WORLD TRADE
ORGANIZATIONWT/DS231/R
29 May 2002
(02-2894)
Original:  English
EUROPEAN COMMUNITIES –
TRADE DESCRIPTION OF SARDINES
Report of the Panel
The report of the Panel on  European Communities — Trade Description of Sardines is being
circulated to all Members, pursuant to the DSU.  The report is being circulated as an unrestricted
document from 29 May 2002 pursuant to the Procedures for the Circulation and Derestriction of
WTO Documents (WT/L/160/Rev.1).  Members are reminded that in accordance with the DSU onlyparties to the dispute may appeal a panel report.  An appeal shall be limited to issues of law covered in
the Panel report and legal interpretations developed by the Panel.  There shall be no ex parte
communications with the Panel or Appellate Body concerning matters under consideration by the
Panel or Appellate Body.
Note by the Secretariat :  This Panel Report shall be adopted by the Dispute Settlement Body (DSB) within
60 days after the date of its circulation unless a party to the dispute decides to appeal or the DSB decides by
consensus not to adopt the report.  If the Panel Report is appealed to the Appellate Body, it shall not beconsidered for adoption by the DSB until after the completion of the appeal.  Information on the current statusof the Panel Report is available from the WTO Secretariat.WT/DS231/R
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TABLE OF CONTENTS
Page
I. INTRODUCTION ................................................................................................................. .................1
II. FACTUAL ASPECTS............................................................................................................. ...............2
A. B ASIC CHARACTERISTICS OF SARDINA PILCHARDUS  WALBAUM  AND SARDINOPS SAGAX
SAGAX ..............................................................................................................................2
B. T HE COUNCIL REGULATION (EEC) 2136/89 OF 21 J UNE 1989 LAYING DOWN COMMON
MARKETING STANDARDS FOR PRESERVED SARDINES .......................................................3
C. T HE CODEX ALIMENTARIUS COMMISSION STANDARD FOR CANNED SARDINES AND
SARDINE -TYPE PRODUCTS (CODEX STAN 94 –1981 REV.1 – 1995)..................................3
III. FINDINGS AND RECOMMENDATIONS RE QUESTED BY TH E PARTIE S..............................4
IV. ARGUMENTS OF THE PARTIES .................................................................................................... ..5
A. A LLOCATION OF THE BURDEN OF PROOF .........................................................................5
B. W HETHER THE EC REGULATION IS A TECHNICAL REGULATION ........................................7
C. A PPLICATION OF THE TBT A GREEMENT TO MEASURES ADOPTED BEFORE
1 JANUARY  1995.............................................................................................................8
D. A RTICLE 2.4 OF THE TBT AGREEMENT ...........................................................................10
1. Whether Codex Stan 94 is a relevant international standard............................................10
2. Whether Codex Stan 94 was used "as a basis" for the EC Regulation.............................13
3. Whether Codex Stan 94 is ineffective or in appropriate to fulfil the legitimate objectives
pursued by the EC Regulation..............................................................................................17
(a) Whether the EC Regulation fu lfils a legitimat e objective........................................................17
(b) Whether Codex Stan 94 is ineffective or inappropriate to fulfil the legitimate objectives
pursued by the EC Regulation..................................................................................................2 0
E. A RTICLE 2.2 OF THE TBT AGREEMENT ..........................................................................23
1. Whether the EC Regulation is "more trade restrictive th an necessary"..........................23
(a) Trade-restrictive effects ................................................................................................... ........23
(b) More trade-restrictiv e than necessary ......................................................................................2 5
2. Taking account of the risks non-fulfilment would create...................................................28
F. A RTICLE 2.1 OF THE TBT A GREEMENT AND ARTICLE III:4 OF THE GATT 1994..........28
1. The relationship between Article 2.1 of the TBT Agreement and Article III:4 of the
GATT 1994 ...................................................................................................................... .......28
2. Whether domestic products prepared from Sardina pilchardus  and imported products
prepared from Sardinops sagax  are "like" products ..........................................................29
3. Whether the prohibition to market products prepared from Sardinops sagax  under the
name "sardines" accords a less favourable treatment .......................................................31
G. J UDICIAL ECONOMY ......................................................................................................32
H. E UROPEAN COMMUNITIES ' ARGUMENT THAT PERU REFORMULATED ITS CLAIMS .........33WT/DS231/R
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V. ARGUMENTS OF THIRD PARTIES ...............................................................................................33
A. C ANADA ........................................................................................................................33
1. Introduction................................................................................................................. ...........33
2. Retroactive application of the TBT Agreement ..................................................................34
3. Article 2.4 of the TBT Agreement ........................................................................................344. Article 2.2 of the TBT Agreement ........................................................................................365. Article 2.1 of the TBT Agreement ........................................................................................38
6. Articles I:1 and III:4 of the GATT 1994 ..............................................................................39
7. Remarks on implementation .................................................................................................39
B. C HILE ............................................................................................................................39
1. Introduction................................................................................................................. ...........39
2. Retroactive application of the TBT Agreement ..................................................................40
3. Article 2.4 of the TBT Agreement ........................................................................................40
4. Article 2.2 of the TBT Agreement ........................................................................................41
C. C OLOMBIA ....................................................................................................................41
1. Introduction................................................................................................................. ...........41
2. Retroactive application of the TBT Agreement ..................................................................41
3. Article 2.4 of the TBT Agreement ........................................................................................424. Article 2.2 of the TBT Agreement ........................................................................................425. Remarks on implementation .................................................................................................42
D. E CUADOR ......................................................................................................................42
1. Introduction................................................................................................................. ...........42
2. Retroactive application of the TBT Agreement ..................................................................433. Article 2.4 of the TBT Agreement ........................................................................................434. Article 2.2 of the TBT Agreement ........................................................................................43
5. Article 2.1 of the TBT Agreement ........................................................................................44
6. Articles I:1 and III:4 of the GATT 1994 ..............................................................................447. Final remarks ................................................................................................................ .........44
E. U NITED STATES .............................................................................................................44
1. Introduction................................................................................................................. ...........44
2. Application of the TBT Agreement ......................................................................................45
3. Article 2.4 of the TBT Agreement ........................................................................................454. Article 2.2 of the TBT Agreement ........................................................................................465. Remarks on implementation .................................................................................................46
F. V ENEZUELA ..................................................................................................................46
1. Introduction................................................................................................................. ...........46
2. Remarks on the term "sardines"..........................................................................................473. Article 2.4 of the TBT Agreement ........................................................................................474. Article 2.2 of the TBT Agreement ........................................................................................48
5. Remarks on implementation .................................................................................................49WT/DS231/R
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VI. INTERIM REVIEW.............................................................................................................. ...............49
VII. FINDINGS................................................................................................................... ..........................55
A. P RODUCTS AT ISSUE ......................................................................................................55
B. M EASURE AT ISSUE .......................................................................................................56
C. T HE CODEX ALIMENTARIUS COMMISSION STANDARD FOR CANNED SARDINES AND
SARDINE -TYPE PRODUCTS (CODEX STAN 94 –1981 REV.1 – 1995)................................56
D. F INDINGS AND RECOMMENDATIONS REQUESTED BY THE PARTIES .................................57
E. G ENERAL INTERPRETATIVE ISSUES ................................................................................58
1. Rules of in terpreta tion...................................................................................................... .....58
2. Order of analysis of the claims.............................................................................................. 58
F. A PPLICABILITY OF THE TBT AGREEMENT .....................................................................60
1. Consideration of the EC Regulation as a technical regulation ..........................................60
2. Consideration of the European Communities' arguments that its Regulation does not
contain a labelling requirement and does not concern preserved Sardinops sagax .........63
(a) The European Communities' argument that its Regulation is not a technical regulation because
it deals with naming rather th an labelling of  a product............................................................63
(b) The European Communities' argument that its Regulation does not lay down mandatory
labelling requirement for products other than preserved Sardina pilchardus ..........................65
G. C ONSISTENCY OF THE EC REGULATION WITH ARTICLE 2.4 OF THE TBT AGREEMENT .....66
1. Burden of proof .............................................................................................................. ........66
2. Application of the TBT Agreement to measures adopted before 1 January 1995 ...........683. Whether Codex Stan 94 is a relevant international standard............................................69
(a) Consideration of Codex Stan 94 as a relevant interna tional sta ndard......................................69
(b) Consideration of European Communities' temporal argument and its arguments that
Codex Stan 94 is not a releva nt internationa l standard ............................................................71
(i) The European Communities' argument that the requirement to use relevant international
standards as a basis does not apply to existing technical regulations.....................................71
(ii) The European Communities' argument that the "predecessor standard" to Codex Stan 94
should have been invoked because Codex Stan 94 is not the relevant international standard as
it did not exist and its adoption was not immi nent when the EC Regulation was adopted......74
(iii) The European Communities' argument that Codex Stan 94 is not a relevant international
standard because it was not adopted by consensus .................................................................75
(iv) The European Communities' argument that Codex Stan 94 is not a relevant international
standard on the basis that Peru's interpretation would mean that the Codex Stan 94 is
invalid because there was no referral to the Committee even though there was a substantive
change ......................................................................................................................... .............76
(v) The European Communities' argument that Codex Stan 94 is not a relevant international
standard because the EC Regulation does not regulate products other than preserved  Sardina
pilchardus ............................................................................................................................... ..77
4. Whether Codex Stan 94 was used as a basis for the technical regulation.........................77
5. Whether Codex Stan 94 would be an in effective or inappropriate means for the
fulfilment of the legitima te objectives pursued....................................................................80
6. Overall conclusion with respect to Article 2.4 of the TBT Agreement..............................87WT/DS231/R
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H. C ONSIDERATION OF THE EUROPEAN COMMUNITIES ' ARGUMENT THAT PERU BROADENED
ITS CLAIMS ....................................................................................................................87
I. J UDICIAL ECONOMY ......................................................................................................89
VIII. CONCLUSIONS A ND RECOMMENDAT IONS..............................................................................90
IX. ANNEXES..................................................................................................................... ........................91
A. A NNEX 1: C OUNCIL REGULATION (EEC) 2136/89 OF 21 J UNE 1989 LAYING DOWN
COMMON MARKETING STANDARDS FOR PRESERVED SARDINES .....................................91
B. A NNEX 2: T HE CODEX ALIMENTARIUS COMMISSION STANDARD FOR CANNED SARDINES
AND SARDINE -TYPE PRODUCTS (CODEX STAN 94 –1981 REV.1 – 1995) ........................95WT/DS231/R
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I. INTRODUCTION
1.1 In a communication dated 20 March 2001, Peru requested consultations with the
European Communities pursuant to Article 4 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes ("DSU"), Article XXII of the General Agreement on Tariffs
and Trade 1994 (the "GATT 1994"), and Article 14 of the Agreement on Technical Barriers to Trade(the "TBT Agreement"), with respect to Council Regulation (EEC) No. 2136/89 (the "EC Regulation"
or "Regulation") laying down common marketing standards for preserved sardines.
1
1.2 On 31 May 2001, Peru and the European Communities held the requested consultations but
failed to reach a mutually satisfactory solution.
1.3 In a communication dated 7 June 2001,2 Peru requested the establishment of a panel to
examine the EC Regulation, with the standard terms of reference set out in Article 7 of the DSU.  Peru
made its request in accordance with Article XXIII of the GATT 1994, Articles 4 and 6 of the DSUand Article 14 of the TBT Agreement.  In its communication, Peru stated that it considered the
EC Regulation to constitute an unnecessary obstacle to international trade which is inconsistent with
Articles 2 and 12 of the TBT Agreement, Article XI:1 of the GATT 1994 and the principle of non-
discrimination under Articles I and III of the GATT 1994.
1.4 At its meeting on 24 July 2001, the Dispute Se ttlement Body ("DSB") established a panel
pursuant to Peru's request in accordance with Article 6 of the DSU.  Canada, Chile, Colombia,
Ecuador, the United States and Venezuela reserved their rights to participate in the Panel proceedings
as third parties in accordance with Article 10 of the DSU.
1.5 At the meeting of the DSB on 24 July 2001, the parties to the dispute agreed that the Panel
should have standard terms of reference provided in Article 2.1 of the DSU.  The terms of referenceof the Panel are as follows:
To examine, in the light of the relevant provisions of the covered agreements cited by
Peru in document WT/DS231/6, the matter referred to the DSB by Peru in that
document, and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.
1.6 On 31 August 2001, Peru requested the Director -General of the World Trade Organization
("WTO") to determine the composition of the Panel pursuant to paragraph 7 of Article 8 of the DSU:
If there is no agreement on the panelists within 20 days after the date of the
establishment of a panel, at the request of either party, the Director-General, in
consultation with the Chairman of the DSB and the Chairman of the relevant Council
or Committee, shall determine the composition of the panel by appointing the
panelists whom the Director-General considers most appropriate in accordance withany relevant special or additional rules or procedures of the covered agreement or
covered agreements which are at issue in the dispute, after consulting with the parties
to the dispute.  The Chairman of the DSB shall inform the Members of the
composition of the panel thus formed no later than 10 days after the date the
Chairman receives such a request.
                                                     
1 WT/DS231/1; G/L/449; G/TBT/D/22, 23 April 2001.
2 WT/DS231/6, 8 June 2001.WT/DS231/R
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1.7 On 11 September 2001, the Director-General accordingly composed the Panel as follows:
Chairperson: Ms. Margaret Liang
Members: Ms. Merit Janow
Mr. Mohan Kumar
1.8 The Panel met with the parties on 27, 28 November 2001 and 23 January 2002.  The Panel
met with the third parties on 28 November 2001.
1.9 The Panel submitted its interim report to the parties on 28 March 2002.  On 3 May 2002, the
parties requested the Panel to suspend its proceedings in accordance with Article 12.12 of the DSU
until 21 May 2002 so as to enable the parties to find a mutually satisfactory solution to the dispute.
The Panel agreed to this request.3  As the parties were unable to reach a mutually satisfactory solution
within the requested period of time, the Panel issued its final report to the parties on 22 May 2002.
II. FACTUAL ASPECTS
A. BASIC CHARACTERISTICS OF SARDINA PILCHARDUS  WALBAUM  AND SARDINOPS SAGAX  SAGAX
2.1 This dispute concerns Sardina pilchardus  Walbaum  ("Sardina pilchardus ") and
Sardinops sagax  sagax ("Sardinops sagax "), two small fish species which belong, respectively, to
genus Sardina and Sardinops of the Clupeinae  subfamily  of the Clupeidae  family; fish of the
Clupeidae  family populate almost all oceans.
2.2 Sardina pilchardus  is found mainly around the coasts of the Eastern North Atlantic, in the
Mediterranean Sea and in the Black Sea, and Sardinops sagax  is found mainly in the Eastern Pacific
along the coasts of Peru and Chile.  Despite the various morphological differences that can be
observed between them, such as those concerning the head and length, the type and number of
gillrakes or bone striae and size and weight, Sardina pilchardus  and Sardinops sagax  display similar
characteristics: they live in a coastal pelagic envir onment, form schools, engage in vertical migration,
feed on plankton and have similar breeding seasons.
2.3 The taxonomic classification of Sardina pilchardus  and Sardinops sagax  is as follows:
"Sardina pilchardus Walbaum" " Sardinops sagax  sagax"
Phylum Chordata Chordata
Subphylum Vertebrata Vertebrata
Superclass Gnathostomata Gnathostomata
Class Osteichthyes Osteichthyes
Order Clupeiformes Clupeiformes
Suborder Clupeoidei Clupeoidei
Family Clupeidae Clupeidae
Subfamily Clupeinae Clupeinae
Genus Sardina Sardinops
Species Sardina pilchardus Walbaum Sardinops sagax sagax
2.4 Both fish, as well as other species of the Clupeidae  family, are used in the preparation of
preserved and canned fish products, packed in water, oil or other suitable medium.
                                                     
3 WT/DS231/9, 8 May 2002.WT/DS231/R
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B. THE COUNCIL REGULATION (EEC) 2136/89 OF 21 J UNE 1989 LAYING DOWN COMMON
MARKETING STANDARDS FOR PRESERVED SARDINES
2.5 Council Regulation (EEC) No. 2136/89 laying down common marketing standards for
preserved sardines (the "EC Regulation") was adopted on 21 June 1989.4 The EC Regulation defines
the standards governing the marketing of preserved sardines in the European Communities.
2.6 Article 2 of the EC Regulation provides that only products prepared from fish of the species
Sardina pilchardus may be marketed as preserved sardines.  Article 2 reads as follows:
Only products meeting the following requirements may be marketed as preserved
sardines and under the trade description referred to in Article 7:
− they must be covered by CN codes 1604 13 10 and ex 1604 20 50;
− they must be prepared exclusively from the fish of the species " Sardina pilchardus
Walbaum";
− they must be pre-packaged with any appropriate covering medium in a hermetically
sealed container;
− they must be sterilized by appropriate treatment.
C. THE CODEX ALIMENTARIUS COMMISSION STANDARD FOR CANNED SARDINES AND
SARDINE -TYPE PRODUCTS (CODEX STAN 94 –1981 REV.1 – 1995)
2.7 The Codex Alimentarius Commission of the United Nations Food and Agriculture
Organization ("FAO") and the World Health Or ganisation ("WHO") (the "Codex Alimentarius
Commission") adopted in 1978 a standard ("Codex Stan 94") for canned sardines and sardine-type
products.5  Article 1 of Codex Stan 94 states that this standard applies to "canned sardines and
sardine-type products packed in water or oil or other suitable packing medium" and that it does not
apply to speciality products where fish content constitutes less than 50% m/m of the net contents of
the can.
2.8 Article 2.1 of Codex Stan 94 provides that canned sardines or sardine-type products are
prepared from fresh or frozen fish from a list of 21 species, amongst them Sardina pilchardus and
Sardinops sagax.6
2.9 Article 6 of Codex Stan 94 reads as follows:
                                                     
4 The EC Regulation in its entirety is attached as Annex 1.
5 Codex Stan 94 is attached in its entirety as Annex 2.
6 Article 2.1.1 lists the following species:
– Sardina pilchardus
– Sardinops melanostictus, S. neopilchardus, S. ocellatus, S. sagax S. caeruleus
– Sardinella aurita, S. brasiliensis, S. maderensis, S. longiceps, S. gibbosa– Clupea harengus– Sprattus sprattus– Hyperlophus vittatus– Nematalosa vlaminghi
– Etrumeus teres
– Ethmidium maculatum– Engraulis anchoita, E. mordax, E. ringens– Opisthonema oglinumWT/DS231/R
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"6. LABELLING
In addition to the provisions of the Codex General Standard for the Labelling of
Prepackaged Foods (CODEX STAN 1-1985, Rev. 3-1999) the following specific
provisions shall apply:
6.1 NAME OF THE FOOD
The name of the products shall be:
6.1.1 (i) "Sardines" (to be reserved exclusively for Sardina pilchardus
(Walbaum)); or
(ii) "X sardines" of a country, a geographic area, the species, or the
common name of the species in accordance with the law and custom of the country in
which the product is sold, and in a manner not to mislead the consumer".
III. FINDINGS AND RECOMMENDATIONS REQUESTED BY THE PARTIES
3.1 Peru makes the following requests:
(a) Peru requests the Panel to find that the measure at issue, the EC Regulation,
prohibiting the use of the term "sardines" combined with the name of the country of
origin ("Peruvian Sardines"); the geograph ical area in which the species is found
("Pacific Sardines"); the species ("Sardines — Sardinops sagax "); or the common
name of the species Sardinops sagax  customarily used in the language of the member
State of the European Communities in which the product is sold ("Peruvian Sardines"
in English or "Südamerikanische Sardinen" in German), is inconsistent with
Article 2.4 of the TBT Agreement because the European Communities did not use the
naming standard set out in paragraph 6.1.1(ii) of Codex Stan 94 as a basis for itsRegulation even though that standard would be an effective and appropriate means to
fulfil the legitimate objectives pursued by the Regulation.
(b) If the Panel were to find that the EC Regulation is consistent with Article 2.4 of the
TBT Agreement, Peru requests the Panel to find that the EC Regulation is
inconsistent with Article 2.2 of the TBT Agreement because it is more trade-restrictive than necessary to fulfil the legitimate objective of market transparency that
the European Communities claims to pursue.
(c) If the Panel were to find that the EC Regu lation is consistent with Articles 2.2 and 2.4
of the TBT Agreement, Peru requests the Panel to find that the measure is
inconsistent with Article 2.1 of the TBT Agreement because it is a technical
regulation that accords Peruvian products prepared from fish of the species
Sardinops sagax  treatment less favourable than that accorded to like European
products made from fish of the species Sardina pilchardus.
(d) If the Panel were to find that the measure at issue is consistent with the
TBT Agreement, Peru requests the Panel to find that it is inconsistent with
Article III:4 of the GATT 1994 because it is a requirement affecting the offering for
sale of imported sardines that accords Peruvian products prepared from fish of thespecies Sardinops sagax  treatment less favourable than that accorded to like
European products made from fish of the species Sardina pilchardus .WT/DS231/R
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3.2 Peru requests the Panel to recommend that th e DSB request the European Communities to
bring its measure into conformity with the TBT Agr eement.  Peru further requests the Panel to suggest
that the European Communities permit Peru, without any further delay, to market its sardines in
accordance with a naming standard consistent with the TBT Agreement.
3.3 The European Communities requests the Panel to reject Peru's claims that the EC Regulation
is inconsistent with Articles 2.4, 2.2 and 2.1 of the TBT Agreement and Article III:4 of the
GATT 1994.
IV. ARGUMENTS OF THE PARTIES
A. ALLOCATION OF THE BURDEN OF PROOF
4.1 Peru  contends that in the case of Article 2.4 of the TBT Agreement, the elements of the
prima facie  case to be presented by the complainant party include the presentation of evidence
demonstrating the existence of a technical regulation; a relevant international standard; and the failureof the European Communities to base the Regulation at issue on the international standard,
Codex Stan 94.  Peru claims that in the case of Article 2.2 of the TBT Agreement, the elements of the
prima facie  case presented by the complainant party must show evidence of the existence of a
technical regulation and of the trade-restrictive consequences of that regulation.  Peru argues that it is
then for the European Communities, as the Member  imposing the technical regulation, to justify in
terms of its own legitimate objectives the failure to base its technical regulation on the international
standard in the case of Article 2.4 of the TBT Agreement, and the need to impose a trade-restrictive
technical regulation in the case of Article 2.2 of the TBT Agreement.
4.2 Peru also submits that in allocating the evidentiary burden on the specific elements of
Articles 2.2 and 2.4 of the TBT Agreement, the provisions of Article 2.5, as well as the object andpurpose of the TBT Agreement, need to be taken into account.  In Peru's view, Article 2.5 of the
TBT Agreement reflects the fact that if a Member adversely affected by a technical regulation had to
explain and demonstrate that the deviation from an international standard is not necessary to fulfil a
legitimate objective, it would have to prove the negative, which is impossible.  Peru argues that the
terms of Article 2.5 relate to a pre-dispute settlement situation and therefore do not establish a rule forthe allocation of the burden of proof.  However, Peru considers that Article 2.5 of the TBT Agreement
does reflect a principle that also applies during the dispute settlement stage, namely the principle that
a party to a dispute cannot be asked to prove the negative.  Article 2.5 establishes not only a right for
the Members adversely affected by a technical regulation; it establishes also an important right for the
Member that has prepared, adopted or applied the regulation.  This is the right to indicate which
legitimate objective it is pursuing with a regulation challenged under Article 2.4 of the
TBT Agreement and why it could not use the relevant international standard as a basis.  This right isimportant because it means that it is that Member which may determine the policy objectives and
constraints against which a challenged regulation is evaluated.  It is important that this right be
respected also in panel proceedings.  Prior to the exercise of that right, the complainant may,
depending on the circumstances of the case, only be able to guess what the objectives and constraints
of the defendant might be.  It is only after the defendant has exercised its right that the complainant isin the position to present evidence demonstrating that the objective identified can be achieved by
using international standards as a basis.  Article 2.5 therefore distributes the "burden of explanation"
in the pre-dispute settlement situation in the same manner as the burden of proof should be distributed
during dispute settlement proceedings.  Peru concludes that it is for the European Communities to
present evidence explaining why the monopolization of the name sardines for Sardina pilchardus  is
necessary to achieve the declared objective of market transparency.
4.3 Peru subsequently argues that in light of the extensive evidence submitted by both parties and
Canada, it is no longer necessary for the Panel to decide the question of  whether there is an allocation
of the burden of proof specific to Articles 2.2 and 2.4 of the TBT Agreement.  Noting theWT/DS231/R
Page 6
Appellate Body's statement in EC — Hormones  that "a prima facie  case is one which, in the absence
of effective refutation by the defending party, requires a panel, as a matter of law, to rule in favour of
the complaining party presenting the prima facie  case", Peru argues that it established a prima facie
case of violation of Articles 2.4, 2.2 and 2.1 of the TBT Agreement.  Thus, Peru claims that whether
the burden of proof is allocated on the basis of the specific provisions and objectives of theTBT Agreement or on the basis of the generally applicable principles followed by the
Appellate Body, the result would be the same.
4.4 The European Communities  agrees with Peru that it is for the party asserting a particular
claim or a defence to prove such a claim or defence, but rejects Peru's interpretation of Article 2.5 of
the TBT Agreement. The European Communities submits that the scope of Article 2.5 is to enhance
the transparency that a central government body ha s to follow when preparing, adopting and applying
a technical regulation; therefore, Article 2.5 of the TBT Agreement is not intended, as Peru alleges, toestablish a higher threshold of explanation.
4.5 The European Communities argues that the Appellate Body in EC — Hormones  dealt with a
provision in the Agreement on the Application of Sanitary and Phytosanitary Measures (the
"SPS Agreement") that is parallel to Article 2.5 of the TBT Agreement:
Article 5.8 of the SPS Agreement does not purport to address burden of proof
problems; it does not deal with a dispute settlement situation.  To the contrary, a
Member seeking to exercise its right to receive information under Article 5.8 would,
most likely, be ina pre-dispute situation, and the information or explanation it
receives may well make it possible for that Member to proceed to dispute settlement
proceedings and to carry out the burden of proving on a prima face basis that themeasure involved is not consistent with the SPS Agreement.
4.6 The European Communities contends that the burden of proving that Article 2 of the
EC Regulation is not in conformity with paragraphs 4, 2 and 1 of Article 2 of the TBT Agreement and
with Article III:4 of GATT 1994 rest s entirely with Peru.  Accordingly, all the elements of Article 2.4
of the TBT Agreement that must be demonstrated to establish a prima facie case are: that a technical
regulation has been prepared; that "a relevant international standard" was in existence or imminent;
that the Member did not use the standard or the relevant part of it as a basis for the technical
regulation; and that the use of the standard was in effective or inappropriate for the fulfilment of the
legitimate objectives pursued.
4.7 The European Communities further argues that, according to Article 2.2 of the
TBT Agreement, Peru has to demonstrate trade-restrictive effects; identify correctly the legitimate
objectives pursued; and finally, establish that these restrictive effects are more trade-restrictive thannecessary.
4.8 With regard to Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994,
concerning which the European Communities asserts that Peru has indicated no criterion to allocate
the burden of the proof, the European Communities claims that, in line with the consolidated
WTO jurisprudence on the matter, Peru must present evidence and argument sufficient to establish apresumption that Article 2 of the EC Regulation is inconsistent with its obligations under these
Articles.  The European Communities argues that Peru must prove that (1) it is a law, regulation or
requirement affecting the internal sale, offering for sale, purchase, distribution or use; (2) the imported
and domestic products affected by it are "like"; and (3) the treatment accorded to the imported
products is less favourable.WT/DS231/R
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B. WHETHER THE EC REGULATION IS A TECHNICAL REGULATION
4.9 Peru  notes that paragraph 1 of Annex 1 of the TBT Agreement defines the term "technical
regulation" as a document which lays down product characteristics with which compliance is
mandatory and submits that the EC Regulation, acco rding to its title, lays down "common marketing
standards for preserved sardines".  Peru argues that the EC Regulation constitutes a technicalregulation within the meaning of Annex 1 of the TBT Agreement because it lays down characteristics
preserved sardines must possess if they are to be marketed under the name sardines in the
European Communities.  In particular, Peru submits that Article 2 of the EC Regulation states which
characteristics preserved sardines must possess in order to market them in the European Communities
under the name "sardines" and notes that one such characteristic is that the product in question must
be prepared from the fish of species Sardina pilchardus .  Peru also argues that the language of
Article 9 of the EC Regulation which provides that the EC Regulation "shall be binding in its entiretyand directly applicable in all Member States" makes compliance with the measure mandatory.
4.10 The European Communities  accepts that its Regulation is a technical regulation for the
purposes of the TBT Agreement and that it lays down marketing standards for preserved
Sardina pilchardus .  The European Communities submits that, in 1989, it notified the Regulation at
issue under the Tokyo Round Agreement on Technical Barriers to Trade (the"Tokyo Round Standards Code").  Referring to the Appellate Body's statement in EC — Asbestos  that
"the proper legal character of the measure at issue cannot be determined unless the measure is
examined as a whole", the European Communities, therefore does not accept that Article 2 of the
EC Regulation, taken in isolation, is a technical regulation as Peru claims.  The
European Communities argues that Article 2 can only be interpreted in the context of the entireRegulation.
4.11 The European Communities submits that its Regu lation provides that the name specified for
preserved  Sardina pilchardus  cannot be used for other products.  However, this does not mean that it
lays down mandatory labelling requirements for products other than preserved Sardina pilchardus  and
therefore it is not considered a technical regulation for preserved Sardinops sagax , preserved herrings
or any other product except Sardina pilchardus .  The system of rules concerning the labelling of
foodstuffs in the European Communities is established by Directive 2000/13/EC of the
European Parliament and of the Council of 20 March 2000 on the approximation of the laws of the
member States relating to the labelling, presentation and advertising of foodstuffs (the
"EC Directive 2000/13").
7  EC Directive 2000/13 sets out the basic framework and is designed to be
complemented by more detailed European Commun ities rules or, in their absence, more detailed
member States rules.
4.12 The European Communities further submits that Article 2 of its Regulation is not a technical
regulation because the definition of a technical regulation in the TBT Agreement refers only to
labelling, not naming.  The names of the products of interest to Peru and the third parties are set out in
various measures of the member States of the European Communities which have not been identified
by Peru.  It is EC Directive 2000/13, in conjuncti on with the various measures of the member States
of the European Communities that constitute the technical regulation for the products identified by
Peru and the third parties.
4.13 In response to the European Communities' arguments, Peru  claims that it considers the whole
of the EC Regulation to be a technical regulation because it lays down the characteristics of the
product that may be marketed as preserved sardines.  Peru, however, argues that it is only challengingin this dispute the WTO-consistency of the requirement set out in Article 2 of the EC Regulation
which reserves the use of the term "sardines" exclusively for Sardina pilchardus .  Peru argues that the
                                                     
7 OJ L 109 of 6.5.2000, pp. 29-42.WT/DS231/R
Page 8
other elements contained in the EC Regulation are nevertheless relevant in determining whether this
requirement is consistent with Articles 2.1, 2.2 and 2.4 of the TBT Agreement.
4.14 In respect of the European Communities' argument that the Regulation at issue is not a
technical regulation for preserved Sardinops sagax  or any other product except preserved
Sardina pilchardus , Peru argues that it never claimed that the EC Regulation indicates the name under
which Sardinops sagax  must be marketed and that it is not challenging the European Communities'
regulations governing the naming of products made from Sardina pilchardus .  Peru argues, on the
contrary, that it is challenging the prohibition of the use of the word "sardines" as a trade name for
Sardinops sagax .
4.15 Peru explains that the reason for initially re ferring to the EC Regulation as a labelling
requirement8 is based on the fact that paragraph 6 of the Codex Standard for Canned Sardines and
Sardine-Type Products is entitled "LABELLING" a nd sub-paragraph 6.1 is entitled "NAME OF THE
FOOD".  Peru argues that for the drafters of the Codex standard, the rule on the naming of sardines
constituted a labelling requirement and Peru therefore considered it appropriate to describe the
EC Regulation as a labelling requirement.  Peru further submits that EC Directive 2000/13, to which
the European Communities refers to in its arguments, unlike the Codex Stan 94, makes a distinction
between rules setting out which characteristics must be indicated on the packages in which foodstuffsare sold (labelling requirements) and rules prescribing the name under which a product must be sold
(naming requirement).  Peru argues that Article 2 of the EC Regulation neither states which
characteristics must be indicated on the packages containing products made from  Sardinops sagax
nor  prescribes the name under which such products must be sold.  According to Peru, the prohibition
on the use of the term "sardines" in the trade description of products made from Sardinops sagax
therefore appears to be neither a labelling requirement nor a naming requirement within the meaning
of EC Directive 2000/13.
4.16 Peru claims that the European Communities' argument that Article 2 of its Regulation is not
covered by the TBT Agreement because the definition of a technical regulation refers only to labelling
but not to naming is incorrect.  Peru, however, claims that whether the EC Regulation should becalled a "labelling" requirement, a "naming" requirement or simply a "terminology" requirement is a
question that the Panel need not address.  Peru argues that a technical regulation covers any
"document which lays down product characteristics" and the EC Regulation is indisputably part of
such a document. Peru concludes that the prohibiti on of the use of the term "sardines" in the trade
name for products that do not conform to the product characteristics set out in the EC Regulation
comes within the ambit of the definition of technical regulations.
C. A
PPLICATION OF THE TBT A GREEMENT TO MEASURES ADOPTED BEFORE 1 JANUARY 1995
4.17 The European Communities  argues that Article 2.4 of the TBT Agreement is not applicable
to measures that were drawn up before its entry into force.  Article 2.4 of the TBT Agreement requires
WTO Members to use existing relevant international standards as a basis for drawing up their
technical regulations when they decide that thes e are required.  The European Communities therefore
submits that the obligation exists prior to the adoption of the measure, not afterwards.
4.18 The European Communities argues that the language of Article 2.4 of the TBT Agreement
makes clear that it does not apply to the existence or maintenance  of technical regulations.  In support
of this argument, it submits that Article 2.4 is different from the provision of the SPS Agreement
considered by the Appellate Body in EC — Hormones .  According to the European Communities, in
                                                     
8 Peru initially argues that the EC Regulation constitutes a technical regulation in the form of a
labelling requirement.  Subsequently, in response to a question posed by the Panel, Peru states that "at issue inthis dispute is not a labelling requirement per se  but a technical regulation laying down the characteristics of the
products that may be marketed as preserved sardines".WT/DS231/R
Page 9
that case, the Appellate Body based its view on the wording of Articles 2.2, 3.3 and 5.6 of the SPS
Agreement, all of which include the word "maint ain" and is absent from Article 2.4 of the
TBT Agreement .
4.19 The European Communities argues that Article 2.4 of the TBT Agreement , by its clear terms,
only applies to the preparation and adoption of technical regulations.  It argues that the preparation
and adoption of the Regulation, in contrast to its maintenance, are "acts or facts which took place, or
situations which ceased to exist, before the date of [the] entry into force" of the TBT Agreement
within the meaning of Article 28 of the Vienna Convention on the Law of Treaties (the"Vienna Convention"), entitled "Non-Retroactivity of Treaties".
9
4.20 The European Communities further argues that it is only possible to use relevant international
standards as a basis for the technical regulation when the technical regulation is being drafted or when
it is amended.  However, this particular question is not before the Panel because the EC Regulationhas not been amended.  In its view, the question is whether Members are under an obligation after the
WTO Agreement entered into force to revise their existing technical regulations to ensure that they
could be considered to have used international standards "as a basis".  It is clear from the text of
Article 2.4 of the TBT Agreement, especially the words "where technical regulations are required",
that such an obligation has not been created by Article 2.4.
4.21 With regard to Article XVI:4 of the Marrakesh Agreement Establishing the WTO (the
"WTO Agreement"), the European Communities argues that this provision creates an obligation to
ensure that WTO obligations are complied with, but the precise scope of the obligations depends on
the language of each specific provision under the covered agreements.  In the European Communities'
view, Article XVI:4 does not render WTO obligations applicable to acts performed before the entryinto force of the WTO Agreement where this does not result from the terms of the provision itself.
The European Communities argues that there must be an obligation somewhere in the covered
agreements before Article XVI:4 can have ef fect and the wording of Article 2.4 of the
TBT Agreement makes clear that there is no obligation to revise existing technical regulations to
bring them into conformity with international standards.
4.22 Peru  submits that Article 2.4 of the TBT Agreement does not oblige WTO Members to use
international standards as a basis for drawing up th eir technical regulations when Members decide that
these are required but "where technical regulations are required".  Accordingly, Peru argues that
Article 2.4 applies to situations in which technical regulations are required and not merely at the time
when the decision to adopt them is taken.  In Peru's view, an international standard can be "used" both
in drafting a new technical regulation and in amending an existing regulation.  Therefore, Peru
contends that the temporal element the European Communities claims to see in the wording ofArticle 2.4 of the TBT Agreement simply does not exist.
4.23 Peru contends that the European Communities' argument cannot be reconciled with the
principle of non-retroactivity of treaties enshrined in Article 28 of the Vienna Convention.  Peru
points out that, in the instant case, both the international standard and the EC Regulation continued to
exist after the entry into force of the TBT Agreement.  Accordingly, Peru claims that the
European Communities has been, since 1 January 1995, under the obligation to use Codex Stan 94 as
a basis for its Regulation.  Moreover, Peru submits that the European Communities’ argument has no
basis in fact because the naming standard incorporated in Codex Stan 94 did exist when the
European Communities adopted the Regulation at issue.  Peru notes that the current version of this
standard was adopted in 1978, 11 years prior to the adoption of the EC Regulation in 1989.
                                                     
