Detailed Presentation of SPS Measures, Basic Rights and Obligations of the SPS Agreement and procedures for Control, Inspection and Approval

Transcription

1 WTO E-LEARNING COPYRIGHT 13 Detailed Presentation of SPS Measures, Basic Rights and Obligations of the SPS Agreement and procedures for Control, Inspection and Approval OBJECTIVES Give examples of measures regulated by the SPS Agreement: measures aimed at food safety; the protection of human, animal and plant health from risks arising from pests and diseases; and measures to prevent other damage from the entry, establishment and spread of pests; explain the basic rights and obligations of the SPS Agreement (Article 2); and present Members' obligations with regard to Control, Inspection and Approval Procedures. M y C o u r s e s e r i e s 1

2 I. INTRODUCTION The SPS Agreement is intended to ensure that SPS measures needed to protect the safety of food, and human, animal or plant life or health are not applied in a manner which constitutes arbitrary or unjustifiable discrimination between Members (where the same conditions prevail) or a disguised restriction to international trade, while recognizing the right of Members to adopt such measures when scientifically justified. The SPS Agreement applies to all measures whose purpose is to protect: human or animal life or health from food-borne risks (risks arising from additives, contaminants, toxins or disease-causing organisms in their food, feed or beverages); human life or health from animal - or plant - carried diseases; animal and plant life or health from pests, diseases or disease-causing organisms; a Member's territory from damage from the entry, establishment or spread of pests (including weeds). These include sanitary and phytosanitary measures related to products and to process and production methods. The SPS Agreement applies to measures taken to protect the health of fish and wild fauna, as well as of forests and wild flora, from the risks stated above. Furthermore, we analysed the relationship between the SPS and TBT Agreements, and found out that the SPS and TBT Agreements are mutually exclusive in the measures they cover. The SPS Agreement covers all measures taken for one or more of the purposes identified above. The TBT Agreement covers all technical regulations, standards and conformity assessment procedures regardless of their objectives, except when these are sanitary or phytosanitary measures as defined by Annex A of the SPS Agreement. Finally, we understand now that the SPS Agreement is, among other things, a further specialization of Article XX(b) of the GATT. Article 2.4 of the SPS Agreement provides that SPS measures considered to be in accordance with the relevant provisions of the SPS Agreement shall be presumed to be in accordance with the obligations of a Member under the provisions of GATT 1994 (Article I, III and, in particular, XX(b)). We also have to keep in mind, regarding the institutional coverage of the SPS Agreement, that it applies to a wide range of authorities: (i) central government bodies; (ii) local government bodies (which include provincial/state government bodies); and (ii) regional and non-governmental bodies. Members' obligations vary according to the type of body. Furthermore, the SPS Agreement applies to SPS measures in legal force regardless of the date they were enacted by the Member. In this Module, we are going to see some examples of SPS measures and discuss the basic obligations contained in the SPS Agreement, as set forth in its Article 2. In the final part of this Module we will explain the disciplines on procedures for Control, Inspection and Approval, as set forth in Article 8 and Annex C of the SPS Agreement. 2

3 II. SANITARY AND PHYTOSANITARY MEASURES IN DETAIL SPS measures aim to: (SPS Agreement, Annex A.1 Definitions): a) protect animal or plant life or health within the territory of the Member from risks arising from the entry establishment or spread of pests diseases disease-carrying organisms or disease-causing organisms; b) protect human or animal life or health within the territory of the Member from risks arising from additives contaminants toxins or disease-causing organisms in foods beverages or feedstuffs; c) protect human life or health within the territory or the Member from risks arising from diseases carried by animals plants or products thereof or from the entry establishment or spread of pests; or d) prevent or limit other damage within the territory of the Member from the entry establishment or spread of pests. The SPS Agreement applies to SPS measures which may, directly or indirectly, affect international trade (Article 1). The development and application of these measures shall be in accordance with the provisions of the Agreement. Annex A of the SPS Agreement specifies that SPS measures include all relevant: Laws; Decrees; Regulations; Requirements; and Procedures. These include measures related to, inter alia: end product criteria; processes and production methods; testing, inspection, certification and approval procedures; quarantine treatments including relevant requirements associated with the transport of animals or plants, or with the materials necessary for their survival during transport; provisions on relevant statistical methods, sampling procedures and methods of risk assessment; and packaging and labelling requirements directly related to food safety. 3

4 RECALL Remember that "sanitary" relates to human and animal life or health protection, while "phytosanitary" relates to plant protection. Moreover, "animal" includes fish and wild fauna; "plant" includes forests and wild flora; "pests" include weeds; and "contaminants" include pesticide and veterinary drug residues and extraneous matter. The term "SPS measure" may seem quite abstract or even vague when we first hear about it, right? With some examples we have collected below, we hope that it will become clearer what "SPS measures" may mean. We shall present them as divided into three categories, so as to facilitate comprehension: measures aimed at food safety; those aimed at the protection from pests and diseases of: human life or health; animal or plant life or health; and measures to prevent the entry, establishment or spread of pests and diseases. The distinction between the different categories of risk, i.e. food-borne risks, and pest or disease risks, is very important because the kind of risk assessment to be conducted is different for each of these risk categories. By the way, do you know which were the latest SPS measures adopted by your country? These should have been notified in advance to trading partners and published. II.A. FOOD SAFETY MEASURES Food safety measures are those measures aimed at protecting human or animal life or health from risks arising from additives, contaminants, toxins or disease-causing organisms in foods, beverages or feedstuffs. "Contaminants" include pesticide and veterinary drug residues and extraneous matter. Figure 1: Food safety Measures 4

