Select events in the world of international trade law

Canada - China - WTO - Canola - SPS Agreement
13 September 2019

Canada Files WTO Dispute Complaint against Chinese Import Restrictions on Canola Seed

Canada has requested WTO dispute consultations with China concerning China's suspension of canola seed imports from two Canadian companies and China's application of enhanced inspections to canola seed imports from other Canadian companies. The request was circulated to WTO members on 12 September.

According to Canada, China cites detection of quarantine pests in canola seed shipments as the reason for its measures affecting the importation of Canadian canola seed.

Canada makes a number of claims, including under Articles 2.2 (scientific justification), 5.1 and 5.2 (risk assessment), 5.7 (provisional measures), 2.3 and 5.5 (non-discrimination), 5.6 (least trade-restrictive measures), 3.1 and 3.3 (international standards and scientific justification for deviating from them), Article 7 and Annex B (transparency), Article 8 and Annex C (control, inspection and approval procedures) of the SPS Agreement.

Canada also invokes several provisions of the Trade Facilitation Agreement, in particular Article 1.1 (publication of information), Article 5.1 (notifications for enhanced controls or inspections), Article 7.4.2 (non-discrimination in design and application of risk management) and 7.4.4 (risk management based on selectivity criteria).

The parties have 60 days to find a satisfactory solution. If consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.
Aspartame - EFSA
24 July 2019

University of Sussex Research Casts Doubts on Safety of Aspartame

The world's most widely used artificial sweetener has not been adequately proven to be safe for human consumption, argues a newly published paper from University of Sussex researchers.

Professor Erik Millstone and Dr Elisabeth Dawson have forensically detailed serious flaws in the reassurance provided in 2013 by the European Food Safety Authority (EFSA) about the safety of aspartame - more commonly known as Nutrasweet.

The new study points out the EFSA panel discounted the results of every single one of 73 studies that indicated that aspartame could be harmful while treating 84% of studies providing no prima facie evidence of harm as unproblematically reliable.

Aspartame is found in thousands of products around the world including diet soft drinks.

Prof Millstone, a University of Sussex expert on food chemical safety policy, is calling for the suspension of authorisation to sell or use aspartame in the EU pending an independent and thorough re-examination of relevant evidence – including key documents that Prof Millstone says were omitted from the dossier the panel reviewed.

Among the flaws in the study highlighted by the University of Sussex research, the panel:
- Breached EFSA guidelines on risk assessment transparency on multiple grounds
- Adopted a low-hurdle for the acceptability of negative studies – including studies previously dubbed 'woefully inadequate' and 'worthless' by experts
- Applied unreachably high hurdles for 'positive' studies indicating adverse effects – even though many of those 73 studies were far more reliable than most of the studies that provided no indication of risk
- Demonstrated puzzling anomalies including inconsistent and unacknowledged assumptions

The paper is available here.

Source: University of Sussex website
Russia - Hormones (DS26)
16 July 2019

EU and US to Sign an Agreement on Imports of Hormone-Free Beef

In a press release of 15 July 2019, the Council of the European Union (EU) informed that it had adopted a decision on the signing of an agreement between the EU and the United States on the allocation to the US of a share in the tariff-rate quota (TRQ) for the so-called 'high quality' beef, i.e. beef obtained from animals not treated with certain growth promoting hormones. It is reported that the agreement will be signed in Brussels 'at the earliest possible date.'

A WTO panel and the Appellate Body found in 1997—1998 that the European Communities' ban on the import and sale of meat obtained from hormone-treated animals was inconsistent with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures ('SPS Agreement') — in particular, that it was not based on the relevant international standard (Codex Alimentarius), was not based on a risk assessment and was discriminatory.

In 2008, the EU claimed it had brought the ban into compliance with the SPS Agreement by having commissioned scientific studies which, according to the EU, showed that the ban in respect of 17-β-oestradiol was scientifically justified, while scientific evidence in respect of the other 5 natural and synthetic hormones at issue (progesterone, testosterone, trenbolone acetate, melengestrol acetate, zeranol) was insufficient, for which reason the EU had the right to maintain the ban on a provisional basis in accordance with Article 5.7 of the SPS Agreement.