9 Article 28 reads as follows:
Unless a different intention appears from the treaty or is otherwise established, its provisionsdo not bind a party in relation to any act or fact which took place or any situation whichceased to exist before the date of the entry into force of the treaty with respect to that party.WT/DS231/R
Page 10
4.24 Peru further  submits that the text of Article 2.4 of the TBT Agreement does not distinguish
between regulations adopted after the standard was prepared and regulations adopted before the
standard was prepared.  Peru argues that the European Communities’ proposition cannot be reconciled
with Article XVI:4 of the WTO Agreement, according to which "each Member shall ensure the
conformity of its laws, regulations and administrative procedures with its obligations as provided forin the annexed Agreements".
4.25 Furthermore, Peru recalls that the Appellate Body rejected a similar claim by the
European Communities in EC — Hormones  where it stated that "if the negotiators had wanted to
exempt the very large group of SPS measures in existence on 1 January 1995 … it appears reasonable
to us to expect that they would have said so ex plicitly".  Peru concludes that given the general
principle enshrined in Article XVI:4 of the WTO Agreement, existing legislation can be deemed to be
exempted from WTO law only if a provision in one of the agreements annexed to theWTO Agreement specifically provides for such an exemption; however there is no such exemption in
the TBT Agreement.
D. A
RTICLE 2.4 OF THE TBT AGREEMENT
1. Whether Codex Stan 94 is a relevant international standard
4.26 Peru  argues that Codex Stan 94 is a relevant international standard.  Peru argues that the
Codex Alimentarius Commission, established by the FAO and WHO, is an internationally recognized
standard setting body that develops standards for food products. The Codex Alimentarius contains
more than 200 standards for foods or groups of foods, of which 28 are standards for fish and fishery
products; these standards are an internationally agreed reference point for consumers, food producers
and processors, national food control agencies and the international food trade.
4.27 Referring to Canada's third party submission, Peru agrees with Canada's statement that:
The Codex Standard is an "international standard".  The TBT Agreement defines
"standard" but not "international standard".  A standard is defined in Annex 1 as a:
Document approved by a recognized body, that provides, for
common and repeated use, rules, guidelines or characteristics forproducts or related processes and production methods, with which
compliance is not mandatory.
The Codex Commission is an internationally recognized standard setting body. Codex
standards are the internationally agreed global reference point for consumers, food
producers and processors, national food control agencies and the international food
trade.  The Codex Standard in issue is not mandatory.
4.28 Peru argues that Codex Stan 94 is not only an international standard but is also a relevant
international standard and that Members are obliged to use relevant international standards as a basis
for their technical regulations.  Peru notes that the Codex Stan 94, a standard for canned sardines and
sardine-type products, was adopted by the Codex Alimentarius Commission in 1978 and revised in
1995. Peru submits that the products to which Codex Stan 94 applies are sardines and sardine-type
products that are prepared from fresh or frozen fish of 21 different species, includingSardina pilchardus  and Sardinops sagax .  Peru further notes that paragraph 6.1.1 of Codex Stan 94
states:
The name of the product shall be:
6.1.1 (i) "Sardines" (to be reserved exclusively for Sardina pilchardus
(Walbaum));  orWT/DS231/R
Page 11
(ii) "X sardines" of a country, a geographic area, the species, or the
common name of the species in accordance with the law and custom of the country in
which the product is sold, and in a manner not to mislead the consumer.
4.29 The European Communities  does not contest the status of the Codex Alimentarius
Commission as an international standardizing body for the purposes of the TBT Agreement.  It is alsoof the opinion that only standards of international bodies with international treaty status that respect
the same principles of membership and due process that form the basis for WTO membership should
be recognized as international standards.
4.30 The European Communities makes the general observation that Codex Stan 94 contains
20 "sardine-type" species belonging to 11 genera.  The underlying rationale for including these
20 species in the list is not apparent as it includes very different species; it is not the fact that they are
from a same family, as some of these genera belong to a family other than Clupeidae , e.g.,
Engaulis  anchoita , E. mordax  and E. ringens  (anchovies) which belong to the family Engraulidae .
The European Communities notes that the common na me for some of these species are not sardines
and that other species that are called "sardines" in other parts of the world are not included in
Codex Stan 94.  In its view, the objection of Codex members to include Clupea bentinckti  at the
24
th Session of the Codex Alimentarius Commission illustrates the concern that the list set out in
Codex Stan 94 would end up including all Clupeidae , and potentially Engraulidae , species.  The
consequence would be that the Codex standard would include so many "sardine-type" species that it
would be more misleading than informative for the co nsumer.  To illustrate the difficulties involved in
determining the coverage of the species under Codex Stan 94, the European Communities refers to the
fact that Peru is exporting Sardinops sagax  to more than 20 countries under the trade description of
"sardines" rather than "Pacific sardines" even though Codex Stan 94 does not permit  Sardinops sagax
to be called "sardines" without any qualification.
4.31 The European Communities claims that Codex Stan 94 cannot be considered a relevant
international standard.  The obligation contained in Article 2.4 is to use relevant international
standards, where they exist or their completion is imminent , as a basis for the technical regulation.
However, the European Communities claims that Codex Stan 94 is not a relevant international
standard within the meaning of Article 2.4 of the TBT Agreement because it did not exist and its
adoption was not "imminent" when the EC Regulation was adopted.
4.32 The European Communities further argues that there is no obligation to have used a draft
international standard as a basis for a technical regulation if its adoption was not "imminent";
therefore, it cannot have been intended that an already existing technical regulation could become
inconsistent with Article 2.4 of the TBT Agreement when the adoption of the draft internationalstandard becomes "imminent" or when it is actually adopted and becomes "existing".  The
European Communities submits that Peru would have had to invoke non-conformity with the
predecessor standard in order to make its case and it has not done so.  In any case, the
European Communities points out that it did comply with the requirements of the
Tokyo Round Standards Code when it adopted its Regulation and notified it to the GATT.  In itsview, it is obvious that a 1994 standard cannot be a "relevant standard" for a Regulation adopted in
1989.
4.33 According to the European Communities, another reason for not considering Codex Stan 94
as a relevant international standard is that it was not adopted in accordance with the principle of
consensus set out by the TBT Committee in the D ecision of the Committee on Principles for the
Development of the International Standards, Guides and Recommendations with Relation to
Articles 2, 5 and Annex 3 of the Agreement (the "Decision").  In support of its claim, the
European Communities submits the following:  (a) Ac cording to Rule VI:2 of the Rules of Procedure
of the Codex Alimentarius Commission, decisions can be taken by a majority of the votes cast;  even
if it is not recorded whether Codex Stan 94 was elaborated and adopted by means of a formal vote, itWT/DS231/R
Page 12
is clear that it was adopted in circumstances in which dissenting members could have been outvoted
and, therefore, may have decided not to express their disagreement, i.e., by not insisting on a vote.
This is especially so, since the General Principles of the Codex Alimentarius make clear that
Codex standards are recommendations that need to be accepted by governments and that their
acceptance can be unconditional, conditional or with deviations.  (b) Codex Stan 94 has been acceptedby only 18 countries, of which only four accepted it fully.  None of the member States of the
European Communities, or Peru, has accepted the standard.  (c) The available records of the
discussions relating to Codex Stan 94 demonstr ate that Members held diverging views on the
appropriate names for preserved sardines and sardine-type products.
4.34 With regard to the elaboration procedure of Codex Stan 94, the European Communities
submits that an editorial change, and not a substantive change, was made at step 8 of the procedure.  If
a substantive amendment had been made at this stage, it would have been necessary to refer the textback to the relevant committee for comments before  its adoption.  However, if a substantive change
had nevertheless been made at step 8 of the Codex elaboration procedure, the European Communities
claims that Codex Stan 94 would, in this case, be rendered invalid and could not, therefore, be
considered a relevant international standard within the meaning of Article 2.4 of the TBT Agreement.
4.35 Finally, European Communities contends that paragraph 6.1.1(ii) of Codex Stan 94 is not
"relevant" for the EC Regulation since the EC Regulation does not regulate products other than
preserved Sardina Pilchardus, and the relevant part of Codex Stan 94 for the name of this product is
paragraph 6.1.1(i).
4.36 Peru  notes Canada's argument that Codex Stan 94 meets the principles and procedures set out
by the TBT Committee in the Decision.  Peru agrees with Canada's argument that Codex Stan 94 wasdeveloped in a manner consistent with the principles of the Decision, including the resort to the
multilateral consensus based approach in establishing the relevant international standard.
4.37 However, Peru claims that the issue of whether or not Codex Stan 94 was in effect adopted by
consensus is not an issue that the Panel needs to decide and that the Decision is not a covered
agreement for the purposes of the DSU.  Peru argues that the Decision is not an authoritativeinterpretation of the TBT Agreement.  In Peru's view, the Decision merely articulates principles and
procedures which, in the view of the TBT Committee, should be followed in developing international
standards.  Peru asserts that it does not define the term "international standard" in Article 2.4 of the
TBT Agreement.
4.38 In addition, Peru submits that it is clear from  the relevant report of the Codex Alimentarius
Commission that Codex Stan 94 was adopted without a vote and that it can reasonably be assumed
that when the TBT Committee used the term "consensus" it referred to a decision-making processsimilar to the one stipulated in the WTO Agreement where Article IX:1 states that "where a decision
cannot be arrived at by consensus, the matter at issue shall be decided by voting".  Therefore, the
issue is whether the procedures and practices of the decision-making by consensus followed by the
Codex Alimentarius Commission resemble those followed by the WTO.
4.39 For the above reasons, Peru considers that there can be no doubt that Codex standards are
adopted in accordance with the principle of consensus as it is understood in the WTO.  Furthermore,
Peru recalls that in the TBT Committee, the European Communities stated that only the standards of
international bodies with international treaty status  that respect the same principles of membership
and due process that form the basis for WTO membership should be recognized as international
standards in the WTO context.  According to Pe ru, the European Communities also stated in the
TBT Committee that the Codex Alimentarius Commission could therefore be considered asWT/DS231/R
Page 13
developing international standards with in the meaning of the TBT Agreement.10  Hence, Peru
maintains that the European Communities' argument  presented in this dispute cannot be reconciled
with the position taken in the TBT Committee.  Peru  also submits that it is perfectly normal that
international standards are adopted after a reconciliation of divergent views, otherwise there would
probably be no Codex standard that could be considered to have been adopted by consensus.
4.40 In response to a question posed by the Panel in relation to the meaning of the explanatory note
contained in Annex 1 of the TBT Agreement which reads "[t]his Agreement covers also documents
that are not based on consensus", Peru argues that "relevant international standards" within the
meaning of Article 2.4 of the TBT Agreement include standards that were not adopted by consensus.
4.41 Finally, Peru disputes the European Communities’ argument that Codex Stan 94 is not a
relevant international standard because the Codex Alimentarius Commission would have violated its
procedural rules according to which substantive changes to proposed standards can only be madeunder certain circumstances.  Peru is of the view that it is for the members of the Codex Alimentarius
Commission to examine whether the procedural requirements for the adoption of standards have been
observed and, if necessary, to request corrective action in accordance with the rules and procedures of
the Commission.  Peru claims that the Panel is  not competent to make findings on such issues.
2. Whether Codex Stan 94 was used "as a basis" for the EC Regulation
4.42 Peru argues that Article 2.4 of the TBT Agreement requires Members to use international
standards as a basis for their technical regulations except when they are an ineffective or inappropriate
means for the fulfilment of their objectives.  Peru notes that the ordinary meaning of the word "basis"
is "foundation", "main constituent" or "a determining principle".  Peru argues that "shall use as a
basis" therefore means "shall use as a foundation, main constituent or determining principle".
4.43 Peru claims that a measure would be consistent with paragraph 6.1.1(i) if it requires the term
"sardines", when used without any qualification, be reserved for Sardina pilchardus .  However, Peru
contends that all other species referred to in Codex Stan 94 may be marketed, pursuant to sub-
paragraph (ii), as "X sardines" where "X" is either a country, a geographic area, the species or the
common name of the species.  According to Peru, its sardines should therefore be marketable as"Peruvian sardines", "Pacific sardines", or just "s ardines" combined with the name of the species or
the common name in the European Communities' member State in which the sardines are sold, such
as "Südamerikanische Sardinen" in Germany.  Peru c ontends that in each of the four alternatives set
out in this labelling standard, the term "sardines" is part of the trade description and a total prohibition
on the use of the term "sardines" in the labelling of canned sardines is not foreseen.
4.44 Peru argues that it is therefore inconsistent with sub-paragraph (ii) of paragraph 6.1.1 of
Codex Stan 94 if sardines of the species Sardinops sagax  may not be marketed under the name
"sardines" qualified by the name of a country, name of a geographic area of origin, name of the
species or the common name.  Peru argues that the EC Regulation could only be deemed consistent
with Article 2.4 of the TBT Agreement if it had used Codex Stan 94 as a main ingredient, foundation
or determining principle in formulating its labellin g regulation.  Peru claims that no element of the
standard contained in paragraph 6.1.1(ii) of Codex Stan 94 is reflected in the EC Regulation.  Peruconcludes that the EC Regulation is not based on the Codex Stan 94, the relevant international
standard, and is therefore inconsistent with Article 2.4 of the TBT Agreement.
4.45 The European Communities argues that, under paragraph 6.1.1(ii) of Codex Stan 94, each
country has the option of choosing between "X sardines" and the common name of the species.  It
argues that "the common name of the species in accordance with the law and customs of the country
                                                     
10 Committee on Technical Barriers to Trade, Minutes of the Meeting Held on 21 July 2000,
G/TBT/M/20, para. 90.WT/DS231/R
Page 14
in which the product is sold" is intended to be a self-standing option independent of the formula
"X sardines" and that this interpretation is evidenced by the fact that the phrase "the common name of
the species in accordance with the law and customs of the country in which the product is sold" is
found between commas; there is no comma between "s pecies" and "in accordance with"; and there is
a comma before "and in a manner not to mislead the consumer".  The European Communities is of theview that the French 
11 and Spanish12 versions of Codex Stan 94 make it clear that there is no choice
to be made but that there is an express indication that, irrespective of the formula used, it should be in
accordance with the law and custom of the importing country and in a way that does not mislead the
consumer.
4.46 It is the European Communities' view that under paragraph 6.1.1(ii) of Codex Stan 94,
importing Members can choose between "X sardines" or the common name of the species. The fact
that the name for products other than Sardina pilchardus  could not be harmonized and had to defer to
each country is reflected in the language "in accordance with the law and customs of the country in
which the product is sold".  The European Comm unities notes that there is an additional element
contained in Codex Stan 94 that is not applicable to Sardina pilchardus  but applicable to other
species, namely that the trade description of the latter group of species must not mislead the consumer
in the country in which the product is sold.
4.47 The European Communities argues that the use of the word "sardines" for products other than
preserved Sardina pilchardus  would not be in accordance with the law and customs of the member
States of the European Communities and would mislead the European consumers.  The term
"sardines" has historically been known as referring to Sardina pilchardus .  In light of the confusion
created by sales of other species, such as sprats as "brisling sardines", the European Communities has
constantly attempted to clarify the situation.  There is now a uniform consumer expectation
throughout the European Communities that the term "sardines" refers only to preserved
Sardina pilchardus .  The names for preserved Sardinops sagax  that are in accordance with the law
and custom of the United Kingdom and Germany are Pacific pilchard and Sardinops or pilchard,
respectively.  Based on these reasons, the European Communities argues that Article 2 of itsRegulation follows the guidance provided by Codex Stan 94.
4.48 In support of its interpretation that Codex Stan 94 allows Members to choose between
"X sardines" and the common name of the species in accordance with the law and custom the country
in which the product is sold, the European Communities refers to the negotiating history of
Codex Stan 94, where the text of paragraph 6.1.1 submitted to the Codex Alimentarius Commission
by the technical Committee was divided into three paragraphs, with "the common name of the
species" being a third and separate option, and also with the phrase "in accordance with the law andcustom of the country in which the product is sold, and in a manner not to mislead the consumer"
separate from the three paragraphs.
13  The European Communities also argues that the minutes of the
meeting of the Codex Alimentarius Commission at which Codex Stan 94 was definitively adopted
show that the text of paragraph 6.1.1, prepared and discussed in steps 1 to 7 of the elaboration
                                                     
11 The French text reads:  6.1.1 (ii) "Sardines X", "X" désignant un pays, une zone géographique,
l'espèce ou le nom commun de l'espèce en conformité des lois et usages du pays où le produit est vendu, demanière à ne pas induire le consommateur en erreur.
12 The Spanish text reads:  6.1.1(ii)  "Sardina X" de un país o una zona geográfica, con indicación de la
especie o el nombre común de la misma, en conformida d con la legislación y la costumbre del país en que se
venda el producto, expresado de manera que no induzca a engaño al consumidor.
13 The text of paragraph 6.1.1 submitted to the Commission by the technical Committee reads:
The name of the product shall be:(i) "Sardines" (to be reserved exclusiv ely for Sardina pilchardus (Walbaum)); or
(ii) "X sardines", where "X" is the name of a country, a geographic area, or the species; or
(iii) the common name of the species;in accordance with the law and custom of the country in which the product is sold, and in amanner not to mislead the consumer.WT/DS231/R
Page 15
procedure, was amended editorially at the meeting.  It recalls that this change is described in the
minutes as "editorial"; thus, for the reasons explained in paragraph 4.34 above, the European
Communities claims that it was not intended to change the substance of the provision but to reconcile
the fact that the word "sardines" by itself was reserved exclusively for Sardina pilchardus  with the
last paragraph requiring that any name must be in accordance with the law and custom of the countryin which the product is sold.  For this reason, the European Communities concludes that the text as
proposed to the Codex Alimentarius Commission is a good guide to the intended meaning of the
standard.
4.49 The European Communities contends that the Vienna Convention  is not applicable to the
interpretation of Codex standards.  The relatively low importance attached to preparatory documents
under the Vienna Convention  is due to the fact that treaties are legal texts which are considered and
adopted by formal ratification procedures and preparatory documents are not.  TheEuropean Communities is of the opinion that this rationale does not apply to Codex standards and
suggests that if the Panel has any doubt on the interpretation of paragraph 6.1.1(ii) of the Codex Stan
94, the Panel should ask the Codex Alimentarius Co mmission to provide its view of the meaning of
this text.
4.50 The European Communities argues that even if Peru's interpretation were valid in that the
term "sardines" must be used with a qualification for species other than Sardina pilchardus ,
Article 2.4 of the TBT Agreement would still not require that such name be used.  The
European Communities contends that Article 2.4 requires a relevant international standard to be used
as a basis for the technical regulation and claims that Article 2.4 requires WTO Members to use an
existing relevant international standard as a basis for  drawing up their technical regulations when they
decide that these are required and not as the basis for the technical regulation.  Article 2.4 does not
require Members to follow these standards or comply with them.  Furthermore, the
European Communities argues that Article 2.4 expressly states that a Member may only use the
relevant parts  of the international standard — that is the parts that are related to the objective pursued
by the required technical regulation.
4.51 The European Communities  recalls that the Appellate Body has already ruled, in the context
of the SPS Agreement,  that "based on" cannot be interpreted as meaning "conform to" and therefore
reversed a panel ruling that was based on such an interpretation and that found that a
European Communities' measure was not "based on" a Codex standard because it did not conform to
it.  The Appellate Body reasoned in particular that "specific and compelling language" would be
needed to demonstrate that sovereign countries had intended to vest Codex standards, which were
"recommendatory in form and language", wi th obligatory force.  According to the
European Communities, there is no such intention expressed in Article 2.4 of the TBT Agreement.  In
fact, the text of this provision indicates an even weaker requirement to take a standard into account
than was the case with the SPS Agreement.
4.52 Therefore, the European Communities claims that it has "complied with" the text of the
Codex Stan 94, because Article 2 of the EC Regulation follows the guidance it provided.  Article 2.4of the TBT Agreement allows WTO Members flexibility and requiring preserved sardine-type
products to use the names under which they are known in the European Communities' member States
falls within this margin of flexibility.
4.53 Peru  disagrees with the European Communities' interpretation of paragraph 6.1.1(ii) of the
Codex Stan 94.  Peru is of the view that this prov ision clearly states that the name of the sardines
other than  Sardina pilchardus shall be "X sardines".  Peru argues that both sub-paragraphs of
paragraph 6.1.1 indicate the name to be given to sardines in inverted commas.  Peru contends that it
would therefore not be valid to conclude from the comma before the words "or the common name of
the species" that "X" does not apply to this alternative.WT/DS231/R
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4.54 Peru argues that the official languages of the FAO and WHO are English, French and Spanish
and that the French text makes it absolutely clear that the Codex Stan 94 was not meant to permit
countries to choose between "X Sardines" and the common name of the species.  Translated word for
word, Peru states that the French text would read in English: "'X sardines', 'X' designating a country, a
geographic area, the species or the common name of the species".  Peru claims that the French textthus leaves no doubt that the common name is not an option separate from the "X Sardines" option
but is one of the four designators defined by "X".  According to Peru, the Spanish text is also clear on
this point;  translated word for word, the Spanish text would read in English: "Sardines X" from a
country or a geographic area, with an indication of the species or the common name of the species.
Peru asserts that the Spanish text thus clarifies that the drafters of the Codex Stan 94 meant to create
the option of adding the common name to the word "sardines", not the option of replacing the word
"sardines" with a common name.
4.55 Contrary to the assertion of the European Communities, Peru argues that the drafting history
of the Codex Stan 94 confirms that its final version was not meant to give countries the choice
between "X Sardines" and the common name of the species.  Concerning the separate third option of
the text as submitted to the Codex Alimentarius Commission, Peru argues that this option was
explicitly deleted at the session during which the current standard was adopted.  This thereforeconfirms the drafters' intention.
4.56 With reference to the European Communities' argument that the change in draft was editorial
in nature, Peru submits that since the drafters of the final version of Codex Stan 94 described the
change from the earlier version as "editorial", rather than substantive, they were obviously of the view
that the earlier version had already expressed what they intended to state in the final version, albeitimperfectly.  Peru submits that the reference to th e editorial nature of the change therefore clearly
implies that, in the view of the drafters, both versions were meant to express the same idea but that the
final version expressed it more clearly. The European Communities' suggestion that the Panel rely on
the earlier version as a better expression of the meaning of the final version therefore lacks a logical
basis.
4.57 Peru recalls that according to Article 32 of the Vienna Convention, the meaning of a treaty
may be determined by having recourse to the preparatory work if, and only if, an interpretation based
on the text leaves the meaning ambiguous or obscure or leads to a result which is manifestly absurd or
unreasonable.  Peru argues that wh ile Article 32 of the Vienna Convention is not directly applicable to
Codex standards because they are not treaties, the basic legal principle reflected in this provision is
nevertheless relevant to the interpretation of those standards as well.  Peru argues that Governments
must be able to rely on the Codex standards as drafted.  Only if their meaning is ambiguous orobscure or leads to a result which is manifestly absurd or unreasonable, can they be expected to have
recourse to supplementary means of interpretation.  According to Peru, Codex standards could simply
not fulfil their function if governments always had to examine their drafting history in order to
determine their meaning.  Peru therefore argues that the reference to "international standards" in
Article 2.4 of the TBT Agreement can therefore only be understood to be a reference to thosestandards as drafted, except in the situations referred to in Article 32 of the Vienna Convention.
4.58 Peru contends that the terms "in accordance with the law and custom" qualify the immediately
preceding terms "of a country, a geographic area, the species, or the common name of the species".
This means that selection of the country, area, species or common name may be made in accordance
with the domestic law and custom.  However, there is nothing in the wording of paragraph 6.1.1(ii) tosuggest that the whole of the standard set out in this  provision applies only if, and as long as, there is
no contrary law and custom.  The provision gives four options as to the designator (the "X") with
which the term "sardines" may be combined (country, area, species, common name) and leaves it to
each country to choose among those options in accordance with its laws and customs.  Peru argues
that there is no logic in the European Communities’ claim that, because it may apply Codex Stan 94 inaccordance with its law and custom, it may not apply it at all.  In Peru's view, an internationallyWT/DS231/R
Page 17
agreed technical standard would be meaningless if domestic laws and customs could be invoked to
justify a deviation.  Peru argues that it would be absurd, and hence contrary to the established
principles of interpretation, to impute that intention to the drafters of paragraph 6.1.1(ii).
3. Whether Codex Stan 94 is ineffective or ina ppropriate to fulfil the legitimate objectives
pursued by the EC Regulation
(a) Whether the EC Regulation fulfils a legitimate objective
4.59 Peru  submits that the purpose of the TBT Agreement is to prevent unnecessary obstacles to
international trade and to further the objectives of the GATT 1994.  Peru argues that the objectives of
creating obstacles to trade and of affording protection to domestic producers are therefore clearly not
"legitimate" objectives within the meaning of Article 2.2 of the TBT Agreement.  Beyond this, Peru
argues that the TBT Agreement contains no normative guidance as to the range of policy objectives
that WTO Members may pursue with technical regula tions.  Peru claims that the TBT Agreement is
essentially an agreement regulating how Members should pursue their policy objectives, not which
policy objectives they should pursue.
4.60 The European Communities  argues that the objectives pursued by Article 2 of the
EC Regulation are consumer protection, market transparency and fair competition and that these are
separate but interdependent objectives.  It further explains that the legitimate objectives of the entireEC Regulation are the following:  (a) to keep produ cts of unsatisfactory quality off the market;  (b) to
facilitate trade relations based on fair competition;  (c) to ensure transparency of the market;  (d) to
ensure good market presentation of the product;  and (e) to provide appropriate information to
consumers.  According to the European Communities , the first objective only relates to preserved
Sardina pilchardus .  This is pursued through the prohibition of the marketing of products of
substandard quality.  The European Communities further argues that the third objective pursues
consumer protection and the promotion of fair competition, and that the promotion of fair competition
is in the interest of consumers but also serves wider economic objectives.
4.61 The European Communities argues that all objectives of WTO Members can be presumed to
be legitimate and that this is a corollary of the principle that States must be presumed to act in goodfaith.  In its view, if the objective is legitimate, WTO Members have the right to choose the level of
protection they consider appropriate, as it is reco gnized in the preamble to the TBT Agreement.  The
European Communities also notes that the Appellate Body has confirmed that the WTO Agreements
do not restrict the right of Members to fix the level of protection for their legitimate objectives.
Quoting a passage in the preamble to the SPS Agreement similar to that in the TBT Agreement, the
European Communities notes for example that the Appellate Body in  EC — Hormones  held that:
"this right of a Member to establish its own level of sanitary protection under Article 3.3 of theSPS Agreement is an autonomous right".  The European Communities notes that the Appellate Body
made similar statements in EC — Asbestos, Korea — Various Measures on Beef , and Australia —
Salmon .
4.62 The European Communities argues that its Regu lation must be examined in the framework of
the system of rules concerning labelling of foodstuffs in the European Communities.  The objectivesof EC Directive 2000/13 are to protect consumers and prevent distortions of competition.  These
objectives are fulfilled by laying down detailed and precise requirements as to how products should be
labelled.  The European Communities points out that EC Directive 2000/13 states that labelling must
not mislead purchasers and establishes the principle that there should be a single correct name for a
given foodstuff.  The hierarchy of rules for determining the correct name for a foodstuff is: the namelaid down in European Communities legislation; the name provided for in the laws, regulations and
administrative provisions applicable in the member States in which the product is sold; the name
customary in the member State in which the product is sold; and a description of the foodstuff, and ifWT/DS231/R
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necessary, of its use which is clear enough to let the purchaser know its true nature and distinguish it
from other products with which it might be confused.
4.63 In response to a question of the Panel, the European Communities submits that Article 7(c) of
its Regulation refers to "preparations using homogenized sardine flesh" and that those products are
"pastes", "pâtés" and "mousses".  It argues that the consumers are informed about the content of theabove products because:   as stated in the first paragraph of article 7(c), "the trade description must
indicate the specific nature of the culinary preparation"; and  according to article 3.1.2 and 3.1.3 of
EC Directive 2000/13, the list of ingredients and the quantity of certain ingredients or categories of
ingredients must be indicated on the labelling.
4.64 The European Communities further submits that, according to Article 7(c) of the Regulation
at issue, a can containing at least 25% of homogenised Sardina pilchardus  flesh and the remainder
containing "the flesh of other fish which have undergone the same treatment" can be marketed as"sardine paste", "sardine pâté", or "sardine mousse" only if the content of the flesh of any other fish is
less than 25%.  The European Communities explains that Article 7(c) does not derogate from
Article 2, first indent, of the EC Regulation, which means that such a preparation must still be covered
by CN code ex 1604 20 50.  The European Communities therefore submits that according to Note 2 to
the introduction of chapter 16 of the European Communities Combined Nomenclature, in cases where"the preparation contains two or more of the products  mentioned above, it is classified within the
heading of chapter 16 corresponding to the component or components which predominate by weight".
4.65 Therefore, the European Communities submits that if the predominant weight is, for instance,
mackerel, the corresponding heading would be that corresponding to mackerel and not to
Sardina pilchardus .  The European Communities argues that such a product could not be marketed
under the trade description "sardines" but would have to be marketed under the name provided for in
the laws, regulations and administrative provisions applicable in the member State in which the
product is sold, in accordance with Directive 2000/13.  The European Communities also submits that
the term "other fish" in Article 7(c), second paragr aph, refers to any other fish species, including but
not limited to both Sardinops sagax  and any other non-sardine-type fish species.
4.66 Peru  notes that there is no disagreement with the European Communities that the objectives
that it claims to pursue with its Regulation are legitimate objectives within the meaning of both
Article 2.2 and 2.4 of the TBT Agreement.  However, Peru submits that the objective to "improve the
profitability of sardine production in the Community" as stated in the preambular part of the
EC Regulation is not a "legitimate" objective within  the meaning of the TBT Agreement.  Peru argues
that even though the TBT Agreement does not define the term "legitimate", its purpose is to further
the objectives of the GATT 1994 and to avoid restrictions on international trade disguised as technicalregulations.  Peru argues that the TBT Agreemen t regulates how Members should pursue their policy
objectives, not which policy objectives they should pursue.
4.67 Peru submits that when the European Communities notified its Regulation in 1989 to the
Parties of the Tokyo Round Standards Code, it indicated that the objective and rationale of the
EC Regulation was "consumer protection".  However, Peru observes that the EC Regulation laysdown minimum quality standards only for products made from  Sardina pilchardus .  Peru contends
that if the concerns of consumers had been at the origin of the EC Regulation, the
European Communities would not have limited its application to the species of sardines that populates
European waters but would have adopted a regulation which also covers like products made from
sardines harvested in the waters of other WTO Members.
4.68 In support of its reasoning, Peru first submits an opinion on the quality and the appropriate
commercial name of Peruvian sardines prepared by a German food inspection institute, the
Nehring Institute, and by the Federal Research Centre for Fisheries, Institute of Biochemistry and
Technology of Germany which states that "the characteristics in taste and smell [of the product madeWT/DS231/R
Page 19
from Sardinops sagax ] are very similar to the products of Clupea pilchardus  which come from
Europe and North-Africa".  Peru also submits th at according to an open letter addressed by the
Consumers’ Association to the Advisory Centre  on WTO Law, and whose facts and arguments Peru
requests to be considered as part of its submission to the Panel, the EC Regulation "does nothing to
promote the interests of European consumers".
4.69 Peru also argues that, according to Article 7(c) of the EC Regulation, fish processors could
market fish paste using the name "sardines" provided that they add flesh from  Sardina pilchardus  to
the flesh from Sardinops sagax.   Therefore Peru contends that this part of the EC Regulation promotes
the market opportunities of European sardine producers.  Peru also notes the European Communities'
argument that, in spite of the permission to use the term "sardines" for products of which up to one
half is not prepared from Sardina pilchardus , the consumer would be adequately informed because
the list of ingredients would have to indicate the quantities of each of the ingredients used.  Peru
contends that this argument cannot be reconciled with the European Communities’ claim that the use
of the term "sardines" for a product made from Sardinops sagax  must be prohibited to protect the
European consumer even if the list of ingredients indicates that it was made from Sardinops sagax .
4.70 Concerning the  objective of maintaining market transparency, Peru argues that there is no
rational connection between the objective of ensuring market transparency and the monopolization ofthe name "sardines" for fish of a species found ma inly off the coasts of the European Communities
and Morocco.  Peru claims that the effect of monopolizing the name "sardines" for one species of
sardines is that importers of Peruvian sardines are prevented from informing the European consumers
in commonly understood terms of the content of hermetically sealed containers.  As a result, market
transparency is reduced.  Peru argues that if cans with products prepared from Peruvian sardines werelabelled as "Pacific Sardines" market transparency would be ensured.
4.71 The European Communities  argues that the provisions of its Regulation laying down
minimum quality standards, harmonizing the ways in which the product may be presented and
regulating the indications to be contained on the label, all serve to facilitate comparisons between
competing products.  It further submits that some of these objectives are pursued by the Regulation at
issue in conjunction with EC Directive 2000/13.  The European Communities argues that this is
particularly true of the name; accurate and precise names allow products to be compared with their
true equivalents rather than with substitutes and imitations whereas inaccurate and imprecise names
reduce transparency, cause confusion, mislead the consumer, allow products to benefit from the
reputation of other different products, give rise to unfair competition and reduce the quality and
variety of products available in trade and ultimately for the consumer.
4.72 The European Communities submits that Peru and some third parties misinterpret the second
recital of the preamble to its Regulation.  It argues that while the objectives of its Regulation are
expressed in clear terms by using the expression "in order to …", the second recital simply indicates
what the legislator thought could be one of the consequences of the Regulation ("…is likely to…").
In the view of the European Communities, it seems obvious that, as regards preserved sardine
products, a law that ensures market transparency and fair competition, that guarantees the quality ofthe products and that appropriately informs the consumer of this, will most likely result in an
improvement of the profitability of sardine production in the European Communities.
4.73 Concerning the Nehring Institute, the European Communities contends that its opinion is not
reliable as regards the name of the product.  The Nehring Institute is a private company and its
opinion was not based on any kind of consumer research.  It relied on a wrong interpretation of theEC Regulation and indirectly reported oral statements from government officials (which the
Nehring Institute cautioned needed to be confir med).  With respect to the letter from the
Consumers’ Association, the European Communities argues that it provides no evidence of what
consumer expectations are and that all the facts refered to in the letter are incorrect.  Concerning the
objective of market transparency, the European Communities contends that contrary to Peru'sWT/DS231/R
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argument, it is obvious that there is a "rational c onnection" between the legitimate objective of market
transparency (and that of consumer protection) and the need to ensure that products are sold under
their correct trade descriptions.
(b) Whether Codex Stan 94 is ineffective or inappropriate to fulfil the legitimate objectives
pursued by the EC Regulation
4.74 The European Communities  argues that, in this case, the use of Codex Stan 94, even if
deemed relevant, would be inappropriate to fulfil the legitimate objectives pursued by its Regulation.
The prohibition on the use of the term "sardines" is necessary to allow different products to be
distinguished.  The European Communities notes that one of the legitimate objectives recognized by
Article 2.2 of the TBT Agreement is the prevention of deceptive practices.  It also argues that the use
of the term "X Sardines" where the "X" indicates the name of a country or geographic area would not
achieve these objectives in the European Communities since the use of the word "sardines" wouldsuggest to the consumer that the products are the same but originate from different countries or
geographic areas.  Furthermore, the need to prevent deceptive practices is also a requirement of the
Codex Stan 94, which requires that whichever formula is used for sardine-type products, it has to be
drafted in such a way so as not to mislead the consumer.
4.75 The European Communities submits that the wording of Codex Stan 94 clearly makes a
distinction throughout its text between sardine and sardine-type products and expressly reserves the
term "sardines" exclusively for Sardina pilchardus  without any qualification.  In most parts of the
European Communities, especially in the producer countries, the term "sardines" has historically
made reference only to Sardina pilchardus .  Therefore, the European Communities claims that the use
of the term "sardine-type" demonstrates that "sardines" is not considered a generic term.
4.76 The European Communities argues that the various publications refered to by Peru prove
nothing about European consumers' understanding of the term "sardines".  These publications list the
dozens of common names existing for each fish in different languages in order to identify the proper
scientific name of each one (as is the case of FishBase) or provide literal translation of all fish names
even if these are not know in the country where the language is spoken (as in the case of theEuropean Communities Multilingual Dictionary).
4.77 The European Communities contends that the Regulation at issue does not exist in a vacuum,
but is part of its legitimate policy to ensure precision in the names of foodstuffs and in doing so to
preserve quality, product diversity and consumer protect ion.  It points out that it has a system in which
each food product must bear a precise trade description on which the consumer can rely as a guarantee
of the nature and characteristics of the product.  It argues further that one result of its legitimate policy
is to prevent the names of foodstuffs becoming generic; that is why "sardines" is not a generic term inthe European Communities.  This situation has now created uniform consumer expectations
throughout the European market, the term "sardines" referring only to a preserved product prepared
from Sardina pilchardus .  Therefore, the European Communities argues that an unrestricted use of the
term "sardines" even within a country will certainly create confusion as to the exact nature of the
product being sold.
4.78 According to the European Communities, this system allows consumers to rely on the name
of the product as providing reliable information about the nature and identity of a foodstuff and serves
the objective of consumer protection, market transparency.  Furthermore, the system allows for
competition between manufacturers and producers based on the quality and price of their products and
not on attempting to make consumers believe that they are buying something they are not.  TheEuropean Communities contends that requiring precise names for foodstuffs also ensures that certain
reputation can be associated with each particular name and that this is an important element for
maintaining high quality and product diversity.  Therefore, the European Communities is of the
opinion that under a system where names are more flexible and a greater range of foodstuffs can beWT/DS231/R
Page 21
sold under each name, there is a natural tendency for all producers to use the cheapest ingredients that
qualify for the name and allow the associated reputation to be exploited.  This would lead to a smaller
range of products being made available on the market and a lowering of quality and choice – often
referred to as "levelling down".
4.79 The European Communities further argues that consumers in most of its member States have
always associated the word "sardines" exclusively with Sardina pilchardus.   They have also come to
know canned Sardinops sagax under trade descriptions such as "Pacific pilchards" in the
United Kingdom or "Sardinops Pilchard" in Belgium.  The European Communities disputes Peru's
assertion that European consumers associate  Sardinops sagax with the trade description "sardines"
and claims, to the contrary, that its consumers associate Sardinops sagax with trade descriptions such
as "Pacific pilchards" and  changing these trade descriptions would cause disruption and confusion.
This would not be an effective or appropriate mean s for the fulfilment of the three legitimate objectives
mentioned above.
4.80 The European Communities also recalls that, even before the EC Regulation entered into
force, European Communities law required the produ cts to be sold under the trade names determined
by the laws of the relevant member States, and these laws did not allow the use of the trade
description "prepared sardines" to be used for wh at Peru terms "all species of sardines".  The
European Communities refers to Council Directive 79/112/EEC of 18 December 1978, the
predecessor to EC  Directive 2000/13 which states:
The name under which a foodstuff is sold shall be the name laid down by whatever
laws, regulations or administrative provisions apply to the foodstuff in question or, in
the absence of any such name, the name customary in the member state where theproduct is sold to the ultimate consumer, or a description of the foodstuff and, if
necessary, of its use, that is sufficiently precise to inform the purchaser of its true
nature and to enable it to be distinguished from products with which it could be
confused.
4.81 The European Communities submits that, in France for instance, Article 1 of
"Arrêté Ministériel du 16 mars 1982 pour les poissons marins" prescribed the name
"Sardine commune" for the Sardina pilchardus , and the name "Sardinops du Chili" or "Sardinops" for
the Sardinops sagax .  Similarly, in Spain, the name "Sardina" has been reserved for
Sardina pilchardus  since at least 1964.  In 1984, Article 30.1 of "Real Decreto 1521/1984" of
1 August 1984, in combination with its Annex I, reiterates the attribution of the name "Sardina" to the
Sardina pilchardus .  Moreover, the European Communities notes that United Kingdom's regulations
have required the name "Pacific pilchards" for  Sardinops sagax  since at least 1980, well before the
adoption of the EC Regulation.
4.82 In conclusion, the European Communities argues that any name for what are considered
"sardine-type products" that contains the word "sardines" would not be in accordance with the law
and the custom of its member States and would mislead the European consumers.
4.83 Peru  claims that the European Communities has failed to substantiate its assertion that
Codex Stan 94 is an ineffective or inappropriate means for the fulfilment of its legitimate objectives.
According to Peru, paragraph 6.1.1(i) of Codex Stan  94 takes into account the legitimate objective
pursued by the European Communities, consumer protection, because the term "sardines" without any
qualification is reserved for  Sardina pilchardus .  Peru notes that paragraph 6.1.1(ii) of Codex Stan 94
prescribes that products prepared from fish of the species not found in Europe are to be labelled assardines from a country or geographic area or of a species or their common name.  Therefore, even
assuming that the European consumers indeed associate the word "sardines" exclusively with
Sardina pilchardus, they would not be misled if sardines of the species Sardinops sagax were
marketed as Pacific sardines.  Peru argues that the European consumer offered a can labelled "PacificWT/DS231/R
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sardines" or "Peruvian sardines" is not misled because the consumer is clearly informed that the
product is not prepared from sardines caught in Euro pean waters. It is the use of a term without the
word "sardines", such as the term "pilchard", to describe products made from sardines of the species
Sardinops sagax  that would confuse consumers.  In this regard, Peru notes that the word "pilchard" is
one of the common names for fish of the species Sardina pilchardus .
4.84 Peru claims that the name "sardines" is a generic term used to describe fish belonging to a
large group of clupeid marine fish sharing the characteristics of young pilchards, and that until the
adoption of the EC Regulation in 1989, all species of sardines could be marketed under
European Communities law as sardines.  Peru submits that the common names of  Sardinops sagax  in
European countries are identical to the names to be  used for that species according to Codex Stan 94
and argues that the European Communities cannot claim convincingly that the naming of a product, in
accordance with linguistic conventions that the Eu ropean Communities' authorities themselves found
to exist in Europe, could mislead the European consumer.
4.85 In support of this claim, Peru argues that various publications prepared by the
European Communities, international organizations and specialised institutions confirm that in all
European countries at least one of the common names for fish of the species Sardinops sagax  consists
of the word "sardines" (or its equivalent in the national language) qualified by one of the countries orthe geographic area in which this species is found, such as "Peruvian sardine" in English; "Sardine du
Pacifique" in French; "Sardinha" in Portuguese.  Amongst those publications, Peru mentions the
"Multilingual Illustrated Dictionary of Aquatic Animals and Plants" - produced by the
European Commission in co-operation with the member States of the European Communities and
national fishery institutes; the electronic publication known as "FishBase", a publication which wasprepared with the support of, inter alia,  the European Commission, which lists about
110,000 common names for fish; and the Multilingual Dictionary of Fish and Fish Products prepared
by the Organisation for Economic Cooperation and Development (OECD).
4.86 Peru claims that the Codex Stan 94 enhances market transparency and that the alternative
suggestions of the European Communities have exactly the opposite effect.  In the view of Peru, thisdemonstrates that the European Communities is ready to sacrifice market transparency in order to
confer upon its producers the privilege of using the generic term "sardines".  It is not apparent to Peru
how the European Communities could possibly justify the deviation from the standard set out in
paragraph 6.1.1(ii) of Codex Stan 94 in terms of market transparency when the very purpose of the
labelling regulations set out in Codex Stan 94 for sardines of species other than  Sardina pilchardus is
to ensure market transparency.
4.87 Peru argues that it is legitimate for a government to adopt regulations giving each food
product a precise and specific trade description that does not mislead the consumer.  However, Peru
argues that it is not legitimate to reserve the use of a generic term for a locally produced product and
that the EC Regulation does not implement the legitimate policy of preserving specific and precise
trade descriptions for food;  it establishes minimum quality standards for products prepared from
Sardina pilchardus  and reserves the commercial benefit of this guarantee to products prepared from
sardines originating from European waters.  As  explicitly recognised in the Preamble to the
EC Regulation and further explained in the European Communities’ first submission, Peru argues that
this is meant to "improve the profitability of sardine production in the Community".  According to
Peru, it is not meant to ensure that products made from  Sardina pilchardus  are marketed only under
one trade name.  Peru argues that there are also no other European Communities regulations thatestablish specific and precise trade descriptions for the other species of sardines covered by the
Codex Stan 94.
4.88 Peru argues that Codex Stan 94 does not prevent the European Communities from requiring
that each product made from sardines bear a precise trade description on which the consumer can rely.
Peru argues that if, for instance, canned fish of the species Sardina pilchardus are labelled "sardines"WT/DS231/R
Page 23
and canned fish of the Sardinops sagax are marketed as "Pacific sardines", each of the two products
has a precise trade description and the consumers’ expectations are protected and Codex Stan 94 is
met.
4.89 Peru contends that it is possible that European consumers, when offered a can labelled
"sardines" without any qualification expect to buy a product made from sardines of the species thatpopulate European waters.  Peru argues, however, that paragraph 6.1.1(i) of Codex Stan 94 takes this
element into account because the term "sardines" without any qualification may be reserved for that
species.  Peru argues that when European consumers are offered a can labelled "Pacific sardines",
they are not misled because they are clearly informed that the product is not prepared from sardines
caught in European waters.  Therefore, even assuming that European consumers do associate the word
"sardines" exclusively with Sardina pilchardus , they would not be misled if sardines of the species
Sardinops sagax  are marketed as Pacific sardines.  Based on these reasons, Peru concludes that the
European Communities did not substantiate its assertion that the Codex Stan 94 is an ineffective or
inappropriate means for the fulfilment of its legitimate objectives.
4.90 Peru notes that paragraph 6.1.1(i) of Codex Stan 94 accords the European Communities a
privilege enjoyed by no other WTO Members in that it permits an unqualified use of the term
"sardines" to the particular species of sardines found off the European coasts.  Peru notes that it wouldbe inconsistent with Codex Stan 94 if Peru were to reserve the unqualified use of the term "sardines"
for products prepared from Sardinops sagax   but it must ensure that its domestic food labelling
regulation permits the marketing of Sardina pilchardus  as sardines without any qualification as to
their origin.  In Peru's view, the European Communities cannot claim that an international standard
that was drafted with European Communities' particular situation and interest in mind and accordssuch a privilege is an ineffective or inappropriate means for the fulfilment of its legitimate objectives.
E. A
RTICLE 2.2 OF THE TBT AGREEMENT
1. Whether the EC Regulation is "more trade restrictive than necessary"
(a) Trade-restrictive effects
4.91 The European Communities  argues that neither Peru, nor the third parties, have attempted to
show that there is a barrier to trade at all – let alone an "unnecessary" one.  It considers that Peru is
obviously of the view that it could sell more of its  Sardinops  sagax  products – or perhaps get a better
price for them – if they could be called "sardines" rather than use their proper names of  Pilchards  or
Sardinops .  The European Communities contends that Peru’s belief is not proof.
4.92 The European Communities submits that, in order to establish that Article 2 of the
EC Regulation violates Article 2.2 of the TBT Agr eement, both Peru and Canada limit themselves to
analysing one of the many recitals of the EC Regulation and to asserting that this Regulation, having aclear protectionist intent, constitutes an obstacle to trade.  It contends that Peru's and Canada's
arguments constitute a tautology, unacceptable in legal proceedings where the complainant has the
burden of proving a prima facie  case.  It argues that, Peru, in order to establish that Article 2 of the
EC Regulation is applied "with a view to or with the effect of creating unnecessary obstacles to
international trade", would have to demonstrate trade-restrictive effects; identify correctly thelegitimate objectives pursued; and finally, establish that these restrictive effects are more trade-
restrictive than necessary, taking into account the benefits to be expected from the realisation of the
legitimate objectives.  The European Communities cl aims that Peru fails to establish any of these
requirements for a violation of Article 2.2 of the TBT Agreement.
4.93 Peru  argues that under Article 2.2 of the TBT Agreement, it does not have to demonstrate
that the EC Regulation has trade-restrictive effects.  Peru submits that the drafters of the
TBT Agreement proceeded on the assumption that all technical regulations, including those imposedWT/DS231/R
Page 24
for legitimate reasons, inevitably have trade-restrict ive effects.  Peru contends that each regulation
prescribing the characteristics that an imported product (or process or production method related to
that product) must meet imposes burdens that producers and distributors have to comply with and
therefore inevitably has trade-restrictive effects. This is reflected in the wording "more trade-
restrictive than necessary" in the text of Article 2.2.
4.94 Peru considers that it would not be consistent with established GATT and WTO jurisprudence
if Peru were found to be legally required to provide statistical or other evidence demonstrating that the
EC Regulation adversely affected its exports.  Peru refers to the Appellate Body report on India —
Patents (US)  in support of this view.14  Peru contends that the TBT Agreement obliges the
European Communities to maintain certain conditions of competition for imported products; it is
therefore sufficient for Peru to demonstrate that its products are not accorded those conditions of
competition.  Peru further submits that in interpreting the term "trade-restrictive" in Article 2.2 of theTBT Agreement, the Panel should take into account (a) that the basic provisions of the GATT on
restrictive trade measures have been interpreted both in GATT and WTO jurisprudence as provisions
establishing conditions of competition and (b) that one of the purposes of the TBT Agreement is to
further the objectives of the GATT 1994.
4.95 In support of the above, Peru recalls that the GATT panel on EC — Oilseeds I  states:
The CONTRACTING PARTIES have consistently interpreted the basic provisions of
the General Agreement on restrictive trade measures as provisions establishing
conditions of competition. Thus they decided that an import quota constitutes an
import restriction within the meaning of Article XI:1 whether or not it actually
impeded imports and that a tax on imported products does not meet the nationaltreatment requirement of Article III whether or not the tax is actually applied to
imports.
15
4.96 Peru also recalls that the Appellate Body noted this jurisprudence approvingly in  Japan —
Alcoholic Beverages II and ruled that "Article III protects expectations not of any particular trade
volume but rather of the equal competitive relationship between imported and domestic products" andthat "it is irrelevant that 'the trade effects' of the tax differential between imported and domestic
products, as reflected in the volumes of imports, are insignificant or even non-existent".
16
4.97 Peru argues that, according to the above-mentioned panels, the rationale for interpreting
Articles III and XI of the GATT 1994 as provisions prescribing the establishment of conditions of
competition is obvious: the basic provisions of the GATT 1994 on restrictive trade measures are not
only to protect current trade but also to create the predictability needed to plan future trade.  They
must therefore be interpreted to apply to the re gulatory framework governing both current and future
trade.  Furthermore, Peru submits that it is generally not possible to foresee or control with precision
the impact of trade policy measures on import volumes; if the WTO-consistency of a restrictive trade
measure were to depend on its actual trade impact, the question of whether a WTO Member is
violating its obligations would depend on factors it can neither foresee nor control.  Peru further
points out that if that were the case, adversely affected WTO Members could only bring a complaintagainst such a measure after it has been proven to cause damage.  Moreover, Peru submits that
changes in trade volumes result not only from government policies but also other factors and, in most
                                                     