5 ILLUSTRATION First example: Maximum Residue Limit for Pesticides on Fruits and Vegetables Some consumers have become increasingly concerned about the adverse impacts pesticides may have not only on the environment, but also on human health. Most countries impose limits on pesticide residue levels in or on fruits and vegetables, and systems for testing and inspection have been put in place to ensure the fulfilment of requirements by both foreign and domestic producers. The Codex Alimentarius Commission, one of the three standard-setting bodies named in the SPS Agreement, has a Committee on Pesticide Residues (CCPR), whose prime objective is to reach agreement among governments on maximum residue limits (MRLs) for pesticides residues in food commodities moving in international trade. Such MRLs are sanitary requirements relating to end product criteria when, for example, apples imported and domestically produced are required not to contain more than 10mg/Kg of Diphenylamine, a type of pesticide. However, MRLs may also relate to processes and production methods, since the application of pesticides during the growing period of the fruit is what determines the residue levels found in or on the fruit at harvest. Furthermore, governments may put in place sampling and testing requirements, to control the fulfilment of the MRLs proposed by the importing country. Second example: Feed-stuff: Animal feed must not contain bone meal Firstly recognized in Great Britain in 1986, bovine spongiform encephalopathy (BSE) or "mad cow" disease is a fatal neurological disease of adult cattle, believed to occur as a result of dietary exposure to feedstuffs containing infected meat and bone meal (MBM). While never having been as widespread as other livestock diseases, such as foot and mouth and rinderpest, BSE has attracted wide attention because consumption of meat products contaminated with the BSE agent has been strongly linked to new variant Creutzfeldt-Jakob disease (vcjd), a human brain-wasting disease. Many importing countries require that beef imports from BSE-affected countries contain no high-risk material such as brain tissue. Given the potential for introduction and recycling of the BSE agent through consumption by cattle of meat-and-bone meal of ruminant origin, many countries require that feedstuff for animals do not contain MBM and do not allow importation of animal feed that contains MBM. BSE is one of the diseases notifiable to the World Organisation for Animal Health (OIE), i.e., each OIE member country has to report any BSE cases it detects on its territory. The OIE has developed a way to categorize countries according to their BSE risk and publishes a list of countries with negligible or controlled BSE risk. Moreover, it has established a list of products that can be traded without BSE risk, and appropriate measures to take when importing animal products from BSE-affected countries. 5

6 II.B. MEASURES TO PROTECT HUMAN, ANIMAL, OR PLANTS AGAINST DISEASES AND PESTS II.B.1. MEASURES TO PROTECT HUMAN LIFE OR HEALTH Sanitary measures are also those taken to protect human life or health from risks arising from diseases carried by animals, plants or products thereof, or from the entry establishment or spread of pests. Figure 2: Measures to protect human life or health ILLUSTRATION Example: Veterinary vaccination prior to the importation of pets Many countries, especially developed countries, have eradicated rabies. Therefore, they impose numerous restrictions on imports of domestic animals, including the requirement that such animals be vaccinated against rabies and have not spent the previous six months prior to import in an area where rabies still occurs. Such measures are twofold: on one hand they want to prevent animals in the importing country from contracting the disease, but they are also aimed at protecting human life and health, as rabies, a disease carried by animals, is potentially fatal to humans and results in the death of more than 55,000 people every year. Note The OIE is recognized by the SPS Agreement as the relevant international organization with respect to measures that protect humans from animal-carried diseases which are called "zoonoses". 6

7 II.B.2. MEASURES TO PROTECT ANIMAL OR PLANT LIFE OR HEALTH Sanitary and phytosanitary measures are also taken to protect animal or plant life or health from risks arising from the entry, establishment or spread of pests, diseases, disease-carrying or disease-causing organisms. Figure 3: Measures to protect animal or plant life or health ILLUSTRATION First example: Measures to prevent Avian Influenza Sanitary regulations set by Members to prevent the spread of Avian Influenza belong to the category of measures to protect animal health, if the purpose is to protect birds within the territory of the Member. However, such measures may also serve to protect human life and health, since avian influenza can under certain circumstances be transmitted from animals to humans. The OIE has been serving as a forum for the prevention and control of the disease, in terms of both human and animal health protection. The World Health Organization also participates in an international effort aimed at human health protection. In order to avoid the spread of avian influenza within their territories, many countries have adopted measures restricting imports of live birds and poultry products from infected areas. The OIE has specified procedures for diagnostics and prevention of the most dangerous strains of the disease in its Terrestrial Animal Health Code and in the Manual of Diagnostic Tests and Vaccines for Terrestrial Animals, including measures to be taken when importing poultry products from areas with different avian influenza situations. Second example: Requirement of Permits for plants imports Various countries request permits or authorization for the importation and transit of plants and plant products. This serves to allow legitimate international and interstate trade while preventing the introduction of harmful, exotic agricultural quarantine pests and diseases. Imported plant products may be subject to governmental scrutiny, quarantine procedures and health inspection. Such measures aim at protecting plant health by preventing the release of disease-causing organisms, noxious weeds and pests into the environment that may have an adverse impact on wild plants and crops. 7

