Green_Earth
Indonesia - Importation of Horticultural Products, Animals and Animal Products – Report of the Panel
日期:2016/12/22
作者:Dispute Settlement Body
文件編號:WT/DS477/R, WT/DS478/R
附件下載:WTDS477R.doc
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Indonesia – Importation of Horticultural Products,
Animals and Animal Products

Report of the Panel

 

 


TABLE OF CONTENTS

 

1   Introduction.. 18

1.1   Complaints by New Zealand and the United States. 18

1.2   Panel establishment and composition. 18

1.3   Panel proceedings. 18

1.3.1   General 18

1.3.2   Request for enhanced third-party rights. 19

1.3.3   Request for a preliminary ruling. 19

2   Factual aspects. 19

2.1   Introduction. 19

2.2   Indonesia's legal framework for the importation of horticultural products, animals and animal products. 20

2.2.1   Overarching legislative framework. 20

2.2.1.1   Food Law.. 20

2.2.1.2   Farmers Law.. 20

2.2.1.3   Horticulture Law.. 21

2.2.1.4   Animal Law.. 21

2.2.2   Importation-related regulations adopted by Indonesia's Ministries of Trade and Agriculture in force at the time of the establishment of the Panel 22

2.2.2.1   Import licensing procedures for horticultural products. 22

2.2.2.2   Import licensing procedures for animals and animal products. 25

2.2.3   Post-establishment regulations. 27

2.3   The measures at issue. 28

2.3.1   Introduction. 28

2.3.2   Import licensing regime for horticultural products. 28

2.3.2.1   Measure 1: Limited application windows and validity periods. 28

2.3.2.2   Measure 2: Periodic and fixed import terms. 29

2.3.2.3   Measure 3: 80% realization requirement 30

2.3.2.4   Measure 4: Harvest period requirement 31

2.3.2.5   Measure 5: Storage ownership and capacity requirements. 32

2.3.2.6   Measure 6: Use, sale and distribution requirements for horticultural products. 32

2.3.2.7   Measure 7: Reference prices for chillies and fresh shallots for consumption. 33

2.3.2.8   Measure 8: Six-month harvest requirement 34

2.3.2.9   Measure 9: Import licensing regime for horticultural products as a whole. 34

2.3.3   Import licensing regime for animals and animal products. 34

2.3.3.1   Measure 10: Import prohibition of certain animals and animal products, except in "emergency circumstances". 34

2.3.3.2   Measure 11: Limited application windows and validity periods. 35

2.3.3.3   Measure 12: Periodic and fixed import terms. 35

2.3.3.4   Measure 13: 80% realization requirement 36

2.3.3.5   Measure 14: Use, sale and distribution of imported bovine meat and offal 37

2.3.3.6   Measure 15: Domestic purchase requirement for beef 38

2.3.3.7   Measure 16: Beef reference price. 39

2.3.3.8   Measure 17: Import licensing regime for animals and animal products as a whole. 39

2.3.4   Measure 18: Sufficiency of domestic production to fulfil domestic demand. 40

3   Parties' requests for findings and recommendations. 40

3.1   New Zealand. 40

3.2   United States. 41

3.3   Indonesia. 42

4   Arguments of the parties. 42

5   Arguments of the thiRd parties. 42

6   Interim review... 42

6.1   Introduction. 42

6.2   Factual Aspects. 42

6.3   Structure of the findings. 43

6.4   Whether certain challenged measures are the results of decisions by private actors. 43

6.5   Whether an adverse trade effect test is necessary for a determination under Article XI:1 of the GATT 1994. 43

6.6   Evidentiary weight given to administrative practice vs. legal text 44

6.7   Preliminary issues and claims pursuant Article XI:I of the GATT 1994. 45

6.8   Claims pursuant Article XI:I of the GATT 1994. 46

6.9   Incentives created by the measures at issue. 46

6.10   Whether Measure 1 (Limited application windows and validity periods) is inconsistent with Article XI:1 of the GATT 1994. 47

6.11   Whether Measure 3 (80% realization requirement) is inconsistent with Article XI:1 of the GATT 1994. 48

6.12   Whether Measure 5 (Storage ownership and capacity requirements) is inconsistent with Article XI:1 of the GATT 1994. 49

6.13   Whether Measure 6 (Use, sale and distribution requirements for horticultural products) is inconsistent with Article XI:1 of the GATT 1994. 49

6.14   Whether Measure 10 (Prohibition of importation of certain animals and animal products) is inconsistent with Article XI:I of the GATT 1994. 49

6.15   Whether Measure 13 (80% realization requirement) is inconsistent with Article XI:1 of the GATT 1994. 50

6.16   Whether Measure 15 (Domestic purchase requirement for beef) is inconsistent with Article XI:1 of the GATT 1994. 50

6.17   Whether Measure 16 (Beef reference price) is inconsistent with Article XI:1 of the GATT 1994. 50

6.18   Whether Measure 18 (Sufficiency of domestic production to fulfil domestic demand) is inconsistent with Article XI:1 of the GATT 1994. 50

6.19   Whether Measure 3 (80% realization requirement) is justified under Article XX(d) of the GATT 1994. 50

6.20   Whether Measure 4 (Harvest period requirement) is provisionally justified under Article XX(b) of the GATT 1994. 50

6.21   Whether Measure 6 (Use, sale and distribution requirements for horticultural products) is justified under Article XX(d) of the GATT 1994. 51

6.22   Conclusion concerning Indonesia's defence under Articles XX(a), (b) and (d) with respect to Measures 9 through 17. 51

7   Findings. 51

7.1   Preliminary issues. 51

7.1.1   Request for enhanced third-party rights. 51

7.1.2   Request for a preliminary ruling. 53

7.1.3   Whether certain challenged measures are the result of decisions of private actors. 53

7.1.3.1   Introduction. 53

7.1.3.2   The relevant provision. 54

7.1.3.3   Measures 1 and 11 (Limited application windows and validity periods) 54

7.1.3.4   Measures 2 and 12 (Periodic and fixed import terms) 55

7.1.3.5   Measures 3 and 13: 80% realization requirement 56

7.1.3.6   Measure 5: Storage ownership and capacity requirements. 57

7.1.3.7   Conclusion. 58

7.1.4   Order of analysis. 58

7.2   Claims pursuant to Article XI:1 of the GATT 1994. 60

7.2.1   Introduction. 60

7.2.2   The text of Article XI of the GATT 1994. 60

7.2.3   Legal standard under Article XI:1 of the GATT 1994. 61

7.2.3.1   Step 1: Whether the measure at issue falls within the scope of Article XI:1 of the GATT 1994. 61

7.2.3.2   Step 2: Whether the measure at issue constitutes a prohibition or restriction on importation within the scope of Article XI:1 of the GATT 1994. 62

7.2.4   Preliminary issues. 65

7.2.4.1   Whether the measures at issue are outside the scope of Article XI:1 because they are automatic import licensing procedures. 65

7.2.4.2   Indonesia's reliance upon Article XI:2(c)(ii) of the GATT 1994. 67

7.2.5   Whether Measure 1 (Limited application windows and validity periods) is inconsistent with Article XI:1 of the GATT 1994. 68

7.2.5.1   Arguments of the parties. 68

7.2.5.2   Analysis by the Panel 71

7.2.5.3   Conclusion. 76

7.2.6   Whether Measure 2 (Periodic and fixed import terms) is inconsistent with Article XI:1 of the GATT 1994. 76

7.2.6.1   Arguments of the parties. 76

7.2.6.2   Analysis by the Panel 78

7.2.6.3   Conclusion. 81

7.2.7   Whether Measure 3 (80% realization requirement) is inconsistent with Article XI:1 of the GATT 1994. 81

7.2.7.1   Arguments of the parties. 81

7.2.7.2   Analysis by the Panel 83

7.2.7.3   Conclusion. 86

7.2.8   Whether Measure 4 (Harvest period requirement) is inconsistent with Article XI:1 of the GATT 1994. 86

7.2.8.1   Arguments of the parties. 86

7.2.8.2   Analysis by the Panel 88

7.2.8.3   Conclusion. 91

7.2.9   Whether Measure 5 (Storage ownership and capacity requirements) is inconsistent with Article XI:1 of the GATT 1994. 92

7.2.9.1   Arguments of the parties. 92

7.2.9.2   Analysis by the Panel 94

7.2.9.3   Conclusion. 96

7.2.10   Whether Measure 6 (Use, sale and distribution requirements for horticultural products) is inconsistent with Article XI:1 of the GATT 1994. 96

7.2.10.1   Arguments of the parties. 96

7.2.10.2   Analysis by the Panel 99

7.2.10.3   Conclusion. 101

7.2.11   Whether Measure 7 (Reference prices for chillies and fresh shallots) is inconsistent with Article XI:1 of the GATT 1994. 101

7.2.11.1   Arguments of the parties. 101

7.2.11.2   Analysis by the Panel 104

7.2.11.3   Conclusion. 109

7.2.12   Whether Measure 8 (Six-month harvest requirement) is inconsistent with Article XI:I of the GATT 1994. 109

7.2.12.1   Arguments of the Parties. 109

7.2.12.2   Analysis by the Panel 110

7.2.12.3   Conclusion. 112

7.2.13   Whether Measure 9 (Indonesia's import licensing regime for horticultural products as a whole) is inconsistent with Article XI:1 of the GATT 1994. 112

7.2.13.1   Arguments of the parties. 112

7.2.13.2   Analysis by the Panel 116

7.2.13.3   Conclusion. 119

7.2.14   Whether Measure 10 (Prohibition of importation of certain animals and animal products) is inconsistent with Article XI:I of the GATT 1994. 119

7.2.14.1   Arguments of the parties. 119

7.2.14.2   Analysis by the Panel 123

7.2.14.3   Conclusion. 126

7.2.15   Whether Measure 11 (Limited application windows and validity periods) is inconsistent with Article XI:1 of the GATT 1994. 126