14 Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical
Products ("India – Patents (US) "), WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, para. 40.
15 GATT Panel Report, European Economic Community – Payments and Subsidies Paid to Processors
and Producers of Oilseeds and Related Animal Feed Proteins  ("EEC – Oilseeds I "), adopted 25 January 1990,
BISD 37S/130, para. 150.
16 Appellate Body Report, Japan – Taxes on Alcoholic Beverages  ("Japan – Alcoholic Beverages II ")
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, p. 110.WT/DS231/R
Page 25
circumstances, it is therefore not possible to establish with certainty that a decline in imports
following a change in policies is attributable to that change.
4.98 Peru contends that the above considerations apply also to the interpretation of the term "trade-
restrictive" in Article 2.2 of the TBT Agreement and concludes that any measure adversely affecting
the conditions of competition for imported products must be deemed to be "trade-restrictive" within
the meaning of Article 2.2, irrespective of its actual trade impact.
4.99 According to the European Communities , Peru interprets Article 2.2 of the TBT Agreement
to incorporate concepts from Article III:4 of the GA TT 1994.  It notes that Peru claims that Article 2.2
is concerned with conditions of competition rather than unnecessary restrictions on trade.  The
European Communities argues that, contrary to Peru’s contention, it is not possible to derive from the
decisions of the Appellate Body a principle "under GATT and WTO jurisprudence that the basic
provisions governing international trade protect expectations on conditions of competition, not onexport volumes".
4.100  The European Communities submits that the Appellate Body, in the case cited by Peru in
support of its original contention, India — Patents (US) , chided the panel for pronouncing a "general
interpretative principle" according to which "legitimate expectations" concerning in particular the
protection of conditions of competition must be taken into account in interpreting theTRIPS Agreement.  The European Communities refers to the Appellate Body's statement that "[t]he
legitimate expectations of the parties to a treaty are reflected in the language of the treaty itself" and
notes that just as in the case of the TRIPS Agreement considered in India — Patents (US) , there is no
basis for importing into the TBT Agreement concepts that are not there.  It argues that the
TBT Agreement expressly recognises the right of WTO Members to adopt the standards they considerappropriate to protect, for example, human, animal or  plant life or health, the environment, or to meet
other consumer interests.  The European Communities argues that all technical regulations inevitably
affect conditions of competition and claims that if such an effect were sufficient to establish an
"obstacle to trade" contrary to Article 2.2 of the TBT Agreement, there would have been no need for
the Members to refer, in the TBT Agreement, to unnecessary  obstacles to trade.
4.101  Peru argues that contrary to the assertion of the European Communities, the Appellate Body
did not chide the panel in India — Patents (US)  for having endorsed the principle of conditions of
competition.  In the view of Peru, what the Appe llate Body did was to chide the panel for having
merged and therefore confused the concepts of "reasonable expectations" and "conditions of
competition".  Peru respectfully submits that the European Communities does the same in its
argumentation.
(b) More trade-restrictive than necessary
4.102  Peru  recalls that one of the purposes of the TBT Agreement is to further the objectives of the
GATT 1994, and argues that according to consistent GATT and WTO jurisprudence, a measure
cannot be justified as "necessary" under Article XX(b) and (d) of the GATT 1994 if an alternative
measure is reasonably available that is not inconsistent with, or is less inconsistent with, other
GATT provisions.  Peru argues that the jurisprudence of the GATT and the WTO on the term"necessary" in Article XX(b) and (d) of the GATT 1994 is therefore relevant to the interpretation of
the terms "more trade-restrictive than necessary" in Article 2.2 of the TBT Agreement.  In Peru's
view, a measure should therefore be deemed to be more trade restrictive than necessary within the
meaning of Article 2.2, if there is a reasonably available, less trade-restrictive alternative measure that
fulfils the Member’s legitimate objective and that is consistent with, or less inconsistent with, theTBT Agreement.
4.103  In Peru's view, the considerations on the basis of which the Appellate Body determined in
Korea — Various Measures on Beef  the meaning of the term "necessary" in Article XX(d) of theWT/DS231/R
Page 26
GATT 1994 are of general application and should therefore guide the Panel in determining the
meaning of the term "necessary" in Article 2.2 of the TBT Agreement, it being understood that the
different context in which the term appears in the two provisions would need to be taken into account.
4.104  According to Peru, this means that the Panel should begin by examining whether the measure
at issue makes a contribution to the realisation of the two ends that the European Communities claimsto pursue (specific trade names and consumer protection).  If the Panel reaches the conclusion that the
measure does so, it must weigh the importance of the common interests or values realised by the
measure against its impact on trade.  On the other hand, If the Panel reaches the conclusion that the
measure fails to make a contribution to the ends the European Communities claims to pursue, the
question of weighing the common interests or values realised against its impact on trade will not arise.
4.105  Peru submits that the prohibition of the term "sardines" for  Sardinops sagax  in combination
with the name of a country, geographical area or species or the common name does not make anycontribution to the ends that the European Communities claims to pursue.  Peru is therefore of the
view that the Panel need not engage in a process of weighing up the three elements as conducted by
the Appellate Body in Korea — Various Measures on Beef.
4.106  According to Peru, in the context of Article XX of the GATT 1994 the term "necessary"
qualifies the term "measures", and the necessity test must consequently be applied by the panel to themeasure it previously found to be inconsistent with  another provision of the GATT 1994 and therefore
requires justification under Article XX.  However, in the context of Article 2.2 of the
TBT Agreement, the term "necessary" qualifies the terms "not more trade-restrictive than", and what
must thus essentially be determined to be "necessary" is the obstacle to trade created by the measure
challenged by the complainant.
4.107  In the view of Peru, the EC Regulation is more trade restrictive than necessary because there
is a less trade-restrictive alternative, namely C odex Stan 94, that is reasonably available, that is
consistent with the TBT Agreement and that would fulfil the European Communities’ objective.  Peru
argues that the objective of consumer protection that the European Communities claims to pursue
with its Regulation can be met in a less trade-restrictive manner by allowing species other thanSardina pilchardus  to be marketed as preserved sardines in accordance with the Codex Stan 94; that
is, by including designations that inform consumers of the "country, geographic area, the species or
the common name of the species in accordance with the law and custom of the country in which the
product is sold," for example "Pacific Sardines" or "Peruvian Sardines".  By adopting such a measure,
Peru contends that the European Communities could provide European consumers with the most
precise information possible and reserve the use of the term "sardines" without any descriptor for
products made from  Sardina pilchardus .  Peru argues that this alternative is reasonably available,
consistent with the TBT Agreement and would permit the European Communities to fulfil its stated
objectives while at the same time being less restrictive of trade in preserved sardines.
4.108  Peru also submits, quoting a letter from the Consumers' Association whose arguments Peru
presents as part of its submission to the Panel,  that
…[t]here is no good reason to restrict sardines marketed within the
[European Communities] to the specie Sardina pilchardus  Walbaum.  The equivalent
Regulation for common marketing standards for tuna and bonito is not similarly
restrictive, but permits, inter alia, Atlantic or Pacific bonito, Atlantic little tuna,
Eastern little tuna, black skipjack "and other species of the genus Euthynnus".  If a
permissive and wide range of tuna or bonito species can be marketed in theCommunity under a common standards regime designed "to improve the profitability
of tuna production in the Community" and to protect "consumers as regards the
contents of packages" of tuna, it is difficult to understand why sardines should be
marked out for a particularly restrictive regulatory regime.WT/DS231/R
Page 27
4.109  The European Communities  argues that even if Peru were to demonstrate that the
EC Regulation is trade restrictive, it would still have to show that it is more trade restrictive than
necessary in the light of the risks addressed by Article 2 of the EC Regulation.
4.110  With regard to the word "necessary" in Article 2.2 of the TBT Agreement and in
Article XX(d) of GATT 1994, the European Communities argues that it is not used in the samecontext.  First, it argues that Article XX(d) of GATT 1994 defines an exception and Article 2.2 of the
TBT Agreement an obligation, and, second, Article XX(d) of GATT 1994 requires the measure to be
"necessary to secure compliance" and Article 2.2 of the TBT Agreement, on the other hand, provides
that the effects of the measure shall be "not more trade-restrictive than necessary".  According to the
European Communities, Article 2.2 does not strictly require that the measure is "necessary" to fulfil
the legitimate objective – only that its effects not be more trade restrictive than necessary.  Such a
measure could be merely a helpful measure that, alone or perhaps together with other measures, helpsin achieving the objective that the government pursues, even if possibly this objective could as well be
accomplished in other ways than through the technical regulation in question.  Accordingly, the only
requirement in its view is that the measure should not be more trade restrictive than necessary,
meaning that among two equally effective measures, the less trade restrictive should be chosen.
4.111  The European Communities consequently submits that the first criterion of the
Appellate Body in Korea — Various Measures on Beef  for Article XX(d) (the contribution made by
the measure to the realisation of the end pursued) is not relevant for the analysis under Article 2.2 of
the TBT Agreement, except that, if one measure is more effective in achieving the objective than
another measure, it can be chosen, even if the less effective measure is less trade-restrictive.
4.112  The European Communities argues that the second criterion of the Appellate Body in
Korea — Various Measures on Beef  for Article XX(d) (importance of the common interest) suggests
that the degree of permissible trade restriction would vary according to the importance of the
objective pursued.  According to the European Communities, however, this criterion is used by the
Appellate Body to determine whether the measure is "indispensable" to fulfil the objective or whether
it is simply "making a contribution".  The European Communities considers that this does not seemrelevant for an analysis under Article 2.2 since this provision simply requires a comparison of the
trade effect of one measure with that of an alternative that also achieves the same objective, at least at
the same level of protection. In providing a non-exhaustive list of legitimate objectives, the
TBT Agreement  deliberately refrains from setting out any choices as to the relative importance of one
objective compared to another.
4.113  The European Communities argues that it is only the third criterion of the Appellate Body in
Korea — Various Measures on Beef  (impact of the measure on imports or exports) that is in one sense
relevant to the analysis under Article 2.2.  In its view, this follows from the very concept of "not more
trade restrictive than necessary".  However, the Appellate Body uses this criterion for a purpose that it
is not relevant under Article 2.2 for the reasons seen above.  The European Communities argues that
under Article 2.2, one has to compare the trade effects of two measures, not the necessity of one
measure.
4.114  The European Communities disagrees with Peru's  assertion that a less restrictive measure
would be to provide that preserved Sardinops sagax  be called Peruvian or South American sardines.
The European Communities finds that there is no answ er to its argument that such a provision would
not achieve its legitimate objective at the level of protection that the it seeks and that the
EC Regulation, including its rules on names, does not create an obstacle to trade, but promotes it.Moreover, the European Communities contends that the quote from the Consumers’ Association does
not advance a single new element of fact but simply repeats facts that the European Communities had
demonstrated to be wrong.WT/DS231/R
Page 28
2. Taking account of the risks non-fulfilment would create
4.115  According to Peru , the phrase "taking account of the risks non-fulfilment would create" is
preceded by a comma and therefore refers not only to the term "necessary" but to the whole of the
obligation set out in the preceding phrase.  Peru contends that if the phrase were to be interpreted to
refer to the adverse consequences of a failure to apply the technical regulation, it would add nothingto the necessity test because these consequences would have to be taken into account in any case to
determine whether the regulation meets that test.  In Peru's view, the phrase was probably added to
make clear that a technical regulation merely preventing risks (rather than predictable outcomes) may
be both "legitimate" and "necessary", hence making explicit what is implicit in the necessity test set
out in Article XX(b) and (d).  According to Peru, this issue does not arise in the case before the Panel
because neither party claimed that the EC Regulation serves to prevent risks.
4.116  The European Communities  considers that the words "taking account of the risks non-
fulfilment would create" make clear that the question of whether measures are alternatives or not can
only be assessed once it has been established whether the alternative, allegedly less trade-restrictive
measure, achieves the legitimate objectives of a level of protection at least as high as that achieved by
the contested measure.  In its view, the "downside" of not meeting the chosen level of protection is
clearly an essential element in this consideration.  According to the European Communities, it is the
"mirror image" of the positive evaluation of whether the measure is capable of meeting the chosen
level of protection, and it is only by looking at both sides of the picture that it is possible to compare
properly the effectiveness of the two measures.  It argues that the quoted words are thus an integral
part of the test set out in Article 2.2 of the TBT Agreement (which it considers to be more a
"comparison test" than a "necessity test") and that they were intended to preserve, not reduce, the rightof  WTO Members to determine their appropriate level of protection.  The European Communities
submits that the reason why these words do not occur in Article XX(b) or (d) of the GATT 1994 is the
fact that the tests to be applied in Article XX(b) or (d) of the GATT 1994 are not the same as in
Article 2.2 of the TBT Agreement.
4.117  According to the European Communities, the non-fulfilment of the objectives in this case
would lead to the marketing of lower quality products, the use of disparate and confusing
presentations, labelling and names, unfair competition, the elimination of higher cost and higher
quality products from the market, the reduction in the quality and range of products available to the
consumer and finally reduction in the reputation and consumption of preserved fish products in the
European Communities, to the detriment of all economic operators in the sector and consumers.
F. A
RTICLE 2.1 OF THE TBT A GREEMENT AND ARTICLE III:4 OF THE GATT 1994
1. The relationship between Article 2.1 of the TBT Agreement and Article III:4 of the
GATT 1994
4.118  Peru  argues that the national-treatment requirements set out in Article 2.1 of the
TBT Agreement and Article III:4 of the GATT 1994 are identically worded and have the same
objective, i.e., to ensure that internal regulations are not applied so as to afford protection to domestic
production.  Peru considers that Article 2.1 of the TBT Agreement introduces into theTBT Agreement the national-treatment and the most-favoured-nation principles set out in Articles I:1
and III:4 of the GATT 1994.  Peru is of the opinion that the two provisions differ only in their scope:
while Article III:4 of the GATT 1994 is broadly worded to cover all regulations affecting the internal
sale, offering for sale, purchase, transportation, distribution or use of imported products, Article 2.1 of
the TBT Agreement is limited to technical regulations as defined in Annex 1 of the TBT Agreement;in Peru's view, the regulations covered by Article 2.1 at issue are therefore a sub-set of the regulations
covered by Article III:4 of the GATT 1994.  For this reason, Peru argues that the jurisprudence
developed by the Appellate Body for Article III:4 should be taken into account when interpreting
Article 2.1 of the TBT Agreement.WT/DS231/R
Page 29
4.119  In Peru's view, its arguments under Article 2.1 of the TBT Agreement on the less favourable
treatment of Peruvian sardines and on the likeness of the species Sardinops sagax  and
Sardina pilchardus therefore apply equally to Article III:4 of the GATT 1994.  Peru is consequently
of the view that the EC Regulation is also inconsistent with this provision.
4.120  The European Communities  contends that Peru's arguments under Article 2.1 of the
TBT Agreement refer to its arguments under Article III:4 of the GATT 1994.  It explains that it will
therefore deal with them in its discussion of Peru's claim under Article III:4 of the GATT 1994.
4.121  Neither the European Communities nor Peru contests that the EC Regulation is a "a law,
regulation or requirement affecting the internal sale, offering for sale, purchase, distribution or use"
within the meaning of Article III:4 of the GATT 1994.
2. Whether domestic products prepared from Sardina pilchardus  and imported products
prepared from Sardinops sagax  are "like" products
4.122  Both Peru  and the European Communities  submit that the Appellate Body, in its rulings on
EC — Asbestos , explained how a treaty interpreter should proceed in determining whether products
are "like" under Article III:4 and that it also pointed out that the determination has to be made on a
case-by-case basis, employing four criteria in analyzing "likeness":
… (i) the properties, nature and quality of the products;  (ii) the end-uses of the
products;  (iii) consumers' tastes and habits – more comprehensively termed
consumers' perceptions and behaviour – in respect of the products;  and (iv) the tariff
classification of the products.   We note that these four criteria comprise four
categories of "characteristics" that the products involved might share:  (i) the physical
properties of the products;  (ii) the extent to which the products are capable of servingthe same or similar end-uses;  (iii) the extent to which consumers perceive and treat
the products as alternative means of performing particular functions in order to satisfy
a particular want or demand;  and (iv) the international classification of the products
for tariff purposes. These general criteria, or groupings of potentially shared
characteristics, provide a framework for analyzing the "likeness" of particularproducts on a case-by-case basis.
4.123  Peru  claims that imported products prepared from fish of the species  Sardinops sagax  and the
domestic products prepared from fish of the species  Sardina pilchardus  are "like".  In support of its
claim, Peru argues that the report it submitted - " La Sardina Peruana (Sardinops sagax sagax) y la
Sardina Europea (Sardina pilchardus) " - demonstrates that the two species of fish are physically very
similar and that there is no scientific or technical reason that would justify a commercial distinction.
Peru further submits that according to the opinio n of the Nehring Institute and the Federal Research
Centre for Fisheries, Institute of Biochemistry and Technology, the characteristics in taste and smell
of the product from Sardinops sagax are very similar to the products of Clupea pilchardus  which
originate from Europe and North Africa.
4.124  Peru also argues that the process of inclusion of new fish species in Codex Stan 94, as
described by Canada in its third party submission, confirms that products made fromSardina pilchardus and those made from Sardinops sagax  are "like", because for the proposed fish
species to be included in Codex Stan 94, reports must be submitted from at least three independent
laboratories stating that the organoleptic properties, such as texture, taste and smell of the proposed
species, after processing, conform with those char acteristics of the species already included in the
standard. Once a species has been found to meet these criteria, the Codex Alimentarius Commissiontakes its decision.  Therefore, Peru submits that this process ensures that only species that are like
from the consumers' perspective are included in Codex Stan 94.  Thus, Peru claims that the twoWT/DS231/R
Page 30
products at issue must be considered to be "like" products within the meaning of Article 2.1 of the
TBT Agreement.
4.125  Peru thus argues that the physical properties of these products are very similar, and as a result
of these similarities, they are capable of serving the same or similar end-uses, and that consumers
perceive and treat the products as alternative means to satisfy the demand for preserved sea food.Peru refers in this respect to the Appellate Body's statement in EC — Asbestos , where it emphasised
that:
Panels must examine fully the physical properties of products.  In particular, panels
must examine those physical properties of products that are likely to influence the
competitive relationship between products in the marketplace.
4.126  According to Peru, a comparison of the physical properties of the two products at issue cannot
but lead to the conclusion that the differences between them are of interest to biologists but not to the
consumer and therefore do not influence the competitive relationship between them in the market
place.  The two products therefore must therefore be considered to be "like" products within the
meaning of Article 2.1 of the TBT Agreement.
4.127  As to the fourth criterion that has been us ed for determining likeness – the international
classification of the products for tariff purposes – Peru does not consider that this fourth criterion canprovide useful guidance in this case.  Nevertheless, Peru points out that the Harmonized System does
not distinguish between sardines of different species and that WTO Members generally distinguish in
their customs tariffs between fresh, frozen and canne d sardines but not between sardines of different
species.
4.128  Peru notes that the European Communities submitted extensive evidence on the biological
differences between  Sardinops sagax and Sardina pilchardus , but argues that it did not submit any
evidence to the Panel demonstrating that the differences in physical properties of the two products at
issue are such as to influence the competitive relationship between products in the marketplace.  Peru
further submits that the objection of the European Communities that any products which are in a
competitive relationship would have to bear the same name if Peru's argument were to be accepted,would only be valid if all products found to be "like" products had to be treated identically under the
national-treatment provisions of the TBT Agreement and the GATT 1994.  However, national
treatment does not mean identical treatment. It m eans no less favourable treatment.  A GATT panel
therefore correctly found that:
The mere fact that imported products are subject … to legal provisions that are
different from those applying to products of national origin is in itself not conclusive
in establishing inconsistency with Article III:4. In such cases, it has to be assessedwhether or not such differences in the legal provisions applicable do or do not accord
to imported products less favourable treatment.
17
The same panel noted that:
there may be cases where application of formally identical provisions would in
practice accord less favourable treatment to imported products and a contracting partymight thus have to apply different legal provisions to imported products to ensure that
the treatment accorded to them is in fact no less favourable.
18
                                                     
17 BISD 36S/386.
18Ibid.WT/DS231/R
Page 31
These rulings make clear that the national-treatment provisions are not violated if two like products
are subject to different naming regulations.  In such cases, it has to be assessed whether the different
regulations accord imported products less favourable treatment than that accorded to the like domestic
product.
4.129  The European Communities  submits that with regard to living organisms, different species
cannot be regarded as "like" for the purposes of being granted the same name because species
represent the basic units of biological classifications outside which organisms cannot interbreed and
produce viable offspring.  European consumers do not consider different species to be so "like" that
they should bear the same name.  It also submits that from a scientific and biological point of view
there is currently only one species of the genus Sardina , which is Sardina pilchardus,  and
Sardinops sagax  belongs to another genus, the genus Sardinops .  According to the
European Communities, both genera belong to the same family Clupeidae  as do other genera such as
Sardinella, Clupea, Sprattus .  Therefore, sardines ( Sardina pilchardus ), sardinops ( Sardinops sagax ),
round sardinella ( Sardinella aurita ), herring ( Clupea harengus ) and sprat ( Sprattus sprattus ) belong to
the same family but to different genera.
4.130  The European Communities also contests Peru's argument that consumers' tastes and habits
can be inferred from the fact that two products are "s imilar".  If this were the case, it argues that the
Appellate Body would not have cons idered this as a separate criterion.  Consumers' tastes and habits
need to be proved with reference to the market concerned, namely the European market. The
European Communities is of the opinion that, although not bearing the burden of proof, it has
provided the Panel with evidence that European consumers do have the habit of choosing among
different, although similar products to satisfy their varied tastes.
4.131  The European Communities also argues that the Clupeidae  family is composed of 216 species
of fish distributed in 66 genera and that if the extension of the use of the denomination "sardines" to
sardinops  was admitted, any of the other 216 species of the same family could be given the same
name.  In other words, the European Communities considers that if Peru's logic was adopted, namely
that two fish can be considered "like" on the basis that they are "physically very similar"; and thatthey are capable of serving the same or similar end-uses, then, not only the 216 fish belonging to the
family Clupeidae could be called sardines, but also all preserved sea food.
4.132  In light of the above, the European Communities considers that the "likeness" required of
products for the purposes of naming them is much more stringent than it would be for the same
products for the purposes of, for example, taxation.  For the purposes of naming a product, not all
products which are in a competitive relationship ar e "like" under Article III of the GATT 1994.  It
argues that if vodka and shochu can be considered "directly competitive or substitutable" for thepurpose of internal taxation, it would be hard to sa y that their "likeness" goes as far as imposing that
they be referred to in the same way.  If this was the case, apples and oranges, or chicken and turkeys,
because they are in a competitive relationship, should bear the same name.  According to the
European Communities, identical products can have the same name; like products must not.
4.133  The European Communities rejects the opinion of the Nehring Institute and the
Federal Research Centre for Fisheries, Institute of Biochemistry and Technology, that Peru put
forward to support the organoleptic similarities of products prepared with Sardina pilchardus  and
Sardinops sagax .
3. Whether the prohibition to market products prepared from Sardinops sagax  under the
name "sardines" accords a less favourable treatment
4.134  Peru  reiterates its argument that the effect of monopolizing the name "sardines" for products
made from fish of the species Sardina pilchardus  is that European consumers of Peruvian preserved
sardines cannot be informed that the hermetically sealed containers in which these products areWT/DS231/R
Page 32
marketed contain sardines, whereas the consumers of products made from  Sardina pilchardus  may be
given this information.  Peru argues that if the Sardina pilchardus  is better known in a particular
member State of the European Communities under a name other than "sardines" (for instance, under
the name "pilchard") and products made from Sardina pilchardus  could therefore be marketed more
successfully under that name, the seller would be permitted to choose that name.  By contrast, Peruargues, the seller of products made from  Sardinops sagax  is not given that choice.  Peru therefore
claims that the monopolization of the term "sardines" for products prepared from  Sardina pilchardus
accords competitive conditions to those products that are more favourable than those accorded to
products prepared from Sardinops sagax.   Consequently, in Peru's view, the "treatment" that the
EC Regulation accords to Peruvian sardines is "less favourable" than that accorded to
European sardine products.
4.135  In contrast, Peru contends that it would not be inconsistent with the national treatment
requirement if the trade description for Peruvian  sardines was "Pacific sardines" and the trade
description "sardines" was reserved for European sardines, because this difference would not accord
Peruvian sardines less favourable treatment. Peru submits that what renders the EC Regulation
inconsistent with the national treatment requirement is  not that it treats imported products differently
but that the difference in treatment entails less favourable conditions of competition for importedproducts.
4.136  The European Communities  argues that within its member States, each different fish of the
family Clupeidae  is sold under its proper correct name, thus benefiting from the specific market and
reputation that each of them has developed.  It states that it does not understand how this can amount
to a measure that "accords to the group of 'like imported products' 'less favourable treatment' than theone it accords to the group of 'like domestic  products'".  The European Communities submits that the
product canned sardines has to meet the standards contained in the EC Regulation whether imported
or domestically prepared.  Similarly, all other prepared fishes are subject to the same rule whether
imported or domestically produced.
4.137  The European Communities argues that "according national treatment" means according a
product its correct name, not granting to a different product a competitive opportunity represented by
the use of another product's name.  It further submits that Peru merely assumes that calling a product
"sardines" is an advantage.  The European Communities does not see why any of the names used for
preserved  Sardinops sagax should be considered less favourable than the use of the term "preserved
sardines" for preserved  Sardina pilchardus .
4.138  The European Communities contends that the reason why Peru appears not to be selling its
product in the member States of the European Communities is not due to the non-existence of amarket for  sardinops  or that sardinops  are treated less favourably.  It argues that Peru should have
more confidence in the high level of quality of its preserved sardinops and should be devoting its
energies to improving the reputation of its products for reliability and quality, rather than seeking to
exploit the reputation of another product.
G. J
UDICIAL ECONOMY
4.139  Peru  requests the Panel to address its subsidiary claims on Articles 2.1 and 2.2 of the
TBT Agreement only if it were to reach the conclusion that the EC Regulation is consistent with
Article 2.4 of the TBT Agreement; and to examine the consistency of the EC Regulation with
Article III:4 of the GATT 1994 only if it were to conclude that it is consistent with the
TBT Agreement.  Peru requests that the Panel avoid developing interpretation of the TBT Agreementthat are not required to resolve the dispute.
4.140  Peru notes that, with respect to the principle of judicial economy, the Appellate Body stated:WT/DS231/R
Page 33
The principle of judicial economy has to be applied keeping in mind the aim of the
dispute settlement system.  This aim is to resolve the matter at issue and to 'secure a
positive solution to a dispute'.  To provide only a partial resolution of the dispute
would be false judicial economy.  A panel has to address those claims on which a
finding is necessary in order to enable the DSB to make sufficiently preciserecommendations and rulings so as to allow for prompt compliance by a Member
with those recommendations and rulings "in order to ensure effective resolution of
disputes to the benefit of all Members".
19
4.141  Peru argues that the Panel would complete its task if it resolves the dispute as defined by the
claims that Peru has submitted and refers to US — Cotton Yarn  in which the Appellate Body refused
to make a finding on an issue on the grounds that the findings it had already made "resolve[d] the
dispute as defined by Pakistan's claims before the Panel".
4.142  The European Communities  makes no arguments on the issue of judicial economy.
H. EUROPEAN COMMUNITIES ' ARGUMENT THAT PERU REFORMULATED ITS CLAIMS
4.143  The European Communities also contends that Peru’s "reformulation" of its claims as
reproduced in paragraph 3.1 (a) above constitutes a widening of the claims presented in its first
written submission and is therefore inadmissible.  The European Communities argues that Peru isclaiming in its second written submission that the European Communities and its member States
cannot use a common name of the species Sardinops sagax  according to the relevant law and customs
to designate the preserved product unless it is accompanied by the word "sardines".  The
European Communities argues that since Peru has limited its complaint to Article 2 of the
EC Regulation, the Panel’s mandate only relates to the compatibility of that provision with theprovisions of the covered agreements that have been invoked.
4.144  The European Communities further contends that Peru's formulation of its request for
findings seeks to obtain a declaratory judgment that would require the European Communities to take
certain specific action rather than simply remove any inconsistency and this would request the Panel
to go beyond its mandate  and is inadmissible.  The European Communities also argues that Peru's
reformulation of its claim is a consequence of the fact that Peru failed to properly research the
common names of Sardinops sagax  in the European Communities prior to commencing this dispute.
V. ARGUMENTS OF THIRD PARTIES
A. C
ANADA
1. Introduction
5.1 Canada submits that it has a substantial trade interest in the dispute with respect to its export
of Canadian preserved sardines of the species Clupea harengus harengus  to the
European Communities , and a systemic interest in the interpretation of the TBT Agreement and the
GATT 1994.
5.2 Canada argues that the EC Regulation permits only fish of the species  Sardina pilchardus  to
be marketed in the European Communities as "sardines", impairing therefore the marketability of
imported preserved sardines of species other than Sardina pilchardus.   Canada further argues that the
EC Regulation laying down common marketing stan dards for preserved sardines is a technical
regulation within the meaning of the TBT Agreem ent and that it is inconsistent with the
                                                     