8 As an example, we may mention the requirement that imported plants be free from Mediterranean fruit fly: Mediterranean fruit fly (Medfly) is one of the world's most destructive insect pests. It attacks more than 250 kinds of fruits, nuts, and vegetables, many of which grow in home gardens and orchards. Imported fruits may carry Medflies from an infested area to a disease-free area, thus contaminating entire crops and causing huge financial losses, in crop damages, additional pesticide use, and quarantine requirements. Preventive measures are important to avoid the import of infested fruits, and phytosanitary measures regarding Medfly eradication include survey, regulation (such as quarantine) and control programs. IF YOU WANT TO KNOW MORE PLANT PROTECTION AGAINST PESTS (FRUIT FLIES) Check the international standards on plant health elaborated by the International Plant Protection Convention (IPPC) Commission, the international phytosanitary standard-setting body, as recognized by the SPS Agreement. Two international standards are considered relevant in the example we gave above, on fruit flies: ISPM No. 9 (1998) - Guidelines For Pest Eradication Programmes; and ISPM No. 26 (2006) - Establishment of Pest Free Areas for Fruit Flies (Tephritidae). WTO Members have to base their phytosanitary measures aimed at pest control on these international standards, according to the obligations contained in Article 3.1 of the SPS Agreement. This is called harmonization. Alternatively, Members can base their measures on scientific risk assessments. II.C. MEASURES AGAINST THE ENTRY, ESTABLISHMENT OR SPREAD OF PESTS IN A TERRITORY Sanitary or phytosanitary measures may also aim to prevent or limit other damage within the territory of the Member from the entry establishment or spread of pests. Figure 4: Measures to protect the territory Such measures are aimed at avoiding the introduction of species which may disrupt the ecosystem and may cause economic damage within the territory of a country. 8

9 ILLUSTRATION Example: Invasive Zebra Mussels According to the United States Department of Agriculture - Animal and Plant Health Inspection Service, zebra mussels are relatively new invaders, believed to have come to America in the ballast tanks of a transoceanic ship. Native to Europe's Caspian and Black Seas, the zebra mussel was first found in North America in 1988 in Lake St. Clair between Lakes Huron and Erie. Since then, the zebra mussel has spread throughout the Great Lakes and waterways of at least 19 states. It remains unstopped by predators and parasites. The threat of the zebra mussel lies in its ability to reproduce in large numbers (over 40,000 eggs can be laid in a reproductive cycle and up to one million in a spawning season, according to the US Geological Survey) and in the fact that it can stick to anything hard (a rock, a pipe, or even the shell of another sea creature). The mussels will blanket marinas and block intake pipes to factories and water treatment plants and cause great economic losses. Invaded areas in the US have been treated with a solution of potassium chloride, which is fatal to the zebra mussels but does not harm fish and other aquatic life in the water. However, the best treatment still is prevention and the United States has adopted measures such as the requirement that all vessels equipped with ballast water tanks that enter a US port after operating on the waters beyond the US exclusive economic zone (EEZ) carry out exchange of ballast water beyond the EEZ, prior to entry into any port within the US; or in other waters where the exchange does not pose a threat of infestation or spread of aquatic nuisance species in waters of the United States. Sampling procedures to monitor compliance with the requirements of the regulations were also set forth, along with the request for certification of vessels. Other concerns relating to zebra mussels are that they can crowd out native bivalve species like freshwater clams. Sea creatures with shells often fall victim when literally hundreds of zebra mussels cover them, preventing them from feeding, growing, moving, breathing, and reproducing. Due to the fact that zebra mussels filter all the plankton available in the waters, they literally lead to the starvation of native species, including fish. EXERCISES: 1. Measures covered by SPS Agreement have at least one of four objectives. Which objectives are these? 2. Annex A of the SPS Agreement states that SPS measures include all relevant laws, decrees, regulations, requirements and procedures with regard to six types of measures. Could you list these? 9

10 III. SPS AGREEMENT BASIC RIGHTS AND OBLIGATIONS IN BRIEF Article 2 of the SPS Agreement stresses that Members have the right to adopt SPS measures to achieve their self-determined level of health protection. The right to adopt SPS measures to achieve a given level of protection is accompanied by basic obligations. Essentially, countries may adopt SPS measures provided the measures: are applied only to the extent necessary to protect life or health; are based on scientific principles and not maintained without sufficient scientific evidence; and do not unjustifiably discriminate between national and foreign, or among foreign sources of supply. Members have two options to show that their measures are based on science. They may either: base their measures on international standards; or base their measures on scientific risk assessments. IN DETAIL As we know, the SPS Agreement specifies the conditions under which national regulatory authorities may set and enforce health and safety standards that directly or indirectly affect international trade. The Agreement sets out both substantive and procedural requirements aiming at preventing food safety and animal and plant health regulations from unnecessarily obstructing international trade and from being misused for protectionist purposes. Article 2 of the SPS Agreement states Members' basic rights and obligations, which are then further elaborated on in subsequent articles. Let's examine Article 2 in detail. III.A. RIGHT TO ADOPT SPS MEASURES The first paragraph of Article 2 provides that: 1. Members have the right to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of this Agreement. 10