Although a new WTO panel concluded that the studies relied upon by the EU still did not justify the ban, the Appellate Body overturned the panel's findings on a number of grounds, including, among other things, violation of the EU's due process rights in the selection of scientific experts resorted to by the panel. As neither the EU (the respondent), nor the US or Canada (the complainants in the original dispute) initiated new proceedings, it is the findings in the original dispute settlement reports that remain in effect to date.

In 2009, the EU agreed with the complainants on a workaround solution to this dispute — an allocation of a 45,000-tonne tariff-rate quota for 'high quality beef' from eligible countries. While the quota was formally available to all WTO Members on a non-discriminatory basis, only US and Canadian suppliers were initially able to meet its conditions. As suppliers from other WTO Members began adapting to the conditions and taking increasingly larger shares of the quota, the US requested renegotiation of the deal. (The Canadian part of the quota is now included in the Comprehensive Economic and Trade Agreement between Canada and the European Union.)

Under the new agreement, the existing quota will remain unchanged but 35,000 out of the total 45,000-tonne TRQ will be ring-fenced for the United States and phased in over a period of 7 years.
DS495 Korea - Radionuclides - Fukushima
12 April 2019

WTO Appellate Body Quashes Panel's Findings Against Korea in Dispute over Fish Imports from Japan

On 11 April 2019, the Appellate Body of the World Trade Organisation (WTO) issued its report in Korea — Radionuclides, the dispute in which Japan challenged Korea's restrictions (import bans and testing requirements for radionuclides) on the importation of fish from Japan imposed after the Fukushima Daiichi Accident. The Appellate Body reversed two of the panel's main findings — that of violation by Korea of Articles 5.6 and 2.3 of the WTO Agreement on the application of sanitary and phytosanitary measures (SPS Agreement). (A detailed summary of the panel's findings is available on this website in the WTO SPS Disputes section.)

Article 5.6 requires that measures applied to importation not be more trade restrictive than necessary to achieve the importing country's level of SPS protection. The panel had found that Korea's import bans and testing requirements, while not more trade restrictive than necessary immediately after the accident, were maintained in violation of Article 5.6 because, after 2013, there was sufficient information to conclude that the alternative measure proposed by Japan — testing imported fish for caesium to verify that the products' caesium content does not exceed Korea's level of 100 Bq/kg and refusing entry to products with caesium content above 100 Bq/kg — achieves Korea's level of sanitary protection.

The Appellate Body reversed the panel, saying that the panel's conclusion was based on an inadequate analysis of whether the alternative measure proposed by Japan achieves Korea's level of protection. In particular, the panel's analysis was focused on whether the alternative measure would ensure that Korean consumers' exposure to radiation through food remains at a level below 1 mSv/year, while Korea's level of protection was in fact formulated as 'to maintain radioactivity levels in food consumed by Korean consumers at levels that exist in the ordinary environment — in the absence of radiation from a major nuclear accident — and thus maintain levels of radioactive contamination in food that are "as low as reasonably achievable" (ALARA), below the 1 mSv/year radiation dose limit.' The panel, therefore, had neglected the elements of Corea's level of protection other than the quantitative threshold of 1 mSv/year.

Article 2.3 prohibits arbitrary or unjustifiable discrimination between countries where identical or similar conditions prevail. The panel had found that Korea's measures arbitrarily discriminate between fish imported from Japan, on the one hand, and fish from other sources, on the other, because after 2013, the conditions in Japan and other parts of the world have been similar.

The Appellate Body disagreed. It said, in particular, that 'the panel's conclusion [as to similarity of conditions] refers simply to "potential" to contain caesium below the 100 Bq/kg tolerance level in both Japanese and non-Japanese products, but does not address the relative degree of the potential for contamination, or at least whether such products have a similar potential for caesium contamination' (5.85). In other words, the panel does not explain why the potential for caesium contamination at, say, 5 Bq/kg and 90 Bq/kg levels, while in both cases below 100 Bq/kg, entails the conclusion that the conditions in both cases are similar.

