WORLD TRADE WT/DS26/15
WT/DS48/13
ORGANIZATION 29May1998
(98-2227)
ECMEASURES CONCERNING MEAT AND MEAT PRODUCTS
(HORMONES)
Arbitration
under Article 21.3(c) ofthe
Understanding onRules andProcedures
Governing theSettlement ofDisputes
Award oftheArbitrator
Julio Lacarte-MuróWT/DS26/15
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I. Introduction
1. On13February 1998, theDispute Settlement Body (the"DSB") adopted theAppellate Body
Report1andthePanel Reports2,asmodified bytheAppellate Body Report, inECMeasures Concerning
Meat andMeat Products (Hormones) .3On13March 1998, theEuropean Communities informed the
DSB, pursuant toArticle 21.3oftheUnderstanding onRules andProcedures Governing theSettlement
ofDisputes (the"DSU"), thatitintended tofulfil itsobligations under theMarrakesh Agreement
Establishing theWorld Trade Organization4(the"WTO Agreement ")inrespect ofthismatter, andthat
ithadinitiated theprocess toexamine theoptions forcompliance withaviewtoimplementation in
asshort aperiod oftimeaspossible, andthatitwould require areasonable period oftimeforthis
process.5
2. On26March 1998, consultations wereheldbetween theEuropean Communities andtheUnited
States andCanada inorder toreach agreement ona"reasonable period oftime" fortheimplementation
oftherecommendations andrulings oftheDSBadopted on13February 1998. These consultations,
andfurther written communications between theparties, didnotleadtoanagreement. Therefore,
theEuropean Communities requested, on8April 1998, thatthe"reasonable period oftime" be
determined bybinding arbitration pursuant toArticle 21.3(c) oftheDSU.6
3. Intheabsence ofanagreement between theparties ontheappointment ofanarbitrator within
10daysafterreferring thematter toarbitration, theEuropean Communities requested, inaletter dated
18April 1998 andreceived on20April 1998, andtheUnited States andCanada requested, on
20April1998,theDirector-GeneraloftheWorldTradeOrganization("WTO")toappointthearbitrator,
asprovided forinfootnote 12toArticle 21.3(c) oftheDSU. After consultations withtheparties,
theDirector-General decided, on30April 1998, toappoint H.E. Mr.Celso Lafer andmyself asthe
1WT/DS26/AB/R, WT/DS48/AB/R.
2Complaint bytheUnited States, WT/DS26/R ("US Panel Report"); Complaint byCanada, WT/DS48/R ("Canada Panel
Report").
3Asnoted atparagraphs 2-5oftheAppellate Body Report, the"measures" atissue inthisdispute were Council
Directive 81/602/EEC of31July1981, Council Directive 88/146/EEC of7March 1988 andCouncil Directive 88/299/EEC
of17May1988, which were codified andreplaced byCouncil Directive 96/22/EC of29April 1996 ("Directive 96/22"),
which came intoeffect on1July1997, Official Journal, No.L125, 23May 1996, p.3.
4Done atMarrakesh, Morocco, 15April 1994.
5WT/DSB/M/43, 8April 1998, p.8.
6WT/DS26/14, WT/DS48/12, G/L/235, 16April 1998.WT/DS26/15
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arbitrators inthismatter. Subsequently, Ambassador Lafer informed theDirector-General thathewas
unable toaccept thenomination. TheDirector-General informed theparties on7May1998that,given
theverystrict timeframe within which thisarbitration must beconducted, hebelieved thatthebest
course ofaction wastocontinue thisarbitration withmeacting asthesolearbitrator.
4. Written submissions were received from theEuropean Communities, theUnited States and
Canada on6May1998, andanoralhearing washeldon12May1998.
II. Arguments oftheParties
A. European Communities
5. TheEuropean Communities concluded initswritten submission thatthe"reasonable period
oftime" forimplementation oftherecommendations andrulings oftheDSBinthiscaseshould be
approximately fouryears, comprising twoyears forariskassessment andapproximately twoyears
foranylegislative action which maybenecessary inthelightoftheresults oftheriskassessment.
Later, intheoralhearing, theEuropean Communities stated thatthe"reasonable period oftime" could
bereduced to,intotal, 39months: twoyears forariskassessment and15months foranynecessary
legislative action thereafter.
6. IntheviewoftheEuropean Communities, theperiod oftimethatisnecessary toimplement
theDSBrecommendations andrulings inthiscasecannot beshorter thanwhatisreasonably required
bysound science torespond tothefindings intheAppellate Body Report thattheECmeasures banning
imports ofmeatandmeatproducts derived fromcattle administered withcertain hormones forgrowth
promotion purposes areinconsistent withArticles 5.1and3.3oftheAgreement ontheApplication
ofSanitary andPhytosanitary Measures (the"SPS Agreement ").Theintention oftheEuropean
Communitiesistotakeactioncomposedoftwoelements:first,toconducthormone-specificandresidue-
specific riskassessments forallthehormones, asclarified bytheAppellate Body, including anevaluation
oftherisksposed tohuman health from failure toobserve good veterinary practice; andsecond, toWT/DS26/15
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review themeasure atissue inthelightoftheresults ofthatriskassessment andpropose toabolish,
amend ormaintain it,asappropriate.7
7. TheEuropean Communities asserts thattheperiod oftimetocomplete thefirst"preparatory"
phase, consisting ofthevarious scientific studies, cannot beshorter thantwoyears. With respect to
thesecond or"conclusive" phase, theEuropean Communities argues thatasufficient period oftime
should bemade available toitinorder toallow forthenecessary legislative measures tobetaken.
While theEuropean Communities stated initswritten submission thatthissecond phase would require
approximately twoyears, theEuropean Communities stated intheoralhearing thatitwould need
15months toconclude thisphase.