7.2.15.1   Arguments of the parties. 126

7.2.15.2   Analysis by the Panel 130

7.2.15.3   Conclusion. 134

7.2.16   Whether Measure 12 (Periodic and fixed import terms) is inconsistent with Article XI:1 of the GATT 1994. 134

7.2.16.1   Arguments of the parties. 134

7.2.16.2   Analysis by the Panel 137

7.2.16.3   Conclusion. 139

7.2.17   Whether Measure 13 (80% realization requirement) is inconsistent with Article XI:1 of the GATT 1994. 139

7.2.17.1   Arguments of the parties. 139

7.2.17.2   Analysis by the Panel 143

7.2.17.3   Conclusion. 145

7.2.18   Whether Measure 14 (Use, sale and distribution of imported bovine meat and offal requirements) is inconsistent with Article XI: 1 of the GATT 1994. 145

7.2.18.1   Arguments of the Parties. 145

7.2.18.2   Analysis by the Panel 148

7.2.18.3   Conclusion. 151

7.2.19   Whether Measure 15 (Domestic purchase requirement for beef) is inconsistent with Article XI:1 of the GATT 1994. 151

7.2.19.1   Arguments of the Parties. 151

7.2.19.2   Analysis by the Panel 156

7.2.19.3   Conclusion. 158

7.2.20   Whether Measure 16 (Beef reference price) is inconsistent with Article XI:1 of the GATT 1994. 158

7.2.20.1   Arguments of the Parties. 158

7.2.20.2   Analysis by the Panel 160

7.2.20.3   Conclusion. 163

7.2.21   Whether Measure 17 (Import licensing regime for animals and animal products as a whole) is inconsistent with Article XI:1 of the GATT 1994. 163

7.2.21.1   Arguments of the Parties. 163

7.2.21.2   Analysis by the Panel 166

7.2.21.3   Conclusion. 169

7.2.22   Whether Measure 18 (Sufficiency of domestic production to fulfil domestic demand) is inconsistent with Article XI:1 of the GATT 1994. 169

7.2.22.1   Arguments of the Parties. 169

7.2.22.2   Analysis by the Panel 171

7.2.22.3   Conclusion. 174

7.3   Indonesia's defences under Article XX of the GATT 1994. 174

7.3.1   Preliminary remarks. 174

7.3.2   Admissibility of Indonesia's defences due to late introduction and lack of argumentation. 175

7.3.3   Admissibility of Indonesia's unsubstantiated defences. 177

7.3.4   Order of analysis of Indonesia's defences under Article XX(a), (b) and (d) of the GATT 1994. 178

7.3.5   Whether Measure 1 (Application windows and validity periods) is justified under Article XX(d) of the GATT 1994. 179

7.3.5.1   Arguments of the Parties. 179

7.3.5.2   Analysis by the Panel 193

7.3.6   Whether Measure 2 (Periodic and fixed import terms) is justified under Article XX(d) of the GATT 1994. 202

7.3.6.1   Arguments of the parties. 202

7.3.6.2   Analysis by the Panel 204

7.3.7   Whether Measure 3 (80% realization requirement) is justified under Article XX(d) of the GATT 1994. 204

7.3.7.1   Arguments of the parties. 204

7.3.7.2   Analysis by the Panel 207

7.3.8   Whether Measure 4 (Indonesia's harvest period requirements) is justified under Article XX(b) of the GATT 1994. 207

7.3.8.1   Arguments of the parties. 207

7.3.8.2   Analysis by the Panel 210

7.3.9   Whether Measure 5 (Storage ownership and capacity requirement) is justified under Article XX(a) of the GATT 1994. 215

7.3.9.1   Arguments of the Parties. 215

7.3.9.2   Analysis by the Panel 218

7.3.10   Whether Measure 5 (Storage ownership and capacity requirement) is justified under Article XX(b) of the GATT 1994. 222

7.3.10.1   Arguments of the Parties. 222

7.3.10.2   Analysis by the Panel 225

7.3.11   Whether Measure 5 (Storage ownership and capacity requirement) is justified under Article XX(d) of the GATT 1994. 228

7.3.11.1   Arguments of the parties. 228

7.3.11.2   Analysis by the Panel 230

7.3.12   Whether Measure 6 (Use, sale and distribution requirements for horticultural products) is justified under Article XX(a) of the GATT 1994. 230

7.3.12.1   Arguments of the Parties. 230

7.3.12.2   Analysis by the Panel 233

7.3.13   Whether Measure 6 (Use, sale and distribution requirements for horticultural products) is justified under Article XX(b) of the GATT 1994. 237

7.3.13.1   Arguments of the Parties. 237

7.3.13.2   Analysis by the Panel 239

7.3.14   Whether Measure 6 (Use, sale and distribution requirements for horticultural products) is justified under Article XX(d) of the GATT 1994. 242

7.3.14.1   Arguments of the Parties. 242

7.3.14.2   Analysis by the Panel 244

7.3.15   Whether Measure 7 (Reference prices for chillies and shallots for consumption) is justified under Article XX(b) of the GATT 1994. 244

7.3.15.1   Arguments of the Parties. 244

7.3.15.2   Analysis by the Panel 247

7.3.16   Whether Measure 8 (Six-month harvest requirement) is justified under Article XX(b) of the GATT 1994. 251

7.3.16.1   Arguments of the Parties. 251

7.3.16.2   Analysis by the Panel 254

7.3.17   Conclusion concerning Indonesia's defences under Articles XX(a), (b) and (d) with respect to Measures 9 through 17. 267

7.4   Claims pursuant to Article 4.2 of the Agreement on Agriculture. 267

7.4.1   Arguments of the Parties. 267

7.4.2   Analysis by the Panel 267

7.5   Claims pursuant to Article III:4 of the GATT 1994. 268

7.5.1   Introduction. 268

7.5.2   Whether Measure 6 (Use, sale and distribution requirements for horticultural products) is inconsistent with Article III:4 of the GATT 1994. 268

7.5.2.1   Arguments of the Parties. 268

7.5.2.2   Analysis by the Panel 269

7.5.3   Whether Measure 14 (Use, sale and distribution of imported bovine meat and offal requirements) is inconsistent with Article III:4 of the GATT 1994. 269

7.5.3.1   Arguments of the Parties. 269

7.5.3.2   Analysis by the Panel 270

7.5.4   Whether Measure 15 (Domestic purchase requirement for beef) is inconsistent with Article III:4 of the GATT 1994. 271

7.5.4.1   Arguments of the Parties. 271

7.5.4.2   Analysis by the Panel 272

7.6   Claims under the Import Licensing Agreement 272

7.6.1   Introduction. 272

7.6.2   Whether Measures 1 and 11 (Limited application windows and validity periods) are inconsistent with Article 3.2 of the Import Licensing Agreement 272

7.6.2.1   Arguments of the Parties. 272

7.6.2.2   Analysis by the Panel 278

8   Conclusions and Recommendation(s). 279

 

LIST OF ANNEXES

ANNEX A

Preliminary Ruling of the Panel

Contents

Page

Annex A-1

Preliminary Ruling of the Panel

A-1

 

ANNEX B

Working Procedures of The Panel

Contents

Page

Annex B-1

Working Procedures of the Panel

B-1

ANNEX C

Arguments Of The Parties

New Zealand

Contents

Page

Annex C-1

First part of the executive summary of the arguments of New Zealand

C-2

Annex C-2

Second part of the executive summary of the arguments of New Zealand

C-14

 

UNITED STATES

Contents

Page

Annex C-3

First part of the executive summary of the arguments of the United States

C-27

Annex C-4

Second part of the executive summary of the arguments of the United States

C-39

 

INDONESIA

Contents

Page

Annex C-5

First part of the executive summary of the arguments of Indonesia

C-51

Annex C-6

Second part of the executive summary of the arguments of Indonesia

C-57

 

ANNEX D

Arguments of the Third Parties

Contents

Page

Annex D-1

Executive summary of the arguments of Argentina

D-2

Annex D-2

Executive summary of the arguments of Australia

D-4

Annex D-3

Executive summary of the arguments of Brazil

D-9

Annex D-4

Executive summary of the arguments of Canada

D-12

Annex D-5

Executive summary of the arguments of the European Union

D-14

Annex D-6

Executive summary of the arguments of Japan

D-17

Annex D-7

Executive summary of the arguments of Korea

D-21

Annex D-8

Executive summary of the arguments of Norway

D-22

Annex D-9

Executive summary of the arguments of Paraguay

D-25

Annex D-10

Executive summary of the arguments of Chinese Taipei

D-26

ANNEX E

Import Licensing Procedures for Horticultural Products and for Animals and Animal Products

Contents

Page

Annex E-1

Flow chart concerning Indonesia's Import Licensing Procedures for Horticultural Products

E-2

Annex E-2

Flow chart concerning Indonesia's Import Licensing Procedures for Animals and Animal Products

E-3

 


WTO CASES CITED IN THIS REPORT

 

Short Title

Full Case Title and Citation

Argentina – Hides and Leather

Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and Import of Finished Leather, _WT/DS155/R and Corr.1, adopted 16 February 2001, DSR 2001:V, p. 1779

Argentina – Import Measures

Appellate Body Reports, Argentina – Measures Affecting the Importation of Goods, _WT/DS438/AB/R / _WT/DS444/AB/R / _WT/DS445/AB/R, adopted 26 January 2015

Argentina – Import Measures

Panel Reports, Argentina – Measures Affecting the Importation of Goods, _WT/DS438/R and Add.1 / _WT/DS444/R and Add.1 / _WT/DS445/R and Add.1, adopted 26 January 2015, as modified (WT/DS438/R) and upheld (WT/DS444/R / WT/DS445/R) by Appellate Body Reports WT/DS438/AB/R / WT/DS444/AB/R / WT/DS445/AB/R

Brazil – Retreaded Tyres

Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, _WT/DS332/AB/R, adopted 17 December 2007, DSR 2007:IV, p. 1527

Brazil – Retreaded Tyres

Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres, _WT/DS332/R, adopted 17 December 2007, as modified by Appellate Body Report WT/DS332/AB/R, DSR 2007:V, p. 1649

Canada – Renewable Energy / Canada – Feed-in Tariff Program

Panel Reports, Canada – Certain Measures Affecting the Renewable Energy Generation Sector / Canada – Measures Relating to the Feed-in Tariff Program, _WT/DS412/R and Add.1 / _WT/DS426/R and Add.1, adopted 24 May 2013, as modified by Appellate Body Reports WT/DS412/AB/R / WT/DS426/AB/R, DSR 2013:I, p. 237

