ANNEX B
Arguments
of the Parties
European
Union
|
Contents
|
Page
|
|
Annex B-1
|
First
part of the integrated executive summary of the arguments of the European Union
|
B-2
|
|
Annex B-2
|
Second
part of the integrated executive summary of the arguments of the European
Union
|
B-17
|
RUSSIAN
FEDERATION
|
Contents
|
Page
|
|
Annex B-3
|
First
part of the integrated executive summary of the arguments of the
Russian Federation
|
B-33
|
|
Annex B-4
|
Second
part of the integrated executive summary of the arguments of the Russian
Federation
|
B-44
|
ANNEX B-1
First part of the integrated executive summary of the
arguments of the European Union
I. Introduction
1. The European Union (EU) is challenging
measures adopted by the Russian Federation (Russia) regarding the importation
of live pigs and certain pig products (the products at issue), purportedly
taken because of concerns related to cases of African swine fever (ASF)
accruing on a limited part of the territory of four Member States of the EU (EU
MS), bordering Belarus and Russia.
2. The Russian measures at issue consist of:
(1) four individual bans on trade in live pigs and certain pig products, like
fresh pork, from the entire territory of Lithuania, Poland, Latvia and Estonia
and (2) an EU-wide import ban on trade in live pigs and certain pig products,
like fresh pork.
3. The
EU requested consultations with Russia on 8 April 2014, pursuant to
Articles 1 and 4 of the DSU, Article 11 of the Agreement on the Application
of Sanitary and Phytosanitary Measures (SPS Agreement) and Article XXIII
of the General Agreement on Tariffs and Trade 1994 (GATT 1994).
4. The
EU requested the establishment of a panel pursuant to Article 6 of the DSU on
27 June 2014 and the panel was established on 22 July 2014.
A. African Swine Fever
5. The
ASFV is a devastating infectious disease, usually deadly, in the case of both
feral pigs (wild boars) and domestic pigs of the Sus scrofa
species. No vaccine exists to combat the ASFV. It does not affect human beings
nor does it affect animal species other than domestic pigs and wild boar.
6. One
of the main divergences between the EU and Russia is the approach to ASF
eradication in wild boar. Russia believes that drastic increased hunting
intended to achieve wild boar depopulation may produce positive results.
However, the only result that such increased hunting may bring is rapid further
territorial spread of the disease, through the dispersal of infected animals.
This is thought to be the most likely cause of ASF introduction into certain
limited parts of the EU, from Belarus and from Russia, as wild boar is not a
migratory species.
7. The
EU is not against hunting wild boar in the infected areas per se, but we do not
favour increased hunting pressure or hunting with means which would favour
dispersal of the animals.
8. The
World Organisation for Animal Health (OIE) is the relevant international
standards setting body dealing with animal health issues. The version of the
OIE Terrestrial Code in force at the date of the establishment of the Panel and
thus relevant to the present dispute is the 23rd edition,
adopted in May 2014. These are the only relevant international standards with
regard to ASF.
3.1. Historic Overview
9. The
first ASF cases were reported on the former USSR territory in 1977. More
recently, ASF was introduced in Russia for the first time in the Chechnya
Republic in November-December 2007. Since then ASF has become apparently
endemic in wild boars in the region. The disease widely spread geographically
from the Caucasus further north and westwards, to the borders with Belarus and
Ukraine, in all likelihood infecting pigs in these two countries.
3.2. Present
ASF situation in Russia
10. In
the period 2007-2013 there were 226 ASF outbreaks in wild boar in Russia. The
risk that ASF is endemic in Russia is high. The risk is also high that the
virus will further spread to other areas.
3.3. ASF transmission from Russia Westwards
11. The
virus strain found in the dead wild boar in Lithuania and Poland in 2014
matches 100% the ASF virus strain found in Belarus and belongs to the Genotype
II from Russia.
4.1. Historic Overview
12. With
the exception of the island of Sardinia (Italy), ASF has been eradicated
elsewhere in the EU prior to 2014.
4.2. Present
ASF situation in the EU
13. In
view of the fact that ASF moved closer to the EU borders as evidenced by the
2013 cases in Belarus, the EU MS bordering Russia and Belarus (Estonia, Latvia,
Lithuania and Poland), in compliance with existing EU legislation, put in place
enhanced protection measures. These enhanced measures allowed at the beginning
of 2014 the prompt detection of ASFV in a limited number of cases in wild boar
in Lithuania and Poland, close to the border with Belarus.
14. A
very limited geographical spread of the ASFV as of April 2015, confined to
border regions with Belarus and Russia, and the non-transmission of the ASFV to
our trade partners which continued to import the products at issue from the ASF‑free
areas in the recently affected EU Member States, gives the EU a high degree of
confidence in the robustness of our ASF regionalization measures.
15. The
emergency response in case of ASF in the EU Member States is based on the
national "contingency plans".
Directive 2002/60 establishes that each EU Member State shall draw up a
contingency plan specifying the national measures to be implemented in the
event of an ASF outbreak, taking into account local factors, like the pig
density, which is likely to influence ASF spread.
16. In
the areas considered ASF infected in the
EU three major sets of measures are implemented: i) the disease control
measures in case of outbreaks in domestic pigs laid down in Directive 2002/60;
(ii) in case of ASF in feral pigs (wild boar) the main measures are provided
for in Articles 15 and 16 of Directive 2002/60; the national eradication plans
prepared by the EU Member States describe in detail the applicable measures;
and (iii) an additional layer of safety by the delimitation of different parts
according to the ASF risk, containing specific prohibitions and measures, as
provided in Decision 2014/709.
B. The Measures at Issue
1. Measures
notified to the WTO
17. Russia
notified to the WTO SPS measures concerning four EU MS. De facto, Russia
has applied an EU-wide ban since the very first ASF cases in Lithuania in
January 2014. It calls this measure "provisional compliance with the terms
of the veterinary certificates". However, the EU‑wide ban was never
notified by Russia to the WTO.
18. The
refusal by Russia to accept imports of the products at issue from the entire EU
amounts to an EU-wide ban. The EU identifies this specific measure at issue
both as an action (an import ban or restriction) and, in the alternative, as an
omission (failure to accept imports from the EU). The EU seeks review of this
specific measure at issue as such and as applied, de jure
and de facto (that is, based on all the relevant
facts).
19. Russia
attempts to justify the EU-wide ban by arguing that it cannot return to a
situation where veterinary export certificates are discussed bilaterally with
individual EU Member States, and it apparently considers that this should
somehow be imputable to the EU. In making this argument, Russia acknowledges
the existence and precise content of the EU-wide ban and that it is
attributable to Russia. Finally, Russia is simply wrong to suggest that
anything on the record supports its assertion that the EU has, by implication,
relinquished its right to bring this matter before a panel, pursuant to the
terms of the DSU. The Appellate Body has made it very clear that Members cannot
be considered to have relinquished their DSU rights other than expressly and
unequivocally.
20. Russia chose to obstruct the
process of clarifying the export certificates in light of the current situation
by referring to its arrangements within the framework of the Customs Union with
Belarus and Kazakhstan, which is contradicted by the text of Decision 317/2010
of the Customs Union.
21. According
to its Article 1.1, the SPS Agreement covers sanitary measures which may,
directly or indirectly, affect international trade. The EU established that the
Russian measures are sanitary measures within the meaning of the SPS Agreement
and that they "directly affect international trade". Russia did not
dispute this characterization.
IV. Claims
A. Claims related to
harmonization
22. Russia's
notifications to the SPS Committee with regard to the four individual country‑wide
bans, concerning Lithuania, Poland, Latvia and Estonia make reference to OIE
international standards. The EU considers that the Panel should start its
analysis rather with respect to the harmonization claims and then continue with
the claims related to risk assessment. However, whichever order of analysis the
Panel may chose, given the absence of remand authority under the DSU, judicial
economy may not be appropriate, especially if it prevents the Appellate Body
from completing the legal analysis in the event of an appeal.
23. The
only international standards with respect to the ASF are to be found in the OIE
Terrestrial Code. The international standards, guidelines and recommendations
for animal health are those developed under the auspices of the OIE, according
to Annex A(3)(b). The OIE Terrestrial Code is thus incorporated by reference
into the SPS Agreement and for the purposes of dispute settlement panels and
the Appellate Body have the authority to interpret its provisions. The OIE
Terrestrial Code is not an international agreement (treaty), but it is a
document adopted by the World Assembly of Delegates of the OIE. However, the EU
agrees that in interpreting the Code the WTO adjudicating bodies may seek
guidance in the relevant customary rules of treaty interpretation, including in
the Vienna Convention on the Law of Treaties.
24. The
Appellate Body has clarified that "a measure that conforms to an
international standard would embody the standard completely and, for practical
purposes, converts it into a municipal standard". The OIE Terrestrial Code
recommends regionalization, while Russia applies an EU‑wide ban and country‑wide
bans for the four partially affected EU MS. The Russian measures do not
"conform to" and are not "based on" the relevant
international standards.
25. The
Russian notifications to the SPS Committee are inaccurate and contradictory. It
invokes different chapters of the OIE Terrestrial Manual and the OIE
Terrestrial Code. Chapter 2.8.1. of the OIE Terrestrial Manual only sets
standards for diagnostic tests and vaccines and it does not set the standards
relevant for international trade. Furthermore, according to Russia some of the
measures at issue are related to food safety and the protection of humans from
animal/ plant pest or disease.
26. The
correct applicable standards for the respective measures are mainly to be found
in Chapter 15.1. of the OIE Terrestrial Code, which deals with trade in the
products at issue, in conjunction with Chapter 4.3., which deals with
regionalization. The Russian measures do not conform to any of these standards.
On the contrary, they go against the mentioned standards and impose country‑wide
bans.
27. The
three elements described in the international standards "ASF free country,
zone or compartment" are rather related to the objective characteristics
of the ASF situation and not to the subjective choice of the importing Members.
If the entire country is not ASF free, then the recommendation is to look into
the regionalization measures and allow trade form ASF free zones. If the extent
of the disease spread is so significant that zones cannot be effectively
established, then in principle the recommendation is to allow trade from ASF
free compartments.
28. The
conformity with the international standards of the bans on the importation into
Russia of the products at issue from the EU can be summarized as follows:
- the ban on trade in live pigs does not
follow Article 15.1.5 of the OIE Terrestrial Code;
- the ban on trade in "genetic
material" of pigs does not follow the recommendations in Article 15.1.8.
(semen of domestic pigs) and Article 15.1.10. (in vivo derived embryos of
domestic pigs) of the OIE Terrestrial Code;
- the ban on fresh pork does not follow
Article 15.1.12. of the OIE Terrestrial Code;
- the four individual bans on "finished
goods, which contain pork", "other prepared or canned meat",
"ready to eat products, containing pork" does not follow the
recommendations in Article 15.1.14. (meat products of pigs, either
domestic or wild) of the OIE Terrestrial Code;
- the ban on products used for animal feeding
does not follow Article 15.1.14. (products from fresh meat of pigs intended for
use in animal feeding) of the OIE Terrestrial Code;
- the ban on bristles does not follow Article
15.1.16. of the OIE Terrestrial Code;
- the ban on "products of slaughter of
wild boars" does not follow Article 15.1.13. (fresh meat of wild pigs) and
Article 15.1.14. (meat products of wild pigs) of the OIE Terrestrial Code.
29. The
same products mentioned above are also covered by the EU-wide ban, with the
exception of products subjected to heat treatment or maturation. Several
examples of covered products are offered by Russia as rejected consignments.
30. The
EU is not required to demonstrate that its control measures are in accordance
with the OIE Terrestrial Code – it is Russia that asserts that its SPS measures
are in conformity with or are based on the OIE Terrestrial Code. Nevertheless,
we have demonstrated that our measures are in accordance with the OIE
Terrestrial Code, and specifically with the use of regionalisation.
31. The
EU neither established containment zones nor compartments within the meaning of
Chapter 4.3 of the OIE Terrestrial Code.
32. The
EU has established areas considered to be infected with ASFV and ASF-free
areas. The establishment of containment zones within the meaning of Article
4.3.3.3. of the OIE Terrestrial Code is not the only possible tool in applying
regionalization, but only a possible option (may).
33. The
EU neither identified compartments, nor requested Russia for recognition of
compartments with high levels of biosecurity, inter alia,
from the affected regions of Estonia, Latvia, Lithuania, or Poland. Instead,
the EU identified zones according to the different levels of risk and requested
Russia to recognize ASF-free zones from Estonia, Latvia, Lithuania, Poland and
the rest of the non-affected areas in the EU.
34. Under
the OIE Terrestrial Code there is no compulsory rule as to which method an
exporting country may choose. The options of ASF-free zone or compartment are
presented in the text of all the relevant standards in the alternative. One
concept does not automatically take precedence over the other. Chapter 15.1 of
the OIE Terrestrial Code recommends trade from ASF-free zones with respect to
the same products it recommends trade from ASF-free compartments. Both options
are equally possible and it is up to each exporting Member to choose its
approach, in accordance with the provisions of Article 6 of the SPS Agreement.
35. It
may happen that the exporting Member establishes ASF free zones and at the same
time ASF free compartments within the zones which are not ASF free. This is a
possible option available to an exporting Member and not an obligation.
36. It
clearly follows from the above that Russia's measures at issue not only do not
"conform to" but actually are contrary to the applicable
international standards. Consequently, Russia's measures cannot be deemed as
necessary to protect animal health and cannot benefit of the rebuttable
presumption of consistency with the relevant provisions of the SPS Agreement,
within the meaning of Article 3.2 of the SPS Agreement.
37. The
reference to relevant provisions in Article 3.2 has to be understood as closely
related to the subject in an appropriate way. Such provisions are those related
to the risk assessment and scientific evidence. The international standards contained
in the OIE Terrestrial Code are based on the most recent scientific and
technical information. However, the OIE standards do not deal with other
aspects, like discrimination. Accordingly, a measure which conforms to the
recommendations in the OIE Terrestrial Code may still be discriminatory.
38. A
WTO Member has always the choice to follow the international standards or to
conduct a risk assessment. However, once a WTO Member decides to rely on the
relevant international standards then the language of the SPS Agreement is
imperative ("shall base").
39. The
"base on" requirement in Article 3.1 is different from "conform
to" in Article 3.2. It means that the measures are
"supported" by the international standards. The EU has demonstrated
in the previous section that the Russian measures at issue are contrary to the
relevant international standards. The Russian measures cannot be said to be
"supported" by the international standards or to incorporate some elements
of the said standards.
40. Similarly,
in India - Agricultural Products the panel
found that the Indian measures and the OIE recommendations contradicted each
other and thus the Indian measures could not be said to be based on
international standards. It clearly follows that the Russian measures at issue
are not "based on" the applicable international standards within the
meaning of Article 3.1 of the SPS Agreement.
41. The
right of Members to establish a higher level of sanitary protection under
Article 3.3 is an autonomous right and not an exception to a "general
obligation" under Article 3.1.
42. While
Article 3.3 of the SPS Agreement is "not a model of clarity in
drafting", the last sentence states that a measure which departs from the
international standards shall not be inconsistent with any other provision of
the SPS Agreement. It follows that the inconsistency of the measures at issue
with several provisions of the SPS Agreement, notably those related to risk
assessment, regionalization and non-discrimination, are relevant for a finding
of inconsistency with Article 3.3.
43. The
Appellate Body noted that "there is a ‘scientific justification' for an
SPS measure, within the meaning of Article 3.3, if there is a rational relationship
between the SPS measure at issue and the available scientific
information". A finding of inconsistency with Article 5.1 will always
imply that the respective measure is inconsistent with Article 3.3.
B. Claims related to risk
assessment
44. As
Russia's measures do not "conform to" and are not "based
on" the OIE recommendations, it is necessary to establish whether there is
a solid scientific basis for their imposition. Under an Article 5.1 analysis,
two issues should be addressed: whether there is a "risk assessment"
within the meaning of the SPS Agreement and whether the SPS measures at issue
are "based on" the mentioned risk assessment.
45. The
definition of the risk assessment is provided in paragraph 4 of Annex A of the
SPS Agreement. As a previous panel notes, there are two types of risk
assessment. Thus, the type of risk assessment to be performed in a given case
depends on the objective pursued by the respective SPS measure.
46. The
first type of risk assessment shall: (1) identify the diseases
whose entry, establishment or spread a Member wants to prevent within its
territory, as well as the potential biological
and economic consequences associated with the entry, establishment
or spread of these diseases; (2) evaluate the likelihood of
entry, establishment or spread of these diseases, as well as the
associated potential biological and economic consequences; and (3) evaluate the
likelihood of entry, establishment or spread of these diseases according to the SPS measures which might be applied.
47. In
turn, the second type of risk assessment involves two elements: (1) the
identification of the adverse effects on animal health (if any) arising from
the disease-causing organism in the food/beverages/feedstuffs at issue and (2)
the identification of the potential of occurrence of the mentioned effects.
48. The
"based on" requirement in Article 5.1 does not mean that the SPS
measures have to "conform to" the risk assessment, but rather that
the risk assessment must "reasonably support the SPS measure at
stake". It refers to a "certain objective relationship
between two elements, that is to say, to an objective situation
that persists and is observable between an SPS measure and a risk
assessment".
49. While
repeatedly asked by the EU and by the Panel during the first substantive
meeting to provide its risk assessment, Russia deferred answering the question
and was not able to provide any supporting documentation.
50. Article
5.2 qualifies the way in which a risk assessment has to be carried out, not the
substantive obligation to base a sanitary measure on a risk assessment. In
adopting, maintaining and/or applying the measures at issue, Russia did not and
does not take into account available scientific evidence; relevant processes
and production methods; relevant inspection, sampling and testing methods; the
prevalence of specific diseases; the existence of disease-free areas; the
relevant ecological and environmental conditions; and quarantine or other treatment,
as required by Article 5.2 of the SPS Agreement. Had Russia properly taken
these matters into account, it would have concluded that the measures at issue
are unnecessary and unjustified.
51. Article
2 of the SPS Agreement, entitled "basic rights and obligations"
reflects a legislative drafting technique often used in the covered agreements:
there is first a general provision setting the general principles and then more
specific provisions that elaborate on the contents of the respective rights and
obligations. The general provision is there in principle to catch possible
situations (if any) which would escape the scrutiny of the more specific
provision.
52. Article
2.2 of the SPS Agreement establishes that SPS measures shall be applied only to
the extent necessary to protect animal life and health, shall be based on
scientific principles and shall not be maintained without sufficient scientific
evidence, except as provided in Article 5.7.
53. The
necessity requirement has not been clarified in the context of this provision.
However, one may find
useful guidance in the interpretation of necessity in the framework of
Article XX(b) of the GATT or of Article 2.2 of the TBT Agreement, as well
as in the provisions of Article 5.6 and footnote 3 of the SPS Agreement.
54. The
second element of Article 2.2 is the general requirement to base measures on
scientific principles and not maintain them without sufficient scientific
evidence. Article 5.1 is a more specific provision related to these principles,
requiring WTO Members to undertake a risk assessment. A violation of the more
specific provision in Article 5.1 constitutes also a violation of the more
general requirements in Article 2.2.
Russia did not provide any risk assessment
for the measures at issue, violated the provisions of Article 5.1 of the SPS
Agreement, and therefore the provisions of Article 2.2. Similarly, a finding of
a violation of Article 5.6 with regard to risk management will consequentially
result in a violation of Article 2.2 of the SPS Agreement.
55. The
case-law refers to Article 5.7 as a "qualified exemption" from the
provisions of Article 5.1 or as an autonomous right. In an emergency situation
the importing Member is not compelled to perform a risk assessment within the
meaning of Article 5.1, but rather to conduct a "less" objective
assessment of risk within the meaning of Article 5.7. What that might amount to
can only be assessed on a case-by-case basis, and, depending on the
circumstances, the less objective assessment of risk might be initially
extremely cursory. However, as the situation evolves, one would expect it to
crystalize further.
56. According
to the panel in EC — Approval and Marketing of Biotech
Products, the provisional adoption of an SPS measure is not a
condition for the applicability of Article 5.7, as the measure at issue has to
satisfy all the criteria set forth in Article 5.7 in order to be provisionally
adopted.
57. The
Appellate Body held that four cumulative requirements are imposed upon a Member
having recourse to this provision. It may provisionally adopt an SPS measure if
this measure is (1) imposed in respect of a situation where ‘relevant
scientific information is insufficient' and (2) adopted ‘on the basis of
available pertinent information'. Such a provisional measure may not be
maintained unless the respective Member: (3) ‘seek[s] to obtain the additional
information necessary for a more objective assessment of risk'; and (4)
‘review[s] the … measure accordingly within a reasonable period of time'.