19 Australia – Measures Affecting the Importation of Salmon ("Australia – Salmon "), WT/DS18/AB/R,
adopted 6 November 1998, DSR 1998:VIII, para. 223.WT/DS231/R
Page 34
European Communities’ obligations under Articles 2.4, 2.2 and 2.1 of the TBT Agreement and
Articles I:1 and III:4 of the GATT 1994.
2. Retroactive application of the TBT Agreement
5.3 Canada disagrees with the European Communities’ contention that Articles 2.2 and 2.4 of the
TBT Agreement are not applicable to measures that were imposed before the entry into force of theTBT Agreement and notes that this contention is inconsistent with both the case law and
Article XVI:4 of the WTO Agreement.  Canada points out that the Appellate Body in EC —
Hormones  made clear that, regardless of when a measure came into force, as long as it remains in
force after 1 January 1995, it is subject to the disciplines of the SPS Agreement.  In the view of
Canada, the Appellate Body’s reasoning is equally applicable in this case.  If the negotiators had
wanted to exempt the numerous technical regulations in existence on 1 January 1995 from the
disciplines of the TBT Agreement, they would have explicitly done so.  Thus, Canada claims that ifthe Panel were to accept the European Communities' argument, a situation would arise in which it
would be impossible to ensure the conformity with WTO obligations of technical regulations enacted
prior to 1 January 1995, and which continue to be in force.
5.4 Canada also notes that the issue of the application of a WTO Agreement to a measure that
was imposed before the entry into force of the Agreement was addressed by the Appellate Body inBrazil — Measures Affecting Desiccated Coconut .  Canada notes that the Appellate Body stated with
reference to Article 28 of the Vienna Convention:
Absent a contrary intention, a treaty cannot apply to acts or facts
which took place, or situations which ceased to exist, before the date
of its entry into force.
5.5 Canada asserts that after the entry into forc e of the TBT Agreement, the EC Regulation at
issue did not "cease to exist", and that the TBT Agreement, including Articles 2.2 and 2.4, applies to
measures that were enacted before 1 January 1995 and which continue to be in force.
5.6 With regard to this matter, Canada makes th e final point that while the TBT Agreement was
not in force at the time of the enactment of the EC Regulation, the Tokyo Round Standards Code, towhich the European Communities was a party, was in force and its Article 2.2 contained provisions
substantially similar to Article 2.4 of the TBT Agreement.  Thus, even at the time the EC Regulation
was enacted, the European Communities was under an obligation to use relevant international
standards, such as the Codex Standard, as the basis for the Regulation at issue.
3. Article 2.4 of the TBT Agreement
5.7 Canada submits that it is well established that it is for the party asserting the fact, claim or
defence, to bear the burden of providing proof thereof.  Thus, in Canada's view and with respect toArticle 2.4 of the TBT Agreement, Peru has to demonstrate that a relevant international standard
exists or that its completion is imminent; and that the measure in question is not based on this
standard.  Canada argues that the burden then shifts to the defending party to refute the claimed
inconsistency or to prove why the standard is ineffective or inappropriate to meet its legitimate
objective.
5.8 Canada considers that for the purposes of the TBT Agreement, Codex Stan 94 is a relevant
international standard, in that it applies to the same product category as the EC Regulation, namely,
preserved sardines and, like the EC Regulation, relates to the marketing of that product.  Canada also
affirms that the European Communities is incorrect when it states that Codex Stan 94 is not relevant
because "it did not exist and its adoption was not 'imminent' when the EC Regulation was adopted".In any event, whether or not Codex Stan 94 was in existence at the time the EC Regulation wasWT/DS231/R
Page 35
adopted is irrelevant to the European Communities' obligation under Article XVI:4 of the
WTO Agreement, to ensure that the EC Regulation is consistent with Article 2.4 of the
TBT Agreement.
5.9 Furthermore, Canada is of the view that standards adopted by the Codex Alimentarius
Commission are the internationally agreed global reference point for consumers, food producers andprocessors, national food control agencies and the international food trade.  Moreover, Canada is of
the view that Codex Stan 94 complies with the six principles (e.g., principles of transparency,
openness, impartiality and consensus) and procedures set out by the Decision of the TBT Committee.
5.10 With regard to the development and adoption of Codex Stan 94, Canada notes that member
States of the European Communities were actively involved in this process and that the
European Communities acted as an observer.  Canada further recalls that a multilateral consensus-
based approach was applied in this process.  In addition, Canada argues that the inclusion of species inthe Codex Stan 94 is made pursuant to a two-step pr ocess:  first, a proposed species must meet the
rigorous, scientific criteria set out by the Codex Alimentarius Commission;  then, once a species has
been found to meet these criteria, the Codex members make the final decision on its inclusion.
According to Canada's submission under the Codex process, the scientific criteria require that
members proposing the inclusion of an additi onal species communicate to the Commission all
relevant information on taxonomy, resources, marketing, processing technology and analysis.  Canada
points out that this information must include reports from at least three independent laboratories
stating that the organoleptic properties, such as texture, taste and smell, of the proposed species after
processing conform with those of the species currently included in the Codex Stan 94.
5.11 Canada submits that, in accordance with Article 31(1) of the Vienna Convention, the ordinary
meaning of the term "as a basis for" in Article 2.4 of the TBT Agreement is synonymous with "based
on", and that the Appellate Body has stated that "[a]  thing is commonly said to be 'based on' another
thing when the former 'stands' or is 'founded' or 'built' upon or 'is supported by' the latter."  In this
context, Canada argues that the EC Regulation is not "founded", "built" upon or "supported by"
Codex Stan 94.  Canada notes that paragraph  6.1.1 of the Codex Stan 94 permits preserved sardinesof 20 species other than Sardina pilchardus  to use the name "sardines" along with a designation
indicating the country, geographical area, species or the common name of the species.  Therefore,
Canada affirms that Codex Stan 94 is sufficiently flexible to allow the country of sale to choose the
appropriate listed designator to accompany the name "sardines" and that the European Communities is
incorrect when it argues that a measure that prohibits the use of the word "sardines" in conjunction
with the designator for the 20 listed species other than Sardina pilchardus  is based on Codex Stan 94.
5.12 Canada also submits that the European Communities misinterprets the meaning of "in a
manner not to mislead the consumer" in paragraph 6.1.1 of Codex Stan 94.  Canada argues that, read
in context, this phrase refers back to "X sardines " and more specifically, prescribes that the designator
"X" must not be presented in a manner that misleads the consumer.  Canada contends that the
European Communities’ argument that consumers would be confused by the use of the word
"sardines" along with the appropriate designator is refuted by the research conducted by theCodex Committee in the development of Codex Stan 94.  Canada submits that the Codex Committee
researched the common names of the species listed in paragraph 2.1.1 of Codex Stan 94 and in
examining the results of this research came to  a consensus that allowing species other than
Sardina pilchardus  to be labelled as "sardines" with the appropriate designator does not confuse
consumers.  Canada therefore agrees with Peru that the EC Regulation at issue is inconsistent withArticle 2.4 of the TBT Agreement because it is not based on Codex Stan 94.
5.13 Canada argues that the European Communities failed to prove that Codex Stan 94 is
ineffective or inappropriate for the fulfilment of its objective.  Canada submits that "sardines" is aWT/DS231/R
Page 36
generic term20, widely recognized, including under the Codex Stan 94, as applying to many different
species of pelagic, saltwater fish that are prepared and packed in a certain way.  In addition, Canada
maintains that the fact that species other than Sardina pilchardus  have been successfully marketed as
"sardines" in the European Communities for some time indicates that European consumers recognize
and accept that the term "sardines" does not apply exclusively to Sardina pilchardus and therefore it
indicates that  Codex Stan 94 is not inappropriate or ineffective .  For example, the Canadian sardines,
Clupea harengus harengus  had, in 1990, been successfully marketed as "sardines" in the
United Kingdom for over forty years and in the Netherlands for over thirty years.  Furthermore,
Canada states that throughout this period, Canada exported, and continues to export, products made of
the species Clupea harengus harengus : preserved small juvenile Clupea harengus harengus , and
preserved adult Clupea harengus harengus .  Canada argues that until the adoption of the
EC Regulation, the juvenile product was marketed as "sardines" in the European Communities - asprovided for in Codex Stan 94 - while the adult product was marketed as herring.  According to
Canada, it continues to market preserved small juvenile Clupea harengus harengus  as "sardines" in
markets other than the European Communities.
4. Article 2.2 of the TBT Agreement
5.14 Concerning Article 2.2 of the TBT Agreement, Canada argues that the wording of this
provision contains two separate and independent obligations which indicate that a Member cannot
prepare, adopt or apply a technical regulation with a view  to and with the effect of
 creating an
unnecessary obstacle to trade.  Canada submits that the preamble to the EC Regulation at issue states
that it is "likely to improve the profitability of sardine production in the Community, and the market
outlets therefor…".  Canada claims that such language reveals that the EC Regulation has beenadopted with a view to creating an unnecessary obstacle to international trade and that it is therefore
inconsistent with Article 2.2 of the TBT Agreement.
5.15 Moreover, Canada claims that the EC Regulation has been adopted with the effect of creating
an unnecessary obstacle to international trade.  In support of this claim, Canada argues that it can be
inferred from the text of Article 2.2 of the TBT Agreement that in order for a measure to be consistentwith that provision, the following should occur:
(a) The objective of the technical regulation must fall within the range of legitimate
objectives set out in Article 2.2 of the TBT Agreement;
(b) the technical regulation must fulfil the objective; and
(c) the technical regulation must not be more trade restrictive than necessary, taking
account of the risks non-fulfilment would create.
5.16 With regard to the two first elements mentione d above, Canada notes that according to the
European Communities, the labelling requirement in Article 2 of its Regulation has the objective of
"ensuring consumer protection through market transparency and fair competition".  Canada further
notes that the European Communities argues that the Regulation at issue intends to protect consumers'
expectations that in purchasing sardines they are purchasing Sardina pilchardus , as they associate
sardines with this particular species.  In reply to this last argument, Canada contends that there is no
evidence that this is the expectation of European consumers.  Canada claims that, to the contrary,
preserved sardines other than Sardina pilchardus  have been successfully marketed as "sardines" in the
European Communities market for over fifty years until the adoption of the EC Regulation.  Canada
considers this as evidence that in their perceptions and behaviour, European consumers have
                                                     
20 The New Shorter Oxford English Dictionary , Clarendon Press, Oxford, 1993, defines "sardine" as "a
young pilchard or similar small usu. clupeid marine fish, esp. when cured, preserved, and packed for use asfood".WT/DS231/R
Page 37
recognized these products as sardines and that they expect the term "sardines" to include species other
than Sardina pilchardus .
5.17 Canada also asserts that consumers' expectations relate to the culinary and nutritional
characteristics of the processed products.  They are concerned with the organoleptic properties of the
canned products such as flesh quality, taste and smell as well as nutritional content and its suitabilityfor particular uses.  Canada argues that in all relevant attributes, the product of various species,
including Clupea harengus harengus  and Sardinops sagax , is indistinguishable from
Sardina pilchardus , as confirmed independently by their inclusion as "sardines" under the
Codex Stan 94.
5.18 Moreover, Canada argues that market transparency is normally associated with the provision
of accurate information that is relevant to consum ers to assist them in making informed purchasing
decisions and that the generic term "sardines" is understood by European consumers to refer to arange of species that are prepared and packed in a certain way and when preserved, are similar as to
flavour, texture and end use.  In Canada's view, the word "sardines" conveys meaningful information
that allows consumers to identify these products and, by forcing products that had previously been
identified by European consumers as sardines to use a different trade description, the EC Regulation
itself misleads and confuses consumers.
5.19 Canada further submits that while the European Communities does not explicitly define the
term "fair competition", it indicates that the Regulation at issue is intended to prevent producers of
one product from unfairly benefiting from the reputation associated with another product.  Canada
argues that the European Communities’ rationale is based on the false premise that the term "sardines"
is only associated with the species Sardina pilchardus  and that the European Communities has also
failed to offer any evidence that the reputation associated with Sardina pilchardus  is better than that
associated with other species commonly known as sardines.
5.20 Thus, Canada asserts that the EC Regulation not only fails to fulfil any credible objective of
consumer protection through market transparency and fair competition, but also actively
undermines it.
5.21 With regard to the last element mentioned above, Canada argues that, even if the
EC Regulation did fulfil the objective of consumer protection through market transparency and fair
competition, the EC Regulation is more trade restrictive than necessary, taking account of the risks
non-fulfilment would create.  The language and jurisprudence of the GATT offer guidance to the
interpretation of the TBT Agreement, including Article 2.2.  Under Article 2.2, a measure will be
more trade restrictive than necessary if there is a reasonably available, less trade restrictive alternative
measure that fulfils the Member’s legitimate objective and is consistent with the TBT Agreement.The European Communities’ objective can be met in a less trade restrictive manner by allowing
species other than Sardina pilchardus  to be marketed as preserved sardines in accordance with the
Codex Standard; that is, by including designations that inform consumers of the "country, geographic
area, the species or the common name of the species in accordance with the law and custom of the
country in which the product is sold" (for example "Pacific Sardines", "Peruvian Sardines" or"Canadian Sardines").   Canada recalls that the Appellate Body stated that one aspect of the
determination of whether a WTO-consistent alternative measure is reasonably available is the extent
to which it "contributes to the realization of the end pursued"; that is, the fulfilment of the stated
objective.  Canada argues that the Appellate Body also found that the more vital or important the
common interests or values pursued, the easier it would be to accept as "necessary" measuresdesigned to achieve those ends.  In Canada's view, the exercise of "taking account of the risks non-
fulfilment [of a legitimate objective] would create" when assessing the necessity of a measure under
Article 2.2 of the TBT Agreement can be seen as similar to evaluating the necessity of a measure
under Article XX(b) or (d) of the GATT 1994 in part by considering the importance of the objectiveWT/DS231/R
Page 38
being pursued.  Canada argues that the greater the importance of the objective, the greater the risks
non-fulfilment would create.
5.22 Canada claims that in the present case, the EC Regulation is more trade restrictive than
necessary because there is a less trade restrictive alternative, namely Codex Stan 94, that is reasonably
available, consistent with the TBT Agreement and that would fulfil the European Communities’objective.  Canada argues that a less trade restrictive alternative would be to allow species other than
Sardina pilchardus  to be marketed as preserved sardines in accordance with Codex Stan 94; that is, by
including designations that inform consumers of the "country, geographic area, the species or the
common name of the species in accordance with the law and custom of the country in which the
product is sold"(for example "Pacific Sardines",  "Peruvian Sardines" or "Canadian Sardines").
5.23 Canada concludes that, whether or not the stated objective of consumer protection is a
legitimate objective, the EC Regulation does not fulfil its objective and is, therefore, an unnecessaryobstacle to trade, contrary to Article 2.2 of the TBT Agreement.  Further, the EC Regulation is
inconsistent with Article 2.2 in that it is more trade restrictive than necessary to fulfill a legitimate
objective and has the effect of creating an unnecessary obstacle to international trade.
5. Article 2.1 of the TBT Agreement
5.24 Canada submits that the EC Regulation violates Article 2.1 of the TBT Agreement by
according less favourable treatment to Peruvian preserved sardines of the species Sardinops sagax,
and other like products, than that accorded to domestic and imported preserved sardines of the species
Sardina pilchardus .
5.25 In this connection, Canada considers that Peruvian preserved sardines of the species
Sardinops sagax , and Canadian preserved sardines of the species Clupea harengus harengus  are
"like" domestic and imported preserved sardines of the species Sardina pilchardus :
• They are saltwater, pelagic fish belonging to the taxonomic family Clupeidae  and
when preserved, are of similar size, weight, texture, flavour and nutritional value;
• They share the same end-use; they are prepared, served and consumed
interchangeably;  and
• Peruvian preserved sardines of the species Sardinops sagax , and Canadian preserved
sardines of the species Clupea harengus harengus  have, for some time, been
successfully marketed in the European Communities as "sardines".
5.26 In the view of Canada, the different and discriminatory marketing requirement imposed by
the EC Regulation disrupts the conditions of competition between these like products in favour of
domestic and imported preserved sardines of the species  Sardina pilchardus .  Canada argues that
exporters have identified their products as sardin es in the European Communities for some time and
have developed customer loyalty for their products; thus, by forcing these products to be marketedunder a different description, the EC Regulation denies them the traditional identity and image
associated with the term "sardines" and causes confusion among consumers.  In addition, Canada
argues that by prohibiting the use of the term "sardines" for all species other than  Sardina pilchardus ,
the European Communities has altered the conditio ns of competition in the European Communities
market for preserved sardines and created a monopoly under that name for its own domestic species
and that of a few other countries, such as Morocco, where the European Communities has made a
significant investment in sardine production.WT/DS231/R
Page 39
6. Articles I:1 and III:4 of the GATT 1994
5.27 Canada claims that if the Panel finds that the EC Regulation is not a "technical regulation" for
the purposes of the TBT Agreement, and thus does not violate Article 2.1 of that Agreement, the
EC Regulation is nevertheless inconsistent with Articles I:1 and III:4 of the GATT 1994 because it
accords less favourable treatment to Peruvian preserved sardines of the species Sardinops sagax  and
other like products such as Canadian preserved sardines of the species Clupea harengus harengus ,
than that accorded to like sardines of Europe an Communities origin and those of certain other
countries such as Morocco.  Canada argues that the foregoing analysis of "like product" and "less
favourable treatment" under the TBT Agreement applies equally to an analysis under Articles I:1 and
III:4 of the GATT 1994.
7. Remarks on implementation
5.28 Finally, Canada contends that if the Panel agrees and finds that the EC Regulation violates the
European Communities’ obligations under the TBT Agreement or the GATT 1994, the Panel should
not accept Peru’s request that, pursuant to Article 19.1 of the DSU, it suggests that the
European Communities implements its recommendation by extending the use of the term "sardines"
only to Sardinops sagax.   According to Canada, panels in other disputes have consistently declined to
suggest ways in which Members found to be acting inconsistently could implement theirrecommendations and have deferred instead to the di scretion of Members to decide how best to bring
themselves into conformity.  Canada claims that there is no reason in this case why the Panel should
be any less deferential.
5.29 Moreover, Canada argues that even if the Panel did decide to make a suggestion regarding
implementation, any such suggestion would have to  be consistent with the WTO Agreement.  A
recommendation that the European Communities extends the use of the term "sardines" to
Sardinops sagax  alone would be inconsistent with Articles 2.4, 2.2 and 2.1 of the TBT Agreement and
Articles I:1 and III:4 of the GATT 1994.  If the Panel did choose to suggest ways in which the
European Communities should bring the Regulation into conformity with the WTO Agreement,
Canada contends that the suggestion would have to be based on the Codex Standard and sufficientlybroad to encompass all like products, including the Canadian sardines of the species Clupea harengus
harengus.
B. C
HILE
1. Introduction
5.30 Chile submits that it has a direct trade interest in the dispute as a sardine producer and
exporter of marine products to the European Communities, and that it has a systemic interest in the
proper interpretation and implementation of the WTO Agreements, in particular the TBT Agreement.
5.31 Chile further submits that its request to join the consultations was rejected by the
European Communities, which contended that Chilean exports of Sardinops sagax  were equivalent to
only 0.3 per cent of total European Communities' imports over the last three years.  However, Chile
notes with considerable concern that, in one of its written submissions, the European Communities
points out that FAO figures show that Chilean catches of  Sardinops sagax  were the largest in the
world, even larger than those of Peru.  Chile r ecalls that Article 4.11 of the DSU indicates that
"Whenever a Member other than the consulting Members considers that it has a substantial trade
interest in consultations being held ... such Member may notify the consulting Members and the
DSB…".  This provision adds further that "Suc h Member shall be joined in the consultations,
provided that the Member to which the request for consultations was addressed agrees that the claimof substantial interest is well-founded".  Thus, Chile considers that it has a trade interest in the case
brought by Peru before the DSB, given that, were Peru's arguments to be upheld, part of the ChileanWT/DS231/R
Page 40
production could gain access to the European market in conditions which are presently denied.
Moreover, Chile considers that this interest is, in pr actice, related to the fact that it is one of the main
producers of one species of sardines, as recognized by the European Communities.  In Chile's view, a
Member has a substantial trade interest when its exports are affected, whether positively or
negatively, by the measure at issue.  In most cases, such a measure results in the absence of exports,which is neither equivalent to nor the same as having no trade interest.  To the contrary, the
European Communities seems to consider that, to have a substantial trade interest in this matter, a
Member must be marketing its sardines on the European market, i.e., not be affected by the ban
established by the regulation at issue.  On this premise, all Members which, as a result of the
EC Regulation, are prevented from marketing their sardines on the European market would be
excluded from the consultations.
5.32 Chile argues that the EC Regulation is inconsistent with Articles 2.4, 2.2 and 2.1 of the
TBT Agreement, as well as with Articles I and III of the GATT 1994.
2. Retroactive application of the TBT Agreement
5.33 With regard to whether a Member is required to bring its technical regulations into
conformity with international standards where they exist, Chile argues that the harmonization
commitment must clearly be fulfilled in respect not only of future technical regulations but also ofthose that Members "have … adopted".  Moreover, Article 2.4 of the TBT Agreement covers both the
case in which a relevant international standard exis ts and that in which its completion is imminent.
Although certain changes were not in force at the time the EC Regulation came into effect, Article 2.3
of the TBT Agreement indicates that a regulation sh all not be maintained if the objective "can be
addressed in a less trade-restrictive manner".
5.34 With regard to the European Communities' argument that the TBT Agreement, and in
particular Article 2, does not apply to the EC Regulation inasmuch as the latter predates the entry into
force of the WTO Agreements, including the TBT Agreement, Chile refers to the content of
Article XVI:4 of the WTO Agreement.  Chile also submits that nothing restricts this provision to
laws, regulations and administrative procedures passed subsequent to the entry into force of theWTO Agreement.
5.35 In addition, Chile submits that member States of the European Communities, by consenting to
the development of Codex Stan 94, must have been aware of the existence of the EC Regulation at
issue, which should have been brought into conf ormity with the Codex Stan 94.  Therefore, Chile
considers that following the logic of Article 2.4 of the TBT Agreement, the EC Regulation must be
based on relevant international standards, namely those adopted by member States of the
European Communities in the Codex Alimentarius Commission.  Interpreting Article 2.4 of theTBT Agreement in any other way would render Article XVI:4 of the WTO Agreement ineffective and
redundant.  As a final point on this particular issue, Chile argues that Article 2 of the TBT Agreement
is based on the previous Tokyo Round Standards Code, which contained similar obligations.
3. Article 2.4 of the TBT Agreement
5.36 Chile contends that the international nature of the Codex Alimentarius Commission cannot be
questioned, especially since it is an entity attached to the FAO and the WHO, both of which are
international organizations par excellence.  Furthermore, the standards developed by the
Codex Alimentarius Commission comply with the pr inciples of transparency, openness, impartiality,
relevance and consensus set out in the Decision of the TBT Committee.  Chile also argues that all the
member States of the European Communities (which are also members of the Codex AlimentariusCommission) contributed, by way of consen sus, to the development of Codex Stan 94.WT/DS231/R
Page 41
5.37 Chile states that Codex Stan 94 applies to around 20 types of sardines, including
Sardinops sagax .  Chile argues that, pursuant to paragraph 6.1.1 of this internationally accepted
standard, it can market its sardines on the European market under the following names:
• Sardina chilena (Chilean sardine)
• Sardina de Chile (Sardine from Chile)
• Sardina del Pacífico (Pacific sardine)
• Sardina Sardinops sagax  (Sardinops sagax sardine)
5.38 Chile disagrees with the interpretation of the European Communities of Article 2.4 of the
TBT Agreement and argues that the reference in Article 2.4 to "as a basis for" affords each Memberthe possibility of adapting an international standard to its own reality or specific individual
circumstances, without altering the objectives of that international standard, unless it (or its
components) is an ineffective or inappropriate means for the fulfilment of the legitimate objectives
pursued,  and in such case the Member should justify why this is so.  The question that arises here is
whether Codex Stan 94 is an effective and appropriate means for the fulfilment of the objectivespursued by the European Communities.  Chile notes that the aim of the EC Regulation at issue is "to
keep products of unsatisfactory quality off the market" and to ensure the "correct information and
protection of the consumer".  Chile argues that these are also the objectives of the Codex Stan 94
which is an effective and appropriate means to fulfil the objectives set out in the EC Regulation.
4. Article 2.2 of the TBT Agreement
5.39 Chile also claims that the EC Regulation is an unnecessary obstacle to trade.  Chile argues
that reserving a trade name exclusively for one particular species gives it a competitive advantageover other like products because it imposes the use of names with negative connotations, thus
bringing down their prices and triggering an adverse reaction on the part of the consumers.
C. C
OLOMBIA
1. Introduction
5.40 Colombia submits that it has a systemic interest in important issues of principle and in the
legal debate introduced by Peru with regard to the TBT Agreement.
5.41 Colombia agrees with Peru that the limits of competence of any Panel are its terms of
reference pursuant to Article 7 of the DSU.  However, Colombia argues that these terms of reference
should be understood in the light of Articles 10 and 11 of the DSU, which require the Panel to
determine the applicability of the covered agreements, a function which should be fulfilled on thebasis of the arguments put forward by all parties to  the dispute, including those put forward by third
parties.  In this respect, any attempt to restrict th e rights of third parties to a dispute would not only be
inappropriate for the multilateral trading system but also contrary to the DSU.
2. Retroactive application of the TBT Agreement
5.42 Concerning the European Communities' argument that in pursuance of Article 28 of the
Vienna Convention, Codex Stan 94 would not be a relevant international standard because
Codex Stan 94 did not exist at the time the EC Regulation was enacted, Colombia submits that such
an argument lacks any real legal basis and would have serious implications for the fulfilment of
multilateral commitments.  In this connection, Colombia supports Canada's submission concerning
the retroactive application of the TBT Agreement and asserts that, if the interpretation put forward bythe European Communities were to be accepted, the scope of WTO commitments would be arbitrarily
restricted.WT/DS231/R
Page 42
5.43 Moreover, Colombia submits that the adoption of Codex Stan 94 subsequent to the date of
entry into force of the EC Regulation does not affect its status as an international standard given that
the obligation established in the TBT Agreement does not provide for any form of exemption from
which a differentiation of Members' obligations, as of the time when a national technical regulation
comes into effect, can be inferred.   
3. Article 2.4 of the TBT Agreement
5.44 In Colombia's opinion, the EC Regulation is inconsistent with Article 2.4 of the
TBT Agreement.  Colombia further submits that the Codex Alimentarius Commission is a competent
international standardizing body within the meaning of Articles 1.1 and 2.6 of the TBT Agreement
and that Codex Stan 94 is an international standard.
5.45 Colombia considers that the identification of the elements which would exempt a country
from implementing an international standard because it is an ineffective or inappropriate means to
fulfill a legitimate objective must be drawn upon the examples set out in Article 2.4 of the
TBT Agreement.  It is Colombia's view that Article 2.4, by mentioning climatic or geographical
factors, clearly restricts such exemption from th e implementation of an international standard to
objective elements.
5.46 Colombia contends that under Article 2.4 of, and the preamble to, the TBT Agreement,
WTO Members are not authorized to hinder the market entry of a product by arguing that its quality
characteristics are not identical to those of the products to which its consumers are accustomed.
Colombia recognizes the right of WTO Members to take appropriate measures to prevent consumers
from being misled.  However, Colombia argues that the possibility of enacting a regulation to address
such a concern is limited by the TBT Agreement which states that a regulation should not bediscriminatory and should not constitute a disguised restriction on trade.
4. Article 2.2 of the TBT Agreement
5.47 With respect to Article 2.2 of the TBT Agreement and the elements that must be established
for there to be a violation, Colombia argues that the determination of whether a technical regulation is
more trade-restrictive than necessary should not be contingent upon a demonstration of trade-restrictive effects, such as the absence of the product on a given market.  In the view of Colombia, the
reading of Article 2.2 of the TBT Agreement in conjunction with Article 2.4 covers cases where no
international standards exist or where they exist but prove to be ineffective or inappropriate.
5. Remarks on implementation
5.48 Colombia notes that a particularly significant aspect of the dispute will be the
recommendation on the way in which the decision is to be implemented.  If the arguments advanced
by Peru on the inconsistency of the measure with the TBT Agreement prove successful, it isColombia's understanding that the Panel report will have to be implemented through a measure
consistent with the multilateral agreements.
D. E
CUADOR
1. Introduction
5.49 Ecuador has trade and systemic interests in this dispute because its sardine exports are
adversely affected by the EC Regulation and because it considers that this case offers an opportunity
to clarify important aspects of the proper application of the TBT Agreement.WT/DS231/R
Page 43
5.50 Ecuador argues that the fundamental incompatib ility of the EC Regulation with Article 2.4 of
the TBT Agreement leads to additional discrimination th at in turn is inconsistent with Article 2.2 and
2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994.
2. Retroactive application of the TBT Agreement
5.51 Ecuador disagrees with the European Communities' argument that Codex Stan 94 is not
relevant because the measure set forth in the Regulation at issue predates the entry into force of
Codex Stan 94.  Ecuador argues that on the strength of such an argument, any WTO Member could be
exempted from countless obligations on the grounds that WTO-incompatible measures predating the
entry into force of international rules or the WT O Agreements themselves need not be amended or
adjusted to new international commitments.  Ecuador contends that if the EC Regulation was not
compatible at the time the TBT Agreement came in to force, the European Communities was under the
obligation to bring it in line with all WTO Agreements, in pursuance of Article XVI of theWTO Agreement.
3. Article 2.4 of the TBT Agreement
5.52 Ecuador argues that WTO Members have the obligation to comply with Article 2.4 of the
TBT Agreement and are therefore required to bring their technical regulations into conformity with
international standards where they exist and are relevant.
5.53 With regard to the burden of proof, Ecuador submits that the initial burden of proof lies with
the complaining party to establish if the measure which is challenged presents a case of inconsistency
with Articles 2.4 and 2.2 of the TBT Agreement.  Ecuador submits that Peru has demonstrated that an
international standard exists (the Codex Stan 94), that it is relevant and that the
European Communities is not using this standar d.  Therefore, the European Communities has the
obligation to base the application of its technical regulation on Codex Stan 94.  Ecuador contends that
the European Communities has, in turn, to respond to Peru's arguments and justify why the
international standard has not been used.  Ecuado r notes that the European Communities has provided
no evidence that the standard in question was irrelevant.  Hence, Ecuador sees no justification for the
European Communities' failure to apply a relevant international standard.
5.54 Ecuador further argues that Codex Stan 94 is adequate to fulfil the legitimate objectives
pursued by the EC Regulation, because it does not mislead the consumers.  Ecuador notes that
Codex Stan 94 clearly stipulates that sardines of species other than  Sardina pilchardus  shall be
described as "X" sardines;  this would be the case of the name "Pacific sardine" used for sardines of
the species Sardinops sagax .  Moreover, Ecuador asserts that the text of the Codex Stan 94 in Spanish
is quite clear in that countries can choose to use the denomination "sardines X", where "X" is the
country of origin or a geographical area, with the name of the species or the common name.
4. Article 2.2 of the TBT Agreement
5.55 Ecuador argues that the EC Regulation creates an unnecessary obstacle to trade, contrary to
Article 2.2 of the TBT Agreement.
5.56 In Ecuador's view, the EC Regulation serves protectionist purposes with trade-distorting
effects beyond those already affecting the sector as a result of fisheries subsidies in the form ofCommunity aid to offset marketing costs for products such as sardines.  Ecuador notes the
European Communities' argument that its Regulation has the "aim of ensuring consumer protection
through market transparency and fair competition".  In practice, Ecuador argues, this aim is not being
met;  indeed, the EC Regulation allows no competition in that it excludes from the market other types
of sardines that would be able to compete effe ctively under an "X" trade description affording theWT/DS231/R
Page 44
consumer freedom of choice and the transparency that a label based on a relevant international
standard such as the Codex Stan 94 could provide.
5. Article 2.1 of the TBT Agreement
5.57 With regard to Article 2.1 of the TBT Agreement , Ecuador argues that the EC Regulation is
inconsistent with the national-treatment principle because sardines of a trade description other thanSardina pilchardus  are accorded less favourable treatment by differentiating between the species of
fish and between the origin of the product.  According to Ecuador, Peru is correct in arguing that these
are "like" products, primarily because canned sardines of the species  pilchardus  and of the species
sagax sagax  are identical products in terms of their physical characteristics – especially flavour,
texture and nutritional value – and because they are interchangeable in terms of use and consumption.
In Ecuador's view, this is borne out by the fact that sardines of species other than Sardina pilchardus
were successfully marketed in the European Co mmunities prior to the entry into force of the
EC Regulation, as demonstrated by both Peru and Canada and also by the statistics provided by the
European Communities.
6. Articles I:1 and III:4 of the GATT 1994
5.58 Finally, Ecuador considers that the foregoing analysis proving discrimination by the
European Communities within the context of th e TBT Agreement is also applicable for the
determination of inconsistency of the EC Regulation with Articles I:1 and III:4 of the GATT 1994.
7. Final remarks
5.59 In the light of the above considerations, Ecuador submits that the Panel must find that the
EC Regulation is in violation of the European Communities' obligations under WTO Agreements and
recommend that the European Communities bring its measure into conformity with those obligations.
E. U
NITED STATES
1. Introduction
5.60 The United States indicates that there are a number of sardine species that are harvested in the
United States, but that are not exported to the European Communities because of the restrictive
labeling requirements in the European Communities.  They are, however, sold to many parts of therest of the world.  These species include Clupea Harengus,  Sardinops caeruleus , Sardinops Sagax ,
Harengula jaguana , Sardinella  and Sardinella longiceps .  The United States has no regulations
requiring the use of specific names for these fish species.  There is, however, a general requirement
that labels should not be false or misleading.  All of  these fish either can be, or actually are, marketed
in the United States under the name "sardines", among other names.
5.61 The United States endorses Peru’s request that the Panel exercise judicial restraint upon
finding that the EC Regulation breaches Article 2.4 of the TBT Agreement, and not reach Peru’s otherclaims.  According to the United States, panels should address those claims necessary to resolve the
dispute, and, as Peru recognizes, that can be accomplished through consideration of Article 2.4 alone.
5.62 Concerning the burden of proof, the United States submits that, as recognized by the
Appellate Body in US — Wool Shirts and Blouses,  EC — Hormones  and other reports, the
complaining party has the burden of presenting evidence and arguments sufficient to make a prima
facie  demonstration of each claim that the measure at issue is inconsistent with a provision of aWT/DS231/R
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covered agreement.21  This burden is not shifted to the responding party simply because the obligation
identified is characterized as an "exception".22  However, the responding party would have the burden
with respect to an "affirmative defense" that a br each of an obligation is justified by a separate
provision that would excuse the breach.23
2. Application of the TBT Agreement
5.63 The United States argues that the TBT Agreement applies in full to technical regulations in
place on or after 1 January 1995, regardless of whether the regulation was put in place before that
date.  It further argues that labeling requirements that are "mandatory" and "apply to a product,
process or production method" constitute "technical regulations."
3. Article 2.4 of the TBT Agreement
5.64 The United States argues that the EC Regulation is inconsistent with Article 2.4 of the
TBT Agreement and that it is not based on the Codex Stan 94, an international standard for purposesof the TBT Agreement.  It notes that although Codex Stan 94 specifically provides for the label
"X sardines", the EC Regulation specifically prohibits that label, with no plausible justification for
contradicting the standard.
5.65 Concerning the question of whether Codex Stan 94 is a relevant international standard, the
United States notes that relevancy does not refer to the timing of the international standard, but onlyto its subject matter - i.e., whether an internationa l standard is apposite, pertinent or germane to the
issue for which the technical regulation is required.  The United States argues that the reference to
"their completion is imminent" in Article 2.4 of the TBT Agreement in relation to "relevant
international standards" makes clear that the question of relevance is separate from the question of the
date on which the international standard came into existence.
5.66 Concerning the requirement of Article 2.4 of the TBT Agreement, that Members "shall use
[relevant international standards] as a basis for" their technical regulations, the United States recalls
Canada's argument that the phrase "as a basis for" should be construed consistently with "based on".
The United States submits that the Appellate Body defined the term as "[a] thing is commonly said to
be 'based on' another thing when the former 'stands' or is 'founded' or 'built' upon or 'is supported by'the latter."
24  It  argues that this statement by the Appellate Body does not mean that the technical
regulation must "conform" to the terms of the relevant international standard, but it does mean that a
Member’s technical regulation must be founded upon or supported by the standard, insofar as the
standard is "relevant," not "ineffective" and not "inappropriate."
5.67 The United States further argues that there is no reason why the application of Codex Stan 94,
in particular permitting other species to be marketed as "X" sardines, would be an ineffective or
inappropriate means for meeting the European Communities’ stated objectives of consumer
protection, transparency and fair competition.  To the contrary, according to the United States there is
ample evidence indicating that the Regulation at issue undermines the European Communities’
objectives, since European consumers have in fact come to know the Peruvian product as a form of
sardines and are likely to be confused by the use of other names.  Indeed, the use of a proper
descriptor prior to the term "sardines," as provided  for in the international standard, appears to be a
very effective means to assure transparency and protect the consumer.
                                                     
21 European Communities – Measures C oncerning Meat and Meat Products ("EC – Hormone s"),
WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, paras. 104 - 109.
22 Appellate Body Report, EC – Hormones , para. 104.
23 Appellate Body Report, EC – Hormones , para. 109.
24 Appellate Body Report, EC – Hormones , para. 163.WT/DS231/R
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5.68 In the view of the United States, Codex Stan 94 does not anticipate a country choosing
between "X Sardines" and the common name of the species.  Rather, under the standard, a country
permits the named sardine species to be sold as "X Sardines", where "X" is a country, a geographic
area, a species, or the common name of the species.  The United States argues that under the standard,
the product could be labelled, for example, "Peruv ian sardines", "Pacific sardines", or "Atlantic
herring sardines".  The standard does not envision the "common name" as an alternative to
"X sardines", only as an option for "X" in the name "X Sardines."  This interpretation is clear in the
English version of Codex Stan 94, but is even more clear in the French version, which states that
species other than Sardina Pichardus  shall be called "'X Sardines', 'X' designating a country, a
geographic area, a species, or the common name".25
4. Article 2.2 of the TBT Agreement
5.69 Concerning Article 2.2 of the TBT Agreement, the United States argues that in order for a
Member to show that a government’s technical regulation is more trade-restrictive than necessary to
fulfill a legitimate objective, it would need to show that there is another measure that is reasonably
available, that would fulfill the regulating Member’s legitimate objectives, and that is significantly
less restrictive to trade.
5.70 The United States considers that in this case  there are clear alternatives which meet these
requirements.  In addition to simply removing the technical regulation, allowing other species to be
marketed as "X sardines" would fulfill the European Communities’ objectives of consumer protection,
transparency and fair competition.  The alternative is reasonably available, since there are no
impediments to such a change, nor would there be  any disruption to markets where consumers are
already accustomed to seeing the products at issue referred to as "sardines."  Finally, the alternativewould be significantly less trade restrictive, inasmuch as there is now a complete ban on the
marketing of several species as "sardines," with or without a qualifier.  Further, the United States
argues that there is no requirement under Article 2.2 to demonstrate a trade restrictive effect as such;
the only requirement is to show that a measure is more trade restrictive than necessary.  With respect
to this dispute, there is no doubt that a measure prohibiting the use of the term "sardines" inconnection with sardine products is trade restrictive.
5. Remarks on implementation
5.71 Finally, the United States argues that the Panel should refrain from offering a specific
suggestion on how the European Communities should comply in this case.  This case is not unusual in
this regard, and the European Communities, like othe r Members, has the right to determine how it will
bring its measure into compliance.
F. V
ENEZUELA
1. Introduction
5.72 Venezuela submits that its participation as a third party in this dispute is based on a systemic
interest relating to the correct interpretation of the TBT Agreement, in particular Article 2.4.
Venezuela submits that it also has a genuine trade interest, inasmuch as the conditions for the
marketing of canned sardines on the European market, as set out in the EC Regulation, are prejudicialto Venezuelan exports of sardines to that market, which is a major destination for Venezuela's export
industry.
                                                     
25 "Sardines X", "X" désignant un pays, une zone géographique, l’espèce ou le nom commun de
l’espèce …".WT/DS231/R
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2. Remarks on the term "sardines"
5.73 Venezuela argues that from the standpoint of statistical data, the term "sardines", in the broad
sense, has been used to cover species other than Sardina Pilchardus .  Organizations such as the FAO
classify under the same heading species of the genera Sardina , Sardinops , Opisthonema , Clupea  and
Sardinella , inter alia.26  The FAO also groups sardines, sardinella and brisling or sprat production,
import and export statistics in a single table, which is not confined to the species
Sardina Pilchardus.27  Likewise, the word "sardines" is used to identify various species, according to
relevant European and international publications.28  In the view of Venezuela, the above facts point to
the universality of the term "sardines".
5.74 Venezuela also submits that the broad use of a name is not exclusive to sardines;  on the
contrary, there is a variety of other examples.  Mussels, for instance, are known under the scientific
names of Mytilus edulus , Perna Perna  and Perna viridis , but "mussel" is the common trade
description for all these species.  Another example given by Venezuela is tuna, whose trade
description includes bluefin tuna ( Tunnus thynnus ), yellowfin tuna ( Tunnus albacares ), bigeye tuna
(Tunnus obesus ) and skipjack tuna ( Katsuwonus pelamis ).  Thus, Venezuela argues that the use of
generic nomenclature to justify trade descriptions is not relevant and that probably the case of the
European sardines is the only one where attempts have been made to match the trade description withthe scientific name.  Even where both terms obviously coincide, it is not possible to argue exclusivity
in respect of a trade description, because this practice is not in universal use.
5.75 Venezuela further argues that scientific names of species may vary over time as a result of
taxonomic revision.  Thus, species of the genus Sardinops  were initially named Sardina spp , as was
the case of Sardinops caeruleus , which is a synonym for Sardina sagax  and Alausa californica , and
the species Sardinops neopilchardus , which is a synonym for Sardinella neopilchardus .  Similarly,
Sardina pilchardus  and Sardinella aurita  were initially described as belonging to the genus  Clupea  –
the former in 1792 under the name Clupea pilchardus  and the latter in 1810 under the name
Clupea allecia , a term which is also used for the Australian sardine pilchard.
3. Article 2.4 of the TBT Agreement
5.76 Venezuela argues that the labelling requirements for preserved sardines laid down in the
EC Regulation do not comply with Article 2.4 of the TBT Agreement because they disregard the
relevant international standards.  In its view, the EC Regulation, as a technical regulation, must not
only recognize but also apply international standards such as those established in Codex Stan 94.
5.77 Venezuela argues that the term "as a basis" in Article 2.4 of the TBT Agreement should be
interpreted to mean "shall be based on, in such a way as not to contradict any of its aspects".
Therefore, Venezuela argues that the EC Regulation cannot be considered to "be based on"Codex Stan 94 because the EC Regulation does not provide for the possibility of canned products
prepared from other species of sardines (other than Sardina pilchardus)  to include the word "sardines"
to indicate the species from which the canned product is prepared.  On the contrary, Codex Stan 94
stipulates that the common name "sardines" may be  used for products made from species other than
Sardina pilchardus , provided that (a) the name is supplemented by an indication identifying the
country of origin, the geographical area in which the species is to be found or the name of the species,
or (b) the product is made under the common name in the language of the member State of the
European Communities in which it is sold.
                                                     