These rulings of the Appellate Body do not mean that Korea's measures are compliant with the SPS Agreement, but only that the panel's conclusions as to their inconsistency with WTO law are based on faulty reasoning. The dispute, therefore, effectively remains unresolved, while Japan has lost the ability to refer to the panel report to substantiate its allegation of unlawfulness of the import restrictions maintained by Korea.
Court EAEU - Tariff Classification - Insulin Pens
12 March 2019

EAEU Court Appeals Chamber Issues Decision in Dispute Over Tariff Classification of Insulin Pen Parts

On 7 March 2019, an Appeals Chamber of the Court of the EAEU handed down its decision in a dispute brought by ZAO Sanofi-Aventis Vostok against the Eurasian Economic Commission ("Commission") over tariff classification of imported parts of disposable insulin pens. In its application to the Court, ZAO Sanofi-Aventis Vostok challenged the decision of the Commission College dated No. 132 of 3 October 2017, which classified the parts under EAEU Commodity Nomenclature subheading 9018 31 "syringes, with or without needles". In the claimant's view (supported by decisions of commercial courts of the Russian Federation), the parts which are imported into the customs area of the Union to be used in the assembly of insulin pens, are not a syringe and should be classified under code 9018 90 840 9 ("other (instruments and appliances used in medicine)"). Earlier, a Panel (first instance) of the Court had sided with the Commission. The Appeals Chamber upheld the decision of the Panel.

Because of how Appeals Chambers of the Court are constituted (each judge sits on a Panel in one dispute and on an Appeals Chamber in another), we are unlikely to see an Appeals Chamber quash a Panel decision any time soon. However, this is the second dispute* (out of a total of four appeals that have been lodged with the Court by this date) in which an Appeals Chamber disagrees with an interim conclusion of a Panel.

The Panel in Sanofi-Aventis Vostok v. Commission stated that the finished product, the disposable insulin pen, is to be classified together with the insulin-containing medicine under subheading 3004 31 of the EAEU Commodity Nomenclature ("medicaments containing insulin"). The Appeals Chamber took issue with this finding: "…the correct classification for customs purposes of this specific commodity, ready-to-use "medicament containing insulin", falls outside the scope of this dispute and the statement in the Panel decision as to its classification is unnecessary. It is not within the discretion of the Court to classify a commodity of its own motion".

One of the issues in dispute was the competence of the Commission to adopt the contested decision. An agent of the claimant stated, in particular, that the Commission had acted ultra vires as there was no inconsistent application of the Commodity Nomenclature to the commodity in question, which, the agent contended, was a pre-requisite for the Commission adopting a classification decision. The Appeals Chamber disagreed: "Ensuring consistency of approaches in the classification of specific commodities across the entire customs area of the Union is the purpose of the classification decisions that the Commission adopts. However, the existence of inconsistent interpretation (application of the Commodity Nomenclature) is not a pre-condition for adopting such decisions". At the same time, "decisions of municipal courts in specific cases cannot restrict the right of the organs of the Union to adopt decisions on issues on which they had been delegated competence [even if such decisions of the organs of the Union run contrary to the earlier decisions of municipal courts]".

At its next meeting (20 May 2019), a Panel of the Court will consider an application brought by OOO Shiptrade, which challenges a Commission decision on tariff classification of marine diesel engines.

*In General Freight v. Commission, the Appeals Chamber disagreed with the Panel's finding that the Classification Opinions of the Harmonized System Committee form part of Union law (see page 19 of the Appeals Chamber decision in General Freight v. Commission). For more details about the case, see Yury Rovnov, Nadezhda Sporysheva. The Court of the Eurasian Economic Union: Some Initial Jurisprudence.Trade Policy, 2018. No. 4/16, p. 54.
ASF - Wild Boar Population Control
22 January 2019

Russia's Veterinary Authority Singles Out 'Lack of Resolve' to Control Wild Boar Population as Major Contributor to Sweeping Spread of ASF Virus

In a press release of 21 January 2019, Russia's Federal Service for Veterinary and Phytosanitary Surveillance (FSVPS or Rosselkhoznadzor) lays out its stance on the causes of the rapid spread of the African swine fever (ASF) virus the world over.

The press release states that adaptation and decreasing virulence of the virus poses a major threat to the global pig industry as an increasingly large number of infected boars develop antibodies to the virus, survive for longer and may therefore infect more other boars.