Canada – Wheat Exports and Grain Imports

Appellate Body Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, _WT/DS276/AB/R, adopted 27 September 2004, DSR 2004:VI, p. 2739

Canada – Wheat Exports and Grain Imports

Appellate Body Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, _WT/DS276/AB/R, adopted 27 September 2004, DSR 2004:VI, p. 2739

Chile – Price Band System

Appellate Body Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products, _WT/DS207/AB/R, adopted 23 October 2002, DSR 2002:VIII, p. 3045 (Corr.1, DSR 2006:XII, p. 5473)

Chile – Price Band System

Panel Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products, _WT/DS207/R, adopted 23 October 2002, as modified by Appellate Body Report WT/DS207AB/R, DSR 2002:VIII, p. 3127

China – Auto Parts

Panel Reports, China – Measures Affecting Imports of Automobile Parts, _WT/DS339/R, Add.1 and Add.2 / _WT/DS340/R, Add.1 and Add.2 / _WT/DS342/R, Add.1 and Add.2, adopted 12 January 2009, upheld (WT/DS339/R) and as modified (WT/DS340/R / WT/DS342/R) by Appellate Body Reports WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, DSR 2009:I, p. 119

China – Rare Earths

Panel Reports, China – Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum, _WT/DS431/R and Add.1 / _WT/DS432/R and Add.1 / _WT/DS433/R and Add.1, adopted 29 August 2014, upheld by Appellate Body Reports WT/DS431/AB/R / WT/DS432/AB/R / WT/DS433/AB/R, DSR 2014:IV, p. 1127

China – Raw Materials

Appellate Body Reports, China – Measures Related to the Exportation of Various Raw Materials, _WT/DS394/AB/R / _WT/DS395/AB/R / _WT/DS398/AB/R, adopted 22 February 2012, DSR 2012:VII, p. 3295

China – Raw Materials

Panel Reports, China – Measures Related to the Exportation of Various Raw Materials, _WT/DS394/R, Add.1 and Corr.1 / _WT/DS395/R, Add.1 and Corr.1 / _WT/DS398/R, Add.1 and Corr.1, adopted 22 February 2012, as modified by Appellate Body Reports WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, DSR 2012:VII, p. 3501

Colombia – Ports of Entry

Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry, _WT/DS366/R and Corr.1, adopted 20 May 2009, DSR 2009:VI, p. 2535

Dominican Republic – Import and Sale of Cigarettes

Appellate Body Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, _WT/DS302/AB/R, adopted 19 May 2005, DSR 2005:XV, p. 7367

Dominican Republic – Import and Sale of Cigarettes

Panel Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, _WT/DS302/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS302/AB/R, DSR 2005:XV, p. 7425

Dominican Republic – Safeguard Measures

Panel Report, Dominican Republic – Safeguard Measures on Imports of Polypropylene Bags and Tubular Fabric, _WT/DS415/R, _WT/DS416/R, _WT/DS417/R, _WT/DS418/R, and Add.1, adopted 22 February 2012, DSR 2012:XIII, p. 6775

EC – Bananas III

Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, _WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, p. 591

EC – Bananas III (Guatemala and Honduras)

Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Complaint by Guatemala and Honduras, _WT/DS27/R/GTM, _WT/DS27/R/HND, adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R, DSR 1997:II, p. 695

 

 

EC – Export Subsidies on Sugar (Australia)

Panel Report, European Communities – Export Subsidies on Sugar, Complaint by Australia, _WT/DS265/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, DSR 2005:XIII, p. 6499

EC – Export Subsidies on Sugar (Brazil)

Panel Report, European Communities – Export Subsidies on Sugar, Complaint by Brazil, _WT/DS266/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, DSR 2005:XIV, p. 6793

EC – Export Subsidies on Sugar (Thailand)

Panel Report, European Communities – Export Subsidies on Sugar, Complaint by Thailand, _WT/DS283/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, DSR 2005:XIV, p. 7071

EC – Hormones

Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones), _WT/DS26/AB/R, _WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, p. 135

EC – Hormones (Canada)

Panel Report, EC Measures Concerning Meat and Meat Products (Hormones), Complaint by Canada, _WT/DS48/R/CAN, adopted 13 February 1998, as modified by Appellate Body Report WT/DS26/AB/R, WT/DS48/AB/R, DSR 1998:II, p. 235

EC – Poultry

Panel Report, European Communities – Measures Affecting the Importation of Certain Poultry Products, _WT/DS69/R, adopted 23 July 1998, as modified by Appellate Body Report WT/DS69/AB/R, DSR 1998:V, p. 2089

EC – Seal Products

Appellate Body Reports, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, _WT/DS400/AB/R / _WT/DS401/AB/R, adopted 18 June 2014, DSR 2014:I, p. 7

EC – Seal Products

Panel Reports, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, _WT/DS400/R and Add.1 / _WT/DS401/R and Add.1, adopted 18 June 2014, as modified by Appellate Body Reports WT/DS400/AB/R / WT/DS401/AB/R, DSR 2014:II, p. 365

EC – Tariff Preferences

Panel Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, _WT/DS246/R, adopted 20 April 2004, as modified by Appellate Body Report WT/DS246/AB/R, DSR 2004:III, p. 1009

EC – Trademarks and Geographical Indications

Panel Reports, European Communities – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs, WT/DS290/R (Australia) / WT/DS174/R (US), adopted 20 April 2005, DSR 2005:VIII, p. 3499 / DSR 2005: X, p. 4603

EC and certain member States – Large Civil Aircraft

Panel Report, European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, _WT/DS316/R, adopted 1 June 2011, as modified by Appellate Body Report, WT/DS316/AB/R, DSR 2011:II, p. 685

India – Additional Import Duties

Appellate Body Report, India – Additional and Extra-Additional Duties on Imports from the United States, _WT/DS360/AB/R, adopted 17 November 2008, DSR 2008:XX, p. 8223

India – Autos

Panel Report, India – Measures Affecting the Automotive Sector, _WT/DS146/R, _WT/DS175/R, and Corr.1, adopted 5 April 2002, DSR 2002:V, p. 1827

India – Quantitative Restrictions

Panel Report, India – Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products, _WT/DS90/R, adopted 22 September 1999, upheld by Appellate Body Report WT/DS90/AB/R, DSR 1999:V, p. 1799

Japan – Alcoholic Beverages II

Appellate Body Report, Japan – Taxes on Alcoholic Beverages, _WT/DS8/AB/R, _WT/DS10/AB/R, _WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, p. 97

Japan – Film

Panel Report, Japan – Measures Affecting Consumer Photographic Film and Paper, _WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, p. 1179

Korea – Alcoholic Beverages

Appellate Body Report, Korea – Taxes on Alcoholic Beverages, _WT/DS75/AB/R, _WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:I, p. 3

Korea – Various Measures on Beef

Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, _WT/DS161/AB/R, _WT/DS169/AB/R, adopted 10 January 2001, DSR 2001:I, p. 5

Korea – Various Measures on Beef

Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, _WT/DS161/R, _WT/DS169/R, adopted 10 January 2001, as modified by Appellate Body Report WT/DS161/AB/R, WT/DS169/AB/R, DSR 2001:I, p. 59

Mexico – Taxes on Soft Drinks

Appellate Body Report, Mexico – Tax Measures on Soft Drinks and Other Beverages, _WT/DS308/AB/R, adopted 24 March 2006, DSR 2006:I, p. 3

Peru – Agricultural Products

Appellate Body Report, Peru – Additional Duty on Imports of Certain Agricultural Products, _WT/DS457/AB/R and Add.1, adopted 31 July 2015

Thailand – Cigarettes (Philippines)

Appellate Body Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, _WT/DS371/AB/R, adopted 15 July 2011, DSR 2011:IV, p. 2203

Turkey – Rice

Panel Report, Turkey – Measures Affecting the Importation of Rice, _WT/DS334/R, adopted 22 October 2007, DSR 2007:VI, p. 2151

Turkey – Textiles

Panel Report, Turkey – Restrictions on Imports of Textile and Clothing Products, _WT/DS34/R, adopted 19 November 1999, as modified by Appellate Body Report WT/DS34/AB/R, DSR 1999:VI, p. 2363

US – 1916 Act

Appellate Body Report, United States – Anti-Dumping Act of 1916, _WT/DS136/AB/R, _WT/DS162/AB/R, adopted 26 September 2000, DSR 2000:X, p. 4793

US – Carbon Steel

Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany, _WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779

US – COOL

Appellate Body Reports, United States – Certain Country of Origin Labelling (COOL) Requirements, _WT/DS384/AB/R / _WT/DS386/AB/R, adopted 23 July 2012, DSR 2012:V, p. 2449

US – Corrosion-Resistant Steel Sunset Review

Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan, _WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, p. 3

US – FSC (Article 21.5 – EC)

Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations" – Recourse to Article 21.5 of the DSU by the European Communities, _WT/DS108/AB/RW, adopted 29 January 2002, DSR 2002:I, p. 55

US – Gambling

Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, _WT/DS285/AB/R, adopted 20 April 2005, DSR 2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475)

US – Gasoline

Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, _WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, p. 3

US – Lamb

Panel Report, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, _WT/DS177/R, _WT/DS178/R, adopted 16 May 2001, as modified by Appellate Body Report WT/DS177/AB/R, WT/DS178/AB/R, DSR 2001:IX, p. 4107

US – Poultry (China)

Panel Report, United States – Certain Measures Affecting Imports of Poultry from China, _WT/DS392/R, adopted 25 October 2010, DSR 2010:V, p. 1909

US – Shrimp

Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, _WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, p. 2755

US – Shrimp (Thailand) / US – Customs Bond Directive

Appellate Body Report, United States – Measures Relating to Shrimp from Thailand / United States – Customs Bond Directive for Merchandise Subject to Anti-Dumping/Countervailing Duties, _WT/DS343/AB/R / _WT/DS345/AB/R, adopted 1 August 2008, DSR 2008:VII, p. 2385 / DSR 2008:VIII, p. 2773

US – Shrimp (Thailand)

Panel Report, United States – Measures Relating to Shrimp from Thailand, _WT/DS343/R, adopted 1 August 2008, as modified by Appellate Body Report WT/DS343/AB/R / WT/DS345/AB/R, DSR 2008:VII, p. 2539