26 See FAO Yearbook of Fishery Statistics, Catches and Landings, Vol. 80, 1995, pp. 308 ff.
27 See FAO Yearbook of Fishery Statistics, Commodities, Vol. 89, p. 102.
28 See Multilingual Illustrated Dictionary of Aquatic Animals and Plants, and www.fishbase.org.WT/DS231/R
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5.78 Venezuela submits that the Codex Alimentarius is the source of standards, codes of practice
and internationally accepted guidelines that have become a global benchmark for food consumers,
producers and manufacturers, national food control agencies and the international food trade.
Venezuela also points out that Codex's contribution to the international harmonization of food
standards, by providing for the protection of consumer health and guaranteeing fair practices, isindisputable.
5.79 Venezuela contends that species of different genera are marketed under the name
"X sardines" in almost every country in the worl d, and points out that, in the past, the name was
acceptable for describing different genera, including in some countries of the European Communities.
In Venezuela's view, the European Communities' argument that if Sardinops  sagax products were to
be marketed as "X sardines", they would benefit from the reputation enjoyed by another product
(namely sardines) and the customer would be misled, is without merit.  Contrary to theEuropean Communities' assumption that the term "sardines" is used exclusively at the European level,
Venezuela indicates that Latin America and North America have given the name "sardines" to a
finished product prepared from a different raw material which, however, possesses similar
organoleptic characteristics.  Moreover, in Venezuela, the term "sardines" is used to describe a
product prepared essentially from the raw material  Sardinella aurita.   For example, in Venezuela's
view, it would be hard to imagine consumers of caviar (i.e., a finished product), for example, being
misled by the product's presentation under the name Iranian, Russian or American caviar, knowing as
everyone does, that each involves a different type of sturgeon.
5.80 Venezuela argues that in view of the above-mentioned facts and, given the similarities
between the species, all that would need to be done in order to distinguish one product from anotherfrom the standpoint of the objectives of the EC Regulation would be to use the common name
"sardines", accompanied by a reference to its geographical area of origin – in other words, to use the
name "X sardines", as provided for in the Codex Stan 94.  Consumers purchasing products prepared
from X sardines would thus know that these were made from sardines of a species other than the type
found in European waters.
5.81 Venezuela also emphasizes that the legitimate objectives set forth in the TBT Agreement are
to promote achievement of the goals of the GATT 1994 and to ensure that technical regulations and
rules, including those relating to labelling, do not create unnecessary barriers to international trade.
Venezuela argues that the objective of the EC Regulation is to enhance the profitability of sardine
production in the Community, the market outlets therefor, as well as to facilitate disposal of its
products, is not compatible with the above objectives.
29  Venezuela considers that, if it is a matter of
fulfilling the objective laid down in the EC Regu lation, there are other trade mechanisms, within the
framework of the WTO, that can be used to that end, such as the application of tariff regimes and
more specific tariff regulations.
4. Article 2.2 of the TBT Agreement
5.82 Venezuela submits that the objectives of the EC Regulation can be achieved by means of a
less trade-restrictive measure.  Venezuela argues that the EC Regulation has a restrictive impact giventhat it prevents countries that prepare products from fish of species similar to  Sardina pilchardus
from marketing such products under a name containing the word "sardines", although this is allowed
by the relevant international standard.  Venezuela is of the opinion that this diminishes the value of
the products for the European customer, since their perceived value of a product using a scientific
name as a commercial name bears no relation to the true quality of the product.   This fact  places those
products at a disadvantage in competition with like European products.  This type of measure is
discriminatory in terms of where the sardines we re caught, by reserving exclusivity of the trade
description for products of European origin.
                                                     
29 Based on the introductory remarks to Council Regulation Nº 2136/89 of 21 June 1989.WT/DS231/R
Page 49
5. Remarks on implementation
5.83 If the Panel decides to suggest any action to the European Communities, Venezuela requests
that the European Communities should be required to bring its Regulation into line with the
WTO Agreement and to agree that its Regulation be based on the Codex Alimentarius, in other words,
that it be made sufficiently broad to include similar types of sardines, including the Venezuelansardine Sardinella aurita.
VI. INTERIM REVIEW
30
6.1 Our interim report was issued to the parties on 28 March 2002, pursuant to Article 15.2 of the
Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU").
On 5 April 2002, the European Communities requested us to review certain aspects of the interim
report.  Peru did not have any comments on the interim report.  Neither of the parties requested us to
hold an interim review meeting.  When sending the interim report to the parties, we provided eachparty an opportunity to transmit in writing its  comments on the other party's interim review
comments, if no meeting was requested.  In a letter dated 11 April 2002, Peru requested that we not
consider the new evidence submitted by the European Communities.  We carefully reviewed the
arguments and issues presented by the European Communities and each issue is addressed below.
6.2 The European Communities requested a change to the summary of the
European Communities' arguments in paragraph 4.73.  We would like to point out that the
European Communities' arguments are fully reflected in paragraphs 4.73 and 4.81.
6.3 The European Communities requested us to eith er change the heading of Chapter A of the
findings from "Measure at issue" to "Product at issue", or to delete the two first paragraphs of
Chapter A (7.1-7.2).  We are of the view that the repetition, in the beginning of the findings section,of the basic characteristics of the two fish species at issue in the dispute is useful.  As suggested by the
European Communities, we have inserted paragraphs 7.1 and 7.2 under the newly created heading
entitled "Products at issue".
6.4 The European Communities made the following comments on paragraphs 7.27 and 7.28 of
the findings:  "A regulator cannot set by legislative means the characteristics that are 'intrinsic' to aproduct.  By definition, these are present in nature, they exist within the product and do not come
from the outside.  Consequently, it is an error to qualify as a 'product characteristic' the fact that
preserved sardines must be prepared from fish of the species Sardina .  The Codex Alimentarius, by
reserving the term 'sardines' only to fish of the species Sardina , recognizes this fact".  We do not
agree with the notion that regulators cannot establish intrinsic product characteristics by legislative
means and do not consider that it is an error to qualify as a "product characteristic" the fact that
preserved sardines must be prepared from fish of the species Sardina pilchardus.   The Appellate Body
in EC — Asbestos  unequivocally stated that "'product characteristics' include, not only features and
qualities intrinsic  to the product itself, but also related 'characteristics' such as the means of
identification, the presentation and the appearance of a product" (emphasis added).
31  As we explained
in our findings (paragraphs 7.26 and 7.27), various provisions of the EC Regulation lay down product
characteristics that deal with features and qualities affecting composition, size, shape, colour andtexture of preserved sardines.  One product characteristic required by Article 2 of the EC Regulation
is that preserved sardines must be prepared exclusively from fish of the species Sardina pilchardus .
As we pointed out, this product characteristic must be met for the product to be "marketed as
                                                     
30 Pursuant to Article 15.3 of the DSU, "The findings of the final panel report shall include a discussion
of the arguments made at the interim review stage".  The following section entitled "interim review" therefore
forms part of the findings.
31 Appellate Body Report, European Communities — Measures Affecting Asbestos and Asbestos-
Containing Products  ("EC — Asbestos "), WT/DS135/AB/R, adopted 5 April 2001, para. 67.WT/DS231/R
Page 50
preserved sardines and under the trade description referred to in Article 7" of the EC Regulation.  We
considered that the requirement to use exclusively Sardina pilchardus  is a product characteristic as it
objectively defines features and qualities of preserved sardines for the purposes of their "market[ing]
as preserved sardines and under the trade description referred to in Article 7" of the EC Regulation.
For these reasons, we have not made any changes to paragraphs 7.26 and 7.27.
6.5 With respect to the section dealing with whether Codex Stan 94 is a relevant international
standard, the European Communities  claimed that we did not consider the fact that Codex Stan 94 had
only been accepted by 18 countries, of which only four accepted it fully, and that neither Peru nor any
member States of the European Communities were among these 18 countries.  Therefore, the
European Communities asked us to justify why we disregarded this argument.  We did consider this
argument but were not persuaded that this argument was relevant in determining whether
Codex Stan 94 is an international standard.  We note that the European Communities is referring tothe Acceptance Procedure set by the Codex Alimentarius Commission which allows a country to
accept a Codex standard in accordance with its established legal and administrative procedures.  We
recall that Annex 1.2 of the Agreement on Technical Barriers to Trade (the "TBT Agreement")
defines a standard as a "document approved by a recognized body" and does not require that the
standard be accepted by countries as part of their domestic law.  Codex Stan 94 was adopted by theCodex Alimentarius Commission and we consider that this is the relevant factor for purposes of
determining the relevance of an international st andard within the meaning of the TBT Agreement.
6.6 With regard to paragraph 7.66 of the findings, the European Communities asserted that our
reasoning did not accurately reflect the "conditional argument that … there would be less doubts
about this [the status of the Codex Alimentarius Commission as an international standardization body]
if the European Communities would be allowed to become a member".  We note that all member
States of the European Communities are parties to the Codex Alimentarius Commission and that the
European Communities is an observer at the Commission.  We stated in the findings that Annex 1.4 of
the TBT Agreement defines an "international body" as a "[b]ody or system whose membership is
open to the relevant bodies of at least all Members".  According to Rule 1 of the Statutes and Rules ofProcedures of the Codex Alimentarius Commi ssion, "[m]embership of the joint FAO/WHO Codex
Alimentarius Commission … is open to all Member Nations and Associate Members of the FAO
and/or WHO".  As membership to the Codex Alim entarius Commission is open to all WTO Members,
we found that it is an international body within the meaning of Annex 1.4 of the TBT Agreement and
the European Communities did not contest the status of the Codex Alimentarius Commission as an
international standardization body for the purposes of the TBT Agreement.  We have included in the
descriptive part the European Communities' argume nt that the status of the Codex Alimentarius
Commission as an international standardization body would come into doubt if the
European Communities were not allowed to become a member of the Codex.
6.7 The European Communities commented on paragraphs 7.93 to 7.96 where it felt that its
position on the understanding of the text of paragraph 6.1.1(ii) of Codex Stan 94 had not been
adequately reflected.  The European Comm unities requested us to justify why the
European Communities' arguments about the editorial change were not persuasive.  The
European Communities also asserted that there were  differences between the three linguistic versions
of Codex Stan 94.  Contrary to the European Communities' assertion, we dealt with the
European Communities' arguments set out in paragraphs 4.34 and 4.48 and actually explained why we
were not persuaded that the negotiating history supported the European Communities' interpretationthat Codex Stan 94 allows Members to choose betw een "X sardines" on the one hand and the common
name of the species in accordance with the law and custom of the country in which the product is sold
on the other hand.  Our reasoning on this issue was in threefold.  First, the text of Codex Stan 94 is
clear on its face that it provides Members with four  alternatives.  Second, the deletion of the third
alternative and the adoption of the current text indicate that the latter reflects the true intentions of thedrafters.  Third, that the change is referred to as "editorial" in the minutes of the meeting suggests that
both the earlier version and the final text expressed the same view but the final text did so moreWT/DS231/R
Page 51
succinctly.  Moreover, we considered that Codex standards are adopted in a procedurally correct
manner and were not persuaded that Codex Stan 94 was not adopted in a procedurally correct manner.
Concerning the European Communities' argument in respect of the three different linguistic versions,
we stated, in paragraphs 7.108 and 7.109 of the findings, that there was no difference between the
French and the English text, and that the Spanish version confirmed the view that the name of thespecies or common name must be added to the word "sardines" and not replace the word "sardines".
Therefore, we reject the arguments made by the European Communities with respect to these
paragraphs.
6.8 The European Communities reminded us of its requests that the Codex Alimentarius
Commission be consulted on the meaning of the text of paragraph 6.1.1(ii).  We recall the
European Communities' statement at the Second Substantive Meeting that "[i]f the Panel should have
any doubt that the interpretation of Article 6.1.1(ii) [of] Codex Stan 94 advanced by theEuropean Communities is correct and considers that it will reach the question of the meaning of
Article 6.1.1(ii) of Codex Stan 94, the European Communities invites the Panel to ask the Codex
Alimentarius to provide its view of the meaning of th is text".  This request is reflected in paragraph
4.49 of the descriptive part.  In accordance with Article 13 of the DSU, it is the right of the panel to
seek or refuse to seek information.
32  In this regard, in EC — Hormones , the Appellate Body stated
that Article 13 of the DSU "enable[s] panels to seek information and advice as they deem appropriate
in a particular case".33  Also, in US — Shrimp , the Appellate Body considered that "a panel also has
the authority to accept or reject  any information or advice which it may have sought and received, or
to  make some other appropriate disposition  thereof.  It is particularly within the province and the
authority of a panel to determine  the need for information and  advice  in a specific case…".34  In this
case, we determined that there was no need to seek information from the Codex Alimentarius
Commission.
6.9 The European Communities requested that the adjective "European" in front of the word
"sardines" in the seventh line of paragraph 7.124 be deleted, as well as the whole sentence that
follows.  The European Communities argued that "[i]t is, in fact, factually incorrect to state that 'if a
hermetically sealed container is labelled simply as 'sardines' without any qualification, the
European consumer would know that it contains Eu ropean sardines".  The EC Regulation, in fact,
only requires that preserved sardines be made of Sardina pilchardus , irrespective of its origin of
landing.  Accordingly, what a European consumer knows when buying a hermetically sealed
container labelled simply as 'sardines' is that it contains sardines, i.e. Sardina pilchardus ; it does not
know the origin of the fish".  We recall a stat ement made by the European Communities in response
to a question posed by Peru at the First Substantive Meeting: "The European consumers, when offereda can labelled 'sardines' expect to buy the product  they know under this name, the European sardines,
even if it has been caught in non-European waters."  We were not persuaded that the European
consumers would consider "sardines" combined with the name of a country or geographic area to be
European sardines for the reasons set out in paragraphs 7.129 to 7.136 of the findings.  We therefore
decline to delete the word "European" and the sentence that follows.
6.10 The European Communities objected to the summary, in paragraph 7.127, of the
European Communities' statement that the EC Regulation created "uniform" consumer expectations.
The European Communities claimed that this assertion was used out of its context.  We disagree with
this claim and would like to recall the statement made by the European Communities in its entirety:
"In most parts of the European Communities, especially in the production countries, the term 'sardine'
                                                     
32 "Panels may seek information from any relevant source and may consult experts to obtain their
opinion on certain aspects of the matter" (emphasis added).
33 European Communities – Measures C oncerning Meat and Meat Products ("EC – Hormone s"),
WT/DS26/AB/R and WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, para. 147.
34 United States — Import Prohibition of Certain Shrimp and Shrimp Products  ("US — Shrimp "),
WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, para. 104.WT/DS231/R
Page 52
has historically made reference only to the Sardina pilchardus . [Footnote omitted] However, other
species like sprats ( Sprattus sprattus ) were sold in tiny quantities on the European Communities
market with the denomination 'brisling sardines'.  In view of the confusion that this created in the
market place, the European Communities has constantly  tried to clarify the situation, both externally
(note of 16/04/73 to Norway [footnote omitted]) a nd internally (Regulation 2136/89).  This situation
has now created uniform consumer expectations throughout the European Communities, the term
'sardine' referring only to a preserve made from Sardina pilchardus ".  This entire quote is set out in
paragraph 7.125.  In light of this, we reject the European Communities' claim that we used its
argument "out of its context, that the EC Regulation artificially created 'uniform consumer
expectations'".
6.11 The European Communities  further requested the deletion of the adjective "trade restrictive"
in front of the word "measure" in the following sentence (paragraph 7.127): "If we were to accept thata WTO Member can 'create' consumer expectations and thereafter find justification for the trade-
restrictive measure which created those consumer expectations in the existence of those 'created'
consumer expectations, we would be endorsing the pe rmissibility of 'self-justifying' regulatory trade
barriers".  The European Communities argued that the question of whether the measure at issue was
trade-restrictive was an issue on which we had exercised judicial economy and therefore should
"refrain from gratuitously qualifying the EC measure as 'trade-restrictive'".  We used the expression
"trade-restrictive" as part of the legal reasoning to state that if Members can create consumer
expectations and then justify the trade restrictive measure, we would be endorsing the permissibility
of self-justifying regulatory trade barriers.  Theref ore, we were justified in using the term "trade-
restrictive".  Moreover, in our examination of th e EC Regulation, we were of the view that the
EC Regulation was more trade-restrictive than the relevant international standard, i.e., Codex Stan 94.
Our characterization of the EC Regulation as such is based on the fact that the EC Regulation
prohibited the use of the term "sardines" for species other than Sardina pilchardus  whereas
Codex Stan 94 would permit the use of the term "sardines" in a qualified manner for species other
than Sardina pilchardus .
35
6.12 The European Communities objected to the use of dictionaries as proof of consumer
expectations and rejected our assertion in paragraph 7.131 that "the European Communities
acknowledged that one of the common names for Sardinops sagax  is 'sardines' or its equivalent
thereof in the national language combined with the country or geographical area of origin".
Concerning the first comment, we are of the view that the use of the dictionaries referred to by both
parties is an appropriate means to examine whether the term "sardines", either by itself or combined
with the name of a country or geographic area, is a common name that refers to species other thanSardina pilchardus , especially in light of the fact that the Multilingual Illustrated Dictionary of
Aquatic Animals and Plants  was published in cooperation with the European Commission and
member States of the European Communities for the purposes of, inter alia , improving market
transparency.  We note that the electronic publication, Fish Base , was also produced with the support
of the European Commission.  In making our finding,  not only did we consider carefully dictionaries
referred to by both parties but also considered other evidence such as the regulations of several
member States of the European Communities, statements made by the Consumers' Association and
the trade description used by Canadian exporters of Clupea harengus harengus  to the Netherlands and
the United Kingdom.  In our weighing and balancing of the totality of evidence before us, including
the examination of the Oxford Dictionary  referred to by Peru
36 and Canada as well as the Grand
Dictionnaire Encyclopédique Larousse  and Diccionario de la lengua espanola  referred to by the
                                                     
35 In addition, we took note of the context provided by Article 2.5 of the TBT Agreement which states
that if a technical regulation is in accordance with relevant international standards, "it shall be rebuttably
presumed not to create an unnecessary obstacle to intern ational trade."  Because the EC Regulation was not in
accordance with Codex Stan 94, we considered that it creat ed an "unnecessary obstacle to trade", which, in our
view, can be construed to mean more trade-restrictive than necessary.
36 Peru's First Oral Statement, para. 4.WT/DS231/R
Page 53
European Communities, we were persuaded, on balance, that the term "sardines", either by itself or
combined with the name of a country or geographic area, is a common name in the
European Communities and that the consumers in the European Communities do not associate the
term "sardines" exclusively with Sardina pilchardus .37  For the sake of clarity, we inserted a sentence
to reflect that Peru demonstrated that European consumers do not associate "sardines" exclusively
with Sardina pilchardus  by pointing out that the term "sardines", either by itself or combined with the
name of a country or geographic area, is a common name for Sardinops sagax  in the
European Communities.  Concerning the second comment, we consider that the last sentence of
paragraph 7.131 accurately reflects the statements made by the European Communities in its first
written submission.  For the sake of clarity, we have cited in Footnote 100 what the
European Communities stated in paragraph 28 of its first written submission.
6.13  The European Communities made a number of comments with respect to paragraph 7.132.
First, the European Communities stated that "[t]he assessment of the facts developed by the Panel in
this paragraph to establish that sardines is a gene ric term in the territory of the European Communities
is not objective".  The European Communities makes this assertion based on the probative value we
attached to the letter of the United Kingdom Consumers' Association and the use of "slid" and
"herring" in addition to the use of the term "sardines" to market the Canadian Clupea harengus
harengus .  In addition, the European Communities argued that "the Panel completely ignores the
evidence submitted … on the range and diversity of preserved fish products that the
European consumers can find in any European supermarket and that responds to their expectations
that each fish be called and marketed with its own name".  As a claim that a panel has not made an
objective assessment is very serious,38 we will examine each of the European Communities'
arguments.
6.14 With respect to the first argument that questio ns the probative value or the relative weight we
ascribed to the Consumers' Association's le tter, we note that the Appellate Body in Korea — Dairy
stated:
…under Article 11 of the DSU, a panel is charged with the mandate to determine the
facts of the case and to arrive at factual findings.  In carrying out this mandate, a
panel has the duty to examine and consider all the evidence before it, not just the
evidence submitted by one or the other party, and to evaluate the relevance and
probative force of each piece thereof … The determination of the significance and
weight properly pertaining to the evidence presented by one party is a function of a
panel's appreciation of the probative value of all the evidence submitted by both
parties considered together.39
                                                     
37 We noted that Grand Dictionnaire Encyclopédique Larousse refers the term "sardine" to Sardina
pilchardus .  We also took note of the fact that the same dictionary states "[o]n trouve des espèces voisines dans
le Pacifique ( Sardinops caerulea ), ainsi que sur les côtes du sud de l'Afrique ( S. sagax ) et d'Australie ( S.
neopilchardus )".  Diccionario de la lengua espanola  defines the term "sardina" as "pez teleósteo marino
fisóstomoto, de 12 a 15 centímetros de largo, parecido al arenque , pero de carne más delicada, cabeza
relativamente menor, la aleta dorsal muy delantera y el cupero más delicada y el cuerpo más fusiforme y de
color negro ayulado por encima, dorado en la cabeza y pe teado en los costados y vientre." (emphasis added)
These two dictionaries referred to by the European Co mmunities  support the view that the term "sardines" is
not limited to just Sardina pilchardus  but includes other species, including Sardinops sagax .
38 The Appellate Body in European Communities — Measures Affecting the Importation of Certain
Poultry Products ("EC — Poultry "), WT/DS69/AB/R, adopted 23 July 1998, DSR 1998:V, stated that "[a]n
allegation that a panel has failed to conduct the 'objective assessment of the matter before it' … is a very serious
allegation".  Para. 133.
39 Appellate Body Report, Korea — Definitive Safeguard Measure on Imports of Certain Dairy
Products  ("Korea — Dairy "), WT/DS98/AB/R, adopted 12 January 2000, para. 137.WT/DS231/R
Page 54
6.15 We are also mindful that we are not "required to accord to factual evidence of the parties the
same meaning and weight as do the parties".40  We did consider the Consumers' Association letter in
determining whether the European consumers associate the term "sardines" exclusively with Sardina
pilchardus  but, as stated above, this was not the sole basis on which we made the determination as
other evidence was considered in the overall weighing and balancing process.  We therefore do notagree with the European Communities' argument that our approach was partial.
6.16 The European Communities submitted additional ev idence, i.e., letters it had received lately
from other European consumers' associations on the same issue.  In a letter dated 11 April 2002, Peru
requested that the new evidence submitted by the European Communities not be considered.  In this
regard, Peru referred to Article 12 of the Panel's Working Procedures which did not provide for the
submission of new evidence at this stage of the Panel proceedings.  Article 12 of the Panel's Working
Procedures reads as follows: "Parties shall submit all factual evidence to the Panel no later than duringthe first substantive meeting, except with respect to evidence necessary for purposes of rebuttal
submissions, answers to questions or comments on an swers provided by others.  Exceptions to this
procedure will be granted upon a showing of good cause.  In such cases, the other party shall be
accorded a period of time for comment, as appropriate".  We are obliged to point out that Peru
submitted the letter from Consumers' Association as a part of its rebuttal submission.  In light of this,it is our view that the European Communities should have submitted the evidence at the second
substantive meeting or at least not later than at the time it submitted answers to the questions posed by
the Panel.  Further, the European Communities did not request an extension of time-period to rebut
the letter from Consumers' Association.  Nor did the European Communities demonstrate the requisite
"good cause" which must be shown by the party submitting the new evidence.  We do not considerthat the interim review stage is the appropriate tim e to introduce new evidence.  Therefore, we decline
to consider the new evidence submitted by the European Communities.
6.17 With respect to the letter from an exporter submitted by Canada, on balance we found the
argument that the juvenile product of Clupea harengus harengus was marketed as sardines in the
European Communities credible and therefore considered it as a part of the overall evidence indetermining whether the European consumers associate the term "sardines" exclusively with
Sardina pilchardus .  With respect to the European Communities' argument that "the real use of the
word 'sardines' for Canada's product was for sales to Surinamese in the Netherlands of a Canadian
product they had got to know in Suriname", we do no t see how this detracts from the fact that Canada
exported Clupea harengus harengus  as "Canadian sardines" to the Netherlands for thirty years until
1989.  The fact that the majority of consumers of Canadian sardines in the Netherlands originates
from Suriname does not affect the relevance of the evidence.
6.18 Finally, the European Communities claimed that in paragraph 7.132 we "completely ignor[ed]
the evidence submitted by the European Communities on the range and diversity of preserved fish
products that the European consumers could find in any European supermarket and that responds to
their expectations that each fish be called by and marketed under its own name".  Again, we did not
ignore any evidence and we took note of the fact that there is diverse range of fish products that areavailable in European supermarkets.  However, we were not persuaded that the existence of diverse
preserved fish products in the European market su ggested that the European consumers associate the
term "sardines" exclusively with Sardina pilchardus .  We therefore reject the European Communities'
argument that we "completely ignored" the evidence it submitted.
6.19 In light of the above, we reject the European Communities' argument that our assessment was
not objective and decline to change our views set out in paragraph 7.132.  We have, however, for the
sake of clarity, revised the last sentence to state that the term "sardines", either by itself or combined
with the name of a country or geographic area is a common name for Sardinops sagax  in the
                                                     
40 Appellate Body Report, Australia – Measures Affecting the Importation of Salmon ("Australia –
Salmon "), WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, para. 267.WT/DS231/R
Page 55
European Communities.  We are obliged to poin t out, in response to the European Communities'
comment that "[t]he assessment of the facts developed by the Panel … to establish that sardines is a
generic  term in the territory of the European Comm unities is not objective", that we stated in
Footnote 107 of the findings: "With respect to parties' argument about whether the term 'sardines' is
generic, we do not consider it necessary to make a determination on this particular issue".
6.20 The European Communities argued that we incorrectly described Article 7 of the
EC Regulation in Footnote 104 of the findings.  Concerning the composition of "sardine mousse", the
European Communities argued that the EC Regulation referred to at least 25% Sardina pilchardus  of
the net weight of the product and that these products could not materially be composed of 100% fish.
The European Communities further noted that these products consisted of 40% to 50% of the net
weight of sardine meat, whilst the rest were non-fish ingredients which are necessary to give the
product its particular texture and taste.  We have made changes to Footnote 104 to accurately reflectArticle 7 of the EC Regulation in light of the European Communities' argument.
6.21 Finally, the European Communities contested "the partial and random use made by the Panel
of the evidence submitted by the parties on the negotiating history of the Codex Stan 94, which isconsidered unnecessary in certain parts and is selectively relied upon in others".  With regard to
paragraph 7.136, the European Communities further recalled a statement by France in the
1969 Synopsis of Governments' Replies on the Questionnaire on Canned Sardines: "the use of country
of origin as a prefix is confusing, because several species would have the same trade name and a
single species would be given several names according to the country where it is caught orprocessed".  We would like to emphasize again that we considered the totality of the evidence before
us.  We considered the text of Codex Stan 94 in determining that the language provided therein took
into account the issue of consumer protection in countries producing preserved sardines using
Sardina pilchardus .  We resorted to the negotiating history only to confirm that Codex Stan 94 takes
into account the European Communities' concern that consumers might be misled if a distinction were
not made between Sardina pilchardus  and other species.
6.22 For the sake of clarity, we have inserted a sentence at the end of paragraph 7.99 and added
paragraph 7.139 which summarizes our findings by way of an overall conclusion, which is reflected in
paragraph 8.1, with respect to Article 2.4 of the TBT Agreement.
VII. FINDINGS
A. PRODUCTS AT ISSUE
7.1 This dispute concerns Sardina pilchardus  Walbaum  ("Sardina pilchardus ") and
Sardinops sagax  sagax ("Sardinops sagax "), two small fish species which belong, respectively, to
genus Sardina and Sardinops of the Clupeinae  subfamily  of the Clupeidae  family; fish of the
Clupeidae  family populate almost all oceans.  Sardina pilchardus  is found mainly around the coasts
of the Eastern North Atlantic, in the Mediterranean Sea and in the Black Sea, and Sardinops sagax  is
found mainly in the Eastern Pacific along the coasts of Peru and Chile.  Despite the variousmorphological differences that can be observed between them, such as those concerning the head and
length, the type and number of gillrakes or bone striae and size and weight, Sardina pilchardus  and
Sardinops sagax  display similar characteristics: they live in a coastal pelagic environment, form
schools, engage in vertical migration, feed on plankton and have similar breeding seasons.
7.2 Both fish, as well as other species of the Clupeidae  family, are used in the preparation of
preserved and canned fish products, packed in water, oil or other suitable medium.WT/DS231/R
Page 56
B. MEASURE AT ISSUE41
7.3 Regulation (EEC) 2136/89 laying down common marketing standards for preserved sardines
(the "EC Regulation") was adopted on 21 June 1989.42  The EC Regulation defines the standards
governing the marketing of preserved sardines in the European Communities.
7.4 Article 2 of the EC Regulation provides that only products prepared from fish of the species
Sardina pilchardus  may be marketed as preserved sardines.  Article 2 reads as follows:
Only products meeting the following requirements may be marketed as preserved
sardines and under the trade description referred to in Article 7:
− they must be covered by CN codes 1604 13 10 and ex 1604 20 50;
− they must be prepared exclusively from the fish of the species " Sardina pilchardus
Walbaum";
− they must be pre-packaged with any appropriate covering medium in a hermetically
sealed container;
− they must be sterilized by appropriate treatment.
C. THE CODEX ALIMENTARIUS COMMISSION STANDARD FOR CANNED SARDINES AND
SARDINE -TYPE PRODUCTS (CODEX STAN 94 –1981 REV.1 – 1995)
7.5 The Codex Alimentarius Commission of the United Nations Food and Agriculture
Organization ("FAO") and the World Health Organisation ("WHO") ("Codex Alimentarius
Commission") adopted, in 1978, a standard ("Codex Stan 94") for canned sardines and sardine-type
products.43  Article 1 of Codex Stan 94 states that this standard applies to "canned sardines and
sardine-type products packed in water or oil or other suitable packing medium" and that it does notapply to speciality products where fish content constitutes less than 50% m/m of the net contents of
the can.
7.6 Article 2.1 of Codex Stan 94 provides that canned sardines or sardine-type products are
prepared from fresh or frozen fish from a list of 21 species, amongst them Sardina pilchardus and
Sardinops sagax.
44
7.7 Article 6 of Codex Stan 94 reads as follows:
                                                     
41 Pertinent parts of the European Communities measure at issue and Codex Stan 94 set out in the
descriptive part are reproduced in this part of the Report.
42 The EC Regulation in its entirety is attached as Annex 1.
43 Codex Stan 94 was amended in 1979 and 1989 by adding more species and revised in 1995.
Codex Stan 94 is attached in its entirety as Annex 2.
44 Article 2.1.1 lists the following species:
– Sardina pilchardus
– Sardinops melanostictus, S. neopilchardus, S. ocellatus, S. sagax S. caeruleus
– Sardinella aurita, S. brasiliensis, S. maderensis, S. longiceps, S. gibbosa– Clupea harengus– Sprattus sprattus– Hyperlophus vittatus– Nematalosa vlaminghi
– Etrumeus teres
– Ethmidium maculatum– Engraulis anchoita, E. mordax, E. ringens– Opisthonema oglinumWT/DS231/R
Page 57
6. LABELLING
In addition to the provisions of the Codex General Standard for the Labelling of
Prepackaged Foods (CODEX STAN 1-1985, Rev. 3-1999) the following specific
provisions shall apply:
6.1 NAME OF THE FOOD
The name of the products shall be:
6.1.1 (i) "Sardines" (to be reserved exclusively for Sardina pilchardus
(Walbaum)); or
(ii) "X sardines" of a country, a geographic area, the species, or the
common name of the species in accordance with the law and custom of the country in
which the product is sold, and in a manner not to mislead the consumer.
D. FINDINGS AND RECOMMENDATIONS REQUESTED BY THE PARTIES
7.8 Peru makes the following requests:
(a) Peru requests the Panel to find that the measure at issue, the EC Regulation,
prohibiting the use of the term "sardines" to be used in combination with the name of
the country of origin ("Peruvian Sardines"); the geographical area in which the
species is found ("Pacific Sardines"); the species ("Sardines — Sardinops sagax "); or
the common name of the species Sardinops sagax  customarily used in the language of
the member State of the European Communities in which the product is sold
("Peruvian Sardines" in English or "S üdamerikanische Sardinen" in German) is
inconsistent with Article 2.4 of the TBT Agreement because the European
Communities did not use the naming standard set out in paragraph 6.1.1(ii) ofCodex Stan 94 as a basis for its Regulation even though that standard would be an
effective and appropriate means to fulfil the legitimate objectives pursued by the
Regulation.
(b) If the Panel were to find that the EC Regu lation is consistent with Article 2.4 of the
TBT Agreement, Peru requests the Panel to find that the EC Regulation isinconsistent with Article 2.2 of the TBT Agreement because it is more trade-
restrictive than necessary to fulfil the legitimate objective of market transparency that
the European Communities claims to pursue.
(c) If the Panel were to find that the EC Regu lation is consistent with Articles 2.2 and 2.4
of the TBT Agreement, Peru requests the Panel to find that the measure is
inconsistent with Article 2.1 of the TBT Agreement because it is a technical
regulation that accords Peruvian products prepared from fish of the speciesSardinops sagax  treatment less favourable than that accorded to like
European products made from fish of the species Sardina pilchardus.
(d) If the Panel were to find that the measure at issue is consistent with the
TBT Agreement, Peru requests the Panel to find that it is inconsistent with
Article III:4 of the GATT 1994 because it is a requirement affecting the offering forsale of imported sardines that accords Peruvian products prepared from fish of the
species Sardinops sagax  treatment less favourable than that accorded to like
European products made from fish of the species Sardina pilchardus .WT/DS231/R
Page 58
7.9 Peru requests the Panel to recommend that the Dispute Settlement Body ("DSB") request the
European Communities to bring its measure into  conformity with the TBT Agreement.  Peru
specifically requests the Panel to suggest that the European Communities permit Peru, without any
further delay, to market its sardines in accordance with a naming standard consistent with the
TBT Agreement.
7.10 The European Communities requests the Panel to reject Peru's claims that the EC Regulation
is inconsistent with Articles 2.4, 2.2 and 2.1 of the TBT Agreement and Article III:4 of the
GATT 1994.
E. GENERAL INTERPRETATIVE ISSUES
1. Rules of interpretation
7.11 The TBT Agreement constitutes an integral part of the Marrakesh Agreement Establishing the
World Trade Organization (the "WTO Agreement").  As such, the TBT Agreement is one of the"covered agreements" and is therefore subject to the DSU. Article 3.2 of the DSU provides that panels
are to clarify the provisions of "covered agreements" in accordance with customary rules of
interpretation of public international law.
7.12 In US — Gasoline , the Appellate Body stated that the fundamental rule of treaty interpretation
as set out in Articles 31 and 32 of the Vienna Convention on the law of Treaties (the "ViennaConvention")
45 had "attained the status of a rule of customary or general international law" and "forms
part of the 'customary rules of inte rpretation of public international law'".46  Pursuant to Article 31(1)
of the Vienna Convention, the duty of a treaty interpreter is to determine the meaning of a term in
accordance with the ordinary meaning to be given to the term in its context and in light of the object
and purpose of the treaty.
7.13 If, after applying the rule of interpretation set out in Article 31(1), the meaning of the treaty
term remains ambiguous or obscure or leads to a result that is manifestly absurd or unreasonable,
Article 32 allows the treaty interpreter to have a recourse to "supplementary means of interpretation,
including the preparatory work on the treaty and the circumstances of its conclusion".47  We will
apply the principles enunciated by the Appellate Body in the US — Gasoline  to interpret the relevant
provisions of the TBT Agreement in this Report.
2. Order of analysis of the claims
7.14 Peru requests that we examine its claim under Article 2.4 of the TBT Agreement first and
then examine its claims in the order of  Articles 2.2 and 2.1 of the TBT Agreement only if we were to
determine that the EC Regulation is not inconsistent with Article 2.4.  If we were to determine that the
EC Regulation is not inconsistent with the provisions of the TBT Agreement invoked by Peru, it
requests that we examine its claims in respect of Article III:4 of the GATT 1994.
                                                     
45 Vienna Convention on the Law of Treaties, done at Vienna, 23 May 1969, 1155 U.N.T.S. 331;
(1969) 8 International Legal Materials 679.
46 Appellate Body Report, United States — Standards for Reformulated and Conventional Gasoline
("US — Gasoline "), adopted 20 May 1996, DSR 1996:I, p. 16.  See also Appellate Body Report, Japan — Taxes
on Alcoholic Beverages  ("Japan — Alcoholic Beverages II ") WT/DS8/AB/R, WT/DS10/AB/R,
WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, p. 104; Appellate Body Report, India — Patent
Protection for Pharmaceutical and Agricultural Chemical Products ("India — Patents (US) "), WT/DS50/AB/R,
adopted 16 January 1998, DSR 1998:I, para. 46;  European Communities — Customs Classification of Certain
Computer Equipment  ("EC — Computer Equipment "), WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R,
adopted 22 June 1998, DSR 1998:V, para. 84;  and US — Shrimp ,  para. 114.
47 Appellate Body Report, EC — Computer Equipment , para. 86.WT/DS231/R
Page 59
7.15 In addressing the issue of the order of analysis, we have taken into account earlier
considerations of this question.  We recall the Appellate Body's statement in  EC — Bananas III
which stated that the panel "should" have applied the Licensing Agreement first because this
agreement deals "specifically, and in detail" with the administration of import licensing procedures.
The Appellate Body noted that if the panel had examined the measure under the Licensing Agreementfirst, there would have been no need to address the alleged inconsistency with Article X:3 of the
GATT 1994.
48  The Appellate Body suggests that where two agreements apply simultaneously, a
panel should normally consider the more specific agreement before the more general agreement.
7.16 Arguably, the TBT Agreement deals "specifically, and in detail" with technical regulations.  If
the Appellate Body's statement in EC — Bananas III  is a guide, it suggests that if the EC Regulation
is a technical regulation, then the analysis unde r the TBT Agreement would precede any examination
under the GATT 1994.  Moreover, Peru, as the complaining party, requested that we first examine itsclaim under Article 2.4 of the TBT Agreement followed by Article 2.2 if we find that the
EC Regulation is consistent with Article 2.4.  And similarly, only if we were to find that the
EC Regulation is consistent with Article 2.2 does Peru ask us to consider its claim under Article 2.1.
In the event that we were to find that the EC Re gulation is consistent with the TBT Agreement, Peru
requests that we examine its claim under Article III:4 of the GATT 1994.  We note that theEuropean Communities did not contest Peru's request regarding this sequencing analysis.
7.17 These requests by Peru on sequencing of claims thereby oblige us to consider whether there is
an interpretative methodology that compels panels to adopt a particular order which, if not followed,
would constitute an error of law.
49  We recall the Appellate Body's statement in US – FSC  in relation
to the US argument that the panel erred by commencing its analysis with Article 3.1(a) rather thanfootnote 59 of the Subsidies and Countervailing Me asures Agreement.  The Appellate Body stated:
In our view, it was not a legal error for the Panel to begin its examination of whether
the FSC measure involves export subsidies  by examining the general definition of a
"subsidy " that is applicable to export  subsidies  in Article 3.1(a).  In any event,
whether the examination begins with the general definition of a "subsidy" inArticle 1.1 or with footnote 59, we believe that the outcome of the
European Communities' claim under Article 3.1(a) would be the same.  The
appropriate meaning of both provisions can be established and can be given effect,
irrespective of whether the examination of the claim of the European Communities
under Article 3.1(a) begins with Article 1.1 or with footnote 59.
50
7.18 In our view, if the EC Regulation is a technical regulation, it would not constitute an error of
law to start the examination of the consistency of the EC Regulation with Article 2.4 followed byArticles 2.2 and 2.1 of the TBT Agreement as necessary since such sequential examination would not
affect the interpretation of the other provisions.
                                                     