8. TheEuropean Communities asserts thatwhile Article 21.3oftheDSU imposes anobligation
ontheMember concerned toinform theDSB ofitsintentions regarding implementation, what is
specifically required bytheobligation to"implement" isnotspelled outeither inthisprovision or
elsewhere intheDSU. Under theDSU, therequired actofimplementation istheremoval ofthe
inconsistency found bytheDSBtoexistbetween ameasure andacovered agreement. Animplementing
Member hasoptions concerning theprecise means ofimplementation. Inthepresent case, "[t]here
isnorecommendation orruling oftheAppellate Body about howtheECmustbring itsmeasures into
conformity."8Therefore, theinconsistency canbeeliminated "either byabolishing themeasure or
byproviding thehormone-specific andresidue-specific riskassessments thattheAppellate Body held
toberequired under Article 5.1oftheSPSAgreement."9TheEuropean Communities asserts that:
...theAppellate Body didnotfindthattheEC’simport prohibition
persewasinconsistent withtheSPSAgreement, butonlythattheEC
hadviolateditsobligationsundertheSPSAgreementbynotconducting
aproper riskassessment within themeaning ofArticle 5.1asthebasis
fortheimport prohibition. TheECisentitled, therefore, tobring its
measure intoconformity withtheSPSAgreement bybasing itona
properlyspecificriskassessment,asthisconcepthasnowbeenclarified
forthefirsttimebytheAppellate Body.10
7Written submission oftheEuropean Communities, para. 74.
8Written submission oftheEuropean Communities, para. 24.
9Ibid.
10Written submission oftheEuropean Communities, para. 64.WT/DS26/15
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Referring tothefinding oftheAppellate Body atparagraph 129oftheAppellate Body Report that
thephrase "asappropriate tothecircumstances" inArticle 5.1"makes clear thattheMembers have
acertain degree offlexibility inmeeting therequirements ofArticle 5.1", theEuropean Communities
asserts that"theflexibility towhich Members areentitled" under Article 5.1"would bewrongfully
abrogated ifthisarbitration doesnotallow theECareasonable period oftimeinwhich toperform
thehormone-specific andresidue-specific riskassessment which theAppellate Body forthefirsttime
inthiscaseheldisrequired."11
9. AccordingtotheEuropeanCommunities,therecommendationinparagraph255oftheAppellate
Body Report mustbereadinthecontext ofthereasoning intheAppellate Body Report, and"[a]careful
examination oftheAppellate Body'sfindings inparagraphs 198-201 and206-208 leadstotheconclusion
thattheessence oftheAppellate Body'sendorsement ofthePanel'sfinding ofinconsistency with
Article 5.1wastheabsence ofasuitably specific riskassessment. Inother words, theAppellate Body's
findings andconclusions inrespect ofthismatter restontheproposition thatnoriskassessment sufficient
forthepurpose hadbeenundertaken orpresented tothePanel."12
10. TheEuropean Communities contends thatthestatement inArticle 21.3oftheDSU thatthe
reasonable period oftime"may beshorter orlonger [than 15months], depending upontheparticular
circumstances" mandates acase-by-case approach inthedetermination ofthereasonable period. The
"type andtechnical complexity ofthemeasure which therespondent Member isrequired todraft, adopt
andimplement within theminimum period oftimecanconstitute ‘particular circumstances ’."13In
thepresent case, "these ‘particular circumstances ’comprise themethods ofimplementation available
totheECunder theSPSAgreement andtheperiod oftimerequired toaccomplish them."14The
European Communities maintains that"[s]ince there isaneed...toconduct ahormone-specific and
residue-specificriskassessmentinordertoimplementtheDSBrecommendationsandrulings,thequestion
ofwhatconstitutes a‘reasonable period ’depends upon thetimeitnormally takes scientists intheEC
(andaround theworld) toconduct thistypeofriskassessment andtoreview theinconsistent measure
inthelightoftheresults ofthatriskassessment."15
11Written submission oftheEuropean Communities, para. 52.
12Written submission oftheEuropean Communities, para. 56.
13Written submission oftheEuropean Communities, para. 71.
14Ibid.
15Ibid.WT/DS26/15
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11. With respect tothefirstphase ofitsproposed implementation oftheDSBrecommendations
andrulings, theEuropean Communities states thatitintends tocarry outaseries ofresearch projects
that,itconsiders, constitute "theriskassessment specified bytheAppellate Body report."16Inview
ofthetypeandnature oftheexperiments involved, some ofthese projects, suchasthose testing the
carcinogenicity andgenotoxicity ofresidues inmeatoftheparent compounds andtheirmetabolites,
cannot becompleted inlessthantwoyears from thetimetheyarecommenced. Thistimeperiod of
twoyearsisincompressible.TheEuropeanCommunitiesstatesthatinordertoidentifymissingscientific
information, avoid duplication ofscientific work andreduce asfaraspossible thetimenecessary to
complete theriskassessment, theECCommission requested inwriting, on8April 1998, relevant
information from theUnited States, Canada, Australia andNewZealand. Italsointends tosenda
similar request forinformation totheCodex Alimentarius Commission.
12. Withrespect towhatitterms the"second" or"conclusive" phase ofitsproposed implementation
process, theEuropean Communities asserts thatitcannot takedefinitive legislative measures before
theresults oftheriskassessment become available, asitcannot prejudge theoutcome oftherisk
assessment.17Nevertheless, theEuropean Communities states thattheECCommission hasalready
initiated theprocess ofexploring thevarious legislative options thatwould beavailable andtherelevant
decision-making procedures, andthatthisprocess willcontinue astheriskassessment progresses.
According totheEuropean Communities, theaimistoprepare theground aswellaspossible sothat,
when thedefinitive results oftheriskassessment become available, theproposal oftheECCommission
totheother ECinstitutions canbepresented within theshortest period oftimepossible.