58. With
regard to the first condition, the application of Article 5.7 is triggered by
the insufficiency of scientific evidence and not by the existence of scientific
uncertainty.
59. The
Appellate Body determined in Japan ‑ Apples
that the relevant scientific evidence is "insufficient" within the
meaning of Article 5.7 if the body of available scientific evidence does not
allow, in quantitative or qualitative terms, the performance of an adequate
assessment of risks as required under Article 5.1 and as defined in Annex A to
the SPS Agreement. The Appellate Body also noted that although further
scientific investigation is possible, this does not equate to the insufficiency
of the relevant scientific evidence.
60. In
SPS cases is not uncommon that there is scientific controversy. However, such
controversy should not lead to the conclusion that the relevant scientific
evidence is "insufficient". The ‘insufficiency' of the scientific
evidence is not a perennial state, but rather a transitory one, which lasts
only until such time as the imposing Member procures the additional scientific
evidence.
61. With
regard to the second condition, according to the Appellate Body the information
is pertinent when there is a rational and objective relationship between the
information and the measure.
62. It
may very well be that with regard to the same ASF outbreaks and cases some WTO
Members recognize the EU regionalization measures and allow trade from the ASF-free
areas, while others impose a ban on the products at issue from the entire EU
Member State affected. Measures adopted by other WTO Members are not relevant
(some of them may very well be WTO inconsistent), but what matters would rather
be the risk assessment and the scientific evidence underlying those measures
(if any). This is a science-based process.
63. In
the present case such rational and objective relationship exists with respect
to information from Members which accepted the EU regionalization measures,
allowed trade to continue, and as a consequence did not suffer any ASF
introduction. Such measures can only confirm the robustness of the EU ASF
regionalization measures. Countries that accept the products at issue from the
non-restricted areas in the four recently ASF affected EU Member States, as
well as from all the other non-affected zones in the EU are Albania, Bahamas, Canada, Georgia, Haiti, FYR Macedonia, Iceland,
Republic of Moldova, New Zealand, Namibia, Norway, Switzerland, Ukraine, United
States and Vietnam.
64. The
category of information or data (defined
in abstract terms) to be considered in a risk assessment is the same under
Article 5.1 and Article 5.7. In both cases, it is contextually informed by the
language of Articles 5.1, 5.2 and 5.3 and the definition of risk assessment in
Annex A(4). It may equally be contextually informed by other provisions of
the SPS Agreement, including Article 5.7. In fact, no provision of the SPS
Agreement explicitly limits the information that might be relevant. Rather, the
risk assessment must be "appropriate to the circumstances".
65. The
difference between an Article 5.1 situation and an Article 5.7 situation does
not relate to the abstract delimitation of the category of data that might be
relevant, but rather relates to the extent to which the category is populated by data.
66. The
other two conditions of Article 5.7 require that the importing Member seeks to
obtain the additional information necessary for a more objective assessment of
risk and review the sanitary measure accordingly within a reasonable period of
time.
67. The
Appellate Body noted that the additional information sought must be relevant
for conducting a more objective risk assessment. However, if the information
sought is irrelevant, the defending Member cannot provisionally shelter its
measures under Article 5.7. Further, it will likely be in breach of Article 8
and Annex C(1) of the SPS Agreement. In the present case the necessary
information for an objective risk assessment was already provided at an early
stage by the EU to Russia and supplemented in several instances.
68. Compliance
with the fourth condition, with regard to a "reasonable period of
time" has to be established on a case-by-case basis. The EU submits that
Russia has failed to review its measure within a reasonable period of time. In
the cases where science remains insufficient to form a definitive view because
the disease is new and not sufficiently studied, the reasonable period of time
could last for many years or decades, depending on the nature of the problem.
However, unlike previous cases such as the Hormones or GMO which involved
relatively "new" issues, there does not seem to be much controversy
between the parties about the science of ASFV.
C. Claims related to regionalization
69. The
regionalization requirements in Article 6 should be understood in the light of
the "significantly less trade restrictive alternative" requirement in
Article 5.6. A regional ban (instead of a country-wide ban) should not be
automatically equated to a low ALOP. Adaptation to the regional conditions is a
relevant factor in the Articles 3.2 and 5.1/5.2 or 5.7 analyses.
70. Article
6.1 of the SPS Agreement is a more general provision which informs the
following paragraphs. The panel in India-Agricultural
Products stated that the assessment of the conformity of a Member's
measure with Article 6 should start with the first sentence of the
Article 6.2, then continue with the second sentence of Article 6.2 and
with Article 6.1.
71. Similarly
to India-Agricultural Products, in this
case Russia did not recognize the concept of disease-free areas with respect to
ASF in the EU. The EU observes that the alleged explicit
"recognition" of regionalization by Russia is contradicted by the
facts of the case. It may be inferred from the unreasonable refusal to accept
the regionalization measures of the exporting Member, including irrelevant
questions asked pursuant to Article 6.3 of the SPS Agreement, that an importing
Member does not, in fact, recognize the concept of disease-free areas. Russia's
actions and inactions with respect to ASF‑related regionalization in the EU do
not match - and in fact contradict - the apparent explicit recognition.
72. The
two provisions in Articles 6.2 and 6.3 are related to each other, in the sense
that if the importing Member does not even recognize the concept of
regionalization with respect to ASF, then any attempts by an exporting Member
to prove that the conditions for safe trade in the products at issue from the
non‑affected areas are fulfilled would be rendered fruitless.
73. In
the same vein, the EU agrees with the panel's finding in India-
Agricultural Products and with Australia's proposition that for a
measure to comply with Article 6.2 it must at least not deny or contradict the
recognition of such areas.
74. Each
of the measures at issue is therefore inconsistent with Russia's obligations
under Articles 6.1 and 6.2 of the SPS Agreement, because Russia has not ensured,
and does not ensure, that the measures at issue are adapted to the sanitary
characteristics of the area from which the products at issue originate and to
which they are destined. In assessing the sanitary characteristics of the
affected area, Russia failed to take into account, inter alia,
the level of prevalence or absence of ASF, the existence of eradication and
highly effective transparent control programs (immediately implemented in
accordance with international standards laid down by the OIE), and appropriate
criteria or guidelines developed by the relevant international organizations.
2. Article 6.3 of the SPS Agreement
75. With
regard to Article 6.3 of the SPS Agreement, an importing Member is under no
obligation to automatically accept a regionalization proposal from the
exporting Member. However, its decision must take into account objective
factors such as those enunciated in Article 6.2, second sentence of the
SPS Agreement. In case of disagreement between the importing and the exporting
Members, the exporting Member can defer the dispute to the WTO adjudicating
bodies.
76. Since
the detection of ASF in wild boar in Lithuania in January 2014 the EU has
provided Russia information beyond what is necessary for objectively
demonstrating that disease-free areas are and are likely to remain disease-free
areas.
77. The
information was supplied via an exchange of email messages and registered
letters between the competent services and access was allowed to Russian and
Customs Union experts for inspection in the EU. Several meetings took place,
both in the EU and in Russia, in order to further discuss any aspects that the
Russian counterpart considered required further clarification. However, most of
the outstanding issues invoked by the Russian authorities were not relevant for
the purposes of ASF regionalization within the EU, were already answered, or
sought to impose upon the EU a probatio diabolica.
Russia abusively used the information requests as a delaying technique and not
for a "more" or "less" objective risk assessment, which has
never been conducted or at least never provided to the EU or to the Panel.
78. The
SPS Committee has developed specific Guidelines on Article 6. These Guidelines
describe a possible succession of steps in the process of the recognition of
zoning, from step A to Step I. Furthermore, the SPS Committee Guidelines make
reference to the fact that Members should proceed with a recognition process
without "undue delay", and that the discussions should be undertaken
within a "reasonable period of time", normally within 90 days of a
request.
79. These
Guidelines provide a useful framework for understanding how the mechanism of
Article 6 may operate. The panel in India- Agricultural
Products has considered these Guidelines "to be informative in
[the] consideration of how to approach Article 6 because they expand on the
Members' own understanding of how the provisions of Article 6 are to be
implemented". The Guidelines served for confirming a conclusion already
reached by the panel.
80. The
EU explained in detail how its regionalization system with regard to ASF works.
The EU permanently adapts the areas considered to be infected to the latest
developments in the ASFV spread, so as to anticipate further developments. It
is significant that since August 2014 there were no cases and outbreaks
outside of the areas considered to be infected. It is also significant that
only three clusters of outbreaks occurred outside of the areas considered to be
infected since the first case in wild boar in Lithuania in January 2014.
81. The
EU operates with the concepts of ASF-free areas and areas considered infected
with ASF, within the meaning of Chapter 15.1 of the OIE Terrestrial Code. The
areas considered infected with ASF are divided into four parts, out of which
Parts I, II and III are relevant for the purposes of the present dispute;
specific prohibitions and measures (including additional biosecurity measures)
apply with regard to trade in the products at issue from those areas. The
national eradication plans address surveillance and control measures with
respect to feral pigs (wild boar) and they may contain a different terminology,
as used by the respective EU Member States. The protection zones and
surveillance zones refer to outbreaks in domestic pigs; they are both included
in Part III of Decision 2014/709 with respect to the four EU Member States at
issue. Separately from all of the above, a "buffer zone" was
established in Lithuania after the several cases/outbreaks in Belarus, as a
preventive measure in 2013.
82. It
follows that the EU has provided in a timely manner all the necessary
information with respect to its ASF regionalization measures in Lithuania,
Poland, Latvia and Estonia, in order to objectively demonstrate to Russia that
the rest of these EU MS and the rest of the EU (except Sardinia) are and are
likely to remain disease free areas. Reasonable access has been given to Russia
for inspection, testing and other relevant procedures. However, Russia failed
to conclude its recognition process without undue delays. Accordingly, Russia
is in breach of its obligations under Article 6 of the SPS Agreement.
D. Claims related to risk
management
83. The
phrase "appropriate level of sanitary or phytosanitary protection",
also referred to as the acceptable level of risk, is defined in Annex A(5) of
the SPS Agreement.
The SPS Agreement and the corresponding case law recognize that each WTO Member
may establish the level of protection it deems appropriate. This includes a
"zero-risk" policy and may cover any ascertainable risk, including
small or "negligible" risks. The right of a Member to define its
appropriate level of protection is not, however, an absolute or unqualified
right. Article 3.3 of the SPS Agreement also makes this clear.
84. The
scope of a panel's review is not to decide the ALOP for a Member. A Member is
in principle entitled to establish its own ALOP, subject only to complying with
certain specific provisions in the SPS Agreement.
85. With
regard to a Member's ALOP the powers of a Panel concern two main aspects.
First, the Panel may deduce a Member's ALOP from the measures at issue, if it
is not clearly stated or if there is discrepancy between what is stated and the
specific facts of the respective case.
86. Second,
the SPS Agreement qualifies a Member's decisions on ALOPs in a number of ways.
In particular, according to Article 5.4 Members should, when establishing their
ALOP, take into account the objective of minimizing negative trade effects. Furthermore,
according to Article 5.5 of the SPS Agreement, each Member shall avoid
arbitrary or unjustifiable distinctions in the levels it considers to be
appropriate in different situations, if such distinctions result in
discrimination or a disguised restriction on international trade. This
provision does not apprehend the fixing of the ALOP per se,
but it does speak to a need for consistency in setting ALOPs.
87. In
the present case Russia has not expressly stated its appropriate level of
protection. According to the Appellate Body, if the level of protection is not
specified in writing, a panel should infer it from the SPS measures applied in
practice.
88. The
present case presents similarities to India - Agricultural
Products. The EU-wide ban and the four individual bans are not
combined with a Russia-wide ban, as products associated with the risk of ASF
from the non-affected zones of Russia are allowed to be traded. In addition,
these bans are not able to achieve restrictions in wildlife movements, an important
factor of ASF transmission being the wild boar populations. Furthermore,
infected wild boars may move into Russia also from its affected neighbours in
the Caucasus region.
89. In
conclusion, all factual evidence on the record indicates that in fact Russia
has a rather low ALOP. This can in no circumstances support an inference of a
zero‑risk policy as Russia's ALOP.
90. Even
if one were to assume that Russia has a very high or conservative ALOP, the EU
submits that the application of the OIE standards, which recommend
regionalization and trade from the ASF-free countries/zones or for any part of
a country notifying ASF if the products underwent specific treatments, is a
less trade-restrictive alternative, cumulatively meeting the conditions of footnote
3 of the SPS Agreement.
91. Indeed,
the adoption of the OIE standards is an alternative reasonably available to
Russia, which does not involve technical difficulties or an unfeasible economic
burden, while achieving Russia's ALOP and being significantly less trade
restrictive. Consequently, the measures at issue are inconsistent with the
provisions of Article 5.6 of the SPS Agreement.
92. The
existence of unknown and uncertain elements does not justify a departure from
the requirements under Article 5.3 (as read together with Articles 5.1 and 5.2
and paragraph 4 of Annex A) for a risk assessment. However, Russia failed to
take into account all relevant economic factors referred to in Article 5.3 of
the SPS Agreement, including the relative cost-effectiveness of alternative
approaches to limiting risks.
93. According
to the panel in EC- Hormones Article 5.4 does not
impose an obligation on the Members but it has to be taken into account when
interpreting other provisions of the SPS Agreement. Furthermore, the Appellate
Body noted in Australia — Salmon
that the SPS Agreement contains an implicit obligation that WTO Members
determine their ALOP.
94. By
applying an EU-wide ban and four individual country-wide bans for the EU MS
concerned, Russia has clearly not taken into account the objective of
minimizing negative trade effects when determining its ALOP and has thus
breached the provisions of Article 5.4 of the SPS Agreement.
E. Discrimination claims
95. Article
2.3 of the SPS Agreement deals with sanitary measures which discriminate
between Members or which are applied in a manner which would constitute a
disguised restriction on international trade, while Article 5.5 of the SPS
Agreement deals more specifically with distinctions in levels of
protection which result in
discrimination or a disguised restriction on international trade.
96. The
Appellate Body has stated that a violation of Article 5.5 of the SPS Agreement
would automatically trigger a violation of Article 2.3 of the SPS Agreement,
while the reverse is not necessarily true. However, the panel in India-Agricultural Products started its analysis with the
order proposed by the complainant, namely with Article 2.3. After finding several
violations of Article 2.3 the panel exercised judicial economy as to the claims
brought in the alternative by the US under Article 5.5 of the SPS Agreement.
The EU will present its arguments similarly.
2.1. Unjustifiable
discrimination: the legal standard
97. The
obligations in the two sentences of Article 2.3 should not be mechanistically
distinguished, as the respective concepts impart meaning to one another.
Russia's measures violate the obligations contained in both sentences of
Article 2.3.
98. According
to a previous panel, there are three cumulative requirements to be met before a
violation of the first sentence of Article 2.3 can be established:(1) the
measure discriminates between the territories of Members other than the Member
imposing the measure, or between the territory of the Member imposing the
measure and that of another Member;(2) the discrimination is arbitrary or
unjustifiable; and(3) identical or similar conditions prevail in the territory
of the Members compared.
99. The
first requirement contains a national treatment component (the discrimination
operating between the territory of the Member imposing the measure and the
territory of another Member) and an MFN component (the discrimination operating
between territories of Members other than the Member imposing the measure).The
second requirement (the discrimination is "arbitrary or
unjustifiable") focuses on the cause of the discrimination, or the
rationale put forward to explain its existence. The third requirement concerns
the presence of similar or identical conditions in the Members taken as
comparators. These identical or similar conditions should be relevant
conditions. In this respect the analysis concerning the justifiability of the
discrimination and the relevance of the conditions prevailing becomes
congruent.
100. The
EU will prove that all three conditions in the first sentence of Article 2.3
are met, with regard to two different instances of discrimination
(corresponding to the national treatment and MFN principles): (1) a total ban
on imports from the entire territory of the EU (and from the entire territory
of the four affected EU MS) vs. a limited ban on Russian domestic products,
applied only to the products from a limited area around the ASF epizootic
hotbed; furthermore, the ban on imports from countries reporting ASF such as
the EU is disproportionate in comparison to the measures with limited
efficiency to ensure proper detection and containment of ASF within Russia; and
(2) the initial acceptance of regionalization measures of other WTO Members,
like Ukraine, while not recognizing the state-of-the art ASF regionalization
measures in the EU.
2.2. The first instance of unjustifiable
discrimination
101. First,
Russia does not accept regionalization, which would allow trade in the products
at issue from the entire EU territory, except the ASF affected areas in the
four mentioned MS and the island of Sardinia. However Russia allows
intra-Russian trade in live pigs and pig products from the non-affected areas
and does not apply a Russia-wide ban on the products associated with the risk
of ASF.
102. Second,
this discrimination between the Russian territory and the EU territory is
arbitrary and unjustifiable because the difference in treatment cannot be
explained by a different epizootic status. In practice the EU regionalization
measures are effective, which cannot be said about the Russian measures.
103. Third,
for the purposes of the Article 2.3 analysis the same or similar conditions prevailed
both in the EU (including in the four EU MS concerned) and in Russia.
Therefore, Russia imposed a disproportionate ban on the EU products at issue
after the ASF notifications to the OIE, while the Russian domestic measures
have limited efficiency in ensuring proper detection and containment of ASF
within Russia, where trade in the products associated with the risk of ASF of
Russian origin is in principle permitted.
2.3. The second instance of
unjustifiable discrimination
104. The
second instance of unjustifiable discrimination concerns the trade in the
products at issue from the EU and trade in the products associated with the
risk of ASF from another WTO Member, in this case Ukraine.
105. Relevant
to the present case are two instances of discrimination, both occurring before
the date of the establishment of the panel. The first instance occurred in
2012, when Russia did not apply any ban to Ukrainian products following an ASF
case in the Zaporozhye region. Russia considered at the time that the Ukrainian
measures were sufficient to prevent any spread of the ASFV.
106. The
second instance of discrimination occurred at the beginning of 2014 with
respect to the Lugansk region. On 15 January 2014 Russia announced a ban on the
trade from the Lugansk region, while accepting pig products from the rest of
Ukraine. This regional ban was notified to the WTO on 21 January 2014.
Strangely enough, in its First Written Submission Russia presents a letter sent
to the Ukrainian authorities on 30 January 2014, that is 15 days after Russia
already adopted the decision with respect to the Lugansk region and three days
after the imposition of the EU-wide ban. In that letter Russia asked inter alia
information on measures and proposals for regionalisation (after the decision
on regionalization was already taken).
107. First,
the difference in treatment of the Ukrainian and EU territory (and the four EU
MS concerned territories) results in discrimination because in the case of
Ukraine a country-wide ban was not imposed as a reaction to the notification of
an ASF outbreak.
108. Second,
the discrimination is arbitrary and unjustifiable because the difference in
treatment cannot be explained by a different epizootic status.
109. Third,
for the purposes of the analysis under Article 2.3 of the SPS Agreement, the
same or similar conditions prevailed both in the EU and in Ukraine, because the
existence of the ASFV on both the Ukrainian and the EU territories was the
relevant feature triggering the import prohibition imposed by Russia on live
pigs and certain pig products from the entire EU, on the one hand, and the
limited territorial import ban on Ukrainian like pig products, on the other
hand.
2.4. Disguised restriction
110. The
phrase "disguised restriction on international trade" has been
interpreted by a panel for the first time, in the context of Article 2.3
of the SPS Agreement, in India‑Agricultural
Products. The panel relied on previous observations of the Appellate
Body within the context of Article 5.5 of the SPS Agreement. In
addition to Article 5.5 of the SPS Agreement further guidance may be sought
from the previous interpretations reached in the framework of the chapeau to Article XX of the GATT 1994, which
contains similar language.
111. In Australia – Salmon, the Appellate Body stated that a
finding that an SPS measure is not based on a risk assessment is a strong
indication that the measure "is not really concerned with the protection
of human, animal or plant life or health but is instead a trade restrictive
measure taken in the guise of an SPS measure, i.e., a 'disguised
restriction on international trade'". The Appellate Body also took
into account the difference in treatment associated with a certain risk between
the internal movement of products within the territory of a Member and the
treatment accorded to the same imported products.
112. First,
Russia's ASF measures amount to a disguised restriction on international trade
for several reasons because Russia's application of drastic measures towards
imports from the EU while being far less stringent with regard to the internal
movement of domestic products or with regard to imports from other countries,
including other WTO Members, amounts to a disguised restriction on
international trade which is clearly disproportionate and discriminatory.