US – Underwear

Panel Report, United States – Restrictions on Imports of Cotton and Man-made Fibre Underwear, _WT/DS24/R, adopted 25 February 1997, as modified by Appellate Body Report WT/DS24/AB/R, DSR 1997:I, p. 31

US – Wool Shirts and Blouses

Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, _WT/DS33/AB/R, adopted 23 May 1997, and Corr.1, DSR 1997:I, p. 323

 

 


GATT CASES CITED IN THIS REPORT

 

Short Title

Full Case Title and Citation

Canada – Provincial Liquor Boards (EEC)

GATT Panel Report, Canada – Import, Distribution and Sale of Alcoholic Drinks by Canadian Provincial Marketing Agencies, L/6304, adopted 22 March 1988, BISD 35S/37

Canada – Provincial Liquor Boards (US)

GATT Panel Report, Canada – Import, Distribution and Sale of Certain Alcoholic Drinks by Provincial Marketing Agencies, DS17/R, adopted 18 February 1992, BISD 39S/27

EEC – Minimum Import Prices

GATT Panel Report, EEC – Programme of Minimum Import Prices, Licences and Surety Deposits for Certain Processed Fruits and Vegetables, L/4687, adopted 18 October 1978, BISD 25S/68

Japan – Leather (US II)

GATT Panel Report, Panel on Japanese Measures on Imports of Leather, L/5623, adopted 15 May 1984, BISD 31S/94

Japan – Semi-Conductors

GATT Panel Report, Japan – Trade in Semi-Conductors, L/6309, adopted 4 May 1988, BISD 35S/116

 

 


ABBREVIATIONS USED IN THIS REPORT

Abbreviation

Description

ASEIBSSINDO

Indonesian association of horticultural product importers

Animal Law

Law of the Republic of Indonesia Number 18 of 2009 on Animal Husbandry and Animal Health

Animal Law Amendment

Law of the Republic of Indonesia Number 41 of 2014 Concerning Amendment of Law Number 18 of 2009 Concerning Husbandry and Animal Health

API

Importer Registration Number

API-U

Importer Registration Number for companies importing certain goods for trading purposes

API-P

Importer Registration Number for companies importing goods for their own consumption

BULOG

Indonesia's Logistics Agency

DSB

Dispute Settlement Body

DSU

Understanding on Rules and Procedures Governing the Settlement of Disputes

Farmers Law

Law of the Republic of Indonesia Number 19 of 2013 Concerning Protection and Empowerment of Farmers

Food Law

Law of the Republic of Indonesia Number 18 of 2012 Concerning Food

GATT 1994

General Agreement on Tariffs and Trade 1994

Horticulture Law

Law of the Republic of Indonesia Number 13 of 2010 Concerning Horticulture

Import Licensing Agreement

Agreement on Import Licensing Procedures

INATRADE

Trade Licensing Services Using Electronic and Online System

INSW

Indonesia National Single Window

UPP

Trade Services Unit

MOA

Ministry of Agriculture

MOA 86/2013

Regulation of the Minister of Agriculture Number 86/Permentan/OT.140/8/2013 Concerning Import Recommendation of Horticulture Products, of 30 August 2013

MOA 139/2014, as amended

Regulation of the Minister of Agriculture Number 139/Permentan/PD.410/12/2014 Concerning Importation of Carcasses, Meats, and/or Their Processed Products into the Territory of the Republic of Indonesia, of 24 December 2014 amended by Regulation of the Minister of Agriculture Number 02/Permentan/PD.410/1/2015, of 22 January 2015

MOA Recommendation

Recommendation from the Ministry of Agriculture

MOT

Ministry of Trade

MOT 16/2013, as amended

Regulation of the Minister of Trade Number 16/M-DAG/PER/4/2013 Concerning Provisions on the Import of Horticultural Products, of 22 April 2013, amended by Regulation of the Minister of Trade Number 47/M-DAG/PER/8/2013 Concerning Amendment of Regulation of the Minister of Trade Number 16/M-DAG/PER/4/2013, of 30 August 2013

MOT 46/2013, as amended

Regulation of the Minister of Trade Number 46/M-DAG/PER/8/2013 Concerning Provisions on the Import and Export of Animals and Animal Products, of 30 August 2013, amended by Regulation of the Minister of Trade No. 57/M-DAG/PER/9/2013, of 26 September 2013 and by Regulation of the Minister of Trade 17/M-DAG/PER/3/2014, of 27 March 2014

MUI

Indonesian Council of Ulama

PI

Producer Importer of Horticultural Products

REIPPT

Export Import Recommendation for Certain Agricultural Products

RI

Registered Importer of Horticultural Products

RIPH

Horticultural Products Import Recommendation (Rekomendasi Impor Produk Hortikultura)

SPS Agreement

Agreement on Sanitary and Phytosanitary Measures

TBT Agreement

Agreement on Technical Barriers to Trade

 


1  Introduction

1.1  Complaints by New Zealand and the United States

1.1.  On 8 May 2014, New Zealand and the United States (the co-complainants) requested consultations with Indonesia pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994), Article 19 of the Agreement on Agriculture, Article 6 of the Agreement on Import Licensing Procedures (Import Licensing Agreement), and Articles 7 and 8 of the Agreement on Preshipment Inspection concerning certain measures imposed by Indonesia on the importation of horticultural products and animals and animal products into Indonesia.[1]

1.2.  The co-complainants held consultations with Indonesia in Jakarta on 19 June 2014 but failed to resolve the dispute.[2]

1.2  Panel establishment and composition

1.3.  On 18 March 2015, the co-complainants requested the establishment of a panel pursuant to Article 6 of the DSU with standard terms of reference.[3] At its meeting on 20 May 2015, the Dispute Settlement Body (DSB) established a single panel pursuant to the requests of the co-complainants, in accordance with Article 9.1 of the DSU.[4]

1.4.  The Panel's terms of reference are the following:

To examine, in the light of the relevant provisions of the covered agreements cited by the parties to the dispute, the matter referred to the DSB by New Zealand in document WT/DS477/9, and the United States in document WT/DS478/9, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.[5]

1.5.  On 28 September 2015, the co-complainants requested the Director-General to determine the composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU. On 8 October 2015, the Director-General accordingly composed the Panel as follows:

Chairman: Mr Cristian Espinosa Cañizares

Members: Mr Gudmundur Helgason

Ms Angela María Orozco Gómez

1.6.  Argentina; Australia, Brazil, Canada, China, the European Union, India, Japan, Korea, Norway, Paraguay, Singapore, Chinese Taipei, and Thailand reserved their rights to participate in the panel proceedings as third parties.[6]

1.3  Panel proceedings

1.3.1  General

1.7.  On 28 October 2015, after consultation with the parties, the Panel adopted its Working Procedures[7] and timetable. The timetable was subsequently revised on 12 December 2015.

1.8.  The Panel held a first substantive meeting with the parties on 1 and 2 February 2016. A session with the third parties took place on 2 February 2016. The Panel held a second substantive meeting with the parties on 13 and 14 April 2016.

1.9.  On 26 May 2016, the Panel issued the descriptive part of its Report to the parties. The Panel issued its Interim Report to the parties on 12 July 2016. The Panel issued its Final Report to the parties on 5 July 2016.

1.3.2  Request for enhanced third-party rights

1.10.  On 2 December 2015, Australia, Brazil, Canada and the European Union jointly requested the Panel to exercise its discretion under Article 12.1 of the DSU to modify its Working Procedures. The requesting third parties asked the Panel to grant them additional rights to those provided in Article 10 of the DSU, in particular: (i) "to receive an electronic copy of all submissions and statements of the parties, including responses to Panel questions, up to the issuance of the interim report"[8]; and (ii) "to be present for the entirety of all substantive meetings of the Panels with the parties".[9]

1.11.  Responding to the Panel's invitation to present their views on this request, both the United States[10] and Indonesia[11] opposed the granting of enhanced rights to third parties in these proceedings. New Zealand supported the request.[12]

1.12.  On 20 January 2016, the Panel issued a communication where it declined Australia, Brazil, Canada and the European Union's joint request for enhanced third party rights in these proceedings.

1.3.3  Request for a preliminary ruling

1.13.  On 11 December 2015, Indonesia submitted to the Panel a request for a preliminary ruling concerning the consistency of New Zealand's and the United States' panel requests and first written submissions with the requirements of the DSU.[13]

1.14.  In response to the Panel's invitation to provide their views on Indonesia's request, the United States and New Zealand provided a joint communication on 21 December 2015. The Panel also provided third parties with an opportunity to comment on the preliminary ruling request prior to the submission of Indonesia's first written submission. Only Australia and Brazil took advantage of this opportunity and submitted to the Panel their comments on Indonesia's preliminary ruling request on 6 January 2016.

1.15.  In the light of Indonesia's wish that the Panel rule on its request before the first substantive meeting, the Panel decided to communicate its conclusions on Indonesia's request on 27 January 2016, as early as possible before its first substantive meeting. At that time, the Panel indicated that, following prior practice[14] and in the interest of the efficiency of the proceedings, more detailed reasons in support of those conclusions would be provided as soon as possible and, in any event, prior to the date of issuance of the Interim Report.[15] The Panel issued its preliminary ruling to the parties, with a copy to the third parties, on 5 July 2016. The Panel's preliminary ruling of 5 July 2016 is an integral part of this panel Report and is included in Annex A-1.

2  Factual aspects

2.1  Introduction

2.1.  The co-complainants challenged 18 separate measures that Indonesia imposed on the importation of horticultural products, animals and animal products. Most of these measures constituted distinct elements or components of Indonesia's import licensing regimes for horticultural products, on the one hand, and animals and animal products, on the other. Two of the challenged measures concern the import licensing regimes "as a whole", defined as these distinct elements operating in conjunction. In addition, the co-complainants challenged Indonesia's requirement conditioning the importation of horticultural products and animals and animal products on Indonesia's determination of the sufficiency of domestic production to fulfil domestic demand.

2.2.  In this section of the Report, the Panel will describe Indonesia's legal framework for the importation of horticultural products, animals and animal products; the relevant import licensing application and issuance procedures and the measures at issue in this dispute.