FSVPS contends, citing relevant practices of the Czech Republic, Denmark and Germany, that massive culling of wild boars is the only solution that may prevent further proliferation of the ASF virus. In this context, Rosselkhoznadzor argues, the Chinese authorities, which are reluctant to take more resolute measures and resort to wild boar depopulation, do not fully realise the breadth of the problem and risk seeing the situation deteriorate dramatically .

After the first ASF outbreak was reported in a northeastern province of China in August 2018, the disease has been quickly spreading west- and southwards. The developments in China are monitored closely as the country accounts for about a half of the global swine population.

Last week, Rosselkhoznadzor released a 40-minute film on African swine fever, in which it lays the blame for the spread of ASF in Eastern Europe and Baltic states on a failure to control wild boar population and cites "ineffective reduction of wild boar populations" as one of the factors contributing to the spread of ASF in Russia.

In the view of Russia's veterinary authority, so long as the ASF virus circulates in the wild, the threat of its transmission from wild boars to domestic pigs remains high.

Wild boar population control was one of the prominent issues in the WTO dispute Russia — Pigs, in which the European Union (EU) challenged, among other things, Russia's ban on imports of pigs and pig products from ASF-affected member states of the EU. While Russia contended that culling of wild boars was essential to curbing the spread of the virus (and that, therefore, measures which did not provide for such culling were not effective in containing the disease), the EU argued that rather than helping combat the virus, wild boar depopulation through hunting facilitates its spread: 'Increased or inappropriate hunting of wild boar worsens the situation and contributes to further spread of the disease, through animals trying to escape the operation.'

In one of its oral statements to the dispute settlement panel, the EU said: '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.'

The panel, basing itself on the opinion of scientific experts, sided with the EU. The panel stated, in particular: 'In our view, it is of paramount importance to indicate whether the presence of the disease has occurred in wildlife or in domestic pigs. This is because, as the experts consulted by the Panel have explained, there is a difference in the risks associated with the spread of ASF disease through wild boar and through infection of live domestic pigs. Professor Penrith and Dr Thomson indicated that it is unlikely that wild boars will become the most important source of infection. While ASF may be difficult to eradicate in wild boar, controls on the movement of wild boar may be sufficient to reduce the risks of spread to and infection of large commercial pig holdings subject to biosecurity measures. It is primarily these large commercial pig holdings which provide the animals used in the production of products for export.'

In the meantime, media reported in mid-January that a wild boar-free 'white zone' will be established in France, along the border with Belgium, where ASF outbreaks have been occurring since last year. The two most recent ones were confirmed in January 2019 at about 1 km from the French border. The 'white zone' will be surrounded by a fence and patrolled by the National Office for Hunting and Wildlife (NOHW) staff as well as hunters in search for animal corpses. The French minister of agriculture and food Didier Guillaume has called for 'maximum mobilisation' of the NOHW, National Hunters Union and National Forest Office so as to carry out a rapid wild boar depopulation in the white zone. The French army will be involved in the operation and hunters will receive 100 EUR for each boar killed.

The president of France's National Pig Producers Union Paul Auffray expressed his regret over the fact that such decisions had not been taken earlier.
Japan - International Convention for the Regulation of Whaling - International Whaling Commission
15 January 2019

Japan withdraws from International Convention for Regulation of Whaling

On 14 January 2019, the International Whaling Commission (IWC) issued a statement in which it confirmed receipt of the Government of Japan's notification of withdrawal from the International Convention for the Regulation of Whaling (ICRW). Japan had declared its intention to leave the International Whaling Commission and resume commercial whaling just a few weeks earlier, in December 2018. According to Article XI of the ICRW, the withdrawal will be effective as of 30 June 2019. Japan indicated it will only engage in commercial whaling in its territorial waters and exclusive economic zone and discontinue whaling in the Antarctic.

The IWC was set up under the International Convention for the Regulation of Whaling which was signed in Washington DC on 2 December 1946. The purpose of the Convention is to provide for the proper conservation of whale stocks and thus make possible the orderly development of the whaling industry. An integral part of the Convention is its legally binding Schedule. The Schedule sets out specific measures that the IWC has collectively decided are necessary in order to regulate whaling and conserve whale stocks. These measures include catch limits (which may be zero as is the case for commercial whaling) by species and area, designating specified areas as whale sanctuaries, protection of calves and females accompanied by calves, and restrictions on hunting methods.