113. Second,
Russia's attempt to justify its measures by the OIE standards is a clear
misreading of the OIE Terrestrial Code and the OIE Terrestrial Manual which
clearly allow for regionalization.
114. Third,
Russia did not provide any risk assessment in support of its measures, which is
required under Article 5.1 of the SPS Agreement for measures that do not
"conform to" and are not "based on" international
standards. Finally, Russia's measures also do not comply with the requirements
of Article 5.7 of the SPS Agreement as demonstrated in the respective section.
115. Furthermore,
Russia's WTO notifications with respect to the four individual EU Member States
bans are misleading and constitute evidence that the four measures at issue are
in fact disguised restrictions on international trade. According to Russia's
notifications some of the measures at issue are related to food safety and the
protection of humans from animal/ plant pest or disease.
116. It
follows from the above that the Russian measures are contradictory, contrary to
international standards, protectionist, discriminatory and not based on
scientific evidence and scientific principles, thus constituting a disguised
restriction on international trade within the meaning of the second sentence of
Article 2.3 of the SPS Agreement.
117. This
obligation embodied in Article 5.5 of the SPS Agreement is the principle of non‑discrimination
in risk management, with respect to the risks to human, animal or plant life or
health. According to the Appellate Body, three cumulative conditions have to be
met in order to establish a violation of Article 5.5: (1) the Member concerned
adopts different appropriate levels of sanitary protection in several "different
situations"; (2) those levels of protection exhibit differences which are
"arbitrary or unjustifiable"; and (3) the measure embodying those
differences results in "discrimination or a disguised restriction on
international trade".
118. As
long as ASF transmission through domestically-produced products and through EU
products are viewed as distinct situations, Russia breaches the provisions
of Article 5.5, by applying
different levels of protection without any justification.
119. It
has been previously decided that the type of situations envisaged by
Article 5.5 are comparable
situations, such as "situations involving the same substance or the same
adverse health effect". In the present case the situations are comparable
in the sense that they involve the same virus and the same health effects.
120. Finally,
the measures embodying the respective differences result in
"discrimination or a disguised restriction on international trade".
121. In
conclusion, the EU submits that the measures at issue are inconsistent with the
provisions of Article 5.5 of the SPS Agreement. In addition, the breach of
Article 5.5 results in a consequential breach of Article 2.3 of the SPS
Agreement.
F. Claims related to control,
inspection and approval procedures
122. Article
8 and Annex C(1) apply to the procedures dealing with control, inspection and
approval "which are aimed at checking and ensuring the fulfilment of SPS
measures". The EU notes that a previous panel found that the failure to
observe the provisions of Annex C implies a consequential breach of Article 8
of the SPS Agreement.
123. Russia
wrongfully considers that the EU's claims under Annex C and Article 8 of the
SPS Agreement fall outside the scope of the mentioned provisions. This
assertion is also supported by the US in its third party submission. According
to Russia, the type of procedures covered by Article 8 refers only to the
approval of a product or the use of additives. They do not cover
"negotiations between Members leading to the adoption of a procedure".
124. The
Russian assertions are wrong for a number of reasons. First, the language used
in Article 6.3 of the SPS Agreement, referring to "inspection and…other
relevant procedures" is very similar to the language used in Annex C and
Article 8, which also refer to "inspection, control and approval
procedures". Against this background, the EU does not see any reason why
there should be a different meaning attached to the type of procedures
envisaged by Article 8 so as to exclude the type of inspections and other
relevant procedures mentioned in Article 6.3. Second, the EU does not view the
acceptance of the regionalization measures as a "negotiation" between
two different Members. It is rather an objective exchange of information and
the decision of the importing Member is to be taken with consideration of the
objective and rational factors of the kind non-exhaustively enunciated in
Article 6.2 second sentence of the SPS Agreement.
125. It
follows from the above that the EU claims pursuant to Annex C and Article 8
fall within the type of situations contemplated by those legal texts.
126. The
agreed minutes of the meeting of 7 March 2014 mention that the EU veterinary
representative "answered all the questions asked by the Russian
party". However, the Russian authorities continued to claim that they need
more information in order to reach a decision on regionalization. Inter alia, such information requests referred to (1) proof
that the historically ASF-free regions all over the EU are actually free,
contrary to the provisions of the OIE Terrestrial Code; (2) detailed
information about foreign hunters, who entered the EU Member States to hunt
wild boar during the period 2013-2014, detailed by region or (3) detailed
information about pig farms and meat processing factories attested to ship
animals and products to the territory of the Customs Union.
127. The
measures at issue are contrary to Article 8 and Annex C(1)(a), (b) and (c) of
the SPS Agreement, because Russia failed and fails to modify the measures at issue
in order to permit the resumption of imports to Russia of the products at issue
from non-affected areas in the EU and/or with respect to appropriately treated
or processed products. Russia has breached consequently Article 8 of the SPS
Agreement.
G. Transparency claims
128. In Japan — Agricultural Products II, Japan appealed the panel's
findings arguing that the "regulations" referred to in Annex B(1) are
limited to legally enforceable instruments. The Appellate Body rejected this
appeal and noted that the list of instruments contained in the footnote to
Annex B(1) is not exhaustive in nature. The Appellate Body has noted that a
violation of the Annex B(1) results in a consequential violation of Article 7
of the SPS Agreement.
129. The
Russian ban with respect to Lithuania is inconsistent with Russia's obligations
under Article 7 and Annex B paragraphs 1, 2, 5 and 6 of the SPS Agreement,
because certain measures at issue were taken by Russia against Lithuania and
only notified to the WTO 16 days after their imposition. Another measure at
issue, namely the import ban relating to the entire EU territory, has, to the
knowledge of the EU, neither been published, nor notified to the WTO.
130. Inter alia, given that the measures at issue were not
substantially the same as the content of the international standards,
guidelines or recommendations and given that they had a significant effect on
trade of the EU and its Member States, Russia failed to publish a notice at an
early stage in such a manner as to enable interested Members to become
acquainted with the proposal. It is noted that, insofar as the EU-wide ban is
concerned, were it to be the case that Russia considered that urgent problems
of health protection arose, Russia failed to immediately notify other Members,
through the WTO Secretariat, the products covered, with a brief indication of
the objective and the rationale of the regulation, including the nature of the
urgent problem.
131. In
light of the above Russia has breached the provisions of Annex B(1), (2),
(5) and (6) of the SPS Agreement and consequently Article 7 of the SPS
Agreement.
132. For
the reasons set out in this submission, the EU requests the Panel to find that
Russia's measures, as set out above, are inconsistent with Russia's obligations
contained in Articles 2.2, 2.3, 3.1, 3.2, 3.3, 5.1, 5.2, 5.3, 5.4, 5.5,
5.6, 5.7, 6.1, 6.2, 6.3, 7, 8, Annex B(1), (2), (5), (6) and Annex C(1)(a),
(b), (c) of the SPS Agreement.
133. The
EU respectfully requests the Panel to recommend that the Dispute Settlement
Body requests Russia to bring the contested measures into conformity with its
obligations under the SPS Agreement.
ANNEX B-2
Second part of the integrated executive summary of
the arguments of the European Union
1. Through
its submissions and statements in the present proceedings, the EU has
demonstrated that the Russian measures at issue lack scientific justification
and are clearly disproportionate. The EU provided solid evidence with respect
of each of its claims.
2. Russia
has not managed to explain why the measures it has taken against the products
at issue from the EU are justified. Russia put forward different allegations
which may be distilled into four main themes: the in-existence of the EU-wide
ban; conformity of its measures with international standards; presentation of
its measures as emergency measures; and insufficiency of information under the
regionalisation provisions. These four main aspects of Russia's defence must
all fail.
A. The measures at issue
3. The EU notes that the Parties do not
dispute that the four individual bans with respect to Lithuania, Poland, Latvia
and Estonia are SPS measures within the meaning of Annex 1(a) of the SPS
Agreement.
4. The
EU also notes that the Parties do not dispute that the measures taken by Russia
with respect to Latvia and Estonia are within the Panel's terms of reference,
even if they correspond to or post-date the date of the panel request. In
practice, the two individual measures extended the ban to processed products
with respect to the two mentioned EU Member States.
5. With regard to the EU-wide ban,
the EU recalls that the Parties in fact agree on the existence of the measure
at issue. What the EU calls the EU-wide ban is referred to by Russia as "provisional
compliance with the terms of the veterinary certificates".
6. As explained in our previous
submissions, Russia attempts to justify the EU-wide ban by arguing that it
cannot return to a situation where veterinary export certificates are discussed
bilaterally with individual EU Member States, and Russia apparently considers
that this should somehow be imputable to the EU. In making this argument,
Russia acknowledges the existence and precise content of the EU-wide ban. It
also acknowledges that the EU-wide ban is attributable to Russia.
7. Russia is simply wrong to suggest
that anything on the record supports its assertion that the EU has, by
implication, relinquished its right to bring this matter before a panel,
pursuant to the terms of the DSU. In EC – Bananas III (Article 21.5 – Ecuador II) the Appellate
Body has made it very clear that Members cannot be considered to have
relinquished their DSU rights other than expressly and unequivocally. There is
no such specific commitment undertaken by the EU not to challenge certain
Russian measures
8. According to Article 6.1 of the
SPS Agreement, WTO Members are under a continuing
obligation of adaptation to regional SPS
characteristics. It is in this context that the reference to the veterinary
certificates in Russia's accession documents should be understood. The fact
that the veterinary certificates remain in use after Russia's accession is a
distinct element from the fact that the terms of such certificates should be
continuously adapted to the SPS characteristics of specific regions in
particular cases.
9. It is also important to recall that Russia chose to obstruct the process of clarifying the export
certificates in light of the current situation by referring to its arrangements
within the framework of the Customs Union with Belarus and Kazakhstan.
10. Finally, Russia's allegation that
the EU-wide ban does not constitute an SPS measure within the meaning of Annex
A(1) must also fail. The EU-wide ban is clearly within the purview of Annex
A(1) of the SPS Agreement, which contains a broad definition of an SPS measure.
B. The products at issue
11. The EU understands that the EU –
wide ban covers live pigs and products of pig origin covered by the
certificates for export from the EU to Russia and that include the phrase
"African swine fever – during the last 3 years in the territory of the EU
Member State excluding Sardinia", with the exception of products having
undergone treatment as explained in the EU's responses to Panel questions 77
and 271, where it describes the products covered by the individual bans and the
EU wide ban.
12. Examples of products covered by the
EU wide ban are available in the list of returned consignments provided by
Russia for the first semester of 2014: pig offal, frozen pork, frozen pig skin.
A few weeks after the introduction of the measures at issue there were no
longer instances of rejected consignments. Evidently, no operator is going to
incur the ruinous costs of consigning shipments to the Russian border in the
knowledge that they will be refused entry.
C. ASF eradication in wild boar
13. The individual experts confirm the
EU's position concerning drastic hunting intended to exterminate the wild boar.
The EU considers that the hunting pressure and hunting practices should remain
constant in order to not increase (and rather decrease) the spread of the ASFV.
14. The individual experts could not
point to significant evidence of wild boar infected with ASF (or diseases
equivalent to ASF) migrating outside their normal home range in the natural
habitats found in and immediately adjacent to the recently affected areas in
the EU. Excluding factors linked to human intervention, the individual experts
do not expect the range of wild boar to change significantly, and with respect
to a significant population, in a relatively short space of time.
15. Further developing this idea,
Professor Mary Louise Penrith considers that wild boar may travel outside their
normal home range primarily due to human intervention, like drastic hunting.
The finding of dead wild boars along the border with Belarus may be the
consequence of heavy hunting pressure on the Belarussian side. The virus
isolated from the dead wild boars in the EU proved identical to the virus circulating
in Belarus.
16. The individual experts disagreed
with Russia's contentions that its domestic measures, like the shooting of wild
boars, are effective. The most recent ASF EFSA Scientific Opinion confirms the
EU's position and recommends targeted hunting, giving priority to adult and sub‑adult
females. It is interesting to note that in its responses to the Panel questions
Russia seems to change its position and acknowledge the value of EFSA's
approach.
D. Certain measures related to domestic pigs
17. Under
EU rules it is not possible that meat from pigs slaughtered by small backyard
farmers on their own premises is placed on the
EU market or exported to third countries. That meat cannot be certified by
veterinary services for any kind of dispatch or consumption other than
direct/immediate home/domestic consumption (Regulation 853/2004).
18. From
an animal health point of view, there is no reason why abattoirs
approved for export may not slaughter animals that are in compliance with EU
rules, including if the animals come from backyard farms located in
non-restricted areas. This is in line with the idea, highlighted by Dr
Brückner, which simply put states that "free means free".
Accordingly, in principle any establishment located in a free area should be
free to trade its live animals or pork products regardless of where these
animals are kept. However, there are a number of caveats to this concept in
practice.
19. The EU legislation on food safety
hygiene rules applicable to pig meat (Regulation 852/2004 on the hygiene of
foodstuffs, Regulation 853/2004 laying down specific hygiene rules for food of
animal origin and Regulation 854/2004 laying down specific rules for the
organisation of official controls on products of animal origin intended for
human consumption) ensures the application of basic common hygiene requirements
throughout the food chain, starting with primary production. Those rules apply
to any food business operator, like an abattoir, independently of whether that
particular operator has been approved for export to Russia or elsewhere.
20. Free movement of goods within the
EU should, in no way, be taken to mean that there is an absence of controls
with regard to the intra-EU trade in the products at issue. With regard to trade in the products at issue across state borders inside
the EU, Directive 64/432 contains a set of harmonized measures related to
animal health problems affecting intra EU trade in swine, while intra EU trade
in porcine semen is regulated under Directive 90/429. Directive 64/432 makes
reference to the rules laid down in the framework legislation (Directive 90/425
concerning veterinary and zootechnical checks applicable in intra-EU trade in
certain live animals and products with a view to the completion of the internal
market), in particular with respect to checks at origin, to the organization
of, and follow-up to, the checks to be carried out by the country of
destination, and to the safeguard measures to be implemented
A. Claims related
to harmonization
21. As
already explained in our previous submissions, the EU is not required to
demonstrate that its control measures are in accordance with the OIE
Terrestrial Code – it is Russia that asserts that its SPS measures ("the measures at issue") are in conformity with or
are based on the OIE Terrestrial Code and attempts to draw the benefits of the
rebuttable presumption in Article 3.2. However, the EU has proved that its ASF
regionalisation measures are in accordance with the OIE Terrestrial Code.
22. Russia's
measures at issue do not conform to and are not based on the relevant OIE
standards. With regard to the measures at issue,
the panel in US‑Animals reiterates that a
measure which actually contradicts the international standards cannot be said
to be based on the respective standards.
23. This
reasoning is relevant in the context of the present case, as Russia's measures
at issue contradict the very standards they claim to be following. While the
relevant international standards recommend trade from ASF-free areas in several
products at issue, or trade in products which have been treated so as to ensure
the destruction of the ASFV, Russia does exactly the contrary and bans trade
from ASF free areas in the EU and bans processed products from the four
partially affected EU Member States.
24. The
relevant international standards in Chapter 15.1. for the products at issue
from the EU (either subject to the individual bans only or to both the EU-wide
ban and the individual bans) are found in Articles 15.1.1.-15.1.4., 15.1.5.,
15.1.8., 15.1.10., 15.1.12.- 15.1.16. of the OIE Terrestrial Code.
25. Russia
attempts to explain its non-conformity with the OIE standards by essentially
referring to the "impact of sequencing provisions" and to the
"dynamic disease developments" which should in its opinion bear on
the interpretation of "conform to" in Article 3.2 of the SPS
Agreement.
26. With
regard to the "sequencing provisions", the EU complies with the OIE
regionalisation recommendations as contained in Articles 4.3.2., 4.3.3.1.,
4.3.3.5. and 4.3.3.6. of the OIE Terrestrial Code.
27. With
regard to the "dynamic disease developments", Russia in essence
contends that the limited geographical spread of ASFV within the four EU Member
States should be associated to a continuous need of re-considering the
submitted information, which should be updated with new information. The EU
recalls that besides providing the information which together constitutes the
EU's biosecurity plan as early as of February 2014 (except the mid to long term
measures provided in the eradication plans), the EU constantly provided to its
main trade partners, including to Russia, communications with the latest ASF
developments, including coloured maps, by means of faxes and e-mail messages.
In addition, almost monthly presentations by the affected EU Member States in
the PAFF Committee were posted on the European Commission's official website,
in a transparency exercise not matched by many countries in the world, and not
matched by Russia.
28. In
light of the above, Russia's allegation of conformity of the measures at issue
with the relevant international standards within the meaning of Article 3.2
should be dismissed, as the OIE Terrestrial Code recommends trade from the
ASF-free areas and not the imposition of bans.
29. Russia's
measures do not "conform to" and are not "based on" the OIE
recommendations. The EU would like to recall that a WTO Member may go beyond
the relevant OIE standards, provided that it conducts a risk assessment within
the meaning of Article 5.1 of the SPS Agreement. As of today, 20 months after
the initial ban, Russia has not produced any risk assessment, attempting to
rely instead on an alleged compliance with the OIE standards. The EU has
demonstrated that this is misconceived.
30. The
EU explained that the Appellate Body in India- Agricultural
Products and the panel in US-Animals
confirm that a violation of Article 5.1 leads to a presumption of inconsistency
with Article 2.2 of the SPS Agreement, where the conditions in Article 5.7 are
not fulfilled.
31. As
explained in the Closing Statement at the second substantive meeting, Russia's
"evidence" does not constitute an objective and scientific basis for
the measures at issue. In particular, Russia misconstrues the notion of disease
prevalence, misrepresents the 2015 EFSA ASF Scientific Opinion, as well as a
response of professor Penrith, and culminates by presenting a picture of wild
boar "jaywalking" on the streets of Riga, Latvia, an ASF free area.
32. It
is clear that the measures at issue do not conform to and are not based on the
OIE standards. It is equally clear that Russia did not conduct, does not have
and did not provide the Panel and the EU with any risk assessment as required
by Article 5.1 of the SPS Agreement.
33. The
one and the only provision in the SPS Agreement which may still shelter a
Member's measures in such circumstances is Article 5.7 of the SPS Agreement.
But Russia does not fulfil any of its requirements:
- the relevant scientific information is
sufficient and it was provided by the EU to Russia, through numerous letters,
emails, faxes, meetings and inspections;
- the Russian measures were not adopted on
the basis of available pertinent information, but rather ignoring
the available pertinent information; for instance, Russia attempted to draw
conclusions from the mere imposition of bans by other WTO Members, instead of
rather closely scrutinizing their underlying scientific
evidence and of rather observing that none of the numerous EU trade
partners allowing trade to continue did suffer any ASF introduction;
- Russia did not seek to obtain the
additional information necessary for a more objective
assessment of risk, but rather asked for information which was not necessary,
like proof of ASF freedom for the EU Member States historically
free according to the provisions of the OIE Terrestrial Code; and
- Russia did not review its measures accordingly
within a reasonable period of time; the more time passes by, the more apparent
Russia's failure to comply with Article 5.7 becomes, and the more egregious its
breach of Article 5.1 and the other relevant provisions of the SPS Agreement.
34. The
EU agrees that the sufficiency of the relevant scientific evidence should be
assessed with respect to the time the SPS measure is adopted. However, the EU
draws the Panel's attention to the fact that afterwards the respective Member
is under an obligation to seek to obtain additional information for a more
objective assessment of risk as per Article 5.7.
35. The
moment when the respective Member is asking for information which is not
necessary for a more objective assessment of risk, including the type of
information characterized by the individual experts in the present proceedings
as an "overkill" or as an attempt to "muddy the water",
that Member can no longer benefit from the provisional shelter of Article 5.7
(see Russian letters of 5 February and 12 March 2014).
36. According
to Article 5.7 of the SPS Agreement, an importing Member is not absolved of any
obligation in an emergency situation. Instead, what Article 5.7 envisages is a "less" objective assessment of risk, as opposed to
a "more objective assessment of risk", which shall trigger the review
of its sanitary measure within a reasonable period of time. This "less"
objective assessment of risk is not attributable to any bias, but is linked to
the objective fact that the relevant scientific evidence is insufficient for
the purposes of making a definitive decision. Thus, in an emergency situation
the importing Member is not compelled to perform a risk assessment within the
meaning of Article 5.1, but rather to conduct a "less"
objective assessment of risk within the meaning of Article 5.7.
37. In
this particular case the issue is not a general lack of scientific knowledge
about the disease or issue under consideration. The EU has provided vast
amounts of information about the actual situation on the ground and its control
measures.