2.3.  The Panel notes that the parties disagree on a number of factual issues. To the extent that it is necessary for the Panel to resolve those disputed factual issues, it will do so in its Findings.

2.2  Indonesia's legal framework for the importation of horticultural products, animals and animal products

2.2.1  Overarching legislative framework

2.2.1.1  Food Law

2.4.  The Law of the Republic of Indonesia Number 18 of 2012 Concerning Food (Food Law)[16] deals with national food production, planning and management. It emphasizes the importance of sovereignty[17] and independence[18] in food policy-making. While instituting an overarching principle of sufficiency of domestic production, its provisions define the scope and objectives of, inter alia, national food production, management, planning, availability, affordability, distribution, consumption and trade. Indonesia's Food Law also delineates the role of government institutions in managing food supply and distribution as well as price stabilization.[19] It prioritizes domestic food production and national food reserves as the main sources of food supply, with importation to be considered only in case of food shortages.[20] It enshrines the government's overall responsibility in formulating food import regulations that are supportive of sustainable farming and foster farmer and consumer welfare.[21] The Food Law also addresses the implementation and monitoring of halal requirements.[22]

2.2.1.2  Farmers Law

2.5.  The Law of the Republic of Indonesia Number 19 of 2013 Concerning Protection and Empowerment of Farmers (Farmers Law)[23] aims at assisting farmers to cope with numerous production and marketing challenges (infrastructure, risk-management, capacity-building, finance, etc.). Indonesia's Farmers Law applies to agricultural commodities[24] and echoes the fundamental principles of sufficiency and prioritization of domestic agricultural production (and consumption), while citing price stabilization objectives. To enforce adherence to the sufficiency principle, the Farmers Law prohibits the importation of agricultural commodities when domestic supply or government food reserves are deemed sufficient.[25] In order to meet national food requirements, "import arrangements" must be planned by the government "according to the harvest season and/or domestic consumption requirement", with relevant inter-ministerial coordination.[26] The Farmers Law further requires all agricultural imports to come into Indonesia through government‑stipulated entry points.[27] It broadly establishes import licensing procedures for agricultural products[28] as well as stipulating criminal penalties for not conforming to the designated entry points[29] and for importing agricultural commodities when domestic supply is sufficient.[30]

2.2.1.3  Horticulture Law

2.6.  The Law of the Republic of Indonesia Number 13 of 2010 Concerning Horticulture (Horticulture Law)[31] lays down general rules regarding planning, development, research, finance, investment, marketing (including distribution) and imports. Indonesia's Horticulture Law also enshrines the principle of sufficiency and prioritization of domestic production with respect to horticultural products.[32] In addition to food safety, quality, packaging and labelling requirements, importation under the Horticulture Law is subject to criteria such as the "availability of domestic horticultural products" and the "established production and consumption targets".[33] It also contains the generally applicable import licensing requirements (namely, a recommendation from the Ministry of Agriculture; an import permit from the Ministry of Trade; and the mandated use of government-designated entry points[34]) subject to the issuance of supplementary specific regulations.[35] It provides that the Minister of Agriculture determines the types of horticultural products whose exit and/or entry from and to Indonesia's territory "requires permit".[36] This Law makes the Government and/or local governments along with business actors collectively responsible for balancing national supply and demand for horticultural products, inter alia by controlling imports and exports.[37]

2.2.1.4  Animal Law

2.7.  The Law of the Republic of Indonesia Number 18 of 2009 on Animal Husbandry and Animal Health (Animal Law)[38] as revised by the Law of the Republic of Indonesia Number 41 of 2014 Concerning Amendment of Law Number 18 of 2009 Concerning Husbandry and Animal Health (Animal Law Amendment)[39] constitutes the legal foundation for the organization of husbandry and preservation of animal health (i.e. prevention of animal disease and zoonosis). Indonesia's Animal Law applies to animals[40] and animal products.[41] This Law mirrors the concepts of food sovereignty, sufficiency, independence, and food security that are found in the above Laws.[42] As far as manufacturing is concerned, the Animal Law prioritizes "domestic raw material utilization".[43] It also specifically regulates the importation of animals and animal products. Importation is only permitted if "domestic production and supply of Livestock and Animal Product has not fulfil[ed] public consumption".[44] The Animal Law requires central and regional government agencies to ensure that all animal products, whether locally produced or imported, are halal and comply with quality and safety regulations during the entire supply chain.[45] Only animal products that have been certified as halal[46] and safe may be distributed.[47] Additionally, processed food of animal origin "must comply with the provision of the regulating legislation in the food sector".[48] The Ministry of Trade is the competent body to issue import licences for animal products (fresh and processed), after the applicants have obtained a "recommendation" from the relevant governmental agencies.[49]

2.2.2  Importation-related regulations adopted by Indonesia's Ministries of Trade and Agriculture in force at the time of the establishment of the Panel

2.8.  The Horticulture, Animal, Food and Farmers Laws provide the basis and rationale for the import licensing regimes for horticultural products on the one hand, and animals and animal products on the other.[50] Although these two separate regimes share common features, the applicable importation rules and procedures differ and are set out in two distinct sets of regulations adopted by the Ministry of Trade and the Ministry of Agriculture: (i) MOT 16/2013, as amended[51], and MOA 86/2013[52] set out Indonesia's import licensing regime for horticultural products in force at the time of the establishment of the Panel[53]; and (ii) MOT 46/2013, as amended[54], and MOA 139/2014, as amended[55], set out Indonesia's import licensing regime for animals and animal products in force at the time of the establishment of the Panel.[56]  

2.9.  An element common to both regimes is that all importers of goods, whatever their nature, must obtain an importer registration number or API, which is further differentiated in two sub-categories, depending on the intended end-use of the goods being imported[57]; namely, API-U, which is granted only to companies importing certain goods for trading purposes[58]; and API-P, which is only delivered to companies importing goods for their own consumption and that are thus prohibited from trading or transferring such goods to other parties.[59]

2.2.2.1  Import licensing procedures for horticultural products

2.10.  The import licensing application and issuance procedures that relate to certain horticultural products are described below. Annex E-1 contains a graphical representation of these procedures.

2.2.2.1.1  Application process and related requirements

2.11.  Prior to importation, applicants must complete the following steps:

a.    Obtain a "Horticultural Products" designation from the Ministry of Trade.[60] This designation differs depending on end-use: (i) If the applicant wishes to import horticultural products for human consumption, a designation as a Registered Importer of Horticultural Products (RI) must be obtained[61]; (ii) If the applicant wishes to use imported horticultural products as raw materials in a production process, a designation as a Producer Importer of Horticultural Products (PI) must be obtained[62];

b.    Obtain a Horticultural Products Import Recommendation (Rekomendasi Impor Produk Hortikultura or RIPH) from the Ministry of Agriculture[63],

c.    Obtain an Import Approval (Surat Persetujuan Import) from the Ministry of Trade[64], and

d.    Undergo a technical inquiry[65], carried out by a Surveyor[66] at the port of origin.

2.12.  The above steps can differ in sequence, depending on the intended use of the imported horticultural product. If the product is destined for human consumption, the applicant needs to obtain the RI recognition first. Once registered, the RI may proceed to request an RIPH, followed by an Import Approval.[67] If the product is intended to be used as raw material in a production process, the applicant needs to obtain the RIPH first. Only then may the applicant seek recognition as a PI.[68]

2.2.2.1.2  Recognition either as an RI or PI by the Ministry of Trade

2.13.  The application process, documentary requirements and validity periods relating to the recognition as an RI or PI are regulated by MOT 16/2013, as amended. As mentioned above, pursuant to Article 3 of MOT 16/2013, as amended, a designation either as a PI or and RI is a mandatory preliminary step. All applications are submitted electronically[69] to the Trade Services Unit (UPP), and addressed to the UPP Coordinator and Implementer, who manages the licensing service.[70]

2.2.2.1.2.1  Recognition as an RI

2.14.  This is the first step for importers seeking to import horticultural products for human consumption. Importers holding an RI designation can import horticultural products for human consumption but are prohibited from trading or transferring products directly to consumers or retailers.[71] Importers holding an RI designation may only trade and/or transfer such imports to a "distributor" and cannot therefore sell the imported products directly to consumers.[72] RI applications may be submitted at any time electronically.[73] The documentation submitted is then verified for completeness[74], after which, an "Assessment Team"[75] checks its veracity and conducts a field inspection.[76] Both the document verification and the field inspection are "conducted no later than" three working days from the date an application is deemed complete, and "conducted in no more than" three working days.[77] If the results of the inspection process are satisfactory, the UPP Coordinator grants the RI designation within the next two working days; otherwise the application is rejected.[78] Once issued, the validity period for the RI designation is two years starting from the date of issuance.[79]

2.2.2.1.2.2  Recognition as a PI

2.15.  This is the second step for importers seeking to import horticultural products as raw materials as they need to obtain an RIPH first. An importer who obtains a PI-designation can only import fresh or processed horticultural products as raw materials or auxiliary materials for its industrial production processes and is prohibited from trading and/or transferring these horticultural products.[80] PI applications may be submitted at any time electronically.[81] The verification process is identical to that applying to the RI designation.[82] The validity period for the PI designation "will correspond with the validity period of a[n] RIPH" starting from the date of the PI issuance.[83]

2.2.2.1.3  Obtaining an RIPH

2.16.  After having obtained the RI designation, this is the second step for importers of horticultural products for human consumption; and the first step for importers seeking to import horticultural products as raw materials, i.e. prospective PI applicants. The issuance of the RIPH is also a pre-requisite to the issuance of an Import Approval in the case of RIs.[84] The application process is open twice a year for 15 working days, i.e. in November and in May[85], and applications are submitted electronically.[86] A maximum timeframe of seven working days is foreseen for the verification and issuance process to be completed, after which the RIPH is issued.[87] The RIPH letters are issued twice a year, with a six-month validity period, i.e. from January to June, and from July to December.[88] However, in the case of chillies and fresh shallots for consumption, RIPHs are issued for three-month periods and on the basis of reference prices pursuant to Article 5.[89]

2.2.2.1.4  Obtaining an Import Approval

2.17.  As a third step, importers of horticultural products for human consumption holding an RI designation and an RIPH must also obtain an Import Approval from the Ministry of Trade.[90] The application must be addressed electronically[91] to the UPP Coordinator attaching the RIPH and the confirmation as RI-Horticultural Products. The UPP Coordinator then issues the Import Approval "no more than" two working days after the application is deemed complete and accurate.[92] The timing for the submission of such applications is specifically regulated. Hence, the application windows are of one-month duration, twice a year. For imports of fresh and processed horticultural products listed in Appendix I that are scheduled for the period from January to June, "applications can only be submitted in the month of December"; and for imports planned for the period from July to December, "applications can only be submitted in the month of June."[93] The Import Approvals are issued "at the beginning of each semester"[94] and remain valid for that same semester.[95]

2.18.  For chillies and fresh shallots for consumption, applications "can be submitted at any time".[96] Import Approvals remain valid for three months.[97]

2.2.2.1.5  Technical inquiry at the port of origin

2.19.  Once the Import Approval has been issued, all imports of fresh and processed horticultural products, whether by RIs or PIs, "must first undergo verification or technical inquiry at the port of origin".[98] These mandated "technical inquiries" are carried out by Surveyors appointed by the Ministry of Trade.[99] Once such inspections are completed, actual shipments may take place.[100]  

2.2.2.2  Import licensing procedures for animals and animal products

2.20.  The import licensing application and issuance procedures that relate to animals and animal products are described below. Annex E-2 contains a graphical representation of these procedures.