11 This means Members can give priority to health protection over trade. In addition, the level of SPS protection is for each Member to choose. However, the SPS measure must fulfil the procedural and substantive requirements provided for in the SPS Agreement. If another Member does not agree with the importing Member's SPS measures, it can bring a legal challenge before a WTO dispute settlement Panel. It is up to the challenging Member to adduce sufficient proof to establish a prima facie case that such measure is inconsistent with the SPS Agreement. III.B. MEASURE MUST BE NECESSARY AND BASED ON SCIENTIFIC PRINCIPLES Article 2.2 states: Members shall ensure that any sanitary or phytosanitary measure is applied only to the extent necessary to protect human, animal or plant life or health, is based on scientific principles and is not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5. III.B.1. NECESSITY The concept of necessity has never been tested in dispute settlement proceedings in the SPS context, as complaining parties have directed their claims to more specific provisions of the SPS Agreement. There has been an evolving interpretation of necessity in the GATT context, particularly in the context of GATT Article XX, paragraphs (b) and (d). Although not having the same application and meaning of "necessity" in the SPS Agreement, we will briefly analyse the interpretation of necessity in the GATT (Article XX) context, below, as it provides useful guidance. GATT Article XX is an exception to the obligations set forth in the GATT Agreement. That is, a Member which violates a GATT obligation (for example, Article I, III or XI, among others), may claim that its measure is justified under Article XX because it fulfils one of the objectives set forth in the paragraphs of this Article (while also complying with the requirements of the chapeau of the Article). However, there are situations in which, even if fulfilling one of the objectives protected by Article XX, a Member's measure is not found in violation of other GATT obligations, and thus Article XX is not applicable to the case. In the context of Article 2 of the SPS Agreement, the question of necessity is not related to an exception, but rather to the basic rights and obligations of Members. An SPS measure must be "necessary" to protect health, and the subsequent requirements of Article 2 clarify that scientific information is to be considered in determining whether a risk to health exists and how it can be mitigated. 11

12 CASE STUDIES ON THE DETERMINATION OF NECESSITY IN THE GATT CONTEXT In the case Korea Various Measures on Beef (WT/DS161 and 169), the Appellate Body ruled that determination of whether a measure, which is not 'indispensable' may nevertheless be 'necessary' "involves in every case a process of weighing and balancing a series of factors which prominently include the contribution made by the compliance measure to the enforcement of the law or regulation at issue, the importance of the common interests or values protected by that law or regulation, and the accompanying impact of the law or regulation on imports or exports". This "process of weighing and balancing" has been further developed in the EC Asbestos case (WT/DS135), where the Appellate Body found that "the more vital or important the common interests or values pursued, the easier it would be to accept as 'necessary' measures designed to achieve those ends". The Appellate Body noted that in the Asbestos case, the objective pursued by the measure was the preservation of human life and health, a value both "vital" and "important in the highest degree". III.B.2. SCIENTIFIC EVIDENCE The requirement under Article 2.2 that an SPS measure must have a scientific basis and not be maintained without sufficient scientific evidence is the cornerstone of the SPS Agreement and is further elaborated in Articles 5.1 and 5.2 on risk assessment. As the Appellate Body stated in the EC Hormones case (European Communities Measures Concerning Meat and Meat Products (Hormones), WT/DS26 and 48), this requirement is essential for the maintenance of the delicate and carefully negotiated balance in the SPS Agreement between the shared interests of promoting international trade and of protecting life and health of humans, animals and plants. III.B.3. TIMELINESS It is not sufficient for a measure to have been based on scientific principles at the time of its establishment. Scientific knowledge evolves over time, and Article 2.2 requires a measure not to be maintained or continued unless sufficient scientific evidence to support it remains. As explained by the Appellate Body in Japan - Agricultural Products II (Japan Measures Affecting Agricultural Products, WT/DS76), for evidence to be sufficient, there must be a rational or objective relationship between the SPS measure and the scientific evidence available. This has to be determined on a case-by-case basis and will depend upon the particular circumstances of the case, including the characteristics of the measure at issue and the quality and quantity of scientific evidence. The burden of proof rests with the complaining party to raise a prima facie case that there is "not sufficient scientific evidence" for the measure. The Member adopting the measure then has to bring forward the scientific evidence on which it has based its SPS measure (Appellate Body report in Japan Agricultural Products II). Where a measure conforms to an internationally developed standard, the measure is presumed to be based on sufficient scientific evidence and a Member may not need to provide further evidence. For a measure not based on an international standard, however, Members need to provide not only evidence but also a risk assessment. 12