In 1982, the IWC adopted an amendment to the ICRW, which came into force in 1986 and set commercial catch limits in one season at zero, thus introducing a moratorium on commercial whaling. At the same time, Article VIII of the ICRW allows governments to grant its nationals special permits authorizing whaling for scientific research purposes (paragraph 10(e) of the Schedule to the ICRW). Japan has availed of this exception to continue whaling for what it claimed to be scientific purposes.

In 2010, Australia instituted proceedings before the ICJ against Japan, alleging, essentially, that Japan abused the exception to continue commercial whaling. In 2014, the ICJ found in favour of Australia and ordered that Japan revoke any extant authorization, permit or licence granted for whaling for scientific purposes and refrain from granting any further permits.

For a detailed analysis of the IWC's history and operation, see Michael Heazle, "Scientific Uncertainty and the Politics of Whaling". Seattle, Washington: University of Washington Press, 2006.
WTO Appellate Body Report - US - Tuna II
14 December 2018

WTO Appellate Body confirms that US has brought its dolphin-safe labelling scheme in compliance with WTO rules

On 14 December 2018, the WTO Appellate Body issued its report in the second compliance proceedings of the US — Tuna II case. The Appellate Body upheld the panel's conclusion that the US labelling measure at issue, aimed at ensuring the safety of dolphins during tuna fishing, is consistent with Article 2.1 of the WTO Agreement on Technical Barriers to Trade (TBT Agreement) and meets the requirements of Article XX of the General Agreement on Tariffs and Trade (GATT). It is for the first time that a WTO member's labelling scheme has been found to be consistent with WTO rules.

As explained in the report, there is a regular association between tuna and dolphins in the ETP (Eastern Tropical Pacific) region, meaning that schools of tuna tend to aggregate and swim beneath certain species of dolphins. Certain vessels operating in this area employ a fishing method known as setting on dolphins, which takes advantage of this association. This fishing method involves chasing and encircling the dolphins with a purse seine net in order to catch the tuna swimming beneath them.

The US measure in dispute is a 'dolphin-safe' labelling scheme, which prohibits the designation as 'dolphin-safe' of tuna products 'exported from or offered for sale in the United States' containing either: (i) tuna harvested on the high seas by a vessel engaged in driftnet fishing; or (ii) tuna harvested by vessels using purse seine nets to encircle, or 'set on', dolphins anywhere in the world. Tuna products which are not automatically excluded from the label by virtue of these eligibility requirements may be eligible for the label subject to certain certification, tracking and verification requirements, which are aimed at ensuring that no dolphins were killed or seriously injured in the gear deployments in which the tuna was caught.

As Mexican fleet primarily catches tuna in the ETP by setting on dolphins, Mexican tuna products are generally ineligible for the US label. This, however, does not automatically mean that the US measure is illegal. The question that WTO panels and the Appellate Body had to decide was whether this detrimental impact on the competitive conditions for Mexico's tuna products stemmed exclusively from a legitimate regulatory distinction — in other words, whether the measure's eligibility conditions, certification, tracking and verification requirements were properly 'calibrated' to the risks to dolphins arising from the use of different fishing methods in different areas of the ocean.

The measure as originally designed was found to be incompatible with WTO rules by a WTO panel in 2011 and by the Appellate Body (though on different grounds) in 2012. In 2015, the Appellate Body found, as part of the first compliance proceedings, that the amended measure was still inconsistent with the non-discrimination requirements of the TBT Agreement and GATT 1994 and was not justified under Article XX of the GATT 1994.

This time, however, the Appellate Body affirmed the panel's ruling that the measure is properly 'calibrated' to the risks to dolphins and that any detrimental impact of the measure on Mexican tuna imports into the US stems exclusively from a legitimate regulatory distinction. While the measure modifies the conditions of competition to the detriment of Mexican tuna products in the US market and is therefore inconsistent with Article I:1 (most-favoured-nation treatment obligation) and Article III:4 (national treatment obligation) of GATT 1994, it is not applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination and is therefore justified under Article XX of the GATT 1994 as one relating to the conservation of exhaustible natural resources (i.e., dolphins).