13. TheEuropean Communities maintained initswritten submission thatiftheresults oftherisk
assessment indicate theneedtotakelegislative action, thelegislative process fortheimplementation
oftheDSBrecommendations andrulings inthiscasecould becompleted within approximately two
years. Intheoralhearing, theEuropean Communities stated thatitwould need15months forthe
legislative process. TheEuropean Communities disagrees withtheUnited States andCanada concerning
theappropriate legislative basis --and,consequently, concerning thelegislative process thatmustbe
followed within theEuropean Communities --foranymeasure abolishing oramending thecurrent
measure banning imports ofmeat andmeat products derived from cattle administered withcertain
16Written submission oftheEuropean Communities, para. 79.
17Written submission oftheEuropean Communities, para. 101.WT/DS26/15
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hormones forgrowth promotion purposes. According totheEuropean Communities, evenifDirective
96/22 wasbased onArticle 43oftheTreaty Establishing theEuropean Community18(the"ECTreaty ")
andwasadopted pursuant totheconsultation procedure, thisisnolonger thecorrect legalsituation
intheEuropean Communities.19Astheprincipal objective ofthemeasure inquestion istoprotect
human health, anacttoabolish oramend Directive 96/22 willrequire aDirective oftheCouncil and
theEuropean Parliament based onArticle 100aoftheECTreaty .Anyactbased onArticle 100amust
beadopted inaccordance withtheco-decision procedure provided forinArticle 189boftheECTreaty .20
14. Inanycase, theEuropean Communities claims thatthedebate ontheappropriate legalbasis
foranacttoabolish oramend Directive 96/22 willbecome irrelevant aftertheentry intoforce ofthe
Treaty ofAmsterdam on1January 1999. Thattreaty modifies Article 129oftheexisting ECTreaty
byexplicitly requiring inArticle 152(4)(b) that"measures intheveterinary andphytosanitary fields
which haveastheirdirect objective theprotection ofpublic health" must beadopted onthebasis of
theco-decision procedure. TheEuropean Communities stated thatupon theadoption oftheTreaty
ofAmsterdam ,anypending legislation would havetobewithdrawn andanewlegislative process would
havetobecommenced.
B. United States
15. TheUnited States argues thatthe"reasonable period oftime" forimplementation oftheDSB
recommendations andrulings inthiscaseis10months, i.e.,by1January 1999. Themostrelevant
factors affecting thedecision onthelength ofthereasonable period oftimeforimplementation are:
(i)thelegalformofimplementation necessary (e.g., legislation, regulations, decree, etc.); (ii)thenature
ofthelegislative orregulatory changes tobemade; and(iii)theperiod oftimeinwhich theimplementing
18Done atRome, 25March1957, asamended. BeforetheentryintoforceoftheTreatyonEuropeanUnionon1November
1993, thisTreaty wasreferred toastheTreaty Establishing theEuropean Economic Community (the"EEC Treaty ").
19TheEuropean Communities refers forthisproposition toacasepending before theEuropean Court ofJustice, Case
C-269/97, Commission v.Council ,thepleadings ofwhich aresummarized inOfficial Journal No.C295, 27September
1997, p.17.
20Written submission oftheEuropean Communities, para. 106.TheSingle European Act,effective 1July1987, amended
theEECTreaty byadding Article 100a, which required theuseofthecooperation procedure. TheTreaty onEuropean Union ,
which entered intoforce on1November 1993 (thereafter, theEECTreaty wasknown astheECTreaty ),amended Article
100a andadded Article 189b. Together, these provisions require theuseoftheco-decision procedure forlegislation aimed
attheprotection ofhuman health.WT/DS26/15
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Member canachieve theproposed legalform ofimplementation, assuming thattheMember applies
itself ingood faith. Based onthese criteria, animplementation period of10months is"reasonable"
inthisinstance inlightoftheaction thatisrequired oftheEuropean Communities tocomply with
theDSB recommendations andrulings, i.e.,removal oftheimport ban,andthenature ofthe
regulatory/legislative process applicable toissues involving agriculture, suchastheimport banin
question, under thecurrent lawoftheEuropean Communities.
16. IntheviewoftheUnited States, theburden restsontheimplementing Member tojustify the
period oftimenecessary forimplementation ofDSBrecommendations andrulings. Theburden of
demonstrating thatacertain period oftimeis"reasonable" becomes heavier when thatperiod exceeds
the15-month guideline setoutinArticle 21.3(c) oftheDSU. IftheEuropean Communities believes
thatimmediate implementation isimpracticable, itmust demonstrate whythisissoandmust also
substantiate itsrequest foraparticular period oftimewithin which toimplement.