13 The risk assessment and the results of the risk assessment have to sufficiently warrant the SPS measure. The only qualified exception to this rule is contained in Article 5.7, which allows Members to adopt provisional SPS measures in cases where the scientific evidence available is insufficient. III.C. NO ARBITRARY OR UNJUSTIFIABLE DISCRIMINATION OR DISGUISED RESTRICTION ON TRADE In addition, Article 2.3 states that SPS measures shall not: arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail including between their own territory and that of other Members [and] shall not be applied in a manner which would constitute a disguised restriction on international trade. Article 2.3 thus contains a non-discrimination requirement, which prevents arbitrary or unjustifiable discrimination by an SPS measure, where identical or similar conditions prevail. The Panel on Australia - Salmon (Article 21.5) (Australia - Measures Affecting Importation of Salmon WT/DS18) identified three elements, cumulative in nature, necessary to find a violation of Article 2.3: 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; the discrimination is arbitrary or unjustifiable; and identical or similar conditions prevail in the territory of the Members compared. The Panel in Australia - Salmon found that discrimination under this Article may occur not only between like products, but also between different products if these pose the same or similar health risks (which would justify them being treated the same way). This broad non-discrimination provision is complemented by Article 5.5 on "consistency", according to which 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. The Appellate Body in the Australia Salmon case clarified that "finding a violation of Article 5.5 will necessarily imply a violation of Article 2.3" first or second sentence. III.D. CONFORMITY WITH GATT PROVISIONS Finally, Article 2.4 provides that SPS measures: which conform to the relevant provisions of this Agreement shall be presumed to be in accordance with the obligations of the Members under the provisions of GATT 1994 which relate to the use of sanitary or phytosanitary measures in particular the provisions of Article XX(b). 13

14 RECALL Article XX(b) provides for an exception to the other provisions of the GATT, whereas the SPS Agreement provides explicitly for the rights and obligations of Members when applying an SPS measure. We should note that Article 2 of the SPS Agreement and Article XX(b) of the GATT impose similar requirements that a measure: must be necessary to protect animal, plant life or health; must not arbitrarily or unjustifiably discriminate between Members where the same conditions prevail; and must not constitute a disguised restriction to international trade. The SPS Agreement imposes more "strict" requirements, since procedural obligations are involved (transparency, for example); necessity has to be proved via scientific evidence; and discrimination must be avoided between Members where similar (and not only identical) conditions prevail and between products which are not necessarily like (as stated by the Panel in Australia Salmon (Article 21.5). For these reasons, the conformity of a measure with the provisions of the SPS Agreement presumes the conformity with the relevant provisions of the GATT, namely those which regulate non-discrimination (Articles I and III) and the protection of human, animal and plant life or health (Article XX). Not all SPS measures, if analysed under the GATT, would fall under Article XX, since not all SPS measures violate GATT provisions. As we mentioned above, the violation of a GATT provision(s) is a pre-requisite for the application of Article XX, which is an exception provision in itself. On the other hand, Article XX(b) applies to some measures which are outside of the scope of the SPS Agreement, such as the protection of human health from risks related to transportation, or human transmitted diseases, etc. We should note that, in practice, when a measure has been determined to be an SPS measure in a trade dispute, dispute settlement panels have stopped their evaluations before finding whether or not there has been a violation of the GATT. EXERCISES: 3. What are the basic rights and obligations provided in the SPS Agreement? 4. What are the non-discrimination requirements imposed by Article 2.3 of the SPS Agreement? 14

15 IV. CONTROL, INSPECTION AND APPROVAL PROCEDURES Article 8 and Annex C of the SPS Agreement provide disciplines for control, inspection and approval procedures, which are used by governments to check and ensure the fulfilment of SPS measures. Control, inspection and approval procedures include, inter alia, procedures for sampling, testing and certification, as indicated in the footnote 7 to Annex C. Important note The SPS Agreement does not present a definition of sampling, testing or certification procedures. The basic requirement is that any such procedures shall be no less favourable for imported products than they are for like domestic goods, and shall be limited to what is necessary to ensure compliance with regulations. This applies for time delays, information requirements, fees, sampling procedures, location of facilities, etc. Moreover, some Members have national approval procedures or "positive list" systems whereby only explicitly approved additives or tolerances for contaminants are permitted; any substance that is not on the list is prohibited. In these cases, the SPS Agreement requires that Members consider the use of a relevant international standard as the basis for allowing import access until they have made a final safety determination. Article 8 on Control, Inspection and Approval Procedures states that: Members shall observe the provisions of Annex C in the operation of control inspection and approval procedures including national systems for approving the use of additives or for establishing tolerances for contaminants in foods beverages or feedstuffs and otherwise ensure that their procedures are not inconsistent with the provisions of this Agreement. Annex C contains the detailed obligations of Members in this area. We shall examine Annex C further below. IV.A. TYPES OF PROCEDURES As we mentioned above, Control, Inspection and Approval Procedures include a wide range of activities (e.g. sampling, testing, inspection and certification) and are sometimes also referred to as "conformity assessment" procedures. They are the procedures that are used to check whether a product meets the SPS requirements of the importing Member. The various control, inspection and approval procedures may be linked. For instance, testing may form part of inspection and inspection and testing results may be used to support certification. The SPS Agreement contains no relevant definitions of the types of procedures used for control, approval and inspection purposes. However, for training purposes, we would like to introduce you to some of the definitions found in dictionaries and in the work of the relevant international organizations, namely the Codex Alimentarius Commission, the Food and Agriculture Organization (FAO), the International Plant Protection Convention (IPPC) 15