This outcome is remarkable in that no labelling regime had previously withstood scrutiny in the WTO dispute settlement system. In particular, in December 2015, the US abolished its country-of-origin labelling scheme for meat products just 11 days after a WTO arbitrator determined that Canada and Mexico were allowed to request authorization from the Dispute Settlement Body to suspend concessions and related obligations in the goods sector under the GATT 1994 for a total amount of around 1 billion US dollars a year. Some time before, a compliance panel and the Appellate Body had concluded that the US had failed to bring the measure into compliance with relevant WTO rules within a reasonable period of time.
Agreement on Technical Barriers to Trade (TBT Agreement)
Article 2. Preparation, Adoption and Application of Technical Regulations by Central Government Bodies
1. Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country.
General Agreement on Tariffs and Trade (GATT)
Article XX. General Exceptions
Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:
(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption;
Court of the EAEU - Advisory Opinion - Athletes
10 December 2018

Eurasian Court finds illegal application of quantitative restrictions on foreign players to EAEU sportsmen

In its advisory opinion of 7 December 2018, the Court of the Eurasian Economic Union (EAEU) concluded that the application to sportsmen who are nationals of EAEU member states of restrictions on the number of foreign professional sportsmen that may take part in sporting competitions is inconsistent with the freedom of labour migration provisions of the Treaty on the EAEU. The opinion was issued on the request made by the Eurasian Economic Commission (Commission).

The Court opined that such restructions constitute restrictions on professional activity or occupation and are thus inconsistent with Article 97.2 of the Treaty on the EAEU. According to the Grand Panel of the Court, restrictions on the number of foreign professional sportsmen that may be fielded in national sports competitions are, to the extent they apply to sportsmen of EAEU member states, incompatible with the Treaty as they place the sportsmen who are nationals of other EAEU member states at a disadvantage vis-à-vis the sportsmen who are nationals of the member state in which the professional activity is performed.

According to the Court, the fact that the restrictions concern not the employment of players but the extent to which their clubs may field them in official matches is irrelevant. In so far as participation in such matches is the essential purpose of a professional player's activity, a rule which restricts that participation
also restricts the right of employment of the player concerned.

This and other statements in the opinion were borrowed by the Court from the preliminary ruling of the Court of Justice the European Union (CJEU) in the 1995 Bosman case (Case C-415/93 Union royale belge des sociétés de football association ASBL v Jean-Marc Bosman, Royal club liégeois SA v Jean-Marc Bosman and others and Union des associations européennes de football (UEFA) v Jean-Marc Bosman [1995] ECR I-4921, paras. 115 — 137). At the time, the CJEU ruled illegal similar restrictions that were in place in EU member states.

Although this was not directly pertinent to the issue at hand, the Court also pronounced on the degree of freedom of member states in imposing restrictions on the movement of labour within the EAEU for reasons of national security (this option is provided for by Article 97.2 of the Treaty on the EAEU). The Court explained that such restrictions must respect the principle of proportionality: 'Member States enjoy discretion in determining national security and public order measures [...]. However, [such] state measures must be proportionate, i.e. must accord with the achievement of the identified national security [...] and public order objectives and must not go beyond what is necessary for their achievement'.

Unlike a preliminary ruling of the CJEU, an advisory opinion of the Court of the EAEU is only recommendatory in nature and, technically speaking, has no direct legal implications. As the Commission has no legal standing to bring an action before the Court of the EAEU, a request for an advisory opinion is the only way for it to have the Court pronounce on an issue of concern.

FDA - Menthol Cigarettes Ban
9 November 2018

US Food and Drug Administration to propose a ban on menthol cigarettes

Media are reporting that the US Food and Drug Administration plans to propose a ban on menthol cigarettes (i.e., cigarettes with menthol oil) as part of its campaign against nicotine addiction.

A WTO panel found in 2011, in a complaint brought by Indonesia, the largest importer of clove cigarettes into the US, that the exclusion of menthol from the general ban on flavours, herbs and spices in cigarettes, introduced by the Special Rule for Cigarettes in Section 907(a)(1)(A) of the Federal Food, Drug and Cosmetic Act, was discriminatory and thus inconsistent with the WTO Agreement on Technical Barriers to Trade. The Appellate Body affirmed the ruling, after clarifying that the less favourble treatment of clove cigarettes in relation to menthol cigarettes does not find justification in the stated regulatory objective of reducing youth smoking.