48 Appellate Body Report, European Communities — Regime for the Importation, Sale and
Distribution of Bananas  ("EC — Bananas III "), WT/DS27/R, adopted 25 September 1997, DSR 1997:II,
para. 204.
49 In US — Shrimp , for example, the Appellate Body considered the sequence of analysis important in
examining whether the U.S. measure protecting sea turtles was justifiable under Article XX of the GATT 1994.It held that the panel erred by looking at the chapeau of Article XX and then subsequently  examining whetherthe U.S. measure was covered by the terms of Article XX(b) or (g) because "[t]he task of interpreting the
chapeau so as to prevent the abuse or misuse of the sp ecific exemptions provided for in Article XX is rendered
very difficult, if indeed it remains possible at all, where the interpreter … has not first identified and examined
the specific exception threatened with abuse".  Appellate Body Report, US 
— Shrimp, para. 120.
50 Appellate Body Report, United States — Tax Treatment for "Foreign Sales Corporations"  ("US —
FSC"), WT/DS108/AB/R, adopted 20 March 2000, para. 89.WT/DS231/R
Page 60
7.19 Accordingly, the order of examination will follow the order of the claims set out in Peru's
submission.  That is, claims will be examined in  the following order:  Articles 2.4, 2.2, 2.1 of the
TBT Agreement and Article III:4 of the GATT 1994.
F. APPLICABILITY OF THE TBT AGREEMENT
1. Consideration of the EC Regulation as a technical regulation
7.20 Peru, as the complaining party, invoked paragraphs 1, 2 and 4 of Article 2 of the
TBT Agreement as the legal basis of its claim to argue that the EC Regulation is inconsistent with
those provisions.  We note that the substantive provisions of the TBT Agreement have not been
construed by either panels or the Appellate Body51 and that the provisions of the Tokyo Round
Agreement on Technical Barriers to Trade (the "Tokyo Round Standards Code") which preceded the
TBT Agreement have also not been addressed by any panel.  As the drafters of the TBT Agreement
intended to further the objective of the GATT 1994 with a specialized legal regime that applies onlyto a limited class of measures, it is necessary to commence our analysis by examining whether the
EC Regulation constitutes a technical regulation with in the meaning of the TBT Agreement.  Only if
it is established that the EC Regulation constitutes a technical regulation within the meaning of
Annex 1.1 of the TBT Agreement, will we then proceed to consider the consistency of the
EC Regulation with the substantive obligations set out in Articles 2.4, 2.2 and 2.1 of theTBT Agreement.
7.21 Peru notes that paragraph 1 of Annex 1 of the TBT Agreement defines the term "technical
regulation" as a document which lays down product characteristics with which compliance is
mandatory and submits that the EC Regulation lays down "common marketing standards for
preserved sardines".  Peru argues that the EC Re gulation constitutes a technical regulation within the
meaning of Annex 1.1 of the TBT Agreement because  it lays down characteristics which preserved
sardines must possess if they are to be "marketed as preserved sardines and under the trade description
referred to in Article 7" of the EC Regulation.  In particular, Peru submits that Article 2 of the
EC Regulation sets out characteristics preserved sardines must possess in order to market them in the
European Communities under the name "sardines" and notes that one such characteristic is that theproduct in question must be prepared from the fish of species Sardina pilchardus .  Peru also argues
that the language of Article 9 of the EC Regulation which provides that the EC Regulation "shall be
binding in its entirety and directly applicable in all Member States" makes compliance with the
measure mandatory.
7.22 The European Communities does not contest that the EC Regulation is a technical regulation
for the purposes of the TBT Agreement.  Nevertheless, the European Communities does not accept
that the measure identified by Peru is a technical regulation because the EC Regulation deals withnaming, not labelling, and the definition of technical regulation refers to labelling of products and not
to naming of products.  The European Communities also argues that the Regulation does not lay down
mandatory labelling requirements for fish of species other than Sardina pilchardus , i.e.,
Sardinops sagax .
7.23 The term "technical regulation" is defined in Annex 1.1 of the TBT Agreement and states:
Document which lays down product characteristics or their related processes and
production methods, including the applicable administrative provisions, with which
compliance is mandatory.  It may also include or deal exclusively with terminology,
symbols, packaging, marking or labelling requirements as they apply to a product,
process or production method.
                                                     
51 The panel and the Appellate Body examined whether the measure at issue was a technical regulation
in Appellate Body Report, EC — Asbestos .WT/DS231/R
Page 61
7.24 Based on the textual reading of the definition as set out in Annex 1.1 of the TBT Agreement,
a measure constitutes a "technical regulation" if the measure lays down product characteristics and
compliance is mandatory.  We note that the key part of the definition is that the document has to lay
down "product characteristics".  In th is regard, the Appellate Body in EC — Asbestos  stated:
[T]he "characteristics" of a product include, in our view, any objectively definable
"features", "qualities", "attributes", or other "distinguishing mark" of a product.  Such
"characteristics" might relate, inter alia , to a product's composition, size, shape,
colour, texture, hardness, tensile strength, flammability, conductivity, density, or
viscosity.  In the definition of a "technical regulation" in Annex 1.1, the
 TBT Agreement  itself gives certain examples of "product characteristics" –
"terminology, symbols, packaging, markin g or labelling requirements".  These
examples indicate that "product characteristics" include, not only features andqualities intrinsic to the product itself, but also related "characteristics", such as the
means of identification, the presentation and the appearance of a product.  In addition,
according to the definition in Annex 1.1 of the  TBT Agreement , a "technical
regulation" may set forth the "applicable administrative provisions" for products
which have certain "characteristics".  Further, we note that the definition of a"technical regulation" provides that such a regulation "may also include or deal
 exclusively  with terminology, symbols, packaging, marking  or  labelling
requirements". (emphasis added)  The use here of the word "exclusively" and the
disjunctive word "or" indicates that a "technical regulation" may be confined to
laying down only one or a few "product characteristics".
52
7.25 The Appellate Body provides a comprehensive definition of "characteristics" of a product and
adds that a technical regulation, if it is to be enforceable, must be applicable to an identifiable product,
or group of products.  In support of this view, the Appellate Body states that compliance with
Article 2.9.2 of the TBT Agreement, which impos es an obligation on Members to notify other
Members "of the products to be covered" by a proposed technical regulation, calls for identification ofthe product coverage of a technical regulation.
53  By this logic, if a technical regulation applies to a
group of products or products generally, the product need not be expressly named, identified or
specified in the regulation.
7.26 In determining whether the EC Regulation is a technical regulation, we first note that it
identifies a product, namely preserved sardines.  In its preambular language, the EC Regulation
alludes to "the adoption of [common marketing standards] for preserved sardines".  In addition to
identifying the product, the EC Regulation lays down certain product characteristics, both intrinsic
and related, that preserved sardines must possess in order for them to be "marketed as preserved
sardines and under the trade description refered to in Article 7" of the EC Regulation.  The definition
provided in Annex 1.1 of the TBT Agreement indicates that a technical regulation can require one or
more product characteristics.  This is confirmed by the Appellate Body's finding that the use of the
word "exclusively" with the disjunctive word "or" indicates that a technical regulation may lay downone or a few product characteristics.  Thus, it is plausible that a technical regulation may contain just
one product characteristic or several product characteristics, whether they be intrinsic and/or related
characteristics of the product.
7.27 Various provisions of the EC Regulation lay down product characteristics that deal with
features and qualities affecting composition, size, shape, colour and texture of preserved sardines.  Forinstance, one product characteristic required by Article 2 of the EC Regulation is that preserved
sardines must be prepared exclusively from fish of the species Sardina pilchardus .  This product
characteristic must be met for the product to be "marketed as preserved sardines and under the trade
                                                     
52 Appellate Body Report, EC — Asbestos , para. 67.
53 Ibid. , para. 70.WT/DS231/R
Page 62
description referred to in Article 7" of the EC Regulation.  We consider that the requirement to use
exclusively Sardina pilchardus  is a product characteristic as it objectively defines features and
qualities of preserved sardines for the purposes of their "market[ing] as preserved sardines and under
the trade description referred to in Article 7" of  the EC Regulation.  Article 2 of the EC Regulation
lays down additional product characteristics for a product to be "marketed as preserved sardines andunder the trade description referred to in Article 7" , e.g., the product must be pre-packaged with any
appropriate covering medium in a hermetically sealed container and sterilized by appropriate
treatment.  In addition to these product character istics laid down in Article 2, the EC Regulation
contains other product characteristics of preserved sardines.
7.28 Article 3 states that sardines must be "appropriately trimmed of the head, gills, caudal fin and
internal organs other than ova, milt and kidneys, and according to the market presentation concerned,
backbone and skin".  Article 4 sets out the presentation of preserved sardines and Article 5 deals withthe covering media.  Article 6 requires, inter alia , that sardines be uniform in size and must not have
significant breaks in the abdominal wall; comprise flesh of normal consistency with light or pinkish
color; and retain the odour and flavor characteristics of the species Sardina pilchardus .  Article 7, in
addition to dealing with trade description, covers the ratio between the weight of the sardines and
covering media.  We find that these provisions of the EC Regulation also lay down productcharacteristics.
7.29 The second requirement for a measure to be a technical regulation is that compliance must be
mandatory.  With regard to this requirement, the Appellate Body stated:
A "technical regulation" must, in other words, regulate the "characteristics" of
products in a binding or compulsory fashion.  It follows that, with respect to products,a "technical regulation" has the effect of prescribing  or  imposing  one or more
"characteristics" – "features", "qualities", "attributes", or other "distinguishing
mark".
54
7.30 With respect to the requirement that compli ance with the technical regulation must be
mandatory, Article 9 of the EC Regulation  states that the requirements contained therein are "bindingin its entirety and directly applicable in all Member States".  Thus, the EC Regulation fulfils the
mandatory compliance aspect of the definition set out in Annex 1.1 of the TBT Agreement.
7.31 Although the European Communities does not contest that its Regulation is a technical
regulation, it argued that Peru has taken one aspect of the measure, i.e., Article 2 of the
EC Regulation, isolated that provision and classified the Regulation as a technical regulation.  The
European Communities argued that it is not possible to single out one aspect of a measure and analyze
it as a technical regulation and that Article 2 has to be interpreted in the context of the entireRegulation.
7.32 In EC — Asbestos , in determining whether French Decree No. 96-1133 concerning asbestos
and products containing asbestos constitutes a technical regulation within the meaning of Annex 1.1
of the TBT Agreement, the Appellate Body stated that "the proper legal character of the measure at
issue cannot be determined unless the measure is examined as a whole" and concluded that themeasure at issue had to be examined as an "integrated whole, taking into account, as appropriate, the
prohibitive and the permissive elements that are part of it".
55  We note that Peru did not argue that it
was taking Article 2 of the EC Regulation in separation from the whole regulation and classifying
only that provision as a technical regulation.  Peru argued that it considers the EC Regulation in its
entirety to be a technical regulation because it lays down characteristics for sardines to be marketed in
                                                     
54 Appellate Body Report, EC — Asbestos , para. 68.
55 Ibid. , para. 64.WT/DS231/R
Page 63
the European Communities as preserved sardines but Peru challenges only the WTO-consistency of
the requirement set out in Article 2 of the EC Regulation.56
7.33 Moreover, Peru indicated that the other elem ents of the EC Regulation were relevant in
considering whether the requirement set out in Article 2 of the EC Regulation is consistent with
Articles 2.1, 2.2 and 2.4 of the TBT Agreement.  Indeed, examining Article 2 of the EC Regulationfor the purposes of determining the trade descri ption would necessarily entail examining Article 7
which in turn refers to Articles 4 and 5 of the EC Regulation.  Peru refers to other provisions of the
EC Regulation, i.e., objectives of the regulation as set out in the preamble and the provision relating to
the binding nature of the Regulation, in its claim that the EC Regulation is inconsistent with Article 2
of the TBT Agreement.
7.34 We do not consider that, under the DSU, a complaining party is required to list all provisions
of a measure it deems inconsistent and can instead identify and challenge only those offendingprovisions of the measure it deems central to its inte rest in resolving the dispute.  Peru decided in this
case to focus on Article 2 of the EC Regulation and its decision to narrow the scope of the
examination to Article 2 does not suggest that Peru considers only Article 2 to be a technical
regulation in isolation from the rest of the provisions of the EC Regulation.  We therefore reject the
European Communities' argument that the measure identified by Peru is not a technical regulationbecause it did not take into account the whole of the EC Regulation but only Article 2 of the
EC Regulation.
7.35 Based on the reasons set out above and subject to review below of the arguments advanced by
the European Communities, we find that the EC Regulation is a technical regulation as it lays down
product characteristics for preserved sardines and makes compliance with the provisions containedtherein mandatory.
2. Consideration of the European Communities' arguments that its Regulation does not
contain a labelling requirement and does not concern preserved Sardinops sagax
7.36 Although the European Communities accepts that the EC Regulation is a technical regulation
for the purposes of the TBT Agreement because it lays down marketing standards for preservedSardina pilchardus , the European Communities argues that its Regulation does not contain a labelling
requirement and does not lay down marketing standards for preserved Sardinops sagax .
(a) The European Communities' argument that its Regulation is not a technical regulation
because it deals with naming rather than labelling of a product
7.37 The European Communities claims that its Regulation does not constitute a technical
regulation because the definition of technical regulation as set out in Annex 1 of the TBT Agreement
covers labelling of products, not naming of products.  The European Communities argues that it isDirective 2000/13 on the laws of the European Communities' member States relating to the labelling,
presentation and advertising of foodstuffs for sale to the final consumer ("EC Directive 2000/13"), in
conjunction with Article 2 of the EC Regulation, that requires preserved Sardina pilchardus to be
labelled "preserved sardines".
7.38 We reject the European Communities' argument on two grounds.  First, we do not consider
that the EC Regulation, even if it were to cont ain a "naming" rather than "labelling" requirement,
could no longer be a technical regulation within the meaning of the TBT Agreement.  Second, we do
not consider that the distinction between "naming" and "labelling" as applied by the
European Communities to its Regulation is meaningful.
                                                     
56 Peru's Rebuttal Submission, para. 25.WT/DS231/R
Page 64
7.39 First, we recall the Appellate Body's statement that a "technical regulation" may be confined
to laying down only one or a few "product characteristics" and we have already found that the
EC Regulation lays down product characteristics that preserved sardines must possess, i.e., they must
be prepared from fish of species Sardina pilchardus  only and meet certain requirements dealing with
weight, organoleptic aspects and the covering medium.  Consequently, even if it were determined thatthe EC Regulation does not contain a labelling requirement, it cannot detract from our conclusion that
the EC Regulation constitutes a technical regulation because that conclusion is based on our finding
that it lays down certain product characteristics we have already identified.  A finding to the effect
that the EC Regulation does not contain a related product characteristic in the form of a labelling
requirement does not negate the existence of other product characteristics set out in the
EC Regulation.
7.40 Second, we fail to see the basis on which a distinction can be drawn between a requirement to
"name" and a requirement to "label" a product for the purposes of the TBT Agreement. The ordinary
meaning of the term "label" is  "name" and vice versa.
57  Moreover, these two concepts denote the
means of identification of a product.  The Appellate Body in EC — Asbestos  referred to "terminology,
symbols, packaging, marking or labelling requirements" as constituting " the means of identification ,
the presentation and the appearance of a product".  The ordinary meaning of the term "label" is "[a]naffixation to or marking on a manufactured article, giving information as to its nature or quality, or the
contents of a material, package or container, or the name of the maker"
58 and the term "marking" in
turn is defined as "write a word or symbol on (an object), typically for identification ".59  The ordinary
meaning of the term "naming" is " identify  by name".60  Based on the ordinary meaning, we consider
that labelling and naming requirements are essentially "means of identification" of a product and assuch, they come within the scope of the definition of "technical regulation".
7.41 In any event, the distinction which we have been asked to draw between "naming" and
"labelling" requirements is not supported by the text and structure of the EC Regulation.  Article 2 of
the EC Regulation states that only products meeting the requirements contained therein may be
marketed as preserved sardines and under the trade description referred to in Article 7.  Article 7 ofthe EC Regulation in turn stipulates that the trade description must correspond to the presentation of
sardines on the basis of corresponding designation set out in Article 4 of the EC Regulation which
allows the marketing of preserved sardines as simply  "sardines ", "sardines without bones", "sardines
without skin or bones", "sardine fillets", "sardine trunks" or any other form that is distinguishable
from the five presentations mentioned above.  Article 7 of the EC Regulation also requires that the
designation of the covering medium, which is addressed in Article 5, must form an integral part of the
trade description.  Article 5 allows olive oil, other refined vegetable oils, tomato sauce, natural juice,marinade and any other covering medium that is  distinguishable from the five covering media
mentioned above.  Based on the foregoing reading of the EC Regulation, the label would have to
indicate the term "sardines" accompanied by the corresponding designation for presentation and the
covering medium.  The European Communities confirmed this interpretation of its Regulation when it
stated, in response to the Panel's question whether the EC Regulation requires that the label indicatethat the product is preserved sardines, that Article 7 of the EC Regulation, in conjunction with
Articles 4 and 5, require "the description of the product on the labels will bear the indication 'sardines'
and will have to reflect these two requirements". 
61  In light of the ordinary meaning of the term
"label" and based on the European Communities' response, Article 2 of the EC Regulation, in
conjunction with Articles 4, 5 and 7, also constitutes a related product characteristic in the form of a
                                                     
57 The Cassell Thesaurus Dictionary , (Mackays of Chatham PLC, 1998), pp. 387 and 453.
58 Black's Law Dictionary , (West Publishing Company, 1979, fifth edition), p. 786.
59 The New Oxford Dictionary of English , (Clarendon Press, Oxford, 1998), p. 1132.
60 Ibid. , p. 1229.
61 EC's Response to Panel Question 7.  We note that the label on a sample of sardines submitted as
evidence by the European Communities states "Sardines MAROCAINES SANS PEAU& SANS ARÊTES — ÀL'HUILE D'OLIVE".WT/DS231/R
Page 65
labelling requirement as it comes within the ambit of "[an] affixation to or marking on a manufactured
article, giving information as to its nature or quality, or the content of a material, package or
container, or the name of the maker".  Finally, the fact that the European Communities may have
another domestic regulation deemed to be a labelling regulation does not vitiate our conclusion that
the EC Regulation contains a labelling elemen t within the meaning of the TBT Agreement.62
7.42 For the reasons stated above, we reject the European Communities' argument that its
Regulation does not constitute a technical regulation on the basis that it deals with naming, not
labelling.
(b) The European Communities' argument that its Regulation does not lay down mandatory
labelling requirement for products other than preserved Sardina pilchardus
7.43 The European Communities argues that although Article 2 of the EC Regulation provides that
the term "sardines" can only be used for preserved Sardina pilchardus , it does not mean that the
EC Regulation lays down mandatory labelling requirement for preserved Sardinops sagax  or any
species other than Sardina pilchardus .63
7.44 The European Communities' argument goes to the issue of whether its Regulation is the
relevant technical regulation.  This argument, in our view, disregards the notion that a document may
prescribe or impose product characteristics in either a positive or negative form — that is, byinclusion or by exclusion.
64  In discussing the form in which a document may regulate a product, the
Appellate Body held in EC — Asbestos  that a document may require positively that a product contain
certain characteristics or it may require negatively that the product not possess certain
characteristics.65  In the case at hand, Article 2 of the EC Regulation states that " only the products
meeting the … requirements [set out in that Article] may be marketed as preserved sardines and underthe trade description referred  to in Article 7".  This formulation thereby makes a distinction between
those product characteristics that are included in the measure versus those that are excluded.
7.45 By this logic, the language contained in Article 2 of the EC Regulation requires positively
that preserved sardines possess the product characteristic of using only fish of the species
Sardina pilchardus .  The negative implication that follows from this requirement is that preserved
sardines cannot possess the product characteristic of using fish of species other than
Sardina pilchardus .  That is, a product containing fish of the species Sardinops sagax , or any species
other than Sardina pilchardus  for that matter, cannot be "marketed as preserved sardines and under
the trade description referred to in Article 7" of the EC Regulation.  Therefore, by requiring the use of
only the species Sardina pilchardus  as preserved sardines, the EC Regulation in effect lays down
product characteristics in a negative form, that is, by excluding other species, such as
Sardinops sagax , from being "marketed as preserved sardines and under the trade description referred
to in Article 7" of the EC Regulation.  It is for this reason that we do not accept the
European Communities' argument that the EC Regulation is not a technical regulation for preserved
                                                     
62 We note in this regard that the fifth preamble of Directive 2000/13 states that "[r]ules of specific
nature which apply vertically only to particular foodstu ff should be laid down in provisions dealing with those
products".
63 EC's Rebuttal Submission, para. 12.
64 The positive and negative formulation stemmed from the facts of EC — Asbestos , where the measure
was a ban on asbestos and products containing asbestos fibres.
65 The Appellate Body stated in paragraph 69:
"Product characteristics" may, in our view, be prescribed or imposed with respect to productsin either a positive or a negative form.  That is, the document may provide, positively, that
products must possess  certain "characteristics", or the document may require, negatively, that
products  must not possess  certain "characteristics".  In both cases, the legal result is the
same:  the document "lays down" certain binding "characteristics" for products, in one caseaffirmatively, and in the other by negative implication.WT/DS231/R
Page 66
Sardinops sagax .  This argument would be persuasive only if technical regulations were to lay down
product characteristics in a positive form.
7.46 If only characteristics set out in a positive form of an identifiable product can be taken into
account in determining whether it constitutes a technical regulation without considering the negative
implications stemming therefrom, it would be possible to circumvent the obligations contained in theTBT Agreement.  It would be possible to argue that a measure is not the relevant technical regulation
on the basis that it does not positively set out product characteristics of the identifiable product
although such product would be affected by the negative implications of the technical regulation.  Yet,
the European Communities makes this argument when it claims that because the EC Regulation lays
down product characteristic of preserved Sardina pilchardus , it is not a labelling requirement for
preserved Sardinops sagax  and that "the fact that the name 'sardines' cannot be used for products other
than preserved Sardina pilchardus  is in fact simply the logical consequence of the fact that this name
is reserved for … products produced exclusively from preserved Sardina pilchardus ".
66  I n  o u r
judgement, if only product characteristics set out in  a positive form can be considered in examining a
technical regulation, such interpretation could re nder the TBT Agreement meaningless and it is
unlikely that the drafters of the TBT Agreement envisaged such situation.
7.47 Based on the foregoing reasons, we reject the European Communities' argument that the
EC Regulation does not lay down mandatory labelling requirements for products other than preserved
Sardina pilchardus  and that its Regulation is not a technical regulation for preserved Sardinops sagax .
G. CONSISTENCY OF THE EC REGULATION WITH ARTICLE 2.4 OF THE TBT AGREEMENT
1. Burden of proof
7.48 The issue of burden of proof has been repeatedly examined in WTO jurisprudence.  The
Appellate Body stated in US — Wool Shirts and Blouses  that:
… the burden of proof rests upon the party, whether complaining or defending, who
asserts the affirmative of a particular claim or defence.  If that party adduces evidence
sufficient to raise a presumption that what is claimed is true, the burden then shifts to
the other party, who will fail unless it adduces sufficient evidence to rebut thepresumption.
67
7.49 Once the Panel determines that the party asserting the affirmative of a particular claim or
defence has succeeded in raising a presumption that its claim is true, it is incumbent upon the Panel to
assess the merits of all the arguments advanced by the parties and the admissibility, relevance and
weight of all the factual evidence submitted with a view to establishing whether the party contesting a
particular claim has successfully refuted the presumption raised.  In the event that the arguments and
the factual evidence adduced by the parties remain in equipoise, the Panel must, as a matter of law,find against the party who bears the burden of proof.
7.50 Under the well-established principle concerning burden of proof, it is for the complaining
party to establish the violation it alleges; it is for the party invoking an exception or an affirmative
defence to prove that the conditions contained there are met; and it is for the party asserting a fact to
prove it.
68  Applying this principle in the context of Article 2.4 of the TBT Agreement, it is Peru, as
                                                     
66 EC's Rebuttal Submission, para. 12.
67 Appellate Body Report, United States — Measures Affecting Imports of Woven Wool Shirts and
Blouses from India  ("US — Wool Shirts and Blouses "), WT/DS33/AB/R, adopted 23 May 1997, DSR 1997:I,
p. 335.
68 Panel Report, Turkey – Restrictions on Imports of Textile and Clothing Products  ("Turkey —
Textiles "), WT/DS34/R, as modified by the Appellate Body Report, WT/DS34/AB/R, adopted
19 November 1999, DSR 1999:VI, para. 9.57.WT/DS231/R
Page 67
the complaining party, that bears the burden of establishing a prima facie  case by demonstrating that a
relevant international standard exists and that this standard was not used as a basis for the technical
regulation.  At this point, should the European Communities make an assertion to rebut Peru's claims,
it carries the burden of establishing that assertion.  We note that the European Communities asserted
that Codex Stan 94 is ineffective or inappropriate to fulfil the legitimate objectives pursued by theEC Regulation.  According to the Appellate Body, "the burden of proof rests upon the party, whether
complaining or defending, who asserts the affirmative of a particular claim or defence".
69  Thus, in
line with the principle enunciated by the Appellate Body, the burden of proof rests with the
European Communities, as the party "assert[ing] the affirmative of a particular claim or defence", to
demonstrate that the international standard is an  ineffective or inappropriate means to fulfil the
legitimate objectives pursued by the EC Regulation.70
7.51 Moreover, we are concerned that a complaining party, if it were to be required to determine,
as part of the prima facie  case it has to establish, what the "legitimate" objectives pursued by the
respondent are and what factors may render the international standard "inappropriate" in light of the
respondent's specific conditions, may not be in a position to do so.  A complainant cannot in our view
be required to spell out the "legitimate" objectives pursued by a technical regulation.  Only the
respondent Member can do so.  Similarly, we consider that the assessment of whether a relevantinternational standard is "inappropriate" includes considerations which may be distinct from those
underlying an "effectiveness" assessment, and may extend to considerations which are proper to the
Member adopting or applying a technical regulation.  As indicated below, whereas the "effectiveness"
of an international standard bears upon the result  of the means employed, the  "appropriateness" of
that international standard bears upon the nature  of the means employed.  Consequently, when a
Member challenges a technical regulation under Article 2.4, it cannot in our view be required to
second-guess what those considerations of "appropriateness" are which underlie the respondent's
decision not to use a relevant international standard as a basis.  A complainant would then be required
to explain why a relevant international standard is  not "inappropriate", without knowing on what basis
the respondent considers the relevant international standard "inappropriate".
71
7.52 For the reasons stated above, it is for Peru, as the complaining party, to establish  prima facie
that the EC Regulation is a technical regulati on within the meaning of the TBT Agreement; that
relevant international standards exist; and that such standards were not used as a basis for the
technical regulation.  The burden rests with the European Communities, as the party "assert[ing] the
affirmative of a particular claim or defence", to demonstrate that the international standard is an
ineffective or inappropriate means to fulfil the legitimate objectives pursued by the Regulation.
                                                     
69 Appellate Body Report, US — Wool Shirts and Blouses , p. 335.
70 We are cognizant of the Appellate Body's finding in EC — Hormones  that, in reference to
Articles 3.1 and 3.3 of the SPS Agreement, the latter provision, which allows Members to establish their own
level of sanitary protection, does not constitute an exception to the general obligation of Article 3.1, and that theburden of the complaining party to establish a prima facie  case of inconsistency "is not avoided by simply
describing that provision as an 'exception'".  However, we consider that the Appellate Body's finding in EC —
Hormones  does not have a direct bearing on the matter before us.
71 We are aware that Members, pursuant to Article 2.5 of the TBT Agreement, upon the request of
another Member, "shall explain the justification for that  technical regulation in terms of the provisions of
paragraphs 2 to 4 [of Article 2]".  It cannot be excluded, however, that a Member, while acting in good faith,does not provide all the information required in sufficient detail for the respondent to determine with accuracy
what the "legitimate" objectives pursued are and, if applicable, what considerations of "inappropriateness"
underlie the Member's decision not to use the international standard as a basis.  Lack of such information could
frustrate a complainant's efforts to meet its burden of proof regarding the ineffectiveness or inappropriateness of
an international standard.WT/DS231/R
Page 68
2. Application of the TBT Agreement to measures adopted before 1 January 1995
7.53 The European Communities argues that Article 2.4 of the TBT Agreement is not applicable to
measures that were adopted before 1 January 1995.  Referring to Article 28 of the Vienna Convention,
the European Communities claims that the adoption of its Regulation was an "act … which took place
… before the date of entry into force of the treaty" and since there is no expression of contraryintention, Article 2.4 does not apply to the Regulation.
7.54 Article 2.4 of the TBT Agreement states:
Where technical regulations are required and relevant international standards exist or
their completion is imminent, Members shall use them, or the relevant parts of them,
as a basis for their technical regulations except when such international standards or
relevant parts would be an ineffective or inappropriate means for the fulfilment of the
legitimate objectives pursued, for instance because of fundamental climatic orgeographical factors or fundamental technological problems.
7.55 Peru claims that the expression "[w]here technical regulations are required" indicates that
Article 2.4 applies in the situations in which technical regulations are required and not merely at the
point in time when the decision to adopt them was taken.  Peru argues that the
European Communities' argument cannot be reconciled with Article XVI:4 of the WTO Agreement,which provides that "each Member shall ensure the conformity of its laws, regulations and
administrative procedures with its obligations as provided for in the annexed agreements" or with
Article 28 of the Vienna Convention, pursuant to which a treaty does apply to situations that continue
to exist after its entry into force.  Peru points out  that the European Communities made a similar claim
in the context of the SPS Agreement in EC — Hormones  which the Appellate Body rejected by stating
that "if negotiators had wanted to exempt the very large group of SPS measures in existence on
1 January 1995 … it appears reasonable to us to expe ct that they would have said so explicitly".
7.56 The general principle of international law embodied in Article 28 of the Vienna Convention is
that "[u]nless a different intention appears from the treaty or is otherwise established, its provisions do
not bind a party in relation to any act or fact which took place or any situation which ceased to existbefore the date of the entry into force of th e treaty with respect to that party."  In  Brazil — Desiccated
Coconut , the Appellate Body stated that, in refere nce to Article 28 of the Vienna Convention,
"[a]bsent a contrary intention, a treaty cannot apply to acts or facts which took place, or situations
which ceased to exist, before the date of its entry into force".
72  We note that the EC Regulation was
adopted on 21 June 1989 and the TBT Agreement entered into force on 1 January 1995.  In this
regard, the EC Regulation is a situation which has not  ceased to exist after the date of the entry into
force of the TBT Agreement but is a continuing situation. Therefore, absent a contrary intention, theTBT Agreement applies to the EC Regulation.
7.57 The TBT Agreement itself does not reveal any such contrary intentions.  The TBT Agreement
does not contain a transition period and there are provisions that indicate that the TBT Agreement was
intended to apply to technical regulations that were adopted before the entry into force of the
TBT Agreement.  We note, for instance, that Article 2.2 states that "Members shall ensure thattechnical regulations are not prepared, adopted or applied   with a view to or with the effect of creating
unnecessary obstacles to international trade"; Article 2.3 states that "[t]echnical regulations shall not
be maintained  if the circumstances or objectives giving rise to their adoption no longer exists…"; and
Article 2.6 states that a "Member preparing, adopting or applying  a technical regulation which may
have a significant effect on trade of other Members shall … explain justification for that technicalregulation" (emphasis added).
                                                     
72 Appellate Body Report, Brazil — Measures Affecting Desiccated Coconut  ("Brazil — Desiccated
Coconut "), WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, pp. 179-180.WT/DS231/R
Page 69
7.58 Although the temporal issue has not been considered by panels or the Appellate Body in the
context of the TBT Agreement, an analogous temporal issue has been considered in the context of the
SPS Agreement.  The Appellate Body in EC — Hormones  examined whether the SPS Agreement
applies to certain SPS measures that were enacted before the entry into force of the SPS Agreement
on 1 January 1995 and held that, under Article 28 of the Vienna Convention, the SPS Agreement isapplicable to such measures:
We agree with the Panel that the SPS Agreement would apply to situations or
measures that did not cease to exist, such as the 1981 and 1988 Directives, unless the
SPS Agreement reveals a contrary intention.  We also agree with the Panel that the
SPS Agreement does not reveal such an intention.  The SPS Agreement does not
contain any provision limiting the temporal application of the SPS Agreement , or of
any provision thereof, to SPS measures adopted after 1 January 1995.  In the absenceof such a provision, it cannot be assumed that central provisions of the
SPS Agreement , such as Articles 5.1 and 5.5, do not apply to measures which were
enacted before 1995 but which continue to be in force thereafter.
73
7.59 The factual aspect of the current dispute is not dissimilar to the one in hand in EC —
Hormones  in that, like the 1981 and 1988 Directives, the EC Regulation is a "situation or measure that
did not cease to exist" and the TBT Agreement does not reveal a contrary intention to limit the
temporal application of the TBT Agreement to measures adopted after 1 January 1995.
7.60 Therefore, Article 2.4 of the TBT Agreement applies to measures that were adopted before
1 January 1995 but which have not ceased to exist.
3. Whether Codex Stan 94 is a relevant international standard
(a) Consideration of Codex Stan 94 as a relevant international standard
7.61 Peru argues that Codex Stan 94 is a relevant international standard as it was adopted by the
Codex Alimentarius Commission which is an internationally recognized standard setting body that
develops standards for food products.  Referring to the definition of "standard" set out in Annex 1 of
the TBT Agreement, Peru argues that it is an international standard that was adopted by consensus.Peru claims that Codex Stan 94 is also a relevant international standard that applies to sardines and
sardine-type products that are prepared from the fish of 21 different species, including
Sardina pilchardus  and Sardinops sagax .
7.62 Although the European Communities does not contest that the Codex Alimentarius
Commission is an internationally recognized sta ndard setting body, the European Communities claims
that the requirement to use relevant international standards as a basis set out in Article 2.4 of the
TBT Agreement does not apply to existing measures .  The European Communities also argues that
Codex Stan 94 is not a relevant international standard on the basis that it did not exist and its adoption
was not imminent when the EC Regulation was ad opted.  Furthermore, the European Communities
also takes issue with several procedural features surrounding the development of Codex Stan 94.  The
European Communities argues that the standard was not adopted by consensus and that the prior, non-
final draft of Codex Stan 94 indicates that the use of the common name for the species other than
                                                     
73 Appellate Body Report, EC — Hormones , para. 128.  In Canada — Term of Patent Protection
("Canada — Patent Term "), WT/DS170/R, adopted 12 October 2000, as upheld by the Appellate Body Report,
WT/DS170/AB/R, the panel held that the TRIPS Agreement was applicable to patents that were granted before
the date of entry into force of the TRIPS Agreement (1 January 1996 for developed Members) because the
subject matter of the patent that was granted protection is ongoing and continues past 1 January 1996 and to theextent that the protection of the subject matter continues beyond that date, it is a situation that has not ceased to
exist and the TRIPS Agreement is therefore applicable.WT/DS231/R
Page 70
Sardina pilchardus  without the word "sardines" is an independent option and Peru's interpretation that
it is not an independent option would render Codex Stan 94 invalid.  The European Communities
argues that if Peru's interpretation were accurate, it would render Codex Stan 94 invalid because the
change in the language of the standard was made without a referral back to the Committee for its
approval.  According to the European Communities, under Codex rules, any substantive change in the
process of developing an international standard requires the approval of the Committee.  The
European Communities finally argues that paragraph 6.1.1(ii) of Codex Stan 94 is not the relevant
provision for the EC Regulation because the EC Regulation does not regulate products other than
preserved Sardina pilchardus .
7.63 International standards are standards that are developed by international bodies.  Our starting
point of analysis, therefore, is whether Codex Stan 94 comes within the scope of the definition of
"standard" provided in Annex 1.2 of the TBT Agreement and followed by whether theCodex Alimentarius Commission is an internati onal body within the meaning set out in Annex 1.2 of
the TBT Agreement.
7.64 The term "standard" is defined as:
Document approved by a recognized body, that provides, for common and repeated
use, rules, guidelines or characteristics for products or related processes andproduction methods, with which compliance is not mandatory.  It may also include or
deal exclusively with terminology, sym bols, packaging, marking or labelling
requirements as they apply to a product, process or production method.
7.65 A standard comes within the definition set out in paragraph 2 of Annex 1 of the
TBT Agreement if it provides "for common and repeated use, rules, guidelines or characteristics forproducts or related processes and production methods"; compliance is not mandatory; and is approved
by a "recognized body".  We note that the parties are in agreement that Codex Stan 94 is a "standard"
and see no reason to disagree with that assessment for the purposes of this dispute.  We therefore find
that Codex Stan 94 is a standard within the meaning of Annex 1.2 of the TBT Agreement.
7.66 With respect to whether the Codex Alimentarius Commission is an international body for the
purposes of this dispute,
74 we note that "international body" is defined in Annex 1.4 of the
TBT Agreement as a "[b]ody or system whose membership is open to the relevant bodies of at least
all Members".  According to Rule 1 of the Statutes and Rules of Procedures of the
Codex Alimentarius Commission, "[m]embershi p of the joint FAO/WHO Codex Alimentarius
Commission … is open to all Member Nations a nd Associate Members of the FAO and/or WHO."
As membership to the Codex Alimentarius Commission is open to all WTO Members, it is an
international body within the meaning of annex 1.4 of the TBT Agreement.  Moreover, we note thatPeru submitted that the Codex Alimentarius Commission was an internationally recognized standard
setting body that develops standards for food products and the European Communities indicated, in a
response to the Panel's question on the matter, that it did not "contest the status of the
Codex Alimentarius Commission as an international standardization body for the purposes of the
TBT Agreement".
7.67 Based on the reasons above, we find that Codex Stan 94 is an international standard for the
purposes of this dispute.
7.68 Having determined that Codex Stan 94 is an international standard, the analysis turns to
whether Codex Stan 94 is a "relevant" international standard in respect of the EC Regulation.  We
note that the ordinary meaning of the term "relevant" is "bearing upon or relating to the matter in
                                                     
74 We note that the Codex Alimentarius Commission is explicitly referred to in Article 3.4 of the
SPS Agreement.WT/DS231/R
Page 71
hand; pertinent".75  Based on the ordinary meaning, Codex Stan 94 must bear upon, relate to or be
pertinent to the EC Regulation for it to be a relevant international standard.
7.69 The title of Codex Stan 94 is "Codex Standard for Canned Sardines and Sardine-type
Products" and the EC Regulation lays down common marketing standards for preserved sardines.
The European Communities indicated in its response  that the term "canned sardines" and "preserved
sardines" are essentially identical.76  Therefore, it is apparent that both the EC Regulation and
Codex Stan 94 deal with the same product, namely  preserved sardines.  The scope of Codex Stan 94
covers various species of fish, including Sardina pilchardus  which the EC Regulation covers, and
includes, inter alia ,  provisions on presentation (Article 2.3), packing medium (Article 3.2), labelling,
including a requirement that the packing medium is to form part of the name of the food (Article 6),
determination of net weight (Article 7.3), foreign matter (Article 8.1) and odour and flavour
(Article 8.2).  The EC Regulation contains these corresponding provisions set out in Codex Stan 94,including the section on labelling requirement.
7.70 Therefore, for the reasons set out above and subject to the consideration of
European Communities' arguments below, we find that Codex Stan 94 is a relevant international
standard.
(b) Consideration of European Communities' temporal argument and its arguments that
Codex Stan 94 is not a relevant international standard
7.71 We noted that the ordinary meaning of the term "relevant" is "bearing upon or relating to the
matter in hand; pertinent".  The dictionary meaning indicates that relevance refers to the subject
matter at issue, i.e., preserved sardines, and not to the temporal aspect of the international standard or
procedural aspect of the adoption of the international standard.  We will nevertheless consider theEuropean Communities' argument that Codex Stan 94 is not a relevant international standard on the
ground that it did not exist and its completion was not imminent when the European Communities
adopted the Regulation.
(i) The European Communities' argument that the requirement to use relevant international
standards as a basis does not apply to existing technical regulations
7.72 The European Communities advances the argument that the language of Article 2.4 of the
TBT Agreement requiring that relevant international standards be used as a basis for drawing up
technical regulations suggests that the obligation does not apply to existing measures.  The
European Communities argues that the requirement to use a relevant international standard for
technical regulations exists prior to the adoption of the measure, not afterwards because international
standards cannot be used as a basis when technical regulations have already been adopted.  The
European Communities argues that the use of the word "imminent" further confirms its interpretation.For these reasons, the European Communities argues that Article 2.4 of the TBT Agreement applies
only to preparation and adoption and not to the application of technical regulations.
7.73 As noted earlier, Article 2.4 of the TBT Agreement states:
Where technical regulations are required and relevant international standards exist or
their completion is imminent , Members shall use them, or the relevant parts of them,
as a basis for their technical regulations except when such international standards or
relevant parts would be an ineffective or inappropriate means for the fulfilment of the
legitimate objectives pursued, for instance because of fundamental climatic or
geographical factors or fundamental technological problems. (emphasis added)
                                                     