2.2.2.2.1  Application process and related requirements

2.21.  Importers must obtain similar approvals to those required when importing horticultural products, albeit with a number of procedural differences. The approvals required to import animals and animal products depend on whether the product is listed in Appendix I or II of MOT 46/2013, as amended, and MOA 139/2014, as amended:

a.    For the importation of cattle and beef meat and offals listed in Appendix I of MOT 46/2013, as amended, and MOA 139/2014, as amended, three approvals are required in the following sequence: (i) Recognition as an RI from the Ministry of Trade[101]; (ii) Recommendation from the Ministry of Agriculture ("MOA Recommendation")[102]; and (iii) Import Approval from the Ministry of Trade[103];

b.    For importation of the non-bovine animals, meat and offals listed in Appendix II of MOT 46/2013, as amended, and MOA 139/2014, as amended, two approvals are required in the following sequence: (i) MOA Recommendation[104]; and (ii) Import Approval from the Ministry of Trade.[105]

2.2.2.2.2  Recognition as an RI

2.22.  Obtaining recognition as an RI is the first step for importers seeking to import cattle and beef meat and offals listed in Appendix I of MOT 46/2013, as amended. This step is not foreseen in the case of products listed in Appendix II of MOT 46/2013, as amended.[106] As in the case of horticultural products, all applications are submitted electronically to the UPP and addressed to the UPP Coordinator and Implementer. The UPP Coordinator then conducts document and field inspections to investigate the correctness of the application materials[107], in a similar manner and within identical timelines as those described above in paragraph 2.14 above with respect to horticultural products. RI designations are valid for two years from the date of issuance and "can be extended".[108]

2.2.2.2.3  Obtaining an MOA Recommendation

2.23.  Obtaining the MOA Recommendation is the second step for recognized RIs wishing to import products listed in Appendix I of MOT 46/2013, as amended, and MOA 139/2014, as amended; and the first step for companies wishing to import the products listed in Appendix II of MOT 46/2013, as amended, and MOA 139/2014, as amended.[109] Obtaining an MOA Recommendation is also a mandatory step prior to applying for an Import Approval.[110]

2.24.  To obtain an MOA Recommendation, eligible applicants[111] have four windows, i.e. in December, March, June and September, to submit an electronic application to the Ministry of Agriculture.[112] It is foreseen that the outcome is notified within seven working days.[113] MOA Recommendations are issued four times a year in March, June, September, and December (for the following year).[114] They remain valid at the latest until the end of the year to which they apply.[115] Importers of carcasses, meat, and/or their processed products are prohibited from requesting changes to the country of origin, point of entry, type/category of carcasses, meat, and/or their processed products in already issued Recommendations.[116]

2.25.  In emergency circumstances, MOA 139/2014, as amended, provides that state-owned enterprises may be tasked by the Minister of State-Owned Enterprises to import carcasses and/or secondary cuts of meat in order to address food availability, price volatility, anticipated inflation or natural disasters.[117] The same exception is mirrored in MOT 46/2013 as amended, allowing BULOG, Indonesia's Logistics Agency, to import the animals and animal products listed in Appendix I of the same regulation, for food security or price stabilization purposes. In that instance, BULOG would also be exempted from seeking RI registration. Attaching an MOA Recommendation when applying for an Import Approval would suffice.[118]

2.2.2.2.4  Obtaining an Import Approval

2.26.  As previously outlined in paragraph 2.21 above, obtaining an Import Approval is the third step for importers seeking to import cattle and beef meat and offals listed in Appendix I of MOT 46/2013, as amended, and MOA 139/2014, as amended, after obtaining both the RI designation and MOA Recommendation; and the second step, for importers seeking to import non-bovine animals, meat, and offals listed in Appendix II of MOT 46/2013, as amended, and MOA 139/2014, as amended, after having obtained the MOA Recommendation.[119] As for horticultural products, requests for import approvals are submitted online to the UPP Coordinator and Implementer in accordance with fixed application windows preceding each quarter.[120] Import approvals are granted within two working days once the application is deemed complete[121], are issued "at the beginning of each quarter" for any of the periods, January to March, April to June, July to September, or October to December, and have a three-month validity.[122] The validity period of import approvals may be extended for a maximum of 30 days under certain circumstances, except in the fourth quarter of the year when extension is not possible.[123]

2.2.2.2.5  Obtaining a Certificate of Health

2.27.  A Certificate of Health from the country of origin of the animals and animal products that are to be imported must be issued after the RIs have received their Import Approvals.[124] The Import Approval Number must be specified in the Certificate of Health that must accompany every shipment of animal products to Indonesia.[125]

2.2.3  Post-establishment regulations

2.28.  This section covers certain changes to the import licensing regimes for both horticultural products and animals and animal products that took place after the establishment of this Panel.

2.29.  Concerning the general importer identification, from January 2016[126], API registrations are valid as long as importers have on-going business activities. Importers holding an API are required to re-register at the issuing agency every five years commencing from the issuance date.[127]

2.30.  With respect to the import licensing regime for horticultural products[128], the RI and PI designation processes have been eliminated so that importers of horticultural products need only obtain an RIPH, and an Import Approval, for each validity period.[129] The end-use requirements previously applying to RIs and PIs and some of the documentary requirements have however been maintained. Another element modified is the timing for the submission of applications for Import Approvals: while Import approval applications by API-Ps can be submitted at any time[130], API-Us wishing to import fresh horticultural product have two one-month application windows (December, for imports scheduled for the January-June semester; and June for the July-December semester). API-U applications for chillies and fresh shallots for consumption, and for processed horticultural products can be presented at any time.[131] In addition, the 80% realization requirement and the accompanying penalty to reduce import allocations for the next period have been repealed.[132] Once importers receive their Import Approval they must, however, continue to report on imports realized, attaching the scanned results of an Import Realization Control Card, duly stamped by a Customs and Excise official.[133] Failing to do so twice will cause the Import Approval to be suspended for the next period.[134]

2.31.  Concerning the import licensing regime for animal and animal products[135], the RI designation processes have also been eliminated so that to import Appendix I and Appendix II products, API-U and API-P importers only need obtain the MOA Recommendation and the MOT Import Approval.[136] The 80% import realization requirement has also been repealed, although importers need to still submit written reports on their respective import realizations, for supervision purposes.[137] The validity period for the MOA Recommendation and Import Approval has been extended from three to four months (1 January to 30 April; 1 May to 30 August; 1 September to 31 December), with a corresponding reduction in the number of application windows from four per year to three.[138] Furthermore, the listing of animals and animal products in Appendices I and II has been amended.[139] While the domestic absorption requirement at 3% for API-Us is maintained, this requirement is reduced to 1.5% for API-Ps.[140] Finally, the length of prior storage periods is limited to a maximum of six months from the slaughter time to arrival in Indonesia in the case of imported frozen carcass and meat; and to a maximum of three months in the case of chilled carcass and meat.[141]

2.3  The measures at issue

2.3.1  Introduction

2.32.  As explained above, the co-complainants have challenged a total of 18 measures concerning Indonesia's import licensing regimes for horticultural products and animals and animal products as well as Indonesia's sufficiency of domestic production requirement. The table below enumerates the 18 measures at issue.



A. Import licensing regime for horticultural products

Discrete elements of the regime:

Measure 1

Limited application windows and validity periods

Measure 2

Periodic and fixed import terms

Measure 3

80% realization requirement

Measure 4

Harvest period requirement

Measure 5

Storage ownership and capacity requirements

Measure 6

Use, sale and distribution requirements for horticultural products

Measure 7

Reference prices for chillies and fresh shallots for consumption

Measure 8

Six-month harvest requirement

Regime as a whole:

Measure 9

Import licensing regime for horticultural products as a whole.

B. Import licensing regime for animals and animal products

Discrete elements of the regime:

Measure 10

Prohibition of importation of certain animals and animal products, except in emergency circumstances

Measure 11

Limited application windows and validity periods

Measure 12

Periodic and fixed import terms

Measure 13

80% realization requirement

Measure 14

Use, sale and distribution of imported bovine meat and offal requirements

Measure 15

Domestic purchase requirement

Measure 16

Beef reference price

Regime as a whole:

Measure 17

Import licensing regime for animals and animal products as a whole

c. sufficiency requirement

Measure 18

Sufficiency of domestic production to fulfil domestic demand

 

2.3.2  Import licensing regime for horticultural products

2.3.2.1  Measure 1: Limited application windows and validity periods

2.33.  Measure 1 consists of a combination of the limited application windows and the six-month validity periods of RIPHs and Import Approvals.[142] Indonesia applies this Measure pursuant to Article 13 of Regulation MOA 86/2013[143], which regulates the relevant timeframes concerning RIPHs and Articles 13A[144],14[145], 21[146], 22[147] and 30[148] of Regulation MOT 16/2013, as amended, which does the same for Import Approvals.