This is because, as the panel had found:
- clove and menthol cigarettes are harmful to health for the same reason: the inhalation of combusted substances;
- both clove and menthol cigarettes contain nicotine and additives that mask the harshness of tobacco;
- flavoured cigarettes, a category that includes both menthol and clove cigarettes, are particularly appealing to youth because of the presence of an additive that gives them a characterizing flavour having the effect of masking the harshness of tobacco;
- in the mind of youth, flavoured cigarettes, including those flavoured with clove or menthol, are similar.

The panel also quoted from a WHO Study entitled 'The Scientific Basis of Tobacco Product Regulation', which had established that:
'Certain additives (menthol in manufactured cigarettes, eugenol in kreteks [i.e. clove cigarettes]) are added specifically to reduce the smoke harshness and enable the smoker to take in more dependence-causing and toxic substances. Many smokers smoke kreteks [i.e. clove cigarettes] and menthol cigarettes, which are often marketed as less toxic; and the added ingredients possibly contribute to the perception that the cigarettes are less noxious and harmful''.

To the Appellate Body, all of this meant there was no legitimate reason for the less favourable treatment of clove cigarettes vis-à-vis menthol cigarettes .

The United States had until 24 July 2013 to bring its measure into compliance with the findings of the panel and Appellate Body reports. On 23 August 2013, Indonesia, having declared that the US had failed to comply, requested authorization of the WTO Dispute Settlement Body to take countermeasures. On 3 October 2014, Indonesia and the United States notified the WTO DSB that they had reached a mutually agreed solution to the dispute.

According to information cited in the panel and Appellate Body reports, between 94.3 and 97.4 per cent of all cigarettes sold in the United States in the years 2000 to 2009 were domestically produced, while menthol cigarettes accounted for about 26 per cent of the total US cigarette market. Imports of clove cigarettes into the United States accounted for approximately 470 million cigarettes in 2007, 430 million cigarettes in 2008 and 220 million cigarettes in 2009. The value of these imports was approximately USD16.2 million in 2007, USD14.8 million in 2008 and USD 7.5 million in 2009. During these three years virtually all clove cigarettes were imported from Indonesia.
Russia - Pigs (DS475)
20 October 2018

EU requests establishment of a new WTO panel in dispute over pig imports to Russia

On 19 October 2018, the European Union ('EU') submitted to the Chairman of the Dispute Settlement Body of the World Trade Organization ('WTO DSB') a request for the establishment of a panel as part of the continuing dispute with Russia over the imports of European pigs and pig products. The new panel (which, however, may be composed of the same persons as the original one) is to determine whether Russia has brought its measures, which the EU challenged in the WTO in 2014—2017, into compliance with its WTO obligations in accordance with the original panel and Appellate Body reports.

In 2017, the disputing parties agreed that Russia would have until 6 December 2017 to implement the findings in the original reports. On 13 December 2017, Russia informed the WTO DSB that it did so on 5 December 2017.
Court of the EAEU - Oil Marine Group - Monitoring and Control
15 October 2018

First win for a private applicant in the Court of the EAEU

On 11 October 2018, a Panel (first instance) of the Court of the Eurasian Economic Union pronounced its decision in the case Oil Marine Group v. Commission. The applicant challenged a failure to act of the Eurasian Economic Commission ('Commission'), which had declined to carry out 'monitoring and control' of compliance by Russia's customs authorities and judiciary with a decision of the Commission of the Customs Union (the predecessor of the Eurasian Economic Commission). The decision provides for an exemption from import duties for watercraft included in international ship registries.

In the Court's first-ever judgement in favour of a private applicant, the Panel concluded that in conducting monitoring and control, the Commission had confined itself to a review of Russia's national legislation while refraining from an examination of its application in practice. The judges ruled that in doing so, the Commission had failed to fully discharge the monitoring and control functions incumbent upon it and had thus violated the rights and legitimate interests of the applicant.

The decision may be appealed within 15 days of pronouncement.
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