2.
Obligation on exporting Member and the role of WTO Panels
The Appellate Body noted that Article 6.3 "addresses the situation where an exporting Member claims that areas within its territory are pest- or disease free or of low pest or disease prevalence" [original emphasis]". It highlighted that "an exporting Member is expected to provide particularized evidence with respect to the pest or disease and the area concerned, and cannot merely adduce generic information or unsubstantiated assertions". It recalled that Article 6.3 refers to "necessary information" to "objectively demonstrate" the existence of low or no pest/disease areas, and stressed that "the term ‘necessary’ qualifies the nature, quantity, and quality of the evidence to be provided by the exporting Member, which must be sufficient to enable the importing Member ultimately to make an objective ‘determination’ as to the pest or disease status of the area concerned".
The Appellate Body ruled that "while the Panel could have been clearer in articulating its task under Article 6.3", the Panel "did not err in its interpretation of Article 6.3 of the SPS Agreement by not finding that this provision requires consideration of the evidence relied upon by the importing Member". It therefore dismissed Russia’s appeal on this point.
The Appellate Body thus concluded that "the process of adaptation to regional SPS characteristics pursuant to Article 6 requires that the importing Member 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". However, a "panel's review under Article 6.3 is limited to assessing whether the evidence provided by the exporting Member to the importing Member is of a nature, quantity, and quality sufficient to enable the importing Member's authorities ultimately to make a determination as to the pest or disease status of the areas that the exporting Member claims to be pest- or disease-free or of low pest or disease prevalence".
The Appellate Body upheld the Panel's findings that the EU had provided the necessary evidence "to objectively demonstrate to Russia that: (i) areas within Estonia, Latvia, Lithuania, and Poland, as well as areas within the European Union outside of the four affected member States, were ASF free; and (ii) the ASF-free areas within Estonia, Lithuania, and Poland, as well as the ASF-free areas within the European Union outside of the four affected member States, were likely to remain so".
Regional adaptation obligations can apply even if exporter Member fails to provide the necessary evidence
Russia argued that the Panel erred in finding that an importing Member "can be found to have failed to adapt its measures to the SPS characteristics of areas within an exporting Member's territory even in a situation where the exporting Member has failed to provide the necessary evidence, pursuant to Article 6.3, in order to objectively demonstrate that such areas are, and are likely to remain, pest- or disease free or of low pest or disease prevalence". The Appellate Body rejected Russia’s argument.
The Appellate Body recalled its ruling in India – Agricultural Products that "on the one hand, the exporting Member's compliance or non-compliance with Article 6.3 will, in many cases, have implications for the importing Member's ability to assess the SPS characteristics of areas located within the exporting Member's territory and to adapt its measures accordingly, as required by Article 6.1"[.] This is because "the exporting Member is usually best placed to gather and provide information about the level of pest or disease prevalence in areas located within its territory, such that, without its cooperation, an importing Member's ability to determine the pest or disease status of such areas and to adapt its measures to their SPS characteristics may, in certain cases, be impaired". On the other hand, the Appellate Body "rejected the notion that an importing Member's violation of Article 6.1 would necessarily be contingent on the exporting Member's compliance with Article 6.3".
In other words, in certain specific situations, "an importing Member may be required to adapt its measures to regional SPS characteristics irrespective of whether or not an exporting Member has complied with Article 6.3". Such situations included where a Member’s regulatory regime precluded the recognition of the concept of pest- and disease free areas.
The Appellate Body faulted the Panel for failing to provide reasoning to explain "why the circumstances of the dispute fall within one or more of those specific situations, or why they otherwise warrant a finding that the importing Member acted inconsistently with Article 6.1". However, "given the Panel's finding that Russia failed to adapt the ban on imports of the products at issue from Latvia to the SPS characteristics of areas within Russia, the Panel's conclusion that this measure is inconsistent with Article 6.1 of the SPS Agreement stands".
"Rendering operational" the concept of recognizing pest or disease free areas
The Panel found that Russia’s legislative framework "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 was not inconsistent with Article 6.2. The EU appealed this finding, with partial success.
The Appellate Body stated that "we see Article 6.2 not as an obligation to acknowledge the concept of regionalization as an abstract idea; rather, we see it as an obligation to render operational the concepts of pest- or disease-free areas and areas of low pest or disease prevalence". It found that "the importing Member must provide an effective opportunity for the exporting Member to make such a claim and thus render operational the concepts of pest- or disease-free areas and areas of low pest or disease prevalence". It added that "[t]his 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 in an assessment of a Member's compliance with the obligation under Article 6.2 of the SPS Agreement". The Panel in this case "erred in finding that it could not take into account in its analysis under Article 6.2 specific instances of recognition or non recognition of the concept of regionalization".
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 EU-wide ban and the bans on the imports of the products at issue from Estonia, Latvia, Lithuania, and Poland, are not inconsistent with Russia's obligations under Article 6.2 of the SPS Agreement". However, having reversed the Panel on this point, the Appellate Body concluded that it did not have sufficient information to "complete the analysis" and make a determination on "whether or not Russia recognizes the concepts of pest- or disease-free areas and areas of low pest or disease prevalence in respect of ASF".
A number of rulings of the Panel were not appealed by Russia. These included the Panel’s finding that the EU-wide ban was inconsistent with Russia’s obligation to base its SPS measures on international standards, pursuant to Article 3.1; and that Russia did not base the EU-wide ban on a risk assessment, in breach of SPS Articles 5.1, 5.2 and 2.2.
The Report of the WTO Appellate Body in Russian Federation – Measures on the Importation of Live Pigs, Pork and Other Pig Products from the European Union (DS475) was released on February 23, 2017.
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