2.34.  Pursuant to these provisions, importers may apply for an RIPH for the period from January to June over 15 working days starting in early November of the previous year, and for the period from July to December over 15 working days starting in early May of that year. Applications for Import Approvals may be made in December for the period from January to June, and in June for the period from July to December. Import Approvals are issued "at the beginning" of each semester and are valid for 6 months.

2.3.2.2  Measure 2: Periodic and fixed import terms

2.35.  Measure 2 consists of the requirement to import horticultural products only within the terms of the RIPHs and Import Approvals, including the quantity of the products permitted to be imported, the specific type of products permitted to be imported, the country of origin of the products, and the Indonesian port of entry through which the products will enter, and the impossibility to amend these terms during the validity period of RIPHs and Import Approvals.[149] This Measure is implemented by Indonesia by means of Article 6 of MOA 86/2013[150], that regulates the elements that need to be specified in the RIPHs, and, Article 13[151] and 30[152] of MOT 16/2013, as amended, which stipulates the same for the Import Approvals.

2.36.  Pursuant to these provisions, the RIPHs include the product name, the tariff post/HS of horticulture products, the country of origin, and entry point, while the Import Approvals include the type of imported product, the quantity requested for the six-month semester, the country of origin and the port of entry. Once issued, the terms of RIPHs and Import Approvals cannot be amended or revised during their validity period and therefore importers cannot import other than as specified in the relevant RIPH or Import Approval. When imported products do not coincide with the terms specified in the Import Approvals and/or in the RIPHs, they are destroyed (fresh) or re‑exported (processed) at the importers' cost.[153]

2.3.2.3  Measure 3: 80% realization requirement

2.37.  Measure 3 consists of the requirement that RIs of fresh horticultural products must import at least 80% of the quantity of each type of product specified on their Import Approvals for every six-month validity period.[154] This Measure is implemented through Articles 14A[155], 24[156], 25A[157], 26[158] and 27A[159] of MOT 16/2013, as amended.

2.38.  Pursuant to these provisions, RIs are required to import at least 80% of the quantity specified for each type of horticultural product listed on their Import Approval for every six-month period.[160] Furthermore, RIs must account for the quantity of their realized imports during a semester by submitting an Import Realization Control Card to the Director General of Foreign Trade at the Ministry of Trade on a monthly basis. The Ministry of Trade sanctions RIs that fail to meet the 80% realization requirement or fail to file the Import Realization Control Card, with the suspension of their RI designations. A RI that fails to file the Import Realization Control Card three times could have its designation revoked.

2.3.2.4  Measure 4: Harvest period requirement

2.39.  Measure 4 consists of the requirement that the importation of horticulture products takes place prior to, during and after the respective domestic harvest seasons within a certain time period.[161] Indonesia implements this measure mainly by means of Articles 5[162] and 8[163] of MOA 86/2013.

2.40.  Pursuant to these provisions, importation of horticultural products can only take place prior to, during and after the harvest season, within a certain time period established by the Indonesian authorities. Measure 4 prohibits imports outside the time periods decided by the Ministry of Agriculture.[164] In establishing the time periods, the Ministry of Agriculture is guided by the objectives and determinations made by the Food Security Council[165] which are later published as part of Indonesia's five-year Development Plans. The Ministry of Agriculture communicates its specified time periods to the business community before the start of each application window, notifying officially the Ministry of Trade at the same time. The Ministry of Trade may be consulted prior to the official adoption of a specified time period for a validity period. In turn, the Ministry of Trade gives effect to the specified time periods set by the Ministry of Agriculture by issuing Import Approvals in accordance with the specified time period. Importers are required to submit a plan for the distribution of imported products, indicating the time of entry and the region/municipality where the products will be distributed.

2.3.2.5  Measure 5: Storage ownership and capacity requirements

2.41.  Measure 5 consists of the requirement that importers must own their storage facilities with sufficient capacity to hold the full quantity requested on their Import Application.[166] This requirement is implemented by Indonesia through Article 8(1)(e) of MOT 16/2013, as amended[167], and by Article 8(2)(c) and (d) of MOA 86/2013, as amended.[168]

2.42.  Accordingly, importers applying for designation as an RI are to provide "proof of ownership of storage facilities appropriate for the product's characteristics". In addition, importers applying for an RIPH must include a statement of ownership of storage as part of their applications.

2.3.2.6  Measure 6: Use, sale and distribution requirements for horticultural products

2.43.  Measure 6 consists of the requirements on the importation by PIs and RIs of listed horticultural products that limit the use, sale and distribution of the imported products.[169] Indonesia implements this Measure by means of Articles 7[170], 8[171], 15 and 26(e)-(f)[172] of MOT 16/2013, as amended.[173]

2.44.  Pursuant to these provisions, an importer that obtains recognition as a PI can only import horticultural products as raw materials or auxiliary materials for its industrial production processes and is thus prohibited from trading and/or transferring them. Likewise, an importer that obtains recognition as an RI can only import horticultural products for consumption provided they are traded or transferred to a distributor and not directly to consumers or retailers. Designation as an RI or PI can be revoked where the relevant importer is proven to have traded and/or transferred imported horticultural products.[174]

2.3.2.7  Measure 7: Reference prices for chillies and fresh shallots for consumption

2.45.  Measure 7 consists of the implementation of a reference price system by the Ministry of Trade on imports of chillies and fresh shallots for consumption.[175] Indonesia implements this Measure by means of Article 5(4) of MOA 86/2013[176] and by Article 14B of MOT 16/2013, as amended by MOT 47/2013.[177]

2.46.  Pursuant to these provisions, importation is suspended when the domestic market price falls below the pre-established reference price. Whenever the reference price system is activated, imports are temporarily suspended, independently of whether an importer holds an RIPH and/or an Import Approval. Already authorized import volumes do not "carry over" to the next validity period.[178] Imports are resumed when the market price again reaches the reference price.

2.47.  The term "reference price" is defined as "the reference selling price at the retail level that is established by the Horticultural Product Price Monitoring Team."[179] This team is formed by the Minister of Trade and "consists of representatives from relevant agencies".[180] It has the authority to evaluate the reference price "at any time".[181] In determining the reference price, the Ministry of Trade takes into account: (1) farmers' operational costs; (2) farmers’ profit margins; and (3) a "reasonable price of such products to be sold to customers."[182] The Ministries of Agriculture and Trade (Directorate of Import, Directorate of Export Import Facilitation and Directorate of Primary and Strategic Products) are responsible for monitoring the reference price system while the domestic market prices of chilli and shallot are monitored by Indonesia's Statistic Central Bureau.[183] The reference price calculation methodology and parameters are not published.[184] Pursuant to the Decree of Director General of Domestic Trade No 118/PDN/KEP/10/2013, effective from 3 October 2013, the reference prices have been respectively set as follows: IDR 26,300/kg for big red chilli; IDR 28,000 for bird's eye chilli; and IDR 25,700 for shallot.[185]

2.3.2.8  Measure 8: Six-month harvest requirement

2.48.  Measure 8 consists of the requirement that all imported fresh horticultural products have been harvested less than six months prior to importation.[186] Indonesia implements this measure by means of Article 8(1)(a) of MOA 86/2013.[187] Pursuant to this provision, in order to obtain an RIPH for fresh horticultural products, an RI must produce a statement committing not to import horticultural products harvested over six months prior to importation.

2.3.2.9  Measure 9: Import licensing regime for horticultural products as a whole

2.49.  Measure 9 consists of Indonesia's import licensing regime for horticultural products, as maintained through MOT 16/2013, as amended, and MOA 86/2013, as a whole.[188] Reference is made to the various subsections describing the individual elements of this regime that have been challenged as separate Measures 1 to 8.

2.3.3  Import licensing regime for animals and animal products

2.3.3.1  Measure 10: Import prohibition of certain animals and animal products, except in "emergency circumstances"

2.50.  Measure 10 consists of the prohibition on the importation of bovine meat, offal, carcass and processed products that are not listed in Appendices I of MOT 46/2013, as amended, and MOA 139/2014, as amended; or non-bovine and processed products that are not listed in Appendices II of MOT 46/2013, as amended, and MOA 139/2014, as amended.[189] Indonesia implements this Measure by means of Article 2(2) of MOT 46/2013, as amended[190]; and Articles 8[191] and 23(3)[192] of MOA 139/2014, as amended, and Article 59(1) of the Animal Law Amendment.[193]

2.51.  Pursuant to the above provisions, only those animals and animal products that are listed in the relevant appendices to both MOA 139/2014, as amended, and MOT 46/2013, as amended, are eligible to obtain MOA Recommendations and Import Approvals, and thus can be imported under Indonesia's import licensing regime. State-owned enterprises may be authorized to import unlisted carcasses and/or secondary cut meats up to the amount determined by Indonesian officials to be required to address food availability, price volatility, inflation and/or natural disasters.[194]

2.3.3.2  Measure 11: Limited application windows and validity periods

2.52.  Measure 11 consists of a combination of requirements, including the prohibition on importers from applying for Recommendations and Import Approvals outside four one-month periods, the provision that Import Approvals are valid for only the three-month duration of each quarter, and the requirement that importers are only permitted to apply for Recommendations and Import Approvals in the month immediately before the start of the relevant quarter.[195] This measure is implemented by Indonesia through Article 29 of MOA 139/2014, as amended by MOA 2/2015[196], and Articles 12[197] and 15[198] of MOT 46/2013, as amended.

2.53.  Pursuant to these provisions, the issuance of a recommendation is conducted four times; namely, December of the previous year, and March, June, and September of the current year. Applications for Import Approval of animals and animal products listed in Appendix I can only be submitted as follows: (i) for the first quarter (January to March), in the month of December; (ii) for the second quarter (April to June), in the month of March; (iii) for the third quarter (July to September), in the month of June; and (iv) for the fourth quarter (October to December), in the month of September. The Import Approval is then issued at the beginning of each relevant quarter and is valid for three months.