17. According totheUnited States, theperiod oftimeproposed bytheEuropean Communities
forimplementation isunreasonable andisbased ontwofalsepremises. First, while theEuropean
Communities isfreetoconduct ariskassessment, suchariskassessment isirrelevant toimplementation
oftheDSB’srecommendations andrulings andcannot beusedtodelay the"reasonable period oftime"
forcompliance. TheDSBrecommendations andrulings donotrequire another riskassessment. The
DSBhasruled thattheEuropean Communities hasnohuman health basis foritsban. Asaresult,
thebanisnotjustified under theSPSAgreement .Withdrawal ofthemeasures thatwerefound tobe
inconsistent withtheobligations oftheEuropean Communities under Articles 3.3and5.1oftheSPS
Agreement istheonlyaction consistent withthefindings ofthePanel andAppellate Body andtheDSB
recommendations andrulings inthiscase. Theimport baninquestion hasalready beeninplace for
nineyears, andthedispute settlement proceedings inthiscasehavealready taken twoyears. During
thistime, benefits accruing totheUnited States under theWTO Agreement havebeendenied. The
United States should nothavetowaitforafurther period oftwoyears before theEuropean Communities
even begins thenecessary legislative process tobring itsmeasure intoconformity with the
SPSAgreement .21
21Statements oftheUnited States attheoralhearing.WT/DS26/15
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18. Second, theUnited States submits thatthelegislative procedures necessary torepeal theimport
baninquestion canbeaccomplished within lessthan10months. Theregulation ofhormones used
intheproduction ofanimals isanagricultural matter subject toArticle 43oftheECTreaty22,which
provides thatlegislation pertaining tothecommon market inagriculture shallbetaken pursuant tothe
consultation procedure. Directive 96/22 wasbased onArticle 43oftheECTreaty andthe
European Communities isnotnowlegally required tobasealegislative measure onArticle 100aof
theECTreaty andtousetheco-decision procedure provided forinArticle 189b oftheECTreaty in
order toremove theimport ban.TheTreaty ofAmsterdam ,containing themodified Article 129"that
would allow theEuropean Union toadopt legislation intheareas ofhealth andconsumer protection
withthefullparticipation oftheParliament, i.e.,pursuant toco-decision"23,hasnotyetentered into
effect. Theconsultation procedure is,therefore, applicable toanylegislative measure implementing
therecommendations andrulings oftheDSBinthiscase. Thisprocedure maybecompleted within
fiveorsixmonths. Even iftheco-decision procedure were necessary inorder toliftthehormone
ban,itcanbecompleted inlessthan15months.
C. Canada
19. Canada submits thatthe"reasonable period oftime" forimplementation oftherecommendations
andrulings inthiscaseshould benomore than10months. Given thattheEuropean Communities
isunder anobligation toimplement therecommendations andrulings oftheDSBinthiscase, Canada
argues thattheonuslieswiththeEuropean Communities todemonstrate thattheperiod itrequests
constitutes a"reasonable period oftime". Canada submits thattheproposed period ismanifestly
unreasonable, andthatthere areno"particular circumstances" thatwould justify suchatimeperiod
under Article 21.3(c) oftheDSU.
20. InCanada ’sview, the"reasonable period oftime" doesnotinclude timefortheEuropean
Communities toconduct ariskassessment. Rather, the"reasonable period oftime" isprovided to
allow theEuropean Communities totakethenecessary legislative steps toremove itsinconsistent
22TheUnited States refers toCase 68/86, United Kingdom v.Council ,[1988] E.C.R 855. TheUnited States alsorefers
toOpinion 1/94oftheEuropean Court ofJustice fortheproposition thattheimplementation bytheEuropean Communities
ofthecommitments intheSPSAgreement "willrequire measures tobeadopted onthebasis ofArticle 43ofthe[EC] Treaty."
Opinion 1/94, [1994] E.C.R. I-5271.
23Written submission oftheUnited States, para. 45.WT/DS26/15
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measures. Inthepresent case,theimpugned measures oftheEuropean Communities havebeenfound
inconsistent withtheobligations oftheEuropean Communities under theSPSAgreement .Withdrawal
ofthemeasures istheonlywaytobring them intoconformity withtheSPSAgreement .While the
European Communities isfreetoundertake riskassessments foranyofthehormones concerned at
anytime, conducting such ariskassessment does notconstitute compliance with theDSB
recommendations andrulings. Accordingly, theEuropean Communities should havealready started
taking thenecessary legislative steps towithdraw theinconsistent measures.
21. Canada submits thatcondoning theECrequest fortwoyears toconduct ariskassessment would
"reward" theEuropean Communities forfailing tobaseitsimpugned measures onariskassessment,
asrequired byArticle 5.1oftheSPSAgreement .Thiswould permit theEuropean Communities to
continue toblock imports ofbeeffromCanada forafurther twoyears before theEuropean Communities
eveninitiates thenecessary legislative process tobring itsmeasures intocompliance withtheSPS
Agreement ,andwould invite abuse ofArticle 5.1oftheSPSAgreement .TheEuropean Communities
hasnotargued thatitsmeasures wereprovisionally adopted pursuant toArticle 5.7oftheSPSAgreement
because relevant scientific information wasinsufficient. However, onthebasisoftheAppellate Body
Report, theEuropean Communities purports torequire timetoundertake ariskassessment. The
European Communities is,ineffect, claiming thebenefits ofArticle 5.7oftheSPSAgreement inthe
guise ofimplementing theDSBrecommendations andrulings. Ithasbeentwoyears since theUnited
States andCanada requested separate consultations withtheEuropean Communities inthisdispute.
Thus, theEuropean Communities hashadample reason andopportunity toconduct theriskassessment
itargues thatitnowmust conduct.
22. Finally, Canada submits thattheEuropean Communities could complete therequired legislative
process insignificantly lessthan15months. Asthemeasures thatmustbebrought intoconformity
withtheSPSAgreement arebased onArticle 43oftheECTreaty ,amendment orrepeal ofthesemeasures
could bedone pursuant totheconsultation procedure and,under theexisting lawoftheEuropean
Communities24,would notlegally require theco-decision procedure under Articles 100aand189bof
24Canada states thatregardless ofanycasethatmaycurrently bepending before theEuropean Court ofJustice, existing
caselawholds thatArticle 43oftheECTreaty istheappropriate legal basis formodifying anagricultural measure such
astheoneatissue inthiscase.WT/DS26/15
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theECTreaty .Theconsultation procedure required byArticle 43oftheECTreaty canbecompleted
inaperiod much shorter than15months, i.e.,inaperiod ofapproximately eight months. Canada
submits thatapolicy choice bytheEuropean Communities infavour oftheco-decision procedure under
Article189boftheECTreaty,whichgoesbeyondthestrictlylegalrequirementsofEuropeanCommunity
law,should notbetaken intoaccount as"particular circumstances" thatwould impact onthe
determination ofwhatconstitutes a"reasonable period oftime". Even iftheco-decision procedure
werenecessary, there isevidence thatthisprocedure would take18months onaverage, andcantake
lessthan15months.