38. The
available pertinent information may fall within the categories described in
Article 5.2: available scientific evidence; relevant processes and production
methods; relevant inspection, sampling and testing methods; existence of disease‑free areas; relevant ecological and
environmental conditions; and quarantine or other treatment. However, due to
the time limitations, the importing Member is under no obligation to take into
account these factors in a similar way as under Article 5.1 of the SPS
Agreement.
39. Similarly
to the connection between Articles 5.1 and 5.7 through the concept of a
"less" objective assessment of risk, we consider that Articles 5.6
and 5.7 are connected in the same way, insofar as they at least inform each
other contextually. Thus, if, as a matter of fact, a panel is faced with a
measure that the importing Member is attempting to shield under Article 5.7,
but that measure is manifestly unnecessary and disproportionate, that would be
pertinent to determining whether or not the measure is in fact based on
pertinent information, or whether it is rather a disguised restriction on
international trade. Thus, it would be capable of supporting the conclusion
that the measure breaches both Article 5.7 and Article 5.6.
40. Accordingly,
the EU considers that even in emergency situations such as those envisaged by
Article 5.7 the measures taken by the importing Member should not be
disproportionate to the risks, in the sense that it should be necessary, taking
into account any available alternatives. A rational relationship should exist
in any case. This analysis may also be supported by the Panel's findings
related to the non-discrimination claims, raised under Articles 2.3 and 5.5.
41. Russia's
difference in treatment of Ukraine and Belarus in comparison to the EU with
respect to similar situations is relevant in the context of Article 5.7. Indeed, the EU does not consider that there
is any basis in the available pertinent information for discriminating between
EU and Ukraine or Belarus with regard to the ASF regionalisation measures.
42. Furthermore,
the EU considers that Russia's Acceptable Level of Protection (ALOP) cannot be
deduced from the measures at issue. However, assuming arguendo
that a rather high ALOP can be deduced from the respective bans, then Russia
maintains different ALOPs in comparable
situations, as it clearly has a rather low ALOP with respect to ASF in Russia
according to the evidence on the record.
43. In
light of the above, it clearly follows that Russia cannot provisionally shelter
its measures under Article 5.7 of the SPS Agreement.
1. Containment
zones are not the only form of ASF regionalisation according to the OIE
Terrestrial Code
44. The
EU has neither established containment zones nor compartments within the
meaning of Chapter 4.3 of the OIE Terrestrial Code.
45. The
EU has delimitated between areas considered to be infected with ASFV and
ASF-free areas. The establishment of containment zones within
the meaning of Article 4.3.3.3. of the OIE Terrestrial Code is not the only
possible tool in applying regionalisation, but only a possible option. If the
establishment of containment zones would be the only possibility under the OIE
Code, in practice that would amount to almost an impossibility of effectively
controlling diseases like bluetongue through the use of regionalisation.
46. Russia
itself accepted straightforward regionalisation in the case of the Classical
Swine Fever (CSF) occurrence in Latvia in December 2013. The EU recalls that
differently from the ASF chapter, which does not contain any express reference
to containment zones, the CSF chapter contains such a reference in Article
15.2.5., entitled "Establishment of a containment zone within a CSF free
country or zone". The EU did not establish containment zones following CSF
cases in wild boar in Latvia during the period November 2013- January 2014.
Instead, the EU used a straightforward concept of regionalisation, which did
not prevent Russia from lifting a previous ban with respect to the entire
territory of Latvia on 16 December 2013.
47. After
receiving the responses of the individual experts and of the OIE to the Panel
questions, Russia has finally conceded that containment zones are not the only
form of regionalisation which can be established in the case of ASF by an
exporting country in conformity with the OIE Terrestrial Code.
48. In
the OIE Terrestrial Code the concept of zoning is broad. It includes protection
and containment zones but is not limited to these two possibilities. It also
includes, for example, infected zones, zones that are free of disease with or
without vaccination, zones that are officially recognized by the OIE for
certain diseases, and seasonally free zones for other diseases. Various
applications of the zoning concept are found in the disease specific chapters
as appropriate to the epidemiology of each disease.
49. One
of the recurring themes in Russia's submissions is the so-called "lack of
adequate mandated standstill, i.e. restrictions on movements of animals and
other commodities by EU legislation". Russia invokes Article 4.3.3.3.(a)
of the OIE Terrestrial Code whereas the EU did not establish containment zones.
50. However,
the EU has taken the appropriate measures. As a general rule, and on top of the main control measures, the EU
instituted a prohibition on the dispatch of live pigs, porcine semen, ova and
embryo, pig meat, pig meat preparations, pig meat products and any other
products containing pig meat as well as consignments of animal by‑products from
porcine animals from certain areas listed in the Annex to the Decision 2014/178
and then Decision 2014/709 (i.e. the prohibition on the dispatch of live pigs
apply to areas listed in Parts II, III and IV of the Annex, other prohibitions
apply to areas listed in Parts III and IV of the Annex).
51. The
derogation from the prohibition on the dispatch of live pigs from the areas
listed in Part II of the Annex, as well as the derogation from the prohibition
on the dispatch of consignments of live pigs for immediate slaughter from the
areas listed in Part III of the Annex, and the dispatch of consignments of pig
meat, pig meat preparations and pig meat products obtained from such pigs are
subject to strict biosecurity measures.
52. With
regard to animal by-products, the EU Member States concerned may authorise the
dispatch of unprocessed carcases of pigs other than feral pigs and of animal by‑products
of porcine origin from areas listed in Part III of the Annex only to a
processing, incineration or co-incineration plant located outside the areas
listed in Part III of the Annex, subject to strict conditions. The same
Decision in its Article 10 also provides for a Prohibition on the dispatch to
other Member States and third countries of consignments of animal by-products
from porcine animals from the areas listed in the Annex.
53. In
addition to the above-mentioned provisions in Decision 2014/709, the national
eradication plans also contain such additional biosecurity requirements. The EU
has provided as examples several such provisions in the national eradication
plans.
54. It
follows from the above that the EU ASF regionalisation measures are robust,
giving us a high degree of confidence in their adequacy.
2. The
OIE Terrestrial Code does not recommend only compartmentalisation in the case
of ASF
55. Russia's
initial construction relied on containment zones as the only form of ASF
regionalisation under the OIE Terrestrial Code. As a consequence of the EU's
"failure" to establish containment zones (and thus the rest of the
territory not being considered ASF free), Russia claimed that the only solution
was to adopt compartmentalisation. The two
arguments are interconnected. But this construction is wrong. If regionalisation
is not limited only to containment zones, then one does not need
compartmentalisation as a consequential option at all, as long as the ASF
regionalisation is correctly conducted by the EU.
56. As
Dr Alejandro Thiermann stated during the meeting with the experts, "a
compartment is really not the approach for a disease like African swine
fever". The same expert explained that he is aware of only one case of
compartmentalisation, for a different disease (avian influenza).
57. Similarly
to India- Agricultural Products, Russia's
misinterpretation of the OIE Terrestrial Code attempts to identify a "condition
of entry" according to which an importing Member has discretionary choice
regarding control measures. The Appellate Body has confirmed that a correct
interpretation of the OIE Terrestrial Code does not mean that the importing
country may impose on the exporting Member compartmentalisation instead of
regionalisation.
3. Russia violates Article 6.1 of the SPS
Agreement by not taking into account the similar status of certain areas in the
EU and in Russia and by not adapting its measures to the ASF situation in the
EU
58. Article
6 of the SPS Agreement addresses the adaptation to regional conditions,
including disease-free areas. Adaptation to the regional conditions is a factor
which should be taken into account for the purposes of conformity with
international standards within the meaning of Article 3.2 of the SPS Agreement,
as long as the relevant international standards recommend regionalisation.
59. Moreover,
should a Member not conform to or base its measures on international standards,
it has the possibility to conduct a risk assessment, as appropriate to the
circumstances, within the meaning of Article 5.1. In conducting such a risk
assessment, one of the relevant factors mentioned in Article 5.2 is the
existence of disease-free areas. Even in emergency situations of the kind
contemplated in Article 5.7, the importing Member should take into account the
same category of data mentioned in Article 5.2, but to a different extent.
60. The
panel report in US-Animals states that "if a
particular area within the territory of an importing Member has a similar SPS
status as the area of origin of a product (e.g. has the same level of
prevalence of a given disease), that Member may be required to tailor its
measure by relaxing the restrictions on imports into that area". The
individual experts have also recognized the importance of this adaptation.
61. Furthermore,
in the circumstances of the present case, the EU has understood that there are
regions in Russia where wild boars do not occur. To the extent to which
domestic pigs also do not occur in those regions, the introduction of the
products at issue would not present ASF-related sanitary risks and importation
to consumers in those regions should be allowed. Because in Russia there are no
domestic borders, one solution may be that the products at issue (especially
raw products) are imported under customs supervision. This may ensure that such
raw products reach the processing plants which may need them, without any risk
that they will be disseminated as raw products in other parts of Russia.
4. Russia does not recognize the concept of
disease-free areas with respect to the ASF regionalisation measures in the EU,
contrary to Article 6.2 of the SPS Agreement
62. In
India- Agricultural Products, the
Appellate Body has described the relationship between all three paragraphs of
Article 6 and especially between Articles 6.1 and 6.2. Accordingly, the
recognition of the concept of disease-free areas under Article 6.2 should not
be understood in abstract terms, but as reflected in the measure at issue.
63. In
its First Written Submission, Russia has devoted considerable space explaining
that its legislation "recognizes the concept of disease-free areas in the
abstract, pursuant to Article 6.2 of the SPS Agreement". Russia contends
that this dispute can be distinguished from India‑Agricultural
Products due to the explicit recognition of regionalisation in its
legislation. It further notes that the memorandum of 2006 and the bilateral
certificates in use before the
occurrence of the ASF cases and outbreaks in the four recently affected EU
Member States also demonstrate that Russia recognizes regionalisation.
64. Comparing
Russia's understanding of "recognition" with the recent guidance from
the Appellate Body, it is clear that Russia is actually in breach of its
obligations under Article 6 of the SPS Agreement. Indeed, what matters for the
present analysis is not the abstract, distinct from and taken
prior to, recognition of the concept of disease‑free areas in the
Russian legislation, but the recognition of this concept through and
upon adoption of the very SPS measure that is required to be adapted
to the SPS characteristics of the relevant areas.
65. In
the same vein, the EU agrees with the panel's finding in India-
Agricultural Products and with Australia's proposition that for a
measure to comply with Article 6.2 it must at least not deny or contradict the
recognition of such areas.
66. However,
Russia extended the same reasoning applicable to its abstract recognition of
disease free areas in its legislation to the recognition of such areas in the
relevant veterinary certificates, explaining how it chose to "provisionally
comply with the terms of these veterinary certificates".
67. Instead
of "provisionally" complying with the terms of the veterinary
certificates, Russia was under an obligation pursuant to Article 6.1 of the SPS
Agreement to adapt its measures to the
sanitary characteristics from which the products at issue originate and to
which they are destined. The measure
called by Russia "provisional compliance with the terms of the veterinary
certificates" is in fact the measure identified by the EU as the EU-wide
ban.
68. Russia
incorrectly asserts that "with respect to the four ASF-infected countries,
the EU Member States notified to the OIE that the ASF outbreak affects the
whole territory". Instead, Russia should know very well as a user of the
OIE WAHIS that upon the first occurrence of a disease in a previously free
country, even if there is only one isolated case, the notification should
pertain to the whole territory of that country, as confirmed by the OIE itself
in a document entitled Notification Procedure.
69. Russia
did not take into account factors of the kind non-exhaustively mentioned in
Articles 6.1 and 6.2 of the SPS Agreement in order to recognize
the concept of disease-free areas with regard to ASF in the EU and to adapt its measures accordingly. In particular, Russia failed
to take into account factors such as geography, ecosystems, epidemiological
surveillance, and the effectiveness of sanitary controls.
70. The
factors mentioned in Article 6.2 of SPS Agreement are reflected in Article 9(2)
of Directive 2002/60.
71. With
regard to geography, Article 4.3.3.1. of the OIE Terrestrial Code states
that "the extent of a zone and its geographical limits should be
established by the Veterinary Authority on the basis of natural, artificial
and/or legal boundaries, and made public through official channels".
72. The
EU recalls that it explained to Russia that the distances between the limits of
the areas where restrictions apply and the locations where infected wild boars
were found are several times wider than the distance such animals could be
expected to travel, according to the EFSA ASF Scientific Opinion 2010, which
was communicated to Russia as an annex to the letter of 7 February 2014. Also,
with the letter of 13 June 2014 the EU further explained that besides the
distance from the disease cases, other factors were taken into account. Several
of the numerous faxes and communications sent to EU's main trading partners,
including Russia, contained relevant maps. Similarly, detailed information on
the implementation of the ASF regionalisation measures was provided by the EU
Member States in the PAFF Committee.
73. In
March 2015 the European Commission provided Russia with copies of the
eradication plans of Lithuania and Poland and in April 2015 the eradication plans
of Estonia and Latvia followed, all referring to delimitation of the infected
areas. Russia has also received a document containing the detailed
administrative regions in Poland as part of the Polish contingency plan
attached to the letter of 21 May 2014.
74. With
regard to ecosystems it
is relevant to ascertain the capacity of a biotope or habitat to sustain a
susceptible population and the degree of concentration/dispersion. This is a
relevant factor to the present case because of the wild boar presence. Also,
human intervention in the ecosystem, in particular by managing practices such
as hunting and feeding wild boars is essential to understanding how the
ecosystem has been considered by the EU when applying regionalisation and
claiming disease free status. The EU Member States regularly described the
applicable measures in the publicly available presentations in the PAFF
Committee.
75. The
intensity and effectiveness of the EU's epidemiological surveillance should have been a key element in
Russia's analysis of the EU ASF regionalisation measures. The combination of
active and passive surveillance, with special emphasis on the areas at risk
located relatively close to the disease cases already identified, provide a
very solid reassurance that the limits of the ASF-free zones and the zones
considered to be affected are properly demarcated.
76. Russia
claims that the EU failed to adequately increase surveillance after the ASF
outbreaks, relying on an early audit report carried out by the European Commission
in Lithuania in April 2014. The EU explained in detail how Lithuania took into
account the FVO audit, including as reflected in the eradication plan.
77. During
the meeting with the experts Dr Alejandro Thiermann explained, in the context
of wild boar hunting, that the EU surveillance system is among the best in the
world. Underreporting is much less likely to happen in the EU than in other
parts of the world.
78. The
effectiveness of the sanitary
controls has been
repeatedly demonstrated at different levels. The disease control measures put
in place after the occurrence of the few outbreaks reported proves that the
contingency plans and the control measures applied in holdings are highly
effective as no further outbreaks have been reported as secondary outbreaks in
Lithuania and Latvia since September 2014 because all outbreaks were properly
extinguished.
79. In
addition, the sanitary controls at the external borders with infected pork
products from Belarus seized, together with awareness campaigns, have minimised
the risk of ASF introduction through that route.
80. The
list of factors enunciated in Article 6.2 is non-exhaustive. A similar relevant
factor may be the epidemiology of the disease, which is related to the
characteristics of the disease agent and of the host species. It is important
to note that there is no evidence of soft ticks (Ornithodoros
sp.) being involved in the epidemiology of the disease in the four
recently affected EU Member States. Furthermore, the existence of a single host
species (pigs) makes the epidemiology simpler than other diseases affecting
pigs and ruminants (like FMD).
81. Russia
maintains that the EU failed to take significant actions to eliminate backyard
production in the four ASF-infected EU Member States. The EU does not believe
that total elimination of backyard production is necessary. Even before ASF
reached the EU, as early as of 2013, the EU has taken measures to reduce
backyard production under low biosecurity conditions in certain risk
areas, in particular Decision 2013/498.
82. In
light of the above, an objective assessment of factors such as geography,
ecosystems, epidemiological surveillance, the effectiveness of sanitary
controls and the ASF epidemiology should have easily led Russia to reaching a
conclusion on the appropriateness of the EU ASF regionalisation measures. By not taking into account these factors,
Russia failed to determine disease free areas on the basis of the mentioned
factors and breached its obligations under Article 6.2 of the SPS Agreement.
83. The
situation in the present case is in fact similar to that in India-Agricultural Products and the EU respectfully requests
the Panel to find that Russia does not recognize the concept of disease free
areas with respect to ASF in the EU. As a consequence, Russia also fails to
adapt its measures to the sanitary characteristics of the areas from which the
products at issue originated and to which the products are destined, within the
meaning of Article 6.1 of the SPS Agreement.
5. The EU adduced all the necessary evidence
as per Article 6.3 of the SPS Agreement
84. The
EU has explained that the relevant date for the purpose of WTO proceedings is
the date of the panel establishment. With the exception of certain situations
falling under the SCM Agreement, this has been the practice of previous panels
and of the Appellate Body. However, this does not mean that subsequent
developments are not relevant. Subsequent developments may be relevant to the
extent that they confirm the facts and evidence as of the date of panel
establishment and should be limited to those instances when due process is
respected and Parties have the opportunity to properly discuss that evidence.
In making "an objective assessment of the matter before it" within
the meaning of Article 11 of the DSU, a panel may not arbitrarily chose a
cut-off date. By choosing an arbitrary date, a panel cannot contribute towards
"securing a positive solution of the dispute" as per Article 3.7 of
the DSU.
85. The
EU submits that at any point in time, including after the date of the panel
establishment, Russia failed to adapt the measures at issue to the sanitary
conditions in the exporting and in the importing countries, as required by
Article 6.1 of the SPS Agreement. More than 20 months after the adoption of the
measures at issue, Russia has not conducted any risk assessment, be it more or
less objective.
86. The
EU has provided the necessary evidence to the Russian authorities in order to
demonstrate that ASF free areas are free and are likely to remain ASF free.
During the meeting with the individual experts, Dr Gideon Brückner explained
that a free zone should always be judged taking into account the current status
of the zone.
87. The
EU's ASF regionalisation measures are designed is such a way so as to guarantee
to our trade partners, including Russia, that at any point
in time products at issue come from an ASF free area, according to
the requirements of Article 6.3 of the SPS Agreement. The adaptation condition
in Article 6.1 is a continuous obligation and importing Members should take
that into account. However, an importing Member cannot unduly delay the
regionalisation recognition proceedings under the pretext of re-confirmation
and update of the information.
88. The
EU timely provided to Russia information that can be rationally and reasonably
expected in the circumstances. However, Russia came back with requests for
information described by the experts as an "overkill"
and a possible attempt to "muddy the
water". It required an unprecedented level of details, which is
clearly unreasonable (e.g. letters of 5 February and 12 March 2014).
89. The
EU explained that there are two tiers of EU ASF measures: the general ASF
legislation (Directive
2002/60) and the specific measures delimitating different
Parts according to different levels of risk (Decisions 2014/178, 2014/709).
Russia claimed that eradication plans were necessary in order to enable it to
reach a conclusion on the EU ASF regionalisation measures.
90. The
EU further clarified that eradication plans are medium to long term strategy
documents and that immediate measures were already put in place as per the
requirements of Article 15 of Directive 2002/60. The national eradication plans
were not necessary to Russia in order to conduct its risk assessment, although
they may be taken into account when available. This means that once the
eradication plans are available an importing country may revise its risk
assessment in light of the adaptation condition in Article 6.1 of the SPS
Agreement.
91. The
EU provides several types of evidence in support of the implementation of the
measures required by Directive 2002/60 in the four partially affected EU Member
States following the first cases of ASF in wild boar and the outcomes
evaluation of their effectiveness:
- prompt communications from the affected EU
Member States to the other EU Member States and major trading partners,
including Russia, often containing relevant maps;
- detailed updates on the ASF situation in
the regulatory Standing Committee on Plants, Animals, Food and Feed (PAFF),
providing the opportunity for peer review by the other EU Member States (almost
on a monthly basis and publicly available);
- transparent audits regularly carried out by
the European Commission's Food and Veterinary Office (FVO);
- the EU Treaties provide for the possibility
for the European Commission to initiate infringement proceedings against the EU
Member States which fail to fulfil their obligations under EU law.
D. Claims
related to risk management
92. Article
2.2 is a more general provision and Articles 5.1, 5.2 and 5.6 are more specific
provisions. This understanding is confirmed with regard to the relationship
between Articles 2.2 and 5.6 by previous panels. It follows that a finding of
violation of Article 5.6 with regard to risk management will consequentially
result in a violation of Article 2.2 of the SPS Agreement, more precisely with
regard to the necessity requirement.