16 and the World Organisation for Animal Health (OIE) which have developed extensive work in this field. The definitions may vary for the areas of human, animal or plant life or health, but their core principles remain the same. We will briefly explain testing (which includes sampling), inspection and certification activities below. IV.A.1. TESTING Test is a procedure intended to establish the quality performance or reliability of something. It is a procedure for identifying a substance or revealing whether it is present. (Compact Oxford English Dictionary 2007). Test is defined by FAO (Food and Agriculture Organization) as an official examination other than visual to determine if pests are present or to identify pests (FAO 1990). Testing is probably the most commonly performed control procedure: it is the process of determining that a product complies with specified requirements. Testing is related to other major procedures, such as inspection and certification, and is operated by a wide range of organizations, including government agencies, academic and research institutions, commercial organizations, and industry. In a broad context, typical tests involve measurement of dimensions, chemical composition, microbiological purity, strength or other physical characteristics of materials or structures. Different procedures may be used in order to test products. For example, sampling is the process of selecting one or more specimens of a product in a statistically valid manner for the purpose of evaluating the conformity of the product with specified requirements. Another possibility is 100 per cent testing, whereby every product specimen of a batch is tested individually. In relation to food safety, the Codex Committee on Methods of Analysis and Sampling (CCMAS) has served as a coordinating body for Codex with other international groups working in methods of analysis and sampling and quality assurance systems for laboratories. The work developed by this Codex Committee resulted in the Principles for the Establishment or Selection of Codex Sampling Procedures. A number of Codex standards, such as the Recommended Methods of Analysis and Sampling, which enumerates the methods by commodities categories; the General Methods of Analysis for Contaminants and of Food Additives are relevant for testing aimed at food safety. In the field of animal health, veterinary testing plays a very important role. The OIE provides a Manual of Diagnostic Tests and Vaccines for Terrestrial Animals that contains background information for sampling methods, good laboratory practices, principles of veterinary vaccine production, and tests for sterility and freedom from contamination of biological materials. Part 2 of the Manual covers standards for diagnostic tests and vaccines for the diseases within the scope of the OIE. A similar manual has been elaborated with respect to diseases of aquatic animals (Manual of Diagnostic Tests for Aquatic Animals). For plant health, the IPPC Guidelines for a Phytosanitary Import Regulatory System (ISPM 20) recognize that testing, including laboratory testing, may be required for purposes of verification of a declared product; for checking compliance with requirements concerning infestations not detectable by inspection and for identifying latent infections; for audit or monitoring; among other purposes. Another standard, Methodologies for Sampling of Consignments (ISPM 31), provides guidance for sampling for the purposes of inspection or testing. Other standards, including ISPM 27 on Diagnostic Protocols for Regulated Pests contain relevant guidance as well. 16

17 IV.A.2. INSPECTION Inspection is the examination of a product or a system for control of a product, raw materials, processing, and distribution including in-process and/or finished product testing, in order to verify conformity with requirements (adapted from the Codex Principles for Food Import and Export Inspection and Certification CAC/GL hereinafter the "Codex Principles"). As provided by the Codex Principles, inspection should be carried out at the most appropriate stages. Inspection of food, for example, may occur at any stage in the production and distribution process. For some foods, inspection oversight of harvesting, processing, storage, transport, and other handling of the product may be the most appropriate means to ensuring food safety. For others, it may be inspection of the final products. In the field of plant health, the IPPC has adopted the Guidelines for Inspection (ISPM 23), which provide procedures for the inspection of consignments of plants, plant products and other regulated articles at import and export. The inspection should focus on the determination of compliance with phytosanitary requirements, based on visual examination, documentary checks, and identity and integrity checks. In the field of animal health, veterinary inspection procedures may also be based on visual examination. The OIE Manual of Diagnostic Tests and Vaccines for Terrestrial Animals, mentioned above, may be useful as a guideline for veterinary inspection. Important note There may be an overlap between testing and inspection and such activities are often performed by the same organizations. However: Inspection relies mostly on visual examinations but may also involve testing, usually with simple instruments, such as scales. Inspection usually relies on the subjective judgement and experience of the inspector. Testing is generally carried out according to objective and standardized procedures by highly trained staff. IV.A.3. CERTIFICATION Certification is the procedure by which official certification bodies or officially recognized certification bodies provide written or equivalent assurance that a product or a product control system (or a process) conform to specified requirements (adapted from the Codex Principles). As the Codex Principles describe, certification goes beyond testing and inspection and may be, as appropriate, based on a range of inspection activities which may include continuous on-line inspection, auditing of quality assurance systems, and examination of finished products. Certification is normally based on type approval and not 100 per cent testing of every individual item. Apart from certifying product characteristics, certain certification bodies also attest to the conformity of systems. 17