III. Article 21.3oftheDSU
23. Article 21.3oftheDSU provides, inpart,asfollows:
...theMember concerned shallinform theDSBofitsintentions in
respect ofimplementation oftherecommendations andrulings ofthe
DSB. Ifitisimpracticable tocomply immediately with the
recommendations andrulings, theMember concerned shall have a
reasonable period oftimeinwhich todoso.Thereasonable period
oftimeshallbe:
...
(c) aperiodoftimedeterminedthroughbindingarbitration
within 90days after thedateofadoption ofthe
recommendations andrulings. Insucharbitration, a
guideline forthearbitrator should bethatthe
reasonable period oftime toimplement panel or
Appellate Body recommendations should notexceed
15months from thedateofadoption ofapanel or
Appellate Body report. However, thattimemaybe
shorter orlonger, depending upon theparticular
circumstances.
24. Mymandate inthisarbitration istodetermine thereasonable period oftimewithin which the
European Communities isrequired toimplement therecommendations andrulings oftheDSB. As
a"guideline", Article 21.3(c) provides thatthereasonable period oftime"should notexceed 15months
fromthedateofadoption ofapanel orAppellate Body report." However, "thattimemaybeshorter
orlonger, depending upon theparticular circumstances."WT/DS26/15
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25. Theordinary meaning oftheterms ofArticle 21.3(c) indicates that15months isa"guideline
forthearbitrator", andnotarule. Thisguideline isstated expressly tobethat"thereasonable period
oftime...should notexceed 15months fromthedateofadoption ofapanel orAppellate Body report"
(emphasis added). Inother words, the15-month guideline isanouter limitoramaximum intheusual
case. Forexample, when implementation canbeeffected byadministrative means, thereasonable
period oftimeshould beconsiderably shorter than15months. However, thereasonable period of
time could beshorter orlonger, depending upon theparticular circumstances, asspecified in
Article 21.3(c).
26. Article 21.3(c) alsoshould beinterpreted initscontext andinlightoftheobject andpurpose
oftheDSU. Relevant considerations inthisrespect include other provisions oftheDSU, including,
inparticular, Articles 21.1 and3.3. Article 21.1 stipulates that: "Prompt compliance with
recommendations andrulings oftheDSBisessential inorder toensure effective resolution ofdisputes
tothebenefit ofallMembers" (emphasis added). Article 3.3states: "Theprompt settlement ofsituations
inwhich aMember considers thatanybenefits accruing toitdirectly orindirectly under thecovered
agreements arebeing impaired bymeasures taken byanother Member isessential totheeffective
functioning oftheWTO andthemaintenance ofaproper balance between therights andobligations
ofMembers"(emphasisadded).TheConciseOxfordDictionarydefinestheword,"prompt",asmeaning
"a.acting withalacrity; ready. b.made, done, etc.readily oratonce".25Read incontext, itisclear
thatthereasonable period oftime, asdetermined under Article 21.3(c), should betheshortest period
possible within thelegalsystem oftheMember toimplement therecommendations andrulings ofthe
DSB. Intheusual case, thisshould notbegreater than15months, butcould alsobeless.
27. Inmyview, theparty seeking toprove thatthere are"particular circumstances" justifying a
shorter oralonger timehastheburden ofproof under Article 21.3(c). Inthisarbitration, therefore,
theonusisontheEuropean Communities todemonstrate thatthereareparticular circumstances which
callforareasonable period oftimeof39months, anditislikewise uptotheUnited States andCanada
todemonstrate thatthere areparticular circumstances which leadtotheconclusion that10months is
reasonable.
25D.Thomson (ed.), TheConcise Oxford Dictionary ofCurrent English ,ninth ed.(Clarendon Press, 1995), p.1096.WT/DS26/15
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IV. Longer Period than15Months
28. TheEuropean Communities maintains that,inthiscase, there are"particular circumstances"
justifying areasonable period oftimeof39months26intotal. Itargues thatthereasonable period of
timeneeded toimplement therecommendations andrulings oftheDSBcanbeseparated intotwodistinct
phases: (a)aminimum oftwoyears tocomplete thehormone-specific andresidue-specific risk
assessments forallthehormones concerned, including anevaluation oftherisksposed tohuman health
fromfailure toobserve goodveterinary practice27;and(b)aperiod of15months totakeanylegislative
action required, inlightoftheresults oftheriskassessments.28
29. Iwillfirstaddress whether "theparticular circumstances" inthiscaseallow theEuropean
Communities aninitial phase oftwoyears toconduct theriskassessments which itmaintains are
"mandated"29bythefindings andconclusions oftheAppellate Body Report.
30. Article 19.1oftheDSU reads asfollows:
Where apanel ortheAppellate Body concludes thatameasure
isinconsistent withacovered agreement, itshallrecommend thatthe
Member concerned bring themeasure intoconformity with that
agreement. Inaddition toitsrecommendations, thepanel orAppellate
Body maysuggest ways inwhich theMember concerned could
implement therecommendations.
26Initswritten submission, para. 115,theEuropean Communities stated thatitwould require aperiod ofapproximately
fouryears, consisting oftwoyears toconduct ariskassessment andapproximately twoyears foranylegislative process
thatmaybenecessary inlightoftheresults oftheriskassessment. However, initsconcluding statement attheoralhearing,
theEuropean Communities reduced thetimeneeded foranylegislative process to15months. Therefore, thefinalposition
oftheEuropean Communities wasthatareasonable period oftimeforimplementation oftheDSB recommendations and
rulings would beapproximately twoyears and15months, thatis,39months.