93. Where
a relevant international standard provides for alternative requirements – "ASF
free country, zone or compartment", an importing Member must accept
products that meet one or more of the identified alternatives in order to
"conform to" the international standard, on the basis of objective
criteria of the kind described in Article 6.2 second sentence of the SPS
Agreement. Contrary to what Russia seems to believe, a country may not choose
ASF-free zones or compartments according to its ALOP. The three elements
described in the international standards "ASF free country, zone or compartment"
are related to the objective characteristics of the ASF situation and not to
the subjective choice of the importing Members.
94. The
reasonably available alternatives are compliance with the relevant OIE
standards. Accordingly, instead of an EU-wide ban and four individual EU Member
States bans, Russia should allow trade in the products at issue from the EU.
|
Products
at issue from the EU
|
relevant international
standard
|
|
live pigs, pig genetic material
|
15.1.1.–15.1.4.; 15.1.5.; 15.1.8.,
15.1.10.
|
|
end products containing pork
|
15.1.1.-15.1.4.; 15.1.12; 15.1.14;
15.1.15.
|
|
meat of wild boar
|
15.1.1. –15.1.4., 15.1.13., 15.1.14.
|
|
pork
|
15.1.1.-15.1.4.; 15.1.12.
|
|
raw pork products
|
15.1.1.-15.1.4.; 15.1.12.; 15.1.14.
|
|
bristles
|
15.1.1.-15.1.4.;
15.1.16.
|
|
feed stuffs and feed additives for pigs
|
15.1.1-15.1.4.;
15.1.14.; 15.1.15.
|
|
hunter's trophies without full taxidermy
treatment
|
15.1.1 – 15.1.4.; 15.1.14.
|
95. The
panel in India- Agricultural Products considered
that the OIE Terrestrial Code provides for an optimal level of biosecurity,
under which safe trade may be facilitated in order to prevent AI from being
introduced into an importing country. Similarly, the OIE Terrestrial Code also
provides for a level of sanitary security under which safe trade may be
facilitated in order to prevent infection with ASFV. The Appellate Body then
confirmed that the OIE Code, if applied correctly, provides for less trade
restrictive measures to country-wide bans in its product-specific
recommendations.
96. In
light of the above, it follows that Russia does not comply with the
requirements in Article 5.6 and footnote 3, as the EU demonstrated that
following the OIE standards and recognizing regionalisation would constitute a
significantly less trade restrictive alternative measure.
97. The
EU recalls that in US-Animals the
US competent authorities provided a quicker recognition of regionalisation
measures in Brazil and in Chile, while being still in the process of assessing
an Argentinian request related to the foot-and-mouth disease (FMD) free area of
Patagonia. The panel report in US-Animals
largely supports the EU's discrimination claims in the present case. In US-Animals the panel first found that several aspects of the
sanitary measures in place in Patagonia (Argentina) and in Santa Catarina
(Brazil) are comparable in terms of efficacy and that the relevant conditions
in Patagonia, Santa Catarina and Chile do have "a resemblance or
likeness" and are "of the same nature or kind", being therefore
similar within the meaning of Article 2.3 of the SPS Agreement.
98. First,
the EU has explained how the measures at issue discriminate between the
products at issue from the EU and similar products presenting a rather higher
(or at least equivalent) level of risk originating in Russia. The relevant
conditions prevailing both in the affected EU Member States and in Russia are
the existence of ASF on both the Russian and the EU territories, because that
was the relevant feature that triggered the import prohibitions imposed by
Russia.
99. Second,
with respect to Ukraine, relevant to the present case are two instances of
discrimination, both occurring before the date of the establishment of the
panel. The first instance occurred in 2012, when Russia did not apply any ban
to Ukrainian products following an ASF case in the Zaporozhye region. The
second instance of discrimination occurred at the beginning of 2014 with
respect to the Lugansk region. Strangely enough, in its First Written
Submission Russia presents a letter sent to the Ukrainian authorities on 30
January 2014, requesting inter alia
information on measures and proposals for regionalisation after the decision on
regionalisation was already taken!
100. Third,
with regard to Belarus, while for the purposes of Article 2.3 first sentence
the discrimination should occur between WTO Members, the EU shares the US
assessment according to which the concept of disguised restriction on
international trade in the second sentence of Article 2.3 does not have such a
limitation. In practice, it means that similar factors should be taken into
account by the Panel in its analysis of the Russian treatment of Belarus
products and the conditions of discrimination between WTO Members. In the
context of the similarly worded chapeau of
Article XX of the GATT 1994 the Appellate Body took into account its analysis
regarding "arbitrary and unjustifiable discrimination" in reaching
its conclusions on "disguised restriction on international trade".
101. Accordingly,
Russia breaches the provisions of Article 2.3 of the SPS Agreement.
102. The
EU notes that Russia's explanations with regard to the "infected objects"
not notified to the OIE seem to be contradictory. While Russia quotes its
legislation defining "infected objects" as, inter alia,
factories, means of transport, refrigerators, it alleges that it notified to
the OIE all the outbreaks and cases, including these infected objects. But
outbreaks and cases refer to animals infected by a pathogenic agent, while
factories, means of transports and refrigerators are not animals.
103. A
recent declaration by a Russian industry representative confirms that ASF
spread from some municipal districts of the Voronezh region to other districts
in spite of the fact that the competent Russian authorities took measures with
regard to those ASF outbreaks and in spite of the fact that the cited holding
was considered of the safest degree as per the Russian biosecurity standards.
104. The
situation in Russia is more worrying as the main factor of ASF spread are not
the wild boars but rather domestic pigs, which can be associated with more
human mistakes and loose enforcement measures. Russia is also lacking an ASF
contingency plan.
105. All
the above information has to be seen and assessed in the context of the very
important - and relatively quick- geographical spread, thousands of kilometres
from the initial ASF outbreaks.
106. Russia's
ALOP cannot be derived from the measures at issue, as these measures do not
contain non-protectionist elements. The Panel may establish Russia's ALOP on
the basis of the level of protection reflected in the domestic SPS measures actually applied. In
light of the above, the lack of proper application and enforcement of the
Russian ASF legislation clearly leads to the conclusion that Russia's ALOP actually applied is rather low.
107. In
any event, even if the Panel finds a rather high ALOP reflected in the EU‑wide
ban and in the four individual bans, Russia is in breach of Article 5.5 of the
SPS Agreement, as it makes arbitrary
or unjustifiable distinctions in the levels it considers to be appropriate in
different situations, because such distinctions result in discrimination or a
disguised restriction on international trade. The ALOP is a
function of what Russia seeks to protect on Russian territory. It is not or
should not be a function of different trade partners.
108. Finally,
the EU recalls that, unlike Article 2.3, Article 5.5 of the SPS Agreement does
not contain a reference to "Members". For the purposes of the EU's
Article 5.5 claims the discrimination with regard to Belarus is also relevant.
1. Recognition
of regionalisation falls within the scope of Article 8 and Annex C of the SPS
Agreement
109. Russia
wrongfully considers that the EU's claims under Annex C and Article 8 of the
SPS Agreement fall outside the scope of the mentioned provisions. This
assertion is also supported by the US in its Third Party Submission. However,
the panel in US-Animals clearly states that
recognition of regionalisation falls within the scope of Article 8 and Annex C
of the SPS Agreement.
110. The
EU explained why Russia's assertions are wrong for a number of reasons. First,
the language used in Article 6.3 of the SPS Agreement, referring to "inspection
and…other relevant procedures" is very similar to the language used in
Annex C and Article 8, which also refer to "inspection, control and
approval procedures". The EU does not see any reason why there should be a
different meaning attached to the type of procedures envisaged by Article 8 so
as to exclude the type of inspections and other relevant procedures mentioned
in Article 6.3. The Article 6 Guidelines and Footnote 7 to the SPS are
supportive of this interpretation.
111. Second,
unlike Russia the EU does not view the acceptance of the regionalisation
measures as a "negotiation" between two different Members. This is
rather an objective exchange of information and the decision of the importing
Member is to be taken with consideration of the objective and rational factors
of the kind non-exhaustively enunciated in Article 6.2 second sentence of the
SPS Agreement. Article 6.3 makes it clear that the necessary information shall
be provided in order to objectively demonstrate
to the importing Member that the disease-free areas are disease-free and are
likely to remain disease‑free areas. This understanding is confirmed in Article
5.3.7 of the OIE Terrestrial Code, which describes the sequence of steps to be
taken in establishing a zone and having it recognised for international trade
purposes. Similarly, Article 4.1 of the SPS also makes reference to the
exporting Member objectively demonstrating to the
importing Member that its measures are suitable.
112. It
follows from the above that the EU claims pursuant to Annex C and Article 8
fall within the type of situations contemplated by those legal provisions.
2. Russia
requested information which is not necessary for the purposes of assessing the
EU ASF regionalisation measures, resulting in undue delays
113. Russia
did not manage to rebut the prima facie
case made by the EU with respect to our Annex C and Article 8 claims.
114. The
delays in the operation of the control, approval and inspection procedures
linked to the EU wide ban and the individual EU Member States bans are clearly
attributable to Russia. While the need for additional information does not
amount to undue delay, the repeated request of non‑necessary and irrelevant
information does. It equally does amount to undue delays the lack of
responsiveness for long periods of time, without further feedback on the key
issues invoked in order to delay the procedures.
115. The
EU explained in detail and illustrated with clear examples the type of
information which Russia required from the EU, allegedly for the purpose of
completing its approval procedures with respect to the EU regionalisation
measures. The EU is pleased to note that the individual experts appointed by
the Panel substantially agree with our assessment. Also, the EU promptly
notified all changes in the ASF situation in the recently affected EU Member
States, as explained in detail in our Responses to the Panel questions.
116. The
EU has provided abundant evidence to substantiate its claims under Annex C and
Article 8 of the SPS Agreement. The EU recalls that the agreed minutes of the
meeting of 7 March 2014 mention that the EU veterinary representative "answered
all the questions asked by the Russian party". Russia's information
requirements were not limited to what is necessary for
appropriate control, inspection and approval procedures as required by Annex
C(1)(c) of the SPS Agreement. To the contrary, the EU explained in detail that
Russia's information requirements extended to numerous issues which were not
necessary for the assessment of the EU regionalisation measures.
117. Russia's
control, inspection and approval procedures were not undertaken and completed without undue delays, as required by Annex C(1)(a) of the
SPS Agreement. The panel in US-Animals
analysed if the US authorities' review processes of Argentina's requests were
undertaken and completed without undue delay. It concluded that in those
particular circumstances most of the delays incurred in the review of Argentina's
request for the recognition of Patagonia as FMD free were undue.
118. In
the present case the EU provided solid evidence, confirmed by the individual
experts' responses to the Panel questions, that Russia's failure to assess the
EU's regionalisation request resulted in delays which are undue, because such
delays are "unwarranted, or otherwise excessive, disproportionate or
unjustifiable".
119. It
is particularly important in that regard to note that Russia repeatedly
requested information which is not germane to conducting a risk assessment in
the present case. It came back with requests for non-relevant information
several times, always claiming that it needs more information to perform its
assessment, given the changes in the ASF situation. It is precisely this kind
of delaying behaviour which was condemned by the panel in US‑Animals.
120. The
EU agrees with the panel in US-Animals,
which found that "what matters is whether there is a legitimate reason, or
justification, for a given delay, not the length of the delay as such". In
the circumstances of the present case Russia's delays in control, inspection
and approval procedures with respect to the EU ASF regionalisation measures are
undue, whether we consider the date of the panel establishment or a date 20
months later.
121. In
particular, it bears significance that as early as February and March 2014
Russia required from the EU information which is irrelevant for conducting a
risk assessment in the present case. With the letter of 5 February 2014 Russia
requested information not only with respect to Lithuania (the only partially
affected EU Member State at the time) but also with respect to all the other EU
Member States about foreign hunters, who entered the country to hunt the wild
boar during 2013-2014, as well as an estimation of enterprises attested to ship
animal products to the territory of the CU, by level of zoosanitary condition.
One month later, the letter of 12 March 2014 contains the already notorious in
the present proceedings reference to "absence of any proof of non-existence of ASF in the
territory of other EU member states".
122. Russia
cannot successfully defend itself by arguing that it has had to wait for
information from the EU which was labelled as an "overkill" and as an
attempt to "muddy the water" by the individual experts appointed by
the Panel. Such a period constitutes a delay and such a delay is undue for the
purposes of Article 8 and Annex C(1)(a) of the SPS Agreement.
123. It
is true that, differently from US-Animals, in
the present case there were several changes in the delimitation of the
different areas. However, all these changes are a normal part of the EU system,
which is designed so as to ensure that new cases and outbreaks do not occur in
the ASF free areas. It is significant that since August 2014 no new cases or
outbreaks occurred outside the areas considered to be infected with ASF. In
addition, all changes took place in a limited geographical area and were based
on the same guiding principles. Thus, in the circumstances of the present case,
Russia was able to conduct a risk assessment and to reach a conclusion with
regard to the EU ASF regionalisation measures.
124. In
addition, the EU recalls that Article 5.3.7. of the OIE Terrestrial Code
recognizes the importance of the trading history between two countries. Clearly
the EU and Russia have a long history of trade. Russia should have taken their
knowledge of the EU system in light of the long-standing EU-Russia trading
relationship into account while analysing the EU ASF regionalisation measures.
In the words of Dr Alejandro Thiermann, as emphasized during the meeting with
the individual experts, trust is an
important element between trade partners with an established relationship.
125. The
EU also explained that procedures with respect to the products at issue from
the EU were conducted in a less favourable manner than for the like domestic
products, contrary to Annex C(1)(a) of the SPS Agreement. The EU explained in
detail in the section dedicated to the discrimination claims how Russia
discriminates between the products at issue from the EU and the like domestic
products.
126. Finally,
Russia did not publish or otherwise communicate to the EU the standard
processing period and did not comply with any of the other requirements in
Annex C(1)(b) of the SPS Agreement.
127. As
Russia failed to rebut our prima facie
case, the Panel should find that Russia is in breach of its obligations under
Annex C(1)(a), (b), (c) and Article 8 of the SPS Agreement.
G. Transparency
claims
128. The
EU highlights that even in an emergency scenario an importing Member is not
absolved of any obligation with regard to the transparency of its measures.
Quite to the contrary, Annex B(6) contains a set of detailed requirements which
should be followed.
129. Russia
notified the measure at issue with regard to Lithuania to the WTO Secretariat
only more than 2 weeks after its adoption. Similarly, Russia notified the ban
on the products at issue from Latvia only on 16 July 2014, more than two weeks
after its imposition on 27 June 2014.
130. Russia
is equally unable to rebut EU's arguments regarding the lack of any
notification at all, through the WTO Secretariat, of the EU wide ban, while
acknowledging its existence, under the different name of "provisional
compliance with the terms of the veterinary certificates".
131. In
light of the above, Russia has failed to
rebut the prima facie case made by the EU with
regard to the breach of the provisions of Annex B(1), (2), (5) and (6) of the
SPS Agreement and, consequently, of Article 7 of the SPS Agreement.
132. Russia
failed to rebut the EU's prima facie
case on any of the claims the EU advanced. Furthermore, Russia significantly
changed its position during the proceedings, in light of the responses from the
individual experts and from the OIE, as well as the latest EFSA ASF Scientific
Opinion. Accordingly, the EU requests the Panel to find that Russia's measures,
as set out above, are inconsistent with Russia's obligations contained in
Articles 2.2, 2.3, 3.1, 3.2, 3.3, 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7, 6.1, 6.2,
6.3, 7, 8, Annex B(1), (2), (5), (6) and Annex C(1)(a), (b), (c) of the SPS
Agreement.
133. The
EU respectfully requests the Panel to recommend that the Dispute Settlement
Body requests Russia to bring the contested measures into conformity with its
obligations under the SPS Agreement.
ANNEX B-3
First part of the integrated executive summary of the
arguments of the Russian Federation
1.
ASF is a highly contagious viral
disease,
which is difficult to control and spreads mainly in areas that have high
concentrations of wild boar and backyard farms with low levels of biosecurity.
This lethal combination is present in many Eastern European countries. Certain
geographical features, including forest migration corridors, suggest that ASF
may easily spread within regions of the European Union. While ASF is extremely
lethal (with mortality rates close to 100%), recent scientific studies suggest
that the mortality rate may not be 100%. Recovered animals may therefore remain
infected, thus increasing the risk of further ASF spread.
2.
Recognizing
the severity of ASF, the Russian Federation has implemented rigorous and
comprehensive ASF-control and eradication measures mainly
through the ASF Instructions[4],
which set out strict containment zones and standstill requirements for ASF
outbreaks in the Russian Federation.[5]
Through Customs Union Decision No. 317, the Russian
Federation likewise extends ASF control measures
to imported products, allowing for imports from ASF-infected countries provided
that the exporting country or region has been ASF-free for 36 months – in
accordance with the OIE Terrestrial Code principles of regionalization.[6]
3.
In
response to ASF outbreaks in EU Member States, the Russian
Federation imposed temporary import
restrictions on ASF-infected EU Member States as neither the European Union nor
the infected EU Member States have been unable to demonstrate that its proposed
zones were adequate to control ASF and consistent with the OIE Terrestrial
Code. As a consequence of the ASF outbreaks, EU veterinary officials were no
longer able to certify that the territory of the European Union (excluding Sardinia)
was ASF-free over the prior three years, a condition of export for live pigs
and certain pork products as stipulated in the veterinary certificates[7]
and agreed upon by the European Union and the Russian Federation through the
2004 Memorandum.[8] The consequence was the inability of the
European Union to export live pigs and pork products to the Russian Federation.
4.
The
Russian Federation has similarly imposed import restrictions with respect to
Belarus and Ukraine, which experienced ASF outbreaks in
2013 and 2014.
1. The
Russian Federation's import restrictions with respect to the infected EU Member States conform to the
relevant international standard and are consistent with Article 3.2 of the SPS
Agreement
5.
Article
3.2 of the SPS Agreement provides that SPS measures that conform to the
relevant international standard shall be deemed necessary and are presumed
consistent with the relevant provisions of the SPS Agreement.[9]
The relevant international standard for animal diseases is the OIE Terrestrial
Code.
6.
The most pertinent provisions for ASF are set
out in OIE Terrestrial Code Chapters 4.3, 4.4, 5.3, and 15. As set out in the
chart below, the relationship between these different articles is not linear
but rather sequential.
i. Non-heat-treated
products
7.
As
can be derived from this chart, the provisions regarding non-heat-treated
products set out in Chapter 15.1 of the OIE Terrestrial Code are triggered only
when the exporting country has determined to establish OIE-consistent zones and
has objectively demonstrated this to the importing country. An exporting
country's failure to establish OIE-consistent zones and/or compartments allows the importing country to legitimately
and appropriately apply country-wide import restrictions on non-heat-treated
products.[10]
8.
For
an exporting country to effectively establish a zone under the OIE Terrestrial
Code, it must demonstrate to the importing country that it has implemented the
recommendations in Article 4.3.3 of the OIE Terrestrial Code, which sets forth
"Principles for defining and establishing a zone or compartment, including
protection and containment zones".[11]
Irrespective of whether or not a country labels its zones containment zones
and/or protection zones, or claims to adhere to "straightforward
regionalization", the principles set out in Article 4.3.3 of the OIE
Terrestrial Code cannot be ignored by countries claiming to have established
OIE-consistent zones. Indeed, nothing in OIE Terrestrial Code suggests that
there exist separate principles for "straightforward" zones that
differ from the principles set out for containment and/or protection zones.
9.
The
OIE Terrestrial Code's zoning principles set out in Article 4.3.3 include: (i)
intensified movement control; (ii) identification of the source of ASF
outbreak; (iii) stamping-out policy; (iv) absence of new cases of the disease
within the containment zone for two incubation periods (i.e. 30 days for ASF);
and (v) increased passive and targeted surveillance. Importantly, zones must
take into account the epidemiology of the disease, in particular the presence
and role of susceptible wildlife species.[12]
10.
In
addition, an ASF-infected country wishing to continue to export should,
pursuant to OIE Terrestrial Code Article 5.3.7, provide the importing country
with an explanation of why the area can be treated as an epidemiologically
separate zone for international trade purposes. This principle is also
reflected and reinforced in Article 6.3 of the SPS Agreement and the 2006
Memorandum.[13]
ii. Heat-treated
products
11.
The
relevant OIE Terrestrial Code provisions regarding heat-treated products are
set out in Articles 15.1.14, 15.1.15,15.1.16 and 15.1.17. These provisions permit the trading of pork
products that "have been processed in an establishment approved by the
Veterinary Authority for export purposes so as to ensure the
destruction of the ASF, and that the necessary precautions were
taken after processing to avoid contact of the product with any source of
ASF."[14]
The exporting country carries the burden of demonstrating that "the
necessary precautions were taken after processing to avoid contact of the
product with any source of ASF."
b. The
Russian Federation conforms to the OIE Terrestrial Code
12.