75 Webster's New World Dictionary , (William Collins & World Publishing Co., Inc., 1976), p. 1199.
76 EC's Response to Panel Question 6.WT/DS231/R
Page 72
7.74 Article 2.4 of the TBT Agreement starts with the language "where technical regulations are
required".  We construe this expression to cover technical regulations that are already in existence as
it is entirely possible that a technical regulation that is already in existence can continue to be
required.  Considered in the context of Article 28 of the Vienna Convention, the existing technical
regulation is a situation that has not ceased to exist but continues to exist and Article 2.4 that requiresthe use of relevant international standards for te chnical regulations would therefore apply to those
existing technical regulations.  Moreover, we note that the first part of the sentence of Article 2.4 is in
the present tense ("exist") and not in the past tense — "[w]here technical regulations are required and
relevant international standards exist or their completion is imminent ", Members are obliged to use
such international standards as a basis.  This supports the view that Members have to use relevant
international standards that currently exist or whose completion is imminent with respect to the
technical regulations that are already in existence.   We do not consider that the word "imminent", the
ordinary meaning of which is "likely to happen without delay",
77 is intended to limit the scope of the
coverage of technical regulations to those that have yet to be adopted.  Rather, the use of the word
"imminent" means that Members cannot disregard a relevant international standard whose completion
is imminent with respect to their existing technical regulations.  Therefore, a textual reading of
Article 2.4 does not support the view that the requirement to use relevant international standards as abasis for technical regulations applies only to technical regulations that are to be prepared and adopted
and is not applicable to existing technical regulations.
7.75 There is contextual support for the interpretation that Article 2.4 applies to technical
regulations that are already in existence.  The context provided by Article 2.5, which explicitly refers
to Article 2.4, speaks of "preparing, adopting or applying " a technical regulation and is not limited to,
as the European Communities claims, to preparing and adopting.   A technical regulation can only be
applied if it is already in existence.  The first sentence imposes an obligation on a Member "preparing,
adopting or applying" a technical regulation that may have a significant effect on trade of other
Members to provide the justification for that technical regulation.  The second sentence of Article 2.5
states that whenever a technical regulation is "prepared, adopted or applied " for one of the legitimate
objectives explicitly set out in Article 2.2 and is in accordance with relevant international standards, it
is to be rebuttably presumed not to create an unnecessary obstacle to trade.  The use of the term
"apply", in our view, confirms that the requirement contained in Article 2.4 is applicable to existing
technical regulations.
7.76 Article 2.6 provides another contextual support.  It states that Members are to participate in
preparing international standards by the international standardizing bodies for products which they
have either " adopted , or expect to adopt technical regulations."  Those Members that have in place a
technical regulation for a certain product are expected to participate in the development of a relevant
international standard.  Article 2.6 would be redundant and it would be contrary to the principle of
effectiveness, which is a corollary of the general rule of interpretation in the Vienna Convention, if a
Member is to participate in the development of a relevant international standard and then claim that
such standard need not be used as a basis for its technical regulation on the ground that it was alreadyin existence before the standard was adopted.  Such reasoning would allow Members to avoid using
international standards as a basis for their technical regulations simply by enacting preemptive
measures and thereby undermine the object and purpose of developing international standards.
7.77 Based on our examination of the ordinary meaning of the words contained in Article 2.4 of
the TBT Agreement and the context provided by Articles 2.5 and 2.6, we are of the view that therequirement contained in Article 2.4 to use relevant international standards as a basis for technical
regulations applies to technical regulations that are already in existence.  We note, however, that the
European Communities argued that while relevant international standards could be used as a basis for
a technical regulation when it is amended, this issue was not before the Panel.  The
European Communities argued that the question at issue is whether Members have an obligation after
                                                     
77 Webster's New World Dictionary , supra , p. 702.WT/DS231/R
Page 73
the WTO Agreement entered into force to revise th eir existing technical regulations to ensure that
they have used relevant international standards as a basis.  The European Communities argued that
there is no obligation to review and amend existing technical regulations whenever an international
standard is adopted or amended and that such obligation would turn standardisation bodies virtually
into "world legislators".  The European Communities noted that the Appellate Body stated withrespect to "an obligation to use standards: We cannot lightly assume that sovereign states intended to
impose upon themselves the more onerous, rather than less burdensome, obligation…".
7.78 In our view, Article 2.4 of the TBT Agreement imposes an ongoing obligation on Members to
reassess their existing technical regulations in light of the adoption of new international standards or
the revision of existing international standards.  We do not, however, share the concern expressed by
the European Communities that the obligation to amend a technical regulation when a new
international standard is adopted would turn standardization bodies into "world legislators" becausethe nature of the obligation agreed to by Members is circumscribed by four elements.  First, the
obligation applies only "where technical regulations are required".  If a Member does not enact a
technical regulation or determines that the technical regulation is no longer required, it need not
consider the international standard.  Second, the obligation exists only to the extent that the
international standard is relevant for the existing t echnical regulation.  Third, if it is determined that a
technical regulation is required and the international standard is relevant, Members are to use that
international standard "as a basis", which means that Members are to use a relevant international
standard as "the principal constituent … or fundamental principle" 
78 and does not mean that Members
must conform to or comply with that relevant in ternational standard.  The requirement to use the
relevant international standard as a basis does not impose a rigid requirement to bring the technicalregulation into conformity with the relevant international standard.
79  This provides Members with a
certain amount of latitude in complying with  the obligation set out in Article 2.4 of the
TBT Agreement.  In our view, the reference to th e term "use as a basis" in Article 2.4 of the
TBT Agreement recognizes that there may be various ways in which Members can use the relevant
international standard in the formulation of their technical regulations.  Finally, Members are notobliged to use the relevant international standard if such international standard is ineffective or
inappropriate to fulfil the legitimate objectives pursued by the technical regulation.
80  Thus, a
judicious application of the obligations contained in  Article 2.4 provides assurances against the over-
reaching implied by the European Communities.
7.79 If Members did not have an ongoing obligation to examine their technical regulation in light
of relevant international standards that are adopted or revised, the effect would be to create
grandfather rights for those existing technical regulations that are at odds with those internationalstandards as only the technical regulations enacted after the adoption or revision of the international
standard would be subject to the international standard.
81  If we were to find that Members do not
have an ongoing obligation to reassess their technical regulations, it would be possible to preempt
obligations under Article 2.4 of the TBT Agreement by adopting technical regulations before relevant
international standards are adopted.  As we have examined above, the ordinary meaning and context,especially in the context of Article 2.6 of the TBT Agreement, do not support the view that Members
do not have an ongoing obligation to reassess their technical regulations in light of new international
standards that are adopted.
                                                     
78 Webster's New World Dictionary , supra , p. 117.
79 This reading of Article 2.4 of the TBT Agreement is consistent with the Appellate Body's finding in
EC — Hormones  that "based on" does not mean "conform to".
80 A detailed discussion on the meaning of ineffective and inappropriate is set out in paragraph 7.116.
81 We note in this regard that the Appellate Body stated that because the "WTO Agreement was
accepted definitively by Members … there are no longer 'existing legislation' exceptions (so called 'grandfather
rights')".  EC — Hormones , para. 128.WT/DS231/R
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7.80 There are other provisions that contextually support the view that the obligation under
Article 2.4 is not a static obligation and that there is an ongoing obligation to reassess technical
regulations in light of international standards that are adopted or revised.  Article 2.3 of the
TBT Agreement states:
Technical regulations shall not be maintained if the circumstances or objectives
giving rise to their adoption no longer exist or if the changed circumstances or
objectives can be addressed in a less trade-restrictive manner.
7.81 The language of Article 2.3 suggests that Members are to eliminate technical regulations that
no longer serve their purpose or amend them if the changed circumstances or objectives can be
addressed in a less trade-restrictive manner.  This requirement also applies to technical regulations
that were enacted before the TBT Agreement came into force.  Thus, Members would be under an
obligation to periodically evaluate their technical regulations and either discontinue them if they nolonger serve their objectives or change them if there is a less trade-restrictive manner in which to
achieve the underlying objectives of the regulations. 
 Such reading of Article 2.3 is supported by
Article 2.8 of the TBT Agreement which states that, wherever appropriate, Members are to "specify
technical regulations based on product requirements in terms of performance  rather than design or
descriptive characteristics".  Performance, the ordi nary meaning of which is "operation or functioning,
usually with regard to effectiveness",82 of products can change and technical regulations governing
these products are to reflect these changes.  The above interpretation is also consistent with the object
and purpose of not creating unnecessary obstacles to international trade and one way to achieve that
objective is to discontinue technical regulations that no longer serve their purpose or find a less trade-
restrictive manner in which the objective can be fulfilled.
7.82 In support of its argument that Article 2.4 doe s not create an ongoing obligation to reassess
technical regulations when international standards are adopted or amended, the
European Communities referred to the Appellate Body's statement that "[w]e cannot lightly assume
that sovereign states intended to impose upon themselves the more onerous, rather than the less
burdensome, obligation…".  The full sentence reads: "We cannot lightly assume that sovereign statesintended to impose upon themselves the more onerous, rather than the less burdensome, obligation by
mandating conformity  or compliance  with such standards, guidelines and recommendations".  Thus, it
is clear that the Appellate Body was distinguishing an obligation to conform to or comply with
international standard from the language "based on".  We have unequivocally stated that the term "use
as a basis" does not mean conform to or comply with relevant international standards.  It is our view,
however, that, based on the reasons set out above, Members intended to impose an ongoing obligation
to reassess their technical regulations in light of international standards that are adopted or revised andto use those relevant international standards as a basis for the technical regulations.
7.83 Based on the reasons set out above, we reject the European Communities' argument that
Article 2.4 does not apply to existing technical regulations.
(ii) The European Communities' argument that the "predecessor standard" to Codex Stan 94
should have been invoked because Codex Stan 94 is not the relevant international standard asit did not exist and its adoption was not imminent when the EC Regulation was adopted
7.84 The European Communities argues that even if Article 2.4 were to have a retroactive effect,
Codex Stan 94 is not a relevant international standard because "it did not exist and its adoption was
not 'imminent' when the Regulation was adopted".  The European Communities claims that Peru
should have invoked the "predecessor standard" in arguing that the EC Regulation is inconsistent withthe relevant international standard.  The European Communities points out that "it did comply with
                                                     
82 Webster's New World Dictionary , supra , p. 1056.WT/DS231/R
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the requirements of the Tokyo Round Standards Code when it adopted the Regulation and notified it
to the GATT".83
7.85 We examined above the European Communities' temporal argument that Article 2.4 of the
TBT Agreement does not apply to measures that were enacted prior to 1 January 1995 and found that,
under Article 28 of the Vienna Convention, the EC Regulation is a situation that has not ceased toexist but continues to exist and Article 2.4 of the TBT Agreement therefore is applicable to the
EC Regulation.  Our conclusion becomes more apparent when the EC Regulation is considered from
the perspective of the application rather than the adoption of the Regulation.
84
7.86 Having determined that Article 2.4 is applicable to the EC Regulation, we note that
Article 2.4 does not impose any temporal constraint in respect of relevant international standards that
are to be used as a basis for technical regulations.  Moreover, as we noted in paragraphs 7.78 to 7.82,
Members have an ongoing obligation to reassess their technical regulations in light of relevantinternational standards that are adopted or revised.  We do not agree with the European Communities'
argument that Peru should have invoked the "predecessor standard", presumably the 1978 version of
Codex Stan 94, for the reasons set out in paragraphs 7.56 to 7.60.
85
7.87 Based on the reasons set out above, we reject the European Communities' argument that
Codex Stan 94 is not a relevant international standard because it did not exist and its adoption was notimminent when the EC Regulation was adopted and that Peru should have invoked the predecessor
standard.
(iii) The European Communities' argument that Codex Stan 94 is not a relevant international
standard because it was not adopted by consensus
7.88 The European Communities argues that because there was no consensus in adopting
Codex Stan 94, it is inconsistent with the principle of relevance contained in the Decision of the
Committee on Principles for the Development of International Standards, Guides and
Recommendations with Relation to Articles 2, 5 and Annex 3 of the Agreement (the "Decision") and
therefore is not a relevant international standard.
7.89 For the purposes of determining whether standards must be based on consensus, the
controlling provision is paragraph 2 of Annex 1 of the TBT Agreement and its explanatory note.  The
explanatory note for paragraph 2 provides:
Standards prepared by the international standardization community are based on
consensus.  This Agreement covers also documents that are not based on consensus.
7.90 The first sentence reiterates the norm of the international standardization community that
standards are prepared on the basis of consensus.   The following sentence, however, acknowledges
that consensus may not always be achieved and that international standards that were not adopted byconsensus are within the scope of the TBT Agreement.
86  This provision therefore confirms that even
if not adopted by consensus, an international standard can constitute a relevant international standard.
                                                     
83 EC's First Submission, para. 115.
84 The European Communities argued that "[t]he adop tion of the Regulation was an 'act' … which took
place … before the date of the entry into force of the treaty and, since there is no expression of contraryintention Article 2.4 does not apply to it".  EC's First Submission, para. 113.
85 With respect to the European Communities' argument that it complied with the Tokyo Round
Standards Code when it adopted the Regulation, we note that the Tokyo Round Standards Code was terminated
pursuant to a decision taken by the Tokyo Round Committee on Technical Barriers to Trade.
86 The record does not demonstrate that Codex Stan 94 was not adopted by consensus.  In any event,
we consider that this issue would have no bearing on our determination in light of the explanatory note ofWT/DS231/R
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7.91  The Decision to which the European Communities refers is a policy statement of preference
and not the controlling provision in interpreting the expression "relevant international standard" as set
out in Article 2.4 of the TBT Agreement.  The controlling provision must be understood as
paragraph 2 of Annex 1 of the TBT Agreement.  As we have seen above, the explanatory note of
Annex 1.2 states that standards covered by the TBT Agreement include those that were adopted byconsensus and those that were not adopted by consensus.
7.92 Therefore, we reject the European Communities' argument that Codex Stan 94 is not a
relevant international standard must be rejected.
(iv) The European Communities' argument that Codex Stan 94 is not a relevant international
standard on the basis that Peru's interpretation would mean that the Codex Stan 94 is invalid
because there was no referral to the Committee even though there was a substantive change
7.93 The European Communities argues that the negotiating history of paragraph 6.1.1 of
Codex Stan 94 indicates that the provision provid es an option between "X sardines" on the one hand
and the common name of the species on the other.  The European Communities' claim is based on the
fact that the change is described as "editorial" in the minutes of the meeting.  The
European Communities points out that the text of paragraph 6.1.1 was prepared and discussed in steps
1 to 7 and the text reads:
6.1.1  The name of the product shall be:
(i)  "Sardines" (to be reserved exclusively for Sardina pilchardus  (Walbaum)); or
(ii)  "X sardines", where "X" is the name of a country, a geographic area, or the
species; or
(iii)  the common name of the species;in accordance with the law and custom of the country in which the product is sold,
and in a manner not to mislead the consumer.
The final version of the text reads:
The name of the product shall be:
6.1.1  (i) "Sardines" to be reserved exclusively for Sardina pilchardus  (Walbaum); or
(ii) "X Sardines" of a country, a geographic area, the species, or the common name of
the species in accordance with the law and custom of the country in which the
product is sold, and in a manner not to mislead the consumer.
7.94 The European Communities' argument is that thes e changes are "editorial" as indicated in the
minutes of the meeting and points out that substantive changes cannot be made at step 8 of the
adoption process because an amendment at the stage requires the text to be referred back to therelevant committee for comments before its final adoption.  Therefore, according to the
European Communities, the reformulation of the text at step 8 cannot have produced any substantive
change and its interpretation that a Member can choose between "X sardines" and common names is
correct and that any change to this interpretati on would render Codex Stan 94 invalid and therefore
cannot be deemed relevant.
7.95 While the European Communities' explanation on the negotiating history and the process
involving the adoption of an international standard is much appreciated,  we are not persuaded that the
negotiating history supports the European Communities' interpretation that Codex Stan 94 allows
Members to choose between "X sardines" on the one hand and the common name of the species in
accordance with the law and custom of the country in which the product is sold on the other hand.
                                                                                                                                                                    
paragraph 2 of Annex 1 of the TBT Agreement which states that the TBT Agreement covers "documents that
are not based on consensus".WT/DS231/R
Page 77
The text of Codex Stan 94 is clear on its face that it provides Members with four alternatives using the
term "sardines" combined with the name of a country, the name of a geographic area, the name of
species or the common name.87  Moreover, the deletion of the third alternative and the adoption of the
current text indicate that the latter reflects the tr ue intentions of the drafters.  That the change is
referred to as "editorial" in the minutes of the meeting suggests that both the earlier version and thefinal text expressed the same view but the final text did so more succinctly.  Thus, paragraph 6.1.1 of
Codex Stan 94 provides four alternatives and the use of the common name is not, as argued by the
European Communities, "a self standing option independent from the formula 'X sardine'".
7.96 For these reasons, we reject the European Communities' argument that Codex Stan 94 is not a
relevant international standard.
(v) The European Communities' argument that Codex Stan 94 is not a relevant international
standard because the EC Regulation does not regulate products other than preserved  Sardina
pilchardus
7.97 The European Communities argues that paragraph 6.1.1(ii) of Codex Stan 94, on which Peru
relies to argue that the EC Regulation is inconsistent with Article 2.4, is not the relevant provision
because the EC Regulation does not apply to products other than preserved Sardina pilchardus .  The
European Communities argues that the relevant part of the international standard is paragraph 6.1.1(i)of Codex Stan 94 which deals with Sardina pilchardus .
7.98 We referred to the Appellate Body finding in EC — Asbestos  that a document may prescribe a
product characteristic in either a positive or a negative form.  We determined that Article 2 of the
EC Regulation requires positively that only products using Sardina pilchardus  can be "marketed as
preserved sardines and under the trade description referred to in Article 7" and that the negativeimplication flowing therefrom is that those products using species other than Sardina pilchardus
cannot be "marketed as preserved sardines and under the trade description referred to in Article 7".
We considered that by laying down a product characteristic that only Sardina pilchardus  can
constitute preserved sardines, the EC Regulation regulates species other than Sardina pilchardus  by
laying down product characteristics in a negative form.
7.99 As a standard that lays down product characteristics for Sardinops sagax  and other species
except Sardina pilchardus , we consider that paragraph 6.1.1(ii) of Codex Stan 94 is the relevant
provision of the international standard in respect of species other than Sardina pilchardus  and
therefore reject the European Communities' argument that paragraph 6.1.1(ii) of Codex Stan 94 is not
the relevant provision. Therefore, we confirm our finding in paragraph 7.70 that Codex Stan 94 is a
relevant international standard.
4. Whether Codex Stan 94 was used as a basis for the technical regulation
7.100  Peru acknowledges that a measure would be cons istent with paragraph 6.1.1(i) if it requires
the term "sardines", when used without any qualification, be reserved for Sardina pilchardus .
However, Peru contends that all other species referred to in Codex Stan 94 may be marketed, pursuant
to sub-paragraph (ii), as "X sardines" where "X" is either a country, a geographic area, the species or
the common name of the species.  Peru argues that Sardinops sagax  exported by Peru to the
European Communities shall be marketed as "Peruvian sardines", "Pacific sardines", just "sardines"
combined with the name of the species or the common name in the European Communities' member
State in which the sardines are sold, such as "Südamerikanische Sardinen" in Germany.  Peru
contends that in each of the four alternatives set out in this labelling standard, the term "sardines" is
part of the trade description and a total prohibition on the use of the term "sardines" in the labelling ofcanned sardines is not foreseen.  Peru argues that it is therefore inconsistent with sub-paragraph (ii) of
                                                     
87 Our examination of paragraph 6.1.1 of Codex Stan 94 is set out in paragraphs 7.103 to 7.109.WT/DS231/R
Page 78
paragraph 6.1.1 of Codex Stan 94 if sardines of the species Sardinops sagax  may not be marketed
under the name "sardines" qualified by the name of a country, name of a geographic area of origin,
name of the species or the common name.
7.101  The European Communities argues that, under paragraph 6.1.1(ii) of Codex Stan 94, each
country has the option of choosing between "X sardines" and the common name of the species.  TheEuropean Communities argues that "the common name of the species in accordance with the law and
customs of the country in which the product is sold" is intended to be a self-standing option
independent of the formula "X sardines". The Eur opean Communities argues that the fact that the
name for products other than Sardina pilchardus could not be harmonized and had to defer to each
country is reflected in the language "in accordance with the law and custom of the country in which
the product is sold".  The European Communities ar gues that the use of the word "sardines" for
products other than preserved Sardina pilchardus would not be in accordance with the law and
custom of the European Communities' member St ates and would mislead the consumers in the
European Communities.  The European Communitie s notes that there is an additional element
contained in Codex Stan 94 that is not applicable to Sardina pilchardus  but applicable to other
species, namely that the trade description of the latter group of species must not mislead the consumer
in the country in which the product is sold.
7.102  Paragraph 6.1.1 of Codex Stan 94 reads:
The name of the product shall be:
6.1.1  (i) "Sardines" to be reserved exclusively for Sardina pilchardus  (Walbaum); or
(ii) "X Sardines" of a country, a geographic area, the species, or the common name of
the species in accordance with the law and custom of the country in which theproduct is sold, and in a manner not to mislead the consumer.
7.103  Textual reading of paragraph 6.1.1(ii) suggests that for species other than Sardina pilchardus ,
the label would read "X Sardines" with the "X" denoting a country, a geographic area, the species or
the common name of the species in accordance with the law and custom of the country where the
product is sold.  We consider that paragraph 6.1.1(ii) of Codex Stan 94 contains four alternatives andeach alternative envisages the use of the term "sardines" combined with the name of a country, name
of a geographic area, name of the species or the common name of the species in accordance with the
law and custom of the country in which the product is sold.
7.104  The European Communities construes paragraph 6.1.1(ii) of Codex Stan 94 as providing a
choice between "X sardines" with the "X" representing a country, geographical area or the species on
the one hand and the common name of species in accordance with the law and custom of the country
in which the product is sold on the other hand.  The European Communities' interpretation is based onthe fact that the phrase "the common name of the species in accordance with the law and custom of
the country in which the product is sold" is situ ated between commas; there is no comma between
"species" and "in accordance with"; and there is a comma before "and in a manner not to mislead the
consumer".
7.105  We are not persuaded that the European Communities' reasons support its interpretation.  As a
matter of  English grammar, it is not uncommon to in sert a comma before the words "or" when listing
more than two items.  That is, the expression "A, B, C, or D" means one of the four items.  It does not
mean that A, B or C constitute one option while D is another option.  For the European Communities'
interpretation to be persuasive, Codex Stan 94 would at least have to contain an additional "or" so as
to read:WT/DS231/R
Page 79
"X Sardines" of a country, a geographical area or the species, or the common name of
the species in accordance with the law and custom of the country in which the
product is sold, and in a manner not to mislead the consumer.
7.106  With respect to the European Communities' s econd argument that there is no comma between
"species" and "in accordance with", the comma is missing because the words "in accordance with thelaw and custom of the country in which the product is sold" refer to the "common name of the
species" and not to the name of a country, a geographical area or the species which need not be
subject to the law and custom of the country.
88
7.107  With respect to the European Communities' third argument, the existence of a comma before
"and in a manner not to mislead the consumer" indicates that the requirement of not misleading the
consumer attaches to all four alternatives.
7.108  The interpretation that paragraph 6.1.1(ii) of Codex Stan 94 contains four alternatives which
provide for the use of the term "sardines" in each alternative is confirmed by the French text of
Codex Stan 94.  We note that the official lang uages of the Codex Alimentarius Commission are
English, French and Spanish which means that all three versions are authentic.  The French version
reads:
"Sardines X", "X" désignant un pays, une zone géographique, l'espèce ou le nom
commun de l'espèce en conformité des lois et usages du pays où le produit est vendu ,
de manière à ne pas induire le consommateur en erreur. (emphasis added)
7.109  The French version confirms the interpretation that a Member is to choose among the four
available alternatives and that it does not offer the option of choosing between "X Sardines" of a
country, a geographical area or the species on the one hand and the common name in accordance withthe law and custom of the country on the other hand.  The Spanish version also confirms the view that
the name of the species or common name must be added to the word "sardines" and not replace the
word "sardines".
7.110  We note the European Communities' argument that even if Peru's interpretation were valid in
that the term "sardines" must be used with a qualification for species other than Sardina pilchardus ,
Article 2.4 of the TBT Agreement would still not require that such name be used because use as a
basis does not mean conform to.  We are cognizant of the Appellate Body's finding in EC —
Hormones  that the term "based on" does not mean "conform to".  Yet, this observation does not
resolve the issue at hand.  Article 2.4 states that Members " shall use" international standards "as a
basis" for their technical regulation.  The use of the word "shall" denotes a requirement that is
obligatory in nature and that goes beyond mere encouragement.  The ordinary meaning of the word
"use" is "to employ for or apply to a given purpose".
89  The word "basis" means "the principal
constituent of anything, the fundamental principle or theory, as of a system of knowledge".90  Thus, if
the European Communities "used" the existing relevant international standard, that is, if it employed
or applied Codex Stan 94 as the principal constituent or fundamental principle for the purpose of
enacting its technical regulation governing preserved sardines, the EC Regulation would not be
inconsistent with Article 2.4 of the TBT Agreement.
                                                     
88 We note that the Report of the Tenth Session of the Codex Committee on Fish and Fishery Products
states: "The attention of the Committee was drawn to the clause that the name of the food should be 'in
accordance with the law and custom of the country in whic h the product is sold'.  One delegation held the view
that such a requirement was not conducive to harmonization of food legislation.  Other delegations stated thatfor sardines and sardine type products this provision was indispensable.  It was agreed to request governments to
supply information on the names commonly used  in labelling of these types of products in their countries".
(emphasis added)
89 Webster's New World Dictionary , supra , p. 1564.
90 Ibid. , p. 117.WT/DS231/R
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7.111  In this regard, the European Communities argued that its Regulation uses Codex Stan 94 as a
basis and is therefore consistent with Article 2.4 of the TBT Agreement.  Specifically, the
European Communities argued that Codex Stan 94 provides that the trade description for species
other than Sardina pilchardus  is to be determined by the country in which the product is sold in
accordance with its law and custom.  Based on this interpretation of Codex Stan 94, theEuropean Communities argued that because the UK and German laws prescribe that the trade
description for Sardinops sagax  is to be Pacific pilchard and Sardinops or pilchard, respectively, there
is no need to allow Sardinops sagax  to be labelled as sardines on the basis that the use of the term
"sardines" would not be in accordance with the law and custom of European Communities' member
States.  As we have found above, paragraph 6.1.1(ii) of Codex Stan 94 contains four alternatives for
labelling species other than Sardina pilchardus  and all four alternatives require the use of the term
"sardines" with a qualification.  The European Communities' interpretation that Members need not usethe term "sardines" if their laws provide otherw ise would render international standards meaningless
because Members would be able to justify their non-use of the relevant international standard on the
basis that their domestic technical regulations are contrary to the international standard.
7.112  We recall our finding that the EC Regulation constitutes a technical regulation within the
meaning of Annex 1.1 of the TBT Agreement as it lays down product characteristics of preservedsardines.  We also found that the EC Regulation contains a labelling requirement that permits only
products prepared from Sardina pilchardus  to be labelled as "sardines" and that species such as
Sardinops sagax  cannot be called "sardines" even when it is combined with the name of a country,
name of a geographic area, name of the species or the common name in accordance with the law and
custom of the country in which the product is sold.  The European Communities confirmed thatspecies other than Sardina pilchardus  cannot use the word "sardines" and that preserved
Sardinops sagax  is referred to as pilchards in the European Communities.  In light of our findings
above, we find that the relevant international standard, i.e., Codex Stan 94, was not used as a basis for
the EC Regulation.
5. Whether Codex Stan 94 would be an inef fective or inappropriate means for the
fulfilment of the legitimate objectives pursued
7.113  The European Communities contends that Codex St an 94, by allowing for the use of the word
"sardines" for products other than Sardina pilchardus , is ineffective or inappropriate to fulfil the
objectives of consumer protection, market transparency and fair competition.  The
European Communities argues that its consumers expect that products of the same nature and
characteristics will always have the same trade desc ription, and that consumers in most member States
of the European Communities have always, and in some member States have for at least 13 years,associated "sardines" exclusively with Sardina pilchardus .  With respect to the objective of promoting
fair competition, the European Communities argues that Peru should not be able to take advantage of
the reputation associated with the term "sardines", but that Peru should "develop its own reputation
with its own name and persuade the consumer to ap preciate its product with its own characteristics".
7.114  In paragraph 7.50, we determined that the European Communities, as the party asserting that
Codex Stan 94 is ineffective or inappropriate to fulfil the legitimate objectives pursued by the
Regulation, has the burden of proving this assertion.  Although the burden of proof rests with the
European Communities to prove that Codex Stan 94 is an ineffective or inappropriate means for the
fulfilment of the legitimate objectives pursued, we no te that Peru has provided sufficient evidence and
legal arguments, as set out below, to demonstrate that Codex Stan 94 is not an ineffective orinappropriate means to fulfil the legitimate objectives pursued by the EC Regulation.
7.115  In assessing the arguments presented by the European Communities, we must first determine
what should be understood by the term "ineffective or inappropriate" and what the "legitimate
objectives" referred to by this provision are.WT/DS231/R
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7.116  Concerning the terms "ineffective" and "inappropriate", we note that "ineffective" refers to
something which is not "having the function of ac complishing", "having a result", or "brought to
bear",91 whereas "inappropriate" refers to something which is not "specially suitable", "proper", or
"fitting".92  Thus, in the context of Article 2.4, an ineffective means is a means which does not have
the function of accomplishing the legitimate objective pursued, whereas an inappropriate means is ameans which is not specially suitable for the fulfilment of the legitimate objective pursued.  An
inappropriate means will not necessarily be an ineffective means and vice versa.  That is, whereas it
may not be specially suitable  for the fulfilment of the legitimate objective, an inappropriate means
may nevertheless be effective  in fulfilling that objective, despite its "unsuitability".  Conversely, when
a relevant international standard is found to be an effective means, it does not automatically follow
that it is also an appropriate means. The question of effectiveness bears upon the results  of the means
employed, whereas the question of appropriateness relates more to the nature  of the means employed.
7.117  We note that the terms "ineffective" and "inappropriate" are separated in the text by the
disjunctive "or".  Thus, it is clear that the party invoking the affirmative defence under Article 2.4
need not establish that a relevant international stan dard is both ineffective and inappropriate.  If it is
established by a party that the relevant international standard is either an ineffective or inappropriate
means for the fulfilment of the legitimate objective pursued, that party would not have to use theinternational standard as a basis for its technical regulation.
93
7.118  The next question we address concerns the phrase "legitimate objectives pursued".  We first
consider that the "legitimate objectives" referred to in Article 2.4 must be interpreted in the context of
Article 2.2, which lists examples of objectives which are considered legitimate under the
TBT Agreement.  As indicated by the phrase " inter alia ", this list is illustrative and allows for the
possibility that other objectives, which are not explicitly mentioned, may very well be legitimate
under the TBT Agreement.
7.119  We also note in this respect that the WTO Members expressed in the preamble to the
TBT Agreement their desire that:
[…] technical regulations and standards […] do not create unnecessary obstacles  to
trade […]; (emphasis added)
and recognized that:
no country should be prevented from taking measures to ensure the quality of its
exports, or for the protection of human, animal or plant life or health, of the
environment, or for the prevention of deceptive practices, at the levels it considers
appropriate, subject to the requirement that they 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  […]. (emphasis added)
7.120  Article 2.2 and this preambular text affirm that it is up to the Members to decide which policy
objectives they wish to pursue and the levels at which they wish to pursue them.  At the same time,
these provisions impose some limits on the regulatory autonomy of Members that decide to adopttechnical regulations: Members cannot create obstacles to trade which are unnecessary or which, in
their application, amount to arbitrary or unjustifiable discrimination or a disguised restriction on
international trade.  Thus, the TBT Agreement, like the GATT 1994, whose objective it is to further,
                                                     
91 The New Shorter Oxford English Dictionary , (Clarendon Press, 1993), p. 786.
92 Ibid. , p. 103.
93 In this case, we observe that the European Communities has used the terms "ineffective" and
"inappropriate" interchangeably throughout its oral and written statements.WT/DS231/R
Page 82
accords a degree of  deference with respect to the domestic policy objectives which Members wish to
pursue.  At the same time, however, the TBT Agreement, like the GATT 1994, shows less deference
to the means which Members choose to employ to achieve their domestic policy goals.  We consider
that it is incumbent upon the respondent to advance the objectives of its technical regulation which it
considers legitimate.
7.121  Article 2.4 refers to "the legitimate objective pursued".  The ordinary meaning of "to pursue"
is "to try to obtain or accomplish" and "to aim at".94  Thus, a "legitimate objective pursued" is a
legitimate objective which a Member aims at or tries to accomplish.  Only the Member pursuing the
legitimate objective is in a position to elaborate the objective it is trying to accomplish.  Panels are,
however, required to determine the legitimacy of those objectives.  We note in this regard that the
panel in Canada — Pharmaceuticals Patents , in defining the term "legitimate interests", stated that it
must be defined "as a normative claim calling for protection of interests that are 'justifiable' in thesense that they are supported by relevant public policies or other social norms".
95
7.122  Thus, we are obliged to examine whether the objectives outlined by the
European Communities are legitimate in the context of Article 2.4 of the TBT Agreement.  We note,
however, that in this case Peru acknowledged that the objectives identified by the
European Communities are legitimate and we see no reason to disagree with the parties' assessment inthis respect.  Accordingly, we will proceed with our examination based on the premise that the
objectives identified by the European Communities are legitimate.
7.123  We now turn to the arguments presented by the European Communities in support of its
position that Codex Stan 94 is ineffective or inappropriate for the fulfilment of the three legitimate
objectives pursued by its Regulation.  We recall that the three legitimate objectives pursued by theEC Regulation are market transparency, consumer protection and fair competition and these
objectives, as argued by the European Communities, are interdependent and interact with each other.
In this regard, we are mindful of the European Communities' argument that providing accurate and
precise names allows products to be compared with their true equivalents rather than with substitutes
and imitations whereas inaccurate and imprecise names reduce transparency, cause confusion, misleadthe consumer, i.e., make consumers believe that they are buying something they are not, allow
products to benefit from the reputation of other different products, give rise to unfair competition and
reduce the quality and variety of products available in trade and ultimately for the consumer.  In light
of the fact that the three objectives are closely interrelated, if we were to find that Codex Stan 94
allows for precise labelling of products so as to  improve market transparency, such finding would
have a bearing upon whether Codex Stan 94 is effective or appropriate in protecting consumers and
promoting fair competition, that is, not misleading consumers and confusing them into believing thatthey are buying something that they are not.  We also note that the European Communities' stated
objectives are based on the factual premise that the consumers in the European Communities associate
"sardines" exclusively with Sardina pilchardus .  Thus, the persuasiveness of European Communities'
argument will be affected by the extent to which this factual premise is supported by the evidence and
established to be valid.
7.124  Under Codex Stan 94, if a hermetically sealed container contains fish of species
Sardina pilchardus , the product would be labelled "sardines" without any qualification.  A product
containing preserved Sardinops sagax , however, would be labelled "X sardines" with the "X"
                                                     
94 The New Shorter Oxford English Dictionary , supra , p. 2422.
95 Panel Report, Canada — Patent Protection of Pharmaceutical Products (" Canada —
Pharmaceuticals "), WT/DS114/R, adopted 7 April 2000, para. 7.69. Similarly, the panel in US —
Section 110(5) Copyright Act  stated that the term has to be consider ed from a "normative perspective, in the
context of calling for the protection of interests that are justifiable in the light of the objectives that underlie theprotection of exclusive rights".  Panel Report, United States — Section 110(5) of the US Copyright Act  ("US —
Section 110(5) Copyright Act "), WT/DS160/R, adopted 27 July 2000, para. 6.224.WT/DS231/R
Page 83
representing the name of a country, the name of a geographic area, the name of the species or the
common name in accordance with the law and custom of the country in which the product is sold.  If a
hermetically sealed container is labelled simply as "sardines" without any qualification, the
European consumer would know that it contains European sardines.  However, if the product is
labelled, for example, "Pacific sardines", the Euro pean consumer would be informed that the product
does not contain sardines originating from Europe.  We note that preserved sardines from Morocco,
which contains Sardina pilchardus , sold in the European Communities is labelled "Sardines
Marocaines".  Although the product could simply be called "sardines" because it contains
Sardina pilchardus , the label containing the name of a country provides a precise trade description by
informing the European consumers of the provenance of the preserved Sardina pilchardus .
7.125  The European Communities, however, argued that "X sardines" is ineffective or inappropriate
to fulfil the legitimate objectives pursued by the EC Regulation because European consumersassociate the term "sardines" exclusively with Sardina pilchardus  and even if "sardines" is combined
with a qualification, it would sugge st to European consumers that the products are the same but come
from different countries or geographic areas.  As noted above, the argument advanced by the
European Communities in support of its claim that Codex Stan 94 is ineffective or inappropriate is
based on the underlying factual assumption that consumers in most member States of the EuropeanCommunities have always associated the common name "sardines" exclusively with
Sardina pilchardus  and that the use of "sardines" in conjunction with "Pacific", "Peruvian" or
"Sardinops sagax " would therefore  not enable the European consumer to distinguish products made
from Sardinops sagax  as opposed to Sardina pilchardus .  The European Communities summarizes its
argument as follows:
In most parts of the European Communities, especially in the production countries,
the term "sardine" has historically made reference only to the Sardina pilchardus .
96
However, other species like sprats ( Sprattus sprattus ) were sold in tiny quantities on
the European Communities market with the denomination "brisling sardines". In view
of the confusion that this created in the market place, the European Communities hasconstantly tried to clarify the situation, both externally (note of 16/04/73 to Norway
97)
and internally (Regulation 2136/89).
This situation has now created uniform consumer expectations throughout the
European Communities , the term "sardine" referring only to a preserve made from
Sardina pilchardus .98
7.126  Thus, the European Communities asserted, on the one hand, that in most member States the
term "sardines" has historically responded to the particular consumer expectations which in its viewunderlie its Regulation, and acknowledged, on the other hand, that in some member States, it is the
Regulation which "created" those "uniform" consumer expectations.  The European Communities
therefore made a factual distinction between two situations, and we will address these two situations
separately.
7.127  The European Communities acknowledged that it is the Regulation which in certain member
States "created" the consumer expectations which it now considers require the maintenance of that
same Regulation.  Thus, through regulatory intervention, the European Communities consciously
would have "created" consumer expectations which now are claimed to affect the competitive
conditions of imports.  If we were to accept that a WTO Member can "create" consumer expectations
and thereafter find justification for the trade-restrictive measure which created those consumerexpectations, we would be endorsing the permissibility of "self-justifying" regulatory trade barriers.
                                                     
96 (footnote original) See Spanish legislation (Exhibit EC-21) and French legislation (Exhibit EC-22).
97 (footnote original) See Exhibit EC-23.
98 EC's First Submission, paras. 64-65.  Emphasis added.WT/DS231/R
Page 84
Indeed, the danger is that Members, by shaping consumer expectations through regulatory
intervention in the market, would be able to justify thereafter the legitimacy of that very same
regulatory intervention on the basis of the governmentally created consumer expectations.  Mindful of
this concern, we will proceed to examine whether the evidence and legal arguments before us
demonstrate that consumers in most member States of the European Communities have alwaysassociated the common name "sardines" exclusively with Sardina pilchardus  and that the use of
"sardines" in conjunction with "Pacific", "Peruvian" or " Sardinops sagax " would therefore not enable
European consumers to distinguish between products made from Sardinops sagax  and Sardina
pilchardus .
7.128  As indicated above, the European Communities asserted that in most member States the
consumer expectations allegedly underlying the EC Regulation existed before the EC Regulation
introduced an EC-wide regime.  To that effect, the European Communities submitted copies of pre-1989 Spanish and French regulations prescribing the common name "sardines" for products made
from Sardina pilchardus .  The European Communities also submitted copies of the 1981 and 1996
United Kingdom Food Labelling Regulations and a copy of the 2000 German Lebensmittelbuch ,
which the European Communities has described as constituting "only a guideline".  These documents
prescribe the common name "sardines" for Sardina pilchardus , and "Pacific pilchard" or "pilchard"
for Sardinops sagax .  Thus, the European Communities argued that for those four
European Communities' member States, domestic regulations reserving the common name "sardines"
for Sardina pilchardus  is to be considered probative of consumer perceptions at that time and
thereafter.  In other words, governments in those countries would have "codified" consumer
expectations in their domestic regulations.  Although it may be debatable as to whether this willalways be so,
99 we will proceed on the assumption that domestic legislation pre-dating100 the
EC Regulation may indeed have such probative value regarding consumer expectations.
7.129  Concerning the pre-1989 versions of Spanish, French and United Kingdom regulations, we
consider that these do indeed demonstrate that the legislative or regulatory authorities in those
countries considered that the common name "sardines" without any qualification was to be reservedfor products made from Sardina pilchardus , even before the EC Regulation entered into force.
101  We
note, however, that these documents, which concer n three European Communities' member States, are
not probative of the assertion that the use of a qualifying term, such as "Pacific", "Peruvian" or
"Sardinops sagax ", in combination with "sardines" would not enable European consumers to
distinguish products made from Sardinops sagax  as opposed to Sardina pilchardus .
7.130  We also note that in the United Kingdom, which imports 97% of all Peruvian exports of
preserved Sardinops sagax  to the European Communities, the 1981 Food Labelling Regulations also
allowed for the use of the common name "pilchards" for Sardina pilchardus  and prescribed the
                                                     