27Written submission oftheEuropean Communities, para. 74.
28Statements oftheEuropean Communities attheoralhearing.
29Written submission oftheEuropean Communities, heading 3),page23;statements oftheEuropean Communities at
theoralhearing.WT/DS26/15
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31. Therecommendations andrulings oftheDSBinthiscaseconsist ofthefindings andconclusions
oftheAppellate Body Report andthePanel Reports, asmodified bytheAppellate Body Report, which
wereadopted bytheDSBpursuant toArticles 16.4and17.14 oftheDSU on13February 1998. The
Appellate Body Report contained thefollowing recommendation:
TheAppellate Body recommends thattheDispute Settlement Body
request theEuropean Communities tobring theSPSmeasures found
inthisReport andinthePanel Reports, asmodified bythisReport,
tobeinconsistent withtheSPSAgreement intoconformity withthe
obligations oftheEuropean Communities under thatAgreement.30
ThePanel Reports contained thefollowing recommendation:
WerecommendthattheDisputeSettlementBodyrequeststheEuropean
Communities tobring itsmeasures indispute intoconformity withits
obligations under theAgreement ontheApplication ofSanitary and
Phytosanitary Measures.31
32. Thereisanissueinthisarbitrationastowhatconstitutes"implementationoftherecommendations
andrulings oftheDSB" under Article 21.3oftheDSU. TheEuropean Communities maintains that
theAppellate Body Report "mandates" thatanumber ofscientific studies constituting ariskassessment
beconducted as"anecessary firststep" tobringing theECmeasures intoconformity withthe
SPSAgreement .32TheUnited States andCanada, ontheother hand, argue thatastheECmeasures
were found tobeinconsistent with theobligations oftheEuropean Communities under the
SPSAgreement ,theonlymeans ofbringing them intoconformity withtheDSB'srecommendations
andrulings isbywithdrawing them.
33. TheAppellate Body Report andthePanel Reports, asmodified bytheAppellate Body Report,
found theECimport prohibition tobeinconsistent withtheobligations oftheEuropean Communities
30Appellate Body Report, para. 255.
31USPanel Report, para. 9.2; Canada Panel Report, para. 9.2.
32Written submission oftheEuropean Communities, para. 72andp.23.WT/DS26/15
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under theSPSAgreement ,andrecommended thattheEuropean Communities bring its"measures"
found tobeinconsistent withtheSPSAgreement intoconformity withitsobligations under that
Agreement. Neither theAppellate Body northePanel suggested ways, under Article 19.1oftheDSU,
inwhich theEuropean Communities should implement therecommendations andrulings oftheDSB.
34. TheAppellate Body concluded thattheECimport prohibition ofmeatandmeatproducts derived
from cattle towhich certain hormones hadbeenadministered forgrowth promotion purposes was
inconsistent withtherequirements ofArticles 5.1and3.3oftheSPSAgreement .33TheAppellate Body
agreed withthePanel that"Article 5.1maybeviewed asaspecific application ofthebasic obligations
contained inArticle 2.2oftheSPSAgreement ",andstressed that"Articles 2.2and5.1should constantly
bereadtogether."34TheAppellate Body stated:
Webelieve thatArticle 5.1,when contextually readasitshould be,
inconjunction with andasinformed byArticle 2.2ofthe
SPSAgreement ,requires thattheresults oftheriskassessment must
sufficiently warrant --thatistosay,reasonably support --theSPS
measure atstake. Therequirement thatanSPSmeasure be"based on"
ariskassessment isasubstantive requirement thatthere bearational
relationship between themeasure andtheriskassessment.35
35. TheAppellate Body confirmed thelegalconclusions ofthePanel Reports thattheECimport
prohibition wasinconsistent withArticles 5.1and3.3oftheSPSAgreement .Asindicated above,
theAppellate Body stated thatArticle 5.1mustbereadtogether withArticle 2.2oftheSPSAgreement ,
andrequires that"theresults oftheriskassessment mustsufficiently warrant --thatistosay,reasonably
support --theSPSmeasure atstake." ForanSPSmeasure tobebased onariskassessment, asrequired
under Article 5.1,theremust"bearational relationship between themeasure andtheriskassessment"
(emphasis added). TheAppellate Body examined thescientific studies presented tothePanel bythe
European Communities insupport ofitsmeasures, andaffirmed "theultimate conclusion ofthePanel
thattheECimport prohibition isnotbased onariskassessment within themeaning ofArticles 5.1
and5.2oftheSPSAgreement andis,therefore, inconsistent withtherequirements ofArticle 5.1"
33Appellate Body Report, paras. 208, 209, 253(l).
34Appellate Body Report, para. 180.
35Appellate Body Report, para. 193.WT/DS26/15
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(emphasis added).36Itisimportant tonotethat,despite differences intheinterpretation ofArticles
3.1and5.2oftheSPSAgreement bythePanel andtheAppellate Body, theAppellate Body agreed
withthePanel'sconclusions onevery major point relating towhether theECDirectives atissuewere
"based onanassessment, asappropriate tothecircumstances, oftherisks tohuman ...health" in
accordance withArticle 5.1oftheSPSAgreement .
36. IntheAppellate Body Report, asinthePanel Reports, the"measures" found tobeinconsistent
withtheobligations oftheEuropean Communities under theSPSAgreement were theDirectives37
maintaining theimport prohibition ofmeat andmeat products derived from cattle towhich certain
hormones hadbeenadministered forgrowth promotion purposes. These Directives werecodified and
replaced byDirective 96/22, effective 1July1997, anditisDirective 96/22, therefore, which must
bebrought intoconformity withtheobligations oftheEuropean Communities under theSPSAgreement .