The
Russian Federation is willing and able to accept products from ASF-infected
countries that meet OIE-consistent regionalization, compartmentalization and/or
heat-treated standards. CU Decision 317 establishes that the Russian Federation
is able and willing to accept imported products from ASF-infected countries
that have established OIE-consistent regions. In addition, the record reflects
that that the Russian Federation is able and willing to accept imports from
ASF-infected countries/regions that have established OIE-consistent
compartments. Furthermore, the Russian Federation allows for the import of
products that have been adequately heat-treated.
i. The
Russian Federation's decision not to accept the EU's series of growing zones
for non-heat treated products was objectively justified and conforms to the OIE
Terrestrial Code
13.
In
evaluating whether the Russian Federation's decision not to accept the EU's
zones was reasonable in accordance with the OIE Terrestrial Code, the Panel
must decide, based on the totality of the evidence, in its temporal,
epidemiological and geographic context, whether the Russian Federation's
decision was "objectively justifiable." The Panel may not engage in a
de novo evaluation of the
evidence and must refrain from attributing its own weight or drawing inferences
from particular facts and evidence. The appropriate short-hand description of
this standard of review for the Panel to apply is whether the Russian
Federation's decisions on the EU's various zones were "objectively
justifiable." Based on this standard of review, the Russian Federation's
decision not to accept the EU's zones is objectively justified.
14.
Effectiveness
is a central principle of the OIE Terrestrial Code's zoning provisions.[15] Yet undisputed evidence demonstrates that the
European Union's zones of containment and ASF control measures have not been
effective in containing the further considerable spread of ASF.
15.
First,
the European Union's zones of containment have proven to be inadequate. This
may well be because of the combination in the four ASF-infected EU Member
States of high wild boar density and the high
percentage of small backyard low-biosecurity pig operations where domestic and
wild boars can intermingle.[16]
The OIE Terrestrial Code reflects the need to adapt the zones to the
epidemiology of the disease, taking into account especially the role of
wildlife species and the application of biosecurity measures.[17]
Therefore, any effectively established zone of containment should take into
account not only the role played by wild boar in transmitting ASF and the large
distances over which wild boar can spread ASF,[18]
but also the fact that ASF is more contagious than previously thought. [19] In light of this, any zone of containment in
the four ASF-infected EU Member States must be generously sized, and ASF
control measures must be strongly enforced. However, throughout 2014 and 2015,
the European Union kept expanding its zones of containment in these four
ASF-infected EU Member States, which suggests that the original zones
established by the European Union were not effective in preventing further
outbreaks.[20]
16.
Second,
the continual changes to these zones of containment – caused by high levels of
continuing ASF outbreaks – indicate that the European Union's containment zones
have not been effective in controlling the spread of ASF. Specifically, the OIE
Terrestrial Code provides that a zone cannot be effectively established if
there are more than "limited" outbreaks.[21]
Whether or not an outbreak is limited depends on the number of outbreaks, speed
and spread of disease, and the geographic area it has infected. The hundreds of
outbreaks and cases the European Union has experienced over the course of a
year, covering vast territory in four EU Member States, certainly cannot be
considered "limited".[22]
17.
Third,
the ineffectiveness of the European Union's control measures is demonstrated by
its failure to meet the so-called "30-day" rule set out in the OIE
Terrestrial Code.[23]
According to this rule, the effectiveness of a containment zone is reflected in
the fact that there have been no new cases in the containment zone within a
minimum of two incubation periods from the last detected case (i.e. 30 days).[24]
The European Union has not been able to demonstrate this. Thus, the entire
territory of those four infected EU Member States may be considered
ASF-infected.
18.
Fourth,
the European Union failed to adopt adequate movement restrictions to prevent
the spread of ASF from the zones of containment
to the rest of the country pursuant to relevant provisions in the OIE
Terrestrial Code.[25]
Indeed, EU legislation allows for the movement of certain non-heat-treated
ASF-susceptible products from ASF infected zones without first establishing an
ASF-free compartment as recommended by OIE Terrestrial Code Chapter 15.1.
19.
Fifth,
the European Union failed to provide the Russian Federation with transparent,
timely and complete information justifying its ever-expanding containment zones. Of particular
significance is the European Union's continuing failure to provide the Russian
Federation with information the European Union itself deems essential when
evaluating ASF outbreaks. Pursuant to
the EU's overarching ASF legislation in the context of the "90-day"
plans, each time infection zones are redefined, Member States are under the
obligation to ensure that "the Commission and the other Member States are
informed of these amendments without delay."[26] However, the European Union waited
many months before it finally provided copies of the 90-day plans for Poland
and Lithuania in March 2015. The Russian Federation received copies of Latvia
and Estonia's eradication plans as late as May 2015.
20.
Other
factors the Russian Federation took into account were: the European Union's
failure to adequately increase passive and targeted surveillance, incidents of
pork smuggling and related evidence creating doubts about the capacity of the
veterinary service in the ASF-infected Member States; and the Russian
Federation's own experience in controlling ASF on its territory over the past
seven years.
21.
Based
on these factors, the Russian Federation's decision not to accept imports of
live pigs and pork products from the infected EU Member States was objectively
justifiable.
22.
The
reasonableness of the Russian Federation's decision to reject the EU's zones
was supported by the decisions of many other WTO Members (e.g. Japan,
Singapore, South Korea, Taiwan) that similarly had in place country-wide import
restrictions by the end of 2014.
c. The Russian Federation's decision not to accept the
EU's non-identified compartments conforms to the OIE Terrestrial Code
23.
The
European Union neither identified compartments nor requested the Russian
Federation to recognize compartments with a high level of biosecurity. Thus,
the Russian Federation was under no obligation under the OIE Terrestrial Code
to allow for imports from compartments.
d. The Russian Federation's decision not to accept the
EU's heat-treated products also conforms to the OIE Terrestrial Code
24.
The
European Union has not met its burden of demonstrating that "the necessary
precautions were taken after processing to avoid contact of the product with
any source of ASF." EFSA scientist
acknowledged that whether or not a product is properly heat-treated is crucial
in determining risk of ASF spread since considerable risk of infection remains
if heat-treatment is not conducted properly.[27]
25.
During
the period from January 2014 through the present, the European Union has never
provided information or otherwise demonstrated to the Russian Federation that
its heat-treated pork products have been processed in a manner which avoided
contact of the product with any source of ASF.
Indeed, the European Union made no such demonstration even after the
Russian Federation imposed import restrictions on heat-treated products from
Poland and Lithuania on 7 April 2014, and later after the Russian Federation
imposed import restrictions on most heat-treated products from Latvia and
Estonia.
26.
Thus,
the Russian Federation's import restrictions on heat-treated products from ASF
infected EU Member States are also consistent with the relevant provisions of
the international standard.
2. The Russian Federation's
measures are presumed consistent with all Relevant SPS Provisions Under Article
3.2 of the SPS Agreement
27.
The
Russian Federation's import restrictions with respect to the four infected EU
Member States conform to the OIE Terrestrial Code. Thus, the Russian Federation
benefits from a presumption of consistency of its measures with the relevant
provisions of the SPS Agreement pursuant to Article 3.2 of the SPS Agreement.[28]
The relevant provisions in this case are: Articles 2.2, 5.1, 5.2, 5.3, 5.4,
5.6, 6.1, 6.2, and 6.3 of the SPS Agreement. The European Union has not put
forward any evidence to rebut this presumption of consistency.
3. The Russian Federation's
import restrictions are consistent with Articles 6.1, 6.2, and 6.3 of the SPS
Agreement
28.
Article
6.2 requires the recognition by a WTO Member of the concepts of pest- or
disease-free areas and areas of low disease prevalence.[29]
The Russian Federation not only recognizes the concept of disease-free areas in
the abstract;[30]
its legislation Customs Union Decision 317 explicitly recognizes
regionalization in the context of ASF, and the 2006 Memorandum refers to it as
applied to contagious diseases and to products from the European Union.[31]
In determining recognition of such ASF-free areas, the Russian
Federation considers factors such as geography, epizootic factors and SPS
control measures.
29.
The
European Union has acknowledged that the Russian Federation
recognizes the concept of regionalization, stating that it "understand[s]
that the Russian Federation is applying the principles of regionalization for
African and Classical Swine fever in other affected countries."[32]
b. The Russian Federation has adapted its import restrictions to regional
conditions consistent with Article 6.1 of the SPS Agreement
30.
The
Russian Federation not only recognizes the concept of regionalization, it also
has adapted import restrictions to the regional conditions in these countries
by taking into consideration the factors listed in Article 6.1 of the SPS
Agreement to objectively and reasonably refuse the EU's zones. A key factor
that the Russian Federation took into account were the zoning provisions of the
OIE Terrestrial Code, in particular Article 4.3.3, and the European Union's
failure to act consistently with these provisions. In addition, the procedure
the Russian Federation used in evaluating the EU's zones closely follows the
Guidelines to Article 6 of the SPS Agreement, which were established by
"taking into account the work of the OIE and the IPPC in developing
international standards, guidelines and recommendations to further the
practical implementation of Article 6."[33]
c. The European Union has failed to act in accordance
with the steps prescribed in Article 6.3 of the SPS Agreement
31.
The
European Union has failed to objectively demonstrate that the alleged ASF-free
areas in the four infected EU Member States "are, and are likely to
remain, pest- or disease-free areas" pursuant to Article 6.3 of the SPS
Agreement. The ASF-free areas in the European Union's infected Member States is
shrinking rapidly, creating uncertainty as to whether the currently alleged
ASF-free areas will indeed, "remain" ASF-free.
32.
In
addition, the European Union has provided insufficient evidence for the Russian
Federation to conclude that its ASF-free areas are and will remain
disease-free. Information provided was mainly limited to information about
legislation and did not include, for example, timely information about the
implementation of OIE-recommended ASF eradication measures with respect to new
and expanded zones, and any information regarding the situation "on the
ground" as to how the measures have been implemented, enforced, adjusted
to local conditions, and have been successful and not successful, among other
relevant factors.
4. The Russian
Federation's import restrictions are consistent with Article 5.5 of the SPS
Agreement
33.
The
European Union claims that the Russian Federation discriminates because it
recognizes ASF-free regions within Russia and allows for intra-Russian trade
from regions suffering from ASF infections while imposing country-wide import
restrictions on products from the four EU infected Member States. This raises
the question whether importing countries experiencing disease infections must
ban all trade within their own territory to legitimately impose country-wide
restrictions with respect to that same disease within the territory of other
WTO Members under SPS Articles 2.3 and 5.5. The answer to this question is
no.
34.
An
importing Member may maintain and
implement the same ALOP through somewhat different measures which may have a
somewhat different impact on trade. Indeed, the OIE
Terrestrial Code does not envisage a total domestic standstill as a
precondition to impose import-restrictions on affected products. The 2013 OIE
Users Guide provided that "[t]he recommendations in the Terrestrial Code
make reference only to the animal health situation in the exporting country,
and assume that either the disease is not present in the importing country or
is the subject of a control or eradication programme." In other words,
under the OIE Terrestrial Code, an infected importing country may legitimately
impose country-wide import restrictions as long as it has in place a reasonable
domestic control mechanism.
35.
The
Russian Federation has in place a rigorous and comprehensive ASF-control
programme domestically that reflects a high ALOP. Russia's overarching ASF
control legislation, the ASF Instructions, sets out strict movement
prohibitions on meat trade within and outside the containment zones as well as
a prohibition on the transportation of animals.[34] In addition, the Russian Federation has
adopted measures to reduce the spread of ASF in wild boar[35],
and backyard farms, and nation-wide programs to reduce the number of
free ranging domestic pigs[36]
and increase biosecurity measures in
large pig farms.[37]
Importantly, the Russian Federation, the Russian Veterinary Service and the
Russian pork industry have taken rigorous actions to implement these mandates,
as illustrated by the examples of regional plans and actions in Belgorod,
Voronezh, and Krasnodar and through testimony from Mr. Maslov, Founder and
Chairman of the AGREOECO Group which runs five pig-breeding complexes in
Voronezh.
36.
The
Russian Federation applies equivalent flexibility to imported products from
trading partners. Custom Union
Decision 317 accepts imports of live pigs from importing countries that
have experienced ASF during the last 36 months but which have then effectively
established OIE consistent zones.
37.
The
Russian Federation's temporary import restrictions, based on the
ineffectiveness of the EU's measures, are akin to the Russian Federation's
domestic ASF-infected zones involving strict standstill of live pigs and pork
products. Therefore, regardless of any differences in the structure or
application of the restrictions, the restrictions applied still reflect the
same high ALOP.
38.
Assuming
arguendo that the Russian Federation has
applied different ALOPs between the four ASF-infected EU Member States and the
Russian Federation, these distinctions would be justified, in part,
by the arguably higher level of risk of the transmission of ASF from imports of
products from the alleged ASF-free regions in the four infected EU Member
States caused by the European Union's lenient legislation on free movement in
relevant products within the European Union.[38]
b. Any alleged distinctions in ALOP do not result in
discrimination or a disguised restriction on trade
39.
There
is not a single test uniformly applicable in all cases to determine the
existence of a disguised restriction on international trade.[39]
Rather, three warning signals, taken together with other factors, can be
relevant:[40]
(i) the arbitrary and unjustifiable character of the differences in levels of
protection; (ii) the difference in levels of protection applied; and (iii) the
inconsistency of the measure at issue with Articles 5.1 and 2.2 of the SPS
Agreement.[41]
None of these, or other, warning signs are present in this case.
40.
Regarding (i) and (ii), the
Russian Federation applies the same ALOP to imported relevant products from
ASF-infected EU Member States as to relevant products within the Russian
Federation's ASF-infected zones. Any difference in the measures applied
reflects the unwillingness of the European
Union to establish reasonably sized ASF-free regions where ASF would not likely
spread.[42]
Additionally, as the Russian Federation's measures with respect to the four
ASF-infected EU Member States conform to and/or are based on the OIE standards,
they cannot simultaneously
constitute a disguised restriction on trade.
41.
Regarding (iii), the Russian
Federation's import restrictions are presumed to be consistent with the
relevant provisions of the SPS Agreement pursuant to Article 3.2, which include
Articles 5.1 and 2.2 of the SPS and thus obviates the need for a full blown
risk assessment.
5. The
Russian Federation's import restrictions are not inconsistent with article 2.3
of the SPS Agreement
a. Discrimination claim 1: import
restrictions on products from the ASF-infected EU Member States compared to the
Russian Federation's internal movement restrictions
42.
The
Russian Federation's measures comply with Article 2.3 of the SPS Agreement,
first sentence, because (i) the Russian Federation's measures for domestic and
imported products are based on the same ALOP; (ii) any difference in treatment
is not arbitrary because the European Union failed to objectively establish
ASF-free regions in contrast to the Russian Federation; and (iii) the
conditions in the four ASF-infected EU Member States and the Russian Federation
are dissimilar since they represent different risks of ASF spread. Finally, the
Russian Federation's import restrictions do not violate Article 2.3 of the SPS
Agreement, second sentence, as they do not constitute a disguised restriction
on trade.
b. Discrimination
claim 2: import restrictions on products from the ASF-infected EU
Member States compared to the Russian Federation's treatment of products from
Belarus and Ukraine
43.
Article
2.3 of the SPS Agreement refers exclusively to WTO Members. Since Belarus is a
non-WTO Member, provisions of the Article 2.3. of the SPS Agreement are not
applicable to the EU's discrimination claim regarding Belarus and the European
Union's claim must fail.
44.
Alternatively, any difference in treatment
between Belarus and the European Union is justified and not arbitrary, since it
reflects the fact that Belarus recognized and established compartments with
high levels of biosecurity in accordance with the OIE, whereas the European
Union never proposed such compartments.[43]
45.
The Russian Federation also does not
discriminate with respect to Ukraine. Any imports allowed are the result of
compartmentalization that Ukraine has established, in contrast to the European
Union.
6. The
European Union has failed to demonstrate that the Russian Federation's import
restrictions are inconsistent with Article 5.6 of the SPS Agreement
46.
The
European Union has not demonstrated that the Russian Federation violates
Article 5.6. of the SPS Agreement, as there are no less-restrictive alternative
measures available to achieve the Russian Federation's ALOP, which is based on
the relevant standard. The European Union proposes as a less trade restrictive
measure the application of OIE standards, which recommend regionalization and
trade from ASF-free countries/zones. However, the Russian Federation's import
restrictions already conform to and/or are based on the OIE Terrestrial Code.[44]
B. Arguments related to the
Russian Federation's provisional compliance with the veterinary certificates
1. The Russian Federation's provisional compliance with the veterinary
certificates does not constitute a measures under the SPS Agreement
47.
First,
the European Union has failed to establish that a de facto
consequence—the loss of market access for EU live pigs and pork products that
do not meet the veterinary certificates' requirements—constitutes a measure
covered by the SPS Agreement and is attributable to the Russian Federation.
48.
The current inability
of the European Union to export live pigs and pork products to the Russian
Federation does not result from a measure adopted
by the Russian Federation. Rather, it is
the consequence of the language contained in the veterinary certificates for
trade between the European Union and the Russian Federation. These certificates were negotiated by the
Parties and mutually agreed upon pursuant to the 2004
Memorandum. Specifically, the Russian
Federation and the European Union agreed that imports of pigs and certain pork
products are allowed only if the entire European Union excluding Sardinia has
been ASF-free for 36 months. Thus, when
the European Union experienced its first ASF outbreaks in Lithuania in 2014, it
could no longer certify imports of the relevant live pigs, pig and pork
products to the Russian Federation. This was due to the European Union's
veterinary officials refusal to sign the veterinary certificates after ASF
outbreaks.
49.
Thus,
the Russian Federation's provisional compliance with the terms of the
certificates does not constitute a "measure" but rather reflects the
consequences of following the conditions set out in the veterinary certificates
signed and mutually agreed to by the Parties. This
conclusion is supported by the panel in EC – Approval and
Marketing of Biotech Products, finding that the reference to
"requirements and procedures" in the definition of an SPS measure in
Annex A(1) does not include the "application"
of such "requirements and
procedures".[45] Similar to
the situation in EC – Approval and Marketing of Biotech
Products, we are not dealing with a requirement or procedure itself,
i.e. the veterinary certificate, but rather with the application
of requirements or procedures which are set out in the veterinary requirement.
Thus, the Russian Federation's provisional compliance with the veterinary
certificates does not constitute an SPS measure.
a. The
underlying EU-Russia veterinary certificate is and continues to be valid
50.
If
the Panel were to consider the 2004 veterinary certificates agreed to by the
Russian Federation and the European Union to be SPS measures, then the Panel
should also take note that the validity of these veterinary certificates
constitutes a term of the Russian Federation's WTO membership, pursuant to
paragraph 893 of the Working Party Report on the Accession of the Russian
Federation, providing that "[b]ilateral veterinary export certificates
initialed by one of the CU Parties before 1 July 2010, as well as any
subsequent amendments to such certificates agreed with the authorized body of
such CU Party, would remain valid for exports from the relevant country into
the customs territory of the CU until an export certificate was agreed with a
CU Party based on the agreed positions of the other CU Parties."[46]
51.
The
European Union not only confirmed the certificate's
validity in the Working Party Report of the Russian Federation, but also
specifically requested to extend its term of validity in 2012.102
52.
According
to the jurisprudence, relevant scientific evidence is "sufficient" if
it is adequate to allow the performance of the risk assessment required by
Article 5.1 and as defined in Annex A to the SPS Agreement.[47]
53.
Without
detailed information concerning the ASF situation, including eradication
efforts where ASF has occurred, the epidemiology of ASF, and the geographic and
other relevant characteristics of the EU Member States that can be used to
predict whether the Member State will likely become infected with ASF, the
Russian Federation is not able to accurately assess the probability of entry of
ASF. Much of this information was, and is still, not available to the Russian
Federation,[48]
despite numerous requests addressed to the European Union throughout 2014.[49]
When the European Union did provide information in response to the Russian
Federation's requests, it was either outdated or focused almost entirely on the
ASF-infected Member States; not on the other EU Members that are part of the
European Union.[50]
54.
The
available pertinent information indicates the existence of risk. This
information includes evidence of rapid spread of ASF in the four ASF-infected
EU Member States; scientific studies on wild boar and the long distances they
can travel, in addition to ASF spread through wild boar. All these factors,
coupled with the Russian Federation's own experience, suggest that ASF may
easily spread within regions of the European Union, indicating that complying
with the terms of the veterinary certificate constitutes a logical
precautionary concern.[51]
55.