18 In the field of animal health, the OIE provides for "Model International Veterinary Certificates" for live animals and products of animal origin in Part 4 of the Terrestrial Animal Health Code, which may be used as a model for certificates issued by official veterinary certification bodies worldwide. In the field of plant health, the IPPC has adopted Guidelines for Phytosanitary Certificates (ISPM 12), on the issuance of phytosanitary certificates. It provides that "phytosanitary certificates are issued to indicate that consignments of plants, plant products or other regulated articles meet specified phytosanitary import requirements and are in conformity with the certifying statement of the appropriate model certificate". In 2009, the Three Sisters each provided a document on their work in relation to Control, Inspection and Approval Procedures, including lists of relevant standards, guidelines and recommentations. These documents have the symbols G/SPS/GEN/927 for Codex, G/SPS/GEN/947 for the OIE, and G/SPS/GEN/929 for IPPC. IV.B. SPECIFIC REQUIREMENTS REGARDING CONTROL, INSPECTION AND APPROVAL PROCEDURES While implementing Article 8 and Annex C on control, inspection and approval procedures, Members have to observe the requirements contained in Annex C, paragraph 1 (a) to (i). In order to better explain these requirements, we would propose to discuss them as related to four categories: timing; transparency; information to be submitted; and non-discrimination and avoidance of unnecessary obstacles to trade. Firstly, we should note that a basic obligation of non-discrimination is prescribed in the second phrase of paragraph 1(a) of Annex C, which states: Members shall ensure, with respect to any procedure to check and ensure the fulfilment of SPS measures, that: (a) such procedures are undertaken and completed without undue delay and in no less favourable manner for imported products than for like domestic products. This obligation of national treatment should guide the overall conduct of Members in the implementation of Annex C of the SPS Agreement. Furthermore, the Panel in the GMO case provided some important rulings regarding the interpretation and implementation of Annex C(1)(a), especially on the first sentence, on undue delays. Let's examine this requirement below. 18

19 CASE STUDY: EC GMO (WT/DS291, 292 AND 293) EC - GMOS Overview European Communities Approval and Marketing of Biotech Products (WT/DS291, 292 and 293); Complaint by the United States (US) (WT/DS291), Canada (WT/DS292) and Argentina (WT/DS293); Respondent: the European Communities (EC); Third participants: Australia; Brazil; Chile; China; Chinese Taipei; Colombia; El Salvador; Honduras; Mexico; New Zealand; Norway; Paraguay; Peru; Thailand; Uruguay. Canada, Argentina and the US were third parties on each other's cases. There were several measures at issue in this dispute: (i) At the EC level, the complaining parties asserted that a moratorium applied by the EC since October 1998 on the approval of biotech products had restricted imports of agricultural and food products from the US, Canada and Argentina; (ii) at the level of member States, the US and Canada asserted that a number of EC member States maintained national marketing and import bans on biotech products even though those products had already been approved by the EC for import and marketing in the EC. Argentina presented similar claims overall. What were the arguments from the Complainants? The US, Canada and Argentina, in their respective cases, argued, among other things, that the measures were inconsistent with provisions of the SPS Agreement contained in Articles 2, 5, 7 and 8; Annex B and C. Argentina also alleged a violation of Article 10. What did the Panel say? The report of the Panel was circulated to Members on 29 September The Panel found that the European Communities applied a general de facto moratorium on the approval of biotech products between June 1999 and August 2003 (date of initiation of dispute settlement procedures) and that, by applying this moratorium, the EC had acted inconsistently with its obligations under Annex C(1)(a), first clause, and Article 8 of the SPS Agreement because the de facto moratorium led to undue delays in the completion of EC approval procedures. With regard to the EC product-specific measures, the Panel found that the European Communities had acted inconsistently with the obligations mentioned above. With regard to the EC - member States safeguard measures, the Panel found that the European Communities acted inconsistently with its obligations under Articles 5.1 and 2.2 of the SPS Agreement, because these measures were not based on risk assessments satisfying the definition of the SPS Agreement and hence could be presumed to be maintained without sufficient scientific evidence. Since we are only discussing Annex C in this section of our course, these findings of the Panel will not be analysed here. At its meeting on 21 November 2006, the DSB adopted the panel reports without appeal. 19