37. Theultimate holding oftheAppellate Body Report, affirming thePanel Reports, isthatthe
ECimport prohibition isnotbased onariskassessment within themeaning ofArticles 5.1and5.2
oftheSPSAgreement ."The essence oftheAppellate Body'sendorsement ofthePanel'sfinding of
inconsistency withArticle 5.1"wasnot,asmaintained bytheEuropean Communities, "theabsence
ofasuitably specific riskassessment".38Thatisnotwhat theAppellate Body found. Rather, the
Appellate Body, agreeing withthePanel, concluded thattheECimport prohibition wasnotbased on
ariskassessment inaccordance withtheprovisions oftheSPSAgreement .These findings constitute
therecommendations andrulings oftheDSB, adopted on13February 1998 under Articles 16.4and
17.14 oftheDSU, which mustbeimplemented bytheEuropean Communities within thereasonable
period oftimeasdetermined bythisarbitration.
38. Itisnotwithin mymandate under Article 21.3(c) oftheDSU, tosuggest ways ormeans to
theEuropean Communities toimplement therecommendations andrulings oftheAppellate BodyReport
andPanel Reports. Mytaskistodetermine thereasonable period oftimewithin which implementation
36Appellate Body Report, para. 208.
37Seefootnote 3.
38Written submission oftheEuropean Communities, para. 56.WT/DS26/15
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mustbecompleted. Article 3.7oftheDSU provides, inrelevant part,that"thefirstobjective ofthe
dispute settlement mechanism isusually tosecure thewithdrawal ofthemeasures concerned ifthese
arefound tobeinconsistent withtheprovisions ofanyofthecovered agreements" (emphasis added).
Although withdrawal ofaninconsistent measure isthepreferred means ofcomplying with the
recommendations andrulings oftheDSBinaviolation case39,itisnotnecessarily theonlymeans of
implementation consistent withthecovered agreements. Animplementing Member, therefore, has
ameasure ofdiscretion inchoosing themeans ofimplementation, aslongasthemeans chosen are
consistent withtherecommendations andrulings oftheDSBandwiththecovered agreements.
39. Withdrawal isthepreferred means ofimplementation under Article 3.7oftheDSU, andprompt
compliance withtherecommendations andrulings oftheDSBisessential under Article 21.1. Itwould
notbeinkeeping withtherequirement ofprompt compliance toinclude inthereasonable period of
time, timetoconduct studies ortoconsult experts todemonstrate theconsistency ofameasure already
judged tobeinconsistent .Thatcannot beconsidered as"particular circumstances" justifying alonger
period thantheguideline suggested inArticle 21.3(c). Thisisnottosaythatthecommissioning of
scientific studies orconsultations withexperts cannot formpartofadomestic implementation process
inaparticular case. However, suchconsiderations arenotpertinent tothedetermination ofthe
reasonable period oftime.
40. Iwould liketoemphasize thattheobligation oftheEuropean Communities tobaseitsmeasures
onanassessment oftheriskstohuman health, inconformity withtheprovisions oftheSPSAgreement ,
commenced on1January 1995 when theWTO Agreement came intoforce.40Article XVI:4 ofthe
WTO Agreement specifically requires every Member to"ensure theconformity ofitslaws, regulations
39Bycontrast, inanon-violation case, brought under Article XXIII:1(b) oftheGATT 1994, Article 26.1(b) oftheDSU
states explicitly that"there isnoobligation towithdraw".
40TheAppellate Body affirmed thePanel'sfinding thattheSPSAgreement doesnotlimitthetemporal application of
itsprovisions toSPSmeasures adopted after1January 1995, butalsoapplies tomeasures which continued ineffect after
theentry intoforce oftheWTO Agreement .TheAppellate Body alsonoted that"themeasure atissue inthisappeal is,since
1July1997, nolonger embodied inthepre-1995 Directives referred toabove, butrather inDirective 96/22, which was
elaborated andenacted after theentry intoforce oftheWTO Agreement .None oftheparties contests thatthecurrently
applicable measure issubject tothedisciplines ofArticles 5.1and5.5oftheSPSAgreement ."Appellate Body Report,
paras. 128-130.WT/DS26/15
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andadministrative procedures withitsobligations" under thecovered agreements. Contrary tothe
European Communities 'arguments thatitdidnotknow thathormone-specific andresidue-specific
assessments wererequired byArticle 5.1oftheSPSAgreement41,theEuropean Communities didnot
needtowaitfortheAppellate Body Report before commissioning scientific studies tosupport itsimport
ban. Indeed, theEuropean Communities seemed torecognize thiswhen itconvened theScientific
Conference onGrowth Promotion inMeat Production from 29November to1December 1995
specifically toassess whether therewereriskstohuman health fromhormone-treated beef. However,
thestudies fromthatScientific Conference werefound bythePanel, andconfirmed bytheAppellate
Body, tonotrationally support theECimport prohibition.42
41. Togrant theEuropean Communities afurther twoyears, fromthedateofadoption bytheDSB
oftheAppellate Body Report andPanel Reports, toconduct theriskassessment thatwasrequired as
of1January 1995would notbeconsistent withtheprovisions oftheDSUrequiring prompt compliance
withDSBrecommendations andrulings, norwiththeobligations oftheEuropean Communities under
theSPSAgreement .
42. Fortheforegoing reasons, itwould notbeproper toinclude inthereasonable period oftime
granted totheEuropean Communities under Article 21.3(c) oftheDSU, aninitial phase oftwoyears
fortheconduct andcompletion ofscientific studies todetermine ifthereisarisktohuman health from
hormone-treated beef.
V. Shorter Period than15Months
43. Having determined thatthetimerequired forconducting ariskassessment cannot beconsidered
as"particular circumstances" justifying anextension ofthereasonable period oftimebeyond 15months,
Iwillturntothearguments made bytheUnited States andCanada thatthere are"particular
circumstances" which would justify areasonable period oftimeof10months.