The
Russian Federation has and continues to request from the European Union
information germane to conducting a risk assessment, including information
about the control regime in exporting EU Member States; the volume of pig and
pork products imports from these countries; the movement of wild boar and
density of the pig population etc.
56.
The
Russian Federation will continue, in conjunction with the European Union
authorities, to discuss the mutually acceptable terms of the veterinary
certificates. The reasonable period of time depends on the specific
circumstances of the case, which in this case includes taking into account the
difficulty of obtaining the additional information necessary for the review,
and the aggravating ASF situation in the European Union.
57.
Because
the Russian Federation's provisional compliance with the terms of the
veterinary certificates is justified under Article 5.7 of the SPS Agreement,
the European Union cannot prevail under its SPS Article 5 claims. [52]
i. Discrimination
Claim 1: The European Union compared to the Russian Federation
58.
Any
alleged discriminatory treatment between products from the European Union and
within the Russian Federation is non-arbitrary and justifiable, as it is merely
the consequence of the European Union's inability to meet the requirements
contained in the mutually agreed veterinary certificates. Moreover, identical
or similar conditions do not prevail in other EU Member States and the Russian
Federation, mainly because the European Union has failed to demonstrate that
other EU Member States are, and will remain, ASF-free – and thus that imports
from these areas to the Russian Federation do not risk spreading the ASF virus
– whereas the Russian Federation has taken stringent and effective measures
domestically.
59.
Moreover,
in contrast to the European Union's claim, the Russian Federation's inability
to agree to the terms of the revised language of the veterinary certificate
proposed by the European Union does not reflect a disguised restriction on
trade. Rather, it reflects the fact that the European Union has not provided
the Russian Federation with reasonable assurances and guarantees that the
reduced requirements for ASF-freedom as provided for in the proposed revised
veterinary certificate will ensure that the exported pork products are indeed
ASF-free. This could include, for example, information as to whether the
proposed language envisages that the product at issue may originate or be
processed in an ASF-infected country.
60.
Moreover,
the Russian Federation has engaged in multiple attempts to negotiate veterinary
bilateral agreements with individual EU Member States. Curiously, the European
Union has discouraged such initiatives. This too indicates that the Russian
Federation's actions do not amount to a disguised restriction on trade.
ii. Discrimination
Claim 2: The European Union compared to Ukraine/Belarus
61.
No
discrimination existed with Ukraine as, similar to the situation with the
European Union, the Russian Federation also agreed and complied with the terms
of a similar veterinary certificate with Ukraine.[53]
Consequently, the Russian Federation stopped importing pigs and pork products
when the Ukrainian veterinary authorities could no longer certify that Ukraine
was ASF-free.
62.
No
discrimination existed with Belarus, as stated in paragraphs 43 and 44 above.
d. The Russian Federation's provisional
compliance with the terms of the veterinary certificates is consistent with
Article 6 of the SPS Agreement
63.
The
Russian Federation's relevant legislation (e.g. the ASF Instructions and
Customs Union Decision No. 317) recognizes the concept of disease-free areas pursuant
to Article 6.2 of the SPS Agreement.
64.
In
making its decision to provisionally comply with the terms of the veterinary
certificates, the Russian Federation analyzed the SPS characteristics of the
European Union and took into account the prevalence of ASF, the existence of
eradication or control programs, and the relevant OIE international standards,
guidelines and recommendations. This task was rendered particularly difficult
by the European Union's failure to provide adequate and timely information to
the Russian Federation.
65.
The
European Union has not provided the Russian Federation with the necessary
evidence to demonstrate that its Member States are and are likely to remain
ASF-free under Article 6.3 of the SPS Agreement. Much of the information provided
by the European Union was either outdated, irrelevant or incomplete.
66.
The
definition of "control, inspection and approval procedures" under
Article 8 and Annex C of the SPS Agreement does not cover the Russian
Federation's alleged "failure to modify measures" as negotiations
between the Members regarding certification are not procedures for putting
products on a market.[54]
Moreover, the Appellate Body has explained that the procedures referred to in
Annex C(1) are those that check and ensure fulfillment of SPS measures, which
suggests that such measures exist prior to the operation or undertaking of the
relevant procedures.[55]
The modification of a measure is thus not covered by Article 8 and Annex C(1)
of the SPS Agreement.
67.
The
Russian Federation immediately notified the European Union (through correspondence
and by telephone) regarding the temporary import restrictions affecting exports
from Lithuania that were implemented on 25 January 2014,[56]
so the immediate notification requirement has been met. The nature of the ASF virus and the
associated risks of the spread of ASF did not allow the Russian Federation to
introduce a notice period before the measure affecting exports from Lithuania
went into effect. The Russian Federation also exchanged comments with the
European Union and Lithuania regarding the various options for resuming trade.[57]
With respect to the Russian
Federation's provisional compliance with the veterinary certificates, the
European Union has failed to establish that the certification mechanism
constitutes an SPS measure to which the requirements of Article 7 and Annex B
of the SPS Agreement apply.
ANNEX B-4
Second
part of the integrated executive summary of the arguments of
the Russian Federation
I. Arguments regarding import
restrictions on the four ASF-infected EU Member States: Lithuania, Poland, Latvia and Estonia
A. The Russian Federation's
import restrictions on live pigs, pork and pig products from the four infected
EU Member States conform to the relevant international standard and are
consistent with Articles 3.2 and 6 of the SPS Agreement
1. In making an objective assessment as to whether a measure "conforms
to" the relevant international standard under Article 3.2 of the SPS
Agreement and "embodies the standard completely", the Panel must take
into account (a) the proscriptive nature of the relevant international
provisions; (b) inherent sequencing of obligations of exporting and importing
countries contained in the relevant international standard; and (c) any
temporal implications from dynamic developments in the disease status.[58]
2. The Panel's review of whether the Russian Federation's decision was
in conformity with the applicable international standards and principles for
zoning under the OIE Terrestrial Code will, necessarily, also constitute an
assessment of whether the Russian Federation met the requirements of Article 6
of the SPS Agreement.[59] Considerable parallels exist between the
provisions of the OIE Terrestrial Code and Article 6 of the SPS Agreement.[60]
1. The
Russian Federation's import restrictions on non-heat-treated products conform
to Article 3.2 of the SPS Agreement
a. The pertinent legal provisions of the OIE
Terrestrial Code for non-heat-treated products
3. The experts have clarified that it is not necessary for an exporting
Member to establish a "containment zone" under Article 4.3.3.3 of the
OIE Terrestrial Code.[61] Thus, the issues in this dispute have now
narrowed and the Panel should focus its analysis on whether there was, and is,
an objective basis for the Russian Federation not to accept the various alleged
ASF-free areas within the four infected EU Member States.
4. Both parties agree that OIE Articles 1.4.6, 1.6.1, Chapters 3.1 and
3.2; Articles 4.3.3.1, 4.3.3.5, 4.3.3.6, Articles 5.1.3, 5.3.7, 15.1.2, 15.1.3,
and 15.1.4 of the OIE Terrestrial Code are among the provisions of the Code
that contain relevant international standards for establishing and assessing
zones in this dispute.[62] The experts have also acknowledged the
potential applicability of these provisions.[63]
5. Article 5.3.7 of the OIE Terrestrial Code sets out "the
sequence of steps to be taken in establishing a zone/compartment and having it
recognised for international trade purposes."[64] The first phase in this sequence is for the
exporting country to (a) establish an OIE-consistent zone /compartment, and (b)
provide detailed documentation to objectively demonstrate a basis for
recognition of the disease-free zone for international trade purposes.[65] Only when these steps have been taken is the
importing country in a position to make an objective assessment of whether the
disease-free zone is likely to remain disease-free. This sequence for regionalization in the OIE
is also supported by the jurisprudence.[66]
6. Thus, in assessing the conformity of the Russian Federation's import
restrictions on non-heat-treated products with the OIE Terrestrial Code, the
Panel should consider whether the European Union has effectively established
ASF-free zones and infected zones, and has provided detailed science-based
documentation including the following OIE Terrestrial Code provisions:[67]
Article 1.6.1: For zones established on the basis of self-declaration: "Member Countries should present
documentation setting out the compliance of the Veterinary Services of the
applicant country or zone with the provisions of Chapters 1.1, 3.1 and 3.2 of
the OIE Terrestrial Code."
Article
4.3.3.1: "The extent of a zone
and its geographical limits should be established by the Veterinary Authority
on the basis of natural, artificial, and/or legal boundaries."
Article
5.3.7.1.a: "The exporting
country identifies a geographical area within its territory, which it considers
to contain an animal subpopulation with a distinct health status with respect
to a specific disease/specific diseases based on surveillance."
Article
4.3.3.5: "For a zone or compartment, the Veterinary Authority should
document in detail the measures taken to ensure the identification of the subpopulation and the
establishment and maintenance of its health status through a biosecurity plan."
Article
5.3.7.1.b: "The exporting country describes in the biosecurity plan for the zone the measures which are being, or
will be, applied to distinguish such an area epidemiologically from other parts
of its territory, in accordance with the recommendations in the Terrestrial
Code."
Article 5.3.3.6: "Relevant animal movements into and out of the zone or compartment should be well documented and controlled. The existence of a valid animal identification system is a prerequisite to assess
the integrity of the zone or compartment."
7. The obligations on the importing country include the following:
to "determine[] whether it
accepts an area as a zone for the importation of animal products" (Article
5.3.7.d);
to "notif[y] the exporting
country of its determination and the underlying reasons, within a reasonable
period of time". (Article 5.3.7).[68]
8. In evaluating whether the Russian Federation's provisional
determination not to accept the zones in the four infected EU Member States was
reasonable in accordance with the OIE Terrestrial Code, the Panel must decide,
based on the totality of the evidence, in its temporal, epidemiological and
geographic context, whether the Russian Federation's decision was "objectively
justifiable."[69] The Panel may not engage in a de novo evaluation of the evidence and
must refrain from attributing its own weight or drawing inferences from
particular facts and evidence. The
appropriate short-hand description of this standard of review for the Panel to
apply is whether the Russian Federation's decisions on the EU's various zones
were "objectively justifiable."[70] Based on this standard of review, the Russian
Federation's decision not to accept the zones within the four infected EU
Member States is objectively justified irrespective of the temporal benchmark
the Panel adopts.
b. The Russian Federation's ongoing provisional
decisions not to accept ever-changing ASF-free zones
i. Assessment at the
time of the Panel establishment
9. If the Panel analyzes the Russian Federation's conformity to the
relevant international standard at the time of the Panel establishment, there
is a strong objective basis to find that (a) the Russian Federation did not
engage in undue delay in waiting until 29 July 2015 to make a provisional
determination – based on the then available evidence on regionalization in
Lithuania, Poland and Latvia—and (b) the provisional determination not to
accept the zones in the four infected EU Member States was justified due to
existing uncertainty about the epidemiology of the disease; increased ASF
outbreaks despite repeated assertions by infected Member States officials that
their control measures were effective; and the EU's failure to provide
information regarding implementation and effectiveness of its ASF control
measures, in the infected and disease-free areas.[71]
10. Importing Members legally need not, and indeed, cannot immediately
accept zones upon the exporting Member's establishment of the zone and the
zoning request.[72] Article 6 of the SPS Agreement and the
applicable OIE provisions necessarily embody a "reasonable period of time"
for the regionalization process.[73] The panel in US—Animals
did not consider a number of months post-Argentina's regionalization request to
constitute undue delay.[74] However,
if the Panel finds that Article 6.3 of the SPS Agreement and parallel OIE
provisions do not embody a reasonable period of time to permit importing
Members to impose import restrictions pending the completion of a reasonable
period of time, the Russian Federation's claims for the four affected Member
States should be assessed under Article 5.7 of the SPS Agreement.[75]
11. Both the importing and exporting country require time to assess and
evaluate the substance of the applicable ASF control measures, as well as the
effectiveness of measures as they are actually implemented.[76] Additional time is needed when outbreaks are
occurring rapidly, in a spreading geographic area, and without a clear causal
basis. The European Union's own 2002/60
Directive mandates time to investigate, develop scientific data, determine the
appropriate eradication methods.[77] Indeed, over the course of 2014-2015, as more
information became available about the epidemiology of ASF in the four infected
EU Member States, the infected EU Member States adopted or changed their ASF
measures, inter alia, to increase wild boar hunting
and/or increase biosecurity regulation and reduce the number of backyard farms[78]—measures the Russian
Federation had always informed local veterinary officials in the affected
Member States were necessary in the effective control of ASF.
12. The European Union did not provide the Russian Federation with
relevant detailed documentation consistent with their obligations under Article
6.3 of the SPS Agreement and the relevant OIE requirements.[79] The record establishes that between February
and June 2014, the European Union provided a number of sheets of paper but most
of the documentation provided was neither relevant nor timely to assess the
actual implementation of ASF control measures.[80] Thus, by 22 July 2014, the date of the Panel
establishment, the Russian Federation received (a) only modest information
regarding ASF measures implemented for Lithuania and Poland, (b) no information
with respect to ASF in Estonia and only minimal information concerning the
situation in Latvia; (c) little relevant scientific information to gauge
whether ASF-free zones would remain ASF-free; and (d) certain relevant
information related to wild boar and small backyard production operations
raised significant doubts in the Russian Federation that the European Union was
not taking appropriate control measures in Lithuania and Poland.[81]
13. Most notably, by late July 2014,[82] no documentation was
provided about Lithuanian and Polish eradication plans, bio-security plans, and
EU audits of the veterinarian officials in these two Member States to gauge
compliance with, Lithuanian and Polish legislation, contingency plans, and
eradication plans. Yet it is undisputed
that in April 2014, the DG SANTE had received draft eradication plans from Poland
and Lithuania and approved them on 7 July 2014.[83] Similarly, by mid-April 2014, DG SANTE had
initial reports from a detailed audit reflecting problems in the implementation
of Lithuanian ASF control measures. And
in mid-June 2014, DG SANTE had similar initial audit reports describing problems
in effective implementation of Polish ASF measures.[84] Yet the European Union never provided the
Lithuanian and Polish audit reports directly to the Russian Federation and the
earliest such reports were available on-line were November 11 and 23, 2014, respectively.[85] Most importantly, the confidential
eradication plans for Lithuania and Poland were not made available to the
Russian Federation until March 2015.[86] The European Union has failed to explain
adequately the delays in providing this crucial information.[87] Moreover, the European Union completely
contradicted itself in arguing late in the proceedings that the eradication
plans were irrelevant to a regionalization case as mid-to-long-term control
measures despite having focused primarily on eradication plans as an important
basis for its ASF control measures in its Second Written Submission.[88]
14. Towards the end of July 2014, a sharp increase in ASF outbreaks in
Lithuania, Poland, and Latvia occurred.[89] The worsening ASF situation, in addition to
the European Union's failure to provide the necessary information regarding
implementation of demonstrably ineffective ASF control measures under Articles
5.3.7 and 4.3.2 of the OIE Terrestrial Code, and Article 6.3 of the SPS
Agreement led the Russian Federation to provisionally determine under the
conditions existing as of 29 July 2014, that the European Union had not
demonstrated that its ASF-free zones in those three countries would remain
ASF-free.[90]
ii. Assessment after date
of Panel Establishment
15. Should the Panel assess the European Union's claims regarding the
measures applicable to the four affected Member States after the
date of the establishment of the Panel, then it must take into account
undisputed evidence that during 20 months of ASF outbreaks, the original
established ASF-infected zones and corresponding ASF-free areas in the four
infected EU Member States went through a series of frequent and significant
legislative changes.[91] Most significantly, the
borders of the ASF-free zones changed a total of 20 times.[92]
16. Between early 2014 and September 2015, a total of 18 ASF outbreaks
occurred in ASF-free zones in Lithuania, Latvia and Estonia.[93] The latest of these outbreaks in alleged
ASF-free zones occurred on 22 May 2015—not August 2014 as repeatedly and
incorrectly asserted by the European Union.[94] The OIE Secretariat and the Panel's appointed
experts have all agreed that even one
ASF outbreak within the alleged ASF-free zone immediately results in the loss
of ASF-free status.[95] Yet the European Union veterinary authorities
chose against recovering the ASF-free status for the original ASF-free zones
consistent with Article 15.1.4 of the OIE Terrestrial Code. Instead, they established new ASF-free zones
that carved out the "infected" geographic regions from the old
ASF-free zone—presumably based on Article 15.1.2 of the OIE Terrestrial Code.[96] This means that each time the European Union "redefines"
the contours of their ASF-free areas through adopting new Commission
Implementing Decisions, it establishes a new ASF-free
area. In other words, instead of trying
to recover the ASF-free status of its original ASF-free zones, the European
Union has chosen to bypass these complexities and simply proclaim new ASF-free
areas.
17. From a legal and practical perspective under Article 6.3 of the SPS
Agreement and Article 5.3.7 of the OIE Terrestrial Code, each time such a new
ASF-free zone is established, the exporting country must provide the importing
country with updated information pertinent to the evolving ASF situation.[97] In this regard, zone changes occurring with
regularity in the four infected EU Member States can be divided into three
different categories according to their severity, nature and location of the
outbreak(s) precipitating the zone changes: ASF outbreaks in the ASF-free
zones; ASF outbreaks in the Part I zones; domestic pig outbreaks in part II
zones. The extraordinary number of zone
changes in the infected EU Member States are coupled with an ongoing
evidentiary burden on the European Union to provide "detailed
documentation" to justify these zones. Yet, the audit reports (which were
never provided to the Russian Federation) and eradication reports (provided in
March and May 2015) revealed problems with implementation of ASF measures in
Poland and Lithuania, and the lack of a focus on reducing significantly
wild-boar populations and numbers of back-yard low-biosecurity farming
operations.[98] And no updated eradication plans have ever
been produced to the Panel or the Russian Federation, despite the European
Union's own Council Directive 2002/60 requiring updated reports every six
months.[99]
iii. Arguments relevant for
all temporal dimensions
18. Irrespective of the temporal benchmark the Panel chooses, the four
infected EU Member States have failed to establish OIE-consistent zones. For instance, the four individual EU Member States have failed to
present information with respect to the
19. implementation of a traceability system of animals in the infected
areas, as is considered a prerequisite to assess the integrity of a zone under
Article 4.3.3.6 of the OIE Terrestrial Code.[100] Nor have individual infected EU Member States
identified any country-specific "biosecurity plan" under Article
4.3.3.5 of the OIE Terrestrial Code—let alone an updated plan reflecting the
dynamic developments—and earlier failures to control ASF based on any initial
plans.[101]
20. Moreover, individual ASF infected EU Member States and the European
Union were unable to demonstrate the credibility and capability of the
veterinary services of the four ASF-infected EU Member States to effectively
control ASF consistent with Chapters 3.1 and 3.2 of the OIE Terrestrial Code,
as required under Article 1.6.1 of the OIE Terrestrial Code.[102] These doubts about the veterinary services'
failure to adopt measures appropriate to the epidemiology of the disease
increase each time a new ASF-free zone was established and then discarded as
ASF outbreaks surged. And these doubts
were reasonably based on the high number of wild boar present in the infected
EU Member States in addition to the large number of backyard farms,
particularly in Lithuania, Poland and Latvia.
Moreover, the Russian Federation's skepticism was triggered by multiple
outbreaks that took place outside the ASF-infected areas.[103] For all these reasons, the individual EU
Member States did not adhere to the relevant provisions in the OIE Terrestrial
Code.
21. The Russian Federation frequently communicated its inability to
accept the proposed ASF-free zones.[104] It also communicated and updated its
continuing provisional assessment with European Union SPS officials, and
communicated the underlying reasons to keep in place the import restrictions
with respect to the four infected EU Member States. Because of the extremely fluid and dynamic
disease situation, the ongoing provisional assessments of the Russian
Federation was consistent with the recommended procedures in the OIE
Terrestrial Code Article 5.3.7.[105] Similarly, the Russian Federation conformed
to the relevant provisions in the OIE Terrestrial Code in its assessment of the
zones within the four infected EU Member States by examining the quality and
credibility of the veterinary service (as set out in Article 1.1, Chapters 3.1
and 3.2 of the OIE Terrestrial Code, and Article 5.3.7); its own animal health
situation with respect to the disease concerned (Article 5.3.7); other relevant
OIE provisions such as whether the zones were
established by taking into account the epidemiology of the disease (Articles
4.3.3.5, 4.3.3, 4.3.2); whether adequate movement restrictions were put in
place (Article 4.3.3; relevant provisions of Chapter 15.1); the prevalence of
the disease (Article 4.3.3); the occurrence of outbreaks outside the
ASF-infected areas (Articles 15.1.2, 15.1.3, 15.1.4); and whether the European
Union had provided the Russian Federation with sufficient information about
each of its zones, including eradication and biosecurity reports (Articles
4.3.3.5 and 5.3.1, 5.37 of the OIE Terrestrial Code).[106] Based on all these factors, the Russian
Federation engaged in a "general assessment of the risk" (Article
5.3.7) that the EU's ASF-free zones are and will remain ASF-free.[107]
2. The
Russian Federation's import restrictions on heat-treated products conform to
Article 3.2 of the SPS Agreement
22. The relevant OIE Terrestrial Code provisions that constitute the
international standard for heat-treated pork products are set out in Articles
15.1.14-15.1.17 of the OIE Terrestrial Code.