99 See paragraph 7.127 wherein we express our concern that "Members, by shaping consumer
expectations through regulatory intervention in the market, would be able to justify thereafter the legitimacy ofthat very same regulatory invention on the basis of  the governmentally created  consumer expectation".
100 With respect to the post-1989 regulations in the United Kingdom and Germany, we fail to see how
these documents could be relevant for our assessment, considering the European Communities' confirmationthat its Regulation, which predates both documen ts, "is the law directly applicable" in all
European Communities' member States (EC's Response to Panel Question 42(b)).  Thus, if
European Communities' member States are to comply with the EC Regulation, it would have been surprising tofind member State regulations or guidelines post-1989 which extend the right to use the trade description"sardines" also to products made from Sardinops sagax , as this would be clearly inconsistent with Article 2 of
the EC Regulation.  These documents therefore do not demonstrate that consumers in most member States of theEuropean Communities have always, and in some member States have for at least 13 years, associated the trade
description "sardines" exclusively with Sardina pilchardus .  They are simply consistent with the EC Regulation,
as they can expected to be.
101 We note, however, that the European Communities have not provided any evidence regarding this
assertion for the twelve other European Communities' member States.WT/DS231/R
Page 85
common name "Pacific pilchards" for Sardinops sagax .  Thus, United Kingdom consumers did not
associate Sardina pilchardus  exclusively with the common name "sardines", and were able to
distinguish Sardinops sagax  from Sardina pilchardus  by the simple indication of a geographical
region (i.e., "Pacific").  If the insertion of the geographic area "Pacific" with the word "pilchard" was
used in the United Kingdom to distinguish between Sardina pilchardus  and Sardinops sagax , we fail
to see why the inclusion of the name of a country, name of a geographic area, name of the species or
the common name with the term "sardines" to refer to Sardina sagax  would be ineffective or
inappropriate to fulfil the legitimate objectives pursued by the EC Regulation.
7.131  Contrary to the European Communities' assertion, Peru submitted evidence to demonstrate
that European  consumers do not associate "sardines" exclusively with Sardina pilchardus .  It did so
by demonstrating that the term "sardines" either by itself or combined with the name of a country or
the geographic area, is a common name for Sardinops sagax  in the European Communities. In support
of its assertion that "sardines" by itself or combined with the name of a country or geographic region
is a common name for Sardinops sagax  in the European Communities, Peru referred to the
Multilingual Illustrated Dictionary of Aquatic Animals and Plants , published in close cooperation
with the European Commission and the member States of the European Communities for the purpose
of, inter alia , improving market transparency , which lists the common name of Sardinops sagax  in
nine European languages as "sardines" or the eq uivalent thereof in the national language combined
with the country or geographic area of origin.  Similarly, Peru submitted copies of the electronic
publication, Fish Base , produced with the support of the European Commission, which indicates that
a common name for Sardinops sagax  in Italy, the Netherlands, Germany, France, Sweden and Spain
is "sardines" or its equivalent in the national language combined with the country or geographical areaof origin.  In addition, Peru relied on the Multilingual Dictionary of Fish and Fish Products  prepared
by the Organisation for Economic Cooperation and Development ("OECD") which indicates that a
common name of Sardinops sagax  is "sardines", either by itself or combined with the name of a
country or geographic area.  According to this  Multilingual Dictionary of Fish and Fish Products , one
of the common names in English is "Pacific Sardine", or "Sardine du Pacifique" in French.  Even theEuropean Communities acknowledged that one of the common names for Sardinops sagax  is
"sardines" or its equivalent thereof in the national language combined with the country or
geographical area of origin.
102
7.132  According to the Consumers' Association, "a wi de array of sardines were made available to
European consumers for many decades prior to the imposition of this restrictive Regulation".103
Canada submitted evidence showing that a Canadian company exported Clupea harengus harengus
under the trade description "Canadian sardines" to the Netherlands for thirty years, until 1989.Canada also submitted evidence showing that there have been exports of Clupea harengus harengus
under the trade description "[company name] sardines in hot tabasco" to the United Kingdom for forty
years, until 1989.  We note in this regard that with respect to the objective of promoting fair
competition, the aim of which is to prevent producers of one product from benefitting from the
reputation associated with another product,
104 the underlying premise is that the term "sardines" is
associated only with Sardina pilchardus .  However, as species other than Sardina pilchardus  also
contributed to the reputation of the term "sardines" and in light of the fact that "sardines", either by
itself or combined with the name of a country or a geographic area, is a common name for Sardinops
sagax  in the European Communities, we do not consider that only Sardina pilchardus  developed the
reputation associated with the term "sardines".
7.133  Even if we were to assume that the consum ers in the European Communities associate the
term "sardines" exclusively with Sardina pilchardus , the concern expressed by the
                                                     
102 EC's First Submission, paras. 25 and  27-28.  The European Communities lists one of the common
names for Sardinops sagax  as "sardina" in Spain and "Pacific sardine" in the United Kingdom.
103 Exhibit Peru-16, p. 8.
104 EC's First Submission, paras. 63, 140 and 141.WT/DS231/R
Page 86
European Communities, in our view, was taken into account when Codex Stan 94 was adopted.  By
establishing a precise labelling requirement "in a manner not to mislead the consumer", the
Codex Alimentarius Commission considered the issue of consumer protection in countries producing
preserved sardines from Sardina pilchardus  and those producing preserved sardines from species
other than Sardina pilchardus  by reserving the term "sardines" without any qualification for
Sardina pilchardus  only.  The other species enumerated in Codex Stan 94 are to be labelled as
"X sardines" with the "X" denoting the name of a country, name of a geographic area, name of the
species or the common name in accordance with the law and custom of the country in which the
product is sold.  Thus, Codex Stan 94 allows Members to provide precise trade description of
preserved sardines which promotes market transpar ency so as to protect consumers and promote fair
competition.105
7.134  Negotiating history confirms that Codex Stan 94 takes into account the
European Communities' concern that consumers might be misled if a distinction were not made
between Sardina pilchardus  and other species.  The Report of  Codex Committee on Fish and Fishery
Products on the Seventh Session states:
The traditional canners of this fish [ Sardina pilchardus ] were adamant that no other
species should be allowed to use "sardines" without some form of qualification.  Norwere they disposed to agree to qualifications which in their view could lead to
confusion as to the species … For [countries producing fish of other species] any
distinction was discriminatory and would result in their consumers being misled ….
The Committee agreed upon the need to protect the consumer .
106 (emphasis added)
7.135  At the Twelfth Session of the Codex Al imentarius Commission where the Commission
adopted the draft standard for canned sardines and sardine-type products, a proposal was made to
include Engraulis mordax  and Sardinella longiceps .  In response to this proposal, it is recorded that:
France stated that, in its opinion, the list of species (2.1.2) covered too broad range of
fish which could place the consumer at a disadvantage with regard to making a sound
choice between different products.  It was pointed out that the present standard was agroup standard and that the labelling section contained adequate provisions to
safeguard the consumer.
107
                                                     
105 We note that Article 7(c) of the EC Regulation permits, "by way of derogation from Article 2,
second indent", a can of sardines to be labelled as "sardine mousse", "sardine paste" or "sardine pâté", even ifthe can is comprised of only 25% Sardina pilchardus  and 75% other fish, including those of Sardinops sagax .
In its response to the Panel's question on the matter, the European Communities confirmed that a can containingat least 25% of homogenised Sardina pilchardus  flesh and the remainder containing "the flesh of other fish
which have undergone the same treatment" can be marketed  as "sardine mousse", "sardine paste", or "sardine
pâté" if the content of the flesh of any other fish is less than 25%.  Thus, as long as the 25% ofSardina pilchardus is the predominant weight, the product can be marketed as "sardine mousse",
"sardine paste", or "sardine pâté".  For example, if a mousse is made of 60% fish and 40 % other ingredients, thefish component could, according to Article 7, be comprised of 25% Sardina pilchardus  and 15% each of five
different fish and it would still be a "sardine mousse".  On the other hand, a mousse of which the fish component
represents 49.9% Sardina pilchardus  and 50.1% Sardinops sagax , however, would not.  The European
Communities argues that consumers will nevertheless be protected by the indication of the ingredients on thecan.  However, if the indication of ingredients on the ca n is sufficient to inform consumers that their "sardine"
product in reality contains 25% Sardina pilchardus  and 75% other fish, we fail to see why Codex Stan 94 which
informs consumers that no Sardina pilchardus  is contained by labelling the product "X sardines" is ineffective
or inappropriate to fulfil the legitimate objectives pursued by the EC Regulation.
106 Exhibit Canada-3, Report of the Codex Committee on Fish and Fishery Products, Seventh Session,
2-7 October 1972, ALINORM 74/18, paras. 57 and 59.
107 Exhibit Canada-3, Report of the Twelfth Session of the Joint FAO/WHO Codex Alimentarius
Commission, p. 52.WT/DS231/R
Page 87
7.136  Moreover, a 1969 Synopsis of Governments Replies on the Questionnaire on "Canned
Sardines", prepared by the Codex Committee on Fish and Fishery Products, demonstrates that the
governments of several current European Communities' member States, such as Denmark, Sweden
and the United Kingdom, responded affirmatively to the question "[i]s it accepted that existing
practices whereby sardine-type products are often labelled as sardines but with an appropriatequalifying phrase should be fully taken into account and provided for so long as the consumer is not
deceived?".  These governments considered "that this  way of designating the sardine-type products as
sardines has been in use for about one century in many countries".  France was recorded as stating
that "only the species recognized as sufficiently near to Sardina pilchardus  might be designated as
'sardine' followed or preceded by a qualifying term", adding that "a geographic qualifying term could
be acceptable on the condition that the consumer is not deceived (i.e., Atlantic sardine can mean either
Sardina pilchardus , or another species caught in the Atlantic Ocean)".  Of all current
European Communities' members States, only the Federal Republic of Germany, Portugal and Spain
stated that their domestic legislation did "not accept any designation of 'sardines' even with a
qualifying term for species other than Sardina pilchardus  (Walbaum)".
7.137  In light of our considerations above and based on our review of the available evidence and
legal arguments, we find that it has not been established that consumers in most member States of theEuropean Communities have always associated the common name "sardines" exclusively with
Sardina pilchardus  and that the use of "X sardines" would therefore  not enable the
European consumer to distinguish preserved Sardina pilchardus  from preserved
Sardinops sagax .
108, 109  We also find that Codex Stan 94 allows Members to provide precise trade
description for preserved sardines and thereby promote market transparency so as to protectconsumers and promote fair competition.
7.138  We therefore conclude that it has not been demonstrated that Codex Stan 94 would be an
ineffective or inappropriate means for the fulfilm ent of the legitimate objectives pursued by the
EC Regulation, i.e., consumer protection, market transparency and fair competition.  We conclude
that Peru has adduced sufficient evidence and legal arguments to demonstrate that Codex Stan 94 isnot ineffective or inappropriate to fulfil the legitimate objectives pursued by the EC Regulation.
6. Overall conclusion with respect to  Article 2.4 of the TBT Agreement
7.139  In light of our findings that Codex Stan 94 is a relevant international standard, that it was not
used as a basis for the EC Regulation and that it is  not ineffective or inappropriate to fulfil the
legitimate objectives pursued by the EC Regulation, we find that the EC Regulation is inconsistent
with Article 2.4 of the TBT Agreement.
H. C
ONSIDERATION OF THE EUROPEAN COMMUNITIES ' ARGUMENT THAT PERU BROADENED ITS
CLAIMS
7.140  The European Communities argues that Peru's re formulated request for findings broadens the
claims made by Peru in its first written submission and is therefore inadmissible.  The
European Communities argues that Peru is claiming in its second written submission that the
                                                     
108 In light of our finding that the consumers in the European Communities do not necessarily associate
sardines exclusively with Sardina pilchardus , it is worth noting that the regulation governing tuna and bonito
indicates that Atlantic and Pacific bonito, Atlantic little tuna, Eastern little tuna, black skipjack and other speciesof the genus Euthynnuis  can be labelled "bonito" without any qualification.  If a requirement that is less precise,
especially in respect of the geographic origin, than that set out in Codex Stan 94 can "ensure markettransparency" and "ensure clarity in the trade descriptio n of the products concerned", Codex Stan 94 that allows
a more precise trade description to be used is argu ably effective and appropriate to fulfil the objective of
promoting market transparency, protecting consumers and promoting fair competition.
109 With respect to parties' argument about whether the term "sardines" is generic, we do not consider it
necessary to make a determination on this particular issue.WT/DS231/R
Page 88
European Communities and its member States cannot use a common name of the species
Sardinops sagax  according to the relevant law and custom to designate the preserved product unless it
is accompanied by the word "sardines".
7.141  The European Communities argues that Peru's formulation of its request for findings seeks to
obtain a declaratory judgment that would require the European Communities to take certain specificaction rather than simply remove any inconsistency and, in the European Communities' view, this
request goes beyond the panel's mandate and is inadmissible.  The European Communities argues that
Peru's reformulation of its claim is a consequence of the fact that Peru failed to properly research the
common names of Sardinops sagax  in the European Communities prior to commencing this dispute.
7.142  Concerning the European Communities' argument that Peru broadened its claim, it is
necessary to examine the terms of reference which are set out in document WT/DS231/16:
To examine, in the light of the relevant provisions of the covered agreements cited by
Peru in document WT/DS231/6, the matter referred to the DSB by Peru in that
document, and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.
7.143  Regarding the term "matter", the Appellate Body in Guatemala — Cement I  stated that the
matter consists of the specific measure and the claims relating to it, both of which must be identifiedin the request for the establishment of a panel.
110  In its Request for the Establishment of a Panel, Peru
invoked the EC Regulation as the specific measure at issue and claimed that the EC Regulation is
inconsistent with Articles 2 and 12 of the TBT Agreement and Articles I, III and XI:1 of the
GATT 1994.  In the so-called reformulated request for findings, Peru asked the Panel to find that the
EC Regulation prohibiting the use of the term "sardines" combined with the name of a country oforigin, name of a geographic area, name of the species or the common name of Sardinops sagax  used
in the language of the member State of the European Communities in which the product is sold is
inconsistent with Article 2.4 of the TBT Agreement.  Peru specifically referred to the EC Regulation
and Article 2.4 of the TBT Agreement, both of which are set out in Peru's Request for the
Establishment of a Panel.  Therefore, we do not consider that Peru, even if it broadened the scope ofits request beyond what it originally requested in its first written submission, made any claims that
exceeded the terms of reference.
111
7.144  We are well aware that panels can consider only those claims  that it has the authority to
consider under the terms of reference which sets out our mandate.  In this regard, a distinction must be
made between claims and arguments.112  We note that the Appellate Body stated:
                                                     
110 Appellate Body Report, Guatemala — Anti-Dumping Investigation Regarding Portland Cement
from Mexico ( "Guatemala — Cement I "), WT/DS60/AB/R,  adopted 25 November 1998, DSR 1998:IX,
para. 72.
111 In any event, we note that the findings requested by Peru as set out in the first and second written
submissions are not substantively different.  Peru's second written submission refers to the prohibition to market
the products prepared from Sardinops sagax  under the name "sardines" combined with an indication of the
name of the country of origin, the geographic area, the species and the common name whereas the first written
submission, while similar in all respect, refers to "the prohibition … to market the products … under thecommon name of the species Sardinops sagax  customarily used in the language of the member State of the
European Communities in which the product is sold (such as 'Peruvian sardine' in English, or 'SüdamerikanischeSardine' in German)".  Although the latter does not contain the explicit reference to the term "sardines"combined with the common name, we note that examples cited by Peru uses the term "sardines" with the
putative common name.  Moreover, Peru argued throughout  the proceedings that the term "sardines" has to be
used in combination with the four alternatives set out in Codex Stan 94.
112 The Appellate Body in Korea — Dairy , para. 139, stated that "[b]y 'claim' we mean a claim that the
respondent party has violated, or nullified or impaired the benefits arising from, an identified provision of aWT/DS231/R
Page 89
there is a significant difference between the claims  identified in the request for the
establishment of a panel, which establish the panel's terms of reference under
Article 7 of the DSU, and the arguments  supporting those claims, which are set out
and progressively  clarified in the first written submissions, the rebuttal submissions
and the first and second panel meetings with the parties.113 (emphasis added)
7.145  The request for findings submitted by Peru in its first and second written submissions, in our
view, is a summation of its arguments and do not constitute claims.  And, as arguments, we are not
bound by them.
7.146  For the reasons set out above, we reject the European Communities' argument that Peru's
reformulated request broadens the claim and that Peru's request goes beyond the Panel's mandate.
I. JUDICIAL ECONOMY
7.147  In this dispute, Peru requested us to first examine the consistency of the EC Regulation with
Article 2.4 of the TBT Agreement.  Peru requested that we consider the consistency of the
EC Regulation with Article 2.2 of the TBT Agreement only if we were to find that the EC Regulation
is consistent with Article 2.4 of the TBT Agreement and then examine its claim under Article 2.1 of
the TBT Agreement only if we were to find the EC Regulation is consistent with Article 2.2 of the
TBT Agreement.  In the event that we were to find the EC Regulation consistent with the
TBT Agreement, Peru requested that we examine whether the EC Regulation is consistent with
Article III:4 of the GATT 1994.  The European Communities did not contest Peru's requests.
7.148  We note that our obligation as a panel is set out in Article 11 of the DSU which provides:
a panel should make an objective assessment of the matter before it, including an
objective assessment of the facts of the case and the applicability of and conformitywith the relevant covered agreements, and the make such other findings as will assist
the DSB in making the recommendations or in giving the rulings provided for in the
covered agreements.
7.149  We are mindful that "[n]othing in [Article 11 of the DSU] or in previous GATT practice
requires  a panel to examine all legal claims made by the complaining party"
114 but note that the
principle of judicial economy has to be applied bearing in mind the aim of the dispute settlement
mechanism which is to "secure a positive solution to a dispute".
7.150  Panels in a number of disputes have applied the principle of judicial economy.  We are
mindful that in some instances, the Appellate B ody found that principle was applied incorrectly; in
others, the Appellate Body affirmed the panel’s decision.  As initially developed in US — Wool Shirts
and Blouses , the Appellate Body stated that "a panel need only address those claims which must be
addressed in order to resolve the matter at issue".115  This was further qualified in  Australia —
Salmon  where the Appellate Body stated that:
the principle of judicial economy has to be applied keeping in mind the aim of the
dispute settlement system.  The aim is to resolve the matter at issue and to secure a
positive solution to the dispute.  To provide only a partial resolution of the matter at
issue would be false judicial economy.  A panel has to address those claims on which
                                                                                                                                                                    
particular agreement.  Such a claim of violation  must, as we have already noted, be distinguished from the
arguments  adduced by a complaining party to demonstrate that the responding party's measure does indeed
infringe upon the identified treaty provision" (emphasis original).
113 Appellate Body Report, EC — Bananas III , para. 141.
114 Appellate Body Report, US — Wool Shirts and Blouses , p. 339. Emphasis original.
115 Appellate Body Report, US — Wool Shirts and Blouses , p. 340.WT/DS231/R
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a finding is necessary in order to enable the DSB to make sufficiently precise
recommendations and rulings so as to allow for prompt compliance by a Member
with those recommendations and rulings "in order to ensure effective resolution of
disputes to the benefit of all Members".116
7.151  Therefore, in keeping with the principle of judicial economy, we conclude that it is not
necessary for us to consider other claims and arguments raised by the parties in this dispute.  We
made an objective assessment of whether the EC Regulation is consistent with Article 2.4 of the
TBT Agreement and found that the EC Regulation is not consistent with Article 2.4 of the
TBT Agreement.  This finding, in our view, produces a positive solution to the current dispute and
also enables the DSB to make sufficiently precis e recommendations and rulings without any further
findings under Articles 2.1 and 2.2 of the TBT Agreement and Article III:4 of the GATT 1994.
Although panels are not bound by the complaining party's request which is not contested by theresponding party, we are aided in our view by the complaining party's specific request that we
examine the consistency of the EC Regulation with other legal provisions invoked by Peru only if we
were to find the EC Regulation is consistent with Article 2.4 of the TBT Agreement.
7.152  Accordingly, we exercise judicial economy with respect to Peru's claim under Articles 2.1 and
2.2 of the TBT Agreement and Article III:4 of the GATT 1994.
VIII.  CONCLUSIONS AND RECOMMENDATIONS
8.1 In light of the findings above, we conclude that the EC Regulation is inconsistent with
Article 2.4 of the TBT Agreement.
8.2 Pursuant to Article 3.8 of the DSU which provides that "[i]n cases where there is an
infringement of the obligations assumed under a covered agreement, the action is considered prima
facie  to constitute a case of nullification and impairment", we conclude that the EC Regulation
nullified and impaired the benefits of Peru under the WTO Agreement, in particular under the
TBT Agreement.
8.3 Peru requested that we suggest in accordance with Article 19.1 of the DSU that "the
European Communities permit Peru without any further delay to market its sardines in accordancewith a naming standard consistent with the TBT Ag reement."  We note that Article 19.1 states that the
panel may suggest a way to implement the recommendations of the panel and that the panel is not
required to make such suggestion. As the authority under Article 19.1 is one of discretion, we decline
to make a suggestion. We recommend that the DSB request the European Communities to bring its
measure into conformity with its obligations under the TBT Agreement.
                                                     
116 Appellate Body Report, Australia — Salmon , para. 223.WT/DS231/R
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IX. ANNEXES
A. ANNEX 1: C OUNCIL REGULATION (EEC) 2136/89 OF 21 J UNE 1989 LAYING DOWN COMMON
MARKETING STANDARDS FOR PRESERVED SARDINES
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,Having regard to Council Regulation (EEC) No 3796/81 of 29 December 1981 on the common
organization of the market in fishery products
117, as last amended by Regulation (EEC) No 1495/89118,
and in particular Article 2(3) thereof,
Having regard to the proposal from the Commission,
Whereas Regulation (EEC) No 3796/81 provides for the possibility of adopting common marketing
standards for fishery products in the Community, particularly in order to keep products of
unsatisfactory quality off the market and to facilitate trade relations based on fair competition;
Whereas the adoption of such standards for preserved sardines is likely to improve the profitability of
sardine production in the Community, and the market outlets therefor, and to facilitate disposal of the
products;
Whereas it must be specified in this context, partic ularly in order to ensure market transparency, that
the products concerned must be prepared exclusively with fish of the species " Sardina pilchardus
Walbaum" and must contain a minimum quantity of fish;
Whereas, in order to ensure good market presentation, the criteria for the preparation of the fish prior
to packaging, the presentations in which it may be marketed and the covering media and additional
ingredients which may be used should be laid down; whereas these criteria must not, however, be
such as to preclude the introduction of new products on to the market;
Whereas, to prevent the marketing of unsatisfactory products, certain criteria which preserved
sardines must satisfy in order to be marketed  in the Community for human consumption should be
defined;
Whereas Council Directive 79/112/EEC of 18 December 1978 on the approximation of the laws of the
Member States related to the labelling, presenta tion and advertising of foodstuffs for sale to the
ultimate consumer119 as last amended by Directive 86/197/EEC120 and Council Directive 76/211/EEC
of 20 January 1976 on the approximation of the laws of the Member States relating to making-up byweight or by volume of certain pre-packaged products
121 as last amended by Directive 78/891/EEC122,
specify the particulars required for correct information and protection of the consumer as regards the
contents of packages; whereas, for preserved sardines, the trade description should be determined
according to the culinary preparation proposed, having particular regard to the ratio between the
various ingredients in the finished product; whereas, where the covering medium is oil, the way inwhich the oil must be described should be specified;
                                                     
117 OJ No L 379, 31.12.1981, p. 1.
118 OJ No L 148, 1.6.1989, p. 1.
119 OJ No L 33, 8.2.1979, p. 1.
120 OJ No L 144, 29.5.1986, p. 38.
121 OJ No. L 46, 21.2.1976, p. 1.
122 OJ No L 311, 4.11.1978, p. 21.WT/DS231/R
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Whereas the Commission should have responsibility for the adoption of any technical implementing
measures,
HAS ADOPTED THIS REGULATION:
Article 1
This Regulation defines the standards governing the marketing of preserved sardines in the
Community.
Article 2
Only products meeting the following requirements may be marketed as preserved sardines and under
the trade description referred to in Article 7:
– they must be covered by CN codes 1604 13 10 and ex 1604 20 50;– they must be prepared exclusively from fish of the species " Sardina pilchardus  Walbaum";
– they must be pre-packaged with any appropriate covering medium in a hermetically sealed
container;
– they must be sterilized by appropriate treatment.
Article 3
The sardines must, to the extent required for good market presentation, be appropriately trimmed of
the head, gills, caudal fin and internal organs other than the ova, milt and kidneys, and, according to
the market presentation concerned, backbone and skin.
Article 4
Preserved sardines may be marketed in any of the following presentations:1. sardines: the basic product, fish from which the head, gills, internal organs and caudal fin
have been appropriately removed. The head must be removed by making a cut perpendicular
to the backbone, close to the gills;
2. sardines without bones: as the basic product referred to in point 1, but with the additional
removal of backbone;
3. sardines without skin or bones: as the basic product referred to in point 1, but with the
additional removal of the backbone and skin;
4. sardine fillets: portions of flesh obtained by cuts parallel to the backbone, along the entire
length of the fish, or a part thereof, after removal of the backbone, fins and edge of the
stomach lining. Fillets may be presented with or without skin;
5. sardine trunks: sardine portions adjacent to the head, measuring at least 3 cm in length,
obtained from the basic product referred to in point 1 by making transverse cuts across the
backbone;WT/DS231/R
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6. any other form of presentation, on condition that it is clearly distinguished from the
presentations defined in points 1 to 5.
Article 5
For the purposes of the trade description laid down in Article 7, a distinction shall be drawn between
the following covering media, with or without the addition of other ingredients:
1. olive oil;2. other refined vegetable oils, including olive-residue oil used singly or in mixtures;
3. tomato sauce;
4. natural juice (liquid exuding from the fish during cooking), saline solution or water;5. marinade, with or without wine;6. any other covering medium, on condition that it is clearly distinguished from the other
covering media defined in points 1 to 5.
These covering media may be mixed, but olive oil may not be mixed with other oils.
Article 6
1. After sterilization, the products in the contai ner must satisfy the following minimum criteria:
(a) for the presentations defined in points 1 to 5 of Article 4, the sardines or parts of
sardine must:
– be reasonably uniform in size and arranged in an orderly manner in the
container,
– be readily separable from each other,– present no significant breaks in the abdominal wall,– present no breaks or tears in the flesh,
– present no yellowing of tissues, with the exception of slight traces,
– comprise flesh of normal consistency.  The flesh must not be excessively
fibrous, soft or spongy,
– comprise flesh of a light or pinkish colour, with no reddening round the
backbone, with the exception of slight traces;
(b) the covering medium must have the colour and consistency characteristic of its
description and the ingredients used. In the case of an oil medium, the oil may notcontain aqueous exudate in excess of 8 % of net weight;
(c) the product must retain the odour and flavour characteristics of the species " Sardina
pilchardus  Walbaum" and the type of covering medium, and must be free of any
disagreeable odour or taste, in particular bitterness, or taste of oxidation or rancidity;WT/DS231/R
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(d) the product must be free of any foreign bodies;
(e) in the case of products with bones, the backbone must be readily separable from the
flesh and friable;
(f) products without skin and without bones must present no significant residues thereof.
2. The container may not present external oxidation or deformation affecting good commercial
presentation.
Article 7
Without prejudice to Directives 79/112/EEC and 76/211/EEC, the trade description on the pre-
packaging of preserved sardines must correspond to the ratio between the weight of sardines in the
container after sterilization and the net weight, both expressed in grams.
(a) For the presentations defined in points 1 to 5 of Article 4, the ratio shall be not less than the
following values:
– 70 % for the covering media listed in points 1, 2, 4 and 5 of Article 5,
– 65 % for the covering medium described in point 3 of Article 5;– 50 % for the covering media referred to in point 6 of Article 5.
Where these values are complied with, the trade description must correspond to the
presentation of the sardine on the basis of the corresponding designation referred to in
Article 4. The designation of the covering medium must form an integral part of the tradedescription.
In the case of products in oil, the covering medium must be designated by one of the
following expressions:
– "in olive oil", where that oil is used,
or
– "in vegetable oil", where other refined vegetable oils, including olive-residue oil, or
mixtures thereof are used,
or
– "in . . . oil", indicating the specific nature of the oil.
(b) For the presentations referred to in point 6 of Article 4, the ratio referred to in the first
subparagraph must be at least 35 %.
(c) In the case of culinary preparations other than those defined in (a), the trade description must
indicate the specific nature of the culinary preparation.
By way of derogation from Article 2, second indent at point (b) of this Article, preparations
using homogenized sardine flesh, involving the disappearance of its muscular structure, may
contain the flesh of other fish which have undergone the same treatment provided that the
proportion of sardines is at least 25 %.
(d) The trade description, as defined in this Article, shall be reserved for the products referred to
in Article 2.WT/DS231/R
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Article 8
Where necessary, the Commission shall adopt, in accordance with the procedure laid down in
Article 33 of Regulation (EEC) No 3796/81, the measures necessary to apply this Regulation, in
particular the sampling plan for assessing conform ity of manufacturing batches with the requirements
of this Regulation.
Article 9
This Regulation shall enter into force on the third day following its publication in the Official Journal
of the European Communities .
It shall apply as from 1 January 1990.
This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Luxembourg, 21 June 1989.
For the Council
The President
C. ROMERO HERRERA
B. A
NNEX 2: T HE CODEX ALIMENTARIUS COMMISSION STANDARD FOR CANNED SARDINES AND
SARDINE -TYPE PRODUCTS (CODEX STAN 94 –1981 REV.1 – 1995)
1. SCOPE
This standard applies to canned sardines and sardine-type products packed in water or oil or
other suitable packing medium.  It does not apply to speciality products where fish content constitute
less than 50% m/m of the net contents of the can.
2. DESCRIPTION2.1 PRODUCT DEFINITION2.1.1 Canned sardines or sardine-type products are prepared from fresh or frozen fish of the
following species:
– Sardina pilchardus
– Sardinops melanostictus, S. neopilchardus, S. ocellatus, S. sagax S. caeruleus
– Sardinella aurita, S. brasiliensis, S. maderensis, S. longiceps, S. gibbosa
– Clupea harengus
– Sprattus sprattus
– Hyperlophus vittatus– Nematalosa vlaminghi
– Etrumeus teres
– Ethmidium maculatum
– Engraulis anchoita, E. mordax, E. ringens
– Opisthonema oglinumWT/DS231/R
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2.1.2 Head and gills shall be completely removed;  scales and/or tail may be removed.  The fish
may be eviscerated.  If eviscerated, it shall be practically free from visceral parts other than roe, milt
or kidney.  If ungutted, it shall be practically free from undigested feed or used feed.
2.2 PROCESS DEFINITION
The products are packed in hermetically sealed containers and shall have received a
processing treatment sufficient to ensure commercial sterility.
2.3 PRESENTATION
Any presentation of the product shall be permitted provided that it:(i) contains at least two fish in each can;  and(ii) meets all requirements of this standard;  and
(iii) is adequately described on the label to avoid confusing or misleading the consumer;
(iv) contain only one fish species.
3. ESSENTIAL COMPOSITION AND QUALITY FACTORS3.1 RAW MATERIAL
The products shall be prepared from sound fish of the species listed under sub-section 2.1
which are of a quality fit to be sold fresh for human consumption.
3.2 OTHER INGREDIENTS
The packing medium and all other ingredients used shall be of food grade quality and
conform to all applicable Codex standards.
3.3 DECOMPOSITION
The products shall not contain more than 10 mg/100g of histamine based on the average of
the sample unit tested.
3.4 FINAL PRODUCT
Products shall meet the requirements of this St andard when lots examined in accordance with
Section 9 comply with provisions set out in Se ction 8.  Product shall be examined by the methods
given in Section 7.WT/DS231/R
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4. FOOD ADDITIVES
Only the use of the following additives is permitted.
Additive Maximum Level in
the Final Product
Thickening or Gelling Agents
(for use in packing media only)
400 Alginic acid
401 Sodium alginate
402 Potassium alginate
404 Calcium alginate
406 Agar
407 Carrageenan and its Na, K, and NH 4 salts
(including furcelleran)
407 Processed Eucheuma  Seaweed (PES)
410 Carob bean gum
412 Guar gum
413 Tragacanth gum
415 Xanthan gum
440 Pectins
466 Sodium carboxymethylcelluloseGMP
Modified Starches
1401 Acid treated starches (including white and
yellow dextrins)
1402 Alkaline treated starches
1404 Oxidized starches
1410 Monostarch phosphate
1412 Distarch phosphate, esterified
1414 Acetylated distarch phosphate
1413 Phosphated distarch phosphate
1420/1421 Starch acetate
1422 Acetylated distarch adipate
1440 Hydroxypropyl starch
1442 Hydroxypropyl starch phosphateGMP
Acidity Regulators
260 Acetic acid
270 Lactic acid (L-, D-. and DL-)
330 Citric acidGMP
Natural Flavours
Spice oils
Spice extracts
Smoke flavours (natural smoke solutions and extracts)GMP
5. HYGIENE AND HANDLING
5.1 The final product shall be free from any foreign material that poses a threat to human health.5.2 When tested by appropriate methods of sampling and examination as prescribed by the
Codex Alimentarius Commission, the product:WT/DS231/R
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(i) shall be free from micro-organisms capable of development under normal conditions
of storage;
(ii) no sample unit shall contain histamine that exceeds 20 mg per 100 g;
(iii) shall not contain any other substance including substances derived from
microorganisms in amounts which may represent a hazard to health in accordance
with standards established by the Codex Alimentarius Commission;
(iv) shall be free from container integrity defects which may compromise the hermetic
seal.
5.3 It is recommended that the product covered by the provisions of this standard be prepared and
handled in accordance with the appropriate sections of the Recommended International Code of
Practice – General Principles of Food Hygiene (CAC/RCP 1-1969, Rev. 3-1997) and the following
relevant Codes:
(i) the Recommended International Code of Practice for Canned Fish
(CAC/RCP 10-1976);
(ii) the Recommended International Code of Hygienic Practice for Low-Acid and
Acidified Low-Acid Canned  Foods (CAC/RCP 23-1979);
6. LABELLING
In addition to the provisions of the Codex General Standard for the Labelling of Prepackaged
Foods (CODEX STAN 1-1985, Rev. 3-1999) the following special provisions apply:
6.1 NAME OF THE FOOD
The name of the product shall be:
6.1.1 (i) "Sardines" (to be reserved exclusively for Sardina pilchardus  (Walbaum));  or
(ii) "X sardines" of a country, a geographic area, the species, or the common name of the
species in accordance with the law and custom of the country in which the product is
sold, and in a manner not to mislead the consumer.
6.1.2 The name of the packing medium shall form part of the name of the food.6.1.3 If the fish has been smoked or smoke flavoured, this information shall appear on the label in
close proximity to the name.
6.1.4 In addition, the label shall include other descriptive terms that will avoid misleading or
confusing the consumer.
7. SAMPLING, EXAMINATION AND ANALYSES7.1 SAMPLING
(i) Sampling of lots for examination of the final product as prescribed in Section 3.3
shall be in accordance with the FAO/WHO Codex Alimentarius Sampling Plans for
Prepackaged Foods (AQL-6.5)  (Ref. CAC/RM 42-1977);WT/DS231/R
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(ii) Sampling of lots for examination of net weight and drained weight where appropriate
shall be carried out in accordance with an appropriate sampling plan meeting the
criteria established by the CAC.
7.2 SENSORIC AND PHYSICAL EXAMINATION
Samples taken for sensoric and physical examination shall be assessed by persons trained in
such examination and in accordance with Annex A and the Guidelines for the Sensory Evaluation of
Fish and Shellfish in Laboratories  (CAC/GL 31-1999).
7.3 DETERMINATION OF NET WEIGHT
Net contents of all sample units shall be determined by the following procedure:
(i) Weigh the unopened container.(ii) Open the container and remove the contents.(iii) Weigh the empty container, (including the end) after removing excess liquid and
adhering meat.
(iv) Subtract the weight of the empty container from the weight of the unopened
container.  The resultant figure will be the net content.
7.4 DETERMINATION OF DRAINED WEIGHT
The drained weight of all sample units shall be determined by the following procedure:(i) Maintain the container at a temperature between 20
°C and 30°C for a minimum of
12 hours prior to examination.
(ii) Open and tilt the container to distribute the contents on a pre-weighed circular sieve
which consists of wire mesh with square openings of 2.8 mm x 2.8 mm.
(iii) Incline the sieve at an angle of approximately 17-20° and allow the fish to drain for
two minutes, measured from the time the product is poured into the sieve.
(iv) Weigh the sieve containing the drained fish.
(v) The weight of drained fish is obtained by subtracting the weight of the sieve from the
weight of the sieve and drained product.
7.5 PROCEDURES FOR PACKS IN SAUCES (WASHED DRAINED WEIGHT)
(i) Maintain the container at a temperature between 20°C and 30°C for a minimum of
12 hours prior to examination.
(ii) Open and tilt the container and wash the covering sauce and then the full contents
with hot tap water (approx. 40°C), using a wash bottle (e.g., plastic) on the tared
circular sieve.
(iii) Wash the contents of the sieve with hot water until free of adhering sauce;  where
necessary separate optional ingredients (spices, vegetables, fruits) with pincers.WT/DS231/R
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Incline the sieve at an angle of approximately 17-20° and allow the fish to drain two
minutes, measured from the time the washing procedure has finished.
(iv) Remove adhering water from the bottom of the sieve by use of paper towel.  Weigh
the sieve containing the washed drained fish.
(v) The washed drained weight is obtained by  subtracting the weight of the sieve from
the weight of the sieve and drained product.
7.6 DETERMINATION OF HISTAMINE
AOAC 977.13 (15th Edition, 1990)
8. DEFINITION OF DEFECTIVES
A sample unit will be considered defective when it exhibits any of the properties defined
below.
8.1 FOREIGN MATTER
The presence in the sample unit of any matter, which has not been derived from the fish or the
packing media, does not pose a threat to human health, and is readily recognized withoutmagnification or is present at a level determined by any method including magnification that indicates
non-compliance with good manufacturing and sanitation practices.
8.2 ODOUR/FLAVOUR
A sample unit affected by persistent and distinct objectionable odours or flavours indicative
of decomposition or rancidity.
8.3 TEXTURE
(i) Excessively mushy flesh uncharacteristic of the species in the presentation.
(ii) Excessively tough or fibrous flesh uncharacteristic of the species in the presentation.
8.4 DISCOLOURATION
A sample unit affected by distinct discolouration indicative of decomposition or rancidity or
by sulphide staining of more than 5% of the fish by weight in the sample unit.
8.5 OBJECTIONABLE MATTER
A sample unit affected by Struvite crystals – any struvite crystal greater than 5 mm in length.
9. LOT ACCEPTANCE
A lot will be considered as meeting the requirements of this standard when:
(i) the total number of defectives as classified according to Section 8 does not exceed the
acceptance number (c) of the appropriate sampling plan in the Sampling Plans for
Prepackaged Foods (AQL-6.5) (CAC/RM 42-1977);WT/DS231/R
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(ii) the total number of sample units not meeting the presentation defined in 2.3 does not
exceed the acceptance number (c) of the appropriate sampling plan in the Sampling
Plans for Prepackaged Foods (AQL-6.5) (CAC/RM 42-1977);
(iii) the average net weight or the average drained weight where appropriate of all sample
units examined is not less than the declared weight, and provided there is no
unreasonable shortage in any individual container;
(iv) the Food Additives, Hygiene and Labelling requirements of Sections 3.3, 4.5.1, 5.2
and 6 are met.
__________