41Writtensubmi ssionoftheEuropean Communi ties,para.52;statement softheEuropean Communi tiesattheoralhearing.
42Appellate Body Report, para. 197; USPanel Report, para. 8.124; Canada Panel Report, para. 8.127.WT/DS26/15
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44. TheUnited States andCanada argue thatcompliance withtherecommendations andrulings
oftheDSBinthiscasecanonlybeachieved bytherepeal oftheexisting import prohibition, andthat
within theEuropean legislative system, fullimplementation ispracticable within aperiod of10months,
i.e.,by1January 1999. Intheirview, therepeal ofDirective 96/22 canbeeffected bymeans ofthe
consultation procedure under Article 43oftheECTreaty .TheEuropean Communities contests this
point andmaintains thatanymodification ofDirective 96/22 must bebased onArticle 100a ofthe
ECTreaty, andmust beadopted, therefore, under theco-decision procedure provided forinArticle
189b oftheECTreaty .Initswritten submission, theEuropean Communities asserts that:
...theServices oftheCommission havecome totheconclusion that
anacttoabolish oramend theCouncil Directive currently inforce
thatprohibitstheuseofhormones(i.e.Directive96/22/EC)willrequire
another Directive oftheCouncil andtheEuropean Parliament based
onArticle 100A oftheECTreaty. Thisisbecause theprincipal
objective ofthemeasure inquestion istoprotect human health. Any
actbased onArticle 100A must beadopted inaccordance withthe
special co-decision procedure provided forinArticle 189b ofthe
ECTreaty. Inaddition, theopinion oftheEconomic andSocial
Committee isrequired.43
During theoralhearing inthisarbitration, theEuropean Communities asserted that,ifdetermined
necessary inthelightoftheresults oftheriskassessment, itwould takethenecessary legislative steps
toamend orrepeal theexisting Directive 96/22 within aperiod of15months, using theco-decision
procedure provided forinArticle 189b oftheECTreaty .
45. TheUnited States andCanada argued thatthelegalbasisforanylegislative actabolishing or
amending Directive 96/22 should beArticle 43,notArticle 100a, oftheECTreaty ,sincethisDirective
wasbased onArticle 43inthefirstplace. They relyonthedecision oftheEuropean Court ofJustice
inUnited Kingdom v.Council44,inwhich theCourt found thatArticle 43oftheEECTreaty applied
where thelegislation proposed wasdirected bothtotheobjectives ofagricultural policy andtoother
objectives which werepursued onthebasisofArticle 100oftheEECTreaty .However, theEuropean
Communities states thatthisisnolonger good law,andrefers toanaction brought on22July1997
bytheECCommission challenging thelegality ofCouncil Regulation (EC) No.820/97 of21April
43Written submission oftheEuropean Communities, para. 106.
44Case 68/86, [1988] E.C.R. 855.WT/DS26/15
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1997,whichestablishesasystemfortheidentificationandregistrationofbovineanimalsandthelabelling
ofbeefandbeefproducts. TheCouncil adopted thatRegulation under theprovisions ofArticle 43
oftheECTreaty asameasure concerning theproduction andmarketing ofbeef. TheCommission
hasasked theCourt toannul theRegulation forthefollowing reasons:
...where suchanacthasat[sic]itsprincipal objective theprotection
ofhuman health, itmustbebased onArticle 100aoftheECTreaty,
eventhough theactconcerns aproduct included inAnnex IIofthe
Treaty andmight make acontribution, ancillary totheprincipal
objective, totheattainment ofoneormore objectives ofthecommon
agricultural policy. TheCommission considers thatthedevelopment
oftheprovisions oftheECTreaty relating topublic health warrant
areconsideration oftheinterpretation given bytheCourt inthepast
oftherelationship between Article 43andArticle 100oftheEC
Treaty.45(emphasis added)
46. TheEuropean Communities maintains, furthermore, thatregardless ofthecurrent stateofEC
lawonthisissue, thequestion willbemoot when theTreaty ofAmsterdam comes intoforce, which
could beasearly as1January 1999. Article 152(4)(b) oftheTreaty ofAmsterdam explicitly provides
that"measures intheveterinary andphytosanitary fields which have astheir direct objective the
protection ofpublic health" mustbeadopted following theco-decision procedure provided forinArticle
189b oftheECTreaty .
47. Strictly asamatter ofcurrent EClaw,itwould appear thataproposal torepeal ormodify
Directive 96/22 could beinitiated under theprovisions ofArticle 43oftheECTreaty .However, I
ammindful thatwhen theTreaty ofAmsterdam enters intoforce, which could beasearlyas1January
1999, veterinary andphytosanitary measures which haveastheirobjective theprotection ofpublic
health must beadopted bymeans oftheco-decision procedure provided forinArticle 189b ofthe
ECTreaty .TheEuropean Communities hasalsostated thatupon theentry intoforce oftheTreaty
ofAmsterdam ,anylegislative proposal initiated under theconsultation procedure provided forinArticle
43would havetobewithdrawn andreinitiated under theco-decision procedure provided forinArticle
189b oftheECTreaty .46
45Case C-269/97, Official Journal No.C295, 27September 1997, p.17.
46Statement oftheEuropean Communities attheoralhearing.WT/DS26/15
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VI. Award
48. Inlightoftheabove considerations, Idetermine thatthereasonable period oftimeforthe
European Communities toimplement therecommendations andrulings oftheDSB inthiscaseis
15months from thedateofadoption oftheAppellate Body andPanel Reports bytheDSB, thatis,
15months from 13February 1998.
Signed intheoriginal atGeneva this26thdayofMay1998 by:
_________________________
Julio Lacarte-Muró