These provisions permit the trading of pork products that "have
been processed in an establishment approved by the Veterinary Authority for
export purposes so as to ensure the destruction of the ASF,
and that the necessary precautions were taken after processing to avoid contact
of the product with any source of ASF."[108] There is no temperature requirement set out
in Chapter 15.1 of the OIE Terrestrial Code.[109] Thus, an importing country's obligations
under Chapter 15.1 are triggered only when each infected EU Member State has
demonstrated (a) that the products have been processed to ensure destruction of
the virus; and (b) that "the necessary precautions were taken after
processing to avoid contact of the product with any source of ASF."
23. The European Union has not submitted any evidence demonstrating
compliance of the four individual EU Member States with Articles
15.1.14-15.1.17 of the OIE Terrestrial Code.[110] Such compliance cannot be presumed by an
exporting Member. With the European Union failing to establish an evidentiary
basis for its alleged compliance, the Russian Federation was not required under
Chapter 15.1 of the OIE Terrestrial Code to accept heat-treated products from
the four ASF-infected Member States.
Indeed, the Russian Federation properly complied with Article 3.2 of the
SPS Agreement and the international standard for heat treated products with
respect to measures involving the four infected EU Member States.
B. The Russian Federation's
import restrictions are consistent with Article 5.5 of the SPS Agreement
24. The Russian Federation has in place robust ASF control measures in
line with the OIE Terrestrial Code provisions.
Moreover, ASF import legislation set out in Customs Union Decision 317
incorporates regionalization "carried out in accordance with the
recommendations of the World Organization for Animal Health [OIE]". To the extent the OIE Terrestrial Code
recommends importing countries to accept disease-free areas and areas of low
disease prevalence, the Russian Federation acts accordingly.
25. The European Union has continued to assert—but never demonstrated
with any credible evidence—that the Russian Federation has adopted a low ALOP
as reflected by the alleged ineffectiveness of the Russian Federation's
domestic measures.[111] This claim is incorrect.
26. First, it is contradicted by the unrebutted testimony and
declarations of Russian Federation SPS experts Georgy Djailidi, Tatyana Ausheva, Konstantin Gruzdev, and Chairman of the
board of AGROECO Group, Vladimir Maslov, demonstrating the
stringency and effectiveness of Russian ASF control measures.[112] In particular, the Russian SPS officials have
engaged in appropriate intensified wild boar control measures, and rapid
reduction of pigs kept in backyard farms through compensation programs. As a result of these and other ASF control
measures, a significant part of the Russian Federation is ASF free, has low ASF
prevalence or has not had an ASF-outbreak for the last three years.[113]
27. Second, the European Union fails to address or rebut evidence the
Russian Federation has presented in support of its high ALOP, despite the fact
that the Appellate Body noted in India—Agricultural
Products that the Panel is expected to "accord weight" to
that Member's expression of ALOP, especially when it has been expressed with
sufficient precision, consistently, and in advance of the panel proceeding as
the Russian Federation has done.[114]
28. Third, a domestic ban is neither envisioned nor mandated by the OIE
Terrestrial Code as a precondition to legitimately impose country-wide restrictions
on imports upon failure of the exporting country to demonstrate the
establishment of OIE-consistent infection and disease-free zones.[115] The European Union has never rebutted the
extensive evidence that it is common practice for the European Union to ban
completely all imports from trading partners affected with a disease while
adopting regionalization measures for the same disease at home.[116] The unrebutted examples highlight the fact
that for purposes of Articles 2.3 and 5.5 of the SPS Agreement, a country-wide
domestic standstill is not required as a precondition to legitimately restrict
country-wide imports under the OIE Terrestrial Code.
29. Finally, the experts have agreed in their written remarks that the
OIE Terrestrial Code's zoning provisions are formally applicable only to exporting country zones, and not to the infection or
protection zones established domestically by importing countries also suffering
the same disease.[117]
C. The Russian
Federation's import restrictions on the infected EU Member States are not
discriminatory under Article 2.3 of the SPS Agreement
30. Article 2.3 of the SPS Agreement refers exclusively to WTO Members.
To prevail on a discrimination claim as complainants, the Panel needs to find
that all elements of Article 2.3 of the SPS Agreement have been violated. This includes the requirement that there
exists discrimination between Members.
The European Union cannot establish this with respect to Belarus, a
non-WTO Member, and as such its discrimination claim fails.[118]
31. The European Union admits in its Second Written Submission that
presently, "there may . . . not be any discrimination"[119] with respect to Ukraine. With
respect to the EU's earlier discrimination claims, the Russian Federation notes
that it initially allowed regionalization from Ukraine based on the shared
historical ties and mutual trust that still existed between the two countries
in January 2014.[120] Indeed, both the Russian Federation and
Ukraine are Members of the Commonwealth of Independent States (CIS) and their
key ASF control regionalization legislation in particular, and SPS legislation,
in general, has considerable parallels—a product of their shared history under
the Soviet Union. However, the Russian
Federation engaged in strict follow-up inspections to ensure that
regionalization in Ukraine was in fact carried out effectively and could
guarantee that the ASF-free areas of Ukraine would remain ASF-free. When it discovered violations in its
regionalization measures, the Russian Federation decided, as it did in the
European Union, not to accept regionalization measures in Ukraine.[121] However, for a period
of time it was able to continue trade from high biosecurity compartments.[122]
D. The Russian Federation's
import restrictions are consistent with Article 5.6
32. The European Union has not met its burden under Article 5.6. of the
SPS Agreement and demonstrated that there exists another measure that is
reasonably available that achieves the Russian Federation's ALOP and is
significantly less trade restrictive.
33. The European Union incorrectly claims that the Russian Federation's
measures are more trade restrictive than necessary by deriving Russia's ALOP
from the challenged measures. However,
if an ALOP is derived from the challenged measure, then the measure by
definition can never be more trade-restrictive than required to achieve the
appropriate ALOP. The European Union in
response to the Panel's Question 150 disagrees with this logic, stating that "the
ALOP is inferred only from those elements that are not overtly protectionist."[123] Yet, the European Union fails to point at any
legal provisions that support such circular legal reasoning. Indeed, whether or not elements of a measure
are "overtly protectionist" is for the Panel to decide; not for one
of the Parties to unilaterally presume.
Moreover, the European Union has failed to demonstrate how conforming to
the relevant international standard—which reflects a medium/high ALOP—would
meet what it considers to be Russia's "low" ALOP.[124] Finally, the European Union's alternative is
not less trade restrictive given that the Russian Federation already complies
with the international standard.[125]
E. There is no basis for
an Article 8, Annex C undue delay claim with respect to regionalization of the
four infected Member States
34. The record supports the conclusion that the four EU Member States
failed to provide the Russian Federation with comprehensive, timely and
adequate information of implementation of
effective ASF control measures, not only
in its initial ASF-free zone regionalization request, but also subsequently
with respect to each legislative change to the borders of the alleged ASF-free
zone.[126] The significant and ongoing increases in ASF
outbreaks—including those in alleged ASF-free zones—eclipsed the ASF-free
status of the alleged ASF-free zone.
35. The Russian Federation's request for additional information from the
four infected EU Member States is not evidence that it was seeking to delay the
assessment and resolution of the individual Member State zoning requests. The European Union raised no objection to
providing the Russian Federation with some of the requested information with
respect to the four ASF-infected EU Member States.[127] The relevance and timely nature of the
Russian Federation's information request with respect to the four infected EU
Member States has been confirmed by the experts.[128] Thus, with respect to the four infected EU
Member States, the EU's claims under Article 8 and Annex C of the SPS Agreement
must fail.
II. Arguments related to the Russian
Federation's provisional compliance with the veterinary certificates
A. The Russian Federation's
provisional compliance with the veterinary certificates is not a measure
attributable to the Russian Federation
36. The facts on the record indicate that the so-called "EU wide
ban" is not a measure directly attributable to the Russian Federation.
37. First, the legal basis of the relevant veterinary certificates is
the 2004 EU-Russia Memorandum and the forms of bilateral certificate initialed
by competent officials of Russia and the European Union in 2006.[129] As this Memorandum and
the forms of bilateral certificate are bilateral in nature, it cannot be
considered a "national" Russian measure. Indeed, the bilaterally agreed forms of
veterinary certificates are a reflection of the will of both parties. There is no unilateral right to nullify the
document. Therefore, the Russian
Federation cannot unilaterally withdraw from, nor amend, the provisions of the
veterinary certificate. Moreover, the
Russian Federation is not allowed to unilaterally require any veterinary
certificate or other document produced in the form other than the form of the
bilateral veterinary certificate agreed with the European Union. Hypothetically, such an action, if taken,
could be considered as a WTO inconsistent measure that would effectively
invalidate the bilaterally agreed form of certificate contrary to Russian
commitment in paragraph 893 of the Working Party Report. And such measures would be attributable to
the Russian Federation.
38. Second, the implementation of the agreed certificate is not a
measure that might be attributable to the Russian Federation.[130] The bilateral certificate is a document
agreed between the competent authority of Russia and the competent authority of
the European Union. It establishes the
form of certificate that must be produced and signed by a competent veterinary
official of the European Union. In this
document the competent veterinary official of the relevant European Union
Member State certifies that the product at issue indeed originates from the
territory of the European Union and that such territory has been ASF-free for
three years. This document then
accompanies the respective consignment of goods exported from the European
Union to the Russian Federation. At the
Russian border, the Russian competent official checks the validity of the
certificate issued by European Union competent officials in accordance with the
form agreed, and then accepts the goods. However, the European Union's
veterinary officials, not the Russian Federation's, were unable to certify
compliance of the products at issue pursuant to the conditions set out in the
bilaterally agreed veterinary certificates.
39. The bilaterally agreed certificates are different from the ones
adopted at the national level.[131] By the decision of the Customs Union
Commission, common Customs Union forms of certificates were adopted before
Russia's accession to the WTO. They
serve the same purpose—the veterinary official downloads the form of such
certificate, signs it, and gives it to an exporter willing to trade with
Russia. At the time of Russia's
Accession, the European Union insisted that it was not willing to use these
forms of certificates adopted on the Customs Union level (now the present
Eurasian Economic Union of which Russia is a Member), and insisted that a
special bilateral certificate negotiated earlier with the Russian Federation to
remain in force. Because the European
Union was apparently concerned that Russia might decide unilaterally to
abrogate or modify the text of this agreed certificate, the European Union
insisted on the inclusion of a specific commitment in paragraph 893 to Russia's
Working Party Report. This granted the
European Union the security that the Russian Federation would not unilaterally
abrogate the validity of the agreed bilateral certificate. But what gave the European Union the right to insist on the agreed certificate also imposed upon
it an obligation to implement that certificate
until negotiated otherwise with the Russian Federation.
40. Indeed, the "implementation" or "action" is the
European Union's veterinary authorities' inability to certify absence of ASF
within the entire EU and thus to issue the necessary documents required for
export of the relevant pork products to the Russian Federation.[132] There can be no implementation of the
certificate by the Russian Federation because that would represent a second step in the process, contingent on the European Union's
veterinary authorities to carry out the first step,
i.e., issuing export certificates in accordance with the terms of the
bilaterally agreed form. Rather, the
initial implementing party is the one taking the necessary first step. In the situation in which the European Union
is unable to provide a valid certificate, the process cannot proceed to a
second step. Therefore, in that present
situation, there is no implementation of a measure that can be attributed to
the Russian Federation. Moreover, any
certification requirement and procedures are applied by the EU officials
issuing the certificate.
B. The underlying
EU-Russia veterinary certificate is and continues to be valid
41. The terms of the EU-wide veterinary certificates are recognized by
the European Union and continue to be valid – so much so that the European
Union has argued their continued validity precludes individual Member States
from negotiating directly with the Russian Federation.[133] This
demonstrates that the European Union
recognizes the present relevance and applicability of that certificate with
respect to trade in live pigs and pork products between the European Union and
the Russian Federation.
42. Further evidence of the continued validity of the certificate is
that they were a term of the Russian Federation's WTO membership.[134] The legal basis of the Russian Federation's
position is found in Article XII:1 of the Agreement Establishing the World
Trade Organization; paragraph 3 of the Protocol of Accession of the Russian
Federation; and paragraphs 893 and 1450 of the Working Party Report on the
Accession of the Russian Federation. Accordingly, the Russian Federation and
the EU committed themselves to maintain the validity of the certificates until
such time as "an export certificate was agreed with a CU Party based on
the agreed positions of the other CU Parties." As no such agreement had been reached by the
end of January 2014, the Russian Federation was obliged pursuant to the terms
of its WTO accession to continue to rely on those certificates. However, we believe that this can be called "provisional"
compliance as we expect that the certificate will be renegotiated between the
EAEU (former CU) and the European Union as set out in paragraph 893 of the
Working Party Report.
43. All Members agreed to the terms of the Russian Federation's
accession, including paragraph 893 of the Working Party Report.[135] It follows that such protocol provisions must
be consistent with the SPS Agreement.
Indeed, were the Panel to decide otherwise, then its recommendations and
rulings on this issue would lack a sufficient legal basis, as such
recommendations and rulings "cannot add to or diminish the rights and
obligations provided in the covered agreements," pursuant to Article 3.2
of the DSU.
44. Finally, as the Russian Federation is not in a position to
unilaterally modify the form of certificate bilaterally agreed with the
European Union, the Russian Federation has on numerous occasions sought to
renegotiate the current European Union-Russian Federation veterinary
certificates with the European Union as a whole.[136] For example, the Russian Federation explained
in a letter dated 5 February 2014 to the European Union that it met with the
Customs Union to discuss the provisional measures taken with respect to ASF;[137] talks were held between
the European Union, the Customs Union and the Eurasia Economic Commission with
respect to amending the certificates on 9 February 2014;[138] the Parties discussed
the certificate issue in Moscow on 21 February 2014, where they agreed it would
have to be modified in order for trade to be resumed, etc.[139] Expert consultations between the European
Commission and the Russian Federation took place in the months of March, April,
and May 2014, which – as demonstrated by the chronology – involved multiple in person meeting and
telephone negotiations. As demonstrated
by the chronology, meetings about revising the veterinary certificate also
actively involved the Customs Union. The
chronology, which remains largely undisputed by the European Union,
demonstrates the good faith efforts of the Russian Federation in an attempt to
resolve the certificate issue.
45. Further, during 2014, the Customs Union, on behalf of the Russian
Federation, engaged in various negotiations with both the European Union, and
with a handful of EU Member States. The
intent of the negotiations was to attempt to circumvent the current inability
of the EU officials to certify exports from the European Union as a result of
the language in the EU-Russia certificates.
46. Yet despite these efforts, the Parties have yet to reach a final
agreement. The European Union has
rejected the Russian Federation proposal for a "two-step plan" for
regionalization, which involved resuming imports from the European Union's
Western countries that were located far away from the infected area as an
intermediary solution to the problem, after which the countries at risk could
be discussed.[140] It should be stated that if there was a
possibility for Russia to unilaterally introduce amendments to the bilaterally
agreed certificates or just to abrogate the term of its validity the Russian
Federation might have imposed this plan in respect of exports from the EU, thus
adopting a measure attributable to Russia.
However, the bilateral nature of the agreement and the unwillingness of
the European Union to agree on possible amendments prevents Russia from actions
that might be attributable to Russia.
The Russian Federation further proposed to engage in bilateral
negotiations with individual EU Member States.[141] But the European Union insists on amending
the veterinary certificates on its own terms.
C. In the alternative,
the Russian Federation's provisional compliance with the terms of the
veterinary certificates is justified under Article 5.7
47. In the event that the Panel does consider this to be a measure, the
Russian Federation's provisional compliance with Article 5.7 of the SPS
Agreement is justified on a precautionary basis.[142] First, there continues to exist insufficient
scientific evidence to conduct a risk assessment for the entire European
Union. For instance, the 2015 EFSA
report reflects continuing scientific uncertainty about the epidemiology of
ASF. For example, it noted "high
uncertainty about the distance [of wild boar] travel"[143] and highlighted the
importance of carcasses in spreading the ASF—of which only 10 percent are
likely identified[144] – which previously was
not well understood. Moreover, the 2015
EFSA report concluded that targeted, more intensified hunting would be an
effective way to eradicate ASF in wild boar, in contrast to findings that were
made in the EFSA 2010 report.
Furthermore uncertainty continues to exist as to whether survival of
wild boar can in fact transmit ASF over longer periods of time.[145] Finally, the EFSA 2015 report concludes that
no correlation has been found between wild boar density and ASF spread.[146] This contradicts previous findings in the
European Union reports repeatedly concluding that "[s]preading of ASF in
wild boar correlate with high density of wild boar population."[147] This further confirms and highlights the
uncertain scientific evidence with respect to ASF control in wild boar that
continues to exist to date.
48. Second, the Russian Federation is still waiting to receive
information from the European Union necessary to complete an adequate
assessment of the risk of the spread of ASF.[148] The Russian Federation has quite properly
focused its questions on the control measures and data resulting from
surveillance in the EU Member States not currently
suffering infections of ASF. The
European Union continues to take the position—one year after these EU-wide
questions were provided—that important aspects of this information are
irrelevant, failing to provide the Russian Federation with key information. Among the information that the European Union
has failed to provide is information about monitoring and surveillance
practices in all EU Member States.[149] Given the important role of wild boar in
spreading the disease and the high density of wild boar in the non-infected EU
Member States, this information would be particularly essential.
49. As late as June 2015, the European Union denied the Russian
Federation's request for data on ASF surveillance conducted in the non-ASF
infected EU Member States.[150] Yet while it fails to provide this highly
relevant information, the European Union claims that the "vast majority"
of its territory qualifies as "historically free" under the OIE
Terrestrial Code.[151] The European Union fails to understand that
historical freedom from ASF is contingent on having in place an early detection
system and measures to prevent disease introduction and no evidence that the
disease has infected wildlife. Moreover,
experts have agreed that the European Union taken as a whole cannot be
considered historically free of ASF.
Thus, the European Union has not demonstrated that it warrants the
status "historically free" under Article 1.4.6 of the OIE Terrestrial
Code.
50. Third, the pertinent information available indicates a significant
risk that ASF may spread to other parts of the European Union. In this regard, the Russian Federation has
cited to a number of scientific studies, including a report by the German
Federal Research Institute for Animal Health, findings by Gallardo et. al, lead
ASF scientists, as well as wild boar migration patterns.[152]
51. Fourth, the Russian Federation continues to seek additional
information and is reviewing its provisional compliance with the veterinary
certificates within a reasonable period of time.[153] Here, any delay in negotiating a new
veterinary certificate is the result of the European Union's failure to provide
the Russian Federation with guarantees that the new certificate will in fact
keep ASF out of the production cycle, in light of the ever-worsening ASF
conditions in the European Union. The
highly dynamic, and ever-worsening ASF situation in the EU Member States
indicates reason for caution, especially given that to date, the Russian
Federation has not received surveillance data from the non-ASF infected Member
States.
D. The Russian Federation's
provisional measure is consistent with Article 8 and Annex C of the SPS
Agreement
52. The
recent jurisprudence set out in US-Animals
supports the Russian Federations' arguments that the European Union's claims
under Article 8 and Annex C must also fail.[154] In the event that the Panel considers
adherence to the provisional certificates to constitute an SPS measure
attributable to the Russian Federation, the Russian Federation has already set
out that it reviews its provisional measures on a regular basis, but that the
European Union's failure to provide sufficient information has resulted in the
current delay.[155] Indeed, one or more expert has considered
relevant a number of questions asked by the Russian Federation with respect to
all EU Member States that are part of the EU Customs Union. While experts can, for legitimate reasons and
in good faith, disagree as to what information they deem relevant, what is
important is whether there exists an objective basis for the Russian Federation's
questions under the appropriate standard of review. This is the case with respect to the
questions asked by the Russian Federation.[156]