2.3.3.3  Measure 12: Periodic and fixed import terms

2.54.  Measure 12 consists of the requirement to only import animals and animal products within the terms of the Recommendations and Import Approvals, the prohibition of importing types/categories of carcasses, meat, and/or their processed products other than as specified in Import Approvals and Recommendations, and the prohibition from requesting changes to the elements specified in Recommendations once they have been issued.[199] This measure is implemented by Indonesia through Articles 30[200] and 33(a)-(b) and 39(e)[201] of MOA 139/2014, as amended[202], and Article 30 of MOT 46/2013, as amended.[203]

2.55.  Pursuant to these provisions, MOA Recommendations and Import Approvals must specify, inter alia, the quantity of products permitted to be imported; a description of the type, category, cut and HS Code for the products to be imported; the country of origin of products permitted for importation; and the port of entry into Indonesia through which products are permitted to be imported. Importers are prohibited from requesting changes to the country of origin, point of entry, type/category of carcasses, meat, and/or their processed products once a Recommendation has been issued. If the quantity, type, business unit, and/or country of origin of imports is not in accordance with the relevant Import Approval, those imports will have to be re-exported, at the importer's cost.

2.3.3.4  Measure 13: 80% realization requirement

2.56.  Measure 13 consists of the requirement whereby RIs must import at least 80% of each type of product covered by their Import Approvals every year.[204] This Measure is implemented by Indonesia by means of Articles 13[205], 25[206], 26[207] and 27[208] of MOT 46/2013, as amended.

2.57.  Pursuant to the above provisions, RIs are required to import, on an annual basis, 80% of the quantity of each type of animal and animal product specified in their Import Approvals. In addition, RI designees are required to submit monthly import and export realization reports setting out all of their imports of animals and animal products. These reports must be submitted every month to the Ministry of Trade, the Ministry of Agriculture, and the Head of the Food and Drug Control Agency. The RI designees must attach a photocopy of their "Import Realization Control Card". Failing to fulfil the 80% realization requirement carries the penalty of suspension or revocation of the RI designation, depending on the circumstances established in Articles 26 and 27 of MOT 46/2013, as amended.

2.3.3.5  Measure 14: Use, sale and distribution of imported bovine meat and offal

2.58.  Measure 14 consists of certain requirements that limit the use, sale and distribution of imported animals and animal products, including bovine meat and offal.[209] This measure is implemented by Indonesia through Articles 3[210], 17[211], 25(2)[212] and 26[213] of MOT 46/2013, as amended, and Articles 32[214] and 39(d)[215] of MOA 139/2014, as amended.

2.59.  Pursuant to the above provisions, the animals[216] listed in Appendix I and Appendix II of MOT 46/2013, as amended, can only be imported for the purposes of improving genetic quality and diversity; developing science and technology; overcoming domestic deficiencies of seeds, breeders and/or feeders; and/or fulfilling research and development needs.[217]. For animal products, the bovine carcasses, meats, and/or offals listed in Appendix I of MOT 46/2013 can also be imported for the use and distribution of industry, hotels, restaurants, catering, and/or other special needs.[218] The non-bovine carcasses, meats, and/or offal listed in Appendix II of Article 32 of MOA 139/2014, as amended by MOA 2/2015, may be imported only for the same purposes as the bovine products specified in Appendix I and, additionally, for sale in "modern markets".[219]

2.3.3.6  Measure 15: Domestic purchase requirement for beef

2.60.  Measure 15 consists of the requirement imposed upon importers of large ruminant meats to absorb local beef.[220] Indonesia implements this Measure pursuant to Articles 5(1)[221], and (1)[222], 26(1)[223] and 39(b)-(c)[224] of MOA 139/2014, as amended.

2.61.  Pursuant to these provisions, in applying for a Recommendation, importers must submit proof of local beef purchases duly verified by the provincial agency or municipality of origin. Accordingly, business operators, state-owned enterprises, or regional government-owned enterprises that import large ruminant meats must absorb local beef when applying for a Recommendation.

2.3.3.7  Measure 16: Beef reference price

2.62.  Measure 16 consists of the implementation of a reference price system on imports of Appendix I animals and animal products and the ensuing suspension of imports when the domestic market price of secondary beef cuts falls below the pre-established reference price.[225] This Measure is implemented by means of Article 14 of MOT 46/2013, as amended.[226]

2.63.  Pursuant to these provisions, in the event that the market price of secondary cuts of beef is below the reference price, imports of animals and animal products, as included in Appendix I, are suspended. Imports are resumed when the market price reaches again the reference price. The reference price is set at 76,000 Rupiah/kg.[227]

2.3.3.8  Measure 17: Import licensing regime for animals and animal products as a whole

2.64.  This measure consists of Indonesia's import licensing regime for animals and animal products, as maintained through MOT 46/2013, as amended, and MOA 139/2014, as amended by MOT 2/2015, as a whole.[228] We refer to the various subsections describing the individual elements of this regime which have been challenged as separate Measures 10 to 16.

2.3.4  Measure 18: Sufficiency of domestic production to fulfil domestic demand

2.65.  Measure 18 consists of the requirement whereby importation of horticultural products, animals and animal products depends upon Indonesia's determination of the sufficiency of domestic supply to satisfy domestic demand.[229] This measure is encompassed by Article 36B[230] of the Animal Law Amendment, Article 88 of the Horticulture Law, Articles 14 and 36 of the Food Law[231] and Article 30 of the Farmers Law.[232]

2.66.  Pursuant to these provisions, importation of horticultural products, animals and animal products is contingent upon the sufficiency of domestic supply for consumption and/or government food reserves.

3  Parties' requests for findings and recommendations

3.1  New Zealand

3.1.  New Zealand requests that the Panel finds that:

a.    Indonesia’s import licensing regime for animals and animal products is inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture, both when viewed as a single measure and when its components are viewed as individual measures[233];

b.    Indonesia’s import licensing regime for horticultural products is inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture, both when viewed as a single measure and when its components are viewed as individual measures[234];

c.    Indonesia’s import restrictions based on the sufficiency of domestic production are inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture[235];

d.    the Domestic Purchase Requirement for beef and the restrictions on use, sale and distribution of animals and animal products are inconsistent with Article III:4 of the GATT 1994 to the extent they affect the internal sale, offering for sale, purchase, transportation, distribution or use of products[236];

e.    the restrictions on use, sale and distribution of horticultural products are inconsistent with Article III:4 of the GATT 1994 to the extent they affect the internal sale, offering for sale, purchase, transportation, distribution or use of products[237]; and

f.     the limited application windows and validity periods for MOA Recommendations and Import Approvals for animals and animal products and horticultural products are inconsistent with Article 3.2 of the Import Licensing Agreement to the extent that they are non-automatic import licensing procedures.[238] To the extent that the application windows and validity periods are automatic licensing procedures, New Zealand submits that they would be inconsistent with Article 2.2(a) of the Import Licensing Agreement.[239]

3.2.  Accordingly, New Zealand requests that the Panel recommend to the DSB that Indonesia brings its prohibitions and restrictions on the imports of animals and animal products and horticultural products into conformity with its WTO obligations.[240]

3.2  United States

3.3.  The United States requests that the Panel finds[241] that the prohibitions and restrictions imposed by Indonesia’s import licensing regimes for horticultural products and animals and animal products, operating individually and as whole regimes, and the provisions of Indonesia’s laws conditioning importation on the insufficiency of domestic production to fulfil domestic demand, are inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture.[242]

3.4.  The United States also requests that to the extent that the Panel finds that the limited application windows and validity periods for MOA Recommendations and Import Approvals, both for horticultural products and for animals and animal products, are subject to the disciplines of the Import Licensing Agreement, these requirements would be inconsistent with Article 3.2 of that Agreement.[243]

3.5.  Accordingly, the United States requests, pursuant to Article 19.1 of the DSU, that the Panel recommends the DSB that Indonesia bring the challenged measures into conformity with its WTO obligations.[244]

3.3  Indonesia

3.6.  Indonesia requests the Panel to reject the co-complainants' claims in their entirety.[245]

4  Arguments of the parties

4.1.  The arguments of the parties are reflected in their executive summaries, provided to the Panel in accordance with paragraph 18 of the Working Procedures adopted by the Panel (see Annexes B-1 and B-2).

5  Arguments of the thiRd parties

5.1.  The arguments of Argentina, Australia, Brazil, Canada, the European Union, Japan, Korea, Norway, Paraguay and Chinese Taipei are reflected in their executive summaries, provided in accordance with paragraph 21 of the Working Procedures adopted by the Panel (see Annexes C-1, C-2, C-3, C-4, C-5, C-6, C-7, C-8, and C-9).

6  Interim review

6.1  Introduction

6.1.  On 12 July 2016, the Panel issued its Interim Report to the parties. On 26 July 2016, New Zealand, the United States and Indonesia submitted written requests for the review of the Interim Report. No party requested an interim review meeting. On 2 August 2016, New Zealand and the United States submitted comments on Indonesia's request for review. Indonesia did not submit comments on the co-complainants' requests for review.

6.2.  In accordance with Article 15.3 of the DSU, this Section of the Panel Report sets out the Panel's response to the parties' requests for review of precise aspects of the Report made at the interim review stage. The Panel modified aspects of its Report in the light of the parties' comments where it considered it appropriate, as explained below. In addition, the Panel also corrected a number of typographical and other non-substantive errors, including those identified by the parties. References to sections and paragraph numbers in this Section relate to the Interim Report, except as otherwise noted.

6.2  Factual Aspects

6.3.  Regarding paragraph 2.8, the United States requested that the Panel make explicit that the measures within our terms of reference are those that were in effect at the time the Panel was established.[246] The United States thus asked us to insert a footnote in the Report including references to Article 7.1 of the DSU and to some jurisprudence. No other party has commented on this request.

6.4.  The Panel observes that the United States' request relates to the descriptive part of the Interim Report, where the parties already had the opportunity to present their views on 2 June 2016. We recall that, at that time, the United States submitted a comment on that same paragraph but in relation to a different issue. The Panel considers that the understanding that the measures at issue in this dispute are those in effect at the time of the Panel's establishment is already reflected in Section 2.3 of the Report entitled "Measures at issue". The Panel thus declines to make the changes suggested by the United States.

6.3  Structure of the findings

6.5.  According to the United States, panel reports frequently contain a section in which the panel sets out its approach to interpretation of the covered agreements as well as the standard of review and burden of proof.