20 IV.B.1. REQUIREMENTS ON TIMING NO UNDUE DELAY The United States and Canada had claimed that the EC had failed to undertake and complete its approval procedures for biotech products without undue delay, as a result of the adoption and application of the general de facto moratorium on approvals. Annex C(1)(a), first clause, requires Members to ensure that approval procedures are "undertaken and completed without undue delay". The Panel in the GMO case interpreted the above terms and stated that the obligation to "undertake and complete" means that Members are required to "begin, or start, approval procedures after receiving and application for approval", and to "finish or conclude" approval procedures without undue delay, which covers all stages of approval procedures. Once an application has been received, approval procedures must be started and carried out from beginning to end, without undue delay. The Panel went on to interpret "undue delay", having come to the conclusion that the overall time for undertaking and completing the procedure, or the length of the delay, are not the most important factors, but rather if the reasons for delay are legitimate and/or justified. That is, not every delay in the undertaking or completion of approval procedures which is caused by a Member is contrary to the provisions of Annex 1(C)(a), first clause, but only those which are "undue". A delay is "undue" if it goes beyond what is warranted and consists in "an unjustifiable loss of time". Moreover, a short delay may be found to be "undue", if it is unjustifiable; and a long delay may be due if, for example, it is justified by the availability of new or additional information at a later stage in the approval procedure, which would require the requested authority to assess it further. Finally, a determination of whether a particular approval procedure has been undertaken and/or completed "without undue delay" must be made on a case-by-case basis, taking account of relevant facts and circumstances, i.e., the length of the approval procedure shall be the time reasonably needed to determine with adequate confidence the fulfilment of SPS requirements. This is the overall objective of Article 8 and Annex C. In the GMO case, the Panel found that the EC de facto moratorium on approvals was inconsistent with EC's obligations under Annex C(1)(a) and Article 8 of the SPS Agreement, as the delay was undue. Let's now analyse the other obligations contained in Annex C. IV.B.2. REQUIREMENTS ON TRANSPARENCY Paragraph 1(b) of Annex C imposes the following requirements on Members aimed at transparency of the process for the applicants: Publication (or, upon request, communication) of the standard processing period of each procedure; Prompt examination of the completeness of the application by the competent body and request of missing documents in a precise and complete manner; Expeditious transmission of precise and complete results of the procedure by the competent body; Continuation of the procedure as far as practicable even in case of deficiencies of an application, if the applicant so requests; and If requested by the applicant, timely information about the stage of the procedure. 20

21 IV.B.3. INFORMATION REQUIREMENTS There are two types of information requirements set forth in Annex C: one related to the information to be submitted by the applicant paragraph 1(c) - and one to the treatment of the information received by the Member imposing the procedure paragraph 1(d): The amount of information requested is limited to what is necessary for appropriate control, inspection and approval procedures, including for approval of the use of additives or for the establishment of tolerances for contaminants in food, beverages or feedstuffs; Confidentiality of information derived from control, inspection and approval procedures is respected in a way no less favourable than for domestic products, so that "legitimate commercial interests are protected". IV.B.4. NON-DISCRIMINATION AND AVOIDANCE OF UNNECESSARY TRADE BARRIERS The last five subparagraphs - (e) to (i) of Annex C(1) are intended to ensure that the principles of non-discrimination and avoidance of unnecessary barriers to international trade are respected in the implementation of procedures for control, inspection and approval. Therefore, a Member shall ensure that: Requirements for control, inspection and approval of individual specimens of a product are limited to what is reasonable and necessary; Fees imposed for the procedures on imported products are equitable in relation to those imposed on like domestic products or products originating in any other Member and should not be higher than the actual cost of the service; The same criteria above should be considered in the location of facilities used and the selection of samples of imported products as for domestic products so as to minimize the inconvenience to applicants, importers, exporters or their agents; When specifications of a product change, the control procedure for the modified product must be limited to what is necessary to determine whether adequate confidence exists that the product still meets the regulations concerned; and A review procedure exists for complaints concerning the operation of control regulations, so that corrective action may be taken when a complaint is justified. 21

22 IV.B.5. PRIOR APPROVAL SYSTEMS The final sentence of paragraph 1 of Annex C states that: Where an importing Member operates a system for the approval of the use of food additives or for the establishment of tolerances for contaminants in food, beverages or feedstuffs which prohibits or restricts access to its domestic markets for products based on the absence of an approval, the importing Member shall consider the use of a relevant international standard as the basis for access until a final determination is made. Prior approval systems for additives or contaminants in food are widely used by Members. These systems should also be based on an assessment of risk and the SPS Agreement encourages Members to use relevant international standards as the basis for access to their markets. IV.B.6. CONTROLS Many SPS measures are related to processes and production methods (PPMs), because it is often more effective to ensure the safety of a final product by requiring that it be produced and processed appropriately. Pursuant to paragraph 2 of Annex C: Where a sanitary or phytosanitary measure specifies control at the level of production, the Member in whose territory the production takes place shall provide the necessary assistance to facilitate such control and the work of the controlling authorities [of the Member which imports the product]. Furthermore, Members shall not be prevented from carrying out reasonable inspection within their territories (Annex C, paragraph 3). During the discussions related to the Second Review of the SPS Agreement (G/SPS/36), it was agreed that the Committee should consider the most effective way of facilitating the implementation of Article 8 and Annex C of the SPS Agreement, with a focus on those problems identified by Members, including the issue of costs related to inspection visits and conformity assessment. Members were invited to provide information on their experiences in that regard and to submit specific suggestions for consideration by the Committee. During the Third Review of the SPS Agreement (G/SPS/53), on this topic it was recommended that: Members provide information regarding their experiences in the implementation of Article 8 and Annex C. The Committee consider the most effective way of facilitating the implementation of Article 8 and Annex C of the SPS Agreement, with a focus on those problems identified by Members, based on specific suggestions for consideration by the Committee. Codex, IPPC and OIE be invited to continue to provide information on their work in this area to the SPS Committee and should also envisage to further their processes in this regard. Following this Third Review of the SPS Agreement, Members agreed to prioritize control, inspection and approval procedures (Article 8 and Annex C) and two other issues, but in practice the Committee's work 22